‘‘(ii) the total regulatory capital of the 
United States operations of the financial 
company; and 
‘‘(C) with respect to an insurance company 
or other nonbank financial company supervised 
by the Board, such assets of the company as 
the Board shall specify, by rule, in order to pro-
vide for consistent and equitable treatment of 
such companies.’’; and 
(2) by striking subsections (b) through (e) and 
inserting the following: 
‘‘(b) CONCENTRATION LIMIT.—A financial company 
may not hold more than 10 percent of the total consoli-
dated liabilities of all financial companies. 
‘‘(c) REQUIRED DISPOSITION.—The Board shall re-
quire any financial company having liabilities in violation 
of this section to sell or otherwise transfer liabilities to 
unaffiliated firms to bring the company into compliance 
with this section. 
‘‘(d) RULEMAKING
AND GUIDANCE.—The Board 
shall issue regulations implementing this section, including 
the definition of terms, as necessary. The Board may issue 
interpretations or guidance regarding the application of 
this section to an individual financial company or to finan-
cial companies in general.’’. 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
SEC. 4. LEVERAGE RATIO AND SIZE REQUIREMENTS FOR 
BANK HOLDING COMPANIES. 
The Bank Holding Company Act of 1956 (12 U.S.C. 
1841 et seq.) is amended by inserting after section 5 the 
following: 
‘‘SEC. 5A. LIMITS ON LEVERAGE AND SIZE. 
‘‘(a) LEVERAGE RATIO REQUIREMENTS FOR BANK 
HOLDING COMPANIES AND FINANCIAL COMPANIES.— 
‘‘(1) LEVERAGE RATIO.— 
‘‘(A) IN GENERAL.—No bank holding com-
pany with total consolidated assets equal to or 
greater than $50,000,000,000 or nonbank fi-
nancial company supervised by the Board may 
maintain tangible common equity in an amount 
less than 10 percent of average total consoli-
dated assets. 
‘‘(B) AVERAGE TOTAL CONSOLIDATED AS-
SETS.—For purposes of this paragraph, average 
total consolidated assets shall include all off- 
balance-sheet assets, including financings of as-
sets for which the issuer has more than mini-
mal economic or reputational risks or rewards. 
‘‘(2) EXEMPTIONS.— 
‘‘(A) IN GENERAL.—The Board may ad-
just the leverage ratio requirements provided in 
paragraph (1) for any class of institutions, 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
based upon the size or activity of such class of 
institutions. No adjustment made under this 
subparagraph may allow an institution to carry 
less tangible common equity than provided in 
paragraph (1). 
‘‘(B) 
AUTHORITY
OF
OTHER
REGU-
LATORS.— 
‘‘(i) IN
GENERAL.—The appropriate 
Federal regulator may, in a manner con-
sistent with this subsection, grant any 
bank holding company an emergency tem-
porary exemption from the ratio require-
ments provided in paragraph (1) or (2), 
where necessary to prevent an imminent 
threat to the financial stability of the 
United States. 
‘‘(ii) PUBLICATION
REQUIRED.—Any 
exemption granted under this subpara-
graph shall be published in the Federal 
Register within a reasonable period after 
the date on which such exemption is grant-
ed, not to exceed 90 days, and such publi-
cation shall provide— 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
‘‘(I) the name of the bank hold-
ing company or financial company 
being granted an exemption; 
‘‘(II) the reason for the exemp-
tion; and 
‘‘(III) the plan of the appropriate 
Federal regulator detailing the man-
ner by which the bank holding com-
pany shall be brought into compliance 
with paragraphs (1) and (2). 
‘‘(3) LEVERAGE RATIO REQUIREMENTS FOR OP-
ERATING SUBSIDIARIES OF BANK HOLDING COMPA-
NIES AND NONBANK FINANCIAL COMPANIES SUPER-
VISED BY THE BOARD.—For bank holding compa-
nies with total consolidated assets equal to or great-
er than $50,000,000,000 and nonbank financial 
companies supervised by the Board, the Board may 
promulgate regulations establishing a leverage ratio, 
in a manner consistent with paragraph (1), for all 
operating subsidiaries that are not insured deposi-
tory institutions. 
‘‘(4) PROMPT CORRECTIVE ACTION.— 
‘‘(A) AUTHORITIES.—The Board shall re-
quire any bank holding company with total con-
solidated assets equal to or greater than 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
$50,000,000,000 or nonbank financial company 
supervised by the Board that is in violation of 
paragraph (1) to raise capital, sell or otherwise 
transfer assets, liabilities, or off-balance-sheet 
items to unaffiliated firms, or impose conditions 
on the manner in which the bank holding com-
pany conducts 1 or more activities to bring the 
company into compliance with paragraph (1). 
‘‘(B) CORRECTIVE
ACTION
PLAN.—The 
Board shall, not later than 60 days after deter-
mining that a bank holding company or finan-
cial company is in violation of paragraph (1), 
present to the members of the Committee on 
Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Serv-
ices of the House of Representatives a plan de-
tailing the manner by which the bank holding 
company or financial company shall be brought 
into compliance with the applicable provision of 
law. 
‘‘(C) REPORTS TO CONGRESS.— 
‘‘(i) WRITTEN REPORTS.—The Board 
shall provide to the members of the Com-
mittee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
on Financial Services of the House of Rep-
resentatives periodic reports for each 60- 
day period during which a corrective action 
plan required by subparagraph (B) has not 
been fulfilled. 
‘‘(ii) TESTIMONY.—The Board shall 
provide testimony to the Committee on 
Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Finan-
cial Services of the House of Representa-
tives for each 90-day period that a correc-
tive action plan required by subparagraph 
(B) has not been fulfilled. 
‘‘(b) LIMITS
ON
NONDEPOSIT
LIABILITIES
FOR 
BANK HOLDING COMPANIES AND NONBANK FINANCIAL 
COMPANIES SUPERVISED BY THE BOARD.— 
‘‘(1) BANK HOLDING COMPANIES.— 
‘‘(A) LIMIT ON NONDEPOSIT LIABILITIES 
FOR
BANK
HOLDING
COMPANIES.—No bank 
holding company may possess nondeposit liabil-
ities exceeding 2 percent of the annual gross 
domestic product of the United States. 
‘‘(B) DETERMINATION OF GROSS DOMES-
TIC
PRODUCT.—The annual gross domestic 
product of the United States shall be deter-
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
mined for purposes of subparagraph (A) using 
the average of such product over the 16 cal-
endar quarters, as calculated by the Bureau of 
Economic Analysis of the Department of Com-
merce, most recently completed as of the time 
of the determination. 
‘‘(C) OFF-BALANCE-SHEET LIABILITIES.— 
The computation of the limit under this para-
graph shall take into account off-balance-sheet 
liabilities, including any liabilities used to fi-
nance assets for which the issuer has more than 
minimal economic or reputational risks or re-
wards. 
‘‘(D) TREATMENT OF INSURANCE COMPA-
NIES.—Notwithstanding the liability limit es-
tablished in this section, the Board may set a 
separate liability limit with respect to certain 
bank holding companies primarily engaged in 
the business of insurance, as the Board deems 
necessary in order to provide for consistent and 
equitable treatment of such institutions. In es-
tablishing such separate liability limits for in-
surance companies, for any insurance company 
with any subsidiary regulated by a State insur-
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
ance regulator, the Board shall consult the ap-
propriate State insurance regulator. 
‘‘(E) TREATMENT
OF
FOREIGN
DEPOS-
ITS.—Notwithstanding the definition of the 
term ‘nondeposit liabilities’ established in this 
section, the Board may exclude from its calcula-
tion of nondeposit liabilities any foreign and 
other deposits not covered by the definition of 
the term ‘FDIC-assessed deposits’, if the Board 
deems such action necessary to ensure the con-
sistent and equitable treatment of institutions 
with international operations. 
‘‘(2) NONBANK FINANCIAL COMPANIES SUPER-
VISED BY THE BOARD.— 
‘‘(A) LIMIT ON NONDEPOSIT LIABILITIES 
FOR NONBANK FINANCIAL COMPANIES SUPER-
VISED BY THE BOARD.—No nonbank financial 
company supervised by the Board may possess 
nondeposit liabilities exceeding 3 percent of the 
annual gross domestic product of the United 
States. 
‘‘(B) DETERMINATION OF GROSS DOMES-
TIC
PRODUCT.—The annual gross domestic 
product of the United States shall be deter-
mined for purposes of subparagraph (A) using 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
the average of such product over the 16 cal-
endar quarters, as calculated by the Bureau of 
Economic Analysis of the Department of Com-
merce, most recently completed as of the time 
of the determination. 
‘‘(C) OFF-BALANCE-SHEET LIABILITIES.— 
The computation of the limit under this para-
graph shall take into account off-balance-sheet 
liabilities, including any liabilities used to fi-
nance assets for which the issuer has more than 
minimal economic or reputational risks or re-
wards. 
‘‘(D) TREATMENT OF INSURANCE COMPA-
NIES.—Notwithstanding the liability limit es-
tablished by this paragraph, the Board may set 
a separate liability limit with respect to insur-
ance companies or other financial companies, as 
the Board determines necessary in order to pro-
vide for consistent and equitable treatment of 
such institutions. In establishing such separate 
liability limits for insurance companies, for any 
insurance company with any subsidiary regu-
lated by a State insurance regulator, the Board 
shall consult with the appropriate State insur-
ance regulator. 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
‘‘(E) TREATMENT
OF
FOREIGN
DEPOS-
ITS.—Notwithstanding the definition of the 
term ‘nondeposit liabilities’ established in this 
section, the Board may exclude from its calcula-
tion of nondeposit liabilities any foreign and 
other deposits not covered by the definition of 
the term ‘FDIC-assessed deposits’, if the Board 
deems such action necessary to ensure the con-
sistent and equitable treatment of institutions 
with international operations. 
‘‘(3) PROMPT CORRECTIVE ACTION.— 
‘‘(A) AUTHORITIES.—The Board shall re-
quire any bank holding company or financial 
company that is in violation of a provision of 
paragraph (1) or (2), as applicable, to sell or 
otherwise transfer assets, liabilities or off-bal-
ance-sheet items to unaffiliated firms, to termi-
nate 1 or more activities, or to impose condi-
tions on the manner in which the bank holding 
company or financial company conducts 1 or 
more activities to bring the company into com-
pliance with paragraphs (1) or (2), as applica-
ble. 
‘‘(B) CORRECTIVE
ACTION
PLAN.—The 
Board shall, not later than 60 days after deter-
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
mining that a bank holding company or finan-
cial company is in violation of paragraph (1) or 
(2), present to the members of the Committee 
on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Serv-
ices of the House of Representatives a plan de-
tailing the manner by which the bank holding 
company or financial company shall be brought 
into compliance with the applicable provision. 
‘‘(C) REPORTS TO CONGRESS.— 
‘‘(i) WRITTEN REPORTS.—The Board 
shall provide to the members of the Com-
mittee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee 
on Financial Services of the House of Rep-
resentatives periodic reports for each 60- 
day period during which a corrective action 
plan required by subparagraph (B) has not 
been fulfilled. 
‘‘(ii) TESTIMONY.—The Board shall 
provide testimony to the Committee on 
Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Finan-
cial Services of the House of Representa-
tives for each 120-day period during which 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
a corrective action plan required by sub-
paragraph (B) has not been fulfilled. 
‘‘(c) DEFINITIONS.—As used in this section— 
‘‘(1) the term ‘appropriate Federal regulator’ 
means— 
‘‘(A) the Board of Governors of the Fed-
eral Reserve System (in this Act referred to as 
the ‘Board’); 
‘‘(B) the Comptroller General of the 
United States (in this Act referred to as the 
‘Comptroller’; or 
‘‘(C) the Federal Deposit Insurance Cor-
poration (in this Act referred to as the ‘Cor-
poration’); 
‘‘(2) the term ‘average total consolidated assets’ 
has the same meaning as in part 225 of title 12, 
Code of Federal Regulations, as in effect on the date 
of enactment of this Act, or any successor thereto; 
‘‘(3) the term ‘FDIC-assessed deposits’ means 
the assessment base, as computed under part 327 of 
title 12, Code of Federal Regulations, as in effect on 
the date of enactment of this Act, or any successor 
thereto; 
‘‘(4) the term ‘liabilities’ equals a financial com-
pany’s total assets less tier 1 capital; 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
‘‘(8) the term ‘nonbank financial company’ 
means a U.S. nonbank financial company and a for-
eign nonbank financial company; 
‘‘(9) the term ‘tangible common equity’ means 
qualifying common stockholders’ equity plus retained 
earnings; and 
‘‘(10) the term ‘tier 1 capital’ has the same 
meaning as in part 225 of title 12, Code of Federal 
Regulations, as in effect on the date of enactment of 
this section, or any successor thereto.’’. 
SEC. 5. EFFECTIVE DATE. 
(a) IN GENERAL.—This Act and the amendments 
made by this Act shall take effect upon the date of enact-
ment of this Act. 
(b) ALLOWANCE FOR BANK HOLDING COMPANIES 
AND FINANCIAL COMPANIES NOT IN COMPLIANCE AT 
DATE OF ENACTMENT.—Any institution that is in viola-
tion of— 
(1) the deposit concentration limit in section 
3(d)(2)(A) of the Bank Holding Act of 1956, as 
amended by this Act, as of the date of enactment of 
this Act, shall bring itself into compliance with that 
limit not later than 1 year after the date of enact-
ment of this Act; 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS
(2) the concentration limit in section 14 of the 
Bank Holding Company Act of 1956, as amended by 
this Act, as of the date of enactment of this Act, 
shall bring itself into compliance with that limit not 
later than 1 year after the date of enactment of this 
Act; 
(3) the leverage ratios in section 5A of the 
Bank Holding Act of 1956, as amended by this Act, 
as of the date of enactment of this Act, shall bring 
itself into compliance with those ratios, not later 
than 1 year after the date of enactment of this Act; 
and 
(4) the limits on nondeposit liabilities in section 
7A of the Bank Holding Company Act of 1956, as 
added by this Act, as of the date of enactment of 
this Act, shall bring itself into compliance with those 
limits, not later than 3 years after the date of enact-
ment of this Act. 
Æ 
VerDate Mar 15 2010 
01:09 May 13, 2012
Jkt 019200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6301
E:\BILLS\H5714.IH
H5714
tjames on DSK6SPTVN1PROD with BILLS