Systemic Risk Designation Improvement Act of 2015

To amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to specify when bank holding companies may be subject to certain enhanced supervision, and for other purposes. 1. Short title This Act may be cited as the Systemic Risk Designation Improvement Act of 2015 2. Table of contents The table of contents for the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 et seq. Sec. 113. Authority to require enhanced supervision and regulation of certain nonbank financial companies and certain bank holding companies. . 3. Revisions to council authority (a) Purposes and duties Section 112 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5322 , which have been the subject of a final determination under section 113 (b) Bank holding company designation Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5323 (1) by amending the heading for such section to read as follows: Authority to require enhanced supervision and regulation of certain nonbank financial companies and certain bank holding companies (2) by redesignating subsections (c), (d), (e), (f), (g), (h), and (i) as subsections (d), (e), (f), (g), (h), (i), and (j), respectively; (3) by inserting after subsection (b) the following: (c) Bank holding companies subject to enhanced supervision and prudential standards under section 165 (1) Determination The Council, on a nondelegable basis and by a vote of not fewer than 2⁄3 (2) Considerations In making a determination under paragraph (1), the Council shall use the indicator-based measurement approach established by the Basel Committee on Banking Supervision to determine systemic importance, which considers— (A) the size of the bank holding company; (B) the interconnectedness of the bank holding company; (C) the extent of readily available substitutes or financial institution infrastructure for the services of the bank holding company; (D) the global cross-jurisdictional activity of the bank holding company; and (E) the complexity of the bank holding company. (3) G SIB Notwithstanding any other provision of this subsection, a bank holding company that is designated, as of the date of enactment of this subsection, as a Global Systemically Important Bank by the Financial Stability Board shall be deemed to have been the subject of a final determination under paragraph (1). ; (4) in subsection (d), as so redesignated— (A) in paragraph (1)(A), by striking subsection (a)(2) or (b)(2) subsection (a)(2), (b)(2), or (c)(2) (B) in paragraph (4), by striking Subsections (d) through (h) Subsections (e) through (i) (5) in subsections (e), (f), (g), (h), (i), and (j)— (A) by striking subsections (a) and (b) subsections (a), (b), and (c) (B) by striking nonbank financial company bank holding company for which there has been a determination under subsection (c) or nonbank financial company (6) in subsection (g), as so redesignated, by striking subsection (e) subsection (f) (7) in subsection (h), as so redesignated, by striking subsection (a), (b), or (c) subsection (a), (b), (c), or (d) (8) in subsection (i), as so redesignated, by striking subsection (d)(2), (e)(3), or (f)(5) subsection (e)(2), (f)(3), or (g)(5) (c) Enhanced supervision Section 115 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5325 (1) in subsection (a)(1), by striking large, interconnected bank holding companies bank holding companies which have been the subject of a final determination under section 113 (2) in subsection (a)(2)— (A) in subparagraph (A), by striking ; or (B) by striking the Council may differentiate the Council may differentiate (C) by striking subparagraph (B); and (3) in subsection (b)(3), by striking subsections (a) and (b) of section 113 subsections (a), (b), and (c) of section 113 (d) Reports Section 116(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5326(a) with total consolidated assets of $50,000,000,000 or greater which has been the subject of a final determination under section 113 (e) Mitigation Section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5331 (1) in subsection (a), by striking with total consolidated assets of $50,000,000,000 or more which has been the subject of a final determination under section 113 (2) in subsection (c), by striking subsection (a) or (b) of section 113 subsection (a), (b), or (c) of section 113 (f) Office of financial research Section 155 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5345 with total consolidated assets of 50,000,000,000 or greater which have been the subject of a final determination under section 113 4. Revisions to Board authority (a) Acquisitions Section 163 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5363 with total consolidated assets equal to or greater than $50,000,000,000 which has been the subject of a final determination under section 113 (b) Management interlocks Section 164 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5364 with total consolidated assets equal to or greater than $50,000,000,000 which has been the subject of a final determination under section 113 (c) Enhanced supervision and prudential standards Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5365 (1) in subsection (a), by striking with total consolidated assets equal to or greater than $50,000,000,000 which have been the subject of a final determination under section 113 (2) in subsection (a)(2)— (A) by striking (A) In general.— (B) by striking subparagraph (B); (3) by striking subsections (a) and (b) of section 113 subsections (a), (b), and (c) of section 113 (4) in subsection (j), by striking with total consolidated assets equal to or greater than $50,000,000,000 which has been the subject of a final determination under section 113 (d) Conforming Amendment The second subsection (s) (relating to Assessments, Fees, and Other Charges for Certain Companies 12 U.S.C. 248 (1) by redesignating such subsection as subsection (t); and (2) in paragraph (2)— (A) in subparagraph (A), by striking having total consolidated assets of $50,000,000,000 or more; which have been the subject of a final determination under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; and (B) by striking subparagraph (B); and (C) by redesignating subparagraph (C) as subparagraph (B). 5. Effective date; rule of application (a) Effective date The Financial Stability Oversight Council may begin proceedings with respect to a bank holding company under section 113(c)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as added by this Act, on the date of the enactment of this Act, but may not make a final determination under such section 113(c)(1) with respect to a bank holding company before the end of the 1-year period beginning on the date of the enactment of this Act. (b) Immediate application to large bank holding companies During the 1-year period described under subsection (a), a bank holding company with total consolidated assets equal to or greater than $50,000,000,000 shall be deemed to have been the subject of a final determination under section 113(c)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. September 19, 2016 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Summary: Systemic Risk Designation Improvement Act of 2015 (Sec. 3) This bill amends the Dodd-Frank Wall Street Reform and Consumer Protection Act to authorize the Financial Stability Oversight Council (FSOC) to subject a bank holding company to enhanced supervision and prudential standards by the Board of Governors of the Federal Reserve System if the FSOC makes a final determination that material financial distress at the bank holding company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of its activities, could threaten the financial stability of the United States. This FSOC determination procedure replaces the current process under which bank holding companies with total consolidated assets of $50 billion or more are automatically subject to such enhanced supervision and prudential standards. The FSOC must make these final determinations using an indicator-based measurement approach established by the Basel Committee on Banking Supervision to determine systemic importance, which considers each bank holding company's size, interconnectedness, available substitutes, global cross-jurisdictional activity, and complexity. A bank holding company designated, as of this bill's enactment, as a Global Systemically Important Bank (GSIB) by the Financial Stability Board shall be deemed to have been the subject of a final determination that it could pose a threat to U.S. financial stability, thereby making these GSIBs subject to enhanced supervision. (Sec. 4) The bill revises the Federal Reserve Board's authority over bank holding company acquisition restrictions, prohibitions on interlocks between management of different financial companies, and enhanced supervision and prudential standards to make these requirements subject to FSOC's determination instead of operating automatically when a bank meets a $50 billion threshold. (Sec. 5) The FSOC is prohibited from making a final determination concerning a bank holding company under this bill before one year after its enactment. A bank holding company shall be deemed to have been the subject of such a final determination during this one-year period, however, if its total consolidated assets are $50 billion or more.