187 
Securities Reform Act of 2010 (15 U.S.C. 
77d note); or 
‘‘(iv) a final order described in para-
graph (4)(H). 
‘‘(D) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed to limit 
any other authority of the Commission to ex-
empt any person, or any class of persons, from 
any provision of this title, or from any provision 
of any rule or regulation thereunder. 
‘‘(E) DEFINITIONS.—In this paragraph: 
‘‘(i) CONTROL.—The term ‘control’ 
means the power, directly or indirectly, to 
direct the management or policies of a 
company, whether through ownership of 
securities, by contract, or otherwise. There 
is a presumption of control for any person 
who— 
‘‘(I) is a director, general part-
ner, member or manager of a limited 
liability company, or officer exercising 
executive responsibility (or has similar 
status or functions); 
‘‘(II) has the right to vote 20 
percent or more of a class of voting
188 
securities or the power to sell or direct 
the sale of 20 percent or more of a 
class of voting securities; or 
‘‘(III) in the case of a partner-
ship or limited liability company, has 
the right to receive upon dissolution, 
or has contributed, 20 percent or 
more of the capital. 
‘‘(ii) 
ELIGIBLE
PRIVATELY
HELD 
COMPANY.—The term ‘eligible privately 
held company’ means a privately held com-
pany that meets both of the following con-
ditions: 
‘‘(I) The company does not have 
any class of securities registered, or 
required to be registered, with the 
Commission under section 12 or with 
respect to which the company files, or 
is required to file, periodic informa-
tion, documents, and reports under 
subsection (d). 
‘‘(II) In the fiscal year ending 
immediately before the fiscal year in 
which the services of the M&A broker 
are initially engaged with respect to
189 
the securities transaction, the com-
pany meets either or both of the fol-
lowing conditions (determined in ac-
cordance with the historical financial 
accounting records of the company): 
‘‘(aa) The earnings of the 
company before interest, taxes, 
depreciation, and amortization 
are less than $25,000,000. 
‘‘(bb) The gross revenues of 
the 
company 
are 
less 
than 
$250,000,000. 
‘‘(iii) M&A BROKER.—The term ‘M&A 
broker’ means a broker, and any person 
associated with a broker, engaged in the 
business of effecting securities transactions 
solely in connection with the transfer of 
ownership of an eligible privately held com-
pany, regardless of whether the broker acts 
on behalf of a seller or buyer, through the 
purchase, sale, exchange, issuance, repur-
chase, or redemption of, or a business com-
bination involving, securities or assets of 
the eligible privately held company, if the 
broker reasonably believes that—
190 
‘‘(I) upon consummation of the 
transaction, any person acquiring se-
curities or assets of the eligible pri-
vately held company, acting alone or 
in concert, will control and, directly or 
indirectly, will be active in the man-
agement of the eligible privately held 
company or the business conducted 
with the assets of the eligible privately 
held company; and 
‘‘(II) if any person is offered se-
curities in exchange for securities or 
assets of the eligible privately held 
company, such person will, prior to 
becoming legally bound to consum-
mate the transaction, receive or have 
reasonable access to the most recent 
fiscal year-end financial statements of 
the issuer of the securities as custom-
arily prepared by the management of 
the issuer in the normal course of op-
erations and, if the financial state-
ments of the issuer are audited, re-
viewed, or compiled, any related state-
ment by the independent accountant,
191 
a balance sheet dated not more than 
120 days before the date of the offer, 
and information pertaining to the 
management, business, results of op-
erations for the period covered by the 
foregoing financial statements, and 
material loss contingencies of the 
issuer. 
‘‘(iv) PUBLIC SHELL COMPANY.—The 
term ‘public shell company’ is a company 
that at the time of a transaction with an 
eligible privately held company— 
‘‘(I) has any class of securities 
registered, or required to be reg-
istered, with the Commission under 
section 12 or that is required to file 
reports pursuant to subsection (d); 
‘‘(II) has no or nominal oper-
ations; and 
‘‘(III) has— 
‘‘(aa) no or nominal assets; 
‘‘(bb) assets consisting solely 
of cash and cash equivalents; or 
‘‘(cc) assets consisting of 
any amount of cash and cash
192 
equivalents and nominal other as-
sets. 
‘‘(F) INFLATION ADJUSTMENT.— 
‘‘(i) IN GENERAL.—On the date that 
is 5 years after the date of the enactment 
of this paragraph, and every 5 years there-
after, each dollar amount in subparagraph 
(E)(ii)(II) shall be adjusted by— 
‘‘(I) dividing the annual value of 
the Employment Cost Index For 
Wages and Salaries, Private Industry 
Workers (or any successor index), as 
published by the Bureau of Labor 
Statistics, for the calendar year pre-
ceding the calendar year in which the 
adjustment is being made by the an-
nual value of such index (or suc-
cessor) for the calendar year ending 
December 31, 2012; and 
‘‘(II) multiplying such dollar 
amount by the quotient obtained 
under subclause (I). 
‘‘(ii) 
ROUNDING.—Each 
dollar 
amount determined under clause (i) shall
193 
be rounded to the nearest multiple of 
$100,000.’’. 
SEC. 402. EFFECTIVE DATE. 
This subtitle and any amendment made by this sub-
title shall take effect on the date that is 90 days after 
the date of the enactment of this Act. 
Subtitle B—Encouraging Employee 
Ownership 
SEC. 406. INCREASED THRESHOLD FOR DISCLOSURES RE-
LATING TO COMPENSATORY BENEFIT PLANS. 
Not later than 60 days after the date of the enact-
ment of this Act, the Securities and Exchange Commission 
shall revise section 230.701(e) of title 17, Code of Federal 
Regulations, so as to increase from $5,000,000 to 
$20,000,000 the aggregate sales price or amount of secu-
rities sold during any consecutive 12-month period in ex-
cess of which the issuer is required under such section to 
deliver an additional disclosure to investors. The Commis-
sion shall index for inflation such aggregate sales price 
or amount every 5 years to reflect the change in the Con-
sumer Price Index for All Urban Consumers published by 
the Bureau of Labor Statistics, rounding to the nearest 
$1,000,000.
194 
Subtitle C—Small Company 
Disclosure Simplification 
SEC. 411. EXEMPTION FROM XBRL REQUIREMENTS FOR 
EMERGING GROWTH COMPANIES AND OTHER 
SMALLER COMPANIES. 
(a) EXEMPTION FOR EMERGING GROWTH COMPA-
NIES.—Emerging growth companies are exempted from 
the requirements to use Extensible Business Reporting 
Language (XBRL) for financial statements and other 
periodic reporting required to be filed with the Commis-
sion under the securities laws. Such companies may elect 
to use XBRL for such reporting. 
(b) EXEMPTION
FOR
OTHER
SMALLER
COMPA-
NIES.—Issuers with total annual gross revenues of less 
than $250,000,000 are exempt from the requirements to 
use XBRL for financial statements and other periodic re-
porting required to be filed with the Commission under 
the securities laws. Such issuers may elect to use XBRL 
for such reporting. An exemption under this subsection 
shall continue in effect until— 
(1) the date that is five years after the date of 
enactment of this Act; or 
(2) the date that is two years after a deter-
mination by the Commission, by order after con-
ducting the analysis required by section 3, that the
195 
benefits of such requirements to such issuers out-
weigh the costs, but no earlier than three years after 
enactment of this Act. 
(c) MODIFICATIONS
TO REGULATIONS.—Not later 
than 60 days after the date of enactment of this Act, the 
Commission shall revise its regulations under parts 229, 
230, 232, 239, 240, and 249 of title 17, Code of Federal 
Regulations, to reflect the exemptions set forth in sub-
sections (a) and (b). 
SEC. 412. ANALYSIS BY THE SEC. 
The Commission shall conduct an analysis of the 
costs and benefits to issuers described in section 411(b) 
of the requirements to use XBRL for financial statements 
and other periodic reporting required to be filed with the 
Commission under the securities laws. Such analysis shall 
include an assessment of— 
(1) how such costs and benefits may differ from 
the costs and benefits identified by the Commission 
in the order relating to interactive data to improve 
financial reporting (dated January 30, 2009; 74 
Fed. Reg. 6776) because of the size of such issuers; 
(2) the effects on efficiency, competition, capital 
formation, and financing and on analyst coverage of 
such issuers (including any such effects resulting 
from use of XBRL by investors);
196 
(3) the costs to such issuers of— 
(A) submitting data to the Commission in 
XBRL; 
(B) posting data on the website of the 
issuer in XBRL; 
(C) software necessary to prepare, submit, 
or post data in XBRL; and 
(D) any additional consulting services or 
filing agent services; 
(4) the benefits to the Commission in terms of 
improved ability to monitor securities markets, as-
sess the potential outcomes of regulatory alter-
natives, and enhance investor participation in cor-
porate governance and promote capital formation; 
and 
(5) the effectiveness of standards in the United 
States for interactive filing data relative to the 
standards of international counterparts. 
SEC. 413. REPORT TO CONGRESS. 
Not later than one year after the date of enactment 
of this Act, the Commission shall provide the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate a report regarding—
197 
(1) the progress in implementing XBRL report-
ing within the Commission; 
(2) the use of XBRL data by Commission offi-
cials; 
(3) the use of XBRL data by investors; 
(4) the results of the analysis required by sec-
tion 412; and 
(5) any additional information the Commission 
considers relevant for increasing transparency, de-
creasing costs, and increasing efficiency of regu-
latory filings with the Commission. 
SEC. 414. DEFINITIONS. 
As used in this subtitle, the terms ‘‘Commission’’, 
‘‘emerging growth company’’, ‘‘issuer’’, and ‘‘securities 
laws’’ have the meanings given such terms in section 3 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c). 
Subtitle 
D—Securities 
and 
Ex-
change 
Commission 
Overpay-
ment Credit 
SEC. 416. REFUNDING OR CREDITING OVERPAYMENT OF 
SECTION 31 FEES. 
(a) IN GENERAL.—Section 31 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78ee) is amended by add-
ing at the end the following:
198 
‘‘(n) OVERPAYMENT.—If a national securities ex-
change or national securities association pays to the Com-
mission an amount in excess of fees and assessments due 
under this section and informs the Commission of such 
amount paid in excess within 10 years of the date of the 
payment, the Commission shall offset future fees and as-
sessments due by such exchange or association in an 
amount equal to such excess amount.’’. 
(b) APPLICABILITY.—The amendment made by this 
section shall apply to any fees and assessments paid be-
fore, on, or after the date of enactment of this section. 
Subtitle E—Fair Access to 
Investment Research 
SEC. 421. SAFE HARBOR FOR INVESTMENT FUND RE-
SEARCH. 
(a) EXPANSION OF THE SAFE HARBOR.—Not later 
than the end of the 45-day period beginning on the date 
of enactment of this Act, the Securities and Exchange 
Commission shall propose, and not later than the end of 
the 120-day period beginning on such date, the Commis-
sion shall adopt, upon such terms, conditions, or require-
ments as the Commission may determine necessary or ap-
propriate in the public interest, for the protection of inves-
tors, and for the promotion of capital formation, revisions 
to section 230.139 of title 17, Code of Federal Regula-
199 
tions, to provide that a covered investment fund research 
report that is published or distributed by a broker or deal-
er— 
(1) shall be deemed, for purposes of sections 
2(a)(10) and 5(c) of the Securities Act of 1933 (15 
U.S.C. 77b(a)(10), 77e(c)), not to constitute an 
offer for sale or an offer to sell a security that is the 
subject of an offering pursuant to a registration 
statement that is effective, even if the broker or 
dealer is participating or will participate in the reg-
istered offering of the covered investment fund’s se-
curities; and 
(2) shall be deemed to satisfy the conditions of 
subsection (a)(1) or (a)(2) of section 230.139 of title 
17, Code of Federal Regulations, or any successor 
provisions, for purposes of the Commission’s rules 
and regulations under the Federal securities laws 
and the rules of any self-regulatory organization. 
(b) IMPLEMENTATION OF SAFE HARBOR.—In imple-
menting the safe harbor pursuant to subsection (a), the 
Commission shall— 
(1) not, in the case of a covered investment 
fund with a class of securities in substantially con-
tinuous distribution, condition the safe harbor on 
whether the broker’s or dealer’s publication or dis-
200 
tribution of a covered investment fund research re-
port constitutes such broker’s or dealer’s initiation 
or reinitiation of research coverage on such covered 
investment fund or its securities; 
(2) not— 
(A) require the covered investment fund to 
have been registered as an investment company 
under the Investment Company Act of 1940 
(15 U.S.C. 80a–1 et seq.) or subject to the re-
porting requirements of section 13 or 15(d) of 
the Securities Exchange Act of 1934 (15 
U.S.C. 78m, 78o(d)) for any period exceeding 
the period of time referenced under paragraph 
(a)(1)(i)(A)(1) of section 230.139 of title 17, 
Code of Federal Regulations; or 
(B) impose a minimum float provision ex-
ceeding 
that 
referenced 
in 
paragraph 
(a)(1)(i)(A)(1)(i) of section 230.139 of title 17, 
Code of Federal Regulations; 
(3) provide that a self-regulatory organization 
may not maintain or enforce any rule that would— 
(A) prohibit the ability of a member to 
publish or distribute a covered investment fund 
research report solely because the member is 
also participating in a registered offering or
201 
other distribution of any securities of such cov-
ered investment fund; or 
(B) prohibit the ability of a member to 
participate in a registered offering or other dis-
tribution of securities of a covered investment 
fund solely because the member has published 
or distributed a covered investment fund re-
search report about such covered investment 
fund or its securities; and 
(4) provide that a covered investment fund re-
search report shall not be subject to section 24(b) of 
the Investment Company Act of 1940 (15 U.S.C. 
80a–24(b)) or the rules and regulations thereunder, 
except that such report may still be subject to such 
section and the rules and regulations thereunder to 
the extent that it is otherwise not subject to the con-
tent standards in the rules of any self-regulatory or-
ganization related to research reports, including 
those contained in the rules governing communica-
tions with the public regarding investment compa-
nies or substantially similar standards. 
(c) RULES OF CONSTRUCTION.—Nothing in this Act 
shall be construed as in any way limiting— 
(1) the applicability of the antifraud or 
antimanipulation provisions of the Federal securities
202 
laws and rules adopted thereunder to a covered in-
vestment fund research report, including section 17 
of the Securities Act of 1933 (15 U.S.C. 77q), sec-
tion 34(b) of the Investment Company Act of 1940 
(15 U.S.C. 80a–33), and sections 9 and 10 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78i, 
78j); or 
(2) the authority of any self-regulatory organi-
zation to examine or supervise a member’s practices 
in connection with such member’s publication or dis-
tribution of a covered investment fund research re-
port for compliance with applicable provisions of the 
Federal securities laws or self-regulatory organiza-
tion rules related to research reports, including those 
contained in rules governing communications with 
the public. 
(d) INTERIM EFFECTIVENESS OF SAFE HARBOR.— 
(1) IN GENERAL.—From and after the 120-day 
period beginning on the date of enactment of this 
Act, if the Commission has not adopted revisions to 
section 230.139 of title 17, Code of Federal Regula-
tions, as required by subsection (a), and until such 
time as the Commission has done so, a broker or 
dealer distributing or publishing a covered invest-
ment fund research report after such date shall be
203 
able to rely on the provisions of section 230.139 of 
title 17, Code of Federal Regulations, and the 
broker or dealer’s publication of such report shall be 
deemed to satisfy the conditions of subsection (a)(1) 
or (a)(2) of section 230.139 of title 17, Code of Fed-
eral Regulations, if the covered investment fund that 
is the subject of such report satisfies the reporting 
history requirements (without regard to Form S–3 
or Form F–3 eligibility) and minimum float provi-
sions of such subsections for purposes of the Com-
mission’s rules and regulations under the Federal 
securities laws and the rules of any self-regulatory 
organization, as if revised and implemented in ac-
cordance with subsections (a) and (b). 
(2) STATUS OF COVERED INVESTMENT FUND.— 
After such period and until the Commission has 
adopted revisions to section 230.139 and FINRA 
has revised rule 2210, for purposes of subsection 
(c)(7)(O) of such rule, a covered investment fund 
shall be deemed to be a security that is listed on a 
national securities exchange and that is not subject 
to section 24(b) of the Investment Company Act of 
1940 (15 U.S.C. 80a–24(b)). Communications con-
cerning only covered investment funds that fall with-
204 
in the scope of such section shall not be required to 
be filed with FINRA. 
(e) DEFINITIONS.—For purposes of this section: 
(1) The term ‘‘covered investment fund re-
search report’’ means a research report published or 
distributed by a broker or dealer about a covered in-
vestment fund or any securities issued by the cov-
ered investment fund, but not including a research 
report to the extent that it is published or distrib-
uted by the covered investment fund or any affiliate 
of the covered investment fund. 
(2) The term ‘‘covered investment fund’’ 
means— 
(A) an investment company registered 
under, or that has filed an election to be treated 
as a business development company under, the 
Investment Company Act of 1940 and that has 
filed a registration statement under the Securi-
ties Act of 1933 for the public offering of a 
class of its securities, which registration state-
ment has been declared effective by the Com-
mission; and 
(B) a trust or other person— 
(i) issuing securities in an offering 
registered under the Securities Act of 1933
205 
and which class of securities is listed for 
trading on a national securities exchange; 
(ii) the assets of which consist pri-
marily of commodities, currencies, or deriv-
ative instruments that reference commod-
ities or currencies, or interests in the fore-
going; and 
(iii) that provides in its registration 
statement under the Securities Act of 1933 
that a class of its securities are purchased 
or redeemed, subject to conditions or limi-
tations, for a ratable share of its assets. 
(3) The term ‘‘FINRA’’ means the Financial 
Industry Regulatory Authority. 
(4) The term ‘‘research report’’ has the mean-
ing given that term under section 2(a)(3) of the Se-
curities Act of 1933 (15 U.S.C. 77b(a)(3)), except 
that such term shall not include an oral communica-
tion. 
(5) The term ‘‘self-regulatory organization’’ has 
the meaning given to that term under section 
3(a)(26) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)(26)).
206 
Subtitle F—Accelerating Access to 
Capital 
SEC. 426. EXPANDED ELIGIBILITY FOR USE OF FORM S–3. 
Not later than 45 days after the date of the enact-
ment of this Act, the Securities and Exchange Commission 
shall revise Form S–3— 
(1) so as to permit securities to be registered 
pursuant to General Instruction I.B.1. of such form 
provided that either— 
(A) the aggregate market value of the vot-
ing and non-voting common equity held by non- 
affiliates of the registrant is $75,000,000 or 
more; or 
(B) the registrant has at least one class of 
common equity securities listed and registered 
on a national securities exchange; and 
(2) so as to remove the requirement of para-
graph (c) from General Instruction I.B.6. of such 
form. 
Subtitle G—Enhancing the RAISE 
Act 
SEC. 
431. 
CERTAIN 
ACCREDITED 
INVESTOR 
TRANS-
ACTIONS. 
Section 4 of the Securities Act of 1933 (15 U.S.C. 
77d) is amended—
207 
(1) by amending subsection (d) to read as fol-
lows: 
‘‘(d)(1) The transactions referred to in subsection 
(a)(7) are transactions where— 
‘‘(A) each purchaser is an accredited investor, 
as that term is defined in section 230.501(a) of title 
17, Code of Federal Regulations (or any successor 
thereto); and 
‘‘(B) if any securities sold in reliance on sub-
section (a)(7) are offered by means of any general 
solicitation or general advertising, all such sales are 
made through a platform available only to accredited 
investors. 
‘‘(2) Securities sold in reliance on subsection (a)(7) 
shall be deemed to have been acquired in a transaction 
not involving any public offering. 
‘‘(3) The exemption provided by this subsection shall 
not be available for a transaction where the seller is— 
‘‘(A) an issuer, its subsidiaries or parent; 
‘‘(B) an underwriter acting on behalf of the 
issuer, its subsidiaries or parent, which receives com-
pensation from the issuer with respect to such sale; 
or 
‘‘(C) a dealer.
208 
‘‘(4) A transaction meeting the requirements of this 
subsection shall be deemed not to be a distribution for 
purposes of section 2(a)(11).’’; and 
(2) by striking subsection (e). 
Subtitle H—Small Business Credit 
Availability 
SEC. 436. BUSINESS DEVELOPMENT COMPANY OWNERSHIP 
OF SECURITIES OF INVESTMENT ADVISERS 
AND CERTAIN FINANCIAL COMPANIES. 
(a) IN GENERAL.—Section 60 of the Investment 
Company Act of 1940 (15 U.S.C. 80a–59) is amended— 
(1) by striking ‘‘Notwithstanding’’ and insert-
ing ‘‘(a) Notwithstanding’’; 
(2) by striking ‘‘except that the Commission 
shall not’’ and inserting the following: ‘‘except 
that— 
‘‘(1) section 12 shall not apply to the pur-
chasing, otherwise acquiring, or holding by a busi-
ness development company of any security issued by, 
or any other interest in the business of, any person 
who is an investment adviser registered under title 
II of this Act, who is an investment adviser to an 
investment company, or who is an eligible portfolio 
company; and 
‘‘(2) the Commission shall not’’;
209 
(3) by adding at the end the following: 
‘‘(b) Nothing in this section shall prevent the Com-
mission from issuing rules to address potential conflicts 
of interest between business development companies and 
investment advisers.’’. 
(b) DEFINITION
OF ELIGIBLE PORTFOLIO COM-
PANY.—Section 2(a)(46)(B) of the Investment Company 
Act of 1940 (15 U.S.C. 80a–2(a)(46)(B)) is amended by 
inserting before the semicolon the following: ‘‘(unless it 
is described in paragraph (2), (3), (4), (5), (6), or (9) of 
such section)’’. 
(c) INVESTMENT THRESHOLD.—Section 55(a) of the 
Investment Company Act of 1940 is amended by inserting 
before the colon the following: ‘‘, provided that no more 
than 50 percent of its total assets are assets described 
in section 3(c)’’. 
SEC. 437. EXPANDING ACCESS TO CAPITAL FOR BUSINESS 
DEVELOPMENT COMPANIES. 
(a) IN GENERAL.—Section 61(a) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–60(a)) is amend-
ed— 
(1) by redesignating paragraphs (2) through 
(4) as paragraphs (3) through (5), respectively; 
(2) by striking paragraph (1) and inserting the 
following:
210 
‘‘(1) Except as provided in paragraph (2), the 
asset coverage requirements of subparagraphs (A) 
and (B) of section 18(a)(1) (and any related rule 
promulgated under this Act) applicable to business 
development companies shall be 200 percent. 
‘‘(2) The asset coverage requirements of sub-
paragraphs (A) and (B) of section 18(a)(1) and of 
subparagraphs (A) and (B) of section 18(a)(2) (and 
any related rule promulgated under this Act) appli-
cable to a business development company shall be 
150 percent if— 
‘‘(A) within five business days of the ap-
proval of the adoption of the asset coverage re-
quirements described in clause (ii), the business 
development company discloses such approval 
and the date of its effectiveness in a Form 8– 
K filed with the Commission and in a notice on 
its website and discloses in its periodic filings 
made under section 13 of the Securities and 
Exchange Act of 1934 (15 U.S.C. 78m)— 
‘‘(i) the aggregate value of the senior 
securities issued by such company and the 
asset coverage percentage as of the date of 
such company’s most recent financial 
statements; and
211 
‘‘(ii) that such company has adopted 
the asset coverage requirements of this 
subparagraph and the effective date of 
such requirements; 
‘‘(B) with respect to a business develop-
ment company that issues equity securities that 
are registered on a national securities exchange, 
the periodic filings of the company under sec-
tion 13(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78m) include disclosures rea-
sonably designed to ensure that shareholders 
are informed of— 
‘‘(i) the amount of indebtedness and 
asset coverage ratio of the company, deter-
mined as of the date of the financial state-
ments of the company dated on or most re-
cently before the date of such filing; and 
‘‘(ii) the principal risk factors associ-
ated with such indebtedness, to the extent 
such risk is incurred by the company; and 
‘‘(C)(i) the application of this paragraph to 
the company is approved by the required major-
ity (as defined in section 57(o)) of the directors 
of or general partners of such company who are 
not interested persons of the business develop-
212 
ment company, which application shall become 
effective on the date that is 1 year after the 
date of the approval, and, with respect to a 
business development company that issues eq-
uity securities that are not registered on a na-
tional securities exchange, the company extends, 
to each person who is a shareholder as of the 
date of the approval, an offer to repurchase the 
equity securities held by such person as of such 
approval date, with 25 percent of such securi-
ties to be repurchased in each of the four quar-
ters following such approval date; or 
‘‘(ii) the company obtains, at a special or 
annual meeting of shareholders or partners at 
which a quorum is present, the approval of 
more than 50 percent of the votes cast of the 
application of this paragraph to the company, 
which application shall become effective on the 
date immediately after the date of the ap-
proval.’’; 
(3) in paragraph (3) (as redesignated), by in-
serting ‘‘or which is a stock’’ after ‘‘indebtedness’’; 
(4) in subparagraph (A) of paragraph (4) (as 
redesignated)—
213 
(A) in the matter preceding clause (i), by 
striking ‘‘voting’’; and 
(B) by amending clause (iii) to read as fol-
lows: 
‘‘(iii) the exercise or conversion price 
at the date of issuance of such warrants, 
options, or rights is not less than— 
‘‘(I) the market value of the se-
curities issuable upon the exercise of 
such warrants, options, or rights at 
the date of issuance of such warrants, 
options, or rights; or 
‘‘(II) if no such market value ex-
ists, the net asset value of the securi-
ties issuable upon the exercise of such 
warrants, options, or rights at the 
date of issuance of such warrants, op-
tions, or rights; and’’; and 
(5) by adding at the end the following: 
‘‘(6)(A) Except as provided in subparagraph 
(B), the following shall not apply to a business de-
velopment company: 
‘‘(i) Subparagraphs (C) and (D) of section 
18(a)(2).
214 
‘‘(ii) Subparagraph (E) of section 18(a)(2), 
to the extent such subparagraph requires any 
priority over any other class of stock as to dis-
tribution of assets upon liquidation. 
‘‘(iii) With respect to a senior security 
which is a stock, subsections (c) and (i) of sec-
tion 18. 
‘‘(B) Subparagraph (A) shall not apply with re-
spect to preferred stock issued to a person who is 
not known by the company to be a qualified institu-
tional buyer (as defined in section 3(a) of the Secu-
rities Exchange Act of 1934).’’. 
(b) CONFORMING AMENDMENTS.—The Investment 
Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is amend-
ed— 
(1) in section 57— 
(A) in subsection (j)(1), by striking ‘‘sec-
tion 
61(a)(3)(B)’’ 
and 
inserting 
‘‘section 
61(a)(4)(B)’’; and 
(B) in subsection (n)(2), by striking ‘‘sec-
tion 
61(a)(3)(B)’’ 
and 
inserting 
‘‘section 
61(a)(4)(B)’’; and 
(2) in section 63(3), by striking ‘‘section 
61(a)(3)’’ and inserting ‘‘section 61(a)(4)’’.
215 
SEC. 438. PARITY FOR BUSINESS DEVELOPMENT COMPA-
NIES REGARDING OFFERING AND PROXY 
RULES. 
(a) REVISION TO RULES.—Not later than 1 year 
after the date of enactment of this Act, the Securities and 
Exchange Commission shall revise any rules to the extent 
necessary to allow a business development company that 
has filed an election pursuant to section 54 of the Invest-
ment Company Act of 1940 (15 U.S.C. 80a–53) to use 
the securities offering and proxy rules that are available 
to other issuers that are required to file reports under sec-
tion 13 or section 15(d) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78m; 78o(d)). Any action that the 
Commission takes pursuant to this subsection shall in-
clude the following: 
(1) The Commission shall revise rule 405 under 
the Securities Act of 1933 (17 CFR 230.405)— 
(A) to remove the exclusion of a business 
development company from the definition of a 
well-known seasoned issuer provided by that 
rule; and 
(B) to add registration statements filed on 
Form N–2 to the definition of automatic shelf 
registration statement provided by that rule. 
(2) The Commission shall revise rules 168 and 
169 under the Securities Act of 1933 (17 CFR
216 
230.168 and 230.169) to remove the exclusion of a 
business development company from an issuer that 
can use the exemptions provided by those rules. 
(3) The Commission shall revise rules 163 and 
163A under the Securities Act of 1933 (17 CFR 
230.163 and 230.163A) to remove a business devel-
opment company from the list of issuers that are in-
eligible to use the exemptions provided by those 
rules. 
(4) The Commission shall revise rule 134 under 
the Securities Act of 1933 (17 CFR 230.134) to re-
move the exclusion of a business development com-
pany from that rule. 
(5) The Commission shall revise rules 138 and 
139 under the Securities Act of 1933 (17 CFR 
230.138 and 230.139) to specifically include a busi-
ness development company as an issuer to which 
those rules apply. 
(6) The Commission shall revise rule 164 under 
the Securities Act of 1933 (17 CFR 230.164) to re-
move a business development company from the list 
of issuers that are excluded from that rule. 
(7) The Commission shall revise rule 433 under 
the Securities Act of 1933 (17 CFR 230.433) to 
specifically include a business development company
217 
that is a well-known seasoned issuer as an issuer to 
which that rule applies. 
(8) The Commission shall revise rule 415 under 
the Securities Act of 1933 (17 CFR 230.415)— 
(A) to state that the registration for secu-
rities provided by that rule includes securities 
registered by a business development company 
on Form N–2; and 
(B) to provide an exception for a business 
development company from the requirement 
that a Form N–2 registrant must furnish the 
undertakings required by item 34.4 of Form N– 
2. 
(9) The Commission shall revise rule 497 under 
the Securities Act of 1933 (17 CFR 230.497) to in-
clude a process for a business development company 
to file a form of prospectus that is parallel to the 
process for filing a form of prospectus under rule 
424(b). 
(10) The Commission shall revise rules 172 and 
173 under the Securities Act of 1933 (17 CFR 
230.172 and 230.173) to remove the exclusion of an 
offering of a business development company from 
those rules.
218 
(11) The Commission shall revise rule 418 
under the Securities Act of 1933 (17 CFR 230.418) 
to provide that a business development company 
that would otherwise meet the eligibility require-
ments of General Instruction I.A of Form S–3 shall 
be exempt from paragraph (a)(3) of that rule. 
(12) The Commission shall revise rule 14a–101 
under the Securities Exchange Act of 1934 (17 CFR 
240.14a–101) to provide that a business develop-
ment company that would otherwise meet the re-
quirements of General Instruction I.A of Form S–3 
shall be deemed to meet the requirements of Form 
S–3 for purposes of Schedule 14A. 
(13) The Commission shall revise rule 103 
under Regulation FD (17 CFR 243.103) to provide 
that paragraph (a) of that rule applies for purposes 
of Form N–2. 
(b) REVISION TO FORM N–2.—Not later than 1 year 
after the date of enactment of this Act, the Commission 
shall revise Form N–2— 
(1) to include an item or instruction that is 
similar to item 12 on Form S–3 to provide that a 
business development company that would otherwise 
meet the requirements of Form S–3 shall incor-
porate by reference its reports and documents filed
219 
under the Securities Exchange Act of 1934 into its 
registration statement filed on Form N–2; and 
(2) to include an item or instruction that is 
similar to the instruction regarding automatic shelf 
offerings by well-known seasoned issuers on Form 
S–3 to provide that a business development company 
that is a well-known seasoned issuer may file auto-
matic shelf offerings on Form N–2. 
(c) TREATMENT IF REVISIONS NOT COMPLETED IN 
TIMELY MANNER.—If the Commission fails to complete 
the revisions required by subsections (a) and (b) by the 
time required by such subsections, a business development 
company shall be entitled to treat such revisions as having 
been completed in accordance with the actions required to 
be taken by the Commission by such subsections until such 
time as such revisions are completed by the Commission. 
(d) RULE OF CONSTRUCTION.—Any reference in this 
section to a rule or form means such rule or form or any 
successor rule or form. 
Subtitle I—Fostering Innovation 
SEC. 441. TEMPORARY EXEMPTION FOR LOW-REVENUE 
ISSUERS. 
Section 404 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7262) is amended by adding at the end the fol-
lowing:
220 
‘‘(d) TEMPORARY EXEMPTION FOR LOW-REVENUE 
ISSUERS.— 
‘‘(1) LOW-REVENUE
EXEMPTION.—Subsection 
(b) shall not apply with respect to an audit report 
prepared for an issuer that— 
‘‘(A) ceased to be an emerging growth 
company on the last day of the fiscal year of 
the issuer following the fifth anniversary of the 
date of the first sale of common equity securi-
ties of the issuer pursuant to an effective reg-
istration statement under the Securities Act of 
1933; 
‘‘(B) had average annual gross revenues of 
less than $50,000,000 as of its most recently 
completed fiscal year; and 
‘‘(C) is not a large accelerated filer. 
‘‘(2) EXPIRATION
OF
TEMPORARY
EXEMP-
TION.—An issuer ceases to be eligible for the exemp-
tion described under paragraph (1) at the earliest 
of— 
‘‘(A) the last day of the fiscal year of the 
issuer following the tenth anniversary of the 
date of the first sale of common equity securi-
ties of the issuer pursuant to an effective reg-
221 
istration statement under the Securities Act of 
1933; 
‘‘(B) the last day of the fiscal year of the 
issuer during which the average annual gross 
revenues of the issuer exceed $50,000,000; or 
‘‘(C) the date on which the issuer becomes 
a large accelerated filer. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) AVERAGE
ANNUAL
GROSS
REVE-
NUES.—The term ‘average annual gross reve-
nues’ means the total gross revenues of an 
issuer over its most recently completed three 
fiscal years divided by three. 
‘‘(B) EMERGING GROWTH COMPANY.—The 
term ‘emerging growth company’ has the mean-
ing given such term under section 3 of the Se-
curities Exchange Act of 1934 (15 U.S.C. 78c). 
‘‘(C) LARGE
ACCELERATED
FILER.—The 
term ‘large accelerated filer’ has the meaning 
given that term under section 240.12b–2 of title 
17, Code of Federal Regulations, or any suc-
cessor thereto.’’.
222 
Subtitle J—Small Business Capital 
Formation Enhancement 
SEC. 446. ANNUAL REVIEW OF GOVERNMENT-BUSINESS 
FORUM ON CAPITAL FORMATION. 
Section 503 of the Small Business Investment Incen-
tive Act of 1980 (15 U.S.C. 80c–1) is amended by adding 
at the end the following: 
‘‘(e) The Commission shall— 
‘‘(1) review the findings and recommendations 
of the forum; and 
‘‘(2) each time the forum submits a finding or 
recommendation to the Commission, promptly issue 
a public statement— 
‘‘(A) assessing the finding or recommenda-
tion of the forum; and 
‘‘(B) disclosing the action, if any, the Com-
mission intends to take with respect to the find-
ing or recommendation.’’. 
Subtitle K—Helping Angels Lead 
Our Startups 
SEC. 451. DEFINITION OF ANGEL INVESTOR GROUP. 
As used in this subtitle, the term ‘‘angel investor 
group’’ means any group that—
223 
(1) is composed of accredited investors inter-
ested in investing personal capital in early-stage 
companies; 
(2) holds regular meetings and has defined 
processes and procedures for making investment de-
cisions, either individually or among the membership 
of the group as a whole; and 
(3) is neither associated nor affiliated with bro-
kers, dealers, or investment advisers. 
SEC. 452. CLARIFICATION OF GENERAL SOLICITATION. 
(a) IN GENERAL.—Not later than 6 months after the 
date of enactment of this Act, the Securities and Ex-
change Commission shall revise Regulation D of its rules 
(17 CFR 230.500 et seq.) to require that in carrying out 
the prohibition against general solicitation or general ad-
vertising contained in section 230.502(c) of title 17, Code 
of Federal Regulations, the prohibition shall not apply to 
a presentation or other communication made by or on be-
half of an issuer which is made at an event— 
(1) sponsored by— 
(A) the United States or any territory 
thereof, by the District of Columbia, by any 
State, by a political subdivision of any State or 
territory, or by any agency or public instrumen-
tality of any of the foregoing;
224 
(B) a college, university, or other institu-
tion of higher education; 
(C) a nonprofit organization; 
(D) an angel investor group; 
(E) a venture forum, venture capital asso-
ciation, or trade association; or 
(F) any other group, person or entity as 
the Securities and Exchange Commission may 
determine by rule; 
(2) where any advertising for the event does not 
reference any specific offering of securities by the 
issuer; 
(3) the sponsor of which— 
(A) 
does 
not 
make 
investment 
rec-
ommendations or provide investment advice to 
event attendees; 
(B) does not engage in an active role in 
any investment negotiations between the issuer 
and investors attending the event; 
(C) does not charge event attendees any 
fees other than administrative fees; and 
(D) does not receive any compensation 
with respect to such event that would require 
registration of the sponsor as a broker or a 
dealer under the Securities Exchange Act of
225 
1934, or as an investment advisor under the In-
vestment Advisers Act of 1940; and 
(4) where no specific information regarding an 
offering of securities by the issuer is communicated 
or distributed by or on behalf of the issuer, other 
than— 
(A) that the issuer is in the process of of-
fering securities or planning to offer securities; 
(B) the type and amount of securities 
being offered; 
(C) the amount of securities being offered 
that have already been subscribed for; and 
(D) the intended use of proceeds of the of-
fering. 
(b) RULE OF CONSTRUCTION.—Subsection (a) may 
only be construed as requiring the Securities and Ex-
change Commission to amend the requirements of Regula-
tion D with respect to presentations and communications, 
and not with respect to purchases or sales. 
Subtitle L—Main Street Growth 
SEC. 456. VENTURE EXCHANGES. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) 
is amended by adding at the end the following: 
‘‘(m) VENTURE EXCHANGE.—
226 
‘‘(1) REGISTRATION.— 
‘‘(A) IN GENERAL.—A national securities 
exchange may elect to be treated (or for a list-
ing tier of such exchange to be treated) as a 
venture exchange by notifying the Commission 
of such election, either at the time the exchange 
applies to be registered as a national securities 
exchange or after registering as a national secu-
rities exchange. 
‘‘(B) DETERMINATION
TIME
PERIOD.— 
With respect to a securities exchange electing to 
be treated (or for a listing tier of such exchange 
to be treated) as a venture exchange— 
‘‘(i) at the time the exchange applies 
to be registered as a national securities ex-
change, such application and election shall 
be deemed to have been approved by the 
Commission unless the Commission denies 
such application before the end of the 6- 
month period beginning on the date the 
Commission received such application; and 
‘‘(ii) after registering as a national se-
curities exchange, such election shall be 
deemed to have been approved by the Com-
mission unless the Commission denies such
227 
approval before the end of the 6-month pe-
riod beginning on the date the Commission 
received notification of such election. 
‘‘(2) POWERS AND RESTRICTIONS.—A venture 
exchange— 
‘‘(A) may only constitute, maintain, or pro-
vide a market place or facilities for bringing to-
gether purchasers and sellers of venture securi-
ties; 
‘‘(B) may determine the increment to be 
used for quoting and trading venture securities 
on the exchange; 
‘‘(C) shall disseminate last sale and 
quotation information on terms that are fair 
and reasonable and not unreasonably discrimi-
natory; 
‘‘(D) may choose to carry out periodic auc-
tions for the sale of a venture security instead 
of providing continuous trading of the venture 
security; and 
‘‘(E) may not extend unlisted trading 
privileges to any venture security. 
‘‘(3) EXEMPTIONS
FROM
CERTAIN
NATIONAL 
SECURITY EXCHANGE REGULATIONS.—A venture ex-
change shall not be required to—
228 
‘‘(A) comply with any of sections 242.600 
through 242.612 of title 17, Code of Federal 
Regulations; 
‘‘(B) comply with any of sections 242.300 
through 242.303 of title 17, Code of Federal 
Regulations; 
‘‘(C) submit any data to a securities infor-
mation processor; or 
‘‘(D) use decimal pricing. 
‘‘(4) TREATMENT OF CERTAIN EXEMPTED SE-
CURITIES.—A security that is exempt from registra-
tion pursuant to section 3(b) of the Securities Act 
of 1933 shall be exempt from section 12(a) of this 
title with respect to the trading of such security on 
a venture exchange, if the issuer of such security is 
in compliance with all disclosure obligations of such 
section 3(b) and the regulations issued under such 
section. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) EARLY-STAGE, GROWTH COMPANY.— 
‘‘(i) IN GENERAL.—The term ‘early- 
stage, growth company’ means an issuer—
229 
‘‘(I) that has not made an initial 
public offering of any securities of the 
issuer; and 
‘‘(II) with a market capitalization 
of $1,000,000,000 (as such amount is 
indexed for inflation every 5 years by 
the Commission to reflect the change 
in the Consumer Price Index for All 
Urban Consumers published by the 
Bureau of Labor Statistics, setting 
the 
threshold 
to 
the 
nearest 
$1,000,000) or less. 
‘‘(ii) TREATMENT
WHEN
MARKET 
CAPITALIZATION EXCEEDS THRESHOLD.— 
‘‘(I) IN GENERAL.—In the case 
of an issuer that is an early-stage, 
growth company the securities of 
which are traded on a venture ex-
change, such issuer shall not cease to 
be an early-stage, growth company by 
reason of the market capitalization of 
such issuer exceeding the threshold 
specified in clause (i)(II) until the end 
of the period of 24 consecutive 
months during which the market cap-
230 
italization of such issuer exceeds 
$2,000,000,000 (as such amount is 
indexed for inflation every 5 years by 
the Commission to reflect the change 
in the Consumer Price Index for All 
Urban Consumers published by the 
Bureau of Labor Statistics, setting 
the 
threshold 
to 
the 
nearest 
$1,000,000). 
‘‘(II) EXEMPTIONS.—If an issuer 
would cease to be an early-stage, 
growth company under subclause (I), 
the venture exchange may, at the re-
quest of the issuer, exempt the issuer 
from the market capitalization re-
quirements of this subparagraph for 
the 1-year period that begins on the 
day after the end of the 24-month pe-
riod described in such subclause. The 
venture exchange may, at the request 
of the issuer, extend the exemption for 
1 additional year. 
‘‘(B) 
VENTURE
SECURITY.—The 
term 
‘venture security’ means—
231 
‘‘(i) securities of an early-stage, 
growth company that are exempt from reg-
istration pursuant to section 3(b) of the 
Securities Act of 1933; and 
‘‘(ii) securities of an emerging growth 
company.’’. 
(b) SECURITIES ACT OF 1933.—Section 18(b)(1) of 
the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is 
amended— 
(1) in subparagraph (B), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (C), by striking the period 
and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(D) a venture security, as defined under 
section 6(m)(5) of the Securities Exchange Act 
of 1934.’’. 
(c) SENSE OF CONGRESS.—It is the sense of the Con-
gress that the Securities and Exchange Commission 
should— 
(1) when necessary or appropriate in the public 
interest and consistent with the protection of inves-
tors, make use of the Commission’s general exemp-
tive authority under section 36 of the Securities Ex-
233 
Subtitle M—Micro Offering Safe 
Harbor 
SEC. 461. EXEMPTIONS FOR MICRO-OFFERINGS. 
(a) IN GENERAL.—Section 4 of the Securities Act of 
1933 (15 U.S.C. 77d) is amended— 
(1) in subsection (a), by adding at the end the 
following: 
‘‘(8) transactions meeting the requirements of 
subsection (e).’’; and 
(2) as amended by section 431(2), by inserting 
after subsection (d) the following: 
‘‘(e) CERTAIN MICRO-OFFERINGS.—The transactions 
referred to in subsection (a)(8) are transactions involving 
the sale of securities by an issuer (including all entities 
controlled by or under common control with the issuer) 
that meet all of the following requirements: 
‘‘(1) PRE-EXISTING RELATIONSHIP.—Each pur-
chaser has a substantive pre-existing relationship 
with an officer of the issuer, a director of the issuer, 
or a shareholder holding 10 percent or more of the 
shares of the issuer. 
‘‘(2) 35 OR FEWER PURCHASERS.—There are 
no more than, or the issuer reasonably believes that 
there are no more than, 35 purchasers of securities 
from the issuer that are sold in reliance on the ex-
234 
emption provided under subsection (a)(8) during the 
12-month period preceding such transaction. 
‘‘(3) SMALL OFFERING AMOUNT.—The aggre-
gate amount of all securities sold by the issuer, in-
cluding any amount sold in reliance on the exemp-
tion provided under subsection (a)(8), during the 12- 
month period preceding such transaction, does not 
exceed $500,000.’’. 
(b) EXEMPTION UNDER STATE REGULATIONS.—Sec-
tion 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 
77r(b)(4)) is amended— 
(1) in subparagraph (F), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (G), by striking the period 
and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(H) section 4(a)(8).’’. 
Subtitle N—Private Placement 
Improvement 
SEC. 466. REVISIONS TO SEC REGULATION D. 
Not later than 45 days following the date of the en-
actment of this Act, the Securities and Exchange Commis-
sion shall revise Regulation D (17 CFR 501 et seq.) in 
accordance with the following:
235 
(1) The Commission shall revise Form D filing 
requirements to require an issuer offering or selling 
securities in reliance on an exemption provided 
under Rule 506 of Regulation D to file with the 
Commission a single notice of sales containing the 
information required by Form D for each new offer-
ing of securities no earlier than 15 days after the 
date of the first sale of securities in the offering. 
The Commission shall not require such an issuer to 
file any notice of sales containing the information re-
quired by Form D except for the single notice de-
scribed in the previous sentence. 
(2) The Commission shall make the information 
contained in each Form D filing available to the se-
curities commission (or any agency or office per-
forming like functions) of each State and territory of 
the United States and the District of Columbia. 
(3) The Commission shall not condition the 
availability of any exemption for an issuer under 
Rule 506 of Regulation D (17 CFR 230.506) on the 
issuer’s or any other person’s filing with the Com-
mission of a Form D or any similar report. 
(4) The Commission shall not require issuers to 
submit written general solicitation materials to the 
Commission in connection with a Rule 506(c) offer-
236 
ing, except when the Commission requests such ma-
terials pursuant to the Commission’s authority 
under section 8A or section 20 of the Securities Act 
of 1933 (15 U.S.C. 77h–1 or 77t) or section 9, 
10(b), 21A, 21B, or 21C of the Securities Exchange 
Act of 1934 (15 U.S.C. 78i, 78j(b), 78u–1, 78u–2, 
or 78u–3). 
(5) The Commission shall not extend the re-
quirements contained in Rule 156 to private funds. 
(6) The Commission shall revise Rule 501(a) of 
Regulation D to provide that a person who is a 
‘‘knowledgeable employee’’ of a private fund or the 
fund’s investment adviser, as defined in Rule 3c– 
5(a)(4) (17 CFR 270.3c–5(a)(4)), shall be an ac-
credited investor for purposes of a Rule 506 offering 
of a private fund with respect to which the person 
is a knowledgeable employee. 
Subtitle O—Supporting America’s 
Innovators 
SEC. 471. INVESTOR LIMITATION FOR QUALIFYING VEN-
TURE CAPITAL FUNDS. 
Section 3(c)(1) of the Investment Company Act of 
1940 (15 U.S.C. 80a–3(c)(1)) is amended—
237 
(1) by inserting after ‘‘one hundred persons’’ 
the following: ‘‘(or, with respect to a qualifying ven-
ture capital fund, 500 persons)’’; and 
(2) by adding at the end the following: 
‘‘(C) The term ‘qualifying venture capital 
fund’ means any venture capital fund (as de-
fined pursuant to section 203(l)(1) of the In-
vestment Advisers Act of 1940 (15 U.S.C. 80b– 
3(l)(1)) with no more than $50,000,000 in ag-
gregate capital contributions and uncalled com-
mitted capital, as such dollar amount is annu-
ally adjusted by the Commission to reflect the 
change in the Consumer Price Index for All 
Urban Consumers published by the Bureau of 
Labor Statistics of the Department of Labor.’’. 
Subtitle P—Fix Crowdfunding 
SEC. 476. CROWDFUNDING EXEMPTION. 
(a) SECURITIES ACT OF 1933.—Section 4(a) of the 
Securities Act of 1933 (15 U.S.C. 77d) is amended by 
striking paragraph (6) and inserting the following: 
‘‘(6) transactions involving the offer or sale of 
securities by an issuer, provided that— 
‘‘(A) in the case of a transaction involving 
an intermediary between the issuer and the in-
238 
vestor, such intermediary complies with the re-
quirements under section 4A(a); and 
‘‘(B) in the case of a transaction not in-
volving an intermediary between the issuer and 
the investor, the issuer complies with the re-
quirements under section 4A(b).’’. 
(b) 
REQUIREMENTS
TO
QUALIFY
FOR 
CROWDFUNDING EXEMPTION.—Section 4A of the Securi-
ties Act of 1933 (15 U.S.C. 77d–1) is amended to read 
as follows: 
‘‘SEC. 4A. REQUIREMENTS WITH RESPECT TO CERTAIN 
SMALL TRANSACTIONS. 
‘‘(a) REQUIREMENTS
ON
INTERMEDIARIES.—For 
purposes of section 4(a)(6), a person acting as an inter-
mediary in a transaction involving the offer or sale of secu-
rities shall comply with the requirements of this subsection 
if the intermediary— 
‘‘(1) 
warns 
investors, 
including 
on 
the 
intermediary’s website used for the offer and sale of 
such securities, of the speculative nature generally 
applicable to investments in startups, emerging busi-
nesses, and small issuers, including risks in the sec-
ondary market related to illiquidity;
239 
‘‘(2) warns investors that they are subject to 
the restriction on sales requirement described under 
subsection (e); 
‘‘(3) takes reasonable measures to reduce the 
risk of fraud with respect to such transaction; 
‘‘(4) registers with the Commission and the Fi-
nancial Industry Regulatory Authority, including by 
providing the Commission with the intermediary’s 
physical address, website address, and the names of 
the intermediary and employees of the intermediary, 
and keep such information up-to-date; 
‘‘(5) provides the Commission with continuous 
investor-level access to the intermediary’s website; 
‘‘(6) requires each potential investor to answer 
questions demonstrating— 
‘‘(A) an understanding of the level of risk 
generally applicable to investments in startups, 
emerging businesses, and small issuers; 
‘‘(B) an understanding of the risk of 
illiquidity; and 
‘‘(C) such other areas as the Commission 
may determine appropriate by rule or regula-
tion, including information relating to the own-
ers’ and management’s experience, and any re-
240 
lated party transactions and conflicts of inter-
est; 
‘‘(7) carries out a background check on the 
issuer’s principals; 
‘‘(8) provides the Commission and potential in-
vestors with notice of the offering not less than 10 
days prior to such offering, not later than the first 
day securities are offered to potential investors, in-
cluding— 
‘‘(A) the issuer’s name, legal status, phys-
ical address, and website address; 
‘‘(B) the names of the issuer’s principals; 
‘‘(C) the stated purpose and intended use 
of the proceeds of the offering sought by the 
issuer; and 
‘‘(D) the target offering amount and the 
deadline to reach the target offering amount; 
‘‘(9) outsources cash-management functions to 
a qualified third party custodian, such as a broker 
or dealer registered under section 15(b)(1) of the 
Securities Exchange Act of 1934, a trust company, 
or an insured depository institution; 
‘‘(10) makes available on the intermediary’s 
website a method of communication that permits the
241 
issuer and investors to communicate with one an-
other; and 
‘‘(11) provides the Commission with a notice 
upon completion of the offering, which shall include 
the aggregate offering amount and the number of 
purchasers. 
‘‘(b) REQUIREMENTS
ON ISSUERS
IF NO INTER-
MEDIARY.—For purposes of section 4(a)(6), an issuer who 
offers or sells securities without an intermediary shall 
comply with the requirements of this subsection if the 
issuer— 
‘‘(1) warns investors, including on the issuer’s 
website, of the speculative nature generally applica-
ble to investments in startups, emerging businesses, 
and small issuers, including risks in the secondary 
market related to illiquidity; 
‘‘(2) warns investors that they are subject to 
the restriction on sales requirement described under 
subsection (e); 
‘‘(3) takes reasonable measures to reduce the 
risk of fraud with respect to such transaction; 
‘‘(4) provides the Commission with the issuer’s 
physical address, website address, and the names of 
the principals and employees of the issuers, and 
keeps such information up-to-date;
242 
‘‘(5) provides the Commission with continuous 
investor-level access to the issuer’s website; 
‘‘(6) requires each potential investor to answer 
questions demonstrating— 
‘‘(A) an understanding of the level of risk 
generally applicable to investments in startups, 
emerging businesses, and small issuers; 
‘‘(B) an understanding of the risk of 
illiquidity; and 
‘‘(C) such other areas as the Commission 
may determine appropriate by rule or regula-
tion; 
‘‘(7) provides the Commission with notice of the 
offering not less than 10 days prior to such offering, 
not later than the first day securities are offered to 
potential investors, including— 
‘‘(A) the stated purpose and intended use 
of the proceeds of the offering sought by the 
issuer; and 
‘‘(B) the target offering amount and the 
deadline to reach the target offering amount; 
‘‘(8) outsources cash-management functions to 
a qualified third party custodian, such as a broker 
or dealer registered under section 15(b)(1) of the
243 
Securities Exchange Act of 1934, a trust company, 
or an insured depository institution; 
‘‘(9) makes available on the issuer’s website a 
method of communication that permits the issuer 
and investors to communicate with one another; 
‘‘(10) does not offer personalized investment 
advice; 
‘‘(11) provides the Commission with a notice 
upon completion of the offering, which shall include 
the aggregate offering amount and the number of 
purchasers; and 
‘‘(c) VERIFICATION OF INCOME.—For purposes of 
section 4(a)(6), an issuer or intermediary may rely on cer-
tifications as to annual income provided by the person to 
whom the securities are sold to verify the investor’s in-
come. 
‘‘(d) INFORMATION AVAILABLE
TO STATES.—The 
Commission shall make the notices described under sub-
sections (a)(9), (a)(13), (b)(8), and (b)(13) and the infor-
mation described under subsections (a)(4) and (b)(4) 
available to the States. 
‘‘(e) RESTRICTION ON SALES.—With respect to a 
transaction involving the issuance of securities described 
under section 4(a)(6), a purchaser may not transfer such
244 
securities during the 1-year period beginning on the date 
of purchase, unless such securities are sold to— 
‘‘(1) the issuer of such securities; or 
‘‘(2) an accredited investor. 
‘‘(f) CONSTRUCTION.— 
‘‘(1) NO REGISTRATION AS BROKER.—With re-
spect to a transaction described under section 
4(a)(6) involving an intermediary, such intermediary 
shall not be required to register as a broker under 
section 15(a)(1) of the Securities Exchange Act of 
1934 solely by reason of participation in such trans-
action. 
‘‘(2) NO PRECLUSION OF OTHER CAPITAL RAIS-
ING.—Nothing in this section or section 4(a)(6) 
shall be construed as preventing an issuer from rais-
ing capital through methods not described under 
section 4(a)(6).’’. 
(c) RULEMAKING.—Not later than 180 days after the 
date of enactment of this Act, the Securities and Ex-
change Commission shall issue or revise such rules as may 
be necessary to carry out section 4A of the Securities Act 
of 1933, ans amended by this Act. In issuing or revising 
such rules, the Commission shall consider the costs and 
benefits of the action.
245 
(d) DISQUALIFICATION.—Not later than 180 days 
after the date of enactment of this Act, the Securities and 
Exchange Commission shall by rule or regulation establish 
disqualification provisions under which an issuer shall not 
be eligible to utilize the exemption under section 4(a)(6) 
of the Securities Act of 1933 (as amended by this Act) 
based on the disciplinary history of the issuer or its prede-
cessors, affiliates, officers, directors, or persons fulfilling 
similar roles. The Commission shall also establish disquali-
fication provisions under which an intermediary shall not 
be eligible to act as an intermediary in connection with 
an offering utilizing the exemption under section 4(a)(6) 
of the Securities Act of 1933 based on the disciplinary 
history of the intermediary or its predecessors, affiliates, 
officers, directors, or persons fulfilling similar roles. Such 
provisions shall be substantially similar to the disqualifica-
tion provisions contained in the regulations adopted in ac-
cordance with section 926 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (15 U.S.C. 77d 
note). 
SEC. 477. EXCLUSION OF CROWDFUNDING INVESTORS 
FROM SHAREHOLDER CAP. 
Section 12(g)(5) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(5)) is amended—
246 
(1) by striking ‘‘(5) For the purposes’’ and in-
serting: 
‘‘(5) DEFINITIONS.— 
‘‘(A) IN
GENERAL.—For the purposes’’; 
and 
(2) by adding at the end the following: 
‘‘(B) EXCLUSION FOR PERSONS HOLDING 
CERTAIN
SECURITIES.—For purposes of this 
subsection, securities held by persons who pur-
chase such securities in transactions described 
under section 4(a)(6) of the Securities Act of 
1933 shall not be deemed to be ‘held of 
record’.’’. 
SEC. 478. PREEMPTION OF STATE LAW. 
(a) IN GENERAL.—Section 18(b)(4)(C) of the Securi-
ties Act of 1933 (15 U.S.C. 77r(b)(4)(C)) is amended by 
striking ‘‘section 4(6)’’ and inserting ‘‘section 4(a)(6)’’. 
(b) CLARIFICATION
OF
THE
PRESERVATION
OF 
STATE ENFORCEMENT AUTHORITY.— 
(1) IN GENERAL.—The amendments made by 
section 305(a) of the Jumpstart Our Business 
Startups Act, as amended by subsection (a), relate 
solely to State registration, documentation, and of-
fering requirements, as described under section 
18(a) of Securities Act of 1933 (15 U.S.C. 77r(a)),
247 
and shall have no impact or limitation on other 
State authority to take enforcement action with re-
gard to an issuer, intermediary, or any other person 
or entity using the exemption from registration pro-
vided by section 4(a)(6) of such Act. Notwith-
standing monetary penalties or sanctions, a State 
may not impose any filing or fee under such author-
ity. 
(2) CLARIFICATION
OF
STATE
JURISDICTION 
OVER
UNLAWFUL
CONDUCT
OF
INTERMEDIARIES, 
ISSUERS, AND CUSTODIANS.—Section 18(c)(1) of the 
Securities Act of 1933 is amended by striking ‘‘in 
connection with securities or securities transactions’’ 
and all that follows and inserting the following: ‘‘in 
connection with securities or securities transactions, 
with respect to— 
‘‘(A) fraud or deceit; 
‘‘(B) unlawful conduct by a broker or deal-
er; and 
‘‘(C) with respect to a transaction de-
scribed under section 4(a)(6), unlawful conduct 
by an intermediary, issuer, or custodian.’’. 
SEC. 479. TREATMENT OF FUNDING PORTALS. 
Section 5312(c) of title 31, United States Code, is 
amended by adding at the end the following:
248 
‘‘(2) FUNDING
PORTALS
NOT
INCLUDED
IN 
DEFINITION.—The term ‘financial institution’ (as 
defined in subsection (a)) does not include a funding 
portal (as defined under section 3(a) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c(a))).’’. 
Subtitle Q—Corporate Governance 
Reform and Transparency 
SEC. 481. DEFINITIONS. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)) is amended by adding at the end the following new 
paragraphs: 
‘‘(83) PROXY
ADVISORY
FIRM.—The term 
‘proxy advisory firm’ means any person who is pri-
marily engaged in the business of providing proxy 
voting research, analysis, or recommendations to cli-
ents, which conduct constitutes a solicitation within 
the meaning of section 14 and the Commission’s 
rules and regulations thereunder, except to the ex-
tent that the person is exempted by such rules and 
regulations from requirements otherwise applicable 
to persons engaged in a solicitation. 
‘‘(84) PERSON ASSOCIATED WITH A PROXY AD-
VISORY FIRM.—The term ‘person associated with’ a 
proxy advisory firm means any partner, officer, or
249 
director of a proxy advisory firm (or any person oc-
cupying a similar status or performing similar func-
tions), any person directly or indirectly controlling, 
controlled by, or under common control with a proxy 
advisory firm, or any employee of a proxy advisory 
firm, except that persons associated with a proxy ad-
visory firm whose functions are clerical or ministe-
rial shall not be included in the meaning of such 
term. The Commission may by rules and regulations 
classify, for purposes or any portion or portions of 
this Act, persons, including employees controlled by 
a proxy advisory firm.’’. 
(b) APPLICABLE DEFINITIONS.—As used in this sub-
title— 
(1) the term ‘‘Commission’’ means the Securi-
ties and Exchange Commission; and 
(2) the term ‘‘proxy advisory firm’’ has the 
same meaning as in section 3(a)(83) of the Securi-
ties Exchange Act of 1934, as added by this subtitle. 
SEC. 482. REGISTRATION OF PROXY ADVISORY FIRMS. 
(a) AMENDMENT.—The Securities Exchange Act of 
1934 is amended by inserting after section 15G the fol-
lowing new section:
250 
‘‘SEC. 15H. REGISTRATION OF PROXY ADVISORY FIRMS. 
‘‘(a) CONDUCT PROHIBITED.—It shall be unlawful 
for a proxy advisory firm to make use of the mails or any 
means or instrumentality of interstate commerce to pro-
vide proxy voting research, analysis, or recommendations 
to any client, unless such proxy advisory firm is registered 
under this section. 
‘‘(b) REGISTRATION PROCEDURES.— 
‘‘(1) APPLICATION FOR REGISTRATION.— 
‘‘(A) IN GENERAL.—A proxy advisory firm 
must file with the Commission an application 
for registration, in such form as the Commis-
sion shall require, by rule or regulation, and 
containing the information described in sub-
paragraph (B). 
‘‘(B) REQUIRED INFORMATION.—An appli-
cation for registration under this section shall 
contain information regarding— 
‘‘(i) a certification that the applicant 
has adequate financial and managerial re-
sources to consistently provide proxy advice 
based on accurate information; 
‘‘(ii) the procedures and methodolo-
gies that the applicant uses in developing 
proxy voting recommendations, including 
whether and how the applicant considers
251 
the size of a company when making proxy 
voting recommendations; 
‘‘(iii) the organizational structure of 
the applicant; 
‘‘(iv) whether or not the applicant has 
in effect a code of ethics, and if not, the 
reasons therefor; 
‘‘(v) any potential or actual conflict of 
interest relating to the ownership structure 
of the applicant or the provision of proxy 
advisory services by the applicant, includ-
ing whether the proxy advisory firm en-
gages in services ancillary to the provision 
of proxy advisory services such as con-
sulting services for corporate issuers, and 
if so the revenues derived therefrom; 
‘‘(vi) the policies and procedures in 
place to manage conflicts of interest under 
subsection (f); and 
‘‘(vii) any other information and docu-
ments concerning the applicant and any 
person associated with such applicant as 
the Commission, by rule, may prescribe as 
necessary or appropriate in the public in-
terest or for the protection of investors.
252 
‘‘(2) REVIEW OF APPLICATION.— 
‘‘(A) INITIAL DETERMINATION.—Not later 
than 90 days after the date on which the appli-
cation for registration is filed with the Commis-
sion under paragraph (1) (or within such longer 
period as to which the applicant consents) the 
Commission shall— 
‘‘(i) by order, grant registration; or 
‘‘(ii) institute proceedings to deter-
mine whether registration should be de-
nied. 
‘‘(B) CONDUCT OF PROCEEDINGS.— 
‘‘(i) CONTENT.—Proceedings referred 
to in subparagraph (A)(ii) shall— 
‘‘(I) include notice of the grounds 
for denial under consideration and an 
opportunity for hearing; and 
‘‘(II) be concluded not later than 
120 days after the date on which the 
application for registration is filed 
with the Commission under paragraph 
(1). 
‘‘(ii) DETERMINATION.—At the con-
clusion of such proceedings, the Commis-
253 
sion, by order, shall grant or deny such ap-
plication for registration. 
‘‘(iii) EXTENSION AUTHORIZED.—The 
Commission may extend the time for con-
clusion of such proceedings for not longer 
than 90 days, if it finds good cause for 
such extension and publishes its reasons 
for so finding, or for such longer period as 
to which the applicant consents. 
‘‘(C) GROUNDS FOR DECISION.—The Com-
mission shall grant registration under this sub-
section— 
‘‘(i) if the Commission finds that the 
requirements of this section are satisfied; 
and 
‘‘(ii) unless the Commission finds (in 
which case the Commission shall deny such 
registration) that— 
‘‘(I) the applicant has failed to 
certify to the Commission’s satisfac-
tion that it has adequate financial and 
managerial resources to consistently 
provide proxy advice based on accu-
rate information and to materially 
comply with the procedures and meth-
254 
odologies disclosed under paragraph 
(1)(B) and with subsections (f) and 
(g); or 
‘‘(II) if the applicant were so reg-
istered, its registration would be sub-
ject to suspension or revocation under 
subsection (e). 
‘‘(3) PUBLIC AVAILABILITY OF INFORMATION.— 
Subject to section 24, the Commission shall make 
the information and documents submitted to the 
Commission by a proxy advisory firm in its com-
pleted application for registration, or in any amend-
ment submitted under paragraph (1) or (2) of sub-
section (c), publicly available on the Commission’s 
website, or through another comparable, readily ac-
cessible means. 
‘‘(c) UPDATE OF REGISTRATION.— 
‘‘(1) UPDATE.—Each registered proxy advisory 
firm shall promptly amend and update its applica-
tion for registration under this section if any infor-
mation or document provided therein becomes mate-
rially inaccurate, except that a registered proxy advi-
sory firm is not required to amend the information 
required to be filed under subsection (b)(1)(B)(i) by 
filing information under this paragraph, but shall
255 
amend such information in the annual submission of 
the organization under paragraph (2) of this sub-
section. 
‘‘(2) CERTIFICATION.—Not later than 90 cal-
endar days after the end of each calendar year, each 
registered proxy advisory firm shall file with the 
Commission an amendment to its registration, in 
such form as the Commission, by rule, may prescribe 
as necessary or appropriate in the public interest or 
for the protection of investors— 
‘‘(A) certifying that the information and 
documents in the application for registration of 
such registered proxy advisory firm continue to 
be accurate in all material respects; and 
‘‘(B) listing any material change that oc-
curred to such information or documents during 
the previous calendar year. 
‘‘(d) CENSURE, DENIAL, OR SUSPENSION OF REG-
ISTRATION; NOTICE AND HEARING.—The Commission, by 
order, shall censure, place limitations on the activities, 
functions, or operations of, suspend for a period not ex-
ceeding 12 months, or revoke the registration of any reg-
istered proxy advisory firm if the Commission finds, on 
the record after notice and opportunity for hearing, that 
such censure, placing of limitations, suspension, or revoca-
256 
tion is necessary for the protection of investors and in the 
public interest and that such registered proxy advisory 
firm, or any person associated with such an organization, 
whether prior to or subsequent to becoming so associ-
ated— 
‘‘(1) has committed or omitted any act, or is 
subject to an order or finding, enumerated in sub-
paragraph (A), (D), (E), (H), or (G) of section 
15(b)(4), has been convicted of any offense specified 
in section 15(b)(4)(B), or is enjoined from any ac-
tion, conduct, or practice specified in subparagraph 
(C) of section 15(b)(4), during the 10-year period 
preceding the date of commencement of the pro-
ceedings under this subsection, or at any time there-
after; 
‘‘(2) has been convicted during the 10-year pe-
riod preceding the date on which an application for 
registration is filed with the Commission under this 
section, or at any time thereafter, of— 
‘‘(A) any crime that is punishable by im-
prisonment for one or more years, and that is 
not described in section 15(b)(4)(B); or 
‘‘(B) a substantially equivalent crime by a 
foreign court of competent jurisdiction;
257 
‘‘(3) is subject to any order of the Commission 
barring or suspending the right of the person to be 
associated with a registered proxy advisory firm; 
‘‘(4) fails to furnish the certifications required 
under subsections (b)(2)(C)(ii)(I) and (c)(2); 
‘‘(5) has engaged in one or more prohibited acts 
enumerated in paragraph (1); or 
‘‘(6) fails to maintain adequate financial and 
managerial resources to consistently offer advisory 
services with integrity, including by failing to comply 
with subsections (f) or (g). 
‘‘(e) TERMINATION OF REGISTRATION.— 
‘‘(1) VOLUNTARY WITHDRAWAL.—A registered 
proxy advisory firm may, upon such terms and con-
ditions as the Commission may establish as nec-
essary in the public interest or for the protection of 
investors, which terms and conditions shall include 
at a minimum that the registered proxy advisory 
firm will no longer conduct such activities as to 
bring it within the definition of proxy advisory firm 
in section 3(a)(83) of the Securities Exchange Act 
of 1934, withdraw from registration by filing a writ-
ten notice of withdrawal to the Commission. 
‘‘(2) COMMISSION AUTHORITY.—In addition to 
any other authority of the Commission under this
258 
title, if the Commission finds that a registered proxy 
advisory firm is no longer in existence or has ceased 
to do business as a proxy advisory firm, the Com-
mission, by order, shall cancel the registration under 
this section of such registered proxy advisory firm. 
‘‘(f) MANAGEMENT OF CONFLICTS OF INTEREST.— 
‘‘(1) ORGANIZATION
POLICIES
AND
PROCE-
DURES.—Each registered proxy advisory firm shall 
establish, maintain, and enforce written policies and 
procedures reasonably designed, taking into consid-
eration the nature of the business of such registered 
proxy advisory firm and associated persons, to ad-
dress and manage any conflicts of interest that can 
arise from such business. 
‘‘(2) COMMISSION AUTHORITY.—The Commis-
sion shall issue final rules to prohibit, or require the 
management and disclosure of, any conflicts of inter-
est relating to the offering of proxy advisory services 
by a registered proxy advisory firm, including, with-
out limitation, conflicts of interest relating to— 
‘‘(A) the manner in which a registered 
proxy advisory firm is compensated by the cli-
ent, or any affiliate of the client, for providing 
proxy advisory services;
259 
‘‘(B) the provision of consulting, advisory, 
or other services by a registered proxy advisory 
firm, or any person associated with such reg-
istered proxy advisory firm, to the client; 
‘‘(C) business relationships, ownership in-
terests, or any other financial or personal inter-
ests between a registered proxy advisory firm, 
or any person associated with such registered 
proxy advisory firm, and any client, or any af-
filiate of such client; 
‘‘(D) transparency around the formulation 
of proxy voting policies; 
‘‘(E) the execution of proxy votes if such 
votes are based upon recommendations made by 
the proxy advisory firm in which someone other 
than the issuer is a proponent; 
‘‘(F) issuing recommendations where proxy 
advisory firms provide advisory services to a 
company; and 
‘‘(G) any other potential conflict of inter-
est, as the Commission deems necessary or ap-
propriate in the public interest or for the pro-
tection of investors. 
‘‘(g) RELIABILITY OF PROXY ADVISORY FIRM SERV-
ICES.—
260 
‘‘(1) IN GENERAL.—Each registered proxy advi-
sory firm shall have staff sufficient to produce proxy 
voting recommendations that are based on accurate 
and current information. Each registered proxy advi-
sory firm shall detail procedures sufficient to permit 
companies receiving proxy advisory firm rec-
ommendations access in a reasonable time to the 
draft recommendations, with an opportunity to pro-
vide meaningful comment thereon, including the op-
portunity to present details to the person responsible 
for developing the recommendation in person or tele-
phonically. Each registered proxy advisory firm shall 
employ an ombudsman to receive complaints about 
the accuracy of voting information used in making 
recommendations from the subjects of the proxy ad-
visory firm’s voting recommendations, and shall re-
solve those complaints in a timely fashion and in any 
event prior to voting on the matter to which the rec-
ommendation relates. 
‘‘(2) DRAFT
RECOMMENDATIONS
DEFINED.— 
For purposes of this subsection, the term ‘draft rec-
ommendations’— 
‘‘(A) means the overall conclusions of 
proxy voting recommendations prepared for the 
clients of a proxy advisory firm, including any
261 
public data cited therein, any company informa-
tion or substantive analysis impacting the rec-
ommendation, and the specific voting rec-
ommendations on individual proxy ballot issues; 
and 
‘‘(B) does not include the entirety of the 
proxy advisory firm’s final report to its clients. 
‘‘(h) DESIGNATION
OF COMPLIANCE OFFICER.— 
Each registered proxy advisory firm shall designate an in-
dividual responsible for administering the policies and pro-
cedures that are required to be established pursuant to 
subsections (f) and (g), and for ensuring compliance with 
the securities laws and the rules and regulations there-
under, including those promulgated by the Commission 
pursuant to this section. 
‘‘(i) PROHIBITED CONDUCT.— 
‘‘(1) PROHIBITED ACTS AND PRACTICES.—The 
Commission shall issue final rules to prohibit any 
act or practice relating to the offering of proxy advi-
sory services by a registered proxy advisory firm 
that the Commission determines to be unfair or co-
ercive, including any act or practice relating to— 
‘‘(A) conditioning a voting recommendation 
or other proxy advisory firm recommendation 
on the purchase by an issuer or an affiliate
262 
thereof of other services or products, of the reg-
istered proxy advisory firm or any person asso-
ciated with such registered proxy advisory firm; 
and 
‘‘(B) modifying a voting recommendation 
or otherwise departing from its adopted system-
atic procedures and methodologies in the provi-
sion of proxy advisory services, based on wheth-
er an issuer, or affiliate thereof, subscribes or 
will subscribe to other services or product of the 
registered proxy advisory firm or any person as-
sociated with such organization. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (1), or in any rules or regulations adopt-
ed thereunder, may be construed to modify, impair, 
or supersede the operation of any of the antitrust 
laws (as defined in the first section of the Clayton 
Act, except that such term includes section 5 of the 
Federal Trade Commission Act, to the extent that 
such section 5 applies to unfair methods of competi-
tion). 
‘‘(j) STATEMENTS OF FINANCIAL CONDITION.—Each 
registered proxy advisory firm shall, on a confidential 
basis, file with the Commission, at intervals determined 
by the Commission, such financial statements, certified (if
263 
required by the rules or regulations of the Commission) 
by an independent public auditor, and information con-
cerning its financial condition, as the Commission, by rule, 
may prescribe as necessary or appropriate in the public 
interest or for the protection of investors. 
‘‘(k) ANNUAL REPORT.—Each registered proxy advi-
sory firm shall, at the beginning of each fiscal year of such 
firm, report to the Commission on the number of share-
holder proposals its staff reviewed in the prior fiscal year, 
the number of recommendations made in the prior fiscal 
year, the number of staff who reviewed and made rec-
ommendations on such proposals in the prior fiscal year, 
and the number of recommendations made in the prior 
fiscal year where the proponent of such recommendation 
was a client of or received services from the proxy advisory 
firm. 
‘‘(l) TRANSPARENT
POLICIES.—Each registered 
proxy advisory firm shall file with the Commission and 
make publicly available its methodology for the formula-
tion of proxy voting policies and voting recommendations. 
‘‘(m) RULES OF CONSTRUCTION.— 
‘‘(1) NO WAIVER OF RIGHTS, PRIVILEGES, OR 
DEFENSES.—Registration under and compliance 
with this section does not constitute a waiver of, or 
otherwise diminish, any right, privilege, or defense
264 
that a registered proxy advisory firm may otherwise 
have under any provision of State or Federal law, 
including any rule, regulation, or order thereunder. 
‘‘(2) NO PRIVATE RIGHT OF ACTION.—Nothing 
in this section may be construed as creating any pri-
vate right of action, and no report filed by a reg-
istered proxy advisory firm in accordance with this 
section or section 17 shall create a private right of 
action under section 18 or any other provision of 
law. 
‘‘(n) REGULATIONS.— 
‘‘(1) NEW PROVISIONS.—Such rules and regula-
tions as are required by this section or are otherwise 
necessary to carry out this section, including the ap-
plication form required under subsection (a)— 
‘‘(A) shall be issued by the Commission, 
not later than 180 days after the date of enact-
ment of this section; and 
‘‘(B) shall become effective not later than 
1 year after the date of enactment of this sec-
tion. 
‘‘(2) REVIEW OF EXISTING REGULATIONS.—Not 
later than 270 days after the date of enactment of 
this section, the Commission shall—
265 
‘‘(A) review its existing rules and regula-
tions which affect the operations of proxy advi-
sory firms; 
‘‘(B) amend or revise such rules and regu-
lations in accordance with the purposes of this 
section, and issue such guidance, as the Com-
mission may prescribe as necessary or appro-
priate in the public interest or for the protec-
tion of investors; and 
‘‘(C) direct Commission staff to withdraw 
the Egan Jones Proxy Services (May 27, 2004) 
and Institutional Shareholder Services, Inc. 
(September 15, 2004) no-action letters. 
‘‘(o) APPLICABILITY.—This section, other than sub-
section (n), which shall apply on the date of enactment 
of this section, shall apply on the earlier of— 
‘‘(1) the date on which regulations are issued in 
final form under subsection (n)(1); or 
‘‘(2) 270 days after the date of enactment of 
this section.’’. 
(b) CONFORMING AMENDMENT.—Section 17(a)(1) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78q(a)(1)) is amended by inserting ‘‘proxy advisory firm,’’ 
after ‘‘nationally recognized statistical rating organiza-
tion,’’.
266 
SEC. 483. COMMISSION ANNUAL REPORT. 
The Commission shall make an annual report publicly 
available on the Commission’s Internet website. Such re-
port shall, with respect to the year to which the report 
relates— 
(1) identify applicants for registration under 
section 15H of the Securities Exchange Act of 1934, 
as added by this subtitle; 
(2) specify the number of and actions taken on 
such applications; 
(3) specify the views of the Commission on the 
state of competition, transparency, policies and 
methodologies, and conflicts of interest among proxy 
advisory firms; 
(4) include the determination of the Commis-
sion with regard to— 
(A) the quality of proxy advisory services 
issued by proxy advisory firms; 
(B) the financial markets; 
(C) competition among proxy advisory 
firms; 
(D) the incidence of undisclosed conflicts 
of interest by proxy advisory firms; 
(E) the process for registering as a proxy 
advisory firm; and
267 
(F) such other matters relevant to the im-
plementation of this subtitle and the amend-
ments made by this subtitle, as the Commission 
determines necessary to bring to the attention 
of the Congress; 
(5) identify problems, if any, that have resulted 
from the implementation of this subtitle and the 
amendments made by this subtitle; and 
(6) recommend solutions, including any legisla-
tive or regulatory solutions, to any problems identi-
fied under paragraphs (4) and (5). 
Subtitle R—Senior Safe 
SEC. 491. IMMUNITY. 
(a) DEFINITIONS.—In this subtitle— 
(1) the term ‘‘Bank Secrecy Act Officer’’ means 
an individual responsible for ensuring compliance 
with the requirements mandated by subchapter II of 
chapter 53 of title 31, United States Code; 
(2) the term ‘‘broker-dealer’’ means a broker or 
dealer, as those terms are defined, respectively, in 
section 3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)); 
(3) the term ‘‘covered agency’’ means—
268 
(A) a State financial regulatory agency, in-
cluding a State securities or law enforcement 
authority and a State insurance regulator; 
(B) each of the Federal financial institu-
tions regulatory agencies; 
(C) the Securities and Exchange Commis-
sion; 
(D) a law enforcement agency; 
(E) and State or local agency responsible 
for administering adult protective service laws; 
and 
(F) a State attorney general. 
(4) the term ‘‘covered financial institution’’ 
means— 
(A) a credit union; 
(B) a depository institution; 
(C) an investment advisor; 
(D) a broker-dealer; 
(E) an insurance company; 
(F) a State attorney general; and 
(G) a transfer agent. 
(5) the term ‘‘credit union’’ means a Federal 
credit union, State credit union, or State-chartered 
credit union, as those terms are defined in section
269 
101 of the Federal Credit Union Act (12 U.S.C. 
1752); 
(6) the term ‘‘depository institution’’ has the 
meaning given the term in section 3(c) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813(c)); 
(7) the term ‘‘exploitation’’ means the fraudu-
lent or otherwise illegal, unauthorized, or improper 
act or process of an individual, including a caregiver 
or fiduciary, that— 
(A) uses the resources of a senior citizen 
for monetary personal benefit, profit, or gain; 
or 
(B) results in depriving a senior citizen of 
rightful access to or use of benefits, resources, 
belongings or assets; 
(8) the term ‘‘Federal financial institutions reg-
ulatory agencies’’ has the meaning given the term in 
section 1003 of the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3302); 
(9) the term ‘‘investment adviser’’ has the 
meaning given the term in section 202 of the Invest-
ment Advisers Act of 1940 (15 U.S.C. 80b–2); 
(10) the term ‘‘insurance company’’ has the 
meaning given the term in section 2(a) of the Invest-
ment Company Act of 1940 (15 U.S.C. 80a–2(a));
270 
(11) the term ‘‘registered representative’’ 
means an individual who represents a broker-dealer 
in effecting or attempting to affect a purchase or 
sale of securities; 
(12) the term ‘‘senior citizen’’ means an indi-
vidual who is not less than 65 years of age; 
(13) the term ‘‘State insurance regulator’’ has 
the meaning given such term in section 315 of the 
Gramm-Leach-Bliley Act (15 U.S.C. 6735); 
(14) the term ‘‘State securities or law enforce-
ment authority’’ has the meaning given the term in 
section 24(f)(4) of the Securities Exchange Act of 
1934 (15 U.S.C. 78x(f)(4)); and 
(15) the term ‘‘transfer agent’’ has the meaning 
given the term in section 3(a) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)). 
(b) IMMUNITY FROM SUIT.— 
(1) IMMUNITY
FOR
INDIVIDUALS.—An indi-
vidual who has received the training described in 
section 492 shall not be liable, including in any civil 
or administrative proceeding, for disclosing the pos-
sible exploitation of a senior citizen to a covered 
agency if the individual, at the time of the disclo-
sure—
272 
affiliated or associated with, the covered financial institu-
tion who— 
(1) is described in section 491(b)(1)(A); 
(2) may come into contact with a senior citizen 
as a regular part of the duties of the officer, em-
ployee, or registered representative; or 
(3) may review or approve the financial docu-
ments, records, or transactions of a senior citizen in 
connection with providing financial services to a sen-
ior citizen. 
(b) TRAINING.— 
(1) IN
GENERAL.—The training described in 
this paragraph shall— 
(A) instruct any individual attending the 
training on how to identify and report the sus-
pected exploitation of a senior citizen; 
(B) discuss the need to protect the privacy 
and respect the integrity of each individual cus-
tomer of a covered financial institution; and 
(C) be appropriate to the job responsibil-
ities of the individual attending the training. 
(2) TIMING.—The training required under sub-
section (a) shall be provided as soon as reasonably 
practicable but not later than 1 year after the date 
on which an officer, employee, or registered rep-
273 
resentative begins employment with or becomes af-
filiated or associated with the covered financial insti-
tution. 
(3) BANK
SECRECY
ACT
OFFICER.—An indi-
vidual who is designated as a compliance officer 
under an anti-money laundering program established 
pursuant to section 5318(h) of title 31, United 
States Code, shall be deemed to have received the 
training described under this subsection. 
SEC. 493. RELATIONSHIP TO STATE LAW. 
Nothing in this Act shall be construed to preempt or 
limit any provision of State law, except only to the extent 
that section 491 provides a greater level of protection 
against liability to an individual described in section 
491(b)(1) or to a covered financial institution described 
in section 491(b)(2) than is provided under State law. 
Subtitle S—National Securities 
Exchange Regulatory Parity 
SEC. 496. APPLICATION OF EXEMPTION. 
Section 18(b)(1) of the Securities Act of 1933 (15 
U.S.C. 77r(b)(1)), as amended by section 456(b), is fur-
ther amended— 
(1) by striking subparagraph (A); 
(2) in subparagraph (B), by striking ‘‘that the 
Commission determines by rule (on its own initiative
274 
or on the basis of a petition) are substantially simi-
lar to the listing standards applicable to securities 
described in subparagraph (A)’’ and inserting ‘‘that 
have been approved by the Commission’’; 
(3) in subparagraph (C), by striking ‘‘or (B)’’; 
and 
(4) by redesignating subparagraphs (B), (C), 
and (D) as subparagraphs (A), (B), and (C), respec-
tively. 
Subtitle T—Private Company 
Flexibility and Growth 
SEC. 497. SHAREHOLDER THRESHOLD FOR REGISTRATION. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended— 
(1) in section 12(g)— 
(A) in paragraph (1)— 
(i) by striking ‘‘shall—’’ and all that 
follows through ‘‘register such security’’ 
and inserting ‘‘shall, not later than 120 
days after the last day of its first fiscal 
year ended after the effective date of this 
subsection on which the issuer has total as-
sets exceeding $10,000,000 (or such great-
er amount of assets as the Commission 
may establish by rule) and a class of eq-
275 
uity security (other than an exempted se-
curity) held of record by 2,000 or more 
persons (or such greater number of per-
sons as the Commission may establish by 
rule), register such security’’; and 
(ii) by adding at the end the fol-
lowing: ‘‘The dollar figure in this para-
graph shall be indexed for inflation every 5 
years by the Commission to reflect the 
change in the Consumer Price Index for 
All Urban Consumers published by the Bu-
reau of Labor Statistics, rounded to the 
nearest $100,000.’’; and 
(B) in paragraph (4), by striking ‘‘300 
persons’’ and all that follows through ‘‘1,200 
persons persons’’ and inserting ‘‘1,200 per-
sons’’; and 
(2) in section 15(d)(1), by striking ‘‘300 per-
sons’’ and all that follows through ‘‘1,200 persons 
persons’’ and inserting ‘‘1,200 persons’’. 
Subtitle U—Small Company Capital 
Formation Enhancements 
SEC. 498. JOBS ACT-RELATED EXEMPTION. 
Section 3(b) of the Securities Act of 1933 (15 U.S.C. 
77c(b)) is amended—
276 
(1) 
in 
paragraph 
(2)(A), 
by 
striking 
‘‘$50,000,000’’ and inserting ‘‘$75,000,000, ad-
justed for inflation by the Commission every 2 years 
to the nearest $10,000 to reflect the change in the 
Consumer Price Index for All Urban Consumers 
published by the Bureau of Labor Statistics’’; and 
(2) in paragraph (5)— 
(A) by striking ‘‘such amount as’’ and in-
serting: ‘‘such amount, in addition to the ad-
justment for inflation provided for under such 
paragraph (2)(A), as’’; and 
(B) by striking ‘‘such amount, it’’ and in-
serting ‘‘such amount, in addition to the adjust-
ment for inflation provided for under such 
paragraph (2)(A), it’’. 
Subtitle V—Encouraging Public 
Offerings 
SEC. 499. EXPANDING TESTING THE WATERS AND CON-
FIDENTIAL SUBMISSIONS. 
The Securities Act of 1933 (15 U.S.C. 77a et seq.) 
is amended— 
(1) in section 5(d), by striking ‘‘an emerging 
growth company or any person authorized to act on 
behalf of an emerging growth company’’ and insert-
277 
ing ‘‘an issuer or any person authorized to act on 
behalf of an issuer’’; and 
(2) in section 6(e)— 
(A) in the heading, by striking ‘‘EMERG-
ING
GROWTH
COMPANIES’’ 
and 
inserting 
‘‘DRAFT REGISTRATION STATEMENTS’’; and 
(B) by amending paragraph (1) to read as 
follows: 
‘‘(1) IN GENERAL.—Any issuer, prior to its ini-
tial public offering date, may confidentially submit 
to the Commission a draft registration statement, 
for confidential nonpublic review by the staff of the 
Commission prior to public filing, provided that the 
initial confidential submission and all amendments 
thereto shall be publicly filed with the Commission 
not later than 15 days before the date on which the 
issuer conducts a road show, as such term is defined 
in section 230.433(h)(4) of title 17, Code of Federal 
Regulations, or any successor thereto.’’.
278 
Subtitle 
X—Modernized 
Offering 
and Proxy Rules for Closed-End 
Funds 
SEC. 499A. PARITY FOR CLOSED-END COMPANIES REGARD-
ING OFFERING AND PROXY RULES. 
(a) REVISION TO RULES.—Not later than 1 year 
after the date of enactment of this Act, the Securities and 
Exchange Commission shall revise any rules to the extent 
necessary to allow any closed-end company, as defined in 
section 5(a)(2) of the Investment Company Act of 1940 
(15 U.S.C. 80a-5), that is registered as an investment 
company under such Act to use the securities offering and 
proxy rules that are available to other issuers that are re-
quired to file reports under section 13 or section 15(d) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m; 
78o(d)). Any action that the Commission takes pursuant 
to this subsection shall include the following: 
(1) The Commission shall revise section 
230.405 of title 17, Code of Federal Regulations, 
to— 
(A) remove the exclusion of a registered 
closed-end company from the definition of a 
well-known seasoned issuer provided by that 
section; and
279 
(B) add registration statements filed on 
Form N–2 to the definition of automatic shelf 
registration statement provided by that section. 
(2) The Commission shall revise sections 
230.168 and 230.169 of title 17, Code of Federal 
Regulations, to remove the exclusion of a registered 
closed-end company from the list of issuers that can 
use the exemptions provided by those sections. 
(3) The Commission shall revise sections 
230.163 and 230.163A of title 17, Code of Federal 
Regulations, to remove a registered closed-end com-
pany from the list of issuers that are ineligible to 
use the exemptions provided by those sections. 
(4) The Commission shall revise section 
230.134 of title 17, Code of Federal Regulations, to 
remove the exclusion of a registered closed-end com-
pany from that section. 
(5) The Commission shall revise sections 
230.138 and 230.139 of title 17, Code of Federal 
Regulations, to specifically include any registered 
closed-end company as an issuer to which those sec-
tions apply. 
(6) The Commission shall revise section 
230.164 of title 17, Code of Federal Regulations, to
280 
remove a registered closed-end company from the 
list of issuers that are excluded from that section. 
(7) The Commission shall revise section 
230.433, of title 17, Code of Federal Regulations, to 
specifically include any registered closed-end com-
pany that is a well-known seasoned issuer as an 
issuer to which that section applies. 
(8) The Commission shall revise section 
230.415 of title 17, Code of Federal Regulations, 
to— 
(A) state that the registration for securi-
ties provided by that section includes securities 
registered by any registered closed-end company 
on Form N–2; and 
(B) eliminate the requirement that a Form 
N–2 registrant must furnish the undertakings 
required by item 34.4 of Form N–2. 
(9) The Commission shall revise section 
230.497 of title 17, Code of Federal Regulations, to 
include a process for any registered closed-end com-
pany to file a form of prospectus that is parallel to 
the process for filing a form of prospectus under sec-
tion 230.424(b) of such title. 
(10) The Commission shall revise sections 
230.172 and 230.173 of title 17, Code of Federal
281 
Regulations, to remove the exclusion of an offering 
of any registered closed-end company from those 
sections. 
(11) The Commission shall revise section 
230.418 of title 17, Code of Federal Regulations, to 
provide that any registered closed-end company that 
would otherwise meet the eligibility requirements of 
General Instruction I.A of Form S–3 shall be ex-
empt from paragraph (a)(3) of that section. 
(12) The Commission shall revise section 
240.14a–101 of title 17, Code of Federal Regula-
tions, to provide that any registered closed-end com-
pany that would otherwise meet the requirements of 
General Instruction I.A of Form S–3 shall be 
deemed to meet the requirements of Form S–3 for 
purposes of Schedule 14A. 
(13) The Commission shall revise section 
243.103 of title 17, Code of Federal Regulations, to 
provide that paragraph (a) of that section applies 
for purposes of Form N–2. 
(b) REVISIONS TO FORM N–2.—Not later than 1 year 
after the date of enactment of this Act, the Commission 
shall revise Form N–2 to— 
(1) include an item or instruction that is simi-
lar to item 12 on Form S–3 to provide that any reg-
282 
istered closed-end company that would otherwise 
meet the requirements of Form S–3 shall incor-
porate by reference its reports and documents filed 
under the Securities Exchange Act of 1934 into its 
registration statement filed on Form N–2; and 
(2) include an item or instruction that is simi-
lar to the instruction regarding automatic shelf of-
ferings by well-known seasoned issuers on Form S– 
3 to provide that any registered closed-end company 
that is a well-known seasoned issuer may file auto-
matic shelf offerings on Form N–2. 
(c) TREATMENT IF REVISIONS NOT COMPLETED IN 
A TIMELY MANNER.—If the Commission fails to complete 
the revisions required by subsections (a) and (b) by the 
time required by such subsections, any registered closed- 
end company shall be entitled to treat such revisions as 
having been completed in accordance with the actions re-
quired to be taken by the Commission by such subsections 
until such time as such revisions are completed by the 
Commission. 
(d) RULES OF CONSTRUCTION.— 
(1) NO EFFECT ON RULE 482.—(1) Nothing in 
this section or the amendments made by this section 
shall be construed to impair or limit in any way a 
registered closed-end company from using section
283 
230.482 of title 17, Code of Federal Regulations, to 
distribute sales material. 
(2) REFERENCES.—Any reference in this sec-
tion to a section of title 17, Code of Federal Regula-
tions, or to any form or schedule means such rule, 
section, form, or schedule, or any successor to any 
such rule, section, form, or schedule. 
TITLE V—REGULATORY RELIEF 
FOR MAIN STREET AND COM-
MUNITY FINANCIAL INSTITU-
TIONS 
Subtitle A—Preserving Access to 
Manufactured Housing 
SEC. 501. MORTGAGE ORIGINATOR DEFINITION. 
Section 103 of the Truth in Lending Act (15 U.S.C. 
1602) is amended— 
(1) by redesignating the second subsection (cc) 
and subsection (dd) as subsections (dd) and (ee), re-
spectively; and 
(2) in paragraph (2)(C) of subsection (dd), as 
so redesignated, by striking ‘‘an employee of a re-
tailer of manufactured homes who is not described 
in clause (i) or (iii) of subparagraph (A) and who 
does not advise a consumer on loan terms (including 
rates, fees, and other costs)’’ and inserting ‘‘a re-
284 
tailer of manufactured or modular homes or its em-
ployees unless such retailer or its employees receive 
compensation or gain for engaging in activities de-
scribed in subparagraph (A) that is in excess of any 
compensation or gain received in a comparable cash 
transaction’’. 
SEC. 502. HIGH-COST MORTGAGE DEFINITION. 
Section 103 of the Truth in Lending Act (15 U.S.C. 
1602), as amended by section 501, is further amended— 
(1) by redesignating subsection (aa) (relating to 
disclosure of greater amount or percentage), as so 
designated by section 1100A of the Consumer Fi-
nancial Protection Act of 2010, as subsection (bb); 
(2) by redesignating subsection (bb) (relating to 
high cost mortgages), as so designated by section 
1100A of the Consumer Financial Protection Act of 
2010, as subsection (aa), and moving such sub-
section to immediately follow subsection (z); and 
(3) in subsection (aa)(1)(A), as so redesig-
nated— 
(A) in clause (i)(I), by striking ‘‘(8.5 per-
centage points, if the dwelling is personal prop-
erty and the transaction is for less than 
$50,000)’’ and inserting ‘‘(10 percentage points 
if the dwelling is personal property or is a
285 
transaction that does not include the purchase 
of real property on which a dwelling is to be 
placed, and the transaction is for less than 
$75,000 (as such amount is adjusted by the 
Consumer Law Enforcement Agency to reflect 
the change in the Consumer Price Index))’’; 
and 
(B) in clause (ii)— 
(i) in subclause (I), by striking ‘‘or’’ 
at the end; and 
(ii) by adding at the end the fol-
lowing: 
‘‘(III) in the case of a trans-
action for less than $75,000 (as such 
amount is adjusted by the Consumer 
Law Enforcement Agency to reflect 
the change in the Consumer Price 
Index) in which the dwelling is per-
sonal property (or is a consumer cred-
it transaction that does not include 
the purchase of real property on 
which a dwelling is to be placed) the 
greater of 5 percent of the total trans-
action amount or $3,000 (as such 
amount is adjusted by the Consumer
286 
Law Enforcement Agency to reflect 
the change in the Consumer Price 
Index); or’’. 
Subtitle B—Mortgage Choice 
SEC. 506. DEFINITION OF POINTS AND FEES. 
(a) AMENDMENT TO SECTION 103 OF TILA.—Para-
graph (4) of section 103(aa) of the Truth in Lending Act, 
as redesignated by section 502, is amended— 
(1) by striking ‘‘paragraph (1)(B)’’ and insert-
ing ‘‘paragraph (1)(A) and section 129C’’; 
(2) in subparagraph (C)— 
(A) by inserting ‘‘and insurance’’ after 
‘‘taxes’’; 
(B) in clause (ii), by inserting ‘‘, except as 
retained by a creditor or its affiliate as a result 
of their participation in an affiliated business 
arrangement (as defined in section 3(7) of the 
Real Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2602(7)),’’ after ‘‘compensation’’; 
and 
(C) by striking clause (iii) and inserting 
the following: 
‘‘(iii) the charge is— 
‘‘(I) a bona fide third-party charge 
not retained by the mortgage originator,
287 
creditor, or an affiliate of the creditor or 
mortgage originator; or 
‘‘(II) a charge set forth in section 
106(e)(1);’’; and 
(3) in subparagraph (D)— 
(A) by striking ‘‘accident,’’; and 
(B) by striking ‘‘or any payments’’ and in-
serting ‘‘and any payments’’. 
(b) AMENDMENT TO SECTION 129C OF TILA.—Sec-
tion 129C of the Truth in Lending Act (15 U.S.C. 1639c) 
is amended— 
(1) in subsection (a)(5)(C), by striking ‘‘103’’ 
and all that follows through ‘‘or mortgage origi-
nator’’ and inserting ‘‘103(aa)(4)’’; and 
(2) in subsection (b)(2)(C)(i), by striking ‘‘103’’ 
and all that follows through ‘‘or mortgage origi-
nator)’’ and inserting ‘‘103(aa)(4)’’. 
Subtitle C—Financial Institution 
Customer Protection 
SEC. 511. REQUIREMENTS FOR DEPOSIT ACCOUNT TERMI-
NATION REQUESTS AND ORDERS. 
(a) TERMINATION REQUESTS OR ORDERS MUST BE 
MATERIAL.— 
(1) IN
GENERAL.—An appropriate Federal 
banking agency may not formally or informally re-
288 
quest or order a depository institution to terminate 
a specific customer account or group of customer ac-
counts or to otherwise restrict or discourage a de-
pository institution from entering into or maintain-
ing a banking relationship with a specific customer 
or group of customers unless— 
(A) the agency has a material reason for 
such request or order; and 
(B) such reason is not based solely on rep-
utation risk. 
(2) 
TREATMENT
OF
NATIONAL
SECURITY 
THREATS.—If an appropriate Federal banking agen-
cy believes a specific customer or group of customers 
is, or is acting as a conduit for, an entity which— 
(A) poses a threat to national security; 
(B) is involved in terrorist financing; 
(C) is an agency of the government of 
Iran, North Korea, Syria, or any country listed 
from time to time on the State Sponsors of 
Terrorism list; 
(D) is located in, or is subject to the juris-
diction of, any country specified in subpara-
graph (C); or 
(E) does business with any entity described 
in subparagraph (C) or (D), unless the appro-
289 
priate Federal banking agency determines that 
the customer or group of customers has used 
due diligence to avoid doing business with any 
entity described in subparagraph (C) or (D), 
such belief shall satisfy the requirement under para-
graph (1). 
(b) NOTICE REQUIREMENT.— 
(1) IN GENERAL.—If an appropriate Federal 
banking agency formally or informally requests or 
orders a depository institution to terminate a spe-
cific customer account or a group of customer ac-
counts, the agency shall— 
(A) provide such request or order to the 
institution in writing; and 
(B) accompany such request or order with 
a written justification for why such termination 
is needed, including any specific laws or regula-
tions the agency believes are being violated by 
the customer or group of customers, if any. 
(2) JUSTIFICATION
REQUIREMENT.—A jus-
tification described under paragraph (1)(B) may not 
be based solely on the reputation risk to the deposi-
tory institution. 
(c) CUSTOMER NOTICE.—
290 
(1) NOTICE
REQUIRED.—Except as provided 
under paragraph (2), if an appropriate Federal 
banking agency orders a depository institution to 
terminate a specific customer account or a group of 
customer accounts, the depository institution shall 
inform the customer or customers of the justification 
for the customer’s account termination described 
under subsection (b). 
(2) NOTICE
PROHIBITED
IN
CASES
OF
NA-
TIONAL SECURITY.—If an appropriate Federal bank-
ing agency requests or orders a depository institu-
tion to terminate a specific customer account or a 
group of customer accounts based on a belief that 
the customer or customers pose a threat to national 
security, or are otherwise described under subsection 
(a)(2), neither the depository institution nor the ap-
propriate Federal banking agency may inform the 
customer or customers of the justification for the 
customer’s account termination. 
(d) REPORTING REQUIREMENT.—Each appropriate 
Federal banking agency shall issue an annual report to 
the Congress stating— 
(1) the aggregate number of specific customer 
accounts that the agency requested or ordered a de-
291 
pository institution to terminate during the previous 
year; and 
(2) the legal authority on which the agency re-
lied in making such requests and orders and the fre-
quency on which the agency relied on each such au-
thority. 
(e) DEFINITIONS.—For purposes of this section: 
(1) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’ means— 
(A) the appropriate Federal banking agen-
cy, as defined under section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813); and 
(B) the National Credit Union Administra-
tion, in the case of an insured credit union. 
(2) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ means— 
(A) a depository institution, as defined 
under section 3 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813); and 
(B) an insured credit union.
292 
SEC. 512. AMENDMENTS TO THE FINANCIAL INSTITUTIONS 
REFORM, RECOVERY, AND ENFORCEMENT 
ACT OF 1989. 
Section 951 of the Financial Institutions Reform, Re-
covery, and Enforcement Act of 1989 (12 U.S.C. 1833a) 
is amended— 
(1) in subsection (c)(2), by striking ‘‘affecting 
a federally insured financial institution’’ and insert-
ing ‘‘against a federally insured financial institution 
or by a federally insured financial institution against 
an unaffiliated third person’’; and 
(2) in subsection (g)— 
(A) in the heading, by striking ‘‘SUB-
POENAS’’ and inserting ‘‘INVESTIGATIONS’’; and 
(B) by amending paragraph (1)(C) to read 
as follows: 
‘‘(C) summon witnesses and require the 
production of any books, papers, correspond-
ence, memoranda, or other records which the 
Attorney General deems relevant or material to 
the inquiry, if the Attorney General— 
‘‘(i) requests a court order from a 
court of competent jurisdiction for such ac-
tions and offers specific and articulable 
facts showing that there are reasonable 
grounds to believe that the information or
293 
testimony sought is relevant and material 
for conducting an investigation under this 
section; or 
‘‘(ii) either personally or through dele-
gation no lower than the Deputy Attorney 
General, issues and signs a subpoena for 
such actions and such subpoena is sup-
ported by specific and articulable facts 
showing that there are reasonable grounds 
to believe that the information or testi-
mony sought is relevant for conducting an 
investigation under this section.’’. 
Subtitle D—Portfolio Lending and 
Mortgage Access 
SEC. 516. SAFE HARBOR FOR CERTAIN LOANS HELD ON 
PORTFOLIO. 
(a) IN GENERAL.—Section 129C of the Truth in 
Lending Act (15 U.S.C. 1639c) is amended by adding at 
the end the following: 
‘‘(j) SAFE HARBOR FOR CERTAIN LOANS HELD ON 
PORTFOLIO.— 
‘‘(1) SAFE HARBOR FOR CREDITORS THAT ARE 
DEPOSITORY INSTITUTIONS.— 
‘‘(A) IN GENERAL.—A creditor that is a 
depository institution shall not be subject to
294 
suit for failure to comply with subsection (a), 
(c)(1), or (f)(2) of this section or section 129H 
with respect to a residential mortgage loan, and 
the banking regulators shall treat such loan as 
a qualified mortgage, if— 
‘‘(i) the creditor has, since the origi-
nation of the loan, held the loan on the 
balance sheet of the creditor; and 
‘‘(ii) all prepayment penalties with re-
spect to the loan comply with the limita-
tions described under subsection (c)(3). 
‘‘(B) EXCEPTION
FOR
CERTAIN
TRANS-
FERS.—In the case of a depository institution 
that transfers a loan originated by that institu-
tion to another depository institution by reason 
of the bankruptcy or failure of the originating 
depository institution or the purchase of the 
originating depository institution, the depository 
institution transferring such loan shall be 
deemed to have complied with the requirement 
under subparagraph (A)(i). 
‘‘(2) SAFE HARBOR FOR MORTGAGE ORIGINA-
TORS.—A mortgage originator shall not be subject 
to suit for a violation of section 129B(c)(3)(B) for
295 
steering a consumer to a residential mortgage loan 
if— 
‘‘(A) the creditor of such loan is a deposi-
tory institution and has informed the mortgage 
originator that the creditor intends to hold the 
loan on the balance sheet of the creditor for the 
life of the loan; and 
‘‘(B) the mortgage originator informs the 
consumer that the creditor intends to hold the 
loan on the balance sheet of the creditor for the 
life of the loan. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) BANKING
REGULATORS.—The term 
‘banking regulators’ means the Federal banking 
agencies, the Consumer Law Enforcement 
Agency, and the National Credit Union Admin-
istration. 
‘‘(B) 
DEPOSITORY
INSTITUTION.—The 
term ‘depository institution’ has the meaning 
given that term under section 19(b)(1) of the 
Federal Reserve Act (12 U.S.C. 505(b)(1)). 
‘‘(C) FEDERAL BANKING AGENCIES.—The 
term ‘Federal banking agencies’ has the mean-
296 
ing given that term under section 3 of the Fed-
eral Deposit Insurance Act.’’. 
(b) RULE
OF
CONSTRUCTION.—Nothing in the 
amendment made by this section may be construed as pre-
venting a balloon loan from qualifying for the safe harbor 
provided under section 129C(j) of the Truth in Lending 
Act if the balloon loan otherwise meets all of the require-
ments under such subsection (j), regardless of whether the 
balloon loan meets the requirements described under 
clauses (i) through (iv) of section 129C(b)(2)(E) of such 
Act. 
Subtitle E—Application of the 
Expedited Funds Availability Act 
SEC. 521. APPLICATION OF THE EXPEDITED FUNDS AVAIL-
ABILITY ACT. 
(a) IN GENERAL.—The Expedited Funds Availability 
Act (12 U.S.C. 4001 et seq.) is amended— 
(1) in section 602(20) (12 U.S.C. 4001(20)) by 
inserting ‘‘, located in the United States,’’ after 
‘‘ATM’’; 
(2) in section 602(21) (12 U.S.C. 4001(21)) by 
inserting ‘‘American Samoa, the Commonwealth of 
the Northern Mariana Islands,’’ after ‘‘Puerto 
Rico,’’;
297 
(3) in section 602(23) (12 U.S.C. 4001(23)) by 
inserting ‘‘American Samoa, the Commonwealth of 
the Northern Mariana Islands,’’ after ‘‘Puerto 
Rico,’’; and 
(4) 
in 
section 
603(d)(2)(A) 
(12 
U.S.C. 
4002(d)(2)(A)), by inserting ‘‘American Samoa, the 
Commonwealth of the Northern Mariana Islands,’’ 
after ‘‘Puerto Rico,’’. 
(b) EFFECTIVE DATE.—This section shall take effect 
on January 1, 2017. 
Subtitle F—Small Bank Holding 
Company Policy Statement 
SEC. 526. CHANGES REQUIRED TO SMALL BANK HOLDING 
COMPANY POLICY STATEMENT ON ASSESS-
MENT OF FINANCIAL AND MANAGERIAL FAC-
TORS. 
(a) IN GENERAL.—Before the end of the 6-month pe-
riod beginning on the date of the enactment of this Act, 
the Board of Governors of the Federal Reserve System 
shall revise the Small Bank Holding Company Policy 
Statement on Assessment of Financial and Managerial 
Factors (12 CFR part 225—appendix C) to raise the con-
solidated asset threshold under such policy statement from 
$1,000,000,000 (as adjusted by Public Law 113–250) to 
$10,000,000,000.
298 
(b) CONFORMING AMENDMENT.—Subparagraph (C) 
of section 171(b)(5) of the Dodd-Frank Wall Street Re-
form 
and 
Consumer 
Protection 
Act 
(12 
U.S.C. 
5371(b)(5)) is amended to read as follows: 
‘‘(C) any bank holding company or savings 
and loan holding company that is subject to the 
application of the Small Bank Holding Com-
pany Policy Statement on Assessment of Finan-
cial and Managerial Factors of the Board of 
Governors (12 CFR part 225—appendix C).’’. 
Subtitle G—Community Institution 
Mortgage Relief 
SEC. 531. COMMUNITY FINANCIAL INSTITUTION MORTGAGE 
RELIEF. 
(a) EXEMPTION FROM ESCROW REQUIREMENTS FOR 
LOANS HELD BY SMALLER CREDITORS.—Section 129D 
of the Truth in Lending Act (15 U.S.C. 1639d) is amend-
ed— 
(1) by adding at the end the following: 
‘‘(k) SAFE HARBOR FOR LOANS HELD BY SMALLER 
CREDITORS.— 
‘‘(1) IN GENERAL.—A creditor shall not be in 
violation of subsection (a) with respect to a loan if— 
‘‘(A) the creditor has consolidated assets of 
$10,000,000,000 or less; and
299 
‘‘(B) the creditor holds the loan on the bal-
ance sheet of the creditor for the 3-year period 
beginning on the date of the origination of the 
loan. 
‘‘(2) EXCEPTION FOR CERTAIN TRANSFERS.— 
In the case of a creditor that transfers a loan to an-
other person by reason of the bankruptcy or failure 
of the creditor, the purchase of the creditor, or a su-
pervisory act or recommendation from a State or 
Federal regulator, the creditor shall be deemed to 
have complied with the requirement under para-
graph (1)(B).’’; and 
(2) by striking the term ‘‘Board’’ each place 
such term appears and inserting ‘‘Consumer Law 
Enforcement Agency’’. 
(b) MODIFICATION
TO
EXEMPTION
FOR
SMALL 
SERVICERS OF MORTGAGE LOANS.—Section 6 of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 
2605) is amended by adding at the end the following: 
‘‘(n) SMALL SERVICER EXEMPTION.—The Consumer 
Law Enforcement Agency shall, by regulation, provide ex-
emptions to, or adjustments for, the provisions of this sec-
tion for a servicer that annually services 20,000 or fewer 
mortgage loans, in order to reduce regulatory burdens 
while appropriately balancing consumer protections.’’.
300 
Subtitle H—Financial Institutions 
Examination Fairness and Reform 
SEC. 536. TIMELINESS OF EXAMINATION REPORTS. 
(a) IN GENERAL.—The Federal Financial Institu-
tions Examination Council Act of 1978 (12 U.S.C. 3301 
et seq.) is amended by adding at the end the following: 
‘‘SEC. 1012. TIMELINESS OF EXAMINATION REPORTS. 
‘‘(a) IN GENERAL.— 
‘‘(1) FINAL EXAMINATION REPORT.—A Federal 
financial institutions regulatory agency shall provide 
a final examination report to a financial institution 
not later than 60 days after the later of— 
‘‘(A) the exit interview for an examination 
of the institution; or 
‘‘(B) the provision of additional informa-
tion by the institution relating to the examina-
tion. 
‘‘(2) EXIT INTERVIEW.—If a financial institu-
tion is not subject to a resident examiner program, 
the exit interview shall occur not later than the end 
of the 9-month period beginning on the commence-
ment of the examination, except that such period 
may be extended by the Federal financial institu-
tions regulatory agency by providing written notice 
to the institution and the Independent Examination
301 
Review Director describing with particularity the 
reasons that a longer period is needed to complete 
the examination. 
‘‘(b) EXAMINATION MATERIALS.—Upon the request 
of a financial institution, the Federal financial institutions 
regulatory agency shall include with the final report an 
appendix listing all examination or other factual informa-
tion relied upon by the agency in support of a material 
supervisory determination. 
‘‘SEC. 1013. EXAMINATION STANDARDS. 
‘‘(a) IN GENERAL.—In the examination of a financial 
institution— 
‘‘(1) a commercial loan shall not be placed in 
non-accrual status solely because the collateral for 
such loan has deteriorated in value; 
‘‘(2) a modified or restructured commercial loan 
shall be removed from non-accrual status if the bor-
rower demonstrates the ability to perform on such 
loan over a maximum period of 6 months, except 
that with respect to loans on a quarterly, semi-
annual, or longer repayment schedule such period 
shall be a maximum of 3 consecutive repayment pe-
riods;
302 
‘‘(3) a new appraisal on a performing commer-
cial loan shall not be required unless an advance of 
new funds is involved; and 
‘‘(4) in classifying a commercial loan in which 
there has been deterioration in collateral value, the 
amount to be classified shall be the portion of the 
deficiency relating to the decline in collateral value 
and repayment capacity of the borrower. 
‘‘(b) WELL CAPITALIZED INSTITUTIONS.—The Fed-
eral financial institutions regulatory agencies may not re-
quire a financial institution that is well capitalized to raise 
additional capital in lieu of an action prohibited under 
subsection (a). 
‘‘(c) CONSISTENT
LOAN
CLASSIFICATIONS.—The 
Federal financial institutions regulatory agencies shall de-
velop and apply identical definitions and reporting require-
ments for non-accrual loans. 
‘‘SEC. 1014. OFFICE OF INDEPENDENT EXAMINATION RE-
VIEW. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Council an Office of Independent Examination Review 
(the ‘Office’). 
‘‘(b) HEAD OF OFFICE.—There is established the po-
sition of the Independent Examination Review Director 
(the ‘Director’), as the head of the Office. The Director
303 
shall be appointed by the Secretary of the Treasury and 
shall be independent from any member agency of the 
Council. 
‘‘(c) STAFFING.—The Director is authorized to hire 
staff to support the activities of the Office. 
‘‘(d) DUTIES.—The Director shall— 
‘‘(1) receive and, at the Director’s discretion, 
investigate complaints from financial institutions, 
their representatives, or another entity acting on be-
half of such institutions, concerning examinations, 
examination practices, or examination reports; 
‘‘(2) hold meetings, at least once every three 
months and in locations designed to encourage par-
ticipation from all sections of the United States, 
with financial institutions, their representatives, or 
another entity acting on behalf of such institutions, 
to discuss examination procedures, examination 
practices, or examination policies; 
‘‘(3) review examination procedures of the Fed-
eral financial institutions regulatory agencies to en-
sure that the written examination policies of those 
agencies are being followed in practice and adhere to 
the standards for consistency established by the 
Council;
304 
‘‘(4) conduct a continuing and regular review of 
examination quality assurance for all examination 
types conducted by the Federal financial institutions 
regulatory agencies; 
‘‘(5) adjudicate any supervisory appeal initiated 
under section 1015; and 
‘‘(6) report annually to the Committee on Fi-
nancial Services of the House of Representatives, the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate, and the Council, on the reviews car-
ried out pursuant to paragraphs (3) and (4), includ-
ing compliance with the requirements set forth in 
section 1012 regarding timeliness of examination re-
ports, and the Council’s recommendations for im-
provements in examination procedures, practices, 
and policies. 
‘‘(e) CONFIDENTIALITY.—The Director shall keep 
confidential all meetings with, discussions with, and infor-
mation provided by financial institutions. 
‘‘SEC. 1015. RIGHT TO INDEPENDENT REVIEW OF MATERIAL 
SUPERVISORY DETERMINATIONS. 
‘‘(a) IN GENERAL.—A financial institution shall have 
the right to obtain an independent review of a material 
supervisory determination contained in a final report of 
examination.
305 
‘‘(b) NOTICE.— 
‘‘(1) TIMING.—A financial institution seeking 
review of a material supervisory determination under 
this section shall file a written notice with the Inde-
pendent Examination Review Director (the ‘Direc-
tor’) within 60 days after receiving the final report 
of examination that is the subject of such review. 
‘‘(2) IDENTIFICATION
OF
DETERMINATION.— 
The written notice shall identify the material super-
visory determination that is the subject of the inde-
pendent examination review, and a statement of the 
reasons why the institution believes that the deter-
mination is incorrect or should otherwise be modi-
fied. 
‘‘(3) INFORMATION TO BE PROVIDED TO INSTI-
TUTION.—Any information relied upon by the agen-
cy in the final report that is not in the possession 
of the financial institution may be requested by the 
financial institution and shall be delivered promptly 
by the agency to the financial institution. 
‘‘(c) RIGHT TO HEARING.— 
‘‘(1) IN GENERAL.—The Director shall deter-
mine the merits of the appeal on the record or, at 
the financial institution’s election, shall refer the ap-
peal to an Administrative Law Judge to conduct a
306 
confidential hearing pursuant to the procedures set 
forth under sections 556 and 557 of title 5, United 
States Code, which hearing shall take place not later 
than 60 days after the petition for review was re-
ceived by the Director, and to issue a proposed deci-
sion to the Director based upon the record estab-
lished at such hearing. 
‘‘(2) STANDARD OF REVIEW.—In rendering a 
determination or recommendation under this sub-
section, neither the Administrative Law Judge nor 
the Director shall defer to the opinions of the exam-
iner or agency, but shall conduct a de novo review 
to independently determine the appropriateness of 
the agency’s decision based upon the relevant stat-
utes, regulations, and other appropriate guidance, as 
well as evidence adduced at any hearing. 
‘‘(d) FINAL DECISION.—A decision by the Director 
on an independent review under this section shall— 
‘‘(1) be made not later than 60 days after the 
record has been closed; and 
‘‘(2) be deemed final agency action and shall 
bind the agency whose supervisory determination 
was the subject of the review and the financial insti-
tution requesting the review.
307 
‘‘(e) RIGHT TO JUDICIAL REVIEW.—A financial insti-
tution shall have the right to petition for review of final 
agency action under this section by filing a Petition for 
Review within 60 days of the Director’s decision in the 
United States Court of Appeals for the District of Colum-
bia Circuit or the Circuit in which the financial institution 
is located. 
‘‘(f) REPORT.—The Director shall report annually to 
the Committee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate on actions taken under this 
section, including the types of issues that the Director has 
reviewed and the results of those reviews. In no case shall 
such a report contain information about individual finan-
cial institutions or any confidential or privileged informa-
tion shared by financial institutions. 
‘‘(g) RETALIATION PROHIBITED.—A Federal finan-
cial institutions regulatory agency may not— 
‘‘(1) retaliate against a financial institution, in-
cluding service providers, or any institution-affiliated 
party (as defined under section 3 of the Federal De-
posit Insurance Act), for exercising appellate rights 
under this section; or 
‘‘(2) delay or deny any agency action that 
would benefit a financial institution or any institu-
308 
tion-affiliated party on the basis that an appeal 
under this section is pending under this section. 
‘‘(h) RULE OF CONSTRUCTION.—Nothing in this sec-
tion may be construed— 
‘‘(1) to affect the right of a Federal financial 
institutions regulatory agency to take enforcement 
or other supervisory actions related to a material su-
pervisory determination under review under this sec-
tion; or 
‘‘(2) to prohibit the review under this section of 
a material supervisory determination with respect to 
which there is an ongoing enforcement or other su-
pervisory action.’’. 
(b) ADDITIONAL AMENDMENTS.— 
(1) RIEGLE
COMMUNITY
DEVELOPMENT
AND 
REGULATORY IMPROVEMENT ACT OF 1994.—Section 
309 of the Riegle Community Development and Reg-
ulatory Improvement Act of 1994 (12 U.S.C. 4806) 
is amended— 
(A) in subsection (a), by inserting after 
‘‘appropriate Federal banking agency’’ the fol-
lowing: ‘‘, the Consumer Law Enforcement 
Agency,’’; 
(B) in subsection (b)—
309 
(i) in paragraph (2), by striking ‘‘the 
appellant from retaliation by agency exam-
iners’’ and inserting ‘‘the insured deposi-
tory institution or insured credit union 
from retaliation by the agencies referred to 
in subsection (a)’’; and 
(ii) by adding at the end the following 
flush-left text: 
‘‘For purposes of this subsection and subsection (e), retal-
iation includes delaying consideration of, or withholding 
approval of, any request, notice, or application that other-
wise would have been approved, but for the exercise of the 
institution’s or credit union’s rights under this section.’’; 
(C) in subsection (e)(2)— 
(i) in subparagraph (B), by striking 
‘‘and’’ at the end; 
(ii) in subparagraph (C), by striking 
the period and inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(D) ensure that appropriate safeguards 
exist for protecting the insured depository insti-
tution or insured credit union from retaliation 
by any agency referred to in subsection (a) for
310 
exercising its rights under this subsection.’’; 
and 
(D) in subsection (f)(1)(A)— 
(i) in clause (ii), by striking ‘‘and’’ at 
the end; 
(ii) in clause (iii), by striking ‘‘and’’ 
at the end; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(iv) any issue specifically listed in an 
exam report as a matter requiring atten-
tion by the institution’s management or 
board of directors; and 
‘‘(v) any suspension or removal of an 
institution’s status as eligible for expedited 
processing of applications, requests, no-
tices, or filings on the grounds of a super-
visory or compliance concern, regardless of 
whether that concern has been cited as a 
basis for another material supervisory de-
termination or matter requiring attention 
in an examination report, provided that the 
conduct at issue did not involve violation of 
any criminal law; and’’.
311 
(2) FEDERAL
CREDIT
UNION
ACT.—Section 
205(j) of the Federal Credit Union Act (12 U.S.C. 
1785(j)) is amended by inserting ‘‘the Consumer 
Law Enforcement Agency,’’ before ‘‘the Administra-
tion’’ each place such term appears. 
(3) FEDERAL FINANCIAL INSTITUTIONS EXAM-
INATION COUNCIL ACT OF 1978.—The Federal Fi-
nancial Institutions Examination Council Act of 
1978 (12 U.S.C. 3301 et seq.) is amended— 
(A) in section 1003, by amending para-
graph (1) to read as follows: 
‘‘(1) the term ‘Federal financial institutions 
regulatory agencies’— 
‘‘(A) means the Office of the Comptroller 
of the Currency, the Board of Governors of the 
Federal Reserve System, the Federal Deposit 
Insurance Corporation, and the National Credit 
Union Administration; and 
‘‘(B) for purposes of sections 1012, 1013, 
1014, and 1015, includes the Consumer Law 
Enforcement Agency;’’; and 
(B) in section 1005, by striking ‘‘One- 
fifth’’ and inserting ‘‘One-fourth’’.
312 
Subtitle I—National Credit Union 
Administration Budget Trans-
parency 
SEC. 541. BUDGET TRANSPARENCY FOR THE NCUA. 
Section 209(b) of the Federal Credit Union Act (12 
U.S.C. 1789) is amended— 
(1) by redesignating paragraphs (1) and (2) as 
paragraphs (2) and (3), respectively; 
(2) by inserting before paragraph (2), as so re-
designated, the following: 
‘‘(1) on an annual basis and prior to the sub-
mission of the detailed business-type budget required 
under paragraph (2)— 
‘‘(A) make publicly available and cause to 
be printed in the Federal Register a draft of 
such detailed business-type budget; and 
‘‘(B) hold a public hearing, with public no-
tice provided of such hearing, wherein the pub-
lic can submit comments on the draft of such 
detailed business-type budget;’’; and 
(3) in paragraph (2), as so redesignated— 
(A) by inserting ‘‘detailed’’ after ‘‘submit 
a’’; and 
(B) by inserting ‘‘, and where such budget 
shall address any comments submitted by the
313 
public pursuant to paragraph (1)(B)’’ after 
‘‘Control Act’’. 
Subtitle J—Taking Account of In-
stitutions With Low Operation 
Risk 
SEC. 546. REGULATIONS APPROPRIATE TO BUSINESS MOD-
ELS. 
(a) IN GENERAL.—For any regulatory action occur-
ring after the date of the enactment of this Act, each Fed-
eral financial institutions regulatory agency shall— 
(1) take into consideration the risk profile and 
business models of each type of institution or class 
of institutions subject to the regulatory action; 
(2) determine the necessity, appropriateness, 
and impact of applying such regulatory action to 
such institutions or classes of institutions; and 
(3) tailor such regulatory action in a manner 
that limits the regulatory compliance impact, cost, li-
ability risk, and other burdens, as appropriate, for 
the risk profile and business model of the institution 
or class of institutions involved. 
(b) OTHER CONSIDERATIONS.—In carrying out the 
requirements of subsection (a), each Federal financial in-
stitutions regulatory agency shall consider—
314 
(1) the impact that such regulatory action, both 
by itself and in conjunction with the aggregate effect 
of other regulations, has on the ability of the appli-
cable institution or class of institutions to serve 
evolving and diverse customer needs; 
(2) the potential impact of examination manu-
als, regulatory actions taken with respect to third- 
party service providers, or other regulatory directives 
that may be in conflict or inconsistent with the tai-
loring of such regulatory action described in sub-
section (a)(3); and 
(3) the underlying policy objectives of the regu-
latory action and statutory scheme involved. 
(c) NOTICE
OF
PROPOSED
AND
FINAL
RULE-
MAKING.—Each Federal financial institutions regulatory 
agency shall disclose in every notice of proposed rule-
making and in any final rulemaking for a regulatory ac-
tion how the agency has applied subsections (a) and (b). 
(d) REPORTS TO CONGRESS.— 
(1) INDIVIDUAL AGENCY REPORTS.— 
(A) IN GENERAL.—Not later than 1 year 
after the date of the enactment of this Act and 
annually thereafter, each Federal financial in-
stitutions regulatory agency shall report to the 
Committee on Financial Services of the House
315 
of Representatives and the Committee on Bank-
ing, Housing, and Urban Affairs of the Senate 
on the specific actions taken to tailor the regu-
latory actions of the agency pursuant to the re-
quirements of this Act. 
(B) APPEARANCE BEFORE THE COMMIT-
TEES.—The head of each Federal financial in-
stitution regulatory agency shall appear before 
the Committee on Financial Services of the 
House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the 
Senate after each report is made pursuant to 
subparagraph (A) to testify on the contents of 
such report. 
(2) FIEC REPORTS.— 
(A) IN
GENERAL.—Not later than 3 
months after each report is submitted under 
paragraph (1), the Financial Institutions Ex-
amination Council shall report to the Com-
mittee on Financial Services of the House of 
Representatives and the Committee on Bank-
ing, Housing, and Urban Affairs of the Senate 
on— 
(i) the extent to which regulatory ac-
tions tailored pursuant to this Act result in
316 
different treatment of similarly situated in-
stitutions of diverse charter types; and 
(ii) the reasons for such differential 
treatment. 
(B) APPEARANCE BEFORE THE COMMIT-
TEES.—The Chairman of the Financial Institu-
tions Examination Council shall appear before 
the Committee on Financial Services of the 
House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the 
Senate after each report is made pursuant to 
subparagraph (A) to testify on the contents of 
such report. 
(e) LIMITED LOOK-BACK APPLICATION.— 
(1) IN GENERAL.—Each Federal financial insti-
tutions regulatory agency shall conduct a review of 
all regulations adopted during the period beginning 
on the date that is seven years before the date of the 
introduction of this Act in the House of Representa-
tives and ending on the date of the enactment of 
this Act, and apply the requirements of this Act to 
such regulations. 
(2) REVISION.—If the application of the re-
quirements of this Act to any such regulation re-
quires such regulation to be revised, the applicable
317 
Federal financial institutions regulatory agency shall 
revise such regulation within 3 years of the enact-
ment of this Act. 
(f) DEFINITIONS.—In this Act, the following defini-
tions shall apply: 
(1) FEDERAL FINANCIAL INSTITUTIONS REGU-
LATORY AGENCIES.—The term ‘‘Federal financial in-
stitutions regulatory agencies’’ means the Office of 
the Comptroller of the Currency, the Board of Gov-
ernors of the Federal Reserve System, the Federal 
Deposit Insurance Corporation, the National Credit 
Union Administration, and the Consumer Law En-
forcement Agency. 
(2) REGULATORY
ACTION.—The term ‘‘regu-
latory action’’ means any proposed, interim, or final 
rule or regulation, guidance, or published interpreta-
tion. 
Subtitle K—Federal Savings 
Association Charter Flexibility 
SEC. 551. OPTION FOR FEDERAL SAVINGS ASSOCIATIONS 
TO OPERATE AS A COVERED SAVINGS ASSO-
CIATION. 
The Home Owners’ Loan Act is amended by inserting 
after section 5 (12 U.S.C. 1464) the following:
318 
‘‘SEC. 5A. ELECTION TO OPERATE AS A COVERED SAVINGS 
ASSOCIATION. 
‘‘(a) DEFINITION.—In this section, the term ‘covered 
savings association’ means a Federal savings association 
that makes an election approved under subsection (b). 
‘‘(b) ELECTION.— 
‘‘(1) IN GENERAL.—Upon issuance of the rules 
described in subsection (f), a Federal savings asso-
ciation may elect to operate as a covered savings as-
sociation by submitting a notice to the Comptroller 
of such election. 
‘‘(2) APPROVAL.—A Federal savings association 
shall be deemed to be approved to operate as a cov-
ered savings association on the date that is 60 days 
after the date on which the Comptroller receives the 
notice under paragraph (1), unless the Comptroller 
notifies the Federal savings association otherwise. 
‘‘(c) RIGHTS
AND DUTIES.—Notwithstanding any 
other provision of law and except as otherwise provided 
in this section, a covered savings association shall— 
‘‘(1) have the same rights and privileges as a 
national bank that has its main office situated in the 
same location as the home office of the covered sav-
ings association; and
319 
‘‘(2) be subject to the same duties, restrictions, 
penalties, liabilities, conditions, and limitations that 
would apply to such a national bank. 
‘‘(d) TREATMENT OF COVERED SAVINGS ASSOCIA-
TIONS.—A covered savings association shall be treated as 
a Federal savings association for the purposes— 
‘‘(1) of governance of the covered savings asso-
ciation, including incorporation, bylaws, boards of 
directors, shareholders, and distribution of divi-
dends; 
‘‘(2) of consolidation, merger, dissolution, con-
version (including conversion to a stock bank or to 
another charter), conservatorship, and receivership; 
and 
‘‘(3) determined by regulation of the Comp-
troller. 
‘‘(e) EXISTING BRANCHES.—A covered savings asso-
ciation may continue to operate any branch or agency the 
covered savings association operated on the date on which 
an election under subsection (b) is approved. 
‘‘(f) RULEMAKING.—The Comptroller shall issue 
rules to carry out this section— 
‘‘(1) that establish streamlined standards and 
procedures that clearly identify required documenta-
320 
tion or timelines for an election under subsection 
(b); 
‘‘(2) that require a Federal savings association 
that makes an election under subsection (b) to iden-
tify specific assets and subsidiaries— 
‘‘(A) that do not conform to the require-
ments for assets and subsidiaries of a national 
bank; and 
‘‘(B) that are held by the Federal savings 
association on the date on which the Federal 
savings association submits a notice of such 
election; 
‘‘(3) that establish— 
‘‘(A) a transition process for bringing such 
assets and subsidiaries into conformance with 
the requirements for a national bank; and 
‘‘(B) procedures for allowing the Federal 
savings association to provide a justification for 
grandfathering such assets and subsidiaries 
after electing to operate as a covered savings 
association; 
‘‘(4) that establish standards and procedures to 
allow a covered savings association to terminate an 
election under subsection (b) after an appropriate 
period of time or to make a subsequent election;
321 
‘‘(5) that clarify requirements for the treatment 
of covered savings associations, including the provi-
sions of law that apply to covered savings associa-
tions; and 
‘‘(6) as the Comptroller deems necessary and in 
the interests of safety and soundness.’’. 
Subtitle L—SAFE Transitional 
Licensing 
SEC. 556. ELIMINATING BARRIERS TO JOBS FOR LOAN 
ORIGINATORS. 
(a) IN GENERAL.—The S.A.F.E. Mortgage Licensing 
Act of 2008 (12 U.S.C. 5101 et seq.) is amended by add-
ing at the end the following: 
‘‘SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINA-
TORS. 
‘‘(a) TEMPORARY AUTHORITY TO ORIGINATE LOANS 
FOR LOAN ORIGINATORS MOVING FROM A DEPOSITORY 
INSTITUTION TO A NON-DEPOSITORY INSTITUTION.— 
‘‘(1) IN
GENERAL.—Upon employment by a 
State-licensed mortgage company, an individual who 
is a registered loan originator shall be deemed to 
have temporary authority to act as a loan originator 
in an application State for the period described in 
paragraph (2) if the individual—
322 
‘‘(A) has not had an application for a loan 
originator license denied, or had such a license 
revoked or suspended in any governmental ju-
risdiction; 
‘‘(B) has not been subject to or served 
with a cease and desist order in any govern-
mental jurisdiction or as described in section 
1514(c); 
‘‘(C) has not been convicted of a felony 
that would preclude licensure under the law of 
the application State; 
‘‘(D) has submitted an application to be a 
State-licensed loan originator in the application 
State; and 
‘‘(E) was registered in the Nationwide 
Mortgage Licensing System and Registry as a 
loan originator during the 12-month period pre-
ceding the date of submission of the informa-
tion required under section 1505(a). 
‘‘(2) PERIOD.—The period described in para-
graph (1) shall begin on the date that the individual 
submits the information required under section 
1505(a) and shall end on the earliest of—
323 
‘‘(A) the date that the individual with-
draws the application to be a State-licensed 
loan originator in the application State; 
‘‘(B) the date that the application State 
denies, or issues a notice of intent to deny, the 
application; 
‘‘(C) the date that the application State 
grants a State license; or 
‘‘(D) the date that is 120 days after the 
date on which the individual submits the appli-
cation, if the application is listed on the Nation-
wide Mortgage Licensing System and Registry 
as incomplete. 
‘‘(b) TEMPORARY AUTHORITY TO ORIGINATE LOANS 
FOR
STATE-LICENSED
LOAN
ORIGINATORS
MOVING 
INTERSTATE.— 
‘‘(1) IN GENERAL.—A State-licensed loan origi-
nator shall be deemed to have temporary authority 
to act as a loan originator in an application State 
for the period described in paragraph (2) if the 
State-licensed loan originator— 
‘‘(A) meets the requirements of subpara-
graphs (A), (B), (C), and (D) of subsection 
(a)(1);
324 
‘‘(B) is employed by a State-licensed mort-
gage company in the application State; and 
‘‘(C) was licensed in a State that is not the 
application State during the 30-day period pre-
ceding the date of submission of the informa-
tion required under section 1505(a) in connec-
tion with the application submitted to the appli-
cation State. 
‘‘(2) PERIOD.—The period described in para-
graph (1) shall begin on the date that the State-li-
censed loan originator submits the information re-
quired under section 1505(a) in connection with the 
application submitted to the application State and 
end on the earliest of— 
‘‘(A) the date that the State-licensed loan 
originator withdraws the application to be a 
State-licensed loan originator in the application 
State; 
‘‘(B) the date that the application State 
denies, or issues a notice of intent to deny, the 
application; 
‘‘(C) the date that the application State 
grants a State license; or 
‘‘(D) the date that is 120 days after the 
date on which the State-licensed loan originator
325 
submits the application, if the application is 
listed on the Nationwide Mortgage Licensing 
System and Registry as incomplete. 
‘‘(c) APPLICABILITY.— 
‘‘(1) Any person employing an individual who is 
deemed to have temporary authority to act as a loan 
originator in an application State pursuant to this 
section shall be subject to the requirements of this 
title and to applicable State law to the same extent 
as if such individual was a State-licensed loan origi-
nator licensed by the application State. 
‘‘(2) Any individual who is deemed to have tem-
porary authority to act as a loan originator in an ap-
plication State pursuant to this section and who en-
gages in residential mortgage loan origination activi-
ties shall be subject to the requirements of this title 
and to applicable State law to the same extent as if 
such individual was a State-licensed loan originator 
licensed by the application State. 
‘‘(d) DEFINITIONS.—In this section, the following 
definitions shall apply: 
‘‘(1) STATE-LICENSED MORTGAGE COMPANY.— 
The term ‘State-licensed mortgage company’ means 
an entity licensed or registered under the law of any
326 
State to engage in residential mortgage loan origina-
tion and processing activities. 
‘‘(2) APPLICATION STATE.—The term ‘applica-
tion State’ means a State in which a registered loan 
originator or a State-licensed loan originator seeks 
to be licensed.’’. 
(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents in section 1(b) of the Housing and Economic 
Recovery Act of 2008 (42 U.S.C. 4501 note) is amended 
by inserting after the item relating to section 1517 the 
following: 
‘‘Sec. 1518. Employment transition of loan originators.’’. 
(c) AMENDMENT TO CIVIL LIABILITY OF THE CON-
SUMER LAW ENFORCEMENT AGENCY AND OTHER OFFI-
CIALS.—Section 1513 of the S.A.F.E. Mortgage Licensing 
Act of 2008 (12 U.S.C. 5112) is amended by striking ‘‘are 
loan originators or are applying for licensing or registra-
tion as loan originators’’ and inserting ‘‘are applying for 
licensing or registration using the Nationwide Mortgage 
Licensing System and Registry’’. 
Subtitle M—Right to Lend 
SEC. 561. SMALL BUSINESS LOAN DATA COLLECTION RE-
QUIREMENT. 
(a) REPEAL.—Section 704B of the Equal Credit Op-
portunity Act (15 U.S.C. 1691c–2) is repealed.
327 
(b) CONFORMING AMENDMENTS.—Section 701(b) of 
the Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is 
amended— 
(1) in paragraph (3), by inserting ‘‘or’’ at the 
end; 
(2) in paragraph (4), by striking ‘‘; or’’ and in-
serting a period; and 
(3) by striking paragraph (5). 
(c) CLERICAL AMENDMENT.—The table of sections 
for title VII of the Consumer Credit Protection Act is 
amended by striking the item relating to section 704B. 
Subtitle N—Community Bank 
Reporting Relief 
SEC. 566. SHORT FORM CALL REPORT. 
(a) IN GENERAL.—Section 7(a) of the Federal De-
posit Insurance Act (12 U.S.C. 1817(a)) is amended by 
adding at the end the following: 
‘‘(12) SHORT FORM REPORTING.— 
‘‘(A) IN GENERAL.—The appropriate Fed-
eral banking agencies shall issue regulations al-
lowing for a reduced reporting requirement for 
covered depository institutions when making the 
first and third report of condition for a year, as 
required pursuant to paragraph (3).
328 
‘‘(B) COVERED DEPOSITORY INSTITUTION 
DEFINED.—For purposes of this paragraph, the 
term ‘covered depository institution’ means an 
insured depository institution that— 
‘‘(i) is well capitalized (as defined 
under section 38(b)); and 
‘‘(ii) satisfies such other criteria as 
the appropriate Federal banking agencies 
determine appropriate.’’. 
(b) REPORT TO CONGRESS.—Not later than 180 days 
after the date of the enactment of this Act, and every 365 
days thereafter until the appropriate Federal banking 
agencies (as defined under section 3 of the Federal De-
posit Insurance Act) have issued the regulations required 
under section 7(a)(12)(A) of the Federal Deposit Insur-
ance Act, such agencies 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 describing the progress made in 
issuing such regulations.
329 
Subtitle O—Homeowner 
Information Privacy Protection 
SEC. 571. STUDY REGARDING PRIVACY OF INFORMATION 
COLLECTED UNDER THE HOME MORTGAGE 
DISCLOSURE ACT OF 1975. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study to determine whether the 
data required to be published, made available, or disclosed 
under the final rule, in connection with other publicly 
available data sources, including data made publicly avail-
able under Regulation C (12 CFR 1003) before the effec-
tive date of the final rule, could allow for or increase the 
probability of— 
(1) exposure of the identity of mortgage appli-
cants or mortgagors through reverse engineering; 
(2) exposure of mortgage applicants or mortga-
gors to identity theft or the loss of sensitive personal 
financial information; 
(3) the marketing or sale of unfair or deceptive 
financial products to mortgage applicants or mortga-
gors based on such data; 
(4) personal financial loss or emotional distress 
resulting from the exposure of mortgage applicants 
or mortgagors to identify theft or the loss of sen-
sitive personal financial information; and
330 
(5) the potential legal liability facing the Con-
sumer Law Enforcement Agency and market partici-
pants in the event the data required to be published, 
made available, or disclosed under the final rule 
leads or contributes to identity theft or the capture 
of sensitive personal financial information. 
(b) REPORT.—The Comptroller General of the 
United States shall submit to the Committee on Financial 
Services of the House of Representatives and the Com-
mittee on Banking, Housing, and Urban Affairs of the 
Senate a report that includes— 
(1) the findings and conclusions of the Comp-
troller General with respect to the study required 
under subsection (a); and 
(2) any recommendations for legislative or regu-
latory actions that— 
(A) would enhance the privacy of a con-
sumer when accessing mortgage credit; and 
(B) are consistent with consumer protec-
tions and safe and sound banking operations. 
(c) SUSPENSION
OF
DATA
SHARING
REQUIRE-
MENTS.—Notwithstanding any other provision of law, in-
cluding the final rule— 
(1) depository institutions shall not be required 
to publish, disclose, or otherwise make available to
331 
the public, pursuant to the Home Mortgage Disclo-
sure Act of 1975 (or regulations issued under such 
Act) any data that was not required to be published, 
disclosed, or otherwise made available pursuant to 
such Act (or regulations issued under such Act) on 
the day before the date of the enactment of the 
Dodd-Frank Wall Street Reform and Consumer Pro-
tection Act; and 
(2) the Consumer Law Enforcement Agency 
and the Financial Institutions Examination Council 
shall not publish, disclose, or otherwise make avail-
able to the public any such information received 
from a depository institution pursuant to the final 
rule, except as required by law. 
(d) TEMPORARY SUSPENSION OF DATA REPORTING 
REQUIREMENTS..—Notwithstanding any other provision 
of law, the effective date for new reporting requirements 
contained in the final rule shall be January 1, 2019. 
(e) DEFINITIONS.—For purposes of this section: 
(1) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ has the meaning given that 
term under section 303 of the Home Mortgage Dis-
closure Act of 1975 (12 U.S.C. 2802). 
(2) FINAL RULE.—The term ‘‘final rule’’ means 
the final rule issued by the Bureau of Consumer Fi-
332 
nancial Protection titled ‘‘Home Mortgage Disclo-
sure (Regulation C)’’ (October 28, 2015; 80 Fed. 
Reg. 66128). 
Subtitle P—Home Mortgage 
Disclosure Adjustment 
SEC. 576. DEPOSITORY INSTITUTIONS SUBJECT TO MAINTE-
NANCE OF RECORDS AND DISCLOSURE RE-
QUIREMENTS. 
(a) IN GENERAL.—Section 304 of the Home Mort-
gage Disclosure Act of 1975 (12 U.S.C. 2803) is amend-
ed— 
(1) by redesignating subsection (i) as paragraph 
(2) and adjusting the margin appropriately; and 
(2) by inserting before such paragraph (2) the 
following: 
‘‘(i) EXEMPTIONS.— 
‘‘(1) IN GENERAL.—With respect to a deposi-
tory institution, the requirements of subsections (a) 
and (b) shall not apply— 
‘‘(A) with respect to closed-end mortgage 
loans, if such depository institution originated 
less than 100 closed-end mortgage loans in each 
of the two preceding calendar years; and 
‘‘(B) with respect to open-end lines of 
credit, if such depository institution originated
333 
less than 200 open-end lines of credit in each 
of the two preceding calendar years.’’. 
(b) TECHNICAL CORRECTION.—Section 304(i)(2) of 
such Act, as redesignated by subsection (a), is amended 
by striking ‘‘section 303(2)(A)’’ and inserting ‘‘section 
303(3)(A)’’. 
Subtitle Q—Protecting Consumers’ 
Access to Credit 
SEC. 581. RATE OF INTEREST AFTER TRANSFER OF LOAN. 
(a) AMENDMENT TO THE REVISED STATUTES.—Sec-
tion 5197 of the Revised Statutes of the United States 
(12 U.S.C. 85) is amended by adding at the end the fol-
lowing new sentence: ‘‘A loan that is valid when made as 
to its maximum rate of interest in accordance with this 
section shall remain valid with respect to such rate regard-
less of whether the loan is subsequently sold, assigned, or 
otherwise transferred to a third party, and may be en-
forced by such third party notwithstanding any State law 
to the contrary.’’. 
(b) AMENDMENT
TO
THE HOME OWNERS’ LOAN 
ACT.—Section 4(g)(1) of the Home Owners’ Loan Act (12 
U.S.C. 1463(g)(1)) is amended by adding at the end the 
following new sentence: ‘‘A loan that is valid when made 
as to its maximum rate of interest in accordance with this 
subsection shall remain valid with respect to such rate re-
334 
gardless of whether the loan is subsequently sold, as-
signed, or otherwise transferred to a third party, and may 
be enforced by such third party notwithstanding any State 
law to the contrary.’’. 
(c) AMENDMENT TO THE FEDERAL CREDIT UNION 
ACT.—Section 205(g)(1) of the Federal Credit Union Act 
(12 U.S.C. 1785(g)(1)) is amended by adding at the end 
the following new sentence: ‘‘A loan that is valid when 
made as to its maximum rate of interest in accordance 
with this subsection shall remain valid with respect to such 
rate regardless of whether the loan is subsequently sold, 
assigned, or otherwise transferred to a third party, and 
may be enforced by such third party notwithstanding any 
State law to the contrary.’’. 
(d) AMENDMENT TO THE FEDERAL DEPOSIT INSUR-
ANCE ACT.—Section 27(a) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1831d(a)) is amended by adding at 
the end the following new sentence: ‘‘A loan that is valid 
when made as to its maximum rate of interest in accord-
ance with this section shall remain valid with respect to 
such rate regardless of whether the loan is subsequently 
sold, assigned, or otherwise transferred to a third party, 
and may be enforced by such third party notwithstanding 
any State law to the contrary.’’.
335 
Subtitle R—NCUA Overhead 
Transparency 
SEC. 586. FUND TRANSPARENCY. 
Section 203 of the Federal Credit Union Act (12 
U.S.C. 1783) is amended by adding at the end the fol-
lowing: 
‘‘(g) FUND TRANSPARENCY.— 
‘‘(1) IN
GENERAL.—The Board shall accom-
pany each annual budget submitted pursuant to sec-
tion 209(b) with a report containing— 
‘‘(A) a detailed analysis of how the ex-
penses of the Administration are assigned be-
tween prudential activities and insurance-re-
lated activities and the extent to which those 
expenses are paid from the fees collected pursu-
ant to section 105 or from the Fund; and 
‘‘(B) the Board’s supporting rationale for 
any proposed use of amounts in the Fund con-
tained in such budget, including detailed break-
downs and supporting rationales for any such 
proposed use related to titles of this Act other 
than this title. 
‘‘(2) PUBLIC
DISCLOSURE.—The Board shall 
make each report described under paragraph (1)
336 
available to the public and available on the Board’s 
website.’’. 
Subtitle S—Housing Opportunities 
Made Easier 
SEC. 591. CLARIFICATION OF DONATED SERVICES TO NON- 
PROFITS. 
Section 129E(i) of the Truth in Lending Act (15 
U.S.C. 1639e(i)) is amended by adding at the end the fol-
lowing: 
‘‘(4) RULE OF CONSTRUCTION RELATED TO AP-
PRAISAL DONATIONS.—For purposes of paragraph 
(1), if a fee appraiser voluntarily donates appraisal 
services to an organization described in section 
170(c)(2) of the Internal Revenue Code of 1986, 
such voluntary donation shall be deemed customary 
and reasonable.’’. 
Subtitle 
T—Protection 
of 
Con-
sumer 
Information 
by 
Con-
sumer Reporting Agencies 
SEC. 596. SENSE OF CONGRESS RELATED TO PROTECTION 
OF CONSUMER INFORMATION BY CONSUMER 
REPORTING AGENCIES. 
(a) IN GENERAL.—It is the sense of the Congress 
that consumer reporting agencies and subsidiaries of con-
sumer reporting agencies should, when providing access
337 
to consumers to the information contained in the file of 
the consumer maintained by the consumer reporting agen-
cy, use strong multi-factor authentication procedures to 
verify the identity of consumers. 
(b) DEFINITIONS.—For purposes of this section, the 
terms ‘‘consumer’’, ‘‘consumer reporting agency’’, and 
‘‘file’’ have the meanings given those terms in section 603 
of the Fair Credit Reporting Act (15 U.S.C. 1681a). 
Subtitle U—Legitimate Financial 
Transactions Report 
SEC. 597. TREASURY REPORT ON LEGITIMATE FINANCIAL 
TRANSACTIONS. 
Not later than the end of the 90-day period beginning 
on the date of the enactment of this Act, the Secretary 
of the Treasury shall issue a report to the Congress on— 
(1) the Secretary’s efforts to ensure that legiti-
mate financial transactions move freely and globally; 
and 
(2) how the Secretary coordinates on such ef-
forts with Federal bank regulators, financial institu-
tions, and money service businesses.
338 
Subtitle V—Dividend Waiver Au-
thority for Mutual Holding Com-
panies 
SEC. 598. DIVIDEND WAIVER AUTHORITY FOR MUTUAL 
HOLDING COMPANIES. 
Section 10(o)(11) of the Home Owners’ Loan Act (12 
U.S.C. 1467a(o)(11)) is amended— 
(1) in subparagraph (D)— 
(A) in clause (i), by adding ‘‘and’’ at the 
end; 
(B) in clause (ii), by striking ‘‘; and’’ and 
inserting a period; and 
(C) by striking clause (iii); 
(2) by amending subparagraph (E) to read as 
follows: 
‘‘(E) VALUATION.—The appropriate Fed-
eral banking agency may not consider waived 
dividends in determining an appropriate ex-
change ratio in the event of a full conversion to 
stock form.’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(F) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed to author-
ize the appropriate Federal banking agency to
339 
require a vote of members of a mutual holding 
company to approve one or more dividend waiv-
ers or to place any additional restrictions on 
dividend waivers by mutual holding companies 
that are inconsistent with or exceed the require-
ments set forth in this paragraph.’’. 
TITLE VI—REGULATORY RELIEF 
FOR STRONGLY CAPITALIZED, 
WELL 
MANAGED 
BANKING 
ORGANIZATIONS 
SEC. 601. CAPITAL ELECTION. 
(a) IN GENERAL.—A banking organization may make 
an election under this section to be treated as a qualifying 
banking organization for purposes of the regulatory relief 
described under section 602. 
(b) REQUIREMENTS.—A banking organization may 
qualify to be treated as a qualifying banking organization 
if— 
(1) the banking organization has an average le-
verage ratio of at least 10 percent; 
(2) with respect to a depository institution hold-
ing company, each insured depository institution 
subsidiary of the holding company simultaneously 
makes the election described under subsection (a); 
and
340 
(3) with respect to an insured depository insti-
tution, any parent depository institution holding 
company of the institution simultaneously makes the 
election described under subsection (a). 
(c) ELECTION PROCESS.—To make an election under 
this section, a banking organization shall submit an elec-
tion to the appropriate Federal banking agency (and any 
applicable State bank supervisor that regulates the bank-
ing organization) containing— 
(1) a notice of such election; 
(2) the banking organization’s average leverage 
ratio, as well as the organization’s quarterly leverage 
ratio for each of the most recently completed four 
calendar quarters; 
(3) if the banking organization is a depository 
institution holding company, the information de-
scribed under paragraph (2) for each of the organi-
zation’s insured depository institution subsidiaries; 
and 
(4) if the banking organization is an insured 
depository institution, the information described 
under paragraph (2) for any parent depository insti-
tution holding company of the institution. 
(d) EFFECTIVE DATE OF ELECTION.—
341 
(1) IN GENERAL.—An election made under this 
section shall take effect at the end of the 30-day pe-
riod beginning on the date that the appropriate Fed-
eral banking agency receives the application de-
scribed under subsection (c), unless the appropriate 
Federal banking agency determines that the banking 
organization has not met the requirements described 
under subsection (b). 
(2) NOTICE OF FAILURE TO MEET REQUIRE-
MENTS.—If the appropriate Federal banking agency 
determines that a banking organization submitting 
an election notice under subsection (c) does not meet 
the requirements described under subsection (b), the 
agency shall— 
(A) notify the banking organization (and 
any applicable State bank supervisor that regu-
lates the banking organization), in writing, of 
such determination as soon as possible after 
such determination is made, but in no case 
later than the end of the 30-day period begin-
ning on the date that the appropriate Federal 
banking agency receives the election; and 
(B) include in such notification the specific 
reasons for such determination and steps that
342 
the banking organization can take to meet such 
requirements. 
(e) TREATMENT OF CERTAIN NEW BANKING ORGA-
NIZATIONS.—In the case of a banking organization that 
is a newly-chartered insured depository institution or a 
banking organization that becomes a banking organization 
because it controls a newly-chartered insured depository 
institution, such banking organization may be treated as 
a qualifying banking organization immediately upon be-
coming a banking organization, if— 
(1) an election to be treated as a qualifying 
banking organization was included in the application 
filed with the appropriate Federal banking agency in 
connection with becoming a banking organization; 
and 
(2) as of the date the banking organization be-
comes a banking organization, the banking organiza-
tion’s tangible equity divided by the banking organi-
zation’s leverage exposure, expressed as a percent-
age, is at least 10 percent. 
(f) FAILURE TO MAINTAIN QUARTERLY LEVERAGE 
RATIO AND LOSS OF ELECTION.— 
(1) EFFECT OF FAILURE TO MAINTAIN QUAR-
TERLY LEVERAGE RATIO.—
343 
(A) IN GENERAL.—If, with respect to the 
most recently completed calendar quarter, the 
appropriate Federal banking agency determines 
that a qualifying banking organization’s quar-
terly leverage ratio is below 10 percent— 
(i) the appropriate Federal banking 
agency shall notify the qualifying banking 
organization and any applicable State bank 
supervisor that regulates the banking orga-
nization of such determination; 
(ii) the appropriate Federal banking 
agency may prohibit the banking organiza-
tion from making a capital distribution; 
and 
(iii) the banking organization shall, 
within 3 months of the first such deter-
mination, submit a capital restoration plan 
to the appropriate Federal banking agency. 
(B) LOSS OF ELECTION AFTER ONE-YEAR 
REMEDIATION PERIOD.—If a banking organiza-
tion described under subparagraph (A) does 
not, within the 1-year period beginning on the 
date of such determination, raise the organiza-
tion’s quarterly leverage ratio for a calendar 
quarter ending in such 1-year period to at least
344 
10 percent, the banking organization’s election 
under this section shall be terminated, and the 
appropriate Federal banking agency shall notify 
any applicable State bank supervisor that regu-
lates the banking organization of such termi-
nation. 
(C) EFFECT OF SUBSIDIARY ON PARENT 
ORGANIZATION.—With respect to a qualifying 
banking organization described under subpara-
graph (A) that is an insured depository institu-
tion, any parent depository institution holding 
company of the qualifying banking organization 
shall— 
(i) if the appropriate Federal banking 
agency determines it appropriate, be pro-
hibited from making a capital distribution 
(other than a capital contribution to such 
qualifying banking organization described 
under subparagraph (A)); and 
(ii) if the qualifying banking organiza-
tion has an election terminated under sub-
paragraph (B), any such parent depository 
institution holding company shall also have 
its election under this section terminated.
345 
(2) IMMEDIATE
LOSS
OF
ELECTION
IF
THE 
QUARTERLY LEVERAGE RATIO FALLS BELOW 6 PER-
CENT.— 
(A) IN GENERAL.—If, with respect to the 
most recently completed calendar quarter, the 
appropriate Federal banking agency determines 
that a qualifying banking organization’s quar-
terly leverage ratio is below 6 percent, the 
banking organization’s election under this sec-
tion shall be terminated, and the appropriate 
Federal banking agency shall notify any appli-
cable State bank supervisor that regulates the 
banking organization of such termination. 
(B) EFFECT OF SUBSIDIARY ON PARENT 
ORGANIZATION.—With respect to a qualifying 
banking organization described under subpara-
graph (A) that is an insured depository institu-
tion, any parent depository institution holding 
company of the qualifying banking organization 
shall also have its election under this section 
terminated. 
(3) ABILITY TO MAKE FUTURE ELECTIONS.—If 
a banking organization has an election under this 
section terminated, the banking organization may 
not apply for another election under this section
346 
until the banking organization has maintained a 
quarterly leverage ratio of at least 10 percent for 8 
consecutive calendar quarters. 
SEC. 602. REGULATORY RELIEF. 
(a) IN GENERAL.—A qualifying banking organization 
shall be exempt from the following: 
(1) Any Federal law, rule, or regulation ad-
dressing capital or liquidity requirements or stand-
ards. 
(2) Any Federal law, rule, or regulation that 
permits an appropriate Federal banking agency to 
object to a capital distribution. 
(3) Any consideration by an appropriate Fed-
eral banking agency of the following: 
(A) Any risk the qualifying banking orga-
nization may pose to ‘‘the stability of the finan-
cial system of the United States’’, under section 
5(c)(2) of the Bank Holding Company Act of 
1956. 
(B) The ‘‘extent to which a proposed ac-
quisition, merger, or consolidation would result 
in greater or more concentrated risks to the 
stability of the United States banking or finan-
cial system’’, under section 3(c)(7) of the Bank 
Holding Company Act of 1956, so long as the
347 
banking organization, after such proposed ac-
quisition, merger, or consolidation, would main-
tain a quarterly leverage ratio of at least 10 
percent. 
(C) Whether the performance of an activity 
by the banking organization could possibly pose 
a ‘‘risk to the stability of the United States 
banking or financial system’’, under section 
4(j)(2)(A) of the Bank Holding Company Act 
of 1956. 
(D) Whether the acquisition of control of 
shares of a company engaged in an activity de-
scribed in section 4(j)(1)(A) of the Bank Hold-
ing Company Act of 1956 could possibly pose a 
‘‘risk to the stability of the United States bank-
ing 
or 
financial 
system’’, 
under 
section 
4(j)(2)(A) of the Bank Holding Company Act 
of 1956, so long as the banking organization, 
after acquiring control of such company, would 
maintain a quarterly leverage ratio of at least 
10 percent. 
(E) Whether a merger would pose a ‘‘risk 
to the stability of the United States banking or 
financial system’’, under section 18(c)(5) of the 
Federal Deposit Insurance Act, so long as the
348 
banking organization, after such proposed 
merger, would maintain a quarterly leverage 
ratio of at least 10 percent. 
(F) Any risk the qualifying banking orga-
nization may pose to ‘‘the stability of the finan-
cial system of the United States’’, under section 
10(b)(4) of the Home Owners’ Loan Act. 
(4) Subsections (i)(8) and (k)(6)(B)(ii) of sec-
tion 4 and section 14 of the Bank Holding Company 
Act of 1956. 
(5) Section 18(c)(13) of the Federal Deposit 
Insurance Act. 
(6) Section 163 of the Financial Stability Act 
of 2010. 
(7) Section 10(e)(2)(E) of the Home Owners’ 
Loan Act. 
(8) Any Federal law, rule, or regulation imple-
menting standards of the type provided for in sub-
sections (b), (c), (d), (e), (g), (h), (i), and (j) of sec-
tion 165 of the Financial Stability Act of 2010. 
(9) Any Federal law, rule, or regulation pro-
viding limitations on mergers, consolidations, or ac-
quisitions of assets or control, to the extent such 
limitations relate to capital or liquidity standards or 
concentrations of deposits or assets, so long as the
349 
banking organization, after such proposed merger, 
consolidation, or acquisition, would maintain a quar-
terly leverage ratio of at least 10 percent. 
(b) QUALIFYING BANKING ORGANIZATIONS TREAT-
ED AS WELL CAPITALIZED.—A qualifying banking organi-
zation shall be deemed to be ‘‘well capitalized’’ for pur-
poses of— 
(1) section 216 of the Federal Credit Union 
Act; and 
(2) sections 29, 38, 44, and 46 of the Federal 
Deposit Insurance Act. 
(c) TREATMENT OF CERTAIN RISK-WEIGHTED ASSET 
REQUIREMENTS FOR QUALIFYING BANKING ORGANIZA-
TIONS.— 
(1) ACQUISITION SIZE CRITERIA TREATMENT.— 
A qualifying banking organization shall be deemed 
to meet the criteria described under section 
4(j)(4)(D) of the Bank Holding Company Act of 
1956, so long as after the proposed transaction the 
acquiring qualifying banking organization would 
maintain a quarterly leverage ratio of at least 10 
percent. 
(2) USE OF LEVERAGE EXPOSURE.—With re-
spect to a qualifying banking organization, in deter-
mining whether a proposal qualifies with the criteria
350 
described under subparagraphs (A)(iii) and (B)(i) of 
section 4(j)(4) of the Bank Holding Company Act of 
1956, the Board of Governors of the Federal Re-
serve System shall consider the leverage exposure of 
an insured depository institution instead of the total 
risk-weighted assets of such institution. 
SEC. 603. CONTINGENT CAPITAL STUDY. 
(a) STUDY.—The Board of Governors of the Federal 
Reserve System, the Federal Deposit Insurance Corpora-
tion, and the Office of the Comptroller of the Currency 
shall each carry out a study, which shall include holding 
public hearings, on how to design a requirement that 
banking organizations issue contingent capital with a mar-
ket-based conversion trigger. 
(b) REPORT.—Not later than the end of the 1-year 
period beginning on the date of the enactment of this Act, 
each agency described under subsection (a) shall submit 
a report to the Congress containing— 
(1) all findings and determinations made by the 
agency in carrying out the study required under sub-
section (a); and 
(2) the agency’s recommendations on how the 
Congress should design a requirement that banking 
organizations issue contingent capital with a market- 
based conversion trigger.
351 
SEC. 604. STUDY ON ALTERING THE CURRENT PROMPT 
CORRECTIVE ACTION RULES. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study to assess the benefits and 
feasibility of altering the current prompt corrective action 
rules and replacing the Basel-based capital ratios with the 
nonperforming asset coverage ratio or NACR as the trig-
ger for specific required supervisory interventions. The 
Comptroller General shall ensure that such study includes 
the following: 
(1) An assessment of the performance of an 
NACR forward-looking measure of a banking orga-
nization’s solvency condition relative to the regu-
latory capital ratios currently used by prompt cor-
rective action rules. 
(2) An analysis of the performance of alter-
native definitions of nonperforming assets. 
(3) An assessment of the impact of two alter-
native intervention thresholds: 
(A) An initial (high) intervention thresh-
old, below which appropriate Federal banking 
agency examiners are required to intervene and 
assess a banking organization’s condition and 
prescribe remedial measures. 
(B) A lower threshold, below which bank-
ing organizations must increase their capital,
352 
seek an acquirer, or face mandatory resolution 
within 90 days. 
(b) REPORT.—Not later than the end of the 1-year 
period beginning on the date of the enactment of this Act, 
the Comptroller General shall submit a report to the Con-
gress containing— 
(1) all findings and determinations made in car-
rying out the study required under subsection (a); 
and 
(2) recommendations on the most suitable defi-
nition of nonperforming assets, as well as the two 
numerical thresholds that trigger specific required 
supervisory interventions. 
SEC. 605. DEFINITIONS. 
For purposes of this title: 
(1) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’— 
(A) has the meaning given such term 
under section 3 of the Federal Deposit Insur-
ance Act; and 
(B) means the National Credit Union Ad-
ministration, in the case of an insured credit 
union.
426 
SEC. 803. SEC RESERVE FUND ABOLISHED. 
Section 4 of the Securities Exchange Act of 1934 (15 
U.S.C. 78d) is amended by striking subsection (i). 
SEC. 804. FEES TO OFFSET APPROPRIATIONS. 
(a) SECTION 31 OF THE SECURITIES EXCHANGE ACT 
OF 1934.—Section 31 of the Securities Exchange Act of 
1934 (15 U.S.C. 78ee) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) COLLECTION.—The Commission shall, in ac-
cordance with this section, collect transaction fees and as-
sessments.’’; 
(2) in subsection (i)— 
(A) in paragraph (1)(A), by inserting ‘‘ex-
cept as provided in paragraph (2),’’ before 
‘‘shall’’; and 
(B) by striking paragraph (2) and insert-
ing the following: 
‘‘(2) GENERAL REVENUE.—Any fees collected 
for a fiscal year pursuant to this section, sections 
13(e) and 14(g) of this title, and section 6(b) of the 
Securities Act of 1933 in excess of the amount pro-
vided in appropriation Acts for collection for such 
fiscal year pursuant to such sections shall be depos-
ited and credited as general revenue of the Treas-
ury.’’;