Title: Too Big To Fail, Too Big To Exist Act
Policy area: Finance and Financial Sector

Summary:
Too Big To Fail, Too Big To Exist Act
This bill (1) directs the Department of the Treasury to break up any entity whose failure would have a catastrophic effect on the stability of the financial system, and (2) otherwise limits the activities of such entities.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7006 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 7006

 To address the concept of ``Too Big To Fail'' with respect to certain 
                          financial entities.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2018

 Mr. Sherman introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To address the concept of ``Too Big To Fail'' with respect to certain 
                          financial entities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Too Big To Fail, Too Big To Exist 
Act''.

SEC. 2. COMPILATION AND REPORT ON INSTITUTIONS THAT ARE TOO BIG TO 
              FAIL.

    (a) Compilation.--Notwithstanding any other provision of law, not 
later than 90 days after the date of enactment of this Act, the 
Financial Stability Oversight Council shall compile and submit to the 
Secretary of the Treasury a list of entities that it deems Too Big To 
Fail, which shall include, but is not limited to, any United States 
bank holding companies that have been identified as systemically 
important banks by the Financial Stability Board (in this Act referred 
to as the ``Too Big To Fail List'').
    (b) Submission to Congress and the President.--Upon receipt of the 
Too Big To Fail List, the Secretary of the Treasury shall submit the 
List to Congress and the President.

SEC. 3. BREAKING UP TOO BIG TO FAIL INSTITUTIONS.

    (a) In General.--Notwithstanding any other provision of law, but 
not later than 1 year after the date of enactment of this Act, the 
Secretary of the Treasury shall break up entities included on the Too 
Big To Fail List, so that their failure would no longer cause a 
catastrophic effect on the United States or global economy without a 
taxpayer bailout.
    (b) Consultation With Other Regulators.--In carrying out the 
requirement of subsection (a), the Secretary of the Treasury shall 
consult with the primary financial regulatory agency of the entity to 
be broken up.

SEC. 4. PROHIBITION AGAINST USE OF FEDERAL RESERVE FINANCING.

    Notwithstanding any other provision of law (including regulations), 
any entity included on the Too Big To Fail List may not use or 
otherwise have access to advances from any Federal Reserve credit 
facility, the Federal Reserve discount window, or any other program or 
facility made available under the Federal Reserve Act (12 U.S.C. 221 et 
seq.), including any asset purchases, temporary or bridge loans, 
Government investments in debt or equity, or capital injections from 
any Federal institution.

SEC. 5. PROHIBITION ON USE OF INSURED DEPOSITS.

    (a) In General.--Any entity included on the Too Big To Fail List 
that is an insured depository institution, or owns such an institution, 
may not use any insured deposit amounts to fund--
            (1) any activity relating to hedging that is not directly 
        related to commercial banking activity at the insured bank;
            (2) any use of derivatives for speculative purposes;
            (3) any activity related to the dealing of derivatives; or
            (4) any other form of speculative activity that regulators 
        specify.
    (b) Risk of Loss.--An entity included on the Too Big To Fail List 
may not conduct any activity listed in subsection (a) in such a manner 
that--
            (1) puts insured deposits at risk; or
            (2) creates a risk of loss to the Deposit Insurance Fund.

SEC. 6. DEFINITIONS.

    For purposes of this Act--
            (1) the term ``primary financial regulatory agency'' has 
        the same meaning as in section 2(12) of the Dodd-Frank Wall 
        Street Reform and Consumer Protection Act (12 U.S.C. 5301(12)); 
        and
            (2) the term ``Too Big To Fail'' means any entity whose 
        failure, due to its size, exposure to counterparties, liquidity 
        position, interdependencies, role in critical markets, or other 
        characteristics or factors, would have a catastrophic effect on 
        the stability of either the financial system or the United 
        States economy without substantial Government assistance.
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