(1) a Federal financial regulatory agency has a 
dispute with another Federal financial regulatory 
agency about the agencies’ respective jurisdiction 
over a particular financial company or financial ac-
tivity or product (excluding matters for which a dis-
pute mechanism specifically has been provided under 
section 4204 or title III); 
(2) the disputing agencies cannot, after a dem-
onstrated good faith effort, resolve the dispute 
among themselves; and 
(3) any of the Federal financial regulatory 
agencies involved in the dispute— 
(A) provides all other disputants prior no-
tice of its intent to request dispute resolution 
by the Council; and 
(B) requests in writing, no earlier than 14 
days after providing the notice described in 
paragraph (A), that the Council resolve the dis-
pute. 
(b) COUNCIL DECISION.—The Council shall decide 
the dispute— 
(1) within a reasonable time after receiving the 
dispute resolution request; 
(2) after consideration of relevant information 
provided by each party to the dispute; and
(3) by agreeing with 1 of the disputants regard-
ing the entirety of the matter or by determining a 
compromise position. 
(c) FORM AND BINDING EFFECT.—A Council deci-
sion under this section shall be in writing and include an 
explanation and shall be binding on all Federal financial 
regulatory agencies that are parties to the dispute. 
SEC. 1003. TECHNICAL AND PROFESSIONAL ADVISORY 
COMMITTEES. 
The Council is authorized to appoint— 
(1) subsidiary working groups composed of 
Council members and their staff, Council staff, or a 
combination; and 
(2) such temporary special advisory, technical, 
or professional committees as may be useful in car-
rying out its functions, which may be composed of 
Council members and their staff, other persons, or 
a combination. 
SEC. 1004. FINANCIAL SERVICES OVERSIGHT COUNCIL 
MEETINGS AND COUNCIL GOVERNANCE. 
(a) MEETINGS.—The Council shall meet as fre-
quently as the Chairman deems necessary, but not less 
than quarterly. 
(b) VOTING.—Unless otherwise provided, the Council 
shall make all decisions the Council is required or author-
ized to make by a majority of the total voting membership 
of the Council under section 1001(b)(1). 
SEC. 1005. COUNCIL STAFF AND FUNDING. 
(a) VOTING MEMBERS OF THE COUNCIL.—The Sec-
retary of the Treasury shall and all other voting members 
of the Council may, with the approval of the Council— 
(1) detail permanent staff from the Department 
of the Treasury to provide the Council (and any 
temporary special advisory, technical, or professional 
committees appointed by the Council) with profes-
sional and expert support; and 
(2) provide such other services and facilities 
necessary for the performance of the Council’s func-
tions and fulfillment of the duties and mission of the 
Council. 
(b) OTHER DEPARTMENTS AND AGENCIES.—In addi-
tion to the assistance prescribed in subsection (a), depart-
ments and agencies of the United States may, with the 
approval of the Council— 
(1) detail department or agency staff on a tem-
porary basis to provide additional support to the 
Council (and any special advisory, technical, or pro-
fessional committees appointed by the Council); and
(2) provide such services, and facilities as the 
other departments or agencies may determine advis-
able. 
(c) STAFF STATUS; COUNCIL FUNDING.— 
(1) STATUS.—Staff detailed to the Council by 
the Secretary of the Treasury and other United 
States departments or agencies shall— 
(A) report to and be subject to oversight 
by the Council during their assignment to the 
Council; and 
(B) be compensated by the department of 
agency from which the staff was detailed. 
(2) FUNDING.—The administrative expense of 
the Council shall be paid by the departments and 
agencies represented by voting members of the 
Council on an equal basis. 
SEC. 1006. REPORTS TO THE CONGRESS. 
(a) IN GENERAL.—Semiannually the Council shall 
submit a report to the Committee on Ways and Means, 
the Committee on Agriculture, and the Committee on Fi-
nancial Services of the House of Representatives and the 
Committee on Finance, the Committee on Agriculture, 
and the Committee on Banking, Housing, and Urban Af-
fairs of the Senate, and the Comptroller General of the 
United States that—
(1) describes significant financial and regu-
latory developments, including insurance and ac-
counting regulations and standards, and assesses the 
impact of those developments on the stability of the 
financial system; 
(2) recommends actions that will improve finan-
cial stability; 
(3) details the size, scale, scope, concentration, 
activities, and interconnectedness of the 50 largest 
financial institutions, by total assets, in the United 
States; 
(4) describes strategies developed by the Coun-
cil to respond to potential threats to the stability of 
the United States financial system and the outcome 
of exercises conducted in furtherance of those strate-
gies; 
(5) describes the nature and scope of any com-
pany or activities identified under subtitle B and 
steps taken to address them; and 
(6) describes any dispute resolutions under-
taken under section 1002 and the result of such res-
olutions. 
(b) EVALUATION OF ANNUAL REPORT BY GAO.— 
Not later than 120 days after receiving the report required 
by subsection (a), the Comptroller General of the United
States shall submit an evaluation of such report to the 
Committee on Ways and Means, the Committee on Agri-
culture, and the Committee on Financial Services of the 
House of Representatives and the Committee on Finance, 
the Committee on Agriculture, and the Committee on 
Banking, Housing, and Urban Affairs of the Senate. 
(c) STATEMENTS
BY VOTING MEMBERS
OF
THE 
COUNCIL.—At the time each report is submitted under 
subsection (a), each voting member of the Council shall— 
(1) if such member believes that the Council, 
the Government, and the private sector are taking 
all reasonable steps to ensure financial stability and 
to prevent systemic risk that would negatively affect 
the economy, submit a signed statement to the Com-
mittee on Ways and Means, the Committee on Agri-
culture, and the Committee on Financial Services of 
the House of Representatives and the Committee on 
Finance, the Committee on Agriculture, and the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate stating such belief; or 
(2) if such member does not believe that all rea-
sonable steps described under paragraph (1) are 
being taken, submit a signed statement to the Com-
mittee on Ways and Means, the Committee on Agri-
culture, and the Committee on Financial Services of
the House of Representatives and the Committee on 
Finance, the Committee on Agriculture, and the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate stating what actions such member be-
lieves need to be taken in order to ensure that all 
reasonable steps described under paragraph (1) are 
taken. 
(d) TESTIMONY BY THE CHAIRMAN.—The Chairman 
of the Council shall appear before the Committee on Fi-
nancial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of 
the Senate at a semi-annual hearing, after the report is 
submitted under subsection (a)— 
(1) to discuss the efforts, activities, objectives, 
and plans of the Council; and 
(2) to discuss and answer questions concerning 
such report. 
(e) STUDY OF EFFECTS CONSUMER FINANCIAL PRO-
TECTION AGENCY REGULATIONS AND STANDARDS.— 
(1) STUDY REQUIRED.—The Council shall con-
duct a study of the effects that regulations and 
standards of the Consumer Financial Protection 
Agency will have on all covered persons (as such 
term is defined in section 4002(9)), including non-
depository institution covered persons. The Director
of the Consumer Financial Protection Agency shall 
take the findings of the study into account when 
issuing regulations. 
(2) VALUE
OF
NONBANK
PRODUCTS.—The 
study shall include an evaluation and assessment of 
the appropriateness of using ‘‘APR’’ as a true meas-
ure of the value of all nonbank products. 
(3) SUBMISSION.—Not later than 240 days 
after the date of the enactment of this Act, the Di-
rector of the Consumer Financial Protection Agency 
shall submit the study to Congress and include any 
recommendations the Director may have for changes 
in law and regulations to improve consumer protec-
tions and maintain access to credit. 
SEC. 1007. APPLICABILITY OF CERTAIN FEDERAL LAWS. 
(a) The Federal Advisory Committee Act shall not 
apply to the Financial Services Oversight Council, or any 
special advisory, technical, or professional committees ap-
pointed by the Council (except that, if an advisory, tech-
nical, or professional committee has one or more members 
who are not employees of or affiliated with the United 
States government, the Council shall publish a list of the 
names of the members of such committee). 
(b) The Council shall not be deemed an ‘‘agency’’ for 
purposes of any State or Federal law.
SEC. 1008. OVERSIGHT BY GAO. 
(a) AUTHORITY TO AUDIT.—The Comptroller Gen-
eral of the United States may audit the activities and fi-
nancial transactions of— 
(1) the Council; and 
(2) any person or entity acting on behalf of or 
under the authority of the Council, to the extent 
such activities and financial transactions relate to 
such person’s or entity’s work for the Council. 
(b) ACCESS TO INFORMATION.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the Comptroller General of the 
United States shall have access, upon request and at 
such reasonable time and in such reasonable form as 
the Comptroller General may request, to— 
(A) any records or other information under 
the control of or used by the Council; 
(B) any records or other information under 
the control of a person or entity acting on be-
half of or under the authority of the Council, to 
the extent such records or other information is 
relevant to an audit under subsection (a); and 
(C) the officers, directors, employees, fi-
nancial advisors, staff, working groups, and 
agents and representatives of the Council (as 
related to the agent’s or representative’s activi-
ties on behalf of the Council) at such reasonable 
times as the Comptroller General may request. 
(2) CERTAIN INFORMATION SPECIFIED.—Access 
under paragraph (1) includes access to— 
(A) information provided to the Council by 
its voting and nonvoting members under section 
1101; and 
(B) the identity of each financial holding 
company subject to stricter standards. 
(3) COPIES.—Comptroller General may make 
and retain copies of such books, accounts, and other 
records access to which is granted under this provi-
sion as the Comptroller General considers appro-
priate. 
(c) PERIODIC EVALUATIONS.—The Comptroller Gen-
eral of the United States shall periodically evaluate the 
processes and activities of the Council and the extent to 
which the Council is fulfilling its duties under this title. 
The Comptroller General shall submit to the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate a report on the results of each such evalua-
tion.
Subtitle B—Prudential Regulation 
of Companies and Activities for 
Financial Stability Purposes 
SEC. 1100. FEDERAL RESERVE BOARD AUTHORITY THAT OF 
AGENT ACTING ON BEHALF OF COUNCIL. 
For purposes of this subtitle, the Board of Governors 
of the Federal Reserve System shall act in the capacity 
of agent for the Council, acting on behalf of the Council. 
SEC. 1101. COUNCIL AND BOARD AUTHORITY TO OBTAIN 
INFORMATION. 
(a) IN GENERAL.—The Council and the Board are 
authorized to receive, and may request the production of, 
any data or information from members of the Council, as 
necessary— 
(1) to monitor the financial services market-
place to identify potential threats to the stability of 
the United States financial system; 
(2) to identify global trends and developments 
that could pose systemic risks to the stability of the 
economy of the United States or other economies; or 
(3) to otherwise carry out any of the provisions 
of this title, including to ascertain a primary finan-
cial regulatory agency’s implementation of rec-
ommended prudential standards under this subtitle.
(b) SUBMISSION BY COUNCIL MEMBERS.—Notwith-
standing any provision of law, any voting or nonvoting 
member of the Council is authorized to provide informa-
tion to the Council, and the members of the Council shall 
maintain the confidentiality of such information. 
(c) FINANCIAL COMPANY DATA COLLECTION.— 
(1) IN GENERAL.—The Council or the Board 
may require the submission of periodic and other re-
ports from any financial company solely for the pur-
pose of assessing the extent to which a financial ac-
tivity or financial market in which the financial com-
pany participates, or the company itself, poses a 
threat to financial stability. 
(2) MITIGATION OF REPORT BURDEN.—Before 
requiring the submission of reports from financial 
companies that are regulated by the primary finan-
cial regulatory agencies, the Council or the Board 
shall coordinate with such agencies and shall, when-
ever possible, rely on information already being col-
lected by such agencies. 
(3) MITIGATION
REQUIREMENTS
IN
CASE
OF 
FOREIGN
FINANCIAL
PARENTS.—Before requiring 
the submission of reports from a company that is a 
foreign financial parent, the Council or the Board 
shall, to the extent appropriate, coordinate with any
digital, or other format that facilitates the use 
of such data by the Council in its analysis. 
(2) APPLICABLE PRIVILEGES NOT WAIVED.—A 
Federal financial regulator, State financial regu-
lator, United States financial company, foreign fi-
nancial company operating in the United States, fi-
nancial market utility, or other person shall not be 
compelled to waive and shall not be deemed to have 
waived any privilege otherwise applicable to any data 
or information by transferring the data or informa-
tion to, or permitting that data or information to be 
used by— 
(A) the Council; 
(B) any Federal financial regulator or 
State financial regulator, in any capacity; or 
(C) any other agency of the Federal Gov-
ernment (as defined in section 6 of title 18, 
United States Code). 
(3) DISCLOSURE
EXEMPTION.—Any informa-
tion obtained by the Council under this section shall 
be exempt from the disclosure requirements under 
section 552 of title 5, United States Code. 
(4) CONSULTATION
WITH
FOREIGN
GOVERN-
MENTS.—Under the supervision of the President, 
and in a manner consistent with section 207 of the
Foreign Service Act of 1980 (22 U.S.C. 3927), the 
Chairman of the Council, in consultation with the 
other members of the Council, shall regularly consult 
with the financial regulatory entities and other ap-
propriate organizations of foreign governments or 
international organizations on matters relating to 
systemic risk to the international financial system. 
(5) REPORT.—Not later than 6 months after 
the date of the enactment of this title, the Chairman 
of the Council shall report to the Financial Services 
Committee of the House of Representatives and the 
Banking, Housing, and Urban Affairs Committee of 
the Senate the opinion of the Council as to whether 
setting up an electronic database as described in 
paragraph (1)(B) would aid the Council in carrying 
out this section. 
SEC. 
1102. 
COUNCIL 
PRUDENTIAL 
REGULATION 
REC-
OMMENDATIONS 
TO 
FEDERAL 
FINANCIAL 
REGULATORY AGENCIES; AGENCY AUTHOR-
ITY. 
(a) IN GENERAL.—The Council is authorized to issue 
formal recommendations, publicly or privately, that a Fed-
eral financial regulatory agency adopt stricter prudential 
standards for firms it regulates to mitigate systemic risk.
(b) AGENCY AUTHORITY
TO IMPLEMENT STAND-
ARDS.— 
(1) A Federal financial regulatory agency spe-
cifically may, in response to a Council recommenda-
tion under this section or otherwise, impose, require 
reports regarding, examine for compliance with, and 
enforce stricter prudential standards and safeguards 
for the firms it regulates to mitigate systemic risk. 
This authority is in addition to and does not limit 
any other authority of the Federal financial regu-
latory agencies. Compliance by an entity with ac-
tions taken by a Federal financial regulatory agency 
under this section shall be enforceable in accordance 
with the statutes governing the respective Federal fi-
nancial regulatory agency’s jurisdiction over the en-
tity as if the agency action were taken under those 
statutes. 
(2) APPLYING STANDARDS TO FOREIGN FINAN-
CIAL PARENTS.—In applying standards under para-
graph (1) to any foreign financial parent, or to any 
branch of, subsidiary of, or other operating entity 
related to such foreign financial parent that operates 
within the United States, the Federal financial regu-
latory agency shall—
(A) give due regard to the principles of na-
tional treatment and equality of competitive op-
portunity; and 
(B) take into account the extent to which 
the foreign financial parent is subject to com-
parable standards on a consolidated basis in the 
home country of such foreign financial parent 
that are administered by a comparable foreign 
supervisory authority. 
(c) AGENCY NOTICE TO COUNCIL.—A Federal finan-
cial regulatory agency shall, within 60 days of receiving 
a Council recommendation under this section, notify the 
Council in writing regarding— 
(1) the actions the Federal financial regulatory 
agency has taken in response to the Council’s rec-
ommendation, additional actions contemplated, and 
timetables therefore; or 
(2) the reason the Federal financial regulatory 
agency has failed to respond to the Council’s re-
quest. 
SEC. 1103. SUBJECTING FINANCIAL COMPANIES TO STRICT-
ER PRUDENTIAL STANDARDS FOR FINANCIAL 
STABILITY PURPOSES. 
(a) IN GENERAL.—The Council shall, in consultation 
with the Board and any other primary financial regulatory
agency that regulates the financial company or a sub-
sidiary of such company, and, in the case of a financial 
holding company subject to stricter standards that is an 
insurance company, the Federal Insurance Office, subject 
a financial company to stricter prudential standards under 
this subtitle if the Council determines that— 
(1) material financial distress at the company 
could pose a threat to financial stability or the econ-
omy; or 
(2) the nature, scope, size, scale, concentration, 
and interconnectedness, or mix of the company’s ac-
tivities could pose a threat to financial stability or 
the economy. 
(b) CRITERIA.—In making a determination under 
subsection (a), the Council shall consider the following cri-
teria: 
(1) The extent of the company’s leverage. 
(2) The extent and nature of the company’s off- 
balance sheet exposures. 
(3) The extent and nature of the company’s 
transactions and relationships with other financial 
companies. 
(4) The company’s importance as a source of 
credit for households, businesses, and State and
local governments and as a source of liquidity for 
the financial system. 
(5) The company’s importance as a source of 
credit for low-income, minority, or underserved com-
munities and the impact the failure of such company 
would have on the availability of credit in such com-
munities. 
(6) The extent to which assets are simply man-
aged and not owned by the financial company and 
the extent to which ownership of assets under man-
agement is diffuse. 
(7) The nature, scope, and mix of the com-
pany’s activities. 
(8) The degree to which the company is already 
regulated by one or more Federal financial regu-
latory agencies or, in the case of a foreign financial 
parent, the extent to which such foreign parent is 
subject to prudential standards on a consolidated 
basis in the home country of such financial parent 
that are administered and enforced by a comparable 
foreign supervisory authority. 
(9) The amount and nature of the company’s fi-
nancial assets.
(10) The amount and nature of the company’s 
liabilities, including the degree of reliance on short- 
term funding. 
(11) Any other factors that the Council deems 
appropriate. 
(c) NOTIFICATION OF DECISION.—The Board, in an 
executive capacity on behalf of the Council, shall imme-
diately upon the Council’s decision notify the financial 
company by order, which shall be public, that the financial 
company is subject to stricter prudential standards, as 
prescribed by the Board in accordance with section 1104. 
(d) PERIODIC REVIEW AND RESCISSION OF FIND-
INGS.— 
(1) SUBMISSION OF ASSESSMENT.—The Board 
shall periodically submit a report to the Council con-
taining an assessment of whether each company sub-
jected to stricter prudential standards should con-
tinue to be subject to such standards. 
(2) REVIEW
AND
RESCISSION.—The Council 
shall— 
(A) review the assessment submitted pur-
suant to paragraph (1) and any information or 
recommendation submitted by members of the 
Council regarding whether a financial holding
ACT.—A financial company subject to stricter 
standards that does not own a bank (as defined 
in section 2 of the Bank Holding Company Act 
of 1956) and that is not a foreign bank or com-
pany that is treated as a bank holding company 
under section 8 of the International Banking 
Act of 1978 shall be subject to section 4, sub-
sections (b), (c), (d), (e), (f), and (g) of section 
5, and section 8 of the Bank Holding Company 
Act of 1956, and section 8 of the Federal De-
posit Insurance Act in the same manner and to 
the same extent as if such financial holding 
company subject to stricter standards were a 
bank holding company that has elected to be a 
financial holding company (as such terms are 
defined in the Bank Holding Company Act of 
1956), its subsidiaries were subsidiaries of a 
bank holding company, and the Board was its 
appropriate Federal banking agency (as such 
term is defined under the Federal Deposit In-
surance Act). 
(B) BOARD AUTHORITY.—For purposes of 
administering and enforcing the provisions of 
this title, the Board may take any action with 
respect to a financial holding company subject
to stricter standards described in subparagraph 
(A) or its subsidiaries under the authorities de-
scribed in subparagraph (A) as if such financial 
holding company subject to stricter standards 
were a bank holding company that has elected 
to be a financial holding company (as such 
terms are defined in the Bank Holding Com-
pany Act of 1956), its subsidiaries were subsidi-
aries of a bank holding company, and the 
Board was its appropriate Federal banking 
agency (as such term is defined under the Fed-
eral Deposit Insurance Act). 
(2) APPLICATION OF ACTIVITY RESTRICTIONS 
AND
SECTION
HOLDING
COMPANY
REQUIRE-
MENTS.— 
(A) IN GENERAL.—Except as provided in 
subparagraphs (B) and (C)— 
(i) a financial holding company sub-
ject to stricter standards that conducts ac-
tivities that do not comply with section 4 
of the Bank Holding Company Act shall be 
required to establish or designate a section 
6 holding company in accordance with sec-
tion 6 of the Bank Holding Company Act 
of 1956 through which it conducts activi-
ties of the company that are determined to 
be financial in nature or incidental thereto 
under section 4(k) of the such Act; and 
(ii) such section 6 holding company 
shall be the financial holding company sub-
ject to stricter standards for purposes of 
this title. 
(B) EXCEPTIONS FROM SECTION 6 HOLD-
ING COMPANY REQUIREMENTS.— 
(i) 
GENERAL
REQUIREMENT
FOR 
BOARD
TO
CONSIDER
EXCEPTIONS.—Be-
fore such time as a financial holding com-
pany subject to stricter standards is re-
quired to establish or designate a section 6 
holding company under section 6 of the 
Bank Holding Company Act, and in con-
sultation with the financial holding com-
pany subject to stricter standards and any 
appropriate Federal or State financial reg-
ulators (and, in the case of a financial 
holding company subject to stricter stand-
ards that is an insurance company, the 
Federal Insurance Office)— 
(I) the Board shall consider 
whether to grant any of the exemp-
tions from the requirements applicable 
to section 6 holding companies under 
section 6(a)(6)(A) of the Bank Hold-
ing Company Act of 1956, in accord-
ance with that provision; and 
(II) the Board, at the request of 
a financial holding company subject to 
stricter standards that is predomi-
nantly engaged in activities that are 
determined to be financial in nature 
or incidental thereto under section 
4(k) of the Bank Holding Company 
Act, shall consider whether to exempt 
the financial holding company subject 
to stricter standards from the require-
ment to establish a section 6 holding 
company, taking into consideration 
paragraph (2)(D), and the extent to 
which the exemption would: facilitate 
the extension of credit to individuals, 
households and businesses; improve 
efficiency or customer service or result 
in other public benefits; potentially 
threaten the safety and soundness of 
the financial holding company or any
of its subsidiaries; potentially increase 
systemic risk or threaten the stability 
of the overall financial system; poten-
tially result in unfair competition; and 
potentially have anticompetitive ef-
fects that would not be outweighed by 
public benefits. 
(ii) BOARD DETERMINATION NOT TO 
EXEMPT.— 
(I) IN GENERAL.—If the Board 
determines not to exempt the financial 
holding company subject to stricter 
standards from the requirement to es-
tablish a section 6 holding company, 
the financial holding company subject 
to stricter standards shall establish a 
section 6 holding company within 90 
days after the Board’s determination. 
(II) EXTENSION
OF
PERIOD.— 
The Board may extend the time by 
which the financial holding company 
subject to stricter standards is re-
quired to establish a section 6 holding 
company for an additional reasonable
period of time, not to exceed 180 
days. 
(iii) BOARD DETERMINATION TO EX-
EMPT.— 
(I) IN GENERAL.—If the Board 
grants the requested exemption from 
the requirement to establish a section 
6 holding company, the financial hold-
ing company subject to stricter stand-
ards shall at all times remain pre-
dominantly engaged in activities that 
are determined to be financial in na-
ture or incidental thereto under sec-
tion 4(k) of the Bank Holding Com-
pany Act of 1956, and shall be the fi-
nancial holding company subject to 
stricter standards for purposes of this 
title. 
(II) SUBSEQUENT LOSS OF EX-
EMPTION.—Upon a determination by 
the Board, in consultation with any 
relevant Federal or State regulators 
of the financial holding company sub-
ject to stricter standards, and, in the 
case of a financial holding company
subject to stricter standards that is an 
insurance company, the Federal In-
surance Office, that the financial 
holding company subject to stricter 
standards fails to comply with this 
subsection, the financial holding com-
pany subject to stricter standards 
shall lose the exemption from the sec-
tion 6 holding company requirement 
and shall establish a section 6 holding 
company within the time periods de-
scribed in clause (ii)(I). 
(C) ACTIVITIES
CONDUCTED
ABROAD.— 
Section 4 of the Bank Holding Company Act of 
1956 shall not apply to any activities that a for-
eign financial holding company subject to strict-
er standards conducts solely outside the United 
States if such activities are conducted solely by 
a company or other entity that is located out-
side the United States. 
(D) FLEXIBLE APPLICATION.—In applying 
the activity restrictions and ownership limita-
tions of section 4 of the Bank Holding Com-
pany Act of 1956 to financial holding compa-
nies subject to stricter standards described in
paragraph (1)(A), the Board shall flexibly 
adapt such requirements taking into account 
the usual and customary practices in the busi-
ness sector of the financial company subject to 
stricter standards so as to avoid unnecessary 
burden and expense. 
(3) LEVERAGE LIMITATION.—The Board shall 
require each financial holding company subject to 
stricter standards to maintain a debt to equity ratio 
of no more than 15 to 1, and the Board shall issue 
regulations containing procedures and timelines for 
how a financial holding company subject to stricter 
standards with a debt to equity ratio of more than 
15 to 1 at the time such company becomes a finan-
cial holding company subject to stricter standards 
shall reduce such ratio. 
SEC. 1104. STRICTER PRUDENTIAL STANDARDS FOR CER-
TAIN FINANCIAL HOLDING COMPANIES FOR 
FINANCIAL STABILITY PURPOSES. 
(a) STRICTER PRUDENTIAL STANDARDS.— 
(1) IN GENERAL.—To mitigate risks to finan-
cial stability and the economy posed by a financial 
holding company that has been subjected to stricter 
prudential standards in accordance with section 
1103, the Board, as agent of the Council, shall im-
pose stricter prudential standards on such company. 
Such standards shall be designed to maximize finan-
cial stability taking costs to long-term financial and 
economic growth into account, be heightened when 
compared to the standards that otherwise would 
apply to financial holding companies that are not 
subjected to stricter prudential standards pursuant 
to this subtitle (including by addressing additional 
or different types of risks than otherwise applicable 
standards), and reflect the potential risk posed to fi-
nancial stability by the financial holding company 
subject to stricter standards. 
(2) STANDARDS.— 
(A) REQUIRED STANDARDS.—The stricter 
standards imposed by the Board under this sec-
tion shall include— 
(i) risk-based capital requirements 
and leverage limits, unless the Board de-
termines that such requirements are not 
appropriate for a financial holding com-
pany subject to stricter standards because 
of such company’s activities (such as in-
vestment company activities or assets 
under management) or structure, in which 
case the Board shall apply other standards
that result in appropriately stringent con-
trols. 
(ii) liquidity requirements; 
(iii) concentration requirements (as 
specified in subsection (c)); 
(iv) prompt corrective action require-
ments (as specified in subsection (e)); 
(v) resolution plan requirements (as 
specified in subsection (f)); and 
(vi) overall risk management require-
ments. 
(B) 
ADDITIONAL
STANDARDS.—The 
heightened standards imposed by the Board 
under this section also may include short-term 
debt limits prescribed in accordance with sub-
section (d) and any other prudential standards 
that the Board deems advisable, including tak-
ing actions to mitigate systemic risk. 
(C) CONSULTATION
WITH
FEDERAL
FI-
NANCIAL
REGULATORY
AGENCIES
AND
THE 
FEDERAL INSURANCE OFFICE.—The Board, in 
developing stricter prudential standards under 
this subsection, shall consult with other Federal 
financial regulatory agencies with respect to 
any standard that is likely to have a significant
impact on a functionally regulated subsidiary, 
or a subsidiary depository institution, of a fi-
nancial holding company that is subject to 
stricter prudential standards under this title. 
With respect to a financial holding company 
subject to stricter standards that is an insur-
ance company or any insurance company sub-
sidiary of such a financial holding company 
subject to stricter standards, the Board shall 
also consult with the Federal Insurance Office. 
(3) APPLICATION OF REQUIRED STANDARDS.— 
In imposing prudential standards under this section, 
the Board— 
(A) may differentiate among financial 
holding companies subject to stricter standards 
on an individual basis or by category, taking 
into consideration their capital structure, risk, 
complexity, financial activities, the financial ac-
tivities of their subsidiaries, and any other fac-
tors that the Board deems appropriate; and 
(B) shall take into consideration whether 
and to what extent a financial holding company 
subject to stricter standards that is not a bank 
holding company or treated as a bank holding 
company owns or controls a depository institu-
tion and shall adapt the prudential standards 
applied to such company as appropriate in light 
of any predominant line of business of such 
company, including assets under management 
or other activities for which capital require-
ments are not appropriate. 
(4) WELL
CAPITALIZED
AND
WELL
MAN-
AGED.—A financial holding company subject to 
stricter standards shall at all times after it is subject 
to such standards be well capitalized and well man-
aged as defined by the Board. 
(5) APPLICATION TO FOREIGN FINANCIAL COM-
PANIES.—The Board shall prescribe regulations re-
garding the application of stricter prudential stand-
ards to a foreign financial parent and to a Federal 
or State branch, subsidiary, or operating entity that 
is owned or controlled by a foreign financial parent, 
giving due regard to principles of national treatment 
and equality of competitive opportunity and taking 
into account the extent to which the foreign financial 
parent is subject on a consolidated basis to home 
country standards comparable to those applied to fi-
nancial holding companies in the United States. 
(6) INCLUSION OF OFF BALANCE SHEET AC-
TIVITIES IN COMPUTING CAPITAL REQUIREMENTS.—
(A) IN GENERAL.—In the case of any fi-
nancial holding company subject to stricter 
standards, the computation of capital require-
ments shall take into account off balance sheet 
activities for such a company. 
(B) EXEMPTION.—If the Board determines 
that an exemption from the requirements under 
subparagraph (A) is appropriate, the Board 
may exempt a financial holding company sub-
ject to stricter standards from the requirements 
under subparagraph (A) or any transaction or 
transactions engaged in by such a company. 
(C) OFF BALANCE SHEET ACTIVITIES DE-
FINED.—For purposes of this paragraph, the 
term ‘‘off balance sheet activities’’ means a li-
ability that is not currently a balance sheet li-
ability but may become one upon the happening 
of some future event, including the following 
transactions, to the extent they may create a li-
ability: 
(i) Direct credit substitutes in which a 
bank substitutes its own credit for a third 
party, including standby letters of credit.
(ii) Irrevocable letters of credit that 
guarantee repayment of commercial paper 
or tax-exempt securities. 
(iii) Risk participation in bankers’ ac-
ceptances. 
(iv) Sale and repurchase agreements. 
(v) Asset sales with recourse against 
the seller. 
(vi) Interest rate swaps. 
(vii) Credit swaps. 
(viii) Commodity contracts. 
(ix) Forward contracts. 
(x) Securities contracts. 
(xi) Such other activities or trans-
actions as the Board may, by rule, define. 
(b) PRUDENTIAL STANDARDS
AT FUNCTIONALLY 
REGULATED SUBSIDIARIES
AND SUBSIDIARY DEPOSI-
TORY INSTITUTIONS.— 
(1) BOARD AUTHORITY TO RECOMMEND STAND-
ARDS.—With respect to a functionally regulated sub-
sidiary (as such term is defined in section 5 of the 
Bank Holding Company Act) or a subsidiary deposi-
tory institution of a financial holding company sub-
ject to stricter standards, the Board may rec-
ommend that the relevant Federal financial regu-
latory agency for such functionally regulated sub-
sidiary or subsidiary depository institution prescribe 
stricter prudential standards on such functionally 
regulated subsidiary or subsidiary depository institu-
tion. Any standards recommended by the Board 
under this section shall be of the same type as those 
described in subsection (a)(2) that the Board is re-
quired or authorized to impose directly on the finan-
cial holding company subject to stricter standards. 
(2) 
AGENCY
AUTHORITY
TO
IMPLEMENT 
HEIGHTENED STANDARDS AND SAFEGUARDS.—Each 
Federal financial regulatory agency that receives a 
Board recommendation under paragraph (1) is au-
thorized to impose, require reports regarding, exam-
ine for compliance with, and enforce standards 
under this subsection with respect to the entities 
such agency regulates as described in section 
1006(b)(6). This authority is in addition to and does 
not limit any other authority of the Federal financial 
regulatory agencies. Compliance by an entity with 
actions taken by a Federal financial regulatory agen-
cy under this section shall be enforceable in accord-
ance with the statutes governing the respective agen-
cy’s jurisdiction over the entity as if the agency ac-
tion were taken under those statutes.
(3) IMPOSITION
OF
STANDARDS.—Standards 
imposed by a Federal financial regulatory agency 
under this subsection shall be the standards rec-
ommended by the Board in accordance with para-
graph (1) or any other similar standards that the 
Board deems acceptable after consultation between 
the Board and the primary financial regulatory 
agency and, with respect to an insurance company, 
the Federal Insurance Office. 
(4) FEDERAL FINANCIAL REGULATORY AGENCY 
RESPONSE; NOTICE
TO
COUNCIL
AND
BOARD.—A 
Federal financial regulatory agency shall notify the 
Council and the Board in writing on whether and to 
what extent the agency has imposed the stricter pru-
dential standards described in paragraph (3) within 
60 days of the Board’s recommendation under para-
graph (1). A Federal financial regulatory agency 
that fails to impose such standards shall provide 
specific justification for such failure to act in the 
written notice from the agency to the Council and 
Board. 
(c) CONCENTRATION LIMITS FOR FINANCIAL HOLD-
ING COMPANIES SUBJECT TO STRICTER STANDARDS.— 
(1) STANDARDS.—In order to limit the risks 
that the failure of any company could pose to a fi-
nancial holding company subject to stricter stand-
ards and to the stability of the United States finan-
cial system, the Board, by regulation, shall prescribe 
standards that limit the risks posed by the exposure 
of a financial holding company subject to stricter 
standards to any other company. 
(2) LIMITATION ON CREDIT EXPOSURE.—The 
regulations prescribed by the Board shall prohibit 
each financial holding company subject to stricter 
standards from having credit exposure to any unaf-
filiated company that exceeds 25 percent of capital 
stock and surplus of the financial holding company 
subject to stricter standards, or such lower amount 
as the Board may determine by regulation to be nec-
essary to mitigate risks to financial stability. 
(3) CREDIT EXPOSURE.—For purposes of this 
subsection and with respect to a financial holding 
company subject to stricter standards, the term 
‘‘credit exposure’’ to a company means— 
(A) all extensions of credit to the company, 
including loans, deposits, and lines of credit; 
(B) all repurchase agreements and reverse 
repurchase agreement with the company; 
(C) all securities borrowing and lending 
transactions with the company to the extent
that such transactions create credit exposure of 
the financial holding company subject to strict-
er standards to the company; 
(D) all guarantees, acceptances, or letters 
of credit (including endorsement or standby let-
ters of credit) issued on behalf of the company; 
(E) all purchases of or investment in secu-
rities issued by the company; 
(F) counterparty credit exposure to the 
company in connection with a derivative trans-
action between the financial holding company 
subject to stricter standards and the company; 
and 
(G) any other similar transactions that the 
Board by regulation determines to be a credit 
exposure for purposes of this section. 
(4) ATTRIBUTION RULE.—For purposes of this 
subsection, any transaction by a financial holding 
company subject to stricter standards with any per-
son is deemed a transaction with a company to the 
extent that the proceeds of the transaction are used 
for the benefit of, or transferred to, that company. 
(5) RULEMAKING.—The Board may issue such 
regulations and orders, including definitions con-
sistent with this subsection, as may be necessary to
administer and carry out the purpose of this sub-
section. 
(6) EXEMPTIONS.— 
(A) IN GENERAL.— 
(i) FEDERAL HOME LOAN BANKS.— 
This subsection shall not apply to any Fed-
eral home loan bank, but Federal home 
loan banks are not exempt from any other 
provision of this title except as specifically 
provided in this title. 
(ii) APPLICABILITY TO OTHER ENTI-
TIES.—The Federal National Mortgage As-
sociation and the Federal Home Loan 
Mortgage Corporation are not exempt from 
any provision of this title except as specifi-
cally provided in this title. 
(B) REGULATIONS.—The Board may, by 
regulation or order, exempt transactions, in 
whole or in part, from the definition of credit 
exposure if it finds that the exemption is in the 
public interest and consistent with the purpose 
of this subsection. 
(7) TRANSITION PERIOD.—This subsection and 
any regulations and orders of the Board under the 
authority of this subsection shall not take effect
until the date that is 3 years from the date of the 
enactment of this subsection. The Board may extend 
the effective date for up to 2 additional years to pro-
mote financial stability. 
(d) SHORT-TERM DEBT LIMITS FOR CERTAIN FI-
NANCIAL HOLDING COMPANIES.— 
(1) IN GENERAL.—In order to limit the risks 
that an overaccumulation of short-term debt could 
pose to financial holding companies and to the sta-
bility of the United States financial system, the 
Board may by regulation prescribe a limit on the 
amount of short-term debt, including off-balance 
sheet exposures, that may be accumulated by any fi-
nancial holding company subject to stricter stand-
ards for purposes of this title. 
(2) BASIS
OF
LIMIT.—Any limit prescribed 
under paragraph (1) shall be based on a financial 
holding company’s short-term debt as a percentage 
of its capital stock and surplus or on such other 
measure as the Board considers appropriate. 
(3) SHORT-TERM
DEBT
DEFINED.—For pur-
poses of this subsection, the term ‘‘short-term debt’’ 
means such liabilities with short-dated maturity that 
the Board identifies by regulation, except that such 
term does not include insured deposits.
(4) RULEMAKING AUTHORITY.—In addition to 
prescribing regulations under paragraphs (1) and 
(3), the Board may prescribe such regulations, in-
cluding definitions consistent with this subsection, 
and issue such orders as may be necessary to carry 
out this subsection. 
(5) AUTHORITY
TO
ISSUE
EXEMPTIONS
AND 
ADJUSTMENTS.—Notwithstanding the Bank Holding 
Company Act of 1956 (12 U.S.C. 1841 et seq.), the 
Board may, if it determines such action is necessary 
to ensure appropriate heightened prudential super-
vision, with respect to a financial holding company 
that does not control an insured depository institu-
tion, issue to such company an exemption from or 
adjustment to the limit prescribed under paragraph 
(1). 
(e) PROMPT CORRECTIVE ACTION FOR FINANCIAL 
HOLDING COMPANIES SUBJECT TO STRICTER STAND-
ARDS.— 
(1) PROMPT CORRECTIVE ACTION REQUIRED.— 
The Board shall take prompt corrective action to re-
solve the problems of financial holding companies 
subject to stricter standards. Except as specifically 
provided otherwise, this subsection shall apply only
to financial holding companies that are incorporated 
or organized under United States laws. 
(2) DEFINITIONS.—For purposes of this sec-
tion— 
(A) CAPITAL CATEGORIES.— 
(i) WELL CAPITALIZED.—A financial 
holding company subject to stricter stand-
ards is ‘‘well capitalized’’ if it exceeds the 
required minimum level for each relevant 
capital measure. 
(ii) UNDERCAPITALIZED.—A financial 
holding company subject to stricter stand-
ards is ‘‘undercapitalized’’ if it fails to 
meet the required minimum level for any 
relevant capital measure. 
(iii) SIGNIFICANTLY
UNDERCAPITAL-
IZED.—A financial holding company sub-
ject to stricter standards is ‘‘significantly 
undercapitalized’’ if it is significantly below 
the required minimum level for any rel-
evant capital measure. The Board shall de-
fine by rule or regulation the term ‘‘signifi-
cantly undercapitalized’’ at a threshold the 
Board determines to be prudent for the ef-
fective monitoring, management and over-
sight of the financial system. 
(iv) 
CRITICALLY
UNDERCAPITAL-
IZED.—A financial holding company sub-
ject to stricter standards is ‘‘critically 
undercapitalized’’ if it fails to meet any 
level specified in paragraph (4)(C)(i). 
(3) OTHER DEFINITIONS.— 
(A) AVERAGE.—The ‘‘average’’ of an ac-
counting item (such as total assets or tangible 
equity) during a given period means the sum of 
that item at the close of business on each busi-
ness day during that period divided by the total 
number of business days in that period. 
(B) CAPITAL
DISTRIBUTION.—The term 
‘‘capital distribution’’ means— 
(i) a distribution of cash or other 
property by a financial holding company 
subject to stricter standards to its owners 
made on account of that ownership, but 
not including any dividend consisting only 
of shares of the financial holding company 
subject to stricter standards or rights to 
purchase such shares;
(ii) a payment by a financial holding 
company subject to stricter standards to 
repurchase, redeem, retire, or otherwise ac-
quire any of its shares or other ownership 
interests, including any extension of credit 
to finance any person’s acquisition of those 
shares or interests; and 
(iii) a transaction that the Board de-
termines, by order or regulation, to be in 
substance a distribution of capital to the 
owners of the financial holding company 
subject to stricter standards. 
(C) CAPITAL
RESTORATION
PLAN.—The 
term ‘‘capital restoration plan’’ means a plan 
submitted under paragraph (6)(B). 
(D) COMPENSATION.—The term ‘‘com-
pensation’’ includes any payment of money or 
provision of any other thing of value in consid-
eration of employment. 
(E) RELEVANT
CAPITAL
MEASURE.—The 
term ‘‘relevant capital measure’’ means the 
measures described in paragraph (4). 
(F) REQUIRED
MINIMUM
LEVEL.—The 
term ‘‘required minimum level’’ means, with re-
spect to each relevant capital measure, the min-
imum acceptable capital level specified by the 
Board by regulation. 
(G) SENIOR
EXECUTIVE
OFFICER.—The 
term ‘‘senior executive officer’’ has the same 
meaning as the term ‘‘executive officer’’ in sec-
tion 22(h) of the Federal Reserve Act (12 
U.S.C. 375b). 
(4) CAPITAL STANDARDS.— 
(A) RELEVANT CAPITAL MEASURES.— 
(i) IN GENERAL.—Except as provided 
in clause (ii)(II), the capital standards pre-
scribed by the Board under section 
1104(a)(2) shall include— 
(I) a leverage limit; and 
(II) a risk-based capital require-
ment. 
(ii) OTHER CAPITAL MEASURES.—The 
Board may by regulation— 
(I) establish any additional rel-
evant capital measures to carry out 
this section; or 
(II) rescind any relevant capital 
measure required under clause (i) 
upon determining that the measure is
no longer an appropriate means for 
carrying out this section. 
(B) CAPITAL CATEGORIES GENERALLY.— 
The Board shall, by regulation, specify for each 
relevant capital measure the levels at which a 
financial holding company subject to stricter 
standards is well capitalized, undercapitalized, 
and significantly undercapitalized. 
(C) CRITICAL CAPITAL.— 
(i) BOARD TO SPECIFY LEVEL.— 
(I) 
LEVERAGE
LIMIT.—The 
Board shall, by regulation, specify the 
ratio of tangible equity to total assets 
at which a financial holding company 
subject to stricter standards is criti-
cally undercapitalized. 
(II) OTHER RELEVANT CAPITAL 
MEASURES.—The Board may, by reg-
ulation, specify for 1 or more other 
relevant capital measures, the level at 
which a financial holding company 
subject to stricter standards is criti-
cally undercapitalized.
(ii) LEVERAGE
LIMIT
RANGE.—The 
level specified under clause (i)(I) shall re-
quire tangible equity in an amount— 
(I) not less than 2 percent of 
total assets; and 
(II) except as provided in sub-
clause (I), not more than 65 percent 
of the required minimum level of cap-
ital under the leverage limit. 
(5) CAPITAL DISTRIBUTIONS RESTRICTED.— 
(A) IN
GENERAL.—A financial holding 
company subject to stricter standards shall 
make no capital distribution if, after making 
the distribution, the financial holding company 
subject to stricter standards would be under-
capitalized. 
(B) EXCEPTION.—Notwithstanding sub-
paragraph (A), the Board may permit a finan-
cial holding company subject to stricter stand-
ards to repurchase, redeem, retire, or otherwise 
acquire shares or ownership interests if the re-
purchase, redemption, retirement, or other ac-
quisition— 
(i) is made in connection with the 
issuance of additional shares or obligations
of the financial holding company subject to 
stricter standards in at least an equivalent 
amount; and 
(ii) will reduce the financial obliga-
tions of the financial holding company sub-
ject to stricter standards or otherwise im-
prove the financial condition of the finan-
cial holding company subject to stricter 
standards. 
(6) 
PROVISIONS
APPLICABLE
TO
UNDER-
CAPITALIZED
FINANCIAL
HOLDING
COMPANY
SUB-
JECT TO STRICTER STANDARDS.— 
(A) MONITORING REQUIRED.—The Board 
shall— 
(i) closely monitor the condition of 
any undercapitalized financial holding com-
pany subject to stricter standards; 
(ii) closely monitor compliance by any 
undercapitalized financial holding company 
subject to stricter standards with capital 
restoration plans, restrictions, and require-
ments imposed under this section; and 
(iii) periodically review the plan, re-
strictions, and requirements applicable to 
any undercapitalized financial holding com-
pany subject to stricter standards to deter-
mine whether the plan, restrictions, and 
requirements are effective. 
(B) CAPITAL
RESTORATION
PLAN
RE-
QUIRED.— 
(i) IN GENERAL.—Any undercapital-
ized financial holding company subject to 
stricter standards shall submit an accept-
able capital restoration plan to the Board 
within the time allowed by the Board 
under clause (iv). 
(ii) CONTENTS OF PLAN.—The capital 
restoration plan shall— 
(I) specify— 
(aa) the steps the financial 
holding 
company 
subject 
to 
stricter standards will take to be-
come well capitalized; 
(bb) the levels of capital to 
be attained by the financial hold-
ing company subject to stricter 
standards during each year in 
which the plan will be in effect; 
(cc) how the financial hold-
ing company subject to stricter
standards will comply with the 
restrictions or requirements then 
in effect under this section; and 
(dd) the types and levels of 
activities in which the financial 
holding 
company 
subject 
to 
stricter standards will engage; 
and 
(II) contain such other informa-
tion that the Board may require. 
(iii) 
CRITERIA
FOR
ACCEPTING 
PLAN.—The Board shall not accept a cap-
ital restoration plan unless it determines 
that the plan— 
(I) complies with clause (ii); 
(II) is based on realistic assump-
tions, and is likely to succeed in re-
storing the capital of the financial 
holding company subject to stricter 
standards; and 
(III) would not appreciably in-
crease the risk (including credit risk, 
interest-rate risk, and other types of 
risk) to which the financial holding
company subject to stricter standards 
is exposed. 
(iv) DEADLINES FOR SUBMISSION AND 
REVIEW OF PLANS.—The Board shall, by 
regulation, establish deadlines that— 
(I) provide financial holding com-
panies subject to stricter standards 
with reasonable time to submit capital 
restoration plans, and generally re-
quire a financial holding company 
subject to stricter standards to submit 
a plan not later than 45 days after it 
becomes undercapitalized; and 
(II) require the Board to act on 
capital restoration plans expeditiously, 
and generally not later than 60 days 
after the plan is submitted. 
(C) ASSET
GROWTH
RESTRICTED.—An 
undercapitalized financial holding company sub-
ject to stricter standards shall not permit its 
average total assets during any calendar quar-
ter to exceed its average total assets during the 
preceding calendar quarter unless—
(i) the Board has accepted the capital 
restoration plan of the financial holding 
company subject to stricter standards; 
(ii) any increase in total assets is con-
sistent with the plan; and 
(iii) the ratio of tangible equity to 
total assets of the financial holding com-
pany subject to stricter standards increases 
during the calendar quarter at a rate suffi-
cient to enable it to become well capitalized 
within a reasonable time. 
(D) PRIOR APPROVAL REQUIRED FOR AC-
QUISITIONS AND NEW LINES OF BUSINESS.—An 
undercapitalized financial holding company sub-
ject to stricter standards shall not, directly or 
indirectly, acquire any interest in any company 
or insured depository institution, or engage in 
any new line of business, unless— 
(i) the Board has accepted the capital 
restoration plan of the financial holding 
company subject to stricter standards, the 
financial holding company subject to strict-
er standards is implementing the plan, and 
the Board determines that the proposed
action is consistent with and will further 
the achievement of the plan; 
(ii) the Board determines that the 
specific proposed action is appropriate; or 
(iii) the Board has exempted the fi-
nancial holding company subject to stricter 
standards from the requirements of this 
paragraph with respect to the class of ac-
quisitions that includes the proposed ac-
tion. 
(E) DISCRETIONARY
SAFEGUARDS.—The 
Board may, with respect to any undercapital-
ized financial holding company subject to strict-
er standards, take actions described in any 
clause of paragraph (7)(B) if the Board deter-
mines that those actions are necessary. The 
Board, in determining whether to impose any 
requirement under this subparagraph that is 
likely to have a significant effect on a function-
ally regulated subsidiary, subsidiary depository 
institution, or insurance company subsidiary of 
a financial holding company subject to stricter 
standards, shall consult with the primary finan-
cial regulatory agency for such subsidiary. In 
the case of an insurance company subsidiary of
a financial holding company subject to stricter 
standards, the Board shall consult with the 
Federal Insurance Office. 
(7) PROVISIONS APPLICABLE TO SIGNIFICANTLY 
UNDERCAPITALIZED
FINANCIAL
HOLDING
COMPA-
NIES
SUBJECT
TO
STRICTER
STANDARDS
AND 
UNDERCAPITALIZED
FINANCIAL
HOLDING
COMPA-
NIES SUBJECT TO STRICTER STANDARDS THAT FAIL 
TO SUBMIT AND IMPLEMENT CAPITAL RESTORATION 
PLANS.— 
(A) IN
GENERAL.—This paragraph shall 
apply with respect to any financial holding com-
pany subject to stricter standards that— 
(i) is significantly undercapitalized; or 
(ii) is undercapitalized and— 
(I) fails to submit an acceptable 
capital restoration plan within the 
time allowed by the Board under 
paragraph (6)(B)(iv); or 
(II) fails in any material respect 
to implement a capital restoration 
plan accepted by the Board. 
(B) SPECIFIC ACTIONS AUTHORIZED.—The 
Board shall carry out this paragraph by taking 
1 or more of the following actions—
(i) REQUIRING RECAPITALIZATION.— 
Doing one or more of the following: 
(I) Requiring the financial hold-
ing company subject to stricter stand-
ards to sell enough shares or obliga-
tions of the financial holding company 
subject to stricter standards so that 
the financial holding company subject 
to stricter standards will be well cap-
italized after the sale. 
(II) Further requiring that in-
struments sold under subclause (I) be 
voting shares. 
(III) 
Requiring 
the 
financial 
holding company subject to stricter 
standards to be acquired by or com-
bine with another company. 
(ii) 
RESTRICTING
TRANSACTIONS 
WITH AFFILIATES.— 
(I) Requiring the financial hold-
ing company subject to stricter stand-
ards to comply with section 23A of 
the Federal Reserve Act (12 U.S.C. 
371c), as if it were a member bank.
(II) 
Further 
restricting 
the 
transactions of the financial holding 
company subject to stricter standards 
with affiliates and insiders. 
(iii) RESTRICTING ASSET GROWTH.— 
Restricting the asset growth of the finan-
cial holding company subject to stricter 
standards more stringently than paragraph 
(6)(C), or requiring the financial holding 
company subject to stricter standards to 
reduce its total assets. 
(iv) RESTRICTING
ACTIVITIES.—Re-
quiring the financial holding company sub-
ject to stricter standards or any of its sub-
sidiaries to alter, reduce, or terminate any 
activity that the Board determines poses 
excessive risk to the financial holding com-
pany subject to stricter standards. 
(v) IMPROVING MANAGEMENT.—Doing 
one or more of the following: 
(I) NEW
ELECTION
OF
DIREC-
TORS.—Ordering a new election for 
the board of directors of the financial 
holding company subject to stricter 
standards.
(II) DISMISSING
DIRECTORS
OR 
SENIOR
EXECUTIVE
OFFICERS.—Re-
quiring the financial holding company 
subject to stricter standards to dis-
miss from office any director or senior 
executive officer who had held office 
for more than 180 days immediately 
before the financial holding company 
subject to stricter standards became 
undercapitalized. Dismissal under this 
clause shall not be construed to be a 
removal under section 8 of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1818). 
(III) 
EMPLOYING
QUALIFIED 
SENIOR
EXECUTIVE
OFFICERS.—Re-
quiring the financial holding company 
subject to stricter standards to employ 
qualified 
senior 
executive 
officers 
(who, if the Board so specifies, shall 
be subject to approval by the Board). 
(vi) REQUIRING
DIVESTITURE.—Re-
quiring the financial holding company sub-
ject to stricter standards to divest itself of 
or liquidate any subsidiary if the Board de-
termines that the subsidiary is in danger 
of becoming insolvent, poses a significant 
risk to the financial holding company sub-
ject to stricter standards, or is likely to 
cause a significant dissipation of the assets 
or earnings of the financial holding com-
pany subject to stricter standards. 
(vii) REQUIRING OTHER ACTION.—Re-
quiring the financial holding company sub-
ject to stricter standards to take any other 
action that the Board determines will bet-
ter carry out the purpose of this section 
than any of the actions described in this 
subparagraph. 
(C) PRESUMPTION IN FAVOR OF CERTAIN 
ACTIONS.—In complying with subparagraph 
(B), the Board shall take the following actions, 
unless the Board determines that the actions 
would not be appropriate: 
(i) The action described in subclause 
(I) or (III) of subparagraph (B)(i) (relat-
ing to requiring the sale of shares or obli-
gations, or requiring the financial holding 
company subject to stricter standards to be
acquired by or combine with another com-
pany). 
(ii) The action described in subpara-
graph (B)(ii) (relating to restricting trans-
actions with affiliates). 
(D) SENIOR EXECUTIVE OFFICERS’ COM-
PENSATION RESTRICTED.— 
(i) IN GENERAL.—The financial hold-
ing company subject to stricter standards 
shall not do any of the following without 
the prior written approval of the Board: 
(I) Pay any bonus to any senior 
executive officer. 
(II) Provide compensation to any 
senior executive officer at a rate ex-
ceeding that officer’s average rate of 
compensation 
(excluding 
bonuses, 
stock options, and profit-sharing) dur-
ing the 12 calendar months preceding 
the calendar month in which the fi-
nancial holding company subject to 
stricter 
standards 
became 
under-
capitalized. 
(ii) FAILING TO SUBMIT PLAN.—The 
Board shall not grant any approval under
clause (i) with respect to a financial hold-
ing company subject to stricter standards 
that has failed to submit an acceptable 
capital restoration plan. 
(E) CONSULTATION
WITH
OTHER
REGU-
LATORS.—Before the Board makes a deter-
mination under subparagraph (B)(vi) with re-
spect to a subsidiary that is a broker, dealer, 
government securities broker, government secu-
rities dealer, investment company, or invest-
ment adviser, the Board shall consult with the 
Securities and Exchange Commission and, in 
the case of any other subsidiary which is sub-
ject to any financial responsibility or capital re-
quirement, any other appropriate regulator of 
such subsidiary with respect to the proposed de-
termination of the Board and actions pursuant 
to such determination. 
(8) MORE STRINGENT TREATMENT BASED ON 
OTHER SUPERVISORY CRITERIA.— 
(A) IN
GENERAL.—If the Board deter-
mines (after notice and an opportunity for 
hearing) that a financial holding company sub-
ject to stricter standards is in an unsafe or un-
sound condition or, pursuant to section 8(b)(8)
of the Federal Deposit Insurance Act (12 
U.S.C. 1818(b)(8)), deems the financial holding 
company subject to stricter standards to be en-
gaging in an unsafe or unsound practice, the 
Board may— 
(i) if the financial holding company 
subject to stricter standards is well capital-
ized, require the financial holding company 
subject to stricter standards to comply 
with one or more provisions of paragraphs 
(6) and (7), as if the institution were 
undercapitalized; or 
(ii) if the financial holding company 
subject to stricter standards is under-
capitalized, take any one or more actions 
authorized under paragraph (7)(B) as if 
the financial holding company subject to 
stricter standards were significantly under-
capitalized, after consultation with the pri-
mary financial regulatory agency for any 
functionally 
regulated 
subsidiary, 
sub-
sidiary depository institution, or insurance 
company subsidiary that is likely to be sig-
nificantly affected by such actions. In the 
case of an insurance company subsidiary of
a financial holding company subject to 
stricter standards, the Board shall consult 
with the Federal Insurance Office. 
(B) CONTENTS
OF
PLAN.—A plan that 
may be required pursuant to subparagraph 
(A)(i) shall specify the steps that the financial 
holding company subject to stricter standards 
will take to correct the unsafe or unsound con-
dition or practice. 
(9) IMPLEMENTATION.—The Board shall pre-
scribe such regulations, issue such orders, and take 
such other actions the Board determines to be nec-
essary to carry out this subsection. 
(10) OTHER AUTHORITY NOT AFFECTED.—This 
section does not limit any authority of the Board, 
any other Federal regulatory agency, or a State to 
take action in addition to (but not in derogation of) 
that required under this section. 
(11) CONSULTATION.—The Board and the Sec-
retary of the Treasury shall consult with their for-
eign counterparts and through appropriate multilat-
eral organizations to reach agreement to extend 
comprehensive and robust prudential supervision and 
regulation to all highly leveraged and substantially 
interconnected financial companies.
(12) ADMINISTRATIVE
REVIEW
OF
DISMISSAL 
ORDERS.— 
(A) TIMELY PETITION REQUIRED.—A di-
rector or senior executive officer dismissed pur-
suant 
to 
an 
order 
under 
paragraph 
(7)(B)(v)(II) may obtain review of that order 
by filing a written petition for reinstatement 
with the Board not later than 10 days after re-
ceiving notice of the dismissal. 
(B) PROCEDURE.— 
(i) HEARING REQUIRED.—The Board 
shall give the petitioner an opportunity 
to— 
(I) submit written materials in 
support of the petition; and 
(II) 
appear, 
personally 
or 
through counsel, before 1 or more 
members of the Board or designated 
employees of the Board. 
(ii) DEADLINE
FOR
HEARING.—The 
Board shall— 
(I) schedule the hearing referred 
to in clause (i)(II) promptly after the 
petition is filed; and
(II) hold the hearing not later 
than 30 days after the petition is 
filed, unless the petitioner requests 
that the hearing be held at a later 
time. 
(iii) DEADLINE FOR DECISION.—Not 
later than 60 days after the date of the 
hearing, the Board shall— 
(I) by order, grant or deny the 
petition; 
(II) if the order is adverse to the 
petitioner, set forth the basis for the 
order; and 
(III) notify the petitioner of the 
order. 
(C) STANDARD FOR REVIEW OF DISMISSAL 
ORDERS.—The petitioner shall bear the burden 
of proving that the petitioner’s continued em-
ployment would materially strengthen the abil-
ity of the financial holding company subject to 
stricter standards— 
(i) to become well capitalized, to the 
extent that the order is based on the cap-
ital level of the financial holding company 
subject to stricter standards or such com-
pany’s failure to submit or implement a 
capital restoration plan; and 
(ii) to correct the unsafe or unsound 
condition or unsafe or unsound practice, to 
the extent that the order is based on para-
graph (8)(A). 
(13) ENFORCEMENT AUTHORITY FOR FOREIGN 
FINANCIAL HOLDING COMPANY SUBJECT TO STRICT-
ER STANDARDS.— 
(A) TERMINATION
AUTHORITY.—If the 
Board believes that a condition, practice, or ac-
tivity of a foreign financial holding company 
subject to stricter standards does not comply 
with this title or the rules or orders prescribed 
by the Board under this title or otherwise poses 
a threat to financial stability, the Board may, 
after notice and opportunity for a hearing, take 
such actions as necessary to mitigate such risk, 
including ordering a foreign financial holding 
company subject to stricter standards in the 
United States to terminate the activities of such 
branch, agency, or subsidiary. 
(B) DISCRETION TO DENY HEARING.—The 
Board may issue an order under paragraph (1) 
without providing for an opportunity for a hear-
ing if the Board determines that expeditious ac-
tion is necessary in order to protect the public 
interest. 
(f) REPORTS REGARDING RAPID AND ORDERLY RES-
OLUTION AND CREDIT EXPOSURE.— 
(1) IN
GENERAL.—The Board shall require 
each financial holding company subject to stricter 
standards incorporated or organized in the United 
States to report periodically to the Board on— 
(A) its plan for rapid and orderly resolu-
tion in the event of severe financial distress; 
(B) the nature and extent to which the fi-
nancial holding company subject to stricter 
standards has credit exposure to other signifi-
cant financial companies; and 
(C) the nature and extent to which other 
significant financial companies have credit ex-
posure to the financial holding company subject 
to stricter standards. 
(2) NO LIMITING EFFECT.—A rapid resolution 
plan submitted in accordance with this subsection 
shall not be binding on a receiver appointed under 
subtitle G, a bankruptcy court, or any other author-
ity that is authorized or required to resolve the fi-
nancial holding company subject to stricter stand-
ards or any of its subsidiaries or affiliates. 
(3) REPORTING TRIGGERED BY STRESS TEST 
RESULTS.— 
(A) FINANCIAL HOLDING COMPANIES SUB-
JECT
TO
STRICTER
STANDARDS.—Each time 
the results of a quarterly stress test under base-
line or adverse conditions conducted by a finan-
cial holding company subject to stricter stand-
ards under section 1114(a) or the results of a 
stress test of that financial holding company 
subject to stricter standards conducted by the 
Board under subsection (g) indicate that the fi-
nancial holding company subject to stricter 
standards is, in the determination of the Board, 
significantly or critically undercapitalized, that 
financial holding company subject to stricter 
standards shall submit a rapid resolution plan 
in accordance with this subsection that has 
been revised to address the causes of those re-
sults. 
(B) FINANCIAL COMPANIES THAT ARE NOT 
FINANCIAL HOLDING COMPANIES SUBJECT TO 
STRICTER STANDARDS.—Each time the results 
of a semiannual stress test under baseline or
adverse conditions conducted by a financial 
company under section 1114(b) indicate that 
the financial company is, in the determination 
of the Board, significantly or critically under-
capitalized, that financial company shall be re-
quired to report under this subsection. The 
Board shall prescribe regulations establishing 
expedited procedures for such reporting. 
(C) TRANSPARENCY.—Any rapid resolution 
plan submitted pursuant to this paragraph shall 
be subject to any restrictions regarding the dis-
closure of any other rapid resolution plan sub-
mitted pursuant to this subsection. 
(g) STRESS TESTS.— 
(1) The Board, in coordination with the appro-
priate primary financial regulatory agency, shall 
conduct annual stress tests of each financial holding 
company subject to stricter standards. The Board 
may, as the Board determines appropriate, conduct 
stress tests of financial companies that are not fi-
nancial holding companies subject to stricter stand-
ards. The Board shall publish a summary of the re-
sults of such stress tests. 
(2) The Board shall issue regulations to define 
the term ‘‘stress test’’ for purposes of this sub-
section. Such a definition shall provide for not less 
than 3 different sets of conditions under which a 
stress test should be conducted: baseline, adverse, 
and severely adverse scenarios. 
(h) AVOIDING DUPLICATION.—The Board shall take 
any action the Board deems appropriate to avoid imposing 
duplicative requirements under this subtitle for financial 
holding companies subject to stricter standards that are 
also bank holding companies. 
(i) RESOLUTION PLANS REQUIRED.— 
(1) IN
GENERAL.—The Corporation and the 
Board, after consultation with the Council, shall 
jointly issue regulations requiring financial holding 
companies subject to stricter standards to develop 
plans designed to assist in the rapid and orderly res-
olution of the company. 
(2) STANDARDS FOR RESOLUTION PLANS.—The 
regulations required by paragraph (1) shall— 
(A) define the scope of financial holding 
companies subject to stricter standards covered 
by these requirements and may exempt finan-
cial holding companies subject to stricter stand-
ards from the requirements of this subsection if 
the Corporation and the Board jointly deter-
100 
mine that exemption is consistent with the pur-
poses of this title; 
(B) require each plan to demonstrate that 
any insured depository institution affiliated 
with a financial holding company subject to 
stricter standards is adequately insulated from 
the activities of any non-bank subsidiary of the 
institution or financial holding companies sub-
ject to stricter standards; 
(C) require that each plan include informa-
tion detailing— 
(i) the nature and extent to which the 
financial holding company subject to strict-
er standards has credit exposure to other 
significant financial companies; 
(ii) the nature and extent to which 
other significant financial companies have 
credit exposure to the financial holding 
company subject to stricter standards; 
(iii) full descriptions of the financial 
holding company subject to stricter stand-
ards’ ownership structure, assets, liabil-
ities, and contractual obligations; and 
(iv) the cross-guarantees tied to dif-
ferent securities, a list of major counter-
101 
parties, and a process for determining 
where the financial holding company sub-
ject to stricter standards’ collateral is 
pledged; and 
(D) establish such other standards as the 
Corporation and the Board may jointly deem 
necessary to carry out this subsection. 
(3) REVIEW OF PLANS.— 
(A) SUBMISSION OF PLANS.—Each finan-
cial holding company subject to stricter stand-
ards that is subject to the requirement under 
paragraph (1) shall submit its plan to the Cor-
poration and the Board. 
(B) REVIEW.—Upon the submission of a 
plan pursuant to subparagraph (A), and not 
less often than annually thereafter, the Cor-
poration and the Board, after consultation with 
any Federal financial regulatory agencies with 
jurisdiction over the financial holding company 
subject to stricter standards (and, if the finan-
cial holding company subject to stricter stand-
ards is an insurance company, the Federal In-
surance Office), shall jointly review such plan 
and may require a financial holding company 
subject to stricter standards to revise its plan
102 
consistent with the standards established pursu-
ant to paragraph (2). 
(4) ENFORCEMENT.— 
(A) IN GENERAL.—The Corporation, after 
consultation with the Board, shall have the au-
thority to take any enforcement action in sec-
tion 8 of the Federal Deposit Insurance Act (12 
U.S.C. 1818) against any financial holding 
company subject to stricter standards that fails 
to comply with the requirements of this section 
or any regulations issued pursuant to this sec-
tion. 
(B) NO LIMITATION ON BOARD AUTHOR-
ITY.—Nothing under this subsection shall be 
construed as limiting any enforcement authority 
available to the Board under any other provi-
sion of law. 
(5) NO
LIMITING
EFFECT
ON
RECEIVER.—A 
rapid resolution plan submitted under this section 
shall not be binding on a receiver appointed under 
subtitle G, a bankruptcy court, or any other author-
ity that is authorized or required to resolve the fi-
nancial holding company subject to stricter stand-
ards or any of its subsidiaries or affiliates.
103 
(6) NO PRIVATE RIGHT OF ACTION.—No pri-
vate right of action may be based on any resolution 
plan submitted under this section. 
(j) RULE OF CONSTRUCTION REGARDING CONSUMER 
PROTECTION STANDARDS.—The prudential standards im-
posed or recommended by the Board or the Council under 
this section shall not be construed as superseding— 
(1) any consumer protection standards promul-
gated under a State or Federal consumer protection 
law, including the Consumer Financial Protection 
Agency Act and the Federal Trade Commission Act; 
or 
(2) any investor protection standard that pro-
tects consumers (including public reporting require-
ments) imposed under State or Federal securities 
laws, including the Securities Act of 1933, the Secu-
rities Exchange Act of 1934, the Investment Com-
pany Act of 1944, and the Investment Advisors Act 
of 1944. 
(k) RULEMAKING AUTHORITY.—The Board may pre-
scribe such regulations and issue such orders as the 
Board, in consultation with the Council, determines to be 
necessary to carry out the provisions of this subtitle.
104 
SEC. 1105. MITIGATION OF SYSTEMIC RISK. 
(a) COUNCIL AUTHORITY TO RESTRICT OPERATIONS 
AND ACTIVITIES.—If the Council determines, after notice 
and an opportunity for hearing, that despite the higher 
prudential standards imposed pursuant to section 
1104(a)(2), the size of a financial holding company sub-
ject to stricter standards or the scope, nature, scale, con-
centration, interconnectedness, or mix of activities directly 
or indirectly conducted by a financial holding company 
subject to stricter standards poses a grave threat to the 
financial stability or economy of the United States, the 
Council shall require the company to undertake 1 or more 
mitigatory actions described in subsection (d). 
(b) CONSULTATION
WITH
FEDERAL
FINANCIAL 
REGULATORY AGENCIES.—The Council, in determining 
whether to impose any requirement under this section that 
is likely to have a significant impact on a functionally reg-
ulated subsidiary, or a subsidiary depository institution, 
of a financial holding company subject to stricter stand-
ards under this title, shall consult with the Federal finan-
cial regulatory agency for any such subsidiary. With re-
spect to any requirements under this section that is likely 
to have a significant effect on an insurance company, the 
Council shall consult with the Federal Insurance Office. 
(c) FACTORS FOR CONSIDERATION.—In reaching a 
determination described in subsection (a), the Council
106 
(1) IN GENERAL.—Mitigatory action may in-
clude— 
(A) modifying the stricter prudential 
standards imposed pursuant to section 1104(a); 
(B) terminating 1 or more activities; 
(C) imposing conditions on the manner in 
which a financial holding company subject to 
stricter standards conducts 1 or more activities; 
(D) limiting the ability to merge with, ac-
quire, consolidate with, or otherwise become af-
filiated with another company; 
(E) restricting the ability to offer a finan-
cial product or products; and 
(F) in the event the Council deems sub-
paragraphs (A) through (E) inadequate as a 
means to address the identified risks, selling, 
divesting, or otherwise transferring business 
units, branches, assets, or off-balance sheet 
items to unaffiliated companies. 
(2) INTERNATIONAL
COMPETITIVENESS
CON-
SIDERATIONS.—In making any decision pursuant to 
paragraph (1), the Council shall consider— 
(A) the need to maintain the international 
competitiveness of the United States financial 
services industry; and
107 
(B) the extent to which other countries 
with a significant financial services industry 
have established corresponding regimes to miti-
gate threats to financial stability or the econ-
omy posed by financial companies. 
(e) DUE PROCESS.— 
(1) NOTICE AND HEARING.—The Council shall 
give notice to a financial holding company subject to 
stricter standards, and opportunity for hearing if re-
quested, that the financial holding company subject 
to stricter standards is being considered for mitiga-
tory action pursuant to subsection (a). The hearing 
shall occur no later than 30 days after the financial 
company receives notice of the proposed action from 
the Council. 
(2) NOTICE.—The Council shall notify the fi-
nancial holding company subject to stricter stand-
ards of the Council’s determination, and, if the 
Council determines that mitigatory action is appro-
priate, require the company to submit a plan to the 
Council to implement the required mitigatory action. 
(3) SUBMISSION OF PLAN.—The financial hold-
ing company subject to stricter standards shall sub-
mit its proposed plan to implement the required 
mitigatory action or actions to the Council within 60
108 
days from the date it receives notice under para-
graph (2) or such shorter timeframe as the Council 
may require, if the Council determines an emergency 
situation merits expeditious implementation. 
(4) APPROVAL
OR
AMENDMENT
OF
THE 
PLAN.—The Council shall review the plan submitted 
pursuant to paragraph (3) and determine whether 
the plan achieves the goal of mitigating a grave 
threat to the financial stability or the economy of 
the United States. The Council may approve or dis-
approve the plan with or without amendment. 
(5) EFFECT OF PLAN APPROVAL.—The Council 
shall— 
(A) notify a financial holding company 
subject to stricter standards by order, which 
shall be public, that the Council has approved 
the plan with or without amendment; and 
(B) direct the Board to require a financial 
holding company subject to stricter standards 
to comply with the plan to implement mitiga-
tory action or actions within a reasonable time-
frame after the Council’s approval and in ac-
cordance with such deadlines established in the 
plan.
109 
(f) TREASURY SECRETARY CONCURRENCE.—Mitiga-
tory action imposed by the Council involving the sale, di-
vestiture, or transfer of more than $10,000,000,000 in 
total assets by a financial holding company subject to 
stricter standards shall require the Secretary of the Treas-
ury’s concurrence before the issuance of the notice in sub-
section (e)(5)(A). If the sale, divestiture, or transfer of 
total assets by a financial holding company subject to 
stricter standards exceeds $100,000,000,000, the Sec-
retary of the Treasury shall consult with the President be-
fore concurrence. The aforementioned amounts shall be in-
dexed to inflation. 
(g) FAILURE TO IMPLEMENT THE PLAN.—If a finan-
cial holding company subject to stricter standards fails to 
implement a plan for mitigatory action imposed pursuant 
to this section within a reasonable timeframe, the Council 
shall direct the Board to take such actions as necessary 
to ensure compliance with the plan. 
(h) JUDICIAL REVIEW.—For any plan required under 
this section, a financial holding company subject to strict-
er standards may, not later than 30 days after receipt of 
the Council’s notice under subsection (e)(2), bring an ac-
tion in the United States district court for the judicial dis-
trict in which the home office of such company is located, 
or in the United States District Court for the District of
110 
Columbia, for an order requiring that the requirement for 
a mitigatory action be rescinded. Judicial review under 
this section shall be limited to the imposition of a mitiga-
tory action pursuant to subsection (e)(5). In reviewing the 
Council’s imposition of a mitigatory action, the court shall 
rescind or dismiss only those mitigatory actions it finds 
to be imposed in an arbitrary and capricious manner. 
(i) RULE OF CONSTRUCTION.—Nothing in subsection 
(h) shall be construed as limiting the authority of a Fed-
eral financial regulatory agency to take action with respect 
to a financial company subject to the jurisdiction of such 
agency pursuant to applicable law other than this section. 
SEC. 1106. SUBJECTING ACTIVITIES OR PRACTICES TO 
STRICTER PRUDENTIAL STANDARDS FOR FI-
NANCIAL STABILITY PURPOSES. 
(a) IN GENERAL.—The Council may subject a finan-
cial activity or practice to stricter prudential standards 
under this subtitle if the Council determines that the con-
duct, scope, nature, size, scale, concentration, or inter-
connectedness of such activity or practice could create or 
increase the risk of significant liquidity, credit, or other 
problems spreading among financial institutions or mar-
kets and local, minority, or underserved communities, and 
thereby threaten the stability of the financial system or 
economy.
111 
(b) PERIODIC REVIEW
OF ACTIVITY IDENTIFICA-
TIONS.— 
(1) SUBMISSION OF ASSESSMENT.—The Board 
shall periodically submit a report to the Council con-
taining an assessment of whether each activity or 
practice subjected to stricter prudential standards 
should continue to be subject to such standards. 
(2) REVIEW
AND
RECISION.—The Council 
shall— 
(A) review the assessment submitted pur-
suant to paragraph (1) and any information or 
recommendation submitted by members of the 
Council regarding whether a financial activity 
subjected to stricter prudential standards con-
tinues to merit stricter prudential standards; 
and 
(B) rescind the action subjecting an activ-
ity to heightened prudential supervision if the 
Council determines that the activity no longer 
meets the criteria in subsection (a). 
(c) PROCEDURE FOR SUBJECTING OR CEASING TO 
SUBJECT AN ACTIVITY OR PRACTICE TO STRICTER PRU-
DENTIAL STANDARDS.— 
(1) COUNCIL AND BOARD COORDINATION.—The 
Council shall inform the Board if the Council is con-