VI 

AMENDMENT NO. 3739 Calendar No. 349 

Purpose: In the nature of a substitute. 

IN THE SENATE OF THE UNITED STATES—111th Cong., 2d Sess. 

S. 3217 

To promote the financial stability of the United States by 

improving accountability and transparency in the financial system, to end ‘‘too big to fail’’, to protect the 

American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and 

for other purposes. 

April 29, 2010 

Ordered to be printed 

Proposed by Mr. REID for (Mr. DODD (for himself and 

Mrs. LINCOLN)) 

Viz: 

1 Strike all after the enacting clause and insert the fol2 lowing: 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Restoring American Financial Stability Act of 2010’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 


sroberts on DSKH9S0YB1PROD with BILLS
2 

•S 3217 AMDT 3739 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

Sec. 3. Severability. 

Sec. 4. Effective date. 

TITLE I—FINANCIAL STABILITY 

Sec. 101. Short title. 

Sec. 102. Definitions. 

Subtitle A—Financial Stability Oversight Council 

Sec. 111. Financial Stability Oversight Council established. 

Sec. 112. Council authority. 

Sec. 113. Authority to require supervision and regulation of certain nonbank financial companies. 

Sec. 114. Registration of nonbank financial companies supervised by the Board 

of Governors. 

Sec. 115. Enhanced supervision and prudential standards for nonbank financial 

companies supervised by the Board of Governors and certain 

bank holding companies. 

Sec. 116. Reports. 

Sec. 117. Treatment of certain companies that cease to be bank holding companies. 

Sec. 118. Council funding. 

Sec. 119. Resolution of supervisory jurisdictional disputes among member agencies. 

Sec. 120. Additional standards applicable to activities or practices for financial 

stability purposes. 

Sec. 121. Mitigation of risks to financial stability. 

Subtitle B—Office of Financial Research 

Sec. 151. Definitions. 

Sec. 152. Office of Financial Research established. 

Sec. 153. Purpose and duties of the Office. 

Sec. 154. Organizational structure; responsibilities of primary programmatic 

units. 

Sec. 155. Funding. 

Sec. 156. Transition oversight. 

Subtitle C—Additional Board of Governors Authority for Certain Nonbank 

Financial Companies and Bank Holding Companies 

Sec. 161. Reports by and examinations of nonbank financial companies supervised by the Board of Governors. 

Sec. 162. Enforcement. 

Sec. 163. Acquisitions. 

Sec. 164. Prohibition against management interlocks between certain financial 

companies. 

Sec. 165. Enhanced supervision and prudential standards for nonbank financial 

companies supervised by the Board of Governors and certain 

bank holding companies. 

Sec. 166. Early remediation requirements. 

Sec. 167. Affiliations. 

Sec. 168. Regulations. 

Sec. 169. Avoiding duplication. 


sroberts on DSKH9S0YB1PROD with BILLS
3 

•S 3217 AMDT 3739 

Sec. 170. Safe harbor. 

TITLE II—ORDERLY LIQUIDATION AUTHORITY 

Sec. 201. Definitions. 

Sec. 202. Orderly Liquidation Authority Panel. 

Sec. 203. Systemic risk determination. 

Sec. 204. Orderly liquidation. 

Sec. 205. Orderly liquidation of covered brokers and dealers. 

Sec. 206. Mandatory terms and conditions for all orderly liquidation actions. 

Sec. 207. Directors not liable for acquiescing in appointment of receiver. 

Sec. 208. Dismissal and exclusion of other actions. 

Sec. 209. Rulemaking; non-conflicting law. 

Sec. 210. Powers and duties of the corporation. 

Sec. 211. Miscellaneous provisions. 

TITLE III—TRANSFER OF POWERS TO THE COMPTROLLER OF 

THE CURRENCY, THE CORPORATION, AND THE BOARD OF GOVERNORS 

Sec. 300. Short title. 

Sec. 301. Purposes. 

Sec. 302. Definition. 

Subtitle A—Transfer of Powers and Duties 

Sec. 311. Transfer date. 

Sec. 312. Powers and duties transferred. 

Sec. 313. Abolishment. 

Sec. 314. Amendments to the Revised Statutes. 

Sec. 315. Federal information policy. 

Sec. 316. Savings provisions. 

Sec. 317. References in Federal law to Federal banking agencies. 

Sec. 318. Funding. 

Sec. 319. Contracting and leasing authority. 

Subtitle B—Transitional Provisions 

Sec. 321. Interim use of funds, personnel, and property. 

Sec. 322. Transfer of employees. 

Sec. 323. Property transferred. 

Sec. 324. Funds transferred. 

Sec. 325. Disposition of affairs. 

Sec. 326. Continuation of services. 

Subtitle C—Federal Deposit Insurance Corporation 

Sec. 331. Deposit insurance reforms. 

Sec. 332. Management of the Federal Deposit Insurance Corporation. 

Subtitle D—Termination of Federal Thrift Charter 

Sec. 341. Termination of Federal savings associations. 

Sec. 342. Branching. 

TITLE IV—REGULATION OF ADVISERS TO HEDGE FUNDS AND 

OTHERS 


sroberts on DSKH9S0YB1PROD with BILLS
4 

•S 3217 AMDT 3739 

Sec. 401. Short title. 

Sec. 402. Definitions. 

Sec. 403. Elimination of private adviser exemption; limited exemption for foreign private advisers; limited intrastate exemption. 

Sec. 404. Collection of systemic risk data; reports; examinations; disclosures. 

Sec. 405. Disclosure provision eliminated. 

Sec. 406. Clarification of rulemaking authority. 

Sec. 407. Exemption of venture capital fund advisers. 

Sec. 408. Exemption of and record keeping by private equity fund advisers. 

Sec. 409. Family offices. 

Sec. 410. State and Federal responsibilities; asset threshold for Federal registration of investment advisers. 

Sec. 411. Custody of client assets. 

Sec. 412. Adjusting the accredited investor standard for inflation. 

Sec. 413. GAO study and report on accredited investors. 

Sec. 414. GAO study on self-regulatory organization for private funds. 

Sec. 415. Commission study and report on short selling. 

Sec. 416. Transition period. 

TITLE V—INSURANCE 

Subtitle A—Office of National Insurance 

Sec. 501. Short title. 

Sec. 502. Establishment of Office of National Insurance. 

Subtitle B—State-based Insurance Reform 

Sec. 511. Short title. 

Sec. 512. Effective date. 

PART I—NONADMITTED INSURANCE

Sec. 521. Reporting, payment, and allocation of premium taxes. 

Sec. 522. Regulation of nonadmitted insurance by insured’s home State. 

Sec. 523. Participation in national producer database. 

Sec. 524. Uniform standards for surplus lines eligibility. 

Sec. 525. Streamlined application for commercial purchasers. 

Sec. 526. GAO study of nonadmitted insurance market. 

Sec. 527. Definitions. 

PART II—REINSURANCE

Sec. 531. Regulation of credit for reinsurance and reinsurance agreements. 

Sec. 532. Regulation of reinsurer solvency. 

Sec. 533. Definitions. 

PART III—RULE OF CONSTRUCTION

Sec. 541. Rule of construction. 

Sec. 542. Severability. 

TITLE VI—IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS 

Sec. 601. Short title. 

Sec. 602. Definition. 


sroberts on DSKH9S0YB1PROD with BILLS
5 

•S 3217 AMDT 3739 

Sec. 603. Moratorium and study on treatment of credit card banks, industrial 

loan companies, and certain other companies under the Bank 

Holding Company Act of 1956. 

Sec. 604. Reports and examinations of holding companies; regulation of functionally regulated subsidiaries. 

Sec. 605. Assuring consistent oversight of permissible activities of depository 

institution subsidiaries of holding companies. 

Sec. 606. Requirements for financial holding companies to remain well capitalized and well managed. 

Sec. 607. Standards for interstate acquisitions. 

Sec. 608. Enhancing existing restrictions on bank transactions with affiliates. 

Sec. 609. Eliminating exceptions for transactions with financial subsidiaries. 

Sec. 610. Lending limits applicable to credit exposure on derivative transactions, repurchase agreements, reverse repurchase agreements, and securities lending and borrowing transactions. 

Sec. 611. Application of national bank lending limits to insured State banks. 

Sec. 612. Restriction on conversions of troubled banks. 

Sec. 613. De novo branching into States. 

Sec. 614. Lending limits to insiders. 

Sec. 615. Limitations on purchases of assets from insiders. 

Sec. 616. Regulations regarding capital levels of holding companies. 

Sec. 617. Elimination of elective investment bank holding company framework. 

Sec. 618. Securities holding companies. 

Sec. 619. Restrictions on capital market activity by banks and bank holding 

companies. 

Sec. 620. Concentration limits on large financial firms. 

TITLE VII—WALL STREET TRANSPARENCY AND 

ACCOUNTABILITY 

Sec. 701. Short title. 

Subtitle A—Regulation of Over-the-Counter Swaps Markets 

PART I—REGULATORY AUTHORITY

Sec. 711. Definitions. 

Sec. 712. Review of regulatory authority. 

Sec. 713. Recommendations for changes to portfolio margining laws. 

Sec. 714. Abusive swaps. 

Sec. 715. Authority to prohibit participation in swap activities. 

Sec. 716. Prohibition against Federal Government bailouts of swaps entities. 

Sec. 717. New product approval – CFTC-SEC process. 

Sec. 718. Determining status of novel derivative products. 

PART II—REGULATION OF SWAP MARKETS

Sec. 721. Definitions. 

Sec. 722. Jurisdiction. 

Sec. 723. Clearing. 

Sec. 724. Swaps; segregation and bankruptcy treatment. 

Sec. 725. Derivatives clearing organizations. 

Sec. 726. Rulemaking on conflict of interest. 

Sec. 727. Public reporting of swap transaction data. 

Sec. 728. Swap data repositories. 

Sec. 729. Reporting and recordkeeping. 

Sec. 730. Large swap trader reporting. 


sroberts on DSKH9S0YB1PROD with BILLS
6 

•S 3217 AMDT 3739 

Sec. 731. Registration and regulation of swap dealers and major swap participants. 

Sec. 732. Conflicts of interest. 

Sec. 733. Swap execution facilities. 

Sec. 734. Derivatives transaction execution facilities and exempt boards of 

trade. 

Sec. 735. Designated contract markets. 

Sec. 736. Margin. 

Sec. 737. Position limits. 

Sec. 738. Foreign boards of trade. 

Sec. 739. Legal certainty for swaps. 

Sec. 740. Multilateral clearing organizations. 

Sec. 741. Enforcement. 

Sec. 742. Retail commodity transactions. 

Sec. 743. Other authority. 

Sec. 744. Restitution remedies. 

Sec. 745. Enhanced compliance by registered entities. 

Sec. 746. Insider trading. 

Sec. 747. Antidisruptive practices authority. 

Sec. 748. Commodity whistleblower incentives and protection. 

Sec. 749. Conforming amendments. 

Sec. 750. Study on oversight of carbon markets. 

Sec. 751. Energy and Environmental Markets Advisory Committee. 

Sec. 752. International harmonization. 

Sec. 753. Effective date. 

Subtitle B—Regulation of Security-Based Swap Markets 

Sec. 761. Definitions under the Securities Exchange Act of 1934. 

Sec. 762. Repeal of prohibition on regulation of security-based swap agreements. 

Sec. 763. Amendments to the Securities Exchange Act of 1934. 

Sec. 764. Registration and regulation of security-based swap dealers and major 

security-based swap participants. 

Sec. 765. Rulemaking on conflict of interest. 

Sec. 766. Reporting and recordkeeping. 

Sec. 767. State gaming and bucket shop laws. 

Sec. 768. Amendments to the Securities Act of 1933; treatment of securitybased swaps. 

Sec. 769. Definitions under the Investment Company Act of 1940. 

Sec. 770. Definitions under the Investment Advisors Act of 1940. 

Sec. 771. Other authority. 

Sec. 772. Jurisdiction. 

Sec. 773. Effective date. 

TITLE VIII—PAYMENT, CLEARING, AND SETTLEMENT 

SUPERVISION 

Sec. 801. Short title. 

Sec. 802. Findings and purposes. 

Sec. 803. Definitions. 

Sec. 804. Designation of systemic importance. 

Sec. 805. Standards for systemically important financial market utilities and 

payment, clearing, or settlement activities. 

Sec. 806. Operations of designated financial market utilities. 


sroberts on DSKH9S0YB1PROD with BILLS
7 

•S 3217 AMDT 3739 

Sec. 807. Examination of and enforcement actions against designated financial 

market utilities. 

Sec. 808. Examination of and enforcement actions against financial institutions 

subject to standards for designated activities. 

Sec. 809. Requests for information, reports, or records. 

Sec. 810. Rulemaking. 

Sec. 811. Other authority. 

Sec. 812. Effective date. 

TITLE IX—INVESTOR PROTECTIONS AND IMPROVEMENTS TO 

THE REGULATION OF SECURITIES 

Subtitle A—Increasing Investor Protection 

Sec. 911. Investor Advisory Committee established. 

Sec. 912. Clarification of authority of the Commission to engage in investor 

testing. 

Sec. 913. Study and rulemaking regarding obligations of brokers, dealers, and 

investment advisers. 

Sec. 914. Office of the Investor Advocate. 

Sec. 915. Streamlining of filing procedures for self-regulatory organizations. 

Sec. 916. Study regarding financial literacy among investors. 

Sec. 917. Study regarding mutual fund advertising. 

Sec. 918. Clarification of Commission authority to require investor disclosures 

before purchase of investment products and services. 

Sec. 919. Study on conflicts of interest. 

Sec. 919A. Study on improved investor access to information on investment advisers and broker-dealers. 

Sec. 919B. Study on financial planners and the use of financial designations. 

Subtitle B—Increasing Regulatory Enforcement and Remedies 

Sec. 921. Authority to issue rules related to mandatory predispute arbitration. 

Sec. 922. Whistleblower protection. 

Sec. 923. Conforming amendments for whistleblower protection. 

Sec. 924. Implementation and transition provisions for whistleblower protection. 

Sec. 925. Collateral bars. 

Sec. 926. Authority of State regulators over Regulation D offerings. 

Sec. 927. Equal treatment of self-regulatory organization rules. 

Sec. 928. Clarification that Section 205 of the Investment Advisers Act of 1940 

does not apply to State-registered advisers. 

Sec. 929. Unlawful margin lending. 

Sec. 929A. Protection for employees of subsidiaries and affiliates of publicly 

traded companies. 

Sec. 929B. FAIR Fund amendments. 

Sec. 929C. Increasing the borrowing limit on Treasury loans. 

Subtitle C—Improvements to the Regulation of Credit Rating Agencies 

Sec. 931. Findings. 

Sec. 932. Enhanced regulation, accountability, and transparency of nationally 

recognized statistical rating organizations. 

Sec. 933. State of mind in private actions. 

Sec. 934. Referring tips to law enforcement or regulatory authorities. 

Sec. 935. Consideration of information from sources other than the issuer in 

rating decisions. 

Sec. 936. Qualification standards for credit rating analysts. 


sroberts on DSKH9S0YB1PROD with BILLS
8 

•S 3217 AMDT 3739 

Sec. 937. Timing of regulations. 

Sec. 938. Universal ratings symbols. 

Sec. 939. Government Accountability Office study and Federal agency review of 

required uses of nationally recognized statistical rating organization ratings. 

Sec. 939A. Securities and Exchange Commission study on strengthening credit 

rating agency independence. 

Sec. 939B. Government Accountability Office study on alternative business 

models. 

Sec. 939C. Government Accountability Office study on the creation of an independent professional analyst organization. 

Subtitle D—Improvements to the Asset-Backed Securitization Process 

Sec. 941. Regulation of credit risk retention. 

Sec. 942. Disclosures and reporting for asset-backed securities. 

Sec. 943. Representations and warranties in asset-backed offerings. 

Sec. 944. Exempted transactions under the Securities Act of 1933. 

Sec. 945. Due diligence analysis and disclosure in asset-backed securities 

issues. 

Subtitle E—Accountability and Executive Compensation 

Sec. 951. Shareholder vote on executive compensation disclosures. 

Sec. 952. Compensation committee independence. 

Sec. 953. Executive compensation disclosures. 

Sec. 954. Recovery of erroneously awarded compensation. 

Sec. 955. Disclosure regarding employee and director hedging. 

Sec. 956. Excessive compensation by holding companies of depository institutions. 

Sec. 957. Voting by brokers. 

Subtitle F—Improvements to the Management of the Securities and 

Exchange Commission 

Sec. 961. Report and certification of internal supervisory controls. 

Sec. 962. Triennial report on personnel management. 

Sec. 963. Annual financial controls audit. 

Sec. 964. Report on oversight of national securities associations. 

Sec. 965. Compliance examiners. 

Sec. 966. Suggestion program for employees of the Commission. 

Subtitle G—Strengthening Corporate Governance 

Sec. 971. Election of directors by majority vote in uncontested elections. 

Sec. 972. Proxy access. 

Sec. 973. Disclosures regarding chairman and CEO structures. 

Subtitle H—Municipal Securities 

Sec. 975. Regulation of municipal securities and changes to the board of the 

MSRB. 

Sec. 976. Government Accountability Office study of increased disclosure to investors. 

Sec. 977. Government Accountability Office study on the municipal securities 

markets. 

Sec. 978. Study of funding for Government Accounting Standards Board. 


sroberts on DSKH9S0YB1PROD with BILLS
9 

•S 3217 AMDT 3739 

Sec. 979. Commission Office of Municipal Securities. 

Subtitle I—Public Company Accounting Oversight Board, Portfolio Margining, 

and Other Matters 

Sec. 981. Authority to share certain information with foreign authorities. 

Sec. 982. Oversight of brokers and dealers. 

Sec. 983. Portfolio margining. 

Sec. 984. Loan or borrowing of securities. 

Sec. 985. Technical corrections to Federal securities laws. 

Sec. 986. Conforming amendments relating to repeal of the Public Utility Holding Company Act of 1935. 

Sec. 987. Amendment to definition of material loss and nonmaterial losses to 

the Deposit Insurance Fund for purposes of Inspector General 

reviews. 

Sec. 988. Amendment to definition of material loss and nonmaterial losses to 

the National Credit Union Share Insurance Fund for purposes 

of Inspector General reviews. 

Sec. 989. Government Accountability Office study on proprietary trading. 

Sec. 989A. Senior investor protections. 

Sec. 989B. Changes in appointment of certain Inspectors General. 

Subtitle J—Self-funding of the Securities and Exchange Commission 

Sec. 991. Securities and Exchange Commission self-funding. 

TITLE X—BUREAU OF CONSUMER FINANCIAL PROTECTION 

Sec. 1001. Short title. 

Sec. 1002. Definitions. 

Subtitle A—Bureau of Consumer Financial Protection 

Sec. 1011. Establishment of the Bureau. 

Sec. 1012. Executive and administrative powers. 

Sec. 1013. Administration. 

Sec. 1014. Consumer Advisory Board. 

Sec. 1015. Coordination. 

Sec. 1016. Appearances before and reports to Congress. 

Sec. 1017. Funding; penalties and fines. 

Sec. 1018. Effective date. 

Subtitle B—General Powers of the Bureau 

Sec. 1021. Purpose, objectives, and functions. 

Sec. 1022. Rulemaking authority. 

Sec. 1023. Review of Bureau regulations. 

Sec. 1024. Supervision of nondepository covered persons. 

Sec. 1025. Supervision of very large banks, savings associations, and credit 

unions. 

Sec. 1026. Other banks, savings associations, and credit unions. 

Sec. 1027. Limitations on authorities of the Bureau; preservation of authorities. 

Sec. 1028. Authority to restrict mandatory pre-dispute arbitration. 

Sec. 1029. Effective date. 

Subtitle C—Specific Bureau Authorities 


sroberts on DSKH9S0YB1PROD with BILLS
10 

•S 3217 AMDT 3739 

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices. 

Sec. 1032. Disclosures. 

Sec. 1033. Consumer rights to access information. 

Sec. 1034. Response to consumer complaints and inquiries. 

Sec. 1035. Private education loan ombudsman. 

Sec. 1036. Prohibited acts. 

Sec. 1037. Effective date. 

Subtitle D—Preservation of State Law 

Sec. 1041. Relation to State law. 

Sec. 1042. Preservation of enforcement powers of States. 

Sec. 1043. Preservation of existing contracts. 

Sec. 1044. State law preemption standards for national banks and subsidiaries 

clarified. 

Sec. 1045. Clarification of law applicable to nondepository institution subsidiaries. 

Sec. 1046. State law preemption standards for Federal savings associations and 

subsidiaries clarified. 

Sec. 1047. Visitorial standards for national banks and savings associations. 

Sec. 1048. Effective date. 

Subtitle E—Enforcement Powers 

Sec. 1051. Definitions. 

Sec. 1052. Investigations and administrative discovery. 

Sec. 1053. Hearings and adjudication proceedings. 

Sec. 1054. Litigation authority. 

Sec. 1055. Relief available. 

Sec. 1056. Referrals for criminal proceedings. 

Sec. 1057. Employee protection. 

Sec. 1058. Effective date. 

Subtitle F—Transfer of Functions and Personnel; Transitional Provisions 

Sec. 1061. Transfer of consumer financial protection functions. 

Sec. 1062. Designated transfer date. 

Sec. 1063. Savings provisions. 

Sec. 1064. Transfer of certain personnel. 

Sec. 1065. Incidental transfers. 

Sec. 1066. Interim authority of the Secretary. 

Sec. 1067. Transition oversight. 

Subtitle G—Regulatory Improvements 

Sec. 1071. Collection of deposit account data. 

Sec. 1072. Small business data collection. 

Sec. 1073. GAO study on the effectiveness and impact of various appraisal 

methods. 

Sec. 1074. Prohibition on certain prepayment penalties. 

Sec. 1075. Assistance for economically vulnerable individuals and families. 

Sec. 1076. Remittance transfers. 

Subtitle H—Conforming Amendments 

Sec. 1081. Amendments to the Inspector General Act. 

Sec. 1082. Amendments to the Privacy Act of 1974. 


sroberts on DSKH9S0YB1PROD with BILLS
11 

•S 3217 AMDT 3739 

Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act of 

1982. 

Sec. 1084. Amendments to the Electronic Fund Transfer Act. 

Sec. 1085. Amendments to the Equal Credit Opportunity Act. 

Sec. 1086. Amendments to the Expedited Funds Availability Act. 

Sec. 1087. Amendments to the Fair Credit Billing Act. 

Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and Accurate Credit Transactions Act. 

Sec. 1089. Amendments to the Fair Debt Collection Practices Act. 

Sec. 1090. Amendments to the Federal Deposit Insurance Act. 

Sec. 1091. Amendments to the Gramm-Leach-Bliley Act. 

Sec. 1092. Amendments to the Home Mortgage Disclosure Act. 

Sec. 1093. Amendments to the Homeowners Protection Act of 1998. 

Sec. 1094. Amendments to the Home Ownership and Equity Protection Act of 

1994. 

Sec. 1095. Amendments to the Omnibus Appropriations Act, 2009. 

Sec. 1096. Amendments to the Real Estate Settlement Procedures Act. 

Sec. 1097. Amendments to the Right to Financial Privacy Act of 1978. 

Sec. 1098. Amendments to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. 

Sec. 1099. Amendments to the Truth in Lending Act. 

Sec. 1100. Amendments to the Truth in Savings Act. 

Sec. 1101. Amendments to the Telemarketing and Consumer Fraud and Abuse 

Prevention Act. 

Sec. 1102. Amendments to the Paperwork Reduction Act. 

Sec. 1103. Adjustments for inflation in the Truth in Lending Act. 

Sec. 1104. Effective date. 

TITLE XI—FEDERAL RESERVE SYSTEM PROVISIONS 

Sec. 1151. Federal Reserve Act amendments on emergency lending authority. 

Sec. 1152. Reviews of special Federal Reserve credit facilities. 

Sec. 1153. Public access to information. 

Sec. 1154. Liquidity event determination. 

Sec. 1155. Emergency financial stabilization. 

Sec. 1156. Additional related amendments. 

Sec. 1157. Federal Reserve Act amendments on Federal reserve bank governance. 

Sec. 1158. Amendments to the Federal Reserve Act relating to supervision and 

regulation policy. 

TITLE XII—IMPROVING ACCESS TO MAINSTREAM FINANCIAL 

INSTITUTIONS 

Sec. 1201. Short title. 

Sec. 1202. Purpose. 

Sec. 1203. Definitions. 

Sec. 1204. Expanded access to mainstream financial institutions. 

Sec. 1205. Low-cost alternatives to payday loans. 

Sec. 1206. Grants to establish loan-loss reserve funds. 

Sec. 1207. Procedural provisions. 

Sec. 1208. Authorization of appropriations. 

Sec. 1209. Regulations. 

Sec. 1210. Evaluation and reports to Congress. 


sroberts on DSKH9S0YB1PROD with BILLS
12 

•S 3217 AMDT 3739 

1 SEC. 2. DEFINITIONS. 

2 As used in this Act, the following definitions shall 

3 apply, except as the context otherwise requires or as other4 wise specifically provided in this Act: 

5 (1) AFFILIATE.—The term ‘‘affiliate’’ means 

6 any company that controls, is controlled by, or is 

7 under common control with another company. 

8 (2) APPROPRIATE FEDERAL BANKING AGEN9 CY.—On and after the transfer date, the term ‘‘ap10 propriate Federal banking agency’’ has the same 

11 meaning as in section 3(q) of the Federal Deposit 

12 Insurance Act (12 U.S.C. 1813(q)), as amended by 

13 title III. 

14 (3) BOARD OF GOVERNORS.—The term ‘‘Board 

15 of Governors’’ means the Board of Governors of the 

16 Federal Reserve System. 

17 (4) BUREAU.—The term ‘‘Bureau’’ means the 

18 Bureau of Consumer Financial Protection estab19 lished under title X. 

20 (5) COMMISSION.—The term ‘‘Commission’’ 

21 means the Securities and Exchange Commission, ex22 cept in the context of the Commodity Futures Trad23 ing Commission. 

24 (6) CORPORATION.—The term ‘‘Corporation’’ 

25 means the Federal Deposit Insurance Corporation. 


sroberts on DSKH9S0YB1PROD with BILLS
13 

•S 3217 AMDT 3739 

1 (7) COUNCIL.—The term ‘‘Council’’ means the 

2 Financial Stability Oversight Council established 

3 under title I. 

4 (8) CREDIT UNION.—The term ‘‘credit union’’ 

5 means a Federal credit union, State credit union, or 

6 State-chartered credit union, as those terms are de7 fined in section 101 of the Federal Credit Union Act 

8 (12 U.S.C. 1752). 

9 (9) FEDERAL BANKING AGENCY.—The term— 

10 (A) ‘‘Federal banking agency’’ means, indi11 vidually, the Board of Governors, the Office of 

12 the Comptroller of the Currency, and the Cor13 poration; and 

14 (B) ‘‘Federal banking agencies’’ means all 

15 of the agencies referred to in subparagraph (A), 

16 collectively. 

17 (10) FUNCTIONALLY REGULATED SUB18 SIDIARY.—The term ‘‘functionally regulated sub19 sidiary’’ has the same meaning as in section 5(c)(5) 

20 of the Bank Holding Company Act of 1956 (12 

21 U.S.C. 1844(c)(5)). 

22 (11) PRIMARY FINANCIAL REGULATORY AGEN23 CY.—The term ‘‘primary financial regulatory agen24 cy’’ means— 


sroberts on DSKH9S0YB1PROD with BILLS
14 

•S 3217 AMDT 3739 

1 (A) the appropriate Federal banking agen2 cy, with respect to institutions described in sec3 tion 3(q) of the Federal Deposit Insurance Act, 

4 except to the extent that an institution is or the 

5 activities of an institution are otherwise subject 

6 to the jurisdiction of an agency listed in sub7 paragraph (B), (C), (D), or (E); 

8 (B) the Securities and Exchange Commis9 sion, with respect to— 

10 (i) any broker or dealer that is reg11 istered with the Commission under the Se12 curities Exchange Act of 1934; 

13 (ii) any investment company that is 

14 registered with the Commission under the 

15 Investment Company Act of 1940; 

16 (iii) any investment adviser that is 

17 registered with the Commission under the 

18 Investment Advisers Act of 1940, with re19 spect to the investment advisory activities 

20 of such company and activities that are in21 cidental to such advisory activities; and 

22 (iv) any clearing agency registered 

23 with the Commission under the Securities 

24 Exchange Act of 1934; 


sroberts on DSKH9S0YB1PROD with BILLS
15 

•S 3217 AMDT 3739 

1 (C) the Commodity Futures Trading Com2 mission, with respect to any futures commission 

3 merchant, any commodity trading adviser, and 

4 any commodity pool operator registered with 

5 the Commodity Futures Trading Commission 

6 under the Commodity Exchange Act, with re7 spect to the commodities activities of such enti8 ty and activities that are incidental to such 

9 commodities activities; 

10 (D) the State insurance authority of the 

11 State in which an insurance company is domi12 ciled, with respect to the insurance activities 

13 and activities that are incidental to such insur14 ance activities of an insurance company that is 

15 subject to supervision by the State insurance 

16 authority under State insurance law; and 

17 (E) the Federal Housing Finance Agency, 

18 with respect to Federal Home Loan Banks or 

19 the Federal Home Loan Bank System, and 

20 with respect to the Federal National Mortgage 

21 Association or the Federal Home Loan Mort22 gage Corporation. 

23 (12) PRUDENTIAL STANDARDS.—The term 

24 ‘‘prudential standards’’ means enhanced supervision 


sroberts on DSKH9S0YB1PROD with BILLS
16 

•S 3217 AMDT 3739 

1 and regulatory standards developed by the Board of 

2 Governors under section 115 or 165. 

3 (13) SECRETARY.—The term ‘‘Secretary’’ 

4 means the Secretary of the Treasury. 

5 (14) SECURITIES TERMS.—The— 

6 (A) terms ‘‘broker’’, ‘‘dealer’’, ‘‘issuer’’, 

7 ‘‘nationally recognized statistical ratings organi8 zation’’, ‘‘security’’, and ‘‘securities laws’’ have 

9 the same meanings as in section 3 of the Secu10 rities Exchange Act of 1934 (15 U.S.C. 78c); 

11 (B) term ‘‘investment adviser’’ has the 

12 same meaning as in section 202 of the Invest13 ment Advisers Act of 1940 (15 U.S.C. 80b–2); 

14 and 

15 (C) term ‘‘investment company’’ has the 

16 same meaning as in section 3 of the Investment 

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

18 (15) STATE.—The term ‘‘State’’ means any 

19 State, commonwealth, territory, or possession of the 

20 United States, the District of Columbia, the Com21 monwealth of Puerto Rico, the Commonwealth of the 

22 Northern Mariana Islands, American Samoa, Guam, 

23 or the United States Virgin Islands. 

24 (16) TRANSFER DATE.—The term ‘‘transfer 

25 date’’ means the date established under section 311. 


sroberts on DSKH9S0YB1PROD with BILLS
17 

•S 3217 AMDT 3739 

1 (17) OTHER INCORPORATED DEFINITIONS.— 

2 (A) FEDERAL DEPOSIT INSURANCE ACT.— 

3 The terms ‘‘affiliate’’, ‘‘bank’’, ‘‘bank holding 

4 company’’, ‘‘control’’ (when used with respect to 

5 a depository institution), ‘‘deposit’’, ‘‘depository 

6 institution’’, ‘‘Federal depository institution’’, 

7 ‘‘Federal savings association’’, ‘‘foreign bank’’, 

8 ‘‘including’’, ‘‘insured branch’’, ‘‘insured deposi9 tory institution’’, ‘‘national member bank’’, 

10 ‘‘national nonmember bank’’, ‘‘savings associa11 tion’’, ‘‘State bank’’, ‘‘State depository institu12 tion’’, ‘‘State member bank’’, ‘‘State non13 member bank’’, ‘‘State savings association’’, 

14 and ‘‘subsidiary’’ have the same meanings as in 

15 section 3 of the Federal Deposit Insurance Act 

16 (12 U.S.C. 1813). 

17 (B) HOLDING COMPANIES.—The term— 

18 (i) ‘‘bank holding company’’ has the 

19 same meaning as in section 2 of the Bank 

20 Holding Company Act of 1956 (12 U.S.C. 

21 1841); 

22 (ii) ‘‘financial holding company’’ has 

23 the same meaning as in section 2(p) of the 

24 Bank Holding Company Act of 1956 (12 

25 U.S.C. 1841(p)); and 


sroberts on DSKH9S0YB1PROD with BILLS
18 

•S 3217 AMDT 3739 

1 (iii) ‘‘savings and loan holding com2 pany’’ has the same meaning as in section 

3 10 of the Home Owners’ Loan Act (12 

4 U.S.C. 1467a(a)). 

5 SEC. 3. SEVERABILITY. 

6 If any provision of this Act, an amendment made by 

7 this Act, or the application of such provision or amend8 ment to any person or circumstance is held to be unconsti9 tutional, the remainder of this Act, the amendments made 

10 by this Act, and the application of the provisions of such 

11 to any person or circumstance shall not be affected there12 by. 

13 SEC. 4. EFFECTIVE DATE. 

14 Except as otherwise specifically provided in this Act 

15 or the amendments made by this Act, this Act and such 

16 amendments shall take effect 1 day after the date of en17 actment of this Act. 

18 TITLE I—FINANCIAL STABILITY 

19 SEC. 101. SHORT TITLE. 

20 This title may be cited as the ‘‘Financial Stability Act 

21 of 2010’’. 

22 SEC. 102. DEFINITIONS. 

23 (a) IN GENERAL.—For purposes of this title, unless 

24 the context otherwise requires, the following definitions 

25 shall apply: 


sroberts on DSKH9S0YB1PROD with BILLS
19 

•S 3217 AMDT 3739 

1 (1) BANK HOLDING COMPANY.—The term 

2 ‘‘bank holding company’’ has the same meaning as 

3 in section 2 of the Bank Holding Company Act of 

4 1956 (12 U.S.C. 1841). A foreign bank or company 

5 that is treated as a bank holding company for pur6 poses of the Bank Holding Company Act of 1956, 

7 pursuant to section 8(a) of the International Bank8 ing Act of 1978 (12 U.S.C. 3106(a)), shall be treat9 ed as a bank holding company for purposes of this 

10 title. 

11 (2) CHAIRPERSON.—The term ‘‘Chairperson’’ 

12 means the Chairperson of the Council. 

13 (3) MEMBER AGENCY.—The term ‘‘member 

14 agency’’ means an agency represented by a voting 

15 member of the Council. 

16 (4) NONBANK FINANCIAL COMPANY DEFINI17 TIONS.— 

18 (A) FOREIGN NONBANK FINANCIAL COM19 PANY.—The term ‘‘foreign nonbank financial 

20 company’’ means a company (other than a com21 pany that is, or is treated in the United States 

22 as, a bank holding company or a subsidiary 

23 thereof) that is— 

24 (i) incorporated or organized in a 

25 country other than the United States; and 


sroberts on DSKH9S0YB1PROD with BILLS
20 

•S 3217 AMDT 3739 

1 (ii) substantially engaged in, including 

2 through a branch in the United States, ac3 tivities in the United States that are finan4 cial in nature (as defined in section 4(k) of 

5 the Bank Holding Company Act of 1956). 

6 (B) U.S. NONBANK FINANCIAL COM7 PANY.—The term ‘‘U.S. nonbank financial com8 pany’’ means a company (other than a bank 

9 holding company or a subsidiary thereof, or a 

10 Farm Credit System institution chartered and 

11 subject to the provisions of the Farm Credit 

12 Act of 1971 (12 U.S.C. 2001 et. seq.)) that 

13 is— 

14 (i) incorporated or organized under 

15 the laws of the United States or any State; 

16 and 

17 (ii) substantially engaged in activities 

18 in the United States that are financial in 

19 nature (as defined in section 4(k) of the 

20 Bank Holding Company Act of 1956). 

21 (C) NONBANK FINANCIAL COMPANY.—The 

22 term ‘‘nonbank financial company’’ means a 

23 U.S. nonbank financial company and a foreign 

24 nonbank financial company. 


sroberts on DSKH9S0YB1PROD with BILLS
21 

•S 3217 AMDT 3739 

1 (D) NONBANK FINANCIAL COMPANY SU2 PERVISED BY THE BOARD OF GOVERNORS.— 

3 The term ‘‘nonbank financial company super4 vised by the Board of Governors’’ means a 

5 nonbank financial company that the Council 

6 has determined under section 113 shall be su7 pervised by the Board of Governors. 

8 (5) OFFICE OF FINANCIAL RESEARCH.—The 

9 term ‘‘Office of Financial Research’’ means the of10 fice established under section 152. 

11 (6) SIGNIFICANT INSTITUTIONS.—The terms 

12 ‘‘significant nonbank financial company’’ and ‘‘sig13 nificant bank holding company’’ have the meanings 

14 given those terms by rule of the Board of Governors. 

15 (b) DEFINITIONAL CRITERIA.—The Board of Gov16 ernors shall establish, by regulation, the criteria to deter17 mine whether a company is substantially engaged in activi18 ties in the United States that are financial in nature (as 

19 defined in section 4(k) of the Bank Holding Company Act 

20 of 1956) for purposes of the definitions of the terms ‘‘U.S. 

21 nonbank financial company’’ and ‘‘foreign nonbank finan22 cial company’’ under subsection (a)(4). 

23 (c) FOREIGN NONBANK FINANCIAL COMPANIES.— 

24 For purposes of the authority of the Board of Governors 

25 under this title with respect to foreign nonbank financial 


sroberts on DSKH9S0YB1PROD with BILLS
22 

•S 3217 AMDT 3739 

1 companies, references in this title to ‘‘company’’ or ‘‘sub2 sidiary’’ include only the United States activities and sub3 sidiaries of such foreign company. 

4 Subtitle A—Financial Stability 

5 Oversight Council 

6 SEC. 111. FINANCIAL STABILITY OVERSIGHT COUNCIL ES7 TABLISHED. 

8 (a) ESTABLISHMENT.—Effective on the date of en9 actment of this Act, there is established the Financial Sta10 bility Oversight Council. 

11 (b) MEMBERSHIP.—The Council shall consist of the 

12 following members: 

13 (1) VOTING MEMBERS.—The voting members, 

14 who shall each have 1 vote on the Council shall be— 

15 (A) the Secretary of the Treasury, who 

16 shall serve as Chairperson of the Council; 

17 (B) the Chairman of the Board of Gov18 ernors; 

19 (C) the Comptroller of the Currency; 

20 (D) the Director of the Bureau; 

21 (E) the Chairman of the Commission; 

22 (F) the Chairperson of the Corporation; 

23 (G) the Chairperson of the Commodity Fu24 tures Trading Commission; 


sroberts on DSKH9S0YB1PROD with BILLS
23 

•S 3217 AMDT 3739 

1 (H) the Director of the Federal Housing 

2 Finance Agency; and 

3 (I) an independent member appointed by 

4 the President, by and with the advice and con5 sent of the Senate, having insurance expertise. 

6 (2) NONVOTING MEMBERS.—The Director of 

7 the Office of Financial Research— 

8 (A) shall serve in an advisory capacity as 

9 a nonvoting member of the Council; and 

10 (B) may not be excluded from any of the 

11 proceedings, meetings, discussions, or delibera12 tions of the Council. 

13 (c) TERMS; VACANCY.— 

14 (1) TERMS.—The independent member of the 

15 Council shall serve for a term of 6 years. 

16 (2) VACANCY.—Any vacancy on the Council 

17 shall be filled in the manner in which the original 

18 appointment was made. 

19 (3) ACTING OFFICIALS MAY SERVE.—In the 

20 event of a vacancy in the office of the head of a 

21 member agency or department, and pending the ap22 pointment of a successor, or during the absence or 

23 disability of the head of a member agency or depart24 ment, the acting head of the member agency or deVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00023 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
24 

•S 3217 AMDT 3739 

1 partment shall serve as a member of the Council in 

2 the place of that agency or department head. 

3 (d) TECHNICAL AND PROFESSIONAL ADVISORY COM4 MITTEES.—The Council may appoint such special advi5 sory, technical, or professional committees as may be use6 ful in carrying out the functions of the Council, including 

7 an advisory committee consisting of State regulators, and 

8 the members of such committees may be members of the 

9 Council, or other persons, or both. 

10 (e) MEETINGS.— 

11 (1) TIMING.—The Council shall meet at the call 

12 of the Chairperson or a majority of the members 

13 then serving, but not less frequently than quarterly. 

14 (2) RULES FOR CONDUCTING BUSINESS.—The 

15 Council shall adopt such rules as may be necessary 

16 for the conduct of the business of the Council. Such 

17 rules shall be rules of agency organization, proce18 dure, or practice for purposes of section 553 of title 

19 5, United States Code. 

20 (f) VOTING.—Unless otherwise specified, the Council 

21 shall make all decisions that it is authorized or required 

22 to make by a majority vote of the members then serving. 

23 (g) NONAPPLICABILITY OF FACA.—The Federal Ad24 visory Committee Act (5 U.S.C. App.) shall not apply to 

25 the Council, or to any special advisory, technical, or proVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00024 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
25 

•S 3217 AMDT 3739 

1 fessional committee appointed by the Council, except that, 

2 if an advisory, technical, or professional committee has 

3 one or more members who are not employees of or affili4 ated with the United States Government, the Council shall 

5 publish a list of the names of the members of such com6 mittee. 

7 (h) ASSISTANCE FROM FEDERAL AGENCIES.—Any 

8 department or agency of the United States may provide 

9 to the Council and any special advisory, technical, or pro10 fessional committee appointed by the Council, such serv11 ices, funds, facilities, staff, and other support services as 

12 the Council may determine advisable. 

13 (i) COMPENSATION OF MEMBERS.— 

14 (1) FEDERAL EMPLOYEE MEMBERS.—All mem15 bers of the Council who are officers or employees of 

16 the United States shall serve without compensation 

17 in addition to that received for their services as offi18 cers or employees of the United States. 

19 (2) COMPENSATION FOR NON-FEDERAL MEM20 BER.—Section 5314 of title 5, United States Code, 

21 is amended by adding at the end the following: 

22 ‘‘Independent Member of the Financial Stability 

23 Oversight Council (1).’’. 

24 (j) DETAIL OF GOVERNMENT EMPLOYEES.—Any em25 ployee of the Federal Government may be detailed to the 


sroberts on DSKH9S0YB1PROD with BILLS
26 

•S 3217 AMDT 3739 

1 Council without reimbursement, and such detail shall be 

2 without interruption or loss of civil service status or privi3 lege. An employee of the Federal Government detailed to 

4 the Council shall report to and be subject to oversight by 

5 the Council during the assignment to the Council, and 

6 shall be compensated by the department or agency from 

7 which the employee was detailed. 

8 SEC. 112. COUNCIL AUTHORITY. 

9 (a) PURPOSES AND DUTIES OF THE COUNCIL.— 

10 (1) IN GENERAL.—The purposes of the Council 

11 are— 

12 (A) to identify risks to the financial sta13 bility of the United States that could arise from 

14 the material financial distress or failure of 

15 large, interconnected bank holding companies or 

16 nonbank financial companies; 

17 (B) to promote market discipline, by elimi18 nating expectations on the part of shareholders, 

19 creditors, and counterparties of such companies 

20 that the Government will shield them from 

21 losses in the event of failure; and 

22 (C) to respond to emerging threats to the 

23 stability of the United States financial markets. 

24 (2) DUTIES.—The Council shall, in accordance 

25 with this title— 


sroberts on DSKH9S0YB1PROD with BILLS
27 

•S 3217 AMDT 3739 

1 (A) collect information from member agen2 cies and other Federal and State financial regu3 latory agencies and, if necessary to assess risks 

4 to the United States financial system, direct the 

5 Office of Financial Research to collect informa6 tion from bank holding companies and nonbank 

7 financial companies; 

8 (B) provide direction to, and request data 

9 and analyses from, the Office of Financial Re10 search to support the work of the Council; 

11 (C) monitor the financial services market12 place in order to identify potential threats to 

13 the financial stability of the United States; 

14 (D) facilitate information sharing and co15 ordination among the member agencies and 

16 other Federal and State agencies regarding do17 mestic financial services policy development, 

18 rulemaking, examinations, reporting require19 ments, and enforcement actions; 

20 (E) recommend to the member agencies 

21 general supervisory priorities and principles re22 flecting the outcome of discussions among the 

23 member agencies; 


sroberts on DSKH9S0YB1PROD with BILLS
28 

•S 3217 AMDT 3739 

1 (F) identify gaps in regulation that could 

2 pose risks to the financial stability of the 

3 United States; 

4 (G) require supervision by the Board of 

5 Governors for nonbank financial companies that 

6 may pose risks to the financial stability of the 

7 United States in the event of their material fi8 nancial distress or failure, pursuant to section 

9 113; 

10 (H) make recommendations to the Board 

11 of Governors concerning the establishment of 

12 heightened prudential standards for risk-based 

13 capital, leverage, liquidity, contingent capital, 

14 resolution plans and credit exposure reports, 

15 concentration limits, enhanced public disclo16 sures, and overall risk management for 

17 nonbank financial companies and large, inter18 connected bank holding companies supervised 

19 by the Board of Governors; 

20 (I) identify systemically important finan21 cial market utilities and payment, clearing, and 

22 settlement activities (as that term is defined in 

23 title VIII), and require such utilities and activi24 ties to be subject to standards established by 

25 the Board of Governors; 


sroberts on DSKH9S0YB1PROD with BILLS
29 

•S 3217 AMDT 3739 

1 (J) make recommendations to primary fi2 nancial regulatory agencies to apply new or 

3 heightened standards and safeguards for finan4 cial activities or practices that could create or 

5 increase risks of significant liquidity, credit, or 

6 other problems spreading among bank holding 

7 companies, nonbank financial companies, and 

8 United States financial markets; 

9 (K) make determinations regarding exemp10 tions in title VII, where necessary; 

11 (L) provide a forum for— 

12 (i) discussion and analysis of emerg13 ing market developments and financial reg14 ulatory issues; and 

15 (ii) resolution of jurisdictional dis16 putes among the members of the Council; 

17 and 

18 (M) annually report to and testify before 

19 Congress on— 

20 (i) the activities of the Council; 

21 (ii) significant financial market devel22 opments and potential emerging threats to 

23 the financial stability of the United States; 


sroberts on DSKH9S0YB1PROD with BILLS
30 

•S 3217 AMDT 3739 

1 (iii) all determinations made under 

2 section 113 or title VIII, and the basis for 

3 such determinations; and 

4 (iv) recommendations— 

5 (I) to enhance the integrity, effi6 ciency, competitiveness, and stability 

7 of United States financial markets; 

8 (II) to promote market discipline; 

9 and 

10 (III) to maintain investor con11 fidence. 

12 (b) AUTHORITY TO OBTAIN INFORMATION.— 

13 (1) IN GENERAL.—The Council may receive, 

14 and may request the submission of, any data or in15 formation from the Office of Financial Research and 

16 member agencies, as necessary— 

17 (A) to monitor the financial services mar18 ketplace to identify potential risks to the finan19 cial stability of the United States; or 

20 (B) to otherwise carry out any of the pro21 visions of this title. 

22 (2) SUBMISSIONS BY THE OFFICE AND MEMBER

23 AGENCIES.—Notwithstanding any other provision of 

24 law, the Office of Financial Research and any memVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00030 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
31 

•S 3217 AMDT 3739 

1 ber agency are authorized to submit information to 

2 the Council. 

3 (3) FINANCIAL DATA COLLECTION.— 

4 (A) IN GENERAL.—The Council, acting 

5 through the Office of Financial Research, may 

6 require the submission of periodic and other re7 ports from any nonbank financial company or 

8 bank holding company for the purpose of as9 sessing the extent to which a financial activity 

10 or financial market in which the nonbank finan11 cial company or bank holding company partici12 pates, or the nonbank financial company or 

13 bank holding company itself, poses a threat to 

14 the financial stability of the United States. 

15 (B) MITIGATION OF REPORT BURDEN.— 

16 Before requiring the submission of reports from 

17 any nonbank financial company or bank holding 

18 company that is regulated by a member agency 

19 or any primary financial regulatory agency, the 

20 Council, acting through the Office of Financial 

21 Research, shall coordinate with such agencies 

22 and shall, whenever possible, rely on informa23 tion available from the Office of Financial Re24 search or such agencies. 


sroberts on DSKH9S0YB1PROD with BILLS
32 

•S 3217 AMDT 3739 

1 (4) BACK-UP EXAMINATION BY THE BOARD OF

2 GOVERNORS.—If the Council is unable to determine 

3 whether the financial activities of a nonbank finan4 cial company pose a threat to the financial stability 

5 of the United States, based on information or re6 ports obtained under paragraph (3), discussions with 

7 management, and publicly available information, the 

8 Council may request the Board of Governors, and 

9 the Board of Governors is authorized, to conduct an 

10 examination of the nonbank financial company for 

11 the sole purpose of determining whether the 

12 nonbank financial company should be supervised by 

13 the Board of Governors for purposes of this title. 

14 (5) CONFIDENTIALITY.— 

15 (A) IN GENERAL.—The Council, the Office 

16 of Financial Research, and the other member 

17 agencies shall maintain the confidentiality of 

18 any data, information, and reports submitted 

19 under this subsection and subtitle B. 

20 (B) RETENTION OF PRIVILEGE.—The sub21 mission of any nonpublicly available data or in22 formation under this subsection and subtitle B 

23 shall not constitute a waiver of, or otherwise af24 fect, any privilege arising under Federal or 

25 State law (including the rules of any Federal or 


sroberts on DSKH9S0YB1PROD with BILLS
33 

•S 3217 AMDT 3739 

1 State court) to which the data or information is 

2 otherwise subject. 

3 (C) FREEDOM OF INFORMATION ACT.— 

4 Section 552 of title 5, United States Code, in5 cluding the exceptions thereunder, shall apply 

6 to any data or information submitted under this 

7 subsection and subtitle B. 

8 SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REG9 ULATION OF CERTAIN NONBANK FINANCIAL 

10 COMPANIES. 

11 (a) U.S. NONBANK FINANCIAL COMPANIES SUPER12 VISED BY THE BOARD OF GOVERNORS.— 

13 (1) DETERMINATION.—The Council, on a nondelegable basis and by a vote of not fewer than 2 14 ⁄3

15 of the members then serving, including an affirma16 tive vote by the Chairperson, may determine that a 

17 U.S. nonbank financial company shall be supervised 

18 by the Board of Governors and shall be subject to 

19 prudential standards, in accordance with this title, if 

20 the Council determines that material financial dis21 tress at the U.S. nonbank financial company would 

22 pose a threat to the financial stability of the United 

23 States. 


sroberts on DSKH9S0YB1PROD with BILLS
34 

•S 3217 AMDT 3739 

1 (2) CONSIDERATIONS.—Each determination 

2 under paragraph (1) shall be based on a consider3 ation by the Council of— 

4 (A) the degree of leverage of the company; 

5 (B) the amount and nature of the financial 

6 assets of the company; 

7 (C) the amount and types of the liabilities 

8 of the company, including the degree of reliance 

9 on short-term funding; 

10 (D) the extent and types of the off-bal11 ance-sheet exposures of the company; 

12 (E) the extent and types of the trans13 actions and relationships of the company with 

14 other significant nonbank financial companies 

15 and significant bank holding companies; 

16 (F) the importance of the company as a 

17 source of credit for households, businesses, and 

18 State and local governments and as a source of 

19 liquidity for the United States financial system; 

20 (G) the recommendation, if any, of a mem21 ber of the Council; 

22 (H) the operation of, or ownership interest 

23 in, any clearing, settlement, or payment busi24 ness of the company; 

25 (I) the extent to which— 


sroberts on DSKH9S0YB1PROD with BILLS
35 

•S 3217 AMDT 3739 

1 (i) assets are managed rather than 

2 owned by the company; and 

3 (ii) ownership of assets under man4 agement is diffuse; and 

5 (J) any other factors that the Council 

6 deems appropriate. 

7 (b) FOREIGN NONBANK FINANCIAL COMPANIES SU8 PERVISED BY THE BOARD OF GOVERNORS.— 

9 (1) DETERMINATION.—The Council, on a nondelegable basis and by a vote of not fewer than 2 10 ⁄3

11 of the members then serving, including an affirma12 tive vote by the Chairperson, may determine that a 

13 foreign nonbank financial company that has sub14 stantial assets or operations in the United States 

15 shall be supervised by the Board of Governors and 

16 shall be subject to prudential standards in accord17 ance with this title, if the Council determines that 

18 material financial distress at the foreign nonbank fi19 nancial company would pose a threat to the financial 

20 stability of the United States. 

21 (2) CONSIDERATIONS.—Each determination 

22 under paragraph (1) shall be based on a consider23 ation by the Council of— 

24 (A) the degree of leverage of the company; 


sroberts on DSKH9S0YB1PROD with BILLS
36 

•S 3217 AMDT 3739 

1 (B) the amount and nature of the United 

2 States financial assets of the company; 

3 (C) the amount and types of the liabilities 

4 of the company used to fund activities and op5 erations in the United States, including the de6 gree of reliance on short-term funding; 

7 (D) the extent of the United States-related 

8 off-balance-sheet exposure of the company; 

9 (E) the extent and type of the transactions 

10 and relationships of the company with other 

11 significant nonbank financial companies and 

12 bank holding companies; 

13 (F) the importance of the company as a 

14 source of credit for United States households, 

15 businesses, and State and local governments, 

16 and as a source of liquidity for the United 

17 States financial system; 

18 (G) the recommendation, if any, of a mem19 ber of the Council; 

20 (H) the extent to which— 

21 (i) assets are managed rather than 

22 owned by the company; and 

23 (ii) ownership of assets under man24 agement is diffuse; and 


sroberts on DSKH9S0YB1PROD with BILLS
37 

•S 3217 AMDT 3739 

1 (I) any other factors that the Council 

2 deems appropriate. 

3 (c) REEVALUATION AND RESCISSION.—The Council 

4 shall— 

5 (1) not less frequently than annually, reevaluate 

6 each determination made under subsections (a) and 

7 (b) with respect to each nonbank financial company 

8 supervised by the Board of Governors; and 

9 (2) rescind any such determination, if the 

Council, by a vote of not fewer than 2 10 ⁄3 of the mem11 bers then serving, including an affirmative vote by 

12 the Chairperson, determines that the nonbank finan13 cial company no longer meets the standards under 

14 subsection (a) or (b), as applicable. 

15 (d) NOTICE AND OPPORTUNITY FOR HEARING AND

16 FINAL DETERMINATION.— 

17 (1) IN GENERAL.—The Council shall provide to 

18 a nonbank financial company written notice of a 

19 proposed determination of the Council, including an 

20 explanation of the basis of the proposed determina21 tion of the Council, that such nonbank financial 

22 company shall be supervised by the Board of Gov23 ernors and shall be subject to prudential standards 

24 in accordance with this title. 


sroberts on DSKH9S0YB1PROD with BILLS
38 

•S 3217 AMDT 3739 

1 (2) HEARING.—Not later than 30 days after 

2 the date of receipt of any notice of a proposed deter3 mination under paragraph (1), the nonbank finan4 cial company may request, in writing, an oppor5 tunity for a written or oral hearing before the Coun6 cil to contest the proposed determination. Upon re7 ceipt of a timely request, the Council shall fix a time 

8 (not later than 30 days after the date of receipt of 

9 the request) and place at which such company may 

10 appear, personally or through counsel, to submit 

11 written materials (or, at the sole discretion of the 

12 Council, oral testimony and oral argument). 

13 (3) FINAL DETERMINATION.—Not later than 60 

14 days after the date of a hearing under paragraph 

15 (2), the Council shall notify the nonbank financial 

16 company of the final determination of the Council, 

17 which shall contain a statement of the basis for the 

18 decision of the Council. 

19 (4) NO HEARING REQUESTED.—If a nonbank 

20 financial company does not make a timely request 

21 for a hearing, the Council shall notify the nonbank 

22 financial company, in writing, of the final determina23 tion of the Council under subsection (a) or (b), as 

24 applicable, not later than 10 days after the date by 


sroberts on DSKH9S0YB1PROD with BILLS
39 

•S 3217 AMDT 3739 

1 which the company may request a hearing under 

2 paragraph (2). 

3 (e) EMERGENCY EXCEPTION.— 

4 (1) IN GENERAL.—The Council may waive or 

5 modify the requirements of subsection (d) with re6 spect to a nonbank financial company, if the Council 

determines, by a vote of not fewer than 2 7 ⁄3 of the 

8 members then serving, including an affirmative vote 

9 by the Chairperson, that such waiver or modification 

10 is necessary or appropriate to prevent or mitigate 

11 threats posed by the nonbank financial company to 

12 the financial stability of the United States. 

13 (2) NOTICE.—The Council shall provide notice 

14 of a waiver or modification under this paragraph to 

15 the nonbank financial company concerned as soon as 

16 practicable, but not later than 24 hours after the 

17 waiver or modification is granted. 

18 (3) OPPORTUNITY FOR HEARING.—The Council 

19 shall allow a nonbank financial company to request, 

20 in writing, an opportunity for a written or oral hear21 ing before the Council to contest a waiver or modi22 fication under this paragraph, not later than 10 

23 days after the date of receipt of notice of the waiver 

24 or modification by the company. Upon receipt of a 

25 timely request, the Council shall fix a time (not later 


sroberts on DSKH9S0YB1PROD with BILLS
40 

•S 3217 AMDT 3739 

1 than 15 days after the date of receipt of the request) 

2 and place at which the nonbank financial company 

3 may appear, personally or through counsel, to sub4 mit written materials (or, at the sole discretion of 

5 the Council, oral testimony and oral argument). 

6 (4) NOTICE OF FINAL DETERMINATION.—Not 

7 later than 30 days after the date of any hearing 

8 under paragraph (3), the Council shall notify the 

9 subject nonbank financial company of the final de10 termination of the Council under this paragraph, 

11 which shall contain a statement of the basis for the 

12 decision of the Council. 

13 (f) CONSULTATION.—The Council shall consult with 

14 the primary financial regulatory agency, if any, for each 

15 nonbank financial company or subsidiary of a nonbank fi16 nancial company that is being considered for supervision 

17 by the Board of Governors under this section before the 

18 Council makes any final determination with respect to 

19 such nonbank financial company under subsection (a), (b), 

20 or (c). 

21 (g) JUDICIAL REVIEW.—If the Council makes a final 

22 determination under this section with respect to a 

23 nonbank financial company, such nonbank financial com24 pany may, not later than 30 days after the date of receipt 

25 of the notice of final determination under subsection 


sroberts on DSKH9S0YB1PROD with BILLS
41 

•S 3217 AMDT 3739 

1 (d)(3) or (e)(4), bring an action in the United States dis2 trict court for the judicial district in which the home office 

3 of such nonbank financial company is located, or in the 

4 United States District Court for the District of Columbia, 

5 for an order requiring that the final determination be re6 scinded, and the court shall, upon review, dismiss such ac7 tion or direct the final determination to be rescinded. Re8 view of such an action shall be limited to whether the final 

9 determination made under this section was arbitrary and 

10 capricious. 

11 SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPA12 NIES SUPERVISED BY THE BOARD OF GOV13 ERNORS. 

14 Not later than 180 days after the date of a final 

15 Council determination under section 113 that a nonbank 

16 financial company is to be supervised by the Board of Gov17 ernors, such company shall register with the Board of 

18 Governors, on forms prescribed by the Board of Gov19 ernors, which shall include such information as the Board 

20 of Governors, in consultation with the Council, may deem 

21 necessary or appropriate to carry out this title. 


sroberts on DSKH9S0YB1PROD with BILLS
42 

•S 3217 AMDT 3739 

1 SEC. 115. ENHANCED SUPERVISION AND PRUDENTIAL 

2 STANDARDS FOR NONBANK FINANCIAL COM3 PANIES SUPERVISED BY THE BOARD OF GOV4 ERNORS AND CERTAIN BANK HOLDING COM5 PANIES. 

6 (a) IN GENERAL.— 

7 (1) PURPOSE.—In order to prevent or mitigate 

8 risks to the financial stability of the United States 

9 that could arise from the material financial distress 

10 or failure of large, interconnected financial institu11 tions, the Council may make recommendations to 

12 the Board of Governors concerning the establish13 ment and refinement of prudential standards and re14 porting and disclosure requirements applicable to 

15 nonbank financial companies supervised by the 

16 Board of Governors and large, interconnected bank 

17 holding companies, that— 

18 (A) are more stringent than those applica19 ble to other nonbank financial companies and 

20 bank holding companies that do not present 

21 similar risks to the financial stability of the 

22 United States; and 

23 (B) increase in stringency, based on the 

24 considerations identified in subsection (b)(3). 

25 (2) LIMITATION ON BANK HOLDING COMPA26 NIES.—Any standards recommended under subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00042 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
43 

•S 3217 AMDT 3739 

1 sections (b) through (f) shall not apply to any bank 

2 holding company with total consolidated assets of 

3 less than $50,000,000,000. The Council may rec4 ommend an asset threshold greater than 

5 $50,000,000,000 for the applicability of any par6 ticular standard under those subsections. 

7 (b) DEVELOPMENT OF PRUDENTIAL STANDARDS.— 

8 (1) IN GENERAL.—The recommendations of the 

9 Council under subsection (a) may include— 

10 (A) risk-based capital requirements; 

11 (B) leverage limits; 

12 (C) liquidity requirements; 

13 (D) resolution plan and credit exposure re14 port requirements; 

15 (E) concentration limits; 

16 (F) a contingent capital requirement; 

17 (G) enhanced public disclosures; and 

18 (H) overall risk management requirements. 

19 (2) PRUDENTIAL STANDARDS FOR FOREIGN FI20 NANCIAL COMPANIES.—In making recommendations 

21 concerning the standards set forth in paragraph (1) 

22 that would apply to foreign nonbank financial com23 panies supervised by the Board of Governors or for24 eign-based bank holding companies, the Council 


sroberts on DSKH9S0YB1PROD with BILLS
44 

•S 3217 AMDT 3739 

1 shall give due regard to the principle of national 

2 treatment and competitive equity. 

3 (3) CONSIDERATIONS.—In making rec4 ommendations concerning prudential standards 

5 under paragraph (1), the Council shall— 

6 (A) take into account differences among 

7 nonbank financial companies supervised by the 

8 Board of Governors and bank holding compa9 nies described in subsection (a), based on— 

10 (i) the factors described in subsections 

11 (a) and (b) of section 113; 

12 (ii) whether the company owns an in13 sured depository institution; 

14 (iii) nonfinancial activities and affili15 ations of the company; and 

16 (iv) any other factors that the Council 

17 determines appropriate; and 

18 (B) to the extent possible, ensure that 

19 small changes in the factors listed in sub20 sections (a) and (b) of section 113 would not 

21 result in sharp, discontinuous changes in the 

22 prudential standards established under para23 graph (1). 

24 (c) CONTINGENT CAPITAL.— 


sroberts on DSKH9S0YB1PROD with BILLS
45 

•S 3217 AMDT 3739 

1 (1) STUDY REQUIRED.—The Council shall con2 duct a study of the feasibility, benefits, costs, and 

3 structure of a contingent capital requirement for 

4 nonbank financial companies supervised by the 

5 Board of Governors and bank holding companies de6 scribed in subsection (a), which study shall in7 clude— 

8 (A) an evaluation of the degree to which 

9 such requirement would enhance the safety and 

10 soundness of companies subject to the require11 ment, promote the financial stability of the 

12 United States, and reduce risks to United 

13 States taxpayers; 

14 (B) an evaluation of the characteristics 

15 and amounts of convertible debt that should be 

16 required; 

17 (C) an analysis of potential prudential 

18 standards that should be used to determine 

19 whether the contingent capital of a company 

20 would be converted to equity in times of finan21 cial stress; 

22 (D) an evaluation of the costs to compa23 nies, the effects on the structure and operation 

24 of credit and other financial markets, and other 

25 economic effects of requiring contingent capital; 


sroberts on DSKH9S0YB1PROD with BILLS
46 

•S 3217 AMDT 3739 

1 (E) an evaluation of the effects of such re2 quirement on the international competitiveness 

3 of companies subject to the requirement and 

4 the prospects for international coordination in 

5 establishing such requirement; and 

6 (F) recommendations for implementing 

7 regulations. 

8 (2) REPORT.—The Council shall submit a re9 port to Congress regarding the study required by 

10 paragraph (1) not later than 2 years after the date 

11 of enactment of this Act. 

12 (3) RECOMMENDATIONS.— 

13 (A) IN GENERAL.—Subsequent to submit14 ting a report to Congress under paragraph (2), 

15 the Council may make recommendations to the 

16 Board of Governors to require any nonbank fi17 nancial company supervised by the Board of 

18 Governors and any bank holding company de19 scribed in subsection (a) to maintain a min20 imum amount of long-term hybrid debt that is 

21 convertible to equity in times of financial stress. 

22 (B) FACTORS TO CONSIDER.—In making 

23 recommendations under this subsection, the 

24 Council shall consider— 


sroberts on DSKH9S0YB1PROD with BILLS
47 

•S 3217 AMDT 3739 

1 (i) an appropriate transition period 

2 for implementation of a conversion under 

3 this subsection; 

4 (ii) the factors described in subsection 

5 (b)(3); 

6 (iii) capital requirements applicable to 

7 a nonbank financial company supervised by 

8 the Board of Governors or a bank holding 

9 company described in subsection (a), and 

10 subsidiaries thereof; 

11 (iv) results of the study required by 

12 paragraph (1); and 

13 (v) any other factor that the Council 

14 deems appropriate. 

15 (d) RESOLUTION PLAN AND CREDIT EXPOSURE RE16 PORTS.— 

17 (1) RESOLUTION PLAN.—The Council may 

18 make recommendations to the Board of Governors 

19 concerning the requirement that each nonbank fi20 nancial company supervised by the Board of Gov21 ernors and each bank holding company described in 

22 subsection (a) report periodically to the Council, the 

23 Board of Governors, and the Corporation, the plan 

24 of such company for rapid and orderly resolution in 

25 the event of material financial distress or failure. 


sroberts on DSKH9S0YB1PROD with BILLS
48 

•S 3217 AMDT 3739 

1 (2) CREDIT EXPOSURE REPORT.—The Council 

2 may make recommendations to the Board of Gov3 ernors concerning the advisability of requiring each 

4 nonbank financial company supervised by the Board 

5 of Governors and bank holding company described in 

6 subsection (a) to report periodically to the Council, 

7 the Board of Governors, and the Corporation on— 

8 (A) the nature and extent to which the 

9 company has credit exposure to other signifi10 cant nonbank financial companies and signifi11 cant bank holding companies; and 

12 (B) the nature and extent to which other 

13 such significant nonbank financial companies 

14 and significant bank holding companies have 

15 credit exposure to that company. 

16 (e) CONCENTRATION LIMITS.—In order to limit the 

17 risks that the failure of any individual company could pose 

18 to nonbank financial companies supervised by the Board 

19 of Governors or bank holding companies described in sub20 section (a), the Council may make recommendations to the 

21 Board of Governors to prescribe standards to limit such 

22 risks, as set forth in section 165. 

23 (f) ENHANCED PUBLIC DISCLOSURES.—The Council 

24 may make recommendations to the Board of Governors 

25 to require periodic public disclosures by bank holding comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00048 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
49 

•S 3217 AMDT 3739 

1 panies described in subsection (a) and by nonbank finan2 cial companies supervised by the Board of Governors, in 

3 order to support market evaluation of the risk profile, cap4 ital adequacy, and risk management capabilities thereof. 

5 SEC. 116. REPORTS. 

6 (a) IN GENERAL.—Subject to subsection (b), the 

7 Council, acting through the Office of Financial Research, 

8 may require a bank holding company with total consoli9 dated assets of $50,000,000,000 or greater or a nonbank 

10 financial company supervised by the Board of Governors, 

11 and any subsidiary thereof, to submit certified reports to 

12 keep the Council informed as to— 

13 (1) the financial condition of the company; 

14 (2) systems for monitoring and controlling fi15 nancial, operating, and other risks; 

16 (3) transactions with any subsidiary that is a 

17 depository institution; and 

18 (4) the extent to which the activities and oper19 ations of the company and any subsidiary thereof, 

20 could, under adverse circumstances, have the poten21 tial to disrupt financial markets or affect the overall 

22 financial stability of the United States. 

23 (b) USE OF EXISTING REPORTS.— 

24 (1) IN GENERAL.—For purposes of compliance 

25 with subsection (a), the Council, acting through the 


sroberts on DSKH9S0YB1PROD with BILLS
50 

•S 3217 AMDT 3739 

1 Office of Financial Research, shall, to the fullest ex2 tent possible, use— 

3 (A) reports that a bank holding company, 

4 nonbank financial company supervised by the 

5 Board of Governors, or any functionally regu6 lated subsidiary of such company has been re7 quired to provide to other Federal or State reg8 ulatory agencies; 

9 (B) information that is otherwise required 

10 to be reported publicly; and 

11 (C) externally audited financial statements. 

12 (2) AVAILABILITY.—Each bank holding com13 pany described in subsection (a) and nonbank finan14 cial company supervised by the Board of Governors, 

15 and any subsidiary thereof, shall provide to the 

16 Council, at the request of the Council, copies of all 

17 reports referred to in paragraph (1). 

18 (3) CONFIDENTIALITY.—The Council shall 

19 maintain the confidentiality of the reports obtained 

20 under subsection (a) and paragraph (1)(A) of this 

21 subsection. 

22 SEC. 117. TREATMENT OF CERTAIN COMPANIES THAT 

23 CEASE TO BE BANK HOLDING COMPANIES. 

24 (a) APPLICABILITY.—This section shall apply to any 

25 entity or a successor entity that— 


sroberts on DSKH9S0YB1PROD with BILLS
51 

•S 3217 AMDT 3739 

1 (1) was a bank holding company having total 

2 consolidated assets equal to or greater than 

3 $50,000,000,000 as of January 1, 2010; and 

4 (2) received financial assistance under or par5 ticipated in the Capital Purchase Program estab6 lished under the Troubled Asset Relief Program au7 thorized by the Emergency Economic Stabilization 

8 Act of 2008. 

9 (b) TREATMENT.—If an entity described in sub10 section (a) ceases to be a bank holding company at any 

11 time after January 1, 2010, then such entity shall be 

12 treated as a nonbank financial company supervised by the 

13 Board of Governors, as if the Council had made a deter14 mination under section 113 with respect to that entity. 

15 (c) APPEAL.— 

16 (1) REQUEST FOR HEARING.—An entity may 

17 request, in writing, an opportunity for a written or 

18 oral hearing before the Council to appeal its treat19 ment as a nonbank financial company supervised by 

20 the Board of Governors in accordance with this sec21 tion. Upon receipt of the request, the Council shall 

22 fix a time (not later than 30 days after the date of 

23 receipt of the request) and place at which such enti24 ty may appear, personally or through counsel, to 


sroberts on DSKH9S0YB1PROD with BILLS
52 

•S 3217 AMDT 3739 

1 submit written materials (or, at the sole discretion 

2 of the Council, oral testimony and oral argument). 

3 (2) DECISION.— 

4 (A) PROPOSED DECISION.—Not later than 

5 60 days after the date of a hearing under para6 graph (1), the Council shall submit a report to, 

7 and may testify before, the Committee on 

8 Banking, Housing, and Urban Affairs of the 

9 Senate and the Committee on Financial Serv10 ices of the House of Representatives on the pro11 posed decision of the Council regarding an ap12 peal under paragraph (1), which report shall in13 clude a statement of the basis for the proposed 

14 decision of the Council. 

15 (B) NOTICE OF FINAL DECISION.—The 

16 Council shall notify the subject entity of the 

17 final decision of the Council regarding an ap18 peal under paragraph (1), which notice shall 

19 contain a statement of the basis for the final 

20 decision of the Council, not later than 60 days 

21 after the later of— 

22 (i) the date of the submission of the 

23 report under subparagraph (A); or 

24 (ii) if the Committee on Banking, 

25 Housing, and Urban Affairs of the Senate 


sroberts on DSKH9S0YB1PROD with BILLS
53 

•S 3217 AMDT 3739 

1 or the Committee on Financial Services of 

2 the House of Representatives holds one or 

3 more hearings regarding such report, the 

4 date of the last such hearing. 

5 (C) CONSIDERATIONS.—In making a deci6 sion regarding an appeal under paragraph (1), 

7 the Council shall consider whether the company 

8 meets the standards under section 113(a) or 

9 113(b), as applicable, and the definition of the 

10 term ‘‘nonbank financial company’’ under sec11 tion 102. The decision of the Council shall be 

12 final, subject to the review under paragraph 

13 (3). 

14 (3) REVIEW.—If the Council denies an appeal 

15 under this subsection, the Council shall, not less fre16 quently than annually, review and reevaluate the de17 cision. 

18 SEC. 118. COUNCIL FUNDING. 

19 Any expenses of the Council shall be treated as ex20 penses of, and paid by, the Office of Financial Research. 

21 SEC. 119. RESOLUTION OF SUPERVISORY JURISDICTIONAL 

22 DISPUTES AMONG MEMBER AGENCIES. 

23 (a) REQUEST FOR DISPUTE RESOLUTION.—The 

24 Council shall resolve a dispute among 2 or more member 

25 agencies, if— 


sroberts on DSKH9S0YB1PROD with BILLS
54 

•S 3217 AMDT 3739 

1 (1) a member agency has a dispute with an2 other member agency about the respective jurisdic3 tion over a particular bank holding company, 

4 nonbank financial company, or financial activity or 

5 product (excluding matters for which another dis6 pute mechanism specifically has been provided under 

7 Federal law); 

8 (2) the Council determines that the disputing 

9 agencies cannot, after a demonstrated good faith ef10 fort, resolve the dispute without the intervention of 

11 the Council; and 

12 (3) any of the member agencies involved in the 

13 dispute— 

14 (A) provides all other disputants prior no15 tice of the intent to request dispute resolution 

16 by the Council; and 

17 (B) requests in writing, not earlier than 14 

18 days after providing the notice described in sub19 paragraph (A), that the Council resolve the dis20 pute. 

21 (b) COUNCIL DECISION.—The Council shall resolve 

22 each dispute described in subsection (a)— 

23 (1) within a reasonable time after receiving the 

24 dispute resolution request; 


sroberts on DSKH9S0YB1PROD with BILLS
55 

•S 3217 AMDT 3739 

1 (2) after consideration of relevant information 

2 provided by each agency party to the dispute; and 

3 (3) by agreeing with 1 of the disputants regard4 ing the entirety of the matter, or by determining a 

5 compromise position. 

6 (c) FORM AND BINDING EFFECT.—A Council deci7 sion under this section shall— 

8 (1) be in writing; 

9 (2) include an explanation of the reasons there10 for; and 

11 (3) be binding on all Federal agencies that are 

12 parties to the dispute. 

13 SEC. 120. ADDITIONAL STANDARDS APPLICABLE TO ACTIVI14 TIES OR PRACTICES FOR FINANCIAL STA15 BILITY PURPOSES. 

16 (a) IN GENERAL.—The Council may issue rec17 ommendations to the primary financial regulatory agen18 cies to apply new or heightened standards and safeguards, 

19 including standards enumerated in section 115, for a fi20 nancial activity or practice conducted by bank holding 

21 companies or nonbank financial companies under their re22 spective jurisdictions, if the Council determines that the 

23 conduct of such activity or practice could create or in24 crease the risk of significant liquidity, credit, or other 

25 problems spreading among bank holding companies and 


sroberts on DSKH9S0YB1PROD with BILLS
56 

•S 3217 AMDT 3739 

1 nonbank financial companies or the financial markets of 

2 the United States. 

3 (b) PROCEDURE FOR RECOMMENDATIONS TO REGU4 LATORS.— 

5 (1) NOTICE AND OPPORTUNITY FOR COM6 MENT.—The Council shall consult with the primary 

7 financial regulatory agencies and provide notice to 

8 the public and opportunity for comment for any pro9 posed recommendation that the primary financial 

10 regulatory agencies apply new or heightened stand11 ards and safeguards for a financial activity or prac12 tice. 

13 (2) CRITERIA.—The new or heightened stand14 ards and safeguards for a financial activity or prac15 tice recommended under paragraph (1)— 

16 (A) shall take costs to long-term economic 

17 growth into account; and 

18 (B) may include prescribing the conduct of 

19 the activity or practice in specific ways (such as 

20 by limiting its scope, or applying particular cap21 ital or risk management requirements to the 

22 conduct of the activity) or prohibiting the activ23 ity or practice. 

24 (c) IMPLEMENTATION OF RECOMMENDED STAND25 ARDS.— 


sroberts on DSKH9S0YB1PROD with BILLS
57 

•S 3217 AMDT 3739 

1 (1) ROLE OF PRIMARY FINANCIAL REGULATORY

2 AGENCY.— 

3 (A) IN GENERAL.—Each primary financial 

4 regulatory agency may impose, require reports 

5 regarding, examine for compliance with, and en6 force standards in accordance with this section 

7 with respect to those entities for which it is the 

8 primary financial regulatory agency. 

9 (B) RULE OF CONSTRUCTION.—The au10 thority under this paragraph is in addition to, 

11 and does not limit, any other authority of a pri12 mary financial regulatory agency. Compliance 

13 by an entity with actions taken by a primary fi14 nancial regulatory agency under this section 

15 shall be enforceable in accordance with the stat16 utes governing the respective jurisdiction of the 

17 primary financial regulatory agency over the en18 tity, as if the agency action were taken under 

19 those statutes. 

20 (2) IMPOSITION OF STANDARDS.—The primary 

21 financial regulatory agency shall impose the stand22 ards recommended by the Council in accordance 

23 with subsection (a), or similar standards that the 

24 Council deems acceptable, or shall explain in writing 

25 to the Council, not later than 90 days after the date 


sroberts on DSKH9S0YB1PROD with BILLS
58 

•S 3217 AMDT 3739 

1 on which the Council issues the recommendation, 

2 why the agency has determined not to follow the rec3 ommendation of the Council. 

4 (d) REPORT TO CONGRESS.—The Council shall re5 port to Congress on— 

6 (1) any recommendations issued by the Council 

7 under this section; 

8 (2) the implementation of, or failure to imple9 ment such recommendation on the part of a primary 

10 financial regulatory agency; and 

11 (3) in any case in which no primary financial 

12 regulatory agency exists for the nonbank financial 

13 company conducting financial activities or practices 

14 referred to in subsection (a), recommendations for 

15 legislation that would prevent such activities or prac16 tices from threatening the stability of the financial 

17 system of the United States. 

18 (e) EFFECT OF RESCISSION OF IDENTIFICATION.— 

19 (1) NOTICE.—The Council may recommend to 

20 the relevant primary financial regulatory agency that 

21 a financial activity or practice no longer requires any 

22 standards or safeguards implemented under this sec23 tion. 

24 (2) DETERMINATION OF PRIMARY FINANCIAL

25 REGULATORY AGENCY TO CONTINUE.— 


sroberts on DSKH9S0YB1PROD with BILLS
59 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—Upon receipt of a rec2 ommendation under paragraph (1), a primary 

3 financial regulatory agency that has imposed 

4 standards under this section shall determine 

5 whether standards that it has imposed under 

6 this section should remain in effect. 

7 (B) APPEAL PROCESS.—Each primary fi8 nancial regulatory agency that has imposed 

9 standards under this section shall promulgate 

10 regulations to establish a procedure under 

11 which entities under its jurisdiction may appeal 

12 a determination by such agency under this 

13 paragraph that standards imposed under this 

14 section should remain in effect. 

15 SEC. 121. MITIGATION OF RISKS TO FINANCIAL STABILITY. 

16 (a) MITIGATORY ACTIONS.—If the Board of Gov17 ernors determines that a bank holding company with total 

18 consolidated assets of $50,000,000,000 or more, or a 

19 nonbank financial company supervised by the Board of 

20 Governors, poses a grave threat to the financial stability 

21 of the United States, the Board of Governors, upon an 

affirmative vote of not fewer than 2 22 ⁄3 of the Council mem23 bers then serving, shall require the subject company— 

24 (1) to terminate one or more activities; 


sroberts on DSKH9S0YB1PROD with BILLS
60 

•S 3217 AMDT 3739 

1 (2) to impose conditions on the manner in 

2 which the company conducts one or more activities; 

3 or 

4 (3) if the Board of Governors determines that 

5 such action is inadequate to mitigate a threat to the 

6 financial stability of the United States in its rec7 ommendation, to sell or otherwise transfer assets or 

8 off-balance-sheet items to unaffiliated entities. 

9 (b) NOTICE AND HEARING.— 

10 (1) IN GENERAL.—The Board of Governors, in 

11 consultation with the Council, shall provide to a 

12 company described in subsection (a) written notice 

13 that such company is being considered for mitiga14 tory action pursuant to this section, including an ex15 planation of the basis for, and description of, the 

16 proposed mitigatory action. 

17 (2) HEARING.—Not later than 30 days after 

18 the date of receipt of notice under paragraph (1), 

19 the company may request, in writing, an opportunity 

20 for a written or oral hearing before the Board of 

21 Governors to contest the proposed mitigatory action. 

22 Upon receipt of a timely request, the Board of Gov23 ernors shall fix a time (not later than 30 days after 

24 the date of receipt of the request) and place at 

25 which such company may appear, personally or 


sroberts on DSKH9S0YB1PROD with BILLS
61 

•S 3217 AMDT 3739 

1 through counsel, to submit written materials (or, at 

2 the discretion of the Board of Governors, in con3 sultation with the Council, oral testimony and oral 

4 argument). 

5 (3) DECISION.—Not later than 60 days after 

6 the date of a hearing under paragraph (2), or not 

7 later than 60 days after the provision of a notice 

8 under paragraph (1) if no hearing was held, the 

9 Board of Governors shall notify the company of the 

10 final decision of the Board of Governors, including 

11 the results of the vote of the Council, as described 

12 in subsection (a). 

13 (c) FACTORS FOR CONSIDERATION.—The Board of 

14 Governors and the Council shall take into consideration 

15 the factors set forth in subsection (a) or (b) of section 

16 113, as applicable, in a determination described in sub17 section (a) and in a decision described in subsection (b). 

18 (d) APPLICATION TO FOREIGN FINANCIAL COMPA19 NIES.—The Board of Governors may prescribe regulations 

20 regarding the application of this section to foreign 

21 nonbank financial companies supervised by the Board of 

22 Governors and foreign-based bank holding companies, giv23 ing due regard to the principle of national treatment and 

24 competitive equity. 


sroberts on DSKH9S0YB1PROD with BILLS
62 

•S 3217 AMDT 3739 

1 Subtitle B—Office of Financial 

2 Research 

3 SEC. 151. DEFINITIONS. 

4 For purposes of this subtitle— 

5 (1) the terms ‘‘Office’’ and ‘‘Director’’ mean 

6 the Office of Financial Research established under 

7 this subtitle and the Director thereof, respectively; 

8 (2) the term ‘‘financial company’’ has the same 

9 meaning as in title II, and includes an insured de10 pository institution and an insurance company; 

11 (3) the term ‘‘Data Center’’ means the data 

12 center established under section 154; 

13 (4) the term ‘‘Research and Analysis Center’’ 

14 means the research and analysis center established 

15 under section 154; 

16 (5) the term ‘‘financial transaction data’’ means 

17 the structure and legal description of a financial 

18 contract, with sufficient detail to describe the rights 

19 and obligations between counterparties and make 

20 possible an independent valuation; 

21 (6) the term ‘‘position data’’— 

22 (A) means data on financial assets or li23 abilities held on the balance sheet of a financial 

24 company, where positions are created or 


sroberts on DSKH9S0YB1PROD with BILLS
63 

•S 3217 AMDT 3739 

1 changed by the execution of a financial trans2 action; and 

3 (B) includes information that identifies 

4 counterparties, the valuation by the financial 

5 company of the position, and information that 

6 makes possible an independent valuation of the 

7 position; 

8 (7) the term ‘‘financial contract’’ means a le9 gally binding agreement between 2 or more counter10 parties, describing rights and obligations relating to 

11 the future delivery of items of intrinsic or extrinsic 

12 value among the counterparties; and 

13 (8) the term ‘‘financial instrument’’ means a fi14 nancial contract in which the terms and conditions 

15 are publicly available, and the roles of one or more 

16 of the counterparties are assignable without the con17 sent of any of the other counterparties (including 

18 common stock of a publicly traded company, govern19 ment bonds, or exchange traded futures and options 

20 contracts). 

21 SEC. 152. OFFICE OF FINANCIAL RESEARCH ESTABLISHED. 

22 (a) ESTABLISHMENT.—There is established within 

23 the Department of the Treasury the Office of Financial 

24 Research. 

25 (b) DIRECTOR.— 


sroberts on DSKH9S0YB1PROD with BILLS
64 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—The Office shall be headed 

2 by a Director, who shall be appointed by the Presi3 dent, by and with the advice and consent of the Sen4 ate. 

5 (2) TERM OF SERVICE.—The Director shall 

6 serve for a term of 6 years, except that, in the event 

7 that a successor is not nominated and confirmed by 

8 the end of the term of service of a Director, the Di9 rector may continue to serve until such time as the 

10 next Director is appointed and confirmed. 

11 (3) EXECUTIVE LEVEL.—The Director shall be 

12 compensated at level III of the Executive Schedule. 

13 (4) PROHIBITION ON DUAL SERVICE.—The in14 dividual serving in the position of Director may not, 

15 during such service, also serve as the head of any fi16 nancial regulatory agency. 

17 (5) RESPONSIBILITIES, DUTIES, AND AUTHOR18 ITY.—The Director shall have sole discretion in the 

19 manner in which the Director fulfills the responsibil20 ities and duties and exercises the authorities de21 scribed in this subtitle. 

22 (c) BUDGET.—The Director, in consultation with the 

23 Chairperson, shall establish the annual budget of the Of24 fice. 

25 (d) OFFICE PERSONNEL.— 


sroberts on DSKH9S0YB1PROD with BILLS
65 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—The Director, in consulta2 tion with the Chairperson, may fix the number of, 

3 and appoint and direct, all employees of the Office. 

4 (2) COMPENSATION.—The Director, in con5 sultation with the Chairperson, shall fix, adjust, and 

6 administer the pay for all employees of the Office, 

7 without regard to chapter 51 or subchapter III of 

8 chapter 53 of title 5, United States Code, relating 

9 to classification of positions and General Schedule 

10 pay rates. 

11 (3) COMPARABILITY.—Section 1206(a) of the 

12 Financial Institutions Reform, Recovery, and En13 forcement Act of 1989 (12 U.S.C. 1833b(a)) is 

14 amended— 

15 (A) by striking ‘‘Finance Board,’’ and in16 serting ‘‘Finance Board, the Office of Financial 

17 Research, and the Bureau of Consumer Finan18 cial Protection’’; and 

19 (B) by striking ‘‘and the Office of Thrift 

20 Supervision,’’. 

21 (e) ASSISTANCE FROM FEDERAL AGENCIES.—Any 

22 department or agency of the United States may provide 

23 to the Office and any special advisory, technical, or profes24 sional committees appointed by the Office, such services, 

25 funds, facilities, staff, and other support services as the 


sroberts on DSKH9S0YB1PROD with BILLS
66 

•S 3217 AMDT 3739 

1 Office may determine advisable. Any Federal Government 

2 employee may be detailed to the Office without reimburse3 ment, and such detail shall be without interruption or loss 

4 of civil service status or privilege. 

5 (f) PROCUREMENT OF TEMPORARY AND INTERMIT6 TENT SERVICES.—The Director may procure temporary 

7 and intermittent services under section 3109(b) of title 5, 

8 United States Code, at rates for individuals which do not 

9 exceed the daily equivalent of the annual rate of basic pay 

10 prescribed for level V of the Executive Schedule under sec11 tion 5316 of such title. 

12 (g) CONTRACTING AND LEASING AUTHORITY.—Not13 withstanding the Federal Property and Administrative 

14 Services Act of 1949 (41 U.S.C. 251 et seq.) or any other 

15 provision of law, the Director may— 

16 (1) enter into and perform contracts, execute 

17 instruments, and acquire, in any lawful manner, 

18 such goods and services, or personal or real property 

19 (or property interest), as the Director deems nec20 essary to carry out the duties and responsibilities of 

21 the Office; and 

22 (2) hold, maintain, sell, lease, or otherwise dis23 pose of the property (or property interest) acquired 

24 under paragraph (1). 


sroberts on DSKH9S0YB1PROD with BILLS
67 

•S 3217 AMDT 3739 

1 (h) NON-COMPETE.—The Director and any staff of 

2 the Office who has had access to the transaction or posi3 tion data maintained by the Data Center or other business 

4 confidential information about financial entities required 

5 to report to the Office, may not, for a period of 1 year 

6 after last having access to such transaction or position 

7 data or business confidential information, be employed by 

8 or provide advice or consulting services to a financial com9 pany, regardless of whether that entity is required to re10 port to the Office. For staff whose access to business con11 fidential information was limited, the Director may pro12 vide, on a case-by-case basis, for a shorter period of post13 employment prohibition, provided that the shorter period 

14 does not compromise business confidential information. 

15 (i) TECHNICAL AND PROFESSIONAL ADVISORY COM16 MITTEES.—The Office, in consultation with the Chair17 person, may appoint such special advisory, technical, or 

18 professional committees as may be useful in carrying out 

19 the functions of the Office, and the members of such com20 mittees may be staff of the Office, or other persons, or 

21 both. 

22 (j) FELLOWSHIP PROGRAM.—The Office, in consulta23 tion with the Chairperson, may establish and maintain an 

24 academic and professional fellowship program, under 

25 which qualified academics and professionals shall be inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00067 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
68 

•S 3217 AMDT 3739 

1 vited to spend not longer than 2 years at the Office, to 

2 perform research and to provide advanced training for Of3 fice personnel. 

4 (k) EXECUTIVE SCHEDULE COMPENSATION.—Sec5 tion 5314 of title 5, United States Code, is amended by 

6 adding at the end the following new item: 

7 ‘‘Director of the Office of Financial Research.’’. 

8 SEC. 153. PURPOSE AND DUTIES OF THE OFFICE. 

9 (a) PURPOSE AND DUTIES.—The purpose of the Of10 fice is to support the Council in fulfilling the purposes and 

11 duties of the Council, as set forth in subtitle A, and to 

12 support member agencies, by— 

13 (1) collecting data on behalf of the Council, and 

14 providing such data to the Council and member 

15 agencies; 

16 (2) standardizing the types and formats of data 

17 reported and collected; 

18 (3) performing applied research and essential 

19 long-term research; 

20 (4) developing tools for risk measurement and 

21 monitoring; 

22 (5) performing other related services; 

23 (6) making the results of the activities of the 

24 Office available to financial regulatory agencies; and 


sroberts on DSKH9S0YB1PROD with BILLS
69 

•S 3217 AMDT 3739 

1 (7) assisting such member agencies in deter2 mining the types and formats of data authorized by 

3 this Act to be collected by such member agencies. 

4 (b) ADMINISTRATIVE AUTHORITY.—The Office 

5 may— 

6 (1) share data and information, including soft7 ware developed by the Office, with the Council and 

8 member agencies, which shared data, information, 

9 and software— 

10 (A) shall be maintained with at least the 

11 same level of security as is used by the Office; 

12 and 

13 (B) may not be shared with any individual 

14 or entity without the permission of the Council; 

15 (2) sponsor and conduct research projects; and 

16 (3) assist, on a reimbursable basis, with finan17 cial analyses undertaken at the request of other 

18 Federal agencies that are not member agencies. 

19 (c) RULEMAKING AUTHORITY.— 

20 (1) SCOPE.—The Office, in consultation with 

21 the Chairperson, shall issue rules, regulations, and 

22 orders only to the extent necessary to carry out the 

23 purposes and duties described in paragraphs (1), 

24 (2), and (7) of subsection (a). 


sroberts on DSKH9S0YB1PROD with BILLS
70 

•S 3217 AMDT 3739 

1 (2) STANDARDIZATION.—Member agencies, in 

2 consultation with the Office, shall implement regula3 tions promulgated by the Office under paragraph (1) 

4 to standardize the types and formats of data re5 ported and collected on behalf of the Council, as de6 scribed in subsection (a)(2). If a member agency 

7 fails to implement such regulations prior to the expi8 ration of the 3-year period following the date of pub9 lication of final regulations, the Office, in consulta10 tion with the Chairperson, may implement such reg11 ulations with respect to the financial entities under 

12 the jurisdiction of the member agency. 

13 (d) TESTIMONY.— 

14 (1) IN GENERAL.—The Director of the Office 

15 shall report to and testify before the Committee on 

16 Banking, Housing, and Urban Affairs of the Senate 

17 and the Committee on Financial Services of the 

18 House of Representatives annually on the activities 

19 of the Office, including the work of the Data Center 

20 and the Research and Analysis Center, and the as21 sessment of the Office of significant financial market 

22 developments and potential emerging threats to the 

23 financial stability of the United States. 

24 (2) NO PRIOR REVIEW.—No officer or agency of 

25 the United States shall have any authority to require 


sroberts on DSKH9S0YB1PROD with BILLS
71 

•S 3217 AMDT 3739 

1 the Director to submit the testimony required under 

2 paragraph (1) or other Congressional testimony to 

3 any officer or agency of the United States for ap4 proval, comment, or review prior to the submission 

5 of such testimony. Any such testimony to Congress 

6 shall include a statement that the views expressed 

7 therein are those of the Director and do not nec8 essarily represent the views of the President. 

9 (e) ADDITIONAL REPORTS.—The Director may pro10 vide additional reports to Congress concerning the finan11 cial stability of the United States. The Director shall no12 tify the Council of any such additional reports provided 

13 to Congress. 

14 (f) SUBPOENA.— 

15 (1) IN GENERAL.—The Director may require, 

16 by subpoena, the production of the data requested 

17 under subsection (a)(1) and section 154(b)(1), but 

18 only upon a written finding by the Director that— 

19 (A) such data is required to carry out the 

20 functions described under this subtitle; and 

21 (B) the Office has coordinated with such 

22 agency, as required under section 

23 154(b)(1)(B)(ii). 

24 (2) FORMAT.—Subpoenas under paragraph (1) 

25 shall bear the signature of the Director, and shall be 


sroberts on DSKH9S0YB1PROD with BILLS
72 

•S 3217 AMDT 3739 

1 served by any person or class of persons designated 

2 by the Director for that purpose. 

3 (3) ENFORCEMENT.—In the case of contumacy 

4 or failure to obey a subpoena, the subpoena shall be 

5 enforceable by order of any appropriate district 

6 court of the United States. Any failure to obey the 

7 order of the court may be punished by the court as 

8 a contempt of court. 

9 SEC. 154. ORGANIZATIONAL STRUCTURE; RESPONSIBIL10 ITIES OF PRIMARY PROGRAMMATIC UNITS. 

11 (a) IN GENERAL.—There are established within the 

12 Office, to carry out the programmatic responsibilities of 

13 the Office— 

14 (1) the Data Center; and 

15 (2) the Research and Analysis Center. 

16 (b) DATA CENTER.— 

17 (1) GENERAL DUTIES.— 

18 (A) DATA COLLECTION.—The Data Cen19 ter, on behalf of the Council, shall collect, vali20 date, and maintain all data necessary to carry 

21 out the duties of the Data Center, as described 

22 in this subtitle. The data assembled shall be ob23 tained from member agencies, commercial data 

24 providers, publicly available data sources, and 

25 financial entities under subparagraph (B). 


sroberts on DSKH9S0YB1PROD with BILLS
73 

•S 3217 AMDT 3739 

1 (B) AUTHORITY.— 

2 (i) IN GENERAL.—The Office may, as 

3 determined by the Council or by the Direc4 tor in consultation with the Council, re5 quire the submission of periodic and other 

6 reports from any financial company for the 

7 purpose of assessing the extent to which a 

8 financial activity or financial market in 

9 which the financial company participates, 

10 or the financial company itself, poses a 

11 threat to the financial stability of the 

12 United States. 

13 (ii) MITIGATION OF REPORT BUR14 DEN.—Before requiring the submission of 

15 a report from any financial company that 

16 is regulated by a member agency or any 

17 primary financial regulatory agency, the 

18 Office shall coordinate with such agencies 

19 and shall, whenever possible, rely on infor20 mation available from such agencies. 

21 (C) RULEMAKING.—The Office shall pro22 mulgate regulations pursuant to subsections 

23 (a)(1), (a)(2), (a)(7), and (c)(1) of section 153 

24 regarding the type and scope of the data to be 


sroberts on DSKH9S0YB1PROD with BILLS
74 

•S 3217 AMDT 3739 

1 collected by the Data Center under this para2 graph. 

3 (2) RESPONSIBILITIES.— 

4 (A) PUBLICATION.—The Data Center shall 

5 prepare and publish, in a manner that is easily 

6 accessible to the public— 

7 (i) a financial company reference 

8 database; 

9 (ii) a financial instrument reference 

10 database; and 

11 (iii) formats and standards for Office 

12 data, including standards for reporting fi13 nancial transaction and position data to 

14 the Office. 

15 (B) CONFIDENTIALITY.—The Data Center 

16 shall not publish any confidential data under 

17 subparagraph (A). 

18 (3) INFORMATION SECURITY.—The Director 

19 shall ensure that data collected and maintained by 

20 the Data Center are kept secure and protected 

21 against unauthorized disclosure. 

22 (4) CATALOG OF FINANCIAL ENTITIES AND IN23 STRUMENTS.—The Data Center shall maintain a 

24 catalog of the financial entities and instruments re25 ported to the Office. 


sroberts on DSKH9S0YB1PROD with BILLS
75 

•S 3217 AMDT 3739 

1 (5) AVAILABILITY TO THE COUNCIL AND MEM2 BER AGENCIES.—The Data Center shall make data 

3 collected and maintained by the Data Center avail4 able to the Council and member agencies, as nec5 essary to support their regulatory responsibilities. 

6 (6) OTHER AUTHORITY.—The Office shall, 

7 after consultation with the member agencies, provide 

8 certain data to financial industry participants and to 

9 the general public to increase market transparency 

10 and facilitate research on the financial system, to 

11 the extent that intellectual property rights are not 

12 violated, business confidential information is prop13 erly protected, and the sharing of such information 

14 poses no significant threats to the financial system 

15 of the United States. 

16 (c) RESEARCH AND ANALYSIS CENTER.— 

17 (1) GENERAL DUTIES.—The Research and 

18 Analysis Center, on behalf of the Council, shall de19 velop and maintain independent analytical capabili20 ties and computing resources— 

21 (A) to develop and maintain metrics and 

22 reporting systems for risks to the financial sta23 bility of the United States; 


sroberts on DSKH9S0YB1PROD with BILLS
76 

•S 3217 AMDT 3739 

1 (B) to monitor, investigate, and report on 

2 changes in system-wide risk levels and patterns 

3 to the Council and Congress; 

4 (C) to conduct, coordinate, and sponsor re5 search to support and improve regulation of fi6 nancial entities and markets; 

7 (D) to evaluate and report on stress tests 

8 or other stability-related evaluations of financial 

9 entities overseen by the member agencies; 

10 (E) to maintain expertise in such areas as 

11 may be necessary to support specific requests 

12 for advice and assistance from financial regu13 lators; 

14 (F) to investigate disruptions and failures 

15 in the financial markets, report findings, and 

16 make recommendations to the Council based on 

17 those findings; 

18 (G) to conduct studies and provide advice 

19 on the impact of policies related to systemic 

20 risk; and 

21 (H) to promote best practices for financial 

22 risk management. 

23 (d) REPORTING RESPONSIBILITIES.— 

24 (1) REQUIRED REPORTS.—Not later than 2 

25 years after the date of enactment of this Act, and 


sroberts on DSKH9S0YB1PROD with BILLS
77 

•S 3217 AMDT 3739 

1 not later than 120 days after the end of each fiscal 

2 year thereafter, the Office shall prepare and submit 

3 a report to Congress. 

4 (2) CONTENT.—Each report required by this 

5 subsection shall assess the state of the United States 

6 financial system, including— 

7 (A) an analysis of any threats to the finan8 cial stability of the United States; 

9 (B) the status of the efforts of the Office 

10 in meeting the mission of the Office; and 

11 (C) key findings from the research and 

12 analysis of the financial system by the Office. 

13 SEC. 155. FUNDING. 

14 (a) FINANCIAL RESEARCH FUND.— 

15 (1) FUND ESTABLISHED.—There is established 

16 in the Treasury of the United States a separate fund 

17 to be known as the ‘‘Financial Research Fund’’. 

18 (2) FUND RECEIPTS.—All amounts provided to 

19 the Office under subsection (c), and all assessments 

20 that the Office receives under subsection (d) shall be 

21 deposited into the Financial Research Fund. 

22 (3) INVESTMENTS AUTHORIZED.— 

23 (A) AMOUNTS IN FUND MAY BE IN24 VESTED.—The Director may request the Sec25 retary to invest the portion of the Financial ReVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00077 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
78 

•S 3217 AMDT 3739 

1 search Fund that is not, in the judgment of the 

2 Director, required to meet the needs of the Of3 fice. 

4 (B) ELIGIBLE INVESTMENTS.—Invest5 ments shall be made by the Secretary in obliga6 tions of the United States or obligations that 

7 are guaranteed as to principal and interest by 

8 the United States, with maturities suitable to 

9 the needs of the Financial Research Fund, as 

10 determined by the Director. 

11 (4) INTEREST AND PROCEEDS CREDITED.—The 

12 interest on, and the proceeds from the sale or re13 demption of, any obligations held in the Financial 

14 Research Fund shall be credited to and form a part 

15 of the Financial Research Fund. 

16 (b) USE OF FUNDS.— 

17 (1) IN GENERAL.—Funds obtained by, trans18 ferred to, or credited to the Financial Research 

19 Fund shall be immediately available to the Office, 

20 and shall remain available until expended, to pay the 

21 expenses of the Office in carrying out the duties and 

22 responsibilities of the Office. 

23 (2) FEES, ASSESSMENTS, AND OTHER FUNDS

24 NOT GOVERNMENT FUNDS.—Funds obtained by, 

25 transferred to, or credited to the Financial Research 


sroberts on DSKH9S0YB1PROD with BILLS
79 

•S 3217 AMDT 3739 

1 Fund shall not be construed to be Government funds 

2 or appropriated monies. 

3 (3) AMOUNTS NOT SUBJECT TO APPORTION4 MENT.—Notwithstanding any other provision of law, 

5 amounts in the Financial Research Fund shall not 

6 be subject to apportionment for purposes of chapter 

7 15 of title 31, United States Code, or under any 

8 other authority, or for any other purpose. 

9 (c) INTERIM FUNDING.—During the 2-year period 

10 following the date of enactment of this Act, the Board of 

11 Governors shall provide to the Office an amount sufficient 

12 to cover the expenses of the Office. 

13 (d) PERMANENT SELF-FUNDING.— 

14 (1) IN GENERAL.—Beginning 2 years after the 

15 date of enactment of this Act, the Secretary shall es16 tablish, by regulation, and with the approval of the 

17 Council, an assessment schedule, including the as18 sessment base and rates, applicable to bank holding 

19 companies with total consolidated assets of 

20 $50,000,000,000 or greater and nonbank financial 

21 companies supervised by the Board of Governors, 

22 that takes into account differences among such com23 panies, based on the considerations for establishing 

24 the prudential standards under section 115, to colVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00079 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
80 

•S 3217 AMDT 3739 

1 lect assessments equal to the estimated total ex2 penses of the Office. 

3 (2) SHORTFALL.—To the extent that the as4 sessments under paragraph (1) do not fully cover 

5 the total expenses of the Office, the Board of Gov6 ernors shall provide to the Office an amount suffi7 cient to cover the difference. 

8 SEC. 156. TRANSITION OVERSIGHT. 

9 (a) PURPOSE.—The purpose of this section is to en10 sure that the Office— 

11 (1) has an orderly and organized startup; 

12 (2) attracts and retains a qualified workforce; 

13 and 

14 (3) establishes comprehensive employee training 

15 and benefits programs. 

16 (b) REPORTING REQUIREMENT.— 

17 (1) IN GENERAL.—The Office shall submit an 

18 annual report to the Committee on Banking, Hous19 ing, and Urban Affairs of the Senate and the Com20 mittee on Financial Services of the House of Rep21 resentatives that includes the plans described in 

22 paragraph (2). 

23 (2) PLANS.—The plans described in this para24 graph are as follows: 


sroberts on DSKH9S0YB1PROD with BILLS
81 

•S 3217 AMDT 3739 

1 (A) TRAINING AND WORKFORCE DEVELOP2 MENT PLAN.—The Office shall submit a train3 ing and workforce development plan that in4 cludes, to the extent practicable— 

5 (i) identification of skill and technical 

6 expertise needs and actions taken to meet 

7 those requirements; 

8 (ii) steps taken to foster innovation 

9 and creativity; 

10 (iii) leadership development and suc11 cession planning; and 

12 (iv) effective use of technology by em13 ployees. 

14 (B) WORKPLACE FLEXIBILITY PLAN.—The 

15 Office shall submit a workforce flexibility plan 

16 that includes, to the extent practicable— 

17 (i) telework; 

18 (ii) flexible work schedules; 

19 (iii) phased retirement; 

20 (iv) reemployed annuitants; 

21 (v) part-time work; 

22 (vi) job sharing; 

23 (vii) parental leave benefits and 

24 childcare assistance; 

25 (viii) domestic partner benefits; 


sroberts on DSKH9S0YB1PROD with BILLS
82 

•S 3217 AMDT 3739 

1 (ix) other workplace flexibilities; or 

2 (x) any combination of the items de3 scribed in clauses (i) through (ix). 

4 (C) RECRUITMENT AND RETENTION

5 PLAN.—The Office shall submit a recruitment 

6 and retention plan that includes, to the extent 

7 practicable, provisions relating to— 

8 (i) the steps necessary to target highly 

9 qualified applicant pools with diverse back10 grounds; 

11 (ii) streamlined employment applica12 tion processes; 

13 (iii) the provision of timely notifica14 tion of the status of employment applica15 tions to applicants; and 

16 (iv) the collection of information to 

17 measure indicators of hiring effectiveness. 

18 (c) EXPIRATION.—The reporting requirement under 

19 subsection (b) shall terminate 5 years after the date of 

20 enactment of this Act. 

21 (d) RULE OF CONSTRUCTION.—Nothing in this sec22 tion may be construed to affect— 

23 (1) a collective bargaining agreement, as that 

24 term is defined in section 7103(a)(8) of title 5, 


sroberts on DSKH9S0YB1PROD with BILLS
83 

•S 3217 AMDT 3739 

1 United States Code, that is in effect on the date of 

2 enactment of this Act; or 

3 (2) the rights of employees under chapter 71 of 

4 title 5, United States Code. 

5 Subtitle C—Additional Board of 

6 Governors Authority for Certain 

7 Nonbank Financial Companies 

8 and Bank Holding Companies 

9 SEC. 161. REPORTS BY AND EXAMINATIONS OF NONBANK 

10 FINANCIAL COMPANIES BY THE BOARD OF 

11 GOVERNORS. 

12 (a) REPORTS.— 

13 (1) IN GENERAL.—The Board of Governors 

14 may require each nonbank financial company super15 vised by the Board of Governors, and any subsidiary 

16 thereof, to submit reports under oath, to keep the 

17 Board of Governors informed as to— 

18 (A) the financial condition of the company 

19 or subsidiary, systems of the company or sub20 sidiary for monitoring and controlling financial, 

21 operating, and other risks, and the extent to 

22 which the activities and operations of the com23 pany or subsidiary pose a threat to the financial 

24 stability of the United States; and 


sroberts on DSKH9S0YB1PROD with BILLS
84 

•S 3217 AMDT 3739 

1 (B) compliance by the company or sub2 sidiary with the requirements of this subtitle. 

3 (2) USE OF EXISTING REPORTS AND INFORMA4 TION.—In carrying out subsection (a), the Board of 

5 Governors shall, to the fullest extent possible, use— 

6 (A) reports and supervisory information 

7 that a nonbank financial company or subsidiary 

8 thereof has been required to provide to other 

9 Federal or State regulatory agencies; 

10 (B) information otherwise obtainable from 

11 Federal or State regulatory agencies; 

12 (C) information that is otherwise required 

13 to be reported publicly; and 

14 (D) externally audited financial statements 

15 of such company or subsidiary. 

16 (3) AVAILABILITY.—Upon the request of the 

17 Board of Governors, a nonbank financial company 

18 supervised by the Board of Governors, or a sub19 sidiary thereof, shall promptly provide to the Board 

20 of Governors any information described in para21 graph (2). 

22 (b) EXAMINATIONS.— 

23 (1) IN GENERAL.—Subject to paragraph (2), 

24 the Board of Governors may examine any nonbank 

25 financial company supervised by the Board of GovVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00084 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
85 

•S 3217 AMDT 3739 

1 ernors and any subsidiary of such company, to de2 termine— 

3 (A) the nature of the operations and finan4 cial condition of the company and such sub5 sidiary; 

6 (B) the financial, operational, and other 

7 risks within the company that may pose a 

8 threat to the safety and soundness of such com9 pany or to the financial stability of the United 

10 States; 

11 (C) the systems for monitoring and con12 trolling such risks; and 

13 (D) compliance by the company with the 

14 requirements of this subtitle. 

15 (2) USE OF EXAMINATION REPORTS AND IN16 FORMATION.—For purposes of this subsection, the 

17 Board of Governors shall, to the fullest extent pos18 sible, rely on reports of examination of any deposi19 tory institution subsidiary or functionally regulated 

20 subsidiary made by the primary financial regulatory 

21 agency for that subsidiary, and on information de22 scribed in subsection (a)(2). 

23 (c) COORDINATION WITH PRIMARY FINANCIAL REG24 ULATORY AGENCY.—The Board of Governors shall— 


sroberts on DSKH9S0YB1PROD with BILLS
86 

•S 3217 AMDT 3739 

1 (1) provide to the primary financial regulatory 

2 agency for any company or subsidiary, reasonable 

3 notice before requiring a report, requesting informa4 tion, or commencing an examination of such sub5 sidiary under this section; and 

6 (2) avoid duplication of examination activities, 

7 reporting requirements, and requests for informa8 tion, to the extent possible. 

9 SEC. 162. ENFORCEMENT. 

10 (a) IN GENERAL.—Except as provided in subsection 

11 (b), a nonbank financial company supervised by the Board 

12 of Governors and any subsidiaries of such company (other 

13 than any depository institution subsidiary) shall be subject 

14 to the provisions of subsections (b) through (n) of section 

15 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), 

16 in the same manner and to the same extent as if the com17 pany were a bank holding company, as provided in section 

18 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 

19 1818(b)(3)). 

20 (b) ENFORCEMENT AUTHORITY FOR FUNCTIONALLY

21 REGULATED SUBSIDIARIES.— 

22 (1) REFERRAL.—If the Board of Governors de23 termines that a condition, practice, or activity of a 

24 depository institution subsidiary or functionally reg25 ulated subsidiary of a nonbank financial company 


sroberts on DSKH9S0YB1PROD with BILLS
87 

•S 3217 AMDT 3739 

1 supervised by the Board of Governors does not com2 ply with the regulations or orders prescribed by the 

3 Board of Governors under this Act, or otherwise 

4 poses a threat to the financial stability of the United 

5 States, the Board of Governors may recommend, in 

6 writing, to the primary financial regulatory agency 

7 for the subsidiary that such agency initiate a super8 visory action or enforcement proceeding. The rec9 ommendation shall be accompanied by a written ex10 planation of the concerns giving rise to the rec11 ommendation. 

12 (2) BACK-UP AUTHORITY OF THE BOARD OF

13 GOVERNORS.—If, during the 60-day period begin14 ning on the date on which the primary financial reg15 ulatory agency receives a recommendation under 

16 paragraph (1), the primary financial regulatory 

17 agency does not take supervisory or enforcement ac18 tion against a subsidiary that is acceptable to the 

19 Board of Governors, the Board of Governors (upon 

20 a vote of its members) may take the recommended 

21 supervisory or enforcement action, as if the sub22 sidiary were a bank holding company subject to su23 pervision by the Board of Governors. 


sroberts on DSKH9S0YB1PROD with BILLS
88 

•S 3217 AMDT 3739 

1 SEC. 163. ACQUISITIONS. 

2 (a) ACQUISITIONS OF BANKS; TREATMENT AS A

3 BANK HOLDING COMPANY.—For purposes of section 3 of 

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

5 1842), a nonbank financial company supervised by the 

6 Board of Governors shall be deemed to be, and shall be 

7 treated as, a bank holding company. 

8 (b) ACQUISITION OF NONBANK COMPANIES.— 

9 (1) PRIOR NOTICE FOR LARGE ACQUISITIONS.— 

10 Notwithstanding section 4(k)(6)(B) of the Bank 

11 Holding Company Act of 1956 (12 U.S.C. 

12 1843(k)(6)(B)), a bank holding company with total 

13 consolidated assets equal to or greater than 

14 $50,000,000,000 or a nonbank financial company 

15 supervised by the Board of Governors shall not ac16 quire direct or indirect ownership or control of any 

17 voting shares of any company (other than an insured 

18 depository institution) that is engaged in activities 

19 described in section 4(k) of the Bank Holding Com20 pany Act of 1956 having total consolidated assets of 

21 $10,000,000,000 or more, without providing written 

22 notice to the Board of Governors in advance of the 

23 transaction. 

24 (2) EXEMPTIONS.—The prior notice require25 ment in paragraph (1) shall not apply with regard 

26 to the acquisition of shares that would qualify for 


sroberts on DSKH9S0YB1PROD with BILLS
89 

•S 3217 AMDT 3739 

1 the exemptions in section 4(c) or section 4(k)(4)(E) 

2 of the Bank Holding Company Act of 1956 (12 

3 U.S.C. 1843(c) and (k)(4)(E)). 

4 (3) NOTICE PROCEDURES.—The notice proce5 dures set forth in section 4(j)(1) of the Bank Hold6 ing Company Act of 1956 (12 U.S.C. 1843(j)(1)), 

7 without regard to section 4(j)(3) of that Act, shall 

8 apply to an acquisition of any company (other than 

9 an insured depository institution) by a bank holding 

10 company with total consolidated assets equal to or 

11 greater than $50,000,000,000 or a nonbank finan12 cial company supervised by the Board of Governors, 

13 as described in paragraph (1), including any such 

14 company engaged in activities described in section 

15 4(k) of that Act. 

16 (4) STANDARDS FOR REVIEW.—In addition to 

17 the standards provided in section 4(j)(2) of the 

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

19 1843(j)(2)), the Board of Governors shall consider 

20 the extent to which the proposed acquisition would 

21 result in greater or more concentrated risks to global 

22 or United States financial stability or the United 

23 States economy. 


sroberts on DSKH9S0YB1PROD with BILLS
90 

•S 3217 AMDT 3739 

1 SEC. 164. PROHIBITION AGAINST MANAGEMENT INTER2 LOCKS BETWEEN CERTAIN FINANCIAL COM3 PANIES. 

4 A nonbank financial company supervised by the 

5 Board of Governors shall be treated as a bank holding 

6 company for purposes of the Depository Institutions Man7 agement Interlocks Act (12 U.S.C. 3201 et seq.), except 

8 that the Board of Governors shall not exercise the author9 ity provided in section 7 of that Act (12 U.S.C. 3207) 

10 to permit service by a management official of a nonbank 

11 financial company supervised by the Board of Governors 

12 as a management official of any bank holding company 

13 with total consolidated assets equal to or greater than 

14 $50,000,000,000, or other nonaffiliated nonbank financial 

15 company supervised by the Board of Governors (other 

16 than to provide a temporary exemption for interlocks re17 sulting from a merger, acquisition, or consolidation). 

18 SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL 

19 STANDARDS FOR NONBANK FINANCIAL COM20 PANIES SUPERVISED BY THE BOARD OF GOV21 ERNORS AND CERTAIN BANK HOLDING COM22 PANIES. 

23 (a) IN GENERAL.— 

24 (1) PURPOSE.—In order to prevent or mitigate 

25 risks to the financial stability of the United States 

26 that could arise from the material financial distress 


sroberts on DSKH9S0YB1PROD with BILLS
91 

•S 3217 AMDT 3739 

1 or failure of large, interconnected financial institu2 tions, the Board of Governors shall, on its own or 

3 pursuant to recommendations by the Council under 

4 section 115, establish prudential standards and re5 porting and disclosure requirements applicable to 

6 nonbank financial companies supervised by the 

7 Board of Governors and large, interconnected bank 

8 holding companies that— 

9 (A) are more stringent than the standards 

10 and requirements applicable to nonbank finan11 cial companies and bank holding companies 

12 that do not present similar risks to the financial 

13 stability of the United States; and 

14 (B) increase in stringency, based on the 

15 considerations identified in subsection (b)(3). 

16 (2) LIMITATION ON BANK HOLDING COMPA17 NIES.—Any standards established under subsections 

18 (b) through (f) shall not apply to any bank holding 

19 company with total consolidated assets of less than 

20 $50,000,000,000, but the Board of Governors may 

21 establish an asset threshold greater than 

22 $50,000,000,000 for the applicability of any par23 ticular standard under subsections (b) through (f). 

24 (b) DEVELOPMENT OF PRUDENTIAL STANDARDS.— 

25 (1) IN GENERAL.— 


sroberts on DSKH9S0YB1PROD with BILLS
92 

•S 3217 AMDT 3739 

1 (A) REQUIRED STANDARDS.—The Board 

2 of Governors shall, by regulation or order, es3 tablish prudential standards for nonbank finan4 cial companies supervised by the Board of Gov5 ernors and bank holding companies described in 

6 subsection (a), that shall include— 

7 (i) risk-based capital requirements; 

8 (ii) leverage limits; 

9 (iii) liquidity requirements; 

10 (iv) resolution plan and credit expo11 sure report requirements; and 

12 (v) concentration limits. 

13 (B) ADDITIONAL STANDARDS AUTHOR14 IZED.—The Board of Governors may, by regu15 lation or order, establish prudential standards 

16 for nonbank financial companies supervised by 

17 the Board of Governors and bank holding com18 panies described in subsection (a), that in19 clude— 

20 (i) a contingent capital requirement; 

21 (ii) enhanced public disclosures; and 

22 (iii) overall risk management require23 ments. 

24 (2) PRUDENTIAL STANDARDS FOR FOREIGN FI25 NANCIAL COMPANIES.—In applying the standards 


sroberts on DSKH9S0YB1PROD with BILLS
93 

•S 3217 AMDT 3739 

1 set forth in paragraph (1) to foreign nonbank finan2 cial companies supervised by the Board of Governors 

3 and to foreign-based bank holding companies, the 

4 Board of Governors shall give due regard to the 

5 principle of national treatment and competitive eq6 uity. 

7 (3) CONSIDERATIONS.—In prescribing pruden8 tial standards under paragraph (1), the Board of 

9 Governors shall— 

10 (A) take into account differences among 

11 nonbank financial companies supervised by the 

12 Board of Governors and bank holding compa13 nies described in subsection (a), based on— 

14 (i) the factors described in subsections 

15 (a) and (b) of section 113; 

16 (ii) whether the company owns an in17 sured depository institution; 

18 (iii) nonfinancial activities and affili19 ations of the company; and 

20 (iv) any other factors that the Board 

21 of Governors determines appropriate; 

22 (B) to the extent possible, ensure that 

23 small changes in the factors listed in sub24 sections (a) and (b) of section 113 would not 

25 result in sharp, discontinuous changes in the 


sroberts on DSKH9S0YB1PROD with BILLS
94 

•S 3217 AMDT 3739 

1 prudential standards established under para2 graph (1) of this subsection; and 

3 (C) take into account any recommenda4 tions of the Council under section 115. 

5 (4) REPORT.—The Board of Governors shall 

6 submit an annual report to Congress regarding the 

7 implementation of the prudential standards required 

8 pursuant to paragraph (1), including the use of such 

9 standards to mitigate risks to the financial stability 

10 of the United States. 

11 (c) CONTINGENT CAPITAL.— 

12 (1) IN GENERAL.—Subsequent to submission by 

13 the Council of a report to Congress under section 

14 115(c), the Board of Governors may promulgate reg15 ulations that require each nonbank financial com16 pany supervised by the Board of Governors and 

17 bank holding companies described in subsection (a) 

18 to maintain a minimum amount of long-term hybrid 

19 debt that is convertible to equity in times of finan20 cial stress. 

21 (2) FACTORS TO CONSIDER.—In establishing 

22 regulations under this subsection, the Board of Gov23 ernors shall consider— 


sroberts on DSKH9S0YB1PROD with BILLS
95 

•S 3217 AMDT 3739 

1 (A) the results of the study undertaken by 

2 the Council, and any recommendations of the 

3 Council, under section 115(c); 

4 (B) an appropriate transition period for 

5 implementation of a conversion under this sub6 section; 

7 (C) the factors described in subsection 

8 (b)(3)(A); 

9 (D) capital requirements applicable to the 

10 nonbank financial company supervised by the 

11 Board of Governors or a bank holding company 

12 described in subsection (a), and subsidiaries 

13 thereof; and 

14 (E) any other factor that the Board of 

15 Governors deems appropriate. 

16 (d) RESOLUTION PLAN AND CREDIT EXPOSURE RE17 PORTS.— 

18 (1) RESOLUTION PLAN.—The Board of Gov19 ernors shall require each nonbank financial company 

20 supervised by the Board of Governors and bank 

21 holding companies described in subsection (a) to re22 port periodically to the Board of Governors, the 

23 Council, and the Corporation the plan of such com24 pany for rapid and orderly resolution in the event of 

25 material financial distress or failure. 


sroberts on DSKH9S0YB1PROD with BILLS
96 

•S 3217 AMDT 3739 

1 (2) CREDIT EXPOSURE REPORT.—The Board of 

2 Governors shall require each nonbank financial com3 pany supervised by the Board of Governors and 

4 bank holding companies described in subsection (a) 

5 to report periodically to the Board of Governors, the 

6 Council, and the Corporation on— 

7 (A) the nature and extent to which the 

8 company has credit exposure to other signifi9 cant nonbank financial companies and signifi10 cant bank holding companies; and 

11 (B) the nature and extent to which other 

12 significant nonbank financial companies and 

13 significant bank holding companies have credit 

14 exposure to that company. 

15 (3) REVIEW.—The Board of Governors and the 

16 Corporation shall review the information provided in 

17 accordance with this section by each nonbank finan18 cial company supervised by the Board of Governors 

19 and bank holding company described in subsection 

20 (a). 

21 (4) NOTICE OF DEFICIENCIES.—If the Board of 

22 Governors and the Corporation jointly determine, 

23 based on their review under paragraph (3), that the 

24 resolution plan of a nonbank financial company su25 pervised by the Board of Governors or a bank holdVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00096 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
97 

•S 3217 AMDT 3739 

1 ing company described in subsection (a) is not cred2 ible or would not facilitate an orderly resolution of 

3 the company under title 11, United States Code— 

4 (A) the Board of Governors and the Cor5 poration shall notify the company, as applica6 ble, of the deficiencies in the resolution plan; 

7 and 

8 (B) the company shall resubmit the resolu9 tion plan within a time frame determined by the 

10 Board of Governors and the Corporation, with 

11 revisions demonstrating that the plan is credible 

12 and would result in an orderly resolution under 

13 title 11, United States Code, including any pro14 posed changes in business operations and cor15 porate structure to facilitate implementation of 

16 the plan. 

17 (5) FAILURE TO RESUBMIT CREDIBLE PLAN.— 

18 (A) IN GENERAL.—If a nonbank financial 

19 company supervised by the Board of Governors 

20 or a bank holding company described in sub21 section (a) fails to timely resubmit the resolu22 tion plan as required under paragraph (4), with 

23 such revisions as are required under subpara24 graph (B), the Board of Governors and the 

25 Corporation may jointly impose more stringent 


sroberts on DSKH9S0YB1PROD with BILLS
98 

•S 3217 AMDT 3739 

1 capital, leverage, or liquidity requirements, or 

2 restrictions on the growth, activities, or oper3 ations of the company, or any subsidiary there4 of, until such time as the company resubmits a 

5 plan that remedies the deficiencies. 

6 (B) DIVESTITURE.—The Board of Gov7 ernors and the Corporation, in consultation 

8 with the Council, may direct a nonbank finan9 cial company supervised by the Board of Gov10 ernors or a bank holding company described in 

11 subsection (a), by order, to divest certain assets 

12 or operations identified by the Board of Gov13 ernors and the Corporation, to facilitate an or14 derly resolution of such company under title 11, 

15 United States Code, in the event of the failure 

16 of such company, in any case in which— 

17 (i) the Board of Governors and the 

18 Corporation have jointly imposed more 

19 stringent requirements on the company 

20 pursuant to subparagraph (A); and 

21 (ii) the company has failed, within the 

22 2-year period beginning on the date of the 

23 imposition of such requirements under sub24 paragraph (A), to resubmit the resolution 


sroberts on DSKH9S0YB1PROD with BILLS
99 

•S 3217 AMDT 3739 

1 plan with such revisions as were required 

2 under paragraph (4)(B). 

3 (6) RULES.—Not later than 18 months after 

4 the date of enactment of this Act, the Board of Gov5 ernors and the Corporation shall jointly issue final 

6 rules implementing this subsection. 

7 (e) CONCENTRATION LIMITS.— 

8 (1) STANDARDS.—In order to limit the risks 

9 that the failure of any individual company could 

10 pose to a nonbank financial company supervised by 

11 the Board of Governors or a bank holding company 

12 described in subsection (a), the Board of Governors, 

13 by regulation, shall prescribe standards that limit 

14 such risks. 

15 (2) LIMITATION ON CREDIT EXPOSURE.—The 

16 regulations prescribed by the Board of Governors 

17 under paragraph (1) shall prohibit each nonbank fi18 nancial company supervised by the Board of Gov19 ernors and bank holding company described in sub20 section (a) from having credit exposure to any unaf21 filiated company that exceeds 25 percent of the cap22 ital stock and surplus (or such lower amount as the 

23 Board of Governors may determine by regulation to 

24 be necessary to mitigate risks to the financial sta25 bility of the United States) of the company. 


sroberts on DSKH9S0YB1PROD with BILLS
100 

•S 3217 AMDT 3739 

1 (3) CREDIT EXPOSURE.—For purposes of para2 graph (2), ‘‘credit exposure’’ to a company means— 

3 (A) all extensions of credit to the company, 

4 including loans, deposits, and lines of credit; 

5 (B) all repurchase agreements and reverse 

6 repurchase agreements with the company; 

7 (C) all securities borrowing and lending 

8 transactions with the company, to the extent 

9 that such transactions create credit exposure 

10 for the nonbank financial company supervised 

11 by the Board of Governors or a bank holding 

12 company described in subsection (a); 

13 (D) all guarantees, acceptances, or letters 

14 of credit (including endorsement or standby let15 ters of credit) issued on behalf of the company; 

16 (E) all purchases of or investment in secu17 rities issued by the company; 

18 (F) counterparty credit exposure to the 

19 company in connection with a derivative trans20 action between the nonbank financial company 

21 supervised by the Board of Governors or a bank 

22 holding company described in subsection (a) 

23 and the company; and 

24 (G) any other similar transactions that the 

25 Board of Governors, by regulation, determines 


sroberts on DSKH9S0YB1PROD with BILLS
101 

•S 3217 AMDT 3739 

1 to be a credit exposure for purposes of this sec2 tion. 

3 (4) ATTRIBUTION RULE.—For purposes of this 

4 subsection, any transaction by a nonbank financial 

5 company supervised by the Board of Governors or a 

6 bank holding company described in subsection (a) 

7 with any person is a transaction with a company, to 

8 the extent that the proceeds of the transaction are 

9 used for the benefit of, or transferred to, that com10 pany. 

11 (5) RULEMAKING.—The Board of Governors 

12 may issue such regulations and orders, including 

13 definitions consistent with this section, as may be 

14 necessary to administer and carry out this sub15 section. 

16 (6) EXEMPTIONS.—The Board of Governors 

17 may, by regulation or order, exempt transactions, in 

18 whole or in part, from the definition of ‘‘credit expo19 sure’’ for purposes of this subsection, if the Board 

20 of Governors finds that the exemption is in the pub21 lic interest and is consistent with the purpose of this 

22 subsection. 

23 (7) TRANSITION PERIOD.— 

24 (A) IN GENERAL.—This subsection and 

25 any regulations and orders of the Board of GovVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00101 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
102 

•S 3217 AMDT 3739 

1 ernors under this subsection shall not be effec2 tive until 3 years after the date of enactment 

3 of this Act. 

4 (B) EXTENSION AUTHORIZED.—The 

5 Board of Governors may extend the period 

6 specified in subparagraph (A) for not longer 

7 than an additional 2 years. 

8 (f) ENHANCED PUBLIC DISCLOSURES.—The Board 

9 of Governors may prescribe, by regulation, periodic public 

10 disclosures by nonbank financial companies supervised by 

11 the Board of Governors and bank holding companies de12 scribed in subsection (a) in order to support market eval13 uation of the risk profile, capital adequacy, and risk man14 agement capabilities thereof. 

15 (g) RISK COMMITTEE.— 

16 (1) NONBANK FINANCIAL COMPANIES SUPER17 VISED BY THE BOARD OF GOVERNORS.—The Board 

18 of Governors shall require each nonbank financial 

19 company supervised by the Board of Governors that 

20 is a publicly traded company to establish a risk com21 mittee, as set forth in paragraph (3), not later than 

22 1 year after the date of receipt of a notice of final 

23 determination under section 113(d)(3) with respect 

24 to such nonbank financial company supervised by 

25 the Board of Governors. 


sroberts on DSKH9S0YB1PROD with BILLS
103 

•S 3217 AMDT 3739 

1 (2) CERTAIN BANK HOLDING COMPANIES.— 

2 (A) MANDATORY REGULATIONS.—The 

3 Board of Governors shall issue regulations re4 quiring each bank holding company that is a 

5 publicly traded company and that has total con6 solidated assets of not less than 

7 $10,000,000,000 to establish a risk committee, 

8 as set forth in paragraph (3). 

9 (B) PERMISSIVE REGULATIONS.—The 

10 Board of Governors may require each bank 

11 holding company that is a publicly traded com12 pany and that has total consolidated assets of 

13 less than $10,000,000,000 to establish a risk 

14 committee, as set forth in paragraph (3), as de15 termined necessary or appropriate by the Board 

16 of Governors to promote sound risk manage17 ment practices. 

18 (3) RISK COMMITTEE.—A risk committee re19 quired by this subsection shall— 

20 (A) be responsible for the oversight of the 

21 enterprise-wide risk management practices of 

22 the nonbank financial company supervised by 

23 the Board of Governors or bank holding com24 pany described in subsection (a), as applicable; 


sroberts on DSKH9S0YB1PROD with BILLS
104 

•S 3217 AMDT 3739 

1 (B) include such number of independent 

2 directors as the Board of Governors may deter3 mine appropriate, based on the nature of oper4 ations, size of assets, and other appropriate cri5 teria related to the nonbank financial company 

6 supervised by the Board of Governors or a bank 

7 holding company described in subsection (a), as 

8 applicable; and 

9 (C) include at least 1 risk management ex10 pert having experience in identifying, assessing, 

11 and managing risk exposures of large, complex 

12 firms. 

13 (4) RULEMAKING.—The Board of Governors 

14 shall issue final rules to carry out this subsection, 

15 not later than 1 year after the transfer date, to take 

16 effect not later than 15 months after the transfer 

17 date. 

18 (h) STRESS TESTS.—The Board of Governors shall 

19 conduct analyses in which nonbank financial companies 

20 supervised by the Board of Governors and bank holding 

21 companies described in subsection (a) are subject to eval22 uation of whether the companies have the capital, on a 

23 total consolidated basis, necessary to absorb losses as a 

24 result of adverse economic conditions. The Board of Gov25 ernors may develop and apply such other analytic techVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00104 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
105 

•S 3217 AMDT 3739 

1 niques as are necessary to identify, measure, and monitor 

2 risks to the financial stability of the United States. 

3 SEC. 166. EARLY REMEDIATION REQUIREMENTS. 

4 (a) IN GENERAL.—The Board of Governors, in con5 sultation with the Council and the Corporation, shall pre6 scribe regulations establishing requirements to provide for 

7 the early remediation of financial distress of a nonbank 

8 financial company supervised by the Board of Governors 

9 or a bank holding company described in section 165(a), 

10 except that nothing in this subsection authorizes the provi11 sion of financial assistance from the Federal Government. 

12 (b) PURPOSE OF THE EARLY REMEDIATION RE13 QUIREMENTS.—The purpose of the early remediation re14 quirements under subsection (a) shall be to establish a se15 ries of specific remedial actions to be taken by a nonbank 

16 financial company supervised by the Board of Governors 

17 or a bank holding company described in section 165(a) 

18 that is experiencing increasing financial distress, in order 

19 to minimize the probability that the company will become 

20 insolvent and the potential harm of such insolvency to the 

21 financial stability of the United States. 

22 (c) REMEDIATION REQUIREMENTS.—The regulations 

23 prescribed by the Board of Governors under subsection (a) 

24 shall— 


sroberts on DSKH9S0YB1PROD with BILLS
106 

•S 3217 AMDT 3739 

1 (1) define measures of the financial condition of 

2 the company, including regulatory capital, liquidity 

3 measures, and other forward-looking indicators; and 

4 (2) establish requirements that increase in 

5 stringency as the financial condition of the company 

6 declines, including— 

7 (A) requirements in the initial stages of fi8 nancial decline, including limits on capital dis9 tributions, acquisitions, and asset growth; and 

10 (B) requirements at later stages of finan11 cial decline, including a capital restoration plan 

12 and capital-raising requirements, limits on 

13 transactions with affiliates, management 

14 changes, and asset sales. 

15 SEC. 167. AFFILIATIONS. 

16 (a) AFFILIATIONS.—Nothing in this subtitle shall be 

17 construed to require a nonbank financial company super18 vised by the Board of Governors, or a company that con19 trols a nonbank financial company supervised by the 

20 Board of Governors, to conform the activities thereof to 

21 the requirements of section 4 of the Bank Holding Com22 pany Act of 1956 (12 U.S.C. 1843). 

23 (b) REQUIREMENT.— 

24 (1) IN GENERAL.—If a nonbank financial com25 pany supervised by the Board of Governors conducts 


sroberts on DSKH9S0YB1PROD with BILLS
107 

•S 3217 AMDT 3739 

1 activities other than those that are determined to be 

2 financial in nature or incidental thereto under sec3 tion 4(k) of the Bank Holding Company Act of 

4 1956, the Board of Governors may require such 

5 company to establish and conduct such activities 

6 that are determined to be financial in nature or inci7 dental thereto in an intermediate holding company 

8 established pursuant to regulation of the Board of 

9 Governors, not later than 90 days after the date on 

10 which the nonbank financial company supervised by 

11 the Board of Governors was notified of the deter12 mination under section 113(a). 

13 (2) INTERNAL FINANCIAL ACTIVITIES.—For 

14 purposes of this subsection, activities that are deter15 mined to be financial in nature or incidental thereto 

16 under section 4(k) of the Bank Holding Company 

17 Act of 1956, as described in paragraph (1), shall not 

18 include internal financial activities conducted for a 

19 nonbank financial company supervised by the Board 

20 of Governors or any affiliate, including internal 

21 treasury, investment, and employee benefit func22 tions. With respect to any internal financial activity 

23 of such company during the year prior to the date 

24 of enactment of this Act, such company may con25 tinue to engage in such activity as long as at least 


sroberts on DSKH9S0YB1PROD with BILLS
108 

•S 3217 AMDT 3739 

2⁄3 of the assets or 2 1 ⁄3 of the revenues generated 

2 from the activity are from or attributable to such 

3 company, subject to review by the Board of Gov4 ernors, to determine whether engaging in such activ5 ity presents undue risk to such company or to the 

6 financial stability of the United States. 

7 (c) REGULATIONS.—The Board of Governors— 

8 (1) shall promulgate regulations to establish the 

9 criteria for determining whether to require a 

10 nonbank financial company supervised by the Board 

11 of Governors to establish an intermediate holding 

12 company under subsection (a); and 

13 (2) may promulgate regulations to establish any 

14 restrictions or limitations on transactions between 

15 an intermediate holding company or a nonbank fi16 nancial company supervised by the Board of Gov17 ernors and its affiliates, as necessary to prevent un18 safe and unsound practices in connection with trans19 actions between such company, or any subsidiary 

20 thereof, and its parent company or affiliates that are 

21 not subsidiaries of such company, except that such 

22 regulations shall not restrict or limit any transaction 

23 in connection with the bona fide acquisition or lease 

24 by an unaffiliated person of assets, goods, or serv25 ices. 


sroberts on DSKH9S0YB1PROD with BILLS
109 

•S 3217 AMDT 3739 

1 SEC. 168. REGULATIONS. 

2 Except as otherwise specified in this subtitle, not 

3 later than 18 months after the transfer date, the Board 

4 of Governors shall issue final regulations to implement 

5 this subtitle and the amendments made by this subtitle. 

6 SEC. 169. AVOIDING DUPLICATION. 

7 The Board of Governors shall take any action that 

8 the Board of Governors deems appropriate to avoid impos9 ing requirements under this subtitle that are duplicative 

10 of requirements applicable to bank holding companies and 

11 nonbank financial companies under other provisions of 

12 law. 

13 SEC. 170. SAFE HARBOR. 

14 (a) REGULATIONS.—The Board of Governors shall 

15 promulgate regulations on behalf of, and in consultation 

16 with, the Council setting forth the criteria for exempting 

17 certain types or classes of U.S. nonbank financial compa18 nies or foreign nonbank financial companies from super19 vision by the Board of Governors. 

20 (b) CONSIDERATIONS.—In developing the criteria 

21 under subsection (a), the Board of Governors shall take 

22 into account the factors for consideration described in sub23 sections (a) and (b) of section 113 in determining whether 

24 a U.S. nonbank financial company or foreign nonbank fi25 nancial company shall be supervised by the Board of Gov26 ernors. 


sroberts on DSKH9S0YB1PROD with BILLS
110 

•S 3217 AMDT 3739 

1 (c) RULE OF CONSTRUCTION.—Nothing in this sec2 tion shall be construed to require supervision by the Board 

3 of Governors of a U.S. nonbank financial company or for4 eign nonbank financial company, if such company does not 

5 meet the criteria for exemption established under sub6 section (a). 

7 (d) UPDATE.—The Board of Governors shall, in con8 sultation with the Council, review the regulations promul9 gated under subsection (a), not less frequently than every 

10 5 years, and based upon the review, the Board of Gov11 ernors may revise such regulations on behalf of, and in 

12 consultation with, the Council to update as necessary the 

13 criteria set forth in such regulations. 

14 (e) TRANSITION PERIOD.—No revisions under sub15 section (d) shall take effect before the end of the 2-year 

16 period after the date of publication of such revisions in 

17 final form. 

18 (f) REPORT.—The Chairperson of the Board of Gov19 ernors and the Chairperson of the Council shall submit 

20 a joint report to the Committee on Banking, Housing, and 

21 Urban Affairs of the Senate and the Committee on Finan22 cial Services of the House of Representatives not later 

23 than 30 days after the date of the issuance in final form 

24 of the regulations under subsection (a), or any subsequent 

25 revision to such regulations under subsection (d), as appliVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00110 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
111 

•S 3217 AMDT 3739 

1 cable. Such report shall include, at a minimum, the ration2 ale for exemption and empirical evidence to support the 

3 criteria for exemption. 

4 TITLE II—ORDERLY 

5 LIQUIDATION AUTHORITY 

6 SEC. 201. DEFINITIONS. 

7 In this title, the following definitions shall apply: 

8 (1) ADMINISTRATIVE EXPENSES OF THE RE9 CEIVER.—The term ‘‘administrative expenses of the 

10 receiver’’ includes— 

11 (A) the actual, necessary costs and ex12 penses incurred by the Corporation as receiver 

13 for a covered financial company in liquidating a 

14 covered financial company; and 

15 (B) any obligations that the Corporation 

16 as receiver for a covered financial company de17 termines are necessary and appropriate to fa18 cilitate the smooth and orderly liquidation of 

19 the covered financial company. 

20 (2) BANKRUPTCY CODE.—The term ‘‘Bank21 ruptcy Code’’ means title 11, United States Code. 

22 (3) BRIDGE FINANCIAL COMPANY.—The term 

23 ‘‘bridge financial company’’ means a new financial 

24 company organized by the Corporation in accordance 


sroberts on DSKH9S0YB1PROD with BILLS
112 

•S 3217 AMDT 3739 

1 with section 210(h) for the purpose of resolving a 

2 covered financial company. 

3 (4) CLAIM.—The term ‘‘claim’’ means any right 

4 of payment, whether or not such right is reduced to 

5 judgment, liquidated, unliquidated, fixed, contingent, 

6 matured, unmatured, disputed, undisputed, legal, eq7 uitable, secured, or unsecured. 

8 (5) COMPANY.—The term ‘‘company’’ has the 

9 same meaning as in section 2(b) of the Bank Hold10 ing Company Act of 1956 (12 U.S.C. 1841(b)), ex11 cept that such term includes any company described 

12 in paragraph (11), the majority of the securities of 

13 which are owned by the United States or any State. 

14 (6) COVERED BROKER OR DEALER.—The term 

15 ‘‘covered broker or dealer’’ means a covered financial 

16 company that is a broker or dealer that— 

17 (A) is registered with the Commission 

18 under section 15(b) of the Securities Exchange 

19 Act of 1934 (15 U.S.C. 78o(b)); and 

20 (B) is a member of SIPC. 

21 (7) COVERED FINANCIAL COMPANY.—The term 

22 ‘‘covered financial company’’— 

23 (A) means a financial company for which 

24 a determination has been made under section 

25 203(b); and 


sroberts on DSKH9S0YB1PROD with BILLS
113 

•S 3217 AMDT 3739 

1 (B) does not include an insured depository 

2 institution. 

3 (8) COVERED SUBSIDIARY.—The term ‘‘covered 

4 subsidiary’’ means a subsidiary of a covered finan5 cial company, other than— 

6 (A) an insured depository institution; 

7 (B) an insurance company; or 

8 (C) a covered broker or dealer. 

9 (9) DEFINITIONS RELATING TO COVERED BRO10 KERS AND DEALERS.—The terms ‘‘customer’’, ‘‘cus11 tomer name securities’’, ‘‘customer property’’, and 

12 ‘‘net equity’’ in the context of a covered broker or 

13 dealer, have the same meanings as in section 16 of 

14 the Securities Investor Protection Act of 1970 (15 

15 U.S.C. 78lll). 

16 (10) FINANCIAL COMPANY.—The term ‘‘finan17 cial company’’ means any company that— 

18 (A) is incorporated or organized under any 

19 provision of Federal law or the laws of any 

20 State; 

21 (B) is— 

22 (i) a bank holding company, as de23 fined in section 2(a) of the Bank Holding 

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


sroberts on DSKH9S0YB1PROD with BILLS
114 

•S 3217 AMDT 3739 

1 1841(a)), and including any company de2 scribed in paragraph (5); 

3 (ii) a nonbank financial company su4 pervised by the Board of Governors; 

5 (iii) any company that is predomi6 nantly engaged in activities that the Board 

7 of Governors has determined are financial 

8 in nature or incidental thereto for purposes 

9 of section 4(k) of the Bank Holding Com10 pany Act of 1956 (12 U.S.C. 1843(k)) 

11 other than a company described in clause 

12 (i) or (ii); or 

13 (iv) any subsidiary of any company 

14 described in any of clauses (i) through (iii) 

15 (other than a subsidiary that is an insured 

16 depository institution or an insurance com17 pany); and 

18 (C) is not a Farm Credit System institu19 tion chartered under and subject to the provi20 sions of the Farm Credit Act of 1971, as 

21 amended (12 U.S.C. 2001 et seq.). 

22 (11) FUND.—The term ‘‘Fund’’ means the Or23 derly Liquidation Fund established under section 

24 210(n). 


sroberts on DSKH9S0YB1PROD with BILLS
115 

•S 3217 AMDT 3739 

1 (12) INSURANCE COMPANY.—The term ‘‘insur2 ance company’’ means any entity that is— 

3 (A) engaged in the business of insurance; 

4 (B) subject to regulation by a State insur5 ance regulator; and 

6 (C) covered by a State law that is designed 

7 to specifically deal with the rehabilitation, liq8 uidation, or insolvency of an insurance com9 pany. 

10 (13) NONBANK FINANCIAL COMPANY.—The 

11 term ‘‘nonbank financial company’’ has the same 

12 meaning as in section 102(a)(4)(C). 

13 (14) NONBANK FINANCIAL COMPANY SUPER14 VISED BY THE BOARD OF GOVERNORS.—The term 

15 ‘‘nonbank financial company supervised by the 

16 Board of Governors’’ has the same meaning as in 

17 section 102(a)(3)(D). 

18 (15) PANEL.—The term ‘‘Panel’’ means the Or19 derly Liquidation Authority Panel established under 

20 section 202. 

21 (16) SIPC.—The term ‘‘SIPC’’ means the Se22 curities Investor Protection Corporation. 

23 SEC. 202. ORDERLY LIQUIDATION AUTHORITY PANEL. 

24 (a) ORDERLY LIQUIDATION AUTHORITY PANEL.— 


sroberts on DSKH9S0YB1PROD with BILLS
116 

•S 3217 AMDT 3739 

1 (1) ESTABLISHMENT.—There is established in 

2 the United States Bankruptcy Court for the District 

3 of Delaware, an Orderly Liquidation Authority 

4 Panel. The Chief Judge of the United States Bank5 ruptcy Court for the District of Delaware shall ap6 point judges to the Panel, consistent with paragraph 

7 (2). In making such appointments, the Chief Judge 

8 shall consider the expertise in financial matters of 

9 each judge. 

10 (2) COMPOSITION.—The Panel shall be com11 posed of 3 judges from the United States Bank12 ruptcy Court for the District of Delaware. 

13 (3) JURISDICTION.—The Panel shall have origi14 nal and exclusive jurisdiction of proceedings to con15 sider petitions by the Secretary under subsection 

16 (b)(1). 

17 (b) COMMENCEMENT OF ORDERLY LIQUIDATION.— 

18 (1) PETITION TO PANEL.— 

19 (A) ORDERLY LIQUIDATION AUTHORITY

20 PANEL.— 

21 (i) PETITION TO PANEL.—Subsequent 

22 to a determination by the Secretary under 

23 section 203 that a financial company meets 

24 the criteria in section 203(b), the Sec25 retary, upon notice to the Corporation and 


sroberts on DSKH9S0YB1PROD with BILLS
117 

•S 3217 AMDT 3739 

1 the covered financial company, shall peti2 tion the Panel for an order authorizing the 

3 Secretary to appoint the Corporation as re4 ceiver. 

5 (ii) FORM AND CONTENT OF

6 ORDER.—The Secretary shall present all 

7 relevant findings and the recommendation 

8 made pursuant to section 203(a) to the 

9 Panel. The petition shall be filed under 

10 seal. 

11 (iii) DETERMINATION.—On a strictly 

12 confidential basis, and without any prior 

13 public disclosure, the Panel, after notice to 

14 the covered financial company and a hear15 ing in which the covered financial company 

16 may oppose the petition, shall determine, 

17 within 24 hours of receipt of the petition 

18 filed by the Secretary, whether the deter19 mination of the Secretary that the covered 

20 financial company is in default or in dan21 ger of default is supported by substantial 

22 evidence. 

23 (iv) ISSUANCE OF ORDER.—If the 

24 Panel determines that the determination of 

25 the Secretary that the covered financial 


sroberts on DSKH9S0YB1PROD with BILLS
118 

•S 3217 AMDT 3739 

1 company is in default or in danger of de2 fault— 

3 (I) is supported by substantial 

4 evidence, the Panel shall issue an 

5 order immediately authorizing the 

6 Secretary to appoint the Corporation 

7 as receiver of the covered financial 

8 company; or 

9 (II) is not supported by substan10 tial evidence, the Panel shall imme11 diately provide to the Secretary a 

12 written statement of each reason sup13 porting its determination, and afford 

14 the Secretary an immediate oppor15 tunity to amend and refile the petition 

16 under clause (i). 

17 (B) EFFECT OF DETERMINATION.—The 

18 determination of the Panel under subparagraph 

19 (A) shall be final, and shall be subject to appeal 

20 only in accordance with paragraph (2). The de21 cision shall not be subject to any stay or injunc22 tion pending appeal. Upon conclusion of its pro23 ceedings under subparagraph (A), the Panel 

24 shall provide immediately for the record a writ25 ten statement of each reason supporting the deVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00118 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
119 

•S 3217 AMDT 3739 

1 cision of the Panel, and shall provide copies 

2 thereof to the Secretary and the covered finan3 cial company. 

4 (C) CRIMINAL PENALTIES.—A person who 

5 recklessly discloses a determination of the Sec6 retary under section 203(b) or a petition of the 

7 Secretary under subparagraph (A), or the pend8 ency of court proceedings as provided for under 

9 subparagraph (A), shall be fined not more than 

10 $250,000, or imprisoned for not more than 5 

11 years, or both. 

12 (2) APPEAL OF DECISIONS OF THE PANEL.— 

13 (A) APPEAL TO COURT OF APPEALS.— 

14 (i) IN GENERAL.—Subject to clause 

15 (ii), the United States Court of Appeals for 

16 the Third Circuit shall have jurisdiction of 

17 an appeal of a final decision of the Panel 

18 filed by the Secretary or a covered finan19 cial company, through its board of direc20 tors, notwithstanding section 

21 210(a)(1)(A)(i), not later than 30 days 

22 after the date on which the decision of the 

23 Panel is rendered or deemed rendered 

24 under this subsection. 


sroberts on DSKH9S0YB1PROD with BILLS
120 

•S 3217 AMDT 3739 

1 (ii) CONDITION OF JURISDICTION.— 

2 The Court of Appeals shall have jurisdic3 tion of an appeal by a covered financial 

4 company only if the covered financial com5 pany did not acquiesce or consent to the 

6 appointment of a receiver by the Secretary 

7 under paragraph (1)(A). 

8 (iii) EXPEDITION.—The Court of Ap9 peals shall consider any appeal under this 

10 subparagraph on an expedited basis. 

11 (iv) SCOPE OF REVIEW.—For an ap12 peal taken under this subparagraph, review 

13 shall be limited to whether the determina14 tion of the Secretary that a covered finan15 cial company is in default or in danger of 

16 default is supported by substantial evi17 dence. 

18 (B) APPEAL TO THE SUPREME COURT.— 

19 (i) IN GENERAL.—A petition for a 

20 writ of certiorari to review a decision of 

21 the Court of Appeals under subparagraph 

22 (A) may be filed by the Secretary or the 

23 covered financial company, through its 

24 board of directors, notwithstanding section 

25 210(a)(1)(A)(i), with the Supreme Court 


sroberts on DSKH9S0YB1PROD with BILLS
121 

•S 3217 AMDT 3739 

1 of the United States, not later than 30 

2 days after the date of the final decision of 

3 the Court of Appeals, and the Supreme 

4 Court shall have discretionary jurisdiction 

5 to review such decision. 

6 (ii) WRITTEN STATEMENT.—In the 

7 event of a petition under clause (i), the 

8 Court of Appeals shall immediately provide 

9 for the record a written statement of each 

10 reason for its decision. 

11 (iii) EXPEDITION.—The Supreme 

12 Court shall consider any petition under 

13 this subparagraph on an expedited basis. 

14 (iv) SCOPE OF REVIEW.—Review by 

15 the Supreme Court under this subpara16 graph shall be limited to whether the de17 termination of the Secretary that the cov18 ered financial company is in default or in 

19 danger of default is supported by substan20 tial evidence. 

21 (c) ESTABLISHMENT AND TRANSMITTAL OF RULES

22 AND PROCEDURES.— 

23 (1) IN GENERAL.—Not later than 6 months 

24 after the date of enactment of this Act, the Panel 

25 shall establish such rules and procedures as may be 


sroberts on DSKH9S0YB1PROD with BILLS
122 

•S 3217 AMDT 3739 

1 necessary to ensure the orderly conduct of pro2 ceedings, including rules and procedures to ensure 

3 that the 24-hour deadline is met and that the Sec4 retary shall have an ongoing opportunity to amend 

5 and refile petitions under subsection (b)(1). The 

6 rules and procedures shall include provisions for the 

7 appointment of judges to the Panel, such that the 

8 composition of the Panel is established in advance of 

9 the filing of a petition under subsection (b). 

10 (2) PUBLICATION OF RULES.—The rules and 

11 procedures established under paragraph (1), and any 

12 modifications of such rules and procedures, shall be 

13 recorded and shall be transmitted to— 

14 (A) each judge of the Panel; 

15 (B) the Chief Judge of the United States 

16 Bankruptcy Court for the District of Delaware; 

17 (C) the Committee on the Judiciary of the 

18 Senate; 

19 (D) the Committee on Banking, Housing, 

20 and Urban Affairs of the Senate; 

21 (E) the Committee on the Judiciary of the 

22 House of Representatives; and 

23 (F) the Committee on Financial Services 

24 of the House of Representatives. 


sroberts on DSKH9S0YB1PROD with BILLS
123 

•S 3217 AMDT 3739 

1 (d) PROVISIONS APPLICABLE TO FINANCIAL COMPA2 NIES.— 

3 (1) BANKRUPTCY CODE.—Except as provided in 

4 this subsection, the provisions of the Bankruptcy 

5 Code and rules issued thereunder, and not the provi6 sions of this title, shall apply to financial companies 

7 that are not covered financial companies for which 

8 the Corporation has been appointed as receiver. 

9 (2) THIS TITLE.—The provisions of this title 

10 shall exclusively apply to and govern all matters re11 lating to covered financial companies for which the 

12 Corporation is appointed as receiver, and no provi13 sions of the Bankruptcy Code or the rules issued 

14 thereunder shall apply in such cases. 

15 (e) STUDY OF BANKRUPTCY AND ORDERLY LIQUIDA16 TION PROCESS FOR FINANCIAL COMPANIES.— 

17 (1) STUDY.— 

18 (A) IN GENERAL.—The Administrative Of19 fice of the United States Courts and the Comp20 troller General of the United States shall each 

21 monitor the activities of the Panel, and each 

22 such Office shall conduct separate studies re23 garding the bankruptcy and orderly liquidation 

24 process for financial companies under the 

25 Bankruptcy Code. 


sroberts on DSKH9S0YB1PROD with BILLS
124 

•S 3217 AMDT 3739 

1 (B) ISSUES TO BE STUDIED.—In con2 ducting the study under subparagraph (A), the 

3 Administrative Office of the United States 

4 Courts and the Comptroller General of the 

5 United States each shall evaluate— 

6 (i) the effectiveness of chapter 7 or 

7 chapter 11 of the Bankruptcy Code in fa8 cilitating the orderly liquidation or reorga9 nization of financial companies; 

10 (ii) ways to maximize the efficiency 

11 and effectiveness of the Panel; and 

12 (iii) ways to make the orderly liquida13 tion process under the Bankruptcy Code 

14 for financial companies more effective. 

15 (2) REPORTS.—Not later than 1 year after the 

16 date of enactment of this Act, in each successive 

17 year until the third year, and every fifth year after 

18 that date of enactment, the Administrative Office of 

19 the United States Courts and the Comptroller Gen20 eral of the United States shall submit to the Com21 mittee on Banking, Housing, and Urban Affairs and 

22 the Committee on the Judiciary of the Senate and 

23 the Committee on Financial Services and the Com24 mittee on the Judiciary of the House of RepresentaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00124 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
125 

•S 3217 AMDT 3739 

1 tives separate reports summarizing the results of the 

2 studies conducted under paragraph (1). 

3 (f) STUDY OF INTERNATIONAL COORDINATION RE4 LATING TO BANKRUPTCY PROCESS FOR FINANCIAL COM5 PANIES.— 

6 (1) STUDY.— 

7 (A) IN GENERAL.—The Comptroller Gen8 eral of the United States shall conduct a study 

9 regarding international coordination relating to 

10 the orderly liquidation of financial companies 

11 under the Bankruptcy Code. 

12 (B) ISSUES TO BE STUDIED.—In con13 ducting the study under subparagraph (A), the 

14 Comptroller General of the United States shall 

15 evaluate, with respect to the bankruptcy process 

16 for financial companies— 

17 (i) the extent to which international 

18 coordination currently exists; 

19 (ii) current mechanisms and struc20 tures for facilitating international coopera21 tion; 

22 (iii) barriers to effective international 

23 coordination; and 

24 (iv) ways to increase and make more 

25 effective international coordination. 


sroberts on DSKH9S0YB1PROD with BILLS
126 

•S 3217 AMDT 3739 

1 (2) REPORT.—Not later than 1 year after the 

2 date of enactment of this Act, the Comptroller Gen3 eral of the United States shall submit to the Com4 mittee on Banking, Housing, and Urban Affairs and 

5 the Committee on the Judiciary of the Senate and 

6 the Committee on Financial Services and the Com7 mittee on the Judiciary of the House of Representa8 tives and the Secretary a report summarizing the re9 sults of the study conducted under paragraph (1). 

10 SEC. 203. SYSTEMIC RISK DETERMINATION. 

11 (a) WRITTEN RECOMMENDATION AND DETERMINA12 TION.— 

13 (1) VOTE REQUIRED.— 

14 (A) IN GENERAL.—On their own initiative, 

15 or at the request of the Secretary, the Corpora16 tion and the Board of Governors shall consider 

17 whether to make a written recommendation de18 scribed in paragraph (2) with respect to wheth19 er the Secretary should appoint the Corporation 

20 as receiver for a financial company. Such rec21 ommendation shall be made upon a vote of not 

fewer than 2 22 ⁄3 of the members of the Board of 

Governors then serving and 2 23 ⁄3 of the members 

24 of the board of directors of the Corporation 

25 then serving. 


sroberts on DSKH9S0YB1PROD with BILLS
127 

•S 3217 AMDT 3739 

1 (B) CASES INVOLVING COVERED BROKERS

2 OR DEALERS.—In the case of a covered broker 

3 or dealer, or in which the largest United States 

4 subsidiary (as measured by total assets as of 

5 the end of the previous calendar quarter) of a 

6 financial company is a covered broker or dealer, 

7 the Commission and the Board of Governors, at 

8 the request of the Secretary, or on their own 

9 initiative, shall consider whether to make the 

10 written recommendation described in paragraph 

11 (2) with respect to the financial company. Sub12 ject to the requirements in paragraph (2), such 

13 recommendation shall be made upon a vote of 

not fewer than 2 14 ⁄3 of the members of the Board 

15 of Governors then serving and the members of 

16 the Commission then serving, and in consulta17 tion with the Corporation. 

18 (2) RECOMMENDATION REQUIRED.—Any writ19 ten recommendation pursuant to paragraph (1) shall 

20 contain— 

21 (A) an evaluation of whether the financial 

22 company is in default or in danger of default; 

23 (B) a description of the effect that the de24 fault of the financial company would have on fi25 nancial stability in the United States; 


sroberts on DSKH9S0YB1PROD with BILLS
128 

•S 3217 AMDT 3739 

1 (C) a recommendation regarding the na2 ture and the extent of actions to be taken under 

3 this title regarding the financial company; 

4 (D) an evaluation of the likelihood of a pri5 vate sector alternative to prevent the default of 

6 the financial company; 

7 (E) an evaluation of why a case under the 

8 Bankruptcy Code is not appropriate for the fi9 nancial company; and 

10 (F) an evaluation of the effects on credi11 tors, counterparties, and shareholders of the fi12 nancial company and other market participants. 

13 (b) DETERMINATION BY THE SECRETARY.—Notwith14 standing any other provision of Federal or State law, the 

15 Secretary shall take action in accordance with section 

16 202(b)(1)(A), if, upon the written recommendation under 

17 subsection (a), the Secretary (in consultation with the 

18 President) determines that— 

19 (1) the financial company is in default or in 

20 danger of default; 

21 (2) the failure of the financial company and its 

22 resolution under otherwise applicable Federal or 

23 State law would have serious adverse effects on fi24 nancial stability in the United States; 


sroberts on DSKH9S0YB1PROD with BILLS
129 

•S 3217 AMDT 3739 

1 (3) no viable private sector alternative is avail2 able to prevent the default of the financial company; 

3 (4) any effect on the claims or interests of 

4 creditors, counterparties, and shareholders of the fi5 nancial company and other market participants as a 

6 result of actions to be taken under this title is ap7 propriate, given the impact that any action taken 

8 under this title would have on financial stability in 

9 the United States; 

10 (5) any action under section 204 would avoid or 

11 mitigate such adverse effects, taking into consider12 ation the effectiveness of the action in mitigating po13 tential adverse effects on the financial system, the 

14 cost to the general fund of the Treasury, and the po15 tential to increase excessive risk taking on the part 

16 of creditors, counterparties, and shareholders in the 

17 financial company; and 

18 (6) a Federal regulatory agency has ordered the 

19 financial company to convert all of its convertible 

20 debt instruments that are subject to the regulatory 

21 order. 

22 (c) DOCUMENTATION AND REVIEW.— 

23 (1) IN GENERAL.—The Secretary shall— 

24 (A) document any determination under 

25 subsection (b); 


sroberts on DSKH9S0YB1PROD with BILLS
130 

•S 3217 AMDT 3739 

1 (B) retain the documentation for review 

2 under paragraph (2); and 

3 (C) notify the covered financial company 

4 and the Corporation of such determination. 

5 (2) REPORT TO CONGRESS.—Not later than 24 

6 hours after the date of appointment of the Corpora7 tion as receiver for a covered financial company, the 

8 Secretary shall provide written notice of the rec9 ommendations and determinations reached in ac10 cordance with subsections (a) and (b) to the Major11 ity Leader and the Minority Leader of the Senate 

12 and the Speaker and the Minority Leader of the 

13 House of Representatives, the Committee on Bank14 ing, Housing, and Urban Affairs of the Senate, and 

15 the Committee on Financial Services of the House of 

16 Representatives, which shall consist of a summary of 

17 the basis for the determination, including, to the ex18 tent available at the time of the determination— 

19 (A) the size and financial condition of the 

20 covered financial company; 

21 (B) the sources of capital and credit sup22 port that were available to the covered financial 

23 company; 


sroberts on DSKH9S0YB1PROD with BILLS
131 

•S 3217 AMDT 3739 

1 (C) the operations of the covered financial 

2 company that could have had a significant im3 pact on financial stability, markets, or both; 

4 (D) identification of the banks and finan5 cial companies which may be able to provide the 

6 services offered by the covered financial com7 pany; 

8 (E) any potential international ramifica9 tions of resolution of the covered financial com10 pany under other applicable insolvency law; 

11 (F) an estimate of the potential effect of 

12 the resolution of the covered financial company 

13 under other applicable insolvency law on the fi14 nancial stability of the United States; 

15 (G) the potential effect of the appointment 

16 of a receiver by the Secretary on consumers; 

17 (H) the potential effect of the appointment 

18 of a receiver by the Secretary on the financial 

19 system, financial markets, and banks and other 

20 financial companies; and 

21 (I) whether resolution of the covered finan22 cial company under other applicable insolvency 

23 law would cause banks or other financial com24 panies to experience severe liquidity distress. 


sroberts on DSKH9S0YB1PROD with BILLS
132 

•S 3217 AMDT 3739 

1 (3) REPORTS TO CONGRESS AND THE PUB2 LIC.— 

3 (A) IN GENERAL.—Not later than 60 days 

4 after the date of appointment of the Corpora5 tion as receiver for a covered financial company, 

6 the Corporation, as receiver, shall— 

7 (i) prepare reports setting forth infor8 mation on the assets and liabilities of the 

9 covered financial company as of the date of 

10 the appointment; 

11 (ii) file such reports with the Com12 mittee on Banking, Housing, and Urban 

13 Affairs of the Senate, and the Committee 

14 on Financial Services of the House of Rep15 resentatives; and 

16 (iii) publish such reports on an online 

17 website maintained by the Corporation. 

18 (B) AMENDMENTS.—The Corporation 

19 shall, on a timely basis, not less frequently than 

20 quarterly, amend or revise and resubmit the re21 ports prepared under this paragraph, as nec22 essary. 

23 (4) DEFAULT OR IN DANGER OF DEFAULT.— 

24 For purposes of this title, a financial company shall 

25 be considered to be in default or in danger of default 


sroberts on DSKH9S0YB1PROD with BILLS
133 

•S 3217 AMDT 3739 

1 if, as determined in accordance with subsection 

2 (b)— 

3 (A) a case has been, or likely will promptly 

4 be, commenced with respect to the financial 

5 company under the Bankruptcy Code; 

6 (B) the financial company has incurred, or 

7 is likely to incur, losses that will deplete all or 

8 substantially all of its capital, and there is no 

9 reasonable prospect for the company to avoid 

10 such depletion; 

11 (C) the assets of the financial company 

12 are, or are likely to be, less than its obligations 

13 to creditors and others; or 

14 (D) the financial company is, or is likely to 

15 be, unable to pay its obligations (other than 

16 those subject to a bona fide dispute) in the nor17 mal course of business. 

18 (5) GAO REVIEW.—The Comptroller General of 

19 the United States shall review and report to Con20 gress on any determination under subsection (b), 

21 that results in the appointment of the Corporation 

22 as receiver, including— 

23 (A) the basis for the determination; 

24 (B) the purpose for which any action was 

25 taken pursuant thereto; 


sroberts on DSKH9S0YB1PROD with BILLS
134 

•S 3217 AMDT 3739 

1 (C) the likely effect of the determination 

2 and such action on the incentives and conduct 

3 of financial companies and their creditors, 

4 counterparties, and shareholders; and 

5 (D) the likely disruptive effect of the deter6 mination and such action on the reasonable ex7 pectations of creditors, counterparties, and 

8 shareholders, taking into account the impact 

9 any action under this title would have on finan10 cial stability in the United States, including 

11 whether the rights of such parties will be dis12 rupted. 

13 (d) CORPORATION POLICIES AND PROCEDURES.—As 

14 soon as is practicable after the date of enactment of this 

15 Act, the Corporation shall establish policies and proce16 dures that are acceptable to the Secretary governing the 

17 use of funds available to the Corporation to carry out this 

18 title, including the terms and conditions for the provision 

19 and use of funds under sections 204(d), 210(h)(2)(G)(iv), 

20 and 210(h)(9). 

21 (e) TREATMENT OF INSURANCE COMPANIES AND IN22 SURANCE COMPANY SUBSIDIARIES.— 

23 (1) IN GENERAL.—Notwithstanding subsection 

24 (b), if an insurance company is a covered financial 

25 company or a subsidiary or affiliate of a covered fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00134 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
135 

•S 3217 AMDT 3739 

1 nancial company, the liquidation or rehabilitation of 

2 such insurance company, and any subsidiary or affil3 iate of such company that is not excepted under 

4 paragraph (2), shall be conducted as provided under 

5 such State law. 

6 (2) EXCEPTION FOR SUBSIDIARIES AND AFFILI7 ATES.—The requirement of paragraph (1) shall not 

8 apply with respect to any subsidiary or affiliate of 

9 an insurance company that is not itself an insurance 

10 company. 

11 (3) BACKUP AUTHORITY.—Notwithstanding 

12 paragraph (1), with respect to a covered financial 

13 company described in paragraph (1), if, after the 

14 end of the 60-day period beginning on the date on 

15 which a determination is made under section 202(b) 

16 with respect to such company, the appropriate regu17 latory agency has not filed the appropriate judicial 

18 action in the appropriate State court to place such 

19 company into orderly liquidation under the laws and 

20 requirements of the State, the Corporation shall 

21 have the authority to stand in the place of the ap22 propriate regulatory agency and file the appropriate 

23 judicial action in the appropriate State court to 

24 place such company into orderly liquidation under 

25 the laws and requirements of the State. 


sroberts on DSKH9S0YB1PROD with BILLS
136 

•S 3217 AMDT 3739 

1 SEC. 204. ORDERLY LIQUIDATION. 

2 (a) PURPOSE OF ORDERLY LIQUIDATION AUTHOR3 ITY.—It is the purpose of this title to provide the nec4 essary authority to liquidate failing financial companies 

5 that pose a significant risk to the financial stability of the 

6 United States in a manner that mitigates such risk and 

7 minimizes moral hazard. The authority provided in this 

8 title shall be exercised in the manner that best fulfills such 

9 purpose, with the strong presumption that— 

10 (1) creditors and shareholders will bear the 

11 losses of the financial company; 

12 (2) management responsible for the condition of 

13 the financial company will not be retained; and 

14 (3) the Corporation and other appropriate 

15 agencies will take all steps necessary and appro16 priate to assure that all parties, including manage17 ment and third parties, having responsibility for the 

18 condition of the financial company bear losses con19 sistent with their responsibility, including actions for 

20 damages, restitution, and recoupment of compensa21 tion and other gains not compatible with such re22 sponsibility. 

23 (b) CORPORATION AS RECEIVER.—Upon the appoint24 ment of the Corporation under section 202, the Corpora25 tion shall act as the receiver for the covered financial comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00136 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
137 

•S 3217 AMDT 3739 

1 pany, with all of the rights and obligations set forth in 

2 this title. 

3 (c) CONSULTATION.—The Corporation, as receiver— 

4 (1) shall consult with the primary financial reg5 ulatory agency or agencies of the covered financial 

6 company and its covered subsidiaries for purposes of 

7 ensuring an orderly liquidation of the covered finan8 cial company; 

9 (2) may consult with, or under subsection 

10 (a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the 

11 services of, any outside experts, as appropriate to in12 form and aid the Corporation in the orderly liquida13 tion process; 

14 (3) shall consult with the primary financial reg15 ulatory agency or agencies of any subsidiaries of the 

16 covered financial company that are not covered sub17 sidiaries, and coordinate with such regulators re18 garding the treatment of such solvent subsidiaries 

19 and the separate resolution of any such insolvent 

20 subsidiaries under other governmental authority, as 

21 appropriate; and 

22 (4) shall consult with the Commission and the 

23 Securities Investor Protection Corporation in the 

24 case of any covered financial company for which the 

25 Corporation has been appointed as receiver that is a 


sroberts on DSKH9S0YB1PROD with BILLS
138 

•S 3217 AMDT 3739 

1 broker or dealer registered with the Commission 

2 under section 15(b) of the Securities Exchange Act 

3 of 1934 (15 U.S.C. 78o(b)) and is a member of the 

4 Securities Investor Protection Corporation, for the 

5 purpose of determining whether to transfer to a 

6 bridge financial company organized by the Corpora7 tion as receiver, without consent of any customer, 

8 customer accounts of the covered financial company. 

9 (d) FUNDING FOR ORDERLY LIQUIDATION.—Upon 

10 its appointment as receiver for a covered financial com11 pany, and thereafter as the Corporation may, in its discre12 tion, determine to be necessary or appropriate, the Cor13 poration may make available to the receivership, subject 

14 to the conditions set forth in section 206 and subject to 

15 the plan described in section 210(n)(13), funds for the or16 derly liquidation of the covered financial company. 

17 SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS 

18 AND DEALERS. 

19 (a) APPOINTMENT OF SIPC AS TRUSTEE FOR PRO20 TECTION OF CUSTOMER SECURITIES AND PROPERTY.— 

21 Upon the appointment of the Corporation as receiver for 

22 any covered broker or dealer, the Corporation shall ap23 point, without any need for court approval, the Securities 

24 Investor Protection Corporation to act as trustee for liq25 uidation under the Securities Investor Protection Act of 


sroberts on DSKH9S0YB1PROD with BILLS
139 

•S 3217 AMDT 3739 

1 1970 (15 U.S.C. 78aaa et seq.) of the covered broker or 

2 dealer. 

3 (b) POWERS AND DUTIES OF SIPC.— 

4 (1) IN GENERAL.—Except as provided in this 

5 section, upon its appointment as trustee for the liq6 uidation of a covered broker or dealer, SIPC shall 

7 have all of the powers and duties provided by the Se8 curities Investor Protection Act of 1970 (15 U.S.C. 

9 78aaa et seq.), including, without limitation, all 

10 rights of action against third parties, but shall have 

11 no powers or duties with respect to assets and liabil12 ities transferred by the Corporation from the covered 

13 broker or dealer to any bridge financial company es14 tablished in accordance with this title. 

15 (2) LIMITATION OF POWERS.—The exercise by 

16 SIPC of powers and functions as trustee under sub17 section (a) shall not impair or impede the exercise 

18 of the powers and duties of the Corporation with re19 gard to— 

20 (A) any action, except as otherwise pro21 vided in this title— 

22 (i) to make funds available under sec23 tion 204(d); 

24 (ii) to organize, establish, operate, or 

25 terminate any bridge financial company; 


sroberts on DSKH9S0YB1PROD with BILLS
140 

•S 3217 AMDT 3739 

1 (iii) to transfer assets and liabilities; 

2 (iv) to enforce or repudiate contracts; 

3 or 

4 (v) to take any other action relating 

5 to such bridge financial company under 

6 section 210; or 

7 (B) determining claims under subsection 

8 (d). 

9 (3) QUALIFIED FINANCIAL CONTRACTS.—Not10 withstanding any provision of the Securities Investor 

11 Protection Act of 1970 to the contrary (including 

12 section 5(b)(2)(C) of that Act (15 U.S.C. 

13 78eee(b)(2)(C))), the rights and obligations of any 

14 party to a qualified financial contract (as that term 

15 is defined in section 210(c)(8)) to which a covered 

16 broker or dealer described in subsection (a) is a 

17 party shall be governed exclusively by section 210, 

18 including the limitations and restrictions contained 

19 in section 210(c)(10)(B). 

20 (c) LIMITATION ON COURT ACTION.—Except as oth21 erwise provided in this title, no court may take any action, 

22 including any action pursuant to the Securities Investor 

23 Protection Act of 1970 or the Bankruptcy Code, to re24 strain or affect the exercise of powers or functions of the 

25 Corporation as receiver for a covered broker or dealer and 


sroberts on DSKH9S0YB1PROD with BILLS
141 

•S 3217 AMDT 3739 

1 any claims against the Corporation as such receiver shall 

2 be determined in accordance with subsection (e) and such 

3 claims shall be limited to money damages. 

4 (d) ACTIONS BY CORPORATION AS RECEIVER.— 

5 (1) IN GENERAL.—Notwithstanding any other 

6 provision of this title, no action taken by the Cor7 poration, as receiver with respect to a covered broker 

8 or dealer, shall— 

9 (A) adversely affect the rights of a cus10 tomer to customer property or customer name 

11 securities; 

12 (B) diminish the amount or timely pay13 ment of net equity claims of customers; or 

14 (C) otherwise impair the recoveries pro15 vided to a customer under the Securities Inves16 tor Protection Act of 1970 (15 U.S.C. 78aaa et 

17 seq.). 

18 (2) NET PROCEEDS.—The net proceeds from 

19 any transfer, sale, or disposition of assets by the 

20 Corporation as receiver for the covered broker or 

21 dealer shall be for the benefit of the estate of the 

22 covered broker or dealer, as provided in this title. 

23 (e) CLAIMS AGAINST THE CORPORATION AS RE24 CEIVER.—Any claim against the Corporation as receiver 

25 for a covered broker or dealer for assets transferred to 


sroberts on DSKH9S0YB1PROD with BILLS
142 

•S 3217 AMDT 3739 

1 a bridge financial company established with respect to 

2 such covered broker or dealer— 

3 (1) shall be determined in accordance with sec4 tion 210(a)(2); and 

5 (2) may be reviewed by the appropriate district 

6 or territorial court of the United States in accord7 ance with section 210(a)(5). 

8 (f) SATISFACTION OF CUSTOMER CLAIMS.— 

9 (1) OBLIGATIONS TO CUSTOMERS.—Notwith10 standing any other provision of this title, all obliga11 tions of a covered broker or dealer or of any bridge 

12 financial company established with respect to such 

13 covered broker or dealer to a customer relating to, 

14 or net equity claims based upon, customer property 

15 shall be promptly discharged by the delivery of secu16 rities or the making of payments to or for the ac17 count of such customer, in a manner and in an 

18 amount at least as beneficial to the customer as 

19 would have been the case had the covered broker or 

20 dealer been subject to a proceeding under the Secu21 rities Investor Protection Act of 1970 (15 U.S.C. 

22 78aaa et seq.) without the appointment of the Cor23 poration as receiver, and with a filing date as of the 

24 date on which the Corporation is appointed as re25 ceiver. 


sroberts on DSKH9S0YB1PROD with BILLS
143 

•S 3217 AMDT 3739 

1 (2) SATISFACTION OF CLAIMS BY SIPC.—SIPC, 

2 as trustee for a covered broker or dealer, shall sat3 isfy customer claims in the manner and amount pro4 vided under the Securities Investor Protection Act of 

5 1970 (15 U.S.C. 78aaa et seq.), as if the appoint6 ment of the Corporation as receiver had not oc7 curred, and with a filing date as of the date on 

8 which the Corporation is appointed as receiver. The 

9 Corporation shall satisfy customer claims, to the ex10 tent that a customer would have received more secu11 rities or cash with respect to the allocation of cus12 tomer property had the covered financial company 

13 been subject to a proceeding under the Securities In14 vestor Protection Act (15 U.S.C. 78aaa et seq.) 

15 without the appointment of the Corporation as re16 ceiver, and with a filing date as of the date on which 

17 the Corporation is appointed as receiver. 

18 (g) PRIORITIES.— 

19 (1) CUSTOMER PROPERTY.—As trustee for a 

20 covered broker or dealer, SIPC shall allocate cus21 tomer property and deliver customer name securities 

22 in accordance with section 8(c) of the Securities In23 vestor Protection Act of 1970 (15 U.S.C. 78fff– 

24 2(c)). 


sroberts on DSKH9S0YB1PROD with BILLS
144 

•S 3217 AMDT 3739 

1 (2) OTHER CLAIMS.—All claims other than 

2 those described in paragraph (1) (including any un3 paid claim by a customer for the allowed net equity 

4 claim of such customer from customer property) 

5 shall be paid in accordance with the priorities in sec6 tion 210(b). 

7 (h) RULEMAKING.—The Commission and the Cor8 poration, after consultation with SIPC, shall jointly issue 

9 rules to implement this section. 

10 SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL 

11 ORDERLY LIQUIDATION ACTIONS. 

12 In taking action under this title, the Corporation 

13 shall— 

14 (1) determine that such action is necessary for 

15 purposes of the financial stability of the United 

16 States, and not for the purpose of preserving the 

17 covered financial company; 

18 (2) ensure that the shareholders of a covered fi19 nancial company do not receive payment until after 

20 all other claims and the Fund are fully paid; 

21 (3) ensure that unsecured creditors bear losses 

22 in accordance with the priority of claim provisions in 

23 section 210; 

24 (4) ensure that management responsible for the 

25 failed condition of the covered financial company is 


sroberts on DSKH9S0YB1PROD with BILLS
145 

•S 3217 AMDT 3739 

1 removed (if such management has not already been 

2 removed at the time at which the Corporation is ap3 pointed receiver); and 

4 (5) not take an equity interest in or become a 

5 shareholder of any covered financial company or any 

6 covered subsidiary. 

7 SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN 

8 APPOINTMENT OF RECEIVER. 

9 The members of the board of directors (or body per10 forming similar functions) of a covered financial company 

11 shall not be liable to the shareholders or creditors thereof 

12 for acquiescing in or consenting in good faith to the ap13 pointment of the Corporation as receiver for the covered 

14 financial company under section 203. 

15 SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS. 

16 (a) IN GENERAL.—Effective as of the date of the ap17 pointment of the Corporation as receiver for the covered 

18 financial company under section 202 or the appointment 

19 of SIPC as trustee for a covered broker or dealer under 

20 section 205, as applicable, any case or proceeding com21 menced with respect to the covered financial company 

22 under the Bankruptcy Code or the Securities Investor 

23 Protection Act of 1970 shall be dismissed, upon notice to 

24 the Bankruptcy Court (with respect to a case commenced 

25 under the Bankruptcy Code), and upon notice to SIPC 


sroberts on DSKH9S0YB1PROD with BILLS
146 

•S 3217 AMDT 3739 

1 (with respect to a covered broker or dealer) and no such 

2 case or proceeding may be commenced with respect to a 

3 covered financial company at any time while the orderly 

4 liquidation is pending. 

5 (b) REVESTING OF ASSETS.—Effective as of the date 

6 of appointment of the Corporation as receiver, the assets 

7 of a covered financial company shall, to the extent they 

8 have vested in any entity other than the covered financial 

9 company as a result of any case or proceeding commenced 

10 with respect to the covered financial company under the 

11 Bankruptcy Code, the Securities Investor Protection Act 

12 of 1970, or any similar provision of State liquidation or 

13 insolvency law applicable to the covered financial company, 

14 revest in the covered financial company. 

15 (c) LIMITATION.—Notwithstanding subsections (a) 

16 and (b), any order entered or other relief granted by a 

17 bankruptcy court prior to the date of appointment of the 

18 Corporation as receiver shall continue with the same valid19 ity as if an orderly liquidation had not been commenced. 

20 SEC. 209. RULEMAKING; NON-CONFLICTING LAW. 

21 The Corporation shall, in consultation with the Coun22 cil, prescribe such rules or regulations as the Corporation 

23 considers necessary or appropriate to implement this title, 

24 including rules and regulations with respect to the rights, 

25 interests, and priorities of creditors, counterparties, secuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00146 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
147 

•S 3217 AMDT 3739 

1 rity entitlement holders, or other persons with respect to 

2 any covered financial company or any assets or other prop3 erty of or held by such covered financial company. To the 

4 extent possible, the Corporation shall seek to harmonize 

5 applicable rules and regulations promulgated under this 

6 section with the insolvency laws that would otherwise 

7 apply to a covered financial company. 

8 SEC. 210. POWERS AND DUTIES OF THE CORPORATION. 

9 (a) POWERS AND AUTHORITIES.— 

10 (1) GENERAL POWERS.— 

11 (A) SUCCESSOR TO COVERED FINANCIAL

12 COMPANY.—The Corporation shall, upon ap13 pointment as receiver for a covered financial 

14 company under this title, succeed to— 

15 (i) all rights, titles, powers, and privi16 leges of the covered financial company and 

17 its assets, and of any stockholder, member, 

18 officer, or director of such company; and 

19 (ii) title to the books, records, and as20 sets of any previous receiver or other legal 

21 custodian of such covered financial com22 pany. 

23 (B) OPERATION OF THE COVERED FINAN24 CIAL COMPANY DURING THE PERIOD OF ORVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00147 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
148 

•S 3217 AMDT 3739 

1 DERLY LIQUIDATION.—The Corporation, as re2 ceiver for a covered financial company, may— 

3 (i) take over the assets of and operate 

4 the covered financial company with all of 

5 the powers of the members or share6 holders, the directors, and the officers of 

7 the covered financial company, and con8 duct all business of the covered financial 

9 company; 

10 (ii) collect all obligations and money 

11 owed to the covered financial company; 

12 (iii) perform all functions of the cov13 ered financial company, in the name of the 

14 covered financial company; 

15 (iv) manage the assets and property 

16 of the covered financial company, con17 sistent with maximization of the value of 

18 the assets in the context of the orderly liq19 uidation; and 

20 (v) provide by contract for assistance 

21 in fulfilling any function, activity, action, 

22 or duty of the Corporation as receiver. 

23 (C) FUNCTIONS OF COVERED FINANCIAL

24 COMPANY OFFICERS, DIRECTORS, AND SHARE25 HOLDERS.— 


sroberts on DSKH9S0YB1PROD with BILLS
149 

•S 3217 AMDT 3739 

1 (i) IN GENERAL.—The Corporation 

2 may provide for the exercise of any func3 tion by any member or stockholder, direc4 tor, or officer of any covered financial com5 pany for which the Corporation has been 

6 appointed as receiver under this title. 

7 (ii) PRESUMPTION.—There shall be a 

8 strong presumption that the Corporation, 

9 as receiver for a covered financial com10 pany, will remove management responsible 

11 for the failed condition of the covered fi12 nancial company. 

13 (D) ADDITIONAL POWERS AS RECEIVER.— 

14 The Corporation shall, as receiver for a covered 

15 financial company, and subject to all legally en16 forceable and perfected security interests and 

17 all legally enforceable security entitlements in 

18 respect of assets held by the covered financial 

19 company, liquidate, and wind-up the affairs of 

20 a covered financial company, including taking 

21 steps to realize upon the assets of the covered 

22 financial company, in such manner as the Cor23 poration deems appropriate, including through 

24 the sale of assets, the transfer of assets to a 

25 bridge financial company established under subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00149 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
150 

•S 3217 AMDT 3739 

1 section (h), or the exercise of any other rights 

2 or privileges granted to the receiver under this 

3 section. 

4 (E) ADDITIONAL POWERS WITH RESPECT

5 TO FAILING SUBSIDIARIES OF A COVERED FI6 NANCIAL COMPANY.— 

7 (i) IN GENERAL.—In any case in 

8 which a receiver is appointed for a covered 

9 financial company under section 202, the 

10 Corporation may appoint itself as receiver 

11 of any subsidiary (other than an insured 

12 depository institution, any covered broker 

13 or dealer, or an insurance company) of the 

14 covered financial company that is orga15 nized under Federal law or the laws of any 

16 State, if the Corporation and the Secretary 

17 jointly determine that— 

18 (I) the subsidiary is in default or 

19 in danger of default; 

20 (II) such action would avoid or 

21 mitigate serious adverse effects on the 

22 financial stability or economic condi23 tions of the United States; and 


sroberts on DSKH9S0YB1PROD with BILLS
151 

•S 3217 AMDT 3739 

1 (III) such action would facilitate 

2 the orderly liquidation of the covered 

3 financial company. 

4 (ii) TREATMENT AS COVERED FINAN5 CIAL COMPANY.—If the Corporation is ap6 pointed as receiver of a subsidiary of a cov7 ered financial company under clause (i), 

8 the subsidiary shall thereafter be consid9 ered a covered financial company under 

10 this title, and the Corporation shall there11 after have all the powers and rights with 

12 respect to that subsidiary as it has with re13 spect to a covered financial company under 

14 this title. 

15 (F) ORGANIZATION OF BRIDGE COMPA16 NIES.—The Corporation, as receiver for a cov17 ered financial company, may organize a bridge 

18 financial company under subsection (h). 

19 (G) MERGER; TRANSFER OF ASSETS AND

20 LIABILITIES.— 

21 (i) IN GENERAL.—Subject to clauses 

22 (ii) and (iii), the Corporation, as receiver 

23 for a covered financial company, may— 

24 (I) merge the covered financial 

25 company with another company; or 


sroberts on DSKH9S0YB1PROD with BILLS
152 

•S 3217 AMDT 3739 

1 (II) transfer any asset or liability 

2 of the covered financial company (in3 cluding any assets and liabilities held 

4 by the covered financial company for 

5 security entitlement holders, any cus6 tomer property, or any assets and li7 abilities associated with any trust or 

8 custody business) without obtaining 

9 any approval, assignment, or consent 

10 with respect to such transfer. 

11 (ii) FEDERAL AGENCY APPROVAL; 

12 ANTITRUST REVIEW.—With respect to a 

13 transaction described in clause (i)(I) that 

14 requires approval by a Federal agency— 

15 (I) the transaction may not be 

16 consummated before the 5th calendar 

17 day after the date of approval by the 

18 Federal agency responsible for such 

19 approval; 

20 (II) if, in connection with any 

21 such approval, a report on competitive 

22 factors is required, the Federal agency 

23 responsible for such approval shall 

24 promptly notify the Attorney General 

25 of the United States of the proposed 


sroberts on DSKH9S0YB1PROD with BILLS
153 

•S 3217 AMDT 3739 

1 transaction, and the Attorney General 

2 shall provide the required report not 

3 later than 10 days after the date of 

4 the request; and 

5 (III) if notification under section 

6 7A of the Clayton Act is required with 

7 respect to such transaction, then the 

8 required waiting period shall end on 

9 the 15th day after the date on which 

10 the Attorney General and the Federal 

11 Trade Commission receive such notifi12 cation, unless the waiting period is 

13 terminated earlier under subsection 

14 (b)(2) of such section 7A, or is ex15 tended pursuant to subsection (e)(2) 

16 of such section 7A. 

17 (iii) SETOFF.—Subject to the other 

18 provisions of this title, any transferee of 

19 assets from a receiver, including a bridge 

20 financial company, shall be subject to such 

21 claims or rights as would prevail over the 

22 rights of such transferee in such assets 

23 under applicable noninsolvency law. 

24 (H) PAYMENT OF VALID OBLIGATIONS.— 

25 The Corporation, as receiver for a covered fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00153 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
154 

•S 3217 AMDT 3739 

1 nancial company, shall, to the extent that funds 

2 are available, pay all valid obligations of the 

3 covered financial company that are due and 

4 payable at the time of the appointment of the 

5 Corporation as receiver, in accordance with the 

6 prescriptions and limitations of this title. 

7 (I) APPLICABLE NONINSOLVENCY LAW.— 

8 Except as may otherwise be provided in this 

9 title, the applicable noninsolvency law shall be 

10 determined by the noninsolvency choice of law 

11 rules otherwise applicable to the claims, rights, 

12 titles, persons, or entities at issue. 

13 (J) SUBPOENA AUTHORITY.— 

14 (i) IN GENERAL.—The Corporation, 

15 as receiver for a covered financial com16 pany, may, for purposes of carrying out 

17 any power, authority, or duty with respect 

18 to the covered financial company (includ19 ing determining any claim against the cov20 ered financial company and determining 

21 and realizing upon any asset of any person 

22 in the course of collecting money due the 

23 covered financial company), exercise any 

24 power established under section 8(n) of the 

25 Federal Deposit Insurance Act, as if the 


sroberts on DSKH9S0YB1PROD with BILLS
155 

•S 3217 AMDT 3739 

1 Corporation were the appropriate Federal 

2 banking agency for the covered financial 

3 company, and the covered financial com4 pany were an insured depository institu5 tion. 

6 (ii) RULE OF CONSTRUCTION.—This 

7 subparagraph may not be construed as 

8 limiting any rights that the Corporation, in 

9 any capacity, might otherwise have to exer10 cise any powers described in clause (i) or 

11 under any other provision of law. 

12 (K) INCIDENTAL POWERS.—The Corpora13 tion, as receiver for a covered financial com14 pany, may exercise all powers and authorities 

15 specifically granted to receivers under this title, 

16 and such incidental powers as shall be nec17 essary to carry out such powers under this title. 

18 (L) UTILIZATION OF PRIVATE SECTOR.— 

19 In carrying out its responsibilities in the man20 agement and disposition of assets from the cov21 ered financial company, the Corporation, as re22 ceiver for a covered financial company, may uti23 lize the services of private persons, including 

24 real estate and loan portfolio asset manage25 ment, property management, auction marVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00155 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
156 

•S 3217 AMDT 3739 

1 keting, legal, and brokerage services, if such 

2 services are available in the private sector, and 

3 the Corporation determines that utilization of 

4 such services is practicable, efficient, and cost 

5 effective. 

6 (M) SHAREHOLDERS AND CREDITORS OF

7 COVERED FINANCIAL COMPANY.—Notwith8 standing any other provision of law, the Cor9 poration, as receiver for a covered financial 

10 company, shall succeed by operation of law to 

11 the rights, titles, powers, and privileges de12 scribed in subparagraph (A), and shall termi13 nate all rights and claims that the stockholders 

14 and creditors of the covered financial company 

15 may have against the assets of the covered fi16 nancial company or the Corporation arising out 

17 of their status as stockholders or creditors, ex18 cept for their right to payment, resolution, or 

19 other satisfaction of their claims, as permitted 

20 under this section. The Corporation shall en21 sure that shareholders and unsecured creditors 

22 bear losses, consistent with the priority of 

23 claims provisions under this section. 

24 (N) COORDINATION WITH FOREIGN FINAN25 CIAL AUTHORITIES.—The Corporation, as reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00156 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
157 

•S 3217 AMDT 3739 

1 ceiver for a covered financial company, shall co2 ordinate, to the maximum extent possible, with 

3 the appropriate foreign financial authorities re4 garding the orderly liquidation of any covered 

5 financial company that has assets or operations 

6 in a country other than the United States. 

7 (O) RESTRICTION ON TRANSFERS TO

8 BRIDGE FINANCIAL COMPANY.— 

9 (i) SECTION OF ACCOUNTS FOR

10 TRANSFER.—If the Corporation establishes 

11 one or more bridge financial companies 

12 with respect to a covered broker or dealer, 

13 the Corporation shall transfer to a bridge 

14 financial company, all customer accounts 

15 of the covered financial company, unless 

16 the Corporation, after consulting with the 

17 Commission and SIPC, determines that— 

18 (I) the customer accounts are 

19 likely to be promptly transferred to 

20 another covered broker or dealer; or 

21 (II) the transfer of the accounts 

22 to a bridge financial company would 

23 materially interfere with the ability of 

24 the Corporation to avoid or mitigate 

25 serious adverse effects on financial 


sroberts on DSKH9S0YB1PROD with BILLS
158 

•S 3217 AMDT 3739 

1 stability or economic conditions in the 

2 United States. 

3 (ii) TRANSFER OF PROPERTY.—SIPC, 

4 as trustee for the liquidation of the covered 

5 broker or dealer, and the Commission, 

6 shall provide any and all reasonable assist7 ance necessary to complete such transfers 

8 by the Corporation. 

9 (iii) CUSTOMER CONSENT AND COURT

10 APPROVAL NOT REQUIRED.—Neither cus11 tomer consent nor court approval shall be 

12 required to transfer any customer accounts 

13 and associated customer property to a 

14 bridge financial company in accordance 

15 with this section. 

16 (iv) NOTIFICATION OF SIPC AND

17 SHARING OF INFORMATION.—The Corpora18 tion shall identify to SIPC the customer 

19 accounts and associated customer property 

20 transferred to the bridge financial com21 pany. The Corporation and SIPC shall co22 operate in the sharing of any information 

23 necessary for each entity to discharge its 

24 obligations under this title and under the 

25 Securities Investor Protection Act of 1970 


sroberts on DSKH9S0YB1PROD with BILLS
159 

•S 3217 AMDT 3739 

1 (15 U.S.C. 78aaa et seq.) including by pro2 viding access to the books and records of 

3 the covered financial company and any 

4 bridge financial company established in ac5 cordance with this title. 

6 (2) DETERMINATION OF CLAIMS.— 

7 (A) IN GENERAL.—The Corporation, as re8 ceiver for a covered financial company, shall re9 port on claims, as set forth in section 203(c)(3). 

10 Subject to paragraph (4) of this subsection, the 

11 Corporation, as receiver for a covered financial 

12 company, shall determine claims in accordance 

13 with the requirements of this subsection and 

14 regulations prescribed under section 209. 

15 (B) NOTICE REQUIREMENTS.—The Cor16 poration, as receiver for a covered financial 

17 company, in any case involving the liquidation 

18 or winding up of the affairs of a covered finan19 cial company, shall— 

20 (i) promptly publish a notice to the 

21 creditors of the covered financial company 

22 to present their claims, together with 

23 proof, to the receiver by a date specified in 

24 the notice, which shall be not earlier than 


sroberts on DSKH9S0YB1PROD with BILLS
160 

•S 3217 AMDT 3739 

1 90 days after the date of publication of 

2 such notice; and 

3 (ii) republish such notice 1 month and 

4 2 months, respectively, after the date of 

5 publication under clause (i). 

6 (C) MAILING REQUIRED.—The Corpora7 tion as receiver shall mail a notice similar to 

8 the notice published under clause (i) or (ii) of 

9 subparagraph (B), at the time of such publica10 tion, to any creditor shown on the books and 

11 records of the covered financial company— 

12 (i) at the last address of the creditor 

13 appearing in such books; 

14 (ii) in any claim filed by the claimant; 

15 or 

16 (iii) upon discovery of the name and 

17 address of a claimant not appearing on the 

18 books and records of the covered financial 

19 company, not later than 30 days after the 

20 date of the discovery of such name and ad21 dress. 

22 (3) PROCEDURES FOR RESOLUTION OF

23 CLAIMS.— 

24 (A) DECISION PERIOD.— 


sroberts on DSKH9S0YB1PROD with BILLS
161 

•S 3217 AMDT 3739 

1 (i) IN GENERAL.—Prior to the 180th 

2 day after the date on which a claim 

3 against a covered financial company is 

4 filed with the Corporation as receiver, or 

5 such later date as may be agreed as pro6 vided in clause (ii), the Corporation shall 

7 notify the claimant whether it accepts or 

8 objects to the claim, in accordance with 

9 subparagraphs (B), (C), and (D). 

10 (ii) EXTENSION OF TIME.—By written 

11 agreement executed not later than 180 

12 days after the date on which a claim 

13 against a covered financial company is 

14 filed with the Corporation, the period de15 scribed in clause (i) may be extended by 

16 written agreement between the claimant 

17 and the Corporation. Failure to notify the 

18 claimant of any disallowance within the 

19 time period set forth in clause (i), as it 

20 may be extended by agreement under this 

21 clause, shall be deemed to be a disallow22 ance of such claim, and the claimant may 

23 file or continue an action in court, as pro24 vided in paragraph (4). 


sroberts on DSKH9S0YB1PROD with BILLS
162 

•S 3217 AMDT 3739 

1 (iii) MAILING OF NOTICE SUFFI2 CIENT.—The requirements of clause (i) 

3 shall be deemed to be satisfied if the notice 

4 of any decision with respect to any claim 

5 is mailed to the last address of the claim6 ant which appears— 

7 (I) on the books, records, or both 

8 of the covered financial company; 

9 (II) in the claim filed by the 

10 claimant; or 

11 (III) in documents submitted in 

12 proof of the claim. 

13 (iv) CONTENTS OF NOTICE OF DIS14 ALLOWANCE.—If the Corporation as re15 ceiver objects to any claim filed under 

16 clause (i), the notice to the claimant shall 

17 contain— 

18 (I) a statement of each reason 

19 for the disallowance; and 

20 (II) the procedures required to 

21 file or continue an action in court, as 

22 provided in paragraph (4). 

23 (B) ALLOWANCE OF PROVEN CLAIM.—The 

24 receiver shall allow any claim received by the 

25 receiver on or before the date specified in the 


sroberts on DSKH9S0YB1PROD with BILLS
163 

•S 3217 AMDT 3739 

1 notice under paragraph (2)(B)(i), which is 

2 proved to the satisfaction of the receiver. 

3 (C) DISALLOWANCE OF CLAIMS FILED

4 AFTER END OF FILING PERIOD.— 

5 (i) IN GENERAL.—Except as provided 

6 in clause (ii), claims filed after the date 

7 specified in the notice published under 

8 paragraph (2)(B)(i) shall be disallowed, 

9 and such disallowance shall be final. 

10 (ii) CERTAIN EXCEPTIONS.—Clause 

11 (i) shall not apply with respect to any 

12 claim filed by a claimant after the date 

13 specified in the notice published under 

14 paragraph (2)(B)(i), and such claim may 

15 be considered by the receiver under sub16 paragraph (B), if— 

17 (I) the claimant did not receive 

18 notice of the appointment of the re19 ceiver in time to file such claim before 

20 such date; and 

21 (II) such claim is filed in time to 

22 permit payment of such claim. 

23 (D) AUTHORITY TO DISALLOW CLAIMS.— 

24 (i) IN GENERAL.—The Corporation 

25 may object to any portion of any claim by 


sroberts on DSKH9S0YB1PROD with BILLS
164 

•S 3217 AMDT 3739 

1 a creditor or claim of a security, pref2 erence, setoff, or priority which is not 

3 proved to the satisfaction of the Corpora4 tion. 

5 (ii) PAYMENTS TO UNDERSECURED

6 CREDITORS.—In the case of a claim 

7 against a covered financial company that is 

8 secured by any property or other asset of 

9 such covered financial company, the re10 ceiver— 

11 (I) may treat the portion of such 

12 claim which exceeds an amount equal 

13 to the fair market value of such prop14 erty or other asset as an unsecured 

15 claim; and 

16 (II) may not make any payment 

17 with respect to such unsecured por18 tion of the claim, other than in con19 nection with the disposition of all 

20 claims of unsecured creditors of the 

21 covered financial company. 

22 (iii) EXCEPTIONS.—No provision of 

23 this paragraph shall apply with respect 

24 to— 


sroberts on DSKH9S0YB1PROD with BILLS
165 

•S 3217 AMDT 3739 

1 (I) any extension of credit from 

2 any Federal reserve bank, or the Cor3 poration, to any covered financial 

4 company; or 

5 (II) subject to clause (ii), any le6 gally enforceable and perfected secu7 rity interest in the assets of the cov8 ered financial company securing any 

9 such extension of credit. 

10 (E) LEGAL EFFECT OF FILING.— 

11 (i) STATUTE OF LIMITATIONS

12 TOLLED.—For purposes of any applicable 

13 statute of limitations, the filing of a claim 

14 with the receiver shall constitute a com15 mencement of an action. 

16 (ii) NO PREJUDICE TO OTHER AC17 TIONS.—Subject to paragraph (8), the fil18 ing of a claim with the receiver shall not 

19 prejudice any right of the claimant to con20 tinue any action which was filed before the 

21 date of appointment of the receiver for the 

22 covered financial company. 

23 (4) JUDICIAL DETERMINATION OF CLAIMS.— 

24 (A) IN GENERAL.—Subject to subpara25 graph (B), a claimant may file suit on a claim 


sroberts on DSKH9S0YB1PROD with BILLS
166 

•S 3217 AMDT 3739 

1 (or continue an action commenced before the 

2 date of appointment of the Corporation as re3 ceiver) in the district or territorial court of the 

4 United States for the district within which the 

5 principal place of business of the covered finan6 cial company is located (and such court shall 

7 have jurisdiction to hear such claim). 

8 (B) TIMING.—A claim under subparagraph 

9 (A) may be filed before the end of the 60-day 

10 period beginning on the earlier of— 

11 (i) the end of the period described in 

12 paragraph (3)(A)(i) (or, if extended by 

13 agreement of the Corporation and the 

14 claimant, the period described in para15 graph (3)(A)(ii)) with respect to any claim 

16 against a covered financial company for 

17 which the Corporation is receiver; or 

18 (ii) the date of any notice of disallow19 ance of such claim pursuant to paragraph 

20 (3)(A)(i). 

21 (C) STATUTE OF LIMITATIONS.—If any 

22 claimant fails to file suit on such claim (or to 

23 continue an action on such claim commenced 

24 before the date of appointment of the Corpora25 tion as receiver) prior to the end of the 60-day 


sroberts on DSKH9S0YB1PROD with BILLS
167 

•S 3217 AMDT 3739 

1 period described in subparagraph (B), the claim 

2 shall be deemed to be disallowed (other than 

3 any portion of such claim which was allowed by 

4 the receiver) as of the end of such period, such 

5 disallowance shall be final, and the claimant 

6 shall have no further rights or remedies with re7 spect to such claim. 

8 (5) EXPEDITED DETERMINATION OF CLAIMS.— 

9 (A) PROCEDURE REQUIRED.—The Cor10 poration shall establish a procedure for expe11 dited relief outside of the claims process estab12 lished under paragraph (3), for any claimant 

13 that alleges— 

14 (i) the existence of a legally valid and 

15 enforceable or perfected security interest in 

16 property of a covered financial company, or 

17 is an entitlement holder that has obtained 

18 control of any legally valid and enforceable 

19 security entitlement in respect of any asset 

20 held by the covered financial company for 

21 which the Corporation has been appointed 

22 receiver; and 

23 (ii) that irreparable injury will occur 

24 if the claims procedure established under 

25 paragraph (3) is followed. 


sroberts on DSKH9S0YB1PROD with BILLS
168 

•S 3217 AMDT 3739 

1 (B) DETERMINATION PERIOD.—Prior to 

2 the end of the 90-day period beginning on the 

3 date on which a claim is filed in accordance 

4 with the procedures established pursuant to 

5 subparagraph (A), the Corporation shall— 

6 (i) determine— 

7 (I) whether to allow or disallow 

8 such claim, or any portion thereof; or 

9 (II) whether such claim should be 

10 determined pursuant to the proce11 dures established pursuant to para12 graph (3); 

13 (ii) notify the claimant of the deter14 mination; and 

15 (iii) if the claim is disallowed, provide 

16 a statement of each reason for the dis17 allowance and the procedure for obtaining 

18 a judicial determination. 

19 (C) PERIOD FOR FILING OR RENEWING

20 SUIT.—Any claimant who files a request for ex21 pedited relief shall be permitted to file suit (or 

22 continue a suit filed before the date of appoint23 ment of the Corporation as receiver seeking a 

24 determination of the rights of the claimant with 


sroberts on DSKH9S0YB1PROD with BILLS
169 

•S 3217 AMDT 3739 

1 respect to such security interest (or such secu2 rity entitlement) after the earlier of— 

3 (i) the end of the 90-day period begin4 ning on the date of the filing of a request 

5 for expedited relief; or 

6 (ii) the date on which the Corporation 

7 denies the claim or a portion thereof. 

8 (D) STATUTE OF LIMITATIONS.—If an ac9 tion described in subparagraph (C) is not filed, 

10 or the motion to renew a previously filed suit is 

11 not made, before the end of the 30-day period 

12 beginning on the date on which such action or 

13 motion may be filed in accordance with sub14 paragraph (C), the claim shall be deemed to be 

15 disallowed as of the end of such period (other 

16 than any portion of such claim which was al17 lowed by the receiver), such disallowance shall 

18 be final, and the claimant shall have no further 

19 rights or remedies with respect to such claim. 

20 (E) LEGAL EFFECT OF FILING.— 

21 (i) STATUTE OF LIMITATIONS

22 TOLLED.—For purposes of any applicable 

23 statute of limitations, the filing of a claim 

24 with the receiver shall constitute a com25 mencement of an action. 


sroberts on DSKH9S0YB1PROD with BILLS
170 

•S 3217 AMDT 3739 

1 (ii) NO PREJUDICE TO OTHER AC2 TIONS.—Subject to paragraph (8), the fil3 ing of a claim with the receiver shall not 

4 prejudice any right of the claimant to con5 tinue any action which was filed before the 

6 appointment of the Corporation as receiver 

7 for the covered financial company. 

8 (6) AGREEMENTS AGAINST INTEREST OF THE

9 RECEIVER.—No agreement that tends to diminish or 

10 defeat the interest of the Corporation as receiver in 

11 any asset acquired by the receiver under this section 

12 shall be valid against the receiver, unless such agree13 ment— 

14 (A) is in writing; 

15 (B) was executed by an authorized officer 

16 or representative of the covered financial com17 pany, or confirmed in the ordinary course of 

18 business by the covered financial company; and 

19 (C) has been, since the time of its execu20 tion, an official record of the company or the 

21 party claiming under the agreement provides 

22 documentation, acceptable to the receiver, of 

23 such agreement and its authorized execution or 

24 confirmation by the covered financial company. 

25 (7) PAYMENT OF CLAIMS.— 


sroberts on DSKH9S0YB1PROD with BILLS
171 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—Subject to subpara2 graph (B), the Corporation as receiver may, in 

3 its discretion and to the extent that funds are 

4 available, pay creditor claims, in such manner 

5 and amounts as are authorized under this sec6 tion, which are— 

7 (i) allowed by the receiver; 

8 (ii) approved by the receiver pursuant 

9 to a final determination pursuant to para10 graph (3) or (5), as applicable; or 

11 (iii) determined by the final judgment 

12 of a court of competent jurisdiction. 

13 (B) LIMITATION.—A creditor shall, in no 

14 event, receive less than the amount that the 

15 creditor is entitled to receive under paragraphs 

16 (2) and (3) of subsection (d), as applicable. 

17 (C) PAYMENT OF DIVIDENDS ON

18 CLAIMS.—The Corporation as receiver may, in 

19 its sole discretion, and to the extent otherwise 

20 permitted by this section, pay dividends on 

21 proven claims at any time, and no liability shall 

22 attach to the Corporation as receiver, by reason 

23 of any such payment or for failure to pay divi24 dends to a claimant whose claim is not proved 

25 at the time of any such payment. 


sroberts on DSKH9S0YB1PROD with BILLS
172 

•S 3217 AMDT 3739 

1 (D) RULEMAKING BY THE CORPORA2 TION.—The Corporation may prescribe such 

3 rules, including definitions of terms, as the Cor4 poration deems appropriate to establish an in5 terest rate for or to make payments of post-in6 solvency interest to creditors holding proven 

7 claims against the receivership estate of a cov8 ered financial company, except that no such in9 terest shall be paid until the Corporation as re10 ceiver has satisfied the principal amount of all 

11 creditor claims. 

12 (8) SUSPENSION OF LEGAL ACTIONS.— 

13 (A) IN GENERAL.—After the appointment 

14 of the Corporation as receiver for a covered fi15 nancial company, the Corporation may request 

16 a stay in any judicial action or proceeding in 

17 which such covered financial company is or be18 comes a party, for a period of not to exceed 90 

19 days. 

20 (B) GRANT OF STAY BY ALL COURTS RE21 QUIRED.—Upon receipt of a request by the Cor22 poration pursuant to subparagraph (A), the 

23 court shall grant such stay as to all parties. 

24 (9) ADDITIONAL RIGHTS AND DUTIES.— 


sroberts on DSKH9S0YB1PROD with BILLS
173 

•S 3217 AMDT 3739 

1 (A) PRIOR FINAL ADJUDICATION.—The 

2 Corporation shall abide by any final, non-ap3 pealable judgment of any court of competent ju4 risdiction that was rendered before the appoint5 ment of the Corporation as receiver. 

6 (B) RIGHTS AND REMEDIES OF RE7 CEIVER.—In the event of any appealable judg8 ment, the Corporation as receiver shall— 

9 (i) have all the rights and remedies 

10 available to the covered financial company 

11 (before the date of appointment of the Cor12 poration as receiver under section 202) 

13 and the Corporation, including removal to 

14 Federal court and all appellate rights; and 

15 (ii) not be required to post any bond 

16 in order to pursue such remedies. 

17 (C) NO ATTACHMENT OR EXECUTION.—No 

18 attachment or execution may be issued by any 

19 court upon assets in the possession of the Cor20 poration as receiver for a covered financial com21 pany. 

22 (D) LIMITATION ON JUDICIAL REVIEW.— 

23 Except as otherwise provided in this title, no 

24 court shall have jurisdiction over— 


sroberts on DSKH9S0YB1PROD with BILLS
174 

•S 3217 AMDT 3739 

1 (i) any claim or action for payment 

2 from, or any action seeking a determina3 tion of rights with respect to, the assets of 

4 any covered financial company for which 

5 the Corporation has been appointed re6 ceiver, including any assets which the Cor7 poration may acquire from itself as such 

8 receiver; or 

9 (ii) any claim relating to any act or 

10 omission of such covered financial company 

11 or the Corporation as receiver. 

12 (E) DISPOSITION OF ASSETS.—In exer13 cising any right, power, privilege, or authority 

14 as receiver in connection with any covered fi15 nancial company for which the Corporation is 

16 acting as receiver under this section, the Cor17 poration shall, to the greatest extent prac18 ticable, conduct its operations in a manner 

19 that— 

20 (i) maximizes the net present value 

21 return from the sale or disposition of such 

22 assets; 

23 (ii) minimizes the amount of any loss 

24 realized in the resolution of cases; 


sroberts on DSKH9S0YB1PROD with BILLS
175 

•S 3217 AMDT 3739 

1 (iii) mitigates the potential for serious 

2 adverse effects to the financial system; 

3 (iv) ensures timely and adequate com4 petition and fair and consistent treatment 

5 of offerors; and 

6 (v) prohibits discrimination on the 

7 basis of race, sex, or ethnic group in the 

8 solicitation and consideration of offers. 

9 (10) STATUTE OF LIMITATIONS FOR ACTIONS

10 BROUGHT BY RECEIVER.— 

11 (A) IN GENERAL.—Notwithstanding any 

12 provision of any contract, the applicable statute 

13 of limitations with regard to any action brought 

14 by the Corporation as receiver for a covered fi15 nancial company shall be— 

16 (i) in the case of any contract claim, 

17 the longer of— 

18 (I) the 6-year period beginning 

19 on the date on which the claim ac20 crues; or 

21 (II) the period applicable under 

22 State law; and 

23 (ii) in the case of any tort claim, the 

24 longer of— 


sroberts on DSKH9S0YB1PROD with BILLS
176 

•S 3217 AMDT 3739 

1 (I) the 3-year period beginning 

2 on the date on which the claim ac3 crues; or 

4 (II) the period applicable under 

5 State law. 

6 (B) DATE ON WHICH A CLAIM ACCRUES.— 

7 For purposes of subparagraph (A), the date on 

8 which the statute of limitations begins to run 

9 on any claim described in subparagraph (A) 

10 shall be the later of— 

11 (i) the date of the appointment of the 

12 Corporation as receiver under this title; or 

13 (ii) the date on which the cause of ac14 tion accrues. 

15 (C) REVIVAL OF EXPIRED STATE CAUSES

16 OF ACTION.— 

17 (i) IN GENERAL.—In the case of any 

18 tort claim described in clause (ii) for which 

19 the applicable statute of limitations under 

20 State law has expired not more than 5 

21 years before the date of appointment of the 

22 Corporation as receiver for a covered fi23 nancial company, the Corporation may 

24 bring an action as receiver on such claim 


sroberts on DSKH9S0YB1PROD with BILLS
177 

•S 3217 AMDT 3739 

1 without regard to the expiration of the 

2 statute of limitations. 

3 (ii) CLAIMS DESCRIBED.—A tort 

4 claim referred to in clause (i) is a claim 

5 arising from fraud, intentional misconduct 

6 resulting in unjust enrichment, or inten7 tional misconduct resulting in substantial 

8 loss to the covered financial company. 

9 (11) AVOIDABLE TRANSFERS.— 

10 (A) FRAUDULENT TRANSFERS.—The Cor11 poration, as receiver for any covered financial 

12 company, may avoid a transfer of any interest 

13 of the covered financial company in property, or 

14 any obligation incurred by the covered financial 

15 company, that was made or incurred at or with16 in 2 years before the time of commencement, 

17 if— 

18 (i) the covered financial company vol19 untarily or involuntarily— 

20 (I) made such transfer or in21 curred such obligation with actual in22 tent to hinder, delay, or defraud any 

23 entity to which the covered financial 

24 company was or became, on or after 

25 the date on which such transfer was 


sroberts on DSKH9S0YB1PROD with BILLS
178 

•S 3217 AMDT 3739 

1 made or such obligation was incurred, 

2 indebted; or 

3 (II) received less than a reason4 ably equivalent value in exchange for 

5 such transferor obligation; and 

6 (ii) the covered financial company vol7 untarily or involuntarily— 

8 (I) was insolvent on the date that 

9 such transfer was made or such obli10 gation was incurred, or became insol11 vent as a result of such transfer or 

12 obligation; 

13 (II) was engaged in business or a 

14 transaction, or was about to engage in 

15 business or a transaction, for which 

16 any property remaining with the cov17 ered financial company was an unrea18 sonably small capital; 

19 (III) intended to incur, or be20 lieved that the covered financial com21 pany would incur, debts that would be 

22 beyond the ability of the covered fi23 nancial company to pay as such debts 

24 matured; or 


sroberts on DSKH9S0YB1PROD with BILLS
179 

•S 3217 AMDT 3739 

1 (IV) made such transfer to or for 

2 the benefit of an insider, or incurred 

3 such obligation to or for the benefit of 

4 an insider, under an employment con5 tract and not in the ordinary course 

6 of business. 

7 (B) PREFERENTIAL TRANSFERS.—The 

8 Corporation as receiver for any covered finan9 cial company may avoid a transfer of an inter10 est of the covered financial company in prop11 erty— 

12 (i) to or for the benefit of a creditor; 

13 (ii) for or on account of an antecedent 

14 debt that was owed by the covered finan15 cial company before the transfer was made; 

16 (iii) that was made while the covered 

17 financial company was insolvent; 

18 (iv) that was made— 

19 (I) 90 days or less before the 

20 date on which the Corporation was 

21 appointed receiver; or 

22 (II) more than 90 days, but less 

23 than 1 year before the date on which 

24 the Corporation was appointed reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00179 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
180 

•S 3217 AMDT 3739 

1 ceiver, if such creditor at the time of 

2 the transfer was an insider; and 

3 (v) that enables the creditor to receive 

4 more than the creditor would receive if— 

5 (I) the covered financial company 

6 had been liquidated under chapter 7 

7 of the Bankruptcy Code; 

8 (II) the transfer had not been 

9 made; and 

10 (III) the creditor received pay11 ment of such debt to the extent pro12 vided by the provisions of chapter 7 of 

13 the Bankruptcy Code. 

14 (C) POST-RECEIVERSHIP TRANSACTIONS.— 

15 The Corporation as receiver for any covered fi16 nancial company may avoid a transfer of prop17 erty of the receivership that occurred after the 

18 Corporation was appointed receiver that was 

19 not authorized under this title by the Corpora20 tion as receiver. 

21 (D) RIGHT OF RECOVERY.—To the extent 

22 that a transfer is avoided under subparagraph 

23 (A), (B), or (C), the Corporation may recover, 

24 for the benefit of the covered financial com25 pany, the property transferred or, if a court so 


sroberts on DSKH9S0YB1PROD with BILLS
181 

•S 3217 AMDT 3739 

1 orders, the value of such property (at the time 

2 of such transfer) from— 

3 (i) the initial transferee of such trans4 fer or the person for whose benefit such 

5 transfer was made; or 

6 (ii) any immediate or mediate trans7 feree of any such initial transferee. 

8 (E) RIGHTS OF TRANSFEREE OR OBLI9 GEE.—The Corporation may not recover under 

10 subparagraph (D)(ii) from— 

11 (i) any transferee that takes for value, 

12 including in satisfaction of or to secure a 

13 present or antecedent debt, in good faith, 

14 and without knowledge of the voidability of 

15 the transfer avoided; or 

16 (ii) any immediate or mediate good 

17 faith transferee of such transferee. 

18 (F) DEFENSES.—Subject to the other pro19 visions of this title— 

20 (i) a transferee or obligee from which 

21 the Corporation seeks to recover a transfer 

22 or to avoid an obligation under subpara23 graph (A), (B), (C), or (D) shall have the 

24 same defenses available to a transferee or 

25 obligee from which a trustee seeks to reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00181 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
182 

•S 3217 AMDT 3739 

1 cover a transfer or avoid an obligation 

2 under; and 

3 (ii) the authority of the Corporation 

4 to recover a transfer or avoid an obligation 

5 shall be subject to subsections (b) and (c) 

6 of section 546, section 547(c), and section 

7 548(c) of the Bankruptcy Code. 

8 (G) RIGHTS UNDER THIS SECTION.—The 

9 rights of the Corporation as receiver under this 

10 section shall be superior to any rights of a 

11 trustee or any other party (other than a Fed12 eral agency) under the Bankruptcy Code. 

13 (H) RULES OF CONSTRUCTION; DEFINI14 TIONS.—For purposes of— 

15 (i) subparagraphs (A) and (B)— 

16 (I) the term ‘‘insider’’ has the 

17 same meaning as in section 101(31) 

18 of the Bankruptcy Code; 

19 (II) a transfer is made when 

20 such transfer is so perfected that a 

21 bona fide purchaser from the covered 

22 financial company against whom ap23 plicable law permits such transfer to 

24 be perfected cannot acquire an inter25 est in the property transferred that is 


sroberts on DSKH9S0YB1PROD with BILLS
183 

•S 3217 AMDT 3739 

1 superior to the interest in such prop2 erty of the transferee, but if such 

3 transfer is not so perfected before the 

4 date on which the Corporation is ap5 pointed as receiver for the covered fi6 nancial company, such transfer is 

7 made immediately before the date of 

8 such appointment; and 

9 (III) the term ‘‘value’’ means 

10 property, or satisfaction or securing of 

11 a present or antecedent debt of the 

12 covered financial company, but does 

13 not include an unperformed promise 

14 to furnish support to the covered fi15 nancial company; and 

16 (ii) subparagraph (B)— 

17 (I) the covered financial company 

18 is presumed to have been insolvent on 

19 and during the 90-day period imme20 diately preceding the date of appoint21 ment of the Corporation as receiver; 

22 and 

23 (II) the term ‘‘insolvent’’ has the 

24 same meaning as in section 101(32) 

25 of the Bankruptcy Code. 


sroberts on DSKH9S0YB1PROD with BILLS
184 

•S 3217 AMDT 3739 

1 (12) SETOFF.— 

2 (A) GENERALLY.—Except as otherwise 

3 provided in this title, any right of a creditor to 

4 offset a mutual debt owed by the creditor to 

5 any covered financial company that arose before 

6 the Corporation was appointed as receiver for 

7 the covered financial company against a claim 

8 of such creditor may be asserted if enforceable 

9 under applicable noninsolvency law, except to 

10 the extent that— 

11 (i) the claim of the creditor against 

12 the covered financial company is dis13 allowed; 

14 (ii) the claim was transferred, by an 

15 entity other than the covered financial 

16 company, to the creditor— 

17 (I) after the Corporation was ap18 pointed as receiver of the covered fi19 nancial company; or 

20 (II)(aa) after the 90-day period 

21 preceding the date on which the Cor22 poration was appointed as receiver for 

23 the covered financial company; and 

24 (bb) while the covered financial 

25 company was insolvent (except for a 


sroberts on DSKH9S0YB1PROD with BILLS
185 

•S 3217 AMDT 3739 

1 setoff in connection with a qualified 

2 financial contract); or 

3 (iii) the debt owed to the covered fi4 nancial company was incurred by the cov5 ered financial company— 

6 (I) after the 90-day period pre7 ceding the date on which the Corpora8 tion was appointed as receiver for the 

9 covered financial company; 

10 (II) while the covered financial 

11 company was insolvent; and 

12 (III) for the purpose of obtaining 

13 a right of setoff against the covered 

14 financial company (except for a setoff 

15 in connection with a qualified finan16 cial contract). 

17 (B) INSUFFICIENCY.— 

18 (i) IN GENERAL.—Except with respect 

19 to a setoff in connection with a qualified fi20 nancial contract, if a creditor offsets a mu21 tual debt owed to the covered financial 

22 company against a claim of the covered fi23 nancial company on or within the 90-day 

24 period preceding the date on which the 

25 Corporation is appointed as receiver for 


sroberts on DSKH9S0YB1PROD with BILLS
186 

•S 3217 AMDT 3739 

1 the covered financial company, the Cor2 poration may recover from the creditor the 

3 amount so offset, to the extent that any in4 sufficiency on the date of such setoff is less 

5 than the insufficiency on the later of— 

6 (I) the date that is 90 days be7 fore the date on which the Corpora8 tion is appointed as receiver for the 

9 covered financial company; or 

10 (II) the first day on which there 

11 is an insufficiency during the 90-day 

12 period preceding the date on which 

13 the Corporation is appointed as re14 ceiver for the covered financial com15 pany. 

16 (ii) DEFINITION OF INSUFFI17 CIENCY.—In this subparagraph, the term 

18 ‘‘insufficiency’’ means the amount, if any, 

19 by which a claim against the covered finan20 cial company exceeds a mutual debt owed 

21 to the covered financial company by the 

22 holder of such claim. 

23 (C) INSOLVENCY.—The term ‘‘insolvent’’ 

24 has the same meaning as in section 101(32) of 

25 the Bankruptcy Code. 


sroberts on DSKH9S0YB1PROD with BILLS
187 

•S 3217 AMDT 3739 

1 (D) PRESUMPTION OF INSOLVENCY.—For 

2 purposes of this paragraph, the covered finan3 cial company is presumed to have been insol4 vent on and during the 90-day period preceding 

5 the date of appointment of the Corporation as 

6 receiver. 

7 (E) LIMITATION.—Nothing in this para8 graph (12) shall be the basis for any right of 

9 setoff where no such right exists under applica10 ble noninsolvency law. 

11 (F) PRIORITY CLAIM.—Except as other12 wise provided in this title, the Corporation as 

13 receiver for the covered financial company may 

14 sell or transfer any assets free and clear of the 

15 setoff rights of any party, except that such 

16 party shall be entitled to a claim, subordinate 

17 to the claims payable under subparagraphs (A), 

18 (B), and (C) of subsection (b)(1), but senior to 

19 all other unsecured liabilities defined in sub20 section (b)(1)(D), in an amount equal to the 

21 value of such setoff rights. 

22 (13) ATTACHMENT OF ASSETS AND OTHER IN23 JUNCTIVE RELIEF.—Subject to paragraph (14), any 

24 court of competent jurisdiction may, at the request 

25 of the Corporation as receiver for a covered financial 


sroberts on DSKH9S0YB1PROD with BILLS
188 

•S 3217 AMDT 3739 

1 company, issue an order in accordance with Rule 65 

2 of the Federal Rules of Civil Procedure, including an 

3 order placing the assets of any person designated by 

4 the Corporation under the control of the court and 

5 appointing a trustee to hold such assets. 

6 (14) STANDARDS.— 

7 (A) SHOWING.—Rule 65 of the Federal 

8 Rules of Civil Procedure shall apply with re9 spect to any proceeding under paragraph (13), 

10 without regard to the requirement that the ap11 plicant show that the injury, loss, or damage is 

12 irreparable and immediate. 

13 (B) STATE PROCEEDING.—If, in the case 

14 of any proceeding in a State court, the court 

15 determines that rules of civil procedure avail16 able under the laws of the State provide sub17 stantially similar protections of the right of the 

18 parties to due process as provided under Rule 

19 65 (as modified with respect to such proceeding 

20 by subparagraph (A)), the relief sought by the 

21 Corporation pursuant to paragraph (14) may be 

22 requested under the laws of such State. 

23 (15) TREATMENT OF CLAIMS ARISING FROM

24 BREACH OF CONTRACTS EXECUTED BY THE COR25 PORATION AS RECEIVER.—Notwithstanding any 


sroberts on DSKH9S0YB1PROD with BILLS
189 

•S 3217 AMDT 3739 

1 other provision of this title, any final and non-ap2 pealable judgment for monetary damages entered 

3 against the Corporation as receiver for a covered fi4 nancial company for the breach of an agreement exe5 cuted or approved by the Corporation after the date 

6 of its appointment shall be paid as an administrative 

7 expense of the receiver. Nothing in this paragraph 

8 shall be construed to limit the power of a receiver 

9 to exercise any rights under contract or law, includ10 ing to terminate, breach, cancel, or otherwise dis11 continue such agreement. 

12 (16) ACCOUNTING AND RECORDKEEPING RE13 QUIREMENTS.— 

14 (A) IN GENERAL.—The Corporation as re15 ceiver for a covered financial company shall, 

16 consistent with the accounting and reporting 

17 practices and procedures established by the 

18 Corporation, maintain a full accounting of each 

19 receivership or other disposition of any covered 

20 financial company. 

21 (B) ANNUAL ACCOUNTING OR REPORT.— 

22 With respect to each receivership to which the 

23 Corporation is appointed, the Corporation shall 

24 make an annual accounting or report, as approVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00189 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
190 

•S 3217 AMDT 3739 

1 priate, available to the Secretary and the Comp2 troller General of the United States. 

3 (C) AVAILABILITY OF REPORTS.—Any re4 port prepared pursuant to subparagraph (B) 

5 and section 203(c)(3) shall be made available to 

6 the public by the Corporation. 

7 (D) RECORDKEEPING REQUIREMENT.— 

8 (i) IN GENERAL.—The Corporation 

9 shall prescribe such regulations and estab10 lish such retention schedules as are nec11 essary to maintain the documents and 

12 records of the Corporation generated in ex13 ercising the authorities of this title and the 

14 records of a covered financial company for 

15 which the Corporation is appointed re16 ceiver, with due regard for— 

17 (I) the avoidance of duplicative 

18 record retention; and 

19 (II) the expected evidentiary 

20 needs of the Corporation as receiver 

21 for a covered financial company and 

22 the public regarding the records of 

23 covered financial companies. 

24 (ii) RETENTION OF RECORDS.—Un25 less otherwise required by applicable FedVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00190 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
191 

•S 3217 AMDT 3739 

1 eral law or court order, the Corporation 

2 may not, at any time, destroy any records 

3 that are subject to clause (i). 

4 (iii) RECORDS DEFINED.—As used in 

5 this subparagraph, the terms ‘‘records’’ 

6 and ‘‘records of a covered financial com7 pany’’ mean any document, book, paper, 

8 map, photograph, microfiche, microfilm, 

9 computer or electronically-created record 

10 generated or maintained by the covered fi11 nancial company in the course of and nec12 essary to its transaction of business. 

13 (b) PRIORITY OF EXPENSES AND UNSECURED

14 CLAIMS.— 

15 (1) IN GENERAL.—Unsecured claims against a 

16 covered financial company, or the Corporation as re17 ceiver for such covered financial company under this 

18 section, that are proven to the satisfaction of the re19 ceiver shall have priority in the following order: 

20 (A) Administrative expenses of the re21 ceiver. 

22 (B) Any amounts owed to the United 

23 States, unless the United States agrees or con24 sents otherwise. 


sroberts on DSKH9S0YB1PROD with BILLS
192 

•S 3217 AMDT 3739 

1 (C) Any other general or senior liability of 

2 the covered financial company (which is not a 

3 liability described under subparagraph (D) or 

4 (E)). 

5 (D) Any obligation subordinated to general 

6 creditors (which is not an obligation described 

7 under subparagraph (E)). 

8 (E) Any obligation to shareholders, mem9 bers, general partners, limited partners, or 

10 other persons, with interests in the equity of 

11 the covered financial company arising as a re12 sult of their status as shareholders, members, 

13 general partners, limited partners, or other per14 sons with interests in the equity of the covered 

15 financial company. 

16 (2) POST-RECEIVERSHIP FINANCING PRI17 ORITY.—In the event that the Corporation, as re18 ceiver for a covered financial company, is unable to 

19 obtain unsecured credit for the covered financial 

20 company from commercial sources, the Corporation 

21 as receiver may obtain credit or incur debt on the 

22 part of the covered financial company, which shall 

23 have priority over any or all administrative expenses 

24 of the receiver under paragraph (1)(A). 


sroberts on DSKH9S0YB1PROD with BILLS
193 

•S 3217 AMDT 3739 

1 (3) CLAIMS OF THE UNITED STATES.—Unse2 cured claims of the United States shall, at a min3 imum, have a higher priority than liabilities of the 

4 covered financial company that count as regulatory 

5 capital. 

6 (4) CREDITORS SIMILARLY SITUATED.—All 

7 claimants of a covered financial company that are 

8 similarly situated under paragraph (1) shall be 

9 treated in a similar manner, except that the Cor10 poration as receiver may take any action (including 

11 making payments, subject to subsection 

12 (o)(1)(E)(ii)) that does not comply with this sub13 section, if— 

14 (A) the Corporation determines that such 

15 action is necessary— 

16 (i) to maximize the value of the assets 

17 of the covered financial company; 

18 (ii) to maximize the present value re19 turn from the sale or other disposition of 

20 the assets of the covered financial com21 pany; or 

22 (iii) to minimize the amount of any 

23 loss realized upon the sale or other disposi24 tion of the assets of the covered financial 

25 company; and 


sroberts on DSKH9S0YB1PROD with BILLS
194 

•S 3217 AMDT 3739 

1 (B) all claimants that are similarly situ2 ated under paragraph (1) receive not less than 

3 the amount provided in paragraphs (2) and (3) 

4 of subsection (d). 

5 (5) SECURED CLAIMS UNAFFECTED.—This sec6 tion shall not affect secured claims or security enti7 tlements in respect of assets or property held by the 

8 covered financial company, except to the extent that 

9 the security is insufficient to satisfy the claim, and 

10 then only with regard to the difference between the 

11 claim and the amount realized from the security. 

12 (6) PRIORITY OF EXPENSES AND UNSECURED

13 CLAIMS IN THE ORDERLY LIQUIDATION OF SIPC

14 MEMBER.—Where the Corporation is appointed as 

15 receiver for a covered broker or dealer, unsecured 

16 claims against such covered broker or dealer, or the 

17 Corporation as receiver for such covered broker or 

18 dealer under this section, that are proven to the sat19 isfaction of the receiver under section 205(e), shall 

20 have the priority prescribed in paragraph (1), except 

21 that— 

22 (A) SIPC shall be entitled to recover ad23 ministrative expenses incurred in performing its 

24 responsibilities under section 205 on an equal 


sroberts on DSKH9S0YB1PROD with BILLS
195 

•S 3217 AMDT 3739 

1 basis with the Corporation, in accordance with 

2 paragraph (1)(A); 

3 (B) the Corporation shall be entitled to re4 cover any amounts paid to customers or to 

5 SIPC pursuant to section 205(f), in accordance 

6 with paragraph (1)(B); 

7 (C) SIPC shall be entitled to recover any 

8 amounts paid out of the SIPC Fund to meet its 

9 obligations under section 205 and under the Se10 curities Investor Protection Act of 1970 (15 

11 U.S.C. 78aaa et seq.), which claim shall be sub12 ordinate to the claims payable under subpara13 graphs (A) and (B) of paragraph (1), but sen14 ior to all other claims; and 

15 (D) the Corporation may, after paying any 

16 proven claims to customers under section 205 

17 and the Securities Investor Protection Act of 

18 1970 (15 U.S.C. 78aaa et seq.), and as pro19 vided above, pay dividends on other proven 

20 claims, in its discretion, and to the extent that 

21 funds are available, in accordance with the pri22 orities set forth in paragraph (1). 

23 (c) PROVISIONS RELATING TO CONTRACTS ENTERED

24 INTO BEFORE APPOINTMENT OF RECEIVER.— 


sroberts on DSKH9S0YB1PROD with BILLS
196 

•S 3217 AMDT 3739 

1 (1) AUTHORITY TO REPUDIATE CONTRACTS.— 

2 In addition to any other rights that a receiver may 

3 have, the Corporation as receiver for any covered fi4 nancial company may disaffirm or repudiate any 

5 contract or lease— 

6 (A) to which the covered financial company 

7 is a party; 

8 (B) the performance of which the Corpora9 tion as receiver, in the discretion of the Cor10 poration, determines to be burdensome; and 

11 (C) the disaffirmance or repudiation of 

12 which the Corporation as receiver determines, 

13 in the discretion of the Corporation, will pro14 mote the orderly administration of the affairs of 

15 the covered financial company. 

16 (2) TIMING OF REPUDIATION.—The Corpora17 tion, as receiver for any covered financial company, 

18 shall determine whether or not to exercise the rights 

19 of repudiation under this section within a reasonable 

20 period of time. 

21 (3) CLAIMS FOR DAMAGES FOR REPUDI22 ATION.— 

23 (A) IN GENERAL.—Except as provided in 

24 paragraphs (4), (5), and (6) and in subpara25 graphs (C), (D), and (E) of this paragraph, the 


sroberts on DSKH9S0YB1PROD with BILLS
197 

•S 3217 AMDT 3739 

1 liability of the Corporation as receiver for a cov2 ered financial company for the disaffirmance or 

3 repudiation of any contract pursuant to para4 graph (1) shall be— 

5 (i) limited to actual direct compen6 satory damages; and 

7 (ii) determined as of— 

8 (I) the date of the appointment 

9 of the Corporation as receiver; or 

10 (II) in the case of any contract 

11 or agreement referred to in paragraph 

12 (8), the date of the disaffirmance or 

13 repudiation of such contract or agree14 ment. 

15 (B) NO LIABILITY FOR OTHER DAM16 AGES.—For purposes of subparagraph (A), the 

17 term ‘‘actual direct compensatory damages’’ 

18 does not include— 

19 (i) punitive or exemplary damages; 

20 (ii) damages for lost profits or oppor21 tunity; or 

22 (iii) damages for pain and suffering. 

23 (C) MEASURE OF DAMAGES FOR REPUDI24 ATION OF QUALIFIED FINANCIAL CONTRACTS.— 

25 In the case of any qualified financial contract 


sroberts on DSKH9S0YB1PROD with BILLS
198 

•S 3217 AMDT 3739 

1 or agreement to which paragraph (8) applies, 

2 compensatory damages shall be— 

3 (i) deemed to include normal and rea4 sonable costs of cover or other reasonable 

5 measures of damages utilized in the indus6 tries for such contract and agreement 

7 claims; and 

8 (ii) paid in accordance with this para9 graph and subsection (d), except as other10 wise specifically provided in this sub11 section. 

12 (D) MEASURE OF DAMAGES FOR REPUDI13 ATION OR DISAFFIRMANCE OF DEBT OBLIGA14 TION.—In the case of any debt for borrowed 

15 money or evidenced by a security, actual direct 

16 compensatory damages shall be no less than the 

17 amount lent plus accrued interest plus any 

18 accreted original issue discount as of the date 

19 the Corporation was appointed receiver of the 

20 covered financial company and, to the extent 

21 that an allowed secured claim is secured by 

22 property the value of which is greater than the 

23 amount of such claim and any accrued interest 

24 through the date of repudiation or 


sroberts on DSKH9S0YB1PROD with BILLS
199 

•S 3217 AMDT 3739 

1 disaffirmance, such accrued interest pursuant 

2 to paragraph (1). 

3 (E) MEASURE OF DAMAGES FOR REPUDI4 ATION OR DISAFFIRMANCE OF CONTINGENT OB5 LIGATION.—In the case of any contingent obli6 gation of a covered financial company con7 sisting of any obligation under a guarantee, let8 ter of credit, loan commitment, or similar credit 

9 obligation, the Corporation may, by rule or reg10 ulation, prescribe that actual direct compen11 satory damages shall be no less than the esti12 mated value of the claim as of the date the Cor13 poration was appointed receiver of the covered 

14 financial company, as such value is measured 

15 based on the likelihood that such contingent 

16 claim would become fixed and the probable 

17 magnitude thereof. 

18 (4) LEASES UNDER WHICH THE COVERED FI19 NANCIAL COMPANY IS THE LESSEE.— 

20 (A) IN GENERAL.—If the Corporation as 

21 receiver disaffirms or repudiates a lease under 

22 which the covered financial company is the les23 see, the receiver shall not be liable for any dam24 ages (other than damages determined pursuant 


sroberts on DSKH9S0YB1PROD with BILLS
200 

•S 3217 AMDT 3739 

1 to subparagraph (B)) for the disaffirmance or 

2 repudiation of such lease. 

3 (B) PAYMENTS OF RENT.—Notwith4 standing subparagraph (A), the lessor under a 

5 lease to which subparagraph (A) would other6 wise apply shall— 

7 (i) be entitled to the contractual rent 

8 accruing before the later of the date on 

9 which— 

10 (I) the notice of disaffirmance or 

11 repudiation is mailed; or 

12 (II) the disaffirmance or repudi13 ation becomes effective, unless the les14 sor is in default or breach of the 

15 terms of the lease; 

16 (ii) have no claim for damages under 

17 any acceleration clause or other penalty 

18 provision in the lease; and 

19 (iii) have a claim for any unpaid rent, 

20 subject to all appropriate offsets and de21 fenses, due as of the date of the appoint22 ment which shall be paid in accordance 

23 with this paragraph and subsection (d). 

24 (5) LEASES UNDER WHICH THE COVERED FI25 NANCIAL COMPANY IS THE LESSOR.— 


sroberts on DSKH9S0YB1PROD with BILLS
201 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—If the Corporation as 

2 receiver for a covered financial company repudi3 ates an unexpired written lease of real property 

4 of the covered financial company under which 

5 the covered financial company is the lessor and 

6 the lessee is not, as of the date of such repudi7 ation, in default, the lessee under such lease 

8 may either— 

9 (i) treat the lease as terminated by 

10 such repudiation; or 

11 (ii) remain in possession of the lease12 hold interest for the balance of the term of 

13 the lease, unless the lessee defaults under 

14 the terms of the lease after the date of 

15 such repudiation. 

16 (B) PROVISIONS APPLICABLE TO LESSEE

17 REMAINING IN POSSESSION.—If any lessee 

18 under a lease described in subparagraph (A) re19 mains in possession of a leasehold interest pur20 suant to clause (ii) of subparagraph (A)— 

21 (i) the lessee— 

22 (I) shall continue to pay the con23 tractual rent pursuant to the terms of 

24 the lease after the date of the repudi25 ation of such lease; and 


sroberts on DSKH9S0YB1PROD with BILLS
202 

•S 3217 AMDT 3739 

1 (II) may offset against any rent 

2 payment which accrues after the date 

3 of the repudiation of the lease, any 

4 damages which accrue after such date 

5 due to the nonperformance of any ob6 ligation of the covered financial com7 pany under the lease after such date; 

8 and 

9 (ii) the Corporation as receiver shall 

10 not be liable to the lessee for any damages 

11 arising after such date as a result of the 

12 repudiation, other than the amount of any 

13 offset allowed under clause (i)(II). 

14 (6) CONTRACTS FOR THE SALE OF REAL PROP15 ERTY.— 

16 (A) IN GENERAL.—If the receiver repudi17 ates any contract (which meets the require18 ments of subsection (a)(6)) for the sale of real 

19 property, and the purchaser of such real prop20 erty under such contract is in possession and is 

21 not, as of the date of such repudiation, in de22 fault, such purchaser may either— 

23 (i) treat the contract as terminated by 

24 such repudiation; or 


sroberts on DSKH9S0YB1PROD with BILLS
203 

•S 3217 AMDT 3739 

1 (ii) remain in possession of such real 

2 property. 

3 (B) PROVISIONS APPLICABLE TO PUR4 CHASER REMAINING IN POSSESSION.—If any 

5 purchaser of real property under any contract 

6 described in subparagraph (A) remains in pos7 session of such property pursuant to clause (ii) 

8 of subparagraph (A)— 

9 (i) the purchaser— 

10 (I) shall continue to make all 

11 payments due under the contract after 

12 the date of the repudiation of the con13 tract; and 

14 (II) may offset against any such 

15 payments any damages which accrue 

16 after such date due to the non17 performance (after such date) of any 

18 obligation of the covered financial 

19 company under the contract; and 

20 (ii) the Corporation as receiver shall— 

21 (I) not be liable to the purchaser 

22 for any damages arising after such 

23 date as a result of the repudiation, 

24 other than the amount of any offset 

25 allowed under clause (i)(II); 


sroberts on DSKH9S0YB1PROD with BILLS
204 

•S 3217 AMDT 3739 

1 (II) deliver title to the purchaser 

2 in accordance with the provisions of 

3 the contract; and 

4 (III) have no obligation under 

5 the contract other than the perform6 ance required under subclause (II). 

7 (C) ASSIGNMENT AND SALE ALLOWED.— 

8 (i) IN GENERAL.—No provision of this 

9 paragraph shall be construed as limiting 

10 the right of the Corporation as receiver to 

11 assign the contract described in subpara12 graph (A) and sell the property, subject to 

13 the contract and the provisions of this 

14 paragraph. 

15 (ii) NO LIABILITY AFTER ASSIGNMENT

16 AND SALE.—If an assignment and sale de17 scribed in clause (i) is consummated, the 

18 Corporation as receiver shall have no fur19 ther liability under the contract described 

20 in subparagraph (A) or with respect to the 

21 real property which was the subject of such 

22 contract. 

23 (7) PROVISIONS APPLICABLE TO SERVICE CON24 TRACTS.— 


sroberts on DSKH9S0YB1PROD with BILLS
205 

•S 3217 AMDT 3739 

1 (A) SERVICES PERFORMED BEFORE AP2 POINTMENT.—In the case of any contract for 

3 services between any person and any covered fi4 nancial company for which the Corporation has 

5 been appointed receiver, any claim of such per6 son for services performed before the date of 

7 appointment shall be— 

8 (i) a claim to be paid in accordance 

9 with subsections (a), (b), and (d); and 

10 (ii) deemed to have arisen as of the 

11 date on which the receiver was appointed. 

12 (B) SERVICES PERFORMED AFTER AP13 POINTMENT AND PRIOR TO REPUDIATION.—If, 

14 in the case of any contract for services de15 scribed in subparagraph (A), the Corporation as 

16 receiver accepts performance by the other per17 son before making any determination to exer18 cise the right of repudiation of such contract 

19 under this section— 

20 (i) the other party shall be paid under 

21 the terms of the contract for the services 

22 performed; and 

23 (ii) the amount of such payment shall 

24 be treated as an administrative expense of 

25 the receivership. 


sroberts on DSKH9S0YB1PROD with BILLS
206 

•S 3217 AMDT 3739 

1 (C) ACCEPTANCE OF PERFORMANCE NO

2 BAR TO SUBSEQUENT REPUDIATION.—The ac3 ceptance by the Corporation as receiver for 

4 services referred to in subparagraph (B) in con5 nection with a contract described in subpara6 graph (B) shall not affect the right of the Cor7 poration as receiver to repudiate such contract 

8 under this section at any time after such per9 formance. 

10 (8) CERTAIN QUALIFIED FINANCIAL CON11 TRACTS.— 

12 (A) RIGHTS OF PARTIES TO CONTRACTS.— 

13 Subject to subsection (a)(8) and paragraphs (9) 

14 and (10) of this subsection, and notwith15 standing any other provision of this section, any 

16 other provision of Federal law, or the law of 

17 any State, no person shall be stayed or prohib18 ited from exercising— 

19 (i) any right that such person has to 

20 cause the termination, liquidation, or accel21 eration of any qualified financial contract 

22 with a covered financial company which 

23 arises upon the date of appointment of the 

24 Corporation as receiver for such covered fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00206 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
207 

•S 3217 AMDT 3739 

1 nancial company at any time after such 

2 appointment; 

3 (ii) any right under any security 

4 agreement or arrangement or other credit 

5 enhancement related to one or more quali6 fied financial contracts described in clause 

7 (i); or 

8 (iii) any right to offset or net out any 

9 termination value, payment amount, or 

10 other transfer obligation arising under or 

11 in connection with 1 or more contracts or 

12 agreements described in clause (i), includ13 ing any master agreement for such con14 tracts or agreements. 

15 (B) APPLICABILITY OF OTHER PROVI16 SIONS.—Subsection (a)(8) shall apply in the 

17 case of any judicial action or proceeding 

18 brought against the Corporation as receiver re19 ferred to in subparagraph (A), or the subject 

20 covered financial company, by any party to a 

21 contract or agreement described in subpara22 graph (A)(i) with such covered financial com23 pany. 

24 (C) CERTAIN TRANSFERS NOT AVOID25 ABLE.— 


sroberts on DSKH9S0YB1PROD with BILLS
208 

•S 3217 AMDT 3739 

1 (i) IN GENERAL.—Notwithstanding 

2 subsection (a)(11), (a)(12), or (c)(12), sec3 tion 5242 of the Revised Statutes of the 

4 United States, or any other provision of 

5 Federal or State law relating to the avoid6 ance of preferential or fraudulent trans7 fers, the Corporation, whether acting as 

8 the Corporation or as receiver for a cov9 ered financial company, may not avoid any 

10 transfer of money or other property in con11 nection with any qualified financial con12 tract with a covered financial company. 

13 (ii) EXCEPTION FOR CERTAIN TRANS14 FERS.—Clause (i) shall not apply to any 

15 transfer of money or other property in con16 nection with any qualified financial con17 tract with a covered financial company if 

18 the transferee had actual intent to hinder, 

19 delay, or defraud such company, the credi20 tors of such company, or the Corporation 

21 as receiver appointed for such company. 

22 (D) CERTAIN CONTRACTS AND AGREE23 MENTS DEFINED.—For purposes of this sub24 section, the following definitions shall apply: 


sroberts on DSKH9S0YB1PROD with BILLS
209 

•S 3217 AMDT 3739 

1 (i) QUALIFIED FINANCIAL CON2 TRACT.—The term ‘‘qualified financial 

3 contract’’ means any securities contract, 

4 commodity contract, forward contract, re5 purchase agreement, swap agreement, and 

6 any similar agreement that the Corpora7 tion determines by regulation, resolution, 

8 or order to be a qualified financial contract 

9 for purposes of this paragraph. 

10 (ii) SECURITIES CONTRACT.—The 

11 term ‘‘securities contract’’— 

12 (I) means a contract for the pur13 chase, sale, or loan of a security, a 

14 certificate of deposit, a mortgage loan, 

15 any interest in a mortgage loan, a 

16 group or index of securities, certifi17 cates of deposit, or mortgage loans or 

18 interests therein (including any inter19 est therein or based on the value 

20 thereof), or any option on any of the 

21 foregoing, including any option to 

22 purchase or sell any such security, 

23 certificate of deposit, mortgage loan, 

24 interest, group or index, or option, 

25 and including any repurchase or reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00209 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
210 

•S 3217 AMDT 3739 

1 verse repurchase transaction on any 

2 such security, certificate of deposit, 

3 mortgage loan, interest, group or 

4 index, or option (whether or not such 

5 repurchase or reverse repurchase 

6 transaction is a ‘‘repurchase agree7 ment’’, as defined in clause (v)); 

8 (II) does not include any pur9 chase, sale, or repurchase obligation 

10 under a participation in a commercial 

11 mortgage loan unless the Corporation 

12 determines by regulation, resolution, 

13 or order to include any such agree14 ment within the meaning of such 

15 term; 

16 (III) means any option entered 

17 into on a national securities exchange 

18 relating to foreign currencies; 

19 (IV) means the guarantee (in20 cluding by novation) by or to any se21 curities clearing agency of any settle22 ment of cash, securities, certificates of 

23 deposit, mortgage loans or interests 

24 therein, group or index of securities, 

25 certificates of deposit or mortgage 


sroberts on DSKH9S0YB1PROD with BILLS
211 

•S 3217 AMDT 3739 

1 loans or interests therein (including 

2 any interest therein or based on the 

3 value thereof) or an option on any of 

4 the foregoing, including any option to 

5 purchase or sell any such security, 

6 certificate of deposit, mortgage loan, 

7 interest, group or index, or option 

8 (whether or not such settlement is in 

9 connection with any agreement or 

10 transaction referred to in subclauses 

11 (I) through (XII) (other than sub12 clause (II))); 

13 (V) means any margin loan; 

14 (VI) means any extension of 

15 credit for the clearance or settlement 

16 of securities transactions; 

17 (VII) means any loan transaction 

18 coupled with a securities collar trans19 action, any prepaid securities forward 

20 transaction, or any total return swap 

21 transaction coupled with a securities 

22 sale transaction; 

23 (VIII) means any other agree24 ment or transaction that is similar to 


sroberts on DSKH9S0YB1PROD with BILLS
212 

•S 3217 AMDT 3739 

1 any agreement or transaction referred 

2 to in this clause; 

3 (IX) means any combination of 

4 the agreements or transactions re5 ferred to in this clause; 

6 (X) means any option to enter 

7 into any agreement or transaction re8 ferred to in this clause; 

9 (XI) means a master agreement 

10 that provides for an agreement or 

11 transaction referred to in any of sub12 clauses (I) through (X), other than 

13 subclause (II), together with all sup14 plements to any such master agree15 ment, without regard to whether the 

16 master agreement provides for an 

17 agreement or transaction that is not a 

18 securities contract under this clause, 

19 except that the master agreement 

20 shall be considered to be a securities 

21 contract under this clause only with 

22 respect to each agreement or trans23 action under the master agreement 

24 that is referred to in any of subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00212 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
213 

•S 3217 AMDT 3739 

1 clauses (I) through (X), other than 

2 subclause (II); and 

3 (XII) means any security agree4 ment or arrangement or other credit 

5 enhancement related to any agree6 ment or transaction referred to in this 

7 clause, including any guarantee or re8 imbursement obligation in connection 

9 with any agreement or transaction re10 ferred to in this clause. 

11 (iii) COMMODITY CONTRACT.—The 

12 term ‘‘commodity contract’’ means— 

13 (I) with respect to a futures com14 mission merchant, a contract for the 

15 purchase or sale of a commodity for 

16 future delivery on, or subject to the 

17 rules of, a contract market or board 

18 of trade; 

19 (II) with respect to a foreign fu20 tures commission merchant, a foreign 

21 future; 

22 (III) with respect to a leverage 

23 transaction merchant, a leverage 

24 transaction; 


sroberts on DSKH9S0YB1PROD with BILLS
214 

•S 3217 AMDT 3739 

1 (IV) with respect to a clearing 

2 organization, a contract for the pur3 chase or sale of a commodity for fu4 ture delivery on, or subject to the 

5 rules of, a contract market or board 

6 of trade that is cleared by such clear7 ing organization, or commodity option 

8 traded on, or subject to the rules of, 

9 a contract market or board of trade 

10 that is cleared by such clearing orga11 nization; 

12 (V) with respect to a commodity 

13 options dealer, a commodity option; 

14 (VI) any other agreement or 

15 transaction that is similar to any 

16 agreement or transaction referred to 

17 in this clause; 

18 (VII) any combination of the 

19 agreements or transactions referred to 

20 in this clause; 

21 (VIII) any option to enter into 

22 any agreement or transaction referred 

23 to in this clause; 

24 (IX) a master agreement that 

25 provides for an agreement or transVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00214 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
215 

•S 3217 AMDT 3739 

1 action referred to in any of subclauses 

2 (I) through (VIII), together with all 

3 supplements to any such master 

4 agreement, without regard to whether 

5 the master agreement provides for an 

6 agreement or transaction that is not a 

7 commodity contract under this clause, 

8 except that the master agreement 

9 shall be considered to be a commodity 

10 contract under this clause only with 

11 respect to each agreement or trans12 action under the master agreement 

13 that is referred to in any of sub14 clauses (I) through (VIII); or 

15 (X) any security agreement or 

16 arrangement or other credit enhance17 ment related to any agreement or 

18 transaction referred to in this clause, 

19 including any guarantee or reimburse20 ment obligation in connection with 

21 any agreement or transaction referred 

22 to in this clause. 

23 (iv) FORWARD CONTRACT.—The term 

24 ‘‘forward contract’’ means— 


sroberts on DSKH9S0YB1PROD with BILLS
216 

•S 3217 AMDT 3739 

1 (I) a contract (other than a com2 modity contract) for the purchase, 

3 sale, or transfer of a commodity or 

4 any similar good, article, service, 

5 right, or interest which is presently or 

6 in the future becomes the subject of 

7 dealing in the forward contract trade, 

8 or product or byproduct thereof, with 

9 a maturity date that is more than 10 

10 days after the date on which the con11 tract is entered into, including a re12 purchase or reverse repurchase trans13 action (whether or not such repur14 chase or reverse repurchase trans15 action is a ‘‘repurchase agreement’’, 

16 as defined in clause (v)), consignment, 

17 lease, swap, hedge transaction, de18 posit, loan, option, allocated trans19 action, unallocated transaction, or any 

20 other similar agreement; 

21 (II) any combination of agree22 ments or transactions referred to in 

23 subclauses (I) and (III); 


sroberts on DSKH9S0YB1PROD with BILLS
217 

•S 3217 AMDT 3739 

1 (III) any option to enter into any 

2 agreement or transaction referred to 

3 in subclause (I) or (II); 

4 (IV) a master agreement that 

5 provides for an agreement or trans6 action referred to in subclause (I), 

7 (II), or (III), together with all supple8 ments to any such master agreement, 

9 without regard to whether the master 

10 agreement provides for an agreement 

11 or transaction that is not a forward 

12 contract under this clause, except that 

13 the master agreement shall be consid14 ered to be a forward contract under 

15 this clause only with respect to each 

16 agreement or transaction under the 

17 master agreement that is referred to 

18 in subclause (I), (II), or (III); or 

19 (V) any security agreement or ar20 rangement or other credit enhance21 ment related to any agreement or 

22 transaction referred to in subclause 

23 (I), (II), (III), or (IV), including any 

24 guarantee or reimbursement obliga25 tion in connection with any agreement 


sroberts on DSKH9S0YB1PROD with BILLS
218 

•S 3217 AMDT 3739 

1 or transaction referred to in any such 

2 subclause. 

3 (v) REPURCHASE AGREEMENT.—The 

4 term ‘‘repurchase agreement’’ (which defi5 nition also applies to a reverse repurchase 

6 agreement)— 

7 (I) means an agreement, includ8 ing related terms, which provides for 

9 the transfer of one or more certifi10 cates of deposit, mortgage related se11 curities (as such term is defined in 

12 section 3 of the Securities Exchange 

13 Act of 1934), mortgage loans, inter14 ests in mortgage-related securities or 

15 mortgage loans, eligible bankers’ ac16 ceptances, qualified foreign govern17 ment securities (which, for purposes 

18 of this clause, means a security that is 

19 a direct obligation of, or that is fully 

20 guaranteed by, the central government 

21 of a member of the Organization for 

22 Economic Cooperation and Develop23 ment, as determined by regulation or 

24 order adopted by the Board of Gov25 ernors), or securities that are direct 


sroberts on DSKH9S0YB1PROD with BILLS
219 

•S 3217 AMDT 3739 

1 obligations of, or that are fully guar2 anteed by, the United States or any 

3 agency of the United States against 

4 the transfer of funds by the transferee 

5 of such certificates of deposit, eligible 

6 bankers’ acceptances, securities, mort7 gage loans, or interests with a simul8 taneous agreement by such transferee 

9 to transfer to the transferor thereof 

10 certificates of deposit, eligible bank11 ers’ acceptances, securities, mortgage 

12 loans, or interests as described above, 

13 at a date certain not later than 1 year 

14 after such transfers or on demand, 

15 against the transfer of funds, or any 

16 other similar agreement; 

17 (II) does not include any repur18 chase obligation under a participation 

19 in a commercial mortgage loan, unless 

20 the Corporation determines, by regu21 lation, resolution, or order to include 

22 any such participation within the 

23 meaning of such term; 


sroberts on DSKH9S0YB1PROD with BILLS
220 

•S 3217 AMDT 3739 

1 (III) means any combination of 

2 agreements or transactions referred to 

3 in subclauses (I) and (IV); 

4 (IV) means any option to enter 

5 into any agreement or transaction re6 ferred to in subclause (I) or (III); 

7 (V) means a master agreement 

8 that provides for an agreement or 

9 transaction referred to in subclause 

10 (I), (III), or (IV), together with all 

11 supplements to any such master 

12 agreement, without regard to whether 

13 the master agreement provides for an 

14 agreement or transaction that is not a 

15 repurchase agreement under this 

16 clause, except that the master agree17 ment shall be considered to be a re18 purchase agreement under this sub19 clause only with respect to each agree20 ment or transaction under the master 

21 agreement that is referred to in sub22 clause (I), (III), or (IV); and 

23 (VI) means any security agree24 ment or arrangement or other credit 

25 enhancement related to any agreeVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00220 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
221 

•S 3217 AMDT 3739 

1 ment or transaction referred to in 

2 subclause (I), (III), (IV), or (V), in3 cluding any guarantee or reimburse4 ment obligation in connection with 

5 any agreement or transaction referred 

6 to in any such subclause. 

7 (vi) SWAP AGREEMENT.—The term 

8 ‘‘swap agreement’’ means— 

9 (I) any agreement, including the 

10 terms and conditions incorporated by 

11 reference in any such agreement, 

12 which is an interest rate swap, option, 

13 future, or forward agreement, includ14 ing a rate floor, rate cap, rate collar, 

15 cross-currency rate swap, and basis 

16 swap; a spot, same day-tomorrow, to17 morrow-next, forward, or other for18 eign exchange, precious metals, or 

19 other commodity agreement; a cur20 rency swap, option, future, or forward 

21 agreement; an equity index or equity 

22 swap, option, future, or forward 

23 agreement; a debt index or debt swap, 

24 option, future, or forward agreement; 

25 a total return, credit spread or credit 


sroberts on DSKH9S0YB1PROD with BILLS
222 

•S 3217 AMDT 3739 

1 swap, option, future, or forward 

2 agreement; a commodity index or 

3 commodity swap, option, future, or 

4 forward agreement; weather swap, op5 tion, future, or forward agreement; an 

6 emissions swap, option, future, or for7 ward agreement; or an inflation swap, 

8 option, future, or forward agreement; 

9 (II) any agreement or transaction 

10 that is similar to any other agreement 

11 or transaction referred to in this 

12 clause and that is of a type that has 

13 been, is presently, or in the future be14 comes, the subject of recurrent deal15 ings in the swap or other derivatives 

16 markets (including terms and condi17 tions incorporated by reference in 

18 such agreement) and that is a for19 ward, swap, future, option, or spot 

20 transaction on one or more rates, cur21 rencies, commodities, equity securities 

22 or other equity instruments, debt se23 curities or other debt instruments, 

24 quantitative measures associated with 

25 an occurrence, extent of an occurVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00222 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
223 

•S 3217 AMDT 3739 

1 rence, or contingency associated with 

2 a financial, commercial, or economic 

3 consequence, or economic or financial 

4 indices or measures of economic or fi5 nancial risk or value; 

6 (III) any combination of agree7 ments or transactions referred to in 

8 this clause; 

9 (IV) any option to enter into any 

10 agreement or transaction referred to 

11 in this clause; 

12 (V) a master agreement that pro13 vides for an agreement or transaction 

14 referred to in subclause (I), (II), (III), 

15 or (IV), together with all supplements 

16 to any such master agreement, with17 out regard to whether the master 

18 agreement contains an agreement or 

19 transaction that is not a swap agree20 ment under this clause, except that 

21 the master agreement shall be consid22 ered to be a swap agreement under 

23 this clause only with respect to each 

24 agreement or transaction under the 

25 master agreement that is referred to 


sroberts on DSKH9S0YB1PROD with BILLS
224 

•S 3217 AMDT 3739 

1 in subclause (I), (II), (III), or (IV); 

2 and 

3 (VI) any security agreement or 

4 arrangement or other credit enhance5 ment related to any agreement or 

6 transaction referred to in any of 

7 clauses (I) through (V), including any 

8 guarantee or reimbursement obliga9 tion in connection with any agreement 

10 or transaction referred to in any such 

11 clause. 

12 (vii) DEFINITIONS RELATING TO DE13 FAULT.—When used in this paragraph and 

14 paragraph (10)— 

15 (I) the term ‘‘default’’ means, 

16 with respect to a covered financial 

17 company, any adjudication or other 

18 official decision by any court of com19 petent jurisdiction, or other public au20 thority pursuant to which the Cor21 poration has been appointed receiver; 

22 and 

23 (II) the term ‘‘in danger of de24 fault’’ means a covered financial com25 pany with respect to which the CorVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00224 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
225 

•S 3217 AMDT 3739 

1 poration or appropriate State author2 ity has determined that— 

3 (aa) in the opinion of the 

4 Corporation or such authority— 

5 (AA) the covered finan6 cial company is not likely to 

7 be able to pay its obligations 

8 in the normal course of busi9 ness; and 

10 (BB) there is no rea11 sonable prospect that the 

12 covered financial company 

13 will be able to pay such obli14 gations without Federal as15 sistance; or 

16 (bb) in the opinion of the 

17 Corporation or such authority— 

18 (AA) the covered finan19 cial company has incurred or 

20 is likely to incur losses that 

21 will deplete all or substan22 tially all of its capital; and 

23 (BB) there is no rea24 sonable prospect that the 


sroberts on DSKH9S0YB1PROD with BILLS
226 

•S 3217 AMDT 3739 

1 capital will be replenished 

2 without Federal assistance. 

3 (viii) TREATMENT OF MASTER AGREE4 MENT AS ONE AGREEMENT.—Any master 

5 agreement for any contract or agreement 

6 described in any of clauses (i) through (vi) 

7 (or any master agreement for such master 

8 agreement or agreements), together with 

9 all supplements to such master agreement, 

10 shall be treated as a single agreement and 

11 a single qualified financial contact. If a 

12 master agreement contains provisions re13 lating to agreements or transactions that 

14 are not themselves qualified financial con15 tracts, the master agreement shall be 

16 deemed to be a qualified financial contract 

17 only with respect to those transactions that 

18 are themselves qualified financial con19 tracts. 

20 (ix) TRANSFER.—The term ‘‘transfer’’ 

21 means every mode, direct or indirect, abso22 lute or conditional, voluntary or involun23 tary, of disposing of or parting with prop24 erty or with an interest in property, includ25 ing retention of title as a security interest 


sroberts on DSKH9S0YB1PROD with BILLS
227 

•S 3217 AMDT 3739 

1 and foreclosure of the equity of redemption 

2 of the covered financial company. 

3 (x) PERSON.—The term ‘‘person’’ in4 cludes any governmental entity in addition 

5 to any entity included in the definition of 

6 such term in section 1, title 1, United 

7 States Code. 

8 (E) CLARIFICATION.—No provision of law 

9 shall be construed as limiting the right or 

10 power of the Corporation, or authorizing any 

11 court or agency to limit or delay, in any man12 ner, the right or power of the Corporation to 

13 transfer any qualified financial contract in ac14 cordance with paragraphs (9) and (10) of this 

15 subsection or to disaffirm or repudiate any such 

16 contract in accordance with subsection (c)(1). 

17 (F) WALKAWAY CLAUSES NOT EFFEC18 TIVE.— 

19 (i) IN GENERAL.—Notwithstanding 

20 the provisions of subparagraph (A) of this 

21 paragraph and sections 403 and 404 of the 

22 Federal Deposit Insurance Corporation 

23 Improvement Act of 1991, no walkaway 

24 clause shall be enforceable in a qualified fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00227 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
228 

•S 3217 AMDT 3739 

1 nancial contract of a covered financial 

2 company in default. 

3 (ii) LIMITED SUSPENSION OF CERTAIN

4 OBLIGATIONS.—In the case of a qualified 

5 financial contract referred to in clause (i), 

6 any payment or delivery obligations other7 wise due from a party pursuant to the 

8 qualified financial contract shall be sus9 pended from the time at which the Cor10 poration is appointed as receiver until the 

11 earlier of— 

12 (I) the time at which such party 

13 receives notice that such contract has 

14 been transferred pursuant to para15 graph (10)(A); or 

16 (II) 5:00 p.m. (eastern time) on 

17 the 5th business day following the 

18 date of the appointment of the Cor19 poration as receiver. 

20 (iii) WALKAWAY CLAUSE DEFINED.— 

21 For purposes of this subparagraph, the 

22 term ‘‘walkaway clause’’ means any provi23 sion in a qualified financial contract that 

24 suspends, conditions, or extinguishes a 

25 payment obligation of a party, in whole or 


sroberts on DSKH9S0YB1PROD with BILLS
229 

•S 3217 AMDT 3739 

1 in part, or does not create a payment obli2 gation of a party that would otherwise 

3 exist, solely because of the status of such 

4 party as a nondefaulting party in connec5 tion with the insolvency of a covered finan6 cial company that is a party to the con7 tract or the appointment of or the exercise 

8 of rights or powers by the Corporation as 

9 receiver for such covered financial com10 pany, and not as a result of the exercise by 

11 a party of any right to offset, setoff, or net 

12 obligations that exist under the contract, 

13 any other contract between those parties, 

14 or applicable law. 

15 (iv) CERTAIN OBLIGATIONS TO CLEAR16 ING ORGANIZATIONS.—In the event that 

17 the Corporation has been appointed as re18 ceiver for a covered financial company 

19 which is a party to any qualified financial 

20 contract cleared by or subject to the rules 

21 of a clearing organization (as defined in 

22 subsection (c)(9)(D)), the receiver shall use 

23 its best efforts to meet all margin, collat24 eral, and settlement obligations of the cov25 ered financial company that arise under 


sroberts on DSKH9S0YB1PROD with BILLS
230 

•S 3217 AMDT 3739 

1 qualified financial contracts (other than 

2 any margin, collateral, or settlement obli3 gation that is not enforceable against the 

4 receiver under paragraph (8)(F)(i) or 

5 paragraph (10)(B)), as required by the 

6 rules of the clearing organization when 

7 due, and such obligations shall not be sus8 pended pursuant to paragraph (8)(F)(ii). 

9 Notwithstanding paragraph (8)(F)(ii) or 

10 (10)(B), if the receiver fails to satisfy any 

11 such margin, collateral, or settlement obli12 gations under the rules of the clearing or13 ganization, the clearing organization shall 

14 have the immediate right to exercise, and 

15 shall not be stayed from exercising, all of 

16 its rights and remedies under its rules and 

17 applicable law with respect to any qualified 

18 financial contract of the covered financial 

19 company, including, without limitation, the 

20 right to liquidate all positions and collat21 eral of such covered financial company 

22 under the company’s qualified financial 

23 contracts, and suspend or cease to act for 

24 such covered financial company, all in acVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00230 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
231 

•S 3217 AMDT 3739 

1 cordance with the rules of the clearing or2 ganization. 

3 (G) RECORDKEEPING.— 

4 (i) JOINT RULEMAKING.—The Federal 

5 primary financial regulatory agencies shall 

6 jointly prescribe regulations requiring that 

7 financial companies maintain such records 

8 with respect to qualified financial contracts 

9 (including market valuations) that the 

10 Federal primary financial regulatory agen11 cies determine to be necessary or appro12 priate in order to assist the Corporation as 

13 receiver for a covered financial company in 

14 being able to exercise its rights and fulfill 

15 its obligations under this paragraph or 

16 paragraph (9) or (10). 

17 (ii) TIMEFRAME.—The Federal pri18 mary financial regulatory agencies shall 

19 prescribe joint final or interim final regula20 tions not later than 24 months after the 

21 date of enactment of this Act. 

22 (iii) BACK-UP RULEMAKING AUTHOR23 ITY.—If the Federal primary financial reg24 ulatory agencies do not prescribe joint final 

25 or interim final regulations within the time 


sroberts on DSKH9S0YB1PROD with BILLS
232 

•S 3217 AMDT 3739 

1 frame in clause (ii), the Chairperson of the 

2 Council shall prescribe, in consultation 

3 with the Corporation, the regulations re4 quired by clause (i). 

5 (iv) CATEGORIZATION AND

6 TIERING.—The joint regulations prescribed 

7 under clause (i) shall, as appropriate, dif8 ferentiate among financial companies by 

9 taking into consideration their size, risk, 

10 complexity, leverage, frequency and dollar 

11 amount of qualified financial contracts, 

12 interconnectedness to the financial system, 

13 and any other factors deemed appropriate. 

14 (9) TRANSFER OF QUALIFIED FINANCIAL CON15 TRACTS.— 

16 (A) IN GENERAL.—In making any transfer 

17 of assets or liabilities of a covered financial 

18 company in default, which includes any quali19 fied financial contract, the Corporation as re20 ceiver for such covered financial company shall 

21 either— 

22 (i) transfer to one financial institu23 tion, other than a financial institution for 

24 which a conservator, receiver, trustee in 

25 bankruptcy, or other legal custodian has 


sroberts on DSKH9S0YB1PROD with BILLS
233 

•S 3217 AMDT 3739 

1 been appointed or which is otherwise the 

2 subject of a bankruptcy or insolvency pro3 ceeding— 

4 (I) all qualified financial con5 tracts between any person or any af6 filiate of such person and the covered 

7 financial company in default; 

8 (II) all claims of such person or 

9 any affiliate of such person against 

10 such covered financial company under 

11 any such contract (other than any 

12 claim which, under the terms of any 

13 such contract, is subordinated to the 

14 claims of general unsecured creditors 

15 of such company); 

16 (III) all claims of such covered fi17 nancial company against such person 

18 or any affiliate of such person under 

19 any such contract; and 

20 (IV) all property securing or any 

21 other credit enhancement for any con22 tract described in subclause (I) or any 

23 claim described in subclause (II) or 

24 (III) under any such contract; or 


sroberts on DSKH9S0YB1PROD with BILLS
234 

•S 3217 AMDT 3739 

1 (ii) transfer none of the qualified fi2 nancial contracts, claims, property or other 

3 credit enhancement referred to in clause (i) 

4 (with respect to such person and any affil5 iate of such person). 

6 (B) TRANSFER TO FOREIGN BANK, FINAN7 CIAL INSTITUTION, OR BRANCH OR AGENCY

8 THEREOF.—In transferring any qualified finan9 cial contracts and related claims and property 

10 under subparagraph (A)(i), the Corporation as 

11 receiver for the covered financial company shall 

12 not make such transfer to a foreign bank, fi13 nancial institution organized under the laws of 

14 a foreign country, or a branch or agency of a 

15 foreign bank or financial institution unless, 

16 under the law applicable to such bank, financial 

17 institution, branch or agency, to the qualified 

18 financial contracts, and to any netting contract, 

19 any security agreement or arrangement or other 

20 credit enhancement related to one or more 

21 qualified financial contracts, the contractual 

22 rights of the parties to such qualified financial 

23 contracts, netting contracts, security agree24 ments or arrangements, or other credit enVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00234 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
235 

•S 3217 AMDT 3739 

1 hancements are enforceable substantially to the 

2 same extent as permitted under this section. 

3 (C) TRANSFER OF CONTRACTS SUBJECT

4 TO THE RULES OF A CLEARING ORGANIZA5 TION.—In the event that the Corporation as re6 ceiver for a financial institution transfers any 

7 qualified financial contract and related claims, 

8 property, or credit enhancement pursuant to 

9 subparagraph (A)(i) and such contract is 

10 cleared by or subject to the rules of a clearing 

11 organization, the clearing organization shall not 

12 be required to accept the transferee as a mem13 ber by virtue of the transfer. 

14 (D) DEFINITIONS.—For purposes of this 

15 paragraph— 

16 (i) the term ‘‘financial institution’’ 

17 means a broker or dealer, a depository in18 stitution, a futures commission merchant, 

19 a bridge financial company, or any other 

20 institution determined by the Corporation, 

21 by regulation, to be a financial institution; 

22 and 

23 (ii) the term ‘‘clearing organization’’ 

24 has the same meaning as in section 402 of 


sroberts on DSKH9S0YB1PROD with BILLS
236 

•S 3217 AMDT 3739 

1 the Federal Deposit Insurance Corporation 

2 Improvement Act of 1991. 

3 (10) NOTIFICATION OF TRANSFER.— 

4 (A) IN GENERAL.— 

5 (i) NOTICE.—The Corporation shall 

6 provide notice in accordance with clause 

7 (ii), if— 

8 (I) the Corporation as receiver 

9 for a covered financial company in de10 fault or in danger of default transfers 

11 any assets or liabilities of the covered 

12 financial company; and 

13 (II) the transfer includes any 

14 qualified financial contract. 

15 (ii) TIMING.—The Corporation as re16 ceiver for a covered financial company 

17 shall notify any person who is a party to 

18 any contract described in clause (i) of such 

19 transfer not later than 5:00 p.m. (eastern 

20 time) on the 5th business day following the 

21 date of the appointment of the Corporation 

22 as receiver. 

23 (B) CERTAIN RIGHTS NOT ENFORCE24 ABLE.— 


sroberts on DSKH9S0YB1PROD with BILLS
237 

•S 3217 AMDT 3739 

1 (i) RECEIVERSHIP.—A person who is 

2 a party to a qualified financial contract 

3 with a covered financial company may not 

4 exercise any right that such person has to 

5 terminate, liquidate, or net such contract 

6 under paragraph (8)(A) solely by reason of 

7 or incidental to the appointment under this 

8 section of the Corporation as receiver for 

9 the covered financial company (or the in10 solvency or financial condition of the cov11 ered financial company for which the Cor12 poration has been appointed as receiver)— 

13 (I) until 5:00 p.m. (eastern time) 

14 on the 5th business day following the 

15 date of the appointment; or 

16 (II) after the person has received 

17 notice that the contract has been 

18 transferred pursuant to paragraph 

19 (9)(A). 

20 (ii) NOTICE.—For purposes of this 

21 paragraph, the Corporation as receiver for 

22 a covered financial company shall be 

23 deemed to have notified a person who is a 

24 party to a qualified financial contract with 

25 such covered financial company, if the CorVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00237 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
238 

•S 3217 AMDT 3739 

1 poration has taken steps reasonably cal2 culated to provide notice to such person by 

3 the time specified in subparagraph (A). 

4 (C) TREATMENT OF BRIDGE FINANCIAL

5 COMPANY.—For purposes of paragraph (9), a 

6 bridge financial company shall not be consid7 ered to be a covered financial company for 

8 which a conservator, receiver, trustee in bank9 ruptcy, or other legal custodian has been ap10 pointed, or which is otherwise the subject of a 

11 bankruptcy or insolvency proceeding. 

12 (D) BUSINESS DAY DEFINED.—For pur13 poses of this paragraph, the term ‘‘business 

14 day’’ means any day other than any Saturday, 

15 Sunday, or any day on which either the New 

16 York Stock Exchange or the Federal Reserve 

17 Bank of New York is closed. 

18 (11) DISAFFIRMANCE OR REPUDIATION OF

19 QUALIFIED FINANCIAL CONTRACTS.—In exercising 

20 the rights of disaffirmance or repudiation of the 

21 Corporation as receiver with respect to any qualified 

22 financial contract to which a covered financial com23 pany is a party, the Corporation shall either— 

24 (A) disaffirm or repudiate all qualified fi25 nancial contracts between— 


sroberts on DSKH9S0YB1PROD with BILLS
239 

•S 3217 AMDT 3739 

1 (i) any person or any affiliate of such 

2 person; and 

3 (ii) the covered financial company in 

4 default; or 

5 (B) disaffirm or repudiate none of the 

6 qualified financial contracts referred to in sub7 paragraph (A) (with respect to such person or 

8 any affiliate of such person). 

9 (12) CERTAIN SECURITY AND CUSTOMER IN10 TERESTS NOT AVOIDABLE.—No provision of this 

11 subsection shall be construed as permitting the 

12 avoidance of any— 

13 (A) legally enforceable or perfected secu14 rity interest in any of the assets of any covered 

15 financial company, except in accordance with 

16 subsection (a)(11); or 

17 (B) legally enforceable interest in customer 

18 property, security entitlements in respect of as19 sets or property held by the covered financial 

20 company for any security entitlement holder. 

21 (13) AUTHORITY TO ENFORCE CONTRACTS.— 

22 (A) IN GENERAL.—The Corporation, as re23 ceiver for a covered financial company, may en24 force any contract, other than a liability insur25 ance contract of a director or officer, a financial 


sroberts on DSKH9S0YB1PROD with BILLS
240 

•S 3217 AMDT 3739 

1 institution bond entered into by the covered fi2 nancial company, notwithstanding any provision 

3 of the contract providing for termination, de4 fault, acceleration, or exercise of rights upon, or 

5 solely by reason of, insolvency, the appointment 

6 of or the exercise of rights or powers by the 

7 Corporation as receiver, the filing of the peti8 tion pursuant to section 202(c)(1), or the 

9 issuance of the recommendations or determina10 tion, or any actions or events occurring in con11 nection therewith or as a result thereof, pursu12 ant to section 203. 

13 (B) CERTAIN RIGHTS NOT AFFECTED.— 

14 No provision of this paragraph may be con15 strued as impairing or affecting any right of the 

16 Corporation as receiver to enforce or recover 

17 under a liability insurance contract of a director 

18 or officer or financial institution bond under 

19 other applicable law. 

20 (C) CONSENT REQUIREMENT AND IPSO

21 FACTO CLAUSES.— 

22 (i) IN GENERAL.—Except as otherwise 

23 provided by this section, no person may ex24 ercise any right or power to terminate, ac25 celerate, or declare a default under any 


sroberts on DSKH9S0YB1PROD with BILLS
241 

•S 3217 AMDT 3739 

1 contract to which the covered financial 

2 company is a party (and no provision in 

3 any such contract providing for such de4 fault, termination, or acceleration shall be 

5 enforceable), or to obtain possession of or 

6 exercise control over any property of the 

7 covered financial company or affect any 

8 contractual rights of the covered financial 

9 company, without the consent of the Cor10 poration as receiver for the covered finan11 cial company during the 90 day period be12 ginning from the appointment of the Cor13 poration as receiver. 

14 (ii) EXCEPTIONS.—No provision of 

15 this subparagraph shall apply to a director 

16 or officer liability insurance contract or a 

17 financial institution bond, to the rights of 

18 parties to certain qualified financial con19 tracts pursuant to paragraph (8), or to the 

20 rights of parties to netting contracts pur21 suant to subtitle A of title IV of the Fed22 eral Deposit Insurance Corporation Im23 provement Act of 1991 (12 U.S.C. 4401 et 

24 seq.), or shall be construed as permitting 

25 the Corporation as receiver to fail to comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00241 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
242 

•S 3217 AMDT 3739 

1 ply with otherwise enforceable provisions of 

2 such contract. 

3 (D) CONTRACTS TO EXTEND CREDIT.— 

4 Notwithstanding any other provision in this 

5 title, if the Corporation as receiver enforces any 

6 contract to extend credit to the covered finan7 cial company or bridge financial company, any 

8 valid and enforceable obligation to repay such 

9 debt shall be paid by the Corporation as re10 ceiver, as an administrative expense of the re11 ceivership. 

12 (14) EXCEPTION FOR FEDERAL RESERVE

13 BANKS AND CORPORATION SECURITY INTEREST.— 

14 No provision of this subsection shall apply with re15 spect to— 

16 (A) any extension of credit from any Fed17 eral reserve bank or the Corporation to any cov18 ered financial company; or 

19 (B) any security interest in the assets of 

20 the covered financial company securing any 

21 such extension of credit. 

22 (15) SAVINGS CLAUSE.—The meanings of terms 

23 used in this subsection are applicable for purposes of 

24 this subsection only, and shall not be construed or 

25 applied so as to challenge or affect the characterizaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00242 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
243 

•S 3217 AMDT 3739 

1 tion, definition, or treatment of any similar terms 

2 under any other statute, regulation, or rule, includ3 ing the Gramm-Leach-Bliley Act, the Legal Cer4 tainty for Bank Products Act of 2000, the securities 

5 laws (as that term is defined in section 3(a)(47) of 

6 the Securities Exchange Act of 1934), and the Com7 modity Exchange Act. 

8 (16) ENFORCEMENT OF CONTRACTS GUARAN9 TEED BY THE COVERED FINANCIAL COMPANY.— 

10 (A) IN GENERAL.—The Corporation, as re11 ceiver for a covered financial company or as re12 ceiver for a subsidiary of a covered financial 

13 company (including an insured depository insti14 tution) shall have the power to enforce con15 tracts of subsidiaries or affiliates of the covered 

16 financial company, the obligations under which 

17 are guaranteed or otherwise supported by or 

18 linked to the covered financial company, not19 withstanding any contractual right to cause the 

20 termination, liquidation, or acceleration of such 

21 contracts based solely on the insolvency, finan22 cial condition, or receivership of the covered fi23 nancial company, if— 

24 (i) such guaranty or other support 

25 and all related assets and liabilities are 


sroberts on DSKH9S0YB1PROD with BILLS
244 

•S 3217 AMDT 3739 

1 transferred to and assumed by a bridge fi2 nancial company or a third party (other 

3 than a third party for which a conservator, 

4 receiver, trustee in bankruptcy, or other 

5 legal custodian has been appointed, or 

6 which is otherwise the subject of a bank7 ruptcy or insolvency proceeding) within the 

8 same period of time as the Corporation is 

9 entitled to transfer the qualified financial 

10 contracts of such covered financial com11 pany; or 

12 (ii) the Corporation, as receiver, oth13 erwise provides adequate protection with 

14 respect to such obligations. 

15 (B) RULE OF CONSTRUCTION.—For pur16 poses of this paragraph, a bridge financial com17 pany shall not be considered to be a third party 

18 for which a conservator, receiver, trustee in 

19 bankruptcy, or other legal custodian has been 

20 appointed, or which is otherwise the subject of 

21 a bankruptcy or insolvency proceeding. 

22 (d) VALUATION OF CLAIMS IN DEFAULT.— 

23 (1) IN GENERAL.—Notwithstanding any other 

24 provision of Federal law or the law of any State, and 

25 regardless of the method utilized by the Corporation 


sroberts on DSKH9S0YB1PROD with BILLS
245 

•S 3217 AMDT 3739 

1 for a covered financial company, including trans2 actions authorized under subsection (h), this sub3 section shall govern the rights of the creditors of any 

4 such covered financial company. 

5 (2) MAXIMUM LIABILITY.—The maximum li6 ability of the Corporation, acting as receiver for a 

7 covered financial company or in any other capacity, 

8 to any person having a claim against the Corpora9 tion as receiver or the covered financial company for 

10 which the Corporation is appointed shall equal the 

11 amount that such claimant would have received if— 

12 (A) the Corporation had not been ap13 pointed receiver with respect to the covered fi14 nancial company; and 

15 (B) the covered financial company had 

16 been liquidated under chapter 7 of the Bank17 ruptcy Code, or any similar provision of State 

18 insolvency law applicable to the covered finan19 cial company. 

20 (3) SPECIAL PROVISION FOR ORDERLY LIQ21 UIDATION BY SIPC.—The maximum liability of the 

22 Corporation, acting as receiver or in its corporate 

23 capacity for any covered broker or dealer to any cus24 tomer of such covered broker or dealer, with respect 

25 to customer property of such customer, shall be— 


sroberts on DSKH9S0YB1PROD with BILLS
246 

•S 3217 AMDT 3739 

1 (A) equal to the amount that such cus2 tomer would have received with respect to such 

3 customer property in a case initiated by SIPC 

4 under the Securities Investor Protection Act of 

5 1970 (15 U.S.C. 78aaa et seq.); and 

6 (B) determined as of the close of business 

7 on the date on which the Corporation is ap8 pointed as receiver. 

9 (4) ADDITIONAL PAYMENTS AUTHORIZED.— 

10 (A) IN GENERAL.—Subject to subsection 

11 (o)(1)(E)(ii), the Corporation, with the approval 

12 of the Secretary, may make additional pay13 ments or credit additional amounts to or with 

14 respect to or for the account of any claimant or 

15 category of claimants of the covered financial 

16 company, if the Corporation determines that 

17 such payments or credits are necessary or ap18 propriate to minimize losses to the Corporation 

19 as receiver from the orderly liquidation of the 

20 covered financial company under this section. 

21 (B) LIMITATION.—Notwithstanding any 

22 other provision of Federal or State law, or the 

23 constitution of any State, the Corporation shall 

24 not be obligated, as a result of having made any 

25 payment under subparagraph (A) or credited 


sroberts on DSKH9S0YB1PROD with BILLS
247 

•S 3217 AMDT 3739 

1 any amount described in subparagraph (A) to 

2 or with respect to or for the account of any 

3 claimant or category of claimants, to make pay4 ments to any other claimant or category of 

5 claimants. 

6 (C) MANNER OF PAYMENT.—The Corpora7 tion may make payments or credit amounts 

8 under subparagraph (A) directly to the claim9 ants or may make such payments or credit such 

10 amounts to a company other than a covered fi11 nancial company or a bridge financial company 

12 established with respect thereto in order to in13 duce such other company to accept liability for 

14 such claims. 

15 (e) LIMITATION ON COURT ACTION.—Except as pro16 vided in this title, no court may take any action to restrain 

17 or affect the exercise of powers or functions of the receiver 

18 hereunder, and any remedy against the Corporation or re19 ceiver shall be limited to money damages determined in 

20 accordance with this title. 

21 (f) LIABILITY OF DIRECTORS AND OFFICERS.— 

22 (1) IN GENERAL.—A director or officer of a 

23 covered financial company may be held personally 

24 liable for monetary damages in any civil action de25 scribed in paragraph (2) by, on behalf of, or at the 


sroberts on DSKH9S0YB1PROD with BILLS
248 

•S 3217 AMDT 3739 

1 request or direction of the Corporation, which action 

2 is prosecuted wholly or partially for the benefit of 

3 the Corporation— 

4 (A) acting as receiver for such covered fi5 nancial company; 

6 (B) acting based upon a suit, claim, or 

7 cause of action purchased from, assigned by, or 

8 otherwise conveyed by the Corporation as re9 ceiver; or 

10 (C) acting based upon a suit, claim, or 

11 cause of action purchased from, assigned by, or 

12 otherwise conveyed in whole or in part by a cov13 ered financial company or its affiliate in con14 nection with assistance provided under this 

15 title. 

16 (2) ACTIONS COVERED.—Paragraph (1) shall 

17 apply with respect to actions for gross negligence, 

18 including any similar conduct or conduct that dem19 onstrates a greater disregard of a duty of care (than 

20 gross negligence) including intentional tortious con21 duct, as such terms are defined and determined 

22 under applicable State law. 

23 (3) SAVINGS CLAUSE.—Nothing in this sub24 section shall impair or affect any right of the Cor25 poration under other applicable law. 


sroberts on DSKH9S0YB1PROD with BILLS
249 

•S 3217 AMDT 3739 

1 (g) DAMAGES.—In any proceeding related to any 

2 claim against a director, officer, employee, agent, attorney, 

3 accountant, or appraiser of a covered financial company, 

4 or any other party employed by or providing services to 

5 a covered financial company, recoverable damages deter6 mined to result from the improvident or otherwise im7 proper use or investment of any assets of the covered fi8 nancial company shall include principal losses and appro9 priate interest. 

10 (h) BRIDGE FINANCIAL COMPANIES.— 

11 (1) ORGANIZATION.— 

12 (A) PURPOSE.—The Corporation, as re13 ceiver for one or more covered financial compa14 nies or in anticipation of being appointed re15 ceiver for one or more covered financial compa16 nies, may organize one or more bridge financial 

17 companies in accordance with this subsection. 

18 (B) AUTHORITIES.—Upon the creation of 

19 a bridge financial company under subparagraph 

20 (A) with respect to a covered financial com21 pany, such bridge financial company may— 

22 (i) assume such liabilities (including 

23 liabilities associated with any trust or cus24 tody business, but excluding any liabilities 

25 that count as regulatory capital) of such 


sroberts on DSKH9S0YB1PROD with BILLS
250 

•S 3217 AMDT 3739 

1 covered financial company as the Corpora2 tion may, in its discretion, determine to be 

3 appropriate; 

4 (ii) purchase such assets (including 

5 assets associated with any trust or custody 

6 business) of such covered financial com7 pany as the Corporation may, in its discre8 tion, determine to be appropriate; and 

9 (iii) perform any other temporary 

10 function which the Corporation may, in its 

11 discretion, prescribe in accordance with 

12 this section. 

13 (2) CHARTER AND ESTABLISHMENT.— 

14 (A) ESTABLISHMENT.—Except as provided 

15 in subparagraph (H), where the covered finan16 cial company is a covered broker or dealer, the 

17 Corporation, as receiver for a covered financial 

18 company, may grant a Federal charter to and 

19 approve articles of association for one or more 

20 bridge financial company or companies, with re21 spect to such covered financial company which 

22 shall, by operation of law and immediately upon 

23 issuance of its charter and approval of its arti24 cles of association, be established and operate 


sroberts on DSKH9S0YB1PROD with BILLS
251 

•S 3217 AMDT 3739 

1 in accordance with, and subject to, such char2 ter, articles, and this section. 

3 (B) MANAGEMENT.—Upon its establish4 ment, a bridge financial company shall be under 

5 the management of a board of directors ap6 pointed by the Corporation. 

7 (C) ARTICLES OF ASSOCIATION.—The arti8 cles of association and organization certificate 

9 of a bridge financial company shall have such 

10 terms as the Corporation may provide, and 

11 shall be executed by such representatives as the 

12 Corporation may designate. 

13 (D) TERMS OF CHARTER; RIGHTS AND

14 PRIVILEGES.—Subject to and in accordance 

15 with the provisions of this subsection, the Cor16 poration shall— 

17 (i) establish the terms of the charter 

18 of a bridge financial company and the 

19 rights, powers, authorities, and privileges 

20 of a bridge financial company granted by 

21 the charter or as an incident thereto; and 

22 (ii) provide for, and establish the 

23 terms and conditions governing, the man24 agement (including the bylaws and the 

25 number of directors of the board of direcVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00251 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
252 

•S 3217 AMDT 3739 

1 tors) and operations of the bridge financial 

2 company. 

3 (E) TRANSFER OF RIGHTS AND PRIVI4 LEGES OF COVERED FINANCIAL COMPANY.— 

5 (i) IN GENERAL.—Notwithstanding 

6 any other provision of Federal or State 

7 law, the Corporation may provide for a 

8 bridge financial company to succeed to and 

9 assume any rights, powers, authorities, or 

10 privileges of the covered financial company 

11 with respect to which the bridge financial 

12 company was established and, upon such 

13 determination by the Corporation, the 

14 bridge financial company shall immediately 

15 and by operation of law succeed to and as16 sume such rights, powers, authorities, and 

17 privileges. 

18 (ii) EFFECTIVE WITHOUT AP19 PROVAL.—Any succession to or assumption 

20 by a bridge financial company of rights, 

21 powers, authorities, or privileges of a cov22 ered financial company under clause (i) or 

23 otherwise shall be effective without any 

24 further approval under Federal or State 


sroberts on DSKH9S0YB1PROD with BILLS
253 

•S 3217 AMDT 3739 

1 law, assignment, or consent with respect 

2 thereto. 

3 (F) CORPORATE GOVERNANCE AND ELEC4 TION AND DESIGNATION OF BODY OF LAW.—To 

5 the extent permitted by the Corporation and 

6 consistent with this section and any rules, regu7 lations, or directives issued by the Corporation 

8 under this section, a bridge financial company 

9 may elect to follow the corporate governance 

10 practices and procedures that are applicable to 

11 a corporation incorporated under the general 

12 corporation law of the State of Delaware, or the 

13 State of incorporation or organization of the 

14 covered financial company with respect to which 

15 the bridge financial company was established, 

16 as such law may be amended from time to time. 

17 (G) CAPITAL.— 

18 (i) CAPITAL NOT REQUIRED.—Not19 withstanding any other provision of Fed20 eral or State law, a bridge financial com21 pany may, if permitted by the Corporation, 

22 operate without any capital or surplus, or 

23 with such capital or surplus as the Cor24 poration may in its discretion determine to 

25 be appropriate. 


sroberts on DSKH9S0YB1PROD with BILLS
254 

•S 3217 AMDT 3739 

1 (ii) NO CONTRIBUTION BY THE COR2 PORATION REQUIRED.—The Corporation is 

3 not required to pay capital into a bridge fi4 nancial company or to issue any capital 

5 stock on behalf of a bridge financial com6 pany established under this subsection. 

7 (iii) AUTHORITY.—If the Corporation 

8 determines that such action is advisable, 

9 the Corporation may cause capital stock or 

10 other securities of a bridge financial com11 pany established with respect to a covered 

12 financial company to be issued and offered 

13 for sale in such amounts and on such 

14 terms and conditions as the Corporation 

15 may, in its discretion, determine. 

16 (iv) OPERATING FUNDS IN LIEU OF

17 CAPITAL AND IMPLEMENTATION PLAN.— 

18 Upon the organization of a bridge financial 

19 company, and thereafter as the Corpora20 tion may, in its discretion, determine to be 

21 necessary or advisable, the Corporation 

22 may make available to the bridge financial 

23 company, subject to the plan described in 

24 subsection (n)(13), funds for the operation 


sroberts on DSKH9S0YB1PROD with BILLS
255 

•S 3217 AMDT 3739 

1 of the bridge financial company in lieu of 

2 capital. 

3 (H) BRIDGE BROKERS OR DEALERS.— 

4 (i) IN GENERAL.—The Corporation, 

5 as receiver for a covered broker or dealer, 

6 may approve articles of association for one 

7 or more bridge financial companies with 

8 respect to such covered broker or dealer, 

9 which bridge financial company or compa10 nies shall, by operation of law and imme11 diately upon approval of its articles of as12 sociation— 

13 (I) be established and deemed 

14 registered with the Commission under 

15 the Securities Exchange Act of 1934 

16 and a member of SIPC; 

17 (II) operate in accordance with 

18 such articles and this section; and 

19 (III) succeed to any and all reg20 istrations and memberships of the 

21 covered financial company with or in 

22 any self-regulatory organizations. 

23 (ii) OTHER REQUIREMENTS.—Except 

24 as provided in clause (i), and notwith25 standing any other provision of this secVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00255 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
256 

•S 3217 AMDT 3739 

1 tion, the bridge financial company shall be 

2 subject to the Federal securities laws and 

3 all requirements with respect to being a 

4 member of a self-regulatory organization, 

5 unless exempted from any such require6 ments by the Commission, as is necessary 

7 or appropriate in the public interest or for 

8 the protection of investors. 

9 (iii) TREATMENT OF CUSTOMERS.— 

10 Except as otherwise provided by this title, 

11 any customer of the covered broker or 

12 dealer whose account is transferred to a 

13 bridge financial company shall have all the 

14 rights, privileges, and protections under 

15 section 205(f) and under the Securities In16 vestor Protection Act of 1970 (15 U.S.C. 

17 78aaa et seq.), that such customer would 

18 have had if the account were not trans19 ferred from the covered financial company 

20 under this subparagraph. 

21 (iv) OPERATION OF BRIDGE BROKERS

22 OR DEALERS.—Notwithstanding any other 

23 provision of this title, the Corporation shall 

24 not operate any bridge financial company 

25 created by the Corporation under this title 


sroberts on DSKH9S0YB1PROD with BILLS
257 

•S 3217 AMDT 3739 

1 with respect to a covered broker or dealer 

2 in such a manner as to adversely affect the 

3 ability of customers to promptly access 

4 their customer property in accordance with 

5 applicable law. 

6 (3) INTERESTS IN AND ASSETS AND OBLIGA7 TIONS OF COVERED FINANCIAL COMPANY.—Notwith8 standing paragraph (1) or (2) or any other provision 

9 of law— 

10 (A) a bridge financial company shall as11 sume, acquire, or succeed to the assets or liabil12 ities of a covered financial company (including 

13 the assets or liabilities associated with any trust 

14 or custody business) only to the extent that 

15 such assets or liabilities are transferred by the 

16 Corporation to the bridge financial company in 

17 accordance with, and subject to the restrictions 

18 set forth in, paragraph (1)(B); and 

19 (B) a bridge financial company shall not 

20 assume, acquire, or succeed to any obligation 

21 that a covered financial company for which the 

22 Corporation has been appointed receiver may 

23 have to any shareholder, member, general part24 ner, limited partner, or other person with an in25 terest in the equity of the covered financial 


sroberts on DSKH9S0YB1PROD with BILLS
258 

•S 3217 AMDT 3739 

1 company that arises as a result of the status of 

2 that person having an equity claim in the cov3 ered financial company. 

4 (4) BRIDGE FINANCIAL COMPANY TREATED AS

5 BEING IN DEFAULT FOR CERTAIN PURPOSES.—A 

6 bridge financial company shall be treated as a cov7 ered financial company in default at such times and 

8 for such purposes as the Corporation may, in its dis9 cretion, determine. 

10 (5) TRANSFER OF ASSETS AND LIABILITIES.— 

11 (A) AUTHORITY OF CORPORATION.—The 

12 Corporation, as receiver for a covered financial 

13 company, may transfer any assets and liabilities 

14 of a covered financial company (including any 

15 assets or liabilities associated with any trust or 

16 custody business) to one or more bridge finan17 cial companies, in accordance with and subject 

18 to the restrictions of paragraph (1). 

19 (B) SUBSEQUENT TRANSFERS.—At any 

20 time after the establishment of a bridge finan21 cial company with respect to a covered financial 

22 company, the Corporation, as receiver, may 

23 transfer any assets and liabilities of such cov24 ered financial company as the Corporation may, 

25 in its discretion, determine to be appropriate in 


sroberts on DSKH9S0YB1PROD with BILLS
259 

•S 3217 AMDT 3739 

1 accordance with and subject to the restrictions 

2 of paragraph (1). 

3 (C) TREATMENT OF TRUST OR CUSTODY

4 BUSINESS.—For purposes of this paragraph, 

5 the trust or custody business, including fidu6 ciary appointments, held by any covered finan7 cial company is included among its assets and 

8 liabilities. 

9 (D) EFFECTIVE WITHOUT APPROVAL.— 

10 The transfer of any assets or liabilities, includ11 ing those associated with any trust or custody 

12 business of a covered financial company, to a 

13 bridge financial company shall be effective with14 out any further approval under Federal or 

15 State law, assignment, or consent with respect 

16 thereto. 

17 (E) EQUITABLE TREATMENT OF SIMI18 LARLY SITUATED CREDITORS.—The Corpora19 tion shall treat all creditors of a covered finan20 cial company that are similarly situated under 

21 subsection (b)(1), in a similar manner in exer22 cising the authority of the Corporation under 

23 this subsection to transfer any assets or liabil24 ities of the covered financial company to one or 

25 more bridge financial companies established 


sroberts on DSKH9S0YB1PROD with BILLS
260 

•S 3217 AMDT 3739 

1 with respect to such covered financial company, 

2 except that the Corporation may take any ac3 tion (including making payments, subject to 

4 subsection (o)(1)(E)(ii)) that does not comply 

5 with this subparagraph, if— 

6 (i) the Corporation determines that 

7 such action is necessary— 

8 (I) to maximize the value of the 

9 assets of the covered financial com10 pany; 

11 (II) to maximize the present 

12 value return from the sale or other 

13 disposition of the assets of the covered 

14 financial company; or 

15 (III) to minimize the amount of 

16 any loss realized upon the sale or 

17 other disposition of the assets of the 

18 covered financial company; and 

19 (ii) all creditors that are similarly sit20 uated under subsection (b)(1) receive not 

21 less than the amount provided under para22 graphs (2) and (3) of subsection (d). 

23 (F) LIMITATION ON TRANSFER OF LIABIL24 ITIES.—Notwithstanding any other provision of 

25 law, the aggregate amount of liabilities of a covVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00260 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
261 

•S 3217 AMDT 3739 

1 ered financial company that are transferred to, 

2 or assumed by, a bridge financial company from 

3 a covered financial company may not exceed the 

4 aggregate amount of the assets of the covered 

5 financial company that are transferred to, or 

6 purchased by, the bridge financial company 

7 from the covered financial company. 

8 (6) STAY OF JUDICIAL ACTION.—Any judicial 

9 action to which a bridge financial company becomes 

10 a party by virtue of its acquisition of any assets or 

11 assumption of any liabilities of a covered financial 

12 company shall be stayed from further proceedings 

13 for a period of not longer than 45 days (or such 

14 longer period as may be agreed to upon the consent 

15 of all parties) at the request of the bridge financial 

16 company. 

17 (7) AGREEMENTS AGAINST INTEREST OF THE

18 BRIDGE FINANCIAL COMPANY.—No agreement that 

19 tends to diminish or defeat the interest of the bridge 

20 financial company in any asset of a covered financial 

21 company acquired by the bridge financial company 

22 shall be valid against the bridge financial company, 

23 unless such agreement— 

24 (A) is in writing; 


sroberts on DSKH9S0YB1PROD with BILLS
262 

•S 3217 AMDT 3739 

1 (B) was executed by an authorized officer 

2 or representative of the covered financial com3 pany or confirmed in the ordinary course of 

4 business by the covered financial company; and 

5 (C) has been on the official record of the 

6 company, since the time of its execution, or 

7 with which, the party claiming under the agree8 ment provides documentation of such agreement 

9 and its authorized execution or confirmation by 

10 the covered financial company that is acceptable 

11 to the receiver. 

12 (8) NO FEDERAL STATUS.— 

13 (A) AGENCY STATUS.—A bridge financial 

14 company is not an agency, establishment, or in15 strumentality of the United States. 

16 (B) EMPLOYEE STATUS.—Representatives 

17 for purposes of paragraph (1)(B), directors, of18 ficers, employees, or agents of a bridge financial 

19 company are not, solely by virtue of service in 

20 any such capacity, officers or employees of the 

21 United States. Any employee of the Corporation 

22 or of any Federal instrumentality who serves at 

23 the request of the Corporation as a representa24 tive for purposes of paragraph (1)(B), director, 


sroberts on DSKH9S0YB1PROD with BILLS
263 

•S 3217 AMDT 3739 

1 officer, employee, or agent of a bridge financial 

2 company shall not— 

3 (i) solely by virtue of service in any 

4 such capacity lose any existing status as 

5 an officer or employee of the United States 

6 for purposes of title 5, United States Code, 

7 or any other provision of law; or 

8 (ii) receive any salary or benefits for 

9 service in any such capacity with respect to 

10 a bridge financial company in addition to 

11 such salary or benefits as are obtained 

12 through employment with the Corporation 

13 or such Federal instrumentality. 

14 (9) FUNDING AUTHORIZED.—The Corporation 

15 may, subject to the plan described in subsection 

16 (n)(13), provide funding to facilitate any transaction 

17 described in subparagraph (A), (B), (C), or (D) of 

18 paragraph (13) with respect to any bridge financial 

19 company, or facilitate the acquisition by a bridge fi20 nancial company of any assets, or the assumption of 

21 any liabilities, of a covered financial company for 

22 which the Corporation has been appointed receiver. 

23 (10) EXEMPT TAX STATUS.—Notwithstanding 

24 any other provision of Federal or State law, a bridge 

25 financial company, its franchise, property, and inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00263 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
264 

•S 3217 AMDT 3739 

1 come shall be exempt from all taxation now or here2 after imposed by the United States, by any territory, 

3 dependency, or possession thereof, or by any State, 

4 county, municipality, or local taxing authority. 

5 (11) FEDERAL AGENCY APPROVAL; ANTITRUST

6 REVIEW.—If a transaction involving the merger or 

7 sale of a bridge financial company requires approval 

8 by a Federal agency, the transaction may not be 

9 consummated before the 5th calendar day after the 

10 date of approval by the Federal agency responsible 

11 for such approval with respect thereto. If, in connec12 tion with any such approval a report on competitive 

13 factors from the Attorney General is required, the 

14 Federal agency responsible for such approval shall 

15 promptly notify the Attorney General of the pro16 posed transaction and the Attorney General shall 

17 provide the required report within 10 days of the re18 quest. If a notification is required under section 7A 

19 of the Clayton Act with respect to such transaction, 

20 the required waiting period shall end on the 15th 

21 day after the date on which the Attorney General 

22 and the Federal Trade Commission receive such no23 tification, unless the waiting period is terminated 

24 earlier under section 7A(b)(2) of the Clayton Act, or 

25 extended under section 7A(e)(2) of that Act. 


sroberts on DSKH9S0YB1PROD with BILLS
265 

•S 3217 AMDT 3739 

1 (12) DURATION OF BRIDGE FINANCIAL COM2 PANY.—Subject to paragraphs (13) and (14), the 

3 status of a bridge financial company as such shall 

4 terminate at the end of the 2-year period following 

5 the date on which it was granted a charter. The 

6 Corporation may, in its discretion, extend the status 

7 of the bridge financial company as such for no more 

8 than 3 additional 1-year periods. 

9 (13) TERMINATION OF BRIDGE FINANCIAL COM10 PANY STATUS.—The status of any bridge financial 

11 company as such shall terminate upon the earliest 

12 of— 

13 (A) the date of the merger or consolidation 

14 of the bridge financial company with a company 

15 that is not a bridge financial company; 

16 (B) at the election of the Corporation, the 

17 sale of a majority of the capital stock of the 

18 bridge financial company to a company other 

19 than the Corporation and other than another 

20 bridge financial company; 

21 (C) the sale of 80 percent, or more, of the 

22 capital stock of the bridge financial company to 

23 a person other than the Corporation and other 

24 than another bridge financial company; 


sroberts on DSKH9S0YB1PROD with BILLS
266 

•S 3217 AMDT 3739 

1 (D) at the election of the Corporation, ei2 ther the assumption of all or substantially all of 

3 the liabilities of the bridge financial company by 

4 a company that is not a bridge financial com5 pany, or the acquisition of all or substantially 

6 all of the assets of the bridge financial company 

7 by a company that is not a bridge financial 

8 company, or other entity as permitted under 

9 applicable law; and 

10 (E) the expiration of the period provided in 

11 paragraph (12), or the earlier dissolution of the 

12 bridge financial company, as provided in para13 graph (15). 

14 (14) EFFECT OF TERMINATION EVENTS.— 

15 (A) MERGER OR CONSOLIDATION.—A 

16 merger or consolidation, described in paragraph 

17 (12)(A) shall be conducted in accordance with, 

18 and shall have the effect provided in, the provi19 sions of applicable law. For the purpose of ef20 fecting such a merger or consolidation, the 

21 bridge financial company shall be treated as a 

22 corporation organized under the laws of the 

23 State of Delaware (unless the law of another 

24 State has been selected by the bridge financial 

25 company in accordance with paragraph (2)(F)), 


sroberts on DSKH9S0YB1PROD with BILLS
267 

•S 3217 AMDT 3739 

1 and the Corporation shall be treated as the sole 

2 shareholder thereof, notwithstanding any other 

3 provision of State or Federal law. 

4 (B) CHARTER CONVERSION.—Following 

5 the sale of a majority of the capital stock of the 

6 bridge financial company, as provided in para7 graph (13)(B), the Corporation may amend the 

8 charter of the bridge financial company to re9 flect the termination of the status of the bridge 

10 financial company as such, whereupon the com11 pany shall have all of the rights, powers, and 

12 privileges under its constituent documents and 

13 applicable Federal or State law. In connection 

14 therewith, the Corporation may take such steps 

15 as may be necessary or convenient to reincor16 porate the bridge financial company under the 

17 laws of a State and, notwithstanding any provi18 sions of Federal or State law, such State-char19 tered corporation shall be deemed to succeed by 

20 operation of law to such rights, titles, powers, 

21 and interests of the bridge financial company as 

22 the Corporation may provide, with the same ef23 fect as if the bridge financial company had 

24 merged with the State-chartered corporation 


sroberts on DSKH9S0YB1PROD with BILLS
268 

•S 3217 AMDT 3739 

1 under provisions of the corporate laws of such 

2 State. 

3 (C) SALE OF STOCK.—Following the sale 

4 of 80 percent or more of the capital stock of a 

5 bridge financial company, as provided in para6 graph (13)(C), the company shall have all of 

7 the rights, powers, and privileges under its con8 stituent documents and applicable Federal or 

9 State law. In connection therewith, the Cor10 poration may take such steps as may be nec11 essary or convenient to reincorporate the bridge 

12 financial company under the laws of a State 

13 and, notwithstanding any provisions of Federal 

14 or State law, the State-chartered corporation 

15 shall be deemed to succeed by operation of law 

16 to such rights, titles, powers and interests of 

17 the bridge financial company as the Corpora18 tion may provide, with the same effect as if the 

19 bridge financial company had merged with the 

20 State-chartered corporation under provisions of 

21 the corporate laws of such State. 

22 (D) ASSUMPTION OF LIABILITIES AND

23 SALE OF ASSETS.—Following the assumption of 

24 all or substantially all of the liabilities of the 

25 bridge financial company, or the sale of all or 


sroberts on DSKH9S0YB1PROD with BILLS
269 

•S 3217 AMDT 3739 

1 substantially all of the assets of the bridge fi2 nancial company, as provided in paragraph 

3 (13)(D), at the election of the Corporation, the 

4 bridge financial company may retain its status 

5 as such for the period provided in paragraph 

6 (12) or may be dissolved at the election of the 

7 Corporation. 

8 (E) AMENDMENTS TO CHARTER.—Fol9 lowing the consummation of a transaction de10 scribed in subparagraph (A), (B), (C), or (D) 

11 of paragraph (13), the charter of the resulting 

12 company shall be amended to reflect the termi13 nation of bridge financial company status, if ap14 propriate. 

15 (15) DISSOLUTION OF BRIDGE FINANCIAL COM16 PANY.— 

17 (A) IN GENERAL.—Notwithstanding any 

18 other provision of Federal or State law, if the 

19 status of a bridge financial company as such 

20 has not previously been terminated by the oc21 currence of an event specified in subparagraph 

22 (A), (B), (C), or (D) of paragraph (13)— 

23 (i) the Corporation may, in its discre24 tion, dissolve the bridge financial company 


sroberts on DSKH9S0YB1PROD with BILLS
270 

•S 3217 AMDT 3739 

1 in accordance with this paragraph at any 

2 time; and 

3 (ii) the Corporation shall promptly 

4 commence dissolution proceedings in ac5 cordance with this paragraph upon the ex6 piration of the 2-year period following the 

7 date on which the bridge financial com8 pany was chartered, or any extension 

9 thereof, as provided in paragraph (12). 

10 (B) PROCEDURES.—The Corporation shall 

11 remain the receiver for a bridge financial com12 pany for the purpose of dissolving the bridge fi13 nancial company. The Corporation as receiver 

14 for a bridge financial company shall wind up 

15 the affairs of the bridge financial company in 

16 conformity with the provisions of law relating to 

17 the liquidation of covered financial companies 

18 under this title. With respect to any such bridge 

19 financial company, the Corporation as receiver 

20 shall have all the rights, powers, and privileges 

21 and shall perform the duties related to the exer22 cise of such rights, powers, or privileges granted 

23 by law to the Corporation as receiver for a cov24 ered financial company under this title and, 

25 notwithstanding any other provision of law, in 


sroberts on DSKH9S0YB1PROD with BILLS
271 

•S 3217 AMDT 3739 

1 the exercise of such rights, powers, and privi2 leges, the Corporation shall not be subject to 

3 the direction or supervision of any State agency 

4 or other Federal agency. 

5 (16) AUTHORITY TO OBTAIN CREDIT.— 

6 (A) IN GENERAL.—A bridge financial com7 pany may obtain unsecured credit and issue un8 secured debt. 

9 (B) INABILITY TO OBTAIN CREDIT.—If a 

10 bridge financial company is unable to obtain 

11 unsecured credit or issue unsecured debt, the 

12 Corporation may authorize the obtaining of 

13 credit or the issuance of debt by the bridge fi14 nancial company— 

15 (i) with priority over any or all of the 

16 obligations of the bridge financial com17 pany; 

18 (ii) secured by a lien on property of 

19 the bridge financial company that is not 

20 otherwise subject to a lien; or 

21 (iii) secured by a junior lien on prop22 erty of the bridge financial company that 

23 is subject to a lien. 

24 (C) LIMITATIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
272 

•S 3217 AMDT 3739 

1 (i) IN GENERAL.—The Corporation, 

2 after notice and a hearing, may authorize 

3 the obtaining of credit or the issuance of 

4 debt by a bridge financial company that is 

5 secured by a senior or equal lien on prop6 erty of the bridge financial company that 

7 is subject to a lien, only if— 

8 (I) the bridge financial company 

9 is unable to otherwise obtain such 

10 credit or issue such debt; and 

11 (II) there is adequate protection 

12 of the interest of the holder of the lien 

13 on the property with respect to which 

14 such senior or equal lien is proposed 

15 to be granted. 

16 (ii) HEARING.—The hearing required 

17 pursuant to this subparagraph shall be be18 fore a court of the United States, which 

19 shall have jurisdiction to conduct such 

20 hearing. 

21 (D) BURDEN OF PROOF.—In any hearing 

22 under this paragraph, the Corporation has the 

23 burden of proof on the issue of adequate protec24 tion. 


sroberts on DSKH9S0YB1PROD with BILLS
273 

•S 3217 AMDT 3739 

1 (E) QUALIFIED FINANCIAL CONTRACTS.— 

2 No credit or debt obtained or issued by a bridge 

3 financial company may contain terms that im4 pair the rights of a counterparty to a qualified 

5 financial contract upon a default by the bridge 

6 financial company, other than the priority of 

7 such counterparty’s unsecured claim (after the 

8 exercise of rights) relative to the priority of the 

9 bridge financial company’s obligations in re10 spect of such credit or debt, unless such 

11 counterparty consents in writing to any such 

12 impairment. 

13 (17) EFFECT ON DEBTS AND LIENS.—The re14 versal or modification on appeal of an authorization 

15 under this subsection to obtain credit or issue debt, 

16 or of a grant under this section of a priority or a 

17 lien, does not affect the validity of any debt so 

18 issued, or any priority or lien so granted, to an enti19 ty that extended such credit in good faith, whether 

20 or not such entity knew of the pendency of the ap21 peal, unless such authorization and the issuance of 

22 such debt, or the granting of such priority or lien, 

23 were stayed pending appeal. 

24 (i) SHARING RECORDS.—If the Corporation has been 

25 appointed as receiver for a covered financial company, 


sroberts on DSKH9S0YB1PROD with BILLS
274 

•S 3217 AMDT 3739 

1 other Federal regulators shall make all records relating 

2 to the covered financial company available to the Corpora3 tion, which may be used by the Corporation in any manner 

4 that the Corporation determines to be appropriate. 

5 (j) EXPEDITED PROCEDURES FOR CERTAIN

6 CLAIMS.— 

7 (1) TIME FOR FILING NOTICE OF APPEAL.— 

8 The notice of appeal of any order, whether interlocu9 tory or final, entered in any case brought by the 

10 Corporation against a director, officer, employee, 

11 agent, attorney, accountant, or appraiser of the cov12 ered financial company, or any other person em13 ployed by or providing services to a covered financial 

14 company, shall be filed not later than 30 days after 

15 the date of entry of the order. The hearing of the 

16 appeal shall be held not later than 120 days after 

17 the date of the notice of appeal. The appeal shall be 

18 decided not later than 180 days after the date of the 

19 notice of appeal. 

20 (2) SCHEDULING.—The court shall expedite the 

21 consideration of any case brought by the Corpora22 tion against a director, officer, employee, agent, at23 torney, accountant, or appraiser of a covered finan24 cial company or any other person employed by or 

25 providing services to a covered financial company. 


sroberts on DSKH9S0YB1PROD with BILLS
275 

•S 3217 AMDT 3739 

1 As far as practicable, the court shall give such case 

2 priority on its docket. 

3 (3) JUDICIAL DISCRETION.—The court may 

4 modify the schedule and limitations stated in para5 graphs (1) and (2) in a particular case, based on a 

6 specific finding that the ends of justice that would 

7 be served by making such a modification would out8 weigh the best interest of the public in having the 

9 case resolved expeditiously. 

10 (k) FOREIGN INVESTIGATIONS.—The Corporation, as 

11 receiver for any covered financial company, and for pur12 poses of carrying out any power, authority, or duty with 

13 respect to a covered financial company— 

14 (1) may request the assistance of any foreign fi15 nancial authority and provide assistance to any for16 eign financial authority in accordance with section 

17 8(v) of the Federal Deposit Insurance Act, as if the 

18 covered financial company were an insured deposi19 tory institution, the Corporation were the appro20 priate Federal banking agency for the company, and 

21 any foreign financial authority were the foreign 

22 banking authority; and 

23 (2) may maintain an office to coordinate for24 eign investigations or investigations on behalf of for25 eign financial authorities. 


sroberts on DSKH9S0YB1PROD with BILLS
276 

•S 3217 AMDT 3739 

1 (l) PROHIBITION ON ENTERING SECRECY AGREE2 MENTS AND PROTECTIVE ORDERS.—The Corporation 

3 may not enter into any agreement or approve any protec4 tive order which prohibits the Corporation from disclosing 

5 the terms of any settlement of an administrative or other 

6 action for damages or restitution brought by the Corpora7 tion in its capacity as receiver for a covered financial com8 pany. 

9 (m) LIQUIDATION OF CERTAIN COVERED FINANCIAL

10 COMPANIES OR BRIDGE FINANCIAL COMPANIES.— 

11 (1) IN GENERAL.—Except as specifically pro12 vided in this section, and notwithstanding any other 

13 provision of law, the Corporation, in connection with 

14 the liquidation of any covered financial company or 

15 bridge financial company with respect to which the 

16 Corporation has been appointed as receiver, shall— 

17 (A) in the case of any covered financial 

18 company or bridge financial company that is or 

19 has a subsidiary that is a stockbroker, but is 

20 not a member of the Securities Investor Protec21 tion Corporation, apply the provisions of sub22 chapter III of chapter 7 of the Bankruptcy 

23 Code, in respect of the distribution to any cus24 tomer of all customer name securities and cus25 tomer property, as if such covered financial 


sroberts on DSKH9S0YB1PROD with BILLS
277 

•S 3217 AMDT 3739 

1 company or bridge financial company were a 

2 debtor for purposes of such subchapter; or 

3 (B) in the case of any covered financial 

4 company or bridge financial company that is a 

5 commodity broker, apply the provisions of sub6 chapter IV of chapter 7 the Bankruptcy Code, 

7 in respect of the distribution to any customer of 

8 all customer property, as if such covered finan9 cial company or bridge financial company were 

10 a debtor for purposes of such subchapter. 

11 (2) DEFINITIONS.—For purposes of this sub12 section— 

13 (A) the terms ‘‘customer’’, ‘‘customer 

14 name securities’’, and ‘‘customer property’’ 

15 have the same meanings as in section 741 of 

16 title 11, United States Code; and 

17 (B) the terms ‘‘commodity broker’’ and 

18 ‘‘stockbroker’’ have the same meanings as in 

19 section 101 of the Bankruptcy Code. 

20 (n) ORDERLY LIQUIDATION FUND.— 

21 (1) ESTABLISHMENT.—There is established in 

22 the Treasury of the United States a separate fund 

23 to be known as the ‘‘Orderly Liquidation Fund’’, 

24 which shall be available to the Corporation to carry 

25 out the authorities contained in this title, for the 


sroberts on DSKH9S0YB1PROD with BILLS
278 

•S 3217 AMDT 3739 

1 cost of actions authorized by this title, including the 

2 orderly liquidation of covered financial companies, 

3 payment of administrative expenses, the payment of 

4 principal and interest by the Corporation on obliga5 tions issued under paragraph (9), and the exercise 

6 of the authorities of the Corporation under this title. 

7 (2) PROCEEDS.—Amounts received by the Cor8 poration, including assessments received under sub9 section (o), proceeds of obligations issued under 

10 paragraph (9), interest and other earnings from in11 vestments, and repayments to the Corporation by 

12 covered financial companies, shall be deposited into 

13 the Fund. 

14 (3) MANAGEMENT.—The Corporation shall 

15 manage the Fund in accordance with this subsection 

16 and the policies and procedures established under 

17 section 203(d). 

18 (4) INVESTMENTS.—The Corporation shall in19 vest amounts in the Fund in accordance with para20 graph (8). 

21 (5) TARGET SIZE OF THE FUND.—The target 

22 size of the Fund (in this section referred to as ‘‘tar23 get size’’) shall be $50,000,000,000, adjusted for in24 flation on a periodic basis by the Corporation. 


sroberts on DSKH9S0YB1PROD with BILLS
279 

•S 3217 AMDT 3739 

1 (6) INITIAL CAPITALIZATION PERIOD.—The 

2 Corporation shall impose risk-based assessments as 

3 provided under subsection (o), during the period be4 ginning one year after the date of enactment of this 

5 Act and ending on the date on which the Fund 

6 reaches the target size (in this section referred to as 

7 the ‘‘initial capitalization period’’), provided that the 

8 initial capitalization period shall be not shorter than 

9 5 years, and not longer than 10 years, after the date 

10 of enactment of this Act. The Corporation, with the 

11 approval of the Secretary, may extend the initial 

12 capitalization period for a longer period, as deter13 mined necessary by the Corporation, if the Corpora14 tion is appointed receiver for a covered financial 

15 company under this title and the Fund incurs a loss 

16 before the expiration of such period. 

17 (7) MAINTAINING THE FUND.—Upon the expi18 ration of the initial capitalization period, the Cor19 poration shall suspend assessments, except as set 

20 forth in subsection (o)(1). 

21 (8) INVESTMENTS.—At the request of the Cor22 poration, the Secretary may invest such portion of 

23 amounts held in the Fund that are not, in the judg24 ment of the Corporation, required to meet the cur25 rent needs of the Corporation, in obligations of the 


sroberts on DSKH9S0YB1PROD with BILLS
280 

•S 3217 AMDT 3739 

1 United States having suitable maturities, as deter2 mined by the Corporation. The interest on and the 

3 proceeds from the sale or redemption of such obliga4 tions shall be credited to the Fund. 

5 (9) AUTHORITY TO ISSUE OBLIGATIONS.— 

6 (A) CORPORATION AUTHORIZED TO ISSUE

7 OBLIGATIONS.—Upon appointment by the Sec8 retary of the Corporation as receiver for a cov9 ered financial company, the Corporation is au10 thorized to issue obligations to the Secretary. 

11 (B) SECRETARY AUTHORIZED TO PUR12 CHASE OBLIGATIONS.—The Secretary may, 

13 under such terms and conditions as the Sec14 retary may require, purchase or agree to pur15 chase any obligations issued under subpara16 graph (A), and for such purpose, the Secretary 

17 is authorized to use as a public debt transaction 

18 the proceeds of the sale of any securities issued 

19 under chapter 31 of title 31, United States 

20 Code, and the purposes for which securities 

21 may be issued under chapter 31 of title 31, 

22 United States Code, are extended to include 

23 such purchases. 

24 (C) INTEREST RATE.—Each purchase of 

25 obligations by the Secretary under this paraVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00280 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
281 

•S 3217 AMDT 3739 

1 graph shall be upon such terms and conditions 

2 as to yield a return at a rate determined by the 

3 Secretary, taking into consideration the current 

4 average yield on outstanding marketable obliga5 tions of the United States of comparable matu6 rity. 

7 (D) SECRETARY AUTHORIZED TO SELL OB8 LIGATIONS.—The Secretary may sell, upon such 

9 terms and conditions as the Secretary shall de10 termine, any of the obligations acquired under 

11 this paragraph. 

12 (E) PUBLIC DEBT TRANSACTIONS.—All 

13 purchases and sales by the Secretary of such 

14 obligations under this paragraph shall be treat15 ed as public debt transactions of the United 

16 States, and the proceeds from the sale of any 

17 obligations acquired by the Secretary under this 

18 paragraph shall be deposited into the Treasury 

19 of the United States as miscellaneous receipts. 

20 (10) MAXIMUM OBLIGATION LIMITATION.—The 

21 Corporation may not, in connection with the orderly 

22 liquidation of a covered financial company, issue or 

23 incur any obligation, if, after issuing or incurring 

24 the obligation, the aggregate amount of such obligaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00281 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
282 

•S 3217 AMDT 3739 

1 tions outstanding under this subsection would exceed 

2 the sum of— 

3 (A) the amount of cash or the cash equiva4 lents held by the Fund; and 

5 (B) the amount that is equal to 90 percent 

6 of the fair value of assets from each covered fi7 nancial company that are available to repay the 

8 Corporation. 

9 (11) RULEMAKING.—The Corporation and the 

10 Secretary shall jointly, in consultation with the 

11 Council, prescribe regulations governing the calcula12 tion of the maximum obligation limitation defined in 

13 this paragraph. 

14 (12) RELIANCE ON PRIVATE SECTOR FUND15 ING.—The Corporation may exercise its authority 

16 under paragraph (9) only after the cash and cash 

17 equivalents held by the Fund have been drawn down 

18 to facilitate the orderly liquidation of a covered fi19 nancial company. 

20 (13) RULE OF CONSTRUCTION.— 

21 (A) IN GENERAL.—Nothing in this section 

22 shall be construed to affect the authority of the 

23 Corporation under subsection (a) or (b) of sec24 tion 14 or section 15(c)(5) of the Federal De25 posit Insurance Act (12 U.S.C. 1824, 


sroberts on DSKH9S0YB1PROD with BILLS
283 

•S 3217 AMDT 3739 

1 1825(c)(5)), the management of the Deposit In2 surance Fund by the Corporation, or the resolu3 tion of insured depository institutions, provided 

4 that— 

5 (i) none of the authorities contained 

6 in this title shall be used to assist the De7 posit Insurance Fund with any of the other 

8 responsibilities of the Corporation under 

9 applicable law other than this title; and 

10 (ii) the authorities of the Corporation 

11 relating to the Deposit Insurance Fund, or 

12 any other responsibilities of the Corpora13 tion, shall not be used to assist a covered 

14 financial company pursuant to this title. 

15 (B) VALUATION.—For purposes of deter16 mining the amount of obligations under this 

17 subsection— 

18 (i) the Corporation shall include as an 

19 obligation any contingent liability of the 

20 Corporation pursuant to this title; and 

21 (ii) the Corporation shall value any 

22 contingent liability at its expected cost to 

23 the Corporation. 

24 (14) ORDERLY LIQUIDATION PLAN.—Amounts 

25 in the Fund shall be available to the Corporation 


sroberts on DSKH9S0YB1PROD with BILLS
284 

•S 3217 AMDT 3739 

1 with regard to a covered financial company for 

2 which the Corporation is appointed receiver after the 

3 Corporation has developed an orderly liquidation 

4 plan that is acceptable to the Secretary with regard 

5 to such covered financial company, including the 

6 provision and use of funds under section 204(d) and 

7 subsection (h)(2)(G)(iv) and (h)(9) of this section. 

8 The Corporation may, at any time, amend any or9 derly liquidation plan approved by the Secretary 

10 with the concurrence of the Secretary. 

11 (o) ASSESSMENTS.— 

12 (1) RISK-BASED ASSESSMENTS.— 

13 (A) ASSESSMENTS TO CAPITALIZE THE

14 FUND.— 

15 (i) IN GENERAL.—Except as provided 

16 under subparagraph (C)(ii), the Corpora17 tion shall impose risk-based assessments 

18 on eligible financial companies to capitalize 

19 the Fund during the initial capitalization 

20 period, taking into account the consider21 ations set forth in paragraph (4). 

22 (ii) SUSPENSION OF ASSESSMENTS.— 

23 The Corporation shall suspend the imposi24 tion of assessments under clause (i) fol25 lowing a determination by the Corporation 


sroberts on DSKH9S0YB1PROD with BILLS
285 

•S 3217 AMDT 3739 

1 that the Fund has reached the target size 

2 described in subsection (n). 

3 (B) ELIGIBLE FINANCIAL COMPANIES DE4 FINED.—For purposes of this subsection, the 

5 term ‘‘eligible financial company’’ means any 

6 bank holding company with total consolidated 

7 assets equal to or greater than 

8 $50,000,000,000 and any nonbank financial 

9 company supervised by the Board of Governors. 

10 (C) ADDITIONAL ASSESSMENTS.—The Cor11 poration shall charge one or more risk-based as12 sessments in accordance with the provisions of 

13 subparagraph (E), if— 

14 (i) the Fund falls below the target 

15 size after the initial capitalization period, 

16 in order to restore the Fund to the target 

17 size over a period of time determined by 

18 the Corporation; 

19 (ii) the Corporation is appointed re20 ceiver for a covered financial company and 

21 the Fund incurs a loss during the initial 

22 capitalization period with respect to that 

23 covered financial company; or 

24 (iii) such assessments are necessary to 

25 pay in full the obligations issued by the 


sroberts on DSKH9S0YB1PROD with BILLS
286 

•S 3217 AMDT 3739 

1 Corporation to the Secretary within 60 

2 months of the date of issuance of such ob3 ligations. 

4 (D) EXTENSIONS AUTHORIZED.—The Cor5 poration may, with the approval of the Sec6 retary, extend the time period under subpara7 graph (C)(iii), if the Corporation determines 

8 that an extension is necessary to avoid a serious 

9 adverse effect on the financial system of the 

10 United States. 

11 (E) APPLICATION OF ADDITIONAL ASSESS12 MENTS.—To meet the requirements of subpara13 graph (C), the Corporation shall, taking into 

14 account the considerations set forth in para15 graph (4), impose assessments— 

16 (i) on— 

17 (I) eligible financial companies; 

18 and 

19 (II) financial companies with 

20 total consolidated assets over 

21 $50,000,000,000 that are not eligible 

22 financial companies; and 

23 (ii) at a substantially higher rate than 

24 otherwise would be assessed on any finan25 cial company that received payments or 


sroberts on DSKH9S0YB1PROD with BILLS
287 

•S 3217 AMDT 3739 

1 credit pursuant to subsection (b)(4), 

2 (d)(4), or (h)(5)(E). 

3 (F) NEW ELIGIBLE FINANCIAL COMPA4 NIES.—The Corporation shall impose an assess5 ment, in an amount determined by the Corpora6 tion in consultation with the Secretary and tak7 ing into account the considerations set forth in 

8 paragraph (4), on any company that becomes 

9 an eligible financial company after the initial 

10 capitalization period. 

11 (2) GRADUATED ASSESSMENT RATE.—The Cor12 poration shall impose assessments on a graduated 

13 basis, with financial companies having greater assets 

14 being assessed at a higher rate. 

15 (3) NOTIFICATION AND PAYMENT.—The Cor16 poration shall notify each financial company of that 

17 company’s assessment under this subsection. Any fi18 nancial company subject to assessment under this 

19 subsection shall pay such assessment in accordance 

20 with the regulations prescribed pursuant to para21 graph (6). 

22 (4) RISK-BASED ASSESSMENT CONSIDER23 ATIONS.—In imposing assessments under this sub24 section, the Corporation shall— 


sroberts on DSKH9S0YB1PROD with BILLS
288 

•S 3217 AMDT 3739 

1 (A) take into account economic conditions 

2 generally affecting financial companies, so as to 

3 allow assessments to be lower during less favor4 able economic conditions; 

5 (B) take into account any assessments im6 posed on— 

7 (i) an insured depository institution 

8 subsidiary of a financial company pursuant 

9 to section 7 or section 13(c)(4)(G) of the 

10 Federal Deposit Insurance Act (12 U.S.C. 

11 1817, 1823(c)(4)(G)); 

12 (ii) a financial company or subsidiary 

13 of such company that is a member of SIPC 

14 pursuant to section 4 of the Securities In15 vestor Protection Act of 1970 (15 U.S.C. 

16 78ddd); and 

17 (iii) a financial company or subsidiary 

18 of such company that is an insurance com19 pany pursuant to applicable State law to 

20 cover (or reimburse payments made to 

21 cover) the costs of rehabilitation, liquida22 tion, or other State insolvency proceeding 

23 with respect to one or more insurance com24 panies; 


sroberts on DSKH9S0YB1PROD with BILLS
289 

•S 3217 AMDT 3739 

1 (C) take into account the financial condi2 tion of the financial company, including the ex3 tent and type of off-balance-sheet exposures of 

4 the financial company; 

5 (D) take into account the risks presented 

6 by the financial company to the financial sta7 bility of the United States economy; 

8 (E) take into account the extent to which 

9 the financial company or group of financial 

10 companies has benefitted, or likely would ben11 efit, from the orderly liquidation of a covered fi12 nancial company and the use of the Fund under 

13 this title; 

14 (F) distinguish among different classes of 

15 assets or different types of financial companies 

16 (including distinguishing among different types 

17 of financial companies, based on their levels of 

18 capital and leverage) in order to establish com19 parable assessment bases among financial com20 panies subject to this subsection; 

21 (G) establish the parameters for the grad22 uated assessment requirement in paragraph (2); 

23 and 

24 (H) take into account such other factors as 

25 the Corporation deems appropriate. 


sroberts on DSKH9S0YB1PROD with BILLS
290 

•S 3217 AMDT 3739 

1 (5) COLLECTION OF INFORMATION.—The Cor2 poration may impose on covered financial companies 

3 such collection of information requirements as the 

4 Corporation deems necessary to carry out this sub5 section after the appointment of the Corporation as 

6 receiver under this title. 

7 (6) RULEMAKING.— 

8 (A) IN GENERAL.—The Corporation shall, 

9 in consultation with the Secretary and the 

10 Council, prescribe regulations to carry out this 

11 subsection. 

12 (B) EQUITABLE TREATMENT.—The regu13 lations prescribed under subparagraph (A) shall 

14 take into account the differences in risks posed 

15 to the financial stability of the United States by 

16 financial companies, the differences in the li17 ability structures of financial companies, and 

18 the different bases for other assessments that 

19 such financial companies may be required to 

20 pay, to ensure that assessed financial compa21 nies are treated equitably and that assessments 

22 under this subsection reflect such differences. 

23 (p) UNENFORCEABILITY OF CERTAIN AGREE24 MENTS.— 


sroberts on DSKH9S0YB1PROD with BILLS
291 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—No provision described in 

2 paragraph (2) shall be enforceable against or impose 

3 any liability on any person, as such enforcement or 

4 liability shall be contrary to public policy. 

5 (2) PROHIBITED PROVISIONS.—A provision de6 scribed in this paragraph is any term contained in 

7 any existing or future standstill, confidentiality, or 

8 other agreement that, directly or indirectly— 

9 (A) affects, restricts, or limits the ability 

10 of any person to offer to acquire or acquire; 

11 (B) prohibits any person from offering to 

12 acquire or acquiring; or 

13 (C) prohibits any person from using any 

14 previously disclosed information in connection 

15 with any such offer to acquire or acquisition of, 

16 all or part of any covered financial company, includ17 ing any liabilities, assets, or interest therein, in con18 nection with any transaction in which the Corpora19 tion exercises its authority under this title. 

20 (q) OTHER EXEMPTIONS.— 

21 (1) IN GENERAL.—When acting as a receiver 

22 under this title— 

23 (A) the Corporation, including its fran24 chise, its capital, reserves and surplus, and its 

25 income, shall be exempt from all taxation imVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00291 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
292 

•S 3217 AMDT 3739 

1 posed by any State, county, municipality, or 

2 local taxing authority, except that any real 

3 property of the Corporation shall be subject to 

4 State, territorial, county, municipal, or local 

5 taxation to the same extent according to its 

6 value as other real property is taxed, except 

7 that, notwithstanding the failure of any person 

8 to challenge an assessment under State law of 

9 the value of such property, such value, and the 

10 tax thereon, shall be determined as of the pe11 riod for which such tax is imposed; 

12 (B) no property of the Corporation shall be 

13 subject to levy, attachment, garnishment, fore14 closure, or sale without the consent of the Cor15 poration, nor shall any involuntary lien attach 

16 to the property of the Corporation; and 

17 (C) the Corporation shall not be liable for 

18 any amounts in the nature of penalties or fines, 

19 including those arising from the failure of any 

20 person to pay any real property, personal prop21 erty, probate, or recording tax or any recording 

22 or filing fees when due; and 

23 (D) the Corporation shall be exempt from 

24 all prosecution by the United States or any 

25 State, county, municipality, or local authority 


sroberts on DSKH9S0YB1PROD with BILLS
293 

•S 3217 AMDT 3739 

1 for any criminal offense arising under Federal, 

2 State, county, municipal, or local law, which 

3 was allegedly committed by the covered finan4 cial company, or persons acting on behalf of the 

5 covered financial company, prior to the appoint6 ment of the Corporation as receiver. 

7 (2) LIMITATION.—Paragraph (1) shall not 

8 apply with respect to any tax imposed (or other 

9 amount arising) under the Internal Revenue Code of 

10 1986. 

11 (r) CERTAIN SALES OF ASSETS PROHIBITED.— 

12 (1) PERSONS WHO ENGAGED IN IMPROPER CON13 DUCT WITH, OR CAUSED LOSSES TO, COVERED FI14 NANCIAL COMPANIES.—The Corporation shall pre15 scribe regulations which, at a minimum, shall pro16 hibit the sale of assets of a covered financial com17 pany by the Corporation to— 

18 (A) any person who— 

19 (i) has defaulted, or was a member of 

20 a partnership or an officer or director of a 

21 corporation that has defaulted, on 1 or 

22 more obligations, the aggregate amount of 

23 which exceeds $1,000,000, to such covered 

24 financial company; 


sroberts on DSKH9S0YB1PROD with BILLS
294 

•S 3217 AMDT 3739 

1 (ii) has been found to have engaged in 

2 fraudulent activity in connection with any 

3 obligation referred to in clause (i); and 

4 (iii) proposes to purchase any such 

5 asset in whole or in part through the use 

6 of the proceeds of a loan or advance of 

7 credit from the Corporation or from any 

8 covered financial company; 

9 (B) any person who participated, as an of10 ficer or director of such covered financial com11 pany or of any affiliate of such company, in a 

12 material way in any transaction that resulted in 

13 a substantial loss to such covered financial com14 pany; or 

15 (C) any person who has demonstrated a 

16 pattern or practice of defalcation regarding ob17 ligations to such covered financial company. 

18 (2) CONVICTED DEBTORS.—Except as provided 

19 in paragraph (3), a person may not purchase any 

20 asset of such institution from the receiver, if that 

21 person— 

22 (A) has been convicted of an offense under 

23 section 215, 656, 657, 1005, 1006, 1007, 1008, 

24 1014, 1032, 1341, 1343, or 1344 of title 18, 

25 United States Code, or of conspiring to commit 


sroberts on DSKH9S0YB1PROD with BILLS
295 

•S 3217 AMDT 3739 

1 such an offense, affecting any covered financial 

2 company; and 

3 (B) is in default on any loan or other ex4 tension of credit from such covered financial 

5 company which, if not paid, will cause substan6 tial loss to the Fund or the Corporation. 

7 (3) SETTLEMENT OF CLAIMS.—Paragraphs (1) 

8 and (2) shall not apply to the sale or transfer by the 

9 Corporation of any asset of any covered financial 

10 company to any person, if the sale or transfer of the 

11 asset resolves or settles, or is part of the resolution 

12 or settlement, of 1 or more claims that have been, 

13 or could have been, asserted by the Corporation 

14 against the person. 

15 (4) DEFINITION OF DEFAULT.—For purposes 

16 of this subsection, the term ‘‘default’’ means a fail17 ure to comply with the terms of a loan or other obli18 gation to such an extent that the property securing 

19 the obligation is foreclosed upon. 

20 SEC. 211. MISCELLANEOUS PROVISIONS. 

21 (a) CLARIFICATION OF PROHIBITION REGARDING

22 CONCEALMENT OF ASSETS FROM RECEIVER OR LIQUI23 DATING AGENT.—Section 1032(1) of title 18, United 

24 States Code, is amended by inserting ‘‘the Federal Deposit 

25 Insurance Corporation acting as receiver for a covered fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00295 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
296 

•S 3217 AMDT 3739 

1 nancial company, in accordance with title II of the Restor2 ing American Financial Stability Act of 2010,’’ before ‘‘or 

3 the National Credit’’. 

4 (b) CONFORMING AMENDMENT.—Section 1032 of 

5 title 18, United States Code, is amended in the section 

6 heading, by striking ‘‘of financial institution’’. 

7 (c) FEDERAL DEPOSIT INSURANCE CORPORATION

8 IMPROVEMENT ACT OF 1991.—Section 403(a) of the Fed9 eral Deposit Insurance Corporation Improvement Act of 

10 1991 (12 U.S.C. 4403(a)) is amended by inserting ‘‘sec11 tion 210(c) of the Restoring American Financial Stability 

12 Act of 2010, section 1367 of the Federal Housing Enter13 prises Financial Safety and Soundness Act of 1992 (12 

14 U.S.C. 4617(d)),’’ after ‘‘section 11(e) of the Federal De15 posit Insurance Act,’’. 

16 TITLE III—TRANSFER OF POW17 ERS TO THE COMPTROLLER 

18 OF THE CURRENCY, THE COR19 PORATION, AND THE BOARD 

20 OF GOVERNORS 

21 SEC. 300. SHORT TITLE. 

22 This title may be cited as the ‘‘Enhancing Financial 

23 Institution Safety and Soundness Act of 2010’’. 

24 SEC. 301. PURPOSES. 

25 The purposes of this title are— 


sroberts on DSKH9S0YB1PROD with BILLS
297 

•S 3217 AMDT 3739 

1 (1) to provide for the safe and sound operation 

2 of the banking system of the United States; 

3 (2) to preserve and protect the dual system of 

4 Federal and State-chartered depository institutions; 

5 (3) to ensure the fair and appropriate super6 vision of each depository institution, regardless of 

7 the size or type of charter of the depository institu8 tion; and 

9 (4) to streamline and rationalize the supervision 

10 of depository institutions and the holding companies 

11 of depository institutions. 

12 SEC. 302. DEFINITION. 

13 In this title, the term ‘‘transferred employee’’ means, 

14 as the context requires, an employee transferred to the 

15 Office of the Comptroller of the Currency or the Corpora16 tion under section 322. 

17 Subtitle A—Transfer of Powers and 

18 Duties 

19 SEC. 311. TRANSFER DATE. 

20 (a) TRANSFER DATE.—Except as provided in sub21 section (b), the term ‘‘transfer date’’ means the date that 

22 is 1 year after the date of enactment of this Act. 

23 (b) EXTENSION PERMITTED.— 

24 (1) NOTICE REQUIRED.—The Secretary, in con25 sultation with the Comptroller of the Currency, the 


sroberts on DSKH9S0YB1PROD with BILLS
298 

•S 3217 AMDT 3739 

1 Director of the Office of Thrift Supervision, the 

2 Chairman of the Board of Governors, and the Chair3 person of the Corporation, may extend the period 

4 under subsection (a) and designate a transfer date 

5 that is not later than 18 months after the date of 

6 enactment of this Act, if the Secretary transmits to 

7 the Committee on Banking, Housing, and Urban Af8 fairs of the Senate and the Committee on Financial 

9 Services of the House of Representatives— 

10 (A) a written determination that com11 mencement of the orderly process to implement 

12 this title is not feasible by the date that is 1 

13 year after the date of enactment of this Act; 

14 (B) an explanation of why an extension is 

15 necessary to commence the process of orderly 

16 implementation of this title; 

17 (C) the transfer date designated under this 

18 subsection; and 

19 (D) a description of the steps that will be 

20 taken to initiate the process of an orderly and 

21 timely implementation of this title within the 

22 extended time period. 

23 (2) PUBLICATION OF NOTICE.—Not later than 

24 270 days after the date of enactment of this Act, the 

25 Secretary shall publish in the Federal Register noVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00298 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
299 

•S 3217 AMDT 3739 

1 tice of any transfer date designated under paragraph 

2 (1). 

3 SEC. 312. POWERS AND DUTIES TRANSFERRED. 

4 (a) EFFECTIVE DATE.—This section, and the amend5 ments made by this section, shall take effect on the trans6 fer date. 

7 (b) FUNCTIONS OF THE OFFICE OF THRIFT SUPER8 VISION.— 

9 (1) SAVINGS AND LOAN HOLDING COMPANY

10 FUNCTIONS TRANSFERRED.— 

11 (A) BOARD OF GOVERNORS.—There are 

12 transferred to the Board of Governors all func13 tions of the Office of Thrift Supervision and the 

14 Director of the Office of Thrift Supervision (in15 cluding the authority to issue orders) relating 

16 to— 

17 (i) the supervision of— 

18 (I) any savings and loan holding 

19 company— 

20 (aa) having 

21 $50,000,000,000 or more in total 

22 consolidated assets; or 

23 (bb) that is a foreign bank; 

24 and 


sroberts on DSKH9S0YB1PROD with BILLS
300 

•S 3217 AMDT 3739 

1 (II) any subsidiary (other than a 

2 depository institution) of a savings 

3 and loan holding company described 

4 in subclause (I); and 

5 (ii) all rulemaking authority of the Of6 fice of Thrift Supervision and the Director 

7 of the Office of Thrift Supervision relating 

8 to savings and loan holding companies. 

9 (B) COMPTROLLER OF THE CURRENCY.— 

10 Except as provided in subparagraph (A), there 

11 are transferred to the Office of the Comptroller 

12 of the Currency all functions of the Office of 

13 Thrift Supervision and the Director of the Of14 fice of Thrift Supervision (including the author15 ity to issue orders) relating to the supervision 

16 of— 

17 (i) any savings and loan holding com18 pany (other than a foreign bank)— 

19 (I) having less than 

20 $50,000,000,000 in total consolidated 

21 assets; and 

22 (II) having— 

23 (aa) a subsidiary that is an 

24 insured depository institution, if 

25 all such insured depository instiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00300 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
301 

•S 3217 AMDT 3739 

1 tutions are Federal depository in2 stitutions; or 

3 (bb) a subsidiary that is a 

4 Federal depository institution 

5 and a subsidiary that is a State 

6 depository institution, if the total 

7 consolidated assets of all subsidi8 aries that are Federal depository 

9 institutions exceed the total con10 solidated assets of all subsidiaries 

11 that are State depository institu12 tions; and 

13 (ii) any subsidiary (other than a de14 pository institution) of a savings and loan 

15 holding company described in clause (i). 

16 (C) CORPORATION.—Except as provided in 

17 subparagraph (A), there are transferred to the 

18 Corporation all functions of the Office of Thrift 

19 Supervision and the Director of the Office of 

20 Thrift Supervision (including the authority to 

21 issue orders) relating to the supervision of— 

22 (i) any savings and loan holding com23 pany (other than a foreign bank)— 


sroberts on DSKH9S0YB1PROD with BILLS
302 

•S 3217 AMDT 3739 

1 (I) having less than 

2 $50,000,000,000 in total consolidated 

3 assets; and 

4 (II) having— 

5 (aa) a subsidiary that is an 

6 insured depository institution, if 

7 all such insured depository insti8 tutions are State depository insti9 tutions; or 

10 (bb) a subsidiary that is a 

11 Federal depository institution 

12 and a subsidiary that is a State 

13 depository institution, if the total 

14 consolidated assets of all subsidi15 aries that are State depository 

16 institutions exceed the total con17 solidated assets of all subsidiaries 

18 that are Federal depository insti19 tutions; and 

20 (ii) any subsidiary (other than a de21 pository institution) of a savings and loan 

22 holding company described in clause (i). 

23 (2) ALL OTHER FUNCTIONS TRANSFERRED.— 

24 (A) BOARD OF GOVERNORS.—All rule25 making authority of the Office of Thrift SuperVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00302 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
303 

•S 3217 AMDT 3739 

1 vision and the Director of the Office of Thrift 

2 Supervision under section 11 of the Home Own3 ers’ Loan Act (12 U.S.C. 1468) relating to 

4 transactions with affiliates and extensions of 

5 credit to executive officers, directors, and prin6 cipal shareholders is transferred to the Board 

7 of Governors. 

8 (B) COMPTROLLER OF THE CURRENCY.— 

9 Except as provided in subparagraph (A), there 

10 are transferred to the Comptroller of the Cur11 rency all functions of the Office of Thrift Su12 pervision and the Director of the Office of 

13 Thrift Supervision relating to Federal savings 

14 associations. 

15 (C) CORPORATION.—Except as provided in 

16 paragraph (1), all functions of the Office of 

17 Thrift Supervision and the Director of the Of18 fice of Thrift Supervision relating to State sav19 ings associations are transferred to the Cor20 poration. 

21 (D) COMPTROLLER OF THE CURRENCY

22 AND THE CORPORATION.—All rulemaking au23 thority of the Office of Thrift Supervision and 

24 the Director of the Office of Thrift Supervision 

25 relating to savings associations is transferred 


sroberts on DSKH9S0YB1PROD with BILLS
304 

•S 3217 AMDT 3739 

1 to, and shall be exercised jointly by, the Comp2 troller of the Currency and the Corporation. 

3 (c) CERTAIN FUNCTIONS OF THE BOARD OF GOV4 ERNORS.— 

5 (1) BANK HOLDING COMPANY FUNCTIONS

6 TRANSFERRED.— 

7 (A) COMPTROLLER OF THE CURRENCY.— 

8 Except as provided in subparagraph (C), there 

9 are transferred to the Office of the Comptroller 

10 of the Currency all functions of the Board of 

11 Governors (including any Federal reserve bank) 

12 relating to the supervision of— 

13 (i) any bank holding company (other 

14 than a foreign bank)— 

15 (I) having less than 

16 $50,000,000,000 in total consolidated 

17 assets; and 

18 (II) having— 

19 (aa) a subsidiary that is an 

20 insured depository institution, if 

21 all such insured depository insti22 tutions are Federal depository in23 stitutions; or 

24 (bb) a subsidiary that is a 

25 Federal depository institution 


sroberts on DSKH9S0YB1PROD with BILLS
305 

•S 3217 AMDT 3739 

1 and a subsidiary that is a State 

2 depository institution, if the total 

3 consolidated assets of all subsidi4 aries that are Federal depository 

5 institutions exceed the total con6 solidated assets of all subsidiaries 

7 that are State depository institu8 tions; and 

9 (ii) any subsidiary (other than a de10 pository institution) of a bank holding 

11 company that is described in clause (i). 

12 (B) CORPORATION.—Except as provided in 

13 subparagraph (C), there are transferred to the 

14 Corporation all functions of the Board of Gov15 ernors (including any Federal reserve bank) re16 lating to the supervision of— 

17 (i) any bank holding company (other 

18 than a foreign bank)— 

19 (I) having less than 

20 $50,000,000,000 in total consolidated 

21 assets; and 

22 (II) having— 

23 (aa) a subsidiary that is an 

24 insured depository institution, if 

25 all such insured depository instiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00305 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
306 

•S 3217 AMDT 3739 

1 tutions are State depository insti2 tutions; or 

3 (bb) a subsidiary that is a 

4 Federal depository institution 

5 and a subsidiary that is a State 

6 depository institution, if the total 

7 consolidated assets of all subsidi8 aries that are State depository 

9 institutions exceed the total con10 solidated assets of all subsidiaries 

11 that are Federal depository insti12 tutions; and 

13 (ii) any subsidiary (other than a de14 pository institution) of a bank holding 

15 company that is described in clause (i). 

16 (C) RULEMAKING AUTHORITY.—No rule17 making authority of the Board of Governors is 

18 transferred to the Office of the Comptroller of 

19 the Currency or the Corporation under this 

20 paragraph. 

21 (2) OTHER FUNCTIONS TRANSFERRED.—There 

22 are transferred to the Corporation all functions 

23 (other than rulemaking authority under the Federal 

24 Reserve Act) of the Board of Governors (and any 


sroberts on DSKH9S0YB1PROD with BILLS
307 

•S 3217 AMDT 3739 

1 Federal reserve bank) relating to the supervision of 

2 insured State member banks. 

3 (d) CONFORMING AMENDMENTS.— 

4 (1) FEDERAL DEPOSIT INSURANCE ACT.—Sec5 tion 3(q) of the Federal Deposit Insurance Act (12 

6 U.S.C. 1813(q)) is amended by striking paragraphs 

7 (1) through (4) and inserting the following: 

8 ‘‘(1) the Office of the Comptroller of the Cur9 rency, in the case of— 

10 ‘‘(A) any national banking association; 

11 ‘‘(B) any Federal branch or agency of a 

12 foreign bank; 

13 ‘‘(C) any bank holding company (other 

14 than a foreign bank)— 

15 ‘‘(i) having less than $50,000,000,000 

16 in total consolidated assets; and 

17 ‘‘(ii) having— 

18 ‘‘(I) a subsidiary that is an in19 sured depository institution, if all 

20 such insured depository institutions 

21 are Federal depository institutions; or 

22 ‘‘(II) a subsidiary that is a Fed23 eral depository institution and a sub24 sidiary that is a State depository in25 stitution, if the total consolidated asVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00307 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
308 

•S 3217 AMDT 3739 

1 sets of all subsidiaries that are Fed2 eral depository institutions exceed the 

3 total consolidated assets of all subsidi4 aries that are State depository institu5 tions; 

6 ‘‘(D) any subsidiary (other than a deposi7 tory institution) of a bank holding company 

8 that is described in subparagraph (C); 

9 ‘‘(E) any Federal savings association; 

10 ‘‘(F) any savings and loan holding com11 pany (other than a foreign bank)— 

12 ‘‘(i) having less than $50,000,000,000 

13 in total consolidated assets; and 

14 ‘‘(ii) having— 

15 ‘‘(I) a subsidiary that is an in16 sured depository institution, if all 

17 such insured depository institutions 

18 are Federal depository institutions; or 

19 ‘‘(II) a subsidiary that is a Fed20 eral depository institution and a sub21 sidiary that is a State depository in22 stitution, if the total consolidated as23 sets of all subsidiaries that are Fed24 eral depository institutions exceed the 

25 total consolidated assets of all subsidiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00308 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
309 

•S 3217 AMDT 3739 

1 aries that are State depository institu2 tions; and 

3 ‘‘(G) any subsidiary (other than a deposi4 tory institution) of a savings and loan holding 

5 company that is described in subparagraph (F); 

6 ‘‘(2) the Federal Deposit Insurance Corpora7 tion, in the case of— 

8 ‘‘(A) any insured State bank; 

9 ‘‘(B) any foreign bank having an insured 

10 branch; 

11 ‘‘(C) any State savings association; 

12 ‘‘(D) any bank holding company (other 

13 than a foreign bank)— 

14 ‘‘(i) having less than $50,000,000,000 

15 in total consolidated assets; and 

16 ‘‘(ii) having— 

17 ‘‘(I) a subsidiary that is an in18 sured depository institution, if all 

19 such insured depository institutions 

20 are State depository institutions; or 

21 ‘‘(II) a subsidiary that is a Fed22 eral depository institution and a sub23 sidiary that is a State depository in24 stitution, if the total consolidated as25 sets of all subsidiaries that are State 


sroberts on DSKH9S0YB1PROD with BILLS
310 

•S 3217 AMDT 3739 

1 depository institutions exceed the total 

2 consolidated assets of all subsidiaries 

3 that are Federal depository institu4 tions; 

5 ‘‘(E) any subsidiary (other than a deposi6 tory institution) of a bank holding company 

7 that is described in subparagraph (D); 

8 ‘‘(F) any savings and loan holding com9 pany (other than a foreign bank)— 

10 ‘‘(i) having less than $50,000,000,000 

11 in total consolidated assets; and 

12 ‘‘(ii) having— 

13 ‘‘(I) a subsidiary that is an in14 sured depository institution, if all 

15 such insured depository institutions 

16 are State depository institutions; or 

17 ‘‘(II) a subsidiary that is a Fed18 eral depository institution and a sub19 sidiary that is a State depository in20 stitution, if the total consolidated as21 sets of all subsidiaries that are State 

22 depository institutions exceed the total 

23 consolidated assets of all subsidiaries 

24 that are Federal depository institu25 tions; and 


sroberts on DSKH9S0YB1PROD with BILLS
311 

•S 3217 AMDT 3739 

1 ‘‘(G) any subsidiary (other than a deposi2 tory institution) of a savings and loan holding 

3 company that is described in subparagraph (F); 

4 ‘‘(3) the Board of Governors of the Federal Re5 serve System, in the case of— 

6 ‘‘(A) any noninsured State member bank; 

7 ‘‘(B) any branch or agency of a foreign 

8 bank with respect to any provision of the Fed9 eral Reserve Act which is made applicable 

10 under the International Banking Act of 1978; 

11 ‘‘(C) any foreign bank which does not op12 erate an insured branch; 

13 ‘‘(D) any agency or commercial lending 

14 company other than a Federal agency; 

15 ‘‘(E) supervisory or regulatory proceedings 

16 arising from the authority given to the Board 

17 of Governors under section 7(c)(1) of the Inter18 national Banking Act of 1978, including such 

19 proceedings under the Financial Institutions 

20 Supervisory Act of 1966; 

21 ‘‘(F) any bank holding company having 

22 total consolidated assets of $50,000,000,000 or 

23 more, any bank holding company that is a for24 eign bank, and any subsidiary (other than a deVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00311 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
312 

•S 3217 AMDT 3739 

1 pository institution) of such a bank holding 

2 company; and 

3 ‘‘(G) any savings and loan holding com4 pany having total consolidated assets of 

5 $50,000,000,000 or more, any savings and loan 

6 holding company that is a foreign bank, and 

7 any subsidiary (other than a depository institu8 tion) of such a savings and loan holding com9 pany.’’. 

10 (2) CERTAIN REFERENCES IN THE BANK HOLD11 ING COMPANY ACT OF 1956.— 

12 (A) COMPTROLLER OF THE CURRENCY.— 

13 On or after the transfer date, in the case of a 

14 bank holding company described in section 

15 3(q)(1)(C) of the Federal Deposit Insurance 

16 Act, as amended by this Act, any reference in 

17 the Bank Holding Company Act of 1956 (12 

18 U.S.C. 1841 et seq.) to the Board of Governors 

19 shall be deemed to be a reference to the Office 

20 of the Comptroller of the Currency. 

21 (B) CORPORATION.—On or after the trans22 fer date, in the case of a bank holding company 

23 described in section 3(q)(2)(D) of the Federal 

24 Deposit Insurance Act, as amended by this Act, 

25 any reference in the Bank Holding Company 


sroberts on DSKH9S0YB1PROD with BILLS
313 

•S 3217 AMDT 3739 

1 Act of 1956 (12 U.S.C. 1841 et seq.) to the 

2 Board of Governors shall be deemed to be a ref3 erence to the Corporation. 

4 (C) RULE OF CONSTRUCTION.—Notwith5 standing subparagraph (A) or (B), the Board of 

6 Governors shall retain all rulemaking authority 

7 under the Bank Holding Company Act of 1956 

8 (12 U.S.C. 1841 et seq.). 

9 (3) CONSULTATION IN HOLDING COMPANY

10 RULEMAKING.— 

11 (A) BANK HOLDING COMPANIES.—Section 

12 5 of the Bank Holding Company Act of 1956 

13 (12 U.S.C. 1844) is amended by adding at the 

14 end the following: 

15 ‘‘(h) CONSULTATION IN RULEMAKING.—Before pro16 posing or adopting regulations under this Act that apply 

17 to bank holding companies having less than 

18 $50,000,000,000 in total consolidated assets, the Board 

19 of Governors shall consult with the Comptroller of the 

20 Currency and the Federal Deposit Insurance Corporation 

21 as to the terms of such regulations.’’. 

22 (B) SAVINGS AND LOAN HOLDING COMPA23 NIES.— 

24 (i) HOME OWNERS’ LOAN ACT.—Sec25 tion 10 of the Home Owners’ Loan Act 


sroberts on DSKH9S0YB1PROD with BILLS
314 

•S 3217 AMDT 3739 

1 (12 U.S.C. 1467a) is amended by adding 

2 at the end the following: 

3 ‘‘(u) CONSULTATION IN RULEMAKING.—Before pro4 posing or adopting regulations under this section that 

5 apply to savings and loan holding companies having less 

6 than $50,000,000,000 in total consolidated assets, the 

7 Board of Governors shall consult with the Comptroller of 

8 the Currency and the Federal Deposit Insurance Corpora9 tion as to the terms of such regulations.’’. 

10 (ii) FEDERAL DEPOSIT INSURANCE

11 ACT.—Section 19 of the Federal Deposit 

12 Insurance Act (12 U.S.C. 1829) is amend13 ed— 

14 (I) in subsection (d)(2), by in15 serting ‘‘, in consultation with the 

16 Corporation and the Comptroller of 

17 the Currency,’’ after ‘‘System’’; and 

18 (II) in subsection (e)(2), by strik19 ing ‘‘Director of the Office of Thrift 

20 Supervision’’ and inserting ‘‘Board of 

21 Governors of the Federal Reserve Sys22 tem, in consultation with the Corpora23 tion and the Comptroller of the Cur24 rency,’’. 

25 (4) FEDERAL DEPOSIT INSURANCE ACT.— 


sroberts on DSKH9S0YB1PROD with BILLS
315 

•S 3217 AMDT 3739 

1 (A) APPLICATION.—Section 8(b)(3) of the 

2 Federal Deposit Insurance Act (12 U.S.C. 

3 1818(b)(3)) is amended to read as follows: 

4 ‘‘(3) APPLICATION TO BANK HOLDING COMPANIES, 

5 SAVINGS AND LOAN HOLDING COMPANIES, AND EDGE

6 AND AGREEMENT CORPORATIONS.— 

7 ‘‘(A) APPLICATION.—This subsection, sub8 sections (c) through (s) and subsection (u) of this 

9 section, and section 50 shall apply to— 

10 ‘‘(i) any bank holding company, and any 

11 subsidiary (other than a bank) of a bank hold12 ing company, as those terms are defined in sec13 tion 2 of the Bank Holding Company Act of 

14 1956 (12 U.S.C. 1841), as if such company or 

15 subsidiary was an insured depository institution 

16 for which the appropriate Federal banking 

17 agency for the bank holding company was the 

18 appropriate Federal banking agency; 

19 ‘‘(ii) any savings and loan holding com20 pany, and any subsidiary (other than a deposi21 tory institution) of a savings and loan holding 

22 company, as those terms are defined in section 

23 10 of the Home Owners’ Loan Act (12 U.S.C. 

24 1467a), as if such company or subsidiary was 

25 an insured depository institution for which the 


sroberts on DSKH9S0YB1PROD with BILLS
316 

•S 3217 AMDT 3739 

1 appropriate Federal banking agency for the sav2 ings and loan holding company was the appro3 priate Federal banking agency; and 

4 ‘‘(iii) any organization organized and oper5 ated under section 25A of the Federal Reserve 

6 Act (12 U.S.C. 611 et seq.) or operating under 

7 section 25 of the Federal Reserve Act (12 

8 U.S.C. 601 et seq.) and any noninsured State 

9 member bank, as if such organization was a 

10 bank holding company for which the Board of 

11 Governors of the Federal Reserve System was 

12 the appropriate Federal banking agency. 

13 ‘‘(B) RULE OF CONSTRUCTION.—Nothing in 

14 this paragraph may be construed to alter or affect 

15 the authority of an appropriate Federal banking 

16 agency to initiate enforcement proceedings, issue di17 rectives, or take other remedial action under any 

18 other provision of law.’’. 

19 (B) CONFORMING AMENDMENT.—Section 

20 8(b)(9) of the Federal Deposit Insurance Act 

21 (12 U.S.C. 1818(b)(9)) is amended to read as 

22 follows: 

23 ‘‘(9) [Reserved].’’. 

24 (e) DETERMINATION OF TOTAL CONSOLIDATED AS25 SETS.— 


sroberts on DSKH9S0YB1PROD with BILLS
317 

•S 3217 AMDT 3739 

1 (1) REGULATIONS.— 

2 (A) IN GENERAL.—Not later than 180 

3 days after the date of enactment of this Act, 

4 the Office of the Comptroller of the Currency, 

5 the Corporation, and the Board of Governors, 

6 in order to avoid disruptive transfers of regu7 latory responsibility, shall issue joint regula8 tions that specify— 

9 (i) the source of data for determining 

10 the total consolidated assets of a deposi11 tory institution, bank holding company, or 

12 savings and loan holding company for pur13 poses of this Act, and the amendments 

14 made by this Act, including the amend15 ments to section 3(q) of the Federal De16 posit Insurance Act (12 U.S.C. 1813(q)); 

17 and 

18 (ii) the interval and frequency at 

19 which the total consolidated assets of a de20 pository institution, bank holding company, 

21 or savings and loan holding company will 

22 be determined. 

23 (B) CONTENT.—The regulations issued 

24 under subparagraph (A)— 


sroberts on DSKH9S0YB1PROD with BILLS
318 

•S 3217 AMDT 3739 

1 (i) shall use information contained in 

2 the reports described in paragraph (2), 

3 other regulatory reports, audited financial 

4 statements, or other comparable sources; 

5 (ii) shall establish the frequency with 

6 which the total consolidated assets of de7 pository institutions, bank holding compa8 nies, and savings and loan companies are 

9 determined, at an interval that— 

10 (I) avoids undue disruption in 

11 regulatory oversight; 

12 (II) facilitates nondisruptive 

13 transfers of regulatory responsibility; 

14 and 

15 (III) is not shorter than 2 years; 

16 and 

17 (iii) may provide for more frequent 

18 determinations of the total consolidated as19 sets of a depository institution, bank hold20 ing company, or savings and loan holding 

21 company, to take into account a trans22 action outside the ordinary course of busi23 ness, including a merger, acquisition, or 

24 other circumstance, as determined jointly 

25 by the Office of the Comptroller of the 


sroberts on DSKH9S0YB1PROD with BILLS
319 

•S 3217 AMDT 3739 

1 Currency, the Corporation, and the Board 

2 of Governors, by rule. 

3 (2) INTERIM PROVISIONS.—Until the date on 

4 which final regulations issued under paragraph (1) 

5 are effective, for purposes this Act, and the amend6 ments made by this Act, including the amendments 

7 to section 3(q) of the Federal Deposit Insurance Act 

8 (12 U.S.C. 1813(q)), the total consolidated assets 

9 of— 

10 (A) a depository institution shall be deter11 mined by reference to the total consolidated as12 sets reported in the most recent Consolidated 

13 Report of Income and Condition or Thrift Fi14 nancial Report (or any successor thereto) filed 

15 by the depository institution with the Corpora16 tion or the Office of Thrift Supervision before 

17 the transfer date; 

18 (B) a bank holding company shall be de19 termined by reference to the total consolidated 

20 assets reported in the most recent Consolidated 

21 Financial Statements for Bank Holding Compa22 nies (commonly referred to as the ‘‘FR Y–9C’’, 

23 or any successor thereto) filed by the bank 

24 holding company with the Board of Governors 

25 before the transfer date; and 


sroberts on DSKH9S0YB1PROD with BILLS
320 

•S 3217 AMDT 3739 

1 (C) a savings and loan holding company 

2 shall be determined by reference to the total 

3 consolidated assets reported in the applicable 

4 schedule of the most recent Thrift Financial 

5 Report (or any successor thereto) filed by the 

6 savings and loan holding company with the Of7 fice of Thrift Supervision before the transfer 

8 date. 

9 (f) CONSUMER PROTECTION.—Nothing in this sec10 tion may be construed to limit or otherwise affect the 

11 transfer of powers under title X. 

12 SEC. 313. ABOLISHMENT. 

13 Effective 90 days after the transfer date, the Office 

14 of Thrift Supervision and the position of Director of the 

15 Office of Thrift Supervision are abolished. 

16 SEC. 314. AMENDMENTS TO THE REVISED STATUTES. 

17 (a) AMENDMENT TO SECTION 324.—Section 324 of 

18 the Revised Statutes of the United States (12 U.S.C. 1) 

19 is amended to read as follows: 

20 ‘‘SEC. 324. COMPTROLLER OF THE CURRENCY. 

21 ‘‘(a) OFFICE OF THE COMPTROLLER OF THE CUR22 RENCY ESTABLISHED.—There is established in the De23 partment of the Treasury a bureau to be known as the 

24 ‘Office of the Comptroller of the Currency’ which is 

25 charged with assuring the safety and soundness of, and 


sroberts on DSKH9S0YB1PROD with BILLS
321 

•S 3217 AMDT 3739 

1 compliance with laws and regulations, fair access to finan2 cial services, and fair treatment of customers by, the insti3 tutions and other persons subject to its jurisdiction. 

4 ‘‘(b) COMPTROLLER OF THE CURRENCY.— 

5 ‘‘(1) IN GENERAL.—The chief officer of the Of6 fice of the Comptroller of the Currency shall be 

7 known as the Comptroller of the Currency. The 

8 Comptroller of the Currency shall perform the duties 

9 of the Comptroller of the Currency under the gen10 eral direction of the Secretary of the Treasury. The 

11 Secretary of the Treasury may not delay or prevent 

12 the issuance of any rule or the promulgation of any 

13 regulation by the Comptroller of the Currency, and 

14 may not intervene in any matter or proceeding be15 fore the Comptroller of the Currency (including 

16 agency enforcement actions), unless otherwise spe17 cifically provided by law. 

18 ‘‘(2) ADDITIONAL AUTHORITY.—The Comp19 troller of the Currency shall have the same authority 

20 with respect to functions transferred to the Comp21 troller of the Currency under the Enhancing Finan22 cial Institution Safety and Soundness Act of 2010 

23 (including matters that were within the jurisdiction 

24 of the Director of the Office of Thrift Supervision or 

25 the Office of Thrift Supervision on the day before 


sroberts on DSKH9S0YB1PROD with BILLS
322 

•S 3217 AMDT 3739 

1 the transfer date under that Act) as was vested in 

2 the Director of the Office of Thrift Supervision on 

3 the transfer date under that Act.’’. 

4 (b) AMENDMENT TO SECTION 329.—Section 329 of 

5 the Revised Statutes of the United States (12 U.S.C. 11) 

6 is amended by inserting before the period at the end the 

7 following: ‘‘or any Federal savings association’’. 

8 (c) EFFECTIVE DATE.—This section, and the amend9 ments made by this section, shall take effect on the trans10 fer date. 

11 SEC. 315. FEDERAL INFORMATION POLICY. 

12 Section 3502(5) of title 44, United States Code, is 

13 amended by inserting ‘‘Office of the Comptroller of the 

14 Currency,’’ after ‘‘the Securities and Exchange Commis15 sion,’’. 

16 SEC. 316. SAVINGS PROVISIONS. 

17 (a) OFFICE OF THRIFT SUPERVISION.— 

18 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA19 TIONS NOT AFFECTED.—Sections 312(b) and 313 

20 shall not affect the validity of any right, duty, or ob21 ligation of the United States, the Director of the Of22 fice of Thrift Supervision, the Office of Thrift Su23 pervision, or any other person, that existed on the 

24 day before the transfer date. 


sroberts on DSKH9S0YB1PROD with BILLS
323 

•S 3217 AMDT 3739 

1 (2) CONTINUATION OF SUITS.—This title shall 

2 not abate any action or proceeding commenced by or 

3 against the Director of the Office of Thrift Super4 vision or the Office of Thrift Supervision before the 

5 transfer date, except that, for any action or pro6 ceeding arising out of a function of the Director of 

7 the Office of Thrift Supervision or the Office of 

8 Thrift Supervision that is transferred to the Comp9 troller of the Currency, the Office of the Comptroller 

10 of the Currency, the Chairperson of the Corporation, 

11 the Corporation, the Chairman of the Board of Gov12 ernors, or the Board of Governors by this subtitle, 

13 the Comptroller of the Currency, the Office of the 

14 Comptroller of the Currency, the Chairperson of the 

15 Corporation, the Corporation, the Chairman of the 

16 Board of Governors, or the Board of Governors shall 

17 be substituted for the Director of the Office of 

18 Thrift Supervision or the Office of Thrift Super19 vision, as appropriate, as a party to the action or 

20 proceeding as of the transfer date. 

21 (b) BOARD OF GOVERNORS.— 

22 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA23 TIONS NOT AFFECTED.—Section 312(c) shall not af24 fect the validity of any right, duty, or obligation of 

25 the United States, the Board of Governors, any FedVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00323 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
324 

•S 3217 AMDT 3739 

1 eral reserve bank, or any other person, that existed 

2 on the day before the transfer date. 

3 (2) CONTINUATION OF SUITS.—This title shall 

4 not abate any action or proceeding commenced by or 

5 against the Board of Governors or a Federal reserve 

6 bank before the transfer date, except that, for any 

7 action or proceeding arising out of a function of the 

8 Board of Governors or a Federal reserve bank trans9 ferred to the Comptroller of the Currency, the Office 

10 of the Comptroller of the Currency, the Chairperson 

11 of the Corporation, or the Corporation by this sub12 title, the Comptroller of the Currency, the Office of 

13 the Comptroller of the Currency, the Chairperson of 

14 the Corporation, or the Corporation shall be sub15 stituted for the Board of Governors or the Federal 

16 reserve bank, as appropriate, as a party to the ac17 tion or proceeding, as of the transfer date. 

18 (c) CONTINUATION OF EXISTING ORDERS, RESOLU19 TIONS, DETERMINATIONS, AGREEMENTS, REGULATIONS, 

20 AND OTHER MATERIALS.— 

21 (1) OFFICE OF THRIFT SUPERVISION.—All or22 ders, resolutions, determinations, agreements, regu23 lations, interpretative rules, other interpretations, 

24 guidelines, procedures, and other advisory materials 

25 that have been issued, made, prescribed, or allowed 


sroberts on DSKH9S0YB1PROD with BILLS
325 

•S 3217 AMDT 3739 

1 to become effective by the Office of Thrift Super2 vision, or by a court of competent jurisdiction, in the 

3 performance of functions of the Office of Thrift Su4 pervision that are transferred by this subtitle and 

5 that are in effect on the day before the transfer 

6 date, shall continue in effect according to the terms 

7 of those materials, and shall be enforceable by or 

8 against the Office of the Comptroller of the Cur9 rency, the Corporation, or the Board of Governors, 

10 as appropriate, until modified, terminated, set aside, 

11 or superseded in accordance with applicable law by 

12 the Office of the Comptroller of the Currency, the 

13 Corporation, or the Board of Governors, as appro14 priate, by any court of competent jurisdiction, or by 

15 operation of law. 

16 (2) BOARD OF GOVERNORS.—All orders, resolu17 tions, determinations, agreements, regulations, inter18 pretative rules, other interpretations, guidelines, pro19 cedures, and other advisory materials, that have 

20 been issued, made, prescribed, or allowed to become 

21 effective by the Board of Governors, or by a court 

22 of competent jurisdiction, in the performance of 

23 functions of the Board of Governors that are trans24 ferred by this subtitle and that are in effect on the 

25 day before the transfer date, shall continue in effect 


sroberts on DSKH9S0YB1PROD with BILLS
326 

•S 3217 AMDT 3739 

1 according to the terms of those materials, and shall 

2 be enforceable by or against the Office of the Comp3 troller of the Currency or the Corporation, as appro4 priate, until modified, terminated, set aside, or su5 perseded in accordance with applicable law by the 

6 Office of the Comptroller of the Currency or the 

7 Corporation, as appropriate, by any court of com8 petent jurisdiction, or by operation of law. 

9 (d) IDENTIFICATION OF REGULATIONS CONTIN10 UED.— 

11 (1) BY THE OFFICE OF THE COMPTROLLER OF

12 THE CURRENCY.—Not later than the transfer date, 

13 the Office of the Comptroller of the Currency 

14 shall— 

15 (A) in consultation with the Corporation, 

16 identify the regulations continued under sub17 section (c) that will be enforced by the Office 

18 of the Comptroller of the Currency; and 

19 (B) publish a list of such regulations in the 

20 Federal Register. 

21 (2) BY THE CORPORATION.—Not later than the 

22 transfer date, the Corporation shall— 

23 (A) in consultation with the Office of the 

24 Comptroller of the Currency, identify the reguVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00326 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
327 

•S 3217 AMDT 3739 

1 lations continued under subsection (c) that will 

2 be enforced by the Corporation; and 

3 (B) publish a list of such regulations in the 

4 Federal Register. 

5 (3) BY THE BOARD OF GOVERNORS.—Not later 

6 than the transfer date, the Board of Governors 

7 shall— 

8 (A) in consultation with the Office of the 

9 Comptroller of the Currency and the Corpora10 tion, identify the regulations continued under 

11 subsection (c) that will be enforced by the 

12 Board of Governors; and 

13 (B) publish a list of such regulations in the 

14 Federal Register. 

15 (e) STATUS OF REGULATIONS PROPOSED OR NOT

16 YET EFFECTIVE.— 

17 (1) PROPOSED REGULATIONS.—Any proposed 

18 regulation of the Office of Thrift Supervision or the 

19 Board of Governors, which that agency, in per20 forming functions transferred by this subtitle, has 

21 proposed before the transfer date, but has not pub22 lished as a final regulation before that date, shall be 

23 deemed to be a proposed regulation of the Office of 

24 the Comptroller of the Currency, the Corporation, or 


sroberts on DSKH9S0YB1PROD with BILLS
328 

•S 3217 AMDT 3739 

1 the Board of Governors, as appropriate, according to 

2 its terms. 

3 (2) REGULATIONS NOT YET EFFECTIVE.—Any 

4 interim or final regulation of the Office of Thrift Su5 pervision or the Board of Governors, which that 

6 agency, in performing functions transferred by this 

7 subtitle, has published before the transfer date, but 

8 which has not become effective before that date, 

9 shall become effective as a regulation of the Office 

10 of the Comptroller of the Currency, the Corporation, 

11 or the Board of Governors, as appropriate, according 

12 to its terms. 

13 SEC. 317. REFERENCES IN FEDERAL LAW TO FEDERAL 

14 BANKING AGENCIES. 

15 (a) DIRECTOR OF THE OFFICE OF THRIFT SUPER16 VISION AND THE OFFICE OF THRIFT SUPERVISION.—Ex17 cept as provided in section 312(d)(2), on and after the 

18 transfer date, any reference in Federal law to the Director 

19 of the Office of Thrift Supervision or the Office of Thrift 

20 Supervision, in connection with any function of the Direc21 tor of the Office of Thrift Supervision or the Office of 

22 Thrift Supervision transferred under section 312(b) or 

23 any other provision of this subtitle, shall be deemed to be 

24 a reference to the Comptroller of the Currency, the Office 

25 of the Comptroller of the Currency, the Chairperson of 


sroberts on DSKH9S0YB1PROD with BILLS
329 

•S 3217 AMDT 3739 

1 the Corporation, the Corporation, the Chairman of the 

2 Board of Governors, or the Board of Governors, as appro3 priate. 

4 (b) BOARD OF GOVERNORS.—Except as provided in 

5 section 312(d)(2), on and after the transfer date, any ref6 erence in Federal law to the Board of Governors or any 

7 Federal reserve bank, in connection with any function of 

8 the Board of Governors or any Federal reserve bank 

9 transferred under section 312(c) or any other provision 

10 of this subtitle, shall be deemed to be a reference to the 

11 Comptroller of the Currency, the Office of the Comptroller 

12 of the Currency, the Chairperson of the Corporation, or 

13 the Corporation, as appropriate. 

14 SEC. 318. FUNDING. 

15 (a) FUNDING OF OFFICE OF THE COMPTROLLER OF

16 THE CURRENCY.— 

17 (1) AUTHORITY TO COLLECT ASSESSMENTS, 

18 FEES, AND OTHER CHARGES, AND TO RECEIVE

19 TRANSFERRED FUNDS.—Chapter 4 of title LXII of 

20 the Revised Statutes is amended by inserting after 

21 section 5240 (12 U.S.C. 481, 482) the following: 

22 ‘‘SEC. 5240A. The Comptroller of the Currency may 

23 collect an assessment, fee, or other charge from any entity 

24 described in section 3(q)(1) of the Federal Deposit Insur25 ance Act (12 U.S.C. 1813(q)(1)), as the Comptroller deVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00329 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
330 

•S 3217 AMDT 3739 

1 termines is necessary or appropriate to carry out the re2 sponsibilities of the Office of the Comptroller of the Cur3 rency. The Comptroller of the Currency also may collect 

4 an assessment, fee, or other charge from any entity, the 

5 activities of which are supervised by the Comptroller of 

6 the Currency under section 6 of the Bank Holding Com7 pany Act of 1956, as the Comptroller determines is nec8 essary or appropriate to carry out the responsibilities of 

9 the Office of the Comptroller of the Currency in connec10 tion with such activities. In establishing the amount of an 

11 assessment, fee, or charge collected from an entity under 

12 this section, the Comptroller of the Currency may take 

13 into account the funds transferred to the Office of the 

14 Comptroller of the Currency under this section, the nature 

15 and scope of the activities of the entity, the amount and 

16 type of assets that the entity holds, the financial and man17 agerial condition of the entity, and any other factor, as 

18 the Comptroller of the Currency determines is appro19 priate. Funds derived from any assessment, fee, or charge 

20 collected or payment made pursuant to this section may 

21 be deposited by the Comptroller of the Currency in accord22 ance with the provisions of section 5234. Such funds shall 

23 not be construed to be Government funds or appropriated 

24 monies, and shall not be subject to apportionment for pur25 poses of chapter 15 of title 31, United States Code, or 


sroberts on DSKH9S0YB1PROD with BILLS
331 

•S 3217 AMDT 3739 

1 any other provision of law. The authority of the Comp2 troller of the Currency under this section shall be in addi3 tion to the authority under section 5240. 

4 ‘‘The Comptroller of the Currency shall have sole au5 thority to determine the manner in which the obligations 

6 of the Office of the Comptroller of the Currency shall be 

7 incurred and its disbursements and expenses allowed and 

8 paid, in accordance with this section.’’. 

9 (2) PROMOTING PARITY IN SUPERVISION

10 FEES.— 

11 (A) PROPOSAL REQUIRED.— 

12 (i) IN GENERAL.—The Comptroller of 

13 the Currency shall submit to the Board of 

14 Directors of the Corporation a proposal to 

15 promote parity in the examination fees 

16 paid by State and Federal depository insti17 tutions having total consolidated assets of 

18 less than $50,000,000,000. 

19 (ii) CONTENTS.—The proposal sub20 mitted under clause (i) shall recommend a 

21 transfer from the Corporation to the Office 

22 of the Comptroller of the Currency of a 

23 percentage of the amount that the Office 

24 of the Comptroller of the Currency esti25 mates is necessary or appropriate to carry 


sroberts on DSKH9S0YB1PROD with BILLS
332 

•S 3217 AMDT 3739 

1 out the responsibilities of the Office of the 

2 Comptroller of the Currency associated 

3 with the supervision of Federal depository 

4 institutions having total consolidated assets 

5 of less than $50,000,000,000. 

6 (iii) DATA COLLECTION.—The Cor7 poration shall assist the Office of the 

8 Comptroller of the Currency in collecting 

9 data relative to the supervision of State de10 pository institutions to develop the pro11 posal submitted under clause (i). 

12 (B) VOTE.—Not later than 60 days after 

13 the date of receipt of the proposal under sub14 paragraph (A), the Board of Directors of the 

15 Corporation shall— 

16 (i) vote on the proposal; and 

17 (ii) promptly implement a plan to pe18 riodically transfer to the Office of the 

19 Comptroller of the Currency a percentage 

20 of the amount that the Office of the Comp21 troller of the Currency estimates is nec22 essary or appropriate to carry out the re23 sponsibilities of the Office of the Comp24 troller of the Currency associated with the 

25 supervision of Federal depository instituVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00332 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
333 

•S 3217 AMDT 3739 

1 tions having total consolidated assets of 

2 less than $50,000,000,000, as approved by 

3 the Board of Directors of the Corporation. 

4 (C) REPORT TO CONGRESS.—Not later 

5 than 30 days after date of the vote of the 

6 Board of Directors of the Corporation under 

7 subparagraph (B), the Corporation shall submit 

8 to the Committee on Banking, Housing, and 

9 Urban Affairs of the Senate and the Committee 

10 on Financial Services of the House of Rep11 resentatives a report describing— 

12 (i) the proposal made to the Board of 

13 Directors of the Corporation by the Comp14 troller of the Currency; and 

15 (ii) the decision resulting from the 

16 vote of the Board of Directors of the Cor17 poration. 

18 (D) FAILURE TO APPROVE PLAN.—If, on 

19 the date that is 2 years after the date of enact20 ment of this Act, the Board of Directors of the 

21 Corporation has failed to approve a plan under 

22 subparagraph (B), the Council shall approve a 

23 plan using the dispute resolution procedures 

24 under section 119. 


sroberts on DSKH9S0YB1PROD with BILLS
334 

•S 3217 AMDT 3739 

1 (b) FUNDING OF BOARD OF GOVERNORS.—Section 

2 11 of the Federal Reserve Act (12 U.S.C. 248) is amended 

3 by adding at the end the following: 

4 ‘‘(s) ASSESSMENTS, FEES, AND OTHER CHARGES

5 FOR CERTAIN COMPANIES.— 

6 ‘‘(1) IN GENERAL.—The Board shall collect a 

7 total amount of assessments, fees, or other charges 

8 from the companies described in paragraph (2) that 

9 is equal to the total expenses the Board estimates 

10 are necessary or appropriate to carry out the respon11 sibilities of the Board with respect to such compa12 nies. 

13 ‘‘(2) COMPANIES.—The companies described in 

14 this paragraph are— 

15 ‘‘(A) all bank holding companies having 

16 total consolidated assets of $50,000,000,000 or 

17 more; 

18 ‘‘(B) all savings and loan holding compa19 nies having total consolidated assets of 

20 $50,000,000,000 or more; and 

21 ‘‘(C) all nonbank financial companies su22 pervised by the Board under section 113 of the 

23 Restoring American Financial Stability Act of 

24 2010.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
335 

•S 3217 AMDT 3739 

1 (c) CORPORATION EXAMINATION FEES.—Section 

2 10(e) of the Federal Deposit Insurance Act (12 U.S.C. 

3 1820(e)) is amended by striking paragraph (1) and insert4 ing the following: 

5 ‘‘(1) REGULAR AND SPECIAL EXAMINATIONS OF

6 DEPOSITORY INSTITUTIONS.—The cost of conducting 

7 any regular examination or special examination of 

8 any depository institution under subsection (b)(2), 

9 (b)(3), or (d) or of any entity described in section 

10 3(q)(2) may be assessed by the Corporation against 

11 the institution or entity to meet the expenses of the 

12 Corporation in carrying out such examinations, or as 

13 the Corporation determines is necessary or appro14 priate to carry out the responsibilities of the Cor15 poration. The Corporation may also collect an as16 sessment, fee, or other charge from any entity, the 

17 activities of which are supervised by the Corporation 

18 under section 6 of the Bank Holding Company Act 

19 of 1956, as the Corporation determines is necessary 

20 or appropriate to carry out the responsibilities of the 

21 Corporation in connection with such activities.’’. 

22 (d) EFFECTIVE DATE.—This section, and the amend23 ments made by this section, shall take effect on the trans24 fer date. 


sroberts on DSKH9S0YB1PROD with BILLS
336 

•S 3217 AMDT 3739 

1 SEC. 319. CONTRACTING AND LEASING AUTHORITY. 

2 Notwithstanding the Federal Property and Adminis3 trative Services Act of 1949 (41 U.S.C. 251 et seq.) or 

4 any other provision of law, the Office of the Comptroller 

5 of the Currency may— 

6 (1) enter into and perform contracts, execute 

7 instruments, and acquire, in any lawful manner, 

8 such goods and services, or personal or real property 

9 (or property interest) as the Comptroller deems nec10 essary to carry out the duties and responsibilities of 

11 the Office of the Comptroller of the Currency; and 

12 (2) hold, maintain, sell, lease, or otherwise dis13 pose of the property (or property interest) acquired 

14 under paragraph (1). 

15 Subtitle B—Transitional Provisions 

16 SEC. 321. INTERIM USE OF FUNDS, PERSONNEL, AND PROP17 ERTY. 

18 (a) OFFICE OF THRIFT SUPERVISION.— 

19 (1) IN GENERAL.—Before the transfer date, the 

20 Office of the Comptroller of the Currency, the Cor21 poration, and the Board of Governors shall— 

22 (A) consult and cooperate with the Office 

23 of Thrift Supervision to facilitate the orderly 

24 transfer of functions to the Office of the Comp25 troller of the Currency, the Corporation, and 


sroberts on DSKH9S0YB1PROD with BILLS
337 

•S 3217 AMDT 3739 

1 the Board of Governors in accordance with this 

2 title; 

3 (B) determine jointly, from time to time— 

4 (i) the amount of funds necessary to 

5 pay any expenses associated with the 

6 transfer of functions (including expenses 

7 for personnel, property, and administrative 

8 services) during the period beginning on 

9 the date of enactment of this Act and end10 ing on the transfer date; 

11 (ii) which personnel are appropriate to 

12 facilitate the orderly transfer of functions 

13 by this title; and 

14 (iii) what property and administrative 

15 services are necessary to support the Office 

16 of the Comptroller of the Currency, the 

17 Corporation, and the Board of Governors 

18 during the period beginning on the date of 

19 enactment of this Act and ending on the 

20 transfer date; and 

21 (C) take such actions as may be necessary 

22 to provide for the orderly implementation of 

23 this title. 

24 (2) AGENCY CONSULTATION.—When requested 

25 jointly by the Office of the Comptroller of the CurVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00337 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
338 

•S 3217 AMDT 3739 

1 rency, the Corporation, and the Board of Governors 

2 to do so before the transfer date, the Office of Thrift 

3 Supervision shall— 

4 (A) pay to the Office of the Comptroller of 

5 the Currency, the Corporation, or the Board of 

6 Governors, as applicable, from funds obtained 

7 by the Office of Thrift Supervision through as8 sessments, fees, or other charges that the Office 

9 of Thrift Supervision is authorized by law to 

10 impose, such amounts as the Office of the 

11 Comptroller of the Currency, the Corporation, 

12 and the Board of Governors jointly determine 

13 to be necessary under paragraph (1); 

14 (B) detail to the Office of the Comptroller 

15 of the Currency, the Corporation, or the Board 

16 of Governors, as applicable, such personnel as 

17 the Office of the Comptroller of the Currency, 

18 the Corporation, and the Board of Governors 

19 jointly determine to be appropriate under para20 graph (1); and 

21 (C) make available to the Office of the 

22 Comptroller of the Currency, the Corporation, 

23 or the Board of Governors, as applicable, such 

24 property and provide to the Office of the Comp25 troller of the Currency, the Corporation, or the 


sroberts on DSKH9S0YB1PROD with BILLS
339 

•S 3217 AMDT 3739 

1 Board of Governors, as applicable, such admin2 istrative services as the Office of the Comp3 troller of the Currency, the Corporation, and 

4 the Board of Governors jointly determine to be 

5 necessary under paragraph (1). 

6 (3) NOTICE REQUIRED.—The Office of the 

7 Comptroller of the Currency, the Corporation, and 

8 the Board of Governors shall jointly give the Office 

9 of Thrift Supervision reasonable prior notice of any 

10 request that the Office of the Comptroller of the 

11 Currency, the Corporation, and the Board of Gov12 ernors jointly intend to make under paragraph (2). 

13 (b) BOARD OF GOVERNORS.— 

14 (1) IN GENERAL.—Before the transfer date, the 

15 Office of the Comptroller of the Currency and the 

16 Corporation shall— 

17 (A) consult and cooperate with the Board 

18 of Governors to facilitate the orderly transfer of 

19 functions to the Office of the Comptroller of the 

20 Currency and the Corporation in accordance 

21 with this title; 

22 (B) determine jointly, from time to time— 

23 (i) the amount of funds necessary to 

24 pay any expenses associated with the 

25 transfer of functions (including expenses 


sroberts on DSKH9S0YB1PROD with BILLS
340 

•S 3217 AMDT 3739 

1 for personnel, property, and administrative 

2 services) during the period beginning on 

3 the date of enactment of this Act and end4 ing on the transfer date; 

5 (ii) which personnel are appropriate to 

6 facilitate the orderly transfer of functions 

7 by this title; and 

8 (iii) what property and administrative 

9 services are necessary to support the Office 

10 of the Comptroller of the Currency and the 

11 Corporation during the period beginning 

12 on the date of enactment of this Act and 

13 ending on the transfer date; and 

14 (C) take such actions as may be necessary 

15 to provide for the orderly implementation of 

16 this title. 

17 (2) AGENCY CONSULTATION.—When requested 

18 jointly by the Office of the Comptroller of the Cur19 rency and the Corporation to do so before the trans20 fer date, the Board of Governors shall— 

21 (A) pay to the Office of the Comptroller of 

22 the Currency or the Corporation, as applicable, 

23 from funds obtained by the Board of Governors 

24 through assessments, fees, or other charges 

25 that the Board of Governors is authorized by 


sroberts on DSKH9S0YB1PROD with BILLS
341 

•S 3217 AMDT 3739 

1 law to impose, such amounts as the Office of 

2 the Comptroller of the Currency and the Cor3 poration jointly determine to be necessary 

4 under paragraph (1); 

5 (B) detail to the Office of the Comptroller 

6 of the Currency or the Corporation, as applica7 ble, such personnel as the Office of the Comp8 troller of the Currency and the Corporation 

9 jointly determine to be appropriate under para10 graph (1); and 

11 (C) make available to the Office of the 

12 Comptroller of the Currency or the Corporation, 

13 as applicable, such property and provide to the 

14 Office of the Comptroller of the Currency or the 

15 Corporation, as applicable, such administrative 

16 services as the Office of the Comptroller of the 

17 Currency and the Corporation jointly determine 

18 to be necessary under paragraph (1). 

19 (3) NOTICE REQUIRED.—The Office of the 

20 Comptroller of the Currency and the Corporation 

21 shall jointly give the Board of Governors reasonable 

22 prior notice of any request that the Office of the 

23 Comptroller of the Currency and the Corporation 

24 jointly intend to make under paragraph (2). 


sroberts on DSKH9S0YB1PROD with BILLS
342 

•S 3217 AMDT 3739 

1 SEC. 322. TRANSFER OF EMPLOYEES. 

2 (a) IN GENERAL.— 

3 (1) OFFICE OF THRIFT SUPERVISION EMPLOY4 EES.— 

5 (A) IN GENERAL.—All employees of the 

6 Office of Thrift Supervision shall be transferred 

7 to the Office of the Comptroller of the Currency 

8 or the Corporation for employment in accord9 ance with this section. 

10 (B) ALLOCATING EMPLOYEES FOR TRANS11 FER TO RECEIVING AGENCIES.—The Director of 

12 the Office of Thrift Supervision, the Comp13 troller of the Currency, and the Chairperson of 

14 the Corporation shall— 

15 (i) jointly determine the number of 

16 employees of the Office of Thrift Super17 vision necessary to perform or support the 

18 functions that are transferred to the Office 

19 of the Comptroller of the Currency or the 

20 Corporation by this title; and 

21 (ii) consistent with the determination 

22 under clause (i), jointly identify employees 

23 of the Office of Thrift Supervision for 

24 transfer to the Office of the Comptroller of 

25 the Currency or the Corporation. 


sroberts on DSKH9S0YB1PROD with BILLS
343 

•S 3217 AMDT 3739 

1 (2) BOARD OF GOVERNORS.—The Comptroller 

2 of the Currency, the Chairperson of the Corporation, 

3 and the Chairman of the Board of Governors shall— 

4 (A) jointly determine the number of em5 ployees of the Board of Governors (including 

6 employees of the Federal reserve banks who, on 

7 the day before the transfer date, are performing 

8 functions on behalf of the Board of Governors) 

9 necessary to perform or support the functions 

10 that are transferred to the Office of the Comp11 troller of the Currency or the Corporation 

12 under this title; and 

13 (B) consistent with the determination 

14 under subparagraph (A), jointly identify em15 ployees of the Board of Governors (including 

16 employees of the Federal reserve banks who, on 

17 the day before the transfer date, are performing 

18 functions on behalf of the Board of Governors) 

19 for transfer to the Office of the Comptroller of 

20 the Currency or the Corporation. 

21 (3) EMPLOYEES TRANSFERRED; SERVICE PERI22 ODS CREDITED.—For purposes of this section, peri23 ods of service with a Federal home loan bank, a 

24 joint office of Federal home loan banks, or a Federal 


sroberts on DSKH9S0YB1PROD with BILLS
344 

•S 3217 AMDT 3739 

1 reserve bank shall be credited as periods of service 

2 with a Federal agency. 

3 (4) APPOINTMENT AUTHORITY FOR EXCEPTED

4 SERVICE TRANSFERRED.— 

5 (A) IN GENERAL.—Except as provided in 

6 subparagraph (B), any appointment authority 

7 of the Office of Thrift Supervision or the Board 

8 of Governors under Federal law that relates to 

9 the functions transferred under section 312, in10 cluding the regulations of the Office of Per11 sonnel Management, for filling the positions of 

12 employees in the excepted service shall be trans13 ferred to the Comptroller of the Currency or 

14 the Chairperson of the Corporation, as appro15 priate. 

16 (B) DECLINING TRANSFERS ALLOWED.— 

17 The Office of the Comptroller of the Currency 

18 or the Chairperson of the Corporation may de19 cline to accept a transfer of authority under 

20 subparagraph (A) (and the employees appointed 

21 under that authority) to the extent that such 

22 authority relates to positions excepted from the 

23 competitive service because of their confidential, 

24 policy-making, policy-determining, or policy-ad25 vocating character. 


sroberts on DSKH9S0YB1PROD with BILLS
345 

•S 3217 AMDT 3739 

1 (5) ADDITIONAL APPOINTMENT AUTHORITY.— 

2 Notwithstanding any other provision of law, the Of3 fice of the Comptroller of the Currency and the Cor4 poration may appoint transferred employees to posi5 tions in the Office of the Comptroller of the Cur6 rency or the Corporation, respectively. For purposes 

7 of this paragraph, an employee transferred from any 

8 Federal reserve bank shall be treated as an employee 

9 of the Board of Governors. 

10 (b) TIMING OF TRANSFERS AND POSITION ASSIGN11 MENTS.—Each employee to be transferred under sub12 section (a)(1) shall— 

13 (1) be transferred not later than 90 days after 

14 the transfer date; and 

15 (2) receive notice of the position assignment of 

16 the employee not later than 120 days after the effec17 tive date of the transfer of the employee. 

18 (c) TRANSFER OF FUNCTIONS.— 

19 (1) IN GENERAL.—Notwithstanding any other 

20 provision of law, the transfer of employees under 

21 this subtitle shall be deemed a transfer of functions 

22 for the purpose of section 3503 of title 5, United 

23 States Code. 

24 (2) PRIORITY.—If any provision of this subtitle 

25 conflicts with any protection provided to a transVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00345 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
346 

•S 3217 AMDT 3739 

1 ferred employee under section 3503 of title 5, 

2 United States Code, the provisions of this subtitle 

3 shall control. 

4 (d) EMPLOYEE STATUS AND ELIGIBILITY.—The 

5 transfer of functions and employees under this subtitle, 

6 and the abolishment of the Office of Thrift Supervision 

7 under section 313, shall not affect the status of the trans8 ferred employees as employees of an agency of the United 

9 States under any provision of law. 

10 (e) EQUAL STATUS AND TENURE POSITIONS.— 

11 (1) STATUS AND TENURE.— 

12 (A) OFFICE OF THRIFT SUPERVISION.— 

13 Each transferred employee from the Office of 

14 Thrift Supervision shall be placed in a position 

15 at the Office of the Comptroller of the Currency 

16 or the Corporation with the same status and 

17 tenure as the transferred employee held on the 

18 day before the date on which the employee was 

19 transferred. 

20 (B) BOARD OF GOVERNORS.—Each trans21 ferred employee from the Board of Governors 

22 or from a Federal reserve bank shall be placed 

23 in a position with the same status and tenure 

24 as employees of the Office of the Comptroller of 

25 the Currency or the Corporation who perform 


sroberts on DSKH9S0YB1PROD with BILLS
347 

•S 3217 AMDT 3739 

1 similar functions and have similar periods of 

2 service. 

3 (2) FUNCTIONS.—To the extent practicable, 

4 each transferred employee shall be placed in a posi5 tion at the Office of the Comptroller of the Currency 

6 or the Corporation, as applicable, responsible for the 

7 same functions and duties as the transferred em8 ployee had on the day before the date on which the 

9 employee was transferred, in accordance with the ex10 pertise and preferences of the transferred employee. 

11 (f) NO ADDITIONAL CERTIFICATION REQUIRE12 MENTS.—An examiner who is a transferred employee shall 

13 not be subject to any additional certification requirements 

14 before being placed in a comparable position at the Office 

15 of the Comptroller of the Currency or the Corporation, 

16 if the examiner carries out examinations of the same type 

17 of institutions as an employee of the Office of the Comp18 troller of the Currency or the Corporation as the employee 

19 was responsible for carrying out before the date on which 

20 the employee was transferred. 

21 (g) PERSONNEL ACTIONS LIMITED.— 

22 (1) 2-YEAR PROTECTION.—Except as provided 

23 in paragraph (2), during the 2-year period beginning 

24 on the transfer date, an employee holding a perma25 nent position on the day before the date on which 


sroberts on DSKH9S0YB1PROD with BILLS
348 

•S 3217 AMDT 3739 

1 the employee was transferred shall not be involun2 tarily separated or involuntarily reassigned outside 

3 the locality pay area (as defined by the Office of 

4 Personnel Management) of the employee. 

5 (2) EXCEPTIONS.—The Comptroller of the Cur6 rency and the Chairperson of the Corporation, as 

7 applicable, may— 

8 (A) separate a transferred employee for 

9 cause, including for unacceptable performance; 

10 or 

11 (B) terminate an appointment to a position 

12 excepted from the competitive service because of 

13 its confidential policy-making, policy-deter14 mining, or policy-advocating character. 

15 (h) PAY.— 

16 (1) 2-YEAR PROTECTION.—Except as provided 

17 in paragraph (2), during the 2-year period beginning 

18 on the date on which the employee was transferred 

19 under this subtitle, a transferred employee shall be 

20 paid at a rate that is not less than the basic rate 

21 of pay, including any geographic differential, that 

22 the transferred employee received during the pay pe23 riod immediately preceding the date on which the 

24 employee was transferred. 


sroberts on DSKH9S0YB1PROD with BILLS
349 

•S 3217 AMDT 3739 

1 (2) EXCEPTIONS.—The Comptroller of the Cur2 rency, the Chairperson of the Corporation, or the 

3 Chairman of the Board of Governors may reduce the 

4 rate of basic pay of a transferred employee— 

5 (A) for cause, including for unacceptable 

6 performance; or 

7 (B) with the consent of the transferred 

8 employee. 

9 (3) PROTECTION ONLY WHILE EMPLOYED.— 

10 This subsection shall apply to a transferred em11 ployee only during the period that the transferred 

12 employee remains employed by Office of the Comp13 troller of the Currency or the Corporation. 

14 (4) PAY INCREASES PERMITTED.—Nothing in 

15 this subsection shall limit the authority of the Comp16 troller of the Currency or the Chairperson of the 

17 Corporation to increase the pay of a transferred em18 ployee. 

19 (i) BENEFITS.— 

20 (1) RETIREMENT BENEFITS FOR TRANSFERRED

21 EMPLOYEES.— 

22 (A) IN GENERAL.— 

23 (i) CONTINUATION OF EXISTING RE24 TIREMENT PLAN.—Each transferred em25 ployee shall remain enrolled in the retireVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00349 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
350 

•S 3217 AMDT 3739 

1 ment plan of the transferred employee, for 

2 as long as the transferred employee is em3 ployed by the Office of the Comptroller of 

4 the Currency or the Corporation. 

5 (ii) EMPLOYER’S CONTRIBUTION.— 

6 The Comptroller of the Currency or the 

7 Chairperson of the Corporation, as appro8 priate, shall pay any employer contribu9 tions to the existing retirement plan of 

10 each transferred employee, as required 

11 under each such existing retirement plan. 

12 (B) OPTION FOR EMPLOYEES TRANS13 FERRED FROM FEDERAL RESERVE SYSTEM TO

14 BE SUBJECT TO FEDERAL EMPLOYEE RETIRE15 MENT PROGRAM.— 

16 (i) ELECTION.—Any transferred em17 ployee who was enrolled in a Federal Re18 serve System retirement plan on the day 

19 before the date of the transfer of the em20 ployee to the Office of the Comptroller of 

21 the Currency or the Corporation may, dur22 ing the period beginning 6 months after 

23 the transfer date and ending 1 year after 

24 the transfer date, elect to be subject to the 

25 Federal employee retirement program. 


sroberts on DSKH9S0YB1PROD with BILLS
351 

•S 3217 AMDT 3739 

1 (ii) EFFECTIVE DATE OF COV2 ERAGE.—For any employee making an 

3 election under clause (i), coverage by the 

4 Federal employee retirement program shall 

5 begin 1 year after the transfer date. 

6 (C) AGENCY PARTICIPATION IN FEDERAL

7 RESERVE SYSTEM RETIREMENT PLAN.— 

8 (i) SEPARATE ACCOUNT IN FEDERAL

9 RESERVE SYSTEM RETIREMENT PLAN ES10 TABLISHED.—A separate account in the 

11 Federal Reserve System retirement plan 

12 shall be established for employees trans13 ferred to the Office of the Comptroller of 

14 the Currency or the Corporation under this 

15 title who do not make the election under 

16 subparagraph (B). 

17 (ii) FUNDS ATTRIBUTABLE TO TRANS18 FERRED EMPLOYEES REMAINING IN FED19 ERAL RESERVE SYSTEM RETIREMENT

20 PLAN TRANSFERRED.—The proportionate 

21 share of funds in the Federal Reserve Sys22 tem retirement plan, including the propor23 tionate share of any funding surplus in 

24 that plan, attributable to a transferred em25 ployee who does not make the election 


sroberts on DSKH9S0YB1PROD with BILLS
352 

•S 3217 AMDT 3739 

1 under subparagraph (B), shall be trans2 ferred to the account established under 

3 clause (i). 

4 (iii) EMPLOYER CONTRIBUTIONS DE5 POSITED.—The Office of the Comptroller 

6 of the Currency or the Corporation, as ap7 propriate, shall deposit into the account es8 tablished under clause (i) the employer 

9 contributions that the Office of the Comp10 troller of the Currency or the Corporation, 

11 respectively, makes on behalf of trans12 ferred employees who do not make an elec13 tion under subparagraph (B). 

14 (iv) ACCOUNT ADMINISTRATION.—The 

15 Office of the Comptroller of the Currency 

16 or the Corporation, as appropriate, shall 

17 administer the account established under 

18 clause (i) as a participation employer in 

19 the Federal Reserve System retirement 

20 plan. 

21 (D) DEFINITION.—In this paragraph, the 

22 term ‘‘existing retirement plan’’ means, with re23 spect to a transferred employee, the retirement 

24 plan (including the Financial Institutions Re25 tirement Fund), and any associated thrift savVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00352 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
353 

•S 3217 AMDT 3739 

1 ings plan, of the agency from which the em2 ployee was transferred in which the employee 

3 was enrolled on the day before the date on 

4 which the employee was transferred. 

5 (2) BENEFITS OTHER THAN RETIREMENT BEN6 EFITS.— 

7 (A) DURING FIRST YEAR.— 

8 (i) EXISTING PLANS CONTINUE.— 

9 During the 1-year period following the 

10 transfer date, each transferred employee 

11 may retain membership in any employee 

12 benefit program (other than a retirement 

13 benefit program) of the agency from which 

14 the employee was transferred under this 

15 title, including any dental, vision, long 

16 term care, or life insurance program to 

17 which the employee belonged on the day 

18 before the transfer date. 

19 (ii) EMPLOYER’S CONTRIBUTION.— 

20 The Office of the Comptroller of the Cur21 rency or the Corporation, as appropriate, 

22 shall pay any employer cost required to ex23 tend coverage in the benefit program to 

24 the transferred employee as required under 

25 that program or negotiated agreements. 


sroberts on DSKH9S0YB1PROD with BILLS
354 

•S 3217 AMDT 3739 

1 (B) DENTAL, VISION, OR LIFE INSURANCE

2 AFTER FIRST YEAR.—If, after the 1-year period 

3 beginning on the transfer date, the Office of the 

4 Comptroller of the Currency or the Corporation 

5 determines that the Office of the Comptroller of 

6 the Currency or the Corporation, as the case 

7 may be, will not continue to participate in any 

8 dental, vision, or life insurance program of an 

9 agency from which an employee was trans10 ferred, a transferred employee who is a member 

11 of the program may, before the decision takes 

12 effect and without regard to any regularly 

13 scheduled open season, elect to enroll in— 

14 (i) the enhanced dental benefits pro15 gram established under chapter 89A of 

16 title 5, United States Code; 

17 (ii) the enhanced vision benefits estab18 lished under chapter 89B of title 5, United 

19 States Code; and 

20 (iii) the Federal Employees’ Group 

21 Life Insurance Program established under 

22 chapter 87 of title 5, United States Code, 

23 without regard to any requirement of in24 surability. 


sroberts on DSKH9S0YB1PROD with BILLS
355 

•S 3217 AMDT 3739 

1 (C) LONG TERM CARE INSURANCE AFTER

2 1ST YEAR.—If, after the 1-year period begin3 ning on the transfer date, the Office of the 

4 Comptroller of the Currency or the Corporation 

5 determines that the Office of the Comptroller of 

6 the Currency or the Corporation, as appro7 priate, will not continue to participate in any 

8 long term care insurance program of an agency 

9 from which an employee transferred, a trans10 ferred employee who is a member of such a pro11 gram may, before the decision takes effect, elect 

12 to apply for coverage under the Federal Long 

13 Term Care Insurance Program established 

14 under chapter 90 of title 5, United States Code, 

15 under the underwriting requirements applicable 

16 to a new active workforce member, as described 

17 in part 875 of title 5, Code of Federal Regula18 tions (or any successor thereto). 

19 (D) CONTRIBUTION OF TRANSFERRED EM20 PLOYEE.— 

21 (i) IN GENERAL.—Subject to clause 

22 (ii), a transferred employee who is enrolled 

23 in a plan under the Federal Employees 

24 Health Benefits Program shall pay any 


sroberts on DSKH9S0YB1PROD with BILLS
356 

•S 3217 AMDT 3739 

1 employee contribution required under the 

2 plan. 

3 (ii) COST DIFFERENTIAL.—The Office 

4 of the Comptroller of the Currency or the 

5 Corporation, as applicable, shall pay any 

6 difference in cost between the employee 

7 contribution required under the plan pro8 vided to transferred employees by the 

9 agency from which the employee trans10 ferred on the date of enactment of this Act 

11 and the plan provided by the Office of the 

12 Comptroller of the Currency or the Cor13 poration, as the case may be, under this 

14 section. 

15 (iii) FUNDS TRANSFER.—The Office 

16 of the Comptroller of the Currency or the 

17 Corporation, as the case may be, shall 

18 transfer to the Employees Health Benefits 

19 Fund established under section 8909 of 

20 title 5, United States Code, an amount de21 termined by the Director of the Office of 

22 Personnel Management, after consultation 

23 with the Comptroller of the Currency or 

24 the Chairperson of the Corporation, as the 

25 case may be, and the Office of ManageVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00356 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
357 

•S 3217 AMDT 3739 

1 ment and Budget, to be necessary to reim2 burse the Fund for the cost to the Fund 

3 of providing any benefits under this sub4 paragraph that are not otherwise paid for 

5 by a transferred employee under clause (i). 

6 (E) SPECIAL PROVISIONS TO ENSURE CON7 TINUATION OF LIFE INSURANCE BENEFITS.— 

8 (i) IN GENERAL.—An annuitant, as 

9 defined in section 8901 of title 5, United 

10 States Code, who is enrolled in a life insur11 ance plan administered by an agency from 

12 which employees are transferred under this 

13 title on the day before the transfer date 

14 shall be eligible for coverage by a life in15 surance plan under sections 8706(b), 

16 8714a, 8714b, or 8714c of title 5, United 

17 States Code, or by a life insurance plan es18 tablished by the Office of the Comptroller 

19 of the Currency or the Corporation, as ap20 plicable, without regard to any regularly 

21 scheduled open season or any requirement 

22 of insurability. 

23 (ii) CONTRIBUTION OF TRANSFERRED

24 EMPLOYEE.— 


sroberts on DSKH9S0YB1PROD with BILLS
358 

•S 3217 AMDT 3739 

1 (I) IN GENERAL.—Subject to 

2 subclause (II), a transferred employee 

3 enrolled in a life insurance plan under 

4 this subparagraph shall pay any em5 ployee contribution required by the 

6 plan. 

7 (II) COST DIFFERENTIAL.—The 

8 Office of the Comptroller of the Cur9 rency or the Corporation, as the case 

10 may be, shall pay any difference in 

11 cost between the benefits provided by 

12 the agency from which the employee 

13 transferred on the date of enactment 

14 of this Act and the benefits provided 

15 under this section. 

16 (III) FUNDS TRANSFER.—The 

17 Office of the Comptroller of the Cur18 rency or the Corporation, as the case 

19 may be, shall transfer to the Federal 

20 Employees’ Group Life Insurance 

21 Fund established under section 8714 

22 of title 5, United States Code, an 

23 amount determined by the Director of 

24 the Office of Personnel Management, 

25 after consultation with the CompVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00358 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
359 

•S 3217 AMDT 3739 

1 troller of the Currency or the Chair2 person of the Corporation, as the case 

3 may be, and the Office of Manage4 ment and Budget, to be necessary to 

5 reimburse the Federal Employees’ 

6 Group Life Insurance Fund for the 

7 cost to the Federal Employees’ Group 

8 Life Insurance Fund of providing ben9 efits under this subparagraph not oth10 erwise paid for by a transferred em11 ployee under subclause (I). 

12 (IV) CREDIT FOR TIME EN13 ROLLED IN OTHER PLANS.—For any 

14 transferred employee, enrollment in a 

15 life insurance plan administered by 

16 the agency from which the employee 

17 transferred, immediately before enroll18 ment in a life insurance plan under 

19 chapter 87 of title 5, United States 

20 Code, shall be considered as enroll21 ment in a life insurance plan under 

22 that chapter for purposes of section 

23 8706(b)(1)(A) of title 5, United 

24 States Code. 


sroberts on DSKH9S0YB1PROD with BILLS
360 

•S 3217 AMDT 3739 

1 (j) INCORPORATION INTO AGENCY PAY SYSTEM.— 

2 Not later than 2 years after the transfer date, the Comp3 troller of the Currency and the Chairperson of the Cor4 poration shall place each transferred employee into the es5 tablished pay system and structure of the appropriate em6 ploying agency. 

7 (k) EQUITABLE TREATMENT.—In administering the 

8 provisions of this section, the Comptroller of the Currency 

9 and the Chairperson of the Corporation— 

10 (1) may not take any action that would unfairly 

11 disadvantage a transferred employee relative to any 

12 other employee of the Office of the Comptroller of 

13 the Currency or the Corporation on the basis of 

14 prior employment by the Office of Thrift Super15 vision, the Board of Governors, or a Federal reserve 

16 bank; and 

17 (2) may take such action as is appropriate in 

18 an individual case to ensure that a transferred em19 ployee receives equitable treatment, with respect to 

20 the status, tenure, pay, benefits (other than benefits 

21 under programs administered by the Office of Per22 sonnel Management), and accrued leave or vacation 

23 time for prior periods of service with any Federal 

24 agency of the transferred employee. 

25 (l) REORGANIZATION.— 


sroberts on DSKH9S0YB1PROD with BILLS
361 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—If the Comptroller of the 

2 Currency or the Chairperson of the Corporation de3 termines, during the 2-year period beginning 1 year 

4 after the transfer date, that a reorganization of the 

5 staff of the Office of the Comptroller of the Cur6 rency or the Corporation, respectively, is required, 

7 the reorganization shall be deemed a ‘‘major reorga8 nization’’ for purposes of affording affected employ9 ees retirement under section 8336(d)(2) or 

10 8414(b)(1)(B) of title 5, United States Code. 

11 (2) SERVICE CREDIT.—For purposes of this 

12 subsection, periods of service with a Federal home 

13 loan bank, a joint office of Federal home loan banks 

14 or a Federal reserve bank shall be credited as peri15 ods of service with a Federal agency. 

16 SEC. 323. PROPERTY TRANSFERRED. 

17 (a) PROPERTY DEFINED.—For purposes of this sec18 tion, the term ‘‘property’’ includes all real property (in19 cluding leaseholds) and all personal property, including 

20 computers, furniture, fixtures, equipment, books, ac21 counts, records, reports, files, memoranda, paper, reports 

22 of examination, work papers, and correspondence related 

23 to such reports, and any other information or materials. 

24 (b) PROPERTY OF THE OFFICE OF THRIFT SUPER25 VISION.—Not later than 90 days after the transfer date, 


sroberts on DSKH9S0YB1PROD with BILLS
362 

•S 3217 AMDT 3739 

1 all property of the Office of Thrift Supervision that the 

2 Comptroller of the Currency and the Chairperson of the 

3 Corporation jointly determine is used, on the day before 

4 the transfer date, to perform or support the functions of 

5 the Office of Thrift Supervision transferred to the Office 

6 of the Comptroller of the Currency or the Corporation 

7 under this title, shall be transferred to the Office of the 

8 Comptroller of the Currency or the Corporation in a man9 ner consistent with the transfer of employees under this 

10 subtitle. 

11 (c) PROPERTY OF THE BOARD OF GOVERNORS.— 

12 (1) IN GENERAL.—Not later than 90 days after 

13 the transfer date, all property of the Board of Gov14 ernors that the Office of the Comptroller of the Cur15 rency, the Corporation, and the Board of Governors 

16 jointly determine is used, on the day before the 

17 transfer date, to perform or support the functions of 

18 the Board of Governor transferred to the Office of 

19 the Comptroller of the Currency or the Corporation 

20 under this title, shall be transferred to the Office of 

21 the Comptroller of the Currency or the Corporation 

22 in a manner consistent with the transfer of employ23 ees under this subtitle. 

24 (2) PROPERTY OF FEDERAL RESERVE

25 BANKS.—Any property of any Federal reserve bank 


sroberts on DSKH9S0YB1PROD with BILLS
363 

•S 3217 AMDT 3739 

1 that, on the day before the transfer date, is used to 

2 perform or support the functions of the Board of 

3 Governors transferred to the Office of the Comp4 troller of the Currency or the Corporation by this 

5 title shall be treated as property of the Board of 

6 Governors for purposes of paragraph (1). 

7 (d) CONTRACTS RELATED TO PROPERTY TRANS8 FERRED.—Each contract, agreement, lease, license, per9 mit, and similar arrangement relating to property trans10 ferred to the Office of the Comptroller of the Currency 

11 or the Corporation by this section shall be transferred to 

12 the Office of the Comptroller of the Currency or the Cor13 poration, as appropriate, together with the property to 

14 which it relates. 

15 (e) PRESERVATION OF PROPERTY.—Property identi16 fied for transfer under this section shall not be altered, 

17 destroyed, or deleted before transfer under this section. 

18 SEC. 324. FUNDS TRANSFERRED. 

19 The funds that, on the day before the transfer date, 

20 the Director of the Office of Thrift Supervision (in con21 sultation with the Comptroller of the Currency, the Chair22 person of the Corporation, and the Chairman of the Board 

23 of Governors) determines are not necessary to dispose of 

24 the affairs of the Office of Thrift Supervision under sec25 tion 325 and are available to the Office of Thrift SuperVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00363 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
364 

•S 3217 AMDT 3739 

1 vision to pay the expenses of the Office of Thrift Super2 vision— 

3 (1) relating to the functions of the Office of 

4 Thrift Supervision transferred under section 

5 312(b)(1)(B), shall be transferred to the Office of 

6 the Comptroller of the Currency on the transfer 

7 date; 

8 (2) relating to the functions of the Office of 

9 Thrift Supervision transferred under section 

10 312(b)(1)(C), shall be transferred to the Corporation 

11 on the transfer date; and 

12 (3) relating to the functions of the Office of 

13 Thrift Supervision transferred under section 

14 312(b)(1)(A), shall be transferred to the Board of 

15 Governors on the transfer date. 

16 SEC. 325. DISPOSITION OF AFFAIRS. 

17 (a) AUTHORITY OF DIRECTOR.—During the 90-day 

18 period beginning on the transfer date, the Director of the 

19 Office of Thrift Supervision— 

20 (1) shall, solely for the purpose of winding up 

21 the affairs of the Office of Thrift Supervision relat22 ing to any function transferred to the Office of the 

23 Comptroller of the Currency, the Corporation, or the 

24 Board of Governors under this title— 


sroberts on DSKH9S0YB1PROD with BILLS
365 

•S 3217 AMDT 3739 

1 (A) manage the employees of the Office of 

2 Thrift Supervision who have not yet been trans3 ferred and provide for the payment of the com4 pensation and benefits of the employees that ac5 crue before the date on which the employees are 

6 transferred under this title; and 

7 (B) manage any property of the Office of 

8 Thrift Supervision, until the date on which the 

9 property is transferred under section 323; and 

10 (2) may take any other action necessary to 

11 wind up the affairs of the Office of Thrift Super12 vision. 

13 (b) STATUS OF DIRECTOR.— 

14 (1) IN GENERAL.—Notwithstanding the trans15 fer of functions under this subtitle, during the 90- 

16 day period beginning on the transfer date, the Direc17 tor of the Office of Thrift Supervision shall retain 

18 and may exercise any authority vested in the Direc19 tor of the Office of Thrift Supervision on the day be20 fore the transfer date, only to the extent necessary— 

21 (A) to wind up the Office of Thrift Super22 vision; and 

23 (B) to carry out the transfer under this 

24 subtitle during such 90-day period. 


sroberts on DSKH9S0YB1PROD with BILLS
366 

•S 3217 AMDT 3739 

1 (2) OTHER PROVISIONS.—For purposes of 

2 paragraph (1), the Director of the Office of Thrift 

3 Supervision shall, during the 90-day period begin4 ning on the transfer date, continue to be— 

5 (A) treated as an officer of the United 

6 States; and 

7 (B) entitled to receive compensation at the 

8 same annual rate of basic pay that the Director 

9 of the Office of Thrift Supervision received on 

10 the day before the transfer date. 

11 (c) AUTHORITY OF CHAIRMAN OF THE BOARD OF

12 GOVERNORS.—During the 90-day period beginning on the 

13 transfer date, the Chairman of the Board of Governors 

14 shall— 

15 (1) manage the employees of the Board of Gov16 ernors who have not yet been transferred under this 

17 title and provide for the payment of the compensa18 tion and benefits of the employees that accrue before 

19 the date on which the employees are transferred 

20 under this title; and 

21 (2) manage any property of the Board of Gov22 ernors that is transferred under this title, until the 

23 date on which the property is transferred under sec24 tion 323. 


sroberts on DSKH9S0YB1PROD with BILLS
367 

•S 3217 AMDT 3739 

1 SEC. 326. CONTINUATION OF SERVICES. 

2 Any agency, department, or other instrumentality of 

3 the United States, and any successor to any such agency, 

4 department, or instrumentality, that was, before the trans5 fer date, providing support services to the Office of Thrift 

6 Supervision or the Board of Governors in connection with 

7 functions transferred to the Office of the Comptroller of 

8 the Currency, the Corporation or the Board of Governors 

9 under this title, shall— 

10 (1) continue to provide such services, subject to 

11 reimbursement by the Office of the Comptroller of 

12 the Currency, the Corporation, or the Board of Gov13 ernors, until the transfer of functions under this 

14 title is complete; and 

15 (2) consult with the Comptroller of the Cur16 rency, the Chairperson of the Corporation, or the 

17 Chairman of the Board of Governors, as appro18 priate, to coordinate and facilitate a prompt and or19 derly transition. 

20 Subtitle C—Federal Deposit 

21 Insurance Corporation 

22 SEC. 331. DEPOSIT INSURANCE REFORMS. 

23 (a) SIZE DISTINCTIONS.—Section 7(b)(2) of the Fed24 eral Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is 

25 amended— 

26 (1) by striking subparagraph (D); and 


sroberts on DSKH9S0YB1PROD with BILLS
368 

•S 3217 AMDT 3739 

1 (2) by redesignating subparagraph (C) as sub2 paragraph (D). 

3 (b) ASSESSMENT BASE.— 

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the Corporation shall amend the regula6 tions issued by the Corporation under section 

7 7(b)(2) of the Federal Deposit Insurance Act (12 

8 U.S.C. 1817(b)(2)) to define the term ‘‘assessment 

9 base’’ with respect to an insured depository institu10 tion for purposes of that section 7(b)(2), as an 

11 amount equal to— 

12 (A) the average total consolidated assets of 

13 the insured depository institution during the as14 sessment period; minus 

15 (B) the sum of— 

16 (i) the average tangible equity of the 

17 insured depository institution during the 

18 assessment period; and 

19 (ii) the average long-term unsecured 

20 debt of the insured depository institution 

21 during the assessment period. 

22 (2) DETERMINATION.—If, not later than 1 year 

23 after the date of enactment of this Act, the Corpora24 tion submits to the Committee on Banking, Hous25 ing, and Urban Affairs of the Senate and the ComVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00368 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
369 

•S 3217 AMDT 3739 

1 mittee on Financial Services of the House of Rep2 resentatives, in writing, a finding that an amend3 ment to the rules of the Corporation regarding the 

4 definition of the term ‘‘assessment base’’, as pro5 vided in paragraph (1), would reduce the effective6 ness of the risk-based assessment system of the Cor7 poration or increase the risk of loss to the Deposit 

8 Insurance Fund, the Corporation may— 

9 (A) continue in effect the definition of the 

10 term ‘‘assessment base’’, as in effect on the day 

11 before the date of enactment of this Act; or 

12 (B) establish, by rule, a definition of the 

13 term ‘‘assessment base’’ that the Corporation 

14 deems appropriate. 

15 SEC. 332. MANAGEMENT OF THE FEDERAL DEPOSIT INSUR16 ANCE CORPORATION. 

17 (a) IN GENERAL.—Section 2 of the Federal Deposit 

18 Insurance Act (12 U.S.C. 1812) is amended— 

19 (1) in subsection (a)(1)(B), by striking ‘‘Direc20 tor of the Office of Thrift Supervision’’ and insert21 ing ‘‘Director of the Consumer Financial Protection 

22 Bureau’’; 

23 (2) by amending subsection (d)(2) to read as 

24 follows: 


sroberts on DSKH9S0YB1PROD with BILLS
370 

•S 3217 AMDT 3739 

1 ‘‘(2) ACTING OFFICIALS MAY SERVE.—In the 

2 event of a vacancy in the Office of the Comptroller 

3 of the Currency and pending the appointment of a 

4 successor, or during the absence or disability of the 

5 Comptroller of the Currency, the acting Comptroller 

6 of the Currency shall be a member of the Board of 

7 Directors in the place of the Comptroller of the Cur8 rency.’’; and 

9 (3) in subsection (f)(2), by striking ‘‘or of the 

10 Office of Thrift Supervision’’. 

11 (b) EFFECTIVE DATE.—This section, and the amend12 ments made by this section, shall take effect on the trans13 fer date. 

14 Subtitle D—Termination of Federal 

15 Thrift Charter 

16 SEC. 341. TERMINATION OF FEDERAL SAVINGS ASSOCIA17 TIONS. 

18 (a) IN GENERAL.—Beginning on the date of enact19 ment of this Act, the Director of the Office of Thrift Su20 pervision, or the Comptroller of the Currency, may not 

21 issue a charter for a Federal savings association under 

22 section 5 of the Home Owners’ Loan Act (12 U.S.C. 

23 1464). 


sroberts on DSKH9S0YB1PROD with BILLS
371 

•S 3217 AMDT 3739 

1 (b) CONFORMING AMENDMENT.—Section 5(a) of the 

2 Home Owner’s Loan Act (12 U.S.C. 1464(a)) is amended 

3 to read as follows: 

4 ‘‘(a) IN GENERAL.—In order to provide thrift institu5 tions for the deposit of funds and for the extension of cred6 it for homes and other goods and services, the Comptroller 

7 of the Currency is authorized, under such regulations as 

8 the Comptroller of the Currency may prescribe, to provide 

9 for the examination, operation, and regulation of associa10 tions to be known as ‘Federal savings associations’ (in11 cluding Federal savings banks), giving primary consider12 ation to the best practices of thrift institutions in the 

13 United States. The lending and investment powers con14 ferred by this section are intended to encourage such insti15 tutions to provide credit for housing safely and soundly.’’. 

16 (c) PROSPECTIVE REPEAL.—Effective on the date on 

17 which the Comptroller of the Currency determines that no 

18 Federal savings associations exist, section 5 of the Home 

19 Owner’s Loan Act (12 U.S.C. 1464) is repealed. 

20 SEC. 342. BRANCHING. 

21 Notwithstanding the Federal Deposit Insurance Act 

22 (12 U.S.C. 1811 et seq.), the Bank Holding Company Act 

23 of 1956 (12 U.S.C. 1841 et seq.), or any other provision 

24 of Federal or State law, a savings association that be25 comes a bank may continue to operate any branch or 


sroberts on DSKH9S0YB1PROD with BILLS
372 

•S 3217 AMDT 3739 

1 agency that the savings association operated immediately 

2 before the savings association became a bank. 

3 TITLE IV—REGULATION OF AD4 VISERS TO HEDGE FUNDS 

5 AND OTHERS 

6 SEC. 401. SHORT TITLE. 

7 This title may be cited as the ‘‘Private Fund Invest8 ment Advisers Registration Act of 2010’’. 

9 SEC. 402. DEFINITIONS. 

10 (a) INVESTMENT ADVISERS ACT OF 1940 DEFINI11 TIONS.—Section 202(a) of the Investment Advisers Act of 

12 1940 (15 U.S.C. 80b–2(a)) is amended by adding at the 

13 end the following: 

14 ‘‘(29) The term ‘private fund’ means an issuer 

15 that would be an investment company, as defined in 

16 section 3 of the Investment Company Act of 1940 

17 (15 U.S.C. 80a–3), but for section 3(c)(1) or 3(c)(7) 

18 of that Act. 

19 ‘‘(30) The term ‘foreign private adviser’ means 

20 any investment adviser who— 

21 ‘‘(A) has no place of business in the 

22 United States; 

23 ‘‘(B) has, in total, fewer than 15 clients 

24 who are domiciled in or residents of the United 

25 States; 


sroberts on DSKH9S0YB1PROD with BILLS
373 

•S 3217 AMDT 3739 

1 ‘‘(C) has aggregate assets under manage2 ment attributable to clients in the United 

3 States and investors in the United States in 

4 private funds advised by the investment adviser 

5 of less than $25,000,000, or such higher 

6 amount as the Commission may, by rule, deem 

7 appropriate in accordance with the purposes of 

8 this title; and 

9 ‘‘(D) neither— 

10 ‘‘(i) holds itself out generally to the 

11 public in the United States as an invest12 ment adviser; nor 

13 ‘‘(ii) acts as— 

14 ‘‘(I) an investment adviser to any 

15 investment company registered under 

16 the Investment Company Act of 1940; 

17 or 

18 ‘‘(II) a company that has elected 

19 to be a business development company 

20 pursuant to section 54 of the Invest21 ment Company Act of 1940 (15 

22 U.S.C. 80a–53), and has not with23 drawn its election.’’. 

24 (b) OTHER DEFINITIONS.—As used in this title, the 

25 terms ‘‘investment adviser’’ and ‘‘private fund’’ have the 


sroberts on DSKH9S0YB1PROD with BILLS
374 

•S 3217 AMDT 3739 

1 same meanings as in section 202 of the Investment Advis2 ers Act of 1940, as amended by this title. 

3 SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; 

4 LIMITED EXEMPTION FOR FOREIGN PRIVATE 

5 ADVISERS; LIMITED INTRASTATE EXEMP6 TION. 

7 Section 203(b) of the Investment Advisers Act of 

8 1940 (15 U.S.C. 80b–3(b)) is amended— 

9 (1) in paragraph (1), by inserting ‘‘, other than 

10 an investment adviser who acts as an investment ad11 viser to any private fund,’’ before ‘‘all of whose’’; 

12 (2) by striking paragraph (3) and inserting the 

13 following: 

14 ‘‘(3) any investment adviser that is a foreign 

15 private adviser;’’; and 

16 (3) in paragraph (5), by striking ‘‘or’’ at the 

17 end; 

18 (4) in paragraph (6), by striking the period at 

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

20 (5) by adding at the end the following: 

21 ‘‘(7) any investment adviser, other than any en22 tity that has elected to be regulated or is regulated 

23 as a business development company pursuant to sec24 tion 54 of the Investment Company Act of 1940 (15 

25 U.S.C. 80a–54), who solely advises— 


sroberts on DSKH9S0YB1PROD with BILLS
375 

•S 3217 AMDT 3739 

1 ‘‘(A) small business investment companies 

2 that are licensees under the Small Business In3 vestment Act of 1958; 

4 ‘‘(B) entities that have received from the 

5 Small Business Administration notice to pro6 ceed to qualify for a license as a small business 

7 investment company under the Small Business 

8 Investment Act of 1958, which notice or license 

9 has not been revoked; or 

10 ‘‘(C) applicants that are affiliated with 1 

11 or more licensed small business investment 

12 companies described in subparagraph (A) and 

13 that have applied for another license under the 

14 Small Business Investment Act of 1958, which 

15 application remains pending.’’. 

16 SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; 

17 EXAMINATIONS; DISCLOSURES. 

18 Section 204 of the Investment Advisers Act of 1940 

19 (15 U.S.C. 80b–4) is amended— 

20 (1) by redesignating subsections (b) and (c) as 

21 subsections (c) and (d), respectively; and 

22 (2) by inserting after subsection (a) the fol23 lowing: 

24 ‘‘(b) RECORDS AND REPORTS OF PRIVATE FUNDS.— 


sroberts on DSKH9S0YB1PROD with BILLS
376 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—The Commission may re2 quire any investment adviser registered under this 

3 title— 

4 ‘‘(A) to maintain such records of, and file 

5 with the Commission such reports regarding, 

6 private funds advised by the investment adviser, 

7 as necessary and appropriate in the public in8 terest and for the protection of investors, or for 

9 the assessment of systemic risk by the Finan10 cial Stability Oversight Council (in this sub11 section referred to as the ‘Council’); and 

12 ‘‘(B) to provide or make available to the 

13 Council those reports or records or the informa14 tion contained therein. 

15 ‘‘(2) TREATMENT OF RECORDS.—The records 

16 and reports of any private fund to which an invest17 ment adviser registered under this title provides in18 vestment advice shall be deemed to be the records 

19 and reports of the investment adviser. 

20 ‘‘(3) REQUIRED INFORMATION.—The records 

21 and reports required to be maintained by a private 

22 fund and subject to inspection by the Commission 

23 under this subsection shall include, for each private 

24 fund advised by the investment adviser, a description 

25 of— 


sroberts on DSKH9S0YB1PROD with BILLS
377 

•S 3217 AMDT 3739 

1 ‘‘(A) the amount of assets under manage2 ment and use of leverage; 

3 ‘‘(B) counterparty credit risk exposure; 

4 ‘‘(C) trading and investment positions; 

5 ‘‘(D) valuation policies and practices of the 

6 fund; 

7 ‘‘(E) types of assets held; 

8 ‘‘(F) side arrangements or side letters, 

9 whereby certain investors in a fund obtain more 

10 favorable rights or entitlements than other in11 vestors; 

12 ‘‘(G) trading practices; and 

13 ‘‘(H) such other information as the Com14 mission, in consultation with the Council, deter15 mines is necessary and appropriate in the pub16 lic interest and for the protection of investors 

17 or for the assessment of systemic risk, which 

18 may include the establishment of different re19 porting requirements for different classes of 

20 fund advisers, based on the type or size of pri21 vate fund being advised. 

22 ‘‘(4) MAINTENANCE OF RECORDS.—An invest23 ment adviser registered under this title shall main24 tain such records of private funds advised by the in25 vestment adviser for such period or periods as the 


sroberts on DSKH9S0YB1PROD with BILLS
378 

•S 3217 AMDT 3739 

1 Commission, by rule, may prescribe as necessary and 

2 appropriate in the public interest and for the protec3 tion of investors, or for the assessment of systemic 

4 risk. 

5 ‘‘(5) FILING OF RECORDS.—The Commission 

6 shall issue rules requiring each investment adviser to 

7 a private fund to file reports containing such infor8 mation as the Commission deems necessary and ap9 propriate in the public interest and for the protec10 tion of investors or for the assessment of systemic 

11 risk. 

12 ‘‘(6) EXAMINATION OF RECORDS.— 

13 ‘‘(A) PERIODIC AND SPECIAL EXAMINA14 TIONS.—The Commission— 

15 ‘‘(i) shall conduct periodic inspections 

16 of all records of private funds maintained 

17 by an investment adviser registered under 

18 this title in accordance with a schedule es19 tablished by the Commission; and 

20 ‘‘(ii) may conduct at any time and 

21 from time to time such additional, special, 

22 and other examinations as the Commission 

23 may prescribe as necessary and appro24 priate in the public interest and for the 


sroberts on DSKH9S0YB1PROD with BILLS
379 

•S 3217 AMDT 3739 

1 protection of investors, or for the assess2 ment of systemic risk. 

3 ‘‘(B) AVAILABILITY OF RECORDS.—An in4 vestment adviser registered under this title shall 

5 make available to the Commission any copies or 

6 extracts from such records as may be prepared 

7 without undue effort, expense, or delay, as the 

8 Commission or its representatives may reason9 ably request. 

10 ‘‘(7) INFORMATION SHARING.— 

11 ‘‘(A) IN GENERAL.—The Commission shall 

12 make available to the Council copies of all re13 ports, documents, records, and information filed 

14 with or provided to the Commission by an in15 vestment adviser under this subsection as the 

16 Council may consider necessary for the purpose 

17 of assessing the systemic risk posed by a pri18 vate fund. 

19 ‘‘(B) CONFIDENTIALITY.—The Council 

20 shall maintain the confidentiality of information 

21 received under this paragraph in all such re22 ports, documents, records, and information, in 

23 a manner consistent with the level of confiden24 tiality established by the Commission pursuant 

25 to paragraph (8). The Council shall be exempt 


sroberts on DSKH9S0YB1PROD with BILLS
380 

•S 3217 AMDT 3739 

1 from section 552 of title 5, United States Code, 

2 with respect to any information in any report, 

3 document, record, or information made avail4 able, to the Council under this subsection.’’. 

5 ‘‘(8) COMMISSION CONFIDENTIALITY OF RE6 PORTS.—Notwithstanding any other provision of 

7 law, the Commission may not be compelled to dis8 close any report or information contained therein re9 quired to be filed with the Commission under this 

10 subsection, except that nothing in this subsection 

11 authorizes the Commission— 

12 ‘‘(A) to withhold information from Con13 gress, upon an agreement of confidentiality; or 

14 ‘‘(B) prevent the Commission from com15 plying with— 

16 ‘‘(i) a request for information from 

17 any other Federal department or agency or 

18 any self-regulatory organization requesting 

19 the report or information for purposes 

20 within the scope of its jurisdiction; or 

21 ‘‘(ii) an order of a court of the United 

22 States in an action brought by the United 

23 States or the Commission. 

24 ‘‘(9) OTHER RECIPIENTS CONFIDENTIALITY.— 

25 Any department, agency, or self-regulatory organizaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00380 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
381 

•S 3217 AMDT 3739 

1 tion that receives reports or information from the 

2 Commission under this subsection shall maintain the 

3 confidentiality of such reports, documents, records, 

4 and information in a manner consistent with the 

5 level of confidentiality established for the Commis6 sion under paragraph (8). 

7 ‘‘(10) PUBLIC INFORMATION EXCEPTION.— 

8 ‘‘(A) IN GENERAL.—The Commission, the 

9 Council, and any other department, agency, or 

10 self-regulatory organization that receives infor11 mation, reports, documents, records, or infor12 mation from the Commission under this sub13 section, shall be exempt from the provisions of 

14 section 552 of title 5, United States Code, with 

15 respect to any such report, document, record, or 

16 information. Any proprietary information of an 

17 investment adviser ascertained by the Commis18 sion from any report required to be filed with 

19 the Commission pursuant to this subsection 

20 shall be subject to the same limitations on pub21 lic disclosure as any facts ascertained during an 

22 examination, as provided by section 210(b) of 

23 this title. 


sroberts on DSKH9S0YB1PROD with BILLS
382 

•S 3217 AMDT 3739 

1 ‘‘(B) PROPRIETARY INFORMATION.—For 

2 purposes of this paragraph, proprietary infor3 mation includes— 

4 ‘‘(i) sensitive, non-public information 

5 regarding the investment or trading strate6 gies of the investment adviser; 

7 ‘‘(ii) analytical or research methodolo8 gies; 

9 ‘‘(iii) trading data; 

10 ‘‘(iv) computer hardware or software 

11 containing intellectual property; and 

12 ‘‘(v) any additional information that 

13 the Commission determines to be propri14 etary. 

15 ‘‘(11) ANNUAL REPORT TO CONGRESS.—The 

16 Commission shall report annually to Congress on 

17 how the Commission has used the data collected 

18 pursuant to this subsection to monitor the markets 

19 for the protection of investors and the integrity of 

20 the markets.’’. 

21 SEC. 405. DISCLOSURE PROVISION ELIMINATED. 

22 Section 210(c) of the Investment Advisers Act of 

23 1940 (15 U.S.C. 80b–10(c)) is amended by inserting be24 fore the period at the end the following: ‘‘or for purposes 

25 of assessment of potential systemic risk’’. 


sroberts on DSKH9S0YB1PROD with BILLS
383 

•S 3217 AMDT 3739 

1 SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY. 

2 Section 211 of the Investment Advisers Act of 1940 

3 (15 U.S.C. 80b–11) is amended— 

4 (1) in subsection (a), by inserting before the pe5 riod at the end of the first sentence the following: 

6 ‘‘, including rules and regulations defining technical, 

7 trade, and other terms used in this title, except that 

8 the Commission may not define the term ‘client’ for 

9 purposes of paragraphs (1) and (2) of section 206 

10 to include an investor in a private fund managed by 

11 an investment adviser, if such private fund has en12 tered into an advisory contract with such adviser’’; 

13 and 

14 (2) by adding at the end the following: 

15 ‘‘(e) DISCLOSURE RULES ON PRIVATE FUNDS.—The 

16 Commission and the Commodity Futures Trading Com17 mission shall, after consultation with the Council but not 

18 later than 12 months after the date of enactment of the 

19 Private Fund Investment Advisers Registration Act of 

20 2010, jointly promulgate rules to establish the form and 

21 content of the reports required to be filed with the Com22 mission under subsection 204(b) and with the Commodity 

23 Futures Trading Commission by investment advisers that 

24 are registered both under this title and the Commodity 

25 Exchange Act (7 U.S.C. 1a et seq.).’’. 


sroberts on DSKH9S0YB1PROD with BILLS
384 

•S 3217 AMDT 3739 

1 SEC. 407. EXEMPTION OF VENTURE CAPITAL FUND ADVIS2 ERS. 

3 Section 203 of the Investment Advisers Act of 1940 

4 (15 U.S.C. 80b–3) is amended by adding at the end the 

5 following: 

6 ‘‘(l) EXEMPTION OF VENTURE CAPITAL FUND AD7 VISERS.—No investment adviser shall be subject to the 

8 registration requirements of this title with respect to the 

9 provision of investment advice relating to a venture capital 

10 fund. Not later than 6 months after the date of enactment 

11 of this subsection, the Commission shall issue final rules 

12 to define the term ‘venture capital fund’ for purposes of 

13 this subsection.’’. 

14 SEC. 408. EXEMPTION OF AND RECORD KEEPING BY PRI15 VATE EQUITY FUND ADVISERS. 

16 Section 203 of the Investment Advisers Act of 1940 

17 (15 U.S.C. 80b–3) is amended by adding at the end the 

18 following: 

19 ‘‘(m) EXEMPTION OF AND REPORTING BY PRIVATE

20 EQUITY FUND ADVISERS.— 

21 ‘‘(1) IN GENERAL.—Except as provided in this 

22 subsection, no investment adviser shall be subject to 

23 the registration or reporting requirements of this 

24 title with respect to the provision of investment ad25 vice relating to a private equity fund or funds. 


sroberts on DSKH9S0YB1PROD with BILLS
385 

•S 3217 AMDT 3739 

1 ‘‘(2) MAINTENANCE OF RECORDS AND ACCESS

2 BY COMMISSION.—Not later than 6 months after the 

3 date of enactment of this subsection, the Commis4 sion shall issue final rules— 

5 ‘‘(A) to require investment advisers de6 scribed in paragraph (1) to maintain such 

7 records and provide to the Commission such an8 nual or other reports as the Commission taking 

9 into account fund size, governance, investment 

10 strategy, risk, and other factors, as the Com11 mission determines necessary and appropriate 

12 in the public interest and for the protection of 

13 investors; and 

14 ‘‘(B) to define the term ‘private equity 

15 fund’ for purposes of this subsection.’’. 

16 SEC. 409. FAMILY OFFICES. 

17 (a) IN GENERAL.—Section 202(a)(11) of the Invest18 ment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11)) is 

19 amended by striking ‘‘or (G)’’ and inserting the following: 

20 ‘‘; (G) any family office, as defined by rule, regulation, 

21 or order of the Commission, in accordance with the pur22 poses of this title; or (H)’’. 

23 (b) RULEMAKING.—The rules, regulations, or orders 

24 issued by the Commission pursuant to section 

25 202(a)(11)(G) of the Investment Advisers Act of 1940, as 


sroberts on DSKH9S0YB1PROD with BILLS
386 

•S 3217 AMDT 3739 

1 added by this section, regarding the definition of the term 

2 ‘‘family office’’ shall provide for an exemption that— 

3 (1) is consistent with the previous exemptive 

4 policy of the Commission, as reflected in exemptive 

5 orders for family offices in effect on the date of en6 actment of this Act; and 

7 (2) recognizes the range of organizational, man8 agement, and employment structures and arrange9 ments employed by family offices. 

10 SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET 

11 THRESHOLD FOR FEDERAL REGISTRATION 

12 OF INVESTMENT ADVISERS. 

13 Section 203A(a)(1) of the Investment Advisers Act 

14 of 1940 (15 U.S.C. 80b–3a(a)(1)) is amended — 

15 (1) in subparagraph (A)— 

16 (A) by striking ‘‘$25,000,000’’ and insert17 ing ‘‘$100,000,000’’; and 

18 (B) by striking ‘‘or’’ at the end; 

19 (2) in subparagraph (B), by striking the period 

20 at the end and inserting ‘‘; or’’; and 

21 (3) by adding at the end the following: 

22 ‘‘(C) is an adviser to a company that has 

23 elected to be a business development company 

24 pursuant to section 54 of the Investment ComVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00386 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
387 

•S 3217 AMDT 3739 

1 pany Act of 1940, and has not withdrawn its 

2 election.’’. 

3 SEC. 411. CUSTODY OF CLIENT ASSETS. 

4 The Investment Advisers Act of 1940 (15 U.S.C. 

5 80b–1 et seq.) is amended by adding at the end the fol6 lowing new section: 

7 ‘‘SEC. 223. CUSTODY OF CLIENT ACCOUNTS. 

8 ‘‘An investment adviser registered under this title 

9 shall take such steps to safeguard client assets over which 

10 such adviser has custody, including, without limitation, 

11 verification of such assets by an independent public ac12 countant, as the Commission may, by rule, prescribe.’’. 

13 SEC. 412. ADJUSTING THE ACCREDITED INVESTOR STAND14 ARD FOR INFLATION. 

15 The Commission shall, by rule— 

16 (1) increase the financial threshold for an ac17 credited investor, as set forth in the rules of the 

18 Commission under the Securities Act of 1933, by 

19 calculating an amount that is greater than the 

20 amount in effect on the date of enactment of this 

21 Act of $200,000 income for a natural person (or 

22 $300,000 for a couple) and $1,000,000 in assets, as 

23 the Commission determines is appropriate and in the 

24 public interest, in light of price inflation since those 

25 figures were determined; and 


sroberts on DSKH9S0YB1PROD with BILLS
388 

•S 3217 AMDT 3739 

1 (2) adjust that threshold not less frequently 

2 than once every 5 years, to reflect the percentage in3 crease in the cost of living. 

4 SEC. 413. GAO STUDY AND REPORT ON ACCREDITED INVES5 TORS. 

6 The Comptroller General of the United States shall 

7 conduct a study on the appropriate criteria for deter8 mining the financial thresholds or other criteria needed 

9 to qualify for accredited investor status and eligibility to 

10 invest in private funds, and shall submit a report to the 

11 Committee on Banking, Housing, and Urban Affairs of 

12 the Senate and the Committee on Financial Services of 

13 the House of Representatives on the results of such study 

14 not later than 1 year after the date of enactment of this 

15 Act. 

16 SEC. 414. GAO STUDY ON SELF-REGULATORY ORGANIZA17 TION FOR PRIVATE FUNDS. 

18 The Comptroller General of the United States shall— 

19 (1) conduct a study of the feasibility of forming 

20 a self-regulatory organization to oversee private 

21 funds; and 

22 (2) submit a report to the Committee on Bank23 ing, Housing, and Urban Affairs of the Senate and 

24 the Committee on Financial Services of the House of 

25 Representatives on the results of such study, not 


sroberts on DSKH9S0YB1PROD with BILLS
389 

•S 3217 AMDT 3739 

1 later than 1 year after the date of enactment of this 

2 Act. 

3 SEC. 415. COMMISSION STUDY AND REPORT ON SHORT 

4 SELLING. 

5 (a) STUDY.—The Division of Risk, Strategy, and Fi6 nancial Innovation of the Commission shall conduct a 

7 study, taking into account current scholarship, on the 

8 state of short selling on national securities exchanges and 

9 in the over-the-counter markets, with particular attention 

10 to the impact of recent rule changes and the incidence 

11 of— 

12 (1) the failure to deliver shares sold short; or 

13 (2) delivery of shares on the fourth day fol14 lowing the short sale transaction. 

15 (b) REPORT.—The Division of Risk, Strategy, and 

16 Financial Innovation shall submit a report, together with 

17 any recommendations for market improvements, including 

18 consideration of real time reporting of short sale positions, 

19 to the Committee on Banking, Housing, and Urban Af20 fairs of the Senate and the Committee on Financial Serv21 ices of the House of Representatives on the results of the 

22 study conducted under subsection (a), not later than 2 

23 years after the date of enactment of this Act. 


sroberts on DSKH9S0YB1PROD with BILLS
390 

•S 3217 AMDT 3739 

1 SEC. 416. TRANSITION PERIOD. 

2 Except as otherwise provided in this title, this title 

3 and the amendments made by this title shall become effec4 tive 1 year after the date of enactment of this Act, except 

5 that any investment adviser may, at the discretion of the 

6 investment adviser, register with the Commission under 

7 the Investment Advisers Act of 1940 during that 1-year 

8 period, subject to the rules of the Commission. 

9 TITLE V—INSURANCE 

10 Subtitle A—Office of National 

11 Insurance 

12 SEC. 501. SHORT TITLE. 

13 This subtitle may be cited as the ‘‘Office of National 

14 Insurance Act of 2010’’. 

15 SEC. 502. ESTABLISHMENT OF OFFICE OF NATIONAL IN16 SURANCE. 

17 (a) ESTABLISHMENT OF OFFICE.—Subchapter I of 

18 chapter 3 of subtitle I of title 31, United States Code, 

19 is amended— 

20 (1) by redesignating section 312 as section 315; 

21 (2) by redesignating section 313 as section 312; 

22 and 

23 (3) by inserting after section 312 (as so redes24 ignated) the following new sections: 


sroberts on DSKH9S0YB1PROD with BILLS
391 

•S 3217 AMDT 3739 

1 ‘‘SEC. 313. OFFICE OF NATIONAL INSURANCE. 

2 ‘‘(a) ESTABLISHMENT.—There is established within 

3 the Department of the Treasury the Office of National 

4 Insurance. 

5 ‘‘(b) LEADERSHIP.—The Office shall be headed by a 

6 Director, who shall be appointed by the Secretary of the 

7 Treasury. The position of Director shall be a career re8 served position in the Senior Executive Service, as that 

9 position is defined under section 3132 of title 5, United 

10 States Code. 

11 ‘‘(c) FUNCTIONS.— 

12 ‘‘(1) AUTHORITY PURSUANT TO DIRECTION OF

13 SECRETARY.—The Office, pursuant to the direction 

14 of the Secretary, shall have the authority— 

15 ‘‘(A) to monitor all aspects of the insur16 ance industry, including identifying issues or 

17 gaps in the regulation of insurers that could 

18 contribute to a systemic crisis in the insurance 

19 industry or the United States financial system; 

20 ‘‘(B) to recommend to the Financial Sta21 bility Oversight Council that it designate an in22 surer, including the affiliates of such insurer, as 

23 an entity subject to regulation as a nonbank fi24 nancial company supervised by the Board of 

25 Governors pursuant to title I of the Restoring 

26 American Financial Stability Act of 2010; 


sroberts on DSKH9S0YB1PROD with BILLS
392 

•S 3217 AMDT 3739 

1 ‘‘(C) to assist the Secretary in admin2 istering the Terrorism Insurance Program es3 tablished in the Department of the Treasury 

4 under the Terrorism Risk Insurance Act of 

5 2002 (15 U.S.C. 6701 note); 

6 ‘‘(D) to coordinate Federal efforts and de7 velop Federal policy on prudential aspects of 

8 international insurance matters, including rep9 resenting the United States, as appropriate, in 

10 the International Association of Insurance Su11 pervisors (or a successor entity) and assisting 

12 the Secretary in negotiating International In13 surance Agreements on Prudential Measures; 

14 ‘‘(E) to determine, in accordance with sub15 section (f), whether State insurance measures 

16 are preempted by International Insurance 

17 Agreements on Prudential Measures; 

18 ‘‘(F) to consult with the States (including 

19 State insurance regulators) regarding insurance 

20 matters of national importance and prudential 

21 insurance matters of international importance; 

22 and 

23 ‘‘(G) to perform such other related duties 

24 and authorities as may be assigned to the Of25 fice by the Secretary. 


sroberts on DSKH9S0YB1PROD with BILLS
393 

•S 3217 AMDT 3739 

1 ‘‘(2) ADVISORY FUNCTIONS.—The Office shall 

2 advise the Secretary on major domestic and pruden3 tial international insurance policy issues. 

4 ‘‘(d) SCOPE.—The authority of the Office shall ex5 tend to all lines of insurance except health insurance, as 

6 such insurance is determined by the Secretary based on 

7 section 2791 of the Public Health Service Act (42 U.S.C. 

8 300gg–91), and crop insurance, as established by the Fed9 eral Crop Insurance Act (7 U.S.C. 1501 et seq.). 

10 ‘‘(e) GATHERING OF INFORMATION.— 

11 ‘‘(1) IN GENERAL.—In carrying out the func12 tions required under subsection (c), the Office 

13 may— 

14 ‘‘(A) receive and collect data and informa15 tion on and from the insurance industry and in16 surers; 

17 ‘‘(B) enter into information-sharing agree18 ments; 

19 ‘‘(C) analyze and disseminate data and in20 formation; and 

21 ‘‘(D) issue reports regarding all lines of in22 surance except health insurance. 

23 ‘‘(2) COLLECTION OF INFORMATION FROM IN24 SURERS AND AFFILIATES.— 


sroberts on DSKH9S0YB1PROD with BILLS
394 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—Except as provided in 

2 paragraph (3), the Office may require an in3 surer, or any affiliate of an insurer, to submit 

4 such data or information as the Office may rea5 sonably require in carrying out the functions 

6 described under subsection (c). 

7 ‘‘(B) RULE OF CONSTRUCTION.—Notwith8 standing any other provision of this section, for 

9 purposes of subparagraph (A), the term ’in10 surer’ means any person that is authorized to 

11 write insurance or reinsure risks and issue con12 tracts or policies in 1 or more States. 

13 ‘‘(3) EXCEPTION FOR SMALL INSURERS.—Para14 graph (2) shall not apply with respect to any insurer 

15 or affiliate thereof that meets a minimum size 

16 threshold that the Office may establish, whether by 

17 order or rule. 

18 ‘‘(4) ADVANCE COORDINATION.—Before col19 lecting any data or information under paragraph (2) 

20 from an insurer, or any affiliate of an insurer, the 

21 Office shall coordinate with each relevant State in22 surance regulator (or other relevant Federal or State 

23 regulatory agency, if any, in the case of an affiliate 

24 of an insurer) to determine if the information to be 

25 collected is available from, or may be obtained in a 


sroberts on DSKH9S0YB1PROD with BILLS
395 

•S 3217 AMDT 3739 

1 timely manner by, such State insurance regulator, 

2 individually or collectively, another regulatory agen3 cy, or publicly available sources. Notwithstanding 

4 any other provision of law, each such relevant State 

5 insurance regulator or other Federal or State regu6 latory agency is authorized to provide to the Office 

7 such data or information. 

8 ‘‘(5) CONFIDENTIALITY.— 

9 ‘‘(A) RETENTION OF PRIVILEGE.—The 

10 submission of any nonpublicly available data 

11 and information to the Office under this sub12 section shall not constitute a waiver of, or oth13 erwise affect, any privilege arising under Fed14 eral or State law (including the rules of any 

15 Federal or State court) to which the data or in16 formation is otherwise subject. 

17 ‘‘(B) CONTINUED APPLICATION OF PRIOR

18 CONFIDENTIALITY AGREEMENTS.—Any require19 ment under Federal or State law to the extent 

20 otherwise applicable, or any requirement pursu21 ant to a written agreement in effect between 

22 the original source of any nonpublicly available 

23 data or information and the source of such data 

24 or information to the Office, regarding the pri25 vacy or confidentiality of any data or informaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00395 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
396 

•S 3217 AMDT 3739 

1 tion in the possession of the source to the Of2 fice, shall continue to apply to such data or in3 formation after the data or information has 

4 been provided pursuant to this subsection to the 

5 Office. 

6 ‘‘(C) INFORMATION SHARING AGREE7 MENT.—Any data or information obtained by 

8 the Office may be made available to State in9 surance regulators, individually or collectively, 

10 through an information sharing agreement 

11 that— 

12 ‘‘(i) shall comply with applicable Fed13 eral law; and 

14 ‘‘(ii) shall not constitute a waiver of, 

15 or otherwise affect, any privilege under 

16 Federal or State law (including the rules 

17 of any Federal or State Court) to which 

18 the data or information is otherwise sub19 ject. 

20 ‘‘(D) AGENCY DISCLOSURE REQUIRE21 MENTS.—Section 552 of title 5, United States 

22 Code, shall apply to any data or information 

23 submitted to the Office by an insurer or an af24 filiate of an insurer. 


sroberts on DSKH9S0YB1PROD with BILLS
397 

•S 3217 AMDT 3739 

1 ‘‘(6) SUBPOENAS AND ENFORCEMENT.—The 

2 Director shall have the power to require by subpoena 

3 the production of the data or information requested 

4 under paragraph (2), but only upon a written find5 ing by the Director that such data or information is 

6 required to carry out the functions described under 

7 subsection (c) and that the Office has coordinated 

8 with such regulator or agency as required under 

9 paragraph (4). Subpoenas shall bear the signature of 

10 the Director and shall be served by any person or 

11 class of persons designated by the Director for that 

12 purpose. In the case of contumacy or failure to obey 

13 a subpoena, the subpoena shall be enforceable by 

14 order of any appropriate district court of the United 

15 States. Any failure to obey the order of the court 

16 may be punished by the court as a contempt of 

17 court. 

18 ‘‘(f) PREEMPTION OF STATE INSURANCE MEAS19 URES.— 

20 ‘‘(1) STANDARD.—A State insurance measure 

21 shall be preempted if, and only to the extent that the 

22 Director determines, in accordance with this sub23 section, that the measure— 

24 ‘‘(A) results in less favorable treatment of 

25 a non-United States insurer domiciled in a forVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00397 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
398 

•S 3217 AMDT 3739 

1 eign jurisdiction that is subject to an inter2 national insurance agreement on prudential 

3 measures than a United States insurer domi4 ciled, licensed, or otherwise admitted in that 

5 State; and 

6 ‘‘(B) is inconsistent with an International 

7 Insurance Agreement on Prudential Measures. 

8 ‘‘(2) DETERMINATION.— 

9 ‘‘(A) NOTICE OF POTENTIAL INCONSIST10 ENCY.—Before making any determination 

11 under paragraph (1), the Director shall— 

12 ‘‘(i) notify and consult with the appro13 priate State regarding any potential incon14 sistency or preemption; 

15 ‘‘(ii) cause to be published in the Fed16 eral Register notice of the issue regarding 

17 the potential inconsistency or preemption, 

18 including a description of each State insur19 ance measure at issue and any applicable 

20 International Insurance Agreement on 

21 Prudential Measures; 

22 ‘‘(iii) provide interested parties a rea23 sonable opportunity to submit written com24 ments to the Office; and 

25 ‘‘(iv) consider any comments received. 


sroberts on DSKH9S0YB1PROD with BILLS
399 

•S 3217 AMDT 3739 

1 ‘‘(B) SCOPE OF REVIEW.—For purposes of 

2 this subsection, the determination of the Direc3 tor regarding State insurance measures shall be 

4 limited to the subject matter contained within 

5 the international insurance agreement on pru6 dential measure involved. 

7 ‘‘(C) NOTICE OF DETERMINATION OF IN8 CONSISTENCY.—Upon making any determina9 tion under paragraph (1), the Director shall— 

10 ‘‘(i) notify the appropriate State of 

11 the determination and the extent of the in12 consistency; 

13 ‘‘(ii) establish a reasonable period of 

14 time, which shall not be less than 30 days, 

15 before the determination shall become ef16 fective; and 

17 ‘‘(iii) notify the Committee on Bank18 ing, Housing, and Urban Affairs of the 

19 Senate and the Committee on Financial 

20 Services of the House of Representatives of 

21 the inconsistency. 

22 ‘‘(3) NOTICE OF EFFECTIVENESS.—Upon the 

23 conclusion of the period referred to in paragraph 

24 (2)(C)(ii), if the basis for such determination still 


sroberts on DSKH9S0YB1PROD with BILLS
400 

•S 3217 AMDT 3739 

1 exists, the determination shall become effective and 

2 the Director shall— 

3 ‘‘(A) cause to be published a notice in the 

4 Federal Register that the preemption has be5 come effective, as well as the effective date; and 

6 ‘‘(B) notify the appropriate State. 

7 ‘‘(4) LIMITATION.—No State may enforce a 

8 State insurance measure to the extent that such 

9 measure has been preempted under this subsection. 

10 ‘‘(g) APPLICABILITY OF ADMINISTRATIVE PROCE11 DURES ACT.—Determinations of inconsistency made pur12 suant to subsection (f)(2) shall be subject to the applicable 

13 provisions of subchapter II of chapter 5 of title 5, United 

14 States Code (relating to administrative procedure), and 

15 chapter 7 of such title (relating to judicial review). 

16 ‘‘(h) REGULATIONS, POLICIES, AND PROCEDURES.— 

17 The Secretary may issue orders, regulations, policies, and 

18 procedures to implement this section. 

19 ‘‘(i) CONSULTATION.—The Director shall consult 

20 with State insurance regulators, individually or collec21 tively, to the extent the Director determines appropriate, 

22 in carrying out the functions of the Office. 

23 ‘‘(j) SAVINGS PROVISIONS.—Nothing in this section 

24 shall— 

25 ‘‘(1) preempt— 


sroberts on DSKH9S0YB1PROD with BILLS
401 

•S 3217 AMDT 3739 

1 ‘‘(A) any State insurance measure that 

2 governs any insurer’s rates, premiums, under3 writing, or sales practices; 

4 ‘‘(B) any State coverage requirements for 

5 insurance; 

6 ‘‘(C) the application of the antitrust laws 

7 of any State to the business of insurance; or 

8 ‘‘(D) any State insurance measure gov9 erning the capital or solvency of an insurer, ex10 cept to the extent that such State insurance 

11 measure results in less favorable treatment of a 

12 non-United State insurer than a United States 

13 insurer; 

14 ‘‘(2) be construed to alter, amend, or limit any 

15 provision of the Consumer Financial Protection 

16 Agency Act of 2010; or 

17 ‘‘(3) affect the preemption of any State insur18 ance measure otherwise inconsistent with and pre19 empted by Federal law. 

20 ‘‘(k) RETENTION OF EXISTING STATE REGULATORY

21 AUTHORITY.—Nothing in this section or section 314 shall 

22 be construed to establish or provide the Office or the De23 partment of the Treasury with general supervisory or reg24 ulatory authority over the business of insurance. 


sroberts on DSKH9S0YB1PROD with BILLS
402 

•S 3217 AMDT 3739 

1 ‘‘(l) ANNUAL REPORT TO CONGRESS.—Beginning 

2 September 30, 2011, the Director shall submit a report 

3 on or before September 30 of each calendar year to the 

4 President and to the Committee on Banking, Housing, 

5 and Urban Affairs of the Senate and the Committee on 

6 Financial Services of the House of Representatives on the 

7 insurance industry, any actions taken by the Office pursu8 ant to subsection (f) (regarding preemption of inconsistent 

9 State insurance measures), and any other information as 

10 deemed relevant by the Director or as requested by such 

11 Committees. 

12 ‘‘(m) STUDY AND REPORT ON REGULATION OF IN13 SURANCE.— 

14 ‘‘(1) IN GENERAL.—Not later than 18 months 

15 after the date of enactment of this section, the Di16 rector shall conduct a study and submit a report to 

17 Congress on how to modernize and improve the sys18 tem of insurance regulation in the United States. 

19 ‘‘(2) CONSIDERATIONS.—The study and report 

20 required under paragraph (1) shall be based on and 

21 guided by the following considerations: 

22 ‘‘(A) Systemic risk regulation with respect 

23 to insurance. 

24 ‘‘(B) Capital standards and the relation25 ship between capital allocation and liabilities, 


sroberts on DSKH9S0YB1PROD with BILLS
403 

•S 3217 AMDT 3739 

1 including standards relating to liquidity and du2 ration risk. 

3 ‘‘(C) Consumer protection for insurance 

4 products and practices, including gaps in state 

5 regulation. 

6 ‘‘(D) The degree of national uniformity of 

7 state insurance regulation. 

8 ‘‘(E) The regulation of insurance compa9 nies and affiliates on a consolidated basis. 

10 ‘‘(F) International coordination of insur11 ance regulation. 

12 ‘‘(3) ADDITIONAL FACTORS.—The study and 

13 report required under paragraph (1) shall also exam14 ine the following factors: 

15 ‘‘(A) The costs and benefits of potential 

16 Federal regulation of insurance across various 

17 lines of insurance (except health insurance). 

18 ‘‘(B) The feasibility of regulating only cer19 tain lines of insurance at the Federal level, 

20 while leaving other lines of insurance to be reg21 ulated at the State level. 

22 ‘‘(C) The ability of any potential Federal 

23 regulation or Federal regulators to eliminate or 

24 minimize regulatory arbitrage. 


sroberts on DSKH9S0YB1PROD with BILLS
404 

•S 3217 AMDT 3739 

1 ‘‘(D) The impact that developments in the 

2 regulation of insurance in foreign jurisdictions 

3 might have on the potential Federal regulation 

4 of insurance. 

5 ‘‘(E) The ability of any potential Federal 

6 regulation or Federal regulator to provide ro7 bust consumer protection for policyholders. 

8 ‘‘(F) The potential consequences of sub9 jecting insurance companies to a Federal reso10 lution authority, including the effects of any 

11 Federal resolution authority— 

12 ‘‘(i) on the operation of State insur13 ance guaranty fund systems, including the 

14 loss of guaranty fund coverage if an insur15 ance company is subject to a Federal reso16 lution authority; 

17 ‘‘(ii) on policyholder protection, in18 cluding the loss of the priority status of 

19 policyholder claims over other unsecured 

20 general creditor claims; 

21 ‘‘(iii) in the case of life insurance 

22 companies, the loss of the special status of 

23 separate account assets and separate ac24 count liabilities; and 


sroberts on DSKH9S0YB1PROD with BILLS
405 

•S 3217 AMDT 3739 

1 ‘‘(iv) on the international competitive2 ness of insurance companies. 

3 ‘‘(G) Such other factors as the Director 

4 determines necessary or appropriate, consistent 

5 with the principles set forth in paragraph (2). 

6 ‘‘(4) REQUIRED RECOMMENDATIONS.—The 

7 study and report required under paragraph (1) shall 

8 also contain any legislative, administrative, or regu9 latory recommendations, as the Director determines 

10 appropriate, to carry out or effectuate the findings 

11 set forth in such report. 

12 ‘‘(5) CONSULTATION.—With respect to the 

13 study and report required under paragraph (1), the 

14 Director shall consult with the National Association 

15 of Insurance Commissioners, consumer organiza16 tions, representatives of the insurance industry and 

17 policyholders, and other organizations and experts, 

18 as appropriate. 

19 ‘‘(n) USE OF EXISTING RESOURCES.—To carry out 

20 this section, the Office may employ personnel, facilities, 

21 and any other resource of the Department of the Treasury 

22 available to the Secretary. 

23 ‘‘(o) DEFINITIONS.—In this section and section 314, 

24 the following definitions shall apply: 


sroberts on DSKH9S0YB1PROD with BILLS
406 

•S 3217 AMDT 3739 

1 ‘‘(1) AFFILIATE.—The term ‘affiliate’ means, 

2 with respect to an insurer, any person who controls, 

3 is controlled by, or is under common control with the 

4 insurer. 

5 ‘‘(2) INSURER.—The term ‘insurer’ means any 

6 person engaged in the business of insurance, includ7 ing reinsurance. 

8 ‘‘(3) INTERNATIONAL INSURANCE AGREEMENT

9 ON PRUDENTIAL MEASURES.—The term ‘Inter10 national Insurance Agreement on Prudential Meas11 ures’ means a written bilateral or multilateral agree12 ment entered into between the United States and a 

13 foreign government, authority, or regulatory entity 

14 regarding prudential measures applicable to the 

15 business of insurance or reinsurance. 

16 ‘‘(4) NON-UNITED STATES INSURER.—The term 

17 ‘non-United States insurer’ means an insurer that is 

18 organized under the laws of a jurisdiction other than 

19 a State, but does not include any United States 

20 branch of such an insurer. 

21 ‘‘(5) OFFICE.—The term ‘Office’ means the Of22 fice of National Insurance established by this sec23 tion. 

24 ‘‘(6) STATE INSURANCE MEASURE.—The term 

25 ‘State insurance measure’ means any State law, regVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00406 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
407 

•S 3217 AMDT 3739 

1 ulation, administrative ruling, bulletin, guideline, or 

2 practice relating to or affecting prudential measures 

3 applicable to insurance or reinsurance. 

4 ‘‘(7) STATE INSURANCE REGULATOR.—The 

5 term ‘State insurance regulator’ means any State 

6 regulatory authority responsible for the supervision 

7 of insurers. 

8 ‘‘(8) UNITED STATES INSURER.—The term 

9 ‘United States insurer’ means— 

10 ‘‘(A) an insurer that is organized under 

11 the laws of a State; or 

12 ‘‘(B) a United States branch of a non13 United States insurer. 

14 ‘‘(p) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated for the Office for each 

16 fiscal year such sums as may be necessary. 

17 ‘‘SEC. 314. INTERNATIONAL INSURANCE AGREEMENTS ON 

18 PRUDENTIAL MEASURES. 

19 ‘‘(a) IN GENERAL.—The Secretary of the Treasury 

20 is authorized to negotiate and enter into International In21 surance Agreements on Prudential Measures on behalf of 

22 the United States. 

23 ‘‘(b) SAVINGS PROVISION.—Nothing in this section or 

24 section 313 shall be construed to affect the development 

25 and coordination of United States international trade polVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00407 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
408 

•S 3217 AMDT 3739 

1 icy or the administration of the United States trade agree2 ments program. It is to be understood that the negotiation 

3 of International Insurance Agreements on Prudential 

4 Measures under such sections is consistent with the re5 quirement of this subsection. 

6 ‘‘(c) CONSULTATION.—The Secretary shall consult 

7 with the United States Trade Representative on the nego8 tiation of International Insurance Agreements on Pruden9 tial Measures, including prior to initiating and concluding 

10 any such agreements.’’. 

11 (b) DUTIES OF SECRETARY.—Section 321(a) of title 

12 31, United States Code, is amended— 

13 (1) in paragraph (7), by striking ‘‘; and’’ and 

14 inserting a semicolon; 

15 (2) in paragraph (8)(C), by striking the period 

16 at the end and inserting ‘‘; and’’; and 

17 (3) by adding at the end the following new 

18 paragraph: 

19 ‘‘(9) advise the President on major domestic 

20 and international prudential policy issues in connec21 tion with all lines of insurance except health insur22 ance.’’. 

23 (c) CLERICAL AMENDMENT.—The table of sections 

24 for subchapter I of chapter 3 of title 31, United States 


sroberts on DSKH9S0YB1PROD with BILLS
409 

•S 3217 AMDT 3739 

1 Code, is amended by striking the item relating to section 

2 312 and inserting the following new items: 

‘‘Sec. 312. Terrorism and financial intelligence. 

‘‘Sec. 313. Office of National Insurance. 

‘‘Sec. 314. International insurance agreements on prudential measures. 

‘‘Sec. 315. Continuing in office.’’. 

3 Subtitle B—State-based Insurance 

4 Reform 

5 SEC. 511. SHORT TITLE. 

6 This subtitle may be cited as the ‘‘Nonadmitted and 

7 Reinsurance Reform Act of 2010’’. 

8 SEC. 512. EFFECTIVE DATE. 

9 Except as otherwise specifically provided in this sub10 title, this subtitle shall take effect upon the expiration of 

11 the 12-month period beginning on the date of the enact12 ment of this subtitle. 

13 PART I—NONADMITTED INSURANCE 

14 SEC. 521. REPORTING, PAYMENT, AND ALLOCATION OF 

15 PREMIUM TAXES. 

16 (a) HOME STATE’S EXCLUSIVE AUTHORITY.—No 

17 State other than the home State of an insured may require 

18 any premium tax payment for nonadmitted insurance. 

19 (b) ALLOCATION OF NONADMITTED PREMIUM

20 TAXES.— 

21 (1) IN GENERAL.—The States may enter into a 

22 compact or otherwise establish procedures to allocate 


sroberts on DSKH9S0YB1PROD with BILLS
410 

•S 3217 AMDT 3739 

1 among the States the premium taxes paid to an in2 sured’s home State described in subsection (a). 

3 (2) EFFECTIVE DATE.—Except as expressly 

4 otherwise provided in such compact or other proce5 dures, any such compact or other procedures— 

6 (A) if adopted on or before the expiration 

7 of the 330-day period that begins on the date 

8 of the enactment of this subtitle, shall apply to 

9 any premium taxes that, on or after such date 

10 of enactment, are required to be paid to any 

11 State that is subject to such compact or proce12 dures; and 

13 (B) if adopted after the expiration of such 

14 330-day period, shall apply to any premium 

15 taxes that, on or after January 1 of the first 

16 calendar year that begins after the expiration of 

17 such 330-day period, are required to be paid to 

18 any State that is subject to such compact or 

19 procedures. 

20 (3) REPORT.—Upon the expiration of the 330- 

21 day period referred to in paragraph (2), the NAIC 

22 may submit a report to the Committee on Financial 

23 Services and Committee on the Judiciary of the 

24 House of Representatives and the Committee on 

25 Banking, Housing, and Urban Affairs of the Senate 


sroberts on DSKH9S0YB1PROD with BILLS
411 

•S 3217 AMDT 3739 

1 identifying and describing any compact or other pro2 cedures for allocation among the States of premium 

3 taxes that have been adopted during such period by 

4 any States. 

5 (4) NATIONWIDE SYSTEM.—The Congress in6 tends that each State adopt nationwide uniform re7 quirements, forms, and procedures, such as an inter8 state compact, that provides for the reporting, pay9 ment, collection, and allocation of premium taxes for 

10 nonadmitted insurance consistent with this section. 

11 (c) ALLOCATION BASED ON TAX ALLOCATION RE12 PORT.—To facilitate the payment of premium taxes 

13 among the States, an insured’s home State may require 

14 surplus lines brokers and insureds who have independently 

15 procured insurance to annually file tax allocation reports 

16 with the insured’s home State detailing the portion of the 

17 nonadmitted insurance policy premium or premiums at18 tributable to properties, risks, or exposures located in each 

19 State. The filing of a nonadmitted insurance tax allocation 

20 report and the payment of tax may be made by a person 

21 authorized by the insured to act as its agent. 

22 SEC. 522. REGULATION OF NONADMITTED INSURANCE BY 

23 INSURED’S HOME STATE. 

24 (a) HOME STATE AUTHORITY.—Except as otherwise 

25 provided in this section, the placement of nonadmitted inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00411 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
412 

•S 3217 AMDT 3739 

1 surance shall be subject to the statutory and regulatory 

2 requirements solely of the insured’s home State. 

3 (b) BROKER LICENSING.—No State other than an in4 sured’s home State may require a surplus lines broker to 

5 be licensed in order to sell, solicit, or negotiate non6 admitted insurance with respect to such insured. 

7 (c) ENFORCEMENT PROVISION.—With respect to sec8 tion 521 and subsections (a) and (b) of this section, any 

9 law, regulation, provision, or action of any State that ap10 plies or purports to apply to nonadmitted insurance sold 

11 to, solicited by, or negotiated with an insured whose home 

12 State is another State shall be preempted with respect to 

13 such application. 

14 (d) WORKERS’ COMPENSATION EXCEPTION.—This 

15 section may not be construed to preempt any State law, 

16 rule, or regulation that restricts the placement of workers’ 

17 compensation insurance or excess insurance for self-fund18 ed workers’ compensation plans with a nonadmitted in19 surer. 

20 SEC. 523. PARTICIPATION IN NATIONAL PRODUCER DATA21 BASE. 

22 After the expiration of the 2-year period beginning 

23 on the date of the enactment of this subtitle, a State may 

24 not collect any fees relating to licensing of an individual 

25 or entity as a surplus lines broker in the State unless the 


sroberts on DSKH9S0YB1PROD with BILLS
413 

•S 3217 AMDT 3739 

1 State has in effect at such time laws or regulations that 

2 provide for participation by the State in the national in3 surance producer database of the NAIC, or any other 

4 equivalent uniform national database, for the licensure of 

5 surplus lines brokers and the renewal of such licenses. 

6 SEC. 524. UNIFORM STANDARDS FOR SURPLUS LINES ELI7 GIBILITY. 

8 A State may not— 

9 (1) impose eligibility requirements on, or other10 wise establish eligibility criteria for, nonadmitted in11 surers domiciled in a United States jurisdiction, ex12 cept in conformance with such requirements and cri13 teria in sections 5A(2) and 5C(2)(a) of the Non-Ad14 mitted Insurance Model Act, unless the State has 

15 adopted nationwide uniform requirements, forms, 

16 and procedures developed in accordance with section 

17 521(b) of this subtitle that include alternative na18 tionwide uniform eligibility requirements; or 

19 (2) prohibit a surplus lines broker from placing 

20 nonadmitted insurance with, or procuring non21 admitted insurance from, a nonadmitted insurer 

22 domiciled outside the United States that is listed on 

23 the Quarterly Listing of Alien Insurers maintained 

24 by the International Insurers Department of the 

25 NAIC. 


sroberts on DSKH9S0YB1PROD with BILLS
414 

•S 3217 AMDT 3739 

1 SEC. 525. STREAMLINED APPLICATION FOR COMMERCIAL 

2 PURCHASERS. 

3 A surplus lines broker seeking to procure or place 

4 nonadmitted insurance in a State for an exempt commer5 cial purchaser shall not be required to satisfy any State 

6 requirement to make a due diligence search to determine 

7 whether the full amount or type of insurance sought by 

8 such exempt commercial purchaser can be obtained from 

9 admitted insurers if— 

10 (1) the broker procuring or placing the surplus 

11 lines insurance has disclosed to the exempt commer12 cial purchaser that such insurance may or may not 

13 be available from the admitted market that may pro14 vide greater protection with more regulatory over15 sight; and 

16 (2) the exempt commercial purchaser has sub17 sequently requested in writing the broker to procure 

18 or place such insurance from a nonadmitted insurer. 

19 SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MAR20 KET. 

21 (a) IN GENERAL.—The Comptroller General of the 

22 United States shall conduct a study of the nonadmitted 

23 insurance market to determine the effect of the enactment 

24 of this part on the size and market share of the non25 admitted insurance market for providing coverage typi26 cally provided by the admitted insurance market. 


sroberts on DSKH9S0YB1PROD with BILLS
415 

•S 3217 AMDT 3739 

1 (b) CONTENTS.—The study shall determine and ana2 lyze— 

3 (1) the change in the size and market share of 

4 the nonadmitted insurance market and in the num5 ber of insurance companies and insurance holding 

6 companies providing such business in the 18-month 

7 period that begins upon the effective date of this 

8 subtitle; 

9 (2) the extent to which insurance coverage typi10 cally provided by the admitted insurance market has 

11 shifted to the nonadmitted insurance market; 

12 (3) the consequences of any change in the size 

13 and market share of the nonadmitted insurance 

14 market, including differences in the price and avail15 ability of coverage available in both the admitted 

16 and nonadmitted insurance markets; 

17 (4) the extent to which insurance companies 

18 and insurance holding companies that provide both 

19 admitted and nonadmitted insurance have experi20 enced shifts in the volume of business between ad21 mitted and nonadmitted insurance; and 

22 (5) the extent to which there has been a change 

23 in the number of individuals who have nonadmitted 

24 insurance policies, the type of coverage provided 


sroberts on DSKH9S0YB1PROD with BILLS
416 

•S 3217 AMDT 3739 

1 under such policies, and whether such coverage is 

2 available in the admitted insurance market. 

3 (c) CONSULTATION WITH NAIC.—In conducting the 

4 study under this section, the Comptroller General shall 

5 consult with the NAIC. 

6 (d) REPORT.—The Comptroller General shall com7 plete the study under this section and submit a report to 

8 the Committee on Banking, Housing, and Urban Affairs 

9 of the Senate and the Committee on Financial Services 

10 of the House of Representatives regarding the findings of 

11 the study not later than 30 months after the effective date 

12 of this subtitle. 

13 SEC. 527. DEFINITIONS. 

14 For purposes of this part, the following definitions 

15 shall apply: 

16 (1) ADMITTED INSURER.—The term ‘‘admitted 

17 insurer’’ means, with respect to a State, an insurer 

18 licensed to engage in the business of insurance in 

19 such State. 

20 (2) AFFILIATE.—The term ‘‘affiliate’’ means, 

21 with respect to an insured, any entity that controls, 

22 is controlled by, or is under common control with the 

23 insured. 


sroberts on DSKH9S0YB1PROD with BILLS
417 

•S 3217 AMDT 3739 

1 (3) AFFILIATED GROUP.—The term ‘‘affiliated 

2 group’’ means any group of entities that are all af3 filiated. 

4 (4) CONTROL.—An entity has ‘‘control’’ over 

5 another entity if— 

6 (A) the entity directly or indirectly or act7 ing through 1 or more other persons owns, con8 trols, or has the power to vote 25 percent or 

9 more of any class of voting securities of the 

10 other entity; or 

11 (B) the entity controls in any manner the 

12 election of a majority of the directors or trust13 ees of the other entity. 

14 (5) EXEMPT COMMERCIAL PURCHASER.—The 

15 term ‘‘exempt commercial purchaser’’ means any 

16 person purchasing commercial insurance that, at the 

17 time of placement, meets the following requirements: 

18 (A) The person employs or retains a quali19 fied risk manager to negotiate insurance cov20 erage. 

21 (B) The person has paid aggregate nation22 wide commercial property and casualty insur23 ance premiums in excess of $100,000 in the im24 mediately preceding 12 months. 


sroberts on DSKH9S0YB1PROD with BILLS
418 

•S 3217 AMDT 3739 

1 (C)(i) The person meets at least 1 of the 

2 following criteria: 

3 (I) The person possesses a net worth 

4 in excess of $20,000,000, as such amount 

5 is adjusted pursuant to clause (ii). 

6 (II) The person generates annual rev7 enues in excess of $50,000,000, as such 

8 amount is adjusted pursuant to clause (ii). 

9 (III) The person employs more than 

10 500 full-time or full-time equivalent em11 ployees per individual insured or is a mem12 ber of an affiliated group employing more 

13 than 1,000 employees in the aggregate. 

14 (IV) The person is a not-for-profit or15 ganization or public entity generating an16 nual budgeted expenditures of at least 

17 $30,000,000, as such amount is adjusted 

18 pursuant to clause (ii). 

19 (V) The person is a municipality with 

20 a population in excess of 50,000 persons. 

21 (ii) Effective on the fifth January 1 occur22 ring after the date of the enactment of this sub23 title and each fifth January 1 occurring there24 after, the amounts in subclauses (I), (II), and 

25 (IV) of clause (i) shall be adjusted to reflect the 


sroberts on DSKH9S0YB1PROD with BILLS
419 

•S 3217 AMDT 3739 

1 percentage change for such 5-year period in the 

2 Consumer Price Index for All Urban Con3 sumers published by the Bureau of Labor Sta4 tistics of the Department of Labor. 

5 (6) HOME STATE.— 

6 (A) IN GENERAL.—Except as provided in 

7 subparagraph (B), the term ‘‘home State’’ 

8 means, with respect to an insured— 

9 (i) the State in which an insured 

10 maintains its principal place of business or, 

11 in the case of an individual, the individ12 ual’s principal residence; or 

13 (ii) if 100 percent of the insured risk 

14 is located out of the State referred to in 

15 subparagraph (A), the State to which the 

16 greatest percentage of the insured’s tax17 able premium for that insurance contract 

18 is allocated. 

19 (B) AFFILIATED GROUPS.—If more than 1 

20 insured from an affiliated group are named in21 sureds on a single nonadmitted insurance con22 tract, the term ‘‘home State’’ means the home 

23 State, as determined pursuant to subparagraph 

24 (A), of the member of the affiliated group that 


sroberts on DSKH9S0YB1PROD with BILLS
420 

•S 3217 AMDT 3739 

1 has the largest percentage of premium attrib2 uted to it under such insurance contract. 

3 (7) INDEPENDENTLY PROCURED INSURANCE.— 

4 The term ‘‘independently procured insurance’’ 

5 means insurance procured directly by an insured 

6 from a nonadmitted insurer. 

7 (8) NAIC.—The term ‘‘NAIC’’ means the Na8 tional Association of Insurance Commissioners or 

9 any successor entity. 

10 (9) NONADMITTED INSURANCE.—The term 

11 ‘‘nonadmitted insurance’’ means any property and 

12 casualty insurance permitted to be placed directly or 

13 through a surplus lines broker with a nonadmitted 

14 insurer eligible to accept such insurance. 

15 (10) NON-ADMITTED INSURANCE MODEL

16 ACT.—The term ‘‘Non-Admitted Insurance Model 

17 Act’’ means the provisions of the Non-Admitted In18 surance Model Act, as adopted by the NAIC on Au19 gust 3, 1994, and amended on September 30, 1996, 

20 December 6, 1997, October 2, 1999, and June 8, 

21 2002. 

22 (11) NONADMITTED INSURER.—The term 

23 ‘‘nonadmitted insurer’’— 


sroberts on DSKH9S0YB1PROD with BILLS
421 

•S 3217 AMDT 3739 

1 (A) means, with respect to a State, an in2 surer not licensed to engage in the business of 

3 insurance in such State; but 

4 (B) does not include a risk retention 

5 group, as that term is defined in section 2(a)(4) 

6 of the Liability Risk Retention Act of 1986 (15 

7 U.S.C. 3901(a)(4)). 

8 (12) QUALIFIED RISK MANAGER.—The term 

9 ‘‘qualified risk manager’’ means, with respect to a 

10 policyholder of commercial insurance, a person who 

11 meets all of the following requirements: 

12 (A) The person is an employee of, or third 

13 party consultant retained by, the commercial 

14 policyholder. 

15 (B) The person provides skilled services in 

16 loss prevention, loss reduction, or risk and in17 surance coverage analysis, and purchase of in18 surance. 

19 (C) The person— 

20 (i)(I) has a bachelor’s degree or high21 er from an accredited college or university 

22 in risk management, business administra23 tion, finance, economics, or any other field 

24 determined by a State insurance commis25 sioner or other State regulatory official or 


sroberts on DSKH9S0YB1PROD with BILLS
422 

•S 3217 AMDT 3739 

1 entity to demonstrate minimum com2 petence in risk management; and 

3 (II)(aa) has 3 years of experience in 

4 risk financing, claims administration, loss 

5 prevention, risk and insurance analysis, or 

6 purchasing commercial lines of insurance; 

7 or 

8 (bb) has 1 of the following designa9 tions: 

10 (AA) a designation as a Char11 tered Property and Casualty Under12 writer (in this subparagraph referred 

13 to as ‘‘CPCU’’) issued by the Amer14 ican Institute for CPCU/Insurance In15 stitute of America; 

16 (BB) a designation as an Asso17 ciate in Risk Management (ARM) 

18 issued by the American Institute for 

19 CPCU/Insurance Institute of America; 

20 (CC) a designation as Certified 

21 Risk Manager (CRM) issued by the 

22 National Alliance for Insurance Edu23 cation & Research; 


sroberts on DSKH9S0YB1PROD with BILLS
423 

•S 3217 AMDT 3739 

1 (DD) a designation as a RIMS 

2 Fellow (RF) issued by the Global Risk 

3 Management Institute; or 

4 (EE) any other designation, cer5 tification, or license determined by a 

6 State insurance commissioner or other 

7 State insurance regulatory official or 

8 entity to demonstrate minimum com9 petency in risk management; 

10 (ii)(I) has at least 7 years of experi11 ence in risk financing, claims administra12 tion, loss prevention, risk and insurance 

13 coverage analysis, or purchasing commer14 cial lines of insurance; and 

15 (II) has any 1 of the designations 

16 specified in subitems (AA) through (EE) 

17 of clause (i)(II)(bb); 

18 (iii) has at least 10 years of experi19 ence in risk financing, claims administra20 tion, loss prevention, risk and insurance 

21 coverage analysis, or purchasing commer22 cial lines of insurance; or 

23 (iv) has a graduate degree from an 

24 accredited college or university in risk 

25 management, business administration, fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00423 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
424 

•S 3217 AMDT 3739 

1 nance, economics, or any other field deter2 mined by a State insurance commissioner 

3 or other State regulatory official or entity 

4 to demonstrate minimum competence in 

5 risk management. 

6 (13) PREMIUM TAX.—The term ‘‘premium tax’’ 

7 means, with respect to surplus lines or independently 

8 procured insurance coverage, any tax, fee, assess9 ment, or other charge imposed by a government en10 tity directly or indirectly based on any payment 

11 made as consideration for an insurance contract for 

12 such insurance, including premium deposits, assess13 ments, registration fees, and any other compensation 

14 given in consideration for a contract of insurance. 

15 (14) SURPLUS LINES BROKER.—The term ‘‘sur16 plus lines broker’’ means an individual, firm, or cor17 poration which is licensed in a State to sell, solicit, 

18 or negotiate insurance on properties, risks, or expo19 sures located or to be performed in a State with 

20 nonadmitted insurers. 

21 PART II—REINSURANCE 

22 SEC. 531. REGULATION OF CREDIT FOR REINSURANCE AND 

23 REINSURANCE AGREEMENTS. 

24 (a) CREDIT FOR REINSURANCE.—If the State of 

25 domicile of a ceding insurer is an NAIC-accredited State, 


sroberts on DSKH9S0YB1PROD with BILLS
425 

•S 3217 AMDT 3739 

1 or has financial solvency requirements substantially simi2 lar to the requirements necessary for NAIC accreditation, 

3 and recognizes credit for reinsurance for the insurer’s 

4 ceded risk, then no other State may deny such credit for 

5 reinsurance. 

6 (b) ADDITIONAL PREEMPTION OF

7 EXTRATERRITORIAL APPLICATION OF STATE LAW.—In 

8 addition to the application of subsection (a), all laws, regu9 lations, provisions, or other actions of a State that is not 

10 the domiciliary State of the ceding insurer, except those 

11 with respect to taxes and assessments on insurance com12 panies or insurance income, are preempted to the extent 

13 that they— 

14 (1) restrict or eliminate the rights of the ceding 

15 insurer or the assuming insurer to resolve disputes 

16 pursuant to contractual arbitration to the extent 

17 such contractual provision is not inconsistent with 

18 the provisions of title 9, United States Code; 

19 (2) require that a certain State’s law shall gov20 ern the reinsurance contract, disputes arising from 

21 the reinsurance contract, or requirements of the re22 insurance contract; 

23 (3) attempt to enforce a reinsurance contract 

24 on terms different than those set forth in the reinVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00425 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
426 

•S 3217 AMDT 3739 

1 surance contract, to the extent that the terms are 

2 not inconsistent with this part; or 

3 (4) otherwise apply the laws of the State to re4 insurance agreements of ceding insurers not domi5 ciled in that State. 

6 SEC. 532. REGULATION OF REINSURER SOLVENCY. 

7 (a) DOMICILIARY STATE REGULATION.—If the State 

8 of domicile of a reinsurer is an NAIC-accredited State or 

9 has financial solvency requirements substantially similar 

10 to the requirements necessary for NAIC accreditation, 

11 such State shall be solely responsible for regulating the 

12 financial solvency of the reinsurer. 

13 (b) NONDOMICILIARY STATES.— 

14 (1) LIMITATION ON FINANCIAL INFORMATION

15 REQUIREMENTS.—If the State of domicile of a rein16 surer is an NAIC-accredited State or has financial 

17 solvency requirements substantially similar to the re18 quirements necessary for NAIC accreditation, no 

19 other State may require the reinsurer to provide any 

20 additional financial information other than the infor21 mation the reinsurer is required to file with its 

22 domiciliary State. 

23 (2) RECEIPT OF INFORMATION.—No provision 

24 of this section shall be construed as preventing or 

25 prohibiting a State that is not the State of domicile 


sroberts on DSKH9S0YB1PROD with BILLS
427 

•S 3217 AMDT 3739 

1 of a reinsurer from receiving a copy of any financial 

2 statement filed with its domiciliary State. 

3 SEC. 533. DEFINITIONS. 

4 For purposes of this part, the following definitions 

5 shall apply: 

6 (1) CEDING INSURER.—The term ‘‘ceding in7 surer’’ means an insurer that purchases reinsurance. 

8 (2) DOMICILIARY STATE.—The terms ‘‘State of 

9 domicile’’ and ‘‘domiciliary State’’ mean, with re10 spect to an insurer or reinsurer, the State in which 

11 the insurer or reinsurer is incorporated or entered 

12 through, and licensed. 

13 (3) REINSURANCE.—The term ‘‘reinsurance’’ 

14 means the assumption by an insurer of all or part 

15 of a risk undertaken originally by another insurer. 

16 (4) REINSURER.— 

17 (A) IN GENERAL.—The term ‘‘reinsurer’’ 

18 means an insurer to the extent that the in19 surer— 

20 (i) is principally engaged in the busi21 ness of reinsurance; 

22 (ii) does not conduct significant 

23 amounts of direct insurance as a percent24 age of its net premiums; and 


sroberts on DSKH9S0YB1PROD with BILLS
428 

•S 3217 AMDT 3739 

1 (iii) is not engaged in an ongoing 

2 basis in the business of soliciting direct in3 surance. 

4 (B) DETERMINATION.—A determination of 

5 whether an insurer is a reinsurer shall be made 

6 under the laws of the State of domicile in ac7 cordance with this paragraph. 

8 PART III—RULE OF CONSTRUCTION 

9 SEC. 541. RULE OF CONSTRUCTION. 

10 Nothing in this subtitle or the amendments made by 

11 this subtitle shall be construed to modify, impair, or super12 sede the application of the antitrust laws. Any implied or 

13 actual conflict between this subtitle and any amendments 

14 to this subtitle and the antitrust laws shall be resolved 

15 in favor of the operation of the antitrust laws. 

16 SEC. 542. SEVERABILITY. 

17 If any section or subsection of this subtitle, or any 

18 application of such provision to any person or cir19 cumstance, is held to be unconstitutional, the remainder 

20 of this subtitle, and the application of the provision to any 

21 other person or circumstance, shall not be affected. 


sroberts on DSKH9S0YB1PROD with BILLS
429 

•S 3217 AMDT 3739 

1 TITLE VI—IMPROVEMENTS TO 

2 REGULATION OF BANK AND 

3 SAVINGS ASSOCIATION HOLD4 ING COMPANIES AND DEPOSI5 TORY INSTITUTIONS 

6 SEC. 601. SHORT TITLE. 

7 This title may be cited as the ‘‘Bank and Savings 

8 Association Holding Company and Depository Institution 

9 Regulatory Improvements Act of 2010’’. 

10 SEC. 602. DEFINITION. 

11 In this title, the term ‘‘commercial firm’’ means any 

12 entity that derives not less than 15 percent of the consoli13 dated annual gross revenues of the entity, including all 

14 affiliates of the entity, from engaging in activities that are 

15 not financial in nature or incidental to activities that are 

16 financial in nature, as provided in section 4(k) of the Bank 

17 Holding Company Act of 1956 (12 U.S.C. 1843(k)). 

18 SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF 

19 CREDIT CARD BANKS, INDUSTRIAL LOAN 

20 COMPANIES, AND CERTAIN OTHER COMPA21 NIES UNDER THE BANK HOLDING COMPANY 

22 ACT OF 1956. 

23 (a) MORATORIUM.— 

24 (1) DEFINITIONS.—In this subsection— 


sroberts on DSKH9S0YB1PROD with BILLS
430 

•S 3217 AMDT 3739 

1 (A) the term ‘‘credit card bank’’ means an 

2 institution described in section 2(c)(2)(F) of the 

3 Bank Holding Company Act of 1956 (12 

4 U.S.C. 1841(c)(2)(F)); 

5 (B) the term ‘‘industrial bank’’ means an 

6 institution described in section 2(c)(2)(H) of 

7 the Bank Holding Company Act of 1956 (12 

8 U.S.C. 1841(c)(2)(H)); and 

9 (C) the term ‘‘trust bank’’ means an insti10 tution described in section 2(c)(2)(D) of the 

11 Bank Holding Company Act of 1956 (12 

12 U.S.C. 1841(c)(2)(D)). 

13 (2) MORATORIUM ON PROVISION OF DEPOSIT

14 INSURANCE.—The Corporation may not approve an 

15 application for deposit insurance under section 5 of 

16 the Federal Deposit Insurance Act (12 U.S.C. 1815) 

17 that is received after November 10, 2009, for an in18 dustrial bank, a credit card bank, or a trust bank 

19 that is directly or indirectly owned or controlled by 

20 a commercial firm. 

21 (3) CHANGE IN CONTROL.— 

22 (A) IN GENERAL.—Except as provided in 

23 subparagraph (B), the appropriate Federal 

24 banking agency shall disapprove a change in 

25 control, as provided in section 7(j) of the FedVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00430 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
431 

•S 3217 AMDT 3739 

1 eral Deposit Insurance Act (12 U.S.C. 1817(j)), 

2 of an industrial bank, a credit card bank, or a 

3 trust bank if the change in control would result 

4 in direct or indirect control of the industrial 

5 bank, credit card bank, or trust bank by a com6 mercial firm. 

7 (B) EXCEPTIONS.—Subparagraph (A) 

8 shall not apply to a change in control of an in9 dustrial bank, credit card bank, or trust bank 

10 that— 

11 (i) is in danger of default, as deter12 mined by the appropriate Federal banking 

13 agency; or 

14 (ii) results from the merger or whole 

15 acquisition of a commercial firm that di16 rectly or indirectly controls the industrial 

17 bank, credit card bank, or trust bank in a 

18 bona fide merger with or acquisition by an19 other commercial firm, as determined by 

20 the appropriate Federal banking agency. 

21 (4) SUNSET.—This subsection shall cease to 

22 have effect 3 years after the date of enactment of 

23 this Act. 


sroberts on DSKH9S0YB1PROD with BILLS
432 

•S 3217 AMDT 3739 

1 (b) GOVERNMENT ACCOUNTABILITY OFFICE STUDY

2 OF EXCEPTIONS UNDER THE BANK HOLDING COMPANY

3 ACT OF 1956.— 

4 (1) STUDY REQUIRED.—The Comptroller Gen5 eral of the United States shall carry out a study to 

6 determine whether it is necessary, in order to 

7 strengthen the safety and soundness of institutions 

8 or the stability of the financial system, to eliminate 

9 the exceptions under section 2 of the Bank Holding 

10 Company Act of 1956 (12 U.S.C. 1841) for institu11 tions described in— 

12 (A) section 2(a)(5)(E) of the Bank Hold13 ing Company Act of 1956 (12 U.S.C. 

14 1841(a)(5)(E)); 

15 (B) section 2(a)(5)(F) of the Bank Hold16 ing Company Act of 1956 (12 U.S.C. 

17 1841(a)(5)(F)); 

18 (C) section 2(c)(2)(D) of the Bank Hold19 ing Company Act of 1956 (12 U.S.C. 

20 1841(c)(2)(D)); 

21 (D) section 2(c)(2)(F) of the Bank Hold22 ing Company Act of 1956 (12 U.S.C. 

23 1841(c)(2)(F)); 


sroberts on DSKH9S0YB1PROD with BILLS
433 

•S 3217 AMDT 3739 

1 (E) section 2(c)(2)(H) of the Bank Hold2 ing Company Act of 1956 (12 U.S.C. 

3 1841(c)(2)(H)); and 

4 (F) section 2(c)(2)(B) of the Bank Hold5 ing Company Act of 1956 (12 U.S.C. 

6 1841(c)(2)(B)). 

7 (2) CONTENT OF STUDY.— 

8 (A) IN GENERAL.—The study required 

9 under paragraph (1), with respect to the insti10 tutions referenced in each of subparagraphs (A) 

11 through (E) of paragraph (1), shall, to the ex12 tent feasible be based on information provided 

13 to the Comptroller General by the appropriate 

14 Federal or State regulator, and shall— 

15 (i) identify the types and number of 

16 institutions excepted from section 2 of the 

17 Bank Holding Company Act of 1956 (12 

18 U.S.C. 1841) under each of the subpara19 graphs described in subparagraphs (A) 

20 through (E) of paragraph (1); 

21 (ii) generally describe the size and ge22 ographic locations of the institutions de23 scribed in clause (i); 

24 (iii) determine the extent to which the 

25 institutions described in clause (i) are held 


sroberts on DSKH9S0YB1PROD with BILLS
434 

•S 3217 AMDT 3739 

1 by holding companies that are commercial 

2 firms; 

3 (iv) determine whether the institutions 

4 described in clause (i) have any affiliates 

5 that are commercial firms; 

6 (v) identify the Federal banking agen7 cy responsible for the supervision of the in8 stitutions described in clause (i) on and 

9 after the transfer date; 

10 (vi) determine the adequacy of the 

11 Federal bank regulatory framework appli12 cable to each category of institution de13 scribed in clause (i), including any restric14 tions (including limitations on affiliate 

15 transactions or cross-marketing) that apply 

16 to transactions between an institution, the 

17 holding company of the institution, and 

18 any other affiliate of the institution; and 

19 (vii) evaluate the potential con20 sequences of subjecting the institutions de21 scribed in clause (i) to the requirements of 

22 the Bank Holding Company Act of 1956, 

23 including with respect to the availability 

24 and allocation of credit, the stability of the 

25 financial system and the economy, the safe 


sroberts on DSKH9S0YB1PROD with BILLS
435 

•S 3217 AMDT 3739 

1 and sound operation of each category of 

2 institution, and the impact on the types of 

3 activities in which such institutions, and 

4 the holding companies of such institutions, 

5 may engage. 

6 (B) SAVINGS ASSOCIATIONS.—With respect 

7 to institutions described in paragraph (1)(F), 

8 the study required under paragraph (1) shall— 

9 (i) determine the adequacy of the 

10 Federal bank regulatory framework appli11 cable to such institutions, including any re12 strictions (including limitations on affiliate 

13 transactions or cross-marketing) that apply 

14 to transactions between an institution, the 

15 holding company of the institution, and 

16 any other affiliate of the institution; and 

17 (ii) evaluate the potential con18 sequences of subjecting the institutions de19 scribed in paragraph (1)(F) to the require20 ments of the Bank Holding Company Act 

21 of 1956, including with respect to the 

22 availability and allocation of credit, the 

23 stability of the financial system and the 

24 economy, the safe and sound operation of 

25 such institutions, and the impact on the 


sroberts on DSKH9S0YB1PROD with BILLS
436 

•S 3217 AMDT 3739 

1 types of activities in which such institu2 tions, and the holding companies of such 

3 institutions, may engage. 

4 (3) REPORT.—Not later than 18 months after 

5 the date of enactment of this Act, the Comptroller 

6 General shall submit to the Committee on Banking, 

7 Housing, and Urban Affairs of the Senate and the 

8 Committee on Financial Services of the House of 

9 Representatives a report on the study required 

10 under paragraph (1). 

11 SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COM12 PANIES; REGULATION OF FUNCTIONALLY 

13 REGULATED SUBSIDIARIES. 

14 (a) REPORTS BY BANK HOLDING COMPANIES.—Sec15 tions 5(c)(1) of the Bank Holding Company Act of 1956 

16 (12 U.S.C. 1844(c)(1)) is amended— 

17 (1) by striking subparagraph (B) and inserting 

18 the following: 

19 ‘‘(B) USE OF EXISTING REPORTS AND

20 OTHER SUPERVISORY INFORMATION.—The ap21 propriate Federal banking agency for a bank 

22 holding company shall, to the fullest extent pos23 sible, use— 

24 ‘‘(i) reports and other supervisory in25 formation that the bank holding company 


sroberts on DSKH9S0YB1PROD with BILLS
437 

•S 3217 AMDT 3739 

1 or any subsidiary thereof has been required 

2 to provide to other Federal or State regu3 latory agencies; 

4 ‘‘(ii) externally audited financial state5 ments of the bank holding company or 

6 subsidiary; 

7 ‘‘(iii) information otherwise available 

8 from Federal or State regulatory agencies; 

9 and 

10 ‘‘(iv) information that is otherwise re11 quired to be reported publicly.’’; and 

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

13 ‘‘(C) AVAILABILITY.—Upon the request of 

14 the appropriate Federal banking agency for a 

15 bank holding company, the bank holding com16 pany or a subsidiary of the bank holding com17 pany shall promptly provide to the appropriate 

18 Federal banking agency any information de19 scribed in clauses (i) through (iii) of subpara20 graph (B).’’. 

21 (b) EXAMINATIONS OF BANK HOLDING COMPA22 NIES.—Section 5(c)(2) of the Bank Holding Company Act 

23 of 1956 (12 U.S.C. 1844(c)(2)) is amended to read as 

24 follows: 

25 ‘‘(2) EXAMINATIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
438 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—The appropriate Fed2 eral banking agency for a bank holding com3 pany may make examinations of the bank hold4 ing company and each subsidiary of the bank 

5 holding company in order to— 

6 ‘‘(i) inform such appropriate Federal 

7 banking agency of— 

8 ‘‘(I) the nature of the operations 

9 and financial condition of the bank 

10 holding company and the subsidiary; 

11 ‘‘(II) the financial, operational, 

12 and other risks within the bank hold13 ing company system that may pose a 

14 threat to— 

15 ‘‘(aa) the safety and sound16 ness of the bank holding com17 pany or of any depository institu18 tion subsidiary of the bank hold19 ing company; or 

20 ‘‘(bb) the stability of the fi21 nancial system of the United 

22 States; and 

23 ‘‘(III) the systems of the bank 

24 holding company for monitoring and 


sroberts on DSKH9S0YB1PROD with BILLS
439 

•S 3217 AMDT 3739 

1 controlling the risks described in sub2 clause (II); and 

3 ‘‘(ii) enforce the compliance of the 

4 bank holding company and the subsidiary 

5 with this Act and any other Federal law 

6 that such appropriate Federal banking 

7 agency has specific jurisdiction to enforce 

8 against the bank holding company or sub9 sidiary. 

10 ‘‘(B) USE OF REPORTS TO REDUCE EXAMI11 NATIONS.—For purposes of this paragraph, the 

12 appropriate Federal banking agency for a bank 

13 holding company shall, to the fullest extent pos14 sible, rely on— 

15 ‘‘(i) examination reports made by 

16 other Federal or State regulatory agencies 

17 relating to the bank holding company and 

18 any subsidiary of the bank holding com19 pany; and 

20 ‘‘(ii) the reports and other informa21 tion required under paragraph (1). 

22 ‘‘(C) COORDINATION WITH OTHER REGU23 LATORS.—The appropriate Federal banking 

24 agency for a bank holding company shall— 


sroberts on DSKH9S0YB1PROD with BILLS
440 

•S 3217 AMDT 3739 

1 ‘‘(i) provide reasonable notice to, and 

2 consult with, the appropriate Federal 

3 banking agency or State regulatory agency 

4 of a subsidiary that is a depository institu5 tion or a functionally regulated subsidiary 

6 before commencing an examination of the 

7 subsidiary under this section; and 

8 ‘‘(ii) to the fullest extent possible, 

9 avoid duplication of examination activities, 

10 reporting requirements, and requests for 

11 information.’’. 

12 (c) AUTHORITY TO REGULATE FUNCTIONALLY REG13 ULATED SUBSIDIARIES OF BANK HOLDING COMPA14 NIES.—The Bank Holding Company Act of 1956 (12 

15 U.S.C. 1841 et seq.) is amended— 

16 (1) in section 5(c) (12 U.S.C. 1844(c)), by 

17 striking paragraphs (3) and (4) and inserting the 

18 following: 

19 ‘‘(3) [Reserved] 

20 ‘‘(4) [Reserved]’’; and 

21 (2) by striking section 10A (12 U.S.C. 1848a). 

22 (d) ACQUISITIONS OF BANKS.—Section 3(c) of the 

23 Bank Holding Company Act of 1956 (12 U.S.C. 1842(c)) 

24 is amended by adding at the end the following: 


sroberts on DSKH9S0YB1PROD with BILLS
441 

•S 3217 AMDT 3739 

1 ‘‘(7) FINANCIAL STABILITY.—In every case, the 

2 appropriate Federal banking agency of a bank hold3 ing company shall take into consideration the extent 

4 to which a proposed acquisition, merger, or consoli5 dation would result in greater or more concentrated 

6 risks to the stability of the United States banking or 

7 financial system.’’. 

8 (e) ACQUISITIONS OF NONBANKS.— 

9 (1) NOTICE PROCEDURES.—Section 4(j)(2)(A) 

10 of the Bank Holding Company Act of 1956 (12 

11 U.S.C. 1843(j)(2)(A)) is amended by striking ‘‘or 

12 unsound banking practices’’ and inserting ‘‘unsound 

13 banking practices, or risk to the stability of the 

14 United States banking or financial system’’. 

15 (2) ACTIVITIES THAT ARE FINANCIAL IN NA16 TURE.—Section 4(k)(6)(B) of the Bank Holding 

17 Company Act of 1956 (12 U.S.C. 1843(k)(6)(B)) is 

18 amended to read as follows: 

19 ‘‘(B) APPROVAL NOT REQUIRED FOR CER20 TAIN FINANCIAL ACTIVITIES.— 

21 ‘‘(i) IN GENERAL.—Except as pro22 vided in clause (ii), a financial holding 

23 company may commence any activity or ac24 quire any company, pursuant to paragraph 

25 (4) or any regulation prescribed or order 


sroberts on DSKH9S0YB1PROD with BILLS
442 

•S 3217 AMDT 3739 

1 issued under paragraph (5), without prior 

2 approval of the appropriate Federal bank3 ing agency for the financial holding com4 pany. 

5 ‘‘(ii) EXCEPTION.—A financial hold6 ing company may not acquire a company, 

7 without the prior approval of the appro8 priate Federal banking agency for the fi9 nancial holding company, in a transaction 

10 in which the total consolidated assets to be 

11 acquired by the financial holding company 

12 exceed $25,000,000,000.’’. 

13 (f) BANK MERGER ACT TRANSACTIONS.—Section 

14 18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 

15 1828(c)(5)) is amended, in the matter immediately fol16 lowing subparagraph (B), by striking ‘‘and the conven17 ience and needs of the community to be served’’ and in18 serting ‘‘the convenience and needs of the community to 

19 be served, and the risk to the stability of the United States 

20 banking or financial system’’. 

21 (g) REPORTS BY SAVINGS AND LOAN HOLDING COM22 PANIES.—Section 10(b)(2) of the Home Owners’ Loan Act 

23 (12 U.S.C. 1467a(b)(2) is amended— 

24 (1) by striking ‘‘Each savings’’ and inserting 

25 the following: 


sroberts on DSKH9S0YB1PROD with BILLS
443 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—Each savings’’; and 

2 (2) by adding at the end the following: 

3 ‘‘(B) USE OF EXISTING REPORTS AND

4 OTHER SUPERVISORY INFORMATION.—The ap5 propriate Federal banking agency for a savings 

6 and loan holding company shall, to the fullest 

7 extent possible, use— 

8 ‘‘(i) reports and other supervisory in9 formation that the savings and loan hold10 ing company or any subsidiary thereof has 

11 been required to provide to other Federal 

12 or State regulatory agencies; 

13 ‘‘(ii) externally audited financial state14 ments of the savings and loan holding com15 pany or subsidiary; 

16 ‘‘(iii) information that is otherwise 

17 available from Federal or State regulatory 

18 agencies; and 

19 ‘‘(iv) information that is otherwise re20 quired to be reported publicly. 

21 ‘‘(C) AVAILABILITY.—Upon the request of 

22 the appropriate Federal banking agency for a 

23 savings and loan holding company, the savings 

24 and loan holding company or a subsidiary of 

25 the savings and loan holding company shall 


sroberts on DSKH9S0YB1PROD with BILLS
444 

•S 3217 AMDT 3739 

1 promptly provide to the appropriate Federal 

2 banking agency any information described in 

3 clauses (i) through (iii) of subparagraph (B).’’. 

4 (h) EXAMINATION OF SAVINGS AND LOAN HOLDING

5 COMPANIES.— 

6 (1) DEFINITIONS.—Section 2 of the Home 

7 Owners’ Loan Act (12 U.S.C. 1462) is amended by 

8 adding at the end the following: 

9 ‘‘(10) APPROPRIATE FEDERAL BANKING AGEN10 CY.—The term ‘appropriate Federal banking agency’ 

11 has the same meaning as in section 3(q) of the Fed12 eral Deposit Insurance Act (12 U.S.C. 1813(q)). 

13 ‘‘(11) FUNCTIONALLY REGULATED SUB14 SIDIARY.—The term ‘functionally regulated sub15 sidiary’ has the same meaning as in section 5(c)(5) 

16 of the Bank Holding Company Act of 1956 (12 

17 U.S.C. 1844(c)(5)).’’. 

18 (2) EXAMINATION.—Section 10(b) of the Home 

19 Owners’ Loan Act (12 U.S.C. 1467a(b)) is amended 

20 by striking paragraph (4) and inserting the fol21 lowing: 

22 ‘‘(4) EXAMINATIONS.— 

23 ‘‘(A) IN GENERAL.—The appropriate Fed24 eral banking agency for a savings and loan 

25 holding company may make examinations of the 


sroberts on DSKH9S0YB1PROD with BILLS
445 

•S 3217 AMDT 3739 

1 savings and loan holding company and each 

2 subsidiary of the savings and loan holding com3 pany system, in order to— 

4 ‘‘(i) inform such appropriate Federal 

5 banking agency of— 

6 ‘‘(I) the nature of the operations 

7 and financial condition of the savings 

8 and loan holding company and the 

9 subsidiary; 

10 ‘‘(II) the financial, operational, 

11 and other risks within the savings and 

12 loan holding company that may pose a 

13 threat to— 

14 ‘‘(aa) the safety and sound15 ness of the savings and loan 

16 holding company or of any depos17 itory institution subsidiary of the 

18 savings and loan holding com19 pany; or 

20 ‘‘(bb) the stability of the fi21 nancial system of the United 

22 States; and 

23 ‘‘(III) the systems of the savings 

24 and loan holding company for moniVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00445 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
446 

•S 3217 AMDT 3739 

1 toring and controlling the risks de2 scribed in subclause (II); and 

3 ‘‘(ii) enforce the compliance of the 

4 savings and loan holding company and the 

5 subsidiary with this Act and any other 

6 Federal law that such appropriate Federal 

7 banking agency has specific jurisdiction to 

8 enforce against the savings and loan hold9 ing company or subsidiary. 

10 ‘‘(B) USE OF REPORTS TO REDUCE EXAMI11 NATIONS.—For purposes of this subsection, the 

12 appropriate Federal banking agency for a sav13 ings and loan holding company shall, to the 

14 fullest extent possible, rely on— 

15 ‘‘(i) the examination reports made by 

16 other Federal or State regulatory agencies 

17 relating to the savings and loan holding 

18 company and any subsidiary; and 

19 ‘‘(ii) the reports and other informa20 tion required under paragraph (2). 

21 ‘‘(C) COORDINATION WITH OTHER REGU22 LATORS.—The appropriate Federal banking 

23 agency for a savings and loan holding company 

24 shall— 


sroberts on DSKH9S0YB1PROD with BILLS
447 

•S 3217 AMDT 3739 

1 ‘‘(i) provide reasonable notice to, and 

2 consult with, the appropriate Federal 

3 banking agency or State regulatory agency 

4 of a subsidiary that is a depository institu5 tion or a functionally regulated subsidiary 

6 before commencing an examination of the 

7 subsidiary under this section; and 

8 ‘‘(ii) to the fullest extent possible, 

9 avoid duplication of examination activities, 

10 reporting requirements, and requests for 

11 information.’’. 

12 (i) EFFECTIVE DATE.—The amendments made by 

13 this section shall take effect on the transfer date. 

14 SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMIS15 SIBLE ACTIVITIES OF DEPOSITORY INSTITU16 TION SUBSIDIARIES OF HOLDING COMPA17 NIES. 

18 Section 6 of the Bank Holding Company Act of 1956 

19 (12 U.S.C. 1845) is amended to read as follows: 

20 ‘‘SEC. 6. ASSURING CONSISTENT OVERSIGHT OF PERMIS21 SIBLE ACTIVITIES OF DEPOSITORY INSTITU22 TION SUBSIDIARIES OF HOLDING COMPA23 NIES. 

24 ‘‘(a) DEFINITIONS.— 

25 ‘‘(1) DEFINITIONS.—In this section— 


sroberts on DSKH9S0YB1PROD with BILLS
448 

•S 3217 AMDT 3739 

1 ‘‘(A) the term ‘depository institution hold2 ing company’ has the same meaning as in sec3 tion 3(w) of the Federal Deposit Insurance Act 

4 (12 U.S.C. 1813(w)); 

5 ‘‘(B) the term ‘functionally regulated sub6 sidiary’ has the same meaning as in section 

7 5(c)(5); and 

8 ‘‘(C) the term ‘lead Federal banking agen9 cy’ means— 

10 ‘‘(i) the Office of the Comptroller of 

11 the Currency, in the case of any depository 

12 institution holding company having— 

13 ‘‘(I) a subsidiary that is an in14 sured depository institution, if all 

15 such insured depository institutions 

16 are Federal depository institutions; or 

17 ‘‘(II) a subsidiary that is a Fed18 eral depository institution and a sub19 sidiary that is a State depository in20 stitution, if the total consolidated as21 sets of all subsidiaries that are Fed22 eral depository institutions exceed the 

23 total consolidated assets of all subsidi24 aries that are State depository institu25 tions; and 


sroberts on DSKH9S0YB1PROD with BILLS
449 

•S 3217 AMDT 3739 

1 ‘‘(ii) the Federal Deposit Insurance 

2 Corporation, in the case of any depository 

3 institution holding company having— 

4 ‘‘(I) a subsidiary that is an in5 sured depository institution, if all 

6 such insured depository institutions 

7 are State depository institutions; or 

8 ‘‘(II) a subsidiary that is a Fed9 eral depository institution and a sub10 sidiary that is a State depository in11 stitution, if the total consolidated as12 sets of all subsidiaries that are State 

13 depository institutions exceed the total 

14 consolidated assets of all subsidiaries 

15 that are Federal depository institu16 tions. 

17 ‘‘(2) DETERMINATION OF TOTAL CONSOLI18 DATED ASSETS.—For purposes of paragraph (1)(A), 

19 the total consolidated assets of a depository institu20 tion shall be determined in the same manner that 

21 total consolidated assets of depository institutions 

22 are determined for purposes of section 3(q) of the 

23 Federal Deposit Insurance Act (12 U.S.C. 1813(q)). 

24 ‘‘(b) LEAD AGENCY SUPERVISION.— 


sroberts on DSKH9S0YB1PROD with BILLS
450 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—The lead Federal banking 

2 agency for each depository institution holding com3 pany shall make examinations of the activities of 

4 each nondepository institution subsidiary (other than 

5 a functionally regulated subsidiary) of the depository 

6 institution holding company that are permissible for 

7 depository institution subsidiaries of the depository 

8 institution holding company, to determine whether 

9 the activities— 

10 ‘‘(A) present safety and soundness risks to 

11 any depository institution subsidiary of the de12 pository institution holding company; 

13 ‘‘(B) are conducted in accordance with ap14 plicable law; and 

15 ‘‘(C) are subject to appropriate systems for 

16 monitoring and controlling the financial, oper17 ating, and other risks of the activity and pro18 tecting the depository institution subsidiaries of 

19 the holding company. 

20 ‘‘(2) PROCESS FOR EXAMINATION.—An exam21 ination under paragraph (1) shall be carried out 

22 under the authority of the lead Federal banking 

23 agency, as if the nondepository institution subsidiary 

24 were an insured depository institution for which the 


sroberts on DSKH9S0YB1PROD with BILLS
451 

•S 3217 AMDT 3739 

1 lead Federal banking agency is the appropriate Fed2 eral banking agency. 

3 ‘‘(c) COORDINATION.—For each depository institu4 tion holding company for which the Board of Governors 

5 is the appropriate Federal banking agency, the lead Fed6 eral banking agency of the depository institution holding 

7 company shall coordinate the supervision of the activities 

8 of subsidiaries described in subsection (b) with the Board 

9 of Governors, in a manner that— 

10 ‘‘(1) avoids duplication; 

11 ‘‘(2) shares information relevant to the super12 vision of the depository institution holding company 

13 by each agency; 

14 ‘‘(3) achieves the objectives of subsection (b); 

15 and 

16 ‘‘(4) ensures that the depository institution 

17 holding company and the subsidiaries of the deposi18 tory institution holding company are not subject to 

19 conflicting supervisory demands by the 2 agencies. 

20 ‘‘(d) REFERRALS FOR ENFORCEMENT.— 

21 ‘‘(1) RECOMMENDATION OF ACTION BY BOARD

22 OF GOVERNORS.—The lead Federal banking agency 

23 for a depository institution holding company, based 

24 on information obtained pursuant to the responsibil25 ities of the agency under subsection (b), may submit 


sroberts on DSKH9S0YB1PROD with BILLS
452 

•S 3217 AMDT 3739 

1 to the Board of Governors, in writing, a rec2 ommendation that the Board of Governors take en3 forcement action against a nondepository institution 

4 subsidiary (other than a functionally regulated sub5 sidiary) of the depository institution holding com6 pany, together with an explanation of the concerns 

7 giving rise to the recommendation. 

8 ‘‘(2) BACK-UP AUTHORITY OF THE LEAD FED9 ERAL BANKING AGENCY.—If, within the 60-day pe10 riod beginning on the date on which the Board of 

11 Governors receives a recommendation under para12 graph (1), the Board of Governors does not take en13 forcement action against a nondepository institution 

14 subsidiary or provide a plan for enforcement action 

15 that is acceptable to the lead Federal banking agen16 cy, the lead Federal banking agency (upon the au17 thorization of the Comptroller, or the Federal De18 posit Insurance Corporation, upon a vote of its 

19 members, as applicable) may take the recommended 

20 enforcement action, in the same manner as if the 

21 subsidiary were an insured depository institution for 

22 which the lead Federal banking agency is the appro23 priate Federal banking agency.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
453 

•S 3217 AMDT 3739 

1 SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COM2 PANIES TO REMAIN WELL CAPITALIZED AND 

3 WELL MANAGED. 

4 (a) AMENDMENT.—Section 4(l)(1) of the Bank Hold5 ing Company Act of 1956 (12 U.S.C. 1843(l)(1)) is 

6 amended— 

7 (1) in subparagraph (B), by striking ‘‘and’’ at 

8 the end; 

9 (2) by redesignating subparagraph (C) as sub10 paragraph (D); 

11 (3) by inserting after subparagraph (B) the fol12 lowing: 

13 ‘‘(C) the bank holding company is well 

14 capitalized and well managed; and’’; and 

15 (4) in subparagraph (D)(ii), as so redesignated, 

16 by striking ‘‘subparagraphs (A) and (B)’’ and insert17 ing ‘‘subparagraphs (A), (B), and (C)’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall take effect on the transfer date. 

20 SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS. 

21 (a) ACQUISITION OF BANKS.—Section 3(d)(1)(A) of 

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

23 1842(d)(1)(A)) is amended by striking ‘‘adequately cap24 italized and adequately managed’’ and inserting ‘‘well cap25 italized and well managed’’. 


sroberts on DSKH9S0YB1PROD with BILLS
454 

•S 3217 AMDT 3739 

1 (b) INTERSTATE BANK MERGERS.—Section 

2 44(b)(4)(B) of the Federal Deposit Insurance Act (12 

3 U.S.C. 1831u(b)(4)(B)) is amended by striking ‘‘will con4 tinue to be adequately capitalized and adequately man5 aged’’ and inserting ‘‘will be well capitalized and well man6 aged’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall take effect on the transfer date. 

9 SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK 

10 TRANSACTIONS WITH AFFILIATES. 

11 (a) AFFILIATE TRANSACTIONS.—Section 23A of the 

12 Federal Reserve Act (12 U.S.C. 371c) is amended— 

13 (1) in subsection (b)— 

14 (A) in paragraph (1), by striking subpara15 graph (D) and inserting the following: 

16 ‘‘(D) any investment fund with respect to 

17 which a member bank or affiliate thereof is an 

18 investment adviser; and’’; and 

19 (B) in paragraph (7)— 

20 (i) in subparagraph (A), by inserting 

21 before the semicolon at the end the fol22 lowing: ‘‘, including a purchase of assets 

23 subject to an agreement to repurchase’’; 


sroberts on DSKH9S0YB1PROD with BILLS
455 

•S 3217 AMDT 3739 

1 (ii) in subparagraph (C), by striking 

2 ‘‘, including assets subject to an agreement 

3 to repurchase,’’; 

4 (iii) in subparagraph (D)— 

5 (I) by inserting ‘‘or other debt 

6 obligations’’ after ‘‘acceptance of secu7 rities’’; and 

8 (II) by striking ‘‘or’’ at the end; 

9 and 

10 (iv) by adding at the end the fol11 lowing: 

12 ‘‘(F) a transaction with an affiliate that 

13 involves the borrowing or lending of securities, 

14 to the extent that the transaction causes a 

15 member bank or a subsidiary to have credit ex16 posure to the affiliate; or 

17 ‘‘(G) a derivative transaction, as defined in 

18 paragraph (3) of section 5200(b) of the Revised 

19 Statutes of the United States (12 U.S.C. 

20 84(b)), with an affiliate, to the extent that the 

21 transaction causes a member bank or a sub22 sidiary to have credit exposure to the affiliate;’’; 

23 (2) in subsection (c)— 

24 (A) in paragraph (1)— 


sroberts on DSKH9S0YB1PROD with BILLS
456 

•S 3217 AMDT 3739 

1 (i) in the matter preceding subpara2 graph (A), by striking ‘‘subsidiary’’ and all 

3 that follows through ‘‘time of the trans4 action’’ and inserting ‘‘subsidiary, and any 

5 credit exposure of a member bank or a 

6 subsidiary to an affiliate resulting from a 

7 securities borrowing or lending transaction, 

8 or a derivative transaction, shall be se9 cured at all times’’; and 

10 (ii) in each of subparagraphs (A) 

11 through (D), by striking ‘‘or letter of cred12 it’’ and inserting ‘‘letter of credit, or credit 

13 exposure’’; 

14 (B) by striking paragraph (2); 

15 (C) by redesignating paragraphs (3) 

16 through (5) as paragraphs (2) through (4), re17 spectively; 

18 (D) in paragraph (2), as so redesignated, 

19 by inserting before the period at the end ‘‘, or 

20 credit exposure to an affiliate resulting from a 

21 securities borrowing or lending transaction, or 

22 derivative transaction’’; and 

23 (E) in paragraph (3), as so redesignated— 

24 (i) by inserting ‘‘or other debt obliga25 tions’’ after ‘‘securities’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
457 

•S 3217 AMDT 3739 

1 (ii) by striking ‘‘or guarantee’’ and all 

2 that follows through ‘‘behalf of,’’ and in3 serting ‘‘guarantee, acceptance, or letter of 

4 credit issued on behalf of, or credit expo5 sure from a securities borrowing or lending 

6 transaction, or derivative transaction to,’’; 

7 (3) in subsection (d)(4), in the matter pre8 ceding subparagraph (A), by striking ‘‘or issuing’’ 

9 and all that follows through ‘‘behalf of,’’ and insert10 ing ‘‘issuing a guarantee, acceptance, or letter of 

11 credit on behalf of, or having credit exposure result12 ing from a securities borrowing or lending trans13 action, or derivative transaction to,’’; and 

14 (4) in subsection (f)— 

15 (A) in paragraph (2)— 

16 (i) by striking ‘‘or order’’; 

17 (ii) by striking ‘‘if it finds’’ and all 

18 that follows through the end of the para19 graph and inserting the following: ‘‘if— 

20 ‘‘(i) the Board finds the exemption to 

21 be in the public interest and consistent 

22 with the purposes of this section, and noti23 fies the Federal Deposit Insurance Cor24 poration of such finding; and 


sroberts on DSKH9S0YB1PROD with BILLS
458 

•S 3217 AMDT 3739 

1 ‘‘(ii) before the end of the 60-day pe2 riod beginning on the date on which the 

3 Federal Deposit Insurance Corporation re4 ceives notice of the finding under clause 

5 (i), the Federal Deposit Insurance Cor6 poration does not object, in writing, to the 

7 finding, based on a determination that the 

8 exemption presents an unacceptable risk to 

9 the Deposit Insurance Fund.’’; 

10 (iii) by striking the Board and insert11 ing the following: 

12 ‘‘(A) IN GENERAL.—The Board’’; and 

13 (iv) by adding at the end the fol14 lowing: 

15 ‘‘(B) ADDITIONAL EXEMPTIONS.— 

16 ‘‘(i) NATIONAL BANKS.—The Comp17 troller of the Currency may, by order, ex18 empt a transaction of a national bank from 

19 the requirements of this section if— 

20 ‘‘(I) the Board and the Office of 

21 the Comptroller of the Currency joint22 ly find the exemption to be in the 

23 public interest and consistent with the 

24 purposes of this section and notify the 


sroberts on DSKH9S0YB1PROD with BILLS
459 

•S 3217 AMDT 3739 

1 Federal Deposit Insurance Corpora2 tion of such finding; and 

3 ‘‘(II) before the end of the 60- 

4 day period beginning on the date on 

5 which the Federal Deposit Insurance 

6 Corporation receives notice of the 

7 finding under subclause (I), the Fed8 eral Deposit Insurance Corporation 

9 does not object, in writing, to the 

10 finding, based on a determination that 

11 the exemption presents an unaccept12 able risk to the Deposit Insurance 

13 Fund. 

14 ‘‘(ii) STATE BANKS.—The Federal 

15 Deposit Insurance Corporation may, by 

16 order, exempt a transaction of a State 

17 bank from the requirements of this section 

18 if— 

19 ‘‘(I) the Board and the Federal 

20 Deposit Insurance Corporation jointly 

21 find that the exemption is in the pub22 lic interest and consistent with the 

23 purposes of this section; and 

24 ‘‘(II) the Federal Deposit Insur25 ance Corporation finds that the exVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00459 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
460 

•S 3217 AMDT 3739 

1 emption does not present an unaccept2 able risk to the Deposit Insurance 

3 Fund.’’; and 

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

5 ‘‘(4) AMOUNTS OF COVERED TRANSACTIONS.— 

6 The Board may issue such regulations or interpreta7 tions as the Board determines are necessary or ap8 propriate with respect to the manner in which a net9 ting agreement may be taken into account in deter10 mining the amount of a covered transaction between 

11 a member bank or a subsidiary and an affiliate, in12 cluding the extent to which netting agreements be13 tween a member bank or a subsidiary and an affil14 iate may be taken into account in determining 

15 whether a covered transaction is fully secured for 

16 purposes of subsection (d)(4). An interpretation 

17 under this paragraph with respect to a specific mem18 ber bank, subsidiary, or affiliate shall be issued 

19 jointly with the appropriate Federal banking agency 

20 for such member bank, subsidiary, or affiliate.’’. 

21 (b) TRANSACTIONS WITH AFFILIATES.—Section 

22 23B(e) of the Federal Reserve Act (12 U.S.C. 371c–1(e)) 

23 is amended— 

24 (1) by striking the undesignated matter fol25 lowing subparagraph (B); 


sroberts on DSKH9S0YB1PROD with BILLS
461 

•S 3217 AMDT 3739 

1 (2) by redesignating subparagraphs (A) and 

2 (B) as clauses (i) and (ii), respectively, and adjust3 ing the clause margins accordingly; 

4 (3) by redesignating paragraphs (1) and (2) as 

5 subparagraphs (A) and (B), respectively, and adjust6 ing the subparagraph margins accordingly; 

7 (4) by striking ‘‘The Board’’ and inserting the 

8 following: 

9 ‘‘(1) IN GENERAL.—The Board’’; 

10 (5) in paragraph (1)(B), as so redesignated— 

11 (A) in the matter preceding clause (i), by 

12 inserting before ‘‘regulations’’ the following: 

13 ‘‘subject to paragraph (2), if the Board finds 

14 that an exemption or exclusion is in the public 

15 interest and is consistent with the purposes of 

16 this section, and notifies the Federal Deposit 

17 Insurance Corporation of such finding,’’; and 

18 (B) in clause (ii), by striking the comma at 

19 the end and inserting a period; and 

20 (6) by adding at the end the following: 

21 ‘‘(2) EXCEPTION.—The Board may grant an 

22 exemption or exclusion under this subsection only if, 

23 during the 60-day period beginning on the date of 

24 receipt of notice of the finding from the Board 

25 under paragraph (1)(B), the Federal Deposit InsurVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00461 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
462 

•S 3217 AMDT 3739 

1 ance Corporation does not object, in writing, to such 

2 exemption or exclusion, based on a determination 

3 that the exemption presents an unacceptable risk to 

4 the Deposit Insurance Fund.’’. 

5 (c) HOME OWNERS’ LOAN ACT.—Section 11 of the 

6 Home Owners’ Loan Act (12 U.S.C. 1468) is amended 

7 by adding at the end the following: 

8 ‘‘(d) EXEMPTIONS.— 

9 ‘‘(1) FEDERAL SAVINGS ASSOCIATIONS.—The 

10 Comptroller of the Currency may, by order, exempt 

11 a transaction of a Federal savings association from 

12 the requirements of this section if— 

13 ‘‘(A) the Board and the Office of the 

14 Comptroller of the Currency jointly find the ex15 emption to be in the public interest and con16 sistent with the purposes of this section and no17 tify the Federal Deposit Insurance Corporation 

18 of such finding; and 

19 ‘‘(B) before the end of the 60-day period 

20 beginning on the date on which the Federal De21 posit Insurance Corporation receives notice of 

22 the finding under subparagraph (A), the Fed23 eral Deposit Insurance Corporation does not ob24 ject, in writing, to the finding, based on a deVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00462 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
463 

•S 3217 AMDT 3739 

1 termination that the exemption presents an un2 acceptable risk to the Deposit Insurance Fund. 

3 ‘‘(2) STATE SAVINGS ASSOCIATION.—The Fed4 eral Deposit Insurance Corporation may, by order, 

5 exempt a transaction of a State savings association 

6 from the requirements of this section if the Board 

7 and the Federal Deposit Insurance Corporation 

8 jointly find that— 

9 ‘‘(A) the exemption is in the public interest 

10 and consistent with the purposes of this section; 

11 and 

12 ‘‘(B) the exemption does not present an 

13 unacceptable risk to the Deposit Insurance 

14 Fund.’’. 

15 (d) EFFECTIVE DATE.—The amendments made by 

16 this section shall take effect 1 year after the transfer date. 

17 SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS 

18 WITH FINANCIAL SUBSIDIARIES. 

19 (a) AMENDMENT.—Section 23A(e) of the Federal Re20 serve Act (12 U.S.C. 371c(e)) is amended— 

21 (1) by striking paragraph (3); and 

22 (2) by redesignating paragraph (4) as para23 graph (3). 

24 (b) PROSPECTIVE APPLICATION OF AMENDMENT.— 

25 The amendments made by this section shall apply with 


sroberts on DSKH9S0YB1PROD with BILLS
464 

•S 3217 AMDT 3739 

1 respect to any covered transaction between a bank and 

2 a subsidiary of the bank, as those terms are defined in 

3 section 23A of the Federal Reserve Act (12 U.S.C. 371c), 

4 that is entered into on or after the date of enactment of 

5 this Act. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect 1 year after the transfer date. 

8 SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPO9 SURE ON DERIVATIVE TRANSACTIONS, RE10 PURCHASE AGREEMENTS, REVERSE REPUR11 CHASE AGREEMENTS, AND SECURITIES 

12 LENDING AND BORROWING TRANSACTIONS. 

13 (a) NATIONAL BANKS.—Section 5200(b) of the Re14 vised Statutes of the United States (12 U.S.C. 84(b)) is 

15 amended— 

16 (1) in paragraph (1), by striking ‘‘shall in17 clude’’ and all that follows through the end of the 

18 paragraph and inserting the following: ‘‘shall in19 clude— 

20 ‘‘(A) all direct or indirect advances of 

21 funds to a person made on the basis of any ob22 ligation of that person to repay the funds or re23 payable from specific property pledged by or on 

24 behalf of the person; 


sroberts on DSKH9S0YB1PROD with BILLS
465 

•S 3217 AMDT 3739 

1 ‘‘(B) to the extent specified by the Comp2 troller of the Currency, any liability of a na3 tional banking association to advance funds to 

4 or on behalf of a person pursuant to a contrac5 tual commitment; and 

6 ‘‘(C) any credit exposure to a person aris7 ing from a derivative transaction, repurchase 

8 agreement, reverse repurchase agreement, secu9 rities lending transaction, or securities bor10 rowing transaction between the national bank11 ing association and the person;’’; 

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

13 the end and inserting ‘‘; and’’; and 

14 (3) by adding at the end the following: 

15 ‘‘(3) the term ‘derivative transaction’ includes 

16 any transaction that is a contract, agreement, swap, 

17 warrant, note, or option that is based, in whole or 

18 in part, on the value of, any interest in, or any 

19 quantitative measure or the occurrence of any event 

20 relating to, one or more commodities, securities, cur21 rencies, interest or other rates, indices, or other as22 sets.’’. 

23 (b) SAVINGS ASSOCIATIONS.—Section 5(u)(3) of the 

24 Home Owners’ Loan Act (12 U.S.C. 1464(u)(3)) is 


sroberts on DSKH9S0YB1PROD with BILLS
466 

•S 3217 AMDT 3739 

1 amended by striking ‘‘Director’’ each place that term ap2 pears and inserting ‘‘Comptroller of the Currency’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall take effect 1 year after the transfer date. 

5 SEC. 611. APPLICATION OF NATIONAL BANK LENDING LIM6 ITS TO INSURED STATE BANKS. 

7 (a) AMENDMENT.—Section 18 of the Federal Deposit 

8 Insurance Act (12 U.S.C. 1828) is amended by adding at 

9 the end the following: 

10 ‘‘(y) APPLICATION OF LENDING LIMITS TO INSURED

11 STATE BANKS.—Section 5200 of the Revised Statutes of 

12 the United States (12 U.S.C. 84) shall apply to each in13 sured State bank, in the same manner and to the same 

14 extent as if the insured State bank were a national bank15 ing association.’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 this section shall take effect 1 year after the transfer date. 

18 SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED 

19 BANKS. 

20 (a) CONVERSION OF A NATIONAL BANKING ASSOCIA21 TION TO A STATE BANK.—The Act entitled ‘‘An Act to 

22 provide for the conversion of national banking associations 

23 into and their merger or consolidation with State banks, 

24 and for other purposes.’’ (12 U.S.C. 214 et seq.) is amend25 ed by adding at the end the following: 


sroberts on DSKH9S0YB1PROD with BILLS
467 

•S 3217 AMDT 3739 

1 ‘‘SEC. 10. PROHIBITION ON CONVERSION. 

2 ‘‘A national banking association may not convert to 

3 a State bank or State savings association during any pe4 riod in which the national banking association is subject 

5 to a cease and desist order (or other formal enforcement 

6 order) issued by, or a memorandum of understanding en7 tered into with, the Comptroller of the Currency with re8 spect to a significant supervisory matter.’’. 

9 (b) CONVERSION OF A STATE BANK TO A NATIONAL

10 BANK.—Section 5154 of the Revised Statutes of the 

11 United States (12 U.S.C. 35) is amended by adding at 

12 the end the following: ‘‘The Comptroller of the Currency 

13 may not approve the conversion of a State bank or State 

14 savings association to a national banking association dur15 ing any period in which the State bank or State savings 

16 association is subject to a cease and desist order (or other 

17 formal enforcement order) issued by, or a memorandum 

18 of understanding entered into with, a State bank super19 visor or the appropriate Federal banking agency with re20 spect to a significant supervisory matter.’’. 

21 (c) CONVERSION OF A FEDERAL SAVINGS ASSOCIA22 TION TO A NATIONAL OR STATE BANK OR STATE SAVINGS

23 ASSOCIATION.—Section 5(i) of the Home Owners’ Loan 

24 Act (12 U.S.C. 1464(i)) is amended by adding at the end 

25 the following: 


sroberts on DSKH9S0YB1PROD with BILLS
468 

•S 3217 AMDT 3739 

1 ‘‘(6) LIMITATION ON CERTAIN CONVERSIONS BY

2 FEDERAL SAVINGS ASSOCIATIONS.—A Federal sav3 ings association may not convert to a national bank 

4 or State bank or State savings association during 

5 any period in which the Federal savings association 

6 is subject to a cease and desist order (or other for7 mal enforcement order) issued by, or a memorandum 

8 of understanding entered into with, the Office of 

9 Thrift Supervision or the Comptroller of the Cur10 rency with respect to a significant supervisory mat11 ter.’’. 

12 SEC. 613. DE NOVO BRANCHING INTO STATES. 

13 (a) NATIONAL BANKS.—Section 5155(g)(1)(A) of the 

14 Revised Statutes of the United States (12 U.S.C. 

15 36(g)(1)(A)) is amended to read as follows: 

16 ‘‘(A) the law of the State in which the 

17 branch is located, or is to be located, would per18 mit establishment of the branch, if the national 

19 bank were a State bank chartered by such 

20 State; and’’. 

21 (b) STATE INSURED BANKS.—Section 18(d)(4)(A)(i) 

22 of the Federal Deposit Insurance Act (12 U.S.C. 

23 1828(d)(4)(A)(i)) is amended to read as follows: 

24 ‘‘(i) the law of the State in which the 

25 branch is located, or is to be located, would 


sroberts on DSKH9S0YB1PROD with BILLS
469 

•S 3217 AMDT 3739 

1 permit establishment of the branch, if the 

2 bank were a State bank chartered by such 

3 State; and’’. 

4 SEC. 614. LENDING LIMITS TO INSIDERS. 

5 (a) EXTENSIONS OF CREDIT.—Section 

6 22(h)(9)(D)(i) of the Federal Reserve Act (12 U.S.C. 

7 375b(9)(D)(i)) is amended— 

8 (1) by striking the period at the end and insert9 ing ‘‘; or’’; 

10 (2) by striking ‘‘a person’’ and inserting ‘‘the 

11 person’’; 

12 (3) by striking ‘‘extends credit by making’’ and 

13 inserting the following: ‘‘extends credit to a person 

14 by— 

15 ‘‘(I) making’’; and 

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

17 ‘‘(II) having credit exposure to 

18 the person arising from a derivative 

19 transaction (as defined in section 

20 5200(b) of the Revised Statutes of the 

21 United States (12 U.S.C. 84(b))), re22 purchase agreement, reverse repur23 chase agreement, securities lending 

24 transaction, or securities borrowing 


sroberts on DSKH9S0YB1PROD with BILLS
470 

•S 3217 AMDT 3739 

1 transaction between the member bank 

2 and the person.’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall take effect 1 year after the transfer date. 

5 SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM 

6 INSIDERS. 

7 (a) AMENDMENT TO THE FEDERAL DEPOSIT INSUR8 ANCE ACT.—Section 18 of the Federal Deposit Insurance 

9 Act (12 U.S.C. 1828) is amended by adding at the end 

10 the following: 

11 ‘‘(z) GENERAL PROHIBITION ON SALE OF ASSETS.— 

12 ‘‘(1) IN GENERAL.—An insured depository in13 stitution may not purchase an asset from, or sell an 

14 asset to, an executive officer, director, or principal 

15 shareholder of the insured depository institution, or 

16 any related interest of such person (as such terms 

17 are defined in section 22(h) of Federal Reserve Act), 

18 unless— 

19 ‘‘(A) the transaction is on market terms; 

20 and 

21 ‘‘(B) if the transaction represents more 

22 than 10 percent of the capital stock and surplus 

23 of the insured depository institution, the trans24 action has been approved in advance by a ma25 jority of the members of the board of directors 


sroberts on DSKH9S0YB1PROD with BILLS
471 

•S 3217 AMDT 3739 

1 of the insured depository institution who do not 

2 have an interest in the transaction. 

3 ‘‘(2) RULEMAKING.—The Board of Governors 

4 of the Federal Reserve System may issue such rules 

5 as may be necessary to define terms and to carry 

6 out the purposes this subsection. Before proposing 

7 or adopting a rule under this paragraph, the Board 

8 of Governors of the Federal Reserve System shall 

9 consult with the Comptroller of the Currency and 

10 the Corporation as to the terms of the rule.’’. 

11 (b) AMENDMENTS TO THE FEDERAL RESERVE

12 ACT.—Section 22(d) of the Federal Reserve Act (12 

13 U.S.C. 375) is amended to read as follows: 

14 ‘‘(d) [Reserved]’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall take effect on the transfer date. 

17 SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS OF 

18 HOLDING COMPANIES. 

19 (a) CAPITAL LEVELS OF BANK HOLDING COMPA20 NIES.—Section 5(b) of the Bank Holding Company Act 

21 of 1956 (12 U.S.C. 1844(b)) is amended by inserting after 

22 ‘‘regulations’’ the following: ‘‘(including regulations relat23 ing to the capital requirements of bank holding compa24 nies)’’. 


sroberts on DSKH9S0YB1PROD with BILLS
472 

•S 3217 AMDT 3739 

1 (b) CAPITAL LEVELS OF SAVINGS AND LOAN HOLD2 ING COMPANIES.—Section 10(g)(1) of the Home Owners’ 

3 Loan Act (12 U.S.C. 1467a(g)(1)) is amended by insert4 ing after ‘‘orders’’ the following: ‘‘(including regulations 

5 relating to capital requirements for savings and loan hold6 ing companies)’’. 

7 (c) SOURCE OF STRENGTH.—The Federal Deposit 

8 Insurance Act (12 U.S.C. 1811 et seq.) is amended by 

9 inserting after section 38 (12 U.S.C. 1831o) the following: 

10 ‘‘SEC. 38A. SOURCE OF STRENGTH. 

11 ‘‘(a) HOLDING COMPANIES.—The appropriate Fed12 eral banking agency for a bank holding company or sav13 ings and loan holding company shall require the bank 

14 holding company or savings and loan holding company to 

15 serve as a source of financial strength for any subsidiary 

16 of the bank holding company or savings and loan holding 

17 company that is a depository institution. 

18 ‘‘(b) OTHER COMPANIES.—If an insured depository 

19 institution is not the subsidiary of a bank holding com20 pany or savings and loan holding company, the appro21 priate Federal banking agency for the insured depository 

22 institution shall require any company that directly or indi23 rectly controls the insured depository institution to serve 

24 as a source of financial strength for such institution. 


sroberts on DSKH9S0YB1PROD with BILLS
473 

•S 3217 AMDT 3739 

1 ‘‘(c) REPORTS.—The appropriate Federal banking 

2 agency for an insured depository institution described in 

3 subsection (b) may, from time to time, require the com4 pany, or a company that directly or indirectly controls the 

5 insured depository institution to submit a report, under 

6 oath, for the purposes of— 

7 ‘‘(1) assessing the ability of such company to 

8 comply with the requirement under subsection (b); 

9 and 

10 ‘‘(2) enforcing the compliance of such company 

11 with the requirement under subsection (b). 

12 ‘‘(d) RULES.—Not later than 1 year after the trans13 fer date, as defined in section 311 of the Enhancing Fi14 nancial Institution Safety and Soundness Act of 2010, the 

15 appropriate Federal banking agencies shall jointly issue 

16 final rules to carry out this section. 

17 ‘‘(e) DEFINITION.—In this section, the term ‘source 

18 of financial strength’ means the ability of a company that 

19 directly or indirectly owns or controls an insured deposi20 tory institution to provide financial assistance to such in21 sured depository institution in the event of the financial 

22 distress of the insured depository institution.’’. 

23 (d) EFFECTIVE DATE.—The amendments made by 

24 this section shall take effect on the transfer date. 


sroberts on DSKH9S0YB1PROD with BILLS
474 

•S 3217 AMDT 3739 

1 SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK 

2 HOLDING COMPANY FRAMEWORK. 

3 (a) AMENDMENT.—Section 17 of the Securities Ex4 change Act of 1934 (15 U.S.C. 78q) is amended— 

5 (1) by striking subsection (i); and 

6 (2) by redesignating subsections (j) and (k) as 

7 subsections (i) and (j), respectively. 

8 (b) EFFECTIVE DATE.—The amendments made by 

9 this section shall take effect on the transfer date. 

10 SEC. 618. SECURITIES HOLDING COMPANIES. 

11 (a) DEFINITIONS.—In this section— 

12 (1) the term ‘‘associated person of a securities 

13 holding company’’ means a person directly or indi14 rectly controlling, controlled by, or under common 

15 control with, a securities holding company; 

16 (2) the term ‘‘foreign bank’’ has the same 

17 meaning as in section 1(b)(7) of the International 

18 Banking Act of 1978 (12 U.S.C. 3101(b)(7)); 

19 (3) the term ‘‘insured bank’’ has the same 

20 meaning as in section 3 of the Federal Deposit In21 surance Act (12 U.S.C. 1813); 

22 (4) the term ‘‘securities holding company’’— 

23 (A) means— 

24 (i) a person (other than a natural per25 son) that owns or controls 1 or more broVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00474 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
475 

•S 3217 AMDT 3739 

1 kers or dealers registered with the Com2 mission; and 

3 (ii) the associated persons of a person 

4 described in clause (i); and 

5 (B) does not include a person that is— 

6 (i) a nonbank financial company su7 pervised by the Board under title I; 

8 (ii) an affiliate of an insured bank 

9 (other than an institution described in sub10 paragraphs (D), (F), or (H) of section 

11 2(c)(2) of the Bank Holding Company Act 

12 of 1956 (12 U.S.C. 1841(c)(2)) or an affil13 iate of a savings association; 

14 (iii) a foreign bank, foreign company, 

15 or company that is described in section 

16 8(a) of the International Banking Act of 

17 1978 (12 U.S.C. 3106(a)); 

18 (iv) a foreign bank that controls, di19 rectly or indirectly, a corporation chartered 

20 under section 25A of the Federal Reserve 

21 Act (12 U.S.C. 611 et seq.); or 

22 (v) subject to comprehensive consoli23 dated supervision by a foreign regulator; 

24 (5) the term ‘‘supervised securities holding com25 pany’’ means a securities holding company that is 


sroberts on DSKH9S0YB1PROD with BILLS
476 

•S 3217 AMDT 3739 

1 supervised by the Board of Governors under this 

2 section; and 

3 (6) the terms ‘‘affiliate’’, ‘‘bank’’, ‘‘bank hold4 ing company’’, ‘‘company’’, ‘‘control’’, ‘‘savings asso5 ciation’’, and ‘‘subsidiary’’ have the same meanings 

6 as in section 2 of the Bank Holding Company Act 

7 of 1956. 

8 (b) SUPERVISION OF A SECURITIES HOLDING COM9 PANY NOT HAVING A BANK OR SAVINGS ASSOCIATION

10 AFFILIATE.— 

11 (1) IN GENERAL.—A securities holding com12 pany that is required by a foreign regulator or provi13 sion of foreign law to be subject to comprehensive 

14 consolidated supervision may register with the Board 

15 of Governors under paragraph (2) to become a su16 pervised securities holding company. Any securities 

17 holding company filing such a registration shall be 

18 supervised in accordance with this section, and shall 

19 comply with the rules and orders prescribed by the 

20 Board of Governors applicable to supervised securi21 ties holding companies. 

22 (2) REGISTRATION AS A SUPERVISED SECURI23 TIES HOLDING COMPANY.— 

24 (A) REGISTRATION.—A securities holding 

25 company that elects to be subject to comprehenVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00476 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
477 

•S 3217 AMDT 3739 

1 sive consolidated supervision shall register by 

2 filing with the Board of Governors such infor3 mation and documents as the Board of Gov4 ernors, by regulation, may prescribe as nec5 essary or appropriate in furtherance of the pur6 poses of this section. 

7 (B) EFFECTIVE DATE.—A securities hold8 ing company that registers under subparagraph 

9 (A) shall be deemed to be a supervised securi10 ties holding company, effective on the date that 

11 is 45 days after the date of receipt of the reg12 istration information and documents under sub13 paragraph (A) by the Board of Governors, or 

14 within such shorter period as the Board of Gov15 ernors, by rule or order, may determine. 

16 (c) SUPERVISION OF SECURITIES HOLDING COMPA17 NIES.— 

18 (1) RECORDKEEPING AND REPORTING.— 

19 (A) RECORDKEEPING AND REPORTING RE20 QUIRED.—Each supervised securities holding 

21 company and each affiliate of a supervised secu22 rities holding company shall make and keep for 

23 periods determined by the Board of Governors 

24 such records, furnish copies of such records, 

25 and make such reports, as the Board of GovVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00477 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
478 

•S 3217 AMDT 3739 

1 ernors determines to be necessary or appro2 priate to carry out this section, to prevent eva3 sions thereof, and to monitor compliance by the 

4 supervised securities holding company or affil5 iate with applicable provisions of law. 

6 (B) FORM AND CONTENTS.— 

7 (i) IN GENERAL.—Any record or re8 port required to be made, furnished, or 

9 kept under this paragraph shall— 

10 (I) be prepared in such form and 

11 according to such specifications (in12 cluding certification by a registered 

13 public accounting firm), as the Board 

14 of Governors may require; and 

15 (II) be provided promptly to the 

16 Board of Governors at any time, upon 

17 request by the Board of Governors. 

18 (ii) CONTENTS.—Records and reports 

19 required to be made, furnished, or kept 

20 under this paragraph may include— 

21 (I) a balance sheet or income 

22 statement of the supervised securities 

23 holding company or an affiliate of a 

24 supervised securities holding company; 


sroberts on DSKH9S0YB1PROD with BILLS
479 

•S 3217 AMDT 3739 

1 (II) an assessment of the consoli2 dated capital and liquidity of the su3 pervised securities holding company; 

4 (III) a report by an independent 

5 auditor attesting to the compliance of 

6 the supervised securities holding com7 pany with the internal risk manage8 ment and internal control objectives of 

9 the supervised securities holding com10 pany; and 

11 (IV) a report concerning the ex12 tent to which the supervised securities 

13 holding company or affiliate has com14 plied with the provisions of this sec15 tion and any regulations prescribed 

16 and orders issued under this section. 

17 (2) USE OF EXISTING REPORTS.— 

18 (A) IN GENERAL.—The Board of Gov19 ernors shall, to the fullest extent possible, ac20 cept reports in fulfillment of the requirements 

21 of this paragraph that a supervised securities 

22 holding company or an affiliate of a supervised 

23 securities holding company has been required to 

24 provide to another regulatory agency or a self25 regulatory organization. 


sroberts on DSKH9S0YB1PROD with BILLS
480 

•S 3217 AMDT 3739 

1 (B) AVAILABILITY.—A supervised securi2 ties holding company or an affiliate of a super3 vised securities holding company shall promptly 

4 provide to the Board of Governors, at the re5 quest of the Board of Governors, any report de6 scribed in subparagraph (A), as permitted by 

7 law. 

8 (3) EXAMINATION AUTHORITY.— 

9 (A) FOCUS OF EXAMINATION AUTHOR10 ITY.—The Board of Governors may make ex11 aminations of any supervised securities holding 

12 company and any affiliate of a supervised secu13 rities holding company to carry out this sub14 section, to prevent evasions thereof, and to 

15 monitor compliance by the supervised securities 

16 holding company or affiliate with applicable 

17 provisions of law. 

18 (B) DEFERENCE TO OTHER EXAMINA19 TIONS.—For purposes of this subparagraph, the 

20 Board of Governors shall, to the fullest extent 

21 possible, use the reports of examination made 

22 by other appropriate Federal or State regu23 latory authorities with respect to any function24 ally regulated subsidiary or any institution de25 scribed in subparagraph (D), (F), or (H) of 


sroberts on DSKH9S0YB1PROD with BILLS
481 

•S 3217 AMDT 3739 

1 section 2(c)(2) of the Bank Holding Company 

2 Act of 1956 (12 U.S.C. 1841(c)(2)). 

3 (d) CAPITAL AND RISK MANAGEMENT.— 

4 (1) IN GENERAL.—The Board of Governors 

5 shall, by regulation or order, prescribe capital ade6 quacy and other risk management standards for su7 pervised securities holding companies that are ap8 propriate to protect the safety and soundness of the 

9 supervised securities holding companies and address 

10 the risks posed to financial stability by supervised 

11 securities holding companies. 

12 (2) DIFFERENTIATION.—In imposing standards 

13 under this subsection, the Board of Governors may 

14 differentiate among supervised securities holding 

15 companies on an individual basis, or by category, 

16 taking into consideration the requirements under 

17 paragraph (3). 

18 (3) CONTENT.—Any standards imposed on a 

19 supervised securities holding company under this 

20 subsection shall take into account— 

21 (A) the differences among types of busi22 ness activities carried out by the supervised se23 curities holding company; 


sroberts on DSKH9S0YB1PROD with BILLS
482 

•S 3217 AMDT 3739 

1 (B) the amount and nature of the financial 

2 assets of the supervised securities holding com3 pany; 

4 (C) the amount and nature of the liabilities 

5 of the supervised securities holding company, 

6 including the degree of reliance on short-term 

7 funding; 

8 (D) the extent and nature of the off-bal9 ance sheet exposures of the supervised securi10 ties holding company; 

11 (E) the extent and nature of the trans12 actions and relationships of the supervised secu13 rities holding company with other financial 

14 companies; 

15 (F) the importance of the supervised secu16 rities holding company as a source of credit for 

17 households, businesses, and State and local gov18 ernments, and as a source of liquidity for the 

19 financial system; and 

20 (G) the nature, scope, and mix of the ac21 tivities of the supervised securities holding com22 pany. 

23 (4) NOTICE.—A capital requirement imposed 

24 under this subsection may not take effect earlier 

25 than 180 days after the date on which a supervised 


sroberts on DSKH9S0YB1PROD with BILLS
483 

•S 3217 AMDT 3739 

1 securities holding company is provided notice of the 

2 capital requirement. 

3 (e) EXCEPTION FOR BANKS.—No bank shall be sub4 ject to any of the requirements set forth in subsections 

5 (c) and (d). 

6 (f) OTHER PROVISIONS OF LAW APPLICABLE TO SU7 PERVISED SECURITIES HOLDING COMPANIES.— 

8 (1) FEDERAL DEPOSIT INSURANCE ACT.—Sub9 sections (b), (c) through (s), and (u) of section 8 of 

10 the Federal Deposit Insurance Act (12 U.S.C. 1818) 

11 shall apply to any supervised securities holding com12 pany, and to any subsidiary (other than a bank or 

13 an institution described in subparagraph (D), (F), 

14 or (H) of section 2(c)(2) of the Bank Holding Com15 pany Act of 1956 (12 U.S.C. 1841(c)(2))) of a su16 pervised securities holding company, in the same 

17 manner as such subsections apply to a bank holding 

18 company for which the Board of Governors is the 

19 appropriate Federal banking agency. For purposes 

20 of applying such subsections to a supervised securi21 ties holding company or a subsidiary (other than a 

22 bank or an institution described in subparagraph 

23 (D), (F), or (H) of section 2(c)(2) of the Bank 

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

25 1841(c)(2))) of a supervised securities holding comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00483 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
484 

•S 3217 AMDT 3739 

1 pany, the Board of Governors shall be deemed the 

2 appropriate Federal banking agency for the super3 vised securities holding company or subsidiary. 

4 (2) BANK HOLDING COMPANY ACT OF 1956.— 

5 Except as the Board of Governors may otherwise 

6 provide by regulation or order, a supervised securi7 ties holding company shall be subject to the provi8 sions of the Bank Holding Company Act of 1956 

9 (12 U.S.C. 1841 et seq.) in the same manner and 

10 to the same extent a bank holding company is sub11 ject to such provisions, except that a supervised se12 curities holding company may not, by reason of this 

13 paragraph, be deemed to be a bank holding company 

14 for purposes of section 4 of the Bank Holding Com15 pany Act of 1956 (12 U.S.C. 1843). 

16 SEC. 619. RESTRICTIONS ON CAPITAL MARKET ACTIVITY BY 

17 BANKS AND BANK HOLDING COMPANIES. 

18 (a) DEFINITIONS.—In this section— 

19 (1) the terms ‘‘hedge fund’’ and ‘‘private equity 

20 fund’’ mean a company or other entity that is ex21 empt from registration as an investment company 

22 pursuant to section 3(c)(1) or 3(c)(7) of the Invest23 ment Company Act of 1940 (15 U.S.C. 80a-3(c)(1) 

24 or 80a-3(c)(7)), or a similar fund, as jointly deter25 mined by the appropriate Federal banking agencies; 


sroberts on DSKH9S0YB1PROD with BILLS
485 

•S 3217 AMDT 3739 

1 (2) the term ‘‘proprietary trading’’— 

2 (A) means purchasing or selling, or other3 wise acquiring or disposing of, stocks, bonds, 

4 options, commodities, derivatives, or other fi5 nancial instruments by an insured depository 

6 institution, a company that controls, directly or 

7 indirectly, an insured depository institution or 

8 is treated as a bank holding company for pur9 poses of the Bank Holding Company Act of 

10 1956 (12 U.S.C. 1841 et seq.), and any sub11 sidiary of such institution or company, for the 

12 trading book (or such other portfolio as the 

13 Federal banking agencies may determine) of 

14 such institution, company, or subsidiary; and 

15 (B) subject to such restrictions as the Fed16 eral banking agencies may determine, does not 

17 include purchasing or selling, or otherwise ac18 quiring or disposing of, stocks, bonds, options, 

19 commodities, derivatives, or other financial in20 struments on behalf of a customer, as part of 

21 market making activities, or otherwise in con22 nection with or in facilitation of customer rela23 tionships, including risk-mitigating hedging ac24 tivities related to such a purchase, sale, acquisi25 tion, or disposal; and 


sroberts on DSKH9S0YB1PROD with BILLS
486 

•S 3217 AMDT 3739 

1 (3) the term ‘‘sponsoring’’, when used with re2 spect to a hedge fund or private equity fund, 

3 means— 

4 (A) serving as a general partner, managing 

5 member, or trustee of the fund; 

6 (B) in any manner selecting or controlling 

7 (or having employees, officers, directors, or 

8 agents who constitute) a majority of the direc9 tors, trustees, or management of the fund; or 

10 (C) sharing with the fund, for corporate, 

11 marketing, promotional, or other purposes, the 

12 same name or a variation of the same name. 

13 (b) PROHIBITION ON PROPRIETARY TRADING.— 

14 (1) IN GENERAL.—Subject to the recommenda15 tions and modifications of the Council under sub16 section (g), and except as provided in paragraph (2) 

17 or (3), the appropriate Federal banking agencies 

18 shall, through a rulemaking under subsection (g), 

19 jointly prohibit proprietary trading by an insured de20 pository institution, a company that controls, di21 rectly or indirectly, an insured depository institution 

22 or is treated as a bank holding company for pur23 poses of the Bank Holding Company Act of 1956 

24 (12 U.S.C. 1841 et seq.), and any subsidiary of such 

25 institution or company. 


sroberts on DSKH9S0YB1PROD with BILLS
487 

•S 3217 AMDT 3739 

1 (2) EXCEPTED OBLIGATIONS.— 

2 (A) IN GENERAL.—The prohibition under 

3 this subsection shall not apply with respect to 

4 an investment that is otherwise authorized by 

5 Federal law in— 

6 (i) obligations of the United States or 

7 any agency of the United States, including 

8 obligations fully guaranteed as to principal 

9 and interest by the United States or an 

10 agency of the United States; 

11 (ii) obligations, participations, or 

12 other instruments of, or issued by, the 

13 Government National Mortgage Associa14 tion, the Federal National Mortgage Asso15 ciation, or the Federal Home Loan Mort16 gage Corporation, including obligations 

17 fully guaranteed as to principal and inter18 est by such entities; and 

19 (iii) obligations of any State or any 

20 political subdivision of a State. 

21 (B) CONDITIONS.—The appropriate Fed22 eral banking agencies may impose conditions on 

23 the conduct of investments described in sub24 paragraph (A). 


sroberts on DSKH9S0YB1PROD with BILLS
488 

•S 3217 AMDT 3739 

1 (C) RULE OF CONSTRUCTION.—Nothing in 

2 subparagraph (A) may be construed to grant 

3 any authority to any person that is not other4 wise provided in Federal law. 

5 (3) FOREIGN ACTIVITIES.—An investment or 

6 activity conducted by a company pursuant to para7 graph (9) or (13) of section 4(c) of the Bank Hold8 ing Company Act of 1956 (12 U.S.C. 1843(c)) solely 

9 outside of the United States shall not be subject to 

10 the prohibition under paragraph (1), provided that 

11 the company is not directly or indirectly controlled 

12 by a company that is organized under the laws of 

13 the United States or of a State. 

14 (c) PROHIBITION ON SPONSORING AND INVESTING IN

15 HEDGE FUNDS AND PRIVATE EQUITY FUNDS.— 

16 (1) IN GENERAL.—Except as provided in para17 graph (2), and subject to the recommendations and 

18 modifications of the Council under subsection (g), 

19 the appropriate Federal banking agencies shall, 

20 through a rulemaking under subsection (g), jointly 

21 prohibit an insured depository institution, a com22 pany that controls, directly or indirectly, an insured 

23 depository institution or is treated as a bank holding 

24 company for purposes of the Bank Holding Com25 pany Act of 1956 (12 U.S.C. 1841 et seq.), or any 


sroberts on DSKH9S0YB1PROD with BILLS
489 

•S 3217 AMDT 3739 

1 subsidiary of such institution or company, from 

2 sponsoring or investing in a hedge fund or a private 

3 equity fund. 

4 (2) APPLICATION TO FOREIGN ACTIVITIES OF

5 FOREIGN FIRMS.—An investment or activity con6 ducted by a company pursuant to paragraph (9) or 

7 (13) of section 4(c) of the Bank Holding Company 

8 Act of 1956 (12 U.S.C. 1843(c)) solely outside of 

9 the United States shall not be subject to the prohibi10 tions and restrictions under paragraph (1), provided 

11 that the company is not directly or indirectly con12 trolled by a company that is organized under the 

13 laws of the United States or of a State. 

14 (d) INVESTMENTS IN SMALL BUSINESS INVESTMENT

15 COMPANIES AND INVESTMENTS DESIGNED TO PROMOTE

16 THE PUBLIC WELFARE.— 

17 (1) IN GENERAL.—A prohibition imposed by 

18 the appropriate Federal banking agencies under sub19 section (c) shall not apply with respect an invest20 ment otherwise authorized under Federal law that 

21 is— 

22 (A) an investment in a small business in23 vestment company, as that term is defined in 

24 section 103 of the Small Business Investment 

25 Act of 1958 (15 U.S.C. 662); or 


sroberts on DSKH9S0YB1PROD with BILLS
490 

•S 3217 AMDT 3739 

1 (B) designed primarily to promote the pub2 lic welfare, as provided in the 11th paragraph 

3 of section 5136 of the Revised Statutes (12 

4 U.S.C. 24). 

5 (2) RULE OF CONSTRUCTION.—Nothing in 

6 paragraph (1) may be construed to grant any au7 thority to any person that is not otherwise provided 

8 in Federal law. 

9 (e) LIMITATIONS ON RELATIONSHIPS WITH HEDGE

10 FUNDS AND PRIVATE EQUITY FUNDS.— 

11 (1) COVERED TRANSACTIONS.—An insured de12 pository institution, a company that controls, di13 rectly or indirectly, an insured depository institution 

14 or is treated as a bank holding company for pur15 poses of the Bank Holding Company Act of 1956 

16 (12 U.S.C. 1841 et seq.), and any subsidiary of such 

17 institution or company that serves, directly or indi18 rectly, as the investment manager or investment ad19 viser to a hedge fund or private equity fund may not 

20 enter into a covered transaction, as defined in sec21 tion 23A of the Federal Reserve Act (12 U.S.C. 

22 371c) with such hedge fund or private equity fund. 

23 (2) AFFILIATION.—An insured depository insti24 tution, a company that controls, directly or indi25 rectly, an insured depository institution or is treated 


sroberts on DSKH9S0YB1PROD with BILLS
491 

•S 3217 AMDT 3739 

1 as a bank holding company for purposes of the Bank 

2 Holding Company Act of 1956 (12 U.S.C. 1841 et 

3 seq.), and any subsidiary of such institution or com4 pany that serves, directly or indirectly, as the invest5 ment manager or investment adviser to a hedge fund 

6 or private equity fund shall be subject to section 

7 23B of the Federal Reserve Act (12 U.S.C. 371c-1) 

8 as if such institution, company, or subsidiary were 

9 a member bank and such hedge fund or private eq10 uity fund were an affiliate. 

11 (f) CAPITAL AND QUANTITATIVE LIMITATIONS FOR

12 CERTAIN NONBANK FINANCIAL COMPANIES.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2), and subject to the recommendations and 

15 modifications of the Council under subsection (g), 

16 the Board of Governors shall adopt rules imposing 

17 additional capital requirements and specifying addi18 tional quantitative limits for nonbank financial com19 panies supervised by the Board of Governors under 

20 section 113 that engage in proprietary trading or 

21 sponsoring and investing in hedge funds and private 

22 equity funds. 

23 (2) EXCEPTIONS.—The rules under this sub24 section shall not apply with respect to the trading of 


sroberts on DSKH9S0YB1PROD with BILLS
492 

•S 3217 AMDT 3739 

1 an investment that is otherwise authorized by Fed2 eral law— 

3 (A) in obligations of the United States or 

4 any agency of the United States, including obli5 gations fully guaranteed as to principal and in6 terest by the United States or an agency of the 

7 United States; 

8 (B) in obligations, participations, or other 

9 instruments of, or issued by, the Government 

10 National Mortgage Association, the Federal Na11 tional Mortgage Association, or the Federal 

12 Home Loan Mortgage Corporation, including 

13 obligations fully guaranteed as to principal and 

14 interest by such entities; 

15 (C) in obligations of any State or any po16 litical subdivision of a State; 

17 (D) in a small business investment com18 pany, as that term is defined in section 103 of 

19 the Small Business Investment Act of 1958 (15 

20 U.S.C. 662); or 

21 (E) that is designed primarily to promote 

22 the public welfare, as provided in the 11th 

23 paragraph of section 5136 of the Revised Stat24 utes (12 U.S.C. 24). 

25 (g) COUNCIL STUDY AND RULEMAKING.— 


sroberts on DSKH9S0YB1PROD with BILLS
493 

•S 3217 AMDT 3739 

1 (1) STUDY AND RECOMMENDATIONS.—Not 

2 later than 6 months after the date of enactment of 

3 this Act, the Council— 

4 (A) shall complete a study of the defini5 tions under subsection (a) and the other provi6 sions under subsections (b) through (f), to as7 sess the extent to which the definitions under 

8 subsection (a) and the implementation of sub9 sections (a) through (f) would— 

10 (i) promote and enhance the safety 

11 and soundness of depository institutions 

12 and the affiliates of depository institutions; 

13 (ii) protect taxpayers and enhance fi14 nancial stability by minimizing the risk 

15 that depository institutions and the affili16 ates of depository institutions will engage 

17 in unsafe and unsound activities; 

18 (iii) limit the inappropriate transfer of 

19 Federal subsidies from institutions that 

20 benefit from deposit insurance and liquid21 ity facilities of the Federal Government to 

22 unregulated entities; 

23 (iv) reduce inappropriate conflicts of 

24 interest between the self-interest of deposi25 tory institutions, affiliates of depository inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00493 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
494 

•S 3217 AMDT 3739 

1 stitutions, and financial companies super2 vised by the Board, and the interests of 

3 the customers of such institutions and 

4 companies; 

5 (v) raise the cost of credit or other fi6 nancial services, reduce the availability of 

7 credit or other financial services, or impose 

8 other costs on households and businesses 

9 in the United States; 

10 (vi) limit activities that have caused 

11 undue risk or loss in depository institu12 tions, affiliates of depository institutions, 

13 and financial companies supervised by the 

14 Board of Governors, or that might reason15 ably be expected to create undue risk or 

16 loss in such institutions, affiliates, and 

17 companies; and 

18 (vii) appropriately accommodates the 

19 business of insurance within an insurance 

20 company subject to regulation in accord21 ance with State insurance company invest22 ment laws; 

23 (B) shall make recommendations regarding 

24 the definitions under subsection (a) and the im25 plementation of other provisions under subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00494 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
495 

•S 3217 AMDT 3739 

1 sections (b) through (f), including any modifica2 tions to the definitions, prohibitions, require3 ments, and limitations contained therein that 

4 the Council determines would more effectively 

5 implement the purposes of this section; and 

6 (C) may make recommendations for pro7 hibiting the conduct of the activities described 

8 in subsections (b) and (c) above a specific 

9 threshold amount and imposing additional cap10 ital requirements on activities conducted below 

11 such threshold amount. 

12 (2) RULEMAKING.—Not earlier than the date of 

13 completion of the study required under paragraph 

14 (1), and not later than 9 months after the date of 

15 completion of such study— 

16 (A) the appropriate Federal banking agen17 cies shall jointly issue final regulations imple18 menting subsections (b) through (e), which 

19 shall reflect any recommendations or modifica20 tions made by the Council pursuant to para21 graph (1)(B); and 

22 (B) the Board of Governors shall issue 

23 final regulations implementing subsection (f), 

24 which shall reflect any recommendations or 


sroberts on DSKH9S0YB1PROD with BILLS
496 

•S 3217 AMDT 3739 

1 modifications made by the Council pursuant to 

2 paragraph (1)(B). 

3 (h) TRANSITION.— 

4 (1) IN GENERAL.—The final regulations issued 

5 by the appropriate Federal banking agencies and the 

6 Board of Governors under subsection (g)(2) shall 

7 provide that, effective 2 years after the date on 

8 which such final regulations are issued, no insured 

9 depository institution, company that controls, di10 rectly or indirectly, an insured depository institution, 

11 company that is treated as a bank holding company 

12 for purposes of the Bank Holding Company Act of 

13 1956 (12 U.S.C. 1841 et seq.), or subsidiary of such 

14 institution or company, may retain any investment 

15 or relationship prohibited under such regulations. 

16 (2) EXTENSION.— 

17 (A) IN GENERAL.—The appropriate Fed18 eral banking agency for an insured depository 

19 institution or a company described in paragraph 

20 (1) may, upon the application of any such com21 pany, extend the 2-year period under paragraph 

22 (1) with respect to such company, if the appro23 priate Federal banking agency determines that 

24 an extension would not be detrimental to the 

25 public interest. 


sroberts on DSKH9S0YB1PROD with BILLS
497 

•S 3217 AMDT 3739 

1 (B) TIME PERIOD FOR EXTENSION.—An 

2 extension granted under subparagraph (A) may 

3 not exceed— 

4 (i) 1 year for each determination 

5 made by the appropriate Federal banking 

6 agency under subparagraph (A); and 

7 (ii) a total of 3 years with respect to 

8 any 1 company. 

9 SEC. 620. CONCENTRATION LIMITS ON LARGE FINANCIAL 

10 FIRMS. 

11 The Bank Holding Company Act of 1956 (12 U.S.C. 

12 1841 et seq.) is amended by adding at the end the fol13 lowing: 

14 ‘‘SEC. 13. CONCENTRATION LIMITS ON LARGE FINANCIAL 

15 FIRMS. 

16 ‘‘(a) DEFINITIONS.—In this section— 

17 ‘‘(1) the term ‘Council’ means the Financial 

18 Stability Oversight Council; 

19 ‘‘(2) the term ‘financial company’ means— 

20 ‘‘(A) an insured depository institution; 

21 ‘‘(B) a bank holding company; 

22 ‘‘(C) a savings and loan holding company; 

23 ‘‘(D) a company that controls an insured 

24 depository institution; 


sroberts on DSKH9S0YB1PROD with BILLS
498 

•S 3217 AMDT 3739 

1 ‘‘(E) a nonbank financial company super2 vised by the Board under title I of the Restor3 ing American Financial Stability Act of 2010; 

4 and 

5 ‘‘(F) a foreign bank or company that is 

6 treated as a bank holding company for purposes 

7 of this Act; and 

8 ‘‘(3) the term ‘liabilities’ means— 

9 ‘‘(A) with respect to a United States finan10 cial company— 

11 ‘‘(i) the total risk-weighted assets of 

12 the financial company, as determined 

13 under the risk-based capital rules applica14 ble to bank holding companies, as adjusted 

15 to reflect exposures that are deducted from 

16 regulatory capital; less 

17 ‘‘(ii) the total regulatory capital of the 

18 financial company under the risk-based 

19 capital rules applicable to bank holding 

20 companies; 

21 ‘‘(B) with respect to a foreign-based finan22 cial company— 

23 ‘‘(i) the total risk-weighted assets of 

24 the United States operations of the finan25 cial company, as determined under the apVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00498 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
499 

•S 3217 AMDT 3739 

1 plicable risk-based capital rules, as ad2 justed to reflect exposures that are de3 ducted from regulatory capital; less 

4 ‘‘(ii) the total regulatory capital of the 

5 United States operations of the financial 

6 company, as determined under the applica7 ble risk-based capital rules; and 

8 ‘‘(C) with respect to an insurance company 

9 or other nonbank financial company supervised 

10 by the Board, such assets of the company as 

11 the Board shall specify by rule, in order to pro12 vide for consistent and equitable treatment of 

13 such companies. 

14 ‘‘(b) CONCENTRATION LIMIT.—Subject to the rec15 ommendations by the Council under subsection (e), a fi16 nancial company may not merge or consolidate with, ac17 quire all or substantially all of the assets of, or otherwise 

18 acquire control of, another company, if the total consoli19 dated liabilities of the acquiring financial company upon 

20 consummation of the transaction would exceed 10 percent 

21 of the aggregate consolidated liabilities of all financial 

22 companies at the end of the calendar year preceding the 

23 transaction. 

24 ‘‘(c) EXCEPTION TO CONCENTRATION LIMIT.—With 

25 the prior written consent of the Board, the concentration 


sroberts on DSKH9S0YB1PROD with BILLS
500 

•S 3217 AMDT 3739 

1 limit under subsection (b) shall not apply to an acquisi2 tion— 

3 ‘‘(1) of a bank in default or in danger of de4 fault; 

5 ‘‘(2) with respect to which assistance is pro6 vided by the Federal Deposit Insurance Corporation 

7 under section 13(c) of the Federal Deposit Insur8 ance Act (12 U.S.C. 1823(c)); or 

9 ‘‘(3) that would result only in a de minimis in10 crease in the liabilities of the financial company. 

11 ‘‘(d) RULEMAKING AND GUIDANCE.—The Board 

12 shall issue regulations implementing this section in accord13 ance with the recommendations of the Council under sub14 section (e), including the definition of terms, as necessary. 

15 The Board may issue interpretations or guidance regard16 ing the application of this section to an individual financial 

17 company or to financial companies in general. 

18 ‘‘(e) COUNCIL STUDY AND RULEMAKING.— 

19 ‘‘(1) STUDY AND RECOMMENDATIONS.—Not 

20 later than 6 months after the date of enactment of 

21 this section, the Council shall— 

22 ‘‘(A) complete a study of the extent to 

23 which the concentration limit under this section 

24 would affect financial stability, moral hazard in 

25 the financial system, the efficiency and competiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00500 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
501 

•S 3217 AMDT 3739 

1 tiveness of United States financial firms and fi2 nancial markets, and the cost and availability of 

3 credit and other financial services to households 

4 and businesses in the United States; and 

5 ‘‘(B) make recommendations regarding any 

6 modifications to the concentration limit that the 

7 Council determines would more effectively im8 plement this section. 

9 ‘‘(2) RULEMAKING.—Not later than 9 months 

10 after the date of completion of the study under para11 graph (1), and notwithstanding subsections (b) and 

12 (d), the Board shall issue final regulations imple13 menting this section, which shall reflect any rec14 ommendations by the Council under paragraph 

15 (1)(B).’’. 

16 TITLE VII—WALL STREET 

17 TRANSPARENCY AND AC18 COUNTABILITY 

19 SEC. 701. SHORT TITLE. 

20 This title may be cited as the ‘‘Wall Street Trans21 parency and Accountability Act of 2010’’. 


sroberts on DSKH9S0YB1PROD with BILLS
502 

•S 3217 AMDT 3739 

1 Subtitle A—Regulation of Over-the2 Counter Swaps Markets 

3 PART I—REGULATORY AUTHORITY 

4 SEC. 711. DEFINITIONS. 

5 In this subtitle, the terms ‘‘prudential regulator’’, 

6 ‘‘swap’’, ‘‘swap dealer’’, ‘‘major swap participant’’, ‘‘swap 

7 data repository’’, ‘‘associated person of a swap dealer or 

8 major swap participant’’, ‘‘eligible contract participant’’, 

9 ‘‘swap execution facility’’, ‘‘security-based swap’’, ‘‘secu10 rity-based swap dealer’’, ‘‘major security-based swap par11 ticipant’’, ‘‘swap data repository’’, and ‘‘associated person 

12 of a security-based swap dealer or major security-based 

13 swap participant’’ have the meanings given the terms in 

14 section 1a of the Commodity Exchange Act (7 U.S.C. 1a). 

15 SEC. 712. REVIEW OF REGULATORY AUTHORITY. 

16 (a) REGULATORY AUTHORITY.— 

17 (1) IN GENERAL.—Except as provided in para18 graphs (4) and (8), the Commodity Futures Trading 

19 Commission and the Securities and Exchange Com20 mission shall each prescribe such regulations as may 

21 be necessary to carry out the purposes of this title. 

22 (2) COORDINATION, CONSISTENCY, AND COM23 PARABILITY.—Both Commissions required under 

24 paragraph (1) to prescribe regulations shall consult 

25 and coordinate with each other for the purposes of 


sroberts on DSKH9S0YB1PROD with BILLS
503 

•S 3217 AMDT 3739 

1 assuring, to the extent possible, that the regulations 

2 prescribed by each such Commission are consistent 

3 and comparable with the regulations prescribed by 

4 the other. 

5 (3) PROCEDURES AND DEADLINE.—Such regu6 lations shall be prescribed in accordance with appli7 cable requirements of title 5, United States Code, 

8 and, shall be issued in final form not later than 180 

9 days after the date of enactment of this Act. 

10 (4) APPLICABILITY.—The requirements of 

11 paragraph (1) shall not apply to an order issued— 

12 (A) in connection with or arising from a 

13 violation or potential violation of any provision 

14 of the Commodity Exchange Act (7 U.S.C. 1 et 

15 seq.); 

16 (B) in connection with or arising from a 

17 violation or potential violation of any provision 

18 of the securities laws; or 

19 (C) in any proceeding that is conducted on 

20 the record in accordance with sections 556 and 

21 557 of title 5, United States Code. 

22 (5) EFFECT.—Nothing in this subsection au23 thorizes any consultation or procedure for consulta24 tion that is not consistent with the requirements of 

25 subchapter II of chapter 5, and chapter 7, of title 


sroberts on DSKH9S0YB1PROD with BILLS
504 

•S 3217 AMDT 3739 

1 5, United States Code (commonly known as the 

2 ‘‘Administrative Procedure Act’’). 

3 (6) RULES; ORDERS.—In developing and pro4 mulgating rules or orders pursuant to this sub5 section, each Commission shall consider the views of 

6 the prudential regulators. 

7 (7) TREATMENT OF SIMILAR PRODUCTS AND

8 ENTITIES.— 

9 (A) IN GENERAL.—In adopting rules and 

10 orders under this subsection, the Commodity 

11 Futures Trading Commission and the Securities 

12 and Exchange Commission shall treat function13 ally or economically similar products or entities 

14 described in paragraphs (1) and (2) in a similar 

15 manner. 

16 (B) EFFECT.—Nothing in this subtitle re17 quires the Commodity Futures Trading Com18 mission or the Securities and Exchange Com19 mission to adopt joint rules or orders that treat 

20 functionally or economically similar products or 

21 entities described in paragraphs (1) and (2) in 

22 an identical manner. 

23 (8) MIXED SWAPS.—The Commodity Futures 

24 Trading Commission and the Securities and Ex25 change Commission shall jointly prescribe such reguVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00504 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
505 

•S 3217 AMDT 3739 

1 lations regarding mixed swaps, as described in sec2 tion 1a(47)(D) of the Commodity Exchange Act (7 

3 U.S.C. 1a(47)(D)) and in section (68)(D) of the Se4 curities Exchange Act of 1934 (15 U.S.C. (68)(D)), 

5 as may be necessary to carry out the purposes of 

6 this title. 

7 (b) LIMITATION.— 

8 (1) COMMODITY FUTURES TRADING COMMIS9 SION.—Nothing in this title, unless specifically pro10 vided, confers jurisdiction on the Commodity Fu11 tures Trading Commission to issue a rule, regula12 tion, or order providing for oversight or regulation 

13 of— 

14 (A) security-based swaps; or 

15 (B) with regard to its activities or func16 tions concerning security-based swaps— 

17 (i) security-based swap dealers; 

18 (ii) major security-based swap partici19 pants; 

20 (iii) security-based swap data reposi21 tories; 

22 (iv) persons associated with a secu23 rity-based swap dealer or major security24 based swap participant; 


sroberts on DSKH9S0YB1PROD with BILLS
506 

•S 3217 AMDT 3739 

1 (v) eligible contract participants with 

2 respect to security-based swaps; or 

3 (vi) swap execution facilities with re4 spect to security-based swaps. 

5 (2) SECURITIES AND EXCHANGE COMMIS6 SION.—Nothing in this title, unless specifically pro7 vided, confers jurisdiction on the Securities and Ex8 change Commission or State securities regulators to 

9 issue a rule, regulation, or order providing for over10 sight or regulation of— 

11 (A) swaps; or 

12 (B) with regard to its activities or func13 tions concerning swaps— 

14 (i) swap dealers; 

15 (ii) major swap participants; 

16 (iii) swap data repositories; 

17 (iv) persons associated with a swap 

18 dealer or major swap participant; 

19 (v) eligible contract participants with 

20 respect to swaps; or 

21 (vi) swap execution facilities with re22 spect to swaps. 

23 (3) PROHIBITION ON CERTAIN FUTURES ASSO24 CIATIONS AND NATIONAL SECURITIES ASSOCIA25 TIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
507 

•S 3217 AMDT 3739 

1 (A) FUTURES ASSOCIATIONS.—Notwith2 standing any other provision of law (including 

3 regulations), unless otherwise authorized by this 

4 title, no futures association registered under 

5 section 17 of the Commodity Exchange Act (7 

6 U.S.C. 21) may issue a rule, regulation, or 

7 order for the oversight or regulation of, or oth8 erwise assert jurisdiction over, for any purpose, 

9 any security-based swap, except that this shall 

10 not limit the authority of a national futures as11 sociation to examine for compliance with and 

12 enforce its rules on advertising and capital ade13 quacy. 

14 (B) NATIONAL SECURITIES ASSOCIA15 TIONS.—Notwithstanding any other provision of 

16 law (including regulations), unless otherwise au17 thorized by this title, no national securities as18 sociation registered under section 15A of the 

19 Securities Exchange Act of 1934 (15 U.S.C. 

20 78o–3) may issue a rule, regulation, or order 

21 for the oversight or regulation of, or otherwise 

22 assert jurisdiction over, for any purpose, any 

23 swap, except that this shall not limit the au24 thority of a national securities association to exVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00507 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
508 

•S 3217 AMDT 3739 

1 amine for compliance with and enforce its rules 

2 on advertising and capital adequacy. 

3 (c) OBJECTION TO COMMISSION REGULATION.— 

4 (1) FILING OF PETITION FOR REVIEW.— 

5 (A) IN GENERAL.—If either Commission 

6 referred to in this section determines that a 

7 final rule, regulation, or order of the other 

8 Commission conflicts with subsection (a)(4) or 

9 (b), then the complaining Commission may ob10 tain review of the final rule, regulation, or order 

11 in the United States Court of Appeals for the 

12 District of Columbia Circuit by filing in the 

13 court, not later than 60 days after the date of 

14 publication of the final rule, regulation, or 

15 order, a written petition requesting that the 

16 rule, regulation, or order be set aside. 

17 (B) EXPEDITED PROCEEDING.—A pro18 ceeding described in subparagraph (A) shall be 

19 expedited by the United States Court of Ap20 peals for the District of Columbia Circuit. 

21 (2) TRANSMITTAL OF PETITION AND

22 RECORD.— 

23 (A) IN GENERAL.—A copy of a petition de24 scribed in paragraph (1) shall be transmitted 

25 not later than 1 business day after the date of 


sroberts on DSKH9S0YB1PROD with BILLS
509 

•S 3217 AMDT 3739 

1 filing by the complaining Commission to the 

2 Secretary of the responding Commission. 

3 (B) DUTY OF RESPONDING COMMISSION.— 

4 On receipt of the copy of a petition described 

5 in paragraph (1), the responding Commission 

6 shall file with the United States Court of Ap7 peals for the District of Columbia Circuit— 

8 (i) a copy of the rule, regulation, or 

9 order under review (including any docu10 ments referred to therein); and 

11 (ii) any other materials prescribed by 

12 the United States Court of Appeals for the 

13 District of Columbia Circuit. 

14 (3) STANDARD OF REVIEW.—The United States 

15 Court of Appeals for the District of Columbia Cir16 cuit shall— 

17 (A) give deference to the views of neither 

18 Commission; and 

19 (B) determine to affirm or set aside a rule, 

20 regulation, or order of the responding Commis21 sion under this subsection, based on the deter22 mination of the court as to whether the rule, 

23 regulation, or order is in conflict with sub24 section (a)(4) or (b), as applicable. 


sroberts on DSKH9S0YB1PROD with BILLS
510 

•S 3217 AMDT 3739 

1 (4) JUDICIAL STAY.—The filing of a petition by 

2 the complaining Commission pursuant to paragraph 

3 (1) shall operate as a stay of the rule, regulation, or 

4 order until the date on which the determination of 

5 the United States Court of Appeals for the District 

6 of Columbia Circuit is final (including any appeal of 

7 the determination). 

8 (d) ADOPTION OF RULES ON UNCLEARED SWAPS.— 

9 Notwithstanding subsections (b) and (c), the Commodity 

10 Futures Trading Commission and the Securities and Ex11 change Commission shall, after consulting with each other 

12 Commission, adopt rules— 

13 (1) to require the maintenance of records of all 

14 activities relating to transactions in swaps and secu15 rity-based swaps under the respective jurisdictions of 

16 the Commodity Futures Trading Commission and 

17 the Securities and Exchange Commission that are 

18 uncleared; 

19 (2) to make available, consistent with section 8 

20 of the Commodity Exchange Act (7 U.S.C. 12), to 

21 the Securities and Exchange Commission informa22 tion relating to swaps transactions that are 

23 uncleared; and 

24 (3) to make available to the Commodity Fu25 tures Trading Commission information relating to 


sroberts on DSKH9S0YB1PROD with BILLS
511 

•S 3217 AMDT 3739 

1 security-based swaps transactions that are 

2 uncleared. 

3 (e) DEFINITIONS.—Notwithstanding subsections (b) 

4 and (c), the Commodity Futures Trading Commission and 

5 the Securities and Exchange Commission shall jointly 

6 adopt rules to define the term ‘‘security-based swap agree7 ment’’ in section 1a(47)(A)(v) of the Commodity Ex8 change Act (7 U.S.C. 1a(47)(A)(v)) and in section 

9 3(a)(78) of the Securities Exchange Act of 1934 (15 

10 U.S.C. 78c(a)(78)). 

11 (f) GLOBAL RULEMAKING TIMEFRAME.—Unless oth12 erwise provided in a particular provision of this title, or 

13 an amendment made by this title, the Commodity Futures 

14 Trading Commission or the Securities and Exchange Com15 mission, or both, shall individually, and not jointly, pro16 mulgate rules and regulations required of each Commis17 sion under this title or an amendment made by this title 

18 not later than 180 days after the date of enactment of 

19 this Act. 

20 (g) EXPEDITED RULEMAKING PROCESS.—The Com21 modity Futures Trading Commission or the Securities and 

22 Exchange Commission, or both, may use emergency and 

23 expedited procedures (including any administrative or 

24 other procedure as appropriate) to carry out this title and 


sroberts on DSKH9S0YB1PROD with BILLS
512 

•S 3217 AMDT 3739 

1 the amendments made by this title if, in either of the Com2 missions’ discretion, it considers it necessary to do so. 

3 SEC. 713. RECOMMENDATIONS FOR CHANGES TO PORT4 FOLIO MARGINING LAWS. 

5 Not later than 180 days after the date of enactment 

6 of this Act, the Securities and Exchange Commission, the 

7 Commodity Futures Trading Commission, and the pru8 dential regulators shall submit to the appropriate commit9 tees of Congress recommendations for legislative changes 

10 to the Federal laws to facilitate the portfolio margining 

11 of securities and commodity futures and options, com12 modity options, swaps, and other financial instrument po13 sitions. 

14 SEC. 714. ABUSIVE SWAPS. 

15 The Commodity Futures Trading Commission or the 

16 Securities and Exchange Commission, or both, individually 

17 may, by rule or order— 

18 (1) collect information as may be necessary con19 cerning the markets for any types of— 

20 (A) swap (as defined in section 1a of the 

21 Commodity Exchange Act (7 U.S.C. 1a)); or 

22 (B) security-based swap (as defined in sec23 tion 1a of the Commodity Exchange Act (7 

24 U.S.C. 1a)); and 


sroberts on DSKH9S0YB1PROD with BILLS
513 

•S 3217 AMDT 3739 

1 (2) issue a report with respect to any types of 

2 swaps or security-based swaps that the Commodity 

3 Futures Trading Commission or the Securities and 

4 Exchange Commission determines to be detrimental 

5 to— 

6 (A) the stability of a financial market; or 

7 (B) participants in a financial market. 

8 SEC. 715. AUTHORITY TO PROHIBIT PARTICIPATION IN 

9 SWAP ACTIVITIES. 

10 Except as provided in section 4 of the Commodity Ex11 change Act (7 U.S.C. 6) (as amended by section 738), if 

12 the Commodity Futures Trading Commission or the Secu13 rities and Exchange Commission determines that the regu14 lation of swaps or security-based swaps markets in a for15 eign country undermines the stability of the United States 

16 financial system, either Commission, in consultation with 

17 the Secretary of the Treasury, may prohibit an entity 

18 domiciled in the foreign country from participating in the 

19 United States in any swap or security-based swap activi20 ties. 

21 SEC. 716. PROHIBITION AGAINST FEDERAL GOVERNMENT 

22 BAILOUTS OF SWAPS ENTITIES. 

23 (a) PROHIBITION ON FEDERAL ASSISTANCE.—Not24 withstanding any other provision of law (including regula25 tions), no Federal assistance may be provided to any 


sroberts on DSKH9S0YB1PROD with BILLS
514 

•S 3217 AMDT 3739 

1 swaps entity with respect to any swap, security-based 

2 swap, or other activity of the swaps entity. 

3 (b) DEFINITIONS.—In this section: 

4 (1) FEDERAL ASSISTANCE.—The term ‘‘Federal 

5 assistance’’ means the use of any funds, including 

6 advances from any Federal Reserve credit facility, 

7 discount window, or pursuant to the third undesig8 nated paragraph of section 13 of the Federal Re9 serve Act (12 U.S.C. 343) (relating to emergency 

10 lending authority), Federal Deposit Insurance Cor11 poration insurance, or guarantees for the purpose 

12 of— 

13 (A) making any loan to, or purchasing any 

14 stock, equity interest, or debt obligation of, any 

15 swaps entity; 

16 (B) purchasing the assets of any swaps en17 tity; 

18 (C) guaranteeing any loan or debt issuance 

19 of any swaps entity; or 

20 (D) entering into any assistance arrange21 ment (including tax breaks), loss sharing, or 

22 profit sharing with any swaps entity. 

23 (2) SWAPS ENTITY.—The term ‘‘swaps entity’’ 

24 means any swap dealer, security-based swap dealer, 

25 major swap participant, major security-based swap 


sroberts on DSKH9S0YB1PROD with BILLS
515 

•S 3217 AMDT 3739 

1 participant, swap execution facility, designated con2 tract market, national securities exchange, central 

3 counterparty, clearing house, clearing agency, or de4 rivatives clearing organization that is registered 

5 under— 

6 (A) the Commodity Exchange Act (7 

7 U.S.C. 1 et seq.); 

8 (B) the Securities Exchange Act of 1934 

9 (15 U.S.C. 78a et seq.); or 

10 (C) any other Federal or State law (includ11 ing regulations). 

12 SEC. 717. NEW PRODUCT APPROVAL – CFTC-SEC PROCESS. 

13 (a) AMENDMENTS TO THE COMMODITY EXCHANGE

14 ACT.—Section 2(a)(1)(C) of the Commodity Exchange 

15 Act (7 U.S.C. 2(a)(1)(C)) is amended— 

16 (1) in clause (i) by striking ‘‘This’’ and insert17 ing ‘‘(I) Except as provided in subclause (II), this’’; 

18 and 

19 (2) by adding at the end of clause (i) the fol20 lowing: 

21 ‘‘(II) This Act shall apply to and 

22 the Commission shall have jurisdiction 

23 with respect to accounts, agreements, 

24 and transactions involving, and may 

25 permit the listing for trading pursuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00515 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
516 

•S 3217 AMDT 3739 

1 ant to section 5c(c) of, a put, call, or 

2 other option on 1 or more securities 

3 (as defined in section 2(a)(1) of the 

4 Securities Act of 1933 or section 

5 3(a)(10) of the Securities Exchange 

6 Act of 1934 on the date of enactment 

7 of the Futures Trading Act of 1982), 

8 including any group or index of such 

9 securities, or any interest therein or 

10 based on the value thereof, that is ex11 empted by the Securities and Ex12 change Commission pursuant to sec13 tion 36(a)(1) of the Securities Ex14 change Act of 1934 with the condition 

15 that the Commission exercise concur16 rent jurisdiction over such put, call, or 

17 other option; provided, however, that 

18 nothing in this paragraph shall be 

19 construed to affect the jurisdiction 

20 and authority of the Securities and 

21 Exchange Commission over such put, 

22 call, or other option.’’. 

23 (b) AMENDMENT TO THE SECURITIES EXCHANGE

24 ACT OF 1934.—The Securities Exchange Act of 1934 is 


sroberts on DSKH9S0YB1PROD with BILLS
517 

•S 3217 AMDT 3739 

1 amended by adding the following section after section 3A 

2 (15 U.S.C. 78c–1): 

3 ‘‘SEC. 3B. SECURITIES-RELATED DERIVATIVES. 

4 ‘‘(a) Any agreement, contract, or transaction (or 

5 class thereof) that is exempted by the Commodity Futures 

6 Trading Commission pursuant to section 4(c)(1) of the 

7 Commodity Exchange Act (7 U.S.C. 6(c)(1)) with the con8 dition that the Commission exercise concurrent jurisdic9 tion over such agreement, contract, or transaction (or 

10 class thereof) shall be deemed a security for purposes of 

11 the securities laws. 

12 ‘‘(b) With respect to any agreement, contract, or 

13 transaction (or class thereof) that is exempted by the 

14 Commodity Futures Trading Commission pursuant to sec15 tion 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 

16 6(c)(1)) with the condition that the Commission exercise 

17 concurrent jurisdiction over such agreement, contract, or 

18 transaction (or class thereof), references in the securities 

19 laws to the ‘purchase’ or ‘sale’ of a security shall be 

20 deemed to include the execution, termination (prior to its 

21 scheduled maturity date), assignment, exchange, or simi22 lar transfer or conveyance of, or extinguishing of rights 

23 or obligations under such agreement, contract, or trans24 action, as the context may require.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
518 

•S 3217 AMDT 3739 

1 (c) AMENDMENT TO SECURITIES EXCHANGE ACT OF

2 1934.—Section 19(b) of the Securities Exchange Act of 

3 1934 (15 U.S.C. 78s(b)) is amended by adding at the end 

4 the following: 

5 ‘‘(10) Notwithstanding the provisions of para6 graph (2), the time period within which the Commis7 sion is required by order to approve a proposed rule 

8 change or institute proceedings to determine whether 

9 the proposed rule change should be disapproved is 

10 stayed pending a determination by the Commission 

11 upon the request of the Commodity Futures Trading 

12 Commission or its Chairman that the Commission 

13 issue a determination as to whether a product that 

14 is the subject of such proposed rule change is a se15 curity pursuant to section 718 of the Wall Street 

16 Transparency and Accountability Act of 2010.’’. 

17 (d) AMENDMENT TO COMMODITY EXCHANGE ACT.— 

18 Section 5c(c)(1) of the Commodity Exchange Act (7 

19 U.S.C. 7a–2(c)(1)) is amended— 

20 (1) by striking ‘‘Subject to paragraph (2)’’ and 

21 inserting the following: 

22 ‘‘(A) ELECTION.—Subject to paragraph 

23 (2)’’; and 

24 (2) by adding at the end the following: 


sroberts on DSKH9S0YB1PROD with BILLS
519 

•S 3217 AMDT 3739 

1 ‘‘(B) CERTIFICATION.—The certification of 

2 a product pursuant to this paragraph shall be 

3 stayed pending a determination by the Commis4 sion upon the request of the Securities and Ex5 change Commission or its Chairman that the 

6 Commission issue a determination as to wheth7 er the product that is the subject of such cer8 tification is a contract of sale of a commodity 

9 for future delivery, an option on such a con10 tract, or an option on a commodity pursuant to 

11 section 718 of the Wall Street Transparency 

12 and Accountability Act of 2010.’’. 

13 SEC. 718. DETERMINING STATUS OF NOVEL DERIVATIVE 

14 PRODUCTS. 

15 (a) PROCESS FOR DETERMINING THE STATUS OF A

16 NOVEL DERIVATIVE PRODUCT.— 

17 (1) NOTICE.— 

18 (A) IN GENERAL.—Any person filing a 

19 proposal to list or trade a novel derivative prod20 uct that may have elements of both securities 

21 and contracts of sale of a commodity for future 

22 delivery (or options on such contracts or options 

23 on commodities) may concurrently provide no24 tice and furnish a copy of such filing with both 

25 the Securities and Exchange Commission and 


sroberts on DSKH9S0YB1PROD with BILLS
520 

•S 3217 AMDT 3739 

1 the Commodity Futures Trading Commission. 

2 Any such notice shall state that notice has been 

3 made with both Commissions. 

4 (B) NOTIFICATION.—If no concurrent no5 tice is made pursuant to subparagraph (A), 

6 within 5 business days after determining that a 

7 proposal that seeks to list or trade a novel de8 rivative product may have elements of both se9 curities and contracts of sale of a commodity 

10 for future delivery (or options on such contracts 

11 or options on commodities), the Securities and 

12 Exchange Commission or the Commodity Fu13 tures Trading Commission, as applicable, shall 

14 notify the other Commission and provide a copy 

15 of such filing to the other Commission. 

16 (2) REQUEST FOR DETERMINATION.— 

17 (A) IN GENERAL.—No later than 21 days 

18 after receipt of a notice under paragraph (1), or 

19 upon its own initiative if no such notice is re20 ceived, the Commodity Futures Trading Com21 mission may request that the Securities and 

22 Exchange Commission issue a determination as 

23 to whether a product is a security, as defined 

24 in section 3(a)(10) of the Securities Exchange 

25 Act of 1934 (15 U.S.C. 78c(a)(10)). 


sroberts on DSKH9S0YB1PROD with BILLS
521 

•S 3217 AMDT 3739 

1 (B) REQUEST.—No later than 21 days 

2 after receipt of a notice under paragraph (1), or 

3 upon its own initiative if no such notice is re4 ceived, the Securities and Exchange Commis5 sion may request that the Commodity Futures 

6 Trading Commission issue a determination as 

7 to whether a product is a contract of sale of a 

8 commodity for future delivery, an option on 

9 such a contract, or an option on a commodity 

10 subject to the Commodity Futures Trading 

11 Commission’s exclusive jurisdiction under sec12 tion 2(a)(1)(A) of the Commodity Exchange 

13 Act (7 U.S.C. 2(a)(1)(A)). 

14 (C) REQUIREMENT RELATING TO RE15 QUEST.—A request under subparagraph (A) or 

16 (B) shall be made by submitting such request, 

17 in writing, to the Securities and Exchange 

18 Commission or the Commodity Futures Trading 

19 Commission, as applicable. 

20 (D) EFFECT.—Nothing in this paragraph 

21 shall be construed to prevent— 

22 (i) the Commodity Futures Trading 

23 Commission from requesting that the Se24 curities and Exchange Commission grant 

25 an exemption pursuant to section 36(a)(1) 


sroberts on DSKH9S0YB1PROD with BILLS
522 

•S 3217 AMDT 3739 

1 of the Securities Exchange Act of 1934 

2 (15 U.S.C. 78mm(a)(1)) with respect to a 

3 product that is the subject of a filing 

4 under paragraph (1); or 

5 (ii) the Securities and Exchange Com6 mission from requesting that the Com7 modity Futures Trading Commission grant 

8 an exemption pursuant to section 4(c)(1) 

9 of the Commodity Exchange Act (7 U.S.C. 

10 6(c)(1)) with respect to a product that is 

11 the subject of a filing under paragraph (1). 

12 Provided, however, that nothing in this sub13 paragraph shall be construed to require the 

14 Commodity Futures Trading Commission or the 

15 Securities and Exchange Commission to issue 

16 an exemption requested pursuant to this sub17 paragraph; provided further, That an order 

18 granting or denying an exemption described in 

19 this subparagraph and issued under paragraph 

20 (3)(B) shall not be subject to judicial review 

21 pursuant to subsection (b). 

22 (E) WITHDRAWAL OF REQUEST.—A re23 quest under subparagraph (A) or (B) may be 

24 withdrawn by the Commission making the re25 quest at any time prior to a determination 


sroberts on DSKH9S0YB1PROD with BILLS
523 

•S 3217 AMDT 3739 

1 being made pursuant to paragraph (3) for any 

2 reason by providing written notice to the head 

3 of the other Commission. 

4 (3) DETERMINATION.—Notwithstanding any 

5 other provision of law, no later than 120 days after 

6 the date of receipt of a request— 

7 (A) under subparagraph (A) or (B) of 

8 paragraph (2), unless such request has been 

9 withdrawn pursuant to paragraph (2)(E), the 

10 Securities and Exchange Commission or the 

11 Commodity Futures Trading Commission, as 

12 applicable, shall, by order, issue the determina13 tion requested in subparagraph (A) or (B) of 

14 paragraph (2), as applicable, and the reasons 

15 therefore; or 

16 (B) under paragraph (2)(D), unless such 

17 request has been withdrawn, the Securities and 

18 Exchange Commission or the Commodity Fu19 tures Trading Commission, as applicable, shall 

20 grant an exemption or provide reasons for not 

21 granting such exemption, provided that any de22 cision by the Securities and Exchange Commis23 sion not to grant such exemption shall not be 

24 reviewable under section 25 of the Securities 

25 Exchange Act of 1934 (15 U.S.C. 78y). 


sroberts on DSKH9S0YB1PROD with BILLS
524 

•S 3217 AMDT 3739 

1 (b) JUDICIAL RESOLUTION.— 

2 (1) IN GENERAL.—The Commodity Futures 

3 Trading Commission or the Securities and Exchange 

4 Commission may petition the United States Court of 

5 Appeals for the District of Columbia Circuit for re6 view of a final order of the other Commission, with 

7 respect to a novel derivative product that may have 

8 elements of both securities and contracts of sale of 

9 a commodity for future delivery (or options on such 

10 contracts or options on commodities) that it believes 

11 affects its statutory jurisdiction, including an order 

12 or orders issued under subsection (a)(3)(A), by filing 

13 in such court, within 60 days after the date of entry 

14 of such order, a written petition requesting a review 

15 of the order. Any such proceeding shall be expedited 

16 by the Court of Appeals. 

17 (2) TRANSMITTAL OF PETITION AND

18 RECORD.—A copy of a petition described in para19 graph (1) shall be transmitted not later than 1 busi20 ness day after filing by the complaining Commission 

21 to the responding Commission. On receipt of the pe22 tition, the responding Commission shall file with the 

23 court a copy of the order under review and any doc24 uments referred to therein, and any other materials 

25 prescribed by the court. 


sroberts on DSKH9S0YB1PROD with BILLS
525 

•S 3217 AMDT 3739 

1 (3) STANDARD OF REVIEW.—The court, in con2 sidering a petition filed pursuant to paragraph (1), 

3 shall give no deference to, or presumption in favor 

4 of, the views of either Commission. 

5 (4) JUDICIAL STAY.—The filing of a petition by 

6 the complaining Commission pursuant to paragraph 

7 (1) shall operate as a stay of the order, until the 

8 date on which the determination of the court is final 

9 (including any appeal of the determination). 

10 PART II—REGULATION OF SWAP MARKETS 

11 SEC. 721. DEFINITIONS. 

12 (a) IN GENERAL.—Section 1a of the Commodity Ex13 change Act (7 U.S.C. 1a) is amended— 

14 (1) by redesignating paragraphs (2), (3) and 

15 (4), (5) through (17), (18) through (23), (24) 

16 through (28), (29), (30), (31) through (33), and 

17 (34) as paragraphs (6), (8) and (9), (11) through 

18 (23), (26) through (31), (34) through (38), (40), 

19 (41), (44) through (46), and (51), respectively; 

20 (2) by inserting after paragraph (1) the fol21 lowing: 

22 ‘‘(2) APPROPRIATE FEDERAL BANKING AGEN23 CY.—The term ‘appropriate Federal banking agency’ 

24 has the meaning given the term in section 3 of the 

25 Federal Deposit Insurance Act (12 U.S.C. 1813). 


sroberts on DSKH9S0YB1PROD with BILLS
526 

•S 3217 AMDT 3739 

1 ‘‘(3) ASSOCIATED PERSON OF A SECURITY2 BASED SWAP DEALER OR MAJOR SECURITY-BASED

3 SWAP PARTICIPANT.—The term ‘associated person of 

4 a security-based swap dealer or major security-based 

5 swap participant’ has the meaning given the term in 

6 section 3(a) of the Securities Exchange Act of 1934 

7 (15 U.S.C. 78c(a)). 

8 ‘‘(4) ASSOCIATED PERSON OF A SWAP DEALER

9 OR MAJOR SWAP PARTICIPANT.— 

10 ‘‘(A) IN GENERAL.—The term ‘associated 

11 person of a swap dealer or major swap partici12 pant’ means— 

13 ‘‘(i) any partner, officer, director, or 

14 branch manager of a swap dealer or major 

15 swap participant (including any individual 

16 who holds a similar status or performs a 

17 similar function with respect to any part18 ner, officer, director, or branch manager of 

19 a swap dealer or major swap participant); 

20 ‘‘(ii) any person that directly or indi21 rectly controls, is controlled by, or is under 

22 common control with, a swap dealer or 

23 major swap participant; and 

24 ‘‘(iii) any employee of a swap dealer 

25 or major swap participant. 


sroberts on DSKH9S0YB1PROD with BILLS
527 

•S 3217 AMDT 3739 

1 ‘‘(B) EXCLUSION.—Other than for pur2 poses of section 4s(b)(6), the term ‘associated 

3 person of a swap dealer or major swap partici4 pant’ does not include any person associated 

5 with a swap dealer or major swap participant 

6 the functions of which are solely clerical or min7 isterial. 

8 ‘‘(5) BOARD.—The term ‘Board’ means the 

9 Board of Governors of the Federal Reserve Sys10 tem.’’; 

11 (3) by inserting after paragraph (6) (as redesig12 nated by paragraph (1)) the following: 

13 ‘‘(7) CLEARED SWAP.—The term ‘cleared swap’ 

14 means any swap that is, directly or indirectly, sub15 mitted to and cleared by a derivatives clearing orga16 nization registered with the Commission.’’; 

17 (4) in paragraph (9) (as redesignated by para18 graph (1)), by striking ‘‘except onions’’ and all that 

19 follows through the period at the end and inserting 

20 the following: ‘‘except onions (as provided in section 

21 13-1) and motion picture box office receipts (or any 

22 index, measure, value, or data related to such re23 ceipts), and all services, rights, and interests (except 

24 motion picture box office receipts, or any index, 

25 measure, value or data related to such receipts) in 


sroberts on DSKH9S0YB1PROD with BILLS
528 

•S 3217 AMDT 3739 

1 which contracts for future delivery are presently or 

2 in the future dealt in.’’; 

3 (5) by inserting after paragraph (9) (as redesig4 nated by paragraph (1)) the following: 

5 ‘‘(10) COMMODITY POOL.— 

6 ‘‘(A) IN GENERAL.—The term ‘commodity 

7 pool’ means any investment trust, syndicate, or 

8 similar form of enterprise operated for the pur9 pose of trading in commodity interests, includ10 ing any— 

11 ‘‘(i) commodity for future delivery, se12 curity futures product, or swap; 

13 ‘‘(ii) agreement, contract, or trans14 action described in section 2(c)(2)(C)(i) or 

15 section 2(c)(2)(D)(i); 

16 ‘‘(iii) commodity option authorized 

17 under section 4c; or 

18 ‘‘(iv) leverage transaction authorized 

19 under section 19. 

20 ‘‘(B) FURTHER DEFINITION.—The Com21 mission, by rule or regulation, may include 

22 within, or exclude from, the term ‘commodity 

23 pool’ any investment trust, syndicate, or similar 

24 form of enterprise if the Commission deterVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00528 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
529 

•S 3217 AMDT 3739 

1 mines that the rule or regulation will effectuate 

2 the purposes of this Act.’’; 

3 (6) by striking paragraph (11) (as redesignated 

4 by paragraph (1)) and inserting the following: 

5 ‘‘(11) COMMODITY POOL OPERATOR.— 

6 ‘‘(A) IN GENERAL.—The term ‘commodity 

7 pool operator’ means any person— 

8 ‘‘(i) engaged in a business that is of 

9 the nature of a commodity pool, invest10 ment trust, syndicate, or similar form of 

11 enterprise, and who, in connection there12 with, solicits, accepts, or receives from oth13 ers, funds, securities, or property, either 

14 directly or through capital contributions, 

15 the sale of stock or other forms of securi16 ties, or otherwise, for the purpose of trad17 ing in commodity interest, including any— 

18 ‘‘(I) commodity for future deliv19 ery, security futures product, or swap; 

20 ‘‘(II) agreement, contract, or 

21 transaction described in section 

22 2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 

23 ‘‘(III) commodity option author24 ized under section 4c; or 


sroberts on DSKH9S0YB1PROD with BILLS
530 

•S 3217 AMDT 3739 

1 ‘‘(IV) leverage transaction au2 thorized under section 19; or 

3 ‘‘(ii) who is registered with the Com4 mission as a commodity pool operator. 

5 ‘‘(B) FURTHER DEFINITION.—The Com6 mission, by rule or regulation, may include 

7 within, or exclude from, the term ‘commodity 

8 pool operator’ any person engaged in a business 

9 that is of the nature of a commodity pool, in10 vestment trust, syndicate, or similar form of en11 terprise if the Commission determines that the 

12 rule or regulation will effectuate the purposes of 

13 this Act.’’; 

14 (7) in paragraph (12) (as redesignated by para15 graph (1)), in subparagraph (A)— 

16 (A) in clause (i)— 

17 (i) in subclause (I), by striking ‘‘made 

18 or to be made on or subject to the rules of 

19 a contract market or derivatives trans20 action execution facility’’ and inserting ‘‘, 

21 security futures product, or swap’’; 

22 (ii) by redesignating subclauses (II) 

23 and (III) as subclauses (III) and (IV); 

24 (iii) by inserting after subclause (I) 

25 the following: 


sroberts on DSKH9S0YB1PROD with BILLS
531 

•S 3217 AMDT 3739 

1 ‘‘(II) any agreement, contract, or 

2 transaction described in section 

3 2(c)(2)(C)(i) or section 2(c)(2)(D)(i)’’; 

4 and 

5 (iv) in subclause (IV) (as so redesig6 nated), by striking ‘‘or’’ ; 

7 (B) in clause (ii), by striking the period at 

8 the end and inserting a semicolon; and 

9 (C) by adding at the end the following: 

10 ‘‘(iii) is registered with the Commis11 sion as a commodity trading advisor; or 

12 ‘‘(iv) the Commission, by rule or regu13 lation, may include if the Commission de14 termines that the rule or regulation will ef15 fectuate the purposes of this Act.’’; 

16 (8) in paragraph (17) (as redesignated by para17 graph (1)), in subparagraph (A), in the matter pre18 ceding clause (i), by striking ‘‘paragraph (12)(A)’’ 

19 and inserting ‘‘paragraph (18)(A)’’; 

20 (9) in paragraph (18) (as redesignated by para21 graph (1))— 

22 (A) in subparagraph (A)— 

23 (i) in the matter following clause 

24 (vii)(III)— 


sroberts on DSKH9S0YB1PROD with BILLS
532 

•S 3217 AMDT 3739 

1 (I) by striking ‘‘section 1a 

2 (11)(A)’’ and inserting ‘‘paragraph 

3 (17)(A)’’; and 

4 (II) by striking ‘‘$25,000,000’’ 

5 and inserting ‘‘$50,000,000’’; and 

6 (ii) in clause (xi), in the matter pre7 ceding subclause (I), by striking ‘‘total as8 sets in an amount’’ and inserting 

9 ‘‘amounts invested on a discretionary 

10 basis, the aggregate of which is’’; 

11 (10) by striking paragraph (22) (as redesig12 nated by paragraph (1)) and inserting the following: 

13 ‘‘(22) FLOOR BROKER.— 

14 ‘‘(A) IN GENERAL.—The term ‘floor 

15 broker’ means any person— 

16 ‘‘(i) who, in or surrounding any pit, 

17 ring, post, or other place provided by a 

18 contract market for the meeting of persons 

19 similarly engaged, shall purchase or sell for 

20 any other person— 

21 ‘‘(I) any commodity for future 

22 delivery, security futures product, or 

23 swap; or 

24 ‘‘(II) any commodity option au25 thorized under section 4c; or 


sroberts on DSKH9S0YB1PROD with BILLS
533 

•S 3217 AMDT 3739 

1 ‘‘(ii) who is registered with the Com2 mission as a floor broker. 

3 ‘‘(B) FURTHER DEFINITION.—The Com4 mission, by rule or regulation, may include 

5 within, or exclude from, the term ‘floor broker’ 

6 any person in or surrounding any pit, ring, 

7 post, or other place provided by a contract mar8 ket for the meeting of persons similarly engaged 

9 who trades for any other person if the Commis10 sion determines that the rule or regulation will 

11 effectuate the purposes of this Act.’’; 

12 (11) by striking paragraph (23) (as redesig13 nated by paragraph (1)) and inserting the following: 

14 ‘‘(23) FLOOR TRADER.— 

15 ‘‘(A) IN GENERAL.—The term ‘floor trad16 er’ means any person— 

17 ‘‘(i) who, in or surrounding any pit, 

18 ring, post, or other place provided by a 

19 contract market for the meeting of persons 

20 similarly engaged, purchases, or sells solely 

21 for such person’s own account— 

22 ‘‘(I) any commodity for future 

23 delivery, security futures product, or 

24 swap; or 


sroberts on DSKH9S0YB1PROD with BILLS
534 

•S 3217 AMDT 3739 

1 ‘‘(II) any commodity option au2 thorized under section 4c; or 

3 ‘‘(ii) who is registered with the Com4 mission as a floor trader. 

5 ‘‘(B) FURTHER DEFINITION.—The Com6 mission, by rule or regulation, may include 

7 within, or exclude from, the term ‘floor trader’ 

8 any person in or surrounding any pit, ring, 

9 post, or other place provided by a contract mar10 ket for the meeting of persons similarly engaged 

11 who trades solely for such person’s own account 

12 if the Commission determines that the rule or 

13 regulation will effectuate the purposes of this 

14 Act.’’; 

15 (12) by inserting after paragraph (23) (as re16 designated by paragraph (1)) the following: 

17 ‘‘(24) FOREIGN EXCHANGE FORWARD.—The 

18 term ‘foreign exchange forward’ means a transaction 

19 that solely involves the exchange of 2 different cur20 rencies on a specific future date at a fixed rate 

21 agreed upon on the inception of the contract cov22 ering the exchange. 

23 ‘‘(25) FOREIGN EXCHANGE SWAP.—The term 

24 ‘foreign exchange swap’ means a transaction that 

25 solely involves— 


sroberts on DSKH9S0YB1PROD with BILLS
535 

•S 3217 AMDT 3739 

1 ‘‘(A) an exchange of 2 different currencies 

2 on a specific date at a fixed rate that is agreed 

3 upon on the inception of the contract covering 

4 the exchange; and 

5 ‘‘(B) a reverse exchange of the 2 cur6 rencies described in subparagraph (A) at a later 

7 date and at a fixed rate that is agreed upon on 

8 the inception of the contract covering the ex9 change.’’; 

10 (13) by striking paragraph (28) (as redesig11 nated by paragraph (1)) and inserting the following: 

12 ‘‘(28) FUTURES COMMISSION MERCHANT.— 

13 ‘‘(A) IN GENERAL.—The term ‘futures 

14 commission merchant’ means an individual, as15 sociation, partnership, corporation, or trust— 

16 ‘‘(i) that— 

17 ‘‘(I) is engaged in soliciting or in 

18 accepting orders for— 

19 ‘‘(aa) the purchase or sale of 

20 a commodity for future delivery; 

21 ‘‘(bb) a security futures 

22 product; 

23 ‘‘(cc) a swap; 

24 ‘‘(dd) any agreement, con25 tract, or transaction described in 


sroberts on DSKH9S0YB1PROD with BILLS
536 

•S 3217 AMDT 3739 

1 section 2(c)(2)(C)(i) or section 

2 2(c)(2)(D)(i); 

3 ‘‘(ee) any commodity option 

4 authorized under section 4c; or 

5 ‘‘(ff) any leverage trans6 action authorized under section 

7 19; or 

8 ‘‘(II) is acting as a counterparty 

9 in any agreement, contract, or trans10 action described in section 

11 2(c)(2)(C)(i) or section 2(c)(2)(D)(i); 

12 and 

13 ‘‘(III) in or in connection with 

14 the activities described in subclause 

15 (I) or (II), accepts any money, securi16 ties, or property (or extends credit in 

17 lieu thereof) to margin, guarantee, or 

18 secure any trades or contracts that re19 sult or may result therefrom; or 

20 ‘‘(ii) that is registered with the Com21 mission as a futures commission merchant. 

22 ‘‘(B) FURTHER DEFINITION.—The Com23 mission, by rule or regulation, may include 

24 within, or exclude from, the term ‘futures com25 mission merchant’ any person who engages in 


sroberts on DSKH9S0YB1PROD with BILLS
537 

•S 3217 AMDT 3739 

1 soliciting or accepting orders for, or acting as 

2 a counterparty in, any agreement, contract, or 

3 transaction subject to this Act, and who accepts 

4 any money, securities, or property (or extends 

5 credit in lieu thereof) to margin, guarantee, or 

6 secure any trades or contracts that result or 

7 may result therefrom, if the Commission deter8 mines that the rule or regulation will effectuate 

9 the purposes of this Act.’’; 

10 (14) in paragraph (30) (as redesignated by 

11 paragraph (1)), in subparagraph (B), by striking 

12 ‘‘state’’ and inserting ‘‘State’’; 

13 (15) by striking paragraph (31) (as redesig14 nated by paragraph (1)) and inserting the following: 

15 ‘‘(31) INTRODUCING BROKER.— 

16 ‘‘(A) IN GENERAL.—The term ‘introducing 

17 broker’ means any person (except an individual 

18 who elects to be and is registered as an associ19 ated person of a futures commission mer20 chant)— 

21 ‘‘(i) who— 

22 ‘‘(I) is engaged in soliciting or in 

23 accepting orders for— 

24 ‘‘(aa) the purchase or sale of 

25 any commodity for future delivVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00537 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
538 

•S 3217 AMDT 3739 

1 ery, security futures product, or 

2 swap; 

3 ‘‘(bb) any agreement, con4 tract, or transaction described in 

5 section 2(c)(2)(C)(i) or section 

6 2(c)(2)(D)(i); 

7 ‘‘(cc) any commodity option 

8 authorized under section 4c; or 

9 ‘‘(dd) any leverage trans10 action authorized under section 

11 19; and 

12 ‘‘(II) does not accept any money, 

13 securities, or property (or extend cred14 it in lieu thereof) to margin, guar15 antee, or secure any trades or con16 tracts that result or may result there17 from; or 

18 ‘‘(ii) who is registered with the Com19 mission as an introducing broker. 

20 ‘‘(B) FURTHER DEFINITION.—The Com21 mission, by rule or regulation, may include 

22 within, or exclude from, the term ‘introducing 

23 broker’ any person who engages in soliciting or 

24 accepting orders for any agreement, contract, 

25 or transaction subject to this Act, and who does 


sroberts on DSKH9S0YB1PROD with BILLS
539 

•S 3217 AMDT 3739 

1 not accept any money, securities, or property 

2 (or extend credit in lieu thereof) to margin, 

3 guarantee, or secure any trades or contracts 

4 that result or may result therefrom, if the Com5 mission determines that the rule or regulation 

6 will effectuate the purposes of this Act.’’; 

7 (16) by inserting after paragraph (31) (as re8 designated by paragraph (1)) the following: 

9 ‘‘(32) MAJOR SECURITY-BASED SWAP PARTICI10 PANT.—The term ‘major security-based swap partic11 ipant’ has the meaning given the term in section 

12 3(a) of the Securities Exchange Act of 1934 (15 

13 U.S.C. 78c(a)). 

14 ‘‘(33) MAJOR SWAP PARTICIPANT.— 

15 ‘‘(A) IN GENERAL.—The term ‘major swap 

16 participant’ means any person who is not a 

17 swap dealer, and— 

18 ‘‘(i) maintains a substantial position 

19 in swaps for any of the major swap cat20 egories as determined by the Commission, 

21 excluding— 

22 ‘‘(I) positions held for hedging or 

23 mitigating commercial risk; and 

24 ‘‘(II) positions maintained by any 

25 employee benefit plan (or any contract 


sroberts on DSKH9S0YB1PROD with BILLS
540 

•S 3217 AMDT 3739 

1 held by such a plan) as defined in 

2 paragraphs (3) and (32) of section 3 

3 of the Employee Retirement Income 

4 Security Act of 1974 (29 U.S.C. 

5 1002) for the primary purpose of 

6 hedging or mitigating any risk directly 

7 associated with the operation of the 

8 plan; or 

9 ‘‘(ii) whose outstanding swaps create 

10 substantial counterparty exposure that 

11 could have serious adverse effects on the 

12 financial stability of the United States 

13 banking system or financial markets; or 

14 ‘‘(iii)(I) is a financial entity, other 

15 than an entity predominantly engaged in 

16 providing financing for the purchase of an 

17 affiliate’s merchandise or manufactured 

18 goods, that is highly leveraged relative to 

19 the amount of capital it holds; and 

20 ‘‘(II) maintains a substantial position 

21 in outstanding swaps in any major swap 

22 category as determined by the Commission. 

23 ‘‘(B) DEFINITION OF SUBSTANTIAL POSI24 TION.—For purposes of subparagraph (A), the 

25 Commission shall define by rule or regulation 


sroberts on DSKH9S0YB1PROD with BILLS
541 

•S 3217 AMDT 3739 

1 the term ‘substantial position’ at the threshold 

2 that the Commission determines to be prudent 

3 for the effective monitoring, management, and 

4 oversight of entities that are systemically im5 portant or can significantly impact the financial 

6 system of the United States. 

7 ‘‘(C) SCOPE OF DESIGNATION.—For pur8 poses of subparagraph (A), a person may be 

9 designated as a major swap participant for 1 or 

10 more categories of swaps without being classi11 fied as a major swap participant for all classes 

12 of swaps. 

13 ‘‘(D) CAPITAL.—In setting capital require14 ments for a person that is designated as a 

15 major swap participant for a single type or sin16 gle class or category of swaps or activities, the 

17 prudential regulator and the Commission shall 

18 take into account the risks associated with 

19 other types of swaps or classes of swaps or cat20 egories of swaps engaged in and the other ac21 tivities conducted by that person that are not 

22 otherwise subject to regulation applicable to 

23 that person by virtue of the status of the person 

24 as a major swap participant.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
542 

•S 3217 AMDT 3739 

1 (17) by inserting after paragraph (38) (as re2 designated by paragraph (1)) the following: 

3 ‘‘(39) PRUDENTIAL REGULATOR.—The term 

4 ‘prudential regulator’ means— 

5 ‘‘(A) the Office of the Comptroller of the 

6 Currency, in the case of— 

7 ‘‘(i) any national banking association; 

8 ‘‘(ii) any Federal branch or agency of 

9 a foreign bank; or 

10 ‘‘(iii) any Federal savings association; 

11 ‘‘(B) the Federal Deposit Insurance Cor12 poration, in the case of— 

13 ‘‘(i) any insured State bank; 

14 ‘‘(ii) any foreign bank having an in15 sured branch; or 

16 ‘‘(iii) any State savings association; 

17 ‘‘(C) the Board of Governors of the Fed18 eral Reserve System, in the case of— 

19 ‘‘(i) any noninsured State member 

20 bank; 

21 ‘‘(ii) any branch or agency of a for22 eign bank with respect to any provision of 

23 the Federal Reserve Act (12 U.S.C. 221 et 

24 seq.) which is made applicable under the 


sroberts on DSKH9S0YB1PROD with BILLS
543 

•S 3217 AMDT 3739 

1 International Banking Act of 1978 (12 

2 U.S.C. 3101 et seq.); 

3 ‘‘(iii) any foreign bank which does not 

4 operate an insured branch; 

5 ‘‘(iv) any agency or commercial lend6 ing company other than a Federal agency; 

7 or 

8 ‘‘(v) supervisory or regulatory pro9 ceedings arising from the authority given 

10 to the Board of Governors under section 

11 7(c)(1) of the International Banking Act of 

12 1978 (12 U.S.C. 3105(c)(1)), including 

13 such proceedings under the Financial In14 stitutions Supervisory Act of 1966 (12 

15 U.S.C. 1464 et seq.); and 

16 ‘‘(D) the Farm Credit Administration, in 

17 the case of a swap dealer, major swap partici18 pant, security-based swap dealer, or major secu19 rity-based swap participant that is an institu20 tion chartered under the Farm Credit Act of 

21 1971 (12 U.S.C. 2001 et seq.).’’; 

22 (18) in paragraph (40) (as redesignated by 

23 paragraph (1))— 

24 (A) by striking subparagraph (B); 


sroberts on DSKH9S0YB1PROD with BILLS
544 

•S 3217 AMDT 3739 

1 (B) by redesignating subparagraphs (C), 

2 (D), and (E) as subparagraphs (B), (C), and 

3 (F), respectively; 

4 (C) in subparagraph (C) (as so redesig5 nated), by striking ‘‘and’’; 

6 (D) by inserting after subparagraph (C) 

7 (as so redesignated) the following: 

8 ‘‘(D) a swap execution facility registered 

9 under section 5h; 

10 ‘‘(E) a swap data repository; and’’; 

11 (19) by inserting after paragraph (41) (as re12 designated by paragraph (1)) the following: 

13 ‘‘(42) SECURITY-BASED SWAP.—The term ‘se14 curity-based swap’ has the meaning given the term 

15 in section 3(a) of the Securities Exchange Act of 

16 1934 (15 U.S.C. 78c(a)). 

17 ‘‘(43) SECURITY-BASED SWAP DEALER.—The 

18 term ‘security-based swap dealer’ has the meaning 

19 given the term in section 3(a) of the Securities Ex20 change Act of 1934 (15 U.S.C. 78c(a)).’’; 

21 (20) in paragraph (46) (as redesignated by 

22 paragraph (1)), by striking ‘‘subject to section 

23 2(h)(7)’’ and inserting ‘‘subject to section 2(h)(5)’’; 

24 (21) by inserting after paragraph (46) (as re25 designated by paragraph (1)) the following: 


sroberts on DSKH9S0YB1PROD with BILLS
545 

•S 3217 AMDT 3739 

1 ‘‘(47) SWAP.— 

2 ‘‘(A) IN GENERAL.—Except as provided in 

3 subparagraph (B), the term ‘swap’ means any 

4 agreement, contract, or transaction— 

5 ‘‘(i) that is a put, call, cap, floor, col6 lar, or similar option of any kind that is 

7 for the purchase or sale, or based on the 

8 value, of 1 or more interest or other rates, 

9 currencies, commodities, securities, instru10 ments of indebtedness, indices, quantitative 

11 measures, or other financial or economic 

12 interests or property of any kind; 

13 ‘‘(ii) that provides for any purchase, 

14 sale, payment, or delivery (other than a 

15 dividend on an equity security) that is de16 pendent on the occurrence, nonoccurrence, 

17 or the extent of the occurrence of an event 

18 or contingency associated with a potential 

19 financial, economic, or commercial con20 sequence; 

21 ‘‘(iii) that provides on an executory 

22 basis for the exchange, on a fixed or con23 tingent basis, of 1 or more payments based 

24 on the value or level of 1 or more interest 

25 or other rates, currencies, commodities, seVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00545 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
546 

•S 3217 AMDT 3739 

1 curities, instruments of indebtedness, indi2 ces, quantitative measures, or other finan3 cial or economic interests or property of 

4 any kind, or any interest therein or based 

5 on the value thereof, and that transfers, as 

6 between the parties to the transaction, in 

7 whole or in part, the financial risk associ8 ated with a future change in any such 

9 value or level without also conveying a cur10 rent or future direct or indirect ownership 

11 interest in an asset (including any enter12 prise or investment pool) or liability that 

13 incorporates the financial risk so trans14 ferred, including any agreement, contract, 

15 or transaction commonly known as— 

16 ‘‘(I) an interest rate swap; 

17 ‘‘(II) a rate floor; 

18 ‘‘(III) a rate cap; 

19 ‘‘(IV) a rate collar; 

20 ‘‘(V) a cross-currency rate swap; 

21 ‘‘(VI) a basis swap; 

22 ‘‘(VII) a currency swap; 

23 ‘‘(VIII) a foreign exchange swap; 

24 ‘‘(IX) a total return swap; 

25 ‘‘(X) an equity index swap; 


sroberts on DSKH9S0YB1PROD with BILLS
547 

•S 3217 AMDT 3739 

1 ‘‘(XI) an equity swap; 

2 ‘‘(XII) a debt index swap; 

3 ‘‘(XIII) a debt swap; 

4 ‘‘(XIV) a credit spread; 

5 ‘‘(XV) a credit default swap; 

6 ‘‘(XVI) a credit swap; 

7 ‘‘(XVII) a weather swap; 

8 ‘‘(XVIII) an energy swap; 

9 ‘‘(XIX) a metal swap; 

10 ‘‘(XX) an agricultural swap; 

11 ‘‘(XXI) an emissions swap; and 

12 ‘‘(XXII) a commodity swap; 

13 ‘‘(iv) that is an agreement, contract, 

14 or transaction that is, or in the future be15 comes commonly known to the trade as a 

16 swap; 

17 ‘‘(v) including any security-based 

18 swap agreement which meets the definition 

19 of ‘swap agreement’ as defined in section 

20 206A of the Gramm-Leach-Bliley Act (15 

21 U.S.C. 78c note) of which a material term 

22 is based on the price, yield, value, or vola23 tility of any security or any group or index 

24 of securities, or any interest therein; or 


sroberts on DSKH9S0YB1PROD with BILLS
548 

•S 3217 AMDT 3739 

1 ‘‘(vi) that is any combination or per2 mutation of, or option on, any agreement, 

3 contract, or transaction described in any of 

4 clauses (i) through (v). 

5 ‘‘(B) EXCLUSIONS.—The term ‘swap’ does 

6 not include— 

7 ‘‘(i) any contract of sale of a com8 modity for future delivery (or option on 

9 such a contract), leverage contract author10 ized under section 19, security futures 

11 product, or agreement, contract, or trans12 action described in section 2(c)(2)(C)(i) or 

13 section 2(c)(2)(D)(i); 

14 ‘‘(ii) any sale of a nonfinancial com15 modity or security for deferred shipment or 

16 delivery, so long as the transaction is in17 tended to be physically settled; 

18 ‘‘(iii) any put, call, straddle, option, or 

19 privilege on any security, certificate of de20 posit, or group or index of securities, in21 cluding any interest therein or based on 

22 the value thereof, that is subject to— 

23 ‘‘(I) the Securities Act of 1933 

24 (15 U.S.C. 77a et seq.); and 


sroberts on DSKH9S0YB1PROD with BILLS
549 

•S 3217 AMDT 3739 

1 ‘‘(II) the Securities Exchange 

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

3 ‘‘(iv) any put, call, straddle, option, or 

4 privilege relating to a foreign currency en5 tered into on a national securities exchange 

6 registered pursuant to section 6(a) of the 

7 Securities Exchange Act of 1934 (15 

8 U.S.C. 78f(a)); 

9 ‘‘(v) any agreement, contract, or 

10 transaction providing for the purchase or 

11 sale of 1 or more securities on a fixed basis 

12 that is subject to— 

13 ‘‘(I) the Securities Act of 1933 

14 (15 U.S.C. 77a et seq.); and 

15 ‘‘(II) the Securities Exchange 

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

17 ‘‘(vi) any agreement, contract, or 

18 transaction providing for the purchase or 

19 sale of 1 or more securities on a contingent 

20 basis that is subject to the Securities Act 

21 of 1933 (15 U.S.C. 77a et seq.) and the 

22 Securities Exchange Act of 1934 (15 

23 U.S.C. 78a et seq.), unless the agreement, 

24 contract, or transaction predicates the pur25 chase or sale on the occurrence of a bona 


sroberts on DSKH9S0YB1PROD with BILLS
550 

•S 3217 AMDT 3739 

1 fide contingency that might reasonably be 

2 expected to affect or be affected by the 

3 creditworthiness of a party other than a 

4 party to the agreement, contract, or trans5 action; 

6 ‘‘(vii) any note, bond, or evidence of 

7 indebtedness that is a security, as defined 

8 in section 2(a) of the Securities Act of 

9 1933 (15 U.S.C. 77b(a)); 

10 ‘‘(viii) any agreement, contract, or 

11 transaction that is— 

12 ‘‘(I) based on a security; and 

13 ‘‘(II) entered into directly or 

14 through an underwriter (as defined in 

15 section 2(a) of the Securities Act of 

16 1933 (15 U.S.C. 77b(a))) by the 

17 issuer of such security for the pur18 poses of raising capital, unless the 

19 agreement, contract, or transaction is 

20 entered into to manage a risk associ21 ated with capital raising; 

22 ‘‘(ix) any agreement, contract, or 

23 transaction a counterparty of which is a 

24 Federal Reserve bank, the Federal Govern25 ment, or a Federal agency that is expressly 


sroberts on DSKH9S0YB1PROD with BILLS
551 

•S 3217 AMDT 3739 

1 backed by the full faith and credit of the 

2 United States; and 

3 ‘‘(x) any security-based swap, other 

4 than a security-based swap as described in 

5 subparagraph (D). 

6 ‘‘(C) RULE OF CONSTRUCTION REGARDING

7 MASTER AGREEMENTS.— 

8 ‘‘(i) IN GENERAL.—Except as pro9 vided in clause (ii), the term ‘swap’ in10 cludes a master agreement that provides 

11 for an agreement, contract, or transaction 

12 that is a swap under subparagraph (A), to13 gether with each supplement to any master 

14 agreement, without regard to whether the 

15 master agreement contains an agreement, 

16 contract, or transaction that is not a swap 

17 pursuant to subparagraph (A). 

18 ‘‘(ii) EXCEPTION.—For purposes of 

19 clause (i), the master agreement shall be 

20 considered to be a swap only with respect 

21 to each agreement, contract, or transaction 

22 covered by the master agreement that is a 

23 swap pursuant to subparagraph (A). 

24 ‘‘(D) MIXED SWAP.—The term ‘security25 based swap’ includes any agreement, contract, 


sroberts on DSKH9S0YB1PROD with BILLS
552 

•S 3217 AMDT 3739 

1 or transaction that is as described in section 

2 3(a)(68)(A) of the Securities Exchange Act of 

3 1934 (15 U.S.C. 78c(a)(68)(A)) and also is 

4 based on the value of 1 or more interest or 

5 other rates, currencies, commodities, instru6 ments of indebtedness, indices, quantitative 

7 measures, other financial or economic interest 

8 or property of any kind (other than a single se9 curity or a narrow-based security index), or the 

10 occurrence, non-occurrence, or the extent of the 

11 occurrence of an event or contingency associ12 ated with a potential financial, economic, or 

13 commercial consequence (other than an event 

14 described in subparagraph (A)(iii)). 

15 ‘‘(E) TREATMENT OF FOREIGN EXCHANGE

16 SWAPS AND FORWARDS.— 

17 ‘‘(i) IN GENERAL.—Foreign exchange 

18 swaps and foreign exchange forwards shall 

19 be considered swaps under this paragraph 

20 unless the Secretary makes a written de21 termination that either foreign exchange 

22 swaps or foreign exchange forwards or 

23 both— 

24 ‘‘(I) should be not be regulated 

25 as swaps under this Act; and 


sroberts on DSKH9S0YB1PROD with BILLS
553 

•S 3217 AMDT 3739 

1 ‘‘(II) are not structured to evade 

2 the Wall Street Transparency and Ac3 countability Act of 2010 in violation 

4 of any rule promulgated by the Com5 mission pursuant to section 111(c) of 

6 that Act. 

7 ‘‘(ii) CONGRESSIONAL NOTICE; EFFEC8 TIVENESS.—The Secretary shall submit 

9 any written determination under clause (i) 

10 to the appropriate committees of Congress, 

11 including the Committee on Agriculture, 

12 Nutrition, and Forestry of the Senate and 

13 the Committee on Agriculture of the House 

14 of Representatives. Any such written deter15 mination by the Secretary shall not be ef16 fective until it is submitted to the appro17 priate committees of Congress. 

18 ‘‘(iii) REPORTING.—Notwithstanding 

19 a written determination by the Secretary 

20 under clause (i), all foreign exchange 

21 swaps and foreign exchange forwards shall 

22 be reported to either a swap data reposi23 tory, or, if there is no swap data repository 

24 that would accept such swaps or forwards, 

25 to the Commission pursuant to section 4r 


sroberts on DSKH9S0YB1PROD with BILLS
554 

•S 3217 AMDT 3739 

1 within such time period as the Commission 

2 may by rule or regulation prescribe. 

3 ‘‘(iv) BUSINESS STANDARDS.—Not4 withstanding clauses (ix) and (x) of sub5 paragraph (B) and clause (ii), any party to 

6 a foreign exchange swap or forward that is 

7 a swap dealer or major swap participant 

8 shall conform to the business conduct 

9 standards contained in section 4s(h). 

10 ‘‘(v) SECRETARY.—For purposes of 

11 this subparagraph only, the term ‘Sec12 retary’ means the Secretary of the Treas13 ury. 

14 ‘‘(F) EXCEPTION FOR CERTAIN FOREIGN

15 EXCHANGE SWAPS AND FORWARDS.— 

16 ‘‘(i) REGISTERED ENTITIES.—Any 

17 foreign exchange swap and any foreign ex18 change forward that is listed and traded on 

19 or subject to the rules of a designated con20 tract market or a swap execution facility, 

21 or that is cleared by a derivatives clearing 

22 organization shall not be exempt from any 

23 provision of this Act or amendments made 

24 by the Wall Street Transparency and AcVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00554 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
555 

•S 3217 AMDT 3739 

1 countability Act of 2010 prohibiting fraud 

2 or manipulation. 

3 ‘‘(ii) RETAIL TRANSACTIONS.—Noth4 ing in subparagraph (E) shall affect, or be 

5 construed to affect, the applicability of this 

6 Act or the jurisdiction of the Commission 

7 with respect to agreements, contracts, or 

8 transactions in foreign currency pursuant 

9 to section 2(c)(2). 

10 ‘‘(48) SWAP DATA REPOSITORY.—The term 

11 ‘swap data repository’ means any person that col12 lects, calculates, prepares, or maintains information 

13 or records with respect to transactions or positions 

14 in, or the terms and conditions of, swaps entered 

15 into by third parties. 

16 ‘‘(49) SWAP DEALER.— 

17 ‘‘(A) IN GENERAL.—The term ‘swap deal18 er’ means any person who— 

19 ‘‘(i) holds itself out as a dealer in 

20 swaps; 

21 ‘‘(ii) makes a market in swaps; 

22 ‘‘(iii) regularly engages in the pur23 chase and sale of swaps in the ordinary 

24 course of business; or 


sroberts on DSKH9S0YB1PROD with BILLS
556 

•S 3217 AMDT 3739 

1 ‘‘(iv) engages in any activity causing 

2 the person to be commonly known in the 

3 trade as a dealer or market maker in 

4 swaps. 

5 ‘‘(B) INCLUSION.—A person may be des6 ignated as a swap dealer for a single type or 

7 single class or category of swap or activities and 

8 considered not to be a swap dealer for other 

9 types, classes, or categories of swaps or activi10 ties. 

11 ‘‘(C) CAPITAL.—In setting capital require12 ments for a person that is designated as a swap 

13 dealer for a single type or single class or cat14 egory of swap or activities, the prudential regu15 lator and the Commission shall take into ac16 count the risks associated with other types of 

17 swaps or classes of swaps or categories of swaps 

18 engaged in and the other activities conducted 

19 by that person that are not otherwise subject to 

20 regulation applicable to that person by virtue of 

21 the status of the person as a swap dealer. 

22 ‘‘(D) EXCEPTION.—The term ‘swap dealer’ 

23 does not include a person that buys or sells 

24 swaps for such person’s own account, either inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00556 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
557 

•S 3217 AMDT 3739 

1 dividually or in a fiduciary capacity, but not as 

2 a part of a regular business. 

3 ‘‘(50) SWAP EXECUTION FACILITY.—The term 

4 ‘swap execution facility’ means a facility in which 

5 multiple participants have the ability to execute or 

6 trade swaps by accepting bids and offers made by 

7 other participants that are open to multiple partici8 pants in the facility or system, through any means 

9 of interstate commerce, including any trading facil10 ity, that— 

11 ‘‘(A) facilitates the execution of swaps be12 tween persons; and 

13 ‘‘(B) is not a designated contract mar14 ket.’’; and 

15 (22) in paragraph (51) (as redesignated by 

16 paragraph (1)), in subparagraph (A)(i), by striking 

17 ‘‘partipants’’ and inserting ‘‘participants’’. 

18 (b) AUTHORITY TO DEFINE TERMS.—The Com19 modity Futures Trading Commission may adopt a rule to 

20 define— 

21 (1) the term ‘‘commercial risk’’; and 

22 (2) any other term included in an amendment 

23 to the Commodity Exchange Act (7 U.S.C. 1 et seq.) 

24 made by this subtitle. 


sroberts on DSKH9S0YB1PROD with BILLS
558 

•S 3217 AMDT 3739 

1 (c) MODIFICATION OF DEFINITIONS.—To include 

2 transactions and entities that have been structured to 

3 evade this subtitle (or an amendment made by this sub4 title), the Commodity Futures Trading Commission shall 

5 adopt a rule to further define the terms ‘‘swap’’, ‘‘swap 

6 dealer’’, ‘‘major swap participant’’, and ‘‘eligible contract 

7 participant’’. 

8 (d) EXEMPTIONS.—Section 4(c)(1) of the Commodity 

9 Exchange Act (7 U.S.C. 6(c)(1)) is amended by striking 

10 ‘‘except that’’ and all that follows through the period at 

11 the end and inserting the following: ‘‘except that— 

12 ‘‘(A) unless the Commission is expressly 

13 authorized by any provision described in this 

14 subparagraph to grant exemptions, with respect 

15 to amendments made by subtitle A of the Wall 

16 Street Transparency and Accountability Act of 

17 2010— 

18 ‘‘(i) with respect to— 

19 ‘‘(I) paragraphs (2), (3), (4), (5), 

20 and (7), clause (vii)(III) of paragraph 

21 (17), paragraphs (23), (24), (31), 

22 (32), (38), (39), (41), (42), (46), 

23 (47), (48), and (49) of section 1a, and 

24 sections 2(a)(13), 2(c)(D), 4a(a), 

25 4a(b), 4d(c), 4d(d), 4r, 4s, 5b(a), 


sroberts on DSKH9S0YB1PROD with BILLS
559 

•S 3217 AMDT 3739 

1 5b(b), 5(d), 5(g), 5(h), 5b(c), 5b(i), 

2 8e, and 21; and 

3 ‘‘(II) section 206(e) of the 

4 Gramm-Leach-Bliley Act (Public Law 

5 106–102; 15 U.S.C. 78c note); and 

6 ‘‘(ii) in subsection (c) of section 111 

7 and section 132; and 

8 ‘‘(B) the Commission and the Securities 

9 and Exchange Commission may by rule, regula10 tion, or order jointly exclude any agreement, 

11 contract, or transaction from section 

12 2(a)(1)(D)) if the Commission determines that 

13 the exemption would be consistent with the 

14 public interest.’’. 

15 (e) CONFORMING AMENDMENTS.— 

16 (1) Section 2(c)(2)(B)(i)(II) of the Commodity 

17 Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)) is amend18 ed— 

19 (A) in item (cc)— 

20 (i) in subitem (AA), by striking ‘‘sec21 tion 1a(20)’’ and inserting ‘‘section 1a’’; 

22 and 

23 (ii) in subitem (BB), by striking ‘‘sec24 tion 1a(20)’’ and inserting ‘‘section 1a’’; 

25 and 


sroberts on DSKH9S0YB1PROD with BILLS
560 

•S 3217 AMDT 3739 

1 (B) in item (dd), by striking ‘‘section 

2 1a(12)(A)(ii)’’ and inserting ‘‘section 

3 1a(18)(A)(ii)’’. 

4 (2) Section 4m(3) of the Commodity Exchange 

5 Act (7 U.S.C. 6m(3)) is amended by striking ‘‘sec6 tion 1a(6)’’ and inserting ‘‘section 1a’’. 

7 (3) Section 4q(a)(1) of the Commodity Ex8 change Act (7 U.S.C. 6o–1(a)(1)) is amended by 

9 striking ‘‘section 1a(4)’’ and inserting ‘‘section 

10 1a(9)’’. 

11 (4) Section 5(e)(1) of the Commodity Exchange 

12 Act (7 U.S.C. 7(e)(1)) is amended by striking ‘‘sec13 tion 1a(4)’’ and inserting ‘‘section 1a(9)’’. 

14 (5) Section 5a(b)(2)(F) of the Commodity Ex15 change Act (7 U.S.C. 7a(b)(2)(F)) is amended by 

16 striking ‘‘section 1a(4)’’ and inserting ‘‘section 

17 1a(9)’’. 

18 (6) Section 5b(a) of the Commodity Exchange 

19 Act (7 U.S.C. 7a–1(a)) is amended, in the matter 

20 preceding paragraph (1), by striking ‘‘section 1a(9)’’ 

21 and inserting ‘‘section 1a’’. 

22 (7) Section 5c(c)(2)(B) of the Commodity Ex23 change Act (7 U.S.C. 7a–2(c)(2)(B)) is amended by 

24 striking ‘‘section 1a(4)’’ and inserting ‘‘section 

25 1a(9)’’. 


sroberts on DSKH9S0YB1PROD with BILLS
561 

•S 3217 AMDT 3739 

1 (8) Section 6(g)(5)(B)(i) of the Securities Ex2 change Act of 1934 (15 U.S.C. 78f(g)(5)(B)(i)) is 

3 amended— 

4 (A) in subclause (I), by striking ‘‘section 

5 1a(12)(B)(ii)’’ and inserting ‘‘section 

6 1a(18)(B)(ii)’’; and 

7 (B) in subclause (II), by striking ‘‘section 

8 1a(12)’’ and inserting ‘‘section 1a(18)’’. 

9 (9) The Legal Certainty for Bank Products Act 

10 of 2000 (7 U.S.C. 27 et seq.) is amended— 

11 (A) in section 402— 

12 (i) in subsection (a)(7), by striking 

13 ‘‘section 1a(20)’’ and inserting ‘‘section 

14 1a’’; 

15 (ii) in subsection (b)(2), by striking 

16 ‘‘section 1a(12)’’ and inserting ‘‘section 

17 1a’’; 

18 (iii) in subsection (c), by striking 

19 ‘‘section 1a(4)’’ and inserting ‘‘section 1a’’; 

20 and 

21 (iv) in subsection (d)— 

22 (I) in the matter preceding para23 graph (1), by striking ‘‘section 1a(4)’’ 

24 and inserting ‘‘section 1a(9)’’; 

25 (II) in paragraph (1)— 


sroberts on DSKH9S0YB1PROD with BILLS
562 

•S 3217 AMDT 3739 

1 (aa) in subparagraph (A), 

2 by striking ‘‘section 1a(12)’’ and 

3 inserting ‘‘section 1a’’; and 

4 (bb) in subparagraph (B), 

5 by striking ‘‘section 1a(33)’’ and 

6 inserting ‘‘section 1a’’; 

7 (III) in paragraph (2)— 

8 (aa) in subparagraph (A), 

9 by striking ‘‘section 1a(10)’’ and 

10 inserting ‘‘section 1a’’; 

11 (bb) in subparagraph (B), 

12 by striking ‘‘section 

13 1a(12)(B)(ii)’’ and inserting 

14 ‘‘section 1a(18)(B)(ii)’’; 

15 (cc) in subparagraph (C), by 

16 striking ‘‘section 1a(12)’’ and in17 serting ‘‘section 1a(18)’’; and 

18 (dd) in subparagraph (D), 

19 by striking ‘‘section 1a(13)’’ and 

20 inserting ‘‘section 1a’’; and 

21 (B) in section 404(1), by striking ‘‘section 

22 1a(4)’’ and inserting ‘‘section 1a’’. 


sroberts on DSKH9S0YB1PROD with BILLS
563 

•S 3217 AMDT 3739 

1 SEC. 722. JURISDICTION. 

2 (a) EXCLUSIVE JURISDICTION.—Section 2(a)(1)(A) 

3 of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)) is 

4 amended in the first sentence— 

5 (1) by inserting ‘‘the Wall Street Transparency 

6 and Accountability Act of 2010 (including an 

7 amendment made by that Act) and’’ after ‘‘other8 wise provided in’’; 

9 (2) by striking ‘‘(c) through (i) of this section’’ 

10 and inserting ‘‘(c) and (f)’’; 

11 (3) by striking ‘‘contracts of sale’’ and inserting 

12 ‘‘swaps or contracts of sale’’; and 

13 (4) by striking ‘‘or derivatives transaction exe14 cution facility registered pursuant to section 5 or 

15 5a’’ and inserting ‘‘pursuant to section 5’’. 

16 (b) REGULATION OF SWAPS UNDER FEDERAL AND

17 STATE LAW.—Section 12 of the Commodity Exchange Act 

18 (7 U.S.C. 16) is amended by adding at the end the fol19 lowing: 

20 ‘‘(h) REGULATION OF SWAPS AS INSURANCE UNDER

21 STATE LAW.—A swap— 

22 ‘‘(1) shall not be considered to be insurance; 

23 and 

24 ‘‘(2) may not be regulated as an insurance con25 tract under the law of any State.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
564 

•S 3217 AMDT 3739 

1 (c) AGREEMENTS, CONTRACTS, AND TRANSACTIONS

2 TRADED ON AN ORGANIZED EXCHANGE.—Section 

3 2(c)(2)(A) of the Commodity Exchange Act (7 U.S.C. 

4 2(c)(2)(A)) is amended— 

5 (1) in clause (i), by striking ‘‘or’’ at the end; 

6 (2) by redesignating clause (ii) as clause (iii); 

7 and 

8 (3) by inserting after clause (i) the following: 

9 ‘‘(ii) a swap; or’’. 

10 (d) APPLICABILITY.—Section 2 of the Commodity 

11 Exchange Act (7 U.S.C. 2) (as amended by section 

12 723(a)(3)) is amended by adding at the end the following: 

13 ‘‘(i) APPLICABILITY.—The provisions of this Act re14 lating to swaps that were enacted by the Wall Street 

15 Transparency and Accountability Act of 2010 (including 

16 any rule prescribed or regulation promulgated under that 

17 Act), shall not apply to activities outside the United States 

18 unless those activities— 

19 ‘‘(1) have a direct and significant connection 

20 with activities in, or effect on, commerce of the 

21 United States; or 

22 ‘‘(2) contravene such rules or regulations as the 

23 Commission may prescribe or promulgate as are nec24 essary or appropriate to prevent the evasion of any 

25 provision of this Act that was enacted by the Wall 


sroberts on DSKH9S0YB1PROD with BILLS
565 

•S 3217 AMDT 3739 

1 Street Transparency and Accountability Act of 

2 2010.’’. 

3 SEC. 723. CLEARING. 

4 (a) CLEARING REQUIREMENT.— 

5 (1) IN GENERAL.—Section 2 of the Commodity 

6 Exchange Act (7 U.S.C. 2) is amended— 

7 (A) by striking subsections (d), (e), (g), 

8 and (h); and 

9 (B) by redesignating subsection (i) as sub10 section (g). 

11 (2) SWAPS; LIMITATION ON PARTICIPATION.— 

12 Section 2 of the Commodity Exchange Act (7 U.S.C. 

13 2) (as amended by paragraph (1)) is amended by in14 serting after subsection (c) the following: 

15 ‘‘(d) SWAPS.—Nothing in this Act (other than sub16 paragraphs (A), (B), (C), and (D) of subsection (a)(1), 

17 subsections (f) and (g), sections 1a, 2(c)(2)(A)(ii), 2(e), 

18 2(h), 4(c), 4a, 4b, and 4b-1, subsections (a), (b), and (g) 

19 of section 4c, sections 4d, 4e, 4f, 4g, 4h, 4i, 4j, 4k, 4l, 

20 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, and 5h, sub21 sections (c) and (d) of section 6, sections 6c, 6d, 8, 8a, 

22 and 9, subsections (e)(2) and (f) of section 12, subsections 

23 (a) and (b) of section 13, sections 17, 20, 21, and 

24 22(a)(4), and any other provision of this Act that is appliVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00565 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
566 

•S 3217 AMDT 3739 

1 cable to registered entities and Commission registrants) 

2 governs or applies to a swap. 

3 ‘‘(e) LIMITATION ON PARTICIPATION.—It shall be 

4 unlawful for any person, other than an eligible contract 

5 participant, to enter into a swap unless the swap is en6 tered into on, or subject to the rules of, a board of trade 

7 designated as a contract market under section 5.’’. 

8 (3) MANDATORY CLEARING OF SWAPS.—Section 

9 2 of the Commodity Exchange Act (7 U.S.C. 2) is 

10 amended by inserting after subsection (g) (as redes11 ignated by paragraph (1)(B)) the following: 

12 ‘‘(h) CLEARING REQUIREMENT.— 

13 ‘‘(1) SUBMISSION.— 

14 ‘‘(A) IN GENERAL.—Except as provided in 

15 paragraphs (9) and (10), any person who is a 

16 party to a swap shall submit such swap for 

17 clearing to a derivatives clearing organization 

18 that is registered under this Act or a derivatives 

19 clearing organization that is exempt from reg20 istration under section 5b(j) of this Act. 

21 ‘‘(B) OPEN ACCESS.—The rules of a reg22 istered derivatives clearing organization shall— 

23 ‘‘(i) prescribe that all swaps with the 

24 same terms and conditions are economi25 cally equivalent and may be offset with 


sroberts on DSKH9S0YB1PROD with BILLS
567 

•S 3217 AMDT 3739 

1 each other within the derivatives clearing 

2 organization; and 

3 ‘‘(ii) provide for nondiscriminatory 

4 clearing of a swap executed bilaterally or 

5 on or through the rules of an unaffiliated 

6 designated contract market or swap execu7 tion facility, subject to the requirements of 

8 section 5(b). 

9 ‘‘(2) COMMISSION APPROVAL.— 

10 ‘‘(A) IN GENERAL.—A derivatives clearing 

11 organization shall submit to the Commission for 

12 prior approval any group, category, type, or 

13 class of swaps that the derivatives clearing or14 ganization seeks to accept for clearing, which 

15 submission the Commission shall make available 

16 to the public. 

17 ‘‘(B) DEADLINE.—The Commission shall 

18 take final action on a request submitted pursu19 ant to subparagraph (A) not later than 90 days 

20 after submission of the request, unless the de21 rivatives clearing organization submitting the 

22 request agrees to an extension of the time limi23 tation established under this subparagraph. 

24 ‘‘(C) APPROVAL.—The Commission shall 

25 approve, unconditionally or subject to such 


sroberts on DSKH9S0YB1PROD with BILLS
568 

•S 3217 AMDT 3739 

1 terms and conditions as the Commission deter2 mines to be appropriate, any request submitted 

3 pursuant to subparagraph (A) if the Commis4 sion finds that the request is consistent with 

5 section 5b(c)(2). The Commission shall not ap6 prove any such request if the Commission does 

7 not make such finding. 

8 ‘‘(D) RULES.—The Commission shall 

9 adopt rules for a derivatives clearing organiza10 tion’s submission for approval, pursuant to this 

11 paragraph, of any group, category, type, or 

12 class of swaps that the derivative clearing orga13 nization seeks to accept for clearing. 

14 ‘‘(3) STAY OF CLEARING REQUIREMENT.—At 

15 any time after issuance of an approval pursuant to 

16 paragraph (2): 

17 ‘‘(A) REVIEW PROCESS.—The Commission, 

18 on application of a counterparty to a swap or 

19 on its own initiative, may stay the clearing re20 quirement of paragraph (1) until the Commis21 sion completes a review of the terms of the 

22 swap, or the group, category, type, or class of 

23 swaps, and the clearing arrangement. 

24 ‘‘(B) DEADLINE.—The Commission shall 

25 complete a review undertaken pursuant to subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00568 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
569 

•S 3217 AMDT 3739 

1 paragraph (A) not later than 90 days after 

2 issuance of the stay, unless the derivatives 

3 clearing organization that clears the swap, or 

4 the group, category, type, or class of swaps, 

5 agrees to an extension of the time limitation es6 tablished under this subparagraph. 

7 ‘‘(C) DETERMINATION.—Upon completion 

8 of the review undertaken pursuant to subpara9 graph (A)— 

10 ‘‘(i) the Commission may determine, 

11 unconditionally or subject to such terms 

12 and conditions as the Commission deter13 mines to be appropriate, that the swap, or 

14 the group, category, type, or class of 

15 swaps, must be cleared pursuant to this 

16 subsection if the Commission finds that 

17 such clearing— 

18 ‘‘(I) is consistent with section 

19 5b(c)(2); and 

20 ‘‘(II) is otherwise in the public 

21 interest, for the protection of inves22 tors, and consistent with the purposes 

23 of this Act; 

24 ‘‘(ii) the Commission may determine 

25 that the clearing requirement of paragraph 


sroberts on DSKH9S0YB1PROD with BILLS
570 

•S 3217 AMDT 3739 

1 (1) shall not apply to the swap, or the 

2 group, category, type, or class of swaps; or 

3 ‘‘(iii) if a determination is made that 

4 the clearing requirement of paragraph (1) 

5 shall no longer apply, then it shall still be 

6 permissible to clear such swap, or the 

7 group, category, type, or class of swaps. 

8 ‘‘(D) RULES.—The Commission shall 

9 adopt rules for reviewing, pursuant to this 

10 paragraph, a derivatives clearing organization’s 

11 clearing of a swap, or a group, category, type, 

12 or class of swaps that the Commission has ac13 cepted for clearing. 

14 ‘‘(4) SWAPS REQUIRED TO BE ACCEPTED FOR

15 CLEARING.— 

16 ‘‘(A) RULEMAKING.—The Commission 

17 shall adopt rules to further identify any group, 

18 category, type, or class of swaps not submitted 

19 for approval under paragraph (2) that the Com20 mission deems should be accepted for clearing. 

21 In adopting such rules, the Commission shall 

22 take into account the following factors: 

23 ‘‘(i) The extent to which any of the 

24 terms of the group, category, type, or class 

25 of swaps, including price, are disseminated 


sroberts on DSKH9S0YB1PROD with BILLS
571 

•S 3217 AMDT 3739 

1 to third parties or are referenced in other 

2 agreements, contracts, or transactions. 

3 ‘‘(ii) The volume of transactions in 

4 the group, category, type, or class of 

5 swaps. 

6 ‘‘(iii) The extent to which the terms of 

7 the group, category, type, or class of swaps 

8 are similar to the terms of other agree9 ments, contracts, or transactions that are 

10 cleared. 

11 ‘‘(iv) Whether any differences in the 

12 terms of the group, category, type, or class 

13 of swaps, compared to other agreements, 

14 contracts, or transactions that are cleared, 

15 are of economic significance. 

16 ‘‘(v) Whether a derivatives clearing 

17 organization is prepared to clear the 

18 group, category, type, or class of swaps 

19 and such derivatives clearing organization 

20 has in place effective risk management sys21 tems. 

22 ‘‘(vi) Any other factors the Commis23 sion determine to be appropriate. 

24 ‘‘(B) OTHER DESIGNATIONS.—At any time 

25 after the adoption of the rules required under 


sroberts on DSKH9S0YB1PROD with BILLS
572 

•S 3217 AMDT 3739 

1 subparagraph (A), the Commission may sepa2 rately designate a particular swap or class of 

3 swaps as subject to the clearing requirement in 

4 paragraph (1), taking into account the factors 

5 described in clauses (i) through (vi) of subpara6 graph (A) and the rules adopted under such 

7 subparagraph. 

8 ‘‘(C) IN GENERAL.—In accordance with 

9 subparagraph (A), the Commission shall, con10 sistent with the public interest, adopt rules 

11 under the expedited process described in sub12 paragraph (D) to establish criteria for deter13 mining that a swap, or any group, category, 

14 type, or class of swap is required to be cleared. 

15 ‘‘(D) EXPEDITED RULEMAKING AUTHOR16 ITY.— 

17 ‘‘(i) PROCEDURE.—The promulgation 

18 of regulations under subparagraph (A) 

19 may be made without regard to— 

20 ‘‘(I) the notice and comment pro21 visions of section 553 of title 5, 

22 United States Code; and 

23 ‘‘(II) chapter 35 of title 44, 

24 United States Code (commonly known 

25 as the ‘Paperwork Reduction Act’). 


sroberts on DSKH9S0YB1PROD with BILLS
573 

•S 3217 AMDT 3739 

1 ‘‘(ii) AGENCY RULEMAKING.—In car2 rying out subparagraph (A), the Commis3 sion shall use the authority provided under 

4 section 808 of title 5, United States Code. 

5 ‘‘(5) PREVENTION OF EVASION.— 

6 ‘‘(A) IN GENERAL.—The Commission may 

7 prescribe rules under this subsection (and issue 

8 interpretations of rules prescribed under this 

9 subsection) as determined by the Commission to 

10 be necessary to prevent evasions of the manda11 tory clearing requirements under this Act. 

12 ‘‘(B) DUTY OF COMMISSION TO INVES13 TIGATE AND TAKE CERTAIN ACTIONS.—To the 

14 extent the Commission finds that a particular 

15 swap, group, category, type, or class of swaps 

16 would otherwise be subject to mandatory clear17 ing but no derivatives clearing organization has 

18 listed the swap, group, category, type, or class 

19 of swaps for clearing, the Commission shall— 

20 ‘‘(i) investigate the relevant facts and 

21 circumstances; 

22 ‘‘(ii) within 30 days issue a public re23 port containing the results of the investiga24 tion; and 


sroberts on DSKH9S0YB1PROD with BILLS
574 

•S 3217 AMDT 3739 

1 ‘‘(iii) take such actions as the Com2 mission determines to be necessary and in 

3 the public interest, which may include re4 quiring the retaining of adequate margin 

5 or capital by parties to the swap, group, 

6 category, type, or class of swaps. 

7 ‘‘(C) EFFECT ON AUTHORITY.—Nothing in 

8 this paragraph shall— 

9 ‘‘(i) authorize the Commission to re10 quire a derivatives clearing organization to 

11 list for clearing a swap, group, category, 

12 type, or class of swaps if the clearing of 

13 the swap, group, category, type, or class of 

14 swaps would adversely affect the business 

15 operations of the derivatives clearing orga16 nization, threaten the financial integrity of 

17 the derivatives clearing organization, or 

18 pose a systemic risk to the derivatives 

19 clearing organization; and 

20 ‘‘(ii) affect the authority of the Com21 mission to enforce the open access provi22 sions of paragraph (1) with respect to a 

23 swap, group, category, type, or class of 

24 swaps that is listed for clearing by a de25 rivatives clearing organization. 


sroberts on DSKH9S0YB1PROD with BILLS
575 

•S 3217 AMDT 3739 

1 ‘‘(6) REQUIRED REPORTING.— 

2 ‘‘(A) BOTH COUNTERPARTIES.—Both 

3 counterparties to a swap that is not cleared by 

4 any derivatives clearing organization shall re5 port such a swap either to a registered swap re6 pository described in section 21 or, if there is 

7 no repository that would accept the swap, to the 

8 Commission pursuant to section 4r. 

9 ‘‘(B) TIMING.—Counterparties to a swap 

10 shall submit the reports required under sub11 paragraph (A) not later than such time period 

12 as the Commission may by rule or regulation 

13 prescribe. 

14 ‘‘(7) TRANSITION RULES.— 

15 ‘‘(A) REPORTING TRANSITION RULES.— 

16 Rules adopted by the Commission under this 

17 section shall provide for the reporting of data, 

18 as follows: 

19 ‘‘(i) SWAPS ENTERED INTO BEFORE

20 DATE OF ENACTMENT OF THIS SUB21 SECTION.—Swaps entered into before the 

22 date of the enactment of this subsection 

23 shall be reported to a registered swap re24 pository or the Commission not later than 


sroberts on DSKH9S0YB1PROD with BILLS
576 

•S 3217 AMDT 3739 

1 180 days after the effective date of this 

2 subsection. 

3 ‘‘(ii) SWAPS ENTERED INTO ON OR

4 AFTER DATE OF ENACTMENT OF THIS

5 SUBSECTION.—Swaps entered into on or 

6 after such date of enactment shall be re7 ported to a registered swap repository or 

8 the Commission not later than the later 

9 of— 

10 ‘‘(I) 90 days after such effective 

11 date; or 

12 ‘‘(II) such other time after enter13 ing into the swap as the Commission 

14 may prescribe by rule or regulation. 

15 ‘‘(B) CLEARING TRANSITION RULES.— 

16 ‘‘(i) SWAPS ENTERED INTO BEFORE

17 THE DATE OF THE ENACTMENT OF THIS

18 SUBSECTION.—Swaps entered into before 

19 the date of the enactment of this sub20 section are exempt from the clearing re21 quirements of this subsection if reported 

22 pursuant to subparagraph (A)(i). 

23 ‘‘(ii) SWAPS ENTERED INTO BEFORE

24 APPLICATION OF CLEARING REQUIRE25 MENT.—Swaps entered into before applicaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00576 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
577 

•S 3217 AMDT 3739 

1 tion of the clearing requirement pursuant 

2 to this subsection are exempt from the 

3 clearing requirements of this subsection if 

4 reported pursuant to subparagraph (A)(ii). 

5 ‘‘(8) TRADE EXECUTION.— 

6 ‘‘(A) IN GENERAL.—With respect to trans7 actions involving swaps subject to the clearing 

8 requirement of paragraph (1), counterparties 

9 shall— 

10 ‘‘(i) execute the transaction on a 

11 board of trade designated as a contract 

12 market under section 5; or 

13 ‘‘(ii) execute the transaction on a 

14 swap execution facility registered under 

15 section 5h or a swap execution facility that 

16 is exempt from registration under section 

17 5h(f) of this Act. 

18 ‘‘(B) EXCEPTION.—The requirements of 

19 clauses (i) and (ii) of subparagraph (A) shall 

20 not apply if no board of trade or swap execution 

21 facility makes the swap available to trade or a 

22 swap transactions where a commercial end user 

23 opts to use the clearing exemption under para24 graph (9). 


sroberts on DSKH9S0YB1PROD with BILLS
578 

•S 3217 AMDT 3739 

1 ‘‘(9) REQUIRED EXEMPTION.—Subject to para2 graph (4), the Commission shall exempt a swap from 

3 the requirements of paragraphs (1) and (8) and any 

4 rules issued under this subsection, if no derivatives 

5 clearing organization registered under this Act or no 

6 derivatives clearing organization that is exempt from 

7 registration under section 5b(j) of this Act will ac8 cept the swap from clearing. 

9 ‘‘(10) END USER CLEARING EXEMPTION.— 

10 ‘‘(A) DEFINITION OF COMMERCIAL END

11 USER.— 

12 ‘‘(i) IN GENERAL.—In this paragraph, 

13 the term ‘commercial end user’ means any 

14 person other than a financial entity de15 scribed in clause (ii) who, as its primary 

16 business activity, owns, uses, produces, 

17 processes, manufactures, distributes, mer18 chandises, or markets goods, services, or 

19 commodities (which shall include but not 

20 be limited to coal, natural gas, electricity, 

21 ethanol, crude oil, gasoline, propane, dis22 tillates, and other hydrocarbons) either in23 dividually or in a fiduciary capacity. 

24 ‘‘(ii) FINANCIAL ENTITY.—The term 

25 ‘financial entity’ means— 


sroberts on DSKH9S0YB1PROD with BILLS
579 

•S 3217 AMDT 3739 

1 ‘‘(I) a swap dealer, major swap 

2 participant, security-based swap deal3 er, or major security-based swap par4 ticipant; 

5 ‘‘(II) a person predominantly en6 gaged in activities that are in the 

7 business of banking or financial in na8 ture, as defined in Section 4(k) of the 

9 Bank Holding Company Act of 1956; 

10 ‘‘(III) a person predominantly 

11 engaged in activities that are financial 

12 in nature; 

13 ‘‘(IV) a commodity pool or a pri14 vate fund as defined in section 202(a) 

15 of the Investment Advisers Act of 

16 1940 (15 U.S.C. 80b–2(a)); or 

17 ‘‘(V) a person that is registered 

18 or required to be registered with the 

19 Commission. 

20 ‘‘(B) END USER CLEARING EXEMPTION.— 

21 ‘‘(i) IN GENERAL.—Subject to clause 

22 (ii), in the event that a swap is subject to 

23 the mandatory clearing requirement under 

24 paragraph (1), and 1 of the counterparties 


sroberts on DSKH9S0YB1PROD with BILLS
580 

•S 3217 AMDT 3739 

1 to the swap is a commercial end user, that 

2 counterparty— 

3 ‘‘(I)(aa) may elect not to clear 

4 the swap, as required under para5 graph (1); or 

6 ‘‘(bb) may elect to require clear7 ing of the swap; and 

8 ‘‘(II) if the end user makes an 

9 election under subclause (I)(bb), shall 

10 have the sole right to select the de11 rivatives clearing organization at 

12 which the swap will be cleared. 

13 ‘‘(ii) LIMITATION.—A commercial end 

14 user may only make an election under 

15 clause (i) if the end user is using the swap 

16 to hedge its own commercial risk. 

17 ‘‘(C) TREATMENT OF AFFILIATES.— 

18 ‘‘(i) IN GENERAL.—An affiliate of a 

19 commercial end user (including affiliate en20 tities predominantly engaged in providing 

21 financing for the purchase of the merchan22 dise or manufactured goods of the com23 mercial end user) may make an election 

24 under subparagraph (B)(i) only if the affil25 iate, acting on behalf of the commercial 


sroberts on DSKH9S0YB1PROD with BILLS
581 

•S 3217 AMDT 3739 

1 end user and as an agent, uses the swap 

2 to hedge or mitigate the commercial risk of 

3 the commercial end user parent or other 

4 affiliate of the commercial end user that is 

5 not a financial entity. 

6 ‘‘(ii) PROHIBITION RELATING TO CER7 TAIN AFFILIATES.—An affiliate of a com8 mercial end user shall not use the exemp9 tion under subparagraph (B) if the affil10 iate is— 

11 ‘‘(I) a swap dealer; 

12 ‘‘(II) a security-based swap deal13 er; 

14 ‘‘(III) a major swap participant; 

15 ‘‘(IV) a major security-based 

16 swap participant; 

17 ‘‘(V) an issuer that would be an 

18 investment company, as defined in 

19 section 3 of the Investment Company 

20 Act of 1940 (15 U.S.C. 80a–3), but 

21 for paragraph (1) or (7) of subsection 

22 (c) of that Act (15 U.S.C. 80a–3(c)); 

23 ‘‘(VI) a commodity pool; 


sroberts on DSKH9S0YB1PROD with BILLS
582 

•S 3217 AMDT 3739 

1 ‘‘(VII) a bank holding company 

2 with over $50,000,000,000 in consoli3 dated assets; or 

4 ‘‘(VIII) an affiliate of any entity 

5 described in subclauses (I) through 

6 (VII). 

7 ‘‘(D) ABUSE OF EXEMPTION.—The Com8 mission may prescribe such rules or issue inter9 pretations of the rules as the Commission deter10 mines to be necessary to prevent abuse of the 

11 exemption described in subparagraph (B). The 

12 Commission may also request information from 

13 those entities claiming the clearing exemption 

14 as necessary to prevent abuse of the exemption 

15 described in subparagraph (B). 

16 ‘‘(E) OPTION TO CLEAR.— 

17 ‘‘(i) SWAPS REQUIRED TO BE

18 CLEARED ENTERED INTO WITH A FINAN19 CIAL ENTITY.—With respect to any swap 

20 that is required to be cleared by a deriva21 tives clearing organization and entered into 

22 by a swap dealer or a major swap partici23 pant with a financial entity, the financial 

24 entity shall have the sole right to select the 


sroberts on DSKH9S0YB1PROD with BILLS
583 

•S 3217 AMDT 3739 

1 derivatives clearing organization at which 

2 the swap will be cleared. 

3 ‘‘(ii) SWAPS NOT REQUIRED TO BE

4 CLEARED ENTERED INTO WITH A FINAN5 CIAL ENTITY OR COMMERCIAL END

6 USER.—With respect to any swap that is 

7 not required to be cleared by a derivatives 

8 clearing organization and entered into by a 

9 swap dealer or a major swap participant 

10 with a financial entity or commercial end 

11 user, the financial entity or commercial 

12 end user— 

13 ‘‘(I) may elect to require clearing 

14 of the swap; and 

15 ‘‘(II) shall have the sole right to 

16 select the derivatives clearing organi17 zation at which the swap will be 

18 cleared.’’. 

19 (b) COMMODITY EXCHANGE ACT.—Section 2 of the 

20 Commodity Exchange Act (7 U.S.C. 2) is amended by 

21 adding at the end the following: 

22 ‘‘(j) AUDIT COMMITTEE APPROVAL.—Exemptions 

23 from the requirements of subsection (h)(2)(F) to clear a 

24 swap and subsection (b) to trade a swap through a board 

25 of trade or swap execution facility shall be available to 


sroberts on DSKH9S0YB1PROD with BILLS
584 

•S 3217 AMDT 3739 

1 a counterparty that is an issuer of securities that are reg2 istered under section 12 of the Securities Exchange Act 

3 of 1934 (15 U.S.C. 78l) or that is required to file reports 

4 pursuant to section 15(d) of the Securities Exchange Act 

5 of 1934 (15 U.S.C. 78o) only if the issuer’s audit com6 mittee has reviewed and approved its decision to enter into 

7 swaps that are subject to such exemptions.’’. 

8 (c) GRANDFATHER PROVISIONS.— 

9 (1) LEGAL CERTAINTY FOR CERTAIN TRANS10 ACTIONS IN EXEMPT COMMODITIES.—Not later than 

11 60 days after the date of enactment of this Act, a 

12 person may submit to the Commodity Futures Trad13 ing Commission a petition to remain subject to sec14 tion 2(h) of the Commodity Exchange Act (7 U.S.C. 

15 2(h)) (as in effect on the day before the date of en16 actment of this Act). 

17 (2) CONSIDERATION; AUTHORITY OF COM18 MODITY FUTURES TRADING COMMISSION.—The 

19 Commodity Futures Trading Commission— 

20 (A) shall consider any petition submitted 

21 under subparagraph (A) in a prompt manner; 

22 and 

23 (B) may allow a person to continue oper24 ating subject to section 2(h) of the Commodity 

25 Exchange Act (7 U.S.C. 2(h)) (as in effect on 


sroberts on DSKH9S0YB1PROD with BILLS
585 

•S 3217 AMDT 3739 

1 the day before the date of enactment of this 

2 Act) for not longer than a 1-year period. 

3 (3) AGRICULTURAL SWAPS.— 

4 (A) IN GENERAL.—Except as provided in 

5 paragraph (2), no person shall offer to enter 

6 into, enter into, or confirm the execution of, 

7 any swap in an agricultural commodity (as de8 fined by the Commodity Futures Trading Com9 mission). 

10 (B) EXCEPTION.—Notwithstanding para11 graph (1), a person may offer to enter into, 

12 enter into, or confirm the execution of, any 

13 swap in an agricultural commodity pursuant to 

14 section 4(c) of the Commodity Exchange Act (7 

15 U.S.C. 6(c)) or any rule, regulation, or order 

16 issued thereunder (including any rule, regula17 tion, or order in effect as of the date of enact18 ment of this Act) by the Commodity Futures 

19 Trading Commission to allow swaps under such 

20 terms and conditions as the Commission shall 

21 prescribe. 

22 (4) REQUIRED REPORTING.—If the exception 

23 described in paragraph (2) applies, and there is no 

24 facility that makes the swap available to trade, the 

25 counterparties shall comply with any recordkeeping 


sroberts on DSKH9S0YB1PROD with BILLS
586 

•S 3217 AMDT 3739 

1 and transaction reporting requirements that may be 

2 prescribed by the Commission with respect to swaps 

3 subject to the requirements of paragraph (1). 

4 SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREAT5 MENT. 

6 (a) SEGREGATION REQUIREMENTS FOR CLEARED

7 SWAPS.—Section 4d of the Commodity Exchange Act (7 

8 U.S.C. 6d) (as amended by section 732) is amended by 

9 adding at the end the following: 

10 ‘‘(f) SWAPS.— 

11 ‘‘(1) REGISTRATION REQUIREMENT.—It shall 

12 be unlawful for any person to accept any money, se13 curities, or property (or to extend any credit in lieu 

14 of money, securities, or property) from, for, or on 

15 behalf of a swaps customer to margin, guarantee, or 

16 secure a swap cleared by or through a derivatives 

17 clearing organization (including money, securities, or 

18 property accruing to the customer as the result of 

19 such a swap), unless the person shall have registered 

20 under this Act with the Commission as a futures 

21 commission merchant, and the registration shall not 

22 have expired nor been suspended nor revoked. 

23 ‘‘(2) CLEARED SWAPS.— 

24 ‘‘(A) SEGREGATION REQUIRED.—A futures 

25 commission merchant shall treat and deal with 


sroberts on DSKH9S0YB1PROD with BILLS
587 

•S 3217 AMDT 3739 

1 all money, securities, and property of any swaps 

2 customer received to margin, guarantee, or se3 cure a swap cleared by or though a derivatives 

4 clearing organization (including money, securi5 ties, or property accruing to the swaps cus6 tomer as the result of such a swap) as belong7 ing to the swaps customer. 

8 ‘‘(B) COMMINGLING PROHIBITED.—Money, 

9 securities, and property of a swaps customer 

10 described in subparagraph (A) shall be sepa11 rately accounted for and shall not be commin12 gled with the funds of the futures commission 

13 merchant or be used to margin, secure, or guar14 antee any trades or contracts of any swaps cus15 tomer or person other than the person for 

16 whom the same are held. 

17 ‘‘(3) EXCEPTIONS.— 

18 ‘‘(A) USE OF FUNDS.— 

19 ‘‘(i) IN GENERAL.—Notwithstanding 

20 paragraph (2), money, securities, and 

21 property of a swaps customer of a futures 

22 commission merchant described in para23 graph (2) may, for convenience, be com24 mingled and deposited in the same 1 or 

25 more accounts with any bank or trust comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00587 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
588 

•S 3217 AMDT 3739 

1 pany or with a derivatives clearing organi2 zation. 

3 ‘‘(ii) WITHDRAWAL.—Notwithstanding 

4 paragraph (2), such share of the money, 

5 securities, and property described in clause 

6 (i) as in the normal course of business 

7 shall be necessary to margin, guarantee, 

8 secure, transfer, adjust, or settle a cleared 

9 swap with a derivatives clearing organiza10 tion, or with any member of the derivatives 

11 clearing organization, may be withdrawn 

12 and applied to such purposes, including the 

13 payment of commissions, brokerage, inter14 est, taxes, storage, and other charges, law15 fully accruing in connection with the 

16 cleared swap. 

17 ‘‘(B) COMMISSION ACTION.—Notwith18 standing paragraph (2), in accordance with 

19 such terms and conditions as the Commission 

20 may prescribe by rule, regulation, or order, any 

21 money, securities, or property of the swaps cus22 tomer of a futures commission merchant de23 scribed in paragraph (2) may be commingled 

24 and deposited as provided in this section with 

25 any other money, securities, or property reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00588 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
589 

•S 3217 AMDT 3739 

1 ceived by the futures commission merchant and 

2 required by the Commission to be separately ac3 counted for and treated and dealt with as be4 longing to the swaps customer of the futures 

5 commission merchant. 

6 ‘‘(4) PERMITTED INVESTMENTS.—Money de7 scribed in paragraph (2) may be invested in obliga8 tions of the United States, in general obligations of 

9 any State or of any political subdivision of a State, 

10 and in obligations fully guaranteed as to principal 

11 and interest by the United States, or in any other 

12 investment that the Commission may by rule or reg13 ulation prescribe, and such investments shall be 

14 made in accordance with such rules and regulations 

15 and subject to such conditions as the Commission 

16 may prescribe. 

17 ‘‘(5) COMMODITY CONTRACT.—A swap cleared 

18 by or through a derivatives clearing organization 

19 shall be considered to be a commodity contract as 

20 such term is defined in section 761 of title 11, 

21 United States Code, with regard to all money, secu22 rities, and property of any swaps customer received 

23 by a futures commission merchant or a derivatives 

24 clearing organization to margin, guarantee, or se25 cure the swap (including money, securities, or propVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00589 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
590 

•S 3217 AMDT 3739 

1 erty accruing to the customer as the result of the 

2 swap). 

3 ‘‘(6) PROHIBITION.—It shall be unlawful for 

4 any person, including any derivatives clearing orga5 nization and any depository institution, that has re6 ceived any money, securities, or property for deposit 

7 in a separate account or accounts as provided in 

8 paragraph (2) to hold, dispose of, or use any such 

9 money, securities, or property as belonging to the 

10 depositing futures commission merchant or any per11 son other than the swaps customer of the futures 

12 commission merchant.’’. 

13 (b) BANKRUPTCY TREATMENT OF CLEARED

14 SWAPS.—Section 761 of title 11, United States Code, is 

15 amended— 

16 (1) in paragraph (4), by striking subparagraph 

17 (F) and inserting the following: 

18 ‘‘(F)(i) any other contract, option, agree19 ment, or transaction that is similar to a con20 tract, option, agreement, or transaction referred 

21 to in this paragraph; and 

22 ‘‘(ii) with respect to a futures commission 

23 merchant or a clearing organization, any other 

24 contract, option, agreement, or transaction, in 


sroberts on DSKH9S0YB1PROD with BILLS
591 

•S 3217 AMDT 3739 

1 each case, that is cleared by a clearing organi2 zation;’’; and 

3 (2) in paragraph (9)(A)(i), by striking ‘‘the 

4 commodity futures account’’ and inserting ‘‘a com5 modity contract account’’. 

6 (c) SEGREGATION REQUIREMENTS FOR UNCLEARED

7 SWAPS.—Section 4s of the Commodity Exchange Act (as 

8 added by section 731) is amended by adding at the end 

9 the following: 

10 ‘‘(l) SEGREGATION REQUIREMENTS.— 

11 ‘‘(1) SEGREGATION OF ASSETS HELD AS COL12 LATERAL IN UNCLEARED SWAP TRANSACTIONS.— 

13 ‘‘(A) NOTIFICATION.—A swap dealer or 

14 major swap participant shall be required to no15 tify the counterparty of the swap dealer or 

16 major swap participant at the beginning of a 

17 swap transaction that the counterparty has the 

18 right to require segregation of the funds or 

19 other property supplied to margin, guarantee, 

20 or secure the obligations of the counterparty. 

21 ‘‘(B) SEGREGATION AND MAINTENANCE OF

22 FUNDS.—At the request of a counterparty to a 

23 swap that provides funds or other property to 

24 a swap dealer or major swap participant to 

25 margin, guarantee, or secure the obligations of 


sroberts on DSKH9S0YB1PROD with BILLS
592 

•S 3217 AMDT 3739 

1 the counterparty, the swap dealer or major 

2 swap participant shall— 

3 ‘‘(i) segregate the funds or other 

4 property for the benefit of the 

5 counterparty; and 

6 ‘‘(ii) in accordance with such rules 

7 and regulations as the Commission may 

8 promulgate, maintain the funds or other 

9 property in a segregated account separate 

10 from the assets and other interests of the 

11 swap dealer or major swap participant. 

12 ‘‘(2) APPLICABILITY.—The requirements de13 scribed in paragraph (1) shall— 

14 ‘‘(A) apply only to a swap between a 

15 counterparty and a swap dealer or major swap 

16 participant that is not submitted for clearing to 

17 a derivatives clearing organization; and 

18 ‘‘(B)(i) not apply to variation margin pay19 ments; or 

20 ‘‘(ii) not preclude any commercial arrange21 ment regarding— 

22 ‘‘(I) the investment of segregated 

23 funds or other property that may only be 

24 invested in such investments as the ComVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00592 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
593 

•S 3217 AMDT 3739 

1 mission may permit by rule or regulation; 

2 and 

3 ‘‘(II) the related allocation of gains 

4 and losses resulting from any investment 

5 of the segregated funds or other property. 

6 ‘‘(3) USE OF INDEPENDENT THIRD-PARTY

7 CUSTODIANS.—The segregated account described in 

8 paragraph (1) shall be— 

9 ‘‘(A) carried by an independent third-party 

10 custodian; and 

11 ‘‘(B) designated as a segregated account 

12 for and on behalf of the counterparty. 

13 ‘‘(4) REPORTING REQUIREMENT.—If the 

14 counterparty does not choose to require segregation 

15 of the funds or other property supplied to margin, 

16 guarantee, or secure the obligations of the 

17 counterparty, the swap dealer or major swap partici18 pant shall report to the counterparty of the swap 

19 dealer or major swap participant on a quarterly 

20 basis that the back office procedures of the swap 

21 dealer or major swap participant relating to margin 

22 and collateral requirements are in compliance with 

23 the agreement of the counterparties.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
594 

•S 3217 AMDT 3739 

1 SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS. 

2 (a) REGISTRATION REQUIREMENT.—Section 5b of 

3 the Commodity Exchange Act (7 U.S.C. 7a–1) is amended 

4 by striking subsections (a) and (b) and inserting the fol5 lowing: 

6 ‘‘(a) REGISTRATION REQUIREMENT.— 

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), it shall be unlawful for a derivatives 

9 clearing organization, directly or indirectly, to make 

10 use of the mails or any means or instrumentality of 

11 interstate commerce to perform the functions of a 

12 derivatives clearing organization with respect to— 

13 ‘‘(A) a contract of sale of a commodity for 

14 future delivery (or an option on the contract of 

15 sale) or option on a commodity, in each case, 

16 unless the contract or option is— 

17 ‘‘(i) excluded from this Act by sub18 section (a)(1)(C)(i), (c), or (f) of section 2; 

19 or 

20 ‘‘(ii) a security futures product 

21 cleared by a clearing agency registered 

22 with the Securities and Exchange Commis23 sion under the Securities Exchange Act of 

24 1934 (15 U.S.C. 78a et seq.); or 

25 ‘‘(B) a swap. 


sroberts on DSKH9S0YB1PROD with BILLS
595 

•S 3217 AMDT 3739 

1 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

2 apply to a derivatives clearing organization that is 

3 registered with the Commission. 

4 ‘‘(b) VOLUNTARY REGISTRATION.—A person that 

5 clears 1 or more agreements, contracts, or transactions 

6 that are not required to be cleared under this Act may 

7 register with the Commission as a derivatives clearing or8 ganization.’’. 

9 (b) REGISTRATION FOR DEPOSITORY INSTITUTIONS

10 AND CLEARING AGENCIES; EXEMPTIONS; COMPLIANCE

11 OFFICER; ANNUAL REPORTS.—Section 5b of the Com12 modity Exchange Act (7 U.S.C. 7a–1) is amended by add13 ing at the end the following: 

14 ‘‘(g) REQUIRED REGISTRATION FOR DEPOSITORY IN15 STITUTIONS AND CLEARING AGENCIES.—A person that is 

16 required to be registered as a derivatives clearing organi17 zation under this section shall register with the Commis18 sion regardless of whether the person is also licensed as 

19 a depository institution (as that term is defined in section 

20 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) 

21 or a clearing agency registered with the Securities and Ex22 change Commission under the Securities Exchange Act of 

23 1934 (15 U.S.C. 78a et seq.). 

24 ‘‘(h) EXISTING DEPOSITORY INSTITUTIONS AND

25 CLEARING AGENCIES.— 


sroberts on DSKH9S0YB1PROD with BILLS
596 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—A depository institution or 

2 clearing agency registered with the Securities and 

3 Exchange Commission under the Securities Ex4 change Act of 1934 (15 U.S.C. 78a et seq.) that is 

5 required to be registered as a derivatives clearing or6 ganization under this section is deemed to be reg7 istered under this section to the extent that, before 

8 the date of enactment of this subsection— 

9 ‘‘(A) the depository institution cleared 

10 swaps as a multilateral clearing organization; or 

11 ‘‘(B) the clearing agency cleared swaps. 

12 ‘‘(2) CONVERSION OF DEPOSITORY INSTITU13 TIONS.—A depository institution to which this para14 graph applies may, by the vote of the shareholders 

15 owning not less than 51 percent of the voting inter16 ests of the depository institution, be converted into 

17 a State corporation, partnership, limited liability 

18 company, or similar legal form pursuant to a plan 

19 of conversion, if the conversion is not in contraven20 tion of applicable State law. 

21 ‘‘(i) EXEMPTIONS.—The Commission may exempt, 

22 conditionally or unconditionally, a derivatives clearing or23 ganization from registration under this section for the 

24 clearing of swaps if the Commission determines that the 

25 derivatives clearing organization is subject to comparable, 


sroberts on DSKH9S0YB1PROD with BILLS
597 

•S 3217 AMDT 3739 

1 comprehensive supervision and regulation by the Securi2 ties and Exchange Commission or the appropriate govern3 ment authorities in the home country of the organization. 

4 Such conditions may include, but are not limited to, re5 quiring that the derivatives clearing organization be avail6 able for inspection by the Commission and make available 

7 all information requested by the Commission. 

8 ‘‘(j) DESIGNATION OF CHIEF COMPLIANCE OFFI9 CER.— 

10 ‘‘(1) IN GENERAL.—Each derivatives clearing 

11 organization shall designate an individual to serve as 

12 a chief compliance officer. 

13 ‘‘(2) DUTIES.—The chief compliance officer 

14 shall— 

15 ‘‘(A) report directly to the board or to the 

16 senior officer of the derivatives clearing organi17 zation; 

18 ‘‘(B) review the compliance of the deriva19 tives clearing organization with respect to the 

20 core principles described in subsection (c)(2); 

21 ‘‘(C) in consultation with the board of the 

22 derivatives clearing organization, a body per23 forming a function similar to the board of the 

24 derivatives clearing organization, or the senior 


sroberts on DSKH9S0YB1PROD with BILLS
598 

•S 3217 AMDT 3739 

1 officer of the derivatives clearing organization, 

2 resolve any conflicts of interest that may arise; 

3 ‘‘(D) be responsible for administering each 

4 policy and procedure that is required to be es5 tablished pursuant to this section; 

6 ‘‘(E) ensure compliance with this Act (in7 cluding regulations) relating to agreements, 

8 contracts, or transactions, including each rule 

9 prescribed by the Commission under this sec10 tion; 

11 ‘‘(F) establish procedures for the remedi12 ation of noncompliance issues identified by the 

13 compliance officer through any— 

14 ‘‘(i) compliance office review; 

15 ‘‘(ii) look-back; 

16 ‘‘(iii) internal or external audit find17 ing; 

18 ‘‘(iv) self-reported error; or 

19 ‘‘(v) validated complaint; and 

20 ‘‘(G) establish and follow appropriate pro21 cedures for the handling, management response, 

22 remediation, retesting, and closing of non23 compliance issues. 

24 ‘‘(3) ANNUAL REPORTS.— 


sroberts on DSKH9S0YB1PROD with BILLS
599 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—In accordance with 

2 rules prescribed by the Commission, the chief 

3 compliance officer shall annually prepare and 

4 sign a report that contains a description of— 

5 ‘‘(i) the compliance of the derivatives 

6 clearing organization of the compliance of7 ficer with respect to this Act (including 

8 regulations); and 

9 ‘‘(ii) each policy and procedure of the 

10 derivatives clearing organization of the 

11 compliance officer (including the code of 

12 ethics and conflict of interest policies of 

13 the derivatives clearing organization). 

14 ‘‘(B) REQUIREMENTS.—A compliance re15 port under subparagraph (A) shall— 

16 ‘‘(i) accompany each appropriate fi17 nancial report of the derivatives clearing 

18 organization that is required to be fur19 nished to the Commission pursuant to this 

20 section; and 

21 ‘‘(ii) include a certification that, under 

22 penalty of law, the compliance report is ac23 curate and complete.’’. 

24 (c) CORE PRINCIPLES FOR DERIVATIVES CLEARING

25 ORGANIZATIONS.—Section 5b(c) of the Commodity ExVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00599 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
600 

•S 3217 AMDT 3739 

1 change Act (7 U.S.C. 7a–1(c)) is amended by striking 

2 paragraph (2) and inserting the following: 

3 ‘‘(2) CORE PRINCIPLES FOR DERIVATIVES

4 CLEARING ORGANIZATIONS.— 

5 ‘‘(A) COMPLIANCE.— 

6 ‘‘(i) IN GENERAL.—To be registered 

7 and to maintain registration as a deriva8 tives clearing organization, a derivatives 

9 clearing organization shall comply with 

10 each core principle described in this para11 graph and any requirement that the Com12 mission may impose by rule or regulation 

13 pursuant to section 8a(5). 

14 ‘‘(ii) DISCRETION OF DERIVATIVES

15 CLEARING ORGANIZATION.—Subject to any 

16 rule or regulation prescribed by the Com17 mission, a derivatives clearing organization 

18 shall have reasonable discretion in estab19 lishing the manner by which the derivatives 

20 clearing organization complies with each 

21 core principle described in this paragraph. 

22 ‘‘(B) FINANCIAL RESOURCES.— 

23 ‘‘(i) IN GENERAL.—Each derivatives 

24 clearing organization shall have adequate 

25 financial, operational, and managerial reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00600 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
601 

•S 3217 AMDT 3739 

1 sources, as determined by the Commission, 

2 to discharge each responsibility of the de3 rivatives clearing organization. 

4 ‘‘(ii) MINIMUM AMOUNT OF FINAN5 CIAL RESOURCES.—Each derivatives clear6 ing organization shall possess financial re7 sources that, at a minimum, exceed the 

8 total amount that would— 

9 ‘‘(I) enable the organization to 

10 meet its financial obligations to its 

11 members and participants notwith12 standing a default by the member or 

13 participant creating the largest finan14 cial exposure for that organization in 

15 extreme but plausible market condi16 tions; and 

17 ‘‘(II) enable the derivatives clear18 ing organization to cover the oper19 ating costs of the derivatives clearing 

20 organization for a period of 1 year (as 

21 calculated on a rolling basis). 

22 ‘‘(C) PARTICIPANT AND PRODUCT ELIGI23 BILITY.— 

24 ‘‘(i) IN GENERAL.—Each derivatives 

25 clearing organization shall establish— 


sroberts on DSKH9S0YB1PROD with BILLS
602 

•S 3217 AMDT 3739 

1 ‘‘(I) appropriate admission and 

2 continuing eligibility standards (in3 cluding sufficient financial resources 

4 and operational capacity to meet obli5 gations arising from participation in 

6 the derivatives clearing organization) 

7 for members of, and participants in, 

8 the derivatives clearing organization; 

9 and 

10 ‘‘(II) appropriate standards for 

11 determining the eligibility of agree12 ments, contracts, and transactions 

13 submitted to the derivatives clearing 

14 organization for clearing. 

15 ‘‘(ii) REQUIRED PROCEDURES.—Each 

16 derivatives clearing organization shall es17 tablish and implement procedures to verify, 

18 on an ongoing basis, the compliance of 

19 each participation and membership re20 quirement of the derivatives clearing orga21 nization. 

22 ‘‘(iii) REQUIREMENTS.—The partici23 pation and membership requirements of 

24 each derivatives clearing organization 

25 shall— 


sroberts on DSKH9S0YB1PROD with BILLS
603 

•S 3217 AMDT 3739 

1 ‘‘(I) be objective; 

2 ‘‘(II) be publicly disclosed; and 

3 ‘‘(III) permit fair and open ac4 cess. 

5 ‘‘(D) RISK MANAGEMENT.— 

6 ‘‘(i) IN GENERAL.—Each derivatives 

7 clearing organization shall ensure that the 

8 derivatives clearing organization possesses 

9 the ability to manage the risks associated 

10 with discharging the responsibilities of the 

11 derivatives clearing organization through 

12 the use of appropriate tools and proce13 dures. 

14 ‘‘(ii) MEASUREMENT OF CREDIT EX15 POSURE.—Each derivatives clearing orga16 nization shall— 

17 ‘‘(I) not less than once during 

18 each business day of the derivatives 

19 clearing organization, measure the 

20 credit exposures of the derivatives 

21 clearing organization to each member 

22 and participant of the derivatives 

23 clearing organization; and 

24 ‘‘(II) monitor each exposure de25 scribed in subclause (I) periodically 


sroberts on DSKH9S0YB1PROD with BILLS
604 

•S 3217 AMDT 3739 

1 during the business day of the deriva2 tives clearing organization. 

3 ‘‘(iii) LIMITATION OF EXPOSURE TO

4 POTENTIAL LOSSES FROM DEFAULTS.— 

5 Each derivatives clearing organization, 

6 through margin requirements and other 

7 risk control mechanisms, shall limit the ex8 posure of the derivatives clearing organiza9 tion to potential losses from defaults by 

10 members and participants of the deriva11 tives clearing organization to ensure that— 

12 ‘‘(I) the operations of the deriva13 tives clearing organization would not 

14 be disrupted; and 

15 ‘‘(II) nondefaulting members or 

16 participants would not be exposed to 

17 losses that nondefaulting members or 

18 participants cannot anticipate or con19 trol. 

20 ‘‘(iv) MARGIN REQUIREMENTS.—The 

21 margin required from each member and 

22 participant of a derivatives clearing organi23 zation shall be sufficient to cover potential 

24 exposures in normal market conditions. 


sroberts on DSKH9S0YB1PROD with BILLS
605 

•S 3217 AMDT 3739 

1 ‘‘(v) REQUIREMENTS REGARDING

2 MODELS AND PARAMETERS.—Each model 

3 and parameter used in setting margin re4 quirements under clause (iv) shall be— 

5 ‘‘(I) risk-based; and 

6 ‘‘(II) reviewed on a regular basis. 

7 ‘‘(E) SETTLEMENT PROCEDURES.—Each 

8 derivatives clearing organization shall— 

9 ‘‘(i) complete money settlements on a 

10 timely basis (but not less frequently than 

11 once each business day); 

12 ‘‘(ii) employ money settlement ar13 rangements to eliminate or strictly limit 

14 the exposure of the derivatives clearing or15 ganization to settlement bank risks (in16 cluding credit and liquidity risks from the 

17 use of banks to effect money settlements); 

18 ‘‘(iii) ensure that money settlements 

19 are final when effected; 

20 ‘‘(iv) maintain an accurate record of 

21 the flow of funds associated with each 

22 money settlement; 

23 ‘‘(v) possess the ability to comply with 

24 each term and condition of any permitted 


sroberts on DSKH9S0YB1PROD with BILLS
606 

•S 3217 AMDT 3739 

1 netting or offset arrangement with any 

2 other clearing organization; 

3 ‘‘(vi) regarding physical settlements, 

4 establish rules that clearly state each obli5 gation of the derivatives clearing organiza6 tion with respect to physical deliveries; and 

7 ‘‘(vii) ensure that each risk arising 

8 from an obligation described in clause (vi) 

9 is identified and managed. 

10 ‘‘(F) TREATMENT OF FUNDS.— 

11 ‘‘(i) REQUIRED STANDARDS AND PRO12 CEDURES.—Each derivatives clearing orga13 nization shall establish standards and pro14 cedures that are designed to protect and 

15 ensure the safety of member and partici16 pant funds and assets. 

17 ‘‘(ii) HOLDING OF FUNDS AND AS18 SETS.—Each derivatives clearing organiza19 tion shall hold member and participant 

20 funds and assets in a manner by which to 

21 minimize the risk of loss or of delay in the 

22 access by the derivatives clearing organiza23 tion to the assets and funds. 

24 ‘‘(iii) PERMISSIBLE INVESTMENTS.— 

25 Funds and assets invested by a derivatives 


sroberts on DSKH9S0YB1PROD with BILLS
607 

•S 3217 AMDT 3739 

1 clearing organization shall be held in in2 struments with minimal credit, market, 

3 and liquidity risks. 

4 ‘‘(G) DEFAULT RULES AND PROCE5 DURES.— 

6 ‘‘(i) IN GENERAL.—Each derivatives 

7 clearing organization shall have rules and 

8 procedures designed to allow for the effi9 cient, fair, and safe management of events 

10 during which members or participants— 

11 ‘‘(I) become insolvent; or 

12 ‘‘(II) otherwise default on the ob13 ligations of the members or partici14 pants to the derivatives clearing orga15 nization. 

16 ‘‘(ii) DEFAULT PROCEDURES.—Each 

17 derivatives clearing organization shall— 

18 ‘‘(I) clearly state the default pro19 cedures of the derivatives clearing or20 ganization; 

21 ‘‘(II) make publicly available the 

22 default rules of the derivatives clear23 ing organization; and 


sroberts on DSKH9S0YB1PROD with BILLS
608 

•S 3217 AMDT 3739 

1 ‘‘(III) ensure that the derivatives 

2 clearing organization may take timely 

3 action— 

4 ‘‘(aa) to contain losses and 

5 liquidity pressures; and 

6 ‘‘(bb) to continue meeting 

7 each obligation of the derivatives 

8 clearing organization. 

9 ‘‘(H) RULE ENFORCEMENT.—Each deriva10 tives clearing organization shall— 

11 ‘‘(i) maintain adequate arrangements 

12 and resources for— 

13 ‘‘(I) the effective monitoring and 

14 enforcement of compliance with the 

15 rules of the derivatives clearing orga16 nization; and 

17 ‘‘(II) the resolution of disputes; 

18 ‘‘(ii) have the authority and ability to 

19 discipline, limit, suspend, or terminate the 

20 activities of a member or participant due 

21 to a violation by the member or participant 

22 of any rule of the derivatives clearing orga23 nization; and 

24 ‘‘(iii) report to the Commission re25 garding rule enforcement activities and 


sroberts on DSKH9S0YB1PROD with BILLS
609 

•S 3217 AMDT 3739 

1 sanctions imposed against members and 

2 participants as provided in clause (ii). 

3 ‘‘(I) SYSTEM SAFEGUARDS.—Each deriva4 tives clearing organization shall— 

5 ‘‘(i) establish and maintain a program 

6 of risk analysis and oversight to identify 

7 and minimize sources of operational risk 

8 through the development of appropriate 

9 controls and procedures, and automated 

10 systems, that are reliable, secure, and have 

11 adequate scalable capacity; 

12 ‘‘(ii) establish and maintain emer13 gency procedures, backup facilities, and a 

14 plan for disaster recovery that allows for— 

15 ‘‘(I) the timely recovery and re16 sumption of operations of the deriva17 tives clearing organization; and 

18 ‘‘(II) the fulfillment of each obli19 gation and responsibility of the de20 rivatives clearing organization; and 

21 ‘‘(iii) periodically conduct tests to 

22 verify that the backup resources of the de23 rivatives clearing organization are suffi24 cient to ensure daily processing, clearing, 

25 and settlement. 


sroberts on DSKH9S0YB1PROD with BILLS
610 

•S 3217 AMDT 3739 

1 ‘‘(J) REPORTING.—Each derivatives clear2 ing organization shall provide to the Commis3 sion all information that the Commission deter4 mines to be necessary to conduct oversight of 

5 the derivatives clearing organization. 

6 ‘‘(K) RECORDKEEPING.—Each derivatives 

7 clearing organization shall maintain records of 

8 all activities related to the business of the de9 rivatives clearing organization as a derivatives 

10 clearing organization— 

11 ‘‘(i) in a form and manner that is ac12 ceptable to the Commission; and 

13 ‘‘(ii) for a period of not less than 5 

14 years. 

15 ‘‘(L) PUBLIC INFORMATION.— 

16 ‘‘(i) IN GENERAL.—Each derivatives 

17 clearing organization shall provide to mar18 ket participants sufficient information to 

19 enable the market participants to identify 

20 and evaluate accurately the risks and costs 

21 associated with using the services of the 

22 derivatives clearing organization. 

23 ‘‘(ii) AVAILABILITY OF INFORMA24 TION.—Each derivatives clearing organiza25 tion shall make information concerning the 


sroberts on DSKH9S0YB1PROD with BILLS
611 

•S 3217 AMDT 3739 

1 rules and operating procedures governing 

2 the clearing and settlement systems of the 

3 derivatives clearing organization available 

4 to market participants. 

5 ‘‘(iii) PUBLIC DISCLOSURE.—Each de6 rivatives clearing organization shall dis7 close publicly and to the Commission infor8 mation concerning— 

9 ‘‘(I) the terms and conditions of 

10 each contract, agreement, and other 

11 transaction cleared and settled by the 

12 derivatives clearing organization; 

13 ‘‘(II) each clearing and other fee 

14 that the derivatives clearing organiza15 tion charges the members and partici16 pants of the derivatives clearing orga17 nization; 

18 ‘‘(III) the margin-setting method19 ology, and the size and composition, 

20 of the financial resource package of 

21 the derivatives clearing organization; 

22 ‘‘(IV) daily settlement prices, vol23 ume, and open interest for each con24 tract settled or cleared by the deriva25 tives clearing organization; and 


sroberts on DSKH9S0YB1PROD with BILLS
612 

•S 3217 AMDT 3739 

1 ‘‘(V) any other matter relevant to 

2 participation in the settlement and 

3 clearing activities of the derivatives 

4 clearing organization. 

5 ‘‘(M) INFORMATION-SHARING.—Each de6 rivatives clearing organization shall— 

7 ‘‘(i) enter into, and abide by the terms 

8 of, each appropriate and applicable domes9 tic and international information-sharing 

10 agreement; and 

11 ‘‘(ii) use relevant information obtained 

12 from each agreement described in clause 

13 (i) in carrying out the risk management 

14 program of the derivatives clearing organi15 zation. 

16 ‘‘(N) ANTITRUST CONSIDERATIONS.—Un17 less necessary or appropriate to achieve the 

18 purposes of this Act, a derivatives clearing or19 ganization shall not— 

20 ‘‘(i) adopt any rule or take any action 

21 that results in any unreasonable restraint 

22 of trade; or 

23 ‘‘(ii) impose any material anticompeti24 tive burden. 


sroberts on DSKH9S0YB1PROD with BILLS
613 

•S 3217 AMDT 3739 

1 ‘‘(O) GOVERNANCE FITNESS STAND2 ARDS.— 

3 ‘‘(i) GOVERNANCE ARRANGEMENTS.— 

4 Each derivatives clearing organization shall 

5 establish governance arrangements that 

6 are transparent— 

7 ‘‘(I) to fulfill public interest re8 quirements; and 

9 ‘‘(II) to support the objectives of 

10 owners and participants. 

11 ‘‘(ii) FITNESS STANDARDS.—Each de12 rivatives clearing organization shall estab13 lish and enforce appropriate fitness stand14 ards for— 

15 ‘‘(I) directors; 

16 ‘‘(II) members of any disciplinary 

17 committee; 

18 ‘‘(III) members of the derivatives 

19 clearing organization; 

20 ‘‘(IV) any other individual or en21 tity with direct access to the settle22 ment or clearing activities of the de23 rivatives clearing organization; and 


sroberts on DSKH9S0YB1PROD with BILLS
614 

•S 3217 AMDT 3739 

1 ‘‘(V) any party affiliated with 

2 any individual or entity described in 

3 this clause. 

4 ‘‘(P) CONFLICTS OF INTEREST.—Each de5 rivatives clearing organization shall— 

6 ‘‘(i) establish and enforce rules to 

7 minimize conflicts of interest in the deci8 sion-making process of the derivatives 

9 clearing organization; and 

10 ‘‘(ii) establish a process for resolving 

11 conflicts of interest described in clause (i). 

12 ‘‘(Q) COMPOSITION OF GOVERNING

13 BOARDS.—Each derivatives clearing organiza14 tion shall ensure that the composition of the 

15 governing board or committee of the derivatives 

16 clearing organization includes market partici17 pants. 

18 ‘‘(R) LEGAL RISK.—Each derivatives clear19 ing organization shall have a well-founded, 

20 transparent, and enforceable legal framework 

21 for each aspect of the activities of the deriva22 tives clearing organization. 

23 ‘‘(S) MODIFICATION OF CORE PRIN24 CIPLES.—The Commission may conform the 

25 core principles established in this paragraph to 


sroberts on DSKH9S0YB1PROD with BILLS
615 

•S 3217 AMDT 3739 

1 reflect evolving United States and international 

2 standards.’’. 

3 (d) CONFLICTS OF INTEREST.—The Commodity Fu4 tures Trading Commission shall adopt rules mitigating 

5 conflicts of interest in connection with the conduct of busi6 ness by a swap dealer or a major swap participant with 

7 a derivatives clearing organization, board of trade, or a 

8 swap execution facility that clears or trades swaps in 

9 which the swap dealer or major swap participant has a 

10 material debt or material equity investment. 

11 (e) REPORTING REQUIREMENTS.—Section 5b of the 

12 Commodity Exchange Act (7 U.S.C. 7a–1) (as amended 

13 by subsection (b)) is amended by adding at the end the 

14 following: 

15 ‘‘(k) REPORTING REQUIREMENTS.— 

16 ‘‘(1) DUTY OF DERIVATIVES CLEARING ORGANI17 ZATIONS.—Each derivatives clearing organization 

18 that clears swaps shall provide to the Commission all 

19 information that is determined by the Commission to 

20 be necessary to perform each responsibility of the 

21 Commission under this Act. 

22 ‘‘(2) DATA COLLECTION AND MAINTENANCE

23 REQUIREMENTS.—The Commission shall adopt data 

24 collection and maintenance requirements for swaps 


sroberts on DSKH9S0YB1PROD with BILLS
616 

•S 3217 AMDT 3739 

1 cleared by derivatives clearing organizations that are 

2 comparable to the corresponding requirements for— 

3 ‘‘(A) swaps data reported to swap data re4 positories; and 

5 ‘‘(B) swaps traded on swap execution fa6 cilities. 

7 ‘‘(3) REPORTS ON SECURITY-BASED SWAP

8 AGREEMENTS TO BE SHARED WITH THE SECURITIES

9 AND EXCHANGE COMMISSION.— 

10 ‘‘(A) IN GENERAL.—A derivatives clearing 

11 organization that clears security-based swap 

12 agreements (as defined in section 3(a)(79) of 

13 the Securities Exchange Act) shall, upon re14 quest, make available to the Securities and Ex15 change Commission all books and records relat16 ing to such security-based swap agreements, 

17 consistent with the confidentiality and disclo18 sure requirements of section 8. 

19 ‘‘(B) JURISDICTION.—Nothing in this 

20 paragraph shall affect the exclusive jurisdiction 

21 of the Commission to prescribe recordkeeping 

22 and reporting requirements for a derivatives 

23 clearing organization that is registered with the 

24 Commission.’’ 


sroberts on DSKH9S0YB1PROD with BILLS
617 

•S 3217 AMDT 3739 

1 ‘‘(4) INFORMATION SHARING.—Subject to sec2 tion 8, and upon request, the Commission shall 

3 share information collected under paragraph (2) 

4 with— 

5 ‘‘(A) the Board; 

6 ‘‘(B) the Securities and Exchange Commis7 sion; 

8 ‘‘(C) each appropriate prudential regulator; 

9 ‘‘(D) the Financial Stability Oversight 

10 Council; 

11 ‘‘(E) the Department of Justice; and 

12 ‘‘(F) any other person that the Commis13 sion determines to be appropriate, including— 

14 ‘‘(i) foreign financial supervisors (in15 cluding foreign futures authorities); 

16 ‘‘(ii) foreign central banks; and 

17 ‘‘(iii) foreign ministries. 

18 ‘‘(5) CONFIDENTIALITY AND INDEMNIFICATION

19 AGREEMENT.—Before the Commission may share in20 formation with any entity described in paragraph 

21 (4)— 

22 ‘‘(A) the Commission shall receive a writ23 ten agreement from each entity stating that the 

24 entity shall abide by the confidentiality require25 ments described in section 8 relating to the inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00617 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
618 

•S 3217 AMDT 3739 

1 formation on swap transactions that is pro2 vided; and 

3 ‘‘(B) each entity shall agree to indemnify 

4 the Commission for any expenses arising from 

5 litigation relating to the information provided 

6 under section 8. 

7 ‘‘(6) PUBLIC INFORMATION.—Each derivatives 

8 clearing organization that clears swaps shall provide 

9 to the Commission (including any designee of the 

10 Commission) information under paragraph (2) in 

11 such form and at such frequency as is required by 

12 the Commission to comply with the public reporting 

13 requirements contained in section 2(a)(13).’’. 

14 (f) PUBLIC DISCLOSURE.—Section 8(e) of the Com15 modity Exchange Act (7 U.S.C. 12(e)) is amended in the 

16 last sentence— 

17 (1) by inserting ‘‘, central bank and min18 istries,’’ after ‘‘department’’ each place it appears; 

19 and 

20 (2) by striking ‘‘. is a party.’’ and inserting ‘‘, 

21 is a party.’’. 

22 (g) LEGAL CERTAINTY FOR IDENTIFIED BANKING

23 PRODUCTS.— 


sroberts on DSKH9S0YB1PROD with BILLS
619 

•S 3217 AMDT 3739 

1 (1) REPEALS.—The Legal Certainty for Bank 

2 Products Act of 2000 (7 U.S.C. 27 et seq.) is 

3 amended— 

4 (A) by striking sections 404 and 407 (7 

5 U.S.C. 27b, 27e); 

6 (B) in section 402 (7 U.S.C. 27), by strik7 ing subsection (d); and 

8 (C) in section 408 (7 U.S.C. 27f)— 

9 (i) in subsection (c)— 

10 (I) by striking ‘‘in the case’’ and 

11 all that follows through ‘‘a hybrid’’ 

12 and inserting ‘‘in the case of a hy13 brid’’; 

14 (II) by striking ‘‘; or’’ and insert15 ing a period; and 

16 (III) by striking paragraph (2); 

17 (ii) by striking subsection (b); and 

18 (iii) by redesignating subsection (c) as 

19 subsection (b). 

20 (2) LEGAL CERTAINTY FOR BANK PRODUCTS

21 ACT OF 2000.—Section 403 of the Legal Certainty 

22 for Bank Products Act of 2000 (7 U.S.C. 27a) is 

23 amended to read as follows: 


sroberts on DSKH9S0YB1PROD with BILLS
620 

•S 3217 AMDT 3739 

1 ‘‘SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT. 

2 ‘‘(a) EXCLUSION.—Except as provided in subsection 

3 (b) or (c)— 

4 ‘‘(1) the Commodity Exchange Act (7 U.S.C. 1 

5 et seq.) shall not apply to, and the Commodity Fu6 tures Trading Commission shall not exercise regu7 latory authority under the Commodity Exchange Act 

8 (7 U.S.C. 1 et seq.) with respect to, an identified 

9 banking product; and 

10 ‘‘(2) the definitions of ‘security-based swap’ in 

11 section 3(a)(68) of the Securities Exchange Act of 

12 1934 and ‘security-based swap agreement’ in section 

13 3(a)(79) of the Securities Exchange Act of 1934 do 

14 not include any identified bank product. 

15 ‘‘(b) EXCEPTION.—An appropriate Federal banking 

16 agency may except an identified banking product of a 

17 bank under its regulatory jurisdiction from the exclusion 

18 in subsection (a) if the agency determines, in consultation 

19 with the Commodity Futures Trading Commission and the 

20 Securities and Exchange Commission, that the product— 

21 ‘‘(1) would meet the definition of a ‘swap’ 

22 under section 1a(46) of the Commodity Exchange 

23 Act (7 U.S.C. 1a) or a ‘security-based swap’ under 

24 that section 3(a)(68) of the Securities Exchange Act 

25 of 1934; and 


sroberts on DSKH9S0YB1PROD with BILLS
621 

•S 3217 AMDT 3739 

1 ‘‘(2) has become known to the trade as a swap 

2 or security-based swap, or otherwise has been struc3 tured as an identified banking product for the pur4 pose of evading the provisions of the Commodity Ex5 change Act (7 U.S.C. 1 et seq.), the Securities Act 

6 of 1933 (15 U.S.C. 77a et seq.), or the Securities 

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

8 ‘‘(c) EXCEPTION.—The exclusions in subsection (a) 

9 shall not apply to an identified bank product that— 

10 ‘‘(1) is a product of a bank that is not under 

11 the regulatory jurisdiction of an appropriate Federal 

12 banking agency; 

13 ‘‘(2) meets the definition of swap in section 

14 1a(46) of the Commodity Exchange Act or security15 based swap in section 3(a)(68) of the Securities Ex16 change Act of 1934; and 

17 ‘‘(3) has become known to the trade as a swap 

18 or security-based swap, or otherwise has been struc19 tured as an identified banking product for the pur20 pose of evading the provisions of the Commodity Ex21 change Act (7 U.S.C. 1 et seq.), the Securities Act 

22 of 1933 (15 U.S.C. 77a et seq.), or the Securities 

23 Exchange Act of 1934 (15 U.S.C. 78a et seq.).’’. 


sroberts on DSKH9S0YB1PROD with BILLS
622 

•S 3217 AMDT 3739 

1 SEC. 726. RULEMAKING ON CONFLICT OF INTEREST. 

2 (a) IN GENERAL.—Not later than 180 days after the 

3 date of enactment of the Wall Street Transparency and 

4 Accountability Act of 2010, the Commodity Futures Trad5 ing Commission shall determine whether to adopt rules to 

6 establish limits on the control of any derivatives clearing 

7 organization that clears swaps, or swap execution facility 

8 or board of trade designated as a contract market that 

9 posts swaps or makes swaps available for trading, by a 

10 bank holding company (as defined in section 2 of the Bank 

11 Holding Company Act of 1956 (12 U.S.C. 1841)) with 

12 total consolidated assets of $50,000,000,000 or more, a 

13 nonbank financial company (as defined in section 102) su14 pervised by the Board of Governors of the Federal Reserve 

15 System, an affiliate of such a bank holding company or 

16 nonbank financial company, a swap dealer, major swap 

17 participant, or associated person of a swap dealer or major 

18 swap participant. 

19 (b) PURPOSES.—The Commission shall adopt rules if 

20 it determines, after the review described in subsection (a), 

21 that such rules are necessary or appropriate to improve 

22 the governance of, or to mitigate systemic risk, promote 

23 competition, or mitigate conflicts of interest in connection 

24 with a swap dealer or major swap participant’s conduct 

25 of business with, a derivatives clearing organization, con26 tract market, or swap execution facility that clears or 


sroberts on DSKH9S0YB1PROD with BILLS
623 

•S 3217 AMDT 3739 

1 posts swaps or makes swaps available for trading and in 

2 which such swap dealer or major swap participant has a 

3 material debt or equity investment. 

4 SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION 

5 DATA. 

6 Section 2(a) of the Commodity Exchange Act (7 

7 U.S.C. 2(a)) is amended by adding at the end the fol8 lowing: 

9 ‘‘(13) PUBLIC AVAILABILITY OF SWAP TRANS10 ACTION DATA.— 

11 ‘‘(A) DEFINITION OF REAL-TIME PUBLIC

12 REPORTING.—In this paragraph, the term ‘real13 time public reporting’ means to report data re14 lating to a swap transaction as soon as techno15 logically practicable after the time at which the 

16 swap transaction has been executed. 

17 ‘‘(B) PURPOSE.—The purpose of this sec18 tion is to authorize the Commission to make 

19 swap transaction and pricing data available to 

20 the public in such form and at such times as 

21 the Commission determines appropriate to en22 hance price discovery. 

23 ‘‘(C) GENERAL RULE.—The Commission is 

24 authorized and required to provide by rule for 


sroberts on DSKH9S0YB1PROD with BILLS
624 

•S 3217 AMDT 3739 

1 the public availability of swap transaction and 

2 pricing data as follows: 

3 ‘‘(i) With respect to those swaps that 

4 are subject to the mandatory clearing re5 quirement described in subsection (h)(2) 

6 (including those swaps that are exempted 

7 from the requirement pursuant to sub8 section (h)(10)), the Commission shall re9 quire real-time public reporting for such 

10 transactions. 

11 ‘‘(ii) With respect to those swaps that 

12 are not subject to the mandatory clearing 

13 requirement described in subsection (h)(2), 

14 but are cleared at a registered derivatives 

15 clearing organization, the Commission 

16 shall require real-time public reporting for 

17 such transactions. 

18 ‘‘(iii) With respect to swaps that are 

19 not cleared at a registered derivatives 

20 clearing organization and which are re21 ported to a swap data repository or the 

22 Commission under subsection (h), the 

23 Commission shall make available to the 

24 public, in a manner that does not disclose 

25 the business transactions and market posiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00624 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
625 

•S 3217 AMDT 3739 

1 tions of any person, aggregate data on 

2 such swap trading volumes and positions. 

3 ‘‘(iv) With respect to swaps that are 

4 exempt from the requirements of sub5 section (h)(1), pursuant to subsection 

6 (h)(10), the Commission shall require real7 time public reporting for such transactions. 

8 ‘‘(D) REGISTERED ENTITIES AND PUBLIC

9 REPORTING.—The Commission may require 

10 registered entities to publicly disseminate the 

11 swap transaction and pricing data required to 

12 be reported under this paragraph. 

13 ‘‘(E) RULEMAKING REQUIRED.—With re14 spect to the rule providing for the public avail15 ability of transaction and pricing data for 

16 swaps described in clauses (i) and (ii) of sub17 paragraph (C), the rule promulgated by the 

18 Commission shall contain provisions— 

19 ‘‘(i) to ensure such information does 

20 not identify the participants; 

21 ‘‘(ii) to specify the criteria for deter22 mining what constitutes a large notional 

23 swap transaction (block trade) for par24 ticular markets and contracts; 


sroberts on DSKH9S0YB1PROD with BILLS
626 

•S 3217 AMDT 3739 

1 ‘‘(iii) to specify the appropriate time 

2 delay for reporting large notional swap 

3 transactions (block trades) to the public; 

4 and 

5 ‘‘(iv) that take into account whether 

6 the public disclosure will materially reduce 

7 market liquidity. 

8 ‘‘(F) TIMELINESS OF REPORTING.—Par9 ties to a swap (including agents of the parties 

10 to a swap) shall be responsible for reporting 

11 swap transaction information to the appropriate 

12 registered entity in a timely manner as may be 

13 prescribed by the Commission. 

14 ‘‘(14) SEMIANNUAL AND ANNUAL PUBLIC RE15 PORTING OF AGGREGATE SWAP DATA.— 

16 ‘‘(A) IN GENERAL.—In accordance with 

17 subparagraph (B), the Commission shall issue a 

18 written report on a semiannual and annual 

19 basis to make available to the public informa20 tion relating to— 

21 ‘‘(i) the trading and clearing in the 

22 major swap categories; and 

23 ‘‘(ii) the market participants and de24 velopments in new products. 


sroberts on DSKH9S0YB1PROD with BILLS
627 

•S 3217 AMDT 3739 

1 ‘‘(B) USE; CONSULTATION.—In preparing 

2 a report under subparagraph (A), the Commis3 sion shall— 

4 ‘‘(i) use information from swap data 

5 repositories and derivatives clearing orga6 nizations; and 

7 ‘‘(ii) consult with the Office of the 

8 Comptroller of the Currency, the Bank for 

9 International Settlements, and such other 

10 regulatory bodies as may be necessary.’’. 

11 SEC. 728. SWAP DATA REPOSITORIES. 

12 The Commodity Exchange Act is amended by insert13 ing after section 20 (7 U.S.C. 24) the following: 

14 ‘‘SEC. 21. SWAP DATA REPOSITORIES. 

15 ‘‘(a) REGISTRATION REQUIREMENT.— 

16 ‘‘(1) IN GENERAL.—It shall be unlawful for any 

17 person, unless registered with the Commission, di18 rectly or indirectly to make use of the mails or any 

19 means or instrumentality of interstate commerce to 

20 perform the functions of a swap data repository. 

21 ‘‘(2) INSPECTION AND EXAMINATION.—Each 

22 registered swap data repository shall be subject to 

23 inspection and examination by any representative of 

24 the Commission. 

25 ‘‘(3) COMPLIANCE WITH CORE PRINCIPLES.— 


sroberts on DSKH9S0YB1PROD with BILLS
628 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—To be registered, and 

2 maintain registration, as a swap data reposi3 tory, the swap data repository shall comply 

4 with— 

5 ‘‘(i) the core principles described in 

6 this subsection; and 

7 ‘‘(ii) any requirement that the Com8 mission may impose by rule or regulation 

9 pursuant to section 8a(5). 

10 ‘‘(B) REASONABLE DISCRETION OF SWAP

11 DATA REPOSITORY.—Unless otherwise deter12 mined by the Commission by rule or regulation, 

13 a swap data repository described in subpara14 graph (A) shall have reasonable discretion in 

15 establishing the manner in which the swap data 

16 repository complies with the core principles de17 scribed in this subsection. 

18 ‘‘(b) STANDARD SETTING.— 

19 ‘‘(1) DATA IDENTIFICATION.—The Commission 

20 shall prescribe standards that specify the data ele21 ments for each swap that shall be collected and 

22 maintained by each registered swap data repository. 

23 ‘‘(2) DATA COLLECTION AND MAINTENANCE.— 

24 The Commission shall prescribe data collection and 


sroberts on DSKH9S0YB1PROD with BILLS
629 

•S 3217 AMDT 3739 

1 data maintenance standards for swap data reposi2 tories. 

3 ‘‘(3) COMPARABILITY.—The standards pre4 scribed by the Commission under this subsection 

5 shall be comparable to the data standards imposed 

6 by the Commission on derivatives clearing organiza7 tions in connection with their clearing of swaps. 

8 ‘‘(4) SHARING OF INFORMATION WITH SECURI9 TIES AND EXCHANGE COMMISSION.—Registered 

10 swap data repositories shall make available to the 

11 Securities and Exchange Commission, upon request, 

12 all books and records relating to security-based swap 

13 agreements that are maintained by such swap data 

14 repository, consistent with the confidentiality and 

15 disclosure requirements of section 8. Nothing in this 

16 paragraph shall affect the exclusive jurisdiction of 

17 the Commission to prescribe recordkeeping and re18 porting requirements for a swap data repository that 

19 is registered with the Commission. 

20 ‘‘(c) DUTIES.—A swap data repository shall— 

21 ‘‘(1) accept data prescribed by the Commission 

22 for each swap under subsection (b); 

23 ‘‘(2) confirm with both counterparties to the 

24 swap the accuracy of the data that was submitted; 


sroberts on DSKH9S0YB1PROD with BILLS
630 

•S 3217 AMDT 3739 

1 ‘‘(3) maintain the data described in paragraph 

2 (1) in such form, in such manner, and for such pe3 riod as may be required by the Commission; 

4 ‘‘(4)(A) provide direct electronic access to the 

5 Commission (or any designee of the Commission, in6 cluding another registered entity); and 

7 ‘‘(B) provide the information described in para8 graph (1) in such form and at such frequency as the 

9 Commission may require to comply with the public 

10 reporting requirements contained in section 

11 2(a)(13); 

12 ‘‘(5) at the direction of the Commission, estab13 lish automated systems for monitoring, screening, 

14 and analyzing swap data, including compliance and 

15 frequency of end user clearing exemption claims by 

16 individual and affiliated entities; 

17 ‘‘(6) maintain the privacy of any and all swap 

18 transaction information that the swap data reposi19 tory receives from a swap dealer, counterparty, or 

20 any other registered entity; and 

21 ‘‘(7) on a confidential basis pursuant to section 

22 8, upon request, and after notifying the Commission 

23 of the request, make available all data obtained by 

24 the swap data repository, including individual 

25 counterparty trade and position data, to— 


sroberts on DSKH9S0YB1PROD with BILLS
631 

•S 3217 AMDT 3739 

1 ‘‘(A) each appropriate prudential regulator; 

2 ‘‘(B) the Financial Stability Oversight 

3 Council; 

4 ‘‘(C) the Securities and Exchange Commis5 sion; 

6 ‘‘(D) the Department of Justice; and 

7 ‘‘(E) any other person that the Commis8 sion determines to be appropriate, including— 

9 ‘‘(i) foreign financial supervisors (in10 cluding foreign futures authorities); 

11 ‘‘(ii) foreign central banks; 

12 ‘‘(iii) foreign ministries; and 

13 ‘‘(8) establish and maintain emergency proce14 dures, backup facilities, and a plan for disaster re15 covery that allows for the timely recovery and re16 sumption of operations and the fulfillment of the re17 sponsibilities and obligations of the organization. 

18 ‘‘(d) CONFIDENTIALITY AND INDEMNIFICATION

19 AGREEMENT.—Before the swap data repository may share 

20 information with any entity described above— 

21 ‘‘(1) the swap data repository shall receive a 

22 written agreement from each entity stating that the 

23 entity shall abide by the confidentiality requirements 

24 described in section 8 relating to the information on 

25 swap transactions that is provided; and 


sroberts on DSKH9S0YB1PROD with BILLS
632 

•S 3217 AMDT 3739 

1 ‘‘(2) each entity shall agree to indemnify the 

2 swap data repository and the Commission for any 

3 expenses arising from litigation relating to the infor4 mation provided under section 8. 

5 ‘‘(e) DESIGNATION OF CHIEF COMPLIANCE OFFI6 CER.— 

7 ‘‘(1) IN GENERAL.—Each swap data repository 

8 shall designate an individual to serve as a chief com9 pliance officer. 

10 ‘‘(2) DUTIES.—The chief compliance officer 

11 shall— 

12 ‘‘(A) report directly to the board or to the 

13 senior officer of the swap data repository; 

14 ‘‘(B) review the compliance of the swap 

15 data repository with respect to the core prin16 ciples described in subsection (f); 

17 ‘‘(C) in consultation with the board of the 

18 swap data repository, a body performing a func19 tion similar to the board of the swap data re20 pository, or the senior officer of the swap data 

21 repository, resolve any conflicts of interest that 

22 may arise; 

23 ‘‘(D) be responsible for administering each 

24 policy and procedure that is required to be es25 tablished pursuant to this section; 


sroberts on DSKH9S0YB1PROD with BILLS
633 

•S 3217 AMDT 3739 

1 ‘‘(E) ensure compliance with this Act (in2 cluding regulations) relating to agreements, 

3 contracts, or transactions, including each rule 

4 prescribed by the Commission under this sec5 tion; 

6 ‘‘(F) establish procedures for the remedi7 ation of noncompliance issues identified by the 

8 chief compliance officer through any— 

9 ‘‘(i) compliance office review; 

10 ‘‘(ii) look-back; 

11 ‘‘(iii) internal or external audit find12 ing; 

13 ‘‘(iv) self-reported error; or 

14 ‘‘(v) validated complaint; and 

15 ‘‘(G) establish and follow appropriate pro16 cedures for the handling, management response, 

17 remediation, retesting, and closing of non18 compliance issues. 

19 ‘‘(3) ANNUAL REPORTS.— 

20 ‘‘(A) IN GENERAL.—In accordance with 

21 rules prescribed by the Commission, the chief 

22 compliance officer shall annually prepare and 

23 sign a report that contains a description of— 

24 ‘‘(i) the compliance of the swap data 

25 repository of the chief compliance officer 


sroberts on DSKH9S0YB1PROD with BILLS
634 

•S 3217 AMDT 3739 

1 with respect to this Act (including regula2 tions); and 

3 ‘‘(ii) each policy and procedure of the 

4 swap data repository of the chief compli5 ance officer (including the code of ethics 

6 and conflict of interest policies of the swap 

7 data repository). 

8 ‘‘(B) REQUIREMENTS.—A compliance re9 port under subparagraph (A) shall— 

10 ‘‘(i) accompany each appropriate fi11 nancial report of the swap data repository 

12 that is required to be furnished to the 

13 Commission pursuant to this section; and 

14 ‘‘(ii) include a certification that, under 

15 penalty of law, the compliance report is ac16 curate and complete. 

17 ‘‘(f) CORE PRINCIPLES APPLICABLE TO SWAP DATA

18 REPOSITORIES.— 

19 ‘‘(1) ANTITRUST CONSIDERATIONS.—Unless 

20 necessary or appropriate to achieve the purposes of 

21 this Act, a swap data repository shall not 

22 ‘‘(A) adopt any rule or take any action 

23 that results in any unreasonable restraint of 

24 trade; or 


sroberts on DSKH9S0YB1PROD with BILLS
635 

•S 3217 AMDT 3739 

1 ‘‘(B) impose any material anticompetitive 

2 burden on the trading, clearing, or reporting of 

3 transactions. 

4 ‘‘(2) GOVERNANCE ARRANGEMENTS.—Each 

5 swap data repository shall establish governance ar6 rangements that are transparent— 

7 ‘‘(A) to fulfill public interest requirements; 

8 and 

9 ‘‘(B) to support the objectives of the Fed10 eral Government, owners, and participants. 

11 ‘‘(3) CONFLICTS OF INTEREST.—Each swap 

12 data repository shall— 

13 ‘‘(A) establish and enforce rules to mini14 mize conflicts of interest in the decision-making 

15 process of the swap data repository; and 

16 ‘‘(B) establish a process for resolving con17 flicts of interest described in subparagraph (A). 

18 ‘‘(g) REQUIRED REGISTRATION FOR SWAP DATA RE19 POSITORIES.—Any person that is required to be registered 

20 as a swap data repository under this section shall register 

21 with the Commission regardless of whether that person is 

22 also licensed as a bank or registered with the Securities 

23 and Exchange Commission as a swap data repository. 

24 ‘‘(h) RULES.—The Commission shall adopt rules gov25 erning persons that are registered under this section.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
636 

•S 3217 AMDT 3739 

1 SEC. 729. REPORTING AND RECORDKEEPING. 

2 The Commodity Exchange Act is amended by insert3 ing after section 4q (7 U.S.C. 6o-1) the following: 

4 ‘‘SEC. 4r. REPORTING AND RECORDKEEPING FOR 

5 UNCLEARED SWAPS. 

6 ‘‘(a) REQUIRED REPORTING OF SWAPS NOT ACCEPT7 ED BY ANY DERIVATIVES CLEARING ORGANIZATION.— 

8 ‘‘(1) IN GENERAL.—Each swap that is not ac9 cepted for clearing by any derivatives clearing orga10 nization shall be reported to— 

11 ‘‘(A) a swap data repository described in 

12 section 21; or 

13 ‘‘(B) in the case in which there is no swap 

14 data repository that would accept the swap, to 

15 the Commission pursuant to this section within 

16 such time period as the Commission may by 

17 rule or regulation prescribe. 

18 ‘‘(2) TRANSITION RULE FOR PREENACTMENT

19 SWAPS.— 

20 ‘‘(A) SWAPS ENTERED INTO BEFORE THE

21 DATE OF ENACTMENT OF THE WALL STREET

22 TRANSPARENCY AND ACCOUNTABILITY ACT OF

23 2010.—Each swap entered into before the date 

24 of enactment of the Wall Street Transparency 

25 and Accountability Act of 2010, the terms of 

26 which have not expired as of the date of enactVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00636 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
637 

•S 3217 AMDT 3739 

1 ment of that Act, shall be reported to a reg2 istered swap data repository or the Commission 

3 by a date that is not later than— 

4 ‘‘(i) 30 days after issuance of the in5 terim final rule; or 

6 ‘‘(ii) such other period as the Com7 mission determines to be appropriate. 

8 ‘‘(B) COMMISSION RULEMAKING.—The 

9 Commission shall promulgate an interim final 

10 rule within 90 days of the date of enactment of 

11 this section providing for the reporting of each 

12 swap entered into before the date of enactment 

13 as referenced in subparagraph (A). 

14 ‘‘(C) EFFECTIVE DATE.—The reporting 

15 provisions described in this section shall be ef16 fective upon the enactment of this section. 

17 ‘‘(3) REPORTING OBLIGATIONS.— 

18 ‘‘(A) SWAPS IN WHICH ONLY 1

19 COUNTERPARTY IS A SWAP DEALER OR MAJOR

20 SWAP PARTICIPANT.—With respect to a swap in 

21 which only 1 counterparty is a swap dealer or 

22 major swap participant, the swap dealer or 

23 major swap participant shall report the swap as 

24 required under paragraphs (1) and (2). 


sroberts on DSKH9S0YB1PROD with BILLS
638 

•S 3217 AMDT 3739 

1 ‘‘(B) SWAPS IN WHICH 1 COUNTERPARTY

2 IS A SWAP DEALER AND THE OTHER A MAJOR

3 SWAP PARTICIPANT.—With respect to a swap in 

4 which 1 counterparty is a swap dealer and the 

5 other a major swap participant, the swap dealer 

6 shall report the swap as required under para7 graphs (1) and (2). 

8 ‘‘(C) OTHER SWAPS.—With respect to any 

9 other swap not described in subparagraph (A) 

10 or (B), the counterparties to the swap shall se11 lect a counterparty to report the swap as re12 quired under paragraphs (1) and (2). 

13 ‘‘(b) DUTIES OF CERTAIN INDIVIDUALS.—Any indi14 vidual or entity that enters into a swap shall meet each 

15 requirement described in subsection (c) if the individual 

16 or entity did not— 

17 ‘‘(1) clear the swap in accordance with section 

18 2(h)(1); or 

19 ‘‘(2) have the data regarding the swap accepted 

20 by a swap data repository in accordance with rules 

21 (including timeframes) adopted by the Commission 

22 under section 21. 

23 ‘‘(c) REQUIREMENTS.—An individual or entity de24 scribed in subsection (b) shall— 


sroberts on DSKH9S0YB1PROD with BILLS
639 

•S 3217 AMDT 3739 

1 ‘‘(1) upon written request from the Commis2 sion, provide reports regarding the swaps held by the 

3 individual or entity to the Commission in such form 

4 and in such manner as the Commission may request; 

5 and 

6 ‘‘(2) maintain books and records pertaining to 

7 the swaps held by the individual or entity in such 

8 form, in such manner, and for such period as the 

9 Commission may require, which shall be open to in10 spection by— 

11 ‘‘(A) any representative of the Commis12 sion; 

13 ‘‘(B) an appropriate prudential regulator; 

14 ‘‘(C) the Securities and Exchange Commis15 sion; 

16 ‘‘(D) the Financial Stability Oversight 

17 Council; and 

18 ‘‘(E) the Department of Justice. 

19 ‘‘(d) IDENTICAL DATA.—In prescribing rules under 

20 this section, the Commission shall require individuals and 

21 entities described in subsection (b) to submit to the Com22 mission a report that contains data that is not less com23 prehensive than the data required to be collected by swap 

24 data repositories under section 21.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
640 

•S 3217 AMDT 3739 

1 SEC. 730. LARGE SWAP TRADER REPORTING. 

2 The Commodity Exchange Act (7 U.S.C. 1 et seq.) 

3 is amended by adding after section 4s (as added by section 

4 731) the following: 

5 ‘‘SEC. 4t. LARGE SWAP TRADER REPORTING. 

6 ‘‘(a) PROHIBITION.— 

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), it shall be unlawful for any person to 

9 enter into any swap that the Commission determines 

10 to perform a significant price discovery function with 

11 respect to registered entities if— 

12 ‘‘(A) the person directly or indirectly en13 ters into the swap during any 1 day in an 

14 amount equal to or in excess of such amount as 

15 shall be established periodically by the Commis16 sion; and 

17 ‘‘(B) the person directly or indirectly has 

18 or obtains a position in the swap equal to or in 

19 excess of such amount as shall be established 

20 periodically by the Commission. 

21 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

22 apply if— 

23 ‘‘(A) the person files or causes to be filed 

24 with the properly designated officer of the Com25 mission such reports regarding any transactions 

26 or positions described in subparagraphs (A) and 


sroberts on DSKH9S0YB1PROD with BILLS
641 

•S 3217 AMDT 3739 

1 (B) of paragraph (1) as the Commission may 

2 require by rule or regulation; and 

3 ‘‘(B) in accordance with the rules and reg4 ulations of the Commission, the person keeps 

5 books and records of all such swaps and any 

6 transactions and positions in any related com7 modity traded on or subject to the rules of any 

8 board of trade, and of cash or spot transactions 

9 in, inventories of, and purchase and sale com10 mitments of, such a commodity. 

11 ‘‘(b) REQUIREMENTS.— 

12 ‘‘(1) IN GENERAL.—Books and records de13 scribed in subsection (a)(2)(B) shall— 

14 ‘‘(A) show such complete details con15 cerning all transactions and positions as the 

16 Commission may prescribe by rule or regula17 tion; 

18 ‘‘(B) be open at all times to inspection and 

19 examination by any representative of the Com20 mission; and 

21 ‘‘(C) be open at all times to inspection and 

22 examination by the Securities and Exchange 

23 Commission, to the extent such books and 

24 records relate to transactions in security-based 

25 swap agreements (as that term is defined in 


sroberts on DSKH9S0YB1PROD with BILLS
642 

•S 3217 AMDT 3739 

1 section 3(a)(79) of the Securities Exchange Act 

2 of 1934), and consistent with the confidentiality 

3 and disclosure requirements of section 8. 

4 ‘‘(2) JURISDICTION.—Nothing in paragraph (1) 

5 shall affect the exclusive jurisdiction of the Commis6 sion to prescribe recordkeeping and reporting re7 quirements for large swap traders under this section. 

8 ‘‘(c) APPLICABILITY.—For purposes of this section, 

9 the swaps, futures, and cash or spot transactions and posi10 tions of any person shall include the swaps, futures, and 

11 cash or spot transactions and positions of any persons di12 rectly or indirectly controlled by the person. 

13 ‘‘(d) SIGNIFICANT PRICE DISCOVERY FUNCTION.— 

14 In making a determination as to whether a swap performs 

15 or affects a significant price discovery function with re16 spect to registered entities, the Commission shall consider 

17 the factors described in section 4a(a)(3).’’. 

18 SEC. 731. REGISTRATION AND REGULATION OF SWAP DEAL19 ERS AND MAJOR SWAP PARTICIPANTS. 

20 The Commodity Exchange Act (7 U.S.C. 1 et seq.) 

21 is amended by inserting after section 4r (as added by sec22 tion 729) the following: 

23 ‘‘SEC. 4s. REGISTRATION AND REGULATION OF SWAP DEAL24 ERS AND MAJOR SWAP PARTICIPANTS. 

25 ‘‘(a) REGISTRATION.— 


sroberts on DSKH9S0YB1PROD with BILLS
643 

•S 3217 AMDT 3739 

1 ‘‘(1) SWAP DEALERS.—It shall be unlawful for 

2 any person to act as a swap dealer unless the person 

3 is registered as a swap dealer with the Commission. 

4 ‘‘(2) MAJOR SWAP PARTICIPANTS.—It shall be 

5 unlawful for any person to act as a major swap par6 ticipant unless the person is registered as a major 

7 swap participant with the Commission. 

8 ‘‘(b) REQUIREMENTS.— 

9 ‘‘(1) IN GENERAL.—A person shall register as 

10 a swap dealer or major swap participant by filing a 

11 registration application with the Commission. 

12 ‘‘(2) CONTENTS.— 

13 ‘‘(A) IN GENERAL.—The application shall 

14 be made in such form and manner as prescribed 

15 by the Commission, and shall contain such in16 formation, as the Commission considers nec17 essary concerning the business in which the ap18 plicant is or will be engaged. 

19 ‘‘(B) CONTINUAL REPORTING.—A person 

20 that is registered as a swap dealer or major 

21 swap participant shall continue to submit to the 

22 Commission reports that contain such informa23 tion pertaining to the business of the person as 

24 the Commission may require. 


sroberts on DSKH9S0YB1PROD with BILLS
644 

•S 3217 AMDT 3739 

1 ‘‘(3) EXPIRATION.—Each registration under 

2 this section shall expire at such time as the Commis3 sion may prescribe by rule or regulation. 

4 ‘‘(4) RULES.—Except as provided in sub5 sections (c), (e), and (f), the Commission may pre6 scribe rules applicable to non-bank swap dealers and 

7 non-bank major swap participants, including rules 

8 that limit the activities of swap dealers and major 

9 swap participants. 

10 ‘‘(5) TRANSITION.—Rules under this section 

11 shall provide for the registration of swap dealers and 

12 major swap participants not later than 1 year after 

13 the date of enactment of the Wall Street Trans14 parency and Accountability Act of 2010. 

15 ‘‘(6) STATUTORY DISQUALIFICATION.—Except 

16 to the extent otherwise specifically provided by rule, 

17 regulation, or order, it shall be unlawful for a swap 

18 dealer or a major swap participant to permit any 

19 person associated with a swap dealer or a major 

20 swap participant who is subject to a statutory dis21 qualification to effect or be involved in effecting 

22 swaps on behalf of the swap dealer or major swap 

23 participant, if the swap dealer or major swap partici24 pant knew, or in the exercise of reasonable care 

25 should have known, of the statutory disqualification. 


sroberts on DSKH9S0YB1PROD with BILLS
645 

•S 3217 AMDT 3739 

1 ‘‘(c) DUAL REGISTRATION.— 

2 ‘‘(1) SWAP DEALER.—Any person that is re3 quired to be registered as a swap dealer under this 

4 section shall register with the Commission regardless 

5 of whether the person also is a depository institution 

6 or is registered with the Securities and Exchange 

7 Commission as a security-based swap dealer. 

8 ‘‘(2) MAJOR SWAP PARTICIPANT.—Any person 

9 that is required to be registered as a major swap 

10 participant under this section shall register with the 

11 Commission regardless of whether the person also is 

12 a depository institution or is registered with the Se13 curities and Exchange Commission as a major secu14 rity-based swap participant. 

15 ‘‘(d) RULEMAKINGS.— 

16 ‘‘(1) IN GENERAL.—The Commission shall 

17 adopt rules for persons that are registered as swap 

18 dealers or major swap participants under this sec19 tion. 

20 ‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIRE21 MENTS.— 

22 ‘‘(A) IN GENERAL.—The Commission may 

23 not prescribe rules imposing prudential require24 ments on swap dealers or major swap partici25 pants for which there is a prudential regulator. 


sroberts on DSKH9S0YB1PROD with BILLS
646 

•S 3217 AMDT 3739 

1 ‘‘(B) APPLICABILITY.—Subparagraph (A) 

2 does not limit the authority of the Commission 

3 to prescribe appropriate business conduct, re4 porting, and recordkeeping requirements to pro5 tect investors. 

6 ‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.— 

7 ‘‘(1) IN GENERAL.— 

8 ‘‘(A) SWAP DEALERS AND MAJOR SWAP

9 PARTICIPANTS THAT ARE DEPOSITORY INSTITU10 TIONS.—Each registered swap dealer and major 

11 swap participant that is a depository institu12 tion, as that term is defined in section 3 of the 

13 Federal Deposit Insurance Act (12 U.S.C. 

14 1813), shall meet such minimum capital re15 quirements and minimum initial and variation 

16 margin requirements as the appropriate Federal 

17 banking agency shall by rule or regulation pre18 scribe under paragraph (2)(A) to help ensure 

19 the safety and soundness of the swap dealer or 

20 major swap participant. 

21 ‘‘(B) SWAP DEALERS AND MAJOR SWAP

22 PARTICIPANTS THAT ARE NOT DEPOSITORY IN23 STITUTIONS.—Each registered swap dealer and 

24 major swap participant that is not a depository 

25 institution, as that term is defined in section 3 


sroberts on DSKH9S0YB1PROD with BILLS
647 

•S 3217 AMDT 3739 

1 of the Federal Deposit Insurance Act (12 

2 U.S.C. 1813), shall meet such minimum capital 

3 requirements and minimum initial and variation 

4 margin requirements as the Commission and 

5 the Securities and Exchange Commission shall 

6 by rule or regulation prescribe under paragraph 

7 (2)(B) to help ensure the safety and soundness 

8 of the swap dealer or major swap participant. 

9 ‘‘(2) RULES.— 

10 ‘‘(A) SWAP DEALERS AND MAJOR SWAP

11 PARTICIPANTS THAT ARE DEPOSITORY INSTITU12 TIONS.—The appropriate Federal banking 

13 agencies, in consultation with the Commission 

14 and the Securities and Exchange Commission, 

15 shall adopt rules imposing capital and margin 

16 requirements under this subsection for swap 

17 dealers and major swap participants that are 

18 depository institutions, as that term is defined 

19 in section 3 of the Federal Deposit Insurance 

20 Act (12 U.S.C. 1813). 

21 ‘‘(B) SWAP DEALERS AND MAJOR SWAP

22 PARTICIPANTS THAT ARE NOT DEPOSITORY IN23 STITUTIONS.—The Commission shall adopt 

24 rules imposing capital and margin requirements 

25 under this subsection for swap dealers and 


sroberts on DSKH9S0YB1PROD with BILLS
648 

•S 3217 AMDT 3739 

1 major swap participants that are not depository 

2 institutions, as that term is defined in section 

3 3 of the Federal Deposit Insurance Act (12 

4 U.S.C. 1813). 

5 ‘‘(3) CAPITAL.— 

6 ‘‘(A) SWAP DEALERS AND MAJOR SWAP

7 PARTICIPANTS THAT ARE DEPOSITORY INSTITU8 TIONS.—The capital requirements prescribed 

9 under paragraph (2)(A) for swap dealers and 

10 major swap participants that are depository in11 stitutions shall contain— 

12 ‘‘(i) a capital requirement that is 

13 greater than zero for swaps that are 

14 cleared by a registered derivatives clearing 

15 organization or a derivatives clearing orga16 nization that is exempt from registration 

17 under section 5b(j); and 

18 ‘‘(ii) to offset the greater risk to the 

19 swap dealer or major swap participant and 

20 to the financial system arising from the 

21 use of swaps that are not cleared, substan22 tially higher capital requirements for swaps 

23 that are not cleared by a registered deriva24 tives clearing organization or a derivatives 

25 clearing organization that is exempt from 


sroberts on DSKH9S0YB1PROD with BILLS
649 

•S 3217 AMDT 3739 

1 registration under section 5b(j) than for 

2 swaps that are cleared. 

3 ‘‘(B) SWAP DEALERS AND MAJOR SWAP

4 PARTICIPANTS THAT ARE NOT DEPOSITORY IN5 STITUTIONS.—The capital requirements pre6 scribed under paragraph (2)(B) for swap deal7 ers and major swap participants that are not 

8 depository institutions shall be as strict as or 

9 stricter than the capital requirements pre10 scribed for swap dealers and major swap par11 ticipants that are depository institutions under 

12 paragraph (2)(A). 

13 ‘‘(C) RULE OF CONSTRUCTION.— 

14 ‘‘(i) IN GENERAL.—Nothing in this 

15 section shall limit, or be construed to limit, 

16 the authority— 

17 ‘‘(I) of the Commission to set fi18 nancial responsibility rules for a fu19 tures commission merchant or intro20 ducing broker registered pursuant to 

21 section 4f(a) (except for section 

22 4f(a)(3)) in accordance with section 

23 4f(b); or 

24 ‘‘(II) of the Securities and Ex25 change Commission to set financial 


sroberts on DSKH9S0YB1PROD with BILLS
650 

•S 3217 AMDT 3739 

1 responsibility rules for a broker or 

2 dealer registered pursuant to section 

3 15(b) of the Securities Exchange Act 

4 of 1934 (15 U.S.C. 78o(b)) (except 

5 for section 15(b)(11) of that Act (15 

6 U.S.C. 78o(b)(11)) in accordance with 

7 section 15(c)(3) of the Securities Ex8 change Act of 1934 (15 U.S.C. 

9 78o(c)(3)). 

10 ‘‘(ii) FUTURES COMMISSION MER11 CHANTS AND OTHER DEALERS.—A futures 

12 commission merchant, introducing broker, 

13 broker, or dealer shall maintain sufficient 

14 capital to comply with the stricter of any 

15 applicable capital requirements to which 

16 such futures commission merchant, intro17 ducing broker, broker, or dealer is subject 

18 to under this Act or the Securities Ex19 change Act of 1934 (15 U.S.C. 78a et 

20 seq.). 

21 ‘‘(4) MARGIN.— 

22 ‘‘(A) SWAP DEALERS AND MAJOR SWAP

23 PARTICIPANTS THAT ARE DEPOSITORY INSTITU24 TIONS.—The appropriate Federal banking 

25 agency for swap dealers and major swap parVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00650 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
651 

•S 3217 AMDT 3739 

1 ticipants that are depository institutions shall 

2 impose both initial and variation margin re3 quirements in accordance with paragraph 

4 (2)(A) on all swaps that are not cleared by a 

5 registered derivatives clearing organization or a 

6 derivatives clearing organization that is exempt 

7 from registration under section 5b(j) . 

8 ‘‘(B) SWAP DEALERS AND MAJOR SWAP

9 PARTICIPANTS THAT ARE NOT DEPOSITORY IN10 STITUTIONS.—The Commission and the Securi11 ties and Exchange Commission shall impose 

12 both initial and variation margin requirements 

13 in accordance with paragraph (2)(B) for swap 

14 dealers and major swap participants that are 

15 not depository institutions on all swaps that are 

16 not cleared by a registered derivatives clearing 

17 organization or a derivatives clearing organiza18 tion that is exempt from registration under sec19 tion 5b(j). Any such initial and variation mar20 gin requirements shall be as strict as or stricter 

21 than the margin requirements prescribed under 

22 paragraph (4)(A). 

23 ‘‘(5) MARGIN REQUIREMENTS.—In prescribing 

24 margin requirements under this subsection, the ap25 propriate Federal banking agency with respect to 


sroberts on DSKH9S0YB1PROD with BILLS
652 

•S 3217 AMDT 3739 

1 swap dealers and major swap participants that are 

2 depository institutions and the Commission with re3 spect to swap dealers and major swap participants 

4 that are not depository institutions may permit the 

5 use of noncash collateral, as the agency or the Com6 mission determines to be consistent with— 

7 ‘‘(A) preserving the financial integrity of 

8 markets trading swaps; and 

9 ‘‘(B) preserving the stability of the United 

10 States financial system. 

11 ‘‘(6) COMPARABILITY OF CAPITAL AND MARGIN

12 REQUIREMENTS.— 

13 ‘‘(A) IN GENERAL.—The appropriate Fed14 eral banking agencies, the Commission, and the 

15 Securities and Exchange Commission shall peri16 odically (but not less frequently than annually) 

17 consult on minimum capital requirements and 

18 minimum initial and variation margin require19 ments. 

20 ‘‘(B) COMPARABILITY.—The entities de21 scribed in subparagraph (A) shall, to the max22 imum extent practicable, establish and maintain 

23 comparable minimum capital requirements and 

24 minimum initial and variation margin requireVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00652 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
653 

•S 3217 AMDT 3739 

1 ments, including the use of non cash collateral, 

2 for— 

3 ‘‘(i) swap dealers; and 

4 ‘‘(ii) major swap participants. 

5 ‘‘(7) REQUESTED MARGIN.—If any party to a 

6 swap that is exempt from the margin requirements 

7 of paragraph (4)(A)(i) pursuant to the provisions of 

8 paragraph (4)(A)(ii), or from the margin require9 ments of paragraph (4)(B)(i) pursuant to the provi10 sions of paragraph (4)(B)(ii), requests that such 

11 swap be margined, then— 

12 ‘‘(A) the exemption shall not apply; and 

13 ‘‘(B) the counterparty to such swap shall 

14 provide the requested margin. 

15 ‘‘(8) APPLICABILITY WITH RESPECT TO

16 COUNTERPARTIES.—Paragraph (4) shall not apply 

17 to initial and variation margin for swaps in which 1 

18 of the counterparties is not— 

19 ‘‘(A) a swap dealer; 

20 ‘‘(B) a major swap participant; or 

21 ‘‘(C) a financial entity as described in sec22 tion 2(h)(9)(A)(ii), and such counterparty is eli23 gible for and utilizing the commercial end user 

24 clearing exemption under section 2(h)(9). 

25 ‘‘(f) REPORTING AND RECORDKEEPING.— 


sroberts on DSKH9S0YB1PROD with BILLS
654 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—Each registered swap deal2 er and major swap participant— 

3 ‘‘(A) shall make such reports as are re4 quired by the Commission by rule or regulation 

5 regarding the transactions and positions and fi6 nancial condition of the registered swap dealer 

7 or major swap participant; 

8 ‘‘(B)(i) for which there is a prudential reg9 ulator, shall keep books and records of all ac10 tivities related to the business as a swap dealer 

11 or major swap participant in such form and 

12 manner and for such period as may be pre13 scribed by the Commission by rule or regula14 tion; and 

15 ‘‘(ii) for which there is no prudential regu16 lator, shall keep books and records in such form 

17 and manner and for such period as may be pre18 scribed by the Commission by rule or regula19 tion; and 

20 ‘‘(C) shall keep books and records de21 scribed in subparagraph (B) open to inspection 

22 and examination by any representative of the 

23 Commission. 


sroberts on DSKH9S0YB1PROD with BILLS
655 

•S 3217 AMDT 3739 

1 ‘‘(2) RULES.—The Commission shall adopt 

2 rules governing reporting and recordkeeping for 

3 swap dealers and major swap participants. 

4 ‘‘(g) DAILY TRADING RECORDS.— 

5 ‘‘(1) IN GENERAL.—Each registered swap deal6 er and major swap participant shall maintain daily 

7 trading records of the swaps of the registered swap 

8 dealer and major swap participant and all related 

9 records (including related cash or forward trans10 actions) and recorded communications, including 

11 electronic mail, instant messages, and recordings of 

12 telephone calls, for such period as may be required 

13 by the Commission by rule or regulation. 

14 ‘‘(2) INFORMATION REQUIREMENTS.—The daily 

15 trading records shall include such information as the 

16 Commission shall require by rule or regulation. 

17 ‘‘(3) COUNTERPARTY RECORDS.—Each reg18 istered swap dealer and major swap participant shall 

19 maintain daily trading records for each counterparty 

20 in a manner and form that is identifiable with each 

21 swap transaction. 

22 ‘‘(4) AUDIT TRAIL.—Each registered swap deal23 er and major swap participant shall maintain a com24 plete audit trail for conducting comprehensive and 

25 accurate trade reconstructions. 


sroberts on DSKH9S0YB1PROD with BILLS
656 

•S 3217 AMDT 3739 

1 ‘‘(5) RULES.—The Commission shall adopt 

2 rules governing daily trading records for swap deal3 ers and major swap participants. 

4 ‘‘(h) BUSINESS CONDUCT STANDARDS.— 

5 ‘‘(1) IN GENERAL.—Each registered swap deal6 er and major swap participant shall conform with 

7 such business conduct standards as may be pre8 scribed by the Commission by rule or regulation that 

9 relate to— 

10 ‘‘(A) fraud, manipulation, and other abu11 sive practices involving swaps (including swaps 

12 that are offered but not entered into); 

13 ‘‘(B) diligent supervision of the business of 

14 the registered swap dealer and major swap par15 ticipant; 

16 ‘‘(C) adherence to all applicable position 

17 limits; and 

18 ‘‘(D) such other matters as the Commis19 sion determines to be appropriate. 

20 ‘‘(2) SPECIAL RULE; FIDUCIARY DUTIES TO

21 CERTAIN ENTITIES.— 

22 ‘‘(A) GOVERNMENTAL ENTITIES.—A swap 

23 dealer that provides advice regarding, or offers 

24 to enter into, or enters into a swap with a 

25 State, State agency, city, county, municipality, 


sroberts on DSKH9S0YB1PROD with BILLS
657 

•S 3217 AMDT 3739 

1 or other political subdivision of a State or a 

2 Federal agency shall have a fiduciary duty to 

3 the State, State agency, city, county, munici4 pality, or other political subdivision of a State, 

5 or the Federal agency, as appropriate. 

6 ‘‘(B) PENSION PLANS; ENDOWMENTS; RE7 TIREMENT PLANS.—A swap dealer that pro8 vides advice regarding, or offers to enter into, 

9 or enters into a swap with a pension plan, en10 dowment, or retirement plan shall have a fidu11 ciary duty to the pension plan, endowment, or 

12 retirement plan, as appropriate. 

13 ‘‘(3) BUSINESS CONDUCT REQUIREMENTS.— 

14 Business conduct requirements adopted by the Com15 mission shall— 

16 ‘‘(A) establish the standard of care for a 

17 swap dealer or major swap participant to verify 

18 that any counterparty meets the eligibility 

19 standards for an eligible contract participant; 

20 ‘‘(B) require disclosure by the swap dealer 

21 or major swap participant to any counterparty 

22 to the transaction (other than a swap dealer, 

23 major swap participant, security-based swap 

24 dealer, or major security-based swap partici25 pant) of— 


sroberts on DSKH9S0YB1PROD with BILLS
658 

•S 3217 AMDT 3739 

1 ‘‘(i) information about the material 

2 risks and characteristics of the swap; 

3 ‘‘(ii) the source and amount of any 

4 fees or other material remuneration that 

5 the swap dealer or major swap participant 

6 would directly or indirectly expect to re7 ceive in connection with the swap; 

8 ‘‘(iii) any other material incentives or 

9 conflicts of interest that the swap dealer or 

10 major swap participant may have in con11 nection with the swap; and 

12 ‘‘(iv)(I) for cleared swaps, upon the 

13 request of the counterparty, the daily mark 

14 from the appropriate derivatives clearing 

15 organization; and 

16 ‘‘(II) for uncleared swaps, the daily 

17 mark of the swap dealer or the major swap 

18 participant; 

19 ‘‘(C) establish a standard of conduct for a 

20 swap dealer or major swap participant to com21 municate in a fair and balanced manner based 

22 on principles of fair dealing and good faith; 

23 ‘‘(D) establish a standard of conduct for a 

24 swap dealer or major swap participant, with re25 spect to a counterparty that is an eligible conVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00658 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
659 

•S 3217 AMDT 3739 

1 tract participant within the meaning of sub2 clause (I) or (II) of clause (vii) of section 

3 1a(18) of this Act, to have a reasonable basis 

4 to believe that the counterparty has an inde5 pendent representative that— 

6 ‘‘(i) has sufficient knowledge to evalu7 ate the transaction and risks; 

8 ‘‘(ii) is not subject to a statutory dis9 qualification; 

10 ‘‘(iii) is independent of the swap deal11 er or major swap participant; 

12 ‘‘(iv) undertakes a duty to act in the 

13 best interests of the counterparty it rep14 resents; 

15 ‘‘(v) makes appropriate disclosures; 

16 and 

17 ‘‘(vi) will provide written representa18 tions to the eligible contract participant re19 garding fair pricing and the appropriate20 ness of the transaction; and 

21 ‘‘(E) establish such other standards and 

22 requirements as the Commission may determine 

23 are appropriate in the public interest, for the 

24 protection of investors, or otherwise in further25 ance of the purposes of this Act. 


sroberts on DSKH9S0YB1PROD with BILLS
660 

•S 3217 AMDT 3739 

1 ‘‘(4) RULES.—The Commission shall prescribe 

2 rules under this subsection governing business con3 duct standards for swap dealers and major swap 

4 participants. 

5 ‘‘(i) DOCUMENTATION AND BACK OFFICE STAND6 ARDS.— 

7 ‘‘(1) IN GENERAL.—Each registered swap deal8 er and major swap participant shall conform with 

9 such standards as may be prescribed by the Com10 mission by rule or regulation that relate to timely 

11 and accurate confirmation, processing, netting, docu12 mentation, and valuation of all swaps. 

13 ‘‘(2) RULES.—The Commission shall adopt 

14 rules governing documentation and back office 

15 standards for swap dealers and major swap partici16 pants. 

17 ‘‘(j) DUTIES.—Each registered swap dealer and 

18 major swap participant at all times shall comply with the 

19 following requirements: 

20 ‘‘(1) MONITORING OF TRADING.—The swap 

21 dealer or major swap participant shall monitor its 

22 trading in swaps to prevent violations of applicable 

23 position limits. 

24 ‘‘(2) RISK MANAGEMENT PROCEDURES.—The 

25 swap dealer or major swap participant shall estabVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00660 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
661 

•S 3217 AMDT 3739 

1 lish robust and professional risk management sys2 tems adequate for managing the day-to-day business 

3 of the swap dealer or major swap participant. 

4 ‘‘(3) DISCLOSURE OF GENERAL INFORMA5 TION.—The swap dealer or major swap participant 

6 shall disclose to the Commission and to the pruden7 tial regulator for the swap dealer or major swap par8 ticipant, as applicable, information concerning— 

9 ‘‘(A) terms and conditions of its swaps; 

10 ‘‘(B) swap trading operations, mechanisms, 

11 and practices; 

12 ‘‘(C) financial integrity protections relating 

13 to swaps; and 

14 ‘‘(D) other information relevant to its trad15 ing in swaps. 

16 ‘‘(4) ABILITY TO OBTAIN INFORMATION.—The 

17 swap dealer or major swap participant shall— 

18 ‘‘(A) establish and enforce internal systems 

19 and procedures to obtain any necessary infor20 mation to perform any of the functions de21 scribed in this section; and 

22 ‘‘(B) provide the information to the Com23 mission and to the prudential regulator for the 

24 swap dealer or major swap participant, as ap25 plicable, on request. 


sroberts on DSKH9S0YB1PROD with BILLS
662 

•S 3217 AMDT 3739 

1 ‘‘(5) CONFLICTS OF INTEREST.—The swap 

2 dealer and major swap participant shall implement 

3 conflict-of-interest systems and procedures that— 

4 ‘‘(A) establish structural and institutional 

5 safeguards to ensure that the activities of any 

6 person within the firm relating to research or 

7 analysis of the price or market for any com8 modity or swap or acting in a role of providing 

9 clearing activities or making determinations as 

10 to accepting clearing customers are separated 

11 by appropriate informational partitions within 

12 the firm from the review, pressure, or oversight 

13 of persons whose involvement in pricing, trad14 ing, or clearing activities might potentially bias 

15 their judgment or supervision and contravene 

16 the core principles of open access and the busi17 ness conduct standards described in this Act; 

18 and 

19 ‘‘(B) address such other issues as the 

20 Commission determines to be appropriate. 

21 ‘‘(6) ANTITRUST CONSIDERATIONS.—Unless 

22 necessary or appropriate to achieve the purposes of 

23 this Act, a swap dealer or major swap participant 

24 shall not— 


sroberts on DSKH9S0YB1PROD with BILLS
663 

•S 3217 AMDT 3739 

1 ‘‘(A) adopt any process or take any action 

2 that results in any unreasonable restraint of 

3 trade; or 

4 ‘‘(B) impose any material anticompetitive 

5 burden on trading or clearing. 

6 ‘‘(k) DESIGNATION OF CHIEF COMPLIANCE OFFI7 CER.— 

8 ‘‘(1) IN GENERAL.—Each swap dealer and 

9 major swap participant shall designate an individual 

10 to serve as a chief compliance officer. 

11 ‘‘(2) DUTIES.—The chief compliance officer 

12 shall— 

13 ‘‘(A) report directly to the board or to the 

14 senior officer of the swap dealer or major swap 

15 participant; 

16 ‘‘(B) review the compliance of the swap 

17 dealer or major swap participant with respect to 

18 the swap dealer and major swap participant re19 quirements described in this section; 

20 ‘‘(C) in consultation with the board of di21 rectors, a body performing a function similar to 

22 the board, or the senior officer of the organiza23 tion, resolve any conflicts of interest that may 

24 arise; 


sroberts on DSKH9S0YB1PROD with BILLS
664 

•S 3217 AMDT 3739 

1 ‘‘(D) be responsible for administering each 

2 policy and procedure that is required to be es3 tablished pursuant to this section; 

4 ‘‘(E) ensure compliance with this Act (in5 cluding regulations) relating to swaps, including 

6 each rule prescribed by the Commission under 

7 this section; 

8 ‘‘(F) establish procedures for the remedi9 ation of noncompliance issues identified by the 

10 chief compliance officer through any— 

11 ‘‘(i) compliance office review; 

12 ‘‘(ii) look-back; 

13 ‘‘(iii) internal or external audit find14 ing; 

15 ‘‘(iv) self-reported error; or 

16 ‘‘(v) validated complaint; and 

17 ‘‘(G) establish and follow appropriate pro18 cedures for the handling, management response, 

19 remediation, retesting, and closing of non20 compliance issues. 

21 ‘‘(3) ANNUAL REPORTS.— 

22 ‘‘(A) IN GENERAL.—In accordance with 

23 rules prescribed by the Commission, the chief 

24 compliance officer shall annually prepare and 

25 sign a report that contains a description of— 


sroberts on DSKH9S0YB1PROD with BILLS
665 

•S 3217 AMDT 3739 

1 ‘‘(i) the compliance of the swap dealer 

2 or major swap participant with respect to 

3 this Act (including regulations); and 

4 ‘‘(ii) each policy and procedure of the 

5 swap dealer or major swap participant of 

6 the chief compliance officer (including the 

7 code of ethics and conflict of interest poli8 cies). 

9 ‘‘(B) REQUIREMENTS.—A compliance re10 port under subparagraph (A) shall— 

11 ‘‘(i) accompany each appropriate fi12 nancial report of the swap dealer or major 

13 swap participant that is required to be fur14 nished to the Commission pursuant to this 

15 section; and 

16 ‘‘(ii) include a certification that, under 

17 penalty of law, the compliance report is ac18 curate and complete.’’. 

19 SEC. 732. CONFLICTS OF INTEREST. 

20 Section 4d of the Commodity Exchange Act (7 U.S.C. 

21 6d) is amended— 

22 (1) by redesignating subsection (c) as sub23 section (e); and 

24 (2) by inserting after subsection (b) the fol25 lowing: 


sroberts on DSKH9S0YB1PROD with BILLS
666 

•S 3217 AMDT 3739 

1 ‘‘(c) CONFLICTS OF INTEREST.—The Commission 

2 shall require that futures commission merchants and in3 troducing brokers implement conflict-of-interest systems 

4 and procedures that— 

5 ‘‘(1) establish structural and institutional safe6 guards to ensure that the activities of any person 

7 within the firm relating to research or analysis of 

8 the price or market for any commodity are separated 

9 by appropriate informational partitions within the 

10 firm from the review, pressure, or oversight of per11 sons whose involvement in trading or clearing activi12 ties might potentially bias the judgment or super13 vision of the persons; and 

14 ‘‘(2) address such other issues as the Commis15 sion determines to be appropriate. 

16 ‘‘(d) DESIGNATION OF CHIEF COMPLIANCE OFFI17 CER.— 

18 ‘‘(1) IN GENERAL.—Each futures commission 

19 merchant shall designate an individual to serve as a 

20 chief compliance officer. 

21 ‘‘(2) DUTIES.—The chief compliance officer 

22 shall— 

23 ‘‘(A) report directly to the board or to the 

24 senior officer of the futures commission mer25 chant; 


sroberts on DSKH9S0YB1PROD with BILLS
667 

•S 3217 AMDT 3739 

1 ‘‘(B) review the compliance of the futures 

2 commission merchant with respect to require3 ments described in this section; 

4 ‘‘(C) in consultation with the board of di5 rectors, a body performing a function similar to 

6 the board, or the senior officer of the organiza7 tion, resolve any conflicts of interest that may 

8 arise; 

9 ‘‘(D) be responsible for administering each 

10 policy and procedure that is required to be es11 tablished pursuant to this section; 

12 ‘‘(E) ensure compliance with this Act (in13 cluding regulations and each rule prescribed by 

14 the Commission under this section) relating, 

15 but not limited, to— 

16 ‘‘(i) contracts of sale of a commodity 

17 for future delivery; 

18 ‘‘(ii) options on the contracts de19 scribed in clause (i); 

20 ‘‘(iii) commodity options; 

21 ‘‘(iv) retail commodity transactions; 

22 ‘‘(v) security futures products; 

23 ‘‘(vi) leverage contracts; and 

24 ‘‘(vii) swaps; 


sroberts on DSKH9S0YB1PROD with BILLS
668 

•S 3217 AMDT 3739 

1 ‘‘(F) establish procedures for the remedi2 ation of noncompliance issues identified by the 

3 chief compliance officer through any— 

4 ‘‘(i) compliance office review; 

5 ‘‘(ii) look-back; 

6 ‘‘(iii) internal or external audit find7 ing; 

8 ‘‘(iv) self-reported error; or 

9 ‘‘(v) validated complaint; and 

10 ‘‘(G) establish and follow appropriate pro11 cedures for the handling, management response, 

12 remediation, retesting, and closing of non13 compliance issues. 

14 ‘‘(3) ANNUAL REPORTS.— 

15 ‘‘(A) IN GENERAL.—In accordance with 

16 rules prescribed by the Commission, the chief 

17 compliance officer shall annually prepare and 

18 sign a report that contains a description of— 

19 ‘‘(i) the compliance of the futures 

20 commission merchant with respect to this 

21 Act (including regulations); and 

22 ‘‘(ii) each policy and procedure of the 

23 futures commission merchant of the chief 

24 compliance officer (including the code of 

25 ethics and conflict of interest policies). 


sroberts on DSKH9S0YB1PROD with BILLS
669 

•S 3217 AMDT 3739 

1 ‘‘(B) REQUIREMENTS.—A compliance re2 port under subparagraph (A) shall— 

3 ‘‘(i) accompany each appropriate fi4 nancial report of the futures commission 

5 merchant that is required to be furnished 

6 to the Commission pursuant to this sec7 tion; and 

8 ‘‘(ii) include a certification that, under 

9 penalty of law, the compliance report is ac10 curate and complete.’’. 

11 SEC. 733. SWAP EXECUTION FACILITIES. 

12 The Commodity Exchange Act is amended by insert13 ing after section 5g (7 U.S.C. 7b-2) the following: 

14 ‘‘SEC. 5h. SWAP EXECUTION FACILITIES. 

15 ‘‘(a) REGISTRATION.— 

16 ‘‘(1) IN GENERAL.—No person may operate a 

17 facility for the trading or processing of swaps unless 

18 the facility is registered as a swap execution facility 

19 or as a designated contract market under this sec20 tion. 

21 ‘‘(2) DUAL REGISTRATION.—Any person that is 

22 registered as a swap execution facility under this 

23 section shall register with the Commission regardless 

24 of whether the person also is registered with the SeVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00669 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
670 

•S 3217 AMDT 3739 

1 curities and Exchange Commission as a swap execu2 tion facility. 

3 ‘‘(b) TRADING AND TRADE PROCESSING.—A swap 

4 execution facility that is registered under subsection (a) 

5 may— 

6 ‘‘(1) make available for trading any swap; and 

7 ‘‘(2) facilitate trade processing of any swap. 

8 ‘‘(c) IDENTIFICATION OF FACILITY USED TO TRADE

9 SWAPS BY CONTRACT MARKETS.—A board of trade that 

10 operates a contract market shall, to the extent that the 

11 board of trade also operates a swap execution facility and 

12 uses the same electronic trade execution system for listing 

13 and executing trades of swaps on or through the contract 

14 market and the swap execution facility, identify whether 

15 the electronic trading of such swaps is taking place on or 

16 through the contract market or the swap execution facil17 ity. 

18 ‘‘(d) CORE PRINCIPLES FOR SWAP EXECUTION FA19 CILITIES.— 

20 ‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 

21 ‘‘(A) IN GENERAL.—To be registered, and 

22 maintain registration, as a swap execution facil23 ity, the swap execution facility shall comply 

24 with— 


sroberts on DSKH9S0YB1PROD with BILLS
671 

•S 3217 AMDT 3739 

1 ‘‘(i) the core principles described in 

2 this subsection; and 

3 ‘‘(ii) any requirement that the Com4 mission may impose by rule or regulation 

5 pursuant to section 8a(5). 

6 ‘‘(B) REASONABLE DISCRETION OF SWAP

7 EXECUTION FACILITY.—Unless otherwise deter8 mined by the Commission by rule or regulation, 

9 a swap execution facility described in subpara10 graph (A) shall have reasonable discretion in 

11 establishing the manner in which the swap exe12 cution facility complies with the core principles 

13 described in this subsection. 

14 ‘‘(2) COMPLIANCE WITH RULES.—A swap exe15 cution facility shall— 

16 ‘‘(A) monitor and enforce compliance with 

17 any rule of the swap execution facility, includ18 ing— 

19 ‘‘(i) the terms and conditions of the 

20 swaps traded or processed on or through 

21 the swap execution facility; and 

22 ‘‘(ii) any limitation on access to the 

23 swap execution facility; 

24 ‘‘(B) establish and enforce trading, trade 

25 processing, and participation rules that will 


sroberts on DSKH9S0YB1PROD with BILLS
672 

•S 3217 AMDT 3739 

1 deter abuses and have the capacity to detect, 

2 investigate, and enforce those rules, including 

3 means— 

4 ‘‘(i) to provide market participants 

5 with impartial access to the market; and 

6 ‘‘(ii) to capture information that may 

7 be used in establishing whether rule viola8 tions have occurred; 

9 ‘‘(C) establish rules governing the oper10 ation of the facility, including rules specifying 

11 trading procedures to be used in entering and 

12 executing orders traded or posted on the facil13 ity, including block trades; and 

14 ‘‘(D) provide by its rules that when a swap 

15 dealer or major swap participant enters into or 

16 facilitates a swap that is subject to the manda17 tory clearing requirement of section 2(h)(2)(F), 

18 the swap dealer or major swap participant shall 

19 be responsible for compliance with the manda20 tory trading requirement of section 113(d) of 

21 the Wall Street Transparency and Account22 ability Act of 2010. 

23 ‘‘(3) SWAPS NOT READILY SUSCEPTIBLE TO MA24 NIPULATION.—The swap execution facility shall perVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00672 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
673 

•S 3217 AMDT 3739 

1 mit trading only in swaps that are not readily sus2 ceptible to manipulation. 

3 ‘‘(4) MONITORING OF TRADING AND TRADE

4 PROCESSING.—The swap execution facility shall— 

5 ‘‘(A) establish and enforce rules or terms 

6 and conditions defining, or specifications detail7 ing— 

8 ‘‘(i) trading procedures to be used in 

9 entering and executing orders traded on or 

10 through the facilities of the swap execution 

11 facility; and 

12 ‘‘(ii) procedures for trade processing 

13 of swaps on or through the facilities of the 

14 swap execution facility; and 

15 ‘‘(B) monitor trading in swaps to prevent 

16 manipulation, price distortion, and disruptions 

17 of the delivery or cash settlement process 

18 through surveillance, compliance, and discipli19 nary practices and procedures, including meth20 ods for conducting real-time monitoring of trad21 ing and comprehensive and accurate trade re22 constructions. 

23 ‘‘(5) ABILITY TO OBTAIN INFORMATION.—The 

24 swap execution facility shall— 


sroberts on DSKH9S0YB1PROD with BILLS
674 

•S 3217 AMDT 3739 

1 ‘‘(A) establish and enforce rules that will 

2 allow the facility to obtain any necessary infor3 mation to perform any of the functions de4 scribed in this section; 

5 ‘‘(B) provide the information to the Com6 mission on request; and 

7 ‘‘(C) have the capacity to carry out such 

8 international information-sharing agreements as 

9 the Commission may require. 

10 ‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— 

11 ‘‘(A) IN GENERAL.—To reduce the poten12 tial threat of market manipulation or conges13 tion, especially during trading in the delivery 

14 month, a swap execution facility that is a trad15 ing facility shall adopt for each of the contracts 

16 of the facility, as is necessary and appropriate, 

17 position limitations or position accountability 

18 for speculators. 

19 ‘‘(B) POSITION LIMITS.—For any contract 

20 that is subject to a position limitation estab21 lished by the Commission pursuant to section 

22 4a(a), the swap execution facility shall set its 

23 position limitation at a level no higher than the 

24 Commission limitation. 


sroberts on DSKH9S0YB1PROD with BILLS
675 

•S 3217 AMDT 3739 

1 ‘‘(C) POSITION ENFORCEMENT.—For any 

2 contract that is subject to a position limitation 

3 established by the Commission pursuant to sec4 tion 4a(a), a swap execution facility shall reject 

5 any proposed swap transaction if, based on in6 formation readily available to a swap execution 

7 facility, any proposed swap transaction would 

8 cause a swap execution facility customer that 

9 would be a party to such swap transaction to 

10 exceed such position limitation. 

11 ‘‘(7) FINANCIAL INTEGRITY OF TRANS12 ACTIONS.—The swap execution facility shall estab13 lish and enforce rules and procedures for ensuring 

14 the financial integrity of swaps entered on or 

15 through the facilities of the swap execution facility, 

16 including the clearance and settlement of the swaps 

17 pursuant to section 2(h)(1). 

18 ‘‘(8) EMERGENCY AUTHORITY.—The swap exe19 cution facility shall adopt rules to provide for the ex20 ercise of emergency authority, in consultation or co21 operation with the Commission, as is necessary and 

22 appropriate, including the authority to liquidate or 

23 transfer open positions in any swap or to suspend or 

24 curtail trading in a swap. 


sroberts on DSKH9S0YB1PROD with BILLS
676 

•S 3217 AMDT 3739 

1 ‘‘(9) TIMELY PUBLICATION OF TRADING INFOR2 MATION.— 

3 ‘‘(A) IN GENERAL.—The swap execution 

4 facility shall make public timely information on 

5 price, trading volume, and other trading data 

6 on swaps to the extent prescribed by the Com7 mission. 

8 ‘‘(B) CAPACITY OF SWAP EXECUTION FA9 CILITY.—The swap execution facility shall be 

10 required to have the capacity to electronically 

11 capture trade information with respect to trans12 actions executed on the facility. 

13 ‘‘(10) RECORDKEEPING AND REPORTING.— 

14 ‘‘(A) IN GENERAL.—A swap execution fa15 cility shall— 

16 ‘‘(i) maintain records of all activities 

17 relating to the business of the facility, in18 cluding a complete audit trail, in a form 

19 and manner acceptable to the Commission 

20 for a period of 5 years; and 

21 ‘‘(ii) report to the Commission, in a 

22 form and manner acceptable to the Com23 mission, such information as the Commis24 sion determines to be necessary or approVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00676 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
677 

•S 3217 AMDT 3739 

1 priate for the Commission to perform the 

2 duties of the Commission under this Act. 

3 ‘‘(B) REQUIREMENTS.—The Commission 

4 shall adopt data collection and reporting re5 quirements for swap execution facilities that are 

6 comparable to corresponding requirements for 

7 derivatives clearing organizations and swap 

8 data repositories. 

9 ‘‘(11) ANTITRUST CONSIDERATIONS.—Unless 

10 necessary or appropriate to achieve the purposes of 

11 this Act, the swap execution facility shall not— 

12 ‘‘(A) adopt any rules or taking any actions 

13 that result in any unreasonable restraint of 

14 trade; or 

15 ‘‘(B) impose any material anticompetitive 

16 burden on trading or clearing. 

17 ‘‘(12) CONFLICTS OF INTEREST.—The swap 

18 execution facility shall— 

19 ‘‘(A) establish and enforce rules to mini20 mize conflicts of interest in its decision-making 

21 process; and 

22 ‘‘(B) establish a process for resolving the 

23 conflicts of interest. 

24 ‘‘(13) FINANCIAL RESOURCES.— 


sroberts on DSKH9S0YB1PROD with BILLS
678 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—The swap execution 

2 facility shall have adequate financial, oper3 ational, and managerial resources to discharge 

4 each responsibility of the swap execution facil5 ity. 

6 ‘‘(B) DETERMINATION OF RESOURCE ADE7 QUACY.—The financial resources of a swap exe8 cution facility shall be considered to be ade9 quate if the value of the financial resources ex10 ceeds the total amount that would enable the 

11 swap execution facility to cover the operating 

12 costs of the swap execution facility for a 1-year 

13 period, as calculated on a rolling basis. 

14 ‘‘(14) SYSTEM SAFEGUARDS.—The swap execu15 tion facility shall— 

16 ‘‘(A) establish and maintain a program of 

17 risk analysis and oversight to identify and mini18 mize sources of operational risk, through the 

19 development of appropriate controls and proce20 dures, and automated systems, that— 

21 ‘‘(i) are reliable and secure; and 

22 ‘‘(ii) have adequate scalable capacity; 

23 ‘‘(B) establish and maintain emergency 

24 procedures, backup facilities, and a plan for dis25 aster recovery that are designed to allow for— 


sroberts on DSKH9S0YB1PROD with BILLS
679 

•S 3217 AMDT 3739 

1 ‘‘(i) the timely recovery and resump2 tion of operations; and 

3 ‘‘(ii) the fulfillment of the responsibil4 ities and obligation of the swap execution 

5 facility; and 

6 ‘‘(C) periodically conduct tests to verify 

7 that the backup resources of the swap execution 

8 facility are sufficient to ensure continued— 

9 ‘‘(i) order processing and trade 

10 matching; 

11 ‘‘(ii) price reporting; 

12 ‘‘(iii) market surveillance and 

13 ‘‘(iv) maintenance of a comprehensive 

14 and accurate audit trail. 

15 ‘‘(15) DESIGNATION OF CHIEF COMPLIANCE

16 OFFICER.— 

17 ‘‘(A) IN GENERAL.—Each swap execution 

18 facility shall designate an individual to serve as 

19 a chief compliance officer. 

20 ‘‘(B) DUTIES.—The chief compliance offi21 cer shall— 

22 ‘‘(i) report directly to the board or to 

23 the senior officer of the facility; 

24 ‘‘(ii) review compliance with the core 

25 principles in this subsection; 


sroberts on DSKH9S0YB1PROD with BILLS
680 

•S 3217 AMDT 3739 

1 ‘‘(iii) in consultation with the board of 

2 the facility, a body performing a function 

3 similar to that of a board, or the senior of4 ficer of the facility, resolve any conflicts of 

5 interest that may arise; 

6 ‘‘(iv) be responsible for establishing 

7 and administering the policies and proce8 dures required to be established pursuant 

9 to this section; 

10 ‘‘(v) ensure compliance with this Act 

11 and the rules and regulations issued under 

12 this Act, including rules prescribed by the 

13 Commission pursuant to this section; and 

14 ‘‘(vi) establish procedures for the re15 mediation of noncompliance issues found 

16 during compliance office reviews, look 

17 backs, internal or external audit findings, 

18 self-reported errors, or through validated 

19 complaints. 

20 ‘‘(C) REQUIREMENTS FOR PROCEDURES.— 

21 In establishing procedures under subparagraph 

22 (B)(vi), the chief compliance officer shall design 

23 the procedures to establish the handling, man24 agement response, remediation, retesting, and 

25 closing of noncompliance issues. 


sroberts on DSKH9S0YB1PROD with BILLS
681 

•S 3217 AMDT 3739 

1 ‘‘(D) ANNUAL REPORTS.— 

2 ‘‘(i) IN GENERAL.—In accordance 

3 with rules prescribed by the Commission, 

4 the chief compliance officer shall annually 

5 prepare and sign a report that contains a 

6 description of— 

7 ‘‘(I) the compliance of the swap 

8 execution facility with this Act; and 

9 ‘‘(II) the policies and procedures, 

10 including the code of ethics and con11 flict of interest policies, of the swap 

12 execution facility. 

13 ‘‘(ii) REQUIREMENTS.—The chief 

14 compliance officer shall— 

15 ‘‘(I) submit each report described 

16 in clause (i) with the appropriate fi17 nancial report of the swap execution 

18 facility that is required to be sub19 mitted to the Commission pursuant to 

20 this section; and 

21 ‘‘(II) include in the report a cer22 tification that, under penalty of law, 

23 the report is accurate and complete. 

24 ‘‘(e) EXEMPTIONS.—The Commission may exempt, 

25 conditionally or unconditionally, a swap execution facility 


sroberts on DSKH9S0YB1PROD with BILLS
682 

•S 3217 AMDT 3739 

1 from registration under this section if the Commission 

2 finds that the facility is subject to comparable, comprehen3 sive supervision and regulation on a consolidated basis by 

4 the Securities and Exchange Commission, a prudential 

5 regulator, or the appropriate governmental authorities in 

6 the home country of the facility. 

7 ‘‘(f) RULES.—The Commission shall prescribe rules 

8 governing the regulation of alternative swap execution fa9 cilities under this section.’’. 

10 SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILI11 TIES AND EXEMPT BOARDS OF TRADE. 

12 (a) IN GENERAL.—Sections 5a and 5d of the Com13 modity Exchange Act (7 U.S.C. 7a, 7a-3) are repealed. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) Section 2 of the Commodity Exchange Act 

16 (7 U.S.C. 2) is amended— 

17 (A) in subsection (a)(1)(A), in the first 

18 sentence, by striking ‘‘or 5a’’; and 

19 (B) in paragraph (2) of subsection (g) (as 

20 redesignated by section 723(a)(1)(B)), by strik21 ing ‘‘section 5a of this Act’’ and all that follows 

22 through ‘‘5d of this Act’’ and inserting ‘‘section 

23 5b of this Act’’. 


sroberts on DSKH9S0YB1PROD with BILLS
683 

•S 3217 AMDT 3739 

1 (2) Section 6(g)(1)(A) of the Securities Ex2 change Act of 1934 (15 U.S.C. 78f(g)(1)(A)) is 

3 amended— 

4 (A) by striking ‘‘that—’’ and all that fol5 lows through ‘‘(i) has been designated’’ and in6 serting ‘‘that has been designated’’; 

7 (B) by striking ‘‘; or’’ and inserting ‘‘; 

8 and’’ and 

9 (C) by striking clause (ii). 

10 SEC. 735. DESIGNATED CONTRACT MARKETS. 

11 (a) CRITERIA FOR DESIGNATION.—Section 5 of the 

12 Commodity Exchange Act (7 U.S.C. 7) is amended by 

13 striking subsection (b). 

14 (b) CORE PRINCIPLES FOR CONTRACT MARKETS.— 

15 Section 5 of the Commodity Exchange Act (7 U.S.C. 7) 

16 is amended by striking subsection (d) and inserting the 

17 following: 

18 ‘‘(d) CORE PRINCIPLES FOR CONTRACT MARKETS.— 

19 ‘‘(1) DESIGNATION AS CONTRACT MARKET.— 

20 ‘‘(A) IN GENERAL.—To be designated, and 

21 maintain a designation, as a contract market, a 

22 board of trade shall comply with— 

23 ‘‘(i) any core principle described in 

24 this subsection; and 


sroberts on DSKH9S0YB1PROD with BILLS
684 

•S 3217 AMDT 3739 

1 ‘‘(ii) any requirement that the Com2 mission may impose by rule or regulation 

3 pursuant to section 8a(5). 

4 ‘‘(B) REASONABLE DISCRETION OF CON5 TRACT MARKET.—Unless otherwise determined 

6 by the Commission by rule or regulation, a 

7 board of trade described in subparagraph (A) 

8 shall have reasonable discretion in establishing 

9 the manner in which the board of trade com10 plies with the core principles described in this 

11 subsection. 

12 ‘‘(2) COMPLIANCE WITH RULES.— 

13 ‘‘(A) IN GENERAL.—The board of trade 

14 shall establish, monitor, and enforce compliance 

15 with the rules of the contract market, includ16 ing— 

17 ‘‘(i) access requirements; 

18 ‘‘(ii) the terms and conditions of any 

19 contracts to be traded on the contract mar20 ket; and 

21 ‘‘(iii) rules prohibiting abusive trade 

22 practices on the contract market. 

23 ‘‘(B) CAPACITY OF CONTRACT MARKET.— 

24 The board of trade shall have the capacity to 

25 detect, investigate, and apply appropriate sancVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00684 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
685 

•S 3217 AMDT 3739 

1 tions to any person that violates any rule of the 

2 contract market. 

3 ‘‘(C) REQUIREMENT OF RULES.—The rules 

4 of the contract market shall provide the board 

5 of trade with the ability and authority to obtain 

6 any necessary information to perform any func7 tion described in this subsection, including the 

8 capacity to carry out such international infor9 mation-sharing agreements as the Commission 

10 may require. 

11 ‘‘(3) CONTRACTS NOT READILY SUBJECT TO

12 MANIPULATION.—The board of trade shall list on 

13 the contract market only contracts that are not 

14 readily susceptible to manipulation. 

15 ‘‘(4) PREVENTION OF MARKET DISRUPTION.— 

16 The board of trade shall have the capacity and re17 sponsibility to prevent manipulation, price distortion, 

18 and disruptions of the delivery or cash-settlement 

19 process through market surveillance, compliance, 

20 and enforcement practices and procedures, includ21 ing— 

22 ‘‘(A) methods for conducting real-time 

23 monitoring of trading; and 

24 ‘‘(B) comprehensive and accurate trade re25 constructions. 


sroberts on DSKH9S0YB1PROD with BILLS
686 

•S 3217 AMDT 3739 

1 ‘‘(5) POSITION LIMITATIONS OR ACCOUNT2 ABILITY.— 

3 ‘‘(A) IN GENERAL.—To reduce the poten4 tial threat of market manipulation or conges5 tion (especially during trading in the delivery 

6 month), the board of trade shall adopt for each 

7 contract of the board of trade, as is necessary 

8 and appropriate, position limitations or position 

9 accountability for speculators. 

10 ‘‘(B) MAXIMUM ALLOWABLE POSITION

11 LIMITATION.—For any contract that is subject 

12 to a position limitation established by the Com13 mission pursuant to section 4a(a), the board of 

14 trade shall set the position limitation of the 

15 board of trade at a level not higher than the po16 sition limitation established by the Commission. 

17 ‘‘(6) EMERGENCY AUTHORITY.—The board of 

18 trade, in consultation or cooperation with the Com19 mission, shall adopt rules to provide for the exercise 

20 of emergency authority, as is necessary and appro21 priate, including the authority— 

22 ‘‘(A) to liquidate or transfer open positions 

23 in any contract; 

24 ‘‘(B) to suspend or curtail trading in any 

25 contract; and 


sroberts on DSKH9S0YB1PROD with BILLS
687 

•S 3217 AMDT 3739 

1 ‘‘(C) to require market participants in any 

2 contract to meet special margin requirements. 

3 ‘‘(7) AVAILABILITY OF GENERAL INFORMA4 TION.—The board of trade shall make available to 

5 market authorities, market participants, and the 

6 public accurate information concerning— 

7 ‘‘(A) the terms and conditions of the con8 tracts of the contract market; and 

9 ‘‘(B)(i) the rules, regulations, and mecha10 nisms for executing transactions on or through 

11 the facilities of the contract market; and 

12 ‘‘(ii) the rules and specifications describing 

13 the operation of the contract market’s— 

14 ‘‘(I) electronic matching platform; or 

15 ‘‘(II) trade execution facility. 

16 ‘‘(8) DAILY PUBLICATION OF TRADING INFOR17 MATION.—The board of trade shall make public 

18 daily information on settlement prices, volume, open 

19 interest, and opening and closing ranges for actively 

20 traded contracts on the contract market. 

21 ‘‘(9) EXECUTION OF TRANSACTIONS.— 

22 ‘‘(A) IN GENERAL.—The board of trade 

23 shall provide a competitive, open, and efficient 

24 market and mechanism for executing trans25 actions that protects the price discovery process 


sroberts on DSKH9S0YB1PROD with BILLS
688 

•S 3217 AMDT 3739 

1 of trading in the centralized market of the 

2 board of trade. 

3 ‘‘(B) RULES.—The rules of the board of 

4 trade may authorize, for bona fide business 

5 purposes— 

6 ‘‘(i) transfer trades or office trades; 

7 ‘‘(ii) an exchange of— 

8 ‘‘(I) futures in connection with a 

9 cash commodity transaction; 

10 ‘‘(II) futures for cash commod11 ities; or 

12 ‘‘(III) futures for swaps; or 

13 ‘‘(iii) a futures commission merchant, 

14 acting as principal or agent, to enter into 

15 or confirm the execution of a contract for 

16 the purchase or sale of a commodity for fu17 ture delivery if the contract is reported, re18 corded, or cleared in accordance with the 

19 rules of the contract market or a deriva20 tives clearing organization. 

21 ‘‘(10) TRADE INFORMATION.—The board of 

22 trade shall maintain rules and procedures to provide 

23 for the recording and safe storage of all identifying 

24 trade information in a manner that enables the con25 tract market to use the information— 


sroberts on DSKH9S0YB1PROD with BILLS
689 

•S 3217 AMDT 3739 

1 ‘‘(A) to assist in the prevention of cus2 tomer and market abuses; and 

3 ‘‘(B) to provide evidence of any violations 

4 of the rules of the contract market. 

5 ‘‘(11) FINANCIAL INTEGRITY OF TRANS6 ACTIONS.—The board of trade shall establish and 

7 enforce— 

8 ‘‘(A) rules and procedures for ensuring the 

9 financial integrity of transactions entered into 

10 on or through the facilities of the contract mar11 ket (including the clearance and settlement of 

12 the transactions with a derivatives clearing or13 ganization); and 

14 ‘‘(B) rules to ensure— 

15 ‘‘(i) the financial integrity of any— 

16 ‘‘(I) futures commission mer17 chant; and 

18 ‘‘(II) introducing broker; and 

19 ‘‘(ii) the protection of customer funds. 

20 ‘‘(12) PROTECTION OF MARKETS AND MARKET

21 PARTICIPANTS.—The board of trade shall establish 

22 and enforce rules— 

23 ‘‘(A) to protect markets and market par24 ticipants from abusive practices committed by 

25 any party, including abusive practices comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00689 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
690 

•S 3217 AMDT 3739 

1 mitted by a party acting as an agent for a par2 ticipant; and 

3 ‘‘(B) to promote fair and equitable trading 

4 on the contract market. 

5 ‘‘(13) DISCIPLINARY PROCEDURES.—The board 

6 of trade shall establish and enforce disciplinary pro7 cedures that authorize the board of trade to dis8 cipline, suspend, or expel members or market par9 ticipants that violate the rules of the board of trade, 

10 or similar methods for performing the same func11 tions, including delegation of the functions to third 

12 parties. 

13 ‘‘(14) DISPUTE RESOLUTION.—The board of 

14 trade shall establish and enforce rules regarding, 

15 and provide facilities for alternative dispute resolu16 tion as appropriate for, market participants and any 

17 market intermediaries. 

18 ‘‘(15) GOVERNANCE FITNESS STANDARDS.— 

19 The board of trade shall establish and enforce ap20 propriate fitness standards for directors, members of 

21 any disciplinary committee, members of the contract 

22 market, and any other person with direct access to 

23 the facility (including any party affiliated with any 

24 person described in this paragraph). 


sroberts on DSKH9S0YB1PROD with BILLS
691 

•S 3217 AMDT 3739 

1 ‘‘(16) CONFLICTS OF INTEREST.—The board of 

2 trade shall establish and enforce rules— 

3 ‘‘(A) to minimize conflicts of interest in 

4 the decision-making process of the contract 

5 market; and 

6 ‘‘(B) to establish a process for resolving 

7 conflicts of interest described in subparagraph 

8 (A). 

9 ‘‘(17) COMPOSITION OF GOVERNING BOARDS OF

10 CONTRACT MARKETS.—The governance arrange11 ments of the board of trade shall be designed to pro12 mote the objectives of market participants. 

13 ‘‘(18) RECORDKEEPING.—The board of trade 

14 shall maintain records of all activities relating to the 

15 business of the contract market— 

16 ‘‘(A) in a form and manner that is accept17 able to the Commission; and 

18 ‘‘(B) for a period of at least 5 years. 

19 ‘‘(19) ANTITRUST CONSIDERATIONS.—Unless 

20 necessary or appropriate to achieve the purposes of 

21 this Act, the board of trade shall not— 

22 ‘‘(A) adopt any rule or taking any action 

23 that results in any unreasonable restraint of 

24 trade; or 


sroberts on DSKH9S0YB1PROD with BILLS
692 

•S 3217 AMDT 3739 

1 ‘‘(B) impose any material anticompetitive 

2 burden on trading on the contract market. 

3 ‘‘(20) SYSTEM SAFEGUARDS.—The board of 

4 trade shall— 

5 ‘‘(A) establish and maintain a program of 

6 risk analysis and oversight to identify and mini7 mize sources of operational risk, through the 

8 development of appropriate controls and proce9 dures, and the development of automated sys10 tems, that are reliable, secure, and have ade11 quate scalable capacity; 

12 ‘‘(B) establish and maintain emergency 

13 procedures, backup facilities, and a plan for dis14 aster recovery that allow for the timely recovery 

15 and resumption of operations and the fulfill16 ment of the responsibilities and obligations of 

17 the board of trade; and 

18 ‘‘(C) periodically conduct tests to verify 

19 that backup resources are sufficient to ensure 

20 continued order processing and trade matching, 

21 price reporting, market surveillance, and main22 tenance of a comprehensive and accurate audit 

23 trail. 

24 ‘‘(21) FINANCIAL RESOURCES.— 


sroberts on DSKH9S0YB1PROD with BILLS
693 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—The board of trade 

2 shall have adequate financial, operational, and 

3 managerial resources to discharge each respon4 sibility of the board of trade. 

5 ‘‘(B) DETERMINATION OF ADEQUACY.— 

6 The financial resources of the board of trade 

7 shall be considered to be adequate if the value 

8 of the financial resources exceeds the total 

9 amount that would enable the contract market 

10 to cover the operating costs of the contract 

11 market for a 1-year period, as calculated on a 

12 rolling basis.’’. 

13 SEC. 736. MARGIN. 

14 Section 8a(7) of the Commodity Exchange Act (7 

15 U.S.C. 12a(7)) is amended— 

16 (1) in subparagraph (C), by striking ‘‘, except17 ing the setting of levels of margin’’; 

18 (2) by redesignating subparagraphs (D) 

19 through (F) as subparagraphs (E) through (G), re20 spectively; and 

21 (3) by inserting after subparagraph (C) the fol22 lowing: 

23 ‘‘(D) margin requirements, provided that 

24 the rules, regulations, or orders shall— 


sroberts on DSKH9S0YB1PROD with BILLS
694 

•S 3217 AMDT 3739 

1 ‘‘(i) be limited to protecting the finan2 cial integrity of the derivatives clearing or3 ganization; 

4 ‘‘(ii) be designed for risk management 

5 purposes to protect the financial integrity 

6 of transactions; and 

7 ‘‘(iii) not set specific margin 

8 amounts;’’. 

9 SEC. 737. POSITION LIMITS. 

10 (a) AGGREGATE POSITION LIMITS.—Section 4a(a) of 

11 the Commodity Exchange Act (7 U.S.C. 6a(a)) is amend12 ed— 

13 (1) by inserting after ‘‘(a)’’ the following: 

14 ‘‘(1) IN GENERAL.—’’; 

15 (2) in the first sentence, by striking ‘‘on elec16 tronic trading facilities with respect to a significant 

17 price discovery contract’’ and inserting ‘‘swaps that 

18 perform or affect a significant price discovery func19 tion with respect to registered entities’’; 

20 (3) in the second sentence— 

21 (A) by inserting ‘‘, including any group or 

22 class of traders,’’ after ‘‘held by any person’’; 

23 and 

24 (B) by striking ‘‘on an electronic trading 

25 facility with respect to a significant price disVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00694 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
695 

•S 3217 AMDT 3739 

1 covery contract,’’ and inserting ‘‘swaps traded 

2 on or subject to the rules of an swaps execution 

3 facility, or swaps not traded on or subject to 

4 the rules of an swaps execution facility that 

5 perform a significant price discovery function 

6 with respect to a registered entity,’’; and 

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

8 ‘‘(2) AGGREGATE POSITION LIMITS.—The Com9 mission shall, by rule or regulation, establish limits 

10 (including related hedge exemption provisions) on 

11 the aggregate number or amount of positions in con12 tracts based on the same underlying commodity (as 

13 defined by the Commission) that may be held by any 

14 person, including any group or class of traders, for 

15 each month across— 

16 ‘‘(A) contracts listed by designated con17 tract markets; 

18 ‘‘(B) with respect to an agreement, con19 tract, or transaction that settles against, or in 

20 relation to, any price (including the daily or 

21 final settlement price) of 1 or more contracts 

22 listed for trading on a registered entity, con23 tracts traded on a foreign board of trade that 

24 provides members or other participants located 

25 in the United States with direct access to the 


sroberts on DSKH9S0YB1PROD with BILLS
696 

•S 3217 AMDT 3739 

1 electronic trading and order matching system of 

2 the foreign board of trade; 

3 ‘‘(C) swaps traded on or subject to the 

4 rules of a swap execution facility; and 

5 ‘‘(D) swaps not traded on or subject to the 

6 rules of a swap execution facility that perform 

7 or affect a significant price discovery function 

8 with respect to a registered entity. 

9 ‘‘(3) SIGNIFICANT PRICE DISCOVERY FUNC10 TION.—In making a determination as to whether a 

11 swap performs or affects a significant price dis12 covery function with respect to registered entities, 

13 the Commission shall consider, as appropriate, the 

14 following factors: 

15 ‘‘(A) PRICE LINKAGE.—The extent to 

16 which the swap uses or otherwise relies on a 

17 daily or final settlement price, or other major 

18 price parameter, of another contract traded on 

19 a registered entity based on the same under20 lying commodity, to value a position, transfer or 

21 convert a position, financially settle a position, 

22 or close out a position. 

23 ‘‘(B) ARBITRAGE.—The extent to which 

24 the price for the swap is sufficiently related to 

25 the price of another contract traded on a regVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00696 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
697 

•S 3217 AMDT 3739 

1 istered entity based on the same underlying 

2 commodity so as to permit market participants 

3 to effectively arbitrage between the markets by 

4 simultaneously maintaining positions or exe5 cuting trades in the swaps on a frequent and 

6 recurring basis. 

7 ‘‘(C) MATERIAL PRICE REFERENCE.—The 

8 extent to which, on a frequent and recurring 

9 basis, bids, offers, or transactions in a contract 

10 traded on a registered entity are directly based 

11 on, or are determined by referencing, the price 

12 generated by the swap. 

13 ‘‘(D) MATERIAL LIQUIDITY.—The extent 

14 to which the volume of swaps being traded in 

15 the commodity is sufficient to have a material 

16 effect on another contract traded on a reg17 istered entity. 

18 ‘‘(E) OTHER MATERIAL FACTORS.—Such 

19 other material factors as the Commission speci20 fies by rule or regulation as relevant to deter21 mine whether a swap serves a significant price 

22 discovery function with respect to a regulated 

23 market. 

24 ‘‘(4) EXEMPTIONS.—The Commission, by rule, 

25 regulation, or order, may exempt, conditionally or 


sroberts on DSKH9S0YB1PROD with BILLS
698 

•S 3217 AMDT 3739 

1 unconditionally, any person or class of persons, any 

2 swap or class of swaps, or any transaction or class 

3 of transactions from any requirement that the Com4 mission establishes under this section with respect to 

5 position limits.’’. 

6 (b) CONFORMING AMENDMENTS.—Section 4a(b) of 

7 the Commodity Exchange Act (7 U.S.C. 6a(b)) is amend8 ed— 

9 (1) in paragraph (1), by striking ‘‘or derivatives 

10 transaction execution facility or facilities or elec11 tronic trading facility’’ and inserting ‘‘or swap exe12 cution facility or facilities’’; and 

13 (2) in paragraph (2), by striking ‘‘or derivatives 

14 transaction execution facility or facilities or elec15 tronic trading facility’’ and inserting ‘‘or swap exe16 cution facility’’. 

17 SEC. 738. FOREIGN BOARDS OF TRADE. 

18 (a) IN GENERAL.—Section 4(b) of the Commodity 

19 Exchange Act (7 U.S.C. 6(b)) is amended— 

20 (1) in the first sentence, by striking ‘‘The Com21 mission’’ and inserting the following: 

22 ‘‘(2) PERSONS LOCATED IN THE UNITED

23 STATES.— 

24 ‘‘(A) IN GENERAL.—The Commission’’; 


sroberts on DSKH9S0YB1PROD with BILLS
699 

•S 3217 AMDT 3739 

1 (2) in the second sentence, by striking ‘‘Such 

2 rules and regulations’’ and inserting the following: 

3 ‘‘(B) DIFFERENT REQUIREMENTS.—Rules 

4 and regulations described in subparagraph 

5 (A)’’; 

6 (3) in the third sentence— 

7 (A) by striking ‘‘No rule or regulation’’ 

8 and inserting the following: 

9 ‘‘(C) PROHIBITION.—Except as provided in 

10 paragraphs (1) and (2), no rule or regulation’’; 

11 (B) by striking ‘‘that (1) requires’’ and in12 serting the following: ‘‘that— 

13 ‘‘(i) requires’’; and 

14 (C) by striking ‘‘market, or (2) governs’’ 

15 and inserting the following: ‘‘market; or 

16 ‘‘(ii) governs’’; and 

17 (4) by inserting before paragraph (2) (as des18 ignated by paragraph (1)) the following: 

19 ‘‘(1) FOREIGN BOARDS OF TRADE.— 

20 ‘‘(A) IN GENERAL.—It shall be unlawful 

21 for a foreign board of trade to provide to the 

22 members of the foreign board of trade or other 

23 participants located in the United States direct 

24 access to the electronic trading and order25 matching system of the foreign board of trade 


sroberts on DSKH9S0YB1PROD with BILLS
700 

•S 3217 AMDT 3739 

1 with respect to an agreement, contract, or 

2 transaction that settles against any price (in3 cluding the daily or final settlement price) of 1 

4 or more contracts listed for trading on a reg5 istered entity, unless the Commission deter6 mines that— 

7 ‘‘(i) the foreign board of trade makes 

8 public daily trading information regarding 

9 the agreement, contract, or transaction 

10 that is comparable to the daily trading in11 formation published by the registered enti12 ty for the 1 or more contracts against 

13 which the agreement, contract, or trans14 action traded on the foreign board of trade 

15 settles; and 

16 ‘‘(ii) the foreign board of trade (or the 

17 foreign futures authority that oversees the 

18 foreign board of trade)— 

19 ‘‘(I) adopts position limits (in20 cluding related hedge exemption provi21 sions) for the agreement, contract, or 

22 transaction that are comparable to the 

23 position limits (including related 

24 hedge exemption provisions) adopted 

25 by the registered entity for the 1 or 


sroberts on DSKH9S0YB1PROD with BILLS
701 

•S 3217 AMDT 3739 

1 more contracts against which the 

2 agreement, contract, or transaction 

3 traded on the foreign board of trade 

4 settles; 

5 ‘‘(II) has the authority to require 

6 or direct market participants to limit, 

7 reduce, or liquidate any position the 

8 foreign board of trade (or the foreign 

9 futures authority that oversees the 

10 foreign board of trade) determines to 

11 be necessary to prevent or reduce the 

12 threat of price manipulation, excessive 

13 speculation as described in section 4a, 

14 price distortion, or disruption of deliv15 ery or the cash settlement process; 

16 ‘‘(III) agrees to promptly notify 

17 the Commission, with regard to the 

18 agreement, contract, or transaction 

19 that settles against any price (includ20 ing the daily or final settlement price) 

21 of 1 or more contracts listed for trad22 ing on a registered entity, of any 

23 change regarding— 


sroberts on DSKH9S0YB1PROD with BILLS
702 

•S 3217 AMDT 3739 

1 ‘‘(aa) the information that 

2 the foreign board of trade will 

3 make publicly available; 

4 ‘‘(bb) the position limits 

5 that the foreign board of trade or 

6 foreign futures authority will 

7 adopt and enforce; 

8 ‘‘(cc) the position reductions 

9 required to prevent manipulation, 

10 excessive speculation as described 

11 in section 4a, price distortion, or 

12 disruption of delivery or the cash 

13 settlement process; and 

14 ‘‘(dd) any other area of in15 terest expressed by the Commis16 sion to the foreign board of trade 

17 or foreign futures authority; 

18 ‘‘(IV) provides information to the 

19 Commission regarding large trader 

20 positions in the agreement, contract, 

21 or transaction that is comparable to 

22 the large trader position information 

23 collected by the Commission for the 1 

24 or more contracts against which the 

25 agreement, contract, or transaction 


sroberts on DSKH9S0YB1PROD with BILLS
703 

•S 3217 AMDT 3739 

1 traded on the foreign board of trade 

2 settles; and 

3 ‘‘(V) provides the Commission 

4 such information as is necessary to 

5 publish reports on aggregate trader 

6 positions for the agreement, contract, 

7 or transaction traded on the foreign 

8 board of trade that are comparable to 

9 such reports on aggregate trader posi10 tions for the 1 or more contracts 

11 against which the agreement, con12 tract, or transaction traded on the 

13 foreign board of trade settles. 

14 ‘‘(B) EXISTING FOREIGN BOARDS OF

15 TRADE.—Subparagraph (A) shall not be effec16 tive with respect to any foreign board of trade 

17 to which, prior to the date of enactment of this 

18 paragraph, the Commission granted direct ac19 cess permission until the date that is 180 days 

20 after that date of enactment.’’. 

21 (b) LIABILITY OF REGISTERED PERSONS TRADING

22 ON A FOREIGN BOARD OF TRADE.—Section 4 of the Com23 modity Exchange Act (7 U.S.C. 6) is amended— 

24 (1) in subsection (a), in the matter preceding 

25 paragraph (1), by inserting ‘‘or by subsection (e)’’ 


sroberts on DSKH9S0YB1PROD with BILLS
704 

•S 3217 AMDT 3739 

1 after ‘‘Unless exempted by the Commission pursuant 

2 to subsection (c)’’; and 

3 (2) by adding at the end the following: 

4 ‘‘(e) LIABILITY OF REGISTERED PERSONS TRADING

5 ON A FOREIGN BOARD OF TRADE.—A person registered 

6 with the Commission, or exempt from registration by the 

7 Commission, under this Act may not be found to have vio8 lated subsection (a) with respect to a transaction in, or 

9 in connection with, a contract of sale of a commodity for 

10 future delivery if the person has reason to believe that the 

11 transaction and the contract is made on or subject to the 

12 rules of a foreign board of trade that has complied with 

13 paragraphs (1) and (2) of subsection (b).’’. 

14 (c) CONTRACT ENFORCEMENT FOR FOREIGN FU15 TURES CONTRACTS.—Section 22(a) of the Commodity Ex16 change Act (7 U.S.C. 25(a)) (as amended by section 739) 

17 is amended by adding at the end the following: 

18 ‘‘(6) CONTRACT ENFORCEMENT FOR FOREIGN

19 FUTURES CONTRACTS.—A contract of sale of a com20 modity for future delivery traded or executed on or 

21 through the facilities of a board of trade, exchange, 

22 or market located outside the United States for pur23 poses of section 4(a) shall not be void, voidable, or 

24 unenforceable, and a party to such a contract shall 

25 not be entitled to rescind or recover any payment 


sroberts on DSKH9S0YB1PROD with BILLS
705 

•S 3217 AMDT 3739 

1 made with respect to the contract, based on the fail2 ure of the foreign board of trade to comply with any 

3 provision of this Act.’’. 

4 SEC. 739. LEGAL CERTAINTY FOR SWAPS. 

5 Section 22(a) of the Commodity Exchange Act (7 

6 U.S.C. 25(a)) is amended by striking paragraph (4) and 

7 inserting the following: 

8 ‘‘(4) CONTRACT ENFORCEMENT BETWEEN ELI9 GIBLE COUNTERPARTIES.— 

10 ‘‘(A) IN GENERAL.—No hybrid instrument 

11 sold to any investor shall be void, voidable, or 

12 unenforceable, and no party to a hybrid instru13 ment shall be entitled to rescind, or recover any 

14 payment made with respect to, the hybrid in15 strument under this section or any other provi16 sion of Federal or State law, based solely on the 

17 failure of the hybrid instrument to comply with 

18 the terms or conditions of section 2(f) or regu19 lations of the Commission. 

20 ‘‘(B) SWAPS.—No agreement, contract, or 

21 transaction between eligible contract partici22 pants or persons reasonably believed to be eligi23 ble contract participants shall be void, voidable, 

24 or unenforceable, and no party to an agree25 ment, contract, or transaction shall be entitled 


sroberts on DSKH9S0YB1PROD with BILLS
706 

•S 3217 AMDT 3739 

1 to rescind, or recover any payment made with 

2 respect to, the agreement, contract, or trans3 action under this section or any other provision 

4 of Federal or State law, based solely on the fail5 ure of the agreement, contract, or transaction— 

6 ‘‘(i) to meet the definition of a swap 

7 under section 1a; or 

8 ‘‘(ii) to be cleared in accordance with 

9 section 2(h)(1). 

10 ‘‘(5) LEGAL CERTAINTY FOR LONG-TERM

11 SWAPS ENTERED INTO BEFORE THE DATE OF EN12 ACTMENT OF THE WALL STREET TRANSPARENCY

13 AND ACCOUNTABILITY ACT OF 2010.— 

14 ‘‘(A) IN GENERAL.—Any swap entered into 

15 before the date of enactment of the Wall Street 

16 Transparency and Accountability Act of 2010, 

17 the terms of which have not expired as of the 

18 date of enactment, shall not be subject to the 

19 mandatory clearing requirements under this 

20 Act. 

21 ‘‘(B) EFFECT ON SWAPS.—Unless specifi22 cally reserved in the applicable bilateral trading 

23 agreement, neither the enactment of the Wall 

24 Street Transparency and Accountability Act of 

25 2010, nor any requirement under that Act or 


sroberts on DSKH9S0YB1PROD with BILLS
707 

•S 3217 AMDT 3739 

1 an amendment made by that Act, shall con2 stitute a termination event, force majeure, ille3 gality, increased costs, regulatory change, or 

4 similar event under a bilateral trading agree5 ment (including any related credit support ar6 rangement) that would permit a party to termi7 nate, renegotiate, modify, amend, or supple8 ment 1 or more transactions under the bilateral 

9 trading agreement. 

10 ‘‘(C) POSITION LIMITS.—Any position limit 

11 established under the Wall Street Transparency 

12 and Accountability Act of 2010 shall not apply 

13 to a position acquired in good faith prior to the 

14 effective date of any rule, regulation, or order 

15 under the Act that establishes the position 

16 limit; provided, however, that such positions 

17 shall be attributed to the trader if the trader’s 

18 position is increased after the effective date 

19 such position limit rule, regulation, or order.’’. 

20 SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS. 

21 Sections 408 and 409 of the Federal Deposit Insur22 ance Corporation Improvement Act of 1991 (12 U.S.C. 

23 4421, 4422) are repealed. 


sroberts on DSKH9S0YB1PROD with BILLS
708 

•S 3217 AMDT 3739 

1 SEC. 741. ENFORCEMENT. 

2 (a) ENFORCEMENT AUTHORITY.—The Commodity 

3 Exchange Act is amended by inserting after section 4b (7 

4 U.S.C. 6b) the following: 

5 ‘‘SEC. 4b–1. ENFORCEMENT AUTHORITY. 

6 ‘‘(a) COMMISSION.—Except as provided in sub7 sections (b), (c), and (d), the Commission shall have pri8 mary authority to enforce the amendments made by the 

9 Wall Street Transparency and Accountability Act of 2010 

10 with respect to any person. 

11 ‘‘(b) APPROPRIATE FEDERAL BANKING AGENCIES.— 

12 The appropriate Federal banking agency for swap dealers 

13 or major swap participants that are depository institu14 tions, as that term is defined under section 3 of the Fed15 eral Deposit Insurance Act (12 U.S.C. 1813), shall have 

16 exclusive authority to enforce the provisions of section 

17 4s(e) and other prudential requirements of this Act, with 

18 respect to depository institutions that are swap dealers or 

19 major swap participants. 

20 ‘‘(c) REFERRALS.— 

21 ‘‘(1) PRUDENTIAL REGULATORS.—If the pru22 dential regulator for a swap dealer or major swap 

23 participant has cause to believe that the swap dealer 

24 or major swap participant, or any affiliate or divi25 sion of the swap dealer or major swap participant, 

26 may have engaged in conduct that constitutes a vioVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00708 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
709 

•S 3217 AMDT 3739 

1 lation of the nonprudential requirements of this Act 

2 (including section 4s or rules adopted by the Com3 mission under that section), the prudential regulator 

4 shall promptly notify the Commission in a written 

5 report that includes— 

6 ‘‘(A) a request that the Commission ini7 tiate an enforcement proceeding under this Act; 

8 and 

9 ‘‘(B) an explanation of the facts and cir10 cumstances that led to the preparation of the 

11 written report. 

12 ‘‘(2) COMMISSION.—If the Commission has 

13 cause to believe that a swap dealer or major swap 

14 participant that has a prudential regulator may have 

15 engaged in conduct that constitutes a violation of 

16 any prudential requirement of section 4s or rules 

17 adopted by the Commission under that section, the 

18 Commission may notify the prudential regulator of 

19 the conduct in a written report that includes— 

20 ‘‘(A) a request that the prudential regu21 lator initiate an enforcement proceeding under 

22 this Act or any other Federal law (including 

23 regulations); and 

24 ‘‘(B) an explanation of the concerns of the 

25 Commission, and a description of the facts and 


sroberts on DSKH9S0YB1PROD with BILLS
710 

•S 3217 AMDT 3739 

1 circumstances, that led to the preparation of 

2 the written report. 

3 ‘‘(d) BACKSTOP ENFORCEMENT AUTHORITY.— 

4 ‘‘(1) INITIATION OF ENFORCEMENT PRO5 CEEDING BY PRUDENTIAL REGULATOR.—If the 

6 Commission does not initiate an enforcement pro7 ceeding before the end of the 90-day period begin8 ning on the date on which the Commission receives 

9 a written report under subsection (c)(1), the pruden10 tial regulator may initiate an enforcement pro11 ceeding. 

12 ‘‘(2) INITIATION OF ENFORCEMENT PRO13 CEEDING BY COMMISSION.—If the prudential regu14 lator does not initiate an enforcement proceeding be15 fore the end of the 90-day period beginning on the 

16 date on which the prudential regulator receives a 

17 written report under subsection (c)(2), the Commis18 sion may initiate an enforcement proceeding.’’. 

19 (b) CONFORMING AMENDMENTS.— 

20 (1) Section 4b of the Commodity Exchange Act 

21 (7 U.S.C. 6b) is amended— 

22 (A) in subsection (a)(2), by striking ‘‘or 

23 other agreement, contract, or transaction sub24 ject to paragraphs (1) and (2) of section 

25 5a(g),’’ and inserting ‘‘or swap,’’; 


sroberts on DSKH9S0YB1PROD with BILLS
711 

•S 3217 AMDT 3739 

1 (B) in subsection (b), by striking ‘‘or other 

2 agreement, contract or transaction subject to 

3 paragraphs (1) and (2) of section 5a(g),’’ and 

4 inserting ‘‘or swap,’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(e) It shall be unlawful for any person, directly or 

7 indirectly, by the use of any means or instrumentality of 

8 interstate commerce, or of the mails, or of any facility of 

9 any registered entity, in or in connection with any order 

10 to make, or the making of, any contract of sale of any 

11 commodity for future delivery (or option on such a con12 tract), or any swap, on a group or index of securities (or 

13 any interest therein or based on the value thereof)— 

14 ‘‘(1) to employ any device, scheme, or artifice to 

15 defraud; 

16 ‘‘(2) to make any untrue statement of a mate17 rial fact or to omit to state a material fact necessary 

18 in order to make the statements made, in the light 

19 of the circumstances under which they were made, 

20 not misleading; or 

21 ‘‘(3) to engage in any act, practice, or course of 

22 business which operates or would operate as a fraud 

23 or deceit upon any person.’’. 

24 (2) Section 4c(a)(1) of the Commodity Ex25 change Act (7 U.S.C. 6c(a)(1)) is amended by inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00711 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
712 

•S 3217 AMDT 3739 

1 serting ‘‘or swap’’ before ‘‘if the transaction is used 

2 or may be used’’. 

3 (3) Section 6(c) of the Commodity Exchange 

4 Act (7 U.S.C. 9) is amended in the first sentence by 

5 inserting ‘‘or of any swap,’’ before ‘‘or has willfully 

6 made’’. 

7 (4) Section 6(d) of the Commodity Exchange 

8 Act (7 U.S.C. 13b) is amended in the first sentence, 

9 in the matter preceding the proviso, by inserting ‘‘or 

10 of any swap,’’ before ‘‘or otherwise is violating’’. 

11 (5) Section 6c(a) of the Commodity Exchange 

12 Act (7 U.S.C. 13a-1(a)) is amended in the matter 

13 preceding the proviso by inserting ‘‘or any swap’’ 

14 after ‘‘commodity for future delivery’’. 

15 (6) Section 9 of the Commodity Exchange Act 

16 (7 U.S.C. 13) is amended— 

17 (A) in subsection (a)— 

18 (i) in paragraph (2), by inserting ‘‘or 

19 of any swap,’’ before ‘‘or to corner’’; and 

20 (ii) in paragraph (4), by inserting 

21 ‘‘swap data repository,’’ before ‘‘or futures 

22 association’’ and 

23 (B) in subsection (e)(1)— 


sroberts on DSKH9S0YB1PROD with BILLS
713 

•S 3217 AMDT 3739 

1 (i) by inserting ‘‘swap data reposi2 tory,’’ before ‘‘or registered futures asso3 ciation’’; and 

4 (ii) by inserting ‘‘, or swaps,’’ before 

5 ‘‘on the basis’’. 

6 (7) Section 9(a) of the Commodity Exchange 

7 Act (7 U.S.C. 13(a)) is amended by adding at the 

8 end the following: 

9 ‘‘(6) Any person to abuse the end user clearing 

10 exemption under section 2(h)(4), as determined by 

11 the Commission.’’. 

12 (8) Section 8(b) of the Federal Deposit Insur13 ance Act (12 U.S.C. 1818(b)) is amended by adding 

14 at the end the following: 

15 ‘‘(11) SWAPS.— 

16 ‘‘(A) IN GENERAL.—Subject to subpara17 graph (B), this section shall apply to any swap 

18 dealer, major swap participant, security-based 

19 swap dealer, major security-based swap partici20 pant, derivatives clearing organization, swap 

21 data repository, or swap execution facility, re22 gardless of whether the dealer, participant, or23 ganization, repository, or facility is an insured 

24 depository institution, for which the Board, the 

25 Corporation, or the Office of the Comptroller of 


sroberts on DSKH9S0YB1PROD with BILLS
714 

•S 3217 AMDT 3739 

1 the Currency is the appropriate Federal bank2 ing agency or prudential regulator for purposes 

3 of the amendments made by the Wall Street 

4 Transparency and Accountability Act of 2010. 

5 ‘‘(B) LIMITATION.—The authority de6 scribed in subparagraph (A) shall be limited by, 

7 and exercised in accordance with, section 4b–1 

8 of the Commodity Exchange Act.’’. 

9 (9) Section 2(c)(2)(B) of the Commodity Ex10 change Act (7 U.S.C. 2(c)(2)(B)) is amended— 

11 (A) by striking ‘‘(dd),’’ each place it ap12 pears; 

13 (B) in clause (iii), by inserting ‘‘, and ac14 counts or pooled investment vehicles described 

15 in clause (vi),’’ before ‘‘shall be subject to’’; and 

16 (C) by adding at the end the following: 

17 ‘‘(vi) This Act applies to, and the 

18 Commission shall have jurisdiction over, an 

19 account or pooled investment vehicle that 

20 is offered for the purpose of trading, or 

21 that trades, any agreement, contract, or 

22 transaction in foreign currency described 

23 in clause (i).’’. 

24 (10) Section 2(c)(2)(C) of the Commodity Ex25 change Act (7 U.S.C. 2(c)(2)(C)) is amended— 


sroberts on DSKH9S0YB1PROD with BILLS
715 

•S 3217 AMDT 3739 

1 (A) by striking ‘‘(dd),’’ each place it ap2 pears; 

3 (B) in clause (ii)(I), by inserting ‘‘, and ac4 counts or pooled investment vehicles described 

5 in clause (vii),’’ before ‘‘shall be subject to’’; 

6 and 

7 (C) by adding at the end the following: 

8 ‘‘(vii) This Act applies to, and the 

9 Commission shall have jurisdiction over, an 

10 account or pooled investment vehicle that 

11 is offered for the purpose of trading, or 

12 that trades, any agreement, contract, or 

13 transaction in foreign currency described 

14 in clause (i).’’. 

15 (11) Section 1a(19)(A)(iv)(II) of the Com16 modity Exchange Act (7 U.S.C. 1a(19)(A)(iv)(II)) 

17 (as redesignated by section 721(a)(1)) is amended 

18 by inserting before the semicolon at the end the fol19 lowing: ‘‘provided, however, that for purposes of sec20 tion 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the 

21 term ‘eligible contract participant’ shall not include 

22 a commodity pool in which any participant is not 

23 otherwise an eligible contract participant’’. 


sroberts on DSKH9S0YB1PROD with BILLS
716 

•S 3217 AMDT 3739 

1 SEC. 742. RETAIL COMMODITY TRANSACTIONS. 

2 (a) IN GENERAL.—Section 2(c) of the Commodity 

3 Exchange Act (7 U.S.C. 2(c)) is amended— 

4 (1) in paragraph (1), by striking ‘‘(to the extent 

5 provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))’’ 

6 and inserting ‘‘, 5b, or 12(e)(2)(B))’’; and 

7 (2) in paragraph (2), by adding at the end the 

8 following: 

9 ‘‘(D) RETAIL COMMODITY TRANS10 ACTIONS.— 

11 ‘‘(i) APPLICABILITY.—Except as pro12 vided in clause (ii), this subparagraph shall 

13 apply to any agreement, contract, or trans14 action in any commodity that is— 

15 ‘‘(I) entered into with, or offered 

16 to (even if not entered into with), a 

17 person that is not an eligible contract 

18 participant or eligible commercial en19 tity; and 

20 ‘‘(II) entered into, or offered 

21 (even if not entered into), on a lever22 aged or margined basis, or financed 

23 by the offeror, the counterparty, or a 

24 person acting in concert with the of25 feror or counterparty on a similar 

26 basis. 


sroberts on DSKH9S0YB1PROD with BILLS
717 

•S 3217 AMDT 3739 

1 ‘‘(ii) EXCEPTIONS.—This subpara2 graph shall not apply to— 

3 ‘‘(I) an agreement, contract, or 

4 transaction described in paragraph (1) 

5 or subparagraphs (A), (B), or (C), in6 cluding any agreement, contract, or 

7 transaction specifically excluded from 

8 subparagraph (A), (B), or (C); 

9 ‘‘(II) any security; 

10 ‘‘(III) a contract of sale that— 

11 ‘‘(aa) results in actual deliv12 ery within 28 days or such other 

13 period as the Commission may 

14 determine by rule or regulation 

15 based upon the typical commer16 cial practice in cash or spot mar17 kets for the commodity involved; 

18 or 

19 ‘‘(bb) creates an enforceable 

20 obligation to deliver between a 

21 seller and a buyer that have the 

22 ability to deliver and accept deliv23 ery, respectively, in connection 

24 with the line of business of the 

25 seller and buyer; or 


sroberts on DSKH9S0YB1PROD with BILLS
718 

•S 3217 AMDT 3739 

1 ‘‘(IV) an agreement, contract, or 

2 transaction that is listed on a national 

3 securities exchange registered under 

4 section 6(a) of the Securities Ex5 change Act of 1934 (15 U.S.C. 

6 78f(a)); or 

7 ‘‘(V) an identified banking prod8 uct, as defined in section 402(b) of 

9 the Legal Certainty for Bank Prod10 ucts Act of 2000 (7 U.S.C.27(b)). 

11 ‘‘(iii) ENFORCEMENT.—Sections 4(a), 

12 4(b), and 4b apply to any agreement, con13 tract, or transaction described in clause (i), 

14 as if the agreement, contract, or trans15 action was a contract of sale of a com16 modity for future delivery. 

17 ‘‘(iv) ELIGIBLE COMMERCIAL ENTI18 TY.—For purposes of this subparagraph, 

19 an agricultural producer, packer, or han20 dler shall be considered to be an eligible 

21 commercial entity for any agreement, con22 tract, or transaction for a commodity in 

23 connection with the line of business of the 

24 agricultural producer, packer, or handler. 


sroberts on DSKH9S0YB1PROD with BILLS
719 

•S 3217 AMDT 3739 

1 ‘‘(v) ACTUAL DELIVERY.—For pur2 poses of clause (ii)(III), the term ‘actual 

3 delivery’ does not include delivery to a 

4 third party in a financed transaction in 

5 which the commodity is held as collat6 eral.’’. 

7 (b) GRAMM-LEACH-BLILEY ACT.—Section 206(a) of 

8 the Gramm-Leach-Bliley Act (Public Law 106–102; 15 

9 U.S.C. 78c note) is amended, in the matter preceding 

10 paragraph (1), by striking ‘‘For purposes of’’ and insert11 ing ‘‘Except as provided in subsection (e), for purposes 

12 of’’. 

13 (c) CONFORMING AMENDMENTS RELATING TO RE14 TAIL FOREIGN EXCHANGE TRANSACTIONS.— 

15 (1) Section 2(c)(2)(B)(i)(II) of the Commodity 

16 Exchange Act (7 U.S.C. 2(c)(2)(B)(i)(II)) is amend17 ed— 

18 (A) in item (aa), by inserting ‘‘United 

19 States’’ before ‘‘financial institution’’; 

20 (B) by striking items (dd) and (ff); 

21 (C) by redesignating items (ee) and (gg) as 

22 items (dd) and (ff), respectively; and 

23 (D) in item (dd) (as so redesignated), by 

24 striking the semicolon and inserting ‘‘; or’’. 


sroberts on DSKH9S0YB1PROD with BILLS
720 

•S 3217 AMDT 3739 

1 (2) Section 2(c)(2) of the Commodity Exchange 

2 Act (7 U.S.C. 2(c)(2)) (as amended by subsection 

3 (a)(2)) is amended by adding at the end the fol4 lowing: 

5 ‘‘(E) PROHIBITION.— 

6 ‘‘(i) DEFINITION OF FEDERAL REGU7 LATORY AGENCY.—In this subparagraph, 

8 the term ‘Federal regulatory agency’ 

9 means— 

10 ‘‘(I) the Commission; 

11 ‘‘(II) the Securities and Ex12 change Commission; 

13 ‘‘(III) an appropriate Federal 

14 banking agency; 

15 ‘‘(IV) the National Credit Union 

16 Association; and 

17 ‘‘(V) the Farm Credit Adminis18 tration. 

19 ‘‘(ii) PROHIBITION.—A person de20 scribed in subparagraph (B)(i)(II) for 

21 which there is a Federal regulatory agency 

22 shall not offer to, or enter into with, a per23 son that is not an eligible contract partici24 pant, any agreement, contract, or trans25 action in foreign currency described in subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00720 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
721 

•S 3217 AMDT 3739 

1 paragraph (B)(i)(I) except pursuant to a 

2 rule or regulation of a Federal regulatory 

3 agency allowing the agreement, contract, 

4 or transaction under such terms and condi5 tions as the Federal regulatory agency 

6 shall prescribe. 

7 ‘‘(iii) REQUIREMENTS OF RULES AND

8 REGULATIONS.— 

9 ‘‘(I) IN GENERAL.—The rules 

10 and regulations described in clause 

11 (ii) shall prescribe appropriate re12 quirements with respect to— 

13 ‘‘(aa) disclosure; 

14 ‘‘(bb) recordkeeping; 

15 ‘‘(cc) capital and margin; 

16 ‘‘(dd) reporting; 

17 ‘‘(ee) business conduct; 

18 ‘‘(ff) documentation; and 

19 ‘‘(gg) such other standards 

20 or requirements as the Federal 

21 regulatory agency shall determine 

22 to be necessary. 

23 ‘‘(II) TREATMENT.—The rules or 

24 regulations described in clause (ii) 

25 shall treat all agreements, contracts, 


sroberts on DSKH9S0YB1PROD with BILLS
722 

•S 3217 AMDT 3739 

1 and transactions in foreign currency 

2 described in subparagraph (B)(i)(I), 

3 and all agreements, contracts, and 

4 transactions in foreign currency that 

5 are functionally or economically simi6 lar to agreements, contracts, or trans7 actions described in subparagraph 

8 (B)(i)(I), similarly.’’. 

9 SEC. 743. OTHER AUTHORITY. 

10 Unless otherwise provided by the amendments made 

11 by this subtitle, the amendments made by this subtitle do 

12 not divest any appropriate Federal banking agency, the 

13 Commodity Futures Trading Commission, the Securities 

14 and Exchange Commission, or other Federal or State 

15 agency of any authority derived from any other applicable 

16 law. 

17 SEC. 744. RESTITUTION REMEDIES. 

18 Section 6c(d) of the Commodity Exchange Act (7 

19 U.S.C. 13a–1(d)) is amended by adding at the end the 

20 following: 

21 ‘‘(3) EQUITABLE REMEDIES.—In any action 

22 brought under this section, the Commission may 

23 seek, and the court shall have jurisdiction to impose, 

24 on a proper showing, on any person found in the acVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00722 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
723 

•S 3217 AMDT 3739 

1 tion to have committed any violation, equitable rem2 edies including— 

3 ‘‘(A) restitution to persons who have sus4 tained losses proximately caused by such viola5 tion (in the amount of such losses); and 

6 ‘‘(B) disgorgement of gains received in 

7 connection with such violation.’’. 

8 SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTI9 TIES. 

10 (a) CORE PRINCIPLES FOR CONTRACT MARKETS.— 

11 Section 5(d) of the Commodity Exchange Act (7 U.S.C. 

12 7(d)) (as amended by section 735(b)) is amended by strik13 ing paragraph (1) and inserting the following: 

14 ‘‘(1) DESIGNATION.— 

15 ‘‘(A) IN GENERAL.—To be designated as, 

16 and to maintain the designation of, a board of 

17 trade as a contract market, the board of trade 

18 shall comply with— 

19 ‘‘(i) the core principles described in 

20 this subsection; and 

21 ‘‘(ii) any requirement that the Com22 mission may impose by rule or regulation 

23 pursuant to section 8a(5). 

24 ‘‘(B) DISCRETION OF BOARD OF TRADE.— 

25 Unless the Commission determines otherwise by 


sroberts on DSKH9S0YB1PROD with BILLS
724 

•S 3217 AMDT 3739 

1 rule or regulation, the board of trade shall have 

2 reasonable discretion in establishing the manner 

3 by which the board of trade complies with each 

4 core principle.’’. 

5 (b) CORE PRINCIPLES.—Section 5b(c)(2) of the 

6 Commodity Exchange Act (7 U.S.C. 7a–1(c)(2)) (as 

7 amended by section 725(c)) is amended by striking sub8 paragraph (A) and inserting the following: 

9 ‘‘(A) REGISTRATION.— 

10 ‘‘(i) IN GENERAL.—To be registered 

11 and to maintain registration as a deriva12 tives clearing organization, a derivatives 

13 clearing organization shall comply with— 

14 ‘‘(I) the core principles described 

15 in this paragraph; and 

16 ‘‘(II) any requirement that the 

17 Commission may impose by rule or 

18 regulation pursuant to section 8a(5). 

19 ‘‘(ii) DISCRETION OF COMMISSION.— 

20 Unless the Commission determines other21 wise by rule or regulation, a derivatives 

22 clearing organization shall have reasonable 

23 discretion in establishing the manner by 

24 which the derivatives clearing organization 

25 complies with each core principle.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
725 

•S 3217 AMDT 3739 

1 (c) EFFECT OF INTERPRETATION.—Section 5c(a) of 

2 the Commodity Exchange Act (7 U.S.C. 7a–2(a)) is 

3 amended by striking paragraph (2) and inserting the fol4 lowing: 

5 ‘‘(2) EFFECT OF INTERPRETATION.—An inter6 pretation issued under paragraph (1) may provide 

7 the exclusive means for complying with each section 

8 described in paragraph (1).’’. 

9 (d) NEW CONTRACTS, NEW RULES, AND RULE

10 AMENDMENTS.— 

11 (1) IN GENERAL.—A registered entity may elect 

12 to list for trading or accept for clearing any new 

13 contract, or other instrument, or may elect to ap14 prove and implement any new rule or rule amend15 ment, by providing to the Commission (and the Sec16 retary of the Treasury, in the case of a contract of 

17 sale of a government security for future delivery (or 

18 option on such a contract) or a rule or rule amend19 ment specifically related to such a contract) a writ20 ten certification that the new contract or instrument 

21 or clearing of the new contract or instrument, new 

22 rule, or rule amendment complies with this Act (in23 cluding regulations under this Act). 

24 (2) RULE REVIEW.—The new rule or rule 

25 amendment described in paragraph (1) shall become 


sroberts on DSKH9S0YB1PROD with BILLS
726 

•S 3217 AMDT 3739 

1 effective, pursuant to the certification of the reg2 istered entity, on the date that is 10 business days 

3 after the date on which the Commission receives the 

4 certification (or such shorter period as determined 

5 by the Commission by rule or regulation) unless the 

6 Commission notifies the registered entity within such 

7 time that it is staying the certification because there 

8 exist novel or complex issues that require additional 

9 time to analyze, an inadequate explanation by the 

10 submitting registered entity, or a potential inconsist11 ency with this Act (including regulations under this 

12 Act). 

13 (3) STAY OF CERTIFICATION FOR RULES.— 

14 (A) A notification by the Commission pur15 suant to paragraph (2) shall stay the certifi16 cation of the new rule or rule amendment for 

17 up to an additional 90 days from the date of 

18 the notification. 

19 (B) A rule or rule amendment subject to 

20 a stay pursuant to subparagraph (A) shall be21 come effective, pursuant to the certification of 

22 the registered entity, at the expiration of the 

23 period described in subparagraph (A) unless the 

24 Commission— 


sroberts on DSKH9S0YB1PROD with BILLS
727 

•S 3217 AMDT 3739 

1 (i) withdraws the stay prior to that 

2 time; or 

3 (ii) notifies the registered entity dur4 ing such period that it objects to the pro5 posed certification on the grounds that it is 

6 inconsistent with this Act (including regu7 lations under this Act). 

8 (4) PRIOR APPROVAL.— 

9 (A) IN GENERAL.—A registered entity may 

10 request that the Commission grant prior ap11 proval to any new contract or other instrument, 

12 new rule, or rule amendment. 

13 (B) PRIOR APPROVAL REQUIRED.—Not14 withstanding any other provision of this section, 

15 a designated contract market shall submit to 

16 the Commission for prior approval each rule 

17 amendment that materially changes the terms 

18 and conditions, as determined by the Commis19 sion, in any contract of sale for future delivery 

20 of a commodity specifically enumerated in sec21 tion 1a(10) (or any option thereon) traded 

22 through its facilities if the rule amendment ap23 plies to contracts and delivery months which 

24 have already been listed for trading and have 

25 open interest. 


sroberts on DSKH9S0YB1PROD with BILLS
728 

•S 3217 AMDT 3739 

1 (C) DEADLINE.—If prior approval is re2 quested under subparagraph (A), the Commis3 sion shall take final action on the request not 

4 later than 90 days after submission of the re5 quest, unless the person submitting the request 

6 agrees to an extension of the time limitation es7 tablished under this subparagraph. 

8 (5) APPROVAL.— 

9 (A) RULES.—The Commission shall ap10 prove a new rule, or rule amendment, of a reg11 istered entity unless the Commission finds that 

12 the new rule, or rule amendment, is incon13 sistent with this subtitle (including regulations). 

14 (B) CONTRACTS AND INSTRUMENTS.—The 

15 Commission shall approve a new contract or 

16 other instrument unless the Commission finds 

17 that the new contract or other instrument 

18 would violate this subtitle (including regula19 tions). 

20 (C) SPECIAL RULE FOR REVIEW AND AP21 PROVAL OF EVENT CONTRACTS AND SWAPS

22 CONTRACTS.— 

23 (i) EVENT CONTRACTS.—In connec24 tion with the listing of agreements, con25 tracts, transactions, or swaps in excluded 


sroberts on DSKH9S0YB1PROD with BILLS
729 

•S 3217 AMDT 3739 

1 commodities that are based upon the oc2 currence, extent of an occurrence, or con3 tingency (other than a change in the price, 

4 rate, value, or levels of a commodity de5 scribed in section 1a(2)(i)), by a des6 ignated contract market or swap execution 

7 facility, the Commission may determine 

8 that such agreements, contracts, or trans9 actions are contrary to the public interest 

10 if the agreements, contracts, or trans11 actions involve— 

12 (I) activity that is unlawful under 

13 any Federal or State law; 

14 (II) terrorism; 

15 (III) assassination; 

16 (IV) war; 

17 (V) gaming; or 

18 (VI) other similar activity deter19 mined by the Commission, by rule or 

20 regulation, to be contrary to the pub21 lic interest. 

22 (ii) PROHIBITION.—No agreement, 

23 contract, or transaction determined by the 

24 Commission to be contrary to the public 

25 interest under clause (i) may be listed or 


sroberts on DSKH9S0YB1PROD with BILLS
730 

•S 3217 AMDT 3739 

1 made available for clearing or trading on 

2 or through a registered entity. 

3 (iii) SWAPS CONTRACTS.— 

4 (I) IN GENERAL.—In connection 

5 with the listing of a swap for clearing 

6 by a derivatives clearing organization, 

7 the Commission shall determine, upon 

8 request or on its own motion, the ini9 tial eligibility, or the continuing quali10 fication, of a derivatives clearing orga11 nization to clear such a swap under 

12 those criteria, conditions, or rules that 

13 the Commission, in its discretion, de14 termines. 

15 (II) REQUIREMENTS.—Any such 

16 criteria, conditions, or rules shall con17 sider— 

18 (aa) the financial integrity 

19 of the derivatives clearing organi20 zation; and 

21 (bb) any other factors which 

22 the Commission determines may 

23 be appropriate. 

24 (iv) DEADLINE.—The Commission 

25 shall take final action under clauses (i) 


sroberts on DSKH9S0YB1PROD with BILLS
731 

•S 3217 AMDT 3739 

1 and (ii) in not later than 90 days from the 

2 commencement of its review unless the 

3 party seeking to offer the contract or swap 

4 agrees to an extension of this time limita5 tion. 

6 (e) VIOLATION OF CORE PRINCIPLES.—Section 5c of 

7 the Commodity Exchange Act (7 U.S.C. 7a–2) is amended 

8 by striking subsection (d). 

9 SEC. 746. INSIDER TRADING. 

10 Section 4c(a) of the Commodity Exchange Act (7 

11 U.S.C. 6c(a)) is amended by adding at the end the fol12 lowing: 

13 ‘‘(3) CONTRACT OF SALE.—It shall be unlawful 

14 for any employee or agent of any department or 

15 agency of the Federal Government who, by virtue of 

16 the employment or position of the employee or 

17 agent, acquires information that may affect or tend 

18 to affect the price of any commodity in interstate 

19 commerce, or for future delivery, or any swap, and 

20 which information has not been disseminated by the 

21 department or agency of the Federal Government 

22 holding or creating the information in a manner 

23 which makes it generally available to the trading 

24 public, or disclosed in a criminal, civil, or adminis25 trative hearing, or in a congressional, administrative, 


sroberts on DSKH9S0YB1PROD with BILLS
732 

•S 3217 AMDT 3739 

1 or Government Accountability Office report, hearing, 

2 audit, or investigation, to use the information in his 

3 personal capacity and for personal gain to enter 

4 into, or offer to enter into— 

5 ‘‘(A) a contract of sale of a commodity for 

6 future delivery (or option on such a contract); 

7 ‘‘(B) an option (other than an option exe8 cuted or traded on a national securities ex9 change registered pursuant to section 6(a) of 

10 the Securities Exchange Act of 1934 (15 

11 U.S.C. 78f(a)); or 

12 ‘‘(C) a swap. 

13 ‘‘(4) NONPUBLIC INFORMATION.— 

14 ‘‘(A) IMPARTING OF NONPUBLIC INFORMA15 TION.—It shall be unlawful for any employee or 

16 agent of any department or agency of the Fed17 eral Government who, by virtue of the employ18 ment or position of the employee or agent, ac19 quires information that may affect or tend to 

20 affect the price of any commodity in interstate 

21 commerce, or for future delivery, or any swap, 

22 and which information has not been dissemi23 nated by the department or agency of the Fed24 eral Government holding or creating the infor25 mation in a manner which makes it generally 


sroberts on DSKH9S0YB1PROD with BILLS
733 

•S 3217 AMDT 3739 

1 available to the trading public, or disclosed in 

2 a criminal, civil, or administrative hearing, or in 

3 a congressional, administrative, or Government 

4 Accountability Office report, hearing, audit, or 

5 investigation, to impart the information in his 

6 personal capacity and for personal gain with in7 tent to assist another person, directly or indi8 rectly, to use the information to enter into, or 

9 offer to enter into— 

10 ‘‘(i) a contract of sale of a commodity 

11 for future delivery (or option on such a 

12 contract); 

13 ‘‘(ii) an option (other than an option 

14 executed or traded on a national securities 

15 exchange registered pursuant to section 

16 6(a) of the Securities Exchange Act of 

17 1934 (15 U.S.C. 78f(a)); or 

18 ‘‘(iii) a swap. 

19 ‘‘(B) KNOWING USE.—It shall be unlawful 

20 for any person who receives information im21 parted by any employee or agent of any depart22 ment or agency of the Federal Government as 

23 described in subparagraph (A) to knowingly use 

24 such information to enter into, or offer to enter 

25 into— 


sroberts on DSKH9S0YB1PROD with BILLS
734 

•S 3217 AMDT 3739 

1 ‘‘(i) a contract of sale of a commodity 

2 for future delivery (or option on such a 

3 contract); 

4 ‘‘(ii) an option (other than an option 

5 executed or traded on a national securities 

6 exchange registered pursuant to section 

7 6(a) of the Securities Exchange Act of 

8 1934 (15 U.S.C. 78f(a)); or 

9 ‘‘(iii) a swap. 

10 ‘‘(C) THEFT OF NONPUBLIC INFORMA11 TION.—It shall be unlawful for any person to 

12 steal, convert, or misappropriate, by any means 

13 whatsoever, information held or created by any 

14 department or agency of the Federal Govern15 ment that may affect or tend to affect the price 

16 of any commodity in interstate commerce, or 

17 for future delivery, or any swap, where such 

18 person knows, or acts in reckless disregard of 

19 the fact, that such information has not been 

20 disseminated by the department or agency of 

21 the Federal Government holding or creating the 

22 information in a manner which makes it gen23 erally available to the trading public, or dis24 closed in a criminal, civil, or administrative 

25 hearing, or in a congressional, administrative, 


sroberts on DSKH9S0YB1PROD with BILLS
735 

•S 3217 AMDT 3739 

1 or Government Accountability Office report, 

2 hearing, audit, or investigation, and to use such 

3 information, or to impart such information with 

4 the intent to assist another person, directly or 

5 indirectly, to use such information to enter into, 

6 or offer to enter into— 

7 ‘‘(i) a contract of sale of a commodity 

8 for future delivery (or option on such a 

9 contract); 

10 ‘‘(ii) an option (other than an option 

11 executed or traded on a national securities 

12 exchange registered pursuant to section 

13 6(a) of the Securities Exchange Act of 

14 1934 (15 U.S.C. 78f(a)); or 

15 ‘‘(iii) a swap. 

16 Provided, however, that nothing in this 

17 subparagraph shall preclude a person that 

18 has provided information concerning, or 

19 generated by, the person, its operations or 

20 activities, to any employee or agent of any 

21 department or agency of the Federal Gov22 ernment, voluntarily or as required by law, 

23 from using such information to enter into, 

24 or offer to enter into, a contract of sale, 


sroberts on DSKH9S0YB1PROD with BILLS
736 

•S 3217 AMDT 3739 

1 option, or swap described in clauses (i), 

2 (ii), or (iii).’’. 

3 SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY. 

4 Section 4c(a) of the Commodity Exchange Act (7 

5 U.S.C. 6c(a)) (as amended by section 746) is amended 

6 by adding at the end the following: 

7 ‘‘(5) DISRUPTIVE PRACTICES.—It shall be un8 lawful for any person to engage in any trading, prac9 tice, or conduct on or subject to the rules of a reg10 istered entity that— 

11 ‘‘(A) violates bids or offers; 

12 ‘‘(B) demonstrates intentional or reckless 

13 disregard for the orderly execution of trans14 actions during the closing period; or 

15 ‘‘(C) is, is of the character of, or is com16 monly known to the trade as, ‘spoofing’ (bid17 ding or offering with the intent to cancel the 

18 bid or offer before execution). 

19 ‘‘(6) RULEMAKING AUTHORITY.—The Commis20 sion may make and promulgate such rules and regu21 lations as, in the judgment of the Commission, are 

22 reasonably necessary to prohibit the trading prac23 tices described in paragraph (5) and any other trad24 ing practice that is disruptive of fair and equitable 

25 trading. 


sroberts on DSKH9S0YB1PROD with BILLS
737 

•S 3217 AMDT 3739 

1 ‘‘(7) USE OF SWAPS TO DEFRAUD.—It shall be 

2 unlawful for any person to enter into a swap know3 ing, or acting in reckless disregard of the fact, that 

4 its counterparty will use the swap as part of a de5 vice, scheme, or artifice to defraud any third 

6 party.’’. 

7 SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND 

8 PROTECTION. 

9 The Commodity Exchange Act (7 U.S.C. 1 et seq.) 

10 is amended by adding at the end the following: 

11 ‘‘SEC. 23. COMMODITY WHISTLEBLOWER INCENTIVES AND 

12 PROTECTION. 

13 ‘‘(a) DEFINITIONS.—In this section: 

14 ‘‘(1) COVERED JUDICIAL OR ADMINISTRATIVE

15 ACTION.—The term ‘covered judicial or administra16 tive action’ means any judicial or administrative ac17 tion brought by the Commission under this Act that 

18 results in monetary sanctions exceeding $1,000,000. 

19 ‘‘(2) FUND.—The term ‘Fund’ means the Com20 modity Futures Trading Commission Customer Pro21 tection Fund established under subsection (g). 

22 ‘‘(3) MONETARY SANCTIONS.—The term ‘mone23 tary sanctions’, when used with respect to any judi24 cial or administrative action means— 


sroberts on DSKH9S0YB1PROD with BILLS
738 

•S 3217 AMDT 3739 

1 ‘‘(A) any monies, including penalties, 

2 disgorgement, restitution, and interest ordered 

3 to be paid; and 

4 ‘‘(B) any monies deposited into a 

5 disgorgement fund or other fund pursuant to 

6 section 308(b) of the Sarbanes-Oxley Act of 

7 2002 (15 U.S.C. 7246(b)), as a result of such 

8 action or any settlement of such action. 

9 ‘‘(4) ORIGINAL INFORMATION.—The term 

10 ‘original information’ means information that— 

11 ‘‘(A) is derived from the independent 

12 knowledge or analysis of a whistleblower; 

13 ‘‘(B) is not known to the Commission from 

14 any other source, unless the whistleblower is the 

15 original source of the information; and 

16 ‘‘(C) is not exclusively derived from an al17 legation made in a judicial or administrative 

18 hearing, in a governmental report, hearing, 

19 audit, or investigation, or from the news media, 

20 unless the whistleblower is a source of the infor21 mation. 

22 ‘‘(5) RELATED ACTION.—The term ‘related ac23 tion’, when used with respect to any judicial or ad24 ministrative action brought by the Commission 

25 under this Act, means any judicial or administrative 


sroberts on DSKH9S0YB1PROD with BILLS
739 

•S 3217 AMDT 3739 

1 action brought by an entity described in subclauses 

2 (i) through (vi) of subsection (g)(2)(B) that is based 

3 upon the original information provided by a whistle4 blower pursuant to subsection (a) that led to the 

5 successful enforcement of the Commission action. 

6 ‘‘(6) SUCCESSFUL RESOLUTION.—The term 

7 ‘successful resolution’, when used with respect to 

8 any judicial or administrative action brought by the 

9 Commission under this Act, includes any settlement 

10 of such action. 

11 ‘‘(7) WHISTLEBLOWER.—The term ‘whistle12 blower’ means any individual, or 2 or more individ13 uals acting jointly, who provides information relating 

14 to a violation of this Act to the Commission, in a 

15 manner established by rule or regulation, by the 

16 Commission. 

17 ‘‘(b) AWARDS.— 

18 ‘‘(1) IN GENERAL.—In any covered judicial or 

19 administrative action, or related action, the Commis20 sion, under regulations prescribed by the Commis21 sion and subject to subsection (c), shall pay an 

22 award or awards to 1 or more whistleblowers who 

23 voluntarily provided original information to the 

24 Commission that led to the successful enforcement 


sroberts on DSKH9S0YB1PROD with BILLS
740 

•S 3217 AMDT 3739 

1 of the covered judicial or administrative action, or 

2 related action, in an aggregate amount equal to— 

3 ‘‘(A) not less than 10 percent, in total, of 

4 what has been collected of the monetary sanc5 tions imposed in the action or related actions; 

6 and 

7 ‘‘(B) not more than 30 percent, in total, of 

8 what has been collected of the monetary sanc9 tions imposed in the action or related actions. 

10 ‘‘(2) PAYMENT OF AWARDS.—Any amount paid 

11 under paragraph (1) shall be paid from the Fund. 

12 ‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DE13 NIAL OF AWARD.— 

14 ‘‘(1) DETERMINATION OF AMOUNT OF

15 AWARD.— 

16 ‘‘(A) DISCRETION.—The determination of 

17 the amount of an award made under subsection 

18 (b) shall be in the discretion of the Commission. 

19 ‘‘(B) CRITERIA.—In determining the 

20 amount of an award made under subsection (b), 

21 the Commission shall take into account— 

22 ‘‘(i) the significance of the informa23 tion provided by the whistleblower to the 

24 success of the covered judicial or adminis25 trative action; 


sroberts on DSKH9S0YB1PROD with BILLS
741 

•S 3217 AMDT 3739 

1 ‘‘(ii) the degree of assistance provided 

2 by the whistleblower and any legal rep3 resentative of the whistleblower in a cov4 ered judicial or administrative action; 

5 ‘‘(iii) the programmatic interest of the 

6 Commission in deterring violations of the 

7 Act (including regulations under the Act) 

8 by making awards to whistleblowers who 

9 provide information that leads to the suc10 cessful enforcement of such laws; and 

11 ‘‘(iv) such additional relevant factors 

12 as the Commission may establish by rule 

13 or regulation. 

14 ‘‘(2) DENIAL OF AWARD.—No award under 

15 subsection (b) shall be made— 

16 ‘‘(A) to any whistleblower who is, or was at 

17 the time the whistleblower acquired the original 

18 information submitted to the Commission, a 

19 member, officer, or employee of— 

20 ‘‘(i) a appropriate regulatory agency; 

21 ‘‘(ii) the Department of Justice; 

22 ‘‘(iii) a registered entity; 

23 ‘‘(iv) a registered futures association; 

24 or 


sroberts on DSKH9S0YB1PROD with BILLS
742 

•S 3217 AMDT 3739 

1 ‘‘(v) a self-regulatory organization as 

2 defined in section 3(a) of the Securities 

3 Exchange Act of 1934 (15 U.S.C. 78c(a)); 

4 or 

5 ‘‘(vi) a law enforcement organization; 

6 ‘‘(B) to any whistleblower who is convicted 

7 of a criminal violation related to the judicial or 

8 administrative action for which the whistle9 blower otherwise could receive an award under 

10 this section; 

11 ‘‘(C) to any whistleblower who submits in12 formation to the Commission that is based on 

13 the facts underlying the covered action sub14 mitted previously by another whistleblower; 

15 ‘‘(D) to any whistleblower who fails to sub16 mit information to the Commission in such 

17 form as the Commission may, by rule or regula18 tion, require. 

19 ‘‘(d) REPRESENTATION.— 

20 ‘‘(1) PERMITTED REPRESENTATION.—Any 

21 whistleblower who makes a claim for an award under 

22 subsection (b) may be represented by counsel. 

23 ‘‘(2) REQUIRED REPRESENTATION.— 

24 ‘‘(A) IN GENERAL.—Any whistleblower 

25 who anonymously makes a claim for an award 


sroberts on DSKH9S0YB1PROD with BILLS
743 

•S 3217 AMDT 3739 

1 under subsection (b) shall be represented by 

2 counsel if the whistleblower submits the infor3 mation upon which the claim is based. 

4 ‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 

5 the payment of an award, a whistleblower shall 

6 disclose the identity of the whistleblower and 

7 provide such other information as the Commis8 sion may require, directly or through counsel 

9 for the whistleblower. 

10 ‘‘(e) NO CONTRACT NECESSARY.—No contract with 

11 the Commission is necessary for any whistleblower to re12 ceive an award under subsection (b), unless otherwise re13 quired by the Commission, by rule or regulation. 

14 ‘‘(f) APPEALS.— 

15 ‘‘(1) IN GENERAL.—Any determination made 

16 under this section, including whether, to whom, or in 

17 what amount to make awards, shall be in the discre18 tion of the Commission. 

19 ‘‘(2) APPEALS.—Any determination described 

20 in paragraph (1) may be appealed to the appropriate 

21 court of appeals of the United States not more than 

22 30 days after the determination is issued by the 

23 Commission. 


sroberts on DSKH9S0YB1PROD with BILLS
744 

•S 3217 AMDT 3739 

1 ‘‘(3) REVIEW.—The court shall review the de2 termination made by the Commission in accordance 

3 with section 7064 of title 5, United States Code. 

4 ‘‘(g) COMMODITY FUTURES TRADING COMMISSION

5 CUSTOMER PROTECTION FUND.— 

6 ‘‘(1) ESTABLISHMENT.—There is established in 

7 the Treasury of the United States a revolving fund 

8 to be known as the ‘Commodity Futures Trading 

9 Commission Customer Protection Fund’. 

10 ‘‘(2) USE OF FUND.—The Fund shall be avail11 able to the Commission, without further appropria12 tion or fiscal year limitation, for— 

13 ‘‘(A) the payment of awards to whistle14 blowers as provided in subsection (a); and 

15 ‘‘(B) the funding of customer education 

16 initiatives designed to help customers protect 

17 themselves against fraud or other violations of 

18 this Act, or the rules and regulations there19 under. 

20 ‘‘(3) DEPOSITS AND CREDITS.—There shall be 

21 deposited into or credited to the Fund— 

22 ‘‘(A) any monetary judgment collected by 

23 the Commission in any judicial or administra24 tive action brought by the Commission under 

25 this Act, that is not otherwise distributed to 


sroberts on DSKH9S0YB1PROD with BILLS
745 

•S 3217 AMDT 3739 

1 victims of a violation of this Act or the rules 

2 and regulations thereunder underlying such ac3 tion, unless the balance of the Fund at the time 

4 the monetary judgment is collected exceeds 

5 $100,000,000; and 

6 ‘‘(B) all income from investments made 

7 under paragraph (4). 

8 ‘‘(4) INVESTMENTS.— 

9 ‘‘(A) AMOUNTS IN FUND MAY BE IN10 VESTED.—The Commission may request the 

11 Secretary of the Treasury to invest the portion 

12 of the Fund that is not, in the Commission’s 

13 judgment, required to meet the current needs of 

14 the Fund. 

15 ‘‘(B) ELIGIBLE INVESTMENTS.—Invest16 ments shall be made by the Secretary of the 

17 Treasury in obligations of the United States or 

18 obligations that are guaranteed as to principal 

19 and interest by the United States, with matu20 rities suitable to the needs of the Fund as de21 termined by the Commission. 

22 ‘‘(C) INTEREST AND PROCEEDS CRED23 ITED.—The interest on, and the proceeds from 

24 the sale or redemption of, any obligations held 


sroberts on DSKH9S0YB1PROD with BILLS
746 

•S 3217 AMDT 3739 

1 in the Fund shall be credited to, and form a 

2 part of, the Fund. 

3 ‘‘(5) REPORTS TO CONGRESS.—Not later than 

4 October 30 of each year, the Commission shall 

5 transmit to the Committee on Agriculture, Nutri6 tion, and Forestry of the Senate, and the Committee 

7 on Agriculture of the House of Representatives a re8 port on— 

9 ‘‘(A) the Commission’s whistleblower 

10 award program under this section, including a 

11 description of the number of awards granted 

12 and the types of cases in which awards were 

13 granted during the preceding fiscal year; 

14 ‘‘(B) customer education initiatives de15 scribed in paragraph (2)(B) that were funded 

16 by the Fund during the preceding fiscal year; 

17 ‘‘(C) the balance of the Fund at the begin18 ning of the preceding fiscal year; 

19 ‘‘(D) the amounts deposited into or cred20 ited to the Fund during the preceding fiscal 

21 year; 

22 ‘‘(E) the amount of earnings on invest23 ments of amounts in the Fund during the pre24 ceding fiscal year; 


sroberts on DSKH9S0YB1PROD with BILLS
747 

•S 3217 AMDT 3739 

1 ‘‘(F) the amount paid from the Fund dur2 ing the preceding fiscal year to whistleblowers 

3 pursuant to subsection (b); 

4 ‘‘(G) the amount paid from the Fund dur5 ing the preceding fiscal year for customer edu6 cation initiatives described in paragraph (2)(B); 

7 ‘‘(H) the balance of the Fund at the end 

8 of the preceding fiscal year; and 

9 ‘‘(I) a complete set of audited financial 

10 statements, including a balance sheet, income 

11 statement, and cash flow analysis. 

12 ‘‘(h) PROTECTION OF WHISTLEBLOWERS.— 

13 ‘‘(1) PROHIBITION AGAINST RETALIATION.— 

14 ‘‘(A) IN GENERAL.—No employer may dis15 charge, demote, suspend, threaten, harass, di16 rectly or indirectly, or in any other manner dis17 criminate against, a whistleblower in the terms 

18 and conditions of employment because of any 

19 lawful act done by the whistleblower— 

20 ‘‘(i) in providing information to the 

21 Commission in accordance with subsection 

22 (b); or 

23 ‘‘(ii) in assisting in any investigation 

24 or judicial or administrative action of the 


sroberts on DSKH9S0YB1PROD with BILLS
748 

•S 3217 AMDT 3739 

1 Commission based upon or related to such 

2 information. 

3 ‘‘(B) ENFORCEMENT.— 

4 ‘‘(i) CAUSE OF ACTION.—An indi5 vidual who alleges discharge or other dis6 crimination in violation of subparagraph 

7 (A) may bring an action under this sub8 section in the appropriate district court of 

9 the United States for the relief provided in 

10 subparagraph (C), unless the individual 

11 who is alleging discharge or other discrimi12 nation in violation of subparagraph (A) is 

13 an employee of the federal government, in 

14 which case the individual shall only bring 

15 an action under section 1221 of title 5 

16 United States Code. 

17 ‘‘(ii) SUBPOENAS.—A subpoena re18 quiring the attendance of a witness at a 

19 trial or hearing conducted under this sub20 section may be served at any place in the 

21 United States. 

22 ‘‘(iii) STATUTE OF LIMITATIONS.—An 

23 action under this subsection may not be 

24 brought more than 2 years after the date 


sroberts on DSKH9S0YB1PROD with BILLS
749 

•S 3217 AMDT 3739 

1 on which the violation reported in subpara2 graph (A) is committed. 

3 ‘‘(C) RELIEF.—Relief for an individual 

4 prevailing in an action brought under subpara5 graph (B) shall include— 

6 ‘‘(i) reinstatement with the same se7 niority status that the individual would 

8 have had, but for the discrimination; 

9 ‘‘(ii) the amount of back pay other10 wise owed to the individual, with interest; 

11 and 

12 ‘‘(iii) compensation for any special 

13 damages sustained as a result of the dis14 charge or discrimination, including litiga15 tion costs, expert witness fees, and reason16 able attorney’s fees. 

17 ‘‘(2) CONFIDENTIALITY.— 

18 ‘‘(A) INFORMATION PROVIDED.— 

19 ‘‘(i) IN GENERAL.—Except as pro20 vided in subparagraph (B), all information 

21 provided to the Commission by a whistle22 blower shall be confidential and privileged 

23 as an evidentiary matter (and shall not be 

24 subject to civil discovery or other legal 

25 process) in any proceeding in any Federal 


sroberts on DSKH9S0YB1PROD with BILLS
750 

•S 3217 AMDT 3739 

1 or State court or administrative agency, 

2 and shall be exempt from disclosure, in the 

3 hands of a department or agency of the 

4 Federal Government, under section 552 of 

5 title 5, United States Code (commonly 

6 known as the ‘Freedom of Information 

7 Act’) or otherwise, unless and until re8 quired to be disclosed to a defendant or re9 spondent in connection with a public pro10 ceeding instituted by the Commission or 

11 any entity described in subparagraph (B). 

12 ‘‘(ii) CONSTRUCTION.—For purposes 

13 of section 552 of title 5, United States 

14 Code, this paragraph shall be considered to 

15 be a statute described in subsection 

16 (b)(3)(B) of that section. 

17 ‘‘(iii) EFFECT.—Nothing in this para18 graph is intended to limit the ability of the 

19 Attorney General to present such evidence 

20 to a grand jury or to share such evidence 

21 with potential witnesses or defendants in 

22 the course of an ongoing criminal inves23 tigation. 

24 ‘‘(B) AVAILABILITY TO GOVERNMENT

25 AGENCIES.— 


sroberts on DSKH9S0YB1PROD with BILLS
751 

•S 3217 AMDT 3739 

1 ‘‘(i) IN GENERAL.—Without the loss 

2 of its status as confidential and privileged 

3 in the hands of the Commission, all infor4 mation referred to in subparagraph (A) 

5 may, in the discretion of the Commission, 

6 when determined by the Commission to be 

7 necessary or appropriate to accomplish the 

8 purposes of this Act and protect customers 

9 and in accordance with clause (ii), be made 

10 available to— 

11 ‘‘(I) the Department of Justice; 

12 ‘‘(II) an appropriate department 

13 or agency of the Federal Government, 

14 acting within the scope of its jurisdic15 tion; 

16 ‘‘(III) a registered entity, reg17 istered futures association, or self-reg18 ulatory organization as defined in sec19 tion 3(a) of the Securities Exchange 

20 Act of 1934 (15 U.S.C. 78c(a)); 

21 ‘‘(IV) a State attorney general in 

22 connection with any criminal inves23 tigation; 


sroberts on DSKH9S0YB1PROD with BILLS
752 

•S 3217 AMDT 3739 

1 ‘‘(V) an appropriate department 

2 or agency of any State, acting within 

3 the scope of its jurisdiction; and 

4 ‘‘(VI) a foreign futures authority. 

5 ‘‘(ii) MAINTENANCE OF INFORMA6 TION.—Each of the entities, agencies, or 

7 persons described in clause (i) shall main8 tain information described in that clause 

9 as confidential and privileged, in accord10 ance with the requirements in subpara11 graph (A). 

12 ‘‘(3) RIGHTS RETAINED.—Nothing in this sec13 tion shall be deemed to diminish the rights, privi14 leges, or remedies of any whistleblower under any 

15 Federal or State law, or under any collective bar16 gaining agreement. 

17 ‘‘(i) RULEMAKING AUTHORITY.—The Commission 

18 shall have the authority to issue such rules and regulations 

19 as may be necessary or appropriate to implement the pro20 visions of this section consistent with the purposes of this 

21 section. 

22 ‘‘(j) IMPLEMENTING RULES.—The Commission shall 

23 issue final rules or regulations implementing the provi24 sions of this section not later than 270 days after the date 


sroberts on DSKH9S0YB1PROD with BILLS
753 

•S 3217 AMDT 3739 

1 of enactment of the Wall Street Transparency and Ac2 countability Act of 2010. 

3 ‘‘(k) ORIGINAL INFORMATION.—Information sub4 mitted to the Commission by a whistleblower in accord5 ance with rules or regulations implementing this section 

6 shall not lose its status as original information solely be7 cause the whistleblower submitted such information prior 

8 to the effective date of such rules or regulations, provided 

9 such information was submitted after the date of enact10 ment of the Wall Street Transparency and Accountability 

11 Act of 2010. 

12 ‘‘(l) AWARDS.—A whistleblower may receive an award 

13 pursuant to this section regardless of whether any viola14 tion of a provision of this Act, or a rule or regulation 

15 thereunder, underlying the judicial or administrative ac16 tion upon which the award is based occurred prior to the 

17 date of enactment of the Wall Street Transparency and 

18 Accountability Act of 2010. 

19 ‘‘(m) PROVISION OF FALSE INFORMATION.—A whis20 tleblower who knowingly and willfully makes any false, fic21 titious, or fraudulent statement or representation, or who 

22 makes or uses any false writing or document knowing the 

23 same to contain any false, fictitious, or fraudulent state24 ment or entry, shall not be entitled to an award under 


sroberts on DSKH9S0YB1PROD with BILLS
754 

•S 3217 AMDT 3739 

1 this section and shall be subject to prosecution under sec2 tion 1001 of title 18, United States Code.’’. 

3 SEC. 749. CONFORMING AMENDMENTS. 

4 (a) Section 2(c)(1) of the Commodity Exchange Act 

5 (7 U.S.C. 2(c)(1)) is amended, in the matter preceding 

6 subparagraph (A), by striking ‘‘5a (to the extent provided 

7 in section 5a(g)),’’. 

8 (b) Section 4d of the Commodity Exchange Act (7 

9 U.S.C. 6d) (as amended by section 724) is amended— 

10 (1) in subsection (a)— 

11 (A) in the matter preceding paragraph 

12 (1)— 

13 (i) by striking ‘‘engage as’’ and insert14 ing ‘‘be a’’; and 

15 (ii) by striking ‘‘or introducing 

16 broker’’ and all that follows through ‘‘or 

17 derivatives transaction execution facility’’; 

18 (B) in paragraph (1), by striking ‘‘or in19 troducing broker’’; and 

20 (C) in paragraph (2), by striking ‘‘if a fu21 tures commission merchant,’’; and 

22 (2) by adding at the end the following: 

23 ‘‘(g) It shall be unlawful for any person to be an in24 troducing broker unless such person shall have registered 

25 under this Act with the Commission as an introducing 


sroberts on DSKH9S0YB1PROD with BILLS
755 

•S 3217 AMDT 3739 

1 broker and such registration shall not have expired nor 

2 been suspended nor revoked.’’. 

3 (c) Section 4m(3) of the Commodity Exchange Act 

4 (7 U.S.C. 6m(3)) is amended— 

5 (1) by striking ‘‘(3) Subsection (1) of this sec6 tion’’ and inserting the following: 

7 ‘‘(3) EXCEPTION.— 

8 ‘‘(A) IN GENERAL.—Paragraph (1)’’; and 

9 (2) by striking ‘‘to any investment trust’’ and 

10 all that follows through the period at the end and 

11 inserting the following: ‘‘to any commodity pool that 

12 is engaged primarily in trading commodity interests. 

13 ‘‘(B) ENGAGED PRIMARILY.—For purposes 

14 of subparagraph (A), a commodity trading advi15 sor or a commodity pool shall be considered to 

16 be ‘engaged primarily’ in the business of being 

17 a commodity trading advisor or commodity pool 

18 if it is or holds itself out to the public as being 

19 engaged primarily, or proposes to engage pri20 marily, in the business of advising on com21 modity interests or investing, reinvesting, own22 ing, holding, or trading in commodity interests, 

23 respectively. 

24 ‘‘(C) COMMODITY INTERESTS.—For pur25 poses of this paragraph, commodity interests 


sroberts on DSKH9S0YB1PROD with BILLS
756 

•S 3217 AMDT 3739 

1 shall include contracts of sale of a commodity 

2 for future delivery, options on such contracts, 

3 security futures, swaps, leverage contracts, for4 eign exchange, spot and forward contracts on 

5 physical commodities, and any monies held in 

6 an account used for trading commodity inter7 ests.’’. 

8 (d) Section 5c of the Commodity Exchange Act (7 

9 U.S.C. 7a-2) is amended— 

10 (1) in subsection (a)(1)— 

11 (A) by striking ‘‘, 5a(d),’’; and 

12 (B) by striking ‘‘and section (2)(h)(7) with 

13 respect to significant price discovery con14 tracts,’’; and 

15 (2) in subsection (f)(1), by striking ‘‘section 

16 4d(c) of this Act’’ and inserting ‘‘section 4d(e)’’. 

17 (e) Section 5e of the Commodity Exchange Act (7 

18 U.S.C. 7b) is amended by striking ‘‘or revocation of the 

19 right of an electronic trading facility to rely on the exemp20 tion set forth in section 2(h)(3) with respect to a signifi21 cant price discovery contract,’’. 

22 (f) Section 6(b) of the Commodity Exchange Act (7 

23 U.S.C. 8(b)) is amended in the first sentence by striking 

24 ‘‘, or to revoke the right of an electronic trading facility 


sroberts on DSKH9S0YB1PROD with BILLS
757 

•S 3217 AMDT 3739 

1 to rely on the exemption set forth in section 2(h)(3) with 

2 respect to a significant price discovery contract,’’. 

3 (g) Section 12(e)(2)(B) of the Commodity Exchange 

4 Act (7 U.S.C. 16(e)(2)(B)) is amended— 

5 (1) by striking ‘‘section 2(c), 2(d), 2(f), or 2(g) 

6 of this Act’’ and inserting ‘‘section 2(c), 2(f), or 2(i) 

7 of this Act’’; and 

8 (2) by striking ‘‘2(h) or’’. 

9 (h) Section 17(r)(1) of the Commodity Exchange Act 

10 (7 U.S.C. 21(r)(1)) is amended by striking ‘‘section 4d(c) 

11 of this Act’’ and inserting ‘‘section 4d(e)’’. 

12 (i) Section 22(b)(1)(A) of the Commodity Exchange 

13 Act (7 U.S.C. 25(b)(1)(A)) is amended by striking ‘‘sec14 tion 2(h)(7) or’’. 

15 (j) Section 408(2)(C) of the Federal Deposit Insur16 ance Corporation Improvement Act of 1991 (12 U.S.C. 

17 4421(2)(C)) is amended— 

18 (1) by striking ‘‘section 2(c), 2(d), 2(f), or 

19 (2)(g) of such Act’’ and inserting ‘‘section 2(c), 2(f), 

20 or 2(i) of that Act’’; and 

21 (2) by striking ‘‘2(h) or’’. 

22 SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS. 

23 (a) INTERAGENCY WORKING GROUP.—There is es24 tablished to carry out this section an interagency working 


sroberts on DSKH9S0YB1PROD with BILLS
758 

•S 3217 AMDT 3739 

1 group (referred to in this section as the ‘‘interagency 

2 group’’) composed of the following members or designees: 

3 (1) The Chairman of the Commodity Futures 

4 Trading Commission (referred to in this section as 

5 the ‘‘Commission’’), who shall serve as Chairman of 

6 the interagency group. 

7 (2) The Secretary of Agriculture. 

8 (3) The Secretary of the Treasury. 

9 (4) The Chairman of the Securities and Ex10 change Commission. 

11 (5) The Administrator of the Environmental 

12 Protection Agency. 

13 (6) The Chairman of the Federal Energy Regu14 latory Commission. 

15 (7) The Commissioner of the Federal Trade 

16 Commission. 

17 (8) The Administrator of the Energy Informa18 tion Administration. 

19 (b) ADMINISTRATIVE SUPPORT.—The Commission 

20 shall provide the interagency group such administrative 

21 support services as are necessary to enable the interagency 

22 group to carry out the functions of the interagency group 

23 under this section. 

24 (c) CONSULTATION.—In carrying out this section, the 

25 interagency group shall consult with representatives of exVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00758 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
759 

•S 3217 AMDT 3739 

1 changes, clearinghouses, self-regulatory bodies, major car2 bon market participants, consumers, and the general pub3 lic, as the interagency group determines to be appropriate. 

4 (d) STUDY.—The interagency group shall conduct a 

5 study on the oversight of existing and prospective carbon 

6 markets to ensure an efficient, secure, and transparent 

7 carbon market, including oversight of spot markets and 

8 derivative markets. 

9 (e) REPORT.—Not later than 180 days after the date 

10 of enactment of this Act, the interagency group shall sub11 mit to Congress a report on the results of the study con12 ducted under subsection (b), including recommendations 

13 for the oversight of existing and prospective carbon mar14 kets to ensure an efficient, secure, and transparent carbon 

15 market, including oversight of spot markets and derivative 

16 markets. 

17 SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVI18 SORY COMMITTEE. 

19 Section 2(a) of the Commodity Exchange Act (7 

20 U.S.C. 2(a)) (as amended by section 727) is amended by 

21 adding at the end the following: 

22 ‘‘(15) ENERGY AND ENVIRONMENTAL MARKETS

23 ADVISORY COMMITTEE.— 

24 ‘‘(A) ESTABLISHMENT.— 


sroberts on DSKH9S0YB1PROD with BILLS
760 

•S 3217 AMDT 3739 

1 ‘‘(i) IN GENERAL.—An Energy and 

2 Environmental Markets Advisory Com3 mittee is hereby established. 

4 ‘‘(ii) MEMBERSHIP.—The Committee 

5 shall have 9 members. 

6 ‘‘(iii) ACTIVITIES.—The Committee’s 

7 objectives and scope of activities shall be— 

8 ‘‘(I) to conduct public meetings; 

9 ‘‘(II) to submit reports and rec10 ommendations to the Commission (in11 cluding dissenting or minority views, 

12 if any); and 

13 ‘‘(III) otherwise to serve as a ve14 hicle for discussion and communica15 tion on matters of concern to ex16 changes, firms, end users, and regu17 lators regarding energy and environ18 mental markets and their regulation 

19 by the Commission. 

20 ‘‘(B) REQUIREMENTS.— 

21 ‘‘(i) IN GENERAL.—The Committee 

22 shall hold public meetings at such intervals 

23 as are necessary to carry out the functions 

24 of the Committee, but not less frequently 

25 than 2 times per year. 


sroberts on DSKH9S0YB1PROD with BILLS
761 

•S 3217 AMDT 3739 

1 ‘‘(ii) MEMBERS.—Members shall be 

2 appointed to 3-year terms, but may be re3 moved for cause by vote of the Commis4 sion. 

5 ‘‘(C) APPOINTMENT.—The Commission 

6 shall appoint members with a wide diversity of 

7 opinion and who represent a broad spectrum of 

8 interests, including hedgers and consumers. 

9 ‘‘(D) REIMBURSEMENT.—Members shall 

10 be entitled to per diem and travel expense reim11 bursement by the Commission. 

12 ‘‘(E) FACA.—The Committee shall not be 

13 subject to the Federal Advisory Committee Act 

14 (5 U.S.C. App.).’’. 

15 SEC. 752. INTERNATIONAL HARMONIZATION. 

16 In order to promote effective and consistent global 

17 regulation of swaps and security-based swaps, the Securi18 ties and Exchange Commission, the Commodity Futures 

19 Trading Commission, the Financial Stability Oversight 

20 Council, and the Treasury Department— 

21 (1) shall, both individually and collectively, con22 sult and coordinate with foreign regulatory authori23 ties on the establishment of consistent international 

24 standards with respect to the regulation of such 

25 swaps; and 


sroberts on DSKH9S0YB1PROD with BILLS
762 

•S 3217 AMDT 3739 

1 (2) may, both individually and collectively, 

2 agree to such information-sharing arrangements as 

3 may be deemed to be necessary or appropriate in the 

4 public interest or for the protection of investors and 

5 swap counterparties. 

6 SEC. 753. EFFECTIVE DATE. 

7 Unless otherwise provided in this title, this subtitle 

8 shall take effect on the date that is 180 days after the 

9 date of enactment of this Act. 

10 Subtitle B—Regulation of Security11 Based Swap Markets 

12 SEC. 761. DEFINITIONS UNDER THE SECURITIES EX13 CHANGE ACT OF 1934. 

14 (a) DEFINITIONS.—Section 3(a) of the Securities Ex15 change Act of 1934 (15 U.S.C. 78c(a)) is amended— 

16 (1) in subparagraphs (A) and (B) of paragraph 

17 (5), by inserting ‘‘(not including security-based 

18 swaps, other than security-based swaps with or for 

19 persons that are not eligible contract participants)’’ 

20 after ‘‘securities’’ each place that term appears; 

21 (2) in paragraph (10), by inserting ‘‘security22 based swap,’’ after ‘‘security future,’’; 

23 (3) in paragraph (13), by adding at the end the 

24 following: ‘‘For security-based swaps, such terms in25 clude the execution, termination (prior to its schedVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00762 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
763 

•S 3217 AMDT 3739 

1 uled maturity date), assignment, exchange, or simi2 lar transfer or conveyance of, or extinguishing of 

3 rights or obligations under, a security-based swap, 

4 as the context may require.’’; 

5 (4) in paragraph (14), by adding at the end the 

6 following: ‘‘For security-based swaps, such terms in7 clude the execution, termination (prior to its sched8 uled maturity date), assignment, exchange, or simi9 lar transfer or conveyance of, or extinguishing of 

10 rights or obligations under, a security-based swap, 

11 as the context may require.’’; 

12 (5) in paragraph (39)— 

13 (A) in subparagraph (B)(i)— 

14 (i) in subclause (I), by striking ‘‘or 

15 government securities dealer’’ and insert16 ing ‘‘government securities dealer, security17 based swap dealer, or major security-based 

18 swap participant’’; and 

19 (ii) in subclause (II), by inserting ‘‘se20 curity-based swap dealer, major security21 based swap participant,’’ after ‘‘govern22 ment securities dealer,’’; 

23 (B) in subparagraph (C), by striking ‘‘or 

24 government securities dealer’’ and inserting 

25 ‘‘government securities dealer, security-based 


sroberts on DSKH9S0YB1PROD with BILLS
764 

•S 3217 AMDT 3739 

1 swap dealer, or major security-based swap par2 ticipant’’; and 

3 (C) in subparagraph (D), by inserting ‘‘se4 curity-based swap dealer, major security-based 

5 swap participant,’’ after ‘‘government securities 

6 dealer,’’; and 

7 (6) by adding at the end the following: 

8 ‘‘(65) ELIGIBLE CONTRACT PARTICIPANT.—The 

9 term ‘eligible contract participant’ has the same 

10 meaning as in section 1a of the Commodity Ex11 change Act (7 U.S.C. 1a). 

12 ‘‘(66) MAJOR SWAP PARTICIPANT.—The term 

13 ‘major swap participant’ has the same meaning as in 

14 section 1a of the Commodity Exchange Act (7 

15 U.S.C. 1a). 

16 ‘‘(67) MAJOR SECURITY-BASED SWAP PARTICI17 PANT.— 

18 ‘‘(A) IN GENERAL.—The term ‘major secu19 rity-based swap participant’ means any per20 son— 

21 ‘‘(i) who is not a security-based swap 

22 dealer; and 

23 ‘‘(ii)(I) who maintains a substantial 

24 position in security-based swaps for any of 

25 the major security-based swap categories, 


sroberts on DSKH9S0YB1PROD with BILLS
765 

•S 3217 AMDT 3739 

1 as such categories are determined by the 

2 Commission, excluding— 

3 ‘‘(aa) positions held for hedging 

4 or mitigating commercial risk; and 

5 ‘‘(bb) positions maintained by 

6 any employee benefit plan (or any 

7 contract held by such a plan), as that 

8 term is defined in paragraphs (3) and 

9 (32) of section 3 of the Employee Re10 tirement Income Security Act of 1974 

11 (29 U.S.C. 1002), for the primary 

12 purpose of hedging or mitigating any 

13 risk directly associated with the oper14 ation of the plan; 

15 ‘‘(II) whose outstanding security16 based swaps create substantial 

17 counterparty exposure that could have seri18 ous adverse effects on the financial sta19 bility of the United States banking system 

20 or financial markets; or 

21 ‘‘(III) that is a financial entity that— 

22 ‘‘(aa) is highly leveraged relative 

23 to the amount of capital such entity 

24 holds; and 


sroberts on DSKH9S0YB1PROD with BILLS
766 

•S 3217 AMDT 3739 

1 ‘‘(bb) maintains a substantial po2 sition in outstanding security-based 

3 swaps in any major security-based 

4 swap category, as such categories are 

5 determined by the Commission. 

6 ‘‘(B) DEFINITION OF SUBSTANTIAL POSI7 TION.—For purposes of subparagraph (A), the 

8 Commission shall define, by rule or regulation, 

9 the term ‘substantial position’ at the threshold 

10 that the Commission determines to be prudent 

11 for the effective monitoring, management, and 

12 oversight of entities that are systemically im13 portant or can significantly impact the financial 

14 system of the United States. 

15 ‘‘(C) SCOPE OF DESIGNATION.—For pur16 poses of subparagraph (A), a person may be 

17 designated as a major security-based swap par18 ticipant for 1 or more categories of security19 based swaps without being classified as a major 

20 security-based swap participant for all classes 

21 of security-based swaps. 

22 ‘‘(D) CAPITAL.—In setting capital require23 ments for a person that is designated as a 

24 major security-based swap participant for a sin25 gle type or single class or category of securityVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00766 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
767 

•S 3217 AMDT 3739 

1 based swap or activities, the prudential regu2 lator and the Commission shall take into ac3 count the risks associated with other types of 

4 security-based swaps or classes of security5 based swaps or categories of security-based 

6 swaps engaged in and the other activities con7 ducted by that person that are not otherwise 

8 subject to regulation applicable to that person 

9 by virtue of the status of the person as a major 

10 security-based swap participant. 

11 ‘‘(68) SECURITY-BASED SWAP.— 

12 ‘‘(A) IN GENERAL.—Except as provided in 

13 subparagraph (B), the term ‘security-based 

14 swap’ means any agreement, contract, or trans15 action that— 

16 ‘‘(i) is a swap, as that term is defined 

17 under section 1a of the Commodity Ex18 change Act; and 

19 ‘‘(ii) is based on— 

20 ‘‘(I) an index that is a narrow21 based security index, including any in22 terest therein or on the value thereof; 

23 ‘‘(II) a single security or loan, in24 cluding any interest therein or on the 

25 value thereof; or 


sroberts on DSKH9S0YB1PROD with BILLS
768 

•S 3217 AMDT 3739 

1 ‘‘(III) the occurrence, nonoccur2 rence, or extent of the occurrence of 

3 an event relating to a single issuer of 

4 a security or the issuers of securities 

5 in a narrow-based security index, pro6 vided that such event directly affects 

7 the financial statements, financial 

8 condition, or financial obligations of 

9 the issuer. 

10 ‘‘(B) RULE OF CONSTRUCTION REGARDING

11 MASTER AGREEMENTS.—The term ‘security12 based swap’ shall be construed to include a 

13 master agreement that provides for an agree14 ment, contract, or transaction that is a secu15 rity-based swap pursuant to subparagraph (A), 

16 together with all supplements to any such mas17 ter agreement, without regard to whether the 

18 master agreement contains an agreement, con19 tract, or transaction that is not a security-based 

20 swap pursuant to subparagraph (A), except 

21 that the master agreement shall be considered 

22 to be a security-based swap only with respect to 

23 each agreement, contract, or transaction under 

24 the master agreement that is a security-based 

25 swap pursuant to subparagraph (A). 


sroberts on DSKH9S0YB1PROD with BILLS
769 

•S 3217 AMDT 3739 

1 ‘‘(C) EXCLUSIONS.—The term ‘security2 based swap’ does not include any agreement, 

3 contract, or transaction that meets the defini4 tion of a security-based swap only because such 

5 agreement, contract, or transaction references, 

6 is based upon, or settles through the transfer, 

7 delivery, or receipt of an exempted security 

8 under paragraph (12), as in effect on the date 

9 of enactment of the Futures Trading Act of 

10 1982 (other than any municipal security as de11 fined in paragraph (29) as in effect on the date 

12 of enactment of the Futures Trading Act of 

13 1982), unless such agreement, contract, or 

14 transaction is of the character of, or is com15 monly known in the trade as, a put, call, or 

16 other option. 

17 ‘‘(D) MIXED SWAP.—The term ‘security18 based swap’ includes any agreement, contract, 

19 or transaction that is as described in subpara20 graph (A) and also is based on the value of 1 

21 or more interest or other rates, currencies, com22 modities, instruments of indebtedness, indices, 

23 quantitative measures, other financial or eco24 nomic interest or property of any kind (other 

25 than a single security or a narrow-based secuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00769 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
770 

•S 3217 AMDT 3739 

1 rity index), or the occurrence, non-occurrence, 

2 or the extent of the occurrence of an event or 

3 contingency associated with a potential finan4 cial, economic, or commercial consequence 

5 (other than an event described in subparagraph 

6 (A)(ii)(III)). 

7 ‘‘(69) SWAP.—The term ‘swap’ has the same 

8 meaning as in section 1a of the Commodity Ex9 change Act (7 U.S.C. 1a). 

10 ‘‘(70) PERSON ASSOCIATED WITH A SECURITY11 BASED SWAP DEALER OR MAJOR SECURITY-BASED

12 SWAP PARTICIPANT.— 

13 ‘‘(A) IN GENERAL.—The term ‘person as14 sociated with a security-based swap dealer or 

15 major security-based swap participant’ or ‘asso16 ciated person of a security-based swap dealer or 

17 major security-based swap participant’ means— 

18 ‘‘(i) any partner, officer, director, or 

19 branch manager of such security-based 

20 swap dealer or major security-based swap 

21 participant (or any person occupying a 

22 similar status or performing similar func23 tions); 

24 ‘‘(ii) any person directly or indirectly 

25 controlling, controlled by, or under comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00770 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
771 

•S 3217 AMDT 3739 

1 mon control with such security-based swap 

2 dealer or major security-based swap partic3 ipant; or 

4 ‘‘(iii) any employee of such security5 based swap dealer or major security-based 

6 swap participant. 

7 ‘‘(B) EXCLUSION.—Other than for pur8 poses of section 15F(l)(2), the term ‘person as9 sociated with a security-based swap dealer or 

10 major security-based swap participant’ or ‘asso11 ciated person of a security-based swap dealer or 

12 major security-based swap participant’ does not 

13 include any person associated with a security14 based swap dealer or major security-based swap 

15 participant whose functions are solely clerical or 

16 ministerial. 

17 ‘‘(71) SECURITY-BASED SWAP DEALER.— 

18 ‘‘(A) IN GENERAL.—The term ‘security19 based swap dealer’ means any person who— 

20 ‘‘(i) holds themself out as a dealer in 

21 security-based swaps; 

22 ‘‘(ii) makes a market in security-based 

23 swaps; 


sroberts on DSKH9S0YB1PROD with BILLS
772 

•S 3217 AMDT 3739 

1 ‘‘(iii) regularly engages in the pur2 chase and sale of security-based swaps in 

3 the ordinary course of a business; or 

4 ‘‘(iv) engages in any activity causing 

5 it to be commonly known in the trade as 

6 a dealer or market maker in security-based 

7 swaps. 

8 ‘‘(B) DESIGNATION BY TYPE OR CLASS.— 

9 A person may be designated as a security-based 

10 swap dealer for a single type or single class or 

11 category of security-based swap or activities 

12 and considered not to be a security-based swap 

13 dealer for other types, classes, or categories of 

14 security-based swaps or activities. 

15 ‘‘(C) CAPITAL.—In setting capital require16 ments for a person that is designated as a secu17 rity-based swap dealer for a single type or sin18 gle class or category of security-based swap or 

19 activities, the prudential regulator and the 

20 Commission shall take into account the risks 

21 associated with other types of security-based 

22 swaps or classes of security-based swaps or cat23 egories of security-based swaps engaged in and 

24 the other activities conducted by that person 

25 that are not otherwise subject to regulation apVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00772 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
773 

•S 3217 AMDT 3739 

1 plicable to that person by virtue of the status 

2 of the person as a security-based swap dealer. 

3 ‘‘(72) APPROPRIATE FEDERAL BANKING AGEN4 CY.—The term ‘appropriate Federal banking agency’ 

5 has the same meaning as in section 3(q) of the Fed6 eral Deposit Insurance Act (12 U.S.C. 1813(q)). 

7 ‘‘(73) BOARD.—The term ‘Board’ means the 

8 Board of Governors of the Federal Reserve System. 

9 ‘‘(74) PRUDENTIAL REGULATOR.—The term 

10 ‘prudential regulator’ has the same meaning as in 

11 section 1a of the Commodity Exchange Act (7 

12 U.S.C. 1a). 

13 ‘‘(75) SECURITY-BASED SWAP DATA REPOSI14 TORY.—The term ‘security-based swap data reposi15 tory’ means any person that collects, calculates, pre16 pares, or maintains information or records with re17 spect to transactions or positions in, or the terms 

18 and conditions of, security-based swaps entered into 

19 by third parties. 

20 ‘‘(76) SWAP DEALER.—The term ‘swap dealer’ 

21 has the same meaning as in section 1a of the Com22 modity Exchange Act (7 U.S.C. 1a). 

23 ‘‘(77) SWAP EXECUTION FACILITY.—The term 

24 ‘swap execution facility’ means a facility in which 

25 multiple participants have the ability to execute or 


sroberts on DSKH9S0YB1PROD with BILLS
774 

•S 3217 AMDT 3739 

1 trade security-based swaps by accepting bids and of2 fers made by other participants that are open to 

3 multiple participants in the facility or system, or 

4 confirmation facility, that— 

5 ‘‘(A) facilitates the execution of security6 based swaps between persons; and 

7 ‘‘(B) is not a designated contract market. 

8 ‘‘(78) SECURITY-BASED SWAP AGREEMENT.— 

9 ‘‘(A) IN GENERAL.—For purposes of sec10 tions 9, 10, 16, 20, and 21A of this Act, and 

11 section 17 of the Securities Act of 1933 (15 

12 U.S.C. 77q), the term ‘security-based swap 

13 agreement’ means a swap agreement as defined 

14 in section 206A of the Gramm-Leach-Bliley Act 

15 (15 U.S.C. 78c note) of which a material term 

16 is based on the price, yield, value, or volatility 

17 of any security or any group or index of securi18 ties, or any interest therein. 

19 ‘‘(B) EXCLUSIONS.—The term ‘security20 based swap agreement’ does not include any se21 curity-based swap.’’. 

22 (b) AUTHORITY TO FURTHER DEFINE TERMS.—The 

23 Securities and Exchange Commission may, by rule, fur24 ther define the terms ‘‘security-based swap’’, ‘‘security25 based swap dealer’’, ‘‘major security-based swap particiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00774 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
775 

•S 3217 AMDT 3739 

1 pant’’, and ‘‘eligible contract participant’’ with regard to 

2 security-based swaps (as such terms are defined in the 

3 amendments made by subsection (a)) for the purpose of 

4 including transactions and entities that have been struc5 tured to evade this subtitle or the amendments made by 

6 this subtitle. 

7 (c) OTHER INCORPORATED DEFINITIONS.—Except 

8 as the context otherwise requires, in this subtitle, the 

9 terms ‘‘prudential regulator’’, ‘‘swap’’, ‘‘swap dealer’’, 

10 ‘‘major swap participant’’, ‘‘swap data repository’’, ‘‘asso11 ciated person of a swap dealer or major swap participant’’, 

12 ‘‘eligible contract participant’’, ‘‘swap execution facility’’, 

13 ‘‘security-based swap’’, ‘‘security-based swap dealer’’, 

14 ‘‘major security-based swap participant’’, ‘‘security-based 

15 swap data repository’’, and ‘‘associated person of a secu16 rity-based swap dealer or major security-based swap par17 ticipant’’ have the same meanings as in section 1a of the 

18 Commodity Exchange Act (7 U.S.C. 1a), as amended by 

19 this Act. 

20 SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SE21 CURITY-BASED SWAP AGREEMENTS. 

22 (a) REPEAL.—Sections 206B and 206C of the 

23 Gramm-Leach-Bliley Act (Public Law 106–102; 15 U.S.C. 

24 78c note) are repealed. 


sroberts on DSKH9S0YB1PROD with BILLS
776 

•S 3217 AMDT 3739 

1 (b) CONFORMING AMENDMENTS TO THE SECURITIES

2 ACT OF 1933.— 

3 (1) Section 2A of the Securities Act of 1933 

4 (15 U.S.C. 77b-1) is amended— 

5 (A) by striking subsection (a) and reserv6 ing that subsection; and 

7 (B) by striking ‘‘(as defined in section 

8 206B of the Gramm-Leach-Bliley Act)’’ each 

9 place that such term appears and inserting ‘‘(as 

10 defined in section 3(a)(78) of the Securities Ex11 change Act of 1934)’’. 

12 (2) Section 17 of the Securities Act of 1933 (15 

13 U.S.C. 77q) is amended— 

14 (A) in subsection (a)— 

15 (i) by inserting ‘‘(including security16 based swaps)’’ after ‘‘securities’’; and 

17 (ii) by striking ‘‘(as defined in section 

18 206B of the Gramm-Leach-Bliley Act)’’ 

19 and inserting ‘‘(as defined in section 

20 3(a)(78) of the Securities Exchange Act)’’; 

21 and 

22 (B) in subsection (d), by striking ‘‘206B of 

23 the Gramm-Leach-Bliley Act’’ and inserting 

24 ‘‘3(a)(78) of the Securities Exchange Act of 

25 1934’’. 


sroberts on DSKH9S0YB1PROD with BILLS
777 

•S 3217 AMDT 3739 

1 (c) CONFORMING AMENDMENTS TO THE SECURITIES

2 EXCHANGE ACT OF 1934.—The Securities Exchange Act 

3 of 1934 (15 U.S.C. 78a et seq.) is amended— 

4 (1) in section 3A (15 U.S.C. 78c–1)— 

5 (A) by striking subsection (a) and reserv6 ing that subsection; and 

7 (B) by striking ‘‘(as defined in section 

8 206B of the Gramm-Leach-Bliley Act)’’ each 

9 place that the term appears; 

10 (2) in section 9 (15 U.S.C. 78i)— 

11 (A) in subsection (a), by striking para12 graphs (2) through (5) and inserting the fol13 lowing: 

14 ‘‘(2) To effect, alone or with 1 or more other persons, 

15 a series of transactions in any security registered on a na16 tional securities exchange, any security not so registered, 

17 or in connection with any security-based swap or security18 based swap agreement with respect to such security cre19 ating actual or apparent active trading in such security, 

20 or raising or depressing the price of such security, for the 

21 purpose of inducing the purchase or sale of such security 

22 by others. 

23 ‘‘(3) If a dealer, broker, security-based swap dealer, 

24 major security-based swap participant, or other person 

25 selling or offering for sale or purchasing or offering to 


sroberts on DSKH9S0YB1PROD with BILLS
778 

•S 3217 AMDT 3739 

1 purchase the security, a security-based swap, or a secu2 rity-based swap agreement with respect to such security, 

3 to induce the purchase or sale of any security registered 

4 on a national securities exchange, any security not so reg5 istered, any security-based swap, or any security-based 

6 swap agreement with respect to such security by the cir7 culation or dissemination in the ordinary course of busi8 ness of information to the effect that the price of any such 

9 security will or is likely to rise or fall because of market 

10 operations of any 1 or more persons conducted for the 

11 purpose of raising or depressing the price of such security. 

12 ‘‘(4) If a dealer, broker, security-based swap dealer, 

13 major security-based swap participant, or other person 

14 selling or offering for sale or purchasing or offering to 

15 purchase the security, a security-based swap, or security16 based swap agreement with respect to such security, to 

17 make, regarding any security registered on a national se18 curities exchange, any security not so registered, any secu19 rity-based swap, or any security-based swap agreement 

20 with respect to such security, for the purpose of inducing 

21 the purchase or sale of such security, such security-based 

22 swap, or such security-based swap agreement any state23 ment which was at the time and in the light of the cir24 cumstances under which it was made, false or misleading 

25 with respect to any material fact, and which that person 


sroberts on DSKH9S0YB1PROD with BILLS
779 

•S 3217 AMDT 3739 

1 knew or had reasonable ground to believe was so false or 

2 misleading. 

3 ‘‘(5) For a consideration, received directly or indi4 rectly from a broker, dealer, security-based swap dealer, 

5 major security-based swap participant, or other person 

6 selling or offering for sale or purchasing or offering to 

7 purchase the security, a security-based swap, or security8 based swap agreement with respect to such security, to 

9 induce the purchase of any security registered on a na10 tional securities exchange, any security not so registered, 

11 any security-based swap, or any security-based swap 

12 agreement with respect to such security by the circulation 

13 or dissemination of information to the effect that the price 

14 of any such security will or is likely to rise or fall because 

15 of the market operations of any 1 or more persons con16 ducted for the purpose of raising or depressing the price 

17 of such security.’’; and 

18 (B) in subsection (i), by striking ‘‘(as de19 fined in section 206B of the Gramm-Leach-Bli20 ley Act)’’; 

21 (3) in section 10 (15 U.S.C. 78j)— 

22 (A) in subsection (b), by striking ‘‘(as de23 fined in section 206B of the Gramm-Leach-Bli24 ley Act),’’ each place that term appears; and 


sroberts on DSKH9S0YB1PROD with BILLS
780 

•S 3217 AMDT 3739 

1 (B) in the matter following subsection (b), 

2 by striking ‘‘(as defined in section 206B of the 

3 Gramm-Leach-Bliley Act)’’; 

4 (4) in section 15 (15 U.S.C. 78o)— 

5 (A) in subsection (c)(1)(A), by striking 

6 ‘‘(as defined in section 206B of the Gramm7 Leach-Bliley Act),’’; 

8 (B) in subparagraphs (B) and (C) of sub9 section (c)(1), by striking ‘‘(as defined in sec10 tion 206B of the Gramm-Leach-Bliley Act)’’ 

11 each place that term appears; 

12 (C) by redesignating subsection (i), as 

13 added by section 303(f) of the Commodity Fu14 tures Modernization Act of 2000 (Public Law 

15 106–554; 114 Stat. 2763A–455)), as subsection 

16 (j); and 

17 (D) in subsection (j), as redesignated by 

18 subparagraph (C), by striking ‘‘(as defined in 

19 section 206B of the Gramm-Leach-Bliley Act)’’; 

20 (5) in section 16 (15 U.S.C. 78p)— 

21 (A) in subsection (a)(2)(C), by striking 

22 ‘‘(as defined in section 206(b) of the Gramm23 Leach-Bliley Act (15 U.S.C. 78c note))’’; 


sroberts on DSKH9S0YB1PROD with BILLS
781 

•S 3217 AMDT 3739 

1 (B) in subsection (a)(3)(B), by inserting 

2 ‘‘or security-based swaps’’ after ‘‘security-based 

3 swap agreement’’; 

4 (C) in the first sentence of subsection (b), 

5 by striking ‘‘(as defined in section 206B of the 

6 Gramm-Leach-Bliley Act)’’; 

7 (D) in the third sentence of subsection (b), 

8 by striking ‘‘(as defined in section 206B of the 

9 Gramm-Leach Bliley Act)’’ and inserting ‘‘or a 

10 security-based swap’’; and 

11 (E) in subsection (g), by striking ‘‘(as de12 fined in section 206B of the Gramm-Leach-Bli13 ley Act)’’; 

14 (6) in section 20 (15 U.S.C. 78t), 

15 (A) in subsection (d), by striking ‘‘(as de16 fined in section 206B of the Gramm-Leach-Bli17 ley Act)’’; and 

18 (B) in subsection (f), by striking ‘‘(as de19 fined in section 206B of the Gramm-Leach-Bli20 ley Act)’’; 

21 (7) in section 21A (15 U.S.C. 78u–1)— 

22 (A) in subsection (a)(1), by striking ‘‘(as 

23 defined in section 206B of the Gramm-Leach24 Bliley Act)’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
782 

•S 3217 AMDT 3739 

1 (B) in subsection (g), by striking ‘‘(as de2 fined in section 206B of the Gramm-Leach-Bli3 ley Act)’’. 

4 SEC. 763. AMENDMENTS TO THE SECURITIES EXCHANGE 

5 ACT OF 1934. 

6 (a) CLEARING FOR SECURITY-BASED SWAPS.—The 

7 Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 

8 is amended by inserting after section 3B (as added by sec9 tion 717 of this Act): 

10 ‘‘SEC. 3C. CLEARING FOR SECURITY-BASED SWAPS. 

11 ‘‘(a) CLEARING REQUIREMENT.— 

12 ‘‘(1) SUBMISSION.— 

13 ‘‘(A) IN GENERAL.—Except as provided in 

14 paragraphs (9) and (10), any person who is a 

15 party to a security-based swap shall submit 

16 such security-based swap for clearing to a clear17 ing agency registered under section 17A of this 

18 title. 

19 ‘‘(B) OPEN ACCESS.—The rules of a reg20 istered clearing agency shall— 

21 ‘‘(i) prescribe that all security-based 

22 swaps with the same terms and conditions 

23 are economically equivalent and may be 

24 offset with each other within the clearing 

25 agency; and 


sroberts on DSKH9S0YB1PROD with BILLS
783 

•S 3217 AMDT 3739 

1 ‘‘(ii) provide for nondiscriminatory 

2 clearing of a security-based swap executed 

3 bilaterally or on or through the rules of an 

4 unaffiliated national securities exchange or 

5 swap execution facility, subject to the re6 quirements of section 5(b). 

7 ‘‘(2) COMMISSION APPROVAL.— 

8 ‘‘(A) IN GENERAL.—A clearing agency 

9 shall submit to the Commission for prior ap10 proval any group, category, type, or class of se11 curity-based swaps that the clearing agency 

12 seeks to accept for clearing, which submission 

13 the Commission shall make available to the 

14 public. 

15 ‘‘(B) DEADLINE.—The Commission shall 

16 take final action on a request submitted pursu17 ant to subparagraph (A) not later than 90 days 

18 after submission of the request, unless the 

19 clearing agency submitting the request agrees 

20 to an extension of the time limitation estab21 lished under this subparagraph. 

22 ‘‘(C) APPROVAL.—The Commission shall 

23 approve, unconditionally or subject to such 

24 terms and conditions as the Commission deter25 mines to be appropriate, any request submitted 


sroberts on DSKH9S0YB1PROD with BILLS
784 

•S 3217 AMDT 3739 

1 pursuant to subparagraph (A) if the Commis2 sion finds that the request is consistent with 

3 the requirements of section 17A. The Commis4 sion shall not approve any such request if the 

5 Commission does not make such finding. 

6 ‘‘(D) RULES.—The Commission shall 

7 adopt rules for a clearing agency’s submission 

8 for approval, pursuant to this paragraph, of any 

9 group, category, type, or class of security-based 

10 swaps that the clearing agency seeks to accept 

11 for clearing. 

12 ‘‘(3) STAY OF CLEARING REQUIREMENT.—At 

13 any time after issuance of an approval pursuant to 

14 paragraph (2): 

15 ‘‘(A) REVIEW PROCESS.—The Commission, 

16 on application of a counterparty to a security17 based swap or on its own initiative, may stay 

18 the clearing requirement of paragraph (1) until 

19 the Commission completes a review of the terms 

20 of the security-based swap, or the group, cat21 egory, type, or class of security-based swaps, 

22 and the clearing arrangement. 

23 ‘‘(B) DEADLINE.—The Commission shall 

24 complete a review undertaken pursuant to sub25 paragraph (A) not later than 90 days after 


sroberts on DSKH9S0YB1PROD with BILLS
785 

•S 3217 AMDT 3739 

1 issuance of the stay, unless the clearing agency 

2 that clears the security-based swap, or the 

3 group, category, type, or class of security-based 

4 swaps, agrees to an extension of the time limi5 tation established under this subparagraph. 

6 ‘‘(C) DETERMINATION.—Upon completion 

7 of the review undertaken pursuant to subpara8 graph (A)— 

9 ‘‘(i) the Commission may determine, 

10 unconditionally or subject to such terms 

11 and conditions as the Commission deter12 mines to be appropriate, that the security13 based swap, or the group, category, type, 

14 or class of security-based swaps, must be 

15 cleared pursuant to this subsection if the 

16 Commission finds that such clearing— 

17 ‘‘(I) is consistent with the re18 quirements of section 17A; and 

19 ‘‘(II) is otherwise in the public 

20 interest, for the protection of inves21 tors, and consistent with the purposes 

22 of this title; 

23 ‘‘(ii) the Commission may determine 

24 that the clearing requirement of paragraph 

25 (1) shall not apply to the security-based 


sroberts on DSKH9S0YB1PROD with BILLS
786 

•S 3217 AMDT 3739 

1 swap, or the group, category, type, or class 

2 of security-based swaps; or 

3 ‘‘(iii) if a determination is made that 

4 the clearing requirement of paragraph (1) 

5 shall no longer apply, then the Commission 

6 may still permit such security-based swap, 

7 or the group, category, type, or class of se8 curity-based swaps to be cleared. 

9 ‘‘(D) RULES.—The Commission shall 

10 adopt rules for reviewing, pursuant to this 

11 paragraph, a clearing agency’s clearing of a se12 curity-based swap, or a group, category, type, 

13 or class of security-based swaps that the Com14 mission has accepted for clearing. 

15 ‘‘(4) SECURITY-BASED SWAPS REQUIRED TO BE

16 ACCEPTED FOR CLEARING.— 

17 ‘‘(A) RULEMAKING.—The Commission 

18 shall adopt rules to further identify any group, 

19 category, type, or class of security-based swaps 

20 not submitted for approval under paragraph (2) 

21 that the Commission deems should be accepted 

22 for clearing. In adopting such rules, the Com23 mission shall take into account the following 

24 factors: 


sroberts on DSKH9S0YB1PROD with BILLS
787 

•S 3217 AMDT 3739 

1 ‘‘(i) The extent to which any of the 

2 terms of the group, category, type, or class 

3 of security-based swaps, including price, 

4 are disseminated to third parties or are 

5 referenced in other agreements, contracts, 

6 or transactions. 

7 ‘‘(ii) The volume of transactions in 

8 the group, category, type, or class of secu9 rity-based swaps. 

10 ‘‘(iii) The extent to which the terms of 

11 the group, category, type, or class of secu12 rity-based swaps are similar to the terms 

13 of other agreements, contracts, or trans14 actions that are cleared. 

15 ‘‘(iv) Whether any differences in the 

16 terms of the group, category, type, or class 

17 of security-based swaps, compared to other 

18 agreements, contracts, or transactions that 

19 are cleared, are of economic significance. 

20 ‘‘(v) Whether a clearing agency is pre21 pared to clear the group, category, type, or 

22 class of security-based swaps and such 

23 clearing agency has in place effective risk 

24 management systems. 


sroberts on DSKH9S0YB1PROD with BILLS
788 

•S 3217 AMDT 3739 

1 ‘‘(vi) Any other factor the Commission 

2 determines to be appropriate. 

3 ‘‘(B) OTHER DESIGNATIONS.—At any time 

4 after the adoption of the rules required under 

5 subparagraph (A), the Commission may sepa6 rately designate a particular security-based 

7 swap or class of security-based swaps as subject 

8 to the clearing requirement of paragraph (1), 

9 taking into account the factors established in 

10 clauses (i) through (vi) of subparagraph (A) 

11 and the rules adopted in such subparagraph. 

12 ‘‘(C) IN GENERAL.—In accordance with 

13 subparagraph (A), the Commission shall, con14 sistent with the public interest, adopt rules 

15 under the expedited process described in sub16 paragraph (D) to establish criteria for deter17 mining that a swap, or any group, category, 

18 type, or class of swap is required to be cleared. 

19 ‘‘(D) EXPEDITED RULEMAKING AUTHOR20 ITY.— 

21 ‘‘(i) PROCEDURE.—The promulgation 

22 of regulations under subparagraph (A) 

23 may be made without regard to— 


sroberts on DSKH9S0YB1PROD with BILLS
789 

•S 3217 AMDT 3739 

1 ‘‘(I) the notice and comment pro2 visions of section 553 of title 5, 

3 United States Code; and 

4 ‘‘(II) chapter 35 of title 44, 

5 United States Code (commonly known 

6 as the ‘Paperwork Reduction Act’). 

7 ‘‘(ii) AGENCY RULEMAKING.—In car8 rying out subparagraph (A), the Commis9 sion shall use the authority provided under 

10 section 808 of title 5, United States Code. 

11 ‘‘(5) PREVENTION OF EVASION.— 

12 ‘‘(A) IN GENERAL.—The Commission shall 

13 have authority to prescribe rules under this sec14 tion, or issue interpretations of such rules, as 

15 necessary to prevent evasions of this section. 

16 ‘‘(B) DUTY OF COMMISSION TO INVES17 TIGATE AND TAKE CERTAIN ACTIONS.—To the 

18 extent the Commission finds that a particular 

19 security-based swap or any group, category, 

20 type, or class of security-based swaps that 

21 would otherwise be subject to mandatory clear22 ing but no clearing agency has listed the secu23 rity-based swap or the group, category, type, or 

24 class of security-based swaps for clearing, the 

25 Commission shall— 


sroberts on DSKH9S0YB1PROD with BILLS
790 

•S 3217 AMDT 3739 

1 ‘‘(i) investigate the relevant facts and 

2 circumstances; 

3 ‘‘(ii) within 30 days issue a public re4 port containing the results of the investiga5 tion; and 

6 ‘‘(iii) take such actions as the Com7 mission determines to be necessary and in 

8 the public interest, which may include re9 quiring the retaining of adequate margin 

10 or capital by parties to the security-based 

11 swap or the group, category, type, or class 

12 of security-based swaps. 

13 ‘‘(C) EFFECT ON AUTHORITY.—Nothing in 

14 this paragraph— 

15 ‘‘(i) authorize the Commission to re16 quire a clearing agency to list for clearing 

17 a security-based swap or any group, cat18 egory, type, or class of security-based 

19 swaps if the clearing of the security-based 

20 swap or the group, category, type, or class 

21 of security-based swaps would adversely af22 fect the business operations of the clearing 

23 agency, threaten the financial integrity of 

24 the clearing agency, or pose a systemic risk 

25 to the clearing agency; and 


sroberts on DSKH9S0YB1PROD with BILLS
791 

•S 3217 AMDT 3739 

1 ‘‘(ii) affect the authority of the Com2 mission to enforce the open access provi3 sions of paragraph (1) with respect to a se4 curity-based swap or the group, category, 

5 type, or class of security-based swaps that 

6 is listed for clearing by a clearing agency. 

7 ‘‘(6) REQUIRED REPORTING.— 

8 ‘‘(A) BOTH COUNTERPARTIES.—Both 

9 counterparties to a security-based swap that is 

10 not cleared by any clearing agency shall report 

11 such a security-based swap either to a reg12 istered security-based swap repository described 

13 in section 13(n) or, if there is no repository 

14 that would accept the security-based swap, to 

15 the Commission pursuant to section 13A. 

16 ‘‘(B) TIMING.—Counterparties to a secu17 rity-based swap shall submit the reports re18 quired under subparagraph (A) not later than 

19 such time period as the Commission may by 

20 rule or regulation prescribe. 

21 ‘‘(7) TRANSITION RULES.— 

22 ‘‘(A) REPORTING TRANSITION RULES.— 

23 Rules adopted by the Commission under this 

24 section shall provide for the reporting of data, 

25 as follows: 


sroberts on DSKH9S0YB1PROD with BILLS
792 

•S 3217 AMDT 3739 

1 ‘‘(i) Security-based swaps entered into 

2 before the date of the enactment of this 

3 section shall be reported to a registered se4 curity-based swap repository or the Com5 mission not later than 180 days after the 

6 effective date of this section. 

7 ‘‘(ii) Security-based swaps entered 

8 into on or after such date of enactment 

9 shall be reported to a registered security10 based swap repository or the Commission 

11 not later than the later of— 

12 ‘‘(I) 90 days after such effective 

13 date; or 

14 ‘‘(II) such other time after enter15 ing into the security-based swap as 

16 the Commission may prescribe by rule 

17 or regulation. 

18 ‘‘(B) CLEARING TRANSITION RULES.— 

19 ‘‘(i) Security-based swaps entered into 

20 before the date of the enactment of this 

21 section are exempt from the clearing re22 quirements of this subsection if reported 

23 pursuant to subparagraph (A)(i). 

24 ‘‘(ii) Security-based swaps entered 

25 into before application of the clearing reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00792 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
793 

•S 3217 AMDT 3739 

1 quirement pursuant to this section are ex2 empt from the clearing requirements of 

3 this section if reported pursuant to sub4 paragraph (A)(ii). 

5 ‘‘(8) TRADE EXECUTION.— 

6 ‘‘(A) IN GENERAL.—With respect to trans7 actions involving security-based swaps subject 

8 to the clearing requirement of paragraph (1), 

9 counterparties shall— 

10 ‘‘(i) execute the transaction on an ex11 change; or 

12 ‘‘(ii) execute the transaction on a 

13 swap execution facility registered under 

14 section 3D or a swap execution facility 

15 that is exempt from registration under sec16 tion 3D(e). 

17 ‘‘(B) EXCEPTION.—The requirements of 

18 clauses (i) and (ii) of subparagraph (A) shall 

19 not apply— 

20 ‘‘(i) if no national securities exchange 

21 or security-based swap execution facility 

22 makes the security-based swap available to 

23 trade; or 


sroberts on DSKH9S0YB1PROD with BILLS
794 

•S 3217 AMDT 3739 

1 ‘‘(ii) to swap transactions where a 

2 commercial end user opts to use the clear3 ing exemption under paragraph (10). 

4 ‘‘(9) REQUIRED EXEMPTION.—Subject to para5 graph (4), the Commission shall exempt a security6 based swap from the requirements of paragraphs (1) 

7 and (8) and any rules issued under this subsection, 

8 if no clearing agency registered under this Act will 

9 accept the security-based swap from clearing. 

10 ‘‘(10) END USER CLEARING EXEMPTION.— 

11 ‘‘(A) DEFINITION OF COMMERCIAL END

12 USER.— 

13 ‘‘(i) IN GENERAL.—In this paragraph, 

14 the term ‘commercial end user’ means any 

15 person other than a financial entity de16 scribed in clause (ii) who, as its primary 

17 business activity, owns, uses, produces, 

18 processes, manufactures, distributes, mer19 chandises, or markets services or commod20 ities (which shall include coal, natural gas, 

21 electricity, ethanol, crude oil, distillates, 

22 and other hydrocarbons) either individually 

23 or in a fiduciary capacity. 

24 ‘‘(ii) FINANCIAL ENTITY.—The term 

25 ‘financial entity’ means— 


sroberts on DSKH9S0YB1PROD with BILLS
795 

•S 3217 AMDT 3739 

1 ‘‘(I) a swap dealer, major swap 

2 participant, security-based swap deal3 er, or major security-based swap par4 ticipant; 

5 ‘‘(II) a person predominantly en6 gaged in activities that are in the 

7 business of banking or financial in na8 ture, as defined in Section 4(k) of the 

9 Bank Holding Company Act of 1956; 

10 ‘‘(III) a person predominantly 

11 engaged in activities that are financial 

12 in nature; 

13 ‘‘(IV) a private fund as defined 

14 in section 202(a) of the Investment 

15 Advisers Act of 1940 (15 U.S.C. 80b16 2(a)) or a commodity pool as defined 

17 in section 1a of the Commodity Ex18 change Act (7 U.S.C. 1a); or 

19 ‘‘(V) a person that is registered 

20 or required to be registered with the 

21 Commission, but does not include a 

22 public company which registers its se23 curities with the Commission. 

24 ‘‘(B) END USER CLEARING EXEMPTION.— 


sroberts on DSKH9S0YB1PROD with BILLS
796 

•S 3217 AMDT 3739 

1 ‘‘(i) IN GENERAL.—Subject to clause 

2 (ii), in the event that a security-based 

3 swap is subject to the mandatory clearing 

4 requirement under paragraph (1), and 1 of 

5 the counterparties to the security-based 

6 swap is a commercial end user that 

7 counterparty— 

8 ‘‘(I)(aa) may elect not to clear 

9 the security-based swap, as required 

10 under paragraph (1); or 

11 ‘‘(bb) may elect to require clear12 ing of the security-based swap; and 

13 ‘‘(II) if the end user makes an 

14 election under subclause (I)(bb), shall 

15 have the sole right to select the clear16 ing agency at which the security-based 

17 swap will be cleared. 

18 ‘‘(ii) LIMITATION.—A commercial end 

19 user may only make an election under 

20 clause (i) if the end user is using the secu21 rity-based swap to hedge its own commer22 cial risk. 

23 ‘‘(C) TREATMENT OF AFFILIATES.— 

24 ‘‘(i) IN GENERAL.—An affiliate of a 

25 commercial end user (including affiliate enVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00796 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
797 

•S 3217 AMDT 3739 

1 tities predominantly engaged in providing 

2 financing for the purchase of the merchan3 dise or manufactured goods of the com4 mercial end user) may make an election 

5 under subparagraph (B)(i) only if the affil6 iate, acting on behalf of the commercial 

7 end user and as an agent, uses the secu8 rity-based swap to hedge or mitigate the 

9 commercial risk of the commercial end 

10 user parent or other affiliates of the com11 mercial end user that is not a financial en12 tity.. 

13 ‘‘(ii) PROHIBITION RELATING TO CER14 TAIN AFFILIATES.—An affiliate of a com15 mercial end user shall not use the exemp16 tion under subparagraph (B) if the affil17 iate is— 

18 ‘‘(I) a security-based swap dealer; 

19 ‘‘(II) a security-based security20 based swap dealer; 

21 ‘‘(III) a major security-based 

22 swap participant; 

23 ‘‘(IV) a major security-based se24 curity-based swap participant; 


sroberts on DSKH9S0YB1PROD with BILLS
798 

•S 3217 AMDT 3739 

1 ‘‘(V) an issuer that would be an 

2 investment company, as defined in 

3 section 3 of the Investment Company 

4 Act of 1940 (15 U.S.C. 80a–3), but 

5 for paragraph (1) or (7) of subsection 

6 (c) of that section 3 (15 U.S.C. 80a– 

7 3(c)); 

8 ‘‘(VI) a commodity pool; 

9 ‘‘(VII) a bank holding company 

10 with over $50,000,000,000 in consoli11 dated assets; or 

12 ‘‘(VIII) an affiliate of any entity 

13 described in subclauses (I) through 

14 (VII). 

15 ‘‘(iii) ABUSE OF EXEMPTION.—The 

16 Commission may prescribe such rules, or 

17 issue interpretations of the rules, as the 

18 Commission determines to be necessary to 

19 prevent abuse of the exemption described 

20 in subparagraph (B). 

21 ‘‘(D) OPTION TO CLEAR.— 

22 ‘‘(i) SECURITY-BASED SWAPS RE23 QUIRED TO BE CLEARED ENTERED INTO

24 WITH A FINANCIAL ENTITY.—With respect 

25 to any securities-based swap that is reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00798 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
799 

•S 3217 AMDT 3739 

1 quired to be cleared by a clearing agency 

2 and entered into by a securities-based swap 

3 dealer or a major securities-based swap 

4 participant with a financial entity, the fi5 nancial entity shall have the sole right to 

6 select the clearing agency at which the se7 curities-based swap will be cleared. 

8 ‘‘(ii) SECURITY-BASED SWAPS NOT

9 REQUIRED TO BE CLEARED ENTERED INTO

10 WITH A FINANCIAL ENTITY OR COMMER11 CIAL END USER.—With respect to any se12 curities-based swap that is not required to 

13 be cleared by a clearing agency and en14 tered into by a securities-based swap deal15 er or a major securities-based swap partici16 pant with a financial entity or commercial 

17 end user, the financial entity or commer18 cial end user— 

19 ‘‘(I) may elect to require clearing 

20 of the securities-based swap; and 

21 ‘‘(II) shall have the sole right to 

22 select the clearing agency at which the 

23 securities-based swap will be cleared. 

24 ‘‘(b) AUDIT COMMITTEE APPROVAL.—Exemptions 

25 from the requirements of this section to clear or trade a 


sroberts on DSKH9S0YB1PROD with BILLS
800 

•S 3217 AMDT 3739 

1 security-based swap through a national securities ex2 change or security-based swap execution facility shall be 

3 available to a counterparty that is an issuer of securities 

4 that are registered under section 12 or that is required 

5 to file reports pursuant to section 15(d), only if the 

6 issuer’s audit committee has reviewed and approved the 

7 issuer’s decision to enter into security-based swaps that 

8 are subject to such exemptions. 

9 ‘‘(c) PUBLIC AVAILABILITY OF SECURITY-BASED

10 SWAP TRANSACTION DATA.— 

11 ‘‘(1) IN GENERAL.— 

12 ‘‘(A) DEFINITION OF REAL-TIME PUBLIC

13 REPORTING.—In this paragraph, the term ‘real14 time public reporting’ means to report data re15 lating to a security-based swap transaction as 

16 soon as technologically practicable after the 

17 time at which the security-based swap trans18 action has been executed. 

19 ‘‘(B) PURPOSE.—The purpose of this sec20 tion is to authorize the Commission to make se21 curity-based swap transaction and pricing data 

22 available to the public in such form and at such 

23 times as the Commission determines appro24 priate to enhance price discovery. 


sroberts on DSKH9S0YB1PROD with BILLS
801 

•S 3217 AMDT 3739 

1 ‘‘(C) GENERAL RULE.—The Commission is 

2 authorized to provide by rule for the public 

3 availability of security-based swap transaction 

4 and pricing data as follows: 

5 ‘‘(i) With respect to those security6 based swaps that are subject to the man7 datory clearing requirement described in 

8 subsection (a)(1) (including those security9 based swaps that are exempted from those 

10 requirements), the Commission shall re11 quire real-time public reporting for such 

12 transactions. 

13 ‘‘(ii) With respect to those security14 based swaps that are not subject to the 

15 mandatory clearing requirement described 

16 in subsection (a)(1), but are cleared at a 

17 registered clearing agency, the Commission 

18 shall require real-time public reporting for 

19 such transactions. 

20 ‘‘(iii) With respect to security-based 

21 swaps that are not cleared at a registered 

22 clearing agency and which are reported to 

23 a security-based swap data repository or 

24 the Commission under subsection (a), the 

25 Commission shall make available to the 


sroberts on DSKH9S0YB1PROD with BILLS
802 

•S 3217 AMDT 3739 

1 public, in a manner that does not disclose 

2 the business transactions and market posi3 tions of any person, aggregate data on 

4 such security-based swap trading volumes 

5 and positions. 

6 ‘‘(iv) With respect to security-based 

7 swaps that are exempt from the require8 ments of subsection (a)(1), but are subject 

9 to the requirements of subsection (a)(8), 

10 the Commission shall require real-time 

11 public reporting for such transactions. 

12 ‘‘(D) REGISTERED ENTITIES AND PUBLIC

13 REPORTING.—The Commission may require 

14 registered entities to publicly disseminate the 

15 security-based swap transaction and pricing 

16 data required to be reported under this para17 graph. 

18 ‘‘(E) RULEMAKING REQUIRED.—With re19 spect to the rule providing for the public avail20 ability of transaction and pricing data for secu21 rity-based swaps described in clauses (i) and (ii) 

22 of subparagraph (C), the rule promulgated by 

23 the Commission shall contain provisions— 

24 ‘‘(i) to ensure such information does 

25 not identify the participants; 


sroberts on DSKH9S0YB1PROD with BILLS
803 

•S 3217 AMDT 3739 

1 ‘‘(ii) to specify the criteria for deter2 mining what constitutes a large notional 

3 security-based swap transaction (block 

4 trade) for particular markets and con5 tracts; 

6 ‘‘(iii) to specify the appropriate time 

7 delay for reporting large notional security8 based swap transactions (block trades) to 

9 the public; and 

10 ‘‘(iv) that take into account whether 

11 the public disclosure will materially reduce 

12 market liquidity. 

13 ‘‘(F) TIMELINESS OF REPORTING.—Par14 ties to a security-based swap (including agents 

15 of the parties to a security-based swap) shall be 

16 responsible for reporting security-based swap 

17 transaction information to the appropriate reg18 istered entity in a timely manner as may be 

19 prescribed by the Commission. 

20 ‘‘(2) SEMIANNUAL AND ANNUAL PUBLIC RE21 PORTING OF AGGREGATE SECURITY-BASED SWAP

22 DATA.— 

23 ‘‘(A) IN GENERAL.—In accordance with 

24 subparagraph (B), the Commission shall issue a 

25 written report on a semiannual and annual 


sroberts on DSKH9S0YB1PROD with BILLS
804 

•S 3217 AMDT 3739 

1 basis to make available to the public informa2 tion relating to— 

3 ‘‘(i) the trading and clearing in the 

4 major security-based swap categories; and 

5 ‘‘(ii) the market participants and de6 velopments in new products. 

7 ‘‘(B) USE; CONSULTATION.—In preparing 

8 a report under subparagraph (A), the Commis9 sion shall— 

10 ‘‘(i) use information from security11 based swap data repositories and clearing 

12 agencies; and 

13 ‘‘(ii) consult with the Office of the 

14 Comptroller of the Currency, the Bank for 

15 International Settlements, and such other 

16 regulatory bodies as may be necessary. 

17 ‘‘(C) TRANSITION RULE FOR

18 PREENACTMENT SECURITY-BASED SWAPS.— 

19 ‘‘(i) SECURITY-BASED SWAPS EN20 TERED INTO BEFORE THE DATE OF EN21 ACTMENT OF THE WALL STREET TRANS22 PARENCY AND ACCOUNTABILITY ACT OF

23 2010.—Each security-based swap entered 

24 into before the date of enactment of the 

25 Wall Street Transparency and AccountVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00804 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
805 

•S 3217 AMDT 3739 

1 ability Act of 2010, the terms of which 

2 have not expired as of the date of enact3 ment of that Act, shall be reported to a 

4 registered security-based swap data reposi5 tory or the Commission by a date that is 

6 not later than— 

7 ‘‘(I) 30 days after the date of 

8 issuance of the interim final rule; or 

9 ‘‘(II) such other period as the 

10 Commission determines to be appro11 priate. 

12 ‘‘(ii) COMMISSION RULEMAKING.—The 

13 Commission shall promulgate an interim 

14 final rule within 90 days of the date of en15 actment of this section providing for the 

16 reporting of each security-based swap en17 tered into before the date of enactment as 

18 referenced in clause (i). 

19 ‘‘(D) EFFECTIVE DATE.—The reporting 

20 provisions described in this paragraph shall be 

21 effective upon the date of enactment of this sec22 tion. 

23 ‘‘(d) DESIGNATION OF CHIEF COMPLIANCE OFFI24 CER.— 


sroberts on DSKH9S0YB1PROD with BILLS
806 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—Each registered clearing 

2 agency shall designate an individual to serve as a 

3 chief compliance officer. 

4 ‘‘(2) DUTIES.—The chief compliance officer 

5 shall— 

6 ‘‘(A) report directly to the board or to the 

7 senior officer of the clearing agency; 

8 ‘‘(B) in consultation with its board, a body 

9 performing a function similar thereto, or the 

10 senior officer of the registered clearing agency, 

11 resolve any conflicts of interest that may arise; 

12 ‘‘(C) be responsible for administering each 

13 policy and procedure that is required to be es14 tablished pursuant to this section; 

15 ‘‘(D) ensure compliance with this title (in16 cluding regulations issued under this title) re17 lating to agreements, contracts, or transactions, 

18 including each rule prescribed by the Commis19 sion under this section; 

20 ‘‘(E) establish procedures for the remedi21 ation of noncompliance issues identified by the 

22 compliance officer through any— 

23 ‘‘(i) compliance office review; 

24 ‘‘(ii) look-back; 


sroberts on DSKH9S0YB1PROD with BILLS
807 

•S 3217 AMDT 3739 

1 ‘‘(iii) internal or external audit find2 ing; 

3 ‘‘(iv) self-reported error; or 

4 ‘‘(v) validated complaint; and 

5 ‘‘(F) establish and follow appropriate pro6 cedures for the handling, management response, 

7 remediation, retesting, and closing of non8 compliance issues. 

9 ‘‘(3) ANNUAL REPORTS.— 

10 ‘‘(A) IN GENERAL.—In accordance with 

11 rules prescribed by the Commission, the chief 

12 compliance officer shall annually prepare and 

13 sign a report that contains a description of— 

14 ‘‘(i) the compliance of the registered 

15 clearing agency or security-based swap exe16 cution facility of the compliance officer 

17 with respect to this title (including regula18 tions under this title); and 

19 ‘‘(ii) each policy and procedure of the 

20 registered clearing agency of the compli21 ance officer (including the code of ethics 

22 and conflict of interest policies of the reg23 istered clearing agency). 

24 ‘‘(B) REQUIREMENTS.—A compliance re25 port under subparagraph (A) shall— 


sroberts on DSKH9S0YB1PROD with BILLS
808 

•S 3217 AMDT 3739 

1 ‘‘(i) accompany each appropriate fi2 nancial report of the registered clearing 

3 agency that is required to be furnished to 

4 the Commission pursuant to this section; 

5 and 

6 ‘‘(ii) include a certification that, under 

7 penalty of law, the compliance report is ac8 curate and complete.’’. 

9 (b) CLEARING AGENCY REQUIREMENTS.—Section 

10 17A of the Securities Exchange Act of 1934 (15 U.S.C. 

11 78q-1) is amended by adding at the end the following: 

12 ‘‘(g) REGISTRATION REQUIREMENT.—It shall be un13 lawful for a clearing agency, unless registered with the 

14 Commission, directly or indirectly to make use of the mails 

15 or any means or instrumentality of interstate commerce 

16 to perform the functions of a clearing agency with respect 

17 to a security-based swap. 

18 ‘‘(h) VOLUNTARY REGISTRATION.—A person that 

19 clears agreements, contracts, or transactions that are not 

20 required to be cleared under this title may register with 

21 the Commission as a clearing agency. 

22 ‘‘(i) STANDARDS FOR CLEARING AGENCIES CLEAR23 ING SECURITY-BASED SWAP TRANSACTIONS.—To be reg24 istered and to maintain registration as a clearing agency 

25 that clears security-based swap transactions, a clearing 


sroberts on DSKH9S0YB1PROD with BILLS
809 

•S 3217 AMDT 3739 

1 agency shall comply with such standards as the Commis2 sion may establish by rule. In establishing any such stand3 ards, and in the exercise of its oversight of such a clearing 

4 agency pursuant to this title, the Commission may con5 form such standards or oversight to reflect evolving 

6 United States and international standards. Except where 

7 the Commission determines otherwise by rule or regula8 tion, a clearing agency shall have reasonable discretion in 

9 establishing the manner in which it complies with any such 

10 standards. 

11 ‘‘(j) RULES.—The Commission shall adopt rules gov12 erning persons that are registered as clearing agencies for 

13 security-based swaps under this title. 

14 ‘‘(k) EXEMPTIONS.— 

15 ‘‘(1) IN GENERAL.—The Commission may ex16 empt, conditionally or unconditionally, a clearing 

17 agency from registration under this section for the 

18 clearing of security-based swaps if the Commission 

19 determines that the clearing agency is subject to 

20 comparable, comprehensive supervision and regula21 tion by the Commodity Futures Trading Commission 

22 or the appropriate government authorities in the 

23 home country of the agency. Such conditions may in24 clude, but are not limited to, requiring that the 

25 clearing agency be available for inspection by the 


sroberts on DSKH9S0YB1PROD with BILLS
810 

•S 3217 AMDT 3739 

1 Commission and make available all information re2 quested by the Commission. 

3 ‘‘(2) DERIVATIVES CLEARING ORGANIZA4 TIONS.—A person that is required to be registered 

5 as a derivatives clearing organization under the 

6 Commodity Exchange Act, whose principal business 

7 is clearing commodity futures and options on com8 modity futures transactions and swaps and which is 

9 a derivatives clearing organization registered with 

10 the Commodity Futures Trading Commission under 

11 the Commodity Exchange Act (7 U.S.C. 1 et seq.), 

12 shall be unconditionally exempt from registration 

13 under this section solely for the purpose of clearing 

14 security-based swaps, unless the Commission finds 

15 that such derivatives clearing organization is not 

16 subject to comparable, comprehensive supervision 

17 and regulation by the Commodity Futures Trading 

18 Commission. 

19 ‘‘(l) MODIFICATION OF CORE PRINCIPLES.—The 

20 Commission may conform the core principles established 

21 in this section to reflect evolving United States and inter22 national standards.’’. 

23 (c) SECURITY-BASED SWAP EXECUTION FACILI24 TIES.—The Securities Exchange Act of 1934 (15 U.S.C. 


sroberts on DSKH9S0YB1PROD with BILLS
811 

•S 3217 AMDT 3739 

1 78a et seq.) is amended by inserting after section 3C (as 

2 added by subsection (a) of this section) the following: 

3 ‘‘SEC. 3D. SECURITY-BASED SWAP EXECUTION FACILITIES. 

4 ‘‘(a) REGISTRATION.— 

5 ‘‘(1) IN GENERAL.—No person may operate a 

6 facility for the trading or processing of security7 based swaps, unless the facility is registered as a se8 curity-based swap execution facility or as a national 

9 securities exchange under this section. 

10 ‘‘(2) DUAL REGISTRATION.—Any person that is 

11 registered as a security-based swap execution facility 

12 under this section shall register with the Commis13 sion regardless of whether the person also is reg14 istered with the Commodity Futures Trading Com15 mission as a swap execution facility. 

16 ‘‘(b) TRADING AND TRADE PROCESSING.—A secu17 rity-based swap execution facility that is registered under 

18 subsection (a) may— 

19 ‘‘(1) make available for trading any security20 based swap; and 

21 ‘‘(2) facilitate trade processing of any security22 based swap. 

23 ‘‘(c) IDENTIFICATION OF FACILITY USED TO TRADE

24 SECURITY-BASED SWAPS BY NATIONAL SECURITIES EX25 CHANGES.—A national securities exchange shall, to the exVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00811 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
812 

•S 3217 AMDT 3739 

1 tent that the exchange also operates a security-based swap 

2 execution facility and uses the same electronic trade execu3 tion system for listing and executing trades of security4 based swaps on or through the exchange and the facility, 

5 identify whether electronic trading of such security-based 

6 swaps is taking place on or through the national securities 

7 exchange or the security-based swap execution facility. 

8 ‘‘(d) CORE PRINCIPLES FOR SECURITY-BASED SWAP

9 EXECUTION FACILITIES.— 

10 ‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 

11 ‘‘(A) IN GENERAL.—To be registered, and 

12 maintain registration, as a security-based swap 

13 execution facility, the security-based swap exe14 cution facility shall comply with— 

15 ‘‘(i) the core principles described in 

16 this subsection; and 

17 ‘‘(ii) any requirement that the Com18 mission may impose by rule or regulation. 

19 ‘‘(B) REASONABLE DISCRETION OF SECU20 RITY-BASED SWAP EXECUTION FACILITY.—Un21 less otherwise determined by the Commission, 

22 by rule or regulation, a security-based swap 

23 execution facility described in subparagraph (A) 

24 shall have reasonable discretion in establishing 


sroberts on DSKH9S0YB1PROD with BILLS
813 

•S 3217 AMDT 3739 

1 the manner in which it complies with the core 

2 principles described in this subsection. 

3 ‘‘(2) COMPLIANCE WITH RULES.—A security4 based swap execution facility shall— 

5 ‘‘(A) monitor and enforce compliance with 

6 any rule established by such security-based 

7 swap execution facility, including— 

8 ‘‘(i) the terms and conditions of the 

9 security-based swaps traded or processed 

10 on or through the facility; and 

11 ‘‘(ii) any limitation on access to the 

12 facility; 

13 ‘‘(B) establish and enforce trading, trade 

14 processing, and participation rules that will 

15 deter abuses and have the capacity to detect, 

16 investigate, and enforce those rules, including 

17 means— 

18 ‘‘(i) to provide market participants 

19 with impartial access to the market; and 

20 ‘‘(ii) to capture information that may 

21 be used in establishing whether rule viola22 tions have occurred; and 

23 ‘‘(C) establish rules governing the oper24 ation of the facility, including rules specifying 

25 trading procedures to be used in entering and 


sroberts on DSKH9S0YB1PROD with BILLS
814 

•S 3217 AMDT 3739 

1 executing orders traded or posted on the facil2 ity, including block trades. 

3 ‘‘(3) SECURITY-BASED SWAPS NOT READILY

4 SUSCEPTIBLE TO MANIPULATION.—The security5 based swap execution facility shall permit trading 

6 only in security-based swaps that are not readily 

7 susceptible to manipulation. 

8 ‘‘(4) MONITORING OF TRADING AND TRADE

9 PROCESSING.—The security-based swap execution 

10 facility shall— 

11 ‘‘(A) establish and enforce rules or terms 

12 and conditions defining, or specifications detail13 ing— 

14 ‘‘(i) trading procedures to be used in 

15 entering and executing orders traded on or 

16 through the facilities of the security-based 

17 swap execution facility; and 

18 ‘‘(ii) procedures for trade processing 

19 of security-based swaps on or through the 

20 facilities of the security-based swap execu21 tion facility; and 

22 ‘‘(B) monitor trading in security-based 

23 swaps to prevent manipulation, price distortion, 

24 and disruptions of the delivery or cash settle25 ment process through surveillance, compliance, 


sroberts on DSKH9S0YB1PROD with BILLS
815 

•S 3217 AMDT 3739 

1 and disciplinary practices and procedures, in2 cluding methods for conducting real-time moni3 toring of trading and comprehensive and accu4 rate trade reconstructions. 

5 ‘‘(5) ABILITY TO OBTAIN INFORMATION.—The 

6 security-based swap execution facility shall— 

7 ‘‘(A) establish and enforce rules that will 

8 allow the facility to obtain any necessary infor9 mation to perform any of the functions de10 scribed in this subsection; 

11 ‘‘(B) provide the information to the Com12 mission on request; and 

13 ‘‘(C) have the capacity to carry out such 

14 international information-sharing agreements as 

15 the Commission may require. 

16 ‘‘(6) POSITION LIMITS OR ACCOUNTABILITY.— 

17 ‘‘(A) IN GENERAL.—To reduce the poten18 tial threat of market manipulation or conges19 tion, especially during trading in the delivery 

20 month, a security-based swap execution facility 

21 that is a trading facility shall adopt for each of 

22 the contracts of the facility, as is necessary and 

23 appropriate, position limitations or position ac24 countability for speculators. 


sroberts on DSKH9S0YB1PROD with BILLS
816 

•S 3217 AMDT 3739 

1 ‘‘(B) POSITION LIMITS.—For any contract 

2 or agreement that is subject to a position limi3 tation established by the Commission pursuant 

4 to section 10B, the security-based swap execu5 tion facility shall set its position limitation at a 

6 level no higher than the limitation established 

7 by the Commission. 

8 ‘‘(C) POSITION ENFORCEMENT.—For any 

9 contract or agreement that is subject to a posi10 tion limitation established by the Commission 

11 pursuant to section 10B, a security-based swap 

12 execution facility shall reject any proposed secu13 rity-based swap transaction if, based on infor14 mation readily available to a security-based 

15 swap execution facility, any proposed security16 based swap transaction would cause a security17 based swap execution facility customer that 

18 would be a party to such swap transaction to 

19 exceed such position limitation. 

20 ‘‘(7) FINANCIAL INTEGRITY OF TRANS21 ACTIONS.—The security-based swap execution facil22 ity shall establish and enforce rules and procedures 

23 for ensuring the financial integrity of security-based 

24 swaps entered on or through the facilities of the se25 curity-based swap execution facility, including the 


sroberts on DSKH9S0YB1PROD with BILLS
817 

•S 3217 AMDT 3739 

1 clearance and settlement of security-based swaps 

2 pursuant to section 3C(a)(1). 

3 ‘‘(8) EMERGENCY AUTHORITY.—The security4 based swap execution facility shall adopt rules to 

5 provide for the exercise of emergency authority, in 

6 consultation or cooperation with the Commission, as 

7 is necessary and appropriate, including the authority 

8 to liquidate or transfer open positions in any secu9 rity-based swap or to suspend or curtail trading in 

10 a security-based swap. 

11 ‘‘(9) TIMELY PUBLICATION OF TRADING INFOR12 MATION.— 

13 ‘‘(A) IN GENERAL.—The security-based 

14 swap execution facility shall make public timely 

15 information on price, trading volume, and other 

16 trading data on security-based swaps to the ex17 tent prescribed by the Commission. 

18 ‘‘(B) CAPACITY OF SECURITY-BASED SWAP

19 EXECUTION FACILITY.—The security-based 

20 swap execution facility shall be required to have 

21 the capacity to electronically capture trade in22 formation with respect to transactions executed 

23 on the facility. 

24 ‘‘(10) RECORDKEEPING AND REPORTING.— 


sroberts on DSKH9S0YB1PROD with BILLS
818 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—A security-based swap 

2 execution facility shall— 

3 ‘‘(i) maintain records of all activities 

4 relating to the business of the facility, in5 cluding a complete audit trail, in a form 

6 and manner acceptable to the Commission 

7 for a period of 5 years; and 

8 ‘‘(ii) report to the Commission, in a 

9 form and manner acceptable to the Com10 mission, such information as the Commis11 sion determines to be necessary or appro12 priate for the Commission to perform the 

13 duties of the Commission under this title. 

14 ‘‘(B) REQUIREMENTS.—The Commission 

15 shall adopt data collection and reporting re16 quirements for security-based swap execution 

17 facilities that are comparable to corresponding 

18 requirements for clearing agencies and security19 based swap data repositories. 

20 ‘‘(11) ANTITRUST CONSIDERATIONS.—Unless 

21 necessary or appropriate to achieve the purposes of 

22 this title, the security-based swap execution facility 

23 shall not— 


sroberts on DSKH9S0YB1PROD with BILLS
819 

•S 3217 AMDT 3739 

1 ‘‘(A) adopt any rules or taking any actions 

2 that result in any unreasonable restraint of 

3 trade; or 

4 ‘‘(B) impose any material anticompetitive 

5 burden on trading or clearing. 

6 ‘‘(12) CONFLICTS OF INTEREST.—The security7 based swap execution facility shall— 

8 ‘‘(A) establish and enforce rules to mini9 mize conflicts of interest in its decision-making 

10 process; and 

11 ‘‘(B) establish a process for resolving the 

12 conflicts of interest. 

13 ‘‘(13) FINANCIAL RESOURCES.— 

14 ‘‘(A) IN GENERAL.—The security-based 

15 swap execution facility shall have adequate fi16 nancial, operational, and managerial resources 

17 to discharge each responsibility of the security18 based swap execution facility, as determined by 

19 the Commission. 

20 ‘‘(B) DETERMINATION OF RESOURCE ADE21 QUACY.—The financial resources of a security22 based swap execution facility shall be consid23 ered to be adequate if the value of the financial 

24 resources— 


sroberts on DSKH9S0YB1PROD with BILLS
820 

•S 3217 AMDT 3739 

1 ‘‘(i) enables the organization to meet 

2 its financial obligations to its members and 

3 participants notwithstanding a default by 

4 the member or participant creating the 

5 largest financial exposure for that organi6 zation in extreme but plausible market 

7 conditions; and 

8 ‘‘(ii) exceeds the total amount that 

9 would enable the security-based swap exe10 cution facility to cover the operating costs 

11 of the security-based swap execution facil12 ity for a 1-year period, as calculated on a 

13 rolling basis. 

14 ‘‘(14) SYSTEM SAFEGUARDS.—The security15 based swap execution facility shall— 

16 ‘‘(A) establish and maintain a program of 

17 risk analysis and oversight to identify and mini18 mize sources of operational risk, through the 

19 development of appropriate controls and proce20 dures, and automated systems, that— 

21 ‘‘(i) are reliable and secure; and 

22 ‘‘(ii) have adequate scalable capacity; 

23 ‘‘(B) establish and maintain emergency 

24 procedures, backup facilities, and a plan for dis25 aster recovery that are designed to allow for— 


sroberts on DSKH9S0YB1PROD with BILLS
821 

•S 3217 AMDT 3739 

1 ‘‘(i) the timely recovery and resump2 tion of operations; and 

3 ‘‘(ii) the fulfillment of the responsibil4 ities and obligation of the security-based 

5 swap execution facility; and 

6 ‘‘(C) periodically conduct tests to verify 

7 that the backup resources of the security-based 

8 swap execution facility are sufficient to ensure 

9 continued— 

10 ‘‘(i) order processing and trade 

11 matching; 

12 ‘‘(ii) price reporting; 

13 ‘‘(iii) market surveillance; and 

14 ‘‘(iv) maintenance of a comprehensive 

15 and accurate audit trail. 

16 ‘‘(15) DESIGNATION OF CHIEF COMPLIANCE

17 OFFICER.— 

18 ‘‘(A) IN GENERAL.—Each security-based 

19 swap execution facility shall designate an indi20 vidual to serve as a chief compliance officer. 

21 ‘‘(B) DUTIES.—The chief compliance offi22 cer shall— 

23 ‘‘(i) report directly to the board or to 

24 the senior officer of the facility; 


sroberts on DSKH9S0YB1PROD with BILLS
822 

•S 3217 AMDT 3739 

1 ‘‘(ii) review compliance with the core 

2 principles in this subsection; 

3 ‘‘(iii) in consultation with the board of 

4 the facility, a body performing a function 

5 similar to that of a board, or the senior of6 ficer of the facility, resolve any conflicts of 

7 interest that may arise; 

8 ‘‘(iv) be responsible for establishing 

9 and administering the policies and proce10 dures required to be established pursuant 

11 to this section; 

12 ‘‘(v) ensure compliance with this title 

13 and the rules and regulations issued under 

14 this title, including rules prescribed by the 

15 Commission pursuant to this section; 

16 ‘‘(vi) establish procedures for the re17 mediation of noncompliance issues found 

18 during— 

19 ‘‘(I) compliance office reviews; 

20 ‘‘(II) look backs; 

21 ‘‘(III) internal or external audit 

22 findings; 

23 ‘‘(IV) self-reported errors; or 

24 ‘‘(V) through validated com25 plaints; and 


sroberts on DSKH9S0YB1PROD with BILLS
823 

•S 3217 AMDT 3739 

1 ‘‘(vii) establish and follow appropriate 

2 procedures for the handling, management 

3 response, remediation, retesting, and clos4 ing of noncompliance issues. 

5 ‘‘(C) ANNUAL REPORTS.— 

6 ‘‘(i) IN GENERAL.—In accordance 

7 with rules prescribed by the Commission, 

8 the chief compliance officer shall annually 

9 prepare and sign a report that contains a 

10 description of— 

11 ‘‘(I) the compliance of the secu12 rity-based swap execution facility with 

13 this title; and 

14 ‘‘(II) the policies and procedures, 

15 including the code of ethics and con16 flict of interest policies, of the secu17 rity-based security-based swap execu18 tion facility. 

19 ‘‘(ii) REQUIREMENTS.—The chief 

20 compliance officer shall— 

21 ‘‘(I) submit each report described 

22 in clause (i) with the appropriate fi23 nancial report of the security-based 

24 swap execution facility that is reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00823 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
824 

•S 3217 AMDT 3739 

1 quired to be submitted to the Com2 mission pursuant to this section; and 

3 ‘‘(II) include in the report a cer4 tification that, under penalty of law, 

5 the report is accurate and complete. 

6 ‘‘(e) EXEMPTIONS.—The Commission may exempt, 

7 conditionally or unconditionally, a security-based swap 

8 execution facility from registration under this section if 

9 the Commission finds that the facility is subject to com10 parable, comprehensive supervision and regulation on a 

11 consolidated basis by the Commodity Futures Trading 

12 Commission. 

13 ‘‘(f) RULES.—The Commission shall prescribe rules 

14 governing the regulation of security-based swap execution 

15 facilities under this section.’’. 

16 (d) SEGREGATION OF ASSETS HELD AS COLLATERAL

17 IN SECURITY-BASED SWAP TRANSACTIONS.—The Securi18 ties Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 

19 amended by inserting after section 3D (as added by sub20 section (b)) the following: 

21 ‘‘SEC. 3E. SEGREGATION OF ASSETS HELD AS COLLATERAL 

22 IN SECURITY-BASED SWAP TRANSACTIONS. 

23 ‘‘(a) REGISTRATION REQUIREMENT.—It shall be un24 lawful for any person to accept any money, securities, or 

25 property (or to extend any credit in lieu of money, securiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00824 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
825 

•S 3217 AMDT 3739 

1 ties, or property) from, for, or on behalf of a security2 based swaps customer or to margin, guarantee, or secure 

3 a security-based swap cleared by or through a clearing 

4 agency (including money, securities, or property accruing 

5 to the customer as the result of such a security-based 

6 swap), unless the person shall have registered under this 

7 title with the Commission as a broker, dealer, or security8 based swap dealer, and the registration shall not have ex9 pired nor been suspended nor revoked. 

10 ‘‘(b) CLEARED SECURITY-BASED SWAPS.— 

11 ‘‘(1) SEGREGATION REQUIRED.—A broker, 

12 dealer, or security-based swap dealer shall treat and 

13 deal with all money, securities, and property of any 

14 security-based swaps customer received to margin, 

15 guarantee, or secure a security-based swap cleared 

16 by or though a clearing agency (including money, se17 curities, or property accruing to the security-based 

18 swaps customer as the result of such a security19 based swap) as belonging to the security-based 

20 swaps customer. 

21 ‘‘(2) COMMINGLING PROHIBITED.—Money, se22 curities, and property of a security-based swaps cus23 tomer described in paragraph (1) shall be separately 

24 accounted for and shall not be commingled with the 

25 funds of the broker, dealer, or security-based swap 


sroberts on DSKH9S0YB1PROD with BILLS
826 

•S 3217 AMDT 3739 

1 dealer or be used to margin, secure, or guarantee 

2 any trades or contracts of any security-based swaps 

3 customer or person other than the person for whom 

4 the same are held. 

5 ‘‘(c) EXCEPTIONS.— 

6 ‘‘(1) USE OF FUNDS.— 

7 ‘‘(A) IN GENERAL.—Notwithstanding sub8 section (b), money, securities, and property of a 

9 security-based swaps customer of a broker, 

10 dealer, or security-based swap dealer described 

11 in subsection (b) may, for convenience, be com12 mingled and deposited in the same 1 or more 

13 accounts with any bank or trust company or 

14 with a clearing agency. 

15 ‘‘(B) WITHDRAWAL.—Notwithstanding 

16 subsection (b), such share of the money, securi17 ties, and property described in subparagraph 

18 (A) as in the normal course of business shall be 

19 necessary to margin, guarantee, secure, trans20 fer, adjust, or settle a cleared security-based 

21 swap with a clearing agency, or with any mem22 ber of the clearing agency, may be withdrawn 

23 and applied to such purposes, including the 

24 payment of commissions, brokerage, interest, 

25 taxes, storage, and other charges, lawfully acVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00826 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
827 

•S 3217 AMDT 3739 

1 cruing in connection with the cleared security2 based swap. 

3 ‘‘(2) COMMISSION ACTION.—Notwithstanding 

4 subsection (b), in accordance with such terms and 

5 conditions as the Commission may prescribe by rule, 

6 regulation, or order, any money, securities, or prop7 erty of the security-based swaps customer of a 

8 broker, dealer, or security-based swap dealer de9 scribed in subsection (b) may be commingled and de10 posited as provided in this section with any other 

11 money, securities, or property received by the 

12 broker, dealer, or security-based swap dealer and re13 quired by the Commission to be separately ac14 counted for and treated and dealt with as belonging 

15 to the security-based swaps customer of the broker, 

16 dealer, or security-based swap dealer. 

17 ‘‘(d) PERMITTED INVESTMENTS.—Money described 

18 in subsection (b) may be invested in obligations of the 

19 United States, in general obligations of any State or of 

20 any political subdivision of a State, and in obligations fully 

21 guaranteed as to principal and interest by the United 

22 States, or in any other investment that the Commission 

23 may by rule or regulation prescribe, and such investments 

24 shall be made in accordance with such rules and regulaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00827 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
828 

•S 3217 AMDT 3739 

1 tions and subject to such conditions as the Commission 

2 may prescribe. 

3 ‘‘(e) PROHIBITION.—It shall be unlawful for any per4 son, including any clearing agency and any depository in5 stitution, that has received any money, securities, or prop6 erty for deposit in a separate account or accounts as pro7 vided in subsection (b) to hold, dispose of, or use any such 

8 money, securities, or property as belonging to the depos9 iting broker, dealer, or security-based swap dealer or any 

10 person other than the swaps customer of the broker, deal11 er, or security-based swap dealer.’’. 

12 (e) TRADING IN SECURITY-BASED SWAPS.—Section 

13 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) 

14 is amended by adding at the end the following: 

15 ‘‘(l) SECURITY-BASED SWAPS.—It shall be unlawful 

16 for any person to effect a transaction in a security-based 

17 swap with or for a person that is not an eligible contract 

18 participant, unless such transaction is effected on a na19 tional securities exchange registered pursuant to sub20 section (b).’’. 

21 (f) ADDITIONS OF SECURITY-BASED SWAPS TO CER22 TAIN ENFORCEMENT PROVISIONS.—Section 9(b) of the 

23 Securities Exchange Act of 1934 (15 U.S.C. 78i(b)) is 

24 amended by striking paragraphs (1) through (3) and in25 serting the following: 


sroberts on DSKH9S0YB1PROD with BILLS
829 

•S 3217 AMDT 3739 

1 ‘‘(1) any transaction in connection with any se2 curity whereby any party to such transaction ac3 quires— 

4 ‘‘(A) any put, call, straddle, or other op5 tion or privilege of buying the security from or 

6 selling the security to another without being 

7 bound to do so; 

8 ‘‘(B) any security futures product on the 

9 security; or 

10 ‘‘(C) any security-based swap involving the 

11 security or the issuer of the security; 

12 ‘‘(2) any transaction in connection with any se13 curity with relation to which such person has, di14 rectly or indirectly, any interest in any— 

15 ‘‘(A) such put, call, straddle, option, or 

16 privilege; 

17 ‘‘(B) such security futures product; or 

18 ‘‘(C) such security-based swap; or 

19 ‘‘(3) any transaction in any security for the ac20 count of any person who such person has reason to 

21 believe has, and who actually has, directly or indi22 rectly, any interest in any— 

23 ‘‘(A) such put, call, straddle, option, or 

24 privilege; 


sroberts on DSKH9S0YB1PROD with BILLS
830 

•S 3217 AMDT 3739 

1 ‘‘(B) such security futures product with re2 lation to such security; or 

3 ‘‘(C) any security-based swap involving 

4 such security or the issuer of such security.’’. 

5 (g) RULEMAKING AUTHORITY TO PREVENT FRAUD, 

6 MANIPULATION AND DECEPTIVE CONDUCT IN SECURITY7 BASED SWAPS.—Section 9 of the Securities Exchange Act 

8 of 1934 (15 U.S.C. 78i) is amended by adding at the end 

9 the following: 

10 ‘‘(j) It shall be unlawful for any person, directly or 

11 indirectly, by the use of any means or instrumentality of 

12 interstate commerce or of the mails, or of any facility of 

13 any national securities exchange, to effect any transaction 

14 in, or to induce or attempt to induce the purchase or sale 

15 of, any security-based swap, in connection with which such 

16 person engages in any fraudulent, deceptive, or manipula17 tive act or practice, makes any fictitious quotation, or en18 gages in any transaction, practice, or course of business 

19 which operates as a fraud or deceit upon any person. The 

20 Commission shall, for the purposes of this subsection, by 

21 rules and regulations define, and prescribe means reason22 ably designed to prevent, such transactions, acts, prac23 tices, and courses of business as are fraudulent, deceptive, 

24 or manipulative, and such quotations as are fictitious.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
831 

•S 3217 AMDT 3739 

1 (h) POSITION LIMITS AND POSITION ACCOUNT2 ABILITY FOR SECURITY-BASED SWAPS.—The Securities 

3 Exchange Act of 1934 is amended by inserting after sec4 tion 10A (15 U.S.C. 78j–1) the following: 

5 ‘‘SEC. 10B. POSITION LIMITS AND POSITION ACCOUNT6 ABILITY FOR SECURITY-BASED SWAPS AND 

7 LARGE TRADER REPORTING. 

8 ‘‘(a) POSITION LIMITS.—As a means reasonably de9 signed to prevent fraud and manipulation, the Commission 

10 shall, by rule or regulation, as necessary or appropriate 

11 in the public interest or for the protection of investors, 

12 establish limits (including related hedge exemption provi13 sions) on the size of positions in any security-based swap 

14 that may be held by any person. In establishing such lim15 its, the Commission may require any person to aggregate 

16 positions in— 

17 ‘‘(1) any security-based swap and any security 

18 or loan or group of securities or loans on which such 

19 security-based swap is based, which such security20 based swap references, or to which such security21 based swap is related as described in paragraph (68) 

22 of section 3(a), and any other instrument relating to 

23 such security or loan or group or index of securities 

24 or loans; or 

25 ‘‘(2) any security-based swap and— 


sroberts on DSKH9S0YB1PROD with BILLS
832 

•S 3217 AMDT 3739 

1 ‘‘(A) any security or group or index of se2 curities, the price, yield, value, or volatility of 

3 which, or of which any interest therein, is the 

4 basis for a material term of such security-based 

5 swap as described in paragraph (68) of section 

6 3(a); and 

7 ‘‘(B) any other instrument relating to the 

8 same security or group or index of securities de9 scribed under subparagraph (A). 

10 ‘‘(b) EXEMPTIONS.—The Commission, by rule, regu11 lation, or order, may conditionally or unconditionally ex12 empt any person or class of persons, any security-based 

13 swap or class of security-based swaps, or any transaction 

14 or class of transactions from any requirement the Com15 mission may establish under this section with respect to 

16 position limits. 

17 ‘‘(c) SRO RULES.— 

18 ‘‘(1) IN GENERAL.—As a means reasonably de19 signed to prevent fraud or manipulation, the Com20 mission, by rule, regulation, or order, as necessary 

21 or appropriate in the public interest, for the protec22 tion of investors, or otherwise in furtherance of the 

23 purposes of this title, may direct a self-regulatory 

24 organization— 


sroberts on DSKH9S0YB1PROD with BILLS
833 

•S 3217 AMDT 3739 

1 ‘‘(A) to adopt rules regarding the size of 

2 positions in any security-based swap that may 

3 be held by— 

4 ‘‘(i) any member of such self-regu5 latory organization; or 

6 ‘‘(ii) any person for whom a member 

7 of such self-regulatory organization effects 

8 transactions in such security-based swap; 

9 and 

10 ‘‘(B) to adopt rules reasonably designed to 

11 ensure compliance with requirements prescribed 

12 by the Commission under this subsection. 

13 ‘‘(2) REQUIREMENT TO AGGREGATE POSI14 TIONS.—In establishing the limits under paragraph 

15 (1), the self-regulatory organization may require 

16 such member or person to aggregate positions in— 

17 ‘‘(A) any security-based swap and any se18 curity or loan or group or narrow-based secu19 rity narrow-based security index of securities or 

20 loans on which such security-based swap is 

21 based, which such security-based swap ref22 erences, or to which such security-based swap is 

23 related as described in section 3(a)(68), and 

24 any other instrument relating to such security 


sroberts on DSKH9S0YB1PROD with BILLS
834 

•S 3217 AMDT 3739 

1 or loan or group or narrow-based security index 

2 of securities or loans; or 

3 ‘‘(B)(i) any security-based swap; and 

4 ‘‘(ii) any security-based swap and any 

5 other instrument relating to the same security 

6 or group or narrow-based security index of se7 curities. 

8 ‘‘(d) LARGE TRADER REPORTING.—The Commis9 sion, by rule or regulation, may require any person that 

10 effects transactions for such person’s own account or the 

11 account of others in any securities-based swap or 

12 uncleared security-based swap and any security or loan or 

13 group or narrow-based security index of securities or loans 

14 as set forth in paragraphs (1) and (2) of subsection (a) 

15 under this section to report such information as the Com16 mission may prescribe regarding any position or positions 

17 in any security-based swap or uncleared security-based 

18 swap and any security or loan or group or narrow-based 

19 security index of securities or loans and any other instru20 ment relating to such security or loan or group or narrow21 based security index of securities or loans as set forth in 

22 paragraphs (1) and (2) of subsection (a) under this sec23 tion.’’. 

24 (i) PUBLIC REPORTING AND REPOSITORIES FOR SE25 CURITY-BASED SWAPS.—Section 13 of the Securities ExVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00834 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
835 

•S 3217 AMDT 3739 

1 change Act of 1934 (15 U.S.C. 78m) is amended by add2 ing at the end the following: 

3 ‘‘(m) PUBLIC AVAILABILITY OF SECURITY-BASED

4 SWAP TRANSACTION DATA.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) DEFINITION OF REAL-TIME PUBLIC

7 REPORTING.—In this paragraph, the term ‘real8 time public reporting’ means to report data re9 lating to a security-based swap transaction as 

10 soon as technologically practicable after the 

11 time at which the security-based swap trans12 action has been executed. 

13 ‘‘(B) PURPOSE.—The purpose of this sec14 tion is to authorize the Commission to make se15 curity-based swap transaction and pricing data 

16 available to the public in such form and at such 

17 times as the Commission determines appro18 priate to enhance price discovery. 

19 ‘‘(C) GENERAL RULE.—The Commission is 

20 authorized to provide by rule for the public 

21 availability of security-based swap transaction 

22 and pricing data as follows: 

23 ‘‘(i) With respect to those security24 based swaps that are subject to the man25 datory clearing requirement described in 


sroberts on DSKH9S0YB1PROD with BILLS
836 

•S 3217 AMDT 3739 

1 section 3C(a)(1) (including those security2 based swaps that are exempted from the 

3 requirement pursuant to section 

4 3C(a)(10)), the Commission shall require 

5 real-time public reporting for such trans6 actions. 

7 ‘‘(ii) With respect to those security8 based swaps that are not subject to the 

9 mandatory clearing requirement described 

10 in subsection section 3C(a)(1), but are 

11 cleared at a registered clearing agency, the 

12 Commission shall require real-time public 

13 reporting for such transactions. 

14 ‘‘(iii) With respect to security-based 

15 swaps that are not cleared at a registered 

16 clearing agency and which are reported to 

17 a security-based swap data repository or 

18 the Commission under section 3C(a), the 

19 Commission shall make available to the 

20 public, in a manner that does not disclose 

21 the business transactions and market posi22 tions of any person, aggregate data on 

23 such security-based swap trading volumes 

24 and positions. 


sroberts on DSKH9S0YB1PROD with BILLS
837 

•S 3217 AMDT 3739 

1 ‘‘(iv) With respect to security-based 

2 swaps that are exempt from the require3 ments of section 3C(a)(1), but are subject 

4 to the requirements of section 3C(a)(8), 

5 the Commission shall require real-time 

6 public reporting for such transactions. 

7 ‘‘(D) REGISTERED ENTITIES AND PUBLIC

8 REPORTING.—The Commission may require 

9 registered entities to publicly disseminate the 

10 security-based swap transaction and pricing 

11 data required to be reported under this para12 graph. 

13 ‘‘(E) RULEMAKING REQUIRED.—With re14 spect to the rule providing for the public avail15 ability of transaction and pricing data for secu16 rity-based swaps described in clauses (i) and (ii) 

17 of subparagraph (C), the rule promulgated by 

18 the Commission shall contain provisions— 

19 ‘‘(i) to ensure such information does 

20 not identify the participants; 

21 ‘‘(ii) to specify the criteria for deter22 mining what constitutes a large notional 

23 security-based swap transaction (block 

24 trade) for particular markets and con25 tracts; 


sroberts on DSKH9S0YB1PROD with BILLS
838 

•S 3217 AMDT 3739 

1 ‘‘(iii) to specify the appropriate time 

2 delay for reporting large notional security3 based swap transactions (block trades) to 

4 the public; and 

5 ‘‘(iv) that take into account whether 

6 the public disclosure will materially reduce 

7 market liquidity. 

8 ‘‘(F) TIMELINESS OF REPORTING.—Par9 ties to a security-based swap (including agents 

10 of the parties to a security-based swap) shall be 

11 responsible for reporting security-based swap 

12 transaction information to the appropriate reg13 istered entity in a timely manner as may be 

14 prescribed by the Commission. 

15 ‘‘(2) SEMIANNUAL AND ANNUAL PUBLIC RE16 PORTING OF AGGREGATE SECURITY-BASED SWAP

17 DATA.— 

18 ‘‘(A) IN GENERAL.—In accordance with 

19 subparagraph (B), the Commission shall issue a 

20 written report on a semiannual and annual 

21 basis to make available to the public informa22 tion relating to— 

23 ‘‘(i) the trading and clearing in the 

24 major security-based swap categories; and 


sroberts on DSKH9S0YB1PROD with BILLS
839 

•S 3217 AMDT 3739 

1 ‘‘(ii) the market participants and de2 velopments in new products. 

3 ‘‘(B) USE; CONSULTATION.—In preparing 

4 a report under subparagraph (A), the Commis5 sion shall— 

6 ‘‘(i) use information from security7 based swap data repositories and deriva8 tives clearing organizations; and 

9 ‘‘(ii) consult with the Office of the 

10 Comptroller of the Currency, the Bank for 

11 International Settlements, and such other 

12 regulatory bodies as may be necessary. 

13 ‘‘(n) SECURITY-BASED SWAP DATA REPOSITORIES.— 

14 ‘‘(1) REGISTRATION REQUIREMENT.—It shall 

15 be unlawful for any person, unless registered with 

16 the Commission, directly or indirectly, to make use 

17 of the mails or any means or instrumentality of 

18 interstate commerce to perform the functions of a 

19 security-based swap data repository. 

20 ‘‘(2) INSPECTION AND EXAMINATION.—Each 

21 registered security-based swap data repository shall 

22 be subject to inspection and examination by any rep23 resentative of the Commission. 

24 ‘‘(3) COMPLIANCE WITH CORE PRINCIPLES.— 


sroberts on DSKH9S0YB1PROD with BILLS
840 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—To be registered, and 

2 maintain registration, as a security-based swap 

3 data repository, the security-based swap data 

4 repository shall comply with— 

5 ‘‘(i) the core principles described in 

6 this subsection; and 

7 ‘‘(ii) any requirement that the Com8 mission may impose by rule or regulation. 

9 ‘‘(B) REASONABLE DISCRETION OF SECU10 RITY-BASED SWAP DATA REPOSITORY.—Unless 

11 otherwise determined by the Commission, by 

12 rule or regulation, a security-based swap data 

13 repository described in subparagraph (A) shall 

14 have reasonable discretion in establishing the 

15 manner in which the security-based swap data 

16 repository complies with the core principles de17 scribed in this subsection. 

18 ‘‘(4) STANDARD SETTING.— 

19 ‘‘(A) DATA IDENTIFICATION.—The Com20 mission shall prescribe standards that specify 

21 the data elements for each security-based swap 

22 that shall be collected and maintained by each 

23 registered security-based swap data repository. 

24 ‘‘(B) DATA COLLECTION AND MAINTE25 NANCE.—The Commission shall prescribe data 


sroberts on DSKH9S0YB1PROD with BILLS
841 

•S 3217 AMDT 3739 

1 collection and data maintenance standards for 

2 security-based swap data repositories. 

3 ‘‘(C) COMPARABILITY.—The standards 

4 prescribed by the Commission under this sub5 section shall be comparable to the data stand6 ards imposed by the Commission on clearing 

7 agencies in connection with their clearing of se8 curity-based swaps. 

9 ‘‘(5) DUTIES.—A security-based swap data re10 pository shall— 

11 ‘‘(A) accept data prescribed by the Com12 mission for each security-based swap under sub13 section (b); 

14 ‘‘(B) confirm with both counterparties to 

15 the security-based swap the accuracy of the 

16 data that was submitted; 

17 ‘‘(C) maintain the data described in sub18 paragraph (A) in such form, in such manner, 

19 and for such period as may be required by the 

20 Commission; 

21 ‘‘(D)(i) provide direct electronic access to 

22 the Commission (or any designee of the Com23 mission, including another registered entity); 

24 and 


sroberts on DSKH9S0YB1PROD with BILLS
842 

•S 3217 AMDT 3739 

1 ‘‘(ii) provide the information described in 

2 subparagraph (A) in such form and at such fre3 quency as the Commission may require to com4 ply with the public reporting requirements set 

5 forth in subsection (m); 

6 ‘‘(E) at the direction of the Commission, 

7 establish automated systems for monitoring, 

8 screening, and analyzing security-based swap 

9 data; 

10 ‘‘(F) maintain the privacy of any and all 

11 security-based swap transaction information 

12 that the security-based swap data repository re13 ceives from a security-based swap dealer, 

14 counterparty, or any other registered entity; 

15 and 

16 ‘‘(G) on a confidential basis pursuant to 

17 section 24, upon request, and after notifying 

18 the Commission of the request, make available 

19 all data obtained by the security-based swap 

20 data repository, including individual 

21 counterparty trade and position data, to— 

22 ‘‘(i) each appropriate prudential regu23 lator; 

24 ‘‘(ii) the Financial Stability Oversight 

25 Council; 


sroberts on DSKH9S0YB1PROD with BILLS
843 

•S 3217 AMDT 3739 

1 ‘‘(iii) the Commodity Futures Trading 

2 Commission; 

3 ‘‘(iv) the Department of Justice; and 

4 ‘‘(v) any other person that the Com5 mission determines to be appropriate, in6 cluding— 

7 ‘‘(I) foreign financial supervisors 

8 (including foreign futures authorities); 

9 ‘‘(II) foreign central banks; and 

10 ‘‘(III) foreign ministries. 

11 ‘‘(H) CONFIDENTIALITY AND INDEM12 NIFICATION AGREEMENT.—Before the security13 based swap data repository may share informa14 tion with any entity described in subparagraph 

15 (G)— 

16 ‘‘(i) the security-based swap data re17 pository shall receive a written agreement 

18 from each entity stating that the entity 

19 shall abide by the confidentiality require20 ments described in section 24 relating to 

21 the information on security-based swap 

22 transactions that is provided; and 

23 ‘‘(ii) each entity shall agree to indem24 nify the security-based swap data reposi25 tory and the Commission for any expenses 


sroberts on DSKH9S0YB1PROD with BILLS
844 

•S 3217 AMDT 3739 

1 arising from litigation relating to the infor2 mation provided under section 24. 

3 ‘‘(6) DESIGNATION OF CHIEF COMPLIANCE OF4 FICER.— 

5 ‘‘(A) IN GENERAL.—Each security-based 

6 swap data repository shall designate an indi7 vidual to serve as a chief compliance officer. 

8 ‘‘(B) DUTIES.—The chief compliance offi9 cer shall— 

10 ‘‘(i) report directly to the board or to 

11 the senior officer of the security-based 

12 swap data repository; 

13 ‘‘(ii) review the compliance of the se14 curity-based swap data repository with re15 spect to the core principles described in 

16 paragraph (7); 

17 ‘‘(iii) in consultation with the board of 

18 the security-based swap data repository, a 

19 body performing a function similar to the 

20 board of the security-based swap data re21 pository, or the senior officer of the secu22 rity-based swap data repository, resolve 

23 any conflicts of interest that may arise; 


sroberts on DSKH9S0YB1PROD with BILLS
845 

•S 3217 AMDT 3739 

1 ‘‘(iv) be responsible for administering 

2 each policy and procedure that is required 

3 to be established pursuant to this section; 

4 ‘‘(v) ensure compliance with this title 

5 (including regulations) relating to agree6 ments, contracts, or transactions, including 

7 each rule prescribed by the Commission 

8 under this section; 

9 ‘‘(vi) establish procedures for the re10 mediation of noncompliance issues identi11 fied by the chief compliance officer through 

12 any— 

13 ‘‘(I) compliance office review; 

14 ‘‘(II) look-back; 

15 ‘‘(III) internal or external audit 

16 finding; 

17 ‘‘(IV) self-reported error; or 

18 ‘‘(V) validated complaint; and 

19 ‘‘(vii) establish and follow appropriate 

20 procedures for the handling, management 

21 response, remediation, retesting, and clos22 ing of noncompliance issues. 

23 ‘‘(C) ANNUAL REPORTS.— 

24 ‘‘(i) IN GENERAL.—In accordance 

25 with rules prescribed by the Commission, 


sroberts on DSKH9S0YB1PROD with BILLS
846 

•S 3217 AMDT 3739 

1 the chief compliance officer shall annually 

2 prepare and sign a report that contains a 

3 description of— 

4 ‘‘(I) the compliance of the secu5 rity-based swap data repository of the 

6 chief compliance officer with respect 

7 to this title (including regulations); 

8 and 

9 ‘‘(II) each policy and procedure 

10 of the security-based swap data repos11 itory of the chief compliance officer 

12 (including the code of ethics and con13 flict of interest policies of the secu14 rity-based swap data repository). 

15 ‘‘(ii) REQUIREMENTS.—A compliance 

16 report under clause (i) shall— 

17 ‘‘(I) accompany each appropriate 

18 financial report of the security-based 

19 swap data repository that is required 

20 to be furnished to the Commission 

21 pursuant to this section; and 

22 ‘‘(II) include a certification that, 

23 under penalty of law, the compliance 

24 report is accurate and complete. 


sroberts on DSKH9S0YB1PROD with BILLS
847 

•S 3217 AMDT 3739 

1 ‘‘(7) CORE PRINCIPLES APPLICABLE TO SECU2 RITY-BASED SWAP DATA REPOSITORIES.— 

3 ‘‘(A) ANTITRUST CONSIDERATIONS.—Un4 less necessary or appropriate to achieve the 

5 purposes of this title, the swap data repository 

6 shall not— 

7 ‘‘(i) adopt any rule or take any action 

8 that results in any unreasonable restraint 

9 of trade; or 

10 ‘‘(ii) impose any material anticompeti11 tive burden on the trading, clearing, or re12 porting of transactions. 

13 ‘‘(B) GOVERNANCE ARRANGEMENTS.— 

14 Each security-based swap data repository shall 

15 establish governance arrangements that are 

16 transparent— 

17 ‘‘(i) to fulfill public interest require18 ments; and 

19 ‘‘(ii) to support the objectives of the 

20 Federal Government, owners, and partici21 pants. 

22 ‘‘(C) CONFLICTS OF INTEREST.—Each se23 curity-based swap data repository shall— 

24 ‘‘(i) establish and enforce rules to 

25 minimize conflicts of interest in the deciVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00847 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
848 

•S 3217 AMDT 3739 

1 sion-making process of the security-based 

2 swap data repository; and 

3 ‘‘(ii) establish a process for resolving 

4 any conflicts of interest described in clause 

5 (i). 

6 ‘‘(8) REQUIRED REGISTRATION FOR SECURITY7 BASED SWAP DATA REPOSITORIES.—Any person that 

8 is required to be registered as a security-based swap 

9 data repository under this subsection shall register 

10 with the Commission, regardless of whether that 

11 person is also licensed under the Commodity Ex12 change Act as a swap data repository. 

13 ‘‘(9) RULES.—The Commission shall adopt 

14 rules governing persons that are registered under 

15 this subsection.’’. 

16 SEC. 764. REGISTRATION AND REGULATION OF SECURITY17 BASED SWAP DEALERS AND MAJOR SECU18 RITY-BASED SWAP PARTICIPANTS. 

19 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

20 et seq.) is amended by inserting after section 15E (15 

21 U.S.C. 78o–7) the following: 

22 ‘‘SEC. 15F. REGISTRATION AND REGULATION OF SECURITY23 BASED SWAP DEALERS AND MAJOR SECU24 RITY-BASED SWAP PARTICIPANTS. 

25 ‘‘(a) REGISTRATION.— 


sroberts on DSKH9S0YB1PROD with BILLS
849 

•S 3217 AMDT 3739 

1 ‘‘(1) SECURITY-BASED SWAP DEALERS.—It 

2 shall be unlawful for any person to act as a security3 based swap dealer unless the person is registered as 

4 a security-based swap dealer with the Commission. 

5 ‘‘(2) MAJOR SECURITY-BASED SWAP PARTICI6 PANTS.—It shall be unlawful for any person to act 

7 as a major security-based swap participant unless 

8 the person is registered as a major security-based 

9 swap participant with the Commission. 

10 ‘‘(b) REQUIREMENTS.— 

11 ‘‘(1) IN GENERAL.—A person shall register as 

12 a security-based swap dealer or major security-based 

13 swap participant by filing a registration application 

14 with the Commission. 

15 ‘‘(2) CONTENTS.— 

16 ‘‘(A) IN GENERAL.—The application shall 

17 be made in such form and manner as prescribed 

18 by the Commission, and shall contain such in19 formation, as the Commission considers nec20 essary concerning the business in which the ap21 plicant is or will be engaged. 

22 ‘‘(B) CONTINUAL REPORTING.—A person 

23 that is registered as a security-based swap deal24 er or major security-based swap participant 

25 shall continue to submit to the Commission reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00849 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
850 

•S 3217 AMDT 3739 

1 ports that contain such information pertaining 

2 to the business of the person as the Commission 

3 may require. 

4 ‘‘(3) EXPIRATION.—Each registration under 

5 this section shall expire at such time as the Commis6 sion may prescribe by rule or regulation. 

7 ‘‘(4) RULES.—Except as provided in sub8 sections (c), (e), and (f), the Commission may pre9 scribe rules applicable to security-based swap dealers 

10 and major security-based swap participants, includ11 ing rules that limit the activities of non-bank secu12 rity-based swap dealers and non-bank major secu13 rity-based swap participants. 

14 ‘‘(5) TRANSITION.—Not later than 1 year after 

15 the date of enactment of the Wall Street Trans16 parency and Accountability Act of 2010, the Com17 mission shall issue rules under this section to pro18 vide for the registration of security-based swap deal19 ers and major security-based swap participants. 

20 ‘‘(6) STATUTORY DISQUALIFICATION.—Except 

21 to the extent otherwise specifically provided by rule, 

22 regulation, or order of the Commission, it shall be 

23 unlawful for a security-based swap dealer or a major 

24 security-based swap participant to permit any person 

25 associated with a security-based swap dealer or a 


sroberts on DSKH9S0YB1PROD with BILLS
851 

•S 3217 AMDT 3739 

1 major security-based swap participant who is subject 

2 to a statutory disqualification to effect or be involved 

3 in effecting security-based swaps on behalf of the se4 curity-based swap dealer or major security-based 

5 swap participant, if the security-based swap dealer 

6 or major security-based swap participant knew, or in 

7 the exercise of reasonable care should have known, 

8 of the statutory disqualification. 

9 ‘‘(c) DUAL REGISTRATION.— 

10 ‘‘(1) SECURITY-BASED SWAP DEALER.—Any 

11 person that is required to be registered as a secu12 rity-based swap dealer under this section shall reg13 ister with the Commission, regardless of whether the 

14 person also is registered with the Commodity Fu15 tures Trading Commission as a swap dealer. 

16 ‘‘(2) MAJOR SECURITY-BASED SWAP PARTICI17 PANT.—Any person that is required to be registered 

18 as a major security-based swap participant under 

19 this section shall register with the Commission, re20 gardless of whether the person also is registered 

21 with the Commodity Futures Trading Commission 

22 as a major swap participant. 

23 ‘‘(d) RULEMAKING.— 

24 ‘‘(1) IN GENERAL.—The Commission shall 

25 adopt rules for persons that are registered as secuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00851 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
852 

•S 3217 AMDT 3739 

1 rity-based swap dealers or major security-based swap 

2 participants under this section. 

3 ‘‘(2) EXCEPTION FOR PRUDENTIAL REQUIRE4 MENTS.— 

5 ‘‘(A) IN GENERAL.—The Commission may 

6 not prescribe rules imposing prudential require7 ments on security-based swap dealers or major 

8 security-based swap participants that are depos9 itory institutions, as that term is defined in sec10 tion 3 of the Federal Deposit Insurance Act (12 

11 U.S.C. 1813). 

12 ‘‘(B) APPLICABILITY.—Subparagraph (A) 

13 does not limit the authority of the Commission 

14 to prescribe appropriate business conduct, re15 porting, and recordkeeping requirements on se16 curity-based swap dealers or major security17 based swap participants that are depository in18 stitutions to protect investors. 

19 ‘‘(e) CAPITAL AND MARGIN REQUIREMENTS.— 

20 ‘‘(1) IN GENERAL.— 

21 ‘‘(A) SECURITY-BASED SWAP DEALERS

22 AND MAJOR SECURITY-BASED SWAP PARTICI23 PANTS THAT ARE DEPOSITORY INSTITU24 TIONS.—Each registered security-based swap 

25 dealer and major security-based swap particiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00852 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
853 

•S 3217 AMDT 3739 

1 pant that is a depository institution, as that 

2 term is defined in section 3 of the Federal De3 posit Insurance Act (12 U.S.C. 1813), shall 

4 meet such minimum capital requirements and 

5 minimum initial and variation margin require6 ments as the appropriate Federal banking agen7 cy shall by rule or regulation prescribe under 

8 paragraph (2)(A) to help ensure the safety and 

9 soundness of the security-based swap dealer or 

10 major security-based swap participant. 

11 ‘‘(B) SECURITY-BASED SWAP DEALERS

12 AND MAJOR SECURITY-BASED SWAP PARTICI13 PANTS THAT ARE NOT DEPOSITORY INSTITU14 TIONS.—Each registered security-based swap 

15 dealer and major security-based swap partici16 pant that is not a depository institution, as that 

17 term is defined in section 3 of the Federal De18 posit Insurance Act (12 U.S.C. 1813), shall 

19 meet such minimum capital requirements and 

20 minimum initial and variation margin require21 ments as the Commission shall by rule or regu22 lation prescribe under paragraph (2)(B) to help 

23 ensure the safety and soundness of the security24 based swap dealer or major security-based swap 

25 participant. 


sroberts on DSKH9S0YB1PROD with BILLS
854 

•S 3217 AMDT 3739 

1 ‘‘(2) RULES.— 

2 ‘‘(A) SECURITY-BASED SWAP DEALERS

3 AND MAJOR SECURITY-BASED SWAP PARTICI4 PANTS THAT ARE DEPOSITORY INSTITU5 TIONS.—The appropriate Federal banking 

6 agencies, in consultation with the Commission 

7 and the Commodity Futures Trading Commis8 sion, shall adopt rules imposing capital and 

9 margin requirements under this subsection for 

10 security-based swap dealers and major security11 based swap participants that are depository in12 stitutions, as that term is defined in section 3 

13 of the Federal Deposit Insurance Act (12 

14 U.S.C. 1813). 

15 ‘‘(B) SECURITY-BASED SWAP DEALERS

16 AND MAJOR SECURITY-BASED SWAP PARTICI17 PANTS THAT ARE NOT DEPOSITORY INSTITU18 TIONS.—The Commission shall adopt rules im19 posing capital and margin requirements under 

20 this subsection for security-based swap dealers 

21 and major security-based swap participants that 

22 are not depository institutions, as that term is 

23 defined in section 3 of the Federal Deposit In24 surance Act (12 U.S.C. 1813). 

25 ‘‘(3) CAPITAL.— 


sroberts on DSKH9S0YB1PROD with BILLS
855 

•S 3217 AMDT 3739 

1 ‘‘(A) SECURITY-BASED SWAP DEALERS

2 AND MAJOR SECURITY-BASED SWAP PARTICI3 PANTS THAT ARE DEPOSITORY INSTITU4 TIONS.—The capital requirements prescribed 

5 under paragraph (2)(A) for security-based swap 

6 dealers and major security-based swap partici7 pants that are depository institutions shall con8 tain— 

9 ‘‘(i) a capital requirement that is 

10 greater than zero for security-based swaps 

11 that are cleared by a clearing agency; and 

12 ‘‘(ii) to offset the greater risk to the 

13 security-based swap dealer or major secu14 rity-based swap participant and to the fi15 nancial system arising from the use of se16 curity-based swaps that are not cleared, 

17 substantially higher capital requirements 

18 for security-based swaps that are not 

19 cleared by a clearing agency than for secu20 rity-based swaps that are cleared. 

21 ‘‘(B) SECURITY-BASED SWAP DEALERS

22 AND MAJOR SECURITY-BASED SWAP PARTICI23 PANTS THAT ARE NOT DEPOSITORY INSTITU24 TIONS.—The capital requirements prescribed 

25 under paragraph (2)(B) for security-based swap 


sroberts on DSKH9S0YB1PROD with BILLS
856 

•S 3217 AMDT 3739 

1 dealers and major security-based swap partici2 pants that are not depository institutions shall 

3 be as strict as or stricter than the capital re4 quirements prescribed for security-based swap 

5 dealers and major security-based swap partici6 pants that are depository institutions under 

7 paragraph (2)(A). 

8 ‘‘(C) RULE OF CONSTRUCTION.— 

9 ‘‘(i) IN GENERAL.—Nothing in this 

10 section shall limit, or be construed to limit, 

11 the authority— 

12 ‘‘(I) of the Commission to set fi13 nancial responsibility rules for a 

14 broker or dealer registered pursuant 

15 to section 15(b) (except for section 

16 15(b)(11) thereof) in accordance with 

17 section 15(c)(3); or 

18 ‘‘(II) of the Commodity Futures 

19 Trading Commission to set financial 

20 responsibility rules for a futures com21 mission merchant or introducing 

22 broker registered pursuant to section 

23 4f(a) of the Commodity Exchange Act 

24 (except for section 4f(a)(3) thereof) in 


sroberts on DSKH9S0YB1PROD with BILLS
857 

•S 3217 AMDT 3739 

1 accordance with section 4f(b) of the 

2 Commodity Exchange Act. 

3 ‘‘(ii) FUTURES COMMISSION MER4 CHANTS AND OTHER DEALERS.—A futures 

5 commission merchant, introducing broker, 

6 broker, or dealer shall maintain sufficient 

7 capital to comply with the stricter of any 

8 applicable capital requirements to which 

9 such futures commission merchant, intro10 ducing broker, broker, or dealer is subject 

11 to under this title or the Commodity Ex12 change Act. 

13 ‘‘(4) MARGIN.— 

14 ‘‘(A) SECURITY-BASED SWAP DEALERS

15 AND MAJOR SECURITY-BASED SWAP PARTICI16 PANTS THAT ARE DEPOSITORY INSTITU17 TIONS.—The appropriate Federal banking 

18 agency for security-based swap dealers and 

19 major security-based swap participants that are 

20 depository institutions shall impose both initial 

21 and variation margin requirements in accord22 ance with paragraph (2)(A) on all security23 based swaps that are not cleared by a clearing 

24 agency. 


sroberts on DSKH9S0YB1PROD with BILLS
858 

•S 3217 AMDT 3739 

1 ‘‘(B) SECURITY-BASED SWAP DEALERS

2 AND MAJOR SECURITY-BASED SWAP PARTICI3 PANTS THAT ARE NOT DEPOSITORY INSTITU4 TIONS.—The Commission shall impose both ini5 tial and variation margin requirements in ac6 cordance with paragraph (2)(B) for security7 based swap dealers and major security-based 

8 swap participants that are not depository insti9 tutions on all security-based swaps that are not 

10 cleared by a clearing agency. Any such initial 

11 and variation margin requirements shall be as 

12 strict as or stricter than the margin require13 ments prescribed under paragraph (4)(A). 

14 ‘‘(5) MARGIN REQUIREMENTS.—In prescribing 

15 margin requirements under this subsection, the ap16 propriate Federal banking agency with respect to se17 curity-based swap dealers and major security-based 

18 swap participants that are depository institutions, 

19 and the Commission with respect to security-based 

20 swap dealers and major security-based swap partici21 pants that are not depository institutions may per22 mit the use of noncash collateral, as the agency or 

23 the Commission determines to be consistent with— 

24 ‘‘(A) preserving the financial integrity of 

25 markets trading security-based swaps; and 


sroberts on DSKH9S0YB1PROD with BILLS
859 

•S 3217 AMDT 3739 

1 ‘‘(B) preserving the stability of the United 

2 States financial system. 

3 ‘‘(6) COMPARABILITY OF CAPITAL AND MARGIN

4 REQUIREMENTS.— 

5 ‘‘(A) IN GENERAL.—The appropriate Fed6 eral banking agencies, the Commission, and the 

7 Securities and Exchange Commission shall peri8 odically (but not less frequently than annually) 

9 consult on minimum capital requirements and 

10 minimum initial and variation margin require11 ments. 

12 ‘‘(B) COMPARABILITY.—The entities de13 scribed in subparagraph (A) shall, to the max14 imum extent practicable, establish and maintain 

15 comparable minimum capital requirements and 

16 minimum initial and variation margin require17 ments, including the use of noncash collateral, 

18 for— 

19 ‘‘(i) security-based swap dealers; and 

20 ‘‘(ii) major security-based swap par21 ticipants. 

22 ‘‘(7) REQUESTED MARGIN.—If any party to a 

23 security-based swap that is exempt from the margin 

24 requirements of paragraph (4)(A) or paragraph 


sroberts on DSKH9S0YB1PROD with BILLS
860 

•S 3217 AMDT 3739 

1 (4)(B) requests that such security-based swap be 

2 margined, then— 

3 ‘‘(A) the exemption shall not apply; and 

4 ‘‘(B) the counterparty to such security5 based swap shall provide the requested margin. 

6 ‘‘(8) APPLICABILITY WITH RESPECT TO

7 COUNTERPARTIES.—Paragraphs (4) and (5) shall 

8 not apply to initial and variation margin for secu9 rity-based swaps in which 1 of the counterparties is 

10 not— 

11 ‘‘(A) a security-based swap dealer; 

12 ‘‘(B) a major security-based swap partici13 pant; or 

14 ‘‘(C) a financial entity as described in sec15 tion 3C(a)(10)(A)(ii), and such counterparty is 

16 eligible for and utilizing the commercial end 

17 user clearing exemption under section 

18 3C(a)(10). 

19 ‘‘(f) REPORTING AND RECORDKEEPING.— 

20 ‘‘(1) IN GENERAL.—Each registered security21 based swap dealer and major security-based swap 

22 participant— 

23 ‘‘(A) shall make such reports as are re24 quired by the Commission, by rule or regula25 tion, regarding the transactions and positions 


sroberts on DSKH9S0YB1PROD with BILLS
861 

•S 3217 AMDT 3739 

1 and financial condition of the registered secu2 rity-based swap dealer or major security-based 

3 swap participant; 

4 ‘‘(B)(i) for which there is a prudential reg5 ulator, shall keep books and records of all ac6 tivities related to the business as a security7 based swap dealer or major security-based swap 

8 participant in such form and manner and for 

9 such period as may be prescribed by the Com10 mission by rule or regulation; and 

11 ‘‘(ii) for which there is no prudential regu12 lator, shall keep books and records in such form 

13 and manner and for such period as may be pre14 scribed by the Commission by rule or regula15 tion; and 

16 ‘‘(C) shall keep books and records de17 scribed in subparagraph (B) open to inspection 

18 and examination by any representative of the 

19 Commission. 

20 ‘‘(2) RULES.—The Commission shall adopt 

21 rules governing reporting and recordkeeping for se22 curity-based swap dealers and major security-based 

23 swap participants. 

24 ‘‘(g) DAILY TRADING RECORDS.— 


sroberts on DSKH9S0YB1PROD with BILLS
862 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—Each registered security2 based swap dealer and major security-based swap 

3 participant shall maintain daily trading records of 

4 the security-based swaps of the registered security5 based swap dealer and major security-based swap 

6 participant and all related records (including related 

7 cash or forward transactions) and recorded commu8 nications, including electronic mail, instant mes9 sages, and recordings of telephone calls, for such pe10 riod as may be required by the Commission by rule 

11 or regulation. 

12 ‘‘(2) INFORMATION REQUIREMENTS.—The daily 

13 trading records shall include such information as the 

14 Commission shall require by rule or regulation. 

15 ‘‘(3) CUSTOMER RECORDS.—Each registered se16 curity-based swap dealer and major security-based 

17 swap participant shall maintain daily trading records 

18 for each customer or counterparty in a manner and 

19 form that is identifiable with each security-based 

20 swap transaction. 

21 ‘‘(4) AUDIT TRAIL.—Each registered security22 based swap dealer and major security-based swap 

23 participant shall maintain a complete audit trail for 

24 conducting comprehensive and accurate trade recon25 structions. 


sroberts on DSKH9S0YB1PROD with BILLS
863 

•S 3217 AMDT 3739 

1 ‘‘(5) RULES.—The Commission shall adopt 

2 rules governing daily trading records for security3 based swap dealers and major security-based swap 

4 participants. 

5 ‘‘(h) BUSINESS CONDUCT STANDARDS.— 

6 ‘‘(1) IN GENERAL.—Each registered security7 based swap dealer and major security-based swap 

8 participant shall conform with such business conduct 

9 standards as may be prescribed by the Commission, 

10 by rule or regulation, that relate to— 

11 ‘‘(A) fraud, manipulation, and other abu12 sive practices involving security-based swaps 

13 (including security-based swaps that are offered 

14 but not entered into); 

15 ‘‘(B) diligent supervision of the business of 

16 the registered security-based swap dealer and 

17 major security-based swap participant; 

18 ‘‘(C) adherence to all applicable position 

19 limits; and 

20 ‘‘(D) such other matters as the Commis21 sion determines to be appropriate. 

22 ‘‘(2) SPECIAL RULE; FIDUCIARY DUTIES TO

23 CERTAIN ENTITIES.— 

24 ‘‘(A) GOVERNMENTAL ENTITIES.—A secu25 rity-based swap dealer that provides advice reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00863 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
864 

•S 3217 AMDT 3739 

1 garding, or offers to enter into, or enters into 

2 a security-based swap with a State, State agen3 cy, city, county, municipality, or other political 

4 subdivision of a State, or a Federal agency shall 

5 have a fiduciary duty to the State, State agen6 cy, city, county, municipality, or other political 

7 subdivision of the State, or the Federal agency, 

8 as appropriate. 

9 ‘‘(B) PENSION PLANS; ENDOWMENTS; RE10 TIREMENT PLANS.—A security-based swap deal11 er that provides advice regarding, or offers to 

12 enter into, or enters into a security-based swap 

13 with a pension plan, endowment, or retirement 

14 plan shall have a fiduciary duty to the pension 

15 plan, endowment, or retirement plan, as appro16 priate. 

17 ‘‘(3) BUSINESS CONDUCT REQUIREMENTS.— 

18 Business conduct requirements adopted by the Com19 mission under this subsection shall— 

20 ‘‘(A) establish the standard of care for a 

21 security-based swap dealer or major security22 based swap participant to verify that any 

23 counterparty meets the eligibility standards for 

24 an eligible contract participant; 


sroberts on DSKH9S0YB1PROD with BILLS
865 

•S 3217 AMDT 3739 

1 ‘‘(B) require disclosure by the security2 based swap dealer or major security-based swap 

3 participant to any counterparty to the trans4 action (other than a security-based swap dealer 

5 or a major security-based swap participant) 

6 of— 

7 ‘‘(i) information about the material 

8 risks and characteristics of the security9 based swap; 

10 ‘‘(ii) the source and amount of any 

11 fees or other material remuneration that 

12 the security-based swap dealer or major se13 curity-based swap participant would di14 rectly or indirectly expect to receive in con15 nection with the security-based swap; 

16 ‘‘(iii) any other material incentives or 

17 conflicts of interest that the security-based 

18 swap dealer or major security-based swap 

19 participant may have in connection with 

20 the security-based swap; and 

21 ‘‘(iv)(I) for cleared security-based 

22 swaps, upon the request of the 

23 counterparty, the daily mark from the ap24 propriate clearing agency; and 


sroberts on DSKH9S0YB1PROD with BILLS
866 

•S 3217 AMDT 3739 

1 ‘‘(II) for uncleared security-based 

2 swaps, the daily mark of the security-based 

3 swap dealer or the major security-based 

4 swap participant; 

5 ‘‘(C) establish a standard of conduct for a 

6 security-based swap dealer or major security7 based swap participant to communicate in a 

8 fair and balanced manner based on principles of 

9 fair dealing and good faith; 

10 ‘‘(D) establish a standard of conduct for a 

11 security-based swap dealer or major security12 based swap participant, with respect to a 

13 counterparty that is an eligible contract partici14 pant within the meaning of subclause (I) or (II) 

15 of clause (vii) of section 1a(18) of the Com16 modity Exchange Act, to have a reasonable 

17 basis to believe that the counterparty has an 

18 independent representative that— 

19 ‘‘(i) has sufficient knowledge to evalu20 ate the transaction and risks; 

21 ‘‘(ii) is not subject to a statutory dis22 qualification; 

23 ‘‘(iii) is independent of the security24 based swap dealer or major security-based 

25 swap participant; 


sroberts on DSKH9S0YB1PROD with BILLS
867 

•S 3217 AMDT 3739 

1 ‘‘(iv) undertakes a duty to act in the 

2 best interests of the counterparty it rep3 resents; 

4 ‘‘(v) makes appropriate disclosures; 

5 and 

6 ‘‘(vi) will provide written representa7 tions to the eligible contract participant re8 garding fair pricing and the appropriate9 ness of the transaction; and 

10 ‘‘(E) establish such other standards and 

11 requirements as the Commission may determine 

12 are appropriate in the public interest, for the 

13 protection of investors, or otherwise in further14 ance of the purposes of this title. 

15 ‘‘(4) RULES.—The Commission shall prescribe 

16 rules under this subsection governing business con17 duct standards for security-based swap dealers and 

18 major security-based swap participants. 

19 ‘‘(i) DOCUMENTATION AND BACK OFFICE STAND20 ARDS.— 

21 ‘‘(1) IN GENERAL.—Each registered security22 based swap dealer and major security-based swap 

23 participant shall conform with such standards as 

24 may be prescribed by the Commission, by rule or 

25 regulation, that relate to timely and accurate conVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00867 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
868 

•S 3217 AMDT 3739 

1 firmation, processing, netting, documentation, and 

2 valuation of all security-based swaps. 

3 ‘‘(2) RULES.—The Commission shall adopt 

4 rules governing documentation and back office 

5 standards for security-based swap dealers and major 

6 security-based swap participants. 

7 ‘‘(j) DUTIES.—Each registered security-based swap 

8 dealer and major security-based swap participant shall, at 

9 all times, comply with the following requirements: 

10 ‘‘(1) MONITORING OF TRADING.—The security11 based swap dealer or major security-based swap par12 ticipant shall monitor its trading in security-based 

13 swaps to prevent violations of applicable position 

14 limits. 

15 ‘‘(2) RISK MANAGEMENT PROCEDURES.—The 

16 security-based swap dealer or major security-based 

17 swap participant shall establish robust and profes18 sional risk management systems adequate for man19 aging the day-to-day business of the security-based 

20 swap dealer or major security-based swap partici21 pant. 

22 ‘‘(3) DISCLOSURE OF GENERAL INFORMA23 TION.—The security-based swap dealer or major se24 curity-based swap participant shall disclose to the 

25 Commission and to the prudential regulator for the 


sroberts on DSKH9S0YB1PROD with BILLS
869 

•S 3217 AMDT 3739 

1 security-based swap dealer or major security-based 

2 swap participant, as applicable, information con3 cerning— 

4 ‘‘(A) terms and conditions of its security5 based swaps; 

6 ‘‘(B) security-based swap trading oper7 ations, mechanisms, and practices; 

8 ‘‘(C) financial integrity protections relating 

9 to security-based swaps; and 

10 ‘‘(D) other information relevant to its trad11 ing in security-based swaps. 

12 ‘‘(4) ABILITY TO OBTAIN INFORMATION.—The 

13 security-based swap dealer or major security-based 

14 swap participant shall— 

15 ‘‘(A) establish and enforce internal systems 

16 and procedures to obtain any necessary infor17 mation to perform any of the functions de18 scribed in this section; and 

19 ‘‘(B) provide the information to the Com20 mission and to the prudential regulator for the 

21 security-based swap dealer or major security22 based swap participant, as applicable, on re23 quest. 

24 ‘‘(5) CONFLICTS OF INTEREST.—The security25 based swap dealer and major security-based swap 


sroberts on DSKH9S0YB1PROD with BILLS
870 

•S 3217 AMDT 3739 

1 participant shall implement conflict-of-interest sys2 tems and procedures that— 

3 ‘‘(A) establish structural and institutional 

4 safeguards to ensure that the activities of any 

5 person within the firm relating to research or 

6 analysis of the price or market for any security7 based swap or acting in a role of providing 

8 clearing activities or making determinations as 

9 to accepting clearing customers are separated 

10 by appropriate informational partitions within 

11 the firm from the review, pressure, or oversight 

12 of persons whose involvement in pricing, trad13 ing, or clearing activities might potentially bias 

14 their judgment or supervision and contravene 

15 the core principles of open access and the busi16 ness conduct standards described in this title; 

17 and 

18 ‘‘(B) address such other issues as the 

19 Commission determines to be appropriate. 

20 ‘‘(6) ANTITRUST CONSIDERATIONS.—Unless 

21 necessary or appropriate to achieve the purposes of 

22 this title, the security-based swap dealer or major se23 curity-based swap participant shall not— 


sroberts on DSKH9S0YB1PROD with BILLS
871 

•S 3217 AMDT 3739 

1 ‘‘(A) adopt any process or take any action 

2 that results in any unreasonable restraint of 

3 trade; or 

4 ‘‘(B) impose any material anticompetitive 

5 burden on trading or clearing. 

6 ‘‘(k) DESIGNATION OF CHIEF COMPLIANCE OFFI7 CER.— 

8 ‘‘(1) IN GENERAL.—Each security-based swap 

9 dealer and major security-based swap participant 

10 shall designate an individual to serve as a chief com11 pliance officer. 

12 ‘‘(2) DUTIES.—The chief compliance officer 

13 shall— 

14 ‘‘(A) report directly to the board or to the 

15 senior officer of the security-based swap dealer 

16 or major security-based swap participant; 

17 ‘‘(B) review the compliance of the security18 based swap dealer or major security-based swap 

19 participant with respect to the security-based 

20 swap dealer and major security-based swap par21 ticipant requirements described in this section; 

22 ‘‘(C) in consultation with the board of di23 rectors, a body performing a function similar to 

24 the board, or the senior officer of the organizaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00871 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
872 

•S 3217 AMDT 3739 

1 tion, resolve any conflicts of interest that may 

2 arise; 

3 ‘‘(D) be responsible for administering each 

4 policy and procedure that is required to be es5 tablished pursuant to this section; 

6 ‘‘(E) ensure compliance with this title (in7 cluding regulations) relating to security-based 

8 swaps, including each rule prescribed by the 

9 Commission under this section; 

10 ‘‘(F) establish procedures for the remedi11 ation of noncompliance issues identified by the 

12 chief compliance officer through any— 

13 ‘‘(i) compliance office review; 

14 ‘‘(ii) look-back; 

15 ‘‘(iii) internal or external audit find16 ing; 

17 ‘‘(iv) self-reported error; or 

18 ‘‘(v) validated complaint; and 

19 ‘‘(G) establish and follow appropriate pro20 cedures for the handling, management response, 

21 remediation, retesting, and closing of non22 compliance issues. 

23 ‘‘(3) ANNUAL REPORTS.— 

24 ‘‘(A) IN GENERAL.—In accordance with 

25 rules prescribed by the Commission, the chief 


sroberts on DSKH9S0YB1PROD with BILLS
873 

•S 3217 AMDT 3739 

1 compliance officer shall annually prepare and 

2 sign a report that contains a description of— 

3 ‘‘(i) the compliance of the security4 based swap dealer or major swap partici5 pant with respect to this title (including 

6 regulations); and 

7 ‘‘(ii) each policy and procedure of the 

8 security-based swap dealer or major secu9 rity-based swap participant of the chief 

10 compliance officer (including the code of 

11 ethics and conflict of interest policies). 

12 ‘‘(B) REQUIREMENTS.—A compliance re13 port under subparagraph (A) shall— 

14 ‘‘(i) accompany each appropriate fi15 nancial report of the security-based swap 

16 dealer or major security-based swap partic17 ipant that is required to be furnished to 

18 the Commission pursuant to this section; 

19 and 

20 ‘‘(ii) include a certification that, under 

21 penalty of law, the compliance report is ac22 curate and complete. 

23 ‘‘(l) ENFORCEMENT AND ADMINISTRATIVE PRO24 CEEDING AUTHORITY.— 

25 ‘‘(1) PRIMARY ENFORCEMENT AUTHORITY.— 


sroberts on DSKH9S0YB1PROD with BILLS
874 

•S 3217 AMDT 3739 

1 ‘‘(A) SECURITIES AND EXCHANGE COMMIS2 SION.—Except as provided in subparagraph 

3 (B), the Commission shall have primary author4 ity to enforce subtitle B, and the amendments 

5 made by subtitle B of the Wall Street Trans6 parency and Accountability Act of 2010, with 

7 respect to any person. 

8 ‘‘(B) APPROPRIATE FEDERAL BANKING

9 AGENCIES.—The appropriate Federal banking 

10 agency for security-based swap dealers or major 

11 security-based swap participants that are depos12 itory institutions, as that term is defined under 

13 section 3 of the Federal Deposit Insurance Act 

14 (12 U.S.C. 1813), shall have exclusive authority 

15 to enforce the provisions of subsection (e) and 

16 other prudential requirements of this title, with 

17 respect to depository institutions that are secu18 rity-based swap dealers or major security-based 

19 swap participants. 

20 ‘‘(C) REFERRAL.— 

21 ‘‘(i) VIOLATIONS OF NONPRUDENTIAL

22 REQUIREMENTS.—If the appropriate Fed23 eral banking agency for security-based 

24 swap dealers or major security-based swap 

25 participants that are depository instituVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00874 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
875 

•S 3217 AMDT 3739 

1 tions has cause to believe that such secu2 rity-based swap dealer or major security3 based swap participant may have engaged 

4 in conduct that constitutes a violation of 

5 the nonprudential requirements of this sec6 tion or rules adopted by the Commission 

7 thereunder, the agency may recommend in 

8 writing to the Commission that the Com9 mission initiate an enforcement proceeding 

10 as authorized under this title. The rec11 ommendation shall be accompanied by a 

12 written explanation of the concerns giving 

13 rise to the recommendation. 

14 ‘‘(ii) VIOLATIONS OF PRUDENTIAL RE15 QUIREMENTS.—If the Commission has 

16 cause to believe that a securities-based 

17 swap dealer or major securities-based swap 

18 participant that has a prudential regulator 

19 may have engaged in conduct that con20 stitute a violation of the prudential re21 quirements of subsection (e) or rules 

22 adopted thereunder, the Commission may 

23 recommend in writing to the prudential 

24 regulator that the prudential regulator ini25 tiate an enforcement proceeding as authorVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00875 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
876 

•S 3217 AMDT 3739 

1 ized under this title. The recommendation 

2 shall be accompanied by a written expla3 nation of the concerns giving rise to the 

4 recommendation. 

5 ‘‘(2) CENSURE, DENIAL, SUSPENSION; NOTICE

6 AND HEARING.—The Commission, by order, shall 

7 censure, place limitations on the activities, functions, 

8 or operations of, or revoke the registration of any se9 curity-based swap dealer or major security-based 

10 swap participant that has registered with the Com11 mission pursuant to subsection (b) if the Commis12 sion finds, on the record after notice and oppor13 tunity for hearing, that such censure, placing of lim14 itations, or revocation is in the public interest and 

15 that such security-based swap dealer or major secu16 rity-based swap participant, or any person associated 

17 with such security-based swap dealer or major secu18 rity-based swap participant effecting or involved in 

19 effecting transactions in security-based swaps on be20 half of such security-based swap dealer or major se21 curity-based swap participant, whether prior or sub22 sequent to becoming so associated— 

23 ‘‘(A) has committed or omitted any act, or 

24 is subject to an order or finding, enumerated in 


sroberts on DSKH9S0YB1PROD with BILLS
877 

•S 3217 AMDT 3739 

1 subparagraph (A), (D), or (E) of paragraph (4) 

2 of section 15(b); 

3 ‘‘(B) has been convicted of any offense 

4 specified in subparagraph (B) of such para5 graph (4) within 10 years of the commencement 

6 of the proceedings under this subsection; 

7 ‘‘(C) is enjoined from any action, conduct, 

8 or practice specified in subparagraph (C) of 

9 such paragraph (4); 

10 ‘‘(D) is subject to an order or a final order 

11 specified in subparagraph (F) or (H), respec12 tively, of such paragraph (4); or 

13 ‘‘(E) has been found by a foreign financial 

14 regulatory authority to have committed or omit15 ted any act, or violated any foreign statute or 

16 regulation, enumerated in subparagraph (G) of 

17 such paragraph (4). 

18 ‘‘(3) ASSOCIATED PERSONS.—With respect to 

19 any person who is associated, who is seeking to be20 come associated, or, at the time of the alleged mis21 conduct, who was associated or was seeking to be22 come associated with a security-based swap dealer or 

23 major security-based swap participant for the pur24 pose of effecting or being involved in effecting secu25 rity-based swaps on behalf of such security-based 


sroberts on DSKH9S0YB1PROD with BILLS
878 

•S 3217 AMDT 3739 

1 swap dealer or major security-based swap partici2 pant, the Commission, by order, shall censure, place 

3 limitations on the activities or functions of such per4 son, or suspend for a period not exceeding 12 

5 months, or bar such person from being associated 

6 with a security-based swap dealer or major security7 based swap participant, if the Commission finds, on 

8 the record after notice and opportunity for a hear9 ing, that such censure, placing of limitations, sus10 pension, or bar is in the public interest and that 

11 such person— 

12 ‘‘(A) has committed or omitted any act, or 

13 is subject to an order or finding, enumerated in 

14 subparagraph (A), (D), or (E) of paragraph (4) 

15 of section 15(b); 

16 ‘‘(B) has been convicted of any offense 

17 specified in subparagraph (B) of such para18 graph (4) within 10 years of the commencement 

19 of the proceedings under this subsection; 

20 ‘‘(C) is enjoined from any action, conduct, 

21 or practice specified in subparagraph (C) of 

22 such paragraph (4); 

23 ‘‘(D) is subject to an order or a final order 

24 specified in subparagraph (F) or (H), respec25 tively, of such paragraph (4); or 


sroberts on DSKH9S0YB1PROD with BILLS
879 

•S 3217 AMDT 3739 

1 ‘‘(E) has been found by a foreign financial 

2 regulatory authority to have committed or omit3 ted any act, or violated any foreign statute or 

4 regulation, enumerated in subparagraph (G) of 

5 such paragraph (4). 

6 ‘‘(4) UNLAWFUL CONDUCT.—It shall be unlaw7 ful— 

8 ‘‘(A) for any person as to whom an order 

9 under paragraph (3) is in effect, without the 

10 consent of the Commission, willfully to become, 

11 or to be, associated with a security-based swap 

12 dealer or major security-based swap participant 

13 in contravention of such order; or 

14 ‘‘(B) for any security-based swap dealer or 

15 major security-based swap participant to permit 

16 such a person, without the consent of the Com17 mission, to become or remain a person associ18 ated with the security-based swap dealer or 

19 major security-based swap participant in con20 travention of such order, if such security-based 

21 swap dealer or major security-based swap par22 ticipant knew, or in the exercise of reasonable 

23 care should have known, of such order.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
880 

•S 3217 AMDT 3739 

1 SEC. 765. RULEMAKING ON CONFLICT OF INTEREST. 

2 (a) IN GENERAL.—Not later than 180 days after the 

3 date of enactment of the Wall Street Transparency and 

4 Accountability Act of 2010, the Securities and Exchange 

5 Commission shall determine whether to adopt rules to es6 tablish limits on the control of any clearing agency that 

7 clears security-based swaps, or on the control of any secu8 rity-based swap execution facility or national securities ex9 change that posts or makes available for trading security10 based swaps, by a bank holding company (as defined in 

11 section 2 of the Bank Holding Company Act of 1956 (12 

12 U.S.C. 1841)) with total consolidated assets of 

13 $50,000,000,000 or more, a nonbank financial company 

14 (as defined in section 102) supervised by the Board of 

15 Governors of the Federal Reserve System, affiliate of such 

16 a bank holding company or nonbank financial company, 

17 a security-based swap dealer, major security-based swap 

18 participant, or person associated with a security-based 

19 swap dealer or major security-based swap participant. 

20 (b) PURPOSES.—The Commission shall adopt rules if 

21 the Commission determines, after the review described in 

22 subsection (a), that such rules are necessary or appro23 priate to improve the governance of, or to mitigate sys24 temic risk, promote competition, or mitigate conflicts of 

25 interest in connection with a security-based swap dealer 

26 or major security-based swap participant’s conduct of 


sroberts on DSKH9S0YB1PROD with BILLS
881 

•S 3217 AMDT 3739 

1 business with, a clearing agency, national securities ex2 change, or security-based swap execution facility that 

3 clears, posts, or makes available for trading security-based 

4 swaps and in which such security-based swap dealer or 

5 major security-based swap participant has a material debt 

6 or equity investment. 

7 SEC. 766. REPORTING AND RECORDKEEPING. 

8 (a) IN GENERAL.—The Securities Exchange Act of 

9 1934 (15 U.S.C. 78a et seq.) is amended by inserting after 

10 section 13 the following: 

11 ‘‘SEC. 13A. REPORTING AND RECORDKEEPING FOR CER12 TAIN SECURITY-BASED SWAPS. 

13 ‘‘(a) REQUIRED REPORTING OF SECURITY-BASED

14 SWAPS NOT ACCEPTED BY ANY CLEARING AGENCY OR

15 DERIVATIVES CLEARING ORGANIZATION.— 

16 ‘‘(1) IN GENERAL.—Each security-based swap 

17 that is not accepted for clearing by any clearing 

18 agency or derivatives clearing organization shall be 

19 reported to— 

20 ‘‘(A) a security-based swap data repository 

21 described in section 10B(n); or 

22 ‘‘(B) in the case in which there is no secu23 rity-based swap data repository that would ac24 cept the security-based swap, to the Commis25 sion pursuant to this section within such time 


sroberts on DSKH9S0YB1PROD with BILLS
882 

•S 3217 AMDT 3739 

1 period as the Commission may by rule or regu2 lation prescribe. 

3 ‘‘(2) TRANSITION RULE FOR PREENACTMENT

4 SECURITY-BASED SWAPS.— 

5 ‘‘(A) SECURITY-BASED SWAPS ENTERED

6 INTO BEFORE THE DATE OF ENACTMENT OF

7 THE WALL STREET TRANSPARENCY AND AC8 COUNTABILITY ACT OF 2010.—Each security9 based swap entered into before the date of en10 actment of the Wall Street Transparency and 

11 Accountability Act of 2010, the terms of which 

12 have not expired as of the date of enactment of 

13 that Act, shall be reported to a registered secu14 rity-based swap data repository or the Commis15 sion by a date that is not later than— 

16 ‘‘(i) 30 days after issuance of the in17 terim final rule; or 

18 ‘‘(ii) such other period as the Com19 mission determines to be appropriate. 

20 ‘‘(B) COMMISSION RULEMAKING.—The 

21 Commission shall promulgate an interim final 

22 rule within 90 days of the date of enactment of 

23 this section providing for the reporting of each 

24 security-based swap entered into before the date 


sroberts on DSKH9S0YB1PROD with BILLS
883 

•S 3217 AMDT 3739 

1 of enactment as referenced in subparagraph 

2 (A). 

3 ‘‘(C) EFFECTIVE DATE.—The reporting 

4 provisions described in this section shall be ef5 fective upon the date of the enactment of this 

6 section. 

7 ‘‘(3) REPORTING OBLIGATIONS.— 

8 ‘‘(A) SECURITY-BASED SWAPS IN WHICH

9 ONLY 1 COUNTERPARTY IS A SECURITY-BASED

10 SWAP DEALER OR MAJOR SECURITY-BASED

11 SWAP PARTICIPANT.—With respect to a secu12 rity-based swap in which only 1 counterparty is 

13 a security-based swap dealer or major security14 based swap participant, the security-based swap 

15 dealer or major security-based swap participant 

16 shall report the security-based swap as required 

17 under paragraphs (1) and (2). 

18 ‘‘(B) SECURITY-BASED SWAPS IN WHICH 1

19 COUNTERPARTY IS A SECURITY-BASED SWAP

20 DEALER AND THE OTHER A MAJOR SECURITY21 BASED SWAP PARTICIPANT.—With respect to a 

22 security-based swap in which 1 counterparty is 

23 a security-based swap dealer and the other a 

24 major security-based swap participant, the secu25 rity-based swap dealer shall report the securityVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00883 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
884 

•S 3217 AMDT 3739 

1 based swap as required under paragraphs (1) 

2 and (2). 

3 ‘‘(C) OTHER SECURITY-BASED SWAPS.— 

4 With respect to any other security-based swap 

5 not described in subparagraph (A) or (B), the 

6 counterparties to the security-based swap shall 

7 select a counterparty to report the security8 based swap as required under paragraphs (1) 

9 and (2). 

10 ‘‘(b) DUTIES OF CERTAIN INDIVIDUALS.—Any indi11 vidual or entity that enters into a security-based swap 

12 shall meet each requirement described in subsection (c) 

13 if the individual or entity did not— 

14 ‘‘(1) clear the security-based swap in accord15 ance with section 3C(a)(1); or 

16 ‘‘(2) have the data regarding the security-based 

17 swap accepted by a security-based swap data reposi18 tory in accordance with rules (including timeframes) 

19 adopted by the Commission under this title. 

20 ‘‘(c) REQUIREMENTS.—An individual or entity de21 scribed in subsection (b) shall— 

22 ‘‘(1) upon written request from the Commis23 sion, provide reports regarding the security-based 

24 swaps held by the individual or entity to the ComVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00884 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
885 

•S 3217 AMDT 3739 

1 mission in such form and in such manner as the 

2 Commission may request; and 

3 ‘‘(2) maintain books and records pertaining to 

4 the security-based swaps held by the individual or 

5 entity in such form, in such manner, and for such 

6 period as the Commission may require, which shall 

7 be open to inspection by— 

8 ‘‘(A) any representative of the Commis9 sion; 

10 ‘‘(B) an appropriate prudential regulator; 

11 ‘‘(C) the Commodity Futures Trading 

12 Commission; 

13 ‘‘(D) the Financial Stability Oversight 

14 Council; and 

15 ‘‘(E) the Department of Justice. 

16 ‘‘(d) IDENTICAL DATA.—In prescribing rules under 

17 this section, the Commission shall require individuals and 

18 entities described in subsection (b) to submit to the Com19 mission a report that contains data that is not less com20 prehensive than the data required to be collected by secu21 rity-based swap data repositories under this title.’’. 

22 (b) BENEFICIAL OWNERSHIP REPORTING.—Section 

23 13 of the Securities Exchange Act of 1934 (15 U.S.C. 

24 78m) is amended— 


sroberts on DSKH9S0YB1PROD with BILLS
886 

•S 3217 AMDT 3739 

1 (1) in subsection (d)(1), by inserting ‘‘or other2 wise becomes or is deemed to become a beneficial 

3 owner of any of the foregoing upon the purchase or 

4 sale of a security-based swap that the Commission 

5 may define by rule, and’’ after ‘‘Alaska Native 

6 Claims Settlement Act,’’; and 

7 (2) in subsection (g)(1), by inserting ‘‘or other8 wise becomes or is deemed to become a beneficial 

9 owner of any security of a class described in sub10 section (d)(1) upon the purchase or sale of a secu11 rity-based swap that the Commission may define by 

12 rule’’ after ‘‘subsection (d)(1) of this section’’. 

13 (c) REPORTS BY INSTITUTIONAL INVESTMENT MAN14 AGERS.—Section 13(f)(1) of the Securities Exchange Act 

15 of 1934 (15 U.S.C. 78m(f)(1)) is amended by inserting 

16 ‘‘or otherwise becomes or is deemed to become a beneficial 

17 owner of any security of a class described in subsection 

18 (d)(1) upon the purchase or sale of a security-based swap 

19 that the Commission may define by rule,’’ after ‘‘sub20 section (d)(1) of this section’’. 

21 (d) ADMINISTRATIVE PROCEEDING AUTHORITY.— 

22 Section 15(b)(4) of the Securities Exchange Act of 1934 

23 (15 U.S.C. 78o(b)(4)) is amended— 


sroberts on DSKH9S0YB1PROD with BILLS
887 

•S 3217 AMDT 3739 

1 (1) in subparagraph (C), by inserting ‘‘security2 based swap dealer, major security-based swap partic3 ipant,’’ after ‘‘government securities dealer,’’; and 

4 (2) in subparagraph (F), by striking ‘‘broker or 

5 dealer’’ and inserting ‘‘broker, dealer, security-based 

6 swap dealer, or a major security-based swap partici7 pant’’. 

8 (e) SECURITY-BASED SWAP BENEFICIAL OWNER9 SHIP.—Section 13 of the Securities Exchange Act of 1934 

10 (15 U.S.C. 78m) is amended by adding at the end the 

11 following: 

12 ‘‘(o) BENEFICIAL OWNERSHIP.—For purposes of this 

13 section and section 16, a person shall be deemed to acquire 

14 beneficial ownership of an equity security based on the 

15 purchase or sale of a security-based swap, only to the ex16 tent that the Commission, by rule, determines after con17 sultation with the prudential regulators and the Secretary 

18 of the Treasury, that the purchase or sale of the security19 based swap, or class of security-based swap, provides inci20 dents of ownership comparable to direct ownership of the 

21 equity security, and that it is necessary to achieve the pur22 poses of this section that the purchase or sale of the secu23 rity-based swaps, or class of security-based swap, be 

24 deemed the acquisition of beneficial ownership of the eq25 uity security.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
888 

•S 3217 AMDT 3739 

1 SEC. 767. STATE GAMING AND BUCKET SHOP LAWS. 

2 Section 28(a) of the Securities Exchange Act of 1934 

3 (15 U.S.C. 78bb(a)) is amended to read as follows: 

4 ‘‘(a) LIMITATION ON JUDGMENTS.— 

5 ‘‘(1) IN GENERAL.—No person permitted to 

6 maintain a suit for damages under the provisions of 

7 this title shall recover, through satisfaction of judg8 ment in 1 or more actions, a total amount in excess 

9 of the actual damages to that person on account of 

10 the act complained of. Except as otherwise specifi11 cally provided in this title, nothing in this title shall 

12 affect the jurisdiction of the securities commission 

13 (or any agency or officer performing like functions) 

14 of any State over any security or any person insofar 

15 as it does not conflict with the provisions of this title 

16 or the rules and regulations under this title. 

17 ‘‘(2) RULE OF CONSTRUCTION.—Except as pro18 vided in subsection (f), the rights and remedies pro19 vided by this title shall be in addition to any and all 

20 other rights and remedies that may exist at law or 

21 in equity. 

22 ‘‘(3) STATE BUCKET SHOP LAWS.—No State 

23 law which prohibits or regulates the making or pro24 moting of wagering or gaming contracts, or the op25 eration of ‘bucket shops’ or other similar or related 

26 activities, shall invalidate— 


sroberts on DSKH9S0YB1PROD with BILLS
889 

•S 3217 AMDT 3739 

1 ‘‘(A) any put, call, straddle, option, privi2 lege, or other security subject to this title (ex3 cept any security that has a pari-mutuel payout 

4 or otherwise is determined by the Commission, 

5 acting by rule, regulation, or order, to be appro6 priately subject to such laws), or apply to any 

7 activity which is incidental or related to the 

8 offer, purchase, sale, exercise, settlement, or 

9 closeout of any such security; 

10 ‘‘(B) any security-based swap between eli11 gible contract participants; or 

12 ‘‘(C) any security-based swap effected on a 

13 national securities exchange registered pursuant 

14 to section 6(b). 

15 ‘‘(4) OTHER STATE PROVISIONS.—No provision 

16 of State law regarding the offer, sale, or distribution 

17 of securities shall apply to any transaction in a secu18 rity-based swap or a security futures product, except 

19 that this paragraph may not be construed as lim20 iting any State antifraud law of general applica21 bility. A security-based swap may not be regulated 

22 as an insurance contract under any provision of 

23 State law.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
890 

•S 3217 AMDT 3739 

1 SEC. 768. AMENDMENTS TO THE SECURITIES ACT OF 1933; 

2 TREATMENT OF SECURITY-BASED SWAPS. 

3 (a) DEFINITIONS.—Section 2(a) of the Securities Act 

4 of 1933 (15 U.S.C. 77b(a)) is amended— 

5 (1) in paragraph (1), by inserting ‘‘security6 based swap,’’ after ‘‘security future,’’; 

7 (2) in paragraph (3), by adding at the end the 

8 following: ‘‘Any offer or sale of a security-based 

9 swap by or on behalf of the issuer of the securities 

10 upon which such security-based swap is based or is 

11 referenced, an affiliate of the issuer, or an under12 writer, shall constitute a contract for sale of, sale of, 

13 offer for sale, or offer to sell such securities.’’; and 

14 (3) by adding at the end the following: 

15 ‘‘(17) The terms ‘swap’ and ‘security-based 

16 swap’ have the same meanings as in section 1a of 

17 the Commodity Exchange Act (7 U.S.C. 1a). 

18 ‘‘(18) The terms ‘purchase’ or ‘sale’ of a secu19 rity-based swap shall be deemed to mean the execu20 tion, termination (prior to its scheduled maturity 

21 date), assignment, exchange, or similar transfer or 

22 conveyance of, or extinguishing of rights or obliga23 tions under, a security-based swap, as the context 

24 may require.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
891 

•S 3217 AMDT 3739 

1 (b) REGISTRATION OF SECURITY-BASED SWAPS.— 

2 Section 5 of the Securities Act of 1933 (15 U.S.C. 77e) 

3 is amended by adding at the end the following: 

4 ‘‘(d) Notwithstanding the provisions of section 3 or 

5 4, unless a registration statement meeting the require6 ments of section 10(a) is in effect as to a security-based 

7 swap, it shall be unlawful for any person, directly or indi8 rectly, to make use of any means or instruments of trans9 portation or communication in interstate commerce or of 

10 the mails to offer to sell, offer to buy or purchase or sell 

11 a security-based swap to any person who is not an eligible 

12 contract participant as defined in section 1a(18) of the 

13 Commodity Exchange Act (7 U.S.C. 1a(18)).’’. 

14 SEC. 769. DEFINITIONS UNDER THE INVESTMENT COMPANY 

15 ACT OF 1940. 

16 Section 2(a) of the Investment Company Act of 1940 

17 (15 U.S.C. 80a–2) is amended by adding at the end the 

18 following: 

19 ‘‘(54) The terms ‘commodity pool’, ‘commodity 

20 pool operator’, ‘commodity trading advisor’, ‘major 

21 swap participant’, ‘swap’, ‘swap dealer’, and ‘swap 

22 execution facility’ have the same meanings as in sec23 tion 1a of the Commodity Exchange Act (7 U.S.C. 

24 1a).’’. 


sroberts on DSKH9S0YB1PROD with BILLS
892 

•S 3217 AMDT 3739 

1 SEC. 770. DEFINITIONS UNDER THE INVESTMENT ADVI2 SORS ACT OF 1940. 

3 Section 202(a) of the Investment Advisers Act of 

4 1940 (15 U.S.C. 80b–2) is amended by adding at the end 

5 the following: 

6 ‘‘(29) The terms ‘commodity pool’, ‘commodity 

7 pool operator’, ‘commodity trading advisor’, ‘major 

8 swap participant’, ‘swap’, ‘swap dealer’, and ‘swap 

9 execution facility’ have the same meanings as in sec10 tion 1a of the Commodity Exchange Act (7 U.S.C. 

11 1a).’’. 

12 SEC. 771. OTHER AUTHORITY. 

13 Unless otherwise provided by its terms, this subtitle 

14 does not divest any appropriate Federal banking agency, 

15 the Securities and Exchange Commission, the Commodity 

16 Futures Trading Commission, or any other Federal or 

17 State agency, of any authority derived from any other pro18 vision of applicable law. 

19 SEC. 772. JURISDICTION. 

20 (a) IN GENERAL.—Section 36 of the Securities Ex21 change Act of 1934 (15 U.S.C. 78mm) is amended by add22 ing at the end the following: 

23 ‘‘(c) DERIVATIVES.—The Commission shall not grant 

24 exemptions from the security-based swap provisions of the 

25 Wall Street Transparency and Accountability Act of 2010 


sroberts on DSKH9S0YB1PROD with BILLS
893 

•S 3217 AMDT 3739 

1 or the amendments made by that Act, except as expressly 

2 authorized under the provisions of that Act.’’. 

3 (b) RULE OF CONSTRUCTION.—Section 30 of the Se4 curities Exchange Act of 1934 (15 U.S.C. 78dd) is amend5 ed by adding at the end the following: 

6 ‘‘(c) RULE OF CONSTRUCTION.—No provision of this 

7 title that was added by the Wall Street Transparency and 

8 Accountability Act of 2010, or any rule or regulation 

9 thereunder, shall apply to any person insofar as such per10 son transacts a business in security-based swaps without 

11 the jurisdiction of the United States, unless such person 

12 transacts such business in contravention of such rules and 

13 regulations as the Commission may prescribe as necessary 

14 or appropriate to prevent the evasion of any provision of 

15 this title that was added by the Wall Street Transparency 

16 and Accountability Act of 2010. This subsection shall not 

17 be construed to limit the jurisdiction of the Commission 

18 under any provision of this title, as in effect prior to the 

19 date of enactment of the Wall Street Transparency and 

20 Accountability Act of 2010.’’. 

21 SEC. 773. EFFECTIVE DATE. 

22 Unless otherwise specifically provided in this subtitle, 

23 this subtitle, the provisions of this subtitle, and the 

24 amendments made by this subtitle shall become effective 

25 180 days after the date of enactment of this Act. 


sroberts on DSKH9S0YB1PROD with BILLS
894 

•S 3217 AMDT 3739 

1 TITLE VIII—PAYMENT, CLEAR2 ING, AND SETTLEMENT SU3 PERVISION 

4 SEC. 801. SHORT TITLE. 

5 This title may be cited as the ‘‘Payment, Clearing, 

6 and Settlement Supervision Act of 2010’’. 

7 SEC. 802. FINDINGS AND PURPOSES. 

8 (a) FINDINGS.—Congress finds the following: 

9 (1) The proper functioning of the financial mar10 kets is dependent upon safe and efficient arrange11 ments for the clearing and settlement of payment, 

12 securities, and other financial transactions. 

13 (2) Financial market utilities that conduct or 

14 support multilateral payment, clearing, or settlement 

15 activities may reduce risks for their participants and 

16 the broader financial system, but such utilities may 

17 also concentrate and create new risks and thus must 

18 be well designed and operated in a safe and sound 

19 manner. 

20 (3) Payment, clearing, and settlement activities 

21 conducted by financial institutions also present im22 portant risks to the participating financial institu23 tions and to the financial system. 

24 (4) Enhancements to the regulation and super25 vision of systemically important financial market 


sroberts on DSKH9S0YB1PROD with BILLS
895 

•S 3217 AMDT 3739 

1 utilities and the conduct of systemically important 

2 payment, clearing, and settlement activities by finan3 cial institutions are necessary— 

4 (A) to provide consistency; 

5 (B) to promote robust risk management 

6 and safety and soundness; 

7 (C) to reduce systemic risks; and 

8 (D) to support the stability of the broader 

9 financial system. 

10 (b) PURPOSE.—The purpose of this title is to miti11 gate systemic risk in the financial system and promote fi12 nancial stability by— 

13 (1) authorizing the Board of Governors to pre14 scribe uniform standards for the— 

15 (A) management of risks by systemically 

16 important financial market utilities; and 

17 (B) conduct of systemically important pay18 ment, clearing, and settlement activities by fi19 nancial institutions; 

20 (2) providing the Board of Governors an en21 hanced role in the supervision of risk management 

22 standards for systemically important financial mar23 ket utilities; 

24 (3) strengthening the liquidity of systemically 

25 important financial market utilities; and 


sroberts on DSKH9S0YB1PROD with BILLS
896 

•S 3217 AMDT 3739 

1 (4) providing the Board of Governors an en2 hanced role in the supervision of risk management 

3 standards for systemically important payment, clear4 ing, and settlement activities by financial institu5 tions. 

6 SEC. 803. DEFINITIONS. 

7 In this title, the following definitions shall apply: 

8 (1) APPROPRIATE FINANCIAL REGULATOR.— 

9 The term ‘‘appropriate financial regulator’’ means— 

10 (A) the primary financial regulatory agen11 cy, as defined in section 2 of this Act; 

12 (B) the National Credit Union Administra13 tion, with respect to any insured credit union 

14 under the Federal Credit Union Act (12 U.S.C. 

15 1751 et seq.); and 

16 (C) the Board of Governors, with respect 

17 to organizations operating under section 25A of 

18 the Federal Reserve Act (12 U.S.C. 611), and 

19 any other financial institution engaged in a des20 ignated activity. 

21 (2) DESIGNATED ACTIVITY.—The term ‘‘des22 ignated activity’’ means a payment, clearing, or set23 tlement activity that the Council has designated as 

24 systemically important under section 804. 


sroberts on DSKH9S0YB1PROD with BILLS
897 

•S 3217 AMDT 3739 

1 (3) DESIGNATED FINANCIAL MARKET UTIL2 ITY.—The term ‘‘designated financial market util3 ity’’ means a financial market utility that the Coun4 cil has designated as systemically important under 

5 section 804. 

6 (4) FINANCIAL INSTITUTION.—The term ‘‘fi7 nancial institution’’ means— 

8 (A) a depository institution, as defined in 

9 section 3 of the Federal Deposit Insurance Act 

10 (12 U.S.C. 1813); 

11 (B) a branch or agency of a foreign bank, 

12 as defined in section 1(b) of the International 

13 Banking Act of 1978 (12 U.S.C. 3101); 

14 (C) an organization operating under sec15 tion 25 or 25A of the Federal Reserve Act (12 

16 U.S.C. 601–604a and 611 through 631); 

17 (D) a credit union, as defined in section 

18 101 of the Federal Credit Union Act (12 

19 U.S.C. 1752); 

20 (E) a broker or dealer, as defined in sec21 tion 3 of the Securities Exchange Act of 1934 

22 (15 U.S.C. 78c); 

23 (F) an investment company, as defined in 

24 section 3 of the Investment Company Act of 

25 1940 (15 U.S.C. 80a–3); 


sroberts on DSKH9S0YB1PROD with BILLS
898 

•S 3217 AMDT 3739 

1 (G) an insurance company, as defined in 

2 section 2 of the Investment Company Act of 

3 1940 (15 U.S.C. 80a–2); 

4 (H) an investment adviser, as defined in 

5 section 202 of the Investment Advisers Act of 

6 1940 (15 U.S.C. 80b–2); 

7 (I) a futures commission merchant, com8 modity trading advisor, or commodity pool oper9 ator, as defined in section 1a of the Commodity 

10 Exchange Act (7 U.S.C. 1a); and 

11 (J) any company engaged in activities that 

12 are financial in nature or incidental to a finan13 cial activity, as described in section 4 of the 

14 Bank Holding Company Act of 1956 (12 

15 U.S.C. 1843(k)). 

16 (5) FINANCIAL MARKET UTILITY.—The term 

17 ‘‘financial market utility’’ means any person that 

18 manages or operates a multilateral system for the 

19 purpose of transferring, clearing, or settling pay20 ments, securities, or other financial transactions 

21 among financial institutions or between financial in22 stitutions and the person. 

23 (6) PAYMENT, CLEARING, OR SETTLEMENT AC24 TIVITY.— 


sroberts on DSKH9S0YB1PROD with BILLS
899 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—The term ‘‘payment, 

2 clearing, or settlement activity’’ means an activ3 ity carried out by 1 or more financial institu4 tions to facilitate the completion of financial 

5 transactions. 

6 (B) FINANCIAL TRANSACTION.—For the 

7 purposes of subparagraph (A), the term ‘‘finan8 cial transaction’’ includes— 

9 (i) funds transfers; 

10 (ii) securities contracts; 

11 (iii) contracts of sale of a commodity 

12 for future delivery; 

13 (iv) forward contracts; 

14 (v) repurchase agreements; 

15 (vi) swaps; 

16 (vii) security-based swaps; 

17 (viii) swap agreements; 

18 (ix) security-based swap agreements; 

19 (x) foreign exchange contracts; 

20 (xi) financial derivatives contracts; 

21 and 

22 (xii) any similar transaction that the 

23 Council determines to be a financial trans24 action for purposes of this title. 


sroberts on DSKH9S0YB1PROD with BILLS
900 

•S 3217 AMDT 3739 

1 (C) INCLUDED ACTIVITIES.—When con2 ducted with respect to a financial transaction, 

3 payment, clearing, and settlement activities may 

4 include— 

5 (i) the calculation and communication 

6 of unsettled financial transactions between 

7 counterparties; 

8 (ii) the netting of transactions; 

9 (iii) provision and maintenance of 

10 trade, contract, or instrument information; 

11 (iv) the management of risks and ac12 tivities associated with continuing financial 

13 transactions; 

14 (v) transmittal and storage of pay15 ment instructions; 

16 (vi) the movement of funds; 

17 (vii) the final settlement of financial 

18 transactions; and 

19 (viii) other similar functions that the 

20 Council may determine. 

21 (7) SUPERVISORY AGENCY.— 

22 (A) IN GENERAL.—The term ‘‘Supervisory 

23 Agency’’ means the Federal agency that has 

24 primary jurisdiction over a designated financial 


sroberts on DSKH9S0YB1PROD with BILLS
901 

•S 3217 AMDT 3739 

1 market utility under Federal banking, securi2 ties, or commodity futures laws, as follows: 

3 (i) The Securities and Exchange Com4 mission, with respect to a designated fi5 nancial market utility that is a clearing 

6 agency registered with the Securities and 

7 Exchange Commission. 

8 (ii) The Commodity Futures Trading 

9 Commission, with respect to a designated 

10 financial market utility that is a deriva11 tives clearing organization registered with 

12 the Commodity Futures Trading Commis13 sion. 

14 (iii) The appropriate Federal banking 

15 agency, with respect to a designated finan16 cial market utility that is an institution de17 scribed in section 3(q) of the Federal De18 posit Insurance Act. 

19 (iv) The Board of Governors, with re20 spect to a designated financial market util21 ity that is otherwise not subject to the ju22 risdiction of any agency listed in clauses 

23 (i), (ii), and (iii). 

24 (B) MULTIPLE AGENCY JURISDICTION.—If 

25 a designated financial market utility is subject 


sroberts on DSKH9S0YB1PROD with BILLS
902 

•S 3217 AMDT 3739 

1 to the jurisdictional supervision of more than 1 

2 agency listed in subparagraph (A), then such 

3 agencies should agree on 1 agency to act as the 

4 Supervisory Agency, and if such agencies can5 not agree on which agency has primary jurisdic6 tion, the Council shall decide which agency is 

7 the Supervisory Agency for purposes of this 

8 title. 

9 (8) SYSTEMICALLY IMPORTANT AND SYSTEMIC

10 IMPORTANCE.—The terms ‘‘systemically important’’ 

11 and ‘‘systemic importance’’ mean a situation where 

12 the failure of or a disruption to the functioning of 

13 a financial market utility or the conduct of a pay14 ment, clearing, or settlement activity could create, or 

15 increase, the risk of significant liquidity or credit 

16 problems spreading among financial institutions or 

17 markets and thereby threaten the stability of the fi18 nancial system. 

19 SEC. 804. DESIGNATION OF SYSTEMIC IMPORTANCE. 

20 (a) DESIGNATION.— 

21 (1) FINANCIAL STABILITY OVERSIGHT COUN22 CIL.—The Council, on a nondelegable basis and by 

a vote of not fewer than 2 23 ⁄3 of members then serving, 

24 including an affirmative vote by the Chairperson of 

25 the Council, shall designate those financial market 


sroberts on DSKH9S0YB1PROD with BILLS
903 

•S 3217 AMDT 3739 

1 utilities or payment, clearing, or settlement activities 

2 that the Council determines are, or are likely to be3 come, systemically important. 

4 (2) CONSIDERATIONS.—In determining whether 

5 a financial market utility or payment, clearing, or 

6 settlement activity is, or is likely to become, system7 ically important, the Council shall take into consid8 eration the following: 

9 (A) The aggregate monetary value of 

10 transactions processed by the financial market 

11 utility or carried out through the payment, 

12 clearing, or settlement activity. 

13 (B) The aggregate exposure of the finan14 cial market utility or a financial institution en15 gaged in payment, clearing, or settlement activi16 ties to its counterparties. 

17 (C) The relationship, interdependencies, or 

18 other interactions of the financial market utility 

19 or payment, clearing, or settlement activity with 

20 other financial market utilities or payment, 

21 clearing, or settlement activities. 

22 (D) The effect that the failure of or a dis23 ruption to the financial market utility or pay24 ment, clearing, or settlement activity would 


sroberts on DSKH9S0YB1PROD with BILLS
904 

•S 3217 AMDT 3739 

1 have on critical markets, financial institutions, 

2 or the broader financial system. 

3 (E) Any other factors that the Council 

4 deems appropriate. 

5 (b) RESCISSION OF DESIGNATION.— 

6 (1) IN GENERAL.—The Council, on a nondelegable basis and by a vote of not fewer than 2 7 ⁄3 of 

8 members then serving, including an affirmative vote 

9 by the Chairperson of the Council, shall rescind a 

10 designation of systemic importance for a designated 

11 financial market utility or designated activity if the 

12 Council determines that the utility or activity no 

13 longer meets the standards for systemic importance. 

14 (2) EFFECT OF RESCISSION.—Upon rescission, 

15 the financial market utility or financial institutions 

16 conducting the activity will no longer be subject to 

17 the provisions of this title or any rules or orders pre18 scribed by the Council under this title. 

19 (c) CONSULTATION AND NOTICE AND OPPORTUNITY

20 FOR HEARING.— 

21 (1) CONSULTATION.—Before making any deter22 mination under subsection (a) or (b), the Council 

23 shall consult with the relevant Supervisory Agency 

24 and the Board of Governors. 


sroberts on DSKH9S0YB1PROD with BILLS
905 

•S 3217 AMDT 3739 

1 (2) ADVANCE NOTICE AND OPPORTUNITY FOR

2 HEARING.— 

3 (A) IN GENERAL.—Before making any de4 termination under subsection (a) or (b), the 

5 Council shall provide the financial market util6 ity or, in the case of a payment, clearing, or 

7 settlement activity, financial institutions with 

8 advance notice of the proposed determination of 

9 the Council. 

10 (B) NOTICE IN FEDERAL REGISTER.—The 

11 Council shall provide such advance notice to fi12 nancial institutions by publishing a notice in 

13 the Federal Register. 

14 (C) REQUESTS FOR HEARING.—Within 30 

15 days from the date of any notice of the pro16 posed determination of the Council, the finan17 cial market utility or, in the case of a payment, 

18 clearing, or settlement activity, a financial insti19 tution engaged in the designated activity may 

20 request, in writing, an opportunity for a written 

21 or oral hearing before the Council to dem22 onstrate that the proposed designation or re23 scission of designation is not supported by sub24 stantial evidence. 


sroberts on DSKH9S0YB1PROD with BILLS
906 

•S 3217 AMDT 3739 

1 (D) WRITTEN SUBMISSIONS.—Upon re2 ceipt of a timely request, the Council shall fix 

3 a time, not more than 30 days after receipt of 

4 the request, unless extended at the request of 

5 the financial market utility or financial institu6 tion, and place at which the financial market 

7 utility or financial institution may appear, per8 sonally or through counsel, to submit written 

9 materials, or, at the sole discretion of the Coun10 cil, oral testimony or oral argument. 

11 (3) EMERGENCY EXCEPTION.— 

12 (A) WAIVER OR MODIFICATION BY VOTE

13 OF THE COUNCIL.—The Council may waive or 

14 modify the requirements of paragraph (2) if the 

15 Council determines, by an affirmative vote of 

not less than 2 16 ⁄3 of all members then serving, 

17 including an affirmative vote by the Chair18 person of the Council, that the waiver or modi19 fication is necessary to prevent or mitigate an 

20 immediate threat to the financial system posed 

21 by the financial market utility or the payment, 

22 clearing, or settlement activity. 

23 (B) NOTICE OF WAIVER OR MODIFICA24 TION.—The Council shall provide notice of the 

25 waiver or modification to the financial market 


sroberts on DSKH9S0YB1PROD with BILLS
907 

•S 3217 AMDT 3739 

1 utility concerned or, in the case of a payment, 

2 clearing, or settlement activity, to financial in3 stitutions, as soon as practicable, which shall be 

4 no later than 24 hours after the waiver or 

5 modification in the case of a financial market 

6 utility and 3 business days in the case of finan7 cial institutions. The Council shall provide the 

8 notice to financial institutions by posting a no9 tice on the website of the Council and by pub10 lishing a notice in the Federal Register. 

11 (d) NOTIFICATION OF FINAL DETERMINATION.— 

12 (1) AFTER HEARING.—Within 60 days of any 

13 hearing under subsection (c)(3), the Council shall 

14 notify the financial market utility or financial insti15 tutions of the final determination of the Council in 

16 writing, which shall include findings of fact upon 

17 which the determination of the Council is based. 

18 (2) WHEN NO HEARING REQUESTED.—If the 

19 Council does not receive a timely request for a hear20 ing under subsection (c)(3), the Council shall notify 

21 the financial market utility or financial institutions 

22 of the final determination of the Council in writing 

23 not later than 30 days after the expiration of the 

24 date by which a financial market utility or a finan25 cial institution could have requested a hearing. All 


sroberts on DSKH9S0YB1PROD with BILLS
908 

•S 3217 AMDT 3739 

1 notices to financial institutions under this subsection 

2 shall be published in the Federal Register. 

3 (e) EXTENSION OF TIME PERIODS.—The Council 

4 may extend the time periods established in subsections (c) 

5 and (d) as the Council determines to be necessary or ap6 propriate. 

7 SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT FI8 NANCIAL MARKET UTILITIES AND PAYMENT, 

9 CLEARING, OR SETTLEMENT ACTIVITIES. 

10 (a) AUTHORITY TO PRESCRIBE STANDARDS.—The 

11 Board, by rule or order, and in consultation with the 

12 Council and the Supervisory Agencies, shall prescribe risk 

13 management standards, taking into consideration relevant 

14 international standards and existing prudential require15 ments, governing— 

16 (1) the operations related to the payment, clear17 ing, and settlement activities of designated financial 

18 market utilities; and 

19 (2) the conduct of designated activities by fi20 nancial institutions. 

21 (b) OBJECTIVES AND PRINCIPLES.—The objectives 

22 and principles for the risk management standards pre23 scribed under subsection (a) shall be to— 

24 (1) promote robust risk management; 

25 (2) promote safety and soundness; 


sroberts on DSKH9S0YB1PROD with BILLS
909 

•S 3217 AMDT 3739 

1 (3) reduce systemic risks; and 

2 (4) support the stability of the broader financial 

3 system. 

4 (c) SCOPE.—The standards prescribed under sub5 section (a) may address areas such as— 

6 (1) risk management policies and procedures; 

7 (2) margin and collateral requirements; 

8 (3) participant or counterparty default policies 

9 and procedures; 

10 (4) the ability to complete timely clearing and 

11 settlement of financial transactions; 

12 (5) capital and financial resource requirements 

13 for designated financial market utilities; and 

14 (6) other areas that the Board determines are 

15 necessary to achieve the objectives and principles in 

16 subsection (b). 

17 (d) THRESHOLD LEVEL.—The standards prescribed 

18 under subsection (a) governing the conduct of designated 

19 activities by financial institutions shall, where appropriate, 

20 establish a threshold as to the level or significance of en21 gagement in the activity at which a financial institution 

22 will become subject to the standards with respect to that 

23 activity. 

24 (e) COMPLIANCE REQUIRED.—Designated financial 

25 market utilities and financial institutions subject to the 


sroberts on DSKH9S0YB1PROD with BILLS
910 

•S 3217 AMDT 3739 

1 standards prescribed by the Board of Governors for a des2 ignated activity shall conduct their operations in compli3 ance with the applicable risk management standards pre4 scribed by the Board of Governors. 

5 SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MAR6 KET UTILITIES. 

7 (a) FEDERAL RESERVE ACCOUNT AND SERVICES.— 

8 The Board of Governors may authorize a Federal Reserve 

9 Bank to establish and maintain an account for a des10 ignated financial market utility and provide services to the 

11 designated financial market utility that the Federal Re12 serve Bank is authorized under the Federal Reserve Act 

13 to provide to a depository institution, subject to any appli14 cable rules, orders, standards, or guidelines prescribed by 

15 the Board of Governors. 

16 (b) ADVANCES.—The Board of Governors may au17 thorize a Federal Reserve Bank to provide to a designated 

18 financial market utility the same discount and borrowing 

19 privileges as the Federal Reserve Bank may provide to a 

20 depository institution under the Federal Reserve Act, sub21 ject to any applicable rules, orders, standards, or guide22 lines prescribed by the Board of Governors. 

23 (c) EARNINGS ON FEDERAL RESERVE BALANCES.— 

24 A Federal Reserve Bank may pay earnings on balances 

25 maintained by or on behalf of a designated financial marVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00910 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
911 

•S 3217 AMDT 3739 

1 ket utility in the same manner and to the same extent 

2 as the Federal Reserve Bank may pay earnings to a depos3 itory institution under the Federal Reserve Act, subject 

4 to any applicable rules, orders, standards, or guidelines 

5 prescribed by the Board of Governors. 

6 (d) RESERVE REQUIREMENTS.—The Board of Gov7 ernors may exempt a designated financial market utility 

8 from, or modify any, reserve requirements under section 

9 19 of the Federal Reserve Act (12 U.S.C. 461) applicable 

10 to a designated financial market utility. 

11 (e) CHANGES TO RULES, PROCEDURES, OR OPER12 ATIONS.— 

13 (1) ADVANCE NOTICE.— 

14 (A) ADVANCE NOTICE OF PROPOSED

15 CHANGES REQUIRED.—A designated financial 

16 market utility shall provide notice 60 days in 

17 advance advance notice to its Supervisory Agen18 cy and the Board of Governors of any proposed 

19 change to its rules, procedures, or operations 

20 that could, as defined in rules of the Board of 

21 Governors, materially affect, the nature or level 

22 of risks presented by the designated financial 

23 market utility. 

24 (B) TERMS AND STANDARDS PRESCRIBED

25 BY THE BOARD OF GOVERNORS.—The Board of 


sroberts on DSKH9S0YB1PROD with BILLS
912 

•S 3217 AMDT 3739 

1 Governors shall prescribe regulations that de2 fine and describe the standards for determining 

3 when notice is required to be provided under 

4 subparagraph (A). 

5 (C) CONTENTS OF NOTICE.—The notice of 

6 a proposed change shall describe— 

7 (i) the nature of the change and ex8 pected effects on risks to the designated fi9 nancial market utility, its participants, or 

10 the market; and 

11 (ii) how the designated financial mar12 ket utility plans to manage any identified 

13 risks. 

14 (D) ADDITIONAL INFORMATION.—The Su15 pervisory Agency or the Board of Governors 

16 may require a designated financial market util17 ity to provide any information necessary to as18 sess the effect the proposed change would have 

19 on the nature or level of risks associated with 

20 the designated financial market utility’s pay21 ment, clearing, or settlement activities and the 

22 sufficiency of any proposed risk management 

23 techniques. 

24 (E) NOTICE OF OBJECTION.—The Super25 visory Agency or the Board of Governors shall 


sroberts on DSKH9S0YB1PROD with BILLS
913 

•S 3217 AMDT 3739 

1 notify the designated financial market utility of 

2 any objection regarding the proposed change 

3 within 60 days from the later of— 

4 (i) the date that the notice of the pro5 posed change is received; or 

6 (ii) the date any further information 

7 requested for consideration of the notice is 

8 received. 

9 (F) CHANGE NOT ALLOWED IF OBJEC10 TION.—A designated financial market utility 

11 shall not implement a change to which the 

12 Board of Governors or the Supervisory Agency 

13 has an objection. 

14 (G) CHANGE ALLOWED IF NO OBJECTION

15 WITHIN 60 DAYS.—A designated financial mar16 ket utility may implement a change if it has not 

17 received an objection to the proposed change 

18 within 60 days of the later of— 

19 (i) the date that the Supervisory 

20 Agency or the Board of Governors receives 

21 the notice of proposed change; or 

22 (ii) the date the Supervisory Agency 

23 or the Board of Governors receives any 

24 further information it requests for consid25 eration of the notice. 


sroberts on DSKH9S0YB1PROD with BILLS
914 

•S 3217 AMDT 3739 

1 (H) REVIEW EXTENSION FOR NOVEL OR

2 COMPLEX ISSUES.—The Supervisory Agency or 

3 the Board of Governors may, during the 60-day 

4 review period, extend the review period for an 

5 additional 60 days for proposed changes that 

6 raise novel or complex issues, subject to the Su7 pervisory Agency or the Board of Governors 

8 providing the designated financial market utility 

9 with prompt written notice of the extension. 

10 Any extension under this subparagraph will ex11 tend the time periods under subparagraphs (D) 

12 and (F). 

13 (I) CHANGE ALLOWED EARLIER IF NOTI14 FIED OF NO OBJECTION.—A designated finan15 cial market utility may implement a change in 

16 less than 60 days from the date of receipt of 

17 the notice of proposed change by the Super18 visory Agency or the Board of Governors, or the 

19 date the Supervisory Agency or the Board of 

20 Governors receives any further information it 

21 requested, if the Supervisory Agency or the 

22 Board of Governors notifies the designated fi23 nancial market utility in writing that it does 

24 not object to the proposed change and author25 izes the designated financial market utility to 


sroberts on DSKH9S0YB1PROD with BILLS
915 

•S 3217 AMDT 3739 

1 implement the change on an earlier date, sub2 ject to any conditions imposed by the Super3 visory Agency or the Board of Governors. 

4 (2) EMERGENCY CHANGES.— 

5 (A) IN GENERAL.—A designated financial 

6 market utility may implement a change that 

7 would otherwise require advance notice under 

8 this subsection if it determines that— 

9 (i) an emergency exists; and 

10 (ii) immediate implementation of the 

11 change is necessary for the designated fi12 nancial market utility to continue to pro13 vide its services in a safe and sound man14 ner. 

15 (B) NOTICE REQUIRED WITHIN 24

16 HOURS.—The designated financial market util17 ity shall provide notice of any such emergency 

18 change to its Supervisory Agency and the 

19 Board of Governors, as soon as practicable, 

20 which shall be no later than 24 hours after im21 plementation of the change. 

22 (C) CONTENTS OF EMERGENCY NOTICE.— 

23 In addition to the information required for 

24 changes requiring advance notice, the notice of 

25 an emergency change shall describe— 


sroberts on DSKH9S0YB1PROD with BILLS
916 

•S 3217 AMDT 3739 

1 (i) the nature of the emergency; and 

2 (ii) the reason the change was nec3 essary for the designated financial market 

4 utility to continue to provide its services in 

5 a safe and sound manner. 

6 (D) MODIFICATION OR RESCISSION OF

7 CHANGE MAY BE REQUIRED.—The Supervisory 

8 Agency or the Board of Governors may require 

9 modification or rescission of the change if it 

10 finds that the change is not consistent with the 

11 purposes of this Act or any rules, orders, or 

12 standards prescribed by the Board of Governors 

13 hereunder. 

14 (3) COPYING THE BOARD OF GOVERNORS.—The 

15 Supervisory Agency shall provide the Board of Gov16 ernors concurrently with a complete copy of any no17 tice, request, or other information it issues, submits, 

18 or receives under this subsection. 

19 (4) CONSULTATION WITH BOARD OF GOV20 ERNORS.—Before taking any action on, or com21 pleting its review of, a change proposed by a des22 ignated financial market utility, the Supervisory 

23 Agency shall consult with the Board of Governors. 


sroberts on DSKH9S0YB1PROD with BILLS
917 

•S 3217 AMDT 3739 

1 SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS 

2 AGAINST DESIGNATED FINANCIAL MARKET 

3 UTILITIES. 

4 (a) EXAMINATION.—Notwithstanding any other pro5 vision of law and subject to subsection (d), the Supervisory 

6 Agency shall conduct examinations of a designated finan7 cial market utility at least once annually in order to deter8 mine the following: 

9 (1) The nature of the operations of, and the 

10 risks borne by, the designated financial market util11 ity. 

12 (2) The financial and operational risks pre13 sented by the designated financial market utility to 

14 financial institutions, critical markets, or the broad15 er financial system. 

16 (3) The resources and capabilities of the des17 ignated financial market utility to monitor and con18 trol such risks. 

19 (4) The safety and soundness of the designated 

20 financial market utility. 

21 (5) The designated financial market utility’s 

22 compliance with— 

23 (A) this title; and 

24 (B) the rules and orders prescribed by the 

25 Board of Governors under this title. 


sroberts on DSKH9S0YB1PROD with BILLS
918 

•S 3217 AMDT 3739 

1 (b) SERVICE PROVIDERS.—Whenever a service inte2 gral to the operation of a designated financial market util3 ity is performed for the designated financial market utility 

4 by another entity, whether an affiliate or non-affiliate and 

5 whether on or off the premises of the designated financial 

6 market utility, the Supervisory Agency may examine 

7 whether the provision of that service is in compliance with 

8 applicable law, rules, orders, and standards to the same 

9 extent as if the designated financial market utility were 

10 performing the service on its own premises. 

11 (c) ENFORCEMENT.—For purposes of enforcing the 

12 provisions of this section, a designated financial market 

13 utility shall be subject to, and the appropriate Supervisory 

14 Agency shall have authority under the provisions of sub15 sections (b) through (n) of section 8 of the Federal De16 posit Insurance Act (12 U.S.C. 1818) in the same manner 

17 and to the same extent as if the designated financial mar18 ket utility was an insured depository institution and the 

19 Supervisory Agency was the appropriate Federal banking 

20 agency for such insured depository institution. 

21 (d) BOARD OF GOVERNORS INVOLVEMENT IN EXAMI22 NATIONS.— 

23 (1) BOARD OF GOVERNORS CONSULTATION ON

24 EXAMINATION PLANNING.—The Supervisory Agency 

25 shall consult with the Board of Governors regarding 


sroberts on DSKH9S0YB1PROD with BILLS
919 

•S 3217 AMDT 3739 

1 the scope and methodology of any examination con2 ducted under subsections (a) and (b). 

3 (2) BOARD OF GOVERNORS PARTICIPATION IN

4 EXAMINATION.—The Board of Governors may, in its 

5 discretion, participate in any examination led by a 

6 Supervisory Agency and conducted under sub7 sections (a) and (b). 

8 (e) BOARD OF GOVERNORS ENFORCEMENT REC9 OMMENDATIONS.— 

10 (1) RECOMMENDATION.—The Board of Gov11 ernors may at any time recommend to the Super12 visory Agency that such agency take enforcement ac13 tion against a designated financial market utility. 

14 Any such recommendation for enforcement action 

15 shall provide a detailed analysis supporting the rec16 ommendation of the Board of Governors. 

17 (2) CONSIDERATION.—The Supervisory Agency 

18 shall consider the recommendation of the Board of 

19 Governors and submit a response to the Board of 

20 Governors within 60 days. 

21 (3) MEDIATION.—If the Supervisory Agency re22 jects, in whole or in part, the recommendation of the 

23 Board of Governors, the Board of Governors may 

24 dispute the matter by referring the recommendation 


sroberts on DSKH9S0YB1PROD with BILLS
920 

•S 3217 AMDT 3739 

1 to the Council, which shall attempt to resolve the 

2 dispute. 

3 (4) ENFORCEMENT ACTION.—If the Council is 

4 unable to resolve the dispute under paragraph (3) 

5 within 30 days from the date of referral, the Board 

6 of Governors may, upon a vote of its members— 

7 (A) exercise the enforcement authority ref8 erenced in subsection (c) as if it were the Su9 pervisory Agency; and 

10 (B) take enforcement action against the 

11 designated financial market utility. 

12 (f) EMERGENCY ENFORCEMENT ACTIONS BY THE

13 BOARD OF GOVERNORS.— 

14 (1) IMMINENT RISK OF SUBSTANTIAL HARM.— 

15 The Board of Governors may, after consulting with 

16 the Council and the Supervisory Agency, take en17 forcement action against a designated financial mar18 ket utility if the Board of Governors has reasonable 

19 cause to believe that— 

20 (A) either— 

21 (i) an action engaged in, or con22 templated by, a designated financial mar23 ket utility (including any change proposed 

24 by the designated financial market utility 

25 to its rules, procedures, or operations that 


sroberts on DSKH9S0YB1PROD with BILLS
921 

•S 3217 AMDT 3739 

1 would otherwise be subject to section 

2 806(e)) poses an imminent risk of substan3 tial harm to financial institutions, critical 

4 markets, or the broader financial system; 

5 or 

6 (ii) the condition of a designated fi7 nancial market utility poses an imminent 

8 risk of substantial harm to financial insti9 tutions, critical markets, or the broader fi10 nancial system; and 

11 (B) the imminent risk of substantial harm 

12 precludes the Board of Governors’ use of the 

13 procedures in subsection (e). 

14 (2) ENFORCEMENT AUTHORITY.—For purposes 

15 of taking enforcement action under paragraph (1), a 

16 designated financial market utility shall be subject 

17 to, and the Board of Governors shall have authority 

18 under the provisions of subsections (b) through (n) 

19 of section 8 of the Federal Deposit Insurance Act 

20 (12 U.S.C. 1818) in the same manner and to the 

21 same extent as if the designated financial market 

22 utility was an insured depository institution and the 

23 Board of Governors was the appropriate Federal 

24 banking agency for such insured depository institu25 tion. 


sroberts on DSKH9S0YB1PROD with BILLS
922 

•S 3217 AMDT 3739 

1 (3) PROMPT NOTICE TO SUPERVISORY AGENCY

2 OF ENFORCEMENT ACTION.—Within 24 hours of 

3 taking an enforcement action under this subsection, 

4 the Board of Governors shall provide written notice 

5 to the designated financial market utility’s Super6 visory Agency containing a detailed analysis of the 

7 action of the Board of Governors, with supporting 

8 documentation included. 

9 SEC. 808. EXAMINATION OF AND ENFORCEMENT ACTIONS 

10 AGAINST FINANCIAL INSTITUTIONS SUBJECT 

11 TO STANDARDS FOR DESIGNATED ACTIVI12 TIES. 

13 (a) EXAMINATION.—The appropriate financial regu14 lator is authorized to examine a financial institution sub15 ject to the standards prescribed by the Board of Governors 

16 for a designated activity in order to determine the fol17 lowing: 

18 (1) The nature and scope of the designated ac19 tivities engaged in by the financial institution. 

20 (2) The financial and operational risks the des21 ignated activities engaged in by the financial institu22 tion may pose to the safety and soundness of the fi23 nancial institution. 

24 (3) The financial and operational risks the des25 ignated activities engaged in by the financial instituVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00922 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
923 

•S 3217 AMDT 3739 

1 tion may pose to other financial institutions, critical 

2 markets, or the broader financial system. 

3 (4) The resources available to and the capabili4 ties of the financial institution to monitor and con5 trol the risks described in paragraphs (2) and (3). 

6 (5) The financial institution’s compliance with 

7 this title and the rules and orders prescribed by the 

8 Board of Governors under this title. 

9 (b) ENFORCEMENT.—For purposes of enforcing the 

10 provisions of this section, and the rules and orders pre11 scribed by the Board of Governors under this section, a 

12 financial institution subject to the standards prescribed by 

13 the Board of Governors for a designated activity shall be 

14 subject to, and the appropriate financial regulator shall 

15 have authority under the provisions of subsections (b) 

16 through (n) of section 8 of the Federal Deposit Insurance 

17 Act (12 U.S.C. 1818) in the same manner and to the same 

18 extent as if the financial institution was an insured deposi19 tory institution and the appropriate financial regulator 

20 was the appropriate Federal banking agency for such in21 sured depository institution. 

22 (c) TECHNICAL ASSISTANCE.—The Board of Gov23 ernors shall consult with and provide such technical assist24 ance as may be required by the appropriate financial regu25 lators to ensure that the rules and orders prescribed by 


sroberts on DSKH9S0YB1PROD with BILLS
924 

•S 3217 AMDT 3739 

1 the Board of Governors under this title are interpreted 

2 and applied in as consistent and uniform a manner as 

3 practicable. 

4 (d) DELEGATION.— 

5 (1) EXAMINATION.— 

6 (A) REQUEST TO BOARD OF GOV7 ERNORS.—The appropriate financial regulator 

8 may request the Board of Governors to conduct 

9 or participate in an examination of a financial 

10 institution subject to the standards prescribed 

11 by the Board of Governors for a designated ac12 tivity in order to assess the compliance of such 

13 financial institution with— 

14 (i) this title; or 

15 (ii) the rules or orders prescribed by 

16 the Board of Governors under this title. 

17 (B) EXAMINATION BY BOARD OF GOV18 ERNORS.—Upon receipt of an appropriate writ19 ten request, the Board of Governors will con20 duct the examination under such terms and 

21 conditions to which the Board of Governors and 

22 the appropriate financial regulator mutually 

23 agree. 

24 (2) ENFORCEMENT.— 


sroberts on DSKH9S0YB1PROD with BILLS
925 

•S 3217 AMDT 3739 

1 (A) REQUEST TO BOARD OF GOV2 ERNORS.—The appropriate financial regulator 

3 may request the Board of Governors to enforce 

4 this title or the rules or orders prescribed by 

5 the Board of Governors under this title against 

6 a financial institution that is subject to the 

7 standards prescribed by the Board of Governors 

8 for a designated activity. 

9 (B) ENFORCEMENT BY BOARD OF GOV10 ERNORS.—Upon receipt of an appropriate writ11 ten request, the Board of Governors shall deter12 mine whether an enforcement action is war13 ranted, and, if so, it shall enforce compliance 

14 with this title or the rules or orders prescribed 

15 by the Board of Governors under this title and, 

16 if so, the financial institution shall be subject 

17 to, and the Board of Governors shall have au18 thority under the provisions of subsections (b) 

19 through (n) of section 8 of the Federal Deposit 

20 Insurance Act (12 U.S.C. 1818) in the same 

21 manner and to the same extent as if the finan22 cial institution was an insured depository insti23 tution and the Board of Governors was the ap24 propriate Federal banking agency for such in25 sured depository institution 


sroberts on DSKH9S0YB1PROD with BILLS
926 

•S 3217 AMDT 3739 

1 (e) BACK-UP AUTHORITY OF THE BOARD OF GOV2 ERNORS.— 

3 (1) EXAMINATION AND ENFORCEMENT.—Not4 withstanding any other provision of law, the Board 

5 of Governors may— 

6 (A) conduct an examination of the type de7 scribed in subsection (a) of any financial insti8 tution that is subject to the standards pre9 scribed by the Board of Governors for a des10 ignated activity; and 

11 (B) enforce the provisions of this title or 

12 any rules or orders prescribed by the Board of 

13 Governors under this title against any financial 

14 institution that is subject to the standards pre15 scribed by the Board of Governors for a des16 ignated activity. 

17 (2) LIMITATIONS.— 

18 (A) EXAMINATION.—The Board of Gov19 ernors may exercise the authority described in 

20 paragraph (1)(A) only if the Board of Gov21 ernors has— 

22 (i) reasonable cause to believe that a 

23 financial institution is not in compliance 

24 with this title or the rules or orders pre25 scribed by the Board of Governors under 


sroberts on DSKH9S0YB1PROD with BILLS
927 

•S 3217 AMDT 3739 

1 this title with respect to a designated activ2 ity; 

3 (ii) notified, in writing, the appro4 priate financial regulator and the Council 

5 of its belief under clause (i) with sup6 porting documentation included; 

7 (iii) requested the appropriate finan8 cial regulator to conduct a prompt exam9 ination of the financial institution; and 

10 (iv) either— 

11 (I) not been afforded a reason12 able opportunity to participate in an 

13 examination of the financial institu14 tion by the appropriate financial regu15 lator within 30 days after the date of 

16 the Board’s notification under clause 

17 (ii); or 

18 (II) reasonable cause to believe 

19 that the financial institution’s non20 compliance with this title or the rules 

21 or orders prescribed by the Board of 

22 Governors under this title poses a 

23 substantial risk to other financial in24 stitutions, critical markets, or the 

25 broader financial system, subject to 


sroberts on DSKH9S0YB1PROD with BILLS
928 

•S 3217 AMDT 3739 

1 the Board of Governors affording the 

2 appropriate financial regulator a rea3 sonable opportunity to participate in 

4 the examination. 

5 (B) ENFORCEMENT.—The Board of Gov6 ernors may exercise the authority described in 

7 paragraph (1)(B) only if the Board of Gov8 ernors has— 

9 (i) reasonable cause to believe that a 

10 financial institution is not in compliance 

11 with this title or the rules or orders pre12 scribed by the Board of Governors under 

13 this title with respect to a designated activ14 ity; 

15 (ii) notified, in writing, the appro16 priate financial regulator and the Council 

17 of its belief under clause (i) with sup18 porting documentation included and with a 

19 recommendation that the appropriate fi20 nancial regulator take 1 or more specific 

21 enforcement actions against the financial 

22 institution; and 

23 (iii) either— 

24 (I) not been notified, in writing, 

25 by the appropriate financial regulator 


sroberts on DSKH9S0YB1PROD with BILLS
929 

•S 3217 AMDT 3739 

1 of the commencement of an enforce2 ment action recommended by the 

3 Board of Governors against the finan4 cial institution within 60 days from 

5 the date of the notification under 

6 clause (ii); or 

7 (II) reasonable cause to believe 

8 that the financial institution’s non9 compliance with this title or the rules 

10 or orders prescribed by the Board of 

11 Governors under this title poses a 

12 substantial risk to other financial in13 stitutions, critical markets, or the 

14 broader financial system, subject to 

15 the Board of Governors notifying the 

16 appropriate financial regulator of the 

17 Board’s enforcement action. 

18 (3) ENFORCEMENT PROVISIONS.—For purposes 

19 of taking enforcement action under paragraph (1), 

20 the financial institution shall be subject to, and the 

21 Board of Governors shall have authority under the 

22 provisions of subsections (b) through (n) of section 

23 8 of the Federal Deposit Insurance Act (12 U.S.C. 

24 1818) in the same manner and to the same extent 

25 as if the financial institution was an insured deposiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00929 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
930 

•S 3217 AMDT 3739 

1 tory institution and the Board of Governors was the 

2 appropriate Federal banking agency for such insured 

3 depository institution. 

4 SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR 

5 RECORDS. 

6 (a) INFORMATION TO ASSESS SYSTEMIC IMPOR7 TANCE.— 

8 (1) FINANCIAL MARKET UTILITIES.—The Coun9 cil is authorized to require any financial market util10 ity to submit such information as the Council may 

11 require for the sole purpose of assessing whether 

12 that financial market utility is systemically impor13 tant, but only if the Council has reasonable cause to 

14 believe that the financial market utility meets the 

15 standards for systemic importance set forth in sec16 tion 804. 

17 (2) FINANCIAL INSTITUTIONS ENGAGED IN PAY18 MENT, CLEARING, OR SETTLEMENT ACTIVITIES.— 

19 The Council is authorized to require any financial 

20 institution to submit such information as the Coun21 cil may require for the sole purpose of assessing 

22 whether any payment, clearing, or settlement activ23 ity engaged in or supported by a financial institution 

24 is systemically important, but only if the Council has 

25 reasonable cause to believe that the activity meets 


sroberts on DSKH9S0YB1PROD with BILLS
931 

•S 3217 AMDT 3739 

1 the standards for systemic importance set forth in 

2 section 804. 

3 (b) REPORTING AFTER DESIGNATION.— 

4 (1) DESIGNATED FINANCIAL MARKET UTILI5 TIES.—The Board of Governors and the Council 

6 may require a designated financial market utility to 

7 submit reports or data to the Board of Governors 

8 and the Council in such frequency and form as 

9 deemed necessary by the Board of Governors and 

10 the Council in order to assess the safety and sound11 ness of the utility and the systemic risk that the 

12 utility’s operations pose to the financial system. 

13 (2) FINANCIAL INSTITUTIONS SUBJECT TO

14 STANDARDS FOR DESIGNATED ACTIVITIES.—The 

15 Board of Governors and the Council may require 1 

16 or more financial institutions subject to the stand17 ards prescribed by the Board of Governors for a des18 ignated activity to submit, in such frequency and 

19 form as deemed necessary by the Board of Gov20 ernors and the Council, reports and data to the 

21 Board of Governors and the Council solely with re22 spect to the conduct of the designated activity and 

23 solely to assess whether— 

24 (A) the rules, orders, or standards pre25 scribed by the Board of Governors with respect 


sroberts on DSKH9S0YB1PROD with BILLS
932 

•S 3217 AMDT 3739 

1 to the designated activity appropriately address 

2 the risks to the financial system presented by 

3 such activity; and 

4 (B) the financial institutions are in compli5 ance with this title and the rules and orders 

6 prescribed by the Board of Governors under 

7 this title with respect to the designated activity. 

8 (c) COORDINATION WITH APPROPRIATE FEDERAL

9 SUPERVISORY AGENCY.— 

10 (1) ADVANCE COORDINATION.—Before directly 

11 requesting any material information from, or impos12 ing reporting or recordkeeping requirements on, any 

13 financial market utility or any financial institution 

14 engaged in a payment, clearing, or settlement activ15 ity, the Board of Governors and the Council shall co16 ordinate with the Supervisory Agency for a financial 

17 market utility or the appropriate financial regulator 

18 for a financial institution to determine if the infor19 mation is available from or may be obtained by the 

20 agency in the form, format, or detail required by the 

21 Board of Governors and the Council. 

22 (2) SUPERVISORY REPORTS.—Notwithstanding 

23 any other provision of law, the Supervisory Agency, 

24 the appropriate financial regulator, and the Board of 

25 Governors are authorized to disclose to each other 


sroberts on DSKH9S0YB1PROD with BILLS
933 

•S 3217 AMDT 3739 

1 and the Council copies of its examination reports or 

2 similar reports regarding any financial market utility 

3 or any financial institution engaged in payment, 

4 clearing, or settlement activities. 

5 (d) TIMING OF RESPONSE FROM APPROPRIATE FED6 ERAL SUPERVISORY AGENCY.—If the information, report, 

7 records, or data requested by the Board of Governors or 

8 the Council under subsection (c)(1) are not provided in 

9 full by the Supervisory Agency or the appropriate financial 

10 regulator in less than 15 days after the date on which 

11 the material is requested, the Board of Governors or the 

12 Council may request the information or impose record13 keeping or reporting requirements directly on such per14 sons as provided in subsections (a) and (b) with notice 

15 to the agency. 

16 (e) SHARING OF INFORMATION.— 

17 (1) MATERIAL CONCERNS.—Notwithstanding 

18 any other provision of law, the Board of Governors, 

19 the Council, the appropriate financial regulator, and 

20 any Supervisory Agency are authorized to— 

21 (A) promptly notify each other of material 

22 concerns about a designated financial market 

23 utility or any financial institution engaged in 

24 designated activities; and 


sroberts on DSKH9S0YB1PROD with BILLS
934 

•S 3217 AMDT 3739 

1 (B) share appropriate reports, information, 

2 or data relating to such concerns. 

3 (2) OTHER INFORMATION.—Notwithstanding 

4 any other provision of law, the Board of Governors, 

5 the Council, the appropriate financial regulator, or 

6 any Supervisory Agency may, under such terms and 

7 conditions as it deems appropriate, provide confiden8 tial supervisory information and other information 

9 obtained under this title to other persons it deems 

10 appropriate, including the Secretary, State financial 

11 institution supervisory agencies, foreign financial su12 pervisors, foreign central banks, and foreign finance 

13 ministries, subject to reasonable assurances of con14 fidentiality. 

15 (f) PRIVILEGE MAINTAINED.—The Board of Gov16 ernors, the Council, the appropriate financial regulator, 

17 and any Supervisory Agency providing reports or data 

18 under this section shall not be deemed to have waived any 

19 privilege applicable to those reports or data, or any portion 

20 thereof, by providing the reports or data to the other party 

21 or by permitting the reports or data, or any copies thereof, 

22 to be used by the other party. 

23 (g) DISCLOSURE EXEMPTION.—Information obtained 

24 by the Board of Governors or the Council under this sec25 tion and any materials prepared by the Board of GovVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00934 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
935 

•S 3217 AMDT 3739 

1 ernors or the Council regarding its assessment of the sys2 temic importance of financial market utilities or any pay3 ment, clearing, or settlement activities engaged in by fi4 nancial institutions, and in connection with its supervision 

5 of designated financial market utilities and designated ac6 tivities, shall be confidential supervisory information ex7 empt from disclosure under section 552 of title 5, United 

8 States Code. For purposes of such section 552, this sub9 section shall be considered a statute described in sub10 section (b)(3) of such section 552. 

11 SEC. 810. RULEMAKING. 

12 The Board of Governors and the Council are author13 ized to prescribe such rules and issue such orders as may 

14 be necessary to administer and carry out the authorities 

15 and duties granted to the Board of Governors or the 

16 Council, respectively, and prevent evasions thereof. 

17 SEC. 811. OTHER AUTHORITY. 

18 Unless otherwise provided by its terms, this title does 

19 not divest any appropriate financial regulator, any Super20 visory Agency, or any other Federal or State agency, of 

21 any authority derived from any other applicable law, ex22 cept that any standards prescribed by the Board of Gov23 ernors under section 805 shall supersede any less strin24 gent requirements established under other authority to the 

25 extent of any conflict. 


sroberts on DSKH9S0YB1PROD with BILLS
936 

•S 3217 AMDT 3739 

1 SEC. 812. EFFECTIVE DATE. 

2 This title is effective as of the date of enactment of 

3 this Act. 

4 TITLE IX—INVESTOR PROTEC5 TIONS AND IMPROVEMENTS 

6 TO THE REGULATION OF SE7 CURITIES 

8 Subtitle A—Increasing Investor 

9 Protection 

10 SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED. 

11 Title I of the Securities Exchange Act of 1934 (15 

12 U.S.C. 78a et seq.) is amended by adding at the end the 

13 following: 

14 ‘‘SEC. 39. INVESTOR ADVISORY COMMITTEE. 

15 ‘‘(a) ESTABLISHMENT AND PURPOSE.— 

16 ‘‘(1) ESTABLISHMENT.—There is established 

17 within the Commission the Investor Advisory Com18 mittee (referred to in this section as the ‘Com19 mittee’). 

20 ‘‘(2) PURPOSE.—The Committee shall— 

21 ‘‘(A) advise and consult with the Commis22 sion on— 

23 ‘‘(i) regulatory priorities of the Com24 mission; 

25 ‘‘(ii) issues relating to the regulation 

26 of securities products, trading strategies, 


sroberts on DSKH9S0YB1PROD with BILLS
937 

•S 3217 AMDT 3739 

1 and fee structures, and the effectiveness of 

2 disclosure; 

3 ‘‘(iii) initiatives to protect investor in4 terest; and 

5 ‘‘(iv) initiatives to promote investor 

6 confidence and the integrity of the securi7 ties marketplace; and 

8 ‘‘(B) submit to the Commission such find9 ings and recommendations as the Committee 

10 determines are appropriate, including rec11 ommendations for proposed legislative changes. 

12 ‘‘(b) MEMBERSHIP.— 

13 ‘‘(1) IN GENERAL.—The members of the Com14 mittee shall be— 

15 ‘‘(A) the Investor Advocate; 

16 ‘‘(B) a representative of State securities 

17 commissions; 

18 ‘‘(C) a representative of the interests of 

19 senior citizens; and 

20 ‘‘(D) not fewer than 10, and not more 

21 than 20, members appointed by the Commis22 sion, from among individuals who— 

23 ‘‘(i) represent the interests of indi24 vidual equity and debt investors, including 

25 investors in mutual funds; 


sroberts on DSKH9S0YB1PROD with BILLS
938 

•S 3217 AMDT 3739 

1 ‘‘(ii) represent the interests of institu2 tional investors, including the interests of 

3 pension funds and registered investment 

4 companies; 

5 ‘‘(iii) are knowledgeable about invest6 ment issues and decisions; and 

7 ‘‘(iv) have reputations of integrity. 

8 ‘‘(2) TERM.—Each member of the Committee 

9 appointed under paragraph (1)(B) shall serve for a 

10 term of 4 years. 

11 ‘‘(3) MEMBERS NOT COMMISSION EMPLOY12 EES.—Members appointed under paragraph (1)(B) 

13 shall not be deemed to be employees or agents of the 

14 Commission solely because of membership on the 

15 Committee. 

16 ‘‘(c) CHAIRMAN; VICE CHAIRMAN; SECRETARY; AS17 SISTANT SECRETARY.— 

18 ‘‘(1) IN GENERAL.—The members of the Com19 mittee shall elect, from among the members of the 

20 Committee— 

21 ‘‘(A) a chairman, who may not be em22 ployed by an issuer; 

23 ‘‘(B) a vice chairman, who may not be em24 ployed by an issuer; 

25 ‘‘(C) a secretary; and 


sroberts on DSKH9S0YB1PROD with BILLS
939 

•S 3217 AMDT 3739 

1 ‘‘(D) an assistant secretary. 

2 ‘‘(2) TERM.—Each member elected under para3 graph (1) shall serve for a term of 3 years in the 

4 capacity for which the member was elected under 

5 paragraph (1). 

6 ‘‘(d) MEETINGS.— 

7 ‘‘(1) FREQUENCY OF MEETINGS.—The Com8 mittee shall meet— 

9 ‘‘(A) not less frequently than twice annu10 ally, at the call of the chairman of the Com11 mittee; and 

12 ‘‘(B) from time to time, at the call of the 

13 Commission. 

14 ‘‘(2) NOTICE.—The chairman of the Committee 

15 shall give the members of the Committee written no16 tice of each meeting, not later than 2 weeks before 

17 the date of the meeting. 

18 ‘‘(e) COMPENSATION AND TRAVEL EXPENSES.— 

19 Each member of the Committee who is not a full-time em20 ployee of the United States shall— 

21 ‘‘(1) be compensated at a rate not to exceed the 

22 daily equivalent of the annual rate of basic pay in 

23 effect for a position at level V of the Executive 

24 Schedule under section 5316 of title 5, United 

25 States Code, for each day during which the member 


sroberts on DSKH9S0YB1PROD with BILLS
940 

•S 3217 AMDT 3739 

1 is engaged in the actual performance of the duties 

2 of the Committee; and 

3 ‘‘(2) while away from the home or regular place 

4 of business of the member in the performance of 

5 services for the Committee, be allowed travel ex6 penses, including per diem in lieu of subsistence, in 

7 the same manner as persons employed intermittently 

8 in the Government service are allowed expenses 

9 under section 5703(b) of title 5, United States Code. 

10 ‘‘(f) STAFF.—The Commission shall make available 

11 to the Committee such staff as the chairman of the Com12 mittee determines are necessary to carry out this section. 

13 ‘‘(g) REVIEW BY COMMISSION.—The Commission 

14 shall— 

15 ‘‘(1) review the findings and recommendations 

16 of the Committee; and 

17 ‘‘(2) each time the Committee submits a finding 

18 or recommendation to the Commission, issue a pub19 lic statement— 

20 ‘‘(A) assessing the finding or recommenda21 tion of the Committee; and 

22 ‘‘(B) disclosing the action, if any, the Com23 mission intends to take with respect to the find24 ing or recommendation. 


sroberts on DSKH9S0YB1PROD with BILLS
941 

•S 3217 AMDT 3739 

1 ‘‘(h) COMMITTEE FINDINGS.—Nothing in this section 

2 shall require the Commission to agree to or act upon any 

3 finding or recommendation of the Committee. 

4 ‘‘(i) FEDERAL ADVISORY COMMITTEE ACT.—The 

5 Federal Advisory Committee Act (5 U.S.C. App.) shall not 

6 apply with respect to the Committee and its activities. 

7 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 

8 is authorized to be appropriated to the Commission such 

9 sums as are necessary to carry out this section.’’. 

10 SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMIS11 SION TO ENGAGE IN INVESTOR TESTING. 

12 Section 19 of the Securities Act of 1933 (15 U.S.C. 

13 77s) is amended by adding at the end the following: 

14 ‘‘(e) EVALUATION OF RULES OR PROGRAMS.—For 

15 the purpose of evaluating any rule or program of the Com16 mission issued or carried out under any provision of the 

17 securities laws, as defined in section 3 of the Securities 

18 Exchange Act of 1934 (15 U.S.C. 78c), and the purposes 

19 of considering, proposing, adopting, or engaging in any 

20 such rule or program or developing new rules or programs, 

21 the Commission may— 

22 ‘‘(1) gather information from and communicate 

23 with investors or other members of the public; 


sroberts on DSKH9S0YB1PROD with BILLS
942 

•S 3217 AMDT 3739 

1 ‘‘(2) engage in such temporary investor testing 

2 programs as the Commission determines are in the 

3 public interest or would protect investors; and 

4 ‘‘(3) consult with academics and consultants, as 

5 necessary to carry out this subsection. 

6 ‘‘(f) RULE OF CONSTRUCTION.—For purposes of the 

7 Paperwork Reduction Act (44 U.S.C. 3501 et seq.), any 

8 action taken under subsection (e) shall not be construed 

9 to be a collection of information.’’. 

10 SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGA11 TIONS OF BROKERS, DEALERS, AND INVEST12 MENT ADVISERS. 

13 (a) DEFINITIONS.—In this section— 

14 (1) the term ‘‘FINRA’’ means the Financial In15 dustry Regulatory Authority; and 

16 (2) the term ‘‘retail customer’’ means an indi17 vidual customer of a broker, dealer, investment ad18 viser, person associated with a broker or dealer, or 

19 a person associated with an investment adviser. 

20 (b) IN GENERAL.—The Commission shall conduct a 

21 study to evaluate— 

22 (1) the effectiveness of existing legal or regu23 latory standards of care for brokers, dealers, invest24 ment advisers, persons associated with brokers or 

25 dealers, and persons associated with investment adVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00942 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
943 

•S 3217 AMDT 3739 

1 visers for providing personalized investment advice 

2 and recommendations about securities to retail cus3 tomers imposed by the Commission and FINRA, 

4 and other Federal and State legal or regulatory 

5 standards; and 

6 (2) whether there are legal or regulatory gaps 

7 or overlap in legal or regulatory standards in the 

8 protection of retail customers relating to the stand9 ards of care for brokers, dealers, investment advis10 ers, persons associated with brokers or dealers, and 

11 persons associated with investment advisers for pro12 viding personalized investment advice about securi13 ties to retail customers that should be addressed by 

14 rule or statute. 

15 (c) CONSIDERATIONS.—In conducting the study re16 quired under subsection (b), the Commission shall con17 sider— 

18 (1) the regulatory, examination, and enforce19 ment resources devoted to, and activities of, the 

20 Commission and FINRA to enforce the standards of 

21 care for brokers, dealers, investment advisers, per22 sons associated with brokers or dealers, and persons 

23 associated with investment advisers when providing 

24 personalized investment advice and recommendations 

25 about securities to retail customers, including— 


sroberts on DSKH9S0YB1PROD with BILLS
944 

•S 3217 AMDT 3739 

1 (A) the frequency of examinations of bro2 kers, dealers, and investment advisers; and 

3 (B) the length of time of the examinations; 

4 (2) the substantive differences, compared and 

5 contrasted in detail, in the regulation of brokers, 

6 dealers, and investment advisers, when providing 

7 personalized investment advice and recommendations 

8 about securities to retail customers, including the 

9 differences in the amount of resources devoted to the 

10 regulation and examination of brokers, dealers, and 

11 investment advisers, by the Commission and 

12 FINRA; 

13 (3) the specific instances in which— 

14 (A) the regulation and oversight of invest15 ment advisers provide greater protection to re16 tail customers than the regulation and oversight 

17 of brokers and dealers; and 

18 (B) the regulation and oversight of brokers 

19 and dealers provide greater protection to retail 

20 customers than the regulation and oversight of 

21 investment advisers; 

22 (4) the existing legal or regulatory standards of 

23 State securities regulators and other regulators in24 tended to protect retail customers; 


sroberts on DSKH9S0YB1PROD with BILLS
945 

•S 3217 AMDT 3739 

1 (5) the potential impact on retail customers, in2 cluding the potential impact on access of retail cus3 tomers to the range of products and services offered 

4 by brokers and dealers, of imposing upon brokers, 

5 dealers, and persons associated with brokers or deal6 ers— 

7 (A) the standard of care applied under the 

8 Investment Advisers Act of 1940 (15 U.S.C. 

9 80b–1 et seq.) for providing personalized invest10 ment advice about securities to retail customers 

11 of investment advisers; and 

12 (B) other requirements of the Investment 

13 Advisers Act of 1940 (15 U.S.C. 80b–1 et 

14 seq.); 

15 (6) the potential impact of— 

16 (A) imposing on investment advisers the 

17 standard of care applied by the Commission 

18 and FINRA under the Securities Exchange Act 

19 of 1934 (15 U.S.C. 78a et seq.) for providing 

20 recommendations about securities to retail cus21 tomers of brokers and dealers and other Com22 mission and FINRA requirements applicable to 

23 brokers and dealers; and 

24 (B) authorizing the Commission to des25 ignate 1 or more self-regulatory organizations 


sroberts on DSKH9S0YB1PROD with BILLS
946 

•S 3217 AMDT 3739 

1 to augment the efforts of the Commission to 

2 oversee investment advisers; 

3 (7) the potential impact of eliminating the 

4 broker and dealer exclusion from the definition of 

5 ‘‘investment adviser’’ under section 202(a)(11)(C) of 

6 the Investment Advisers Act of 1940 (15 U.S.C. 

7 80b–2(a)(11)(C)), in terms of— 

8 (A) the potential benefits or harm to retail 

9 customers that could result from such a change, 

10 including any potential impact on access to per11 sonalized investment advice and recommenda12 tions about securities to retail customers or the 

13 availability of such advice and recommenda14 tions; 

15 (B) the number of additional entities and 

16 individuals that would be required to register 

17 under, or become subject to, the Investment 

18 Advisers Act of 1940 (15 U.S.C. 80b–1 et 

19 seq.), and the additional requirements to which 

20 brokers, dealers, and persons associated with 

21 brokers and dealers would become subject, in22 cluding— 

23 (i) any potential additional associated 

24 person licensing, registration, and exam25 ination requirements; and 


sroberts on DSKH9S0YB1PROD with BILLS
947 

•S 3217 AMDT 3739 

1 (ii) the additional costs, if any, to the 

2 additional entities and individuals; and 

3 (C) the impact on Commission resources 

4 to— 

5 (i) conduct examinations of registered 

6 investment advisers and the representatives 

7 of registered investment advisers, including 

8 the impact on the examination cycle; and 

9 (ii) enforce the standard of care and 

10 other applicable requirements imposed 

11 under the Investment Advisers Act of 1940 

12 (15 U.S.C. 80b–1 et seq.); 

13 (8) the ability of investors to understand the 

14 differences in terms of regulatory oversight and ex15 aminations between brokers, dealers, and investment 

16 advisers; 

17 (9) the varying level of services provided by bro18 kers, dealers, investment advisers, persons associated 

19 with brokers or dealers, and persons associated with 

20 investment advisers to retail customers and the vary21 ing scope and terms of retail customer relationships 

22 of brokers, dealers, investment advisers, persons as23 sociated with brokers or dealers, and persons associ24 ated with investment advisers with such retail cus25 tomers; 


sroberts on DSKH9S0YB1PROD with BILLS
948 

•S 3217 AMDT 3739 

1 (10) any potential benefits or harm to retail 

2 customers that could result from any potential 

3 changes in the regulatory requirements or legal 

4 standards affecting brokers, dealers, investment ad5 visers, persons associated with brokers or dealers, 

6 and persons associated with investment advisers re7 lating to their obligations to retail customers, includ8 ing any potential impact on— 

9 (A) protection from fraud; 

10 (B) access to personalized investment ad11 vice, and recommendations about securities to 

12 retail customers; or 

13 (C) the availability of such advice and rec14 ommendations; 

15 (11) the additional costs and expenses to retail 

16 customers and to brokers, dealers, and investment 

17 advisers resulting from potential changes in the reg18 ulatory requirements or legal standards affecting 

19 brokers, dealers, investment advisers, persons associ20 ated with brokers or dealers, and persons associated 

21 with investment advisers relating to their obligations 

22 to retail customers; and 

23 (12) any other consideration that the Commis24 sion deems necessary and appropriate to effectively 

25 execute the study required under subsection (b). 


sroberts on DSKH9S0YB1PROD with BILLS
949 

•S 3217 AMDT 3739 

1 (d) REPORT.— 

2 (1) IN GENERAL.—Not later than 1 year after 

3 the date of enactment of this Act, the Commission 

4 shall submit a report on the study required under 

5 subsection (b) to— 

6 (A) the Committee on Banking, Housing, 

7 and Urban Affairs of the Senate; and 

8 (B) the Committee on Financial Services 

9 of the House of Representatives. 

10 (2) CONTENT REQUIREMENTS.—The report re11 quired under paragraph (1) shall describe the find12 ings, conclusions, and recommendations of the Com13 mission from the study required under subsection 

14 (b), including— 

15 (A) a description of the considerations, 

16 analysis, and public and industry input that the 

17 Commission considered, as required under sub18 section (e), to make such findings, conclusions, 

19 and policy recommendations; and 

20 (B) an analysis of— 

21 (i) whether any identified legal or reg22 ulatory gaps or overlap in legal or regu23 latory standards in the protection of retail 

24 customers relating to the standards of care 

25 for brokers, dealers, investment advisers, 


sroberts on DSKH9S0YB1PROD with BILLS
950 

•S 3217 AMDT 3739 

1 persons associated with brokers or dealers, 

2 and persons associated with investment ad3 visers for providing personalized invest4 ment advice about securities to retail cus5 tomers can be addressed by rule; and 

6 (ii) whether, and the extent to which, 

7 the Commission would require additional 

8 statutory authority to address such gaps or 

9 overlap. 

10 (e) PUBLIC COMMENT.—The Commission shall seek 

11 and consider public input, comments, and data in order 

12 to prepare the report required under subsection (d). 

13 (f) RULEMAKING.— 

14 (1) IN GENERAL.—If the study required under 

15 subsection (b) identifies any gaps or overlap in the 

16 legal or regulatory standards in the protection of re17 tail customers relating to the standards of care for 

18 brokers, dealers, investment advisers, persons associ19 ated with brokers or dealers, and persons associated 

20 with investment advisers for providing personalized 

21 investment advice about securities to such retail cus22 tomers, the Commission, not later than 2 years after 

23 the date of enactment of this Act, shall— 

24 (A) commence a rulemaking, as necessary 

25 or appropriate in the public interest and for the 


sroberts on DSKH9S0YB1PROD with BILLS
951 

•S 3217 AMDT 3739 

1 protection of retail customers, to address such 

2 regulatory gaps and overlap that can be ad3 dressed by rule, using its authority under the 

4 Securities Exchange Act of 1934 (15 U.S.C. 

5 78a et seq.) and the Investment Advisers Act of 

6 1940 (15 U.S.C. 80b–1 et seq.); and 

7 (B) consider and take into account the 

8 findings, conclusions, and recommendations of 

9 the study required under this section. 

10 (2) RULE OF CONSTRUCTION.—Nothing in this 

11 section shall be construed to limit the rulemaking 

12 authority of the Commission under any other provi13 sion of Federal law. 

14 SEC. 914. OFFICE OF THE INVESTOR ADVOCATE. 

15 Section 4 of the Securities Exchange Act of 1934 (15 

16 U.S.C. 78d) is amended by adding at the end the fol17 lowing: 

18 ‘‘(g) OFFICE OF THE INVESTOR ADVOCATE.— 

19 ‘‘(1) OFFICE ESTABLISHED.—There is estab20 lished within the Commission the Office of the In21 vestor Advocate (in this subsection referred to as the 

22 ‘Office’). 

23 ‘‘(2) INVESTOR ADVOCATE.— 

24 ‘‘(A) IN GENERAL.—The head of the Of25 fice shall be the Investor Advocate, who shall— 


sroberts on DSKH9S0YB1PROD with BILLS
952 

•S 3217 AMDT 3739 

1 ‘‘(i) report directly to the Chairman; 

2 and 

3 ‘‘(ii) be appointed by the Chairman, in 

4 consultation with the Commission, from 

5 among individuals having experience in ad6 vocating for the interests of investors in se7 curities and investor protection issues, 

8 from the perspective of investors. 

9 ‘‘(B) COMPENSATION.—The annual rate of 

10 pay for the Investor Advocate shall be equal to 

11 the highest rate of annual pay for a Senior Ex12 ecutive Service position within the Commission. 

13 ‘‘(C) LIMITATION ON SERVICE.—An indi14 vidual who serves as the Investor Advocate may 

15 not be employed by the Commission— 

16 ‘‘(i) during the 2-year period ending 

17 on the date of appointment as Investor Ad18 vocate; or 

19 ‘‘(ii) during the 5-year period begin20 ning on the date on which the person 

21 ceases to serve as the Investor Advocate. 

22 ‘‘(3) STAFF OF OFFICE.—The Investor Advo23 cate may retain or employ independent counsel, re24 search staff, and service staff, as the Investor AdvoVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00952 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
953 

•S 3217 AMDT 3739 

1 cate deems necessary to carry out the functions, 

2 powers, and duties of the Office. 

3 ‘‘(4) FUNCTIONS OF THE INVESTOR ADVO4 CATE.—The Investor Advocate shall— 

5 ‘‘(A) assist retail investors in resolving sig6 nificant problems such investors may have with 

7 the Commission or with self-regulatory organi8 zations; 

9 ‘‘(B) identify areas in which investors 

10 would benefit from changes in the regulations 

11 of the Commission or the rules of self-regu12 latory organizations; 

13 ‘‘(C) identify problems that investors have 

14 with financial service providers and investment 

15 products; 

16 ‘‘(D) analyze the potential impact on inves17 tors of— 

18 ‘‘(i) proposed regulations of the Com19 mission; and 

20 ‘‘(ii) proposed rules of self-regulatory 

21 organizations registered under this title; 

22 and 

23 ‘‘(E) to the extent practicable, propose to 

24 the Commission changes in the regulations or 

25 orders of the Commission and to Congress any 


sroberts on DSKH9S0YB1PROD with BILLS
954 

•S 3217 AMDT 3739 

1 legislative, administrative, or personnel changes 

2 that may be appropriate to mitigate problems 

3 identified under this paragraph and to promote 

4 the interests of investors. 

5 ‘‘(5) ACCESS TO DOCUMENTS.—The Commis6 sion shall ensure that the Investor Advocate has full 

7 access to the documents of the Commission and any 

8 self-regulatory organization, as necessary to carry 

9 out the functions of the Office. 

10 ‘‘(6) ANNUAL REPORTS.— 

11 ‘‘(A) REPORT ON OBJECTIVES.— 

12 ‘‘(i) IN GENERAL.—Not later than 

13 June 30 of each year after 2010, the In14 vestor Advocate shall submit to the Com15 mittee on Banking, Housing, and Urban 

16 Affairs of the Senate and the Committee 

17 on Financial Services of the House of Rep18 resentatives a report on the objectives of 

19 the Investor Advocate for the following fis20 cal year. 

21 ‘‘(ii) CONTENTS.—Each report re22 quired under clause (i) shall contain full 

23 and substantive analysis and explanation. 

24 ‘‘(B) REPORT ON ACTIVITIES.— 


sroberts on DSKH9S0YB1PROD with BILLS
955 

•S 3217 AMDT 3739 

1 ‘‘(i) IN GENERAL.—Not later than 

2 December 31 of each year after 2010, the 

3 Investor Advocate shall submit to the Com4 mittee on Banking, Housing, and Urban 

5 Affairs of the Senate and the Committee 

6 on Financial Services of the House of Rep7 resentatives a report on the activities of 

8 the Investor Advocate during the imme9 diately preceding fiscal year. 

10 ‘‘(ii) CONTENTS.—Each report re11 quired under clause (i) shall include— 

12 ‘‘(I) appropriate statistical infor13 mation and full and substantive anal14 ysis; 

15 ‘‘(II) information on steps that 

16 the Investor Advocate has taken dur17 ing the reporting period to improve in18 vestor services and the responsiveness 

19 of the Commission and self-regulatory 

20 organizations to investor concerns; 

21 ‘‘(III) a summary of the most se22 rious problems encountered by inves23 tors during the reporting period; 


sroberts on DSKH9S0YB1PROD with BILLS
956 

•S 3217 AMDT 3739 

1 ‘‘(IV) an inventory of the items 

2 described in subclauses (III) that in3 cludes— 

4 ‘‘(aa) identification of any 

5 action taken by the Commission 

6 or the self-regulatory organiza7 tion and the result of such ac8 tion; 

9 ‘‘(bb) the length of time that 

10 each item has remained on such 

11 inventory; and 

12 ‘‘(cc) for items on which no 

13 action has been taken, the rea14 sons for inaction, and an identi15 fication of any official who is re16 sponsible for such action; 

17 ‘‘(V) recommendations for such 

18 administrative and legislative actions 

19 as may be appropriate to resolve prob20 lems encountered by investors; and 

21 ‘‘(VI) any other information, as 

22 determined appropriate by the Inves23 tor Advocate. 

24 ‘‘(iii) INDEPENDENCE.—Each report 

25 required under this paragraph shall be proVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00956 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
957 

•S 3217 AMDT 3739 

1 vided directly to the Committees listed in 

2 clause (i) without any prior review or com3 ment from the Commission, any commis4 sioner, any other officer or employee of the 

5 Commission, or the Office of Management 

6 and Budget. 

7 ‘‘(iv) CONFIDENTIALITY.—No report 

8 required under clause (i) may contain con9 fidential information. 

10 ‘‘(7) REGULATIONS.—The Commission shall, by 

11 regulation, establish procedures requiring a formal 

12 response to all recommendations submitted to the 

13 Commission by the Investor Advocate, not later than 

14 3 months after the date of such submission.’’. 

15 SEC. 915. STREAMLINING OF FILING PROCEDURES FOR 

16 SELF-REGULATORY ORGANIZATIONS. 

17 (a) FILING PROCEDURES.—Section 19(b) of the Se18 curities Exchange Act of 1934 (15 U.S.C. 78s(b)) is 

19 amended by striking paragraph (2) (including the undesig20 nated matter immediately following subparagraph (B)) 

21 and inserting the following: 

22 ‘‘(2) APPROVAL PROCESS.— 

23 ‘‘(A) APPROVAL PROCESS ESTABLISHED.— 

24 ‘‘(i) IN GENERAL.—Except as pro25 vided in clause (ii), not later than 45 days 


sroberts on DSKH9S0YB1PROD with BILLS
958 

•S 3217 AMDT 3739 

1 after the date of publication of a proposed 

2 rule change under paragraph (1), the Com3 mission shall— 

4 ‘‘(I) by order, approve the pro5 posed rule change; or 

6 ‘‘(II) institute proceedings under 

7 subparagraph (B) to determine wheth8 er the proposed rule change should be 

9 disapproved. 

10 ‘‘(ii) EXTENSION OF TIME PERIOD.— 

11 The Commission may extend the period es12 tablished under clause (i) by not more than 

13 an additional 45 days, if— 

14 ‘‘(I) the Commission determines 

15 that a longer period is appropriate 

16 and publishes the reasons for such de17 termination; or 

18 ‘‘(II) the self-regulatory organiza19 tion that filed the proposed rule 

20 change consents to the longer period. 

21 ‘‘(B) PROCEEDINGS.— 

22 ‘‘(i) NOTICE AND HEARING.—If the 

23 Commission does not approve a proposed 

24 rule change under subparagraph (A), the 

25 Commission shall provide to the self-reguVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00958 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
959 

•S 3217 AMDT 3739 

1 latory organization that filed the proposed 

2 rule change— 

3 ‘‘(I) notice of the grounds for 

4 disapproval under consideration; and 

5 ‘‘(II) opportunity for hearing, to 

6 be concluded not later than 180 days 

7 after the date of publication of notice 

8 of the filing of the proposed rule 

9 change. 

10 ‘‘(ii) ORDER OF APPROVAL OR DIS11 APPROVAL.— 

12 ‘‘(I) IN GENERAL.—Except as 

13 provided in subclause (II), not later 

14 than 180 days after the date of publi15 cation under paragraph (1), the Com16 mission shall issue an order approving 

17 or disapproving the proposed rule 

18 change. 

19 ‘‘(II) EXTENSION OF TIME PE20 RIOD.—The Commission may extend 

21 the period for issuance under clause 

22 (I) by not more than 60 days, if— 

23 ‘‘(aa) the Commission deter24 mines that a longer period is apVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00959 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
960 

•S 3217 AMDT 3739 

1 propriate and publishes the rea2 sons for such determination; or 

3 ‘‘(bb) the self-regulatory or4 ganization that filed the proposed 

5 rule change consents to the 

6 longer period. 

7 ‘‘(C) STANDARDS FOR APPROVAL AND DIS8 APPROVAL.— 

9 ‘‘(i) APPROVAL.—The Commission 

10 shall approve a proposed rule change of a 

11 self-regulatory organization if it finds that 

12 such proposed rule change is consistent 

13 with the requirements of this title and the 

14 rules and regulations issued under this 

15 title that are applicable to such organiza16 tion. 

17 ‘‘(ii) DISAPPROVAL.—The Commission 

18 shall disapprove a proposed rule change of 

19 a self-regulatory organization if it does not 

20 make a finding described in clause (i). 

21 ‘‘(iii) TIME FOR APPROVAL.—The 

22 Commission may not approve a proposed 

23 rule change earlier than 30 days after the 

24 date of publication under paragraph (1), 

25 unless the Commission finds good cause 


sroberts on DSKH9S0YB1PROD with BILLS
961 

•S 3217 AMDT 3739 

1 for so doing and publishes the reason for 

2 the finding. 

3 ‘‘(D) RESULT OF FAILURE TO INSTITUTE

4 OR CONCLUDE PROCEEDINGS.—A proposed rule 

5 change shall be deemed to have been approved 

6 by the Commission, if— 

7 ‘‘(i) the Commission does not approve 

8 the proposed rule change or begin pro9 ceedings under subparagraph (B) within 

10 the period described in subparagraph (A); 

11 or 

12 ‘‘(ii) the Commission does not issue 

13 an order approving or disapproving the 

14 proposed rule change under subparagraph 

15 (B) within the period described in subpara16 graph (B)(ii). 

17 ‘‘(E) PUBLICATION DATE BASED ON FED18 ERAL REGISTER PUBLISHING.—For purposes of 

19 this paragraph, if, after filing a proposed rule 

20 change with the Commission pursuant to para21 graph (1), a self-regulatory organization pub22 lishes a notice of the filing of such proposed 

23 rule change, together with the substantive 

24 terms of such proposed rule change, on a pub25 licly accessible website, the Commission shall 


sroberts on DSKH9S0YB1PROD with BILLS
962 

•S 3217 AMDT 3739 

1 thereafter send the notice to the Federal Reg2 ister for publication thereof under paragraph 

3 (1) within 15 days of the date on which such 

4 website publication is made. If the Commission 

5 fails to send the notice for publication thereof 

6 within such 15 day period, then the date of 

7 publication shall be deemed to be the date on 

8 which such website publication was made.’’. 

9 (b) CLARIFICATION OF FILING DATE.— 

10 (1) RULE OF CONSTRUCTION.—Section 19(b) of 

11 the Securities Exchange Act of 1934 (15 U.S.C. 

12 78s(b)) is amended by adding at the end the fol13 lowing: 

14 ‘‘(10) RULE OF CONSTRUCTION RELATING TO

15 FILING DATE OF PROPOSED RULE CHANGES.— 

16 ‘‘(A) IN GENERAL.—For purposes of this 

17 subsection, the date of filing of a proposed rule 

18 change shall be deemed to be the date on which 

19 the Commission receives the proposed rule 

20 change. 

21 ‘‘(B) EXCEPTION.—A proposed rule 

22 change has not been received by the Commis23 sion for purposes of subparagraph (A) if, not 

24 later than 7 days after the date of receipt by 

25 the Commission, the Commission notifies the 


sroberts on DSKH9S0YB1PROD with BILLS
963 

•S 3217 AMDT 3739 

1 self-regulatory organization that such proposed 

2 rule change does not comply with the rules of 

3 the Commission relating to the required form of 

4 a proposed rule change.’’. 

5 (2) PUBLICATION.—Section 19(b)(1) of the Se6 curities Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) 

7 is amended by striking ‘‘upon’’ and inserting ‘‘as 

8 soon as practicable after the date of’’. 

9 (c) EFFECTIVE DATE OF PROPOSED RULES.—Sec10 tion 19(b)(3) of the Securities Exchange Act of 1934 (15 

11 U.S.C. 78s(b)(3)) is amended— 

12 (1) in subparagraph (A)— 

13 (A) by striking ‘‘may take effect’’ and in14 serting ‘‘shall take effect’’; and 

15 (B) by inserting ‘‘on any person, whether 

16 or not the person is a member of the self-regu17 latory organization’’ after ‘‘charge imposed by 

18 the self-regulatory organization’’; and 

19 (2) in subparagraph (C)— 

20 (A) by amending the second sentence to 

21 read as follows: ‘‘At any time within the 60-day 

22 period beginning on the date of filing of such 

23 a proposed rule change in accordance with the 

24 provisions of paragraph (1), the Commission 

25 summarily may temporarily suspend the change 


sroberts on DSKH9S0YB1PROD with BILLS
964 

•S 3217 AMDT 3739 

1 in the rules of the self-regulatory organization 

2 made thereby, if it appears to the Commission 

3 that such action is necessary or appropriate in 

4 the public interest, for the protection of inves5 tors, or otherwise in furtherance of the pur6 poses of this title.’’; 

7 (B) by inserting after the second sentence 

8 the following: ‘‘If the Commission takes such 

9 action, the Commission shall institute pro10 ceedings under paragraph (2)(B) to determine 

11 whether the proposed rule should be approved 

12 or disapproved.’’; and 

13 (C) in the third sentence, by striking ‘‘the 

14 preceding sentence’’ and inserting ‘‘this sub15 paragraph’’. 

16 (d) CONFORMING CHANGE.—Section 19(b)(4)(D) of 

17 the Securities Exchange Act of 1934 (15 U.S.C. 

18 78s(b)(4)(D)) is amended to read as follows: 

19 ‘‘(D)(i) The Commission shall order the 

20 temporary suspension of any change in the 

21 rules of a clearing agency made by a proposed 

22 rule change that has taken effect under para23 graph (3), if the appropriate regulatory agency 

24 for the clearing agency notifies the Commission 


sroberts on DSKH9S0YB1PROD with BILLS
965 

•S 3217 AMDT 3739 

1 not later than 30 days after the date on which 

2 the proposed rule change was filed of— 

3 ‘‘(I) the determination by the appro4 priate regulatory agency that the rules of 

5 such clearing agency, as so changed, may 

6 be inconsistent with the safeguarding of 

7 securities or funds in the custody or con8 trol of such clearing agency or for which it 

9 is responsible; and 

10 ‘‘(II) the reasons for the determina11 tion described in subclause (I). 

12 ‘‘(ii) If the Commission takes action under 

13 clause (i), the Commission shall institute pro14 ceedings under paragraph (2)(B) to determine 

15 if the proposed rule change should be approved 

16 or disapproved.’’. 

17 SEC. 916. STUDY REGARDING FINANCIAL LITERACY AMONG 

18 INVESTORS. 

19 (a) IN GENERAL.—The Commission shall conduct a 

20 study to identify— 

21 (1) the existing level of financial literacy among 

22 retail investors, including subgroups of investors 

23 identified by the Commission; 

24 (2) methods to improve the timing, content, and 

25 format of disclosures to investors with respect to fiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00965 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
966 

•S 3217 AMDT 3739 

1 nancial intermediaries, investment products, and in2 vestment services; 

3 (3) the most useful and understandable relevant 

4 information that retail investors need to make in5 formed financial decisions before engaging a finan6 cial intermediary or purchasing an investment prod7 uct or service that is typically sold to retail inves8 tors, including shares of open-end companies, as 

9 that term is defined in section 5 of the Investment 

10 Company Act of 1940 (15 U.S.C. 80a–5) that are 

11 registered under section 8 of that Act; 

12 (4) methods to increase the transparency of ex13 penses and conflicts of interests in transactions in14 volving investment services and products, including 

15 shares of open-end companies described in para16 graph (3); 

17 (5) the most effective existing private and pub18 lic efforts to educate investors; and 

19 (6) in consultation with the Financial Literacy 

20 and Education Commission, a strategy (including, to 

21 the extent practicable, measurable goals and objec22 tives) to increase the financial literacy of investors 

23 in order to bring about a positive change in investor 

24 behavior. 


sroberts on DSKH9S0YB1PROD with BILLS
967 

•S 3217 AMDT 3739 

1 (b) REPORT.—Not later than 2 years after the date 

2 of enactment of this Act, the Commission shall submit a 

3 report on the study required under subsection (a) to— 

4 (1) the Committee on Banking, Housing, and 

5 Urban Affairs of the Senate; and 

6 (2) the Committee on Financial Services of the 

7 House of Representatives. 

8 SEC. 917. STUDY REGARDING MUTUAL FUND ADVERTISING. 

9 (a) IN GENERAL.—The Comptroller General of the 

10 United States shall conduct a study on mutual fund adver11 tising to identify— 

12 (1) existing and proposed regulatory require13 ments for open-end investment company advertise14 ments; 

15 (2) current marketing practices for the sale of 

16 open-end investment company shares, including the 

17 use of past performance data, funds that have 

18 merged, and incubator funds; 

19 (3) the impact of such advertising on con20 sumers; and 

21 (4) recommendations to improve investor pro22 tections in mutual fund advertising and additional 

23 information necessary to ensure that investors can 

24 make informed financial decisions when purchasing 

25 shares. 


sroberts on DSKH9S0YB1PROD with BILLS
968 

•S 3217 AMDT 3739 

1 (b) REPORT.—Not later than 1 year after the date 

2 of enactment of this Act, the Comptroller General of the 

3 United States shall submit a report on the results of the 

4 study conducted under subsection (a) to— 

5 (1) the Committee on Banking, Housing, and 

6 Urban Affairs of the United States Senate; and 

7 (2) the Committee on Financial Services of the 

8 House of Representatives. 

9 SEC. 918. CLARIFICATION OF COMMISSION AUTHORITY TO 

10 REQUIRE INVESTOR DISCLOSURES BEFORE 

11 PURCHASE OF INVESTMENT PRODUCTS AND 

12 SERVICES. 

13 Section 15 of the Securities Exchange Act of 1934 

14 (15 U.S.C. 78o) is amended by adding at the end the fol15 lowing: 

16 ‘‘(k) DISCLOSURES TO RETAIL INVESTORS.— 

17 ‘‘(1) IN GENERAL.—Notwithstanding any other 

18 provision of the securities laws, the Commission may 

19 issue rules designating documents or information 

20 that shall be provided by a broker or dealer to a re21 tail investor before the purchase of an investment 

22 product or service by the retail investor. 

23 ‘‘(2) CONSIDERATIONS.—In developing any 

24 rules under paragraph (1), the Commission shall 

25 consider whether the rules will promote investor proVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00968 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
969 

•S 3217 AMDT 3739 

1 tection, efficiency, competition, and capital forma2 tion. 

3 ‘‘(3) FORM AND CONTENTS OF DOCUMENTS

4 AND INFORMATION.—Any documents or information 

5 designated under a rule promulgated under para6 graph (1) shall— 

7 ‘‘(A) be in a summary format; and 

8 ‘‘(B) contain clear and concise information 

9 about— 

10 ‘‘(i) investment objectives, strategies, 

11 costs, and risks; and 

12 ‘‘(ii) any compensation or other finan13 cial incentive received by a broker, dealer, 

14 or other intermediary in connection with 

15 the purchase of retail investment prod16 ucts.’’. 

17 SEC. 919. STUDY ON CONFLICTS OF INTEREST. 

18 (a) IN GENERAL.—The Comptroller General of the 

19 United States shall conduct a study— 

20 (1) to identify and examine potential conflicts 

21 of interest that exist between the staffs of the invest22 ment banking and equity and fixed income securities 

23 analyst functions within the same firm; and 

24 (2) to make recommendations to Congress de25 signed to protect investors in light of such conflicts. 


sroberts on DSKH9S0YB1PROD with BILLS
970 

•S 3217 AMDT 3739 

1 (b) CONSIDERATIONS.—In conducting the study 

2 under subsection (a), the Comptroller General shall— 

3 (1) consider— 

4 (A) the potential for investor harm result5 ing from conflicts, including consideration of 

6 the forms of misconduct engaged in by the sev7 eral securities firms and individuals that en8 tered into the Global Analyst Research Settle9 ments in 2003 (also known as the ‘‘Global Set10 tlement’’); 

11 (B) the nature and benefits of the under12 takings to which those firms agreed in enforce13 ment proceedings, including firewalls between 

14 research and investment banking, separate re15 porting lines, dedicated legal and compliance 

16 staffs, allocation of budget, physical separation, 

17 compensation, employee performance evalua18 tions, coverage decisions, limitations on solic19 iting investment banking business, disclosures, 

20 transparency, and other measures; 

21 (C) whether any such undertakings should 

22 be codified and applied permanently to securi23 ties firms, or whether the Commission should 

24 adopt rules applying any such undertakings to 

25 securities firms; and 


sroberts on DSKH9S0YB1PROD with BILLS
971 

•S 3217 AMDT 3739 

1 (D) whether to recommend regulatory or 

2 legislative measures designed to mitigate pos3 sible adverse consequences to investors arising 

4 from the conflicts of interest or to enhance in5 vestor protection or confidence in the integrity 

6 of the securities markets; and 

7 (2) consult with State attorneys general, State 

8 securities officials, the Commission, the Financial 

9 Industry Regulatory Authority (‘‘FINRA’’), NYSE 

10 Regulation, investor advocates, brokers, dealers, re11 tail investors, institutional investors, and academics. 

12 (c) REPORT.—The Comptroller General shall submit 

13 a report on the results of the study required by this section 

14 to the Committee on Banking, Housing, and Urban Af15 fairs of the Senate and the Committee on Financial Serv16 ices of the House of Representatives, not later than 18 

17 months after the date of enactment of this Act. 

18 SEC. 919A. STUDY ON IMPROVED INVESTOR ACCESS TO IN19 FORMATION ON INVESTMENT ADVISERS AND 

20 BROKER-DEALERS. 

21 (a) STUDY.— 

22 (1) IN GENERAL.—Not later than 6 months 

23 after the date of enactment of this Act, the Commis24 sion shall complete a study, including recommenda25 tions, of ways to improve the access of investors to 


sroberts on DSKH9S0YB1PROD with BILLS
972 

•S 3217 AMDT 3739 

1 registration information (including disciplinary ac2 tions, regulatory, judicial, and arbitration pro3 ceedings, and other information) about registered 

4 and previously registered investment advisers, asso5 ciated persons of investment advisers, brokers and 

6 dealers and their associated persons on the existing 

7 Central Registration Depository and Investment Ad8 viser Registration Depository systems, as well as 

9 identify additional information that should be made 

10 publicly available. 

11 (2) CONTENTS.—The study required by sub12 section (a) shall include an analysis of the advan13 tages and disadvantages of further centralizing ac14 cess to the information contained in the 2 systems, 

15 including— 

16 (A) identification of those data pertinent 

17 to investors; and 

18 (B) the identification of the method and 

19 format for displaying and publishing such data 

20 to enhance accessibility by and utility to inves21 tors. 

22 (b) IMPLEMENTATION.—Not later than 18 months 

23 after the date of completion of the study required by sub24 section (a), the Commission shall implement any rec25 ommendations of the study. 


sroberts on DSKH9S0YB1PROD with BILLS
973 

•S 3217 AMDT 3739 

1 SEC. 919B. STUDY ON FINANCIAL PLANNERS AND THE USE 

2 OF FINANCIAL DESIGNATIONS. 

3 (a) IN GENERAL.—The Comptroller General of the 

4 United States shall conduct a study to evaluate— 

5 (1) the effectiveness of State and Federal regu6 lations to protect consumers from individuals who 

7 hold themselves out as financial planners through 

8 the use of misleading designations; 

9 (2) current State and Federal oversight struc10 ture and regulations for financial planners; and 

11 (3) legal or regulatory gaps in the regulation of 

12 financial planners and other individuals who provide 

13 or offer to provide financial planning services to con14 sumers. 

15 (b) CONSIDERATIONS.—In conducting the study re16 quired under subsection (a), the Comptroller General shall 

17 consider— 

18 (1) the role of financial planners in providing 

19 advice regarding the management of financial re20 sources, including investment planning, income tax 

21 planning, education planning, retirement planning, 

22 estate planning, and risk management; 

23 (2) whether current regulations at the State 

24 and Federal level provide adequate ethical and pro25 fessional standards for financial planners; 


sroberts on DSKH9S0YB1PROD with BILLS
974 

•S 3217 AMDT 3739 

1 (3) the use of the title ‘‘financial planner’’ and 

2 misleading designations in connection with sale of fi3 nancial products, including insurance and securities; 

4 (4) the possible risk posed to consumers by in5 dividuals who hold themselves out as financial plan6 ners through the use of misleading designations, in7 cluding ‘‘financial advisor’’ and ‘‘financial consult8 ant’’; 

9 (5) the ability of consumers to understand li10 censing requirements and standards of care that 

11 apply to individuals who provide financial advice; 

12 (6) the possible benefits to consumers of regula13 tion and professional oversight of financial planners; 

14 and 

15 (7) any other consideration that the Comp16 troller General deems necessary or appropriate to ef17 fectively execute the study required under subsection 

18 (a). 

19 (c) RECOMMENDATIONS.—In providing recommenda20 tions for the appropriate regulation of financial planners 

21 and other individuals who provide or offer to provide fi22 nancial planning services, in order to protect consumers 

23 of financial planning services, the Comptroller General 

24 shall consider— 


sroberts on DSKH9S0YB1PROD with BILLS
975 

•S 3217 AMDT 3739 

1 (1) the appropriate structure for regulation of 

2 financial planners and individuals providing financial 

3 planning services; and 

4 (2) the appropriate scope of the regulations 

5 needed to protect consumers, including but not lim6 ited to the need to establish competency standards, 

7 practice standards, ethical guidelines, disciplinary 

8 authority, and transparency to consumers. 

9 (d) REPORT.— 

10 (1) IN GENERAL.—Not later than 180 days 

11 after the date of enactment of this Act, the Comp12 troller General shall submit a report on the study re13 quired under subsection (a) to— 

14 (A) the Committee on Banking, Housing, 

15 and Urban Affairs of the Senate; 

16 (B) the Special Committee on Aging of the 

17 Senate; and 

18 (C) the Committee on Financial Services of 

19 the House of Representatives. 

20 (2) CONTENT REQUIREMENTS.—The report re21 quired under paragraph (1) shall describe the find22 ings and determinations made by the Comptroller 

23 General in carrying out the study required under 

24 subsection (a), including a description of the consid25 erations, analysis, and government, public, industry, 


sroberts on DSKH9S0YB1PROD with BILLS
976 

•S 3217 AMDT 3739 

1 nonprofit and consumer input that the Comptroller 

2 General considered to make such findings, conclu3 sions, and legislative, regulatory, or other rec4 ommendations. 

5 Subtitle B—Increasing Regulatory 

6 Enforcement and Remedies 

7 SEC. 921. AUTHORITY TO ISSUE RULES RELATED TO MAN8 DATORY PREDISPUTE ARBITRATION. 

9 (a) AMENDMENT TO SECURITIES EXCHANGE ACT OF

10 1934.—Section 15 of the Securities Exchange Act of 1934 

11 (15 U.S.C. 78o), as amended by section 918, is amended 

12 by adding at the end the following: 

13 ‘‘(l) AUTHORITY TO RESTRICT MANDATORY

14 PREDISPUTE ARBITRATION.—The Commission may con15 duct a rulemaking to reaffirm or prohibit, or impose or 

16 not impose conditions or limitations on the use of, agree17 ments that require customers or clients of any broker, 

18 dealer, or municipal securities dealer to arbitrate any dis19 pute between them and such broker, dealer, or municipal 

20 securities dealer that arises under the securities laws or 

21 the rules of a self-regulatory organization, if the Commis22 sion finds that such reaffirmation, prohibition, imposition 

23 of conditions or limitations, or other action is in the public 

24 interest and for the protection of investors.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
977 

•S 3217 AMDT 3739 

1 (b) AMENDMENT TO INVESTMENT ADVISERS ACT OF

2 1940.—Section 205 of the Investment Advisers Act of 

3 1940 (15 U.S.C. 80b–5) is amended by adding at the end 

4 the following: 

5 ‘‘(f) AUTHORITY TO ISSUE RULES RELATED TO

6 MANDATORY PREDISPUTE ARBITRATION.—The Commis7 sion may conduct rulemaking to reaffirm or prohibit, or 

8 impose or not impose conditions or limitations on the use 

9 of, agreements that require customers or clients of any 

10 investment adviser to arbitrate any dispute between them 

11 and such investment adviser that arises under the securi12 ties laws, as defined in section 3 of the Securities Ex13 change Act of 1934 (15 U.S.C. 78c), or the rules of a 

14 self-regulatory organization, if the Commission finds that 

15 such reaffirmation, prohibition, imposition of conditions or 

16 limitations, or other action is in the public interest and 

17 for the protection of investors.’’. 

18 SEC. 922. WHISTLEBLOWER PROTECTION. 

19 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

20 et seq.) is amended by inserting after section 21E the fol21 lowing: 

22 ‘‘SEC. 21F. SECURITIES WHISTLEBLOWER INCENTIVES AND 

23 PROTECTION. 

24 ‘‘(a) DEFINITIONS.—In this section the following 

25 definitions shall apply: 


sroberts on DSKH9S0YB1PROD with BILLS
978 

•S 3217 AMDT 3739 

1 ‘‘(1) COVERED JUDICIAL OR ADMINISTRATIVE

2 ACTION.—The term ‘covered judicial or administra3 tive action’ means any judicial or administrative ac4 tion brought by the Commission under the securities 

5 laws that results in monetary sanctions exceeding 

6 $1,000,000. 

7 ‘‘(2) FUND.—The term ‘Fund’ means the Secu8 rities and Exchange Commission Investor Protection 

9 Fund. 

10 ‘‘(3) ORIGINAL INFORMATION.—The term 

11 ‘original information’ means information that— 

12 ‘‘(A) is derived from the independent 

13 knowledge or analysis of a whistleblower; 

14 ‘‘(B) is not known to the Commission from 

15 any other source, unless the whistleblower is the 

16 original source of the information; and 

17 ‘‘(C) is not exclusively derived from an al18 legation made in a judicial or administrative 

19 hearing, in a governmental report, hearing, 

20 audit, or investigation, or from the news media, 

21 unless the whistleblower is a source of the infor22 mation. 

23 ‘‘(4) MONETARY SANCTIONS.—The term ‘mone24 tary sanctions’, when used with respect to any judi25 cial or administrative action, means— 


sroberts on DSKH9S0YB1PROD with BILLS
979 

•S 3217 AMDT 3739 

1 ‘‘(A) any monies, including penalties, 

2 disgorgement, and interest, ordered to be paid; 

3 and 

4 ‘‘(B) any monies deposited into a 

5 disgorgement fund or other fund pursuant to 

6 section 308(b) of the Sarbanes-Oxley Act of 

7 2002 (15 U.S.C. 7246(b)), as a result of such 

8 action or any settlement of such action. 

9 ‘‘(5) RELATED ACTION.—The term ‘related ac10 tion’, when used with respect to any judicial or ad11 ministrative action brought by the Commission 

12 under the securities laws, means any judicial or ad13 ministrative action brought by an entity described in 

14 subclauses (I) through (IV) of subsection 

15 (h)(2)(D)(i) that is based upon the original informa16 tion provided by a whistleblower pursuant to sub17 section (a) that led to the successful enforcement of 

18 the Commission action. 

19 ‘‘(6) WHISTLEBLOWER.—The term ‘whistle20 blower’ means any individual, or 2 or more individ21 uals acting jointly, who provides information relating 

22 to a violation of the securities laws to the Commis23 sion, in a manner established, by rule or regulation, 

24 by the Commission. 

25 ‘‘(b) AWARDS.— 


sroberts on DSKH9S0YB1PROD with BILLS
980 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—In any covered judicial or 

2 administrative action, or related action, the Commis3 sion, under regulations prescribed by the Commis4 sion and subject to subsection (c), shall pay an 

5 award or awards to 1 or more whistleblowers who 

6 voluntarily provided original information to the 

7 Commission that led to the successful enforcement 

8 of the covered judicial or administrative action, or 

9 related action, in an aggregate amount equal to— 

10 ‘‘(A) not less than 10 percent, in total, of 

11 what has been collected of the monetary sanc12 tions imposed in the action or related actions; 

13 and 

14 ‘‘(B) not more than 30 percent, in total, of 

15 what has been collected of the monetary sanc16 tions imposed in the action or related actions. 

17 ‘‘(2) PAYMENT OF AWARDS.—Any amount paid 

18 under paragraph (1) shall be paid from the Fund. 

19 ‘‘(c) DETERMINATION OF AMOUNT OF AWARD; DE20 NIAL OF AWARD.— 

21 ‘‘(1) DETERMINATION OF AMOUNT OF

22 AWARD.— 

23 ‘‘(A) DISCRETION.—The determination of 

24 the amount of an award made under subsection 

25 (b) shall be in the discretion of the Commission. 


sroberts on DSKH9S0YB1PROD with BILLS
981 

•S 3217 AMDT 3739 

1 ‘‘(B) CRITERIA.—In determining the 

2 amount of an award made under subsection (b), 

3 the Commission shall take into account— 

4 ‘‘(i) the significance of the informa5 tion provided by the whistleblower to the 

6 success of the covered judicial or adminis7 trative action; 

8 ‘‘(ii) the degree of assistance provided 

9 by the whistleblower and any legal rep10 resentative of the whistleblower in a cov11 ered judicial or administrative action; 

12 ‘‘(iii) the programmatic interest of the 

13 Commission in deterring violations of the 

14 securities laws by making awards to whis15 tleblowers who provide information that 

16 lead to the successful enforcement of such 

17 laws; and 

18 ‘‘(iv) such additional relevant factors 

19 as the Commission may establish by rule 

20 or regulation. 

21 ‘‘(2) DENIAL OF AWARD.—No award under 

22 subsection (b) shall be made— 

23 ‘‘(A) to any whistleblower who is, or was at 

24 the time the whistleblower acquired the original 


sroberts on DSKH9S0YB1PROD with BILLS
982 

•S 3217 AMDT 3739 

1 information submitted to the Commission, a 

2 member, officer, or employee of— 

3 ‘‘(i) an appropriate regulatory agency; 

4 ‘‘(ii) the Department of Justice; 

5 ‘‘(iii) a self-regulatory organization; 

6 ‘‘(iv) the Public Company Accounting 

7 Oversight Board; or 

8 ‘‘(v) a law enforcement organization; 

9 ‘‘(B) to any whistleblower who is convicted 

10 of a criminal violation related to the judicial or 

11 administrative action for which the whistle12 blower otherwise could receive an award under 

13 this section; 

14 ‘‘(C) to any whistleblower who gains the 

15 information through the performance of an 

16 audit of financial statements required under the 

17 securities laws and for whom such submission 

18 would be contrary to the requirements of sec19 tion 101A of the Securities Exchange Act of 

20 1934 (15 U.S.C. 78j–1); or 

21 ‘‘(D) to any whistleblower who fails to sub22 mit information to the Commission in such 

23 form as the Commission may, by rule, require. 

24 ‘‘(d) REPRESENTATION.— 


sroberts on DSKH9S0YB1PROD with BILLS
983 

•S 3217 AMDT 3739 

1 ‘‘(1) PERMITTED REPRESENTATION.—Any 

2 whistleblower who makes a claim for an award under 

3 subsection (b) may be represented by counsel. 

4 ‘‘(2) REQUIRED REPRESENTATION.— 

5 ‘‘(A) IN GENERAL.—Any whistleblower 

6 who anonymously makes a claim for an award 

7 under subsection (b) shall be represented by 

8 counsel if the whistleblower anonymously sub9 mits the information upon which the claim is 

10 based. 

11 ‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 

12 the payment of an award, a whistleblower shall 

13 disclose the identity of the whistleblower and 

14 provide such other information as the Commis15 sion may require, directly or through counsel 

16 for the whistleblower. 

17 ‘‘(e) NO CONTRACT NECESSARY.—No contract with 

18 the Commission is necessary for any whistleblower to re19 ceive an award under subsection (b), unless otherwise re20 quired by the Commission by rule or regulation. 

21 ‘‘(f) APPEALS.—Any determination made under this 

22 section, including whether, to whom, or in what amount 

23 to make awards, shall be in the discretion of the Commis24 sion. Any such determination may be appealed to the ap25 propriate court of appeals of the United States not more 


sroberts on DSKH9S0YB1PROD with BILLS
984 

•S 3217 AMDT 3739 

1 than 30 days after the determination is issued by the 

2 Commission. The court shall review the determination 

3 made by the Commission in accordance with section 706 

4 of title 5, United States Code. 

5 ‘‘(g) INVESTOR PROTECTION FUND.— 

6 ‘‘(1) FUND ESTABLISHED.—There is estab7 lished in the Treasury of the United States a fund 

8 to be known as the ‘Securities and Exchange Com9 mission Investor Protection Fund’. 

10 ‘‘(2) USE OF FUND.—The Fund shall be avail11 able to the Commission, without further appropria12 tion or fiscal year limitation, for— 

13 ‘‘(A) paying awards to whistleblowers as 

14 provided in subsection (b); and 

15 ‘‘(B) funding the activities of the Inspector 

16 General of the Commission under section 4(i). 

17 ‘‘(3) DEPOSITS AND CREDITS.—There shall be 

18 deposited into or credited to the Fund an amount 

19 equal to— 

20 ‘‘(A) the amount awarded under subsection 

21 (b) from any monetary sanction collected by the 

22 Commission in any judicial or administrative 

23 action brought by the Commission that is based 

24 on information provided by a whistleblower 

25 under the securities laws, unless, the balance of 


sroberts on DSKH9S0YB1PROD with BILLS
985 

•S 3217 AMDT 3739 

1 the Fund at the time the monetary sanction is 

2 collected exceeds $200,000,000; 

3 ‘‘(B) any monetary sanction added to a 

4 disgorgement fund or other fund pursuant to 

5 section 308 of the Sarbanes-Oxley Act of 2002 

6 (15 U.S.C. 7246) that is not distributed to the 

7 victims for whom the disgorgement fund was 

8 established, unless the balance of the 

9 disgorgement fund at the time the determina10 tion is made not to distribute the monetary 

11 sanction to such victims exceeds $100,000,000; 

12 and 

13 ‘‘(C) all income from investments made 

14 under paragraph (4). 

15 ‘‘(4) INVESTMENTS.— 

16 ‘‘(A) AMOUNTS IN FUND MAY BE IN17 VESTED.—The Commission may request the 

18 Secretary of the Treasury to invest the portion 

19 of the Fund that is not, in the discretion of the 

20 Commission, required to meet the current needs 

21 of the Fund. 

22 ‘‘(B) ELIGIBLE INVESTMENTS.—Invest23 ments shall be made by the Secretary of the 

24 Treasury in obligations of the United States or 

25 obligations that are guaranteed as to principal 


sroberts on DSKH9S0YB1PROD with BILLS
986 

•S 3217 AMDT 3739 

1 and interest by the United States, with matu2 rities suitable to the needs of the Fund as de3 termined by the Commission on the record. 

4 ‘‘(C) INTEREST AND PROCEEDS CRED5 ITED.—The interest on, and the proceeds from 

6 the sale or redemption of, any obligations held 

7 in the Fund shall be credited to the Fund. 

8 ‘‘(5) REPORTS TO CONGRESS.—Not later than 

9 October 30 of each fiscal year beginning after the 

10 date of enactment of this subsection, the Commis11 sion shall submit to the Committee on Banking, 

12 Housing, and Urban Affairs of the Senate, and the 

13 Committee on Financial Services of the House of 

14 Representatives a report on— 

15 ‘‘(A) the whistleblower award program, es16 tablished under this section, including— 

17 ‘‘(i) a description of the number of 

18 awards granted; and 

19 ‘‘(ii) the types of cases in which 

20 awards were granted during the preceding 

21 fiscal year; 

22 ‘‘(B) the balance of the Fund at the begin23 ning of the preceding fiscal year; 


sroberts on DSKH9S0YB1PROD with BILLS
987 

•S 3217 AMDT 3739 

1 ‘‘(C) the amounts deposited into or cred2 ited to the Fund during the preceding fiscal 

3 year; 

4 ‘‘(D) the amount of earnings on invest5 ments made under paragraph (4) during the 

6 preceding fiscal year; 

7 ‘‘(E) the amount paid from the Fund dur8 ing the preceding fiscal year to whistleblowers 

9 pursuant to subsection (b); 

10 ‘‘(F) the balance of the Fund at the end 

11 of the preceding fiscal year; and 

12 ‘‘(G) a complete set of audited financial 

13 statements, including— 

14 ‘‘(i) a balance sheet; 

15 ‘‘(ii) income statement; and 

16 ‘‘(iii) cash flow analysis. 

17 ‘‘(h) PROTECTION OF WHISTLEBLOWERS.— 

18 ‘‘(1) PROHIBITION AGAINST RETALIATION.— 

19 ‘‘(A) IN GENERAL.—No employer may dis20 charge, demote, suspend, threaten, harass, di21 rectly or indirectly, or in any other manner dis22 criminate against, a whistleblower in the terms 

23 and conditions of employment because of any 

24 lawful act done by the whistleblower— 


sroberts on DSKH9S0YB1PROD with BILLS
988 

•S 3217 AMDT 3739 

1 ‘‘(i) in providing information to the 

2 Commission in accordance with subsection 

3 (a); or 

4 ‘‘(ii) in assisting in any investigation 

5 or judicial or administrative action of the 

6 Commission based upon or related to such 

7 information. 

8 ‘‘(B) ENFORCEMENT.— 

9 ‘‘(i) CAUSE OF ACTION.—An indi10 vidual who alleges discharge or other dis11 crimination in violation of subparagraph 

12 (A) may bring an action under this sub13 section in the appropriate district court of 

14 the United States for the relief provided in 

15 subparagraph (C). 

16 ‘‘(ii) SUBPOENAS.—A subpoena re17 quiring the attendance of a witness at a 

18 trial or hearing conducted under this sec19 tion may be served at any place in the 

20 United States. 

21 ‘‘(iii) STATUTE OF LIMITATIONS.— 

22 ‘‘(I) IN GENERAL.—An action 

23 under this subsection may not be 

24 brought— 


sroberts on DSKH9S0YB1PROD with BILLS
989 

•S 3217 AMDT 3739 

1 ‘‘(aa) more than 6 years 

2 after the date on which the viola3 tion of subparagraph (A) oc4 curred; or 

5 ‘‘(bb) more than 3 years 

6 after the date when facts mate7 rial to the right of action are 

8 known or reasonably should have 

9 been known by the employee al10 leging a violation of subpara11 graph (A). 

12 ‘‘(II) REQUIRED ACTION WITHIN

13 10 YEARS.—Notwithstanding sub14 clause (I), an action under this sub15 section may not in any circumstance 

16 be brought more than 10 years after 

17 the date on which the violation occurs. 

18 ‘‘(C) RELIEF.—Relief for an individual 

19 prevailing in an action brought under subpara20 graph (B) shall include— 

21 ‘‘(i) reinstatement with the same se22 niority status that the individual would 

23 have had, but for the discrimination; 


sroberts on DSKH9S0YB1PROD with BILLS
990 

•S 3217 AMDT 3739 

1 ‘‘(ii) 2 times the amount of back pay 

2 otherwise owed to the individual, with in3 terest; and 

4 ‘‘(iii) compensation for litigation 

5 costs, expert witness fees, and reasonable 

6 attorneys’ fees. 

7 ‘‘(2) CONFIDENTIALITY.— 

8 ‘‘(A) IN GENERAL.—Unless and until re9 quired to be disclosed to a defendant or re10 spondent in connection with a proceeding insti11 tuted by the Commission or any entity de12 scribed in subparagraph (D), all information 

13 provided to the Commission by a whistle14 blower— 

15 ‘‘(i) in any proceeding in any Federal 

16 or State court or administrative agency— 

17 ‘‘(I) shall be confidential and 

18 privileged as an evidentiary matter; 

19 and 

20 ‘‘(II) shall not be subject to civil 

21 discovery or other legal process; and 

22 ‘‘(ii) shall not be subject to disclosure 

23 under section 552 of title 5, United States 

24 Code (commonly referred to as the FreeVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00990 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
991 

•S 3217 AMDT 3739 

1 dom of Information Act) or under any pro2 ceeding under that section. 

3 ‘‘(B) EXEMPTED STATUTE.—For purposes 

4 of section 552 of title 5, United States Code, 

5 this paragraph shall be considered a statute de6 scribed in subsection (b)(3)(B) of such section 

7 552. 

8 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

9 in this section is intended to limit, or shall be 

10 construed to limit, the ability of the Attorney 

11 General to present such evidence to a grand 

12 jury or to share such evidence with potential 

13 witnesses or defendants in the course of an on14 going criminal investigation. 

15 ‘‘(D) AVAILABILITY TO GOVERNMENT

16 AGENCIES.— 

17 ‘‘(i) IN GENERAL.—Without the loss 

18 of its status as confidential and privileged 

19 in the hands of the Commission, all infor20 mation referred to in subparagraph (A) 

21 may, in the discretion of the Commission, 

22 when determined by the Commission to be 

23 necessary to accomplish the purposes of 

24 this Act and to protect investors, be made 

25 available to— 


sroberts on DSKH9S0YB1PROD with BILLS
992 

•S 3217 AMDT 3739 

1 ‘‘(I) the Attorney General of the 

2 United States; 

3 ‘‘(II) an appropriate regulatory 

4 authority; 

5 ‘‘(III) a self-regulatory organiza6 tion; 

7 ‘‘(IV) a State attorney general in 

8 connection with any criminal inves9 tigation; 

10 ‘‘(V) any appropriate State regu11 latory authority; 

12 ‘‘(VI) the Public Company Ac13 counting Oversight Board; 

14 ‘‘(VII) a foreign securities au15 thority; and 

16 ‘‘(VIII) a foreign law enforce17 ment authority. 

18 ‘‘(ii) CONFIDENTIALITY.— 

19 ‘‘(I) IN GENERAL.—Each of the 

20 entities described in subclauses (I) 

21 through (VI) of clause (i) shall main22 tain such information as confidential 

23 and privileged, in accordance with the 

24 requirements established under sub25 paragraph (A). 


sroberts on DSKH9S0YB1PROD with BILLS
993 

•S 3217 AMDT 3739 

1 ‘‘(II) FOREIGN AUTHORITIES.— 

2 Each of the entities described in sub3 clauses (VII) and (VIII) of clause (i) 

4 shall maintain such information in ac5 cordance with such assurances of con6 fidentiality as the Commission deter7 mines appropriate. 

8 ‘‘(3) RIGHTS RETAINED.—Nothing in this sec9 tion shall be deemed to diminish the rights, privi10 leges, or remedies of any whistleblower under any 

11 Federal or State law, or under any collective bar12 gaining agreement. 

13 ‘‘(i) PROVISION OF FALSE INFORMATION.—A whis14 tleblower shall not be entitled to an award under this sec15 tion if the whistleblower— 

16 ‘‘(1) knowingly and willfully makes any false, 

17 fictitious, or fraudulent statement or representation; 

18 or 

19 ‘‘(2) uses any false writing or document know20 ing the writing or document contains any false, ficti21 tious, or fraudulent statement or entry. 

22 ‘‘(j) RULEMAKING AUTHORITY.—The Commission 

23 shall have the authority to issue such rules and regulations 

24 as may be necessary or appropriate to implement the proVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 00993 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
994 

•S 3217 AMDT 3739 

1 visions of this section consistent with the purposes of this 

2 section.’’. 

3 SEC. 923. CONFORMING AMENDMENTS FOR WHISTLE4 BLOWER PROTECTION. 

5 (a) IN GENERAL.— 

6 (1) SECURITIES ACT OF 1933.—Section 

7 20(d)(3)(A) of the Securities Act of 1933 (15 U.S.C. 

8 77t(d)(3)(A)) is amended by inserting ‘‘and section 

9 21F of the Securities Exchange Act of 1934’’ after 

10 ‘‘the Sarbanes-Oxley Act of 2002’’. 

11 (2) INVESTMENT COMPANY ACT OF 1940.—Sec12 tion 42(e)(3)(A) of the Investment Company Act of 

13 1940 (15 U.S.C. 80a–41(e)(3)(A)) is amended by 

14 inserting ‘‘and section 21F of the Securities Ex15 change Act of 1934’’ after ‘‘the Sarbanes-Oxley Act 

16 of 2002’’. 

17 (3) INVESTMENT ADVISERS ACT OF 1940.—Sec18 tion 209(e)(3)(A) of the Investment Advisers Act of 

19 1940 (15 U.S.C. 80b–9(e)(3)(A)) is amended by in20 serting ‘‘and section 21F of the Securities Exchange 

21 Act of 1934’’ after ‘‘the Sarbanes-Oxley Act of 

22 2002’’. 

23 (b) SECURITIES EXCHANGE ACT.— 

24 (1) SECTION 21.—Section 21(d)(3)(C)(i) of the 

25 Securities Exchange Act of 1934 (15 U.S.C. 


sroberts on DSKH9S0YB1PROD with BILLS
995 

•S 3217 AMDT 3739 

1 78u(d)(3)(C)(i)) is amended by inserting ‘‘and sec2 tion 21F of this title’’ after ‘‘the Sarbanes-Oxley Act 

3 of 2002’’. 

4 (2) SECTION 21A.—Section 21A of the Securi5 ties Exchange Act of 1934 (15 U.S.C. 78u–1) is 

6 amended— 

7 (A) in subsection (d)(1) by— 

8 (i) striking ‘‘(subject to subsection 

9 (e))’’; and 

10 (ii) inserting ‘‘and section 21F of this 

11 title’’ after ‘‘the Sarbanes-Oxley Act of 

12 2002’’; 

13 (B) by striking subsection (e); and 

14 (C) by redesignating subsections (f) and 

15 (g) as subsections (e) and (f), respectively. 

16 SEC. 924. IMPLEMENTATION AND TRANSITION PROVISIONS 

17 FOR WHISTLEBLOWER PROTECTION. 

18 (a) IMPLEMENTING RULES.—The Commission shall 

19 issue final regulations implementing the provisions of sec20 tion 21F of the Securities Exchange Act of 1934, as added 

21 by this subtitle, not later than 270 days after the date 

22 of enactment of this Act. 

23 (b) ORIGINAL INFORMATION.—Information provided 

24 to the Commission by a whistleblower in accordance with 

25 the regulations referenced in subsection (a) shall not lose 


sroberts on DSKH9S0YB1PROD with BILLS
996 

•S 3217 AMDT 3739 

1 the status of original information (as defined in section 

2 21F(i)(1) of the Securities Exchange Act of 1934, as 

3 added by this subtitle) solely because the whistleblower 

4 provided the information prior to the effective date of the 

5 regulations, provided that the information is— 

6 (1) provided by the whistleblower after the date 

7 of enactment of this subtitle, or monetary sanctions 

8 are collected after the date of enactment of this sub9 title; or 

10 (2) related to a violation for which an award 

11 under section 21F of the Securities Exchange Act of 

12 1934, as added by this subtitle, could have been paid 

13 at the time the information was provided by the 

14 whistleblower. 

15 (c) AWARDS.—A whistleblower may receive an award 

16 pursuant to section 21F of the Securities Exchange Act 

17 of 1934, as added by this subtitle, regardless of whether 

18 any violation of a provision of the securities laws, or a 

19 rule or regulation thereunder, underlying the judicial or 

20 administrative action upon which the award is based, oc21 curred prior to the date of enactment of this subtitle. 

22 SEC. 925. COLLATERAL BARS. 

23 (a) SECURITIES EXCHANGE ACT OF 1934.— 

24 (1) SECTION 15.—Section 15(b)(6)(A) of the 

25 Securities Exchange Act of 1934 (15 U.S.C. 


sroberts on DSKH9S0YB1PROD with BILLS
997 

•S 3217 AMDT 3739 

1 78o(b)(6)(A)) is amended by striking ‘‘12 months, 

2 or bar such person from being associated with a 

3 broker or dealer,’’ and inserting ‘‘12 months, or bar 

4 any such person from being associated with a 

5 broker, dealer, investment adviser, municipal securi6 ties dealer, municipal advisor, transfer agent, or na7 tionally recognized statistical rating organization,’’. 

8 (2) SECTION 15B.—Section 15B(c)(4) of the Se9 curities Exchange Act of 1934 (15 U.S.C. 78o– 

10 4(c)(4)) is amended by striking ‘‘twelve months or 

11 bar any such person from being associated with a 

12 municipal securities dealer,’’ and inserting ‘‘12 

13 months or bar any such person from being associ14 ated with a broker, dealer, investment adviser, mu15 nicipal securities dealer, municipal advisor, transfer 

16 agent, or nationally recognized statistical rating or17 ganization,’’. 

18 (3) SECTION 17A.—Section 17A(c)(4)(C) of the 

19 Securities Exchange Act of 1934 (15 U.S.C. 78q– 

20 1(c)(4)(C)) is amended by striking ‘‘twelve months 

21 or bar any such person from being associated with 

22 the transfer agent,’’ and inserting ‘‘12 months or 

23 bar any such person from being associated with any 

24 transfer agent, broker, dealer, investment adviser, 


sroberts on DSKH9S0YB1PROD with BILLS
998 

•S 3217 AMDT 3739 

1 municipal securities dealer, municipal advisor, or na2 tionally recognized statistical rating organization,’’. 

3 (b) INVESTMENT ADVISERS ACT OF 1940.—Section 

4 203(f) of the Investment Advisers Act of 1940 (15 U.S.C. 

5 80b–3(f)) is amended by striking ‘‘twelve months or bar 

6 any such person from being associated with an investment 

7 adviser,’’ and inserting ‘‘12 months or bar any such per8 son from being associated with an investment adviser, 

9 broker, dealer, municipal securities dealer, municipal advi10 sor, transfer agent, or nationally recognized statistical rat11 ing organization,’’. 

12 SEC. 926. AUTHORITY OF STATE REGULATORS OVER REGU13 LATION D OFFERINGS. 

14 Section 18(b)(4) of the Securities Act of 1933 (15 

15 U.S.C. 77r(b)(4)) is amended— 

16 (1) by striking ‘‘A security’’ and inserting ‘‘(A) 

17 IN GENERAL—A security’’; 

18 (2) by redesignating subparagraphs (A) through 

19 (D) as clauses (i) through (iv), respectively, and ad20 justing the margins accordingly; and 

21 (3) by striking clause (iv), as so redesignated, 

22 and inserting the following: 

23 ‘‘(iv) Commission rules or regulations 

24 issued under section 4(2), except that the 

25 Commission may designate, by rule, a class 


sroberts on DSKH9S0YB1PROD with BILLS
999 

•S 3217 AMDT 3739 

1 of securities that it deems not to be cov2 ered securities because the offering of such 

3 securities is not of sufficient size or scope. 

4 ‘‘(v) Not later than 360 days after the 

5 date of enactment of the Restoring Amer6 ican Financial Stability Act of 2010, the 

7 Commission shall conduct a rulemaking to 

8 determine whether to designate a class of 

9 securities because the offering of such se10 curities is not of sufficient size or scope. 

11 ‘‘(B) DESIGNATION OF NON-COVERED SE12 CURITIES.—In making a designation under sub13 paragraph (A)(iv), the Commission shall con14 sider— 

15 ‘‘(i) the size of the offering; 

16 ‘‘(ii) the number of States in which 

17 the security is being offered; and 

18 ‘‘(iii) the nature of the persons to 

19 whom the security is being offered. 

20 ‘‘(C) REVIEW OF FILINGS.— 

21 ‘‘(i) IN GENERAL.—The Commission 

22 shall review any filings made relating to 

23 any security issued under Commission 

24 rules or regulations under section 4(2), 

25 other than one designated as a non-covered 


sroberts on DSKH9S0YB1PROD with BILLS
1000 

•S 3217 AMDT 3739 

1 security under subparagraph (A)(iv), not 

2 later than 120 days of the filing with the 

3 Commission. 

4 ‘‘(ii) FAILURE TO REVIEW WITHIN 120

5 DAYS.—If the Commission fails to review a 

6 filing required under clause (i), the secu7 rity shall no longer be a covered security, 

8 except that— 

9 ‘‘(I) the failure of the Commis10 sion to review a filing shall not result 

11 in the loss of status as a covered secu12 rity if the Commission, not later than 

13 120 days of the filing with the Com14 mission, has determined that there 

15 has been a good faith and reasonable 

16 attempt by the issuer to comply with 

17 all applicable terms, conditions, and 

18 requirements of the filing; and 

19 ‘‘(II) upon review of the filing, if 

20 the Commission, not later than 120 

21 days of the filing with the Commis22 sion, determines that any failure to 

23 comply with the applicable filing 

24 terms, conditions, and requirements is 


sroberts on DSKH9S0YB1PROD with BILLS
1001 

•S 3217 AMDT 3739 

1 insignificant to the offering as a 

2 whole. 

3 ‘‘(D) EFFECT ON STATE FILING REQUIRE4 MENTS.— 

5 ‘‘(i) IN GENERAL.—Nothing in sub6 paragraph (A)(iv), (B), or (C) shall be con7 strued to prohibit a State from imposing 

8 notice filing requirements that are substan9 tially similar to filing requirements re10 quired by rule or regulation under section 

11 4(4) that were in effect on September 1, 

12 1996. 

13 ‘‘(ii) NOTIFICATION.—Not later than 

14 180 days after the date of enactment of 

15 the Restoring American Financial Stability 

16 Act of 2010, the Commission shall imple17 ment procedures, after consultation with 

18 the States, to promptly notify States upon 

19 completion of review of securities offerings 

20 described in subparagraph (A)(iv) by the 

21 Commission. 

22 ‘‘(E) OFFERINGS AFFECTED.—The re23 quirements of this section shall apply to offer24 ings filed on or after the date of enactment of 

25 the Restoring Financial Stability Act of 2010.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1002 

•S 3217 AMDT 3739 

1 SEC. 927. EQUAL TREATMENT OF SELF-REGULATORY ORGA2 NIZATION RULES. 

3 Section 29(a) of the Securities Exchange Act of 1934 

4 (15 U.S.C. 78cc(a)) is amended by striking ‘‘an exchange 

5 required thereby’’ and inserting ‘‘a self-regulatory organi6 zation,’’. 

7 SEC. 928. CLARIFICATION THAT SECTION 205 OF THE IN8 VESTMENT ADVISERS ACT OF 1940 DOES NOT 

9 APPLY TO STATE-REGISTERED ADVISERS. 

10 Section 205(a) of the Investment Advisers Act of 

11 1940 (15 U.S.C. 80b–5(a)) is amended, in the matter pre12 ceding paragraph (1)— 

13 (1) by striking ‘‘, unless exempt from registra14 tion pursuant to section 203(b),’’ and inserting 

15 ‘‘registered or required to be registered with the 

16 Commission’’; 

17 (2) by striking ‘‘make use of the mails or any 

18 means or instrumentality of interstate commerce, di19 rectly or indirectly, to’’; and 

20 (3) by striking ‘‘to’’ after ‘‘in any way’’. 

21 SEC. 929. UNLAWFUL MARGIN LENDING. 

22 Section 7(c)(1)(A) of the Securities Exchange Act of 

23 1934 (15 U.S.C. 78g(c)(1)(A)) is amended by striking ‘‘; 

24 and’’ and inserting ‘‘; or’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1003 

•S 3217 AMDT 3739 

1 SEC. 929A. PROTECTION FOR EMPLOYEES OF SUBSIDI2 ARIES AND AFFILIATES OF PUBLICLY TRAD3 ED COMPANIES. 

4 Section 1514A of title 18, United States Code, is 

5 amended by inserting ‘‘including any subsidiary or affil6 iate whose financial information is included in the consoli7 dated financial statements of such company’’ after ‘‘the 

8 Securities Exchange Act of 1934 (15 U.S.C. 78o(d))’’. 

9 SEC. 929B. FAIR FUND AMENDMENTS. 

10 Section 308 of the Sarbanes-Oxley Act of 2002 (15 

11 U.S.C. 7246(a)) is amended— 

12 (1) by striking subsection (a) and inserting the 

13 following: 

14 ‘‘(a) CIVIL PENALTIES TO BE USED FOR THE RE15 LIEF OF VICTIMS.—If, in any judicial or administrative 

16 action brought by the Commission under the securities 

17 laws, the Commission obtains a civil penalty against any 

18 person for a violation of such laws, or such person agrees, 

19 in settlement of any such action, to such civil penalty, the 

20 amount of such civil penalty shall, on the motion or at 

21 the direction of the Commission, be added to and become 

22 part of a disgorgement fund or other fund established for 

23 the benefit of the victims of such violation.’’; 

24 (2) in subsection (b)— 

25 (A) by striking ‘‘for a disgorgement fund 

26 described in subsection (a)’’ and inserting ‘‘for 


sroberts on DSKH9S0YB1PROD with BILLS
1004 

•S 3217 AMDT 3739 

1 a disgorgement fund or other fund described in 

2 subsection (a)’’; and 

3 (B) by striking ‘‘in the disgorgement fund’’ 

4 and inserting ‘‘in such fund’’; and 

5 (3) by striking subsection (e). 

6 SEC. 929C. INCREASING THE BORROWING LIMIT ON TREAS7 URY LOANS. 

8 Section 4(h) of the Securities Investor Protection Act 

9 of 1970 (15 U.S.C. 78ddd(h)) is amended in the first sen10 tence, by striking ‘‘$1,000,000,000’’ and inserting 

11 ‘‘$2,500,000,000’’. 

12 Subtitle C—Improvements to the 

13 Regulation of Credit Rating 

14 Agencies 

15 SEC. 931. FINDINGS. 

16 Congress finds the following: 

17 (1) Because of the systemic importance of cred18 it ratings and the reliance placed on credit ratings 

19 by individual and institutional investors and finan20 cial regulators, the activities and performances of 

21 credit rating agencies, including nationally recog22 nized statistical rating organizations, are matters of 

23 national public interest, as credit rating agencies are 

24 central to capital formation, investor confidence, and 


sroberts on DSKH9S0YB1PROD with BILLS
1005 

•S 3217 AMDT 3739 

1 the efficient performance of the United States econ2 omy. 

3 (2) Credit rating agencies, including nationally 

4 recognized statistical rating organizations, play a 

5 critical ‘‘gatekeeper’’ role in the debt market that is 

6 functionally similar to that of securities analysts, 

7 who evaluate the quality of securities in the equity 

8 market, and auditors, who review the financial state9 ments of firms. Such role justifies a similar level of 

10 public oversight and accountability. 

11 (3) Because credit rating agencies perform eval12 uative and analytical services on behalf of clients, 

13 much as other financial ‘‘gatekeepers’’ do, the activi14 ties of credit rating agencies are fundamentally com15 mercial in character and should be subject to the 

16 same standards of liability and oversight as apply to 

17 auditors, securities analysts, and investment bank18 ers. 

19 (4) In certain activities, particularly in advising 

20 arrangers of structured financial products on poten21 tial ratings of such products, credit rating agencies 

22 face conflicts of interest that need to be carefully 

23 monitored and that therefore should be addressed 

24 explicitly in legislation in order to give clearer au25 thority to the Securities and Exchange Commission. 


sroberts on DSKH9S0YB1PROD with BILLS
1006 

•S 3217 AMDT 3739 

1 (5) In the recent financial crisis, the ratings on 

2 structured financial products have proven to be inac3 curate. This inaccuracy contributed significantly to 

4 the mismanagement of risks by financial institutions 

5 and investors, which in turn adversely impacted the 

6 health of the economy in the United States and 

7 around the world. Such inaccuracy necessitates in8 creased accountability on the part of credit rating 

9 agencies. 

10 SEC. 932. ENHANCED REGULATION, ACCOUNTABILITY, AND 

11 TRANSPARENCY OF NATIONALLY RECOG12 NIZED STATISTICAL RATING ORGANIZA13 TIONS. 

14 Section 15E of the Securities Exchange Act of 1934 

15 (15 U.S.C. 78o–7) is amended— 

16 (1) in subsection (c)— 

17 (A) in paragraph (2)— 

18 (i) in the second sentence, by insert19 ing ‘‘any other provision of this section, 

20 or’’ after ‘‘Notwithstanding’’; and 

21 (ii) by inserting after the period at 

22 the end the following: ‘‘Nothing in this 

23 paragraph may be construed to afford a 

24 defense against any action or proceeding 

25 brought by the Commission to enforce the 


sroberts on DSKH9S0YB1PROD with BILLS
1007 

•S 3217 AMDT 3739 

1 antifraud provisions of the securities 

2 laws.’’; and 

3 (B) by adding at the end the following: 

4 ‘‘(3) INTERNAL CONTROLS OVER PROCESSES

5 FOR DETERMINING CREDIT RATINGS.— 

6 ‘‘(A) IN GENERAL.—Each nationally recog7 nized statistical rating organization shall estab8 lish, maintain, enforce, and document an effec9 tive internal control structure governing the im10 plementation of and adherence to policies, pro11 cedures, and methodologies for determining 

12 credit ratings, taking into consideration such 

13 factors as the Commission may prescribe, by 

14 rule. 

15 ‘‘(B) ATTESTATION REQUIREMENT.—The 

16 Commission shall prescribe rules requiring each 

17 nationally recognized statistical rating organiza18 tion to submit to the Commission an annual in19 ternal controls report, which shall contain— 

20 ‘‘(i) a description of the responsibility 

21 of the management of the nationally recog22 nized statistical rating organization in es23 tablishing and maintaining an effective in24 ternal control structure under subpara25 graph (A); 


sroberts on DSKH9S0YB1PROD with BILLS
1008 

•S 3217 AMDT 3739 

1 ‘‘(ii) an assessment of the effective2 ness of the internal control structure of the 

3 nationally recognized statistical rating or4 ganization; and 

5 ‘‘(iii) the attestation of the chief exec6 utive officer, or equivalent individual, of 

7 the nationally recognized statistical rating 

8 organization.’’; 

9 (2) in subsection (d)— 

10 (A) in the subsection heading, by inserting 

11 ‘‘FINE,’’ after ‘‘CENSURE,’’; 

12 (B) by inserting ‘‘fine,’’ after ‘‘censure,’’ 

13 each place that term appears; 

14 (C) in paragraph (2), by redesignating 

15 subparagraphs (A) and (B) as clauses (i) and 

16 (ii), respectively, and adjusting the clause mar17 gins accordingly; 

18 (D) by redesignating paragraphs (1) 

19 through (5) as subparagraphs (A) through (E), 

20 respectively, and adjusting the subparagraph 

21 margins accordingly; 

22 (E) in the matter preceding subparagraph 

23 (A), as so redesignated, by striking ‘‘The Com24 mission’’ and inserting the following: 

25 ‘‘(1) IN GENERAL.—The Commission’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1009 

•S 3217 AMDT 3739 

1 (F) in subparagraph (D), as so redesig2 nated, by striking ‘‘or’’ at the end; 

3 (G) in subparagraph (E), as so redesig4 nated, by striking the period at the end and in5 serting a semicolon; and 

6 (H) by adding at the end the following: 

7 ‘‘(F) has failed reasonably to supervise, 

8 with a view to preventing a violation of the se9 curities laws, an individual who commits such a 

10 violation, if the individual is subject to the su11 pervision of that person. 

12 ‘‘(2) SUSPENSION OR REVOCATION FOR PAR13 TICULAR CLASS OF SECURITIES.— 

14 ‘‘(A) IN GENERAL.—The Commission may 

15 temporarily suspend or permanently revoke the 

16 registration of a nationally recognized statistical 

17 rating organization with respect to a particular 

18 class or subclass of securities, if the Commis19 sion finds, on the record after notice and oppor20 tunity for hearing, that the nationally recog21 nized statistical rating organization does not 

22 have adequate financial and managerial re23 sources to consistently produce credit ratings 

24 with integrity. 


sroberts on DSKH9S0YB1PROD with BILLS
1010 

•S 3217 AMDT 3739 

1 ‘‘(B) CONSIDERATIONS.—In making any 

2 determination under subparagraph (A), the 

3 Commission shall consider— 

4 ‘‘(i) whether the nationally recognized 

5 statistical rating organization has failed 

6 over a sustained period of time, as deter7 mined by the Commission, to produce rat8 ings that are accurate for that class or 

9 subclass of securities; and 

10 ‘‘(ii) such other factors as the Com11 mission may determine.’’; 

12 (3) in subsection (h), by adding at the end the 

13 following: 

14 ‘‘(3) SEPARATION OF RATINGS FROM SALES

15 AND MARKETING.— 

16 ‘‘(A) RULES REQUIRED.—The Commission 

17 shall issue rules to prevent the sales and mar18 keting considerations of a nationally recognized 

19 statistical rating organization from influencing 

20 the production of ratings by the nationally rec21 ognized statistical rating organization. 

22 ‘‘(B) CONTENTS OF RULES.—The rules 

23 issued under subparagraph (A) shall provide 

24 for— 


sroberts on DSKH9S0YB1PROD with BILLS
1011 

•S 3217 AMDT 3739 

1 ‘‘(i) exceptions for small nationally 

2 recognized statistical rating organizations 

3 with respect to which the Commission de4 termines that the separation of the produc5 tion of ratings and sales and marketing ac6 tivities is not appropriate; and 

7 ‘‘(ii) suspension or revocation of the 

8 registration of a nationally recognized sta9 tistical rating organization, if the Commis10 sion finds, on the record, after notice and 

11 opportunity for a hearing, that— 

12 ‘‘(I) the nationally recognized 

13 statistical rating organization has 

14 committed a violation of a rule issued 

15 under this subsection; and 

16 ‘‘(II) the violation of a rule 

17 issued under this subsection affected a 

18 rating.’’; 

19 (4) in subsection (j)— 

20 (A) by striking ‘‘Each’’ and inserting the 

21 following: 

22 ‘‘(1) IN GENERAL.—Each’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(2) LIMITATIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1012 

•S 3217 AMDT 3739 

1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), an individual designated 

3 under paragraph (1) may not, while serving in 

4 the designated capacity— 

5 ‘‘(i) perform credit ratings; 

6 ‘‘(ii) participate in the development of 

7 ratings methodologies or models; 

8 ‘‘(iii) perform marketing or sales 

9 functions; or 

10 ‘‘(iv) participate in establishing com11 pensation levels, other than for employees 

12 working for that individual. 

13 ‘‘(B) EXCEPTION.—The Commission may 

14 exempt a small nationally recognized statistical 

15 rating organization from the limitations under 

16 this paragraph, if the Commission finds that 

17 compliance with such limitations would impose 

18 an unreasonable burden on the nationally recog19 nized statistical rating organization. 

20 ‘‘(3) OTHER DUTIES.—Each individual des21 ignated under paragraph (1) shall establish proce22 dures for the receipt, retention, and treatment of— 

23 ‘‘(A) complaints regarding credit ratings, 

24 models, methodologies, and compliance with the 


sroberts on DSKH9S0YB1PROD with BILLS
1013 

•S 3217 AMDT 3739 

1 securities laws and the policies and procedures 

2 developed under this section; and 

3 ‘‘(B) confidential, anonymous complaints 

4 by employees or users of credit ratings. 

5 ‘‘(4) ANNUAL REPORTS REQUIRED.— 

6 ‘‘(A) ANNUAL REPORTS REQUIRED.—Each 

7 individual designated under paragraph (1) shall 

8 submit to the nationally recognized statistical 

9 rating organization an annual report on the 

10 compliance of the nationally recognized statis11 tical rating organization with the securities laws 

12 and the policies and procedures of the nation13 ally recognized statistical rating organization 

14 that includes— 

15 ‘‘(i) a description of any material 

16 changes to the code of ethics and conflict 

17 of interest policies of the nationally recog18 nized statistical rating organization; and 

19 ‘‘(ii) a certification that the report is 

20 accurate and complete. 

21 ‘‘(B) SUBMISSION OF REPORTS TO THE

22 COMMISSION.—Each nationally recognized sta23 tistical rating organization shall file the reports 

24 required under subparagraph (A) together with 

25 the financial report that is required to be subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01013 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1014 

•S 3217 AMDT 3739 

1 mitted to the Commission under this section.’’; 

2 and 

3 (5) by striking subsection (p) and inserting the 

4 following: 

5 ‘‘(p) REGULATION OF NATIONALLY RECOGNIZED

6 STATISTICAL RATING ORGANIZATIONS.— 

7 ‘‘(1) ESTABLISHMENT OF OFFICE OF CREDIT

8 RATINGS.— 

9 ‘‘(A) OFFICE ESTABLISHED.—The Com10 mission shall establish within the Commission 

11 an Office of Credit Ratings (referred to in this 

12 subsection as the ‘Office’) to administer the 

13 rules of the Commission— 

14 ‘‘(i) with respect to the practices of 

15 nationally recognized statistical rating or16 ganizations in determining ratings, for the 

17 protection of users of credit ratings and in 

18 the public interest; 

19 ‘‘(ii) to promote accuracy in credit 

20 ratings issued by nationally recognized sta21 tistical rating organizations; and 

22 ‘‘(iii) to ensure that such ratings are 

23 not unduly influenced by conflicts of inter24 est. 


sroberts on DSKH9S0YB1PROD with BILLS
1015 

•S 3217 AMDT 3739 

1 ‘‘(B) DIRECTOR OF THE OFFICE.—The 

2 head of the Office shall be the Director, who 

3 shall report to the Chairman. 

4 ‘‘(2) STAFFING.—The Office established under 

5 this subsection shall be staffed sufficiently to carry 

6 out fully the requirements of this section. The staff 

7 shall include persons with knowledge of and exper8 tise in corporate, municipal, and structured debt fi9 nance. 

10 ‘‘(3) COMMISSION EXAMINATIONS.— 

11 ‘‘(A) ANNUAL EXAMINATIONS RE12 QUIRED.—The Office shall conduct an examina13 tion of each nationally recognized statistical 

14 rating organization at least annually. 

15 ‘‘(B) CONDUCT OF EXAMINATIONS.—Each 

16 examination under subparagraph (A) shall in17 clude a review of— 

18 ‘‘(i) whether the nationally recognized 

19 statistical rating organization conducts 

20 business in accordance with the policies, 

21 procedures, and rating methodologies of 

22 the nationally recognized statistical rating 

23 organization; 


sroberts on DSKH9S0YB1PROD with BILLS
1016 

•S 3217 AMDT 3739 

1 ‘‘(ii) the management of conflicts of 

2 interest by the nationally recognized statis3 tical rating organization; 

4 ‘‘(iii) implementation of ethics policies 

5 by the nationally recognized statistical rat6 ing organization; 

7 ‘‘(iv) the internal supervisory controls 

8 of the nationally recognized statistical rat9 ing organization; 

10 ‘‘(v) the governance of the nationally 

11 recognized statistical rating organization; 

12 ‘‘(vi) the activities of the individual 

13 designated by the nationally recognized 

14 statistical rating organization under sub15 section (j)(1); 

16 ‘‘(vii) the processing of complaints by 

17 the nationally recognized statistical rating 

18 organization; and 

19 ‘‘(viii) the policies of the nationally 

20 recognized statistical rating organization 

21 governing the post-employment activities of 

22 former staff of the nationally recognized 

23 statistical rating organization. 

24 ‘‘(C) INSPECTION REPORTS.—The Com25 mission shall make available to the public, in an 


sroberts on DSKH9S0YB1PROD with BILLS
1017 

•S 3217 AMDT 3739 

1 easily understandable format, an annual report 

2 summarizing— 

3 ‘‘(i) the essential findings of all ex4 aminations conducted under subparagraph 

5 (A), as deemed appropriate by the Com6 mission; 

7 ‘‘(ii) the responses by the nationally 

8 recognized statistical rating organizations 

9 to any material regulatory deficiencies 

10 identified by the Commission under clause 

11 (i); and 

12 ‘‘(iii) whether the nationally recog13 nized statistical rating organizations have 

14 appropriately addressed the recommenda15 tions of the Commission contained in pre16 vious reports under this subparagraph. 

17 ‘‘(4) RULEMAKING AUTHORITY.—The Commis18 sion shall— 

19 ‘‘(A) establish, by rule, fines, and other 

20 penalties applicable to any nationally recognized 

21 statistical rating organization that violates the 

22 requirements of this subsection and the rules 

23 thereunder; and 

24 ‘‘(B) issue such rules as may be necessary 

25 to carry out this subsection. 


sroberts on DSKH9S0YB1PROD with BILLS
1018 

•S 3217 AMDT 3739 

1 ‘‘(q) TRANSPARENCY OF RATINGS PERFORMANCE.— 

2 ‘‘(1) RULEMAKING REQUIRED.—The Commis3 sion shall, by rule, require that each nationally rec4 ognized statistical rating organization publicly dis5 close information on the initial credit ratings deter6 mined by the nationally recognized statistical rating 

7 organization for each type of obligor, security, and 

8 money market instrument, and any subsequent 

9 changes to such credit ratings, for the purpose of al10 lowing users of credit ratings to evaluate the accu11 racy of ratings and compare the performance of rat12 ings by different nationally recognized statistical rat13 ing organizations. 

14 ‘‘(2) CONTENT.—The rules of the Commission 

15 under this subsection shall require, at a minimum, 

16 disclosures that— 

17 ‘‘(A) are comparable among nationally rec18 ognized statistical rating organizations, to allow 

19 users of credit ratings to compare the perform20 ance of credit ratings across nationally recog21 nized statistical rating organizations; 

22 ‘‘(B) are clear and informative for inves23 tors who use or might use credit ratings; 

24 ‘‘(C) include performance information over 

25 a range of years and for a variety of types of 


sroberts on DSKH9S0YB1PROD with BILLS
1019 

•S 3217 AMDT 3739 

1 credit ratings, including for credit ratings with2 drawn by the nationally recognized statistical 

3 rating organization; 

4 ‘‘(D) are published and made freely avail5 able by the nationally recognized statistical rat6 ing organization, on an easily accessible portion 

7 of its website, and in writing, when requested; 

8 and 

9 ‘‘(E) are appropriate to the business model 

10 of a nationally recognized statistical rating or11 ganization. 

12 ‘‘(r) CREDIT RATINGS METHODOLOGIES.—The Com13 mission shall prescribe rules, for the protection of inves14 tors and in the public interest, with respect to the proce15 dures and methodologies, including qualitative and quan16 titative data and models, used by nationally recognized 

17 statistical rating organizations that require each nation18 ally recognized statistical rating organization— 

19 ‘‘(1) to ensure that credit ratings are deter20 mined using procedures and methodologies, includ21 ing qualitative and quantitative data and models, 

22 that are— 

23 ‘‘(A) approved by the board of the nation24 ally recognized statistical rating organization, a 

25 body performing a function similar to that of a 


sroberts on DSKH9S0YB1PROD with BILLS
1020 

•S 3217 AMDT 3739 

1 board, or the senior credit officer of the nation2 ally recognized statistical rating organization; 

3 and 

4 ‘‘(B) in accordance with the policies and 

5 procedures of the nationally recognized statis6 tical rating organization for the development 

7 and modification of credit rating procedures 

8 and methodologies; 

9 ‘‘(2) to ensure that when material changes to 

10 credit rating procedures and methodologies (includ11 ing changes to qualitative and quantitative data and 

12 models) are made, that— 

13 ‘‘(A) the changes are applied consistently 

14 to all credit ratings to which the changed proce15 dures and methodologies apply; 

16 ‘‘(B) to the extent that changes are made 

17 to credit rating surveillance procedures and 

18 methodologies, the changes are applied to then19 current credit ratings by the nationally recog20 nized statistical rating organization within a 

21 reasonable time period determined by the Com22 mission, by rule; and 

23 ‘‘(C) the nationally recognized statistical 

24 rating organization publicly discloses the reason 

25 for the change; and 


sroberts on DSKH9S0YB1PROD with BILLS
1021 

•S 3217 AMDT 3739 

1 ‘‘(3) to notify users of credit ratings— 

2 ‘‘(A) of the version of a procedure or meth3 odology, including the qualitative methodology 

4 or quantitative inputs, used with respect to a 

5 particular credit rating; 

6 ‘‘(B) when a material change is made to a 

7 procedure or methodology, including to a quali8 tative model or quantitative inputs; 

9 ‘‘(C) when a significant error is identified 

10 in a procedure or methodology, including a 

11 qualitative or quantitative model, that may re12 sult in credit rating actions; and 

13 ‘‘(D) of the likelihood of a material change 

14 described in subparagraph (B) resulting in a 

15 change in current credit ratings. 

16 ‘‘(s) TRANSPARENCY OF CREDIT RATING METH17 ODOLOGIES AND INFORMATION REVIEWED.— 

18 ‘‘(1) FORM FOR DISCLOSURES.—The Commis19 sion shall require, by rule, each nationally recognized 

20 statistical rating organization to prescribe a form to 

21 accompany the publication of each credit rating that 

22 discloses— 

23 ‘‘(A) information relating to— 


sroberts on DSKH9S0YB1PROD with BILLS
1022 

•S 3217 AMDT 3739 

1 ‘‘(i) the assumptions underlying the 

2 credit rating procedures and methodolo3 gies; 

4 ‘‘(ii) the data that was relied on to de5 termine the credit rating; and 

6 ‘‘(iii) if applicable, how the nationally 

7 recognized statistical rating organization 

8 used servicer or remittance reports, and 

9 with what frequency, to conduct surveil10 lance of the credit rating; and 

11 ‘‘(B) information that can be used by in12 vestors and other users of credit ratings to bet13 ter understand credit ratings in each class of 

14 credit rating issued by the nationally recognized 

15 statistical rating organization. 

16 ‘‘(2) FORMAT.—The form developed under 

17 paragraph (1) shall— 

18 ‘‘(A) be easy to use and helpful for users 

19 of credit ratings to understand the information 

20 contained in the report; 

21 ‘‘(B) require the nationally recognized sta22 tistical rating organization to provide the con23 tent described in paragraph (3)(B) in a manner 

24 that is directly comparable across types of secu25 rities; and 


sroberts on DSKH9S0YB1PROD with BILLS
1023 

•S 3217 AMDT 3739 

1 ‘‘(C) be made readily available to users of 

2 credit ratings, in electronic or paper form, as 

3 the Commission may, by rule, determine. 

4 ‘‘(3) CONTENT OF FORM.— 

5 ‘‘(A) QUALITATIVE CONTENT.—Each na6 tionally recognized statistical rating organiza7 tion shall disclose on the form developed under 

8 paragraph (1)— 

9 ‘‘(i) the credit ratings produced by the 

10 nationally recognized statistical rating or11 ganization; 

12 ‘‘(ii) the main assumptions and prin13 ciples used in constructing procedures and 

14 methodologies, including qualitative meth15 odologies and quantitative inputs and as16 sumptions about the correlation of defaults 

17 across obligors used in rating structured 

18 products; 

19 ‘‘(iii) the potential limitations of the 

20 credit ratings, and the types of risks ex21 cluded from the credit ratings that the na22 tionally recognized statistical rating orga23 nization does not comment on, including li24 quidity, market, and other risks; 


sroberts on DSKH9S0YB1PROD with BILLS
1024 

•S 3217 AMDT 3739 

1 ‘‘(iv) information on the uncertainty 

2 of the credit rating, including— 

3 ‘‘(I) information on the reli4 ability, accuracy, and quality of the 

5 data relied on in determining the 

6 credit rating; and 

7 ‘‘(II) a statement relating to the 

8 extent to which data essential to the 

9 determination of the credit rating 

10 were reliable or limited, including— 

11 ‘‘(aa) any limits on the 

12 scope of historical data; and 

13 ‘‘(bb) any limits in accessi14 bility to certain documents or 

15 other types of information that 

16 would have better informed the 

17 credit rating; 

18 ‘‘(v) whether and to what extent third 

19 party due diligence services have been used 

20 by the nationally recognized statistical rat21 ing organization, a description of the infor22 mation that such third party reviewed in 

23 conducting due diligence services, and a 

24 description of the findings or conclusions 

25 of such third party; 


sroberts on DSKH9S0YB1PROD with BILLS
1025 

•S 3217 AMDT 3739 

1 ‘‘(vi) a description of the data about 

2 any obligor, issuer, security, or money 

3 market instrument that were relied upon 

4 for the purpose of determining the credit 

5 rating; 

6 ‘‘(vii) a statement containing an over7 all assessment of the quality of information 

8 available and considered in producing a 

9 rating for an obligor, security, or money 

10 market instrument, in relation to the qual11 ity of information available to the nation12 ally recognized statistical rating organiza13 tion in rating similar issuances; 

14 ‘‘(viii) information relating to conflicts 

15 of interest of the nationally recognized sta16 tistical rating organization; and 

17 ‘‘(ix) such additional information as 

18 the Commission may require. 

19 ‘‘(B) QUANTITATIVE CONTENT.—Each na20 tionally recognized statistical rating organiza21 tion shall disclose on the form developed under 

22 this subsection— 

23 ‘‘(i) an explanation or measure of the 

24 potential volatility of the credit rating, in25 cluding— 


sroberts on DSKH9S0YB1PROD with BILLS
1026 

•S 3217 AMDT 3739 

1 ‘‘(I) any factors that might lead 

2 to a change in the credit ratings; and 

3 ‘‘(II) the magnitude of the 

4 change that a user can expect under 

5 different market conditions; 

6 ‘‘(ii) information on the content of the 

7 rating, including— 

8 ‘‘(I) the historical performance of 

9 the rating; and 

10 ‘‘(II) the expected probability of 

11 default and the expected loss in the 

12 event of default; 

13 ‘‘(iii) information on the sensitivity of 

14 the rating to assumptions made by the na15 tionally recognized statistical rating orga16 nization; and 

17 ‘‘(iv) such additional information as 

18 may be required by the Commission. 

19 ‘‘(4) DUE DILIGENCE SERVICES FOR ASSET20 BACKED SECURITIES.— 

21 ‘‘(A) FINDINGS.—The issuer or under22 writer of any asset-backed security shall make 

23 publicly available the findings and conclusions 

24 of any third-party due diligence report obtained 

25 by the issuer or underwriter. 


sroberts on DSKH9S0YB1PROD with BILLS
1027 

•S 3217 AMDT 3739 

1 ‘‘(B) CERTIFICATION REQUIRED.—In any 

2 case in which third-party due diligence services 

3 are employed by a nationally recognized statis4 tical rating organization, an issuer, or an un5 derwriter, the person providing the due dili6 gence services shall provide to any nationally 

7 recognized statistical rating organization that 

8 produces a rating to which such services relate, 

9 written certification, as provided in subpara10 graph (C). 

11 ‘‘(C) FORMAT AND CONTENT.—The Com12 mission shall establish the appropriate format 

13 and content for the written certifications re14 quired under subparagraph (B), to ensure that 

15 providers of due diligence services have con16 ducted a thorough review of data, documenta17 tion, and other relevant information necessary 

18 for a nationally recognized statistical rating or19 ganization to provide an accurate rating. 

20 ‘‘(D) DISCLOSURE OF CERTIFICATION.— 

21 The Commission shall adopt rules requiring a 

22 nationally recognized statistical rating organiza23 tion, at the time at which the nationally recog24 nized statistical rating organization produces a 

25 rating, to disclose the certification described in 


sroberts on DSKH9S0YB1PROD with BILLS
1028 

•S 3217 AMDT 3739 

1 subparagraph (B) to the public in a manner 

2 that allows the public to determine the ade3 quacy and level of due diligence services pro4 vided by a third party. 

5 ‘‘(t) CORPORATE GOVERNANCE, ORGANIZATION, AND

6 MANAGEMENT OF CONFLICTS OF INTEREST.— 

7 ‘‘(1) BOARD OF DIRECTORS.—Each nationally 

8 recognized statistical rating organization shall have 

9 a board of directors. 

10 ‘‘(2) INDEPENDENT DIRECTORS.— 

‘‘(A) IN GENERAL.—At least 1 11 ⁄2 of the 

12 board of directors, but not fewer than 2 of the 

13 members thereof, shall be independent of the 

14 nationally recognized statistical rating agency. 

15 A portion of the independent directors shall in16 clude users of ratings from a nationally recog17 nized statistical rating organization. 

18 ‘‘(B) INDEPENDENCE DETERMINATION.— 

19 In order to be considered independent for pur20 poses of this subsection, a member of the board 

21 of directors of a nationally recognized statistical 

22 rating organization— 

23 ‘‘(i) may not, other than in his or her 

24 capacity as a member of the board of di25 rectors or any committee thereof— 


sroberts on DSKH9S0YB1PROD with BILLS
1029 

•S 3217 AMDT 3739 

1 ‘‘(I) accept any consulting, advi2 sory, or other compensatory fee from 

3 the nationally recognized statistical 

4 rating organization; or 

5 ‘‘(II) be a person associated with 

6 the nationally recognized statistical 

7 rating organization or with any affili8 ated company thereof; and 

9 ‘‘(ii) shall be disqualified from any de10 liberation involving a specific rating in 

11 which the independent board member has 

12 a financial interest in the outcome of the 

13 rating. 

14 ‘‘(C) COMPENSATION AND TERM.—The 

15 compensation of the independent members of 

16 the board of directors of a nationally recognized 

17 statistical rating organization shall not be 

18 linked to the business performance of the na19 tionally recognized statistical rating organiza20 tion, and shall be arranged so as to ensure the 

21 independence of their judgment. The term of 

22 office of the independent directors shall be for 

23 a pre-agreed fixed period, not to exceed 5 years, 

24 and shall not be renewable. 


sroberts on DSKH9S0YB1PROD with BILLS
1030 

•S 3217 AMDT 3739 

1 ‘‘(3) DUTIES OF BOARD OF DIRECTORS.—In 

2 addition to the overall responsibilities of the board of 

3 directors, the board shall oversee— 

4 ‘‘(A) the establishment, maintenance, and 

5 enforcement of policies and procedures for de6 termining credit ratings; 

7 ‘‘(B) the establishment, maintenance, and 

8 enforcement of policies and procedures to ad9 dress, manage, and disclose any conflicts of in10 terest; 

11 ‘‘(C) the effectiveness of the internal con12 trol system with respect to policies and proce13 dures for determining credit ratings; and 

14 ‘‘(D) the compensation and promotion poli15 cies and practices of the nationally recognized 

16 statistical rating organization. 

17 ‘‘(4) TREATMENT OF NRSRO SUBSIDIARIES.—If 

18 a nationally recognized statistical rating organiza19 tion is a subsidiary of a parent entity, the board of 

20 the directors of the parent entity may satisfy the re21 quirements of this subsection by assigning to a com22 mittee of such board of directors the duties under 

23 paragraph (3), if— 

‘‘(A) at least 1 24 ⁄2 of the members of the 

25 committee (including the chairperson of the 


sroberts on DSKH9S0YB1PROD with BILLS
1031 

•S 3217 AMDT 3739 

1 committee) are independent, as defined in this 

2 section; and 

3 ‘‘(B) at least 1 member of the committee 

4 is a user of ratings from a nationally recognized 

5 statistical rating organization. 

6 ‘‘(5) EXCEPTION AUTHORITY.—If the Commis7 sion finds that compliance with the provisions of this 

8 subsection present an unreasonable burden on a 

9 small nationally recognized statistical rating organi10 zation, the Commission may permit the nationally 

11 recognized statistical rating organization to delegate 

12 such responsibilities to a committee that includes at 

13 least one individual who is a user of ratings of a na14 tionally recognized statistical rating organization.’’. 

15 SEC. 933. STATE OF MIND IN PRIVATE ACTIONS. 

16 (a) ACCOUNTABILITY.—Section 15E(m) of the Secu17 rities Exchange Act of 1934 (15 U.S.C. 78o–7(m)) is 

18 amended to read as follows: 

19 ‘‘(m) ACCOUNTABILITY.— 

20 ‘‘(1) IN GENERAL.—The enforcement and pen21 alty provisions of this title shall apply to statements 

22 made by a credit rating agency in the same manner 

23 and to the same extent as such provisions apply to 

24 statements made by a registered public accounting 

25 firm or a securities analyst under the securities laws, 


sroberts on DSKH9S0YB1PROD with BILLS
1032 

•S 3217 AMDT 3739 

1 and such statements shall not be deemed forward2 looking statements for the purposes of section 21E. 

3 ‘‘(2) RULEMAKING.—The Commission shall 

4 issue such rules as may be necessary to carry out 

5 this subsection.’’. 

6 (b) STATE OF MIND.—Section 21D(b)(2) of the Se7 curities Exchange Act of 1934 (15 U.S.C. 78u–4(b)(2)) 

8 is amended— 

9 (1) by striking ‘‘In any’’ and inserting the fol10 lowing: 

11 ‘‘(A) IN GENERAL.—Except as provided in 

12 subparagraph (B), in any’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(B) EXCEPTION.—In the case of an ac15 tion for money damages brought against a cred16 it rating agency or a controlling person under 

17 this title, it shall be sufficient, for purposes of 

18 pleading any required state of mind in relation 

19 to such action, that the complaint state with 

20 particularity facts giving rise to a strong infer21 ence that the credit rating agency knowingly or 

22 recklessly failed— 

23 ‘‘(i) to conduct a reasonable investiga24 tion of the rated security with respect to 


sroberts on DSKH9S0YB1PROD with BILLS
1033 

•S 3217 AMDT 3739 

1 the factual elements relied upon by its own 

2 methodology for evaluating credit risk; or 

3 ‘‘(ii) to obtain reasonable verification 

4 of such factual elements (which verification 

5 may be based on a sampling technique that 

6 does not amount to an audit) from other 

7 sources that the credit rating agency con8 sidered to be competent and that were 

9 independent of the issuer and under10 writer.’’. 

11 SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR 

12 REGULATORY AUTHORITIES. 

13 Section 15E of the Securities Exchange Act of 1934 

14 (15 U.S.C. 78o–7), as amended by this subtitle, is amend15 ed by adding at the end the following: 

16 ‘‘(u) DUTY TO REPORT TIPS ALLEGING MATERIAL

17 VIOLATIONS OF LAW.— 

18 ‘‘(1) DUTY TO REPORT.—Each nationally rec19 ognized statistical rating organization shall refer to 

20 the appropriate law enforcement or regulatory au21 thorities any information that the nationally recog22 nized statistical rating organization receives from a 

23 third party and finds credible that alleges that an 

24 issuer of securities rated by the nationally recog25 nized statistical rating organization has committed 


sroberts on DSKH9S0YB1PROD with BILLS
1034 

•S 3217 AMDT 3739 

1 or is committing a material violation of law that has 

2 not been adjudicated by a Federal or State court. 

3 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

4 paragraph (1) may be construed to require a nation5 ally recognized statistical rating organization to 

6 verify the accuracy of the information described in 

7 paragraph (1).’’. 

8 SEC. 935. CONSIDERATION OF INFORMATION FROM 

9 SOURCES OTHER THAN THE ISSUER IN RAT10 ING DECISIONS. 

11 Section 15E of the Securities Exchange Act of 1934 

12 (15 U.S.C. 78o–7), as amended by this subtitle, is amend13 ed by adding at the end the following: 

14 ‘‘(v) INFORMATION FROM SOURCES OTHER THAN

15 THE ISSUER.—In producing a credit rating, a nationally 

16 recognized statistical rating organization shall consider in17 formation about an issuer that the nationally recognized 

18 statistical rating organization has, or receives from a 

19 source other than the issuer, that the nationally recog20 nized statistical rating organization finds credible and po21 tentially significant to a rating decision.’’. 

22 SEC. 936. QUALIFICATION STANDARDS FOR CREDIT RAT23 ING ANALYSTS. 

24 Not later than 1 year after the date of enactment 

25 of this Act, the Commission shall issue rules that are reaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01034 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1035 

•S 3217 AMDT 3739 

1 sonably designed to ensure that any person employed by 

2 a nationally recognized statistical rating organization to 

3 perform credit ratings— 

4 (1) meets standards of training, experience, and 

5 competence necessary to produce accurate ratings 

6 for the categories of issuers whose securities the per7 son rates; and 

8 (2) is tested for knowledge of the credit rating 

9 process. 

10 SEC. 937. TIMING OF REGULATIONS. 

11 Unless otherwise specifically provided in this subtitle, 

12 the Commission shall issue final regulations, as required 

13 by this subtitle and the amendments made by this subtitle, 

14 not later than 1 year after the date of enactment of this 

15 Act. 

16 SEC. 938. UNIVERSAL RATINGS SYMBOLS. 

17 (a) RULEMAKING.—The Commission shall require, by 

18 rule, each nationally recognized statistical rating organiza19 tion to establish, maintain, and enforce written policies 

20 and procedures that— 

21 (1) assess the probability that an issuer of a se22 curity or money market instrument will default, fail 

23 to make timely payments, or otherwise not make 

24 payments to investors in accordance with the terms 

25 of the security or money market instrument; 


sroberts on DSKH9S0YB1PROD with BILLS
1036 

•S 3217 AMDT 3739 

1 (2) clearly define and disclose the meaning of 

2 any symbol used by the nationally recognized statis3 tical rating organization to denote a credit rating; 

4 and 

5 (3) apply any symbol described in paragraph 

6 (2) in a manner that is consistent for all types of 

7 securities and money market instruments for which 

8 the symbol is used. 

9 (b) RULE OF CONSTRUCTION.—Nothing in this sec10 tion shall prohibit a nationally recognized statistical rating 

11 organization from using distinct sets of symbols to denote 

12 credit ratings for different types of securities or money 

13 market instruments. 

14 SEC. 939. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

15 AND FEDERAL AGENCY REVIEW OF RE16 QUIRED USES OF NATIONALLY RECOGNIZED 

17 STATISTICAL RATING ORGANIZATION RAT18 INGS. 

19 (a) STUDY.—The Comptroller General of the United 

20 States shall conduct a study of the scope of provisions of 

21 Federal and State laws and regulations with respect to 

22 the regulation of securities markets, banking, insurance, 

23 and other areas that require the use of ratings issued by 

24 nationally recognized statistical rating organizations (in 

25 this section referred to as the ‘‘ratings requirements’’). 


sroberts on DSKH9S0YB1PROD with BILLS
1037 

•S 3217 AMDT 3739 

1 (b) SUBJECTS FOR EVALUATION; PROCESS OF EVAL2 UATION.— 

3 (1) SUBJECTS FOR EVALUATION.—In con4 ducting the study under subsection (a), the Comp5 troller General of the United States shall evaluate— 

6 (A) the necessity for and purpose of rat7 ings requirements; 

8 (B) which ratings requirements, if any, 

9 could be removed with minimal disruption to 

10 the financial markets; 

11 (C) the potential impact on the financial 

12 markets and on investors if the ratings require13 ments identified under subparagraph (B) were 

14 rescinded; and 

15 (D) whether the financial markets and in16 vestors would benefit from the rescission of 

17 such ratings requirements. 

18 (2) PROCESS OF EVALUATION.—In conducting 

19 the study under subsection (a), the Comptroller Gen20 eral of the United States shall research and take 

21 into consideration the views of— 

22 (A) the Federal financial regulatory agen23 cies; 

24 (B) hedge funds; 

25 (C) banks; 


sroberts on DSKH9S0YB1PROD with BILLS
1038 

•S 3217 AMDT 3739 

1 (D) brokerage firms; 

2 (E) mutual funds; 

3 (F) pension funds; and 

4 (G) all other interested parties. 

5 (c) REPORT AND RECOMMENDATIONS.—Not later 

6 than 2 years after the date of enactment of this Act, the 

7 Comptroller General of the United States shall submit to 

8 the Committee on Banking, Housing, and Urban Affairs 

9 of the Senate and the Committee on Financial Services 

10 of the House of Representatives a report on the results 

11 of the study conducted under subsection (a), including rec12 ommendations, if any, on— 

13 (1) which ratings requirements, if any, could be 

14 removed with minimal disruption to the markets; 

15 and 

16 (2) whether the financial markets and investors 

17 would benefit from the rescission of the ratings re18 quirements identified under paragraph (1). 

19 (d) FEDERAL AGENCY REVIEW OF RATINGS RE20 QUIREMENTS.— 

21 (1) REVIEW.—Each covered Federal agency 

22 shall review— 

23 (A) any regulation of the covered Federal 

24 agency that requires the use of an assessment 


sroberts on DSKH9S0YB1PROD with BILLS
1039 

•S 3217 AMDT 3739 

1 of the credit worthiness of a security or money 

2 market instrument; 

3 (B) any other reference to credit ratings or 

4 requirement relating to credit ratings in a regu5 lation of the covered Federal agency; and 

6 (C) alternative standards of creditworthi7 ness that are based on market-generated indica8 tors, including yield spreads, bond prices, and 

9 credit default swap spreads. 

10 (2) MODIFICATIONS REQUIRED.—Except as 

11 provided in paragraph (3), each covered Federal 

12 agency shall modify any regulation identified under 

13 paragraph (1)— 

14 (A) to remove any reference to credit rat15 ings or a credit ratings requirement in the reg16 ulation; and 

17 (B) to amend the regulation to require the 

18 use of a standard of credit worthiness that— 

19 (i) is not related to credit ratings; and 

20 (ii) the covered Federal agency deter21 mines appropriate. 

22 (3) EXCEPTION.—A covered Federal agency 

23 may elect not to amend a regulation identified under 

24 paragraph (1), if the covered Federal agency deter25 mines that— 


sroberts on DSKH9S0YB1PROD with BILLS
1040 

•S 3217 AMDT 3739 

1 (A) there is no reasonable alternative 

2 standard of credit worthiness that could replace 

3 a credit rating for purposes of the regulation; 

4 and 

5 (B) an amendment to the regulation would 

6 be inconsistent with the purposes of the statute 

7 that authorized the regulation and not in the 

8 public interest. 

9 (4) REPORT.—Not later than 1 year after the 

10 date on which the Comptroller General submits the 

11 report required under subsection (c), each covered 

12 Federal agency shall submit to Congress a report 

13 that contains— 

14 (A) a description of any amendment under 

15 paragraph (2); and 

16 (B) an explanation of any determination 

17 under paragraph (3). 

18 (5) DEFINITION.—In this subsection, the term 

19 ‘‘covered Federal agency’’ means— 

20 (A) the Commission; 

21 (B) the Corporation; 

22 (C) the Office of the Comptroller of the 

23 Currency; 

24 (D) the Board of Governors; 


sroberts on DSKH9S0YB1PROD with BILLS
1041 

•S 3217 AMDT 3739 

1 (E) the National Credit Union Administra2 tion; and 

3 (F) the Federal Housing Finance Agency. 

4 SEC. 939A. SECURITIES AND EXCHANGE COMMISSION 

5 STUDY ON STRENGTHENING CREDIT RATING 

6 AGENCY INDEPENDENCE. 

7 (a) STUDY.—The Commission shall conduct a study 

8 of— 

9 (1) the independence of nationally recognized 

10 statistical rating organizations; and 

11 (2) how the independence of nationally recog12 nized statistical rating organizations affects the rat13 ings issued by the nationally recognized statistical 

14 rating organizations. 

15 (b) SUBJECTS FOR EVALUATION.—In conducting the 

16 study under subsection (a), the Commission shall evalu17 ate— 

18 (1) the management of conflicts of interest 

19 raised by a nationally recognized statistical rating 

20 organization providing other services, including risk 

21 management advisory services, ancillary assistance, 

22 or consulting services; 

23 (2) the potential impact of rules prohibiting a 

24 nationally recognized statistical rating organization 


sroberts on DSKH9S0YB1PROD with BILLS
1042 

•S 3217 AMDT 3739 

1 that provides a rating to an issuer from providing 

2 other services to the issuer; and 

3 (3) any other issue relating to nationally recog4 nized statistical rating organizations, as the Chair5 man of the Commission determines is appropriate. 

6 (c) REPORT.—Not later than 3 years after the date 

7 of enactment of this Act, the Chairman of the Commission 

8 shall submit to the Committee on Banking, Housing, and 

9 Urban Affairs of the Senate and the Committee on Finan10 cial Services of the House of Representatives a report on 

11 the results of the study conducted under subsection (a), 

12 including recommendations, if any, for improving the in13 tegrity of ratings issued by nationally recognized statis14 tical rating organizations. 

15 SEC. 939B. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

16 ON ALTERNATIVE BUSINESS MODELS. 

17 (a) STUDY.—The Comptroller General of the United 

18 States shall conduct a study on alternative means for com19 pensating nationally recognized statistical rating organiza20 tions in order to create incentives for nationally recognized 

21 statistical rating organizations to provide more accurate 

22 credit ratings, including any statutory changes that would 

23 be required to facilitate the use of an alternative means 

24 of compensation. 


sroberts on DSKH9S0YB1PROD with BILLS
1043 

•S 3217 AMDT 3739 

1 (b) REPORT.—Not later than 1 year after the date 

2 of enactment of this Act, the Comptroller General shall 

3 submit to the Committee on Banking, Housing, and 

4 Urban Affairs of the Senate and the Committee on Finan5 cial Services of the House of Representatives a report on 

6 the results of the study conducted under subsection (a), 

7 including recommendations, if any, for providing incen8 tives to credit rating agencies to improve the credit rating 

9 process. 

10 SEC. 939C. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

11 ON THE CREATION OF AN INDEPENDENT 

12 PROFESSIONAL ANALYST ORGANIZATION. 

13 (a) STUDY.—The Comptroller General of the United 

14 States shall conduct a study on the feasibility and merits 

15 of creating an independent professional organization for 

16 rating analysts employed by nationally recognized statis17 tical rating organizations that would be responsible for— 

18 (1) establishing independent standards for gov19 erning the profession of rating analysts; 

20 (2) establishing a code of ethical conduct; and 

21 (3) overseeing the profession of rating analysts. 

22 (b) REPORT.—Not later than 1 year after the date 

23 of enactment of this Act, the Comptroller General shall 

24 submit to the Committee on Banking, Housing, and 

25 Urban Affairs of the Senate and the Committee on FinanVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01043 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1044 

•S 3217 AMDT 3739 

1 cial Services of the House of Representatives a report on 

2 the results of the study conducted under subsection (a). 

3 Subtitle D—Improvements to the 

4 Asset-Backed Securitization 

5 Process 

6 SEC. 941. REGULATION OF CREDIT RISK RETENTION. 

7 (a) DEFINITION OF ASSET-BACKED SECURITY.—Sec8 tion 3(a) of the Securities Exchange Act of 1934 (15 

9 U.S.C. 78c(a)) is amended by adding at the end the fol10 lowing: 

11 ‘‘(77) ASSET-BACKED SECURITY.—The term 

12 ‘asset-backed security’— 

13 ‘‘(A) means a fixed-income or other secu14 rity collateralized by any type of self-liquidating 

15 financial asset (including a loan, a lease, a 

16 mortgage, or a secured or unsecured receivable) 

17 that allows the holder of the security to receive 

18 payments that depend primarily on cash flow 

19 from the asset, including— 

20 ‘‘(i) a collateralized mortgage obliga21 tion; 

22 ‘‘(ii) a collateralized debt obligation; 

23 ‘‘(iii) a collateralized bond obligation; 

24 ‘‘(iv) a collateralized debt obligation of 

25 asset-backed securities; 


sroberts on DSKH9S0YB1PROD with BILLS
1045 

•S 3217 AMDT 3739 

1 ‘‘(v) a collateralized debt obligation of 

2 collateralized debt obligations; and 

3 ‘‘(vi) a security that the Commission, 

4 by rule, determines to be an asset-backed 

5 security for purposes of this section; and 

6 ‘‘(B) does not include a security issued by 

7 a finance subsidiary held by the parent com8 pany or a company controlled by the parent 

9 company, if none of the securities issued by the 

10 finance subsidiary are held by an entity that is 

11 not controlled by the parent company.’’. 

12 (b) CREDIT RISK RETENTION.—The Securities Ex13 change Act of 1934 (15 U.S.C. 78a et seq.) is amended 

14 by inserting after section 15F, as added by this Act, the 

15 following: 

16 ‘‘SEC. 15G. CREDIT RISK RETENTION. 

17 ‘‘(a) DEFINITIONS.—In this section— 

18 ‘‘(1) the term ‘Federal banking agencies’ means 

19 the Office of the Comptroller of the Currency and 

20 the Federal Deposit Insurance Corporation; 

21 ‘‘(2) the term ‘insured depository institution’ 

22 has the same meaning as in section 3(c) of the Fed23 eral Deposit Insurance Act (12 U.S.C. 1813(c)); 

24 ‘‘(3) the term ‘securitizer’ means— 


sroberts on DSKH9S0YB1PROD with BILLS
1046 

•S 3217 AMDT 3739 

1 ‘‘(A) an issuer of an asset-backed security; 

2 or 

3 ‘‘(B) a person who organizes and initiates 

4 an asset-backed securities transaction by selling 

5 or transferring assets, either directly or indi6 rectly, including through an affiliate, to the 

7 issuer; and 

8 ‘‘(4) the term ‘originator’ means a person 

9 who— 

10 ‘‘(A) through the extension of credit or 

11 otherwise, creates a financial asset that 

12 collateralizes an asset-backed security; and 

13 ‘‘(B) sells an asset to a securitizer. 

14 ‘‘(b) IN GENERAL.—Not later than 270 days after 

15 the date of enactment of this section, the Federal banking 

16 agencies and the Commission shall jointly prescribe regu17 lations to require any securitizer to retain an economic 

18 interest in a portion of the credit risk for any asset that 

19 the securitizer, through the issuance of an asset-backed 

20 security, transfers, sells, or conveys to a third party. 

21 ‘‘(c) STANDARDS FOR REGULATIONS.— 

22 ‘‘(1) STANDARDS.—The regulations prescribed 

23 under subsection (b) shall— 

24 ‘‘(A) prohibit a securitizer from directly or 

25 indirectly hedging or otherwise transferring the 


sroberts on DSKH9S0YB1PROD with BILLS
1047 

•S 3217 AMDT 3739 

1 credit risk that the securitizer is required to re2 tain with respect to an asset; 

3 ‘‘(B) require a securitizer to retain— 

4 ‘‘(i) not less than 5 percent of the 

5 credit risk for any asset that is trans6 ferred, sold, or conveyed through the 

7 issuance of an asset-backed security by the 

8 securitizer; or 

9 ‘‘(ii) less than 5 percent of the credit 

10 risk for an asset that is transferred, sold, 

11 or conveyed through the issuance of an 

12 asset-backed security by the securitizer, if 

13 the originator of the asset meets the un14 derwriting standards prescribed under 

15 paragraph (2)(B); 

16 ‘‘(C) specify— 

17 ‘‘(i) the permissible forms of risk re18 tention for purposes of this section; and 

19 ‘‘(ii) the minimum duration of the 

20 risk retention required under this section; 

21 ‘‘(D) apply, regardless of whether the 

22 securitizer is an insured depository institution; 

23 and 

24 ‘‘(E) provide for— 


sroberts on DSKH9S0YB1PROD with BILLS
1048 

•S 3217 AMDT 3739 

1 ‘‘(i) a total or partial exemption of 

2 any securitization, as may be appropriate 

3 in the public interest and for the protec4 tion of investors; and 

5 ‘‘(ii) the allocation of risk retention 

6 obligations between a securitizer and an 

7 originator in the case of a securitizer that 

8 purchases assets from an originator, as the 

9 Federal banking agencies and the Commis10 sion jointly determine appropriate. 

11 ‘‘(2) ASSET CLASSES.— 

12 ‘‘(A) ASSET CLASSES.—The regulations 

13 prescribed under subsection (b) shall establish 

14 asset classes with separate rules for securitizers 

15 of different classes of assets, including residen16 tial mortgages, commercial mortgages, commer17 cial loans, auto loans, and any other class of as18 sets that the Federal banking agencies and the 

19 Commission deem appropriate. 

20 ‘‘(B) CONTENTS.—For each asset class es21 tablished under subparagraph (A), the regula22 tions prescribed under subsection (b) shall es23 tablish underwriting standards that specify the 

24 terms, conditions, and characteristics of a loan 


sroberts on DSKH9S0YB1PROD with BILLS
1049 

•S 3217 AMDT 3739 

1 within the asset class that indicate a reduced 

2 credit risk with respect to the loan. 

3 ‘‘(d) ORIGINATORS.—In determining how to allocate 

4 risk retention obligations between a securitizer and an 

5 originator under subsection (c)(1)(E)(ii), the Federal 

6 banking agencies and the Commission shall— 

7 ‘‘(1) reduce the percentage of risk retention ob8 ligations required of the securitizer by the percent9 age of risk retention obligations required of the 

10 originator; and 

11 ‘‘(2) consider— 

12 ‘‘(A) whether the assets sold to the 

13 securitizer have terms, conditions, and charac14 teristics that reflect reduced credit risk; 

15 ‘‘(B) whether the form or volume of trans16 actions in securitization markets creates incen17 tives for imprudent origination of the type of 

18 loan or asset to be sold to the securitizer; and 

19 ‘‘(C) the potential impact of the risk reten20 tion obligations on the access of consumers and 

21 businesses to credit on reasonable terms, which 

22 may not include the transfer of credit risk to a 

23 third party. 

24 ‘‘(e) EXEMPTIONS, EXCEPTIONS, AND ADJUST25 MENTS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1050 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—The Federal banking agen2 cies and the Commission may jointly adopt or issue 

3 exemptions, exceptions, or adjustments to the rules 

4 issued under this section, including exemptions, ex5 ceptions, or adjustments for classes of institutions or 

6 assets relating to the risk retention requirement and 

7 the prohibition on hedging under subsection (c)(1). 

8 ‘‘(2) APPLICABLE STANDARDS.—Any exemp9 tion, exception, or adjustment adopted or issued by 

10 the Federal banking agencies and the Commission 

11 under this paragraph shall— 

12 ‘‘(A) help ensure high quality underwriting 

13 standards for the securitizers and originators of 

14 assets that are securitized or available for 

15 securitization; and 

16 ‘‘(B) encourage appropriate risk manage17 ment practices by the securitizers and origina18 tors of assets, improve the access of consumers 

19 and businesses to credit on reasonable terms, or 

20 otherwise be in the public interest and for the 

21 protection of investors. 

22 ‘‘(3) FARM CREDIT SYSTEM INSTITUTIONS.—A 

23 Farm Credit System institution, including the Fed24 eral Agricultural Mortgage Corporation, that is 

25 chartered and subject to the provisions of the Farm 


sroberts on DSKH9S0YB1PROD with BILLS
1051 

•S 3217 AMDT 3739 

1 Credit Act of 1971, as amended (12 U.S.C. 2001 et 

2 seq.), shall be exempt from the risk retention provi3 sions of this subsection. 

4 ‘‘(f) ENFORCEMENT.—The regulations issued under 

5 this section shall be enforced by— 

6 ‘‘(1) the appropriate Federal banking agency, 

7 with respect to any securitizer that is an insured de8 pository institution; and 

9 ‘‘(2) the Commission, with respect to any 

10 securitizer that is not an insured depository institu11 tion. 

12 ‘‘(g) AUTHORITY OF COMMISSION.—The authority of 

13 the Commission under this section shall be in addition to 

14 the authority of the Commission to otherwise enforce the 

15 securities laws. 

16 ‘‘(h) EFFECTIVE DATE OF REGULATIONS.—The reg17 ulations issued under this section shall become effective— 

18 ‘‘(1) with respect to securitizers and originators 

19 of asset-backed securities backed by residential 

20 mortgages, 1 year after the date on which final rules 

21 under this section are published in the Federal Reg22 ister; and 

23 ‘‘(2) with respect to securitizers and originators 

24 of all other classes of asset-backed securities, 2 years 


sroberts on DSKH9S0YB1PROD with BILLS
1052 

•S 3217 AMDT 3739 

1 after the date on which final rules under this section 

2 are published in the Federal Register.’’. 

3 SEC. 942. DISCLOSURES AND REPORTING FOR ASSET4 BACKED SECURITIES. 

5 (a) SECURITIES EXCHANGE ACT OF 1934.—Section 

6 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 

7 78o(d)) is amended— 

8 (1) by striking ‘‘(d) Each’’ and inserting the 

9 following: 

10 ‘‘(d) SUPPLEMENTARY AND PERIODIC INFORMA11 TION.— 

12 ‘‘(1) IN GENERAL.—Each’’; 

13 (2) in the third sentence, by inserting after ‘‘se14 curities of each class’’ the following: ‘‘, other than 

15 any class of asset-backed securities,’’; and 

16 (3) by adding at the end the following: 

17 ‘‘(2) ASSET-BACKED SECURITIES.— 

18 ‘‘(A) SUSPENSION OF DUTY TO FILE.—The 

19 Commission may, by rule or regulation, provide 

20 for the suspension or termination of the duty to 

21 file under this subsection for any class of asset22 backed security, on such terms and conditions 

23 and for such period or periods as the Commis24 sion deems necessary or appropriate in the pub25 lic interest or for the protection of investors. 


sroberts on DSKH9S0YB1PROD with BILLS
1053 

•S 3217 AMDT 3739 

1 ‘‘(B) CLASSIFICATION OF ISSUERS.—The 

2 Commission may, for purposes of this sub3 section, classify issuers and prescribe require4 ments appropriate for each class of issuers of 

5 asset-backed securities.’’. 

6 (b) SECURITIES ACT OF 1933.—Section 7 of the Se7 curities Act of 1933 (15 U.S.C. 77g) is amended by add8 ing at the end the following: 

9 ‘‘(c) DISCLOSURE REQUIREMENTS.— 

10 ‘‘(1) IN GENERAL.—The Commission shall 

11 adopt regulations under this subsection requiring 

12 each issuer of an asset-backed security to disclose, 

13 for each tranche or class of security, information re14 garding the assets backing that security. 

15 ‘‘(2) CONTENT OF REGULATIONS.—In adopting 

16 regulations under this subsection, the Commission 

17 shall— 

18 ‘‘(A) set standards for the format of the 

19 data provided by issuers of an asset-backed se20 curity, which shall, to the extent feasible, facili21 tate comparison of such data across securities 

22 in similar types of asset classes; and 

23 ‘‘(B) require issuers of asset-backed securi24 ties, at a minimum, to disclose asset-level or 


sroberts on DSKH9S0YB1PROD with BILLS
1054 

•S 3217 AMDT 3739 

1 loan-level data necessary for investors to inde2 pendently perform due diligence, including— 

3 ‘‘(i) data having unique identifiers re4 lating to loan brokers or originators; 

5 ‘‘(ii) the nature and extent of the 

6 compensation of the broker or originator of 

7 the assets backing the security; and 

8 ‘‘(iii) the amount of risk retention by 

9 the originator and the securitizer of such 

10 assets.’’. 

11 SEC. 943. REPRESENTATIONS AND WARRANTIES IN ASSET12 BACKED OFFERINGS. 

13 Not later than 180 days after the date of enactment 

14 of this Act, the Securities and Exchange Commission shall 

15 prescribe regulations on the use of representations and 

16 warranties in the market for asset-backed securities (as 

17 that term is defined in section 3(a)(77) of the Securities 

18 Exchange Act of 1934, as added by this subtitle) that— 

19 (1) require each national recognized statistical 

20 rating organization to include in any report accom21 panying a credit rating a description of— 

22 (A) the representations, warranties, and 

23 enforcement mechanisms available to investors; 

24 and 


sroberts on DSKH9S0YB1PROD with BILLS
1055 

•S 3217 AMDT 3739 

1 (B) how they differ from the representa2 tions, warranties, and enforcement mechanisms 

3 in issuances of similar securities; and 

4 (2) require any securitizer (as that term is de5 fined in section 15G(a) of the Securities Exchange 

6 Act of 1934, as added by this subtitle) to disclose 

7 fulfilled and unfulfilled repurchase requests across 

8 all trusts aggregated by the securitizer, so that in9 vestors may identify asset originators with clear un10 derwriting deficiencies. 

11 SEC. 944. EXEMPTED TRANSACTIONS UNDER THE SECURI12 TIES ACT OF 1933. 

13 (a) EXEMPTION ELIMINATED.—Section 4 of the Se14 curities Act of 1933 (15 U.S.C. 77d) is amended— 

15 (1) by striking paragraph (5); and 

16 (2) by striking ‘‘(6) transactions’’ and inserting 

17 the following: 

18 ‘‘(5) transactions’’. 

19 (b) CONFORMING AMENDMENT.—Section 

20 3(a)(4)(B)(vii)(I) of the Securities Exchange Act of 1934 

21 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is amended by striking 

22 ‘‘4(6)’’ and inserting ‘‘4(5)’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1056 

•S 3217 AMDT 3739 

1 SEC. 945. DUE DILIGENCE ANALYSIS AND DISCLOSURE IN 

2 ASSET-BACKED SECURITIES ISSUES. 

3 Section 7 of the Securities Act of 1933 (15 U.S.C. 

4 77g), as amended by this subtitle, is amended by adding 

5 at the end the following: 

6 ‘‘(d) REGISTRATION STATEMENT FOR ASSET7 BACKED SECURITIES.—Not later than 180 days after the 

8 date of enactment of this subsection, the Commission shall 

9 issue rules relating to the registration statement required 

10 to be filed by any issuer of an asset-backed security (as 

11 that term is defined in section 3(a)(77) of the Securities 

12 Exchange Act of 1934) that require any issuer of an asset13 backed security— 

14 ‘‘(1) to perform a due diligence analysis of the 

15 assets underlying the asset-backed security; and 

16 ‘‘(2) to disclose the nature of the analysis under 

17 paragraph (1).’’. 

18 Subtitle E—Accountability and 

19 Executive Compensation 

20 SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSA21 TION DISCLOSURES. 

22 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

23 et seq.) is amended by inserting after section 14 (15 

24 U.S.C. 78n) the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1057 

•S 3217 AMDT 3739 

1 ‘‘SEC. 14A. ANNUAL SHAREHOLDER APPROVAL OF EXECU2 TIVE COMPENSATION. 

3 ‘‘(a) SEPARATE RESOLUTION REQUIRED.—Any 

4 proxy or consent or authorization for an annual or other 

5 meeting of the shareholders occurring after the end of the 

6 6-month period beginning on the date of enactment of this 

7 section, for which the proxy solicitation rules of the Com8 mission require compensation disclosure, shall include a 

9 separate resolution subject to shareholder vote to approve 

10 the compensation of executives, as disclosed pursuant to 

11 section 229.402 of title 17, Code of Federal Regulations, 

12 or any successor thereto. 

13 ‘‘(b) RULE OF CONSTRUCTION.—The shareholder 

14 vote referred to in subsection (a) shall not be binding on 

15 the issuer or the board of directors of an issuer, and may 

16 not be construed— 

17 ‘‘(1) as overruling a decision by such issuer or 

18 board of directors; 

19 ‘‘(2) to create or imply any change to the fidu20 ciary duties of such issuer or board of directors; 

21 ‘‘(3) to create or imply any additional fiduciary 

22 duties for such issuer or board of directors; or 

23 ‘‘(4) to restrict or limit the ability of share24 holders to make proposals for inclusion in proxy ma25 terials related to executive compensation.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1058 

•S 3217 AMDT 3739 

1 SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE. 

2 The Securities Exchange Act of 1934 (15 U.S.C. 78 

3 et seq.) is amended by inserting after section 10B, as 

4 added by section 753, the following: 

5 ‘‘SEC. 10C. COMPENSATION COMMITTEES. 

6 ‘‘(a) INDEPENDENCE OF COMPENSATION COMMIT7 TEES.— 

8 ‘‘(1) LISTING STANDARDS.—The Commission 

9 shall, by rule, direct the national securities ex10 changes and national securities associations to pro11 hibit the listing of any security of an issuer that 

12 does not comply with the requirements of this sub13 section. 

14 ‘‘(2) INDEPENDENCE OF COMPENSATION COM15 MITTEES.—The rules of the Commission under para16 graph (1) shall require that each member of the 

17 compensation committee of the board of directors of 

18 an issuer be— 

19 ‘‘(A) a member of the board of directors of 

20 the issuer; and 

21 ‘‘(B) independent. 

22 ‘‘(3) INDEPENDENCE.—The rules of the Com23 mission under paragraph (1) shall require that, in 

24 determining the definition of the term ‘independ25 ence’ for purposes of paragraph (2), the national seVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01058 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1059 

•S 3217 AMDT 3739 

1 curities exchanges and the national securities asso2 ciations shall consider relevant factors, including— 

3 ‘‘(A) the source of compensation of a mem4 ber of the board of directors of an issuer, in5 cluding any consulting, advisory, or other com6 pensatory fee paid by the issuer to such mem7 ber of the board of directors; and 

8 ‘‘(B) whether a member of the board of di9 rectors of an issuer is affiliated with the issuer, 

10 a subsidiary of the issuer, or an affiliate of a 

11 subsidiary of the issuer. 

12 ‘‘(4) EXEMPTION AUTHORITY.—The rules of 

13 the Commission under paragraph (1) shall permit a 

14 national securities exchange or a national securities 

15 association to exempt a particular relationship from 

16 the requirements of paragraph (2), with respect to 

17 the members of a compensation committee, as the 

18 national securities exchange or national securities 

19 association determines is appropriate, taking into 

20 consideration the size of an issuer and any other rel21 evant factors. 

22 ‘‘(b) INDEPENDENCE OF COMPENSATION CONSULT23 ANTS AND OTHER COMPENSATION COMMITTEE ADVIS24 ERS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1060 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—The compensation com2 mittee of an issuer may only select a compensation 

3 consultant, legal counsel, or other adviser to the 

4 compensation committee after taking into consider5 ation the factors identified by the Commission under 

6 paragraph (2). 

7 ‘‘(2) RULES.—The Commission shall identify 

8 factors that affect the independence of a compensa9 tion consultant, legal counsel, or other adviser to a 

10 compensation committee of an issuer, including— 

11 ‘‘(A) the provision of other services to the 

12 issuer by the person that employs the com13 pensation consultant, legal counsel, or other ad14 viser; 

15 ‘‘(B) the amount of fees received from the 

16 issuer by the person that employs the com17 pensation consultant, legal counsel, or other ad18 viser, as a percentage of the total revenue of 

19 the person that employs the compensation con20 sultant, legal counsel, or other adviser; 

21 ‘‘(C) the policies and procedures of the 

22 person that employs the compensation consult23 ant, legal counsel, or other adviser that are de24 signed to prevent conflicts of interest; 


sroberts on DSKH9S0YB1PROD with BILLS
1061 

•S 3217 AMDT 3739 

1 ‘‘(D) any business or personal relationship 

2 of the compensation consultant, legal counsel, 

3 or other adviser with a member of the com4 pensation committee; and 

5 ‘‘(E) any stock of the issuer owned by the 

6 compensation consultant, legal counsel, or other 

7 adviser. 

8 ‘‘(c) COMPENSATION COMMITTEE AUTHORITY RE9 LATING TO COMPENSATION CONSULTANTS.— 

10 ‘‘(1) AUTHORITY TO RETAIN COMPENSATION

11 CONSULTANT.— 

12 ‘‘(A) IN GENERAL.—The compensation 

13 committee of an issuer, in its capacity as a 

14 committee of the board of directors, may, in its 

15 sole discretion, retain or obtain the advice of a 

16 compensation consultant. 

17 ‘‘(B) DIRECT RESPONSIBILITY OF COM18 PENSATION COMMITTEE.—The compensation 

19 committee of an issuer shall be directly respon20 sible for the appointment, compensation, and 

21 oversight of the work of a compensation con22 sultant. 

23 ‘‘(C) RULE OF CONSTRUCTION.—This 

24 paragraph may not be construed— 


sroberts on DSKH9S0YB1PROD with BILLS
1062 

•S 3217 AMDT 3739 

1 ‘‘(i) to require the compensation com2 mittee to implement or act consistently 

3 with the advice or recommendations of the 

4 compensation consultant; or 

5 ‘‘(ii) to affect the ability or obligation 

6 of a compensation committee to exercise its 

7 own judgment in fulfillment of the duties 

8 of the compensation committee. 

9 ‘‘(2) DISCLOSURE.—In any proxy or consent 

10 solicitation material for an annual meeting of the 

11 shareholders (or a special meeting in lieu of the an12 nual meeting) occurring on or after the date that is 

13 1 year after the date of enactment of this section, 

14 each issuer shall disclose in the proxy or consent 

15 material, in accordance with regulations of the Com16 mission, whether— 

17 ‘‘(A) the compensation committee of the 

18 issuer retained or obtained the advice of a com19 pensation consultant; and 

20 ‘‘(B) the work of the compensation con21 sultant has raised any conflict of interest and, 

22 if so, the nature of the conflict and how the 

23 conflict is being addressed. 

24 ‘‘(d) AUTHORITY TO ENGAGE INDEPENDENT LEGAL

25 COUNSEL AND OTHER ADVISERS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1063 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—The compensation com2 mittee of an issuer, in its capacity as a committee 

3 of the board of directors, may, in its sole discretion, 

4 retain and obtain the advice of independent legal 

5 counsel and other advisers. 

6 ‘‘(2) DIRECT RESPONSIBILITY OF COMPENSA7 TION COMMITTEE.—The compensation committee of 

8 an issuer shall be directly responsible for the ap9 pointment, compensation, and oversight of the work 

10 of independent legal counsel and other advisers. 

11 ‘‘(3) RULE OF CONSTRUCTION.—This sub12 section may not be construed— 

13 ‘‘(A) to require a compensation committee 

14 to implement or act consistently with the advice 

15 or recommendations of independent legal coun16 sel or other advisers under this subsection; or 

17 ‘‘(B) to affect the ability or obligation of a 

18 compensation committee to exercise its own 

19 judgment in fulfillment of the duties of the 

20 compensation committee. 

21 ‘‘(e) COMPENSATION OF COMPENSATION CONSULT22 ANTS, INDEPENDENT LEGAL COUNSEL, AND OTHER AD23 VISERS.—Each issuer shall provide for appropriate fund24 ing, as determined by the compensation committee in its 


sroberts on DSKH9S0YB1PROD with BILLS
1064 

•S 3217 AMDT 3739 

1 capacity as a committee of the board of directors, for pay2 ment of reasonable compensation— 

3 ‘‘(1) to a compensation consultant; and 

4 ‘‘(2) to independent legal counsel or any other 

5 adviser to the compensation committee. 

6 ‘‘(f) COMMISSION RULES.— 

7 ‘‘(1) IN GENERAL.—Not later than 360 days 

8 after the date of enactment of this section, the Com9 mission shall, by rule, direct the national securities 

10 exchanges and national securities associations to 

11 prohibit the listing of any security of an issuer that 

12 is not in compliance with the requirements of this 

13 section. 

14 ‘‘(2) OPPORTUNITY TO CURE DEFECTS.—The 

15 rules of the Commission under paragraph (1) shall 

16 provide for appropriate procedures for an issuer to 

17 have a reasonable opportunity to cure any defects 

18 that would be the basis for the prohibition under 

19 paragraph (1), before the imposition of such prohibi20 tion. 

21 ‘‘(3) EXEMPTION AUTHORITY.— 

22 ‘‘(A) IN GENERAL.—The rules of the Com23 mission under paragraph (1) shall permit a na24 tional securities exchange or a national securi25 ties association to exempt a category of issuers 


sroberts on DSKH9S0YB1PROD with BILLS
1065 

•S 3217 AMDT 3739 

1 from the requirements under this section, as 

2 the national securities exchange or the national 

3 securities association determines is appropriate. 

4 ‘‘(B) CONSIDERATIONS.—In determining 

5 appropriate exemptions under subparagraph 

6 (A), the national securities exchange or the na7 tional securities association shall take into ac8 count the potential impact of the requirements 

9 of this section on smaller reporting issuers.’’. 

10 SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES. 

11 (a) DISCLOSURE OF PAY VERSUS PERFORMANCE.— 

12 Section 14 of the Securities Exchange Act of 1934 (15 

13 U.S.C. 78n), as amended by this title, is amended by add14 ing at the end the following: 

15 ‘‘(i) DISCLOSURE OF PAY VERSUS PERFORMANCE.— 

16 The Commission shall, by rule, require each issuer to dis17 close in any proxy or consent solicitation material for an 

18 annual meeting of the shareholders of the issuer a clear 

19 description of any compensation required to be disclosed 

20 by the issuer under section 229.402 of title 17, Code of 

21 Federal Regulations (or any successor thereto), including 

22 information that shows the relationship between executive 

23 compensation actually paid and the financial performance 

24 of the issuer, taking into account any change in the value 

25 of the shares of stock and dividends of the issuer and any 


sroberts on DSKH9S0YB1PROD with BILLS
1066 

•S 3217 AMDT 3739 

1 distributions. The disclosure under this subsection may in2 clude a graphic representation of the information required 

3 to be disclosed.’’. 

4 (b) ADDITIONAL DISCLOSURE REQUIREMENTS.— 

5 (1) IN GENERAL.—The Commission shall 

6 amend section 229.402 of title 17, Code of Federal 

7 Regulations, to require each issuer to disclose in any 

8 filing of the issuer described in section 229.10(a) of 

9 title 17, Code of Federal Regulations (or any suc10 cessor thereto)— 

11 (A) the median of the annual total com12 pensation of all employees of the issuer, except 

13 the chief executive officer (or any equivalent po14 sition) of the issuer; 

15 (B) the annual total compensation of the 

16 chief executive officer (or any equivalent posi17 tion) of the issuer; and 

18 (C) the ratio of the amount described in 

19 subparagraph (A) to the amount described in 

20 subparagraph (B). 

21 (2) TOTAL COMPENSATION.—For purposes of 

22 this subsection, the total compensation of an em23 ployee of an issuer shall be determined in accordance 

24 with section 229.402(c)(2)(x) of title 17, Code of 


sroberts on DSKH9S0YB1PROD with BILLS
1067 

•S 3217 AMDT 3739 

1 Federal Regulations, as in effect on the day before 

2 the date of enactment of this Act. 

3 SEC. 954. RECOVERY OF ERRONEOUSLY AWARDED COM4 PENSATION. 

5 The Securities Exchange Act of 1934 is amended by 

6 inserting after section 10C, as added by section 952, the 

7 following: 

8 ‘‘SEC. 10D. RECOVERY OF ERRONEOUSLY AWARDED COM9 PENSATION POLICY. 

10 ‘‘(a) LISTING STANDARDS.—The Commission shall, 

11 by rule, direct the national securities exchanges and na12 tional securities associations to prohibit the listing of any 

13 security of an issuer that does not comply with the re14 quirements of this section. 

15 ‘‘(b) RECOVERY OF FUNDS.—The rules of the Com16 mission under subsection (a) shall require each issuer to 

17 develop and implement a policy providing— 

18 ‘‘(1) for disclosure of the policy of the issuer on 

19 incentive-based compensation that is based on finan20 cial information required to be reported under the 

21 securities laws; and 

22 ‘‘(2) that, in the event that the issuer is re23 quired to prepare an accounting restatement due to 

24 the material noncompliance of the issuer with any fi25 nancial reporting requirement under the securities 


sroberts on DSKH9S0YB1PROD with BILLS
1068 

•S 3217 AMDT 3739 

1 laws, the issuer will recover from any current or 

2 former executive officer of the issuer who received 

3 incentive-based compensation (including stock op4 tions awarded as compensation) during the 3-year 

5 period preceding the date on which the issuer is re6 quired to prepare an accounting restatement, based 

7 on the erroneous data, in excess of what would have 

8 been paid to the executive officer under the account9 ing restatement.’’. 

10 SEC. 955. DISCLOSURE REGARDING EMPLOYEE AND DIREC11 TOR HEDGING. 

12 Section 14 of the Securities Exchange Act of 1934 

13 (15 U.S.C. 78n), as amended by this title, is amended by 

14 adding at the end the following: 

15 ‘‘(j) DISCLOSURE OF HEDGING BY EMPLOYEES AND

16 DIRECTORS.—The Commission shall, by rule, require each 

17 issuer to disclose in any proxy or consent solicitation mate18 rial for an annual meeting of the shareholders of the issuer 

19 whether any employee or member of the board of directors 

20 of the issuer, or any designee of such employee or member, 

21 is permitted to purchase financial instruments (including 

22 prepaid variable forward contracts, equity swaps, collars, 

23 and exchange funds) that are designed to hedge or offset 

24 any decrease in the market value of equity securities— 


sroberts on DSKH9S0YB1PROD with BILLS
1069 

•S 3217 AMDT 3739 

1 ‘‘(1) granted to the employee or member of the 

2 board of directors by the issuer as part of the com3 pensation of the employee or member of the board 

4 of directors; or 

5 ‘‘(2) held, directly or indirectly, by the employee 

6 or member of the board of directors.’’. 

7 SEC. 956. EXCESSIVE COMPENSATION BY HOLDING COMPA8 NIES OF DEPOSITORY INSTITUTIONS. 

9 Section 5 of the Bank Holding Company Act of 1956 

10 (12 U.S.C. 1844) is amended by adding at the end the 

11 following: 

12 ‘‘(i) EXCESSIVE COMPENSATION.— 

13 ‘‘(1) IN GENERAL.—Not later than 180 days 

14 after the transfer date established under section 311 

15 of the Restoring American Financial Stability Act of 

16 2010, the Board of Governors, in consultation with 

17 the Comptroller of the Currency and the Federal 

18 Deposit Insurance Corporation, shall, by rule, estab19 lish standards prohibiting as an unsafe and unsound 

20 practice any compensation plan of a bank holding 

21 company that— 

22 ‘‘(A) provides an executive officer, em23 ployee, director, or principal shareholder of the 

24 bank holding company with excessive compensa25 tion, fees, or benefits; or 


sroberts on DSKH9S0YB1PROD with BILLS
1070 

•S 3217 AMDT 3739 

1 ‘‘(B) could lead to material financial loss 

2 to the bank holding company. 

3 ‘‘(2) CONSIDERATIONS.—In establishing the 

4 standards under paragraph (1), the Board of Gov5 ernors shall take into consideration the compensa6 tion standards described in section 39(c) of the Fed7 eral Deposit Insurance Act (12 U.S.C. 1831p–1(c)) 

8 and the views and recommendations of the Comp9 troller of the Currency and the Federal Deposit In10 surance Corporation.’’. 

11 SEC. 957. VOTING BY BROKERS. 

12 Section 6(b) of the Securities Exchange Act of 1934 

13 (15 U.S.C. 78f(b)) is amended— 

14 (1) in paragraph (9)— 

15 (A) in subparagraph (A), by redesignating 

16 clauses (i) through (v) as subclauses (I) 

17 through (V), respectively, and adjusting the 

18 margins accordingly; 

19 (B) by redesignating subparagraphs (A) 

20 through (D) as clauses (i) through (iv), respec21 tively, and adjusting the margins accordingly; 

22 (C) by inserting ‘‘(A)’’ after ‘‘(9)’’; and 

23 (D) in the matter immediately following 

24 clause (iv), as so redesignated, by striking ‘‘As 

25 used’’ and inserting the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1071 

•S 3217 AMDT 3739 

1 ‘‘(B) As used’’. 

2 (2) by adding at the end the following: 

3 ‘‘(10)(A) The rules of the exchange prohibit 

4 any member that is not the beneficial owner of a se5 curity registered under section 12 from granting a 

6 proxy to vote the security in connection with a 

7 shareholder vote described in subparagraph (B), un8 less the beneficial owner of the security has in9 structed the member to vote the proxy in accordance 

10 with the voting instructions of the beneficial owner. 

11 ‘‘(B) A shareholder vote described in this sub12 paragraph is a shareholder vote with respect to the 

13 election of a member of the board of directors of an 

14 issuer, executive compensation, or any other signifi15 cant matter, as determined by the Commission, by 

16 rule. 

17 ‘‘(C) Nothing in this paragraph shall be con18 strued to prohibit a national securities exchange 

19 from prohibiting a member that is not the beneficial 

20 owner of a security registered under section 12 from 

21 granting a proxy to vote the security in connection 

22 with a shareholder vote not described in subpara23 graph (A).’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1072 

•S 3217 AMDT 3739 

1 Subtitle F—Improvements to the 

2 Management of the Securities 

3 and Exchange Commission 

4 SEC. 961. REPORT AND CERTIFICATION OF INTERNAL SU5 PERVISORY CONTROLS. 

6 (a) ANNUAL REPORTS AND CERTIFICATION.—Not 

7 later than 90 days after the end of each fiscal year, the 

8 Commission shall submit a report to the Committee on 

9 Banking, Housing, and Urban Affairs of the Senate and 

10 the Committee on Financial Services of the House of Rep11 resentatives on the conduct by the Commission of exami12 nations of registered entities, enforcement investigations, 

13 and review of corporate financial securities filings. 

14 (b) CONTENTS OF REPORTS.—Each report under 

15 subsection (a) shall contain— 

16 (1) an assessment, as of the end of the most re17 cent fiscal year, of the effectiveness of— 

18 (A) the internal supervisory controls of the 

19 Commission; and 

20 (B) the procedures of the Commission ap21 plicable to the staff of the Commission who per22 form examinations of registered entities, en23 forcement investigations, and reviews of cor24 porate financial securities filings; 


sroberts on DSKH9S0YB1PROD with BILLS
1073 

•S 3217 AMDT 3739 

1 (2) a certification that the Commission has ade2 quate internal supervisory controls to carry out the 

3 duties of the Commission described in paragraph 

4 (1)(B); and 

5 (3) a summary by the Comptroller General of 

6 the United States of the review carried out under 

7 subsection (d). 

8 (c) CERTIFICATION.— 

9 (1) SIGNATURE.—The certification under sub10 section (b)(2) shall be signed by the Director of the 

11 Division of Enforcement, the Director of the Divi12 sion of Corporation Finance, and the Director of the 

13 Office of Compliance Inspections and Examinations 

14 (or the head of any successor division or office). 

15 (2) CONTENT OF CERTIFICATION.—Each indi16 vidual described in paragraph (1) shall certify that 

17 the individual— 

18 (A) is directly responsible for establishing 

19 and maintaining the internal supervisory con20 trols of the Division or Office of which the indi21 vidual is the head; 

22 (B) is knowledgeable about the internal su23 pervisory controls of the Division or Office of 

24 which the individual is the head; 


sroberts on DSKH9S0YB1PROD with BILLS
1074 

•S 3217 AMDT 3739 

1 (C) has evaluated the effectiveness of the 

2 internal supervisory controls during the 90-day 

3 period ending on the final day of the fiscal year 

4 to which the report relates; and 

5 (D) has disclosed to the Commission any 

6 significant deficiencies in the design or oper7 ation of internal supervisory controls that could 

8 adversely affect the ability of the Division or 

9 Office to consistently conduct inspections, or in10 vestigations, or reviews of filings with profes11 sional competence and integrity. 

12 (d) REVIEW BY THE COMPTROLLER GENERAL.—Not 

13 later than the date on which the first report is submitted 

14 under subsection (a), the Comptroller General of the 

15 United States shall submit to the Committee on Banking, 

16 Housing, and Urban Affairs of the Senate and the Com17 mittee on Financial Services of the House of Representa18 tives an initial report that contains a review of the ade19 quacy and effectiveness of the internal supervisory control 

20 structure and procedures described in subsection (b)(1). 

21 SEC. 962. TRIENNIAL REPORT ON PERSONNEL MANAGE22 MENT. 

23 (a) TRIENNIAL REPORT REQUIRED.—Once every 3 

24 years, the Comptroller General of the United States shall 

25 submit a report to the Committee on Banking, Housing, 


sroberts on DSKH9S0YB1PROD with BILLS
1075 

•S 3217 AMDT 3739 

1 and Urban Affairs of the Senate and the Committee on 

2 Financial Services of the House of Representatives on the 

3 quality of personnel management by the Commission. 

4 (b) CONTENTS OF REPORT.—Each report under sub5 section (a) shall include— 

6 (1) an evaluation of— 

7 (A) the effectiveness of supervisors in 

8 using the skills, talents, and motivation of the 

9 employees of the Commission to achieve the 

10 goals of the Commission; 

11 (B) the criteria for promoting employees of 

12 the Commission to supervisory positions; 

13 (C) the fairness of the application of the 

14 promotion criteria to the decisions of the Com15 mission; 

16 (D) the competence of the professional 

17 staff of the Commission; 

18 (E) the efficiency of communication be19 tween the units of the Commission regarding 

20 the work of the Commission (including commu21 nication between divisions and between subunits 

22 of a division) and the efforts by the Commission 

23 to promote such communication; 

24 (F) the turnover within subunits of the 

25 Commission, including the identification of suVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01075 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1076 

•S 3217 AMDT 3739 

1 pervisors whose subordinates have an unusually 

2 high rate of turnover; 

3 (G) whether there are excessive numbers of 

4 low-level, mid-level, or senior-level managers; 

5 (H) any initiatives of the Commission that 

6 increase the competence of the staff of the 

7 Commission; 

8 (I) the actions taken by the Commission 

9 regarding employees of the Commission who 

10 have failed to perform their duties; and 

11 (J) such other factors relating to the man12 agement of the Commission as the Comptroller 

13 General determines are appropriate; 

14 (2) an evaluation of any improvements made 

15 with respect to the areas described in paragraph (1) 

16 since the date of submission of the previous report; 

17 and 

18 (3) recommendations for how the Commission 

19 can use the human resources of the Commission 

20 more effectively and efficiently to carry out the mis21 sion of the Commission. 

22 (c) CONSULTATION.—In preparing the report under 

23 subsection (a), the Comptroller General shall consult with 

24 current employees of the Commission, retired employees 

25 and other former employees of the Commission, the InVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01076 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1077 

•S 3217 AMDT 3739 

1 spector General of the Commission, persons that have 

2 business before the Commission, any union representing 

3 the employees of the Commission, private management 

4 consultants, academics, and any other source that the 

5 Comptroller General deems appropriate. 

6 (d) REPORT BY COMMISSION.—Not later than 90 

7 days after the date on which the Comptroller General sub8 mits each report under subsection (a), the Commission 

9 shall submit to the Committee on Banking, Housing, and 

10 Urban Affairs of the Senate and the Committee on Finan11 cial Services of the House of Representatives a report de12 scribing the actions taken by the Commission in response 

13 to the recommendations contained in the report under 

14 subsection (a). 

15 (e) REIMBURSEMENTS FOR COST OF REPORTS.— 

16 (1) REIMBURSEMENTS REQUIRED.—The Com17 mission shall reimburse the Government Account18 ability Office for the full cost of making the reports 

19 under this section, as billed therefor by the Comp20 troller General. 

21 (2) CREDITING AND USE OF REIMBURSE22 MENTS.—Such reimbursements shall— 

23 (A) be credited to the appropriation ac24 count ‘‘Salaries and Expenses, Government AcVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01077 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1078 

•S 3217 AMDT 3739 

1 countability Office’’ current when the payment 

2 is received; and 

3 (B) remain available until expended. 

4 SEC. 963. ANNUAL FINANCIAL CONTROLS AUDIT. 

5 (a) REPORTS OF COMMISSION.— 

6 (1) ANNUAL REPORTS REQUIRED.—Not later 

7 than 6 months after the end of each fiscal year, the 

8 Commission shall publish and submit to Congress a 

9 report that— 

10 (A) describes the responsibility of the man11 agement of the Commission for establishing and 

12 maintaining an adequate internal control struc13 ture and procedures for financial reporting; and 

14 (B) contains an assessment of the effec15 tiveness of the internal control structure and 

16 procedures for financial reporting of the Com17 mission during that fiscal year. 

18 (2) ATTESTATION.—The reports required under 

19 paragraph (1) shall be attested to by the Chairman 

20 and chief financial officer of the Commission. 

21 (b) REPORT BY COMPTROLLER GENERAL.— 

22 (1) REPORT REQUIRED.—Not later than 6 

23 months after the end of the first fiscal year after the 

24 date of enactment of this Act, the Comptroller GenVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01078 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1079 

•S 3217 AMDT 3739 

1 eral of the United States shall submit a report to 

2 Congress that assesses— 

3 (A) the effectiveness of the internal control 

4 structure and procedures of the Commission for 

5 financial reporting; and 

6 (B) the assessment of the Commission 

7 under subsection (a)(1)(B). 

8 (2) ATTESTATION.—The Comptroller General 

9 shall attest to, and report on, the assessment made 

10 by the Commission under subsection (a). 

11 (c) REIMBURSEMENTS FOR COST OF REPORTS.— 

12 (1) REIMBURSEMENTS REQUIRED.—The Com13 mission shall reimburse the Government Account14 ability Office for the full cost of making the reports 

15 under subsection (b), as billed therefor by the Comp16 troller General. 

17 (2) CREDITING AND USE OF REIMBURSE18 MENTS.—Such reimbursements shall— 

19 (A) be credited to the appropriation ac20 count ‘‘Salaries and Expenses, Government Ac21 countability Office’’ current when the payment 

22 is received; and 

23 (B) remain available until expended. 


sroberts on DSKH9S0YB1PROD with BILLS
1080 

•S 3217 AMDT 3739 

1 SEC. 964. REPORT ON OVERSIGHT OF NATIONAL SECURI2 TIES ASSOCIATIONS. 

3 (a) REPORT REQUIRED.—Not later than 2 years 

4 after the date of enactment of this Act, and every 3 years 

5 thereafter, the Comptroller General of the United States 

6 shall submit to the Committee on Banking, Housing, and 

7 Urban Affairs of the Senate and the Committee on Finan8 cial Services of the House of Representatives a report that 

9 includes an evaluation of the oversight by the Commission 

10 of national securities associations registered under section 

11 15A of the Securities Exchange Act of 1934 (15 U.S.C. 

12 78o–3) with respect to— 

13 (1) the governance of such national securities 

14 associations, including the identification and man15 agement of conflicts of interest by such national se16 curities associations, together with an analysis of the 

17 impact of any conflicts of interest on the regulatory 

18 enforcement or rulemaking by such national securi19 ties associations; 

20 (2) the examinations carried out by the national 

21 securities associations, including the expertise of the 

22 examiners; 

23 (3) the executive compensation practices of such 

24 national securities associations; 

25 (4) the arbitration services provided by the na26 tional securities associations; 


sroberts on DSKH9S0YB1PROD with BILLS
1081 

•S 3217 AMDT 3739 

1 (5) the review performed by national securities 

2 associations of advertising by the members of the 

3 national securities associations; 

4 (6) the cooperation with and assistance to State 

5 securities administrators by the national securities 

6 associations to promote investor protection; 

7 (7) how the funding of national securities asso8 ciations is used to support the mission of the na9 tional securities associations, including— 

10 (A) the methods of funding; 

11 (B) the sufficiency of funds; 

12 (C) how funds are invested by the national 

13 securities association pending use; and 

14 (D) the impact of the methods, sufficiency, 

15 and investment of funds on regulatory enforce16 ment by the national securities associations; 

17 (8) the policies regarding the employment of 

18 former employees of national securities associations 

19 by regulated entities; 

20 (9) the ongoing effectiveness of the rules of the 

21 national securities associations in achieving the goals 

22 of the rules; 

23 (10) the transparency of governance and activi24 ties of the national securities associations; and 


sroberts on DSKH9S0YB1PROD with BILLS
1082 

•S 3217 AMDT 3739 

1 (11) any other issue that has an impact, as de2 termined by the Comptroller General, on the effec3 tiveness of such national securities associations in 

4 performing their mission and in dealing fairly with 

5 investors and members; 

6 (b) REIMBURSEMENTS FOR COST OF REPORTS.— 

7 (1) REIMBURSEMENTS REQUIRED.—The Com8 mission shall reimburse the Government Account9 ability Office for the full cost of making the reports 

10 under subsection (a), as billed therefor by the Comp11 troller General. 

12 (2) CREDITING AND USE OF REIMBURSE13 MENTS.—Such reimbursements shall— 

14 (A) be credited to the appropriation ac15 count ‘‘Salaries and Expenses, Government Ac16 countability Office’’ current when the payment 

17 is received; and 

18 (B) remain available until expended. 

19 SEC. 965. COMPLIANCE EXAMINERS. 

20 Section 4 of the Securities Exchange Act of 1934 (15 

21 U.S.C. 78d) is amended by adding at the end the fol22 lowing: 

23 ‘‘(h) EXAMINERS.— 

24 ‘‘(1) DIVISION OF TRADING AND MARKETS.— 

25 The Division of Trading and Markets of the ComVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01082 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1083 

•S 3217 AMDT 3739 

1 mission, or any successor organizational unit, shall 

2 have a staff of examiners who shall— 

3 ‘‘(A) perform compliance inspections and 

4 examinations of entities under the jurisdiction 

5 of that Division; and 

6 ‘‘(B) report to the Director of that Divi7 sion. 

8 ‘‘(2) DIVISION OF INVESTMENT MANAGE9 MENT.—The Division of Investment Management of 

10 the Commission, or any successor organizational 

11 unit, shall have a staff of examiners who shall— 

12 ‘‘(A) perform compliance inspections and 

13 examinations of entities under the jurisdiction 

14 of that Division; and 

15 ‘‘(B) report to the Director of that Divi16 sion.’’. 

17 SEC. 966. SUGGESTION PROGRAM FOR EMPLOYEES OF THE 

18 COMMISSION. 

19 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

20 et seq.) is amended by inserting after section 4C (15 

21 U.S.C. 78d–3) the following: 

22 ‘‘SEC. 4D. ADDITIONAL DUTIES OF INSPECTOR GENERAL. 

23 ‘‘(a) SUGGESTION SUBMISSIONS BY COMMISSION EM24 PLOYEES.— 


sroberts on DSKH9S0YB1PROD with BILLS
1084 

•S 3217 AMDT 3739 

1 ‘‘(1) HOTLINE ESTABLISHED.—The Inspector 

2 General of the Commission shall establish and main3 tain a telephone hotline or other electronic means for 

4 the receipt of— 

5 ‘‘(A) suggestions by employees of the Com6 mission for improvements in the work effi7 ciency, effectiveness, and productivity, and the 

8 use of the resources, of the Commission; and 

9 ‘‘(B) allegations by employees of the Com10 mission of waste, abuse, misconduct, or mis11 management within the Commission. 

12 ‘‘(2) CONFIDENTIALITY.—The Inspector Gen13 eral shall maintain as confidential— 

14 ‘‘(A) the identity of any individual who 

15 provides information by the means established 

16 under paragraph (1), unless the individual re17 quests otherwise, in writing; and 

18 ‘‘(B) at the request of any such individual, 

19 any specific information provided by the indi20 vidual. 

21 ‘‘(b) CONSIDERATION OF REPORTS.—The Inspector 

22 General shall consider any suggestions or allegations re23 ceived by the means established under subsection (a)(1), 

24 and shall recommend appropriate action in relation to 

25 such suggestions or allegations. 


sroberts on DSKH9S0YB1PROD with BILLS
1085 

•S 3217 AMDT 3739 

1 ‘‘(c) RECOGNITION.—The Inspector General may rec2 ognize any employee who makes a suggestion under sub3 section (a)(1) (or by other means) that would or does— 

4 ‘‘(1) increase the work efficiency, effectiveness, 

5 or productivity of the Commission; or 

6 ‘‘(2) reduce waste, abuse, misconduct, or mis7 management within the Commission. 

8 ‘‘(d) REPORT.—The Inspector General of the Com9 mission shall submit to Congress an annual report con10 taining a description of— 

11 ‘‘(1) the nature, number, and potential benefits 

12 of any suggestions received under subsection (a); 

13 ‘‘(2) the nature, number, and seriousness of 

14 any allegations received under subsection (a); 

15 ‘‘(3) any recommendations made or actions 

16 taken by the Inspector General in response to sub17 stantiated allegations received under subsection (a); 

18 and 

19 ‘‘(4) any action the Commission has taken in 

20 response to suggestions or allegations received under 

21 subsection (a). 

22 ‘‘(e) FUNDING.—The activities of the Inspector Gen23 eral under this subsection shall be funded by the Securities 

24 and Exchange Commission Investor Protection Fund es25 tablished under section 21F.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1086 

•S 3217 AMDT 3739 

1 Subtitle G—Strengthening 

2 Corporate Governance 

3 SEC. 971. ELECTION OF DIRECTORS BY MAJORITY VOTE IN 

4 UNCONTESTED ELECTIONS. 

5 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

6 et seq.) is amended by inserting after section 14A, as 

7 added by this title, the following: 

8 ‘‘SEC. 14B. CORPORATE GOVERNANCE. 

9 ‘‘(a) CORPORATE GOVERNANCE STANDARDS.— 

10 ‘‘(1) LISTING STANDARDS.— 

11 ‘‘(A) IN GENERAL.—Not later than 1 year 

12 after the date of enactment of this subsection, 

13 the Commission shall, by rule, direct the na14 tional securities exchanges and national securi15 ties associations to prohibit the listing of any 

16 security of an issuer that is not in compliance 

17 with any of the requirements of this subsection. 

18 ‘‘(B) OPPORTUNITY TO COMPLY AND

19 CURE.—The rules established under this para20 graph shall allow an issuer to have an oppor21 tunity to come into compliance with the require22 ments of this subsection, and to cure any defect 

23 that would be the basis for a prohibition under 

24 subparagraph (A), before the imposition of such 

25 prohibition. 


sroberts on DSKH9S0YB1PROD with BILLS
1087 

•S 3217 AMDT 3739 

1 ‘‘(C) AUTHORITY TO EXEMPT.—The Com2 mission may, by rule or order, exempt an issuer 

3 from any or all of the requirements of this sub4 section and the rules issued under this sub5 section, based on the size of the issuer, the 

6 market capitalization of the issuer, the number 

7 of shareholders of record of the issuer, or any 

8 other criteria, as the Commission deems nec9 essary and appropriate in the public interest or 

10 for the protection of investors. 

11 ‘‘(2) COMMISSION RULES ON ELECTIONS.—In 

12 an election for membership on the board of directors 

13 of an issuer— 

14 ‘‘(A) that is uncontested, each director who 

15 receives a majority of the votes cast shall be 

16 deemed to be elected; 

17 ‘‘(B) that is contested, if the number of 

18 nominees exceeds the number of directors to be 

19 elected, each director shall be elected by the 

20 vote of a plurality of the shares represented at 

21 a meeting and entitled to vote; and 

22 ‘‘(C) if a director of an issuer receives less 

23 than a majority of the votes cast in an 

24 uncontested election— 


sroberts on DSKH9S0YB1PROD with BILLS
1088 

•S 3217 AMDT 3739 

1 ‘‘(i) the director shall tender the res2 ignation of the director to the board of di3 rectors; and 

4 ‘‘(ii) the board of directors— 

5 ‘‘(I) shall— 

6 ‘‘(aa) accept the resignation 

7 of the director; 

8 ‘‘(bb) determine a date on 

9 which the resignation will take 

10 effect, within a reasonable period 

11 of time, as established by the 

12 Commission; and 

13 ‘‘(cc) make the date under 

14 item (bb) public within a reason15 able period of time, as estab16 lished by the Commission; or 

17 ‘‘(II) shall, upon a unanimous 

18 vote of the board, decline to accept 

19 the resignation and, not later than 30 

20 days after the date of the vote (or 

21 within such shorter period as the 

22 Commission may establish), make 

23 public, together with a discussion of 

24 the analysis used in reaching the con25 clusion, the specific reasons that— 


sroberts on DSKH9S0YB1PROD with BILLS
1089 

•S 3217 AMDT 3739 

1 ‘‘(aa) the board chose not to 

2 accept the resignation; and 

3 ‘‘(bb) the decision was in the 

4 best interests of the issuer and 

5 the shareholders of the issuer.’’. 

6 SEC. 972. PROXY ACCESS. 

7 (a) PROXY ACCESS.—Section 14(a) of the Securities 

8 Exchange Act of 1934 (15 U.S.C. 78n(a)) is amended— 

9 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and 

10 (2) by adding at the end the following: 

11 ‘‘(2) The rules and regulations prescribed by the 

12 Commission under paragraph (1) may include— 

13 ‘‘(A) a requirement that a solicitation of proxy, 

14 consent, or authorization by (or on behalf of) an 

15 issuer include a nominee submitted by a shareholder 

16 to serve on the board of directors of the issuer; and 

17 ‘‘(B) a requirement that an issuer follow a cer18 tain procedure in relation to a solicitation described 

19 in subparagraph (A).’’. 

20 (b) REGULATIONS.—The Commission may issue rules 

21 permitting the use by shareholders of proxy solicitation 

22 materials supplied by an issuer of securities for the pur23 pose of nominating individuals to membership on the 

24 board of directors of the issuer, under such terms and conVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01089 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1090 

•S 3217 AMDT 3739 

1 ditions as the Commission determines are in the interests 

2 of shareholders and for the protection of investors. 

3 SEC. 973. DISCLOSURES REGARDING CHAIRMAN AND CEO 

4 STRUCTURES. 

5 Section 14B of the Securities Exchange Act of 1934, 

6 as added by section 971, is amended by adding at the end 

7 the following: 

8 ‘‘(b) DISCLOSURES REGARDING CHAIRMAN AND CEO 

9 STRUCTURES.—Not later than 180 days after the date of 

10 enactment of this subsection, the Commission shall issue 

11 rules that require an issuer to disclose in the annual proxy 

12 sent to investors the reasons why the issuer has chosen— 

13 ‘‘(1) the same person to serve as chairman of 

14 the board of directors and chief executive officer (or 

15 in equivalent positions); or 

16 ‘‘(2) different individuals to serve as chairman 

17 of the board of directors and chief executive officer 

18 (or in equivalent positions of the issuer).’’. 

19 Subtitle H—Municipal Securities 

20 SEC. 975. REGULATION OF MUNICIPAL SECURITIES AND 

21 CHANGES TO THE BOARD OF THE MSRB. 

22 (a) REGISTRATION OF MUNICIPAL SECURITIES

23 DEALERS AND MUNICIPAL ADVISORS.—Section 15B(a) of 

24 the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(a)) 

25 is amended— 


sroberts on DSKH9S0YB1PROD with BILLS
1091 

•S 3217 AMDT 3739 

1 (1) in paragraph (1)— 

2 (A) by inserting ‘‘(A)’’ after ‘‘(1)’’; and 

3 (B) by adding at the end the following: 

4 ‘‘(B) It shall be unlawful for a municipal 

5 advisor to provide advice to or on behalf of a 

6 municipal entity or obligated person with re7 spect to municipal financial products or the 

8 issuance of municipal securities, or to under9 take a solicitation of a municipal entity or obli10 gated person, unless the municipal advisor is 

11 registered in accordance with this subsection.’’; 

12 (2) in paragraph (2), by inserting ‘‘or municipal 

13 advisor’’ after ‘‘municipal securities dealer’’ each 

14 place that term appears; 

15 (3) in paragraph (3), by inserting ‘‘or municipal 

16 advisor’’ after ‘‘municipal securities dealer’’ each 

17 place that term appears; 

18 (4) in paragraph (4), by striking ‘‘dealer, or 

19 municipal securities dealer or class of brokers, deal20 ers, or municipal securities dealers’’ and inserting 

21 ‘‘dealer, municipal securities dealer, or municipal ad22 visor, or class of brokers, dealers, municipal securi23 ties dealers, or municipal advisors’’; and 

24 (5) by adding at the end the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1092 

•S 3217 AMDT 3739 

1 ‘‘(5) No municipal advisor shall make use of the 

2 mails or any means or instrumentality of interstate 

3 commerce to provide advice to or on behalf of a mu4 nicipal entity or obligated person with respect to mu5 nicipal financial products, the issuance of municipal 

6 securities, or participation in the issuance of munic7 ipal securities, or to undertake a solicitation of a 

8 municipal entity or obligated person, in connection 

9 with which such municipal advisor engages in any 

10 fraudulent, deceptive, or manipulative act or prac11 tice.’’. 

12 (b) MUNICIPAL SECURITIES RULEMAKING BOARD.— 

13 Section 15B(b) of the Securities Exchange Act of 1934 

14 (15 U.S.C. 78o–4(b)) is amended— 

15 (1) in paragraph (1)— 

16 (A) in the first sentence, by striking ‘‘Not 

17 later than’’ and all that follows through ‘‘ap18 pointed by the Commission’’ and inserting ‘‘The 

19 Municipal Securities Rulemaking Board shall be 

20 composed of 15 members, or such other number 

21 of members as specified by rules of the Board 

22 pursuant to paragraph (2)(B),’’; 

23 (B) by striking the second sentence and in24 serting the following: ‘‘The members of the 

25 Board shall serve as members for a term of 3 


sroberts on DSKH9S0YB1PROD with BILLS
1093 

•S 3217 AMDT 3739 

1 years or for such other terms as specified by 

2 rules of the Board pursuant to paragraph 

3 (2)(B), and shall consist of (A) 8 individuals 

4 who are not associated with any broker, dealer, 

5 municipal securities dealer, or municipal advisor 

6 (other than by reason of being under common 

7 control with, or indirectly controlling, any 

8 broker or dealer which is not a municipal secu9 rities broker or municipal securities dealer), at 

10 least 1 of whom shall be representative of insti11 tutional or retail investors in municipal securi12 ties, at least 1 of whom shall be representative 

13 of municipal entities, and at least 1 of whom 

14 shall be a member of the public with knowledge 

15 of or experience in the municipal industry 

16 (which members are hereinafter referred to as 

17 ‘public representatives’); and (B) 7 individuals 

18 who are associated with a broker, dealer, mu19 nicipal securities dealer, or municipal advisor, 

20 including at least 1 individual who is associated 

21 with and representative of brokers, dealers, or 

22 municipal securities dealers that are not banks 

23 or subsidiaries or departments or divisions of 

24 banks (which members are hereinafter referred 

25 to as ‘broker-dealer representatives’), at least 1 


sroberts on DSKH9S0YB1PROD with BILLS
1094 

•S 3217 AMDT 3739 

1 individual who is associated with and represent2 ative of municipal securities dealers which are 

3 banks or subsidiaries or departments or divi4 sions of banks (which members are hereinafter 

5 referred to as ‘bank representatives’), and at 

6 least 1 individual who is associated with a mu7 nicipal advisor (which member is hereinafter re8 ferred to as the ‘advisor representative’).’’; and 

9 (C) in the third sentence, by striking ‘‘ini10 tial’’; 

11 (2) in paragraph (2)— 

12 (A) in the matter preceding subparagraph 

13 (A)— 

14 (i) by inserting before the period at 

15 the end of the first sentence the following: 

16 ‘‘and advice provided to or on behalf of 

17 municipal entities or obligated persons by 

18 brokers, dealers, municipal securities deal19 ers, and municipal advisors with respect to 

20 municipal financial products, the issuance 

21 of municipal securities, or participation in 

22 the issuance of municipal securities, and 

23 solicitations of municipal entities or obli24 gated persons undertaken by brokers, dealVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01094 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1095 

•S 3217 AMDT 3739 

1 ers, municipal securities dealers, and mu2 nicipal advisors’’; and 

3 (ii) by striking the second sentence; 

4 (B) in subparagraph (A)— 

5 (i) in the matter preceding clause 

6 (i)— 

7 (I) by inserting ‘‘, and no broker, 

8 dealer, municipal securities dealer, or 

9 municipal advisor shall provide advice 

10 to or on behalf of a municipal entity 

11 or obligated person with respect to 

12 municipal financial products, the 

13 issuance of municipal securities, or 

14 participation in the issuance of munic15 ipal securities’’ after ‘‘sale of, any mu16 nicipal security’’; and 

17 (II) by inserting ‘‘and municipal 

18 entities or obligated persons’’ after 

19 ‘‘protection of investors’’; 

20 (ii) in clause (i), by striking ‘‘munic21 ipal securities brokers and municipal secu22 rities dealers’’ each place that term ap23 pears and inserting ‘‘municipal securities 

24 brokers, municipal securities dealers, and 

25 municipal advisors’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1096 

•S 3217 AMDT 3739 

1 (iii) in clause (ii), by adding ‘‘and’’ at 

2 the end; 

3 (iv) in clause (iii), by striking ‘‘; and’’ 

4 and inserting a period; and 

5 (v) by striking clause (iv); 

6 (C) in subparagraph (B), by striking 

7 ‘‘nominations and elections’’ and all that follows 

8 through ‘‘specify’’ and inserting ‘‘nominations 

9 and elections of public representatives, broker10 dealer representatives, bank representatives, 

11 and advisor representatives. Such rules shall 

12 provide that the membership of the Board shall 

13 at all times be as evenly divided in number as 

14 possible between entities or individuals who are 

15 subject to regulation by the Board and entities 

16 or individuals not subject to regulation by the 

17 Board, provided, however, that a majority of 

18 the members of the Board shall at all times be 

19 public representatives. Such rules shall also 

20 specify’’; 

21 (D) in subparagraph (C)— 

22 (i) by inserting ‘‘and municipal finan23 cial products’’ after ‘‘municipal securities’’ 

24 the first two times that term appears; 


sroberts on DSKH9S0YB1PROD with BILLS
1097 

•S 3217 AMDT 3739 

1 (ii) by inserting ‘‘, municipal entities, 

2 obligated persons,’’ before ‘‘and the public 

3 interest’’; 

4 (iii) by striking ‘‘between’’ and insert5 ing ‘‘among’’; 

6 (iv) by striking ‘‘issuers, municipal se7 curities brokers, or municipal securities 

8 dealers, to fix’’ and inserting ‘‘municipal 

9 entities, obligated persons, municipal secu10 rities brokers, municipal securities dealers, 

11 or municipal advisors, to fix’’; and 

12 (v) by striking ‘‘brokers or municipal 

13 securities dealers, to regulate’’ and insert14 ing ‘‘brokers, municipal securities dealers, 

15 or municipal advisors, to regulate’’; 

16 (E) in subparagraph (D)— 

17 (i) by inserting ‘‘and advice con18 cerning municipal financial products’’ after 

19 ‘‘transactions in municipal securities’’; 

20 (ii) by striking ‘‘That no’’ and insert21 ing ‘‘that no’’; 

22 (iii) by inserting ‘‘municipal advisor,’’ 

23 before ‘‘or person associated’’; and 

24 (iv) by striking ‘‘a municipal securi25 ties broker or municipal securities dealer 


sroberts on DSKH9S0YB1PROD with BILLS
1098 

•S 3217 AMDT 3739 

1 may be compelled’’ and inserting ‘‘a mu2 nicipal securities broker, municipal securi3 ties dealer, or municipal advisor may be 

4 compelled’’; 

5 (F) in subparagraph (E)— 

6 (i) by striking ‘‘municipal securities 

7 brokers and municipal securities dealers’’ 

8 and inserting ‘‘municipal securities bro9 kers, municipal securities dealers, and mu10 nicipal advisors’’; and 

11 (ii) by striking ‘‘municipal securities 

12 broker or municipal securities dealer’’ and 

13 inserting ‘‘municipal securities broker, mu14 nicipal securities dealer, or municipal advi15 sor’’; 

16 (G) in subparagraph (G), by striking ‘‘mu17 nicipal securities brokers and municipal securi18 ties dealers’’ and inserting ‘‘municipal securities 

19 brokers, municipal securities dealers, and mu20 nicipal advisors’’; 

21 (H) in subparagraph (J)— 

22 (i) by striking ‘‘municipal securities 

23 broker and each municipal securities deal24 er’’ and inserting ‘‘municipal securities 


sroberts on DSKH9S0YB1PROD with BILLS
1099 

•S 3217 AMDT 3739 

1 broker, municipal securities dealer, and 

2 municipal advisor’’; and 

3 (ii) by striking the period at the end 

4 of the second sentence and inserting ‘‘, 

5 which may include charges for failure to 

6 submit to the Board required information 

7 or documents to any information system 

8 operated by the Board in a full, accurate, 

9 or timely manner, or any other failure to 

10 comply with the rules of the Board.’’; 

11 (I) in subparagraph (K)— 

12 (i) by inserting ‘‘broker, dealer, or’’ 

13 before ‘‘municipal securities dealer’’ each 

14 place that term appears; and 

15 (ii) by striking ‘‘municipal securities 

16 investment portfolio’’ and inserting ‘‘re17 lated account of a broker, dealer, or mu18 nicipal securities dealer’’; and 

19 (J) by adding at the end the following: 

20 ‘‘(L) provide continuing education require21 ments for municipal advisors. 

22 ‘‘(M) provide professional standards. 

23 ‘‘(N) not impose a regulatory burden on 

24 small municipal advisors that is not necessary 

25 or appropriate in the public interest and for the 


sroberts on DSKH9S0YB1PROD with BILLS
1100 

•S 3217 AMDT 3739 

1 protection of investors, municipal entities, and 

2 obligated persons.’’; 

3 (3) by redesignating paragraph (3) as para4 graph (7); and 

5 (4) by inserting after paragraph (2) the fol6 lowing: 

7 ‘‘(3) The Board, in conjunction with or on be8 half of any Federal financial regulator or self-regu9 latory organization, may— 

10 ‘‘(A) establish information systems; and 

11 ‘‘(B) assess such reasonable fees and 

12 charges for the submission of information to, or 

13 the receipt of information from, such systems 

14 from any persons which systems may be devel15 oped for the purposes of serving as a repository 

16 of information from municipal market partici17 pants or otherwise in furtherance of the pur18 poses of the Board, a Federal financial regu19 lator, or a self-regulatory organization. 

20 ‘‘(4) The Board shall provide guidance and as21 sistance in the enforcement of, and examination for, 

22 compliance with the rules of the Board to the Com23 mission, a registered securities association under 

24 section 15A, or any other appropriate regulatory 

25 agency, as applicable.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1101 

•S 3217 AMDT 3739 

1 (c) DISCIPLINE OF DEALERS AND MUNICIPAL ADVI2 SORS AND OTHER MATTERS.—Section 15B(c) of the Se3 curities Exchange Act of 1934 (15 U.S.C. 78o–4(c)) is 

4 amended— 

5 (1) in paragraph (1), by inserting ‘‘, and no 

6 broker, dealer, municipal securities dealer, or munic7 ipal advisor shall make use of the mails or any 

8 means or instrumentality of interstate commerce to 

9 provide advice to or on behalf of a municipal entity 

10 or obligated person with respect to municipal finan11 cial products, the issuance of municipal securities, or 

12 participation in the issuance of municipal securities, 

13 or to undertake a solicitation of a municipal entity 

14 or obligated person,’’ after ‘‘any municipal security’’; 

15 (2) in paragraph (2), by inserting ‘‘or municipal 

16 advisor’’ after ‘‘municipal securities dealer’’ each 

17 place that term appears; 

18 (3) in paragraph (3)— 

19 (A) by inserting ‘‘or municipal entities or 

20 obligated person’’ after ‘‘protection of inves21 tors’’ each place that term appears; and 

22 (B) by inserting ‘‘or municipal advisor’’ 

23 after ‘‘municipal securities dealer’’ each place 

24 that term appears; 


sroberts on DSKH9S0YB1PROD with BILLS
1102 

•S 3217 AMDT 3739 

1 (4) in paragraph (4), by inserting ‘‘or municipal 

2 advisor’’ after ‘‘municipal securities dealer or obli3 gated person’’ each place that term appears; 

4 (5) in paragraph (6)(B), by inserting ‘‘or mu5 nicipal entities’’ after ‘‘protection of investors’’; 

6 (6) in paragraph (7)— 

7 (A) in subparagraph (A)— 

8 (i) in clause (i), by striking ‘‘; and’’ 

9 and inserting a semicolon; 

10 (ii) in clause (ii), by striking the pe11 riod and inserting ‘‘; and’’; and 

12 (iii) by adding at the end the fol13 lowing: 

14 ‘‘(iii) the Commission, or its designee, 

15 in the case of municipal advisors.’’. 

16 (B) in subparagraph (B), by inserting ‘‘or 

17 municipal entities or obligated person’’ after 

18 ‘‘protection of investors’’; and 

19 (7) by adding at the end the following: 

20 ‘‘(9)(A) Fines collected by the Commission for 

21 violations of the rules of the Board shall be equally 

22 divided between the Commission and the Board. 

23 ‘‘(B) Fines collected by a registered securities 

24 association under section 15A(7) with respect to vio25 lations of the rules of the Board shall be accounted 


sroberts on DSKH9S0YB1PROD with BILLS
1103 

•S 3217 AMDT 3739 

1 for by such registered securities association sepa2 rately from other fines collected under section 

3 15A(7) and shall be allocated between such reg4 istered securities association and the Board at the 

5 direction of the Commission.’’. 

6 (d) ISSUANCE OF MUNICIPAL SECURITIES.—Section 

7 15B(d)(2) of the Securities Exchange Act of 1934 (15 

8 U.S.C. 78o–4(d)) is amended— 

9 (1) by striking ‘‘through a municipal securities 

10 broker or municipal securities dealer or otherwise’’ 

11 and inserting ‘‘through a municipal securities 

12 broker, municipal securities dealer, municipal advi13 sor, or otherwise’’; and 

14 (2) by inserting ‘‘or municipal advisors’’ before 

15 ‘‘to furnish’’. 

16 (e) DEFINITIONS.—Section 15B of the Securities Ex17 change Act of 1934 (15 U.S.C. 78o–4) is amended by add18 ing at the end the following: 

19 ‘‘(e) DEFINITIONS.—For purposes of this section— 

20 ‘‘(1) the term ‘Board’ means the Municipal Se21 curities Rulemaking Board established under sub22 section (b)(1); 

23 ‘‘(2) the term ‘guaranteed investment contract’ 

24 includes any investment that has specified with25 drawal or reinvestment provisions and a specifically 


sroberts on DSKH9S0YB1PROD with BILLS
1104 

•S 3217 AMDT 3739 

1 negotiated or bid interest rate, and also includes any 

2 agreement to supply investments on 2 or more fu3 ture dates, such as a forward supply contract; 

4 ‘‘(3) the term ‘investment strategies’ includes 

5 plans or programs for the investment of the proceeds 

6 of municipal securities that are not municipal de7 rivatives, guaranteed investment contracts, and the 

8 recommendation of and brokerage of municipal es9 crow investments; 

10 ‘‘(4) the term ‘municipal advisor’— 

11 ‘‘(A) means a person (who is not a munic12 ipal entity or an employee of a municipal enti13 ty) that— 

14 ‘‘(i) provides advice to or on behalf of 

15 a municipal entity or obligated person with 

16 respect to municipal financial products or 

17 the issuance of municipal securities, in18 cluding advice with respect to the struc19 ture, timing, terms, and other similar mat20 ters concerning such financial products or 

21 issues; 

22 ‘‘(ii) participates in the issuance of 

23 municipal securities; or 

24 ‘‘(iii) undertakes a solicitation of a 

25 municipal entity; 


sroberts on DSKH9S0YB1PROD with BILLS
1105 

•S 3217 AMDT 3739 

1 ‘‘(B) includes financial advisors, guaran2 teed investment contract brokers, third-party 

3 marketers, placement agents, solicitors, finders, 

4 and swap advisors, if such persons are de5 scribed in any of clauses (i) through (iii) of sub6 paragraph (A); and 

7 ‘‘(C) does not include a broker, dealer, or 

8 municipal securities dealer serving as an under9 writer (as defined in section 2(a)(11) of the Se10 curities Act of 1933) (15 U.S.C. 77b(a)(11)), 

11 any investment adviser registered under the In12 vestment Advisers Act of 1940, or persons asso13 ciated with such investment advisers who are 

14 providing investment advice, attorneys offering 

15 legal advice or providing services that are of a 

16 traditional legal nature, or engineers providing 

17 engineering advice; 

18 ‘‘(5) the term ‘municipal derivative’ means any 

19 financial instrument or contract designed to hedge a 

20 risk (including interest rate swaps, basis swaps, 

21 credit default swaps, caps, floors, and collars); 

22 ‘‘(6) the term ‘municipal financial product’ 

23 means municipal derivatives, guaranteed investment 

24 contracts, and investment strategies; 


sroberts on DSKH9S0YB1PROD with BILLS
1106 

•S 3217 AMDT 3739 

1 ‘‘(7) the term ‘rules of the Board’ means the 

2 rules proposed and adopted by the Board under sub3 section (b)(2); 

4 ‘‘(8) the term ‘person associated with a munic5 ipal advisor’ or ‘associated person of an advisor’ 

6 means— 

7 ‘‘(A) any partner, officer, director, or 

8 branch manager of such municipal advisor (or 

9 any person occupying a similar status or per10 forming similar functions); 

11 ‘‘(B) any other employee of such municipal 

12 advisor who is engaged in the management, di13 rection, supervision, or performance of any ac14 tivities relating to the provision of advice to or 

15 on behalf of a municipal entity or obligated per16 son with respect to municipal financial prod17 ucts, the issuance of municipal securities, or 

18 participation in the issuance of municipal secu19 rities; and 

20 ‘‘(C) any person directly or indirectly con21 trolling, controlled by, or under common control 

22 with such municipal advisor; 

23 ‘‘(9) the term ‘municipal entity’ means any 

24 State, political subdivision of a State, or municipal 

25 corporate instrumentality of a State, including— 


sroberts on DSKH9S0YB1PROD with BILLS
1107 

•S 3217 AMDT 3739 

1 ‘‘(A) any agency, authority, or instrumen2 tality of the State, political subdivision, or mu3 nicipal corporate instrumentality; 

4 ‘‘(B) any plan, program, or pool of assets 

5 sponsored or established by the State, political 

6 subdivision, or municipal corporate instrumen7 tality or any agency, authority, or instrumen8 tality thereof; and 

9 ‘‘(C) any other issuer of municipal securi10 ties; 

11 ‘‘(10) the term ‘solicitation of a municipal enti12 ty or obligated person’ means a direct or indirect 

13 communication with a municipal entity or obligated 

14 person made by a person, for direct or indirect com15 pensation, on behalf of a broker, dealer, municipal 

16 securities dealer, municipal advisor, or investment 

17 adviser (as defined in section 202 of the Investment 

18 Advisers Act of 1940) that does not control, is not 

19 controlled by, or is not under common control with 

20 the person undertaking such solicitation for the pur21 pose of obtaining or retaining an engagement by a 

22 municipal entity or obligated person of a broker, 

23 dealer, municipal securities dealer, or municipal ad24 visor for or in connection with municipal financial 

25 products, the issuance of municipal securities, or 


sroberts on DSKH9S0YB1PROD with BILLS
1108 

•S 3217 AMDT 3739 

1 participation in the issuance of municipal securities, 

2 or of an investment adviser to provide investment 

3 advisory services to or on behalf of a municipal enti4 ty; and 

5 ‘‘(11) the term ‘obligated person’ means any 

6 person, including an issuer of municipal securities, 

7 who is either generally or through an enterprise, 

8 fund, or account of such person, committed by con9 tract or other arrangement to support the payment 

10 of all or part of the obligations on the municipal se11 curities to be sold in an offering of municipal securi12 ties.’’. 

13 (f) REGISTERED SECURITIES ASSOCIATION.—Section 

14 15A(b) of the Securities Exchange Act of 1934 (15 U.S.C. 

15 78o–3(b)) is amended by adding at the end the following: 

16 ‘‘(15) The rules of the association provide that 

17 the association shall— 

18 ‘‘(A) request guidance from the Municipal 

19 Securities Rulemaking Board in interpretation 

20 of the rules of the Municipal Securities Rule21 making Board; and 

22 ‘‘(B) provide information to the Municipal 

23 Securities Rulemaking Board about the enforce24 ment actions and examinations of the associaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01108 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1109 

•S 3217 AMDT 3739 

1 tion under section 15B(b)(2)(E), so that the 

2 Municipal Securities Rulemaking Board may— 

3 ‘‘(i) assist in such enforcement actions 

4 and examinations; and 

5 ‘‘(ii) evaluate the ongoing effective6 ness of the rules of the Board.’’. 

7 (g) REGISTRATION AND REGULATION OF BROKERS

8 AND DEALERS.—Section 15 of the Securities Exchange 

9 Act of 1934 is amended— 

10 (1) in subsection (b)(4), by inserting ‘‘munic11 ipal advisor,’’ after ‘‘municipal securities dealer’’ 

12 each place that term appears; and 

13 (2) in subsection (c), by inserting ‘‘broker, deal14 er, or’’ before ‘‘municipal securities dealer’’ each 

15 place that term appears. 

16 (h) ACCOUNTS AND RECORDS, REPORTS, EXAMINA17 TIONS OF EXCHANGES, MEMBERS, AND OTHERS.—Sec18 tion 17(a)(1) of the Securities Exchange Act of 1934 is 

19 amended by inserting ‘‘municipal advisor,’’ after ‘‘munic20 ipal securities dealer’’. 

21 (i) SAVINGS CLAUSE.—Notwithstanding any provi22 sion of the Over-the-Counter Derivatives Markets Act of 

23 2010, or any amendment made pursuant to such Act, the 

24 provisions of this section, and the amendments made purVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01109 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1110 

•S 3217 AMDT 3739 

1 suant to this section, shall apply to any municipal deriva2 tive. 

3 (j) EFFECTIVE DATE.—This section, and the amend4 ments made by this section, shall take effect on October 

5 1, 2010. 

6 SEC. 976. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

7 OF INCREASED DISCLOSURE TO INVESTORS. 

8 (a) STUDY.—The Comptroller General of the United 

9 States shall conduct a study and review of the disclosure 

10 required to be made by issuers of municipal securities. 

11 (b) SUBJECTS FOR EVALUATION.—In conducting the 

12 study under subsection (a), the Comptroller General of the 

13 United States shall— 

14 (1) broadly describe— 

15 (A) the size of the municipal securities 

16 markets and the issuers and investors; and 

17 (B) the disclosures provided by issuers to 

18 investors; 

19 (2) compare the amount, frequency, and quality 

20 of disclosures that issuers of municipal securities are 

21 required by law to provide for the benefit of munic22 ipal securities holders, including the amount of and 

23 frequency of disclosures actually provided by issuers 

24 of municipal securities, with the amount of and fre25 quency of disclosures that issuers of corporate secuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01110 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1111 

•S 3217 AMDT 3739 

1 rities provide for the benefit of corporate securities 

2 holders, taking into account the differences between 

3 issuers of municipal securities and issuers of cor4 porate securities; 

5 (3) evaluate the costs and benefits to various 

6 types of issuers of municipal securities of requiring 

7 issuers of municipal bonds to provide additional fi8 nancial disclosures for the benefit of investors; 

9 (4) evaluate the potential benefit to investors 

10 from additional financial disclosures by issuers of 

11 municipal bonds; and 

12 (5) make recommendations relating to disclo13 sure requirements for municipal issuers, including 

14 the advisability of the repeal or retention of section 

15 15B(d) of the Securities Exchange Act of 1934 (15 

16 U.S.C. 78o–4(d)) (commonly known as the ‘‘Tower 

17 Amendment’’). 

18 (c) REPORT.—Not later than 1 year after the date 

19 of enactment of this Act, the Comptroller General of the 

20 United States shall submit a report to Congress on the 

21 results of the study conducted under subsection (a), in22 cluding recommendations for how to improve disclosure by 

23 issuers of municipal securities. 


sroberts on DSKH9S0YB1PROD with BILLS
1112 

•S 3217 AMDT 3739 

1 SEC. 977. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

2 ON THE MUNICIPAL SECURITIES MARKETS. 

3 (a) STUDY.—The Comptroller General of the United 

4 States shall conduct a study of the municipal securities 

5 markets. 

6 (b) REPORT.—Not later than 180 days after the date 

7 of enactment of this Act, the Comptroller General of the 

8 United States shall submit a report to the Committee on 

9 Banking, Housing, and Urban Affairs of the Senate, and 

10 the Committee on Financial Services of the House of Rep11 resentatives, with copies to the Special Committee on 

12 Aging of the Senate and the Commission, on the results 

13 of the study conducted under subsection (a), including— 

14 (1) an analysis of the mechanisms for trading, 

15 quality of trade executions, market transparency, 

16 trade reporting, price discovery, settlement clearing, 

17 and credit enhancements; 

18 (2) the needs of the markets and investors and 

19 the impact of recent innovations; 

20 (3) recommendations for how to improve the 

21 transparency, efficiency, fairness, and liquidity of 

22 trading in the municipal securities markets, includ23 ing with reference to items listed in paragraph (1); 

24 and 

25 (4) potential uses of derivatives in the munic26 ipal securities markets. 


sroberts on DSKH9S0YB1PROD with BILLS
1113 

•S 3217 AMDT 3739 

1 (c) RESPONSES.—Not later than 180 days after re2 ceipt of the report required under subsection (b), the Com3 mission shall submit a response to the Committee on 

4 Banking, Housing, and Urban Affairs of the Senate, and 

5 the Committee on Financial Services of the House of Rep6 resentatives, with a copy to the Special Committee on 

7 Aging of the Senate, stating the actions the Commission 

8 has taken in response to the recommendations contained 

9 in such report. 

10 SEC. 978. STUDY OF FUNDING FOR GOVERNMENT AC11 COUNTING STANDARDS BOARD. 

12 (a) STUDY.—The Commission shall conduct a study 

13 that evaluates— 

14 (1) the role and importance of the Government 

15 Accounting Standards Board in the municipal secu16 rities markets; 

17 (2) the manner in which the Government Ac18 counting Standards Board is funded, and how such 

19 manner of funding affects the financial information 

20 available to securities investors; 

21 (3) the advisability of changes to the manner in 

22 which the Government Accounting Standards Board 

23 is funded; and 

24 (4) whether legislative changes to the manner 

25 in which the Government Accounting Standards 


sroberts on DSKH9S0YB1PROD with BILLS
1114 

•S 3217 AMDT 3739 

1 Board is funded are necessary for the benefit of in2 vestors and in the public interest. 

3 (b) CONSULTATION.—In conducting the study re4 quired under subsection (a), the Commission shall consult 

5 with State and local government financial officers. 

6 (c) REPORT.—Not later than 270 days after the date 

7 of enactment of this Act, the Commission shall submit to 

8 the Committee on Banking, Housing, and Urban Affairs 

9 of the Senate and the Committee on Financial Services 

10 of the House of Representatives a report on the study re11 quired under subsection (a). 

12 SEC. 979. COMMISSION OFFICE OF MUNICIPAL SECURITIES. 

13 (a) IN GENERAL.—There shall be in the Commission 

14 an Office of Municipal Securities, which shall— 

15 (1) administer the rules of the Commission with 

16 respect to the practices of municipal securities bro17 kers and dealers, municipal securities advisors, mu18 nicipal securities investors, and municipal securities 

19 issuers; and 

20 (2) coordinate with the Municipal Securities 

21 Rulemaking Board for rulemaking and enforcement 

22 actions as required by law. 

23 (b) DIRECTOR OF THE OFFICE.—The head of the Of24 fice of Municipal Securities shall be the Director, who 

25 shall report to the Chairman. 


sroberts on DSKH9S0YB1PROD with BILLS
1115 

•S 3217 AMDT 3739 

1 (c) STAFFING.— 

2 (1) IN GENERAL.—The Office of Municipal Se3 curities shall be staffed sufficiently to carry out the 

4 requirements of this section. 

5 (2) REQUIREMENT.—The staff of the Office of 

6 Municipal Securities shall include individuals with 

7 knowledge of and expertise in municipal finance. 

8 Subtitle I—Public Company Ac9 counting Oversight Board, Port10 folio Margining, and Other Mat11 ters 

12 SEC. 981. AUTHORITY TO SHARE CERTAIN INFORMATION 

13 WITH FOREIGN AUTHORITIES. 

14 (a) DEFINITION.—Section 2(a) of the Sarbanes15 Oxley Act of 2002 (15 U.S.C. 7201(a)) is amended by 

16 adding at the end the following: 

17 ‘‘(17) FOREIGN AUDITOR OVERSIGHT AUTHOR18 ITY.—The term ‘foreign auditor oversight authority’ 

19 means any governmental body or other entity em20 powered by a foreign government to conduct inspec21 tions of public accounting firms or otherwise to ad22 minister or enforce laws related to the regulation of 

23 public accounting firms.’’. 

24 (b) AVAILABILITY TO SHARE INFORMATION.—Sec25 tion 105(b)(5) of the Sarbanes-Oxley Act of 2002 (15 


sroberts on DSKH9S0YB1PROD with BILLS
1116 

•S 3217 AMDT 3739 

1 U.S.C. 7215(b)(5)) is amended by adding at the end the 

2 following: 

3 ‘‘(C) AVAILABILITY TO FOREIGN OVER4 SIGHT AUTHORITIES.—Without the loss of its 

5 status as confidential and privileged in the 

6 hands of the Board, all information referred to 

7 in subparagraph (A) that relates to a public ac8 counting firm that a foreign government has 

9 empowered a foreign auditor oversight authority 

10 to inspect or otherwise enforce laws with re11 spect to, may, at the discretion of the Board, be 

12 made available to the foreign auditor oversight 

13 authority, if— 

14 ‘‘(i) the Board finds that it is nec15 essary to accomplish the purposes of this 

16 Act or to protect investors; 

17 ‘‘(ii) the foreign auditor oversight au18 thority provides— 

19 ‘‘(I) such assurances of confiden20 tiality as the Board may request; 

21 ‘‘(II) a description of the applica22 ble information systems and controls 

23 of the foreign auditor oversight au24 thority; and 


sroberts on DSKH9S0YB1PROD with BILLS
1117 

•S 3217 AMDT 3739 

1 ‘‘(III) a description of the laws 

2 and regulations of the foreign govern3 ment of the foreign auditor oversight 

4 authority that are relevant to informa5 tion access; and 

6 ‘‘(iii) the Board determines that it is 

7 appropriate to share such information.’’. 

8 (c) CONFORMING AMENDMENT.—Section 

9 105(b)(5)(A) of the Sarbanes-Oxley Act of 2002 (15 

10 U.S.C. 7215(b)(5)(A)) is amended by striking ‘‘subpara11 graph (B)’’ and inserting ‘‘subparagraphs (B) and (C)’’. 

12 SEC. 982. OVERSIGHT OF BROKERS AND DEALERS. 

13 (a) DEFINITIONS.— 

14 (1) DEFINITIONS AMENDED.—Title I of the 

15 Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et 

16 seq.) is amended by adding at the end the following 

17 new section: 

18 ‘‘SEC. 110. DEFINITIONS. 

19 ‘‘For the purposes of this title, the following defini20 tions shall apply: 

21 ‘‘(1) AUDIT.—The term ‘audit’ means an exam22 ination of the financial statements, reports, docu23 ments, procedures, controls, or notices of any issuer, 

24 broker, or dealer by an independent public account25 ing firm in accordance with the rules of the Board 


sroberts on DSKH9S0YB1PROD with BILLS
1118 

•S 3217 AMDT 3739 

1 or the Commission, for the purpose of expressing an 

2 opinion on the financial statements or providing an 

3 audit report. 

4 ‘‘(2) AUDIT REPORT.—The term ‘audit report’ 

5 means a document, report, notice, or other record— 

6 ‘‘(A) prepared following an audit per7 formed for purposes of compliance by an issuer, 

8 broker, or dealer with the requirements of the 

9 securities laws; and 

10 ‘‘(B) in which a public accounting firm ei11 ther— 

12 ‘‘(i) sets forth the opinion of that firm 

13 regarding a financial statement, report, no14 tice, or other document, procedures, or 

15 controls; or 

16 ‘‘(ii) asserts that no such opinion can 

17 be expressed. 

18 ‘‘(3) BROKER.—The term ‘broker’ means a 

19 broker (as such term is defined in section 3(a)(4) of 

20 the Securities Exchange Act of 1934 (15 U.S.C. 

21 78c(a)(4))) that is required to file a balance sheet, 

22 income statement, or other financial statement 

23 under section 17(e)(1)(A) of such Act (15 U.S.C. 

24 78q(e)(1)(A)), where such balance sheet, income 


sroberts on DSKH9S0YB1PROD with BILLS
1119 

•S 3217 AMDT 3739 

1 statement, or financial statement is required to be 

2 certified by a registered public accounting firm. 

3 ‘‘(4) DEALER.—The term ‘dealer’ means a 

4 dealer (as such term is defined in section 3(a)(5) of 

5 the Securities Exchange Act of 1934 (15 U.S.C. 

6 78c(a)(5))) that is required to file a balance sheet, 

7 income statement, or other financial statement 

8 under section 17(e)(1)(A) of such Act (15 U.S.C. 

9 78q(e)(1)(A)), where such balance sheet, income 

10 statement, or financial statement is required to be 

11 certified by a registered public accounting firm. 

12 ‘‘(5) PROFESSIONAL STANDARDS.—The term 

13 ‘professional standards’ means— 

14 ‘‘(A) accounting principles that are— 

15 ‘‘(i) established by the standard set16 ting body described in section 19(b) of the 

17 Securities Act of 1933, as amended by this 

18 Act, or prescribed by the Commission 

19 under section 19(a) of that Act (15 U.S.C. 

20 17a(s)) or section 13(b) of the Securities 

21 Exchange Act of 1934 (15 U.S.C. 78a(m)); 

22 and 

23 ‘‘(ii) relevant to audit reports for par24 ticular issuers, brokers, or dealers, or dealt 

25 with in the quality control system of a parVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01119 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1120 

•S 3217 AMDT 3739 

1 ticular registered public accounting firm; 

2 and 

3 ‘‘(B) auditing standards, standards for at4 testation engagements, quality control policies 

5 and procedures, ethical and competency stand6 ards, and independence standards (including 

7 rules implementing title II) that the Board or 

8 the Commission determines— 

9 ‘‘(i) relate to the preparation or 

10 issuance of audit reports for issuers, bro11 kers, or dealers; and 

12 ‘‘(ii) are established or adopted by the 

13 Board under section 103(a), or are pro14 mulgated as rules of the Commission. 

15 ‘‘(6) SELF-REGULATORY ORGANIZATION.—The 

16 term ‘self-regulatory organization’ has the same 

17 meaning as in section 3(a) of the Securities Ex18 change Act of 1934 (15 U.S.C. 78c(a)).’’. 

19 (2) CONFORMING AMENDMENT.—Section 2(a) 

20 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 

21 7201(a)) is amended in the matter preceding para22 graph (1), by striking ‘‘In this’’ and inserting ‘‘Ex23 cept as otherwise specifically provided in this Act, in 

24 this’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1121 

•S 3217 AMDT 3739 

1 (b) ESTABLISHMENT AND ADMINISTRATION OF THE

2 PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD.— 

3 Section 101 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 

4 7211) is amended— 

5 (1) by striking ‘‘issuers’’ each place that term 

6 appears and inserting ‘‘issuers, brokers, and deal7 ers’’; and 

8 (2) in subsection (a)— 

9 (A) by striking ‘‘public companies’’ and in10 serting ‘‘companies’’; and 

11 (B) by striking ‘‘for companies the securi12 ties of which are sold to, and held by and for, 

13 public investors’’. 

14 (c) REGISTRATION WITH THE BOARD.—Section 102 

15 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7212) is 

16 amended— 

17 (1) in subsection (a)— 

18 (A) by striking ‘‘Beginning 180’’ and all 

19 that follows through ‘‘101(d), it’’ and inserting 

20 ‘‘It’’; and 

21 (B) by striking ‘‘issuer’’ and inserting 

22 ‘‘issuer, broker, or dealer’’; 

23 (2) in subsection (b)— 


sroberts on DSKH9S0YB1PROD with BILLS
1122 

•S 3217 AMDT 3739 

1 (A) in paragraph (2)(A), by striking 

2 ‘‘issuers’’ and inserting ‘‘issuers, brokers, and 

3 dealers’’; and 

4 (B) by striking ‘‘issuer’’ each place that 

5 term appears and inserting ‘‘issuer, broker, or 

6 dealer’’. 

7 (d) AUDITING AND INDEPENDENCE.—Section 103(a) 

8 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7213(a)) 

9 is amended— 

10 (1) in paragraph (1), by striking ‘‘and such eth11 ics standards’’ and inserting ‘‘such ethics standards, 

12 and such independence standards’’; 

13 (2) in paragraph (2)(A)(iii), by striking ‘‘de14 scribe in each audit report’’ and inserting ‘‘in each 

15 audit report for an issuer, describe’’; and 

16 (3) in paragraph (2)(B)(i), by striking 

17 ‘‘issuers’’ and inserting ‘‘issuers, brokers, and deal18 ers’’. 

19 (e) INSPECTIONS OF REGISTERED PUBLIC ACCOUNT20 ING FIRMS.—Section 104 of the Sarbanes-Oxley Act of 

21 2002 (15 U.S.C. 7214) is amended— 

22 (1) in subsection (a), by striking ‘‘issuers’’ and 

23 inserting ‘‘issuers, brokers, and dealers’’; and 

24 (2) in subsection (b)(1)— 


sroberts on DSKH9S0YB1PROD with BILLS
1123 

•S 3217 AMDT 3739 

1 (A) by striking ‘‘audit reports for’’ each 

2 place that term appears and inserting ‘‘audit 

3 reports on annual financial statements for’’; 

4 (B) in subparagraph (A), by striking 

5 ‘‘and’’ at the end; 

6 (C) in subparagraph (B), by striking the 

7 period at the end and inserting ‘‘; and’’; and 

8 (D) by adding at the end the following: 

9 ‘‘(C) with respect to each registered public 

10 accounting firm that regularly provides audit 

11 reports and that is not described in subpara12 graph (A) or (B), on a basis determined by the 

13 Board, by rule, that is consistent with the pub14 lic interest and protection of investors.’’. 

15 (f) INVESTIGATIONS AND DISCIPLINARY PRO16 CEEDINGS.—Section 105(c)(7)(B) of the Sarbanes-Oxley 

17 Act of 2002 (15 U.S.C. 7215(c)(7)(B)) is amended— 

18 (1) in the subparagraph heading, by inserting 

19 ‘‘, BROKER, OR DEALER’’ after ‘‘ISSUER’’; 

20 (2) by striking ‘‘any issuer’’ each place that 

21 term appears and inserting ‘‘any issuer, broker, or 

22 dealer’’; and 

23 (3) by striking ‘‘an issuer under this sub24 section’’ and inserting ‘‘a registered public account25 ing firm under this subsection’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1124 

•S 3217 AMDT 3739 

1 (g) FOREIGN PUBLIC ACCOUNTING FIRMS.—Section 

2 106(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 

3 7216(a)) is amended— 

4 (1) in paragraph (1), by striking ‘‘issuer’’ and 

5 inserting ‘‘issuer, broker, or dealer’’; and 

6 (2) in paragraph (2), by striking ‘‘issuers’’ and 

7 inserting ‘‘issuers, brokers, or dealers’’. 

8 (h) FUNDING.—Section 109 of the Sarbanes-Oxley 

9 Act of 2002 (15 U.S.C. 7219) is amended— 

10 (1) in subsection (c)(2), by striking ‘‘subsection 

11 (i)’’ and inserting ‘‘subsection (j)’’; 

12 (2) in subsection (d)— 

13 (A) in paragraph (2), by striking ‘‘allowing 

14 for differentiation among classes of issuers, as 

15 appropriate’’ and inserting ‘‘and among brokers 

16 and dealers, in accordance with subsection (h), 

17 and allowing for differentiation among classes 

18 of issuers, brokers and dealers, as appropriate’’; 

19 and 

20 (B) by adding at the end the following: 

21 ‘‘(3) BROKERS AND DEALERS.—The Board 

22 shall begin the allocation, assessment, and collection 

23 of fees under paragraph (2) with respect to brokers 

24 and dealers with the payment of support fees to 


sroberts on DSKH9S0YB1PROD with BILLS
1125 

•S 3217 AMDT 3739 

1 fund the first full fiscal year beginning after the ef2 fective date of this paragraph.’’; 

3 (3) by redesignating subsections (h), (i), and (j) 

4 as subsections (i), (j), and (k), respectively; and 

5 (4) by inserting after subsection (g) the fol6 lowing: 

7 ‘‘(h) ALLOCATION OF ACCOUNTING SUPPORT FEES

8 AMONG BROKERS AND DEALERS.— 

9 ‘‘(1) OBLIGATION TO PAY.—Each broker or 

10 dealer shall pay to the Board the annual accounting 

11 support fee allocated to such broker or dealer under 

12 this section. 

13 ‘‘(2) ALLOCATION.—Any amount due from a 

14 broker or dealer (or from a particular class of bro15 kers and dealers) under this section shall be allo16 cated among brokers and dealers and payable by the 

17 broker or dealer (or the brokers and dealers in the 

18 particular class, as applicable). 

19 ‘‘(3) PROPORTIONALITY.—The amount due 

20 from a broker or dealer shall be in proportion to the 

21 net capital of the broker or dealer, compared to the 

22 total net capital of all brokers and dealers, in ac23 cordance with rules issued by the Board.’’. 

24 (i) REFERRAL OF INVESTIGATIONS TO A SELF-REGU25 LATORY ORGANIZATION.—Section 105(b)(4)(B) of the 


sroberts on DSKH9S0YB1PROD with BILLS
1126 

•S 3217 AMDT 3739 

1 Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(4)(B)) 

2 is amended— 

3 (1) by redesignating clauses (ii) and (iii) as 

4 clauses (iii) and (iv), respectively; and 

5 (2) by inserting after clause (i) the following: 

6 ‘‘(ii) to a self-regulatory organization, 

7 in the case of an investigation that con8 cerns an audit report for a broker or deal9 er that is under the jurisdiction of such 

10 self-regulatory organization;’’. 

11 (j) USE OF DOCUMENTS RELATED TO AN INSPEC12 TION OR INVESTIGATION.—Section 105(b)(5)(B)(ii) of the 

13 Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)) 

14 is amended— 

15 (1) in subclause (III), by striking ‘‘and’’ at the 

16 end; 

17 (2) in subclause (IV), by striking the comma 

18 and inserting ‘‘; and’’; and 

19 (3) by inserting after subclause (IV) the fol20 lowing: 

21 ‘‘(V) a self-regulatory organiza22 tion, with respect to an audit report 

23 for a broker or dealer that is under 

24 the jurisdiction of such self-regulatory 

25 organization,’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1127 

•S 3217 AMDT 3739 

1 (k) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect 180 days after the date of 

3 enactment of this Act. 

4 SEC. 983. PORTFOLIO MARGINING. 

5 (a) ADVANCES.—Section 9(a)(1) of the Securities In6 vestor Protection Act of 1970 (15 U.S.C. 78fff–3(a)(1)) 

7 is amended by inserting ‘‘or options on commodity futures 

8 contracts’’ after ‘‘claim for securities’’. 

9 (b) DEFINITIONS.—Section 16 of the Securities In10 vestor Protection Act of 1970 (15 U.S.C. 78lll) is amend11 ed— 

12 (1) by striking paragraph (2) and inserting the 

13 following: 

14 ‘‘(2) CUSTOMER.— 

15 ‘‘(A) IN GENERAL.—The term ‘customer’ 

16 of a debtor means any person (including any 

17 person with whom the debtor deals as principal 

18 or agent) who has a claim on account of securi19 ties received, acquired, or held by the debtor in 

20 the ordinary course of its business as a broker 

21 or dealer from or for the securities accounts of 

22 such person for safekeeping, with a view to sale, 

23 to cover consummated sales, pursuant to pur24 chases, as collateral, security, or for purposes of 

25 effecting transfer. 


sroberts on DSKH9S0YB1PROD with BILLS
1128 

•S 3217 AMDT 3739 

1 ‘‘(B) INCLUDED PERSONS.—The term 

2 ‘customer’ includes— 

3 ‘‘(i) any person who has deposited 

4 cash with the debtor for the purpose of 

5 purchasing securities; 

6 ‘‘(ii) any person who has a claim 

7 against the debtor for cash, securities, fu8 tures contracts, or options on futures con9 tracts received, acquired, or held in a port10 folio margining account carried as a secu11 rities account pursuant to a portfolio mar12 gining program approved by the Commis13 sion; and 

14 ‘‘(iii) any person who has a claim 

15 against the debtor arising out of sales or 

16 conversions of such securities. 

17 ‘‘(C) EXCLUDED PERSONS.—The term 

18 ‘customer’ does not include any person, to the 

19 extent that— 

20 ‘‘(i) the claim of such person arises 

21 out of transactions with a foreign sub22 sidiary of a member of SIPC; or 

23 ‘‘(ii) such person has a claim for cash 

24 or securities which by contract, agreement, 

25 or understanding, or by operation of law, 


sroberts on DSKH9S0YB1PROD with BILLS
1129 

•S 3217 AMDT 3739 

1 is part of the capital of the debtor, or is 

2 subordinated to the claims of any or all 

3 creditors of the debtor, notwithstanding 

4 that some ground exists for declaring such 

5 contract, agreement, or understanding void 

6 or voidable in a suit between the claimant 

7 and the debtor.’’; 

8 (2) in paragraph (4)— 

9 (A) in subparagraph (C), by striking 

10 ‘‘and’’ at the end; 

11 (B) by redesignating subparagraph (D) as 

12 subparagraph (E); and 

13 (C) by inserting after subparagraph (C) 

14 the following: 

15 ‘‘(D) in the case of a portfolio margining 

16 account of a customer that is carried as a secu17 rities account pursuant to a portfolio margining 

18 program approved by the Commission, a futures 

19 contract or an option on a futures contract re20 ceived, acquired, or held by or for the account 

21 of a debtor from or for such portfolio margining 

22 account, and the proceeds thereof; and’’; 

23 (3) in paragraph (9), in the matter following 

24 subparagraph (L), by inserting after ‘‘Such term’’ 

25 the following: ‘‘includes revenues earned by a broker 


sroberts on DSKH9S0YB1PROD with BILLS
1130 

•S 3217 AMDT 3739 

1 or dealer in connection with a transaction in the 

2 portfolio margining account of a customer carried as 

3 securities accounts pursuant to a portfolio margining 

4 program approved by the Commission. Such term’’; 

5 and 

6 (4) in paragraph (11)— 

7 (A) in subparagraph (A)— 

8 (i) by striking ‘‘filing date, all’’ and 

9 all that follows through the end of the sub10 paragraph and inserting the following: ‘‘fil11 ing date— 

12 ‘‘(i) all securities positions of such 

13 customer (other than customer name secu14 rities reclaimed by such customer); and 

15 ‘‘(ii) all positions in futures contracts 

16 and options on futures contracts held in a 

17 portfolio margining account carried as a 

18 securities account pursuant to a portfolio 

19 margining program approved by the Com20 mission, including all property 

21 collateralizing such positions, to the extent 

22 that such property is not otherwise in23 cluded herein; minus’’; and 

24 (B) in the matter following subparagraph 

25 (C), by striking ‘‘In determining’’ and inserting 


sroberts on DSKH9S0YB1PROD with BILLS
1131 

•S 3217 AMDT 3739 

1 the following: ‘‘A claim for a commodity futures 

2 contract received, acquired, or held in a port3 folio margining account pursuant to a portfolio 

4 margining program approved by the Commis5 sion or a claim for a security futures contract, 

6 shall be deemed to be a claim with respect to 

7 such contract as of the filing date, and such 

8 claim shall be treated as a claim for cash. In 

9 determining’’. 

10 SEC. 984. LOAN OR BORROWING OF SECURITIES. 

11 (a) RULEMAKING AUTHORITY.—Section 10 of the Se12 curities Exchange Act of 1934 (15 U.S.C. 78j) is amended 

13 by adding at the end the following: 

14 ‘‘(c)(1) To effect, accept, or facilitate a trans15 action involving the loan or borrowing of securities 

16 in contravention of such rules and regulations as the 

17 Commission may prescribe as necessary or appro18 priate in the public interest or for the protection of 

19 investors. 

20 ‘‘(2) Nothing in paragraph (1) may be con21 strued to limit the authority of the appropriate Fed22 eral banking agency (as defined in section 3(q) of 

23 the Federal Deposit Insurance Act (12 U.S.C. 

24 1813(q))), the National Credit Union Administra25 tion, or any other Federal department or agency 


sroberts on DSKH9S0YB1PROD with BILLS
1132 

•S 3217 AMDT 3739 

1 having a responsibility under Federal law to pre2 scribe rules or regulations restricting transactions 

3 involving the loan or borrowing of securities in order 

4 to protect the safety and soundness of a financial in5 stitution or to protect the financial system from sys6 temic risk.’’. 

7 (b) RULEMAKING REQUIRED.—Not later than 2 

8 years after the date of enactment of this Act, the Commis9 sion shall promulgate rules that are designed to increase 

10 the transparency of information available to brokers, deal11 ers, and investors, with respect to the loan or borrowing 

12 of securities. 

13 SEC. 985. TECHNICAL CORRECTIONS TO FEDERAL SECURI14 TIES LAWS. 

15 (a) SECURITIES ACT OF 1933.—The Securities Act 

16 of 1933 (15 U.S.C. 77a et seq.) is amended— 

17 (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by 

18 striking ‘‘individual;’’ and inserting ‘‘individual,’’; 

19 (2) in section 18 (15 U.S.C. 77r)— 

20 (A) in subsection (b)(1)(C), by striking ‘‘is 

21 a security’’ and inserting ‘‘a security’’; and 

22 (B) in subsection (c)(2)(B)(i), by striking 

23 ‘‘State, or’’ and inserting ‘‘State or’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1133 

•S 3217 AMDT 3739 

1 (3) in section 19(d)(6)(A) (15 U.S.C. 

2 77s(d)(6)(A)), by striking ‘‘in paragraph (1) of (3)’’ 

3 and inserting ‘‘in paragraph (1) or (3)’’; and 

4 (4) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z– 

5 2(c)(1)(B)(ii)), by striking ‘‘business entity;’’ and in6 serting ‘‘business entity,’’. 

7 (b) SECURITIES EXCHANGE ACT OF 1934.—The Se8 curities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 

9 is amended— 

10 (1) in section 2 (15 U.S.C. 78b), by striking 

11 ‘‘affected’’ and inserting ‘‘effected’’; 

12 (2) in section 3 (15 U.S.C. 78c)— 

13 (A) in subsection (a)(55)(A), by striking 

14 ‘‘section 3(a)(12) of the Securities Exchange 

15 Act of 1934’’ and inserting ‘‘section 3(a)(12) of 

16 this title’’; and 

17 (B) in subsection (g), by striking ‘‘com18 pany, account person, or entity’’ and inserting 

19 ‘‘company, account, person, or entity’’; 

20 (3) in section 10A(i)(1)(B) (15 U.S.C. 78j– 

21 1(i)(1)(B))— 

22 (A) in the subparagraph heading, by strik23 ing ‘‘MINIMUS’’ and inserting ‘‘MINIMIS’’; and 

24 (B) in clause (i), by striking ‘‘nonaudit’’ 

25 and inserting ‘‘non-audit’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1134 

•S 3217 AMDT 3739 

1 (4) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), 

2 by striking ‘‘earning statement’’ and inserting 

3 ‘‘earnings statement’’; 

4 (5) in section 15 (15 U.S.C. 78o)— 

5 (A) in subsection (b)(1)— 

6 (i) in subparagraph (B), by striking 

7 ‘‘The order granting’’ and all that follows 

8 through ‘‘from such membership.’’; and 

9 (ii) in the undesignated matter imme10 diately following subparagraph (B), by in11 serting after the first sentence the fol12 lowing: ‘‘The order granting registration 

13 shall not be effective until such broker or 

14 dealer has become a member of a reg15 istered securities association, or until such 

16 broker or dealer has become a member of 

17 a national securities exchange, if such 

18 broker or dealer effects transactions solely 

19 on that exchange, unless the Commission 

20 has exempted such broker or dealer, by 

21 rule or order, from such membership.’’; 

22 (6) in section 15C(a)(2) (15 U.S.C. 78o– 

23 5(a)(2))— 

24 (A) by redesignating clauses (i) and (ii) as 

25 subparagraphs (A) and (B), respectively, and 


sroberts on DSKH9S0YB1PROD with BILLS
1135 

•S 3217 AMDT 3739 

1 adjusting the subparagraph margins accord2 ingly; 

3 (B) in subparagraph (B), as so redesig4 nated, by striking ‘‘The order granting’’ and all 

5 that follows through ‘‘from such membership.’’; 

6 and 

7 (C) in the matter following subparagraph 

8 (B), as so redesignated, by inserting after the 

9 first sentence the following: ‘‘The order grant10 ing registration shall not be effective until such 

11 government securities broker or government se12 curities dealer has become a member of a na13 tional securities exchange registered under sec14 tion 6 of this title, or a securities association 

15 registered under section 15A of this title, unless 

16 the Commission has exempted such government 

17 securities broker or government securities deal18 er, by rule or order, from such membership.’’; 

19 (7) in section 17(b)(1)(B) (15 U.S.C. 

20 78q(b)(1)(B)), by striking ‘‘15A(k) gives’’ and in21 serting ‘‘15A(k), give’’; and 

22 (8) in section 21C(c)(2) (15 U.S.C. 78u– 

23 3(c)(2)), by striking ‘‘paragraph (1) subsection’’ and 

24 inserting ‘‘Paragraph (1)’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1136 

•S 3217 AMDT 3739 

1 (c) TRUST INDENTURE ACT OF 1939.—The Trust 

2 Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) is 

3 amended— 

4 (1) in section 304(b) (15 U.S.C. 77ddd(b)), by 

5 striking ‘‘section 2 of such Act’’ and inserting ‘‘sec6 tion 2(a) of such Act’’; and 

7 (2) in section 317(a)(1) (15 U.S.C. 

8 77qqq(a)(1)), by striking ‘‘, in the’’ and inserting 

9 ‘‘in the’’. 

10 (d) INVESTMENT COMPANY ACT OF 1940.—The In11 vestment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) 

12 is amended— 

13 (1) in section 2(a)(19) (15 U.S.C. 80a– 

14 2(a)(19)), in the matter following subparagraph 

15 (B)(vii)— 

16 (A) by striking ‘‘clause (vi)’’ each place 

17 that term appears and inserting ‘‘clause (vii)’’; 

18 and 

19 (B) in each of subparagraphs (A)(vi) and 

20 (B)(vi), by adding ‘‘and’’ at the end of sub21 clause (III); 

22 (2) in section 9(b)(4)(B) (15 U.S.C. 80a– 

23 9(b)(4)(B)), by adding ‘‘or’’ after the semicolon at 

24 the end; 


sroberts on DSKH9S0YB1PROD with BILLS
1137 

•S 3217 AMDT 3739 

1 (3) in section 12(d)(1)(J) (15 U.S.C. 80a– 

2 12(d)(1)(J)), by striking ‘‘any provision of this sub3 section’’ and inserting ‘‘any provision of this para4 graph’’; 

5 (4) in section 17(f) (15 U.S.C. 80a–17(f))— 

6 (A) in paragraph (4), by striking ‘‘No such 

7 member’’ and inserting ‘‘No member of a na8 tional securities exchange’’; and 

9 (B) in paragraph (6), by striking ‘‘com10 pany may serve’’ and inserting ‘‘company, may 

11 serve’’; and 

12 (5) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a– 

13 60(a)(3)(B)(iii))— 

14 (A) by striking ‘‘paragraph (1) of section 

15 205’’ and inserting ‘‘section 205(a)(1)’’; and 

16 (B) by striking ‘‘clause (A) or (B) of that 

17 section’’ and inserting ‘‘paragraph (1) or (2) of 

18 section 205(b)’’. 

19 (e) INVESTMENT ADVISERS ACT OF 1940.—The In20 vestment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.) 

21 is amended— 

22 (1) in section 203 (15 U.S.C. 80b–3)— 

23 (A) in subsection (c)(1)(A), by striking 

24 ‘‘principal business office and’’ and inserting 


sroberts on DSKH9S0YB1PROD with BILLS
1138 

•S 3217 AMDT 3739 

1 ‘‘principal office, principal place of business, 

2 and’’; and 

3 (B) in subsection (k)(4)(B), in the matter 

4 following clause (ii), by striking ‘‘principal place 

5 of business’’ and inserting ‘‘principal office or 

6 place of business’’; 

7 (2) in section 206(3) (15 U.S.C. 80b–6(3)), by 

8 adding ‘‘or’’ after the semicolon at the end; 

9 (3) in section 213(a) (15 U.S.C. 80b–13(a)), by 

10 striking ‘‘principal place of business’’ and inserting 

11 ‘‘principal office or place of business’’; and 

12 (4) in section 222 (15 U.S.C. 80b–18a), by 

13 striking ‘‘principal place of business’’ each place that 

14 term appears and inserting ‘‘principal office and 

15 place of business’’. 

16 SEC. 986. CONFORMING AMENDMENTS RELATING TO RE17 PEAL OF THE PUBLIC UTILITY HOLDING 

18 COMPANY ACT OF 1935. 

19 (a) SECURITIES EXCHANGE ACT OF 1934.—The Se20 curities Exchange Act of 1934 (15 U.S.C. 78 et seq.) is 

21 amended— 

22 (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), 

23 by striking ‘‘the Public Utility Holding Company 

24 Act of 1935 (15 U.S.C. 79a et seq.),’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1139 

•S 3217 AMDT 3739 

1 (2) in section 12(k) (15 U.S.C. 78l(k)), by 

2 amending paragraph (7) to read as follows:

3 ‘‘(7) DEFINITION.—For purposes of this sub4 section, the term ‘emergency’ means— 

5 ‘‘(A) a major market disturbance charac6 terized by or constituting— 

7 ‘‘(i) sudden and excessive fluctuations 

8 of securities prices generally, or a substan9 tial threat thereof, that threaten fair and 

10 orderly markets; or 

11 ‘‘(ii) a substantial disruption of the 

12 safe or efficient operation of the national 

13 system for clearance and settlement of 

14 transactions in securities, or a substantial 

15 threat thereof; or 

16 ‘‘(B) a major disturbance that substan17 tially disrupts, or threatens to substantially dis18 rupt— 

19 ‘‘(i) the functioning of securities mar20 kets, investment companies, or any other 

21 significant portion or segment of the secu22 rities markets; or 

23 ‘‘(ii) the transmission or processing of 

24 securities transactions.’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1140 

•S 3217 AMDT 3739 

1 (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), 

2 by striking ‘‘section 18(c) of the Public Utility Hold3 ing Company Act of 1935,’’. 

4 (b) TRUST INDENTURE ACT OF 1939.—The Trust 

5 Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) is 

6 amended— 

7 (1) in section 303 (15 U.S.C. 77ccc), by strik8 ing paragraph (17) and inserting the following: 

9 ‘‘(17) The terms ‘Securities Act of 1933’ and 

10 ‘Securities Exchange Act of 1934’ shall be deemed 

11 to refer, respectively, to such Acts, as amended, 

12 whether amended prior to or after the enactment of 

13 this title.’’; 

14 (2) in section 308 (15 U.S.C. 77hhh), by strik15 ing ‘‘Securities Act of 1933, the Securities Exchange 

16 Act of 1934, or the Public Utility Holding Company 

17 Act of 1935’’ each place that term appears and in18 serting ‘‘Securities Act of 1933 or the Securities Ex19 change Act of 1934’’; 

20 (3) in section 310 (15 U.S.C. 77jjj), by striking 

21 subsection (c); 

22 (4) in section 311 (15 U.S.C. 77kkk), by strik23 ing subsection (c); 

24 (5) in section 323(b) (15 U.S.C. 77www(b)), by 

25 striking ‘‘Securities Act of 1933, or the Securities 


sroberts on DSKH9S0YB1PROD with BILLS
1141 

•S 3217 AMDT 3739 

1 Exchange Act of 1934, or the Public Utility Holding 

2 Company Act of 1935’’ and inserting ‘‘Securities Act 

3 of 1933 or the Securities Exchange Act of 1934’’; 

4 and 

5 (6) in section 326 (15 U.S.C. 77zzz), by strik6 ing ‘‘Securities Act of 1933, or the Securities Ex7 change Act of 1934, or the Public Utility Holding 

8 Company Act of 1935,’’ and inserting ‘‘Securities 

9 Act of 1933 or the Securities Exchange Act of 

10 1934’’. 

11 (c) INVESTMENT COMPANY ACT OF 1940.—The In12 vestment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) 

13 is amended— 

14 (1) in section 2(a)(44) (15 U.S.C. 80a– 

15 2(a)(44)), by striking ‘‘ ‘Public Utility Holding Com16 pany Act of 1935’,’’; 

17 (2) in section 3(c) (15 U.S.C. 80a–3(c)), by 

18 striking paragraph (8) and inserting the following: 

19 ‘‘(8) [Repealed]’’; 

20 (3) in section 38(b) (15 U.S.C. 80a–37(b)), by 

21 striking ‘‘the Public Utility Holding Company Act of 

22 1935,’’; and 

23 (4) in section 50 (15 U.S.C. 80a–49), by strik24 ing ‘‘the Public Utility Holding Company Act of 

25 1935,’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1142 

•S 3217 AMDT 3739 

1 (d) INVESTMENT ADVISERS ACT OF 1940.—Section 

2 202(a)(21) of the Investment Advisers Act of 1940 (15 

3 U.S.C. 80b–2(a)(21)) is amended by striking ‘‘ ‘Public 

4 Utility Holding Company Act of 1935’,’’. 

5 SEC. 987. AMENDMENT TO DEFINITION OF MATERIAL LOSS 

6 AND NONMATERIAL LOSSES TO THE DEPOSIT 

7 INSURANCE FUND FOR PURPOSES OF IN8 SPECTOR GENERAL REVIEWS. 

9 (a) IN GENERAL.—Section 38(k) of the Federal De10 posit Insurance Act (U.S.C. 1831o(k)) is amended— 

11 (1) in paragraph (2), by striking subparagraph 

12 (B) and inserting the following: 

13 ‘‘(B) MATERIAL LOSS DEFINED.—The 

14 term ‘material loss’ means any estimated loss in 

15 excess of— 

16 ‘‘(i) $100,000,000, if the loss occurs 

17 during the period beginning on September 

18 30, 2009, and ending on December 31, 

19 2010; 

20 ‘‘(ii) $75,000,000, if the loss occurs 

21 during the period beginning on January 1, 

22 2011, and ending on December 31, 2011; 

23 and 

24 ‘‘(iii) $50,000,000, if the loss occurs 

25 on or after January 1, 2012.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1143 

•S 3217 AMDT 3739 

1 (2) in paragraph (4)(A) by striking ‘‘the re2 port’’ and inserting ‘‘any report on losses required 

3 under this subsection,’’; 

4 (3) by striking paragraph (6); 

5 (4) by redesignating paragraph (5) as para6 graph (6); and 

7 (5) by inserting after paragraph (4) the fol8 lowing: 

9 ‘‘(5) LOSSES THAT ARE NOT MATERIAL.— 

10 ‘‘(A) SEMIANNUAL REPORT.—For the 6- 

11 month period ending on March 31, 2010, and 

12 each 6-month period thereafter, the Inspector 

13 General of each Federal banking agency shall— 

14 ‘‘(i) identify losses that the Inspector 

15 General estimates have been incurred by 

16 the Deposit Insurance Fund during that 6- 

17 month period, with respect to the insured 

18 depository institutions supervised by the 

19 Federal banking agency; 

20 ‘‘(ii) for each loss incurred by the De21 posit Insurance Fund that is not a mate22 rial loss, determine— 

23 ‘‘(I) the grounds identified by the 

24 Federal banking agency or State bank 

25 supervisor for appointing the CorporaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01143 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1144 

•S 3217 AMDT 3739 

1 tion as receiver under section 

2 11(c)(5); and 

3 ‘‘(II) whether any unusual cir4 cumstances exist that might warrant 

5 an in-depth review of the loss; and 

6 ‘‘(iii) prepare and submit a written re7 port to the appropriate Federal banking 

8 agency and to Congress on the results of 

9 any determination by the Inspector Gen10 eral, including— 

11 ‘‘(I) an identification of any loss 

12 that warrants an in-depth review, to13 gether with the reasons why such re14 view is warranted, or, if the Inspector 

15 General determines that no review is 

16 warranted, an explanation of such de17 termination; and 

18 ‘‘(II) for each loss identified 

19 under subclause (I) that warrants an 

20 in-depth review, the date by which 

21 such review, and a report on such re22 view prepared in a manner consistent 

23 with reports under paragraph (1)(A), 

24 will be completed and submitted to 


sroberts on DSKH9S0YB1PROD with BILLS
1145 

•S 3217 AMDT 3739 

1 the Federal banking agency and Con2 gress. 

3 ‘‘(B) DEADLINE FOR SEMIANNUAL RE4 PORT.—The Inspector General of each Federal 

5 banking agency shall— 

6 ‘‘(i) submit each report required 

7 under paragraph (A) expeditiously, and not 

8 later than 90 days after the end of the 6- 

9 month period covered by the report; and 

10 ‘‘(ii) provide a copy of the report re11 quired under paragraph (A) to any Mem12 ber of Congress, upon request.’’. 

13 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

14 The heading for subsection (k) of section 38 of the Fed15 eral Deposit Insurance Act (U.S.C. 1831o(k)) is amended 

16 to read as follows: 

17 ‘‘(k) REVIEWS REQUIRED WHEN DEPOSIT INSUR18 ANCE FUND INCURS LOSSES.—’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1146 

•S 3217 AMDT 3739 

1 SEC. 988. AMENDMENT TO DEFINITION OF MATERIAL LOSS 

2 AND NONMATERIAL LOSSES TO THE NA3 TIONAL CREDIT UNION SHARE INSURANCE 

4 FUND FOR PURPOSES OF INSPECTOR GEN5 ERAL REVIEWS. 

6 (a) IN GENERAL.—Section 216(j) of the Federal 

7 Credit Union Act (12 U.S.C. 1790d(j)) is amended to read 

8 as follows: 

9 ‘‘(j) REVIEWS REQUIRED WHEN SHARE INSURANCE

10 FUND EXPERIENCES LOSSES.— 

11 ‘‘(1) IN GENERAL.—If the Fund incurs a mate12 rial loss with respect to an insured credit union, the 

13 Inspector General of the Board shall— 

14 ‘‘(A) submit to the Board a written report 

15 reviewing the supervision of the credit union by 

16 the Administration (including the implementa17 tion of this section by the Administration), 

18 which shall include— 

19 ‘‘(i) a description of the reasons why 

20 the problems of the credit union resulted 

21 in a material loss to the Fund; and 

22 ‘‘(ii) recommendations for preventing 

23 any such loss in the future; and 

24 ‘‘(B) submit a copy of the report under 

25 subparagraph (A) to— 


sroberts on DSKH9S0YB1PROD with BILLS
1147 

•S 3217 AMDT 3739 

1 ‘‘(i) the Comptroller General of the 

2 United States; 

3 ‘‘(ii) the Corporation; 

4 ‘‘(iii) in the case of a report relating 

5 to a State credit union, the appropriate 

6 State supervisor; and 

7 ‘‘(iv) to any Member of Congress, 

8 upon request. 

9 ‘‘(2) MATERIAL LOSS DEFINED.—For purposes 

10 of determining whether the Fund has incurred a ma11 terial loss with respect to an insured credit union, a 

12 loss is material if it exceeds the sum of— 

13 ‘‘(A) $25,000,000; and 

14 ‘‘(B) an amount equal to 10 percent of the 

15 total assets of the credit union on the date on 

16 which the Board initiated assistance under sec17 tion 208 or was appointed liquidating agent. 

18 ‘‘(3) PUBLIC DISCLOSURE REQUIRED.— 

19 ‘‘(A) IN GENERAL.—The Board shall dis20 close a report under this subsection, upon re21 quest under section 552 of title 5, United 

22 States Code, without excising— 

23 ‘‘(i) any portion under section 

24 552(b)(5) of title 5, United States Code; or 


sroberts on DSKH9S0YB1PROD with BILLS
1148 

•S 3217 AMDT 3739 

1 ‘‘(ii) any information about the in2 sured credit union (other than trade se3 crets) under section 552(b)(8) of title 5, 

4 United States Code. 

5 ‘‘(B) RULE OF CONSTRUCTION.—Subpara6 graph (A) may not be construed as requiring 

7 the agency to disclose the name of any cus8 tomer of the insured credit union (other than 

9 an institution-affiliated party), or information 

10 from which the identity of such customer could 

11 reasonably be ascertained. 

12 ‘‘(4) LOSSES THAT ARE NOT MATERIAL.— 

13 ‘‘(A) SEMIANNUAL REPORT.—For the 6- 

14 month period ending on March 31, 2010, and 

15 each 6-month period thereafter, the Inspector 

16 General of the Board shall— 

17 ‘‘(i) identify any losses that the In18 spector General estimates were incurred by 

19 the Fund during such 6-month period, 

20 with respect to insured credit unions; 

21 ‘‘(ii) for each loss to the Fund that is 

22 not a material loss, determine— 

23 ‘‘(I) the grounds identified by the 

24 Board or the State official having ju25 risdiction over a State credit union for 


sroberts on DSKH9S0YB1PROD with BILLS
1149 

•S 3217 AMDT 3739 

1 appointing the Board as the liqui2 dating agent for any Federal or State 

3 credit union; and 

4 ‘‘(II) whether any unusual cir5 cumstances exist that might warrant 

6 an in-depth review of the loss; and 

7 ‘‘(iii) prepare and submit a written re8 port to the Board and to Congress on the 

9 results of the determinations of the Inspec10 tor General that includes— 

11 ‘‘(I) an identification of any loss 

12 that warrants an in-depth review, and 

13 the reasons such review is warranted, 

14 or if the Inspector General determines 

15 that no review is warranted, an expla16 nation of such determination; and 

17 ‘‘(II) for each loss identified in 

18 subclause (I) that warrants an in19 depth review, the date by which such 

20 review, and a report on the review 

21 prepared in a manner consistent with 

22 reports under paragraph (1)(A), will 

23 be completed. 


sroberts on DSKH9S0YB1PROD with BILLS
1150 

•S 3217 AMDT 3739 

1 ‘‘(B) DEADLINE FOR SEMIANNUAL RE2 PORT.—The Inspector General of the Board 

3 shall— 

4 ‘‘(i) submit each report required 

5 under subparagraph (A) expeditiously, and 

6 not later than 90 days after the end of the 

7 6-month period covered by the report; and 

8 ‘‘(ii) provide a copy of the report re9 quired under subparagraph (A) to any 

10 Member of Congress, upon request. 

11 ‘‘(5) GAO REVIEW.—The Comptroller General 

12 of the United States shall, under such conditions as 

13 the Comptroller General determines to be appro14 priate— 

15 ‘‘(A) review each report made under para16 graph (1), including the extent to which the In17 spector General of the Board complied with the 

18 requirements under section 8L of the Inspector 

19 General Act of 1978 (5 U.S.C. App.) with re20 spect to each such report; and 

21 ‘‘(B) recommend improvements to the su22 pervision of insured credit unions (including im23 provements relating to the implementation of 

24 this section).’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1151 

•S 3217 AMDT 3739 

1 SEC. 989. GOVERNMENT ACCOUNTABILITY OFFICE STUDY 

2 ON PROPRIETARY TRADING. 

3 (a) DEFINITIONS.—In this section— 

4 (1) the term ‘‘covered entity’’ means— 

5 (A) an insured depository institution, an 

6 affiliate of an insured depository institution, a 

7 bank holding company, a financial holding com8 pany, or a subsidiary of a bank holding com9 pany or a financial holding company, as those 

10 terms are defined in the Bank Holding Com11 pany Act of 1956 (12 U.S.C. 1841 et seq.); and 

12 (B) any other entity, as the Comptroller 

13 General of the United States may determine; 

14 and 

15 (2) the term ‘‘proprietary trading’’ means the 

16 act of a covered entity investing as a principal in se17 curities, commodities, derivatives, hedge funds, pri18 vate equity firms, or such other financial products or 

19 entities as the Comptroller General may determine. 

20 (b) STUDY.— 

21 (1) IN GENERAL.—The Comptroller General of 

22 the United States shall conduct a study regarding 

23 the risks and conflicts associated with proprietary 

24 trading by and within covered entities, including an 

25 evaluation of— 


sroberts on DSKH9S0YB1PROD with BILLS
1152 

•S 3217 AMDT 3739 

1 (A) whether proprietary trading presents a 

2 material systemic risk to the stability of the 

3 United States financial system, and if so, the 

4 costs and benefits of options for mitigating such 

5 systemic risk; 

6 (B) whether proprietary trading presents 

7 material risks to the safety and soundness of 

8 the covered entities that engage in such activi9 ties, and if so, the costs and benefits of options 

10 for mitigating such risks; 

11 (C) whether proprietary trading presents 

12 material conflicts of interest between covered 

13 entities that engage in proprietary trading and 

14 the clients of the institutions who use the firm 

15 to execute trades or who rely on the firm to 

16 manage assets, and if so, the costs and benefits 

17 of options for mitigating such conflicts of inter18 est; 

19 (D) whether adequate disclosure regarding 

20 the risks and conflicts of proprietary trading is 

21 provided to the depositors, trading and asset 

22 management clients, and investors of covered 

23 entities that engage in proprietary trading, and 

24 if not, the costs and benefits of options for the 

25 improvement of such disclosure; and 


sroberts on DSKH9S0YB1PROD with BILLS
1153 

•S 3217 AMDT 3739 

1 (E) whether the banking, securities, and 

2 commodities regulators of institutions that en3 gage in proprietary trading have in place ade4 quate systems and controls to monitor and con5 tain any risks and conflicts of interest related 

6 to proprietary trading, and if not, the costs and 

7 benefits of options for the improvement of such 

8 systems and controls. 

9 (2) CONSIDERATIONS.—In carrying out the 

10 study required under paragraph (1), the Comptroller 

11 General shall consider— 

12 (A) current practice relating to proprietary 

13 trading; 

14 (B) the advisability of a complete ban on 

15 proprietary trading; 

16 (C) limitations on the scope of activities 

17 that covered entities may engage in with respect 

18 to proprietary trading; 

19 (D) the advisability of additional capital 

20 requirements for covered entities that engage in 

21 proprietary trading; 

22 (E) enhanced restrictions on transactions 

23 between affiliates related to proprietary trading; 

24 (F) enhanced accounting disclosures relat25 ing to proprietary trading; 


sroberts on DSKH9S0YB1PROD with BILLS
1154 

•S 3217 AMDT 3739 

1 (G) enhanced public disclosure relating to 

2 proprietary trading; and 

3 (H) any other options the Comptroller 

4 General deems appropriate. 

5 (c) REPORT TO CONGRESS.—Not later than 15 

6 months after the date of enactment of this Act, the Comp7 troller General shall submit a report to Congress on the 

8 results of the study conducted under subsection (b). 

9 (d) ACCESS BY COMPTROLLER GENERAL.—For pur10 poses of conducting the study required under subsection 

11 (b), the Comptroller General shall have access, upon re12 quest, to any information, data, schedules, books, ac13 counts, financial records, reports, files, electronic commu14 nications, or other papers, things, or property belonging 

15 to or in use by a covered entity that engages in proprietary 

16 trading, and to the officers, directors, employees, inde17 pendent public accountants, financial advisors, staff, and 

18 agents and representatives of a covered entity (as related 

19 to the activities of the agent or representative on behalf 

20 of the covered entity), at such reasonable times as the 

21 Comptroller General may request. The Comptroller Gen22 eral may make and retain copies of books, records, ac23 counts, and other records, as the Comptroller General 

24 deems appropriate. 

25 (e) CONFIDENTIALITY OF REPORTS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1155 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—Except as provided in para2 graph (2), the Comptroller General may not disclose 

3 information regarding— 

4 (A) any proprietary trading activity of a 

5 covered entity, unless such information is dis6 closed at a level of generality that does not re7 veal the investment or trading position or strat8 egy of the covered entity for any specific secu9 rity, commodity, derivative, or other investment 

10 or financial product; or 

11 (B) any individual interviewed by the 

12 Comptroller General for purposes of the study 

13 under subsection (b), unless such information is 

14 disclosed at a level of generality that does not 

15 reveal— 

16 (i) the name of or identifying details 

17 relating to such individual; or 

18 (ii) in the case of an individual who is 

19 an employee of a third party that provides 

20 professional services to a covered entity be21 lieved to be engaged in proprietary trading, 

22 the name of or any identifying details re23 lating to such third party. 


sroberts on DSKH9S0YB1PROD with BILLS
1156 

•S 3217 AMDT 3739 

1 (2) EXCEPTIONS.—The Comptroller General 

2 may disclose the information described in paragraph 

3 (1)— 

4 (A) to a department, agency, or official of 

5 the Federal Government, for official use, upon 

6 request; 

7 (B) to a committee of Congress, upon re8 quest; and 

9 (C) to a court, upon an order of such 

10 court. 

11 SEC. 989A. SENIOR INVESTOR PROTECTIONS. 

12 (a) DEFINITIONS.—As used in this section— 

13 (1) the term ‘‘eligible entity’’ means— 

14 (A) a securities commission (or any agency 

15 or office performing like functions) of a State 

16 that the Office determines has adopted rules on 

17 the appropriate use of designations in the offer 

18 or sale of securities or investment advice that 

19 meet or exceed the minimum requirements of 

20 the NASAA Model Rule on the Use of Senior21 Specific Certifications and Professional Des22 ignations (or any successor thereto); 

23 (B) the insurance commission (or any 

24 agency or office performing like functions) of 

25 any State that the Office determines has— 


sroberts on DSKH9S0YB1PROD with BILLS
1157 

•S 3217 AMDT 3739 

1 (i) adopted rules on the appropriate 

2 use of designations in the sale of insurance 

3 products that, to the extent practicable, 

4 conform to the minimum requirements of 

5 the National Association of Insurance 

6 Commissioners Model Regulation on the 

7 Use of Senior-Specific Certifications and 

8 Professional Designations in the Sale of 

9 Life Insurance and Annuities (or any suc10 cessor thereto); and 

11 (ii) adopted rules with respect to fidu12 ciary or suitability requirements in the sale 

13 of annuities that meet or exceed the min14 imum requirements established by the 

15 Suitability in Annuity Transactions Model 

16 Regulation of the National Association of 

17 Insurance Commissioners (or any successor 

18 thereto); or 

19 (C) a consumer protection agency of any 

20 State, if— 

21 (i) the securities commission (or any 

22 agency or office performing like functions) 

23 of the State is eligible under subparagraph 

24 (A); or 


sroberts on DSKH9S0YB1PROD with BILLS
1158 

•S 3217 AMDT 3739 

1 (ii) the insurance commission (or any 

2 agency or office performing like functions) 

3 of the State is eligible under subparagraph 

4 (B); 

5 (2) the term ‘‘financial product’’ means a secu6 rity, an insurance product (including an insurance 

7 product that pays a return, whether fixed or vari8 able), a bank product, and a loan product; 

9 (3) the term ‘‘misleading designation’’— 

10 (A) means a certification, professional des11 ignation, or other purported credential that in12 dicates or implies that a salesperson or adviser 

13 has special certification or training in advising 

14 or servicing seniors; and 

15 (B) does not include a certification, profes16 sional designation, license, or other credential 

17 that— 

18 (i) was issued by or obtained from an 

19 academic institution having regional ac20 creditation; 

21 (ii) meets the standards for certifi22 cations, licenses, and professional designa23 tions outlined by the NASAA Model Rule 

24 on the Use of Senior-Specific Certifications 

25 and Professional Designations in the Sale 


sroberts on DSKH9S0YB1PROD with BILLS
1159 

•S 3217 AMDT 3739 

1 of Life Insurance and Annuities, adopted 

2 by the National Association of Insurance 

3 Commissioners (or any successor thereto); 

4 or 

5 (iii) was issued by or obtained from a 

6 State; 

7 (4) the term ‘‘misleading or fraudulent mar8 keting’’ means the use of a misleading designation 

9 by a person that sells to or advises a senior in con10 nection with the sale of a financial product; 

11 (5) the term ‘‘NASAA’’ means the North Amer12 ican Securities Administrators Association; 

13 (6) the term ‘‘Office’’ means the Office of Fi14 nancial Literacy of the Bureau; and 

15 (7) the term ‘‘senior’’ means any individual who 

16 has attained the age of 62 years or older. 

17 (b) GRANTS TO STATES FOR ENHANCED PROTEC18 TION OF SENIORS FROM BEING MISLED BY FALSE DES19 IGNATIONS.—The Office shall establish a program under 

20 which the Office may make grants to States or eligible 

21 entities— 

22 (1) to hire staff to identify, investigate, and 

23 prosecute (through civil, administrative, or criminal 

24 enforcement actions) cases involving misleading or 

25 fraudulent marketing; 


sroberts on DSKH9S0YB1PROD with BILLS
1160 

•S 3217 AMDT 3739 

1 (2) to fund technology, equipment, and training 

2 for regulators, prosecutors, and law enforcement of3 ficers, in order to identify salespersons and advisers 

4 who target seniors through the use of misleading 

5 designations; 

6 (3) to fund technology, equipment, and training 

7 for prosecutors to increase the successful prosecution 

8 of salespersons and advisers who target seniors with 

9 the use of misleading designations; 

10 (4) to provide educational materials and train11 ing to regulators on the appropriateness of the use 

12 of designations by salespersons and advisers in con13 nection with the sale and marketing of financial 

14 products; 

15 (5) to provide educational materials and train16 ing to seniors to increase awareness and under17 standing of misleading or fraudulent marketing; 

18 (6) to develop comprehensive plans to combat 

19 misleading or fraudulent marketing of financial 

20 products to seniors; and 

21 (7) to enhance provisions of State law to pro22 vide protection for seniors against misleading or 

23 fraudulent marketing. 

24 (c) APPLICATIONS.—A State or eligible entity desir25 ing a grant under this section shall submit an application 


sroberts on DSKH9S0YB1PROD with BILLS
1161 

•S 3217 AMDT 3739 

1 to the Office, in such form and in such a manner as the 

2 Office may determine, that includes— 

3 (1) a proposal for activities to protect seniors 

4 from misleading or fraudulent marketing that are 

5 proposed to be funded using a grant under this sec6 tion, including— 

7 (A) an identification of the scope of the 

8 problem of misleading or fraudulent marketing 

9 in the State; 

10 (B) a description of how the proposed ac11 tivities would— 

12 (i) protect seniors from misleading or 

13 fraudulent marketing in the sale of finan14 cial products, including by proactively iden15 tifying victims of misleading and fraudu16 lent marketing who are seniors; 

17 (ii) assist in the investigation and 

18 prosecution of those using misleading or 

19 fraudulent marketing; and 

20 (iii) discourage and reduce cases of 

21 misleading or fraudulent marketing; and 

22 (C) a description of how the proposed ac23 tivities would be coordinated with other State 

24 efforts; and 


sroberts on DSKH9S0YB1PROD with BILLS
1162 

•S 3217 AMDT 3739 

1 (2) any other information, as the Office deter2 mines is appropriate. 

3 (d) PERFORMANCE OBJECTIVES AND REPORTING

4 REQUIREMENTS.—The Office may establish such perform5 ance objectives and reporting requirements for States and 

6 eligible entities receiving a grant under this section as the 

7 Office determines are necessary to carry out and assess 

8 the effectiveness of the program under this section. 

9 (e) MAXIMUM AMOUNT.—The amount of a grant 

10 under this section may not exceed— 

11 (1) $500,000 for each of 3 consecutive fiscal 

12 years, if the recipient is a State, or an eligible entity 

13 of a State, that has adopted rules— 

14 (A) on the appropriate use of designations 

15 in the offer or sale of securities or investment 

16 advice that meet or exceed the minimum re17 quirements of the NASAA Model Rule on the 

18 Use of Senior-Specific Certifications and Pro19 fessional Designations (or any successor there20 to); 

21 (B) on the appropriate use of designations 

22 in the sale of insurance products that, to the 

23 extent practicable, conform to the minimum re24 quirements of the National Association of In25 surance Commissioners Model Regulation on 


sroberts on DSKH9S0YB1PROD with BILLS
1163 

•S 3217 AMDT 3739 

1 the Use of Senior-Specific Certifications and 

2 Professional Designations in the Sale of Life 

3 Insurance and Annuities (or any successor 

4 thereto); and 

5 (C) with respect to fiduciary or suitability 

6 requirements in the sale of annuities that meet 

7 or exceed the minimum requirements estab8 lished by the Suitability in Annuity Trans9 actions Model Regulation of the National Asso10 ciation of Insurance Commissioners (or any 

11 successor thereto); and 

12 (2) $100,000 for each of 3 consecutive fiscal 

13 years, if the recipient is a State, or an eligible entity 

14 of a State, that has adopted— 

15 (A) rules on the appropriate use of des16 ignations in the offer or sale of securities or in17 vestment advice that meet or exceed the min18 imum requirements of the NASAA Model Rule 

19 on the Use of Senior-Specific Certifications and 

20 Professional Designations (or any successor 

21 thereto); or 

22 (B) rules— 

23 (i) on the appropriate use of designa24 tions in the sale of insurance products 

25 that, to the extent practicable, conform to 


sroberts on DSKH9S0YB1PROD with BILLS
1164 

•S 3217 AMDT 3739 

1 the minimum requirements of the National 

2 Association of Insurance Commissioners 

3 Model Regulation on the Use of Senior4 Specific Certifications and Professional 

5 Designations in the Sale of Life Insurance 

6 and Annuities (or any successor thereto); 

7 and 

8 (ii) with respect to fiduciary or suit9 ability requirements in the sale of annu10 ities that meet or exceed the minimum re11 quirements established by the Suitability in 

12 Annuity Transactions Model Regulation of 

13 the National Association of Insurance 

14 Commissioners (or any successor thereto). 

15 (f) SUBGRANTS.—A State or eligible entity that re16 ceives a grant under this section may make a subgrant, 

17 as the State or eligible entity determines is necessary to 

18 carry out the activities funded using a grant under this 

19 section. 

20 (g) REAPPLICATION.—A State or eligible entity that 

21 receives a grant under this section may reapply for a grant 

22 under this section, notwithstanding the limitations on 

23 grant amounts under subsection (e). 


sroberts on DSKH9S0YB1PROD with BILLS
1165 

•S 3217 AMDT 3739 

1 (h) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated to carry out this section, 

3 $8,000,000 for each of fiscal years 2011 through 2015. 

4 SEC. 989B. CHANGES IN APPOINTMENT OF CERTAIN IN5 SPECTORS GENERAL. 

6 (a) ELEVATION OF CERTAIN INSPECTORS GENERAL

7 TO APPOINTMENT PURSUANT TO SECTION 3 OF THE IN8 SPECTOR GENERAL ACT OF 1978.— 

9 (1) INCLUSION IN CERTAIN DEFINITIONS.—Sec10 tion 12 of the Inspector General Act of 1978 (5 

11 U.S.C. App.) is amended— 

12 (A) in paragraph (1), by striking ‘‘or the 

13 Federal Cochairpersons of the Commissions es14 tablished under section 15301 of title 40, 

15 United States Code;’’ and inserting ‘‘the Fed16 eral Cochairpersons of the Commissions estab17 lished under section 15301 of title 40, United 

18 States Code; the Chairman of the Board of 

19 Governors of the Federal Reserve System; the 

20 Chairman of the Commodity Futures Trading 

21 Commission; the Chairman of the National 

22 Credit Union Administration; the Chairman of 

23 the Board of Directors of the Pension Benefit 

24 Guaranty Corporation; the Chairman of the Se25 curities and Exchange Commission; or the DiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01165 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1166 

•S 3217 AMDT 3739 

1 rector of the Bureau of Consumer Financial 

2 Protection;’’; and 

3 (B) in paragraph (2), by striking ‘‘or the 

4 Commissions established under section 15301 

5 of title 40, United States Code,’’ and inserting 

6 ‘‘the Commissions established under section 

7 15301 of title 40, United States Code, the 

8 Board of Governors of the Federal Reserve Sys9 tem, the Commodity Futures Trading Commis10 sion, the National Credit Union Administration, 

11 the Pension Benefit Guaranty Corporation, the 

12 Securities and Exchange Commission, or the 

13 Director of the Bureau of Consumer Financial 

14 Protection,’’. 

15 (2) EXCLUSION FROM DEFINITION OF DES16 IGNATED FEDERAL ENTITY.—Section 8G(a)(2) of 

17 the Inspector General Act of 1978 (5 U.S.C. App.) 

18 is amended— 

19 (A) by striking ‘‘the Board of Governors of 

20 the Federal Reserve System,’’; 

21 (B) by striking ‘‘the Commodity Futures 

22 Trading Commission,’’; 

23 (C) by striking ‘‘the National Credit Union 

24 Administration,’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1167 

•S 3217 AMDT 3739 

1 (D) by striking ‘‘the Pension Benefit 

2 Guaranty Corporation, the Securities and Ex3 change Commission,’’. 

4 (b) CONTINUATION OF PROVISIONS RELATING TO

5 PERSONNEL.— 

6 (1) IN GENERAL.—The Inspector General Act 

7 of 1978 (5 U.S.C. App.) is amended by inserting 

8 after section 8L the following: 

9 ‘‘SEC. 8M. SPECIAL PROVISIONS CONCERNING CERTAIN ES10 TABLISHMENTS. 

11 ‘‘(a) DEFINITION.—For purposes of this section, the 

12 term ‘covered establishment’ means the Board of Gov13 ernors of the Federal Reserve System, the Commodity Fu14 tures Trading Commission, the National Credit Union Ad15 ministration, the Pension Benefit Guaranty Corporation, 

16 and the Securities and Exchange Commission. 

17 ‘‘(b) PROVISIONS RELATING TO ALL COVERED ES18 TABLISHMENTS.— 

19 ‘‘(1) PROVISIONS RELATING TO INSPECTORS

20 GENERAL.—In the case of the Inspector General of 

21 a covered establishment, subsections (b) and (c) of 

22 section 4 of the Inspector General Reform Act of 

23 2008 (Public Law 110–409; 122 Stat. 4304) shall 

24 apply in the same manner as if such covered estab25 lishment were a designated Federal entity under secVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01167 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1168 

•S 3217 AMDT 3739 

1 tion 8G of this Act. An Inspector General who is 

2 subject to the preceding sentence shall not be sub3 ject to section 3(e) of this Act. 

4 ‘‘(2) PROVISIONS RELATING TO OTHER PER5 SONNEL.—Notwithstanding paragraphs (7) and (8) 

6 of section 6(a), the Inspector General of a covered 

7 establishment may select, appoint, and employ such 

8 officers and employees as may be necessary for car9 rying out the functions, powers, and duties of the 

10 Office of Inspector General of the covered establish11 ment and to obtain the temporary or intermittent 

12 services of experts or consultants or an organization 

13 of experts or consultants, subject to the applicable 

14 laws and regulations that govern such selections, ap15 pointments, and employment, and the obtaining of 

16 such services, within the covered establishment. 

17 ‘‘(c) PROVISION RELATING TO THE BOARD OF GOV18 ERNORS OF THE FEDERAL RESERVE SYSTEM.—The pro19 visions of subsection (a) of section 8D (other than the pro20 visions of subparagraphs (A), (B), (C), and (E) of para21 graph (1) of such subsection (a)) shall apply to the Inspec22 tor General of the Board of Governors of the Federal Re23 serve System and the Chairman of the Board of Governors 

24 of the Federal Reserve System in the same manner as 

25 such provisions apply to the Inspector General of the DeVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01168 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1169 

•S 3217 AMDT 3739 

1 partment of the Treasury and the Secretary of the Treas2 ury, respectively.’’. 

3 (2) CONFORMING AMENDMENT.—Paragraph (3) 

4 of section 8G(g) of the Inspector General Act of 

5 1978 (5 U.S.C. App.) is repealed. 

6 (c) CORRECTIVE RESPONSES BY HEADS OF CERTAIN

7 ESTABLISHMENTS TO DEFICIENCIES IDENTIFIED BY IN8 SPECTORS GENERAL.—The Chairman of the Board of 

9 Governors, the Chairman of the Commodity Futures 

10 Trading Commission, the Chairman of the National Credit 

11 Union Administration, the Chairman of the Board of Di12 rectors of the Pension Benefit Guaranty Corporation, and 

13 the Chairman of the Commission shall each— 

14 (1) take action to address deficiencies identified 

15 by a report or investigation of the Inspector General 

16 of the establishment concerned; or 

17 (2) certify to the Senate and the House of Rep18 resentatives that no action is necessary or appro19 priate in connection with a deficiency described in 

20 paragraph (1). 

21 (d) EFFECTIVE DATE; TRANSITION RULE.— 

22 (1) EFFECTIVE DATE.—This section and the 

23 amendments made by this section shall take effect 

24 30 days after the date of enactment of this Act. 


sroberts on DSKH9S0YB1PROD with BILLS
1170 

•S 3217 AMDT 3739 

1 (2) TRANSITION RULE.—An individual serving 

2 as Inspector General of the Board of Governors, the 

3 Commodity Futures Trading Commission, the Na4 tional Credit Union Administration, the Pension 

5 Benefit Guaranty Corporation, or the Commission 

6 on the effective date of this section pursuant to an 

7 appointment made under section 8G of the Inspector 

8 General Act of 1978 (5 U.S.C. App.)— 

9 (A) may continue so serving until the 

10 President makes an appointment under section 

11 3(a) of such Act with respect to the Board of 

12 Governors, the Commodity Futures Trading 

13 Commission, the National Credit Union Admin14 istration, the Pension Benefit Guaranty Cor15 poration, or the Commission, as the case may 

16 be, consistent with the amendments made by 

17 subsection (a); and 

18 (B) shall, while serving under subpara19 graph (A)— 

20 (i) remain subject to the provisions of 

21 section 8G of such Act that applied with 

22 respect to the Inspector General of the 

23 Board of Governors, the Commodity Fu24 tures Trading Commission, the National 

25 Credit Union Administration, the Pension 


sroberts on DSKH9S0YB1PROD with BILLS
1171 

•S 3217 AMDT 3739 

1 Benefit Guaranty Corporation, or the 

2 Commission, as the case may be, on the 

3 day before the effective date of this sec4 tion; and 

5 (ii) suffer no reduction in pay. 

6 Subtitle J—Self-funding of the Se7 curities and Exchange Commis8 sion 

9 SEC. 991. SECURITIES AND EXCHANGE COMMISSION SELF10 FUNDING. 

11 (a) SELF-FUNDING AUTHORITY.—Section 4 of the 

12 Securities Exchange Act of 1934 (15 U.S.C. 78d) is 

13 amended— 

14 (1) in subsection (c), in the second sentence, by 

15 striking ‘‘credited to the appropriated funds of the 

16 Commission’’ and inserting ‘‘deposited in the ac17 count described in subsection (i)(4)’’; 

18 (2) in subsection (f), in the second sentence, by 

19 striking ‘‘considered a reimbursement to the appro20 priated funds of the Commission’’ and inserting ‘‘de21 posited in the account described in subsection 

22 (i)(4)’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(i) FUNDING OF THE COMMISSION.— 


sroberts on DSKH9S0YB1PROD with BILLS
1172 

•S 3217 AMDT 3739 

1 ‘‘(1) BUDGET.—For each fiscal year, the Chair2 man of the Commission shall prepare and submit to 

3 Congress a budget to Congress. Such budget shall be 

4 submitted at the same time the President submits a 

5 budget of the United States to Congress for such 

6 fiscal year. The budget submitted by the Chairman 

7 of the Commission pursuant to this paragraph shall 

8 not be considered a request for appropriations. 

9 ‘‘(2) TREASURY PAYMENT.— 

10 ‘‘(A) On the first day of each fiscal year, 

11 the Treasury shall pay into the account de12 scribed in paragraph (4) an amount equal to 

13 the budget submitted by the Chairman of the 

14 Commission pursuant to paragraph (1) for such 

15 fiscal year. 

16 ‘‘(B) At or prior to the end of each fiscal 

17 year, the Commission shall pay to the Treasury 

18 from fees and assessments deposited in the ac19 count described in paragraph (4) an amount 

20 equal to the amount paid by the Treasury pur21 suant to subparagraph (A) for such fiscal year, 

22 unless there are not sufficient fees and assess23 ments deposited in such account at or prior to 

24 the end of the fiscal year to make such payVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01172 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1173 

•S 3217 AMDT 3739 

1 ment, in which case the Commission shall make 

2 such payment in a subsequent fiscal year. 

3 ‘‘(3) OBLIGATIONS AND EXPENSES.— 

4 ‘‘(A) IN GENERAL.—The Commission shall 

5 determine and prescribe the manner in which— 

6 ‘‘(i) the obligations of the Commission 

7 shall be incurred; and 

8 ‘‘(ii) the disbursements and expenses 

9 of the Commission allowed and paid. 

10 ‘‘(B) INSUFFICIENT FUNDS.—If, in the 

11 course of any fiscal year, the Chairman of the 

12 Commission determines that, due to unforeseen 

13 circumstances, the obligations of the Commis14 sion will exceed those provided for in the budget 

15 submitted under paragraph (1), the Chairman 

16 of the Commission may notify Congress of the 

17 amount and expected uses of the additional ob18 ligations. 

19 ‘‘(C) AUTHORITY TO INCUR EXCESS OBLI20 GATIONS.—The Commission may incur obliga21 tions in excess of the budget submitted under 

22 paragraph (1) from amounts available in the 

23 account described in paragraph (4). 


sroberts on DSKH9S0YB1PROD with BILLS
1174 

•S 3217 AMDT 3739 

1 ‘‘(D) RULE OF CONSTRUCTION.—Any noti2 fication to Congress under this paragraph shall 

3 not be considered a request for appropriations. 

4 ‘‘(4) ACCOUNT.— 

5 ‘‘(A) ESTABLISHMENT.—Fees and assess6 ments collected under this title, section 6(b) of 

7 the Securities Act of 1933 (15 U.S.C. 77f(b)), 

8 and section 24(f) of the Investment Company 

9 Act of 1940 (15 U.S.C. 80a–24(f)) and pay10 ments made by the Treasury pursuant to para11 graph (2)(A) for any fiscal year shall be depos12 ited into an account established at any regular 

13 Government depositary or any State or national 

14 bank. 

15 ‘‘(B) RULE OF CONSTRUCTION.—Any 

16 amounts deposited into the account established 

17 under subparagraph (A) shall not be construed 

18 to be Government funds or appropriated mon19 ies. 

20 ‘‘(C) NO APPORTIONMENT.—Any amounts 

21 deposited into the account established under 

22 subparagraph (A) shall not be subject to appor23 tionment for the purpose of chapter 15 of title 

24 31, United States Code, or under any other au25 thority. 


sroberts on DSKH9S0YB1PROD with BILLS
1175 

•S 3217 AMDT 3739 

1 ‘‘(5) USE OF ACCOUNT FUNDS.— 

2 ‘‘(A) PERMISSIBLE USES.—Amounts avail3 able in the account described in paragraph (4) 

4 may be withdrawn by the Commission and used 

5 for the purposes described in paragraphs (2) 

6 and (3). 

7 ‘‘(B) IMPERMISSIBLE USE.—Except as 

8 provided in paragraph (6), no amounts available 

9 in the account described in paragraph (4) shall 

10 be deposited and credited as general revenue of 

11 the Treasury. 

12 ‘‘(6) EXCESS FUNDS.—If, at the end of any fis13 cal year and after all payments have been made to 

14 the Treasury pursuant to paragraph (2)(B) for such 

15 fiscal year and all prior fiscal years, the balance of 

16 the account described in paragraph (4) exceeds 25 

17 percent of the budget of the Commission for the fol18 lowing fiscal year, the amount by which the balance 

19 exceeds 25 percent of such budget shall be credited 

20 as general revenue of the Treasury.’’. 

21 (b) CONFORMING AMENDMENTS TO TRANSACTION

22 FEE PROVISIONS.—Section 31 of the Securities Exchange 

23 Act of 1934 (15 U.S.C. 78ee) is amended— 

24 (1) by amending subsection (a) to read as fol25 lows: 


sroberts on DSKH9S0YB1PROD with BILLS
1176 

•S 3217 AMDT 3739 

1 ‘‘(a) RECOVERY OF COSTS AND EXPENSES.— 

2 ‘‘(1) IN GENERAL.—The Commission shall, in 

3 accordance with this section, collect transaction fees 

4 and assessments that are designed— 

5 ‘‘(A) to recover the reasonable costs and 

6 expenses of the Commission, as set forth in the 

7 annual budget of the Commission; and 

8 ‘‘(B) to provide funds necessary to main9 tain a reserve. 

10 ‘‘(2) OVERPAYMENTS.—The authority to collect 

11 transaction fees and assessments in accordance with 

12 this section shall include the authority to offset from 

13 such collection any overpayment of transaction fees 

14 or assessments, regardless of the fiscal year in which 

15 such overpayment is made.’’; 

16 (2) in subsection (e)(2), by striking ‘‘September 

17 30’’ and inserting ‘‘September 25’’; 

18 (3) in subsection (g), by striking ‘‘April 30’’ 

19 and inserting ‘‘August 31’’; 

20 (4) by amending subsection (i) to read as fol21 lows: 

22 ‘‘(i) FEE COLLECTIONS.—Fees and assessments col23 lected pursuant to this section shall be deposited and cred24 ited in accordance with section 4(g) of this title.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1177 

•S 3217 AMDT 3739 

1 (5) by amending subsection (j) to read as fol2 lows: 

3 ‘‘(j) ADJUSTMENTS TO TRANSACTION FEE RATES.— 

4 ‘‘(1) ANNUAL ADJUSTMENT.—For each fiscal 

5 year, the Commission shall by order adjust each of 

6 the rates applicable under subsections (b) and (c) 

7 for such fiscal year to a uniform adjusted rate that, 

8 when applied to the baseline estimate of the aggre9 gate dollar amount of sales for such fiscal year, is 

10 reasonably likely to produce aggregate fee collections 

11 under this section (including assessments collected 

12 under subsection (d)) that are equal to the budget 

13 of the Commission for such fiscal year, plus amounts 

14 necessary to maintain a reserve. 

15 ‘‘(2) MID-YEAR ADJUSTMENT.—For each fiscal 

16 year, the Commission shall determine, by March 1 of 

17 such fiscal year, whether, based on the actual aggre18 gate dollar volume of sales during the first 4 months 

19 of such fiscal year, the baseline estimate of the ag20 gregate dollar volume of sales used under paragraph 

21 (1) for such fiscal year is reasonably likely to be 10 

22 percent (or more) greater or less than the actual ag23 gregate dollar volume of sales for such fiscal year. 

24 If the Commission so determines, the Commission 

25 shall by order, not later than March 1, adjust each 


sroberts on DSKH9S0YB1PROD with BILLS
1178 

•S 3217 AMDT 3739 

1 of the rates applicable under subsections (b) and (c) 

2 for such fiscal year to a uniform adjusted rate that, 

3 when applied to the revised estimate of the aggre4 gate dollar amount of sales for the remainder of 

5 such fiscal year, is reasonably likely to produce ag6 gregate fee collections under this section (including 

7 fees estimated to be collected under subsections (b) 

8 and (c) during such fiscal year prior to the effective 

9 date of the new uniform adjusted rate and assess10 ments collected under subsection (d)) that are equal 

11 to the budget of the Commission for such fiscal year, 

12 plus amounts necessary to maintain a reserve. In 

13 making such revised estimate, the Commission shall, 

14 after consultation with the Congressional Budget Of15 fice and the Office of Management and Budget, use 

16 the same methodology required by paragraph (4). 

17 ‘‘(3) REVIEW AND EFFECTIVE DATE.—In exer18 cising its authority under this subsection, the Com19 mission shall not be required to comply with the pro20 visions of section 553 of title 5 United States Code. 

21 An adjusted rate prescribed under paragraph (1) or 

22 (2) and published under subsection (g) shall not be 

23 subject to judicial review. An adjusted rate pre24 scribed under paragraph (1) shall take effect on the 

25 first day of the fiscal year to which such rate apVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01178 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1179 

•S 3217 AMDT 3739 

1 plies. An adjusted rate prescribed under paragraph 

2 (2) shall take effect on April 1 of the fiscal year to 

3 which such rate applies. 

4 ‘‘(4) BASELINE ESTIMATE OF THE AGGREGATE

5 DOLLAR AMOUNT OF SALES.—For purposes of this 

6 subsection, the baseline estimate of the aggregate 

7 dollar amount of sales for any fiscal year is the 

8 baseline estimate of the aggregate dollar amount of 

9 sales of securities (other than bonds, debentures, 

10 other evidences of indebtedness, security futures 

11 products, and options on securities indexes excluding 

12 a narrow-based security index) to be transacted on 

13 each national securities exchange and by or through 

14 any member of each national securities association 

15 (otherwise than on a national securities exchange) 

16 during such fiscal year as determined by the Com17 mission, after consultation with the Congressional 

18 Budget Office and the Office of Management and 

19 Budget, using the methodology required for making 

20 projections pursuant to section 907 of title 2.’’; and 

21 (6) by striking subsections (k) and (l). 

22 (c) CONFORMING AMENDMENTS TO REGISTRATION

23 FEE PROVISIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1180 

•S 3217 AMDT 3739 

1 (1) SECTION 6(B) OF THE SECURITIES ACT OF

2 1933.—Section 6(b) of the Securities Act of 1933 

3 (15 U.S.C. 77f(b)) is amended— 

4 (A) by striking ‘‘offsetting’’ each place that 

5 term appears and inserting ‘‘fee’’; 

6 (B) in paragraph (3), in the paragraph 

7 heading, by striking ‘‘OFFSETTING’’ and insert8 ing ‘‘FEE’’; 

9 (C) in paragraph (11)(A), in the subpara10 graph heading, by striking ‘‘OFFSETTING’’ and 

11 inserting ‘‘FEE’’; 

12 (D) by striking paragraphs (1), (3), (4), 

13 (6), (8), and (9); 

14 (E) by redesignating paragraph (2) as 

15 paragraph (1); 

16 (F) in paragraph (1), as so redesignated, 

17 by striking ‘‘(5) or (6)’’ and inserting ‘‘(3)’’; 

18 (G) by inserting after paragraph (1), as so 

19 redesignated, the following: 

20 ‘‘(2) FEE COLLECTIONS.—Fees collected pursu21 ant to this subsection shall be deposited and credited 

22 in accordance with section 4(i) of the Securities Ex23 change Act of 1934.’’; 

24 (H) by redesignating paragraph (5) as 

25 paragraph (3); 


sroberts on DSKH9S0YB1PROD with BILLS
1181 

•S 3217 AMDT 3739 

1 (I) in paragraph (3), as redesignated— 

2 (i) by striking ‘‘of the fiscal years 

3 2003 through 2011’’ and inserting ‘‘fiscal 

4 year’’; and 

5 (ii) by striking ‘‘paragraph (2)’’ and 

6 inserting ‘‘paragraph (1)’’; 

7 (J) by redesignating paragraph (7) as 

8 paragraph (4); 

9 (K) by inserting after paragraph (4), as so 

10 redesignated, the following: 

11 ‘‘(5) REVIEW AND EFFECTIVE DATE.—In exer12 cising its authority under this subsection, the Com13 mission shall not be required to comply with the pro14 visions of section 553 of title 5, United States Code. 

15 An adjusted rate prescribed under paragraph (3) 

16 and published under paragraph (6) shall not be sub17 ject to judicial review. An adjusted rate prescribed 

18 under paragraph (3) shall take effect on the first 

19 day of the fiscal year to which such rate applies.’’; 

20 (L) by redesignating paragraphs (10) and 

21 (11), as paragraphs (6) and (7); 

22 (M) in paragraph (6), as redesignated, by 

23 striking ‘‘April 30’’ and inserting ‘‘August 31’’; 

24 and 

25 (N) in paragraph (7), as redesignated— 


sroberts on DSKH9S0YB1PROD with BILLS
1182 

•S 3217 AMDT 3739 

1 (i) by striking ‘‘of the fiscal years 

2 2002 through 2011’’ and inserting ‘‘fiscal 

3 year’’; and 

4 (ii) by inserting at the end of the 

5 table in subparagraph (A) the following: 

2012 and each succeeding fiscal year An amount that is 

equal to the target fee collection amount for 

the prior fiscal 

year adjusted 

by the rate of 

inflation. 

6 (2) SECTION 13(E) OF THE SECURITIES EX7 CHANGE ACT OF 1934.—Section 13(e) of the Securi8 ties Exchange Act of 1934 (15 U.S.C. 78m(e)) is 

9 amended— 

10 (A) by striking ‘‘offsetting’’ each place that 

11 term appears and inserting ‘‘fee’’; 

12 (B) in paragraph (3) by striking ‘‘para13 graphs (5) and (6)’’ and inserting ‘‘paragraph 

14 (5)’’; 

15 (C) by amending paragraph (4) to read as 

16 follows: 

17 ‘‘(4) FEE COLLECTIONS.—Fees collected pursu18 ant to this subsection shall be deposited and credited 

19 in accordance with section 4(g) of this title.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1183 

•S 3217 AMDT 3739 

1 (D) in paragraph (5), by striking ‘‘of the 

2 fiscal years 2003 through 2011’’ and inserting 

3 ‘‘fiscal year’’; 

4 (E) by striking paragraphs (6), (7), and 

5 (8); 

6 (F) by redesignating paragraph (7) as 

7 paragraph (6); 

8 (G) by inserting after paragraph (6), as so 

9 redesignated, the following: 

10 ‘‘(7) REVIEW AND EFFECTIVE DATE.—In exer11 cising its authority under this subsection, the Com12 mission shall not be required to comply with the pro13 visions of section 553 of title 5. An adjusted rate 

14 prescribed under paragraph (5) and published under 

15 paragraph (8) shall not be subject to judicial review. 

16 An adjusted rate prescribed under paragraph (5) 

17 shall take effect on the first day of the fiscal year 

18 to which such rate applies.’’; 

19 (H) by striking paragraph (9); 

20 (I) by redesignating paragraph (10) as 

21 paragraph (8); and 

22 (J) in paragraph (8), as so redesignated, 

23 by striking ‘‘6(b)(10)’’ and inserting ‘‘6(b)(6)’’. 

24 (3) SECTION 14 OF THE SECURITIES EXCHANGE

25 ACT OF 1934.—Section 14(g) of the Securities ExVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01183 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1184 

•S 3217 AMDT 3739 

1 change Act of 1934 (15 U.S.C. 78n(g)) is amend2 ed— 

3 (A) by striking the word ‘‘offsetting’’ each 

4 time that it appears and inserting in its place 

5 the word ‘‘fee’’; 

6 (B) in paragraph (1)(A), by striking 

7 ‘‘paragraphs (5) and (6)’’ each time it appears 

8 and inserting ‘‘paragraph (5)’’; 

9 (C) in paragraph (3), by striking ‘‘para10 graphs (5) and (6)’’ and inserting ‘‘paragraph 

11 (5)’’; 

12 (D) by amending paragraph (4) to read as 

13 follows: 

14 ‘‘(4) FEE COLLECTIONS.—Fees collected pursu15 ant to this subsection shall be deposited and credited 

16 in accordance with section 4(g) of this title.’’; 

17 (E) in paragraph (5), by striking ‘‘of the 

18 fiscal years 2003 through 2011’’ and inserting 

19 ‘‘fiscal year’’; 

20 (F) by striking paragraphs (6), (8), and 

21 (9); 

22 (G) by redesignating paragraph (7) as 

23 paragraph (6); 

24 (H) by inserting after paragraph (6), as so 

25 redesignated, the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1185 

•S 3217 AMDT 3739 

1 ‘‘(7) REVIEW AND EFFECTIVE DATE.—In exer2 cising its authority under this subsection, the Com3 mission shall not be required to comply with the pro4 visions of section 553 of title 5. An adjusted rate 

5 prescribed under paragraph (5) and published under 

6 paragraph (8) shall not be subject to judicial review. 

7 An adjusted rate prescribed under paragraph (5) 

8 shall take effect on the first day of the fiscal year 

9 to which such rate applies.’’; 

10 (I) by redesignating paragraphs (10) and 

11 (11) as paragraphs (8) and (9), respectively; 

12 and 

13 (J) in paragraph (9), as so redesignated, 

14 by striking ‘‘6(b)(10)’’ and inserting ‘‘6(b)(7)’’. 

15 (d) REPEAL OF AUTHORIZATION OF APPROPRIA16 TIONS.—Section 35 of the Securities Exchange Act of 

17 1934 (15 U.S.C. 78kk) is repealed. 

18 (e) EFFECTIVE DATE AND TRANSITION PROVI19 SIONS.— 

20 (1) IN GENERAL.—Except as provided in para21 graphs (2) and (3), the amendments made by this 

22 section shall be effective on the first day of the fiscal 

23 year following the fiscal year in which this Act is en24 acted. 


sroberts on DSKH9S0YB1PROD with BILLS
1186 

•S 3217 AMDT 3739 

1 (2) TRANSITION PERIOD.—For the fiscal year 

2 following the fiscal year in which this Act is enacted, 

3 the budget of the Commission shall be deemed to be 

4 the budget submitted by the Chairman of the Com5 mission to the President for such fiscal year in ac6 cordance with the provisions of section 1108 of title 

7 31, United States Code. 

8 (3) OTHER PROVISIONS.—The amendments 

9 made by this section to subsections (g) and (j)(1) of 

10 section 31 of the Securities Exchange Act of 1934 

11 (15 U.S.C. 78ee) shall be effective on the date of en12 actment of this Act, and shall require the Commis13 sion to make and publish an annual adjustment to 

14 the fee rates applicable under subsections (b) and 

15 (c) of section 31 of the Securities Exchange Act of 

16 1934 (15 U.S.C. 78ee) for the fiscal year following 

17 the fiscal year in which this Act is enacted. The ad18 justed rate described in the preceding sentence shall 

19 supersede any previously published adjusted rate ap20 plicable under subsections (b) and (c) of section 31 

21 of the Securities Exchange Act of 1934 for the fiscal 

22 year following the fiscal year in which this Act is en23 acted and shall take effect on the first day of the fis24 cal year following the fiscal year in which this Act 

25 is enacted, except that, if this Act is enacted on or 


sroberts on DSKH9S0YB1PROD with BILLS
1187 

•S 3217 AMDT 3739 

1 after August 31 and on or prior to September 30, 

2 the adjusted rate described in the first sentence shall 

3 be published not later than 15 days after the date 

4 of enactment of this Act and take effect 30 days 

5 thereafter, and the Commission shall continue to col6 lect fees under subsections (b) and (c) of section 31 

7 of the Securities Exchange Act of 1934 at the rate 

8 in effect during the preceding fiscal year until the 

9 adjusted rate is effective. 

10 TITLE X—BUREAU OF CON11 SUMER FINANCIAL PROTEC12 TION 

13 SEC. 1001. SHORT TITLE. 

14 This title may be cited as the ‘‘Consumer Financial 

15 Protection Act of 2010’’. 

16 SEC. 1002. DEFINITIONS. 

17 Except as otherwise provided in this title, for pur18 poses of this title, the following definitions shall apply: 

19 (1) AFFILIATE.—The term ‘‘affiliate’’ means 

20 any person that controls, is controlled by, or is 

21 under common control with another person. 

22 (2) BUREAU.—The term ‘‘Bureau’’ means the 

23 Bureau of Consumer Financial Protection. 

24 (3) BUSINESS OF INSURANCE.—The term 

25 ‘‘business of insurance’’ means the writing of insurVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01187 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1188 

•S 3217 AMDT 3739 

1 ance or the reinsuring of risks by an insurer, includ2 ing all acts necessary to such writing or reinsuring 

3 and the activities relating to the writing of insurance 

4 or the reinsuring of risks conducted by persons who 

5 act as, or are, officers, directors, agents, or employ6 ees of insurers or who are other persons authorized 

7 to act on behalf of such persons. 

8 (4) CONSUMER.—The term ‘‘consumer’’ means 

9 an individual or an agent, trustee, or representative 

10 acting on behalf of an individual. 

11 (5) CONSUMER FINANCIAL PRODUCT OR SERV12 ICE.—The term ‘‘consumer financial product or 

13 service’’ means any financial product or service that 

14 is described in one or more categories under— 

15 (A) paragraph (13) and is offered or pro16 vided for use by consumers primarily for per17 sonal, family, or household purposes; or 

18 (B) clause (i), (iii), (ix), or (x) of para19 graph (13)(A), and is delivered, offered, or pro20 vided in connection with a consumer financial 

21 product or service referred to in subparagraph 

22 (A). 

23 (6) COVERED PERSON.—The term ‘‘covered 

24 person’’ means— 


sroberts on DSKH9S0YB1PROD with BILLS
1189 

•S 3217 AMDT 3739 

1 (A) any person that engages in offering or 

2 providing a consumer financial product or serv3 ice; and 

4 (B) any affiliate of a person described in 

5 subparagraph (A) if such affiliate acts as a 

6 service provider to such person. 

7 (7) CREDIT.—The term ‘‘credit’’ means the 

8 right granted by a person to a consumer to defer 

9 payment of a debt, incur debt and defer its payment, 

10 or purchase property or services and defer payment 

11 for such purchase. 

12 (8) DEPOSIT-TAKING ACTIVITY.—The term ‘‘de13 posit-taking activity’’ means— 

14 (A) the acceptance of deposits, mainte15 nance of deposit accounts, or the provision of 

16 services related to the acceptance of deposits or 

17 the maintenance of deposit accounts; 

18 (B) the acceptance of funds, the provision 

19 of other services related to the acceptance of 

20 funds, or the maintenance of member share ac21 counts by a credit union; or 

22 (C) the receipt of funds or the equivalent 

23 thereof, as the Bureau may determine by rule 

24 or order, received or held by a covered person 

25 (or an agent for a covered person) for the purVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01189 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1190 

•S 3217 AMDT 3739 

1 pose of facilitating a payment or transferring 

2 funds or value of funds between a consumer 

3 and a third party. 

4 (9) DESIGNATED TRANSFER DATE.—The term 

5 ‘‘designated transfer date’’ means the date estab6 lished under section 1062. 

7 (10) DIRECTOR.—The term ‘‘Director’’ means 

8 the Director of the Bureau. 

9 (11) ENUMERATED CONSUMER LAWS.—The 

10 term ‘‘enumerated consumer laws’’ means— 

11 (A) the Alternative Mortgage Transaction 

12 Parity Act of 1982 (12 U.S.C. 3801 et seq.); 

13 (B) the Consumer Leasing Act of 1976 

14 (15 U.S.C. 1667 et seq.); 

15 (C) the Electronic Fund Transfer Act (15 

16 U.S.C. 1693 et seq.); 

17 (D) the Equal Credit Opportunity Act (15 

18 U.S.C. 1691 et seq.); 

19 (E) the Fair Credit Billing Act (15 U.S.C. 

20 1666 et seq.); 

21 (F) the Fair Credit Reporting Act (15 

22 U.S.C. 1681 et seq.), except with respect to sec23 tions 615(e) and 628 of that Act (15 U.S.C. 

24 1681m(e), 1681w); 


sroberts on DSKH9S0YB1PROD with BILLS
1191 

•S 3217 AMDT 3739 

1 (G) the Home Owners Protection Act of 

2 1998 (12 U.S.C. 4901 et seq.); 

3 (H) the Fair Debt Collection Practices Act 

4 (15 U.S.C. 1692 et seq.); 

5 (I) subsections (c) through (f) of section 

6 43 of the Federal Deposit Insurance Act (12 

7 U.S.C. 1831t(c)–(f)); 

8 (J) sections 502 through 509 of the 

9 Gramm-Leach-Bliley Act (15 U.S.C. 6802– 

10 6809); 

11 (K) the Home Mortgage Disclosure Act of 

12 1975 (12 U.S.C. 2801 et seq.); 

13 (L) the Home Ownership and Equity Pro14 tection Act of 1994 (15 U.S.C. 1601 note); 

15 (M) the Real Estate Settlement Procedures 

16 Act of 1974 (12 U.S.C. 2601 et seq.); 

17 (N) the S.A.F.E. Mortgage Licensing Act 

18 of 2008 (12 U.S.C. 5101 et seq.); 

19 (O) the Truth in Lending Act (15 U.S.C. 

20 1601 et seq.); and 

21 (P) the Truth in Savings Act (12 U.S.C. 

22 4301 et seq.). 

23 (12) FEDERAL CONSUMER FINANCIAL LAW.— 

24 The term ‘‘Federal consumer financial law’’ means 

25 the provisions of this title, the enumerated consumer 


sroberts on DSKH9S0YB1PROD with BILLS
1192 

•S 3217 AMDT 3739 

1 laws, the laws for which authorities are transferred 

2 under subtitles F and H, and any rule or order pre3 scribed by the Bureau under this title, an enumer4 ated consumer law, or pursuant to the authorities 

5 transferred under subtitles F and H. 

6 (13) FINANCIAL PRODUCT OR SERVICE.—The 

7 term ‘‘financial product or service’’— 

8 (A) means— 

9 (i) extending credit and servicing 

10 loans, including acquiring, purchasing, sell11 ing, brokering, or other extensions of credit 

12 (other than solely extending commercial 

13 credit to a person who originates consumer 

14 credit transactions); 

15 (ii) extending or brokering leases of 

16 personal or real property that are the func17 tional equivalent of purchase finance ar18 rangements, if— 

19 (I) the lease is on a non-oper20 ating basis; 

21 (II) the initial term of the lease 

22 is at least 90 days; and 

23 (III) in the case of a lease involv24 ing real property, at the inception of 

25 the initial lease, the transaction is inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01192 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1193 

•S 3217 AMDT 3739 

1 tended to result in ownership of the 

2 leased property to be transferred to 

3 the lessee, subject to standards pre4 scribed by the Bureau; 

5 (iii) providing real estate settlement 

6 services or performing appraisals of real 

7 estate or personal property; 

8 (iv) engaging in deposit-taking activi9 ties, transmitting or exchanging funds, or 

10 otherwise acting as a custodian of funds or 

11 any financial instrument for use by or on 

12 behalf of a consumer; 

13 (v) selling, providing, or issuing stored 

14 value or payment instruments, except that, 

15 in the case of a sale of, or transaction to 

16 reload, stored value, only if the seller exer17 cises substantial control over the terms or 

18 conditions of the stored value provided to 

19 the consumer where, for purposes of this 

20 clause— 

21 (I) a seller shall not be found to 

22 exercise substantial control over the 

23 terms or conditions of the stored value 

24 if the seller is not a party to the con25 tract with the consumer for the stored 


sroberts on DSKH9S0YB1PROD with BILLS
1194 

•S 3217 AMDT 3739 

1 value product, and another person is 

2 principally responsible for establishing 

3 the terms or conditions of the stored 

4 value; and 

5 (II) advertising the nonfinancial 

6 goods or services of the seller on the 

7 stored value card or device is not in 

8 itself an exercise of substantial control 

9 over the terms or conditions; 

10 (vi) providing check cashing, check 

11 collection, or check guaranty services; 

12 (vii) providing payments or other fi13 nancial data processing products or serv14 ices to a consumer by any technological 

15 means, including processing or storing fi16 nancial or banking data for any payment 

17 instrument, or through any payments sys18 tems or network used for processing pay19 ments data, including payments made 

20 through an online banking system or mo21 bile telecommunications network, except 

22 that a person shall not be deemed to be a 

23 covered person with respect to financial 

24 data processing solely because the per25 son— 


sroberts on DSKH9S0YB1PROD with BILLS
1195 

•S 3217 AMDT 3739 

1 (I) unknowingly or incidentally 

2 processes, stores, or transmits over 

3 the Internet, telephone line, mobile 

4 network, or any other mode of trans5 mission, as part of a stream of other 

6 types of data, financial data in a man7 ner that such data is undifferentiated 

8 from other types of data of the same 

9 form that the person processes, stores, 

10 or transmits; 

11 (II) is a merchant, retailer, or 

12 seller of any nonfinancial good or 

13 service who engages in financial data 

14 processing by transmitting or storing 

15 payments data about a consumer ex16 clusively for purpose of initiating pay17 ments instructions by the consumer to 

18 pay such person for the purchase of, 

19 or to complete a commercial trans20 action for, such nonfinancial good or 

21 service sold directly by such person to 

22 the consumer; or 

23 (III) provides access to a host 

24 server to a person for purposes of enVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01195 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1196 

•S 3217 AMDT 3739 

1 abling that person to establish and 

2 maintain a website; 

3 (viii) providing financial advisory serv4 ices to consumers on individual financial 

5 matters or relating to proprietary financial 

6 products or services (other than by pub7 lishing any bona fide newspaper, news 

8 magazine, or business or financial publica9 tion of general and regular circulation, in10 cluding publishing market data, news, or 

11 data analytics or investment information or 

12 recommendations that are not tailored to 

13 the individual needs of a particular con14 sumer), including— 

15 (I) providing credit counseling to 

16 any consumer; and 

17 (II) providing services to assist a 

18 consumer with debt management or 

19 debt settlement, modifying the terms 

20 of any extension of credit, or avoiding 

21 foreclosure; 

22 (ix) collecting, analyzing, maintaining, 

23 or providing consumer report information 

24 or other account information, including in25 formation relating to the credit history of 


sroberts on DSKH9S0YB1PROD with BILLS
1197 

•S 3217 AMDT 3739 

1 consumers, used or expected to be used in 

2 connection with any decision regarding the 

3 offering or provision of a consumer finan4 cial product or service, except to the extent 

5 that— 

6 (I) a person— 

7 (aa) collects, analyzes, or 

8 maintains information that re9 lates solely to the transactions 

10 between a consumer and such 

11 person; or 

12 (bb) provides the informa13 tion described in item (aa) to an 

14 affiliate of such person; and 

15 (II) the information described in 

16 subclause (I)(aa) is not used by such 

17 person or affiliate in connection with 

18 any decision regarding the offering or 

19 provision of a consumer financial 

20 product or service to the consumer, 

21 other than credit described in section 

22 1027(a)(2)(A); 

23 (x) collecting debt related to any con24 sumer financial product or service; and 


sroberts on DSKH9S0YB1PROD with BILLS
1198 

•S 3217 AMDT 3739 

1 (xi) such other financial product or 

2 service as may be defined by the Bureau, 

3 by regulation, for purposes of this title, if 

4 the Bureau finds that such financial prod5 uct or service is— 

6 (I) entered into or conducted as 

7 a subterfuge or with a purpose to 

8 evade any Federal consumer financial 

9 law; or 

10 (II) permissible for a bank or for 

11 a financial holding company to offer 

12 or to provide under any provision of a 

13 Federal law or regulation applicable 

14 to a bank or a financial holding com15 pany, and has, or likely will have, a 

16 material impact on consumers; and 

17 (B) does not include the business of insur18 ance. 

19 (14) FOREIGN EXCHANGE.—The term ‘‘foreign 

20 exchange’’ means the exchange, for compensation, of 

21 currency of the United States or of a foreign govern22 ment for currency of another government. 

23 (15) INSURED CREDIT UNION.—The term ‘‘in24 sured credit union’’ has the same meaning as in secVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01198 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1199 

•S 3217 AMDT 3739 

1 tion 101 of the Federal Credit Union Act (12 U.S.C. 

2 1752). 

3 (16) PAYMENT INSTRUMENT.—The term ‘‘pay4 ment instrument’’ means a check, draft, warrant, 

5 money order, traveler’s check, electronic instrument, 

6 or other instrument, payment of funds, or monetary 

7 value (other than currency). 

8 (17) PERSON.—The term ‘‘person’’ means an 

9 individual, partnership, company, corporation, asso10 ciation (incorporated or unincorporated), trust, es11 tate, cooperative organization, or other entity. 

12 (18) PERSON REGULATED BY THE COMMODITY

13 FUTURES TRADING COMMISSION.—The term ‘‘person 

14 regulated by the Commodity Futures Trading Com15 mission’’ means any person that is registered, or re16 quired by statute or regulation to be registered, with 

17 the Commodity Futures Trading Commission, but 

18 only to the extent that the activities of such person 

19 are subject to the jurisdiction of the Commodity Fu20 tures Trading Commission under the Commodity 

21 Exchange Act. 

22 (19) PERSON REGULATED BY THE COMMIS23 SION.—The term ‘‘person regulated by the Commis24 sion’’ means a person who is— 


sroberts on DSKH9S0YB1PROD with BILLS
1200 

•S 3217 AMDT 3739 

1 (A) a broker or dealer that is required to 

2 be registered under the Securities Exchange Act 

3 of 1934; 

4 (B) an investment adviser that is reg5 istered under the Investment Advisers Act of 

6 1940; 

7 (C) an investment company that is re8 quired to be registered under the Investment 

9 Company Act of 1940, and any company that 

10 has elected to be regulated as a business devel11 opment company under that Act; 

12 (D) a national securities exchange that is 

13 required to be registered under the Securities 

14 Exchange Act of 1934; 

15 (E) a transfer agent that is required to be 

16 registered under the Securities Exchange Act of 

17 1934; 

18 (F) a clearing corporation that is required 

19 to be registered under the Securities Exchange 

20 Act of 1934; 

21 (G) any self-regulatory organization that is 

22 required to be registered with the Commission; 

23 (H) any nationally recognized statistical 

24 rating organization that is required to be reg25 istered with the Commission; 


sroberts on DSKH9S0YB1PROD with BILLS
1201 

•S 3217 AMDT 3739 

1 (I) any securities information processor 

2 that is required to be registered with the Com3 mission; 

4 (J) any municipal securities dealer that is 

5 required to be registered with the Commission; 

6 (K) any other person that is required to be 

7 registered with the Commission under the Secu8 rities Exchange Act of 1934; and 

9 (L) any employee, agent, or contractor act10 ing on behalf of, registered with, or providing 

11 services to, any person described in any of sub12 paragraphs (A) through (K), but only to the ex13 tent that any person described in any of sub14 paragraphs (A) through (K), or the employee, 

15 agent, or contractor of such person, acts in a 

16 regulated capacity. 

17 (20) PERSON REGULATED BY A STATE INSUR18 ANCE REGULATOR.—The term ‘‘person regulated by 

19 a State insurance regulator’’ means any person that 

20 is engaged in the business of insurance and subject 

21 to regulation by any State insurance regulator, but 

22 only to the extent that such person acts in such ca23 pacity. 

24 (21) PERSON THAT PERFORMS INCOME TAX

25 PREPARATION ACTIVITIES FOR CONSUMERS.—The 


sroberts on DSKH9S0YB1PROD with BILLS
1202 

•S 3217 AMDT 3739 

1 term ‘‘person that performs income tax preparation 

2 activities for consumers’’ means— 

3 (A) any tax return preparer (as defined in 

4 section 7701(a)(36) of the Internal Revenue 

5 Code of 1986), regardless of whether com6 pensated, but only to the extent that the person 

7 acts in such capacity; 

8 (B) any person regulated by the Secretary 

9 under section 330 of title 31, United States 

10 Code, but only to the extent that the person 

11 acts in such capacity; and 

12 (C) any authorized IRS e-file Providers (as 

13 defined for purposes of section 7216 of the In14 ternal Revenue Code of 1986), but only to the 

15 extent that the person acts in such capacity. 

16 (22) PRUDENTIAL REGULATOR.—The term 

17 ‘‘prudential regulator’’ means— 

18 (A) in the case of an insured depository in19 stitution, the appropriate Federal banking 

20 agency, as that term is defined in section 3 of 

21 the Federal Deposit Insurance Act; and 

22 (B) in the case of an insured credit union, 

23 the National Credit Union Administration. 

24 (23) RELATED PERSON.—The term ‘‘related 

25 person’’— 


sroberts on DSKH9S0YB1PROD with BILLS
1203 

•S 3217 AMDT 3739 

1 (A) shall apply only with respect to a cov2 ered person that is not a bank holding company 

3 (as that term is defined in section 2 of the 

4 Bank Holding Company Act of 1956), credit 

5 union, or depository institution; 

6 (B) shall be deemed to mean a covered 

7 person for all purposes of any provision of Fed8 eral consumer financial law; and 

9 (C) means— 

10 (i) any director, officer, or employee 

11 charged with managerial responsibility for, 

12 or controlling shareholder of, or agent for, 

13 such covered person; 

14 (ii) any shareholder, consultant, joint 

15 venture partner, or other person, as deter16 mined by the Bureau (by rule or on a case17 by-case basis) who materially participates 

18 in the conduct of the affairs of such cov19 ered person; and 

20 (iii) any independent contractor (in21 cluding any attorney, appraiser, or ac22 countant) who knowingly or recklessly par23 ticipates in any— 

24 (I) violation of any provision of 

25 law or regulation; or 


sroberts on DSKH9S0YB1PROD with BILLS
1204 

•S 3217 AMDT 3739 

1 (II) breach of a fiduciary duty. 

2 (24) SERVICE PROVIDER.— 

3 (A) IN GENERAL.—The term ‘‘service pro4 vider’’ means any person that provides a mate5 rial service to a covered person in connection 

6 with the offering or provision by such covered 

7 person of a consumer financial product or serv8 ice, including a person that— 

9 (i) participates in designing, oper10 ating, or maintaining the consumer finan11 cial product or service; or 

12 (ii) processes transactions relating to 

13 the consumer financial product or service 

14 (other than unknowingly or incidentally 

15 transmitting or processing financial data in 

16 a manner that such data is undifferen17 tiated from other types of data of the same 

18 form as the person transmits or processes). 

19 (B) EXCEPTIONS.—The term ‘‘service pro20 vider’’ does not include a person solely by virtue 

21 of such person offering or providing to a cov22 ered person— 

23 (i) a support service of a type pro24 vided to businesses generally or a similar 

25 ministerial service; or 


sroberts on DSKH9S0YB1PROD with BILLS
1205 

•S 3217 AMDT 3739 

1 (ii) time or space for an advertisement 

2 for a consumer financial product or service 

3 through print, newspaper, or electronic 

4 media. 

5 (C) RULE OF CONSTRUCTION.—A person 

6 that is a service provider shall be deemed to be 

7 a covered person to the extent that such person 

8 engages in the offering or provision of its own 

9 consumer financial product or service. 

10 (25) STATE.—The term ‘‘State’’ means any 

11 State, territory, or possession of the United States, 

12 the District of Columbia, the Commonwealth of 

13 Puerto Rico, the Commonwealth of the Northern 

14 Mariana Islands, Guam, American Samoa, or the 

15 United States Virgin Islands or any federally recog16 nized Indian tribe, as defined by the Secretary of the 

17 Interior under section 104(a) of the Federally Rec18 ognized Indian Tribe List Act of 1994 (25 U.S.C. 

19 479a–1(a)). 

20 (26) STORED VALUE.—The term ‘‘stored value’’ 

21 means funds or monetary value represented in any 

22 electronic format, whether or not specially encrypted, 

23 and stored or capable of storage on electronic media 

24 in such a way as to be retrievable and transferred 

25 electronically, and includes a prepaid debit card or 


sroberts on DSKH9S0YB1PROD with BILLS
1206 

•S 3217 AMDT 3739 

1 product, or any other similar product, regardless of 

2 whether the amount of the funds or monetary value 

3 may be increased or reloaded. 

4 (27) TRANSMITTING OR EXCHANGING FUNDS.— 

5 The term ‘‘transmitting or exchanging funds’’ means 

6 receiving currency, monetary value, or payment in7 struments from a consumer for the purpose of ex8 changing or transmitting the same by any means, 

9 including transmission by wire, facsimile, electronic 

10 transfer, courier, the Internet, or through bill pay11 ment services or through other businesses that facili12 tate third-party transfers within the United States 

13 or to or from the United States. 

14 Subtitle A—Bureau of Consumer 

15 Financial Protection 

16 SEC. 1011. ESTABLISHMENT OF THE BUREAU. 

17 (a) BUREAU ESTABLISHED.—There is established in 

18 the Federal Reserve System the Bureau of Consumer Fi19 nancial Protection, which shall regulate the offering and 

20 provision of consumer financial products or services under 

21 the Federal consumer financial laws. 

22 (b) DIRECTOR AND DEPUTY DIRECTOR.— 

23 (1) IN GENERAL.—There is established the po24 sition of the Director, who shall serve as the head 

25 of the Bureau. 


sroberts on DSKH9S0YB1PROD with BILLS
1207 

•S 3217 AMDT 3739 

1 (2) APPOINTMENT.—Subject to paragraph (3), 

2 the Director shall be appointed by the President, by 

3 and with the advice and consent of the Senate. 

4 (3) QUALIFICATION.—The President shall 

5 nominate the Director from among individuals who 

6 are citizens of the United States. 

7 (4) COMPENSATION.—The Director shall be 

8 compensated at the rate prescribed for level II of the 

9 Executive Schedule under section 5313 of title 5, 

10 United States Code. 

11 (5) DEPUTY DIRECTOR.—There is established 

12 the position of Deputy Director, who shall— 

13 (A) be appointed by the Director; and 

14 (B) serve as acting Director in the absence 

15 or unavailability of the Director. 

16 (c) TERM.— 

17 (1) IN GENERAL.—The Director shall serve for 

18 a term of 5 years. 

19 (2) EXPIRATION OF TERM.—An individual may 

20 serve as Director after the expiration of the term for 

21 which appointed, until a successor has been ap22 pointed and qualified. 

23 (3) REMOVAL FOR CAUSE.—The President may 

24 remove the Director for inefficiency, neglect of duty, 

25 or malfeasance in office. 


sroberts on DSKH9S0YB1PROD with BILLS
1208 

•S 3217 AMDT 3739 

1 (d) SERVICE RESTRICTION.—No Director or Deputy 

2 Director may hold any office, position, or employment in 

3 any Federal reserve bank, Federal home loan bank, cov4 ered person, or service provider during the period of serv5 ice of such person as Director or Deputy Director. 

6 (e) OFFICES.—The principal office of the Bureau 

7 shall be in the District of Columbia. The Director may 

8 establish regional offices of the Bureau, including in cities 

9 in which the Federal reserve banks, or branches of such 

10 banks, are located, in order to carry out the responsibil11 ities assigned to the Bureau under the Federal consumer 

12 financial laws. 

13 SEC. 1012. EXECUTIVE AND ADMINISTRATIVE POWERS. 

14 (a) POWERS OF THE BUREAU.—The Bureau is au15 thorized to establish the general policies of the Bureau 

16 with respect to all executive and administrative functions, 

17 including— 

18 (1) the establishment of rules for conducting 

19 the general business of the Bureau, in a manner not 

20 inconsistent with this title; 

21 (2) to bind the Bureau and enter into con22 tracts; 

23 (3) directing the establishment and mainte24 nance of divisions or other offices within the Bureau, 

25 in order to carry out the responsibilities under the 


sroberts on DSKH9S0YB1PROD with BILLS
1209 

•S 3217 AMDT 3739 

1 Federal consumer financial laws, and to satisfy the 

2 requirements of other applicable law; 

3 (4) to coordinate and oversee the operation of 

4 all administrative, enforcement, and research activi5 ties of the Bureau; 

6 (5) to adopt and use a seal; 

7 (6) to determine the character of and the neces8 sity for the obligations and expenditures of the Bu9 reau; 

10 (7) the appointment and supervision of per11 sonnel employed by the Bureau; 

12 (8) the distribution of business among per13 sonnel appointed and supervised by the Director and 

14 among administrative units of the Bureau; 

15 (9) the use and expenditure of funds; 

16 (10) implementing the Federal consumer finan17 cial laws through rules, orders, guidance, interpreta18 tions, statements of policy, examinations, and en19 forcement actions; and 

20 (11) performing such other functions as may be 

21 authorized or required by law. 

22 (b) DELEGATION OF AUTHORITY.—The Director of 

23 the Bureau may delegate to any duly authorized employee, 

24 representative, or agent any power vested in the Bureau 

25 by law. 


sroberts on DSKH9S0YB1PROD with BILLS
1210 

•S 3217 AMDT 3739 

1 (c) AUTONOMY OF THE BUREAU.— 

2 (1) COORDINATION WITH THE BOARD OF GOV3 ERNORS.—Notwithstanding section 18 of the Fed4 eral Trade Commission Act (15 U.S.C. 57a) and any 

5 other provision of law applicable to the supervision 

6 or examination of persons with respect to Federal 

7 consumer financial laws, the Board of Governors 

8 may delegate to the Bureau the authorities to exam9 ine persons subject to the jurisdiction of the Board 

10 of Governors for compliance with the Federal con11 sumer financial laws. 

12 (2) AUTONOMY.—Notwithstanding the authori13 ties granted to the Board of Governors under the 

14 Federal Reserve Act, the Board of Governors may 

15 not— 

16 (A) intervene in any matter or proceeding 

17 before the Director, including examinations or 

18 enforcement actions, unless otherwise specifi19 cally provided by law; 

20 (B) appoint, direct, or remove any officer 

21 or employee of the Bureau; or 

22 (C) merge or consolidate the Bureau, or 

23 any of the functions or responsibilities of the 

24 Bureau, with any division or office of the Board 

25 of Governors or the Federal reserve banks. 


sroberts on DSKH9S0YB1PROD with BILLS
1211 

•S 3217 AMDT 3739 

1 (3) RULES AND ORDERS.—No rule or order of 

2 the Bureau shall be subject to approval or review by 

3 the Board of Governors. The Board of Governors 

4 may not delay or prevent the issuance of any rule 

5 or order of the Bureau. 

6 (4) RECOMMENDATIONS AND TESTIMONY.—No 

7 officer or agency of the United States shall have any 

8 authority to require the Director or any other officer 

9 of the Bureau to submit legislative recommenda10 tions, or testimony or comments on legislation, to 

11 any officer or agency of the United States for ap12 proval, comments, or review prior to the submission 

13 of such recommendations, testimony, or comments to 

14 the Congress, if such recommendations, testimony, 

15 or comments to the Congress include a statement in16 dicating that the views expressed therein are those 

17 of the Director or such officer, and do not nec18 essarily reflect the views of the Board of Governors 

19 or the President. 

20 SEC. 1013. ADMINISTRATION. 

21 (a) PERSONNEL.— 

22 (1) APPOINTMENT.— 

23 (A) IN GENERAL.—The Director may fix 

24 the number of, and appoint and direct, all em25 ployees of the Bureau. 


sroberts on DSKH9S0YB1PROD with BILLS
1212 

•S 3217 AMDT 3739 

1 (B) EMPLOYEES OF THE BUREAU.—The 

2 Director is authorized to employ attorneys, 

3 compliance examiners, compliance supervision 

4 analysts, economists, statisticians, and other 

5 employees as may be deemed necessary to con6 duct the business of the Bureau. Notwith7 standing any other provision of law, all such 

8 employees shall be appointed and compensated 

9 on terms and conditions that are consistent 

10 with the terms and conditions set forth in sec11 tion 11(l) of the Federal Reserve Act (12 

12 U.S.C. 248(l)). 

13 (2) COMPENSATION.—The Director shall at all 

14 times provide compensation and benefits to each 

15 class of employees that, at a minimum, are equiva16 lent to the compensation and benefits then being 

17 provided by the Board of Governors for the cor18 responding class of employees. 

19 (b) SPECIFIC FUNCTIONAL UNITS.— 

20 (1) RESEARCH.—The Director shall establish a 

21 unit whose functions shall include researching, ana22 lyzing, and reporting on— 

23 (A) developments in markets for consumer 

24 financial products or services, including market 

25 areas of alternative consumer financial products 


sroberts on DSKH9S0YB1PROD with BILLS
1213 

•S 3217 AMDT 3739 

1 or services with high growth rates and areas of 

2 risk to consumers; 

3 (B) access to fair and affordable credit for 

4 traditionally underserved communities; 

5 (C) consumer awareness, understanding, 

6 and use of disclosures and communications re7 garding consumer financial products or services; 

8 (D) consumer awareness and under9 standing of costs, risks, and benefits of con10 sumer financial products or services; and 

11 (E) consumer behavior with respect to con12 sumer financial products or services. 

13 (2) COMMUNITY AFFAIRS.—The Director shall 

14 establish a unit whose functions shall include pro15 viding information, guidance, and technical assist16 ance regarding the offering and provision of con17 sumer financial products or services to traditionally 

18 underserved consumers and communities. 

19 (3) COLLECTING AND TRACKING COM20 PLAINTS.— 

21 (A) IN GENERAL.—The Director shall es22 tablish a unit whose functions shall include es23 tablishing a single, toll-free telephone number, a 

24 website, and a database to facilitate the central25 ized collection of, monitoring of, and response 


sroberts on DSKH9S0YB1PROD with BILLS
1214 

•S 3217 AMDT 3739 

1 to consumer complaints regarding consumer fi2 nancial products or services. The Director shall 

3 coordinate with other Federal agencies to route 

4 complaints to other Federal regulators, where 

5 appropriate. 

6 (B) ROUTING CALLS TO STATES.—To the 

7 extent practicable, State agencies may receive 

8 appropriate complaints from the systems estab9 lished under subparagraph (A), if— 

10 (i) the State agency system has the 

11 functional capacity to receive calls or elec12 tronic reports routed by the Bureau sys13 tems; and 

14 (ii) the State agency has satisfied any 

15 conditions of participation in the system 

16 that the Bureau may establish, including 

17 treatment of personally identifiable infor18 mation and sharing of information on com19 plaint resolution or related compliance pro20 cedures and resources. 

21 (C) REPORTS TO THE CONGRESS.—The 

22 Director shall present an annual report to Con23 gress not later than March 31 of each year on 

24 the complaints received by the Bureau in the 

25 prior year regarding consumer financial prodVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01214 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1215 

•S 3217 AMDT 3739 

1 ucts and services. Such report shall include in2 formation and analysis about complaint num3 bers, complaint types, and, where applicable, in4 formation about resolution of complaints. 

5 (D) DATA SHARING REQUIRED.—To facili6 tate preparation of the reports required under 

7 subparagraph (C), supervision and enforcement 

8 activities, and monitoring of the market for 

9 consumer financial products and services, the 

10 Bureau shall share consumer complaint infor11 mation with prudential regulators, other Fed12 eral agencies, and State agencies, consistent 

13 with Federal law applicable to personally identi14 fiable information. The prudential regulators 

15 and other Federal agencies shall share data re16 lating to consumer complaints regarding con17 sumer financial products and services with the 

18 Bureau, consistent with Federal law applicable 

19 to personally identifiable information. 

20 (c) OFFICE OF FAIR LENDING AND EQUAL OPPOR21 TUNITY.— 

22 (1) ESTABLISHMENT.—The Director shall es23 tablish within the Bureau the Office of Fair Lending 

24 and Equal Opportunity. 


sroberts on DSKH9S0YB1PROD with BILLS
1216 

•S 3217 AMDT 3739 

1 (2) FUNCTIONS.—The Office of Fair Lending 

2 and Equal Opportunity shall have such powers and 

3 duties as the Director may delegate to the Office, in4 cluding— 

5 (A) providing oversight and enforcement of 

6 Federal laws intended to ensure the fair, equi7 table, and nondiscriminatory access to credit for 

8 both individuals and communities that are en9 forced by the Bureau, including the Equal 

10 Credit Opportunity Act and the Home Mort11 gage Disclosure Act; 

12 (B) coordinating fair lending and fair 

13 housing efforts of the Bureau with other Fed14 eral agencies and State regulators, as appro15 priate, to promote consistent, efficient, and ef16 fective enforcement of Federal fair lending laws; 

17 (C) working with private industry, fair 

18 lending, civil rights, consumer and community 

19 advocates on the promotion of fair lending com20 pliance and education; and 

21 (D) providing annual reports to Congress 

22 on the efforts of the Bureau to fulfill its fair 

23 lending mandate. 

24 (3) ADMINISTRATION OF OFFICE.—There is es25 tablished the position of Assistant Director of the 


sroberts on DSKH9S0YB1PROD with BILLS
1217 

•S 3217 AMDT 3739 

1 Bureau for Fair Lending and Equal Opportunity, 

2 who— 

3 (A) shall be appointed by the Director; and 

4 (B) shall carry out such duties as the Di5 rector may delegate to such Assistant Director. 

6 (d) OFFICE OF FINANCIAL LITERACY.— 

7 (1) ESTABLISHMENT.—The Director shall es8 tablish an Office of Financial Literacy, which shall 

9 be responsible for developing and implementing ini10 tiatives intended to educate and empower consumers 

11 to make better informed financial decisions. 

12 (2) OTHER DUTIES.—The Office of Financial 

13 Literacy shall develop and implement a strategy to 

14 improve the financial literacy of consumers that in15 cludes measurable goals and objectives, in consulta16 tion with the Financial Literacy and Education 

17 Commission, consistent with the National Strategy 

18 for Financial Education, through activities including 

19 providing opportunities for consumers to access— 

20 (A) financial counseling; 

21 (B) information to assist with the evalua22 tion of credit products and the understanding 

23 of credit histories and scores; 

24 (C) savings, borrowing, and other services 

25 found at mainstream financial institutions; 


sroberts on DSKH9S0YB1PROD with BILLS
1218 

•S 3217 AMDT 3739 

1 (D) activities intended to— 

2 (i) prepare the consumer for edu3 cational expenses and the submission of fi4 nancial aid applications, and other major 

5 purchases; 

6 (ii) reduce debt; and 

7 (iii) improve the financial situation of 

8 the consumer; 

9 (E) assistance in developing long-term sav10 ings strategies; and 

11 (F) wealth building and financial services 

12 during the preparation process to claim earned 

13 income tax credits and Federal benefits. 

14 (3) COORDINATION.—The Office of Financial 

15 Literacy shall coordinate with other units within the 

16 Bureau in carrying out its functions, including— 

17 (A) working with the Community Affairs 

18 Office to implement the strategy to improve fi19 nancial literacy of consumers; and 

20 (B) working with the research unit estab21 lished by the Director to conduct research re22 lated to consumer financial education and coun23 seling. 

24 (4) REPORT.—Not later than 24 months after 

25 the designated transfer date, and annually thereVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01218 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1219 

•S 3217 AMDT 3739 

1 after, the Director shall submit a report on its finan2 cial literacy activities and strategy to improve finan3 cial literacy of consumers to— 

4 (A) the Committee on Banking, Housing, 

5 and Urban Affairs of the Senate; and 

6 (B) the Committee on Financial Services 

7 of the House of Representatives. 

8 (5) MEMBERSHIP IN FINANCIAL LITERACY AND

9 EDUCATION COMMISSION.—Section 513(c)(1) of the 

10 Financial Literacy and Education Improvement Act 

11 (20 U.S.C. 9702(c)(1)) is amended— 

12 (A) in subparagraph (B), by striking 

13 ‘‘and’’ at the end; 

14 (B) by redesignating subparagraph (C) as 

15 subparagraph (D); and 

16 (C) by inserting after subparagraph (B) 

17 the following new subparagraph: 

18 ‘‘(C) the Director of the Bureau of Con19 sumer Financial Protection; and’’. 

20 (6) CONFORMING AMENDMENT.—Section 

21 513(d) of the Financial Literacy and Education Im22 provement Act (20 U.S.C. 9702(d)) is amended by 

23 adding at the end the following: ‘‘The Director of 

24 the Bureau of Consumer Financial Protection shall 

25 serve as the Vice Chairman.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1220 

•S 3217 AMDT 3739 

1 SEC. 1014. CONSUMER ADVISORY BOARD. 

2 (a) ESTABLISHMENT REQUIRED.—The Director shall 

3 establish a Consumer Advisory Board to advise and con4 sult with the Bureau in the exercise of its functions under 

5 the Federal consumer financial laws, and to provide infor6 mation on emerging practices in the consumer financial 

7 products or services industry, including regional trends, 

8 concerns, and other relevant information. 

9 (b) MEMBERSHIP.—In appointing the members of 

10 the Consumer Advisory Board, the Director shall seek to 

11 assemble experts in consumer protection, financial serv12 ices, community development, fair lending, and consumer 

13 financial products or services and seek representation of 

14 the interests of covered persons and consumers, without 

15 regard to party affiliation. Not fewer than 6 members 

16 shall be appointed upon the recommendation of the re17 gional Federal Reserve Bank Presidents, on a rotating 

18 basis. 

19 (c) MEETINGS.—The Consumer Advisory Board shall 

20 meet from time to time at the call of the Director, but, 

21 at a minimum, shall meet at least twice in each year. 

22 (d) COMPENSATION AND TRAVEL EXPENSES.—Mem23 bers of the Consumer Advisory Board who are not full24 time employees of the United States shall— 

25 (1) be entitled to receive compensation at a rate 

26 fixed by the Director while attending meetings of the 


sroberts on DSKH9S0YB1PROD with BILLS
1221 

•S 3217 AMDT 3739 

1 Consumer Advisory Board, including travel time; 

2 and 

3 (2) be allowed travel expenses, including trans4 portation and subsistence, while away from their 

5 homes or regular places of business. 

6 SEC. 1015. COORDINATION. 

7 The Bureau shall coordinate with the Commission, 

8 the Commodity Futures Trading Commission, and other 

9 Federal agencies and State regulators, as appropriate, to 

10 promote consistent regulatory treatment of consumer fi11 nancial and investment products and services. 

12 SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CON13 GRESS. 

14 (a) APPEARANCES BEFORE CONGRESS.—The Direc15 tor of the Bureau shall appear before the Committee on 

16 Banking, Housing, and Urban Affairs of the Senate and 

17 the Committee on Financial Services of the House of Rep18 resentatives at semi-annual hearings regarding the reports 

19 required under subsection (b). 

20 (b) REPORTS REQUIRED.—The Bureau shall, concur21 rent with each semi-annual hearing referred to in sub22 section (a), prepare and submit to the President and to 

23 the Committee on Banking, Housing, and Urban Affairs 

24 of the Senate and the Committee on Financial Services 


sroberts on DSKH9S0YB1PROD with BILLS
1222 

•S 3217 AMDT 3739 

1 of the House of Representatives, a report, beginning with 

2 the session following the designated transfer date. 

3 (c) CONTENTS.—The reports required by subsection 

4 (b) shall include— 

5 (1) a discussion of the significant problems 

6 faced by consumers in shopping for or obtaining 

7 consumer financial products or services; 

8 (2) a justification of the budget request of the 

9 previous year; 

10 (3) a list of the significant rules and orders 

11 adopted by the Bureau, as well as other significant 

12 initiatives conducted by the Bureau, during the pre13 ceding year and the plan of the Bureau for rules, or14 ders, or other initiatives to be undertaken during the 

15 upcoming period; 

16 (4) an analysis of complaints about consumer 

17 financial products or services that the Bureau has 

18 received and collected in its central database on 

19 complaints during the preceding year; 

20 (5) a list, with a brief statement of the issues, 

21 of the public supervisory and enforcement actions to 

22 which the Bureau was a party during the preceding 

23 year; 

24 (6) the actions taken regarding rules, orders, 

25 and supervisory actions with respect to covered perVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01222 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1223 

•S 3217 AMDT 3739 

1 sons which are not credit unions or depository insti2 tutions; 

3 (7) an assessment of significant actions by 

4 State attorneys general or State regulators relating 

5 to Federal consumer financial law; and 

6 (8) an analysis of the efforts of the Bureau to 

7 fulfill the fair lending mission of the Bureau. 

8 SEC. 1017. FUNDING; PENALTIES AND FINES. 

9 (a) TRANSFER OF FUNDS FROM BOARD OF GOV10 ERNORS.— 

11 (1) IN GENERAL.—Each year (or quarter of 

12 such year), beginning on the designated transfer 

13 date, and each quarter thereafter, the Board of Gov14 ernors shall transfer to the Bureau from the com15 bined earnings of the Federal Reserve System, the 

16 amount determined by the Director to be reasonably 

17 necessary to carry out the authorities of the Bureau 

18 under Federal consumer financial law, taking into 

19 account such other sums made available to the Bu20 reau from the preceding year (or quarter of such 

21 year). 

22 (2) FUNDING CAP.— 

23 (A) IN GENERAL.—Notwithstanding para24 graph (1), and in accordance with this para25 graph, the amount that shall be transferred to 


sroberts on DSKH9S0YB1PROD with BILLS
1224 

•S 3217 AMDT 3739 

1 the Bureau in each fiscal year shall not exceed 

2 a fixed percentage of the total operating ex3 penses of the Federal Reserve System, as re4 ported in the Annual Report, 2009, of the 

5 Board of Governors, equal to— 

6 (i) 10 percent of such expenses in fis7 cal year 2011; 

8 (ii) 11 percent of such expenses in fis9 cal year 2012; and 

10 (iii) 12 percent of such expenses in 

11 fiscal year 2013, and in each year there12 after. 

13 (B) AMOUNT ADJUSTED FOR INFLA14 TION.—The dollar amount referred to in sub15 paragraph (A)(iii) shall be adjusted annually, 

16 using the percent by which the average urban 

17 consumer price index for the quarter preceding 

18 the date of the payment differs from the aver19 age of that index for the same quarter in the 

20 prior year. 

21 (3) TRANSITION PERIOD.—Beginning on the 

22 date of enactment of this Act and until the des23 ignated transfer date, the Board of Governors shall 

24 transfer to the Bureau the amount estimated by the 

25 Secretary needed to carry out the authorities grantVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01224 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1225 

•S 3217 AMDT 3739 

1 ed to the Bureau under Federal consumer financial 

2 law, from the date of enactment of this Act until the 

3 designated transfer date. 

4 (4) BUDGET AND FINANCIAL MANAGEMENT.— 

5 (A) FINANCIAL OPERATING PLANS AND

6 FORECASTS.—The Director shall provide to the 

7 Director of the Office of Management and 

8 Budget copies of the financial operating plans 

9 and forecasts of the Director, as prepared by 

10 the Director in the ordinary course of the oper11 ations of the Bureau, and copies of the quar12 terly reports of the financial condition and re13 sults of operations of the Bureau, as prepared 

14 by the Director in the ordinary course of the 

15 operations of the Bureau. 

16 (B) FINANCIAL STATEMENTS.—The Bu17 reau shall prepare annually a statement of— 

18 (i) assets and liabilities and surplus or 

19 deficit; 

20 (ii) income and expenses; and 

21 (iii) sources and application of funds. 

22 (C) FINANCIAL MANAGEMENT SYSTEMS.— 

23 The Bureau shall implement and maintain fi24 nancial management systems that comply sub25 stantially with Federal financial management 


sroberts on DSKH9S0YB1PROD with BILLS
1226 

•S 3217 AMDT 3739 

1 systems requirements and applicable Federal 

2 accounting standards. 

3 (D) ASSERTION OF INTERNAL CON4 TROLS.—The Director shall provide to the 

5 Comptroller General of the United States an as6 sertion as to the effectiveness of the internal 

7 controls that apply to financial reporting by the 

8 Bureau, using the standards established in sec9 tion 3512(c) of title 31, United States Code. 

10 (E) RULE OF CONSTRUCTION.—This sub11 section may not be construed as implying any 

12 obligation on the part of the Director to consult 

13 with or obtain the consent or approval of the 

14 Director of the Office of Management and 

15 Budget with respect to any report, plan, fore16 cast, or other information referred to in sub17 paragraph (A) or any jurisdiction or oversight 

18 over the affairs or operations of the Bureau. 

19 (5) AUDIT OF THE BUREAU.— 

20 (A) IN GENERAL.—The Comptroller Gen21 eral shall annually audit the financial trans22 actions of the Bureau in accordance with the 

23 United States generally accepted government 

24 auditing standards, as may be prescribed by the 

25 Comptroller General of the United States. The 


sroberts on DSKH9S0YB1PROD with BILLS
1227 

•S 3217 AMDT 3739 

1 audit shall be conducted at the place or places 

2 where accounts of the Bureau are normally 

3 kept. The representatives of the Government 

4 Accountability Office shall have access to the 

5 personnel and to all books, accounts, docu6 ments, papers, records (including electronic 

7 records), reports, files, and all other papers, 

8 automated data, things, or property belonging 

9 to or under the control of or used or employed 

10 by the Bureau pertaining to its financial trans11 actions and necessary to facilitate the audit, 

12 and such representatives shall be afforded full 

13 facilities for verifying transactions with the bal14 ances or securities held by depositories, fiscal 

15 agents, and custodians. All such books, ac16 counts, documents, records, reports, files, pa17 pers, and property of the Bureau shall remain 

18 in possession and custody of the Bureau. The 

19 Comptroller General may obtain and duplicate 

20 any such books, accounts, documents, records, 

21 working papers, automated data and files, or 

22 other information relevant to such audit with23 out cost to the Comptroller General, and the 

24 right of access of the Comptroller General to 

25 such information shall be enforceable pursuant 


sroberts on DSKH9S0YB1PROD with BILLS
1228 

•S 3217 AMDT 3739 

1 to section 716(c) of title 31, United States 

2 Code. 

3 (B) REPORT.—The Comptroller General 

4 shall submit to the Congress a report of each 

5 annual audit conducted under this subsection. 

6 The report to the Congress shall set forth the 

7 scope of the audit and shall include the state8 ment of assets and liabilities and surplus or 

9 deficit, the statement of income and expenses, 

10 the statement of sources and application of 

11 funds, and such comments and information as 

12 may be deemed necessary to inform Congress of 

13 the financial operations and condition of the 

14 Bureau, together with such recommendations 

15 with respect thereto as the Comptroller General 

16 may deem advisable. A copy of each report shall 

17 be furnished to the President and to the Bu18 reau at the time submitted to the Congress. 

19 (C) ASSISTANCE AND COSTS.—For the 

20 purpose of conducting an audit under this sub21 section, the Comptroller General may, in the 

22 discretion of the Comptroller General, employ 

23 by contract, without regard to section 3709 of 

24 the Revised Statutes of the United States (41 

25 U.S.C. 5), professional services of firms and orVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01228 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1229 

•S 3217 AMDT 3739 

1 ganizations of certified public accountants for 

2 temporary periods or for special purposes. Upon 

3 the request of the Comptroller General, the Di4 rector of the Bureau shall transfer to the Gov5 ernment Accountability Office from funds avail6 able, the amount requested by the Comptroller 

7 General to cover the full costs of any audit and 

8 report conducted by the Comptroller General. 

9 The Comptroller General shall credit funds 

10 transferred to the account established for sala11 ries and expenses of the Government Account12 ability Office, and such amount shall be avail13 able upon receipt and without fiscal year limita14 tion to cover the full costs of the audit and re15 port. 

16 (b) CONSUMER FINANCIAL PROTECTION FUND.— 

17 (1) SEPARATE FUND IN FEDERAL RESERVE

18 BOARD ESTABLISHED.—There is established in the 

19 Federal Reserve Board a separate fund, to be known 

20 as the ‘‘Consumer Financial Protection Fund’’ (re21 ferred to in this section as the ‘‘Bureau Fund’’). 

22 (2) FUND RECEIPTS.—All amounts transferred 

23 to the Bureau under subsection (a) shall be depos24 ited into the Bureau Fund. 

25 (3) INVESTMENT AUTHORITY.— 


sroberts on DSKH9S0YB1PROD with BILLS
1230 

•S 3217 AMDT 3739 

1 (A) AMOUNTS IN BUREAU FUND MAY BE

2 INVESTED.—The Bureau may request the 

3 Board of Governors to invest the portion of the 

4 Bureau Fund that is not, in the judgment of 

5 the Bureau, required to meet the current needs 

6 of the Bureau. 

7 (B) ELIGIBLE INVESTMENTS.—Invest8 ments authorized by this paragraph shall be 

9 made by the Board of Governors in obligations 

10 of the United States or obligations that are 

11 guaranteed as to principal and interest by the 

12 United States, with maturities suitable to the 

13 needs of the Bureau Fund, as determined by 

14 the Bureau. 

15 (C) INTEREST AND PROCEEDS CRED16 ITED.—The interest on, and the proceeds from 

17 the sale or redemption of, any obligations held 

18 in the Bureau Fund shall be credited to the 

19 Bureau Fund. 

20 (c) USE OF FUNDS.— 

21 (1) IN GENERAL.—Funds obtained by, trans22 ferred to, or credited to the Bureau Fund shall be 

23 immediately available to the Bureau and under the 

24 control of the Director, and shall remain available 

25 until expended, to pay the expenses of the Bureau 


sroberts on DSKH9S0YB1PROD with BILLS
1231 

•S 3217 AMDT 3739 

1 in carrying out its duties and responsibilities. The 

2 compensation of the Director and other employees of 

3 the Bureau and all other expenses thereof may be 

4 paid from, obtained by, transferred to, or credited to 

5 the Bureau Fund under this section. 

6 (2) FUNDS THAT ARE NOT GOVERNMENT

7 FUNDS.—Funds obtained by or transferred to the 

8 Bureau Fund shall not be construed to be Govern9 ment funds or appropriated monies. 

10 (3) AMOUNTS NOT SUBJECT TO APPORTION11 MENT.—Notwithstanding any other provision of law, 

12 amounts in the Bureau Fund and in the Civil Pen13 alty Fund established under subsection (d) shall not 

14 be subject to apportionment for purposes of chapter 

15 15 of title 31, United States Code, or under any 

16 other authority. 

17 (d) PENALTIES AND FINES.— 

18 (1) ESTABLISHMENT OF VICTIMS RELIEF

19 FUND.—There is established in the Federal Reserve 

20 Board a fund to be known as the ‘‘Consumer Finan21 cial Protection Civil Penalty Fund’’ (referred to in 

22 this subsection as the ‘‘Civil Penalty Fund’’). If the 

23 Bureau obtains a civil penalty against any person in 

24 any judicial or administrative action under Federal 

25 consumer financial laws, the Bureau shall deposit 


sroberts on DSKH9S0YB1PROD with BILLS
1232 

•S 3217 AMDT 3739 

1 into the Civil Penalty Fund, the amount of the pen2 alty collected. 

3 (2) PAYMENT TO VICTIMS.—Amounts in the 

4 Civil Penalty Fund shall be available to the Bureau, 

5 without fiscal year limitation, for payments to the 

6 victims of activities for which civil penalties have 

7 been imposed under the Federal consumer financial 

8 laws. To the extent such victims cannot be located 

9 or such payments are otherwise not practicable, the 

10 Bureau may use such funds for the purpose of con11 sumer education and financial literacy programs. 

12 SEC. 1018. EFFECTIVE DATE. 

13 This subtitle shall become effective on the date of en14 actment of this Act. 

15 Subtitle B—General Powers of the 

16 Bureau 

17 SEC. 1021. PURPOSE, OBJECTIVES, AND FUNCTIONS. 

18 (a) PURPOSE.—The Bureau shall seek to implement 

19 and, where applicable, enforce Federal consumer financial 

20 law consistently for the purpose of ensuring that markets 

21 for consumer financial products and services are fair, 

22 transparent, and competitive. 

23 (b) OBJECTIVES.—The Bureau is authorized to exer24 cise its authorities under Federal consumer financial law 


sroberts on DSKH9S0YB1PROD with BILLS
1233 

•S 3217 AMDT 3739 

1 for the purposes of ensuring that, with respect to con2 sumer financial products and services— 

3 (1) consumers are provided with timely and un4 derstandable information to make responsible deci5 sions about financial transactions; 

6 (2) consumers are protected from unfair, decep7 tive, or abusive acts and practices and from dis8 crimination; 

9 (3) outdated, unnecessary, or unduly burden10 some regulations are regularly identified and ad11 dressed in order to reduce unwarranted regulatory 

12 burdens; 

13 (4) Federal consumer financial law is enforced 

14 consistently, without regard to the status of a person 

15 as a depository institution, in order to promote fair 

16 competition; and 

17 (5) markets for consumer financial products 

18 and services operate transparently and efficiently to 

19 facilitate access and innovation. 

20 (c) FUNCTIONS.—The primary functions of the Bu21 reau are— 

22 (1) conducting financial education programs; 

23 (2) collecting, investigating, and responding to 

24 consumer complaints; 


sroberts on DSKH9S0YB1PROD with BILLS
1234 

•S 3217 AMDT 3739 

1 (3) collecting, researching, monitoring, and 

2 publishing information relevant to the functioning of 

3 markets for consumer financial products and serv4 ices to identify risks to consumers and the proper 

5 functioning of such markets; 

6 (4) subject to sections 1024 through 1026, su7 pervising covered persons for compliance with Fed8 eral consumer financial law, and taking appropriate 

9 enforcement action to address violations of Federal 

10 consumer financial law; 

11 (5) issuing rules, orders, and guidance imple12 menting Federal consumer financial law; and 

13 (6) performing such support activities as may 

14 be necessary or useful to facilitate the other func15 tions of the Bureau. 

16 SEC. 1022. RULEMAKING AUTHORITY. 

17 (a) IN GENERAL.—The Bureau is authorized to exer18 cise its authorities under Federal consumer financial law 

19 to administer, enforce, and otherwise implement the provi20 sions of Federal consumer financial law. 

21 (b) RULEMAKING, ORDERS, AND GUIDANCE.— 

22 (1) GENERAL AUTHORITY.—The Director may 

23 prescribe rules and issue orders and guidance, as 

24 may be necessary or appropriate to enable the Bu25 reau to administer and carry out the purposes and 


sroberts on DSKH9S0YB1PROD with BILLS
1235 

•S 3217 AMDT 3739 

1 objectives of the Federal consumer financial laws, 

2 and to prevent evasions thereof. 

3 (2) STANDARDS FOR RULEMAKING.—In pre4 scribing a rule under the Federal consumer financial 

5 laws— 

6 (A) the Bureau shall consider the potential 

7 benefits and costs to consumers and covered 

8 persons, including the potential reduction of ac9 cess by consumers to consumer financial prod10 ucts or services resulting from such rule; 

11 (B) the Bureau shall consult with the ap12 propriate prudential regulators or other Federal 

13 agencies prior to proposing a rule and during 

14 the comment process regarding consistency with 

15 prudential, market, or systemic objectives ad16 ministered by such agencies; and 

17 (C) if, during the consultation process de18 scribed in subparagraph (B), a prudential regu19 lator provides the Bureau with a written objec20 tion to the proposed rule of the Bureau or a 

21 portion thereof, the Bureau shall include in the 

22 adopting release a description of the objection 

23 and the basis for the Bureau decision, if any, 

24 regarding such objection, except that nothing in 

25 this clause shall be construed as altering or limVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01235 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1236 

•S 3217 AMDT 3739 

1 iting the procedures under section 1023 that 

2 may apply to any rule prescribed by the Bu3 reau. 

4 (3) EXEMPTIONS.— 

5 (A) IN GENERAL.—The Bureau, by rule, 

6 may conditionally or unconditionally exempt 

7 any class of covered persons, service providers, 

8 or consumer financial products or services, from 

9 any provision of this title, or from any rule 

10 issued under this title, as the Bureau deter11 mines necessary or appropriate to carry out the 

12 purposes and objectives of this title, taking into 

13 consideration the factors in subparagraph (B). 

14 (B) FACTORS.—In issuing an exemption, 

15 as permitted under subparagraph (A), the Bu16 reau shall, as appropriate, take into consider17 ation— 

18 (i) the total assets of the class of cov19 ered persons; 

20 (ii) the volume of transactions involv21 ing consumer financial products or services 

22 in which the class of covered persons en23 gages; and 

24 (iii) existing provisions of law which 

25 are applicable to the consumer financial 


sroberts on DSKH9S0YB1PROD with BILLS
1237 

•S 3217 AMDT 3739 

1 product or service and the extent to which 

2 such provisions provide consumers with 

3 adequate protections. 

4 (4) EXCLUSIVE RULEMAKING AUTHORITY.— 

5 Notwithstanding any other provisions of Federal 

6 law, to the extent that a provision of Federal con7 sumer financial law authorizes the Bureau and an8 other Federal agency to issue regulations under that 

9 provision of law for purposes of assuring compliance 

10 with Federal consumer financial law and any regula11 tions thereunder, the Bureau shall have the exclusive 

12 authority to prescribe rules subject to those provi13 sions of law. 

14 (c) MONITORING.— 

15 (1) IN GENERAL.—In order to support its rule16 making and other functions, the Bureau shall mon17 itor for risks to consumers in the offering or provi18 sion of consumer financial products or services, in19 cluding developments in markets for such products 

20 or services. 

21 (2) CONSIDERATIONS.—In allocating its re22 sources to perform the monitoring required by this 

23 section, the Bureau may consider, among other fac24 tors— 


sroberts on DSKH9S0YB1PROD with BILLS
1238 

•S 3217 AMDT 3739 

1 (A) likely risks and costs to consumers as2 sociated with buying or using a type of con3 sumer financial product or service; 

4 (B) understanding by consumers of the 

5 risks of a type of consumer financial product or 

6 service; 

7 (C) the legal protections applicable to the 

8 offering or provision of a consumer financial 

9 product or service, including the extent to which 

10 the law is likely to adequately protect con11 sumers; 

12 (D) rates of growth in the offering or pro13 vision of a consumer financial product or serv14 ice; 

15 (E) the extent, if any, to which the risks 

16 of a consumer financial product or service may 

17 disproportionately affect traditionally under18 served consumers; or 

19 (F) the types, number, and other pertinent 

20 characteristics of covered persons that offer or 

21 provide the consumer financial product or serv22 ice. 

23 (3) REPORTS.—The Bureau shall publish not 

24 fewer than 1 report of significant findings of its 

25 monitoring required by this subsection in each calVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01238 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1239 

•S 3217 AMDT 3739 

1 endar year, beginning with the first calendar year 

2 that begins at least 1 year after the designated 

3 transfer date. 

4 (4) COLLECTION OF INFORMATION.—In con5 ducting research on the offering and provision of 

6 consumer financial products or services, the Bureau 

7 shall have the authority to gather information from 

8 time to time regarding the organization, business 

9 conduct, markets, and activities of persons operating 

10 in consumer financial services markets. In order to 

11 gather such information, the Bureau may— 

12 (A) gather and compile information from 

13 examination reports concerning covered persons 

14 or service providers, assessment of consumer 

15 complaints, surveys, and interviews of covered 

16 persons and consumers, and review of available 

17 databases; 

18 (B) require persons to file with the Bu19 reau, under oath or otherwise, in such form and 

20 within such reasonable period of time as the 

21 Bureau may prescribe, by rule or order, annual 

22 or special reports, or answers in writing to spe23 cific questions, furnishing such information as 

24 the Bureau may require; and 


sroberts on DSKH9S0YB1PROD with BILLS
1240 

•S 3217 AMDT 3739 

1 (C) make public such information obtained 

2 by the Bureau under this section, as is in the 

3 public interest in reports or otherwise in the 

4 manner best suited for public information and 

5 use. 

6 (5) CONFIDENTIALITY RULES.—The Bureau 

7 shall prescribe rules regarding the confidential treat8 ment of information obtained from persons in con9 nection with the exercise of its authorities under 

10 Federal consumer financial law. 

11 (A) ACCESS BY THE BUREAU TO REPORTS

12 OF OTHER REGULATORS.— 

13 (i) EXAMINATION AND FINANCIAL

14 CONDITION REPORTS.—Upon providing 

15 reasonable assurances of confidentiality, 

16 the Bureau shall have access to any report 

17 of examination or financial condition made 

18 by a prudential regulator or other Federal 

19 agency having jurisdiction over a covered 

20 person or service provider, and to all revi21 sions made to any such report. 

22 (ii) PROVISION OF OTHER REPORTS

23 TO THE BUREAU.—In addition to the re24 ports described in clause (i), a prudential 

25 regulator or other Federal agency having 


sroberts on DSKH9S0YB1PROD with BILLS
1241 

•S 3217 AMDT 3739 

1 jurisdiction over a covered person or serv2 ice provider may, in its discretion, furnish 

3 to the Bureau any other report or other 

4 confidential supervisory information con5 cerning any insured depository institution, 

6 credit union, or other entity examined by 

7 such agency under authority of any provi8 sion of Federal law. 

9 (B) ACCESS BY OTHER REGULATORS TO

10 REPORTS OF THE BUREAU.— 

11 (i) EXAMINATION REPORTS.—Upon 

12 providing reasonable assurances of con13 fidentiality, a prudential regulator, a State 

14 regulator, or any other Federal agency 

15 having jurisdiction over a covered person 

16 or service provider shall have access to any 

17 report of examination made by the Bureau 

18 with respect to such person, and to all re19 visions made to any such report. 

20 (ii) PROVISION OF OTHER REPORTS

21 TO OTHER REGULATORS.—In addition to 

22 the reports described in clause (i), the Bu23 reau may, in its discretion, furnish to a 

24 prudential regulator or other agency hav25 ing jurisdiction over a covered person or 


sroberts on DSKH9S0YB1PROD with BILLS
1242 

•S 3217 AMDT 3739 

1 service provider any other report or other 

2 confidential supervisory information con3 cerning such person examined by the Bu4 reau under the authority of any other pro5 vision of Federal law. 

6 (6) PRIVACY CONSIDERATIONS.—In collecting 

7 information from any person, publicly releasing in8 formation held by the Bureau, or requiring covered 

9 persons to publicly report information, the Bureau 

10 shall take steps to ensure that proprietary, personal, 

11 or confidential consumer information that is pro12 tected from public disclosure under section 552(b) or 

13 552a of title 5, United States Code, or any other 

14 provision of law, is not made public under this title. 

15 (d) ASSESSMENT OF SIGNIFICANT RULES.— 

16 (1) IN GENERAL.—The Bureau shall conduct 

17 an assessment of each significant rule or order 

18 adopted by the Bureau under Federal consumer fi19 nancial law. The assessment shall address, among 

20 other relevant factors, the effectiveness of the rule or 

21 order in meeting the purposes and objectives of this 

22 title and the specific goals stated by the Bureau. 

23 The assessment shall reflect available evidence and 

24 any data that the Bureau reasonably may collect. 


sroberts on DSKH9S0YB1PROD with BILLS
1243 

•S 3217 AMDT 3739 

1 (2) REPORTS.—The Bureau shall publish a re2 port of its assessment under this subsection not 

3 later than 5 years after the effective date of the sub4 ject rule or order. 

5 (3) PUBLIC COMMENT REQUIRED.—Before pub6 lishing a report of its assessment, the Bureau shall 

7 invite public comment on recommendations for modi8 fying, expanding, or eliminating the newly adopted 

9 significant rule or order. 

10 (e) INFORMATION GATHERING.—In conducting any 

11 monitoring or assessment required by this section, the Bu12 reau may gather information through a variety of meth13 ods, including by conducting surveys or interviews of con14 sumers. 

15 SEC. 1023. REVIEW OF BUREAU REGULATIONS. 

16 (a) REVIEW OF BUREAU REGULATIONS.—On the pe17 tition of a member agency of the Council, the Council may 

18 set aside a final regulation prescribed by the Bureau, or 

19 any provision thereof, if the Council decides, in accordance 

20 with subsection (c), that the regulation or provision would 

21 put the safety and soundness of the United States banking 

22 system or the stability of the financial system of the 

23 United States at risk. 

24 (b) PETITION.— 


sroberts on DSKH9S0YB1PROD with BILLS
1244 

•S 3217 AMDT 3739 

1 (1) PROCEDURE.—An agency represented by a 

2 member of the Council may petition the Council, in 

3 writing, and in accordance with rules prescribed pur4 suant to subsection (f), to stay the effectiveness of, 

5 or set aside, a regulation if the member agency filing 

6 the petition— 

7 (A) has in good faith attempted to work 

8 with the Bureau to resolve concerns regarding 

9 the effect of the rule on the safety and sound10 ness of the United States banking system or 

11 the stability of the financial system of the 

12 United States; and 

13 (B) files the petition with the Council not 

14 later than 10 days after the date on which the 

15 regulation has be 

16 (C) en published in the Federal Register. 

17 (2) PUBLICATION.—Any petition filed with the 

18 Council under this section shall be published in the 

19 Federal Register and transmitted contemporaneously 

20 with filing to the Committee on Banking, Housing, 

21 and Urban Affairs of the Senate and the Committee 

22 on Financial Services of the House of Representa23 tives. 

24 (c) STAYS AND SET ASIDES.— 

25 (1) STAY.— 


sroberts on DSKH9S0YB1PROD with BILLS
1245 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—Upon the request of 

2 any member agency, the Chairperson of the 

3 Council may stay the effectiveness of a regula4 tion for the purpose of allowing appropriate 

5 consideration of the petition by the Council. 

6 (B) EXPIRATION.—A stay issued under 

7 this paragraph shall expire on the earlier of— 

8 (i) 90 days after the date of filing of 

9 the petition under subsection (b); or 

10 (ii) the date on which the Council 

11 makes a decision under paragraph (3). 

12 (2) NO ADVERSE INFERENCE.—After the expi13 ration of any stay imposed under this section, no in14 ference shall be drawn regarding the validity or en15 forceability of a regulation which was the subject of 

16 the petition. 

17 (3) VOTE.— 

18 (A) IN GENERAL.—The decision to issue a 

19 stay of, or set aside, any regulation under this 

20 section shall be made only with the affirmative 

vote in accordance with subparagraph (B) of 2 21 ⁄3

22 of the members of the Council then serving. 

23 (B) AUTHORIZATION TO VOTE.—A member 

24 of the Council may vote to stay the effectiveness 

25 of, or set aside, a final regulation prescribed by 


sroberts on DSKH9S0YB1PROD with BILLS
1246 

•S 3217 AMDT 3739 

1 the Bureau only if the agency or department 

2 represented by that member has— 

3 (i) considered any relevant informa4 tion provided by the agency submitting the 

5 petition and by the Bureau; and 

6 (ii) made an official determination, at 

7 a public meeting where applicable, that the 

8 regulation which is the subject of the peti9 tion would put the safety and soundness of 

10 the United States banking system or the 

11 stability of the financial system of the 

12 United States at risk. 

13 (4) DECISIONS TO SET ASIDE.— 

14 (A) EFFECT OF DECISION.—A decision by 

15 the Council to set aside a regulation prescribed 

16 by the Bureau, or provision thereof, shall 

17 render such regulation, or provision thereof, un18 enforceable. 

19 (B) TIMELY ACTION REQUIRED.—The 

20 Council may not issue a decision to set aside a 

21 regulation, or provision thereof, which is the 

22 subject of a petition under this section after the 

23 expiration of the later of— 


sroberts on DSKH9S0YB1PROD with BILLS
1247 

•S 3217 AMDT 3739 

1 (i) 45 days following the date of filing 

2 of the petition, unless a stay is issued 

3 under paragraph (1); or 

4 (ii) the expiration of a stay issued by 

5 the Council under this section. 

6 (C) SEPARATE AUTHORITY.—The issuance 

7 of a stay under this section does not affect the 

8 authority of the Council to set aside a regula9 tion. 

10 (5) DISMISSAL DUE TO INACTION.—A petition 

11 under this section shall be deemed dismissed if the 

12 Council has not issued a decision to set aside a regu13 lation, or provision thereof, within the period for 

14 timely action under paragraph (4)(B). 

15 (6) PUBLICATION OF DECISION.—Any decision 

16 under this subsection to issue a stay of, or set aside, 

17 a regulation or provision thereof shall be published 

18 by the Council in the Federal Register as soon as 

19 practicable after the decision is made, with an expla20 nation of the reasons for the decision. 

21 (7) RULEMAKING PROCEDURES INAPPLI22 CABLE.—The notice and comment procedures under 

23 section 553 of title 5, United States Code, shall not 

24 apply to any decision under this section of the Coun25 cil to issue a stay of, or set aside, a regulation. 


sroberts on DSKH9S0YB1PROD with BILLS
1248 

•S 3217 AMDT 3739 

1 (8) JUDICIAL REVIEW OF DECISIONS BY THE

2 COUNCIL.—A decision by the Council to set aside a 

3 regulation prescribed by the Bureau, or provision 

4 thereof, shall be subject to review under chapter 7 

5 of title 5, United States Code. 

6 (d) APPLICATION OF OTHER LAW.—Nothing in this 

7 section shall be construed as altering, limiting, or restrict8 ing the application of any other provision of law, except 

9 as otherwise specifically provided in this section, including 

10 chapter 5 and chapter 7 of title 5, United States Code, 

11 to a regulation which is the subject of a petition filed 

12 under this section. 

13 (e) SAVINGS CLAUSE.—Nothing in this section shall 

14 be construed as limiting or restricting the Bureau from 

15 engaging in a rulemaking in accordance with applicable 

16 law. 

17 (f) IMPLEMENTING RULES.—The Council shall pre18 scribe procedural rules to implement this section. 

19 SEC. 1024. SUPERVISION OF NONDEPOSITORY COVERED 

20 PERSONS. 

21 (a) SCOPE OF COVERAGE.— 

22 (1) APPLICABILITY.—Notwithstanding any 

23 other provision of this title, and except as provided 

24 in paragraph (3), this section shall apply to any cov25 ered person who— 


sroberts on DSKH9S0YB1PROD with BILLS
1249 

•S 3217 AMDT 3739 

1 (A) offers or provides origination, broker2 age, or servicing of loans secured by real estate 

3 for use by consumers primarily for personal, 

4 family, or household purposes, or loan modifica5 tion or foreclosure relief services in connection 

6 with such loans; or 

7 (B) is a larger participant of a market for 

8 other consumer financial products or services, 

9 as defined by rule in accordance with paragraph 

10 (2). 

11 (2) RULEMAKING TO DEFINE COVERED PER12 SONS SUBJECT TO THIS SECTION.—The Bureau 

13 shall consult with the Federal Trade Commission 

14 prior to issuing a rule to define covered persons sub15 ject to this section, in accordance with paragraph 

16 (1)(B). The Bureau shall issue its initial rule within 

17 1 year of the designated transfer date. 

18 (3) RULES OF CONSTRUCTION.— 

19 (A) CERTAIN PERSONS EXCLUDED.—This 

20 section shall not apply to persons described in 

21 section 1025(a) or 1026(a). 

22 (B) ACTIVITY LEVELS.—For purposes of 

23 computing activity levels under paragraph (1) 

24 or rules issued thereunder, activities of affili25 ated companies (other than insured depository 


sroberts on DSKH9S0YB1PROD with BILLS
1250 

•S 3217 AMDT 3739 

1 institutions or insured credit unions) shall be 

2 aggregated. 

3 (b) SUPERVISION.— 

4 (1) IN GENERAL.—The Bureau shall require re5 ports and conduct examinations on a periodic basis 

6 of persons described in subsection (a) for purposes 

7 of— 

8 (A) assessing compliance with the require9 ments of Federal consumer financial law; 

10 (B) obtaining information about the activi11 ties and compliance systems or procedures of 

12 such person; and 

13 (C) detecting and assessing risks to con14 sumers and to markets for consumer financial 

15 products and services. 

16 (2) RISK-BASED SUPERVISION PROGRAM.—The 

17 Bureau shall exercise its authority under paragraph 

18 (1) in a manner designed to ensure that such exer19 cise, with respect to persons described in subsection 

20 (a), is based on the assessment by the Bureau of the 

21 risks posed to consumers in the relevant product 

22 markets and geographic markets, and taking into 

23 consideration, as applicable— 

24 (A) the asset size of the covered person; 


sroberts on DSKH9S0YB1PROD with BILLS
1251 

•S 3217 AMDT 3739 

1 (B) the volume of transactions involving 

2 consumer financial products or services in 

3 which the covered person engages; 

4 (C) the risks to consumers created by the 

5 provision of such consumer financial products 

6 or services; 

7 (D) the extent to which such institutions 

8 are subject to oversight by State authorities for 

9 consumer protection; and 

10 (E) any other factors that the Bureau de11 termines to be relevant to a class of covered 

12 persons. 

13 (3) COORDINATION.—To minimize regulatory 

14 burden, the Bureau shall coordinate its supervisory 

15 activities with the supervisory activities conducted by 

16 prudential regulators and the State bank regulatory 

17 authorities, including establishing their respective 

18 schedules for examining persons described in sub19 section (a) and requirements regarding reports to be 

20 submitted by such persons. 

21 (4) USE OF EXISTING REPORTS.—The Bureau 

22 shall, to the fullest extent possible, use— 

23 (A) reports pertaining to persons described 

24 in subsection (a) that have been provided or reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01251 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1252 

•S 3217 AMDT 3739 

1 quired to have been provided to a Federal or 

2 State agency; and 

3 (B) information that has been reported 

4 publicly. 

5 (5) PRESERVATION OF AUTHORITY.—Nothing 

6 in this title may be construed as limiting the author7 ity of the Director to require reports from persons 

8 described in subsection (a), as permitted under para9 graph (1), regarding information owned or under the 

10 control of such person, regardless of whether such 

11 information is maintained, stored, or processed by 

12 another person. 

13 (6) REPORTS OF TAX LAW NONCOMPLIANCE.— 

14 The Bureau shall provide the Commissioner of In15 ternal Revenue with any report of examination or re16 lated information identifying possible tax law non17 compliance. 

18 (7) REGISTRATION, RECORDKEEPING, AND

19 OTHER REQUIREMENTS FOR CERTAIN PERSONS.— 

20 (A) IN GENERAL.—The Bureau shall pre21 scribe rules to facilitate supervision of persons 

22 described in subsection (a) and assessment and 

23 detection of risks to consumers. 

24 (B) REGISTRATION.— 


sroberts on DSKH9S0YB1PROD with BILLS
1253 

•S 3217 AMDT 3739 

1 (i) IN GENERAL.—The Bureau shall 

2 prescribe rules regarding registration re3 quirements for persons described in sub4 section (a). 

5 (ii) EXCEPTION FOR RELATED PER6 SONS.—The Bureau may not impose re7 quirements under this section regarding 

8 the registration of a related person. 

9 (iii) REGISTRATION INFORMATION.— 

10 Subject to rules prescribed by the Bureau, 

11 the Bureau shall publicly disclose the reg12 istration information about persons de13 scribed in subsection (a) to facilitate the 

14 ability of consumers to identify persons de15 scribed in subsection (a) registered with 

16 the Bureau. 

17 (C) RECORDKEEPING.—The Bureau may 

18 require a person described in subsection (a), to 

19 generate, provide, or retain records for the pur20 poses of facilitating supervision of such persons 

21 and assessing and detecting risks to consumers. 

22 (D) REQUIREMENTS CONCERNING OBLIGA23 TIONS.—The Bureau may prescribe rules re24 garding a person described in subsection (a), to 

25 ensure that such persons are legitimate entities 


sroberts on DSKH9S0YB1PROD with BILLS
1254 

•S 3217 AMDT 3739 

1 and are able to perform their obligations to con2 sumers. Such requirements may include back3 ground checks for principals, officers, directors, 

4 or key personnel and bonding or other appro5 priate financial requirements. 

6 (E) CONSULTATION WITH STATE AGEN7 CIES.—In developing and implementing require8 ments under this paragraph, the Bureau shall 

9 consult with State agencies regarding require10 ments or systems (including coordinated or 

11 combined systems for registration), where ap12 propriate. 

13 (c) EXCLUSIVE ENFORCEMENT AUTHORITY.— 

14 (1) THE BUREAU TO HAVE EXCLUSIVE EN15 FORCEMENT AUTHORITY.—To the extent that Fed16 eral law authorizes the Bureau and another Federal 

17 agency to enforce Federal consumer financial law, 

18 the Bureau shall have exclusive authority to enforce 

19 that Federal consumer financial law with respect to 

20 any person described in subsection (a)(1)(B). 

21 (2) REFERRAL.—Any Federal agency author22 ized to enforce a Federal consumer financial law de23 scribed in paragraph (1) may recommend in writing 

24 to the Bureau that the Bureau initiate an enforceVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01254 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1255 

•S 3217 AMDT 3739 

1 ment proceeding, as the Bureau is authorized by 

2 that Federal law or by this title. 

3 (3) COORDINATION WITH THE FEDERAL TRADE

4 COMMISSION.— 

5 (A) IN GENERAL.—The Bureau and the 

6 Federal Trade Commission shall coordinate en7 forcement actions for violations of Federal law 

8 regarding the offering or provision of consumer 

9 financial products or services by any covered 

10 person that is described in subsection (a)(1)(A), 

11 or service providers thereto. In carrying out this 

12 subparagraph, the agencies shall negotiate an 

13 agreement to establish procedures for such co14 ordination, including procedures for notice to 

15 the other agency, where feasible, prior to initi16 ating a civil action to enforce a Federal law re17 garding the offering or provision of consumer 

18 financial products or services. 

19 (B) CIVIL ACTIONS.—Whenever a civil ac20 tion has been filed by, or on behalf of, the Bu21 reau or the Federal Trade Commission for any 

22 violation of any provision of Federal law de23 scribed in subparagraph (A), or any regulation 

24 prescribed under such provision of law— 


sroberts on DSKH9S0YB1PROD with BILLS
1256 

•S 3217 AMDT 3739 

1 (i) the other agency may not, during 

2 the pendency of that action, institute a 

3 civil action under such provision of law 

4 against any defendant named in the com5 plaint in such pending action for any viola6 tion alleged in the complaint; and 

7 (ii) the Bureau or the Federal Trade 

8 Commission may intervene as a party in 

9 any such action brought by the other agen10 cy, and, upon intervening— 

11 (I) be heard on all matters aris12 ing in such enforcement action; and 

13 (II) file petitions for appeal in 

14 such actions. 

15 (C) AGREEMENT TERMS.—The terms of 

16 any agreement negotiated under subparagraph 

17 (A) may modify or supersede the provisions of 

18 subparagraph (B). 

19 (D) DEADLINE.—The agencies shall reach 

20 the agreement required under subparagraph (A) 

21 not later than 6 months after the designated 

22 transfer date. 

23 (d) EXCLUSIVE RULEMAKING AND EXAMINATION

24 AUTHORITY.—Notwithstanding any other provision of 

25 Federal law, to the extent that Federal law authorizes the 


sroberts on DSKH9S0YB1PROD with BILLS
1257 

•S 3217 AMDT 3739 

1 Bureau and another Federal agency to issue regulations 

2 or guidance, conduct examinations, or require reports 

3 from a person described in subsection (a) under such law 

4 for purposes of assuring compliance with Federal con5 sumer financial law and any regulations thereunder, the 

6 Bureau shall have the exclusive authority to prescribe 

7 rules, issue guidance, conduct examinations, require re8 ports, or issue exemptions with regard to a person de9 scribed in subsection (a), subject to those provisions of 

10 law. 

11 (e) SERVICE PROVIDERS.—A service provider to a 

12 person described in subsection (a) shall be subject to the 

13 authority of the Bureau under this section, to the same 

14 extent as if such service provider were engaged in a service 

15 relationship with a bank, and the Bureau were an appro16 priate Federal banking agency under section 7(c) of the 

17 Bank Service Company Act (12 U.S.C. 1867(c)). In con18 ducting any examination or requiring any report from a 

19 service provider subject to this subsection, the Bureau 

20 shall coordinate with the appropriate prudential regulator, 

21 as applicable. 

22 (f) PRESERVATION OF FARM CREDIT ADMINISTRA23 TION AUTHORITY.—No provision of this title may be con24 strued as modifying, limiting, or otherwise affecting the 

25 authority of the Farm Credit Administration. 


sroberts on DSKH9S0YB1PROD with BILLS
1258 

•S 3217 AMDT 3739 

1 SEC. 1025. SUPERVISION OF VERY LARGE BANKS, SAVINGS 

2 ASSOCIATIONS, AND CREDIT UNIONS. 

3 (a) SCOPE OF COVERAGE.— 

4 (1) APPLICABILITY.—This section shall apply 

5 to any covered person that is— 

6 (A) an insured depository institution with 

7 total assets of more than $10,000,000,000 and 

8 any affiliate thereof; or 

9 (B) an insured credit union with total as10 sets of more than $10,000,000,000 and any af11 filiate thereof. 

12 (2) RULE OF CONSTRUCTION.—For purposes of 

13 determining total assets under this section and sec14 tion 1026, the Bureau shall rely on the same regula15 tions and interim methodologies specified in section 

16 312(e). 

17 (b) SUPERVISION.— 

18 (1) IN GENERAL.—The Bureau shall require re19 ports and conduct examinations on a periodic basis 

20 of persons described in subsection (a) for purposes 

21 of— 

22 (A) assessing compliance with the require23 ments of Federal consumer financial laws; 

24 (B) obtaining information about the activi25 ties and compliance systems or procedures of 

26 such persons; and 


sroberts on DSKH9S0YB1PROD with BILLS
1259 

•S 3217 AMDT 3739 

1 (C) detecting and assessing risks to con2 sumers and to markets for consumer financial 

3 products and services. 

4 (2) COORDINATION.—To minimize regulatory 

5 burden, the Bureau shall coordinate its supervisory 

6 activities with the supervisory activities conducted by 

7 prudential regulators and the State bank regulatory 

8 authorities, including establishing their respective 

9 schedules for examining such persons described in 

10 subsection (a) and requirements regarding reports to 

11 be submitted by such persons. 

12 (3) USE OF EXISTING REPORTS.—The Bureau 

13 shall, to the fullest extent possible, use— 

14 (A) reports pertaining to a person de15 scribed in subsection (a) that have been pro16 vided or required to have been provided to a 

17 Federal or State agency; and 

18 (B) information that has been reported 

19 publicly. 

20 (4) PRESERVATION OF AUTHORITY.—Nothing 

21 in this title may be construed as limiting the author22 ity of the Director to require reports from a person 

23 described in subsection (a), as permitted under para24 graph (1), regarding information owned or under the 

25 control of such person, regardless of whether such 


sroberts on DSKH9S0YB1PROD with BILLS
1260 

•S 3217 AMDT 3739 

1 information is maintained, stored, or processed by 

2 another person. 

3 (5) REPORTS OF TAX LAW NONCOMPLIANCE.— 

4 The Bureau shall provide the Commissioner of In5 ternal Revenue with any report of examination or re6 lated information identifying possible tax law non7 compliance. 

8 (c) PRIMARY ENFORCEMENT AUTHORITY.— 

9 (1) THE BUREAU TO HAVE PRIMARY ENFORCE10 MENT AUTHORITY.—To the extent that the Bureau 

11 and another Federal agency are authorized to en12 force a Federal consumer financial law, the Bureau 

13 shall have primary authority to enforce that Federal 

14 consumer financial law with respect to any person 

15 described in subsection (a). 

16 (2) REFERRAL.—Any Federal agency, other 

17 than the Federal Trade Commission, that is author18 ized to enforce a Federal consumer financial law 

19 may recommend, in writing, to the Bureau that the 

20 Bureau initiate an enforcement proceeding with re21 spect to a person described in subsection (a), as the 

22 Bureau is authorized to do by that Federal con23 sumer financial law. 

24 (3) BACKUP ENFORCEMENT AUTHORITY OF

25 OTHER FEDERAL AGENCY.—If the Bureau does not, 


sroberts on DSKH9S0YB1PROD with BILLS
1261 

•S 3217 AMDT 3739 

1 before the end of the 120-day period beginning on 

2 the date on which the Bureau receives a rec3 ommendation under paragraph (2), initiate an en4 forcement proceeding, the other agency referred to 

5 in paragraph (2) may initiate an enforcement pro6 ceeding, as permitted by the subject provision of 

7 Federal law. 

8 (d) SERVICE PROVIDERS.—A service provider to a 

9 person described in subsection (a) shall be subject to the 

10 authority of the Bureau under this section, to the same 

11 extent as if the Bureau were an appropriate Federal bank12 ing agency under section 7(c) of the Bank Service Com13 pany Act 12 U.S.C. 1867(c). In conducting any examina14 tion or requiring any report from a service provider sub15 ject to this subsection, the Bureau shall coordinate with 

16 the appropriate prudential regulator. 

17 (e) SIMULTANEOUS AND COORDINATED SUPER18 VISORY ACTION.— 

19 (1) EXAMINATIONS.—A prudential regulator 

20 and the Bureau shall, with respect to each insured 

21 depository institution, insured credit union, or other 

22 covered person described in subsection (a) that is su23 pervised by the prudential regulator and the Bureau, 

24 respectively— 


sroberts on DSKH9S0YB1PROD with BILLS
1262 

•S 3217 AMDT 3739 

1 (A) coordinate the scheduling of examina2 tions of the insured depository institution, in3 sured credit union, or other covered person de4 scribed in subsection (a); 

5 (B) conduct simultaneous examinations of 

6 each insured depository institution, insured 

7 credit union, or other covered person described 

8 in subsection (a), unless such institution re9 quests examinations to be conducted separately; 

10 (C) share each draft report of examination 

11 with the other agency and permit the receiving 

12 agency a reasonable opportunity (which shall 

13 not be less than a period of 30 days after the 

14 date of receipt) to comment on the draft report 

15 before such report is made final; and 

16 (D) prior to issuing a final report of exam17 ination or taking supervisory action, take into 

18 consideration concerns, if any, raised in the 

19 comments made by the other agency. 

20 (2) COORDINATION WITH STATE BANK SUPER21 VISORS.—The Bureau shall pursue arrangements 

22 and agreements with State bank supervisors to co23 ordinate examinations, consistent with paragraph 

24 (1). 


sroberts on DSKH9S0YB1PROD with BILLS
1263 

•S 3217 AMDT 3739 

1 (3) AVOIDANCE OF CONFLICT IN SUPER2 VISION.— 

3 (A) REQUEST.—If the proposed super4 visory determinations of the Bureau and a pru5 dential regulator (in this section referred to col6 lectively as the ‘‘agencies’’) are conflicting, an 

7 insured depository institution, insured credit 

8 union, or other covered person described in sub9 section (a) may request the agencies to coordi10 nate and present a joint statement of coordi11 nated supervisory action. 

12 (B) JOINT STATEMENT.—The agencies 

13 shall provide a joint statement under subpara14 graph (A), not later than 30 days after the date 

15 of receipt of the request of the insured deposi16 tory institution, credit union, or covered person 

17 described in subsection (a). 

18 (4) APPEALS TO GOVERNING PANEL.— 

19 (A) IN GENERAL.—If the agencies do not 

20 resolve the conflict or issue a joint statement 

21 required by subparagraph (B), or if either of 

22 the agencies takes or attempts to take any su23 pervisory action relating to the request for the 

24 joint statement without the consent of the other 

25 agency, an insured depository institution, inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01263 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1264 

•S 3217 AMDT 3739 

1 sured credit union, or other covered person de2 scribed in subsection (a) may institute an ap3 peal to a governing panel, as provided in this 

4 subsection, not later than 30 days after the ex5 piration of the period during which a joint 

6 statement is required to be filed under para7 graph (3)(B). 

8 (B) COMPOSITION OF GOVERNING

9 PANEL.—The governing panel for an appeal 

10 under this paragraph shall be composed of— 

11 (i) a representative from the Bureau 

12 and a representative of the prudential reg13 ulator, both of whom— 

14 (I) have not participated in the 

15 material supervisory determinations 

16 under appeal; and 

17 (II) do not directly or indirectly 

18 report to the person who participated 

19 materially in the supervisory deter20 minations under appeal; and 

21 (ii) one individual representative, to 

22 be determined on a rotating basis, from 

23 among the Board of Governors, the Cor24 poration, the National Credit Union Ad25 ministration, and the Office of the CompVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01264 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1265 

•S 3217 AMDT 3739 

1 troller of the Currency, other than any 

2 agency involved in the subject dispute. 

3 (C) CONDUCT OF APPEAL.—In an appeal 

4 under this paragraph— 

5 (i) the insured depository institution, 

6 insured credit union, or other covered per7 son described in subsection (a)— 

8 (I) shall include in its appeal all 

9 the facts and legal arguments per10 taining to the matter; and 

11 (II) may, through counsel, em12 ployees, or representatives, appear be13 fore the governing panel in person or 

14 by telephone; and 

15 (ii) the governing panel— 

16 (I) may request the insured de17 pository institution, insured credit 

18 union, or other covered person de19 scribed in subsection (a), the Bureau, 

20 or the prudential regulator to produce 

21 additional information relevant to the 

22 appeal; and 

23 (II) by a majority vote of its 

24 members, shall provide a final deter25 mination, in writing, not later than 30 


sroberts on DSKH9S0YB1PROD with BILLS
1266 

•S 3217 AMDT 3739 

1 days after the date of filing of an 

2 informationally complete appeal, or 

3 such longer period as the panel and 

4 the insured depository institution, in5 sured credit union, or other covered 

6 person described in subsection (a) 

7 may jointly agree. 

8 (D) PUBLIC AVAILABILITY OF DETERMINA9 TIONS.—A governing panel shall publish all in10 formation contained in a determination by the 

11 governing panel, with appropriate redactions of 

12 information that would be subject to an exemp13 tion from disclosure under section 552 of title 

14 5, United States Code. 

15 (E) PROHIBITION AGAINST RETALIA16 TION.—The Bureau and the prudential regu17 lators shall prescribe rules to provide safe18 guards from retaliation against the insured de19 pository institution, insured credit union, or 

20 other covered person described in subsection (a) 

21 instituting an appeal under this paragraph, as 

22 well as their officers and employees. 

23 (F) LIMITATION.—The process provided in 

24 this paragraph shall not apply to a determina25 tion by a prudential regulator to appoint a conVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01266 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1267 

•S 3217 AMDT 3739 

1 servator or receiver for an insured depository 

2 institution or a liquidating agent for an insured 

3 credit union, as the case may be, or a decision 

4 to take action pursuant to section 38 of the 

5 Federal Deposit Insurance Act (12 U.S.C. 

6 1831o) or section 212 of the Federal Credit 

7 Union Act (112 U.S.C. 1790a), as applicable. 

8 (G) EFFECT ON OTHER AUTHORITY.— 

9 Nothing in this section shall modify or limit the 

10 authority of the Bureau to interpret, or take 

11 enforcement action under, any Federal con12 sumer financial law. 

13 SEC. 1026. OTHER BANKS, SAVINGS ASSOCIATIONS, AND 

14 CREDIT UNIONS. 

15 (a) SCOPE OF COVERAGE.—This section shall apply 

16 to any covered person that is— 

17 (1) an insured depository institution with total 

18 assets of $10,000,000,000 or less; or 

19 (2) an insured credit union with total assets of 

20 $10,000,000,000 or less. 

21 (b) REPORTS.—The Director may require reports 

22 from a person described in subsection (a), as necessary 

23 to support the role of the Bureau in implementing Federal 

24 consumer financial law, to support its examination activiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01267 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1268 

•S 3217 AMDT 3739 

1 ties under subsection (c), and to assess and detect risks 

2 to consumers and consumer financial markets. 

3 (1) USE OF EXISTING REPORTS.—The Bureau 

4 shall, to the fullest extent possible, use— 

5 (A) reports pertaining to a person de6 scribed in subsection (a) that have been pro7 vided or required to have been provided to a 

8 Federal or State agency; and 

9 (B) information that has been reported 

10 publicly. 

11 (2) PRESERVATION OF AUTHORITY.—Nothing 

12 in this subsection may be construed as limiting the 

13 authority of the Director from requiring from a per14 son described in subsection (a), as permitted under 

15 paragraph (1), information owned or under the con16 trol of such person, regardless of whether such infor17 mation is maintained, stored, or processed by an18 other person. 

19 (3) REPORTS OF TAX LAW NONCOMPLIANCE.— 

20 The Bureau shall provide the Commissioner of In21 ternal Revenue with any report of examination or re22 lated information identifying possible tax law non23 compliance. 

24 (c) EXAMINATIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1269 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—The Bureau may, at its dis2 cretion, include examiners on a sampling basis of the 

3 examinations performed by the prudential regulator 

4 of persons described in subsection (a). 

5 (2) AGENCY COORDINATION.—The prudential 

6 regulator shall— 

7 (A) provide all reports, records, and docu8 mentation related to the examination process 

9 for any institution included in the sample re10 ferred to in paragraph (1) to the Bureau on a 

11 timely and continual basis; 

12 (B) involve such Bureau examiner in the 

13 entire examination process for such person; and 

14 (C) consider input of the Bureau con15 cerning the scope of an examination, conduct of 

16 the examination, the contents of the examina17 tion report, the designation of matters requiring 

18 attention, and examination ratings. 

19 (d) ENFORCEMENT.— 

20 (1) IN GENERAL.—Except for requiring reports 

21 under subsection (b), the prudential regulator shall 

22 have exclusive authority to enforce compliance with 

23 respect to a person described in subsection (a). 

24 (2) COORDINATION WITH PRUDENTIAL REGU25 LATOR.— 


sroberts on DSKH9S0YB1PROD with BILLS
1270 

•S 3217 AMDT 3739 

1 (A) REFERRAL.—When the Bureau has 

2 reason to believe that a person described in sub3 section (a) has engaged in a material violation 

4 of a Federal consumer financial law, the Bu5 reau shall notify the prudential regulator in 

6 writing and recommend appropriate action to 

7 respond. 

8 (B) RESPONSE.—Upon receiving a rec9 ommendation under subparagraph (A), the pru10 dential regulator shall provide a written re11 sponse to the Bureau not later than 60 days 

12 thereafter. 

13 (e) SERVICE PROVIDERS.—A service provider to a 

14 substantial number of persons described in subsection (a) 

15 shall be subject to the authority of the Bureau under sec16 tion 1025 to the same extent as if the Bureau were an 

17 appropriate Federal bank agency under section 7(c) of the 

18 Bank Service Company Act (12 U.S.C. 1867(c)). When 

19 conducting any examination or requiring any report from 

20 a service provider subject to this subsection, the Bureau 

21 shall coordinate with the appropriate prudential regulator. 


sroberts on DSKH9S0YB1PROD with BILLS
1271 

•S 3217 AMDT 3739 

1 SEC. 1027. LIMITATIONS ON AUTHORITIES OF THE BUREAU; 

2 PRESERVATION OF AUTHORITIES. 

3 (a) EXCLUSION FOR MERCHANTS, RETAILERS, AND

4 OTHER SELLERS OF NONFINANCIAL GOODS OR SERV5 ICES.— 

6 (1) SALE OR BROKERAGE OF NONFINANCIAL

7 GOOD OR SERVICE.—The Bureau may not exercise 

8 any rulemaking, supervisory, enforcement or other 

9 authority under this title with respect to a person 

10 who is a merchant, retailer, or seller of any non11 financial good or service and is engaged in the sale 

12 or brokerage of such nonfinancial good or service, 

13 except to the extent that such person is engaged in 

14 offering or providing any consumer financial product 

15 or service, or is otherwise subject to any enumerated 

16 consumer law or any law for which authorities are 

17 transferred under subtitle F or H. 

18 (2) OFFERING OR PROVISION OF CERTAIN CON19 SUMER FINANCIAL PRODUCTS OR SERVICES IN CON20 NECTION WITH THE SALE OR BROKERAGE OF NON21 FINANCIAL GOOD OR SERVICE.— 

22 (A) IN GENERAL.—Except as provided in 

23 subparagraph (B), and subject to subparagraph 

24 (C), the Bureau may not exercise any rule25 making, supervisory, enforcement, or other au26 thority under this title with respect to a merVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01271 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1272 

•S 3217 AMDT 3739 

1 chant, retailer, or seller of nonfinancial goods or 

2 services who— 

3 (i) extends credit directly to a con4 sumer, in a case in which the good or serv5 ice being provided is not itself a consumer 

6 financial product or service (other than 

7 credit described in this subparagraph), ex8 clusively for the purpose of enabling that 

9 consumer to purchase such nonfinancial 

10 good or service directly from the merchant, 

11 retailer, or seller; 

12 (ii) directly, or through an agreement 

13 with another person, collects debt arising 

14 from credit extended as described in clause 

15 (i); or 

16 (iii) sells or conveys debt described in 

17 clause (i) that is delinquent or otherwise in 

18 default. 

19 (B) APPLICABILITY.—Subparagraph (A) 

20 does not apply to any credit transaction or col21 lection of debt, other than as described in sub22 paragraph (C), arising from a transaction de23 scribed in subparagraph (A)— 

24 (i) in which the merchant, retailer, or 

25 seller of nonfinancial goods or services asVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01272 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1273 

•S 3217 AMDT 3739 

1 signs, sells or otherwise conveys to another 

2 person such debt owed by the consumer 

3 (except for a sale of debt that is delinquent 

4 or otherwise in default, as described in 

5 subparagraph (A)(iii)); 

6 (ii) in which the credit extended ex7 ceeds the market value of the nonfinancial 

8 good or service provided, or the Bureau 

9 otherwise finds that the sale of the non10 financial good or service is done as a sub11 terfuge, so as to evade or circumvent the 

12 provisions of this title; or 

13 (iii) in which the merchant, retailer, 

14 or seller of nonfinancial goods or services 

15 regularly extends credit and the credit is— 

16 (I) subject to a finance charge; or 

17 (II) payable by written agree18 ment in more than 4 installments. 

19 (C) LIMITATION.—Notwithstanding sub20 paragraph (B), the Bureau may not exercise 

21 any rulemaking, supervisory, enforcement, or 

22 other authority under this title with respect to 

23 a merchant, retailer, or seller of nonfinancial 

24 goods or services that is not engaged signifiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01273 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1274 

•S 3217 AMDT 3739 

1 cantly in offering or providing consumer finan2 cial products or services. 

3 (D) RULE OF CONSTRUCTION.—No provi4 sion of this title may be construed as modifying, 

5 limiting, or superseding the supervisory or en6 forcement authority of the Federal Trade Com7 mission or any other agency (other than the 

8 Bureau) with respect to credit extended, or the 

9 collection of debt arising from such extension, 

10 directly by a merchant or retailer to a consumer 

11 exclusively for the purpose of enabling that con12 sumer to purchase nonfinancial goods or serv13 ices directly from the merchant or retailer. 

14 (b) EXCLUSION FOR REAL ESTATE BROKERAGE AC15 TIVITIES.— 

16 (1) REAL ESTATE BROKERAGE ACTIVITIES EX17 CLUDED.—Without limiting subsection (a), and ex18 cept as permitted in paragraph (2), the Bureau may 

19 not exercise any rulemaking, supervisory, enforce20 ment, or other authority under this title with respect 

21 to a person that is licensed or registered as a real 

22 estate broker or real estate agent, in accordance 

23 with State law, to the extent that such person— 


sroberts on DSKH9S0YB1PROD with BILLS
1275 

•S 3217 AMDT 3739 

1 (A) acts as a real estate agent or broker 

2 for a buyer, seller, lessor, or lessee of real prop3 erty; 

4 (B) brings together parties interested in 

5 the sale, purchase, lease, rental, or exchange of 

6 real property; 

7 (C) negotiates, on behalf of any party, any 

8 portion of a contract relating to the sale, pur9 chase, lease, rental, or exchange of real prop10 erty (other than in connection with the provi11 sion of financing with respect to any such 

12 transaction); or 

13 (D) offers to engage in any activity, or act 

14 in any capacity, described in subparagraph (A), 

15 (B), or (C). 

16 (2) DESCRIPTION OF ACTIVITIES.—Paragraph 

17 (1) shall not apply to any person to the extent that 

18 such person is engaged in the offering or provision 

19 of any consumer financial product or service or is 

20 otherwise subject to any enumerated consumer law 

21 or any law for which authorities are transferred 

22 under subtitle F or H. 

23 (c) EXCLUSION FOR MANUFACTURED HOME RETAIL24 ERS AND MODULAR HOME RETAILERS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1276 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—The Director may not exer2 cise any rulemaking, supervisory, enforcement, or 

3 other authority over a person to the extent that— 

4 (A) such person is not described in para5 graph (2); and 

6 (B) such person— 

7 (i) acts as an agent or broker for a 

8 buyer or seller of a manufactured home or 

9 a modular home; 

10 (ii) facilitates the purchase by a con11 sumer of a manufactured home or modular 

12 home, by negotiating the purchase price or 

13 terms of the sales contract (other than 

14 providing financing with respect to such 

15 transaction); or 

16 (iii) offers to engage in any activity 

17 described in clause (i) or (ii). 

18 (2) DESCRIPTION OF ACTIVITIES.—A person is 

19 described in this paragraph to the extent that such 

20 person is engaged in the offering or provision of any 

21 consumer financial product or service or is otherwise 

22 subject to any enumerated consumer law or any law 

23 for which authorities are transferred under subtitle 

24 F or H. 


sroberts on DSKH9S0YB1PROD with BILLS
1277 

•S 3217 AMDT 3739 

1 (3) DEFINITIONS.—For purposes of this sub2 section, the following definitions shall apply: 

3 (A) MANUFACTURED HOME.—The term 

4 ‘‘manufactured home’’ has the same meaning as 

5 in section 603 of the National Manufactured 

6 Housing Construction and Safety Standards 

7 Act of 1974 (42 U.S.C. 5402). 

8 (B) MODULAR HOME.—The term ‘‘mod9 ular home’’ means a house built in a factory in 

10 2 or more modules that meet the State or local 

11 building codes where the house will be located, 

12 and where such modules are transported to the 

13 building site, installed on foundations, and com14 pleted. 

15 (d) EXCLUSION FOR ACCOUNTANTS AND TAX PRE16 PARERS.— 

17 (1) IN GENERAL.—Except as permitted in para18 graph (2), the Bureau may not exercise any rule19 making, supervisory, enforcement, or other authority 

20 over— 

21 (A) any person that is a certified public ac22 countant, permitted to practice as a certified 

23 public accounting firm, or certified or licensed 

24 for such purpose by a State, or any individual 

25 who is employed by or holds an ownership interVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01277 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1278 

•S 3217 AMDT 3739 

1 est with respect to a person described in this 

2 subparagraph, when such person is performing 

3 or offering to perform— 

4 (i) customary and usual accounting 

5 activities, including the provision of ac6 counting, tax, advisory, or other services 

7 that are subject to the regulatory authority 

8 of a State board of accountancy or a Fed9 eral authority; or 

10 (ii) other services that are incidental 

11 to such customary and usual accounting 

12 activities, to the extent that such incidental 

13 services are not offered or provided— 

14 (I) by the person separate and 

15 apart from such customary and usual 

16 accounting activities; or 

17 (II) to consumers who are not re18 ceiving such customary and usual ac19 counting activities; or 

20 (B) any person, other than a person de21 scribed in subparagraph (A) that performs in22 come tax preparation activities for consumers. 

23 (2) DESCRIPTION OF ACTIVITIES.— 

24 (A) IN GENERAL.—Paragraph (1) shall not 

25 apply to any person described in paragraph 


sroberts on DSKH9S0YB1PROD with BILLS
1279 

•S 3217 AMDT 3739 

1 (1)(A) or (1)(B) to the extent that such person 

2 is engaged in any activity which is not a cus3 tomary and usual accounting activity described 

4 in paragraph (1)(A) or incidental thereto but 

5 which is the offering or provision of any con6 sumer financial product or service, except to the 

7 extent that a person described in paragraph 

8 (1)(A) is engaged in an activity which is a cus9 tomary and usual accounting activity described 

10 in paragraph (1)(A), or incidental thereto. 

11 (B) NOT A CUSTOMARY AND USUAL AC12 COUNTING ACTIVITY.—For purposes of this 

13 subsection, extending or brokering credit is not 

14 a customary and usual accounting activity, or 

15 incidental thereto. 

16 (C) RULE OF CONSTRUCTION.—For pur17 poses of subparagraphs (A) and (B), a person 

18 described in paragraph (1)(A) shall not be 

19 deemed to be extending credit, if such person is 

20 only extending credit directly to a consumer, ex21 clusively for the purpose of enabling such con22 sumer to purchase services described in clause 

23 (i) or (ii) of paragraph (1)(A) directly from 

24 such person, and such credit is— 


sroberts on DSKH9S0YB1PROD with BILLS
1280 

•S 3217 AMDT 3739 

1 (i) not subject to a finance charge; 

2 and 

3 (ii) not payable by written agreement 

4 in more than 4 installments. 

5 (D) OTHER LIMITATIONS.—Paragraph (1) 

6 does not apply to any person described in para7 graph (1)(A) or (1)(B) that is otherwise subject 

8 to any enumerated consumer law or any law for 

9 which authorities are transferred under subtitle 

10 F or H. 

11 (e) EXCLUSION FOR ATTORNEYS.— 

12 (1) IN GENERAL.—The Bureau may not exer13 cise any authority to conduct examinations of an at14 torney licensed by a State, to the extent that the at15 torney is engaged in the practice of law under the 

16 laws of such State. 

17 (2) EXCEPTION FOR ENUMERATED CONSUMER

18 LAWS AND TRANSFERRED AUTHORITIES.—Para19 graph (1) shall not apply to an attorney who is en20 gaged in the offering or provision of any consumer 

21 financial product or service, or is otherwise subject 

22 to any enumerated consumer law or any law for 

23 which authorities are transferred under subtitle F or 

24 H. 


sroberts on DSKH9S0YB1PROD with BILLS
1281 

•S 3217 AMDT 3739 

1 (f) EXCLUSION FOR PERSONS REGULATED BY A

2 STATE INSURANCE REGULATOR.— 

3 (1) IN GENERAL.—No provision of this title 

4 shall be construed as altering, amending, or affect5 ing the authority of any State insurance regulator to 

6 adopt rules, initiate enforcement proceedings, or 

7 take any other action with respect to a person regu8 lated by a State insurance regulator. Except as pro9 vided in paragraph (2), the Bureau shall have no au10 thority to exercise any power to enforce this title 

11 with respect to a person regulated by a State insur12 ance regulator. 

13 (2) DESCRIPTION OF ACTIVITIES.—Paragraph 

14 (1) does not apply to any person described in such 

15 paragraph to the extent that such person is engaged 

16 in the offering or provision of any consumer finan17 cial product or service or is otherwise subject to any 

18 enumerated consumer law or any law for which au19 thorities are transferred under subtitle F or H. 

20 (g) EXCLUSION FOR EMPLOYEE BENEFIT AND COM21 PENSATION PLANS AND CERTAIN OTHER ARRANGEMENTS

22 UNDER THE INTERNAL REVENUE CODE OF 1986.— 

23 (1) PRESERVATION OF AUTHORITY OF OTHER

24 AGENCIES.—No provision of this title shall be con25 strued as altering, amending, or affecting the auVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01281 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1282 

•S 3217 AMDT 3739 

1 thority of the Secretary of the Treasury, the Sec2 retary of Labor, or the Commissioner of Internal 

3 Revenue to adopt regulations, initiate enforcement 

4 proceedings, or take any actions with respect to any 

5 specified plan or arrangement. 

6 (2) ACTIVITIES NOT CONSTITUTING THE OF7 FERING OR PROVISION OF ANY CONSUMER FINAN8 CIAL PRODUCT OR SERVICE.—For purposes of this 

9 title, a person shall not be treated as having engaged 

10 in the offering or provision of any consumer finan11 cial product or service solely because such person is 

12 a specified plan or arrangement, or is engaged in the 

13 activity of establishing or maintaining, for the ben14 efit of employees of such person (or for members of 

15 an employee organization), any specified plan or ar16 rangement. 

17 (3) LIMITATION ON BUREAU AUTHORITY.— 

18 (A) IN GENERAL.—Except as provided 

19 under subparagraphs (B) and (C), the Bureau 

20 may not exercise any rulemaking or enforce21 ment authority with respect to products or serv22 ices that relate to any specified plan or arrange23 ment. 

24 (B) BUREAU ACTION ONLY PURSUANT TO

25 AGENCY REQUEST.—The Secretary and the SecVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01282 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1283 

•S 3217 AMDT 3739 

1 retary of Labor may jointly issue a written re2 quest to the Bureau regarding implementation 

3 of appropriate consumer protection standards 

4 under this title with respect to the provision of 

5 services relating to any specified plan or ar6 rangement. Subject to a request made under 

7 this subparagraph, the Bureau may exercise 

8 rulemaking authority, and may act to enforce a 

9 rule prescribed pursuant to such request, in ac10 cordance with the provisions of this title. A re11 quest made by the Secretary and the Secretary 

12 of Labor under this subparagraph shall describe 

13 the basis for, and scope of, appropriate con14 sumer protection standards to be implemented 

15 under this title with respect to the provision of 

16 services relating to any specified plan or ar17 rangement. 

18 (C) DESCRIPTION OF PRODUCTS OR SERV19 ICES.—To the extent that a person engaged in 

20 providing products or services relating to any 

21 specified plan or arrangement is subject to any 

22 enumerated consumer law or any law for which 

23 authorities are transferred under subtitle F or 

24 H, subparagraph (A) shall not apply with re25 spect to that law. 


sroberts on DSKH9S0YB1PROD with BILLS
1284 

•S 3217 AMDT 3739 

1 (4) SPECIFIED PLAN OR ARRANGEMENT.—For 

2 purposes of this subsection, the term ‘‘specified plan 

3 or arrangement’’ means any plan, account, or ar4 rangement described in section 220, 223, 401(a), 

5 403(a), 403(b), 408, 408A, 529, or 530 of the Inter6 nal Revenue Code of 1986, or any employee benefit 

7 or compensation plan or arrangement, including a 

8 plan that is subject to title I of the Employee Retire9 ment Income Security Act of 1974. 

10 (h) PERSONS REGULATED BY A STATE SECURITIES

11 COMMISSION.— 

12 (1) IN GENERAL.—No provision of this title 

13 shall be construed as altering, amending, or affect14 ing the authority of any securities commission (or 

15 any agency or office performing like functions) of 

16 any State to adopt rules, initiate enforcement pro17 ceedings, or take any other action with respect to a 

18 person regulated by any securities commission (or 

19 any agency or office performing like functions) of 

20 any State. Except as permitted in paragraph (2) and 

21 subsection (f), the Bureau shall have no authority to 

22 exercise any power to enforce this title with respect 

23 to a person regulated by any securities commission 

24 (or any agency or office performing like functions) 


sroberts on DSKH9S0YB1PROD with BILLS
1285 

•S 3217 AMDT 3739 

1 of any State, but only to the extent that the person 

2 acts in such regulated capacity. 

3 (2) DESCRIPTION OF ACTIVITIES.—Paragraph 

4 (1) shall not apply to any person to the extent such 

5 person is engaged in the offering or provision of any 

6 consumer financial product or service, or is other7 wise subject to any enumerated consumer law or any 

8 law for which authorities are transferred under sub9 title F or H. 

10 (i) EXCLUSION FOR PERSONS REGULATED BY THE

11 COMMISSION.— 

12 (1) IN GENERAL.—No provision of this title 

13 may be construed as altering, amending, or affecting 

14 the authority of the Commission to adopt rules, ini15 tiate enforcement proceedings, or take any other ac16 tion with respect to a person regulated by the Com17 mission. The Bureau shall have no authority to exer18 cise any power to enforce this title with respect to 

19 a person regulated by the Commission. 

20 (2) CONSULTATION AND COORDINATION.—Not21 withstanding paragraph (1), the Commission shall 

22 consult and coordinate, where feasible, with the Bu23 reau with respect to any rule (including any advance 

24 notice of proposed rulemaking) regarding an invest25 ment product or service that is the same type of 


sroberts on DSKH9S0YB1PROD with BILLS
1286 

•S 3217 AMDT 3739 

1 product as, or that competes directly with, a con2 sumer financial product or service that is subject to 

3 the jurisdiction of the Bureau under this title or 

4 under any other law. In carrying out this paragraph, 

5 the agencies shall negotiate an agreement to estab6 lish procedures for such coordination, including pro7 cedures for providing advance notice to the Bureau 

8 when the Commission is initiating a rulemaking. 

9 (j) EXCLUSION FOR PERSONS REGULATED BY THE

10 COMMODITY FUTURES TRADING COMMISSION.— 

11 (1) IN GENERAL.—No provision of this title 

12 shall be construed as altering, amending, or affect13 ing the authority of the Commodity Futures Trading 

14 Commission to adopt rules, initiate enforcement pro15 ceedings, or take any other action with respect to a 

16 person regulated by the Commodity Futures Trading 

17 Commission. The Bureau shall have no authority to 

18 exercise any power to enforce this title with respect 

19 to a person regulated by the Commodity Futures 

20 Trading Commission. 

21 (2) CONSULTATION AND COORDINATION.—Not22 withstanding paragraph (1), the Commodity Futures 

23 Trading Commission shall consult and coordinate 

24 with the Bureau with respect to any rule (including 

25 any advance notice of proposed rulemaking) regardVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01286 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1287 

•S 3217 AMDT 3739 

1 ing a product or service that is the same type of 

2 product as, or that competes directly with, a con3 sumer financial product or service that is subject to 

4 the jurisdiction of the Bureau under this title or 

5 under any other law. 

6 (k) EXCLUSION FOR PERSONS REGULATED BY THE

7 FARM CREDIT ADMINISTRATION.— 

8 (1) IN GENERAL.—No provision of this title 

9 shall be construed as altering, amending, or affect10 ing the authority of the Farm Credit Administration 

11 to adopt rules, initiate enforcement proceedings, or 

12 take any other action with respect to a person regu13 lated by the Farm Credit Administration. The Bu14 reau shall have no authority to exercise any power 

15 to enforce this title with respect to a person regu16 lated by the Farm Credit Administration. 

17 (2) DEFINITION.—For purposes of this sub18 section, the term ‘‘person regulated by the Farm 

19 Credit Administration’’ means any Farm Credit Sys20 tem institution that is chartered and subject to the 

21 provisions of the Farm Credit Act of 1971 (12 

22 U.S.C. 2001 et seq.). 

23 (l) EXCLUSION FOR ACTIVITIES RELATING TO CHAR24 ITABLE CONTRIBUTIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1288 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—The Director and the Bu2 reau may not exercise any rulemaking, supervisory, 

3 enforcement, or other authority, including authority 

4 to order penalties, over any activities related to the 

5 solicitation or making of voluntary contributions to 

6 a tax-exempt organization as recognized by the In7 ternal Revenue Service, by any agent, volunteer, or 

8 representative of such organizations to the extent 

9 the organization, agent, volunteer, or representative 

10 thereof is soliciting or providing advice, information, 

11 education, or instruction to any donor or potential 

12 donor relating to a contribution to the organization. 

13 (2) LIMITATION.—The exclusion in paragraph 

14 (1) does not apply to other activities not described 

15 in paragraph (1) that are the offering or provision 

16 of any consumer financial product or service, or are 

17 otherwise subject to any enumerated consumer law 

18 or any law for which authorities are transferred 

19 under subtitle F or H. 

20 (m) INSURANCE.—The Bureau may not define as a 

21 financial product or service, by regulation or otherwise, 

22 engaging in the business of insurance. 

23 (n) LIMITED AUTHORITY OF THE BUREAU.—Not24 withstanding subsections (a) through (h) and (l), a person 


sroberts on DSKH9S0YB1PROD with BILLS
1289 

•S 3217 AMDT 3739 

1 subject to or described in one or more of such sub2 sections— 

3 (1) may be a service provider; and 

4 (2) may be subject to requests from, or require5 ments imposed by, the Bureau regarding informa6 tion in order to carry out the responsibilities and 

7 functions of the Bureau and in accordance with sec8 tion 1022, 1052, or 1053. 

9 (o) NO AUTHORITY TO IMPOSE USURY LIMIT.—No 

10 provision of this title shall be construed as conferring au11 thority on the Bureau to establish a usury limit applicable 

12 to an extension of credit offered or made by a covered per13 son to a consumer, unless explicitly authorized by law. 

14 (p) ATTORNEY GENERAL.—No provision of this title, 

15 including section 1024(c)(1), shall affect the authorities 

16 of the Attorney General under otherwise applicable provi17 sions of law. 

18 (q) SECRETARY OF THE TREASURY.—No provision of 

19 this title shall affect the authorities of the Secretary, in20 cluding with respect to prescribing rules, initiating en21 forcement proceedings, or taking other actions with re22 spect to a person that performs income tax preparation 

23 activities for consumers. 

24 (r) DEPOSIT INSURANCE AND SHARE INSURANCE.— 

25 Nothing in this title shall affect the authority of the CorVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01289 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1290 

•S 3217 AMDT 3739 

1 poration under the Federal Deposit Insurance Act or the 

2 National Credit Union Administration Board under the 

3 Federal Credit Union Act as to matters related to deposit 

4 insurance and share insurance, respectively. 

5 SEC. 1028. AUTHORITY TO RESTRICT MANDATORY PRE-DIS6 PUTE ARBITRATION. 

7 (a) STUDY AND REPORT.—The Bureau shall conduct 

8 a study of, and shall provide a report to Congress con9 cerning, the use of agreements providing for arbitration 

10 of any future dispute between covered persons and con11 sumers in connection with the offering or providing of con12 sumer financial products or services. 

13 (b) FURTHER AUTHORITY.—The Bureau, by regula14 tion, may prohibit or impose conditions or limitations on 

15 the use of an agreement between a covered person and 

16 a consumer for a consumer financial product or service 

17 providing for arbitration of any future dispute between the 

18 parties, if the Bureau finds that such a prohibition or im19 position of conditions or limitations is in the public inter20 est and for the protection of consumers. The findings in 

21 such rule shall be consistent with the study conducted 

22 under subsection (a). 

23 (c) LIMITATION.—The authority described in sub24 section (b) may not be construed to prohibit or restrict 

25 a consumer from entering into a voluntary arbitration 


sroberts on DSKH9S0YB1PROD with BILLS
1291 

•S 3217 AMDT 3739 

1 agreement with a covered person after a dispute has aris2 en. 

3 (d) EFFECTIVE DATE.—Notwithstanding any other 

4 provision of law, any regulation prescribed by the Bureau 

5 under subsection (a) shall apply, consistent with the terms 

6 of the regulation, to any agreement between a consumer 

7 and a covered person entered into after the end of the 

8 180-day period beginning on the effective date of the regu9 lation, as established by the Bureau. 

10 SEC. 1029. EFFECTIVE DATE. 

11 This subtitle shall become effective on the designated 

12 transfer date. 

13 Subtitle C—Specific Bureau 

14 Authorities 

15 SEC. 1031. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE 

16 ACTS OR PRACTICES. 

17 (a) IN GENERAL.—The Bureau may take any action 

18 authorized under subtitle E to prevent a covered person 

19 or service provider from committing or engaging in an un20 fair, deceptive, or abusive act or practice under Federal 

21 law in connection with any transaction with a consumer 

22 for a consumer financial product or service, or the offering 

23 of a consumer financial product or service. 

24 (b) RULEMAKING.—The Bureau may prescribe rules 

25 applicable to a covered person or service provider identiVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01291 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1292 

•S 3217 AMDT 3739 

1 fying as unlawful unfair, deceptive, or abusive acts or 

2 practices in connection with any transaction with a con3 sumer for a consumer financial product or service, or the 

4 offering of a consumer financial product or service. Rules 

5 under this section may include requirements for the pur6 pose of preventing such acts or practices. 

7 (c) UNFAIRNESS.— 

8 (1) IN GENERAL.—The Bureau shall have no 

9 authority under this section to declare an act or 

10 practice in connection with a transaction with a con11 sumer for a consumer financial product or service, 

12 or the offering of a consumer financial product or 

13 service, to be unlawful on the grounds that such act 

14 or practice is unfair, unless the Bureau has a rea15 sonable basis to conclude that— 

16 (A) the act or practice causes or is likely 

17 to cause substantial injury to consumers which 

18 is not reasonably avoidable by consumers; and 

19 (B) such substantial injury is not out20 weighed by countervailing benefits to consumers 

21 or to competition. 

22 (2) CONSIDERATION OF PUBLIC POLICIES.—In 

23 determining whether an act or practice is unfair, the 

24 Bureau may consider established public policies as 

25 evidence to be considered with all other evidence. 


sroberts on DSKH9S0YB1PROD with BILLS
1293 

•S 3217 AMDT 3739 

1 Such public policy considerations may not serve as 

2 a primary basis for such determination. 

3 (d) ABUSIVE.—The Bureau shall have no authority 

4 under this section to declare an act or practice abusive 

5 in connection with the provision of a consumer financial 

6 product or service, unless the act or practice— 

7 (1) materially interferes with the ability of a 

8 consumer to understand a term or condition of a 

9 consumer financial product or service; or 

10 (2) takes unreasonable advantage of— 

11 (A) a lack of understanding on the part of 

12 the consumer of the material risks, costs, or 

13 conditions of the product or service; 

14 (B) the inability of the consumer to protect 

15 the interests of the consumer in selecting or 

16 using a consumer financial product or service; 

17 or 

18 (C) the reasonable reliance by the con19 sumer on a covered person to act in the inter20 ests of the consumer. 

21 (e) CONSULTATION.—In prescribing rules under this 

22 section, the Bureau shall consult with the Federal banking 

23 agencies, or other Federal agencies, as appropriate, con24 cerning the consistency of the proposed rule with prudenVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01293 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1294 

•S 3217 AMDT 3739 

1 tial, market, or systemic objectives administered by such 

2 agencies. 

3 SEC. 1032. DISCLOSURES. 

4 (a) IN GENERAL.—The Bureau may prescribe rules 

5 to ensure that the features of any consumer financial 

6 product or service, both initially and over the term of the 

7 product or service, are fully, accurately, and effectively 

8 disclosed to consumers in a manner that permits con9 sumers to understand the costs, benefits, and risks associ10 ated with the product or service, in light of the facts and 

11 circumstances. 

12 (b) MODEL DISCLOSURES.— 

13 (1) IN GENERAL.—Any final rule prescribed by 

14 the Bureau under this section requiring disclosures 

15 may include a model form that may be used at the 

16 option of the covered person for provision of the re17 quired disclosures. 

18 (2) FORMAT.—A model form issued pursuant to 

19 paragraph (1) shall contain a clear and conspicuous 

20 disclosure that, at a minimum— 

21 (A) uses plain language comprehensible to 

22 consumers; 

23 (B) contains a clear format and design, 

24 such as an easily readable type font; and 


sroberts on DSKH9S0YB1PROD with BILLS
1295 

•S 3217 AMDT 3739 

1 (C) succinctly explains the information 

2 that must be communicated to the consumer. 

3 (3) CONSUMER TESTING.—Any model form 

4 issued pursuant to this subsection shall be validated 

5 through consumer testing. 

6 (c) BASIS FOR RULEMAKING.—In prescribing rules 

7 under this section, the Bureau shall consider available evi8 dence about consumer awareness, understanding of, and 

9 responses to disclosures or communications about the 

10 risks, costs, and benefits of consumer financial products 

11 or services. 

12 (d) SAFE HARBOR.—Any covered person that uses a 

13 model form included with a rule issued under this section 

14 shall be deemed to be in compliance with the disclosure 

15 requirements of this section with respect to such model 

16 form. 

17 (e) TRIAL DISCLOSURE PROGRAMS.— 

18 (1) IN GENERAL.—The Bureau may permit a 

19 covered person to conduct a trial program that is 

20 limited in time and scope, subject to specified stand21 ards and procedures, for the purpose of providing 

22 trial disclosures to consumers that are designed to 

23 improve upon any model form issued pursuant to 

24 subsection (b)(1), or any other model form issued to 

25 implement an enumerated statute, as applicable. 


sroberts on DSKH9S0YB1PROD with BILLS
1296 

•S 3217 AMDT 3739 

1 (2) SAFE HARBOR.—The standards and proce2 dures issued by the Bureau shall be designed to en3 courage covered persons to conduct trial disclosure 

4 programs. For the purposes of administering this 

5 subsection, the Bureau may establish a limited pe6 riod during which a covered person conducting a 

7 trial disclosure program shall be deemed to be in 

8 compliance with, or may be exempted from, a re9 quirement of a rule or an enumerated consumer law. 

10 (3) PUBLIC DISCLOSURE.—The rules of the Bu11 reau shall provide for public disclosure of trial dis12 closure programs, which public disclosure may be 

13 limited, to the extent necessary to encourage covered 

14 persons to conduct effective trials. 

15 (f) COMBINED MORTGAGE LOAN DISCLOSURE.—Not 

16 later than 1 year after the designated transfer date, the 

17 Bureau shall propose for public comment rules and model 

18 disclosures that combine the disclosures required under 

19 the Truth in Lending Act and the Real Estate Settlement 

20 Procedures Act of 1974, into a single, integrated disclo21 sure for mortgage loan transactions covered by those laws, 

22 unless the Bureau determines that any proposal issued by 

23 the Board of Governors and the Secretary of Housing and 

24 Urban Development carries out the same purpose. 


sroberts on DSKH9S0YB1PROD with BILLS
1297 

•S 3217 AMDT 3739 

1 SEC. 1033. CONSUMER RIGHTS TO ACCESS INFORMATION. 

2 (a) IN GENERAL.—Subject to rules prescribed by the 

3 Bureau, a covered person shall make available to a con4 sumer, upon request, information in the control or posses5 sion of the covered person concerning the consumer finan6 cial product or service that the consumer obtained from 

7 such covered person, including information relating to any 

8 transaction, series of transactions, or to the account in9 cluding costs, charges and usage data. The information 

10 shall be made available in an electronic form usable by 

11 consumers. 

12 (b) EXCEPTIONS.—A covered person may not be re13 quired by this section to make available to the consumer— 

14 (1) any confidential commercial information, in15 cluding an algorithm used to derive credit scores or 

16 other risk scores or predictors; 

17 (2) any information collected by the covered 

18 person for the purpose of preventing fraud or money 

19 laundering, or detecting, or making any report re20 garding other unlawful or potentially unlawful con21 duct; 

22 (3) any information required to be kept con23 fidential by any other provision of law; or 

24 (4) any information that the covered person 

25 cannot retrieve in the ordinary course of its business 

26 with respect to that information. 


sroberts on DSKH9S0YB1PROD with BILLS
1298 

•S 3217 AMDT 3739 

1 (c) NO DUTY TO MAINTAIN RECORDS.—Nothing in 

2 this section shall be construed to impose any duty on a 

3 covered person to maintain or keep any information about 

4 a consumer. 

5 (d) STANDARDIZED FORMATS FOR DATA.—The Bu6 reau, by rule, shall prescribe standards applicable to cov7 ered persons to promote the development and use of stand8 ardized formats for information, including through the use 

9 of machine readable files, to be made available to con10 sumers under this section. 

11 (e) CONSULTATION.—The Bureau shall, when pre12 scribing any rule under this section, consult with the Fed13 eral banking agencies and the Federal Trade Commission 

14 to ensure that the rules— 

15 (1) impose substantively similar requirements 

16 on covered persons; 

17 (2) take into account conditions under which 

18 covered persons do business both in the United 

19 States and in other countries; and 

20 (3) do not require or promote the use of any 

21 particular technology in order to develop systems for 

22 compliance. 


sroberts on DSKH9S0YB1PROD with BILLS
1299 

•S 3217 AMDT 3739 

1 SEC. 1034. RESPONSE TO CONSUMER COMPLAINTS AND IN2 QUIRIES. 

3 (a) TIMELY REGULATOR RESPONSE TO CON4 SUMERS.—The Bureau shall establish, in consultation 

5 with the appropriate Federal regulatory agencies, reason6 able procedures to provide a timely response to consumers, 

7 in writing where appropriate, to complaints against, or in8 quiries concerning, a covered person, including— 

9 (1) all steps that have been taken by the regu10 lator in response to the complaint or inquiry of the 

11 consumer; 

12 (2) any responses received by the regulator 

13 from the covered person; and 

14 (3) any follow-up actions or planned follow-up 

15 actions by the regulator in response to the complaint 

16 or inquiry of the consumer. 

17 (b) TIMELY RESPONSE TO REGULATOR BY COVERED

18 PERSON.—A covered person subject to supervision and 

19 primary enforcement by the Bureau pursuant to section 

20 1025 shall provide a timely response, in writing where ap21 propriate, to the Bureau, the prudential regulators, and 

22 any other agency having jurisdiction over such covered 

23 person concerning a consumer complaint or inquiry, in24 cluding— 


sroberts on DSKH9S0YB1PROD with BILLS
1300 

•S 3217 AMDT 3739 

1 (1) steps that have been taken by the covered 

2 person to respond to the complaint or inquiry of the 

3 consumer; 

4 (2) responses received by the covered person 

5 from the consumer; and 

6 (3) follow-up actions or planned follow-up ac7 tions by the covered person to respond to the com8 plaint or inquiry of the consumer. 

9 (c) PROVISION OF INFORMATION TO CONSUMERS.— 

10 (1) IN GENERAL.—A covered person subject to 

11 supervision and primary enforcement by the Bureau 

12 pursuant to section 1025 shall, in a timely manner, 

13 comply with a consumer request for information in 

14 the control or possession of such covered person con15 cerning the consumer financial product or service 

16 that the consumer obtained from such covered per17 son, including supporting written documentation, 

18 concerning the account of the consumer. 

19 (2) EXCEPTIONS.—A covered person subject to 

20 supervision and primary enforcement by the Bureau 

21 pursuant to section 1025, a prudential regulator, 

22 and any other agency having jurisdiction over a cov23 ered person subject to supervision and primary en24 forcement by the Bureau pursuant to section 1025 


sroberts on DSKH9S0YB1PROD with BILLS
1301 

•S 3217 AMDT 3739 

1 may not be required by this section to make avail2 able to the consumer— 

3 (A) any confidential commercial informa4 tion, including an algorithm used to derive cred5 it scores or other risk scores or predictors; 

6 (B) any information collected by the cov7 ered person for the purpose of preventing fraud 

8 or money laundering, or detecting or making 

9 any report regarding other unlawful or poten10 tially unlawful conduct; 

11 (C) any information required to be kept 

12 confidential by any other provision of law; or 

13 (D) any nonpublic or confidential informa14 tion, including confidential supervisory informa15 tion. 

16 (d) AGREEMENTS WITH OTHER AGENCIES.—The 

17 Bureau shall enter into a memorandum of understanding 

18 with any affected Federal regulatory agency to establish 

19 procedures by which any covered person, and the pruden20 tial regulators, and any other agency having jurisdiction 

21 over a covered person, including the Secretary of the De22 partment of Housing and Urban Development and the 

23 Secretary of Education, shall comply with this section. 


sroberts on DSKH9S0YB1PROD with BILLS
1302 

•S 3217 AMDT 3739 

1 SEC. 1035. PRIVATE EDUCATION LOAN OMBUDSMAN. 

2 (a) ESTABLISHMENT.—The Secretary, in consulta3 tion with the Director, shall designate a Private Education 

4 Loan Ombudsman (in this section referred to as the ‘‘Om5 budsman’’) within the Bureau, to provide timely assist6 ance to borrowers of private education loans. 

7 (b) PUBLIC INFORMATION.—The Secretary and the 

8 Director shall disseminate information about the avail9 ability and functions of the Ombudsman to borrowers and 

10 potential borrowers, as well as institutions of higher edu11 cation, lenders, guaranty agencies, loan servicers, and 

12 other participants in private education student loan pro13 grams. 

14 (c) FUNCTIONS OF OMBUDSMAN.—The Ombudsman 

15 designated under this subsection shall— 

16 (1) in accordance with regulations of the Direc17 tor, receive, review, and attempt to resolve infor18 mally complaints from borrowers of loans described 

19 in subsection (a), including, as appropriate, attempts 

20 to resolve such complaints in collaboration with the 

21 Department of Education and with institutions of 

22 higher education, lenders, guaranty agencies, loan 

23 servicers, and other participants in private education 

24 loan programs; 

25 (2) not later than 90 days after the designated 

26 transfer date, establish a memorandum of underVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01302 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1303 

•S 3217 AMDT 3739 

1 standing with the student loan ombudsman estab2 lished under section 141(f) of the Higher Education 

3 Act of 1965 (20 U.S.C. 1018(f)), to ensure coordi4 nation in providing assistance to and serving bor5 rowers seeking to resolve complaints related to their 

6 private education or Federal student loans; 

7 (3) compile and analyze data on borrower com8 plaints regarding private education loans; and 

9 (4) make appropriate recommendations to the 

10 Director, the Secretary, the Secretary of Education, 

11 the Committee on Banking, Housing, and Urban Af12 fairs and the Committee on Health, Education, 

13 Labor, and Pensions of the Senate and the Com14 mittee on Financial Services and the Committee on 

15 Education and Labor of the House of Representa16 tives. 

17 (d) ANNUAL REPORTS.— 

18 (1) IN GENERAL.—The Ombudsman shall pre19 pare an annual report that describes the activities, 

20 and evaluates the effectiveness of the Ombudsman 

21 during the preceding year. 

22 (2) SUBMISSION.—The report required by para23 graph (1) shall be submitted on the same date annu24 ally to the Secretary, the Secretary of Education, 

25 the Committee on Banking, Housing, and Urban AfVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01303 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1304 

•S 3217 AMDT 3739 

1 fairs and the Committee on Health, Education, 

2 Labor, and Pensions of the Senate and the Com3 mittee on Financial Services and the Committee on 

4 Education and Labor of the House of Representa5 tives. 

6 (e) DEFINITIONS.—For purposes of this section, the 

7 terms ‘‘private education loan’’ and ‘‘institution of higher 

8 education’’ have the same meanings as in section 140 of 

9 the Truth in Lending Act (15 U.S.C. 1650). 

10 SEC. 1036. PROHIBITED ACTS. 

11 It shall be unlawful for any person— 

12 (1) to— 

13 (A) advertise, market, offer, or sell a con14 sumer financial product or service not in con15 formity with this title or applicable rules or or16 ders issued by the Bureau; 

17 (B) enforce, or attempt to enforce, any 

18 agreement with a consumer (including any term 

19 or change in terms in respect of such agree20 ment), or impose, or attempt to impose, any fee 

21 or charge on a consumer in connection with a 

22 consumer financial product or service that is 

23 not in conformity with this title or applicable 

24 rules or orders issued by the Bureau; or 


sroberts on DSKH9S0YB1PROD with BILLS
1305 

•S 3217 AMDT 3739 

1 (C) engage in any unfair, deceptive, or 

2 abusive act or practice, 

3 except that no person shall be held to have vio4 lated this paragraph solely by virtue of pro5 viding or selling time or space to a person plac6 ing an advertisement; 

7 (2) to fail or refuse, as required by Federal con8 sumer financial law, or any rule or order issued by 

9 the Bureau thereunder— 

10 (A) to permit access to or copying of 

11 records; 

12 (B) to establish or maintain records; or 

13 (C) to make reports or provide information 

14 to the Bureau; or 

15 (3) knowingly or recklessly to provide substan16 tial assistance to another person in violation of the 

17 provisions of section 1031, or any rule or order 

18 issued thereunder, and notwithstanding any provi19 sion of this title, the provider of such substantial as20 sistance shall be deemed to be in violation of that 

21 section to the same extent as the person to whom 

22 such assistance is provided. 

23 SEC. 1037. EFFECTIVE DATE. 

24 This subtitle shall take effect on the designated 

25 transfer date. 


sroberts on DSKH9S0YB1PROD with BILLS
1306 

•S 3217 AMDT 3739 

1 Subtitle D—Preservation of State 

2 Law 

3 SEC. 1041. RELATION TO STATE LAW. 

4 (a) IN GENERAL.— 

5 (1) RULE OF CONSTRUCTION.—This title, other 

6 than sections 1044 through 1048, may not be con7 strued as annulling, altering, or affecting, or ex8 empting any person subject to the provisions of this 

9 title from complying with, the statutes, regulations, 

10 orders, or interpretations in effect in any State, ex11 cept to the extent that any such provision of law is 

12 inconsistent with the provisions of this title, and 

13 then only to the extent of the inconsistency. 

14 (2) GREATER PROTECTION UNDER STATE

15 LAW.—For purposes of this subsection, a statute, 

16 regulation, order, or interpretation in effect in any 

17 State is not inconsistent with the provisions of this 

18 title if the protection that such statute, regulation, 

19 order, or interpretation affords to consumers is 

20 greater than the protection provided under this title. 

21 A determination regarding whether a statute, regu22 lation, order, or interpretation in effect in any State 

23 is inconsistent with the provisions of this title may 

24 be made by the Bureau on its own motion or in reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01306 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1307 

•S 3217 AMDT 3739 

1 sponse to a nonfrivolous petition initiated by any in2 terested person. 

3 (b) RELATION TO OTHER PROVISIONS OF ENUMER4 ATED CONSUMER LAWS THAT RELATE TO STATE LAW.— 

5 No provision of this title, except as provided in section 

6 1083, shall be construed as modifying, limiting, or super7 seding the operation of any provision of an enumerated 

8 consumer law that relates to the application of a law in 

9 effect in any State with respect to such Federal law. 

10 (c) ADDITIONAL CONSUMER PROTECTION REGULA11 TIONS IN RESPONSE TO STATE ACTION.— 

12 (1) NOTICE OF PROPOSED RULE REQUIRED.— 

13 The Bureau shall issue a notice of proposed rule14 making whenever a majority of the States has en15 acted a resolution in support of the establishment or 

16 modification of a consumer protection regulation by 

17 the Bureau. 

18 (2) BUREAU CONSIDERATIONS REQUIRED FOR

19 ISSUANCE OF FINAL REGULATION.—Before pre20 scribing a final regulation based upon a notice 

21 issued pursuant to paragraph (1), the Bureau shall 

22 take into account whether— 

23 (A) the proposed regulation would afford 

24 greater protection to consumers than any exist25 ing regulation; 


sroberts on DSKH9S0YB1PROD with BILLS
1308 

•S 3217 AMDT 3739 

1 (B) the intended benefits of the proposed 

2 regulation for consumers would outweigh any 

3 increased costs or inconveniences for con4 sumers, and would not discriminate unfairly 

5 against any category or class of consumers; and 

6 (C) a Federal banking agency has advised 

7 that the proposed regulation is likely to present 

8 an unacceptable safety and soundness risk to 

9 insured depository institutions. 

10 (3) EXPLANATION OF CONSIDERATIONS.—The 

11 Bureau— 

12 (A) shall include a discussion of the con13 siderations required in paragraph (2) in the 

14 Federal Register notice of a final regulation 

15 prescribed pursuant to this subsection; and 

16 (B) whenever the Bureau determines not 

17 to prescribe a final regulation, shall publish an 

18 explanation of such determination in the Fed19 eral Register, and provide a copy of such expla20 nation to each State that enacted a resolution 

21 in support of the proposed regulation, the Com22 mittee on Financial Services of the House of 

23 Representatives, and the Committee on Bank24 ing, Housing, and Urban Affairs of the Senate. 


sroberts on DSKH9S0YB1PROD with BILLS
1309 

•S 3217 AMDT 3739 

1 (4) RESERVATION OF AUTHORITY.—No provi2 sion of this subsection shall be construed as limiting 

3 or restricting the authority of the Bureau to enhance 

4 consumer protection standards established pursuant 

5 to this title in response to its own motion or in re6 sponse to a request by any other interested person. 

7 (5) RULE OF CONSTRUCTION.—No provision of 

8 this subsection shall be construed as exempting the 

9 Bureau from complying with subchapter II of chap10 ter 5 of title 5, United States Code. 

11 (6) DEFINITION.—For purposes of this sub12 section, the term ‘‘consumer protection regulation’’ 

13 means a regulation that the Bureau is authorized to 

14 prescribe under the Federal consumer financial laws. 

15 SEC. 1042. PRESERVATION OF ENFORCEMENT POWERS OF 

16 STATES. 

17 (a) IN GENERAL.— 

18 (1) ACTION BY STATE.—The attorney general 

19 (or the equivalent thereof) of any State may bring 

20 a civil action in the name of such State, as parens 

21 patriae on behalf of natural persons residing in such 

22 State, in any district court of the United States in 

23 that State or in State court having jurisdiction over 

24 the defendant, to enforce provisions of this title or 

25 regulations issued thereunder and to secure remedies 


sroberts on DSKH9S0YB1PROD with BILLS
1310 

•S 3217 AMDT 3739 

1 under provisions of this title or remedies otherwise 

2 provided under other law. A State regulator may 

3 bring a civil action or other appropriate proceeding 

4 to enforce the provisions of this title or regulations 

5 issued thereunder with respect to any entity that is 

6 State-chartered, incorporated, licensed, or otherwise 

7 authorized to do business under State law, and to 

8 secure remedies under provisions of this title or rem9 edies otherwise provided under other provisions of 

10 law with respect to a State-chartered entity. 

11 (2) RULE OF CONSTRUCTION.—No provision of 

12 this title shall be construed as modifying, limiting, 

13 or superseding the operation of any provision of an 

14 enumerated consumer law that relates to the author15 ity of a State attorney general or State regulator to 

16 enforce such Federal law. 

17 (b) CONSULTATION REQUIRED.— 

18 (1) NOTICE.— 

19 (A) IN GENERAL.—Before initiating any 

20 action in a court or other administrative or reg21 ulatory proceeding against any covered person 

22 to enforce any provision of this title, including 

23 any regulation prescribed by the Director under 

24 this title, a State attorney general or State reg25 ulator shall timely provide a copy of the comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01310 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1311 

•S 3217 AMDT 3739 

1 plete complaint to be filed and written notice 

2 describing such action or proceeding to the Bu3 reau and the prudential regulator, if any, or the 

4 designee thereof. 

5 (B) EMERGENCY ACTION.—If prior notice 

6 is not practicable, the State attorney general or 

7 State regulator shall provide a copy of the com8 plete complaint and the notice to the Bureau 

9 and the prudential regulator, if any, imme10 diately upon instituting the action or pro11 ceeding. 

12 (C) CONTENTS OF NOTICE.—The notifica13 tion required under this paragraph shall, at a 

14 minimum, describe— 

15 (i) the identity of the parties; 

16 (ii) the alleged facts underlying the 

17 proceeding; and 

18 (iii) whether there may be a need to 

19 coordinate the prosecution of the pro20 ceeding so as not to interfere with any ac21 tion, including any rulemaking, undertaken 

22 by the Director, a prudential regulator, or 

23 another Federal agency. 

24 (2) BUREAU RESPONSE.—In any action de25 scribed in paragraph (1), the Bureau may— 


sroberts on DSKH9S0YB1PROD with BILLS
1312 

•S 3217 AMDT 3739 

1 (A) intervene in the action as a party; 

2 (B) upon intervening— 

3 (i) remove the action to the appro4 priate United States district court, if the 

5 action was not originally brought there; 

6 and 

7 (ii) be heard on all matters arising in 

8 the action; and 

9 (C) appeal any order or judgment, to the 

10 same extent as any other party in the pro11 ceeding may. 

12 (c) REGULATIONS.—The Director shall prescribe reg13 ulations to implement the requirements of this section 

14 and, from time to time, provide guidance in order to fur15 ther coordinate actions with the State attorneys general 

16 and other regulators. 

17 (d) PRESERVATION OF STATE AUTHORITY.— 

18 (1) STATE CLAIMS.—No provision of this sec19 tion shall be construed as altering, limiting, or af20 fecting the authority of a State attorney general or 

21 any other regulatory or enforcement agency or au22 thority to bring an action or other regulatory pro23 ceeding arising solely under the law in effect in that 

24 State. 


sroberts on DSKH9S0YB1PROD with BILLS
1313 

•S 3217 AMDT 3739 

1 (2) STATE SECURITIES REGULATORS.—No pro2 vision of this title shall be construed as altering, lim3 iting, or affecting the authority of a State securities 

4 commission (or any agency or office performing like 

5 functions) under State law to adopt rules, initiate 

6 enforcement proceedings, or take any other action 

7 with respect to a person regulated by such commis8 sion or authority. 

9 (3) STATE INSURANCE REGULATORS.—No pro10 vision of this title shall be construed as altering, lim11 iting, or affecting the authority of a State insurance 

12 commission or State insurance regulator under State 

13 law to adopt rules, initiate enforcement proceedings, 

14 or take any other action with respect to a person 

15 regulated by such commission or regulator. 

16 SEC. 1043. PRESERVATION OF EXISTING CONTRACTS. 

17 This title, and regulations, orders, guidance, and in18 terpretations prescribed, issued, or established by the Bu19 reau, shall not be construed to alter or affect the applica20 bility of any regulation, order, guidance, or interpretation 

21 prescribed, issued, and established by the Comptroller of 

22 the Currency or the Director of the Office of Thrift Super23 vision regarding the applicability of State law under Fed24 eral banking law to any contract entered into on or before 

25 the date of the enactment of this title, by national banks, 


sroberts on DSKH9S0YB1PROD with BILLS
1314 

•S 3217 AMDT 3739 

1 Federal savings associations, or subsidiaries thereof that 

2 are regulated and supervised by the Comptroller of the 

3 Currency or the Director of the Office of Thrift Super4 vision, respectively. 

5 SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NA6 TIONAL BANKS AND SUBSIDIARIES CLARI7 FIED. 

8 (a) IN GENERAL.—Chapter one of title LXII of the 

9 Revised Statutes of the United States (12 U.S.C. 21 et 

10 seq.) is amended by inserting after section 5136B the fol11 lowing new section: 

12 ‘‘SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NA13 TIONAL BANKS AND SUBSIDIARIES CLARI14 FIED. 

15 ‘‘(a) DEFINITIONS.—For purposes of this section, the 

16 following definitions shall apply: 

17 ‘‘(1) NATIONAL BANK.—The term ‘national 

18 bank’ includes— 

19 ‘‘(A) any bank organized under the laws of 

20 the United States; and 

21 ‘‘(B) any Federal branch established in ac22 cordance with the International Banking Act of 

23 1978. 

24 ‘‘(2) STATE CONSUMER FINANCIAL LAWS.—The 

25 term ‘State consumer financial law’ means a State 


sroberts on DSKH9S0YB1PROD with BILLS
1315 

•S 3217 AMDT 3739 

1 law that does not directly or indirectly discriminate 

2 against national banks and that directly and specifi3 cally regulates the manner, content, or terms and 

4 conditions of any financial transaction (as may be 

5 authorized for national banks to engage in), or any 

6 account related thereto, with respect to a consumer. 

7 ‘‘(3) OTHER DEFINITIONS.—The terms ‘affil8 iate’, ‘subsidiary’, ‘includes’, and ‘including’ have the 

9 same meanings as in section 3 of the Federal De10 posit Insurance Act. 

11 ‘‘(b) PREEMPTION STANDARD.— 

12 ‘‘(1) IN GENERAL.—State consumer financial 

13 laws are preempted, only if— 

14 ‘‘(A) application of a State consumer fi15 nancial law would have a discriminatory effect 

16 on national banks, in comparison with the effect 

17 of the law on a bank chartered by that State; 

18 ‘‘(B) the preemption of the State consumer 

19 financial law is in accordance with the legal 

20 standard of the decision of the Supreme Court 

21 of the United States in Barnett Bank of Mar22 ion County, N.A. v. Nelson, Florida Insurance 

23 Commissioner, et al, 517 U.S. 25 (1996), and 

24 a preemption determination under this subpara25 graph may be made by a court or by regulation 


sroberts on DSKH9S0YB1PROD with BILLS
1316 

•S 3217 AMDT 3739 

1 or order of the Comptroller of the Currency, in 

2 accordance with applicable law, on a case-by3 case basis, and any such determination by a 

4 court shall comply with the standards set forth 

5 in subsection (d), with the court making the 

6 finding under subsection (d), de novo; or 

7 ‘‘(C) the State consumer financial law is 

8 preempted by a provision of Federal law other 

9 than this title. 

10 ‘‘(2) SAVINGS CLAUSE.—This title does not pre11 empt, annul, or affect the applicability of any State 

12 law to any subsidiary or affiliate of a national bank 

13 (other than a subsidiary or affiliate that is chartered 

14 as a national bank). 

15 ‘‘(3) CASE-BY-CASE BASIS.— 

16 ‘‘(A) DEFINITION.—As used in this section 

17 the term ‘case-by-case basis’ refers to a deter18 mination pursuant to this section made by the 

19 Comptroller concerning the impact of a par20 ticular State consumer financial law on any na21 tional bank that is subject to that law, or the 

22 law of any other State with substantively equiv23 alent terms. 

24 ‘‘(B) CONSULTATION.—When making a 

25 determination on a case-by-case basis that a 


sroberts on DSKH9S0YB1PROD with BILLS
1317 

•S 3217 AMDT 3739 

1 State consumer financial law of another State 

2 has substantively equivalent terms as one that 

3 the Comptroller is preempting, the Comptroller 

4 shall first consult with the Bureau of Consumer 

5 Financial Protection and shall take the views of 

6 the Bureau into account when making the de7 termination. 

8 ‘‘(4) RULE OF CONSTRUCTION.—This title does 

9 not occupy the field in any area of State law. 

10 ‘‘(5) STANDARDS OF REVIEW.— 

11 ‘‘(A) PREEMPTION.—A court reviewing 

12 any determinations made by the Comptroller re13 garding preemption of a State law by this title 

14 shall assess the validity of such determinations, 

15 depending upon the thoroughness evident in the 

16 consideration of the agency, the validity of the 

17 reasoning of the agency, the consistency with 

18 other valid determinations made by the agency, 

19 and other factors which the court finds persua20 sive and relevant to its decision. 

21 ‘‘(B) SAVINGS CLAUSE.—Except as pro22 vided in subparagraph (A), nothing in this sec23 tion shall affect the deference that a court may 

24 afford to the Comptroller in making determina25 tions regarding the meaning or interpretation of 


sroberts on DSKH9S0YB1PROD with BILLS
1318 

•S 3217 AMDT 3739 

1 title LXII of the Revised Statutes of the United 

2 States or other Federal laws. 

3 ‘‘(6) COMPTROLLER DETERMINATION NOT DEL4 EGABLE.—Any regulation, order, or determination 

5 made by the Comptroller of the Currency under 

6 paragraph (1)(B) shall be made by the Comptroller, 

7 and shall not be delegable to another officer or em8 ployee of the Comptroller of the Currency. 

9 ‘‘(c) SUBSTANTIAL EVIDENCE.—No regulation or 

10 order of the Comptroller of the Currency prescribed under 

11 subsection (b)(1)(B), shall be interpreted or applied so as 

12 to invalidate, or otherwise declare inapplicable to a na13 tional bank, the provision of the State consumer financial 

14 law, unless substantial evidence, made on the record of 

15 the proceeding, supports the specific finding regarding the 

16 preemption of such provision in accordance with the legal 

17 standard of the decision of the Supreme Court of the 

18 United States in Barnett Bank of Marion County, N.A. 

19 v. Nelson, Florida Insurance Commissioner, et al., 517 

20 U.S. 25 (1996). 

21 ‘‘(d) OTHER FEDERAL LAWS.—Notwithstanding any 

22 other provision of law, the Comptroller of the Currency 

23 may not prescribe a regulation or order pursuant to sub24 section (b)(1)(B) until the Comptroller of the Currency, 

25 after consultation with the Director of the Bureau of ConVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01318 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1319 

•S 3217 AMDT 3739 

1 sumer Financial Protection, makes a finding, in writing, 

2 that a Federal law provides a substantive standard, appli3 cable to a national bank, which regulates the particular 

4 conduct, activity, or authority that is subject to such pro5 vision of the State consumer financial law. 

6 ‘‘(e) PERIODIC REVIEW OF PREEMPTION DETER7 MINATIONS.— 

8 ‘‘(1) IN GENERAL.—The Comptroller of the 

9 Currency shall periodically conduct a review, 

10 through notice and public comment, of each deter11 mination that a provision of Federal law preempts a 

12 State consumer financial law. The agency shall con13 duct such review within the 5-year period after pre14 scribing or otherwise issuing such determination, 

15 and at least once during each 5-year period there16 after. After conducting the review of, and inspecting 

17 the comments made on, the determination, the agen18 cy shall publish a notice in the Federal Register an19 nouncing the decision to continue or rescind the de20 termination or a proposal to amend the determina21 tion. Any such notice of a proposal to amend a de22 termination and the subsequent resolution of such 

23 proposal shall comply with the procedures set forth 

24 in subsections (a) and (b) of section 5244 of the ReVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01319 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1320 

•S 3217 AMDT 3739 

1 vised Statutes of the United States (12 U.S.C. 43 

2 (a), (b)). 

3 ‘‘(2) REPORTS TO CONGRESS.—At the time of 

4 issuing a review conducted under paragraph (1), the 

5 Comptroller of the Currency shall submit a report 

6 regarding such review to the Committee on Finan7 cial Services of the House of Representatives and 

8 the Committee on Banking, Housing, and Urban Af9 fairs of the Senate. The report submitted to the re10 spective committees shall address whether the agen11 cy intends to continue, rescind, or propose to amend 

12 any determination that a provision of Federal law 

13 preempts a State consumer financial law, and the 

14 reasons therefor. 

15 ‘‘(f) APPLICATION OF STATE CONSUMER FINANCIAL

16 LAW TO SUBSIDIARIES AND AFFILIATES.—Notwith17 standing any provision of this title, a State consumer fi18 nancial law shall apply to a subsidiary or affiliate of a 

19 national bank (other than a subsidiary or affiliate that is 

20 chartered as a national bank) to the same extent that the 

21 State consumer financial law applies to any person, cor22 poration, or other entity subject to such State law. 

23 ‘‘(g) PRESERVATION OF POWERS RELATED TO

24 CHARGING INTEREST.—No provision of this title shall be 

25 construed as altering or otherwise affecting the authority 


sroberts on DSKH9S0YB1PROD with BILLS
1321 

•S 3217 AMDT 3739 

1 conferred by section 5197 of the Revised Statutes of the 

2 United States (12 U.S.C. 85) for the charging of interest 

3 by a national bank at the rate allowed by the laws of the 

4 State, territory, or district where the bank is located, in5 cluding with respect to the meaning of ‘interest’ under 

6 such provision. 

7 ‘‘(h) TRANSPARENCY OF OCC PREEMPTION DETER8 MINATIONS.—The Comptroller of the Currency shall pub9 lish and update no less frequently than quarterly, a list 

10 of preemption determinations by the Comptroller of the 

11 Currency then in effect that identifies the activities and 

12 practices covered by each determination and the require13 ments and constraints determined to be preempted.’’. 

14 (b) CLERICAL AMENDMENT.—The table of sections 

15 for chapter one of title LXII of the Revised Statutes of 

16 the United States is amended by inserting after the item 

17 relating to section 5136B the following new item: 

‘‘Sec. 5136C. State law preemption standards for national banks and subsidiaries clarified.’’. 

18 SEC. 1045. CLARIFICATION OF LAW APPLICABLE TO NON19 DEPOSITORY INSTITUTION SUBSIDIARIES. 

20 Section 5136C of the Revised Statutes of the United 

21 States (as added by this subtitle) is amended by adding 

22 at the end the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1322 

•S 3217 AMDT 3739 

1 ‘‘(i) CLARIFICATION OF LAW APPLICABLE TO NON2 DEPOSITORY INSTITUTION SUBSIDIARIES AND AFFILI3 ATES OF NATIONAL BANKS.— 

4 ‘‘(1) DEFINITIONS.—For purposes of this sub5 section, the terms ‘depository institution’, ‘sub6 sidiary’, and ‘affiliate’ have the same meanings as in 

7 section 3 of the Federal Deposit Insurance Act. 

8 ‘‘(2) RULE OF CONSTRUCTION.—No provision 

9 of this title shall be construed as preempting, annul10 ling, or affecting the applicability of State law to 

11 any subsidiary, affiliate, or agent of a national bank 

12 (other than a subsidiary, affiliate, or agent that is 

13 chartered as a national bank).’’. 

14 SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FED15 ERAL SAVINGS ASSOCIATIONS AND SUBSIDI16 ARIES CLARIFIED. 

17 (a) IN GENERAL.—The Home Owners’ Loan Act (12 

18 U.S.C. 1461 et seq.) is amended by inserting after section 

19 5 the following new section: 

20 ‘‘SEC. 6. STATE LAW PREEMPTION STANDARDS FOR FED21 ERAL SAVINGS ASSOCIATIONS CLARIFIED. 

22 ‘‘(a) IN GENERAL.—Any determination by a court or 

23 by the Director or any successor officer or agency regard24 ing the relation of State law to a provision of this Act 

25 or any regulation or order prescribed under this Act shall 


sroberts on DSKH9S0YB1PROD with BILLS
1323 

•S 3217 AMDT 3739 

1 be made in accordance with the laws and legal standards 

2 applicable to national banks regarding the preemption of 

3 State law. 

4 ‘‘(b) PRINCIPLES OF CONFLICT PREEMPTION APPLI5 CABLE.—Notwithstanding the authorities granted under 

6 sections 4 and 5, this Act does not occupy the field in 

7 any area of State law.’’. 

8 (b) CLERICAL AMENDMENT.—The table of sections 

9 for the Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) 

10 is amended by striking the item relating to section 6 and 

11 inserting the following new item: 

‘‘Sec. 6.. State law preemption standards for Federal savings associations 

and subsidiaries clarified.’’. 

12 SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS 

13 AND SAVINGS ASSOCIATIONS. 

14 (a) NATIONAL BANKS.—Section 5136C of the Re15 vised Statutes of the United States (as added by this sub16 title) is amended by adding at the end the following: 

17 ‘‘(j) VISITORIAL POWERS.— 

18 ‘‘(1) IN GENERAL.—No provision of this title 

19 which relates to visitorial powers to which any na20 tional bank is subject shall be construed as limiting 

21 or restricting the authority of any attorney general 

22 (or other chief law enforcement officer) of any State 

23 to bring any action in any court of appropriate juris24 diction, as authorized under section 5240(a)— 


sroberts on DSKH9S0YB1PROD with BILLS
1324 

•S 3217 AMDT 3739 

1 ‘‘(A) to enforce any applicable provision of 

2 Federal or State law, as authorized by such 

3 law; or 

4 ‘‘(B) on behalf of residents of such State, 

5 to enforce any applicable provision of any Fed6 eral or nonpreempted State law against a na7 tional bank, as authorized by such law, or to 

8 seek relief for such residents from any violation 

9 of any such law by any national bank. 

10 ‘‘(2) PRIOR CONSULTATION WITH OCC RE11 QUIRED.—The attorney general (or other chief law 

12 enforcement officer) of any State shall consult with 

13 the Comptroller of the Currency before acting under 

14 paragraph (1). 

15 ‘‘(k) ENFORCEMENT ACTIONS.—The ability of the 

16 Comptroller of the Currency to bring an enforcement ac17 tion under this title or section 5 of the Federal Trade 

18 Commission Act does not preclude any private party from 

19 enforcing rights granted under Federal or State law in the 

20 courts.’’. 

21 (b) SAVINGS ASSOCIATIONS.—Section 6 of the Home 

22 Owners’ Loan Act (as added by this title) is amended by 

23 adding at the end the following: 

24 ‘‘(c) VISITORIAL POWERS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1325 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—No provision of this Act 

2 shall be construed as limiting or restricting the au3 thority of any attorney general (or other chief law 

4 enforcement officer) of any State to bring any action 

5 in any court of appropriate jurisdiction— 

6 ‘‘(A) to enforce any applicable provision of 

7 Federal or State law, as authorized by such 

8 law; or 

9 ‘‘(B) on behalf of residents of such State, 

10 to enforce any applicable provision of any Fed11 eral or nonpreempted State law against a Fed12 eral savings association, as authorized by such 

13 law, or to seek relief for such residents from 

14 any violation of any such law by any Federal 

15 savings association. 

16 ‘‘(2) PRIOR CONSULTATION WITH OCC RE17 QUIRED.—The attorney general (or other chief law 

18 enforcement officer) of any State shall consult with 

19 the Comptroller of the Currency before acting under 

20 paragraph (1). 

21 ‘‘(d) ENFORCEMENT ACTIONS.—The ability of the 

22 Comptroller of the Currency to bring an enforcement ac23 tion under this Act or section 5 of the Federal Trade Com24 mission Act does not preclude any private party from enVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01325 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1326 

•S 3217 AMDT 3739 

1 forcing rights granted under Federal or State law in the 

2 courts.’’. 

3 SEC. 1048. EFFECTIVE DATE. 

4 This subtitle shall become effective on the designated 

5 transfer date. 

6 Subtitle E—Enforcement Powers 

7 SEC. 1051. DEFINITIONS. 

8 For purposes of this subtitle, the following definitions 

9 shall apply: 

10 (1) BUREAU INVESTIGATION.—The term ‘‘Bu11 reau investigation’’ means any inquiry conducted by 

12 a Bureau investigator for the purpose of 

13 ascertaining whether any person is or has been en14 gaged in any conduct that is a violation, as defined 

15 in this section. 

16 (2) BUREAU INVESTIGATOR.—The term ‘‘Bu17 reau investigator’’ means any attorney or investi18 gator employed by the Bureau who is charged with 

19 the duty of enforcing or carrying into effect any 

20 Federal consumer financial law. 

21 (3) CIVIL INVESTIGATIVE DEMAND AND DE22 MAND.—The terms ‘‘civil investigative demand’’ and 

23 ‘‘demand’’ mean any demand issued by the Bureau. 


sroberts on DSKH9S0YB1PROD with BILLS
1327 

•S 3217 AMDT 3739 

1 (4) CUSTODIAN.—The term ‘‘custodian’’ means 

2 the custodian or any deputy custodian designated by 

3 the Bureau. 

4 (5) DOCUMENTARY MATERIAL.—The term 

5 ‘‘documentary material’’ includes the original or any 

6 copy of any book, document, record, report, memo7 randum, paper, communication, tabulation, chart, 

8 logs, electronic files, or other data or data compila9 tions stored in any medium. 

10 (6) VIOLATION.—The term ‘‘violation’’ means 

11 any act or omission that, if proved, would constitute 

12 a violation of any provision of Federal consumer fi13 nancial law. 

14 SEC. 1052. INVESTIGATIONS AND ADMINISTRATIVE DIS15 COVERY. 

16 (a) JOINT INVESTIGATIONS.— 

17 (1) IN GENERAL.—The Bureau or, where ap18 propriate, a Bureau investigator, may engage in 

19 joint investigations and requests for information, as 

20 authorized under this title. 

21 (2) FAIR LENDING.—The authority under para22 graph (1) includes matters relating to fair lending, 

23 and where appropriate, joint investigations with, and 

24 requests for information from, the Secretary of 


sroberts on DSKH9S0YB1PROD with BILLS
1328 

•S 3217 AMDT 3739 

1 Housing and Urban Development, the Attorney Gen2 eral of the United States, or both. 

3 (b) SUBPOENAS.— 

4 (1) IN GENERAL.—The Bureau or a Bureau in5 vestigator may issue subpoenas for the attendance 

6 and testimony of witnesses and the production of 

7 relevant papers, books, documents, or other material 

8 in connection with hearings under this title. 

9 (2) FAILURE TO OBEY.—In the case of contu10 macy or refusal to obey a subpoena issued pursuant 

11 to this paragraph and served upon any person, the 

12 district court of the United States for any district in 

13 which such person is found, resides, or transacts 

14 business, upon application by the Bureau or a Bu15 reau investigator and after notice to such person, 

16 may issue an order requiring such person to appear 

17 and give testimony or to appear and produce docu18 ments or other material. 

19 (3) CONTEMPT.—Any failure to obey an order 

20 of the court under this subsection may be punished 

21 by the court as a contempt thereof. 

22 (c) DEMANDS.— 

23 (1) IN GENERAL.—Whenever the Bureau has 

24 reason to believe that any person may be in posses25 sion, custody, or control of any documentary mateVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01328 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1329 

•S 3217 AMDT 3739 

1 rial or tangible things, or may have any information, 

2 relevant to a violation, the Bureau may, before the 

3 institution of any proceedings under the Federal 

4 consumer financial law, issue in writing, and cause 

5 to be served upon such person, a civil investigative 

6 demand requiring such person to— 

7 (A) produce such documentary material for 

8 inspection and copying or reproduction in the 

9 form or medium requested by the Bureau; 

10 (B) submit such tangible things; 

11 (C) file written reports or answers to ques12 tions; 

13 (D) give oral testimony concerning docu14 mentary material, tangible things, or other in15 formation; or 

16 (E) furnish any combination of such mate17 rial, answers, or testimony. 

18 (2) REQUIREMENTS.—Each civil investigative 

19 demand shall state the nature of the conduct consti20 tuting the alleged violation which is under investiga21 tion and the provision of law applicable to such vio22 lation. 

23 (3) PRODUCTION OF DOCUMENTS.—Each civil 

24 investigative demand for the production of documen25 tary material shall— 


sroberts on DSKH9S0YB1PROD with BILLS
1330 

•S 3217 AMDT 3739 

1 (A) describe each class of documentary 

2 material to be produced under the demand with 

3 such definiteness and certainty as to permit 

4 such material to be fairly identified; 

5 (B) prescribe a return date or dates which 

6 will provide a reasonable period of time within 

7 which the material so demanded may be assem8 bled and made available for inspection and 

9 copying or reproduction; and 

10 (C) identify the custodian to whom such 

11 material shall be made available. 

12 (4) PRODUCTION OF THINGS.—Each civil inves13 tigative demand for the submission of tangible 

14 things shall— 

15 (A) describe each class of tangible things 

16 to be submitted under the demand with such 

17 definiteness and certainty as to permit such 

18 things to be fairly identified; 

19 (B) prescribe a return date or dates which 

20 will provide a reasonable period of time within 

21 which the things so demanded may be assem22 bled and submitted; and 

23 (C) identify the custodian to whom such 

24 things shall be submitted. 


sroberts on DSKH9S0YB1PROD with BILLS
1331 

•S 3217 AMDT 3739 

1 (5) DEMAND FOR WRITTEN REPORTS OR AN2 SWERS.—Each civil investigative demand for written 

3 reports or answers to questions shall— 

4 (A) propound with definiteness and cer5 tainty the reports to be produced or the ques6 tions to be answered; 

7 (B) prescribe a date or dates at which time 

8 written reports or answers to questions shall be 

9 submitted; and 

10 (C) identify the custodian to whom such 

11 reports or answers shall be submitted. 

12 (6) ORAL TESTIMONY.—Each civil investigative 

13 demand for the giving of oral testimony shall— 

14 (A) prescribe a date, time, and place at 

15 which oral testimony shall be commenced; and 

16 (B) identify a Bureau investigator who 

17 shall conduct the investigation and the custo18 dian to whom the transcript of such investiga19 tion shall be submitted. 

20 (7) SERVICE.—Any civil investigative demand 

21 and any enforcement petition filed under this section 

22 may be served— 

23 (A) by any Bureau investigator at any 

24 place within the territorial jurisdiction of any 

25 court of the United States; and 


sroberts on DSKH9S0YB1PROD with BILLS
1332 

•S 3217 AMDT 3739 

1 (B) upon any person who is not found 

2 within the territorial jurisdiction of any court of 

3 the United States— 

4 (i) in such manner as the Federal 

5 Rules of Civil Procedure prescribe for serv6 ice in a foreign nation; and 

7 (ii) to the extent that the courts of 

8 the United States have authority to assert 

9 jurisdiction over such person, consistent 

10 with due process, the United States Dis11 trict Court for the District of Columbia 

12 shall have the same jurisdiction to take 

13 any action respecting compliance with this 

14 section by such person that such district 

15 court would have if such person were per16 sonally within the jurisdiction of such dis17 trict court. 

18 (8) METHOD OF SERVICE.—Service of any civil 

19 investigative demand or any enforcement petition 

20 filed under this section may be made upon a person, 

21 including any legal entity, by— 

22 (A) delivering a duly executed copy of such 

23 demand or petition to the individual or to any 

24 partner, executive officer, managing agent, or 

25 general agent of such person, or to any agent 


sroberts on DSKH9S0YB1PROD with BILLS
1333 

•S 3217 AMDT 3739 

1 of such person authorized by appointment or by 

2 law to receive service of process on behalf of 

3 such person; 

4 (B) delivering a duly executed copy of such 

5 demand or petition to the principal office or 

6 place of business of the person to be served; or 

7 (C) depositing a duly executed copy in the 

8 United States mails, by registered or certified 

9 mail, return receipt requested, duly addressed 

10 to such person at the principal office or place 

11 of business of such person. 

12 (9) PROOF OF SERVICE.— 

13 (A) IN GENERAL.—A verified return by the 

14 individual serving any civil investigative demand 

15 or any enforcement petition filed under this sec16 tion setting forth the manner of such service 

17 shall be proof of such service. 

18 (B) RETURN RECEIPTS.—In the case of 

19 service by registered or certified mail, such re20 turn shall be accompanied by the return post 

21 office receipt of delivery of such demand or en22 forcement petition. 

23 (10) PRODUCTION OF DOCUMENTARY MATE24 RIAL.—The production of documentary material in 

25 response to a civil investigative demand shall be 


sroberts on DSKH9S0YB1PROD with BILLS
1334 

•S 3217 AMDT 3739 

1 made under a sworn certificate, in such form as the 

2 demand designates, by the person, if a natural per3 son, to whom the demand is directed or, if not a 

4 natural person, by any person having knowledge of 

5 the facts and circumstances relating to such produc6 tion, to the effect that all of the documentary mate7 rial required by the demand and in the possession, 

8 custody, or control of the person to whom the de9 mand is directed has been produced and made avail10 able to the custodian. 

11 (11) SUBMISSION OF TANGIBLE THINGS.—The 

12 submission of tangible things in response to a civil 

13 investigative demand shall be made under a sworn 

14 certificate, in such form as the demand designates, 

15 by the person to whom the demand is directed or, 

16 if not a natural person, by any person having knowl17 edge of the facts and circumstances relating to such 

18 production, to the effect that all of the tangible 

19 things required by the demand and in the posses20 sion, custody, or control of the person to whom the 

21 demand is directed have been submitted to the cus22 todian. 

23 (12) SEPARATE ANSWERS.—Each reporting re24 quirement or question in a civil investigative demand 

25 shall be answered separately and fully in writing 


sroberts on DSKH9S0YB1PROD with BILLS
1335 

•S 3217 AMDT 3739 

1 under oath, unless it is objected to, in which event 

2 the reasons for the objection shall be stated in lieu 

3 of an answer, and it shall be submitted under a 

4 sworn certificate, in such form as the demand des5 ignates, by the person, if a natural person, to whom 

6 the demand is directed or, if not a natural person, 

7 by any person responsible for answering each report8 ing requirement or question, to the effect that all in9 formation required by the demand and in the posses10 sion, custody, control, or knowledge of the person to 

11 whom the demand is directed has been submitted. 

12 (13) TESTIMONY.— 

13 (A) IN GENERAL.— 

14 (i) OATH OR AFFIRMATION.—Any Bu15 reau investigator before whom oral testi16 mony is to be taken shall put the witness 

17 under oath or affirmation, and shall per18 sonally, or by any individual acting under 

19 the direction of and in the presence of the 

20 Bureau investigator, record the testimony 

21 of the witness. 

22 (ii) TRANSCRIPTION.—The testimony 

23 shall be taken stenographically and tran24 scribed. 


sroberts on DSKH9S0YB1PROD with BILLS
1336 

•S 3217 AMDT 3739 

1 (iii) TRANSMISSION TO CUSTODIAN.— 

2 After the testimony is fully transcribed, 

3 the Bureau investigator before whom the 

4 testimony is taken shall promptly transmit 

5 a copy of the transcript of the testimony to 

6 the custodian. 

7 (B) PARTIES PRESENT.—Any Bureau in8 vestigator before whom oral testimony is to be 

9 taken shall exclude from the place where the 

10 testimony is to be taken all other persons, ex11 cept the person giving the testimony, the attor12 ney of that person, the officer before whom the 

13 testimony is to be taken, and any stenographer 

14 taking such testimony. 

15 (C) LOCATION.—The oral testimony of any 

16 person taken pursuant to a civil investigative 

17 demand shall be taken in the judicial district of 

18 the United States in which such person resides, 

19 is found, or transacts business, or in such other 

20 place as may be agreed upon by the Bureau in21 vestigator before whom the oral testimony of 

22 such person is to be taken and such person. 

23 (D) ATTORNEY REPRESENTATION.— 

24 (i) IN GENERAL.—Any person com25 pelled to appear under a civil investigative 


sroberts on DSKH9S0YB1PROD with BILLS
1337 

•S 3217 AMDT 3739 

1 demand for oral testimony pursuant to this 

2 section may be accompanied, represented, 

3 and advised by an attorney. 

4 (ii) AUTHORITY.—The attorney may 

5 advise a person described in clause (i), in 

6 confidence, either upon the request of such 

7 person or upon the initiative of the attor8 ney, with respect to any question asked of 

9 such person. 

10 (iii) OBJECTIONS.—A person de11 scribed in clause (i), or the attorney for 

12 that person, may object on the record to 

13 any question, in whole or in part, and such 

14 person shall briefly state for the record the 

15 reason for the objection. An objection may 

16 properly be made, received, and entered 

17 upon the record when it is claimed that 

18 such person is entitled to refuse to answer 

19 the question on grounds of any constitu20 tional or other legal right or privilege, in21 cluding the privilege against self-incrimina22 tion, but such person shall not otherwise 

23 object to or refuse to answer any question, 

24 and such person or attorney shall not oth25 erwise interrupt the oral examination. 


sroberts on DSKH9S0YB1PROD with BILLS
1338 

•S 3217 AMDT 3739 

1 (iv) REFUSAL TO ANSWER.—If a per2 son described in clause (i) refuses to an3 swer any question— 

4 (I) the Bureau may petition the 

5 district court of the United States 

6 pursuant to this section for an order 

7 compelling such person to answer 

8 such question; and 

9 (II) on grounds of the privilege 

10 against self-incrimination, the testi11 mony of such person may be com12 pelled in accordance with the provi13 sions of section 6004 of title 18, 

14 United States Code. 

15 (E) TRANSCRIPTS.—For purposes of this 

16 subsection— 

17 (i) after the testimony of any witness 

18 is fully transcribed, the Bureau investi19 gator shall afford the witness (who may be 

20 accompanied by an attorney) a reasonable 

21 opportunity to examine the transcript; 

22 (ii) the transcript shall be read to or 

23 by the witness, unless such examination 

24 and reading are waived by the witness; 


sroberts on DSKH9S0YB1PROD with BILLS
1339 

•S 3217 AMDT 3739 

1 (iii) any changes in form or substance 

2 which the witness desires to make shall be 

3 entered and identified upon the transcript 

4 by the Bureau investigator, with a state5 ment of the reasons given by the witness 

6 for making such changes; 

7 (iv) the transcript shall be signed by 

8 the witness, unless the witness in writing 

9 waives the signing, is ill, cannot be found, 

10 or refuses to sign; and 

11 (v) if the transcript is not signed by 

12 the witness during the 30-day period fol13 lowing the date on which the witness is 

14 first afforded a reasonable opportunity to 

15 examine the transcript, the Bureau investi16 gator shall sign the transcript and state on 

17 the record the fact of the waiver, illness, 

18 absence of the witness, or the refusal to 

19 sign, together with any reasons given for 

20 the failure to sign. 

21 (F) CERTIFICATION BY INVESTIGATOR.— 

22 The Bureau investigator shall certify on the 

23 transcript that the witness was duly sworn by 

24 him or her and that the transcript is a true 

25 record of the testimony given by the witness, 


sroberts on DSKH9S0YB1PROD with BILLS
1340 

•S 3217 AMDT 3739 

1 and the Bureau investigator shall promptly de2 liver the transcript or send it by registered or 

3 certified mail to the custodian. 

4 (G) COPY OF TRANSCRIPT.—The Bureau 

5 investigator shall furnish a copy of the tran6 script (upon payment of reasonable charges for 

7 the transcript) to the witness only, except that 

8 the Bureau may for good cause limit such wit9 ness to inspection of the official transcript of 

10 his testimony. 

11 (H) WITNESS FEES.—Any witness appear12 ing for the taking of oral testimony pursuant to 

13 a civil investigative demand shall be entitled to 

14 the same fees and mileage which are paid to 

15 witnesses in the district courts of the United 

16 States. 

17 (d) CONFIDENTIAL TREATMENT OF DEMAND MATE18 RIAL.— 

19 (1) IN GENERAL.—Documentary materials and 

20 tangible things received as a result of a civil inves21 tigative demand shall be subject to requirements and 

22 procedures regarding confidentiality, in accordance 

23 with rules established by the Bureau. 

24 (2) DISCLOSURE TO CONGRESS.—No rule es25 tablished by the Bureau regarding the confidentiality 


sroberts on DSKH9S0YB1PROD with BILLS
1341 

•S 3217 AMDT 3739 

1 of materials submitted to, or otherwise obtained by, 

2 the Bureau shall be intended to prevent disclosure to 

3 either House of Congress or to an appropriate com4 mittee of the Congress, except that the Bureau is 

5 permitted to adopt rules allowing prior notice to any 

6 party that owns or otherwise provided the material 

7 to the Bureau and had designated such material as 

8 confidential. 

9 (e) PETITION FOR ENFORCEMENT.— 

10 (1) IN GENERAL.—Whenever any person fails 

11 to comply with any civil investigative demand duly 

12 served upon him under this section, or whenever sat13 isfactory copying or reproduction of material re14 quested pursuant to the demand cannot be accom15 plished and such person refuses to surrender such 

16 material, the Bureau, through such officers or attor17 neys as it may designate, may file, in the district 

18 court of the United States for any judicial district 

19 in which such person resides, is found, or transacts 

20 business, and serve upon such person, a petition for 

21 an order of such court for the enforcement of this 

22 section. 

23 (2) SERVICE OF PROCESS.—All process of any 

24 court to which application may be made as provided 


sroberts on DSKH9S0YB1PROD with BILLS
1342 

•S 3217 AMDT 3739 

1 in this subsection may be served in any judicial dis2 trict. 

3 (f) PETITION FOR ORDER MODIFYING OR SETTING

4 ASIDE DEMAND.— 

5 (1) IN GENERAL.—Not later than 20 days after 

6 the service of any civil investigative demand upon 

7 any person under subsection (b), or at any time be8 fore the return date specified in the demand, which9 ever period is shorter, or within such period exceed10 ing 20 days after service or in excess of such return 

11 date as may be prescribed in writing, subsequent to 

12 service, by any Bureau investigator named in the de13 mand, such person may file with the Bureau a peti14 tion for an order by the Bureau modifying or setting 

15 aside the demand. 

16 (2) COMPLIANCE DURING PENDENCY.—The 

17 time permitted for compliance with the demand in 

18 whole or in part, as determined proper and ordered 

19 by the Bureau, shall not run during the pendency of 

20 a petition under paragraph (1) at the Bureau, ex21 cept that such person shall comply with any portions 

22 of the demand not sought to be modified or set 

23 aside. 

24 (3) SPECIFIC GROUNDS.—A petition under 

25 paragraph (1) shall specify each ground upon which 


sroberts on DSKH9S0YB1PROD with BILLS
1343 

•S 3217 AMDT 3739 

1 the petitioner relies in seeking relief, and may be 

2 based upon any failure of the demand to comply 

3 with the provisions of this section, or upon any con4 stitutional or other legal right or privilege of such 

5 person. 

6 (g) CUSTODIAL CONTROL.—At any time during 

7 which any custodian is in custody or control of any docu8 mentary material, tangible things, reports, answers to 

9 questions, or transcripts of oral testimony given by any 

10 person in compliance with any civil investigative demand, 

11 such person may file, in the district court of the United 

12 States for the judicial district within which the office of 

13 such custodian is situated, and serve upon such custodian, 

14 a petition for an order of such court requiring the per15 formance by such custodian of any duty imposed upon him 

16 by this section or rule promulgated by the Bureau. 

17 (h) JURISDICTION OF COURT.— 

18 (1) IN GENERAL.—Whenever any petition is 

19 filed in any district court of the United States under 

20 this section, such court shall have jurisdiction to 

21 hear and determine the matter so presented, and to 

22 enter such order or orders as may be required to 

23 carry out the provisions of this section. 

24 (2) APPEAL.—Any final order entered as de25 scribed in paragraph (1) shall be subject to appeal 


sroberts on DSKH9S0YB1PROD with BILLS
1344 

•S 3217 AMDT 3739 

1 pursuant to section 1291 of title 28, United States 

2 Code. 

3 SEC. 1053. HEARINGS AND ADJUDICATION PROCEEDINGS. 

4 (a) IN GENERAL.—The Bureau is authorized to con5 duct hearings and adjudication proceedings with respect 

6 to any person in the manner prescribed by chapter 5 of 

7 title 5, United States Code in order to ensure or enforce 

8 compliance with— 

9 (1) the provisions of this title, including any 

10 rules prescribed by the Bureau under this title; and 

11 (2) any other Federal law that the Bureau is 

12 authorized to enforce, including an enumerated con13 sumer law, and any regulations or order prescribed 

14 thereunder, unless such Federal law specifically lim15 its the Bureau from conducting a hearing or adju16 dication proceeding and only to the extent of such 

17 limitation. 

18 (b) SPECIAL RULES FOR CEASE-AND-DESIST PRO19 CEEDINGS.— 

20 (1) ORDERS AUTHORIZED.— 

21 (A) IN GENERAL.—If, in the opinion of the 

22 Bureau, any covered person or service provider 

23 is engaging or has engaged in an activity that 

24 violates a law, rule, or any condition imposed in 

25 writing on the person by the Bureau, the BuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01344 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1345 

•S 3217 AMDT 3739 

1 reau may, subject to sections 1024, 1025, and 

2 1026, issue and serve upon the covered person 

3 or service provider a notice of charges in re4 spect thereof. 

5 (B) CONTENT OF NOTICE.—The notice 

6 under subparagraph (A) shall contain a state7 ment of the facts constituting the alleged viola8 tion or violations, and shall fix a time and place 

9 at which a hearing will be held to determine 

10 whether an order to cease and desist should 

11 issue against the covered person or service pro12 vider, such hearing to be held not earlier than 

13 30 days nor later than 60 days after the date 

14 of service of such notice, unless an earlier or a 

15 later date is set by the Bureau, at the request 

16 of any party so served. 

17 (C) CONSENT.—Unless the party or par18 ties served under subparagraph (B) appear at 

19 the hearing personally or by a duly authorized 

20 representative, such person shall be deemed to 

21 have consented to the issuance of the cease-and22 desist order. 

23 (D) PROCEDURE.—In the event of consent 

24 under subparagraph (C), or if, upon the record, 

25 made at any such hearing, the Bureau finds 


sroberts on DSKH9S0YB1PROD with BILLS
1346 

•S 3217 AMDT 3739 

1 that any violation specified in the notice of 

2 charges has been established, the Bureau may 

3 issue and serve upon the covered person or 

4 service provider an order to cease and desist 

5 from the violation or practice. Such order may, 

6 by provisions which may be mandatory or other7 wise, require the covered person or service pro8 vider to cease and desist from the subject activ9 ity, and to take affirmative action to correct the 

10 conditions resulting from any such violation. 

11 (2) EFFECTIVENESS OF ORDER.—A cease-and12 desist order shall become effective at the expiration 

13 of 30 days after the date of service of an order 

14 under paragraph (1) upon the covered person or 

15 service provider concerned (except in the case of a 

16 cease-and-desist order issued upon consent, which 

17 shall become effective at the time specified therein), 

18 and shall remain effective and enforceable as pro19 vided therein, except to such extent as the order is 

20 stayed, modified, terminated, or set aside by action 

21 of the Bureau or a reviewing court. 

22 (3) DECISION AND APPEAL.—Any hearing pro23 vided for in this subsection shall be held in the Fed24 eral judicial district or in the territory in which the 

25 residence or principal office or place of business of 


sroberts on DSKH9S0YB1PROD with BILLS
1347 

•S 3217 AMDT 3739 

1 the person is located unless the person consents to 

2 another place, and shall be conducted in accordance 

3 with the provisions of chapter 5 of title 5 of the 

4 United States Code. After such hearing, and within 

5 90 days after the Bureau has notified the parties 

6 that the case has been submitted to the Bureau for 

7 final decision, the Bureau shall render its decision 

8 (which shall include findings of fact upon which its 

9 decision is predicated) and shall issue and serve 

10 upon each party to the proceeding an order or or11 ders consistent with the provisions of this section. 

12 Judicial review of any such order shall be exclusively 

13 as provided in this subsection. Unless a petition for 

14 review is timely filed in a court of appeals of the 

15 United States, as provided in paragraph (4), and 

16 thereafter until the record in the proceeding has 

17 been filed as provided in paragraph (4), the Bureau 

18 may at any time, upon such notice and in such man19 ner as the Bureau shall determine proper, modify, 

20 terminate, or set aside any such order. Upon filing 

21 of the record as provided, the Bureau may modify, 

22 terminate, or set aside any such order with permis23 sion of the court. 

24 (4) APPEAL TO COURT OF APPEALS.—Any 

25 party to any proceeding under this subsection may 


sroberts on DSKH9S0YB1PROD with BILLS
1348 

•S 3217 AMDT 3739 

1 obtain a review of any order served pursuant to this 

2 subsection (other than an order issued with the con3 sent of the person concerned) by the filing in the 

4 court of appeals of the United States for the circuit 

5 in which the principal office of the covered person is 

6 located, or in the United States Court of Appeals for 

7 the District of Columbia Circuit, within 30 days 

8 after the date of service of such order, a written pe9 tition praying that the order of the Bureau be modi10 fied, terminated, or set aside. A copy of such peti11 tion shall be forthwith transmitted by the clerk of 

12 the court to the Bureau, and thereupon the Bureau 

13 shall file in the court the record in the proceeding, 

14 as provided in section 2112 of title 28 of the United 

15 States Code. Upon the filing of such petition, such 

16 court shall have jurisdiction, which upon the filing of 

17 the record shall except as provided in the last sen18 tence of paragraph (3) be exclusive, to affirm, mod19 ify, terminate, or set aside, in whole or in part, the 

20 order of the Bureau. Review of such proceedings 

21 shall be had as provided in chapter 7 of title 5 of 

22 the United States Code. The judgment and decree of 

23 the court shall be final, except that the same shall 

24 be subject to review by the Supreme Court of the 


sroberts on DSKH9S0YB1PROD with BILLS
1349 

•S 3217 AMDT 3739 

1 United States, upon certiorari, as provided in section 

2 1254 of title 28 of the United States Code. 

3 (5) NO STAY.—The commencement of pro4 ceedings for judicial review under paragraph (4) 

5 shall not, unless specifically ordered by the court, 

6 operate as a stay of any order issued by the Bureau. 

7 (c) SPECIAL RULES FOR TEMPORARY CEASE-AND8 DESIST PROCEEDINGS.— 

9 (1) IN GENERAL.—Whenever the Bureau deter10 mines that the violation specified in the notice of 

11 charges served upon a person, including a service 

12 provider, pursuant to subsection (b), or the continu13 ation thereof, is likely to cause the person to be in14 solvent or otherwise prejudice the interests of con15 sumers before the completion of the proceedings con16 ducted pursuant to subsection (b), the Bureau may 

17 issue a temporary order requiring the person to 

18 cease and desist from any such violation or practice 

19 and to take affirmative action to prevent or remedy 

20 such insolvency or other condition pending comple21 tion of such proceedings. Such order may include 

22 any requirement authorized under this subtitle. Such 

23 order shall become effective upon service upon the 

24 person and, unless set aside, limited, or suspended 

25 by a court in proceedings authorized by paragraph 


sroberts on DSKH9S0YB1PROD with BILLS
1350 

•S 3217 AMDT 3739 

1 (2), shall remain effective and enforceable pending 

2 the completion of the administrative proceedings 

3 pursuant to such notice and until such time as the 

4 Bureau shall dismiss the charges specified in such 

5 notice, or if a cease-and-desist order is issued 

6 against the person, until the effective date of such 

7 order. 

8 (2) APPEAL.—Not later than 10 days after the 

9 covered person or service provider concerned has 

10 been served with a temporary cease-and-desist order, 

11 the person may apply to the United States district 

12 court for the judicial district in which the residence 

13 or principal office or place of business of the person 

14 is located, or the United States District Court for 

15 the District of Columbia, for an injunction setting 

16 aside, limiting, or suspending the enforcement, oper17 ation, or effectiveness of such order pending the 

18 completion of the administrative proceedings pursu19 ant to the notice of charges served upon the person 

20 under subsection (b), and such court shall have ju21 risdiction to issue such injunction. 

22 (3) INCOMPLETE OR INACCURATE RECORDS.— 

23 (A) TEMPORARY ORDER.—If a notice of 

24 charges served under subsection (b) specifies, 

25 on the basis of particular facts and cirVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01350 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1351 

•S 3217 AMDT 3739 

1 cumstances, that the books and records of a 

2 covered person or service provider are so incom3 plete or inaccurate that the Bureau is unable to 

4 determine the financial condition of that person 

5 or the details or purpose of any transaction or 

6 transactions that may have a material effect on 

7 the financial condition of that person, the Bu8 reau may issue a temporary order requiring— 

9 (i) the cessation of any activity or 

10 practice which gave rise, whether in whole 

11 or in part, to the incomplete or inaccurate 

12 state of the books or records; or 

13 (ii) affirmative action to restore such 

14 books or records to a complete and accu15 rate state, until the completion of the pro16 ceedings under subsection (b)(1). 

17 (B) EFFECTIVE PERIOD.—Any temporary 

18 order issued under subparagraph (A)— 

19 (i) shall become effective upon service; 

20 and 

21 (ii) unless set aside, limited, or sus22 pended by a court in proceedings under 

23 paragraph (2), shall remain in effect and 

24 enforceable until the earlier of— 


sroberts on DSKH9S0YB1PROD with BILLS
1352 

•S 3217 AMDT 3739 

1 (I) the completion of the pro2 ceeding initiated under subsection (b) 

3 in connection with the notice of 

4 charges; or 

5 (II) the date the Bureau deter6 mines, by examination or otherwise, 

7 that the books and records of the cov8 ered person or service provider are ac9 curate and reflect the financial condi10 tion thereof. 

11 (d) SPECIAL RULES FOR ENFORCEMENT OF OR12 DERS.— 

13 (1) IN GENERAL.—The Bureau may in its dis14 cretion apply to the United States district court 

15 within the jurisdiction of which the principal office 

16 or place of business of the person is located, for the 

17 enforcement of any effective and outstanding notice 

18 or order issued under this section, and such court 

19 shall have jurisdiction and power to order and re20 quire compliance herewith. 

21 (2) EXCEPTION.—Except as otherwise provided 

22 in this subsection, no court shall have jurisdiction to 

23 affect by injunction or otherwise the issuance or en24 forcement of any notice or order or to review, modVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01352 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1353 

•S 3217 AMDT 3739 

1 ify, suspend, terminate, or set aside any such notice 

2 or order. 

3 (e) RULES.—The Bureau shall prescribe rules estab4 lishing such procedures as may be necessary to carry out 

5 this section. 

6 SEC. 1054. LITIGATION AUTHORITY. 

7 (a) IN GENERAL.—If any person violates a Federal 

8 consumer financial law, the Bureau may, subject to sec9 tions 1024, 1025, and 1026, commence a civil action 

10 against such person to impose a civil penalty or to seek 

11 all appropriate legal and equitable relief including a per12 manent or temporary injunction as permitted by law. 

13 (b) REPRESENTATION.—The Bureau may act in its 

14 own name and through its own attorneys in enforcing any 

15 provision of this title, rules thereunder, or any other law 

16 or regulation, or in any action, suit, or proceeding to which 

17 the Bureau is a party. 

18 (c) COMPROMISE OF ACTIONS.—The Bureau may 

19 compromise or settle any action if such compromise is ap20 proved by the court. 

21 (d) NOTICE TO THE ATTORNEY GENERAL.—When 

22 commencing a civil action under Federal consumer finan23 cial law, or any rule thereunder, the Bureau shall notify 

24 the Attorney General and, with respect to a civil action 


sroberts on DSKH9S0YB1PROD with BILLS
1354 

•S 3217 AMDT 3739 

1 against an insured depository institution or insured credit 

2 union, the appropriate prudential regulator. 

3 (e) APPEARANCE BEFORE THE SUPREME COURT.— 

4 The Bureau may represent itself in its own name before 

5 the Supreme Court of the United States, provided that 

6 the Bureau makes a written request to the Attorney Gen7 eral within the 10-day period which begins on the date 

8 of entry of the judgment which would permit any party 

9 to file a petition for writ of certiorari, and the Attorney 

10 General concurs with such request or fails to take action 

11 within 60 days of the request of the Bureau. 

12 (f) FORUM.—Any civil action brought under this title 

13 may be brought in a United States district court or in 

14 any court of competent jurisdiction of a state in a district 

15 in which the defendant is located or resides or is doing 

16 business, and such court shall have jurisdiction to enjoin 

17 such person and to require compliance with any Federal 

18 consumer financial law. 

19 (g) TIME FOR BRINGING ACTION.— 

20 (1) IN GENERAL.—Except as otherwise per21 mitted by law or equity, no action may be brought 

22 under this title more than 3 years after the date of 

23 discovery of the violation to which an action relates. 

24 (2) LIMITATIONS UNDER OTHER FEDERAL

25 LAWS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1355 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—For purposes of this 

2 subsection, an action arising under this title 

3 does not include claims arising solely under 

4 enumerated consumer laws. 

5 (B) BUREAU AUTHORITY.—In any action 

6 arising solely under an enumerated consumer 

7 law, the Bureau may commence, defend, or in8 tervene in the action in accordance with the re9 quirements of that provision of law, as applica10 ble. 

11 (C) TRANSFERRED AUTHORITY.—In any 

12 action arising solely under laws for which au13 thorities were transferred under subtitles F and 

14 H, the Bureau may commence, defend, or inter15 vene in the action in accordance with the re16 quirements of that provision of law, as applica17 ble. 

18 SEC. 1055. RELIEF AVAILABLE. 

19 (a) ADMINISTRATIVE PROCEEDINGS OR COURT AC20 TIONS.— 

21 (1) JURISDICTION.—The court (or the Bureau, 

22 as the case may be) in an action or adjudication pro23 ceeding brought under Federal consumer financial 

24 law, shall have jurisdiction to grant any appropriate 

25 legal or equitable relief with respect to a violation of 


sroberts on DSKH9S0YB1PROD with BILLS
1356 

•S 3217 AMDT 3739 

1 Federal consumer financial law, including a violation 

2 of a rule or order prescribed under a Federal con3 sumer financial law. 

4 (2) RELIEF.—Relief under this section may in5 clude, without limitation— 

6 (A) rescission or reformation of contracts; 

7 (B) refund of moneys or return of real 

8 property; 

9 (C) restitution; 

10 (D) disgorgement or compensation for un11 just enrichment; 

12 (E) payment of damages or other mone13 tary relief; 

14 (F) public notification regarding the viola15 tion, including the costs of notification; 

16 (G) limits on the activities or functions of 

17 the person; and 

18 (H) civil money penalties, as set forth 

19 more fully in subsection (c). 

20 (3) NO EXEMPLARY OR PUNITIVE DAMAGES.— 

21 Nothing in this subsection shall be construed as au22 thorizing the imposition of exemplary or punitive 

23 damages. 

24 (b) RECOVERY OF COSTS.—In any action brought by 

25 the Bureau, a State attorney general, or any State reguVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01356 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1357 

•S 3217 AMDT 3739 

1 lator to enforce any Federal consumer financial law, the 

2 Bureau, the State attorney general, or the State regulator 

3 may recover its costs in connection with prosecuting such 

4 action if the Bureau, the State attorney general, or the 

5 State regulator is the prevailing party in the action. 

6 (c) CIVIL MONEY PENALTY IN COURT AND ADMINIS7 TRATIVE ACTIONS.— 

8 (1) IN GENERAL.—Any person that violates, 

9 through any act or omission, any provision of Fed10 eral consumer financial law shall forfeit and pay a 

11 civil penalty pursuant to this subsection. 

12 (2) PENALTY AMOUNTS.— 

13 (A) FIRST TIER.—For any violation of a 

14 law, rule, or final order or condition imposed in 

15 writing by the Bureau, a civil penalty may not 

16 exceed $5,000 for each day during which such 

17 violation or failure to pay continues. 

18 (B) SECOND TIER.—Notwithstanding 

19 paragraph (A), for any person that recklessly 

20 engages in a violation of a Federal consumer fi21 nancial law, a civil penalty may not exceed 

22 $25,000 for each day during which such viola23 tion continues. 

24 (C) THIRD TIER.—Notwithstanding sub25 paragraphs (A) and (B), for any person that 


sroberts on DSKH9S0YB1PROD with BILLS
1358 

•S 3217 AMDT 3739 

1 knowingly violates a Federal consumer financial 

2 law, a civil penalty may not exceed $1,000,000 

3 for each day during which such violation con4 tinues. 

5 (3) MITIGATING FACTORS.—In determining the 

6 amount of any penalty assessed under paragraph 

7 (2), the Bureau or the court shall take into account 

8 the appropriateness of the penalty with respect to— 

9 (A) the size of financial resources and good 

10 faith of the person charged; 

11 (B) the gravity of the violation or failure 

12 to pay; 

13 (C) the severity of the risks to or losses of 

14 the consumer, which may take into account the 

15 number of products or services sold or provided; 

16 (D) the history of previous violations; and 

17 (E) such other matters as justice may re18 quire. 

19 (4) AUTHORITY TO MODIFY OR REMIT PEN20 ALTY.—The Bureau may compromise, modify, or 

21 remit any penalty which may be assessed or had al22 ready been assessed under paragraph (2). The 

23 amount of such penalty, when finally determined, 

24 shall be exclusive of any sums owed by the person 

25 to the United States in connection with the costs of 


sroberts on DSKH9S0YB1PROD with BILLS
1359 

•S 3217 AMDT 3739 

1 the proceeding, and may be deducted from any sums 

2 owing by the United States to the person charged. 

3 (5) NOTICE AND HEARING.—No civil penalty 

4 may be assessed under this subsection with respect 

5 to a violation of any Federal consumer financial law, 

6 unless— 

7 (A) the Bureau gives notice and an oppor8 tunity for a hearing to the person accused of 

9 the violation; or 

10 (B) the appropriate court has ordered such 

11 assessment and entered judgment in favor of 

12 the Bureau. 

13 SEC. 1056. REFERRALS FOR CRIMINAL PROCEEDINGS. 

14 If the Bureau obtains evidence that any person, do15 mestic or foreign, has engaged in conduct that may con16 stitute a violation of Federal criminal law, the Bureau 

17 shall have the power to transmit such evidence to the At18 torney General of the United States, who may institute 

19 criminal proceedings under appropriate law. Nothing in 

20 this section affects any other authority of the Bureau to 

21 disclose information. 

22 SEC. 1057. EMPLOYEE PROTECTION. 

23 (a) IN GENERAL.—No covered person or service pro24 vider shall terminate or in any other way discriminate 

25 against, or cause to be terminated or discriminated 


sroberts on DSKH9S0YB1PROD with BILLS
1360 

•S 3217 AMDT 3739 

1 against, any covered employee or any authorized rep2 resentative of covered employees by reason of the fact that 

3 such employee or representative, whether at the initiative 

4 of the employee or in the ordinary course of the duties 

5 of the employee (or any person acting pursuant to a re6 quest of the employee), has— 

7 (1) provided, caused to be provided, or is about 

8 to provide or cause to be provided, information to 

9 the employer, the Bureau, or any other State, local, 

10 or Federal, government authority or law enforce11 ment agency relating to any violation of, or any act 

12 or omission that the employee reasonably believes to 

13 be a violation of, any provision of this title or any 

14 other provision of law that is subject to the jurisdic15 tion of the Bureau, or any rule, order, standard, or 

16 prohibition prescribed by the Bureau; 

17 (2) testified or will testify in any proceeding re18 sulting from the administration or enforcement of 

19 any provision of this title or any other provision of 

20 law that is subject to the jurisdiction of the Bureau, 

21 or any rule, order, standard, or prohibition pre22 scribed by the Bureau; 

23 (3) filed, instituted, or caused to be filed or in24 stituted any proceeding under any Federal consumer 

25 financial law; or 


sroberts on DSKH9S0YB1PROD with BILLS
1361 

•S 3217 AMDT 3739 

1 (4) objected to, or refused to participate in, any 

2 activity, policy, practice, or assigned task that the 

3 employee (or other such person) reasonably believed 

4 to be in violation of any law, rule, order, standard, 

5 or prohibition, subject to the jurisdiction of, or en6 forceable by, the Bureau. 

7 (b) DEFINITION OF COVERED EMPLOYEE.—For the 

8 purposes of this section, the term ‘‘covered employee’’ 

9 means any individual performing tasks related to the of10 fering or provision of a consumer financial product or 

11 service. 

12 (c) PROCEDURES AND TIMETABLES.— 

13 (1) COMPLAINT.— 

14 (A) IN GENERAL.—A person who believes 

15 that he or she has been discharged or otherwise 

16 discriminated against by any person in violation 

17 of subsection (a) may, not later than 180 days 

18 after the date on which such alleged violation 

19 occurs, file (or have any person file on his or 

20 her behalf) a complaint with the Secretary of 

21 Labor alleging such discharge or discrimination 

22 and identifying the person responsible for such 

23 act. 

24 (B) ACTIONS OF SECRETARY OF LABOR.— 

25 Upon receipt of such a complaint, the Secretary 


sroberts on DSKH9S0YB1PROD with BILLS
1362 

•S 3217 AMDT 3739 

1 of Labor shall notify, in writing, the person 

2 named in the complaint who is alleged to have 

3 committed the violation, of — 

4 (i) the filing of the complaint; 

5 (ii) the allegations contained in the 

6 complaint; 

7 (iii) the substance of evidence sup8 porting the complaint; and 

9 (iv) opportunities that will be afforded 

10 to such person under paragraph (2). 

11 (2) INVESTIGATION BY SECRETARY OF

12 LABOR.— 

13 (A) IN GENERAL.—Not later than 60 days 

14 after the date of receipt of a complaint filed 

15 under paragraph (1), and after affording the 

16 complainant and the person named in the com17 plaint who is alleged to have committed the vio18 lation that is the basis for the complaint an op19 portunity to submit to the Secretary of Labor 

20 a written response to the complaint and an op21 portunity to meet with a representative of the 

22 Secretary of Labor to present statements from 

23 witnesses, the Secretary of Labor shall— 


sroberts on DSKH9S0YB1PROD with BILLS
1363 

•S 3217 AMDT 3739 

1 (i) initiate an investigation and deter2 mine whether there is reasonable cause to 

3 believe that the complaint has merit; and 

4 (ii) notify the complainant and the 

5 person alleged to have committed the viola6 tion of subsection (a), in writing, of such 

7 determination. 

8 (B) NOTICE OF RELIEF AVAILABLE.—If 

9 the Secretary of Labor concludes that there is 

10 reasonable cause to believe that a violation of 

11 subsection (a) has occurred, the Secretary of 

12 Labor shall, together with the notice under sub13 paragraph (A)(ii), issue a preliminary order 

14 providing the relief prescribed by paragraph 

15 (4)(B). 

16 (C) REQUEST FOR HEARING.—Not later 

17 than 30 days after the date of receipt of notifi18 cation of a determination of the Secretary of 

19 Labor under this paragraph, either the person 

20 alleged to have committed the violation or the 

21 complainant may file objections to the findings 

22 or preliminary order, or both, and request a 

23 hearing on the record. The filing of such objec24 tions shall not operate to stay any reinstate25 ment remedy contained in the preliminary 


sroberts on DSKH9S0YB1PROD with BILLS
1364 

•S 3217 AMDT 3739 

1 order. Any such hearing shall be conducted ex2 peditiously, and if a hearing is not requested in 

3 such 30-day period, the preliminary order shall 

4 be deemed a final order that is not subject to 

5 judicial review. 

6 (3) GROUNDS FOR DETERMINATION OF COM7 PLAINTS.— 

8 (A) IN GENERAL.—The Secretary of Labor 

9 shall dismiss a complaint filed under this sub10 section, and shall not conduct an investigation 

11 otherwise required under paragraph (2), unless 

12 the complainant makes a prima facie showing 

13 that any behavior described in paragraphs (1) 

14 through (4) of subsection (a) was a contrib15 uting factor in the unfavorable personnel action 

16 alleged in the complaint. 

17 (B) REBUTTAL EVIDENCE.—Notwith18 standing a finding by the Secretary of Labor 

19 that the complainant has made the showing re20 quired under subparagraph (A), no investiga21 tion otherwise required under paragraph (2) 

22 shall be conducted, if the employer dem23 onstrates, by clear and convincing evidence, 

24 that the employer would have taken the same 


sroberts on DSKH9S0YB1PROD with BILLS
1365 

•S 3217 AMDT 3739 

1 unfavorable personnel action in the absence of 

2 that behavior. 

3 (C) EVIDENTIARY STANDARDS.—The Sec4 retary of Labor may determine that a violation 

5 of subsection (a) has occurred only if the com6 plainant demonstrates that any behavior de7 scribed in paragraphs (1) through (4) of sub8 section (a) was a contributing factor in the un9 favorable personnel action alleged in the com10 plaint. Relief may not be ordered under sub11 paragraph (A) if the employer demonstrates by 

12 clear and convincing evidence that the employer 

13 would have taken the same unfavorable per14 sonnel action in the absence of that behavior. 

15 (4) ISSUANCE OF FINAL ORDERS; REVIEW PRO16 CEDURES.— 

17 (A) TIMING.—Not later than 120 days 

18 after the date of conclusion of any hearing 

19 under paragraph (2), the Secretary of Labor 

20 shall issue a final order providing the relief pre21 scribed by this paragraph or denying the com22 plaint. At any time before issuance of a final 

23 order, a proceeding under this subsection may 

24 be terminated on the basis of a settlement 

25 agreement entered into by the Secretary of 


sroberts on DSKH9S0YB1PROD with BILLS
1366 

•S 3217 AMDT 3739 

1 Labor, the complainant, and the person alleged 

2 to have committed the violation. 

3 (B) PENALTIES.— 

4 (i) ORDER OF SECRETARY OF

5 LABOR.—If, in response to a complaint 

6 filed under paragraph (1), the Secretary of 

7 Labor determines that a violation of sub8 section (a) has occurred, the Secretary of 

9 Labor shall order the person who com10 mitted such violation— 

11 (I) to take affirmative action to 

12 abate the violation; 

13 (II) to reinstate the complainant 

14 to his or her former position, together 

15 with compensation (including back 

16 pay) and restore the terms, condi17 tions, and privileges associated with 

18 his or her employment; and 

19 (III) to provide compensatory 

20 damages to the complainant. 

21 (ii) PENALTY.—If an order is issued 

22 under clause (i), the Secretary of Labor, at 

23 the request of the complainant, shall assess 

24 against the person against whom the order 

25 is issued, a sum equal to the aggregate 


sroberts on DSKH9S0YB1PROD with BILLS
1367 

•S 3217 AMDT 3739 

1 amount of all costs and expenses (includ2 ing attorney fees and expert witness fees) 

3 reasonably incurred, as determined by the 

4 Secretary of Labor, by the complainant 

5 for, or in connection with, the bringing of 

6 the complaint upon which the order was 

7 issued. 

8 (C) PENALTY FOR FRIVOLOUS CLAIMS.—If 

9 the Secretary of Labor finds that a complaint 

10 under paragraph (1) is frivolous or has been 

11 brought in bad faith, the Secretary of Labor 

12 may award to the prevailing employer a reason13 able attorney fee, not exceeding $1,000, to be 

14 paid by the complainant. 

15 (D) DE NOVO REVIEW.— 

16 (i) FAILURE OF THE SECRETARY TO

17 ACT.—If the Secretary of Labor has not 

18 issued a final order within 210 days after 

19 the date of filing of a complaint under this 

20 subsection, or within 90 days after the 

21 date of receipt of a written determination, 

22 the complainant may bring an action at 

23 law or equity for de novo review in the ap24 propriate district court of the United 

25 States having jurisdiction, which shall have 


sroberts on DSKH9S0YB1PROD with BILLS
1368 

•S 3217 AMDT 3739 

1 jurisdiction over such an action without re2 gard to the amount in controversy, and 

3 which action shall, at the request of either 

4 party to such action, be tried by the court 

5 with a jury. 

6 (ii) PROCEDURES.—A proceeding 

7 under clause (i) shall be governed by the 

8 same legal burdens of proof specified in 

9 paragraph (3). The court shall have juris10 diction to grant all relief necessary to 

11 make the employee whole, including injunc12 tive relief and compensatory damages, in13 cluding— 

14 (I) reinstatement with the same 

15 seniority status that the employee 

16 would have had, but for the discharge 

17 or discrimination; 

18 (II) the amount of back pay, with 

19 interest; and 

20 (III) compensation for any spe21 cial damages sustained as a result of 

22 the discharge or discrimination, in23 cluding litigation costs, expert witness 

24 fees, and reasonable attorney fees. 


sroberts on DSKH9S0YB1PROD with BILLS
1369 

•S 3217 AMDT 3739 

1 (E) OTHER APPEALS.—Unless the com2 plainant brings an action under subparagraph 

3 (D), any person adversely affected or aggrieved 

4 by a final order issued under subparagraph (A) 

5 may file a petition for review of the order in the 

6 United States Court of Appeals for the circuit 

7 in which the violation with respect to which the 

8 order was issued, allegedly occurred or the cir9 cuit in which the complainant resided on the 

10 date of such violation, not later than 60 days 

11 after the date of the issuance of the final order 

12 of the Secretary of Labor under subparagraph 

13 (A). Review shall conform to chapter 7 of title 

14 5, United States Code. The commencement of 

15 proceedings under this subparagraph shall not, 

16 unless ordered by the court, operate as a stay 

17 of the order. An order of the Secretary of 

18 Labor with respect to which review could have 

19 been obtained under this subparagraph shall 

20 not be subject to judicial review in any criminal 

21 or other civil proceeding. 

22 (5) FAILURE TO COMPLY WITH ORDER.— 

23 (A) ACTIONS BY THE SECRETARY.—If any 

24 person has failed to comply with a final order 

25 issued under paragraph (4), the Secretary of 


sroberts on DSKH9S0YB1PROD with BILLS
1370 

•S 3217 AMDT 3739 

1 Labor may file a civil action in the United 

2 States district court for the district in which 

3 the violation was found to have occurred, or in 

4 the United States district court for the District 

5 of Columbia, to enforce such order. In actions 

6 brought under this paragraph, the district 

7 courts shall have jurisdiction to grant all appro8 priate relief including injunctive relief and com9 pensatory damages. 

10 (B) CIVIL ACTIONS TO COMPEL COMPLI11 ANCE.—A person on whose behalf an order was 

12 issued under paragraph (4) may commence a 

13 civil action against the person to whom such 

14 order was issued to require compliance with 

15 such order. The appropriate United States dis16 trict court shall have jurisdiction, without re17 gard to the amount in controversy or the citi18 zenship of the parties, to enforce such order. 

19 (C) AWARD OF COSTS AUTHORIZED.—The 

20 court, in issuing any final order under this 

21 paragraph, may award costs of litigation (in22 cluding reasonable attorney and expert witness 

23 fees) to any party, whenever the court deter24 mines such award is appropriate. 


sroberts on DSKH9S0YB1PROD with BILLS
1371 

•S 3217 AMDT 3739 

1 (D) MANDAMUS PROCEEDINGS.—Any non2 discretionary duty imposed by this section shall 

3 be enforceable in a mandamus proceeding 

4 brought under section 1361 of title 28, United 

5 States Code. 

6 (d) UNENFORCEABILITY OF CERTAIN AGREE7 MENTS.— 

8 (1) NO WAIVER OF RIGHTS AND REMEDIES.— 

9 Except as provided under paragraph (3), and not10 withstanding any other provision of law, the rights 

11 and remedies provided for in this section may not be 

12 waived by any agreement, policy, form, or condition 

13 of employment, including by any predispute arbitra14 tion agreement. 

15 (2) NO PREDISPUTE ARBITRATION AGREE16 MENTS.—Except as provided under paragraph (3), 

17 and notwithstanding any other provision of law, no 

18 predispute arbitration agreement shall be valid or 

19 enforceable to the extent that it requires arbitration 

20 of a dispute arising under this section. 

21 (3) EXCEPTION.—Notwithstanding paragraphs 

22 (1) and (2), an arbitration provision in a collective 

23 bargaining agreement shall be enforceable as to dis24 putes arising under subsection (a)(4), unless the BuVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01371 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1372 

•S 3217 AMDT 3739 

1 reau determines, by rule, that such provision is in2 consistent with the purposes of this title. 

3 SEC. 1058. EFFECTIVE DATE. 

4 This subtitle shall become effective on the designated 

5 transfer date. 

6 Subtitle F—Transfer of Functions 

7 and Personnel; Transitional 

8 Provisions 

9 SEC. 1061. TRANSFER OF CONSUMER FINANCIAL PROTEC10 TION FUNCTIONS. 

11 (a) DEFINED TERMS.—For purposes of this sub12 title— 

13 (1) the term ‘‘consumer financial protection 

14 functions’’ means research, rulemaking, issuance of 

15 orders or guidance, supervision, examination, and 

16 enforcement activities, powers, and duties relating to 

17 the offering or provision of consumer financial prod18 ucts or services; and 

19 (2) the terms ‘‘transferor agency’’ and ‘‘trans20 feror agencies’’ mean, respectively— 

21 (A) the Board of Governors (and any Fed22 eral reserve bank, as the context requires), the 

23 Federal Deposit Insurance Corporation, the 

24 Federal Trade Commission, the National Credit 

25 Union Administration, the Office of the CompVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01372 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1373 

•S 3217 AMDT 3739 

1 troller of the Currency, the Office of Thrift Su2 pervision, and the Department of Housing and 

3 Urban Development, and the heads of those 

4 agencies; and 

5 (B) the agencies listed in subparagraph 

6 (A), collectively. 

7 (b) IN GENERAL.—Except as provided in subsection 

8 (c), consumer financial protection functions are trans9 ferred as follows: 

10 (1) BOARD OF GOVERNORS.— 

11 (A) TRANSFER OF FUNCTIONS.—All con12 sumer financial protection functions of the 

13 Board of Governors are transferred to the Bu14 reau. 

15 (B) BOARD OF GOVERNORS AUTHORITY.— 

16 The Bureau shall have all powers and duties 

17 that were vested in the Board of Governors, re18 lating to consumer financial protection func19 tions, on the day before the designated transfer 

20 date. 

21 (2) COMPTROLLER OF THE CURRENCY.— 

22 (A) TRANSFER OF FUNCTIONS.—All con23 sumer financial protection functions of the 

24 Comptroller of the Currency are transferred to 

25 the Bureau. 


sroberts on DSKH9S0YB1PROD with BILLS
1374 

•S 3217 AMDT 3739 

1 (B) COMPTROLLER AUTHORITY.—The Bu2 reau shall have all powers and duties that were 

3 vested in the Comptroller of the Currency, re4 lating to consumer financial protection func5 tions, on the day before the designated transfer 

6 date. 

7 (3) DIRECTOR OF THE OFFICE OF THRIFT SU8 PERVISION.— 

9 (A) TRANSFER OF FUNCTIONS.—All con10 sumer financial protection functions of the Di11 rector of the Office of Thrift Supervision are 

12 transferred to the Bureau. 

13 (B) DIRECTOR AUTHORITY.—The Bureau 

14 shall have all powers and duties that were vest15 ed in the Director of the Office of Thrift Super16 vision, relating to consumer financial protection 

17 functions, on the day before the designated 

18 transfer date. 

19 (4) FEDERAL DEPOSIT INSURANCE CORPORA20 TION.— 

21 (A) TRANSFER OF FUNCTIONS.—All con22 sumer financial protection functions of the Fed23 eral Deposit Insurance Corporation are trans24 ferred to the Bureau. 


sroberts on DSKH9S0YB1PROD with BILLS
1375 

•S 3217 AMDT 3739 

1 (B) CORPORATION AUTHORITY.—The Bu2 reau shall have all powers and duties that were 

3 vested in the Federal Deposit Insurance Cor4 poration, relating to consumer financial protec5 tion functions, on the day before the designated 

6 transfer date. 

7 (5) FEDERAL TRADE COMMISSION.— 

8 (A) TRANSFER OF FUNCTIONS.—Except as 

9 provided in subparagraph (C), all consumer fi10 nancial protection functions of the Federal 

11 Trade Commission are transferred to the Bu12 reau. 

13 (B) COMMISSION AUTHORITY.—Except as 

14 provided in subparagraph (C), the Bureau shall 

15 have all powers and duties that were vested in 

16 the Federal Trade Commission relating to con17 sumer financial protection functions on the day 

18 before the designated transfer date. 

19 (C) CONTINUATION OF CERTAIN COMMIS20 SION AUTHORITIES.—Notwithstanding subpara21 graphs (A) and (B), the Federal Trade Com22 mission shall continue to have authority to en23 force, and issue rules with respect to— 

24 (i) the Credit Repair Organizations 

25 Act (15 U.S.C. 1679 et seq.); 


sroberts on DSKH9S0YB1PROD with BILLS
1376 

•S 3217 AMDT 3739 

1 (ii) section 5 of the Federal Trade 

2 Commission Act (15 U.S.C. 45); and 

3 (iii) the Telemarketing and Consumer 

4 Fraud and Abuse Prevention Act (15 

5 U.S.C. 6101 et seq.). 

6 (6) NATIONAL CREDIT UNION ADMINISTRA7 TION.— 

8 (A) TRANSFER OF FUNCTIONS.—All con9 sumer financial protection functions of the Na10 tional Credit Union Administration are trans11 ferred to the Bureau. 

12 (B) NATIONAL CREDIT UNION ADMINIS13 TRATION AUTHORITY.—The Bureau shall have 

14 all powers and duties that were vested in the 

15 National Credit Union Administration, relating 

16 to consumer financial protection functions, on 

17 the day before the designated transfer date. 

18 (7) DEPARTMENT OF HOUSING AND URBAN DE19 VELOPMENT.— 

20 (A) TRANSFER OF FUNCTIONS.—All con21 sumer protection functions of the Secretary of 

22 the Department of Housing and Urban Devel23 opment relating to the Real Estate Settlement 

24 Procedures Act of 1974 (12 U.S.C. 2601 et 

25 seq.) and the Secure and Fair Enforcement for 


sroberts on DSKH9S0YB1PROD with BILLS
1377 

•S 3217 AMDT 3739 

1 Mortgage Licensing Act of 2008 (12 U.S.C. 

2 5102 et seq.) are transferred to the Bureau. 

3 (B) AUTHORITY OF THE DEPARTMENT OF

4 HOUSING AND URBAN DEVELOPMENT.—The 

5 Bureau shall have all powers and duties that 

6 were vested in the Secretary of the Department 

7 of Housing and Urban Development relating to 

8 the Real Estate Settlement Procedures Act of 

9 1974 (12 U.S.C. 2601 et seq.), and the Secure 

10 and Fair Enforcement for Mortgage Licensing 

11 Act of 2008 (12 U.S.C. 5101 et seq.), on the 

12 day before the designated transfer date. 

13 (c) TRANSFERS OF FUNCTIONS SUBJECT TO EXAM14 INATION AND ENFORCEMENT AUTHORITY REMAINING

15 WITH TRANSFEROR AGENCIES.—The transfers of func16 tions in subsection (b) do not affect the authority of the 

17 agencies identified in subsection (b) from conducting ex18 aminations or initiating and maintaining enforcement pro19 ceedings, including performing appropriate supervisory 

20 and support functions relating thereto, in accordance with 

21 sections 1024, 1025, and 1026. 

22 (d) EFFECTIVE DATE.—Subsections (b) and (c) shall 

23 become effective on the designated transfer date. 


sroberts on DSKH9S0YB1PROD with BILLS
1378 

•S 3217 AMDT 3739 

1 SEC. 1062. DESIGNATED TRANSFER DATE. 

2 (a) IN GENERAL.—Not later than 60 days after the 

3 date of enactment of this Act, the Secretary shall— 

4 (1) in consultation with the Chairman of the 

5 Board of Governors, the Chairperson of the Cor6 poration, the Chairman of the Federal Trade Com7 mission, the Chairman of the National Credit Union 

8 Administration Board, the Comptroller of the Cur9 rency, the Director of the Office of Thrift Super10 vision, the Secretary of the Department of Housing 

11 and Urban Development, and the Director of the Of12 fice of Management and Budget, designate a single 

13 calendar date for the transfer of functions to the 

14 Bureau under section 1061; and 

15 (2) publish notice of that designated date in the 

16 Federal Register. 

17 (b) CHANGING DESIGNATION.—The Secretary— 

18 (1) may, in consultation with the Chairman of 

19 the Board of Governors, the Chairperson of the Fed20 eral Deposit Insurance Corporation, the Chairman 

21 of the Federal Trade Commission, the Chairman of 

22 the National Credit Union Administration Board, 

23 the Comptroller of the Currency, the Director of the 

24 Office of Thrift Supervision, the Secretary of the 

25 Department of Housing and Urban Development, 

26 and the Director of the Office of Management and 


sroberts on DSKH9S0YB1PROD with BILLS
1379 

•S 3217 AMDT 3739 

1 Budget, change the date designated under sub2 section (a); and 

3 (2) shall publish notice of any changed des4 ignated date in the Federal Register. 

5 (c) PERMISSIBLE DATES.— 

6 (1) IN GENERAL.—Except as provided in para7 graph (2), any date designated under this section 

8 shall be not earlier than 180 days, nor later than 18 

9 months, after the date of enactment of this Act. 

10 (2) EXTENSION OF TIME.—The Secretary may 

11 designate a date that is later than 18 months after 

12 the date of enactment of this Act if the Secretary 

13 transmits to appropriate committees of Congress— 

14 (A) a written determination that orderly 

15 implementation of this title is not feasible be16 fore the date that is 18 months after the date 

17 of enactment of this Act; 

18 (B) an explanation of why an extension is 

19 necessary for the orderly implementation of this 

20 title; and 

21 (C) a description of the steps that will be 

22 taken to effect an orderly and timely implemen23 tation of this title within the extended time pe24 riod. 


sroberts on DSKH9S0YB1PROD with BILLS
1380 

•S 3217 AMDT 3739 

1 (3) EXTENSION LIMITED.—In no case may any 

2 date designated under this section be later than 24 

3 months after the date of enactment of this Act. 

4 SEC. 1063. SAVINGS PROVISIONS. 

5 (a) BOARD OF GOVERNORS.— 

6 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA7 TIONS NOT AFFECTED.—Section 1061(b)(1) does 

8 not affect the validity of any right, duty, or obliga9 tion of the United States, the Board of Governors 

10 (or any Federal reserve bank), or any other person 

11 that— 

12 (A) arises under any provision of law relat13 ing to any consumer financial protection func14 tion of the Board of Governors transferred to 

15 the Bureau by this title; and 

16 (B) existed on the day before the des17 ignated transfer date. 

18 (2) CONTINUATION OF SUITS.—No provision of 

19 this Act shall abate any proceeding commenced by 

20 or against the Board of Governors (or any Federal 

21 reserve bank) before the designated transfer date 

22 with respect to any consumer financial protection 

23 function of the Board of Governors (or any Federal 

24 reserve bank) transferred to the Bureau by this title, 

25 except that the Bureau, subject to sections 1024, 


sroberts on DSKH9S0YB1PROD with BILLS
1381 

•S 3217 AMDT 3739 

1 1025, and 1026, shall be substituted for the Board 

2 of Governors (or Federal reserve bank) as a party 

3 to any such proceeding as of the designated transfer 

4 date. 

5 (b) FEDERAL DEPOSIT INSURANCE CORPORATION.— 

6 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA7 TIONS NOT AFFECTED.—Section 1061(b)(4) does 

8 not affect the validity of any right, duty, or obliga9 tion of the United States, the Federal Deposit In10 surance Corporation, the Board of Directors of that 

11 Corporation, or any other person, that— 

12 (A) arises under any provision of law relat13 ing to any consumer financial protection func14 tion of the Federal Deposit Insurance Corpora15 tion transferred to the Bureau by this title; and 

16 (B) existed on the day before the des17 ignated transfer date. 

18 (2) CONTINUATION OF SUITS.—No provision of 

19 this Act shall abate any proceeding commenced by 

20 or against the Federal Deposit Insurance Corpora21 tion (or the Board of Directors of that Corporation) 

22 before the designated transfer date with respect to 

23 any consumer financial protection function of the 

24 Federal Deposit Insurance Corporation transferred 

25 to the Bureau by this title, except that the Bureau, 


sroberts on DSKH9S0YB1PROD with BILLS
1382 

•S 3217 AMDT 3739 

1 subject to sections 1024, 1025, and 1026, shall be 

2 substituted for the Federal Deposit Insurance Cor3 poration (or Board of Directors) as a party to any 

4 such proceeding as of the designated transfer date. 

5 (c) FEDERAL TRADE COMMISSION.— 

6 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA7 TIONS NOT AFFECTED.—Section 1061(b)(5) does 

8 not affect the validity of any right, duty, or obliga9 tion of the United States, the Federal Trade Com10 mission, or any other person, that— 

11 (A) arises under any provision of law relat12 ing to any consumer financial protection func13 tion of the Federal Trade Commission trans14 ferred to the Bureau by this title; and 

15 (B) existed on the day before the des16 ignated transfer date. 

17 (2) CONTINUATION OF SUITS.—No provision of 

18 this Act shall abate any proceeding commenced by 

19 or against the Federal Trade Commission before the 

20 designated transfer date with respect to any con21 sumer financial protection function of the Federal 

22 Trade Commission transferred to the Bureau by this 

23 title, except that the Bureau, subject to sections 

24 1024, 1025, and 1026, shall be substituted for the 


sroberts on DSKH9S0YB1PROD with BILLS
1383 

•S 3217 AMDT 3739 

1 Federal Trade Commission as a party to any such 

2 proceeding as of the designated transfer date. 

3 (d) NATIONAL CREDIT UNION ADMINISTRATION.— 

4 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA5 TIONS NOT AFFECTED.—Section 1061(b)(6) does 

6 not affect the validity of any right, duty, or obliga7 tion of the United States, the National Credit Union 

8 Administration, the National Credit Union Adminis9 tration Board, or any other person, that— 

10 (A) arises under any provision of law relat11 ing to any consumer financial protection func12 tion of the National Credit Union Administra13 tion transferred to the Bureau by this title; and 

14 (B) existed on the day before the des15 ignated transfer date. 

16 (2) CONTINUATION OF SUITS.—No provision of 

17 this Act shall abate any proceeding commenced by 

18 or against the National Credit Union Administration 

19 (or the National Credit Union Administration 

20 Board) before the designated transfer date with re21 spect to any consumer financial protection function 

22 of the National Credit Union Administration trans23 ferred to the Bureau by this title, except that the 

24 Bureau, subject to sections 1024, 1025, and 1026, 

25 shall be substituted for the National Credit Union 


sroberts on DSKH9S0YB1PROD with BILLS
1384 

•S 3217 AMDT 3739 

1 Administration (or National Credit Union Adminis2 tration Board) as a party to any such proceeding as 

3 of the designated transfer date. 

4 (e) OFFICE OF THE COMPTROLLER OF THE CUR5 RENCY.— 

6 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA7 TIONS NOT AFFECTED.—Section 1061(b)(2) does 

8 not affect the validity of any right, duty, or obliga9 tion of the United States, the Comptroller of the 

10 Currency, the Office of the Comptroller of the Cur11 rency, or any other person, that— 

12 (A) arises under any provision of law relat13 ing to any consumer financial protection func14 tion of the Comptroller of the Currency trans15 ferred to the Bureau by this title; and 

16 (B) existed on the day before the des17 ignated transfer date. 

18 (2) CONTINUATION OF SUITS.—No provision of 

19 this Act shall abate any proceeding commenced by 

20 or against the Comptroller of the Currency (or the 

21 Office of the Comptroller of the Currency) with re22 spect to any consumer financial protection function 

23 of the Comptroller of the Currency transferred to 

24 the Bureau by this title before the designated trans25 fer date, except that the Bureau, subject to sections 


sroberts on DSKH9S0YB1PROD with BILLS
1385 

•S 3217 AMDT 3739 

1 1024, 1025, and 1026, shall be substituted for the 

2 Comptroller of the Currency (or the Office of the 

3 Comptroller of the Currency) as a party to any such 

4 proceeding as of the designated transfer date. 

5 (f) OFFICE OF THRIFT SUPERVISION.— 

6 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA7 TIONS NOT AFFECTED.—Section 1061(b)(3) does 

8 not affect the validity of any right, duty, or obliga9 tion of the United States, the Director of the Office 

10 of Thrift Supervision, the Office of Thrift Super11 vision, or any other person, that— 

12 (A) arises under any provision of law relat13 ing to any consumer financial protection func14 tion of the Director of the Office of Thrift Su15 pervision transferred to the Bureau by this 

16 title; and 

17 (B) that existed on the day before the des18 ignated transfer date. 

19 (2) CONTINUATION OF SUITS.—No provision of 

20 this Act shall abate any proceeding commenced by 

21 or against the Director of the Office of Thrift Su22 pervision (or the Office of Thrift Supervision) with 

23 respect to any consumer financial protection func24 tion of the Director of the Office of Thrift Super25 vision transferred to the Bureau by this title before 


sroberts on DSKH9S0YB1PROD with BILLS
1386 

•S 3217 AMDT 3739 

1 the designated transfer date, except that the Bu2 reau, subject to sections 1024, 1025, and 1026, 

3 shall be substituted for the Director (or the Office 

4 of Thrift Supervision) as a party to any such pro5 ceeding as of the designated transfer date. 

6 (g) DEPARTMENT OF HOUSING AND URBAN DEVEL7 OPMENT.— 

8 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA9 TIONS NOT AFFECTED.—Section 1061(b)(7) shall 

10 not affect the validity of any right, duty, or obliga11 tion of the United States, the Secretary of the De12 partment of Housing and Urban Development (or 

13 the Department of Housing and Urban Develop14 ment), or any other person, that— 

15 (A) arises under any provision of law relat16 ing to any function of the Secretary of the De17 partment of Housing and Urban Development 

18 with respect to the Real Estate Settlement Pro19 cedures Act of 1974 (12 U.S.C. 2601 et seq.) 

20 or the Secure and Fair Enforcement for Mort21 gage Licensing Act of 2008 (12 U.S.C. 5102 et 

22 seq.) transferred to the Bureau by this title; 

23 and 

24 (B) existed on the day before the des25 ignated transfer date. 


sroberts on DSKH9S0YB1PROD with BILLS
1387 

•S 3217 AMDT 3739 

1 (2) CONTINUATION OF SUITS.—This title shall 

2 not abate any proceeding commenced by or against 

3 the Secretary of the Department of Housing and 

4 Urban Development (or the Department of Housing 

5 and Urban Development) with respect to any con6 sumer financial protection function of the Secretary 

7 of the Department of Housing and Urban Develop8 ment transferred to the Bureau by this title before 

9 the designated transfer date, except that the Bu10 reau, subject to sections 1024, 1025, and 1026, 

11 shall be substituted for the Secretary of the Depart12 ment of Housing and Urban Development (or the 

13 Department of Housing and Urban Development) as 

14 a party to any such proceeding as of the designated 

15 transfer date. 

16 (h) CONTINUATION OF EXISTING ORDERS, RULES, 

17 DETERMINATIONS, AGREEMENTS, AND RESOLUTIONS.— 

18 All orders, resolutions, determinations, agreements, and 

19 rules that have been issued, made, prescribed, or allowed 

20 to become effective by any transferor agency or by a court 

21 of competent jurisdiction, in the performance of consumer 

22 financial protection functions that are transferred by this 

23 title and that are in effect on the day before the designated 

24 transfer date, shall continue in effect according to the 

25 terms of those orders, resolutions, determinations, agreeVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01387 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1388 

•S 3217 AMDT 3739 

1 ments, and rules, and shall not be enforceable by or 

2 against the Bureau. 

3 (i) IDENTIFICATION OF RULES CONTINUED.—Not 

4 later than the designated transfer date, the Bureau— 

5 (1) shall, after consultation with the head of 

6 each transferor agency, identify the rules continued 

7 under subsection (h) that will be enforced by the 

8 Bureau; and 

9 (2) shall publish a list of such rules in the Fed10 eral Register. 

11 (j) STATUS OF RULES PROPOSED OR NOT YET EF12 FECTIVE.— 

13 (1) PROPOSED RULES.—Any proposed rule of a 

14 transferor agency which that agency, in performing 

15 consumer financial protection functions transferred 

16 by this title, has proposed before the designated 

17 transfer date, but has not been published as a final 

18 rule before that date, shall be deemed to be a pro19 posed rule of the Bureau. 

20 (2) RULES NOT YET EFFECTIVE.—Any interim 

21 or final rule of a transferor agency which that agen22 cy, in performing consumer financial protection 

23 functions transferred by this title, has published be24 fore the designated transfer date, but which has not 


sroberts on DSKH9S0YB1PROD with BILLS
1389 

•S 3217 AMDT 3739 

1 become effective before that date, shall become effec2 tive as a rule of the Bureau according to its terms. 

3 SEC. 1064. TRANSFER OF CERTAIN PERSONNEL. 

4 (a) IN GENERAL.— 

5 (1) CERTAIN FEDERAL RESERVE SYSTEM EM6 PLOYEES TRANSFERRED.— 

7 (A) IDENTIFYING EMPLOYEES FOR TRANS8 FER.—The Bureau and the Board of Governors 

9 shall— 

10 (i) jointly determine the number of 

11 employees of the Board of Governors nec12 essary to perform or support the consumer 

13 financial protection functions of the Board 

14 of Governors that are transferred to the 

15 Bureau by this title; and 

16 (ii) consistent with the number deter17 mined under clause (i), jointly identify em18 ployees of the Board of Governors for 

19 transfer to the Bureau, in a manner that 

20 the Bureau and the Board of Governors, in 

21 their sole discretion, determine equitable. 

22 (B) IDENTIFIED EMPLOYEES TRANS23 FERRED.—All employees of the Board of Gov24 ernors identified under subparagraph (A)(ii) 


sroberts on DSKH9S0YB1PROD with BILLS
1390 

•S 3217 AMDT 3739 

1 shall be transferred to the Bureau for employ2 ment. 

3 (C) FEDERAL RESERVE BANK EMPLOY4 EES.—Employees of any Federal reserve bank 

5 who, on the day before the designated transfer 

6 date, are performing consumer financial protec7 tion functions on behalf of the Board of Gov8 ernors shall be treated as employees of the 

9 Board of Governors for purposes of subpara10 graphs (A) and (B). 

11 (2) CERTAIN FDIC EMPLOYEES TRANS12 FERRED.— 

13 (A) IDENTIFYING EMPLOYEES FOR TRANS14 FER.—The Bureau and the Board of Directors 

15 of the Federal Deposit Insurance Corporation 

16 shall— 

17 (i) jointly determine the number of 

18 employees of that Corporation necessary to 

19 perform or support the consumer financial 

20 protection functions of the Corporation 

21 that are transferred to the Bureau by this 

22 title; and 

23 (ii) consistent with the number deter24 mined under clause (i), jointly identify em25 ployees of the Corporation for transfer to 


sroberts on DSKH9S0YB1PROD with BILLS
1391 

•S 3217 AMDT 3739 

1 the Bureau, in a manner that the Bureau 

2 and the Board of Directors of the Corpora3 tion, in their sole discretion, determine eq4 uitable. 

5 (B) IDENTIFIED EMPLOYEES TRANS6 FERRED.—All employees of the Corporation 

7 identified under subparagraph (A)(ii) shall be 

8 transferred to the Bureau for employment. 

9 (3) CERTAIN NCUA EMPLOYEES TRANS10 FERRED.— 

11 (A) IDENTIFYING EMPLOYEES FOR TRANS12 FER.—The Bureau and the National Credit 

13 Union Administration Board shall— 

14 (i) jointly determine the number of 

15 employees of the National Credit Union 

16 Administration necessary to perform or 

17 support the consumer financial protection 

18 functions of the National Credit Union Ad19 ministration that are transferred to the 

20 Bureau by this title; and 

21 (ii) consistent with the number deter22 mined under clause (i), jointly identify em23 ployees of the National Credit Union Ad24 ministration for transfer to the Bureau, in 

25 a manner that the Bureau and the NaVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01391 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1392 

•S 3217 AMDT 3739 

1 tional Credit Union Administration Board, 

2 in their sole discretion, determine equi3 table. 

4 (B) IDENTIFIED EMPLOYEES TRANS5 FERRED.—All employees of the National Credit 

6 Union Administration identified under subpara7 graph (A)(ii) shall be transferred to the Bureau 

8 for employment. 

9 (4) CERTAIN OFFICE OF THE COMPTROLLER OF

10 THE CURRENCY EMPLOYEES TRANSFERRED.— 

11 (A) IDENTIFYING EMPLOYEES FOR TRANS12 FER.—The Bureau and the Comptroller of the 

13 Currency shall— 

14 (i) jointly determine the number of 

15 employees of the Office of the Comptroller 

16 of the Currency necessary to perform or 

17 support the consumer financial protection 

18 functions of the Office of the Comptroller 

19 of the Currency that are transferred to the 

20 Bureau by this title; and 

21 (ii) consistent with the number deter22 mined under clause (i), jointly identify em23 ployees of the Office of the Comptroller of 

24 the Currency for transfer to the Bureau, in 

25 a manner that the Bureau and the Office 


sroberts on DSKH9S0YB1PROD with BILLS
1393 

•S 3217 AMDT 3739 

1 of the Comptroller of the Currency, in 

2 their sole discretion, determine equitable. 

3 (B) IDENTIFIED EMPLOYEES TRANS4 FERRED.—All employees of the Office of the 

5 Comptroller of the Currency identified under 

6 subparagraph (A)(ii) shall be transferred to the 

7 Bureau for employment. 

8 (5) CERTAIN OFFICE OF THRIFT SUPERVISION

9 EMPLOYEES TRANSFERRED.— 

10 (A) IDENTIFYING EMPLOYEES FOR TRANS11 FER.—The Bureau and the Director of the Of12 fice of Thrift Supervision shall— 

13 (i) jointly determine the number of 

14 employees of the Office of Thrift Super15 vision necessary to perform or support the 

16 consumer financial protection functions of 

17 the Office of Thrift Supervision that are 

18 transferred to the Bureau by this title; and 

19 (ii) consistent with the number deter20 mined under clause (i), jointly identify em21 ployees of the Office of Thrift Supervision 

22 for transfer to the Bureau, in a manner 

23 that the Bureau and the Office of Thrift 

24 Supervision, in their sole discretion, deter25 mine equitable. 


sroberts on DSKH9S0YB1PROD with BILLS
1394 

•S 3217 AMDT 3739 

1 (B) IDENTIFIED EMPLOYEES TRANS2 FERRED.—All employees of the Office of Thrift 

3 Supervision identified under subparagraph 

4 (A)(ii) shall be transferred to the Bureau for 

5 employment. 

6 (6) CERTAIN EMPLOYEES OF DEPARTMENT OF

7 HOUSING AND URBAN DEVELOPMENT TRANS8 FERRED.— 

9 (A) IDENTIFYING EMPLOYEES FOR TRANS10 FER.—The Bureau and the Secretary of the 

11 Department of Housing and Urban Develop12 ment shall— 

13 (i) jointly determine the number of 

14 employees of the Department of Housing 

15 and Urban Development necessary to per16 form or support the consumer protection 

17 functions of the Department that are 

18 transferred to the Bureau by this title; and 

19 (ii) consistent with the number deter20 mined under clause (i), jointly identify em21 ployees of the Department of Housing and 

22 Urban Development for transfer to the Bu23 reau in a manner that the Bureau and the 

24 Secretary of the Department of Housing 


sroberts on DSKH9S0YB1PROD with BILLS
1395 

•S 3217 AMDT 3739 

1 and Urban Development, in their sole dis2 cretion, deem equitable. 

3 (B) IDENTIFIED EMPLOYEES TRANS4 FERRED.—All employees of the Department of 

5 Housing and Urban Development identified 

6 under subparagraph (A)(ii) shall be transferred 

7 to the Bureau for employment. 

8 (7) APPOINTMENT AUTHORITY FOR EXCEPTED

9 SERVICE AND SENIOR EXECUTIVE SERVICE TRANS10 FERRED.— 

11 (A) IN GENERAL.—In the case of an em12 ployee occupying a position in the excepted 

13 service or the Senior Executive Service, any ap14 pointment authority established pursuant to law 

15 or regulations of the Office of Personnel Man16 agement for filling such positions shall be 

17 transferred, subject to subparagraph (B). 

18 (B) DECLINING TRANSFERS ALLOWED.— 

19 An agency or entity may decline to make a 

20 transfer of authority under subparagraph (A) 

21 (and the employees appointed pursuant thereto) 

22 to the extent that such authority relates to posi23 tions excepted from the competitive service be24 cause of their confidential, policy-making, pol25 icy-determining, or policy-advocating character, 


sroberts on DSKH9S0YB1PROD with BILLS
1396 

•S 3217 AMDT 3739 

1 and non-career positions in the Senior Execu2 tive Service (within the meaning of section 

3 3132(a)(7) of title 5, United States Code). 

4 (b) TIMING OF TRANSFERS AND POSITION ASSIGN5 MENTS.—Each employee to be transferred under this sec6 tion shall— 

7 (1) be transferred not later than 90 days after 

8 the designated transfer date; and 

9 (2) receive notice of a position assignment not 

10 later than 120 days after the effective date of his or 

11 her transfer. 

12 (c) TRANSFER OF FUNCTION.— 

13 (1) IN GENERAL.—Notwithstanding any other 

14 provision of law, the transfer of employees shall be 

15 deemed a transfer of functions for the purpose of 

16 section 3503 of title 5, United States Code. 

17 (2) PRIORITY OF THIS TITLE.—If any provi18 sions of this title conflict with any protection pro19 vided to transferred employees under section 3503 of 

20 title 5, United States Code, the provisions of this 

21 title shall control. 

22 (d) EQUAL STATUS AND TENURE POSITIONS.— 

23 (1) EMPLOYEES TRANSFERRED FROM FDIC, 

24 FTC, HUD, NCUA, OCC, AND OTS.—Each employee 

25 transferred from the Federal Deposit Insurance CorVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01396 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1397 

•S 3217 AMDT 3739 

1 poration, the Federal Trade Commission, the Na2 tional Credit Union Administration, the Office of the 

3 Comptroller of the Currency, the Office of Thrift 

4 Supervision, or the Department of Housing and 

5 Urban Development shall be placed in a position at 

6 the Bureau with the same status and tenure as that 

7 employee held on the day before the designated 

8 transfer date. 

9 (2) EMPLOYEES TRANSFERRED FROM THE

10 FEDERAL RESERVE SYSTEM.— 

11 (A) COMPARABILITY.—Each employee 

12 transferred from the Board of Governors or 

13 from a Federal reserve bank shall be placed in 

14 a position with the same status and tenure as 

15 that of an employee transferring to the Bureau 

16 from the Office of the Comptroller of the Cur17 rency who perform similar functions and have 

18 similar periods of service. 

19 (B) SERVICE PERIODS CREDITED.—For 

20 purposes of this paragraph, periods of service 

21 with the Board of Governors or a Federal re22 serve bank shall be credited as periods of serv23 ice with a Federal agency. 

24 (e) ADDITIONAL CERTIFICATION REQUIREMENTS

25 LIMITED.—Examiners transferred to the Bureau are not 


sroberts on DSKH9S0YB1PROD with BILLS
1398 

•S 3217 AMDT 3739 

1 subject to any additional certification requirements before 

2 being placed in a comparable examiner position at the Bu3 reau examining the same types of institutions as they ex4 amined before they were transferred. 

5 (f) PERSONNEL ACTIONS LIMITED.— 

6 (1) 2-YEAR PROTECTION.—Except as provided 

7 in paragraph (2), each transferred employee holding 

8 a permanent position on the day before the des9 ignated transfer date may not, during the 2-year pe10 riod beginning on the designated transfer date, be 

11 involuntarily separated, or involuntarily reassigned 

12 outside his or her locality pay area, as defined by 

13 the Office of Personnel Management. 

14 (2) EXCEPTIONS.—Paragraph (1) does not 

15 limit the right of the Bureau— 

16 (A) to separate an employee for cause or 

17 for unacceptable performance; 

18 (B) to terminate an appointment to a posi19 tion excepted from the competitive service be20 cause of its confidential policy-making, policy21 determining, or policy-advocating character; or 

22 (C) to reassign a supervisory employee out23 side his or her locality pay area, as defined by 

24 the Office of Personnel Management, when the 

25 Bureau determines that the reassignment is 


sroberts on DSKH9S0YB1PROD with BILLS
1399 

•S 3217 AMDT 3739 

1 necessary for the efficient operation of the Bu2 reau. 

3 (g) PAY.— 

4 (1) 2-YEAR PROTECTION.—Except as provided 

5 in paragraph (2), each transferred employee shall, 

6 during the 2-year period beginning on the des7 ignated transfer date, receive pay at a rate equal to 

8 not less than the basic rate of pay (including any ge9 ographic differential) that the employee received 

10 during the pay period immediately preceding the 

11 date of transfer. 

12 (2) EXCEPTIONS.—Paragraph (1) does not 

13 limit the right of the Bureau to reduce the rate of 

14 basic pay of a transferred employee— 

15 (A) for cause; 

16 (B) for unacceptable performance; or 

17 (C) with the consent of the employee. 

18 (3) PROTECTION ONLY WHILE EMPLOYED.— 

19 Paragraph (1) applies to a transferred employee 

20 only while that employee remains employed by the 

21 Bureau. 

22 (4) PAY INCREASES PERMITTED.—Paragraph 

23 (1) does not limit the authority of the Bureau to in24 crease the pay of a transferred employee. 

25 (h) REORGANIZATION.— 


sroberts on DSKH9S0YB1PROD with BILLS
1400 

•S 3217 AMDT 3739 

1 (1) BETWEEN 1ST AND 3RD YEAR.— 

2 (A) IN GENERAL.—If the Bureau deter3 mines, during the 2-year period beginning 1 

4 year after the designated transfer date, that a 

5 reorganization of the staff of the Bureau is re6 quired— 

7 (i) that reorganization shall be 

8 deemed a ‘‘major reorganization’’ for pur9 poses of affording affected employees re10 tirement under section 8336(d)(2) or 

11 8414(b)(1)(B) of title 5, United States 

12 Code; 

13 (ii) before the reorganization occurs, 

14 all employees in the same locality pay area 

15 as defined by the Office of Personnel Man16 agement shall be placed in a uniform posi17 tion classification system; and 

18 (iii) any resulting reduction in force 

19 shall be governed by the provisions of 

20 chapter 35 of title 5, United States Code, 

21 except that the Bureau shall— 

22 (I) establish competitive areas 

23 (as that term is defined in regulations 

24 issued by the Office of Personnel 

25 Management) to include at a minVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01400 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1401 

•S 3217 AMDT 3739 

1 imum all employees in the same local2 ity pay area as defined by the Office 

3 of Personnel Management; 

4 (II) establish competitive levels 

5 (as that term is defined in regulations 

6 issued by the Office of Personnel 

7 Management) without regard to 

8 whether the particular employees have 

9 been appointed to positions in the 

10 competitive service or the excepted 

11 service; and 

12 (III) afford employees appointed 

13 to positions in the excepted service 

14 (other than to a position excepted 

15 from the competitive service because 

16 of its confidential policy-making, pol17 icy-determining, or policy-advocating 

18 character) the same assignment rights 

19 to positions within the Bureau as em20 ployees appointed to positions in the 

21 competitive service. 

22 (B) SERVICE CREDIT FOR REDUCTIONS IN

23 FORCE.—For purposes of this paragraph, peri24 ods of service with a Federal home loan bank, 

25 a joint office of the Federal home loan banks, 


sroberts on DSKH9S0YB1PROD with BILLS
1402 

•S 3217 AMDT 3739 

1 the Board of Governors, a Federal reserve 

2 bank, the Federal Deposit Insurance Corpora3 tion, or the National Credit Union Administra4 tion shall be credited as periods of service with 

5 a Federal agency. 

6 (2) AFTER 3RD YEAR.— 

7 (A) IN GENERAL.—If the Bureau deter8 mines, at any time after the 3-year period be9 ginning on the designated transfer date, that a 

10 reorganization of the staff of the Bureau is re11 quired, any resulting reduction in force shall be 

12 governed by the provisions of chapter 35 of title 

13 5, United States Code, except that the Bureau 

14 shall establish competitive levels (as that term 

15 is defined in regulations issued by the Office of 

16 Personnel Management) without regard to 

17 types of appointment held by particular employ18 ees transferred under this section. 

19 (B) SERVICE CREDIT FOR REDUCTIONS IN

20 FORCE.—For purposes of this paragraph, peri21 ods of service with a Federal home loan bank, 

22 a joint office of the Federal home loan banks, 

23 the Board of Governors, a Federal reserve 

24 bank, the Federal Deposit Insurance Corpora25 tion, or the National Credit Union AdministraVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01402 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1403 

•S 3217 AMDT 3739 

1 tion shall be credited as periods of service with 

2 a Federal agency. 

3 (i) BENEFITS.— 

4 (1) RETIREMENT BENEFITS FOR TRANSFERRED

5 EMPLOYEES.— 

6 (A) IN GENERAL.— 

7 (i) CONTINUATION OF EXISTING RE8 TIREMENT PLAN.—Except as provided in 

9 subparagraph (B), each transferred em10 ployee shall remain enrolled in his or her 

11 existing retirement plan, through any pe12 riod of continuous employment with the 

13 Bureau. 

14 (ii) EMPLOYER CONTRIBUTION.—The 

15 Bureau shall pay any employer contribu16 tions to the existing retirement plan of 

17 each transferred employee, as required 

18 under that plan. 

19 (B) OPTION FOR EMPLOYEES TRANS20 FERRED FROM FEDERAL RESERVE SYSTEM TO

21 BE SUBJECT TO FEDERAL EMPLOYEE RETIRE22 MENT PROGRAM.— 

23 (i) ELECTION.—Any transferred em24 ployee who was enrolled in a Federal Re25 serve System retirement plan on the day 


sroberts on DSKH9S0YB1PROD with BILLS
1404 

•S 3217 AMDT 3739 

1 before his or her transfer to the Bureau 

2 may, during the 1-year period beginning 6 

3 months after the designated transfer date, 

4 elect to be subject to the Federal employee 

5 retirement program. 

6 (ii) EFFECTIVE DATE OF COV7 ERAGE.—For any employee making an 

8 election under clause (i), coverage by the 

9 Federal employee retirement program shall 

10 begin 1 year after the designated transfer 

11 date. 

12 (C) BUREAU PARTICIPATION IN FEDERAL

13 RESERVE SYSTEM RETIREMENT PLAN.— 

14 (i) SEPARATE ACCOUNT IN FEDERAL

15 RESERVE SYSTEM RETIREMENT PLAN ES16 TABLISHED.—Notwithstanding any other 

17 provision of law, and subject to the terms 

18 and conditions of this section, a separate 

19 account in the Federal Reserve System re20 tirement plan shall be established for Bu21 reau employees who do not make the elec22 tion under subparagraph (B). 

23 (ii) FUNDS ATTRIBUTABLE TO TRANS24 FERRED EMPLOYEES REMAINING IN FED25 ERAL RESERVE SYSTEM RETIREMENT


sroberts on DSKH9S0YB1PROD with BILLS
1405 

•S 3217 AMDT 3739 

1 PLAN TRANSFERRED.—The proportionate 

2 share of funds in the Federal Reserve Sys3 tem retirement plan, including the propor4 tionate share of any funding surplus in 

5 that plan, attributable to a transferred em6 ployee who does not make the election 

7 under subparagraph (B), shall be trans8 ferred to the account established under 

9 clause (i). 

10 (iii) EMPLOYER CONTRIBUTIONS DE11 POSITED.—The Bureau shall deposit into 

12 the account established under clause (i) 

13 the employer contributions that the Bu14 reau makes on behalf of employees who do 

15 not make the election under subparagraph 

16 (B). 

17 (iv) ACCOUNT ADMINISTRATION.—The 

18 Bureau shall administer the account estab19 lished under clause (i) as a participating 

20 employer in the Federal Reserve System 

21 retirement plan. 

22 (D) DEFINITIONS.—For purposes of this 

23 paragraph— 

24 (i) the term ‘‘existing retirement 

25 plan’’ means, with respect to any employee 


sroberts on DSKH9S0YB1PROD with BILLS
1406 

•S 3217 AMDT 3739 

1 transferred under this section, the par2 ticular retirement plan (including the Fi3 nancial Institutions Retirement Fund) and 

4 any associated thrift savings plan of the 

5 agency or Federal reserve bank from which 

6 the employee was transferred, in which the 

7 employee was enrolled on the day before 

8 the designated transfer date; and 

9 (ii) the term ‘‘Federal employee re10 tirement program’’ means the retirement 

11 program for Federal employees established 

12 by chapter 84 of title 5, United States 

13 Code. 

14 (2) BENEFITS OTHER THAN RETIREMENT BEN15 EFITS FOR TRANSFERRED EMPLOYEES.— 

16 (A) DURING 1ST YEAR.— 

17 (i) EXISTING PLANS CONTINUE.— 

18 Each transferred employee may, for 1 year 

19 after the designated transfer date, retain 

20 membership in any other employee benefit 

21 program of the agency or bank from which 

22 the employee transferred, including a den23 tal, vision, long term care, or life insurance 

24 program, to which the employee belonged 


sroberts on DSKH9S0YB1PROD with BILLS
1407 

•S 3217 AMDT 3739 

1 on the day before the designated transfer 

2 date. 

3 (ii) EMPLOYER CONTRIBUTION.—The 

4 Bureau shall reimburse the agency or bank 

5 from which an employee was transferred 

6 for any cost incurred by that agency or 

7 bank in continuing to extend coverage in 

8 the benefit program to the employee, as re9 quired under that program or negotiated 

10 agreements. 

11 (B) DENTAL, VISION, OR LIFE INSURANCE

12 AFTER 1ST YEAR.—If, after the 1-year period 

13 beginning on the designated transfer date, the 

14 Bureau decides not to continue participation in 

15 any dental, vision, or life insurance program of 

16 an agency or bank from which an employee 

17 transferred, a transferred employee who is a 

18 member of such a program may, before the de19 cision of the Bureau takes effect, elect to enroll, 

20 without regard to any regularly scheduled open 

21 season, in— 

22 (i) the enhanced dental benefits estab23 lished by chapter 89A of title 5, United 

24 States Code; 


sroberts on DSKH9S0YB1PROD with BILLS
1408 

•S 3217 AMDT 3739 

1 (ii) the enhanced vision benefits estab2 lished by chapter 89B of title 5, United 

3 States Code; or 

4 (iii) the Federal Employees Group 

5 Life Insurance Program established by 

6 chapter 87 of title 5, United States Code, 

7 without regard to any requirement of in8 surability. 

9 (C) LONG TERM CARE INSURANCE AFTER

10 1ST YEAR.—If, after the 1-year period begin11 ning on the designated transfer date, the Bu12 reau decides not to continue participation in 

13 any long term care insurance program of an 

14 agency or bank from which an employee trans15 ferred, a transferred employee who is a member 

16 of such a program may, before the decision of 

17 the Bureau takes effect, elect to apply for cov18 erage under the Federal Long Term Care In19 surance Program established by chapter 90 of 

20 title 5, United States Code, under the under21 writing requirements applicable to a new active 

22 workforce member (as defined in part 875, title 

23 5, Code of Federal Regulations). 

24 (D) EMPLOYEE CONTRIBUTION.—An indi25 vidual enrolled in the Federal Employees 


sroberts on DSKH9S0YB1PROD with BILLS
1409 

•S 3217 AMDT 3739 

1 Health Benefits program shall pay any em2 ployee contribution required by the plan. 

3 (E) ADDITIONAL FUNDING.—The Bureau 

4 shall transfer to the Federal Employees Health 

5 Benefits Fund established under section 8909 

6 of title 5, United States Code, an amount deter7 mined by the Director of the Office of Per8 sonnel Management, after consultation with the 

9 Bureau and the Office of Management and 

10 Budget, to be necessary to reimburse the Fund 

11 for the cost to the Fund of providing benefits 

12 under this paragraph. 

13 (F) CREDIT FOR TIME ENROLLED IN

14 OTHER PLANS.—For employees transferred 

15 under this title, enrollment in a health benefits 

16 plan administered by a transferor agency or a 

17 Federal reserve bank, as the case may be, im18 mediately before enrollment in a health benefits 

19 plan under chapter 89 of title 5, United States 

20 Code, shall be considered as enrollment in a 

21 health benefits plan under that chapter for pur22 poses of section 8905(b)(1)(A) of title 5, United 

23 States Code. 

24 (G) SPECIAL PROVISIONS TO ENSURE CON25 TINUATION OF LIFE INSURANCE BENEFITS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1410 

•S 3217 AMDT 3739 

1 (i) IN GENERAL.—An annuitant (as 

2 defined in section 8901(3) of title 5, 

3 United States Code) who is enrolled in a 

4 life insurance plan administered by a 

5 transferor agency on the day before the 

6 designated transfer date shall be eligible 

7 for coverage by a life insurance plan under 

8 sections 8706(b), 8714a, 8714b, and 

9 8714c of title 5, United States Code, or in 

10 a life insurance plan established by the 

11 Bureau, without regard to any regularly 

12 scheduled open season and requirement of 

13 insurability. 

14 (ii) EMPLOYEE CONTRIBUTION.—An 

15 individual enrolled in a life insurance plan 

16 under this subparagraph shall pay any em17 ployee contribution required by the plan. 

18 (iii) ADDITIONAL FUNDING.—The Bu19 reau shall transfer to the Employees’ Life 

20 Insurance Fund established under section 

21 8714 of title 5, United States Code, an 

22 amount determined by the Director of the 

23 Office of Personnel Management, after 

24 consultation with the Bureau and the Of25 fice of Management and Budget, to be necVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01410 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1411 

•S 3217 AMDT 3739 

1 essary to reimburse the Fund for the cost 

2 to the Fund of providing benefits under 

3 this subparagraph not otherwise paid for 

4 by the employee under clause (ii). 

5 (iv) CREDIT FOR TIME ENROLLED IN

6 OTHER PLANS.—For employees transferred 

7 under this title, enrollment in a life insur8 ance plan administered by a transferor 

9 agency immediately before enrollment in a 

10 life insurance plan under chapter 87 of 

11 title 5, United States Code, shall be con12 sidered as enrollment in a life insurance 

13 plan under that chapter for purposes of 

14 section 8706(b)(1)(A) of title 5, United 

15 States Code. 

16 (3) OPM RULES.—The Office of Personnel 

17 Management shall issue such rules as are necessary 

18 to carry out this subsection. 

19 (j) IMPLEMENTATION OF UNIFORM PAY AND CLASSI20 FICATION SYSTEM.—Not later than 2 years after the des21 ignated transfer date, the Bureau shall implement a uni22 form pay and classification system for all employees trans23 ferred under this title. 

24 (k) EQUITABLE TREATMENT.—In administering the 

25 provisions of this section, the Bureau— 


sroberts on DSKH9S0YB1PROD with BILLS
1412 

•S 3217 AMDT 3739 

1 (1) shall take no action that would unfairly dis2 advantage transferred employees relative to each 

3 other based on their prior employment by the Board 

4 of Governors, the Federal Deposit Insurance Cor5 poration, the Federal Trade Commission, the Na6 tional Credit Union Administration, the Office of the 

7 Comptroller of the Currency, the Office of Thrift 

8 Supervision, a Federal reserve bank, a Federal home 

9 loan bank, or a joint office of the Federal home loan 

10 banks; and 

11 (2) may take such action as is appropriate in 

12 individual cases so that employees transferred under 

13 this section receive equitable treatment, with respect 

14 to the status, tenure, pay, benefits (other than bene15 fits under programs administered by the Office of 

16 Personnel Management), and accrued leave or vaca17 tion time of those employees, for prior periods of 

18 service with any Federal agency, including the 

19 Board of Governors, the Corporation, the Federal 

20 Trade Commission, the National Credit Union Ad21 ministration, the Office of the Comptroller of the 

22 Currency, the Office of Thrift Supervision, a Federal 

23 reserve bank, a Federal home loan bank, or a joint 

24 office of the Federal home loan banks. 


sroberts on DSKH9S0YB1PROD with BILLS
1413 

•S 3217 AMDT 3739 

1 (l) IMPLEMENTATION.—In implementing the provi2 sions of this section, the Bureau shall coordinate with the 

3 Office of Personnel Management and other entities having 

4 expertise in matters related to employment to ensure a 

5 fair and orderly transition for affected employees. 

6 SEC. 1065. INCIDENTAL TRANSFERS. 

7 (a) INCIDENTAL TRANSFERS AUTHORIZED.—The Di8 rector of the Office of Management and Budget, in con9 sultation with the Secretary, shall make such additional 

10 incidental transfers and dispositions of assets and liabil11 ities held, used, arising from, available, or to be made 

12 available, in connection with the functions transferred by 

13 this title, as the Director may determine necessary to ac14 complish the purposes of this title. 

15 (b) SUNSET.—The authority provided in this section 

16 shall terminate 5 years after the date of enactment of this 

17 Act. 

18 SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY. 

19 (a) IN GENERAL.—The Secretary is authorized to 

20 perform the functions of the Bureau under this subtitle 

21 until the Director of the Bureau is confirmed by the Sen22 ate in accordance with section 1011. 

23 (b) INTERIM ADMINISTRATIVE SERVICES BY THE

24 DEPARTMENT OF THE TREASURY.—The Department of 

25 the Treasury may provide administrative services necVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01413 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1414 

•S 3217 AMDT 3739 

1 essary to support the Bureau before the designated trans2 fer date. 

3 SEC. 1067. TRANSITION OVERSIGHT. 

4 (a) PURPOSE.—The purpose of this section is to en5 sure that the Bureau— 

6 (1) has an orderly and organized startup; 

7 (2) attracts and retains a qualified workforce; 

8 and 

9 (3) establishes comprehensive employee training 

10 and benefits programs. 

11 (b) REPORTING REQUIREMENT.— 

12 (1) IN GENERAL.—The Bureau shall submit an 

13 annual report to the Committee on Banking, Hous14 ing, and Urban Affairs of the Senate and the Com15 mittee on Financial Services of the House of Rep16 resentatives that includes the plans described in 

17 paragraph (2). 

18 (2) PLANS.—The plans described in this para19 graph are as follows: 

20 (A) TRAINING AND WORKFORCE DEVELOP21 MENT PLAN.—The Bureau shall submit a train22 ing and workforce development plan that in23 cludes, to the extent practicable— 


sroberts on DSKH9S0YB1PROD with BILLS
1415 

•S 3217 AMDT 3739 

1 (i) identification of skill and technical 

2 expertise needs and actions taken to meet 

3 those requirements; 

4 (ii) steps taken to foster innovation 

5 and creativity; 

6 (iii) leadership development and suc7 cession planning; and 

8 (iv) effective use of technology by em9 ployees. 

10 (B) WORKPLACE FLEXIBILITIES PLAN.— 

11 The Bureau shall submit a workforce flexibility 

12 plan that includes, to the extent practicable— 

13 (i) telework; 

14 (ii) flexible work schedules; 

15 (iii) phased retirement; 

16 (iv) reemployed annuitants; 

17 (v) part-time work; 

18 (vi) job sharing; 

19 (vii) parental leave benefits and 

20 childcare assistance; 

21 (viii) domestic partner benefits; 

22 (ix) other workplace flexibilities; or 

23 (x) any combination of the items de24 scribed in clauses (i) through (ix). 


sroberts on DSKH9S0YB1PROD with BILLS
1416 

•S 3217 AMDT 3739 

1 (C) RECRUITMENT AND RETENTION

2 PLAN.—The Bureau shall submit a recruitment 

3 and retention plan that includes, to the extent 

4 practicable, provisions relating to— 

5 (i) the steps necessary to target highly 

6 qualified applicant pools with diverse back7 grounds; 

8 (ii) streamlined employment applica9 tion processes; 

10 (iii) the provision of timely notifica11 tion of the status of employment applica12 tions to applicants; and 

13 (iv) the collection of information to 

14 measure indicators of hiring effectiveness. 

15 (c) EXPIRATION.—The reporting requirement under 

16 subsection (b) shall terminate 5 years after the date of 

17 enactment of this Act. 

18 (d) RULE OF CONSTRUCTION.—Nothing in this sec19 tion may be construed to affect— 

20 (1) a collective bargaining agreement, as that 

21 term is defined in section 7103(a)(8) of title 5, 

22 United States Code, that is in effect on the date of 

23 enactment of this Act; or 

24 (2) the rights of employees under chapter 71 of 

25 title 5, United States Code. 


sroberts on DSKH9S0YB1PROD with BILLS
1417 

•S 3217 AMDT 3739 

1 Subtitle G—Regulatory 

2 Improvements 

3 SEC. 1071. COLLECTION OF DEPOSIT ACCOUNT DATA. 

4 (a) PURPOSE.—The purpose of this section is to pro5 mote awareness and understanding of the access of indi6 viduals and communities to financial services, and to iden7 tify business and community development needs and op8 portunities. 

9 (b) IN GENERAL.— 

10 (1) RECORDS REQUIRED.—For each branch, 

11 automated teller machine at which deposits are ac12 cepted, and other deposit taking service facility with 

13 respect to any financial institution, the financial in14 stitution shall maintain a record of the number and 

15 dollar amounts of the deposit accounts of customers. 

16 (2) GEO-CODED ADDRESSES OF DEPOSITORS.— 

17 Customer addresses shall be geo-coded for the collec18 tion of data regarding the census tracts of the resi19 dences or business locations of customers. 

20 (3) IDENTIFICATION OF DEPOSITOR TYPE.—In 

21 maintaining records on any deposit account under 

22 this section, the financial institution shall record 

23 whether the deposit account is for a residential or 

24 commercial customer. 

25 (4) PUBLIC AVAILABILITY.— 


sroberts on DSKH9S0YB1PROD with BILLS
1418 

•S 3217 AMDT 3739 

1 (A) IN GENERAL.—Each financial institu2 tion shall make publicly available on an annual 

3 basis, from information collected under this sec4 tion— 

5 (i) the address and census tract of 

6 each branch, automated teller machine at 

7 which deposits are accepted, and other de8 posit taking service facility with respect to 

9 the financial institution; 

10 (ii) the type of deposit account, in11 cluding whether the account was a check12 ing or savings account; and 

13 (iii) data on the number and dollar 

14 amount of the accounts, presented by cen15 sus tract location of the residential and 

16 commercial customer. 

17 (B) PROTECTION OF IDENTITY.—In mak18 ing data publicly available, any personally iden19 tifiable data element shall be removed so as to 

20 protect the identities of the commercial and res21 idential customers. 

22 (c) AVAILABILITY OF INFORMATION.— 

23 (1) SUBMISSION TO AGENCIES.—The data re24 quired to be compiled and maintained under this 

25 section by any financial institution shall be subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01418 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1419 

•S 3217 AMDT 3739 

1 mitted annually to the Bureau, or to a Federal 

2 banking agency, in accordance with rules prescribed 

3 by the Bureau. 

4 (2) AVAILABILITY OF INFORMATION.—Informa5 tion compiled and maintained under this section 

6 shall be retained for not less than 3 years after the 

7 date of preparation and shall be made available to 

8 the public, upon request, in the form required under 

9 rules prescribed by the Bureau. 

10 (d) BUREAU USE.—The Bureau— 

11 (1) shall use the data on branches and deposit 

12 accounts acquired under this section as part of the 

13 examination of a covered person as part of an exam14 ination under this title; 

15 (2) shall assess the distribution of residential 

16 and commercial accounts at such financial institu17 tion across income and minority level of census 

18 tracts; and 

19 (3) may use the data for any other purpose as 

20 permitted by law. 

21 (e) RULES AND GUIDANCE.—The Bureau shall pre22 scribe such rules and issue guidance as may be necessary 

23 to carry out, enforce, and compile data pursuant to this 

24 section. The Bureau shall prescribe rules regarding the 

25 provision of data compiled under this section to the FedVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01419 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1420 

•S 3217 AMDT 3739 

1 eral banking agencies to carry out the purposes of this 

2 section, and shall issue guidance to financial institutions 

3 regarding measures to facilitate compliance with this sec4 tion and the requirements of rules prescribed thereunder. 

5 (f) DEFINITIONS.—For purposes of this section, the 

6 following definitions shall apply: 

7 (1) DEPOSIT ACCOUNT.—The term ‘‘deposit ac8 count’’ includes any checking account, savings ac9 count, credit union share account, and other types of 

10 accounts, as defined by the Bureau. 

11 (2) FINANCIAL INSTITUTION.—The term ‘‘fi12 nancial institution’’— 

13 (A) has the meaning given to the term ‘‘in14 sured depository institution’’ in section 3(c)(2) 

15 of the Federal Deposit Insurance Act; and 

16 (B) includes any credit union. 

17 (g) EFFECTIVE DATE.—This section shall become ef18 fective on the designated transfer date. 

19 SEC. 1072. SMALL BUSINESS DATA COLLECTION. 

20 (a) IN GENERAL.—The Equal Credit Opportunity 

21 Act (15 U.S.C. 1691 et seq.) is amended by inserting after 

22 section 704A the following: 

23 ‘‘SEC. 740B. SMALL BUSINESS LOAN DATA COLLECTION. 

24 ‘‘(a) PURPOSE.—The purpose of this section is to fa25 cilitate enforcement of fair lending laws and enable comVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01420 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1421 

•S 3217 AMDT 3739 

1 munities, governmental entities, and creditors to identify 

2 business and community development needs and opportu3 nities of women-owned and minority-owned small busi4 nesses. 

5 ‘‘(b) INFORMATION GATHERING.—Subject to the re6 quirements of this section, in the case of any application 

7 to a financial institution for credit for a small business, 

8 the financial institution shall— 

9 ‘‘(1) inquire whether the small business is a 

10 women- or minority-owned small business, without 

11 regard to whether such application is received in 

12 person, by mail, by telephone, by electronic mail or 

13 other form of electronic transmission, or by any 

14 other means, and whether or not such application is 

15 in response to a solicitation by the financial institu16 tion; and 

17 ‘‘(2) maintain a record of the responses to such 

18 inquiry, separate from the application and accom19 panying information. 

20 ‘‘(c) RIGHT TO REFUSE.—Any applicant for credit 

21 may refuse to provide any information requested pursuant 

22 to subsection (b) in connection with any application for 

23 credit. 

24 ‘‘(d) NO ACCESS BY UNDERWRITERS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1422 

•S 3217 AMDT 3739 

1 ‘‘(1) LIMITATION.—Where feasible, no loan un2 derwriter or other officer or employee of a financial 

3 institution, or any affiliate of a financial institution, 

4 involved in making any determination concerning an 

5 application for credit shall have access to any infor6 mation provided by the applicant pursuant to a re7 quest under subsection (b) in connection with such 

8 application. 

9 ‘‘(2) LIMITED ACCESS.—If a financial institu10 tion determines that a loan underwriter or other of11 ficer or employee of a financial institution, or any 

12 affiliate of a financial institution, involved in making 

13 any determination concerning an application for 

14 credit should have access to any information pro15 vided by the applicant pursuant to a request under 

16 subsection (b), the financial institution shall provide 

17 notice to the applicant of the access of the under18 writer to such information, along with notice that 

19 the financial institution may not discriminate on the 

20 basis of such information. 

21 ‘‘(e) FORM AND MANNER OF INFORMATION.— 

22 ‘‘(1) IN GENERAL.—Each financial institution 

23 shall compile and maintain, in accordance with regu24 lations of the Bureau, a record of the information 


sroberts on DSKH9S0YB1PROD with BILLS
1423 

•S 3217 AMDT 3739 

1 provided by any loan applicant pursuant to a request 

2 under subsection (b). 

3 ‘‘(2) ITEMIZATION.—Information compiled and 

4 maintained under paragraph (1) shall be itemized in 

5 order to clearly and conspicuously disclose— 

6 ‘‘(A) the number of the application and the 

7 date on which the application was received; 

8 ‘‘(B) the type and purpose of the loan or 

9 other credit being applied for; 

10 ‘‘(C) the amount of the credit or credit 

11 limit applied for, and the amount of the credit 

12 transaction or the credit limit approved for such 

13 applicant; 

14 ‘‘(D) the type of action taken with respect 

15 to such application, and the date of such action; 

16 ‘‘(E) the census tract in which is located 

17 the principal place of business of the small busi18 ness loan applicant; 

19 ‘‘(F) the gross annual revenue of the busi20 ness in the last fiscal year of the small business 

21 loan applicant preceding the date of the appli22 cation; 

23 ‘‘(G) the race and ethnicity of the principal 

24 owners of the business; and 


sroberts on DSKH9S0YB1PROD with BILLS
1424 

•S 3217 AMDT 3739 

1 ‘‘(H) any additional data that the Bureau 

2 determines would aid in fulfilling the purposes 

3 of this section. 

4 ‘‘(3) NO PERSONALLY IDENTIFIABLE INFORMA5 TION.—In compiling and maintaining any record of 

6 information under this section, a financial institution 

7 may not include in such record the name, specific 

8 address (other than the census tract required under 

9 paragraph (1)(E)), telephone number, electronic 

10 mail address, or any other personally identifiable in11 formation concerning any individual who is, or is 

12 connected with, the small business loan applicant. 

13 ‘‘(4) DISCRETION TO DELETE OR MODIFY PUB14 LICLY AVAILABLE DATA.—The Bureau may, at its 

15 discretion, delete or modify data collected under this 

16 section which is or will be available to the public, if 

17 the Bureau determines that the deletion or modifica18 tion of the data would advance a compelling privacy 

19 interest. 

20 ‘‘(f) AVAILABILITY OF INFORMATION.— 

21 ‘‘(1) SUBMISSION TO BUREAU.—The data re22 quired to be compiled and maintained under this 

23 section by any financial institution shall be sub24 mitted annually to the Bureau. 


sroberts on DSKH9S0YB1PROD with BILLS
1425 

•S 3217 AMDT 3739 

1 ‘‘(2) AVAILABILITY OF INFORMATION.—Infor2 mation compiled and maintained under this section 

3 shall be— 

4 ‘‘(A) retained for not less than 3 years 

5 after the date of preparation; 

6 ‘‘(B) made available to any member of the 

7 public, upon request, in the form required 

8 under regulations prescribed by the Bureau; 

9 ‘‘(C) annually made available to the public 

10 generally by the Bureau, in such form and in 

11 such manner as is determined appropriate by 

12 the Bureau. 

13 ‘‘(3) COMPILATION OF AGGREGATE DATA.—The 

14 Bureau may, at its discretion— 

15 ‘‘(A) compile and aggregate data collected 

16 under this section for its own use; and 

17 ‘‘(B) make public such compilations of ag18 gregate data. 

19 ‘‘(g) BUREAU ACTION.— 

20 ‘‘(1) IN GENERAL.—The Bureau shall prescribe 

21 such rules and issue such guidance as may be nec22 essary to carry out, enforce, and compile data pursu23 ant to this section. 

24 ‘‘(2) EXCEPTIONS.—The Bureau, by rule or 

25 order, may adopt exceptions to any requirement of 


sroberts on DSKH9S0YB1PROD with BILLS
1426 

•S 3217 AMDT 3739 

1 this section and may, conditionally or uncondition2 ally, exempt any financial institution or class of fi3 nancial institutions from the requirements of this 

4 section, as the Bureau deems necessary or appro5 priate to carry out the purposes of this section. 

6 ‘‘(3) GUIDANCE.—The Bureau shall issue guid7 ance designed to facilitate compliance with the re8 quirements of this section, including assisting finan9 cial institutions in working with applicants to deter10 mine whether the applicants are women- or minor11 ity-owned for purposes of this section. 

12 ‘‘(h) DEFINITIONS.—For purposes of this section, the 

13 following definitions shall apply: 

14 ‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi15 nancial institution’ means any partnership, com16 pany, corporation, association (incorporated or unin17 corporated), trust, estate, cooperative organization, 

18 or other entity that engages in any financial activity. 

19 ‘‘(2) MINORITY.—The term ‘minority’ has the 

20 same meaning as in section 1204(c)(3) of the Finan21 cial Institutions Reform, Recovery, and Enforcement 

22 Act of 1989. 

23 ‘‘(3) MINORITY-OWNED SMALL BUSINESS.—The 

24 term ‘minority-owned small business’ means a small 

25 business— 


sroberts on DSKH9S0YB1PROD with BILLS
1427 

•S 3217 AMDT 3739 

1 ‘‘(A) more than 50 percent of the owner2 ship or control of which is held by 1 or more 

3 minority individuals; and 

4 ‘‘(B) more than 50 percent of the net prof5 it or loss of which accrues to 1 or more minor6 ity individuals. 

7 ‘‘(4) SMALL BUSINESS LOAN.—The term ‘small 

8 business loan’ shall be defined by the Bureau, which 

9 may take into account— 

10 ‘‘(A) the gross revenues of the borrower; 

11 ‘‘(B) the total number of employees of the 

12 borrower; 

13 ‘‘(C) the industry in which the borrower 

14 has its primary operations; and 

15 ‘‘(D) the size of the loan. 

16 ‘‘(5) WOMEN-OWNED SMALL BUSINESS.—The 

17 term ‘women-owned small business’ means a busi18 ness— 

19 ‘‘(A) more than 50 percent of the owner20 ship or control of which is held by 1 or more 

21 women; and 

22 ‘‘(B) more than 50 percent of the net prof23 it or loss of which accrues to 1 or more 

24 women.’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1428 

•S 3217 AMDT 3739 

1 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

2 Section 701(b) of the Equal Credit Opportunity Act (15 

3 U.S.C. 1691(b)) is amended— 

4 (1) in paragraph (3), by striking ‘‘or’’ at the 

5 end; 

6 (2) in paragraph (4), by striking the period at 

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

8 (3) by inserting after paragraph (4), the fol9 lowing: 

10 ‘‘(5) to make an inquiry under section 704B, in 

11 accordance with the requirements of that section.’’. 

12 (c) CLERICAL AMENDMENT.—The table of sections 

13 for title VII of the Consumer Credit Protection Act is 

14 amended by inserting after the item relating to section 

15 704A the following new item: 

‘‘704B. Small business loan data collection.’’. 

16 (d) EFFECTIVE DATE.—This section shall become ef17 fective on the designated transfer date. 

18 SEC. 1073. GAO STUDY ON THE EFFECTIVENESS AND IM19 PACT OF VARIOUS APPRAISAL METHODS. 

20 (a) IN GENERAL.—The Government Accountability 

21 Office shall conduct a study on the effectiveness and im22 pact of various appraisal methods, including the cost ap23 proach, the comparative sales approach, the income ap24 proach, and others that may be available. 

25 (b) STUDY.—Not later than— 


sroberts on DSKH9S0YB1PROD with BILLS
1429 

•S 3217 AMDT 3739 

1 (1) 1 year after the date of enactment of this 

2 Act, the Government Accountability Office shall sub3 mit a study to the Committee on Banking, Housing, 

4 and Urban Affairs of the Senate and the Committee 

5 on Financial Services of the House of Representa6 tives; 

7 (2) 90 days after the date of enactment of this 

8 Act, the Government Accountability Office shall pro9 vide a report on the status of the study and any pre10 liminary findings to the Committee on Banking, 

11 Housing, and Urban Affairs of the Senate and the 

12 Committee on Financial Services of the House of 

13 Representatives. 

14 (c) CONTENT OF STUDY.—The study required by this 

15 section shall include an examination of— 

16 (1) the prevalence, alone or in combination, of 

17 these approaches in purchase-money and refinance 

18 mortgage transactions; 

19 (2) the accuracy of the various approaches in 

20 assessing the property as collateral; 

21 (3) whether and how the approaches contrib22 uted to price speculation in the previous cycle; 

23 (4) the costs to consumers of these approaches; 

24 (5) the disclosure of fees to consumers in the 

25 appraisal process; 


sroberts on DSKH9S0YB1PROD with BILLS
1430 

•S 3217 AMDT 3739 

1 (6) to what extent such approaches may be in2 fluenced by a conflict of interest between the mort3 gage lender and the appraiser and the mechanism by 

4 which the lender selects and compensates the ap5 praiser; and 

6 (7) the suitability of appraisal approaches in 

7 rural versus urban areas. 

8 SEC. 1074. PROHIBITION ON CERTAIN PREPAYMENT PEN9 ALTIES. 

10 (a) IN GENERAL.—Chapter 2 of the Truth in Lend11 ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 

12 after section 129A (15 U.S.C. 1639a) the following new 

13 section: 

14 ‘‘SEC. 129B. PROHIBITION ON CERTAIN PREPAYMENT PEN15 ALTIES. 

16 ‘‘(a) PROHIBITED ON CERTAIN LOANS.—A residen17 tial mortgage loan that is not a qualified mortgage may 

18 not contain terms under which a consumer is required to 

19 pay a prepayment penalty for paying all or part of the 

20 principal after the loan is consummated. 

21 ‘‘(b) PHASED-OUT PENALTIES ON QUALIFIED MORT22 GAGES.— 

23 ‘‘(1) IN GENERAL.—A qualified mortgage may 

24 not contain terms under which a consumer is re25 quired to pay a prepayment penalty for paying all or 


sroberts on DSKH9S0YB1PROD with BILLS
1431 

•S 3217 AMDT 3739 

1 part of the principal after the loan is consummated 

2 in excess of— 

3 ‘‘(A) during the 1-year period beginning on 

4 the date on which the loan is consummated, an 

5 amount equal to 3 percent of the outstanding 

6 balance on the loan; 

7 ‘‘(B) during the 1-year period beginning 

8 immediately after the end of the period de9 scribed in subparagraph (A), an amount equal 

10 to 2 percent of the outstanding balance on the 

11 loan; and 

12 ‘‘(C) during the 1-year period beginning 

13 immediately after the end of the 1-year period 

14 described in subparagraph (B), an amount 

15 equal to 1 percent of the outstanding balance 

16 on the loan. 

17 ‘‘(2) PROHIBITION.—After the end of the 3- 

18 year period beginning on the date on which the loan 

19 is consummated, no prepayment penalty may be im20 posed on a qualified mortgage. 

21 ‘‘(c) OPTION FOR NO PREPAYMENT PENALTY RE22 QUIRED.—A creditor may not offer a consumer a residen23 tial mortgage loan product that has a prepayment penalty 

24 for paying all or part of the principal after the loan is 

25 consummated as a term of the loan, without offering to 


sroberts on DSKH9S0YB1PROD with BILLS
1432 

•S 3217 AMDT 3739 

1 the consumer a residential mortgage loan product that 

2 does not have a prepayment penalty as a term of the loan. 

3 ‘‘(d) PROHIBITIONS ON EVASIONS, STRUCTURING OF

4 TRANSACTIONS, AND RECIPROCAL ARRANGEMENTS.—A 

5 creditor may not take any action in connection with a resi6 dential mortgage loan— 

7 ‘‘(1) to structure a loan transaction as an open 

8 end consumer credit plan or another form of loan for 

9 the purpose and with the intent of evading the provi10 sions of this section; or 

11 ‘‘(2) to divide any loan transaction into sepa12 rate parts for the purpose and with the intent of 

13 evading provisions of this section. 

14 ‘‘(e) PUBLICATION OF AVERAGE PRIME OFFER RATE

15 AND APR THRESHOLDS.—The Board— 

16 ‘‘(1) shall publish, and update at least weekly, 

17 average prime offer rates; 

18 ‘‘(2) may publish multiple rates based on vary19 ing types of mortgage transactions; and 

20 ‘‘(3) shall adjust the thresholds of 1.50 percent21 age points in subsection (g)(3)(A)(v)(I), 2.50 per22 centage points in subsection (g)(3)(A)(v)(II), and 

23 3.50 percentage points in subsection 

24 (g)(3)(A)(v)(III), as necessary to reflect significant 


sroberts on DSKH9S0YB1PROD with BILLS
1433 

•S 3217 AMDT 3739 

1 changes in market conditions and to effectuate the 

2 purposes of this section. 

3 ‘‘(f) REGULATIONS.— 

4 ‘‘(1) IN GENERAL.—The Bureau shall prescribe 

5 regulations to carry out this section. 

6 ‘‘(2) REVISION OF SAFE HARBOR CRITERIA.— 

7 The Bureau may prescribe regulations that revise, 

8 add to, or subtract from the criteria that define a 

9 qualified mortgage, upon a finding that such regula10 tions are necessary or appropriate— 

11 ‘‘(A) to ensure that responsible, affordable 

12 mortgage credit remains available to consumers 

13 in a manner consistent with the purposes of 

14 this section; 

15 ‘‘(B) to effectuate the purposes of this sec16 tion; 

17 ‘‘(C) to prevent circumvention or evasion 

18 thereof; or 

19 ‘‘(D) to facilitate compliance with this sec20 tion. 

21 ‘‘(3) INTERAGENCY HARMONIZATION.— 

22 ‘‘(A) DETERMINATION OF QUALIFYING

23 MORTGAGE TREATMENT.—The agencies and of24 ficials described in subparagraph (B) shall, in 

25 consultation with the Bureau, prescribe rules 


sroberts on DSKH9S0YB1PROD with BILLS
1434 

•S 3217 AMDT 3739 

1 defining the types of loans they insure, guar2 antee, or administer, as the case may be, that 

3 are qualified mortgages for purposes of this sec4 tion, upon a finding that such rules are con5 sistent with the purposes of this section or are 

6 appropriate to prevent circumvention or evasion 

7 thereof or to facilitate compliance with this sec8 tion. 

9 ‘‘(B) AGENCIES AND OFFICIALS.—The 

10 agencies and officials described in this subpara11 graph are— 

12 ‘‘(i) the Secretary of the Department 

13 of Housing and Urban Development, with 

14 regard to mortgages insured under title II 

15 of the National Housing Act (12 U.S.C. 

16 1707 et seq.); 

17 ‘‘(ii) the Secretary of Veterans Af18 fairs, with regard to a loan made or guar19 anteed by the Secretary of Veterans Af20 fairs; 

21 ‘‘(iii) the Secretary of Agriculture, 

22 with regard to loans guaranteed by the 

23 Secretary of Agriculture pursuant to sec24 tion 502 of the Housing Act of 1949 (42 

25 U.S.C. 1472(h)); 


sroberts on DSKH9S0YB1PROD with BILLS
1435 

•S 3217 AMDT 3739 

1 ‘‘(iv) the Federal Housing Finance 

2 Agency, with regard to loans meeting the 

3 conforming loan standards of the Federal 

4 National Mortgage Association or the Fed5 eral Home Loan Mortgage Corporation; 

6 and 

7 ‘‘(v) the Rural Housing Service, with 

8 regard to loans insured by the Rural Hous9 ing Service. 

10 ‘‘(4) IMPLEMENTATION.—Regulations required 

11 or authorized to be prescribed under this sub12 section— 

13 ‘‘(A) shall be prescribed in final form be14 fore the end of the 12-month period beginning 

15 on the date of enactment of this section; and 

16 ‘‘(B) shall take effect not later than 18 

17 months after the date of enactment of this sec18 tion. 

19 ‘‘(g) DEFINITIONS.—For purposes of this section, the 

20 following definitions shall apply: 

21 ‘‘(1) AVERAGE PRIME OFFER RATE.—The term 

22 ‘average prime offer rate’ means an annual percent23 age rate that is derived from average interest rates, 

24 points, and other loan pricing terms currently of25 fered to consumers by a representative sample of 


sroberts on DSKH9S0YB1PROD with BILLS
1436 

•S 3217 AMDT 3739 

1 creditors for mortgage transactions that have low2 risk pricing characteristics. 

3 ‘‘(2) PREPAYMENT PENALTY.—The term ‘pre4 payment penalty’ means any penalty for paying all 

5 or part of the principal on an extension of credit be6 fore the date on which the principal is due, including 

7 a computation of a refund of unearned interest by 

8 a method that is less favorable to the consumer than 

9 the actuarial method, as defined in section 933(d) of 

10 the Housing and Community Development Act of 

11 1992 (15 U.S.C. 1615(d)). 

12 ‘‘(3) QUALIFIED MORTGAGE.—The term ‘quali13 fied mortgage’ means— 

14 ‘‘(A) any residential mortgage loan— 

15 ‘‘(i) that does not have an adjustable 

16 rate; 

17 ‘‘(ii) that does not allow a consumer 

18 to defer repayment of principal or interest, 

19 or is not otherwise deemed a ‘non-tradi20 tional mortgage’ under guidance, 

21 advisories, or regulations prescribed by the 

22 Bureau; 

23 ‘‘(iii) that does not provide for a re24 payment schedule that results in negative 

25 amortization at any time; 


sroberts on DSKH9S0YB1PROD with BILLS
1437 

•S 3217 AMDT 3739 

1 ‘‘(iv) for which the terms are fully 

2 amortizing and which does not result in a 

3 balloon payment, where a ‘balloon pay4 ment’ is a scheduled payment that is more 

5 than twice as large as the average of ear6 lier scheduled payments; 

7 ‘‘(v) which has an annual percentage 

8 rate that does not exceed the average 

9 prime offer rate for a comparable trans10 action, as of the date on which the interest 

11 rate is set— 

12 ‘‘(I) by 1.5 or more percentage 

13 points, in the case of a first lien resi14 dential mortgage loan having an origi15 nal principal obligation amount that is 

16 equal to or less than the amount of 

17 the maximum limitation on the origi18 nal principal obligation of a mortgage 

19 in effect for a residence of the appli20 cable size, as of the date on which 

21 such interest rate is set, pursuant to 

22 the sixth sentence of section 305(a)(2) 

23 of the Federal Home Loan Mortgage 

24 Corporation Act (12 U.S.C. 

25 1454(a)(2)); 


sroberts on DSKH9S0YB1PROD with BILLS
1438 

•S 3217 AMDT 3739 

1 ‘‘(II) by 2.5 or more percentage 

2 points, in the case of a first lien resi3 dential mortgage loan having an origi4 nal principal obligation amount that is 

5 more than the amount of the max6 imum limitation on the original prin7 cipal obligation of a mortgage in ef8 fect for a residence of the applicable 

9 size, as of the date on which such in10 terest rate is set, pursuant to the 

11 sixth sentence of section 305(a)(2) of 

12 the Federal Home Loan Mortgage 

13 Corporation Act (12 U.S.C. 

14 1454(a)(2)); or 

15 ‘‘(III) by 3.5 or more percentage 

16 points, in the case of a subordinate 

17 lien residential mortgage loan; 

18 ‘‘(vi) for which the income and finan19 cial resources relied upon to qualify the ob20 ligors on the loan are verified and docu21 mented; 

22 ‘‘(vii) for which the underwriting proc23 ess is based on a payment schedule that 

24 fully amortizes the loan over the loan term 


sroberts on DSKH9S0YB1PROD with BILLS
1439 

•S 3217 AMDT 3739 

1 and takes into account all applicable taxes, 

2 insurance, and assessments; 

3 ‘‘(viii) that does not cause the total 

4 monthly debts of the consumer, including 

5 amounts under the loan, to exceed a per6 centage established by regulation of the 

7 monthly gross income of the consumer, or 

8 such other maximum percentage of such 

9 income, as may be prescribed by regulation 

10 under subsection (g), which rules shall 

11 take into consideration the income of the 

12 consumer available to pay regular expenses 

13 after payment of all installment and revolv14 ing debt; 

15 ‘‘(ix) for which the total points and 

16 fees payable in connection with the loan do 

17 not exceed 2 percent of the total loan 

18 amount, where the term ‘points and fees’ 

19 means points and fees as defined by Sec20 tion 103(aa)(4) of the Truth in Lending 

21 Act (15 U.S.C. 1602(aa)(4)); and 

22 ‘‘(x) for which the term of the loan 

23 does not exceed 30 years, except as such 

24 term may be extended under subsection 

25 (g); and 


sroberts on DSKH9S0YB1PROD with BILLS
1440 

•S 3217 AMDT 3739 

1 ‘‘(B) any reverse mortgage that is insured 

2 by the Federal Housing Administration or com3 plies with the condition established in subpara4 graph (A)(v). 

5 ‘‘(4) RESIDENTIAL MORTGAGE LOAN.—The 

6 term ‘residential mortgage loan’ means any con7 sumer credit transaction that is secured by a mort8 gage, deed of trust, or other equivalent consensual 

9 security interest on a dwelling or on residential real 

10 property that includes a dwelling, other than a con11 sumer credit transaction under an open end credit 

12 plan or an extension of credit relating to a plan de13 scribed in section 101(53D) of title 11, United 

14 States Code.’’. 

15 (b) CONFORMING AMENDMENTS.—Section 129(c) of 

16 the Truth in Lending Act (15 U.S.C. 1639(c)) is amend17 ed— 

18 (1) by striking paragraph (2); 

19 (2) by striking ‘‘(1) IN GENERAL.—’’; and 

20 (3) by redesignating subparagraphs (A) and 

21 (B) as paragraphs (1) and (2), respectively. 


sroberts on DSKH9S0YB1PROD with BILLS
1441 

•S 3217 AMDT 3739 

1 SEC. 1075. ASSISTANCE FOR ECONOMICALLY VULNERABLE 

2 INDIVIDUALS AND FAMILIES. 

3 (a) HERA AMENDMENTS.—Section 1132 of the 

4 Housing and Economic Recovery Act of 2008 (12 U.S.C. 

5 1701x note) is amended— 

6 (1) in subsection (a), by inserting in each of 

7 paragraphs (1), (2), (3), and (4) ‘‘or economically 

8 vulnerable individuals and families’’ after ‘‘home9 buyers’’ each place that term appears; 

10 (2) in subsection (b)(1), by inserting ‘‘or eco11 nomically vulnerable individuals and families’’ after 

12 ‘‘homebuyers’’; 

13 (3) in subsection (c)(1)— 

14 (A) in subparagraph (A), by striking ‘‘or’’ 

15 at the end; 

16 (B) in subparagraph (B), by striking the 

17 period at the end and inserting ‘‘; or’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(C) a nonprofit corporation that— 

20 ‘‘(i) is exempt from taxation under 

21 section 501(c)(3) of the Internal Revenue 

22 Code of 1986; and 

23 ‘‘(ii) specializes or has expertise in 

24 working with economically vulnerable indi25 viduals and families, but whose primary 


sroberts on DSKH9S0YB1PROD with BILLS
1442 

•S 3217 AMDT 3739 

1 purpose is not provision of credit coun2 seling services.’’; and 

3 (4) in subsection (d)(1), by striking ‘‘not more 

4 than 5’’. 

5 (b) APPLICABILITY.—Amendments made by sub6 section (a) shall not apply to programs authorized by sec7 tion 1132 of the Housing and Economic Recovery Act of 

8 2008 (12 U.S.C. 1701x note) that are funded with appro9 priations prior to fiscal year 2011. 

10 SEC. 1076. REMITTANCE TRANSFERS. 

11 (a) TREATMENT OF REMITTANCE TRANSFERS.—The 

12 Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) 

13 is amended— 

14 (1) in section 902(b) (15 U.S.C. 1693(b)), by 

15 inserting ‘‘and remittance’’ after ‘‘electronic fund’’; 

16 (2) by redesignating sections 919, 920, 921, 

17 and 922 as sections 920, 921, 922, and 923, respec18 tively; and 

19 (3) by inserting after section 918 the following: 

20 ‘‘SEC. 919. REMITTANCE TRANSFERS. 

21 ‘‘(a) DISCLOSURES REQUIRED FOR REMITTANCE

22 TRANSFERS.— 

23 ‘‘(1) IN GENERAL.—Each remittance transfer 

24 provider shall make disclosures as required under 


sroberts on DSKH9S0YB1PROD with BILLS
1443 

•S 3217 AMDT 3739 

1 this section and in accordance with rules prescribed 

2 by the Board. 

3 ‘‘(2) STOREFRONT DISCLOSURES.— 

4 ‘‘(A) IN GENERAL.—At every physical 

5 storefront location owned or controlled by a re6 mittance transfer provider (with respect to re7 mittance transfer activities), the remittance 

8 transfer provider shall prominently post, and 

9 update daily, a notice describing a model trans10 fer for the amounts of $100 and $200 (in 

11 United States dollars) showing the amount of 

12 currency that will be received by the designated 

13 recipient, using the values of the currency into 

14 which the funds will be exchanged for the 3 

15 currencies to which that particular storefront 

16 sends the greatest number of remittance trans17 fer payments, measured irrespective of the 

18 value of such payments. The values shall in19 clude all fees charged by the remittance trans20 fer provider, taken out of the $100 and $200 

21 amounts. 

22 ‘‘(B) ELECTRONIC DISCLOSURE.—Subject 

23 to the rules prescribed by the Board, a remit24 tance transfer provider shall prominently post, 

25 and update daily, a notice describing a model 


sroberts on DSKH9S0YB1PROD with BILLS
1444 

•S 3217 AMDT 3739 

1 transfer, as described in subparagraph (A), on 

2 the Internet site owned or controlled by the re3 mittance transfer provider which senders use to 

4 electronically conduct remittance transfer trans5 actions. 

6 ‘‘(3) SPECIFIC DISCLOSURES.—In addition to 

7 any other disclosures applicable under this title, and 

8 subject to paragraph (4), a remittance transfer pro9 vider shall provide, in writing and in a form that the 

10 sender may keep, to each sender requesting a remit11 tance transfer, as applicable to the transaction— 

12 ‘‘(A) at the time at which the sender re13 quests a remittance transfer to be initiated, and 

14 prior to the sender making any payment in con15 nection with the remittance transfer, a disclo16 sure describing the amount of currency that will 

17 be sent to the designated recipient, using the 

18 values of the currency into which the funds will 

19 be exchanged; and 

20 ‘‘(B) at the time at which the sender 

21 makes payment in connection with the remit22 tance transfer— 

23 ‘‘(i) a receipt showing— 

24 ‘‘(I) the information described in 

25 subparagraph (A); 


sroberts on DSKH9S0YB1PROD with BILLS
1445 

•S 3217 AMDT 3739 

1 ‘‘(II) the promised date of deliv2 ery to the designated recipient; and 

3 ‘‘(III) the name and either the 

4 telephone number or the address of 

5 the designated recipient; and 

6 ‘‘(ii) a statement containing— 

7 ‘‘(I) information about the rights 

8 of the sender under this section re9 garding the resolution of errors; and 

10 ‘‘(II) appropriate contact infor11 mation for— 

12 ‘‘(aa) the remittance trans13 fer provider; and 

14 ‘‘(bb) each State or Federal 

15 agency supervising the remit16 tance transfer provider, including 

17 its State licensing authority or 

18 Federal regulator, as applicable. 

19 ‘‘(4) REQUIREMENTS RELATING TO DISCLO20 SURES.—With respect to each disclosure required to 

21 be provided under paragraph (3), and subject to 

22 paragraph (5), a remittance transfer provider 

23 shall— 

24 ‘‘(A) provide an initial notice and receipt, 

25 as required by subparagraphs (A) and (B) of 


sroberts on DSKH9S0YB1PROD with BILLS
1446 

•S 3217 AMDT 3739 

1 paragraph (3), and an error resolution state2 ment, as required by subsection (c), that clearly 

3 and conspicuously describe the information re4 quired to be disclosed therein; and 

5 ‘‘(B) with respect to any transaction that 

6 a sender conducts electronically, comply with 

7 the Electronic Signatures in Global and Na8 tional Commerce Act (15 U.S.C. 7001 et seq.). 

9 ‘‘(5) EXEMPTION AUTHORITY.—The Board 

10 may, by rule, permit a remittance transfer provider 

11 to satisfy the requirements of— 

12 ‘‘(A) paragraph (3)(A) orally, if the trans13 action is conducted entirely by telephone; 

14 ‘‘(B) paragraph (3)(B), by mailing the 

15 documents required under such subparagraph 

16 to the sender, not later than 1 business day 

17 after the date on which the transaction is con18 ducted, if the transaction is conducted entirely 

19 by telephone; 

20 ‘‘(C) subparagraphs (A) and (B) of para21 graph (3) together in one written disclosure, 

22 but only to the extent that the information pro23 vided in accordance with paragraph (3)(A) is 

24 accurate at the time at which payment is made 


sroberts on DSKH9S0YB1PROD with BILLS
1447 

•S 3217 AMDT 3739 

1 in connection with the subject remittance trans2 fer; 

3 ‘‘(D) paragraph (3)(A), if a sender initi4 ates a transaction to one of those countries dis5 played, in the exact amount of the transfers 

6 displayed pursuant to paragraph (2), if the 

7 Board finds it to be appropriate; and 

8 ‘‘(E) paragraph (3)(A), without compliance 

9 with section 101(c) of the Electronic Signatures 

10 in Global Commerce Act, if a sender initiates 

11 the transaction electronically and the informa12 tion is displayed electronically in a manner that 

13 the sender can keep. 

14 ‘‘(b) FOREIGN LANGUAGE DISCLOSURES.— 

15 ‘‘(1) IN GENERAL.—The disclosures required 

16 under this section shall be made in English and in 

17 each of the same foreign languages principally used 

18 by the remittance transfer provider, or any of its 

19 agents, to advertise, solicit, or market, either orally 

20 or in writing, at that office. 

21 ‘‘(2) ACCOUNTS.—In the case of a sender who 

22 holds a demand deposit, savings deposit, or other 

23 asset account with the remittance transfer provider 

24 (other than an occasional or incidental credit bal25 ance under an open end credit plan, as defined in 


sroberts on DSKH9S0YB1PROD with BILLS
1448 

•S 3217 AMDT 3739 

1 section 103(i) of the Truth in Lending Act), the dis2 closures required under this section shall be made in 

3 the language or languages principally used by the re4 mittance transfer provider to communicate to the 

5 sender with respect to the account. 

6 ‘‘(c) REMITTANCE TRANSFER ERRORS.— 

7 ‘‘(1) ERROR RESOLUTION.— 

8 ‘‘(A) IN GENERAL.—If a remittance trans9 fer provider receives oral or written notice from 

10 the sender within 180 days of the promised 

11 date of delivery that an error occurred with re12 spect to a remittance transfer, including the 

13 amount of currency designated in subsection 

14 (a)(3)(A) that was to be sent to the designated 

15 recipient of the remittance transfer, using the 

16 values of the currency into which the funds 

17 should have been exchanged, but was not made 

18 available to the designated recipient in the for19 eign country, the remittance transfer provider 

20 shall resolve the error pursuant to this sub21 section and investigate the reason for the error. 

22 ‘‘(B) REMEDIES.—Not later than 90 days 

23 after the date of receipt of a notice from the 

24 sender pursuant to subparagraph (A), the reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01448 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1449 

•S 3217 AMDT 3739 

1 mittance transfer provider shall, as applicable 

2 to the error and as designated by the sender— 

3 ‘‘(i) refund to the sender the total 

4 amount of funds tendered by the sender in 

5 connection with the remittance transfer 

6 which was not properly transmitted; 

7 ‘‘(ii) make available to the designated 

8 recipient, without additional cost to the 

9 designated recipient or to the sender, the 

10 amount appropriate to resolve the error; 

11 ‘‘(iii) provide such other remedy, as 

12 determined appropriate by rule of the 

13 Board for the protection of senders; or 

14 ‘‘(iv) provide written notice to the 

15 sender that there was no error with an ex16 planation responding to the specific com17 plaint of the sender. 

18 ‘‘(2) RULES.—The Board shall establish, by 

19 rule issued not later than 1 calendar year after the 

20 date of enactment of the Restoring American Finan21 cial Stability Act of 2010, clear and appropriate 

22 standards for remittance transfer providers with re23 spect to error resolution relating to remittance 

24 transfers, to protect senders from such errors. 

25 Standards prescribed under this paragraph shall inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01449 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1450 

•S 3217 AMDT 3739 

1 clude appropriate standards regarding record keep2 ing, as required, including documentation— 

3 ‘‘(A) of the complaint of the sender; 

4 ‘‘(B) that the sender provides the remit5 tance transfer provider with respect to the al6 leged error; and 

7 ‘‘(C) of the findings of the remittance 

8 transfer provider regarding the investigation of 

9 the alleged error that the sender brought to 

10 their attention. 

11 ‘‘(d) APPLICABILITY OF THIS TITLE.— 

12 ‘‘(1) IN GENERAL.—A remittance transfer that 

13 is not an electronic fund transfer, as defined in sec14 tion 903, shall not be subject to any of the provi15 sions of sections 905 through 913. A remittance 

16 transfer that is an electronic fund transfer, as de17 fined in section 903, shall be subject to all provisions 

18 of this title, except for section 908, that are other19 wise applicable to electronic fund transfers under 

20 this title. 

21 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

22 this section shall be construed— 

23 ‘‘(A) to affect the application to any trans24 action, to any remittance provider, or to any 

25 other person of any of the provisions of subVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01450 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1451 

•S 3217 AMDT 3739 

1 chapter II of chapter 53 of title 31, United 

2 States Code, section 21 of the Federal Deposit 

3 Insurance Act (12 U.S.C. 1829b), or chapter 2 

4 of title I of Public Law 91–508 (12 U.S.C. 

5 1951–1959), or any regulations promulgated 

6 thereunder; or 

7 ‘‘(B) to cause any fund transfer that would 

8 not otherwise be treated as such under para9 graph (1) to be treated as an electronic fund 

10 transfer, or as otherwise subject to this title, for 

11 the purposes of any of the provisions referred to 

12 in subparagraph (A) or any regulations promul13 gated thereunder. 

14 ‘‘(e) ACTS OF AGENTS.—A remittance transfer pro15 vider shall be liable for any violation of this section by 

16 any agent, authorized delegate, or person affiliated with 

17 such provider, when such agent, authorized delegate, or 

18 affiliate acts for that remittance transfer provider. 

19 ‘‘(f) DEFINITIONS.—As used in this section— 

20 ‘‘(1) the term ‘designated recipient’ means any 

21 person located in a foreign country and identified by 

22 the sender as the authorized recipient of a remit23 tance transfer to be made by a remittance transfer 

24 provider, except that a designated recipient shall not 


sroberts on DSKH9S0YB1PROD with BILLS
1452 

•S 3217 AMDT 3739 

1 be deemed to be a consumer for purposes of this 

2 Act; 

3 ‘‘(2) the term ‘remittance transfer’ means the 

4 electronic (as defined in section 106(2) of the Elec5 tronic Signatures in Global and National Commerce 

6 Act (15 U.S.C. 7006(2))) transfer of funds re7 quested by a sender located in any State to a des8 ignated recipient that is initiated by a remittance 

9 transfer provider, whether or not the sender holds 

10 an account with the remittance transfer provider or 

11 whether or not the remittance transfer is also an 

12 electronic fund transfer, as defined in section 903; 

13 ‘‘(3) the term ‘remittance transfer provider’ 

14 means any person or financial institution that pro15 vides remittance transfers for a consumer in the nor16 mal course of its business, whether or not the con17 sumer holds an account with such person or finan18 cial institution; and 

19 ‘‘(4) the term ‘sender’ means a consumer who 

20 requests a remittance provider to send a remittance 

21 transfer for the consumer to a designated recipi22 ent.’’. 

23 (b) AUTOMATED CLEARINGHOUSE SYSTEM.— 

24 (1) EXPANSION OF SYSTEM.—The Board of 

25 Governors shall work with the Federal reserve banks 


sroberts on DSKH9S0YB1PROD with BILLS
1453 

•S 3217 AMDT 3739 

1 to expand the use of the automated clearinghouse 

2 system for remittance transfers to foreign countries, 

3 with a focus on countries that receive significant re4 mittance transfers from the United States, based 

5 on— 

6 (A) the number, volume, and size of such 

7 transfers; 

8 (B) the significance of the volume of such 

9 transfers relative to the external financial flows 

10 of the receiving country, including— 

11 (i) the total amount transferred; and 

12 (ii) the total volume of payments 

13 made by United States Government agen14 cies to beneficiaries and retirees living 

15 abroad; 

16 (C) the feasibility of such an expansion; 

17 and 

18 (D) the ability of the Federal Reserve Sys19 tem to establish payment gateways in different 

20 geographic regions and currency zones to re21 ceive remittance transfers and route them 

22 through the payments systems in the destina23 tion countries. 

24 (2) REPORT TO CONGRESS.—Not later than one 

25 calendar year after the date of enactment of this 


sroberts on DSKH9S0YB1PROD with BILLS
1454 

•S 3217 AMDT 3739 

1 Act, and on April 30 biennially thereafter during the 

2 10-year period beginning on that date of enactment, 

3 the Board of Governors shall submit a report to the 

4 Committee on Banking, Housing, and Urban Affairs 

5 of the Senate and the Committee on Financial Serv6 ices of the House of Representatives on the status 

7 of the automated clearinghouse system and its 

8 progress in complying with the requirements of this 

9 subsection. The report shall include an analysis of 

10 adoption rates of International ACH Transactions 

11 rules and formats, the efficacy of increasing adop12 tion rates, and potential recommendations to in13 crease adoption. 

14 (c) EXPANSION OF FINANCIAL INSTITUTION PROVI15 SION OF REMITTANCE TRANSFERS.— 

16 (1) PROVISION OF GUIDELINES TO INSTITU17 TIONS.—Each of the Federal banking agencies and 

18 the National Credit Union Administration shall pro19 vide guidelines to financial institutions under the ju20 risdiction of the agency regarding the offering of 

21 low-cost remittance transfers and no-cost or low-cost 

22 basic consumer accounts, as well as agency services 

23 to remittance transfer providers. 

24 (2) ASSISTANCE TO FINANCIAL LITERACY COM25 MISSION.—As part of its duties as members of the 


sroberts on DSKH9S0YB1PROD with BILLS
1455 

•S 3217 AMDT 3739 

1 Financial Literacy and Education Commission, the 

2 Bureau, the Federal banking agencies, and the Na3 tional Credit Union Administration shall assist the 

4 Financial Literacy and Education Commission in 

5 executing the Strategy for Assuring Financial Em6 powerment (or the ‘‘SAFE Strategy’’), as it relates 

7 to remittances. 

8 (d) FEDERAL CREDIT UNION ACT CONFORMING

9 AMENDMENT.—Paragraph (12) of section 107 of the Fed10 eral Credit Union Act (12 U.S.C. 1757) is amended to 

11 read as follows: 

12 ‘‘(12) in accordance with regulations prescribed 

13 by the Board— 

14 ‘‘(A) to sell, to persons in the field of 

15 membership, negotiable checks (including trav16 elers checks), money orders, and other similar 

17 money transfer instruments (including inter18 national and domestic electronic fund trans19 fers); 

20 ‘‘(B) to provide remittance transfers, as 

21 defined in section 919 of the Electronic Fund 

22 Transfer Act, to persons in the field of member23 ship; and 

24 ‘‘(C) to cash checks and money orders for 

25 persons in the field of membership for a fee;’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1456 

•S 3217 AMDT 3739 

1 Subtitle H—Conforming 

2 Amendments 

3 SEC. 1081. AMENDMENTS TO THE INSPECTOR GENERAL 

4 ACT. 

5 Effective on the date of enactment of this Act, the 

6 Inspector General Act of 1978 (5 U.S.C. App. 3) is 

7 amended— 

8 (1) in section 8G(a)(2), by inserting ‘‘and the 

9 Bureau of Consumer Financial Protection’’ after 

10 ‘‘Board of Governors of the Federal Reserve Sys11 tem’’; 

12 (2) in section 8G(c), by adding at the end the 

13 following: ‘‘For purposes of implementing this sec14 tion, the Chairman of the Board of Governors of the 

15 Federal Reserve System shall appoint the Inspector 

16 General of the Board of Governors of the Federal 

17 Reserve System and the Bureau of Consumer Finan18 cial Protection. The Inspector General of the Board 

19 of Governors of the Federal Reserve System and the 

20 Bureau of Consumer Financial Protection shall have 

21 all of the authorities and responsibilities provided by 

22 this Act with respect to the Bureau of Consumer Fi23 nancial Protection, as if the Bureau were part of the 

24 Board of Governors of the Federal Reserve Sys25 tem.’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1457 

•S 3217 AMDT 3739 

1 (3) in section 8G(g)(3), by inserting ‘‘and the 

2 Bureau of Consumer Financial Protection’’ after 

3 ‘‘Board of Governors of the Federal Reserve Sys4 tem’’ the first place that term appears. 

5 SEC. 1082. AMENDMENTS TO THE PRIVACY ACT OF 1974. 

6 Effective on the date of enactment of this Act, section 

7 552a of title 5, United States Code, is amended by adding 

8 at the end the following: 

9 ‘‘(w) APPLICABILITY TO BUREAU OF CONSUMER FI10 NANCIAL PROTECTION.—Except as provided in the Con11 sumer Financial Protection Act of 2010, this section shall 

12 apply with respect to the Bureau of Consumer Financial 

13 Protection.’’. 

14 SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORT15 GAGE TRANSACTION PARITY ACT OF 1982. 

16 (a) IN GENERAL.—The Alternative Mortgage Trans17 action Parity Act of 1982 (12 U.S.C. 3801 et seq.) is 

18 amended— 

19 (1) in section 803 (12 U.S.C. 3802(1)), by 

20 striking ‘‘1974’’ and all that follows through ‘‘de21 scribed and defined’’ and inserting the following: 

22 ‘‘1974), in which the interest rate or finance charge 

23 may be adjusted or renegotiated, described and de24 fined’’; and 

25 (2) in section 804 (12 U.S.C. 3803)— 


sroberts on DSKH9S0YB1PROD with BILLS
1458 

•S 3217 AMDT 3739 

1 (A) in subsection (a)— 

2 (i) in each of paragraphs (1), (2), and 

3 (3), by inserting after ‘‘transactions made’’ 

4 each place that term appears ‘‘on or before 

5 the designated transfer date, as deter6 mined under section 1062 of the Consumer 

7 Financial Protection Act of 2010,’’; 

8 (ii) in paragraph (2), by striking 

9 ‘‘and’’ at the end; 

10 (iii) in paragraph (3), by striking the 

11 period at the end and inserting ‘‘; and’’; 

12 and 

13 (iv) by adding at the end the following 

14 new paragraph: 

15 ‘‘(4) with respect to transactions made after the 

16 designated transfer date, only in accordance with 

17 regulations governing alternative mortgage trans18 actions, as issued by the Bureau of Consumer Fi19 nancial Protection for federally chartered housing 

20 creditors, in accordance with the rulemaking author21 ity granted to the Bureau of Consumer Financial 

22 Protection with regard to federally chartered hous23 ing creditors under provisions of law other than this 

24 section.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1459 

•S 3217 AMDT 3739 

1 (B) by striking subsection (c) and insert2 ing the following: 

3 ‘‘(c) PREEMPTION OF STATE LAW.—An alternative 

4 mortgage transaction may be made by a housing creditor 

5 in accordance with this section, notwithstanding any State 

6 constitution, law, or regulation that prohibits an alter7 native mortgage transaction. For purposes of this sub8 section, a State constitution, law, or regulation that pro9 hibits an alternative mortgage transaction does not in10 clude any State constitution, law, or regulation that regu11 lates mortgage transactions generally, including any re12 striction on prepayment penalties or late charges.’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(d) BUREAU ACTIONS.—The Bureau of Consumer 

15 Financial Protection shall— 

16 ‘‘(1) review the regulations identified by the 

17 Comptroller of the Currency and the National Credit 

18 Union Administration, (as those rules exist on the 

19 designated transfer date), as applicable under para20 graphs (1) through (3) of subsection (a); 

21 ‘‘(2) determine whether such regulations are 

22 fair and not deceptive and otherwise meet the objec23 tives of the Consumer Financial Protection Act of 

24 2010; and 


sroberts on DSKH9S0YB1PROD with BILLS
1460 

•S 3217 AMDT 3739 

1 ‘‘(3) promulgate regulations under subsection 

2 (a)(4) after the designated transfer date. 

3 ‘‘(e) DESIGNATED TRANSFER DATE.—As used in 

4 this section, the term ‘designated transfer date’ means the 

5 date determined under section 1062 of the Consumer Fi6 nancial Protection Act of 2010.’’. 

7 (b) EFFECTIVE DATE.—This section and the amend8 ments made by this section shall become effective on the 

9 designated transfer date. 

10 (c) RULE OF CONSTRUCTION.—The amendments 

11 made by subsection (a) shall not affect any transaction 

12 covered by the Alternative Mortgage Transaction Parity 

13 Act of l982 (12 U.S.C. 3801 et seq.) and entered into on 

14 or before the designated transfer date. 

15 SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND 

16 TRANSFER ACT. 

17 The Electronic Fund Transfer Act (15 U.S.C. 1693 

18 et seq.) is amended— 

19 (1) by striking ‘‘Board’’ each place that term 

20 appears and inserting ‘‘Bureau’’, except in section 

21 918 (as so designated by the Credit Card Act of 

22 2009) (15 U.S.C. 1693o); 

23 (2) in section 903 (15 U.S.C. 1693a), by strik24 ing paragraph (3) and inserting the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1461 

•S 3217 AMDT 3739 

1 ‘‘(3) the term ‘Bureau’ means the Bureau of 

2 Consumer Financial Protection;’’; 

3 (3) in section 916(d) (as so designated by sec4 tion 401 of the Credit CARD Act of 2009) (15 

5 U.S.C. 1693m)— 

6 (A) by striking ‘‘FEDERAL RESERVE SYS7 TEM’’ and inserting ‘‘BUREAU OF CONSUMER

8 FINANCIAL PROTECTION’’; and 

9 (B) by striking ‘‘Federal Reserve System’’ 

10 and inserting ‘‘Bureau of Consumer Financial 

11 Protection’’; and 

12 (4) in section 918 (as so designated by the 

13 Credit CARD Act of 2009) (15 U.S.C. 1693o)— 

14 (A) in subsection (a)— 

15 (i) by striking ‘‘Compliance’’ and in16 serting ‘‘Except as otherwise provided by 

17 subtitle B of the Consumer Financial Pro18 tection Act of 2010, compliance’’; and 

19 (ii) by striking paragraph (2) and in20 serting the following: 

21 ‘‘(2) subtitle E of the Consumer Financial Pro22 tection Act of 2010, by the Bureau;’’; and 

23 (B) by striking subsection (c) and insert24 ing the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1462 

•S 3217 AMDT 3739 

1 ‘‘(c) OVERALL ENFORCEMENT AUTHORITY OF THE

2 FEDERAL TRADE COMMISSION.—Except to the extent 

3 that enforcement of the requirements imposed under this 

4 title is specifically committed to some other Government 

5 agency under subsection (a), and subject to subtitle B of 

6 the Consumer Financial Protection Act of 2010, the Fed7 eral Trade Commission shall enforce such requirements. 

8 For the purpose of the exercise by the Federal Trade 

9 Commission of its functions and powers under the Federal 

10 Trade Commission Act, a violation of any requirement im11 posed under this title shall be deemed a violation of a re12 quirement imposed under that Act. All of the functions 

13 and powers of the Federal Trade Commission under the 

14 Federal Trade Commission Act are available to the Fed15 eral Trade Commission to enforce compliance by any per16 son subject to the jurisdiction of the Federal Trade Com17 mission with the requirements imposed under this title, 

18 irrespective of whether that person is engaged in com19 merce or meets any other jurisdictional tests under the 

20 Federal Trade Commission Act.’’. 

21 SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPOR22 TUNITY ACT. 

23 The Equal Credit Opportunity Act (15 U.S.C. 1691 

24 et seq.) is amended— 


sroberts on DSKH9S0YB1PROD with BILLS
1463 

•S 3217 AMDT 3739 

1 (1) by striking ‘‘Board’’ each place that term 

2 appears and inserting ‘‘Bureau’’; 

3 (2) in section 702 (15 U.S.C. 1691a), by strik4 ing subsection (c) and inserting the following: 

5 ‘‘(c) The term ‘Bureau’ means the Bureau of Con6 sumer Financial Protection.’’; 

7 (3) in section 703 (15 U.S.C. 1691b)— 

8 (A) by striking the section heading and in9 serting the following: 

10 ‘‘SEC. 703. PROMULGATION OF REGULATIONS BY THE BU11 REAU.’’; 

12 (B) by striking ‘‘(a) REGULATIONS.—’’; 

13 (C) by striking subsection (b); 

14 (D) by redesignating paragraphs (1) 

15 through (5) as subsections (a) through (e), re16 spectively; and 

17 (E) in subsection (c), as so redesignated, 

18 by striking ‘‘paragraph (2)’’ and inserting ‘‘sub19 section (b)’’; 

20 (4) in section 704 (15 U.S.C. 1691c)— 

21 (A) in subsection (a)— 

22 (i) by striking ‘‘Compliance’’ and in23 serting ‘‘Except as otherwise provided by 

24 subtitle B of the Consumer Protection Fi25 nancial Protection Act of 2010’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1464 

•S 3217 AMDT 3739 

1 (ii) by striking paragraph (2) and in2 serting the following: 

3 ‘‘(2) Subtitle E of the Consumer Financial Pro4 tection Act of 2010, by the Bureau.’’; 

5 (B) by striking subsection (c) and insert6 ing the following: 

7 ‘‘(c) OVERALL ENFORCEMENT AUTHORITY OF FED8 ERAL TRADE COMMISSION.—Except to the extent that en9 forcement of the requirements imposed under this title is 

10 specifically committed to some other Government agency 

11 under subsection (a), and subject to subtitle B of the Con12 sumer Financial Protection Act of 2010, the Federal 

13 Trade Commission shall enforce such requirements. For 

14 the purpose of the exercise by the Federal Trade Commis15 sion of its functions and powers under the Federal Trade 

16 Commission Act (15 U.S.C. 41 et seq.), a violation of any 

17 requirement imposed under this subchapter shall be 

18 deemed a violation of a requirement imposed under that 

19 Act. All of the functions and powers of the Federal Trade 

20 Commission under the Federal Trade Commission Act are 

21 available to the Federal Trade Commission to enforce 

22 compliance by any person with the requirements imposed 

23 under this title, irrespective of whether that person is en24 gaged in commerce or meets any other jurisdictional tests 

25 under the Federal Trade Commission Act, including the 


sroberts on DSKH9S0YB1PROD with BILLS
1465 

•S 3217 AMDT 3739 

1 power to enforce any rule prescribed by the Bureau under 

2 this title in the same manner as if the violation had been 

3 a violation of a Federal Trade Commission trade regula4 tion rule.’’; and 

5 (C) in subsection (d), by striking ‘‘Board’’ 

6 and inserting ‘‘Bureau’’; and 

7 (5) in section 706(e) (15 U.S.C. 1691e(e))— 

8 (A) in the subsection heading— 

9 (i) by striking ‘‘BOARD’’ each place 

10 that term appears and inserting ‘‘BU11 REAU’’; and 

12 (ii) by striking ‘‘FEDERAL RESERVE

13 SYSTEM’’ and inserting ‘‘BUREAU OF CON14 SUMER FINANCIAL PROTECTION’’; and 

15 (B) by striking ‘‘Federal Reserve System’’ 

16 and inserting ‘‘Bureau of Consumer Financial 

17 Protection’’. 

18 SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS 

19 AVAILABILITY ACT. 

20 (a) AMENDMENT TO SECTION 603.—Section 

21 603(d)(1) of the Expedited Funds Availability Act (12 

22 U.S.C. 4002) is amended by inserting after ‘‘Board’’ the 

23 following ‘‘, jointly with the Director of the Bureau of 

24 Consumer Financial Protection,’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1466 

•S 3217 AMDT 3739 

1 (b) AMENDMENTS TO SECTION 604.—Section 604 of 

2 the Expedited Funds Availability Act (12 U.S.C. 4003) 

3 is amended— 

4 (1) by inserting after ‘‘Board’’ each place that 

5 term appears, other than in subsection (f), the fol6 lowing: ‘‘, jointly with the Director of the Bureau of 

7 Consumer Financial Protection,’’; and 

8 (2) in subsection (f), by striking ‘‘Board.’’ each 

9 place that term appears and inserting the following: 

10 ‘‘Board, jointly with the Director of the Bureau of 

11 Consumer Financial Protection.’’. 

12 (c) AMENDMENTS TO SECTION 605.—Section 605 of 

13 the Expedited Funds Availability Act (12 U.S.C. 4004) 

14 is amended— 

15 (1) by inserting after ‘‘Board’’ each place that 

16 term appears, other than in the heading for section 

17 605(f)(1), the following: ‘‘, jointly with the Director 

18 of the Bureau of Consumer Financial Protection,’’; 

19 and 

20 (2) in subsection (f)(1), in the paragraph head21 ing, by inserting ‘‘AND BUREAU’’ after ‘‘BOARD’’. 

22 (d) AMENDMENTS TO SECTION 609.—Section 609 of 

23 the Expedited Funds Availability Act (12 U.S.C. 4008) 

24 is amended: 


sroberts on DSKH9S0YB1PROD with BILLS
1467 

•S 3217 AMDT 3739 

1 (1) in subsection (a), by inserting after 

2 ‘‘Board’’ the following ‘‘, jointly with the Director of 

3 the Bureau of Consumer Financial Protection,’’; and 

4 (2) by striking subsection (e) and inserting the 

5 following: 

6 ‘‘(e) CONSULTATIONS.—In prescribing regulations 

7 under subsections (a) and (b), the Board and the Director 

8 of the Bureau of Consumer Financial Protection, in the 

9 case of subsection (a), and the Board, in the case of sub10 section (b), shall consult with the Comptroller of the Cur11 rency, the Board of Directors of the Federal Deposit In12 surance Corporation, and the National Credit Union Ad13 ministration Board.’’. 

14 (e) EXPEDITED FUNDS AVAILABILITY IMPROVE15 MENTS.—Section 603 of the Expedited Funds Availability 

16 Act (12 U.S.C. 4002) is amended— 

17 (1) in subsection (a)(2)(D), by striking ‘‘$100’’ 

18 and inserting ‘‘$200’’; and 

19 (2) in subsection (b)(3)(C), in the subpara20 graph heading, by striking ‘‘$100’’ and inserting 

21 ‘‘$200’’; and 

22 (3) in subsection (c)(1)(B)(iii), in the clause 

23 heading, by striking ‘‘$100’’ and inserting ‘‘$200’’. 

24 (f) REGULAR ADJUSTMENTS FOR INFLATION.—Sec25 tion 607 of the Expedited Funds Availability Act (12 


sroberts on DSKH9S0YB1PROD with BILLS
1468 

•S 3217 AMDT 3739 

1 U.S.C. 4006) is amended by adding at the end the fol2 lowing: 

3 ‘‘(f) ADJUSTMENTS TO DOLLAR AMOUNTS FOR IN4 FLATION.—The dollar amounts under this title shall be 

5 adjusted every 5 years after December 31, 2011, by the 

6 annual percentage increase in the Consumer Price Index 

7 for Urban Wage Earners and Clerical Workers, as pub8 lished by the Bureau of Labor Statistics, rounded to the 

9 nearest multiple of $25.’’. 

10 SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING 

11 ACT. 

12 The Fair Credit Billing Act (15 U.S.C. 1666–1666j) 

13 is amended by striking ‘‘Board’’ each place that term ap14 pears and inserting ‘‘Bureau’’. 

15 SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING 

16 ACT AND THE FAIR AND ACCURATE CREDIT 

17 TRANSACTIONS ACT. 

18 (a) FAIR CREDIT REPORTING ACT.—The Fair Credit 

19 Reporting Act (15 U.S.C. 1681 et seq.) is amended— 

20 (1) in section 603 (15 U.S.C. 1681a)— 

21 (A) by redesignating subsections (w) and 

22 (x) as subsections (x) and (y), respectively; and 

23 (B) by inserting after subsection (v) the 

24 following: 


sroberts on DSKH9S0YB1PROD with BILLS
1469 

•S 3217 AMDT 3739 

1 ‘‘(w) The term ‘Bureau’ means the Bureau of Con2 sumer Financial Protection.’’; and 

3 (2) except as otherwise specifically provided in 

4 this subsection— 

5 (A) by striking ‘‘Federal Trade Commis6 sion’’ each place that term appears and insert7 ing ‘‘Bureau’’; 

8 (B) by striking ‘‘FTC’’ each place that 

9 term appears and inserting ‘‘Bureau’’; 

10 (C) by striking ‘‘the Commission’’ each 

11 place that term appears and inserting ‘‘the Bu12 reau’’; and 

13 (D) by striking ‘‘The Federal banking 

14 agencies, the National Credit Union Adminis15 tration, and the Commission shall jointly’’ each 

16 place that term appears and inserting ‘‘The Bu17 reau shall’’; 

18 (3) in section 603(k)(2) (15 U.S.C. 

19 1681a(k)(2)), by striking ‘‘Board of Governors of 

20 the Federal Reserve System’’ and inserting ‘‘Bu21 reau’’; 

22 (4) in section 604(g) (15 U.S.C. 1681b(g))— 

23 (A) in paragraph (3), by striking subpara24 graph (C) and inserting the following: 


sroberts on DSKH9S0YB1PROD with BILLS
1470 

•S 3217 AMDT 3739 

1 ‘‘(C) as otherwise determined to be nec2 essary and appropriate, by regulation or order, 

3 by the Bureau (consistent with the enforcement 

4 authorities prescribed under section 621(b)), or 

5 the applicable State insurance authority (with 

6 respect to any person engaged in providing in7 surance or annuities).’’; 

8 (B) by striking paragraph (5) and insert9 ing the following: 

10 ‘‘(5) REGULATIONS AND EFFECTIVE DATE FOR

11 PARAGRAPH (2).— 

12 ‘‘(A) REGULATIONS REQUIRED.—The Bu13 reau may, after notice and opportunity for com14 ment, prescribe regulations that permit trans15 actions under paragraph (2) that are deter16 mined to be necessary and appropriate to pro17 tect legitimate operational, transactional, risk, 

18 consumer, and other needs (and which shall in19 clude permitting actions necessary for adminis20 trative verification purposes), consistent with 

21 the intent of paragraph (2) to restrict the use 

22 of medical information for inappropriate pur23 poses.’’; and 

24 (C) by striking paragraph (6); 


sroberts on DSKH9S0YB1PROD with BILLS
1471 

•S 3217 AMDT 3739 

1 (5) in section 611(e)(2) (15 U.S.C. 1681i(e)), 

2 by striking paragraph (2) and inserting the fol3 lowing: 

4 ‘‘(2) EXCLUSION.—Complaints received or ob5 tained by the Bureau pursuant to its investigative 

6 authority under the Consumer Financial Protection 

7 Act of 2010 shall not be subject to paragraph (1).’’; 

8 (6) in section 615(h)(6) (15 U.S.C. 

9 1681m(h)(6)), by striking subparagraph (A) and in10 serting the following: 

11 ‘‘(A) RULES REQUIRED.—The Bureau 

12 shall prescribe rules to carry out this sub13 section.’’; 

14 (7) in section 621 (15 U.S.C. 1681s)— 

15 (A) by striking subsection (a) and insert16 ing the following: 

17 ‘‘(a) ENFORCEMENT BY FEDERAL TRADE COMMIS18 SION.— 

19 ‘‘(1) IN GENERAL.—Except as otherwise pro20 vided by subtitle B of the Consumer Financial Pro21 tection Act of 2010, compliance with the require22 ments imposed under this title shall be enforced 

23 under the Federal Trade Commission Act (15 

24 U.S.C. 41 et seq.) by the Federal Trade Commis25 sion, with respect to consumer reporting agencies 


sroberts on DSKH9S0YB1PROD with BILLS
1472 

•S 3217 AMDT 3739 

1 and all other persons subject thereto, except to the 

2 extent that enforcement of the requirements imposed 

3 under this title is specifically committed to some 

4 other Government agency under subsection (b). For 

5 the purpose of the exercise by the Federal Trade 

6 Commission of its functions and powers under the 

7 Federal Trade Commission Act, a violation of any 

8 requirement or prohibition imposed under this title 

9 shall constitute an unfair or deceptive act or practice 

10 in commerce, in violation of section 5(a) of the Fed11 eral Trade Commission Act (15 U.S.C. 45(a)), and 

12 shall be subject to enforcement by the Federal Trade 

13 Commission under section 5(b) of that Act with re14 spect to any consumer reporting agency or person 

15 that is subject to enforcement by the Federal Trade 

16 Commission pursuant to this subsection, irrespective 

17 of whether that person is engaged in commerce or 

18 meets any other jurisdictional tests under the Fed19 eral Trade Commission Act. The Federal Trade 

20 Commission shall have such procedural, investiga21 tive, and enforcement powers (except as otherwise 

22 provided by subtitle B of the Consumer Financial 

23 Protection Act of 2010), including the power to 

24 issue procedural rules in enforcing compliance with 

25 the requirements imposed under this title and to reVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01472 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1473 

•S 3217 AMDT 3739 

1 quire the filing of reports, the production of docu2 ments, and the appearance of witnesses, as though 

3 the applicable terms and conditions of the Federal 

4 Trade Commission Act were part of this title. Any 

5 person violating any of the provisions of this title 

6 shall be subject to the penalties and entitled to the 

7 privileges and immunities provided in the Federal 

8 Trade Commission Act as though the applicable 

9 terms and provisions of such Act are part of this 

10 title. 

11 ‘‘(2) PENALTIES.— 

12 ‘‘(A) KNOWING VIOLATIONS.—Except as 

13 otherwise provided by subtitle B of the Con14 sumer Financial Protection Act of 2010, in the 

15 event of a knowing violation, which constitutes 

16 a pattern or practice of violations of this title, 

17 the Federal Trade Commission may commence 

18 a civil action to recover a civil penalty in a dis19 trict court of the United States against any 

20 person that violates this title. In such action, 

21 such person shall be liable for a civil penalty of 

22 not more than $2,500 per violation. 

23 ‘‘(B) DETERMINING PENALTY AMOUNT.— 

24 In determining the amount of a civil penalty 

25 under subparagraph (A), the court shall take 


sroberts on DSKH9S0YB1PROD with BILLS
1474 

•S 3217 AMDT 3739 

1 into account the degree of culpability, any his2 tory of such prior conduct, ability to pay, effect 

3 on ability to continue to do business, and such 

4 other matters as justice may require. 

5 ‘‘(C) LIMITATION.—Notwithstanding para6 graph (2), a court may not impose any civil 

7 penalty on a person for a violation of section 

8 623(a)(1), unless the person has been enjoined 

9 from committing the violation, or ordered not to 

10 commit the violation, in an action or proceeding 

11 brought by or on behalf of the Federal Trade 

12 Commission, and has violated the injunction or 

13 order, and the court may not impose any civil 

14 penalty for any violation occurring before the 

15 date of the violation of the injunction or 

16 order.’’; 

17 (8) by striking subsection (b) and inserting the 

18 following: 

19 ‘‘(b) ENFORCEMENT BY OTHER AGENCIES.— 

20 ‘‘(1) IN GENERAL.—Except as otherwise pro21 vided by subtitle B of the Consumer Financial Pro22 tection Act of 2010, compliance with the require23 ments imposed under this title with respect to con24 sumer reporting agencies, persons who use consumer 

25 reports from such agencies, persons who furnish inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01474 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1475 

•S 3217 AMDT 3739 

1 formation to such agencies, and users of information 

2 that are subject to section 615(d) shall be enforced 

3 under— 

4 ‘‘(A) section 8 of the Federal Deposit In5 surance Act (12 U.S.C. 1818), in the case of— 

6 ‘‘(i) any national bank, and any Fed7 eral branch or Federal agency of a foreign 

8 bank, by the Office of the Comptroller of 

9 the Currency; 

10 ‘‘(ii) any member bank of the Federal 

11 Reserve System (other than a national 

12 bank), a branch or agency of a foreign 

13 bank (other than a Federal branch, Fed14 eral agency, or insured State branch of a 

15 foreign bank), a commercial lending com16 pany owned or controlled by a foreign 

17 bank, and any organization operating 

18 under section 25 or 25A of the Federal 

19 Reserve Act, by the Board of Governors of 

20 the Federal Reserve System; and 

21 ‘‘(iii) any bank insured by the Federal 

22 Deposit Insurance Corporation (other than 

23 a member of the Federal Reserve System) 

24 and any insured State branch of a foreign 


sroberts on DSKH9S0YB1PROD with BILLS
1476 

•S 3217 AMDT 3739 

1 bank, by the Board of Directors of the 

2 Federal Deposit Insurance Corporation; 

3 ‘‘(B) subtitle E of the Consumer Financial 

4 Protection Act of 2010, by the Bureau; 

5 ‘‘(C) the Federal Credit Union Act (12 

6 U.S.C. 1751 et seq.), by the Administrator of 

7 the National Credit Union Administration with 

8 respect to any Federal credit union; 

9 ‘‘(D) subtitle IV of title 49, United States 

10 Code, by the Secretary of Transportation, with 

11 respect to all carriers subject to the jurisdiction 

12 of the Surface Transportation Board; 

13 ‘‘(E) the Federal Aviation Act of 1958 (49 

14 U.S.C. App. 1301 et seq.), by the Secretary of 

15 Transportation, with respect to any air carrier 

16 or foreign air carrier subject to that Act; 

17 ‘‘(F) the Packers and Stockyards Act, 

18 1921 (7 U.S.C. 181 et seq.) (except as provided 

19 in section 406 of that Act), by the Secretary of 

20 Agriculture, with respect to any activities sub21 ject to that Act; 

22 ‘‘(G) the Commodity Exchange Act, with 

23 respect to a person subject to the jurisdiction of 

24 the Commodity Futures Trading Commission; 

25 and 


sroberts on DSKH9S0YB1PROD with BILLS
1477 

•S 3217 AMDT 3739 

1 ‘‘(H) the Federal securities laws, and any 

2 other laws that are subject to the jurisdiction of 

3 the Securities and Exchange Commission, with 

4 respect to a person that is subject to the juris5 diction of the Securities and Exchange Commis6 sion. 

7 ‘‘(2) INCORPORATED DEFINITIONS.—The terms 

8 used in paragraph (1) that are not defined in this 

9 title or otherwise defined in section 3(s) of the Fed10 eral Deposit Insurance Act (12 U.S.C. 1813(s)) have 

11 the same meanings as in section 1(b) of the Inter12 national Banking Act of 1978 (12 U.S.C. 3101).’’; 

13 (9) by striking subsection (e) and inserting the 

14 following: 

15 ‘‘(e) REGULATORY AUTHORITY.—The Bureau shall 

16 prescribe such regulations as are necessary to carry out 

17 the purposes of this Act. The regulations prescribed by 

18 the Bureau under this subsection shall apply to any person 

19 that is subject to this Act, notwithstanding the enforce20 ment authorities granted to other agencies under this sec21 tion.’’; and 

22 (10) in section 623 (15 U.S.C. 1681s–2)— 

23 (A) in subsection (a)(7), by striking sub24 paragraph (D) and inserting the following: 

25 ‘‘(D) MODEL DISCLOSURE.— 


sroberts on DSKH9S0YB1PROD with BILLS
1478 

•S 3217 AMDT 3739 

1 ‘‘(i) DUTY OF BUREAU.—The Bureau 

2 shall prescribe a brief model disclosure 

3 that a financial institution may use to 

4 comply with subparagraph (A), which shall 

5 not exceed 30 words. 

6 ‘‘(ii) USE OF MODEL NOT RE7 QUIRED.—No provision of this paragraph 

8 may be construed to require a financial in9 stitution to use any such model form pre10 scribed by the Bureau. 

11 ‘‘(iii) COMPLIANCE USING MODEL.—A 

12 financial institution shall be deemed to be 

13 in compliance with subparagraph (A) if the 

14 financial institution uses any model form 

15 prescribed by the Bureau under this sub16 paragraph, or the financial institution uses 

17 any such model form and rearranges its 

18 format.’’; and 

19 (B) by striking subsection (e) and insert20 ing the following: 

21 ‘‘(e) ACCURACY GUIDELINES AND REGULATIONS RE22 QUIRED.— 

23 ‘‘(1) GUIDELINES.—The Bureau shall, with re24 spect to persons or entities that are subject to the 


sroberts on DSKH9S0YB1PROD with BILLS
1479 

•S 3217 AMDT 3739 

1 enforcement authority of the Bureau under section 

2 621— 

3 ‘‘(A) establish and maintain guidelines for 

4 use by each person that furnishes information 

5 to a consumer reporting agency regarding the 

6 accuracy and integrity of the information relat7 ing to consumers that such entities furnish to 

8 consumer reporting agencies, and update such 

9 guidelines as often as necessary; and 

10 ‘‘(B) prescribe regulations requiring each 

11 person that furnishes information to a con12 sumer reporting agency to establish reasonable 

13 policies and procedures for implementing the 

14 guidelines established pursuant to subpara15 graph (A). 

16 ‘‘(2) CRITERIA.—In developing the guidelines 

17 required by paragraph (1)(A), the Bureau shall— 

18 ‘‘(A) identify patterns, practices, and spe19 cific forms of activity that can compromise the 

20 accuracy and integrity of information furnished 

21 to consumer reporting agencies; 

22 ‘‘(B) review the methods (including techno23 logical means) used to furnish information re24 lating to consumers to consumer reporting 

25 agencies; 


sroberts on DSKH9S0YB1PROD with BILLS
1480 

•S 3217 AMDT 3739 

1 ‘‘(C) determine whether persons that fur2 nish information to consumer reporting agen3 cies maintain and enforce policies to ensure the 

4 accuracy and integrity of information furnished 

5 to consumer reporting agencies; and 

6 ‘‘(D) examine the policies and processes 

7 that persons that furnish information to con8 sumer reporting agencies employ to conduct re9 investigations and correct inaccurate informa10 tion relating to consumers that has been fur11 nished to consumer reporting agencies.’’. 

12 (b) FAIR AND ACCURATE CREDIT TRANSACTIONS

13 ACT OF 2003.—Section 214(b)(1) of the Fair and Accu14 rate Credit Transactions Act of 2003 (15 U.S.C. 1681s– 

15 3 note) is amended by striking paragraph (1) and insert16 ing the following: 

17 ‘‘(1) IN GENERAL.—Regulations to carry out 

18 section 624 of the Fair Credit Reporting Act (15 

19 U.S.C. 1681s–3), shall be prescribed, as described in 

20 paragraph (2), by— 

21 ‘‘(A) the Commodity Futures Trading 

22 Commission, with respect to entities subject to 

23 its enforcement authorities; 


sroberts on DSKH9S0YB1PROD with BILLS
1481 

•S 3217 AMDT 3739 

1 ‘‘(B) the Securities and Exchange Commis2 sion, with respect to entities subject to its en3 forcement authorities; and 

4 ‘‘(C) the Bureau, with respect to other en5 tities subject to this Act.’’. 

6 SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION 

7 PRACTICES ACT. 

8 The Fair Debt Collection Practices Act (15 U.S.C. 

9 1692 et seq.) is amended— 

10 (1) by striking ‘‘Commission’’ each place that 

11 term appears and inserting ‘‘Bureau’’; 

12 (2) in section 803 (15 U.S.C. 1692a)— 

13 (A) by striking paragraph (1) and insert14 ing the following: 

15 ‘‘(1) The term ‘Bureau’ means the Bureau of 

16 Consumer Financial Protection.’’; 

17 (3) in section 814 (15 U.S.C. 1692l)— 

18 (A) by striking subsection (a) and insert19 ing the following: 

20 ‘‘(a) FEDERAL TRADE COMMISSION.—Except as oth21 erwise provided by subtitle B of the Consumer Financial 

22 Protection Act of 2010, compliance with this title shall 

23 be enforced by the Federal Trade Commission, except to 

24 the extent that enforcement of the requirements imposed 

25 under this title is specifically committed to another GovVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01481 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1482 

•S 3217 AMDT 3739 

1 ernment agency under subsection (b). For purpose of the 

2 exercise by the Federal Trade Commission of its functions 

3 and powers under the Federal Trade Commission Act (15 

4 U.S.C. 41 et seq.), a violation of this title shall be deemed 

5 an unfair or deceptive act or practice in violation of that 

6 Act. All of the functions and powers of the Federal Trade 

7 Commission under the Federal Trade Commission Act are 

8 available to the Federal Trade Commission to enforce 

9 compliance by any person with this title, irrespective of 

10 whether that person is engaged in commerce or meets any 

11 other jurisdictional tests under the Federal Trade Com12 mission Act, including the power to enforce the provisions 

13 of this title, in the same manner as if the violation had 

14 been a violation of a Federal Trade Commission trade reg15 ulation rule.’’; and 

16 (B) in subsection (b)— 

17 (i) by striking ‘‘Compliance’’ and in18 serting ‘‘Except as otherwise provided by 

19 subtitle B of the Consumer Financial Pro20 tection Act of 2010, compliance’’; and 

21 (ii) by striking paragraph (2) and in22 serting the following: 

23 ‘‘(2) subtitle E of the Consumer Financial Pro24 tection Act of 2010, by the Bureau;’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1483 

•S 3217 AMDT 3739 

1 (4) in subsection (d), by striking ‘‘Neither the 

2 Commission’’ and all that follows through the end of 

3 the subsection and inserting the following: ‘‘The Bu4 reau may prescribe rules with respect to the collec5 tion of debts by debt collectors, as defined in this 

6 Act.’’. 

7 SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT IN8 SURANCE ACT. 

9 The Federal Deposit Insurance Act (12 U.S.C. 1811 

10 et seq.) is amended— 

11 (1) in section 8(t) (12 U.S.C. 1818(t)), by add12 ing at the end the following: 

13 ‘‘(6) REFERRAL TO BUREAU OF CONSUMER FI14 NANCIAL PROTECTION.—Subject to subtitle B of the 

15 Consumer Financial Protection Act of 2010, each 

16 appropriate Federal banking agency shall make a re17 ferral to the Bureau of Consumer Financial Protec18 tion when the Federal banking agency has a reason19 able belief that a violation of an enumerated con20 sumer law, as defined in the Consumer Financial 

21 Protection Act of 2010, has been committed by any 

22 insured depository institution or institution-affiliated 

23 party within the jurisdiction of that appropriate 

24 Federal banking agency.’’; and 

25 (2) in section 43 (12 U.S.C. 1831t)— 


sroberts on DSKH9S0YB1PROD with BILLS
1484 

•S 3217 AMDT 3739 

1 (A) in subsection (c), by striking ‘‘Federal 

2 Trade Commission’’ and inserting ‘‘Bureau’’; 

3 (B) in subsection (d), by striking ‘‘Federal 

4 Trade Commission’’ and inserting ‘‘Bureau’’; 

5 (C) in subsection (e)— 

6 (i) in paragraph (2), by striking 

7 ‘‘Federal Trade Commission’’ and insert8 ing ‘‘Bureau’’; and 

9 (ii) by adding at the end the following 

10 new paragraph: 

11 ‘‘(5) BUREAU.—The term ‘Bureau’ means the 

12 Bureau of Consumer Financial Protection.’’; and 

13 (D) in subsection (f)— 

14 (i) by striking paragraph (1) and in15 serting the following: 

16 ‘‘(1) LIMITED ENFORCEMENT AUTHORITY.— 

17 Compliance with the requirements of subsections (b), 

18 (c), and (e), and any regulation prescribed or order 

19 issued under such subsection, shall be enforced 

20 under the Consumer Financial Protection Act of 

21 2010, by the Bureau, subject to subtitle B of the 

22 Consumer Financial Protection Act of 2010, and 

23 under the Federal Trade Commission Act (15 

24 U.S.C. 41 et seq.) by the Federal Trade Commis25 sion.’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1485 

•S 3217 AMDT 3739 

1 (ii) in paragraph (2), by striking sub2 paragraph (C) and inserting the following: 

3 ‘‘(C) LIMITATION ON STATE ACTION

4 WHILE FEDERAL ACTION PENDING.—If the Bu5 reau or Federal Trade Commission has insti6 tuted an enforcement action for a violation of 

7 this section, no appropriate State supervisory 

8 agency may, during the pendency of such ac9 tion, bring an action under this section against 

10 any defendant named in the complaint of the 

11 Bureau or Federal Trade Commission for any 

12 violation of this section that is alleged in that 

13 complaint.’’. 

14 SEC. 1091. AMENDMENTS TO THE GRAMM-LEACH-BLILEY 

15 ACT. 

16 Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 

17 6801 et seq.) is amended— 

18 (1) in section 504(a)(1) (15 U.S.C. 

19 6804(a)(1))— 

20 (A) by striking ‘‘The Federal banking 

21 agencies, the National Credit Union Adminis22 tration, the Secretary of the Treasury,’’ and in23 serting ‘‘The Bureau of Consumer Financial 

24 Protection and’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1486 

•S 3217 AMDT 3739 

1 (B) by striking ‘‘, and the Federal Trade 

2 Commission’’; 

3 (2) in section 505(a) (15 U.S.C. 6805(a))— 

4 (A) by striking ‘‘This subtitle’’ and all that 

5 follows through ‘‘as follows:’’ and inserting 

6 ‘‘Except as otherwise provided by subtitle B of 

7 the Consumer Financial Protection Act of 

8 2010, this subtitle and the regulations pre9 scribed thereunder shall be enforced by the Bu10 reau of Consumer Financial Protection, the 

11 Federal functional regulators, the State insur12 ance authorities, and the Federal Trade Com13 mission with respect to financial institutions 

14 and other persons subject to their jurisdiction 

15 under applicable law, as follows:’’; 

16 (B) in paragraph (1)— 

17 (i) in subparagraph (B), by inserting 

18 ‘‘and’’ after the semicolon; 

19 (ii) in subparagraph (C), by striking 

20 ‘‘; and’’ and inserting a period; and 

21 (iii) by striking subparagraph (D); 

22 and 

23 (C) by adding at the end the following: 

24 ‘‘(8) Under the Consumer Financial Protection 

25 Act of 2010, by the Bureau of Consumer Financial 


sroberts on DSKH9S0YB1PROD with BILLS
1487 

•S 3217 AMDT 3739 

1 Protection, in the case of any financial institution 

2 and other covered person or service provider that is 

3 subject to the jurisdiction of the Bureau under that 

4 Act, but not with respect to the standards under sec5 tion 501.’’; and 

6 (3) in section 505(b)(1) (15 U.S.C. 

7 6805(b)(1)), by inserting ‘‘, other than the Bureau 

8 of Consumer Financial Protection,’’ after ‘‘sub9 section (a)’’. 

10 SEC. 1092. AMENDMENTS TO THE HOME MORTGAGE DIS11 CLOSURE ACT. 

12 The Home Mortgage Disclosure Act of 1975 (12 

13 U.S.C. 2801 et seq.) is amended— 

14 (1) except as otherwise specifically provided in 

15 this section, by striking ‘‘Board’’ each place that 

16 term appears and inserting ‘‘Bureau’’; 

17 (2) in section 303 (12 U.S.C. 2802)— 

18 (A) by redesignating paragraphs (1) 

19 through (6) as paragraphs (2) through (7), re20 spectively; and 

21 (B) by inserting before paragraph (2) the 

22 following: 

23 ‘‘(1) the term ‘Bureau’ means the Bureau of 

24 Consumer Financial Protection;’’; 

25 (3) in section 304 (12 U.S.C. 2803)— 


sroberts on DSKH9S0YB1PROD with BILLS
1488 

•S 3217 AMDT 3739 

1 (A) in subsection (b)— 

2 (i) in paragraph (4), by inserting 

3 ‘‘age,’’ before ‘‘and gender’’; 

4 (ii) in paragraph (3), by striking 

5 ‘‘and’’ at the end; 

6 (iii) in paragraph (4), by striking the 

7 period at the end and inserting a semi8 colon; and 

9 (iv) by adding at the end the fol10 lowing: 

11 ‘‘(5) the number and dollar amount of mort12 gage loans grouped according to measurements of— 

13 ‘‘(A) the total points and fees payable at 

14 origination in connection with the mortgage as 

15 determined by the Bureau, taking into account 

16 15 U.S.C. 1602(aa)(4); 

17 ‘‘(B) the difference between the annual 

18 percentage rate associated with the loan and a 

19 benchmark rate or rates for all loans; 

20 ‘‘(C) the term in months of any prepay21 ment penalty or other fee or charge payable on 

22 repayment of some portion of principal or the 

23 entire principal in advance of scheduled pay24 ments; and 


sroberts on DSKH9S0YB1PROD with BILLS
1489 

•S 3217 AMDT 3739 

1 ‘‘(D) such other information as the Bureau 

2 may require; and 

3 ‘‘(6) the number and dollar amount of mort4 gage loans and completed applications grouped ac5 cording to measurements of— 

6 ‘‘(A) the value of the real property pledged 

7 or proposed to be pledged as collateral; 

8 ‘‘(B) the actual or proposed term in 

9 months of any introductory period after which 

10 the rate of interest may change; 

11 ‘‘(C) the presence of contractual terms or 

12 proposed contractual terms that would allow the 

13 mortgagor or applicant to make payments other 

14 than fully amortizing payments during any por15 tion of the loan term; 

16 ‘‘(D) the actual or proposed term in 

17 months of the mortgage loan; 

18 ‘‘(E) the channel through which applica19 tion was made, including retail, broker, and 

20 other relevant categories; 

21 ‘‘(F) as the Bureau may determine to be 

22 appropriate, a unique identifier that identifies 

23 the loan originator as set forth in section 1503 

24 of the S.A.F.E. Mortgage Licensing Act of 

25 2008; 


sroberts on DSKH9S0YB1PROD with BILLS
1490 

•S 3217 AMDT 3739 

1 ‘‘(G) as the Bureau may determine to be 

2 appropriate, a universal loan identifier; 

3 ‘‘(H) as the Bureau may determine to be 

4 appropriate, the parcel number that cor5 responds to the real property pledged or pro6 posed to be pledged as collateral; 

7 ‘‘(I) the credit score of mortgage appli8 cants and mortgagors, in such form as the Bu9 reau may prescribe, except that the Bureau 

10 shall modify or require modification of credit 

11 score data that is or will be available to the 

12 public to protect the compelling privacy interest 

13 of the mortgage applicant or mortgagors; and 

14 ‘‘(J) such other information as the Bureau 

15 may require.’’; 

16 (B) in subsection (i), by striking ‘‘sub17 section (b)(4)’’ and inserting ‘‘subsections 

18 (b)(4), (b)(5), and (b)(6)’’; 

19 (C) in subsection (j)— 

20 (i) in paragraph (1), by striking ‘‘(as’’ 

21 and inserting ‘‘(containing loan-level and 

22 application-level information relating to 

23 disclosures required under subsections (a) 

24 and (b) and as otherwise’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1491 

•S 3217 AMDT 3739 

1 (ii) by striking paragraph (3) and in2 serting the following: 

3 ‘‘(3) CHANGE OF FORM NOT REQUIRED.—A de4 pository institution meets the disclosure requirement 

5 of paragraph (1) if the institution provides the infor6 mation required under such paragraph in such for7 mats as the Bureau may require’’; and 

8 (iii) in paragraph (2)(A), by striking 

9 ‘‘in the format in which such information 

10 is maintained by the institution’’ and in11 serting ‘‘in such formats as the Bureau 

12 may require’’; 

13 (D) in subsection (m), by striking para14 graph (2) and inserting the following: 

15 ‘‘(2) FORM OF INFORMATION.—In complying 

16 with paragraph (1), a depository institution shall 

17 provide the person requesting the information with 

18 a copy of the information requested in such formats 

19 as the Bureau may require’’; 

20 (E) by striking subsection (h) and insert21 ing the following: 

22 ‘‘(h) SUBMISSION TO AGENCIES.— 

23 ‘‘(1) IN GENERAL.—The data required to be 

24 disclosed under subsection (b) shall be submitted to 

25 the Bureau or to the appropriate agency for the inVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01491 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1492 

•S 3217 AMDT 3739 

1 stitution reporting under this title, in accordance 

2 with rules prescribed by the Bureau. Notwith3 standing the requirement of subsection (a)(2)(A) for 

4 disclosure by census tract, the Bureau, in coopera5 tion with other appropriate regulators described in 

6 paragraph (2), shall develop regulations that— 

7 ‘‘(A) prescribe the format for such disclo8 sures, the method for submission of the data to 

9 the appropriate regulatory agency, and the pro10 cedures for disclosing the information to the 

11 public; 

12 ‘‘(B) require the collection of data required 

13 to be disclosed under subsection (b) with re14 spect to loans sold by each institution reporting 

15 under this title; 

16 ‘‘(C) require disclosure of the class of the 

17 purchaser of such loans; and 

18 ‘‘(D) permit any reporting institution to 

19 submit in writing to the Bureau or to the ap20 propriate agency such additional data or expla21 nations as it deems relevant to the decision to 

22 originate or purchase mortgage loans. 

23 ‘‘(2) OTHER APPROPRIATE AGENCIES.—The ap24 propriate regulators described in this paragraph 

25 are— 


sroberts on DSKH9S0YB1PROD with BILLS
1493 

•S 3217 AMDT 3739 

1 ‘‘(A) the Office of the Comptroller of the 

2 Currency (hereafter referred to in this Act as 

3 ‘Comptroller’) for national banks and Federal 

4 branches, Federal agencies of foreign banks, 

5 and savings associations; 

6 ‘‘(B) the Federal Deposit Insurance Cor7 poration for banks insured by the Federal De8 posit Insurance Corporation (other than mem9 bers of the Federal Reserve System), mutual 

10 savings banks, insured State branches of for11 eign banks, and any other depository institution 

12 described in section 303(2)(A) which is not oth13 erwise referred to in this paragraph; 

14 ‘‘(C) the National Credit Union Adminis15 tration Board for credit unions; and 

16 ‘‘(D) the Secretary of Housing and Urban 

17 Development for other lending institutions not 

18 regulated by the agencies referred to in sub19 paragraphs (A) through (C).’’; and 

20 (F) by adding at the end the following: 

21 ‘‘(n) TIMING OF CERTAIN DISCLOSURES.—The data 

22 required to be disclosed under subsection (b) shall be sub23 mitted to the Bureau or to the appropriate agency for any 

24 institution reporting under this title, in accordance with 

25 regulations prescribed by the Bureau. Institutions shall 


sroberts on DSKH9S0YB1PROD with BILLS
1494 

•S 3217 AMDT 3739 

1 not be required to report new data under paragraph (5) 

2 or (6) of subsection (b) before the first January 1 that 

3 occurs after the end of the 9-month period beginning on 

4 the date on which regulations are issued by the Bureau 

5 in final form with respect to such disclosures.’’; 

6 (4) in section 305 (12 U.S.C. 2804)— 

7 (A) by striking subsection (b) and insert8 ing the following: 

9 ‘‘(b) POWERS OF CERTAIN OTHER AGENCIES.— 

10 ‘‘(1) IN GENERAL.—Except as otherwise pro11 vided by subtitle B of the Consumer Financial Pro12 tection Act of 2010, compliance with the require13 ments of this title shall be enforced— 

14 ‘‘(A) under section 8 of the Federal De15 posit Insurance Act, in the case of— 

16 ‘‘(i) any national bank, and any Fed17 eral branch or Federal agency of a foreign 

18 bank, by the Office of the Comptroller of 

19 the Currency; 

20 ‘‘(ii) any member bank of the Federal 

21 Reserve System (other than a national 

22 bank), branch or agency of a foreign bank 

23 (other than a Federal branch, Federal 

24 agency, and insured State branch of a for25 eign bank), commercial lending company 


sroberts on DSKH9S0YB1PROD with BILLS
1495 

•S 3217 AMDT 3739 

1 owned or controlled by a foreign bank, and 

2 any organization operating under section 

3 25 or 25(a) of the Federal Reserve Act, by 

4 the Board; and 

5 ‘‘(iii) any bank insured by the Federal 

6 Deposit Insurance Corporation (other than 

7 a member of the Federal Reserve System), 

8 any mutual savings bank as, defined in 

9 section 3(f) of the Federal Deposit Insur10 ance Act (12 U.S.C. 1813(f)), any insured 

11 State branch of a foreign bank, and any 

12 other depository institution not referred to 

13 in this paragraph or subparagraph (B) or 

14 (C), by the Federal Deposit Insurance Cor15 poration; 

16 ‘‘(B) under subtitle E of the Consumer Fi17 nancial Protection Act of 2010, by the Bureau; 

18 ‘‘(C) under the Federal Credit Union Act, 

19 by the Administrator of the National Credit 

20 Union Administration with respect to any in21 sured credit union; and 

22 ‘‘(D) with respect to other lending institu23 tions, by the Secretary of Housing and Urban 

24 Development. 


sroberts on DSKH9S0YB1PROD with BILLS
1496 

•S 3217 AMDT 3739 

1 ‘‘(2) INCORPORATED DEFINITIONS.—The terms 

2 used in paragraph (1) that are not defined in this 

3 title or otherwise defined in section 3(s) of the Fed4 eral Deposit Insurance Act (12 U.S.C. 1813(s)) 

5 shall have the same meanings as in section 1(b) of 

6 the International Banking Act of 1978 (12 U.S.C. 

7 3101).’’; and 

8 (B) by adding at the end the following: 

9 ‘‘(d) OVERALL ENFORCEMENT AUTHORITY OF THE

10 BUREAU OF CONSUMER FINANCIAL PROTECTION.—Sub11 ject to subtitle B of the Consumer Financial Protection 

12 Act of 2010, enforcement of the requirements imposed 

13 under this title is committed to each of the agencies under 

14 subsection (b). The Bureau may exercise its authorities 

15 under the Consumer Financial Protection Act of 2010 to 

16 exercise principal authority to examine and enforce com17 pliance by any person with the requirements of this title.’’; 

18 (5) in section 306 (12 U.S.C. 2805(b)), by 

19 striking subsection (b) and inserting the following: 

20 ‘‘(b) EXEMPTION AUTHORITY.—The Bureau may, by 

21 regulation, exempt from the requirements of this title any 

22 State-chartered depository institution within any State or 

23 subdivision thereof, if the agency determines that, under 

24 the law of such State or subdivision, that institution is 

25 subject to requirements that are substantially similar to 


sroberts on DSKH9S0YB1PROD with BILLS
1497 

•S 3217 AMDT 3739 

1 those imposed under this title, and that such law contains 

2 adequate provisions for enforcement. Notwithstanding any 

3 other provision of this subsection, compliance with the re4 quirements imposed under this subsection shall be en5 forced by the Office of the Comptroller of the Currency 

6 under section 8 of the Federal Deposit Insurance Act, in 

7 the case of national banks and savings associations, the 

8 deposits of which are insured by the Federal Deposit In9 surance Corporation.’’; and 

10 (6) by striking section 307 (12 U.S.C. 2806) 

11 and inserting the following: 

12 ‘‘SEC. 307. COMPLIANCE IMPROVEMENT METHODS. 

13 ‘‘(a) IN GENERAL.— 

14 ‘‘(1) CONSULTATION REQUIRED.—The Director 

15 of the Bureau of Consumer Financial Protection, 

16 with the assistance of the Secretary, the Director of 

17 the Bureau of the Census, the Board of Governors 

18 of the Federal Reserve System, the Federal Deposit 

19 Insurance Corporation, and such other persons as 

20 the Bureau deems appropriate, shall develop or as21 sist in the improvement of, methods of matching ad22 dresses and census tracts to facilitate compliance by 

23 depository institutions in as economical a manner as 

24 possible with the requirements of this title. 


sroberts on DSKH9S0YB1PROD with BILLS
1498 

•S 3217 AMDT 3739 

1 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

2 There are authorized to be appropriated, such sums 

3 as may be necessary to carry out this subsection. 

4 ‘‘(3) CONTRACTING AUTHORITY.—The Director 

5 of the Bureau of Consumer Financial Protection is 

6 authorized to utilize, contract with, act through, or 

7 compensate any person or agency in order to carry 

8 out this subsection. 

9 ‘‘(b) RECOMMENDATIONS TO CONGRESS.—The Di10 rector of the Bureau of Consumer Financial Protection 

11 shall recommend to the Committee on Banking, Housing, 

12 and Urban Affairs of the Senate and the Committee on 

13 Financial Services of the House of Representatives, such 

14 additional legislation as the Director of the Bureau of 

15 Consumer Financial Protection deems appropriate to 

16 carry out the purpose of this title.’’. 

17 SEC. 1093. AMENDMENTS TO THE HOMEOWNERS PROTEC18 TION ACT OF 1998. 

19 Section 10 of the Homeowners Protection Act of 

20 1998 (12 U.S.C. 4909) is amended— 

21 (1) in subsection (a)— 

22 (A) by striking ‘‘Compliance’’ and insert23 ing ‘‘Except as otherwise provided by subtitle B 

24 of the Consumer Financial Protection Act of 

25 2010, compliance’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1499 

•S 3217 AMDT 3739 

1 (B) in paragraph (2), by striking ‘‘and’’ at 

2 the end; 

3 (C) in paragraph (3), by striking the pe4 riod at the end and inserting ‘‘; and’’; and 

5 (D) by adding at the end the following: 

6 ‘‘(4) subtitle E of the Consumer Financial Pro7 tection Act of 2010, by the Bureau of Consumer Fi8 nancial Protection.’’; and 

9 (2) in subsection (b)(2), by inserting before the 

10 period at the end the following: ‘‘, subject to subtitle 

11 B of the Consumer Financial Protection Act of 

12 2010’’. 

13 SEC. 1094. AMENDMENTS TO THE HOME OWNERSHIP AND 

14 EQUITY PROTECTION ACT OF 1994. 

15 The Home Ownership and Equity Protection Act of 

16 1994 (15 U.S.C. 1601 note) is amended— 

17 (1) in section 158(a), by striking ‘‘Consumer 

18 Advisory Council of the Board’’ and inserting ‘‘Advi19 sory Board to the Bureau’’; and 

20 (2) by striking ‘‘Board’’ each place that term 

21 appears and inserting ‘‘Bureau’’. 

22 SEC. 1095. AMENDMENTS TO THE OMNIBUS APPROPRIA23 TIONS ACT, 2009. 

24 Section 626 of the Omnibus Appropriations Act, 

25 2009 (15 U.S.C. 1638 note) is amended— 


sroberts on DSKH9S0YB1PROD with BILLS
1500 

•S 3217 AMDT 3739 

1 (1) by striking subsection (a) and inserting the 

2 following: 

3 ‘‘(a)(1) The Bureau of Consumer Financial Protec4 tion shall have authority to prescribe rules with respect 

5 to mortgage loans in accordance with section 553 of title 

6 5, United States Code. Such rulemaking shall relate to 

7 unfair or deceptive acts or practices regarding mortgage 

8 loans, which may include unfair or deceptive acts or prac9 tices involving loan modification and foreclosure rescue 

10 services. Any violation of a rule prescribed under this 

11 paragraph shall be treated as a violation of a rule prohib12 iting unfair, deceptive, or abusive acts or practices under 

13 the Consumer Financial Protection Act of 2010 and a vio14 lation of a rule under section 18 of the Federal Trade 

15 Commission Act (15 U.S.C. 57a) regarding unfair or de16 ceptive acts or practices. 

17 ‘‘(2) The Bureau of Consumer Financial Protection 

18 shall enforce the rules issued under paragraph (1) in the 

19 same manner, by the same means, and with the same ju20 risdiction, powers, and duties, as though all applicable 

21 terms and provisions of the Consumer Financial Protec22 tion Act of 2010 were incorporated into and made part 

23 of this subsection.’’; and 

24 (2) in subsection (b)— 


sroberts on DSKH9S0YB1PROD with BILLS
1501 

•S 3217 AMDT 3739 

1 (A) by striking paragraph (1) and insert2 ing the following: 

3 ‘‘(1) Except as provided in paragraph (6), in 

4 any case in which the attorney general of a State 

5 has reason to believe that an interest of the resi6 dents of the State has been or is threatened or ad7 versely affected by the engagement of any person 

8 subject to a rule prescribed under subsection (a) in 

9 practices that violate such rule, the State, as parens 

10 patriae, may bring a civil action on behalf of its resi11 dents in an appropriate district court of the United 

12 States or other court of competent jurisdiction— 

13 ‘‘(A) to enjoin that practice; 

14 ‘‘(B) to enforce compliance with the rule; 

15 ‘‘(C) to obtain damages, restitution, or 

16 other compensation on behalf of the residents of 

17 the State; or 

18 ‘‘(D) to obtain penalties and relief provided 

19 under the Consumer Financial Protection Act 

20 of 2010, the Federal Trade Commission Act, 

21 and such other relief as the court deems appro22 priate.’’; 

23 (B) in paragraphs (2) and (3), by striking 

24 ‘‘the primary Federal regulator’’ each time the 

25 term appears and inserting ‘‘the Bureau of 


sroberts on DSKH9S0YB1PROD with BILLS
1502 

•S 3217 AMDT 3739 

1 Consumer Financial Protection or the Commis2 sion, as appropriate’’; 

3 (C) in paragraph (3), by inserting ‘‘and 

4 subject to subtitle B of the Consumer Financial 

5 Protection Act of 2010,’’ after ‘‘paragraph 

6 (2),’’; and 

7 (D) in paragraph (6), by striking ‘‘the pri8 mary Federal regulator’’ each place that term 

9 appears and inserting ‘‘the Bureau of Con10 sumer Financial Protection or the Commis11 sion’’. 

12 SEC. 1096. AMENDMENTS TO THE REAL ESTATE SETTLE13 MENT PROCEDURES ACT. 

14 The Real Estate Settlement Procedures Act of 1974 

15 (12 U.S.C. 2601 et seq.) is amended— 

16 (1) in section 3 (12 U.S.C. 2602)— 

17 (A) in paragraph (7), by striking ‘‘and’’ at 

18 the end; 

19 (B) in paragraph (8), by striking the pe20 riod at the end and inserting ‘‘; and’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(9) the term ‘Bureau’ means the Bureau of 

23 Consumer Financial Protection.’’; 

24 (2) in section 4 (12 U.S.C. 2603)— 


sroberts on DSKH9S0YB1PROD with BILLS
1503 

•S 3217 AMDT 3739 

1 (A) in subsection (a), by striking the first 

2 sentence and inserting the following: ‘‘The Bu3 reau shall publish a single, integrated disclosure 

4 for mortgage loan transactions (including real 

5 estate settlement cost statements) which in6 cludes the disclosure requirements of this title, 

7 in conjunction with the disclosure requirements 

8 of the Truth in Lending Act that, taken to9 gether, may apply to a transaction that is sub10 ject to both or either provisions of law. The 

11 purpose of such model disclosure shall be to fa12 cilitate compliance with the disclosure require13 ments of this title and the Truth in Lending 

14 Act, and to aid the borrower or lessee in under15 standing the transaction by utilizing readily un16 derstandable language to simplify the technical 

17 nature of the disclosures.’’; 

18 (B) by striking ‘‘Secretary’’ each place 

19 that term appears and inserting ‘‘Bureau’’; and 

20 (C) by striking ‘‘form’’ each place that 

21 term appears and inserting ‘‘forms’’; 

22 (3) in section 5 (12 U.S.C. 2604)— 

23 (A) by striking ‘‘Secretary’’ each place that 

24 term appears and inserting ‘‘Bureau’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1504 

•S 3217 AMDT 3739 

1 (B) in subsection (a), by striking the first 

2 sentence and inserting the following: ‘‘The Bu3 reau shall prepare and distribute booklets joint4 ly addressing compliance with the requirements 

5 of the Truth in Lending Act and the provisions 

6 of this title, in order to help persons borrowing 

7 money to finance the purchase of residential 

8 real estate better to understand the nature and 

9 costs of real estate settlement services.’’; 

10 (4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))— 

11 (A) by striking ‘‘Secretary’’ and inserting 

12 ‘‘Bureau’’; and 

13 (B) by striking ‘‘, by regulations that shall 

14 take effect not later than April 20, 1991,’’; 

15 (5) in section 7(b) (12 U.S.C. 2606(b)) by 

16 striking ‘‘Secretary’’ and inserting ‘‘Bureau’’; 

17 (6) in section 8(d) (12 U.S.C. 2607(d))— 

18 (A) in the subsection heading, by inserting 

19 ‘‘BUREAU AND’’ before ‘‘SECRETARY’’; and 

20 (B) by striking paragraph (4), and insert21 ing the following: 

22 ‘‘(4) The Bureau, the Secretary, or the attorney 

23 general or the insurance commissioner of any State 

24 may bring an action to enjoin violations of this sec25 tion. Except, to the extent that a person is subject 


sroberts on DSKH9S0YB1PROD with BILLS
1505 

•S 3217 AMDT 3739 

1 to the jurisdiction of the Bureau, the Secretary, or 

2 the attorney general or the insurance commissioner 

3 of any State, the Bureau shall have primary author4 ity to enforce or administer this section, subject to 

5 subtitle B of the Consumer Financial Protection Act 

6 of 2010.’’. 

7 (7) in section 10(c) (12 U.S.C. 2609(c) and 

8 (d)), by striking ‘‘Secretary’’ and inserting ‘‘Bu9 reau’’; 

10 (8) in section 16 (12 U.S.C. 2614), by inserting 

11 ‘‘the Bureau,’’ before ‘‘the Secretary’’; 

12 (9) in section 18 (12 U.S.C. 2616), by striking 

13 ‘‘Secretary’’ each place that term appears and in14 serting ‘‘Bureau’’; and 

15 (10) in section 19 (12 U.S.C. 2617)— 

16 (A) in the section heading by striking 

17 ‘‘SECRETARY’’ and inserting ‘‘BUREAU’’; 

18 (B) by striking ‘‘Secretary’’ each place 

19 that term appears and inserting ‘‘Bureau’’; 

20 (C) in subsection (b), by inserting ‘‘the 

21 Bureau’’ before ‘‘the Secretary’’; and 

22 (D) in subsection (c), by inserting ‘‘or the 

23 Bureau’’ after ‘‘the Secretary’’ each time that 

24 term appears. 


sroberts on DSKH9S0YB1PROD with BILLS
1506 

•S 3217 AMDT 3739 

1 SEC. 1097. AMENDMENTS TO THE RIGHT TO FINANCIAL 

2 PRIVACY ACT OF 1978. 

3 The Right to Financial Privacy Act of 1978 (12 

4 U.S.C. 3401 et seq.) is amended— 

5 (1) in section 1101— 

6 (A) in paragraph (6)— 

7 (i) in subparagraph (A), by inserting 

8 ‘‘and’’ after the semicolon; 

9 (ii) in subparagraph (B), by striking 

10 ‘‘and’’ at the end; and 

11 (iii) by striking subparagraph (C); 

12 and 

13 (B) in paragraph (7), by striking subpara14 graph (E), and inserting the following: 

15 ‘‘(E) the Bureau of Consumer Financial 

16 Protection;’’; 

17 (2) in section 1112(e) (12 U.S.C. 3412(e)), by 

18 striking ‘‘and the Commodity Futures Trading Com19 mission is permitted’’ and inserting ‘‘the Commodity 

20 Futures Trading Commission, and the Bureau of 

21 Consumer Financial Protection is permitted’’; and 

22 (3) in section 1113 (12 U.S.C. 3413), by add23 ing at the end the following new subsection: 

24 ‘‘(r) DISCLOSURE TO THE BUREAU OF CONSUMER

25 FINANCIAL PROTECTION.—Nothing in this title shall 

26 apply to the examination by or disclosure to the Bureau 


sroberts on DSKH9S0YB1PROD with BILLS
1507 

•S 3217 AMDT 3739 

1 of Consumer Financial Protection of financial records or 

2 information in the exercise of its authority with respect 

3 to a financial institution.’’. 

4 SEC. 1098. AMENDMENTS TO THE SECURE AND FAIR EN5 FORCEMENT FOR MORTGAGE LICENSING ACT 

6 OF 2008. 

7 The S.A.F.E. Mortgage Licensing Act of 2008 (12 

8 U.S.C. 5101 et seq.) is amended— 

9 (1) by striking ‘‘a Federal banking agency’’ 

10 each place that term appears, other than in para11 graphs (7) and (11) of section 1503 and section 

12 1507(a)(1), and inserting ‘‘the Bureau’’; 

13 (2) by striking ‘‘Federal banking agencies’’ 

14 each place that term appears and inserting ‘‘Bu15 reau’’; and 

16 (3) by striking ‘‘Secretary’’ each place that 

17 term appears and inserting ‘‘Director’’; 

18 (4) in section 1503 (12 U.S.C. 5102)— 

19 (A) by redesignating paragraphs (2) 

20 through (12) as (3) through (13), respectively; 

21 (B) by striking paragraph (1) and insert22 ing the following: 

23 ‘‘(1) BUREAU.—The term ‘Bureau’ means the 

24 Bureau of Consumer Financial Protection. 


sroberts on DSKH9S0YB1PROD with BILLS
1508 

•S 3217 AMDT 3739 

1 ‘‘(2) FEDERAL BANKING AGENCY.—The term 

2 ‘Federal banking agency’ means the Board of Gov3 ernors of the Federal Reserve System, the Office of 

4 the Comptroller of the Currency, the National Credit 

5 Union Administration, and the Federal Deposit In6 surance Corporation.’’; and 

7 (C) by striking paragraph (10), as so des8 ignated by this section, and inserting the fol9 lowing: 

10 ‘‘(10) DIRECTOR.—The term ‘Director’ means 

11 the Director of the Bureau of Consumer Financial 

12 Protection.’’; and 

13 (5) in section 1507 (12 U.S.C. 5106)— 

14 (A) in subsection (a)— 

15 (i) by striking paragraph (1) and in16 serting the following: 

17 ‘‘(1) IN GENERAL.—The Bureau shall develop 

18 and maintain a system for registering employees of 

19 a depository institution, employees of a subsidiary 

20 that is owned and controlled by a depository institu21 tion and regulated by a Federal banking agency, or 

22 employees of an institution regulated by the Farm 

23 Credit Administration, as registered loan originators 

24 with the Nationwide Mortgage Licensing System and 

25 Registry. The system shall be implemented before 


sroberts on DSKH9S0YB1PROD with BILLS
1509 

•S 3217 AMDT 3739 

1 the end of the 1-year period beginning on the date 

2 of enactment of the Consumer Financial Protection 

3 Act of 2010.’’; and 

4 (ii) in paragraph (2)— 

5 (I) by striking ‘‘appropriate Fed6 eral banking agency and the Farm 

7 Credit Administration’’ and inserting 

8 ‘‘Bureau’’; and 

9 (II) by striking ‘‘employees’s 

10 identity’’ and inserting ‘‘identity of 

11 the employee’’; and 

12 (B) in subsection (b), by striking ‘‘through 

13 the Financial Institutions Examination Council, 

14 and the Farm Credit Administration’’, and in15 serting ‘‘and the Bureau of Consumer Financial 

16 Protection’’; 

17 (6) in section 1508 (12 U.S.C. 5107)— 

18 (A) by striking the section heading and in19 serting the following: ‘‘SEC. 1508. BUREAU OF

20 CONSUMER FINANCIAL PROTECTION

21 BACKUP AUTHORITY TO ESTABLISH LOAN

22 ORIGINATOR LICENSING SYSTEM.’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(f) REGULATION AUTHORITY.— 


sroberts on DSKH9S0YB1PROD with BILLS
1510 

•S 3217 AMDT 3739 

1 ‘‘(1) IN GENERAL.—The Bureau is authorized 

2 to promulgate regulations setting minimum net 

3 worth or surety bond requirements for residential 

4 mortgage loan originators and minimum require5 ments for recovery funds paid into by loan origina6 tors. 

7 ‘‘(2) CONSIDERATIONS.—In issuing regulations 

8 under paragraph (1), the Bureau shall take into ac9 count the need to provide originators adequate in10 centives to originate affordable and sustainable 

11 mortgage loans, as well as the need to ensure a com12 petitive origination market that maximizes consumer 

13 access to affordable and sustainable mortgage 

14 loans.’’; 

15 (7) by striking section 1510 (12 U.S.C. 5109) 

16 and inserting the following: 

17 ‘‘SEC. 1510. FEES. 

18 ‘‘The Bureau, the Farm Credit Administration, and 

19 the Nationwide Mortgage Licensing System and Registry 

20 may charge reasonable fees to cover the costs of maintain21 ing and providing access to information from the Nation22 wide Mortgage Licensing System and Registry, to the ex23 tent that such fees are not charged to consumers for ac24 cess to such system and registry.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1511 

•S 3217 AMDT 3739 

1 (8) by striking section 1513 (12 U.S.C. 5112) 

2 and inserting the following: 

3 ‘‘SEC. 1513. LIABILITY PROVISIONS. 

4 ‘‘The Bureau, any State official or agency, or any or5 ganization serving as the administrator of the Nationwide 

6 Mortgage Licensing System and Registry or a system es7 tablished by the Director under section 1509, or any offi8 cer or employee of any such entity, shall not be subject 

9 to any civil action or proceeding for monetary damages 

10 by reason of the good faith action or omission of any offi11 cer or employee of any such entity, while acting within 

12 the scope of office or employment, relating to the collec13 tion, furnishing, or dissemination of information con14 cerning persons who are loan originators or are applying 

15 for licensing or registration as loan originators.’’; and 

16 (9) in section 1514 (12 U.S.C. 5113) in the 

17 section heading, by striking ‘‘UNDER HUD BACKUP

18 LICENSING SYSTEM’’ and inserting ‘‘BY THE BU19 REAU’’. 

20 SEC. 1099. AMENDMENTS TO THE TRUTH IN LENDING ACT. 

21 The Truth in Lending Act (15 U.S.C. 1601 et seq.) 

22 is amended— 

23 (1) in section 103 (5 U.S.C. 1602)— 


sroberts on DSKH9S0YB1PROD with BILLS
1512 

•S 3217 AMDT 3739 

1 (A) by redesignating subsections (b) 

2 through (bb) as subsections (c) through (cc), 

3 respectively; and 

4 (B) by inserting after subsection (a) the 

5 following: 

6 ‘‘(b) BUREAU.—The term ‘Bureau’ means the Bu7 reau of Consumer Financial Protection.’’; 

8 (2) by striking ‘‘Board’’ each place that term 

9 appears, other than in section 140(d) and section 

10 108(a), as amended by this section, and inserting 

11 ‘‘Bureau’’; 

12 (3) by striking ‘‘Federal Trade Commission’’ 

13 each place that term appears, other than in section 

14 108(c) and section 129(m), as amended by this Act, 

15 and other than in the context of a reference to the 

16 Federal Trade Commission Act, and inserting ‘‘Bu17 reau’’; 

18 (4) in section 105(a) (15 U.S.C. 1604(a)), in 

19 the second sentence— 

20 (A) by striking ‘‘Except in the case of a 

21 mortgage referred to in section 103(aa), these 

22 regulations may contain such’’ and inserting 

23 ‘‘Except with respect to the provisions of sec24 tion 129 that apply to a mortgage referred to 


sroberts on DSKH9S0YB1PROD with BILLS
1513 

•S 3217 AMDT 3739 

1 in section 103(aa), such regulations may con2 tain such additional requirements,’’; and 

3 (B) by inserting ‘‘all or’’ after ‘‘exceptions 

4 for’’; 

5 (5) in section 105(b) (15 U.S.C. 1604(b)), by 

6 striking the first sentence and inserting the fol7 lowing: ‘‘The Bureau shall publish a single, inte8 grated disclosure for mortgage loan transactions (in9 cluding real estate settlement cost statements) which 

10 includes the disclosure requirements of this title in 

11 conjunction with the disclosure requirements of the 

12 Real Estate Settlement Procedures Act of 1974 

13 that, taken together, may apply to a transaction that 

14 is subject to both or either provisions of law. The 

15 purpose of such model disclosure shall be to facili16 tate compliance with the disclosure requirements of 

17 this title and the Real Estate Settlement Procedures 

18 Act of 1974, and to aid the borrower or lessee in un19 derstanding the transaction by utilizing readily un20 derstandable language to simplify the technical na21 ture of the disclosures.’’; 

22 (6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), 

23 by inserting ‘‘all or’’ after ‘‘from all or part of this 

24 title’’; 

25 (7) in section 108 (15 U.S.C. 1607)— 


sroberts on DSKH9S0YB1PROD with BILLS
1514 

•S 3217 AMDT 3739 

1 (A) by striking subsection (a) and insert2 ing the following: 

3 ‘‘(a) ENFORCING AGENCIES.—Except as otherwise 

4 provided in subtitle B of the Consumer Financial Protec5 tion Act of 2010, compliance with the requirements im6 posed under this title shall be enforced under— 

7 ‘‘(1) section 8 of the Federal Deposit Insurance 

8 Act, in the case of— 

9 ‘‘(A) any national bank, and Federal 

10 branch or Federal agency of a foreign bank, by 

11 the Office of the Comptroller of the Currency; 

12 ‘‘(B) any member bank of the Federal Re13 serve System (other than a national bank), any 

14 branch or agency of a foreign bank (other than 

15 a Federal branch, Federal agency, or insured 

16 State branch of a foreign bank), any commer17 cial lending company owned or controlled by a 

18 foreign bank, and organizations operating 

19 under section 25 or 25(a) of the Federal Re20 serve Act, by the Board; and 

21 ‘‘(C) any bank insured by the Federal De22 posit Insurance Corporation (other than a 

23 member of the Federal Reserve System) and an 

24 insured State branch of a foreign bank, by the 


sroberts on DSKH9S0YB1PROD with BILLS
1515 

•S 3217 AMDT 3739 

1 Board of Directors of the Federal Deposit In2 surance Corporation; 

3 ‘‘(2) subtitle E of the Consumer Financial Pro4 tection Act of 2010, by the Bureau; 

5 ‘‘(3) the Federal Credit Union Act, by the Di6 rector of the National Credit Union Administration, 

7 with respect to any Federal credit union; 

8 ‘‘(4) the Federal Aviation Act of 1958, by the 

9 Secretary of Transportation, with respect to any air 

10 carrier or foreign air carrier subject to that Act; 

11 ‘‘(5) the Packers and Stockyards Act, 1921 (ex12 cept as provided in section 406 of that Act), by the 

13 Secretary of Agriculture, with respect to any activi14 ties subject to that Act; and 

15 ‘‘(6) the Farm Credit Act of 1971, by the Farm 

16 Credit Administration with respect to any Federal 

17 land bank, Federal land bank association, Federal 

18 intermediate credit bank, or production credit asso19 ciation.’’; and 

20 (B) by striking subsection (c) and insert21 ing the following: 

22 ‘‘(c) OVERALL ENFORCEMENT AUTHORITY OF THE

23 FEDERAL TRADE COMMISSION.—Except to the extent 

24 that enforcement of the requirements imposed under this 

25 title is specifically committed to some other Government 


sroberts on DSKH9S0YB1PROD with BILLS
1516 

•S 3217 AMDT 3739 

1 agency under subsection (a), and subject to subtitle B of 

2 the Consumer Financial Protection Act of 2010, the Fed3 eral Trade Commission shall enforce such requirements. 

4 For the purpose of the exercise by the Federal Trade 

5 Commission of its functions and powers under the Federal 

6 Trade Commission Act, a violation of any requirement im7 posed under this title shall be deemed a violation of a re8 quirement imposed under that Act. All of the functions 

9 and powers of the Federal Trade Commission under the 

10 Federal Trade Commission Act are available to the Fed11 eral Trade Commission to enforce compliance by any per12 son with the requirements under this title, irrespective of 

13 whether that person is engaged in commerce or meets any 

14 other jurisdictional tests under the Federal Trade Com15 mission Act.’’; 

16 (8) in section 129 (15 U.S.C. 1639), by striking 

17 subsection (m) and inserting the following: 

18 ‘‘(m) CIVIL PENALTIES IN FEDERAL TRADE COM19 MISSION ENFORCEMENT ACTIONS.—For purposes of en20 forcement by the Federal Trade Commission, any violation 

21 of a regulation issued by the Bureau pursuant to sub22 section (l)(2) shall be treated as a violation of a rule pro23 mulgated under section 18 of the Federal Trade Commis24 sion Act (15 U.S.C. 57a) regarding unfair or deceptive 

25 acts or practices.’’; and 


sroberts on DSKH9S0YB1PROD with BILLS
1517 

•S 3217 AMDT 3739 

1 (9) in chapter 5 (15 U.S.C. 1667 et seq.)— 

2 (A) by striking ‘‘the Board’’ each place 

3 that term appears and inserting ‘‘the Bureau’’; 

4 and 

5 (B) by striking ‘‘The Board’’ each place 

6 that term appears and inserting ‘‘The Bureau’’. 

7 SEC. 1100. AMENDMENTS TO THE TRUTH IN SAVINGS ACT. 

8 The Truth in Savings Act (12 U.S.C. 4301 et seq.) 

9 is amended— 

10 (1) by striking ‘‘Board’’ each place that term 

11 appears and inserting ‘‘Bureau’’; 

12 (2) in section 270(a) (12 U.S.C. 4309)— 

13 (A) by striking ‘‘Compliance’’ and insert14 ing ‘‘Except as otherwise provided in subtitle B 

15 of the Consumer Financial Protection Act of 

16 2010, compliance’’; 

17 (B) in paragraph (1)— 

18 (i) in subparagraph (B), by striking 

19 ‘‘and’’ at the end; and 

20 (ii) by striking subparagraph (C); 

21 (C) in paragraph (2), by striking the pe22 riod at the end and inserting ‘‘; and’’; and 

23 (D) by adding at the end the following: 

24 ‘‘(3) subtitle E of the Consumer Financial Pro25 tection Act of 2010, by the Bureau.’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1518 

•S 3217 AMDT 3739 

1 (3) in section 272(b) (12 U.S.C. 4311(b)), by 

2 striking ‘‘regulation prescribed by the Board’’ each 

3 place that term appears and inserting ‘‘regulation 

4 prescribed by the Bureau’’; and 

5 (4) in section 274 (12 U.S.C. 4313), by striking 

6 paragraph (4) and inserting the following: 

7 ‘‘(4) BUREAU.—The term ‘Bureau’ means the 

8 Bureau of Consumer Financial Protection.’’. 

9 SEC. 1101. AMENDMENTS TO THE TELEMARKETING AND 

10 CONSUMER FRAUD AND ABUSE PREVENTION 

11 ACT. 

12 (a) AMENDMENTS TO SECTION 3.—Section 3 of the 

13 Telemarketing and Consumer Fraud and Abuse Preven14 tion Act (15 U.S.C. 6102) is amended by striking sub15 sections (b) and (c) and inserting the following: 

16 ‘‘(b) RULEMAKING AUTHORITY.—The Commission 

17 shall have authority to prescribe rules under subsection 

18 (a), in accordance with section 553 of title 5, United 

19 States Code. In prescribing a rule under this section that 

20 relates to the provision of a consumer financial product 

21 or service that is subject to the Consumer Financial Pro22 tection Act of 2010, including any enumerated consumer 

23 law thereunder, the Commission shall consult with the Bu24 reau of Consumer Financial Protection regarding the con25 sistency of a proposed rule with standards, purposes, or 


sroberts on DSKH9S0YB1PROD with BILLS
1519 

•S 3217 AMDT 3739 

1 objectives administered by the Bureau of Consumer Fi2 nancial Protection. 

3 ‘‘(c) VIOLATIONS.—Any violation of any rule pre4 scribed under subsection (a)— 

5 ‘‘(1) shall be treated as a violation of a rule 

6 under section 18 of the Federal Trade Commission 

7 Act regarding unfair or deceptive acts or practices; 

8 and 

9 ‘‘(2) that is committed by a person subject to 

10 the Consumer Financial Protection Act of 2010 

11 shall be treated as a violation of a rule under section 

12 1031 of that Act regarding unfair, deceptive, or abu13 sive acts or practices.’’. 

14 (b) AMENDMENTS TO SECTION 4.—Section 4(d) of 

15 the Telemarketing and Consumer Fraud and Abuse Pre16 vention Act (15 U.S.C. 6103(d)) is amended by inserting 

17 after ‘‘Commission’’ each place that term appears the fol18 lowing: ‘‘or the Bureau of Consumer Financial Protec19 tion’’. 

20 (c) AMENDMENTS TO SECTION 5.—Section 5(c) of 

21 the Telemarketing and Consumer Fraud and Abuse Pre22 vention Act (15 U.S.C. 6104(c)) is amended by inserting 

23 after ‘‘Commission’’ each place that term appears the fol24 lowing: ‘‘or the Bureau of Consumer Financial Protec25 tion’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1520 

•S 3217 AMDT 3739 

1 (d) AMENDMENT TO SECTION 6.—Section 6 of the 

2 Telemarketing and Consumer Fraud and Abuse Preven3 tion Act (15 U.S.C. 6105) is amended by adding at the 

4 end the following: 

5 ‘‘(d) ENFORCEMENT BY BUREAU OF CONSUMER FI6 NANCIAL PROTECTION.—Except as otherwise provided in 

7 sections 3(d), 3(e), 4, and 5, and subject to subtitle B 

8 of the Consumer Financial Protection Act of 2010, this 

9 Act shall be enforced by the Bureau of Consumer Finan10 cial Protection under subtitle E of the Consumer Finan11 cial Protection Act of 2010.’’. 

12 SEC. 1102. AMENDMENTS TO THE PAPERWORK REDUCTION 

13 ACT. 

14 (a) DESIGNATION AS AN INDEPENDENT AGENCY.— 

15 Section 2(5) of the Paperwork Reduction Act (44 U.S.C. 

16 3502(5)) is amended by inserting ‘‘the Bureau of Con17 sumer Financial Protection, the Office of Financial Re18 search,’’ after ‘‘the Securities and Exchange Commis19 sion,’’. 

20 (b) COMPARABLE TREATMENT.—Section 3513 of 

21 title 44, United States Code, is amended by adding at the 

22 end the following: 

23 ‘‘(c) COMPARABLE TREATMENT.—Notwithstanding 

24 any other provision of law, the Director shall treat or re25 view a rule or order prescribed or proposed by the Director 


sroberts on DSKH9S0YB1PROD with BILLS
1521 

•S 3217 AMDT 3739 

1 of the Bureau of Consumer Financial Protection on the 

2 same terms and conditions as apply to any rule or order 

3 prescribed or proposed by the Board of Governors of the 

4 Federal Reserve System.’’. 

5 SEC. 1103. ADJUSTMENTS FOR INFLATION IN THE TRUTH 

6 IN LENDING ACT. 

7 (a) CAPS.— 

8 (1) CREDIT TRANSACTIONS.—Section 104(3) of 

9 the Truth in Lending Act (15 U.S.C. 1603(3)) is 

10 amended by striking ‘‘$25,000’’ and inserting 

11 ‘‘$50,000’’. 

12 (2) CONSUMER LEASES.—Section 181(1) of the 

13 Truth in Lending Act (15 U.S.C. 1667(1)) is 

14 amended by striking ‘‘$25,000’’ and inserting 

15 ‘‘$50,000’’. 

16 (b) ADJUSTMENTS FOR INFLATION.—On and after 

17 December 31, 2011, the Bureau may adjust annually the 

18 dollar amounts described in sections 104(3) and 181(1) 

19 of the Truth in Lending Act (as amended by this section), 

20 by the annual percentage increase in the Consumer Price 

21 Index for Urban Wage Earners and Clerical Workers, as 

22 published by the Bureau of Labor Statistics, rounded to 

23 the nearest multiple of $100, or $1,000, as applicable. 


sroberts on DSKH9S0YB1PROD with BILLS
1522 

•S 3217 AMDT 3739 

1 SEC. 1104. EFFECTIVE DATE. 

2 Except as otherwise provided in this subtitle and the 

3 amendments made by this subtitle, this subtitle and the 

4 amendments made by this subtitle, other than sections 

5 1081 and 1082, shall become effective on the designated 

6 transfer date. 

7 TITLE XI—FEDERAL RESERVE 

8 SYSTEM PROVISIONS 

9 SEC. 1151. FEDERAL RESERVE ACT AMENDMENTS ON 

10 EMERGENCY LENDING AUTHORITY. 

11 The third undesignated paragraph of section 13 of 

12 the Federal Reserve Act (12 U.S.C. 343) (relating to 

13 emergency lending authority) is amended— 

14 (1) by inserting ‘‘(3)(A)’’ before ‘‘In unusual’’; 

15 (2) by striking ‘‘individual, partnership, or cor16 poration’’ the first place that term appears and in17 serting the following: ‘‘participant in any program or 

18 facility with broad-based eligibility’’; 

19 (3) by striking ‘‘exchange for an individual or 

20 a partnership or corporation’’ and inserting ‘‘ex21 change,’’; 

22 (4) by striking ‘‘such individual, partnership, or 

23 corporation’’ and inserting the following: ‘‘such par24 ticipant in any program or facility with broad-based 

25 eligibility’’; 


sroberts on DSKH9S0YB1PROD with BILLS
1523 

•S 3217 AMDT 3739 

1 (5) by striking ‘‘for individuals, partnerships, 

2 corporations’’ and inserting ‘‘for any participant in 

3 any program or facility with broad-based eligibility’’; 

4 (6) by striking ‘‘may prescribe.’’ and inserting 

5 the following: ‘‘may prescribe. 

6 ‘‘(B)(i) As soon as is practicable after the 

7 date of enactment of this subparagraph, the 

8 Board shall establish, by regulation, in con9 sultation with the Secretary of the Treasury, 

10 the policies and procedures governing emer11 gency lending under this paragraph. Such poli12 cies and procedures shall be designed to ensure 

13 that any emergency lending program or facility 

14 is for the purpose of providing liquidity to the 

15 financial system, and not to aid a failing finan16 cial company, and that the collateral for emer17 gency loans is of sufficient quality to protect 

18 taxpayers from losses. 

19 ‘‘(ii) The Board may not establish any pro20 gram or facility under this paragraph without 

21 the prior approval of the Secretary of the 

22 Treasury. 

23 ‘‘(C) The Board shall provide to the Com24 mittee on Banking, Housing, and Urban Affairs 


sroberts on DSKH9S0YB1PROD with BILLS
1524 

•S 3217 AMDT 3739 

1 of the Senate and the Committee on Financial 

2 Services of the House of Representatives— 

3 ‘‘(i) not later than 7 days after pro4 viding any loan or other financial assist5 ance under this paragraph, a report that 

6 includes— 

7 ‘‘(I) the justification for the exer8 cise of authority to provide such as9 sistance; 

10 ‘‘(II) the identity of the recipi11 ents of such assistance, subject to 

12 subparagraph (D); 

13 ‘‘(III) the date and amount of 

14 the assistance, and form in which the 

15 assistance was provided; and 

16 ‘‘(IV) the material terms of the 

17 assistance, including— 

18 ‘‘(aa) duration; 

19 ‘‘(bb) collateral pledged and 

20 the value thereof; 

21 ‘‘(cc) all interest, fees, and 

22 other revenue or items of value to 

23 be received in exchange for the 

24 assistance; 


sroberts on DSKH9S0YB1PROD with BILLS
1525 

•S 3217 AMDT 3739 

1 ‘‘(dd) any requirements im2 posed on the recipient with re3 spect to employee compensation, 

4 distribution of dividends, or any 

5 other corporate decision in ex6 change for the assistance; and 

7 ‘‘(ee) the expected costs to 

8 the taxpayers of such assistance; 

9 and 

10 ‘‘(ii) once every 30 days, with respect 

11 to any outstanding loan or other financial 

12 assistance under this paragraph, written 

13 updates on— 

14 ‘‘(I) the value of collateral; 

15 ‘‘(II) the amount of interest, 

16 fees, and other revenue or items of 

17 value received in exchange for the as18 sistance; and 

19 ‘‘(III) the expected or final cost 

20 to the taxpayers of such assistance. 

21 ‘‘(D)(i) The Board shall disclose, not later 

22 than 1 year after the date on which assistance 

23 was first received under the program or facility, 

24 unless the Board determines that such disclo25 sure likely would reduce the effectiveness of the 


sroberts on DSKH9S0YB1PROD with BILLS
1526 

•S 3217 AMDT 3739 

1 program or facility in addressing or mitigating 

2 the financial market disruptions, financial mar3 ket conditions, or other unusual and exigent cir4 cumstances sought to be addressed or mitigated 

5 by the program or facility, or would otherwise 

6 have a significant effect on economic or finan7 cial market conditions— 

8 ‘‘(I) the identity of the participants in 

9 an emergency lending program or facility 

10 commenced under this paragraph; 

11 ‘‘(II) the amounts borrowed by each 

12 participant in any such program or facility; 

13 and 

14 ‘‘(III) identifying details concerning 

15 the assets or collateral held by, under, or 

16 in connection with such a program or facil17 ity within 1 year of the date on which as18 sistance was first received under the pro19 gram or facility. 

20 ‘‘(ii) If the Board determines not to make 

21 the disclosures required by clause (i) within 1 

22 year of the date on which a participant first re23 ceived assistance under a program or facility, 

24 the Board shall— 


sroberts on DSKH9S0YB1PROD with BILLS
1527 

•S 3217 AMDT 3739 

1 ‘‘(I) provide to the Committee on 

2 Banking, Housing, and Urban Affairs of 

3 the Senate and the Committee on Finan4 cial Services of the House of Representa5 tives a written report explaining the rea6 sons for delaying the disclosures about 

7 such program or facility not later than 30 

8 days after making such determination; and 

9 ‘‘(II) provide to the Committee on 

10 Banking, Housing, and Urban Affairs of 

11 the Senate and the Committee on Finan12 cial Services of the House of Representa13 tives each year thereafter a written report 

14 explaining the reasons for continuing to 

15 delay disclosure, until the disclosures are 

16 complete. 

17 ‘‘(iii) The disclosures required by clause (i) 

18 shall be made not later than 12 months after 

19 the effective date of the termination of the facil20 ity by the Board. 

21 ‘‘(iv) If the Board determines not to make 

22 the disclosures required by clause (i), the 

23 Comptroller General of the United States shall 

24 issue a report to the Committee on Banking, 

25 Housing, and Urban Affairs of the Senate and 


sroberts on DSKH9S0YB1PROD with BILLS
1528 

•S 3217 AMDT 3739 

1 the Committee on Financial Services of the 

2 House of Representatives evaluating whether 

3 that determination is reasonable.’’. 

4 SEC. 1152. REVIEWS OF SPECIAL FEDERAL RESERVE CRED5 IT FACILITIES. 

6 (a) REVIEWS.—Section 714 of title 31, United States 

7 Code, is amended by adding at the end the following: 

8 ‘‘(f) REVIEWS OF CREDIT FACILITIES OF THE FED9 ERAL RESERVE SYSTEM.— 

10 ‘‘(1) DEFINITION.—In this subsection, the term 

11 ‘credit facility’ means a program or facility, includ12 ing any special purpose vehicle or other entity estab13 lished by or on behalf of the Board of Governors of 

14 the Federal Reserve System or a Federal reserve 

15 bank, authorized by the Board of Governors under 

16 the third undesignated paragraph of section 13 of 

17 the Federal Reserve Act (12 U.S.C. 343), that is not 

18 subject to audit under subsection (e), including— 

19 ‘‘(A) the Asset-Backed Commercial Paper 

20 Money Market Mutual Fund Liquidity Facility; 

21 ‘‘(B) the Term Asset-Backed Securities 

22 Loan Facility; 

23 ‘‘(C) the Primary Dealer Credit Facility; 

24 ‘‘(D) the Commercial Paper Funding Fa25 cility; and 


sroberts on DSKH9S0YB1PROD with BILLS
1529 

•S 3217 AMDT 3739 

1 ‘‘(E) the Term Securities Lending Facility. 

2 ‘‘(2) AUTHORITY FOR REVIEWS AND EXAMINA3 TIONS.—Subject to paragraph (3), and notwith4 standing any limitation in subsection (b) on the au5 diting and oversight of certain functions of the 

6 Board of Governors of the Federal Reserve System 

7 or any Federal reserve bank, the Comptroller Gen8 eral of the United States may conduct reviews, in9 cluding onsite examinations, of the Board of Gov10 ernors, a Federal reserve bank, or a credit facility, 

11 if the Comptroller General determines that such re12 views are appropriate, solely for the purposes of as13 sessing, with respect to a credit facility— 

14 ‘‘(A) the operational integrity, accounting, 

15 financial reporting, and internal controls of the 

16 credit facility; 

17 ‘‘(B) the effectiveness of the collateral poli18 cies established for the facility in mitigating 

19 risk to the relevant Federal reserve bank and 

20 taxpayers; 

21 ‘‘(C) whether the credit facility inappropri22 ately favors one or more specific participants 

23 over other institutions eligible to utilize the fa24 cility; and 


sroberts on DSKH9S0YB1PROD with BILLS
1530 

•S 3217 AMDT 3739 

1 ‘‘(D) the policies governing the use, selec2 tion, or payment of third-party contractors by 

3 or for any credit facility. 

4 ‘‘(3) REPORTS AND DELAYED DISCLOSURE.— 

5 ‘‘(A) REPORTS REQUIRED.—A report on 

6 each review conducted under paragraph (2) 

7 shall be submitted by the Comptroller General 

8 to the Congress before the end of the 90-day 

9 period beginning on the date on which such re10 view is completed. 

11 ‘‘(B) CONTENTS.—The report under sub12 paragraph (A) shall include a detailed descrip13 tion of the findings and conclusions of the 

14 Comptroller General with respect to the matters 

15 described in paragraph (2) that were reviewed 

16 and are the subject of the report, together with 

17 such recommendations for legislative or admin18 istrative action relating to such matters as the 

19 Comptroller General may determine to be ap20 propriate. 

21 ‘‘(C) DELAYED RELEASE OF CERTAIN IN22 FORMATION.— 

23 ‘‘(i) IN GENERAL.—The Comptroller 

24 General shall not disclose to any person or 

25 entity, including to Congress, the names or 


sroberts on DSKH9S0YB1PROD with BILLS
1531 

•S 3217 AMDT 3739 

1 identifying details of specific participants 

2 in any credit facility, the amounts bor3 rowed by specific participants in any credit 

4 facility, or identifying details regarding as5 sets or collateral held by, under, or in con6 nection with any credit facility, and any re7 port provided under subparagraph (A) 

8 shall be redacted to ensure that such 

9 names and details are not disclosed. 

10 ‘‘(ii) DELAYED RELEASE.—The non11 disclosure obligation under clause (i) shall 

12 expire with respect to any participant on 

13 the date on which the Board of Governors, 

14 directly or through a Federal reserve bank, 

15 publicly discloses the identity of the subject 

16 participant or the identifying details of the 

17 subject assets or collateral. 

18 ‘‘(iii) GENERAL RELEASE.—The 

19 Comptroller General shall release a non20 redacted version of any report on a credit 

21 facility 1 year after the effective date of 

22 the termination by the Board of Governors 

23 of the authorization for the credit facility. 

24 For purposes of this clause, a credit facil25 ity shall be deemed to have terminated 24 


sroberts on DSKH9S0YB1PROD with BILLS
1532 

•S 3217 AMDT 3739 

1 months after the date on which the credit 

2 facility ceases to make extensions of credit 

3 and loans, unless the credit facility is oth4 erwise terminated by the Board of Gov5 ernors. 

6 ‘‘(iv) EXCEPTIONS.—The nondisclo7 sure obligation under clause (i) shall not 

8 apply to the credit facilities Maiden Lane, 

9 Maiden Lane II, and Maiden Lane III.’’. 

10 (b) ACCESS TO RECORDS.—Section 714(d) of title 

11 31, United States Code, is amended— 

12 (1) in paragraph (2), by inserting ‘‘or any per13 son or entity described in paragraph (3)(A)’’ after 

14 ‘‘used by an agency’’; 

15 (2) in paragraph (3), by inserting ‘‘or (f)’’ after 

16 ‘‘subsection (e)’’ each place that term appears; and 

17 (3) in paragraph (3)(B), by adding at the end 

18 the following: ‘‘The Comptroller General may make 

19 and retain copies of books, accounts, and other 

20 records provided under subparagraph (A) as the 

21 Comptroller General deems appropriate. The Comp22 troller General shall provide to any person or entity 

23 described in subparagraph (A) a current list of offi24 cers and employees to whom, with proper identifica25 tion, records and property may be made available, 


sroberts on DSKH9S0YB1PROD with BILLS
1533 

•S 3217 AMDT 3739 

1 and who may make notes or copies necessary to 

2 carry out a review or examination under this sub3 section.’’. 

4 SEC. 1153. PUBLIC ACCESS TO INFORMATION. 

5 Section 2B of the Federal Reserve Act (12 U.S.C. 

6 225b) is amended by adding at the end the following: 

7 ‘‘(c) PUBLIC ACCESS TO INFORMATION.—The Board 

8 shall place on its home Internet website, a link entitled 

9 ‘Audit’, which shall link to a webpage that shall serve as 

10 a repository of information made available to the public 

11 for a reasonable period of time, not less than 6 months 

12 following the date of release of the relevant information, 

13 including— 

14 ‘‘(1) the reports prepared by the Comptroller 

15 General under section 714 of title 31, United States 

16 Code; 

17 ‘‘(2) the annual financial statements prepared 

18 by an independent auditor for the Board in accord19 ance with section 11B; 

20 ‘‘(3) the reports to the Committee on Banking, 

21 Housing, and Urban Affairs of the Senate required 

22 under the third undesignated paragraph of section 

23 13 (relating to emergency lending authority); and 

24 ‘‘(4) such other information as the Board rea25 sonably believes is necessary or helpful to the public 


sroberts on DSKH9S0YB1PROD with BILLS
1534 

•S 3217 AMDT 3739 

1 in understanding the accounting, financial reporting, 

2 and internal controls of the Board and the Federal 

3 reserve banks.’’. 

4 SEC. 1154. LIQUIDITY EVENT DETERMINATION. 

5 (a) DETERMINATION AND WRITTEN RECOMMENDA6 TION.— 

7 (1) DETERMINATION REQUEST.—The Secretary 

8 may request the Corporation and the Board of Gov9 ernors to determine whether a liquidity event exists 

10 that warrants use of the guarantee program author11 ized under section 1155. 

12 (2) REQUIREMENTS OF DETERMINATION.—Any 

13 determination pursuant to paragraph (1) shall— 

14 (A) be written; and 

15 (B) contain an evaluation of the evidence 

16 that— 

17 (i) a liquidity event exists; 

18 (ii) failure to take action would have 

19 serious adverse effects on financial stability 

20 or economic conditions in the United 

21 States; and 

22 (iii) actions authorized under section 

23 1155 are needed to avoid or mitigate po24 tential adverse effects on the United States 

25 financial system or economic conditions. 


sroberts on DSKH9S0YB1PROD with BILLS
1535 

•S 3217 AMDT 3739 

1 (b) PROCEDURES.—Notwithstanding any other provi2 sion of Federal or State law, upon the determination of 

both the Corporation (upon a vote of not fewer than 2 3 ⁄3

4 of the members of the Corporation then serving) and the 

Board of Governors (upon a vote of not fewer than 2 5 ⁄3

6 of the members of the Board of Governors then serving) 

7 under subsection (a) that a liquidity event exists that war8 rants use of the guarantee program authorized under sec9 tion 1155, and with the written consent of the Secretary— 

10 (1) the Corporation shall take action in accord11 ance with section 1155(a); and 

12 (2) the Secretary (in consultation with the 

13 President) shall take action in accordance with sec14 tion 1155(c). 

15 (c) DOCUMENTATION AND REVIEW.— 

16 (1) DOCUMENTATION.—The Secretary shall— 

17 (A) maintain the written documentation of 

18 each determination of the Corporation and the 

19 Board of Governors under this section; and 

20 (B) provide the documentation for review 

21 under paragraph (2). 

22 (2) GAO REVIEW.—The Comptroller General of 

23 the United States shall review and report to Con24 gress on any determination of the Corporation and 


sroberts on DSKH9S0YB1PROD with BILLS
1536 

•S 3217 AMDT 3739 

1 the Board of Governors under subsection (a), includ2 ing— 

3 (A) the basis for the determination; and 

4 (B) the likely effect of the actions taken. 

5 (d) REPORT TO CONGRESS.—On the earlier of the 

6 date of a submission made to Congress under section 

7 1155(c), or within 30 days of the date of a determination 

8 under subsection (a), the Secretary shall provide written 

9 notice of the determination of the Corporation and the 

10 Board of Governors to the Committee on Banking, Hous11 ing, and Urban Affairs of the Senate and the Committee 

12 on Financial Services of the House of Representatives, in13 cluding a description of the basis for the determination. 

14 SEC. 1155. EMERGENCY FINANCIAL STABILIZATION. 

15 (a) IN GENERAL.—Upon the written determination 

16 of the Corporation and the Board of Governors under sec17 tion 1154, the Corporation shall create a widely available 

18 program to guarantee obligations of solvent insured depos19 itory institutions or solvent depository institution holding 

20 companies (including any affiliates thereof) during times 

21 of severe economic distress, except that a guarantee of ob22 ligations under this section may not include the provision 

23 of equity in any form. 

24 (b) RULEMAKING AND TERMS AND CONDITIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1537 

•S 3217 AMDT 3739 

1 (1) POLICIES AND PROCEDURES.—As soon as is 

2 practicable after the date of enactment of this Act, 

3 the Corporation shall establish, by regulation, and in 

4 consultation with the Secretary, policies and proce5 dures governing the issuance of guarantees author6 ized by this section. Such policies and procedures 

7 may include a requirement of collateral as a condi8 tion of any such guarantee. 

9 (2) TERMS AND CONDITIONS.—The terms and 

10 conditions of any guarantee program shall be estab11 lished by the Corporation, with the concurrence of 

12 the Secretary. 

13 (c) DETERMINATION OF GUARANTEED AMOUNT.— 

14 (1) IN GENERAL.—In connection with any pro15 gram established pursuant to subsection (a) and 

16 subject to paragraph (2) of this subsection, the Sec17 retary (in consultation with the President) shall de18 termine the maximum amount of debt outstanding 

19 that the Corporation may guarantee under this sec20 tion, and the President may transmit to Congress a 

21 written report on the plan of the Corporation to ex22 ercise the authority under this section to issue guar23 antees up to that maximum amount. Upon the expi24 ration of the 5-calendar-day period beginning on the 

25 date on which Congress receives the report on the 


sroberts on DSKH9S0YB1PROD with BILLS
1538 

•S 3217 AMDT 3739 

1 plan of the Corporation, the Corporation may exer2 cise the authority under this section to issue guaran3 tees up to that specified maximum amount, unless 

4 there is enacted, within that 5-calendar-day period, 

5 a joint resolution disapproving such report, as pro6 vided in subsection (d). 

7 (2) ADDITIONAL DEBT GUARANTEE AUTHOR8 ITY.—If the Secretary (in consultation with the 

9 President) determines, after a submission to Con10 gress under paragraph (1), that the maximum guar11 antee amount should be raised, and the Council con12 curs with that determination, the President may 

13 transmit to Congress a written report on the plan of 

14 the Corporation to exercise the authority under this 

15 section to issue guarantees up to the increased max16 imum debt guarantee amount. Upon the expiration 

17 of the 5-calendar-day period beginning on the date 

18 on which Congress receives the report on the plan of 

19 the Corporation, the Corporation may exercise the 

20 authority under this section to issue guarantees up 

21 to that specified maximum amount, unless there is 

22 enacted, within that 5-calendar-day period, a joint 

23 resolution disapproving such report, as provided in 

24 subsection (d). 

25 (d) JOINT RESOLUTION.— 


sroberts on DSKH9S0YB1PROD with BILLS
1539 

•S 3217 AMDT 3739 

1 (1) FAST TRACK CONSIDERATION IN HOUSE OF

2 REPRESENTATIVES.— 

3 (A) CONTENTS OF JOINT RESOLUTION.— 

4 For purposes of this section, the term ‘‘joint 

5 resolution’’ means only a joint resolution— 

6 (i) that is introduced not later than 3 

7 calendar days after the date on which the 

8 report of the Secretary referred to in sec9 tion 1154(d) is received by Congress; 

10 (ii) that does not have a preamble; 

11 (iii) the title of which is as follows: 

12 ‘‘Joint resolution relating to the dis13 approval of a plan to guarantee obligations 

14 under section 1155 of the Restoring Amer15 ican Financial Stability Act of 2010’’; and 

16 (iv) the matter after the resolving 

17 clause of which is as follows: ‘‘That Con18 gress disapproves the obligation of any 

19 amount described in section 1155(c) of the 

20 Restoring American Financial Stability Act 

21 of 2010.’’. 

22 (B) RECONVENING.—Upon receipt of a re23 port under subsection (c), the Speaker, if the 

24 House of Representatives would otherwise be 

25 adjourned, shall notify the Members of the 


sroberts on DSKH9S0YB1PROD with BILLS
1540 

•S 3217 AMDT 3739 

1 House of Representatives that, pursuant to this 

2 section, the House of Representatives shall con3 vene not later than the second calendar day 

4 after the date of receipt of such report. 

5 (C) REPORTING AND DISCHARGE.—Any 

6 committee of the House of Representatives to 

7 which a joint resolution is referred shall report 

8 it to the House of Representatives not later 

9 than 4 calendar days after the date of receipt 

10 of the report under subsection (c). If a com11 mittee fails to report the joint resolution within 

12 that period, the committee shall be discharged 

13 from further consideration of the joint resolu14 tion and the joint resolution shall be referred to 

15 the appropriate calendar. 

16 (D) PROCEEDING TO CONSIDERATION.— 

17 After each committee authorized to consider a 

18 joint resolution reports it to the House of Rep19 resentatives or has been discharged from its 

20 consideration, it shall be in order, not later 

21 than the 5th day after Congress receives the re22 port under subsection (c), to move to proceed to 

23 consider the joint resolution in the House of 

24 Representatives. All points of order against the 

25 motion are waived. Such a motion shall not be 


sroberts on DSKH9S0YB1PROD with BILLS
1541 

•S 3217 AMDT 3739 

1 in order after the House of Representatives has 

2 disposed of a motion to proceed on the joint 

3 resolution. The previous question shall be con4 sidered as ordered on the motion to its adoption 

5 without intervening motion. The motion shall 

6 not be debatable. A motion to reconsider the 

7 vote by which the motion is disposed of shall 

8 not be in order. 

9 (E) CONSIDERATION.—The joint resolution 

10 shall be considered as read. All points of order 

11 against the joint resolution and against its con12 sideration are waived. The previous question 

13 shall be considered as ordered on the joint reso14 lution to its passage without intervening motion 

15 except 2 hours of debate equally divided and 

16 controlled by the proponent and an opponent. A 

17 motion to reconsider the vote on passage of the 

18 joint resolution shall not be in order. 

19 (2) FAST TRACK CONSIDERATION IN SENATE.— 

20 (A) RECONVENING.—Upon receipt of a re21 port under subsection (c), if the Senate has ad22 journed or recessed for more than 2 days, the 

23 majority leader of the Senate, after consultation 

24 with the minority leader of the Senate, shall no25 tify the Members of the Senate that, pursuant 


sroberts on DSKH9S0YB1PROD with BILLS
1542 

•S 3217 AMDT 3739 

1 to this section, the Senate shall convene not 

2 later than the second calendar day after receipt 

3 of such message. 

4 (B) PLACEMENT ON CALENDAR.—Upon in5 troduction in the Senate, the joint resolution 

6 shall be placed immediately on the calendar. 

7 (C) FLOOR CONSIDERATION.— 

8 (i) IN GENERAL.—Notwithstanding 

9 Rule XXII of the Standing Rules of the 

10 Senate, it is in order at any time during 

11 the period beginning on the 4th day after 

12 the date on which Congress receives a re13 port under subsection (c), and ending on 

14 the 5th day after the date on which Con15 gress receives a report under subsection (c) 

16 (even though a previous motion to the 

17 same effect has been disagreed to) to move 

18 to proceed to the consideration of the joint 

19 resolution, and all points of order against 

20 the joint resolution (and against consider21 ation of the joint resolution) are waived. 

22 The motion to proceed is not debatable. 

23 The motion is not subject to a motion to 

24 postpone. A motion to reconsider the vote 

25 by which the motion is agreed to or disVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01542 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1543 

•S 3217 AMDT 3739 

1 agreed to shall not be in order. If a motion 

2 to proceed to the consideration of the reso3 lution is agreed to, the joint resolution 

4 shall remain the unfinished business until 

5 disposed of. 

6 (ii) DEBATE.—Debate on the joint 

7 resolution, and on all debatable motions 

8 and appeals in connection therewith, shall 

9 be limited to not more than 10 hours, 

10 which shall be divided equally between the 

11 majority and minority leaders or their des12 ignees. A motion further to limit debate is 

13 in order and not debatable. An amendment 

14 to, or a motion to postpone, or a motion to 

15 proceed to the consideration of other busi16 ness, or a motion to recommit the joint 

17 resolution is not in order. 

18 (iii) VOTE ON PASSAGE.—The vote on 

19 passage shall occur immediately following 

20 the conclusion of the debate on the joint 

21 resolution, and a single quorum call at the 

22 conclusion of the debate if requested in ac23 cordance with the rules of the Senate. 

24 (iv) RULINGS OF THE CHAIR ON PRO25 CEDURE.—Appeals from the decisions of 


sroberts on DSKH9S0YB1PROD with BILLS
1544 

•S 3217 AMDT 3739 

1 the Chair relating to the application of the 

2 rules of the Senate, as the case may be, to 

3 the procedure relating to a joint resolution 

4 shall be decided without debate. 

5 (3) RULES RELATING TO SENATE AND HOUSE

6 OF REPRESENTATIVES.— 

7 (A) COORDINATION WITH ACTION BY

8 OTHER HOUSE.—If, before the passage by one 

9 House of a joint resolution of that House, that 

10 House receives from the other House a joint 

11 resolution, then the following procedures shall 

12 apply: 

13 (i) The joint resolution of the other 

14 House shall not be referred to a com15 mittee. 

16 (ii) With respect to a joint resolution 

17 of the House receiving the resolution— 

18 (I) the procedure in that House 

19 shall be the same as if no joint resolu20 tion had been received from the other 

21 House; but 

22 (II) the vote on passage shall be 

23 on the joint resolution of the other 

24 House. 


sroberts on DSKH9S0YB1PROD with BILLS
1545 

•S 3217 AMDT 3739 

1 (B) TREATMENT OF JOINT RESOLUTION

2 OF OTHER HOUSE.—If one House fails to intro3 duce or consider a joint resolution under this 

4 section, the joint resolution of the other House 

5 shall be entitled to expedited floor procedures 

6 under this section. 

7 (C) TREATMENT OF COMPANION MEAS8 URES.—If, following passage of the joint resolu9 tion in the Senate, the Senate then receives the 

10 companion measure from the House of Rep11 resentatives, the companion measure shall not 

12 be debatable. 

13 (D) CONSIDERATION AFTER PASSAGE.— 

14 (i) IN GENERAL.—If Congress passes 

15 a joint resolution, the period beginning on 

16 the date the President is presented with 

17 the joint resolution and ending on the date 

18 the President takes action with respect to 

19 the joint resolution shall be disregarded in 

20 computing the 5-day period described in 

21 subsection (c). 

22 (ii) VETOES.—If the President vetoes 

23 the joint resolution— 

24 (I) the period beginning on the 

25 date the President vetoes the joint 


sroberts on DSKH9S0YB1PROD with BILLS
1546 

•S 3217 AMDT 3739 

1 resolution and ending on the date the 

2 Congress receives the veto message 

3 with respect to the joint resolution 

4 shall be disregarded in computing the 

5 5-day period described in subsection 

6 (c); and 

7 (II) debate on a veto message in 

8 the Senate under this section shall be 

9 1 hour equally divided between the 

10 majority and minority leaders or their 

11 designees. 

12 (E) RULES OF HOUSE OF REPRESENTA13 TIVES AND SENATE.—This subsection is en14 acted by Congress— 

15 (i) as an exercise of the rulemaking 

16 power of the Senate and House of Rep17 resentatives, respectively, and as such it is 

18 deemed a part of the rules of each House, 

19 respectively, but applicable only with re20 spect to the procedure to be followed in 

21 that House in the case of a joint resolu22 tion, and it supersedes other rules only to 

23 the extent that it is inconsistent with such 

24 rules; and 


sroberts on DSKH9S0YB1PROD with BILLS
1547 

•S 3217 AMDT 3739 

1 (ii) with full recognition of the con2 stitutional right of either House to change 

3 the rules (so far as relating to the proce4 dure of that House) at any time, in the 

5 same manner, and to the same extent as in 

6 the case of any other rule of that House. 

7 (e) FUNDING.— 

8 (1) FEES AND OTHER CHARGES.—The Corpora9 tion shall charge fees and other assessments to all 

10 participants in the program established pursuant to 

11 this section, in such amounts as are necessary to off12 set projected losses and administrative expenses, in13 cluding amounts borrowed pursuant to paragraph 

14 (3), and such amounts shall be available to the Cor15 poration. 

16 (2) EXCESS FUNDS.—If, at the conclusion of 

17 the program established under this section, there are 

18 any excess funds collected from the fees associated 

19 with such program, the funds shall be deposited in 

20 the General Fund of the Treasury. 

21 (3) AUTHORITY OF CORPORATION.—The Cor22 poration— 

23 (A) may borrow funds from the Secretary 

24 of the Treasury and issue obligations of the 

25 Corporation to the Secretary for amounts borVerDate Mar 15 2010 23:00 Apr 29, 2010 Jkt 089200 PO 00000 Frm 01547 Fmt 6654 Sfmt 6201 E:\BILLS\S3217.AS S3217

sroberts on DSKH9S0YB1PROD with BILLS
1548 

•S 3217 AMDT 3739 

1 rowed, and the amounts borrowed shall be 

2 available to the Corporation for purposes of car3 rying out a program established pursuant to 

4 this section, including the payment of reason5 able costs of administering the program, and 

6 the obligations issued shall be repaid in full 

7 with interest through fees and charges paid by 

8 participants in accordance with paragraphs (1) 

9 and (4), as applicable; and 

10 (B) may not borrow funds from the De11 posit Insurance Fund established pursuant to 

12 section 11(a)(4) of the Federal Deposit Insur13 ance Act. 

14 (4) BACKUP SPECIAL ASSESSMENTS.—To the 

15 extent that the funds collected pursuant to para16 graph (1) are insufficient to cover any losses or ex17 penses, including amounts borrowed pursuant to 

18 paragraph (3), arising from a program established 

19 pursuant to this section, the Corporation shall im20 pose a special assessment solely on participants in 

21 the program, in amounts necessary to address such 

22 insufficiency, and which shall be available to the 

23 Corporation to cover such losses or expenses. 

24 (5) AUTHORITY OF THE SECRETARY.—The Sec25 retary may purchase any obligations issued under 


sroberts on DSKH9S0YB1PROD with BILLS
1549 

•S 3217 AMDT 3739 

1 paragraph (3)(A). For such purpose, the Secretary 

2 may use the proceeds of the sale of any securities 

3 issued under chapter 31 of title 31, United States 

4 Code, and the purposes for which securities may be 

5 issued under that chapter 31 are extended to include 

6 such purchases, and the amount of any securities 

7 issued under that chapter 31 for such purpose shall 

8 be treated in the same manner as securities issued 

9 under section 208(n)(3)(B). 

10 (f) RULE OF CONSTRUCTION.—For purposes of this 

11 section, a guarantee of deposits held by insured depository 

12 institutions shall not be treated as a debt guarantee pro13 gram. 

14 (g) DEFINITIONS.—For purposes of this section, the 

15 following definitions shall apply: 

16 (1) COMPANY.—The term ‘‘company’’ means 

17 any entity other than a natural person that is incor18 porated or organized under Federal law or the laws 

19 of any State. 

20 (2) DEPOSITORY INSTITUTION HOLDING COM21 PANY.—The term ‘‘depository institution holding 

22 company’’ has the same meaning as in section 3 of 

23 the Federal Deposit Insurance Act (12 U.S.C. 

24 1813). 


sroberts on DSKH9S0YB1PROD with BILLS
1550 

•S 3217 AMDT 3739 

1 (3) LIQUIDITY EVENT.—The term ‘‘liquidity 

2 event’’ means— 

3 (A) a reduction in the usual ability of fi4 nancial market participants— 

5 (i) to sell a type of financial asset, 

6 without a significant reduction in price; or 

7 (ii) to borrow using that type of asset 

8 as collateral without a significant increase 

9 in margin; or 

10 (B) a significant reduction in the usual 

11 ability of financial and nonfinancial market par12 ticipants to obtain unsecured credit. 

13 (4) SOLVENT.—The term ‘‘solvent’’ means that 

14 the value of the assets of an entity exceed its obliga15 tions to creditors. 

16 SEC. 1156. ADDITIONAL RELATED AMENDMENTS. 

17 (a) SUSPENSION OF PARALLEL FEDERAL DEPOSIT

18 INSURANCE ACT AUTHORITY.—Effective upon the date of 

19 enactment of this section, the Corporation may not exer20 cise its authority under section 13(c)(4)(G)(i) of the Fed21 eral Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) 

22 to establish any widely available debt guarantee program 

23 for which section 1155 would provide authority. 

24 (b) MITIGATION.—Section 13(c)(4)(G)(i) of the Fed25 eral Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) 


sroberts on DSKH9S0YB1PROD with BILLS
1551 

•S 3217 AMDT 3739 

1 is amended by striking ‘‘such effects.’’ and inserting ‘‘such 

2 effects, provided the insured depository institution has 

3 been placed in receivership.’’. 

4 (c) EFFECT OF DEFAULT ON AN FDIC GUAR5 ANTEE.—If an insured depository institution or depository 

6 institution holding company (as those terms are defined 

7 in section 3 of the Federal Deposit Insurance Act) partici8 pating in a program under section 1155, or any partici9 pant in a debt guarantee program established pursuant 

10 to section 13(c)(4)(G)(i) of the Federal Deposit Insurance 

11 Act defaults on any obligation guaranteed by the Corpora12 tion after the date of enactment of this Act, the Corpora13 tion shall— 

14 (1) appoint itself as receiver for the insured de15 pository institution that defaults; and 

16 (2) with respect to any other participating com17 pany that is not an insured depository institution 

18 that defaults— 

19 (A) require— 

20 (i) consideration of whether a deter21 mination shall be made, as provided in sec22 tion 202 to resolve the company under sec23 tion 203; and 

24 (ii) the company to file a petition for 

25 bankruptcy under section 301 of title 11, 


sroberts on DSKH9S0YB1PROD with BILLS
1552 

•S 3217 AMDT 3739 

1 United States Code, if the Corporation is 

2 not appointed receiver pursuant to section 

3 203 within 30 days of the date of default; 

4 or 

5 (B) file a petition for involuntary bank6 ruptcy on behalf of the company under section 

7 303 of title 11, United States Code. 

8 SEC. 1157. FEDERAL RESERVE ACT AMENDMENTS ON FED9 ERAL RESERVE BANK GOVERNANCE. 

10 The Federal Reserve Act (12 U.S.C. 221 et seq.) is 

11 amended in section 4 by adding at the end the following: 

12 ‘‘(25) SELECTION OF THE PRESIDENT OF THE

13 FEDERAL RESERVE BANK OF NEW YORK.—Notwith14 standing any other provision of this section, after 

15 the date of enactment of the Restoring American Fi16 nancial Stability Act of 2010, the president of the 

17 Federal Reserve Bank of New York shall be ap18 pointed by the President, by and with the advice and 

19 consent of the Senate, for terms of 5 years. 

20 ‘‘(26) LIMITATION ON ELIGIBILITY TO VOTE

21 FOR OR SERVE AS A FEDERAL RESERVE BANK DI22 RECTOR.—Notwithstanding any other provision of 

23 this section, after the date of enactment of the Re24 storing American Financial Stability Act of 2010, no 

25 company, or subsidiary or affiliate of a company 


sroberts on DSKH9S0YB1PROD with BILLS
1553 

•S 3217 AMDT 3739 

1 that is supervised by the Board, may vote for mem2 bers of the board of directors of a Federal reserve 

3 bank, and no past or current officer, director, or em4 ployee of such company, or subsidiary or affiliate of 

5 such company, may serve as a member of the board 

6 of directors of a Federal reserve bank.’’. 

7 SEC. 1158. AMENDMENTS TO THE FEDERAL RESERVE ACT 

8 RELATING TO SUPERVISION AND REGULA9 TION POLICY. 

10 (a) ESTABLISHMENT OF THE POSITION OF VICE

11 CHAIRMAN FOR SUPERVISION.— 

12 (1) POSITION ESTABLISHED.—The second un13 designated paragraph of section 10 of the Federal 

14 Reserve Act (12 U.S.C. 242) (relating to the Chair15 man and Vice Chairman of the Board) is amended 

16 by striking the third sentence and inserting the fol17 lowing: ‘‘Of the persons thus appointed, 1 shall be 

18 designated by the President, by and with the advice 

19 and consent of the Senate, to serve as Chairman of 

20 the Board for a term of 4 years, and 2 shall be des21 ignated by the President, by and with the advice and 

22 consent of the Senate, to serve as Vice Chairmen of 

23 the Board, each for a term of 4 years, 1 of whom 

24 shall serve in the absence of the Chairman, as pro25 vided in the fourth undesignated paragraph of this 


sroberts on DSKH9S0YB1PROD with BILLS
1554 

•S 3217 AMDT 3739 

1 section, and 1 of whom shall be designated Vice 

2 Chairman for Supervision. The Vice Chairman for 

3 Supervision shall develop policy recommendations for 

4 the Board regarding supervision and regulation of 

5 depository institution holding companies and other 

6 financial firms supervised by the Board, and shall 

7 oversee the supervision and regulation of such 

8 firms.’’. 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by subsection (a) takes effect on the date of enact11 ment of this title and applies to individuals who are 

12 designated by the President on or after that date to 

13 serve as Vice Chairman of Supervision. 

14 (b) FINANCIAL STABILITY AS BOARD FUNCTION.— 

15 Section 10 of the Federal Reserve Act (12 U.S.C. 241) 

16 is amended by adding at the end the following: 

17 ‘‘(11) FINANCIAL STABILITY FUNCTION.—The 

18 Board of Governors shall identify, measure, monitor, 

19 and mitigate risks to the financial stability of the 

20 United States.’’. 

21 (c) APPEARANCES BEFORE CONGRESS.—Section 10 

22 of the Federal Reserve Act (12 U.S.C. 241) is amended 

23 by adding at the end the following: 

24 ‘‘(12) APPEARANCES BEFORE CONGRESS.—The 

25 Vice Chairman for Supervision shall appear before 


sroberts on DSKH9S0YB1PROD with BILLS
1555 

•S 3217 AMDT 3739 

1 the Committee on Banking, Housing, and Urban Af2 fairs of the Senate and the Committee on Financial 

3 Services of the House of Representatives and at 

4 semi-annual hearings regarding the efforts, activi5 ties, objectives, and plans of the Board with respect 

6 to the conduct of supervision and regulation of de7 pository institution holding companies and other fi8 nancial firms supervised by the Board.’’. 

9 (d) BOARD RESPONSIBILITY TO SET SUPERVISION

10 AND REGULATORY POLICY.—Section 11 of the Federal 

11 Reserve Act (12 U.S.C. 248) (relating to enumerated pow12 ers of the Board) is amended by adding at the end of sub13 section (k) (relating to delegation) the following: ‘‘The 

14 Board of Governors may not delegate to a Federal reserve 

15 bank its functions for the establishment of policies for the 

16 supervision and regulation of depository institution hold17 ing companies and other financial firms supervised by the 

18 Board of Governors.’’. 

19 TITLE XII—IMPROVING ACCESS 

20 TO MAINSTREAM FINANCIAL 

21 INSTITUTIONS 

22 SECTION 1201. SHORT TITLE. 

23 This title may be cited as the ‘‘Improving Access to 

24 Mainstream Financial Institutions Act of 2010’’. 


sroberts on DSKH9S0YB1PROD with BILLS
1556 

•S 3217 AMDT 3739 

1 SEC. 1202. PURPOSE. 

2 The purpose of this title is to encourage initiatives 

3 for financial products and services that are appropriate 

4 and accessible for millions of Americans who are not fully 

5 incorporated into the financial mainstream. 

6 SEC. 1203. DEFINITIONS. 

7 In this title, the following definitions shall apply: 

8 (1) ACCOUNT.—The term ‘‘account’’ means an 

9 agreement between an individual and an eligible en10 tity under which the individual obtains from or 

11 through the entity 1 or more banking products and 

12 services, and includes a deposit account, a savings 

13 account (including a money market savings ac14 count), an account for a closed-end loan, and other 

15 products or services, as the Secretary deems appro16 priate. 

17 (2) COMMUNITY DEVELOPMENT FINANCIAL IN18 STITUTION.—The term ‘‘community development fi19 nancial institution’’ has the same meaning as in sec20 tion 103(5) of the Community Development Banking 

21 and Financial Institutions Act of 1994 (12 U.S.C. 

22 4702(5)). 

23 (3) ELIGIBLE ENTITY.—The term ‘‘eligible enti24 ty’’ means— 

25 (A) an organization described in section 

26 501(c)(3) of the Internal Revenue Code of 


sroberts on DSKH9S0YB1PROD with BILLS
1557 

•S 3217 AMDT 3739 

1 1986, and exempt from tax under section 

2 501(a) of such Code; 

3 (B) a federally insured depository institu4 tion; 

5 (C) a community development financial in6 stitution; 

7 (D) a State, local, or tribal government en8 tity; or 

9 (E) a partnership or other joint venture 

10 comprised of 1 or more of the entities described 

11 in subparagraphs (A) through (D), in accord12 ance with regulations prescribed by the Sec13 retary under this title. 

14 (4) FEDERALLY INSURED DEPOSITORY INSTI15 TUTION.—The term ‘‘federally insured depository in16 stitution’’ means any insured depository institution 

17 (as that term is defined in section 3 of the Federal 

18 Deposit Insurance Act (12 U.S.C. 1813)) and any 

19 insured credit union (as that term is defined in sec20 tion 101 of the Federal Credit Union Act (12 U.S.C. 

21 1752)). 

22 (5) PAYDAY LOAN.—The term ‘‘payday loan’’ 

23 means any transaction in which a small cash ad24 vance is made to a consumer in exchange for— 


sroberts on DSKH9S0YB1PROD with BILLS
1558 

•S 3217 AMDT 3739 

1 (A) the personal check or share draft of 

2 the consumer, in the amount of the advance 

3 plus a fee, where presentment or negotiation of 

4 such check or share draft is deferred by agree5 ment of the parties until a designated future 

6 date; or 

7 (B) the authorization of the consumer to 

8 debit the transaction account or share draft ac9 count of the consumer, in the amount of the ad10 vance plus a fee, where such account will be 

11 debited on or after a designated future date. 

12 SEC. 1204. EXPANDED ACCESS TO MAINSTREAM FINANCIAL 

13 INSTITUTIONS. 

14 (a) IN GENERAL.—The Secretary is authorized to es15 tablish a multiyear program of grants, cooperative agree16 ments, financial agency agreements, and similar contracts 

17 or undertakings to promote initiatives designed— 

18 (1) to enable low- and moderate-income individ19 uals to establish one or more accounts in a federally 

20 insured depository institution that are appropriate to 

21 meet the financial needs of such individuals; and 

22 (2) to improve access to the provision of ac23 counts, on reasonable terms, for low- and moderate24 income individuals. 

25 (b) PROGRAM ELIGIBILITY AND ACTIVITIES.— 


sroberts on DSKH9S0YB1PROD with BILLS
1559 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—The Secretary shall restrict 

2 participation in any program established under sub3 section (a) to an eligible entity. Subject to regula4 tions prescribed by the Secretary under this title, 1 

5 or more eligible entities may participate in 1 or sev6 eral programs established under subsection (a). 

7 (2) ACCOUNT ACTIVITIES.—Subject to regula8 tions prescribed by the Secretary, an eligible entity 

9 may, in participating in a program established under 

10 subsection (a), offer or provide to low- and mod11 erate-income individuals products and services relat12 ing to accounts, including— 

13 (A) small-dollar value loans; and 

14 (B) financial education and counseling re15 lating to conducting transactions in and man16 aging accounts. 

17 SEC. 1205. LOW-COST ALTERNATIVES TO PAYDAY LOANS. 

18 (a) GRANTS AUTHORIZED.—The Secretary is author19 ized to establish multiyear demonstration programs by 

20 means of grants, cooperative agreements, financial agency 

21 agreements, and similar contracts or undertakings, with 

22 eligible entities to provide low-cost, small loans to con23 sumers that will provide alternatives to more costly payday 

24 loans. 

25 (b) TERMS AND CONDITIONS.— 


sroberts on DSKH9S0YB1PROD with BILLS
1560 

•S 3217 AMDT 3739 

1 (1) IN GENERAL.—Loans under this section 

2 shall be made on terms and conditions, and pursu3 ant to lending practices, that are reasonable for con4 sumers. 

5 (2) FINANCIAL LITERACY AND EDUCATION OP6 PORTUNITIES.— 

7 (A) IN GENERAL.—Each eligible entity 

8 awarded a grant under this section shall pro9 mote and take appropriate steps to ensure the 

10 provision of financial literacy and education op11 portunities, such as relevant counseling services, 

12 educational courses, or wealth building pro13 grams, to each consumer provided with a loan 

14 pursuant to this section. 

15 (B) AUTHORITY TO EXPAND ACCESS.—As 

16 part of the grants, agreements, and under17 takings established under this section, the Sec18 retary may implement reasonable measures or 

19 programs designed to expand access to financial 

20 literacy and education opportunities, including 

21 relevant counseling services, educational 

22 courses, or wealth building programs to be pro23 vided to individuals who obtain loans from eligi24 ble entities under this section. 


sroberts on DSKH9S0YB1PROD with BILLS
1561 

•S 3217 AMDT 3739 

1 SEC. 1206. GRANTS TO ESTABLISH LOAN-LOSS RESERVE 

2 FUNDS. 

3 The Community Development Banking and Financial 

4 Institutions Act of 1994 (12 U.S.C. 4701 et seq.) is 

5 amended by adding at the end the following: 

6 ‘‘SEC. 122. GRANTS TO ESTABLISH LOAN-LOSS RESERVE 

7 FUNDS. 

8 ‘‘(a) PURPOSES.—The purposes of this section are— 

9 ‘‘(1) to make financial assistance available from 

10 the Fund in order to help community development 

11 financial institutions defray the costs of operating 

12 small dollar loan programs, by providing the 

13 amounts necessary for such institutions to establish 

14 their own loan loss reserve funds to mitigate some 

15 of the losses on such small dollar loan programs; 

16 and 

17 ‘‘(2) to encourage community development fi18 nancial institutions to establish and maintain small 

19 dollar loan programs that would help give consumers 

20 access to mainstream financial institutions and com21 bat payday lending. 

22 ‘‘(b) GRANTS.— 

23 ‘‘(1) LOAN-LOSS RESERVE FUND GRANTS.—The 

24 Fund shall make grants to community development 

25 financial institutions or to any partnership between 

26 such community development financial institutions 


sroberts on DSKH9S0YB1PROD with BILLS
1562 

•S 3217 AMDT 3739 

1 and any other federally insured depository institu2 tion with a primary mission to serve targeted invest3 ment areas, as such areas are defined under section 

4 103(16), to enable such institutions or any partner5 ship of such institutions to establish a loan-loss re6 serve fund in order to defray the costs of a small 

7 dollar loan program established or maintained by 

8 such institution. 

9 ‘‘(2) MATCHING REQUIREMENT.—A community 

10 development financial institution or any partnership 

11 of institutions established pursuant to paragraph (1) 

12 shall provide non-Federal matching funds in an 

13 amount equal to 50 percent of the amount of any 

14 grant received under this section. 

15 ‘‘(3) USE OF FUNDS.—Any grant amounts re16 ceived by a community development financial institu17 tion or any partnership between or among such in18 stitutions under paragraph (1)— 

19 ‘‘(A) may not be used by such institution 

20 to provide direct loans to consumers; 

21 ‘‘(B) may be used by such institution to 

22 help recapture a portion or all of a defaulted 

23 loan made under the small dollar loan program 

24 of such institution; and 


sroberts on DSKH9S0YB1PROD with BILLS
1563 

•S 3217 AMDT 3739 

1 ‘‘(C) may be used to designate and utilize 

2 a fiscal agent for services normally provided by 

3 such an agent. 

4 ‘‘(4) TECHNICAL ASSISTANCE GRANTS.—The 

5 Fund shall make technical assistance grants to com6 munity development financial institutions or any 

7 partnership between or among such institutions to 

8 support and maintain a small dollar loan program. 

9 Any grant amounts received under this paragraph 

10 may be used for technology, staff support, and other 

11 costs associated with establishing a small dollar loan 

12 program. 

13 ‘‘(c) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) the term ‘consumer reporting agency that 

15 compiles and maintains files on consumers on a na16 tionwide basis’ has the same meaning given such 

17 term in section 603(p) of the Fair Credit Reporting 

18 Act (15 U.S.C. 1681a(p)); and 

19 ‘‘(2) the term ‘small dollar loan program’ 

20 means a loan program wherein a community devel21 opment financial institution or any partnership be22 tween or among such institutions offers loans to con23 sumers that— 

24 ‘‘(A) are made in amounts not exceeding 

25 $2,500; 


sroberts on DSKH9S0YB1PROD with BILLS
1564 

•S 3217 AMDT 3739 

1 ‘‘(B) must be repaid in installments; 

2 ‘‘(C) have no pre-payment penalty; 

3 ‘‘(D) the institution has to report pay4 ments regarding the loan to at least 1 of the 

5 consumer reporting agencies that compiles and 

6 maintains files on consumers on a nationwide 

7 basis; and 

8 ‘‘(E) meet any other affordability require9 ments as may be established by the Adminis10 trator.’’. 

11 SEC. 1207. PROCEDURAL PROVISIONS. 

12 An eligible entity desiring to participate in a program 

13 or obtain a grant under this title shall submit an applica14 tion to the Secretary, in such form and containing such 

15 information as the Secretary may require. 

16 SEC. 1208. AUTHORIZATION OF APPROPRIATIONS. 

17 (a) AUTHORIZATION TO THE SECRETARY.—There 

18 are authorized to be appropriated to the Secretary, such 

19 sums as are necessary to both administer and fund the 

20 programs and projects authorized by this title, to remain 

21 available until expended. 

22 (b) AUTHORIZATION TO THE FUND.—There is au23 thorized to be appropriated to the Fund for each fiscal 

24 year beginning in fiscal year 2010, an amount equal to 

25 the amount of the administrative costs of the Fund for 


sroberts on DSKH9S0YB1PROD with BILLS
1565 

•S 3217 AMDT 3739 

1 the operation of the grant program established under this 

2 title. 

3 SEC. 1209. REGULATIONS. 

4 (a) IN GENERAL.—The Secretary is authorized to 

5 promulgate regulations to implement and administer the 

6 grant programs and undertakings authorized by this title. 

7 (b) REGULATORY AUTHORITY.—Regulations pre8 scribed under this section may contain such classifications, 

9 differentiations, or other provisions, and may provide for 

10 such adjustments and exceptions for any class of grant 

11 programs, undertakings, or eligible entities, as, in the 

12 judgment of the Secretary, are necessary or proper to ef13 fectuate the purposes of this title, to prevent circumven14 tion or evasion of this title, or to facilitate compliance with 

15 this title. 

16 SEC. 1210. EVALUATION AND REPORTS TO CONGRESS. 

17 For each fiscal year in which a program or project 

18 is carried out under this Title, the Secretary shall submit 

19 a report to the Committee on Banking, Housing, and 

20 Urban Affairs of the Senate and the Committee on Finan21 cial Services of the House of Representatives containing 

22 a description of the activities funded, amounts distributed, 

23 and measurable results, as appropriate and available. 


sroberts on DSKH9S0YB1PROD with BILLS
Amendment No. 3739 

S. 3217 


sroberts on DSKH9S0YB1PROD with BILLS