243 
(2) by striking ‘‘adequately managed’’ and in-
serting ‘‘well managed’’. 
(b) FEDERAL DEPOSIT INSURANCE ACT AMEND-
MENT.—Section 44(b)(4)(B) of the Federal Deposit In-
surance Act (12 U.S.C. 1831u(b)(4)(B)) is amended to 
read as follows: 
‘‘(B) the responsible agency determines 
that the resulting bank will be well capitalized 
and well managed upon the consummation of 
the transaction.’’. 
SEC. 1306. ENHANCING EXISTING RESTRICTIONS ON BANK 
TRANSACTIONS WITH AFFILIATES. 
(a) Section 23A of the Federal Reserve Act (12 
U.S.C. 371c) is amended— 
(1) in subsection (b)(1), by striking subpara-
graph (D) and inserting the following new subpara-
graph: 
‘‘(D) any investment fund with respect to 
which a member bank or affiliate thereof is an 
investment adviser; and’’ 
(2) in subsection (b)(7)(A), by inserting ‘‘(in-
cluding a purchase of assets subject to an agreement 
to repurchase)’’ after ‘‘affiliate’’; 
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(3) in subsection (b)(7)(C), by striking ‘‘, in-
cluding assets subject to an agreement to repur-
chase,’’; 
(4) in subsection (b)(7)(D)— 
(A) by inserting ‘‘or other debt obliga-
tions’’ after ‘‘acceptance of securities’’, and 
(B) by striking ‘‘or’’ after the semicolon; 
(5) in subsection (b)(7), by inserting at the end 
the following new subparagraphs: 
‘‘(F) any securities borrowing and lending 
transactions with an affiliate to the extent that 
the transactions create credit exposure of the 
member bank to the affiliate; or 
‘‘(G) current and potential future credit 
exposure to the affiliate on derivative trans-
actions with the affiliate;’’; 
(6) in subsection (c)(1), by striking ‘‘at the 
time of the transaction,’’ and inserting ‘‘at all 
times’’; 
(7) in subsection (c)— 
(A) by striking paragraph (2); 
(B) by redesignating paragraphs (3), (4), 
and (5) as paragraphs (2), (3), and (4), respec-
tively; 
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(8) in subsection (c)(3) (as so redesignated by 
paragraph (7)), by inserting ‘‘or other debt obliga-
tions’’ after ‘‘securities’’; 
(9) in subsection (f)(2), by inserting at the end 
the following: ‘‘The Board may not, by regulation or 
order, grant an exemption under this section unless 
the Board obtains the concurrence of the Chairman 
of the Federal Deposit Insurance Corporation.’’; and 
(10) in subsection (f)— 
(A) by redesignating paragraph (3) as 
paragraph (4); 
(B) and inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) CONCURRENCE OF THE COMPTROLLER OF 
THE CURRENCY.—With respect to a transaction or 
relationship involving a national bank or Federal 
savings association, the Board may not grant an ex-
emption under this section unless the Board obtains 
the concurrence of the Comptroller of the Currency 
(in addition to obtaining the concurrence of the 
Chairman of the Federal Deposit Insurance Cor-
poration under paragraph (2)).’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 23B(e) of the Federal Reserve Act (12 U.S.C. 
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371–1(e)), is amended by inserting at the end the fol-
lowing new paragraph: 
‘‘(3) The Board may not grant an exemption or 
exclusion under this section unless the Board ob-
tains the concurrence of the Chairman of the Fed-
eral Deposit Insurance Corporation.’’. 
SEC. 1307. ELIMINATING EXCEPTIONS FOR TRANSACTIONS 
WITH FINANCIAL SUBSIDIARIES. 
Section 23A(e) of the Federal Reserve Act (12 U.S.C. 
371c(e)) is amended— 
(1) by striking paragraph (3); and 
(2) by redesignating paragraph (4) as para-
graph (3). 
SEC. 1308. LENDING LIMITS APPLICABLE TO CREDIT EXPO-
SURE ON DERIVATIVE TRANSACTIONS, RE-
PURCHASE AGREEMENTS, REVERSE REPUR-
CHASE 
AGREEMENTS, 
AND 
SECURITIES 
LENDING AND BORROWING TRANSACTIONS. 
Section 5200 of the Revised Statutes of the United 
States (12 U.S.C. 84) is amended— 
(1) in subsection (b)(1), by striking ‘‘shall in-
clude all direct or indirect’’ and all that follows 
through ‘‘commitment;’’ and inserting: ‘‘shall in-
clude— 
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‘‘(A) all direct or indirect advances of 
funds to a person made on the basis of any ob-
ligation of that person to repay the funds or re-
payable from specific property pledged by or on 
behalf of the person; 
‘‘(B) to the extent specified by the Comp-
troller of the Currency, such term shall also in-
clude any liability of a national banking associa-
tion to advance funds to or on behalf of a per-
son pursuant to a contractual commitment; and 
‘‘(C) credit exposure to a person arising 
from a derivative transaction, repurchase agree-
ment, reverse repurchase agreement, securities 
lending transaction, or securities borrowing 
transaction between the national banking asso-
ciation and the person;’’; 
(2) in subsection (b)(2) by striking the period 
at the end and inserting ‘‘; and’’; 
(3) in subsection (b), by inserting after para-
graph (2) the following new paragraph: 
‘‘(3) the term ‘derivative transaction’ means 
any transaction that is a contract, agreement, swap, 
warrant, note, or option that is based, in whole or 
in part, on the value of, any interest in, or any 
quantitative measure or the occurrence of any event 
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relating to, one or more commodities, securities, cur-
rencies, interest or other rates, indices, or other as-
sets.’’; and 
(4) in subsection (d), by inserting after para-
graph (2) the following new paragraph: 
‘‘(3) The Comptroller of the Currency shall pre-
scribe rules to administer and carry out the pur-
poses of this section with respect to credit exposures 
arising from any derivative transaction, repurchase 
agreement, reverse repurchase agreement, securities 
lending transaction, or securities borrowing trans-
action. Rules required to be prescribed under this 
paragraph (3) shall take effect, in final form, not 
later than 180 days after the date of enactment of 
the Financial Stability Improvement Act of 2009.’’. 
SEC. 1309. RESTRICTION ON CONVERSIONS OF TROUBLED 
BANKS AND THRIFTS. 
(a) CONVERSION OF A NATIONAL BANKING ASSOCIA-
TION TO A STATE BANK.—The National Bank Consolida-
tion and Merger Act (12 U.S.C. 215 et seq.) is amended 
by redesignating section 7 as section 8 and by inserting 
after section 6 the following: 
‘‘SEC. 7. PROHIBITION ON CERTAIN CONVERSIONS. 
‘‘A national bank may not convert to a State bank 
during any period of time in which it is subject to a cease 
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and desist order, memorandum of understanding, or other 
enforcement action entered into with or issued by the 
Comptroller of the Currency.’’ 
(b) CONVERSION OF A STATE BANK TO A NATIONAL 
BANK.—Section 5154 of the Revised Statutes (12 U.S.C. 
35) is amended by adding at the end the following new 
sentence: ‘‘The Comptroller of the Currency shall not ap-
prove the conversion of a State bank to a national bank 
during any period of time in which the State bank is sub-
ject to a cease and desist order, memorandum of under-
standing, or other enforcement action entered into or 
issued by a State bank supervisor, the Federal Deposit 
Insurance Corporation, the Board of Governors of the 
Federal Reserve System or a Federal Reserve Bank.’’. 
(c) CONVERSION BETWEEN A FEDERAL SAVINGS AS-
SOCIATION AND A STATE SAVINGS ASSOCIATION.—Section 
5(i) of the Home Owners’ Loan Act (12 U.S.C. 1464(i)) 
is amended by adding at the end the following new para-
graph: 
‘‘(6) 
PROHIBITION
ON
CERTAIN
CONVER-
SIONS.—A Federal savings association may not con-
vert to a State savings association, and a State sav-
ings association may not convert to a Federal sav-
ings association, during any period of time in which 
such savings association is subject to a cease and de-
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sist order, memorandum of understanding, or other 
enforcement action entered into with or issued by 
the Director of the Office of Thrift Supervision or 
a State savings association supervisor.’’. 
SEC. 1310. LENDING LIMITS TO INSIDERS. 
Section 22(h)(9)(D)(ii) of the Federal Reserve Act 
(12 U.S.C. 375b(h)(9)(D)(ii)) is amended by inserting ‘‘, 
except that a member bank shall be deemed to have ex-
tended credit to a person if the member bank has credit 
exposure to the person arising from a derivative trans-
action, repurchase agreement, reverse repurchase agree-
ment, securities lending transaction, or securities bor-
rowing transaction between the member bank and the per-
son’’ before the period at the end. 
SEC. 1311. LIMITATIONS ON PURCHASES OF ASSETS FROM 
INSIDERS. 
(a) Section 18 of the Federal Deposit Insurance Act 
(12 U.S.C. 1828) is amended by inserting after subsection 
(y) (as added by section 1408) the following new sub-
section: 
‘‘(z) GENERAL PROHIBITION.—An insured depository 
institution shall not purchase an asset from, or sell an 
asset to, one of its executive officers, directors, or principal 
shareholders or any related interest of such person (as 
such terms are defined in section 22(h) of Federal Reserve 
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251 
Act) unless the transaction is on market terms and, if the 
transaction represents more than 10 percent of the insti-
tution’s capital stock and surplus, the transaction has 
been approved in advance by a majority of the institution’s 
board of directors (with interested directors of the insured 
depository institution not participating in the approval of 
the transaction).’’. 
(b) FDIC RULEMAKING AUTHORITY.—The Federal 
Deposit Insurance Corporation may prescribe rules to im-
plement the requirements of subsection (a) and the 
amendments made by subsection (a). 
(c) AMENDMENTS
TO
THE
FEDERAL
RESERVE 
ACT.—Section 22 of the Federal Reserve Act (12 U.S.C. 
375) is amended by striking subsection (d). 
SEC. 1312. RULES REGARDING CAPITAL LEVELS OF BANK 
HOLDING COMPANIES. 
Section 5(b) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1844(b)) is amended by inserting ‘‘, in-
cluding regulations relating to the capital levels of bank 
holding companies’’ before the period at the end. 
SEC. 1313. ENHANCEMENTS TO FACTORS TO BE CONSID-
ERED IN CERTAIN ACQUISITIONS. 
(a) BANK ACQUISITIONS.—Section 3(c) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1842(c)) is 
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amended by inserting at the end the following new para-
graph: 
‘‘(7) FINANCIAL STABILITY.— 
‘‘(A) IN
GENERAL.—In every case, the 
Board shall take into consideration the extent 
to which the proposed acquisition, merger, or 
consolidation may pose risk to the stability of 
the United States financial system or the econ-
omy of the United States , including the result-
ing scope, nature, size, scale, concentration, or 
interconnectedness of activities that are finan-
cial in nature. 
‘‘(B) STANDARDS
FOR
APPROVAL.—The 
Board may in its sole discretion disapprove any 
acquisition, merger, or consolidation of, or by, 
a financial company subject to stricter pruden-
tial standards if the Board determines that the 
resulting concentration of liabilities on a con-
solidated basis is likely to pose a greater threat 
to financial stability during times of severe eco-
nomic distress.’’. 
(b) NONBANK ACQUISITIONS.— 
(1) Section 4(j)(2)(A) of the Bank Holding 
Company is amended by— 
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(A) striking ‘‘or’’ before ‘‘unsound banking 
practices’’; and 
(B) inserting before the period at the end 
the following: ‘‘, or risk to the stability of the 
United States financial system or the economy 
of the United States’’. 
(2) Section 4(k)(6) of the Bank Holding Com-
pany Act of 1956 is amended by striking subpara-
graph (B) and inserting the following new subpara-
graph: 
‘‘(B) A financial holding company may 
commence any activity or acquire any company, 
pursuant to paragraph (4) or any regulation 
prescribed or order issued under paragraph (5), 
without prior approval of the Board, except— 
‘‘(i) for a transaction in which the 
total assets to be acquired by the financial 
holding company exceed $25 billion; and 
‘‘(ii) as provided in subsection (j) with 
regard to the acquisition of a savings asso-
ciation.’’. 
(c) BANK MERGER ACT TRANSACTIONS.—Section 
8(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(c)(5)) is amended by— 
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254 
(1) by striking ‘‘and’’ before ‘‘the convenience 
and needs of the community to be served’’; and 
(2) by inserting before the period at the end the 
following: ‘‘, and the risk to the stability of the 
United States financial system and the economy of 
the United States based on, among other things, the 
scope, nature, size, scale, concentration, or inter-
connectedness of activities that are financial in na-
ture’’. 
SEC. 1314. ELIMINATION OF ELECTIVE INVESTMENT BANK 
HOLDING COMPANY FRAMEWORK. 
Section 17 of the Securities Exchange Act of 1934 
(15 U.S.C. 78q) is amended— 
(1) by striking subsection (i); and 
(2) by redesignating subsections (j) and (k) as 
subsections (i) and (j), respectively. 
SEC. 1315. EXAMINATION FEES FOR LARGE BANK HOLDING 
COMPANIES. 
The Bank Holding Company Act of 1956 is amended 
by inserting after section 5 the following new section: 
‘‘SEC. 5A. EXAMINATION FEES. 
‘‘The Board of Governors of the Federal Reserve Sys-
tem or the Federal Reserve Banks shall assess fees on 
bank holding companies with total consolidated assets of 
$10 billion or more. Such fees shall be sufficient to defray 
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the cost of the examination of such bank holding compa-
nies.’’. 
Subtitle E—Improvements to the 
Federal Deposit Insurance Fund 
SEC. 1401. ACCOUNTING FOR ACTUAL RISK TO THE DE-
POSIT INSURANCE FUND. 
(a) Section 7(b)(1)(C) of the Federal Deposit Insur-
ance Act is amended to read as follows: 
‘‘(C) ‘RISK-BASED
ASSESSMENT
SYSTEM’ 
DEFINED.—For purposes of this paragraph, the 
term ‘risk-based assessment system’ means a 
system for calculating a depository institution’s 
assessment based on— 
‘‘(i) the probability that the Deposit 
Insurance Fund will incur a loss with re-
spect to the institution; 
‘‘(ii) the likely amount of any such 
loss; 
‘‘(iii) the risks to the Deposit Insur-
ance Fund attributable to such depository 
institution, including risks posed by its af-
filiates to the extent the Corporation deter-
mines appropriate, taking into account— 
‘‘(I) the amount, different cat-
egories, and concentrations of assets 
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of the insured depository institution 
and its affiliates, including both on- 
balance sheet and off-balance sheet 
assets; 
‘‘(II) the amount, different cat-
egories, and concentrations of liabil-
ities, both insured and uninsured, con-
tingent and noncontingent, including 
both on-balance sheet and off-balance 
sheet liabilities, of the insured deposi-
tory institution and its affiliates; and 
‘‘(III) any other factors the Cor-
poration determines are relevant to 
assessing the risks; and 
‘‘(iv) the revenue needs of the Deposit 
Insurance Fund.’’. 
(b) Section 7(b)(2) of the Federal Deposit Insurance 
Act is amended by striking subparagraph (D) and by re-
designating subparagraph (E) as subparagraph (D). 
SEC. 1402. CREATING A RISK-FOCUSED ASSESSMENT BASE. 
Section 7(b)(2) of such Act, as amended, is further 
amended by amending subparagraph (C) to read as fol-
lows: 
‘‘(C) ASSESSMENT.—The assessment of 
any insured depository institution imposed 
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under this subsection shall be an amount equal 
to the product of— 
‘‘(i) an assessment rate established by 
the Corporation; and 
‘‘(ii) the amount of the insured depos-
itory institution’s average total assets dur-
ing the assessment period minus the 
amount of the insured depository institu-
tion’s average tangible equity during the 
assessment period.’’. 
SEC. 1403. ELIMINATION OF PROCYCLICAL ASSESSMENTS. 
Section 7(e) of the Federal Deposit Insurance Act is 
amended— 
(1) in paragraph (2)— 
(A) by amending subparagraph (B) to read 
as follows: 
‘‘(B) LIMITATION.—The Board of Direc-
tors may, in its sole discretion, suspend or limit 
the declaration of payment of dividends under 
subparagraph (A).’’; 
(B) by amending subparagraph (C) to read 
as follows: 
‘‘(C) NOTICE AND OPPORTUNITY FOR COM-
MENT.—The Corporation shall prescribe, by 
regulation, after notice and opportunity for 
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comment, the method for the declaration, cal-
culation, distribution, and payment of dividends 
under this paragraph’’; and 
(C) by striking subparagraphs (D) through 
(G); and 
(2) in paragraph (4)(A) by striking ‘‘para-
graphs (2)(D) and’’ and inserting ‘‘paragraphs (2) 
and’’. 
SEC. 1404. ENHANCED ACCESS TO INFORMATION FOR DE-
POSIT INSURANCE PURPOSES. 
(a) Section 7(a)(2)(B) of the Federal Deposit Insur-
ance Act is amended by striking ‘‘, after agreement with 
the Comptroller of the Currency, the Board of Governors 
of the Federal Reserve ystem, and the Director of the Of-
fice of Thrift Supervision, as appropriate,’’. 
(b) Section 7(b)(1)(E) of the Federal Deposit Insur-
ance Act is amended— 
(1) in clause (i), by striking ‘‘such as’’ and in-
serting ‘‘including’’; and 
(2) by striking clause (iii). 
SEC. 1405. TRANSITION RESERVE RATIO REQUIREMENTS 
TO REFLECT NEW ASSESSMENT BASE. 
(a) Section 7(b)(3)(B) of the Federal Deposit Insur-
ance Act is amended to read as follows: 
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259 
‘‘(B) MINIMUM RESERVE RATIO.—The re-
serve ratio designated by the Board of Direc-
tors for any year may not be less than 1.15 per-
cent of estimated insured deposits, or the com-
parable percentage of the assessment base set 
forth in paragraph (2)(C).’’. 
(b) Section 3(y)(3) of the Federal Deposit Insurance 
Act is amended by inserting ‘‘, or such comparable per-
centage of the assessment base set forth in section 
7(b)(2)(C)’’ before the period. 
(c) For a period of not less than 5 years after the 
date of the enactment of this title, the Federal Deposit 
Insurance Corporation shall make available to the public 
the reserve ratio and the designated reserve ratio using 
both estimated insured deposits and the assessment base 
under section 7(b)(2)(C) of the Federal Deposit Insurance 
Act. 
Subtitle F—Improvements to the 
Asset-backed 
Securitization 
Process 
SEC. 1501. SHORT TITLE. 
This subtitle may be cited as the ‘‘Credit Risk Reten-
tion Act of 2009’’. 
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SEC. 1502. CREDIT RISK RETENTION. 
(a) AMENDMENT.—The Securities Act of 1933 (15 
U.S.C. 77a et seq.) is amended by inserting after section 
28 the following new section: 
‘‘SEC. 29. CREDIT RISK RETENTION. 
‘‘(a) IN GENERAL.— 
‘‘(1) INTEREST
IN
LOANS
MADE
BY
CREDI-
TORS.—Within 180 days of the date of the enact-
ment of this section, the appropriate agencies shall 
prescribe regulations to require any creditor that 
makes a loan to retain an economic interest in a ma-
terial portion of the credit risk of any such loan that 
the creditor transfers, sells, or conveys to a third 
party, including for the purpose of including such 
loan in a pool of loans backing an issuance of asset- 
backed securities. 
‘‘(2) INTEREST
IN
ASSETS
BACKING
ASSET- 
BACKED
SECURITIES.—The appropriate agencies 
shall prescribe regulations to require any securitizer 
of asset-backed securities that are backed by assets 
not described in paragraph (1) to retain an economic 
interest in a material portion of any such asset used 
to back an issuance of securities. 
‘‘(b) ALTERNATIVE RISK RETENTION FOR CREDIT 
SECURITIZERS.—The appropriate agencies may apply the 
risk retention requirements of this section to securitizers 
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261 
of loans or particular types of loans in addition to or in 
substitution for any or all of the requirements that apply 
to creditors that make such loans or types of loans, if the 
agencies determine that applying the requirements to such 
securitizers would— 
‘‘(1) be consistent with helping to ensure high 
quality underwriting standards for creditors, taking 
into account other applicable laws, regulations, and 
standards; and 
‘‘(2) facilitate appropriate risk management 
practices by such creditors, improve access of con-
sumers to credit on reasonable terms, or otherwise 
serve the public interest. 
‘‘(c) STANDARDS
FOR REGULATION.—Regulations 
prescribed under subsections (a) and (b) shall— 
‘‘(1) prohibit a creditor or securitizer from di-
rectly or indirectly hedging or otherwise transferring 
the credit risk such creditor or securitizer is required 
to retain under the regulations; 
‘‘(2) require a creditor or securitizer to retain 
5 percent of the credit risk on any loan that is 
transferred, sold, or conveyed by such creditor or 
securitized by such securitizer except— 
‘‘(A) an appropriate agency may specify 
that the percentage of risk may be less than 5 
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262 
percent of the credit risk, or exempt such cred-
itor or securitizer from the risk retention re-
quirement, if— 
‘‘(i) the credit underwriting by the 
creditor or the due diligence by the 
securitizer meets such standards as an ap-
propriate agency prescribes; and 
‘‘(ii) the loan that is transferred, sold, 
or conveyed by such creditor or securitized 
by such securitizer meets terms, condi-
tions, and characteristics that are deter-
mined by an appropriate agency to reflect 
loans with reduced credit risk, such as 
loans that meet certain interest rate 
thresholds, loans that are fully amortizing, 
and 
loans 
that 
are 
included 
in 
a 
securitization in which a third-party pur-
chaser specifically negotiates for the pur-
chase of the first-loss position and provides 
due diligence on all individual loans in the 
pool prior to the issuance of the asset- 
backed securities, and retains a first-loss 
position; and 
‘‘(B) an appropriate agency may specify 
that the percentage of risk may be more than 
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5 percent of the credit risk if the underwriting 
by the creditor or due diligence by the 
securitizer is insufficient; 
‘‘(3) specify that the credit risk retained must 
be no less at risk for loss than the average of the 
credit risk not so retained; and 
‘‘(4) set the minimum duration of the required 
risk retention. 
‘‘(d) EXEMPTIONS AND ADJUSTMENTS.— 
‘‘(1) IN GENERAL.—The appropriate agencies 
shall have authority to provide exemptions or adjust-
ments to the requirements of this section, including 
exemptions or adjustments relating to the percent-
age of risk retention required to be held and the 
hedging prohibition. 
‘‘(2) APPLICABLE
STANDARDS.—Any exemp-
tions or adjustments provided under paragraph (1) 
shall— 
‘‘(A) be consistent with the purpose of en-
suring high quality underwriting standards for 
creditors, taking into account other applicable 
laws, regulations, or standards; and 
‘‘(B) facilitate appropriate risk manage-
ment practices by such creditors, improve ac-
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cess for consumers to credit on reasonable 
terms, or otherwise serve the public interest. 
‘‘(e) APPROPRIATE AGENCY DEFINED.—For pur-
poses of this section, the term ‘appropriate agency’ means 
any of the following agencies with regard to the respective 
loans and asset-backed securities: 
‘‘(1) BANKING AGENCIES.—The Federal bank-
ing agencies, the National Credit Union Administra-
tion Board, and the Commission, with respect to any 
loan or asset-backed security for which there is no 
appropriate agency under paragraph (2). 
‘‘(2) OTHER AGENCIES.— 
‘‘(A) With regard to any mortgage insured 
under title II of the National Housing Act, the 
Secretary of Housing and Urban Development. 
‘‘(B) With regard to any loan meeting the 
conforming loan standards of the Federal Na-
tional Mortgage Corporation or the Federal 
Home Loan Mortgage Corporation or any 
asset-backed security issued by either such cor-
poration, the Federal Housing Finance Agency. 
‘‘(C) With regard to any loan insured by 
the Rural Housing Service, the Rural Housing 
Service. 
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‘‘(f) JOINT APPROPRIATE AGENCY REGULATIONS.— 
All regulations prescribed by the agencies identified in 
subsection (e)(1) shall be prescribed jointly by such agen-
cies. 
‘‘(g) ENFORCEMENT.— 
‘‘(1) Compliance with the requirements imposed 
under this section shall be enforced under— 
‘‘(A) section 8 of the Federal Deposit In-
surance Act (12 U.S.C. 1818), in the case of— 
‘‘(i) national banks, and Federal 
branches and Federal agencies of foreign 
banks, by the Office of the Comptroller of 
the Currency; 
‘‘(ii) member banks of the Federal 
Reserve System (other than national 
banks), branches and agencies of foreign 
banks (other than Federal branches, Fed-
eral agencies, and insured State branches 
of foreign banks), commercial lending com-
panies owned or controlled by foreign 
banks, and organizations operating under 
section 25 or 25A of the Federal Reserve 
Act, bank holding companies, and subsidi-
aries of bank holding companies (other 
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266 
than insured depository institutions), by 
the Board; and 
‘‘(iii) banks insured by the Federal 
Deposit Insurance Corporation (other than 
members of the Federal Reserve System) 
and insured State branches of foreign 
banks, by the Board of Directors of the 
Federal Deposit Insurance Corporation; 
‘‘(B) section 8 of the Federal Deposit In-
surance Act (12 U.S.C. 1818), by the Director 
of the Office of Thrift Supervision, in the case 
of a savings association the deposits of which 
are insured by the Federal Deposit Insurance 
Corporation and a savings and loan holding 
company and to any subsidiary (other than a 
bank or subsidiary of that bank); and 
‘‘(C) the Federal Credit Union Act (12 
U.S.C. 1751 et seq.), by the National Credit 
Union Administration Board with respect to 
any Federal credit union. 
‘‘(2) Except to the extent that enforcement of 
the requirements imposed under this section is spe-
cifically committed to some other Federal agency 
under paragraph (1), the Commission shall enforce 
such requirements. 
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‘‘(3) The authority of the Commission under 
this section shall be in addition to its existing au-
thority to enforce the securities laws. 
‘‘(h) EXCLUSIONS.—Notwithstanding any other pro-
vision of this section, the requirements of this section shall 
not apply to any loan— 
‘‘(1) insured, guaranteed, or administered by 
the Secretary of Education, the Secretary of Agri-
culture, the Secretary of Veterans Affairs, or the 
Small Business Administration; or 
‘‘(2) made, insured, guaranteed, or purchased 
by any person that is subject to the supervision of 
the Farm Credit Administration, including the Fed-
eral Agricultural Mortgage Corporation. 
‘‘(i) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘asset-backed security’ has the 
meaning given such term in section 229.1101(c) of 
title 17, Code of Federal Regulations, or any suc-
cessor thereto. 
‘‘(2) The term ‘Federal banking agencies’ 
means the Board of Governors of the Federal Re-
serve System, the Office of the Comptroller of the 
Currency, the Office of Thrift Supervision, and the 
Federal Deposit Insurance Corporation. 
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268 
‘‘(3) The term ‘insured depository institution’ 
has the meaning given such term in section 3(c) of 
the Federal Deposit Insurance Act (12 U.S.C. 
1813(c)). 
‘‘(4) The term ‘securitization vehicle’ means a 
trust, corporation, partnership, limited liability enti-
ty, special purpose entity, or other structure that— 
‘‘(A) is the issuer, or is created by the 
issuer, of pass-through certificates, participa-
tion certificates, asset-backed securities, or 
other similar securities backed by a pool of as-
sets that includes loans; and 
‘‘(B) holds such loans. 
‘‘(5) The term ‘securitizer’ means the person 
that transfers, conveys, or assigns, or causes the 
transfer, conveyance, or assignment of, loans, includ-
ing through a special purpose vehicle, to any 
securitization vehicle, excluding any trustee that 
holds such loans for the benefit of the securitization 
vehicle.’’. 
(b) STUDY ON RISK RETENTION.— 
(1) STUDY.—The Board, in coordination and 
consultation with the Comptroller of the Currency, 
the Office of Thrift Supervision, the Federal Deposit 
Insurance Corporation, and the Securities and Ex-
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269 
change Commission, shall conduct a study of the 
combined impact by each individual class of asset- 
backed security of— 
(A) the new credit risk retention require-
ments contained in the amendment made by 
subsection (a); and 
(B) the Financial Accounting Statements 
166 and 167 issued by the Financial Account-
ing Standards Board. 
(2) REPORT.—Not later than 90 days after the 
date of enactment of this title, the Board shall sub-
mit to Congress a report on the study conducted 
under paragraph (1). Such report shall include stat-
utory and regulatory recommendations for elimi-
nating any negative impacts on the continued viabil-
ity of the asset-backed securitization markets and on 
the availability of credit for new lending identified 
by the study conducted under paragraph (1). 
SEC. 1503. PERIODIC AND OTHER REPORTING UNDER THE 
SECURITIES EXCHANGE ACT OF 1934 FOR 
ASSET-BACKED SECURITIES. 
Section 15(d) of Securities Exchange Act of 1934 (15 
U.S.C. 78o(d)) is amended— 
(1) by inserting ‘‘, other than securities of any 
class of asset-backed security (as defined in section 
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270 
229.1101(c) of title 17, Code of Federal Regula-
tions, or any successor thereto),’’ after ‘‘securities of 
each class’’; 
(2) by inserting at the end the following: ‘‘The 
Commission may by rules and regulations provide 
for the suspension or termination of the duty to file 
under this subsection for any class of issuer of asset- 
backed security upon such terms and conditions and 
for such period or periods as it deems necessary or 
appropriate in the public interest or for the protec-
tion of investors. The Commission may, for the pur-
poses of this subsection, classify issuers and pre-
scribe requirements appropriate for each class of 
issuer of asset-backed security.’’; and 
(3) by inserting after the fifth sentence the fol-
lowing: ‘‘The Commission shall adopt regulations 
under this subsection requiring each issuer of an 
asset-backed security to disclose, for each tranche or 
class of security, information regarding the assets 
backing that security. In adopting regulations under 
this subsection, the Commission shall set standards 
for the format of the data provided by issuers of an 
asset-backed security, which shall, to the extent fea-
sible, facilitate comparison of such data across secu-
rities in similar types of asset classes. The Commis-
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sion shall require issuers of asset-backed securities 
at a minimum to disclose asset-level or loan-level 
data necessary for investors to independently per-
form due diligence. Asset-level or loan-level data 
shall include data with unique identifiers relating to 
loan brokers or originators, the nature and extent of 
the compensation of the broker or originator of the 
assets backing the security, and the amount of risk 
retention of the originator or the securitizer of such 
assets.’’. 
SEC. 1504. REPRESENTATIONS AND WARRANTIES IN ASSET- 
BACKED OFFERINGS. 
The Commission shall prescribe regulations on the 
use of representations and warranties in the asset-backed 
securities market that— 
(1) require credit rating agencies to include in 
reports accompanying credit ratings a description of 
the representations, warranties, and enforcement 
mechanisms available to investors and how they dif-
fer from representations, warranties, and enforce-
ment mechanisms in similar issuances; and 
(2) require disclosure on fulfilled repurchase re-
quests across all trusts aggregated by originator, so 
that investors may identify asset originators with 
clear underwriting deficiencies. 
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272 
SEC. 1505. EXEMPTED TRANSACTIONS UNDER THE SECURI-
TIES ACT OF 1933. 
(a) IN GENERAL.—Section 4 of the Securities Act of 
1933 (15 U.S.C. 77d) is amended— 
(1) by striking paragraph (5); and 
(2) by redesignating paragraph (6) as para-
graph (5). 
(b) 
CONFORMING
AMENDMENT.—Section 
3(a)(4)(B)(vii)(I) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)(4)(B)(vii)(I)) is amended by striking 
‘‘4(6)’’ and inserting ‘‘4(5)’’. 
SEC. 1506. STUDY ON THE MACROECONOMIC EFFECTS OF 
RISK RETENTION REQUIREMENTS. 
(a) STUDY REQUIRED.—The Chairman of the Finan-
cial Services Oversight Council shall carry out a study on 
the macroeconomic effects of the risk retention require-
ments under this subtitle, and the amendments made by 
this subtitle, with emphasis placed on potential beneficial 
effects with respect to stabilizing the real estate market. 
Such study shall include— 
(1) an analysis of the effects of risk retention 
on real estate asset price bubbles, including a retro-
spective estimate of what fraction of real estate 
losses may have been averted had such requirements 
been in force in recent years; 
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(2) an analysis of the feasibility of minimizing 
real estate price bubbles by proactively adjusting the 
percentage of risk retention that must be borne by 
creditors and securitizers of real estate debt, as a 
function of regional or national market conditions; 
(3) a comparable analysis for proactively ad-
justing mortgage origination requirements; 
(4) an assessment of whether such proactive ad-
justments should be made by an independent regu-
lator, or in a formulaic and transparent manner; 
(5) an assessment of whether such adjustments 
should take place independently or in concert with 
monetary policy; and 
(6) recommendations for implementation and 
enabling legislation. 
(b) REPORT.—Not later than the end of the 180-day 
period beginning on the date of the enactment of this title, 
the Chairman of the Financial Services Oversight Council 
shall issue a report to the Congress containing any find-
ings and determinations made in carrying out the study 
required under subsection (a). 
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274 
Subtitle G—Enhanced Dissolution 
Authority 
SEC. 1601. SHORT TITLE. 
This subtitle may be cited as the ‘‘Dissolution Au-
thority for Large, Interconnected Financial Companies 
Act of 2009’’. 
SEC. 1602. DEFINITIONS. 
For purposes of this subtitle, the following definitions 
shall apply: 
(1) APPROPRIATE REGULATORY AGENCY.— 
(A) CORPORATION AND COMMISSION.—The 
term ‘‘appropriate regulatory agency’’ means— 
(i) the Corporation; 
(ii) the Commission, if the financial 
company, or an affiliate thereof, is a 
broker or dealer registered with the Com-
mission under section 15(b) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 
78o(b) (other than an insured depository 
institution)); and 
(iii) if the financial company or an af-
filiate of the financial company is an insur-
ance company (other than an insured de-
pository institution), the applicable State 
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insurance authority of the State in which 
the insurance company is domiciled. 
(B) RULES
OF
CONSTRUCTION.—More 
than 1 agency may be an appropriate regu-
latory agency with respect to any given finan-
cial company. In such instances, the Commis-
sion shall be the appropriate regulatory agency 
for purposes of section 1603 if the largest sub-
sidiary of the financial company is a broker or 
dealer as measured by total assets as of the end 
of the previous calendar quarter, the applicable 
State insurance authority of the State in which 
the insurance company is domiciled shall be the 
appropriate regulatory agency for purposes of 
section 1603 if the largest subsidiary of the fi-
nancial company is an insurance company as 
measured by total assets as of the end of the 
previous calendar quarter, and otherwise the 
Corporation shall be the appropriate regulatory 
agency for purposes of section 1603. 
(2) BRIDGE FINANCIAL COMPANY.—The term 
‘‘bridge financial company’’ means a new financial 
company organized in accordance with section 
1609(h) by the Corporation. 
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276 
(3) COMMISSION.—The term ‘‘Commission’’ 
means the Securities and Exchange Commission. 
(4) CORPORATION.—The term ‘‘Corporation’’ 
means the Federal Deposit Insurance Corporation. 
(5) COVERED FINANCIAL COMPANY.—The term 
‘‘covered financial company’’ means a financial com-
pany for which a determination has been made pur-
suant to and in accordance with section 1603(b). 
(6) COVERED SUBSIDIARY.—The term ‘‘covered 
subsidiary’’ means a subsidiary covered in paragraph 
(9)(B)(v). 
(7) CUSTOMER
PROPERTY.—The term ‘‘cus-
tomer property’’ has the meaning ascribed to it in 
the Securities Investor Protection Act of 1970. 
(8) FEDERAL
RESERVE
BOARD.—The term 
‘‘Federal Reserve Board’’ means the Board of Gov-
ernors of the Federal Reserve System. 
(9) FINANCIAL COMPANY.—The term ‘‘financial 
company’’ means any company that— 
(A) is incorporated or organized under 
Federal law or the laws of any State; 
(B) is— 
(i) any bank holding company as de-
fined in section 2(a) of the Bank Holding 
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Company 
Act 
of 
1956 
(12 
U.S.C. 
1841(a)); 
(ii) any company that has been sub-
jected to stricter prudential regulation 
under section 1103; 
(iii) any insurance company; 
(iv) any company predominantly en-
gaged in activities that are financial in na-
ture or incidental thereto for purposes of 
section 4(k) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1843(k)) or that 
have been identified for stricter prudential 
standards under section 1103 of this title; 
or 
(v) any subsidiary of companies de-
scribed in clauses (i) through (iv) (other 
than an insured depository institution or 
any broker or dealer registered with the 
Commission under section 15(b) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78o(b)) that is a member of the Securities 
Investor Protection Corporation). 
(10) FUND.—The term ‘‘Fund’’ means the Sys-
temic Dissolution Fund established in accordance 
with section 1609(n). 
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(ii) EXTENSION OF TIME.—The period 
described in clause (i) may be extended by 
a written agreement between the claimant 
and the Corporation. 
(iii) MAILING
OF
NOTICE
SUFFI-
CIENT.—The requirements of clause (i) 
shall be deemed to be satisfied if the notice 
of any determination with respect to any 
claim is mailed to the last address of the 
claimant which appears— 
(I) on the covered financial com-
pany’s books; 
(II) in the claim filed by the 
claimant; or 
(III) in documents submitted in 
proof of the claim. 
(iv) CONTENTS
OF
NOTICE
OF
DIS-
ALLOWANCE.—If any claim filed under 
clause (i) is disallowed, the notice to the 
claimant shall contain— 
(I) a statement of each reason 
for the disallowance; and 
(II) the procedures available for 
obtaining agency review of the deter-
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303 
mination to disallow the claim or judi-
cial determination of the claim. 
(B) ALLOWANCE OF PROVEN CLAIM.—The 
Corporation shall allow any claim received on or 
before the date specified in the notice published 
under paragraph (2)(B)(i) by the Corporation 
from any claimant which is proved to the satis-
faction of the Corporation. 
(C) DISALLOWANCE
OF
CLAIMS
FILED 
AFTER END OF FILING PERIOD.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), claims filed after the date 
specified in the notice published under 
paragraph (2)(B)(i) shall be disallowed 
and such disallowance shall be final. 
(ii) CERTAIN
EXCEPTIONS.—Clause 
(i) shall not apply with respect to any 
claim filed by any claimant after the date 
specified in the notice published under 
paragraph (2)(B)(i) and such claim may 
be considered by the receiver if— 
(I) the claimant did not receive 
notice of the appointment of the re-
ceiver in time to file such claim before 
such date; and 
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