I 
115TH CONGRESS 
1ST SESSION H. R. 3937 
To require the Federal prudential banking agencies to determine whether 
certain institutions they regulate engage in a pattern or practice of 
violations of Federal banking and consumer protection laws and regula-
tions, to provide for the revocation of banking charters and Federal 
deposit insurance for such institutions, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 4, 2017 
Ms. MAXINE WATERS of California (for herself, Mr. CAPUANO, Mr. ELLISON, 
Mr. AL GREEN of Texas, Ms. KAPTUR, Ms. JAYAPAL, Mr. SARBANES, 
Mr. RASKIN, and Ms. SCHAKOWSKY) introduced the following bill; which 
was referred to the Committee on Financial Services 
A BILL 
To require the Federal prudential banking agencies to deter-
mine whether certain institutions they regulate engage 
in a pattern or practice of violations of Federal banking 
and consumer protection laws and regulations, to provide 
for the revocation of banking charters and Federal de-
posit insurance for such institutions, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Megabank Account-
ability and Consequences Act of 2017’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) The Federal prudential banking agencies 
and the Bureau of Consumer Financial Protection 
(‘‘Consumer Bureau’’) are tasked with the responsi-
bility for overseeing United States banking organiza-
tions and foreign banks operating in the United 
States. Prior to the enactment of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act in 
2010 (‘‘Dodd-Frank Act’’) and the existence of the 
Consumer Bureau, the Federal prudential banking 
agencies were responsible for supervising banks for 
safety and soundness and compliance with Federal 
consumer financial laws. 
(2) Following the 2007–2009 financial crisis, 
Congress conducted a series of hearings and con-
cluded that in the years leading up to the crisis, the 
Federal prudential banking agencies were not ade-
quately utilizing their rulemaking and supervisory 
functions, nor enforcing Federal consumer financial 
laws appropriately, which led to widespread con-
sumer abuses that in turn contributed to the crisis 
and led to the near collapse of the United States 
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banking system. To the extent Federal prudential 
banking agencies took action to enforce consumer 
protection laws, their actions were extremely limited 
and focused on small banks even though the major-
ity of consumer complaints were tied to the largest 
banks. In order to better protect consumers from 
many of the predatory acts and practices within the 
consumer financial marketplace that contributed to 
the financial crisis, and to restore integrity to the 
country’s financial system, Congress enacted the 
Consumer 
Financial 
Protection 
Act 
of 
2010 
(‘‘CFPA’’), under title X of the Dodd-Frank Act. 
The CFPA established the Consumer Bureau to reg-
ulate the offering and provision of consumer finan-
cial products or services under the Federal consumer 
financial law for certain covered entities. The Con-
sumer Bureau’s enforcement powers with respect to 
very large banking organizations include investiga-
tive authority and the ability to— 
(A) conduct hearings and adjudication pro-
ceedings; 
(B) commence civil action lawsuits and 
make referrals to the U.S. Attorney General for 
criminal proceedings; 
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(C) issue consent orders, under which res-
titution, refunds, rescission or reformation of 
contracts, or claw-back of compensation, is re-
quired; and 
(D) impose civil money penalties. 
(3) In the years since Congress enacted the 
Dodd-Frank Act, some very large banking organiza-
tions operating in the United States have repeatedly 
violated Federal banking and consumer protection 
laws by engaging in unethical business practices, 
which have enabled them to maximize profits for 
shareholders at the expense of the interest of the 
public. Enforcement actions have been taken, most 
notably by the Consumer Bureau, but these banks 
continue to act with impunity and violate numerous 
laws designed to protect consumers. 
(4) Senior bank executives, including the chief 
executive officer, board of directors and other senior 
officers at the largest banking organizations have 
rarely been held personally accountable for Federal 
consumer protection law violations and other illicit 
practices that occurred during their tenure. In a re-
port to Congress from the Office of the Special In-
spector General for the Troubled Asset Relief Pro-
gram (‘‘SIGTARP’’), the SIGTARP wrote in 2016: 
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‘‘The American people have called for stronger re-
forms on Wall Street, frustrated by the lack of sen-
ior executive accountability at the largest banks. I 
have called for Wall Street reform based on the dif-
ficulties SIGTARP has faced as a law enforcement 
agency in proving criminal intent of senior execu-
tives at large institutions given how isolated they are 
from knowledge of fraud in their company. This iso-
lation is part of the culture at large institutions, and 
is something that is unlikely to change absent re-
form.’’. 
(5) The Consumer Bureau has taken strides in 
fulfilling its statutory objectives and mission to en-
sure that all consumers have access to markets for 
consumer financial products and services and that 
these markets are fair, transparent, and competitive. 
Yet, unlike the broad authority of Federal prudential 
banking regulators over entire operations of its regu-
lated entities, the scope of and applicability of the 
Consumer Bureau’s supervisory authority is limited. 
The Consumer Bureau, for example, does not have 
the authority to revoke a bank’s charter or termi-
nate a bank’s Federal deposit insurance, even when 
it has found a bank to have engaged in a pattern 
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of recurring and egregious violations of Federal con-
sumer financial laws and regulations. 
(6) The Federal prudential banking agencies 
are authorized to not only license, charter, and ap-
prove the operations of banking organizations, but 
also to supervise these institutions for compliance 
with Federal banking laws and regulations. Addi-
tionally, the Federal prudential banking agencies 
have indicated, and Congress agrees, that instances 
of consumer harm by a banking organization may be 
deemed an unsafe or unsound banking practice of an 
institution, warranting additional enforcement ac-
tions beyond those that have also been issued by the 
Consumer. Federal Reserve Board Chair Janet 
Yellen said in 2016, ‘‘Of course, consumer issues 
and issues that involve harm of consumers can be-
come safety and soundness issues. And if there 
was—at least one of the lessons from the financial 
crisis, I think, is that abuses of consumers of the 
sort that we see—saw in subprime lending ulti-
mately did become—become safety and soundness 
issues. And so, of course, we need to have that con-
cern, and we’ll focus there.’’. 
(7) Formal and informal enforcement authori-
ties afforded to the Federal prudential banking 
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agencies include consent orders, cease and desist or-
ders, civil money penalties, written agreements, and 
the ability to place limitations on or remove institu-
tion-affiliated parties—such as a director or officer 
of an institution—for violations of laws or regula-
tions. For the most egregious cases, when institu-
tions commit illegal acts or repeatedly fail to comply 
with laws or regulations, the Federal prudential 
banking agencies also have the authority, and duty, 
to take more serious actions, such as limit the activi-
ties or functions of a bank, permanently bar culpable 
bank officials from working again in the banking in-
dustry, terminate Federal deposit insurance for a 
bank, appoint a receiver to unwind the bank or re-
voke the bank’s national charter. 
(8) Despite these important statutory powers, 
the Federal prudential banking agencies continue to 
rely on enforcement tools such as consent orders, 
cease and desist orders, and civil money penalties, 
even in instances when an institution’s violations 
have demonstrated unsafe or unsound business prac-
tices and past supervisory and enforcement actions 
have not sufficiently deterred illegal practices. 
(9) The failure of the Federal prudential bank-
ing agencies to exercise statutorily provided enforce-
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ment authorities—such as revoking a bank’s na-
tional charter or terminating its Federal deposit in-
surance—on institutions that have demonstrated a 
pattern or practice of unsafe or unsound banking 
practices related to repeat violations of Federal con-
sumer financial laws or regulations, has resulted in 
insufficient regulatory oversight that has allowed in-
stitutions to continue to engage in inappropriate and 
illegal business practices harming millions of con-
sumers. 
(10) Unlike small community banks that serve 
consumers in their local communities, megabanks 
(as identified as global systemically important bank 
holding companies) are comparatively extremely 
large and serve millions of consumers. Whereas Fed-
eral prudential banking agencies have demonstrated 
an ability to take enforcement actions against small 
community banks, including for violations of Federal 
consumer financial law, the same has not been dem-
onstrated to be true of megabanks. While the Dodd- 
Frank Act established a regulatory framework that 
has made significant progress in leveling the playing 
field between large and small banks, including with 
respect to how the Consumer Bureau’s authorities 
were designed and how the toughest rules apply to 
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megabanks, new laws should be enacted that build 
on the Dodd-Frank Act’s tiered and tailored regu-
latory framework to mandate action in areas where 
Federal prudential banking agencies have been re-
luctant to exercise their discretion to take appro-
priate action against megabanks that repeatedly vio-
late laws and harm millions of consumers. New laws 
should also be enacted to clarify repeated violations 
of Federal consumer protection law are sufficient 
grounds to take certain enforcement actions. 
(11) To ensure market discipline and con-
fidence in the U.S. financial system, Federal pruden-
tial banking regulators should exercise all statutorily 
mandated powers, including revoking the charter or 
terminating Federal deposit insurance of any large 
banking organization that has demonstrated a pat-
tern of engaging in unsafe and unsound banking 
practices that extensively harms consumers. 
(12) Any megabank, either through its holding 
company, depository institutions, or affiliates, that 
repeatedly harms consumers or violates Federal con-
sumer financial laws or regulations, has dem-
onstrated a pattern of unsafe or unsound banking 
practices that necessitates that Federal prudential 
banking agencies immediately initiate proceedings, 
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under existing statutory authority, to revoke the its 
national charter or terminate its Federal deposit in-
surance, and place the institution into receivership 
for sale or dissolution. 
(13) Furthermore, even if a banking organiza-
tion’s violations of Federal consumer financial laws 
are deemed not to technically constitute unsafe or 
unsound banking practices, it still may demonstrate 
a pattern of wrongdoing causing unacceptable harm 
to its customers, such that continuing to enable it to 
engage in the business of banking distorts the regu-
latory purpose of providing national bank charters, 
deposit insurance and other benefits, and under-
mines the overarching mission of all Federal pruden-
tial banking agencies to protect the interest of the 
public and the needs of consumers. Federal legisla-
tion is needed, therefore, to underscore the impor-
tance that Federal prudential banking regulators 
should, after consulting with the Consumer Bureau, 
exercise all their available enforcement powers with 
respect to large banking organizations that repeat-
edly violate Federal consumer financial laws, includ-
ing authority to restrict business lines, revoke an in-
stitution’s national banking charter, terminate the 
institution’s Federal deposit insurance, and hold the 
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institution’s board of directors and senior officers 
accountable. 
SEC. 3. DEFINITIONS. 
For purposes of this Act: 
(1) 
BANKING
ORGANIZATION.—The 
term 
‘‘banking organization’’ means any bank, savings as-
sociation, bank holding company, or savings and 
loan holding company, and includes any subsidiary 
or affiliate of a bank holding company or savings 
and loan holding company. 
(2) BOARD OF GOVERNORS.—The term ‘‘Board 
of Governors’’ means the Board of Governors of the 
Federal Reserve System. 
(3) COMPTROLLER.—The term ‘‘Comptroller’’ 
means the Comptroller of the Currency. 
(4) CONSUMER BUREAU.—The term ‘‘Consumer 
Bureau’’ means the Bureau of Consumer Financial 
Protection. 
(5) CORPORATION.—The term ‘‘Corporation’’ 
means the Board of Directors of the Federal Deposit 
Insurance Corporation. 
(6) FEDERAL
CONSUMER
FINANCIAL
LAW.— 
The term ‘‘Federal consumer financial law’’ has the 
meaning given that term under section 1002 of the 
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Consumer Financial Protection Act of 2010 (12 
U.S.C. 5481). 
(7) FEDERAL CONSUMER PROTECTION LAW.— 
The term ‘‘Federal consumer protection law’’ 
means— 
(A) the Federal consumer financial law; 
(B) the Fair Housing Act; 
(C) the Federal Trade Commission Act; 
(D) section 987 of title 10, United States 
Code (commonly known as the ‘‘Military Lend-
ing Act’’); 
(E) the Servicemembers Civil Relief Act; 
and 
(F) any regulation issued under a law de-
scribed under subparagraph (A), (B), (C), (D), 
or (E). 
(8) FEDERAL
PRUDENTIAL
BANKING
AGEN-
CIES.—The term ‘‘Federal prudential banking agen-
cies’’ means the Board of Governors, the Comp-
troller, and the Corporation. 
(9) FOREIGN BANK.—The term ‘‘foreign bank’’ 
has the meaning given that term under section 1(b) 
of the International Banking Act of 1978 (12 U.S.C. 
3101(b)). 
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(10) GLOBAL SYSTEMICALLY IMPORTANT BANK 
HOLDING COMPANY.— 
(A) IN GENERAL.—The term ‘‘global sys-
temically important bank holding company’’ 
means— 
(i) a bank holding company that has 
been identified by the Board of Governors 
as a global systemically important bank 
holding company pursuant to section 
217.402 of title 12, Code of Federal Regu-
lations; and 
(ii) a global systemically important 
foreign banking organization, as defined 
under section 252.2 of title 12, Code of 
Federal Regulations. 
(B) TREATMENT OF EXISTING GSIBS.—A 
company or organization described under clause 
(i) or (ii) of subparagraph (A) on the date of 
the enactment of this Act shall be deemed a 
global systemically important bank holding com-
pany for purposes of this Act. 
(11) PATTERN OR PRACTICE OF UNSAFE OR 
UNSOUND BANKING PRACTICES AND OTHER VIOLA-
TIONS RELATED TO CONSUMER HARM.—The term 
‘‘pattern or practice of unsafe or unsound banking 
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practices and other violations related to consumer 
harm’’ means engaging in all of the following activi-
ties, to the extent each activity was discovered or oc-
curred at least once in the 10 years preceding the 
date of the enactment of this Act: 
(A) Having unsafe or unsound practices in 
the institution’s risk management and oversight 
of the institution’s sales practices, as evidenced 
by— 
(i) an institution lacking an enter-
prise-wide sales practices oversight pro-
gram that enables the institution to ade-
quately monitor sales practices to prevent 
and detect unsafe or unsound sales prac-
tices and mitigate risks that may result 
from such unsafe and unsound sales prac-
tices; and 
(ii) an institution lacking a com-
prehensive customer complaint monitoring 
process that— 
(I) enables the institution to as-
sess 
customer 
complaint 
activity 
across the bank; 
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(II) adequately monitors, man-
ages, and reports on customer com-
plaints; and 
(III) analyzes and understands 
the potential risks posed by the insti-
tution’s sales practices. 
(B) Engaging in unsafe and unsound sales 
practices, as evidenced by the institution— 
(i) opening more than one million un-
authorized deposit, credit card, or other 
accounts; 
(ii) performing unauthorized transfers 
of customer funds; and 
(iii) performing unauthorized credit 
inquiries for purposes of the conduct de-
scribed in clause (i) or (ii). 
(C) Lacking adequate oversight of third- 
party vendors for purposes of risk-mitigation, to 
prevent abusive and deceptive practices in the 
vendor’s provision of consumer products or 
services. 
(D) Having deficient policies and proce-
dures for sharing customers’ personal identifi-
able information with third-party vendors for 
litigation purposes that led to inadvertent dis-
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closure of such information to unintended par-
ties. 
(E) Violating Federal consumer financial 
laws with respect to mortgage loans, including 
charges of hidden fees and unauthorized or im-
proper disclosures tied to home mortgage loan 
modifications. 
(F) Engaging in unsafe or unsound bank-
ing practices related to residential mortgage 
loan servicing and foreclosure processing. 
(G) Violating the Servicemembers Civil Re-
lief Act. 
(12) PATTERN OR PRACTICE OF VIOLATIONS OF 
FEDERAL CONSUMER PROTECTION LAWS.— 
(A) IN GENERAL.—The term ‘‘pattern or 
practice of violations of Federal consumer pro-
tection laws’’ means— 
(i) a pattern or practice of unsafe or 
unsound banking practices and other viola-
tions related to consumer harm; and 
(ii) such other pattern or practice as 
the Director of the Consumer Bureau 
shall, in consultation with the Comptroller, 
the Board of Governors, and the Corpora-
tion, establish by regulation. 
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(B) TIME PERIOD.—Eligible activities that 
may be included in any pattern or practice de-
scribed under subparagraph (A) are those that 
were discovered or occurred in the 10 years pre-
ceding any determination made under section 
101 or section 201. 
(C) RULEMAKING.—Not later than the end 
of the 1-year period beginning on the date of 
the enactment of this Act, the Director of the 
Consumer Bureau shall issue final regulations 
to carry out subparagraph (A)(ii). 
(13) STATE.—The term ‘‘State’’ means the sev-
eral States, the District of Columbia, and any other 
territory or possession of the United States. 
(14) DEFINITIONS RELATED TO SUBSIDIARIES 
AND AFFILIATES OF FOREIGN BANKS.—The terms 
‘‘agency’’, ‘‘branch’’, ‘‘commercial lending com-
pany’’, and ‘‘representative office’’ have the mean-
ings given those terms, respectively, under section 
1(b) of the International Banking Act of 1978 (12 
U.S.C. 3101(b)). 
(15) 
OTHER
BANKING
DEFINITIONS.—The 
terms ‘‘affiliate’’, ‘‘appropriate Federal banking 
agency’’, ‘‘depository institution’’, ‘‘Federal savings 
association’’, ‘‘insured depository institution’’, ‘‘na-
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tional bank’’, ‘‘savings association’’, ‘‘subsidiary’’, 
‘‘State depository institution’’, and ‘‘State member 
bank’’ have the meaning given those terms, respec-
tively, under section 3 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813). 
SEC. 4. AGENCY AUTHORITY. 
(a) IN GENERAL.—Notwithstanding any other law 
and for the sole purpose of carrying out the requirements 
of this Act, in the event that the Board of Governors or 
the Corporation lack a quorum, a majority of the members 
of the Board of Governors and a majority of the members 
of the Corporation shall have the full authority to act on 
behalf of their respective agency. 
(b) DETERMINATION OF CERTAIN VIOLATIONS.—In 
making any determination under this Act with respect to 
whether an institution has violated a Federal consumer 
protection law, if a Federal prudential banking agency 
does not have enforcement authority over the applicable 
Federal consumer protection law, the agency shall rely on 
publically available information with respect to such viola-
tions, such as criminal convictions and enforcement ac-
tions, and consult with any relevant Government depart-
ment or agency that took such actions against the institu-
tion. 
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(c) RULE OF CONSTRUCTION.—Nothing in this Act 
shall be construed to reduce or impair any existing author-
ity with respect to enforcement actions taken by an appro-
priate Federal banking agency. Furthermore, a violation 
of Federal consumer protection law or a pattern or prac-
tice of violations of Federal consumer protection laws by 
an institution shall not be deemed insufficient grounds for 
the appropriate Federal banking agency to take any en-
forcement action, including those referenced in this Act, 
it deems necessary and is otherwise authorized to take. 
TITLE I—CONGRESSIONAL MAN-
DATE TO REVIEW AND WIND 
DOWN 
MEGABANKS 
THAT 
CONTINUOUSLY ABUSE CON-
SUMERS 
AND 
REPEATEDLY 
VIOLATE THE LAW 
SEC. 101. INITIATE PROCEEDINGS TO REVOKE CHARTER. 
(a) IN GENERAL.— 
(1) REVOCATION
OF
CHARTER.—The Comp-
troller shall review and determine, after consulting 
with the Director of the Consumer Bureau, within 
90 days of enactment of this Act whether a national 
bank or Federal savings association affiliated with a 
global systemically important bank holding company, 
or the branch, representative office, or agency of a 
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foreign bank that is federally licensed and affiliated 
with a global systemically important bank holding 
company, is engaging or has engaged in a pattern or 
practice of unsafe or unsound banking practices and 
other violations related to consumer harm. Not later 
than 120 days after the date of enactment of this 
Act, the Comptroller shall provide written notice to 
the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate describing 
the review, listing any identified institution with a 
detailed basis for the determination, and, subject to 
subsection (d), immediately initiate proceedings to 
terminate the Federal charter of any such institution 
or appoint a receiver for any such institution, pursu-
ant to title LXII of the Revised Statutes of the 
United States, the National Bank Receivership Act 
(12 U.S.C. 191 et seq.), or the Home Owners’ Loan 
Act (12 U.S.C. 1461 et seq.). 
(2) TERMINATION
OF
FEDERAL
DEPOSIT
IN-
SURANCE.—The Corporation shall review and deter-
mine, after consulting with the Director of the Con-
sumer Bureau, within 90 days of enactment of this 
Act, whether an insured depository institution affili-
ated with a global systemically important bank hold-
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ing company has engaged or is engaging in a pat-
tern or practice of unsafe or unsound banking prac-
tices and other violations related to consumer harm. 
Not later than 120 days after the date of enactment 
of this Act, the Corporation shall provide written no-
tice to the Committee on Financial Services of the 
House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate 
describing the review, listing any identified institu-
tion with a detailed basis for the determination and, 
subject to subsection (d), immediately initiate an in-
voluntary termination of the deposit insurance of the 
depository institution under and subject to the pro-
cedures set forth in section 8(a) of the Federal De-
posit Insurance Act (12 U.S.C. 1818(a)). 
(3) TERMINATION OF FEDERAL RESERVE MEM-
BERSHIP OF A STATE MEMBER BANK.—The Board 
of Governors shall review and determine, after con-
sulting with the Director of the Consumer Bureau, 
within 90 days of enactment of this Act, whether a 
State member bank affiliated with a global system-
ically important bank holding company is engaging 
or has engaged in a pattern or practice of unsafe or 
unsound banking practices and other violations re-
lated to consumer harm. Not later than 120 days 
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after the date of enactment of this Act, the Board 
of Governors shall provide written notice to the 
Committee on Financial Services of the House of 
Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate describing 
the review, listing any identified institution with a 
detailed basis for the determination and, subject to 
subsection (d), immediately initiate proceedings to 
terminate such bank’s membership in the Federal 
Reserve System pursuant to the Federal Reserve Act 
(12 U.S.C. 221 et seq.). 
(4) TERMINATION OF U.S. ACTIVITIES BY FOR-
EIGN BANK.—The Board of Governors shall review 
and determine, after consulting with the Director of 
the Consumer Bureau, within 90 days of enactment 
of this Act whether— 
(A) a foreign bank affiliated with a global 
systemically important bank holding company 
that has a State-licensed branch, agency, com-
mercial lending company, or representative of-
fice is engaging or has engaged in a pattern or 
practice of unsafe or unsound banking practices 
and other violations related to consumer harm. 
Not later than 120 days after the date of enact-
ment of this Act, the Board of Governors shall 
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provide written notice to the Committee on Fi-
nancial Services of the House of Representa-
tives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate describing the 
review, listing any identified foreign bank with 
a detailed basis for the determination and, sub-
ject to subsection (d), immediately initiate pro-
ceedings to terminate the foreign bank’s ability 
to operate in the United States pursuant to sec-
tion 7(e) of the International Banking Act of 
1978 (12 U.S.C. 3105(e)); or 
(B) a Federal branch or Federal agency of 
a foreign bank affiliated with a global system-
ically important bank holding company that is 
engaging or has engaged in a pattern or prac-
tice of unsafe or unsound banking practices and 
other violations related to consumer harm. Not 
later than 120 days after the date of enactment 
of this Act, the Board of Governors shall pro-
vide written notice to the Committee on Finan-
cial Services of the House of Representatives 
and the Committee on Banking, Housing, and 
Urban Affairs of the Senate describing the re-
view, listing any identified institution with a de-
tailed basis for the determination and transmit 
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within 24 hours to the Comptroller a rec-
ommendation that the license of the Federal 
branch or Federal agency be terminated pursu-
ant to section 4(i) of the International Banking 
Act of 1978 (12 U.S.C. 3102(i)). 
(b) MANDATORY TESTIMONY.—The Federal pruden-
tial banking agencies shall testify before the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate regarding the review required by this section 
no later than 180 days after the date of enactment of this 
Act. 
(c) COORDINATED AND UNIMPEDED ACTION.—Each 
Federal prudential banking agency shall coordinate and 
share all relevant information with other Federal pruden-
tial banking agencies in carrying out this section. To the 
extent the same institution is identified by multiple Fed-
eral prudential banking agencies under this section, the 
appropriate Federal banking agency shall not delay or oth-
erwise cease taking any action required by this Act with 
respect to the institution. 
(d) JUDICIAL REVIEW.—A determination by the 
Comptroller, the Board of Governors, or the Corporation 
under subsection (a) shall be subject to review by a Fed-
eral district court of competent jurisdiction under the pro-
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cedures provided for under section 8(h) of the Federal De-
posit Insurance Act (12 U.S.C. 1818(h)). 
(e) REMOVAL OF DIRECTORS AND SENIOR OFFI-
CERS.—If the Comptroller, the Board of Governors, or the 
Corporation, as applicable, makes a determination to ini-
tiate proceedings to terminate a Federal charter for a na-
tional bank, Federal savings association, or branch, agen-
cy, commercial lending company, or representative office 
of a foreign bank under this section, or makes a deter-
mination to initiate an involuntary termination of the de-
posit insurance, the Comptroller, the Board the Gov-
ernors, or the Corporation, as applicable, shall notify the 
institution that removal is required of any director or sen-
ior officers responsible, as determined by the appropriate 
Federal banking agency, for overseeing any division of the 
institution during the time that the institution was engag-
ing in the identified pattern or practice of unsafe or un-
sound banking practices, pursuant to section 8(e) of the 
Federal Deposit Insurance Act (12 U.S.C. 1818(e)). Any 
current and former directors and senior officers deter-
mined responsible by the appropriate Federal banking 
agency for overseeing any division of an institution during 
the time that the institution was found to be engaging in 
the pattern or practice of unsafe or unsound banking prac-
tices under this title shall also be permanently banned 
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from working as an employee, officer, or director of any 
other banking organization, pursuant to section 8(e) of the 
Federal Deposit Insurance Act (12 U.S.C. 1818(e)). 
SEC. 102. RECEIVERSHIP AND LIMITATION ON TRANSFER 
OF ASSETS. 
(a) NOTICE TO FDIC.—The Comptroller and the 
Board of Governors shall notify within 24 hours the Cor-
poration of any determination made under section 101. 
(b) TERMINATION OF FEDERAL DEPOSIT INSURANCE 
BASED ON REVOCATION OF FEDERAL BANKING CHAR-
TER.—For any insured depository institution identified by 
the Corporation under section 101, or upon being notified 
of the termination of a national bank or Federal savings 
association’s Federal charter or termination of a Federal 
license for an insured branch or agency of a bank under 
subsection (a), the Corporation shall— 
(1) initiate an involuntary termination of the 
deposit insurance of the institution under section 8 
of the Federal Deposit Insurance Act (12 U.S.C. 
1818); and 
(2) place the institution into receivership, with 
the Corporation acting as the receiver, pursuant to 
the procedures provided under section 11(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(c)). 
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(c) LIMITATION ON TRANSFER OF ASSETS.—In its 
capacity as receiver of a national bank, Federal savings 
association, or branch, agency, commercial lending com-
pany, or representative office of a foreign bank under this 
section, the Corporation may transfer any assets of the 
institution only to banking organizations that were as-
signed a rating of ‘‘satisfactory record of meeting commu-
nity credit needs’’ or better for complying with the Com-
munity Reinvestment Act of 1977 in their most recent 
evaluation, and may not transfer any assets of the institu-
tion to either— 
(1) a global systemically important bank hold-
ing company, or any subsidiary of such a bank hold-
ing company; or 
(2) a banking organization that has exhibited 
substantial noncompliance with Federal consumer 
protection laws as evidenced by any public enforce-
ment actions, targeted supervisory exams, or a rat-
ing of less than ‘‘satisfactory’’ on its most recent 
consumer compliance examination. 
(d) CONSULTATION.—When acting in the capacity of 
a receiver pursuant to subsection (b), the Corporation 
shall consult with the Office of Minority and Women In-
clusion of the Corporation. 
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TITLE II—CLARIFYING FEDERAL 
CHARTERS MUST BE TERMI-
NATED 
FOR 
INSTITUTIONS 
THAT ENGAGE IN A PATTERN 
OR PRACTICE OF VIOLATIONS 
OF 
FEDERAL 
CONSUMER 
PROTECTION LAWS OR REGU-
LATIONS 
SEC. 201. PATTERN OR PRACTICE OF VIOLATIONS OF FED-
ERAL CONSUMER PROTECTION LAWS. 
(a) DETERMINATION.— 
(1) COMPTROLLER.—The Comptroller shall reg-
ularly review and determine, in consultation with the 
Director of the Consumer Bureau, whether a na-
tional bank or Federal savings association affiliated 
with a global systemically important bank holding 
company, or a federally licensed branch, agency, 
commercial lending company, or representative office 
of any foreign bank affiliated with a global system-
ically important bank holding company is dem-
onstrating a pattern or practice of violations of Fed-
eral consumer protection laws. Upon such a deter-
mination, the Comptroller shall provide a written, 
confidential notice within 7 days to the other Fed-
eral prudential banking agencies, Committee on Fi-
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nancial Services of the House of Representatives, 
and the Committee on Banking, Housing, and 
Urban Affairs of the Senate describing the review 
and any identified institution and, in consultation 
with the Director of the Consumer Bureau, imme-
diately initiate additional enforcement actions or 
proceedings to either appoint a receiver or terminate 
the Federal charter of such institution, pursuant to 
subsection (c). 
(2) BOARD
OF
GOVERNORS.—The Board of 
Governors shall regularly review and determine, in 
consultation with the Director of the Consumer Bu-
reau, whether a State member bank affiliated with 
a global systemically important bank holding com-
pany or State-chartered branch, agency, or rep-
resentative office of a foreign bank affiliated with a 
global systemically important bank holding company 
is demonstrating a pattern or practice of violations 
of Federal consumer protection laws. Upon such a 
determination, the Board of Governors shall provide 
a written, confidential notice within 7 days to the 
other Federal prudential banking agencies, to the 
Committee on Financial Services of the House of 
Representatives, and the Committee on Banking, 
Housing, and Urban Affairs of the Senate describing 
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the review and any identified institution and, in con-
sultation with the Director of the Consumer Bureau, 
immediately initiate additional enforcement actions 
or proceedings to terminate the bank’s membership 
in the Federal Reserve System or the foreign bank’s 
activities in the United States, as applicable, pursu-
ant to subsection (c). 
(3) CORPORATION.—The Corporation shall reg-
ularly review and determine, in consultation with the 
Director of the Consumer Bureau, whether an in-
sured depository institution affiliated with a global 
systemically important bank holding company is 
demonstrating a pattern or practice of violations of 
Federal consumer protection laws. Upon such a de-
termination, the Corporation shall provide a written, 
confidential notice within 7 days to the other Fed-
eral prudential banking agencies, the Committee on 
Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and 
Urban Affairs of the Senate describing the review 
and any identified institution and, in consultation 
with the Director of the Consumer Bureau, imme-
diately initiate additional enforcement actions or 
proceedings to terminate the deposit insurance of 
the institution, pursuant to subsection (c). 
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(b) CONSIDERATIONS.— 
(1) IN GENERAL.—In making a determination 
under subsection (a) or paragraph (2), the Comp-
troller, the Board of Governors, and the Corpora-
tion, as applicable, shall consider whether the insti-
tution’s continued operations, activities, and func-
tions are in the public interest, and whether the pub-
lic benefits provided to consumers by the institution 
outweigh the harms posed by the institution, as well 
as whether the institution is meeting the convenience 
and needs of the communities served by the institu-
tion. 
(2) RECOMMENDATION BY DIRECTOR.—Upon a 
finding by the Director of the Consumer Bureau 
that a national bank, State member bank, or Fed-
eral savings association affiliated with a global sys-
temically important bank holding company, or a fed-
erally licensed branch, agency, representative office, 
or commercial lending company of a foreign bank af-
filiated with a global systemically important bank 
holding company is demonstrating a pattern or prac-
tice of violations of Federal consumer protection 
laws, the Director of the Consumer Bureau shall, 
within 7 days, recommend to the Comptroller, the 
Board of Governors, or the Corporation that deter-
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mination should be made under subsection (a). The 
Comptroller, the Board of Governors, or the Cor-
poration, as applicable, shall consider such rec-
ommendation and publicly respond in writing, in-
cluding a detailed basis for its decision, within 90 
days as to whether they will follow such rec-
ommendation. 
(3) DETAILED EXPLANATION.—In making a de-
termination under subsection (a), including in re-
sponse to any recommendation made by the Director 
of the Consumer Bureau and in any written notice 
to the Committee on Financial Services of the House 
of Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate, the 
Comptroller, the Board of Governors, or the Cor-
poration, as applicable, shall include a detailed de-
scription of the review of the institution, the basis 
for its determination, and which of the enforcement 
actions or proceedings under subsection (c) that the 
agency has determined to take against the institu-
tion. 
(4) PUBLIC HEARINGS.—The Comptroller, the 
Board of Governors, or the Corporation, as applica-
ble, may convene public hearings to consider facts, 
observations, evidence, and testimony provided by 
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any institution subject to a determination under this 
title as well as affected stakeholders. At least one 
public hearing must be granted if made at the writ-
ten request of the institution subject to a determina-
tion under this title, the Director of the Consumer 
Bureau, or by relevant State or local government 
agencies from at least five States. 
(5) ANNUAL REPORT AND TESTIMONY.—Each 
Federal prudential banking agency shall annually 
submit a written report to the Committee on Finan-
cial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Af-
fairs of the Senate describing the actions the agency 
has taken to carry out the requirements of this Act, 
including the regular review required by this section, 
and a list of each violation of Federal law or regula-
tion that was discovered or occurred in the previous 
10 years for each global systemically important bank 
holding company, and any affiliate thereof, that is 
subject to the agency’s supervision. The Federal 
prudential banking agencies shall annually testify 
before the Committee on Financial Services of the 
House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate 
on their respective annual report. 
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(c) CONSEQUENCE OF DETERMINATION.— 
(1) IN GENERAL.—If a determination is made 
under subsection (a) with respect to an institution 
that is demonstrating a pattern or practice of viola-
tions of Federal consumer protection laws, the ap-
propriate Federal banking agency, in consultation 
with the Director of the Consumer Bureau, shall 
take one or more of the following actions: 
(A) Remove responsible senior officers or 
directors of the institution, and permanently 
ban them from working at another banking or-
ganization, pursuant to section 8(e) of the Fed-
eral 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1818(e)). 
(B) Restrict certain lines of business of the 
institution, pursuant to section 8(b) of the Fed-
eral 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1818(b)). 
(C) Initiate proceedings to terminate the 
Federal charter of the institution, terminate a 
foreign bank’s ability to operate in the United 
States, or appoint a receiver pursuant to either 
title LXII of the Revised Statutes of the United 
States, the National Bank Receivership Act (12 
U.S.C. 191 et seq.), or the Home Owners’ Loan 
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Act (12 U.S.C. 1461 et seq.), with the identi-
fied pattern or practice of violations of Federal 
consumer protection laws deemed as grounds 
for appointing a conservator or receiver under 
the Federal Deposit Insurance Act or termi-
nating deposit insurance pursuant to section 
8(a) of the Federal Deposit Insurance Act (12 
U.S.C. 1818(a)). 
(2) RECOMMENDATION BY DIRECTOR.—If a de-
termination is made under subsection (a) with re-
spect to a national bank, Federal savings associa-
tion, or federally licensed branch, agency, commer-
cial lending company, or representative office of a 
foreign bank— 
(A) the Director of the Consumer Bureau 
may recommend to the Comptroller, the Board 
of Governors, or the Corporation what actions 
should be taken under this subsection; and 
(B) the Comptroller, the Board of Gov-
ernors, or the Corporation, as applicable, shall 
consider such recommendation and publicly re-
spond in writing within 30 days as to whether 
they will follow such recommendation. 
(3) MANDATORY ENFORCEMENT ACTIONS.—If a 
determination is made under subsection (a), the 
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Comptroller, the Board of Governors, or the Cor-
poration, as applicable, shall take at least one of the 
actions described under paragraph (1). If a second 
determination is made under subsection (a) against 
the same institution after enforcement actions are 
taken under this section, the Comptroller, the Board 
of Governors, or the Corporation, as applicable, shall 
immediately initiate proceedings to terminate a Fed-
eral charter, a State member bank’s membership in 
the Federal Reserve System, a foreign bank’s ability 
to operate in the United States, or terminate deposit 
insurance. 
(4) JUDICIAL REVIEW.—A determination under 
subsection (a) shall be subject to review by a Fed-
eral district court of competent jurisdiction under 
the procedures provided for under section 8(h) of the 
Federal Deposit Insurance Act (12 U.S.C. 1818(h)). 
SEC. 202. RECEIVERSHIP AND LIMITATION ON TRANSFER 
OF ASSETS. 
(a) NOTICE TO FDIC.—The Comptroller and the 
Board of Governors shall notify within 24 hours the Cor-
poration of any determination made under section 201. 
(b) TERMINATION OF FEDERAL DEPOSIT INSURANCE 
BASED ON REVOCATION OF FEDERAL BANKING CHAR-
TER.—For any insured depository institution identified by 
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the Corporation under section 201, or upon being notified 
of the termination of a national bank or Federal savings 
association’s Federal charter or termination of a Federal 
license for an insured branch or agency of a bank under 
subsection (a), the Corporation shall— 
(1) initiate an involuntary termination of the 
deposit insurance of the institution under section 8 
of the Federal Deposit Insurance Act (12 U.S.C. 
1818); and 
(2) place the institution into receivership, with 
the Corporation acting as the receiver, pursuant to 
the procedures provided under section 11(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1821(c)). 
(c) LIMITATION ON TRANSFER OF ASSETS.—In its 
capacity as receiver of a national bank, Federal savings 
association, or branch, agency, commercial lending com-
pany, or representative office of a foreign bank under this 
section, the Corporation may transfer any assets of the 
institution only to a banking organization that was as-
signed a rating of ‘‘satisfactory record of meeting commu-
nity credit needs’’ or better for complying with the Com-
munity Reinvestment Act of 1977 in the organization’s 
most recent evaluation, and may not transfer any assets 
of the institution to either— 
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(1) a global systemically important bank hold-
ing company, or any subsidiary of such a bank hold-
ing company; or 
(2) a banking organization that has exhibited 
substantial noncompliance with Federal consumer 
protection laws as evidenced by any enforcement ac-
tions, targeted supervisory exams, or a rating of less 
than ‘‘satisfactory’’ on its most recent consumer 
compliance examination. 
(d) CONSULTATION.—When acting in the capacity of 
a receiver pursuant to subsection (b), the Corporation 
shall consult with the Office of Minority and Women In-
clusion of the Corporation. 
SEC. 203. ADDRESSING PETITIONS FROM STATE AND 
LOCAL GOVERNMENT AGENCIES WITH RE-
SPECT TO VIOLATIONS OF FEDERAL CON-
SUMER PROTECTION LAWS AND REGULA-
TIONS. 
The Comptroller, the Corporation, and the Board of 
Governors shall— 
(1) consider petitions from relevant State and 
local government agencies, including law enforce-
ment and city and State attorney generals, regard-
ing a pattern or practice of violations of Federal 
consumer protection laws by a national bank, a 
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State member bank, or a Federal savings association 
affiliated with a global systemically important bank 
holding company, or a United States branch, agency, 
commercial lending company, or representative office 
of a foreign bank affiliated with a global systemically 
important bank holding company, or a State deposi-
tory institution affiliated with a global systemically 
important bank holding company, as applicable; 
(2) for any petition from State or local govern-
ment agencies from at least five States, provide a 
written response within 180 days after receiving 
such a petition whether or not a determination is 
made under this title, including a detailed basis for 
the determination; and 
(3) for any written response under paragraph 
(2), send a copy of the written response to the Com-
mittee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate. 
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TITLE 
III—DETERRENCE 
AND 
EXECUTIVE ACCOUNTABILITY 
TO CURB CONSUMER ABUSES 
SEC. 301. ANNUAL CERTIFICATION BY EXECUTIVE OFFI-
CERS AND DIRECTORS OF THE BOARD. 
(a) IN GENERAL.—Each executive officer and direc-
tor of the board of a national bank or a Federal savings 
association affiliated with a global systemically important 
bank holding company, or the branch, representative of-
fice, or agency of a foreign bank that is federally licensed 
and affiliated with a global systemically important bank 
holding company shall certify and submit a written attes-
tation, at least on an annual basis to the appropriate Fed-
eral banking agency, the Consumer Bureau, and any rel-
evant Federal law enforcement agency that they have reg-
ularly reviewed the institution’s lines of business and con-
ducted due diligence to ensure that— 
(1) the institution has established and main-
tained internal risk controls to identify significant 
deficiencies and weaknesses in its compliance with 
all applicable Federal consumer protection laws; 
(2) the institution has promptly disclosed all 
known violations of applicable Federal consumer 
protection laws to the Consumer Bureau and the ap-
propriate Federal banking agency; 
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(3) the institution is taking all reasonable steps 
to correct any identified deficiencies and weaknesses 
in its compliance with all applicable Federal con-
sumer protection laws based on a review of all regu-
latory examination results received in prior years; 
and 
(4) the institution is in substantial compliance 
with all applicable Federal consumer protection laws. 
(b) GUIDANCE.—The Consumer Bureau, in consulta-
tion with the relevant Federal and State regulator and law 
enforcement agencies, shall issue final guidance on the 
content, form, and method of delivery of the annual certifi-
cation required under subsection (a) within 6 months of 
the date of the enactment of this Act. 
(c) CRIMINAL PENALTIES.—Any individual who cer-
tifies and submits an attestation described under sub-
section (a) that contains a false statement— 
(1) if done knowingly, shall be fined not more 
than $1,000,000 or imprisoned not more than 10 
years, or both; or 
(2) if done intentionally, shall be fined not more 
than $5,000,000 or imprisoned not more than 20 
years or both. 
(d) PENALTIES FOR FAILURE TO COMPLY.—Any in-
dividual who fails to certify and submit a required attesta-
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tion described under subsection (a), shall be fined not 
more than $1,000,000 or imprisoned not more than 10 
years or both. 
SEC. 302. PERSONAL LIABILITY OF EXECUTIVE OFFICERS 
AND DIRECTORS OF THE BOARD FOR FED-
ERAL CONSUMER PROTECTION LAW VIOLA-
TIONS. 
(a) CIVIL LIABILITY.— 
(1) IN GENERAL.—If an executive officer or di-
rector of the board of a national bank, Federal sav-
ings association, or federally insured State deposi-
tory institution affiliated with a global systemically 
important bank holding company, or United States 
branch, agency, commercial lending company, or 
representative office of a foreign bank affiliated with 
a global systemically important bank holding com-
pany, knowingly violates any Federal consumer pro-
tection law (or directs any of the agents, officers, or 
directors of the institution to so violate or engage), 
such executive officer or director shall be liable in 
their personal and individual capacity for damages 
which the institution or any other person shall have 
sustained in consequence of such violation or en-
gagement. Any fines under this subsection shall not 
be deemed to limit the relevant Federal regulator or 
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