I 114th CONGRESS 1st Session H. R. 4248 IN THE HOUSE OF REPRESENTATIVES December 15, 2015 Mr. Westmoreland (for himself and Mr. David Scott of Georgia ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Financial Stability Act to revise the reevaluation procedures with respect to determinations by the Financial Stability Oversight Council that a nonbank financial company shall be supervised by the Board of Governors and shall be subject to prudential standards.

1. Short title This Act may be cited as the FSOC Designation Review Act . 2. Reevaluation and reaffirmation Section 113(d) of the Financial Stability Act of 2010 ( 12 U.S.C. 5323(d) ) is amended to read as follows: (d) Reevaluation and reaffirmation (1) In general The Council shall reevaluate each determination made under subsections (a) and (b) with respect to a nonbank financial company supervised by the Board of Governors on— (A) an annual basis; and (B) upon the request of such company based upon the company’s representation that there has been a material change in the company’s operations or activities or a material change in regulatory or market conditions. (2) Reevaluation As part of the reevaluation required by paragraph (1), the Council shall— (A) provide the nonbank financial company with a confidential written analysis of the specific elements of the company’s exposures or activities that would be relevant to the Council’s reevaluation of the determination for such company; (B) provide the nonbank financial company with an opportunity to submit written materials to the Council regarding the reevaluation, including, as the company’s option, a plan to obtain rescission of the determination or other materials relevant to the assessment described under paragraph (3)(A); (C) if the nonbank financial company submits a plan under subparagraph (B), consider whether the plan, if implemented, would result in the nonbank financial company no longer meeting the criteria for a final determination under subsection (a) or (b); (D) make a preliminary written decision regarding rescinding such determination; (E) if the preliminary decision is not to rescind the determination, provide the nonbank financial company with— (i) a copy of the preliminary decision, which shall include a confidential written analysis explaining with specificity whether and to what extent any plan submitted by the company under subparagraph (B) addresses the potential threat posed by the nonbank financial company to the financial stability of the United States; (ii) an opportunity to meet with representatives of the Council to discuss the preliminary decision and analysis provided under clause (i); and (iii) an opportunity to revise and re-submit such plan or any other written materials, after discussions with representatives of the Council; and (F) upon the request of the nonbank financial company, grant such company an oral hearing before the Council. (3) Vulnerability to financial distress (A) In general The written analysis required under paragraph (2)(A) shall include an assessment describing with particularity the vulnerability of the nonbank financial company to financial distress, including consideration of the company’s leverage, liquidity risk and maturity mismatch, and existing regulatory scrutiny of the company. (B) Effective of failure to include assessment If the Council provides a written analysis under paragraph (2)(A) that does not contain the assessment required under subparagraph (A), any determination made under subsection (a) or (b) with respect to such company shall be rescinded immediately. (C) Definitions For purposes of this paragraph the terms vulnerability to financial distress , leverage , liquidity risk and maturity mismatch , and existing regulatory scrutiny of the nonbank financial company shall have the same meaning as those terms are given, respectively, under appendix A to part 1310 of title 12, Code of Federal Regulations. (4) Reaffirmation (A) In general Following a reevaluation under paragraph (1), the Council shall vote whether to reaffirm the determination that the nonbank financial company shall be supervised by the Board of Governors and shall be subject to prudential standards, pursuant to subsection (a) or (b), as applicable. (B) Vote requirement Any reaffirmation under subparagraph (A) shall require a vote of no fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, finding that the company still meets the standards for designation under subsection (a) or (b), as applicable. Any such finding shall include a detailed explanation of the basis for the Council’s determination, including a confidential written analysis explaining with specificity whether and to what extent any plan submitted by the nonbank financial company pursuant to paragraph (2)(B) addresses the potential threat posed by the company to the financial stability of the United States. (C) Effect of failure to reaffirm If the Council votes under subparagraph (A) with respect to a nonbank financial company and does not reaffirm the designation, the determination made with respect to such company shall be rescinded immediately. (5) Views of primary financial regulatory agency In conducting a reevaluation under paragraph (1), the Council shall consult with the primary financial regulatory agency for the nonbank financial company, if any, and the primary financial regulatory agencies of the company’s principal subsidiaries, if any, and the views of such agencies shall be given special consideration. . 3. Judicial review Section 113(h) of the Financial Stability Act of 2010 ( 12 U.S.C. 5323(h) ) is amended by striking subsection (d)(2) and inserting subsection (d)(4) .