IB Union Calendar No. 680 115th CONGRESS 2d Session H. R. 4659 [Report No. 115–882] IN THE HOUSE OF REPRESENTATIVES December 14, 2017 Mr. Luetkemeyer (for himself, Mr. Lucas , Mr. Vela , Mr. O'Halleran , and Mr. David Scott of Georgia ) introduced the following bill; which was referred to the Committee on Financial Services August 3, 2018 Additional sponsors: Mr. Sessions , Mr. Hultgren , Mr. Emmer , Mr. Rodney Davis of Illinois , Mr. Conaway , Mr. Peterson , Mr. Arrington , Mr. Gonzalez of Texas , Mr. Kustoff of Tennessee , Mr. Austin Scott of Georgia , Mr. Hill , Mr. Messer , and Mr. Gottheimer August 3, 2018 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed A BILL To require the appropriate Federal banking agencies to recognize the exposure-reducing nature of client margin for cleared derivatives.

1. Treatment of client margin (a) Treatment of client margin for insured depository institutions Section 18(n) of the Federal Deposit Insurance Act ( 12 U.S.C. 1828(n) ) is amended— (1) by striking No appropriate and inserting the following: (1) Unidentified intangible assets No appropriate ; and (2) by adding at the end the following: (2) Treatment of client margin For purposes of any leverage-based capital rule, guideline, standard, or requirement promulgated, prescribed, or imposed by any appropriate Federal banking agency on insured depository institutions, the amount of any initial margin provided by a client of an insured depository institution with respect to a centrally-cleared derivative obligation shall be deducted from the amount of any leverage exposure arising from the insured depository institution’s guarantee of the client’s derivative obligation to the central counterparty. . (b) Treatment of client margin for bank holding companies Section 5(c)(3) of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1844(c)(3) ) is amended— (1) by adding at the end the following: (D) Treatment of client margin For purposes of any leverage-based capital rule, guideline, standard, or requirement promulgated, prescribed, or imposed by the Board on bank holding companies, the amount of any initial margin provided by a client of a bank holding company or affiliate thereof with respect to a centrally-cleared derivative obligation shall be deducted from the amount of any leverage exposure arising from the guarantee by the bank holding company or affiliate thereof of the client’s derivative obligation to the central counterparty. . (c) Treatment of client margin for savings and loan holding companies Section 10(g)(1) of the Home Owners’ Loan Act ( 12 U.S.C. 1467a(g)(1) ) is amended— (1) by striking The Board and inserting the following: (A) Regulations and orders The Board ; and (2) by adding at the end the following: (B) Treatment of client margin For purposes of any leverage-based capital rule, guideline, standard, or requirement promulgated, prescribed, or imposed by the Board on savings and loan holding companies, the amount of any initial margin provided by a client of a savings and loan holding company or affiliate thereof with respect to a centrally-cleared derivative obligation shall be deducted from the amount of any leverage exposure arising from the guarantee by the savings and loan holding company or affiliate thereof of the client’s derivative obligation to the central counterparty. . (d) Amendments to leverage-Based capital regulations Not later than the end of the 3-month period beginning on the date of the enactment of this Act, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Comptroller of the Currency shall amend their rules to implement the amendments made by this Act.

August 3, 2018 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed