Title: To amend the Bank Holding Company Act of 1956 to place certain limitations on commodity ownership and to repeal the merchant banking authority, and for other purposes.
Policy area: Finance and Financial Sector

Summary:
This bill limits the types of investment activities banks are allowed to engage in, including certain merchant banking activities and commodities ownership.
Additionally, the bill finalizes the Federal Reserve Board's proposed rule published September 30, 2016, regarding physical commodity trading activities conducted by financial holding companies.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7046 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7046

    To amend the Bank Holding Company Act of 1956 to place certain 
 limitations on commodity ownership and to repeal the merchant banking 
                   authority, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 28, 2020

    Mr. Casten of Illinois introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the Bank Holding Company Act of 1956 to place certain 
 limitations on commodity ownership and to repeal the merchant banking 
                   authority, and for other purposes.

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

SECTION 1. LIMITATIONS ON COMMODITY OWNERSHIP AND REPEAL OF THE 
              MERCHANT BANKING AUTHORITY.

    (a) In General.--Section 4 of the Bank Holding Company Act of 1956 
(12 U.S.C. 1843) is amended--
            (1) in subsection (k)--
                    (A) in paragraph (1), by striking ``(by regulation 
                or order)'' and inserting ``, by regulation'';
                    (B) in paragraph (2)--
                            (i) in the heading, by striking ``secretary 
                        of the treasury'' and inserting ``Secretary of 
                        the treasury and the federal deposit insurance 
                        corporation''; and
                            (ii) by adding at the end the following:
                    ``(C) Joint determination with the federal deposit 
                insurance corporation.--For purposes of paragraph (1), 
                the Board may only make a determination that an 
                activity is complementary to a financial activity and 
                does not pose a substantial risk to the safety or 
                soundness of depository institutions or the financial 
                system generally, if such determination is made 
                jointly, by rule, with the Federal Deposit Insurance 
                Corporation.'';
                    (C) in paragraph (4)--
                            (i) by striking subparagraph (H); and
                            (ii) by redesignating subparagraph (I) as 
                        subparagraph (H); and
                    (D) by striking paragraph (7);
            (2) in subsection (l)--
                    (A) in paragraph (1), by striking ``subsection (k), 
                (n), or (o)'' each place such term appears and 
                inserting ``subsection (k) or (n)''; and
                    (B) in paragraph (2)(B), by striking ``subparagraph 
                (H) or (I)'' and inserting ``subparagraph (H)'';
            (3) in subsection (m)(1)(A), by striking ``subsection (k), 
        (n), or (o)'' and inserting ``subsection (k) or (n)'';
            (4) in subsection (n)(5), by striking ``subparagraph (H) or 
        (I)'' each place such term appears and inserting ``subparagraph 
        (H)''; and
            (5) by striking subsection (o).
    (b) Conforming Amendment.--Section 3(a)(4)(B)(vi) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vi)) is amended by 
striking ``other than'' and all that follows through the end and 
inserting ``other than a registered broker or dealer.''.
    (c) Rulemaking.--The Board of Governors of the Federal Reserve 
System shall--
            (1) issue rules to carry out the amendments made by this 
        section; and
            (2) provide for an appropriate transition period before 
        persons are required to comply with the amendments made by this 
        section, including allowing for the divestment of shares, 
        assets, and ownership interests affected by such amendments.

SEC. 2. FINALIZATION OF PROPOSED FINANCIAL HOLDING COMPANY RULE.

    (a) In General.--The proposed financial holding company rule of the 
Board of Governors of the Federal Reserve System shall have the force 
and effect of law.
    (b) Definition.--In this section, the term ``proposed financial 
holding company rule'' means the proposed rule of the Board of 
Governors of the Federal Reserve System titled ``Regulations Q and Y; 
Risk-Based Capital and Other Regulatory Requirements for Activities of 
Financial Holding Companies Related to Physical Commodities and Risk-
Based Capital Requirements for Merchant Banking Investments'' (81 Fed. 
Reg. 67220; published September 30, 2016).
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