I 
115TH CONGRESS 
2D SESSION 
H. R. 7383 
To break up large financial entities. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 20, 2018 
Mr. SHERMAN introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To break up large financial entities. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Too Big To Fail, Too 
Big To Exist Act’’. 
SEC. 2. TOO BIG TO FAIL, TOO BIG TO EXIST. 
(a) DEFINITIONS.—In this section— 
(1) the term ‘‘covered entity’’— 
(A) means a financial institution, as de-
fined in section 803 of the Payment, Clearing, 
and Settlement Supervision Act of 2010 (12 
U.S.C. 5462); and 
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(B) does not include— 
(i) a Farm Credit System institution 
chartered under and subject to the provi-
sions of the Farm Credit Act of 1971 (12 
U.S.C. 2001 et seq.); 
(ii) a governmental entity; or 
(iii) a regulated entity, as defined in 
section 1303 of the Federal Housing En-
terprises Financial Safety and Soundness 
Act of 1992 (12 U.S.C. 4502); and 
(2) the term ‘‘gross domestic product’’ means 
gross domestic product as calculated by the Bureau 
of Economic Analysis of the Department of Com-
merce. 
(b) LIMITATIONS.— 
(1) IN GENERAL.— 
(A) IN GENERAL.—On February 1, May 1, 
August 1, and November 1 of each year, no 
covered entity may be a ‘‘Too Big To Exist In-
stitution’’. 
(B) ENTITIES
REQUIRED
TO
FILE
FED-
ERAL
RESERVE
SYSTEMIC
RISK
PROFILE 
FORM.—If, on February 1, May 1, August 1, or 
November 1 of any year, a covered entity has 
a total exposure, as reported by the covered en-
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tity on the Federal Reserve form required to 
monitor the systemic risk profile of financial in-
stitutions for the previous reporting period, 
equal to or greater than 3 percent of the most 
recent estimate for annual gross domestic prod-
uct of the United States (in current dollars) for 
the previous calendar year, the Financial Sta-
bility Oversight Council may designate such 
covered entity as a ‘‘Too Big To Exist Institu-
tion’’. 
(C) OTHER REPORTING.— 
(i) IN GENERAL.—If a covered entity 
is not required to complete the Federal Re-
serve form required to monitor the sys-
temic risk profile of financial institutions, 
the Financial Stability Oversight Council 
shall design and assign a quarterly report-
ing form as appropriate for each covered 
entity with total assets greater than 
$50,000,000,000 that reflects the total li-
ability to U.S. persons of the financial in-
stitution, within 18 months of the date of 
enactment of this Act. 
(ii) 
DESIGNATION
OF
COMPANIES 
WITH TOTAL LIABILITY TO U.S. PERSONS 
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BETWEEN 3 TO 4 PERCENT OF GDP.—If, 
on February 1, May 1, August 1, or No-
vember 1 of any year, a covered entity de-
scribed under clause (i) has a total liability 
to U.S. persons, as reported by the covered 
entity on the form described under clause 
(i), equal to or greater than 3 percent but 
less than 4 percent of the most recent esti-
mate for annual gross domestic product of 
the United States (in current dollars) for 
the previous calendar year, the Financial 
Stability Oversight Council may designate 
such covered entity as a ‘‘Too Big To 
Exist Institution’’, if the Council deter-
mines such designation is appropriate. 
(iii) DESIGNATION
OF
COMPANIES 
WITH TOTAL LIABILITY TO U.S. PERSONS 
OVER 4 PERCENT OF GDP.—If, on Feb-
ruary 1, May 1, August 1, or November 1 
of any year, a covered entity described 
under clause (i) has a total liability to U.S. 
persons, as reported by the covered entity 
on the form described under clause (i), 
greater than 4 percent of the most recent 
estimate for annual gross domestic product 
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of the United States (in current dollars) 
for the previous calendar year, the Finan-
cial Stability Oversight Council may des-
ignate such covered entity as a ‘‘Too Big 
To Exist Institution’’, if the Council deter-
mines such designation is appropriate. 
(iv) 
EXEMPTIONS
WHEN
CALCU-
LATING LIABILITIES.—In calculating a cov-
ered entity’s total liability to U.S. persons 
under this subparagraph, such calculation 
shall not include— 
(I) any assets under management 
by the covered entity; and 
(II) with respect to a covered en-
tity that is an insurance company, any 
liabilities to pay out an insurance 
claim, so long as the insurance com-
pany meets all capital standards set 
by any State that regulates the insur-
ance company. 
(2) RESTRUCTURING.— 
(A) SUPERVISION.—The Vice Chair for 
Supervision of the Board of Governors of the 
Federal Reserve System, or during any period 
in which that position is vacant, the Chair of 
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the Board of Governors of the Federal Reserve 
System, shall require and supervise a ‘‘Too Big 
To Exist Institution’’ to restructure such that 
the entity is no longer a ‘‘Too Big To Exist In-
stitution’’ not later than 2 years after the date 
on which the entity was designated as a ‘‘Too 
Big To Exist Institution’’. 
(B) SUBSEQUENT REQUIREMENTS.—After 
the date on which a covered entity is required 
to restructure under subparagraph (A), the 
Vice Chair for Supervision of the Board of Gov-
ernors of the Federal Reserve System or, dur-
ing any period in which that position is vacant, 
the Chair of the Board of Governors of the 
Federal Reserve System, shall require and su-
pervise any ‘‘Too Big To Exist Institution’’ to 
restructure such that the entity is no longer a 
‘‘Too Big To Exist Institution’’ not later than 
1 year after the entity is again designated as a 
‘‘Too Big To Exist Institution’’. 
(c) PROHIBITION AGAINST USE OF FEDERAL RE-
SERVE FINANCING.—Notwithstanding any other provision 
of law (including regulations), any ‘‘Too Big To Exist In-
stitution’’ may not use or otherwise have access to ad-
vances from any Federal Reserve credit facility, the Fed-
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eral Reserve discount window, or any other program or 
facility made available under the Federal Reserve Act (12 
U.S.C. 221 et seq.), including any asset purchases, tem-
porary or bridge loans, government investments in debt 
or equity, or capital injections from any Federal institu-
tion. 
(d) PROHIBITION ON USE OF INSURED DEPOSITS.— 
(1) IN GENERAL.—Any ‘‘Too Big To Exist In-
stitution’’ that is an insured depository institution, 
or owns such an institution, may not use any in-
sured deposit amounts to fund— 
(A) any activity relating to hedging that is 
not directly related to commercial banking ac-
tivity at the insured bank; 
(B) any creation or use of derivatives for 
speculative purposes; 
(C) any activity related to the dealing of 
derivatives; 
(D) any creation of, or lending against, 
new or existing forms of structured or struc-
tured derivatives products, including collatera-
lized debt obligations, collateralized loan obliga-
tions, and synthetic derivatives of collateralized 
debt obligations and collateralized loan obliga-
tions; or 
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(E) any other form of speculative activity 
that regulators specify. 
(2) RISK OF LOSS.—A ‘‘Too Big To Exist Insti-
tution’’ may not conduct any activity listed in para-
graph (1) in such a manner that— 
(A) puts insured deposits at risk; or 
(B) creates a risk of loss to the Deposit 
Insurance Fund. 
(e) REPORT; TESTIMONY.—The Vice Chair for Su-
pervision of the Board of Governors of the Federal Re-
serve System, or during any period in which that position 
is vacant, the Chair of the Board of Governors of the Fed-
eral Reserve System, and the Chair of the Financial Sta-
bility Oversight Council shall annually testify before the 
Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services of 
the House of Representatives and submit to those commit-
tees an annual report the restructuring and designation 
under subsection (b)(2). 
(f) EFFECTIVE DATE.—Subsections (c) and (d) shall 
apply to a covered entity 90 days after the date on which 
a covered entity is designated as a ‘‘Too Big To Exist 
Institution’’. 
Æ 
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