139 
HR 10 PCS 
‘‘(iii) COORDINATION
WITH
OTHER 
LAW.—For purposes of section 552 of title 
5, United States Code, this subparagraph 
shall be considered to be a statute de-
scribed in subsection (b)(3)(B) of such sec-
tion. 
‘‘(iv) DESIGNATION OF CONFIDENTIAL 
INFORMATION.—In prescribing regulations 
to carry out the requirements of this sub-
section, the Board shall designate informa-
tion described in or obtained pursuant to 
this paragraph as confidential information. 
‘‘(F) COSTS.—The cost of any examination 
conducted by the Board under this section may 
be assessed against, and made payable by, the 
wholesale financial holding company. 
‘‘(4) CAPITAL ADEQUACY GUIDELINES.— 
‘‘(A) CAPITAL
ADEQUACY
PROVISIONS.— 
Subject to the requirements of, and solely in ac-
cordance with, the terms of this paragraph, the 
Board may adopt capital adequacy rules or 
guidelines for wholesale financial holding com-
panies. 
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HR 10 PCS 
‘‘(B) METHOD OF CALCULATION.—In de-
veloping rules or guidelines under this para-
graph, the following provisions shall apply: 
‘‘(i) FOCUS ON DOUBLE LEVERAGE.— 
The Board shall focus on the use by whole-
sale financial holding companies of debt 
and other liabilities to fund capital invest-
ments in subsidiaries. 
‘‘(ii) 
NO
UNWEIGHTED
CAPITAL 
RATIO.—The Board shall not, by regula-
tion, guideline, order, or otherwise, impose 
under this section a capital ratio that is 
not based on appropriate risk-weighting 
considerations. 
‘‘(iii) NO CAPITAL REQUIREMENT ON 
REGULATED ENTITIES.—The Board shall 
not, by regulation, guideline, order or oth-
erwise, prescribe or impose any capital or 
capital adequacy rules, standards, guide-
lines, or requirements upon any subsidiary 
that— 
‘‘(I) is not a depository institu-
tion; and 
‘‘(II) is in compliance with appli-
cable capital requirements of another 
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HR 10 PCS 
Federal regulatory authority (includ-
ing the Securities and Exchange Com-
mission) or State insurance authority. 
‘‘(iv) LIMITATION.—The Board shall 
not, by regulation, guideline, order or oth-
erwise, prescribe or impose any capital or 
capital adequacy rules, standards, guide-
lines, or requirements upon any subsidiary 
that is not a depository institution and 
that is registered as an investment adviser 
under the Investment Advisers Act of 
1940, except that this clause shall not be 
construed as preventing the Board from 
imposing capital or capital adequacy rules, 
guidelines, standards, or requirements with 
respect to activities of a registered invest-
ment adviser other than investment advi-
sory activities or activities incidental to in-
vestment advisory activities. 
‘‘(v) LIMITATIONS ON INDIRECT AC-
TION.—In developing, establishing, or as-
sessing holding company capital or capital 
adequacy rules, guidelines, standards, or 
requirements for purposes of this para-
graph, the Board shall not take into ac-
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HR 10 PCS 
count the activities, operations, or invest-
ments of an affiliated investment company 
registered under the Investment Company 
Act of 1940, unless the investment com-
pany is— 
‘‘(I) a bank holding company; or 
‘‘(II) controlled by a bank hold-
ing company by reason of ownership 
by the bank holding company (includ-
ing through all of its affiliates) of 25 
percent or more of the shares of the 
investment company, and the shares 
owned by the bank holding company 
have a market value equal to more 
than $1,000,000. 
‘‘(vi) APPROPRIATE
EXCLUSIONS.— 
The Board shall take full account of— 
‘‘(I) the capital requirements 
made applicable to any subsidiary that 
is not a depository institution by an-
other Federal regulatory authority or 
State insurance authority; and 
‘‘(II) industry norms for capital-
ization of a company’s unregulated 
subsidiaries and activities. 
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HR 10 PCS 
‘‘(vii) INTERNAL RISK MANAGEMENT 
MODELS.—The Board may incorporate in-
ternal risk management models of whole-
sale financial holding companies into its 
capital adequacy guidelines or rules and 
may take account of the extent to which 
resources of a subsidiary depository insti-
tution may be used to service the debt or 
other liabilities of the wholesale financial 
holding company. 
‘‘(c) NONFINANCIAL
ACTIVITIES
AND
INVEST-
MENTS.— 
‘‘(1) GRANDFATHERED ACTIVITIES.— 
‘‘(A) IN GENERAL.—Notwithstanding sec-
tion 4(a), a company that becomes a wholesale 
financial holding company may continue to en-
gage, directly or indirectly, in any activity and 
may retain ownership and control of shares of 
a company engaged in any activity if— 
‘‘(i) on the date of the enactment of 
the Financial Services Act of 1999, such 
wholesale financial holding company was 
lawfully engaged in that nonfinancial activ-
ity, held the shares of such company, or 
had entered into a contract to acquire 
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HR 10 PCS 
shares of any company engaged in such ac-
tivity; and 
‘‘(ii) the company engaged in such ac-
tivity continues to engage only in the same 
activities that such company conducted on 
the date of the enactment of the Financial 
Services Act of 1999, and other activities 
permissible under this Act. 
‘‘(B) NO EXPANSION OF GRANDFATHERED 
COMMERCIAL ACTIVITIES THROUGH MERGER OR 
CONSOLIDATION.—A wholesale financial holding 
company that engages in activities or holds 
shares pursuant to this paragraph, or a sub-
sidiary of such wholesale financial holding com-
pany, may not acquire, in any merger, consoli-
dation, or other type of business combination, 
assets of any other company which is engaged 
in any activity which the Board has not deter-
mined to be financial in nature or incidental to 
activities that are financial in nature under sec-
tion 6(c). 
‘‘(C) LIMITATION
TO
SINGLE
EXEMP-
TION.—No company that engages in any activ-
ity or controls any shares under subsection (f) 
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HR 10 PCS 
holding companies under this section may not 
exceed 5 percent of the total consolidated assets 
of the wholesale financial holding company, ex-
cept that the Board may increase such percent-
age of total consolidated assets by such 
amounts and under such circumstances as the 
Board considers appropriate, consistent with 
the purposes of this Act. 
‘‘(3) CROSS
MARKETING
RESTRICTIONS.—A 
wholesale financial holding company shall not per-
mit— 
‘‘(A) any company whose shares it owns or 
controls pursuant to paragraph (1) or (2) to 
offer or market any product or service of an af-
filiated wholesale financial institution; or 
‘‘(B) any affiliated wholesale financial in-
stitution to offer or market any product or serv-
ice of any company whose shares are owned or 
controlled by such wholesale financial holding 
company pursuant to such paragraphs. 
‘‘(d) QUALIFICATION OF FOREIGN BANK AS WHOLE-
SALE FINANCIAL HOLDING COMPANY.— 
‘‘(1) IN GENERAL.—Any foreign bank, or any 
company that owns or controls a foreign bank, that 
operates a branch, agency, or commercial lending 
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HR 10 PCS 
company in the United States, including a foreign 
bank or company that owns or controls a wholesale 
financial institution, may request a determination 
from the Board that such bank or company be treat-
ed as a wholesale financial holding company other 
than for purposes of subsection (c), subject to such 
conditions as the Board considers appropriate, giv-
ing due regard to the principle of national treatment 
and equality of competitive opportunity and the re-
quirements imposed on domestic banks and compa-
nies. 
‘‘(2) CONDITIONS
FOR
TREATMENT
AS
A 
WHOLESALE FINANCIAL HOLDING COMPANY.—A for-
eign bank and a company that owns or controls a 
foreign bank may not be treated as a wholesale fi-
nancial holding company unless the bank and com-
pany meet and continue to meet the following cri-
teria: 
‘‘(A) NO INSURED DEPOSITS.—No deposits 
held directly by a foreign bank or through an 
affiliate (other than an institution described in 
subparagraph (D) or (F) of section 2(c)(2)) are 
insured under the Federal Deposit Insurance 
Act. 
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HR 10 PCS 
‘‘(B) CAPITAL
STANDARDS.—The foreign 
bank meets risk-based capital standards com-
parable to the capital standards required for a 
wholesale financial institution, giving due re-
gard to the principle of national treatment and 
equality of competitive opportunity. 
‘‘(C) TRANSACTION
WITH
AFFILIATES.— 
Transactions between a branch, agency, or com-
mercial lending company subsidiary of the for-
eign bank in the United States, and any securi-
ties affiliate or company in which the foreign 
bank (or any company that owns or controls 
such foreign bank) has invested, directly or in-
directly, and which engages in any activity pur-
suant to subsection (c) or (g) of section 6, com-
ply with the provisions of sections 23A and 23B 
of the Federal Reserve Act in the same manner 
and to the same extent as such transactions 
would be required to comply with such sections 
if the bank were a member bank. 
‘‘(3) TREATMENT AS A WHOLESALE FINANCIAL 
INSTITUTION.—Any foreign bank which is, or is af-
filiated with a company which is, treated as a whole-
sale financial holding company under this subsection 
shall be treated as a wholesale financial institution 
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HR 10 PCS 
for purposes of subsections (c)(1)(C) and (c)(3) of 
section 9B of the Federal Reserve Act, and any such 
foreign bank or company shall be subject to para-
graphs (3), (4), and (5) of section 9B(d) of the Fed-
eral Reserve Act, except that the Board may adopt 
such modifications, conditions, or exemptions as the 
Board deems appropriate, giving due regard to the 
principle of national treatment and equality of com-
petitive opportunity. 
‘‘(4) SUPERVISION OF FOREIGN BANK WHICH 
MAINTAINS
NO
BANKING
PRESENCE
OTHER
THAN 
CONTROL
OF
A
WHOLESALE
FINANCIAL
INSTITU-
TION.—A foreign bank that owns or controls a 
wholesale financial institution but does not operate 
a branch, agency, or commercial lending company in 
the United States (and any company that owns or 
controls such foreign bank) may request a deter-
mination from the Board that such bank or com-
pany be treated as a wholesale financial holding 
company, except that such bank or company shall be 
subject to the restrictions of paragraphs (2)(A) and 
(3) of this subsection. 
‘‘(5) NO EFFECT ON OTHER PROVISIONS.—This 
section shall not be construed as limiting the author-
ity of the Board under the International Banking 
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HR 10 PCS 
Act of 1978 with respect to the regulation, super-
vision, or examination of foreign banks and their of-
fices and affiliates in the United States. 
‘‘(6) APPLICABILITY OF COMMUNITY REINVEST-
MENT ACT OF 1977.—The branches in the United 
States of a foreign bank that is, or is affiliated with 
a company that is, treated as a wholesale financial 
holding company shall be subject to section 
9B(b)(11) of the Federal Reserve Act as if the for-
eign bank were a wholesale financial institution 
under such section. The Board and the Comptroller 
of the Currency shall apply the provisions of sections 
803(2), 804, and 807(1) of the Community Rein-
vestment Act of 1977 to branches of foreign banks 
which receive only such deposits as are permissible 
for receipt by a corporation organized under section 
25A of the Federal Reserve Act, in the same manner 
and to the same extent such sections apply to such 
a corporation.’’. 
SEC. 132. AUTHORIZATION TO RELEASE REPORTS. 
(a) FEDERAL RESERVE ACT.—The last sentence of 
the eighth undesignated paragraph of section 9 of the 
Federal Reserve Act (12 U.S.C. 326) is amended to read 
as follows: ‘‘The Board of Governors of the Federal Re-
serve System, at its discretion, may furnish reports of ex-
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HR 10 PCS 
amination or other confidential supervisory information 
concerning State member banks or any other entities ex-
amined under any other authority of the Board to any 
Federal or State authorities with supervisory or regulatory 
authority over the examined entity, to officers, directors, 
or receivers of the examined entity, and to any other per-
son that the Board determines to be proper.’’. 
(b) COMMODITY FUTURES TRADING COMMISSION.— 
The Right to Financial Privacy Act of 1978 (12 U.S.C. 
3401 et seq.) is amended— 
(1) in section 1101(7) of the (12 U.S.C. 
3401(7))— 
(A) by redesignating subparagraphs (G) 
and (H) as subparagraphs (H) and (I), respec-
tively; and 
(B) by inserting after subparagraph (F) 
the following new subparagraph: 
‘‘(G) the Commodity Futures Trading 
Commission; or’’; and 
(2) in section 1112(e), by striking ‘‘and the Se-
curities and Exchange Commission’’ and inserting ‘‘, 
the Securities and Exchange Commission, and the 
Commodity Futures Trading Commission’’. 
SEC. 133. CONFORMING AMENDMENTS. 
(a) BANK HOLDING COMPANY ACT OF 1956.— 
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HR 10 PCS 
(1) DEFINITIONS.—Section 2 of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1841) is 
amended by inserting after subsection (p) (as added 
by section 103(b)(1)) the following new subsections: 
‘‘(q) WHOLESALE FINANCIAL INSTITUTION.—The 
term ‘wholesale financial institution’ means a wholesale fi-
nancial institution subject to section 9B of the Federal 
Reserve Act. 
‘‘(r) COMMISSION.—The term ‘Commission’ means 
the Securities and Exchange Commission. 
‘‘(s) DEPOSITORY INSTITUTION.—The term ‘deposi-
tory institution’— 
‘‘(1) has the meaning given to such term in sec-
tion 3 of the Federal Deposit Insurance Act; and 
‘‘(2) includes a wholesale financial institution.’’. 
(2) DEFINITION OF BANK INCLUDES WHOLE-
SALE FINANCIAL INSTITUTION.—Section 2(c)(1) of 
the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(c)(1)) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) A wholesale financial institution.’’. 
(3) 
INCORPORATED
DEFINITIONS.—Section 
2(n) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(n)) is amended by inserting ‘‘ ‘insured 
bank’,’’ after ‘‘ ‘in danger of default’,’’. 
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HR 10 PCS 
(4) EXCEPTION
TO
DEPOSIT
INSURANCE
RE-
QUIREMENT.—Section 3(e) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1842(e)) is 
amended by adding at the end the following: ‘‘This 
subsection shall not apply to a wholesale financial 
institution.’’. 
(b) FEDERAL DEPOSIT INSURANCE ACT.—Section 
3(q)(2)(A) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(q)(2)(A)) is amended to read as follows: 
‘‘(A) any State member insured bank (ex-
cept a District bank) and any wholesale finan-
cial institution subject to section 9B of the Fed-
eral Reserve Act;’’. 
CHAPTER 2—WHOLESALE FINANCIAL 
INSTITUTIONS 
SEC. 136. WHOLESALE FINANCIAL INSTITUTIONS. 
(a) NATIONAL WHOLESALE FINANCIAL INSTITU-
TIONS.— 
(1) IN GENERAL.—Chapter 1 of title LXII of 
the Revised Statutes of the United States (12 
U.S.C. 21 et seq.) is amended by inserting after sec-
tion 5136A (as added by section 121(a) of this title) 
the following new section: 
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HR 10 PCS 
‘‘SEC. 5136B. NATIONAL WHOLESALE FINANCIAL INSTITU-
TIONS. 
‘‘(a) AUTHORIZATION OF THE COMPTROLLER RE-
QUIRED.—A national bank may apply to the Comptroller 
on such forms and in accordance with such regulations 
as the Comptroller may prescribe, for permission to oper-
ate as a national wholesale financial institution. 
‘‘(b) REGULATION.—A national wholesale financial 
institution may exercise, in accordance with such institu-
tion’s articles of incorporation and regulations issued by 
the Comptroller, all the powers and privileges of a national 
bank formed in accordance with section 5133 of the Re-
vised Statutes of the United States, subject to section 9B 
of the Federal Reserve Act and the limitations and restric-
tions contained therein. 
‘‘(c) COMMUNITY REINVESTMENT ACT OF 1977.—A 
national wholesale financial institution shall be subject to 
the Community Reinvestment Act of 1977. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for chapter 1 of title LXII of the Revised Stat-
utes of the United States is amended by inserting 
after the item relating to section 5136A (as added 
by section 121(d) of this title) the following new 
item: 
‘‘5136B. National wholesale financial institutions.’’. 
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HR 10 PCS 
(b) WHOLESALE FINANCIAL INSTITUTIONS.—The 
Federal Reserve Act (12 U.S.C. 221 et seq.) is amended 
by inserting after section 9A the following new section: 
‘‘SEC. 9B. WHOLESALE FINANCIAL INSTITUTIONS. 
‘‘(a) APPLICATION FOR MEMBERSHIP AS WHOLE-
SALE FINANCIAL INSTITUTION.— 
‘‘(1) APPLICATION REQUIRED.— 
‘‘(A) IN GENERAL.—Any bank may apply 
to the Board of Governors of the Federal Re-
serve System to become a State wholesale fi-
nancial institution, or to the Comptroller of the 
Currency to become a national wholesale finan-
cial institution, and, as a wholesale financial in-
stitution, to subscribe to the stock of the Fed-
eral Reserve bank organized within the district 
where the applying bank is located. 
‘‘(B) TREATMENT
AS
MEMBER
BANK.— 
Any application under subparagraph (A) shall 
be treated as an application under, and shall be 
subject to the provisions of, section 9. 
‘‘(2) INSURANCE TERMINATION.—No bank the 
deposits of which are insured under the Federal De-
posit Insurance Act may become a wholesale finan-
cial institution unless it has met all requirements 
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HR 10 PCS 
under that Act for voluntary termination of deposit 
insurance. 
‘‘(b) GENERAL
REQUIREMENTS
APPLICABLE
TO 
WHOLESALE FINANCIAL INSTITUTIONS.— 
‘‘(1) FEDERAL RESERVE ACT.—Except as oth-
erwise provided in this section, wholesale financial 
institutions shall be member banks and shall be sub-
ject to the provisions of this Act that apply to mem-
ber banks to the same extent and in the same man-
ner as State member insured banks or national 
banks, except that a wholesale financial institution 
may terminate membership under this Act only with 
the prior written approval of the Board and on 
terms and conditions that the Board determines are 
appropriate to carry out the purposes of this Act. 
‘‘(2) PROMPT CORRECTIVE ACTION.—A whole-
sale financial institution shall be deemed to be an in-
sured depository institution for purposes of section 
38 of the Federal Deposit Insurance Act except 
that— 
‘‘(A) the relevant capital levels and capital 
measures for each capital category shall be the 
levels specified by the Board for wholesale fi-
nancial institutions; 
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HR 10 PCS 
‘‘(4) CERTAIN
OTHER
STATUTES
APPLICA-
BLE.—A wholesale financial institution shall be 
deemed to be a banking institution, and the Board 
shall be the appropriate Federal banking agency for 
such bank and all such bank’s affiliates, for pur-
poses of the International Lending Supervision Act. 
‘‘(5) BANK MERGER ACT.—A wholesale finan-
cial institution shall be subject to sections 18(c) and 
44 of the Federal Deposit Insurance Act in the same 
manner and to the same extent the wholesale finan-
cial institution would be subject to such sections if 
the institution were a State member insured bank or 
a national bank. 
‘‘(6) BRANCHING.—Notwithstanding any other 
provision of law, a wholesale financial institution 
may establish and operate a branch at any location 
on such terms and conditions as established by, and 
with the approval of— 
‘‘(A) the Board, in the case of a State- 
chartered wholesale financial institution; and 
‘‘(B) the Comptroller of the Currency, in 
the case of a national bank wholesale financial 
institution. 
‘‘(7) ACTIVITIES OF OUT-OF-STATE BRANCHES 
OF
WHOLESALE
FINANCIAL
INSTITUTIONS.—A 
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State-chartered wholesale financial institution shall 
be deemed to be a State bank and an insured State 
bank for purposes of paragraphs (1), (2), and (3) of 
section 24(j) of the Federal Deposit Insurance Act. 
‘‘(8) DISCRIMINATION
REGARDING
INTEREST 
RATES.—Section 27 of the Federal Deposit Insur-
ance Act shall apply to State-chartered wholesale fi-
nancial institutions in the same manner and to the 
same extent as such provisions apply to State mem-
ber insured banks and any reference in such section 
to a State-chartered insured depository institution 
shall be deemed to include a reference to a State- 
chartered wholesale financial institution. 
‘‘(9) PREEMPTION OF STATE LAWS REQUIRING 
DEPOSIT
INSURANCE
FOR
WHOLESALE
FINANCIAL 
INSTITUTIONS.—The appropriate State banking au-
thority may grant a charter to a wholesale financial 
institution notwithstanding any State constitution or 
statute requiring that the institution obtain insur-
ance of its deposits and any such State constitution 
or statute is hereby preempted solely for purposes of 
this paragraph. 
‘‘(10) PARITY FOR WHOLESALE FINANCIAL IN-
STITUTIONS.—A State bank that is a wholesale fi-
nancial institution under this section shall have all 
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of the rights, powers, privileges, and immunities (in-
cluding those derived from status as a federally 
chartered institution) of and as if it were a national 
bank, subject to such terms and conditions as estab-
lished by the Board. 
‘‘(11) COMMUNITY
REINVESTMENT
ACT
OF 
1977.—A State wholesale financial institution shall 
be subject to the Community Reinvestment Act of 
1977. 
‘‘(c) SPECIFIC
REQUIREMENTS
APPLICABLE
TO 
WHOLESALE FINANCIAL INSTITUTIONS.— 
‘‘(1) LIMITATIONS ON DEPOSITS.— 
‘‘(A) MINIMUM AMOUNT.— 
‘‘(i) IN GENERAL.—No wholesale fi-
nancial institution may receive initial de-
posits of $100,000 or less, other than on 
an incidental and occasional basis. 
‘‘(ii) LIMITATION
ON
DEPOSITS
OF 
LESS THAN $100,000.—No wholesale finan-
cial institution may receive initial deposits 
of $100,000 or less if such deposits con-
stitute more than 5 percent of the institu-
tion’s total deposits. 
‘‘(B) NO DEPOSIT INSURANCE.—Except as 
otherwise provided in section 8A(f) of the Fed-
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eral Deposit Insurance Act, no deposits held by 
a wholesale financial institution shall be insured 
deposits under the Federal Deposit Insurance 
Act. 
‘‘(C) ADVERTISING
AND
DISCLOSURE.— 
The Board and the Comptroller of the Currency 
shall prescribe jointly regulations pertaining to 
advertising and disclosure by wholesale financial 
institutions to ensure that each depositor is no-
tified that deposits at the wholesale financial in-
stitution are not federally insured or otherwise 
guaranteed by the United States Government. 
‘‘(2) MINIMUM
CAPITAL
LEVELS
APPLICABLE 
TO
WHOLESALE
FINANCIAL
INSTITUTIONS.—The 
Board shall, by regulation, adopt capital require-
ments for wholesale financial institutions— 
‘‘(A) to account for the status of wholesale 
financial institutions as institutions that accept 
deposits that are not insured under the Federal 
Deposit Insurance Act; and 
‘‘(B) to provide for the safe and sound op-
eration of the wholesale financial institution 
without undue risk to creditors or other per-
sons, including Federal Reserve banks, engaged 
in transactions with the bank. 
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‘‘(3) ADDITIONAL REQUIREMENTS APPLICABLE 
TO WHOLESALE FINANCIAL INSTITUTIONS.—In addi-
tion to any requirement otherwise applicable to State 
member insured banks or applicable, under this sec-
tion, to wholesale financial institutions, the Board 
may impose, by regulation or order, upon wholesale 
financial institutions— 
‘‘(A) limitations on transactions, direct or 
indirect, with affiliates to prevent— 
‘‘(i) the transfer of risk to the deposit 
insurance funds; or 
‘‘(ii) an affiliate from gaining access 
to, or the benefits of, credit from a Federal 
Reserve bank, including overdrafts at a 
Federal Reserve bank; 
‘‘(B) special clearing balance requirements; 
and 
‘‘(C) any additional requirements that the 
Board determines to be appropriate or nec-
essary to— 
‘‘(i) promote the safety and soundness 
of the wholesale financial institution or any 
insured depository institution affiliate of 
the wholesale financial institution; 
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HR 10 PCS 
‘‘(ii) prevent the transfer of risk to 
the deposit insurance funds; or 
‘‘(iii) protect creditors and other per-
sons, including Federal Reserve banks, en-
gaged in transactions with the wholesale fi-
nancial institution. 
‘‘(4) EXEMPTIONS FOR WHOLESALE FINANCIAL 
INSTITUTIONS.—The Board may, by regulation or 
order, exempt any wholesale financial institution 
from any provision applicable to a member bank 
that is not a wholesale financial institution, if the 
Board finds that such exemption is consistent 
with— 
‘‘(A) the promotion of the safety and 
soundness of the wholesale financial institution 
or any insured depository institution affiliate of 
the wholesale financial institution; 
‘‘(B) the protection of the deposit insur-
ance funds; and 
‘‘(C) the protection of creditors and other 
persons, including Federal Reserve banks, en-
gaged in transactions with the wholesale finan-
cial institution. 
‘‘(5) LIMITATION ON TRANSACTIONS BETWEEN 
A WHOLESALE FINANCIAL INSTITUTION AND AN IN-
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HR 10 PCS 
SURED BANK.—For purposes of section 23A(d)(1) of 
the Federal Reserve Act, a wholesale financial insti-
tution that is affiliated with an insured bank shall 
not be a bank. 
‘‘(6) NO EFFECT ON OTHER PROVISIONS.—This 
section shall not be construed as limiting the 
Board’s authority over member banks or the author-
ity of the Comptroller of the Currency over national 
banks under any other provision of law, or to create 
any obligation for any Federal Reserve bank to 
make, increase, renew, or extend any advance or dis-
count under this Act to any member bank or other 
depository institution. 
‘‘(d) CAPITAL AND MANAGERIAL REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A wholesale financial insti-
tution shall be well capitalized and well managed. 
‘‘(2) NOTICE TO COMPANY.—The Board shall 
promptly provide notice to a company that controls 
a wholesale financial institution whenever such 
wholesale financial institution is not well capitalized 
or well managed. 
‘‘(3) AGREEMENT TO RESTORE INSTITUTION.— 
Not later than 45 days after the date of receipt of 
a notice under paragraph (2) (or such additional pe-
riod not to exceed 90 days as the Board may per-
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HR 10 PCS 
mit), the company shall execute an agreement ac-
ceptable to the Board to restore the wholesale finan-
cial institution to compliance with all of the require-
ments of paragraph (1). 
‘‘(4) LIMITATIONS
UNTIL
INSTITUTION
RE-
STORED.—Until the wholesale financial institution is 
restored to compliance with all of the requirements 
of paragraph (1), the Board may impose such limi-
tations on the conduct or activities of the company 
or any affiliate of the company as the Board deter-
mines to be appropriate under the circumstances. 
‘‘(5) FAILURE TO RESTORE.—If the company 
does not execute and implement an agreement in ac-
cordance with paragraph (3), comply with any limi-
tation imposed under paragraph (4), restore the 
wholesale financial institution to well capitalized sta-
tus not later than 180 days after the date of receipt 
by the company of the notice described in paragraph 
(2), or restore the wholesale financial institution to 
well managed status within such period as the Board 
may permit, the company shall, under such terms 
and conditions as may be imposed by the Board sub-
ject to such extension of time as may be granted in 
the discretion of the Board, divest control of its sub-
sidiary depository institutions. 
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HR 10 PCS 
‘‘(6) WELL MANAGED DEFINED.—For purposes 
of this subsection, the term ‘well managed’ has the 
same meaning as in section 2 of the Bank Holding 
Company Act of 1956. 
‘‘(e) RESOLUTION OF WHOLESALE FINANCIAL INSTI-
TUTIONS.— 
‘‘(1) CONSERVATORSHIP OR RECEIVERSHIP.— 
‘‘(A) APPOINTMENT.—The Board may ap-
point a conservator or receiver to take posses-
sion and control of a wholesale financial institu-
tion to the same extent and in the same manner 
as the Comptroller of the Currency may appoint 
a conservator or receiver for a national bank. 
‘‘(B) POWERS.—The conservator or re-
ceiver for a wholesale financial institution shall 
exercise the same powers, functions, and duties, 
subject to the same limitations, as a conser-
vator or receiver for a national bank. 
‘‘(2) BOARD
AUTHORITY.—The Board shall 
have the same authority with respect to any conser-
vator or receiver appointed under paragraph (1), 
and the wholesale financial institution for which it 
has been appointed, as the Comptroller of the Cur-
rency has with respect to a conservator or receiver 
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HR 10 PCS 
for a national bank and the national bank for which 
the conservator or receiver has been appointed. 
‘‘(3) BANKRUPTCY PROCEEDINGS.—The Comp-
troller of the Currency (in the case of a national 
wholesale financial institution) or the Board may di-
rect the conservator or receiver of a wholesale finan-
cial institution to file a petition pursuant to title 11, 
United States Code, in which case, title 11, United 
States Code, shall apply to the wholesale financial 
institution in lieu of otherwise applicable Federal or 
State insolvency law. 
‘‘(f) BOARD BACKUP AUTHORITY.— 
‘‘(1) NOTICE TO THE COMPTROLLER.—Before 
taking any action under section 8 of the Federal De-
posit Insurance Act involving a wholesale financial 
institution that is chartered as a national bank, the 
Board shall notify the Comptroller and recommend 
that the Comptroller take appropriate action. If the 
Comptroller fails to take the recommended action or 
to provide an acceptable plan for addressing the con-
cerns of the Board before the close of the 30-day pe-
riod beginning on the date of receipt of the formal 
recommendation from the Board, the Board may 
take such action. 
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HR 10 PCS 
‘‘(2) 
EXIGENT
CIRCUMSTANCES.—Notwith-
standing paragraph (1), the Board may exercise its 
authority without regard to the time period set forth 
in paragraph (1) where the Board finds that exigent 
circumstances exist and the Board notifies the 
Comptroller of the Board’s action and of the exigent 
circumstances. 
‘‘(g) EXCLUSIVE
JURISDICTION.—Subsections (c) 
and (e) of section 43 of the Federal Deposit Insurance 
Act shall not apply to any wholesale financial institution.’’. 
(c) VOLUNTARY TERMINATION OF INSURED STATUS 
BY CERTAIN INSTITUTIONS.— 
(1) SECTION 8 DESIGNATIONS.—Section 8(a) of 
the Federal Deposit Insurance Act (12 U.S.C. 
1818(a)) is amended— 
(A) by striking paragraph (1); and 
(B) 
by 
redesignating 
paragraphs 
(2) 
through (10) as paragraphs (1) through (9), re-
spectively. 
(2) VOLUNTARY
TERMINATION
OF
INSURED 
STATUS.—The Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.) is amended by inserting after 
section 8 the following new section: 
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HR 10 PCS 
‘‘SEC. 8A. VOLUNTARY TERMINATION OF STATUS AS IN-
SURED DEPOSITORY INSTITUTION. 
‘‘(a) IN GENERAL.—Except as provided in subsection 
(b), an insured State bank or a national bank may volun-
tarily terminate such bank’s status as an insured deposi-
tory institution in accordance with regulations of the Cor-
poration if— 
‘‘(1) the bank provides written notice of the 
bank’s intent to terminate such insured status— 
‘‘(A) to the Corporation and the Board of 
Governors of the Federal Reserve System, in 
the case of an insured State bank, or to the 
Corporation and the Comptroller of the Cur-
rency, in the case of an insured national bank 
authorized to operate as a wholesale financial 
institution, not less than 6 months before the 
effective date of such termination; and 
‘‘(B) to all depositors at such bank, not 
less than 6 months before the effective date of 
the termination of such status; and 
‘‘(2) either— 
‘‘(A) the deposit insurance fund of which 
such bank is a member equals or exceeds the 
fund’s designated reserve ratio as of the date 
the bank provides a written notice under para-
graph (1) and the Corporation determines that 
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HR 10 PCS 
the fund will equal or exceed the applicable des-
ignated reserve ratio for the 2 semiannual as-
sessment periods immediately following such 
date; or 
‘‘(B) the Corporation and the Board of 
Governors of the Federal Reserve System, in 
the case of an insured State bank, or the Cor-
poration and the Comptroller of the Currency, 
in the case of an insured national bank author-
ized to operate as a wholesale financial institu-
tion, has approved the termination of the 
bank’s insured status and the bank pays an exit 
fee in accordance with subsection (e). 
‘‘(b) EXCEPTION.—Subsection (a) shall not apply 
with respect to— 
‘‘(1) an insured savings association; or 
‘‘(2) an insured branch that is required to be 
insured under subsection (a) or (b) of section 6 of 
the International Banking Act of 1978. 
‘‘(c) ELIGIBILITY FOR INSURANCE TERMINATED.— 
Any bank that voluntarily elects to terminate the bank’s 
insured status under subsection (a) shall not be eligible 
for insurance on any deposits or any assistance authorized 
under this Act after the period specified in subsection 
(f)(1). 
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HR 10 PCS 
‘‘(d) INSTITUTION MUST BECOME WHOLESALE FI-
NANCIAL INSTITUTION OR TERMINATE DEPOSIT-TAKING 
ACTIVITIES.—Any depository institution which voluntarily 
terminates such institution’s status as an insured deposi-
tory institution under this section may not, upon termi-
nation of insurance, accept any deposits unless the institu-
tion is a wholesale financial institution subject to section 
9B of the Federal Reserve Act. 
‘‘(e) EXIT FEES.— 
‘‘(1) IN GENERAL.—Any bank that voluntarily 
terminates such bank’s status as an insured deposi-
tory institution under this section shall pay an exit 
fee in an amount that the Corporation determines is 
sufficient to account for the institution’s pro rata 
share of the amount (if any) which would be re-
quired to restore the relevant deposit insurance fund 
to the fund’s designated reserve ratio as of the date 
the bank provides a written notice under subsection 
(a)(1). 
‘‘(2) PROCEDURES.—The Corporation shall pre-
scribe, by regulation, procedures for assessing any 
exit fee under this subsection. 
‘‘(f) TEMPORARY INSURANCE OF DEPOSITS INSURED 
AS OF TERMINATION.— 
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HR 10 PCS 
‘‘(1) TRANSITION PERIOD.—The insured depos-
its of each depositor in a State bank or a national 
bank on the effective date of the voluntary termi-
nation of the bank’s insured status, less all subse-
quent withdrawals from any deposits of such deposi-
tor, shall continue to be insured for a period of not 
less than 6 months and not more than 2 years, as 
determined by the Corporation. During such period, 
no additions to any such deposits, and no new de-
posits in the depository institution made after the ef-
fective date of such termination shall be insured by 
the Corporation. 
‘‘(2) TEMPORARY ASSESSMENTS; OBLIGATIONS 
AND DUTIES.—During the period specified in para-
graph (1) with respect to any bank, the bank shall 
continue to pay assessments under section 7 as if 
the bank were an insured depository institution. The 
bank shall, in all other respects, be subject to the 
authority of the Corporation and the duties and obli-
gations of an insured depository institution under 
this Act during such period, and in the event that 
the bank is closed due to an inability to meet the de-
mands of the bank’s depositors during such period, 
the Corporation shall have the same powers and 
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HR 10 PCS 
rights with respect to such bank as in the case of 
an insured depository institution. 
‘‘(g) ADVERTISEMENTS.— 
‘‘(1) IN
GENERAL.—A bank that voluntarily 
terminates the bank’s insured status under this sec-
tion shall not advertise or hold itself out as having 
insured deposits, except that the bank may advertise 
the temporary insurance of deposits under sub-
section (f) if, in connection with any such advertise-
ment, the advertisement also states with equal prom-
inence that additions to deposits and new deposits 
made after the effective date of the termination are 
not insured. 
‘‘(2) CERTIFICATES OF DEPOSIT, OBLIGATIONS, 
AND
SECURITIES.—Any certificate of deposit or 
other obligation or security issued by a State bank 
or a national bank after the effective date of the vol-
untary termination of the bank’s insured status 
under this section shall be accompanied by a con-
spicuous, prominently displayed notice that such cer-
tificate of deposit or other obligation or security is 
not insured under this Act. 
‘‘(h) NOTICE REQUIREMENTS.— 
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HR 10 PCS 
‘‘(1) NOTICE TO THE CORPORATION.—The no-
tice required under subsection (a)(1)(A) shall be in 
such form as the Corporation may require. 
‘‘(2) NOTICE TO DEPOSITORS.—The notice re-
quired under subsection (a)(1)(B) shall be— 
‘‘(A) sent to each depositor’s last address 
of record with the bank; and 
‘‘(B) in such manner and form as the Cor-
poration finds to be necessary and appropriate 
for the protection of depositors.’’. 
(3) DEFINITION.—Section 19(b)(1)(A)(i) of the 
Federal Reserve Act (12 U.S.C. 461(b)(1)(A)(i)) is 
amended by inserting ‘‘, or any wholesale financial 
institution subject to section 9B of this Act’’ after 
‘‘such Act’’. 
(d) TECHNICAL AND CONFORMING AMENDMENTS TO 
THE BANKRUPTCY CODE.— 
(1) BANKRUPTCY
CODE
DEBTORS.—Section 
109(b)(2) of title 11, United States Code, is amend-
ed by striking ‘‘; or’’ and inserting the following: ‘‘, 
except that— 
‘‘(A) a wholesale financial institution es-
tablished under section 5136B of the Revised 
Statutes of the United States or section 9B of 
the Federal Reserve Act may be a debtor if a 
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HR 10 PCS 
petition is filed at the direction of the Comp-
troller of the Currency (in the case of a whole-
sale financial institution established under sec-
tion 5136B of the Revised Statutes of the 
United States) or the Board of Governors of 
the Federal Reserve System (in the case of any 
wholesale financial institution); and 
‘‘(B) a corporation organized under section 
25A of the Federal Reserve Act may be a debt-
or if a petition is filed at the direction of the 
Board of Governors of the Federal Reserve Sys-
tem; or’’. 
(2) CHAPTER 7 DEBTORS.—Section 109(d) of 
title 11, United States Code, is amended to read as 
follows: 
‘‘(d) Only a railroad and a person that may be a debt-
or under chapter 7 of this title, except that a stockbroker, 
a wholesale financial institution established under section 
5136B of the Revised Statutes of the United States or 
section 9B of the Federal Reserve Act, a corporation orga-
nized under section 25A of the Federal Reserve Act, or 
a commodity broker, may be a debtor under chapter 11 
of this title.’’. 
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HR 10 PCS 
(3) DEFINITION OF FINANCIAL INSTITUTION.— 
Section 101(22) of title 11, United States Code, is 
amended to read as follows: 
‘‘(22) ‘financial institution’ means a person that 
is a commercial or savings bank, industrial savings 
bank, savings and loan association, trust company, 
wholesale financial institution established under sec-
tion 5136B of the Revised Statutes of the United 
States or section 9B of the Federal Reserve Act, or 
corporation organized under section 25A of the Fed-
eral Reserve Act and, when any such person is act-
ing as agent or custodian for a customer in connec-
tion with a securities contract, as defined in section 
741 of this title, such customer,’’. 
(4) SUBCHAPTER V OF CHAPTER 7.— 
(A) IN GENERAL.—Section 103 of title 11, 
United States Code, is amended— 
(i) by redesignating subsections (e) 
through (i) as subsections (f) through (j), 
respectively; and 
(ii) by inserting after subsection (d) 
the following: 
‘‘(e) Subchapter V of chapter 7 of this title applies 
only in a case under such chapter concerning the liquida-
tion of a wholesale financial institution established under 
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HR 10 PCS 
section 5136B of the Revised Statutes of the United 
States or section 9B of the Federal Reserve Act, or a cor-
poration organized under section 25A of the Federal Re-
serve Act.’’. 
(B) WHOLESALE
BANK
LIQUIDATION.— 
Chapter 7 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘SUBCHAPTER V—WHOLESALE BANK 
LIQUIDATION 
‘‘§ 781. Definitions for subchapter 
‘‘In this subchapter— 
‘‘(1) the term ‘Board’ means the Board of Gov-
ernors of the Federal Reserve System; 
‘‘(2) the term ‘depository institution’ has the 
same meaning as in section 3 of the Federal Deposit 
Insurance Act, and includes any wholesale bank; 
‘‘(3) the term ‘national wholesale financial insti-
tution’ means a wholesale financial institution estab-
lished under section 5136B of the Revised Statutes 
of the United States; and 
‘‘(4) the term ‘wholesale bank’ means a na-
tional wholesale financial institution, a wholesale fi-
nancial institution established under section 9B of 
the Federal Reserve Act, or a corporation organized 
under section 25A of the Federal Reserve Act. 
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HR 10 PCS 
‘‘§ 782. Selection of trustee 
‘‘(a) Notwithstanding any other provision of this title, 
the conservator or receiver who files the petition shall be 
the trustee under this chapter, unless the Comptroller of 
the Currency (in the case of a national wholesale financial 
institution for which it appointed the conservator or re-
ceiver) or the Board (in the case of any wholesale bank 
for which it appointed the conservator or receiver) des-
ignates an alternative trustee. The Comptroller of the Cur-
rency or the Board (as applicable) may designate a suc-
cessor trustee, if required. 
‘‘(b) Whenever the Comptroller of the Currency or 
the Board appoints or designates a trustee, chapter 3 and 
sections 704 and 705 of this title shall apply to the Comp-
troller or the Board, as applicable, in the same way and 
to the same extent that they apply to a United States 
trustee. 
‘‘§ 783. Additional powers of trustee 
‘‘(a) The trustee under this subchapter has power to 
distribute property not of the estate, including distribu-
tions to customers that are mandated by subchapters III 
and Iv of this chapter. 
‘‘(b) The trustee under this subchapter may, after no-
tice and a hearing— 
‘‘(1) sell the wholesale bank to a depository in-
stitution or consortium of depository institutions 
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HR 10 PCS 
(which consortium may agree on the allocation of 
the wholesale bank among the consortium); 
‘‘(2) merge the wholesale bank with a deposi-
tory institution; 
‘‘(3) transfer contracts to the same extent as 
could a receiver for a depository institution under 
paragraphs (9) and (10) of section 11(e) of the Fed-
eral Deposit Insurance Act; 
‘‘(4) transfer assets or liabilities to a depository 
institution; 
‘‘(5) transfer assets and liabilities to a bridge 
bank as provided in paragraphs (1), (3)(A), (5), (6), 
and (9) through (13), and subparagraphs (A) 
through (H) and (K) of paragraph (4) of section 
11(n) of the Federal Deposit Insurance Act, except 
that— 
‘‘(A) the bridge bank shall be treated as a 
wholesale bank for the purpose of this sub-
section; and 
‘‘(B) any references in any such provision 
of law to the Federal Deposit Insurance Cor-
poration shall be construed to be references to 
the appointing agency and that references to 
deposit insurance shall be omitted. 
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‘‘(c) Any reference in this section to transfers of li-
abilities includes a ratable transfer of liabilities within a 
priority class. 
‘‘§ 784. Right to be heard 
‘‘The Comptroller of the Currency (in the case of a 
national wholesale financial institution), the Board (in the 
case of any wholesale bank), or a Federal Reserve bank 
(in the case of a wholesale bank that is a member of that 
bank) may raise and may appear and be heard on any 
issue in a case under this subchapter. 
(C) 
CONFORMING
AMENDMENT.—The 
table of sections for chapter 7 of title 11, 
United States Code, is amended by adding at 
the end the following: 
‘‘SUBCHAPTER V—WHOLESALE BANK LIQUIDATION 
‘‘781. Definitions for subchapter. 
‘‘782. Selection of trustee. 
‘‘783. Additional powers of trustee. 
‘‘784. Right to be heard.’’. 
(e) RESOLUTION
OF EDGE CORPORATIONS.—The 
sixteenth undesignated paragraph of section 25A of the 
Federal Reserve Act (12 U.S.C. 624) is amended to read 
as follows: 
‘‘(16) APPOINTMENT OF RECEIVER OR CONSER-
VATOR.— 
‘‘(A) IN GENERAL.—The Board may ap-
point a conservator or receiver for a corporation 
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organized under the provisions of this section to 
the same extent and in the same manner as the 
Comptroller of the Currency may appoint a con-
servator or receiver for a national bank, and the 
conservator or receiver for such corporation 
shall exercise the same powers, functions, and 
duties, subject to the same limitations, as a 
conservator or receiver for a national bank. 
‘‘(B) 
EQUIVALENT
AUTHORITY.—The 
Board shall have the same authority with re-
spect to any conservator or receiver appointed 
for a corporation organized under the provisions 
of this section under this paragraph and any 
such corporation as the Comptroller of the Cur-
rency has with respect to a conservator or re-
ceiver of a national bank and the national bank 
for which a conservator or receiver has been ap-
pointed. 
‘‘(C) TITLE
PETITIONS.—The Board 
may direct the conservator or receiver of a cor-
poration organized under the provisions of this 
section to file a petition pursuant to title 11, 
United States Code, in which case, title 11, 
United States Code, shall apply to the corpora-
VerDate Mar 15 2010 
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