[111th Congress Public Law 203]
[From the U.S. Government Printing Office]



[[Page 1375]]

        DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

[[Page 124 STAT. 1376]]

Public Law 111-203
111th Congress

                                 An Act


 
  To promote the financial stability of the United States by improving 
 accountability and transparency in the financial system, to end ``too 
 big to fail'', to protect the American taxpayer by ending bailouts, to 
  protect consumers from abusive financial services practices, and for 
         other purposes. <<NOTE: July 21, 2010 -  [H.R. 4173]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Dodd-Frank Wall 
Street Reform and Consumer Protection Act.>> 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short <<NOTE: 12 USC 5301 note.>> Title.--This Act may be cited 
as the ``Dodd-Frank Wall Street Reform and Consumer Protection Act''.

    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Severability.
Sec. 4. Effective date.
Sec. 5. Budgetary effects.
Sec. 6. Antitrust savings clause.

                      TITLE I--FINANCIAL STABILITY

Sec. 101. Short title.
Sec. 102. Definitions.

            Subtitle A--Financial Stability Oversight Council

Sec. 111. Financial Stability Oversight Council established.
Sec. 112. Council authority.
Sec. 113. Authority to require supervision and regulation of certain 
           nonbank financial companies.
Sec. 114. Registration of nonbank financial companies supervised by the 
           Board of Governors.
Sec. 115. Enhanced supervision and prudential standards for nonbank 
           financial companies supervised by the Board of Governors and 
           certain bank holding companies.
Sec. 116. Reports.
Sec. 117. Treatment of certain companies that cease to be bank holding 
           companies.
Sec. 118. Council funding.
Sec. 119. Resolution of supervisory jurisdictional disputes among member 
           agencies.
Sec. 120. Additional standards applicable to activities or practices for 
           financial stability purposes.
Sec. 121. Mitigation of risks to financial stability.
Sec. 122. GAO Audit of Council.
Sec. 123. Study of the effects of size and complexity of financial 
           institutions on capital market efficiency and economic 
           growth.

                Subtitle B--Office of Financial Research

Sec. 151. Definitions.
Sec. 152. Office of Financial Research established.
Sec. 153. Purpose and duties of the Office.
Sec. 154. Organizational structure; responsibilities of primary 
           programmatic units.
Sec. 155. Funding.
Sec. 156. Transition oversight.

[[Page 124 STAT. 1377]]

Subtitle C--Additional Board of Governors Authority for Certain Nonbank 
             Financial Companies and Bank Holding Companies

Sec. 161. Reports by and examinations of nonbank financial companies by 
           the Board of Governors.
Sec. 162. Enforcement.
Sec. 163. Acquisitions.
Sec. 164. Prohibition against management interlocks between certain 
           financial companies.
Sec. 165. Enhanced supervision and prudential standards for nonbank 
           financial companies supervised by the Board of Governors and 
           certain bank holding companies.
Sec. 166. Early remediation requirements.
Sec. 167. Affiliations.
Sec. 168. Regulations.
Sec. 169. Avoiding duplication.
Sec. 170. Safe harbor.
Sec. 171. Leverage and risk-based capital requirements.
Sec. 172. Examination and enforcement actions for insurance and orderly 
           liquidation purposes.
Sec. 173. Access to United States financial market by foreign 
           institutions.
Sec. 174. Studies and reports on holding company capital requirements.
Sec. 175. International policy coordination.
Sec. 176. Rule of construction.

                 TITLE II--ORDERLY LIQUIDATION AUTHORITY

Sec. 201. Definitions.
Sec. 202. Judicial review.
Sec. 203. Systemic risk determination.
Sec. 204. Orderly liquidation of covered financial companies.
Sec. 205. Orderly liquidation of covered brokers and dealers.
Sec. 206. Mandatory terms and conditions for all orderly liquidation 
           actions.
Sec. 207. Directors not liable for acquiescing in appointment of 
           receiver.
Sec. 208. Dismissal and exclusion of other actions.
Sec. 209. Rulemaking; non-conflicting law.
Sec. 210. Powers and duties of the Corporation.
Sec. 211. Miscellaneous provisions.
Sec. 212. Prohibition of circumvention and prevention of conflicts of 
           interest.
Sec. 213. Ban on certain activities by senior executives and directors.
Sec. 214. Prohibition on taxpayer funding.
Sec. 215. Study on secured creditor haircuts.
Sec. 216. Study on bankruptcy process for financial and nonbank 
           financial institutions
Sec. 217. Study on international coordination relating to bankruptcy 
           process for nonbank financial institutions

 TITLE III--TRANSFER OF POWERS TO THE COMPTROLLER OF THE CURRENCY, THE 
                 CORPORATION, AND THE BOARD OF GOVERNORS

Sec. 300. Short title.
Sec. 301. Purposes.
Sec. 302. Definition.

                Subtitle A--Transfer of Powers and Duties

Sec. 311. Transfer date.
Sec. 312. Powers and duties transferred.
Sec. 313. Abolishment.
Sec. 314. Amendments to the Revised Statutes.
Sec. 315. Federal information policy.
Sec. 316. Savings provisions.
Sec. 317. References in Federal law to Federal banking agencies.
Sec. 318. Funding.
Sec. 319. Contracting and leasing authority.

                   Subtitle B--Transitional Provisions

Sec. 321. Interim use of funds, personnel, and property of the Office of 
           Thrift Supervision.
Sec. 322. Transfer of employees.
Sec. 323. Property transferred.
Sec. 324. Funds transferred.
Sec. 325. Disposition of affairs.
Sec. 326. Continuation of services.

[[Page 124 STAT. 1378]]

Sec. 327. Implementation plan and reports.

            Subtitle C--Federal Deposit Insurance Corporation

Sec. 331. Deposit insurance reforms.
Sec. 332. Elimination of procyclical assessments.
Sec. 333. Enhanced access to information for deposit insurance purposes.
Sec. 334. Transition reserve ratio requirements to reflect new 
           assessment base.
Sec. 335. Permanent increase in deposit and share insurance.
Sec. 336. Management of the Federal Deposit Insurance Corporation.

                        Subtitle D--Other Matters

Sec. 341. Branching.
Sec. 342. Office of Minority and Women Inclusion.
Sec. 343. Insurance of transaction accounts.

             Subtitle E--Technical and Conforming Amendments

Sec. 351. Effective date.
Sec. 352. Balanced Budget and Emergency Deficit Control Act of 1985.
Sec. 353. Bank Enterprise Act of 1991.
Sec. 354. Bank Holding Company Act of 1956.
Sec. 355. Bank Holding Company Act Amendments of 1970.
Sec. 356. Bank Protection Act of 1968.
Sec. 357. Bank Service Company Act.
Sec. 358. Community Reinvestment Act of 1977.
Sec. 359. Crime Control Act of 1990.
Sec. 360. Depository Institution Management Interlocks Act.
Sec. 361. Emergency Homeowners' Relief Act.
Sec. 362. Federal Credit Union Act.
Sec. 363. Federal Deposit Insurance Act.
Sec. 364. Federal Home Loan Bank Act.
Sec. 365. Federal Housing Enterprises Financial Safety and Soundness Act 
           of 1992.
Sec. 366. Federal Reserve Act.
Sec. 367. Financial Institutions Reform, Recovery, and Enforcement Act 
           of 1989.
Sec. 368. Flood Disaster Protection Act of 1973.
Sec. 369. Home Owners' Loan Act.
Sec. 370. Housing Act of 1948.
Sec. 371. Housing and Community Development Act of 1992.
Sec. 372. Housing and Urban-Rural Recovery Act of 1983.
Sec. 373. National Housing Act.
Sec. 374. Neighborhood Reinvestment Corporation Act.
Sec. 375. Public Law 93-100.
Sec. 376. Securities Exchange Act of 1934.
Sec. 377. Title 18, United States Code.
Sec. 378. Title 31, United States Code.

       TITLE IV--REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

Sec. 401. Short title.
Sec. 402. Definitions.
Sec. 403. Elimination of private adviser exemption; limited exemption 
           for foreign private advisers; limited intrastate exemption.
Sec. 404. Collection of systemic risk data; reports; examinations; 
           disclosures.
Sec. 405. Disclosure provision amendment.
Sec. 406. Clarification of rulemaking authority.
Sec. 407. Exemption of venture capital fund advisers.
Sec. 408. Exemption of and record keeping by private equity fund 
           advisers.
Sec. 409. Family offices.
Sec. 410. State and Federal responsibilities; asset threshold for 
           Federal registration of investment advisers.
Sec. 411. Custody of client assets.
Sec. 412. Adjusting the accredited investor standard.
Sec. 413. GAO study and report on accredited investors.
Sec. 414. GAO study on self-regulatory organization for private funds.
Sec. 415. Commission study and report on short selling.
Sec. 416. Transition period.

                           TITLE V--INSURANCE

                Subtitle A--Office of National Insurance

Sec. 501. Short title.
Sec. 502. Federal Insurance Office.

                Subtitle B--State-Based Insurance Reform

Sec. 511. Short title.

[[Page 124 STAT. 1379]]

Sec. 512. Effective date.

                      PART I--Nonadmitted Insurance

Sec. 521. Reporting, payment, and allocation of premium taxes.
Sec. 522. Regulation of nonadmitted insurance by insured's home State.
Sec. 523. Participation in national producer database.
Sec. 524. Uniform standards for surplus lines eligibility.
Sec. 525. Streamlined application for commercial purchasers.
Sec. 526. GAO study of nonadmitted insurance market.
Sec. 527. Definitions.

                          PART II--Reinsurance

Sec. 531. Regulation of credit for reinsurance and reinsurance 
           agreements.
Sec. 532. Regulation of reinsurer solvency.
Sec. 533. Definitions.

                     PART III--Rule of Construction

Sec. 541. Rule of construction.
Sec. 542. Severability.

  TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION 
              HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

Sec. 601. Short title.
Sec. 602. Definition.
Sec. 603. Moratorium and study on treatment of credit card banks, 
           industrial loan companies, and certain other companies under 
           the Bank Holding Company Act of 1956.
Sec. 604. Reports and examinations of holding companies; regulation of 
           functionally regulated subsidiaries.
Sec. 605. Assuring consistent oversight of permissible activities of 
           depository institution subsidiaries of holding companies.
Sec. 606. Requirements for financial holding companies to remain well 
           capitalized and well managed.
Sec. 607. Standards for interstate acquisitions.
Sec. 608. Enhancing existing restrictions on bank transactions with 
           affiliates.
Sec. 609. Eliminating exceptions for transactions with financial 
           subsidiaries.
Sec. 610. Lending limits applicable to credit exposure on derivative 
           transactions, repurchase agreements, reverse repurchase 
           agreements, and securities lending and borrowing 
           transactions.
Sec. 611. Consistent treatment of derivative transactions in lending 
           limits.
Sec. 612. Restriction on conversions of troubled banks.
Sec. 613. De novo branching into States.
Sec. 614. Lending limits to insiders.
Sec. 615. Limitations on purchases of assets from insiders.
Sec. 616. Regulations regarding capital levels.
Sec. 617. Elimination of elective investment bank holding company 
           framework.
Sec. 618. Securities holding companies.
Sec. 619. Prohibitions on proprietary trading and certain relationships 
           with hedge funds and private equity funds.
Sec. 620. Study of bank investment activities.
Sec. 621. Conflicts of interest.
Sec. 622. Concentration limits on large financial firms.
Sec. 623. Interstate merger transactions.
Sec. 624. Qualified thrift lenders.
Sec. 625. Treatment of dividends by certain mutual holding companies.
Sec. 626. Intermediate holding companies.
Sec. 627. Interest-bearing transaction accounts authorized.
Sec. 628. Credit card bank small business lending.

         TITLE VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY

Sec. 701. Short title.

        Subtitle A--Regulation of Over-the-Counter Swaps Markets

                      PART I--Regulatory Authority

Sec. 711. Definitions.
Sec. 712. Review of regulatory authority.
Sec. 713. Portfolio margining conforming changes.
Sec. 714. Abusive swaps.
Sec. 715. Authority to prohibit participation in swap activities.

[[Page 124 STAT. 1380]]

Sec. 716. Prohibition against Federal Government bailouts of swaps 
           entities.
Sec. 717. New product approval CFTC--SEC process.
Sec. 718. Determining status of novel derivative products.
Sec. 719. Studies.
Sec. 720. Memorandum.

                   PART II--Regulation of Swap Markets

Sec. 721. Definitions.
Sec. 722. Jurisdiction.
Sec. 723. Clearing.
Sec. 724. Swaps; segregation and bankruptcy treatment.
Sec. 725. Derivatives clearing organizations.
Sec. 726. Rulemaking on conflict of interest.
Sec. 727. Public reporting of swap transaction data.
Sec. 728. Swap data repositories.
Sec. 729. Reporting and recordkeeping.
Sec. 730. Large swap trader reporting.
Sec. 731. Registration and regulation of swap dealers and major swap 
           participants.
Sec. 732. Conflicts of interest.
Sec. 733. Swap execution facilities.
Sec. 734. Derivatives transaction execution facilities and exempt boards 
           of trade.
Sec. 735. Designated contract markets.
Sec. 736. Margin.
Sec. 737. Position limits.
Sec. 738. Foreign boards of trade.
Sec. 739. Legal certainty for swaps.
Sec. 740. Multilateral clearing organizations.
Sec. 741. Enforcement.
Sec. 742. Retail commodity transactions.
Sec. 743. Other authority.
Sec. 744. Restitution remedies.
Sec. 745. Enhanced compliance by registered entities.
Sec. 746. Insider trading.
Sec. 747. Antidisruptive practices authority.
Sec. 748. Commodity whistleblower incentives and protection.
Sec. 749. Conforming amendments.
Sec. 750. Study on oversight of carbon markets.
Sec. 751. Energy and environmental markets advisory committee.
Sec. 752. International harmonization.
Sec. 753. Anti-manipulation authority.
Sec. 754. Effective date.

          Subtitle B--Regulation of Security-Based Swap Markets

Sec. 761. Definitions under the Securities Exchange Act of 1934.
Sec. 762. Repeal of prohibition on regulation of security-based swap 
           agreements.
Sec. 763. Amendments to the Securities Exchange Act of 1934.
Sec. 764. Registration and regulation of security-based swap dealers and 
           major security-based swap participants.
Sec. 765. Rulemaking on conflict of interest.
Sec. 766. Reporting and recordkeeping.
Sec. 767. State gaming and bucket shop laws.
Sec. 768. Amendments to the Securities Act of 1933; treatment of 
           security-based swaps.
Sec. 769. Definitions under the Investment Company Act of 1940.
Sec. 770. Definitions under the Investment Advisers Act of 1940.
Sec. 771. Other authority.
Sec. 772. Jurisdiction.
Sec. 773. Civil penalties.
Sec. 774. Effective date.

        TITLE VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION

Sec. 801. Short title.
Sec. 802. Findings and purposes.
Sec. 803. Definitions.
Sec. 804. Designation of systemic importance.
Sec. 805. Standards for systemically important financial market 
           utilities and payment, clearing, or settlement activities.
Sec. 806. Operations of designated financial market utilities.
Sec. 807. Examination of and enforcement actions against designated 
           financial market utilities.
Sec. 808. Examination of and enforcement actions against financial 
           institutions subject to standards for designated activities.

[[Page 124 STAT. 1381]]

Sec. 809. Requests for information, reports, or records.
Sec. 810. Rulemaking.
Sec. 811. Other authority.
Sec. 812. Consultation.
Sec. 813. Common framework for designated clearing entity risk 
           management.
Sec. 814. Effective date.

  TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
                               SECURITIES

Sec. 901. Short title.

               Subtitle A--Increasing Investor Protection

Sec. 911. Investor Advisory Committee established.
Sec. 912. Clarification of authority of the Commission to engage in 
           investor testing.
Sec. 913. Study and rulemaking regarding obligations of brokers, 
           dealers, and investment advisers.
Sec. 914. Study on enhancing investment adviser examinations.
Sec. 915. Office of the Investor Advocate.
Sec. 916. Streamlining of filing procedures for self-regulatory 
           organizations.
Sec. 917. Study regarding financial literacy among investors.
Sec. 918. Study regarding mutual fund advertising.
Sec. 919. Clarification of Commission authority to require investor 
           disclosures before purchase of investment products and 
           services.
Sec. 919A. Study on conflicts of interest.
Sec. 919B. Study on improved investor access to information on 
           investment advisers and broker-dealers.
Sec. 919C. Study on financial planners and the use of financial 
           designations.
Sec. 919D. Ombudsman.

       Subtitle B--Increasing Regulatory Enforcement and Remedies

Sec. 921. Authority to restrict mandatory pre-dispute arbitration.
Sec. 922. Whistleblower protection.
Sec. 923. Conforming amendments for whistleblower protection.
Sec. 924. Implementation and transition provisions for whistleblower 
           protection.
Sec. 925. Collateral bars.
Sec. 926. Disqualifying felons and other ``bad actors'' from Regulation 
           D offerings.
Sec. 927. Equal treatment of self-regulatory organization rules.
Sec. 928. Clarification that section 205 of the Investment Advisers Act 
           of 1940 does not apply to State-registered advisers.
Sec. 929. Unlawful margin lending.
Sec. 929A. Protection for employees of subsidiaries and affiliates of 
           publicly traded companies.
Sec. 929B. Fair Fund amendments.
Sec. 929C. Increasing the borrowing limit on Treasury loans.
Sec. 929D. Lost and stolen securities.
Sec. 929E. Nationwide service of subpoenas.
Sec. 929F. Formerly associated persons.
Sec. 929G. Streamlined hiring authority for market specialists.
Sec. 929H. SIPC Reforms.
Sec. 929I. Protecting confidentiality of materials submitted to the 
           Commission.
Sec. 929J. Expansion of audit information to be produced and exchanged.
Sec. 929K. Sharing privileged information with other authorities.
Sec. 929L. Enhanced application of antifraud provisions.
Sec. 929M. Aiding and abetting authority under the Securities Act and 
           the Investment Company Act.
Sec. 929N. Authority to impose penalties for aiding and abetting 
           violations of the Investment Advisers Act.
Sec. 929O. Aiding and abetting standard of knowledge satisfied by 
           recklessness.
Sec. 929P. Strengthening enforcement by the Commission.
Sec. 929Q. Revision to recordkeeping rule.
Sec. 929R. Beneficial ownership and short-swing profit reporting.
Sec. 929S. Fingerprinting.
Sec. 929T. Equal treatment of self-regulatory organization rules.
Sec. 929U. Deadline for completing examinations, inspections and 
           enforcement actions.
Sec. 929V. Security Investor Protection Act amendments.
Sec. 929W. Notice to missing security holders.
Sec. 929X. Short sale reforms.
Sec. 929Y. Study on extraterritorial private rights of action.
Sec. 929Z. GAO study on securities litigation.

  Subtitle C--Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings.

[[Page 124 STAT. 1382]]

Sec. 932. Enhanced regulation, accountability, and transparency of 
           nationally recognized statistical rating organizations.
Sec. 933. State of mind in private actions.
Sec. 934. Referring tips to law enforcement or regulatory authorities.
Sec. 935. Consideration of information from sources other than the 
           issuer in rating decisions.
Sec. 936. Qualification standards for credit rating analysts.
Sec. 937. Timing of regulations.
Sec. 938. Universal ratings symbols.
Sec. 939. Removal of statutory references to credit ratings.
Sec. 939A. Review of reliance on ratings.
Sec. 939B. Elimination of exemption from fair disclosure rule.
Sec. 939C. Securities and Exchange Commission study on strengthening 
           credit rating agency independence.
Sec. 939D. Government Accountability Office study on alternative 
           business models.
Sec. 939E. Government Accountability Office study on the creation of an 
           independent professional analyst organization.
Sec. 939F. Study and rulemaking on assigned credit ratings.
Sec. 939G. Effect of Rule 436(g).
Sec. 939H. Sense of Congress.

   Subtitle D--Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of credit risk retention.
Sec. 942. Disclosures and reporting for asset-backed securities.
Sec. 943. Representations and warranties in asset-backed offerings.
Sec. 944. Exempted transactions under the Securities Act of 1933.
Sec. 945. Due diligence analysis and disclosure in asset-backed 
           securities issues.
Sec. 946. Study on the macroeconomic effects of risk retention 
           requirements.

          Subtitle E--Accountability and Executive Compensation

Sec. 951. Shareholder vote on executive compensation disclosures.
Sec. 952. Compensation committee independence.
Sec. 953. Executive compensation disclosures.
Sec. 954. Recovery of erroneously awarded compensation.
Sec. 955. Disclosure regarding employee and director hedging.
Sec. 956. Enhanced compensation structure reporting.
Sec. 957. Voting by brokers.

    Subtitle F--Improvements to the Management of the Securities and 
                           Exchange Commission

Sec. 961. Report and certification of internal supervisory controls.
Sec. 962. Triennial report on personnel management.
Sec. 963. Annual financial controls audit.
Sec. 964. Report on oversight of national securities associations.
Sec. 965. Compliance examiners.
Sec. 966. Suggestion program for employees of the Commission.
Sec. 967. Commission organizational study and reform.
Sec. 968. Study on SEC revolving door.

             Subtitle G--Strengthening Corporate Governance

Sec. 971. Proxy access.
Sec. 972. Disclosures regarding chairman and CEO structures.

                    Subtitle H--Municipal Securities

Sec. 975. Regulation of municipal securities and changes to the board of 
           the MSRB.
Sec. 976. Government Accountability Office study of increased disclosure 
           to investors.
Sec. 977. Government Accountability Office study on the municipal 
           securities markets.
Sec. 978. Funding for Governmental Accounting Standards Board.
Sec. 979. Commission Office of Municipal Securities.

    Subtitle I--Public Company Accounting Oversight Board, Portfolio 
                      Margining, and Other Matters

Sec. 981. Authority to share certain information with foreign 
           authorities.
Sec. 982. Oversight of brokers and dealers.
Sec. 983. Portfolio margining.
Sec. 984. Loan or borrowing of securities.
Sec. 985. Technical corrections to Federal securities laws.
Sec. 986. Conforming amendments relating to repeal of the Public Utility 
           Holding Company Act of 1935.

[[Page 124 STAT. 1383]]

Sec. 987. Amendment to definition of material loss and nonmaterial 
           losses to the Deposit Insurance Fund for purposes of 
           Inspector General reviews.
Sec. 988. Amendment to definition of material loss and nonmaterial 
           losses to the National Credit Union Share Insurance Fund for 
           purposes of Inspector General reviews.
Sec. 989. Government Accountability Office study on proprietary trading.
Sec. 989A. Senior investor protections.
Sec. 989B. Designated Federal entity inspectors general independence.
Sec. 989C. Strengthening Inspector General accountability.
Sec. 989D. Removal of Inspectors General of designated Federal entities.
Sec. 989E. Additional oversight of financial regulatory system.
Sec. 989F. GAO study of person to person lending.
Sec. 989G. Exemption for nonaccelerated filers.
Sec. 989H. Corrective responses by heads of certain establishments to 
           deficiencies identified by Inspectors General.
Sec. 989I. GAO study regarding exemption for smaller issuers.
Sec. 989J. Further promoting the adoption of the NAIC Model Regulations 
           that enhance protection of seniors and other consumers.

      Subtitle J--Securities and Exchange Commission Match Funding

Sec. 991. Securities and Exchange Commission match funding.

            TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

Sec. 1001. Short title.
Sec. 1002. Definitions.

           Subtitle A--Bureau of Consumer Financial Protection

Sec. 1011. Establishment of the Bureau of Consumer Financial Protection.
Sec. 1012. Executive and administrative powers.
Sec. 1013. Administration.
Sec. 1014. Consumer Advisory Board.
Sec. 1015. Coordination.
Sec. 1016. Appearances before and reports to Congress.
Sec. 1017. Funding; penalties and fines.
Sec. 1018. Effective date.

                Subtitle B--General Powers of the Bureau

Sec. 1021. Purpose, objectives, and functions.
Sec. 1022. Rulemaking authority.
Sec. 1023. Review of Bureau regulations.
Sec. 1024. Supervision of nondepository covered persons.
Sec. 1025. Supervision of very large banks, savings associations, and 
           credit unions.
Sec. 1026. Other banks, savings associations, and credit unions.
Sec. 1027. Limitations on authorities of the Bureau; preservation of 
           authorities.
Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.
Sec. 1029. Exclusion for auto dealers.
Sec. 1029A. Effective date.

                 Subtitle C--Specific Bureau Authorities

Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 1032. Disclosures.
Sec. 1033. Consumer rights to access information.
Sec. 1034. Response to consumer complaints and inquiries.
Sec. 1035. Private education loan ombudsman.
Sec. 1036. Prohibited acts.
Sec. 1037. Effective date.

                  Subtitle D--Preservation of State Law

Sec. 1041. Relation to State law.
Sec. 1042. Preservation of enforcement powers of States.
Sec. 1043. Preservation of existing contracts.
Sec. 1044. State law preemption standards for national banks and 
           subsidiaries clarified.
Sec. 1045. Clarification of law applicable to nondepository institution 
           subsidiaries.
Sec. 1046. State law preemption standards for Federal savings 
           associations and subsidiaries clarified.
Sec. 1047. Visitorial standards for national banks and savings 
           associations.
Sec. 1048. Effective date.

                     Subtitle E--Enforcement Powers

Sec. 1051. Definitions.

[[Page 124 STAT. 1384]]

Sec. 1052. Investigations and administrative discovery.
Sec. 1053. Hearings and adjudication proceedings.
Sec. 1054. Litigation authority.
Sec. 1055. Relief available.
Sec. 1056. Referrals for criminal proceedings.
Sec. 1057. Employee protection.
Sec. 1058. Effective date.

Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

Sec. 1061. Transfer of consumer financial protection functions.
Sec. 1062. Designated transfer date.
Sec. 1063. Savings provisions.
Sec. 1064. Transfer of certain personnel.
Sec. 1065. Incidental transfers.
Sec. 1066. Interim authority of the Secretary.
Sec. 1067. Transition oversight.

                   Subtitle G--Regulatory Improvements

Sec. 1071. Small business data collection.
Sec. 1072. Assistance for economically vulnerable individuals and 
           families.
Sec. 1073. Remittance transfers.
Sec. 1074. Department of the Treasury study on ending the 
           conservatorship of Fannie Mae, Freddie Mac, and reforming the 
           housing finance system.
Sec. 1075. Reasonable fees and rules for payment card transactions.
Sec. 1076. Reverse mortgage study and regulations.
Sec. 1077. Report on private education loans and private educational 
           lenders.
Sec. 1078. Study and report on credit scores.
Sec. 1079. Review, report, and program with respect to exchange 
           facilitators.
Sec. 1079A. Financial fraud provisions.

                    Subtitle H--Conforming Amendments

Sec. 1081. Amendments to the Inspector General Act.
Sec. 1082. Amendments to the Privacy Act of 1974.
Sec. 1083. Amendments to the Alternative Mortgage Transaction Parity Act 
           of 1982.
Sec. 1084. Amendments to the Electronic Fund Transfer Act.
Sec. 1085. Amendments to the Equal Credit Opportunity Act.
Sec. 1086. Amendments to the Expedited Funds Availability Act.
Sec. 1087. Amendments to the Fair Credit Billing Act.
Sec. 1088. Amendments to the Fair Credit Reporting Act and the Fair and 
           Accurate Credit Transactions Act of 2003.
Sec. 1089. Amendments to the Fair Debt Collection Practices Act.
Sec. 1090. Amendments to the Federal Deposit Insurance Act.
Sec. 1091. Amendment to Federal Financial Institutions Examination 
           Council Act of 1978.
Sec. 1092. Amendments to the Federal Trade Commission Act.
Sec. 1093. Amendments to the Gramm-Leach-Bliley Act.
Sec. 1094. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 1095. Amendments to the Homeowners Protection Act of 1998.
Sec. 1096. Amendments to the Home Ownership and Equity Protection Act of 
           1994.
Sec. 1097. Amendments to the Omnibus Appropriations Act, 2009.
Sec. 1098. Amendments to the Real Estate Settlement Procedures Act of 
           1974.
Sec. 1098A. Amendments to the Interstate Land Sales Full Disclosure Act.
Sec. 1099. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 1100. Amendments to the Secure and Fair Enforcement for Mortgage 
           Licensing Act of 2008.
Sec. 1100A. Amendments to the Truth in Lending Act.
Sec. 1100B. Amendments to the Truth in Savings Act.
Sec. 1100C. Amendments to the Telemarketing and Consumer Fraud and Abuse 
           Prevention Act.
Sec. 1100D. Amendments to the Paperwork Reduction Act.
Sec. 1100E. Adjustments for inflation in the Truth in Lending Act.
Sec. 1100F. Use of consumer reports.
Sec. 1100G. Small business fairness and regulatory transparency.
Sec. 1100H. Effective date.

               TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

Sec. 1101. Federal Reserve Act amendments on emergency lending 
           authority.
Sec. 1102. Reviews of special Federal reserve credit facilities.
Sec. 1103. Public access to information.
Sec. 1104. Liquidity event determination.

[[Page 124 STAT. 1385]]

Sec. 1105. Emergency financial stabilization.
Sec. 1106. Additional related amendments.
Sec. 1107. Federal Reserve Act amendments on Federal reserve bank 
           governance.
Sec. 1108. Federal Reserve Act amendments on supervision and regulation 
           policy.
Sec. 1109. GAO audit of the Federal Reserve facilities; publication of 
           Board actions.

    TITLE XII--IMPROVING ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS

Sec. 1201. Short title.
Sec. 1202. Purpose.
Sec. 1203. Definitions.
Sec. 1204. Expanded access to mainstream financial institutions.
Sec. 1205. Low-cost alternatives to payday loans.
Sec. 1206. Grants to establish loan-loss reserve funds.
Sec. 1207. Procedural provisions.
Sec. 1208. Authorization of appropriations.
Sec. 1209. Regulations.
Sec. 1210. Evaluation and reports to Congress.

                       TITLE XIII--PAY IT BACK ACT

Sec. 1301. Short title.
Sec. 1302. Amendment to reduce TARP authorization.
Sec. 1303. Report.
Sec. 1304. Amendments to Housing and Economic Recovery Act of 2008.
Sec. 1305. Federal Housing Finance Agency report.
Sec. 1306. Repayment of unobligated ARRA funds.

        TITLE XIV--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

Sec. 1400. Short title; designation as enumerated consumer law.

       Subtitle A--Residential Mortgage Loan Origination Standards

Sec. 1401. Definitions.
Sec. 1402. Residential mortgage loan origination.
Sec. 1403. Prohibition on steering incentives.
Sec. 1404. Liability.
Sec. 1405. Regulations.
Sec. 1406. Study of shared appreciation mortgages.

               Subtitle B--Minimum Standards For Mortgages

Sec. 1411. Ability to repay.
Sec. 1412. Safe harbor and rebuttable presumption.
Sec. 1413. Defense to foreclosure.
Sec. 1414. Additional standards and requirements.
Sec. 1415. Rule of construction.
Sec. 1416. Amendments to civil liability provisions.
Sec. 1417. Lender rights in the context of borrower deception.
Sec. 1418. Six-month notice required before reset of hybrid adjustable 
           rate mortgages.
Sec. 1419. Required disclosures.
Sec. 1420. Disclosures required in monthly statements for residential 
           mortgage loans.
Sec. 1421. Report by the GAO.
Sec. 1422. State attorney general enforcement authority.

                     Subtitle C--High-Cost Mortgages

Sec. 1431. Definitions relating to high-cost mortgages.
Sec. 1432. Amendments to existing requirements for certain mortgages.
Sec. 1433. Additional requirements for certain mortgages.

                Subtitle D--Office of Housing Counseling

Sec. 1441. Short title.
Sec. 1442. Establishment of Office of Housing Counseling.
Sec. 1443. Counseling procedures.
Sec. 1444. Grants for housing counseling assistance.
Sec. 1445. Requirements to use HUD-certified counselors under HUD 
           programs.
Sec. 1446. Study of defaults and foreclosures.
Sec. 1447. Default and foreclosure database.
Sec. 1448. Definitions for counseling-related programs.
Sec. 1449. Accountability and transparency for grant recipients.
Sec. 1450. Updating and simplification of mortgage information booklet.

[[Page 124 STAT. 1386]]

Sec. 1451. Home inspection counseling.
Sec. 1452. Warnings to homeowners of foreclosure rescue scams.

                     Subtitle E--Mortgage Servicing

Sec. 1461. Escrow and impound accounts relating to certain consumer 
           credit transactions.
Sec. 1462. Disclosure notice required for consumers who waive escrow 
           services.
Sec. 1463. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 1464. Truth in Lending Act amendments.
Sec. 1465. Escrows included in repayment analysis.

                    Subtitle F--Appraisal Activities

Sec. 1471. Property appraisal requirements.
Sec. 1472. Appraisal independence requirements.
Sec. 1473. Amendments relating to Appraisal Subcommittee of FFIEC, 
           Appraiser Independence Monitoring, Approved Appraiser 
           Education, Appraisal Management Companies, Appraiser 
           Complaint Hotline, Automated Valuation Models, and Broker 
           Price Opinions.
Sec. 1474. Equal Credit Opportunity Act amendment.
Sec. 1475. Real Estate Settlement Procedures Act of 1974 amendment 
           relating to certain appraisal fees.
Sec. 1476. GAO study on the effectiveness and impact of various 
           appraisal methods, valuation models and distributions 
           channels, and on the Home Valuation Code of conduct and the 
           Appraisal Subcommittee.

            Subtitle G--Mortgage Resolution and Modification

Sec. 1481. Multifamily mortgage resolution program.
Sec. 1482. Home Affordable Modification Program guidelines.
Sec. 1483. Public availability of information of Making Home Affordable 
           Program.
Sec. 1484. Protecting tenants at foreclosure extension and 
           clarification.

                  Subtitle H--Miscellaneous Provisions

Sec. 1491. Sense of Congress regarding the importance of government-
           sponsored enterprises reform to enhance the protection, 
           limitation, and regulation of the terms of residential 
           mortgage credit.
Sec. 1492. GAO study report on government efforts to combat mortgage 
           foreclosure rescue scams and loan modification fraud.
Sec. 1493. Reporting of mortgage data by State.
Sec. 1494. Study of effect of drywall presence on foreclosures.
Sec. 1495. Definition.
Sec. 1496. Emergency mortgage relief.
Sec. 1497. Additional assistance for Neighborhood Stabilization Program.
Sec. 1498. Legal assistance for foreclosure-related issues.

                   TITLE XV--MISCELLANEOUS PROVISIONS

Sec. 1501. Restrictions on use of United States funds for foreign 
           governments; protection of American taxpayers.
Sec. 1502. Conflict minerals.
Sec. 1503. Reporting requirements regarding coal or other mine safety.
Sec. 1504. Disclosure of payments by resource extraction issuers.
Sec. 1505. Study by the Comptroller General.
Sec. 1506. Study on core deposits and brokered deposits.

                    TITLE XVI--SECTION 1256 CONTRACTS

Sec. 1601. Certain swaps, etc., not treated as section 1256 contracts.

SEC. 2. <<NOTE: 12 USC 5301.>> DEFINITIONS.

    As used in this Act, the following definitions shall apply, except 
as the context otherwise requires or as otherwise specifically provided 
in this Act:
            (1) Affiliate.--The term ``affiliate'' has the same meaning 
        as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813).
            (2) Appropriate federal banking agency.--On and after the 
        transfer date, the term ``appropriate Federal banking agency'' 
        has the same meaning as in section 3(q) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(q)), as amended by title III.

[[Page 124 STAT. 1387]]

            (3) Board of governors.--The term ``Board of Governors'' 
        means the Board of Governors of the Federal Reserve System.
            (4) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection established under title X.
            (5) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission, except in the context of the 
        Commodity Futures Trading Commission.
            (6) Commodity futures terms.--The terms ``futures commission 
        merchant'', ``swap'', ``swap dealer'', ``swap execution 
        facility'', ``derivatives clearing organization'', ``board of 
        trade'', ``commodity trading advisor'', ``commodity pool'', and 
        ``commodity pool operator'' have the same meanings as given the 
        terms in section 1a of the Commodity Exchange Act (7 U.S.C. 1 et 
        seq.).
            (7) Corporation.--The term ``Corporation'' means the Federal 
        Deposit Insurance Corporation.
            (8) Council.--The term ``Council'' means the Financial 
        Stability Oversight Council established under title I.
            (9) Credit union.--The term ``credit union'' means a Federal 
        credit union, State credit union, or State-chartered credit 
        union, as those terms are defined in section 101 of the Federal 
        Credit Union Act (12 U.S.C. 1752).
            (10) Federal banking agency.--The term--
                    (A) ``Federal banking agency'' means, individually, 
                the Board of Governors, the Office of the Comptroller of 
                the Currency, and the Corporation; and
                    (B) ``Federal banking agencies'' means all of the 
                agencies referred to in subparagraph (A), collectively.
            (11) Functionally regulated subsidiary.--The term 
        ``functionally regulated subsidiary'' has the same meaning as in 
        section 5(c)(5) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1844(c)(5)).
            (12) Primary financial regulatory agency.--The term 
        ``primary financial regulatory agency'' means--
                    (A) the appropriate Federal banking agency, with 
                respect to institutions described in section 3(q) of the 
                Federal Deposit Insurance Act, except to the extent that 
                an institution is or the activities of an institution 
                are otherwise described in subparagraph (B), (C), (D), 
                or (E);
                    (B) the Securities and Exchange Commission, with 
                respect to--
                          (i) any broker or dealer that is registered 
                      with the Commission under the Securities Exchange 
                      Act of 1934, with respect to the activities of the 
                      broker or dealer that require the broker or dealer 
                      to be registered under that Act;
                          (ii) any investment company that is registered 
                      with the Commission under the Investment Company 
                      Act of 1940, with respect to the activities of the 
                      investment company that require the investment 
                      company to be registered under that Act;
                          (iii) any investment adviser that is 
                      registered with the Commission under the 
                      Investment Advisers Act of 1940, with respect to 
                      the investment advisory activities of such company 
                      and activities that are incidental to such 
                      advisory activities;

[[Page 124 STAT. 1388]]

                          (iv) any clearing agency registered with the 
                      Commission under the Securities Exchange Act of 
                      1934, with respect to the activities of the 
                      clearing agency that require the agency to be 
                      registered under such Act;
                          (v) any nationally recognized statistical 
                      rating organization registered with the Commission 
                      under the Securities Exchange Act of 1934;
                          (vi) any transfer agent registered with the 
                      Commission under the Securities Exchange Act of 
                      1934;
                          (vii) any exchange registered as a national 
                      securities exchange with the Commission under the 
                      Securities Exchange Act of 1934;
                          (viii) any national securities association 
                      registered with the Commission under the 
                      Securities Exchange Act of 1934;
                          (ix) any securities information processor 
                      registered with the Commission under the 
                      Securities Exchange Act of 1934;
                          (x) the Municipal Securities Rulemaking Board 
                      established under the Securities Exchange Act of 
                      1934;
                          (xi) the Public Company Accounting Oversight 
                      Board established under the Sarbanes-Oxley Act of 
                      2002 (15 U.S.C. 7211 et seq.);
                          (xii) the Securities Investor Protection 
                      Corporation established under the Securities 
                      Investor Protection Act of 1970 (15 U.S.C. 78aaa 
                      et seq.); and
                          (xiii) any security-based swap execution 
                      facility, security-based swap data repository, 
                      security-based swap dealer or major security-based 
                      swap participant registered with the Commission 
                      under the Securities Exchange Act of 1934, with 
                      respect to the security-based swap activities of 
                      the person that require such person to be 
                      registered under such Act;
                    (C) the Commodity Futures Trading Commission, with 
                respect to--
                          (i) any futures commission merchant registered 
                      with the Commodity Futures Trading Commission 
                      under the Commodity Exchange Act (7 U.S.C. 1 et 
                      seq.), with respect to the activities of the 
                      futures commission merchant that require the 
                      futures commission merchant to be registered under 
                      that Act;
                          (ii) any commodity pool operator registered 
                      with the Commodity Futures Trading Commission 
                      under the Commodity Exchange Act (7 U.S.C. 1 et 
                      seq.), with respect to the activities of the 
                      commodity pool operator that require the commodity 
                      pool operator to be registered under that Act, or 
                      a commodity pool, as defined in that Act;
                          (iii) any commodity trading advisor or 
                      introducing broker registered with the Commodity 
                      Futures Trading Commission under the Commodity 
                      Exchange Act (7 U.S.C. 1 et seq.), with respect to 
                      the activities of the commodity trading advisor or 
                      introducing broker that require the commodity 
                      trading adviser or introducing broker to be 
                      registered under that Act;

[[Page 124 STAT. 1389]]

                          (iv) any derivatives clearing organization 
                      registered with the Commodity Futures Trading 
                      Commission under the Commodity Exchange Act (7 
                      U.S.C. 1 et seq.), with respect to the activities 
                      of the derivatives clearing organization that 
                      require the derivatives clearing organization to 
                      be registered under that Act;
                          (v) any board of trade designated as a 
                      contract market by the Commodity Futures Trading 
                      Commission under the Commodity Exchange Act (7 
                      U.S.C. 1 et seq.);
                          (vi) any futures association registered with 
                      the Commodity Futures Trading Commission under the 
                      Commodity Exchange Act (7 U.S.C. 1 et seq.);
                          (vii) any retail foreign exchange dealer 
                      registered with the Commodity Futures Trading 
                      Commission under the Commodity Exchange Act (7 
                      U.S.C. 1 et seq.), with respect to the activities 
                      of the retail foreign exchange dealer that require 
                      the retail foreign exchange dealer to be 
                      registered under that Act;
                          (viii) any swap execution facility, swap data 
                      repository, swap dealer, or major swap participant 
                      registered with the Commodity Futures Trading 
                      Commission under the Commodity Exchange Act (7 
                      U.S.C. 1 et seq.) with respect to the swap 
                      activities of the person that require such person 
                      to be registered under that Act; and
                          (ix) any registered entity under the Commodity 
                      Exchange Act (7 U.S.C. 1 et seq.), with respect to 
                      the activities of the registered entity that 
                      require the registered entity to be registered 
                      under that Act;
                    (D) the State insurance authority of the State in 
                which an insurance company is domiciled, with respect to 
                the insurance activities and activities that are 
                incidental to such insurance activities of an insurance 
                company that is subject to supervision by the State 
                insurance authority under State insurance law; and
                    (E) the Federal Housing Finance Agency, with respect 
                to Federal Home Loan Banks or the Federal Home Loan Bank 
                System, and with respect to the Federal National 
                Mortgage Association or the Federal Home Loan Mortgage 
                Corporation.
            (13) Prudential standards.--The term ``prudential 
        standards'' means enhanced supervision and regulatory standards 
        developed by the Board of Governors under section 165.
            (14) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (15) Securities terms.--The--
                    (A) terms ``broker'', ``dealer'', ``issuer'', 
                ``nationally recognized statistical rating 
                organization'', ``security'', and ``securities laws'' 
                have the same meanings as in section 3 of the Securities 
                Exchange Act of 1934 (15 U.S.C. 78c);
                    (B) term ``investment adviser'' has the same meaning 
                as in section 202 of the Investment Advisers Act of 1940 
                (15 U.S.C. 80b-2); and
                    (C) term ``investment company'' has the same meaning 
                as in section 3 of the Investment Company Act of 1940 
                (15 U.S.C. 80a-3).

[[Page 124 STAT. 1390]]

            (16) State.--The term ``State'' means any State, 
        commonwealth, territory, or possession of the United States, the 
        District of Columbia, the Commonwealth of Puerto Rico, the 
        Commonwealth of the Northern Mariana Islands, American Samoa, 
        Guam, or the United States Virgin Islands.
            (17) Transfer date.--The term ``transfer date'' means the 
        date established under section 311.
            (18) Other incorporated definitions.--
                    (A) Federal deposit insurance act.--The terms 
                ``bank'', ``bank holding company'', ``control'', 
                ``deposit'', ``depository institution'', ``Federal 
                depository institution'', ``Federal savings 
                association'', ``foreign bank'', ``including'', 
                ``insured branch'', ``insured depository institution'', 
                ``national member bank'', ``national nonmember bank'', 
                ``savings association'', ``State bank'', ``State 
                depository institution'', ``State member bank'', ``State 
                nonmember bank'', ``State savings association'', and 
                ``subsidiary'' have the same meanings as in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813).
                    (B) Holding companies.--The term--
                          (i) ``bank holding company'' has the same 
                      meaning as in section 2 of the Bank Holding 
                      Company Act of 1956 (12 U.S.C. 1841);
                          (ii) ``financial holding company'' has the 
                      same meaning as in section 2(p) of the Bank 
                      Holding Company Act of 1956 (12 U.S.C. 1841(p)); 
                      and
                          (iii) ``savings and loan holding company'' has 
                      the same meaning as in section 10 of the Home 
                      Owners' Loan Act (12 U.S.C. 1467a(a)).
SEC. 3. <<NOTE: 12 USC 5302.>> SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or circumstance 
is held to be unconstitutional, the remainder of this Act, the 
amendments made by this Act, and the application of the provisions of 
such to any person or circumstance shall not be affected thereby.
SEC. 4. <<NOTE: 12 USC 5301 note.>> EFFECTIVE DATE.

    Except as otherwise specifically provided in this Act or the 
amendments made by this Act, this Act and such amendments shall take 
effect 1 day after the date of enactment of this Act.
SEC. 5. BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying with 
the Statutory Pay-As-You-Go-Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, jointly submitted for printing in the 
Congressional Record by the Chairmen of the House and Senate Budget 
Committees, provided that such statement has been submitted prior to the 
vote on passage in the House acting first on this conference report or 
amendment between the Houses.
SEC. 6. <<NOTE: 12 USC 5303.>> ANTITRUST SAVINGS CLAUSE.

    Nothing in this Act, or any amendment made by this Act, shall be 
construed to modify, impair, or supersede the operation of any of the 
antitrust laws, unless otherwise <<NOTE: Definition.>> specified. For 
purposes of this section, the term ``antitrust laws'' has the same 
meaning

[[Page 124 STAT. 1391]]

as in subsection (a) of the first section of the Clayton Act, except 
that such term includes section 5 of the Federal Trade Commission Act, 
to the extent that such section 5 applies to unfair methods of 
competition.

TITLE I-- <<NOTE: Financial Stability Act of 2010.>> FINANCIAL STABILITY
SEC. 101. <<NOTE: 12 USC 5301 note.>> SHORT TITLE.

    This title may be cited as the ``Financial Stability Act of 2010''.
SEC. 102. <<NOTE: 12 USC 5311.>> DEFINITIONS.

    (a) In General.--For purposes of this title, unless the context 
otherwise requires, the following definitions shall apply:
            (1) Bank holding company.--The term ``bank holding company'' 
        has the same meaning as in section 2 of the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1841). A foreign bank or company that is 
        treated as a bank holding company for purposes of the Bank 
        Holding Company Act of 1956, pursuant to section 8(a) of the 
        International Banking Act of 1978 (12 U.S.C. 3106(a)), shall be 
        treated as a bank holding company for purposes of this title.
            (2) Chairperson.--The term ``Chairperson'' means the 
        Chairperson of the Council.
            (3) Member agency.--The term ``member agency'' means an 
        agency represented by a voting member of the Council.
            (4) Nonbank financial company definitions.--
                    (A) Foreign nonbank financial company.--The term 
                ``foreign nonbank financial company'' means a company 
                (other than a company that is, or is treated in the 
                United States as, a bank holding company) that is--
                          (i) incorporated or organized in a country 
                      other than the United States; and
                          (ii) predominantly engaged in, including 
                      through a branch in the United States, financial 
                      activities, as defined in paragraph (6).
                    (B) U.S. nonbank financial company.--The term ``U.S. 
                nonbank financial company'' means a company (other than 
                a bank holding company, a Farm Credit System institution 
                chartered and subject to the provisions of the Farm 
                Credit Act of 1971 (12 U.S.C. 2001 et seq.), or a 
                national securities exchange (or parent thereof), 
                clearing agency (or parent thereof, unless the parent is 
                a bank holding company), security-based swap execution 
                facility, or security-based swap data repository 
                registered with the Commission, or a board of trade 
                designated as a contract market (or parent thereof), or 
                a derivatives clearing organization (or parent thereof, 
                unless the parent is a bank holding company), swap 
                execution facility or a swap data repository registered 
                with the Commodity Futures Trading Commission), that 
                is--
                          (i) incorporated or organized under the laws 
                      of the United States or any State; and
                          (ii) predominantly engaged in financial 
                      activities, as defined in paragraph (6).

[[Page 124 STAT. 1392]]

                    (C) Nonbank financial company.--The term ``nonbank 
                financial company'' means a U.S. nonbank financial 
                company and a foreign nonbank financial company.
                    (D) Nonbank financial company supervised by the 
                board of governors.--The term ``nonbank financial 
                company supervised by the Board of Governors'' means a 
                nonbank financial company that the Council has 
                determined under section 113 shall be supervised by the 
                Board of Governors.
            (5) Office of financial research.--The term ``Office of 
        Financial Research'' means the office established under section 
        152.
            (6) Predominantly engaged.--A company is ``predominantly 
        engaged in financial activities'' if--
                    (A) the annual gross revenues derived by the company 
                and all of its subsidiaries from activities that are 
                financial in nature (as defined in section 4(k) of the 
                Bank Holding Company Act of 1956) and, if applicable, 
                from the ownership or control of one or more insured 
                depository institutions, represents 85 percent or more 
                of the consolidated annual gross revenues of the 
                company; or
                    (B) the consolidated assets of the company and all 
                of its subsidiaries related to activities that are 
                financial in nature (as defined in section 4(k) of the 
                Bank Holding Company Act of 1956) and, if applicable, 
                related to the ownership or control of one or more 
                insured depository institutions, represents 85 percent 
                or more of the consolidated assets of the company.
            (7) Significant institutions.--The terms ``significant 
        nonbank financial company'' and ``significant bank holding 
        company'' have the meanings given those terms by rule of the 
        Board of Governors, but in no instance shall the term 
        ``significant nonbank financial company'' include those entities 
        that are excluded under paragraph (4)(B).

    (b) Definitional Criteria.--The <<NOTE: Regulations.>> Board of 
Governors shall establish, by regulation, the requirements for 
determining if a company is predominantly engaged in financial 
activities, as defined in subsection (a)(6).

    (c) Foreign Nonbank Financial Companies.--For purposes of the 
application of subtitles A and C (other than section 113(b)) with 
respect to a foreign nonbank financial company, references in this title 
to ``company'' or ``subsidiary'' include only the United States 
activities and subsidiaries of such foreign company, except as otherwise 
provided.

            Subtitle A--Financial Stability Oversight Council

SEC. 111. <<NOTE: 12 USC 5321.>> FINANCIAL STABILITY OVERSIGHT 
                        COUNCIL ESTABLISHED.

    (a) Establishment.--Effective <<NOTE: Effective date.>> on the date 
of enactment of this Act, there is established the Financial Stability 
Oversight Council.

    (b) Membership.--The Council shall consist of the following members:
            (1) Voting members.--The voting members, who shall each have 
        1 vote on the Council shall be--

[[Page 124 STAT. 1393]]

                    (A) the Secretary of the Treasury, who shall serve 
                as Chairperson of the Council;
                    (B) the Chairman of the Board of Governors;
                    (C) the Comptroller of the Currency;
                    (D) the Director of the Bureau;
                    (E) the Chairman of the Commission;
                    (F) the Chairperson of the Corporation;
                    (G) the Chairperson of the Commodity Futures Trading 
                Commission;
                    (H) the Director of the Federal Housing Finance 
                Agency;
                    (I) the Chairman of the National Credit Union 
                Administration Board; and
                    (J) an independent member appointed by the 
                President, by and with the advice and consent of the 
                Senate, having insurance expertise.
            (2) Nonvoting members.--The nonvoting members, who shall 
        serve in an advisory capacity as a nonvoting member of the 
        Council, shall be--
                    (A) the Director of the Office of Financial 
                Research;
                    (B) the Director of the Federal Insurance Office;
                    (C) a State insurance commissioner, to be designated 
                by a selection process determined by the State insurance 
                commissioners;
                    (D) a State banking supervisor, to be designated by 
                a selection process determined by the State banking 
                supervisors; and
                    (E) a State securities commissioner (or an officer 
                performing like functions), to be designated by a 
                selection process determined by such State securities 
                commissioners.
            (3) Nonvoting member participation.--The nonvoting members 
        of the Council shall not be excluded from any of the 
        proceedings, meetings, discussions, or deliberations of the 
        Council, except that the Chairperson may, upon an affirmative 
        vote of the member agencies, exclude the nonvoting members from 
        any of the proceedings, meetings, discussions, or deliberations 
        of the Council when necessary to safeguard and promote the free 
        exchange of confidential supervisory information.

    (c) Terms; Vacancy.--
            (1) Terms.--The independent member of the Council shall 
        serve for a term of 6 years, and each nonvoting member described 
        in subparagraphs (C), (D), and (E) of subsection (b)(2) shall 
        serve for a term of 2 years.
            (2) Vacancy.--Any vacancy on the Council shall be filled in 
        the manner in which the original appointment was made.
            (3) Acting officials may serve.--In the event of a vacancy 
        in the office of the head of a member agency or department, and 
        pending the appointment of a successor, or during the absence or 
        disability of the head of a member agency or department, the 
        acting head of the member agency or department shall serve as a 
        member of the Council in the place of that agency or department 
        head.

    (d) Technical and Professional Advisory Committees.--The Council may 
appoint such special advisory, technical, or professional committees as 
may be useful in carrying out the functions of the Council, including an 
advisory committee consisting of State

[[Page 124 STAT. 1394]]

regulators, and the members of such committees may be members of the 
Council, or other persons, or both.
    (e) Meetings.--
            (1) Timing.--The Council shall meet at the call of the 
        Chairperson or a majority of the members then serving, but not 
        less frequently than quarterly.
            (2) Rules for conducting business.--The Council shall adopt 
        such rules as may be necessary for the conduct of the business 
        of the Council. Such rules shall be rules of agency 
        organization, procedure, or practice for purposes of section 553 
        of title 5, United States Code.

    (f) Voting.--Unless otherwise specified, the Council shall make all 
decisions that it is authorized or required to make by a majority vote 
of the voting members then serving.
    (g) Nonapplicability of FACA.--
The <<NOTE: Publication. List.>> Federal Advisory Committee Act (5 
U.S.C. App.) shall not apply to the Council, or to any special advisory, 
technical, or professional committee appointed by the Council, except 
that, if an advisory, technical, or professional committee has one or 
more members who are not employees of or affiliated with the United 
States Government, the Council shall publish a list of the names of the 
members of such committee.

    (h) Assistance From Federal Agencies.--Any department or agency of 
the United States may provide to the Council and any special advisory, 
technical, or professional committee appointed by the Council, such 
services, funds, facilities, staff, and other support services as the 
Council may determine advisable.
    (i) Compensation of Members.--
            (1) Federal employee members.--All members of the Council 
        who are officers or employees of the United States shall serve 
        without compensation in addition to that received for their 
        services as officers or employees of the United States.
            (2) Compensation for non-federal member.--Section 5314 of 
        title 5, United States Code, is amended by adding at the end the 
        following:
            ``Independent Member of the Financial Stability Oversight 
        Council (1).''.

    (j) Detail of Government Employees.--Any employee of the Federal 
Government may be detailed to the Council without reimbursement, and 
such detail shall be without interruption or loss of civil service 
status or privilege. An employee of the Federal Government detailed to 
the Council shall report to and be subject to oversight by the Council 
during the assignment to the Council, and shall be compensated by the 
department or agency from which the employee was detailed.
SEC. 112. <<NOTE: 12 USC 5322.>> COUNCIL AUTHORITY.

    (a) Purposes and Duties of the Council.--
            (1) In general.--The purposes of the Council are--
                    (A) to identify risks to the financial stability of 
                the United States that could arise from the material 
                financial distress or failure, or ongoing activities, of 
                large, interconnected bank holding companies or nonbank 
                financial companies, or that could arise outside the 
                financial services marketplace;
                    (B) to promote market discipline, by eliminating 
                expectations on the part of shareholders, creditors, and

[[Page 124 STAT. 1395]]

                counterparties of such companies that the Government 
                will shield them from losses in the event of failure; 
                and
                    (C) to respond to emerging threats to the stability 
                of the United States financial system.
            (2) Duties.--The Council shall, in accordance with this 
        title--
                    (A) collect information from member agencies, other 
                Federal and State financial regulatory agencies, the 
                Federal Insurance Office and, if necessary to assess 
                risks to the United States financial system, direct the 
                Office of Financial Research to collect information from 
                bank holding companies and nonbank financial companies;
                    (B) provide direction to, and request data and 
                analyses from, the Office of Financial Research to 
                support the work of the Council;
                    (C) monitor the financial services marketplace in 
                order to identify potential threats to the financial 
                stability of the United States;
                    (D) to monitor domestic and international financial 
                regulatory proposals and developments, including 
                insurance and accounting issues, and to advise Congress 
                and make recommendations in such areas that will enhance 
                the integrity, efficiency, competitiveness, and 
                stability of the U.S. financial markets;
                    (E) facilitate information sharing and coordination 
                among the member agencies and other Federal and State 
                agencies regarding domestic financial services policy 
                development, rulemaking, examinations, reporting 
                requirements, and enforcement actions;
                    (F) recommend to the member agencies general 
                supervisory priorities and principles reflecting the 
                outcome of discussions among the member agencies;
                    (G) identify gaps in regulation that could pose 
                risks to the financial stability of the United States;
                    (H) require supervision by the Board of Governors 
                for nonbank financial companies that may pose risks to 
                the financial stability of the United States in the 
                event of their material financial distress or failure, 
                or because of their activities pursuant to section 113;
                    (I) make <<NOTE: Recommenda- 
                tions.>> recommendations to the Board of Governors 
                concerning the establishment of heightened prudential 
                standards for risk-based capital, leverage, liquidity, 
                contingent capital, resolution plans and credit exposure 
                reports, concentration limits, enhanced public 
                disclosures, and overall risk management for nonbank 
                financial companies and large, interconnected bank 
                holding companies supervised by the Board of Governors;
                    (J) identify systemically important financial market 
                utilities and payment, clearing, and settlement 
                activities (as that term is defined in title VIII);
                    (K) <<NOTE: Recommenda- tions.>>  make 
                recommendations to primary financial regulatory agencies 
                to apply new or heightened standards and safeguards for 
                financial activities or practices that could create or 
                increase risks of significant liquidity, credit, or 
                other problems spreading among bank holding companies, 
                nonbank financial companies, and United States financial 
                markets;

[[Page 124 STAT. 1396]]

                    (L) review and, as appropriate, may submit comments 
                to the Commission and any standard-setting body with 
                respect to an existing or proposed accounting principle, 
                standard, or procedure;
                    (M) provide a forum for--
                          (i) discussion and analysis of emerging market 
                      developments and financial regulatory issues; and
                          (ii) resolution of jurisdictional disputes 
                      among the members of the Council; and
                    (N) <<NOTE: Deadline. Reports.>> annually report to 
                and testify before Congress on--
                          (i) the activities of the Council;
                          (ii) significant financial market and 
                      regulatory developments, including insurance and 
                      accounting regulations and standards, along with 
                      an assessment of those developments on the 
                      stability of the financial system;
                          (iii) potential emerging threats to the 
                      financial stability of the United States;
                          (iv) all determinations made under section 113 
                      or title VIII, and the basis for such 
                      determinations;
                          (v) all recommendations made under section 119 
                      and the result of such recommendations; and
                          (vi) recommendations--
                                    (I) to enhance the integrity, 
                                efficiency, competitiveness, and 
                                stability of United States financial 
                                markets;
                                    (II) to promote market discipline; 
                                and
                                    (III) to maintain investor 
                                confidence.

    (b) Statements by Voting Members of the Council.--At the time at 
which each report is submitted under subsection (a), each voting member 
of the Council shall--
            (1) if such member believes that the Council, the 
        Government, and the private sector are taking all reasonable 
        steps to ensure financial stability and to mitigate systemic 
        risk that would negatively affect the economy, submit a signed 
        statement to Congress stating such belief; or
            (2) if such member does not believe that all reasonable 
        steps described under paragraph (1) are being taken, submit a 
        signed statement to Congress stating what actions such member 
        believes need to be taken in order to ensure that all reasonable 
        steps described under paragraph (1) are taken.

    (c) Testimony by the Chairperson.--The Chairperson shall appear 
before the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban Affairs 
of the Senate at an annual hearing, after the report is submitted under 
subsection (a)--
            (1) to discuss the efforts, activities, objectives, and 
        plans of the Council; and
            (2) to discuss and answer questions concerning such report.

    (d) Authority To Obtain Information.--
            (1) In general.--The Council may receive, and may request 
        the submission of, any data or information from the Office of 
        Financial Research, member agencies, and the Federal Insurance 
        Office, as necessary--
                    (A) to monitor the financial services marketplace to 
                identify potential risks to the financial stability of 
                the United States; or

[[Page 124 STAT. 1397]]

                    (B) to otherwise carry out any of the provisions of 
                this title.
            (2) Submissions by the office and member agencies.--
        Notwithstanding any other provision of law, the Office of 
        Financial Research, any member agency, and the Federal Insurance 
        Office, are authorized to submit information to the Council.
            (3) Financial data collection.--
                    (A) In general.--The Council, acting through the 
                Office of Financial Research, may require the submission 
                of periodic and other reports from any nonbank financial 
                company or bank holding company for the purpose of 
                assessing the extent to which a financial activity or 
                financial market in which the nonbank financial company 
                or bank holding company participates, or the nonbank 
                financial company or bank holding company itself, poses 
                a threat to the financial stability of the United 
                States.
                    (B) Mitigation of report burden.--Before requiring 
                the submission of reports from any nonbank financial 
                company or bank holding company that is regulated by a 
                member agency or any primary financial regulatory 
                agency, the Council, acting through the Office of 
                Financial Research, shall coordinate with such agencies 
                and shall, whenever possible, rely on information 
                available from the Office of Financial Research or such 
                agencies.
                    (C) Mitigation in case of foreign financial 
                companies.--Before <<NOTE: Consultation.>> requiring the 
                submission of reports from a company that is a foreign 
                nonbank financial company or foreign-based bank holding 
                company, the Council shall, acting through the Office of 
                Financial Research, to the extent appropriate, consult 
                with the appropriate foreign regulator of such company 
                and, whenever possible, rely on information already 
                being collected by such foreign regulator, with English 
                translation.
            (4) Back-up examination by the board of governors.--If the 
        Council is unable to determine whether the financial activities 
        of a U.S. nonbank financial company pose a threat to the 
        financial stability of the United States, based on information 
        or reports obtained under paragraphs (1) and (3), discussions 
        with management, and publicly available information, the Council 
        may request the Board of Governors, and the Board of Governors 
        is authorized, to conduct an examination of the U.S. nonbank 
        financial company for the sole purpose of determining whether 
        the nonbank financial company should be supervised by the Board 
        of Governors for purposes of this title.
            (5) Confidentiality.--
                    (A) In general.--The Council, the Office of 
                Financial Research, and the other member agencies shall 
                maintain the confidentiality of any data, information, 
                and reports submitted under this title.
                    (B) Retention of privilege.--The submission of any 
                nonpublicly available data or information under this 
                subsection and subtitle B shall not constitute a waiver 
                of, or otherwise affect, any privilege arising under 
                Federal or State law (including the rules of any Federal 
                or State court) to which the data or information is 
                otherwise subject.

[[Page 124 STAT. 1398]]

                    (C) Freedom of information act.--
                Section <<NOTE: Applicability.>> 552 of title 5, United 
                States Code, including the exceptions thereunder, shall 
                apply to any data or information submitted under this 
                subsection and subtitle B.
SEC. 113. <<NOTE: 12 USC 5323.>> AUTHORITY TO REQUIRE SUPERVISION 
                        AND REGULATION OF CERTAIN NONBANK 
                        FINANCIAL COMPANIES.

    (a) U.S. Nonbank Financial Companies Supervised by the Board of 
Governors.--
            (1) Determination.--The Council, on a nondelegable basis and 
        by a vote of not fewer than \2/3\ of the voting members then 
        serving, including an affirmative vote by the Chairperson, may 
        determine that a U.S. nonbank financial company shall be 
        supervised by the Board of Governors and shall be subject to 
        prudential standards, in accordance with this title, if the 
        Council determines that material financial distress at the U.S. 
        nonbank financial company, or the nature, scope, size, scale, 
        concentration, interconnectedness, or mix of the activities of 
        the U.S. nonbank financial company, could pose a threat to the 
        financial stability of the United States.
            (2) Considerations.--In making a determination under 
        paragraph (1), the Council shall consider--
                    (A) the extent of the leverage of the company;
                    (B) the extent and nature of the off-balance-sheet 
                exposures of the company;
                    (C) the extent and nature of the transactions and 
                relationships of the company with other significant 
                nonbank financial companies and significant bank holding 
                companies;
                    (D) the importance of the company as a source of 
                credit for households, businesses, and State and local 
                governments and as a source of liquidity for the United 
                States financial system;
                    (E) the importance of the company as a source of 
                credit for low-income, minority, or underserved 
                communities, and the impact that the failure of such 
                company would have on the availability of credit in such 
                communities;
                    (F) the extent to which assets are managed rather 
                than owned by the company, and the extent to which 
                ownership of assets under management is diffuse;
                    (G) the nature, scope, size, scale, concentration, 
                interconnectedness, and mix of the activities of the 
                company;
                    (H) the degree to which the company is already 
                regulated by 1 or more primary financial regulatory 
                agencies;
                    (I) the amount and nature of the financial assets of 
                the company;
                    (J) the amount and types of the liabilities of the 
                company, including the degree of reliance on short-term 
                funding; and
                    (K) any other risk-related factors that the Council 
                deems appropriate.

    (b) Foreign Nonbank Financial Companies Supervised by the Board of 
Governors.--
            (1) Determination.--The Council, on a nondelegable basis and 
        by a vote of not fewer than \2/3\ of the voting members then 
        serving, including an affirmative vote by the Chairperson,

[[Page 124 STAT. 1399]]

        may determine that a foreign nonbank financial company shall be 
        supervised by the Board of Governors and shall be subject to 
        prudential standards, in accordance with this title, if the 
        Council determines that material financial distress at the 
        foreign nonbank financial company, or the nature, scope, size, 
        scale, concentration, interconnectedness, or mix of the 
        activities of the foreign nonbank financial company, could pose 
        a threat to the financial stability of the United States.
            (2) Considerations.--In making a determination under 
        paragraph (1), the Council shall consider--
                    (A) the extent of the leverage of the company;
                    (B) the extent and nature of the United States 
                related off-balance-sheet exposures of the company;
                    (C) the extent and nature of the transactions and 
                relationships of the company with other significant 
                nonbank financial companies and significant bank holding 
                companies;
                    (D) the importance of the company as a source of 
                credit for United States households, businesses, and 
                State and local governments and as a source of liquidity 
                for the United States financial system;
                    (E) the importance of the company as a source of 
                credit for low-income, minority, or underserved 
                communities in the United States, and the impact that 
                the failure of such company would have on the 
                availability of credit in such communities;
                    (F) the extent to which assets are managed rather 
                than owned by the company and the extent to which 
                ownership of assets under management is diffuse;
                    (G) the nature, scope, size, scale, concentration, 
                interconnectedness, and mix of the activities of the 
                company;
                    (H) the extent to which the company is subject to 
                prudential standards on a consolidated basis in its home 
                country that are administered and enforced by a 
                comparable foreign supervisory authority;
                    (I) the amount and nature of the United States 
                financial assets of the company;
                    (J) the amount and nature of the liabilities of the 
                company used to fund activities and operations in the 
                United States, including the degree of reliance on 
                short-term funding; and
                    (K) any other risk-related factors that the Council 
                deems appropriate.

    (c) Antievasion.--
            (1) Determinations.--In order to avoid evasion of this 
        title, the Council, on its own initiative or at the request of 
        the Board of Governors, may determine, on a nondelegable basis 
        and by a vote of not fewer than \2/3\ of the voting members then 
        serving, including an affirmative vote by the Chairperson, 
        that--
                    (A) material financial distress related to, or the 
                nature, scope, size, scale, concentration, 
                interconnectedness, or mix of, the financial activities 
                conducted directly or indirectly by a company 
                incorporated or organized under the laws of the United 
                States or any State or the financial activities in the 
                United States of a company incorporated or organized in 
                a country other than the United States would

[[Page 124 STAT. 1400]]

                pose a threat to the financial stability of the United 
                States, based on consideration of the factors in 
                subsection (a)(2) or (b)(2), as applicable;
                    (B) the company is organized or operates in such a 
                manner as to evade the application of this title; and
                    (C) such financial activities of the company shall 
                be supervised by the Board of Governors and subject to 
                prudential standards in accordance with this title, 
                consistent with paragraph (3).
            (2) Report.--Upon making a determination under paragraph 
        (1), the Council shall submit a report to the appropriate 
        committees of Congress detailing the reasons for making such 
        determination.
            (3) Consolidated supervision of only financial activities; 
        establishment of an intermediate holding company.--
                    (A) Establishment of an intermediate holding 
                company.--Upon a determination under paragraph (1), the 
                company that is the subject of the determination may 
                establish an intermediate holding company in which the 
                financial activities of such company and its 
                subsidiaries shall be conducted (other than the 
                activities described in section 167(b)(2)) in compliance 
                with any regulations or guidance provided by the Board 
                of Governors. Such intermediate holding company shall be 
                subject to the supervision of the Board of Governors and 
                to prudential standards under this title as if the 
                intermediate holding company were a nonbank financial 
                company supervised by the Board of Governors.
                    (B) Action of the board of governors.--To facilitate 
                the supervision of the financial activities subject to 
                the determination in paragraph (1), the Board of 
                Governors may require a company to establish an 
                intermediate holding company, as provided for in section 
                167, which would be subject to the supervision of the 
                Board of Governors and to prudential standards under 
                this title, as if the intermediate holding company were 
                a nonbank financial company supervised by the Board of 
                Governors.
            (4) Notice and opportunity for hearing and final 
        determination; judicial review.-- 
        <<NOTE: Applicability.>> Subsections (d) through (h) shall apply 
        to determinations made by the Council pursuant to paragraph (1) 
        in the same manner as such subsections apply to nonbank 
        financial companies.
            (5) Covered financial activities.--For purposes of this 
        subsection, the term ``financial activities''--
                    (A) <<NOTE: Definition.>> means activities that are 
                financial in nature (as defined in section 4(k) of the 
                Bank Holding Company Act of 1956);
                    (B) includes the ownership or control of one or more 
                insured depository institutions; and
                    (C) does not include internal financial activities 
                conducted for the company or any affiliate thereof, 
                including internal treasury, investment, and employee 
                benefit functions.
            (6) Only financial activities subject to prudential 
        supervision.--Nonfinancial activities of the company shall not

[[Page 124 STAT. 1401]]

        be subject to supervision by the Board of Governors and 
        prudential standards of the Board. For purposes of this Act, the 
        financial activities that are the subject of the determination 
        in paragraph (1) shall be subject to the same requirements as a 
        nonbank financial company supervised by the Board of Governors. 
        Nothing in this paragraph shall prohibit or limit the authority 
        of the Board of Governors to apply prudential standards under 
        this title to the financial activities that are subject to the 
        determination in paragraph (1).

    (d) Reevaluation and Rescission.--The Council shall--
            (1) <<NOTE: Deadline.>> not less frequently than annually, 
        reevaluate each determination made under subsections (a) and (b) 
        with respect to such nonbank financial company supervised by the 
        Board of Governors; and
            (2) rescind any such determination, if the Council, by a 
        vote of not fewer than \2/3\ of the voting members then serving, 
        including an affirmative vote by the Chairperson, determines 
        that the nonbank financial company no longer meets the standards 
        under subsection (a) or (b), as applicable.

    (e) Notice <<NOTE: Deadlines.>> and Opportunity for Hearing and 
Final Determination.--
            (1) In general.--The Council shall provide to a nonbank 
        financial company written notice of a proposed determination of 
        the Council, including an explanation of the basis of the 
        proposed determination of the Council, that a nonbank financial 
        company shall be supervised by the Board of Governors and shall 
        be subject to prudential standards in accordance with this 
        title.
            (2) Hearing.--Not later than 30 days after the date of 
        receipt of any notice of a proposed determination under 
        paragraph (1), the nonbank financial company may request, in 
        writing, an opportunity for a written or oral hearing before the 
        Council to contest the proposed determination. Upon receipt of a 
        timely request, the Council shall fix a time (not later than 30 
        days after the date of receipt of the request) and place at 
        which such company may appear, personally or through counsel, to 
        submit written materials (or, at the sole discretion of the 
        Council, oral testimony and oral argument).
            (3) Final determination.--Not later than 60 days after the 
        date of a hearing under paragraph (2), the Council shall notify 
        the nonbank financial company of the final determination of the 
        Council, which shall contain a statement of the basis for the 
        decision of the Council.
            (4) No hearing requested.--If a nonbank financial company 
        does not make a timely request for a hearing, the Council shall 
        notify the nonbank financial company, in writing, of the final 
        determination of the Council under subsection (a) or (b), as 
        applicable, not later than 10 days after the date by which the 
        company may request a hearing under paragraph (2).

    (f) Emergency <<NOTE: Deadlines.>> Exception.--
            (1) In general.--The <<NOTE: Waiver authority.>> Council may 
        waive or modify the requirements of subsection (e) with respect 
        to a nonbank financial company, if the Council determines, by a 
        vote of not fewer than \2/3\ of the voting members then serving, 
        including an affirmative vote by the Chairperson, that such 
        waiver or modification is necessary or appropriate to prevent or 
        mitigate

[[Page 124 STAT. 1402]]

        threats posed by the nonbank financial company to the financial 
        stability of the United States.
            (2) Notice.--The Council shall provide notice of a waiver or 
        modification under this subsection to the nonbank financial 
        company concerned as soon as practicable, but not later than 24 
        hours after the waiver or modification is granted.
            (3) International coordination.--
        In <<NOTE: Consultation.>> making a determination under 
        paragraph (1), the Council shall consult with the appropriate 
        home country supervisor, if any, of the foreign nonbank 
        financial company that is being considered for such a 
        determination.
            (4) Opportunity for hearing.--The Council shall allow a 
        nonbank financial company to request, in writing, an opportunity 
        for a written or oral hearing before the Council to contest a 
        waiver or modification under this subsection, not later than 10 
        days after the date of receipt of notice of the waiver or 
        modification by the company. Upon receipt of a timely request, 
        the Council shall fix a time (not later than 15 days after the 
        date of receipt of the request) and place at which the nonbank 
        financial company may appear, personally or through counsel, to 
        submit written materials (or, at the sole discretion of the 
        Council, oral testimony and oral argument).
            (5) Notice of final determination.--Not later than 30 days 
        after the date of any hearing under paragraph (4), the Council 
        shall notify the subject nonbank financial company of the final 
        determination of the Council under this subsection, which shall 
        contain a statement of the basis for the decision of the 
        Council.

    (g) Consultation.--The Council shall consult with the primary 
financial regulatory agency, if any, for each nonbank financial company 
or subsidiary of a nonbank financial company that is being considered 
for supervision by the Board of Governors under this section before the 
Council makes any final determination with respect to such nonbank 
financial company under subsection (a), (b), or (c).
    (h) Judicial Review.--If <<NOTE: Deadline.>> the Council makes a 
final determination under this section with respect to a nonbank 
financial company, such nonbank financial company may, not later than 30 
days after the date of receipt of the notice of final determination 
under subsection (d)(2), (e)(3), or (f)(5), bring an action in the 
United States district court for the judicial district in which the home 
office of such nonbank financial company is located, or in the United 
States District Court for the District of Columbia, for an order 
requiring that the final determination be rescinded, and the court 
shall, upon review, dismiss such action or direct the final 
determination to be rescinded. Review of such an action shall be limited 
to whether the final determination made under this section was arbitrary 
and capricious.

    (i) International Coordination.--
In <<NOTE: Consultation.>> exercising its duties under this title with 
respect to foreign nonbank financial companies, foreign-based bank 
holding companies, and cross-border activities and markets, the Council 
shall consult with appropriate foreign regulatory authorities, to the 
extent appropriate.

[[Page 124 STAT. 1403]]

SEC. 114. <<NOTE: 12 USC 5324.>> REGISTRATION OF NONBANK FINANCIAL 
                        COMPANIES SUPERVISED BY THE BOARD OF 
                        GOVERNORS.

    Not <<NOTE: Deadline.>> later than 180 days after the date of a 
final Council determination under section 113 that a nonbank financial 
company is to be supervised by the Board of Governors, such company 
shall register with the Board of Governors, on forms prescribed by the 
Board of Governors, which shall include such information as the Board of 
Governors, in consultation with the Council, may deem necessary or 
appropriate to carry out this title.
SEC. 115. <<NOTE: 12 USC 5325.>> ENHANCED SUPERVISION AND 
                        PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL 
                        COMPANIES SUPERVISED BY THE BOARD OF 
                        GOVERNORS AND CERTAIN BANK HOLDING 
                        COMPANIES.

    (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks to the 
        financial stability of the United States that could arise from 
        the material financial distress, failure, or ongoing activities 
        of large, interconnected financial institutions, the Council may 
        make recommendations to the Board of Governors concerning the 
        establishment and refinement of prudential standards and 
        reporting and disclosure requirements applicable to nonbank 
        financial companies supervised by the Board of Governors and 
        large, interconnected bank holding companies, that--
                    (A) are more stringent than those applicable to 
                other nonbank financial companies and bank holding 
                companies that do not present similar risks to the 
                financial stability of the United States; and
                    (B) increase in stringency, based on the 
                considerations identified in subsection (b)(3).
            (2) Recommended application of required standards.--In 
        making recommendations under this section, the Council may--
                    (A) differentiate among companies that are subject 
                to heightened standards on an individual basis or by 
                category, taking into consideration their capital 
                structure, riskiness, complexity, financial activities 
                (including the financial activities of their 
                subsidiaries), size, and any other risk-related factors 
                that the Council deems appropriate; or
                    (B) recommend an asset threshold that is higher than 
                $50,000,000,000 for the application of any standard 
                described in subsections (c) through (g).

    (b) Development of Prudential Standards.--
            (1) In general.--The recommendations of the Council under 
        subsection (a) may include--
                    (A) risk-based capital requirements;
                    (B) leverage limits;
                    (C) liquidity requirements;
                    (D) resolution plan and credit exposure report 
                requirements;
                    (E) concentration limits;
                    (F) a contingent capital requirement;
                    (G) enhanced public disclosures;
                    (H) short-term debt limits; and
                    (I) overall risk management requirements.

[[Page 124 STAT. 1404]]

            (2) Prudential standards for foreign financial companies.--
        In making recommendations concerning the standards set forth in 
        paragraph (1) that would apply to foreign nonbank financial 
        companies supervised by the Board of Governors or foreign-based 
        bank holding companies, the Council shall--
                    (A) give due regard to the principle of national 
                treatment and equality of competitive opportunity; and
                    (B) take into account the extent to which the 
                foreign nonbank financial company or foreign-based bank 
                holding company is subject on a consolidated basis to 
                home country standards that are comparable to those 
                applied to financial companies in the United States.
            (3) Considerations.--In making recommendations concerning 
        prudential standards under paragraph (1), the Council shall--
                    (A) take into account differences among nonbank 
                financial companies supervised by the Board of Governors 
                and bank holding companies described in subsection (a), 
                based on--
                          (i) the factors described in subsections (a) 
                      and (b) of section 113;
                          (ii) whether the company owns an insured 
                      depository institution;
                          (iii) nonfinancial activities and affiliations 
                      of the company; and
                          (iv) any other factors that the Council 
                      determines appropriate;
                    (B) to the extent possible, ensure that small 
                changes in the factors listed in subsections (a) and (b) 
                of section 113 would not result in sharp, discontinuous 
                changes in the prudential standards established under 
                section 165; and
                    (C) adapt its recommendations as appropriate in 
                light of any predominant line of business of such 
                company, including assets under management or other 
                activities for which particular standards may not be 
                appropriate.

    (c) Contingent Capital.--
            (1) Study required.--The Council shall conduct a study of 
        the feasibility, benefits, costs, and structure of a contingent 
        capital requirement for nonbank financial companies supervised 
        by the Board of Governors and bank holding companies described 
        in subsection (a), which study shall include--
                    (A) an evaluation of the degree to which such 
                requirement would enhance the safety and soundness of 
                companies subject to the requirement, promote the 
                financial stability of the United States, and reduce 
                risks to United States taxpayers;
                    (B) an evaluation of the characteristics and amounts 
                of contingent capital that should be required;
                    (C) an analysis of potential prudential standards 
                that should be used to determine whether the contingent 
                capital of a company would be converted to equity in 
                times of financial stress;
                    (D) an evaluation of the costs to companies, the 
                effects on the structure and operation of credit and 
                other financial markets, and other economic effects of 
                requiring contingent capital;

[[Page 124 STAT. 1405]]

                    (E) an evaluation of the effects of such requirement 
                on the international competitiveness of companies 
                subject to the requirement and the prospects for 
                international coordination in establishing such 
                requirement; and
                    (F) recommendations for implementing regulations.
            (2) Report.--The Council shall submit a report to Congress 
        regarding the study required by paragraph (1) not later than 2 
        years after the date of enactment of this Act.
            (3) Recommendations.--
                    (A) In general.--Subsequent to submitting a report 
                to Congress under paragraph (2), the Council may make 
                recommendations to the Board of Governors to require any 
                nonbank financial company supervised by the Board of 
                Governors and any bank holding company described in 
                subsection (a) to maintain a minimum amount of 
                contingent capital that is convertible to equity in 
                times of financial stress.
                    (B) Factors to consider.--In making recommendations 
                under this subsection, the Council shall consider--
                          (i) an appropriate transition period for 
                      implementation of a conversion under this 
                      subsection;
                          (ii) the factors described in subsection 
                      (b)(3);
                          (iii) capital requirements applicable to a 
                      nonbank financial company supervised by the Board 
                      of Governors or a bank holding company described 
                      in subsection (a), and subsidiaries thereof;
                          (iv) results of the study required by 
                      paragraph (1); and
                          (v) any other factor that the Council deems 
                      appropriate.

    (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Council may make recommendations 
        to the Board of Governors concerning the requirement that each 
        nonbank financial company supervised by the Board of Governors 
        and each bank holding company described in subsection (a) report 
        periodically to the Council, the Board of Governors, and the 
        Corporation, the plan of such company for rapid and orderly 
        resolution in the event of material financial distress or 
        failure.
            (2) Credit exposure report.--The Council may make 
        recommendations to the Board of Governors concerning the 
        advisability of requiring each nonbank financial company 
        supervised by the Board of Governors and bank holding company 
        described in subsection (a) to report periodically to the 
        Council, the Board of Governors, and the Corporation on--
                    (A) the nature and extent to which the company has 
                credit exposure to other significant nonbank financial 
                companies and significant bank holding companies; and
                    (B) the nature and extent to which other such 
                significant nonbank financial companies and significant 
                bank holding companies have credit exposure to that 
                company.

    (e) Concentration Limits.--In order to limit the risks that the 
failure of any individual company could pose to nonbank financial 
companies supervised by the Board of Governors or bank holding companies 
described in subsection (a), the Council may make recommendations to the 
Board of Governors to prescribe standards to limit such risks, as set 
forth in section 165.

[[Page 124 STAT. 1406]]

    (f) Enhanced Public Disclosures.--The Council may make 
recommendations to the Board of Governors to require periodic public 
disclosures by bank holding companies described in subsection (a) and by 
nonbank financial companies supervised by the Board of Governors, in 
order to support market evaluation of the risk profile, capital 
adequacy, and risk management capabilities thereof.
    (g) Short-term Debt Limits.--The Council may make recommendations to 
the Board of Governors to require short-term debt limits to mitigate the 
risks that an over-accumulation of such debt could pose to bank holding 
companies described in subsection (a), nonbank financial companies 
supervised by the Board of Governors, or the financial system.
SEC. 116. <<NOTE: 12 USC 5326.>> REPORTS.

    (a) In General.--Subject to subsection (b), the Council, acting 
through the Office of Financial Research, may require a bank holding 
company with total consolidated assets of $50,000,000,000 or greater or 
a nonbank financial company supervised by the Board of Governors, and 
any subsidiary thereof, to submit certified reports to keep the Council 
informed as to--
            (1) the financial condition of the company;
            (2) systems for monitoring and controlling financial, 
        operating, and other risks;
            (3) transactions with any subsidiary that is a depository 
        institution; and
            (4) the extent to which the activities and operations of the 
        company and any subsidiary thereof, could, under adverse 
        circumstances, have the potential to disrupt financial markets 
        or affect the overall financial stability of the United States.

    (b) Use of Existing Reports.--
            (1) In general.--For purposes of compliance with subsection 
        (a), the Council, acting through the Office of Financial 
        Research, shall, to the fullest extent possible, use--
                    (A) reports that a bank holding company, nonbank 
                financial company supervised by the Board of Governors, 
                or any functionally regulated subsidiary of such company 
                has been required to provide to other Federal or State 
                regulatory agencies or to a relevant foreign supervisory 
                authority;
                    (B) information that is otherwise required to be 
                reported publicly; and
                    (C) externally audited financial statements.
            (2) Availability.--Each bank holding company described in 
        subsection (a) and nonbank financial company supervised by the 
        Board of Governors, and any subsidiary thereof, shall provide to 
        the Council, at the request of the Council, copies of all 
        reports referred to in paragraph (1).
            (3) Confidentiality.--The Council shall maintain the 
        confidentiality of the reports obtained under subsection (a) and 
        paragraph (1)(A) of this subsection.
SEC. 117. <<NOTE: 12 USC 5327.>> TREATMENT OF CERTAIN COMPANIES 
                        THAT CEASE TO BE BANK HOLDING COMPANIES.

    (a) Applicability.--This section shall apply to--
            (1) any entity that--

[[Page 124 STAT. 1407]]

                    (A) was a bank holding company having total 
                consolidated assets equal to or greater than 
                $50,000,000,000 as of January 1, 2010; and
                    (B) received financial assistance under or 
                participated in the Capital Purchase Program established 
                under the Troubled Asset Relief Program authorized by 
                the Emergency Economic Stabilization Act of 2008; and
            (2) any successor entity (as defined by the Board of 
        Governors, in consultation with the Council) to an entity 
        described in paragraph (1).

    (b) Treatment.--If an entity described in subsection (a) ceases to 
be a bank holding company at any time after January 1, 2010, then such 
entity shall be treated as a nonbank financial company supervised by the 
Board of Governors, as if the Council had made a determination under 
section 113 with respect to that entity.
    (c) <<NOTE: Deadlines.>> Appeal.--
            (1) Request for hearing.--An entity may request, in writing, 
        an opportunity for a written or oral hearing before the Council 
        to appeal its treatment as a nonbank financial company 
        supervised by the Board of Governors in accordance with this 
        section. Upon receipt of the request, the Council shall fix a 
        time (not later than 30 days after the date of receipt of the 
        request) and place at which such entity may appear, personally 
        or through counsel, to submit written materials (or, at the sole 
        discretion of the Council, oral testimony and oral argument).
            (2) Decision.--
                    (A) Proposed decision.--A Council decision to grant 
                an appeal under this subsection shall be made by a vote 
                of not fewer than \2/3\ of the voting members then 
                serving, including an affirmative vote by the 
                Chairperson. Not <<NOTE: Reports.>> later than 60 days 
                after the date of a hearing under paragraph (1), the 
                Council shall submit a report to, and may testify 
                before, the Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on Financial 
                Services of the House of Representatives on the proposed 
                decision of the Council regarding an appeal under 
                paragraph (1), which report shall include a statement of 
                the basis for the proposed decision of the Council.
                    (B) Notice of final decision.--The Council shall 
                notify the subject entity of the final decision of the 
                Council regarding an appeal under paragraph (1), which 
                notice shall contain a statement of the basis for the 
                final decision of the Council, not later than 60 days 
                after the later of--
                          (i) the date of the submission of the report 
                      under subparagraph (A); or
                          (ii) if, not later than 1 year after the date 
                      of submission of the report under subparagraph 
                      (A), the Committee on Banking, Housing, and Urban 
                      Affairs of the Senate or the Committee on 
                      Financial Services of the House of Representatives 
                      holds one or more hearings regarding such report, 
                      the date of the last such hearing.
                    (C) Considerations.--In making a decision regarding 
                an appeal under paragraph (1), the Council shall 
                consider whether the company meets the standards under 
                section 113(a) or 113(b), as applicable, and the 
                definition of the

[[Page 124 STAT. 1408]]

                term ``nonbank financial company'' under section 102. 
                The decision of the Council shall be final, subject to 
                the review under paragraph (3).
            (3) Review.--If the Council denies an appeal under this 
        subsection, the Council shall, not less frequently than 
        annually, review and reevaluate the decision.
SEC. 118. <<NOTE: 12 USC 5328.>> COUNCIL FUNDING.

    Any expenses of the Council shall be treated as expenses of, and 
paid by, the Office of Financial Research.
SEC. 119. <<NOTE: 12 USC 5329.>> RESOLUTION OF SUPERVISORY 
                        JURISDICTIONAL DISPUTES AMONG MEMBER 
                        AGENCIES.

    (a) Request for Council Recommendation.--The Council shall seek to 
resolve a dispute among 2 or more member agencies, if--
            (1) a member agency has a dispute with another member agency 
        about the respective jurisdiction over a particular bank holding 
        company, nonbank financial company, or financial activity or 
        product (excluding matters for which another dispute mechanism 
        specifically has been provided under title X);
            (2) the Council determines that the disputing agencies 
        cannot, after a demonstrated good faith effort, resolve the 
        dispute without the intervention of the Council; and
            (3) any of the member agencies involved in the dispute--
                    (A) <<NOTE: Notice.>> provides all other disputants 
                prior notice of the intent to request dispute resolution 
                by the Council; and
                    (B) <<NOTE: Deadline.>> requests in writing, not 
                earlier than 14 days after providing the notice 
                described in subparagraph (A), that the Council seek to 
                resolve the dispute.

    (b) Council Recommendation.--The Council shall seek to resolve each 
dispute described in subsection (a)--
            (1) within a reasonable time after receiving the dispute 
        resolution request;
            (2) after consideration of relevant information provided by 
        each agency party to the dispute; and
            (3) by agreeing with 1 of the disputants regarding the 
        entirety of the matter, or by determining a compromise position.

    (c) Form of Recommendation.--Any Council recommendation under this 
section shall--
            (1) be in writing;
            (2) include an explanation of the reasons therefor; and
            (3) be approved by the affirmative vote of \2/3\ of the 
        voting members of the Council then serving.

    (d) Nonbinding Effect.--Any recommendation made by the Council under 
subsection (c) shall not be binding on the Federal agencies that are 
parties to the dispute.
SEC. 120. <<NOTE: 12 USC 5330.>> ADDITIONAL STANDARDS APPLICABLE 
                        TO ACTIVITIES OR PRACTICES FOR FINANCIAL 
                        STABILITY PURPOSES.

    (a) In General.--The Council may provide for more stringent 
regulation of a financial activity by issuing recommendations to the 
primary financial regulatory agencies to apply new or heightened 
standards and safeguards, including standards enumerated in section 115, 
for a financial activity or practice conducted by bank holding companies 
or nonbank financial companies under their respective jurisdictions, if 
the Council determines that the

[[Page 124 STAT. 1409]]

conduct, scope, nature, size, scale, concentration, or 
interconnectedness of such activity or practice could create or increase 
the risk of significant liquidity, credit, or other problems spreading 
among bank holding companies and nonbank financial companies, financial 
markets of the United States, or low-income, minority, or underserved 
communities.
    (b) Procedure for Recommendations to Regulators.--
            (1) Notice and opportunity for comment.--
        The <<NOTE: Consultation. Public comments.>> Council shall 
        consult with the primary financial regulatory agencies and 
        provide notice to the public and opportunity for comment for any 
        proposed recommendation that the primary financial regulatory 
        agencies apply new or heightened standards and safeguards for a 
        financial activity or practice.
            (2) Criteria.--The new or heightened standards and 
        safeguards for a financial activity or practice recommended 
        under paragraph (1)--
                    (A) shall take costs to long-term economic growth 
                into account; and
                    (B) may include prescribing the conduct of the 
                activity or practice in specific ways (such as by 
                limiting its scope, or applying particular capital or 
                risk management requirements to the conduct of the 
                activity) or prohibiting the activity or practice.

    (c) Implementation of Recommended Standards.--
            (1) Role of primary financial regulatory agency.--
                    (A) In general.--Each primary financial regulatory 
                agency may impose, require reports regarding, examine 
                for compliance with, and enforce standards in accordance 
                with this section with respect to those entities for 
                which it is the primary financial regulatory agency.
                    (B) Rule of construction.--The authority under this 
                paragraph is in addition to, and does not limit, any 
                other authority of a primary financial regulatory 
                agency. Compliance by an entity with actions taken by a 
                primary financial regulatory agency under this section 
                shall be enforceable in accordance with the statutes 
                governing the respective jurisdiction of the primary 
                financial regulatory agency over the entity, as if the 
                agency action were taken under those statutes.
            (2) Imposition of standards.--
        The <<NOTE: Deadline.>> primary financial regulatory agency 
        shall impose the standards recommended by the Council in 
        accordance with subsection (a), or similar standards that the 
        Council deems acceptable, or shall explain in writing to the 
        Council, not later than 90 days after the date on which the 
        Council issues the recommendation, why the agency has determined 
        not to follow the recommendation of the Council.

    (d) Report to Congress.--The Council shall report to Congress on--
            (1) any recommendations issued by the Council under this 
        section;
            (2) the implementation of, or failure to implement, such 
        recommendation on the part of a primary financial regulatory 
        agency; and
            (3) in any case in which no primary financial regulatory 
        agency exists for the nonbank financial company conducting 
        financial activities or practices referred to in subsection (a),

[[Page 124 STAT. 1410]]

        recommendations for legislation that would prevent such 
        activities or practices from threatening the stability of the 
        financial system of the United States.

    (e) Effect of Rescission of Identification.--
            (1) Notice.--The Council may recommend to the relevant 
        primary financial regulatory agency that a financial activity or 
        practice no longer requires any standards or safeguards 
        implemented under this section.
            (2) Determination of primary financial regulatory agency to 
        continue.--
                    (A) In general.--Upon receipt of a recommendation 
                under paragraph (1), a primary financial regulatory 
                agency that has imposed standards under this section 
                shall determine whether such standards should remain in 
                effect.
                    (B) Appeal process.--
                Each <<NOTE: Regulations.>> primary financial regulatory 
                agency that has imposed standards under this section 
                shall promulgate regulations to establish a procedure 
                under which entities under its jurisdiction may appeal a 
                determination by such agency under this paragraph that 
                standards imposed under this section should remain in 
                effect.
SEC. 121. <<NOTE: 12 USC 5331.>> MITIGATION OF RISKS TO FINANCIAL 
                        STABILITY.

    (a) Mitigatory Actions.--If the Board of Governors determines that a 
bank holding company with total consolidated assets of $50,000,000,000 
or more, or a nonbank financial company supervised by the Board of 
Governors, poses a grave threat to the financial stability of the United 
States, the Board of Governors, upon an affirmative vote of not fewer 
than \2/3\ of the voting members of the Council then serving, shall--
            (1) limit the ability of the company to merge with, acquire, 
        consolidate with, or otherwise become affiliated with another 
        company;
            (2) restrict the ability of the company to offer a financial 
        product or products;
            (3) require the company to terminate one or more activities;
            (4) impose conditions on the manner in which the company 
        conducts 1 or more activities; or
            (5) if the Board of Governors determines that the actions 
        described in paragraphs (1) through (4) are inadequate to 
        mitigate a threat to the financial stability of the United 
        States in its recommendation, require the company to sell or 
        otherwise transfer assets or off-balance-sheet items to 
        unaffiliated entities.

    (b) Notice <<NOTE: Deadlines.>> and Hearing.--
            (1) In general.--The Board of Governors, in consultation 
        with the Council, shall provide to a company described in 
        subsection (a) written notice that such company is being 
        considered for mitigatory action pursuant to this section, 
        including an explanation of the basis for, and description of, 
        the proposed mitigatory action.
            (2) Hearing.--Not later than 30 days after the date of 
        receipt of notice under paragraph (1), the company may request, 
        in writing, an opportunity for a written or oral hearing before 
        the Board of Governors to contest the proposed mitigatory 
        action. Upon receipt of a timely request, the Board of Governors 
        shall fix a time (not later than 30 days after the date of

[[Page 124 STAT. 1411]]

        receipt of the request) and place at which such company may 
        appear, personally or through counsel, to submit written 
        materials (or, at the discretion of the Board of Governors, in 
        consultation with the Council, oral testimony and oral 
        argument).
            (3) Decision.--Not later than 60 days after the date of a 
        hearing under paragraph (2), or not later than 60 days after the 
        provision of a notice under paragraph (1) if no hearing was 
        held, the Board of Governors shall notify the company of the 
        final decision of the Board of Governors, including the results 
        of the vote of the Council, as described in subsection (a).

    (c) Factors for Consideration.--The Board of Governors and the 
Council shall take into consideration the factors set forth in 
subsection (a) or (b) of section 113, as applicable, in making any 
determination under subsection (a).
    (d) Application to Foreign Financial Companies.--The Board of 
Governors may prescribe regulations regarding the application of this 
section to foreign nonbank financial companies supervised by the Board 
of Governors and foreign-based bank holding companies--
            (1) giving due regard to the principle of national treatment 
        and equality of competitive opportunity; and
            (2) taking into account the extent to which the foreign 
        nonbank financial company or foreign-based bank holding company 
        is subject on a consolidated basis to home country standards 
        that are comparable to those applied to financial companies in 
        the United States.
SEC. 122. <<NOTE: 12 USC 5332.>> GAO AUDIT OF COUNCIL.

    (a) Authority To Audit.--The Comptroller General of the United 
States may audit the activities of--
            (1) the Council; and
            (2) any person or entity acting on behalf of or under the 
        authority of the Council, to the extent that such activities 
        relate to work for the Council by such person or entity.

    (b) Access <<NOTE: Records.>> to Information.--
            (1) In general.--Notwithstanding any other provision of law, 
        the Comptroller General shall, upon request and at such 
        reasonable time and in such reasonable form as the Comptroller 
        General may request, have access to--
                    (A) any records or other information under the 
                control of or used by the Council;
                    (B) any records or other information under the 
                control of a person or entity acting on behalf of or 
                under the authority of the Council, to the extent that 
                such records or other information is relevant to an 
                audit under subsection (a); and
                    (C) the officers, directors, employees, financial 
                advisors, staff, working groups, and agents and 
                representatives of the Council (as related to the 
                activities on behalf of the Council of such agent or 
                representative), at such reasonable times as the 
                Comptroller General may request.
            (2) Copies.--The Comptroller General may make and retain 
        copies of such books, accounts, and other records, access to 
        which is granted under this section, as the Comptroller General 
        considers appropriate.

[[Page 124 STAT. 1412]]

SEC. 123. STUDY <<NOTE: 12 USC 5333.>> OF THE EFFECTS OF SIZE AND 
                        COMPLEXITY OF FINANCIAL INSTITUTIONS ON 
                        CAPITAL MARKET EFFICIENCY AND ECONOMIC 
                        GROWTH.

    (a) Study Required.--
            (1) In general.--The Chairperson of the Council shall carry 
        out a study of the economic impact of possible financial 
        services regulatory limitations intended to reduce systemic 
        risk. Such study shall <<NOTE: Cost estimate.>> estimate the 
        benefits and costs on the efficiency of capital markets, on the 
        financial sector, and on national economic growth, of--
                    (A) explicit or implicit limits on the maximum size 
                of banks, bank holding companies, and other large 
                financial institutions;
                    (B) limits on the organizational complexity and 
                diversification of large financial institutions;
                    (C) requirements for operational separation between 
                business units of large financial institutions in order 
                to expedite resolution in case of failure;
                    (D) limits on risk transfer between business units 
                of large financial institutions;
                    (E) requirements to carry contingent capital or 
                similar mechanisms;
                    (F) limits on commingling of commercial and 
                financial activities by large financial institutions;
                    (G) segregation requirements between traditional 
                financial activities and trading or other high-risk 
                operations in large financial institutions; and
                    (H) other limitations on the activities or structure 
                of large financial institutions that may be useful to 
                limit systemic risk.
            (2) Recommendations.--The study required by this section 
        shall include recommendations for the optimal structure of any 
        limits considered in subparagraphs (A) through (E), in order to 
        maximize their effectiveness and minimize their economic impact.

    (b) Report.--Not later than the end of the 180-day period beginning 
on the date of enactment of this title, and not later than every 5 years 
thereafter, the Chairperson shall issue a report to the Congress 
containing any findings and determinations made in carrying out the 
study required under subsection (a).

                Subtitle B--Office of Financial Research

SEC. 151. <<NOTE: 12 USC 5341.>> DEFINITIONS.

    For purposes of this subtitle--
            (1) the terms ``Office'' and ``Director'' mean the Office of 
        Financial Research established under this subtitle and the 
        Director thereof, respectively;
            (2) the term ``financial company'' has the same meaning as 
        in title II, and includes an insured depository institution and 
        an insurance company;
            (3) the term ``Data Center'' means the data center 
        established under section 154;
            (4) the term ``Research and Analysis Center'' means the 
        research and analysis center established under section 154;

[[Page 124 STAT. 1413]]

            (5) the term ``financial transaction data'' means the 
        structure and legal description of a financial contract, with 
        sufficient detail to describe the rights and obligations between 
        counterparties and make possible an independent valuation;
            (6) the term ``position data''--
                    (A) means data on financial assets or liabilities 
                held on the balance sheet of a financial company, where 
                positions are created or changed by the execution of a 
                financial transaction; and
                    (B) includes information that identifies 
                counterparties, the valuation by the financial company 
                of the position, and information that makes possible an 
                independent valuation of the position;
            (7) the term ``financial contract'' means a legally binding 
        agreement between 2 or more counterparties, describing rights 
        and obligations relating to the future delivery of items of 
        intrinsic or extrinsic value among the counterparties; and
            (8) the term ``financial instrument'' means a financial 
        contract in which the terms and conditions are publicly 
        available, and the roles of one or more of the counterparties 
        are assignable without the consent of any of the other 
        counterparties (including common stock of a publicly traded 
        company, government bonds, or exchange traded futures and 
        options contracts).
SEC. 152. <<NOTE: 12 USC 5342.>> OFFICE OF FINANCIAL RESEARCH 
                        ESTABLISHED.

    (a) Establishment.--There is established within the Department of 
the Treasury the Office of Financial Research.
    (b) Director.--
            (1) In general.--
        The <<NOTE: President. Appointment.>> Office shall be headed by 
        a Director, who shall be appointed by the President, by and with 
        the advice and consent of the Senate.
            (2) Term of service.--The Director shall serve for a term of 
        6 years, except that, in the event that a successor is not 
        nominated and confirmed by the end of the term of service of a 
        Director, the Director may continue to serve until such time as 
        the next Director is appointed and confirmed.
            (3) Executive level.--The Director shall be compensated at 
        Level III of the Executive Schedule.
            (4) Prohibition on dual service.--The individual serving in 
        the position of Director may not, during such service, also 
        serve as the head of any financial regulatory agency.
            (5) Responsibilities, duties, and authority.--The Director 
        shall have sole discretion in the manner in which the Director 
        fulfills the responsibilities and duties and exercises the 
        authorities described in this subtitle.

    (c) Budget.--The Director, in consultation with the Chairperson, 
shall establish the annual budget of the Office.
    (d) Office Personnel.--
            (1) In general.--The Director, in consultation with the 
        Chairperson, may fix the number of, and appoint and direct, all 
        employees of the Office.
            (2) Compensation.--The Director, in consultation with the 
        Chairperson, shall fix, adjust, and administer the pay for all 
        employees of the Office, without regard to chapter 51 or 
        subchapter III of chapter 53 of title 5, United States Code, 
        relating to classification of positions and General Schedule pay 
        rates.

[[Page 124 STAT. 1414]]

            (3) Comparability.--Section 1206(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 1833b(a)) is amended--
                    (A) by striking ``Finance Board,'' and inserting 
                ``Finance Board, the Office of Financial Research, and 
                the Bureau of Consumer Financial Protection''; and
                    (B) by striking ``and the Office of Thrift 
                Supervision,''.
            (4) Senior executives.--Section 3132(a)(1)(D) of title 5, 
        United States Code, is amended by striking ``and the National 
        Credit Union Administration;'' and inserting ``the National 
        Credit Union Administration, the Bureau of Consumer Financial 
        Protection, and the Office of Financial Research;''.

    (e) Assistance From Federal Agencies.--Any department or agency of 
the United States may provide to the Office and any special advisory, 
technical, or professional committees appointed by the Office, such 
services, funds, facilities, staff, and other support services as the 
Office may determine advisable. Any Federal Government employee may be 
detailed to the Office without reimbursement, and such detail shall be 
without interruption or loss of civil service status or privilege.
    (f) Procurement of Temporary and Intermittent Services.--The 
Director may procure temporary and intermittent services under section 
3109(b) of title 5, United States Code, at rates for individuals which 
do not exceed the daily equivalent of the annual rate of basic pay 
prescribed for Level V of the Executive Schedule under section 5316 of 
such title.
    (g) Post-employment Prohibitions.--
The <<NOTE: Regulations.>> Secretary, with the concurrence of the 
Director of the Office of Government Ethics, shall issue regulations 
prohibiting the Director and any employee of the Office who has had 
access to the transaction or position data maintained by the Data Center 
or other business confidential information about financial entities 
required to report to the Office from being employed by or providing 
advice or consulting services to a financial company, for a period of 1 
year after last having had access in the course of official duties to 
such transaction or position data or business confidential information, 
regardless of whether that entity is required to report to the Office. 
For employees whose access to business confidential information was 
limited, the regulations may provide, on a case-by-case basis, for a 
shorter period of post-employment prohibition, provided that the shorter 
period does not compromise business confidential information.

    (h) Technical and Professional Advisory Committees.--The Office, in 
consultation with the Chairperson, may appoint such special advisory, 
technical, or professional committees as may be useful in carrying out 
the functions of the Office, and the members of such committees may be 
staff of the Office, or other persons, or both.
    (i) Fellowship Program.--The Office, in consultation with the 
Chairperson, may establish and maintain an academic and professional 
fellowship program, under which qualified academics and professionals 
shall be invited to spend not longer than 2 years at the Office, to 
perform research and to provide advanced training for Office personnel.
    (j) Executive Schedule Compensation.--Section 5314 of title 5, 
United States Code, is amended by adding at the end the following new 
item:
            ``Director of the Office of Financial Research.''.

[[Page 124 STAT. 1415]]

SEC. 153. <<NOTE: 12 USC 5343.>> PURPOSE AND DUTIES OF THE OFFICE.

    (a) Purpose and Duties.--The purpose of the Office is to support the 
Council in fulfilling the purposes and duties of the Council, as set 
forth in subtitle A, and to support member agencies, by--
            (1) collecting data on behalf of the Council, and providing 
        such data to the Council and member agencies;
            (2) standardizing the types and formats of data reported and 
        collected;
            (3) performing applied research and essential long-term 
        research;
            (4) developing tools for risk measurement and monitoring;
            (5) performing other related services;
            (6) making the results of the activities of the Office 
        available to financial regulatory agencies; and
            (7) assisting such member agencies in determining the types 
        and formats of data authorized by this Act to be collected by 
        such member agencies.

    (b) Administrative Authority.--The Office may--
            (1) share data and information, including software developed 
        by the Office, with the Council, member agencies, and the Bureau 
        of Economic Analysis, which shared data, information, and 
        software--
                    (A) shall be maintained with at least the same level 
                of security as is used by the Office; and
                    (B) may not be shared with any individual or entity 
                without the permission of the Council;
            (2) sponsor and conduct research projects; and
            (3) assist, on a reimbursable basis, with financial analyses 
        undertaken at the request of other Federal agencies that are not 
        member agencies.

    (c) Rulemaking Authority.--
            (1) Scope.--The Office, in consultation with the 
        Chairperson, shall issue rules, regulations, and orders only to 
        the extent necessary to carry out the purposes and duties 
        described in paragraphs (1), (2), and (7) of subsection (a).
            (2) Standardization.--Member agencies, in consultation with 
        the Office, shall implement regulations promulgated by the 
        Office under paragraph (1) to standardize the types and formats 
        of data reported and collected on behalf of the Council, as 
        described in subsection (a)(2). If <<NOTE: Time period.>> a 
        member agency fails to implement such regulations prior to the 
        expiration of the 3-year period following the date of 
        publication of final regulations, the Office, in consultation 
        with the Chairperson, may implement such regulations with 
        respect to the financial entities under the jurisdiction of the 
        member agency. This paragraph shall not supersede or interfere 
        with the independent authority of a member agency under other 
        law to collect data, in such format and manner as the member 
        agency requires.

    (d) Testimony.--
            (1) In general.--The <<NOTE: Reports.>> Director of the 
        Office shall report to and testify before the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives 
        annually on the activities of the Office, including the work of 
        the Data Center and the Research and Analysis Center, and the 
        assessment of the

[[Page 124 STAT. 1416]]

        Office of significant financial market developments and 
        potential emerging threats to the financial stability of the 
        United States.
            (2) No prior review.--No officer or agency of the United 
        States shall have any authority to require the Director to 
        submit the testimony required under paragraph (1) or other 
        congressional testimony to any officer or agency of the United 
        States for approval, comment, or review prior to the submission 
        of such testimony. Any such testimony to Congress shall include 
        a statement that the views expressed therein are those of the 
        Director and do not necessarily represent the views of the 
        President.

    (e) Additional Reports.--The Director may provide additional reports 
to Congress concerning the financial stability of the United States. The 
Director <<NOTE: Notification.>> shall notify the Council of any such 
additional reports provided to Congress.

    (f) Subpoena.--
            (1) In general.--The Director may require from a financial 
        company, by subpoena, the production of the data requested under 
        subsection (a)(1) and section 154(b)(1), but only upon a written 
        finding by the Director that--
                    (A) such data is required to carry out the functions 
                described under this subtitle; and
                    (B) the Office has coordinated with the relevant 
                primary financial regulatory agency, as required under 
                section 154(b)(1)(B)(ii).
            (2) Format.--Subpoenas under paragraph (1) shall bear the 
        signature of the Director, and shall be served by any person or 
        class of persons designated by the Director for that purpose.
            (3) Enforcement.--In the case of contumacy or failure to 
        obey a subpoena, the subpoena shall be enforceable by order of 
        any appropriate district court of the United States. Any failure 
        to obey the order of the court may be punished by the court as a 
        contempt of court.
SEC. 154. <<NOTE: 12 USC 5344.>> ORGANIZATIONAL STRUCTURE; 
                        RESPONSIBILITIES OF PRIMARY PROGRAMMATIC 
                        UNITS.

    (a) In General.--There are established within the Office, to carry 
out the programmatic responsibilities of the Office--
            (1) the Data Center; and
            (2) the Research and Analysis Center.

    (b) Data Center.--
            (1) General duties.--
                    (A) Data collection.--The Data Center, on behalf of 
                the Council, shall collect, validate, and maintain all 
                data necessary to carry out the duties of the Data 
                Center, as described in this subtitle. The data 
                assembled shall be obtained from member agencies, 
                commercial data providers, publicly available data 
                sources, and financial entities under subparagraph (B).
                    (B) Authority.--
                          (i) In general.--The Office may, as determined 
                      by the Council or by the Director in consultation 
                      with the Council, require the submission of 
                      periodic and other reports from any financial 
                      company for the purpose of assessing the extent to 
                      which a financial

[[Page 124 STAT. 1417]]

                      activity or financial market in which the 
                      financial company participates, or the financial 
                      company itself, poses a threat to the financial 
                      stability of the United States.
                          (ii) Mitigation of report burden.--Before 
                      requiring the submission of a report from any 
                      financial company that is regulated by a member 
                      agency, any primary financial regulatory agency, a 
                      foreign supervisory authority, or the Office shall 
                      coordinate with such agencies or authority, and 
                      shall, whenever possible, rely on information 
                      available from such agencies or authority.
                          (iii) Collection of financial transaction and 
                      position data.--The Office shall collect, on a 
                      schedule determined by the Director, in 
                      consultation with the Council, financial 
                      transaction data and position data from financial 
                      companies.
                    (C) Rulemaking.--The Office shall promulgate 
                regulations pursuant to subsections (a)(1), (a)(2), 
                (a)(7), and (c)(1) of section 153 regarding the type and 
                scope of the data to be collected by the Data Center 
                under this paragraph.
            (2) Responsibilities.--
                    (A) Publication.--The <<NOTE: Public 
                information.>> Data Center shall prepare and publish, in 
                a manner that is easily accessible to the public--
                          (i) a financial company reference database;
                          (ii) a financial instrument reference 
                      database; and
                          (iii) formats and standards for Office data, 
                      including standards for reporting financial 
                      transaction and position data to the Office.
                    (B) Confidentiality.--The Data Center shall not 
                publish any confidential data under subparagraph (A).
            (3) Information security.--The Director shall ensure that 
        data collected and maintained by the Data Center are kept secure 
        and protected against unauthorized disclosure.
            (4) Catalog of financial entities and instruments.--The Data 
        Center shall maintain a catalog of the financial entities and 
        instruments reported to the Office.
            (5) Availability to the council and member agencies.--The 
        Data Center shall make data collected and maintained by the Data 
        Center available to the Council and member agencies, as 
        necessary to support their regulatory responsibilities.
            (6) Other authority.--The <<NOTE: Public 
        information.>> Office shall, after consultation with the member 
        agencies, provide certain data to financial industry 
        participants and to the general public to increase market 
        transparency and facilitate research on the financial system, to 
        the extent that intellectual property rights are not violated, 
        business confidential information is properly protected, and the 
        sharing of such information poses no significant threats to the 
        financial system of the United States.

    (c) Research and Analysis Center.--
            (1) General duties.--The Research and Analysis Center, on 
        behalf of the Council, shall develop and maintain independent 
        analytical capabilities and computing resources--
                    (A) to develop and maintain metrics and reporting 
                systems for risks to the financial stability of the 
                United States;

[[Page 124 STAT. 1418]]

                    (B) to monitor, investigate, and report on changes 
                in systemwide risk levels and patterns to the Council 
                and Congress;
                    (C) to conduct, coordinate, and sponsor research to 
                support and improve regulation of financial entities and 
                markets;
                    (D) to evaluate and report on stress tests or other 
                stability-related evaluations of financial entities 
                overseen by the member agencies;
                    (E) to maintain expertise in such areas as may be 
                necessary to support specific requests for advice and 
                assistance from financial regulators;
                    (F) to investigate disruptions and failures in the 
                financial markets, report findings, and make 
                recommendations to the Council based on those findings;
                    (G) to conduct studies and provide advice on the 
                impact of policies related to systemic risk; and
                    (H) to promote best practices for financial risk 
                management.

    (d) Reporting Responsibilities.--
            (1) Required reports.--Not later than 2 years after the date 
        of enactment of this Act, and not later than 120 days after the 
        end of each fiscal year thereafter, the Office shall prepare and 
        submit a report to Congress.
            (2) Content.--Each report required by this subsection shall 
        assess the state of the United States financial system, 
        including--
                    (A) an analysis of any threats to the financial 
                stability of the United States;
                    (B) the status of the efforts of the Office in 
                meeting the mission of the Office; and
                    (C) key findings from the research and analysis of 
                the financial system by the Office.
SEC. <<NOTE: 12 USC 5345.>> 155. FUNDING.

    (a) Financial Research Fund.--
            (1) Fund established.--There is established in the Treasury 
        of the United States a separate fund to be known as the 
        ``Financial Research Fund''.
            (2) Fund receipts.--All amounts provided to the Office under 
        subsection (c), and all assessments that the Office receives 
        under subsection (d) shall be deposited into the Financial 
        Research Fund.
            (3) Investments authorized.--
                    (A) Amounts in fund may be invested.--The Director 
                may request the Secretary to invest the portion of the 
                Financial Research Fund that is not, in the judgment of 
                the Director, required to meet the needs of the Office.
                    (B) Eligible investments.--Investments shall be made 
                by the Secretary in obligations of the United States or 
                obligations that are guaranteed as to principal and 
                interest by the United States, with maturities suitable 
                to the needs of the Financial Research Fund, as 
                determined by the Director.
            (4) Interest and proceeds credited.--The interest on, and 
        the proceeds from the sale or redemption of, any obligations

[[Page 124 STAT. 1419]]

        held in the Financial Research Fund shall be credited to and 
        form a part of the Financial Research Fund.

    (b) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, or 
        credited to the Financial Research Fund shall be immediately 
        available to the Office, and shall remain available until 
        expended, to pay the expenses of the Office in carrying out the 
        duties and responsibilities of the Office.
            (2) Fees, assessments, and other funds not government 
        funds.--Funds obtained by, transferred to, or credited to the 
        Financial Research Fund shall not be construed to be Government 
        funds or appropriated moneys.
            (3) Amounts not subject to apportionment.--Notwithstanding 
        any other provision of law, amounts in the Financial Research 
        Fund shall not be subject to apportionment for purposes of 
        chapter 15 of title 31, United States Code, or under any other 
        authority, or for any other purpose.

    (c) Interim Funding.--During <<NOTE: Time period.>> the 2-year 
period following the date of enactment of this Act, the Board of 
Governors shall provide to the Office an amount sufficient to cover the 
expenses of the Office.

    (d) Permanent Self-funding.--Beginning <<NOTE: Effective 
date. Regulations. Assessments.>> 2 years after the date of enactment of 
this Act, the Secretary shall establish, by regulation, and with the 
approval of the Council, an assessment schedule, including the 
assessment base and rates, applicable to bank holding companies with 
total consolidated assets of 50,000,000,000 or greater and nonbank 
financial companies supervised by the Board of Governors, that takes 
into account differences among such companies, based on the 
considerations for establishing the prudential standards under section 
115, to collect assessments equal to the total expenses of the Office.
SEC. 156. <<NOTE: 12 USC 5346.>> TRANSITION OVERSIGHT.

    (a) Purpose.--The purpose of this section is to ensure that the 
Office--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and benefits 
        programs.

    (b) Reporting Requirement.--
            (1) In general.--The Office shall submit an annual report to 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives that includes the plans described in paragraph 
        (2).
            (2) Plans.--The plans described in this paragraph are as 
        follows:
                    (A) Training and workforce development plan.--The 
                Office shall submit a training and workforce development 
                plan that includes, to the extent practicable--
                          (i) identification of skill and technical 
                      expertise needs and actions taken to meet those 
                      requirements;
                          (ii) steps taken to foster innovation and 
                      creativity;
                          (iii) leadership development and succession 
                      planning; and
                          (iv) effective use of technology by employees.

[[Page 124 STAT. 1420]]

                    (B) Workplace flexibility plan.--The Office shall 
                submit a workforce flexibility plan that includes, to 
                the extent practicable--
                          (i) telework;
                          (ii) flexible work schedules;
                          (iii) phased retirement;
                          (iv) reemployed annuitants;
                          (v) part-time work;
                          (vi) job sharing;
                          (vii) parental leave benefits and childcare 
                      assistance;
                          (viii) domestic partner benefits;
                          (ix) other workplace flexibilities; or
                          (x) any combination of the items described in 
                      clauses (i) through (ix).
                    (C) Recruitment and retention plan.--The Office 
                shall submit a recruitment and retention plan that 
                includes, to the extent practicable, provisions relating 
                to--
                          (i) the steps necessary to target highly 
                      qualified applicant pools with diverse 
                      backgrounds;
                          (ii) streamlined employment application 
                      processes;
                          (iii) the provision of timely notification of 
                      the status of employment applications to 
                      applicants; and
                          (iv) the collection of information to measure 
                      indicators of hiring effectiveness.

    (c) Expiration.--The reporting requirement under subsection (b) 
shall terminate 5 years after the date of enactment of this Act.
    (d) Rule of Construction.--Nothing in this section may be construed 
to affect--
            (1) a collective bargaining agreement, as that term is 
        defined in section 7103(a)(8) of title 5, United States Code, 
        that is in effect on the date of enactment of this Act; or
            (2) the rights of employees under chapter 71 of title 5, 
        United States Code.

Subtitle C--Additional Board of Governors Authority for Certain Nonbank 
             Financial Companies and Bank Holding Companies

SEC. 161. <<NOTE: 12 USC 5361.>> REPORTS BY AND EXAMINATIONS OF 
                        NONBANK FINANCIAL COMPANIES BY THE BOARD 
                        OF GOVERNORS.

    (a) Reports.--
            (1) In general.--The Board of Governors may require each 
        nonbank financial company supervised by the Board of Governors, 
        and any subsidiary thereof, to submit reports under oath, to 
        keep the Board of Governors informed as to--
                    (A) the financial condition of the company or 
                subsidiary, systems of the company or subsidiary for 
                monitoring and controlling financial, operating, and 
                other risks, and the extent to which the activities and 
                operations of the company or subsidiary pose a threat to 
                the financial stability of the United States; and
                    (B) compliance by the company or subsidiary with the 
                requirements of this title.

[[Page 124 STAT. 1421]]

            (2) Use of existing reports and information.--In carrying 
        out subsection (a), the Board of Governors shall, to the fullest 
        extent possible, use--
                    (A) reports and supervisory information that a 
                nonbank financial company or subsidiary thereof has been 
                required to provide to other Federal or State regulatory 
                agencies;
                    (B) information otherwise obtainable from Federal or 
                State regulatory agencies;
                    (C) information that is otherwise required to be 
                reported publicly; and
                    (D) externally audited financial statements of such 
                company or subsidiary.
            (3) Availability.--Upon the request of the Board of 
        Governors, a nonbank financial company supervised by the Board 
        of Governors, or a subsidiary thereof, shall promptly provide to 
        the Board of Governors any information described in paragraph 
        (2).

    (b) Examinations.--
            (1) In general.--Subject to paragraph (2), the Board of 
        Governors may examine any nonbank financial company supervised 
        by the Board of Governors and any subsidiary of such company, to 
        inform the Board of Governors of--
                    (A) the nature of the operations and financial 
                condition of the company and such subsidiary;
                    (B) the financial, operational, and other risks of 
                the company or such subsidiary that may pose a threat to 
                the safety and soundness of such company or subsidiary 
                or to the financial stability of the United States;
                    (C) the systems for monitoring and controlling such 
                risks; and
                    (D) compliance by the company or such subsidiary 
                with the requirements of this title.
            (2) Use of examination reports and information.--For 
        purposes of this subsection, the Board of Governors shall, to 
        the fullest extent possible, rely on reports of examination of 
        any subsidiary depository institution or functionally regulated 
        subsidiary made by the primary financial regulatory agency for 
        that subsidiary, and on information described in subsection 
        (a)(2).

    (c) Coordination With Primary Financial Regulatory Agency.--The 
Board of Governors shall--
            (1) <<NOTE: Notice. Consultation.>> provide reasonable 
        notice to, and consult with, the primary financial regulatory 
        agency for any subsidiary before requiring a report or 
        commencing an examination of such subsidiary under this section; 
        and
            (2) avoid duplication of examination activities, reporting 
        requirements, and requests for information, to the fullest 
        extent possible.
SEC. 162. <<NOTE: 12 USC 5362.>> ENFORCEMENT.

    (a) In General.--Except as provided in subsection (b), a nonbank 
financial company supervised by the Board of Governors and any 
subsidiaries of such company (other than any depository institution 
subsidiary) shall be subject to the provisions of subsections (b) 
through (n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 
1818), in the same manner and to the same extent as if the company were 
a bank holding company, as provided

[[Page 124 STAT. 1422]]

in section 8(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(b)(3)).
    (b) Enforcement Authority for Functionally Regulated Subsidiaries.--
            (1) Referral.--If the Board of Governors determines that a 
        condition, practice, or activity of a depository institution 
        subsidiary or functionally regulated subsidiary of a nonbank 
        financial company supervised by the Board of Governors does not 
        comply with the regulations or orders prescribed by the Board of 
        Governors under this Act, or otherwise poses a threat to the 
        financial stability of the United States, the Board of Governors 
        may recommend, in writing, to the primary financial regulatory 
        agency for the subsidiary that such agency initiate a 
        supervisory action or enforcement proceeding. The recommendation 
        shall be accompanied by a written explanation of the concerns 
        giving rise to the recommendation.
            (2) Back-up authority of the board of governors.--If, during 
        the 60-day period beginning on the date on which the primary 
        financial regulatory agency receives a recommendation under 
        paragraph (1), the primary financial regulatory agency does not 
        take supervisory or enforcement action against a subsidiary that 
        is acceptable to the Board of Governors, the Board of Governors 
        (upon a vote of its members) may take the recommended 
        supervisory or enforcement action, as if the subsidiary were a 
        bank holding company subject to supervision by the Board of 
        Governors.
SEC. <<NOTE: 12 USC 5363.>> 163. ACQUISITIONS.

    (a) Acquisitions of Banks; Treatment as a Bank Holding Company.--For 
purposes of section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 
1842), a nonbank financial company supervised by the Board of Governors 
shall be deemed to be, and shall be treated as, a bank holding company.
    (b) Acquisition of Nonbank Companies.--
            (1) Prior notice for large acquisitions.--Notwithstanding 
        section 4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1843(k)(6)(B)), a bank holding company with total 
        consolidated assets equal to or greater than $50,000,000,000 or 
        a nonbank financial company supervised by the Board of Governors 
        shall not acquire direct or indirect ownership or control of any 
        voting shares of any company (other than an insured depository 
        institution) that is engaged in activities described in section 
        4(k) of the Bank Holding Company Act of 1956 having total 
        consolidated assets of $10,000,000,000 or more, without 
        providing written notice to the Board of Governors in advance of 
        the transaction.
            (2) Exemptions.--The prior notice requirement in paragraph 
        (1) shall not apply with regard to the acquisition of shares 
        that would qualify for the exemptions in section 4(c) or section 
        4(k)(4)(E) of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1843(c) and (k)(4)(E)).
            (3) Notice procedures.--The <<NOTE: Applicability.>> notice 
        procedures set forth in section 4(j)(1) of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1843(j)(1)), without regard to 
        section 4(j)(3) of that Act, shall apply to an acquisition of 
        any company (other than an insured depository institution) by a 
        bank holding company with total consolidated assets equal to or 
        greater than

[[Page 124 STAT. 1423]]

        $50,000,000,000 or a nonbank financial company supervised by the 
        Board of Governors, as described in paragraph (1), including any 
        such company engaged in activities described in section 4(k) of 
        that Act.
            (4) Standards for review.--In addition to the standards 
        provided in section 4(j)(2) of the Bank Holding Company Act of 
        1956 (12 U.S.C. 1843(j)(2)), the Board of Governors shall 
        consider the extent to which the proposed acquisition would 
        result in greater or more concentrated risks to global or United 
        States financial stability or the United States economy.
            (5) Hart-Scott-Rodino filing requirement.--Solely for 
        purposes of section 7A(c)(8) of the Clayton Act (15 U.S.C. 
        18a(c)(8)), the transactions subject to the requirements of 
        paragraph (1) shall be treated as if Board of Governors approval 
        is not required.
SEC. <<NOTE: 12 USC 5364.>> 164. PROHIBITION AGAINST MANAGEMENT 
                        INTERLOCKS BETWEEN CERTAIN FINANCIAL 
                        COMPANIES.

    A nonbank financial company supervised by the Board of Governors 
shall be treated as a bank holding company for purposes of the 
Depository Institutions Management Interlocks Act (12 U.S.C. 3201 et 
seq.), except that the Board of Governors shall not exercise the 
authority provided in section 7 of that Act (12 U.S.C. 3207) to permit 
service by a management official of a nonbank financial company 
supervised by the Board of Governors as a management official of any 
bank holding company with total consolidated assets equal to or greater 
than $50,000,000,000, or other nonaffiliated nonbank financial company 
supervised by the Board of Governors (other than to provide a temporary 
exemption for interlocks resulting from a merger, acquisition, or 
consolidation).
SEC. 165. <<NOTE: 12 USC 5365.>> ENHANCED SUPERVISION AND 
                        PRUDENTIAL STANDARDS FOR NONBANK FINANCIAL 
                        COMPANIES SUPERVISED BY THE BOARD OF 
                        GOVERNORS AND CERTAIN BANK HOLDING 
                        COMPANIES.

    (a) In General.--
            (1) Purpose.--In order to prevent or mitigate risks to the 
        financial stability of the United States that could arise from 
        the material financial distress or failure, or ongoing 
        activities, of large, interconnected financial institutions, the 
        Board of Governors shall, on its own or pursuant to 
        recommendations by the Council under section 115, establish 
        prudential standards for nonbank financial companies supervised 
        by the Board of Governors and bank holding companies with total 
        consolidated assets equal to or greater than $50,000,000,000 
        that--
                    (A) are more stringent than the standards and 
                requirements applicable to nonbank financial companies 
                and bank holding companies that do not present similar 
                risks to the financial stability of the United States; 
                and
                    (B) increase in stringency, based on the 
                considerations identified in subsection (b)(3).
            (2) Tailored application.--
                    (A) In general.--In prescribing more stringent 
                prudential standards under this section, the Board of 
                Governors may, on its own or pursuant to a 
                recommendation by the Council in accordance with section 
                115, differentiate among companies on an individual 
                basis or by category, taking into consideration their 
                capital structure, riskiness,

[[Page 124 STAT. 1424]]

                complexity, financial activities (including the 
                financial activities of their subsidiaries), size, and 
                any other risk-related factors that the Board of 
                Governors deems appropriate.
                    (B) Adjustment of threshold for application of 
                certain standards.--The Board of Governors may, pursuant 
                to a recommendation by the Council in accordance with 
                section 115, establish an asset threshold above 
                $50,000,000,000 for the application of any standard 
                established under subsections (c) through (g).

    (b) Development of Prudential Standards.--
            (1) In general.--
                    (A) Required standards.--The Board of Governors 
                shall establish prudential standards for nonbank 
                financial companies supervised by the Board of Governors 
                and bank holding companies described in subsection (a), 
                that shall include--
                          (i) risk-based capital requirements and 
                      leverage limits, unless the Board of Governors, in 
                      consultation with the Council, determines that 
                      such requirements are not appropriate for a 
                      company subject to more stringent prudential 
                      standards because of the activities of such 
                      company (such as investment company activities or 
                      assets under management) or structure, in which 
                      case, the Board of Governors shall apply other 
                      standards that result in similarly stringent risk 
                      controls;
                          (ii) liquidity requirements;
                          (iii) overall risk management requirements;
                          (iv) resolution plan and credit exposure 
                      report requirements; and
                          (v) concentration limits.
                    (B) Additional standards authorized.--The Board of 
                Governors may establish additional prudential standards 
                for nonbank financial companies supervised by the Board 
                of Governors and bank holding companies described in 
                subsection (a), that include--
                          (i) a contingent capital requirement;
                          (ii) enhanced public disclosures;
                          (iii) short-term debt limits; and
                          (iv) such other prudential standards as the 
                      Board or Governors, on its own or pursuant to a 
                      recommendation made by the Council in accordance 
                      with section 115, determines are appropriate.
            (2) Standards for foreign financial companies.--In applying 
        the standards set forth in paragraph (1) to any foreign nonbank 
        financial company supervised by the Board of Governors or 
        foreign-based bank holding company, the Board of Governors 
        shall--
                    (A) give due regard to the principle of national 
                treatment and equality of competitive opportunity; and
                    (B) take into account the extent to which the 
                foreign financial company is subject on a consolidated 
                basis to home country standards that are comparable to 
                those applied to financial companies in the United 
                States.
            (3) Considerations.--In prescribing prudential standards 
        under paragraph (1), the Board of Governors shall--

[[Page 124 STAT. 1425]]

                    (A) take into account differences among nonbank 
                financial companies supervised by the Board of Governors 
                and bank holding companies described in subsection (a), 
                based on--
                          (i) the factors described in subsections (a) 
                      and (b) of section 113;
                          (ii) whether the company owns an insured 
                      depository institution;
                          (iii) nonfinancial activities and affiliations 
                      of the company; and
                          (iv) any other risk-related factors that the 
                      Board of Governors determines appropriate;
                    (B) to the extent possible, ensure that small 
                changes in the factors listed in subsections (a) and (b) 
                of section 113 would not result in sharp, discontinuous 
                changes in the prudential standards established under 
                paragraph (1) of this subsection;
                    (C) take into account any recommendations of the 
                Council under section 115; and
                    (D) adapt the required standards as appropriate in 
                light of any predominant line of business of such 
                company, including assets under management or other 
                activities for which particular standards may not be 
                appropriate.
            (4) Consultation.--Before imposing prudential standards or 
        any other requirements pursuant to this section, including 
        notices of deficiencies in resolution plans and more stringent 
        requirements or divestiture orders resulting from such notices, 
        that are likely to have a significant impact on a functionally 
        regulated subsidiary or depository institution subsidiary of a 
        nonbank financial company supervised by the Board of Governors 
        or a bank holding company described in subsection (a), the Board 
        of Governors shall consult with each Council member that 
        primarily supervises any such subsidiary with respect to any 
        such standard or requirement.
            (5) Report.--The Board of Governors shall submit an annual 
        report to Congress regarding the implementation of the 
        prudential standards required pursuant to paragraph (1), 
        including the use of such standards to mitigate risks to the 
        financial stability of the United States.

    (c) Contingent Capital.--
            (1) In general.--Subsequent to submission by the Council of 
        a report to Congress under section 115(c), the Board of 
        Governors may issue regulations that require each nonbank 
        financial company supervised by the Board of Governors and bank 
        holding companies described in subsection (a) to maintain a 
        minimum amount of contingent capital that is convertible to 
        equity in times of financial stress.
            (2) Factors to consider.--In issuing regulations under this 
        subsection, the Board of Governors shall consider--
                    (A) the results of the study undertaken by the 
                Council, and any recommendations of the Council, under 
                section 115(c);
                    (B) an appropriate transition period for 
                implementation of contingent capital under this 
                subsection;
                    (C) the factors described in subsection (b)(3)(A);
                    (D) capital requirements applicable to the nonbank 
                financial company supervised by the Board of Governors

[[Page 124 STAT. 1426]]

                or a bank holding company described in subsection (a), 
                and subsidiaries thereof; and
                    (E) any other factor that the Board of Governors 
                deems appropriate.

    (d) Resolution Plan and Credit Exposure Reports.--
            (1) Resolution plan.--The Board of Governors shall require 
        each nonbank financial company supervised by the Board of 
        Governors and bank holding companies described in subsection (a) 
        to report periodically to the Board of Governors, the Council, 
        and the Corporation the plan of such company for rapid and 
        orderly resolution in the event of material financial distress 
        or failure, which shall include--
                    (A) information regarding the manner and extent to 
                which any insured depository institution affiliated with 
                the company is adequately protected from risks arising 
                from the activities of any nonbank subsidiaries of the 
                company;
                    (B) full descriptions of the ownership structure, 
                assets, liabilities, and contractual obligations of the 
                company;
                    (C) identification of the cross-guarantees tied to 
                different securities, identification of major 
                counterparties, and a process for determining to whom 
                the collateral of the company is pledged; and
                    (D) any other information that the Board of 
                Governors and the Corporation jointly require by rule or 
                order.
            (2) Credit exposure report.--The Board of Governors shall 
        require each nonbank financial company supervised by the Board 
        of Governors and bank holding companies described in subsection 
        (a) to report periodically to the Board of Governors, the 
        Council, and the Corporation on--
                    (A) the nature and extent to which the company has 
                credit exposure to other significant nonbank financial 
                companies and significant bank holding companies; and
                    (B) the nature and extent to which other significant 
                nonbank financial companies and significant bank holding 
                companies have credit exposure to that company.
            (3) Review.--The Board of Governors and the Corporation 
        shall review the information provided in accordance with this 
        subsection by each nonbank financial company supervised by the 
        Board of Governors and bank holding company described in 
        subsection (a).
            (4) Notice of deficiencies.--If the Board of Governors and 
        the Corporation jointly determine, based on their review under 
        paragraph (3), that the resolution plan of a nonbank financial 
        company supervised by the Board of Governors or a bank holding 
        company described in subsection (a) is not credible or would not 
        facilitate an orderly resolution of the company under title 11, 
        United States Code--
                    (A) the Board of Governors and the Corporation shall 
                notify the company of the deficiencies in the resolution 
                plan; and
                    (B) the company shall resubmit the resolution plan 
                within a timeframe determined by the Board of Governors 
                and the Corporation, with revisions demonstrating that 
                the plan is credible and would result in an orderly 
                resolution under title 11, United States Code, including 
                any

[[Page 124 STAT. 1427]]

                proposed changes in business operations and corporate 
                structure to facilitate implementation of the plan.
            (5) Failure to resubmit credible plan.--
                    (A) In general.--If a nonbank financial company 
                supervised by the Board of Governors or a bank holding 
                company described in subsection (a) fails to timely 
                resubmit the resolution plan as required under paragraph 
                (4), with such revisions as are required under 
                subparagraph (B), the Board of Governors and the 
                Corporation may jointly impose more stringent capital, 
                leverage, or liquidity requirements, or restrictions on 
                the growth, activities, or operations of the company, or 
                any subsidiary thereof, until such time as the company 
                resubmits a plan that remedies the deficiencies.
                    (B) Divestiture.--The Board of Governors and the 
                Corporation, in consultation with the Council, may 
                jointly direct a nonbank financial company supervised by 
                the Board of Governors or a bank holding company 
                described in subsection (a), by order, to divest certain 
                assets or operations identified by the Board of 
                Governors and the Corporation, to facilitate an orderly 
                resolution of such company under title 11, United States 
                Code, in the event of the failure of such company, in 
                any case in which--
                          (i) the Board of Governors and the Corporation 
                      have jointly imposed more stringent requirements 
                      on the company pursuant to subparagraph (A); and
                          (ii) the company has failed, within the 2-year 
                      period beginning on the date of the imposition of 
                      such requirements under subparagraph (A), to 
                      resubmit the resolution plan with such revisions 
                      as were required under paragraph (4)(B).
            (6) No limiting effect.--A resolution plan submitted in 
        accordance with this subsection shall not be binding on a 
        bankruptcy court, a receiver appointed under title II, or any 
        other authority that is authorized or required to resolve the 
        nonbank financial company supervised by the Board, any bank 
        holding company, or any subsidiary or affiliate of the 
        foregoing.
            (7) No private right of action.--No private right of action 
        may be based on any resolution plan submitted in accordance with 
        this subsection.
            (8) Rules.--Not <<NOTE: Deadline.>> later than 18 months 
        after the date of enactment of this Act, the Board of Governors 
        and the Corporation shall jointly issue final rules implementing 
        this subsection.

    (e) Concentration Limits.--
            (1) Standards.--In <<NOTE: Regulations.>> order to limit the 
        risks that the failure of any individual company could pose to a 
        nonbank financial company supervised by the Board of Governors 
        or a bank holding company described in subsection (a), the Board 
        of Governors, by regulation, shall prescribe standards that 
        limit such risks.
            (2) Limitation on credit exposure.--The regulations 
        prescribed by the Board of Governors under paragraph (1) shall 
        prohibit each nonbank financial company supervised by the Board 
        of Governors and bank holding company described in subsection 
        (a) from having credit exposure to any unaffiliated company that 
        exceeds 25 percent of the capital stock and surplus (or such 
        lower amount as the Board of Governors may

[[Page 124 STAT. 1428]]

        determine by regulation to be necessary to mitigate risks to the 
        financial stability of the United States) of the company.
            (3) Credit exposure.--For <<NOTE: Definition.>> purposes of 
        paragraph (2), ``credit exposure'' to a company means--
                    (A) all extensions of credit to the company, 
                including loans, deposits, and lines of credit;
                    (B) all repurchase agreements and reverse repurchase 
                agreements with the company, and all securities 
                borrowing and lending transactions with the company, to 
                the extent that such transactions create credit exposure 
                for the nonbank financial company supervised by the 
                Board of Governors or a bank holding company described 
                in subsection (a);
                    (C) all guarantees, acceptances, or letters of 
                credit (including endorsement or standby letters of 
                credit) issued on behalf of the company;
                    (D) all purchases of or investment in securities 
                issued by the company;
                    (E) counterparty credit exposure to the company in 
                connection with a derivative transaction between the 
                nonbank financial company supervised by the Board of 
                Governors or a bank holding company described in 
                subsection (a) and the company; and
                    (F) any other similar transactions that the Board of 
                Governors, by regulation, determines to be a credit 
                exposure for purposes of this section.
            (4) Attribution rule.--For purposes of this subsection, any 
        transaction by a nonbank financial company supervised by the 
        Board of Governors or a bank holding company described in 
        subsection (a) with any person is a transaction with a company, 
        to the extent that the proceeds of the transaction are used for 
        the benefit of, or transferred to, that company.
            (5) Rulemaking.--The Board of Governors may issue such 
        regulations and orders, including definitions consistent with 
        this section, as may be necessary to administer and carry out 
        this subsection.
            (6) Exemptions.--This subsection shall not apply to any 
        Federal home loan bank. The Board of Governors may, by 
        regulation or order, exempt transactions, in whole or in part, 
        from the definition of the term ``credit exposure'' for purposes 
        of this subsection, if the Board of Governors finds that the 
        exemption is in the public interest and is consistent with the 
        purpose of this subsection.
            (7) Transition period.--
                    (A) In general.--This <<NOTE: Effective 
                date.>> subsection and any regulations and orders of the 
                Board of Governors under this subsection shall not be 
                effective until 3 years after the date of enactment of 
                this Act.
                    (B) Extension authorized.--The Board of Governors 
                may extend the period specified in subparagraph (A) for 
                not longer than an additional 2 years.

    (f) Enhanced Public Disclosures.--The Board of Governors may 
prescribe, by regulation, periodic public disclosures by nonbank 
financial companies supervised by the Board of Governors and bank 
holding companies described in subsection (a) in order to support market 
evaluation of the risk profile, capital adequacy, and risk management 
capabilities thereof.

[[Page 124 STAT. 1429]]

    (g) Short-term Debt Limits.--
            (1) In general.--In order to mitigate the risks that an 
        over-accumulation of short-term debt could pose to financial 
        companies and to the stability of the United States financial 
        system, the Board of Governors may, by regulation, prescribe a 
        limit on the amount of short-term debt, including off-balance 
        sheet exposures, that may be accumulated by any bank holding 
        company described in subsection (a) and any nonbank financial 
        company supervised by the Board of Governors.
            (2) Basis of limit.--Any limit prescribed under paragraph 
        (1) shall be based on the short-term debt of the company 
        described in paragraph (1) as a percentage of capital stock and 
        surplus of the company or on such other measure as the Board of 
        Governors considers appropriate.
            (3) Short-term debt defined.--For purposes of this 
        subsection, the term ``short-term debt'' means such liabilities 
        with short-dated maturity that the Board of Governors 
        identifies, by regulation, except that such term does not 
        include insured deposits.
            (4) Rulemaking authority.--In addition to prescribing 
        regulations under paragraphs (1) and (3), the Board of Governors 
        may prescribe such regulations, including definitions consistent 
        with this subsection, and issue such orders, as may be necessary 
        to carry out this subsection.
            (5) Authority to issue exemptions and adjustments.--
        Notwithstanding the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841 et seq.), the Board of Governors may, if it determines such 
        action is necessary to ensure appropriate heightened prudential 
        supervision, with respect to a company described in paragraph 
        (1) that does not control an insured depository institution, 
        issue to such company an exemption from or adjustment to the 
        limit prescribed under paragraph (1).

    (h) Risk Committee.--
            (1) Nonbank financial companies supervised by the board of 
        governors.--The Board <<NOTE: Establishment. Deadline.>> of 
        Governors shall require each nonbank financial company 
        supervised by the Board of Governors that is a publicly traded 
        company to establish a risk committee, as set forth in paragraph 
        (3), not later than 1 year after the date of receipt of a notice 
        of final determination under section 113(e)(3) with respect to 
        such nonbank financial company supervised by the Board of 
        Governors.
            (2) Certain bank holding companies.--
                    (A) Mandatory regulations.--The Board of Governors 
                shall issue regulations requiring each bank holding 
                company that is a publicly traded company and that has 
                total consolidated assets of not less than 
                $10,000,000,000 to establish a risk committee, as set 
                forth in paragraph (3).
                    (B) Permissive regulations.--The Board of Governors 
                may require each bank holding company that is a publicly 
                traded company and that has total consolidated assets of 
                less than $10,000,000,000 to establish a risk committee, 
                as set forth in paragraph (3), as determined necessary 
                or appropriate by the Board of Governors to promote 
                sound risk management practices.
            (3) Risk committee.--A risk committee required by this 
        subsection shall--

[[Page 124 STAT. 1430]]

                    (A) be responsible for the oversight of the 
                enterprise-wide risk management practices of the nonbank 
                financial company supervised by the Board of Governors 
                or bank holding company described in subsection (a), as 
                applicable;
                    (B) include such number of independent directors as 
                the Board of Governors may determine appropriate, based 
                on the nature of operations, size of assets, and other 
                appropriate criteria related to the nonbank financial 
                company supervised by the Board of Governors or a bank 
                holding company described in subsection (a), as 
                applicable; and
                    (C) include at least 1 risk management expert having 
                experience in identifying, assessing, and managing risk 
                exposures of large, complex firms.
            (4) Rulemaking.--The <<NOTE: Deadline. Effective 
        date.>> Board of Governors shall issue final rules to carry out 
        this subsection, not later than 1 year after the transfer date, 
        to take effect not later than 15 months after the transfer date.

    (i) Stress Tests.--
            (1) By the board of governors.--
                    (A) Annual tests required.--The Board of Governors, 
                in coordination with the appropriate primary financial 
                regulatory agencies and the Federal Insurance Office, 
                shall conduct annual analyses in which nonbank financial 
                companies supervised by the Board of Governors and bank 
                holding companies described in subsection (a) are 
                subject to evaluation of whether such companies have the 
                capital, on a total consolidated basis, necessary to 
                absorb losses as a result of adverse economic 
                conditions.
                    (B) Test parameters and consequences.--The Board of 
                Governors--
                          (i) shall provide for at least 3 different 
                      sets of conditions under which the evaluation 
                      required by this subsection shall be conducted, 
                      including baseline, adverse, and severely adverse;
                          (ii) may require the tests described in 
                      subparagraph (A) at bank holding companies and 
                      nonbank financial companies, in addition to those 
                      for which annual tests are required under 
                      subparagraph (A);
                          (iii) may develop and apply such other 
                      analytic techniques as are necessary to identify, 
                      measure, and monitor risks to the financial 
                      stability of the United States;
                          (iv) shall require the companies described in 
                      subparagraph (A) to update their resolution plans 
                      required under subsection (d)(1), as the Board of 
                      Governors determines appropriate, based on the 
                      results of the analyses; and
                          (v) shall <<NOTE: Publication.>> publish a 
                      summary of the results of the tests required under 
                      subparagraph (A) or clause (ii) of this 
                      subparagraph.
            (2) By the company.--
                    (A) Requirement.--A <<NOTE: Deadlines.>> nonbank 
                financial company supervised by the Board of Governors 
                and a bank holding company described in subsection (a) 
                shall conduct semiannual stress tests. All other 
                financial companies that have total consolidated assets 
                of more than $10,000,000,000 and are regulated by a 
                primary Federal financial regulatory

[[Page 124 STAT. 1431]]

                agency shall conduct annual stress tests. The tests 
                required under this subparagraph shall be conducted in 
                accordance with the regulations prescribed under 
                subparagraph (C).
                    (B) Report.--A company required to conduct stress 
                tests under subparagraph (A) shall submit a report to 
                the Board of Governors and to its primary financial 
                regulatory agency at such time, in such form, and 
                containing such information as the primary financial 
                regulatory agency shall require.
                    (C) Regulations.--Each Federal primary financial 
                regulatory agency, in coordination with the Board of 
                Governors and the Federal Insurance Office, shall issue 
                consistent and comparable regulations to implement this 
                paragraph that shall--
                          (i) define the term ``stress test'' for 
                      purposes of this paragraph;
                          (ii) establish methodologies for the conduct 
                      of stress tests required by this paragraph that 
                      shall provide for at least 3 different sets of 
                      conditions, including baseline, adverse, and 
                      severely adverse;
                          (iii) establish the form and content of the 
                      report required by subparagraph (B); and
                          (iv) <<NOTE: Publication.>> require companies 
                      subject to this paragraph to publish a summary of 
                      the results of the required stress tests.

    (j) Leverage Limitation.--
            (1) Requirement.--The Board of Governors shall require a 
        bank holding company with total consolidated assets equal to or 
        greater than $50,000,000,000 or a nonbank financial company 
        supervised by the Board of Governors to maintain a debt to 
        equity ratio of no more than 15 to 1, upon a determination by 
        the Council that such company poses a grave threat to the 
        financial stability of the United States and that the imposition 
        of such requirement is necessary to mitigate the risk that such 
        company poses to the financial stability of the United States. 
        Nothing in this paragraph shall apply to a Federal home loan 
        bank.
            (2) Considerations.--In making a determination under this 
        subsection, the Council shall consider the factors described in 
        subsections (a) and (b) of section 113 and any other risk-
        related factors that the Council deems appropriate.
            (3) Regulations.--The <<NOTE: Procedures.>> Board of 
        Governors shall promulgate regulations to establish procedures 
        and timelines for complying with the requirements of this 
        subsection.

    (k) Inclusion of Off-balance-sheet Activities in Computing Capital 
Requirements.--
            (1) In general.--In the case of any bank holding company 
        described in subsection (a) or nonbank financial company 
        supervised by the Board of Governors, the computation of capital 
        for purposes of meeting capital requirements shall take into 
        account any off-balance-sheet activities of the company.
            (2) Exemptions.--If the Board of Governors determines that 
        an exemption from the requirement under paragraph (1) is 
        appropriate, the Board of Governors may exempt a company, or any 
        transaction or transactions engaged in by such company, from the 
        requirements of paragraph (1).

[[Page 124 STAT. 1432]]

            (3) Off-balance-sheet activities defined.--For purposes of 
        this subsection, the term ``off-balance-sheet activities'' means 
        an existing liability of a company that is not currently a 
        balance sheet liability, but may become one upon the happening 
        of some future event, including the following transactions, to 
        the extent that they may create a liability:
                    (A) Direct credit substitutes in which a bank 
                substitutes its own credit for a third party, including 
                standby letters of credit.
                    (B) Irrevocable letters of credit that guarantee 
                repayment of commercial paper or tax-exempt securities.
                    (C) Risk participations in bankers' acceptances.
                    (D) Sale and repurchase agreements.
                    (E) Asset sales with recourse against the seller.
                    (F) Interest rate swaps.
                    (G) Credit swaps.
                    (H) Commodities contracts.
                    (I) Forward contracts.
                    (J) Securities contracts.
                    (K) Such other activities or transactions as the 
                Board of Governors may, by rule, define.
SEC. 166. <<NOTE: 12 USC 5366.>> EARLY REMEDIATION REQUIREMENTS.

    (a) In General.--The <<NOTE: Regulations.>> Board of Governors, in 
consultation with the Council and the Corporation, shall prescribe 
regulations establishing requirements to provide for the early 
remediation of financial distress of a nonbank financial company 
supervised by the Board of Governors or a bank holding company described 
in section 165(a), except that nothing in this subsection authorizes the 
provision of financial assistance from the Federal Government.

    (b) Purpose of the Early Remediation Requirements.--The purpose of 
the early remediation requirements under subsection (a) shall be to 
establish a series of specific remedial actions to be taken by a nonbank 
financial company supervised by the Board of Governors or a bank holding 
company described in section 165(a) that is experiencing increasing 
financial distress, in order to minimize the probability that the 
company will become insolvent and the potential harm of such insolvency 
to the financial stability of the United States.
    (c) Remediation Requirements.--The regulations prescribed by the 
Board of Governors under subsection (a) shall--
            (1) define measures of the financial condition of the 
        company, including regulatory capital, liquidity measures, and 
        other forward-looking indicators; and
            (2) establish requirements that increase in stringency as 
        the financial condition of the company declines, including--
                    (A) requirements in the initial stages of financial 
                decline, including limits on capital distributions, 
                acquisitions, and asset growth; and
                    (B) requirements at later stages of financial 
                decline, including a capital restoration plan and 
                capital-raising requirements, limits on transactions 
                with affiliates, management changes, and asset sales.
SEC. 167. <<NOTE: 12 USC 5367.>> AFFILIATIONS.

    (a) Affiliations.--Nothing in this subtitle shall be construed to 
require a nonbank financial company supervised by the Board

[[Page 124 STAT. 1433]]

of Governors, or a company that controls a nonbank financial company 
supervised by the Board of Governors, to conform the activities thereof 
to the requirements of section 4 of the Bank Holding Company Act of 1956 
(12 U.S.C. 1843).
    (b) Requirement.--
            (1) In general.--
                    (A) 
                Board <<NOTE: Deadline. Notification.>> authority.--If a 
                nonbank financial company supervised by the Board of 
                Governors conducts activities other than those that are 
                determined to be financial in nature or incidental 
                thereto under section 4(k) of the Bank Holding Company 
                Act of 1956, the Board of Governors may require such 
                company to establish and conduct all or a portion of 
                such activities that are determined to be financial in 
                nature or incidental thereto in or through an 
                intermediate holding company established pursuant to 
                regulation of the Board of Governors, not later than 90 
                days (or such longer period as the Board of Governors 
                may deem appropriate) after the date on which the 
                nonbank financial company supervised by the Board of 
                Governors is notified of the determination of the Board 
                of Governors under this section.
                    (B) Necessary actions.--Notwithstanding subparagraph 
                (A), the Board of Governors shall require a nonbank 
                financial company supervised by the Board of Governors 
                to establish an intermediate holding company if the 
                Board of Governors makes a determination that the 
                establishment of such intermediate holding company is 
                necessary to--
                          (i) appropriately supervise activities that 
                      are determined to be financial in nature or 
                      incidental thereto; or
                          (ii) to ensure that supervision by the Board 
                      of Governors does not extend to the commercial 
                      activities of such nonbank financial company.
            (2) Internal financial activities.--For purposes of this 
        subsection, activities that are determined to be financial in 
        nature or incidental thereto under section 4(k) of the Bank 
        Holding Company Act of 1956, as described in paragraph (1), 
        shall not include internal financial activities, including 
        internal treasury, investment, and employee benefit functions. 
        With respect to any internal financial activity engaged in for 
        the company or an affiliate and a non-affiliate of such company 
        during the year prior to the date of enactment of this Act, such 
        company (or an affiliate that is not an intermediate holding 
        company or subsidiary of an intermediate holding company) may 
        continue to engage in such activity, as long as not less than 2/
        3 of the assets or 2/3 of the revenues generated from the 
        activity are from or attributable to such company or an 
        affiliate, subject to review by the Board of Governors, to 
        determine whether engaging in such activity presents undue risk 
        to such company or to the financial stability of the United 
        States.
            (3) Source of strength.--A company that directly or 
        indirectly controls an intermediate holding company established 
        under this section shall serve as a source of strength to its 
        subsidiary intermediate holding company.
            (4) Parent company reports.--The Board of Governors may, 
        from time to time, require reports under oath from a

[[Page 124 STAT. 1434]]

        company that controls an intermediate holding company, and from 
        the appropriate officers or directors of such company, solely 
        for purposes of ensuring compliance with the provisions of this 
        section, including assessing the ability of the company to serve 
        as a source of strength to its subsidiary intermediate holding 
        company pursuant to paragraph (3) and enforcing such compliance.
            (5) Limited parent company enforcement.--
                    (A) In general.--In addition to any other authority 
                of the Board of Governors, the Board of Governors may 
                enforce compliance with the provisions of this 
                subsection that are applicable to any company described 
                in paragraph (1) that controls an intermediate holding 
                company under section 8 of the Federal Deposit Insurance 
                Act, and such company shall be subject to such section 
                (solely for such purposes) in the same manner and to the 
                same extent as if such company were a bank holding 
                company.
                    (B) Application of other act.--Any violation of this 
                subsection by any company that controls an intermediate 
                holding company may also be treated as a violation of 
                the Federal Deposit Insurance Act for purposes of 
                subparagraph (A).
                    (C) No effect on other authority.--No provision of 
                this paragraph shall be construed as limiting any 
                authority of the Board of Governors or any other Federal 
                agency under any other provision of law.

    (c) Regulations.--The Board of Governors--
            (1) shall <<NOTE: Criteria.>> promulgate regulations to 
        establish the criteria for determining whether to require a 
        nonbank financial company supervised by the Board of Governors 
        to establish an intermediate holding company under subsection 
        (b); and
            (2) may promulgate regulations to establish any restrictions 
        or limitations on transactions between an intermediate holding 
        company or a nonbank financial company supervised by the Board 
        of Governors and its affiliates, as necessary to prevent unsafe 
        and unsound practices in connection with transactions between 
        such company, or any subsidiary thereof, and its parent company 
        or affiliates that are not subsidiaries of such company, except 
        that such regulations shall not restrict or limit any 
        transaction in connection with the bona fide acquisition or 
        lease by an unaffiliated person of assets, goods, or services.
SEC. 168. <<NOTE: 12 USC 5368.>> REGULATIONS.

    The Board of Governors shall have authority to issue regulations to 
implement subtitles A and C and the amendments made thereunder. 
Except <<NOTE: Deadline.>> as otherwise specified in subtitle A or C, 
not later than 18 months after the effective date of this Act, the Board 
of Governors shall issue final regulations to implement subtitles A and 
C, and the amendments made thereunder.
SEC. 169. <<NOTE: 12 USC 5369.>> AVOIDING DUPLICATION.

    The Board of Governors shall take any action that the Board of 
Governors deems appropriate to avoid imposing requirements under this 
subtitle that are duplicative of requirements applicable to bank holding 
companies and nonbank financial companies under other provisions of law.

[[Page 124 STAT. 1435]]

SEC. 170. <<NOTE: 12 USC 5370.>> SAFE HARBOR.

    (a) Regulations.--The <<NOTE: Criteria.>> Board of Governors shall 
promulgate regulations on behalf of, and in consultation with, the 
Council setting forth the criteria for exempting certain types or 
classes of U.S. nonbank financial companies or foreign nonbank financial 
companies from supervision by the Board of Governors.

    (b) Considerations.--In developing the criteria under subsection 
(a), the Board of Governors shall take into account the factors for 
consideration described in subsections (a) and (b) of section 113 in 
determining whether a U.S. nonbank financial company or foreign nonbank 
financial company shall be supervised by the Board of Governors.
    (c) Rule of Construction.--Nothing in this section shall be 
construed to require supervision by the Board of Governors of a U.S. 
nonbank financial company or foreign nonbank financial company, if such 
company does not meet the criteria for exemption established under 
subsection (a).
    (d) Revisions.--
            (1) In <<NOTE: Review.>> general.--The Board of Governors 
        shall, in consultation with the Council, review the regulations 
        promulgated under subsection (a), not less frequently than every 
        5 years, and based upon the review, the Board of Governors may 
        revise such regulations on behalf of, and in consultation with, 
        the Council to update as necessary the criteria set forth in 
        such regulations.
            (2) Transition period.--No revisions under paragraph (1) 
        shall take effect before the end of the 2-year period after the 
        date of publication of such revisions in final form.

    (e) Report.--The Chairman of the Board of Governors and the 
Chairperson of the Council shall submit a joint report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives not later than 30 
days after the date of the issuance in final form of regulations under 
subsection (a), or any subsequent revision to such regulations under 
subsection (d), as applicable. Such report shall include, at a minimum, 
the rationale for exemption and empirical evidence to support the 
criteria for exemption.
SEC. 171. <<NOTE: 12 USC 5371.>> LEVERAGE AND RISK-BASED CAPITAL 
                        REQUIREMENTS.

    (a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Generally applicable leverage capital requirements.--The 
        term ``generally applicable leverage capital requirements'' 
        means--
                    (A) the minimum ratios of tier 1 capital to average 
                total assets, as established by the appropriate Federal 
                banking agencies to apply to insured depository 
                institutions under the prompt corrective action 
                regulations implementing section 38 of the Federal 
                Deposit Insurance Act, regardless of total consolidated 
                asset size or foreign financial exposure; and
                    (B) includes the regulatory capital components in 
                the numerator of that capital requirement, average total 
                assets in the denominator of that capital requirement, 
                and the required ratio of the numerator to the 
                denominator.

[[Page 124 STAT. 1436]]

            (2) Generally applicable risk-based capital requirements.--
        The term ``generally applicable risk-based capital 
        requirements'' means--
                    (A) the risk-based capital requirements, as 
                established by the appropriate Federal banking agencies 
                to apply to insured depository institutions under the 
                prompt corrective action regulations implementing 
                section 38 of the Federal Deposit Insurance Act, 
                regardless of total consolidated asset size or foreign 
                financial exposure; and
                    (B) includes the regulatory capital components in 
                the numerator of those capital requirements, the risk-
                weighted assets in the denominator of those capital 
                requirements, and the required ratio of the numerator to 
                the denominator.
            (3) Definition of depository institution holding company.--
        The term ``depository institution holding company'' means a bank 
        holding company or a savings and loan holding company (as those 
        terms are defined in section 3 of the Federal Deposit Insurance 
        Act) that is organized in the United States, including any bank 
        or savings and loan holding company that is owned or controlled 
        by a foreign organization, but does not include the foreign 
        organization.

    (b) Minimum Capital Requirements.--
            (1) Minimum leverage capital requirements.--The appropriate 
        Federal banking agencies shall establish minimum leverage 
        capital requirements on a consolidated basis for insured 
        depository institutions, depository institution holding 
        companies, and nonbank financial companies supervised by the 
        Board of Governors. The minimum leverage capital requirements 
        established under this paragraph shall not be less than the 
        generally applicable leverage capital requirements, which shall 
        serve as a floor for any capital requirements that the agency 
        may require, nor quantitatively lower than the generally 
        applicable leverage capital requirements that were in effect for 
        insured depository institutions as of the date of enactment of 
        this Act.
            (2) Minimum risk-based capital requirements.--The 
        appropriate Federal banking agencies shall establish minimum 
        risk-based capital requirements on a consolidated basis for 
        insured depository institutions, depository institution holding 
        companies, and nonbank financial companies supervised by the 
        Board of Governors. The minimum risk-based capital requirements 
        established under this paragraph shall not be less than the 
        generally applicable risk-based capital requirements, which 
        shall serve as a floor for any capital requirements that the 
        agency may require, nor quantitatively lower than the generally 
        applicable risk-based capital requirements that were in effect 
        for insured depository institutions as of the date of enactment 
        of this Act.
            (3) Investments in financial subsidiaries.--For purposes of 
        this section, investments in financial subsidiaries that insured 
        depository institutions are required to deduct from regulatory 
        capital under section 5136A of the Revised Statutes of the 
        United States or section 46(a)(2) of the Federal Deposit 
        Insurance Act need not be deducted from regulatory capital by 
        depository institution holding companies or nonbank financial 
        companies supervised by the Board of Governors, unless such 
        capital deduction is required by the Board of Governors

[[Page 124 STAT. 1437]]

        or the primary financial regulatory agency in the case of 
        nonbank financial companies supervised by the Board of 
        Governors.
            (4) Effective dates and phase-in periods.--
                    (A) Debt or equity instruments on or after may 19, 
                2010.--For debt or equity instruments issued on or after 
                May 19, 2010, by depository institution holding 
                companies or by nonbank financial companies supervised 
                by the Board of Governors, this section shall be deemed 
                to have become effective as of May 19, 2010.
                    (B) Debt or equity instruments issued before may 19, 
                2010.--For debt or equity instruments issued before May 
                19, 2010, by depository institution holding companies or 
                by nonbank financial companies supervised by the Board 
                of Governors, any regulatory capital deductions required 
                under this section shall be phased in incrementally over 
                a period of 3 years, with the phase-in period to begin 
                on January 1, 2013, except as set forth in subparagraph 
                (C).
                    (C) Debt or equity instruments of smaller 
                institutions.--For debt or equity instruments issued 
                before May 19, 2010, by depository institution holding 
                companies with total consolidated assets of less than 
                $15,000,000,000 as of December 31, 2009, and by 
                organizations that were mutual holding companies on May 
                19, 2010, the capital deductions that would be required 
                for other institutions under this section are not 
                required as a result of this section.
                    (D) Depository institution holding companies not 
                previously supervised by the board of governors.--For 
                any depository institution holding company that was not 
                supervised by the Board of Governors as of May 19, 2010, 
                the requirements of this section, except as set forth in 
                subparagraphs (A) and (B), shall be effective 5 years 
                after the date of enactment of this Act
                    (E) Certain bank holding company subsidiaries of 
                foreign banking organizations.--For bank holding company 
                subsidiaries of foreign banking organizations that have 
                relied on Supervision and Regulation Letter SR-01-1 
                issued by the Board of Governors (as in effect on May 
                19, 2010), the requirements of this section, except as 
                set forth in subparagraph (A), shall be effective 5 
                years after the date of enactment of this Act.
            (5) Exceptions.--This section shall not apply to--
                    (A) debt or equity instruments issued to the United 
                States or any agency or instrumentality thereof pursuant 
                to the Emergency Economic Stabilization Act of 2008, and 
                prior to October 4, 2010;
                    (B) any Federal home loan bank; or
                    (C) any small bank holding company that is subject 
                to the Small Bank Holding Company Policy Statement of 
                the Board of Governors, as in effect on May 19, 2010.
            (6) Study and report on small institution access to 
        capital.--
                    (A) Study required.--The Comptroller General of the 
                United States, after consultation with the Federal 
                banking

[[Page 124 STAT. 1438]]

                agencies, shall conduct a study of access to capital by 
                smaller insured depository institutions.
                    (B) Scope.--For <<NOTE: Definition.>> purposes of 
                this study required by subparagraph (A), the term 
                ``smaller insured depository institution'' means an 
                insured depository institution with total consolidated 
                assets of $5,000,000,000 or less.
                    (C) Report to congress.--Not later than 18 months 
                after the date of enactment of this Act, the Comptroller 
                General of the United States shall submit to the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and the Committee on Financial Services of the 
                House of Representatives a report summarizing the 
                results of the study conducted under subparagraph (A), 
                together with any recommendations for legislative or 
                regulatory action that would enhance the access to 
                capital of smaller insured depository institutions, in a 
                manner that is consistent with safe and sound banking 
                operations.
            (7) Capital requirements to address activities that pose 
        risks to the financial system.--
                    (A) In general.--Subject to the recommendations of 
                the Council, in accordance with section 120, the Federal 
                banking agencies shall develop capital requirements 
                applicable to insured depository institutions, 
                depository institution holding companies, and nonbank 
                financial companies supervised by the Board of Governors 
                that address the risks that the activities of such 
                institutions pose, not only to the institution engaging 
                in the activity, but to other public and private 
                stakeholders in the event of adverse performance, 
                disruption, or failure of the institution or the 
                activity.
                    (B) Content.--Such rules shall address, at a 
                minimum, the risks arising from--
                          (i) significant volumes of activity in 
                      derivatives, securitized products purchased and 
                      sold, financial guarantees purchased and sold, 
                      securities borrowing and lending, and repurchase 
                      agreements and reverse repurchase agreements;
                          (ii) concentrations in assets for which the 
                      values presented in financial reports are based on 
                      models rather than historical cost or prices 
                      deriving from deep and liquid 2-way markets; and
                          (iii) concentrations in market share for any 
                      activity that would substantially disrupt 
                      financial markets if the institution is forced to 
                      unexpectedly cease the activity.
SEC. 172. EXAMINATION AND ENFORCEMENT ACTIONS FOR INSURANCE AND 
                        ORDERLY LIQUIDATION PURPOSES.

    (a) Examinations for Insurance and Resolution Purposes.--Section 
10(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)(3)) is 
amended--
            (1) by striking ``In addition'' and inserting the following:
                    ``(A) In general.--In addition''; and
            (2) by striking ``whenever the board of directors 
        determines'' and all that follows through the period and 
        inserting the following: ``or nonbank financial company 
        supervised by the Board of Governors or a bank holding company 
        described in section

[[Page 124 STAT. 1439]]

        165(a) of the Financial Stability Act of 2010, whenever the 
        Board of Directors determines that a special examination of any 
        such depository institution is necessary to determine the 
        condition of such depository institution for insurance purposes, 
        or of such nonbank financial company supervised by the Board of 
        Governors or bank holding company described in section 165(a) of 
        the Financial Stability Act of 2010, for the purpose of 
        implementing its authority to provide for orderly liquidation of 
        any such company under title II of that Act, provided that such 
        authority may not be used with respect to any such company that 
        is in a generally sound condition.
                    ``(B) Limitation.--
                Before <<NOTE: Review.>> conducting a special 
                examination of a nonbank financial company supervised by 
                the Board of Governors or a bank holding company 
                described in section 165(a) of the Financial Stability 
                Act of 2010, the Corporation shall review any available 
                and acceptable resolution plan that the company has 
                submitted in accordance with section 165(d) of that Act, 
                consistent with the nonbinding effect of such plan, and 
                available reports of examination, and shall coordinate 
                to the maximum extent practicable with the Board of 
                Governors, in order to minimize duplicative or 
                conflicting examinations.''.

    (b) Enforcement Authority.--Section 8(t) of the Federal Deposit 
Insurance Act (12 U.S.C. 1818(t)) is amended--
            (1) in paragraph (1), by inserting ``, any depository 
        institution holding company,'' before ``or any institution-
        affiliated party'';
            (2) in paragraph (2)--
                    (A) by striking ``or'' at the end of subparagraph 
                (B);
                    (B) at the end of subparagraph (C), by striking the 
                period and inserting ``or''; and
                    (C) by inserting at the end the following new 
                subparagraph:
                    ``(D) the conduct or threatened conduct (including 
                any acts or omissions) of the depository institution 
                holding company poses a risk to the Deposit Insurance 
                Fund, provided that such authority may not be used with 
                respect to a depository institution holding company that 
                is in generally sound condition and whose conduct does 
                not pose a foreseeable and material risk of loss to the 
                Deposit Insurance Fund;''; and
            (3) by adding at the end the following:
            ``(6) Powers and duties with respect to depository 
        institution holding companies.--For purposes of exercising the 
        backup authority provided in this subsection--
                    ``(A) the Corporation shall have the same powers 
                with respect to a depository institution holding company 
                and its affiliates as the appropriate Federal banking 
                agency has with respect to the holding company and its 
                affiliates; and
                    ``(B) the holding company and its affiliates shall 
                have the same duties and obligations with respect to the 
                Corporation as the holding company and its affiliates 
                have with respect to the appropriate Federal banking 
                agency.''.

    (c) Rule <<NOTE: 12 USC 5372.>> of Construction.--Nothing in this 
Act shall be construed to limit or curtail the Corporation's current 
authority to

[[Page 124 STAT. 1440]]

examine or bring enforcement actions with respect to any insured 
depository institution or institution-affiliated party.
SEC. 173. ACCESS TO UNITED STATES FINANCIAL MARKET BY FOREIGN 
                        INSTITUTIONS.

    (a) Establishment of Foreign Bank Offices in the United States.--
Section 7(d)(3) of the International Banking Act of 1978 (12 U.S.C. 
3105(d)(3)) is amended--
            (1) in subparagraph (C), by striking ``and'' at the end;
            (2) in subparagraph (D), by striking the period at the end 
        of and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(E) for a foreign bank that presents a risk to the 
                stability of United States financial system, whether the 
                home country of the foreign bank has adopted, or is 
                making demonstrable progress toward adopting, an 
                appropriate system of financial regulation for the 
                financial system of such home country to mitigate such 
                risk.''.

    (b) Termination of Foreign Bank Offices in the United States.--
Section 7(e)(1) of the International Banking Act of 1978 (12 U.S.C. 
3105(e)(1)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by striking the period at the end 
        of and inserting ``; or''; and
            (3) by inserting after subparagraph (B), the following new 
        subparagraph:
                    ``(C) for a foreign bank that presents a risk to the 
                stability of the United States financial system, the 
                home country of the foreign bank has not adopted, or 
                made demonstrable progress toward adopting, an 
                appropriate system of financial regulation to mitigate 
                such risk.''.

    (c) Registration or Succession to a United States Broker or Dealer 
and Termination of Such Registration.--Section 15 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the 
following new subsections:
    ``(k) Registration or Succession to a United States Broker or 
Dealer.--In determining whether to permit a foreign person or an 
affiliate of a foreign person to register as a United States broker or 
dealer, or succeed to the registration of a United States broker or 
dealer, the Commission may consider whether, for a foreign person, or an 
affiliate of a foreign person that presents a risk to the stability of 
the United States financial system, the home country of the foreign 
person has adopted, or made demonstrable progress toward adopting, an 
appropriate system of financial regulation to mitigate such risk.
    ``(l) Termination of a United States Broker or Dealer.--For a 
foreign person or an affiliate of a foreign person that presents such a 
risk to the stability of the United States financial system, the 
Commission may determine to terminate the registration of such foreign 
person or an affiliate of such foreign person as a broker or dealer in 
the United States, if the Commission determines that the home country of 
the foreign person has not adopted, or made demonstrable progress toward 
adopting, an appropriate system of financial regulation to mitigate such 
risk.''.

[[Page 124 STAT. 1441]]

SEC. 174. STUDIES AND REPORTS ON HOLDING COMPANY CAPITAL 
                        REQUIREMENTS.

    (a) Study of Hybrid Capital Instruments.--The Comptroller General of 
the United States, in consultation with the Board of Governors, the 
Comptroller of the Currency, and the Corporation, shall conduct a study 
of the use of hybrid capital instruments as a component of Tier 1 
capital for banking institutions and bank holding companies. The study 
shall consider--
            (1) the current use of hybrid capital instruments, such as 
        trust preferred shares, as a component of Tier 1 capital;
            (2) the differences between the components of capital 
        permitted for insured depository institutions and those 
        permitted for companies that control insured depository 
        institutions;
            (3) the benefits and risks of allowing such instruments to 
        be used to comply with Tier 1 capital requirements;
            (4) the economic impact of prohibiting the use of such 
        capital instruments for Tier 1;
            (5) a review of the consequences of disqualifying trust 
        preferred instruments, and whether it could lead to the failure 
        or undercapitalization of existing banking organizations;
            (6) the international competitive implications prohibiting 
        hybrid capital instruments for Tier 1;
            (7) the impact on the cost and availability of credit in the 
        United States from such a prohibition;
            (8) the availability of capital for financial institutions 
        with less than $10,000,000,000 in total assets; and
            (9) any other relevant factors relating to the safety and 
        soundness of our financial system and potential economic impact 
        of such a prohibition.

    (b) Study of Foreign Bank Intermediate Holding Company Capital 
Requirements.--The Comptroller General of the United States, in 
consultation with the Secretary, the Board of Governors, the Comptroller 
of the Currency, and the Corporation, shall conduct a study of capital 
requirements applicable to United States intermediate holding companies 
of foreign banks that are bank holding companies or savings and loan 
holding companies. The study shall consider--
            (1) current Board of Governors policy regarding the 
        treatment of intermediate holding companies;
            (2) the principle of national treatment and equality of 
        competitive opportunity for foreign banks operating in the 
        United States;
            (3) the extent to which foreign banks are subject on a 
        consolidated basis to home country capital standards comparable 
        to United States capital standards;
            (4) potential effects on United States banking organizations 
        operating abroad of changes to United States policy regarding 
        intermediate holding companies;
            (5) the impact on the cost and availability of credit in the 
        United States from a change in United States policy regarding 
        intermediate holding companies; and
            (6) any other relevant factors relating to the safety and 
        soundness of our financial system and potential economic impact 
        of such a prohibition.

    (c) Report.--Not later than 18 months after the date of enactment of 
this Act, the Comptroller General of the United States shall submit 
reports to the Committee on Banking, Housing, and

[[Page 124 STAT. 1442]]

Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives summarizing the results of the studies 
required under subsection (a). The reports shall include specific 
recommendations for legislative or regulatory action regarding the 
treatment of hybrid capital instruments, including trust preferred 
shares, and shall explain the basis for such recommendations.
SEC. 175. <<NOTE: Consultation. 12 USC 5373.>> INTERNATIONAL 
                        POLICY COORDINATION.

    (a) By the President.--The President, or a designee of the 
President, may coordinate through all available international policy 
channels, similar policies as those found in United States law relating 
to limiting the scope, nature, size, scale, concentration, and 
interconnectedness of financial companies, in order to protect financial 
stability and the global economy.
    (b) By the Council.--The Chairperson of the Council, in consultation 
with the other members of the Council, shall regularly consult with the 
financial regulatory entities and other appropriate organizations of 
foreign governments or international organizations on matters relating 
to systemic risk to the international financial system.
    (c) By the Board of Governors and the Secretary.--The Board of 
Governors and the Secretary shall consult with their foreign 
counterparts and through appropriate multilateral organizations to 
encourage comprehensive and robust prudential supervision and regulation 
for all highly leveraged and interconnected financial companies.
SEC. 176. <<NOTE: 12 USC 5374.>> RULE OF CONSTRUCTION.

    No regulation or standard imposed under this title may be construed 
in a manner that would lessen the stringency of the requirements of any 
applicable primary financial regulatory agency or any other Federal or 
State agency that are otherwise applicable. This title, and the rules 
and regulations or orders prescribed pursuant to this title, do not 
divest any such agency of any authority derived from any other 
applicable law.

                 TITLE II--ORDERLY LIQUIDATION AUTHORITY

SEC. 201. <<NOTE: 12 USC 5381.>> DEFINITIONS.

    (a) In General.--In this title, the following definitions shall 
apply:
            (1) Administrative expenses of the receiver.--The term 
        ``administrative expenses of the receiver'' includes--
                    (A) the actual, necessary costs and expenses 
                incurred by the Corporation as receiver for a covered 
                financial company in liquidating a covered financial 
                company; and
                    (B) any obligations that the Corporation as receiver 
                for a covered financial company determines are necessary 
                and appropriate to facilitate the smooth and orderly 
                liquidation of the covered financial company.
            (2) Bankruptcy code.--The term ``Bankruptcy Code'' means 
        title 11, United States Code.
            (3) Bridge financial company.--The term ``bridge financial 
        company'' means a new financial company organized by

[[Page 124 STAT. 1443]]

        the Corporation in accordance with section 210(h) for the 
        purpose of resolving a covered financial company.
            (4) Claim.--The term ``claim'' means any right to payment, 
        whether or not such right is reduced to judgment, liquidated, 
        unliquidated, fixed, contingent, matured, unmatured, disputed, 
        undisputed, legal, equitable, secured, or unsecured.
            (5) Company.--The term ``company'' has the same meaning as 
        in section 2(b) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841(b)), except that such term includes any company 
        described in paragraph (11), the majority of the securities of 
        which are owned by the United States or any State.
            (6) Court.--The term ``Court'' means the United States 
        District Court for the District of Columbia, unless the context 
        otherwise requires.
            (7) Covered broker or dealer.--The term ``covered broker or 
        dealer'' means a covered financial company that is a broker or 
        dealer that--
                    (A) is registered with the Commission under section 
                15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
                78o(b)); and
                    (B) is a member of SIPC.
            (8) Covered financial company.--The term ``covered financial 
        company''--
                    (A) means a financial company for which a 
                determination has been made under section 203(b); and
                    (B) does not include an insured depository 
                institution.
            (9) Covered subsidiary.--The term ``covered subsidiary'' 
        means a subsidiary of a covered financial company, other than--
                    (A) an insured depository institution;
                    (B) an insurance company; or
                    (C) a covered broker or dealer.
            (10) Definitions relating to covered brokers and dealers.--
        The terms ``customer'', ``customer name securities'', ``customer 
        property'', and ``net equity'' in the context of a covered 
        broker or dealer, have the same meanings as in section 16 of the 
        Securities Investor Protection Act of 1970 (15 U.S.C. 78lll).
            (11) Financial company.--The term ``financial company'' 
        means any company that--
                    (A) is incorporated or organized under any provision 
                of Federal law or the laws of any State;
                    (B) is--
                          (i) a bank holding company, as defined in 
                      section 2(a) of the Bank Holding Company Act of 
                      1956 (12 U.S.C. 1841(a));
                          (ii) a nonbank financial company supervised by 
                      the Board of Governors;
                          (iii) any company that is predominantly 
                      engaged in activities that the Board of Governors 
                      has determined are financial in nature or 
                      incidental thereto for purposes of section 4(k) of 
                      the Bank Holding Company Act of 1956 (12 U.S.C. 
                      1843(k)) other than a company described in clause 
                      (i) or (ii); or
                          (iv) any subsidiary of any company described 
                      in any of clauses (i) through (iii) that is 
                      predominantly engaged in activities that the Board 
                      of Governors has

[[Page 124 STAT. 1444]]

                      determined are financial in nature or incidental 
                      thereto for purposes of section 4(k) of the Bank 
                      Holding Company Act of 1956 (12 U.S.C. 1843(k)) 
                      (other than a subsidiary that is an insured 
                      depository institution or an insurance company); 
                      and
                    (C) is not a Farm Credit System institution 
                chartered under and subject to the provisions of the 
                Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et 
                seq.), a governmental entity, or a regulated entity, as 
                defined under section 1303(20) of the Federal Housing 
                Enterprises Financial Safety and Soundness Act of 1992 
                (12 U.S.C. 4502(20)).
            (12) Fund.--The term ``Fund'' means the Orderly Liquidation 
        Fund established under section 210(n).
            (13) Insurance company.--The term ``insurance company'' 
        means any entity that is--
                    (A) engaged in the business of insurance;
                    (B) subject to regulation by a State insurance 
                regulator; and
                    (C) covered by a State law that is designed to 
                specifically deal with the rehabilitation, liquidation, 
                or insolvency of an insurance company.
            (14) Nonbank financial company.--The term ``nonbank 
        financial company'' has the same meaning as in section 
        102(a)(4)(C).
            (15) Nonbank financial company supervised by the board of 
        governors.--The term ``nonbank financial company supervised by 
        the Board of Governors'' has the same meaning as in section 
        102(a)(4)(D).
            (16) SIPC.--The term ``SIPC'' means the Securities Investor 
        Protection Corporation.

    (b) Definitional <<NOTE: Regulations.>> Criteria.--For purpose of 
the definition of the term ``financial company'' under subsection 
(a)(11), no company shall be deemed to be predominantly engaged in 
activities that the Board of Governors has determined are financial in 
nature or incidental thereto for purposes of section 4(k) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1843(k)), if the consolidated 
revenues of such company from such activities constitute less than 85 
percent of the total consolidated revenues of such company, as the 
Corporation, in consultation with the Secretary, shall establish by 
regulation. In determining whether a company is a financial company 
under this title, the consolidated revenues derived from the ownership 
or control of a depository institution shall be included.
SEC. 202. <<NOTE: 12 USC 5382.>> JUDICIAL REVIEW.

    (a) Commencement of Orderly Liquidation.--
            (1) Petition to district court.--
                    (A) District court review.--
                          (i) Petition to district court.--
                      Subsequent <<NOTE: Notification.>> to a 
                      determination by the Secretary under section 203 
                      that a financial company satisfies the criteria in 
                      section 203(b), the Secretary shall notify the 
                      Corporation and the covered financial 
                      company. <<NOTE: Appointment.>> If the board of 
                      directors (or body performing similar functions) 
                      of the covered financial company acquiesces or 
                      consents to the appointment of the Corporation as 
                      receiver, the Secretary shall appoint the 
                      Corporation as receiver. If

[[Page 124 STAT. 1445]]

                      the board of directors (or body performing similar 
                      functions) of the covered financial company does 
                      not acquiesce or consent to the appointment of the 
                      Corporation as receiver, the Secretary shall 
                      petition the United States District Court for the 
                      District of Columbia for an order authorizing the 
                      Secretary to appoint the Corporation as receiver.
                          (ii) Form and content of order.--The Secretary 
                      shall present all relevant findings and the 
                      recommendation made pursuant to section 203(a) to 
                      the Court. The petition shall be filed under seal.
                          (iii) Determination.--On a strictly 
                      confidential basis, and without any prior public 
                      disclosure, the Court, after notice to the covered 
                      financial company and a hearing in which the 
                      covered financial company may oppose the petition, 
                      shall determine whether the determination of the 
                      Secretary that the covered financial company is in 
                      default or in danger of default and satisfies the 
                      definition of a financial company under section 
                      201(a)(11) is arbitrary and capricious.
                          (iv) Issuance of order.--If the Court 
                      determines that the determination of the Secretary 
                      that the covered financial company is in default 
                      or in danger of default and satisfies the 
                      definition of a financial company under section 
                      201(a)(11)--
                                    (I) is not arbitrary and capricious, 
                                the Court shall issue an order 
                                immediately authorizing the Secretary to 
                                appoint the Corporation as receiver of 
                                the covered financial company; or
                                    (II) is arbitrary and capricious, 
                                the Court shall immediately provide to 
                                the Secretary a written statement of 
                                each reason supporting its 
                                determination, and afford the Secretary 
                                an immediate opportunity to amend and 
                                refile the petition under clause (i).
                          (v) Petition granted by operation of law.--If 
                      the Court does not make a determination within 24 
                      hours of receipt of the petition--
                                    (I) the petition shall be granted by 
                                operation of law;
                                    (II) the Secretary shall appoint the 
                                Corporation as receiver; and
                                    (III) liquidation under this title 
                                shall automatically and without further 
                                notice or action be commenced and the 
                                Corporation may immediately take all 
                                actions authorized under this title.
                    (B) Effect of determination.--The determination of 
                the Court under subparagraph (A) shall be final, and 
                shall be subject to appeal only in accordance with 
                paragraph (2). The decision shall not be subject to any 
                stay or injunction pending appeal. 
                Upon <<NOTE: Records.>> conclusion of its proceedings 
                under subparagraph (A), the Court shall provide 
                immediately for the record a written statement of each 
                reason supporting the decision of the Court, and shall 
                provide copies thereof to the Secretary and the covered 
                financial company.

[[Page 124 STAT. 1446]]

                    (C) Criminal penalties.--A person who recklessly 
                discloses a determination of the Secretary under section 
                203(b) or a petition of the Secretary under subparagraph 
                (A), or the pendency of court proceedings as provided 
                for under subparagraph (A), shall be fined not more than 
                250,000, or imprisoned for not more than 5 years, or 
                both.
            (2) Appeal of decisions of the district court.--
                    (A) Appeal to court of appeals.--
                          (i) In general.--
                      Subject <<NOTE: Deadline.>> to clause (ii), the 
                      United States Court of Appeals for the District of 
                      Columbia Circuit shall have jurisdiction of an 
                      appeal of a final decision of the Court filed by 
                      the Secretary or a covered financial company, 
                      through its board of directors, notwithstanding 
                      section 210(a)(1)(A)(i), not later than 30 days 
                      after the date on which the decision of the Court 
                      is rendered or deemed rendered under this 
                      subsection.
                          (ii) Condition of jurisdiction.--The Court of 
                      Appeals shall have jurisdiction of an appeal by a 
                      covered financial company only if the covered 
                      financial company did not acquiesce or consent to 
                      the appointment of a receiver by the Secretary 
                      under paragraph (1)(A).
                          (iii) Expedition.--The Court of Appeals shall 
                      consider any appeal under this subparagraph on an 
                      expedited basis.
                          (iv) Scope of review.--For an appeal taken 
                      under this subparagraph, review shall be limited 
                      to whether the determination of the Secretary that 
                      a covered financial company is in default or in 
                      danger of default and satisfies the definition of 
                      a financial company under section 201(a)(11) is 
                      arbitrary and capricious.
                    (B) Appeal to the supreme court.--
                          (i) In <<NOTE: Deadline.>> general.--A 
                      petition for a writ of certiorari to review a 
                      decision of the Court of Appeals under 
                      subparagraph (A) may be filed by the Secretary or 
                      the covered financial company, through its board 
                      of directors, notwithstanding section 
                      210(a)(1)(A)(i), with the Supreme Court of the 
                      United States, not later than 30 days after the 
                      date of the final decision of the Court of 
                      Appeals, and the Supreme Court shall have 
                      discretionary jurisdiction to review such 
                      decision.
                          (ii) Written statement.--
                      In <<NOTE: Records.>> the event of a petition 
                      under clause (i), the Court of Appeals shall 
                      immediately provide for the record a written 
                      statement of each reason for its decision.
                          (iii) Expedition.--The Supreme Court shall 
                      consider any petition under this subparagraph on 
                      an expedited basis.
                          (iv) Scope of review.--Review by the Supreme 
                      Court under this subparagraph shall be limited to 
                      whether the determination of the Secretary that 
                      the covered financial company is in default or in 
                      danger of default and satisfies the definition of 
                      a financial company under section 201(a)(11) is 
                      arbitrary and capricious.

    (b) Establishment and Transmittal of Rules and Procedures.--

[[Page 124 STAT. 1447]]

            (1) In general.--Not <<NOTE: Deadline.>> later than 6 months 
        after the date of enactment of this Act, the Court shall 
        establish such rules and procedures as may be necessary to 
        ensure the orderly conduct of proceedings, including rules and 
        procedures to ensure that the 24-hour deadline is met and that 
        the Secretary shall have an ongoing opportunity to amend and 
        refile petitions under subsection (a)(1).
            (2) Publication of rules.--The rules and procedures 
        established under paragraph (1), and any modifications of such 
        rules and procedures, shall be recorded and shall be transmitted 
        to--
                    (A) the Committee on the Judiciary of the Senate;
                    (B) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate;
                    (C) the Committee on the Judiciary of the House of 
                Representatives; and
                    (D) the Committee on Financial Services of the House 
                of Representatives.

    (c) Provisions Applicable to Financial Companies.--
            (1) Bankruptcy code.--Except as provided in this subsection, 
        the provisions of the Bankruptcy Code and rules issued 
        thereunder or otherwise applicable insolvency law, and not the 
        provisions of this title, shall apply to financial companies 
        that are not covered financial companies for which the 
        Corporation has been appointed as receiver.
            (2) This title.--The provisions of this title shall 
        exclusively apply to and govern all matters relating to covered 
        financial companies for which the Corporation is appointed as 
        receiver, and no provisions of the Bankruptcy Code or the rules 
        issued thereunder shall apply in such cases, except as expressly 
        provided in this title.

    (d) Time Limit on Receivership Authority.--
            (1) Baseline period.--Any appointment of the Corporation as 
        receiver under this section shall terminate at the end of the 3-
        year period beginning on the date on which such appointment is 
        made.
            (2) Extension of time limit.--
        The <<NOTE: Certification.>> time limit established in paragraph 
        (1) may be extended by the Corporation for up to 1 additional 
        year, if the Chairperson of the Corporation determines and 
        certifies in writing to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives that continuation of 
        the receivership is necessary--
                    (A) to--
                          (i) maximize the net present value return from 
                      the sale or other disposition of the assets of the 
                      covered financial company; or
                          (ii) minimize the amount of loss realized upon 
                      the sale or other disposition of the assets of the 
                      covered financial company; and
                    (B) to protect the stability of the financial system 
                of the United States.
            (3) Second extension of time limit.--
                    (A) In general.--The time limit under this 
                subsection, as extended under paragraph (2), may be 
                extended for

[[Page 124 STAT. 1448]]

                up to 1 additional year, if the Chairperson of the 
                Corporation, with the concurrence of the Secretary, 
                submits the certifications described in paragraph (2).
                    (B) Additional report required.--Not later than 30 
                days after the date of commencement of the extension 
                under subparagraph (A), the Corporation shall submit a 
                report to the Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on Financial 
                Services of the House of Representatives describing the 
                need for the extension and the specific plan of the 
                Corporation to conclude the receivership before the end 
                of the second extension.
            (4) Ongoing litigation.--The <<NOTE: Deadline. Termination 
        date.>> time limit under this subsection, as extended under 
        paragraph (3), may be further extended solely for the purpose of 
        completing ongoing litigation in which the Corporation as 
        receiver is a party, provided that the appointment of the 
        Corporation as receiver shall terminate not later than 90 days 
        after the date of completion of such litigation, if--
                    (A) the Council determines that the Corporation used 
                its best efforts to conclude the receivership in 
                accordance with its plan before the end of the time 
                limit described in paragraph (3);
                    (B) the Council determines that the completion of 
                longer-term responsibilities in the form of ongoing 
                litigation justifies the need for an extension; and
                    (C) <<NOTE: Reports. Deadline.>> the Corporation 
                submits a report approved by the Council not later than 
                30 days after the date of the determinations by the 
                Council under subparagraphs (A) and (B) to the Committee 
                on Banking, Housing, and Urban Affairs of the Senate and 
                the Committee on Financial Services of the House of 
                Representatives, describing--
                          (i) the ongoing litigation justifying the need 
                      for an extension; and
                          (ii) the specific plan of the Corporation to 
                      complete the litigation and conclude the 
                      receivership.
            (5) Regulations.--The Corporation may issue regulations 
        governing the termination of receiverships under this title.
            (6) No liability.--The Corporation and the Deposit Insurance 
        Fund shall not be liable for unresolved claims arising from the 
        receivership after the termination of the receivership.

    (e) Study of Bankruptcy and Orderly Liquidation Process for 
Financial Companies.--
            (1) Study.--
                    (A) In general.--The Administrative Office of the 
                United States Courts and the Comptroller General of the 
                United States shall each monitor the activities of the 
                Court, and each such Office shall conduct separate 
                studies regarding the bankruptcy and orderly liquidation 
                process for financial companies under the Bankruptcy 
                Code.
                    (B) Issues to be studied.--
                In <<NOTE: Evaluation.>> conducting the study under 
                subparagraph (A), the Administrative Office of the 
                United States Courts and the Comptroller General of the 
                United States each shall evaluate--
                          (i) the effectiveness of chapter 7 or chapter 
                      11 of the Bankruptcy Code in facilitating the 
                      orderly liquidation or reorganization of financial 
                      companies;

[[Page 124 STAT. 1449]]

                          (ii) ways to maximize the efficiency and 
                      effectiveness of the Court; and
                          (iii) ways to make the orderly liquidation 
                      process under the Bankruptcy Code for financial 
                      companies more effective.
            (2) Reports.--Not later than 1 year after the date of 
        enactment of this Act, in each successive year until the third 
        year, and every fifth year after that date of enactment, the 
        Administrative Office of the United States Courts and the 
        Comptroller General of the United States shall submit to the 
        Committee on Banking, Housing, and Urban Affairs and the 
        Committee on the Judiciary of the Senate and the Committee on 
        Financial Services and the Committee on the Judiciary of the 
        House of Representatives separate reports summarizing the 
        results of the studies conducted under paragraph (1).

    (f) Study of International Coordination Relating to Bankruptcy 
Process for Financial Companies.--
            (1) Study.--
                    (A) In general.--The Comptroller General of the 
                United States shall conduct a study regarding 
                international coordination relating to the orderly 
                liquidation of financial companies under the Bankruptcy 
                Code.
                    (B) Issues to be studied.--In conducting the study 
                under subparagraph (A), the Comptroller General of the 
                United States shall evaluate, with respect to the 
                bankruptcy process for financial companies--
                          (i) the extent to which international 
                      coordination currently exists;
                          (ii) current mechanisms and structures for 
                      facilitating international cooperation;
                          (iii) barriers to effective international 
                      coordination; and
                          (iv) ways to increase and make more effective 
                      international coordination.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General of the United 
        States shall submit to the Committee on Banking, Housing, and 
        Urban Affairs and the Committee on the Judiciary of the Senate 
        and the Committee on Financial Services and the Committee on the 
        Judiciary of the House of Representatives and the Secretary a 
        report summarizing the results of the study conducted under 
        paragraph (1).

    (g) Study of Prompt Corrective Action Implementation by the 
Appropriate Federal Agencies.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study regarding the implementation of prompt 
        corrective action by the appropriate Federal banking agencies.
            (2) Issues to be studied.--
        In <<NOTE: Evaluation.>> conducting the study under paragraph 
        (1), the Comptroller General shall evaluate--
                    (A) the effectiveness of implementation of prompt 
                corrective action by the appropriate Federal banking 
                agencies and the resolution of insured depository 
                institutions by the Corporation; and
                    (B) ways to make prompt corrective action a more 
                effective tool to resolve the insured depository 
                institutions at the least possible long-term cost to the 
                Deposit Insurance Fund.

[[Page 124 STAT. 1450]]

            (3) Report to council.--Not later than 1 year after the date 
        of enactment of this Act, the Comptroller General shall submit a 
        report to the Council on the results of the study conducted 
        under this subsection.
            (4) Council report of action.--Not later than 6 months after 
        the date of receipt of the report from the Comptroller General 
        under paragraph (3), the Council shall submit a report to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives on actions taken in response to the report, 
        including any recommendations made to the Federal primary 
        financial regulatory agencies under section 120.
SEC. 203. <<NOTE: 12 USC 5383.>> SYSTEMIC RISK DETERMINATION.

    (a) Written Recommendation and Determination.--
            (1) Vote required.--
                    (A) In general.--On their own initiative, or at the 
                request of the Secretary, the Corporation and the Board 
                of Governors shall consider whether to make a written 
                recommendation described in paragraph (2) with respect 
                to whether the Secretary should appoint the Corporation 
                as receiver for a financial company. Such recommendation 
                shall be made upon a vote of not fewer than \2/3\ of the 
                members of the Board of Governors then serving and \2/3\ 
                of the members of the board of directors of the 
                Corporation then serving.
                    (B) Cases involving brokers or dealers.--In the case 
                of a broker or dealer, or in which the largest United 
                States subsidiary (as measured by total assets as of the 
                end of the previous calendar quarter) of a financial 
                company is a broker or dealer, the Commission and the 
                Board of Governors, at the request of the Secretary, or 
                on their own initiative, shall consider whether to make 
                the written recommendation described in paragraph (2) 
                with respect to the financial company. Subject to the 
                requirements in paragraph (2), such recommendation shall 
                be made upon a vote of not fewer than \2/3\ of the 
                members of the Board of Governors then serving and \2/3\ 
                of the members of the Commission then serving, and in 
                consultation with the Corporation.
                    (C) Cases involving insurance companies.--In the 
                case of an insurance company, or in which the largest 
                United States subsidiary (as measured by total assets as 
                of the end of the previous calendar quarter) of a 
                financial company is an insurance company, the Director 
                of the Federal Insurance Office and the Board of 
                Governors, at the request of the Secretary or on their 
                own initiative, shall consider whether to make the 
                written recommendation described in paragraph (2) with 
                respect to the financial company. Subject to the 
                requirements in paragraph (2), such recommendation shall 
                be made upon a vote of not fewer than \2/3\ of the Board 
                of Governors then serving and the affirmative approval 
                of the Director of the Federal Insurance Office, and in 
                consultation with the Corporation.
            (2) Recommendation required.--Any written recommendation 
        pursuant to paragraph (1) shall contain--

[[Page 124 STAT. 1451]]

                    (A) an evaluation of whether the financial company 
                is in default or in danger of default;
                    (B) a description of the effect that the default of 
                the financial company would have on financial stability 
                in the United States;
                    (C) a description of the effect that the default of 
                the financial company would have on economic conditions 
                or financial stability for low income, minority, or 
                underserved communities;
                    (D) a recommendation regarding the nature and the 
                extent of actions to be taken under this title regarding 
                the financial company;
                    (E) an evaluation of the likelihood of a private 
                sector alternative to prevent the default of the 
                financial company;
                    (F) an evaluation of why a case under the Bankruptcy 
                Code is not appropriate for the financial company;
                    (G) an evaluation of the effects on creditors, 
                counterparties, and shareholders of the financial 
                company and other market participants; and
                    (H) an evaluation of whether the company satisfies 
                the definition of a financial company under section 201.

    (b) Determination by the Secretary.--Notwithstanding any other 
provision of Federal or State law, the Secretary shall take action in 
accordance with section 202(a)(1)(A), if, upon the written 
recommendation under subsection (a), the Secretary (in consultation with 
the President) determines that--
            (1) the financial company is in default or in danger of 
        default;
            (2) the failure of the financial company and its resolution 
        under otherwise applicable Federal or State law would have 
        serious adverse effects on financial stability in the United 
        States;
            (3) no viable private sector alternative is available to 
        prevent the default of the financial company;
            (4) any effect on the claims or interests of creditors, 
        counterparties, and shareholders of the financial company and 
        other market participants as a result of actions to be taken 
        under this title is appropriate, given the impact that any 
        action taken under this title would have on financial stability 
        in the United States;
            (5) any action under section 204 would avoid or mitigate 
        such adverse effects, taking into consideration the 
        effectiveness of the action in mitigating potential adverse 
        effects on the financial system, the cost to the general fund of 
        the Treasury, and the potential to increase excessive risk 
        taking on the part of creditors, counterparties, and 
        shareholders in the financial company;
            (6) a Federal regulatory agency has ordered the financial 
        company to convert all of its convertible debt instruments that 
        are subject to the regulatory order; and
            (7) the company satisfies the definition of a financial 
        company under section 201.

    (c) Documentation and Review.--
            (1) In general.--The Secretary shall--
                    (A) document any determination under subsection (b);
                    (B) retain the documentation for review under 
                paragraph (2); and

[[Page 124 STAT. 1452]]

                    (C) <<NOTE: Notification.>> notify the covered 
                financial company and the Corporation of such 
                determination.
            (2) Report to congress.--Not later than 24 hours after the 
        date of appointment of the Corporation as receiver for a covered 
        financial company, the Secretary shall provide written notice of 
        the recommendations and determinations reached in accordance 
        with subsections (a) and (b) to the Majority Leader and the 
        Minority Leader of the Senate and the Speaker and the Minority 
        Leader of the House of Representatives, the Committee on 
        Banking, Housing, and Urban Affairs of the Senate, and the 
        Committee on Financial Services of the House of Representatives, 
        which shall consist of a summary of the basis for the 
        determination, including, to the extent available at the time of 
        the determination--
                    (A) the size and financial condition of the covered 
                financial company;
                    (B) the sources of capital and credit support that 
                were available to the covered financial company;
                    (C) the operations of the covered financial company 
                that could have had a significant impact on financial 
                stability, markets, or both;
                    (D) identification of the banks and financial 
                companies which may be able to provide the services 
                offered by the covered financial company;
                    (E) any potential international ramifications of 
                resolution of the covered financial company under other 
                applicable insolvency law;
                    (F) an estimate of the potential effect of the 
                resolution of the covered financial company under other 
                applicable insolvency law on the financial stability of 
                the United States;
                    (G) the potential effect of the appointment of a 
                receiver by the Secretary on consumers;
                    (H) the potential effect of the appointment of a 
                receiver by the Secretary on the financial system, 
                financial markets, and banks and other financial 
                companies; and
                    (I) whether resolution of the covered financial 
                company under other applicable insolvency law would 
                cause banks or other financial companies to experience 
                severe liquidity distress.
            (3) Reports to congress and the public.--
                    (A) In general.--Not later than 60 days after the 
                date of appointment of the Corporation as receiver for a 
                covered financial company, the Corporation shall file a 
                report with the Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on Financial 
                Services of the House of Representatives--
                          (i) setting forth information on the financial 
                      condition of the covered financial company as of 
                      the date of the appointment, including a 
                      description of its assets and liabilities;
                          (ii) describing the plan of, and actions taken 
                      by, the Corporation to wind down the covered 
                      financial company;
                          (iii) explaining each instance in which the 
                      Corporation waived any applicable requirements of 
                      part 366

[[Page 124 STAT. 1453]]

                      of title 12, Code of Federal Regulations (or any 
                      successor thereto) with respect to conflicts of 
                      interest by any person in the private sector who 
                      was retained to provide services to the 
                      Corporation in connection with such receivership;
                          (iv) describing the reasons for the provision 
                      of any funding to the receivership out of the 
                      Fund;
                          (v) setting forth the expected costs of the 
                      orderly liquidation of the covered financial 
                      company;
                          (vi) setting forth the identity of any 
                      claimant that is treated in a manner different 
                      from other similarly situated claimants under 
                      subsection (b)(4), (d)(4), or (h)(5)(E), the 
                      amount of any additional payment to such claimant 
                      under subsection (d)(4), and the reason for any 
                      such action; and
                          (vii) <<NOTE: Publication. Web 
                      posting.>> which report the Corporation shall 
                      publish on an online website maintained by the 
                      Corporation, subject to maintaining appropriate 
                      confidentiality.
                    (B) Amendments.--The <<NOTE: Deadline.>> Corporation 
                shall, on a timely basis, not less frequently than 
                quarterly, amend or revise and resubmit the reports 
                prepared under this paragraph, as necessary.
                    (C) Congressional testimony.--
                The <<NOTE: Deadline.>> Corporation and the primary 
                financial regulatory agency, if any, of the financial 
                company for which the Corporation was appointed receiver 
                under this title shall appear before Congress, if 
                requested, not later than 30 days after the date on 
                which the Corporation first files the reports required 
                under subparagraph (A).
            (4) Default or in danger of default.--For purposes of this 
        title, a financial company shall be considered to be in default 
        or in danger of default if, as determined in accordance with 
        subsection (b)--
                    (A) a case has been, or likely will promptly be, 
                commenced with respect to the financial company under 
                the Bankruptcy Code;
                    (B) the financial company has incurred, or is likely 
                to incur, losses that will deplete all or substantially 
                all of its capital, and there is no reasonable prospect 
                for the company to avoid such depletion;
                    (C) the assets of the financial company are, or are 
                likely to be, less than its obligations to creditors and 
                others; or
                    (D) the financial company is, or is likely to be, 
                unable to pay its obligations (other than those subject 
                to a bona fide dispute) in the normal course of 
                business.
            (5) GAO review.--The Comptroller General of the United 
        States shall review and report to Congress on any determination 
        under subsection (b), that results in the appointment of the 
        Corporation as receiver, including--
                    (A) the basis for the determination;
                    (B) the purpose for which any action was taken 
                pursuant thereto;
                    (C) the likely effect of the determination and such 
                action on the incentives and conduct of financial 
                companies and their creditors, counterparties, and 
                shareholders; and

[[Page 124 STAT. 1454]]

                    (D) the likely disruptive effect of the 
                determination and such action on the reasonable 
                expectations of creditors, counterparties, and 
                shareholders, taking into account the impact any action 
                under this title would have on financial stability in 
                the United States, including whether the rights of such 
                parties will be disrupted.

    (d) Corporation Policies and Procedures.--As soon as is practicable 
after the date of enactment of this Act, the Corporation shall establish 
policies and procedures that are acceptable to the Secretary governing 
the use of funds available to the Corporation to carry out this title, 
including the terms and conditions for the provision and use of funds 
under sections 204(d), 210(h)(2)(G)(iv), and 210(h)(9).
    (e) Treatment of Insurance Companies and Insurance Company 
Subsidiaries.--
            (1) In general.--Notwithstanding subsection (b), if an 
        insurance company is a covered financial company or a subsidiary 
        or affiliate of a covered financial company, the liquidation or 
        rehabilitation of such insurance company, and any subsidiary or 
        affiliate of such company that is not excepted under paragraph 
        (2), shall be conducted as provided under applicable State law.
            (2) Exception for subsidiaries and affiliates.--The 
        requirement of paragraph (1) shall not apply with respect to any 
        subsidiary or affiliate of an insurance company that is not 
        itself an insurance company.
            (3) Backup <<NOTE: Time period.>> authority.--
        Notwithstanding paragraph (1), with respect to a covered 
        financial company described in paragraph (1), if, after the end 
        of the 60-day period beginning on the date on which a 
        determination is made under section 202(a) with respect to such 
        company, the appropriate regulatory agency has not filed the 
        appropriate judicial action in the appropriate State court to 
        place such company into orderly liquidation under the laws and 
        requirements of the State, the Corporation shall have the 
        authority to stand in the place of the appropriate regulatory 
        agency and file the appropriate judicial action in the 
        appropriate State court to place such company into orderly 
        liquidation under the laws and requirements of the State.
SEC. 204. <<NOTE: 12 USC 5384.>> ORDERLY LIQUIDATION OF COVERED 
                        FINANCIAL COMPANIES.

    (a) Purpose of Orderly Liquidation Authority.--It is the purpose of 
this title to provide the necessary authority to liquidate failing 
financial companies that pose a significant risk to the financial 
stability of the United States in a manner that mitigates such risk and 
minimizes moral hazard. The authority provided in this title shall be 
exercised in the manner that best fulfills such purpose, so that--
            (1) creditors and shareholders will bear the losses of the 
        financial company;
            (2) management responsible for the condition of the 
        financial company will not be retained; and
            (3) the Corporation and other appropriate agencies will take 
        all steps necessary and appropriate to assure that all parties, 
        including management, directors, and third parties, having 
        responsibility for the condition of the financial company

[[Page 124 STAT. 1455]]

        bear losses consistent with their responsibility, including 
        actions for damages, restitution, and recoupment of compensation 
        and other gains not compatible with such responsibility.

    (b) Corporation as Receiver.--Upon the appointment of the 
Corporation under section 202, the Corporation shall act as the receiver 
for the covered financial company, with all of the rights and 
obligations set forth in this title.
    (c) Consultation.--The Corporation, as receiver--
            (1) shall consult with the primary financial regulatory 
        agency or agencies of the covered financial company and its 
        covered subsidiaries for purposes of ensuring an orderly 
        liquidation of the covered financial company;
            (2) may consult with, or under subsection (a)(1)(B)(v) or 
        (a)(1)(L) of section 210, acquire the services of, any outside 
        experts, as appropriate to inform and aid the Corporation in the 
        orderly liquidation process;
            (3) shall consult with the primary financial regulatory 
        agency or agencies of any subsidiaries of the covered financial 
        company that are not covered subsidiaries, and coordinate with 
        such regulators regarding the treatment of such solvent 
        subsidiaries and the separate resolution of any such insolvent 
        subsidiaries under other governmental authority, as appropriate; 
        and
            (4) shall consult with the Commission and the Securities 
        Investor Protection Corporation in the case of any covered 
        financial company for which the Corporation has been appointed 
        as receiver that is a broker or dealer registered with the 
        Commission under section 15(b) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78o(b)) and is a member of the Securities 
        Investor Protection Corporation, for the purpose of determining 
        whether to transfer to a bridge financial company organized by 
        the Corporation as receiver, without consent of any customer, 
        customer accounts of the covered financial company.

    (d) Funding for Orderly Liquidation.--Upon its appointment as 
receiver for a covered financial company, and thereafter as the 
Corporation may, in its discretion, determine to be necessary or 
appropriate, the Corporation may make available to the receivership, 
subject to the conditions set forth in section 206 and subject to the 
plan described in section 210(n)(9), funds for the orderly liquidation 
of the covered financial company. All funds provided by the Corporation 
under this subsection shall have a priority of claims under subparagraph 
(A) or (B) of section 210(b)(1), as applicable, including funds used 
for--
            (1) making loans to, or purchasing any debt obligation of, 
        the covered financial company or any covered subsidiary;
            (2) purchasing or guaranteeing against loss the assets of 
        the covered financial company or any covered subsidiary, 
        directly or through an entity established by the Corporation for 
        such purpose;
            (3) assuming or guaranteeing the obligations of the covered 
        financial company or any covered subsidiary to 1 or more third 
        parties;
            (4) taking a lien on any or all assets of the covered 
        financial company or any covered subsidiary, including a first 
        priority lien on all unencumbered assets of the covered 
        financial company or any covered subsidiary to secure repayment 
        of any transactions conducted under this subsection;

[[Page 124 STAT. 1456]]

            (5) selling or transferring all, or any part, of such 
        acquired assets, liabilities, or obligations of the covered 
        financial company or any covered subsidiary; and
            (6) making payments pursuant to subsections (b)(4), (d)(4), 
        and (h)(5)(E) of section 210.
SEC. 205. <<NOTE: 12 USC 5385.>> ORDERLY LIQUIDATION OF COVERED 
                        BROKERS AND DEALERS.

    (a) Appointment of SIPC as Trustee.--
            (1) Appointment.--Upon the appointment of the Corporation as 
        receiver for any covered broker or dealer, the Corporation shall 
        appoint, without any need for court approval, the Securities 
        Investor Protection Corporation to act as trustee for the 
        liquidation under the Securities Investor Protection Act of 1970 
        (15 U.S.C. 78aaa et seq.) of the covered broker or dealer.
            (2) Actions by sipc.--
                    (A) Filing.--Upon appointment of SIPC under 
                paragraph (1), SIPC shall promptly file with any Federal 
                district court of competent jurisdiction specified in 
                section 21 or 27 of the Securities Exchange Act of 1934 
                (15 U.S.C. 78u, 78aa), an application for a protective 
                decree under the Securities Investor Protection Act of 
                1970 (15 U.S.C. 78aaa et seq.) as to the covered broker 
                or dealer. The Federal district court shall accept and 
                approve the filing, including outside of normal business 
                hours, and shall immediately issue the protective decree 
                as to the covered broker or dealer.
                    (B) Administration by sipc.--Following entry of the 
                protective decree, and except as otherwise provided in 
                this section, the determination of claims and the 
                liquidation of assets retained in the receivership of 
                the covered broker or dealer and not transferred to the 
                bridge financial company shall be administered under the 
                Securities Investor Protection Act of 1970 (15 U.S.C. 
                78aaa et seq.) by SIPC, as trustee for the covered 
                broker or dealer.
                    (C) Definition of filing date.--For purposes of the 
                liquidation proceeding, the term ``filing date'' means 
                the date on which the Corporation is appointed as 
                receiver of the covered broker or dealer.
                    (D) Determination of claims.--As trustee for the 
                covered broker or dealer, SIPC shall determine and 
                satisfy, consistent with this title and with the 
                Securities Investor Protection Act of 1970 (15 U.S.C. 
                78aaa et seq.), all claims against the covered broker or 
                dealer arising on or before the filing date.

    (b) Powers and Duties of SIPC.--
            (1) In general.--Except as provided in this section, upon 
        its appointment as trustee for the liquidation of a covered 
        broker or dealer, SIPC shall have all of the powers and duties 
        provided by the Securities Investor Protection Act of 1970 (15 
        U.S.C. 78aaa et seq.), including, without limitation, all rights 
        of action against third parties, and shall conduct such 
        liquidation in accordance with the terms of the Securities 
        Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), 
        except that SIPC shall have no powers or duties with respect to 
        assets and liabilities transferred by the Corporation from the 
        covered

[[Page 124 STAT. 1457]]

        broker or dealer to any bridge financial company established in 
        accordance with this title.
            (2) Limitation of powers.--The exercise by SIPC of powers 
        and functions as trustee under subsection (a) shall not impair 
        or impede the exercise of the powers and duties of the 
        Corporation with regard to--
                    (A) any action, except as otherwise provided in this 
                title--
                          (i) to make funds available under section 
                      204(d);
                          (ii) to organize, establish, operate, or 
                      terminate any bridge financial company;
                          (iii) to transfer assets and liabilities;
                          (iv) to enforce or repudiate contracts; or
                          (v) to take any other action relating to such 
                      bridge financial company under section 210; or
                    (B) determining claims under subsection (e).
            (3) Protective decree.--SIPC and the Corporation, in 
        consultation with the Commission, shall jointly determine the 
        terms of the protective decree to be filed by SIPC with any 
        court of competent jurisdiction under section 21 or 27 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as 
        required by subsection (a).
            (4) Qualified financial contracts.--Notwithstanding any 
        provision of the Securities Investor Protection Act of 1970 (15 
        U.S.C. 78aaa et seq.) to the contrary (including section 
        5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights 
        and obligations of any party to a qualified financial contract 
        (as that term is defined in section 210(c)(8)) to which a 
        covered broker or dealer for which the Corporation has been 
        appointed receiver is a party shall be governed exclusively by 
        section 210, including the limitations and restrictions 
        contained in section 210(c)(10)(B).

    (c) Limitation on Court Action.--Except as otherwise provided in 
this title, no court may take any action, including any action pursuant 
to the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et 
seq.) or the Bankruptcy Code, to restrain or affect the exercise of 
powers or functions of the Corporation as receiver for a covered broker 
or dealer and any claims against the Corporation as such receiver shall 
be determined in accordance with subsection (e) and such claims shall be 
limited to money damages.
    (d) Actions by Corporation as Receiver.--
            (1) In general.--Notwithstanding any other provision of this 
        title, no action taken by the Corporation as receiver with 
        respect to a covered broker or dealer shall--
                    (A) adversely affect the rights of a customer to 
                customer property or customer name securities;
                    (B) diminish the amount or timely payment of net 
                equity claims of customers; or
                    (C) otherwise impair the recoveries provided to a 
                customer under the Securities Investor Protection Act of 
                1970 (15 U.S.C. 78aaa et seq.).
            (2) Net proceeds.--The net proceeds from any transfer, sale, 
        or disposition of assets of the covered broker or dealer, or 
        proceeds thereof by the Corporation as receiver for the covered 
        broker or dealer shall be for the benefit of the estate of the 
        covered broker or dealer, as provided in this title.

[[Page 124 STAT. 1458]]

    (e) Claims Against the Corporation as Receiver.--Any claim against 
the Corporation as receiver for a covered broker or dealer for assets 
transferred to a bridge financial company established with respect to 
such covered broker or dealer--
            (1) shall be determined in accordance with section 
        210(a)(2); and
            (2) may be reviewed by the appropriate district or 
        territorial court of the United States in accordance with 
        section 210(a)(5).

    (f) Satisfaction of Customer Claims.--
            (1) Obligations to customers.--Notwithstanding any other 
        provision of this title, all obligations of a covered broker or 
        dealer or of any bridge financial company established with 
        respect to such covered broker or dealer to a customer relating 
        to, or net equity claims based upon, customer property or 
        customer name securities shall be promptly discharged by SIPC, 
        the Corporation, or the bridge financial company, as applicable, 
        by the delivery of securities or the making of payments to or 
        for the account of such customer, in a manner and in an amount 
        at least as beneficial to the customer as would have been the 
        case had the actual proceeds realized from the liquidation of 
        the covered broker or dealer under this title been distributed 
        in a proceeding under the Securities Investor Protection Act of 
        1970 (15 U.S.C. 78aaa et seq.) without the appointment of the 
        Corporation as receiver and without any transfer of assets or 
        liabilities to a bridge financial company, and with a filing 
        date as of the date on which the Corporation is appointed as 
        receiver.
            (2) Satisfaction of claims by sipc.--SIPC, as trustee for a 
        covered broker or dealer, shall satisfy customer claims in the 
        manner and amount provided under the Securities Investor 
        Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as if the 
        appointment of the Corporation as receiver had not occurred, and 
        with a filing date as of the date on which the Corporation is 
        appointed as receiver. The Corporation shall satisfy customer 
        claims, to the extent that a customer would have received more 
        securities or cash with respect to the allocation of customer 
        property had the covered financial company been subject to a 
        proceeding under the Securities Investor Protection Act (15 
        U.S.C. 78aaa et seq.) without the appointment of the Corporation 
        as receiver, and with a filing date as of the date on which the 
        Corporation is appointed as receiver.

    (g) Priorities.--
            (1) Customer property.--As trustee for a covered broker or 
        dealer, SIPC shall allocate customer property and deliver 
        customer name securities in accordance with section 8(c) of the 
        Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-
        2(c)).
            (2) Other claims.--All claims other than those described in 
        paragraph (1) (including any unpaid claim by a customer for the 
        allowed net equity claim of such customer from customer 
        property) shall be paid in accordance with the priorities in 
        section 210(b).

    (h) Rulemaking.--The Commission and the Corporation, after 
consultation with SIPC, shall jointly issue rules to implement this 
section.

[[Page 124 STAT. 1459]]

SEC. 206. <<NOTE: 12 USC 5386.>> MANDATORY TERMS AND CONDITIONS 
                        FOR ALL ORDERLY LIQUIDATION ACTIONS.

    In taking action under this title, the Corporation shall--
            (1) determine that such action is necessary for purposes of 
        the financial stability of the United States, and not for the 
        purpose of preserving the covered financial company;
            (2) ensure that the shareholders of a covered financial 
        company do not receive payment until after all other claims and 
        the Fund are fully paid;
            (3) ensure that unsecured creditors bear losses in 
        accordance with the priority of claim provisions in section 210;
            (4) ensure that management responsible for the failed 
        condition of the covered financial company is removed (if such 
        management has not already been removed at the time at which the 
        Corporation is appointed receiver);
            (5) ensure that the members of the board of directors (or 
        body performing similar functions) responsible for the failed 
        condition of the covered financial company are removed, if such 
        members have not already been removed at the time the 
        Corporation is appointed as receiver; and
            (6) not take an equity interest in or become a shareholder 
        of any covered financial company or any covered subsidiary.
SEC. 207. <<NOTE: 12 USC 5387.>> DIRECTORS NOT LIABLE FOR 
                        ACQUIESCING IN APPOINTMENT OF RECEIVER.

    The members of the board of directors (or body performing similar 
functions) of a covered financial company shall not be liable to the 
shareholders or creditors thereof for acquiescing in or consenting in 
good faith to the appointment of the Corporation as receiver for the 
covered financial company under section 203.
SEC. 208. <<NOTE: Effective dates. 12 USC 5388.>> DISMISSAL AND 
                        EXCLUSION OF OTHER ACTIONS.

    (a) In General.--Effective as of the date of the appointment of the 
Corporation as receiver for the covered financial company under section 
202 or the appointment of SIPC as trustee for a covered broker or dealer 
under section 205, as applicable, any case or proceeding commenced with 
respect to the covered financial company under the Bankruptcy Code or 
the Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.) 
shall be dismissed, upon notice to the bankruptcy court (with respect to 
a case commenced under the Bankruptcy Code), and upon notice to SIPC 
(with respect to a covered broker or dealer) and no such case or 
proceeding may be commenced with respect to a covered financial company 
at any time while the orderly liquidation is pending.
    (b) Revesting of Assets.--Effective as of the date of appointment of 
the Corporation as receiver, the assets of a covered financial company 
shall, to the extent they have vested in any entity other than the 
covered financial company as a result of any case or proceeding 
commenced with respect to the covered financial company under the 
Bankruptcy Code, the Securities Investor Protection Act of 1970 (15 
U.S.C. 78aaa et seq.), or any similar provision of State liquidation or 
insolvency law applicable to the covered financial company, revest in 
the covered financial company.
    (c) Limitation.--Notwithstanding subsections (a) and (b), any order 
entered or other relief granted by a bankruptcy court prior to the date 
of appointment of the Corporation as receiver shall

[[Page 124 STAT. 1460]]

continue with the same validity as if an orderly liquidation had not 
been commenced.
SEC. 209. <<NOTE: 12 USC 5389.>> RULEMAKING; NON-CONFLICTING LAW.

    The Corporation shall, in consultation with the Council, prescribe 
such rules or regulations as the Corporation considers necessary or 
appropriate to implement this title, including rules and regulations 
with respect to the rights, interests, and priorities of creditors, 
counterparties, security entitlement holders, or other persons with 
respect to any covered financial company or any assets or other property 
of or held by such covered financial company, and address the potential 
for conflicts of interest between or among individual receiverships 
established under this title or under the Federal Deposit Insurance Act. 
To the extent possible, the Corporation shall seek to harmonize 
applicable rules and regulations promulgated under this section with the 
insolvency laws that would otherwise apply to a covered financial 
company.
SEC. 210. <<NOTE: 12 USC 5390.>> POWERS AND DUTIES OF THE 
                        CORPORATION.

    (a) Powers and Authorities.--
            (1) General powers.--
                    (A) Successor to covered financial company.--The 
                Corporation shall, upon appointment as receiver for a 
                covered financial company under this title, succeed to--
                          (i) all rights, titles, powers, and privileges 
                      of the covered financial company and its assets, 
                      and of any stockholder, member, officer, or 
                      director of such company; and
                          (ii) title to the books, records, and assets 
                      of any previous receiver or other legal custodian 
                      of such covered financial company.
                    (B) Operation of the covered financial company 
                during the period of orderly liquidation.--The 
                Corporation, as receiver for a covered financial 
                company, may--
                          (i) take over the assets of and operate the 
                      covered financial company with all of the powers 
                      of the members or shareholders, the directors, and 
                      the officers of the covered financial company, and 
                      conduct all business of the covered financial 
                      company;
                          (ii) collect all obligations and money owed to 
                      the covered financial company;
                          (iii) perform all functions of the covered 
                      financial company, in the name of the covered 
                      financial company;
                          (iv) manage the assets and property of the 
                      covered financial company, consistent with 
                      maximization of the value of the assets in the 
                      context of the orderly liquidation; and
                          (v) provide by contract for assistance in 
                      fulfilling any function, activity, action, or duty 
                      of the Corporation as receiver.
                    (C) Functions of covered financial company officers, 
                directors, and shareholders.--The Corporation may 
                provide for the exercise of any function by any member 
                or stockholder, director, or officer of any covered 
                financial company for which the Corporation has been 
                appointed as receiver under this title.

[[Page 124 STAT. 1461]]

                    (D) Additional powers as receiver.--The Corporation 
                shall, as receiver for a covered financial company, and 
                subject to all legally enforceable and perfected 
                security interests and all legally enforceable security 
                entitlements in respect of assets held by the covered 
                financial company, liquidate, and wind-up the affairs of 
                a covered financial company, including taking steps to 
                realize upon the assets of the covered financial 
                company, in such manner as the Corporation deems 
                appropriate, including through the sale of assets, the 
                transfer of assets to a bridge financial company 
                established under subsection (h), or the exercise of any 
                other rights or privileges granted to the receiver under 
                this section.
                    (E) Additional powers with respect to failing 
                subsidiaries of a covered financial company.--
                          (i) In general.--In any case in which a 
                      receiver is appointed for a covered financial 
                      company under section 202, the Corporation may 
                      appoint itself as receiver of any covered 
                      subsidiary of the covered financial company that 
                      is organized under Federal law or the laws of any 
                      State, if the Corporation and the Secretary 
                      jointly determine that--
                                    (I) the covered subsidiary is in 
                                default or in danger of default;
                                    (II) such action would avoid or 
                                mitigate serious adverse effects on the 
                                financial stability or economic 
                                conditions of the United States; and
                                    (III) such action would facilitate 
                                the orderly liquidation of the covered 
                                financial company.
                          (ii) Treatment as covered financial company.--
                      If the Corporation is appointed as receiver of a 
                      covered subsidiary of a covered financial company 
                      under clause (i), the covered subsidiary shall 
                      thereafter be considered a covered financial 
                      company under this title, and the Corporation 
                      shall thereafter have all the powers and rights 
                      with respect to that covered subsidiary as it has 
                      with respect to a covered financial company under 
                      this title.
                    (F) Organization of bridge companies.--The 
                Corporation, as receiver for a covered financial 
                company, may organize a bridge financial company under 
                subsection (h).
                    (G) Merger; transfer of assets and liabilities.--
                          (i) In general.--Subject to clauses (ii) and 
                      (iii), the Corporation, as receiver for a covered 
                      financial company, may--
                                    (I) merge the covered financial 
                                company with another company; or
                                    (II) transfer any asset or liability 
                                of the covered financial company 
                                (including any assets and liabilities 
                                held by the covered financial company 
                                for security entitlement holders, any 
                                customer property, or any assets and 
                                liabilities associated with any trust or 
                                custody business) without obtaining any 
                                approval, assignment, or consent with 
                                respect to such transfer.
                          (ii) Federal agency approval; antitrust 
                      review.--With respect to a transaction described 
                      in

[[Page 124 STAT. 1462]]

                      clause (i)(I) that requires approval by a Federal 
                      agency--
                                    (I) the transaction may not be 
                                consummated before the 5th calendar day 
                                after the date of approval by the 
                                Federal agency responsible for such 
                                approval;
                                    (II) 
                                if, <<NOTE: Reports. Notification. Deadli
                                ne.>> in connection with any such 
                                approval, a report on competitive 
                                factors is required, the Federal agency 
                                responsible for such approval shall 
                                promptly notify the Attorney General of 
                                the United States of the proposed 
                                transaction, and the Attorney General 
                                shall provide the required report not 
                                later than 10 days after the date of the 
                                request; and
                                    (III) if <<NOTE: Termination 
                                date.>> notification under section 7A of 
                                the Clayton Act is required with respect 
                                to such transaction, then the required 
                                waiting period shall end on the 15th day 
                                after the date on which the Attorney 
                                General and the Federal Trade Commission 
                                receive such notification, unless the 
                                waiting period is terminated earlier 
                                under subsection (b)(2) of such section 
                                7A, or is extended pursuant to 
                                subsection (e)(2) of such section 7A.
                          (iii) Setoff.--Subject to the other provisions 
                      of this title, any transferee of assets from a 
                      receiver, including a bridge financial company, 
                      shall be subject to such claims or rights as would 
                      prevail over the rights of such transferee in such 
                      assets under applicable noninsolvency law.
                    (H) Payment of valid obligations.--The Corporation, 
                as receiver for a covered financial company, shall, to 
                the extent that funds are available, pay all valid 
                obligations of the covered financial company that are 
                due and payable at the time of the appointment of the 
                Corporation as receiver, in accordance with the 
                prescriptions and limitations of this title.
                    (I) Applicable noninsolvency law.--Except as may 
                otherwise be provided in this title, the applicable 
                noninsolvency law shall be determined by the 
                noninsolvency choice of law rules otherwise applicable 
                to the claims, rights, titles, persons, or entities at 
                issue.
                    (J) Subpoena authority.--
                          (i) In general.--The Corporation, as receiver 
                      for a covered financial company, may, for purposes 
                      of carrying out any power, authority, or duty with 
                      respect to the covered financial company 
                      (including determining any claim against the 
                      covered financial company and determining and 
                      realizing upon any asset of any person in the 
                      course of collecting money due the covered 
                      financial company), exercise any power established 
                      under section 8(n) of the Federal Deposit 
                      Insurance Act, as if the Corporation were the 
                      appropriate Federal banking agency for the covered 
                      financial company, and the covered financial 
                      company were an insured depository institution.
                          (ii) Rule of construction.--This subparagraph 
                      may not be construed as limiting any rights that 
                      the

[[Page 124 STAT. 1463]]

                      Corporation, in any capacity, might otherwise have 
                      to exercise any powers described in clause (i) or 
                      under any other provision of law.
                    (K) Incidental powers.--The Corporation, as receiver 
                for a covered financial company, may exercise all powers 
                and authorities specifically granted to receivers under 
                this title, and such incidental powers as shall be 
                necessary to carry out such powers under this title.
                    (L) Utilization of private sector.--In carrying out 
                its responsibilities in the management and disposition 
                of assets from the covered financial company, the 
                Corporation, as receiver for a covered financial 
                company, may utilize the services of private persons, 
                including real estate and loan portfolio asset 
                management, property management, auction marketing, 
                legal, and brokerage services, if such services are 
                available in the private sector, and the Corporation 
                determines that utilization of such services is 
                practicable, efficient, and cost effective.
                    (M) Shareholders and creditors of covered financial 
                company.--Notwithstanding any other provision of law, 
                the Corporation, as receiver for a covered financial 
                company, shall succeed by operation of law to the 
                rights, titles, powers, and privileges described in 
                subparagraph (A), and shall terminate all rights and 
                claims that the stockholders and creditors of the 
                covered financial company may have against the assets of 
                the covered financial company or the Corporation arising 
                out of their status as stockholders or creditors, except 
                for their right to payment, resolution, or other 
                satisfaction of their claims, as permitted under this 
                section. The Corporation shall ensure that shareholders 
                and unsecured creditors bear losses, consistent with the 
                priority of claims provisions under this section.
                    (N) Coordination with foreign financial 
                authorities.--The Corporation, as receiver for a covered 
                financial company, shall coordinate, to the maximum 
                extent possible, with the appropriate foreign financial 
                authorities regarding the orderly liquidation of any 
                covered financial company that has assets or operations 
                in a country other than the United States.
                    (O) Restriction on transfers.--
                          (i) Selection of accounts for transfer.--If 
                      the Corporation establishes one or more bridge 
                      financial companies with respect to a covered 
                      broker or dealer, the Corporation shall transfer 
                      to one of such bridge financial companies, all 
                      customer accounts of the covered broker or dealer, 
                      and all associated customer name securities and 
                      customer property, unless the Corporation, after 
                      consulting with the Commission and SIPC, 
                      determines that--
                                    (I) the customer accounts, customer 
                                name securities, and customer property 
                                are likely to be promptly transferred to 
                                another broker or dealer that is 
                                registered with the Commission under 
                                section 15(b) of the Securities Exchange 
                                Act of 1934 (15 U.S.C. 73o(b)) and is a 
                                member of SIPC; or
                                    (II) the transfer of the accounts to 
                                a bridge financial company would 
                                materially interfere with

[[Page 124 STAT. 1464]]

                                the ability of the Corporation to avoid 
                                or mitigate serious adverse effects on 
                                financial stability or economic 
                                conditions in the United States.
                          (ii) Transfer of property.--SIPC, as trustee 
                      for the liquidation of the covered broker or 
                      dealer, and the Commission shall provide any and 
                      all reasonable assistance necessary to complete 
                      such transfers by the Corporation.
                          (iii) Customer consent and court approval not 
                      required.--Neither customer consent nor court 
                      approval shall be required to transfer any 
                      customer accounts or associated customer name 
                      securities or customer property to a bridge 
                      financial company in accordance with this section.
                          (iv) Notification of sipc and sharing of 
                      information.--The Corporation shall identify to 
                      SIPC the customer accounts and associated customer 
                      name securities and customer property transferred 
                      to the bridge financial company. The Corporation 
                      and SIPC shall cooperate in the sharing of any 
                      information necessary for each entity to discharge 
                      its obligations under this title and under the 
                      Securities Investor Protection Act of 1970 (15 
                      U.S.C. 78aaa et seq.) including by providing 
                      access to the books and records of the covered 
                      financial company and any bridge financial company 
                      established in accordance with this title.
            (2) Determination of claims.--
                    (A) In general.--The <<NOTE: Reports.>> Corporation, 
                as receiver for a covered financial company, shall 
                report on claims, as set forth in section 203(c)(3). 
                Subject to paragraph (4) of this subsection, the 
                Corporation, as receiver for a covered financial 
                company, shall determine claims in accordance with the 
                requirements of this subsection and regulations 
                prescribed under section 209.
                    (B) Notice requirements.--
                The <<NOTE: Publication. Deadlines.>> Corporation, as 
                receiver for a covered financial company, in any case 
                involving the liquidation or winding up of the affairs 
                of a covered financial company, shall--
                          (i) promptly publish a notice to the creditors 
                      of the covered financial company to present their 
                      claims, together with proof, to the receiver by a 
                      date specified in the notice, which shall be not 
                      earlier than 90 days after the date of publication 
                      of such notice; and
                          (ii) republish such notice 1 month and 2 
                      months, respectively, after the date of 
                      publication under clause (i).
                    (C) Mailing required.--The Corporation as receiver 
                shall mail a notice similar to the notice published 
                under clause (i) or (ii) of subparagraph (B), at the 
                time of such publication, to any creditor shown on the 
                books and records of the covered financial company--
                          (i) at the last address of the creditor 
                      appearing in such books;
                          (ii) in any claim filed by the claimant; or
                          (iii) upon <<NOTE: Deadline.>> discovery of 
                      the name and address of a claimant not appearing 
                      on the books and records of the covered financial 
                      company, not later than 30

[[Page 124 STAT. 1465]]

                      days after the date of the discovery of such name 
                      and address.
            (3) Procedures for resolution of claims.--
                    (A) <<NOTE: Notification.>> Decision period.--
                          (i) In general.--Prior to the 180th day after 
                      the date on which a claim against a covered 
                      financial company is filed with the Corporation as 
                      receiver, or such later date as may be agreed as 
                      provided in clause (ii), the Corporation shall 
                      notify the claimant whether it allows or disallows 
                      the claim, in accordance with subparagraphs (B), 
                      (C), and (D).
                          (ii) Extension <<NOTE: Deadline.>> of time.--
                      By written agreement executed not later than 180 
                      days after the date on which a claim against a 
                      covered financial company is filed with the 
                      Corporation, the period described in clause (i) 
                      may be extended by written agreement between the 
                      claimant and the Corporation. Failure to notify 
                      the claimant of any disallowance within the time 
                      period set forth in clause (i), as it may be 
                      extended by agreement under this clause, shall be 
                      deemed to be a disallowance of such claim, and the 
                      claimant may file or continue an action in court, 
                      as provided in paragraph (4).
                          (iii) Mailing of notice sufficient.--The 
                      requirements of clause (i) shall be deemed to be 
                      satisfied if the notice of any decision with 
                      respect to any claim is mailed to the last address 
                      of the claimant which appears--
                                    (I) on the books, records, or both 
                                of the covered financial company;
                                    (II) in the claim filed by the 
                                claimant; or
                                    (III) in documents submitted in 
                                proof of the claim.
                          (iv) Contents of notice of disallowance.--If 
                      the Corporation as receiver disallows any claim 
                      filed under clause (i), the notice to the claimant 
                      shall contain--
                                    (I) a statement of each reason for 
                                the disallowance; and
                                    (II) the procedures required to file 
                                or continue an action in court, as 
                                provided in paragraph (4).
                    (B) Allowance of proven claim.--The receiver shall 
                allow any claim received by the receiver on or before 
                the date specified in the notice under paragraph 
                (2)(B)(i), which is proved to the satisfaction of the 
                receiver.
                    (C) Disallowance of claims filed after end of filing 
                period.--
                          (i) In general.--Except as provided in clause 
                      (ii), claims filed after the date specified in the 
                      notice published under paragraph (2)(B)(i) shall 
                      be disallowed, and such disallowance shall be 
                      final.
                          (ii) Certain exceptions.--Clause (i) shall not 
                      apply with respect to any claim filed by a 
                      claimant after the date specified in the notice 
                      published under paragraph (2)(B)(i), and such 
                      claim may be considered by the receiver under 
                      subparagraph (B), if--

[[Page 124 STAT. 1466]]

                                    (I) the claimant did not receive 
                                notice of the appointment of the 
                                receiver in time to file such claim 
                                before such date; and
                                    (II) such claim is filed in time to 
                                permit payment of such claim.
                    (D) Authority to disallow claims.--
                          (i) In general.--The Corporation may disallow 
                      any portion of any claim by a creditor or claim of 
                      a security, preference, setoff, or priority which 
                      is not proved to the satisfaction of the 
                      Corporation.
                          (ii) Payments to undersecured creditors.--In 
                      the case of a claim against a covered financial 
                      company that is secured by any property or other 
                      asset of such covered financial company, the 
                      receiver--
                                    (I) may treat the portion of such 
                                claim which exceeds an amount equal to 
                                the fair market value of such property 
                                or other asset as an unsecured claim; 
                                and
                                    (II) may not make any payment with 
                                respect to such unsecured portion of the 
                                claim, other than in connection with the 
                                disposition of all claims of unsecured 
                                creditors of the covered financial 
                                company.
                          (iii) Exceptions.--No provision of this 
                      paragraph shall apply with respect to--
                                    (I) any extension of credit from any 
                                Federal reserve bank, or the 
                                Corporation, to any covered financial 
                                company; or
                                    (II) subject to clause (ii), any 
                                legally enforceable and perfected 
                                security interest in the assets of the 
                                covered financial company securing any 
                                such extension of credit.
                    (E) Legal effect of filing.--
                          (i) Statute of limitations tolled.--For 
                      purposes of any applicable statute of limitations, 
                      the filing of a claim with the receiver shall 
                      constitute a commencement of an action.
                          (ii) No prejudice to other actions.--Subject 
                      to paragraph (8), the filing of a claim with the 
                      receiver shall not prejudice any right of the 
                      claimant to continue any action which was filed 
                      before the date of appointment of the receiver for 
                      the covered financial company.
            (4) Judicial determination of claims.--
                    (A) In general.--Subject to subparagraph (B), a 
                claimant may file suit on a claim (or continue an action 
                commenced before the date of appointment of the 
                Corporation as receiver) in the district or territorial 
                court of the United States for the district within which 
                the principal place of business of the covered financial 
                company is located (and such court shall have 
                jurisdiction to hear such claim).
                    (B) Timing.--A claim under subparagraph (A) may be 
                filed before the end of the 60-day period beginning on 
                the earlier of--
                          (i) the end of the period described in 
                      paragraph (3)(A)(i) (or, if extended by agreement 
                      of the Corporation and the claimant, the period 
                      described in paragraph (3)(A)(ii)) with respect to 
                      any claim against a

[[Page 124 STAT. 1467]]

                      covered financial company for which the 
                      Corporation is receiver; or
                          (ii) the date of any notice of disallowance of 
                      such claim pursuant to paragraph (3)(A)(i).
                    (C) Statute of limitations.--If any claimant fails 
                to file suit on such claim (or to continue an action on 
                such claim commenced before the date of appointment of 
                the Corporation as receiver) prior to the end of the 60-
                day period described in subparagraph (B), the claim 
                shall be deemed to be disallowed (other than any portion 
                of such claim which was allowed by the receiver) as of 
                the end of such period, such disallowance shall be 
                final, and the claimant shall have no further rights or 
                remedies with respect to such claim.
            (5) Expedited determination of claims.--
                    (A) Procedure required.--The Corporation shall 
                establish a procedure for expedited relief outside of 
                the claims process established under paragraph (3), for 
                any claimant that alleges--
                          (i) having a legally valid and enforceable or 
                      perfected security interest in property of a 
                      covered financial company or control of any 
                      legally valid and enforceable security entitlement 
                      in respect of any asset held by the covered 
                      financial company for which the Corporation has 
                      been appointed receiver; and
                          (ii) that irreparable injury will occur if the 
                      claims procedure established under paragraph (3) 
                      is followed.
                    (B) Determination period.--Prior to the end of the 
                90-day period beginning on the date on which a claim is 
                filed in accordance with the procedures established 
                pursuant to subparagraph (A), the Corporation shall--
                          (i) determine--
                                    (I) whether to allow or disallow 
                                such claim, or any portion thereof; or
                                    (II) whether such claim should be 
                                determined pursuant to the procedures 
                                established pursuant to paragraph (3);
                          (ii) <<NOTE: Notification.>> notify the 
                      claimant of the determination; and
                          (iii) if the claim is disallowed, provide a 
                      statement of each reason for the disallowance and 
                      the procedure for obtaining a judicial 
                      determination.
                    (C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file suit (or continue a suit filed 
                before the date of appointment of the Corporation as 
                receiver seeking a determination of the rights of the 
                claimant with respect to such security interest (or such 
                security entitlement) after the earlier of--
                          (i) the end of the 90-day period beginning on 
                      the date of the filing of a request for expedited 
                      relief; or
                          (ii) the date on which the Corporation denies 
                      the claim or a portion thereof.
                    (D) Statute <<NOTE: Time period.>> of limitations.--
                If an action described in subparagraph (C) is not filed, 
                or the motion to renew a previously filed suit is not 
                made, before the end of the 30-day period beginning on 
                the date on which such action

[[Page 124 STAT. 1468]]

                or motion may be filed in accordance with subparagraph 
                (C), the claim shall be deemed to be disallowed as of 
                the end of such period (other than any portion of such 
                claim which was allowed by the receiver), such 
                disallowance shall be final, and the claimant shall have 
                no further rights or remedies with respect to such 
                claim.
                    (E) Legal effect of filing.--
                          (i) Statute of limitations tolled.--For 
                      purposes of any applicable statute of limitations, 
                      the filing of a claim with the receiver shall 
                      constitute a commencement of an action.
                          (ii) No prejudice to other actions.--Subject 
                      to paragraph (8), the filing of a claim with the 
                      receiver shall not prejudice any right of the 
                      claimant to continue any action which was filed 
                      before the appointment of the Corporation as 
                      receiver for the covered financial company.
            (6) Agreements against interest of the receiver.--No 
        agreement that tends to diminish or defeat the interest of the 
        Corporation as receiver in any asset acquired by the receiver 
        under this section shall be valid against the receiver, unless 
        such agreement--
                    (A) is in writing;
                    (B) was executed by an authorized officer or 
                representative of the covered financial company, or 
                confirmed in the ordinary course of business by the 
                covered financial company; and
                    (C) has been, since the time of its execution, an 
                official record of the company or the party claiming 
                under the agreement provides documentation, acceptable 
                to the receiver, of such agreement and its authorized 
                execution or confirmation by the covered financial 
                company.
            (7) Payment of claims.--
                    (A) In general.--Subject to subparagraph (B), the 
                Corporation as receiver may, in its discretion and to 
                the extent that funds are available, pay creditor 
                claims, in such manner and amounts as are authorized 
                under this section, which are--
                          (i) allowed by the receiver;
                          (ii) approved by the receiver pursuant to a 
                      final determination pursuant to paragraph (3) or 
                      (5), as applicable; or
                          (iii) determined by the final judgment of a 
                      court of competent jurisdiction.
                    (B) Limitation.--A creditor shall, in no event, 
                receive less than the amount that the creditor is 
                entitled to receive under paragraphs (2) and (3) of 
                subsection (d), as applicable.
                    (C) Payment of dividends on claims.--The Corporation 
                as receiver may, in its sole discretion, and to the 
                extent otherwise permitted by this section, pay 
                dividends on proven claims at any time, and no liability 
                shall attach to the Corporation as receiver, by reason 
                of any such payment or for failure to pay dividends to a 
                claimant whose claim is not proved at the time of any 
                such payment.
                    (D) Rulemaking by the corporation.--The Corporation 
                may prescribe such rules, including definitions of

[[Page 124 STAT. 1469]]

                terms, as the Corporation deems appropriate to establish 
                an interest rate for or to make payments of post-
                insolvency interest to creditors holding proven claims 
                against the receivership estate of a covered financial 
                company, except that no such interest shall be paid 
                until the Corporation as receiver has satisfied the 
                principal amount of all creditor claims.
            (8) Suspension of legal actions.--
                    (A) In <<NOTE: Time period.>> general.--After the 
                appointment of the Corporation as receiver for a covered 
                financial company, the Corporation may request a stay in 
                any judicial action or proceeding in which such covered 
                financial company is or becomes a party, for a period of 
                not to exceed 90 days.
                    (B) Grant of stay by all courts required.--Upon 
                receipt of a request by the Corporation pursuant to 
                subparagraph (A), the court shall grant such stay as to 
                all parties.
            (9) Additional rights and duties.--
                    (A) Prior final adjudication.--The Corporation shall 
                abide by any final, non-appealable judgment of any court 
                of competent jurisdiction that was rendered before the 
                appointment of the Corporation as receiver.
                    (B) Rights and remedies of receiver.--In the event 
                of any appealable judgment, the Corporation as receiver 
                shall--
                          (i) have all the rights and remedies available 
                      to the covered financial company (before the date 
                      of appointment of the Corporation as receiver 
                      under section 202) and the Corporation, including 
                      removal to Federal court and all appellate rights; 
                      and
                          (ii) not be required to post any bond in order 
                      to pursue such remedies.
                    (C) No attachment or execution.--No attachment or 
                execution may be issued by any court upon assets in the 
                possession of the Corporation as receiver for a covered 
                financial company.
                    (D) Limitation on judicial review.--Except as 
                otherwise provided in this title, no court shall have 
                jurisdiction over--
                          (i) any claim or action for payment from, or 
                      any action seeking a determination of rights with 
                      respect to, the assets of any covered financial 
                      company for which the Corporation has been 
                      appointed receiver, including any assets which the 
                      Corporation may acquire from itself as such 
                      receiver; or
                          (ii) any claim relating to any act or omission 
                      of such covered financial company or the 
                      Corporation as receiver.
                    (E) Disposition of assets.--In exercising any right, 
                power, privilege, or authority as receiver in connection 
                with any covered financial company for which the 
                Corporation is acting as receiver under this section, 
                the Corporation shall, to the greatest extent 
                practicable, conduct its operations in a manner that--
                          (i) maximizes the net present value return 
                      from the sale or disposition of such assets;

[[Page 124 STAT. 1470]]

                          (ii) minimizes the amount of any loss realized 
                      in the resolution of cases;
                          (iii) mitigates the potential for serious 
                      adverse effects to the financial system;
                          (iv) ensures timely and adequate competition 
                      and fair and consistent treatment of offerors; and
                          (v) prohibits discrimination on the basis of 
                      race, sex, or ethnic group in the solicitation and 
                      consideration of offers.
            (10) Statute of limitations for actions brought by 
        receiver. <<NOTE: Time period.>> --
                    (A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations with 
                regard to any action brought by the Corporation as 
                receiver for a covered financial company shall be--
                          (i) in the case of any contract claim, the 
                      longer of--
                                    (I) the 6-year period beginning on 
                                the date on which the claim accrues; or
                                    (II) the period applicable under 
                                State law; and
                          (ii) in the case of any tort claim, the longer 
                      of--
                                    (I) the 3-year period beginning on 
                                the date on which the claim accrues; or
                                    (II) the period applicable under 
                                State law.
                    (B) Date on which a claim accrues.--For purposes of 
                subparagraph (A), the date on which the statute of 
                limitations begins to run on any claim described in 
                subparagraph (A) shall be the later of--
                          (i) the date of the appointment of the 
                      Corporation as receiver under this title; or
                          (ii) the date on which the cause of action 
                      accrues.
                    (C) Revival of expired state causes of action.--
                          (i) In general.--In the case of any tort claim 
                      described in clause (ii) for which the applicable 
                      statute of limitations under State law has expired 
                      not more than 5 years before the date of 
                      appointment of the Corporation as receiver for a 
                      covered financial company, the Corporation may 
                      bring an action as receiver on such claim without 
                      regard to the expiration of the statute of 
                      limitations.
                          (ii) Claims described.--A tort claim referred 
                      to in clause (i) is a claim arising from fraud, 
                      intentional misconduct resulting in unjust 
                      enrichment, or intentional misconduct resulting in 
                      substantial loss to the covered financial company.
            (11) Avoidable transfers.--
                    (A) Fraudulent transfers.--The Corporation, as 
                receiver for any covered financial company, may avoid a 
                transfer of any interest of the covered financial 
                company in property, or any obligation incurred by the 
                covered financial company, that was made or incurred at 
                or within 2 years before the date on which the 
                Corporation was appointed receiver, if--
                          (i) the covered financial company voluntarily 
                      or involuntarily--
                                    (I) made such transfer or incurred 
                                such obligation with actual intent to 
                                hinder, delay, or defraud

[[Page 124 STAT. 1471]]

                                any entity to which the covered 
                                financial company was or became, on or 
                                after the date on which such transfer 
                                was made or such obligation was 
                                incurred, indebted; or
                                    (II) received less than a reasonably 
                                equivalent value in exchange for such 
                                transferor obligation; and
                          (ii) the covered financial company voluntarily 
                      or involuntarily--
                                    (I) was insolvent on the date that 
                                such transfer was made or such 
                                obligation was incurred, or became 
                                insolvent as a result of such transfer 
                                or obligation;
                                    (II) was engaged in business or a 
                                transaction, or was about to engage in 
                                business or a transaction, for which any 
                                property remaining with the covered 
                                financial company was an unreasonably 
                                small capital;
                                    (III) intended to incur, or believed 
                                that the covered financial company would 
                                incur, debts that would be beyond the 
                                ability of the covered financial company 
                                to pay as such debts matured; or
                                    (IV) made such transfer to or for 
                                the benefit of an insider, or incurred 
                                such obligation to or for the benefit of 
                                an insider, under an employment contract 
                                and not in the ordinary course of 
                                business.
                    (B) Preferential transfers.--The Corporation as 
                receiver for any covered financial company may avoid a 
                transfer of an interest of the covered financial company 
                in property--
                          (i) to or for the benefit of a creditor;
                          (ii) for or on account of an antecedent debt 
                      that was owed by the covered financial company 
                      before the transfer was made;
                          (iii) that was made while the covered 
                      financial company was insolvent;
                          (iv) that was made--
                                    (I) 90 days or less before the date 
                                on which the Corporation was appointed 
                                receiver; or
                                    (II) more than 90 days, but less 
                                than 1 year before the date on which the 
                                Corporation was appointed receiver, if 
                                such creditor at the time of the 
                                transfer was an insider; and
                          (v) that enables the creditor to receive more 
                      than the creditor would receive if--
                                    (I) the covered financial company 
                                had been liquidated under chapter 7 of 
                                the Bankruptcy Code;
                                    (II) the transfer had not been made; 
                                and
                                    (III) the creditor received payment 
                                of such debt to the extent provided by 
                                the provisions of chapter 7 of the 
                                Bankruptcy Code.
                    (C) Post-receivership transactions.--The Corporation 
                as receiver for any covered financial company may avoid 
                a transfer of property of the receivership that occurred 
                after the Corporation was appointed receiver that

[[Page 124 STAT. 1472]]

                was not authorized under this title by the Corporation 
                as receiver.
                    (D) Right of recovery.--To the extent that a 
                transfer is avoided under subparagraph (A), (B), or (C), 
                the Corporation may recover, for the benefit of the 
                covered financial company, the property transferred or, 
                if a court so orders, the value of such property (at the 
                time of such transfer) from--
                          (i) the initial transferee of such transfer or 
                      the person for whose benefit such transfer was 
                      made; or
                          (ii) any immediate or mediate transferee of 
                      any such initial transferee.
                    (E) Rights of transferee or obligee.--The 
                Corporation may not recover under subparagraph (D)(ii) 
                from--
                          (i) any transferee that takes for value, 
                      including in satisfaction of or to secure a 
                      present or antecedent debt, in good faith, and 
                      without knowledge of the voidability of the 
                      transfer avoided; or
                          (ii) any immediate or mediate good faith 
                      transferee of such transferee.
                    (F) Defenses.--Subject to the other provisions of 
                this title--
                          (i) a transferee or obligee from which the 
                      Corporation seeks to recover a transfer or to 
                      avoid an obligation under subparagraph (A), (B), 
                      (C), or (D) shall have the same defenses available 
                      to a transferee or obligee from which a trustee 
                      seeks to recover a transfer or avoid an obligation 
                      under sections 547, 548, and 549 of the Bankruptcy 
                      Code; and
                          (ii) the authority of the Corporation to 
                      recover a transfer or avoid an obligation shall be 
                      subject to subsections (b) and (c) of section 546, 
                      section 547(c), and section 548(c) of the 
                      Bankruptcy Code.
                    (G) Rights under this section.--The rights of the 
                Corporation as receiver under this section shall be 
                superior to any rights of a trustee or any other party 
                (other than a Federal agency) under the Bankruptcy Code.
                    (H) Rules of construction; definitions.--For 
                purposes of--
                          (i) subparagraphs (A) and (B)--
                                    (I) the term ``insider'' has the 
                                same meaning as in section 101(31) of 
                                the Bankruptcy Code;
                                    (II) a transfer is made when such 
                                transfer is so perfected that a bona 
                                fide purchaser from the covered 
                                financial company against whom 
                                applicable law permits such transfer to 
                                be perfected cannot acquire an interest 
                                in the property transferred that is 
                                superior to the interest in such 
                                property of the transferee, but if such 
                                transfer is not so perfected before the 
                                date on which the Corporation is 
                                appointed as receiver for the covered 
                                financial company, such transfer is made 
                                immediately before the date of such 
                                appointment; and
                                    (III) the term ``value'' means 
                                property, or satisfaction or securing of 
                                a present or antecedent debt of the 
                                covered financial company, but does not

[[Page 124 STAT. 1473]]

                                include an unperformed promise to 
                                furnish support to the covered financial 
                                company; and
                          (ii) subparagraph (B)--
                                    (I) the covered financial company is 
                                presumed to have been insolvent on and 
                                during the 90-day period immediately 
                                preceding the date of appointment of the 
                                Corporation as receiver; and
                                    (II) the term ``insolvent'' has the 
                                same meaning as in section 101(32) of 
                                the Bankruptcy Code.
            (12) Setoff.--
                    (A) Generally.--Except as otherwise provided in this 
                title, any right of a creditor to offset a mutual debt 
                owed by the creditor to any covered financial company 
                that arose before the Corporation was appointed as 
                receiver for the covered financial company against a 
                claim of such creditor may be asserted if enforceable 
                under applicable noninsolvency law, except to the extent 
                that--
                          (i) the claim of the creditor against the 
                      covered financial company is disallowed;
                          (ii) the claim was transferred, by an entity 
                      other than the covered financial company, to the 
                      creditor--
                                    (I) after the Corporation was 
                                appointed as receiver of the covered 
                                financial company; or
                                    (II)(aa) after the 90-day period 
                                preceding the date on which the 
                                Corporation was appointed as receiver 
                                for the covered financial company; and
                                    (bb) while the covered financial 
                                company was insolvent (except for a 
                                setoff in connection with a qualified 
                                financial contract); or
                          (iii) the debt owed to the covered financial 
                      company was incurred by the covered financial 
                      company--
                                    (I) after the 90-day period 
                                preceding the date on which the 
                                Corporation was appointed as receiver 
                                for the covered financial company;
                                    (II) while the covered financial 
                                company was insolvent; and
                                    (III) for the purpose of obtaining a 
                                right of setoff against the covered 
                                financial company (except for a setoff 
                                in connection with a qualified financial 
                                contract).
                    (B) Insufficiency.--
                          (i) In general.--Except <<NOTE: Time 
                      periods.>> with respect to a setoff in connection 
                      with a qualified financial contract, if a creditor 
                      offsets a mutual debt owed to the covered 
                      financial company against a claim of the covered 
                      financial company on or within the 90-day period 
                      preceding the date on which the Corporation is 
                      appointed as receiver for the covered financial 
                      company, the Corporation may recover from the 
                      creditor the amount so offset, to the extent that 
                      any insufficiency on the date of such setoff is 
                      less than the insufficiency on the later of--
                                    (I) the date that is 90 days before 
                                the date on which the Corporation is 
                                appointed as receiver for the covered 
                                financial company; or
                                    (II) the first day on which there is 
                                an insufficiency during the 90-day 
                                period preceding the date

[[Page 124 STAT. 1474]]

                                on which the Corporation is appointed as 
                                receiver for the covered financial 
                                company.
                          (ii) Definition of insufficiency.--In this 
                      subparagraph, the term ``insufficiency'' means the 
                      amount, if any, by which a claim against the 
                      covered financial company exceeds a mutual debt 
                      owed to the covered financial company by the 
                      holder of such claim.
                    (C) Insolvency.--The <<NOTE: Definition.>> term 
                ``insolvent'' has the same meaning as in section 101(32) 
                of the Bankruptcy Code.
                    (D) Presumption <<NOTE: Time period.>> of 
                insolvency.--For purposes of this paragraph, the covered 
                financial company is presumed to have been insolvent on 
                and during the 90-day period preceding the date of 
                appointment of the Corporation as receiver.
                    (E) Limitation.--Nothing in this paragraph (12) 
                shall be the basis for any right of setoff where no such 
                right exists under applicable noninsolvency law.
                    (F) Priority claim.--Except as otherwise provided in 
                this title, the Corporation as receiver for the covered 
                financial company may sell or transfer any assets free 
                and clear of the setoff rights of any party, except that 
                such party shall be entitled to a claim, subordinate to 
                the claims payable under subparagraphs (A), (B), (C), 
                and (D) of subsection (b)(1), but senior to all other 
                unsecured liabilities defined in subsection (b)(1)(E), 
                in an amount equal to the value of such setoff rights.
            (13) Attachment of assets and other injunctive relief.--
        Subject to paragraph (14), any court of competent jurisdiction 
        may, at the request of the Corporation as receiver for a covered 
        financial company, issue an order in accordance with Rule 65 of 
        the Federal Rules of Civil Procedure, including an order placing 
        the assets of any person designated by the Corporation under the 
        control of the court and appointing a trustee to hold such 
        assets.
            (14) Standards.--
                    (A) Showing.--Rule <<NOTE: Applicability.>> 65 of 
                the Federal Rules of Civil Procedure shall apply with 
                respect to any proceeding under paragraph (13), without 
                regard to the requirement that the applicant show that 
                the injury, loss, or damage is irreparable and 
                immediate.
                    (B) State proceeding.--If, in the case of any 
                proceeding in a State court, the court determines that 
                rules of civil procedure available under the laws of the 
                State provide substantially similar protections of the 
                right of the parties to due process as provided under 
                Rule 65 (as modified with respect to such proceeding by 
                subparagraph (A)), the relief sought by the Corporation 
                pursuant to paragraph (14) may be requested under the 
                laws of such State.
            (15) Treatment of claims arising from breach of contracts 
        executed by the corporation as receiver.--Notwithstanding any 
        other provision of this title, any final and non-appealable 
        judgment for monetary damages entered against the Corporation as 
        receiver for a covered financial company for the breach of an 
        agreement executed or approved by the Corporation after the date 
        of its appointment shall be paid as an administrative expense of 
        the receiver. Nothing in this paragraph shall be construed to 
        limit the power of a receiver

[[Page 124 STAT. 1475]]

        to exercise any rights under contract or law, including to 
        terminate, breach, cancel, or otherwise discontinue such 
        agreement.
            (16) Accounting and recordkeeping requirements.--
                    (A) In general.--The Corporation as receiver for a 
                covered financial company shall, consistent with the 
                accounting and reporting practices and procedures 
                established by the Corporation, maintain a full 
                accounting of each receivership or other disposition of 
                any covered financial company.
                    (B) Annual accounting or report.--With respect to 
                each receivership to which the Corporation is appointed, 
                the Corporation shall make an annual accounting or 
                report, as appropriate, available to the Secretary and 
                the Comptroller General of the United States.
                    (C) Availability of reports.--Any <<NOTE: Public 
                information.>> report prepared pursuant to subparagraph 
                (B) and section 203(c)(3) shall be made available to the 
                public by the Corporation.
                    (D) Recordkeeping requirement.--
                          (i) In general.--
                      The <<NOTE: Regulations.>> Corporation shall 
                      prescribe such regulations and establish such 
                      retention schedules as are necessary to maintain 
                      the documents and records of the Corporation 
                      generated in exercising the authorities of this 
                      title and the records of a covered financial 
                      company for which the Corporation is appointed 
                      receiver, with due regard for--
                                    (I) the avoidance of duplicative 
                                record retention; and
                                    (II) the expected evidentiary needs 
                                of the Corporation as receiver for a 
                                covered financial company and the public 
                                regarding the records of covered 
                                financial companies.
                          (ii) Retention of records.--Unless otherwise 
                      required by applicable Federal law or court order, 
                      the Corporation may not, at any time, destroy any 
                      records that are subject to clause (i).
                          (iii) Records defined.--As used in this 
                      subparagraph, the terms ``records'' and ``records 
                      of a covered financial company'' mean any 
                      document, book, paper, map, photograph, 
                      microfiche, microfilm, computer or electronically-
                      created record generated or maintained by the 
                      covered financial company in the course of and 
                      necessary to its transaction of business.

    (b) Priority of Expenses and Unsecured Claims.--
            (1) In general.--Unsecured claims against a covered 
        financial company, or the Corporation as receiver for such 
        covered financial company under this section, that are proven to 
        the satisfaction of the receiver shall have priority in the 
        following order:
                    (A) Administrative expenses of the receiver.
                    (B) Any amounts owed to the United States, unless 
                the United States agrees or consents otherwise.
                    (C) <<NOTE: Deadline.>> Wages, salaries, or 
                commissions, including vacation, severance, and sick 
                leave pay earned by an individual (other than an 
                individual described in subparagraph (G)), but only to 
                the extent of 11,725 for each individual (as indexed for 
                inflation, by regulation of the Corporation)

[[Page 124 STAT. 1476]]

                earned not later than 180 days before the date of 
                appointment of the Corporation as receiver.
                    (D) <<NOTE: Deadline.>> Contributions owed to 
                employee benefit plans arising from services rendered 
                not later than 180 days before the date of appointment 
                of the Corporation as receiver, to the extent of the 
                number of employees covered by each such plan, 
                multiplied by 11,725 (as indexed for inflation, by 
                regulation of the Corporation), less the aggregate 
                amount paid to such employees under subparagraph (C), 
                plus the aggregate amount paid by the receivership on 
                behalf of such employees to any other employee benefit 
                plan.
                    (E) Any other general or senior liability of the 
                covered financial company (which is not a liability 
                described under subparagraph (F), (G), or (H)).
                    (F) Any obligation subordinated to general creditors 
                (which is not an obligation described under subparagraph 
                (G) or (H)).
                    (G) Any wages, salaries, or commissions, including 
                vacation, severance, and sick leave pay earned, owed to 
                senior executives and directors of the covered financial 
                company.
                    (H) Any obligation to shareholders, members, general 
                partners, limited partners, or other persons, with 
                interests in the equity of the covered financial company 
                arising as a result of their status as shareholders, 
                members, general partners, limited partners, or other 
                persons with interests in the equity of the covered 
                financial company.
            (2) Post-receivership financing priority.--In the event that 
        the Corporation, as receiver for a covered financial company, is 
        unable to obtain unsecured credit for the covered financial 
        company from commercial sources, the Corporation as receiver may 
        obtain credit or incur debt on the part of the covered financial 
        company, which shall have priority over any or all 
        administrative expenses of the receiver under paragraph (1)(A).
            (3) Claims of the united states.--Unsecured claims of the 
        United States shall, at a minimum, have a higher priority than 
        liabilities of the covered financial company that count as 
        regulatory capital.
            (4) Creditors similarly situated.--All claimants of a 
        covered financial company that are similarly situated under 
        paragraph (1) shall be treated in a similar manner, except that 
        the Corporation may take any action (including making payments, 
        subject to subsection (o)(1)(D)(i)) that does not comply with 
        this subsection, if--
                    (A) the Corporation determines that such action is 
                necessary--
                          (i) to maximize the value of the assets of the 
                      covered financial company;
                          (ii) to initiate and continue operations 
                      essential to implementation of the receivership or 
                      any bridge financial company;
                          (iii) to maximize the present value return 
                      from the sale or other disposition of the assets 
                      of the covered financial company; or

[[Page 124 STAT. 1477]]

                          (iv) to minimize the amount of any loss 
                      realized upon the sale or other disposition of the 
                      assets of the covered financial company; and
                    (B) all claimants that are similarly situated under 
                paragraph (1) receive not less than the amount provided 
                in paragraphs (2) and (3) of subsection (d).
            (5) Secured claims unaffected.--This section shall not 
        affect secured claims or security entitlements in respect of 
        assets or property held by the covered financial company, except 
        to the extent that the security is insufficient to satisfy the 
        claim, and then only with regard to the difference between the 
        claim and the amount realized from the security.
            (6) Priority of expenses and unsecured claims in the orderly 
        liquidation of sipc member.--Where the Corporation is appointed 
        as receiver for a covered broker or dealer, unsecured claims 
        against such covered broker or dealer, or the Corporation as 
        receiver for such covered broker or dealer under this section, 
        that are proven to the satisfaction of the receiver under 
        section 205(e), shall have the priority prescribed in paragraph 
        (1), except that--
                    (A) SIPC shall be entitled to recover administrative 
                expenses incurred in performing its responsibilities 
                under section 205 on an equal basis with the 
                Corporation, in accordance with paragraph (1)(A);
                    (B) the Corporation shall be entitled to recover any 
                amounts paid to customers or to SIPC pursuant to section 
                205(f), in accordance with paragraph (1)(B);
                    (C) SIPC shall be entitled to recover any amounts 
                paid out of the SIPC Fund to meet its obligations under 
                section 205 and under the Securities Investor Protection 
                Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall 
                be subordinate to the claims payable under subparagraphs 
                (A) and (B) of paragraph (1), but senior to all other 
                claims; and
                    (D) the Corporation may, after paying any proven 
                claims to customers under section 205 and the Securities 
                Investor Protection Act of 1970 (15 U.S.C. 78aaa et 
                seq.), and as provided above, pay dividends on other 
                proven claims, in its discretion, and to the extent that 
                funds are available, in accordance with the priorities 
                set forth in paragraph (1).

    (c) Provisions Relating to Contracts Entered Into Before Appointment 
of Receiver.--
            (1) Authority to repudiate contracts.--In addition to any 
        other rights that a receiver may have, the Corporation as 
        receiver for any covered financial company may disaffirm or 
        repudiate any contract or lease--
                    (A) to which the covered financial company is a 
                party;
                    (B) the performance of which the Corporation as 
                receiver, in the discretion of the Corporation, 
                determines to be burdensome; and
                    (C) the disaffirmance or repudiation of which the 
                Corporation as receiver determines, in the discretion of 
                the Corporation, will promote the orderly administration 
                of the affairs of the covered financial company.
            (2) Timing of repudiation.--The Corporation, as receiver for 
        any covered financial company, shall determine whether

[[Page 124 STAT. 1478]]

        or not to exercise the rights of repudiation under this section 
        within a reasonable period of time.
            (3) Claims for damages for repudiation.--
                    (A) In general.--Except as provided in paragraphs 
                (4), (5), and (6) and in subparagraphs (C), (D), and (E) 
                of this paragraph, the liability of the Corporation as 
                receiver for a covered financial company for the 
                disaffirmance or repudiation of any contract pursuant to 
                paragraph (1) shall be--
                          (i) limited to actual direct compensatory 
                      damages; and
                          (ii) determined as of--
                                    (I) the date of the appointment of 
                                the Corporation as receiver; or
                                    (II) in the case of any contract or 
                                agreement referred to in paragraph (8), 
                                the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    (B) No liability for other damages.--For purposes of 
                subparagraph (A), the term ``actual direct compensatory 
                damages'' does not include--
                          (i) punitive or exemplary damages;
                          (ii) damages for lost profits or opportunity; 
                      or
                          (iii) damages for pain and suffering.
                    (C) Measure of damages for repudiation of qualified 
                financial contracts.--In the case of any qualified 
                financial contract or agreement to which paragraph (8) 
                applies, compensatory damages shall be--
                          (i) deemed to include normal and reasonable 
                      costs of cover or other reasonable measures of 
                      damages utilized in the industries for such 
                      contract and agreement claims; and
                          (ii) paid in accordance with this paragraph 
                      and subsection (d), except as otherwise 
                      specifically provided in this subsection.
                    (D) Measure of damages for repudiation or 
                disaffirmance of debt obligation.--In the case of any 
                debt for borrowed money or evidenced by a security, 
                actual direct compensatory damages shall be no less than 
                the amount lent plus accrued interest plus any accreted 
                original issue discount as of the date the Corporation 
                was appointed receiver of the covered financial company 
                and, to the extent that an allowed secured claim is 
                secured by property the value of which is greater than 
                the amount of such claim and any accrued interest 
                through the date of repudiation or disaffirmance, such 
                accrued interest pursuant to paragraph (1).
                    (E) Measure of damages for repudiation or 
                disaffirmance of contingent obligation.--In the case of 
                any contingent obligation of a covered financial company 
                consisting of any obligation under a guarantee, letter 
                of credit, loan commitment, or similar credit 
                obligation, the Corporation may, by rule or regulation, 
                prescribe that actual direct compensatory damages shall 
                be no less than the estimated value of the claim as of 
                the date the Corporation was appointed receiver of the 
                covered financial company, as such value is measured 
                based on the likelihood

[[Page 124 STAT. 1479]]

                that such contingent claim would become fixed and the 
                probable magnitude thereof.
            (4) Leases under which the covered financial company is the 
        lessee.--
                    (A) In general.--If the Corporation as receiver 
                disaffirms or repudiates a lease under which the covered 
                financial company is the lessee, the receiver shall not 
                be liable for any damages (other than damages determined 
                pursuant to subparagraph (B)) for the disaffirmance or 
                repudiation of such lease.
                    (B) Payments of rent.--Notwithstanding subparagraph 
                (A), the lessor under a lease to which subparagraph (A) 
                would otherwise apply shall--
                          (i) be entitled to the contractual rent 
                      accruing before the later of the date on which--
                                    (I) the notice of disaffirmance or 
                                repudiation is mailed; or
                                    (II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                          (ii) have no claim for damages under any 
                      acceleration clause or other penalty provision in 
                      the lease; and
                          (iii) have a claim for any unpaid rent, 
                      subject to all appropriate offsets and defenses, 
                      due as of the date of the appointment which shall 
                      be paid in accordance with this paragraph and 
                      subsection (d).
            (5) Leases under which the covered financial company is the 
        lessor.--
                    (A) In general.--If the Corporation as receiver for 
                a covered financial company repudiates an unexpired 
                written lease of real property of the covered financial 
                company under which the covered financial company is the 
                lessor and the lessee is not, as of the date of such 
                repudiation, in default, the lessee under such lease may 
                either--
                          (i) treat the lease as terminated by such 
                      repudiation; or
                          (ii) remain in possession of the leasehold 
                      interest for the balance of the term of the lease, 
                      unless the lessee defaults under the terms of the 
                      lease after the date of such repudiation.
                    (B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described in 
                subparagraph (A) remains in possession of a leasehold 
                interest pursuant to clause (ii) of subparagraph (A)--
                          (i) the lessee--
                                    (I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease; and
                                    (II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, any 
                                damages which accrue after such date due 
                                to the nonperformance of any obligation 
                                of the covered financial company under 
                                the lease after such date; and
                          (ii) the Corporation as receiver shall not be 
                      liable to the lessee for any damages arising after 
                      such date

[[Page 124 STAT. 1480]]

                      as a result of the repudiation, other than the 
                      amount of any offset allowed under clause (i)(II).
            (6) Contracts for the sale of real property.--
                    (A) In general.--If the receiver repudiates any 
                contract (which meets the requirements of subsection 
                (a)(6)) for the sale of real property, and the purchaser 
                of such real property under such contract is in 
                possession and is not, as of the date of such 
                repudiation, in default, such purchaser may either--
                          (i) treat the contract as terminated by such 
                      repudiation; or
                          (ii) remain in possession of such real 
                      property.
                    (B) Provisions applicable to purchaser remaining in 
                possession.--If any purchaser of real property under any 
                contract described in subparagraph (A) remains in 
                possession of such property pursuant to clause (ii) of 
                subparagraph (A)--
                          (i) the purchaser--
                                    (I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                    (II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the covered financial company under the 
                                contract; and
                          (ii) the Corporation as receiver shall--
                                    (I) not be liable to the purchaser 
                                for any damages arising after such date 
                                as a result of the repudiation, other 
                                than the amount of any offset allowed 
                                under clause (i)(II);
                                    (II) deliver title to the purchaser 
                                in accordance with the provisions of the 
                                contract; and
                                    (III) have no obligation under the 
                                contract other than the performance 
                                required under subclause (II).
                    (C) Assignment and sale allowed.--
                          (i) In general.--No provision of this 
                      paragraph shall be construed as limiting the right 
                      of the Corporation as receiver to assign the 
                      contract described in subparagraph (A) and sell 
                      the property, subject to the contract and the 
                      provisions of this paragraph.
                          (ii) No liability after assignment and sale.--
                      If an assignment and sale described in clause (i) 
                      is consummated, the Corporation as receiver shall 
                      have no further liability under the contract 
                      described in subparagraph (A) or with respect to 
                      the real property which was the subject of such 
                      contract.
            (7) Provisions applicable to service contracts.--
                    (A) Services performed before appointment.--In the 
                case of any contract for services between any person and 
                any covered financial company for which the Corporation 
                has been appointed receiver, any claim of such person 
                for services performed before the date of appointment 
                shall be--
                          (i) a claim to be paid in accordance with 
                      subsections (a), (b), and (d); and

[[Page 124 STAT. 1481]]

                          (ii) deemed to have arisen as of the date on 
                      which the receiver was appointed.
                    (B) Services performed after appointment and prior 
                to repudiation.--If, in the case of any contract for 
                services described in subparagraph (A), the Corporation 
                as receiver accepts performance by the other person 
                before making any determination to exercise the right of 
                repudiation of such contract under this section--
                          (i) the other party shall be paid under the 
                      terms of the contract for the services performed; 
                      and
                          (ii) the amount of such payment shall be 
                      treated as an administrative expense of the 
                      receivership.
                    (C) Acceptance of performance no bar to subsequent 
                repudiation.--The acceptance by the Corporation as 
                receiver for services referred to in subparagraph (B) in 
                connection with a contract described in subparagraph (B) 
                shall not affect the right of the Corporation as 
                receiver to repudiate such contract under this section 
                at any time after such performance.
            (8) Certain qualified financial contracts.--
                    (A) Rights of parties to contracts.--Subject to 
                subsection (a)(8) and paragraphs (9) and (10) of this 
                subsection, and notwithstanding any other provision of 
                this section, any other provision of Federal law, or the 
                law of any State, no person shall be stayed or 
                prohibited from exercising--
                          (i) any right that such person has to cause 
                      the termination, liquidation, or acceleration of 
                      any qualified financial contract with a covered 
                      financial company which arises upon the date of 
                      appointment of the Corporation as receiver for 
                      such covered financial company or at any time 
                      after such appointment;
                          (ii) any right under any security agreement or 
                      arrangement or other credit enhancement related to 
                      one or more qualified financial contracts 
                      described in clause (i); or
                          (iii) any right to offset or net out any 
                      termination value, payment amount, or other 
                      transfer obligation arising under or in connection 
                      with 1 or more contracts or agreements described 
                      in clause (i), including any master agreement for 
                      such contracts or agreements.
                    (B) Applicability of other provisions.--Subsection 
                (a)(8) shall apply in the case of any judicial action or 
                proceeding brought against the Corporation as receiver 
                referred to in subparagraph (A), or the subject covered 
                financial company, by any party to a contract or 
                agreement described in subparagraph (A)(i) with such 
                covered financial company.
                    (C) Certain transfers not avoidable.--
                          (i) In general.--Notwithstanding subsection 
                      (a)(11), (a)(12), or (c)(12), section 5242 of the 
                      Revised Statutes of the United States, or any 
                      other provision of Federal or State law relating 
                      to the avoidance of preferential or fraudulent 
                      transfers, the Corporation, whether acting as the 
                      Corporation or as receiver for a covered financial 
                      company, may not avoid any transfer of money or 
                      other property in connection with

[[Page 124 STAT. 1482]]

                      any qualified financial contract with a covered 
                      financial company.
                          (ii) Exception for certain transfers.--Clause 
                      (i) shall not apply to any transfer of money or 
                      other property in connection with any qualified 
                      financial contract with a covered financial 
                      company if the transferee had actual intent to 
                      hinder, delay, or defraud such company, the 
                      creditors of such company, or the Corporation as 
                      receiver appointed for such company.
                    (D) Certain contracts and agreements defined.--For 
                purposes of this subsection, the following definitions 
                shall apply:
                          (i) Qualified financial contract.--The term 
                      ``qualified financial contract'' means any 
                      securities contract, commodity contract, forward 
                      contract, repurchase agreement, swap agreement, 
                      and any similar agreement that the Corporation 
                      determines by regulation, resolution, or order to 
                      be a qualified financial contract for purposes of 
                      this paragraph.
                          (ii) Securities contract.--The term 
                      ``securities contract''--
                                    (I) means a contract for the 
                                purchase, sale, or loan of a security, a 
                                certificate of deposit, a mortgage loan, 
                                any interest in a mortgage loan, a group 
                                or index of securities, certificates of 
                                deposit, or mortgage loans or interests 
                                therein (including any interest therein 
                                or based on the value thereof), or any 
                                option on any of the foregoing, 
                                including any option to purchase or sell 
                                any such security, certificate of 
                                deposit, mortgage loan, interest, group 
                                or index, or option, and including any 
                                repurchase or reverse repurchase 
                                transaction on any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option 
                                (whether or not such repurchase or 
                                reverse repurchase transaction is a 
                                ``repurchase agreement'', as defined in 
                                clause (v));
                                    (II) does not include any purchase, 
                                sale, or repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Corporation determines 
                                by regulation, resolution, or order to 
                                include any such agreement within the 
                                meaning of such term;
                                    (III) means any option entered into 
                                on a national securities exchange 
                                relating to foreign currencies;
                                    (IV) means the guarantee (including 
                                by novation) by or to any securities 
                                clearing agency of any settlement of 
                                cash, securities, certificates of 
                                deposit, mortgage loans or interests 
                                therein, group or index of securities, 
                                certificates of deposit or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or an option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option 
                                (whether or not such

[[Page 124 STAT. 1483]]

                                settlement is in connection with any 
                                agreement or transaction referred to in 
                                subclauses (I) through (XII) (other than 
                                subclause (II)));
                                    (V) means any margin loan;
                                    (VI) means any extension of credit 
                                for the clearance or settlement of 
                                securities transactions;
                                    (VII) means any loan transaction 
                                coupled with a securities collar 
                                transaction, any prepaid securities 
                                forward transaction, or any total return 
                                swap transaction coupled with a 
                                securities sale transaction;
                                    (VIII) means any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    (IX) means any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    (X) means any option to enter into 
                                any agreement or transaction referred to 
                                in this clause;
                                    (XI) means a master agreement that 
                                provides for an agreement or transaction 
                                referred to in any of subclauses (I) 
                                through (X), other than subclause (II), 
                                together with all supplements to any 
                                such master agreement, without regard to 
                                whether the master agreement provides 
                                for an agreement or transaction that is 
                                not a securities contract under this 
                                clause, except that the master agreement 
                                shall be considered to be a securities 
                                contract under this clause only with 
                                respect to each agreement or transaction 
                                under the master agreement that is 
                                referred to in any of subclauses (I) 
                                through (X), other than subclause (II); 
                                and
                                    (XII) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in this clause, 
                                including any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                          (iii) Commodity contract.--The term 
                      ``commodity contract'' means--
                                    (I) with respect to a futures 
                                commission merchant, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade;
                                    (II) with respect to a foreign 
                                futures commission merchant, a foreign 
                                future;
                                    (III) with respect to a leverage 
                                transaction merchant, a leverage 
                                transaction;
                                    (IV) with respect to a clearing 
                                organization, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade that is cleared by such clearing 
                                organization, or commodity option traded 
                                on, or subject to the rules of, a 
                                contract market or board of trade that 
                                is cleared by such clearing 
                                organization;
                                    (V) with respect to a commodity 
                                options dealer, a commodity option;

[[Page 124 STAT. 1484]]

                                    (VI) any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    (VII) any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    (VIII) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    (IX) a master agreement that 
                                provides for an agreement or transaction 
                                referred to in any of subclauses (I) 
                                through (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to whether the 
                                master agreement provides for an 
                                agreement or transaction that is not a 
                                commodity contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a commodity contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                any of subclauses (I) through (VIII); or
                                    (X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                          (iv) Forward contract.--The term ``forward 
                      contract'' means--
                                    (I) a contract (other than a 
                                commodity contract) for the purchase, 
                                sale, or transfer of a commodity or any 
                                similar good, article, service, right, 
                                or interest which is presently or in the 
                                future becomes the subject of dealing in 
                                the forward contract trade, or product 
                                or byproduct thereof, with a maturity 
                                date that is more than 2 days after the 
                                date on which the contract is entered 
                                into, including a repurchase or reverse 
                                repurchase transaction (whether or not 
                                such repurchase or reverse repurchase 
                                transaction is a ``repurchase 
                                agreement'', as defined in clause (v)), 
                                consignment, lease, swap, hedge 
                                transaction, deposit, loan, option, 
                                allocated transaction, unallocated 
                                transaction, or any other similar 
                                agreement;
                                    (II) any combination of agreements 
                                or transactions referred to in 
                                subclauses (I) and (III);
                                    (III) any option to enter into any 
                                agreement or transaction referred to in 
                                subclause (I) or (II);
                                    (IV) a master agreement that 
                                provides for an agreement or transaction 
                                referred to in subclause (I), (II), or 
                                (III), together with all supplements to 
                                any such master agreement, without 
                                regard to whether the master agreement 
                                provides for an agreement or transaction 
                                that is not a forward contract under 
                                this clause, except that the master 
                                agreement shall be considered to be a 
                                forward contract under this clause only 
                                with respect to each agreement or 
                                transaction under the master

[[Page 124 STAT. 1485]]

                                agreement that is referred to in 
                                subclause (I), (II), or (III); or
                                    (V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                          (v) Repurchase agreement.--The term 
                      ``repurchase agreement'' (which definition also 
                      applies to a reverse repurchase agreement)--
                                    (I) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or more certificates of 
                                deposit, mortgage related securities (as 
                                such term is defined in section 3 of the 
                                Securities Exchange Act of 1934), 
                                mortgage loans, interests in mortgage-
                                related securities or mortgage loans, 
                                eligible bankers' acceptances, qualified 
                                foreign government securities (which, 
                                for purposes of this clause, means a 
                                security that is a direct obligation of, 
                                or that is fully guaranteed by, the 
                                central government of a member of the 
                                Organization for Economic Cooperation 
                                and Development, as determined by 
                                regulation or order adopted by the Board 
                                of Governors), or securities that are 
                                direct obligations of, or that are fully 
                                guaranteed by, the United States or any 
                                agency of the United States against the 
                                transfer of funds by the transferee of 
                                such certificates of deposit, eligible 
                                bankers' acceptances, securities, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee to transfer to the transferor 
                                thereof certificates of deposit, 
                                eligible bankers' acceptances, 
                                securities, mortgage loans, or interests 
                                as described above, at a date certain 
                                not later than 1 year after such 
                                transfers or on demand, against the 
                                transfer of funds, or any other similar 
                                agreement;
                                    (II) does not include any repurchase 
                                obligation under a participation in a 
                                commercial mortgage loan, unless the 
                                Corporation determines, by regulation, 
                                resolution, or order to include any such 
                                participation within the meaning of such 
                                term;
                                    (III) means any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (IV);
                                    (IV) means any option to enter into 
                                any agreement or transaction referred to 
                                in subclause (I) or (III);
                                    (V) means a master agreement that 
                                provides for an agreement or transaction 
                                referred to in subclause (I), (III), or 
                                (IV), together with all supplements to 
                                any such master agreement, without 
                                regard to whether the master agreement 
                                provides for an agreement or transaction 
                                that is not a repurchase agreement under 
                                this clause, except

[[Page 124 STAT. 1486]]

                                that the master agreement shall be 
                                considered to be a repurchase agreement 
                                under this subclause only with respect 
                                to each agreement or transaction under 
                                the master agreement that is referred to 
                                in subclause (I), (III), or (IV); and
                                    (VI) means any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (III), 
                                (IV), or (V), including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such subclause.
                          (vi) Swap agreement.--The term ``swap 
                      agreement'' means--
                                    (I) any agreement, including the 
                                terms and conditions incorporated by 
                                reference in any such agreement, which 
                                is an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap; a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other foreign 
                                exchange, precious metals, or other 
                                commodity agreement; a currency swap, 
                                option, future, or forward agreement; an 
                                equity index or equity swap, option, 
                                future, or forward agreement; a debt 
                                index or debt swap, option, future, or 
                                forward agreement; a total return, 
                                credit spread or credit swap, option, 
                                future, or forward agreement; a 
                                commodity index or commodity swap, 
                                option, future, or forward agreement; 
                                weather swap, option, future, or forward 
                                agreement; an emissions swap, option, 
                                future, or forward agreement; or an 
                                inflation swap, option, future, or 
                                forward agreement;
                                    (II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap or other 
                                derivatives markets (including terms and 
                                conditions incorporated by reference in 
                                such agreement) and that is a forward, 
                                swap, future, option, or spot 
                                transaction on one or more rates, 
                                currencies, commodities, equity 
                                securities or other equity instruments, 
                                debt securities or other debt 
                                instruments, quantitative measures 
                                associated with an occurrence, extent of 
                                an occurrence, or contingency associated 
                                with a financial, commercial, or 
                                economic consequence, or economic or 
                                financial indices or measures of 
                                economic or financial risk or value;
                                    (III) any combination of agreements 
                                or transactions referred to in this 
                                clause;
                                    (IV) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    (V) a master agreement that provides 
                                for an agreement or transaction referred 
                                to in subclause (I), (II), (III), or 
                                (IV), together with all supplements

[[Page 124 STAT. 1487]]

                                to any such master agreement, without 
                                regard to whether the master agreement 
                                contains an agreement or transaction 
                                that is not a swap agreement under this 
                                clause, except that the master agreement 
                                shall be considered to be a swap 
                                agreement under this clause only with 
                                respect to each agreement or transaction 
                                under the master agreement that is 
                                referred to in subclause (I), (II), 
                                (III), or (IV); and
                                    (VI) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in any of subclauses (I) 
                                through (V), including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such clause.
                          (vii) Definitions relating to default.--When 
                      used in this paragraph and paragraphs (9) and 
                      (10)--
                                    (I) the term ``default'' means, with 
                                respect to a covered financial company, 
                                any adjudication or other official 
                                decision by any court of competent 
                                jurisdiction, or other public authority 
                                pursuant to which the Corporation has 
                                been appointed receiver; and
                                    (II) the term ``in danger of 
                                default'' means a covered financial 
                                company with respect to which the 
                                Corporation or appropriate State 
                                authority has determined that--
                                            (aa) in the opinion of the 
                                        Corporation or such authority--
                                                (AA) the covered 
                                            financial company is not 
                                            likely to be able to pay its 
                                            obligations in the normal 
                                            course of business; and
                                                (BB) there is no 
                                            reasonable prospect that the 
                                            covered financial company 
                                            will be able to pay such 
                                            obligations without Federal 
                                            assistance; or
                                            (bb) in the opinion of the 
                                        Corporation or such authority--
                                                (AA) the covered 
                                            financial company has 
                                            incurred or is likely to 
                                            incur losses that will 
                                            deplete all or substantially 
                                            all of its capital; and
                                                (BB) there is no 
                                            reasonable prospect that the 
                                            capital will be replenished 
                                            without Federal assistance.
                          (viii) Treatment of master agreement as one 
                      agreement.--Any master agreement for any contract 
                      or agreement described in any of clauses (i) 
                      through (vi) (or any master agreement for such 
                      master agreement or agreements), together with all 
                      supplements to such master agreement, shall be 
                      treated as a single agreement and a single 
                      qualified financial contact. If a master agreement 
                      contains provisions relating to agreements or 
                      transactions that are not themselves qualified 
                      financial contracts, the master agreement

[[Page 124 STAT. 1488]]

                      shall be deemed to be a qualified financial 
                      contract only with respect to those transactions 
                      that are themselves qualified financial contracts.
                          (ix) Transfer.--The term ``transfer'' means 
                      every mode, direct or indirect, absolute or 
                      conditional, voluntary or involuntary, of 
                      disposing of or parting with property or with an 
                      interest in property, including retention of title 
                      as a security interest and foreclosure of the 
                      equity of redemption of the covered financial 
                      company.
                          (x) Person.--The term ``person'' includes any 
                      governmental entity in addition to any entity 
                      included in the definition of such term in section 
                      1, title 1, United States Code.
                    (E) Clarification.--No provision of law shall be 
                construed as limiting the right or power of the 
                Corporation, or authorizing any court or agency to limit 
                or delay, in any manner, the right or power of the 
                Corporation to transfer any qualified financial contract 
                or to disaffirm or repudiate any such contract in 
                accordance with this subsection.
                    (F) Walkaway clauses not effective.--
                          (i) In general.--Notwithstanding the 
                      provisions of subparagraph (A) of this paragraph 
                      and sections 403 and 404 of the Federal Deposit 
                      Insurance Corporation Improvement Act of 1991, no 
                      walkaway clause shall be enforceable in a 
                      qualified financial contract of a covered 
                      financial company in default.
                          (ii) Limited suspension of certain 
                      obligations.--In <<NOTE: Time period.>> the case 
                      of a qualified financial contract referred to in 
                      clause (i), any payment or delivery obligations 
                      otherwise due from a party pursuant to the 
                      qualified financial contract shall be suspended 
                      from the time at which the Corporation is 
                      appointed as receiver until the earlier of--
                                    (I) the time at which such party 
                                receives notice that such contract has 
                                been transferred pursuant to paragraph 
                                (10)(A); or
                                    (II) 5:00 p.m. (eastern time) on the 
                                business day following the date of the 
                                appointment of the Corporation as 
                                receiver.
                          (iii) Walkaway clause defined.--For purposes 
                      of this subparagraph, the term ``walkaway clause'' 
                      means any provision in a qualified financial 
                      contract that suspends, conditions, or 
                      extinguishes a payment obligation of a party, in 
                      whole or in part, or does not create a payment 
                      obligation of a party that would otherwise exist, 
                      solely because of the status of such party as a 
                      nondefaulting party in connection with the 
                      insolvency of a covered financial company that is 
                      a party to the contract or the appointment of or 
                      the exercise of rights or powers by the 
                      Corporation as receiver for such covered financial 
                      company, and not as a result of the exercise by a 
                      party of any right to offset, setoff, or net 
                      obligations that exist under the contract, any 
                      other contract between those parties, or 
                      applicable law.

[[Page 124 STAT. 1489]]

                    (G) Certain obligations to clearing organizations.--
                In the event that the Corporation has been appointed as 
                receiver for a covered financial company which is a 
                party to any qualified financial contract cleared by or 
                subject to the rules of a clearing organization (as 
                defined in paragraph (9)(D)), the receiver shall use its 
                best efforts to meet all margin, collateral, and 
                settlement obligations of the covered financial company 
                that arise under qualified financial contracts (other 
                than any margin, collateral, or settlement obligation 
                that is not enforceable against the receiver under 
                paragraph (8)(F)(i) or paragraph (10)(B)), as required 
                by the rules of the clearing organization when due. 
                Notwithstanding any other provision of this title, if 
                the receiver fails to satisfy any such margin, 
                collateral, or settlement obligations under the rules of 
                the clearing organization, the clearing organization 
                shall have the immediate right to exercise, and shall 
                not be stayed from exercising, all of its rights and 
                remedies under its rules and applicable law with respect 
                to any qualified financial contract of the covered 
                financial company, including, without limitation, the 
                right to liquidate all positions and collateral of such 
                covered financial company under the company's qualified 
                financial contracts, and suspend or cease to act for 
                such covered financial company, all in accordance with 
                the rules of the clearing organization.
                    (H) Recordkeeping.--
                          (i) Joint rulemaking.--The Federal primary 
                      financial regulatory agencies shall jointly 
                      prescribe regulations requiring that financial 
                      companies maintain such records with respect to 
                      qualified financial contracts (including market 
                      valuations) that the Federal primary financial 
                      regulatory agencies determine to be necessary or 
                      appropriate in order to assist the Corporation as 
                      receiver for a covered financial company in being 
                      able to exercise its rights and fulfill its 
                      obligations under this paragraph or paragraph (9) 
                      or (10).
                          (ii) Time frame.--The Federal primary 
                      financial regulatory agencies shall prescribe 
                      joint final or interim final regulations not later 
                      than 24 months after the date of enactment of this 
                      Act.
                          (iii) Back-up rulemaking authority.--If the 
                      Federal primary financial regulatory agencies do 
                      not prescribe joint final or interim final 
                      regulations within the time frame in clause (ii), 
                      the Chairperson of the Council shall prescribe, in 
                      consultation with the Corporation, the regulations 
                      required by clause (i).
                          (iv) Categorization and tiering.--The joint 
                      regulations prescribed under clause (i) shall, as 
                      appropriate, differentiate among financial 
                      companies by taking into consideration their size, 
                      risk, complexity, leverage, frequency and dollar 
                      amount of qualified financial contracts, 
                      interconnectedness to the financial system, and 
                      any other factors deemed appropriate.
            (9) Transfer of qualified financial contracts.--
                    (A) In general.--In making any transfer of assets or 
                liabilities of a covered financial company in default,

[[Page 124 STAT. 1490]]

                which includes any qualified financial contract, the 
                Corporation as receiver for such covered financial 
                company shall either--
                          (i) transfer to one financial institution, 
                      other than a financial institution for which a 
                      conservator, receiver, trustee in bankruptcy, or 
                      other legal custodian has been appointed or which 
                      is otherwise the subject of a bankruptcy or 
                      insolvency proceeding--
                                    (I) all qualified financial 
                                contracts between any person or any 
                                affiliate of such person and the covered 
                                financial company in default;
                                    (II) all claims of such person or 
                                any affiliate of such person against 
                                such covered financial company under any 
                                such contract (other than any claim 
                                which, under the terms of any such 
                                contract, is subordinated to the claims 
                                of general unsecured creditors of such 
                                company);
                                    (III) all claims of such covered 
                                financial company against such person or 
                                any affiliate of such person under any 
                                such contract; and
                                    (IV) all property securing or any 
                                other credit enhancement for any 
                                contract described in subclause (I) or 
                                any claim described in subclause (II) or 
                                (III) under any such contract; or
                          (ii) transfer none of the qualified financial 
                      contracts, claims, property or other credit 
                      enhancement referred to in clause (i) (with 
                      respect to such person and any affiliate of such 
                      person).
                    (B) Transfer to foreign bank, financial institution, 
                or branch or agency thereof.--In transferring any 
                qualified financial contracts and related claims and 
                property under subparagraph (A)(i), the Corporation as 
                receiver for the covered financial company shall not 
                make such transfer to a foreign bank, financial 
                institution organized under the laws of a foreign 
                country, or a branch or agency of a foreign bank or 
                financial institution unless, under the law applicable 
                to such bank, financial institution, branch or agency, 
                to the qualified financial contracts, and to any netting 
                contract, any security agreement or arrangement or other 
                credit enhancement related to one or more qualified 
                financial contracts, the contractual rights of the 
                parties to such qualified financial contracts, netting 
                contracts, security agreements or arrangements, or other 
                credit enhancements are enforceable substantially to the 
                same extent as permitted under this section.
                    (C) Transfer of contracts subject to the rules of a 
                clearing organization.--In the event that the 
                Corporation as receiver for a financial institution 
                transfers any qualified financial contract and related 
                claims, property, or credit enhancement pursuant to 
                subparagraph (A)(i) and such contract is cleared by or 
                subject to the rules of a clearing organization, the 
                clearing organization shall not be required to accept 
                the transferee as a member by virtue of the transfer.
                    (D) Definitions.--For purposes of this paragraph--

[[Page 124 STAT. 1491]]

                          (i) the term ``financial institution'' means a 
                      broker or dealer, a depository institution, a 
                      futures commission merchant, a bridge financial 
                      company, or any other institution determined by 
                      the Corporation, by regulation, to be a financial 
                      institution; and
                          (ii) the term ``clearing organization'' has 
                      the same meaning as in section 402 of the Federal 
                      Deposit Insurance Corporation Improvement Act of 
                      1991.
            (10) Notification of transfer.--
                    (A) In general.--
                          (i) Notice.--The Corporation shall provide 
                      notice in accordance with clause (ii), if--
                                    (I) the Corporation as receiver for 
                                a covered financial company in default 
                                or in danger of default transfers any 
                                assets or liabilities of the covered 
                                financial company; and
                                    (II) the transfer includes any 
                                qualified financial contract.
                          (ii) Timing.--The Corporation as receiver for 
                      a covered financial company shall notify any 
                      person who is a party to any contract described in 
                      clause (i) of such transfer not later than 5:00 
                      p.m. (eastern time) on the business day following 
                      the date of the appointment of the Corporation as 
                      receiver.
                    (B) Certain rights not enforceable.--
                          (i) Receivership.--A <<NOTE: Time 
                      period.>> person who is a party to a qualified 
                      financial contract with a covered financial 
                      company may not exercise any right that such 
                      person has to terminate, liquidate, or net such 
                      contract under paragraph (8)(A) solely by reason 
                      of or incidental to the appointment under this 
                      section of the Corporation as receiver for the 
                      covered financial company (or the insolvency or 
                      financial condition of the covered financial 
                      company for which the Corporation has been 
                      appointed as receiver)--
                                    (I) until 5:00 p.m. (eastern time) 
                                on the business day following the date 
                                of the appointment; or
                                    (II) after the person has received 
                                notice that the contract has been 
                                transferred pursuant to paragraph 
                                (9)(A).
                          (ii) Notice.--For purposes of this paragraph, 
                      the Corporation as receiver for a covered 
                      financial company shall be deemed to have notified 
                      a person who is a party to a qualified financial 
                      contract with such covered financial company, if 
                      the Corporation has taken steps reasonably 
                      calculated to provide notice to such person by the 
                      time specified in subparagraph (A).
                    (C) Treatment of bridge financial company.--For 
                purposes of paragraph (9), a bridge financial company 
                shall not be considered to be a financial institution 
                for which a conservator, receiver, trustee in 
                bankruptcy, or other legal custodian has been appointed, 
                or which is otherwise the subject of a bankruptcy or 
                insolvency proceeding.
                    (D) Business day defined.--For purposes of this 
                paragraph, the term ``business day'' means any day other 
                than any Saturday, Sunday, or any day on which either 
                the

[[Page 124 STAT. 1492]]

                New York Stock Exchange or the Federal Reserve Bank of 
                New York is closed.
            (11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising the rights of disaffirmance or 
        repudiation of the Corporation as receiver with respect to any 
        qualified financial contract to which a covered financial 
        company is a party, the Corporation shall either--
                    (A) disaffirm or repudiate all qualified financial 
                contracts between--
                          (i) any person or any affiliate of such 
                      person; and
                          (ii) the covered financial company in default; 
                      or
                    (B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).
            (12) Certain security and customer interests not 
        avoidable.--No provision of this subsection shall be construed 
        as permitting the avoidance of any--
                    (A) legally enforceable or perfected security 
                interest in any of the assets of any covered financial 
                company, except in accordance with subsection (a)(11); 
                or
                    (B) legally enforceable interest in customer 
                property, security entitlements in respect of assets or 
                property held by the covered financial company for any 
                security entitlement holder.
            (13) Authority to enforce contracts.--
                    (A) In general.--The Corporation, as receiver for a 
                covered financial company, may enforce any contract, 
                other than a liability insurance contract of a director 
                or officer, a financial institution bond entered into by 
                the covered financial company, notwithstanding any 
                provision of the contract providing for termination, 
                default, acceleration, or exercise of rights upon, or 
                solely by reason of, insolvency, the appointment of or 
                the exercise of rights or powers by the Corporation as 
                receiver, the filing of the petition pursuant to section 
                202(a)(1), or the issuance of the recommendations or 
                determination, or any actions or events occurring in 
                connection therewith or as a result thereof, pursuant to 
                section 203.
                    (B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the Corporation as receiver to 
                enforce or recover under a liability insurance contract 
                of a director or officer or financial institution bond 
                under other applicable law.
                    (C) Consent requirement and ipso facto clauses.--
                          (i) In general.--Except <<NOTE: Time 
                      period.>> as otherwise provided by this section, 
                      no person may exercise any right or power to 
                      terminate, accelerate, or declare a default under 
                      any contract to which the covered financial 
                      company is a party (and no provision in any such 
                      contract providing for such default, termination, 
                      or acceleration shall be enforceable), or to 
                      obtain possession of or exercise control over any 
                      property of the covered financial company or 
                      affect any contractual rights of the covered 
                      financial company, without the consent of the

[[Page 124 STAT. 1493]]

                      Corporation as receiver for the covered financial 
                      company during the 90 day period beginning from 
                      the appointment of the Corporation as receiver.
                          (ii) Exceptions.--No provision of this 
                      subparagraph shall apply to a director or officer 
                      liability insurance contract or a financial 
                      institution bond, to the rights of parties to 
                      certain qualified financial contracts pursuant to 
                      paragraph (8), or to the rights of parties to 
                      netting contracts pursuant to subtitle A of title 
                      IV of the Federal Deposit Insurance Corporation 
                      Improvement Act of 1991 (12 U.S.C. 4401 et seq.), 
                      or shall be construed as permitting the 
                      Corporation as receiver to fail to comply with 
                      otherwise enforceable provisions of such contract.
                    (D) Contracts to extend credit.--Notwithstanding any 
                other provision in this title, if the Corporation as 
                receiver enforces any contract to extend credit to the 
                covered financial company or bridge financial company, 
                any valid and enforceable obligation to repay such debt 
                shall be paid by the Corporation as receiver, as an 
                administrative expense of the receivership.
            (14) Exception for federal reserve banks and corporation 
        security interest.--No provision of this subsection shall apply 
        with respect to--
                    (A) any extension of credit from any Federal reserve 
                bank or the Corporation to any covered financial 
                company; or
                    (B) any security interest in the assets of the 
                covered financial company securing any such extension of 
                credit.
            (15) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section 3(a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act.
            (16) Enforcement of contracts guaranteed by the covered 
        financial company.--
                    (A) In general.--The Corporation, as receiver for a 
                covered financial company or as receiver for a 
                subsidiary of a covered financial company (including an 
                insured depository institution) shall have the power to 
                enforce contracts of subsidiaries or affiliates of the 
                covered financial company, the obligations under which 
                are guaranteed or otherwise supported by or linked to 
                the covered financial company, notwithstanding any 
                contractual right to cause the termination, liquidation, 
                or acceleration of such contracts based solely on the 
                insolvency, financial condition, or receivership of the 
                covered financial company, if--
                          (i) such guaranty or other support and all 
                      related assets and liabilities are transferred to 
                      and assumed by a bridge financial company or a 
                      third party (other than a third party for which a 
                      conservator, receiver, trustee in bankruptcy, or 
                      other legal custodian has been appointed, or which 
                      is otherwise the subject of

[[Page 124 STAT. 1494]]

                      a bankruptcy or insolvency proceeding) within the 
                      same period of time as the Corporation is entitled 
                      to transfer the qualified financial contracts of 
                      such covered financial company; or
                          (ii) the Corporation, as receiver, otherwise 
                      provides adequate protection with respect to such 
                      obligations.
                    (B) Rule of construction.--For purposes of this 
                paragraph, a bridge financial company shall not be 
                considered to be a third party for which a conservator, 
                receiver, trustee in bankruptcy, or other legal 
                custodian has been appointed, or which is otherwise the 
                subject of a bankruptcy or insolvency proceeding.

    (d) Valuation of Claims in Default.--
            (1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method utilized by the Corporation for a covered financial 
        company, including transactions authorized under subsection (h), 
        this subsection shall govern the rights of the creditors of any 
        such covered financial company.
            (2) Maximum liability.--The maximum liability of the 
        Corporation, acting as receiver for a covered financial company 
        or in any other capacity, to any person having a claim against 
        the Corporation as receiver or the covered financial company for 
        which the Corporation is appointed shall equal the amount that 
        such claimant would have received if--
                    (A) the Corporation had not been appointed receiver 
                with respect to the covered financial company; and
                    (B) the covered financial company had been 
                liquidated under chapter 7 of the Bankruptcy Code, or 
                any similar provision of State insolvency law applicable 
                to the covered financial company.
            (3) Special provision for orderly liquidation by sipc.--The 
        maximum liability of the Corporation, acting as receiver or in 
        its corporate capacity for any covered broker or dealer to any 
        customer of such covered broker or dealer, with respect to 
        customer property of such customer, shall be--
                    (A) equal to the amount that such customer would 
                have received with respect to such customer property in 
                a case initiated by SIPC under the Securities Investor 
                Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and
                    (B) determined <<NOTE: Determination.>> as of the 
                close of business on the date on which the Corporation 
                is appointed as receiver.
            (4) Additional payments authorized.--
                    (A) In general.--Subject to subsection (o)(1)(D)(i), 
                the Corporation, with the approval of the Secretary, may 
                make additional payments or credit additional amounts to 
                or with respect to or for the account of any claimant or 
                category of claimants of the covered financial company, 
                if the Corporation determines that such payments or 
                credits are necessary or appropriate to minimize losses 
                to the Corporation as receiver from the orderly 
                liquidation of the covered financial company under this 
                section.
                    (B) Limitations.--
                          (i) Prohibition.--The Corporation shall not 
                      make any payments or credit amounts to any 
                      claimant or category of claimants that would 
                      result in any claimant receiving more than the 
                      face value amount of any

[[Page 124 STAT. 1495]]

                      claim that is proven to the satisfaction of the 
                      Corporation.
                          (ii) No obligation.--Notwithstanding any other 
                      provision of Federal or State law, or the 
                      Constitution of any State, the Corporation shall 
                      not be obligated, as a result of having made any 
                      payment under subparagraph (A) or credited any 
                      amount described in subparagraph (A) to or with 
                      respect to, or for the account, of any claimant or 
                      category of claimants, to make payments to any 
                      other claimant or category of claimants.
                    (C) Manner of payment.--The Corporation may make 
                payments or credit amounts under subparagraph (A) 
                directly to the claimants or may make such payments or 
                credit such amounts to a company other than a covered 
                financial company or a bridge financial company 
                established with respect thereto in order to induce such 
                other company to accept liability for such claims.

    (e) Limitation on Court Action.--Except as provided in this title, 
no court may take any action to restrain or affect the exercise of 
powers or functions of the receiver hereunder, and any remedy against 
the Corporation or receiver shall be limited to money damages determined 
in accordance with this title.
    (f) Liability of Directors and Officers.--
            (1) In general.--A director or officer of a covered 
        financial company may be held personally liable for monetary 
        damages in any civil action described in paragraph (2) by, on 
        behalf of, or at the request or direction of the Corporation, 
        which action is prosecuted wholly or partially for the benefit 
        of the Corporation--
                    (A) acting as receiver for such covered financial 
                company;
                    (B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by the Corporation as receiver; or
                    (C) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed in whole or in part by a covered financial 
                company or its affiliate in connection with assistance 
                provided under this title.
            (2) Actions covered.--Paragraph (1) shall apply with respect 
        to actions for gross negligence, including any similar conduct 
        or conduct that demonstrates a greater disregard of a duty of 
        care (than gross negligence) including intentional tortious 
        conduct, as such terms are defined and determined under 
        applicable State law.
            (3) Savings clause.--Nothing in this subsection shall impair 
        or affect any right of the Corporation under other applicable 
        law.

    (g) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, or appraiser 
of a covered financial company, or any other party employed by or 
providing services to a covered financial company, recoverable damages 
determined to result from the improvident or otherwise improper use or 
investment of any assets of the covered financial company shall include 
principal losses and appropriate interest.

[[Page 124 STAT. 1496]]

    (h) Bridge Financial Companies.--
            (1) Organization.--
                    (A) Purpose.--The Corporation, as receiver for one 
                or more covered financial companies or in anticipation 
                of being appointed receiver for one or more covered 
                financial companies, may organize one or more bridge 
                financial companies in accordance with this subsection.
                    (B) Authorities.--Upon the creation of a bridge 
                financial company under subparagraph (A) with respect to 
                a covered financial company, such bridge financial 
                company may--
                          (i) assume such liabilities (including 
                      liabilities associated with any trust or custody 
                      business, but excluding any liabilities that count 
                      as regulatory capital) of such covered financial 
                      company as the Corporation may, in its discretion, 
                      determine to be appropriate;
                          (ii) purchase such assets (including assets 
                      associated with any trust or custody business) of 
                      such covered financial company as the Corporation 
                      may, in its discretion, determine to be 
                      appropriate; and
                          (iii) perform any other temporary function 
                      which the Corporation may, in its discretion, 
                      prescribe in accordance with this section.
            (2) Charter and establishment.--
                    (A) Establishment.--Except as provided in 
                subparagraph (H), where the covered financial company is 
                a covered broker or dealer, the Corporation, as receiver 
                for a covered financial company, may grant a Federal 
                charter to and approve articles of association for one 
                or more bridge financial company or companies, with 
                respect to such covered financial company which shall, 
                by operation of law and immediately upon issuance of its 
                charter and approval of its articles of association, be 
                established and operate in accordance with, and subject 
                to, such charter, articles, and this section.
                    (B) Management.--Upon its establishment, a bridge 
                financial company shall be under the management of a 
                board of directors appointed by the Corporation.
                    (C) Articles of association.--The articles of 
                association and organization certificate of a bridge 
                financial company shall have such terms as the 
                Corporation may provide, and shall be executed by such 
                representatives as the Corporation may designate.
                    (D) Terms of charter; rights and privileges.--
                Subject to and in accordance with the provisions of this 
                subsection, the Corporation shall--
                          (i) establish the terms of the charter of a 
                      bridge financial company and the rights, powers, 
                      authorities, and privileges of a bridge financial 
                      company granted by the charter or as an incident 
                      thereto; and
                          (ii) provide for, and establish the terms and 
                      conditions governing, the management (including 
                      the bylaws and the number of directors of the 
                      board of directors) and operations of the bridge 
                      financial company.
                    (E) Transfer of rights and privileges of covered 
                financial company.--

[[Page 124 STAT. 1497]]

                          (i) In general.--Notwithstanding any other 
                      provision of Federal or State law, the Corporation 
                      may provide for a bridge financial company to 
                      succeed to and assume any rights, powers, 
                      authorities, or privileges of the covered 
                      financial company with respect to which the bridge 
                      financial company was established and, upon such 
                      determination by the Corporation, the bridge 
                      financial company shall immediately and by 
                      operation of law succeed to and assume such 
                      rights, powers, authorities, and privileges.
                          (ii) Effective without approval.--Any 
                      succession to or assumption by a bridge financial 
                      company of rights, powers, authorities, or 
                      privileges of a covered financial company under 
                      clause (i) or otherwise shall be effective without 
                      any further approval under Federal or State law, 
                      assignment, or consent with respect thereto.
                    (F) Corporate governance and election and 
                designation of body of law.--To the extent permitted by 
                the Corporation and consistent with this section and any 
                rules, regulations, or directives issued by the 
                Corporation under this section, a bridge financial 
                company may elect to follow the corporate governance 
                practices and procedures that are applicable to a 
                corporation incorporated under the general corporation 
                law of the State of Delaware, or the State of 
                incorporation or organization of the covered financial 
                company with respect to which the bridge financial 
                company was established, as such law may be amended from 
                time to time.
                    (G) Capital.--
                          (i) Capital not required.--Notwithstanding any 
                      other provision of Federal or State law, a bridge 
                      financial company may, if permitted by the 
                      Corporation, operate without any capital or 
                      surplus, or with such capital or surplus as the 
                      Corporation may in its discretion determine to be 
                      appropriate.
                          (ii) No contribution by the corporation 
                      required.--The Corporation is not required to pay 
                      capital into a bridge financial company or to 
                      issue any capital stock on behalf of a bridge 
                      financial company established under this 
                      subsection.
                          (iii) Authority.--If the Corporation 
                      determines that such action is advisable, the 
                      Corporation may cause capital stock or other 
                      securities of a bridge financial company 
                      established with respect to a covered financial 
                      company to be issued and offered for sale in such 
                      amounts and on such terms and conditions as the 
                      Corporation may, in its discretion, determine.
                          (iv) Operating funds in lieu of capital and 
                      implementation plan.--Upon the organization of a 
                      bridge financial company, and thereafter as the 
                      Corporation may, in its discretion, determine to 
                      be necessary or advisable, the Corporation may 
                      make available to the bridge financial company, 
                      subject to the plan described in subsection 
                      (n)(9), funds for the operation of the bridge 
                      financial company in lieu of capital.
                    (H) Bridge brokers or dealers.--

[[Page 124 STAT. 1498]]

                          (i) In general.--The Corporation, as receiver 
                      for a covered broker or dealer, may approve 
                      articles of association for one or more bridge 
                      financial companies with respect to such covered 
                      broker or dealer, which bridge financial company 
                      or companies shall, by operation of law and 
                      immediately upon approval of its articles of 
                      association--
                                    (I) be established and deemed 
                                registered with the Commission under the 
                                Securities Exchange Act of 1934 and a 
                                member of SIPC;
                                    (II) operate in accordance with such 
                                articles and this section; and
                                    (III) succeed to any and all 
                                registrations and memberships of the 
                                covered financial company with or in any 
                                self-regulatory organizations.
                          (ii) Other requirements.--Except as provided 
                      in clause (i), and notwithstanding any other 
                      provision of this section, the bridge financial 
                      company shall be subject to the Federal securities 
                      laws and all requirements with respect to being a 
                      member of a self-regulatory organization, unless 
                      exempted from any such requirements by the 
                      Commission, as is necessary or appropriate in the 
                      public interest or for the protection of 
                      investors.
                          (iii) Treatment of customers.--Except as 
                      otherwise provided by this title, any customer of 
                      the covered broker or dealer whose account is 
                      transferred to a bridge financial company shall 
                      have all the rights, privileges, and protections 
                      under section 205(f) and under the Securities 
                      Investor Protection Act of 1970 (15 U.S.C. 78aaa 
                      et seq.), that such customer would have had if the 
                      account were not transferred from the covered 
                      financial company under this subparagraph.
                          (iv) Operation of bridge brokers or dealers.--
                      Notwithstanding any other provision of this title, 
                      the Corporation shall not operate any bridge 
                      financial company created by the Corporation under 
                      this title with respect to a covered broker or 
                      dealer in such a manner as to adversely affect the 
                      ability of customers to promptly access their 
                      customer property in accordance with applicable 
                      law.
            (3) Interests in and assets and obligations of covered 
        financial company.--Notwithstanding paragraph (1) or (2) or any 
        other provision of law--
                    (A) a bridge financial company shall assume, 
                acquire, or succeed to the assets or liabilities of a 
                covered financial company (including the assets or 
                liabilities associated with any trust or custody 
                business) only to the extent that such assets or 
                liabilities are transferred by the Corporation to the 
                bridge financial company in accordance with, and subject 
                to the restrictions set forth in, paragraph (1)(B); and
                    (B) a bridge financial company shall not assume, 
                acquire, or succeed to any obligation that a covered 
                financial company for which the Corporation has been 
                appointed receiver may have to any shareholder, member, 
                general

[[Page 124 STAT. 1499]]

                partner, limited partner, or other person with an 
                interest in the equity of the covered financial company 
                that arises as a result of the status of that person 
                having an equity claim in the covered financial company.
            (4) Bridge financial company treated as being in default for 
        certain purposes.--A bridge financial company shall be treated 
        as a covered financial company in default at such times and for 
        such purposes as the Corporation may, in its discretion, 
        determine.
            (5) Transfer of assets and liabilities.--
                    (A) Authority of corporation.--The Corporation, as 
                receiver for a covered financial company, may transfer 
                any assets and liabilities of a covered financial 
                company (including any assets or liabilities associated 
                with any trust or custody business) to one or more 
                bridge financial companies, in accordance with and 
                subject to the restrictions of paragraph (1).
                    (B) Subsequent transfers.--At any time after the 
                establishment of a bridge financial company with respect 
                to a covered financial company, the Corporation, as 
                receiver, may transfer any assets and liabilities of 
                such covered financial company as the Corporation may, 
                in its discretion, determine to be appropriate in 
                accordance with and subject to the restrictions of 
                paragraph (1).
                    (C) Treatment of trust or custody business.--For 
                purposes of this paragraph, the trust or custody 
                business, including fiduciary appointments, held by any 
                covered financial company is included among its assets 
                and liabilities.
                    (D) Effective without approval.--The transfer of any 
                assets or liabilities, including those associated with 
                any trust or custody business of a covered financial 
                company, to a bridge financial company shall be 
                effective without any further approval under Federal or 
                State law, assignment, or consent with respect thereto.
                    (E) Equitable treatment of similarly situated 
                creditors.--The Corporation shall treat all creditors of 
                a covered financial company that are similarly situated 
                under subsection (b)(1), in a similar manner in 
                exercising the authority of the Corporation under this 
                subsection to transfer any assets or liabilities of the 
                covered financial company to one or more bridge 
                financial companies established with respect to such 
                covered financial company, except that the Corporation 
                may take any action (including making payments, subject 
                to subsection (o)(1)(D)(i)) that does not comply with 
                this subparagraph, if--
                          (i) the Corporation determines that such 
                      action is necessary--
                                    (I) to maximize the value of the 
                                assets of the covered financial company;
                                    (II) to maximize the present value 
                                return from the sale or other 
                                disposition of the assets of the covered 
                                financial company; or
                                    (III) to minimize the amount of any 
                                loss realized upon the sale or other 
                                disposition of the assets of the covered 
                                financial company; and

[[Page 124 STAT. 1500]]

                          (ii) all creditors that are similarly situated 
                      under subsection (b)(1) receive not less than the 
                      amount provided under paragraphs (2) and (3) of 
                      subsection (d).
                    (F) Limitation on transfer of liabilities.--
                Notwithstanding any other provision of law, the 
                aggregate amount of liabilities of a covered financial 
                company that are transferred to, or assumed by, a bridge 
                financial company from a covered financial company may 
                not exceed the aggregate amount of the assets of the 
                covered financial company that are transferred to, or 
                purchased by, the bridge financial company from the 
                covered financial company.
            (6) Stay of judicial action.--Any judicial action to which a 
        bridge financial company becomes a party by virtue of its 
        acquisition of any assets or assumption of any liabilities of a 
        covered financial company shall be stayed from further 
        proceedings for a period of not longer than 45 days (or such 
        longer period as may be agreed to upon the consent of all 
        parties) at the request of the bridge financial company.
            (7) Agreements against interest of the bridge financial 
        company.--No agreement that tends to diminish or defeat the 
        interest of the bridge financial company in any asset of a 
        covered financial company acquired by the bridge financial 
        company shall be valid against the bridge financial company, 
        unless such agreement--
                    (A) is in writing;
                    (B) was executed by an authorized officer or 
                representative of the covered financial company or 
                confirmed in the ordinary course of business by the 
                covered financial company; and
                    (C) has been on the official record of the company, 
                since the time of its execution, or with which, the 
                party claiming under the agreement provides 
                documentation of such agreement and its authorized 
                execution or confirmation by the covered financial 
                company that is acceptable to the receiver.
            (8) No federal status.--
                    (A) Agency status.--A bridge financial company is 
                not an agency, establishment, or instrumentality of the 
                United States.
                    (B) Employee status.--Representatives for purposes 
                of paragraph (1)(B), directors, officers, employees, or 
                agents of a bridge financial company are not, solely by 
                virtue of service in any such capacity, officers or 
                employees of the United States. Any employee of the 
                Corporation or of any Federal instrumentality who serves 
                at the request of the Corporation as a representative 
                for purposes of paragraph (1)(B), director, officer, 
                employee, or agent of a bridge financial company shall 
                not--
                          (i) solely by virtue of service in any such 
                      capacity lose any existing status as an officer or 
                      employee of the United States for purposes of 
                      title 5, United States Code, or any other 
                      provision of law; or
                          (ii) receive any salary or benefits for 
                      service in any such capacity with respect to a 
                      bridge financial company in addition to such 
                      salary or benefits as are obtained through 
                      employment with the Corporation or such Federal 
                      instrumentality.

[[Page 124 STAT. 1501]]

            (9) Funding authorized.--The Corporation may, subject to the 
        plan described in subsection (n)(9), provide funding to 
        facilitate any transaction described in subparagraph (A), (B), 
        (C), or (D) of paragraph (13) with respect to any bridge 
        financial company, or facilitate the acquisition by a bridge 
        financial company of any assets, or the assumption of any 
        liabilities, of a covered financial company for which the 
        Corporation has been appointed receiver.
            (10) Exempt tax status.--Notwithstanding any other provision 
        of Federal or State law, a bridge financial company, its 
        franchise, property, and income shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
            (11) Federal agency approval; antitrust review.--If a 
        transaction involving the merger or sale of a bridge financial 
        company requires approval by a Federal agency, the transaction 
        may not be consummated before the 5th calendar day after the 
        date of approval by the Federal agency responsible for such 
        approval with respect thereto. 
        If, <<NOTE: Notification. Reports. Deadline.>> in connection 
        with any such approval a report on competitive factors from the 
        Attorney General is required, the Federal agency responsible for 
        such approval shall promptly notify the Attorney General of the 
        proposed transaction and the Attorney General shall provide the 
        required report within 10 days of the request. 
        If <<NOTE: Termination date.>>  a notification is required under 
        section 7A of the Clayton Act with respect to such transaction, 
        the required waiting period shall end on the 15th day after the 
        date on which the Attorney General and the Federal Trade 
        Commission receive such notification, unless the waiting period 
        is terminated earlier under section 7A(b)(2) of the Clayton Act, 
        or extended under section 7A(e)(2) of that Act.
            (12) Duration of bridge <<NOTE: Termination 
        date.>> financial company.--Subject to paragraphs (13) and (14), 
        the status of a bridge financial company as such shall terminate 
        at the end of the 2-year period following the date on which it 
        was granted a charter. The Corporation may, in its discretion, 
        extend the status of the bridge financial company as such for no 
        more than 3 additional 1-year periods.
            (13) Termination of bridge financial company status.--The 
        status of any bridge financial company as such shall terminate 
        upon the earliest of--
                    (A) the date of the merger or consolidation of the 
                bridge financial company with a company that is not a 
                bridge financial company;
                    (B) at the election of the Corporation, the sale of 
                a majority of the capital stock of the bridge financial 
                company to a company other than the Corporation and 
                other than another bridge financial company;
                    (C) the sale of 80 percent, or more, of the capital 
                stock of the bridge financial company to a person other 
                than the Corporation and other than another bridge 
                financial company;
                    (D) at the election of the Corporation, either the 
                assumption of all or substantially all of the 
                liabilities of the bridge financial company by a company 
                that is not a bridge financial company, or the 
                acquisition of all or

[[Page 124 STAT. 1502]]

                substantially all of the assets of the bridge financial 
                company by a company that is not a bridge financial 
                company, or other entity as permitted under applicable 
                law; and
                    (E) the expiration of the period provided in 
                paragraph (12), or the earlier dissolution of the bridge 
                financial company, as provided in paragraph (15).
            (14) Effect of termination events.--
                    (A) Merger or consolidation.--A 
                merger <<NOTE: Delaware.>> or consolidation, described 
                in paragraph (13)(A) shall be conducted in accordance 
                with, and shall have the effect provided in, the 
                provisions of applicable law. For the purpose of 
                effecting such a merger or consolidation, the bridge 
                financial company shall be treated as a corporation 
                organized under the laws of the State of Delaware 
                (unless the law of another State has been selected by 
                the bridge financial company in accordance with 
                paragraph (2)(F)), and the Corporation shall be treated 
                as the sole shareholder thereof, notwithstanding any 
                other provision of State or Federal law.
                    (B) Charter conversion.--Following the sale of a 
                majority of the capital stock of the bridge financial 
                company, as provided in paragraph (13)(B), the 
                Corporation may amend the charter of the bridge 
                financial company to reflect the termination of the 
                status of the bridge financial company as such, 
                whereupon the company shall have all of the rights, 
                powers, and privileges under its constituent documents 
                and applicable Federal or State law. In connection 
                therewith, the Corporation may take such steps as may be 
                necessary or convenient to reincorporate the bridge 
                financial company under the laws of a State and, 
                notwithstanding any provisions of Federal or State law, 
                such State-chartered corporation shall be deemed to 
                succeed by operation of law to such rights, titles, 
                powers, and interests of the bridge financial company as 
                the Corporation may provide, with the same effect as if 
                the bridge financial company had merged with the State-
                chartered corporation under provisions of the corporate 
                laws of such State.
                    (C) Sale of stock.--Following the sale of 80 percent 
                or more of the capital stock of a bridge financial 
                company, as provided in paragraph (13)(C), the company 
                shall have all of the rights, powers, and privileges 
                under its constituent documents and applicable Federal 
                or State law. In connection therewith, the Corporation 
                may take such steps as may be necessary or convenient to 
                reincorporate the bridge financial company under the 
                laws of a State and, notwithstanding any provisions of 
                Federal or State law, the State-chartered corporation 
                shall be deemed to succeed by operation of law to such 
                rights, titles, powers and interests of the bridge 
                financial company as the Corporation may provide, with 
                the same effect as if the bridge financial company had 
                merged with the State-chartered corporation under 
                provisions of the corporate laws of such State.
                    (D) Assumption of liabilities and sale of assets.--
                Following the assumption of all or substantially all of 
                the liabilities of the bridge financial company, or the 
                sale of

[[Page 124 STAT. 1503]]

                all or substantially all of the assets of the bridge 
                financial company, as provided in paragraph (13)(D), at 
                the election of the Corporation, the bridge financial 
                company may retain its status as such for the period 
                provided in paragraph (12) or may be dissolved at the 
                election of the Corporation.
                    (E) Amendments to charter.--Following the 
                consummation of a transaction described in subparagraph 
                (A), (B), (C), or (D) of paragraph (13), the charter of 
                the resulting company shall be amended to reflect the 
                termination of bridge financial company status, if 
                appropriate.
            (15) Dissolution of bridge financial company.--
                    (A) In general.--Notwithstanding any other provision 
                of Federal or State law, if the status of a bridge 
                financial company as such has not previously been 
                terminated by the occurrence of an event specified in 
                subparagraph (A), (B), (C), or (D) of paragraph (13)--
                          (i) the Corporation may, in its discretion, 
                      dissolve the bridge financial company in 
                      accordance with this paragraph at any time; and
                          (ii) the <<NOTE: Time period.>> Corporation 
                      shall promptly commence dissolution proceedings in 
                      accordance with this paragraph upon the expiration 
                      of the 2-year period following the date on which 
                      the bridge financial company was chartered, or any 
                      extension thereof, as provided in paragraph (12).
                    (B) Procedures.--The Corporation shall remain the 
                receiver for a bridge financial company for the purpose 
                of dissolving the bridge financial company. The 
                Corporation as receiver for a bridge financial company 
                shall wind up the affairs of the bridge financial 
                company in conformity with the provisions of law 
                relating to the liquidation of covered financial 
                companies under this title. With respect to any such 
                bridge financial company, the Corporation as receiver 
                shall have all the rights, powers, and privileges and 
                shall perform the duties related to the exercise of such 
                rights, powers, or privileges granted by law to the 
                Corporation as receiver for a covered financial company 
                under this title and, notwithstanding any other 
                provision of law, in the exercise of such rights, 
                powers, and privileges, the Corporation shall not be 
                subject to the direction or supervision of any State 
                agency or other Federal agency.
            (16) Authority to obtain credit.--
                    (A) In general.--A bridge financial company may 
                obtain unsecured credit and issue unsecured debt.
                    (B) Inability to obtain credit.--If a bridge 
                financial company is unable to obtain unsecured credit 
                or issue unsecured debt, the Corporation may authorize 
                the obtaining of credit or the issuance of debt by the 
                bridge financial company--
                          (i) with priority over any or all of the 
                      obligations of the bridge financial company;
                          (ii) secured by a lien on property of the 
                      bridge financial company that is not otherwise 
                      subject to a lien; or
                          (iii) secured by a junior lien on property of 
                      the bridge financial company that is subject to a 
                      lien.
                    (C) Limitations.--

[[Page 124 STAT. 1504]]

                          (i) In general.--The Corporation, after notice 
                      and a hearing, may authorize the obtaining of 
                      credit or the issuance of debt by a bridge 
                      financial company that is secured by a senior or 
                      equal lien on property of the bridge financial 
                      company that is subject to a lien, only if--
                                    (I) the bridge financial company is 
                                unable to otherwise obtain such credit 
                                or issue such debt; and
                                    (II) there is adequate protection of 
                                the interest of the holder of the lien 
                                on the property with respect to which 
                                such senior or equal lien is proposed to 
                                be granted.
                          (ii) Hearing.--The hearing required pursuant 
                      to this subparagraph shall be before a court of 
                      the United States, which shall have jurisdiction 
                      to conduct such hearing and to authorize a bridge 
                      financial company to obtain secured credit under 
                      clause (i).
                    (D) Burden of proof.--In any hearing under this 
                paragraph, the Corporation has the burden of proof on 
                the issue of adequate protection.
                    (E) Qualified financial contracts.--No credit or 
                debt obtained or issued by a bridge financial company 
                may contain terms that impair the rights of a 
                counterparty to a qualified financial contract upon a 
                default by the bridge financial company, other than the 
                priority of such counterparty's unsecured claim (after 
                the exercise of rights) relative to the priority of the 
                bridge financial company's obligations in respect of 
                such credit or debt, unless such counterparty consents 
                in writing to any such impairment.
            (17) Effect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this subsection 
        to obtain credit or issue debt, or of a grant under this section 
        of a priority or a lien, does not affect the validity of any 
        debt so issued, or any priority or lien so granted, to an entity 
        that extended such credit in good faith, whether or not such 
        entity knew of the pendency of the appeal, unless such 
        authorization and the issuance of such debt, or the granting of 
        such priority or lien, were stayed pending appeal.

    (i) Sharing Records.--If the Corporation has been appointed as 
receiver for a covered financial company, other Federal regulators shall 
make all records relating to the covered financial company available to 
the Corporation, which may be used by the Corporation in any manner that 
the Corporation determines to be appropriate.
    (j) Expedited Procedures for Certain Claims.--
            (1) Time for filing notice of appeal.--
        The <<NOTE: Deadlines.>> notice of appeal of any order, whether 
        interlocutory or final, entered in any case brought by the 
        Corporation against a director, officer, employee, agent, 
        attorney, accountant, or appraiser of the covered financial 
        company, or any other person employed by or providing services 
        to a covered financial company, shall be filed not later than 30 
        days after the date of entry of the order. The hearing of the 
        appeal shall be held not later than 120 days after the date of 
        the notice of appeal. The appeal shall be decided not later than 
        180 days after the date of the notice of appeal.

[[Page 124 STAT. 1505]]

            (2) Scheduling.--The <<NOTE: Courts.>> court shall expedite 
        the consideration of any case brought by the Corporation against 
        a director, officer, employee, agent, attorney, accountant, or 
        appraiser of a covered financial company or any other person 
        employed by or providing services to a covered financial 
        company. As far as practicable, the court shall give such case 
        priority on its docket.
            (3) Judicial discretion.--The court may modify the schedule 
        and limitations stated in paragraphs (1) and (2) in a particular 
        case, based on a specific finding that the ends of justice that 
        would be served by making such a modification would outweigh the 
        best interest of the public in having the case resolved 
        expeditiously.

    (k) Foreign Investigations.--The Corporation, as receiver for any 
covered financial company, and for purposes of carrying out any power, 
authority, or duty with respect to a covered financial company--
            (1) may request the assistance of any foreign financial 
        authority and provide assistance to any foreign financial 
        authority in accordance with section 8(v) of the Federal Deposit 
        Insurance Act, as if the covered financial company were an 
        insured depository institution, the Corporation were the 
        appropriate Federal banking agency for the company, and any 
        foreign financial authority were the foreign banking authority; 
        and
            (2) may maintain an office to coordinate foreign 
        investigations or investigations on behalf of foreign financial 
        authorities.

    (l) Prohibition on Entering Secrecy Agreements and Protective 
Orders.--The Corporation may not enter into any agreement or approve any 
protective order which prohibits the Corporation from disclosing the 
terms of any settlement of an administrative or other action for damages 
or restitution brought by the Corporation in its capacity as receiver 
for a covered financial company.
    (m) Liquidation of Certain Covered Financial Companies or Bridge 
Financial Companies.--
            (1) In <<NOTE: Applicability.>> general.--Except as 
        specifically provided in this section, and notwithstanding any 
        other provision of law, the Corporation, in connection with the 
        liquidation of any covered financial company or bridge financial 
        company with respect to which the Corporation has been appointed 
        as receiver, shall--
                    (A) in the case of any covered financial company or 
                bridge financial company that is a stockbroker, but is 
                not a member of the Securities Investor Protection 
                Corporation, apply the provisions of subchapter III of 
                chapter 7 of the Bankruptcy Code, in respect of the 
                distribution to any customer of all customer name 
                security and customer property and member property, as 
                if such covered financial company or bridge financial 
                company were a debtor for purposes of such subchapter; 
                or
                    (B) in the case of any covered financial company or 
                bridge financial company that is a commodity broker, 
                apply the provisions of subchapter IV of chapter 7 the 
                Bankruptcy Code, in respect of the distribution to any 
                customer of all customer property and member property, 
                as if such covered financial company or bridge financial 
                company were a debtor for purposes of such subchapter.
            (2) Definitions.--For purposes of this subsection--

[[Page 124 STAT. 1506]]

                    (A) the terms ``customer'', ``customer name 
                security'', and ``customer property and member 
                property'' have the same meanings as in sections 741 and 
                761 of title 11, United States Code; and
                    (B) the terms ``commodity broker'' and 
                ``stockbroker'' have the same meanings as in section 101 
                of the Bankruptcy Code.

    (n) Orderly Liquidation Fund.--
            (1) Establishment.--There is established in the Treasury of 
        the United States a separate fund to be known as the ``Orderly 
        Liquidation Fund'', which shall be available to the Corporation 
        to carry out the authorities contained in this title, for the 
        cost of actions authorized by this title, including the orderly 
        liquidation of covered financial companies, payment of 
        administrative expenses, the payment of principal and interest 
        by the Corporation on obligations issued under paragraph (5), 
        and the exercise of the authorities of the Corporation under 
        this title.
            (2) Proceeds.--Amounts received by the Corporation, 
        including assessments received under subsection (o), proceeds of 
        obligations issued under paragraph (5), interest and other 
        earnings from investments, and repayments to the Corporation by 
        covered financial companies, shall be deposited into the Fund.
            (3) Management.--The Corporation shall manage the Fund in 
        accordance with this subsection and the policies and procedures 
        established under section 203(d).
            (4) Investments.--At the request of the Corporation, the 
        Secretary may invest such portion of amounts held in the Fund 
        that are not, in the judgment of the Corporation, required to 
        meet the current needs of the Corporation, in obligations of the 
        United States having suitable maturities, as determined by the 
        Corporation. The interest on and the proceeds from the sale or 
        redemption of such obligations shall be credited to the Fund.
            (5) Authority to issue obligations.--
                    (A) Corporation authorized to issue obligations.--
                Upon appointment by the Secretary of the Corporation as 
                receiver for a covered financial company, the 
                Corporation is authorized to issue obligations to the 
                Secretary.
                    (B) Secretary authorized to purchase obligations.--
                The Secretary may, under such terms and conditions as 
                the Secretary may require, purchase or agree to purchase 
                any obligations issued under subparagraph (A), and for 
                such purpose, the Secretary is authorized to use as a 
                public debt transaction the proceeds of the sale of any 
                securities issued under chapter 31 of title 31, United 
                States Code, and the purposes for which securities may 
                be issued under chapter 31 of title 31, United States 
                Code, are extended to include such purchases.
                    (C) Interest rate.--Each purchase of obligations by 
                the Secretary under this paragraph shall be upon such 
                terms and conditions as to yield a return at a rate 
                determined by the Secretary, taking into consideration 
                the current average yield on outstanding marketable 
                obligations of the United States of comparable maturity, 
                plus an

[[Page 124 STAT. 1507]]

                interest rate surcharge to be determined by the 
                Secretary, which shall be greater than the difference 
                between--
                          (i) the current average rate on an index of 
                      corporate obligations of comparable maturity; and
                          (ii) the current average rate on outstanding 
                      marketable obligations of the United States of 
                      comparable maturity.
                    (D) Secretary authorized to sell obligations.--The 
                Secretary may <<NOTE: Determination.>> sell, upon such 
                terms and conditions as the Secretary shall determine, 
                any of the obligations acquired under this paragraph.
                    (E) Public debt transactions.--All purchases and 
                sales by the Secretary of such obligations under this 
                paragraph shall be treated as public debt transactions 
                of the United States, and the proceeds from the sale of 
                any obligations acquired by the Secretary under this 
                paragraph shall be deposited into the Treasury of the 
                United States as miscellaneous receipts.
            (6) Maximum obligation limitation.--The Corporation may not, 
        in connection with the orderly liquidation of a covered 
        financial company, issue or incur any obligation, if, after 
        issuing or incurring the obligation, the aggregate amount of 
        such obligations outstanding under this subsection for each 
        covered financial company would exceed--
                    (A) an amount that is equal to 10 percent of the 
                total consolidated assets of the covered financial 
                company, based on the most recent financial statement 
                available, during the 30-day period immediately 
                following the date of appointment of the Corporation as 
                receiver (or a shorter time period if the Corporation 
                has calculated the amount described under subparagraph 
                (B)); and
                    (B) the amount that is equal to 90 percent of the 
                fair value of the total consolidated assets of each 
                covered financial company that are available for 
                repayment, after the time period described in 
                subparagraph (A).
            (7) Rulemaking.--The Corporation and the Secretary shall 
        jointly, in consultation with the Council, prescribe regulations 
        governing the calculation of the maximum obligation limitation 
        defined in this paragraph.
            (8) Rule of construction.--
                    (A) In general.--Nothing in this section shall be 
                construed to affect the authority of the Corporation 
                under subsection (a) or (b) of section 14 or section 
                15(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
                1824, 1825(c)(5)), the management of the Deposit 
                Insurance Fund by the Corporation, or the resolution of 
                insured depository institutions, provided that--
                          (i) the authorities of the Corporation 
                      contained in this title shall not be used to 
                      assist the Deposit Insurance Fund or to assist any 
                      financial company under applicable law other than 
                      this Act;
                          (ii) the authorities of the Corporation 
                      relating to the Deposit Insurance Fund, or any 
                      other responsibilities of the Corporation under 
                      applicable law other than this title, shall not be 
                      used to assist a covered financial company 
                      pursuant to this title; and

[[Page 124 STAT. 1508]]

                          (iii) the Deposit Insurance Fund may not be 
                      used in any manner to otherwise circumvent the 
                      purposes of this title.
                    (B) Valuation.--For purposes of determining the 
                amount of obligations under this subsection--
                          (i) the Corporation shall include as an 
                      obligation any contingent liability of the 
                      Corporation pursuant to this title; and
                          (ii) the Corporation shall value any 
                      contingent liability at its expected cost to the 
                      Corporation.
            (9) Orderly liquidation and repayment plans.--
                    (A) Orderly liquidation plan.--Amounts in the Fund 
                shall be available to the Corporation with regard to a 
                covered financial company for which the Corporation is 
                appointed receiver after the Corporation has developed 
                an orderly liquidation plan that is acceptable to the 
                Secretary with regard to such covered financial company, 
                including the provision and use of funds, including 
                taking any actions specified under section 204(d) and 
                subsection (h)(2)(G)(iv) and (h)(9) of this section, and 
                payments to third parties. The orderly liquidation plan 
                shall take into account actions to avoid or mitigate 
                potential adverse effects on low income, minority, or 
                underserved communities affected by the failure of the 
                covered financial company, and shall provide for 
                coordination with the primary financial regulatory 
                agencies, as appropriate, to ensure that such actions 
                are taken. The Corporation may, at any time, amend any 
                orderly liquidation plan approved by the Secretary with 
                the concurrence of the Secretary.
                    (B) Mandatory repayment plan.--
                          (i) In general.--
                      No <<NOTE: Contracts.>> amount authorized under 
                      paragraph (6)(B) may be provided by the Secretary 
                      to the Corporation under paragraph (5), unless an 
                      agreement is in effect between the Secretary and 
                      the Corporation that--
                                    (I) provides a specific plan and 
                                schedule to achieve the repayment of the 
                                outstanding amount of any borrowing 
                                under paragraph (5); and
                                    (II) demonstrates that income to the 
                                Corporation from the liquidated assets 
                                of the covered financial company and 
                                assessments under subsection (o) will be 
                                sufficient to amortize the outstanding 
                                balance within the period established in 
                                the repayment schedule and pay the 
                                interest accruing on such balance within 
                                the time provided in subsection 
                                (o)(1)(B).
                          (ii) Consultation with and report to 
                      congress.--The Secretary and the Corporation 
                      shall--
                                    (I) consult with the Committee on 
                                Banking, Housing, and Urban Affairs of 
                                the Senate and the Committee on 
                                Financial Services of the House of 
                                Representatives on the terms of any 
                                repayment schedule agreement; and
                                    (II) submit <<NOTE: Records. Time 
                                period.>> a copy of the repayment 
                                schedule agreement to the Committees 
                                described in subclause (I) before the 
                                end of the 30-day period beginning on 
                                the date on which any amount is provided

[[Page 124 STAT. 1509]]

                                by the Secretary to the Corporation 
                                under paragraph (5).
            (10) Implementation expenses.--
                    (A) In general.--Reasonable implementation expenses 
                of the Corporation incurred after the date of enactment 
                of this Act shall be treated as expenses of the Council.
                    (B) Requests for reimbursement.--The Corporation 
                shall periodically submit a request for reimbursement 
                for implementation expenses to the Chairperson of the 
                Council, who shall arrange for prompt reimbursement to 
                the Corporation of reasonable implementation expenses.
                    (C) Definition.--As used in this paragraph, the term 
                ``implementation expenses''--
                          (i) means costs incurred by the Corporation 
                      beginning on the date of enactment of this Act, as 
                      part of its efforts to implement this title that 
                      do not relate to a particular covered financial 
                      company; and
                          (ii) includes the costs incurred in connection 
                      with the development of policies, procedures, 
                      rules, and regulations and other planning 
                      activities of the Corporation consistent with 
                      carrying out this title.

    (o) Assessments.--
            (1) Risk-based assessments.--
                    (A) Eligible financial companies defined.--For 
                purposes of this subsection, the term ``eligible 
                financial company'' means any bank holding company with 
                total consolidated assets equal to or greater than 
                $50,000,000,000 and any nonbank financial company 
                supervised by the Board of Governors.
                    (B) Assessments.--
                The <<NOTE: Deadline.>> Corporation shall charge one or 
                more risk-based assessments in accordance with the 
                provisions of subparagraph (D), if such assessments are 
                necessary to pay in full the obligations issued by the 
                Corporation to the Secretary under this title within 60 
                months of the date of issuance of such obligations.
                    (C) Extensions authorized.--The Corporation may, 
                with the approval of the Secretary, extend the time 
                period under subparagraph (B), if the Corporation 
                determines that an extension is necessary to avoid a 
                serious adverse effect on the financial system of the 
                United States.
                    (D) Application of assessments.--To meet the 
                requirements of subparagraph (B), the Corporation 
                shall--
                          (i) impose assessments, as soon as 
                      practicable, on any claimant that received 
                      additional payments or amounts from the 
                      Corporation pursuant to subsection (b)(4), (d)(4), 
                      or (h)(5)(E), except for payments or amounts 
                      necessary to initiate and continue operations 
                      essential to implementation of the receivership or 
                      any bridge financial company, to recover on a 
                      cumulative basis, the entire difference between--
                                    (I) the aggregate value the claimant 
                                received from the Corporation on a claim 
                                pursuant to this title (including 
                                pursuant to subsection (b)(4), (d)(4), 
                                and (h)(5)(E)), as of the date on which 
                                such value was received; and
                                    (II) the value the claimant was 
                                entitled to receive from the Corporation 
                                on such claim solely

[[Page 124 STAT. 1510]]

                                from the proceeds of the liquidation of 
                                the covered financial company under this 
                                title; and
                          (ii) if the amounts to be recovered on a 
                      cumulative basis under clause (i) are insufficient 
                      to meet the requirements of subparagraph (B), 
                      after taking into account the considerations set 
                      forth in paragraph (4), impose assessments on--
                                    (I) eligible financial companies; 
                                and
                                    (II) financial companies with total 
                                consolidated assets equal to or greater 
                                than $50,000,000,000 that are not 
                                eligible financial companies.
                    (E) Provision of financing.--Payments or amounts 
                necessary to initiate and continue operations essential 
                to implementation of the receivership or any bridge 
                financial company described in subparagraph (D)(i) shall 
                not include the provision of financing, as defined by 
                rule of the Corporation, to third parties.
            (2) Graduated assessment rate.--The Corporation shall impose 
        assessments on a graduated basis, with financial companies 
        having greater assets and risk being assessed at a higher rate.
            (3) Notification and payment.--The Corporation shall notify 
        each financial company of that company's assessment under this 
        subsection. Any financial company subject to assessment under 
        this subsection shall pay such assessment in accordance with the 
        regulations prescribed pursuant to paragraph (6).
            (4) Risk-based assessment considerations.--
        In <<NOTE: Recommenda- tion.>> imposing assessments under 
        paragraph (1)(D)(ii), the Corporation shall use a risk matrix. 
        The Council shall make a recommendation to the Corporation on 
        the risk matrix to be used in imposing such assessments, and the 
        Corporation shall take into account any such recommendation in 
        the establishment of the risk matrix to be used to impose such 
        assessments. In recommending or establishing such risk matrix, 
        the Council and the Corporation, respectively, shall take into 
        account--
                    (A) economic conditions generally affecting 
                financial companies so as to allow assessments to 
                increase during more favorable economic conditions and 
                to decrease during less favorable economic conditions;
                    (B) any assessments imposed on a financial company 
                or an affiliate of a financial company that--
                          (i) is an insured depository institution, 
                      assessed pursuant to section 7 or 13(c)(4)(G) of 
                      the Federal Deposit Insurance Act;
                          (ii) is a member of the Securities Investor 
                      Protection Corporation, assessed pursuant to 
                      section 4 of the Securities Investor Protection 
                      Act of 1970 (15 U.S.C. 78ddd);
                          (iii) is an insured credit union, assessed 
                      pursuant to section 202(c)(1)(A)(i) of the Federal 
                      Credit Union Act (12 U.S.C. 1782(c)(1)(A)(i)); or
                          (iv) is an insurance company, assessed 
                      pursuant to applicable State law to cover (or 
                      reimburse payments made to cover) the costs of the 
                      rehabilitation, liquidation, or other State 
                      insolvency proceeding with respect to 1 or more 
                      insurance companies;

[[Page 124 STAT. 1511]]

                    (C) the risks presented by the financial company to 
                the financial system and the extent to which the 
                financial company has benefitted, or likely would 
                benefit, from the orderly liquidation of a financial 
                company under this title, including--
                          (i) the amount, different categories, and 
                      concentrations of assets of the financial company 
                      and its affiliates, including both on-balance 
                      sheet and off-balance sheet assets;
                          (ii) the activities of the financial company 
                      and its affiliates;
                          (iii) the relevant market share of the 
                      financial company and its affiliates;
                          (iv) the extent to which the financial company 
                      is leveraged;
                          (v) the potential exposure to sudden calls on 
                      liquidity precipitated by economic distress;
                          (vi) the amount, maturity, volatility, and 
                      stability of the company's financial obligations 
                      to, and relationship with, other financial 
                      companies;
                          (vii) the amount, maturity, volatility, and 
                      stability of the liabilities of the company, 
                      including the degree of reliance on short-term 
                      funding, taking into consideration existing 
                      systems for measuring a company's risk-based 
                      capital;
                          (viii) the stability and variety of the 
                      company's sources of funding;
                          (ix) the company's importance as a source of 
                      credit for households, businesses, and State and 
                      local governments and as a source of liquidity for 
                      the financial system;
                          (x) the extent to which assets are simply 
                      managed and not owned by the financial company and 
                      the extent to which ownership of assets under 
                      management is diffuse; and
                          (xi) the amount, different categories, and 
                      concentrations of liabilities, both insured and 
                      uninsured, contingent and noncontingent, including 
                      both on-balance sheet and off-balance sheet 
                      liabilities, of the financial company and its 
                      affiliates;
                    (D) any risks presented by the financial company 
                during the 10-year period immediately prior to the 
                appointment of the Corporation as receiver for the 
                covered financial company that contributed to the 
                failure of the covered financial company; and
                    (E) such other risk-related factors as the 
                Corporation, or the Council, as applicable, may 
                determine to be appropriate.
            (5) Collection of information.--The Corporation may impose 
        on covered financial companies such collection of information 
        requirements as the Corporation deems necessary to carry out 
        this subsection after the appointment of the Corporation as 
        receiver under this title.
            (6) Rulemaking.--
                    (A) In general.--
                The <<NOTE: Consultation.>> Corporation shall prescribe 
                regulations to carry out this subsection. The 
                Corporation shall

[[Page 124 STAT. 1512]]

                consult with the Secretary in the development and 
                finalization of such regulations.
                    (B) Equitable treatment.--The regulations prescribed 
                under subparagraph (A) shall take into account the 
                differences in risks posed to the financial stability of 
                the United States by financial companies, the 
                differences in the liability structures of financial 
                companies, and the different bases for other assessments 
                that such financial companies may be required to pay, to 
                ensure that assessed financial companies are treated 
                equitably and that assessments under this subsection 
                reflect such differences.

    (p) Unenforceability of Certain Agreements.--
            (1) In general.--No provision described in paragraph (2) 
        shall be enforceable against or impose any liability on any 
        person, as such enforcement or liability shall be contrary to 
        public policy.
            (2) Prohibited provisions.--A provision described in this 
        paragraph is any term contained in any existing or future 
        standstill, confidentiality, or other agreement that, directly 
        or indirectly--
                    (A) affects, restricts, or limits the ability of any 
                person to offer to acquire or acquire;
                    (B) prohibits any person from offering to acquire or 
                acquiring; or
                    (C) prohibits any person from using any previously 
                disclosed information in connection with any such offer 
                to acquire or acquisition of,
        all or part of any covered financial company, including any 
        liabilities, assets, or interest therein, in connection with any 
        transaction in which the Corporation exercises its authority 
        under this title.

    (q) Other Exemptions.--
            (1) In general.--When acting as a receiver under this 
        title--
                    (A) the Corporation, including its franchise, its 
                capital, reserves and surplus, and its income, shall be 
                exempt from all taxation imposed by any State, county, 
                municipality, or local taxing authority, except that any 
                real property of the Corporation shall be subject to 
                State, territorial, county, municipal, or local taxation 
                to the same extent according to its value as other real 
                property is taxed, except that, notwithstanding the 
                failure of any person to challenge an assessment under 
                State law of the value of such property, such value, and 
                the tax thereon, shall be determined as of the period 
                for which such tax is imposed;
                    (B) no property of the Corporation shall be subject 
                to levy, attachment, garnishment, foreclosure, or sale 
                without the consent of the Corporation, nor shall any 
                involuntary lien attach to the property of the 
                Corporation; and
                    (C) the Corporation shall not be liable for any 
                amounts in the nature of penalties or fines, including 
                those arising from the failure of any person to pay any 
                real property, personal property, probate, or recording 
                tax or any recording or filing fees when due; and
                    (D) the Corporation shall be exempt from all 
                prosecution by the United States or any State, county, 
                municipality, or local authority for any criminal 
                offense arising

[[Page 124 STAT. 1513]]

                under Federal, State, county, municipal, or local law, 
                which was allegedly committed by the covered financial 
                company, or persons acting on behalf of the covered 
                financial company, prior to the appointment of the 
                Corporation as receiver.
            (2) Limitation.--Paragraph (1) shall not apply with respect 
        to any tax imposed (or other amount arising) under the Internal 
        Revenue Code of 1986.

    (r) Certain Sales of Assets Prohibited.--
            (1) Persons who engaged in improper conduct with, or caused 
        losses to, covered <<NOTE: Regulations.>> financial companies.--
        The Corporation shall prescribe regulations which, at a minimum, 
        shall prohibit the sale of assets of a covered financial company 
        by the Corporation to--
                    (A) any person who--
                          (i) has defaulted, or was a member of a 
                      partnership or an officer or director of a 
                      corporation that has defaulted, on 1 or more 
                      obligations, the aggregate amount of which exceeds 
                      $1,000,000, to such covered financial company;
                          (ii) has been found to have engaged in 
                      fraudulent activity in connection with any 
                      obligation referred to in clause (i); and
                          (iii) proposes to purchase any such asset in 
                      whole or in part through the use of the proceeds 
                      of a loan or advance of credit from the 
                      Corporation or from any covered financial company;
                    (B) any person who participated, as an officer or 
                director of such covered financial company or of any 
                affiliate of such company, in a material way in any 
                transaction that resulted in a substantial loss to such 
                covered financial company; or
                    (C) any person who has demonstrated a pattern or 
                practice of defalcation regarding obligations to such 
                covered financial company.
            (2) Convicted debtors.--Except as provided in paragraph (3), 
        a person may not purchase any asset of such institution from the 
        receiver, if that person--
                    (A) has been convicted of an offense under section 
                215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 
                1343, or 1344 of title 18, United States Code, or of 
                conspiring to commit such an offense, affecting any 
                covered financial company; and
                    (B) is in default on any loan or other extension of 
                credit from such covered financial company which, if not 
                paid, will cause substantial loss to the Fund or the 
                Corporation.
            (3) Settlement of claims.--Paragraphs (1) and (2) shall not 
        apply to the sale or transfer by the Corporation of any asset of 
        any covered financial company to any person, if the sale or 
        transfer of the asset resolves or settles, or is part of the 
        resolution or settlement, of 1 or more claims that have been, or 
        could have been, asserted by the Corporation against the person.
            (4) Definition of default.--For purposes of this subsection, 
        the term ``default'' means a failure to comply with

[[Page 124 STAT. 1514]]

        the terms of a loan or other obligation to such an extent that 
        the property securing the obligation is foreclosed upon.

    (s) Recoupment of Compensation From Senior Executives and 
Directors.--
            (1) In general.--The Corporation, as receiver of a covered 
        financial company, may recover from any current or former senior 
        executive or director substantially responsible for the failed 
        condition of the covered financial company any compensation 
        received during the 2-year period preceding the date on which 
        the Corporation was appointed as the receiver of the covered 
        financial company, except that, in the case of fraud, no time 
        limit shall apply.
            (2) Cost considerations.--In seeking to recover any such 
        compensation, the Corporation shall weigh the financial and 
        deterrent benefits of such recovery against the cost of 
        executing the recovery.
            (3) Rulemaking.--The Corporation shall promulgate 
        regulations to implement the requirements of this subsection, 
        including defining the term ``compensation'' to mean any 
        financial remuneration, including salary, bonuses, incentives, 
        benefits, severance, deferred compensation, or golden parachute 
        benefits, and any profits realized from the sale of the 
        securities of the covered financial company.
SEC. 211. <<NOTE: 12 USC 5391.>> MISCELLANEOUS PROVISIONS.

    (a) Clarification of Prohibition Regarding Concealment of Assets 
From Receiver or Liquidating Agent.--Section 1032(1) of title 18, United 
States Code, is amended by inserting ``the Federal Deposit Insurance 
Corporation acting as receiver for a covered financial company, in 
accordance with title II of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act,'' before ``or the National Credit''.
    (b) Conforming Amendment.--Section 1032 of title 18, United States 
Code, is amended in the section heading, by striking ``of financial 
institution''.
    (c) Federal Deposit Insurance Corporation Improvement Act of 1991.--
Section 403(a) of the Federal Deposit Insurance Corporation Improvement 
Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting ``section 210(c) 
of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 
section 1367 of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4617(d)),'' after ``section 11(e) of 
the Federal Deposit Insurance Act,''.
    (d) FDIC Inspector General Reviews.--
            (1) Scope.--The <<NOTE: Audits. Investigations.>> Inspector 
        General of the Corporation shall conduct, supervise, and 
        coordinate audits and investigations of the liquidation of any 
        covered financial company by the Corporation as receiver under 
        this title, including collecting and summarizing--
                    (A) a description of actions taken by the 
                Corporation as receiver;
                    (B) a description of any material sales, transfers, 
                mergers, obligations, purchases, and other material 
                transactions entered into by the Corporation;
                    (C) an evaluation of the adequacy of the policies 
                and procedures of the Corporation under section 203(d) 
                and orderly liquidation plan under section 210(n)(14);

[[Page 124 STAT. 1515]]

                    (D) an evaluation of the utilization by the 
                Corporation of the private sector in carrying out its 
                functions, including the adequacy of any conflict-of-
                interest reviews; and
                    (E) an evaluation of the overall performance of the 
                Corporation in liquidating the covered financial 
                company, including administrative costs, timeliness of 
                liquidation process, and impact on the financial system.
            (2) Frequency.--Not <<NOTE: Deadlines.>> later than 6 months 
        after the date of appointment of the Corporation as receiver 
        under this title and every 6 months thereafter, the Inspector 
        General of the Corporation shall conduct the audit and 
        investigation described in paragraph (1).
            (3) Reports and testimony.--The Inspector General of the 
        Corporation shall include in the semiannual reports required by 
        section 5(a) of the Inspector General Act of 1978 (5 U.S.C. 
        App.), a summary of the findings and evaluations under paragraph 
        (1), and shall appear before the appropriate committees of 
        Congress, if requested, to present each such report.
            (4) Funding.--
                    (A) Initial funding.--The expenses of the Inspector 
                General of the Corporation in carrying out this 
                subsection shall be considered administrative expenses 
                of the receivership.
                    (B) Additional funding.--If the maximum amount 
                available to the Corporation as receiver under this 
                title is insufficient to enable the Inspector General of 
                the Corporation to carry out the duties under this 
                subsection, the Corporation shall pay such additional 
                amounts from assessments imposed under section 210.
            (5) Termination of responsibilities.--The duties and 
        responsibilities of the Inspector General of the Corporation 
        under this subsection shall terminate 1 year after the date of 
        termination of the receivership under this title.

    (e) Treasury Inspector General Reviews.--
            (1) Scope.--The <<NOTE: Audits. Investigations.>> Inspector 
        General of the Department of the Treasury shall conduct, 
        supervise, and coordinate audits and investigations of actions 
        taken by the Secretary related to the liquidation of any covered 
        financial company under this title, including collecting and 
        summarizing--
                    (A) a description of actions taken by the Secretary 
                under this title;
                    (B) an analysis of the approval by the Secretary of 
                the policies and procedures of the Corporation under 
                section 203 and acceptance of the orderly liquidation 
                plan of the Corporation under section 210; and
                    (C) an assessment of the terms and conditions 
                underlying the purchase by the Secretary of obligations 
                of the Corporation under section 210.
            (2) Frequency.--Not <<NOTE: Deadlines.>> later than 6 months 
        after the date of appointment of the Corporation as receiver 
        under this title and every 6 months thereafter, the Inspector 
        General of the Department of the Treasury shall conduct the 
        audit and investigation described in paragraph (1).
            (3) Reports and testimony.--The Inspector General of the 
        Department of the Treasury shall include in the semiannual 
        reports required by section 5(a) of the Inspector General Act

[[Page 124 STAT. 1516]]

        of 1978 (5 U.S.C. App.), a summary of the findings and 
        assessments under paragraph (1), and shall appear before the 
        appropriate committees of Congress, if requested, to present 
        each such report.
            (4) Termination of responsibilities.--The duties and 
        responsibilities of the Inspector General of the Department of 
        the Treasury under this subsection shall terminate 1 year after 
        the date on which the obligations purchased by the Secretary 
        from the Corporation under section 210 are fully redeemed.

    (f) Primary Financial Regulatory Agency Inspector General Reviews.--
            (1) Scope.--Upon <<NOTE: Reports.>> the appointment of the 
        Corporation as receiver for a covered financial company 
        supervised by a Federal primary financial regulatory agency or 
        the Board of Governors under section 165, the Inspector General 
        of the agency or the Board of Governors shall make a written 
        report reviewing the supervision by the agency or the Board of 
        Governors of the covered financial company, which shall--
                    (A) <<NOTE: Evaluation.>> evaluate the effectiveness 
                of the agency or the Board of Governors in carrying out 
                its supervisory responsibilities with respect to the 
                covered financial company;
                    (B) identify any acts or omissions on the part of 
                agency or Board of Governors officials that contributed 
                to the covered financial company being in default or in 
                danger of default;
                    (C) identify any actions that could have been taken 
                by the agency or the Board of Governors that would have 
                prevented the company from being in default or in danger 
                of default; and
                    (D) <<NOTE: Recommenda- tion.>> recommend 
                appropriate administrative or legislative action.
            (2) Reports and testimony.--Not later than 1 year after the 
        date of appointment of the Corporation as receiver under this 
        title, the Inspector General of the Federal primary financial 
        regulatory agency or the Board of Governors shall provide the 
        report required by paragraph (1) to such agency or the Board of 
        Governors, and along with such agency or the Board of Governors, 
        as applicable, shall appear before the appropriate committees of 
        Congress, if requested, to present the report required by 
        paragraph (1). Not later than 90 days after the date of receipt 
        of the report required by paragraph (1), such agency or the 
        Board of Governors, as applicable, shall provide a written 
        report to Congress describing any actions taken in response to 
        the recommendations in the report, and if no such actions were 
        taken, describing the reasons why no actions were taken.
SEC. 212. <<NOTE: 12 USC 5392.>> PROHIBITION OF CIRCUMVENTION AND 
                        PREVENTION OF CONFLICTS OF INTEREST.

    (a) No Other Funding.--Funds for the orderly liquidation of any 
covered financial company under this title shall only be provided as 
specified under this title.
    (b) Limit on Governmental Actions.--No governmental entity may take 
any action to circumvent the purposes of this title.

[[Page 124 STAT. 1517]]

    (c) Conflict of Interest.--In the event that the Corporation is 
appointed receiver for more than 1 covered financial company or is 
appointed receiver for a covered financial company and receiver for any 
insured depository institution that is an affiliate of such covered 
financial company, the Corporation shall take appropriate action, as 
necessary to avoid any conflicts of interest that may arise in 
connection with multiple receiverships.
SEC. 213. <<NOTE: 12 USC 5393.>> BAN ON CERTAIN ACTIVITIES BY 
                        SENIOR EXECUTIVES AND DIRECTORS.

    (a) Prohibition Authority.--The Board of Governors or, if the 
covered financial company was not supervised by the Board of Governors, 
the Corporation, may exercise the authority provided by this section.
    (b) Authority To Issue Order.--The appropriate agency described in 
subsection (a) may take any action authorized by subsection (c), if the 
agency determines that--
            (1) a senior executive or a director of the covered 
        financial company, prior to the appointment of the Corporation 
        as receiver, has, directly or indirectly--
                    (A) violated--
                          (i) any law or regulation;
                          (ii) any cease-and-desist order which has 
                      become final;
                          (iii) any condition imposed in writing by a 
                      Federal agency in connection with any action on 
                      any application, notice, or request by such 
                      company or senior executive; or
                          (iv) any written agreement between such 
                      company and such agency;
                    (B) engaged or participated in any unsafe or unsound 
                practice in connection with any financial company; or
                    (C) committed or engaged in any act, omission, or 
                practice which constitutes a breach of the fiduciary 
                duty of such senior executive or director;
            (2) by reason of the violation, practice, or breach 
        described in any subparagraph of paragraph (1), such senior 
        executive or director has received financial gain or other 
        benefit by reason of such violation, practice, or breach and 
        such violation, practice, or breach contributed to the failure 
        of the company; and
            (3) such violation, practice, or breach--
                    (A) involves personal dishonesty on the part of such 
                senior executive or director; or
                    (B) demonstrates willful or continuing disregard by 
                such senior executive or director for the safety or 
                soundness of such company.

    (c) Authorized Actions.--
            (1) In general.--The <<NOTE: Notice. Time 
        period.>> appropriate agency for a financial company, as 
        described in subsection (a), may serve upon a senior executive 
        or director described in subsection (b) a written notice of the 
        intention of the agency to prohibit any further participation by 
        such person, in any manner, in the conduct of the affairs of any 
        financial company for a period of time determined by the 
        appropriate agency to be commensurate with such violation, 
        practice, or breach, provided such period shall be not less than 
        2 years.

[[Page 124 STAT. 1518]]

            (2) Procedures.--The <<NOTE: Applicability.>> due process 
        requirements and other procedures under section 8(e) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1818(e)) shall apply to 
        actions under this section as if the covered financial company 
        were an insured depository institution and the senior executive 
        or director were an institution-affiliated party, as those terms 
        are defined in that Act.

    (d) Regulations.--The Corporation and the Board of Governors, in 
consultation with the Council, shall jointly prescribe rules or 
regulations to administer and carry out this section, including rules, 
regulations, or guidelines to further define the term senior executive 
for the purposes of this section.
SEC. 214. <<NOTE: 12 USC 5394.>> PROHIBITION ON TAXPAYER FUNDING.

    (a) Liquidation Required.--All financial companies put into 
receivership under this title shall be liquidated. No taxpayer funds 
shall be used to prevent the liquidation of any financial company under 
this title.
    (b) Recovery of Funds.--All funds expended in the liquidation of a 
financial company under this title shall be recovered from the 
disposition of assets of such financial company, or shall be the 
responsibility of the financial sector, through assessments.
    (c) No Losses to Taxpayers.--Taxpayers shall bear no losses from the 
exercise of any authority under this title.
SEC. 215. STUDY ON SECURED CREDITOR HAIRCUTS.

    (a) Study Required.--The Council shall conduct a study evaluating 
the importance of maximizing United States taxpayer protections and 
promoting market discipline with respect to the treatment of fully 
secured creditors in the utilization of the orderly liquidation 
authority authorized by this Act. In carrying out such study, the 
Council shall--
            (1) not be prejudicial to current or past laws or 
        regulations with respect to secured creditor treatment in a 
        resolution process;
            (2) study the similarities and differences between the 
        resolution mechanisms authorized by the Bankruptcy Code, the 
        Federal Deposit Insurance Corporation Improvement Act of 1991, 
        and the orderly liquidation authority authorized by this Act;
            (3) determine how various secured creditors are treated in 
        such resolution mechanisms and examine how a haircut (of various 
        degrees) on secured creditors could improve market discipline 
        and protect taxpayers;
            (4) compare the benefits and dynamics of prudent lending 
        practices by depository institutions in secured loans for 
        consumers and small businesses to the lending practices of 
        secured creditors to large, interconnected financial firms;
            (5) consider whether credit differs according to different 
        types of collateral and different terms and timing of the 
        extension of credit; amd
            (6) include an examination of stakeholders who were 
        unsecured or under-collateralized and seek collateral when a 
        firm is failing, and the impact that such behavior has on 
        financial stability and an orderly resolution that protects 
        taxpayers if the firm fails.

    (b) Report.--Not later than the end of the 1-year period beginning 
on the date of enactment of this Act, the Council shall issue a report 
to the Congress containing all findings and conclusions

[[Page 124 STAT. 1519]]

made by the Council in carrying out the study required under subsection 
(a).
SEC. 216. STUDY ON BANKRUPTCY PROCESS FOR FINANCIAL AND NONBANK 
                        FINANCIAL INSTITUTIONS.

    (a) Study.--
            (1) In general.--Upon enactment of this Act, the Board of 
        Governors, in consultation with the Administrative Office of the 
        United States Courts, shall conduct a study regarding the 
        resolution of financial companies under the Bankruptcy Code, 
        under chapter 7 or 11 thereof .
            (2) Issues to be studied.--Issues to be studied under this 
        section include--
                    (A) the effectiveness of chapter 7 and chapter 11 of 
                the Bankruptcy Code in facilitating the orderly 
                resolution or reorganization of systemic financial 
                companies;
                    (B) whether a special financial resolution court or 
                panel of special masters or judges should be established 
                to oversee cases involving financial companies to 
                provide for the resolution of such companies under the 
                Bankruptcy Code, in a manner that minimizes adverse 
                impacts on financial markets without creating moral 
                hazard;
                    (C) whether amendments to the Bankruptcy Code should 
                be adopted to enhance the ability of the Code to resolve 
                financial companies in a manner that minimizes adverse 
                impacts on financial markets without creating moral 
                hazard;
                    (D) whether amendments should be made to the 
                Bankruptcy Code, the Federal Deposit Insurance Act, and 
                other insolvency laws to address the manner in which 
                qualified financial contracts of financial companies are 
                treated; and
                    (E) the implications, challenges, and benefits to 
                creating a new chapter or subchapter of the Bankruptcy 
                Code to deal with financial companies.

    (b) Reports to Congress.--Not later than 1 year after the date of 
enactment of this Act, and in each successive year until the fifth year 
after the date of enactment of this Act, the Administrative Office of 
the United States courts shall submit to the Committees on Banking, 
Housing, and Urban Affairs and the Judiciary of the Senate and the 
Committees on Financial Services and the Judiciary of the House of 
Representatives a report summarizing the results of the study conducted 
under subsection (a).
SEC. 217. STUDY ON INTERNATIONAL COORDINATION RELATING TO 
                        BANKRUPTCY PROCESS FOR NONBANK FINANCIAL 
                        INSTITUTIONS.

    (a) Study.--
            (1) In general.--The Board of Governors, in consultation 
        with the Administrative Office of the United States Courts, 
        shall conduct a study regarding international coordination 
        relating to the resolution of systemic financial companies under 
        the United States Bankruptcy Code and applicable foreign law.
            (2) Issues to be studied.--With respect to the bankruptcy 
        process for financial companies, issues to be studied under this 
        section include--
                    (A) the extent to which international coordination 
                currently exists;

[[Page 124 STAT. 1520]]

                    (B) current mechanisms and structures for 
                facilitating international cooperation;
                    (C) barriers to effective international 
                coordination; and
                    (D) ways to increase and make more effective 
                international coordination of the resolution of 
                financial companies, so as to minimize the impact on the 
                financial system without creating moral hazard.

    (b) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Administrative office of the United States 
Courts shall submit to the Committees on Banking, Housing, and Urban 
Affairs and the Judiciary of the Senate and the Committees on Financial 
Services and the Judiciary of the House of Representatives a report 
summarizing the results of the study conducted under subsection (a).

 TITLE III--TRANSFER <<NOTE: Enhancing Financial Institution Safety and 
 Soundness Act of 2010.>> OF POWERS TO THE COMPTROLLER OF THE CURRENCY, 
THE CORPORATION, AND THE BOARD OF GOVERNORS
SEC. 300. <<NOTE: 12 USC 5301 note.>> SHORT TITLE.

    This title may be cited as the ``Enhancing Financial Institution 
Safety and Soundness Act of 2010''.
SEC. 301. <<NOTE: 12 USC 5401.>> PURPOSES.

    The purposes of this title are--
            (1) to provide for the safe and sound operation of the 
        banking system of the United States;
            (2) to preserve and protect the dual system of Federal and 
        State-chartered depository institutions;
            (3) to ensure the fair and appropriate supervision of each 
        depository institution, regardless of the size or type of 
        charter of the depository institution; and
            (4) to streamline and rationalize the supervision of 
        depository institutions and the holding companies of depository 
        institutions.
SEC. 302. <<NOTE: 12 USC 5402.>> DEFINITION.

    In this title, the term ``transferred employee'' means, as the 
context requires, an employee transferred to the Office of the 
Comptroller of the Currency or the Corporation under section 322.

                Subtitle A--Transfer of Powers and Duties

SEC. 311. <<NOTE: 12 USC 5411.>> TRANSFER DATE.

    (a) Transfer Date.--Except <<NOTE: Definition.>> as provided in 
subsection (b), the term ``transfer date'' means the date that is 1 year 
after the date of enactment of this Act.

    (b) Extension Permitted.--
            (1) Notice required.--The <<NOTE: Deadline.>> Secretary, in 
        consultation with the Comptroller of the Currency, the Director 
        of the Office of Thrift Supervision, the Chairman of the Board 
        of Governors, and the Chairperson of the Corporation, may extend 
        the period under subsection (a) and designate a transfer date 
        that is

[[Page 124 STAT. 1521]]

        not later than 18 months after the date of enactment of this 
        Act, if the Secretary transmits to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives--
                    (A) a written determination that commencement of the 
                orderly process to implement this title is not feasible 
                by the date that is 1 year after the date of enactment 
                of this Act;
                    (B) an explanation of why an extension is necessary 
                to commence the process of orderly implementation of 
                this title;
                    (C) the transfer date designated under this 
                subsection; and
                    (D) a description of the steps that will be taken to 
                initiate the process of an orderly and timely 
                implementation of this title within the extended time 
                period.
            (2) Publication of notice.--Not <<NOTE: Deadline. Federal 
        Register, publication.>> later than 270 days after the date of 
        enactment of this Act, the Secretary shall publish in the 
        Federal Register notice of any transfer date designated under 
        paragraph (1).
SEC. 312. <<NOTE: 12 USC 5412.>> POWERS AND DUTIES TRANSFERRED.

    (a) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the transfer date.
    (b) Functions of the Office of Thrift Supervision.--
            (1) Savings and loan holding company functions 
        transferred.--
                    (A) Transfer of functions.--There are transferred to 
                the Board of Governors all functions of the Office of 
                Thrift Supervision and the Director of the Office of 
                Thrift Supervision (including the authority to issue 
                orders) relating to--
                          (i) the supervision of--
                                    (I) any savings and loan holding 
                                company; and
                                    (II) any subsidiary (other than a 
                                depository institution) of a savings and 
                                loan holding company; and
                          (ii) all rulemaking authority of the Office of 
                      Thrift Supervision and the Director of the Office 
                      of Thrift Supervision relating to savings and loan 
                      holding companies.
                    (B) Powers, authorities, rights, and duties.--The 
                Board of Governors shall succeed to all powers, 
                authorities, rights, and duties that were vested in the 
                Office of Thrift Supervision and the Director of the 
                Office of Thrift Supervision on the day before the 
                transfer date relating to the functions and authority 
                transferred under subparagraph (A).
            (2) All other functions transferred.--
                    (A) Board of governors.--All rulemaking authority of 
                the Office of Thrift Supervision and the Director of the 
                Office of Thrift Supervision under section 11 of the 
                Home Owners' Loan Act (12 U.S.C. 1468) relating to 
                transactions with affiliates and extensions of credit to 
                executive officers, directors, and principal 
                shareholders and under section 5(q) of such Act relating 
                to tying arrangements is transferred to the Board of 
                Governors.

[[Page 124 STAT. 1522]]

                    (B) Comptroller of the currency.--Except as provided 
                in paragraph (1) and subparagraph (A)--
                          (i) there are transferred to the Office of the 
                      Comptroller of the Currency and the Comptroller of 
                      the Currency--
                                    (I) all functions of the Office of 
                                Thrift Supervision and the Director of 
                                the Office of Thrift Supervision, 
                                respectively, relating to Federal 
                                savings associations; and
                                    (II) all rulemaking authority of the 
                                Office of Thrift Supervision and the 
                                Director of the Office of Thrift 
                                Supervision, respectively, relating to 
                                savings associations; and
                          (ii) the Office of the Comptroller of the 
                      Currency and the Comptroller of the Currency shall 
                      succeed to all powers, authorities, rights, and 
                      duties that were vested in the Office of Thrift 
                      Supervision and the Director of the Office of 
                      Thrift Supervision, respectively, on the day 
                      before the transfer date relating to the functions 
                      and authority transferred under clause (i).
                    (C) Corporation.--Except as provided in paragraph 
                (1) and subparagraphs (A) and (B)--
                          (i) all functions of the Office of Thrift 
                      Supervision and the Director of the Office of 
                      Thrift Supervision relating to State savings 
                      associations are transferred to the Corporation; 
                      and
                          (ii) the Corporation shall succeed to all 
                      powers, authorities, rights, and duties that were 
                      vested in the Office of Thrift Supervision and the 
                      Director of the Office of Thrift Supervision on 
                      the day before the transfer date relating to the 
                      functions transferred under clause (i).

    (c) Conforming Amendments.--Section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) is amended--
            (1) in subsection (q), by striking paragraphs (1) through 
        (4) and inserting the following:
            ``(1) the Office of the Comptroller of the Currency, in the 
        case of--
                    ``(A) any national banking association;
                    ``(B) any Federal branch or agency of a foreign 
                bank; and
                    ``(C) any Federal savings association;
            ``(2) the Federal Deposit Insurance Corporation, in the case 
        of--
                    ``(A) any State nonmember insured bank;
                    ``(B) any foreign bank having an insured branch; and
                    ``(C) any State savings association;
            ``(3) the Board of Governors of the Federal Reserve System, 
        in the case of--
                    ``(A) any State member bank;
                    ``(B) any branch or agency of a foreign bank with 
                respect to any provision of the Federal Reserve Act 
                which is made applicable under the International Banking 
                Act of 1978;
                    ``(C) any foreign bank which does not operate an 
                insured branch;

[[Page 124 STAT. 1523]]

                    ``(D) any agency or commercial lending company other 
                than a Federal agency;
                    ``(E) supervisory or regulatory proceedings arising 
                from the authority given to the Board of Governors under 
                section 7(c)(1) of the International Banking Act of 
                1978, including such proceedings under the Financial 
                Institutions Supervisory Act of 1966;
                    ``(F) any bank holding company and any subsidiary 
                (other than a depository institution) of a bank holding 
                company; and
                    ``(G) any savings and loan holding company and any 
                subsidiary (other than a depository institution) of a 
                savings and loan holding company.''; and
            (2) in paragraphs (1) and (3) of subsection (u), by striking 
        ``(other than a bank holding company'' and inserting ``(other 
        than a bank holding company or savings and loan holding 
        company''.

    (d) Consumer Protection.--Nothing in this section may be construed 
to limit or otherwise affect the transfer of powers under title X.
SEC. 313. <<NOTE: 12 USC 5413.>> ABOLISHMENT.

    Effective <<NOTE: Effective date.>> 90 days after the transfer date, 
the Office of Thrift Supervision and the position of Director of the 
Office of Thrift Supervision are abolished.
SEC. 314. AMENDMENTS TO THE REVISED STATUTES.

    (a) Amendment to Section 324.--Section 324 of the Revised Statutes 
of the United States (12 U.S.C. 1) is amended to read as follows:
``SEC. 324. COMPTROLLER OF THE CURRENCY.

    ``(a) Office of the Comptroller of the Currency Established.--There 
is established in the Department of the Treasury a bureau to be known as 
the `Office of the Comptroller of the Currency' which is charged with 
assuring the safety and soundness of, and compliance with laws and 
regulations, fair access to financial services, and fair treatment of 
customers by, the institutions and other persons subject to its 
jurisdiction.
    ``(b) Comptroller of the Currency.--
            ``(1) In general.--The chief officer of the Office of the 
        Comptroller of the Currency shall be known as the Comptroller of 
        the Currency. The Comptroller of the Currency shall perform the 
        duties of the Comptroller of the Currency under the general 
        direction of the Secretary of the Treasury. The Secretary of the 
        Treasury may not delay or prevent the issuance of any rule or 
        the promulgation of any regulation by the Comptroller of the 
        Currency, and may not intervene in any matter or proceeding 
        before the Comptroller of the Currency (including agency 
        enforcement actions), unless otherwise specifically provided by 
        law.
            ``(2) Additional authority.--The Comptroller of the Currency 
        shall have the same authority with respect to functions 
        transferred to the Comptroller of the Currency under the 
        Enhancing Financial Institution Safety and Soundness Act of 2010 
        as was vested in the Director of the Office of Thrift 
        Supervision on the transfer date, as defined in section 311 of 
        that Act.''.

[[Page 124 STAT. 1524]]

    (b) Supervision of Federal Savings Associations.--Chapter 9 of title 
VII of the Revised Statutes of the United States (12 U.S.C. 1 et seq.) 
is amended by inserting after section 327A (12 U.S.C. 4a) the following:
``SEC. 327B. <<NOTE: 12 USC 4b.>> DEPUTY COMPTROLLER FOR THE 
                          SUPERVISION AND EXAMINATION OF FEDERAL 
                          SAVINGS ASSOCIATIONS.

    ``The <<NOTE: Designation.>> Comptroller of the Currency shall 
designate a Deputy Comptroller, who shall be responsible for the 
supervision and examination of Federal savings associations.''.

    (c) Amendment to Section 329.--Section 329 of the Revised Statutes 
of the United States (12 U.S.C. 11) is amended by inserting before the 
period at the end the following: ``or any Federal savings association''.
    (d) Effective <<NOTE: 12 USC 1 note.>> Date.--This section, and the 
amendments made by this section, shall take effect on the transfer date.
SEC. 315. FEDERAL INFORMATION POLICY.

    Section 3502(5) of title 44, United States Code, is amended by 
inserting ``Office of the Comptroller of the Currency,'' after ``the 
Securities and Exchange Commission,''.
SEC. 316. <<NOTE: 12 USC 5414.>> SAVINGS PROVISIONS.

    (a) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not affected.--
        Sections 312(b) and 313 shall not affect the validity of any 
        right, duty, or obligation of the United States, the Director of 
        the Office of Thrift Supervision, the Office of Thrift 
        Supervision, or any other person, that existed on the day before 
        the transfer date.
            (2) Continuation of suits.--This title shall not abate any 
        action or proceeding commenced by or against the Director of the 
        Office of Thrift Supervision or the Office of Thrift Supervision 
        before the transfer date, except that--
                    (A) for any action or proceeding arising out of a 
                function of the Office of Thrift Supervision or the 
                Director of the Office of Thrift Supervision transferred 
                to the Board of Governors by this title, the Board of 
                Governors shall be substituted for the Office of Thrift 
                Supervision or the Director of the Office of Thrift 
                Supervision as a party to the action or proceeding on 
                and after the transfer date;
                    (B) for any action or proceeding arising out of a 
                function of the Office of Thrift Supervision or the 
                Director of the Office of Thrift Supervision transferred 
                to the Office of the Comptroller of the Currency or the 
                Comptroller of the Currency by this title, the Office of 
                the Comptroller of the Currency or the Comptroller of 
                the Currency shall be substituted for the Office of 
                Thrift Supervision or the Director of the Office of 
                Thrift Supervision, as the case may be, as a party to 
                the action or proceeding on and after the transfer date; 
                and
                    (C) for any action or proceeding arising out of a 
                function of the Office of Thrift Supervision or the 
                Director of the Office of Thrift Supervision transferred 
                to the Corporation by this title, the Corporation shall 
                be substituted for the Office of Thrift Supervision or 
                the Director of the Office of Thrift Supervision as a 
                party to the action or proceeding on and after the 
                transfer date.

[[Page 124 STAT. 1525]]

    (b) Continuation of Existing OTS Orders, Resolutions, 
Determinations, Agreements, Regulations, etc.--All orders, resolutions, 
determinations, agreements, and regulations, interpretative rules, other 
interpretations, guidelines, procedures, and other advisory materials, 
that have been issued, made, prescribed, or allowed to become effective 
by the Office of Thrift Supervision or the Director of the Office of 
Thrift Supervision, or by a court of competent jurisdiction, in the 
performance of functions that are transferred by this title and that are 
in effect on the day before the transfer date, shall continue in effect 
according to the terms of such orders, resolutions, determinations, 
agreements, and regulations, interpretative rules, other 
interpretations, guidelines, procedures, and other advisory materials, 
and shall be enforceable by or against--
            (1) the Board of Governors, in the case of a function of the 
        Office of Thrift Supervision or the Director of the Office of 
        Thrift Supervision transferred to the Board of Governors, until 
        modified, terminated, set aside, or superseded in accordance 
        with applicable law by the Board of Governors, by any court of 
        competent jurisdiction, or by operation of law;
            (2) the Office of the Comptroller of the Currency or the 
        Comptroller of the Currency, in the case of a function of the 
        Office of Thrift Supervision or the Director of the Office of 
        Thrift Supervision transferred to the Office of the Comptroller 
        of the Currency or the Comptroller of the Currency, 
        respectively, until modified, terminated, set aside, or 
        superseded in accordance with applicable law by the Office of 
        the Comptroller of the Currency or the Comptroller of the 
        Currency, by any court of competent jurisdiction, or by 
        operation of law; and
            (3) the Corporation, in the case of a function of the Office 
        of Thrift Supervision or the Director of the Office of Thrift 
        Supervision transferred to the Corporation, until modified, 
        terminated, set aside, or superseded in accordance with 
        applicable law by the Corporation, by any court of competent 
        jurisdiction, or by operation of law.

    (c) Identification <<NOTE: Deadlines. Federal Register, 
publication.>> of Regulations Continued.--
            (1) By the board of governors.--Not later than the transfer 
        date, the Board of Governors shall--
                    (A) identify the regulations continued under 
                subsection (b) that will be enforced by the Board of 
                Governors; and
                    (B) publish a list of the regulations identified 
                under subparagraph (A) in the Federal Register.
            (2) By office of the comptroller of the currency.--Not later 
        than the transfer date, the Office of the Comptroller of the 
        Currency shall--
                    (A) after consultation with the Corporation, 
                identify the regulations continued under subsection (b) 
                that will be enforced by the Office of the Comptroller 
                of the Currency; and
                    (B) publish a list of the regulations identified 
                under subparagraph (A) in the Federal Register.
            (3) By the corporation.--Not later than the transfer date, 
        the Corporation shall--
                    (A) after consultation with the Office of the 
                Comptroller of the Currency, identify the regulations 
                continued under subsection (b) that will be enforced by 
                the Corporation; and

[[Page 124 STAT. 1526]]

                    (B) publish a list of the regulations identified 
                under subparagraph (A) in the Federal Register.

    (d) Status of Regulations Proposed or Not Yet Effective.--
            (1) Proposed regulations.--Any proposed regulation of the 
        Office of Thrift Supervision, which the Office of Thrift 
        Supervision in performing functions transferred by this title, 
        has proposed before the transfer date but has not published as a 
        final regulation before such date, shall be deemed to be a 
        proposed regulation of the Office of the Comptroller of the 
        Currency or the Board of Governors, as appropriate, according to 
        the terms of the proposed regulation.
            (2) Regulations not yet effective.--Any interim or final 
        regulation of the Office of Thrift Supervision, which the Office 
        of Thrift Supervision, in performing functions transferred by 
        this title, has published before the transfer date but which has 
        not become effective before that date, shall become effective as 
        a regulation of the Office of the Comptroller of the Currency or 
        the Board of Governors, as appropriate, according to the terms 
        of the interim or final regulation, unless modified, terminated, 
        set aside, or superseded in accordance with applicable law by 
        the Office of the Comptroller of the Currency or the Board of 
        Governors, as appropriate, by any court of competent 
        jurisdiction, or by operation of law.
SEC. 317. <<NOTE: 12 USC 5415.>> REFERENCES IN FEDERAL LAW TO 
                        FEDERAL BANKING AGENCIES.

    On and after the transfer date, any reference in Federal law to the 
Director of the Office of Thrift Supervision or the Office of Thrift 
Supervision, in connection with any function of the Director of the 
Office of Thrift Supervision or the Office of Thrift Supervision 
transferred under section 312(b) or any other provision of this 
subtitle, shall be deemed to be a reference to the Comptroller of the 
Currency, the Office of the Comptroller of the Currency, the Chairperson 
of the Corporation, the Corporation, the Chairman of the Board of 
Governors, or the Board of Governors, as appropriate and consistent with 
the amendments made in subtitle E.
SEC. 318. FUNDING.

    (a) Compensation of Examiners.--Section 5240 of the Revised Statutes 
of the United States (12 U.S.C. 481 et seq.) is amended--
            (1) in the second undesignated paragraph (12 U.S.C. 481), in 
        the fourth sentence, by striking ``without regard to the 
        provisions of other laws applicable to officers or employees of 
        the United States'' and inserting the following: ``set and 
        adjusted subject to chapter 71 of title 5, United States Code, 
        and without regard to the provisions of other laws applicable to 
        officers or employees of the United States''; and
            (2) in the third undesignated paragraph (12 U.S.C. 482), in 
        the first sentence, by striking ``shall fix'' and inserting 
        ``shall, subject to chapter 71 of title 5, United States Code, 
        fix''.

    (b) Funding of Office of the Comptroller of the Currency.--Chapter 4 
of title LXII of the Revised Statutes is amended by inserting after 
section 5240 (12 U.S.C. 481, 482) the following:
    ``Sec. <<NOTE: 12 USC 16.>> 5240A.  The Comptroller of the Currency 
may collect an assessment, fee, or other charge from any entity 
described in section 3(q)(1) of the Federal Deposit Insurance Act (12 
U.S.C.

[[Page 124 STAT. 1527]]

1813(q)(1)), as the Comptroller determines is necessary or appropriate 
to carry out the responsibilities of the Office of the Comptroller of 
the Currency. In establishing the amount of an assessment, fee, or 
charge collected from an entity under this section, the Comptroller of 
the Currency may take into account the nature and scope of the 
activities of the entity, the amount and type of assets that the entity 
holds, the financial and managerial condition of the entity, and any 
other factor, as the Comptroller of the Currency determines is 
appropriate. Funds derived from any assessment, fee, or charge collected 
or payment made pursuant to this section may be deposited by the 
Comptroller of the Currency in accordance with the provisions of section 
5234. Such funds shall not be construed to be Government funds or 
appropriated monies, and shall not be subject to apportionment for 
purposes of chapter 15 of title 31, United States Code, or any other 
provision of law. The authority of the Comptroller of the Currency under 
this section shall be in addition to the authority under section 5240.

    ``The Comptroller of the Currency shall have sole authority to 
determine the manner in which the obligations of the Office of the 
Comptroller of the Currency shall be incurred and its disbursements and 
expenses allowed and paid, in accordance with this section, except as 
provided in chapter 71 of title 5, United States Code (with respect to 
compensation).''.
    (c) Funding of Board of Governors.--Section 11 of the Federal 
Reserve Act (12 U.S.C. 248) is amended by adding at the end the 
following:
    ``(s) Assessments, Fees, and Other Charges for Certain Companies.--
            ``(1) In general.--The Board shall collect a total amount of 
        assessments, fees, or other charges from the companies described 
        in paragraph (2) that is equal to the total expenses the Board 
        estimates are necessary or appropriate to carry out the 
        supervisory and regulatory responsibilities of the Board with 
        respect to such companies.
            ``(2) Companies.--The companies described in this paragraph 
        are--
                    ``(A) all bank holding companies having total 
                consolidated assets of $50,000,000,000 or more;
                    ``(B) all savings and loan holding companies having 
                total consolidated assets of $50,000,000,000 or more; 
                and
                    ``(C) all nonbank financial companies supervised by 
                the Board under section 113 of the Dodd-Frank Wall 
                Street Reform and Consumer Protection Act.''.

    (d) Corporation Examination Fees.--Section 10(e) of the Federal 
Deposit Insurance Act (12 U.S.C. 1820(e)) is amended by striking 
paragraph (1) and inserting the following:
            ``(1) Regular and special examinations of depository 
        institutions.--The cost of conducting any regular examination or 
        special examination of any depository institution under 
        subsection (b)(2), (b)(3), or (d) or of any entity described in 
        section 3(q)(2) may be assessed by the Corporation against the 
        institution or entity to meet the expenses of the Corporation in 
        carrying out such examinations.''.

    (e) Effective <<NOTE: 12 USC 16 note.>> Date.--This section, and the 
amendments made by this section, shall take effect on the transfer date.

[[Page 124 STAT. 1528]]

SEC. 319. <<NOTE: 12 USC 5416.>> CONTRACTING AND LEASING 
                        AUTHORITY.

    Notwithstanding the Federal Property and Administrative Services Act 
of 1949 (41 U.S.C. 251 et seq.) or any other provision of law (except 
the full and open competition requirements of the Competition in 
Contracting Act), the Office of the Comptroller of the Currency may--
            (1) enter into and perform contracts, execute instruments, 
        and acquire real property (or property interest) as the 
        Comptroller deems necessary to carry out the duties and 
        responsibilities of the Office of the Comptroller of the 
        Currency; and
            (2) hold, maintain, sell, lease, or otherwise dispose of the 
        property (or property interest) acquired under paragraph (1).

                   Subtitle B--Transitional Provisions

SEC. 321. <<NOTE: 12 USC 5431.>> INTERIM USE OF FUNDS, PERSONNEL, 
                        AND PROPERTY OF THE OFFICE OF THRIFT 
                        SUPERVISION.

    (a) In General.--Before the transfer date, the Office of the 
Comptroller of the Currency, the Corporation, and the Board of Governors 
shall--
            (1) consult <<NOTE: Consultation.>> and cooperate with the 
        Office of Thrift Supervision to facilitate the orderly transfer 
        of functions to the Office of the Comptroller of the Currency, 
        the Corporation, and the Board of Governors in accordance with 
        this title;
            (2) <<NOTE: Determination.>> determine jointly, from time to 
        time--
                    (A) the amount of funds necessary to pay any 
                expenses associated with the transfer of functions 
                (including expenses for personnel, property, and 
                administrative services) during the period beginning on 
                the date of enactment of this Act and ending on the 
                transfer date;
                    (B) which personnel are appropriate to facilitate 
                the orderly transfer of functions by this title; and
                    (C) what property and administrative services are 
                necessary to support the Office of the Comptroller of 
                the Currency, the Corporation, and the Board of 
                Governors during the period beginning on the date of 
                enactment of this Act and ending on the transfer date; 
                and
            (3) take such actions as may be necessary to provide for the 
        orderly implementation of this title.

    (b) Agency Consultation.--When requested jointly by the Office of 
the Comptroller of the Currency, the Corporation, and the Board of 
Governors to do so before the transfer date, the Office of Thrift 
Supervision shall--
            (1) pay <<NOTE: Payment.>> to the Office of the Comptroller 
        of the Currency, the Corporation, or the Board of Governors, as 
        applicable, from funds obtained by the Office of Thrift 
        Supervision through assessments, fees, or other charges that the 
        Office of Thrift Supervision is authorized by law to impose, 
        such amounts as the Office of the Comptroller of the Currency, 
        the Corporation, and the Board of Governors jointly determine to 
        be necessary under subsection (a);
            (2) detail to the Office of the Comptroller of the Currency, 
        the Corporation, or the Board of Governors, as applicable, such 
        personnel as the Office of the Comptroller of the Currency, the 
        Corporation, and the Board of Governors jointly determine to be 
        appropriate under subsection (a); and

[[Page 124 STAT. 1529]]

            (3) make available to the Office of the Comptroller of the 
        Currency, the Corporation, or the Board of Governors, as 
        applicable, such property and provide to the Office of the 
        Comptroller of the Currency, the Corporation, or the Board of 
        Governors, as applicable, such administrative services as the 
        Office of the Comptroller of the Currency, the Corporation, and 
        the Board of Governors jointly determine to be necessary under 
        subsection (a).

    (c) Notice Required.--The Office of the Comptroller of the Currency, 
the Corporation, and the Board of Governors shall jointly give the 
Office of Thrift Supervision reasonable prior notice of any request that 
the Office of the Comptroller of the Currency, the Corporation, and the 
Board of Governors jointly intend to make under subsection (b).
SEC. 322. <<NOTE: 12 USC 5432.>> TRANSFER OF EMPLOYEES.

    (a) In General.--
            (1) Office of thrift supervision employees.--
                    (A) In general.--Except as provided in section 1064, 
                all employees of the Office of Thrift Supervision shall 
                be transferred to the Office of the Comptroller of the 
                Currency or the Corporation for employment in accordance 
                with this section.
                    (B) Allocating employees for transfer to receiving 
                agencies.--The Director of the Office of Thrift 
                Supervision, the Comptroller of the Currency, and the 
                Chairperson of the Corporation shall--
                          (i) jointly <<NOTE: Determination.>> determine 
                      the number of employees of the Office of Thrift 
                      Supervision necessary to perform or support the 
                      functions that are transferred to the Office of 
                      the Comptroller of the Currency or the Corporation 
                      by this title; and
                          (ii) consistent with the determination under 
                      clause (i), jointly identify employees of the 
                      Office of Thrift Supervision for transfer to the 
                      Office of the Comptroller of the Currency or the 
                      Corporation.
            (2) Employees transferred; service periods credited.--For 
        purposes of this section, periods of service with a Federal home 
        loan bank, a joint office of Federal home loan banks, or a 
        Federal reserve bank shall be credited as periods of service 
        with a Federal agency.
            (3) Appointment authority for excepted service 
        transferred.--
                    (A) In general.--Except as provided in subparagraph 
                (B), any appointment authority of the Office of Thrift 
                Supervision under Federal law that relates to the 
                functions transferred under section 312, including the 
                regulations of the Office of Personnel Management, for 
                filling the positions of employees in the excepted 
                service shall be transferred to the Comptroller of the 
                Currency or the Chairperson of the Corporation, as 
                appropriate.
                    (B) Declining transfers allowed.--The Comptroller of 
                the Currency or the Chairperson of the Corporation may 
                decline to accept a transfer of authority under 
                subparagraph (A) (and the employees appointed under that 
                authority) to the extent that such authority relates to 
                positions excepted from the competitive service because 
                of their

[[Page 124 STAT. 1530]]

                confidential, policy-making, policy-determining, or 
                policy-advocating character.
            (4) Additional appointment authority.--Notwithstanding any 
        other provision of law, the Office of the Comptroller of the 
        Currency and the Corporation may appoint transferred employees 
        to positions in the Office of the Comptroller of the Currency or 
        the Corporation, respectively.

    (b) Timing of Transfers and <<NOTE: Deadlines.>> Position 
Assignments.--Each employee to be transferred under subsection (a)(1) 
shall--
            (1) be transferred not later than 90 days after the transfer 
        date; and
            (2) receive <<NOTE: Notice.>> notice of the position 
        assignment of the employee not later than 120 days after the 
        effective date of the transfer of the employee.

    (c) Transfer of Functions.--
            (1) In general.--Notwithstanding any other provision of law, 
        the transfer of employees under this subtitle shall be deemed a 
        transfer of functions for the purpose of section 3503 of title 
        5, United States Code.
            (2) Priority.--If any provision of this subtitle conflicts 
        with any protection provided to a transferred employee under 
        section 3503 of title 5, United States Code, the provisions of 
        this subtitle shall control.

    (d) Employee Status and Eligibility.--The transfer of functions and 
employees under this subtitle, and the abolishment of the Office of 
Thrift Supervision under section 313, shall not affect the status of the 
transferred employees as employees of an agency of the United States 
under any provision of law.
    (e) Equal Status and Tenure Positions.--
            (1) Status and tenure.--Each transferred employee from the 
        Office of Thrift Supervision shall be placed in a position at 
        the Office of the Comptroller of the Currency or the Corporation 
        with the same status and tenure as the transferred employee held 
        on the day before the date on which the employee was 
        transferred.
            (2) Functions.--To the extent practicable, each transferred 
        employee shall be placed in a position at the Office of the 
        Comptroller of the Currency or the Corporation, as applicable, 
        responsible for the same functions and duties as the transferred 
        employee had on the day before the date on which the employee 
        was transferred, in accordance with the expertise and 
        preferences of the transferred employee.

    (f) No Additional Certification Requirements.--An examiner who is a 
transferred employee shall not be subject to any additional 
certification requirements before being placed in a comparable position 
at the Office of the Comptroller of the Currency or the Corporation, if 
the examiner carries out examinations of the same type of institutions 
as an employee of the Office of the Comptroller of the Currency or the 
Corporation as the employee was responsible for carrying out before the 
date on which the employee was transferred.
    (g) Personnel Actions Limited.--
            (1) Protection.--
                    (A) In general.--Except <<NOTE: Time period.>> as 
                provided in paragraph (2), each affected employee shall 
                not, during the 30-month period beginning on the 
                transfer date, be involuntarily

[[Page 124 STAT. 1531]]

                separated, or involuntarily reassigned outside his or 
                her locality pay area.
                    (B) Affected employees.--
                For <<NOTE: Definition.>> purposes of this paragraph, 
                the term ``affected employee'' means--
                          (i) an employee transferred from the Office of 
                      Thrift Supervision holding a permanent position on 
                      the day before the transfer date; and
                          (ii) an employee of the Office of the 
                      Comptroller of the Currency or the Corporation 
                      holding a permanent position on the day before the 
                      transfer date.
            (2) Exceptions.--Paragraph (1) does not limit the right of 
        the Office of the Comptroller of the Currency or the Corporation 
        to--
                    (A) separate an employee for cause or for 
                unacceptable performance;
                    (B) terminate an appointment to a position excepted 
                from the competitive service because of its confidential 
                policy-making, policy-determining, or policy-advocating 
                character; or
                    (C) reassign an employee outside such employee's 
                locality pay area when the Office of the Comptroller of 
                the Currency or the Corporation determines that the 
                reassignment is necessary for the efficient operation of 
                the agency.

    (h) Pay.--
            (1) 30-month protection.--Except as provided in paragraph 
        (2), during the 30-month period beginning on the date on which 
        the employee was transferred under this subtitle, a transferred 
        employee shall be paid at a rate that is not less than the basic 
        rate of pay, including any geographic differential, that the 
        transferred employee received during the pay period immediately 
        preceding the date on which the employee was transferred. 
        Notwithstanding the preceding sentence, if the employee was 
        receiving a higher rate of basic pay on a temporary basis 
        (because of a temporary assignment, temporary promotion, or 
        other temporary action) immediately before the transfer, the 
        Agency may reduce the rate of basic pay on the date the rate 
        would have been reduced but for the transfer, and the protected 
        rate for the remainder of the 30-month period will be the 
        reduced rate that would have applied but for the transfer.
            (2) Exceptions.--The Comptroller of the Currency or the 
        Corporation may reduce the rate of basic pay of a transferred 
        employee--
                    (A) for cause, including for unacceptable 
                performance; or
                    (B) with the consent of the transferred employee.
            (3) Protection only while employed.--
        This <<NOTE: Applicability.>> subsection shall apply to a 
        transferred employee only during the period that the transferred 
        employee remains employed by Office of the Comptroller of the 
        Currency or the Corporation.
            (4) Pay increases permitted.--Nothing in this subsection 
        shall limit the authority of the Comptroller of the Currency or 
        the Chairperson of the Corporation to increase the pay of a 
        transferred employee.

    (i) Benefits.--
            (1) Retirement benefits for transferred employees.--

[[Page 124 STAT. 1532]]

                    (A) In general.--
                          (i) Continuation of existing retirement 
                      plan.--Each transferred employee shall remain 
                      enrolled in the retirement plan of the transferred 
                      employee, for as long as the transferred employee 
                      is employed by the Office of the Comptroller of 
                      the Currency or the Corporation.
                          (ii) Employer's contribution.--The Comptroller 
                      of the Currency or the Chairperson of the 
                      Corporation, as appropriate, shall pay any 
                      employer contributions to the existing retirement 
                      plan of each transferred employee, as required 
                      under each such existing retirement plan.
                    (B) Definition.--In this paragraph, the term 
                ``existing retirement plan'' means, with respect to a 
                transferred employee, the retirement plan (including the 
                Financial Institutions Retirement Fund), and any 
                associated thrift savings plan, of the agency from which 
                the employee was transferred in which the employee was 
                enrolled on the day before the date on which the 
                employee was transferred.
            (2) Benefits other than retirement benefits.--
                    (A) During first year.--
                          (i) Existing <<NOTE: Time period.>> plans 
                      continue.--During the 1-year period following the 
                      transfer date, each transferred employee may 
                      retain membership in any employee benefit program 
                      (other than a retirement benefit program) of the 
                      agency from which the employee was transferred 
                      under this title, including any dental, vision, 
                      long term care, or life insurance program to which 
                      the employee belonged on the day before the 
                      transfer date.
                          (ii) Employer's contribution.--The Office of 
                      the Comptroller of the Currency or the 
                      Corporation, as appropriate, shall pay any 
                      employer cost required to extend coverage in the 
                      benefit program to the transferred employee as 
                      required under that program or negotiated 
                      agreements.
                    (B) Dental, vision, or life insurance after first 
                year.--If, <<NOTE: Time period.>> after the 1-year 
                period beginning on the transfer date, the Office of the 
                Comptroller of the Currency or the Corporation 
                determines that the Office of the Comptroller of the 
                Currency or the Corporation, as the case may be, will 
                not continue to participate in any dental, vision, or 
                life insurance program of an agency from which an 
                employee was transferred, a transferred employee who is 
                a member of the program may, before the decision takes 
                effect and without regard to any regularly scheduled 
                open season, elect to enroll in--
                          (i) the enhanced dental benefits program 
                      established under chapter 89A of title 5, United 
                      States Code;
                          (ii) the enhanced vision benefits established 
                      under chapter 89B of title 5, United States Code; 
                      and
                          (iii) the Federal Employees' Group Life 
                      Insurance Program established under chapter 87 of 
                      title 5, United States Code, without regard to any 
                      requirement of insurability.

[[Page 124 STAT. 1533]]

                    (C) Long term care insurance after 1st year.--
                If, <<NOTE: Time period.>> after the 1-year period 
                beginning on the transfer date, the Office of the 
                Comptroller of the Currency or the Corporation 
                determines that the Office of the Comptroller of the 
                Currency or the Corporation, as appropriate, will not 
                continue to participate in any long term care insurance 
                program of an agency from which an employee transferred, 
                a transferred employee who is a member of such a program 
                may, before the decision takes effect, elect to apply 
                for coverage under the Federal Long Term Care Insurance 
                Program established under chapter 90 of title 5, United 
                States Code, under the underwriting requirements 
                applicable to a new active workforce member, as 
                described in part 875 of title 5, Code of Federal 
                Regulations (or any successor thereto).
                    (D) Contribution of transferred employee.--
                          (i) In general.--Subject to clause (ii), a 
                      transferred employee who is enrolled in a plan 
                      under the Federal Employees Health Benefits 
                      Program shall pay any employee contribution 
                      required under the plan.
                          (ii) Cost differential.--The Office of the 
                      Comptroller of the Currency or the Corporation, as 
                      applicable, shall pay any difference in cost 
                      between the employee contribution required under 
                      the plan provided to transferred employees by the 
                      agency from which the employee transferred on the 
                      date of enactment of this Act and the plan 
                      provided by the Office of the Comptroller of the 
                      Currency or the Corporation, as the case may be, 
                      under this section.
                          (iii) Funds transfer.--The Office of the 
                      Comptroller of the Currency or the Corporation, as 
                      the case may be, shall transfer to the Employees 
                      Health Benefits Fund established under section 
                      8909 of title 5, United States Code, an amount 
                      determined by the Director of the Office of 
                      Personnel Management, after consultation with the 
                      Comptroller of the Currency or the Chairperson of 
                      the Corporation, as the case may be, and the 
                      Office of Management and Budget, to be necessary 
                      to reimburse the Fund for the cost to the Fund of 
                      providing any benefits under this subparagraph 
                      that are not otherwise paid for by a transferred 
                      employee under clause (i).
                    (E) Special provisions to ensure continuation of 
                life insurance benefits.--
                          (i) In general.--An annuitant, as defined in 
                      section 8901 of title 5, United States Code, who 
                      is enrolled in a life insurance plan administered 
                      by an agency from which employees are transferred 
                      under this title on the day before the transfer 
                      date shall be eligible for coverage by a life 
                      insurance plan under sections 8706(b), 8714a, 
                      8714b, or 8714c of title 5, United States Code, or 
                      by a life insurance plan established by the Office 
                      of the Comptroller of the Currency or the 
                      Corporation, as applicable, without regard to any 
                      regularly scheduled open season or any requirement 
                      of insurability.
                          (ii) Contribution of transferred employee.--

[[Page 124 STAT. 1534]]

                                    (I) In general.--Subject to 
                                subclause (II), a transferred employee 
                                enrolled in a life insurance plan under 
                                this subparagraph shall pay any employee 
                                contribution required by the plan.
                                    (II) Cost differential.--The Office 
                                of the Comptroller of the Currency or 
                                the Corporation, as the case may be, 
                                shall pay any difference in cost between 
                                the benefits provided by the agency from 
                                which the employee transferred on the 
                                date of enactment of this Act and the 
                                benefits provided under this section.
                                    (III) Funds transfer.--The Office of 
                                the Comptroller of the Currency or the 
                                Corporation, as the case may be, shall 
                                transfer to the Federal Employees' Group 
                                Life Insurance Fund established under 
                                section 8714 of title 5, United States 
                                Code, an amount determined by the 
                                Director of the Office of Personnel 
                                Management, after consultation with the 
                                Comptroller of the Currency or the 
                                Chairperson of the Corporation, as the 
                                case may be, and the Office of 
                                Management and Budget, to be necessary 
                                to reimburse the Federal Employees' 
                                Group Life Insurance Fund for the cost 
                                to the Federal Employees' Group Life 
                                Insurance Fund of providing benefits 
                                under this subparagraph not otherwise 
                                paid for by a transferred employee under 
                                subclause (I).
                                    (IV) Credit for time enrolled in 
                                other plans.--For any transferred 
                                employee, enrollment in a life insurance 
                                plan administered by the agency from 
                                which the employee transferred, 
                                immediately before enrollment in a life 
                                insurance plan under chapter 87 of title 
                                5, United States Code, shall be 
                                considered as enrollment in a life 
                                insurance plan under that chapter for 
                                purposes of section 8706(b)(1)(A) of 
                                title 5, United States Code.

    (j) Incorporation Into Agency Pay System.--
Not <<NOTE: Deadline.>> later than 30 months after the transfer date, 
the Comptroller of the Currency and the Chairperson of the Corporation 
shall place each transferred employee into the established pay system 
and structure of the appropriate employing agency.

    (k) Equitable Treatment.--In administering the provisions of this 
section, the Comptroller of the Currency and the Chairperson of the 
Corporation--
            (1) may not take any action that would unfairly disadvantage 
        a transferred employee relative to any other employee of the 
        Office of the Comptroller of the Currency or the Corporation on 
        the basis of prior employment by the Office of Thrift 
        Supervision;
            (2) may take such action as is appropriate in an individual 
        case to ensure that a transferred employee receives equitable 
        treatment, with respect to the status, tenure, pay, benefits 
        (other than benefits under programs administered by the Office 
        of Personnel Management), and accrued leave or vacation time for 
        prior periods of service with any Federal agency of the 
        transferred employee;

[[Page 124 STAT. 1535]]

            (3) shall, <<NOTE: Procedures.>> jointly with the Director 
        of the Office of Thrift Supervision, develop and adopt 
        procedures and safeguards designed to ensure that the 
        requirements of this subsection are met; and
            (4) shall <<NOTE: Study.>> conduct a study detailing the 
        position assignments of all employees transferred pursuant to 
        subsection (a), describing the procedures and safeguards adopted 
        pursuant to paragraph (3), and demonstrating that the 
        requirements of this subsection have been met; 
        and <<NOTE: Deadline.>> shall, not later than 365 days after the 
        transfer date, submit a copy of such study to Congress.

    (l) Reorganization.--
            (1) In general.--If <<NOTE: Time period.>> the Comptroller 
        of the Currency or the Chairperson of the Corporation 
        determines, during the 2-year period beginning 1 year after the 
        transfer date, that a reorganization of the staff of the Office 
        of the Comptroller of the Currency or the Corporation, 
        respectively, is required, the reorganization shall be deemed a 
        ``major reorganization'' for purposes of affording affected 
        employees retirement under section 8336(d)(2) or 8414(b)(1)(B) 
        of title 5, United States Code.
            (2) Service credit.--For purposes of this subsection, 
        periods of service with a Federal home loan bank or a joint 
        office of Federal home loan banks shall be credited as periods 
        of service with a Federal agency.
SEC. 323. <<NOTE: 12 USC 5433.>> PROPERTY TRANSFERRED.

    (a) Property Defined.--For purposes of this section, the term 
``property'' includes all real property (including leaseholds) and all 
personal property, including computers, furniture, fixtures, equipment, 
books, accounts, records, reports, files, memoranda, paper, reports of 
examination, work papers, and correspondence related to such reports, 
and any other information or materials.
    (b) Property of the Office of Thrift Supervision.--
            (1) In general.--No <<NOTE: Deadline.>> later than 90 days 
        after the transfer date, all property of the Office of Thrift 
        Supervision (other than property described under paragraph 
        (b)(2)) that the Comptroller of the Currency and the Chairperson 
        of the Corporation jointly determine is used, on the day before 
        the transfer date, to perform or support the functions of the 
        Office of Thrift Supervision transferred to the Office of the 
        Comptroller of the Currency or the Corporation under this title, 
        shall be transferred to the Office of the Comptroller of the 
        Currency or the Corporation in a manner consistent with the 
        transfer of employees under this subtitle.
            (2) Personal property.--All books, accounts, records, 
        reports, files, memoranda, papers, documents, reports of 
        examination, work papers, and correspondence of the Office of 
        Thrift Supervision that the Comptroller of the Currency, the 
        Chairperson of the Corporation, and the Chairman of the Board of 
        Governors jointly determine is used, on the day before the 
        transfer date, to perform or support the functions of the Office 
        of Thrift Supervision transferred to the Board of Governors 
        under this title shall be transferred to the Board of Governors 
        in a manner consistent with the purposes of this title.

    (c) Contracts Related to Property Transferred.--Each contract, 
agreement, lease, license, permit, and similar arrangement

[[Page 124 STAT. 1536]]

relating to property transferred to the Office of the Comptroller of the 
Currency or the Corporation by this section shall be transferred to the 
Office of the Comptroller of the Currency or the Corporation, as 
appropriate, together with the property to which it relates.
    (d) Preservation of Property.--Property identified for transfer 
under this section shall not be altered, destroyed, or deleted before 
transfer under this section.
SEC. 324. <<NOTE: 12 USC 5434.>> FUNDS TRANSFERRED.

    The funds that, on the day before the transfer date, the Director of 
the Office of Thrift Supervision (in consultation with the Comptroller 
of the Currency, the Chairperson of the Corporation, and the Chairman of 
the Board of Governors) determines are not necessary to dispose of the 
affairs of the Office of Thrift Supervision under section 325 and are 
available to the Office of Thrift Supervision to pay the expenses of the 
Office of Thrift Supervision--
            (1) relating to the functions of the Office of Thrift 
        Supervision transferred under section 312(b)(2)(B), shall be 
        transferred to the Office of the Comptroller of the Currency on 
        the transfer date;
            (2) relating to the functions of the Office of Thrift 
        Supervision transferred under section 312(b)(2)(C), shall be 
        transferred to the Corporation on the transfer date; and
            (3) relating to the functions of the Office of Thrift 
        Supervision transferred under section 312(b)(1)(A), shall be 
        transferred to the Board of Governors on the transfer date.
SEC. 325. <<NOTE: Time periods. 12 USC 5435.>> DISPOSITION OF 
                        AFFAIRS.

    (a) Authority of Director.--During the 90-day period beginning on 
the transfer date, the Director of the Office of Thrift Supervision--
            (1) shall, solely for the purpose of winding up the affairs 
        of the Office of Thrift Supervision relating to any function 
        transferred to the Office of the Comptroller of the Currency, 
        the Corporation, or the Board of Governors under this title--
                    (A) manage the employees of the Office of Thrift 
                Supervision who have not yet been transferred and 
                provide for the payment of the compensation and benefits 
                of the employees that accrue before the date on which 
                the employees are transferred under this title; and
                    (B) manage any property of the Office of Thrift 
                Supervision, until the date on which the property is 
                transferred under section 323; and
            (2) may take any other action necessary to wind up the 
        affairs of the Office of Thrift Supervision.

    (b) Status of Director.--
            (1) In general.--Notwithstanding the transfer of functions 
        under this subtitle, during the 90-day period beginning on the 
        transfer date, the Director of the Office of Thrift Supervision 
        shall retain and may exercise any authority vested in the 
        Director of the Office of Thrift Supervision on the day before 
        the transfer date, only to the extent necessary--
                    (A) to wind up the Office of Thrift Supervision; and
                    (B) to carry out the transfer under this subtitle 
                during such 90-day period.

[[Page 124 STAT. 1537]]

            (2) Other provisions.--For purposes of paragraph (1), the 
        Director of the Office of Thrift Supervision shall, during the 
        90-day period beginning on the transfer date, continue to be--
                    (A) treated as an officer of the United States; and
                    (B) entitled to receive compensation at the same 
                annual rate of basic pay that the Director of the Office 
                of Thrift Supervision received on the day before the 
                transfer date.
SEC. 326. <<NOTE: 12 USC 5436.>> CONTINUATION OF SERVICES.

    Any agency, department, or other instrumentality of the United 
States, and any successor to any such agency, department, or 
instrumentality, that was, before the transfer date, providing support 
services to the Office of Thrift Supervision in connection with 
functions transferred to the Office of the Comptroller of the Currency, 
the Corporation or the Board of Governors under this title, shall--
            (1) continue to provide such services, subject to 
        reimbursement by the Office of the Comptroller of the Currency, 
        the Corporation, or the Board of Governors, until the transfer 
        of functions under this title is complete; and
            (2) consult <<NOTE: Consultation.>> with the Comptroller of 
        the Currency, the Chairperson of the Corporation, or the 
        Chairman of the Board of Governors, as appropriate, to 
        coordinate and facilitate a prompt and orderly transition.
SEC. 327. <<NOTE: 12 USC 5437.>> IMPLEMENTATION PLAN AND REPORTS.

    (a) Plan Submission.--Within 180 days of the enactment of the Dodd-
Frank Wall Street Reform and Consumer Protection Act, the Board of 
Governors, the Corporation, the Office of the Comptroller of the 
Currency, and the Office of Thrift Supervision, shall jointly submit a 
plan to the Committee on Banking, Housing, and Urban Affairs of the 
Senate, the Committee on Financial Services of the House of 
Representatives, and the Inspectors General of the Department of the 
Treasury, the Corporation, and the Board of Governors detailing the 
steps the Board of Governors, the Corporation, the Office of the 
Comptroller of the Currency, and the Office of Thrift Supervision will 
take to implement the provisions of sections 301 through 326, and the 
provisions of the amendments made by such sections.
    (b) Inspectors General Review of the Plan.--Within 60 days of 
receiving the plan required under subsection (a), the Inspectors General 
of the Department of the Treasury, the Corporation, and the Board of 
Governors shall jointly provide a written report to the Board of 
Governors, the Corporation, the Office of the Comptroller of the 
Currency, and the Office of Thrift Supervision and shall submit a copy 
to the Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of Representatives 
detailing whether the plan conforms with the provisions of sections 301 
through 326, and the provisions of the amendments made by such sections, 
including--
            (1) whether the plan sufficiently takes into consideration 
        the orderly transfer of personnel;
            (2) whether the plan describes procedures and safeguards to 
        ensure that the Office of Thrift Supervision employees are not 
        unfairly disadvantaged relative to employees of the Office of 
        the Comptroller of the Currency and the Corporation;

[[Page 124 STAT. 1538]]

            (3) whether the plan sufficiently takes into consideration 
        the orderly transfer of authority and responsibilities;
            (4) whether the plan sufficiently takes into consideration 
        the effective transfer of funds;
            (5) whether the plan sufficiently takes in consideration the 
        orderly transfer of property; and
            (6) any additional recommendations for an orderly and 
        effective process.

    (c) Implementation Reports.--Not later than 6 months after the date 
on which the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives receives the report required under subsection (b), and 
every 6 months thereafter until all aspects of the plan have been 
implemented, the Inspectors General of the Department of the Treasury, 
the Corporation, and the Board of Governors shall jointly provide a 
written report on the status of the implementation of the plan to the 
Board of Governors, the Corporation, the Office of the Comptroller of 
the Currency, and the Office of Thrift Supervision and shall submit a 
copy to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives.

            Subtitle C--Federal Deposit Insurance Corporation

SEC. 331. DEPOSIT INSURANCE REFORMS.

    (a) Size Distinctions.--Section 7(b)(2) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraph (C) as subparagraph (D).

    (b) Assessment <<NOTE: 12 USC 1817 note.>> Base.--The Corporation 
shall amend the regulations issued by the Corporation under section 
7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) to 
define the term ``assessment base'' with respect to an insured 
depository institution for purposes of that section 7(b)(2), as an 
amount equal to--
            (1) the average consolidated total assets of the insured 
        depository institution during the assessment period; minus
            (2) the sum of--
                    (A) the average tangible equity of the insured 
                depository institution during the assessment period; and
                    (B) in the case of an insured depository institution 
                that is a custodial bank (as defined by the Corporation, 
                based on factors including the percentage of total 
                revenues generated by custodial businesses and the level 
                of assets under custody) or a banker's bank (as that 
                term is used in section 5136 of the Revised Statutes (12 
                U.S.C. 24)), an amount that the Corporation determines 
                is necessary to establish assessments consistent with 
                the definition under section 7(b)(1) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1817(b)(1)) for a 
                custodial bank or a banker's bank.

[[Page 124 STAT. 1539]]

SEC. 332. ELIMINATION OF PROCYCLICAL ASSESSMENTS.

    Section 7(e) of the Federal Deposit Insurance Act <<NOTE: 12 USC 
1817.>> is amended--
            (1) in paragraph (2)--
                    (A) by amending subparagraph (B) to read as follows:
                    ``(B) Limitation.--The Board of Directors may, in 
                its sole discretion, suspend or limit the declaration of 
                payment of dividends under subparagraph (A).'';
                    (B) by amending subparagraph (C) to read as follows:
                    ``(C) Notice and <<NOTE: Regulations.>> opportunity 
                for comment.--The Corporation shall prescribe, by 
                regulation, after notice and opportunity for comment, 
                the method for the declaration, calculation, 
                distribution, and payment of dividends under this 
                paragraph''; and
                    (C) by striking subparagraphs (D) through (G); and
            (2) in paragraph (4)(A) by striking ``paragraphs (2)(D) 
        and'' and inserting ``paragraphs (2) and''.
SEC. 333. ENHANCED ACCESS TO INFORMATION FOR DEPOSIT INSURANCE 
                        PURPOSES.

    (a) Section 7(a)(2)(B) of the Federal Deposit Insurance Act is 
amended by striking ``agreement'' and inserting ``consultation''.
    (b) Section 7(b)(1)(E) of the Federal Deposit Insurance Act is 
amended--
            (1) in clause (i), by striking ``such as'' and inserting 
        ``including''; and
            (2) in clause (iii), by striking ``Corporation'' and 
        inserting ``Corporation, except as provided in section 
        7(a)(2)(B)''.
SEC. 334. TRANSITION RESERVE RATIO REQUIREMENTS TO REFLECT NEW 
                        ASSESSMENT BASE.

    (a) Section 7(b)(3)(B) of the Federal Deposit Insurance Act is 
amended to read as follows:
                    ``(B) Minimum reserve ratio.--The reserve ratio 
                designated by the Board of Directors for any year may 
                not be less than 1.35 percent of estimated insured 
                deposits, or the comparable percentage of the assessment 
                base set forth in paragraph (2)(C).''.

    (b) Section 3(y)(3) of the <<NOTE: 12 USC 1813.>> Federal Deposit 
Insurance Act is amended by inserting ``, or such comparable percentage 
of the assessment base set forth in section 7(b)(2)(C)'' before the 
period.

    (c) For a <<NOTE: Time period. Public information. 12 USC 1817 
note.>> period of not less than 5 years after the date of the enactment 
of this title, the Federal Deposit Insurance Corporation shall make 
available to the public the reserve ratio and the designated reserve 
ratio using both estimated insured deposits and the assessment base 
under section 7(b)(2)(C) of the Federal Deposit Insurance Act.

    (d) Reserve Ratio.--Notwithstanding the timing requirements of 
section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act, the 
Corporation shall take such steps as may be necessary for the reserve 
ratio of the Deposit Insurance Fund to reach 1.35 percent of estimated 
insured deposits by September 30, 2020.
    (e) Offset.--In setting the assessments necessary to meet the 
requirements of subsection (d), the Corporation shall offset the effect 
of subsection (d) on insured depository institutions with total 
consolidated assets of less than $10,000,000,000.

[[Page 124 STAT. 1540]]

SEC. 335. PERMANENT INCREASE IN DEPOSIT AND SHARE INSURANCE.

    (a) Permanent Increase in Deposit Insurance.--Section 11(a)(1)(E) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)) is amended--
            (1) by striking ``$100,000'' and inserting ``$250,000''; and
            (2) by adding at the end the following new sentences: 
        ``Notwithstanding any other provision of law, the increase in 
        the standard maximum deposit insurance amount to $250,000 shall 
        apply to depositors in any institution for which the Corporation 
        was appointed as receiver or conservator on or after January 1, 
        2008, and before October 3, 2008. The Corporation shall take 
        such actions as are necessary to carry out the requirements of 
        this section with respect to such depositors, without regard to 
        any time limitations under this Act. In implementing this and 
        the preceding 2 sentences, any payment on a deposit claim made 
        by the Corporation as receiver or conservator to a depositor 
        above the standard maximum deposit insurance amount in effect at 
        the time of the appointment of the Corporation as receiver or 
        conservator shall be deemed to be part of the net amount due to 
        the depositor under subparagraph (B).''

    (b) Permanent Increase in Share Insurance.--Section 207(k)(5) of the 
Federal Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by striking 
``$100,000'' and inserting ``$250,000''.
SEC. 336. MANAGEMENT OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

    (a) In General.--Section 2 of the Federal Deposit Insurance Act (12 
U.S.C. 1812) is amended--
            (1) in subsection (a)(1)(B), by striking ``Director of the 
        Office of Thrift Supervision'' and inserting ``Director of the 
        Consumer Financial Protection Bureau'';
            (2) by amending subsection (d)(2) to read as follows:
            ``(2) Acting officials may serve.--In the event of a vacancy 
        in the office of the Comptroller of the Currency or the office 
        of Director of the Consumer Financial Protection Bureau and 
        pending the appointment of a successor, or during the absence or 
        disability of the Comptroller of the Currency or the Director of 
        the Consumer Financial Protection Bureau, the acting Comptroller 
        of the Currency or the acting Director of the Consumer Financial 
        Protection Bureau, as the case may be, shall be a member of the 
        Board of Directors in the place of the Comptroller or 
        Director.''; and
            (3) in subsection (f)(2), by striking ``Office of Thrift 
        Supervision'' and inserting ``Consumer Financial Protection 
        Bureau''.

    (b) Effective <<NOTE: 12 USC 1812 note.>> Date.--This section, and 
the amendments made by this section, shall take effect on the transfer 
date.

                        Subtitle D--Other Matters

SEC. <<NOTE: 12 USC 5451.>> 341. BRANCHING.

    Notwithstanding the Federal Deposit Insurance Act (12 U.S.C. 1811 et 
seq.), the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.), or 
any other provision of Federal or State law, a savings association that 
becomes a bank may--

[[Page 124 STAT. 1541]]

            (1) continue to operate any branch or agency that the 
        savings association operated immediately before the savings 
        association became a bank; and
            (2) establish, acquire, and operate additional branches and 
        agencies at any location within any State in which the savings 
        association operated a branch immediately before the savings 
        association became a bank, if the law of the State in which the 
        branch is located, or is to be located, would permit 
        establishment of the branch if the bank were a State bank 
        chartered by such State.
SEC. 342. <<NOTE: 12 USC 5452.>> OFFICE OF MINORITY AND WOMEN 
                        INCLUSION.

    (a) Office of Minority and Women Inclusion.--
            (1) <<NOTE: Deadlines.>>  Establishment.--
                    (A) In general.--Except as provided in subparagraph 
                (B), not later than 6 months after the date of enactment 
                of this Act, each agency shall establish an Office of 
                Minority and Women Inclusion that shall be responsible 
                for all matters of the agency relating to diversity in 
                management, employment, and business activities.
                    (B) Bureau.--The Bureau shall establish an Office of 
                Minority and Women Inclusion not later than 6 months 
                after the designated transfer date established under 
                section 1062.
            (2) Transfer of responsibilities.--Each agency that, on the 
        day before the date of enactment of this Act, assigned the 
        responsibilities described in paragraph (1) (or comparable 
        responsibilities) to another office of the agency shall ensure 
        that such responsibilities are transferred to the Office.
            (3) Duties with respect to civil rights laws.--The 
        responsibilities described in paragraph (1) do not include 
        enforcement of statutes, regulations, or executive orders 
        pertaining to civil rights, except each Director shall 
        coordinate with the agency administrator, or the designee of the 
        agency administrator, regarding the design and implementation of 
        any remedies resulting from violations of such statutes, 
        regulations, or executive orders.

    (b) Director.--
            (1) In general.--The Director of each Office shall be 
        appointed by, and shall report to, the agency administrator. The 
        position of Director shall be a career reserved position in the 
        Senior Executive Service, as that position is defined in section 
        3132 of title 5, United States Code, or an equivalent 
        designation.
            (2) Duties.--Each <<NOTE: Standards.>> Director shall 
        develop standards for--
                    (A) equal employment opportunity and the racial, 
                ethnic, and gender diversity of the workforce and senior 
                management of the agency;
                    (B) increased participation of minority-owned and 
                women-owned businesses in the programs and contracts of 
                the agency, including standards for coordinating 
                technical assistance to such businesses; and
                    (C) assessing the diversity policies and practices 
                of entities regulated by the agency.
            (3) Other duties.--Each Director shall advise the agency 
        administrator on the impact of the policies and regulations of 
        the agency on minority-owned and women-owned businesses.

[[Page 124 STAT. 1542]]

            (4) Rule of construction.--Nothing in paragraph (2)(C) may 
        be construed to mandate any requirement on or otherwise affect 
        the lending policies and practices of any regulated entity, or 
        to require any specific action based on the findings of the 
        assessment.

    (c) Inclusion in All Levels of Business Activities.--
            (1) In general.--
        The <<NOTE: Standards. Procedures.>> Director of each Office 
        shall develop and implement standards and procedures to ensure, 
        to the maximum extent possible, the fair inclusion and 
        utilization of minorities, women, and minority-owned and women-
        owned businesses in all business and activities of the agency at 
        all levels, including in procurement, insurance, and all types 
        of contracts.
            (2) Contracts.--The procedures established by each agency 
        for review and evaluation of contract proposals and for hiring 
        service providers shall include, to the extent consistent with 
        applicable law, a component that gives consideration to the 
        diversity of the applicant. Such procedure shall include a 
        written statement, in a form and with such content as the 
        Director shall prescribe, that a contractor shall ensure, to the 
        maximum extent possible, the fair inclusion of women and 
        minorities in the workforce of the contractor and, as 
        applicable, subcontractors.
            (3) Termination.--
                    (A) Determination.--The standards and procedures 
                developed and implemented under this subsection shall 
                include a procedure for the Director to make a 
                determination whether an agency contractor, and, as 
                applicable, a subcontractor has failed to make a good 
                faith effort to include minorities and women in their 
                workforce.
                    (B) Effect of determination.--
                          (i) Recommendation to agency administrator.--
                      Upon a determination described in subparagraph 
                      (A), the Director shall make a recommendation to 
                      the agency administrator that the contract be 
                      terminated.
                          (ii) Action by agency administrator.--Upon 
                      receipt of a recommendation under clause (i), the 
                      agency administrator may--
                                    (I) terminate the contract;
                                    (II) make a referral to the Office 
                                of Federal Contract Compliance Programs 
                                of the Department of Labor; or
                                    (III) take other appropriate action.

    (d) Applicability.--This section shall apply to all contracts of an 
agency for services of any kind, including the services of financial 
institutions, investment banking firms, mortgage banking firms, asset 
management firms, brokers, dealers, financial services entities, 
underwriters, accountants, investment consultants, and providers of 
legal services. The contracts referred to in this subsection include all 
contracts for all business and activities of an agency, at all levels, 
including contracts for the issuance or guarantee of any debt, equity, 
or security, the sale of assets, the management of the assets of the 
agency, the making of equity investments by the agency, and the 
implementation by the agency of programs to address economic recovery.

[[Page 124 STAT. 1543]]

    (e) Reports.--Each Office shall submit to Congress an annual report 
regarding the actions taken by the agency and the Office pursuant to 
this section, which shall include--
            (1) a statement of the total amounts paid by the agency to 
        contractors since the previous report;
            (2) the percentage of the amounts described in paragraph (1) 
        that were paid to contractors described in subsection (c)(1);
            (3) the successes achieved and challenges faced by the 
        agency in operating minority and women outreach programs;
            (4) the challenges the agency may face in hiring qualified 
        minority and women employees and contracting with qualified 
        minority-owned and women-owned businesses; and
            (5) any other information, findings, conclusions, and 
        recommendations for legislative or agency action, as the 
        Director determines appropriate.

    (f) Diversity in Agency Workforce.--Each agency shall take 
affirmative steps to seek diversity in the workforce of the agency at 
all levels of the agency in a manner consistent with applicable law. 
Such steps shall include--
            (1) recruiting at historically black colleges and 
        universities, Hispanic-serving institutions, women's colleges, 
        and colleges that typically serve majority minority populations;
            (2) sponsoring and recruiting at job fairs in urban 
        communities;
            (3) placing employment advertisements in newspapers and 
        magazines oriented toward minorities and women;
            (4) partnering with organizations that are focused on 
        developing opportunities for minorities and women to place 
        talented young minorities and women in industry internships, 
        summer employment, and full-time positions;
            (5) where feasible, partnering with inner-city high schools, 
        girls' high schools, and high schools with majority minority 
        populations to establish or enhance financial literacy programs 
        and provide mentoring; and
            (6) any other mass media communications that the Office 
        determines necessary.

    (g) Definitions.--For <<NOTE: Applicability.>> purposes of this 
section, the following definitions shall apply:
            (1) Agency.--The term ``agency'' means--
                    (A) the Departmental Offices of the Department of 
                the Treasury;
                    (B) the Corporation;
                    (C) the Federal Housing Finance Agency;
                    (D) each of the Federal reserve banks;
                    (E) the Board;
                    (F) the National Credit Union Administration;
                    (G) the Office of the Comptroller of the Currency;
                    (H) the Commission; and
                    (I) the Bureau.
            (2) Agency administrator.--The term ``agency administrator'' 
        means the head of an agency.
            (3) Minority.--The term ``minority'' has the same meaning as 
        in section 1204(c) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note).
            (4) Minority-owned business.--The term ``minority-owned 
        business'' has the same meaning as in section 21A(r)(4)(A)

[[Page 124 STAT. 1544]]

        of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)(A)), as 
        in effect on the day before the transfer date.
            (5) Office.--The term ``Office'' means the Office of 
        Minority and Women Inclusion established by an agency under 
        subsection (a).
            (6) Women-owned business.--The term ``women-owned business'' 
        has the meaning given the term ``women's business'' in section 
        21A(r)(4)(B) of the Federal Home Loan Bank Act (12 U.S.C. 
        1441a(r)(4)(B)), as in effect on the day before the transfer 
        date.
SEC. 343. INSURANCE OF TRANSACTION ACCOUNTS.

    (a) Banks and Savings Associations.--
            (1) Amendments.--Section 11(a)(1) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
                    (A) in subparagraph (B)--
                          (i) by striking ``The net amount'' and 
                      inserting the following:
                          ``(i) In general.--Subject to clause (ii), the 
                      net amount''; and
                          (ii) by adding at the end the following new 
                      clauses:
                          ``(ii) Insurance for noninterest-bearing 
                      transaction accounts.--Notwithstanding clause (i), 
                      the Corporation shall fully insure the net amount 
                      that any depositor at an insured depository 
                      institution maintains in a noninterest-bearing 
                      transaction account. Such amount shall not be 
                      taken into account when computing the net amount 
                      due to such depositor under clause (i).
                          ``(iii) Noninterest-bearing transaction 
                      account defined.--For purposes of this 
                      subparagraph, the term `noninterest-bearing 
                      transaction account' means a deposit or account 
                      maintained at an insured depository institution--
                                    ``(I) with respect to which interest 
                                is neither accrued nor paid;
                                    ``(II) on which the depositor or 
                                account holder is permitted to make 
                                withdrawals by negotiable or 
                                transferable instrument, payment orders 
                                of withdrawal, telephone or other 
                                electronic media transfers, or other 
                                similar items for the purpose of making 
                                payments or transfers to third parties 
                                or others; and
                                    ``(III) on which the insured 
                                depository institution does not reserve 
                                the right to require advance notice of 
                                an intended withdrawal.''; and
                    (B) in subparagraph (C), by striking ``subparagraph 
                (B)'' and inserting ``subparagraph (B)(i)''.
            (2) Effective date.--The <<NOTE: 12 USC 1821 
        note.>> amendments made by paragraph (1) shall take effect on 
        December 31, 2010.
            (3) Prospective <<NOTE: Effective date. 12 USC 1821 
        note.>> repeal.--Effective January 1, 2013, section 11(a)(1) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)), as 
        amended by paragraph (1), is amended--
                    (A) in subparagraph (B)--
                          (i) by striking ``deposit.--'' and all that 
                      follows through ``clause (ii), the net amount'' 
                      and insert ``deposit.--The net amount''; and

[[Page 124 STAT. 1545]]

                          (ii) by striking clauses (ii) and (iii); and
                    (B) in subparagraph (C), by striking ``subparagraph 
                (B)(i)'' and inserting ``subparagraph (B)''.

    (b) Credit Unions.--
            (1) Amendments.--Section 207(k)(1) of the Federal Credit 
        Union Act (12 U.S.C. 1787(k)(1)) is amended--
                    (A) in subparagraph (A)--
                          (i) by striking ``Subject to the provisions of 
                      paragraph (2), the net amount'' and inserting the 
                      following:
                          ``(i) Net amount of insurance payable.--
                      Subject to clause (ii) and the provisions of 
                      paragraph (2), the net amount''; and
                          (ii) by adding at the end the following new 
                      clauses:
                          ``(ii) Insurance for noninterest-bearing 
                      transaction accounts.--Notwithstanding clause (i), 
                      the Board shall fully insure the net amount that 
                      any member or depositor at an insured credit union 
                      maintains in a noninterest-bearing transaction 
                      account. Such amount shall not be taken into 
                      account when computing the net amount due to such 
                      member or depositor under clause (i).
                          ``(iii) Noninterest-bearing transaction 
                      account defined.--For purposes of this 
                      subparagraph, the term `noninterest-bearing 
                      transaction account' means an account or deposit 
                      maintained at an insured credit union--
                                    ``(I) with respect to which interest 
                                is neither accrued nor paid;
                                    ``(II) on which the account holder 
                                or depositor is permitted to make 
                                withdrawals by negotiable or 
                                transferable instrument, payment orders 
                                of withdrawal, telephone or other 
                                electronic media transfers, or other 
                                similar items for the purpose of making 
                                payments or transfers to third parties 
                                or others; and
                                    ``(III) on which the insured credit 
                                union does not reserve the right to 
                                require advance notice of an intended 
                                withdrawal.''; and
                    (B) in subparagraph (B), by striking ``subparagraph 
                (A)'' and inserting ``subparagraph (A)(i)''.
            (2) Effective <<NOTE: 12 USC 1787 note.>> date.--The 
        amendments made by paragraph (1) shall take effect upon the date 
        of the enactment of this Act
            (3) Prospective <<NOTE: Effective date. 12 USC 1787 
        note.>> repeal.--Effective January 1, 2013, section 207(k)(1) of 
        the Federal Credit Union Act (12 U.S.C. 1787(k)(1)), as amended 
        by paragraph (1), is amended--
                    (A) in subparagraph (A)--
                          (i) by striking ``(i) net amount of insurance 
                      payable.--'' and all that follows through 
                      ``paragraph (2), the net amount'' and inserting 
                      ``Subject to the provisions of paragraph (2), the 
                      net amount''; and
                          (ii) by striking clauses (ii) and (iii); and
                    (B) in subparagraph (B), by striking ``subparagraph 
                (A)(i)'' and inserting ``subparagraph (A)''.

[[Page 124 STAT. 1546]]

             Subtitle E--Technical and Conforming Amendments

SEC. 351. <<NOTE: 12 USC 906 note.>> EFFECTIVE DATE.

    Except as provided in section 364(a), the amendments made by this 
subtitle shall take effect on the transfer date.
SEC. 352. BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 
                        1985.

    Section 256(h) of the Balanced Budget and Emergency Deficit Control 
Act of 1985 (2 U.S.C. 906(h)) is amended--
            (1) in paragraph (4), by striking subparagraphs (C) and (G); 
        and
            (2) by redesignating subparagraphs (D), (E), (F), and (H) as 
        subparagraphs (C), (D), (E), and (F), respectively.
SEC. 353. BANK ENTERPRISE ACT OF 1991.

    Section 232(a) of the Bank Enterprise Act of 1991 (12 U.S.C. 
1834(a)) is amended--
            (1) in the subsection heading, by striking ``by Federal 
        Reserve Board'';
            (2) in paragraph (1)--
                    (A) by striking ``The Board of Governors of the 
                Federal Reserve System,'' and inserting ``The 
                Comptroller of the Currency''; and
                    (B) by striking ``section 7(b)(2)(H)'' and inserting 
                ``section 7(b)(2)(E)'';
            (3) in paragraph (2)(A), by striking ``Board'' and inserting 
        ``Comptroller''; and
            (4) in paragraph (3)--
                    (A) by redesignating subparagraphs (A) through (C) 
                as subparagraphs (B) through (D), respectively; and
                    (B) by inserting before subparagraph (B) the 
                following:
                    ``(A) Comptroller.--The <<NOTE: Definition.>> term 
                `Comptroller' means the Comptroller of the Currency.''.
SEC. 354. BANK HOLDING COMPANY ACT OF 1956.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended--
            (1) in section 2(j)(3) (12 U.S.C. 1841(j)(3)), strike 
        ``Director of the Office of Thrift Supervision'' and inserting 
        ``appropriate Federal banking agency'';
            (2) in section 4 (12 U.S.C. 1843)--
                    (A) in subsection (i)--
                          (i) in paragraph (4)--
                                    (I) in subparagraph (A)--
                                            (aa) in the subparagraph 
                                        heading, by striking ``to 
                                        director''; and
                                            (bb) by striking ``Board'' 
                                        and all that follows through the 
                                        end of the subparagraph and 
                                        inserting ``Board shall solicit 
                                        comments and recommendations 
                                        from--
                          ``(i) the Comptroller of the Currency, with 
                      respect to the acquisition of a Federal savings 
                      association; and

[[Page 124 STAT. 1547]]

                          ``(ii) the Federal Deposit Insurance 
                      Corporation, with respect to the acquisition of a 
                      State savings association.''.
                                    (II) in subparagraph (B), by 
                                striking ``Director'' each place that 
                                term appears and inserting ``Comptroller 
                                of the Currency or the Federal Deposit 
                                Insurance Corporation, as applicable,'';
                          (ii) in paragraph (5)--
                                    (I) in subparagraph (B), by striking 
                                ``Director with'' and inserting 
                                ``Comptroller of the Currency or the 
                                Federal Deposit Insurance Corporation, 
                                as applicable, with''; and
                                    (II) by striking ``Director'' each 
                                place that term appears and inserting 
                                ``Comptroller of the Currency or the 
                                Federal Deposit Insurance Corporation'';
                          (iii) in paragraph (6), by striking 
                      ``Director'' and inserting ``Comptroller of the 
                      Currency or the Federal Deposit Insurance 
                      Corporation, as applicable,''; and
                          (iv) by striking paragraph (7); and
            (3) in section 5(f) (12 U.S.C. 1844(f))--
                    (A) by striking ``subpena'' each place that term 
                appears and inserting ``subpoena'';
                    (B) by striking ``subpenas'' each place that term 
                appears and inserting ``subpoenas''; and
                    (C) by striking ``subpenaed'' and inserting 
                ``subpoenaed''.
SEC. 355. BANK HOLDING COMPANY ACT AMENDMENTS OF 1970.

    Section 106(b)(1) of the Bank Holding Company Act Amendments of 1970 
(12 U.S.C. 1972(1)) is amended in the undesignated matter following 
subparagraph (E) by inserting ``issue such regulations as are necessary 
to carry out this section, and, in consultation with the Comptroller of 
the Currency and the Federal Deposit Insurance Company, may'' after 
``The Board may''.
SEC. 356. BANK PROTECTION ACT OF 1968.

    The Bank Protection Act of 1968 (12 U.S.C. 1881 et seq.) is 
amended--
            (1) in section 2 (12 U.S.C. 1881), by striking ``the term'' 
        and all that follows through the end of the section and 
        inserting ``the <<NOTE: Definition.>> term `Federal supervisory 
        agency' means the appropriate Federal banking agency, as defined 
        in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).'';
            (2) in section 3 (12 U.S.C. 1882), by striking ``and loan'' 
        each place that term appears; and
            (3) in section 5 (12 U.S.C. 1884), by striking ``and loan''.
SEC. 357. BANK SERVICE COMPANY ACT.

    The Bank Service Company Act (12 U.S.C. 1861 et seq.) is amended--
            (1) in section 1(b)(4) (12 U.S.C. 1861(b)(4))--
                    (A) by inserting after ``an insured bank,'' the 
                following: ``a savings association,'';
                    (B) by striking ``Director of the Office of Thrift 
                Supervision'' and inserting ``appropriate Federal 
                banking agency''; and

[[Page 124 STAT. 1548]]

                    (C) by striking ``, the Federal Savings and Loan 
                Insurance Corporation,'';
            (2) in section 1(b)(5), by striking ``term `insured 
        depository institution' has the same meaning as in section 
        3(c)'' and inserting ``terms `depository institution' and 
        `savings association' have the same meanings as in section 3''; 
        and
            (3) in section 7(c)(2) (12 U.S.C. 1867(c)(2)), by inserting 
        ``each'' after ``notify''.
SEC. 358. COMMUNITY REINVESTMENT ACT OF 1977.

    The Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.) is 
amended--
            (1) in section 803 (12 U.S.C. 2902)--
                    (A) in paragraph (1)--
                          (i) in subparagraph (A), by inserting ``and 
                      Federal savings associations (the deposits of 
                      which are insured by the Federal Deposit Insurance 
                      Corporation)'' after ``banks'';
                          (ii) in subparagraph (B), by striking ``and 
                      bank holding companies'' and inserting ``, bank 
                      holding companies, and savings and loan holding 
                      companies''; and
                          (iii) in subparagraph (C), by striking ``; 
                      and'' and inserting ``, and State savings 
                      associations (the deposits of which are insured by 
                      the Federal Deposit Insurance Corporation).''; and
                    (B) by striking paragraph (2) (relating to the 
                Office of Thrift Supervision), as added by section 
                744(q) of the Financial Institutions Reform, Recovery, 
                and Enforcement Act of 1989 (Public Law 101-73; 103 
                Stat. 440); and
            (2) in <<NOTE: Regulations. Applicability.>> section 806 (12 
        U.S.C. 2905), by inserting ``, except that the Comptroller of 
        the Currency shall prescribe regulations applicable to savings 
        associations and the Board of Governors shall prescribe 
        regulations applicable to insured State member banks, bank 
        holding companies and savings and loan holding companies,'' 
        after ``supervisory agency''.
SEC. 359. CRIME CONTROL ACT OF 1990.

    The Crime Control Act of 1990 is amended--
            (1) in section 2539(c)(2) (28 U.S.C. 509 note)--
                    (A) by striking subparagraphs (C) and (D); and
                    (B) by redesignating subparagraphs (E) through (H) 
                as subparagraphs (C) through (G), respectively; and
            (2) in section 2554(b)(2) (Public Law 101-647; 104 Stat. 
        4890)--
                    (A) in subparagraph (A), by striking ``, the 
                Director of the Office of Thrift Supervision,'' and 
                inserting ``the Comptroller of the Currency''; and
                    (B) in subparagraph (B), by striking ``, the 
                Director'' and all that follows through ``Trust 
                Corporation'' and inserting ``or the Federal Deposit 
                Insurance Corporation''.
SEC. 360. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.

    The Depository Institution Management Interlocks Act (12 U.S.C. 3201 
et seq.) is amended--
            (1) in section 207 (12 U.S.C. 3206)--
                    (A) in paragraph (1), by inserting before the comma 
                at the end the following: ``and Federal savings 
                associations

[[Page 124 STAT. 1549]]

                (the deposits of which are insured by the Federal 
                Deposit Insurance Corporation)'';
                    (B) in paragraph (2), by striking ``, and bank 
                holding companies'' and inserting ``, bank holding 
                companies, and savings and loan holding companies'';
                    (C) in paragraph (3), by striking ``Corporation,'' 
                and inserting ``Corporation and State savings 
                associations (the deposits of which are insured by the 
                Federal Deposit Insurance Corporation),'';
                    (D) by striking paragraph (4);
                    (E) by redesignating paragraphs (5) and (6) as 
                paragraphs (4) and (5), respectively; and
                    (F) in paragraph (5), as so redesignated, by 
                striking ``through (5)'' and inserting ``through (4)'';
            (2) in section 209 (12 U.S.C. 3207)--
                    (A) in paragraph (1), by inserting before the comma 
                at the end the following: ``and Federal savings 
                associations (the deposits of which are insured by the 
                Federal Deposit Insurance Corporation)'';
                    (B) in paragraph (2), by striking ``, and bank 
                holding companies'' and inserting ``, bank holding 
                companies, and savings and loan holding companies'';
                    (C) in paragraph (3), by striking ``Corporation,'' 
                and inserting ``Corporation and State savings 
                associations (the deposits of which are insured by the 
                Federal Deposit Insurance Corporation),'';
                    (D) by striking paragraph (4); and
                    (E) by redesignating paragraph (5) as paragraph (4); 
                and
            (3) in section 210(a) (12 U.S.C. 3208(a))--
                    (A) by striking ``his'' and inserting ``the''; and
                    (B) by inserting ``of the Attorney General'' after 
                ``enforcement functions''.
SEC. 361. EMERGENCY HOMEOWNERS' RELIEF ACT.

    Section 110 of the Emergency Homeowners' Relief Act (12 U.S.C. 2709) 
is amended in the second sentence, by striking ``Home Loan Bank Board, 
the Federal Savings and Loan Insurance Corporation'' and inserting 
``Housing Finance Agency''.
SEC. 362. FEDERAL CREDIT UNION ACT.

    The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is amended--
            (1) in section 107(8) (12 U.S.C. 1757(8)), by striking ``or 
        the Federal Savings and Loan Insurance Corporation'';
            (2) in section 205 (12 U.S.C. 1785)--
                    (A) in subsection (b)(2)(G)(i), by striking ``the 
                Office of Thrift Supervision and''; and
                    (B) in subsection (i)(1), by striking ``or the 
                Federal Savings and Loan Insurance Corporation''; and
            (3) in section 206(g)(7) (12 U.S.C. 1786(g)(7))--
                    (A) in subparagraph (A)--
                          (i) in clause (ii), by striking ``(b)(8)'' and 
                      inserting ``(b)(9)'';
                          (ii) in clause (v)--
                                    (I) by striking ``depository'' and 
                                inserting ``financial''; and
                                    (II) by adding ``and'' at the end;

[[Page 124 STAT. 1550]]

                          (iii) in clause (vi)--
                                    (I) by striking ``Board'' and 
                                inserting ``Agency''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                          (iv) by striking clause (vii); and
                    (B) in subparagraph (D)--
                          (i) in clause (iii), by adding ``and'' at the 
                      end;
                          (ii) in clause (iv)--
                                    (I) by striking ``Board'' and 
                                inserting ``Agency''; and
                                    (II) by striking ``and'' at the end; 
                                and
                          (iii) by striking clause (v).
SEC. 363. FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended--
            (1) in section 3 (12 U.S.C. 1813)--
                    (A) in subsection (b)(1)(C), by striking ``Director 
                of the Office of Thrift Supervision'' and inserting 
                ``Comptroller of the Currency'';
                    (B) in subsection (l)(5), in the matter preceding 
                subparagraph (A), by striking ``Director of the Office 
                of Thrift Supervision,''; and
                    (C) in subsection (z), by striking ``the Director of 
                the Office of Thrift Supervision,'';
            (2) in section 7 (12 U.S.C. 1817)--
                    (A) in subsection (a)--
                          (i) in paragraph (2)--
                                    (I) in subparagraph (A)--
                                            (aa) in the first sentence, 
                                        by striking ``the Director of 
                                        the Office of Thrift 
                                        Supervision,'';
                                            (bb) in the second 
                                        sentence--
                                                (AA) by striking ``the 
                                            Director of the Office of 
                                            Thrift Supervision,'' and 
                                            inserting ``to''; and
                                                (BB) by inserting ``to'' 
                                            before ``any Federal home''; 
                                            and
                                            (cc) by striking ``Finance 
                                        Board'' each place that term 
                                        appears and inserting ``Finance 
                                        Agency''; and
                                    (II) in subparagraph (B), by 
                                striking ``the Comptroller of the 
                                Currency, the Board of Governors of the 
                                Federal Reserve System, and the Director 
                                of the Office of Thrift Supervision,'' 
                                and inserting ``the Comptroller of the 
                                Currency and the Board of Governors of 
                                the Federal Reserve System,'';
                          (ii) in paragraph (3), in the first sentence, 
                      by striking ``Comptroller of the Currency, the 
                      Chairman of the Board of Governors of the Federal 
                      Reserve System, and the Director of the Office of 
                      Thrift Supervision.'' and inserting ``Comptroller 
                      of the Currency, and the Chairman of the Board of 
                      Governors of the Federal Reserve System.'';
                          (iii) in paragraph (6), by striking ``section 
                      232(a)(3)(C)'' and inserting ``section 
                      232(a)(3)(D)''; and

[[Page 124 STAT. 1551]]

                          (iv) in paragraph (7), by striking ``, the 
                      Director of the Office of Thrift Supervision,''; 
                      and
                    (B) in subsection (n)--
                          (i) in the heading, by striking ``Director of 
                      the Office of Thrift Supervision'' and inserting 
                      ``Comptroller of the Currency'';
                          (ii) in the first sentence--
                                    (I) by striking ``the Director of 
                                the Office of Thrift Supervision'' and 
                                inserting ``the Comptroller of the 
                                Currency''; and
                                    (II) by inserting ``Federal'' before 
                                ``savings associations'';
                          (iii) in the third sentence, by striking ``, 
                      the Financing Corporation, and the Resolution 
                      Funding Corporation''; and
                          (iv) by striking ``the Director'' each place 
                      that term appears and inserting ``the 
                      Comptroller'';
            (3) in section 8 (12 U.S.C. 1818)--
                    (A) in subsection (a)(8)(B)(ii), in the last 
                sentence, by striking ``Director of the Office of Thrift 
                Supervision'' each place that term appears and inserting 
                ``Comptroller of the Currency'';
                    (B) in subsection (b)(3)--
                          (i) by inserting ``any savings and loan 
                      holding company and any subsidiary (other than a 
                      depository institution) of a savings and loan 
                      holding company (as such terms are defined in 
                      section 10 of Home Owners' Loan Act)), any 
                      noninsured State member bank'' after ``Bank 
                      Holding Company Act of 1956,''; and
                          (ii) by inserting ``or against a savings and 
                      loan holding company or any subsidiary thereof 
                      (other than a depository institution or a 
                      subsidiary of such depository institution)'' 
                      before the period at the end;
                    (C) by striking paragraph (9) of subsection (b) and 
                inserting the following new paragraph:
            ``(9) [Repealed]''.
                    (D) in subsection (e)(7)--
                          (i) in subparagraph (A)--
                                    (I) in clause (v), by inserting 
                                ``and'' after the semicolon;
                                    (II) in clause (vi)--
                                            (aa) by striking ``Board'' 
                                        and inserting ``Agency''; and
                                            (bb) by striking ``; and'' 
                                        and inserting a period; and
                                    (III) by striking clause (vii); and
                          (ii) in subparagraph (D)--
                                    (I) in clause (iii), by inserting 
                                ``and'' after the semicolon;
                                    (II) in clause (iv)--
                                            (aa) by striking ``Board'' 
                                        and inserting ``Agency''; and
                                            (bb) by striking ``; and'' 
                                        and inserting a period; and
                                    (III) by striking clause (v);
                    (E) in subsection (j)--

[[Page 124 STAT. 1552]]

                          (i) in paragraph (2), by striking ``, or as a 
                      savings association under subsection (b)(9) of 
                      this section'';
                          (ii) in paragraph (3), by inserting ``or'' 
                      after the semicolon;
                          (iii) in paragraph (4), by striking ``; or'' 
                      and inserting a comma; and
                          (iv) by striking paragraph (5);
                    (F) in subsection (o), by striking ``Director of the 
                Office of Thrift Supervision'' and inserting 
                ``Comptroller of the Currency''; and
                    (G) in subsection (w)(3)(A), by striking ``and the 
                Office of Thrift Supervision'';
            (4) in section 10 (12 U.S.C. 1820)--
                    (A) in subsection (d)(5), by striking ``or the 
                Resolution Trust Corporation'' each place that term 
                appears; and
                    (B) in subsection (k)(5)(B)--
                          (i) in clause (ii), by inserting ``and'' after 
                      the semicolon;
                          (ii) in clause (iii), by striking ``; and'' 
                      and inserting a period; and
                          (iii) by striking clause (iv);
            (5) in section 11 (12 U.S.C. 1821)--
                    (A) in subsection (c)--
                          (i) in paragraph (2)(A)(ii), by striking 
                      ``(other than section 21A of the Federal Home Loan 
                      Bank Act)'';
                          (ii) in paragraph (4), by striking ``Except as 
                      otherwise provided in section 21A of the Federal 
                      Home Loan Bank Act and notwithstanding'' and 
                      inserting ``Notwithstanding'';
                          (iii) in paragraph (6)--
                                    (I) in the heading, by striking 
                                ``Director of the office of thrift 
                                supervision'' and inserting 
                                ``Comptroller of the currency'';
                                    (II) in subparagraph (A)--
                                            (aa) by striking ``or the 
                                        Resolution Trust Corporation''; 
                                        and
                                            (bb) by striking ``Director 
                                        of the Office of Thrift 
                                        Supervision'' and inserting 
                                        ``Comptroller of the Currency''; 
                                        and
                                    (III) by amending subparagraph (B) 
                                to read as follows:
                    ``(B) Receiver.--The Corporation may, at the 
                discretion of the Comptroller of the Currency, be 
                appointed receiver and the Corporation may accept any 
                such appointment.'';
                          (iv) in paragraph (12)(A), by striking ``or 
                      the Resolution Trust Corporation'';
                    (B) in subsection (d)--
                          (i) in paragraph (17)(A), by striking ``or the 
                      Director of the Office of Thrift Supervision''; 
                      and
                          (ii) in paragraph (18)(B), by striking ``or 
                      the Director of the Office of Thrift 
                      Supervision'';
                    (C) in subsection (m)--
                          (i) in paragraph (9), by striking ``or the 
                      Director of the Office of Thrift Supervision, as 
                      appropriate'';

[[Page 124 STAT. 1553]]

                          (ii) in paragraph (16), by striking ``or the 
                      Director of the Office of Thrift Supervision, as 
                      appropriate'' each place that term appears; and
                          (iii) in paragraph (18), by striking ``or the 
                      Director of the Office of Thrift Supervision, as 
                      appropriate'' each place that term appears;
                    (D) in subsection (n)--
                          (i) in paragraph (1)(A)--
                                    (I) by striking ``, or the Director 
                                of the Office of Thrift Supervision, 
                                with respect to'' and inserting ``or''; 
                                and
                                    (II) by striking ``applicable,,'' 
                                and inserting ``applicable,'';
                          (ii) in paragraph (2)(A), by striking ``or the 
                      Director of the Office of Thrift Supervision'';
                          (iii) in paragraph (4)(D), by striking ``and 
                      the Director of the Office of Thrift Supervision, 
                      as appropriate,'';
                          (iv) in paragraph (4)(G), by striking ``and 
                      the Director of the Office of Thrift Supervision, 
                      as appropriate,''; and
                          (v) in paragraph (12)(B)--
                                    (I) by inserting ``as'' after 
                                ``shall appoint the Corporation'';
                                    (II) by striking ``or the Director 
                                of the Office of Thrift Supervision, as 
                                appropriate,'' each place such term 
                                appears;
                    (E) in subsection (p)--
                          (i) in paragraph (2)(B), by striking ``the 
                      Corporation, the FSLIC Resolution Fund, or the 
                      Resolution Trust Corporation,'' and inserting ``or 
                      the Corporation,''; and
                          (ii) in paragraph (3)(B), by striking ``, the 
                      FSLIC Resolution Fund, the Resolution Trust 
                      Corporation,''; and
                    (F) in subsection (r), by striking ``and the 
                Resolution Trust Corporation'';
            (6) in section 13(k)(1)(A)(iv) (12 U.S.C. 
        1823(k)(1)(A)(iv)), by striking ``Director of the Office of 
        Thrift Supervision'' and inserting ``Comptroller of the 
        Currency'';
            (7) in section 18 (12 U.S.C. 1828)--
                    (A) in subsection (c)(2)--
                          (i) in subparagraph (A), by inserting ``or a 
                      Federal savings association'' before the 
                      semicolon;
                          (ii) in subparagraph (B), by adding ``and'' at 
                      the end;
                          (iii) in subparagraph (C), by striking 
                      ``(except'' and all that follows through ``; and'' 
                      and inserting ``or a State savings association.''; 
                      and
                          (iv) by striking subparagraph (D);
                    (B) in subsection (g)(1), by striking ``the Director 
                of the Office of Thrift Supervision''and inserting ``the 
                Comptroller of the Currency'';
                    (C) in subsection (i)(2)(C), by striking ``Director 
                of the Office of Thrift Supervision'' and inserting 
                ``Corporation''; and
                    (D) in subsection (m)--

[[Page 124 STAT. 1554]]

                          (i) in paragraph (1)--
                                    (I) in subparagraph (A), by striking 
                                ``and the Director of the Office of 
                                Thrift Supervision'' and inserting ``or 
                                the Comptroller of the Currency, as 
                                appropriate,''; and
                                    (II) in subparagraph (B), by 
                                striking ``and orders of the Director of 
                                the Office of Thrift Supervision'' and 
                                inserting ``of the Comptroller of the 
                                Currency and orders of the Corporation 
                                and the Comptroller of the Currency'';
                          (ii) in paragraph (2)--
                                    (I) in subparagraph (A), by striking 
                                ``Director of the Office of Thrift 
                                Supervision'' and inserting 
                                ``Comptroller of the Currency, as 
                                appropriate,''; and
                                    (II) in subparagraph (B)--
                                            (aa) in the matter before 
                                        clause (i), by striking 
                                        ``Director of the Office of 
                                        Thrift Supervision'' and 
                                        inserting ``Corporation or the 
                                        Comptroller of the Currency, as 
                                        appropriate,''; and
                                            (bb) in the matter following 
                                        clause (ii)--
                                                (AA) in the first 
                                            sentence, by striking 
                                            ``Director of the Office of 
                                            Thrift Supervision'' and 
                                            inserting ``Office of the 
                                            Comptroller of the Currency, 
                                            as appropriate,''; and
                                                (BB) by striking the 
                                            second sentence and 
                                            inserting the following: 
                                            ``The Corporation or the 
                                            Comptroller of the Currency, 
                                            as appropriate, may take any 
                                            other corrective measures 
                                            with respect to the 
                                            subsidiary, including the 
                                            authority to require the 
                                            subsidiary to terminate the 
                                            activities or operations 
                                            posing such risks, as the 
                                            Corporation or the 
                                            Comptroller of the Currency, 
                                            respectively, may deem 
                                            appropriate.''; and
                          (iii) in paragraph (3)--
                                    (I) in subparagraph (A), in the 
                                second sentence--
                                            (aa) by inserting ``, in the 
                                        case of a Federal savings 
                                        association,'' before ``consult 
                                        with''; and
                                            (bb) by striking ``Director 
                                        of the Office of Thrift 
                                        Supervision'' and inserting 
                                        ``Comptroller of the Currency''; 
                                        and
                                    (II) in subparagraph (B)--
                                            (aa) in the subparagraph 
                                        heading, by striking 
                                        ``Director'' and inserting 
                                        ``Comptroller of the currency'';
                                            (bb) by striking ``Office of 
                                        Thrift Supervision'' and 
                                        inserting ``Comptroller of the 
                                        Currency'';
                                            (cc) by inserting a comma 
                                        after ``soundness''; and
                                            (dd) by inserting ``as to 
                                        Federal savings associations'' 
                                        after ``compliance'';
            (8) in section 19(e) (12 U.S.C. 1829(e))--

[[Page 124 STAT. 1555]]

                    (A) in paragraph (1), by striking ``Director of the 
                Office of Thrift Supervision'' and inserting ``Board of 
                Governors of the Federal Reserve System''; and
                    (B) in paragraph (2), by striking ``Director of the 
                Office of Thrift Supervision'' and inserting ``Board of 
                Governors of the Federal Reserve System'';
            (9) in section 28 (12 U.S.C. 1831e)--
                    (A) in subsection (e)--
                          (i) in paragraph (2)--
                                    (I) in subparagraph (A)(ii), by 
                                striking ``Director of the Office of 
                                Thrift Supervision'' and inserting 
                                ``Comptroller of the Currency or the 
                                Corporation, as appropriate'';
                                    (II) in subparagraph (C), by 
                                striking ``Director of the Office of 
                                Thrift Supervision'' and inserting 
                                ``Comptroller of the Currency or the 
                                Corporation, as appropriate,''; and
                                    (III) in subparagraph (F), by 
                                striking ``Director of the Office of 
                                Thrift Supervision'' and inserting 
                                ``Comptroller of the Currency or the 
                                Corporation, as appropriate''; and
                          (ii) in paragraph (3)--
                                    (I) in subparagraph (A), by striking 
                                ``Director of the Office of Thrift 
                                Supervision'' and inserting 
                                ``Comptroller of the Currency or the 
                                Corporation, as appropriate''; and
                                    (II) in subparagraph (B), by 
                                striking ``Director of the Office of 
                                Thrift Supervision'' and inserting 
                                ``Comptroller of the Currency or the 
                                Corporation, as appropriate,''; and
                    (B) in subsection (h)(2), by striking ``Director of 
                the Office of Thrift Supervision'' and inserting 
                ``Comptroller of the Currency, of the Corporation,''; 
                and
            (10) in section 33(e) (12 U.S.C. 1831j(e)), by striking 
        ``Federal Housing Finance Board, the Comptroller of the 
        Currency, and the Director of the Office of Thrift Supervision'' 
        and inserting ``Federal Housing Finance Agency and the 
        Comptroller of the Currency''.
SEC. 364. FEDERAL HOME LOAN BANK ACT.

    (a) Repeal <<NOTE: 12 USC 1438 note. Effective date.>> of Section 
18(c).--Effective 90 days after the transfer date, section 18(c) of the 
Federal Home Loan Bank Act (12 U.S.C. 1438(c)) is repealed.

    (b) Repeal of Section 21A.--Section 21A of the Federal Home Loan 
Bank Act (12 U.S.C. 1441a) is repealed.
SEC. 365. FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND 
                        SOUNDNESS ACT OF 1992.

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended--
            (1) in section 1315(b) (12 U.S.C. 4515(b)), by striking 
        ``the Federal Deposit Insurance Corporation, and the Office of 
        Thrift Supervision.'' and inserting ``and the Federal Deposit 
        Insurance Corporation.''; and
            (2) in section 1317(c) (12 U.S.C. 4517(c)), by striking 
        ``the Federal Deposit Insurance Corporation, or the Director of 
        the Office of Thrift Supervision'' and inserting ``or the 
        Federal Deposit Insurance Corporation''.

[[Page 124 STAT. 1556]]

SEC. 366. FEDERAL RESERVE ACT.

    The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended--
            (1) in section 11(a)(2) (12 U.S.C. 248(a)(2))--
                    (A) by inserting ``State savings associations that 
                are insured depository institutions (as defined in 
                section 3 of the Federal Deposit Insurance Act),'' after 
                ``case of insured'';
                    (B) by striking ``Director of the Office of Thrift 
                Supervision'' and inserting ``Comptroller of the 
                Currency'';
                    (C) by inserting ``Federal'' before ``savings 
                association which''; and
                    (D) by striking ``savings and loan association'' and 
                inserting ``savings association''; and
            (2) in section 19(b) (12 U.S.C. 461(b))--
                    (A) in paragraph (1)(F), by striking ``Director of 
                the Office of Thrift Supervision'' and inserting 
                ``Comptroller of the Currency''; and
                    (B) in paragraph (4)(B), by striking ``Director of 
                the Office of Thrift Supervision'' and inserting 
                ``Comptroller of the Currency''.
SEC. 367. FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT 
                        ACT OF 1989.

    The Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 is amended--
            (1) in section 203 (12 U.S.C. 1812 note), by striking 
        subsection (b);
            (2) in section 302(1) (12 U.S.C. 1467a note), by striking 
        ``Director of the Office of Thrift Supervision'' and inserting 
        ``Comptroller of the Currency'';
            (3) in section 305(12 U.S.C. 1464 note), by striking 
        subsection (b);
            (4) in section 308 (12 U.S.C. 1463 note)--
                    (A) in subsection (a), by striking ``Director of the 
                Office of Thrift Supervision'' and inserting ``Chairman 
                of the Board of Governors of the Federal Reserve System, 
                the Comptroller of the Currency, the Chairman of the 
                National Credit Union Administration,''; and
                    (B) by adding at the end the following new 
                subsection:

    ``(c) Reports.--The Secretary of the Treasury, the Chairman of the 
Board of Governors of the Federal Reserve System, the Comptroller of the 
Currency, the Chairman of the National Credit Union Administration, and 
the Chairperson of Board of Directors of the Federal Deposit Insurance 
Corporation shall each submit an annual report to the Congress 
containing a description of actions taken to carry out this section.'';
            (5) in section 402 (12 U.S.C. 1437 note)--
                    (A) in subsection (a), by striking ``Director of the 
                Office of Thrift Supervision'' and inserting 
                ``Comptroller of the Currency'';
                    (B) by striking subsection (b);
                    (C) in subsection (e)--
                          (i) in paragraph (1), by striking ``Office of 
                      Thrift Supervision'' and inserting ``Comptroller 
                      of the Currency''; and
                          (ii) in each of paragraphs (2), (3), and (4), 
                      by striking ``Director of the Office of Thrift 
                      Supervision''

[[Page 124 STAT. 1557]]

                      each place that term appears and inserting 
                      ``Comptroller of the Currency''; and
                    (D) by striking ``Federal Housing Finance Board'' 
                each place that term appears and inserting ``Federal 
                Housing Finance Agency'';
            (6) in section 1103(a) (12 U.S.C. 3332(a)), by striking 
        ``and the Resolution Trust Corporation'';
            (7) in section 1205(b) (12 U.S.C. 1818 note)--
                    (A) in paragraph (1)--
                          (i) by striking subparagraph (B); and
                          (ii) by redesignating subparagraphs (C) 
                      through (F) as subparagraphs (B) through (E), 
                      respectively; and
                    (B) in paragraph (2), by striking ``paragraph 
                (1)(F)'' and inserting ``paragraph (1)(E)'';
            (8) in section 1206 (12 U.S.C. 1833b)--
                    (A) by striking ``Board, the Oversight Board of the 
                Resolution Trust Corporation'' and inserting ``Agency, 
                and''; and
                    (B) by striking ``, and the Office of Thrift 
                Supervision'';
            (9) in section 1216 (12 U.S.C. 1833e)--
                    (A) in subsection (a)--
                          (i) in paragraph (3), by adding ``and'' at the 
                      end;
                          (ii) in paragraph (4), by striking the 
                      semicolon at the end and inserting a period;
                          (iii) by striking paragraphs (2), (5), and 
                      (6); and
                          (iv) by redesignating paragraphs (3) and (4), 
                      as paragraphs (2) and (3), respectively;
                    (B) in subsection (c)--
                          (i) by striking ``the Director of the Office 
                      of Thrift Supervision,'' and inserting ``and''; 
                      and
                          (ii) by striking ``the Thrift Depositor 
                      Protection Oversight Board of the Resolution Trust 
                      Corporation, and the Resolution Trust 
                      Corporation''; and
                    (C) in subsection (d)--
                          (i) by striking paragraphs (3), (5), and (6); 
                      and
                          (ii) by redesignating paragraphs (4), (7), and 
                      (8) as paragraphs (3), (4), and (5), respectively.
SEC. 368. FLOOD DISASTER PROTECTION ACT OF 1973.

    Section 3(a)(5) of the Flood Disaster Protection Act of 1973 (42 
U.S.C. 4003(a)(5)) is amended by striking ``, the Office of Thrift 
Supervision''.
SEC. 369. HOME OWNERS' LOAN ACT.

    The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended--
            (1) in section 1 (12 U.S.C. 1461), by striking the table of 
        contents;
            (2) in section 2 (12 U.S.C. 1462), as amended by this Act--
                    (A) by striking paragraphs (1) and (3);
                    (B) by redesignating paragraph (2) as paragraph (1);
                    (C) by redesignating paragraphs (4) through (9) as 
                paragraphs (2) through (7), respectively; and
                    (D) by <<NOTE: Definitions.>> adding at the end the 
                following:

[[Page 124 STAT. 1558]]

            ``(8) Board.--The term `Board', other than in the context of 
        the Board of Directors of the Corporation, means the Board of 
        Governors of the Federal Reserve System.
            ``(9) Comptroller.--The term `Comptroller' means the 
        Comptroller of the Currency.'';
            (3) in section 3 (12 U.S.C. 1462a)--
                    (A) by striking the section heading and inserting 
                the following:
``SEC. 3. ADMINISTRATIVE PROVISIONS.'';
                    (B) by striking subsections (a), (b), (c), (d), (g), 
                (h), (i), and (j);
                    (C) by redesignating subsections (e) and (f) as 
                subsections (a) and (b), respectively;
                    (D) in subsection (a), as so redesignated--
                          (i) in the heading by striking ``of the 
                      Director''; and
                          (ii) in the matter preceding paragraph (1), by 
                      striking ``The Director'' and inserting ``In 
                      accordance with subtitle A of title III of the 
                      Dodd-Frank Wall Street Reform and Consumer 
                      Protection Act, the appropriate Federal banking 
                      agency''; and
                    (E) in subsection (b), as so redesignated, by 
                striking ``Director'' and inserting ``appropriate 
                Federal banking agency'';
            (4) in section 4 (12 U.S.C. 1463)--
                    (A) in subsection (a)--
                          (i) in the subsection heading, by striking 
                      ``Federal'';
                          (ii) by striking paragraphs (1) and (2) and 
                      inserting the following:
            ``(1) Examination and safe and sound operation.--
                    ``(A) Federal savings associations.--The Comptroller 
                shall provide for the examination and safe and sound 
                operation of Federal savings associations.
                    ``(B) State savings associations.--The Corporation 
                shall provide for the examination and safe and sound 
                operation of State savings associations.
            ``(2) Regulations for savings associations.--The Comptroller 
        may prescribe regulations with respect to savings associations, 
        as the Comptroller determines to be appropriate to carry out the 
        purposes of this Act.''; and
                          (iii) in paragraph (3), by striking 
                      ``Director'' each place that term appears and 
                      inserting ``Comptroller and the Corporation'';
                    (B) in subsection (b)--
                          (i) in paragraph (2)--
                                    (I) in subparagraph (A), by adding 
                                ``and'' at the end;
                                    (II) in subparagraph (B), by 
                                striking ``; and'' and inserting a 
                                period; and
                                    (III) by striking subparagraph (C); 
                                and
                          (ii) by striking ``Director'' each place that 
                      term appears and inserting ``Comptroller'';
                    (C) in subsection (c)--

[[Page 124 STAT. 1559]]

                          (i) by striking ``All regulations and policies 
                      of the Director'' and inserting ``The regulations 
                      of the Comptroller and the policies of the 
                      Comptroller and the Corporation''; and
                          (ii) by striking ``of the Currency'';
                    (D) in subsection (e)(5), by striking ``Director'' 
                and inserting ``Comptroller'';
                    (E) in subsection (f), by striking ``Director'' each 
                place that term appears and inserting ``appropriate 
                Federal banking agency''; and
                    (F) in subsection (h), by striking ``Director'' each 
                place that term appears and inserting ``appropriate 
                Federal banking agency'';
            (5) in section 5 (12 U.S.C. 1464)--
                    (A) in subsection (a), by striking ``Director'', 
                each place such term appears and inserting ``Comptroller 
                of the Currency'';
                    (B) in subsection (b), by striking ``Director'', 
                each place such term appears and inserting ``Comptroller 
                of the Currency'';
                    (C) in subsection (c)--
                          (i) in paragraph (5)--
                                    (I) in subparagraph (A), by striking 
                                ``Director'' and inserting ``appropriate 
                                Federal banking agency''; and
                                    (II) in subparagraph (B)--
                                            (aa) by striking ``The 
                                        Director'' and inserting ``The 
                                        appropriate Federal banking 
                                        agency''; and
                                            (bb) by striking ``the 
                                        Director'' and inserting ``the 
                                        appropriate Federal banking 
                                        agency'';
                    (D) in subsection (d)--
                          (i) in paragraph (1)--
                                    (I) in subparagraph (A)--
                                            (aa) in the first sentence, 
                                        by striking ``Director'' and 
                                        inserting ``appropriate Federal 
                                        banking agency'';
                                            (bb) in the second 
                                        sentence--
                                                (AA) by striking 
                                            ``Director's own name and 
                                            through the Director's own 
                                            attorneys'' and inserting 
                                            ``name of the appropriate 
                                            Federal banking agency and 
                                            through the attorneys of the 
                                            appropriate Federal banking 
                                            agency''; and
                                                (BB) by striking 
                                            ``Director'' each place that 
                                            term appears and inserting 
                                            ``appropriate Federal 
                                            banking agency''; and
                                            (cc) in the third sentence, 
                                        by striking ``Director'' each 
                                        place that term appears and 
                                        inserting ``Comptroller'';
                                    (II) in subparagraph (B)--
                                            (aa) in clauses (i) through 
                                        (iv), by striking ``Director'' 
                                        each place that term appears and 
                                        inserting ``appropriate Federal 
                                        banking agency'';
                                    (III) in clause (v)--

[[Page 124 STAT. 1560]]

                                            (aa) in the matter preceding 
                                        subclause (I), by striking 
                                        ``Director'' and inserting 
                                        ``appropriate Federal banking 
                                        agency'';
                                            (bb) in subclause (II), by 
                                        striking ``subpenas'' and 
                                        inserting ``subpoenas''; and
                                            (cc) in the matter following 
                                        subclause (II), by striking 
                                        ``subpena'' and inserting 
                                        ``subpoena'';
                                    (IV) in clause (vi)--
                                            (aa) in the first sentence, 
                                        by striking ``Director'' and 
                                        inserting ``appropriate Federal 
                                        banking agency''; and
                                            (bb) in the second sentence, 
                                        by striking ``Director'' and 
                                        inserting ``Comptroller'';
                                    (V) in clause (vii)--
                                            (aa) in the first sentence, 
                                        by striking ``subpena'' and 
                                        inserting ``subpoena'';
                                            (bb) in the second sentence, 
                                        by striking ``subpenaed'' and 
                                        inserting ``subpoenaed''; and
                                            (cc) in the third sentence, 
                                        by striking ``Director'' and 
                                        inserting ``appropriate Federal 
                                        banking agency'';
                          (ii) in paragraph (2)--
                                    (I) in subparagraph (A)--
                                            (aa) by striking ``Director 
                                        of the Office of Thrift 
                                        Supervision'' and inserting 
                                        ``appropriate Federal banking 
                                        agency'';
                                            (bb) by striking ``any 
                                        insured savings association'' 
                                        and inserting ``an insured 
                                        savings association''; and
                                            (cc) by striking ``Director 
                                        determines, in the Director's 
                                        discretion'' and inserting 
                                        ``appropriate Federal banking 
                                        agency determines, in the 
                                        discretion of the appropriate 
                                        Federal banking agency'';
                                    (II) in subparagraph (B), by 
                                striking ``Director'' each place that 
                                term appears and inserting ``appropriate 
                                Federal banking agency'';
                                    (III) in subparagraphs (C) and (D), 
                                by striking ``Director'' and inserting 
                                ``appropriate Federal banking agency'';
                                    (IV) in subparagraph (E)--
                                            (aa) in clause (ii)--
                                                (AA) in the clause 
                                            heading, by striking ``or 
                                            rtc''; and
                                                (BB) by striking ``or 
                                            the Resolution Trust 
                                            Corporation, as 
                                            appropriate,'' each place 
                                            that term appears; and
                                            (bb) by striking 
                                        ``Director'' each place that 
                                        term appears and inserting 
                                        ``appropriate Federal banking 
                                        agency''; and
                          (iii) in paragraph (3)--
                                    (I) in subparagraph (A), by striking 
                                ``Director'' each place that term 
                                appears and inserting ``Comptroller''; 
                                and
                                    (II) in subparagraph (B)--

[[Page 124 STAT. 1561]]

                                            (aa) in the subparagraph 
                                        heading, by striking ``or rtc'';
                                            (bb) by striking 
                                        ``Corporation or the Resolution 
                                        Trust''; and
                                            (cc) by striking 
                                        ``Director'' and inserting 
                                        ``Comptroller'';
                          (iv) in paragraph (4), by striking 
                      ``Director'' and inserting ``appropriate Federal 
                      banking agency'';
                          (v) in paragraph (6)--
                                    (I) in subparagraph (A), by striking 
                                ``Director'' and inserting 
                                ``Comptroller''; and
                                    (II) in subparagraphs (B) and (C), 
                                by striking ``Director'' each place that 
                                term appears and inserting ``appropriate 
                                Federal banking agency'';
                          (vi) in paragraph (7)--
                                    (I) in subparagraphs (A), (B), and 
                                (D), by striking ``Director'' each place 
                                that term appears and inserting 
                                ``appropriate Federal banking agency'';
                                    (II) in subparagraph (C), by 
                                striking ``Director'' and inserting 
                                ``Federal Deposit Insurance Corporation 
                                or the Comptroller, as appropriate,''; 
                                and
                                    (III) by striking subparagraph (E) 
                                and inserting the following:
                    ``(E) Administration by the comptroller and the 
                corporation.--The Comptroller may issue such 
                regulations, and the appropriate Federal banking agency 
                may issue such orders, including those issued pursuant 
                to section 8 of the Federal Deposit Insurance Act, as 
                may be necessary to administer and carry out this 
                paragraph and to prevent evasion of this paragraph.'';
                    (E) in subsection (e)(2), strike ``Director'' and 
                insert ``Comptroller'';
                    (F) in subsection (i)--
                          (i) by striking ``Director'', each place such 
                      term appears, and inserting ``Comptroller'';
                          (ii) in paragraph (2), in the heading, by 
                      striking ``director'' and inserting 
                      ``Comptroller'';
                          (iii) in paragraph (5)(A), by striking ``of 
                      the Currency''; and
                          (iv) except as provided in clauses (i) through 
                      (iii), by striking ``Director'' each place such 
                      term appears and inserting ``Comptroller'';
                    (G) in subsection (o)--
                          (i) in paragraph (1), by striking ``Director'' 
                      and inserting ``Comptroller''; and
                          (ii) in paragraph (2)(B), by striking 
                      ``Director's determination'' and inserting 
                      ``determination of the Comptroller'';
                    (H) in subsections (m), (n), (o), and (p), by 
                striking ``Director'', each place such term appears, and 
                inserting ``Comptroller'';
                    (I) in subsection (q)--
                          (i) in paragraph (6), by striking ``of 
                      Governors of the Federal Reserve System'';
                          (ii) by striking ``Director'' each place that 
                      term appears and inserting ``Board''; and

[[Page 124 STAT. 1562]]

                          (iii) by inserting ``in consultation with the 
                      Comptroller and the Corporation,'' before 
                      ``considers'';
                    (J) in subsection (r)(3), by striking ``Director'' 
                and inserting ``Comptroller of the Currency'';
                    (K) in subsection (s)--
                          (i) in paragraph (1), strike ``Director'' and 
                      insert ``Comptroller of the Currency'';
                          (ii) in paragraph (2), strike ``Director'' and 
                      insert ``Comptroller of the Currency'';
                          (iii) in paragraph (3), by striking 
                      ``Director's discretion, the Director'' and 
                      inserting ``discretion of the appropriate Federal 
                      banking agency, the appropriate Federal banking 
                      agency,'';
                          (iv) in paragraph (4), by striking 
                      ``Director'' each place that term appears and 
                      inserting ``appropriate Federal banking agency''; 
                      and
                          (v) in paragraph (5)--
                                    (I) by striking ``Director'', each 
                                place such term appears, and inserting 
                                ``appropriate Federal banking agency''; 
                                and
                                    (II) by striking ``Director's 
                                approval'' and inserting ``approval of 
                                the appropriate Federal banking 
                                agency'';
                    (L) in subsection (t)--
                          (i) in paragraph (1), by striking subparagraph 
                      (D);
                          (ii) by striking paragraph (3) and inserting 
                      the following:
            ``(3) [Repealed].'';
                          (iii) in paragraph (5)--
                                    (I) in subparagraph (B), by striking 
                                ``Corporation, in its sole discretion'' 
                                and inserting ``appropriate Federal 
                                banking agency, in the sole discretion 
                                of the appropriate Federal banking 
                                agency''; and
                                    (II) by striking subparagraph (D);
                          (iv) in paragraph (6)--
                                    (I) by striking subparagraph (A) and 
                                inserting the following:
                    ``(A) [Reserved].'';
                                    (II) in subparagraph (B), by 
                                striking ``Director'' each place that 
                                term appears and inserting ``appropriate 
                                Federal banking agency'';
                                    (III) in subparagraph (C)--
                                            (aa) in clause (i), by 
                                        striking ``Director's prior 
                                        approval'' and inserting ``prior 
                                        approval of the appropriate 
                                        Federal banking agency'';
                                            (bb) in clause (ii), by 
                                        striking ``Director's 
                                        discretion'' and inserting 
                                        ``discretion of the appropriate 
                                        Federal banking agency''; and
                                            (cc) by striking 
                                        ``Director'' each place that 
                                        term appears and inserting 
                                        ``appropriate Federal banking 
                                        agency'';
                                    (IV) in subparagraph (E), by 
                                striking ``Director shall'' and 
                                inserting ``appropriate Federal banking 
                                agency may''; and
                                    (V) in subparagraph (F), by striking 
                                ``Director'' and all that follows 
                                through the end of the

[[Page 124 STAT. 1563]]

                                subparagraph and inserting ``appropriate 
                                Federal banking agency under this Act or 
                                any other provision of law.'';
                          (v) in paragraph (7), by striking ``Director'' 
                      each place that term appears and inserting 
                      ``appropriate Federal banking agency'';
                          (vi) by striking paragraph (8) and inserting 
                      the following:
            ``(8) [Repealed].'';
                          (vii) in paragraph (9)--
                                    (I) in subparagraph (A), by striking 
                                ``Director'' and inserting 
                                ``Comptroller'';
                                    (II) in subparagraph (C), by 
                                striking ``of the Currency''; and
                                    (III) by striking subparagraph (B) 
                                and redesignating subparagraphs (C) and 
                                (D) as subparagraphs (B) and (C), 
                                respectively; and
                          (viii) except as provided in clauses (i) 
                      through (vii), by striking ``Director'' each place 
                      that term appears and inserting ``appropriate 
                      Federal banking agency'';
                    (M) in subsection (u), by striking ``Director'' each 
                place that term appears and inserting ``appropriate 
                Federal banking agency'';
                    (N) in subsection (v)--
                          (i) in paragraph (2), by striking ``Director's 
                      determinations'' and inserting ``determinations of 
                      the appropriate Federal banking agency''; and
                          (ii) by striking ``Director'' each place that 
                      term appears and inserting ``appropriate Federal 
                      banking agency'';
                    (O) in subsection (w)(1)--
                          (i) in subparagraph (A)(II), by striking 
                      ``Director's intention'' and inserting ``intention 
                      of the Comptroller''; and
                          (ii) in subparagraph (B), by striking 
                      ``Director's intention'' and inserting ``intention 
                      of the Comptroller''; and
                    (P) except as provided in subparagraphs (A) through 
                (J), by striking ``Director'' each place that term 
                appears and inserting ``Comptroller'';
            (6) in section 8 (12 U.S.C. 1466a), by striking ``Director'' 
        each place that term appears and inserting ``Comptroller'';
            (7) in section 9 (12 U.S.C. 1467)--
                    (A) in subsection (a), by striking ``assessed by the 
                Director'' and all that follows through the end of the 
                subsection and inserting the following: ``assessed by--
            ``(1) the Comptroller, against each such Federal savings 
        association, as the Comptroller deems necessary or appropriate; 
        and
            ``(2) the Corporation, against each such State savings 
        association, as the Corporation deems necessary or 
        appropriate.'';
                    (B) in subsection (b), by striking ``Director'', 
                each place such term appears, and inserting 
                ``Comptroller or Corporation, as appropriate'';
                    (C) in subsection (e)--

[[Page 124 STAT. 1564]]

                          (i) by striking ``Only the Director'' and 
                      inserting ``The Comptroller''; and
                          (ii) by striking ``Director's designee'' and 
                      inserting ``designee of the Comptroller'';
                    (D) by striking subsection (f) and inserting the 
                following:

    ``(f) [Reserved].'';
                    (E) in subsection (g)--
                          (i) in paragraph (1), by striking ``Director'' 
                      and inserting ``appropriate Federal banking 
                      agency''; and
                          (ii) in paragraph (2), by striking ``Director, 
                      or the Corporation, as the case may be,'' and 
                      inserting ``appropriate Federal banking agency for 
                      the savings association'';
                    (F) in subsection (i), by striking ``Director'' each 
                place that term appears and inserting ``appropriate 
                Federal banking agency'';
                    (G) in subsection (j), by striking ``Director's sole 
                discretion'' and inserting ``sole discretion of the 
                appropriate Federal banking agency'';
                    (H) in subsection (k), by striking ``Director may 
                assess against institutions for which the Director is 
                the appropriate Federal banking agency, as defined in 
                section 3 of the Federal Deposit Insurance Act,'' and 
                inserting ``appropriate Federal banking agency may 
                assess against an institution''; and
                    (I) except as provided in subparagraphs (A) through 
                (G), by striking ``Director'' each place that term 
                appears and inserting ``appropriate Federal banking 
                agency'';
            (8) in section 10 (12 U.S.C. 1467a)--
                    (A) in subsection (a)(1), by striking ``Director'' 
                each place that term appears and inserting ``appropriate 
                Federal banking agency'';
                    (B) in subsection (b)--
                          (i) in paragraph (2), by striking ``and the 
                      regional office of the Director of the district in 
                      which its principal office is located,''; and
                          (ii) in paragraph (6), by striking 
                      ``Director's own motion or application'' and 
                      inserting ``motion or application of the Board'';
                    (C) in subsection (c)--
                          (i) in paragraph (2)(F), by striking ``of 
                      Governors of the Federal Reserve System'';
                          (ii) in paragraph (4)(B), in the subparagraph 
                      heading, by striking ``by director'';
                          (iii) in paragraph (6)(D), in the subparagraph 
                      heading, by striking ``by director''; and
                          (iv) in paragraph (9)(E), by inserting ``(in 
                      consultation with the appropriate Federal banking 
                      agency)'' after ``including a determination'';
                    (D) in subsection (g)(5)(B), by striking ``the 
                Director's discretion'' and inserting ``the discretion 
                of the Board'';
                    (E) in subsection (l), by striking ``Director'' each 
                place that term appears and inserting ``appropriate 
                Federal banking agency'';
                    (F) in subsection (m), by striking ``Director'' and 
                inserting ``appropriate Federal banking agency'';

[[Page 124 STAT. 1565]]

                    (G) in subsection (p)--
                          (i) in paragraph (1)--
                                    (I) by striking ``Director 
                                determines'' the 1st place such term 
                                appears and inserting ``Board or the 
                                appropriate Federal banking agency for 
                                the savings association determines'';
                                    (II) by striking ``Director may'' 
                                and inserting ``Board may''; and
                                    (III) by striking ``Director 
                                determines'' the 2nd place such term 
                                appears and inserting ``Board, in 
                                consultation with the appropriate 
                                Federal banking agency for the savings 
                                association determines''; and
                          (ii) in paragraph (2), by striking 
                      ``Director'', each place such term appears, and 
                      inserting ``Board'';
                    (H) in subsection (q), by striking ``Director'', 
                each place such term appears, and inserting ``Board'';
                    (I) in subsection (r), by striking ``Director'', 
                each place such term appears, and inserting ``Board or 
                appropriate Federal banking agency'';
                    (J) in subsection (s)--
                          (i) in paragraph (2)--
                                    (I) in subparagraph (B)(ii), by 
                                striking ``Director's judgment'' and 
                                inserting ``judgment of the appropriate 
                                Federal banking agency for the savings 
                                association''; and
                                    (II) by striking ``Director'' each 
                                place that term appears and inserting 
                                ``appropriate Federal banking agency for 
                                the savings association''; and
                          (ii) in paragraph (4), by striking 
                      ``Director'' and inserting ``Comptroller''; and
                    (K) except as provided in subparagraphs (A) through 
                (J), by striking ``Director'' each place that term 
                appears and inserting ``Board'';
            (9) in section 11 (12 U.S.C. 1468), by striking ``Director'' 
        each place that term appears and inserting ``appropriate Federal 
        banking agency'';
            (10) in section 12 (12 U.S.C. 1468a), by striking ``the 
        Director'' and inserting ``a Federal banking agency''; and
            (11) in section 13 (12 U.S.C. 1468a) is <<NOTE: 12 USC 
        1468b.>> amended by striking ``Director'' and inserting ``a 
        Federal banking agency''.
SEC. 370. HOUSING ACT OF 1948.

    Section 502(c) of the Housing Act of 1948 (12 U.S.C. 1701c(c)) is 
amended--
            (1) in the matter preceding paragraph (1), by striking ``and 
        the Director of the Office of Thrift Supervision'' and inserting 
        ``, the Comptroller of the Currency, and the Federal Deposit 
        Insurance Corporation''; and
            (2) in paragraph (3), by striking ``Board'' and inserting 
        ``Agency''.
SEC. 371. <<NOTE: 12 USC 1707 note.>> HOUSING AND COMMUNITY 
                        DEVELOPMENT ACT OF 1992.

    Section 543 of the Housing and Community Development Act of 1992 
(Public Law 102-550; 106 Stat. 3798) is amended--
            (1) in subsection (c)(1)--
                    (A) by striking subparagraphs (D) through (F); and

[[Page 124 STAT. 1566]]

                    (B) by redesignating subparagraphs (G) and (H) as 
                subparagraphs (D) and (E), respectively; and
            (2) in subsection (f)--
                    (A) in paragraph (2), by striking ``the Office of 
                Thrift Supervision,'' each place that term appears; and
                    (B) in paragraph (3)--
                          (i) in the matter preceding subparagraph (A), 
                      by striking ``the Office of Thrift Supervision,''; 
                      and
                          (ii) in subparagraph (D), by striking ``Office 
                      of Thrift Supervision,''.
SEC. 372. HOUSING AND URBAN-RURAL RECOVERY ACT OF 1983.

    Section 469 of the Housing and Urban-Rural Recovery Act of 1983 (12 
U.S.C. 1701p-1) is amended in the first sentence, by striking ``Federal 
Home Loan Bank Board'' and inserting ``Federal Housing Finance Agency''.
SEC. 373. NATIONAL HOUSING ACT.

    Section 202(f) of the National Housing Act (12 U.S.C. 1708(f)) is 
amended--
            (1) by striking paragraph (5) and inserting the following:
            ``(5) if the mortgagee is a national bank, a subsidiary or 
        affiliate of such bank, a Federal savings association or a 
        subsidiary or affiliate of a savings association, the 
        Comptroller of the Currency;'';
            (2) in paragraph (6), by adding ``and'' at the end;
            (3) in paragraph (7)--
                    (A) by inserting ``or State savings association'' 
                after ``State bank''; and
                    (B) by striking ``; and'' and inserting a period; 
                and
            (4) by striking paragraph (8).
SEC. 374. NEIGHBORHOOD REINVESTMENT CORPORATION ACT.

    Section 606(c)(3) of the Neighborhood Reinvestment Corporation Act 
(42 U.S.C. 8105(c)(3)) is amended by striking ``Federal Home Loan Bank 
Board'' and inserting ``Federal Housing Finance Agency''.
SEC. 375. PUBLIC LAW 93-100.

    Section 5(d) of Public Law 93-100 (12 U.S.C. 1470(a)) is amended--
            (1) in paragraph (1), by striking ``Federal Savings and Loan 
        Insurance Corporation with respect to insured institutions, the 
        Board of Governors of the Federal Reserve System with respect to 
        State member insured banks, and the Federal Deposit Insurance 
        Corporation with respect to State nonmember insured banks'' and 
        inserting ``appropriate Federal banking agency, with respect to 
        the institutions subject to the jurisdiction of each such 
        agency,''; and
            (2) in paragraph (2), by striking ``supervisory'' and 
        inserting ``banking''.
SEC. 376. SECURITIES EXCHANGE ACT OF 1934.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended--
            (1) in section 3(a)(34) (15 U.S.C. 78c(a)(34))--
                    (A) in subparagraph (A)--

[[Page 124 STAT. 1567]]

                          (i) in clause (i), by striking ``or a 
                      subsidiary or a department or division of any such 
                      bank'' and inserting ``a subsidiary or a 
                      department or division of any such bank, a Federal 
                      savings association (as defined in section 3(b)(2) 
                      of the Federal Deposit Insurance Act (12 U.S.C. 
                      1813(b)(2))), the deposits of which are insured by 
                      the Federal Deposit Insurance Corporation, or a 
                      subsidiary or department or division of any such 
                      Federal savings association'';
                          (ii) in clause (ii), by striking ``or a 
                      subsidiary or a department or division of such 
                      subsidiary'' and inserting ``a subsidiary or a 
                      department or division of such subsidiary, or a 
                      savings and loan holding company'';
                          (iii) in clause (iii), by striking ``or a 
                      subsidiary or department or division thereof;'' 
                      and inserting ``a subsidiary or department or 
                      division of any such bank, a State savings 
                      association (as defined in section 3(b)(3) of the 
                      Federal Deposit Insurance Act (12 U.S.C. 
                      1813(b)(3))), the deposits of which are insured by 
                      the Federal Deposit Insurance Corporation, or a 
                      subsidiary or a department or division of any such 
                      State savings association; and'';
                          (iv) by striking clause (iv); and
                          (v) by redesignating clause (v) as clause 
                      (iv);
                    (B) in subparagraph (B)--
                          (i) in clause (i), by striking ``or a 
                      subsidiary of any such bank'' and inserting ``a 
                      subsidiary of any such bank, a Federal savings 
                      association (as defined in section 3(b)(2) of the 
                      Federal Deposit Insurance Act (12 U.S.C. 
                      1813(b)(2))), the deposits of which are insured by 
                      the Federal Deposit Insurance Corporation, or a 
                      subsidiary of any such Federal savings 
                      association'';
                          (ii) in clause (ii), by striking ``or a 
                      subsidiary of a bank holding company which is a 
                      bank other than a bank specified in clause (i), 
                      (iii), or (iv) of this subparagraph'' and 
                      inserting ``a subsidiary of a bank holding company 
                      that is a bank other than a bank specified in 
                      clause (i) or (iii) of this subparagraph, or a 
                      savings and loan holding company'';
                          (iii) in clause (iii), by striking ``or a 
                      subsidiary thereof;'' and inserting ``a subsidiary 
                      of any such bank, a State savings association (as 
                      defined in section 3(b)(3) of the Federal Deposit 
                      Insurance Act (12 U.S.C. 1813(b)(3))), the 
                      deposits of which are insured by the Federal 
                      Deposit Insurance Corporation, or a subsidiary of 
                      any such State savings association; and'';
                          (iv) by striking clause (iv); and
                          (v) by redesignating clause (v) as clause 
                      (iv);
                    (C) in subparagraph (C)--
                          (i) in clause (i), by striking ``bank'' and 
                      inserting ``bank or a Federal savings association 
                      (as defined in section 3(b)(2) of the Federal 
                      Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the 
                      deposits of which are insured by the Federal 
                      Deposit Insurance Corporation'';

[[Page 124 STAT. 1568]]

                          (ii) in clause (ii), by striking ``or a 
                      subsidiary of a bank holding company which is a 
                      bank other than a bank specified in clause (i), 
                      (iii), or (iv) of this subparagraph'' and 
                      inserting ``a subsidiary of a bank holding company 
                      that is a bank other than a bank specified in 
                      clause (i) or (iii) of this subparagraph, or a 
                      savings and loan holding company'';
                          (iii) in clause (iii), by striking ``System)'' 
                      and inserting, ``System) or a State savings 
                      association (as defined in section 3(b)(3) of the 
                      Federal Deposit Insurance Act (12 U.S.C. 
                      1813(b)(3))), the deposits of which are insured by 
                      the Federal Deposit Insurance Corporation; and'';
                          (iv) by striking clause (iv); and
                          (v) by redesignating clause (v) as clause 
                      (iv);
                    (D) in subparagraph (D)--
                          (i) in clause (i), by inserting after ``bank'' 
                      the following: ``or a Federal savings association 
                      (as defined in section 3(b)(2) of the Federal 
                      Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the 
                      deposits of which are insured by the Federal 
                      Deposit Insurance Corporation'';
                          (ii) in clause (ii), by adding ``and'' at the 
                      end;
                          (iii) by striking clause (iii);
                          (iv) by redesignating clause (iv) as clause 
                      (iii); and
                          (v) in clause (iii), as so redesignated, by 
                      inserting after ``bank'' the following: ``or a 
                      State savings association (as defined in section 
                      3(b)(3) of the Federal Deposit Insurance Act (12 
                      U.S.C. 1813(b)(3))), the deposits of which are 
                      insured by the Federal Deposit Insurance 
                      Corporation'';
                    (E) in subparagraph (F)--
                          (i) in clause (i), by inserting after ``bank'' 
                      the following: ``or a Federal savings association 
                      (as defined in section 3(b)(2) of the Federal 
                      Deposit Insurance Act (12 U.S.C. 1813(b)(2))), the 
                      deposits of which are insured by the Federal 
                      Deposit Insurance Corporation'';
                          (ii) by striking clause (ii);
                          (iii) by redesignating clauses (iii), (iv), 
                      and (v) as clauses (ii), (iii), and (iv), 
                      respectively; and
                          (iv) in clause (iii), as so redesignated, by 
                      inserting before the semicolon the following: ``or 
                      a State savings association (as defined in section 
                      3(b)(3) of the Federal Deposit Insurance Act (12 
                      U.S.C. 1813(b)(3))), the deposits of which are 
                      insured by the Federal Deposit Insurance 
                      Corporation'';
                    (F) in subparagraph (G)--
                          (i) in clause (i), by inserting after 
                      ``national bank'' the following: ``, a Federal 
                      savings association (as defined in section 3(b)(2) 
                      of the Federal Deposit Insurance Act), the 
                      deposits of which are insured by the Federal 
                      Deposit Insurance Corporation,'';
                          (ii) in clause (iii)--
                                    (I) by inserting after ``bank)'' the 
                                following: ``, a State savings 
                                association (as defined in section 
                                3(b)(3) of the Federal Deposit Insurance 
                                Act), the deposits of which are insured 
                                by the Federal Deposit Insurance 
                                Corporation,''; and

[[Page 124 STAT. 1569]]

                                    (II) by adding ``and'' at the end;
                          (iii) by striking clause (iv); and
                          (iv) by redesignating clause (v) as clause 
                      (iv); and
                    (G) in the undesignated matter following 
                subparagraph (H), by striking ``, and the term `District 
                of Columbia savings and loan association' means any 
                association subject to examination and supervision by 
                the Office of Thrift Supervision under section 8 of the 
                Home Owners' Loan Act of 1933'';
            (2) in section 12(i) (15 U.S.C. 78l(i))--
                    (A) in paragraph (1), by inserting after ``national 
                banks'' the following: ``and Federal savings 
                associations, the accounts of which are insured by the 
                Federal Deposit Insurance Corporation'';
                    (B) by striking ``(3)'' and all that follows through 
                ``vested in the Office of Thrift Supervision'' and 
                inserting ``and (3) with respect to all other insured 
                banks and State savings associations, the accounts of 
                which are insured by the Federal Deposit Insurance 
                Corporation, are vested in the Federal Deposit Insurance 
                Corporation''; and
                    (C) in the second sentence, by striking ``the 
                Federal Deposit Insurance Corporation, and the Office of 
                Thrift Supervision'' and inserting ``and the Federal 
                Deposit Insurance Corporation'';
            (3) in section 15C(g)(1) (15 U.S.C. 78o-5(g)(1)), by 
        striking ``the Director of the Office of Thrift Supervision, the 
        Federal Savings and Loan Insurance Corporation,''; and
            (4) in section 23(b)(1) (15 U.S.C. 78w(b)(1)), by striking 
        ``, other than the Office of Thrift Supervision,''.
SEC. 377. TITLE 18, UNITED STATES CODE.

    Title 18, United States Code, is amended--
            (1) in section 212(c)(2)--
                    (A) by striking subparagraph (C); and
                    (B) by redesignating subparagraphs (D) through (H) 
                as subparagraphs (C) through (G), respectively;
            (2) in section 657, by striking ``Office of Thrift 
        Supervision, the Resolution Trust Corporation,'';
            (3) in section 981(a)(1)(D)--
                    (A) by striking ``Resolution Trust Corporation,''; 
                and
                    (B) by striking ``or the Office of Thrift 
                Supervision'';
            (4) in section 982(a)(3)--
                    (A) by striking ``Resolution Trust Corporation,''; 
                and
                    (B) by striking ``or the Office of Thrift 
                Supervision'';
            (5) in section 1006--
                    (A) by striking ``Office of Thrift Supervision,''; 
                and
                    (B) by striking ``the Resolution Trust 
                Corporation,'';
            (6) in section 1014--
                    (A) by striking ``the Office of Thrift 
                Supervision''; and
                    (B) by striking ``the Resolution Trust 
                Corporation,''; and
            (7) in section 1032(1)--
                    (A) by striking ``the Resolution Trust 
                Corporation,''; and
                    (B) by striking ``or the Director of the Office of 
                Thrift Supervision''.

[[Page 124 STAT. 1570]]

SEC. 378. TITLE 31, UNITED STATES CODE.

    Title 31, United States Code, is amended--
            (1) in section 321--
                    (A) in subsection (c)--
                          (i) in paragraph (1), by adding ``and'' at the 
                      end;
                          (ii) in paragraph (2), by striking ``; and'' 
                      and inserting a period; and
                          (iii) by striking paragraph (3); and
                    (B) by striking subsection (e); and
            (2) in section 714(a), by striking ``the Office of the 
        Comptroller of the Currency, and the Office of Thrift 
        Supervision.'' and inserting ``and the Office of the Comptroller 
        of the Currency.''.

     TITLE IV--REGULATION <<NOTE: Private Fund Investment Advisers 
Registration Act of 2010.>> OF ADVISERS TO HEDGE FUNDS AND OTHERS
SEC. 401. <<NOTE: 15 USC 80b-20 note.>> SHORT TITLE.

    This title may be cited as the ``Private Fund Investment Advisers 
Registration Act of 2010''.
SEC. 402. DEFINITIONS.

    (a) Investment Advisers Act of 1940 Definitions.--Section 202(a) of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended by 
adding at the end the following:
            ``(29) The term `private fund' means an issuer that would be 
        an investment company, as defined in section 3 of the Investment 
        Company Act of 1940 (15 U.S.C. 80a-3), but for section 3(c)(1) 
        or 3(c)(7) of that Act.
            ``(30) The term `foreign private adviser' means any 
        investment adviser who--
                    ``(A) has no place of business in the United States;
                    ``(B) has, in total, fewer than 15 clients and 
                investors in the United States in private funds advised 
                by the investment adviser;
                    ``(C) has aggregate assets under management 
                attributable to clients in the United States and 
                investors in the United States in private funds advised 
                by the investment adviser of less than $25,000,000, or 
                such higher amount as the Commission may, by rule, deem 
                appropriate in accordance with the purposes of this 
                title; and
                    ``(D) neither--
                          ``(i) holds itself out generally to the public 
                      in the United States as an investment adviser; nor
                          ``(ii) acts as--
                                    ``(I) an investment adviser to any 
                                investment company registered under the 
                                Investment Company Act of 1940; or
                                    ``(II) a company that has elected to 
                                be a business development company 
                                pursuant to section 54 of the Investment 
                                Company Act of 1940 (15 U.S.C. 80a-53), 
                                and has not withdrawn its election.''.

    (b) Other <<NOTE: 15 USC 80b-2 note.>> Definitions.--As used in this 
title, the terms ``investment adviser'' and ``private fund'' have the 
same meanings as in section 202 of the Investment Advisers Act of 1940, 
as amended by this title.

[[Page 124 STAT. 1571]]

SEC. 403. ELIMINATION OF PRIVATE ADVISER EXEMPTION; LIMITED 
                        EXEMPTION FOR FOREIGN PRIVATE ADVISERS; 
                        LIMITED INTRASTATE EXEMPTION.

    Section 203(b) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-3(b)) is amended--
            (1) in paragraph (1), by inserting ``, other than an 
        investment adviser who acts as an investment adviser to any 
        private fund,'' before ``all of whose'';
            (2) by striking paragraph (3) and inserting the following:
            ``(3) any investment adviser that is a foreign private 
        adviser;''; and
            (3) in paragraph (5), by striking ``or'' at the end;
            (4) in paragraph (6)--
                    (A) by striking ``any investment adviser'' and 
                inserting ``(A) any investment adviser'';
                    (B) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively; and
                    (C) in clause (ii) (as so redesignated), by striking 
                the period at the end and inserting ``; or''; and
                    (D) by adding at the end the following:

    ``(B) any investment adviser that is registered with the Commodity 
Futures Trading Commission as a commodity trading advisor and advises a 
private fund, provided that, if after the date of enactment of the 
Private Fund Investment Advisers Registration Act of 2010, the business 
of the advisor should become predominately the provision of securities-
related advice, then such adviser shall register with the Commission.''.
            (5) by adding at the end the following:
            ``(7) any investment adviser, other than any entity that has 
        elected to be regulated or is regulated as a business 
        development company pursuant to section 54 of the Investment 
        Company Act of 1940 (15 U.S.C. 80a-54), who solely advises--
                    ``(A) small business investment companies that are 
                licensees under the Small Business Investment Act of 
                1958;
                    ``(B) entities that have received from the Small 
                Business Administration notice to proceed to qualify for 
                a license as a small business investment company under 
                the Small Business Investment Act of 1958, which notice 
                or license has not been revoked; or
                    ``(C) applicants that are affiliated with 1 or more 
                licensed small business investment companies described 
                in subparagraph (A) and that have applied for another 
                license under the Small Business Investment Act of 1958, 
                which application remains pending.''.
SEC. 404. COLLECTION OF SYSTEMIC RISK DATA; REPORTS; EXAMINATIONS; 
                        DISCLOSURES.

    Section 204 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-4) 
is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following:

    ``(b) Records and Reports of Private Funds.--
            ``(1) In general.--The Commission may require any investment 
        adviser registered under this title--
                    ``(A) to maintain such records of, and file with the 
                Commission such reports regarding, private funds advised

[[Page 124 STAT. 1572]]

                by the investment adviser, as necessary and appropriate 
                in the public interest and for the protection of 
                investors, or for the assessment of systemic risk by the 
                Financial Stability Oversight Council (in this 
                subsection referred to as the `Council'); and
                    ``(B) to provide or make available to the Council 
                those reports or records or the information contained 
                therein.
            ``(2) Treatment of records.--The records and reports of any 
        private fund to which an investment adviser registered under 
        this title provides investment advice shall be deemed to be the 
        records and reports of the investment adviser.
            ``(3) Required information.--The records and reports 
        required to be maintained by an investment adviser and subject 
        to inspection by the Commission under this subsection shall 
        include, for each private fund advised by the investment 
        adviser, a description of--
                    ``(A) the amount of assets under management and use 
                of leverage, including off-balance-sheet leverage;
                    ``(B) counterparty credit risk exposure;
                    ``(C) trading and investment positions;
                    ``(D) valuation policies and practices of the fund;
                    ``(E) types of assets held;
                    ``(F) side arrangements or side letters, whereby 
                certain investors in a fund obtain more favorable rights 
                or entitlements than other investors;
                    ``(G) trading practices; and
                    ``(H) such other information as the Commission, in 
                consultation with the Council, determines is necessary 
                and appropriate in the public interest and for the 
                protection of investors or for the assessment of 
                systemic risk, which may include the establishment of 
                different reporting requirements for different classes 
                of fund advisers, based on the type or size of private 
                fund being advised.
            ``(4) Maintenance of records.--An investment adviser 
        registered under this title shall maintain such records of 
        private funds advised by the investment adviser for such period 
        or periods as the Commission, by rule, may prescribe as 
        necessary and appropriate in the public interest and for the 
        protection of investors, or for the assessment of systemic risk.
            ``(5) Filing of records.--The Commission shall issue rules 
        requiring each investment adviser to a private fund to file 
        reports containing such information as the Commission deems 
        necessary and appropriate in the public interest and for the 
        protection of investors or for the assessment of systemic risk.
            ``(6) Examination of records.--
                    ``(A) Periodic and special examinations.--The 
                Commission--
                          ``(i) shall conduct periodic inspections of 
                      the records of private funds maintained by an 
                      investment adviser registered under this title in 
                      accordance with a schedule established by the 
                      Commission; and
                          ``(ii) may conduct at any time and from time 
                      to time such additional, special, and other 
                      examinations as the Commission may prescribe as 
                      necessary and appropriate in the public interest 
                      and for the protection of investors, or for the 
                      assessment of systemic risk.

[[Page 124 STAT. 1573]]

                    ``(B) Availability of records.--An investment 
                adviser registered under this title shall make available 
                to the Commission any copies or extracts from such 
                records as may be prepared without undue effort, 
                expense, or delay, as the Commission or its 
                representatives may reasonably request.
            ``(7) Information sharing.--
                    ``(A) In general.--The Commission shall make 
                available to the Council copies of all reports, 
                documents, records, and information filed with or 
                provided to the Commission by an investment adviser 
                under this subsection as the Council may consider 
                necessary for the purpose of assessing the systemic risk 
                posed by a private fund.
                    ``(B) Confidentiality.--The Council shall maintain 
                the confidentiality of information received under this 
                paragraph in all such reports, documents, records, and 
                information, in a manner consistent with the level of 
                confidentiality established for the Commission pursuant 
                to paragraph (8). The Council shall be exempt from 
                section 552 of title 5, United States Code, with respect 
                to any information in any report, document, record, or 
                information made available, to the Council under this 
                subsection.''.
            ``(8) Commission confidentiality of reports.--
        Notwithstanding any other provision of law, the Commission may 
        not be compelled to disclose any report or information contained 
        therein required to be filed with the Commission under this 
        subsection, except that nothing in this subsection authorizes 
        the Commission--
                    ``(A) to withhold information from Congress, upon an 
                agreement of confidentiality; or
                    ``(B) prevent the Commission from complying with--
                          ``(i) a request for information from any other 
                      Federal department or agency or any self-
                      regulatory organization requesting the report or 
                      information for purposes within the scope of its 
                      jurisdiction; or
                          ``(ii) an order of a court of the United 
                      States in an action brought by the United States 
                      or the Commission.
            ``(9) Other recipients confidentiality.--Any department, 
        agency, or self-regulatory organization that receives reports or 
        information from the Commission under this subsection shall 
        maintain the confidentiality of such reports, documents, 
        records, and information in a manner consistent with the level 
        of confidentiality established for the Commission under 
        paragraph (8).
            ``(10) Public information exception.--
                    ``(A) In general.--The Commission, the Council, and 
                any other department, agency, or self-regulatory 
                organization that receives information, reports, 
                documents, records, or information from the Commission 
                under this subsection, shall be exempt from the 
                provisions of section 552 of title 5, United States 
                Code, with respect to any such report, document, record, 
                or information. Any proprietary information of an 
                investment adviser ascertained by the Commission from 
                any report required to be filed with the Commission 
                pursuant to this subsection shall be subject to the same 
                limitations on public disclosure as any facts

[[Page 124 STAT. 1574]]

                ascertained during an examination, as provided by 
                section 210(b) of this title.
                    ``(B) Proprietary information.--For purposes of this 
                paragraph, proprietary information includes sensitive, 
                non-public information regarding--
                          ``(i) the investment or trading strategies of 
                      the investment adviser;
                          ``(ii) analytical or research methodologies;
                          ``(iii) trading data;
                          ``(iv) computer hardware or software 
                      containing intellectual property; and
                          ``(v) any additional information that the 
                      Commission determines to be proprietary.
            ``(11) Annual report to congress.--The Commission shall 
        report annually to Congress on how the Commission has used the 
        data collected pursuant to this subsection to monitor the 
        markets for the protection of investors and the integrity of the 
        markets.''.
SEC. 405. DISCLOSURE PROVISION AMENDMENT.

    Section 210(c) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-10(c)) is amended by inserting before the period at the end the 
following: ``or for purposes of assessment of potential systemic risk''.
SEC. 406. CLARIFICATION OF RULEMAKING AUTHORITY.

    Section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
11) is amended--
            (1) in subsection (a), by inserting before the period at the 
        end of the first sentence the following: ``, including rules and 
        regulations defining technical, trade, and other terms used in 
        this title, except that the Commission may not define the term 
        `client' for purposes of paragraphs (1) and (2) of section 206 
        to include an investor in a private fund managed by an 
        investment adviser, if such private fund has entered into an 
        advisory contract with such adviser''; and
            (2) by adding at the end the following:

    ``(e) Disclosure Rules on Private Funds.--
The <<NOTE: Consultation. Deadline.>> Commission and the Commodity 
Futures Trading Commission shall, after consultation with the Council 
but not later than 12 months after the date of enactment of the Private 
Fund Investment Advisers Registration Act of 2010, jointly promulgate 
rules to establish the form and content of the reports required to be 
filed with the Commission under subsection 204(b) and with the Commodity 
Futures Trading Commission by investment advisers that are registered 
both under this title and the Commodity Exchange Act (7 U.S.C. 1a et 
seq.).''.
SEC. 407. EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND 
                        ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) 
is amended by adding at the end the following:
    ``(l) Exemption of Venture Capital Fund Advisers.--No investment 
adviser that acts as an investment adviser solely to 1 or more venture 
capital funds shall be subject to the registration requirements of this 
title with respect to the provision of investment advice relating to a 
venture <<NOTE: Regulations.>> capital fund. Not later than 1 year after 
the date of enactment of this subsection, the Commission

[[Page 124 STAT. 1575]]

shall issue final rules to define the term `venture capital fund' for 
purposes of this subsection. The <<NOTE: Records.>> Commission shall 
require such advisers to maintain such records and provide to the 
Commission such annual or other reports as the Commission determines 
necessary or appropriate in the public interest or for the protection of 
investors.''.
SEC. 408. EXEMPTION OF AND REPORTING BY CERTAIN PRIVATE FUND 
                        ADVISERS.

    Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) 
is amended by adding at the end the following:
    ``(m) Exemption of and Reporting by Certain Private Fund Advisers.--
            ``(1) In general.--The Commission shall provide an exemption 
        from the registration requirements under this section to any 
        investment adviser of private funds, if each of such investment 
        adviser acts solely as an adviser to private funds and has 
        assets under management in the United States of less than 
        $150,000,000.
            ``(2) Reporting.--The <<NOTE: Records.>> Commission shall 
        require investment advisers exempted by reason of this 
        subsection to maintain such records and provide to the 
        Commission such annual or other reports as the Commission 
        determines necessary or appropriate in the public interest or 
        for the protection of investors.

    ``(n) Registration and Examination of Mid-sized Private Fund 
Advisers.--In prescribing <<NOTE: Regulations. Procedures.>> regulations 
to carry out the requirements of this section with respect to investment 
advisers acting as investment advisers to mid-sized private funds, the 
Commission shall take into account the size, governance, and investment 
strategy of such funds to determine whether they pose systemic risk, and 
shall provide for registration and examination procedures with respect 
to the investment advisers of such funds which reflect the level of 
systemic risk posed by such funds.''.
SEC. 409. FAMILY OFFICES.

    (a) In General.--Section 202(a)(11) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b-2(a)(11)) is amended by striking ``or (G)'' and 
inserting the following: ``; (G) any family office, as defined by rule, 
regulation, or order of the Commission, in accordance with the purposes 
of this title; or (H)''.
    (b) Rulemaking.--The <<NOTE: 15 USC 80b-2 note.>> rules, 
regulations, or orders issued by the Commission pursuant to section 
202(a)(11)(G) of the Investment Advisers Act of 1940, as added by this 
section, regarding the definition of the term ``family office'' shall 
provide for an exemption that--
            (1) is consistent with the previous exemptive policy of the 
        Commission, as reflected in exemptive orders for family offices 
        in effect on the date of enactment of this Act, and the 
        grandfathering provisions in paragraph (3);
            (2) recognizes the range of organizational, management, and 
        employment structures and arrangements employed by family 
        offices; and
            (3) does not exclude any person who was not registered or 
        required to be registered under the Investment Advisers Act of 
        1940 on January 1, 2010 from the definition of the term ``family 
        office'', solely because such person provides investment advice 
        to, and was engaged before January 1, 2010 in providing 
        investment advice to--

[[Page 124 STAT. 1576]]

                    (A) natural persons who, at the time of their 
                applicable investment, are officers, directors, or 
                employees of the family office who--
                          (i) <<NOTE: Deadline.>> have invested with the 
                      family office before January 1, 2010; and
                          (ii) are accredited investors, as defined in 
                      Regulation D of the Commission (or any successor 
                      thereto) under the Securities Act of 1933, or, as 
                      the Commission may prescribe by rule, the 
                      successors-in-interest thereto;
                    (B) any company owned exclusively and controlled by 
                members of the family of the family office, or as the 
                Commission may prescribe by rule;
                    (C) any investment adviser registered under the 
                Investment Adviser Act of 1940 that provides investment 
                advice to the family office and who identifies 
                investment opportunities to the family office, and 
                invests in such transactions on substantially the same 
                terms as the family office invests, but does not invest 
                in other funds advised by the family office, and whose 
                assets as to which the family office directly or 
                indirectly provides investment advice represent, in the 
                aggregate, not more than 5 percent of the value of the 
                total assets as to which the family office provides 
                investment advice.

    (c) Antifraud Authority.--A family office that would not be a family 
office, but for subsection (b)(3), shall be deemed to be an investment 
adviser for the purposes of paragraphs (1), (2) and (4) of section 206 
of the Investment Advisers Act of 1940.
SEC. 410. STATE AND FEDERAL RESPONSIBILITIES; ASSET THRESHOLD FOR 
                        FEDERAL REGISTRATION OF INVESTMENT 
                        ADVISERS.

    Section 203A(a) of the of the Investment Advisers Act of 1940 (15 
U.S.C. 80b-3a(a)) is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by inserting after paragraph (1) the following:
            ``(2) Treatment of mid-sized investment advisers.--
                    ``(A) In general.--No investment adviser described 
                in subparagraph (B) shall register under section 203, 
                unless the investment adviser is an adviser to an 
                investment company registered under the Investment 
                Company Act of 1940, or a company which has elected to 
                be a business development company pursuant to section 54 
                of the Investment Company Act of 1940, and has not 
                withdrawn the election, except that, if by effect of 
                this paragraph an investment adviser would be required 
                to register with 15 or more States, then the adviser may 
                register under section 203.
                    ``(B) Covered persons.--An investment adviser 
                described in this subparagraph is an investment adviser 
                that--
                          ``(i) is required to be registered as an 
                      investment adviser with the securities 
                      commissioner (or any agency or office performing 
                      like functions) of the State in which it maintains 
                      its principal office and place of business and, if 
                      registered, would be subject to examination as an 
                      investment adviser by any such commissioner, 
                      agency, or office; and

[[Page 124 STAT. 1577]]

                          ``(ii) has assets under management between--
                                    ``(I) the amount specified under 
                                subparagraph (A) of paragraph (1), as 
                                such amount may have been adjusted by 
                                the Commission pursuant to that 
                                subparagraph; and
                                    ``(II) $100,000,000, or such higher 
                                amount as the Commission may, by rule, 
                                deem appropriate in accordance with the 
                                purposes of this title.''.
SEC. 411. CUSTODY OF CLIENT ASSETS.

    The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is 
amended by adding at the end the following new section:
``SEC. 223. <<NOTE: 15 USC 80b-18b.>>  CUSTODY OF CLIENT ACCOUNTS.

    ``An investment adviser registered under this title shall take such 
steps to safeguard client assets over which such adviser has custody, 
including, without limitation, verification of such assets by an 
independent public accountant, as the Commission may, by rule, 
prescribe.''.
SEC. 412. COMPTROLLER GENERAL STUDY ON CUSTODY RULE COSTS.

    The Comptroller General of the United States shall--
            (1) conduct a study of--
                    (A) the compliance costs associated with the current 
                Securities and Exchange Commission rules 204-2 (17 
                C.F.R. Parts 275.204-2) and rule 206(4)-2 (17 C.F.R. 
                275.206(4)-2) under the Investment Advisers Act of 1940 
                regarding custody of funds or securities of clients by 
                investment advisers; and
                    (B) the additional costs if subsection (b)(6) of 
                rule 206(4)-2 (17 C.F.R. 275.206(4)-2(b)(6)) relating to 
                operational independence were eliminated; and
            (2) <<NOTE: Reports. Deadline.>> submit a report to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives on the results of such study, not later than 3 
        years after the date of enactment of this Act.
SEC. 413. <<NOTE: 15 USC 77b note.>> ADJUSTING THE ACCREDITED 
                        INVESTOR STANDARD.

    (a) In General.--The Commission shall adjust any net worth standard 
for an accredited investor, as set forth in the rules of the Commission 
under the Securities Act of 1933, so that the individual net worth of 
any natural person, or joint net worth with the spouse of that person, 
at the time of purchase, is more than $1,000,000 (as such amount is 
adjusted periodically by rule of the Commission), excluding the value of 
the primary residence of such natural person, except that during the 4-
year period that begins on the date of enactment of this Act, any net 
worth standard shall be $1,000,000, excluding the value of the primary 
residence of such natural person.
    (b) Review and Adjustment.--
            (1) Initial review and adjustment.--
                    (A) Initial review.--The Commission may undertake a 
                review of the definition of the term ``accredited 
                investor'', as such term applies to natural persons, to 
                determine whether the requirements of the definition, 
                excluding the requirement relating to the net worth 
                standard described in subsection (a), should be adjusted 
                or modified for the

[[Page 124 STAT. 1578]]

                protection of investors, in the public interest, and in 
                light of the economy.
                    (B) Adjustment or modification.--Upon completion of 
                a review under subparagraph (A), the Commission may, by 
                notice and comment rulemaking, make such adjustments to 
                the definition of the term ``accredited investor'', 
                excluding adjusting or modifying the requirement 
                relating to the net worth standard described in 
                subsection (a), as such term applies to natural persons, 
                as the Commission may deem appropriate for the 
                protection of investors, in the public interest, and in 
                light of the economy.
            (2) Subsequent reviews and adjustment.--
                    (A) Subsequent reviews. <<NOTE: Deadlines.>> --Not 
                earlier than 4 years after the date of enactment of this 
                Act, and not less frequently than once every 4 years 
                thereafter, the Commission shall undertake a review of 
                the definition, in its entirety, of the term 
                ``accredited investor'', as defined in section 230.215 
                of title 17, Code of Federal Regulations, or any 
                successor thereto, as such term applies to natural 
                persons, to determine whether the requirements of the 
                definition should be adjusted or modified for the 
                protection of investors, in the public interest, and in 
                light of the economy.
                    (B) Adjustment or modification.--Upon completion of 
                a review under subparagraph (A), the Commission may, by 
                notice and comment rulemaking, make such adjustments to 
                the definition of the term ``accredited investor'', as 
                defined in section 230.215 of title 17, Code of Federal 
                Regulations, or any successor thereto, as such term 
                applies to natural persons, as the Commission may deem 
                appropriate for the protection of investors, in the 
                public interest, and in light of the economy.
SEC. 414. RULE OF CONSTRUCTION RELATING TO THE COMMODITIES 
                        EXCHANGE ACT.

    The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is 
further amended by adding at the end the following new section:
``SEC. 224. <<NOTE: 15 USC 80b-18c.>>  RULE OF CONSTRUCTION 
                        RELATING TO THE COMMODITIES EXCHANGE ACT.

    ``Nothing in this title shall relieve any person of any obligation 
or duty, or affect the availability of any right or remedy available to 
the Commodity Futures Trading Commission or any private party, arising 
under the Commodity Exchange Act (7 U.S.C. 1 et seq.) governing 
commodity pools, commodity pool operators, or commodity trading 
advisors.''.
SEC. 415. GAO STUDY AND REPORT ON ACCREDITED INVESTORS.

    The Comptroller General of the United States shall conduct a study 
on the appropriate criteria for determining the financial thresholds or 
other criteria needed to qualify for accredited investor status and 
eligibility to invest in private funds, and shall submit a report to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives on the 
results of such study not later than 3 years after the date of enactment 
of this Act.

[[Page 124 STAT. 1579]]

SEC. 416. GAO STUDY ON SELF-REGULATORY ORGANIZATION FOR PRIVATE 
                        FUNDS.

    The Comptroller General of the United States shall--
            (1) conduct a study of the feasibility of forming a self-
        regulatory organization to oversee private funds; and
            (2) <<NOTE: Reports. Deadline.>> submit a report to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives on the results of such study, not later than 1 
        year after the date of enactment of this Act.
SEC. 417. COMMISSION STUDY AND REPORT ON SHORT SELLING.

    (a) Studies.--The Division of Risk, Strategy, and Financial 
Innovation of the Commission shall conduct--
            (1) a study, taking into account current scholarship, on the 
        state of short selling on national securities exchanges and in 
        the over-the-counter markets, with particular attention to the 
        impact of recent rule changes and the incidence of--
                    (A) the failure to deliver shares sold short; or
                    (B) delivery of shares on the fourth day following 
                the short sale transaction; and
            (2) a study of--
                    (A) the feasibility, benefits, and costs of 
                requiring reporting publicly, in real time short sale 
                positions of publicly listed securities, or, in the 
                alternative, reporting such short positions in real time 
                only to the Commission and the Financial Industry 
                Regulatory Authority; and
                    (B) the feasibility, benefits, and costs of 
                conducting a voluntary pilot program in which public 
                companies will agree to have all trades of their shares 
                marked ``short'', ``market maker short'', ``buy'', 
                ``buy-to-cover'', or ``long'', and reported in real time 
                through the Consolidated Tape.

    (b) Reports.--The Commission shall submit a report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives--
            (1) on the results of the study required under subsection 
        (a)(1), including recommendations for market improvements, not 
        later than 2 years after the date of enactment of this Act; and
            (2) on the results of the study required under subsection 
        (a)(2), not later than 1 year after the date of enactment of 
        this Act.
SEC. 418. QUALIFIED CLIENT STANDARD.

    Section 205(e) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-5(e)) is amended by adding at the end the following: ``With 
respect <<NOTE: Order. Deadlines.>>  to any factor used in any rule or 
regulation by the Commission in making a determination under this 
subsection, if the Commission uses a dollar amount test in connection 
with such factor, such as a net asset threshold, the Commission shall, 
by order, not later than 1 year after the date of enactment of the 
Private Fund Investment Advisers Registration Act of 2010, and every 5 
years thereafter, adjust for the effects of inflation on such test. Any 
such adjustment that is not a multiple of $100,000 shall be rounded to 
the nearest multiple of $100,000.''.

[[Page 124 STAT. 1580]]

SEC. 419. <<NOTE: 15 USC 80b-2 note. Effective date.>>  TRANSITION 
                        PERIOD.

    Except as otherwise provided in this title, this title and the 
amendments made by this title shall become effective 1 year after the 
date of enactment of this Act, except that any investment adviser may, 
at the discretion of the investment adviser, register with the 
Commission under the Investment Advisers Act of 1940 during that 1-year 
period, subject to the rules of the Commission.

                           TITLE V--INSURANCE

   Subtitle <<NOTE: Federal Insurance Office Act of 2010. 31 USC 301 
note.>>  A--Federal Insurance Office
SEC. 501. SHORT TITLE.

    This subtitle may be cited as the ``Federal Insurance Office Act of 
2010''.
SEC. 502. FEDERAL INSURANCE OFFICE.

    (a) Establishment of Office.--Subchapter I of chapter 3 of subtitle 
I of title 31, United States Code, is amended--
            (1) by redesignating section 312 as section 315;
            (2) by redesignating section 313 as section 312; and
            (3) by inserting after section 312 (as so redesignated) the 
        following new sections:
``SEC. 313. FEDERAL INSURANCE OFFICE.

    ``(a) Establishment.--There is established within the Department of 
the Treasury the Federal Insurance Office.
    ``(b) Leadership.--The Office shall be headed by a Director, who 
shall be appointed by the Secretary of the Treasury. The position of 
Director shall be a career reserved position in the Senior Executive 
Service, as that position is defined under section 3132 of title 5, 
United States Code.
    ``(c) Functions.--
            ``(1) Authority pursuant to direction of secretary.--The 
        Office, pursuant to the direction of the Secretary, shall have 
        the authority--
                    ``(A) to monitor all aspects of the insurance 
                industry, including identifying issues or gaps in the 
                regulation of insurers that could contribute to a 
                systemic crisis in the insurance industry or the United 
                States financial system;
                    ``(B) to monitor the extent to which traditionally 
                underserved communities and consumers, minorities (as 
                such term is defined in section 1204(c) of the Financial 
                Institutions Reform, Recovery, and Enforcement Act of 
                1989 (12 U.S.C. 1811 note)), and low- and moderate-
                income persons have access to affordable insurance 
                products regarding all lines of insurance, except health 
                insurance;
                    ``(C) to recommend to the Financial Stability 
                Oversight Council that it designate an insurer, 
                including the affiliates of such insurer, as an entity 
                subject to regulation as a nonbank financial company 
                supervised by the Board of Governors pursuant to title I 
                of the Dodd-Frank Wall Street Reform and Consumer 
                Protection Act;
                    ``(D) to assist the Secretary in administering the 
                Terrorism Insurance Program established in the 
                Department

[[Page 124 STAT. 1581]]

                of the Treasury under the Terrorism Risk Insurance Act 
                of 2002 (15 U.S.C. 6701 note);
                    ``(E) to coordinate Federal efforts and develop 
                Federal policy on prudential aspects of international 
                insurance matters, including representing the United 
                States, as appropriate, in the International Association 
                of Insurance Supervisors (or a successor entity) and 
                assisting the Secretary in negotiating covered 
                agreements (as such term is defined in subsection (r));
                    ``(F) to determine, in accordance with subsection 
                (f), whether State insurance measures are preempted by 
                covered agreements;
                    ``(G) to consult with the States (including State 
                insurance regulators) regarding insurance matters of 
                national importance and prudential insurance matters of 
                international importance; and
                    ``(H) to perform such other related duties and 
                authorities as may be assigned to the Office by the 
                Secretary.
            ``(2) Advisory functions.--The Office shall advise the 
        Secretary on major domestic and prudential international 
        insurance policy issues.
            ``(3) Advisory capacity on council.--The Director shall 
        serve in an advisory capacity on the Financial Stability 
        Oversight Council established under the Financial Stability Act 
        of 2010.

    ``(d) Scope.--The authority of the Office shall extend to all lines 
of insurance except--
            ``(1) health insurance, as determined by the Secretary in 
        coordination with the Secretary of Health and Human Services 
        based on section 2791 of the Public Health Service Act (42 
        U.S.C. 300gg-91);
            ``(2) long-term care insurance, except long-term care 
        insurance that is included with life or annuity insurance 
        components, as determined by the Secretary in coordination with 
        the Secretary of Health and Human Services, and in the case of 
        long-term care insurance that is included with such components, 
        the Secretary shall coordinate with the Secretary of Health and 
        Human Services in performing the functions of the Office; and
            ``(3) crop insurance, as established by the Federal Crop 
        Insurance Act (7 U.S.C. 1501 et seq.).

    ``(e) Gathering of Information.--
            ``(1) In general.--In carrying out the functions required 
        under subsection (c), the Office may--
                    ``(A) receive and collect data and information on 
                and from the insurance industry and insurers;
                    ``(B) enter into information-sharing agreements;
                    ``(C) analyze and disseminate data and information; 
                and
                    ``(D) issue reports regarding all lines of insurance 
                except health insurance.
            ``(2) Collection of information from insurers and 
        affiliates.--
                    ``(A) In general.--Except as provided in paragraph 
                (3), the Office may require an insurer, or any affiliate 
                of an insurer, to submit such data or information as the

[[Page 124 STAT. 1582]]

                Office may reasonably require in carrying out the 
                functions described under subsection (c).
                    ``(B) Rule of construction.--Notwithstanding any 
                other provision of this section, for purposes of 
                subparagraph (A), the term `insurer' means any entity 
                that writes insurance or reinsures risks and issues 
                contracts or policies in 1 or more States.
            ``(3) Exception for small insurers.--Paragraph (2) shall not 
        apply with respect to any insurer or affiliate thereof that 
        meets a minimum size threshold that the Office may establish, 
        whether by order or rule.
            ``(4) Advance coordination.--Before collecting any data or 
        information under paragraph (2) from an insurer, or affiliate of 
        an insurer, the Office shall coordinate with each relevant 
        Federal agency and State insurance regulator (or other relevant 
        Federal or State regulatory agency, if any, in the case of an 
        affiliate of an insurer) and any publicly available sources to 
        determine if the information to be collected is available from, 
        and may be obtained in a timely manner by, such Federal agency 
        or State insurance regulator, individually or collectively, 
        other regulatory agency, or publicly available sources. If the 
        Director determines that such data or information is available, 
        and may be obtained in a timely manner, from such an agency, 
        regulator, regulatory agency, or source, the Director shall 
        obtain the data or information from such agency, regulator, 
        regulatory agency, or source. If the Director determines that 
        such data or information is not so available, the Director may 
        collect such data or information from an insurer (or affiliate) 
        only if the Director complies with the requirements of 
        subchapter I of chapter 35 of title 44, United States Code 
        (relating to Federal information policy; commonly known as the 
        Paperwork Reduction Act), in collecting such data or 
        information. Notwithstanding any other provision of law, each 
        such relevant Federal agency and State insurance regulator or 
        other Federal or State regulatory agency is authorized to 
        provide to the Office such data or information.
            ``(5) Confidentiality.--
                    ``(A) Retention of privilege.--The submission of any 
                nonpublicly available data and information to the Office 
                under this subsection shall not constitute a waiver of, 
                or otherwise affect, any privilege arising under Federal 
                or State law (including the rules of any Federal or 
                State court) to which the data or information is 
                otherwise subject.
                    ``(B) Continued application of prior confidentiality 
                agreements.--Any requirement under Federal or State law 
                to the extent otherwise applicable, or any requirement 
                pursuant to a written agreement in effect between the 
                original source of any nonpublicly available data or 
                information and the source of such data or information 
                to the Office, regarding the privacy or confidentiality 
                of any data or information in the possession of the 
                source to the Office, shall continue to apply to such 
                data or information after the data or information has 
                been provided pursuant to this subsection to the Office.
                    ``(C) Information-sharing agreement.--Any data or 
                information obtained by the Office may be made available

[[Page 124 STAT. 1583]]

                to State insurance regulators, individually or 
                collectively, through an information-sharing agreement 
                that--
                          ``(i) shall comply with applicable Federal 
                      law; and
                          ``(ii) shall not constitute a waiver of, or 
                      otherwise affect, any privilege under Federal or 
                      State law (including the rules of any Federal or 
                      State court) to which the data or information is 
                      otherwise subject.
                    ``(D) Agency disclosure requirements.--Section 552 
                of title 5, United States Code, shall apply to any data 
                or information submitted to the Office by an insurer or 
                an affiliate of an insurer.
            ``(6) Subpoenas and enforcement.--The Director shall have 
        the power to require by subpoena the production of the data or 
        information requested under paragraph (2), but only upon a 
        written finding by the Director that such data or information is 
        required to carry out the functions described under subsection 
        (c) and that the Office has coordinated with such regulator or 
        agency as required under paragraph (4). Subpoenas shall bear the 
        signature of the Director and shall be served by any person or 
        class of persons designated by the Director for that purpose. In 
        the case of contumacy or failure to obey a subpoena, the 
        subpoena shall be enforceable by order of any appropriate 
        district court of the United States. Any failure to obey the 
        order of the court may be punished by the court as a contempt of 
        court.

    ``(f) Preemption of State Insurance Measures.--
            ``(1) Standard.--A State insurance measure shall be 
        preempted pursuant to this section or section 314 if, and only 
        to the extent that the Director determines, in accordance with 
        this subsection, that the measure--
                    ``(A) results in less favorable treatment of a non-
                United States insurer domiciled in a foreign 
                jurisdiction that is subject to a covered agreement than 
                a United States insurer domiciled, licensed, or 
                otherwise admitted in that State; and
                    ``(B) is inconsistent with a covered agreement.
            ``(2) Determination.--
                    ``(A) Notice of potential inconsistency.--Before 
                making any determination under paragraph (1), the 
                Director shall--
                          ``(i) notify and consult with the appropriate 
                      State regarding any potential inconsistency or 
                      preemption;
                          ``(ii) notify and consult with the United 
                      States Trade Representative regarding any 
                      potential inconsistency or preemption;
                          ``(iii) <<NOTE: Federal Register, 
                      publication.>>  cause to be published in the 
                      Federal Register notice of the issue regarding the 
                      potential inconsistency or preemption, including a 
                      description of each State insurance measure at 
                      issue and any applicable covered agreement;
                          ``(iv) <<NOTE: Comments.>> provide interested 
                      parties a reasonable opportunity to submit written 
                      comments to the Office; and
                          ``(v) consider any comments received.
                    ``(B) Scope of review.--For purposes of this 
                subsection, any determination of the Director regarding 
                State insurance measures, and any preemption under 
                paragraph (1) as a result of such determination, shall 
                be limited

[[Page 124 STAT. 1584]]

                to the subject matter contained within the covered 
                agreement involved and shall achieve a level of 
                protection for insurance or reinsurance consumers that 
                is substantially equivalent to the level of protection 
                achieved under State insurance or reinsurance 
                regulation.
                    ``(C) Notice of determination of inconsistency.--
                Upon making any determination under paragraph (1), the 
                Director shall--
                          ``(i) notify the appropriate State of the 
                      determination and the extent of the inconsistency;
                          ``(ii) establish a reasonable period of time, 
                      which shall not be less than 30 days, before the 
                      determination shall become effective; and
                          ``(iii) notify the Committees on Financial 
                      Services and Ways and Means of the House of 
                      Representatives and the Committees on Banking, 
                      Housing, and Urban Affairs and Finance of the 
                      Senate.
            ``(3) Notice of effectiveness.--Upon the conclusion of the 
        period referred to in paragraph (2)(C)(ii), if the basis for 
        such determination still exists, the determination shall become 
        effective and the Director shall--
                    ``(A) cause to be published a notice in the Federal 
                Register that the preemption has become effective, as 
                well as the effective date; and
                    ``(B) notify the appropriate State.
            ``(4) Limitation.--No State may enforce a State insurance 
        measure to the extent that such measure has been preempted under 
        this subsection.

    ``(g) Applicability of Administrative Procedures Act.--
Determinations of inconsistency made pursuant to subsection (f)(2) shall 
be subject to the applicable provisions of subchapter II of chapter 5 of 
title 5, United States Code (relating to administrative procedure), and 
chapter 7 of such title (relating to judicial review), except that in 
any action for judicial review of a determination of inconsistency, the 
court shall determine the matter de novo.
    ``(h) Regulations, Policies, and Procedures.--The Secretary may 
issue orders, regulations, policies, and procedures to implement this 
section.
    ``(i) Consultation.--The Director shall consult with State insurance 
regulators, individually or collectively, to the extent the Director 
determines appropriate, in carrying out the functions of the Office.
    ``(j) Savings Provisions.--Nothing in this section shall--
            ``(1) preempt--
                    ``(A) any State insurance measure that governs any 
                insurer's rates, premiums, underwriting, or sales 
                practices;
                    ``(B) any State coverage requirements for insurance;
                    ``(C) the application of the antitrust laws of any 
                State to the business of insurance; or
                    ``(D) any State insurance measure governing the 
                capital or solvency of an insurer, except to the extent 
                that such State insurance measure results in less 
                favorable treatment of a non-United State insurer than a 
                United States insurer;
            ``(2) be construed to alter, amend, or limit any provision 
        of the Consumer Financial Protection Agency Act of 2010; or
            ``(3) affect the preemption of any State insurance measure 
        otherwise inconsistent with and preempted by Federal law.

[[Page 124 STAT. 1585]]

    ``(k) Retention of Existing State Regulatory Authority.--Nothing in 
this section or section 314 shall be construed to establish or provide 
the Office or the Department of the Treasury with general supervisory or 
regulatory authority over the business of insurance.
    ``(l) Retention of Authority of Federal Financial Regulatory 
Agencies.--Nothing in this section or section 314 shall be construed to 
limit the authority of any Federal financial regulatory agency, 
including the authority to develop and coordinate policy, negotiate, and 
enter into agreements with foreign governments, authorities, regulators, 
and multinational regulatory committees and to preempt State measures to 
affect uniformity with international regulatory agreements.
    ``(m) Retention of Authority of United States Trade 
Representative.--Nothing in this section or section 314 shall be 
construed to affect the authority of the Office of the United States 
Trade Representative pursuant to section 141 of the Trade Act of 1974 
(19 U.S.C. 2171) or any other provision of law, including authority over 
the development and coordination of United States international trade 
policy and the administration of the United States trade agreements 
program.
    ``(n) Annual Reports to Congress.--
            ``(1) Section 313(f) reports.--Beginning September 30, 2011, 
        the Director shall submit a report on or before September 30 of 
        each calendar year to the President and to the Committees on 
        Financial Services and Ways and Means of the House of 
        Representatives and the Committees on Banking, Housing, and 
        Urban Affairs and Finance of the Senate on any actions taken by 
        the Office pursuant to subsection (f) (regarding preemption of 
        inconsistent State insurance measures).
            ``(2) Insurance industry.--Beginning September 30, 2011, the 
        Director shall submit a report on or before September 30 of each 
        calendar year to the President and to the Committee on Financial 
        Services of the House of Representatives and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate on the 
        insurance industry and any other information as deemed relevant 
        by the Director or requested by such Committees.

    ``(o) Reports on U.S. and Global Reinsurance Market.--The Director 
shall submit to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban Affairs 
of the Senate--
            ``(1) a report received not later than September 30, 2012, 
        describing the breadth and scope of the global reinsurance 
        market and the critical role such market plays in supporting 
        insurance in the United States; and
            ``(2) a report received not later than January 1, 2013, and 
        updated not later than January 1, 2015, describing the impact of 
        part II of the Nonadmitted and Reinsurance Reform Act of 2010 on 
        the ability of State regulators to access reinsurance 
        information for regulated companies in their jurisdictions.

    ``(p) Study and Report on Regulation of Insurance.--
            ``(1) In general.--Not later than 18 months after the date 
        of enactment of this section, the Director shall conduct a study 
        and submit a report to Congress on how to modernize and improve 
        the system of insurance regulation in the United States.

[[Page 124 STAT. 1586]]

            ``(2) Considerations.--The study and report required under 
        paragraph (1) shall be based on and guided by the following 
        considerations:
                    ``(A) Systemic risk regulation with respect to 
                insurance.
                    ``(B) Capital standards and the relationship between 
                capital allocation and liabilities, including standards 
                relating to liquidity and duration risk.
                    ``(C) Consumer protection for insurance products and 
                practices, including gaps in State regulation.
                    ``(D) The degree of national uniformity of State 
                insurance regulation.
                    ``(E) The regulation of insurance companies and 
                affiliates on a consolidated basis.
                    ``(F) International coordination of insurance 
                regulation.
            ``(3) Additional factors.--The study and report required 
        under paragraph (1) shall also examine the following factors:
                    ``(A) The costs and benefits of potential Federal 
                regulation of insurance across various lines of 
                insurance (except health insurance).
                    ``(B) The feasibility of regulating only certain 
                lines of insurance at the Federal level, while leaving 
                other lines of insurance to be regulated at the State 
                level.
                    ``(C) The ability of any potential Federal 
                regulation or Federal regulators to eliminate or 
                minimize regulatory arbitrage.
                    ``(D) The impact that developments in the regulation 
                of insurance in foreign jurisdictions might have on the 
                potential Federal regulation of insurance.
                    ``(E) The ability of any potential Federal 
                regulation or Federal regulator to provide robust 
                consumer protection for policyholders.
                    ``(F) The potential consequences of subjecting 
                insurance companies to a Federal resolution authority, 
                including the effects of any Federal resolution 
                authority--
                          ``(i) on the operation of State insurance 
                      guaranty fund systems, including the loss of 
                      guaranty fund coverage if an insurance company is 
                      subject to a Federal resolution authority;
                          ``(ii) on policyholder protection, including 
                      the loss of the priority status of policyholder 
                      claims over other unsecured general creditor 
                      claims;
                          ``(iii) in the case of life insurance 
                      companies, on the loss of the special status of 
                      separate account assets and separate account 
                      liabilities; and
                          ``(iv) on the international competitiveness of 
                      insurance companies.
                    ``(G) Such other factors as the Director determines 
                necessary or appropriate, consistent with the principles 
                set forth in paragraph (2).
            ``(4) Required recommendations.--The study and report 
        required under paragraph (1) shall also contain any legislative, 
        administrative, or regulatory recommendations, as the Director 
        determines appropriate, to carry out or effectuate the findings 
        set forth in such report.
            ``(5) Consultation.--With respect to the study and report 
        required under paragraph (1), the Director shall consult with

[[Page 124 STAT. 1587]]

        the State insurance regulators, consumer organizations, 
        representatives of the insurance industry and policyholders, and 
        other organizations and experts, as appropriate.

    ``(q) Use of Existing Resources.--To carry out this section, the 
Office may employ personnel, facilities, and any other resource of the 
Department of the Treasury available to the Secretary and the Secretary 
shall dedicate specific personnel to the Office.
    ``(r) Definitions.--In this section and section 314, the following 
definitions shall apply:
            ``(1) Affiliate.--The term `affiliate' means, with respect 
        to an insurer, any person who controls, is controlled by, or is 
        under common control with the insurer.
            ``(2) Covered agreement.--The term `covered agreement' means 
        a written bilateral or multilateral agreement regarding 
        prudential measures with respect to the business of insurance or 
        reinsurance that--
                    ``(A) is entered into between the United States and 
                one or more foreign governments, authorities, or 
                regulatory entities; and
                    ``(B) relates to the recognition of prudential 
                measures with respect to the business of insurance or 
                reinsurance that achieves a level of protection for 
                insurance or reinsurance consumers that is substantially 
                equivalent to the level of protection achieved under 
                State insurance or reinsurance regulation.
            ``(3) Insurer.--The term `insurer' means any person engaged 
        in the business of insurance, including reinsurance.
            ``(4) Federal financial regulatory agency.--The term 
        `Federal financial regulatory agency' means the Department of 
        the Treasury, the Board of Governors of the Federal Reserve 
        System, the Office of the Comptroller of the Currency, the 
        Office of Thrift Supervision, the Securities and Exchange 
        Commission, the Commodity Futures Trading Commission, the 
        Federal Deposit Insurance Corporation, the Federal Housing 
        Finance Agency, or the National Credit Union Administration.
            ``(5) Non-united states insurer.--The term `non-United 
        States insurer' means an insurer that is organized under the 
        laws of a jurisdiction other than a State, but does not include 
        any United States branch of such an insurer.
            ``(6) Office.--The term `Office' means the Federal Insurance 
        Office established by this section.
            ``(7) State insurance measure.--The term `State insurance 
        measure' means any State law, regulation, administrative ruling, 
        bulletin, guideline, or practice relating to or affecting 
        prudential measures applicable to insurance or reinsurance.
            ``(8) State insurance regulator.--The term `State insurance 
        regulator' means any State regulatory authority responsible for 
        the supervision of insurers.
            ``(9) Substantially equivalent to the level of protection 
        achieved.--The term `substantially equivalent to the level of 
        protection achieved' means the prudential measures of a foreign 
        government, authority, or regulatory entity achieve a similar 
        outcome in consumer protection as the outcome achieved under 
        State insurance or reinsurance regulation.
            ``(10) United states insurer.--The term `United States 
        insurer' means--

[[Page 124 STAT. 1588]]

                    ``(A) an insurer that is organized under the laws of 
                a State; or
                    ``(B) a United States branch of a non-United States 
                insurer.

    ``(s) Authorization of Appropriations.--There are authorized to be 
appropriated for the Office for each fiscal year such sums as may be 
necessary.
``SEC. 314. COVERED AGREEMENTS.

    ``(a) Authority.--The Secretary and the United States Trade 
Representative are authorized, jointly, to negotiate and enter into 
covered agreements on behalf of the United States.
    ``(b) Requirements for Consultation With Congress.--
            ``(1) In general.--Before initiating negotiations to enter 
        into a covered agreement under subsection (a), during such 
        negotiations, and before entering into any such agreement, the 
        Secretary and the United States Trade Representative shall 
        jointly consult with the Committee on Financial Services and the 
        Committee on Ways and Means of the House of Representatives and 
        the Committee on Banking, Housing, and Urban Affairs and the 
        Committee on Finance of the Senate.
            ``(2) Scope.--The consultation described in paragraph (1) 
        shall include consultation with respect to--
                    ``(A) the nature of the agreement;
                    ``(B) how and to what extent the agreement will 
                achieve the applicable purposes, policies, priorities, 
                and objectives of section 313 and this section; and
                    ``(C) the implementation of the agreement, including 
                the general effect of the agreement on existing State 
                laws.

    ``(c) Submission and Layover Provisions.--A covered agreement under 
subsection (a) may enter into force with respect to the United States 
only if--
            ``(1) the Secretary and the United States Trade 
        Representative jointly submit to the congressional committees 
        specified in subsection (b)(1), on a day on which both Houses of 
        Congress are in session, a copy of the final legal text of the 
        agreement; and
            ``(2) <<NOTE: Time period.>> a period of 90 calendar days 
        beginning on the date on which the copy of the final legal text 
        of the agreement is submitted to the congressional committees 
        under paragraph (1) has expired.''.

    (b) Duties of Secretary.--Section 321(a) of title 31, United States 
Code, is amended--
            (1) in paragraph (7), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (8)(C), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(9) advise the President on major domestic and 
        international prudential policy issues in connection with all 
        lines of insurance except health insurance.''.

    (c) Clerical Amendment.--The table of sections for subchapter I of 
chapter 3 of title 31, United States Code, is amended by striking the 
item relating to section 312 and inserting the following new items:

``Sec. 312. Terrorism and financial intelligence.
``Sec. 313. Federal Insurance Office.

[[Page 124 STAT. 1589]]

``Sec. 314. Covered agreements.
``Sec. 315. Continuing in office.''.

Subtitle <<NOTE: Nonadmitted and Reinsurance Reform Act of 2010. 15 USC 
8201 note.>>  B--State-Based Insurance Reform
SEC. 511. SHORT TITLE.

    This subtitle may be cited as the ``Nonadmitted and Reinsurance 
Reform Act of 2010''.
SEC. 512. <<NOTE: 15 USC 8201 note.>>  EFFECTIVE DATE.

    Except as otherwise specifically provided in this subtitle, this 
subtitle shall take effect upon the expiration of the 12-month period 
beginning on the date of the enactment of this subtitle.

                      PART I--NONADMITTED INSURANCE

SEC. 521. <<NOTE: 15 USC 8201.>> REPORTING, PAYMENT, AND 
                        ALLOCATION OF PREMIUM TAXES.

    (a) Home State's Exclusive Authority.--No State other than the home 
State of an insured may require any premium tax payment for nonadmitted 
insurance.
    (b) Allocation of Nonadmitted Premium Taxes.--
            (1) In general.--The States may enter into a compact or 
        otherwise establish procedures to allocate among the States the 
        premium taxes paid to an insured's home State described in 
        subsection (a).
            (2) <<NOTE: Applicability.>> Effective date.--Except as 
        expressly otherwise provided in such compact or other 
        procedures, any such compact or other procedures--
                    (A) if adopted on or before the expiration of the 
                330-day period that begins on the date of the enactment 
                of this subtitle, shall apply to any premium taxes that, 
                on or after such date of enactment, are required to be 
                paid to any State that is subject to such compact or 
                procedures; and
                    (B) if adopted after the expiration of such 330-day 
                period, shall apply to any premium taxes that, on or 
                after January 1 of the first calendar year that begins 
                after the expiration of such 330-day period, are 
                required to be paid to any State that is subject to such 
                compact or procedures.
            (3) Report.--Upon the expiration of the 330-day period 
        referred to in paragraph (2), the NAIC may submit a report to 
        the Committee on Financial Services and the Committee on the 
        Judiciary of the House of Representatives and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate identifying 
        and describing any compact or other procedures for allocation 
        among the States of premium taxes that have been adopted during 
        such period by any States.
            (4) Nationwide system.--The Congress intends that each State 
        adopt nationwide uniform requirements, forms, and procedures, 
        such as an interstate compact, that provide for the reporting, 
        payment, collection, and allocation of premium taxes for 
        nonadmitted insurance consistent with this section.

    (c) Allocation Based on Tax Allocation Report.--To facilitate the 
payment of premium taxes among the States, an insured's home State may 
require surplus lines brokers and insureds who

[[Page 124 STAT. 1590]]

have independently procured insurance to annually file tax allocation 
reports with the insured's home State detailing the portion of the 
nonadmitted insurance policy premium or premiums attributable to 
properties, risks, or exposures located in each State. The filing of a 
nonadmitted insurance tax allocation report and the payment of tax may 
be made by a person authorized by the insured to act as its agent.
SEC. 522. <<NOTE: 15 USC 8202.>> REGULATION OF NONADMITTED 
                        INSURANCE BY INSURED'S HOME STATE.

    (a) Home State Authority.--Except as otherwise provided in this 
section, the placement of nonadmitted insurance shall be subject to the 
statutory and regulatory requirements solely of the insured's home 
State.
    (b) Broker Licensing.--No State other than an insured's home State 
may require a surplus lines broker to be licensed in order to sell, 
solicit, or negotiate nonadmitted insurance with respect to such 
insured.
    (c) Enforcement Provision.--With respect to section 521 and 
subsections (a) and (b) of this section, any law, regulation, provision, 
or action of any State that applies or purports to apply to nonadmitted 
insurance sold to, solicited by, or negotiated with an insured whose 
home State is another State shall be preempted with respect to such 
application.
    (d) Workers' Compensation Exception.--This section may not be 
construed to preempt any State law, rule, or regulation that restricts 
the placement of workers' compensation insurance or excess insurance for 
self-funded workers' compensation plans with a nonadmitted insurer.
SEC. 523. <<NOTE: 15 USC 8203.>> PARTICIPATION IN NATIONAL 
                        PRODUCER DATABASE.

     <<NOTE: Time period.>> After the expiration of the 2-year period 
beginning on the date of the enactment of this subtitle, a State may not 
collect any fees relating to licensing of an individual or entity as a 
surplus lines broker in the State unless the State has in effect at such 
time laws or regulations that provide for participation by the State in 
the national insurance producer database of the NAIC, or any other 
equivalent uniform national database, for the licensure of surplus lines 
brokers and the renewal of such licenses.
SEC. 524. <<NOTE: 15 USC 8204.>>  UNIFORM STANDARDS FOR SURPLUS 
                        LINES ELIGIBILITY.

    A State may not--
            (1) impose eligibility requirements on, or otherwise 
        establish eligibility criteria for, nonadmitted insurers 
        domiciled in a United States jurisdiction, except in conformance 
        with such requirements and criteria in sections 5A(2) and 
        5C(2)(a) of the Non-Admitted Insurance Model Act, unless the 
        State has adopted nationwide uniform requirements, forms, and 
        procedures developed in accordance with section 521(b) of this 
        subtitle that include alternative nationwide uniform eligibility 
        requirements; or
            (2) prohibit a surplus lines broker from placing nonadmitted 
        insurance with, or procuring nonadmitted insurance from, a 
        nonadmitted insurer domiciled outside the United States that is 
        listed on the Quarterly Listing of Alien Insurers maintained by 
        the International Insurers Department of the NAIC.

[[Page 124 STAT. 1591]]

SEC. 525. <<NOTE: 15 USC 8205.>> STREAMLINED APPLICATION FOR 
                        COMMERCIAL PURCHASERS.

    A surplus lines broker seeking to procure or place nonadmitted 
insurance in a State for an exempt commercial purchaser shall not be 
required to satisfy any State requirement to make a due diligence search 
to determine whether the full amount or type of insurance sought by such 
exempt commercial purchaser can be obtained from admitted insurers if--
            (1) the broker procuring or placing the surplus lines 
        insurance has disclosed to the exempt commercial purchaser that 
        such insurance may or may not be available from the admitted 
        market that may provide greater protection with more regulatory 
        oversight; and
            (2) <<NOTE: Written request.>> the exempt commercial 
        purchaser has subsequently requested in writing the broker to 
        procure or place such insurance from a nonadmitted insurer.
SEC. 526. GAO STUDY OF NONADMITTED INSURANCE MARKET.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study of the nonadmitted insurance market to determine the 
effect of the enactment of this part on the size and market share of the 
nonadmitted insurance market for providing coverage typically provided 
by the admitted insurance market.
    (b) Contents.--The study shall determine and analyze--
            (1) the change in the size and market share of the 
        nonadmitted insurance market and in the number of insurance 
        companies and insurance holding companies providing such 
        business in the 18-month period that begins upon the effective 
        date of this subtitle;
            (2) the extent to which insurance coverage typically 
        provided by the admitted insurance market has shifted to the 
        nonadmitted insurance market;
            (3) the consequences of any change in the size and market 
        share of the nonadmitted insurance market, including differences 
        in the price and availability of coverage available in both the 
        admitted and nonadmitted insurance markets;
            (4) the extent to which insurance companies and insurance 
        holding companies that provide both admitted and nonadmitted 
        insurance have experienced shifts in the volume of business 
        between admitted and nonadmitted insurance; and
            (5) the extent to which there has been a change in the 
        number of individuals who have nonadmitted insurance policies, 
        the type of coverage provided under such policies, and whether 
        such coverage is available in the admitted insurance market.

    (c) Consultation With NAIC.--In conducting the study under this 
section, the Comptroller General shall consult with the NAIC.
    (d) Report.--The Comptroller General shall complete the study under 
this section and submit a report to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives regarding the findings of the study not 
later than 30 months after the effective date of this subtitle.
SEC. 527. <<NOTE: 15 USC 8206.>> DEFINITIONS.

    For purposes of this part, the following definitions shall apply:

[[Page 124 STAT. 1592]]

            (1) Admitted insurer.--The term ``admitted insurer'' means, 
        with respect to a State, an insurer licensed to engage in the 
        business of insurance in such State.
            (2) Affiliate.--The term ``affiliate'' means, with respect 
        to an insured, any entity that controls, is controlled by, or is 
        under common control with the insured.
            (3) Affiliated group.--The term ``affiliated group'' means 
        any group of entities that are all affiliated.
            (4) Control.--An entity has ``control'' over another entity 
        if--
                    (A) the entity directly or indirectly or acting 
                through 1 or more other persons owns, controls, or has 
                the power to vote 25 percent or more of any class of 
                voting securities of the other entity; or
                    (B) the entity controls in any manner the election 
                of a majority of the directors or trustees of the other 
                entity.
            (5) Exempt commercial purchaser.--The term ``exempt 
        commercial purchaser'' means any person purchasing commercial 
        insurance that, at the time of placement, meets the following 
        requirements:
                    (A) The person employs or retains a qualified risk 
                manager to negotiate insurance coverage.
                    (B) The person has paid aggregate nationwide 
                commercial property and casualty insurance premiums in 
                excess of $100,000 in the immediately preceding 12 
                months.
                    (C)(i) The person meets at least 1 of the following 
                criteria:
                          (I) The person possesses a net worth in excess 
                      of $20,000,000, as such amount is adjusted 
                      pursuant to clause (ii).
                          (II) The person generates annual revenues in 
                      excess of $50,000,000, as such amount is adjusted 
                      pursuant to clause (ii).
                          (III) The person employs more than 500 full-
                      time or full-time equivalent employees per 
                      individual insured or is a member of an affiliated 
                      group employing more than 1,000 employees in the 
                      aggregate.
                          (IV) The person is a not-for-profit 
                      organization or public entity generating annual 
                      budgeted expenditures of at least $30,000,000, as 
                      such amount is adjusted pursuant to clause (ii).
                          (V) The person is a municipality with a 
                      population in excess of 50,000 persons.
                    (ii) <<NOTE: Effective dates.>> Effective on the 
                fifth January 1 occurring after the date of the 
                enactment of this subtitle and each fifth January 1 
                occurring thereafter, the amounts in subclauses (I), 
                (II), and (IV) of clause (i) shall be adjusted to 
                reflect the percentage change for such 5-year period in 
                the Consumer Price Index for All Urban Consumers 
                published by the Bureau of Labor Statistics of the 
                Department of Labor.
            (6) Home state.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``home State'' means, with respect to an 
                insured--

[[Page 124 STAT. 1593]]

                          (i) the State in which an insured maintains 
                      its principal place of business or, in the case of 
                      an individual, the individual's principal 
                      residence; or
                          (ii) if 100 percent of the insured risk is 
                      located out of the State referred to in clause 
                      (i), the State to which the greatest percentage of 
                      the insured's taxable premium for that insurance 
                      contract is allocated.
                    (B) Affiliated groups.--If more than 1 insured from 
                an affiliated group are named insureds on a single 
                nonadmitted insurance contract, the term ``home State'' 
                means the home State, as determined pursuant to 
                subparagraph (A), of the member of the affiliated group 
                that has the largest percentage of premium attributed to 
                it under such insurance contract.
            (7) Independently procured insurance.--The term 
        ``independently procured insurance'' means insurance procured 
        directly by an insured from a nonadmitted insurer.
            (8) NAIC.--The term ``NAIC'' means the National Association 
        of Insurance Commissioners or any successor entity.
            (9) Nonadmitted insurance.--The term ``nonadmitted 
        insurance'' means any property and casualty insurance permitted 
        to be placed directly or through a surplus lines broker with a 
        nonadmitted insurer eligible to accept such insurance.
            (10) Non-admitted insurance model act.--The term ``Non-
        Admitted Insurance Model Act'' means the provisions of the Non-
        Admitted Insurance Model Act, as adopted by the NAIC on August 
        3, 1994, and amended on September 30, 1996, December 6, 1997, 
        October 2, 1999, and June 8, 2002.
            (11) Nonadmitted insurer.--The term ``nonadmitted 
        insurer''--
                    (A) means, with respect to a State, an insurer not 
                licensed to engage in the business of insurance in such 
                State; but
                    (B) does not include a risk retention group, as that 
                term is defined in section 2(a)(4) of the Liability Risk 
                Retention Act of 1986 (15 U.S.C. 3901(a)(4)).
            (12) Premium tax.--The term ``premium tax'' means, with 
        respect to surplus lines or independently procured insurance 
        coverage, any tax, fee, assessment, or other charge imposed by a 
        government entity directly or indirectly based on any payment 
        made as consideration for an insurance contract for such 
        insurance, including premium deposits, assessments, registration 
        fees, and any other compensation given in consideration for a 
        contract of insurance.
            (13) Qualified risk manager.--The term ``qualified risk 
        manager'' means, with respect to a policyholder of commercial 
        insurance, a person who meets all of the following requirements:
                    (A) The person is an employee of, or third-party 
                consultant retained by, the commercial policyholder.
                    (B) The person provides skilled services in loss 
                prevention, loss reduction, or risk and insurance 
                coverage analysis, and purchase of insurance.
                    (C) The person--
                          (i)(I) has a bachelor's degree or higher from 
                      an accredited college or university in risk 
                      management, business administration, finance, 
                      economics, or any

[[Page 124 STAT. 1594]]

                      other field determined by a State insurance 
                      commissioner or other State regulatory official or 
                      entity to demonstrate minimum competence in risk 
                      management; and
                          (II)(aa) has 3 years of experience in risk 
                      financing, claims administration, loss prevention, 
                      risk and insurance analysis, or purchasing 
                      commercial lines of insurance; or
                          (bb) has--
                                    (AA) a designation as a Chartered 
                                Property and Casualty Underwriter (in 
                                this subparagraph referred to as 
                                ``CPCU'') issued by the American 
                                Institute for CPCU/Insurance Institute 
                                of America;
                                    (BB) a designation as an Associate 
                                in Risk Management (ARM) issued by the 
                                American Institute for CPCU/Insurance 
                                Institute of America;
                                    (CC) a designation as Certified Risk 
                                Manager (CRM) issued by the National 
                                Alliance for Insurance Education & 
                                Research;
                                    (DD) a designation as a RIMS Fellow 
                                (RF) issued by the Global Risk 
                                Management Institute; or
                                    (EE) any other designation, 
                                certification, or license determined by 
                                a State insurance commissioner or other 
                                State insurance regulatory official or 
                                entity to demonstrate minimum competency 
                                in risk management;
                          (ii)(I) has at least 7 years of experience in 
                      risk financing, claims administration, loss 
                      prevention, risk and insurance coverage analysis, 
                      or purchasing commercial lines of insurance; and
                          (II) has any 1 of the designations specified 
                      in subitems (AA) through (EE) of clause 
                      (i)(II)(bb);
                          (iii) has at least 10 years of experience in 
                      risk financing, claims administration, loss 
                      prevention, risk and insurance coverage analysis, 
                      or purchasing commercial lines of insurance; or
                          (iv) has a graduate degree from an accredited 
                      college or university in risk management, business 
                      administration, finance, economics, or any other 
                      field determined by a State insurance commissioner 
                      or other State regulatory official or entity to 
                      demonstrate minimum competence in risk management.
            (14) Reinsurance.--The term ``reinsurance'' means the 
        assumption by an insurer of all or part of a risk undertaken 
        originally by another insurer.
            (15) Surplus lines broker.--The term ``surplus lines 
        broker'' means an individual, firm, or corporation which is 
        licensed in a State to sell, solicit, or negotiate insurance on 
        properties, risks, or exposures located or to be performed in a 
        State with nonadmitted insurers.
            (16) State.--The term ``State'' includes any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, the Northern Mariana Islands, the Virgin 
        Islands, and American Samoa.

[[Page 124 STAT. 1595]]

                          PART II--REINSURANCE

SEC. 531. <<NOTE: 15 USC 8221.>>  REGULATION OF CREDIT FOR 
                        REINSURANCE AND REINSURANCE AGREEMENTS.

    (a) Credit for Reinsurance.--If the State of domicile of a ceding 
insurer is an NAIC-accredited State, or has financial solvency 
requirements substantially similar to the requirements necessary for 
NAIC accreditation, and recognizes credit for reinsurance for the 
insurer's ceded risk, then no other State may deny such credit for 
reinsurance.
    (b) Additional Preemption of Extraterritorial Application of State 
Law.--In addition to the application of subsection (a), all laws, 
regulations, provisions, or other actions of a State that is not the 
domiciliary State of the ceding insurer, except those with respect to 
taxes and assessments on insurance companies or insurance income, are 
preempted to the extent that they--
            (1) restrict or eliminate the rights of the ceding insurer 
        or the assuming insurer to resolve disputes pursuant to 
        contractual arbitration to the extent such contractual provision 
        is not inconsistent with the provisions of title 9, United 
        States Code;
            (2) require that a certain State's law shall govern the 
        reinsurance contract, disputes arising from the reinsurance 
        contract, or requirements of the reinsurance contract;
            (3) attempt to enforce a reinsurance contract on terms 
        different than those set forth in the reinsurance contract, to 
        the extent that the terms are not inconsistent with this part; 
        or
            (4) otherwise apply the laws of the State to reinsurance 
        agreements of ceding insurers not domiciled in that State.
SEC. 532. <<NOTE: 15 USC 8222.>>  REGULATION OF REINSURER 
                        SOLVENCY.

    (a) Domiciliary State Regulation.--If the State of domicile of a 
reinsurer is an NAIC-accredited State or has financial solvency 
requirements substantially similar to the requirements necessary for 
NAIC accreditation, such State shall be solely responsible for 
regulating the financial solvency of the reinsurer.
    (b) Nondomiciliary States.--
            (1) Limitation on financial information requirements.--If 
        the State of domicile of a reinsurer is an NAIC-accredited State 
        or has financial solvency requirements substantially similar to 
        the requirements necessary for NAIC accreditation, no other 
        State may require the reinsurer to provide any additional 
        financial information other than the information the reinsurer 
        is required to file with its domiciliary State.
            (2) Receipt of information.--No provision of this section 
        shall be construed as preventing or prohibiting a State that is 
        not the State of domicile of a reinsurer from receiving a copy 
        of any financial statement filed with its domiciliary State.
SEC. 533. <<NOTE: 15 USC 8223.>>  DEFINITIONS.

    For purposes of this part, the following definitions shall apply:
            (1) Ceding insurer.--The term ``ceding insurer'' means an 
        insurer that purchases reinsurance.
            (2) Domiciliary state.--The terms ``State of domicile'' and 
        ``domiciliary State'' mean, with respect to an insurer or

[[Page 124 STAT. 1596]]

        reinsurer, the State in which the insurer or reinsurer is 
        incorporated or entered through, and licensed.
            (3) NAIC.--The term ``NAIC'' means the National Association 
        of Insurance Commissioners or any successor entity.
            (4) Reinsurance.--The term ``reinsurance'' means the 
        assumption by an insurer of all or part of a risk undertaken 
        originally by another insurer.
            (5) Reinsurer.--
                    (A) In general.--The term ``reinsurer'' means an 
                insurer to the extent that the insurer--
                          (i) is principally engaged in the business of 
                      reinsurance;
                          (ii) does not conduct significant amounts of 
                      direct insurance as a percentage of its net 
                      premiums; and
                          (iii) is not engaged in an ongoing basis in 
                      the business of soliciting direct insurance.
                    (B) Determination.--A determination of whether an 
                insurer is a reinsurer shall be made under the laws of 
                the State of domicile in accordance with this paragraph.
            (6) State.--The term ``State'' includes any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, the Northern Mariana Islands, the Virgin 
        Islands, and American Samoa.

                     PART III--RULE OF CONSTRUCTION

SEC. 541. <<NOTE: 15 USC 8231.>> RULE OF CONSTRUCTION.

    Nothing in this subtitle or the amendments made by this subtitle 
shall be construed to modify, impair, or supersede the application of 
the antitrust laws. Any implied or actual conflict between this subtitle 
and any amendments to this subtitle and the antitrust laws shall be 
resolved in favor of the operation of the antitrust laws.
SEC. 542. <<NOTE: 15 USC 8232.>>  SEVERABILITY.

    If any section or subsection of this subtitle, or any application of 
such provision to any person or circumstance, is held to be 
unconstitutional, the remainder of this subtitle, and the application of 
the provision to any other person or circumstance, shall not be 
affected.

 TITLE VI--IMPROVEMENTS TO <<NOTE: Bank and Savings Association Holding 
   Company and Depository Institution Regulatory Improvements Act of 
 2010. 12 USC 1811 note.>>  REGULATION OF BANK AND SAVINGS ASSOCIATION 
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
SEC. 601. SHORT TITLE.

    This title may be cited as the ``Bank and Savings Association 
Holding Company and Depository Institution Regulatory Improvements Act 
of 2010''.
SEC. 602. <<NOTE: 12 USC 1815 note.>>  DEFINITION.

    For purposes of this title, a company is a ``commercial firm'' if 
the annual gross revenues derived by the company and all of its 
affiliates from activities that are financial in nature (as defined

[[Page 124 STAT. 1597]]

in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(k))) and, if applicable, from the ownership or control of one or 
more insured depository institutions, represent less than 15 percent of 
the consolidated annual gross revenues of the company.
SEC. 603. MORATORIUM AND STUDY ON TREATMENT OF CREDIT CARD BANKS, 
                        INDUSTRIAL LOAN COMPANIES, AND CERTAIN 
                        OTHER COMPANIES UNDER THE BANK HOLDING 
                        COMPANY ACT OF 1956.

    (a) <<NOTE: 12 USC 1815 note.>>  Moratorium.--
            (1) Definitions.--In this subsection--
                    (A) the term ``credit card bank'' means an 
                institution described in section 2(c)(2)(F) of the Bank 
                Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                    (B) the term ``industrial bank'' means an 
                institution described in section 2(c)(2)(H) of the Bank 
                Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)(H)); 
                and
                    (C) the term ``trust bank'' means an institution 
                described in section 2(c)(2)(D) of the Bank Holding 
                Company Act of 1956 (12 U.S.C. 1841(c)(2)(D)).
            (2) Moratorium on provision of deposit insurance.--The 
        Corporation may not approve an application for deposit insurance 
        under section 5 of the Federal Deposit Insurance Act (12 U.S.C. 
        1815) that is received after November 23, 2009, for an 
        industrial bank, a credit card bank, or a trust bank that is 
        directly or indirectly owned or controlled by a commercial firm.
            (3) Change in control.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the appropriate Federal banking agency shall 
                disapprove a change in control, as provided in section 
                7(j) of the Federal Deposit Insurance Act (12 U.S.C. 
                1817(j)), of an industrial bank, a credit card bank, or 
                a trust bank if the change in control would result in 
                direct or indirect control of the industrial bank, 
                credit card bank, or trust bank by a commercial firm.
                    (B) Exceptions.--Subparagraph (A) shall not apply to 
                a change in control of an industrial bank, credit card 
                bank, or trust bank--
                          (i) that--
                                    (I) is in danger of default, as 
                                determined by the appropriate Federal 
                                banking agency;
                                    (II) results from the merger or 
                                whole acquisition of a commercial firm 
                                that directly or indirectly controls the 
                                industrial bank, credit card bank, or 
                                trust bank in a bona fide merger with or 
                                acquisition by another commercial firm, 
                                as determined by the appropriate Federal 
                                banking agency; or
                                    (III) results from an acquisition of 
                                voting shares of a publicly traded 
                                company that controls an industrial 
                                bank, credit card bank, or trust bank, 
                                if, after the acquisition, the acquiring 
                                shareholder (or group of shareholders 
                                acting in concert) holds less than 25 
                                percent of any class of the voting 
                                shares of the company; and

[[Page 124 STAT. 1598]]

                          (ii) that has obtained all regulatory 
                      approvals otherwise required for such change of 
                      control under any applicable Federal or State law, 
                      including section 7(j) of the Federal Deposit 
                      Insurance Act (12 U.S.C. 1817(j)).
            (4) Sunset.--This subsection shall cease to have effect 3 
        years after the date of enactment of this Act.

    (b) Government Accountability Office Study of Exceptions Under the 
Bank Holding Company Act of 1956.--
            (1) Study required.--The Comptroller General of the United 
        States shall carry out a study to determine whether it is 
        necessary, in order to strengthen the safety and soundness of 
        institutions or the stability of the financial system, to 
        eliminate the exceptions under section 2 of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1841) for institutions described 
        in--
                    (A) section 2(a)(5)(E) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(a)(5)(E));
                    (B) section 2(a)(5)(F) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(a)(5)(F));
                    (C) section 2(c)(2)(D) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(D));
                    (D) section 2(c)(2)(F) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(F));
                    (E) section 2(c)(2)(H) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(H)); and
                    (F) section 2(c)(2)(B) of the Bank Holding Company 
                Act of 1956 (12 U.S.C. 1841(c)(2)(B)).
            (2) Content of study.--
                    (A) In general.--The study required under paragraph 
                (1), with respect to the institutions referenced in each 
                of subparagraphs (A) through (E) of paragraph (1), 
                shall, to the extent feasible be based on information 
                provided to the Comptroller General by the appropriate 
                Federal or State regulator, and shall--
                          (i) identify the types and number of 
                      institutions excepted from section 2 of the Bank 
                      Holding Company Act of 1956 (12 U.S.C. 1841) under 
                      each of the subparagraphs described in 
                      subparagraphs (A) through (E) of paragraph (1);
                          (ii) generally describe the size and 
                      geographic locations of the institutions described 
                      in clause (i);
                          (iii) determine the extent to which the 
                      institutions described in clause (i) are held by 
                      holding companies that are commercial firms;
                          (iv) determine whether the institutions 
                      described in clause (i) have any affiliates that 
                      are commercial firms;
                          (v) identify the Federal banking agency 
                      responsible for the supervision of the 
                      institutions described in clause (i) on and after 
                      the transfer date;
                          (vi) determine the adequacy of the Federal 
                      bank regulatory framework applicable to each 
                      category of institution described in clause (i), 
                      including any restrictions (including limitations 
                      on affiliate transactions or cross-marketing) that 
                      apply to transactions between

[[Page 124 STAT. 1599]]

                      an institution, the holding company of the 
                      institution, and any other affiliate of the 
                      institution; and
                          (vii) evaluate the potential consequences of 
                      subjecting the institutions described in clause 
                      (i) to the requirements of the Bank Holding 
                      Company Act of 1956, including with respect to the 
                      availability and allocation of credit, the 
                      stability of the financial system and the economy, 
                      the safe and sound operation of each category of 
                      institution, and the impact on the types of 
                      activities in which such institutions, and the 
                      holding companies of such institutions, may 
                      engage.
                    (B) Savings associations.--With respect to 
                institutions described in paragraph (1)(F), the study 
                required under paragraph (1) shall--
                          (i) determine the adequacy of the Federal bank 
                      regulatory framework applicable to such 
                      institutions, including any restrictions 
                      (including limitations on affiliate transactions 
                      or cross-marketing) that apply to transactions 
                      between an institution, the holding company of the 
                      institution, and any other affiliate of the 
                      institution; and
                          (ii) evaluate the potential consequences of 
                      subjecting the institutions described in paragraph 
                      (1)(F) to the requirements of the Bank Holding 
                      Company Act of 1956, including with respect to the 
                      availability and allocation of credit, the 
                      stability of the financial system and the economy, 
                      the safe and sound operation of such institutions, 
                      and the impact on the types of activities in which 
                      such institutions, and the holding companies of 
                      such institutions, may engage.
            (3) Report.--Not later than 18 months after the date of 
        enactment of this Act, the Comptroller General shall submit to 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives a report on the study required under paragraph 
        (1).
SEC. 604. REPORTS AND EXAMINATIONS OF HOLDING COMPANIES; 
                        REGULATION OF FUNCTIONALLY REGULATED 
                        SUBSIDIARIES.

    (a) Reports by Bank Holding Companies.--Sections 5(c)(1) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1844(c)(1)) is amended--
            (1) by striking subclause (A)(ii) and inserting the 
        following:
                          ``(ii) compliance by the bank holding company 
                      or subsidiary with--
                                    ``(I) this Act;
                                    ``(II) Federal laws that the Board 
                                has specific jurisdiction to enforce 
                                against the company or subsidiary; and
                                    ``(III) other than in the case of an 
                                insured depository institution or 
                                functionally regulated subsidiary, any 
                                other applicable provision of Federal 
                                law.'';
            (2) by striking subparagraph (B) and inserting the 
        following:

[[Page 124 STAT. 1600]]

                    ``(B) Use of existing reports and other supervisory 
                information.--The Board shall, to the fullest extent 
                possible, use--
                          ``(i) reports and other supervisory 
                      information that the bank holding company or any 
                      subsidiary thereof has been required to provide to 
                      other Federal or State regulatory agencies;
                          ``(ii) externally audited financial statements 
                      of the bank holding company or subsidiary;
                          ``(iii) information otherwise available from 
                      Federal or State regulatory agencies; and
                          ``(iv) information that is otherwise required 
                      to be reported publicly.''; and
            (3) by adding at the end the following:
                    ``(C) Availability.--Upon the request of the Board, 
                the bank holding company or a subsidiary of the bank 
                holding company shall promptly provide to the Board any 
                information described in clauses (i) through (iii) of 
                subparagraph (B).''.

    (b) Examinations of Bank Holding Companies.--Section 5(c)(2) of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1844(c)(2)) is amended to 
read as follows:
            ``(2) Examinations.--
                    ``(A) In general.--Subject to subtitle B of the 
                Consumer Financial Protection Act of 2010, the Board may 
                make examinations of a bank holding company and each 
                subsidiary of a bank holding company in order to--
                          ``(i) inform the Board of--
                                    ``(I) the nature of the operations 
                                and financial condition of the bank 
                                holding company and the subsidiary;
                                    ``(II) the financial, operational, 
                                and other risks within the bank holding 
                                company system that may pose a threat 
                                to--
                                            ``(aa) the safety and 
                                        soundness of the bank holding 
                                        company or of any depository 
                                        institution subsidiary of the 
                                        bank holding company; or
                                            ``(bb) the stability of the 
                                        financial system of the United 
                                        States; and
                                    ``(III) the systems of the bank 
                                holding company for monitoring and 
                                controlling the risks described in 
                                subclause (II); and
                          ``(ii) monitor the compliance of the bank 
                      holding company and the subsidiary with--
                                    ``(I) this Act;
                                    ``(II) Federal laws that the Board 
                                has specific jurisdiction to enforce 
                                against the company or subsidiary; and
                                    ``(III) other than in the case of an 
                                insured depository institution or 
                                functionally regulated subsidiary, any 
                                other applicable provisions of Federal 
                                law.
                    ``(B) Use of reports to reduce examinations.--For 
                purposes of this paragraph, the Board shall, to the 
                fullest extent possible, rely on--

[[Page 124 STAT. 1601]]

                          ``(i) examination reports made by other 
                      Federal or State regulatory agencies relating to a 
                      bank holding company and any subsidiary of a bank 
                      holding company; and
                          ``(ii) the reports and other information 
                      required under paragraph (1).
                    ``(C) Coordination with other regulators.--The Board 
                shall--
                          ``(i) <<NOTE: Notice. Consultation.>> provide 
                      reasonable notice to, and consult with, the 
                      appropriate Federal banking agency, the Securities 
                      and Exchange Commission, the Commodity Futures 
                      Trading Commission, or State regulatory agency, as 
                      appropriate, for a subsidiary that is a depository 
                      institution or a functionally regulated subsidiary 
                      of a bank holding company before commencing an 
                      examination of the subsidiary under this section; 
                      and
                          ``(ii) to the fullest extent possible, avoid 
                      duplication of examination activities, reporting 
                      requirements, and requests for information.''.

    (c) Authority To Regulate Functionally Regulated Subsidiaries of 
Bank Holding Companies.--The Bank Holding Company Act of 1956 (12 U.S.C. 
1841 et seq.) is amended--
            (1) in section 5(c)(5)(B) (12 U.S.C. 1844(c)(5)(B)), by 
        striking clause (v) and inserting the following:
                          ``(v) an entity that is subject to regulation 
                      by, or registration with, the Commodity Futures 
                      Trading Commission, with respect to activities 
                      conducted as a futures commission merchant, 
                      commodity trading adviser, commodity pool, 
                      commodity pool operator, swap execution facility, 
                      swap data repository, swap dealer, major swap 
                      participant, and activities that are incidental to 
                      such commodities and swaps activities.''; and
            (2) by striking section 10A (12 U.S.C. 1848a).

    (d) Acquisitions of Banks.--Section 3(c) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1842(c)) is amended by adding at the end the 
following:
            ``(7) Financial stability.--In every case, the Board shall 
        take into consideration the extent to which a proposed 
        acquisition, merger, or consolidation would result in greater or 
        more concentrated risks to the stability of the United States 
        banking or financial system.''.

    (e) Acquisitions of Nonbanks.--
            (1) Notice procedures.--Section 4(j)(2)(A) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1843(j)(2)(A)) is amended 
        by striking ``or unsound banking practices'' and inserting 
        ``unsound banking practices, or risk to the stability of the 
        United States banking or financial system''.
            (2) Activities that are financial in nature.--Section 
        4(k)(6)(B) of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1843(k)(6)(B)) is amended to read as follows:
                    ``(B) Approval not required for certain financial 
                activities.--
                          ``(i) In general.--Except as provided in 
                      subsection (j) with regard to the acquisition of a 
                      savings association and clause (ii), a financial 
                      holding company may

[[Page 124 STAT. 1602]]

                      commence any activity, or acquire any company, 
                      pursuant to paragraph (4) or any regulation 
                      prescribed or order issued under paragraph (5), 
                      without prior approval of the Board.
                          ``(ii) Exception.--A financial holding company 
                      may not acquire a company, without the prior 
                      approval of the Board, in a transaction in which 
                      the total consolidated assets to be acquired by 
                      the financial holding company exceed 
                      $10,000,000,000.
                          ``(iii) Hart-Scott-Rodino filing 
                      requirement.--Solely for purposes of section 
                      7A(c)(8) of the Clayton Act (15 U.S.C. 18a(c)(8)), 
                      the transactions subject to the requirements of 
                      this paragraph shall be treated as if the approval 
                      of the Board is not required.''.

    (f) Bank Merger Act Transactions.--Section 18(c)(5) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(c)(5)) is amended, in the matter 
immediately following subparagraph (B), by striking ``and the 
convenience and needs of the community to be served'' and inserting 
``the convenience and needs of the community to be served, and the risk 
to the stability of the United States banking or financial system''.
    (g) Reports by Savings and Loan Holding Companies.--Section 10(b)(2) 
of the Home Owners' Loan Act (12 U.S.C. 1467a(b)(2) is amended--
            (1) by striking ``Each savings'' and inserting the 
        following:
                    ``(A) In general.--Each savings''; and
            (2) by adding at the end the following:
                    ``(B) Use of existing reports and other supervisory 
                information.--The Board shall, to the fullest extent 
                possible, use--
                          ``(i) reports and other supervisory 
                      information that the savings and loan holding 
                      company or any subsidiary thereof has been 
                      required to provide to other Federal or State 
                      regulatory agencies;
                          ``(ii) externally audited financial statements 
                      of the savings and loan holding company or 
                      subsidiary;
                          ``(iii) information that is otherwise 
                      available from Federal or State regulatory 
                      agencies; and
                          ``(iv) information that is otherwise required 
                      to be reported publicly.
                    ``(C) Availability.--Upon the request of the Board, 
                a savings and loan holding company or a subsidiary of a 
                savings and loan holding company shall promptly provide 
                to the Board any information described in clauses (i) 
                through (iii) of subparagraph (B).''.

    (h) Examination of Savings and Loan Holding Companies.--
            (1) Definitions.--Section 2 of the Home Owners' Loan Act (12 
        U.S.C. 1462) is amended by adding at the end the following:
            ``(10) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the same meaning as in 
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).
            ``(11) Functionally regulated subsidiary.--The term 
        `functionally regulated subsidiary' has the same meaning as in 
        section 5(c)(5) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1844(c)(5)).''.

[[Page 124 STAT. 1603]]

            (2) Examination.--Section 10(b) of the Home Owners' Loan Act 
        (12 U.S.C. 1467a(b)) is amended by striking paragraph (4) and 
        inserting the following:
            ``(4) Examinations.--
                    ``(A) In general.--Subject to subtitle B of the 
                Consumer Financial Protection Act of 2010, the Board may 
                make examinations of a savings and loan holding company 
                and each subsidiary of a savings and loan holding 
                company system, in order to--
                          ``(i) inform the Board of--
                                    ``(I) the nature of the operations 
                                and financial condition of the savings 
                                and loan holding company and the 
                                subsidiary;
                                    ``(II) the financial, operational, 
                                and other risks within the savings and 
                                loan holding company system that may 
                                pose a threat to--
                                            ``(aa) the safety and 
                                        soundness of the savings and 
                                        loan holding company or of any 
                                        depository institution 
                                        subsidiary of the savings and 
                                        loan holding company; or
                                            ``(bb) the stability of the 
                                        financial system of the United 
                                        States; and
                                    ``(III) the systems of the savings 
                                and loan holding company for monitoring 
                                and controlling the risks described in 
                                subclause (II); and
                          ``(ii) monitor the compliance of the savings 
                      and loan holding company and the subsidiary with--
                                    ``(I) this Act;
                                    ``(II) Federal laws that the Board 
                                has specific jurisdiction to enforce 
                                against the company or subsidiary; and
                                    ``(III) other than in the case of an 
                                insured depository institution or 
                                functionally regulated subsidiary, any 
                                other applicable provisions of Federal 
                                law.
                    ``(B) Use of reports to reduce examinations.--For 
                purposes of this subsection, the Board shall, to the 
                fullest extent possible, rely on--
                          ``(i) the examination reports made by other 
                      Federal or State regulatory agencies relating to a 
                      savings and loan holding company and any 
                      subsidiary; and
                          ``(ii) the reports and other information 
                      required under paragraph (2).
                    ``(C) Coordination with other regulators.--The Board 
                shall--
                          ``(i) <<NOTE: Notice. Consultation.>>  provide 
                      reasonable notice to, and consult with, the 
                      appropriate Federal banking agency, the Securities 
                      and Exchange Commission, the Commodity Futures 
                      Trading Commission, or State regulatory agency, as 
                      appropriate, for a subsidiary that is a depository 
                      institution or a functionally regulated subsidiary 
                      of a savings and loan holding company before 
                      commencing an examination of the subsidiary under 
                      this section; and
                          ``(ii) to the fullest extent possible, avoid 
                      duplication of examination activities, reporting 
                      requirements, and requests for information.''.

[[Page 124 STAT. 1604]]

    (i) Definition of the Term ``Savings and Loan Holding Company''.--
Section 10(a)(1)(D)(ii) of the Home Owners' Loan Act (12 U.S.C. 
1467a(a)(1)(D)(ii)) is amended to read as follows:
                          ``(ii) Exclusion.--The term `savings and loan 
                      holding company' does not include--
                                    ``(I) a bank holding company that is 
                                registered under, and subject to, the 
                                Bank Holding Company Act of 1956 (12 
                                U.S.C. 1841 et seq.), or to any company 
                                directly or indirectly controlled by 
                                such company (other than a savings 
                                association);
                                    ``(II) a company that controls a 
                                savings association that functions 
                                solely in a trust or fiduciary capacity 
                                as described in section 2(c)(2)(D) of 
                                the Bank Holding Company Act of 1956 (12 
                                U.S.C. 1841(c)(2)(D)); or
                                    ``(III) a company described in 
                                subsection (c)(9)(C) solely by virtue of 
                                such company's control of an 
                                intermediate holding company established 
                                pursuant to section 10A.''.

    (j) <<NOTE: 12 USC 1462 note.>>  Effective Date.--The amendments 
made by this section shall take effect on the transfer date.
SEC. 605. ASSURING CONSISTENT OVERSIGHT OF PERMISSIBLE ACTIVITIES 
                        OF DEPOSITORY INSTITUTION SUBSIDIARIES OF 
                        HOLDING COMPANIES.

    (a) In General.--The Federal Deposit Insurance Act (12 U.S.C. 1811 
et seq.) is amended by inserting after section 25 the following new 
section:
``SEC. 26. <<NOTE: 12 USC 1831c.>>  ASSURING CONSISTENT OVERSIGHT 
                      OF SUBSIDIARIES OF HOLDING COMPANIES.

    ``(a) Definitions.--For purposes of this section:
            ``(1) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.
            ``(2) Functionally regulated subsidiary.--The term 
        `functionally regulated subsidiary' has the same meaning as in 
        section 5(c)(5) of the Bank Holding Company Act.
            ``(3) Lead insured depository institution.--The term `lead 
        insured depository institution' has the same meaning as in 
        section 2(o)(8) of the Bank Holding Company Act.

    ``(b) Examination Requirements.--Subject to subtitle B of the 
Consumer Financial Protection Act of 2010, the Board shall examine the 
activities of a nondepository institution subsidiary (other than a 
functionally regulated subsidiary or a subsidiary of a depository 
institution) of a depository institution holding company that are 
permissible for the insured depository institution subsidiaries of the 
depository institution holding company in the same manner, subject to 
the same standards, and with the same frequency as would be required if 
such activities were conducted in the lead insured depository 
institution of the depository institution holding company.
    ``(c) State Coordination.--
            ``(1) Consultation and coordination.--If a nondepository 
        institution subsidiary is supervised by a State bank supervisor 
        or other State regulatory authority, the Board, in conducting 
        the examinations required in subsection (b), shall consult and 
        coordinate with such State regulator.

[[Page 124 STAT. 1605]]

            ``(2) Alternating examinations permitted.--The examinations 
        required under subsection (b) may be conducted in joint or 
        alternating manner with a State regulator, if the Board 
        determines that an examination of a nondepository institution 
        subsidiary conducted by the State carries out the purposes of 
        this section.

    ``(d) Appropriate Federal Banking Agency Backup Examination 
Authority.--
            ``(1) In general.--In the event that the Board does not 
        conduct examinations required under subsection (b) in the same 
        manner, subject to the same standards, and with the same 
        frequency as would be required if such activities were conducted 
        by the lead insured depository institution subsidiary of the 
        depository institution holding company, the appropriate Federal 
        banking agency for the lead insured depository institution may 
        recommend in writing (which shall include a written explanation 
        of the concerns giving rise to the recommendation) that the 
        Board perform the examination required under subsection (b).
            ``(2) Examination by an appropriate federal banking 
        agency.--If the <<NOTE: Time period.>>  Board does not, before 
        the end of the 60-day period beginning on the date on which the 
        Board receives a recommendation under paragraph (1), begin an 
        examination as required under subsection (b) or provide a 
        written explanation or plan to the appropriate Federal banking 
        agency making such recommendation responding to the concerns 
        raised by the appropriate Federal banking agency for the lead 
        insured depository institution, the appropriate Federal banking 
        agency for the lead insured depository institution may, subject 
        to the Consumer Financial Protection Act of 2010, examine the 
        activities that are permissible for a depository institution 
        subsidiary conducted by such nondepository institution 
        subsidiary (other than a functionally regulated subsidiary or a 
        subsidiary of a depository institution) of the depository 
        institution holding company as if the nondepository institution 
        subsidiary were an insured depository institution for which the 
        appropriate Federal banking agency of the lead insured 
        depository institution was the appropriate Federal banking 
        agency, to determine whether the activities--
                    ``(A) pose a material threat to the safety and 
                soundness of any insured depository institution 
                subsidiary of the depository institution holding 
                company;
                    ``(B) are conducted in accordance with applicable 
                Federal law; and
                    ``(C) are subject to appropriate systems for 
                monitoring and controlling the financial, operating, and 
                other material risks of the activities that may pose a 
                material threat to the safety and soundness of the 
                insured depository institution subsidiaries of the 
                holding company.
            ``(3) Agency coordination with the board.--An appropriate 
        Federal banking agency that conducts an examination pursuant to 
        paragraph (2) shall coordinate examination of the activities of 
        nondepository institution subsidiaries described in subsection 
        (b) with the Board in a manner that--
                    ``(A) avoids duplication;
                    ``(B) shares information relevant to the supervision 
                of the depository institution holding company;

[[Page 124 STAT. 1606]]

                    ``(C) achieves the objectives of subsection (b); and
                    ``(D) ensures that the depository institution 
                holding company and the subsidiaries of the depository 
                institution holding company are not subject to 
                conflicting supervisory demands by such agency and the 
                Board.
            ``(4) Fee permitted for examination costs.--An appropriate 
        Federal banking agency that conducts an examination or 
        enforcement action pursuant to this section may collect an 
        assessment, fee, or such other charge from the subsidiary as the 
        appropriate Federal banking agency determines necessary or 
        appropriate to carry out the responsibilities of the appropriate 
        Federal banking agency in connection with such examination.

    ``(e) Referrals for Enforcement by Appropriate Federal Banking 
Agency.--
            ``(1) Recommendation of enforcement action.--The appropriate 
        Federal banking agency for the lead insured depository 
        institution, based upon its examination of a nondepository 
        institution subsidiary conducted pursuant to subsection (d), or 
        other relevant information, may submit to the Board, in writing, 
        a recommendation that the Board take enforcement action against 
        such nondepository institution subsidiary, together with an 
        explanation of the concerns giving rise to the recommendation, 
        if the appropriate Federal banking agency determines (by a vote 
        of its members, if applicable) that the activities of the 
        nondepository institution subsidiary pose a material threat to 
        the safety and soundness of any insured depository institution 
        subsidiary of the depository institution holding company.
            ``(2) Back-up authority of the appropriate federal banking 
        agency.--If, within <<NOTE: Time period.>>  the 60-day period 
        beginning on the date on which the Board receives a 
        recommendation under paragraph (1), the Board does not take 
        enforcement action against the nondepository institution 
        subsidiary or provide a plan for supervisory or enforcement 
        action that is acceptable to the appropriate Federal banking 
        agency that made the recommendation pursuant to paragraph (1), 
        such agency may take the recommended enforcement action against 
        the nondepository institution subsidiary, in the same manner as 
        if the nondepository institution subsidiary were an insured 
        depository institution for which the agency was the appropriate 
        Federal banking agency.

    ``(f) Coordination Among Appropriate Federal Banking Agencies.--Each 
Federal banking agency, prior to or when exercising authority under 
subsection (d) or (e) shall--
            ``(1) <<NOTE: Notice. Consultation.>>  provide reasonable 
        notice to, and consult with, the appropriate Federal banking 
        agency or State bank supervisor (or other State regulatory 
        agency) of the nondepository institution subsidiary of a 
        depository institution holding company that is described in 
        subsection (d) before commencing any examination of the 
        subsidiary;
            ``(2) to the fullest extent possible--
                    ``(A) rely on the examinations, inspections, and 
                reports of the appropriate Federal banking agency or the 
                State bank supervisor (or other State regulatory agency) 
                of the subsidiary;

[[Page 124 STAT. 1607]]

                    ``(B) avoid duplication of examination activities, 
                reporting requirements, and requests for information; 
                and
                    ``(C) ensure that the depository institution holding 
                company and the subsidiaries of the depository 
                institution holding company are not subject to 
                conflicting supervisory demands by the appropriate 
                Federal banking agencies.

    ``(g) Rule of Construction.--No provision of this section shall be 
construed as limiting any authority of the Board, the Corporation, or 
the Comptroller of the Currency under any other provision of law.''.
    (b) <<NOTE: 12 USC 1831c note.>>  Effective Date.--The amendment 
made by subsection (a) shall take effect on the transfer date.
SEC. 606. REQUIREMENTS FOR FINANCIAL HOLDING COMPANIES TO REMAIN 
                        WELL CAPITALIZED AND WELL MANAGED.

    (a) Amendment.--Section 4(l)(1) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(l)(1)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) by redesignating subparagraph (C) as subparagraph (D);
            (3) by inserting after subparagraph (B) the following:
                    ``(C) the bank holding company is well capitalized 
                and well managed; and''; and
            (4) in subparagraph (D)(ii), as so redesignated, by striking 
        ``subparagraphs (A) and (B)'' and inserting ``subparagraphs (A), 
        (B), and (C)''.

    (b) Home Owners' Loan Act Amendment.--Section 10(c)(2) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(c)(2)) is amended by adding at the end 
the following new subparagraph:
                    ``(H) Any activity that is permissible for a 
                financial holding company (as such term is defined under 
                section 2(p) of the Bank Holding Company Act of 1956 (12 
                U.S.C. 1841(p)) to conduct under section 4(k) of the 
                Bank Holding Company Act of 1956 if--
                          ``(i) the savings and loan holding company 
                      meets all of the criteria to qualify as a 
                      financial holding company, and complies with all 
                      of the requirements applicable to a financial 
                      holding company, under sections 4(l) and 4(m) of 
                      the Bank Holding Company Act and section 804(c) of 
                      the Community Reinvestment Act of 1977 (12 U.S.C. 
                      2903(c)) as if the savings and loan holding 
                      company was a bank holding company; and
                          ``(ii) the savings and loan holding company 
                      conducts the activity in accordance with the same 
                      terms, conditions, and requirements that apply to 
                      the conduct of such activity by a bank holding 
                      company under the Bank Holding Company Act of 1956 
                      and the Board's regulations and interpretations 
                      under such Act.''.

    (c) <<NOTE: 12 USC 1467a note.>>  Effective Date.--The amendments 
made by this section shall take effect on the transfer date.
SEC. 607. STANDARDS FOR INTERSTATE ACQUISITIONS.

    (a) Acquisition of Banks.--Section 3(d)(1)(A) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1842(d)(1)(A)) is amended by striking 
``adequately capitalized and adequately managed'' and inserting ``well 
capitalized and well managed''.

[[Page 124 STAT. 1608]]

    (b) Interstate Bank Mergers.--Section 44(b)(4)(B) of the Federal 
Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended by striking 
``will continue to be adequately capitalized and adequately managed'' 
and inserting ``will be well capitalized and well managed''.
    (c) <<NOTE: 12 USC 1831u note.>>  Effective Date.--The amendments 
made by this section shall take effect on the transfer date.
SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANSACTIONS 
                        WITH AFFILIATES.

    (a) Affiliate Transactions.--Section 23A of the Federal Reserve Act 
(12 U.S.C. 371c) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking subparagraph (D) 
                and inserting the following:
                    ``(D) any investment fund with respect to which a 
                member bank or affiliate thereof is an investment 
                adviser; and''; and
                    (B) in paragraph (7)--
                          (i) in subparagraph (A), by inserting before 
                      the semicolon at the end the following: ``, 
                      including a purchase of assets subject to an 
                      agreement to repurchase'';
                          (ii) in subparagraph (C), by striking ``, 
                      including assets subject to an agreement to 
                      repurchase,'';
                          (iii) in subparagraph (D)--
                                    (I) by inserting ``or other debt 
                                obligations'' after ``acceptance of 
                                securities''; and
                                    (II) by striking ``or'' at the end; 
                                and
                          (iv) by adding at the end the following:
                    ``(F) a transaction with an affiliate that involves 
                the borrowing or lending of securities, to the extent 
                that the transaction causes a member bank or a 
                subsidiary to have credit exposure to the affiliate; or
                    ``(G) a derivative transaction, as defined in 
                paragraph (3) of section 5200(b) of the Revised Statutes 
                of the United States (12 U.S.C. 84(b)), with an 
                affiliate, to the extent that the transaction causes a 
                member bank or a subsidiary to have credit exposure to 
                the affiliate;'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                          (i) in the matter preceding subparagraph (A), 
                      by striking ``subsidiary'' and all that follows 
                      through ``time of the transaction'' and inserting 
                      ``subsidiary, and any credit exposure of a member 
                      bank or a subsidiary to an affiliate resulting 
                      from a securities borrowing or lending 
                      transaction, or a derivative transaction, shall be 
                      secured at all times''; and
                          (ii) in each of subparagraphs (A) through (D), 
                      by striking ``or letter of credit'' and inserting 
                      ``letter of credit, or credit exposure'';
                    (B) by striking paragraph (2);
                    (C) by redesignating paragraphs (3) through (5) as 
                paragraphs (2) through (4), respectively;
                    (D) in paragraph (2), as so redesignated, by 
                inserting before the period at the end ``, or credit 
                exposure to an affiliate resulting from a securities 
                borrowing or lending transaction, or derivative 
                transaction''; and

[[Page 124 STAT. 1609]]

                    (E) in paragraph (3), as so redesignated--
                          (i) by inserting ``or other debt obligations'' 
                      after ``securities''; and
                          (ii) by striking ``or guarantee'' and all that 
                      follows through ``behalf of,'' and inserting 
                      ``guarantee, acceptance, or letter of credit 
                      issued on behalf of, or credit exposure from a 
                      securities borrowing or lending transaction, or 
                      derivative transaction to,'';
            (3) in subsection (d)(4), in the matter preceding 
        subparagraph (A), by striking ``or issuing'' and all that 
        follows through ``behalf of,'' and inserting ``issuing a 
        guarantee, acceptance, or letter of credit on behalf of, or 
        having credit exposure resulting from a securities borrowing or 
        lending transaction, or derivative transaction to,''; and
            (4) in subsection (f)--
                    (A) in paragraph (2)--
                          (i) by striking ``or order'';
                          (ii) by striking ``if it finds'' and all that 
                      follows through the end of the paragraph and 
                      inserting the following: ``if--
                          ``(i) <<NOTE: Notification.>>  the Board finds 
                      the exemption to be in the public interest and 
                      consistent with the purposes of this section, and 
                      notifies the Federal Deposit Insurance Corporation 
                      of such finding; and
                          ``(ii) <<NOTE: Time period. Notice.>>  before 
                      the end of the 60-day period beginning on the date 
                      on which the Federal Deposit Insurance Corporation 
                      receives notice of the finding under clause (i), 
                      the Federal Deposit Insurance Corporation does not 
                      object, in writing, to the finding, based on a 
                      determination that the exemption presents an 
                      unacceptable risk to the Deposit Insurance 
                      Fund.'';
                          (iii) by striking the Board and inserting the 
                      following:
                    ``(A) In general.--The Board''; and
                          (iv) by adding at the end the following:
                    ``(B) Additional exemptions.--
                          ``(i) National banks.--The Comptroller of the 
                      Currency may, by order, exempt a transaction of a 
                      national bank from the requirements of this 
                      section if--
                                    ``(I) <<NOTE: Notification.>> the 
                                Board and the Office of the Comptroller 
                                of the Currency jointly find the 
                                exemption to be in the public interest 
                                and consistent with the purposes of this 
                                section and notify the Federal Deposit 
                                Insurance Corporation of such finding; 
                                and
                                    ``(II) <<NOTE: Time 
                                period. Notice.>>  before the end of the 
                                60-day period beginning on the date on 
                                which the Federal Deposit Insurance 
                                Corporation receives notice of the 
                                finding under subclause (I), the Federal 
                                Deposit Insurance Corporation does not 
                                object, in writing, to the finding, 
                                based on a determination that the 
                                exemption presents an unacceptable risk 
                                to the Deposit Insurance Fund.
                          ``(ii) State banks.--The Federal Deposit 
                      Insurance Corporation may, by order, exempt a 
                      transaction of a State nonmember bank, and the 
                      Board may, by order, exempt a transaction of a 
                      State member bank, from the requirements of this 
                      section if--

[[Page 124 STAT. 1610]]

                                    ``(I) the Board and the Federal 
                                Deposit Insurance Corporation jointly 
                                find that the exemption is in the public 
                                interest and consistent with the 
                                purposes of this section; and
                                    ``(II) the Federal Deposit Insurance 
                                Corporation finds that the exemption 
                                does not present an unacceptable risk to 
                                the Deposit Insurance Fund.''; and
                    (B) by adding at the end the following:
            ``(4) Amounts of covered transactions.--The Board may issue 
        such regulations or interpretations as the Board determines are 
        necessary or appropriate with respect to the manner in which a 
        netting agreement may be taken into account in determining the 
        amount of a covered transaction between a member bank or a 
        subsidiary and an affiliate, including the extent to which 
        netting agreements between a member bank or a subsidiary and an 
        affiliate may be taken into account in determining whether a 
        covered transaction is fully secured for purposes of subsection 
        (d)(4). An interpretation under this paragraph with respect to a 
        specific member bank, subsidiary, or affiliate shall be issued 
        jointly with the appropriate Federal banking agency for such 
        member bank, subsidiary, or affiliate.''.

    (b) Transactions With Affiliates.--Section 23B(e) of the Federal 
Reserve Act (12 U.S.C. 371c-1(e)) is amended--
            (1) by striking the undesignated matter following 
        subparagraph (B);
            (2) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively, and adjusting the clause margins 
        accordingly;
            (3) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B), respectively, and adjusting the subparagraph 
        margins accordingly;
            (4) by striking ``The Board'' and inserting the following:
            ``(1) In general.--The Board'';
            (5) in paragraph (1)(B), as so redesignated--
                    (A) in the matter preceding clause (i), by inserting 
                before ``regulations'' the following: ``subject to 
                paragraph (2), <<NOTE: Notification.>>  if the Board 
                finds that an exemption or exclusion is in the public 
                interest and is consistent with the purposes of this 
                section, and notifies the Federal Deposit Insurance 
                Corporation of such finding,''; and
                    (B) in clause (ii), by striking the comma at the end 
                and inserting a period; and
            (6) by adding at the end the following:
            ``(2) Exception.-- <<NOTE: Time period. Notice.>> The Board 
        may grant an exemption or exclusion under this subsection only 
        if, during the 60-day period beginning on the date of receipt of 
        notice of the finding from the Board under paragraph (1)(B), the 
        Federal Deposit Insurance Corporation does not object, in 
        writing, to such exemption or exclusion, based on a 
        determination that the exemption presents an unacceptable risk 
        to the Deposit Insurance Fund.''.

    (c) Home Owners' Loan Act.--Section 11 of the Home Owners' Loan Act 
(12 U.S.C. 1468) is amended by adding at the end the following:
    ``(d) Exemptions.--

[[Page 124 STAT. 1611]]

            ``(1) Federal savings associations.--The Comptroller of the 
        Currency may, by order, exempt a transaction of a Federal 
        savings association from the requirements of this section if--
                    ``(A) <<NOTE: Notification.>> the Board and the 
                Office of the Comptroller of the Currency jointly find 
                the exemption to be in the public interest and 
                consistent with the purposes of this section and notify 
                the Federal Deposit Insurance Corporation of such 
                finding; and
                    ``(B) <<NOTE: Time period. Notice.>>  before the end 
                of the 60-day period beginning on the date on which the 
                Federal Deposit Insurance Corporation receives notice of 
                the finding under subparagraph (A), the Federal Deposit 
                Insurance Corporation does not object, in writing, to 
                the finding, based on a determination that the exemption 
                presents an unacceptable risk to the Deposit Insurance 
                Fund.
            ``(2) State savings association.--The Federal Deposit 
        Insurance Corporation may, by order, exempt a transaction of a 
        State savings association from the requirements of this section 
        if the Board and the Federal Deposit Insurance Corporation 
        jointly find that--
                    ``(A) the exemption is in the public interest and 
                consistent with the purposes of this section; and
                    ``(B) the exemption does not present an unacceptable 
                risk to the Deposit Insurance Fund.''.

    (d) <<NOTE: 12 USC 371c note.>>  Effective Date.--The amendments 
made by this section shall take effect 1 year after the transfer date.
SEC. 609. ELIMINATING EXCEPTIONS FOR TRANSACTIONS WITH FINANCIAL 
                        SUBSIDIARIES.

    (a) Amendment.--Section 23A(e) of the Federal Reserve Act (12 U.S.C. 
371c(e)) is amended--
            (1) by striking paragraph (3); and
            (2) by redesignating paragraph (4) as paragraph (3).

    (b) <<NOTE: 12 USC 371c note.>>  Prospective Application of 
Amendment.--The amendments made by this section shall apply with respect 
to any covered transaction between a bank and a subsidiary of the bank, 
as those terms are defined in section 23A of the Federal Reserve Act (12 
U.S.C. 371c), that is entered into on or after the date of enactment of 
this Act.

    (c) <<NOTE: 12 USC 371c note.>> Effective Date.--The amendments made 
by this section shall take effect 1 year after the transfer date.
SEC. 610. LENDING LIMITS APPLICABLE TO CREDIT EXPOSURE ON 
                        DERIVATIVE TRANSACTIONS, REPURCHASE 
                        AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, 
                        AND SECURITIES LENDING AND BORROWING 
                        TRANSACTIONS.

    (a) National Banks.--Section 5200(b) of the Revised Statutes of the 
United States (12 U.S.C. 84(b)) is amended--
            (1) in paragraph (1), by striking ``shall include'' and all 
        that follows through the end of the paragraph and inserting the 
        following: ``shall include--
                    ``(A) all direct or indirect advances of funds to a 
                person made on the basis of any obligation of that 
                person to repay the funds or repayable from specific 
                property pledged by or on behalf of the person;
                    ``(B) to the extent specified by the Comptroller of 
                the Currency, any liability of a national banking 
                association

[[Page 124 STAT. 1612]]

                to advance funds to or on behalf of a person pursuant to 
                a contractual commitment; and
                    ``(C) any credit exposure to a person arising from a 
                derivative transaction, repurchase agreement, reverse 
                repurchase agreement, securities lending transaction, or 
                securities borrowing transaction between the national 
                banking association and the person;'';
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(3) the term `derivative transaction' includes any 
        transaction that is a contract, agreement, swap, warrant, note, 
        or option that is based, in whole or in part, on the value of, 
        any interest in, or any quantitative measure or the occurrence 
        of any event relating to, one or more commodities, securities, 
        currencies, interest or other rates, indices, or other 
        assets.''.

    (b) Savings Associations.--Section 5(u)(3) of the Home Owners' Loan 
Act (12 U.S.C. 1464(u)(3)) is amended by striking ``Director'' each 
place that term appears and inserting ``Comptroller of the Currency''.
    (c) <<NOTE: 12 USC 84 note.>> Effective Date.--The amendments made 
by this section shall take effect 1 year after the transfer date.
SEC. 611. CONSISTENT TREATMENT OF DERIVATIVE TRANSACTIONS IN 
                        LENDING LIMITS.

    (a) Amendment.--Section 18 of the Federal Deposit Insurance Act (12 
U.S.C. 1828) is amended by adding at the end the following:
    ``(y) State Lending Limit Treatment of Derivatives Transactions.--An 
insured State bank may engage in a derivative transaction, as defined in 
section 5200(b)(3) of the Revised Statutes of the United States (12 
U.S.C. 84(b)(3)), only if the law with respect to lending limits of the 
State in which the insured State bank is chartered takes into 
consideration credit exposure to derivative transactions.''.
    (b) <<NOTE: 12 USC 1828 note.>>  Effective Date.--The amendment made 
by this section shall take effect 18 months after the transfer date.
SEC. 612. RESTRICTION ON CONVERSIONS OF TROUBLED BANKS.

    (a) Conversion of a National Banking Association.--The Act entitled 
``An Act to provide for the conversion of national banking associations 
into and their merger or consolidation with State banks, and for other 
purposes.'' (12 U.S.C. 214 et seq.) is amended by adding at the end the 
following:
``SEC. 10. <<NOTE: 12 USC 214d.>> PROHIBITION ON CONVERSION.

    ``A national banking association may not convert to a State bank or 
State savings association during any period in which the national 
banking association is subject to a cease and desist order (or other 
formal enforcement order) issued by, or a memorandum of understanding 
entered into with, the Comptroller of the Currency with respect to a 
significant supervisory matter.''.
    (b) Conversion of a State Bank or Savings Association.--Section 5154 
of the Revised Statutes of the United States (12 U.S.C. 35) is amended 
by adding at the end the following: ``The Comptroller of the Currency 
may not approve the conversion of a State bank or State savings 
association to a national banking association or Federal savings 
association during any period in which the State bank or State savings 
association is subject to

[[Page 124 STAT. 1613]]

a cease and desist order (or other formal enforcement order) issued by, 
or a memorandum of understanding entered into with, a State bank 
supervisor or the appropriate Federal banking agency with respect to a 
significant supervisory matter or a final enforcement action by a State 
Attorney General.''.
    (c) Conversion of a Federal Savings Association.--Section 5(i) of 
the Home Owners' Loan Act (12 U.S.C. 1464(i)) is amended by adding at 
the end the following:
            ``(6) Limitation on certain conversions by federal savings 
        associations.--A Federal savings association may not convert to 
        a State bank or State savings association during any period in 
        which the Federal savings association is subject to a cease and 
        desist order (or other formal enforcement order) issued by, or a 
        memorandum of understanding entered into with, the Office of 
        Thrift Supervision or the Comptroller of the Currency with 
        respect to a significant supervisory matter.''.

    (d) <<NOTE: 12 USC 35 note.>> Exception.--The prohibition on the 
approval of conversions under the amendments made by subsections (a), 
(b), and (c) shall not apply, if--
            (1) <<NOTE: Notice.>>  the Federal banking agency that would 
        be the appropriate Federal banking agency after the proposed 
        conversion gives the appropriate Federal banking agency or State 
        bank supervisor that issued the cease and desist order (or other 
        formal enforcement order) or memorandum of understanding, as 
        appropriate, written notice of the proposed conversion including 
        a plan to address the significant supervisory matter in a manner 
        that is consistent with the safe and sound operation of the 
        institution;
            (2) <<NOTE: Deadline.>>  within 30 days of receipt of the 
        written notice required under paragraph (1), the appropriate 
        Federal banking agency or State bank supervisor that issued the 
        cease and desist order (or other formal enforcement order) or 
        memorandum of understanding, as appropriate, does not object to 
        the conversion or the plan to address the significant 
        supervisory matter;
            (3) after conversion of the insured depository institution, 
        the appropriate Federal banking agency after the conversion 
        implements such plan; and
            (4) in the case of a final enforcement action by a State 
        Attorney General, approval of the conversion is conditioned on 
        compliance by the insured depository institution with the terms 
        of such final enforcement action.

    (e) <<NOTE: 12 USC 35 note.>>  Notification of Pending Enforcement 
Actions.--
            (1) Copy of conversion application.--At the time an insured 
        depository institution files a conversion application, the 
        insured depository institution shall transmit a copy of the 
        conversion application to--
                    (A) the appropriate Federal banking agency for the 
                insured depository institution; and
                    (B) the Federal banking agency that would be the 
                appropriate Federal banking agency of the insured 
                depository institution after the proposed conversion.
            (2) Notification and access to information.--Upon receipt of 
        a copy of the application described in paragraph (1), the 
        appropriate Federal banking agency for the insured depository 
        institution proposing the conversion shall--
                    (A) notify the Federal banking agency that would be 
                the appropriate Federal banking agency for the 
                institution

[[Page 124 STAT. 1614]]

                after the proposed conversion in writing of any ongoing 
                supervisory or investigative proceedings that the 
                appropriate Federal banking agency for the institution 
                proposing to convert believes is likely to result, in 
                the near term and absent the proposed conversion, in a 
                cease and desist order (or other formal enforcement 
                order) or memorandum of understanding with respect to a 
                significant supervisory matter; and
                    (B) provide the Federal banking agency that would be 
                the appropriate Federal banking agency for the 
                institution after the proposed conversion access to all 
                investigative and supervisory information relating to 
                the proceedings described in subparagraph (A).
SEC. 613. DE NOVO BRANCHING INTO STATES.

    (a) National Banks.--Section 5155(g)(1)(A) of the Revised Statutes 
of the United States (12 U.S.C. 36(g)(1)(A)) is amended to read as 
follows:
                    ``(A) the law of the State in which the branch is 
                located, or is to be located, would permit establishment 
                of the branch, if the national bank were a State bank 
                chartered by such State; and''.

    (b) State Insured Banks.--Section 18(d)(4)(A)(i) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(d)(4)(A)(i)) is amended to read as 
follows:
                          ``(i) the law of the State in which the branch 
                      is located, or is to be located, would permit 
                      establishment of the branch, if the bank were a 
                      State bank chartered by such State; and''.
SEC. 614. LENDING LIMITS TO INSIDERS.

    (a) Extensions of Credit.--Section 22(h)(9)(D)(i) of the Federal 
Reserve Act (12 U.S.C. 375b(9)(D)(i)) is amended--
            (1) by striking the period at the end and inserting ``; 
        or'';
            (2) by striking ``a person'' and inserting ``the person'';
            (3) by striking ``extends credit by making'' and inserting 
        the following: ``extends credit to a person by--
                                    ``(I) making''; and
            (4) by adding at the end the following:
                                    ``(II) having credit exposure to the 
                                person arising from a derivative 
                                transaction (as defined in section 
                                5200(b) of the Revised Statutes of the 
                                United States (12 U.S.C. 84(b))), 
                                repurchase agreement, reverse repurchase 
                                agreement, securities lending 
                                transaction, or securities borrowing 
                                transaction between the member bank and 
                                the person.''.

    (b) <<NOTE: 12 USC 375b note.>>  Effective Date.--The amendments 
made by this section shall take effect 1 year after the transfer date.
SEC. 615. LIMITATIONS ON PURCHASES OF ASSETS FROM INSIDERS.

    (a) Amendment to the Federal Deposit Insurance Act.--Section 18 of 
the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding 
at the end the following:
    ``(z) General Prohibition on Sale of Assets.--
            ``(1) In general.--An insured depository institution may not 
        purchase an asset from, or sell an asset to, an executive 
        officer, director, or principal shareholder of the insured 
        depository institution, or any related interest of such person 
        (as

[[Page 124 STAT. 1615]]

        such terms are defined in section 22(h) of Federal Reserve Act), 
        unless--
                    ``(A) the transaction is on market terms; and
                    ``(B) if the transaction represents more than 10 
                percent of the capital stock and surplus of the insured 
                depository institution, the transaction has been 
                approved in advance by a majority of the members of the 
                board of directors of the insured depository institution 
                who do not have an interest in the transaction.
            ``(2) <<NOTE: Consultation.>>  Rulemaking.--The Board of 
        Governors of the Federal Reserve System may issue such rules as 
        may be necessary to define terms and to carry out the purposes 
        this subsection. Before proposing or adopting a rule under this 
        paragraph, the Board of Governors of the Federal Reserve System 
        shall consult with the Comptroller of the Currency and the 
        Corporation as to the terms of the rule.''.

    (b) Amendments to the Federal Reserve Act.--Section 22(d) of the 
Federal Reserve Act (12 U.S.C. 375) is amended to read as follows:
    ``(d) [Reserved]''.
    (c) <<NOTE: 12 USC 375 note.>>  Effective Date.--The amendments made 
by this section shall take effect on the transfer date.
SEC. 616. REGULATIONS REGARDING CAPITAL LEVELS.

    (a) Capital Levels of Bank Holding Companies.--Section 5(b) of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1844(b)) is amended--
            (1) by inserting after ``orders'' the following: ``, 
        including regulations and orders relating to the capital 
        requirements for bank holding companies,''; and
            (2) by adding at the end the following: ``In establishing 
        capital regulations pursuant to this subsection, the Board shall 
        seek to make such requirements countercyclical, so that the 
        amount of capital required to be maintained by a company 
        increases in times of economic expansion and decreases in times 
        of economic contraction, consistent with the safety and 
        soundness of the company.''.

    (b) Capital Levels of 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 inserting after ``orders'' the following: ``, 
        including regulations and orders relating to capital 
        requirements for savings and loan holding companies,''; and
            (2) by inserting at the end the following: ``In establishing 
        capital regulations pursuant to this subsection, the appropriate 
        Federal banking agency shall seek to make such requirements 
        countercyclical so that the amount of capital required to be 
        maintained by a company increases in times of economic expansion 
        and decreases in times of economic contraction, consistent with 
        the safety and soundness of the company.''.

    (c) Capital Levels of Insured Depository Institutions.--Section 
908(a)(1) of the International Lending Supervision Act of 1983 (12 
U.S.C. 3907(a)(1)) is amended by adding at the end the following: ``Each 
appropriate Federal banking agency shall seek to make the capital 
standards required under this section or other provisions of Federal law 
for insured depository institutions countercyclical so that the amount 
of capital required to be maintained

[[Page 124 STAT. 1616]]

by an insured depository institution increases in times of economic 
expansion and decreases in times of economic contraction, consistent 
with the safety and soundness of the insured depository institution.''
    (d) Source of Strength.--The Federal Deposit Insurance Act (12 
U.S.C. 1811 et seq.) is amended by inserting after section 38 (12 U.S.C. 
1831o) the following:
``SEC. 38A. <<NOTE: 12 USC 1831o-1.>>  SOURCE OF STRENGTH.

    ``(a) Holding Companies.--The appropriate Federal banking agency for 
a bank holding company or savings and loan holding company shall require 
the bank holding company or savings and loan holding company to serve as 
a source of financial strength for any subsidiary of the bank holding 
company or savings and loan holding company that is a depository 
institution.
    ``(b) Other Companies.--If an insured depository institution is not 
the subsidiary of a bank holding company or savings and loan holding 
company, the appropriate Federal banking agency for the insured 
depository institution shall require any company that directly or 
indirectly controls the insured depository institution to serve as a 
source of financial strength for such institution.
    ``(c) Reports.--The appropriate Federal banking agency for an 
insured depository institution described in subsection (b) may, from 
time to time, require the company, or a company that directly or 
indirectly controls the insured depository institution, to submit a 
report, under oath, for the purposes of--
            ``(1) assessing the ability of such company to comply with 
        the requirement under subsection (b); and
            ``(2) enforcing the compliance of such company with the 
        requirement under subsection (b).

    ``(d) <<NOTE: Deadline.>>  Rules.--Not later than 1 year after the 
transfer date, as defined in section 311 of the Enhancing Financial 
Institution Safety and Soundness Act of 2010, the appropriate Federal 
banking agencies shall jointly issue final rules to carry out this 
section.

    ``(e) Definition.--In this section, the term `source of financial 
strength' means the ability of a company that directly or indirectly 
owns or controls an insured depository institution to provide financial 
assistance to such insured depository institution in the event of the 
financial distress of the insured depository institution.''.
    (e) <<NOTE: 12 USC 1467a note.>> Effective Date.--The amendments 
made by this section shall take effect on the transfer date.
SEC. 617. ELIMINATION OF ELECTIVE INVESTMENT BANK HOLDING COMPANY 
                        FRAMEWORK.

    (a) Amendment.--Section 17 of the Securities Exchange Act of 1934 
(15 U.S.C. 78q) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) and (k) as subsections 
        (i) and (j), respectively.

    (b) <<NOTE: 15 USC 78q note.>>  Effective Date.--The amendments made 
by this section shall take effect on the transfer date.
SEC. 618. <<NOTE: 12 USC 1850a.>>  SECURITIES HOLDING COMPANIES.

    (a) Definitions.--In this section--
            (1) the term ``associated person of a securities holding 
        company'' means a person directly or indirectly controlling, 
        controlled by, or under common control with, a securities 
        holding company;

[[Page 124 STAT. 1617]]

            (2) the term ``foreign bank'' has the same meaning as in 
        section 1(b)(7) of the International Banking Act of 1978 (12 
        U.S.C. 3101(7));
            (3) the term ``insured bank'' has the same meaning as in 
        section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813);
            (4) the term ``securities holding company''--
                    (A) means--
                          (i) a person (other than a natural person) 
                      that owns or controls 1 or more brokers or dealers 
                      registered with the Commission; and
                          (ii) the associated persons of a person 
                      described in clause (i); and
                    (B) does not include a person that is--
                          (i) a nonbank financial company supervised by 
                      the Board under title I;
                          (ii) an insured bank (other than an 
                      institution described in subparagraphs (D), (F), 
                      or (H) of section 2(c)(2) of the Bank Holding 
                      Company Act of 1956 (12 U.S.C. 1841(c)(2)) or a 
                      savings association;
                          (iii) an affiliate of an insured bank (other 
                      than an institution described in subparagraphs 
                      (D), (F), or (H) of section 2(c)(2) of the Bank 
                      Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)) 
                      or an affiliate of a savings association;
                          (iv) a foreign bank, foreign company, or 
                      company that is described in section 8(a) of the 
                      International Banking Act of 1978 (12 U.S.C. 
                      3106(a));
                          (v) a foreign bank that controls, directly or 
                      indirectly, a corporation chartered under section 
                      25A of the Federal Reserve Act (12 U.S.C. 611 et 
                      seq.); or
                          (vi) subject to comprehensive consolidated 
                      supervision by a foreign regulator;
            (5) the term ``supervised securities holding company'' means 
        a securities holding company that is supervised by the Board of 
        Governors under this section; and
            (6) the terms ``affiliate'', ``bank'', ``bank holding 
        company'', ``company'', ``control'', ``savings association'', 
        and ``subsidiary'' have the same meanings as in section 2 of the 
        Bank Holding Company Act of 1956.

    (b) Supervision of a Securities Holding Company Not Having a Bank or 
Savings Association Affiliate.--
            (1) In general.--A securities holding company that is 
        required by a foreign regulator or provision of foreign law to 
        be subject to comprehensive consolidated supervision may 
        register with the Board of Governors under paragraph (2) to 
        become a supervised securities holding 
        company. <<NOTE: Regulations.>>  Any securities holding company 
        filing such a registration shall be supervised in accordance 
        with this section, and shall comply with the rules and orders 
        prescribed by the Board of Governors applicable to supervised 
        securities holding companies.
            (2) Registration as a supervised securities holding 
        company.--
                    (A) Registration.--A securities holding company that 
                elects to be subject to comprehensive consolidated 
                supervision shall register by filing with the Board of 
                Governors

[[Page 124 STAT. 1618]]

                such information and documents as the Board of 
                Governors, by regulation, may prescribe as necessary or 
                appropriate in furtherance of the purposes of this 
                section.
                    (B) Effective date.--A securities holding company 
                that registers under subparagraph (A) shall be deemed to 
                be a supervised securities holding company, effective on 
                the date that is 45 days after the date of receipt of 
                the registration information and documents under 
                subparagraph (A) by the Board of Governors, or within 
                such shorter period as the Board of Governors, by rule 
                or order, may determine.

    (c) Supervision of Securities Holding Companies.--
            (1) Recordkeeping and reporting.--
                    (A) Recordkeeping and reporting required.--Each 
                supervised securities holding company and each affiliate 
                of a supervised securities holding company shall make 
                and keep for periods determined by the Board of 
                Governors such records, furnish copies of such records, 
                and make such reports, as the Board of Governors 
                determines to be necessary or appropriate to carry out 
                this section, to prevent evasions thereof, and to 
                monitor compliance by the supervised securities holding 
                company or affiliate with applicable provisions of law.
                    (B) Form and contents.--
                          (i) In general.--Any record or report required 
                      to be made, furnished, or kept under this 
                      paragraph shall--
                                    (I) be prepared in such form and 
                                according to such specifications 
                                (including certification by a registered 
                                public accounting firm), as the Board of 
                                Governors may require; and
                                    (II) be provided promptly to the 
                                Board of Governors at any time, upon 
                                request by the Board of Governors.
                          (ii) Contents.--Records and reports required 
                      to be made, furnished, or kept under this 
                      paragraph may include--
                                    (I) a balance sheet or income 
                                statement of the supervised securities 
                                holding company or an affiliate of a 
                                supervised securities holding company;
                                    (II) an assessment of the 
                                consolidated capital and liquidity of 
                                the supervised securities holding 
                                company;
                                    (III) a report by an independent 
                                auditor attesting to the compliance of 
                                the supervised securities holding 
                                company with the internal risk 
                                management and internal control 
                                objectives of the supervised securities 
                                holding company; and
                                    (IV) a report concerning the extent 
                                to which the supervised securities 
                                holding company or affiliate has 
                                complied with the provisions of this 
                                section and any regulations prescribed 
                                and orders issued under this section.
            (2) Use of existing reports.--
                    (A) In general.--The Board of Governors shall, to 
                the fullest extent possible, accept reports in 
                fulfillment

[[Page 124 STAT. 1619]]

                of the requirements of this paragraph that a supervised 
                securities holding company or an affiliate of a 
                supervised securities holding company has been required 
                to provide to another regulatory agency or a self-
                regulatory organization.
                    (B) Availability.--A supervised securities holding 
                company or an affiliate of a supervised securities 
                holding company shall promptly provide to the Board of 
                Governors, at the request of the Board of Governors, any 
                report described in subparagraph (A), as permitted by 
                law.
            (3) Examination authority.--
                    (A) Focus of examination authority.--The Board of 
                Governors may make examinations of any supervised 
                securities holding company and any affiliate of a 
                supervised securities holding company to carry out this 
                subsection, to prevent evasions thereof, and to monitor 
                compliance by the supervised securities holding company 
                or affiliate with applicable provisions of law.
                    (B) Deference to other examinations.--For purposes 
                of this subparagraph, the Board of Governors shall, to 
                the fullest extent possible, use the reports of 
                examination made by other appropriate Federal or State 
                regulatory authorities with respect to any functionally 
                regulated subsidiary or any institution described in 
                subparagraph (D), (F), or (H) of section 2(c)(2) of the 
                Bank Holding Company Act of 1956 (12 U.S.C. 1841(c)(2)).

    (d) Capital and Risk Management.--
            (1) In general.-- <<NOTE: Regulations.>> The Board of 
        Governors shall, by regulation or order, prescribe capital 
        adequacy and other risk management standards for supervised 
        securities holding companies that are appropriate to protect the 
        safety and soundness of the supervised securities holding 
        companies and address the risks posed to financial stability by 
        supervised securities holding companies.
            (2) Differentiation.--In imposing standards under this 
        subsection, the Board of Governors may differentiate among 
        supervised securities holding companies on an individual basis, 
        or by category, taking into consideration the requirements under 
        paragraph (3).
            (3) Content.--Any standards imposed on a supervised 
        securities holding company under this subsection shall take into 
        account--
                    (A) the differences among types of business 
                activities carried out by the supervised securities 
                holding company;
                    (B) the amount and nature of the financial assets of 
                the supervised securities holding company;
                    (C) the amount and nature of the liabilities of the 
                supervised securities holding company, including the 
                degree of reliance on short-term funding;
                    (D) the extent and nature of the off-balance sheet 
                exposures of the supervised securities holding company;
                    (E) the extent and nature of the transactions and 
                relationships of the supervised securities holding 
                company with other financial companies;
                    (F) the importance of the supervised securities 
                holding company as a source of credit for households, 
                businesses,

[[Page 124 STAT. 1620]]

                and State and local governments, and as a source of 
                liquidity for the financial system; and
                    (G) the nature, scope, and mix of the activities of 
                the supervised securities holding company.
            (4) <<NOTE: Effective date.>> Notice.--A capital requirement 
        imposed under this subsection may not take effect earlier than 
        180 days after the date on which a supervised securities holding 
        company is provided notice of the capital requirement.

    (e) Other Provisions of Law Applicable to Supervised Securities 
Holding Companies.--
            (1) Federal deposit insurance act.--Subsections (b), (c) 
        through (s), and (u) of section 8 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1818) shall apply to any supervised 
        securities holding company, and to any subsidiary (other than a 
        bank or an institution described in subparagraph (D), (F), or 
        (H) of section 2(c)(2) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1841(c)(2))) of a supervised securities holding 
        company, in the same manner as such subsections apply to a bank 
        holding company for which the Board of Governors is the 
        appropriate Federal banking agency. For purposes of applying 
        such subsections to a supervised securities holding company or a 
        subsidiary (other than a bank or an institution described in 
        subparagraph (D), (F), or (H) of section 2(c)(2) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1841(c)(2))) of a 
        supervised securities holding company, the Board of Governors 
        shall be deemed the appropriate Federal banking agency for the 
        supervised securities holding company or subsidiary.
            (2) Bank holding company act of 1956.--Except as the Board 
        of Governors may otherwise provide by regulation or order, a 
        supervised securities holding company shall be subject to the 
        provisions of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841 et seq.) in the same manner and to the same extent a bank 
        holding company is subject to such provisions, except that a 
        supervised securities holding company may not, by reason of this 
        paragraph, be deemed to be a bank holding company for purposes 
        of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1843).
SEC. 619. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN 
                        RELATIONSHIPS WITH HEDGE FUNDS AND PRIVATE 
                        EQUITY FUNDS.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended by adding at the end the following:
``SEC. 13. <<NOTE: 12 USC 1851.>> PROHIBITIONS ON PROPRIETARY 
                      TRADING AND CERTAIN RELATIONSHIPS WITH HEDGE 
                      FUNDS AND PRIVATE EQUITY FUNDS.

    ``(a) In General.--
            ``(1) Prohibition.--Unless otherwise provided in this 
        section, a banking entity shall not--
                    ``(A) engage in proprietary trading; or
                    ``(B) acquire or retain any equity, partnership, or 
                other ownership interest in or sponsor a hedge fund or a 
                private equity fund.
            ``(2) Nonbank financial companies supervised by the board.--
        Any nonbank financial company supervised by the Board that 
        engages in proprietary trading or takes or retains

[[Page 124 STAT. 1621]]

        any equity, partnership, or other ownership interest in or 
        sponsors a hedge fund or a private equity fund shall be subject, 
        by rule, as provided in subsection (b)(2), to additional capital 
        requirements for and additional quantitative limits with regards 
        to such proprietary trading and taking or retaining any equity, 
        partnership, or other ownership interest in or sponsorship of a 
        hedge fund or a private equity fund, except that permitted 
        activities as described in subsection (d) shall not be subject 
        to the additional capital and additional quantitative limits 
        except as provided in subsection (d)(3), as if the nonbank 
        financial company supervised by the Board were a banking entity.

    ``(b) Study and Rulemaking.--
            ``(1) Study.-- <<NOTE: Deadline. Recommenda- tions.>> Not 
        later than 6 months after the date of enactment of this section, 
        the Financial Stability Oversight Council shall study and make 
        recommendations on implementing the provisions of this section 
        so as to--
                    ``(A) promote and enhance the safety and soundness 
                of banking entities;
                    ``(B) protect taxpayers and consumers and enhance 
                financial stability by minimizing the risk that insured 
                depository institutions and the affiliates of insured 
                depository institutions will engage in unsafe and 
                unsound activities;
                    ``(C) limit the inappropriate transfer of Federal 
                subsidies from institutions that benefit from deposit 
                insurance and liquidity facilities of the Federal 
                Government to unregulated entities;
                    ``(D) reduce conflicts of interest between the self-
                interest of banking entities and nonbank financial 
                companies supervised by the Board, and the interests of 
                the customers of such entities and companies;
                    ``(E) limit activities that have caused undue risk 
                or loss in banking entities and nonbank financial 
                companies supervised by the Board, or that might 
                reasonably be expected to create undue risk or loss in 
                such banking entities and nonbank financial companies 
                supervised by the Board;
                    ``(F) appropriately accommodate the business of 
                insurance within an insurance company, subject to 
                regulation in accordance with the relevant insurance 
                company investment laws, while protecting the safety and 
                soundness of any banking entity with which such 
                insurance company is affiliated and of the United States 
                financial system; and
                    ``(G) appropriately time the divestiture of illiquid 
                assets that are affected by the implementation of the 
                prohibitions under subsection (a).
            ``(2) Rulemaking.--
                    ``(A) In general.-- <<NOTE: Deadline.>> Unless 
                otherwise provided in this section, not later than 9 
                months after the completion of the study under paragraph 
                (1), the appropriate Federal banking agencies, the 
                Securities and Exchange Commission, and the Commodity 
                Futures Trading Commission, shall consider the findings 
                of the study under paragraph (1) and adopt rules to 
                carry out this section, as provided in subparagraph (B).

[[Page 124 STAT. 1622]]

                    ``(B) Coordinated rulemaking.--
                          ``(i) Regulatory authority.--The regulations 
                      issued under this paragraph shall be issued by--
                                    ``(I) the appropriate Federal 
                                banking agencies, jointly, with respect 
                                to insured depository institutions;
                                    ``(II) the Board, with respect to 
                                any company that controls an insured 
                                depository institution, or that is 
                                treated as a bank holding company for 
                                purposes of section 8 of the 
                                International Banking Act, any nonbank 
                                financial company supervised by the 
                                Board, and any subsidiary of any of the 
                                foregoing (other than a subsidiary for 
                                which an agency described in subclause 
                                (I), (III), or (IV) is the primary 
                                financial regulatory agency);
                                    ``(III) the Commodity Futures 
                                Trading Commission, with respect to any 
                                entity for which the Commodity Futures 
                                Trading Commission is the primary 
                                financial regulatory agency, as defined 
                                in section 2 of the Dodd-Frank Wall 
                                Street Reform and Consumer Protection 
                                Act; and
                                    ``(IV) the Securities and Exchange 
                                Commission, with respect to any entity 
                                for which the Securities and Exchange 
                                Commission is the primary financial 
                                regulatory agency, as defined in section 
                                2 of the Dodd-Frank Wall Street Reform 
                                and Consumer Protection Act.
                          ``(ii) Coordination, consistency, and 
                      comparability.--In 
                      developing <<NOTE: Consultation.>>  and issuing 
                      regulations pursuant to this section, the 
                      appropriate Federal banking agencies, the 
                      Securities and Exchange Commission, and the 
                      Commodity Futures Trading Commission shall consult 
                      and coordinate with each other, as appropriate, 
                      for the purposes of assuring, to the extent 
                      possible, that such regulations are comparable and 
                      provide for consistent application and 
                      implementation of the applicable provisions of 
                      this section to avoid providing advantages or 
                      imposing disadvantages to the companies affected 
                      by this subsection and to protect the safety and 
                      soundness of banking entities and nonbank 
                      financial companies supervised by the Board.
                          ``(iii) Council role.--The Chairperson of the 
                      Financial Stability Oversight Council shall be 
                      responsible for coordination of the regulations 
                      issued under this section.

    ``(c) Effective Date.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), this section shall take effect on the earlier of--
                    ``(A) 12 months after the date of the issuance of 
                final rules under subsection (b); or
                    ``(B) 2 years after the date of enactment of this 
                section.
            ``(2) Conformance period for divestiture.--
        A <<NOTE: Deadline.>>  banking entity or nonbank financial 
        company supervised by the Board shall bring its activities and 
        investments into compliance with the requirements of this 
        section not later than 2 years after the date on which the 
        requirements become effective pursuant

[[Page 124 STAT. 1623]]

        to this section or 2 years after the date on which the entity or 
        company becomes a nonbank financial company supervised by the 
        Board. The Board may, by rule or order, extend this two-year 
        period for not more than one year at a time, if, in the judgment 
        of the Board, such an extension is consistent with the purposes 
        of this section and would not be detrimental to the public 
        interest. The extensions made by the Board under the preceding 
        sentence may not exceed an aggregate of 3 years.
            ``(3) Extended transition for illiquid funds.--
                    ``(A) Application.--The Board may, upon the 
                application of a banking entity, extend the period 
                during which the banking entity, to the extent necessary 
                to fulfill a contractual obligation that was in effect 
                on May 1, 2010, may take or retain its equity, 
                partnership, or other ownership interest in, or 
                otherwise provide additional capital to, an illiquid 
                fund.
                    ``(B) Time limit on approval.--The Board may grant 1 
                extension under subparagraph (A), which may not exceed 5 
                years.
            ``(4) Divestiture required.--Except as otherwise provided in 
        subsection (d)(1)(G), a banking entity may not engage in any 
        activity prohibited under subsection (a)(1)(B) after the earlier 
        of--
                    ``(A) the date on which the contractual obligation 
                to invest in the illiquid fund terminates; and
                    ``(B) the date on which any extensions granted by 
                the Board under paragraph (3) expire.
            ``(5) <<NOTE: Regulations.>>  Additional capital during 
        transition period.--Notwithstanding paragraph (2), on the date 
        on which the rules are issued under subsection (b)(2), the 
        appropriate Federal banking agencies, the Securities and 
        Exchange Commission, and the Commodity Futures Trading 
        Commission shall issue rules, as provided in subsection (b)(2), 
        to impose additional capital requirements, and any other 
        restrictions, as appropriate, on any equity, partnership, or 
        ownership interest in or sponsorship of a hedge fund or private 
        equity fund by a banking entity.
            ``(6) Special rulemaking.--Not later <<NOTE: Deadline.>>  
        than 6 months after the date of enactment of this section, the 
        Board shall issues rules to implement paragraphs (2) and (3).

    ``(d) Permitted Activities.--
            ``(1) In general.--Notwithstanding the restrictions under 
        subsection (a), to the extent permitted by any other provision 
        of Federal or State law, and subject to the limitations under 
        paragraph (2) and any restrictions or limitations that the 
        appropriate Federal banking agencies, the Securities and 
        Exchange Commission, and the Commodity Futures Trading 
        Commission, may determine, the following activities (in this 
        section referred to as `permitted activities') are permitted:
                    ``(A) The purchase, sale, acquisition, or 
                disposition of obligations of the United States or any 
                agency thereof, obligations, participations, or other 
                instruments of or issued by the Government National 
                Mortgage Association, the Federal National Mortgage 
                Association, the Federal Home Loan Mortgage Corporation, 
                a Federal Home Loan Bank, the Federal Agricultural 
                Mortgage Corporation, or a Farm Credit System 
                institution chartered under and subject to

[[Page 124 STAT. 1624]]

                the provisions of the Farm Credit Act of 1971 (12 U.S.C. 
                2001 et seq.), and obligations of any State or of any 
                political subdivision thereof.
                    ``(B) The purchase, sale, acquisition, or 
                disposition of securities and other instruments 
                described in subsection (h)(4) in connection with 
                underwriting or market-making-related activities, to the 
                extent that any such activities permitted by this 
                subparagraph are designed not to exceed the reasonably 
                expected near term demands of clients, customers, or 
                counterparties.
                    ``(C) Risk-mitigating hedging activities in 
                connection with and related to individual or aggregated 
                positions, contracts, or other holdings of a banking 
                entity that are designed to reduce the specific risks to 
                the banking entity in connection with and related to 
                such positions, contracts, or other holdings.
                    ``(D) The purchase, sale, acquisition, or 
                disposition of securities and other instruments 
                described in subsection (h)(4) on behalf of customers.
                    ``(E) Investments in one or more small business 
                investment companies, as defined in section 102 of the 
                Small Business Investment Act of 1958 (15 U.S.C. 662), 
                investments designed primarily to promote the public 
                welfare, of the type permitted under paragraph (11) of 
                section 5136 of the Revised Statutes of the United 
                States (12 U.S.C. 24), or investments that are qualified 
                rehabilitation expenditures with respect to a qualified 
                rehabilitated building or certified historic structure, 
                as such terms are defined in section 47 of the Internal 
                Revenue Code of 1986 or a similar State historic tax 
                credit program.
                    ``(F) The purchase, sale, acquisition, or 
                disposition of securities and other instruments 
                described in subsection (h)(4) by a regulated insurance 
                company directly engaged in the business of insurance 
                for the general account of the company and by any 
                affiliate of such regulated insurance company, provided 
                that such activities by any affiliate are solely for the 
                general account of the regulated insurance company, if--
                          ``(i) the purchase, sale, acquisition, or 
                      disposition is conducted in compliance with, and 
                      subject to, the insurance company investment laws, 
                      regulations, and written guidance of the State or 
                      jurisdiction in which each such insurance company 
                      is domiciled; and
                          ``(ii) the appropriate Federal banking 
                      agencies, after consultation with the Financial 
                      Stability Oversight Council and the relevant 
                      insurance commissioners of the States and 
                      territories of the United States, have not jointly 
                      determined, after notice and comment, that a 
                      particular law, regulation, or written guidance 
                      described in clause (i) is insufficient to protect 
                      the safety and soundness of the banking entity, or 
                      of the financial stability of the United States.
                    ``(G) Organizing and offering a private equity or 
                hedge fund, including serving as a general partner, 
                managing member, or trustee of the fund and in any 
                manner selecting or controlling (or having employees, 
                officers, directors, or agents who constitute) a 
                majority of the directors, trustees,

[[Page 124 STAT. 1625]]

                or management of the fund, including any necessary 
                expenses for the foregoing, only if--
                          ``(i) the banking entity provides bona fide 
                      trust, fiduciary, or investment advisory services;
                          ``(ii) the fund is organized and offered only 
                      in connection with the provision of bona fide 
                      trust, fiduciary, or investment advisory services 
                      and only to persons that are customers of such 
                      services of the banking entity;
                          ``(iii) the banking entity does not acquire or 
                      retain an equity interest, partnership interest, 
                      or other ownership interest in the funds except 
                      for a de minimis investment subject to and in 
                      compliance with paragraph (4);
                          ``(iv) the banking entity complies with the 
                      restrictions under paragraphs (1) and (2) of 
                      subparagraph (f);
                          ``(v) the banking entity does not, directly or 
                      indirectly, guarantee, assume, or otherwise insure 
                      the obligations or performance of the hedge fund 
                      or private equity fund or of any hedge fund or 
                      private equity fund in which such hedge fund or 
                      private equity fund invests;
                          ``(vi) the banking entity does not share with 
                      the hedge fund or private equity fund, for 
                      corporate, marketing, promotional, or other 
                      purposes, the same name or a variation of the same 
                      name;
                          ``(vii) no director or employee of the banking 
                      entity takes or retains an equity interest, 
                      partnership interest, or other ownership interest 
                      in the hedge fund or private equity fund, except 
                      for any director or employee of the banking entity 
                      who is directly engaged in providing investment 
                      advisory or other services to the hedge fund or 
                      private equity fund; and
                          ``(viii) the banking entity discloses to 
                      prospective and actual investors in the fund, in 
                      writing, that any losses in such hedge fund or 
                      private equity fund are borne solely by investors 
                      in the fund and not by the banking entity, and 
                      otherwise complies with any additional rules of 
                      the appropriate Federal banking agencies, the 
                      Securities and Exchange Commission, or the 
                      Commodity Futures Trading Commission, as provided 
                      in subsection (b)(2), designed to ensure that 
                      losses in such hedge fund or private equity fund 
                      are borne solely by investors in the fund and not 
                      by the banking entity.
                    ``(H) Proprietary trading conducted by a banking 
                entity pursuant to paragraph (9) or (13) of section 
                4(c), provided that the trading occurs solely outside of 
                the United States and that the banking entity is not 
                directly or indirectly controlled by a banking entity 
                that is organized under the laws of the United States or 
                of one or more States.
                    ``(I) The acquisition or retention of any equity, 
                partnership, or other ownership interest in, or the 
                sponsorship of, a hedge fund or a private equity fund by 
                a banking entity pursuant to paragraph (9) or (13) of 
                section 4(c)

[[Page 124 STAT. 1626]]

                solely outside of the United States, provided that no 
                ownership interest in such hedge fund or private equity 
                fund is offered for sale or sold to a resident of the 
                United States and that the banking entity is not 
                directly or indirectly controlled by a banking entity 
                that is organized under the laws of the United States or 
                of one or more States.
                    ``(J) Such other activity as the appropriate Federal 
                banking agencies, the Securities and Exchange 
                Commission, and the Commodity Futures Trading Commission 
                determine, by rule, as provided in subsection (b)(2), 
                would promote and protect the safety and soundness of 
                the banking entity and the financial stability of the 
                United States.
            ``(2) Limitation on permitted activities.--
                    ``(A) In general.--No transaction, class of 
                transactions, or activity may be deemed a permitted 
                activity under paragraph (1) if the transaction, class 
                of transactions, or activity--
                          ``(i) would involve or result in a material 
                      conflict of interest (as such term shall be 
                      defined by rule as provided in subsection (b)(2)) 
                      between the banking entity and its clients, 
                      customers, or counterparties;
                          ``(ii) would result, directly or indirectly, 
                      in a material exposure by the banking entity to 
                      high-risk assets or high-risk trading strategies 
                      (as such terms shall be defined by rule as 
                      provided in subsection (b)(2));
                          ``(iii) would pose a threat to the safety and 
                      soundness of such banking entity; or
                          ``(iv) would pose a threat to the financial 
                      stability of the United States.
                    ``(B) Rulemaking.--The appropriate Federal banking 
                agencies, the Securities and Exchange Commission, and 
                the Commodity Futures Trading Commission shall issue 
                regulations to implement subparagraph (A), as part of 
                the regulations issued under subsection (b)(2).
            ``(3) Capital and quantitative limitations.--The appropriate 
        Federal banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading Commission shall, 
        as provided in subsection (b)(2), adopt rules imposing 
        additional capital requirements and quantitative limitations, 
        including diversification requirements, regarding the activities 
        permitted under this section if the appropriate Federal banking 
        agencies, the Securities and Exchange Commission, and the 
        Commodity Futures Trading Commission determine that additional 
        capital and quantitative limitations are appropriate to protect 
        the safety and soundness of banking entities engaged in such 
        activities.
            ``(4) De minimis investment.--
                    ``(A) In general.--A banking entity may make and 
                retain an investment in a hedge fund or private equity 
                fund that the banking entity organizes and offers, 
                subject to the limitations and restrictions in 
                subparagraph (B) for the purposes of--
                          ``(i) establishing the fund and providing the 
                      fund with sufficient initial equity for investment 
                      to permit the fund to attract unaffiliated 
                      investors; or

[[Page 124 STAT. 1627]]

                          ``(ii) making a de minimis investment.
                    ``(B) Limitations and restrictions on investments.--
                          ``(i) Requirement to seek other investors.--A 
                      banking entity shall actively seek unaffiliated 
                      investors to reduce or dilute the investment of 
                      the banking entity to the amount permitted under 
                      clause (ii).
                          ``(ii) Limitations on size of investments.--
                      Notwithstanding any other provision of law, 
                      investments by a banking entity in a hedge fund or 
                      private equity fund shall--
                                    ``(I) <<NOTE: Deadline.>>  not later 
                                than 1 year after the date of 
                                establishment of the fund, be reduced 
                                through redemption, sale, or dilution to 
                                an amount that is not more than 3 
                                percent of the total ownership interests 
                                of the fund;
                                    ``(II) be immaterial to the banking 
                                entity, as defined, by rule, pursuant to 
                                subsection (b)(2), but in no case may 
                                the aggregate of all of the interests of 
                                the banking entity in all such funds 
                                exceed 3 percent of the Tier 1 capital 
                                of the banking entity.
                          ``(iii) Capital.--For purposes of determining 
                      compliance with applicable capital standards under 
                      paragraph (3), the aggregate amount of the 
                      outstanding investments by a banking entity under 
                      this paragraph, including retained earnings, shall 
                      be deducted from the assets and tangible equity of 
                      the banking entity, and the amount of the 
                      deduction shall increase commensurate with the 
                      leverage of the hedge fund or private equity fund.
                    ``(C) Extension.--Upon an application by a banking 
                entity, the Board may extend the period of time to meet 
                the requirements under subparagraph (B)(ii)(I) for 2 
                additional years, if the Board finds that an extension 
                would be consistent with safety and soundness and in the 
                public interest.

    ``(e) Anti-evasion.--
            ``(1) Rulemaking.--The appropriate Federal banking agencies, 
        the Securities and Exchange Commission, and the Commodity 
        Futures Trading Commission shall issue regulations, as part of 
        the rulemaking provided for in subsection (b)(2), regarding 
        internal controls and recordkeeping, in order to insure 
        compliance with this section.
            ``(2) Termination of activities or investment.--
        Notwithstanding any other provision of law, whenever an 
        appropriate Federal banking agency, the Securities and Exchange 
        Commission, or the Commodity Futures Trading Commission, as 
        appropriate, has reasonable cause to believe that a banking 
        entity or nonbank financial company supervised by the Board 
        under the respective agency's jurisdiction has made an 
        investment or engaged in an activity in a manner that functions 
        as an evasion of the requirements of this section (including 
        through an abuse of any permitted activity) or otherwise 
        violates the restrictions under this section, the appropriate 
        Federal banking agency, the Securities and Exchange Commission, 
        or the Commodity Futures Trading Commission, as appropriate, 
        shall

[[Page 124 STAT. 1628]]

        order, after due notice and opportunity for hearing, the banking 
        entity or nonbank financial company supervised by the Board to 
        terminate the activity and, as relevant, dispose of the 
        investment. Nothing in this paragraph shall be construed to 
        limit the inherent authority of any Federal agency or State 
        regulatory authority to further restrict any investments or 
        activities under otherwise applicable provisions of law.

    ``(f) Limitations on Relationships With Hedge Funds and Private 
Equity Funds.--
            ``(1) In general.--No banking entity that serves, directly 
        or indirectly, as the investment manager, investment adviser, or 
        sponsor to a hedge fund or private equity fund, or that 
        organizes and offers a hedge fund or private equity fund 
        pursuant to paragraph (d)(1)(G), and no affiliate of such 
        entity, may enter into a transaction with the fund, or with any 
        other hedge fund or private equity fund that is controlled by 
        such fund, that would be a covered transaction, as defined in 
        section 23A of the Federal Reserve Act (12 U.S.C. 371c), with 
        the hedge fund or private equity fund, as if such banking entity 
        and the affiliate thereof were a member bank and the hedge fund 
        or private equity fund were an affiliate thereof.
            ``(2) Treatment as member bank.--A banking entity that 
        serves, directly or indirectly, as the investment manager, 
        investment adviser, or sponsor to a hedge fund or private equity 
        fund, or that organizes and offers a hedge fund or private 
        equity fund pursuant to paragraph (d)(1)(G), shall be subject to 
        section 23B of the Federal Reserve Act (12 U.S.C. 371c-1), as if 
        such banking entity were a member bank and such hedge fund or 
        private equity fund were an affiliate thereof.
            ``(3) Permitted services.--
                    ``(A) In general.--Notwithstanding paragraph (1), 
                the Board may permit a banking entity to enter into any 
                prime brokerage transaction with any hedge fund or 
                private equity fund in which a hedge fund or private 
                equity fund managed, sponsored, or advised by such 
                banking entity has taken an equity, partnership, or 
                other ownership interest, if--
                          ``(i) the banking entity is in compliance with 
                      each of the limitations set forth in subsection 
                      (d)(1)(G) with regard to a hedge fund or private 
                      equity fund organized and offered by such banking 
                      entity;
                          ``(ii) the chief executive officer (or 
                      equivalent officer) of the banking entity 
                      certifies in writing annually (with a duty to 
                      update the certification if the information in the 
                      certification materially changes) that the 
                      conditions specified in subsection (d)(1)(g)(v) 
                      are satisfied; and
                          ``(iii) the Board has determined that such 
                      transaction is consistent with the safe and sound 
                      operation and condition of the banking entity.
                    ``(B) Treatment of prime brokerage transactions.--
                For purposes of subparagraph (A), a prime brokerage 
                transaction described in subparagraph (A) shall be 
                subject to section 23B of the Federal Reserve Act (12 
                U.S.C. 371c-1) as if the counterparty were an affiliate 
                of the banking entity.

[[Page 124 STAT. 1629]]

            ``(4) Application to nonbank financial companies supervised 
        by the board.--The appropriate <<NOTE: Regulations.>>  Federal 
        banking agencies, the Securities and Exchange Commission, and 
        the Commodity Futures Trading Commission shall adopt rules, as 
        provided in subsection (b)(2), imposing additional capital 
        charges or other restrictions for nonbank financial companies 
        supervised by the Board to address the risks to and conflicts of 
        interest of banking entities described in paragraphs (1), (2), 
        and (3) of this subsection.

    ``(g) Rules of Construction.--
            ``(1) Limitation on contrary authority.--Except as provided 
        in this section, notwithstanding any other provision of law, the 
        prohibitions and restrictions under this section shall apply to 
        activities of a banking entity or nonbank financial company 
        supervised by the Board, even if such activities are authorized 
        for a banking entity or nonbank financial company supervised by 
        the Board.
            ``(2) Sale or securitization of loans.--Nothing in this 
        section shall be construed to limit or restrict the ability of a 
        banking entity or nonbank financial company supervised by the 
        Board to sell or securitize loans in a manner otherwise 
        permitted by law.
            ``(3) Authority of federal agencies and state regulatory 
        authorities.--Nothing in this section shall be construed to 
        limit the inherent authority of any Federal agency or State 
        regulatory authority under otherwise applicable provisions of 
        law.

    ``(h) Definitions.--In this section, the following definitions shall 
apply:
            ``(1) Banking entity.--The term `banking entity' means any 
        insured depository institution (as defined in section 3 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813)), any company 
        that controls an insured depository institution, or that is 
        treated as a bank holding company for purposes of section 8 of 
        the International Banking Act of 1978, and any affiliate or 
        subsidiary of any such entity. For purposes of this paragraph, 
        the term `insured depository institution' does not include an 
        institution that functions solely in a trust or fiduciary 
        capacity, if--
                    ``(A) all or substantially all of the deposits of 
                such institution are in trust funds and are received in 
                a bona fide fiduciary capacity;
                    ``(B) no deposits of such institution which are 
                insured by the Federal Deposit Insurance Corporation are 
                offered or marketed by or through an affiliate of such 
                institution;
                    ``(C) such institution does not accept demand 
                deposits or deposits that the depositor may withdraw by 
                check or similar means for payment to third parties or 
                others or make commercial loans; and
                    ``(D) such institution does not--
                          ``(i) obtain payment or payment related 
                      services from any Federal Reserve bank, including 
                      any service referred to in section 11A of the 
                      Federal Reserve Act (12 U.S.C. 248a); or
                          ``(ii) exercise discount or borrowing 
                      privileges pursuant to section 19(b)(7) of the 
                      Federal Reserve Act (12 U.S.C. 461(b)(7)).

[[Page 124 STAT. 1630]]

            ``(2) Hedge fund; private equity fund.--The terms `hedge 
        fund' and `private equity fund' mean an issuer that would be an 
        investment company, as defined in the Investment Company Act of 
        1940 (15 U.S.C. 80a-1 et seq.), but for section 3(c)(1) or 
        3(c)(7) of that Act, or such similar funds as the appropriate 
        Federal banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading Commission may, by 
        rule, as provided in subsection (b)(2), determine.
            ``(3) Nonbank financial company supervised by the board.--
        The term `nonbank financial company supervised by the Board' 
        means a nonbank financial company supervised by the Board of 
        Governors, as defined in section 102 of the Financial Stability 
        Act of 2010.
            ``(4) Proprietary trading.--The term `proprietary trading', 
        when used with respect to a banking entity or nonbank financial 
        company supervised by the Board, means engaging as a principal 
        for the trading account of the banking entity or nonbank 
        financial company supervised by the Board in any transaction to 
        purchase or sell, or otherwise acquire or dispose of, any 
        security, any derivative, any contract of sale of a commodity 
        for future delivery, any option on any such security, 
        derivative, or contract, or any other security or financial 
        instrument that the appropriate Federal banking agencies, the 
        Securities and Exchange Commission, and the Commodity Futures 
        Trading Commission may, by rule as provided in subsection 
        (b)(2), determine.
            ``(5) Sponsor.--The term to `sponsor' a fund means--
                    ``(A) to serve as a general partner, managing 
                member, or trustee of a fund;
                    ``(B) in any manner to select or to control (or to 
                have employees, officers, or directors, or agents who 
                constitute) a majority of the directors, trustees, or 
                management of a fund; or
                    ``(C) to share with a fund, for corporate, 
                marketing, promotional, or other purposes, the same name 
                or a variation of the same name.
            ``(6) Trading account.--The term `trading account' means any 
        account used for acquiring or taking positions in the securities 
        and instruments described in paragraph (4) principally for the 
        purpose of selling in the near term (or otherwise with the 
        intent to resell in order to profit from short-term price 
        movements), and any such other accounts as the appropriate 
        Federal banking agencies, the Securities and Exchange 
        Commission, and the Commodity Futures Trading Commission may, by 
        rule as provided in subsection (b)(2), determine.
            ``(7) Illiquid fund.--
                    ``(A) In general.--The term `illiquid fund' means a 
                hedge fund or private equity fund that--
                          ``(i) as of May 1, 2010, was principally 
                      invested in, or was invested and contractually 
                      committed to principally invest in, illiquid 
                      assets, such as portfolio companies, real estate 
                      investments, and venture capital investments; and
                          ``(ii) makes all investments pursuant to, and 
                      consistent with, an investment strategy to 
                      principally invest in illiquid assets. In issuing 
                      rules regarding

[[Page 124 STAT. 1631]]

                      this subparagraph, the Board shall take into 
                      consideration the terms of investment for the 
                      hedge fund or private equity fund, including 
                      contractual obligations, the ability of the fund 
                      to divest of assets held by the fund, and any 
                      other factors that the Board determines are 
                      appropriate.
                    ``(B) Hedge fund.--For the purposes of this 
                paragraph, the term `hedge fund' means any fund 
                identified under subsection (h)(2), and does not include 
                a private equity fund, as such term is used in section 
                203(m) of the Investment Advisers Act of 1940 (15 U.S.C. 
                80b-3(m)).''.
SEC. 620. STUDY OF BANK INVESTMENT ACTIVITIES.

    (a) Study.--
            (1) <<NOTE: Deadline.>> In general.--Not later than 18 
        months after the date of enactment of this Act, the appropriate 
        Federal banking agencies shall jointly review and prepare a 
        report on the activities that a banking entity, as such term is 
        defined in the Bank Holding Company Act of 1956 (12 U.S.C. 1841 
        et. seq.), may engage in under Federal and State law, including 
        activities authorized by statute and by order, interpretation 
        and guidance.
            (2) Content.--In carrying out the study under paragraph (1), 
        the appropriate Federal banking agencies shall review and 
        consider--
                    (A) the type of activities or investments;
                    (B) any financial, operational, managerial, or 
                reputation risks associated with or presented as a 
                result of the banking entity engaged in the activity or 
                making the investment; and
                    (C) risk mitigation activities undertaken by the 
                banking entity with regard to the risks.

    (b) Report and Recommendations to the Council and to Congress.--The 
appropriate Federal banking agencies shall submit to the Council, the 
Committee on Financial Services of the House of Representatives, and the 
Committee on Banking, Housing, and Urban Affairs of the Senate the study 
conducted pursuant to subsection (a) no later than 2 months after its 
completion. In addition to the information described in subsection (a), 
the report shall include recommendations regarding--
            (1) whether each activity or investment has or could have a 
        negative effect on the safety and soundness of the banking 
        entity or the United States financial system;
            (2) the appropriateness of the conduct of each activity or 
        type of investment by banking entities; and
            (3) additional restrictions as may be necessary to address 
        risks to safety and soundness arising from the activities or 
        types of investments described in subsection (a).
SEC. 621. CONFLICTS OF INTEREST.

    (a) In General.--The Securities Act of 1933 (15 U.S.C. 77a et seq.) 
is amended by inserting after section 27A the following:
``SEC. 27B. <<NOTE: 15 USC 77z-2a.>>  CONFLICTS OF INTEREST 
                        RELATING TO CERTAIN SECURITIZATIONS.

    ``(a) In General.--An underwriter, placement agent, initial 
purchaser, or sponsor, or any affiliate or subsidiary of any such 
entity, of an asset-backed security (as such term is defined in

[[Page 124 STAT. 1632]]

section 3 of the Securities and Exchange Act of 1934 (15 U.S.C. 78c), 
which for the purposes of this section shall include a synthetic asset-
backed security), shall not, at any time for a period ending on the date 
that is one year after the date of the first closing of the sale of the 
asset-backed security, engage in any transaction that would involve or 
result in any material conflict of interest with respect to any investor 
in a transaction arising out of such activity.
    ``(b) <<NOTE: Deadline.>>  Rulemaking.--Not later than 270 days 
after the date of enactment of this section, the Commission shall issue 
rules for the purpose of implementing subsection (a).

    ``(c) Exception.--The prohibitions of subsection (a) shall not apply 
to--
            ``(1) risk-mitigating hedging activities in connection with 
        positions or holdings arising out of the underwriting, 
        placement, initial purchase, or sponsorship of an asset-backed 
        security, provided that such activities are designed to reduce 
        the specific risks to the underwriter, placement agent, initial 
        purchaser, or sponsor associated with positions or holdings 
        arising out of such underwriting, placement, initial purchase, 
        or sponsorship; or
            ``(2) purchases or sales of asset-backed securities made 
        pursuant to and consistent with--
                    ``(A) commitments of the underwriter, placement 
                agent, initial purchaser, or sponsor, or any affiliate 
                or subsidiary of any such entity, to provide liquidity 
                for the asset-backed security, or
                    ``(B) bona fide market-making in the asset backed 
                security.

    ``(d) Rule of Construction.--This subsection shall not otherwise 
limit the application of section 15G of the Securities Exchange Act of 
1934.''.
    (b) <<NOTE: 15 USC 77z-2a note.>>  Effective Date.--Section 27B of 
the Securities Act of 1933, as added by this section, shall take effect 
on the effective date of final rules issued by the Commission under 
subsection (b) of such section 27B, except that subsections (b) and (d) 
of such section 27B shall take effect on the date of enactment of this 
Act.
SEC. 622. CONCENTRATION LIMITS ON LARGE FINANCIAL FIRMS.

    The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is 
amended by adding at the end the following:
``SEC. 14. <<NOTE: 12 USC 1852.>> CONCENTRATION LIMITS ON LARGE 
                      FINANCIAL FIRMS.

    ``(a) Definitions.--In this section--
            ``(1) the term `Council' means the Financial Stability 
        Oversight Council;
            ``(2) the term `financial company' means--
                    ``(A) an insured depository institution;
                    ``(B) a bank holding company;
                    ``(C) a savings and loan holding company;
                    ``(D) a company that controls an insured depository 
                institution;
                    ``(E) a nonbank financial company supervised by the 
                Board under title I of the Dodd-Frank Wall Street Reform 
                and Consumer Protection Act; and
                    ``(F) a foreign bank or company that is treated as a 
                bank holding company for purposes of this Act; and
            ``(3) the term `liabilities' means--

[[Page 124 STAT. 1633]]

                    ``(A) with respect to a United States financial 
                company--
                          ``(i) the total risk-weighted assets of the 
                      financial company, as determined under the risk-
                      based capital rules applicable to bank holding 
                      companies, as adjusted to reflect exposures that 
                      are deducted from regulatory capital; less
                          ``(ii) the total regulatory capital of the 
                      financial company under the risk-based capital 
                      rules applicable to bank holding companies;
                    ``(B) with respect to a foreign-based financial 
                company--
                          ``(i) the total risk-weighted assets of the 
                      United States operations of the financial company, 
                      as determined under the applicable risk-based 
                      capital rules, as adjusted to reflect exposures 
                      that are deducted from regulatory capital; less
                          ``(ii) the total regulatory capital of the 
                      United States operations of the financial company, 
                      as determined under the applicable risk-based 
                      capital rules; and
                    ``(C) with respect to an insurance company or other 
                nonbank financial company supervised by the Board, such 
                assets of the company as the Board shall specify by 
                rule, in order to provide for consistent and equitable 
                treatment of such companies.

    ``(b) Concentration Limit.--Subject to the recommendations by the 
Council under subsection (e), a financial company may not merge or 
consolidate with, acquire all or substantially all of the assets of, or 
otherwise acquire control of, another company, if the total consolidated 
liabilities of the acquiring financial company upon consummation of the 
transaction would exceed 10 percent of the aggregate consolidated 
liabilities of all financial companies at the end of the calendar year 
preceding the transaction.
    ``(c) Exception to Concentration Limit.--With the prior written 
consent of the Board, the concentration limit under subsection (b) shall 
not apply to an acquisition--
            ``(1) of a bank in default or in danger of default;
            ``(2) with respect to which assistance is provided by the 
        Federal Deposit Insurance Corporation under section 13(c) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1823(c)); or
            ``(3) that would result only in a de minimis increase in the 
        liabilities of the financial company.

    ``(d) Rulemaking and Guidance.--The Board shall issue regulations 
implementing this section in accordance with the recommendations of the 
Council under subsection (e), including the definition of terms, as 
necessary. The Board may issue interpretations or guidance regarding the 
application of this section to an individual financial company or to 
financial companies in general.
    ``(e) Council Study and Rulemaking.--
            ``(1) <<NOTE: Deadline.>>  Study and recommendations.--Not 
        later than 6 months after the date of enactment of this section, 
        the Council shall--
                    ``(A) complete a study of the extent to which the 
                concentration limit under this section would affect 
                financial stability, moral hazard in the financial 
                system, the efficiency and competitiveness of United 
                States financial firms

[[Page 124 STAT. 1634]]

                and financial markets, and the cost and availability of 
                credit and other financial services to households and 
                businesses in the United States; and
                    ``(B) make recommendations regarding any 
                modifications to the concentration limit that the 
                Council determines would more effectively implement this 
                section.
            ``(2) <<NOTE: Deadline.>> Rulemaking.--Not later than 9 
        months after the date of completion of the study under paragraph 
        (1), and notwithstanding subsections (b) and (d), the Board 
        shall issue final regulations implementing this section, which 
        shall reflect any recommendations by the Council under paragraph 
        (1)(B).''.
SEC. 623. INTERSTATE MERGER TRANSACTIONS.

    (a) Interstate Merger Transactions.--Section 18(c) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by adding at the 
end the following:
    ``(13)(A) Except as provided in subparagraph (B), the responsible 
agency may not approve an application for an interstate merger 
transaction if the resulting insured depository institution (including 
all insured depository institutions which are affiliates of the 
resulting insured depository institution), upon consummation of the 
transaction, would control more than 10 percent of the total amount of 
deposits of insured depository institutions in the United States.
    ``(B) Subparagraph (A) shall not apply to an interstate merger 
transaction that involves 1 or more insured depository institutions in 
default or in danger of default, or with respect to which the 
Corporation provides assistance under section 13.
    ``(C) In this paragraph--
            ``(i) the term `interstate merger transaction' means a 
        merger transaction involving 2 or more insured depository 
        institutions that have different home States and that are not 
        affiliates; and
            ``(ii) the term `home State' means--
                    ``(I) with respect to a national bank, the State in 
                which the main office of the bank is located;
                    ``(II) with respect to a State bank or State savings 
                association, the State by which the State bank or State 
                savings association is chartered; and
                    ``(III) with respect to a Federal savings 
                association, the State in which the home office (as 
                defined by the regulations of the Director of the Office 
                of Thrift Supervision, or, on and after the transfer 
                date, the Comptroller of the Currency) of the Federal 
                savings association is located.''.

    (b) Acquisitions by Bank Holding Companies.--
            (1) In general.--Section 4 of the Bank Holding Company Act 
        of 1956 (12 U.S.C. 1843) is amended--
                    (A) in subsection (i), by adding at the end the 
                following:
            ``(8) Interstate acquisitions.--
                    ``(A) In general.--The Board may not approve an 
                application by a bank holding company to acquire an 
                insured depository institution under subsection (c)(8) 
                or any other provision of this Act if--
                          ``(i) the home State of such insured 
                      depository institution is a State other than the 
                      home State of the bank holding company; and

[[Page 124 STAT. 1635]]

                          ``(ii) the applicant (including all insured 
                      depository institutions which are affiliates of 
                      the applicant) controls, or upon consummation of 
                      the transaction would control, more than 10 
                      percent of the total amount of deposits of insured 
                      depository institutions in the United States.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to an acquisition that involves an insured depository 
                institution in default or in danger of default, or with 
                respect to which the Federal Deposit Insurance 
                Corporation provides assistance under section 13 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1823).''; and
                    (B) in subsection (k)(6)(B), by striking ``savings 
                association'' and inserting ``insured depository 
                institution''.
            (2) Definitions.--Section 2(o)(4) of the Bank Holding 
        Company Act of 1956 (12 U.S.C. 1841(o)(4)) is amended--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C)(ii), by striking the period 
                at the end and inserting a semicolon; and
                    (C) by adding at the end the following:
                    ``(D) with respect to a State savings association, 
                the State by which the savings association is chartered; 
                and
                    ``(E) with respect to a Federal savings association, 
                the State in which the home office (as defined by the 
                regulations of the Director of the Office of Thrift 
                Supervision, or, on and after the transfer date, the 
                Comptroller of the Currency) of the Federal savings 
                association is located.''.

    (c) Acquisitions by Savings and Loan Holding Companies.--Section 
10(e)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)(2)) is 
amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (C), by striking ``or'' at the 
                end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting ``, or''; and
                    (C) by adding at the end the following:
                    ``(E) in the case of an application by a savings and 
                loan holding company to acquire an insured depository 
                institution, if--
                          ``(i) the home State of the insured depository 
                      institution is a State other than the home State 
                      of the savings and loan holding company;
                          ``(ii) the applicant (including all insured 
                      depository institutions which are affiliates of 
                      the applicant) controls, or upon consummation of 
                      the transaction would control, more than 10 
                      percent of the total amount of deposits of insured 
                      depository institutions in the United States; and
                          ``(iii) the acquisition does not involve an 
                      insured depository institution in default or in 
                      danger of default, or with respect to which the 
                      Federal Deposit Insurance Corporation provides 
                      assistance under section 13 of the Federal Deposit 
                      Insurance Act (12 U.S.C. 1823).''; and
            (2) by adding at the end the following:
            ``(7) Definitions.--For purposes of paragraph (2)(E)--
                    ``(A) the terms `default', `in danger of default', 
                and `insured depository institution' have the same 
                meanings

[[Page 124 STAT. 1636]]

                as in section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813); and
                    ``(B) the term `home State' means--
                          ``(i) with respect to a national bank, the 
                      State in which the main office of the bank is 
                      located;
                          ``(ii) with respect to a State bank or State 
                      savings association, the State by which the 
                      savings association is chartered;
                          ``(iii) with respect to a Federal savings 
                      association, the State in which the home office 
                      (as defined by the regulations of the Director of 
                      the Office of Thrift Supervision, or, on and after 
                      the transfer date, the Comptroller of the 
                      Currency) of the Federal savings association is 
                      located; and
                          ``(iv) with respect to a savings and loan 
                      holding company, the State in which the amount of 
                      total deposits of all insured depository 
                      institution subsidiaries of such company was the 
                      greatest on the date on which the company became a 
                      savings and loan holding company.''.
SEC. 624. QUALIFIED THRIFT LENDERS.

    Section 10(m)(3) of the Home Owners' Loan Act (12 U.S.C. 
1467a(m)(3)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following:
                    ``(A) In general.--A savings association that fails 
                to become or remain a qualified thrift lender shall 
                immediately be subject to the restrictions under 
                subparagraph (B).''; and
            (2) in subparagraph (B)(i), by striking subclause (III) and 
        inserting the following:
                                    ``(III) Dividends.--The savings 
                                association may not pay dividends, 
                                except for dividends that--
                                            ``(aa) would be permissible 
                                        for a national bank;
                                            ``(bb) are necessary to meet 
                                        obligations of a company that 
                                        controls such savings 
                                        association; and
                                            ``(cc) are specifically 
                                        approved by the Comptroller of 
                                        the Currency and the Board after 
                                        a written request submitted to 
                                        the Comptroller of the Currency 
                                        and the Board by the savings 
                                        association not later than 30 
                                        days before the date of the 
                                        proposed payment.
                                    ``(IV) Regulatory authority.--A 
                                savings association that fails to become 
                                or remain a qualified thrift lender 
                                shall be deemed to have violated section 
                                5 of the Home Owners' Loan Act (12 
                                U.S.C. 1464) and subject to actions 
                                authorized by section 5(d) of the Home 
                                Owners' Loan Act (12 U.S.C. 1464(d)).''.
SEC. 625. TREATMENT OF DIVIDENDS BY CERTAIN MUTUAL HOLDING 
                        COMPANIES.

    (a) In General.--Section 10(o) of the Home Owners' Loan Act (12 
U.S.C. 1467a(o) is amended by adding at the end the following:

[[Page 124 STAT. 1637]]

            ``(11) Dividends.--
                    ``(A) Declaration of dividends.--
                          ``(i) <<NOTE: Deadline.>> Advance notice 
                      required.--Each subsidiary of a mutual holding 
                      company that is a savings association shall give 
                      the appropriate Federal banking agency and the 
                      Board notice not later than 30 days before the 
                      date of a proposed declaration by the board of 
                      directors of the savings association of any 
                      dividend on the guaranty, permanent, or other 
                      nonwithdrawable stock of the savings association.
                          ``(ii) <<NOTE: Time period.>>  Invalid 
                      dividends.--Any dividend described in clause (i) 
                      that is declared without giving notice to the 
                      appropriate Federal banking agency and the Board 
                      under clause (i), or that is declared during the 
                      30-day period preceding the date of a proposed 
                      declaration for which notice is given to the 
                      appropriate Federal banking agency and the Board 
                      under clause (i), shall be invalid and shall 
                      confer no rights or benefits upon the holder of 
                      any such stock.
                    ``(B) Waiver of dividends.--A mutual holding company 
                may waive the right to receive any dividend declared by 
                a subsidiary of the mutual holding company, if--
                          ``(i) no insider of the mutual holding 
                      company, associate of an insider, or tax-qualified 
                      or non-tax-qualified employee stock benefit plan 
                      of the mutual holding company holds any share of 
                      the stock in the class of stock to which the 
                      waiver would apply; or
                          ``(ii) <<NOTE: Deadline.>> the mutual holding 
                      company gives written notice to the Board of the 
                      intent of the mutual holding company to waive the 
                      right to receive dividends, not later than 30 days 
                      before the date of the proposed date of payment of 
                      the dividend, and the Board does not object to the 
                      waiver.
                    ``(C) Resolution included in waiver notice.--A 
                notice of a waiver under subparagraph (B) shall include 
                a copy of the resolution of the board of directors of 
                the mutual holding company, in such form and substance 
                as the Board may determine, together with any supporting 
                materials relied upon by the board of directors of the 
                mutual holding company, concluding that the proposed 
                dividend waiver is consistent with the fiduciary duties 
                of the board of directors to the mutual members of the 
                mutual holding company.
                    ``(D) Standards for waiver of dividend.--The Board 
                may not object to a waiver of dividends under 
                subparagraph (B) if--
                          ``(i) the waiver would not be detrimental to 
                      the safe and sound operation of the savings 
                      association;
                          ``(ii) the board of directors of the mutual 
                      holding company expressly determines that a waiver 
                      of the dividend by the mutual holding company is 
                      consistent with the fiduciary duties of the board 
                      of directors to the mutual members of the mutual 
                      holding company; and
                          ``(iii) the mutual holding company has, prior 
                      to December 1, 2009--

[[Page 124 STAT. 1638]]

                                    ``(I) reorganized into a mutual 
                                holding company under subsection (o);
                                    ``(II) issued minority stock either 
                                from its mid-tier stock holding company 
                                or its subsidiary stock savings 
                                association; and
                                    ``(III) waived dividends it had a 
                                right to receive from the subsidiary 
                                stock savings association.
                    ``(E) Valuation.--
                          ``(i) In general.--The appropriate Federal 
                      banking agency shall consider waived dividends in 
                      determining an appropriate exchange ratio in the 
                      event of a full conversion to stock form.
                          ``(ii) Exception.--In the case of a savings 
                      association that has reorganized into a mutual 
                      holding company, has issued minority stock from a 
                      mid-tier stock holding company or a subsidiary 
                      stock savings association of the mutual holding 
                      company, and has waived dividends it had a right 
                      to receive from a subsidiary savings association 
                      before December 1, 2009, the appropriate Federal 
                      banking agency shall not consider waived dividends 
                      in determining an appropriate exchange ratio in 
                      the event of a full conversion to stock form.''.

    (b) <<NOTE: 12 USC 1467a note.>> Effective Date.--The amendment made 
by subsection (a) shall take effect on the transfer date.
SEC. 626. INTERMEDIATE HOLDING COMPANIES.

    The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is amended by 
inserting after section 10 (12 U.S.C. 1467a) the following new section:
``SEC. 10A. <<NOTE: 12 USC 1467b.>>  INTERMEDIATE HOLDING 
                        COMPANIES.

    ``(a) Definition.--For purposes of this section:
            ``(1) Financial activities.--The term `financial activities' 
        means activities described in clauses (i) and (ii) of section 
        10(c)(9)(A).
            ``(2) Grandfathered unitary savings and loan holding 
        company.--The term `grandfathered unitary savings and loan 
        holding company' means a company described in section 
        10(c)(9)(C).
            ``(3) Internal financial activities.--The term `internal 
        financial activities' includes--
                    ``(A) internal financial activities conducted by a 
                grandfathered savings and loan holding company or any 
                affiliate; and
                    ``(B) internal treasury, investment, and employee 
                benefit functions.

    ``(b) Requirement.--
            ``(1) In general.--
                    ``(A) Activities other than financial activities.--
                If <<NOTE: Deadline.>>  a grandfathered unitary savings 
                and loan holding company conducts activities other than 
                financial activities, the Board may require such company 
                to establish and conduct all or a portion of such 
                financial activities in or through an intermediate 
                holding company, which shall be a savings and loan 
                holding company, established pursuant to regulations of 
                the Board, not later than 90 days (or such longer

[[Page 124 STAT. 1639]]

                period as the Board may deem appropriate) after the 
                transfer date.
                    ``(B) Other activities.--Notwithstanding 
                subparagraph (A), the Board shall require a 
                grandfathered unitary savings and loan holding company 
                to establish an intermediate holding company if the 
                Board makes a determination that the establishment of 
                such intermediate holding company is necessary--
                          ``(i) to appropriately supervise activities 
                      that are determined to be financial activities; or
                          ``(ii) to ensure that supervision by the Board 
                      does not extend to the activities of such company 
                      that are not financial activities.
            ``(2) Internal financial activities.--
                    ``(A) Treatment of internal financial activities.--
                For purposes of this subsection, the internal financial 
                activities of a grandfathered unitary savings and loan 
                holding company shall not be required to be placed in an 
                intermediate holding company.
                    ``(B) Grandfathered activities.--A grandfathered 
                unitary savings and loan holding company may continue to 
                engage in an internal financial activity, subject to 
                review by the Board to determine whether engaging in 
                such activity presents undue risk to the grandfathered 
                unitary savings and loan holding company or to the 
                financial stability of the United States, if--
                          ``(i) the grandfathered unitary savings and 
                      loan holding company engaged in the activity 
                      during the year before the date of enactment of 
                      this section; and
                          ``(ii) at least \2/3\ of the assets or \2/3\ 
                      of the revenues generated from the activity are 
                      from or attributable to the grandfathered unitary 
                      savings and loan holding company.
            ``(3) Source of strength.--A grandfathered unitary savings 
        and loan holding company that directly or indirectly controls an 
        intermediate holding company established under this section 
        shall serve as a source of strength to its subsidiary 
        intermediate holding company.
            ``(4) Parent company reports.--The Board, may from time to 
        time, examine and require reports under oath from a 
        grandfathered unitary savings and loan holding company that 
        controls an intermediate holding company, and from the 
        appropriate officers or directors of such company, solely for 
        purposes of ensuring compliance with the provisions of this 
        section, including assessing the ability of the company to serve 
        as a source of strength to its subsidiary intermediate holding 
        company as required under paragraph (3) and enforcing compliance 
        with such requirement.
            ``(5) Limited parent company enforcement.--
                    ``(A) In general.--In addition to any other 
                authority of the Board, the Board may enforce compliance 
                with the provisions of this subsection that are 
                applicable to any company described in paragraph (1)(A) 
                that controls an intermediate holding company under 
                section 8 of the Federal Deposit Insurance Act, and a 
                company described in paragraph (1)(A) shall be subject 
                to such section (solely for purposes of this 
                subparagraph) in the same manner

[[Page 124 STAT. 1640]]

                and to the same extent as if the company described in 
                paragraph (1)(A) were a savings and loan holding 
                company.
                    ``(B) Application of other act.--Any violation of 
                this subsection by a grandfathered unitary savings and 
                loan holding company that controls an intermediate 
                holding company may also be treated as a violation of 
                the Federal Deposit Insurance Act for purposes of 
                subparagraph (A).
                    ``(C) No effect on other authority.--No provision of 
                this paragraph shall be construed as limiting any 
                authority of the Board or any other Federal agency under 
                any other provision of law.

    ``(c) Regulations.--The Board--
            ``(1) shall promulgate regulations to establish the criteria 
        for determining whether to require a grandfathered unitary 
        savings and loan holding company to establish an intermediate 
        holding company under subsection (b); and
            ``(2) may promulgate regulations to establish any 
        restrictions or limitations on transactions between an 
        intermediate holding company or a parent of such company and its 
        affiliates, as necessary to prevent unsafe and unsound practices 
        in connection with transactions between the intermediate holding 
        company, or any subsidiary thereof, and its parent company or 
        affiliates that are not subsidiaries of the intermediate holding 
        company, except that such regulations shall not restrict or 
        limit any transaction in connection with the bona fide 
        acquisition or lease by an unaffiliated person of assets, goods, 
        or services.

    ``(d) Rules of Construction.--
            ``(1) Activities.--Nothing in this section shall be 
        construed to require a grandfathered unitary savings and loan 
        holding company to conform its activities to permissible 
        activities.
            ``(2) Permissible corporate reorganization.--The formation 
        of an intermediate holding company as required in subsection (b) 
        shall be presumed to be a permissible corporate reorganization 
        as described in section 10(c)(9)(D).''.
SEC. 627. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.

    (a) Repeal of Prohibition on Payment of Interest on Demand 
Deposits.--
            (1) Federal reserve act.--Section 19(i) of the Federal 
        Reserve Act (12 U.S.C. 371a) is amended to read as follows:

    ``(i) [Repealed]''.
            (2) Home owners' loan act.--The first sentence of section 
        5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C. 
        1464(b)(1)(B)) is amended by striking ``savings association may 
        not--'' and all that follows through ``(ii) permit any'' and 
        inserting ``savings association may not permit any''.
            (3) Federal deposit insurance act.--Section 18(g) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended to 
        read as follows:

    ``(g) [Repealed]''.
    (b) <<NOTE: 12 USC 371a note.>> Effective Date.--The amendments made 
by subsection (a) shall take effect 1 year after the date of the 
enactment of this Act.
SEC. 628. CREDIT CARD BANK SMALL BUSINESS LENDING.

    Section 2(c)(2)(F)(v) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(c)(2)(F)(v)) is amended by inserting before the

[[Page 124 STAT. 1641]]

period the following: ``, other than credit card loans that are made to 
businesses that meet the criteria for a small business concern to be 
eligible for business loans under regulations established by the Small 
Business Administration under part 121 of title 13, Code of Federal 
Regulations''.

    TITLE <<NOTE: Wall Street Transparency and Accountability Act of 
2010.>>  VII--WALL STREET TRANSPARENCY AND ACCOUNTABILITY
SEC. 701. <<NOTE: 15 USC 8301 note.>>  SHORT TITLE.

    This title may be cited as the ``Wall Street Transparency and 
Accountability Act of 2010''.

        Subtitle A--Regulation of Over-the-Counter Swaps Markets

                      PART I--REGULATORY AUTHORITY

SEC. 711. <<NOTE: 15 USC 8301.>>  DEFINITIONS.

    In this subtitle, the terms ``prudential regulator'', ``swap'', 
``swap dealer'', ``major swap participant'', ``swap data repository'', 
``associated person of a swap dealer or major swap participant'', 
``eligible contract participant'', ``swap execution facility'', 
``security-based swap'', ``security-based swap dealer'', ``major 
security-based swap participant'', and ``associated person of a 
security-based swap dealer or major security-based swap participant'' 
have the meanings given the terms in section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a), including any modification of the meanings 
under section 721(b) of this Act.
SEC. 712. <<NOTE: 15 USC 8302.>>  REVIEW OF REGULATORY AUTHORITY.

    (a) Consultation.--
            (1) Commodity futures trading commission.--Before commencing 
        any rulemaking or issuing an order regarding swaps, swap 
        dealers, major swap participants, swap data repositories, 
        derivative clearing organizations with regard to swaps, persons 
        associated with a swap dealer or major swap participant, 
        eligible contract participants, or swap execution facilities 
        pursuant to this subtitle, the Commodity Futures Trading 
        Commission shall consult and coordinate to the extent possible 
        with the Securities and Exchange Commission and the prudential 
        regulators for the purposes of assuring regulatory consistency 
        and comparability, to the extent possible.
            (2) Securities and exchange commission.--Before commencing 
        any rulemaking or issuing an order regarding security-based 
        swaps, security-based swap dealers, major security-based swap 
        participants, security-based swap data repositories, clearing 
        agencies with regard to security-based swaps, persons associated 
        with a security-based swap dealer or major security-based swap 
        participant, eligible contract participants with regard to 
        security-based swaps, or security-based swap execution 
        facilities pursuant to subtitle B, the Securities and Exchange 
        Commission shall consult and coordinate to the

[[Page 124 STAT. 1642]]

        extent possible with the Commodity Futures Trading Commission 
        and the prudential regulators for the purposes of assuring 
        regulatory consistency and comparability, to the extent 
        possible.
            (3) Procedures and deadline.--Such regulations shall be 
        prescribed in accordance with applicable requirements of title 
        5, United States Code, and shall be issued in final form not 
        later than 360 days after the date of enactment of this Act.
            (4) Applicability.--The requirements of paragraphs (1) and 
        (2) shall not apply to an order issued--
                    (A) in connection with or arising from a violation 
                or potential violation of any provision of the Commodity 
                Exchange Act (7 U.S.C. 1 et seq.);
                    (B) in connection with or arising from a violation 
                or potential violation of any provision of the 
                securities laws; or
                    (C) in any proceeding that is conducted on the 
                record in accordance with sections 556 and 557 of title 
                5, United States Code.
            (5) Effect.--Nothing in this subsection authorizes any 
        consultation or procedure for consultation that is not 
        consistent with the requirements of subchapter II of chapter 5, 
        and chapter 7, of title 5, United States Code (commonly known as 
        the ``Administrative Procedure Act'').
            (6) Rules; orders.--In developing and promulgating rules or 
        orders pursuant to this subsection, each Commission shall 
        consider the views of the prudential regulators.
            (7) Treatment of similar products and entities.--
                    (A) In general.--In adopting rules and orders under 
                this subsection, the Commodity Futures Trading 
                Commission and the Securities and Exchange Commission 
                shall treat functionally or economically similar 
                products or entities described in paragraphs (1) and (2) 
                in a similar manner.
                    (B) Effect.--Nothing in this subtitle requires the 
                Commodity Futures Trading Commission or the Securities 
                and Exchange Commission to adopt joint rules or orders 
                that treat functionally or economically similar products 
                or entities described in paragraphs (1) and (2) in an 
                identical manner.
            (8) Mixed swaps.--The Commodity Futures Trading Commission 
        and the Securities and Exchange Commission, after consultation 
        with the Board of Governors, shall jointly prescribe such 
        regulations regarding mixed swaps, as described in section 
        1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and 
        in section 3(a)(68)(D) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)(68)(D)), as may be necessary to carry out the 
        purposes of this title.

    (b) Limitation.--
            (1) Commodity futures trading commission.--Nothing in this 
        title, unless specifically provided, confers jurisdiction on the 
        Commodity Futures Trading Commission to issue a rule, 
        regulation, or order providing for oversight or regulation of--
                    (A) security-based swaps; or
                    (B) with regard to its activities or functions 
                concerning security-based swaps--

[[Page 124 STAT. 1643]]

                          (i) security-based swap dealers;
                          (ii) major security-based swap participants;
                          (iii) security-based swap data repositories;
                          (iv) associated persons of a security-based 
                      swap dealer or major security-based swap 
                      participant;
                          (v) eligible contract participants with 
                      respect to security-based swaps; or
                          (vi) swap execution facilities with respect to 
                      security-based swaps.
            (2) Securities and exchange commission.--Nothing in this 
        title, unless specifically provided, confers jurisdiction on the 
        Securities and Exchange Commission or State securities 
        regulators to issue a rule, regulation, or order providing for 
        oversight or regulation of--
                    (A) swaps; or
                    (B) with regard to its activities or functions 
                concerning swaps--
                          (i) swap dealers;
                          (ii) major swap participants;
                          (iii) swap data repositories;
                          (iv) persons associated with a swap dealer or 
                      major swap participant;
                          (v) eligible contract participants with 
                      respect to swaps; or
                          (vi) swap execution facilities with respect to 
                      swaps.
            (3) Prohibition on certain futures associations and national 
        securities associations.--
                    (A) Futures associations.--Notwithstanding any other 
                provision of law (including regulations), unless 
                otherwise authorized by this title, no futures 
                association registered under section 17 of the Commodity 
                Exchange Act (7 U.S.C. 21) may issue a rule, regulation, 
                or order for the oversight or regulation of, or 
                otherwise assert jurisdiction over, for any purpose, any 
                security-based swap, except that this subparagraph shall 
                not limit the authority of a registered futures 
                association to examine for compliance with, and enforce, 
                its rules on capital adequacy.
                    (B) National securities associations.--
                Notwithstanding any other provision of law (including 
                regulations), unless otherwise authorized by this title, 
                no national securities association registered under 
                section 15A of the Securities Exchange Act of 1934 (15 
                U.S.C. 78o-3) may issue a rule, regulation, or order for 
                the oversight or regulation of, or otherwise assert 
                jurisdiction over, for any purpose, any swap, except 
                that this subparagraph shall not limit the authority of 
                a national securities association to examine for 
                compliance with, and enforce, its rules on capital 
                adequacy.

    (c) Objection to Commission Regulation.--
            (1) Filing of petition for review.--
                    (A) <<NOTE: Deadline.>> In general.--If either 
                Commission referred to in this section determines that a 
                final rule, regulation, or order of the other Commission 
                conflicts with subsection (a)(7) or (b), then the 
                complaining Commission may obtain review of the final 
                rule, regulation, or order in the United States Court of 
                Appeals for the District of Columbia Circuit by filing 
                in the court, not later than 60 days after the

[[Page 124 STAT. 1644]]

                date of publication of the final rule, regulation, or 
                order, a written petition requesting that the rule, 
                regulation, or order be set aside.
                    (B) Expedited proceeding.--A proceeding described in 
                subparagraph (A) shall be expedited by the United States 
                Court of Appeals for the District of Columbia Circuit.
            (2) Transmittal of petition and record.--
                    (A) In general.--A copy <<NOTE: Deadline.>>  of a 
                petition described in paragraph (1) shall be transmitted 
                not later than 1 business day after the date of filing 
                by the complaining Commission to the Secretary of the 
                responding Commission.
                    (B) Duty of responding commission.--On receipt of 
                the copy of a petition described in paragraph (1), the 
                responding Commission shall file with the United States 
                Court of Appeals for the District of Columbia Circuit--
                          (i) a copy of the rule, regulation, or order 
                      under review (including any documents referred to 
                      therein); and
                          (ii) any other materials prescribed by the 
                      United States Court of Appeals for the District of 
                      Columbia Circuit.
            (3) Standard of review.--The United States Court of Appeals 
        for the District of Columbia Circuit shall--
                    (A) give deference to the views of neither 
                Commission; and
                    (B) determine to affirm or set aside a rule, 
                regulation, or order of the responding Commission under 
                this subsection, based on the determination of the court 
                as to whether the rule, regulation, or order is in 
                conflict with subsection (a)(7) or (b), as applicable.
            (4) Judicial stay.--The filing of a petition by the 
        complaining Commission pursuant to paragraph (1) shall operate 
        as a stay of the rule, regulation, or order until the date on 
        which the determination of the United States Court of Appeals 
        for the District of Columbia Circuit is final (including any 
        appeal of the determination).

    (d) Joint Rulemaking.--
            (1) In general.--Notwithstanding any other provision of this 
        title and subsections (b) and (c), the Commodity Futures Trading 
        Commission and the Securities and Exchange Commission, in 
        consultation with the Board of Governors, shall further define 
        the terms ``swap'', ``security-based swap'', ``swap dealer'', 
        ``security-based swap dealer'', ``major swap participant'', 
        ``major security-based swap participant'', ``eligible contract 
        participant'', and ``security-based swap agreement'' in section 
        1a(47)(A)(v) of the Commodity Exchange Act (7 U.S.C. 
        1a(47)(A)(v)) and section 3(a)(78) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(78)).
            (2) Authority of the commissions.--
                    (A) In general.--Notwithstanding any other provision 
                of this title, the Commodity Futures Trading Commission 
                and the Securities and Exchange Commission, in 
                consultation with the Board of Governors, shall jointly 
                adopt such other rules regarding such definitions as the 
                Commodity Futures Trading Commission and the Securities 
                and

[[Page 124 STAT. 1645]]

                Exchange Commission determine are necessary and 
                appropriate, in the public interest, and for the 
                protection of investors.
                    (B) Trade repository recordkeeping.--Notwithstanding 
                any other provision of this title, the Commodity Futures 
                Trading Commission and the Securities and Exchange 
                Commission, in consultation with the Board of Governors, 
                shall engage in joint rulemaking to jointly adopt a rule 
                or rules governing the books and records that are 
                required to be kept and maintained regarding security-
                based swap agreements by persons that are registered as 
                swap data repositories under the Commodity Exchange Act, 
                including uniform rules that specify the data elements 
                that shall be collected and maintained by each 
                repository.
                    (C) Books and records.--Notwithstanding any other 
                provision of this title, the Commodity Futures Trading 
                Commission and the Securities and Exchange Commission, 
                in consultation with the Board of Governors, shall 
                engage in joint rulemaking to jointly adopt a rule or 
                rules governing books and records regarding security-
                based swap agreements, including daily trading records, 
                for swap dealers, major swap participants, security-
                based swap dealers, and security-based swap 
                participants.
                    (D) Comparable rules.--Rules and regulations 
                prescribed jointly under this title by the Commodity 
                Futures Trading Commission and the Securities and 
                Exchange Commission shall be comparable to the maximum 
                extent possible, taking into consideration differences 
                in instruments and in the applicable statutory 
                requirements.
                    (E) Tracking uncleared transactions.--Any rules 
                prescribed under subparagraph (A) shall require the 
                maintenance of records of all activities relating to 
                security-based swap agreement transactions defined under 
                subparagraph (A) that are not cleared.
                    (F) Sharing of information.--The Commodity Futures 
                Trading Commission shall make available to the 
                Securities and Exchange Commission information relating 
                to security-based swap agreement transactions defined in 
                subparagraph (A) that are not cleared.
            (3) Financial stability oversight council.--In the event 
        that the Commodity Futures Trading Commission and the Securities 
        and Exchange Commission fail to jointly prescribe rules pursuant 
        to paragraph (1) or (2) in a timely manner, at the request of 
        either Commission, the Financial Stability Oversight Council 
        shall resolve the dispute--
                    (A) within a reasonable time after receiving the 
                request;
                    (B) after consideration of relevant information 
                provided by each Commission; and
                    (C) by agreeing with 1 of the Commissions regarding 
                the entirety of the matter or by determining a 
                compromise position.
            (4) Joint interpretation.--Any interpretation of, or 
        guidance by either Commission regarding, a provision of this 
        title, shall be effective only if issued jointly by the 
        Commodity Futures Trading Commission and the Securities and 
        Exchange Commission, after consultation with the Board of 
        Governors,

[[Page 124 STAT. 1646]]

        if this title requires the Commodity Futures Trading Commission 
        and the Securities and Exchange Commission to issue joint 
        regulations to implement the provision.

    (e) <<NOTE: Deadline.>> Global Rulemaking Timeframe.--Unless 
otherwise provided in this title, or an amendment made by this title, 
the Commodity Futures Trading Commission or the Securities and Exchange 
Commission, or both, shall individually, and not jointly, promulgate 
rules and regulations required of each Commission under this title or an 
amendment made by this title not later than 360 days after the date of 
enactment of this Act.

    (f) Rules and Registration Before Final Effective Dates.--Beginning 
on the date of enactment of this Act and notwithstanding the effective 
date of any provision of this Act, the Commodity Futures Trading 
Commission and the Securities and Exchange Commission may, in order to 
prepare for the effective dates of the provisions of this Act--
            (1) promulgate rules, regulations, or orders permitted or 
        required by this Act;
            (2) conduct studies and prepare reports and recommendations 
        required by this Act;
            (3) register persons under the provisions of this Act; and
            (4) exempt persons, agreements, contracts, or transactions 
        from provisions of this Act, under the terms contained in this 
        Act,

provided, however, that no action by the Commodity Futures Trading 
Commission or the Securities and Exchange Commission described in 
paragraphs (1) through (4) shall become effective prior to the effective 
date applicable to such action under the provisions of this Act.
SEC. 713. PORTFOLIO MARGINING CONFORMING CHANGES.

    (a) Securities Exchange Act of 1934.--Section 15(c)(3) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(3)) is amended by 
adding at the end the following:
                    ``(C) Notwithstanding any provision of sections 
                2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act 
                and the rules and regulations thereunder, and pursuant 
                to an exemption granted by the Commission under section 
                36 of this title or pursuant to a rule or regulation, 
                cash and securities may be held by a broker or dealer 
                registered pursuant to subsection (b)(1) and also 
                registered as a futures commission merchant pursuant to 
                section 4f(a)(1) of the Commodity Exchange Act, in a 
                portfolio margining account carried as a futures account 
                subject to section 4d of the Commodity Exchange Act and 
                the rules and regulations thereunder, pursuant to a 
                portfolio margining program approved by the Commodity 
                Futures Trading Commission, and subject to subchapter IV 
                of chapter 7 of title 11 of the United States Code and 
                the rules and regulations 
                thereunder. <<NOTE: Consultation.>>  The Commission 
                shall consult with the Commodity Futures Trading 
                Commission to adopt rules to ensure that such 
                transactions and accounts are subject to comparable 
                requirements to the extent practicable for similar 
                products.''.

    (b) Commodity Exchange Act.--Section 4d of the Commodity Exchange 
Act (7 U.S.C. 6d) is amended by adding at the end the following:

[[Page 124 STAT. 1647]]

    ``(h) <<NOTE: Contracts.>>  Notwithstanding subsection (a)(2) or the 
rules and regulations thereunder, and pursuant to an exemption granted 
by the Commission under section 4(c) of this Act or pursuant to a rule 
or regulation, a futures commission merchant that is registered pursuant 
to section 4f(a)(1) of this Act and also registered as a broker or 
dealer pursuant to section 15(b)(1) of the Securities Exchange Act of 
1934 may, pursuant to a portfolio margining program approved by the 
Securities and Exchange Commission pursuant to section 19(b) of the 
Securities Exchange Act of 1934, hold in a portfolio margining account 
carried as a securities account subject to section 15(c)(3) of the 
Securities Exchange Act of 1934 and the rules and regulations 
thereunder, a contract for the purchase or sale of a commodity for 
future delivery or an option on such a contract, and any money, 
securities or other property received from a customer to margin, 
guarantee or secure such a contract, or accruing to a customer as the 
result of such a contract. <<NOTE: Consultation.>> The Commission shall 
consult with the Securities and Exchange Commission to adopt rules to 
ensure that such transactions and accounts are subject to comparable 
requirements to the extent practical for similar products.''.

    (c) Duty of Commodity Futures Trading Commission.--Section 20 of the 
Commodity Exchange Act (7 U.S.C. 24) is amended by adding at the end the 
following:
    ``(c) The Commission shall exercise its authority to ensure that 
securities held in a portfolio margining account carried as a futures 
account are customer property and the owners of those accounts are 
customers for the purposes of subchapter IV of chapter 7 of title 11 of 
the United States Code.''.
SEC. 714. <<NOTE: 15 USC 8303.>>  ABUSIVE SWAPS.

    The Commodity Futures Trading Commission or the Securities and 
Exchange Commission, or both, individually may, by rule or order--
            (1) collect information as may be necessary concerning the 
        markets for any types of--
                    (A) swap (as defined in section 1a of the Commodity 
                Exchange Act (7 U.S.C. 1a)); or
                    (B) security-based swap (as defined in section 1a of 
                the Commodity Exchange Act (7 U.S.C. 1a)); and
            (2) <<NOTE: Reports.>>  issue a report with respect to any 
        types of swaps or security-based swaps that the Commodity 
        Futures Trading Commission or the Securities and Exchange 
        Commission determines to be detrimental to--
                    (A) the stability of a financial market; or
                    (B) participants in a financial market.
SEC. 715. <<NOTE: 15 USC 8304.>>  AUTHORITY TO PROHIBIT 
                        PARTICIPATION IN SWAP ACTIVITIES.

    Except as provided in section 4 of the Commodity Exchange Act (7 
U.S.C. 6), if the Commodity Futures Trading Commission or the Securities 
and Exchange Commission determines that the regulation of swaps or 
security-based swaps markets in a foreign country undermines the 
stability of the United States financial system, either Commission, in 
consultation with the Secretary of the Treasury, may prohibit an entity 
domiciled in the foreign country from participating in the United States 
in any swap or security-based swap activities.

[[Page 124 STAT. 1648]]

SEC. 716. <<NOTE: 15 USC 8305.>>  PROHIBITION AGAINST FEDERAL 
                        GOVERNMENT BAILOUTS OF SWAPS ENTITIES.

    (a) Prohibition on Federal Assistance.--Notwithstanding any other 
provision of law (including regulations), no Federal assistance may be 
provided to any swaps entity with respect to any swap, security-based 
swap, or other activity of the swaps entity.
    (b) Definitions.--In this section:
            (1) Federal assistance.--The term ``Federal assistance'' 
        means the use of any advances from any Federal Reserve credit 
        facility or discount window that is not part of a program or 
        facility with broad-based eligibility under section 13(3)(A) of 
        the Federal Reserve Act, Federal Deposit Insurance Corporation 
        insurance or guarantees for the purpose of--
                    (A) making any loan to, or purchasing any stock, 
                equity interest, or debt obligation of, any swaps 
                entity;
                    (B) purchasing the assets of any swaps entity;
                    (C) guaranteeing any loan or debt issuance of any 
                swaps entity; or
                    (D) entering into any assistance arrangement 
                (including tax breaks), loss sharing, or profit sharing 
                with any swaps entity.
            (2) Swaps entity.--
                    (A) In general.--The term ``swaps entity'' means any 
                swap dealer, security-based swap dealer, major swap 
                participant, major security-based swap participant, that 
                is registered under--
                          (i) the Commodity Exchange Act (7 U.S.C. 1 et 
                      seq.); or
                          (ii) the Securities Exchange Act of 1934 (15 
                      U.S.C. 78a et seq.).
                    (B) Exclusion.--The term ``swaps entity'' does not 
                include any major swap participant or major security-
                based swap participant that is an insured depository 
                institution.

    (c) Affiliates of Insured Depository Institutions.--The prohibition 
on Federal assistance contained in subsection (a) does not apply to and 
shall not prevent an insured depository institution from having or 
establishing an affiliate which is a swaps entity, as long as such 
insured depository institution is part of a bank holding company, or 
savings and loan holding company, that is supervised by the Federal 
Reserve and such swaps entity affiliate complies with sections 23A and 
23B of the Federal Reserve Act and such other requirements as the 
Commodity Futures Trading Commission or the Securities Exchange 
Commission, as appropriate, and the Board of Governors of the Federal 
Reserve System, may determine to be necessary and appropriate.
    (d) Only Bona Fide Hedging and Traditional Bank Activities 
Permitted.--The prohibition <<NOTE: Applicability.>>  in subsection (a) 
shall apply to any insured depository institution unless the insured 
depository institution limits its swap or security-based swap activities 
to:
            (1) Hedging and other similar risk mitigating activities 
        directly related to the insured depository institution's 
        activities.
            (2) Acting as a swaps entity for swaps or security-based 
        swaps involving rates or reference assets that are permissible 
        for investment by a national bank under the paragraph designated 
        as ``Seventh.'' of section 5136 of the Revised Statutes of the 
        United States ( 12 U.S.C. 24), other than as described in 
        paragraph (3).

[[Page 124 STAT. 1649]]

            (3) Limitation on credit default swaps.--Acting as a swaps 
        entity for credit default swaps, including swaps or security-
        based swaps referencing the credit risk of asset-backed 
        securities as defined in section 3(a)(77) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)(77)) (as amended by this 
        Act) shall not be considered a bank permissible activity for 
        purposes of subsection (d)(2) unless such swaps or security-
        based swaps are cleared by a derivatives clearing organization 
        (as such term is defined in section la of the Commodity Exchange 
        Act (7 U.S.C. la)) or a clearing agency (as such term is defined 
        in section 3 of the Securities Exchange Act (15 U.S.C. 78c)) 
        that is registered, or exempt from registration, as a 
        derivatives clearing organization under the Commodity Exchange 
        Act or as a clearing agency under the Securities Exchange Act, 
        respectively.

    (e) <<NOTE: Applicability.>>  Existing Swaps and Security-based 
Swaps.--The prohibition in subsection (a) shall only apply to swaps or 
security-based swaps entered into by an insured depository institution 
after the end of the transition period described in subsection (f).

    (f) Transition Period.--To the extent an insured depository 
institution qualifies as a ``swaps entity'' and would be subject to the 
Federal assistance prohibition in subsection (a), the appropriate 
Federal banking agency, after consulting with and considering the views 
of the Commodity Futures Trading Commission or the Securities Exchange 
Commission, as appropriate, shall permit the insured depository 
institution up to 24 months to divest the swaps entity or cease the 
activities that require registration as a swaps entity. In establishing 
the appropriate transition period to effect such divestiture or 
cessation of activities, which may include making the swaps entity an 
affiliate of the insured depository institution, the appropriate Federal 
banking agency shall take into account and make written findings 
regarding the potential impact of such divestiture or cessation of 
activities on the insured depository institution's (1) mortgage lending, 
(2) small business lending, (3) job creation, and (4) capital formation 
versus the potential negative impact on insured depositors and the 
Deposit Insurance Fund of the Federal Deposit Insurance Corporation. The 
appropriate Federal banking agency may consider such other factors as 
may be appropriate. The appropriate Federal banking agency may place 
such conditions on the insured depository institution's divestiture or 
ceasing of activities of the swaps entity as it deems necessary and 
appropriate. The transition period under this subsection may be extended 
by the appropriate Federal banking agency, after consultation with the 
Commodity Futures Trading Commission and the Securities and Exchange 
Commission, for a period of up to 1 additional year.
    (g) Excluded Entities.--For purposes of this section, the term 
``swaps entity'' shall not include any insured depository institution 
under the Federal Deposit Insurance Act or a covered financial company 
under title II which is in a conservatorship, receivership, or a bridge 
bank operated by the Federal Deposit Insurance Corporation.
    (h) Effective Date.--The prohibition in subsection (a) shall be 
effective 2 years following the date on which this Act is effective.
    (i) Liquidation Required.--
            (1) In general.--

[[Page 124 STAT. 1650]]

                    (A) FDIC insured institutions.--All swaps entities 
                that are FDIC insured institutions that are put into 
                receivership or declared insolvent as a result of swap 
                or security-based swap activity of the swaps entities 
                shall be subject to the termination or transfer of that 
                swap or security-based swap activity in accordance with 
                applicable law prescribing the treatment of those 
                contracts. No taxpayer funds shall be used to prevent 
                the receivership of any swap entity resulting from swap 
                or security-based swap activity of the swaps entity.
                    (B) Institutions that pose a systemic risk and are 
                subject to heightened prudential supervision as 
                regulated under section 113.--All swaps entities that 
                are institutions that pose a systemic risk and are 
                subject to heightened prudential supervision as 
                regulated under section 113, that are put into 
                receivership or declared insolvent as a result of swap 
                or security-based swap activity of the swaps entities 
                shall be subject to the termination or transfer of that 
                swap or security-based swap activity in accordance with 
                applicable law prescribing the treatment of those 
                contracts. No taxpayer funds shall be used to prevent 
                the receivership of any swap entity resulting from swap 
                or security-based swap activity of the swaps entity.
                    (C) Non-FDIC insured, non-systemically significant 
                institutions not subject to heightened prudential 
                supervision as regulated under section 113.--No taxpayer 
                resources shall be used for the orderly liquidation of 
                any swaps entities that are non-FDIC insured, non-
                systemically significant institutions not subject to 
                heightened prudential supervision as regulated under 
                section 113.
            (2) Recovery of funds.--All funds expended on the 
        termination or transfer of the swap or security-based swap 
        activity of the swaps entity shall be recovered in accordance 
        with applicable law from the disposition of assets of such swap 
        entity or through assessments, including on the financial sector 
        as provided under applicable law.
            (3) No losses to taxpayers.--Taxpayers shall bear no losses 
        from the exercise of any authority under this title.

    (j) Prohibition on Unregulated Combination of Swaps Entities and 
Banking.--At no time following adoption of the rules in subsection (k) 
may a bank or bank holding company be permitted to be or become a swap 
entity unless it conducts its swap or security-based swap activity in 
compliance with such minimum standards set by its prudential regulator 
as are reasonably calculated to permit the swaps entity to conduct its 
swap or security-based swap activities in a safe and sound manner and 
mitigate systemic risk.
    (k) Rules.--In prescribing rules, the prudential regulator for a 
swaps entity shall consider the following factors:
            (1) The expertise and managerial strength of the swaps 
        entity, including systems for effective oversight.
            (2) The financial strength of the swaps entity.
            (3) Systems for identifying, measuring and controlling risks 
        arising from the swaps entity's operations.
            (4) Systems for identifying, measuring and controlling the 
        swaps entity's participation in existing markets.

[[Page 124 STAT. 1651]]

            (5) Systems for controlling the swaps entity's participation 
        or entry into in new markets and products.

    (l) Authority of the Financial Stability Oversight Council.--The 
Financial Stability Oversight Council may determine that, when other 
provisions established by this Act are insufficient to effectively 
mitigate systemic risk and protect taxpayers, that swaps entities may no 
longer access Federal assistance with respect to any swap, security-
based swap, or other activity of the swaps entity. Any such 
determination by the Financial Stability Oversight Council of a 
prohibition of federal assistance shall be made on an institution-by-
institution basis, and shall require the vote of not fewer than two-
thirds of the members of the Financial Stability Oversight Council, 
which must include the vote by the Chairman of the Council, the Chairman 
of the Board of Governors of the Federal Reserve System, and the 
Chairperson of the Federal Deposit Insurance Corporation. Notice and 
hearing requirements for such determinations shall be consistent with 
the standards provided in title I.
    (m) Ban on Proprietary Trading in Derivatives.--An insured 
depository institution shall comply with the prohibition on proprietary 
trading in derivatives as required by section 619 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act.
SEC. 717. NEW PRODUCT APPROVAL CFTC--SEC PROCESS.

    (a) Amendments to the Commodity Exchange Act.--Section 2(a)(1)(C) of 
the Commodity Exchange Act (7 U.S.C. 2(a)(1)(C)) is amended--
            (1) in clause (i) by striking ``This'' and inserting ``(I) 
        Except as provided in subclause (II), this''; and
            (2) by adding at the end of clause (i) the following:
                                    ``(II) This Act shall apply to and 
                                the Commission shall have jurisdiction 
                                with respect to accounts, agreements, 
                                and transactions involving, and may 
                                permit the listing for trading pursuant 
                                to section 5c(c) of, a put, call, or 
                                other option on 1 or more securities (as 
                                defined in section 2(a)(1) of the 
                                Securities Act of 1933 or section 
                                3(a)(10) of the Securities Exchange Act 
                                of 1934 on the date of enactment of the 
                                Futures Trading Act of 1982), including 
                                any group or index of such securities, 
                                or any interest therein or based on the 
                                value thereof, that is exempted by the 
                                Securities and Exchange Commission 
                                pursuant to section 36(a)(1) of the 
                                Securities Exchange Act of 1934 with the 
                                condition that the Commission exercise 
                                concurrent jurisdiction over such put, 
                                call, or other option; provided, 
                                however, that nothing in this paragraph 
                                shall be construed to affect the 
                                jurisdiction and authority of the 
                                Securities and Exchange Commission over 
                                such put, call, or other option.''.

    (b) Amendments to the Securities Exchange Act of 1934.--The 
Securities Exchange Act of 1934 is amended by adding the following 
section after section 3A (15 U.S.C. 78c-1):
``SEC. 3B. <<NOTE: 15 USC 78c-2.>>  SECURITIES-RELATED 
                      DERIVATIVES.

    ``(a) Any agreement, contract, or transaction (or class thereof) 
that is exempted by the Commodity Futures Trading Commission

[[Page 124 STAT. 1652]]

pursuant to section 4(c)(1) of the Commodity Exchange Act (7 U.S.C. 
6(c)(1)) with the condition that the Commission exercise concurrent 
jurisdiction over such agreement, contract, or transaction (or class 
thereof) shall be deemed a security for purposes of the securities laws.
    ``(b) With respect to any agreement, contract, or transaction (or 
class thereof) that is exempted by the Commodity Futures Trading 
Commission pursuant to section 4(c)(1) of the Commodity Exchange Act (7 
U.S.C. 6(c)(1)) with the condition that the Commission exercise 
concurrent jurisdiction over such agreement, contract, or transaction 
(or class thereof), references in the securities laws to the `purchase' 
or `sale' of a security shall be deemed to include the execution, 
termination (prior to its scheduled maturity date), assignment, 
exchange, or similar transfer or conveyance of, or extinguishing of 
rights or obligations under such agreement, contract, or transaction, as 
the context may require.''.
    (c) Amendment to Securities Exchange Act of 1934.--Section 19(b) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by 
adding at the end the following:
            ``(10) Notwithstanding paragraph (2), the time period within 
        which the Commission is required by order to approve a proposed 
        rule change or institute proceedings to determine whether the 
        proposed rule change should be disapproved is stayed pending a 
        determination by the Commission upon the request of the 
        Commodity Futures Trading Commission or its Chairman that the 
        Commission issue a determination as to whether a product that is 
        the subject of such proposed rule change is a security pursuant 
        to section 718 of the Wall Street Transparency and 
        Accountability Act of 2010.''.

    (d) Amendment to Commodity Exchange Act.--Section 5c(c)(1) of the 
Commodity Exchange Act (7 U.S.C. 7a-2(c)(1)) is amended--
            (1) by striking ``Subject to paragraph (2)'' and inserting 
        the following:
                    ``(A) Election.--Subject to paragraph (2)''; and
            (2) by adding at the end the following:
                    ``(B) Certification.--The certification of a product 
                pursuant to this paragraph shall be stayed pending a 
                determination by the Commission upon the request of the 
                Securities and Exchange Commission or its Chairman that 
                the Commission issue a determination as to whether the 
                product that is the subject of such certification is a 
                contract of sale of a commodity for future delivery, an 
                option on such a contract, or an option on a commodity 
                pursuant to section 718 of the Wall Street Transparency 
                and Accountability Act of 2010.''.
SEC. 718. <<NOTE: 15 USC 8306.>>  DETERMINING STATUS OF NOVEL 
                        DERIVATIVE PRODUCTS.

    (a) Process for Determining the Status of a Novel Derivative 
Product.--
            (1) Notice.--
                    (A) In general.--Any person filing a proposal to 
                list or trade a novel derivative product that may have 
                elements of both securities and contracts of sale of a 
                commodity for future delivery (or options on such 
                contracts or options on commodities) may concurrently 
                provide notice and furnish a copy of such filing with 
                the Securities and Exchange

[[Page 124 STAT. 1653]]

                Commission and the Commodity Futures Trading Commission. 
                Any such notice shall state that notice has been made 
                with both Commissions.
                    (B) <<NOTE: Deadline.>>  Notification.--If no 
                concurrent notice is made pursuant to subparagraph (A), 
                within 5 business days after determining that a proposal 
                that seeks to list or trade a novel derivative product 
                may have elements of both securities and contracts of 
                sale of a commodity for future delivery (or options on 
                such contracts or options on commodities), the 
                Securities and Exchange Commission or the Commodity 
                Futures Trading Commission, as applicable, shall notify 
                the other Commission and provide a copy of such filing 
                to the other Commission.
            (2) Request for determination.--
                    (A) <<NOTE: Deadline.>> In general.--No later than 
                21 days after receipt of a notice under paragraph (1), 
                or upon its own initiative if no such notice is 
                received, the Commodity Futures Trading Commission may 
                request that the Securities and Exchange Commission 
                issue a determination as to whether a product is a 
                security, as defined in section 3(a)(10) of the 
                Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).
                    (B) <<NOTE: Deadline.>> Request.--No later than 21 
                days after receipt of a notice under paragraph (1), or 
                upon its own initiative if no such notice is received, 
                the Securities and Exchange Commission may request that 
                the Commodity Futures Trading Commission issue a 
                determination as to whether a product is a contract of 
                sale of a commodity for future delivery, an option on 
                such a contract, or an option on a commodity subject to 
                the Commodity Futures Trading Commission's exclusive 
                jurisdiction under section 2(a)(1)(A) of the Commodity 
                Exchange Act (7 U.S.C. 2(a)(1)(A)).
                    (C) Requirement relating to request.--A request 
                under subparagraph (A) or (B) shall be made by 
                submitting such request, in writing, to the Securities 
                and Exchange Commission or the Commodity Futures Trading 
                Commission, as applicable.
                    (D) Effect.--Nothing in this paragraph shall be 
                construed to prevent--
                          (i) the Commodity Futures Trading Commission 
                      from requesting that the Securities and Exchange 
                      Commission grant an exemption pursuant to section 
                      36(a)(1) of the Securities Exchange Act of 1934 
                      (15 U.S.C. 78mm(a)(1)) with respect to a product 
                      that is the subject of a filing under paragraph 
                      (1); or
                          (ii) the Securities and Exchange Commission 
                      from requesting that the Commodity Futures Trading 
                      Commission grant an exemption pursuant to section 
                      4(c)(1) of the Commodity Exchange Act (7 U.S.C. 
                      6(c)(1)) with respect to a product that is the 
                      subject of a filing under paragraph (1),
                Provided, however, that nothing in this subparagraph 
                shall be construed to require the Commodity Futures 
                Trading Commission or the Securities and Exchange 
                Commission to issue an exemption requested pursuant to 
                this subparagraph; provided further, That an order 
                granting or denying an exemption described in this 
                subparagraph and issued

[[Page 124 STAT. 1654]]

                under paragraph (3)(B) shall not be subject to judicial 
                review pursuant to subsection (b).
                    (E) Withdrawal of request.--A request under 
                subparagraph (A) or (B) may be withdrawn by the 
                Commission making the request at any time prior to a 
                determination being made pursuant to paragraph (3) for 
                any reason by providing written notice to the head of 
                the other Commission.
            (3) <<NOTE: Deadline.>>  Determination.--Notwithstanding any 
        other provision of law, no later than 120 days after the date of 
        receipt of a request--
                    (A) under subparagraph (A) or (B) of paragraph (2), 
                unless such request has been withdrawn pursuant to 
                paragraph (2)(E), the Securities and Exchange Commission 
                or the Commodity Futures Trading Commission, as 
                applicable, shall, by order, issue the determination 
                requested in subparagraph (A) or (B) of paragraph (2), 
                as applicable, and the reasons therefor; or
                    (B) under paragraph (2)(D), unless such request has 
                been withdrawn, the Securities and Exchange Commission 
                or the Commodity Futures Trading Commission, as 
                applicable, shall grant an exemption or provide reasons 
                for not granting such exemption, provided that any 
                decision by the Securities and Exchange Commission not 
                to grant such exemption shall not be reviewable under 
                section 25 of the Securities Exchange Act of 1934 (15 
                U.S.C. 78y).

    (b) Judicial Resolution.--
            (1) In general.--The Commodity <<NOTE: Deadline.>>  Futures 
        Trading Commission or the Securities and Exchange Commission may 
        petition the United States Court of Appeals for the District of 
        Columbia Circuit for review of a final order of the other 
        Commission issued pursuant to subsection (a)(3)(A), with respect 
        to a novel derivative product that may have elements of both 
        securities and contracts of sale of a commodity for future 
        delivery (or options on such contracts or options on 
        commodities) that it believes affects its statutory jurisdiction 
        within 60 days after the date of entry of such order, a written 
        petition requesting a review of the order. Any such proceeding 
        shall be expedited by the Court of Appeals.
            (2) Transmittal of petition and record.--A 
        copy <<NOTE: Deadline.>>  of a petition described in paragraph 
        (1) shall be transmitted not later than 1 business day after 
        filing by the complaining Commission to the responding 
        Commission. On receipt of the petition, the responding 
        Commission shall file with the court a copy of the order under 
        review and any documents referred to therein, and any other 
        materials prescribed by the court.
            (3) Standard of review.--The court, in considering a 
        petition filed pursuant to paragraph (1), shall give no 
        deference to, or presumption in favor of, the views of either 
        Commission.
            (4) Judicial stay.--The filing of a petition by the 
        complaining Commission pursuant to paragraph (1) shall operate 
        as a stay of the order, until the date on which the 
        determination of the court is final (including any appeal of the 
        determination).
SEC. 719. <<NOTE: 15 USC 8307.>>  STUDIES.

    (a) Study on Effects of Position Limits on Trading on Exchanges in 
the United States.--

[[Page 124 STAT. 1655]]

            (1) Study.--The Commodity Futures Trading Commission, in 
        consultation with each entity that is a designated contract 
        market under the Commodity Exchange Act, shall conduct a study 
        of the effects (if any) of the position limits imposed pursuant 
        to the other provisions of this title on excessive speculation 
        and on the movement of transactions from exchanges in the United 
        States to trading venues outside the United States.
            (2) Report to the congress.--Within 12 months after the 
        imposition of position limits pursuant to the other provisions 
        of this title, the Commodity Futures Trading Commission, in 
        consultation with each entity that is a designated contract 
        market under the Commodity Exchange Act, shall submit to the 
        Congress a report on the matters described in paragraph (1).
            (3) Required hearing.-- <<NOTE: Deadline.>> Within 30 
        legislative days after the submission to the Congress of the 
        report described in paragraph (2), the Committee on Agriculture 
        of the House of Representatives shall hold a hearing examining 
        the findings of the report.
            (4) Biennial reporting.--In addition to the study required 
        in paragraph (1), the Chairman of the Commodity Futures Trading 
        Commission shall prepare and submit to the Congress biennial 
        reports on the growth or decline of the derivatives markets in 
        the United States and abroad, which shall include assessments of 
        the causes of any such growth or decline, the effectiveness of 
        regulatory regimes in managing systemic risk, a comparison of 
        the costs of compliance at the time of the report for market 
        participants subject to regulation by the United States with the 
        costs of compliance in December 2008 for the market 
        participants, and the quality of the available data. In 
        preparing the report, the Chairman shall solicit the views of, 
        consult with, and address the concerns raised by, market 
        participants, regulators, legislators, and other interested 
        parties.

    (b) Study on Feasibility of Requiring Use of Standardized 
Algorithmic Descriptions for Financial Derivatives.--
            (1) In general.--The Securities and Exchange Commission and 
        the Commodity Futures Trading Commission shall conduct a joint 
        study of the feasibility of requiring the derivatives industry 
        to adopt standardized computer-readable algorithmic descriptions 
        which may be used to describe complex and standardized financial 
        derivatives.
            (2) Goals.--The algorithmic descriptions defined in the 
        study shall be designed to facilitate computerized analysis of 
        individual derivative contracts and to calculate net exposures 
        to complex derivatives. The algorithmic descriptions shall be 
        optimized for simultaneous use by--
                    (A) commercial users and traders of derivatives;
                    (B) derivative clearing houses, exchanges and 
                electronic trading platforms;
                    (C) trade repositories and regulator investigations 
                of market activities; and
                    (D) systemic risk regulators.
        The study will also examine the extent to which the algorithmic 
        description, together with standardized and extensible legal

[[Page 124 STAT. 1656]]

        definitions, may serve as the binding legal definition of 
        derivative contracts. The study will examine the logistics of 
        possible implementations of standardized algorithmic 
        descriptions for derivatives contracts. The study shall be 
        limited to electronic formats for exchange of derivative 
        contract descriptions and will not contemplate disclosure of 
        proprietary valuation models.
            (3) International coordination.--In conducting the study, 
        the Securities and Exchange Commission and the Commodity Futures 
        Trading Commission shall coordinate the study with international 
        financial institutions and regulators as appropriate and 
        practical.
            (4) Report.--Within 8 months after the date of the enactment 
        of this Act, the Securities and Exchange Commission and the 
        Commodity Futures Trading Commission shall jointly submit to the 
        Committees on Agriculture and on Financial Services of the House 
        of Representatives and the Committees on Agriculture, Nutrition, 
        and Forestry and on Banking, Housing, and Urban Affairs of the 
        Senate a written report which contains the results of the study 
        required by paragraphs (1) through (3).

    (c) International Swap Regulation.--
            (1) In general.-- <<NOTE: Study.>> The Commodity Futures 
        Trading Commission and the Securities and Exchange Commission 
        shall jointly conduct a study--
                    (A) relating to--
                          (i) swap regulation in the United States, 
                      Asia, and Europe; and
                          (ii) clearing house and clearing agency 
                      regulation in the United States, Asia, and Europe; 
                      and
                    (B) that identifies areas of regulation that are 
                similar in the United States, Asia and Europe and other 
                areas of regulation that could be harmonized
            (2) Report.--Not later than 18 months after the date of 
        enactment of this Act, the Commodity Futures Trading Commission 
        and the Securities and Exchange Commission shall submit to the 
        Committee on Agriculture, Nutrition, and Forestry and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Agriculture and the Committee on Financial 
        Services of the House of Representatives a report that includes 
        a description of the results of the study under subsection (a), 
        including--
                    (A) identification of the major exchanges and their 
                regulator in each geographic area for the trading of 
                swaps and security-based swaps including a listing of 
                the major contracts and their trading volumes and 
                notional values as well as identification of the major 
                swap dealers participating in such markets;
                    (B) identification of the major clearing houses and 
                clearing agencies and their regulator in each geographic 
                area for the clearing of swaps and security-based swaps, 
                including a listing of the major contracts and the 
                clearing volumes and notional values as well as 
                identification of the major clearing members of such 
                clearing houses and clearing agencies in such markets;
                    (C) a description of the comparative methods of 
                clearing swaps in the United States, Asia, and Europe; 
                and

[[Page 124 STAT. 1657]]

                    (D) a description of the various systems used for 
                establishing margin on individual swaps, security-based 
                swaps, and swap portfolios.

    (d) Stable Value Contracts.--
            (1) Determination.--
                    (A) Status.--Not later <<NOTE: Deadline. Study.>>  
                than 15 months after the date of the enactment of this 
                Act, the Securities and Exchange Commission and the 
                Commodity Futures Trading Commission shall, jointly, 
                conduct a study to determine whether stable value 
                contracts fall within the definition of a swap. In 
                making the determination required under this 
                subparagraph, the Commissions jointly shall consult with 
                the Department of Labor, the Department of the Treasury, 
                and the State entities that regulate the issuers of 
                stable value contracts.
                    (B) Regulations.--If the Commissions determine that 
                stable value contracts fall within the definition of a 
                swap, the Commissions jointly shall determine if an 
                exemption for stable value contracts from the definition 
                of swap is appropriate and in the public interest. The 
                Commissions shall issue regulations implementing the 
                determinations required under this paragraph. Until the 
                effective date of such regulations, and notwithstanding 
                any other provision of this title, the requirements of 
                this title shall not apply to stable value contracts.
                    (C) Legal certainty.--Stable value contracts in 
                effect prior to the effective date of the regulations 
                described in subparagraph (B) shall not be considered 
                swaps.
            (2) Definition.--For purposes of this subsection, the term 
        ``stable value contract'' means any contract, agreement, or 
        transaction that provides a crediting interest rate and guaranty 
        or financial assurance of liquidity at contract or book value 
        prior to maturity offered by a bank, insurance company, or other 
        State or federally regulated financial institution for the 
        benefit of any individual or commingled fund available as an 
        investment in an employee benefit plan (as defined in section 
        3(3) of the Employee Retirement Income Security Act of 1974, 
        including plans described in section 3(32) of such Act) subject 
        to participant direction, an eligible deferred compensation plan 
        (as defined in section 457(b) of the Internal Revenue Code of 
        1986) that is maintained by an eligible employer described in 
        section 457(e)(1)(A) of such Code, an arrangement described in 
        section 403(b) of such Code, or a qualified tuition program (as 
        defined in section 529 of such Code).
SEC. 720. <<NOTE: 15 USC 8308.>>  MEMORANDUM.

    (a)(1) <<NOTE: Deadline.>>  The Commodity Futures Trading Commission 
and the Federal Energy Regulatory Commission shall, not later than 180 
days after the date of the enactment of this Act, negotiate a memorandum 
of understanding to establish procedures for--
            (A) applying their respective authorities in a manner so as 
        to ensure effective and efficient regulation in the public 
        interest;
            (B) resolving conflicts concerning overlapping jurisdiction 
        between the 2 agencies; and
            (C) avoiding, to the extent possible, conflicting or 
        duplicative regulation.

[[Page 124 STAT. 1658]]

    (2) Such memorandum and any subsequent amendments to the memorandum 
shall be promptly submitted to the appropriate committees of Congress.
    (b) <<NOTE: Deadline.>> The Commodity Futures Trading Commission and 
the Federal Energy Regulatory Commission shall, not later than 180 days 
after the date of the enactment of this section, negotiate a memorandum 
of understanding to share information that may be requested where either 
Commission is conducting an investigation into potential manipulation, 
fraud, or market power abuse in markets subject to such Commission's 
regulation or oversight. Shared information shall remain subject to the 
same restrictions on disclosure applicable to the Commission initially 
holding the information.

                   PART II--REGULATION OF SWAP MARKETS

SEC. 721. DEFINITIONS.

    (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C. 
1a) is amended--
            (1) by redesignating paragraphs (2), (3) and (4), (5) 
        through (17), (18) through (23), (24) through (28), (29), (30), 
        (31) through (33), and (34) as paragraphs (6), (8) and (9), (11) 
        through (23), (26) through (31), (34) through (38), (40), (41), 
        (44) through (46), and (51), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency'--
                    ``(A) has the meaning given the term in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813);
                    ``(B) means the Board in the case of a noninsured 
                State bank; and
                    ``(C) is the Farm Credit Administration for farm 
                credit system institutions.
            ``(3) Associated person of a security-based swap dealer or 
        major security-based swap participant.--The term `associated 
        person of a security-based swap dealer or major security-based 
        swap participant' has the meaning given the term in section 3(a) 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(4) Associated person of a swap dealer or major swap 
        participant.--
                    ``(A) In general.--The term `associated person of a 
                swap dealer or major swap participant' means a person 
                who is associated with a swap dealer or major swap 
                participant as a partner, officer, employee, or agent 
                (or any person occupying a similar status or performing 
                similar functions), in any capacity that involves--
                          ``(i) the solicitation or acceptance of swaps; 
                      or
                          ``(ii) the supervision of any person or 
                      persons so engaged.
                    ``(B) Exclusion.--Other than for purposes of section 
                4s(b)(6), the term `associated person of a swap dealer 
                or major swap participant' does not include any person 
                associated with a swap dealer or major swap participant 
                the functions of which are solely clerical or 
                ministerial.
            ``(5) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.'';

[[Page 124 STAT. 1659]]

            (3) by inserting after paragraph (6) (as redesignated by 
        paragraph (1)) the following:
            ``(7) Cleared swap.--The term `cleared swap' means any swap 
        that is, directly or indirectly, submitted to and cleared by a 
        derivatives clearing organization registered with the 
        Commission.'';
            (4) in paragraph (9) (as redesignated by paragraph (1)), by 
        striking ``except onions'' and all that follows through the 
        period at the end and inserting the following: ``except onions 
        (as provided by the first section of Public Law 85-839 (7 U.S.C. 
        13-1)) and motion picture box office receipts (or any index, 
        measure, value, or data related to such receipts), and all 
        services, rights, and interests (except motion picture box 
        office receipts, or any index, measure, value or data related to 
        such receipts) in which contracts for future delivery are 
        presently or in the future dealt in.'';
            (5) by inserting after paragraph (9) (as redesignated by 
        paragraph (1)) the following:
            ``(10) Commodity pool.--
                    ``(A) In general.--The term `commodity pool' means 
                any investment trust, syndicate, or similar form of 
                enterprise operated for the purpose of trading in 
                commodity interests, including any--
                          ``(i) commodity for future delivery, security 
                      futures product, or swap;
                          ``(ii) agreement, contract, or transaction 
                      described in section 2(c)(2)(C)(i) or section 
                      2(c)(2)(D)(i);
                          ``(iii) commodity option authorized under 
                      section 4c; or
                          ``(iv) leverage transaction authorized under 
                      section 19.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `commodity pool' any investment trust, syndicate, 
                or similar form of enterprise if the Commission 
                determines that the rule or regulation will effectuate 
                the purposes of this Act.'';
            (6) by striking paragraph (11) (as redesignated by paragraph 
        (1)) and inserting the following:
            ``(11) Commodity pool operator.--
                    ``(A) In general.--The term `commodity pool 
                operator' means any person--
                          ``(i) engaged in a business that is of the 
                      nature of a commodity pool, investment trust, 
                      syndicate, or similar form of enterprise, and who, 
                      in connection therewith, solicits, accepts, or 
                      receives from others, funds, securities, or 
                      property, either directly or through capital 
                      contributions, the sale of stock or other forms of 
                      securities, or otherwise, for the purpose of 
                      trading in commodity interests, including any--
                                    ``(I) commodity for future delivery, 
                                security futures product, or swap;
                                    ``(II) agreement, contract, or 
                                transaction described in section 
                                2(c)(2)(C)(i) or section 2(c)(2)(D)(i);
                                    ``(III) commodity option authorized 
                                under section 4c; or

[[Page 124 STAT. 1660]]

                                    ``(IV) leverage transaction 
                                authorized under section 19; or
                          ``(ii) who is registered with the Commission 
                      as a commodity pool operator.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `commodity pool operator' any person engaged in a 
                business that is of the nature of a commodity pool, 
                investment trust, syndicate, or similar form of 
                enterprise if the Commission determines that the rule or 
                regulation will effectuate the purposes of this Act.'';
            (7) in paragraph (12) (as redesignated by paragraph (1)), in 
        subparagraph (A)--
                    (A) in clause (i)--
                          (i) in subclause (I), by striking ``made or to 
                      be made on or subject to the rules of a contract 
                      market or derivatives transaction execution 
                      facility'' and inserting ``, security futures 
                      product, or swap'';
                          (ii) by redesignating subclauses (II) and 
                      (III) as subclauses (III) and (IV);
                          (iii) by inserting after subclause (I) the 
                      following:
                                    ``(II) any agreement, contract, or 
                                transaction described in section 
                                2(c)(2)(C)(i) or section 
                                2(c)(2)(D)(i)''; and
                          (iv) in subclause (IV) (as so redesignated), 
                      by striking ``or'';
                    (B) in clause (ii), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following:
                          ``(iii) is registered with the Commission as a 
                      commodity trading advisor; or
                          ``(iv) the Commission, by rule or regulation, 
                      may include if the Commission determines that the 
                      rule or regulation will effectuate the purposes of 
                      this Act.'';
            (8) in paragraph (17) (as redesignated by paragraph (1)), in 
        subparagraph (A), in the matter preceding clause (i), by 
        striking ``paragraph (12)(A)'' and inserting ``paragraph 
        (18)(A)'';
            (9) in paragraph (18) (as redesignated by paragraph (1))--
                    (A) in subparagraph (A)--
                          (i) in the matter following clause 
                      (vii)(III)--
                                    (I) by striking ``section 1a 
                                (11)(A)'' and inserting ``paragraph 
                                (17)(A)''; and
                                    (II) by striking ``$25,000,000'' and 
                                inserting ``$50,000,000''; and
                          (ii) in clause (xi), in the matter preceding 
                      subclause (I), by striking ``total assets in an 
                      amount'' and inserting ``amounts invested on a 
                      discretionary basis, the aggregate of which is'';
            (10) by striking paragraph (22) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(22) Floor broker.--
                    ``(A) In general.--The term `floor broker' means any 
                person--
                          ``(i) who, in or surrounding any pit, ring, 
                      post, or other place provided by a contract market 
                      for the meeting of persons similarly engaged, 
                      shall purchase or sell for any other person--

[[Page 124 STAT. 1661]]

                                    ``(I) any commodity for future 
                                delivery, security futures product, or 
                                swap; or
                                    ``(II) any commodity option 
                                authorized under section 4c; or
                          ``(ii) who is registered with the Commission 
                      as a floor broker.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `floor broker' any person in or surrounding any 
                pit, ring, post, or other place provided by a contract 
                market for the meeting of persons similarly engaged who 
                trades for any other person if the Commission determines 
                that the rule or regulation will effectuate the purposes 
                of this Act.'';
            (11) by striking paragraph (23) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(23) Floor trader.--
                    ``(A) In general.--The term `floor trader' means any 
                person--
                          ``(i) who, in or surrounding any pit, ring, 
                      post, or other place provided by a contract market 
                      for the meeting of persons similarly engaged, 
                      purchases, or sells solely for such person's own 
                      account--
                                    ``(I) any commodity for future 
                                delivery, security futures product, or 
                                swap; or
                                    ``(II) any commodity option 
                                authorized under section 4c; or
                          ``(ii) who is registered with the Commission 
                      as a floor trader.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `floor trader' any person in or surrounding any 
                pit, ring, post, or other place provided by a contract 
                market for the meeting of persons similarly engaged who 
                trades solely for such person's own account if the 
                Commission determines that the rule or regulation will 
                effectuate the purposes of this Act.'';
            (12) by inserting after paragraph (23) (as redesignated by 
        paragraph (1)) the following:
            ``(24) Foreign exchange forward.--The term `foreign exchange 
        forward' means a transaction that solely involves the exchange 
        of 2 different currencies on a specific future date at a fixed 
        rate agreed upon on the inception of the contract covering the 
        exchange.
            ``(25) Foreign exchange swap.--The term `foreign exchange 
        swap' means a transaction that solely involves--
                    ``(A) an exchange of 2 different currencies on a 
                specific date at a fixed rate that is agreed upon on the 
                inception of the contract covering the exchange; and
                    ``(B) a reverse exchange of the 2 currencies 
                described in subparagraph (A) at a later date and at a 
                fixed rate that is agreed upon on the inception of the 
                contract covering the exchange.'';
            (13) by striking paragraph (28) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(28) Futures commission merchant.--

[[Page 124 STAT. 1662]]

                    ``(A) In general.--The term `futures commission 
                merchant' means an individual, association, partnership, 
                corporation, or trust--
                          ``(i) that--
                                    ``(I) is--
                                            ``(aa) engaged in soliciting 
                                        or in accepting orders for--
                                                ``(AA) the purchase or 
                                            sale of a commodity for 
                                            future delivery;
                                                ``(BB) a security 
                                            futures product;
                                                ``(CC) a swap;
                                                ``(DD) any agreement, 
                                            contract, or transaction 
                                            described in section 
                                            2(c)(2)(C)(i) or section 
                                            2(c)(2)(D)(i);
                                                ``(EE) any commodity 
                                            option authorized under 
                                            section 4c; or
                                                ``(FF) any leverage 
                                            transaction authorized under 
                                            section 19; or
                                            ``(bb) acting as a 
                                        counterparty in any agreement, 
                                        contract, or transaction 
                                        described in section 
                                        2(c)(2)(C)(i) or section 
                                        2(c)(2)(D)(i); and
                                    ``(II) in or in connection with the 
                                activities described in items (aa) or 
                                (bb) of subclause (I), accepts any 
                                money, securities, or property (or 
                                extends credit in lieu thereof) to 
                                margin, guarantee, or secure any trades 
                                or contracts that result or may result 
                                therefrom; or
                          ``(ii) that is registered with the Commission 
                      as a futures commission merchant.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `futures commission merchant' any person who 
                engages in soliciting or accepting orders for, or acting 
                as a counterparty in, any agreement, contract, or 
                transaction subject to this Act, and who accepts any 
                money, securities, or property (or extends credit in 
                lieu thereof) to margin, guarantee, or secure any trades 
                or contracts that result or may result therefrom, if the 
                Commission determines that the rule or regulation will 
                effectuate the purposes of this Act.'';
            (14) in paragraph (30) (as redesignated by paragraph (1)), 
        in subparagraph (B), by striking ``state'' and inserting 
        ``State'';
            (15) by striking paragraph (31) (as redesignated by 
        paragraph (1)) and inserting the following:
            ``(31) Introducing broker.--
                    ``(A) In general.--The term `introducing broker' 
                means any person (except an individual who elects to be 
                and is registered as an associated person of a futures 
                commission merchant)--
                          ``(i) who--
                                    ``(I) is engaged in soliciting or in 
                                accepting orders for--
                                            ``(aa) the purchase or sale 
                                        of any commodity for future 
                                        delivery, security futures 
                                        product, or swap;

[[Page 124 STAT. 1663]]

                                            ``(bb) any agreement, 
                                        contract, or transaction 
                                        described in section 
                                        2(c)(2)(C)(i) or section 
                                        2(c)(2)(D)(i);
                                            ``(cc) any commodity option 
                                        authorized under section 4c; or
                                            ``(dd) any leverage 
                                        transaction authorized under 
                                        section 19; and
                                    ``(II) does not accept any money, 
                                securities, or property (or extend 
                                credit in lieu thereof) to margin, 
                                guarantee, or secure any trades or 
                                contracts that result or may result 
                                therefrom; or
                          ``(ii) who is registered with the Commission 
                      as an introducing broker.
                    ``(B) Further definition.--The Commission, by rule 
                or regulation, may include within, or exclude from, the 
                term `introducing broker' any person who engages in 
                soliciting or accepting orders for any agreement, 
                contract, or transaction subject to this Act, and who 
                does not accept any money, securities, or property (or 
                extend credit in lieu thereof) to margin, guarantee, or 
                secure any trades or contracts that result or may result 
                therefrom, if the Commission determines that the rule or 
                regulation will effectuate the purposes of this Act.'';
            (16) by inserting after paragraph (31) (as redesignated by 
        paragraph (1)) the following:
            ``(32) Major security-based swap participant.--The term 
        `major security-based swap participant' has the meaning given 
        the term in section 3(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)).
            ``(33) Major swap participant.--
                    ``(A) In general.--The term `major swap participant' 
                means any person who is not a swap dealer, and--
                          ``(i) maintains a substantial position in 
                      swaps for any of the major swap categories as 
                      determined by the Commission, excluding--
                                    ``(I) positions held for hedging or 
                                mitigating commercial risk; and
                                    ``(II) positions maintained by any 
                                employee benefit plan (or any contract 
                                held by such a plan) as defined in 
                                paragraphs (3) and (32) of section 3 of 
                                the Employee Retirement Income Security 
                                Act of 1974 (29 U.S.C. 1002) for the 
                                primary purpose of hedging or mitigating 
                                any risk directly associated with the 
                                operation of the plan;
                          ``(ii) whose outstanding swaps create 
                      substantial counterparty exposure that could have 
                      serious adverse effects on the financial stability 
                      of the United States banking system or financial 
                      markets; or
                          ``(iii)(I) is a financial entity that is 
                      highly leveraged relative to the amount of capital 
                      it holds and that is not subject to capital 
                      requirements established by an appropriate Federal 
                      banking agency; and
                          ``(II) maintains a substantial position in 
                      outstanding swaps in any major swap category as 
                      determined by the Commission.
                    ``(B) <<NOTE: Regulations.>>  Definition of 
                substantial position.--For purposes of subparagraph (A), 
                the Commission shall define

[[Page 124 STAT. 1664]]

                by rule or regulation the term `substantial position' at 
                the threshold that the Commission determines to be 
                prudent for the effective monitoring, management, and 
                oversight of entities that are systemically important or 
                can significantly impact the financial system of the 
                United States. In setting the definition under this 
                subparagraph, the Commission shall consider the person's 
                relative position in uncleared as opposed to cleared 
                swaps and may take into consideration the value and 
                quality of collateral held against counterparty 
                exposures.
                    ``(C) Scope of designation.--For purposes of 
                subparagraph (A), a person may be designated as a major 
                swap participant for 1 or more categories of swaps 
                without being classified as a major swap participant for 
                all classes of swaps.
                    ``(D) Exclusions.--The definition under this 
                paragraph shall not include an entity whose primary 
                business is providing financing, and uses derivatives 
                for the purpose of hedging underlying commercial risks 
                related to interest rate and foreign currency exposures, 
                90 percent or more of which arise from financing that 
                facilitates the purchase or lease of products, 90 
                percent or more of which are manufactured by the parent 
                company or another subsidiary of the parent company.'';
            (17) by inserting after paragraph (38) (as redesignated by 
        paragraph (1)) the following:
            ``(39) Prudential regulator.--The term `prudential 
        regulator' means--
                    ``(A) the Board in the case of a swap dealer, major 
                swap participant, security-based swap dealer, or major 
                security-based swap participant that is--
                          ``(i) a State-chartered bank that is a member 
                      of the Federal Reserve System;
                          ``(ii) a State-chartered branch or agency of a 
                      foreign bank;
                          ``(iii) any foreign bank which does not 
                      operate an insured branch;
                          ``(iv) any organization operating under 
                      section 25A of the Federal Reserve Act or having 
                      an agreement with the Board under section 225 of 
                      the Federal Reserve Act;
                          ``(v) any bank holding company (as defined in 
                      section 2 of the Bank Holding Company Act of 1965 
                      (12 U.S.C. 1841)), any foreign bank (as defined in 
                      section 1(b)(7) of the International Banking Act 
                      of 1978 (12 U.S.C. 3101(b)(7)) that is treated as 
                      a bank holding company under section 8(a) of the 
                      International Banking Act of 1978 (12 U.S.C. 
                      3106(a)), and any subsidiary of such a company or 
                      foreign bank (other than a subsidiary that is 
                      described in subparagraph (A) or (B) or that is 
                      required to be registered with the Commission as a 
                      swap dealer or major swap participant under this 
                      Act or with the Securities and Exchange Commission 
                      as a security-based swap dealer or major security-
                      based swap participant);

[[Page 124 STAT. 1665]]

                          ``(vi) after the transfer date (as defined in 
                      section 311 of the Dodd-Frank Wall Street Reform 
                      and Consumer Protection Act), any savings and loan 
                      holding company (as defined in section 10 of the 
                      Home Owners' Loan Act (12 U.S.C. 1467a)) and any 
                      subsidiary of such company (other than a 
                      subsidiary that is described in subparagraph (A) 
                      or (B) or that is required to be registered as a 
                      swap dealer or major swap participant with the 
                      Commission under this Act or with the Securities 
                      and Exchange Commission as a security-based swap 
                      dealer or major security-based swap participant); 
                      or
                          ``(vii) any organization operating under 
                      section 25A of the Federal Reserve Act (12U.S.C. 
                      611 et seq.) or having an agreement with the Board 
                      under section 25 of the Federal Reserve Act (12 
                      U.S.C. 601 et seq.);
                    ``(B) the Office of the Comptroller of the Currency 
                in the case of a swap dealer, major swap participant, 
                security-based swap dealer, or major security-based swap 
                participant that is--
                          ``(i) a national bank;
                          ``(ii) a federally chartered branch or agency 
                      of a foreign bank; or
                          ``(iii) any Federal savings association;
                    ``(C) the Federal Deposit Insurance Corporation in 
                the case of a swap dealer, major swap participant, 
                security-based swap dealer, or major security-based swap 
                participant that is--
                          ``(i) a State-chartered bank that is not a 
                      member of the Federal Reserve System; or
                          ``(ii) any State savings association;
                    ``(D) the Farm Credit Administration, in the case of 
                a swap dealer, major swap participant, security-based 
                swap dealer, or major security-based swap participant 
                that is an institution chartered under the Farm Credit 
                Act of 1971 (12 U.S.C. 2001 et seq.); and
                    ``(E) the Federal Housing Finance Agency in the case 
                of a swap dealer, major swap participant, security-based 
                swap dealer, or major security-based swap participant 
                that is a regulated entity (as such term is defined in 
                section 1303 of the Federal Housing Enterprises 
                Financial Safety and Soundness Act of 1992).'';
            (18) in paragraph (40) (as redesignated by paragraph (1))--
                    (A) by striking subparagraph (B);
                    (B) by redesignating subparagraphs (C), (D), and (E) 
                as subparagraphs (B), (C), and (F), respectively;
                    (C) in subparagraph (C) (as so redesignated), by 
                striking ``and''; and
                    (D) by inserting after subparagraph (C) (as so 
                redesignated) the following:
                    ``(D) a swap execution facility registered under 
                section 5h;
                    ``(E) a swap data repository registered under 
                section 21; and'';
            (19) by inserting after paragraph (41) (as redesignated by 
        paragraph (1)) the following:

[[Page 124 STAT. 1666]]

            ``(42) Security-based swap.--The term `security-based swap' 
        has the meaning given the term in section 3(a) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)).
            ``(43) Security-based swap dealer.--The term `security-based 
        swap dealer' has the meaning given the term in section 3(a) of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).'';
            (20) in paragraph (46) (as redesignated by paragraph (1)), 
        by striking ``subject to section 2(h)(7)'' and inserting 
        ``subject to section 2(h)(5)'';
            (21) by inserting after paragraph (46) (as redesignated by 
        paragraph (1)) the following:
            ``(47) Swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `swap' means any agreement, 
                contract, or transaction--
                          ``(i) that is a put, call, cap, floor, collar, 
                      or similar option of any kind that is for the 
                      purchase or sale, or based on the value, of 1 or 
                      more interest or other rates, currencies, 
                      commodities, securities, instruments of 
                      indebtedness, indices, quantitative measures, or 
                      other financial or economic interests or property 
                      of any kind;
                          ``(ii) that provides for any purchase, sale, 
                      payment, or delivery (other than a dividend on an 
                      equity security) that is dependent on the 
                      occurrence, nonoccurrence, or the extent of the 
                      occurrence of an event or contingency associated 
                      with a potential financial, economic, or 
                      commercial consequence;
                          ``(iii) that provides on an executory basis 
                      for the exchange, on a fixed or contingent basis, 
                      of 1 or more payments based on the value or level 
                      of 1 or more interest or other rates, currencies, 
                      commodities, securities, instruments of 
                      indebtedness, indices, quantitative measures, or 
                      other financial or economic interests or property 
                      of any kind, or any interest therein or based on 
                      the value thereof, and that transfers, as between 
                      the parties to the transaction, in whole or in 
                      part, the financial risk associated with a future 
                      change in any such value or level without also 
                      conveying a current or future direct or indirect 
                      ownership interest in an asset (including any 
                      enterprise or investment pool) or liability that 
                      incorporates the financial risk so transferred, 
                      including any agreement, contract, or transaction 
                      commonly known as--
                                    ``(I) an interest rate swap;
                                    ``(II) a rate floor;
                                    ``(III) a rate cap;
                                    ``(IV) a rate collar;
                                    ``(V) a cross-currency rate swap;
                                    ``(VI) a basis swap;
                                    ``(VII) a currency swap;
                                    ``(VIII) a foreign exchange swap;
                                    ``(IX) a total return swap;
                                    ``(X) an equity index swap;
                                    ``(XI) an equity swap;
                                    ``(XII) a debt index swap;
                                    ``(XIII) a debt swap;

[[Page 124 STAT. 1667]]

                                    ``(XIV) a credit spread;
                                    ``(XV) a credit default swap;
                                    ``(XVI) a credit swap;
                                    ``(XVII) a weather swap;
                                    ``(XVIII) an energy swap;
                                    ``(XIX) a metal swap;
                                    ``(XX) an agricultural swap;
                                    ``(XXI) an emissions swap; and
                                    ``(XXII) a commodity swap;
                          ``(iv) that is an agreement, contract, or 
                      transaction that is, or in the future becomes, 
                      commonly known to the trade as a swap;
                          ``(v) including any security-based swap 
                      agreement which meets the definition of `swap 
                      agreement' as defined in section 206A of the 
                      Gramm-Leach-Bliley Act (15 U.S.C. 78c note) of 
                      which a material term is based on the price, 
                      yield, value, or volatility of any security or any 
                      group or index of securities, or any interest 
                      therein; or
                          ``(vi) that is any combination or permutation 
                      of, or option on, any agreement, contract, or 
                      transaction described in any of clauses (i) 
                      through (v).
                    ``(B) Exclusions.--The term `swap' does not 
                include--
                          ``(i) any contract of sale of a commodity for 
                      future delivery (or option on such a contract), 
                      leverage contract authorized under section 19, 
                      security futures product, or agreement, contract, 
                      or transaction described in section 2(c)(2)(C)(i) 
                      or section 2(c)(2)(D)(i);
                          ``(ii) any sale of a nonfinancial commodity or 
                      security for deferred shipment or delivery, so 
                      long as the transaction is intended to be 
                      physically settled;
                          ``(iii) any put, call, straddle, option, or 
                      privilege on any security, certificate of deposit, 
                      or group or index of securities, including any 
                      interest therein or based on the value thereof, 
                      that is subject to--
                                    ``(I) the Securities Act of 1933 (15 
                                U.S.C. 77a et seq.); and
                                    ``(II) the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78a et seq.);
                          ``(iv) any put, call, straddle, option, or 
                      privilege relating to a foreign currency entered 
                      into on a national securities exchange registered 
                      pursuant to section 6(a) of the Securities 
                      Exchange Act of 1934 (15 U.S.C. 78f(a));
                          ``(v) any agreement, contract, or transaction 
                      providing for the purchase or sale of 1 or more 
                      securities on a fixed basis that is subject to--
                                    ``(I) the Securities Act of 1933 (15 
                                U.S.C. 77a et seq.); and
                                    ``(II) the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78a et seq.);
                          ``(vi) any agreement, contract, or transaction 
                      providing for the purchase or sale of 1 or more 
                      securities on a contingent basis that is subject 
                      to the Securities Act of 1933 (15 U.S.C. 77a et 
                      seq.) and the Securities Exchange Act of 1934 (15 
                      U.S.C. 78a et seq.), unless the agreement, 
                      contract, or transaction predicates the

[[Page 124 STAT. 1668]]

                      purchase or sale on the occurrence of a bona fide 
                      contingency that might reasonably be expected to 
                      affect or be affected by the creditworthiness of a 
                      party other than a party to the agreement, 
                      contract, or transaction;
                          ``(vii) any note, bond, or evidence of 
                      indebtedness that is a security, as defined in 
                      section 2(a)(1) of the Securities Act of 1933 (15 
                      U.S.C. 77b(a)(1));
                          ``(viii) any agreement, contract, or 
                      transaction that is--
                                    ``(I) based on a security; and
                                    ``(II) entered into directly or 
                                through an underwriter (as defined in 
                                section 2(a)(11) of the Securities Act 
                                of 1933 (15 U.S.C. 77b(a)(11)) by the 
                                issuer of such security for the purposes 
                                of raising capital, unless the 
                                agreement, contract, or transaction is 
                                entered into to manage a risk associated 
                                with capital raising;
                          ``(ix) any agreement, contract, or transaction 
                      a counterparty of which is a Federal Reserve bank, 
                      the Federal Government, or a Federal agency that 
                      is expressly backed by the full faith and credit 
                      of the United States; and
                          ``(x) any security-based swap, other than a 
                      security-based swap as described in subparagraph 
                      (D).
                    ``(C) Rule of construction regarding master 
                agreements.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), the term `swap' includes a master 
                      agreement that provides for an agreement, 
                      contract, or transaction that is a swap under 
                      subparagraph (A), together with each supplement to 
                      any master agreement, without regard to whether 
                      the master agreement contains an agreement, 
                      contract, or transaction that is not a swap 
                      pursuant to subparagraph (A).
                          ``(ii) Exception.--For purposes of clause (i), 
                      the master agreement shall be considered to be a 
                      swap only with respect to each agreement, 
                      contract, or transaction covered by the master 
                      agreement that is a swap pursuant to subparagraph 
                      (A).
                    ``(D) Mixed swap.--The term `security-based swap' 
                includes any agreement, contract, or transaction that is 
                as described in section 3(a)(68)(A) of the Securities 
                Exchange Act of 1934 (15 U.S.C. 78c(a)(68)(A)) and also 
                is based on the value of 1 or more interest or other 
                rates, currencies, commodities, instruments of 
                indebtedness, indices, quantitative measures, other 
                financial or economic interest or property of any kind 
                (other than a single security or a narrow-based security 
                index), or the occurrence, non-occurrence, or the extent 
                of the occurrence of an event or contingency associated 
                with a potential financial, economic, or commercial 
                consequence (other than an event described in 
                subparagraph (A)(iii)).
                    ``(E) Treatment of foreign exchange swaps and 
                forwards.--
                          ``(i) In <<NOTE: Determination.>>  general.--
                      Foreign exchange swaps and foreign exchange 
                      forwards shall be considered swaps under this 
                      paragraph unless the Secretary makes a

[[Page 124 STAT. 1669]]

                      written determination under section 1b that either 
                      foreign exchange swaps or foreign exchange 
                      forwards or both--
                                    ``(I) should be not be regulated as 
                                swaps under this Act; and
                                    ``(II) are not structured to evade 
                                the Dodd-Frank Wall Street Reform and 
                                Consumer Protection Act in violation of 
                                any rule promulgated by the Commission 
                                pursuant to section 721(c) of that Act.
                          ``(ii) Congressional notice; effectiveness.--
                      The Secretary shall submit any written 
                      determination under clause (i) to the appropriate 
                      committees of Congress, including the Committee on 
                      Agriculture, Nutrition, and Forestry of the Senate 
                      and the Committee on Agriculture of the House of 
                      Representatives. Any such written determination by 
                      the Secretary shall not be effective until it is 
                      submitted to the appropriate committees of 
                      Congress.
                          ``(iii) Reporting.--Notwithstanding a written 
                      determination by the Secretary under clause (i), 
                      all foreign exchange swaps and foreign exchange 
                      forwards shall be reported to either a swap data 
                      repository, or, if there is no swap data 
                      repository that would accept such swaps or 
                      forwards, to the Commission pursuant to section 4r 
                      within such time period as the Commission may by 
                      rule or regulation prescribe.
                          ``(iv) Business standards.--Notwithstanding a 
                      written determination by the Secretary pursuant to 
                      clause (i), any party to a foreign exchange swap 
                      or forward that is a swap dealer or major swap 
                      participant shall conform to the business conduct 
                      standards contained in section 4s(h).
                          ``(v) Secretary.--For purposes of this 
                      subparagraph, the term `Secretary' means the 
                      Secretary of the Treasury.
                    ``(F) Exception for certain foreign exchange swaps 
                and forwards.--
                          ``(i) Registered entities.--Any foreign 
                      exchange swap and any foreign exchange forward 
                      that is listed and traded on or subject to the 
                      rules of a designated contract market or a swap 
                      execution facility, or that is cleared by a 
                      derivatives clearing organization, shall not be 
                      exempt from any provision of this Act or 
                      amendments made by the Wall Street Transparency 
                      and Accountability Act of 2010 prohibiting fraud 
                      or manipulation.
                          ``(ii) Retail transactions.--Nothing in 
                      subparagraph (E) shall affect, or be construed to 
                      affect, the applicability of this Act or the 
                      jurisdiction of the Commission with respect to 
                      agreements, contracts, or transactions in foreign 
                      currency pursuant to section 2(c)(2).
            ``(48) Swap data repository.--The term `swap data 
        repository' means any person that collects and maintains 
        information or records with respect to transactions or positions 
        in, or the terms and conditions of, swaps entered into by third 
        parties

[[Page 124 STAT. 1670]]

        for the purpose of providing a centralized recordkeeping 
        facility for swaps.
            ``(49) Swap dealer.--
                    ``(A) In general.--The term `swap dealer' means any 
                person who--
                          ``(i) holds itself out as a dealer in swaps;
                          ``(ii) makes a market in swaps;
                          ``(iii) regularly enters into swaps with 
                      counterparties as an ordinary course of business 
                      for its own account; or
                          ``(iv) engages in any activity causing the 
                      person to be commonly known in the trade as a 
                      dealer or market maker in swaps,
                provided however, in no event shall an insured 
                depository institution be considered to be a swap dealer 
                to the extent it offers to enter into a swap with a 
                customer in connection with originating a loan with that 
                customer.
                    ``(B) Inclusion.--A person may be designated as a 
                swap dealer for a single type or single class or 
                category of swap or activities and considered not to be 
                a swap dealer for other types, classes, or categories of 
                swaps or activities.
                    ``(C) Exception.--The term `swap dealer' does not 
                include a person that enters into swaps for such 
                person's own account, either individually or in a 
                fiduciary capacity, but not as a part of a regular 
                business.
                    ``(D) De minimis exception.--The Commission shall 
                exempt from designation as a swap dealer an entity that 
                engages in a de minimis quantity of swap dealing in 
                connection with transactions with or on behalf of its 
                customers. The Commission shall promulgate regulations 
                to establish factors with respect to the making of this 
                determination to exempt.
            ``(50) Swap execution facility.--The term `swap execution 
        facility' means a trading system or platform in which multiple 
        participants have the ability to execute or trade swaps by 
        accepting bids and offers made by multiple participants in the 
        facility or system, through any means of interstate commerce, 
        including any trading facility, that--
                    ``(A) facilitates the execution of swaps between 
                persons; and
                    ``(B) is not a designated contract market.''.
            (22) in paragraph (51) (as redesignated by paragraph (1)), 
        in subparagraph (A)(i), by striking ``partipants'' and inserting 
        ``participants''.

    (b) Authority <<NOTE: 15 USC 8321.>>  To Define Terms.--The 
Commodity Futures Trading Commission may adopt a rule to define--
            (1) the term ``commercial risk''; and
            (2) any other term included in an amendment to the Commodity 
        Exchange Act (7 U.S.C. 1 et seq.) made by this subtitle.

    (c) Modification <<NOTE: 15 USC 8321.>>  of Definitions.--To include 
transactions and entities that have been structured to evade this 
subtitle (or an amendment made by this subtitle), the Commodity Futures 
Trading Commission shall adopt a rule to further define the terms 
``swap'', ``swap dealer'', ``major swap participant'', and ``eligible 
contract participant''.

[[Page 124 STAT. 1671]]

    (d) Exemptions.--Section 4(c)(1) of the Commodity Exchange Act (7 
U.S.C. 6(c)(1)) is amended by striking ``except that'' and all that 
follows through the period at the end and inserting the following: 
``except that--
            ``(A) unless the Commission is expressly authorized by any 
        provision described in this subparagraph to grant exemptions, 
        with respect to amendments made by subtitle A of the Wall Street 
        Transparency and Accountability Act of 2010--
                    ``(i) with respect to--
                          ``(I) paragraphs (2), (3), (4), (5), and (7), 
                      paragraph (18)(A)(vii)(III), paragraphs (23), 
                      (24), (31), (32), (38), (39), (41), (42), (46), 
                      (47), (48), and (49) of section 1a, and sections 
                      2(a)(13), 2(c)(1)(D), 4a(a), 4a(b), 4d(c), 4d(d), 
                      4r, 4s, 5b(a), 5b(b), 5(d), 5(g), 5(h), 5b(c), 
                      5b(i), 8e, and 21; and
                          ``(II) section 206(e) of the Gramm-Leach-
                      Bliley Act (Public Law 106-102; 15 U.S.C. 78c 
                      note); and
                    ``(ii) in sections 721(c) and 742 of the Dodd-Frank 
                Wall Street Reform and Consumer Protection Act; and
            ``(B) the Commission and the Securities and Exchange 
        Commission may by rule, regulation, or order jointly exclude any 
        agreement, contract, or transaction from section 2(a)(1)(D)) if 
        the Commissions determine that the exemption would be consistent 
        with the public interest.''.

    (e) Conforming Amendments.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
        (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                    (A) in item (cc)--
                          (i) in subitem (AA), by striking ``section 
                      1a(20)'' and inserting ``section 1a''; and
                          (ii) in subitem (BB), by striking ``section 
                      1a(20)'' and inserting ``section 1a''; and
                    (B) in item (dd), by striking ``section 
                1a(12)(A)(ii)'' and inserting ``section 1a(18)(A)(ii)''.
            (2) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 
        6m(3)) is amended by striking ``section 1a(6)'' and inserting 
        ``section 1a''.
            (3) Section 4q(a)(1) of the Commodity Exchange Act (7 U.S.C. 
        6o-1(a)(1)) is <<NOTE: 7 USC 6q.>>  amended by striking 
        ``section 1a(4)'' and inserting ``section 1a(9)''.
            (4) Section 5(e)(1) of the Commodity Exchange Act (7 U.S.C. 
        7(e)(1)) is amended by striking ``section 1a(4)'' and inserting 
        ``section 1a(9)''.
            (5) Section 5a(b)(2)(F) of the Commodity Exchange Act (7 
        U.S.C. 7a(b)(2)(F)) is amended by striking ``section 1a(4)'' and 
        inserting ``section 1a(9)''.
            (6) Section 5b(a) of the Commodity Exchange Act (7 U.S.C. 
        7a-1(a)) is amended, in the matter preceding paragraph (1), by 
        striking ``section 1a(9)'' and inserting ``section 1a''.
            (7) Section 5c(c)(2)(B) of the Commodity Exchange Act (7 
        U.S.C. 7a-2(c)(2)(B)) is amended by striking ``section 1a(4)'' 
        and inserting ``section 1a(9)''.
            (8) Section 6(g)(5)(B)(i) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
                    (A) in subclause (I), by striking ``section 
                1a(12)(B)(ii)'' and inserting ``section 1a(18)(B)(ii)''; 
                and

[[Page 124 STAT. 1672]]

                    (B) in subclause (II), by striking ``section 
                1a(12)'' and inserting ``section 1a(18)''.
            (9) Section 402 of the Legal Certainty for Bank Products Act 
        of 2000 <<NOTE: 7 USC 27.>>  (7 U.S.C. 27 et seq.) is amended--
                    (A) in subsection (a)(7), by striking ``section 
                1a(20)'' and inserting ``section 1a'';
                    (B) in subsection (b)(2), by striking ``section 
                1a(12)'' and inserting ``section 1a''; and
                    (C) in subsection (c), by striking ``section 1a(4)'' 
                and inserting ``section 1a''.
            (10) The first section of Public Law 85-839 (7 U.S.C. 13-1) 
        is amended in subsection (a), in the first sentence, by 
        inserting ``motion picture box office receipts (or any index, 
        measure, value, or data related to such receipts) or'' after 
        ``sale of''.

    (f) <<NOTE: 7 USC 1a note.>>  Effective Date.--Notwithstanding any 
other provision of this Act, the amendments made by subsection (a)(4) 
shall take effect on June 1, 2010.
SEC. 722. JURISDICTION.

    (a) Exclusive Jurisdiction.--Section 2(a)(1) of the Commodity 
Exchange Act (7 U.S.C. 2(a)(1)) is amended--
            (1) in subparagraph (A), in the first sentence--
                    (A) by inserting ``the Wall Street Transparency and 
                Accountability Act of 2010 (including an amendment made 
                by that Act) and'' after ``otherwise provided in'';
                    (B) by striking ``(C) and (D)'' and inserting ``(C), 
                (D), and (I)'';
                    (C) by striking ``(c) through (i) of this section'' 
                and inserting ``(c) and (f)'';
                    (D) by striking ``contracts of sale'' and inserting 
                ``swaps or contracts of sale''; and
                    (E) by striking ``or derivatives transaction 
                execution facility registered pursuant to section 5 or 
                5a'' and inserting ``pursuant to section 5 or a swap 
                execution facility pursuant to section 5h''; and
            (2) by adding at the end the following:
                    ``(G)(i) Nothing in this paragraph shall limit the 
                jurisdiction conferred on the Securities and Exchange 
                Commission by the Wall Street Transparency and 
                Accountability Act of 2010 with regard to security-based 
                swap agreements as defined pursuant to section 3(a)(78) 
                of the Securities Exchange Act of 1934, and security-
                based swaps.
                    ``(ii) In addition to the authority of the 
                Securities and Exchange Commission described in clause 
                (i), nothing in this subparagraph shall limit or affect 
                any statutory authority of the Commission with respect 
                to an agreement, contract, or transaction described in 
                clause (i).
                    ``(H) Notwithstanding any other provision of law, 
                the Wall Street Transparency and Accountability Act of 
                2010 shall not apply to, and the Commodity Futures 
                Trading Commission shall have no jurisdiction under such 
                Act (or any amendments to the Commodity Exchange Act 
                made by such Act) with respect to, any security other 
                than a security-based swap.''.

[[Page 124 STAT. 1673]]

    (b) Regulation of Swaps Under Federal and State Law.--Section 12 of 
the Commodity Exchange Act (7 U.S.C. 16) is amended by adding at the end 
the following:
    ``(h) Regulation of Swaps as Insurance Under State Law.--A swap--
            ``(1) shall not be considered to be insurance; and
            ``(2) may not be regulated as an insurance contract under 
        the law of any State.''.

    (c) Agreements, Contracts, and Transactions Traded on an Organized 
Exchange.--Section 2(c)(2)(A) of the Commodity Exchange Act (7 U.S.C. 
2(c)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) by redesignating clause (ii) as clause (iii); and
            (3) by inserting after clause (i) the following:
                          ``(ii) a swap; or''.

    (d) Applicability.--Section 2 of the Commodity Exchange Act (7 
U.S.C. 2) (as amended by section 723(a)(3)) is amended by adding at the 
end the following:
    ``(i) Applicability.--The provisions of this Act relating to swaps 
that were enacted by the Wall Street Transparency and Accountability Act 
of 2010 (including any rule prescribed or regulation promulgated under 
that Act), shall not apply to activities outside the United States 
unless those activities--
            ``(1) have a direct and significant connection with 
        activities in, or effect on, commerce of the United States; or
            ``(2) contravene such rules or regulations as the Commission 
        may prescribe or promulgate as are necessary or appropriate to 
        prevent the evasion of any provision of this Act that was 
        enacted by the Wall Street Transparency and Accountability Act 
        of 2010.''.

    (e) Federal Energy Regulatory Commission.--Section 2(a)(1) of the 
Commodity Exchange Act (7 U.S.C. 2(a)(1)) is amended by adding at the 
end the following:
                    ``(I)(i) Nothing in this Act shall limit or affect 
                any statutory authority of the Federal Energy Regulatory 
                Commission or a State regulatory authority (as defined 
                in section 3(21) of the Federal Power Act (16 U.S.C. 
                796(21)) with respect to an agreement, contract, or 
                transaction that is entered into pursuant to a tariff or 
                rate schedule approved by the Federal Energy Regulatory 
                Commission or a State regulatory authority and is--
                          ``(I) not executed, traded, or cleared on a 
                      registered entity or trading facility; or
                          ``(II) executed, traded, or cleared on a 
                      registered entity or trading facility owned or 
                      operated by a regional transmission organization 
                      or independent system operator.
                    ``(ii) In addition to the authority of the Federal 
                Energy Regulatory Commission or a State regulatory 
                authority described in clause (i), nothing in this 
                subparagraph shall limit or affect--
                          ``(I) any statutory authority of the 
                      Commission with respect to an agreement, contract, 
                      or transaction described in clause (i); or
                          ``(II) the jurisdiction of the Commission 
                      under subparagraph (A) with respect to an 
                      agreement, contract, or transaction that is 
                      executed, traded, or cleared

[[Page 124 STAT. 1674]]

                      on a registered entity or trading facility that is 
                      not owned or operated by a regional transmission 
                      organization or independent system operator (as 
                      defined by sections 3(27) and (28) of the Federal 
                      Power Act (16 U.S.C. 796(27), 796(28)).''.

    (f) Public Interest Waiver.--Section 4(c) of the Commodity Exchange 
Act (7 U.S.C. 6(c)) (as amended by section 721(d)) is amended by adding 
at the end the following:
            ``(6) If the Commission determines that the exemption would 
        be consistent with the public interest and the purposes of this 
        Act, the Commission shall, in accordance with paragraphs (1) and 
        (2), exempt from the requirements of this Act an agreement, 
        contract, or transaction that is entered into--
                    ``(A) pursuant to a tariff or rate schedule approved 
                or permitted to take effect by the Federal Energy 
                Regulatory Commission;
                    ``(B) pursuant to a tariff or rate schedule 
                establishing rates or charges for, or protocols 
                governing, the sale of electric energy approved or 
                permitted to take effect by the regulatory authority of 
                the State or municipality having jurisdiction to 
                regulate rates and charges for the sale of electric 
                energy within the State or municipality; or
                    ``(C) between entities described in section 201(f) 
                of the Federal Power Act (16 U.S.C. 824(f)).''.

    (g) <<NOTE: 15 USC 8322.>> Authority of FERC.--Nothing in the Wall 
Street Transparency and Accountability Act of 2010 or the amendments to 
the Commodity Exchange Act made by such Act shall limit or affect any 
statutory enforcement authority of the Federal Energy Regulatory 
Commission pursuant to section 222 of the Federal Power Act and section 
4A of the Natural Gas Act that existed prior to the date of enactment of 
the Wall Street Transparency and Accountability Act of 2010.

    (h) Determination.--The Commodity Exchange Act is amended by 
inserting after section 1a (7 U.S.C. 1a) the following:
``SEC. 1b. <<NOTE: 7 USC 1b.>>  REQUIREMENTS OF SECRETARY OF THE 
                      TREASURY REGARDING EXEMPTION OF FOREIGN 
                      EXCHANGE SWAPS AND FOREIGN EXCHANGE FORWARDS 
                      FROM DEFINITION OF THE TERM `SWAP'.

    ``(a) Required Considerations.--In determining whether to exempt 
foreign exchange swaps and foreign exchange forwards from the definition 
of the term `swap', the Secretary of the Treasury (referred to in this 
section as the `Secretary') shall consider--
            ``(1) whether the required trading and clearing of foreign 
        exchange swaps and foreign exchange forwards would create 
        systemic risk, lower transparency, or threaten the financial 
        stability of the United States;
            ``(2) whether foreign exchange swaps and foreign exchange 
        forwards are already subject to a regulatory scheme that is 
        materially comparable to that established by this Act for other 
        classes of swaps;
            ``(3) the extent to which bank regulators of participants in 
        the foreign exchange market provide adequate supervision, 
        including capital and margin requirements;
            ``(4) the extent of adequate payment and settlement systems; 
        and

[[Page 124 STAT. 1675]]

            ``(5) the use of a potential exemption of foreign exchange 
        swaps and foreign exchange forwards to evade otherwise 
        applicable regulatory requirements.

    ``(b) Determination.--If the Secretary makes a determination to 
exempt foreign exchange swaps and foreign exchange forwards from the 
definition of the term `swap', the Secretary shall submit to the 
appropriate committees of Congress a determination that contains--
            ``(1) an explanation regarding why foreign exchange swaps 
        and foreign exchange forwards are qualitatively different from 
        other classes of swaps in a way that would make the foreign 
        exchange swaps and foreign exchange forwards ill-suited for 
        regulation as swaps; and
            ``(2) an identification of the objective differences of 
        foreign exchange swaps and foreign exchange forwards with 
        respect to standard swaps that warrant an exempted status.

    ``(c) Effect of Determination.--A determination by the Secretary 
under subsection (b) shall not exempt any foreign exchange swaps and 
foreign exchange forwards traded on a designated contract market or swap 
execution facility from any applicable antifraud and antimanipulation 
provision under this title.''.
SEC. 723. CLEARING.

    (a) Clearing Requirement.--
            (1) In general.--Section 2 of the Commodity Exchange Act (7 
        U.S.C. 2) is amended--
                    (A) by striking subsections (d), (e), (g), and (h); 
                and
                    (B) by redesignating subsection (i) as subsection 
                (g).
            (2) Swaps; limitation on participation.--Section 2 of the 
        Commodity Exchange Act (7 U.S.C. 2) (as amended by paragraph 
        (1)) is amended by inserting after subsection (c) the following:

    ``(d) Swaps.--Nothing in this Act (other than subparagraphs (A), 
(B), (C), (D), (G), and (H) of subsection (a)(1), subsections (f) and 
(g), sections 1a, 2(a)(13), 2(c)(2)(A)(ii), 2(e), 2(h), 4(c), 4a, 4b, 
and 4b-1, subsections (a), (b), and (g) of section 4c, sections 4d, 4e, 
4f, 4g, 4h, 4i, 4j, 4k, 4l, 4m, 4n, 4o, 4p, 4r, 4s, 4t, 5, 5b, 5c, 5e, 
and 5h, subsections (c) and (d) of section 6, sections 6c, 6d, 8, 8a, 
and 9, subsections (e)(2), (f), and (h) of section 12, subsections (a) 
and (b) of section 13, sections 17, 20, 21, and 22(a)(4), and any other 
provision of this Act that is applicable to registered entities or 
Commission registrants) governs or applies to a swap.
    ``(e) Limitation on Participation.--It shall be unlawful for any 
person, other than an eligible contract participant, to enter into a 
swap unless the swap is entered into on, or subject to the rules of, a 
board of trade designated as a contract market under section 5.''.
            (3) Mandatory clearing of swaps.--Section 2 of the Commodity 
        Exchange Act (7 U.S.C. 2) is amended by inserting after 
        subsection (g) (as redesignated by paragraph (1)(B)) the 
        following:

    ``(h) Clearing Requirement.--
            ``(1) In general.--
                    ``(A) Standard for clearing.--It shall be unlawful 
                for any person to engage in a swap unless that person 
                submits such swap for clearing to a derivatives clearing

[[Page 124 STAT. 1676]]

                organization that is registered under this Act or a 
                derivatives clearing organization that is exempt from 
                registration under this Act if the swap is required to 
                be cleared.
                    ``(B) Open access.--The rules of a derivatives 
                clearing organization described in subparagraph (A) 
                shall--
                          ``(i) prescribe that all swaps (but not 
                      contracts of sale of a commodity for future 
                      delivery or options on such contracts) submitted 
                      to the derivatives clearing organization with the 
                      same terms and conditions are economically 
                      equivalent within the derivatives clearing 
                      organization and may be offset with each other 
                      within the derivatives clearing organization; and
                          ``(ii) provide for non-discriminatory clearing 
                      of a swap (but not a contract of sale of a 
                      commodity for future delivery or option on such 
                      contract) executed bilaterally or on or through 
                      the rules of an unaffiliated designated contract 
                      market or swap execution facility.
            ``(2) Commission review.--
                    ``(A) Commission-initiated review.--
                          ``(i) The Commission on an ongoing basis shall 
                      review each swap, or any group, category, type, or 
                      class of swaps to make a determination as to 
                      whether the swap or group, category, type, or 
                      class of swaps should be required to be cleared.
                          ``(ii) <<NOTE: Public comment. Time period.>>  
                      The Commission shall provide at least a 30-day 
                      public comment period regarding any determination 
                      made under clause (i).
                    ``(B) Swap submissions.--
                          ``(i) <<NOTE: Notice.>>  A derivatives 
                      clearing organization shall submit to the 
                      Commission each swap, or any group, category, 
                      type, or class of swaps that it plans to accept 
                      for clearing, and provide notice to its members 
                      (in a manner to be determined by the Commission) 
                      of the submission.
                          ``(ii) Any swap or group, category, type, or 
                      class of swaps listed for clearing by a derivative 
                      clearing organization as of the date of enactment 
                      of this subsection shall be considered submitted 
                      to the Commission.
                          ``(iii) <<NOTE: Public information.>>  The 
                      Commission shall--
                                    ``(I) make available to the public 
                                submissions received under clauses (i) 
                                and (ii);
                                    ``(II) review each submission made 
                                under clauses (i) and (ii), and 
                                determine whether the swap, or group, 
                                category, type, or class of swaps 
                                described in the submission is required 
                                to be cleared; and
                                    ``(III) <<NOTE: Public comment. Time 
                                period.>>  provide at least a 30-day 
                                public comment period regarding its 
                                determination as to whether the clearing 
                                requirement under paragraph (1)(A) shall 
                                apply to the submission.
                    ``(C) Deadline.--The Commission shall make its 
                determination under subparagraph (B)(iii) not later than 
                90 days after receiving a submission made under 
                subparagraphs (B)(i) and (B)(ii), unless the submitting 
                derivatives clearing organization agrees to an extension 
                for the time limitation established under this 
                subparagraph.

[[Page 124 STAT. 1677]]

                    ``(D) Determination.--
                          ``(i) In reviewing a submission made under 
                      subparagraph (B), the Commission shall review 
                      whether the submission is consistent with section 
                      5b(c)(2).
                          ``(ii) In reviewing a swap, group of swaps, or 
                      class of swaps pursuant to subparagraph (A) or a 
                      submission made under subparagraph (B), the 
                      Commission shall take into account the following 
                      factors:
                                    ``(I) The existence of significant 
                                outstanding notional exposures, trading 
                                liquidity, and adequate pricing data.
                                    ``(II) The availability of rule 
                                framework, capacity, operational 
                                expertise and resources, and credit 
                                support infrastructure to clear the 
                                contract on terms that are consistent 
                                with the material terms and trading 
                                conventions on which the contract is 
                                then traded.
                                    ``(III) The effect on the mitigation 
                                of systemic risk, taking into account 
                                the size of the market for such contract 
                                and the resources of the derivatives 
                                clearing organization available to clear 
                                the contract.
                                    ``(IV) The effect on competition, 
                                including appropriate fees and charges 
                                applied to clearing.
                                    ``(V) The existence of reasonable 
                                legal certainty in the event of the 
                                insolvency of the relevant derivatives 
                                clearing organization or 1 or more of 
                                its clearing members with regard to the 
                                treatment of customer and swap 
                                counterparty positions, funds, and 
                                property.
                          ``(iii) In making a determination under 
                      subparagraph (A) or (B)(iii) that the clearing 
                      requirement shall apply, the Commission may 
                      require such terms and conditions to the 
                      requirement as the Commission determines to be 
                      appropriate.
                    ``(E) <<NOTE: Deadline.>>  Rules.--Not later than 1 
                year after the date of the enactment of this subsection, 
                the Commission shall adopt rules for a derivatives 
                clearing organization's submission for review, pursuant 
                to this paragraph, of a swap, or a group, category, 
                type, or class of swaps, that it seeks to accept for 
                clearing. Nothing in this subparagraph limits the 
                Commission from making a determination under 
                subparagraph (B)(iii) for swaps described in 
                subparagraph (B)(ii).
            ``(3) Stay of clearing requirement.--
                    ``(A) In general.--After making a determination 
                pursuant to paragraph (2)(B), the Commission, on 
                application of a counterparty to a swap or on its own 
                initiative, may stay the clearing requirement of 
                paragraph (1) until the Commission completes a review of 
                the terms of the swap (or the group, category, type, or 
                class of swaps) and the clearing arrangement.
                    ``(B) Deadline.--The Commission shall complete a 
                review undertaken pursuant to subparagraph (A) not later 
                than 90 days after issuance of the stay, unless the 
                derivatives clearing organization that clears the swap, 
                or group,

[[Page 124 STAT. 1678]]

                category, type, or class of swaps agrees to an extension 
                of the time limitation established under this 
                subparagraph.
                    ``(C) Determination.--Upon completion of the review 
                undertaken pursuant to subparagraph (A), the Commission 
                may--
                          ``(i) determine, unconditionally or subject to 
                      such terms and conditions as the Commission 
                      determines to be appropriate, that the swap, or 
                      group, category, type, or class of swaps must be 
                      cleared pursuant to this subsection if it finds 
                      that such clearing is consistent with paragraph 
                      (2)(D); or
                          ``(ii) determine that the clearing requirement 
                      of paragraph (1) shall not apply to the swap, or 
                      group, category, type, or class of swaps.
                    ``(D) <<NOTE: Deadline.>>  Rules.--Not later than 1 
                year after the date of the enactment of the Wall Street 
                Transparency and Accountability Act of 2010, the 
                Commission shall adopt rules for reviewing, pursuant to 
                this paragraph, a derivatives clearing organization's 
                clearing of a swap, or a group, category, type, or class 
                of swaps, that it has accepted for clearing.
            ``(4) Prevention of evasion.--
                    ``(A) <<NOTE: Regulations.>>  In general.--The 
                Commission shall prescribe rules under this subsection 
                (and issue interpretations of rules prescribed under 
                this subsection) as determined by the Commission to be 
                necessary to prevent evasions of the mandatory clearing 
                requirements under this Act.
                    ``(B) Duty of commission to investigate and take 
                certain actions.--To the extent the Commission finds 
                that a particular swap, group, category, type, or class 
                of swaps would otherwise be subject to mandatory 
                clearing but no derivatives clearing organization has 
                listed the swap, group, category, type, or class of 
                swaps for clearing, the Commission shall--
                          ``(i) investigate the relevant facts and 
                      circumstances;
                          ``(ii) <<NOTE: Deadline. Public 
                      information. Reports.>>  within 30 days issue a 
                      public report containing the results of the 
                      investigation; and
                          ``(iii) take such actions as the Commission 
                      determines to be necessary and in the public 
                      interest, which may include requiring the 
                      retaining of adequate margin or capital by parties 
                      to the swap, group, category, type, or class of 
                      swaps.
                    ``(C) Effect on authority.--Nothing in this 
                paragraph--
                          ``(i) authorizes the Commission to adopt rules 
                      requiring a derivatives clearing organization to 
                      list for clearing a swap, group, category, type, 
                      or class of swaps if the clearing of the swap, 
                      group, category, type, or class of swaps would 
                      threaten the financial integrity of the 
                      derivatives clearing organization; and
                          ``(ii) affects the authority of the Commission 
                      to enforce the open access provisions of paragraph 
                      (1)(B) with respect to a swap, group, category, 
                      type, or class of swaps that is listed for 
                      clearing by a derivatives clearing organization.

[[Page 124 STAT. 1679]]

            ``(5) Reporting transition rules.--Rules adopted by the 
        Commission under this section shall provide for the reporting of 
        data, as follows:
                    ``(A) Swaps entered into before the date of the 
                enactment of this subsection shall be reported to a 
                registered swap data repository or the Commission no 
                later than 180 days after the effective date of this 
                subsection.
                    ``(B) Swaps entered into on or after such date of 
                enactment shall be reported to a registered swap data 
                repository or the Commission no later than the later 
                of--
                          ``(i) 90 days after such effective date; or
                          ``(ii) such other time after entering into the 
                      swap as the Commission may prescribe by rule or 
                      regulation.
            ``(6) Clearing transition rules.--
                    ``(A) Swaps entered into before the date of the 
                enactment of this subsection are exempt from the 
                clearing requirements of this subsection if reported 
                pursuant to paragraph (5)(A).
                    ``(B) Swaps entered into before application of the 
                clearing requirement pursuant to this subsection are 
                exempt from the clearing requirements of this subsection 
                if reported pursuant to paragraph (5)(B).
            ``(7) Exceptions.--
                    ``(A) In general.--The requirements of paragraph 
                (1)(A) shall not apply to a swap if 1 of the 
                counterparties to the swap--
                          ``(i) is not a financial entity;
                          ``(ii) is using swaps to hedge or mitigate 
                      commercial risk; and
                          ``(iii) <<NOTE: Notification.>>  notifies the 
                      Commission, in a manner set forth by the 
                      Commission, how it generally meets its financial 
                      obligations associated with entering into non-
                      cleared swaps.
                    ``(B) Option to clear.--The application of the 
                clearing exception in subparagraph (A) is solely at the 
                discretion of the counterparty to the swap that meets 
                the conditions of clauses (i) through (iii) of 
                subparagraph (A).
                    ``(C) Financial entity definition.--
                          ``(i) In general.--For the purposes of this 
                      paragraph, the term `financial entity' means--
                                    ``(I) a swap dealer;
                                    ``(II) a security-based swap dealer;
                                    ``(III) a major swap participant;
                                    ``(IV) a major security-based swap 
                                participant;
                                    ``(V) a commodity pool;
                                    ``(VI) a private fund as defined in 
                                section 202(a) of the Investment 
                                Advisers Act of 1940 (15 U.S.C. 80-b-
                                2(a));
                                    ``(VII) an employee benefit plan as 
                                defined in paragraphs (3) and (32) of 
                                section 3 of the Employee Retirement 
                                Income Security Act of 1974 (29 U.S.C. 
                                1002);
                                    ``(VIII) a person predominantly 
                                engaged in activities that are in the 
                                business of banking, or in activities 
                                that are financial in nature, as defined 
                                in section 4(k) of the Bank Holding 
                                Company Act of 1956.

[[Page 124 STAT. 1680]]

                          ``(ii) Exclusion.--The Commission shall 
                      consider whether to exempt small banks, savings 
                      associations, farm credit system institutions, and 
                      credit unions, including--
                                    ``(I) depository institutions with 
                                total assets of $10,000,000,000 or less;
                                    ``(II) farm credit system 
                                institutions with total assets of 
                                $10,000,000,000 or less; or
                                    ``(III) credit unions with total 
                                assets of $10,000,000,000 or less.
                          ``(iii) Limitation.--Such definition shall not 
                      include an entity whose primary business is 
                      providing financing, and uses derivatives for the 
                      purpose of hedging underlying commercial risks 
                      related to interest rate and foreign currency 
                      exposures, 90 percent or more of which arise from 
                      financing that facilitates the purchase or lease 
                      of products, 90 percent or more of which are 
                      manufactured by the parent company or another 
                      subsidiary of the parent company.
                    ``(D) Treatment of affiliates.--
                          ``(i) In general.--An affiliate of a person 
                      that qualifies for an exception under subparagraph 
                      (A) (including affiliate entities predominantly 
                      engaged in providing financing for the purchase of 
                      the merchandise or manufactured goods of the 
                      person) may qualify for the exception only if the 
                      affiliate, acting on behalf of the person and as 
                      an agent, uses the swap to hedge or mitigate the 
                      commercial risk of the person or other affiliate 
                      of the person that is not a financial entity.
                          ``(ii) Prohibition relating to certain 
                      affiliates.--The exception in clause (i) shall not 
                      apply if the affiliate is--
                                    ``(I) a swap dealer;
                                    ``(II) a security-based swap dealer;
                                    ``(III) a major swap participant;
                                    ``(IV) a major security-based swap 
                                participant;
                                    ``(V) an issuer that would be an 
                                investment company, as defined in 
                                section 3 of the Investment Company Act 
                                of 1940 (15 U.S.C. 80a-3), but for 
                                paragraph (1) or (7) of subsection (c) 
                                of that Act (15 U.S.C. 80a-3(c));
                                    ``(VI) a commodity pool; or
                                    ``(VII) a bank holding company with 
                                over $50,000,000,000 in consolidated 
                                assets.
                          ``(iii) Transition rule for affiliates.--
                      An <<NOTE: Exemption. Time period.>>  affiliate, 
                      subsidiary, or a wholly owned entity of a person 
                      that qualifies for an exception under subparagraph 
                      (A) and is predominantly engaged in providing 
                      financing for the purchase or lease of merchandise 
                      or manufactured goods of the person shall be 
                      exempt from the margin requirement described in 
                      section 4s(e) and the clearing requirement 
                      described in paragraph (1) with regard to swaps 
                      entered into to mitigate the risk of the financing 
                      activities for not less than a 2-year period 
                      beginning on the date of enactment of this clause.
                    ``(E) Election of counterparty.--

[[Page 124 STAT. 1681]]

                          ``(i) Swaps required to be cleared.--With 
                      respect to any swap that is subject to the 
                      mandatory clearing requirement under this 
                      subsection and entered into by a swap dealer or a 
                      major swap participant with a counterparty that is 
                      not a swap dealer, major swap participant, 
                      security-based swap dealer, or major security-
                      based swap participant, the counterparty shall 
                      have the sole right to select the derivatives 
                      clearing organization at which the swap will be 
                      cleared.
                          ``(ii) Swaps not required to be cleared.--With 
                      respect to any swap that is not subject to the 
                      mandatory clearing requirement under this 
                      subsection and entered into by a swap dealer or a 
                      major swap participant with a counterparty that is 
                      not a swap dealer, major swap participant, 
                      security-based swap dealer, or major security-
                      based swap participant, the counterparty--
                                    ``(I) may elect to require clearing 
                                of the swap; and
                                    ``(II) shall have the sole right to 
                                select the derivatives clearing 
                                organization at which the swap will be 
                                cleared.
                    ``(F) Abuse of exception.--The Commission may 
                prescribe such rules or issue interpretations of the 
                rules as the Commission determines to be necessary to 
                prevent abuse of the exceptions described in this 
                paragraph. The Commission may also request information 
                from those persons claiming the clearing exception as 
                necessary to prevent abuse of the exceptions described 
                in this paragraph.
            ``(8) Trade execution.--
                    ``(A) In general.--With respect to transactions 
                involving swaps subject to the clearing requirement of 
                paragraph (1), counterparties shall--
                          ``(i) execute the transaction on a board of 
                      trade designated as a contract market under 
                      section 5; or
                          ``(ii) execute the transaction on a swap 
                      execution facility registered under 5h or a swap 
                      execution facility that is exempt from 
                      registration under section 5h(f) of this Act.
                    ``(B) Exception.--The requirements of clauses (i) 
                and (ii) of subparagraph (A) shall not apply if no board 
                of trade or swap execution facility makes the swap 
                available to trade or for swap transactions subject to 
                the clearing exception under paragraph (7).''.

    (b) Commodity Exchange Act.--Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) is amended by adding at the end the following:
    ``(j)  Committee Approval by Board.--Exemptions from the 
requirements of subsection (h)(1) to clear a swap and subsection (h)(8) 
to execute a swap through a board of trade or swap execution facility 
shall be available to a counterparty that is an issuer of securities 
that are registered under section 12 of the Securities Exchange Act of 
1934 (15 U.S.C. 78l) or that is required to file reports pursuant to 
section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
only if an appropriate committee of the issuer's board or governing body 
has reviewed and approved its decision to enter into swaps that are 
subject to such exemptions.''.

[[Page 124 STAT. 1682]]

    (c) <<NOTE: 7 USC 2 note.>>  Grandfather Provisions.--
            (1) Legal certainty for certain transactions in exempt 
        commodities.--Not <<NOTE: Deadline.>>  later than 60 days after 
        the date of enactment of this Act, a person may submit to the 
        Commodity Futures Trading Commission a petition to remain 
        subject to section 2(h) of the Commodity Exchange Act (7 U.S.C. 
        2(h)) (as in effect on the day before the date of enactment of 
        this Act).
            (2) Consideration; authority of commodity futures trading 
        commission.--The Commodity Futures Trading Commission--
                    (A) shall consider any petition submitted under 
                subparagraph (A) in a prompt manner; and
                    (B) may allow a person to continue operating subject 
                to section 2(h) of the Commodity Exchange Act (7 U.S.C. 
                2(h)) (as in effect on the day before the date of 
                enactment of this Act) for not longer than a 1-year 
                period.
            (3) Agricultural swaps.--
                    (A) In general.--Except as provided in subparagraph 
                (B), no person shall offer to enter into, enter into, or 
                confirm the execution of, any swap in an agricultural 
                commodity (as defined by the Commodity Futures Trading 
                Commission).
                    (B) <<NOTE: Regulations.>>  Exception.--
                Notwithstanding subparagraph (A), a person may offer to 
                enter into, enter into, or confirm the execution of, any 
                swap in an agricultural commodity pursuant to section 
                4(c) of the Commodity Exchange Act (7 U.S.C. 6(c)) or 
                any rule, regulation, or order issued thereunder 
                (including any rule, regulation, or order in effect as 
                of the date of enactment of this Act) by the Commodity 
                Futures Trading Commission to allow swaps under such 
                terms and conditions as the Commission shall prescribe.
            (4) Required reporting.--If <<NOTE: Compliance. Records.>>  
        the exception described in section 2(h)(8)(B) of the Commodity 
        Exchange Act applies, the counterparties shall comply with any 
        recordkeeping and transaction reporting requirements that may be 
        prescribed by the Commission with respect to swaps subject to 
        section 2(h)(8)(B) of the Commodity Exchange Act.
SEC. 724. SWAPS; SEGREGATION AND BANKRUPTCY TREATMENT.

    (a) Segregation Requirements for Cleared Swaps.--Section 4d of the 
Commodity Exchange Act (7 U.S.C. 6d) (as amended by section 732) is 
amended by adding at the end the following:
    ``(f) Swaps.--
            ``(1) Registration requirement.--It shall be unlawful for 
        any person to accept any money, securities, or property (or to 
        extend any credit in lieu of money, securities, or property) 
        from, for, or on behalf of a swaps customer to margin, 
        guarantee, or secure a swap cleared by or through a derivatives 
        clearing organization (including money, securities, or property 
        accruing to the customer as the result of such a swap), unless 
        the person shall have registered under this Act with the 
        Commission as a futures commission merchant, and the 
        registration shall not have expired nor been suspended nor 
        revoked.
            ``(2) Cleared swaps.--

[[Page 124 STAT. 1683]]

                    ``(A) Segregation required.--A futures commission 
                merchant shall treat and deal with all money, 
                securities, and property of any swaps customer received 
                to margin, guarantee, or secure a swap cleared by or 
                though a derivatives clearing organization (including 
                money, securities, or property accruing to the swaps 
                customer as the result of such a swap) as belonging to 
                the swaps customer.
                    ``(B) Commingling prohibited.--Money, securities, 
                and property of a swaps customer described in 
                subparagraph (A) shall be separately accounted for and 
                shall not be commingled with the funds of the futures 
                commission merchant or be used to margin, secure, or 
                guarantee any trades or contracts of any swaps customer 
                or person other than the person for whom the same are 
                held.
            ``(3) Exceptions.--
                    ``(A) Use of funds.--
                          ``(i) In general.--Notwithstanding paragraph 
                      (2), money, securities, and property of swap 
                      customers of a futures commission merchant 
                      described in paragraph (2) may, for convenience, 
                      be commingled and deposited in the same account or 
                      accounts with any bank or trust company or with a 
                      derivatives clearing organization.
                          ``(ii) Withdrawal.--Notwithstanding paragraph 
                      (2), such share of the money, securities, and 
                      property described in clause (i) as in the normal 
                      course of business shall be necessary to margin, 
                      guarantee, secure, transfer, adjust, or settle a 
                      cleared swap with a derivatives clearing 
                      organization, or with any member of the 
                      derivatives clearing organization, may be 
                      withdrawn and applied to such purposes, including 
                      the payment of commissions, brokerage, interest, 
                      taxes, storage, and other charges, lawfully 
                      accruing in connection with the cleared swap.
                    ``(B) Commission action.--Notwithstanding paragraph 
                (2), in accordance with such terms and conditions as the 
                Commission may prescribe by rule, regulation, or order, 
                any money, securities, or property of the swaps 
                customers of a futures commission merchant described in 
                paragraph (2) may be commingled and deposited in 
                customer accounts with any other money, securities, or 
                property received by the futures commission merchant and 
                required by the Commission to be separately accounted 
                for and treated and dealt with as belonging to the swaps 
                customer of the futures commission merchant.
            ``(4) Permitted investments.--Money described in paragraph 
        (2) may be invested in obligations of the United States, in 
        general obligations of any State or of any political subdivision 
        of a State, and in obligations fully guaranteed as to principal 
        and interest by the United States, or in any other investment 
        that the Commission may by rule or regulation prescribe, and 
        such investments shall be made in accordance with such rules and 
        regulations and subject to such conditions as the Commission may 
        prescribe.
            ``(5) Commodity contract.--A swap cleared by or through a 
        derivatives clearing organization shall be considered to be a 
        commodity contract as such term is defined in section 761

[[Page 124 STAT. 1684]]

        of title 11, United States Code, with regard to all money, 
        securities, and property of any swaps customer received by a 
        futures commission merchant or a derivatives clearing 
        organization to margin, guarantee, or secure the swap (including 
        money, securities, or property accruing to the customer as the 
        result of the swap).
            ``(6) Prohibition.--It shall be unlawful for any person, 
        including any derivatives clearing organization and any 
        depository institution, that has received any money, securities, 
        or property for deposit in a separate account or accounts as 
        provided in paragraph (2) to hold, dispose of, or use any such 
        money, securities, or property as belonging to the depositing 
        futures commission merchant or any person other than the swaps 
        customer of the futures commission merchant.''.

    (b) Bankruptcy Treatment of Cleared Swaps.--Section 761 of title 11, 
United States Code, is amended--
            (1) in paragraph (4), by striking subparagraph (F) and 
        inserting the following:
                    ``(F)(i) any other contract, option, agreement, or 
                transaction that is similar to a contract, option, 
                agreement, or transaction referred to in this paragraph; 
                and
                    ``(ii) with respect to a futures commission merchant 
                or a clearing organization, any other contract, option, 
                agreement, or transaction, in each case, that is cleared 
                by a clearing organization;''; and
            (2) in paragraph (9)(A)(i), by striking ``the commodity 
        futures account'' and inserting ``a commodity contract 
        account''.

    (c) Segregation Requirements for Uncleared Swaps.--Section 4s of the 
Commodity Exchange Act <<NOTE: 7 USC 6s.>>  (as added by section 731) is 
amended by adding at the end the following:

    ``(l) Segregation Requirements.--
            ``(1) Segregation of assets held as collateral in uncleared 
        swap transactions.--
                    ``(A) Notification.--A swap dealer or major swap 
                participant shall be required to notify the counterparty 
                of the swap dealer or major swap participant at the 
                beginning of a swap transaction that the counterparty 
                has the right to require segregation of the funds or 
                other property supplied to margin, guarantee, or secure 
                the obligations of the counterparty.
                    ``(B) Segregation and maintenance of funds.--At the 
                request of a counterparty to a swap that provides funds 
                or other property to a swap dealer or major swap 
                participant to margin, guarantee, or secure the 
                obligations of the counterparty, the swap dealer or 
                major swap participant shall--
                          ``(i) segregate the funds or other property 
                      for the benefit of the counterparty; and
                          ``(ii) in accordance with such rules and 
                      regulations as the Commission may promulgate, 
                      maintain the funds or other property in a 
                      segregated account separate from the assets and 
                      other interests of the swap dealer or major swap 
                      participant.
            ``(2) Applicability.--The requirements described in 
        paragraph (1) shall--

[[Page 124 STAT. 1685]]

                    ``(A) apply only to a swap between a counterparty 
                and a swap dealer or major swap participant that is not 
                submitted for clearing to a derivatives clearing 
                organization; and
                    ``(B)(i) not apply to variation margin payments; or
                    ``(ii) not preclude any commercial arrangement 
                regarding--
                          ``(I) the investment of segregated funds or 
                      other property that may only be invested in such 
                      investments as the Commission may permit by rule 
                      or regulation; and
                          ``(II) the related allocation of gains and 
                      losses resulting from any investment of the 
                      segregated funds or other property.
            ``(3) Use of independent third-party custodians.--The 
        segregated account described in paragraph (1) shall be--
                    ``(A) carried by an independent third-party 
                custodian; and
                    ``(B) designated as a segregated account for and on 
                behalf of the counterparty.
            ``(4) Reporting requirement.--If the counterparty does not 
        choose to require segregation of the funds or other property 
        supplied to margin, guarantee, or secure the obligations of the 
        counterparty, the swap dealer or major swap participant shall 
        report to the counterparty of the swap dealer or major swap 
        participant on a quarterly basis that the back office procedures 
        of the swap dealer or major swap participant relating to margin 
        and collateral requirements are in compliance with the agreement 
        of the counterparties.''.
SEC. 725. DERIVATIVES CLEARING ORGANIZATIONS.

    (a) Registration Requirement.--Section 5b of the Commodity Exchange 
Act (7 U.S.C. 7a-1) is amended by striking subsections (a) and (b) and 
inserting the following:
    ``(a) Registration Requirement.--
            ``(1) In general.--Except as provided in paragraph (2), it 
        shall be unlawful for a derivatives clearing organization, 
        directly or indirectly, to make use of the mails or any means or 
        instrumentality of interstate commerce to perform the functions 
        of a derivatives clearing organization with respect to--
                    ``(A) <<NOTE: Contracts.>>  a contract of sale of a 
                commodity for future delivery (or an option on the 
                contract of sale) or option on a commodity, in each 
                case, unless the contract or option is--
                          ``(i) excluded from this Act by subsection 
                      (a)(1)(C)(i), (c), or (f) of section 2; or
                          ``(ii) a security futures product cleared by a 
                      clearing agency registered with the Securities and 
                      Exchange Commission under the Securities Exchange 
                      Act of 1934 (15 U.S.C. 78a et seq.); or
                    ``(B) a swap.
            ``(2) Exception.--Paragraph (1) shall not apply to a 
        derivatives clearing organization that is registered with the 
        Commission.

    ``(b) Voluntary Registration.--A person that clears 1 or more 
agreements, contracts, or transactions that are not required to

[[Page 124 STAT. 1686]]

be cleared under this Act may register with the Commission as a 
derivatives clearing organization.''.
    (b) Registration for Depository Institutions and Clearing Agencies; 
Exemptions; Compliance Officer; Annual Reports.--Section 5b of the 
Commodity Exchange Act (7 U.S.C. 7a-1) is amended by adding at the end 
the following:
    ``(g) Existing Depository Institutions and Clearing Agencies.--
            ``(1) In general.--A depository institution or clearing 
        agency registered with the Securities and Exchange Commission 
        under the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
        seq.) that is required to be registered as a derivatives 
        clearing organization under this section is deemed to be 
        registered under this section to the extent that, before the 
        date of enactment of this subsection--
                    ``(A) the depository institution cleared swaps as a 
                multilateral clearing organization; or
                    ``(B) the clearing agency cleared swaps.
            ``(2) Conversion of depository institutions.--A depository 
        institution to which this subsection applies may, by the vote of 
        the shareholders owning not less than 51 percent of the voting 
        interests of the depository institution, be converted into a 
        State corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if the 
        conversion is not in contravention of applicable State law.
            ``(3) Sharing of information.--The Securities and Exchange 
        Commission shall make available to the Commission, upon request, 
        all information determined to be relevant by the Securities and 
        Exchange Commission regarding a clearing agency deemed to be 
        registered with the Commission under paragraph (1).

    ``(h) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a derivatives clearing organization from registration 
under this section for the clearing of swaps if the Commission 
determines that the derivatives clearing organization is subject to 
comparable, comprehensive supervision and regulation by the Securities 
and Exchange Commission or the appropriate government authorities in the 
home country of the organization. Such conditions may include, but are 
not limited to, requiring that the derivatives clearing organization be 
available for inspection by the Commission and make available all 
information requested by the Commission.
    ``(i) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each derivatives clearing organization 
        shall designate an individual to serve as a chief compliance 
        officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the derivatives clearing organization;
                    ``(B) review the compliance of the derivatives 
                clearing organization with respect to the core 
                principles described in subsection (c)(2);
                    ``(C) in consultation with the board of the 
                derivatives clearing organization, a body performing a 
                function similar to the board of the derivatives 
                clearing organization, or the senior officer of the 
                derivatives clearing organization, resolve any conflicts 
                of interest that may arise;

[[Page 124 STAT. 1687]]

                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to agreements, contracts, or 
                transactions, including each rule prescribed by the 
                Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the compliance 
                officer through any--
                          ``(i) compliance office review;
                          ``(ii) look-back;
                          ``(iii) internal or external audit finding;
                          ``(iv) self-reported error; or
                          ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                          ``(i) the compliance of the derivatives 
                      clearing organization of the compliance officer 
                      with respect to this Act (including regulations); 
                      and
                          ``(ii) each policy and procedure of the 
                      derivatives clearing organization of the 
                      compliance officer (including the code of ethics 
                      and conflict of interest policies of the 
                      derivatives clearing organization).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          ``(i) accompany each appropriate financial 
                      report of the derivatives clearing organization 
                      that is required to be furnished to the Commission 
                      pursuant to this section; and
                          ``(ii) <<NOTE: Certification.>>  include a 
                      certification that, under penalty of law, the 
                      compliance report is accurate and complete.''.

    (c) Core Principles for Derivatives Clearing Organizations.--Section 
5b(c) of the Commodity Exchange Act (7 U.S.C. 7a-1(c)) is amended by 
striking paragraph (2) and inserting the following:
            ``(2) Core principles for derivatives clearing 
        organizations.--
                    ``(A) Compliance.--
                          ``(i) In general.--To be registered and to 
                      maintain registration as a derivatives clearing 
                      organization, a derivatives clearing organization 
                      shall comply with each core principle described in 
                      this paragraph and any requirement that the 
                      Commission may impose by rule or regulation 
                      pursuant to section 8a(5).
                          ``(ii) Discretion of derivatives clearing 
                      organization.--Subject to any rule or regulation 
                      prescribed by the Commission, a derivatives 
                      clearing organization shall have reasonable 
                      discretion in establishing the manner by which the 
                      derivatives clearing

[[Page 124 STAT. 1688]]

                      organization complies with each core principle 
                      described in this paragraph.
                    ``(B) Financial resources.--
                          ``(i) In general.--Each derivatives clearing 
                      organization shall have adequate financial, 
                      operational, and managerial resources, as 
                      determined by the Commission, to discharge each 
                      responsibility of the derivatives clearing 
                      organization.
                          ``(ii) Minimum amount of financial 
                      resources.--Each derivatives clearing organization 
                      shall possess financial resources that, at a 
                      minimum, exceed the total amount that would--
                                    ``(I) enable the organization to 
                                meet its financial obligations to its 
                                members and participants notwithstanding 
                                a default by the member or participant 
                                creating the largest financial exposure 
                                for that organization in extreme but 
                                plausible market conditions; and
                                    ``(II) enable the derivatives 
                                clearing organization to cover the 
                                operating costs of the derivatives 
                                clearing organization for a period of 1 
                                year (as calculated on a rolling basis).
                    ``(C) Participant and product eligibility.--
                          ``(i) In general.--Each derivatives clearing 
                      organization shall establish--
                                    ``(I) appropriate admission and 
                                continuing eligibility standards 
                                (including sufficient financial 
                                resources and operational capacity to 
                                meet obligations arising from 
                                participation in the derivatives 
                                clearing organization) for members of, 
                                and participants in, the derivatives 
                                clearing organization; and
                                    ``(II) appropriate standards for 
                                determining the eligibility of 
                                agreements, contracts, or transactions 
                                submitted to the derivatives clearing 
                                organization for clearing.
                          ``(ii) Required procedures.--Each derivatives 
                      clearing organization shall establish and 
                      implement procedures to verify, on an ongoing 
                      basis, the compliance of each participation and 
                      membership requirement of the derivatives clearing 
                      organization.
                          ``(iii) Requirements.--The participation and 
                      membership requirements of each derivatives 
                      clearing organization shall--
                                    ``(I) be objective;
                                    ``(II) be publicly disclosed; and
                                    ``(III) permit fair and open access.
                    ``(D) Risk management.--
                          ``(i) In general.--Each derivatives clearing 
                      organization shall ensure that the derivatives 
                      clearing organization possesses the ability to 
                      manage the risks associated with discharging the 
                      responsibilities of the derivatives clearing 
                      organization through the use of appropriate tools 
                      and procedures.
                          ``(ii) Measurement of credit exposure.--Each 
                      derivatives clearing organization shall--
                                    ``(I) not less than once during each 
                                business day of the derivatives clearing 
                                organization,

[[Page 124 STAT. 1689]]

                                measure the credit exposures of the 
                                derivatives clearing organization to 
                                each member and participant of the 
                                derivatives clearing organization; and
                                    ``(II) monitor each exposure 
                                described in subclause (I) periodically 
                                during the business day of the 
                                derivatives clearing organization.
                          ``(iii) Limitation of exposure to potential 
                      losses from defaults.--Each derivatives clearing 
                      organization, through margin requirements and 
                      other risk control mechanisms, shall limit the 
                      exposure of the derivatives clearing organization 
                      to potential losses from defaults by members and 
                      participants of the derivatives clearing 
                      organization to ensure that--
                                    ``(I) the operations of the 
                                derivatives clearing organization would 
                                not be disrupted; and
                                    ``(II) nondefaulting members or 
                                participants would not be exposed to 
                                losses that nondefaulting members or 
                                participants cannot anticipate or 
                                control.
                          ``(iv) Margin requirements.--The margin 
                      required from each member and participant of a 
                      derivatives clearing organization shall be 
                      sufficient to cover potential exposures in normal 
                      market conditions.
                          ``(v) Requirements regarding models and 
                      parameters.--Each model and parameter used in 
                      setting margin requirements under clause (iv) 
                      shall be--
                                    ``(I) risk-based; and
                                    ``(II) reviewed on a regular basis.
                    ``(E) Settlement procedures.--Each derivatives 
                clearing organization shall--
                          ``(i) complete money settlements on a timely 
                      basis (but not less frequently than once each 
                      business day);
                          ``(ii) employ money settlement arrangements to 
                      eliminate or strictly limit the exposure of the 
                      derivatives clearing organization to settlement 
                      bank risks (including credit and liquidity risks 
                      from the use of banks to effect money 
                      settlements);
                          ``(iii) ensure that money settlements are 
                      final when effected;
                          ``(iv) maintain an accurate record of the flow 
                      of funds associated with each money settlement;
                          ``(v) possess the ability to comply with each 
                      term and condition of any permitted netting or 
                      offset arrangement with any other clearing 
                      organization;
                          ``(vi) regarding physical settlements, 
                      establish rules that clearly state each obligation 
                      of the derivatives clearing organization with 
                      respect to physical deliveries; and
                          ``(vii) ensure that each risk arising from an 
                      obligation described in clause (vi) is identified 
                      and managed.
                    ``(F) Treatment of funds.--
                          ``(i) Required standards and procedures.--Each 
                      derivatives clearing organization shall establish 
                      standards and procedures that are designed to 
                      protect and ensure the safety of member and 
                      participant funds and assets.

[[Page 124 STAT. 1690]]

                          ``(ii) Holding of funds and assets.--Each 
                      derivatives clearing organization shall hold 
                      member and participant funds and assets in a 
                      manner by which to minimize the risk of loss or of 
                      delay in the access by the derivatives clearing 
                      organization to the assets and funds.
                          ``(iii) Permissible investments.--Funds and 
                      assets invested by a derivatives clearing 
                      organization shall be held in instruments with 
                      minimal credit, market, and liquidity risks.
                    ``(G) Default rules and procedures.--
                          ``(i) In general.--Each derivatives clearing 
                      organization shall have rules and procedures 
                      designed to allow for the efficient, fair, and 
                      safe management of events during which members or 
                      participants--
                                    ``(I) become insolvent; or
                                    ``(II) otherwise default on the 
                                obligations of the members or 
                                participants to the derivatives clearing 
                                organization.
                          ``(ii) Default procedures.--Each derivatives 
                      clearing organization shall--
                                    ``(I) clearly state the default 
                                procedures of the derivatives clearing 
                                organization;
                                    ``(II) <<NOTE: Public 
                                information.>>  make publicly available 
                                the default rules of the derivatives 
                                clearing organization; and
                                    ``(III) ensure that the derivatives 
                                clearing organization may take timely 
                                action--
                                            ``(aa) to contain losses and 
                                        liquidity pressures; and
                                            ``(bb) to continue meeting 
                                        each obligation of the 
                                        derivatives clearing 
                                        organization.
                    ``(H) Rule enforcement.--Each derivatives clearing 
                organization shall--
                          ``(i) maintain adequate arrangements and 
                      resources for--
                                    ``(I) the effective monitoring and 
                                enforcement of compliance with the rules 
                                of the derivatives clearing 
                                organization; and
                                    ``(II) the resolution of disputes;
                          ``(ii) have the authority and ability to 
                      discipline, limit, suspend, or terminate the 
                      activities of a member or participant due to a 
                      violation by the member or participant of any rule 
                      of the derivatives clearing organization; and
                          ``(iii) <<NOTE: Reports.>>  report to the 
                      Commission regarding rule enforcement activities 
                      and sanctions imposed against members and 
                      participants as provided in clause (ii).
                    ``(I) System safeguards.--Each derivatives clearing 
                organization shall--
                          ``(i) establish and maintain a program of risk 
                      analysis and oversight to identify and minimize 
                      sources of operational risk through the 
                      development of appropriate controls and 
                      procedures, and automated systems, that are 
                      reliable, secure, and have adequate scalable 
                      capacity;

[[Page 124 STAT. 1691]]

                          ``(ii) <<NOTE: Procedures.>>  establish and 
                      maintain emergency procedures, backup facilities, 
                      and a plan for disaster recovery that allows for--
                                    ``(I) the timely recovery and 
                                resumption of operations of the 
                                derivatives clearing organization; and
                                    ``(II) the fulfillment of each 
                                obligation and responsibility of the 
                                derivatives clearing organization; and
                          ``(iii) <<NOTE: Tests.>>  periodically conduct 
                      tests to verify that the backup resources of the 
                      derivatives clearing organization are sufficient 
                      to ensure daily processing, clearing, and 
                      settlement.
                    ``(J) Reporting.--Each derivatives clearing 
                organization shall provide to the Commission all 
                information that the Commission determines to be 
                necessary to conduct oversight of the derivatives 
                clearing organization.
                    ``(K) Recordkeeping.--Each derivatives clearing 
                organization shall maintain records of all activities 
                related to the business of the derivatives clearing 
                organization as a derivatives clearing organization--
                          ``(i) in a form and manner that is acceptable 
                      to the Commission; and
                          ``(ii) <<NOTE: Time period.>>  for a period of 
                      not less than 5 years.
                    ``(L) Public information.--
                          ``(i) In general.--Each derivatives clearing 
                      organization shall provide to market participants 
                      sufficient information to enable the market 
                      participants to identify and evaluate accurately 
                      the risks and costs associated with using the 
                      services of the derivatives clearing organization.
                          ``(ii) Availability of information.--Each 
                      derivatives clearing organization shall make 
                      information concerning the rules and operating and 
                      default procedures governing the clearing and 
                      settlement systems of the derivatives clearing 
                      organization available to market participants.
                          ``(iii) Public disclosure.--Each derivatives 
                      clearing organization shall disclose publicly and 
                      to the Commission information concerning--
                                    ``(I) the terms and conditions of 
                                each contract, agreement, and 
                                transaction cleared and settled by the 
                                derivatives clearing organization;
                                    ``(II) each clearing and other fee 
                                that the derivatives clearing 
                                organization charges the members and 
                                participants of the derivatives clearing 
                                organization;
                                    ``(III) the margin-setting 
                                methodology, and the size and 
                                composition, of the financial resource 
                                package of the derivatives clearing 
                                organization;
                                    ``(IV) daily settlement prices, 
                                volume, and open interest for each 
                                contract settled or cleared by the 
                                derivatives clearing organization; and
                                    ``(V) any other matter relevant to 
                                participation in the settlement and 
                                clearing activities of the derivatives 
                                clearing organization.

[[Page 124 STAT. 1692]]

                    ``(M) Information-sharing.--Each derivatives 
                clearing organization shall--
                          ``(i) <<NOTE: Contracts.>>  enter into, and 
                      abide by the terms of, each appropriate and 
                      applicable domestic and international information-
                      sharing agreement; and
                          ``(ii) use relevant information obtained from 
                      each agreement described in clause (i) in carrying 
                      out the risk management program of the derivatives 
                      clearing organization.
                    ``(N) Antitrust considerations.--Unless necessary or 
                appropriate to achieve the purposes of this Act, a 
                derivatives clearing organization shall not--
                          ``(i) adopt any rule or take any action that 
                      results in any unreasonable restraint of trade; or
                          ``(ii) impose any material anticompetitive 
                      burden.
                    ``(O) Governance fitness standards.--
                          ``(i) Governance arrangements.--Each 
                      derivatives clearing organization shall establish 
                      governance arrangements that are transparent--
                                    ``(I) to fulfill public interest 
                                requirements; and
                                    ``(II) to permit the consideration 
                                of the views of owners and participants.
                          ``(ii) Fitness standards.--Each derivatives 
                      clearing organization shall establish and enforce 
                      appropriate fitness standards for--
                                    ``(I) directors;
                                    ``(II) members of any disciplinary 
                                committee;
                                    ``(III) members of the derivatives 
                                clearing organization;
                                    ``(IV) any other individual or 
                                entity with direct access to the 
                                settlement or clearing activities of the 
                                derivatives clearing organization; and
                                    ``(V) any party affiliated with any 
                                individual or entity described in this 
                                clause.
                    ``(P) Conflicts of interest.--Each derivatives 
                clearing organization shall--
                          ``(i) <<NOTE: Regulations.>>  establish and 
                      enforce rules to minimize conflicts of interest in 
                      the decision-making process of the derivatives 
                      clearing organization; and
                          ``(ii) establish a process for resolving 
                      conflicts of interest described in clause (i).
                    ``(Q) Composition of governing boards.--Each 
                derivatives clearing organization shall ensure that the 
                composition of the governing board or committee of the 
                derivatives clearing organization includes market 
                participants.
                    ``(R) Legal risk.--Each derivatives clearing 
                organization shall have a well-founded, transparent, and 
                enforceable legal framework for each aspect of the 
                activities of the derivatives clearing organization.''.

    (d) <<NOTE: Regulations. 7 USC 7a-1 note.>>  Conflicts of 
Interest.--The Commodity Futures Trading Commission shall adopt rules 
mitigating conflicts of interest in connection with the conduct of 
business by a swap dealer or a major swap participant with a derivatives 
clearing organization, board of trade, or a swap execution facility that 
clears or trades swaps in which the swap dealer or major swap 
participant has a material debt or material equity investment.

[[Page 124 STAT. 1693]]

    (e) Reporting Requirements.--Section 5b of the Commodity Exchange 
Act (7 U.S.C. 7a-1) (as amended by subsection (b)) is amended by adding 
at the end the following:
    ``(k) Reporting Requirements.--
            ``(1) Duty of derivatives clearing organizations.--Each 
        derivatives clearing organization that clears swaps shall 
        provide to the Commission all information that is determined by 
        the Commission to be necessary to perform each responsibility of 
        the Commission under this Act.
            ``(2) Data collection and maintenance requirements.--The 
        Commission shall adopt data collection and maintenance 
        requirements for swaps cleared by derivatives clearing 
        organizations that are comparable to the corresponding 
        requirements for--
                    ``(A) swaps data reported to swap data repositories; 
                and
                    ``(B) swaps traded on swap execution facilities.
            ``(3) Reports on security-based swap agreements to be shared 
        with the securities and exchange commission.--
                    ``(A) In general.--A derivatives clearing 
                organization that clears security-based swap agreements 
                (as defined in section 1a(47)(A)(v)) shall, upon 
                request, open to inspection and examination to the 
                Securities and Exchange Commission all books and records 
                relating to such security-based swap agreements, 
                consistent with the confidentiality and disclosure 
                requirements of section 8.
                    ``(B) Jurisdiction.--Nothing in this paragraph shall 
                affect the exclusive jurisdiction of the Commission to 
                prescribe recordkeeping and reporting requirements for a 
                derivatives clearing organization that is registered 
                with the Commission.
            ``(4) Information sharing.--Subject to section 8, and upon 
        request, the Commission shall share information collected under 
        paragraph (2) with--
                    ``(A) the Board;
                    ``(B) the Securities and Exchange Commission;
                    ``(C) each appropriate prudential regulator;
                    ``(D) the Financial Stability Oversight Council;
                    ``(E) the Department of Justice; and
                    ``(F) any other person that the Commission 
                determines to be appropriate, including--
                          ``(i) foreign financial supervisors (including 
                      foreign futures authorities);
                          ``(ii) foreign central banks; and
                          ``(iii) foreign ministries.
            ``(5) Confidentiality and indemnification agreement.--Before 
        the Commission may share information with any entity described 
        in paragraph (4)--
                    ``(A) the Commission shall receive a written 
                agreement from each entity stating that the entity shall 
                abide by the confidentiality requirements described in 
                section 8 relating to the information on swap 
                transactions that is provided; and
                    ``(B) each entity shall agree to indemnify the 
                Commission for any expenses arising from litigation 
                relating to the information provided under section 8.

[[Page 124 STAT. 1694]]

            ``(6) Public information.--Each derivatives clearing 
        organization that clears swaps shall provide to the Commission 
        (including any designee of the Commission) information under 
        paragraph (2) in such form and at such frequency as is required 
        by the Commission to comply with the public reporting 
        requirements contained in section 2(a)(13).''.

    (f) Public Disclosure.--Section 8(e) of the Commodity Exchange Act 
(7 U.S.C. 12(e)) is amended in the last sentence--
            (1) by inserting ``, central bank and ministries,'' after 
        ``department'' each place it appears; and
            (2) by striking ``. is a party.'' and inserting ``, is a 
        party.''.

    (g) Legal Certainty for Identified Banking Products.--
            (1) Repeals.--The Legal Certainty for Bank Products Act of 
        2000 (7 U.S.C. 27 et seq.) is amended--
                    (A) by striking sections 404 and 407 (7 U.S.C. 27b, 
                27e);
                    (B) in section 402 (7 U.S.C. 27), by striking 
                subsection (d); and
                    (C) in section 408 (7 U.S.C. 27f)--
                          (i) in subsection (c)--
                                    (I) by striking ``in the case'' and 
                                all that follows through ``a hybrid'' 
                                and inserting ``in the case of a 
                                hybrid'';
                                    (II) by striking ``; or'' and 
                                inserting a period; and
                                    (III) by striking paragraph (2);
                          (ii) by striking subsection (b); and
                          (iii) by redesignating subsection (c) as 
                      subsection (b).
            (2) Legal certainty for bank products act of 2000.--Section 
        403 of the Legal Certainty for Bank Products Act of 2000 (7 
        U.S.C. 27a) is amended to read as follows:
``SEC. 403. EXCLUSION OF IDENTIFIED BANKING PRODUCT.

    ``(a) Exclusion.--Except as provided in subsection (b) or (c)--
            ``(1) the Commodity Exchange Act (7 U.S.C. 1 et seq.) shall 
        not apply to, and the Commodity Futures Trading Commission shall 
        not exercise regulatory authority under the Commodity Exchange 
        Act (7 U.S.C. 1 et seq.) with respect to, an identified banking 
        product; and
            ``(2) the definitions of `security-based swap' in section 
        3(a)(68) of the Securities Exchange Act of 1934 and `security-
        based swap agreement' in section 1a(47)(A)(v) of the Commodity 
        Exchange Act and section 3(a)(78) of the Securities Exchange Act 
        of 1934 do not include any identified bank product.

    ``(b) Exception.--An appropriate Federal banking agency may except 
an identified banking product of a bank under its regulatory 
jurisdiction from the exclusion in subsection (a) if the agency 
determines, in consultation with the Commodity Futures Trading 
Commission and the Securities and Exchange Commission, that the 
product--
            ``(1) would meet the definition of a `swap' under section 
        1a(47) of the Commodity Exchange Act (7 U.S.C. 1a) or a 
        `security-based swap' under that section 3(a)(68) of the 
        Securities Exchange Act of 1934; and
            ``(2) has become known to the trade as a swap or security-
        based swap, or otherwise has been structured as an identified

[[Page 124 STAT. 1695]]

        banking product for the purpose of evading the provisions of the 
        Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act 
        of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act 
        of 1934 (15 U.S.C. 78a et seq.).

    ``(c) Exception.--The exclusions in subsection (a) shall not apply 
to an identified bank product that--
            ``(1) is a product of a bank that is not under the 
        regulatory jurisdiction of an appropriate Federal banking 
        agency;
            ``(2) meets the definition of swap in section 1a(47) of the 
        Commodity Exchange Act or security-based swap in section 
        3(a)(68) of the Securities Exchange Act of 1934; and
            ``(3) has become known to the trade as a swap or security-
        based swap, or otherwise has been structured as an identified 
        banking product for the purpose of evading the provisions of the 
        Commodity Exchange Act (7 U.S.C. 1 et seq.), the Securities Act 
        of 1933 (15 U.S.C. 77a et seq.), or the Securities Exchange Act 
        of 1934 (15 U.S.C. 78a et seq.).''.

    (h) Reducing Clearing Systemic Risk.--Section 5b(f)(1) of the 
Commodity Exchange Act (7 U.S.C. 7a-1(F)(i)) is amended by adding at the 
end the following: ``In order to minimize systemic risk, under no 
circumstances shall a derivatives clearing organization be compelled to 
accept the counterparty credit risk of another clearing organization.''.
SEC. 726. <<NOTE: 15 USC 8323.>>  RULEMAKING ON CONFLICT OF 
                        INTEREST.

    (a) In General.--In <<NOTE: Deadline.>>  order to mitigate conflicts 
of interest, not later than 180 days after the date of enactment of the 
Wall Street Transparency and Accountability Act of 2010, the Commodity 
Futures Trading Commission shall adopt rules which may include numerical 
limits on the control of, or the voting rights with respect to, any 
derivatives clearing organization that clears swaps, or swap execution 
facility or board of trade designated as a contract market that posts 
swaps or makes swaps available for trading, by a bank holding company 
(as defined in section 2 of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841)) with total consolidated assets of $50,000,000,000 or more, 
a nonbank financial company (as defined in section 102) supervised by 
the Board, an affiliate of such a bank holding company or nonbank 
financial company, a swap dealer, major swap participant, or associated 
person of a swap dealer or major swap participant.

    (b) Purposes.--The Commission shall adopt rules if it determines, 
after the review described in subsection (a), that such rules are 
necessary or appropriate to improve the governance of, or to mitigate 
systemic risk, promote competition, or mitigate conflicts of interest in 
connection with a swap dealer or major swap participant's conduct of 
business with, a derivatives clearing organization, contract market, or 
swap execution facility that clears or posts swaps or makes swaps 
available for trading and in which such swap dealer or major swap 
participant has a material debt or equity investment.
    (c) Considerations.--In adopting rules pursuant to this section, the 
Commodity Futures Trading Commission shall consider any conflicts of 
interest arising from the amount of equity owned by a single investor, 
the ability to vote, cause the vote of, or withhold votes entitled to be 
cast on any matters by the holders of the ownership interest, and the 
governance arrangements of any derivatives clearing organization that 
clears swaps, or swap

[[Page 124 STAT. 1696]]

execution facility or board of trade designated as a contract market 
that posts swaps or makes swaps available for trading.
SEC. 727. PUBLIC REPORTING OF SWAP TRANSACTION DATA.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is 
amended by adding at the end the following:
            ``(13) Public availability of swap transaction data.--
                    ``(A) Definition of real-time public reporting.--In 
                this paragraph, the term `real-time public reporting' 
                means to report data relating to a swap transaction, 
                including price and volume, as soon as technologically 
                practicable after the time at which the swap transaction 
                has been executed.
                    ``(B) Purpose.--The purpose of this section is to 
                authorize the Commission to make swap transaction and 
                pricing data available to the public in such form and at 
                such times as the Commission determines appropriate to 
                enhance price discovery.
                    ``(C) General rule.--The Commission is authorized 
                and required to provide by rule for the public 
                availability of swap transaction and pricing data as 
                follows:
                          ``(i) With respect to those swaps that are 
                      subject to the mandatory clearing requirement 
                      described in subsection (h)(1) (including those 
                      swaps that are excepted from the requirement 
                      pursuant to subsection (h)(7)), the Commission 
                      shall require real-time public reporting for such 
                      transactions.
                          ``(ii) With respect to those swaps that are 
                      not subject to the mandatory clearing requirement 
                      described in subsection (h)(1), but are cleared at 
                      a registered derivatives clearing organization, 
                      the Commission shall require real-time public 
                      reporting for such transactions.
                          ``(iii) With respect to swaps that are not 
                      cleared at a registered derivatives clearing 
                      organization and which are reported to a swap data 
                      repository or the Commission under subsection 
                      (h)(6), the Commission shall require real-time 
                      public reporting for such transactions, in a 
                      manner that does not disclose the business 
                      transactions and market positions of any person.
                          ``(iv) With respect to swaps that are 
                      determined to be required to be cleared under 
                      subsection (h)(2) but are not cleared, the 
                      Commission shall require real-time public 
                      reporting for such transactions.
                    ``(D) Registered entities and public reporting.--The 
                Commission may require registered entities to publicly 
                disseminate the swap transaction and pricing data 
                required to be reported under this paragraph.
                    ``(E) Rulemaking required.--With respect to the rule 
                providing for the public availability of transaction and 
                pricing data for swaps described in clauses (i) and (ii) 
                of subparagraph (C), the rule promulgated by the 
                Commission shall contain provisions--
                          ``(i) to ensure such information does not 
                      identify the participants;

[[Page 124 STAT. 1697]]

                          ``(ii) <<NOTE: Criteria.>> to specify the 
                      criteria for determining what constitutes a large 
                      notional swap transaction (block trade) for 
                      particular markets and contracts;
                          ``(iii) to specify the appropriate time delay 
                      for reporting large notional swap transactions 
                      (block trades) to the public; and
                          ``(iv) that take into account whether the 
                      public disclosure will materially reduce market 
                      liquidity.
                    ``(F) Timeliness of reporting.--Parties to a swap 
                (including agents of the parties to a swap) shall be 
                responsible for reporting swap transaction information 
                to the appropriate registered entity in a timely manner 
                as may be prescribed by the Commission.
                    ``(G) Reporting of swaps to registered swap data 
                repositories.--Each swap (whether cleared or uncleared) 
                shall be reported to a registered swap data repository.
            ``(14) Semiannual and annual public reporting of aggregate 
        swap data.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall issue a written report on a 
                semiannual and annual basis to make available to the 
                public information relating to--
                          ``(i) the trading and clearing in the major 
                      swap categories; and
                          ``(ii) the market participants and 
                      developments in new products.
                    ``(B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          ``(i) use information from swap data 
                      repositories and derivatives clearing 
                      organizations; and
                          ``(ii) consult with the Office of the 
                      Comptroller of the Currency, the Bank for 
                      International Settlements, and such other 
                      regulatory bodies as may be necessary.
                    ``(C) Authority of the commission.--The Commission 
                may, by rule, regulation, or order, delegate the public 
                reporting responsibilities of the Commission under this 
                paragraph in accordance with such terms and conditions 
                as the Commission determines to be appropriate and in 
                the public interest.''.
SEC. 728. SWAP DATA REPOSITORIES.

    The Commodity Exchange Act is amended by inserting after section 20 
(7 U.S.C. 24) the following:
``SEC. 21. <<NOTE: 7 USC 24a.>>  SWAP DATA REPOSITORIES.

    ``(a) Registration Requirement.--
            ``(1) Requirement; authority of derivatives clearing 
        organization.--
                    ``(A) In general.--It shall be unlawful for any 
                person, unless registered with the Commission, directly 
                or indirectly to make use of the mails or any means or 
                instrumentality of interstate commerce to perform the 
                functions of a swap data repository.
                    ``(B) Registration of derivatives clearing 
                organizations.--A derivatives clearing organization may 
                register as a swap data repository.

[[Page 124 STAT. 1698]]

            ``(2) Inspection and examination.--Each registered swap data 
        repository shall be subject to inspection and examination by any 
        representative of the Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a swap data repository, the swap data 
                repository shall comply with--
                          ``(i) the requirements and core principles 
                      described in this section; and
                          ``(ii) any requirement that the Commission may 
                      impose by rule or regulation pursuant to section 
                      8a(5).
                    ``(B) Reasonable discretion of swap data 
                repository.--Unless otherwise determined by the 
                Commission by rule or regulation, a swap data repository 
                described in subparagraph (A) shall have reasonable 
                discretion in establishing the manner in which the swap 
                data repository complies with the core principles 
                described in this section.

    ``(b) Standard Setting.--
            ``(1) Data identification.--
                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall prescribe standards that 
                specify the data elements for each swap that shall be 
                collected and maintained by each registered swap data 
                repository.
                    ``(B) Requirement.--In carrying out subparagraph 
                (A), the Commission shall prescribe consistent data 
                element standards applicable to registered entities and 
                reporting counterparties.
            ``(2) Data collection and maintenance.--The Commission shall 
        prescribe data collection and data maintenance standards for 
        swap data repositories.
            ``(3) Comparability.--The standards prescribed by the 
        Commission under this subsection shall be comparable to the data 
        standards imposed by the Commission on derivatives clearing 
        organizations in connection with their clearing of swaps.

    ``(c) Duties.--A swap data repository shall--
            ``(1) accept data prescribed by the Commission for each swap 
        under subsection (b);
            ``(2) confirm with both counterparties to the swap the 
        accuracy of the data that was submitted;
            ``(3) maintain the data described in paragraph (1) in such 
        form, in such manner, and for such period as may be required by 
        the Commission;
            ``(4)(A) provide direct electronic access to the Commission 
        (or any designee of the Commission, including another registered 
        entity); and
            ``(B) provide the information described in paragraph (1) in 
        such form and at such frequency as the Commission may require to 
        comply with the public reporting requirements contained in 
        section 2(a)(13);
            ``(5) at the direction of the Commission, establish 
        automated systems for monitoring, screening, and analyzing swap 
        data, including compliance and frequency of end user clearing 
        exemption claims by individual and affiliated entities;
            ``(6) maintain the privacy of any and all swap transaction 
        information that the swap data repository receives from a swap 
        dealer, counterparty, or any other registered entity; and

[[Page 124 STAT. 1699]]

            ``(7) on a confidential basis pursuant to section 8, upon 
        request, and after notifying the Commission of the request, make 
        available all data obtained by the swap data repository, 
        including individual counterparty trade and position data, to--
                    ``(A) each appropriate prudential regulator;
                    ``(B) the Financial Stability Oversight Council;
                    ``(C) the Securities and Exchange Commission;
                    ``(D) the Department of Justice; and
                    ``(E) any other person that the Commission 
                determines to be appropriate, including--
                          ``(i) foreign financial supervisors (including 
                      foreign futures authorities);
                          ``(ii) foreign central banks; and
                          ``(iii) foreign ministries; and
            ``(8) establish and maintain emergency procedures, backup 
        facilities, and a plan for disaster recovery that allows for the 
        timely recovery and resumption of operations and the fulfillment 
        of the responsibilities and obligations of the organization.

    ``(d) Confidentiality and Indemnification Agreement.--Before the 
swap data repository may share information with any entity described in 
subsection (c)(7)--
            ``(1) the swap data repository shall receive a written 
        agreement from each entity stating that the entity shall abide 
        by the confidentiality requirements described in section 8 
        relating to the information on swap transactions that is 
        provided; and
            ``(2) each entity shall agree to indemnify the swap data 
        repository and the Commission for any expenses arising from 
        litigation relating to the information provided under section 8.

    ``(e) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap data repository shall designate 
        an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the swap data repository;
                    ``(B) review the compliance of the swap data 
                repository with respect to the requirements and core 
                principles described in this section;
                    ``(C) in consultation with the board of the swap 
                data repository, a body performing a function similar to 
                the board of the swap data repository, or the senior 
                officer of the swap data repository, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to agreements, contracts, or 
                transactions, including each rule prescribed by the 
                Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                          ``(i) compliance office review;
                          ``(ii) look-back;
                          ``(iii) internal or external audit finding;
                          ``(iv) self-reported error; or

[[Page 124 STAT. 1700]]

                          ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                          ``(i) the compliance of the swap data 
                      repository of the chief compliance officer with 
                      respect to this Act (including regulations); and
                          ``(ii) each policy and procedure of the swap 
                      data repository of the chief compliance officer 
                      (including the code of ethics and conflict of 
                      interest policies of the swap data repository).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          ``(i) accompany each appropriate financial 
                      report of the swap data repository that is 
                      required to be furnished to the Commission 
                      pursuant to this section; and
                          ``(ii) <<NOTE: Certification.>>  include a 
                      certification that, under penalty of law, the 
                      compliance report is accurate and complete.

    ``(f) Core Principles Applicable To Swap Data Repositories.--
            ``(1) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, a swap data 
        repository shall not--
                    ``(A) adopt any rule or take any action that results 
                in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                the trading, clearing, or reporting of transactions.
            ``(2) Governance arrangements.--Each swap data repository 
        shall establish governance arrangements that are transparent--
                    ``(A) to fulfill public interest requirements; and
                    ``(B) to support the objectives of the Federal 
                Government, owners, and participants.
            ``(3) Conflicts of interest.--Each swap data repository 
        shall--
                    ``(A) <<NOTE: Regulations.>>  establish and enforce 
                rules to minimize conflicts of interest in the decision-
                making process of the swap data repository; and
                    ``(B) establish a process for resolving conflicts of 
                interest described in subparagraph (A).
            ``(4) Additional duties developed by commission.--
                    ``(A) In general.--The Commission may develop 1 or 
                more additional duties applicable to swap data 
                repositories.
                    ``(B) Consideration of evolving standards.--In 
                developing additional duties under subparagraph (A), the 
                Commission may take into consideration any evolving 
                standard of the United States or the international 
                community.
                    ``(C) Additional duties for commission designees.--
                The Commission shall establish additional duties for any 
                registrant described in section 1a(48) in order to 
                minimize

[[Page 124 STAT. 1701]]

                conflicts of interest, protect data, ensure compliance, 
                and guarantee the safety and security of the swap data 
                repository.

    ``(g) Required Registration for Swap Data Repositories.--Any person 
that is required to be registered as a swap data repository under this 
section shall register with the Commission regardless of whether that 
person is also licensed as a bank or registered with the Securities and 
Exchange Commission as a swap data repository.
    ``(h) Rules.--The Commission shall adopt rules governing persons 
that are registered under this section.''.
SEC. 729. REPORTING AND RECORDKEEPING.

    The Commodity Exchange Act is amended by inserting after section 
4q <<NOTE: 7 USC 6q.>>  (7 U.S.C. 6o-1) the following:
``SEC. 4r. <<NOTE: 7 USC 6r.>>  REPORTING AND RECORDKEEPING FOR 
                      UNCLEARED SWAPS.

    ``(a) Required Reporting of Swaps Not Accepted by Any Derivatives 
Clearing Organization.--
            ``(1) In general.--Each swap that is not accepted for 
        clearing by any derivatives clearing organization shall be 
        reported to--
                    ``(A) a swap data repository described in section 
                21; or
                    ``(B) in the case in which there is no swap data 
                repository that would accept the swap, to the Commission 
                pursuant to this section within such time period as the 
                Commission may by rule or regulation prescribe.
            ``(2) Transition rule for preenactment swaps.--
                    ``(A) Swaps entered into before the date of 
                enactment of the wall street transparency and 
                accountability act of 2010.--Each swap entered into 
                before the date of enactment of the Wall Street 
                Transparency and Accountability Act of 2010, the terms 
                of which have not expired as of the date of enactment of 
                that Act, shall be reported to a registered swap data 
                repository or the Commission by a date that is not later 
                than--
                          ``(i) 30 days after issuance of the interim 
                      final rule; or
                          ``(ii) such other period as the Commission 
                      determines to be appropriate.
                    ``(B) Commission rulemaking.--The Commission shall 
                promulgate an interim final rule within 90 days of the 
                date of enactment of this section providing for the 
                reporting of each swap entered into before the date of 
                enactment as referenced in subparagraph (A).
                    ``(C) Effective date.--The reporting provisions 
                described in this section shall be effective upon the 
                enactment of this section.
            ``(3) Reporting obligations.--
                    ``(A) Swaps in which only 1 counterparty is a swap 
                dealer or major swap participant.--With respect to a 
                swap in which only 1 counterparty is a swap dealer or 
                major swap participant, the swap dealer or major swap 
                participant shall report the swap as required under 
                paragraphs (1) and (2).
                    ``(B) Swaps in which 1 counterparty is a swap dealer 
                and the other a major swap participant.--With

[[Page 124 STAT. 1702]]

                respect to a swap in which 1 counterparty is a swap 
                dealer and the other a major swap participant, the swap 
                dealer shall report the swap as required under 
                paragraphs (1) and (2).
                    ``(C) Other swaps.--With respect to any other swap 
                not described in subparagraph (A) or (B), the 
                counterparties to the swap shall select a counterparty 
                to report the swap as required under paragraphs (1) and 
                (2).

    ``(b) Duties of Certain Individuals.--Any individual or entity that 
enters into a swap shall meet each requirement described in subsection 
(c) if the individual or entity did not--
            ``(1) clear the swap in accordance with section 2(h)(1); or
            ``(2) have the data regarding the swap accepted by a swap 
        data repository in accordance with rules (including timeframes) 
        adopted by the Commission under section 21.

    ``(c) Requirements.--An individual or entity described in subsection 
(b) shall--
            ``(1) upon written request from the Commission, provide 
        reports regarding the swaps held by the individual or entity to 
        the Commission in such form and in such manner as the Commission 
        may request; and
            ``(2) maintain books and records pertaining to the swaps 
        held by the individual or entity in such form, in such manner, 
        and for such period as the Commission may require, which shall 
        be open to inspection by--
                    ``(A) any representative of the Commission;
                    ``(B) an appropriate prudential regulator;
                    ``(C) the Securities and Exchange Commission;
                    ``(D) the Financial Stability Oversight Council; and
                    ``(E) the Department of Justice.

    ``(d) Identical Data.--In prescribing rules under this section, the 
Commission shall require individuals and entities described in 
subsection (b) to submit to the Commission a report that contains data 
that is not less comprehensive than the data required to be collected by 
swap data repositories under section 21.''.
SEC. 730. LARGE SWAP TRADER REPORTING.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding 
after section 4s (as added by section 731) the following:
``SEC. 4t. <<NOTE: 7 USC 6t.>>  LARGE SWAP TRADER REPORTING.

    ``(a) Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), it 
        shall be unlawful for any person to enter into any swap that the 
        Commission determines to perform a significant price discovery 
        function with respect to registered entities if--
                    ``(A) the person directly or indirectly enters into 
                the swap during any 1 day in an amount equal to or in 
                excess of such amount as shall be established 
                periodically by the Commission; and
                    ``(B) the person directly or indirectly has or 
                obtains a position in the swap equal to or in excess of 
                such amount as shall be established periodically by the 
                Commission.
            ``(2) Exception.--Paragraph (1) shall not apply if--
                    ``(A) the person files or causes to be filed with 
                the properly designated officer of the Commission such 
                reports

[[Page 124 STAT. 1703]]

                regarding any transactions or positions described in 
                subparagraphs (A) and (B) of paragraph (1) as the 
                Commission may require by rule or regulation; and
                    ``(B) in accordance with the rules and regulations 
                of the Commission, the person keeps books and records of 
                all such swaps and any transactions and positions in any 
                related commodity traded on or subject to the rules of 
                any designated contract market or swap execution 
                facility, and of cash or spot transactions in, 
                inventories of, and purchase and sale commitments of, 
                such a commodity.

    ``(b) <<NOTE: Records.>>  Requirements.--
            ``(1) In general.--Books and records described in subsection 
        (a)(2)(B) shall--
                    ``(A) show such complete details concerning all 
                transactions and positions as the Commission may 
                prescribe by rule or regulation;
                    ``(B) be open at all times to inspection and 
                examination by any representative of the Commission; and
                    ``(C) be open at all times to inspection and 
                examination by the Securities and Exchange Commission, 
                to the extent such books and records relate to 
                transactions in swaps (as that term is defined in 
                section 1a(47)(A)(v)), and consistent with the 
                confidentiality and disclosure requirements of section 
                8.
            ``(2) Jurisdiction.--Nothing in paragraph (1) shall affect 
        the exclusive jurisdiction of the Commission to prescribe 
        recordkeeping and reporting requirements for large swap traders 
        under this section.

    ``(c) Applicability.--For purposes of this section, the swaps, 
futures, and cash or spot transactions and positions of any person shall 
include the swaps, futures, and cash or spot transactions and positions 
of any persons directly or indirectly controlled by the person.
    ``(d) Significant Price Discovery Function.--In making a 
determination as to whether a swap performs or affects a significant 
price discovery function with respect to registered entities, the 
Commission shall consider the factors described in section 4a(a)(3).''.
SEC. 731. REGISTRATION AND REGULATION OF SWAP DEALERS AND MAJOR 
                        SWAP PARTICIPANTS.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by 
inserting after section 4r (as added by section 729) the following:
``SEC. 4s. <<NOTE: 7 USC 6s.>>  REGISTRATION AND REGULATION OF 
                      SWAP DEALERS AND MAJOR SWAP PARTICIPANTS.

    ``(a) Registration.--
            ``(1) Swap dealers.--It shall be unlawful for any person to 
        act as a swap dealer unless the person is registered as a swap 
        dealer with the Commission.
            ``(2) Major swap participants.--It shall be unlawful for any 
        person to act as a major swap participant unless the person is 
        registered as a major swap participant with the Commission.

    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a swap dealer 
        or major swap participant by filing a registration application 
        with the Commission.
            ``(2) Contents.--

[[Page 124 STAT. 1704]]

                    ``(A) In general.--The application shall be made in 
                such form and manner as prescribed by the Commission, 
                and shall contain such information, as the Commission 
                considers necessary concerning the business in which the 
                applicant is or will be engaged.
                    ``(B) Continual reporting.--A person that is 
                registered as a swap dealer or major swap participant 
                shall continue to submit to the Commission reports that 
                contain such information pertaining to the business of 
                the person as the Commission may require.
            ``(3) Expiration.--Each registration under this section 
        shall expire at such time as the Commission may prescribe by 
        rule or regulation.
            ``(4) Rules.--Except as provided in subsections (d) and (e), 
        the Commission may prescribe rules applicable to swap dealers 
        and major swap participants, including rules that limit the 
        activities of swap dealers and major swap participants.
            ``(5) Transition.--Rules <<NOTE: Regulations. Deadline.>>  
        under this section shall provide for the registration of swap 
        dealers and major swap participants not later than 1 year after 
        the date of enactment of the Wall Street Transparency and 
        Accountability Act of 2010.
            ``(6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or order, 
        it shall be unlawful for a swap dealer or a major swap 
        participant to permit any person associated with a swap dealer 
        or a major swap participant who is subject to a statutory 
        disqualification to effect or be involved in effecting swaps on 
        behalf of the swap dealer or major swap participant, if the swap 
        dealer or major swap participant knew, or in the exercise of 
        reasonable care should have known, of the statutory 
        disqualification.

    ``(c) Dual Registration.--
            ``(1) Swap dealer.--Any person that is required to be 
        registered as a swap dealer under this section shall register 
        with the Commission regardless of whether the person also is a 
        depository institution or is registered with the Securities and 
        Exchange Commission as a security-based swap dealer.
            ``(2) Major swap participant.--Any person that is required 
        to be registered as a major swap participant under this section 
        shall register with the Commission regardless of whether the 
        person also is a depository institution or is registered with 
        the Securities and Exchange Commission as a major security-based 
        swap participant.

    ``(d) Rulemakings.--
            ``(1) In general.--The Commission shall adopt rules for 
        persons that are registered as swap dealers or major swap 
        participants under this section.
            ``(2) Exception for prudential requirements.--
                    ``(A) In general.--The Commission may not prescribe 
                rules imposing prudential requirements on swap dealers 
                or major swap participants for which there is a 
                prudential regulator.
                    ``(B) Applicability.--Subparagraph (A) does not 
                limit the authority of the Commission to prescribe rules 
                as directed under this section.

    ``(e) Capital and Margin Requirements.--
            ``(1) <<NOTE: Regulations.>>  In general.--

[[Page 124 STAT. 1705]]

                    ``(A) Swap dealers and major swap participants that 
                are banks.--Each registered swap dealer and major swap 
                participant for which there is a prudential regulator 
                shall meet such minimum capital requirements and minimum 
                initial and variation margin requirements as the 
                prudential regulator shall by rule or regulation 
                prescribe under paragraph (2)(A).
                    ``(B) Swap dealers and major swap participants that 
                are not banks.--Each registered swap dealer and major 
                swap participant for which there is not a prudential 
                regulator shall meet such minimum capital requirements 
                and minimum initial and variation margin requirements as 
                the Commission shall by rule or regulation prescribe 
                under paragraph (2)(B).
            ``(2) Rules.--
                    ``(A) Swap dealers and major swap participants that 
                are banks.--The prudential regulators, in consultation 
                with the Commission and the Securities and Exchange 
                Commission, shall jointly adopt rules for swap dealers 
                and major swap participants, with respect to their 
                activities as a swap dealer or major swap participant, 
                for which there is a prudential regulator imposing--
                          ``(i) capital requirements; and
                          ``(ii) both initial and variation margin 
                      requirements on all swaps that are not cleared by 
                      a registered derivatives clearing organization.
                    ``(B) Swap dealers and major swap participants that 
                are not banks.--The Commission shall adopt rules for 
                swap dealers and major swap participants, with respect 
                to their activities as a swap dealer or major swap 
                participant, for which there is not a prudential 
                regulator imposing--
                          ``(i) capital requirements; and
                          ``(ii) both initial and variation margin 
                      requirements on all swaps that are not cleared by 
                      a registered derivatives clearing organization.
                    ``(C) Capital.--In setting capital requirements for 
                a person that is designated as a swap dealer or a major 
                swap participant for a single type or single class or 
                category of swap or activities, the prudential regulator 
                and the Commission shall take into account the risks 
                associated with other types of swaps or classes of swaps 
                or categories of swaps engaged in and the other 
                activities conducted by that person that are not 
                otherwise subject to regulation applicable to that 
                person by virtue of the status of the person as a swap 
                dealer or a major swap participant.
            ``(3) Standards for capital and margin.--
                    ``(A) In general.--To offset the greater risk to the 
                swap dealer or major swap participant and the financial 
                system arising from the use of swaps that are not 
                cleared, the requirements imposed under paragraph (2) 
                shall--
                          ``(i) help ensure the safety and soundness of 
                      the swap dealer or major swap participant; and
                          ``(ii) be appropriate for the risk associated 
                      with the non-cleared swaps held as a swap dealer 
                      or major swap participant.
                    ``(B) Rule of construction.--

[[Page 124 STAT. 1706]]

                          ``(i) In general.--Nothing in this section 
                      shall limit, or be construed to limit, the 
                      authority--
                                    ``(I) of the Commission to set 
                                financial responsibility rules for a 
                                futures commission merchant or 
                                introducing broker registered pursuant 
                                to section 4f(a) (except for section 
                                4f(a)(3)) in accordance with section 
                                4f(b); or
                                    ``(II) of the Securities and 
                                Exchange Commission to set financial 
                                responsibility rules for a broker or 
                                dealer registered pursuant to section 
                                15(b) of the Securities Exchange Act of 
                                1934 (15 U.S.C. 78o(b)) (except for 
                                section 15(b)(11) of that Act (15 U.S.C. 
                                78o(b)(11)) in accordance with section 
                                15(c)(3) of the Securities Exchange Act 
                                of 1934 (15 U.S.C. 78o(c)(3)).
                          ``(ii) Futures commission merchants and other 
                      dealers.--A futures commission merchant, 
                      introducing broker, broker, or dealer shall 
                      maintain sufficient capital to comply with the 
                      stricter of any applicable capital requirements to 
                      which such futures commission merchant, 
                      introducing broker, broker, or dealer is subject 
                      to under this Act or the Securities Exchange Act 
                      of 1934 (15 U.S.C. 78a et seq.).
                    ``(C) Margin requirements.--In prescribing margin 
                requirements under this subsection, the prudential 
                regulator with respect to swap dealers and major swap 
                participants for which it is the prudential regulator 
                and the Commission with respect to swap dealers and 
                major swap participants for which there is no prudential 
                regulator shall permit the use of noncash collateral, as 
                the regulator or the Commission determines to be 
                consistent with--
                          ``(i) preserving the financial integrity of 
                      markets trading swaps; and
                          ``(ii) preserving the stability of the United 
                      States financial system.
                    ``(D) Comparability of capital and margin 
                requirements.--
                          ``(i) In general.--
                      The <<NOTE: Consultation.>>  prudential 
                      regulators, the Commission, and the Securities and 
                      Exchange Commission shall periodically (but not 
                      less frequently than annually) consult on minimum 
                      capital requirements and minimum initial and 
                      variation margin requirements.
                          ``(ii) Comparability.--The entities described 
                      in clause (i) shall, to the maximum extent 
                      practicable, establish and maintain comparable 
                      minimum capital requirements and minimum initial 
                      and variation margin requirements, including the 
                      use of non cash collateral, for--
                                    ``(I) swap dealers; and
                                    ``(II) major swap participants.

    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant--

[[Page 124 STAT. 1707]]

                    ``(A) <<NOTE: Reports. Regulations.>>  shall make 
                such reports as are required by the Commission by rule 
                or regulation regarding the transactions and positions 
                and financial condition of the registered swap dealer or 
                major swap participant;
                    ``(B)(i) for which there is a prudential regulator, 
                shall keep books and records of all activities related 
                to the business as a swap dealer or major swap 
                participant in such form and manner and for such period 
                as may be prescribed by the Commission by rule or 
                regulation; and
                    ``(ii) for which there is no prudential regulator, 
                shall keep books and records in such form and manner and 
                for such period as may be prescribed by the Commission 
                by rule or regulation;
                    ``(C) shall keep books and records described in 
                subparagraph (B) open to inspection and examination by 
                any representative of the Commission; and
                    ``(D) shall keep any such books and records relating 
                to swaps defined in section 1a(47)(A)(v) open to 
                inspection and examination by the Securities and 
                Exchange Commission.
            ``(2) Rules.--The Commission shall adopt rules governing 
        reporting and recordkeeping for swap dealers and major swap 
        participants.

    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall maintain daily trading records of the 
        swaps of the registered swap dealer and major swap participant 
        and all related records (including related cash or forward 
        transactions) and recorded communications, including electronic 
        mail, instant messages, and recordings of telephone calls, for 
        such period as may be required by the Commission by rule or 
        regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall require 
        by rule or regulation.
            ``(3) Counterparty records.--Each registered swap dealer and 
        major swap participant shall maintain daily trading records for 
        each counterparty in a manner and form that is identifiable with 
        each swap transaction.
            ``(4) Audit trail.--Each registered swap dealer and major 
        swap participant shall maintain a complete audit trail for 
        conducting comprehensive and accurate trade reconstructions.
            ``(5) Rules.--The Commission shall adopt rules governing 
        daily trading records for swap dealers and major swap 
        participants.

    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with such business conduct 
        standards as prescribed in paragraph (3) and as may be 
        prescribed by the Commission by rule or regulation that relate 
        to--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving swaps (including swaps that are 
                offered but not entered into);
                    ``(B) diligent supervision of the business of the 
                registered swap dealer and major swap participant;
                    ``(C) adherence to all applicable position limits; 
                and

[[Page 124 STAT. 1708]]

                    ``(D) such other matters as the Commission 
                determines to be appropriate.
            ``(2) Responsibilities with respect to special entities.--
                    ``(A) Advising special entities.--A swap dealer or 
                major swap participant that acts as an advisor to a 
                special entity regarding a swap shall comply with the 
                requirements of subparagraph (4) with respect to such 
                Special Entity.
                    ``(B) Entering of swaps with respect to special 
                entities.--A <<NOTE: Compliance.>>  swap dealer that 
                enters into or offers to enter into swap with a Special 
                Entity shall comply with the requirements of 
                subparagraph (5) with respect to such Special Entity.
                    ``(C) Special entity defined.--For purposes of this 
                subsection, the term `special entity' means--
                          ``(i) a Federal agency;
                          ``(ii) a State, State agency, city, county, 
                      municipality, or other political subdivision of a 
                      State;
                          ``(iii) any employee benefit plan, as defined 
                      in section 3 of the Employee Retirement Income 
                      Security Act of 1974 (29 U.S.C. 1002);
                          ``(iv) any governmental plan, as defined in 
                      section 3 of the Employee Retirement Income 
                      Security Act of 1974 (29 U.S.C. 1002); or
                          ``(v) any endowment, including an endowment 
                      that is an organization described in section 
                      501(c)(3) of the Internal Revenue Code of 1986.
            ``(3) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) establish a duty for a swap dealer or major 
                swap participant to verify that any counterparty meets 
                the eligibility standards for an eligible contract 
                participant;
                    ``(B) require disclosure by the swap dealer or major 
                swap participant to any counterparty to the transaction 
                (other than a swap dealer, major swap participant, 
                security-based swap dealer, or major security-based swap 
                participant) of--
                          ``(i) information about the material risks and 
                      characteristics of the swap;
                          ``(ii) any material incentives or conflicts of 
                      interest that the swap dealer or major swap 
                      participant may have in connection with the swap; 
                      and
                          ``(iii)(I) for cleared swaps, upon the request 
                      of the counterparty, receipt of the daily mark of 
                      the transaction from the appropriate derivatives 
                      clearing organization; and
                          ``(II) for uncleared swaps, receipt of the 
                      daily mark of the transaction from the swap dealer 
                      or the major swap participant;
                    ``(C) establish a duty for a swap dealer or major 
                swap participant to communicate in a fair and balanced 
                manner based on principles of fair dealing and good 
                faith; and
                    ``(D) establish such other standards and 
                requirements as the Commission may determine are 
                appropriate in the public interest, for the protection 
                of investors, or otherwise in furtherance of the 
                purposes of this Act.
            ``(4) Special requirements for swap dealers acting as 
        advisors.--

[[Page 124 STAT. 1709]]

                    ``(A) In general.--It shall be unlawful for a swap 
                dealer or major swap participant--
                          ``(i) to employ any device, scheme, or 
                      artifice to defraud any Special Entity or 
                      prospective customer who is a Special Entity;
                          ``(ii) to engage in any transaction, practice, 
                      or course of business that operates as a fraud or 
                      deceit on any Special Entity or prospective 
                      customer who is a Special Entity; or
                          ``(iii) to engage in any act, practice, or 
                      course of business that is fraudulent, deceptive 
                      or manipulative.
                    ``(B) Duty.--Any swap dealer that acts as an advisor 
                to a Special Entity shall have a duty to act in the best 
                interests of the Special Entity.
                    ``(C) Reasonable efforts.--Any swap dealer that acts 
                as an advisor to a Special Entity shall make reasonable 
                efforts to obtain such information as is necessary to 
                make a reasonable determination that any swap 
                recommended by the swap dealer is in the best interests 
                of the Special Entity, including information relating 
                to--
                          ``(i) the financial status of the Special 
                      Entity;
                          ``(ii) the tax status of the Special Entity;
                          ``(iii) the investment or financing objectives 
                      of the Special Entity; and
                          ``(iv) any other information that the 
                      Commission may prescribe by rule or regulation.
            ``(5) Special requirements for swap dealers as 
        counterparties to special entities.--
                    ``(A) Any swap dealer or major swap participant that 
                offers to enter or enters into a swap with a Special 
                Entity shall--
                          ``(i) comply with any duty established by the 
                      Commission for a swap dealer or major swap 
                      participant, with respect to a counterparty that 
                      is an eligible contract participant within the 
                      meaning of subclause (I) or (II) of clause (vii) 
                      of section 1a(18) of this Act, that requires the 
                      swap dealer or major swap participant to have a 
                      reasonable basis to believe that the counterparty 
                      that is a Special Entity has an independent 
                      representative that--
                                    ``(I) has sufficient knowledge to 
                                evaluate the transaction and risks;
                                    ``(II) is not subject to a statutory 
                                disqualification;
                                    ``(III) is independent of the swap 
                                dealer or major swap participant;
                                    ``(IV) undertakes a duty to act in 
                                the best interests of the counterparty 
                                it represents;
                                    ``(V) makes appropriate disclosures;
                                    ``(VI) will provide written 
                                representations to the Special Entity 
                                regarding fair pricing and the 
                                appropriateness of the transaction; and
                                    ``(VII) in the case of employee 
                                benefit plans subject to the Employee 
                                Retirement Income Security act of 1974, 
                                is a fiduciary as defined in section 3 
                                of that Act (29 U.S.C. 1002); and

[[Page 124 STAT. 1710]]

                          ``(ii) before the initiation of the 
                      transaction, disclose to the Special Entity in 
                      writing the capacity in which the swap dealer is 
                      acting; and
                    ``(B) the Commission may establish such other 
                standards and requirements as the Commission may 
                determine are appropriate in the public interest, for 
                the protection of investors, or otherwise in furtherance 
                of the purposes of this Act.
            ``(6) Rules.--The Commission shall prescribe rules under 
        this subsection governing business conduct standards for swap 
        dealers and major swap participants.
            ``(7) Applicability.--This section shall not apply with 
        respect to a transaction that is--
                    ``(A) initiated by a Special Entity on an exchange 
                or swap execution facility; and
                    ``(B) one in which the swap dealer or major swap 
                participant does not know the identity of the 
                counterparty to the transaction.

    ``(i) Documentation Standards.--
            ``(1) In general.--Each registered swap dealer and major 
        swap participant shall conform with such standards as may be 
        prescribed by the Commission by rule or regulation that relate 
        to timely and accurate confirmation, processing, netting, 
        documentation, and valuation of all swaps.
            ``(2) Rules.--The Commission shall adopt rules governing 
        documentation standards for swap dealers and major swap 
        participants.

    ``(j) Duties.--Each registered swap dealer and major swap 
participant at all times shall comply with the following requirements:
            ``(1) Monitoring of trading.--The swap dealer or major swap 
        participant shall monitor its trading in swaps to prevent 
        violations of applicable position limits.
            ``(2) Risk management procedures.--The swap dealer or major 
        swap participant shall establish robust and professional risk 
        management systems adequate for managing the day-to-day business 
        of the swap dealer or major swap participant.
            ``(3) Disclosure of general information.--The swap dealer or 
        major swap participant shall disclose to the Commission and to 
        the prudential regulator for the swap dealer or major swap 
        participant, as applicable, information concerning--
                    ``(A) terms and conditions of its swaps;
                    ``(B) swap trading operations, mechanisms, and 
                practices;
                    ``(C) financial integrity protections relating to 
                swaps; and
                    ``(D) other information relevant to its trading in 
                swaps.
            ``(4) Ability to obtain information.--The swap dealer or 
        major swap participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the prudential regulator for the swap dealer or major 
                swap participant, as applicable, on request.

[[Page 124 STAT. 1711]]

            ``(5) Conflicts of interest.--The swap dealer and major swap 
        participant shall implement conflict-of-interest systems and 
        procedures that--
                    ``(A) establish structural and institutional 
                safeguards to ensure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any commodity or swap or acting in a 
                role of providing clearing activities or making 
                determinations as to accepting clearing customers are 
                separated by appropriate informational partitions within 
                the firm from the review, pressure, or oversight of 
                persons whose involvement in pricing, trading, or 
                clearing activities might potentially bias their 
                judgment or supervision and contravene the core 
                principles of open access and the business conduct 
                standards described in this Act; and
                    ``(B) address such other issues as the Commission 
                determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, a swap dealer 
        or major swap participant shall not--
                    ``(A) adopt any process or take any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
            ``(7) Rules.--The Commission shall prescribe rules under 
        this subsection governing duties of swap dealers and major swap 
        participants.

    ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each swap dealer and major swap 
        participant shall designate an individual to serve as a chief 
        compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the swap dealer or major swap participant;
                    ``(B) review the compliance of the swap dealer or 
                major swap participant with respect to the swap dealer 
                and major swap participant requirements described in 
                this section;
                    ``(C) in consultation with the board of directors, a 
                body performing a function similar to the board, or the 
                senior officer of the organization, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this Act (including 
                regulations) relating to swaps, including each rule 
                prescribed by the Commission under this section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                          ``(i) compliance office review;
                          ``(ii) look-back;
                          ``(iii) internal or external audit finding;
                          ``(iv) self-reported error; or
                          ``(v) validated complaint; and

[[Page 124 STAT. 1712]]

                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                          ``(i) the compliance of the swap dealer or 
                      major swap participant with respect to this Act 
                      (including regulations); and
                          ``(ii) each policy and procedure of the swap 
                      dealer or major swap participant of the chief 
                      compliance officer (including the code of ethics 
                      and conflict of interest policies).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          ``(i) accompany each appropriate financial 
                      report of the swap dealer or major swap 
                      participant that is required to be furnished to 
                      the Commission pursuant to this section; and
                          ``(ii) <<NOTE: Certification.>>  include a 
                      certification that, under penalty of law, the 
                      compliance report is accurate and complete.''.
SEC. 732. CONFLICTS OF INTEREST.

    Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
            (1) by redesignating subsection (c) as subsection (e); and
            (2) by inserting after subsection (b) the following:

    ``(c) <<NOTE: Procedures.>>  Conflicts of Interest.--The Commission 
shall require that futures commission merchants and introducing brokers 
implement conflict-of-interest systems and procedures that--
            ``(1) establish structural and institutional safeguards to 
        ensure that the activities of any person within the firm 
        relating to research or analysis of the price or market for any 
        commodity are separated by appropriate informational partitions 
        within the firm from the review, pressure, or oversight of 
        persons whose involvement in trading or clearing activities 
        might potentially bias the judgment or supervision of the 
        persons; and
            ``(2) address such other issues as the Commission determines 
        to be appropriate.

    ``(d) <<NOTE: Regulations.>>  Designation of Chief Compliance 
Officer.--Each futures commission merchant shall designate an individual 
to serve as its Chief Compliance Officer and perform such duties and 
responsibilities as shall be set forth in regulations to be adopted by 
the Commission or rules to be adopted by a futures association 
registered under section 17.''.
SEC. 733. SWAP EXECUTION FACILITIES.

    The Commodity Exchange Act is amended by inserting after section 5g 
(7 U.S.C. 7b-2) the following:
``SEC. 5h. <<NOTE: 7 USC 7b-3.>>  SWAP EXECUTION FACILITIES.

    ``(a) Registration.--
            ``(1) In general.--No person may operate a facility for the 
        trading or processing of swaps unless the facility is registered 
        as a swap execution facility or as a designated contract market 
        under this section.

[[Page 124 STAT. 1713]]

            ``(2) Dual registration.--Any person that is registered as a 
        swap execution facility under this section shall register with 
        the Commission regardless of whether the person also is 
        registered with the Securities and Exchange Commission as a swap 
        execution facility.

    ``(b) Trading and Trade Processing.--
            ``(1) In general.--Except as specified in paragraph (2), a 
        swap execution facility that is registered under subsection (a) 
        may--
                    ``(A) make available for trading any swap; and
                    ``(B) facilitate trade processing of any swap.
            ``(2) Agricultural swaps.--A swap execution facility may not 
        list for trading or confirm the execution of any swap in an 
        agricultural commodity (as defined by the Commission) except 
        pursuant to a rule or regulation of the Commission allowing the 
        swap under such terms and conditions as the Commission shall 
        prescribe.

    ``(c) Identification of Facility Used To Trade Swaps by Contract 
Markets.--A board of trade that operates a contract market shall, to the 
extent that the board of trade also operates a swap execution facility 
and uses the same electronic trade execution system for listing and 
executing trades of swaps on or through the contract market and the swap 
execution facility, identify whether the electronic trading of such 
swaps is taking place on or through the contract market or the swap 
execution facility.
    ``(d) Rule-writing.--
            ``(1) The Securities and Exchange Commission and Commodity 
        Futures Trading Commission may promulgate rules defining the 
        universe of swaps that can be executed on a swap execution 
        facility. These rules shall take into account the price and 
        nonprice requirements of the counterparties to a swap and the 
        goal of this section as set forth in subsection (e).
            ``(2) For all swaps that are not required to be executed 
        through a swap execution facility as defined in paragraph (1), 
        such trades may be executed through any other available means of 
        interstate commerce.
            ``(3) The Securities and Exchange Commission and Commodity 
        Futures Trading Commission shall update these rules as necessary 
        to account for technological and other innovation.

    ``(e) Rule of Construction.--The goal of this section is to promote 
the trading of swaps on swap execution facilities and to promote pre-
trade price transparency in the swaps market.
    ``(f) <<NOTE: Regulations.>>  Core Principles for Swap Execution 
Facilities.--
            ``(1) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a swap execution facility, the swap 
                execution facility shall comply with--
                          ``(i) the core principles described in this 
                      subsection; and
                          ``(ii) any requirement that the Commission may 
                      impose by rule or regulation pursuant to section 
                      8a(5).
                    ``(B) Reasonable discretion of swap execution 
                facility.--Unless otherwise determined by the Commission 
                by rule or regulation, a swap execution facility

[[Page 124 STAT. 1714]]

                described in subparagraph (A) shall have reasonable 
                discretion in establishing the manner in which the swap 
                execution facility complies with the core principles 
                described in this subsection.
            ``(2) Compliance with rules.--A swap execution facility 
        shall--
                    ``(A) establish and enforce compliance with any rule 
                of the swap execution facility, including--
                          ``(i) the terms and conditions of the swaps 
                      traded or processed on or through the swap 
                      execution facility; and
                          ``(ii) any limitation on access to the swap 
                      execution facility;
                    ``(B) establish and enforce trading, trade 
                processing, and participation rules that will deter 
                abuses and have the capacity to detect, investigate, and 
                enforce those rules, including means--
                          ``(i) to provide market participants with 
                      impartial access to the market; and
                          ``(ii) to capture information that may be used 
                      in establishing whether rule violations have 
                      occurred;
                    ``(C) establish rules governing the operation of the 
                facility, including rules specifying trading procedures 
                to be used in entering and executing orders traded or 
                posted on the facility, including block trades; and
                    ``(D) provide by its rules that when a swap dealer 
                or major swap participant enters into or facilitates a 
                swap that is subject to the mandatory clearing 
                requirement of section 2(h), the swap dealer or major 
                swap participant shall be responsible for compliance 
                with the mandatory trading requirement under section 
                2(h)(8).
            ``(3) Swaps not readily susceptible to manipulation.--The 
        swap execution facility shall permit trading only in swaps that 
        are not readily susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--The swap 
        execution facility shall--
                    ``(A) establish and enforce rules or terms and 
                conditions defining, or specifications detailing--
                          ``(i) trading procedures to be used in 
                      entering and executing orders traded on or through 
                      the facilities of the swap execution facility; and
                          ``(ii) procedures for trade processing of 
                      swaps on or through the facilities of the swap 
                      execution facility; and
                    ``(B) monitor trading in swaps to prevent 
                manipulation, price distortion, and disruptions of the 
                delivery or cash settlement process through 
                surveillance, compliance, and disciplinary practices and 
                procedures, including methods for conducting real-time 
                monitoring of trading and comprehensive and accurate 
                trade reconstructions.
            ``(5) Ability to obtain information.--The swap execution 
        facility shall--
                    ``(A) establish and enforce rules that will allow 
                the facility to obtain any necessary information to 
                perform any of the functions described in this section;
                    ``(B) provide the information to the Commission on 
                request; and

[[Page 124 STAT. 1715]]

                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Position limits or accountability.--
                    ``(A) In general.--To reduce the potential threat of 
                market manipulation or congestion, especially during 
                trading in the delivery month, a swap execution facility 
                that is a trading facility shall adopt for each of the 
                contracts of the facility, as is necessary and 
                appropriate, position limitations or position 
                accountability for speculators.
                    ``(B) <<NOTE: Contracts.>>  Position limits.--For 
                any contract that is subject to a position limitation 
                established by the Commission pursuant to section 4a(a), 
                the swap execution facility shall--
                          ``(i) set its position limitation at a level 
                      no higher than the Commission limitation; and
                          ``(ii) monitor positions established on or 
                      through the swap execution facility for compliance 
                      with the limit set by the Commission and the 
                      limit, if any, set by the swap execution facility.
            ``(7) <<NOTE: Procedures.>>  Financial integrity of 
        transactions.--The swap execution facility shall establish and 
        enforce rules and procedures for ensuring the financial 
        integrity of swaps entered on or through the facilities of the 
        swap execution facility, including the clearance and settlement 
        of the swaps pursuant to section 2(h)(1).
            ``(8) Emergency authority.--The swap execution facility 
        shall adopt rules to provide for the exercise of emergency 
        authority, in consultation or cooperation with the Commission, 
        as is necessary and appropriate, including the authority to 
        liquidate or transfer open positions in any swap or to suspend 
        or curtail trading in a swap.
            ``(9) Timely publication of trading information.--
                    ``(A) <<NOTE: Public information.>>  In general.--
                The swap execution facility shall make public timely 
                information on price, trading volume, and other trading 
                data on swaps to the extent prescribed by the 
                Commission.
                    ``(B) Capacity of swap execution facility.--The swap 
                execution facility shall be required to have the 
                capacity to electronically capture and transmit trade 
                information with respect to transactions executed on the 
                facility.
            ``(10) Recordkeeping and reporting.--
                    ``(A) In general.--A swap execution facility shall--
                          ``(i) <<NOTE: Time period.>>  maintain records 
                      of all activities relating to the business of the 
                      facility, including a complete audit trail, in a 
                      form and manner acceptable to the Commission for a 
                      period of 5 years;
                          ``(ii) report to the Commission, in a form and 
                      manner acceptable to the Commission, such 
                      information as the Commission determines to be 
                      necessary or appropriate for the Commission to 
                      perform the duties of the Commission under this 
                      Act; and
                          ``(iii) shall keep any such records relating 
                      to swaps defined in section 1a(47)(A)(v) open to 
                      inspection and examination by the Securities and 
                      Exchange Commission.''

[[Page 124 STAT. 1716]]

                    ``(B) Requirements.--The Commission shall adopt data 
                collection and reporting requirements for swap execution 
                facilities that are comparable to corresponding 
                requirements for derivatives clearing organizations and 
                swap data repositories.
            ``(11) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the swap 
        execution facility shall not--
                    ``(A) adopt any rules or taking any actions that 
                result in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
            ``(12) Conflicts of interest.--The swap execution facility 
        shall--
                    ``(A) establish and enforce rules to minimize 
                conflicts of interest in its decision-making process; 
                and
                    ``(B) establish a process for resolving the 
                conflicts of interest.
            ``(13) Financial resources.--
                    ``(A) In general.--The swap execution facility shall 
                have adequate financial, operational, and managerial 
                resources to discharge each responsibility of the swap 
                execution facility.
                    ``(B <<NOTE: Time period.>>  Determination of 
                resource adequacy.--The financial resources of a swap 
                execution facility shall be considered to be adequate if 
                the value of the financial resources exceeds the total 
                amount that would enable the swap execution facility to 
                cover the operating costs of the swap execution facility 
                for a 1-year period, as calculated on a rolling basis.
            ``(14) System safeguards.--The swap execution facility 
        shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through the development of 
                appropriate controls and procedures, and automated 
                systems, that--
                          ``(i) are reliable and secure; and
                          ``(ii) have adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery that 
                allow for--
                          ``(i) the timely recovery and resumption of 
                      operations; and
                          ``(ii) the fulfillment of the responsibilities 
                      and obligations of the swap execution facility; 
                      and
                    ``(C) periodically conduct tests to verify that the 
                backup resources of the swap execution facility are 
                sufficient to ensure continued--
                          ``(i) order processing and trade matching;
                          ``(ii) price reporting;
                          ``(iii) market surveillance and
                          ``(iv) maintenance of a comprehensive and 
                      accurate audit trail.
            ``(15) Designation of chief compliance officer.--
                    ``(A) In general.--Each swap execution facility 
                shall designate an individual to serve as a chief 
                compliance officer.

[[Page 124 STAT. 1717]]

                    ``(B) Duties.--The chief compliance officer shall--
                          ``(i) report directly to the board or to the 
                      senior officer of the facility;
                          ``(ii) review compliance with the core 
                      principles in this subsection;
                          ``(iii) in consultation with the board of the 
                      facility, a body performing a function similar to 
                      that of a board, or the senior officer of the 
                      facility, resolve any conflicts of interest that 
                      may arise;
                          ``(iv) be responsible for establishing and 
                      administering the policies and procedures required 
                      to be established pursuant to this section;
                          ``(v) ensure compliance with this Act and the 
                      rules and regulations issued under this Act, 
                      including rules prescribed by the Commission 
                      pursuant to this section; and
                          ``(vi) establish procedures for the 
                      remediation of noncompliance issues found during 
                      compliance office reviews, look backs, internal or 
                      external audit findings, self-reported errors, or 
                      through validated complaints.
                    ``(C) Requirements for procedures.--In establishing 
                procedures under subparagraph (B)(vi), the chief 
                compliance officer shall design the procedures to 
                establish the handling, management response, 
                remediation, retesting, and closing of noncompliance 
                issues.
                    ``(D) Annual reports.--
                          ``(i) In general.--In accordance with rules 
                      prescribed by the Commission, the chief compliance 
                      officer shall annually prepare and sign a report 
                      that contains a description of--
                                    ``(I) the compliance of the swap 
                                execution facility with this Act; and
                                    ``(II) the policies and procedures, 
                                including the code of ethics and 
                                conflict of interest policies, of the 
                                swap execution facility.
                          ``(ii) Requirements.--The chief compliance 
                      officer shall--
                                    ``(I) submit each report described 
                                in clause (i) with the appropriate 
                                financial report of the swap execution 
                                facility that is required to be 
                                submitted to the Commission pursuant to 
                                this section; and
                                    ``(II) <<NOTE: Certification.>>  
                                include in the report a certification 
                                that, under penalty of law, the report 
                                is accurate and complete.

    ``(g) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a swap execution facility from registration under this 
section if the Commission finds that the facility is subject to 
comparable, comprehensive supervision and regulation on a consolidated 
basis by the Securities and Exchange Commission, a prudential regulator, 
or the appropriate governmental authorities in the home country of the 
facility.
    ``(h) Rules.--The Commission shall prescribe rules governing the 
regulation of alternative swap execution facilities under this 
section.''.

[[Page 124 STAT. 1718]]

SEC. 734. DERIVATIVES TRANSACTION EXECUTION FACILITIES AND EXEMPT 
                        BOARDS OF TRADE.

    (a) <<NOTE: Repeal.>>  In General.--Sections 5a and 5d of the 
Commodity Exchange Act (7 U.S.C. 7a, 7a-3) are repealed.

    (b) Conforming Amendments.--
            (1) Section 2 of the Commodity Exchange Act (7 U.S.C. 2) is 
        amended--
                    (A) in subsection (a)(1)(A), in the first sentence, 
                by striking ``or 5a''; and
                    (B) in paragraph (2) of subsection (g) (as 
                redesignated by section 723(a)(1)(B)), by striking 
                ``section 5a of this Act'' and all that follows through 
                ``5d of this Act'' and inserting ``section 5b of this 
                Act''.
            (2) Section 6(g)(1)(A) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78f(g)(1)(A)) is amended--
                    (A) by striking ``that--'' and all that follows 
                through ``(i) has been designated'' and inserting ``that 
                has been designated'';
                    (B) by striking ``; or'' and inserting ``; and'' and
                    (C) by striking clause (ii).

    (c) <<NOTE: 7 USC 7a-3 note.>>  Ability to Petition Commission.--
            (1) In general.--Prior to the final effective dates in this 
        title, a person may petition the Commodity Futures Trading 
        Commission to remain subject to the provisions of section 5d of 
        the Commodity Exchange Act, as such provisions existed prior to 
        the effective date of this subtitle.
            (2) Consideration of petition.--The Commodity Futures 
        Trading Commission shall consider any petition submitted under 
        paragraph (1) in a prompt manner and may allow a person to 
        continue operating subject to the provisions of section 5d of 
        the Commodity Exchange Act for up to 1 year after the effective 
        date of this subtitle.
SEC. 735. <<NOTE: Regulations. Procedures.>>  DESIGNATED CONTRACT 
                        MARKETS.

    (a) Criteria for Designation.--Section 5 of the Commodity Exchange 
Act (7 U.S.C. 7) is amended by striking subsection (b).
    (b) Core Principles for Contract Markets.--Section 5 of the 
Commodity Exchange Act (7 U.S.C. 7) is amended by striking subsection 
(d) and inserting the following:
    ``(d) Core Principles for Contract Markets.--
            ``(1) Designation as contract market.--
                    ``(A) In general.--To be designated, and maintain a 
                designation, as a contract market, a board of trade 
                shall comply with--
                          ``(i) any core principle described in this 
                      subsection; and
                          ``(ii) any requirement that the Commission may 
                      impose by rule or regulation pursuant to section 
                      8a(5).
                    ``(B) Reasonable discretion of contract market.--
                Unless otherwise determined by the Commission by rule or 
                regulation, a board of trade described in subparagraph 
                (A) shall have reasonable discretion in establishing the 
                manner in which the board of trade complies with the 
                core principles described in this subsection.
            ``(2) Compliance with rules.--

[[Page 124 STAT. 1719]]

                    ``(A) In general.--The board of trade shall 
                establish, monitor, and enforce compliance with the 
                rules of the contract market, including--
                          ``(i) access requirements;
                          ``(ii) the terms and conditions of any 
                      contracts to be traded on the contract market; and
                          ``(iii) rules prohibiting abusive trade 
                      practices on the contract market.
                    ``(B) Capacity of contract market.--The board of 
                trade shall have the capacity to detect, investigate, 
                and apply appropriate sanctions to any person that 
                violates any rule of the contract market.
                    ``(C) Requirement of rules.--The rules of the 
                contract market shall provide the board of trade with 
                the ability and authority to obtain any necessary 
                information to perform any function described in this 
                subsection, including the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(3) Contracts not readily subject to manipulation.--The 
        board of trade shall list on the contract market only contracts 
        that are not readily susceptible to manipulation.
            ``(4) Prevention of market disruption.--The board of trade 
        shall have the capacity and responsibility to prevent 
        manipulation, price distortion, and disruptions of the delivery 
        or cash-settlement process through market surveillance, 
        compliance, and enforcement practices and procedures, 
        including--
                    ``(A) methods for conducting real-time monitoring of 
                trading; and
                    ``(B) comprehensive and accurate trade 
                reconstructions.
            ``(5) Position limitations or accountability.--
                    ``(A) In general.--To reduce the potential threat of 
                market manipulation or congestion (especially during 
                trading in the delivery month), the board of trade shall 
                adopt for each contract of the board of trade, as is 
                necessary and appropriate, position limitations or 
                position accountability for speculators.
                    ``(B) Maximum allowable position limitation.--For 
                any contract that is subject to a position limitation 
                established by the Commission pursuant to section 4a(a), 
                the board of trade shall set the position limitation of 
                the board of trade at a level not higher than the 
                position limitation established by the Commission.
            ``(6) Emergency authority.--The board of trade, in 
        consultation or cooperation with the Commission, shall adopt 
        rules to provide for the exercise of emergency authority, as is 
        necessary and appropriate, including the authority--
                    ``(A) to liquidate or transfer open positions in any 
                contract;
                    ``(B) to suspend or curtail trading in any contract; 
                and
                    ``(C) to require market participants in any contract 
                to meet special margin requirements.
            ``(7) Availability of general information.--The board of 
        trade shall make available to market authorities, market 
        participants, and the public accurate information concerning--
                    ``(A) the terms and conditions of the contracts of 
                the contract market; and

[[Page 124 STAT. 1720]]

                    ``(B)(i) the rules, regulations, and mechanisms for 
                executing transactions on or through the facilities of 
                the contract market; and
                    ``(ii) the rules and specifications describing the 
                operation of the contract market's--
                          ``(I) electronic matching platform; or
                          ``(II) trade execution facility.
            ``(8) <<NOTE: Public information.>>  Daily publication of 
        trading information.--The board of trade shall make public daily 
        information on settlement prices, volume, open interest, and 
        opening and closing ranges for actively traded contracts on the 
        contract market.
            ``(9) Execution of transactions.--
                    ``(A) In general.--The board of trade shall provide 
                a competitive, open, and efficient market and mechanism 
                for executing transactions that protects the price 
                discovery process of trading in the centralized market 
                of the board of trade.
                    ``(B) Rules.--The rules of the board of trade may 
                authorize, for bona fide business purposes--
                          ``(i) transfer trades or office trades;
                          ``(ii) an exchange of--
                                    ``(I) futures in connection with a 
                                cash commodity transaction;
                                    ``(II) futures for cash commodities; 
                                or
                                    ``(III) futures for swaps; or
                          ``(iii) a futures commission merchant, acting 
                      as principal or agent, to enter into or confirm 
                      the execution of a contract for the purchase or 
                      sale of a commodity for future delivery if the 
                      contract is reported, recorded, or cleared in 
                      accordance with the rules of the contract market 
                      or a derivatives clearing organization.
            ``(10) <<NOTE: Records.>>  Trade information.--The board of 
        trade shall maintain rules and procedures to provide for the 
        recording and safe storage of all identifying trade information 
        in a manner that enables the contract market to use the 
        information--
                    ``(A) to assist in the prevention of customer and 
                market abuses; and
                    ``(B) to provide evidence of any violations of the 
                rules of the contract market.
            ``(11) Financial integrity of transactions.--The board of 
        trade shall establish and enforce--
                    ``(A) rules and procedures for ensuring the 
                financial integrity of transactions entered into on or 
                through the facilities of the contract market (including 
                the clearance and settlement of the transactions with a 
                derivatives clearing organization); and
                    ``(B) rules to ensure--
                          ``(i) the financial integrity of any--
                                    ``(I) futures commission merchant; 
                                and
                                    ``(II) introducing broker; and
                          ``(ii) the protection of customer funds.
            ``(12) Protection of markets and market participants.--The 
        board of trade shall establish and enforce rules--

[[Page 124 STAT. 1721]]

                    ``(A) to protect markets and market participants 
                from abusive practices committed by any party, including 
                abusive practices committed by a party acting as an 
                agent for a participant; and
                    ``(B) to promote fair and equitable trading on the 
                contract market.
            ``(13) Disciplinary procedures.--The board of trade shall 
        establish and enforce disciplinary procedures that authorize the 
        board of trade to discipline, suspend, or expel members or 
        market participants that violate the rules of the board of 
        trade, or similar methods for performing the same functions, 
        including delegation of the functions to third parties.
            ``(14) Dispute resolution.--The board of trade shall 
        establish and enforce rules regarding, and provide facilities 
        for alternative dispute resolution as appropriate for, market 
        participants and any market intermediaries.
            ``(15) Governance fitness standards.--The board of trade 
        shall establish and enforce appropriate fitness standards for 
        directors, members of any disciplinary committee, members of the 
        contract market, and any other person with direct access to the 
        facility (including any party affiliated with any person 
        described in this paragraph).
            ``(16) Conflicts of interest.--The board of trade shall 
        establish and enforce rules--
                    ``(A) to minimize conflicts of interest in the 
                decision-making process of the contract market; and
                    ``(B) to establish a process for resolving conflicts 
                of interest described in subparagraph (A).
            ``(17) Composition of governing boards of contract 
        markets.--The governance arrangements of the board of trade 
        shall be designed to permit consideration of the views of market 
        participants.
            ``(18) Recordkeeping.--The board of trade shall maintain 
        records of all activities relating to the business of the 
        contract market--
                    ``(A) in a form and manner that is acceptable to the 
                Commission; and
                    ``(B) <<NOTE: Time period.>>  for a period of at 
                least 5 years.
            ``(19) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this Act, the board of 
        trade shall not--
                    ``(A) adopt any rule or taking any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading on the contract market.
            ``(20) System safeguards.--The board of trade shall--
                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through the development of 
                appropriate controls and procedures, and the development 
                of automated systems, that are reliable, secure, and 
                have adequate scalable capacity;
                    ``(B) establish and maintain emergency procedures, 
                backup facilities, and a plan for disaster recovery that 
                allow for the timely recovery and resumption of 
                operations and the fulfillment of the responsibilities 
                and obligations of the board of trade; and

[[Page 124 STAT. 1722]]

                    ``(C) periodically conduct tests to verify that 
                backup resources are sufficient to ensure continued 
                order processing and trade matching, price reporting, 
                market surveillance, and maintenance of a comprehensive 
                and accurate audit trail.
            ``(21) Financial resources.--
                    ``(A) In general.--The board of trade shall have 
                adequate financial, operational, and managerial 
                resources to discharge each responsibility of the board 
                of trade.
                    ``(B) Determination of adequacy.--The financial 
                resources of the board of trade shall be considered to 
                be adequate if the value of the financial resources 
                exceeds the total amount that would enable the contract 
                market to cover the operating costs of the contract 
                market for a 1-year period, as calculated on a rolling 
                basis.
            ``(22) Diversity of board of directors.--The board of trade, 
        if a publicly traded company, shall endeavor to recruit 
        individuals to serve on the board of directors and the other 
        decision-making bodies (as determined by the Commission) of the 
        board of trade from among, and to have the composition of the 
        bodies reflect, a broad and culturally diverse pool of qualified 
        candidates.
            ``(23) <<NOTE: Records.>>  Securities and exchange 
        commission.--The board of trade shall keep any such records 
        relating to swaps defined in section 1a(47)(A)(v) open to 
        inspection and examination by the Securities and Exchange 
        Commission.''.
SEC. 736. MARGIN.

    Section 8a(7) of the Commodity Exchange Act (7 U.S.C. 12a(7)) is 
amended--
            (1) in subparagraph (C), by striking ``, excepting the 
        setting of levels of margin'';
            (2) by redesignating subparagraphs (D) through (F) as 
        subparagraphs (E) through (G), respectively; and
            (3) by inserting after subparagraph (C) the following:
                    ``(D) margin requirements, provided that the rules, 
                regulations, or orders shall--
                          ``(i) be limited to protecting the financial 
                      integrity of the derivatives clearing 
                      organization;
                          ``(ii) be designed for risk management 
                      purposes to protect the financial integrity of 
                      transactions; and
                          ``(iii) not set specific margin amounts;''.
SEC. 737. POSITION LIMITS.

    (a) Aggregate Position Limits.--Section 4a(a) of the Commodity 
Exchange Act (7 U.S.C. 6a(a)) is amended--
            (1) by inserting after ``(a)'' the following:
            ``(1) In general.--'';
            (2) in the first sentence, by striking ``on electronic 
        trading facilities with respect to a significant price discovery 
        contract'' and inserting ``swaps that perform or affect a 
        significant price discovery function with respect to registered 
        entities'';
            (3) in the second sentence--
                    (A) by inserting ``, including any group or class of 
                traders,'' after ``held by any person''; and
                    (B) by striking ``on an electronic trading facility 
                with respect to a significant price discovery 
                contract,'' and inserting ``swaps traded on or subject 
                to the rules of a

[[Page 124 STAT. 1723]]

                designated contract market or a swap execution facility, 
                or swaps not traded on or subject to the rules of a 
                designated contract market or a swap execution facility 
                that performs a significant price discovery function 
                with respect to a registered entity,''; and
            (4) by adding at the end the following:
            ``(2) Establishment of limitations.--
                    ``(A) <<NOTE: Regulations. Contracts.>>  In 
                general.--In accordance with the standards set forth in 
                paragraph (1) of this subsection and consistent with the 
                good faith exception cited in subsection (b)(2), with 
                respect to physical commodities other than excluded 
                commodities as defined by the Commission, the Commission 
                shall by rule, regulation, or order establish limits on 
                the amount of positions, as appropriate, other than bona 
                fide hedge positions, that may be held by any person 
                with respect to contracts of sale for future delivery or 
                with respect to options on the contracts or commodities 
                traded on or subject to the rules of a designated 
                contract market.
                    ``(B) Timing.--
                          ``(i) Exempt commodities.--For exempt 
                      commodities, the limits required under 
                      subparagraph (A) shall be established within 180 
                      days after the date of the enactment of this 
                      paragraph.
                          ``(ii) Agricultural commodities.--For 
                      agricultural commodities, the limits required 
                      under subparagraph (A) shall be established within 
                      270 days after the date of the enactment of this 
                      paragraph.
                    ``(C) Goal.--In establishing the limits required 
                under subparagraph (A), the Commission shall strive to 
                ensure that trading on foreign boards of trade in the 
                same commodity will be subject to comparable limits and 
                that any limits to be imposed by the Commission will not 
                cause price discovery in the commodity to shift to 
                trading on the foreign boards of trade.
            ``(3) Specific limitations.--In establishing the limits 
        required in paragraph (2), the Commission, as appropriate, shall 
        set limits--
                    ``(A) on the number of positions that may be held by 
                any person for the spot month, each other month, and the 
                aggregate number of positions that may be held by any 
                person for all months; and
                    ``(B) to the maximum extent practicable, in its 
                discretion--
                          ``(i) to diminish, eliminate, or prevent 
                      excessive speculation as described under this 
                      section;
                          ``(ii) to deter and prevent market 
                      manipulation, squeezes, and corners;
                          ``(iii) to ensure sufficient market liquidity 
                      for bona fide hedgers; and
                          ``(iv) to ensure that the price discovery 
                      function of the underlying market is not 
                      disrupted.
            ``(4) Significant price discovery function.--In making a 
        determination whether a swap performs or affects a significant 
        price discovery function with respect to regulated markets, the 
        Commission shall consider, as appropriate:

[[Page 124 STAT. 1724]]

                    ``(A) Price linkage.--The extent to which the swap 
                uses or otherwise relies on a daily or final settlement 
                price, or other major price parameter, of another 
                contract traded on a regulated market based upon the 
                same underlying commodity, to value a position, transfer 
                or convert a position, financially settle a position, or 
                close out a position.
                    ``(B) Arbitrage.--The extent to which the price for 
                the swap is sufficiently related to the price of another 
                contract traded on a regulated market based upon the 
                same underlying commodity so as to permit market 
                participants to effectively arbitrage between the 
                markets by simultaneously maintaining positions or 
                executing trades in the swaps on a frequent and 
                recurring basis.
                    ``(C) Material price reference.--The extent to 
                which, on a frequent and recurring basis, bids, offers, 
                or transactions in a contract traded on a regulated 
                market are directly based on, or are determined by 
                referencing, the price generated by the swap.
                    ``(D) Material liquidity.--The extent to which the 
                volume of swaps being traded in the commodity is 
                sufficient to have a material effect on another contract 
                traded on a regulated market.
                    ``(E) Other material factors.--Such other material 
                factors as the Commission specifies by rule or 
                regulation as relevant to determine whether a swap 
                serves a significant price discovery function with 
                respect to a regulated market.
            ``(5) Economically equivalent contracts.--
                    ``(A) Notwithstanding any other provision of this 
                section, the Commission shall establish limits on the 
                amount of positions, including aggregate position 
                limits, as appropriate, other than bona fide hedge 
                positions, that may be held by any person with respect 
                to swaps that are economically equivalent to contracts 
                of sale for future delivery or to options on the 
                contracts or commodities traded on or subject to the 
                rules of a designated contract market subject to 
                paragraph (2).
                    ``(B) In establishing limits pursuant to 
                subparagraph (A), the Commission shall--
                          ``(i) develop the limits concurrently with 
                      limits established under paragraph (2), and the 
                      limits shall have similar requirements as under 
                      paragraph (3)(B); and
                          ``(ii) establish the limits simultaneously 
                      with limits established under paragraph (2).
            ``(6) <<NOTE: Contracts.>>  Aggregate position limits.--The 
        Commission shall, by rule or regulation, establish limits 
        (including related hedge exemption provisions) on the aggregate 
        number or amount of positions in contracts based upon the same 
        underlying commodity (as defined by the Commission) that may be 
        held by any person, including any group or class of traders, for 
        each month across--
                    ``(A) contracts listed by designated contract 
                markets;
                    ``(B) with respect to an agreement contract, or 
                transaction that settles against any price (including 
                the daily or final settlement price) of 1 or more 
                contracts listed

[[Page 124 STAT. 1725]]

                for trading on a registered entity, contracts traded on 
                a foreign board of trade that provides members or other 
                participants located in the United States with direct 
                access to its electronic trading and order matching 
                system; and
                    ``(C) swap contracts that perform or affect a 
                significant price discovery function with respect to 
                regulated entities.
            ``(7) Exemptions.--The Commission, by rule, regulation, or 
        order, may exempt, conditionally or unconditionally, any person 
        or class of persons, any swap or class of swaps, any contract of 
        sale of a commodity for future delivery or class of such 
        contracts, any option or class of options, or any transaction or 
        class of transactions from any requirement it may establish 
        under this section with respect to position limits.''.

    (b) Conforming Amendments.--Section 4a(b) of the Commodity Exchange 
Act (7 U.S.C. 6a(b)) is amended--
            (1) in paragraph (1), by striking ``or derivatives 
        transaction execution facility or facilities or electronic 
        trading facility'' and inserting ``or swap execution facility or 
        facilities''; and
            (2) in paragraph (2), by striking ``or derivatives 
        transaction execution facility or facilities or electronic 
        trading facility'' and inserting ``or swap execution facility''.

    (c) Bona Fide Hedging Transaction.--Section 4a(c) of the Commodity 
Exchange Act is amended--
            (1) by inserting ``(1)'' after ``(c)''; and
            (2) by adding at the end the following:
            ``(2) <<NOTE: Contracts.>>  For the purposes of 
        implementation of subsection (a)(2) for contracts of sale for 
        future delivery or options on the contracts or commodities, the 
        Commission shall define what constitutes a bona fide hedging 
        transaction or position as a transaction or position that--
                    ``(A)(i) represents a substitute for transactions 
                made or to be made or positions taken or to be taken at 
                a later time in a physical marketing channel;
                    ``(ii) is economically appropriate to the reduction 
                of risks in the conduct and management of a commercial 
                enterprise; and
                    ``(iii) arises from the potential change in the 
                value of--
                          ``(I) assets that a person owns, produces, 
                      manufactures, processes, or merchandises or 
                      anticipates owning, producing, manufacturing, 
                      processing, or merchandising;
                          ``(II) liabilities that a person owns or 
                      anticipates incurring; or
                          ``(III) services that a person provides, 
                      purchases, or anticipates providing or purchasing; 
                      or
                    ``(B) reduces risks attendant to a position 
                resulting from a swap that--
                          ``(i) was executed opposite a counterparty for 
                      which the transaction would qualify as a bona fide 
                      hedging transaction pursuant to subparagraph (A); 
                      or
                          ``(ii) meets the requirements of subparagraph 
                      (A).''.

    (d) <<NOTE: 7 USC 6a note.>>  Effective Date.--This section and the 
amendments made by this section shall become effective on the date of 
the enactment of this section.

[[Page 124 STAT. 1726]]

SEC. 738. FOREIGN BOARDS OF TRADE.

    (a) In General.--Section 4(b) of the Commodity Exchange Act (7 
U.S.C. 6(b)) is amended--
            (1) in the first sentence, by striking ``The Commission'' 
        and inserting the following:
            ``(2) Persons located in the united states.--
                    ``(A) In general.--The Commission'';
            (2) in the second sentence, by striking ``Such rules and 
        regulations'' and inserting the following:
                    ``(B) Different requirements.--Rules and regulations 
                described in subparagraph (A)'';
            (3) in the third sentence--
                    (A) by striking ``No rule or regulation'' and 
                inserting the following:
                    ``(C) Prohibition.--Except as provided in paragraphs 
                (1) and (2), no rule or regulation'';
                    (B) by striking ``that (1) requires'' and inserting 
                the following: ``that--
                          ``(i) requires''; and
                    (C) by striking ``market, or (2) governs'' and 
                inserting the following: ``market; or
                          ``(ii) governs''; and
            (4) by inserting before paragraph (2) (as designated by 
        paragraph (1)) the following:
            ``(1) Foreign boards of trade.--
                    ``(A) Registration.--The Commission may adopt rules 
                and regulations requiring registration with the 
                Commission for a foreign board of trade that provides 
                the members of the foreign board of trade or other 
                participants located in the United States with direct 
                access to the electronic trading and order matching 
                system of the foreign board of trade, including rules 
                and regulations prescribing procedures and requirements 
                applicable to the registration of such foreign boards of 
                trade. For purposes of this paragraph, `direct access' 
                refers to an explicit grant of authority by a foreign 
                board of trade to an identified member or other 
                participant located in the United States to enter trades 
                directly into the trade matching system of the foreign 
                board of trade. In adopting such rules and regulations, 
                the commission shall consider--
                          ``(i) whether any such foreign board of trade 
                      is subject to comparable, comprehensive 
                      supervision and regulation by the appropriate 
                      governmental authorities in the foreign board of 
                      trade's home country; and
                          ``(ii) any previous commission findings that 
                      the foreign board of trade is subject to 
                      comparable comprehensive supervision and 
                      regulation by the appropriate government 
                      authorities in the foreign board of trade's home 
                      country.
                    ``(B) Linked contracts.--The Commission may not 
                permit a foreign board of trade to provide to the 
                members of the foreign board of trade or other 
                participants located in the United States direct access 
                to the electronic trading and order-matching system of 
                the foreign board of trade with respect to an agreement, 
                contract, or transaction that settles against any price 
                (including the daily or final settlement price) of 1 or 
                more contracts listed for trading on

[[Page 124 STAT. 1727]]

                a registered entity, unless the Commission determines 
                that--
                          ``(i) the foreign board of trade makes public 
                      daily trading information regarding the agreement, 
                      contract, or transaction that is comparable to the 
                      daily trading information published by the 
                      registered entity for the 1 or more contracts 
                      against which the agreement, contract, or 
                      transaction traded on the foreign board of trade 
                      settles; and
                          ``(ii) the foreign board of trade (or the 
                      foreign futures authority that oversees the 
                      foreign board of trade)--
                                    ``(I) adopts position limits 
                                (including related hedge exemption 
                                provisions) for the agreement, contract, 
                                or transaction that are comparable to 
                                the position limits (including related 
                                hedge exemption provisions) adopted by 
                                the registered entity for the 1 or more 
                                contracts against which the agreement, 
                                contract, or transaction traded on the 
                                foreign board of trade settles;
                                    ``(II) has the authority to require 
                                or direct market participants to limit, 
                                reduce, or liquidate any position the 
                                foreign board of trade (or the foreign 
                                futures authority that oversees the 
                                foreign board of trade) determines to be 
                                necessary to prevent or reduce the 
                                threat of price manipulation, excessive 
                                speculation as described in section 4a, 
                                price distortion, or disruption of 
                                delivery or the cash settlement process;
                                    ``(III) <<NOTE: Notification.>>  
                                agrees to promptly notify the 
                                Commission, with regard to the 
                                agreement, contract, or transaction that 
                                settles against any price (including the 
                                daily or final settlement price) of 1 or 
                                more contracts listed for trading on a 
                                registered entity, of any change 
                                regarding--
                                            ``(aa) <<NOTE: Public 
                                        information.>>  the information 
                                        that the foreign board of trade 
                                        will make publicly available;
                                            ``(bb) the position limits 
                                        that the foreign board of trade 
                                        or foreign futures authority 
                                        will adopt and enforce;
                                            ``(cc) the position 
                                        reductions required to prevent 
                                        manipulation, excessive 
                                        speculation as described in 
                                        section 4a, price distortion, or 
                                        disruption of delivery or the 
                                        cash settlement process; and
                                            ``(dd) any other area of 
                                        interest expressed by the 
                                        Commission to the foreign board 
                                        of trade or foreign futures 
                                        authority;
                                    ``(IV) provides information to the 
                                Commission regarding large trader 
                                positions in the agreement, contract, or 
                                transaction that is comparable to the 
                                large trader position information 
                                collected by the Commission for the 1 or 
                                more contracts against which the 
                                agreement, contract, or transaction 
                                traded on the foreign board of trade 
                                settles; and
                                    ``(V) <<NOTE: Reports.>>  provides 
                                the Commission such information as is 
                                necessary to publish reports on 
                                aggregate

[[Page 124 STAT. 1728]]

                                trader positions for the agreement, 
                                contract, or transaction traded on the 
                                foreign board of trade that are 
                                comparable to such reports on aggregate 
                                trader positions for the 1 or more 
                                contracts against which the agreement, 
                                contract, or transaction traded on the 
                                foreign board of trade settles.
                    ``(C) <<NOTE: Effective date.>>  Existing foreign 
                boards of trade.--Subparagraphs (A) and (B) shall not be 
                effective with respect to any foreign board of trade to 
                which, prior to the date of enactment of this paragraph, 
                the Commission granted direct access permission until 
                the date that is 180 days after that date of 
                enactment.''.

    (b) Liability of Registered Persons Trading on a Foreign Board of 
Trade.--Section 4 of the Commodity Exchange Act (7 U.S.C. 6) is 
amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by inserting ``or by subsection (e)'' after ``Unless 
        exempted by the Commission pursuant to subsection (c)''; and
            (2) by adding at the end the following:

    ``(e) Liability of Registered Persons Trading on a Foreign Board of 
Trade.--
            ``(1) In general.--A person registered with the Commission, 
        or exempt from registration by the Commission, under this Act 
        may not be found to have violated subsection (a) with respect to 
        a transaction in, or in connection with, a contract of sale of a 
        commodity for future delivery if the person--
                    ``(A) has reason to believe that the transaction and 
                the contract is made on or subject to the rules of a 
                foreign board of trade that is--
                          ``(i) legally organized under the laws of a 
                      foreign country;
                          ``(ii) authorized to act as a board of trade 
                      by a foreign futures authority; and
                          ``(iii) subject to regulation by the foreign 
                      futures authority; and
                    ``(B) has not been determined by the Commission to 
                be operating in violation of subsection (a).
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed as implying or creating any presumption that 
        a board of trade, exchange, or market is located outside the 
        United States, or its territories or possessions, for purposes 
        of subsection (a).''.

    (c) Contract Enforcement for Foreign Futures Contracts.--Section 
22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) (as amended by 
section 739) is amended by adding at the end the following:
    ``(6) Contract Enforcement for Foreign Futures Contracts.--A 
contract of sale of a commodity for future delivery traded or executed 
on or through the facilities of a board of trade, exchange, or market 
located outside the United States for purposes of section 4(a) shall not 
be void, voidable, or unenforceable, and a party to such a contract 
shall not be entitled to rescind or recover any payment made with 
respect to the contract, based on the failure of the foreign board of 
trade to comply with any provision of this Act.''.

[[Page 124 STAT. 1729]]

SEC. 739. LEGAL CERTAINTY FOR SWAPS.

    Section 22(a) of the Commodity Exchange Act (7 U.S.C. 25(a)) is 
amended by striking paragraph (4) and inserting the following:
    ``(4) Contract Enforcement Between Eligible Counterparties.--
            ``(A) In general.--No hybrid instrument sold to any investor 
        shall be void, voidable, or unenforceable, and no party to a 
        hybrid instrument shall be entitled to rescind, or recover any 
        payment made with respect to, the hybrid instrument under this 
        section or any other provision of Federal or State law, based 
        solely on the failure of the hybrid instrument to comply with 
        the terms or conditions of section 2(f) or regulations of the 
        Commission.
            ``(B) Swaps.--No agreement, contract, or transaction between 
        eligible contract participants or persons reasonably believed to 
        be eligible contract participants shall be void, voidable, or 
        unenforceable, and no party to such agreement, contract, or 
        transaction shall be entitled to rescind, or recover any payment 
        made with respect to, the agreement, contract, or transaction 
        under this section or any other provision of Federal or State 
        law, based solely on the failure of the agreement, contract, or 
        transaction--
                    ``(i) to meet the definition of a swap under section 
                1a; or
                    ``(ii) to be cleared in accordance with section 
                2(h)(1).

    ``(5) Legal Certainty for Long-term Swaps Entered Into Before the 
Date of Enactment of the Wall Street Transparency and Accountability Act 
of 2010.--
            ``(A) Effect on swaps.--Unless specifically reserved in the 
        applicable swap, neither the enactment of the Wall Street 
        Transparency and Accountability Act of 2010, nor any requirement 
        under that Act or an amendment made by that Act, shall 
        constitute a termination event, force majeure, illegality, 
        increased costs, regulatory change, or similar event under a 
        swap (including any related credit support arrangement) that 
        would permit a party to terminate, renegotiate, modify, amend, 
        or supplement 1 or more transactions under the swap.
            ``(B) Position limits.--Any position limit established under 
        the Wall Street Transparency and Accountability Act of 2010 
        shall not apply to a position acquired in good faith prior to 
        the effective date of any rule, regulation, or order under the 
        Act that establishes the position limit; provided, however, that 
        such positions shall be attributed to the trader if the trader's 
        position is increased after the effective date of such position 
        limit rule, regulation, or order.''.
SEC. 740. MULTILATERAL CLEARING ORGANIZATIONS.

    Sections <<NOTE: Repeal.>>  408 and 409 of the Federal Deposit 
Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4421, 4422) are 
repealed.
SEC. 741. ENFORCEMENT.

    (a) Enforcement Authority.--The Commodity Exchange Act is amended by 
inserting after section 4b (7 U.S.C. 6b) the following:
``SEC. 4b-1. <<NOTE: 7 USC 6b-1.>> ENFORCEMENT AUTHORITY.

    ``(a) Commodity Futures Trading Commission.--Except as provided in 
subsections (b), (c), and (d), the Commission shall have exclusive 
authority to enforce the provisions of subtitle A of the

[[Page 124 STAT. 1730]]

Wall Street Transparency and Accountability Act of 2010 with respect to 
any person.
    ``(b) Prudential Regulators.--The prudential regulators shall have 
exclusive authority to enforce the provisions of section 4s(e) with 
respect to swap dealers or major swap participants for which they are 
the prudential regulator.
    ``(c) Referrals.--
            ``(1) Prudential regulators.--If the prudential regulator 
        for a swap dealer or major swap participant has cause to believe 
        that the swap dealer or major swap participant, or any affiliate 
        or division of the swap dealer or major swap participant, may 
        have engaged in conduct that constitutes a violation of the 
        nonprudential requirements of this Act (including section 4s or 
        rules adopted by the Commission under that section), the 
        prudential regulator may promptly notify the Commission in a 
        written report that includes--
                    ``(A) a request that the Commission initiate an 
                enforcement proceeding under this Act; and
                    ``(B) an explanation of the facts and circumstances 
                that led to the preparation of the written report.
            ``(2) Commission.--If the Commission has cause to believe 
        that a swap dealer or major swap participant that has a 
        prudential regulator may have engaged in conduct that 
        constitutes a violation of any prudential requirement of section 
        4s or rules adopted by the Commission under that section, the 
        Commission may notify the prudential regulator of the conduct in 
        a written report that includes--
                    ``(A) a request that the prudential regulator 
                initiate an enforcement proceeding under this Act or any 
                other Federal law (including regulations); and
                    ``(B) an explanation of the concerns of the 
                Commission, and a description of the facts and 
                circumstances, that led to the preparation of the 
                written report.

    ``(d) <<NOTE: Time period.>>  Backstop Enforcement Authority.--
            ``(1) Initiation of enforcement proceeding by prudential 
        regulator.--If the Commission does not initiate an enforcement 
        proceeding before the end of the 90-day period beginning on the 
        date on which the Commission receives a written report under 
        subsection (c)(1), the prudential regulator may initiate an 
        enforcement proceeding.
            ``(2) Initiation of enforcement proceeding by commission.--
        If the prudential regulator does not initiate an enforcement 
        proceeding before the end of the 90-day period beginning on the 
        date on which the prudential regulator receives a written report 
        under subsection (c)(2), the Commission may initiate an 
        enforcement proceeding.''.

    (b) Conforming Amendments.--
            (1) Section 4b of the Commodity Exchange Act (7 U.S.C. 6b) 
        is amended--
                    (A) in subsection (a)(2), by striking ``or other 
                agreement, contract, or transaction subject to 
                paragraphs (1) and (2) of section 5a(g),'' and inserting 
                ``or swap,'';
                    (B) in subsection (b), by striking ``or other 
                agreement, contract or transaction subject to paragraphs 
                (1) and (2) of section 5a(g),'' and inserting ``or 
                swap,''; and
                    (C) by adding at the end the following:

[[Page 124 STAT. 1731]]

    ``(e) It shall be unlawful for any person, directly or indirectly, 
by the use of any means or instrumentality of interstate commerce, or of 
the mails, or of any facility of any registered entity, in or in 
connection with any order to make, or the making of, any contract of 
sale of any commodity for future delivery (or option on such a 
contract), or any swap, on a group or index of securities (or any 
interest therein or based on the value thereof)--
            ``(1) to employ any device, scheme, or artifice to defraud;
            ``(2) to make any untrue statement of a material fact or to 
        omit to state a material fact necessary in order to make the 
        statements made, in the light of the circumstances under which 
        they were made, not misleading; or
            ``(3) to engage in any act, practice, or course of business 
        which operates or would operate as a fraud or deceit upon any 
        person.''.
            (2) Section 4c(a)(1) of the Commodity Exchange Act (7 U.S.C. 
        6c(a)(1)) is amended by inserting ``or swap'' before ``if the 
        transaction is used or may be used''.
            (3) Section 6(c) of the Commodity Exchange Act (7 U.S.C. 9) 
        is amended in the first sentence by inserting ``or of any 
        swap,'' before ``or has willfully made''.
            (4) Section 6(d) of the Commodity Exchange Act (7 U.S.C. 
        13b) is amended in the first sentence, in the matter preceding 
        the proviso, by inserting ``or of any swap,'' before ``or 
        otherwise is violating''.
            (5) Section 6c(a) of the Commodity Exchange Act (7 U.S.C. 
        13a-1(a)) is amended in the matter preceding the proviso by 
        inserting ``or any swap'' after ``commodity for future 
        delivery''.
            (6) Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is 
        amended--
                    (A) in subsection (a)--
                          (i) in paragraph (2), by inserting ``or of any 
                      swap,'' before ``or to corner''; and
                          (ii) in paragraph (4), by inserting ``swap 
                      data repository,'' before ``or futures 
                      association'' and
                    (B) in subsection (e)(1)--
                          (i) by inserting ``swap data repository,'' 
                      before ``or registered futures association''; and
                          (ii) by inserting ``, or swaps,'' before ``on 
                      the basis''.
            (7) Section 9(a) of the Commodity Exchange Act (7 U.S.C. 
        13(a)) is amended by adding at the end the following:
            ``(6) Any person to abuse the end user clearing exemption 
        under section 2(h)(4), as determined by the Commission.''.
            (8) Section 2(c)(2)(B) of the Commodity Exchange Act (7 
        U.S.C. 2(c)(2)(B)) is amended--
                    (A) by striking ``(dd),'' each place it appears;
                    (B) in clause (iii), by inserting ``, and accounts 
                or pooled investment vehicles described in clause 
                (vi),'' before ``shall be subject to''; and
                    (C) by adding at the end the following:
                          ``(vi) <<NOTE: Applicability.>>  This Act 
                      applies to, and the Commission shall have 
                      jurisdiction over, an account or pooled investment 
                      vehicle that is offered for the purpose of 
                      trading, or that trades, any agreement, contract, 
                      or transaction in foreign currency described in 
                      clause (i).''.
            (9) Section 2(c)(2)(C) of the Commodity Exchange Act (7 
        U.S.C. 2(c)(2)(C)) is amended--

[[Page 124 STAT. 1732]]

                    (A) by striking ``(dd),'' each place it appears;
                    (B) in clause (ii)(I), by inserting ``, and accounts 
                or pooled investment vehicles described in clause 
                (vii),'' before ``shall be subject to''; and
                    (C) by adding at the end the following:
                          ``(vii) <<NOTE: Applicability.>>  This Act 
                      applies to, and the Commission shall have 
                      jurisdiction over, an account or pooled investment 
                      vehicle that is offered for the purpose of 
                      trading, or that trades, any agreement, contract, 
                      or transaction in foreign currency described in 
                      clause (i).''.
            (10) Section 1a(19)(A)(iv)(II) of the Commodity Exchange Act 
        (7 U.S.C. 1a(19)(A)(iv)(II)) (as redesignated by section 
        721(a)(1)) is amended by inserting before the semicolon at the 
        end the following: ``provided, however, that for purposes of 
        section 2(c)(2)(B)(vi) and section 2(c)(2)(C)(vii), the term 
        `eligible contract participant' shall not include a commodity 
        pool in which any participant is not otherwise an eligible 
        contract participant''.
            (11) Section 6(e) of the Commodity Exchange Act (7 U.S.C. 
        9a) is amended by adding at the end the following:
            ``(4) <<NOTE: Penalty.>>  Any designated clearing 
        organization that knowingly or recklessly evades or participates 
        in or facilitates an evasion of the requirements of section 2(h) 
        shall be liable for a civil money penalty in twice the amount 
        otherwise available for a violation of section 2(h).
            ``(5) <<NOTE: Penalty.>>  Any swap dealer or major swap 
        participant that knowingly or recklessly evades or participates 
        in or facilitates an evasion of the requirements of section 2(h) 
        shall be liable for a civil money penalty in twice the amount 
        otherwise available for a violation of section 2(h).''.

    (c) <<NOTE: 15 USC 8324.>>  Savings Clause.--Notwithstanding any 
other provision of this title, nothing in this subtitle shall be 
construed as divesting any appropriate Federal banking agency of any 
authority it may have to establish or enforce, with respect to a person 
for which such agency is the appropriate Federal banking agency, 
prudential or other standards pursuant to authority granted by Federal 
law other than this title.
SEC. 742. RETAIL COMMODITY TRANSACTIONS.

    (a) In General.--Section 2(c) of the Commodity Exchange Act (7 
U.S.C. 2(c)) is amended--
            (1) in paragraph (1), by striking ``5a (to the extent 
        provided in section 5a(g)), 5b, 5d, or 12(e)(2)(B))'' and 
        inserting ``, 5b, or 12(e)(2)(B))''; and
            (2) in paragraph (2), by adding at the end the following:
                    ``(D) <<NOTE: Contracts.>>  Retail commodity 
                transactions.--
                          ``(i) Applicability.--Except as provided in 
                      clause (ii), this subparagraph shall apply to any 
                      agreement, contract, or transaction in any 
                      commodity that is--
                                    ``(I) entered into with, or offered 
                                to (even if not entered into with), a 
                                person that is not an eligible contract 
                                participant or eligible commercial 
                                entity; and
                                    ``(II) entered into, or offered 
                                (even if not entered into), on a 
                                leveraged or margined basis, or financed 
                                by the offeror, the counterparty, or

[[Page 124 STAT. 1733]]

                                a person acting in concert with the 
                                offeror or counterparty on a similar 
                                basis.
                          ``(ii) Exceptions.--This subparagraph shall 
                      not apply to--
                                    ``(I) an agreement, contract, or 
                                transaction described in paragraph (1) 
                                or subparagraphs (A), (B), or (C), 
                                including any agreement, contract, or 
                                transaction specifically excluded from 
                                subparagraph (A), (B), or (C);
                                    ``(II) any security;
                                    ``(III) a contract of sale that--
                                            ``(aa) results in actual 
                                        delivery within 28 days or such 
                                        other longer period as the 
                                        Commission may determine by rule 
                                        or regulation based upon the 
                                        typical commercial practice in 
                                        cash or spot markets for the 
                                        commodity involved; or
                                            ``(bb) creates an 
                                        enforceable obligation to 
                                        deliver between a seller and a 
                                        buyer that have the ability to 
                                        deliver and accept delivery, 
                                        respectively, in connection with 
                                        the line of business of the 
                                        seller and buyer; or
                                    ``(IV) an agreement, contract, or 
                                transaction that is listed on a national 
                                securities exchange registered under 
                                section 6(a) of the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78f(a)); or
                                    ``(V) an identified banking product, 
                                as defined in section 402(b) of the 
                                Legal Certainty for Bank Products Act of 
                                2000 (7 U.S.C.27(b)).
                          ``(iii) <<NOTE: Applicability.>>  
                      Enforcement.--Sections 4(a), 4(b), and 4b apply to 
                      any agreement, contract, or transaction described 
                      in clause (i), as if the agreement, contract, or 
                      transaction was a contract of sale of a commodity 
                      for future delivery.
                          ``(iv) Eligible commercial entity.--For 
                      purposes of this subparagraph, an agricultural 
                      producer, packer, or handler shall be considered 
                      to be an eligible commercial entity for any 
                      agreement, contract, or transaction for a 
                      commodity in connection with the line of business 
                      of the agricultural producer, packer, or 
                      handler.''.

    (b) Gramm-Leach-Bliley Act.--Section 206(a) of the Gramm-Leach-
Bliley Act (Public Law 106-102; 15 U.S.C. 78c note) is amended, in the 
matter preceding paragraph (1), by striking ``For purposes of'' and 
inserting ``Except as provided in subsection (e), for purposes of''.
    (c) Conforming Amendments Relating to Retail Foreign Exchange 
Transactions.--
            (1) Section 2(c)(2)(B)(i)(II) of the Commodity Exchange Act 
        (7 U.S.C. 2(c)(2)(B)(i)(II)) is amended--
                    (A) in item (aa), by inserting ``United States'' 
                before ``financial institution'';
                    (B) by striking items (dd) and (ff);
                    (C) by redesignating items (ee) and (gg) as items 
                (dd) and (ff), respectively; and
                    (D) in item (dd) (as so redesignated), by striking 
                the semicolon and inserting ``; or''.

[[Page 124 STAT. 1734]]

            (2) Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 
        2(c)(2)) (as amended by subsection (a)(2)) is amended by adding 
        at the end the following:
                    ``(E) Prohibition.--
                          ``(i) Definition of federal regulatory 
                      agency.--In this subparagraph, the term `Federal 
                      regulatory agency' means--
                                    ``(I) the Commission;
                                    ``(II) the Securities and Exchange 
                                Commission;
                                    ``(III) an appropriate Federal 
                                banking agency;
                                    ``(IV) the National Credit Union 
                                Association; and
                                    ``(V) the Farm Credit 
                                Administration.
                          ``(ii) <<NOTE: Contracts.>>  Prohibition.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), a person 
                                described in subparagraph (B)(i)(II) for 
                                which there is a Federal regulatory 
                                agency shall not offer to, or enter into 
                                with, a person that is not an eligible 
                                contract participant, any agreement, 
                                contract, or transaction in foreign 
                                currency described in subparagraph 
                                (B)(i)(I) except pursuant to a rule or 
                                regulation of a Federal regulatory 
                                agency allowing the agreement, contract, 
                                or transaction under such terms and 
                                conditions as the Federal regulatory 
                                agency shall prescribe.
                                    ``(II) Effective date.--With regard 
                                to persons described in subparagraph 
                                (B)(i)(II) for which a Federal 
                                regulatory agency has issued a proposed 
                                rule concerning agreements, contracts, 
                                or transactions in foreign currency 
                                described in subparagraph (B)(i)(I) 
                                prior to the date of enactment of this 
                                subclause, subclause (I) shall take 
                                effect 90 days after the date of 
                                enactment of this subclause.
                          ``(iii) Requirements of rules and 
                      regulations.--
                                    ``(I) In general.--The rules and 
                                regulations described in clause (ii) 
                                shall prescribe appropriate requirements 
                                with respect to--
                                            ``(aa) disclosure;
                                            ``(bb) recordkeeping;
                                            ``(cc) capital and margin;
                                            ``(dd) reporting;
                                            ``(ee) business conduct;
                                            ``(ff) documentation; and
                                            
                                        ``(gg) <<NOTE: Determination.>>  
                                        such other standards or 
                                        requirements as the Federal 
                                        regulatory agency shall 
                                        determine to be necessary.
                                    ``(II) Treatment.--The rules or 
                                regulations described in clause (ii) 
                                shall treat all agreements, contracts, 
                                and transactions in foreign currency 
                                described in subparagraph (B)(i)(I), and 
                                all agreements, contracts, and 
                                transactions in foreign currency that 
                                are functionally or economically similar 
                                to agreements, contracts, or 
                                transactions described in subparagraph 
                                (B)(i)(I), similarly.''.

[[Page 124 STAT. 1735]]

SEC. <<NOTE: 7 USC 1a note.>>  743. OTHER AUTHORITY.

    Unless otherwise provided by the amendments made by this subtitle, 
the amendments made by this subtitle do not divest any appropriate 
Federal banking agency, the Commodity Futures Trading Commission, the 
Securities and Exchange Commission, or other Federal or State agency of 
any authority derived from any other applicable law.
SEC. 744. RESTITUTION REMEDIES.

    Section 6c(d) of the Commodity Exchange Act (7 U.S.C. 13a-1(d)) is 
amended by adding at the end the following:
            ``(3) Equitable remedies.--In any action brought under this 
        section, the Commission may seek, and the court may impose, on a 
        proper showing, on any person found in the action to have 
        committed any violation, equitable remedies including--
                    ``(A) restitution to persons who have sustained 
                losses proximately caused by such violation (in the 
                amount of such losses); and
                    ``(B) disgorgement of gains received in connection 
                with such violation.''.
SEC. 745. ENHANCED COMPLIANCE BY REGISTERED ENTITIES.

    (a) Effect of Interpretation.--Section 5c(a) of the Commodity 
Exchange Act (7 U.S.C. 7a-2(a)) is amended by striking paragraph (2) and 
inserting the following:
            ``(2) Effect of interpretation.--An interpretation issued 
        under paragraph (1) may provide the exclusive means for 
        complying with each section described in paragraph (1).''.

    (b) New Contracts, New Rules, and Rule Amendments.--Section 5c of 
the Commodity Exchange Act (7 U.S.C. 7a-2) is amended by striking 
subsection (c) and inserting the following:
    ``(c) <<NOTE: Certification.>>  New Contracts, New Rules, and Rule 
Amendments.--
            ``(1) In general.--A registered entity may elect to list for 
        trading or accept for clearing any new contract, or other 
        instrument, or may elect to approve and implement any new rule 
        or rule amendment, by providing to the Commission (and the 
        Secretary of the Treasury, in the case of a contract of sale of 
        a government security for future delivery (or option on such a 
        contract) or a rule or rule amendment specifically related to 
        such a contract) a written certification that the new contract 
        or instrument or clearing of the new contract or instrument, new 
        rule, or rule amendment complies with this Act (including 
        regulations under this Act).
            ``(2) Rule review.--The new rule or rule amendment described 
        in paragraph (1) <<NOTE: Effective 
        date. Notification. Determination.>>  shall become effective, 
        pursuant to the certification of the registered entity and 
        notice of such certification to its members (in a manner to be 
        determined by the Commission), on the date that is 10 business 
        days after the date on which the Commission receives the 
        certification (or such shorter period as determined by the 
        Commission by rule or regulation) unless the Commission notifies 
        the registered entity within such time that it is staying the 
        certification because there exist novel or complex issues that 
        require additional time to analyze, an inadequate explanation by 
        the submitting registered entity, or a potential inconsistency 
        with this Act (including regulations under this Act).

[[Page 124 STAT. 1736]]

            ``(3) <<NOTE: Notification. Time period.>>  Stay of 
        certification for rules.--
                    ``(A) A notification by the Commission pursuant to 
                paragraph (2) shall stay the certification of the new 
                rule or rule amendment for up to an additional 90 days 
                from the date of the notification.
                    ``(B) <<NOTE: Effective date.>>  A rule or rule 
                amendment subject to a stay pursuant to subparagraph (A) 
                shall become effective, pursuant to the certification of 
                the registered entity, at the expiration of the period 
                described in subparagraph (A) unless the Commission--
                          ``(i) withdraws the stay prior to that time; 
                      or
                          ``(ii) notifies the registered entity during 
                      such period that it objects to the proposed 
                      certification on the grounds that it is 
                      inconsistent with this Act (including regulations 
                      under this Act).
                    ``(C) <<NOTE: Public comment.>>  The Commission 
                shall provide a not less than 30-day public comment 
                period, within the 90-day period in which the stay is in 
                effect as described in subparagraph (A), whenever the 
                Commission reviews a rule or rule amendment pursuant to 
                a notification by the Commission under this paragraph.
            ``(4) Prior approval.--
                    ``(A) In general.--A registered entity may request 
                that the Commission grant prior approval to any new 
                contract or other instrument, new rule, or rule 
                amendment.
                    ``(B) Prior approval required.--Notwithstanding any 
                other provision of this section, a designated contract 
                market shall submit to the Commission for prior approval 
                each rule amendment that materially changes the terms 
                and conditions, as determined by the Commission, in any 
                contract of sale for future delivery of a commodity 
                specifically enumerated in section 1a(10) (or any option 
                thereon) traded through its facilities if the rule 
                amendment applies to contracts and delivery months which 
                have already been listed for trading and have open 
                interest.
                    ``(C) Deadline.--If prior approval is requested 
                under subparagraph (A), the Commission shall take final 
                action on the request not later than 90 days after 
                submission of the request, unless the person submitting 
                the request agrees to an extension of the time 
                limitation established under this subparagraph.
            ``(5) Approval.--
                    ``(A) Rules.--The Commission shall approve a new 
                rule, or rule amendment, of a registered entity unless 
                the Commission finds that the new rule, or rule 
                amendment, is inconsistent with this subtitle (including 
                regulations).
                    ``(B) Contracts and instruments.--The Commission 
                shall approve a new contract or other instrument unless 
                the Commission finds that the new contract or other 
                instrument would violate this Act (including 
                regulations).
                    ``(C) Special rule for review and approval of event 
                contracts and swaps contracts.--
                          ``(i) Event contracts.--In connection with the 
                      listing of agreements, contracts, transactions, or 
                      swaps in excluded commodities that are based upon 
                      the occurrence, extent of an occurrence, or 
                      contingency (other than a change in the price, 
                      rate, value, or levels of

[[Page 124 STAT. 1737]]

                      a commodity described in section 1a(2)(i)), by a 
                      designated contract market or swap execution 
                      facility, the Commission may determine that such 
                      agreements, contracts, or transactions are 
                      contrary to the public interest if the agreements, 
                      contracts, or transactions involve--
                                    ``(I) activity that is unlawful 
                                under any Federal or State law;
                                    ``(II) terrorism;
                                    ``(III) assassination;
                                    ``(IV) war;
                                    ``(V) gaming; or
                                    ``(VI) other similar activity 
                                determined by the Commission, by rule or 
                                regulation, to be contrary to the public 
                                interest.
                          ``(ii) Prohibition.--No agreement, contract, 
                      or transaction determined by the Commission to be 
                      contrary to the public interest under clause (i) 
                      may be listed or made available for clearing or 
                      trading on or through a registered entity.
                          ``(iii) Swaps contracts.--
                                    ``(I) In general.--
                                In <<NOTE: Determination.>>  connection 
                                with the listing of a swap for clearing 
                                by a derivatives clearing organization, 
                                the Commission shall determine, upon 
                                request or on its own motion, the 
                                initial eligibility, or the continuing 
                                qualification, of a derivatives clearing 
                                organization to clear such a swap under 
                                those criteria, conditions, or rules 
                                that the Commission, in its discretion, 
                                determines.
                                    ``(II) Requirements.--Any such 
                                criteria, conditions, or rules shall 
                                consider--
                                            ``(aa) the financial 
                                        integrity of the derivatives 
                                        clearing organization; and
                                            ``(bb) any other factors 
                                        which the Commission determines 
                                        may be appropriate.
                          ``(iv) Deadline.--The Commission shall take 
                      final action under clauses (i) and (ii) in not 
                      later than 90 days from the commencement of its 
                      review unless the party seeking to offer the 
                      contract or swap agrees to an extension of this 
                      time limitation.''.

    (c) Violation of Core Principles.--Section 5c of the Commodity 
Exchange Act (7 U.S.C. 7a-2) is amended by striking subsection (d).
SEC. 746. INSIDER TRADING.

    Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is 
amended by adding at the end the following:
            ``(3) Contract of sale.--It shall be unlawful for any 
        employee or agent of any department or agency of the Federal 
        Government who, by virtue of the employment or position of the 
        employee or agent, acquires information that may affect or tend 
        to affect the price of any commodity in interstate commerce, or 
        for future delivery, or any swap, and which information has not 
        been disseminated by the department or agency of the Federal 
        Government holding or creating the information in a manner which 
        makes it generally available to the trading public, or disclosed 
        in a criminal, civil, or

[[Page 124 STAT. 1738]]

        administrative hearing, or in a congressional, administrative, 
        or Government Accountability Office report, hearing, audit, or 
        investigation, to use the information in his personal capacity 
        and for personal gain to enter into, or offer to enter into--
                    ``(A) a contract of sale of a commodity for future 
                delivery (or option on such a contract);
                    ``(B) an option (other than an option executed or 
                traded on a national securities exchange registered 
                pursuant to section 6(a) of the Securities Exchange Act 
                of 1934 (15 U.S.C. 78f(a)); or
                    ``(C) a swap.
            ``(4) Nonpublic information.--
                    ``(A) Imparting of nonpublic information.--It shall 
                be unlawful for any employee or agent of any department 
                or agency of the Federal Government who, by virtue of 
                the employment or position of the employee or agent, 
                acquires information that may affect or tend to affect 
                the price of any commodity in interstate commerce, or 
                for future delivery, or any swap, and which information 
                has not been disseminated by the department or agency of 
                the Federal Government holding or creating the 
                information in a manner which makes it generally 
                available to the trading public, or disclosed in a 
                criminal, civil, or administrative hearing, or in a 
                congressional, administrative, or Government 
                Accountability Office report, hearing, audit, or 
                investigation, to impart the information in his personal 
                capacity and for personal gain with intent to assist 
                another person, directly or indirectly, to use the 
                information to enter into, or offer to enter into--
                          ``(i) a contract of sale of a commodity for 
                      future delivery (or option on such a contract);
                          ``(ii) an option (other than an option 
                      executed or traded on a national securities 
                      exchange registered pursuant to section 6(a) of 
                      the Securities Exchange Act of 1934 (15 U.S.C. 
                      78f(a)); or
                          ``(iii) a swap.
                    ``(B) Knowing use.--It shall be unlawful for any 
                person who receives information imparted by any employee 
                or agent of any department or agency of the Federal 
                Government as described in subparagraph (A) to knowingly 
                use such information to enter into, or offer to enter 
                into--
                          ``(i) a contract of sale of a commodity for 
                      future delivery (or option on such a contract);
                          ``(ii) an option (other than an option 
                      executed or traded on a national securities 
                      exchange registered pursuant to section 6(a) of 
                      the Securities Exchange Act of 1934 (15 U.S.C. 
                      78f(a)); or
                          ``(iii) a swap.
                    ``(C) Theft of nonpublic information.--It shall be 
                unlawful for any person to steal, convert, or 
                misappropriate, by any means whatsoever, information 
                held or created by any department or agency of the 
                Federal Government that may affect or tend to affect the 
                price of any commodity in interstate commerce, or for 
                future delivery, or any swap, where such person knows, 
                or acts in reckless disregard of the fact, that such 
                information has not been disseminated by the department 
                or agency of the Federal Government

[[Page 124 STAT. 1739]]

                holding or creating the information in a manner which 
                makes it generally available to the trading public, or 
                disclosed in a criminal, civil, or administrative 
                hearing, or in a congressional, administrative, or 
                Government Accountability Office report, hearing, audit, 
                or investigation, and to use such information, or to 
                impart such information with the intent to assist 
                another person, directly or indirectly, to use such 
                information to enter into, or offer to enter into--
                          ``(i) a contract of sale of a commodity for 
                      future delivery (or option on such a contract);
                          ``(ii) an option (other than an option 
                      executed or traded on a national securities 
                      exchange registered pursuant to section 6(a) of 
                      the Securities Exchange Act of 1934 (15 U.S.C. 
                      78f(a)); or
                          ``(iii) a swap, provided, however, that 
                      nothing in this subparagraph shall preclude a 
                      person that has provided information concerning, 
                      or generated by, the person, its operations or 
                      activities, to any employee or agent of any 
                      department or agency of the Federal Government, 
                      voluntarily or as required by law, from using such 
                      information to enter into, or offer to enter into, 
                      a contract of sale, option, or swap described in 
                      clauses (i), (ii), or (iii).''.
SEC. 747. ANTIDISRUPTIVE PRACTICES AUTHORITY.

    Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) (as 
amended by section 746) is amended by adding at the end the following:
            ``(5) Disruptive practices.--It shall be unlawful for any 
        person to engage in any trading, practice, or conduct on or 
        subject to the rules of a registered entity that--
                    ``(A) violates bids or offers;
                    ``(B) demonstrates intentional or reckless disregard 
                for the orderly execution of transactions during the 
                closing period; or
                    ``(C) is, is of the character of, or is commonly 
                known to the trade as, `spoofing' (bidding or offering 
                with the intent to cancel the bid or offer before 
                execution).
            ``(6) Rulemaking authority.--The Commission may make and 
        promulgate such rules and regulations as, in the judgment of the 
        Commission, are reasonably necessary to prohibit the trading 
        practices described in paragraph (5) and any other trading 
        practice that is disruptive of fair and equitable trading.
            ``(7) Use of swaps to defraud.--It shall be unlawful for any 
        person to enter into a swap knowing, or acting in reckless 
        disregard of the fact, that its counterparty will use the swap 
        as part of a device, scheme, or artifice to defraud any third 
        party.''.
SEC. 748. COMMODITY WHISTLEBLOWER INCENTIVES AND PROTECTION.

    The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by adding 
at the end the following:
``SEC. 23. <<NOTE: 7 USC 26.>>  COMMODITY WHISTLEBLOWER INCENTIVES 
                      AND PROTECTION.

    ``(a) Definitions.--In this section:

[[Page 124 STAT. 1740]]

            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by the Commission under this 
        Act that results in monetary sanctions exceeding $1,000,000.
            ``(2) Fund.--The term `Fund' means the Commodity Futures 
        Trading Commission Customer Protection Fund established under 
        subsection (g).
            ``(3) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative action 
        means--
                    ``(A) any monies, including penalties, disgorgement, 
                restitution, and interest ordered to be paid; and
                    ``(B) any monies deposited into a disgorgement fund 
                or other fund pursuant to section 308(b) of the 
                Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a 
                result of such action or any settlement of such action.
            ``(4) Original information.--The term `original information' 
        means information that--
                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to the Commission from any other 
                source, unless the whistleblower is the original source 
                of the information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought by 
        the Commission under this Act, means any judicial or 
        administrative action brought by an entity described in 
        subclauses (I) through (VI) of subsection (h)(2)(C) that is 
        based upon the original information provided by a whistleblower 
        pursuant to subsection (a) that led to the successful 
        enforcement of the Commission action.
            ``(6) Successful resolution.--The term `successful 
        resolution', when used with respect to any judicial or 
        administrative action brought by the Commission under this Act, 
        includes any settlement of such action.
            ``(7) Whistleblower.--The term `whistleblower' means any 
        individual, or 2 or more individuals acting jointly, who 
        provides information relating to a violation of this Act to the 
        Commission, in a manner established by rule or regulation by the 
        Commission.

    ``(b) Awards.--
            ``(1) <<NOTE: Regulations.>>  In general.--In any covered 
        judicial or administrative action, or related action, the 
        Commission, under regulations prescribed by the Commission and 
        subject to subsection (c), shall pay an award or awards to 1 or 
        more whistleblowers who voluntarily provided original 
        information to the Commission that led to the successful 
        enforcement of the covered judicial or administrative action, or 
        related action, in an aggregate amount equal to--

[[Page 124 STAT. 1741]]

                    ``(A) not less than 10 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions; and
                    ``(B) not more than 30 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph 
        (1) shall be paid from the Fund.

    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Commission.
                    ``(B) Criteria.--In determining the amount of an 
                award made under subsection (b), the Commission--
                          ``(i) shall take into consideration--
                                    ``(I) the significance of the 
                                information provided by the 
                                whistleblower to the success of the 
                                covered judicial or administrative 
                                action;
                                    ``(II) the degree of assistance 
                                provided by the whistleblower and any 
                                legal representative of the 
                                whistleblower in a covered judicial or 
                                administrative action;
                                    ``(III) the programmatic interest of 
                                the Commission in deterring violations 
                                of the Act (including regulations under 
                                the Act) by making awards to 
                                whistleblowers who provide information 
                                that leads to the successful enforcement 
                                of such laws; and
                                    ``(IV) such additional relevant 
                                factors as the Commission may establish 
                                by rule or regulation; and
                          ``(ii) shall not take into consideration the 
                      balance of the Fund.
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original information 
                submitted to the Commission, a member, officer, or 
                employee of--
                          ``(i) a appropriate regulatory agency;
                          ``(ii) the Department of Justice;
                          ``(iii) a registered entity;
                          ``(iv) a registered futures association;
                          ``(v) a self-regulatory organization as 
                      defined in section 3(a) of the Securities Exchange 
                      Act of 1934 (15 U.S.C. 78c(a)); or
                          ``(vi) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section;
                    ``(C) to any whistleblower who submits information 
                to the Commission that is based on the facts underlying 
                the covered action submitted previously by another 
                whistleblower;

[[Page 124 STAT. 1742]]

                    ``(D) to any whistleblower who fails to submit 
                information to the Commission in such form as the 
                Commission may, by rule or regulation, require.

    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who makes 
        a claim for an award under subsection (b) may be represented by 
        counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who anonymously 
                makes a claim for an award under subsection (b) shall be 
                represented by counsel if the whistleblower submits the 
                information upon which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose the identity 
                of the whistleblower and provide such other information 
                as the Commission may require, directly or through 
                counsel for the whistleblower.

    ``(e) No Contract Necessary.--No contract with the Commission is 
necessary for any whistleblower to receive an award under subsection 
(b), unless otherwise required by the Commission, by rule or regulation.
    ``(f) Appeals.--
            ``(1) In general.--Any determination made under this 
        section, including whether, to whom, or in what amount to make 
        awards, shall be in the discretion of the Commission.
            ``(2) Appeals.--Any <<NOTE: Deadline.>>  determination 
        described in paragraph (1) may be appealed to the appropriate 
        court of appeals of the United States not more than 30 days 
        after the determination is issued by the Commission.
            ``(3) Review.--The court shall review the determination made 
        by the Commission in accordance with section 7064 of title 5, 
        United States Code.

    ``(g) Commodity Futures Trading Commission Customer Protection 
Fund.--
            ``(1) Establishment.--There is established in the Treasury 
        of the United States a revolving fund to be known as the 
        `Commodity Futures Trading Commission Customer Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to the 
        Commission, without further appropriation or fiscal year 
        limitation, for--
                    ``(A) the payment of awards to whistleblowers as 
                provided in subsection (a); and
                    ``(B) the funding of customer education initiatives 
                designed to help customers protect themselves against 
                fraud or other violations of this Act, or the rules and 
                regulations thereunder.
            ``(3) Deposits and credits.--There shall be deposited into 
        or credited to the Fund:
                    ``(A) Monetary sanctions.--Any monetary sanctions 
                collected by the Commission in any covered judicial or 
                administrative action that is not otherwise distributed 
                to victims of a violation of this Act or the rules and 
                regulations thereunder underlying such action, unless 
                the balance of the Fund at the time the monetary 
                judgment is collected exceeds $100,000,000.

[[Page 124 STAT. 1743]]

                    ``(B) Additional amounts.--If the amounts deposited 
                into or credited to the Fund under subparagraph (A) are 
                not sufficient to satisfy an award made under subsection 
                (b), there shall be deposited into or credited to the 
                Fund an amount equal to the unsatisfied portion of the 
                award from any monetary sanction collected by the 
                Commission in any judicial or administrative action 
                brought by the Commission under this Act that is based 
                on information provided by a whistleblower.
                    ``(C) Investment income.--All income from 
                investments made under paragraph (4).
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the Treasury to 
                invest the portion of the Fund that is not, in the 
                Commission's judgment, required to meet the current 
                needs of the Fund.
                    ``(B) Eligible investments.--Investments shall be 
                made by the Secretary of the Treasury in obligations of 
                the United States or obligations that are guaranteed as 
                to principal and interest by the United States, with 
                maturities suitable to the needs of the Fund as 
                determined by the Commission.
                    ``(C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, any 
                obligations held in the Fund shall be credited to, and 
                form a part of, the Fund.
            ``(5) Reports to congress.--Not later than October 30 of 
        each year, the Commission shall transmit to the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate, and the 
        Committee on Agriculture of the House of Representatives a 
        report on--
                    ``(A) the Commission's whistleblower award program 
                under this section, including a description of the 
                number of awards granted and the types of cases in which 
                awards were granted during the preceding fiscal year;
                    ``(B) customer education initiatives described in 
                paragraph (2)(B) that were funded by the Fund during the 
                preceding fiscal year;
                    ``(C) the balance of the Fund at the beginning of 
                the preceding fiscal year;
                    ``(D) the amounts deposited into or credited to the 
                Fund during the preceding fiscal year;
                    ``(E) the amount of earnings on investments of 
                amounts in the Fund during the preceding fiscal year;
                    ``(F) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers pursuant to 
                subsection (b);
                    ``(G) the amount paid from the Fund during the 
                preceding fiscal year for customer education initiatives 
                described in paragraph (2)(B);
                    ``(H) the balance of the Fund at the end of the 
                preceding fiscal year; and
                    ``(I) a complete set of audited financial 
                statements, including a balance sheet, income statement, 
                and cash flow analysis.

    ``(h) Protection of Whistleblowers.--

[[Page 124 STAT. 1744]]

            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may discharge, 
                demote, suspend, threaten, harass, directly or 
                indirectly, or in any other manner discriminate against, 
                a whistleblower in the terms and conditions of 
                employment because of any lawful act done by the 
                whistleblower--
                          ``(i) in providing information to the 
                      Commission in accordance with subsection (b); or
                          ``(ii) in assisting in any investigation or 
                      judicial or administrative action of the 
                      Commission based upon or related to such 
                      information.
                    ``(B) Enforcement.--
                          ``(i) Cause of action.--An individual who 
                      alleges discharge or other discrimination in 
                      violation of subparagraph (A) may bring an action 
                      under this subsection in the appropriate district 
                      court of the United States for the relief provided 
                      in subparagraph (C), unless the individual who is 
                      alleging discharge or other discrimination in 
                      violation of subparagraph (A) is an employee of 
                      the Federal Government, in which case the 
                      individual shall only bring an action under 
                      section 1221 of title 5, United States Code.
                          ``(ii) Subpoenas.--A subpoena requiring the 
                      attendance of a witness at a trial or hearing 
                      conducted under this subsection may be served at 
                      any place in the United States.
                          ``(iii) Statute of limitations.--An action 
                      under this subsection may not be brought more than 
                      2 years after the date on which the violation 
                      reported in subparagraph (A) is committed.
                    ``(C) Relief.--Relief for an individual prevailing 
                in an action brought under subparagraph (B) shall 
                include--
                          ``(i) reinstatement with the same seniority 
                      status that the individual would have had, but for 
                      the discrimination;
                          ``(ii) the amount of back pay otherwise owed 
                      to the individual, with interest; and
                          ``(iii) compensation for any special damages 
                      sustained as a result of the discharge or 
                      discrimination, including litigation costs, expert 
                      witness fees, and reasonable attorney's fees.
            ``(2) Confidentiality.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the Commission, and any 
                officer or employee of the Commission, shall not 
                disclose any information, including information provided 
                by a whistleblower to the Commission, which could 
                reasonably be expected to reveal the identity of a 
                whistleblower, except in accordance with the provisions 
                of section 552a of title 5, United States Code, unless 
                and until required to be disclosed to a defendant or 
                respondent in connection with a public proceeding 
                instituted by the Commission or any entity described in 
                subparagraph (C). For purposes of section 552 of title 
                5, United States Code, this paragraph shall be 
                considered a statute described in subsection (b)(3)(B) 
                of such section 552.

[[Page 124 STAT. 1745]]

                    ``(B) Effect.--Nothing in this paragraph is intended 
                to limit the ability of the Attorney General to present 
                such evidence to a grand jury or to share such evidence 
                with potential witnesses or defendants in the course of 
                an ongoing criminal investigation.
                    ``(C) Availability to government agencies.--
                          ``(i) In general.--Without the loss of its 
                      status as confidential in the hands of the 
                      Commission, all information referred to in 
                      subparagraph (A) may, in the discretion of the 
                      Commission, when determined by the Commission to 
                      be necessary or appropriate to accomplish the 
                      purposes of this Act and protect customers and in 
                      accordance with clause (ii), be made available 
                      to--
                                    ``(I) the Department of Justice;
                                    ``(II) an appropriate department or 
                                agency of the Federal Government, acting 
                                within the scope of its jurisdiction;
                                    ``(III) a registered entity, 
                                registered futures association, or self-
                                regulatory organization as defined in 
                                section 3(a) of the Securities Exchange 
                                Act of 1934 (15 U.S.C. 78c(a));
                                    ``(IV) a State attorney general in 
                                connection with any criminal 
                                investigation;
                                    ``(V) an appropriate department or 
                                agency of any State, acting within the 
                                scope of its jurisdiction; and
                                    ``(VI) a foreign futures authority.
                          ``(ii) Maintenance of information.--Each of 
                      the entities, agencies, or persons described in 
                      clause (i) shall maintain information described in 
                      that clause as confidential, in accordance with 
                      the requirements in subparagraph (A).
                          ``(iii) Study on impact of foia exemption on 
                      commodity futures trading commission.--
                                    ``(I) Study.--The Inspector General 
                                of the Commission shall conduct a 
                                study--
                                            ``(aa) on whether the 
                                        exemption under section 
                                        552(b)(3) of title 5, United 
                                        States Code (known as the 
                                        Freedom of Information Act) 
                                        established in paragraph (2)(A) 
                                        aids whistleblowers in 
                                        disclosing information to the 
                                        Commission;
                                            ``(bb) on what impact the 
                                        exemption has had on the 
                                        public's ability to access 
                                        information about the 
                                        Commission's regulation of 
                                        commodity futures and option 
                                        markets; and
                                            ``(cc) to make any 
                                        recommendations on whether the 
                                        Commission should continue to 
                                        use the exemption.
                                    ``(II) Report.--Not later than 30 
                                months after the date of enactment of 
                                this clause, the Inspector General 
                                shall--
                                            ``(aa) submit a report on 
                                        the findings of the study 
                                        required under this clause to 
                                        the Committee on Banking, 
                                        Housing, and Urban Affairs of 
                                        the Senate and the Committee on

[[Page 124 STAT. 1746]]

                                        Financial Services of the House 
                                        of Representatives; and
                                            ``(bb) <<NOTE: Public 
                                        information. Web posting.>>  
                                        make the report available to the 
                                        public through publication of a 
                                        report on the website of the 
                                        Commission.
            ``(3) Rights retained.--Nothing in this section shall be 
        deemed to diminish the rights, privileges, or remedies of any 
        whistleblower under any Federal or State law, or under any 
        collective bargaining agreement.

    ``(i) Rulemaking Authority.--The Commission shall have the authority 
to issue such rules and regulations as may be necessary or appropriate 
to implement the provisions of this section consistent with the purposes 
of this section.
    ``(j) <<NOTE: Deadline.>>  Implementing Rules.--The Commission shall 
issue final rules or regulations implementing the provisions of this 
section not later than 270 days after the date of enactment of the Wall 
Street Transparency and Accountability Act of 2010.

    ``(k) Original Information.--Information submitted to the Commission 
by a whistleblower in accordance with rules or regulations implementing 
this section shall not lose its status as original information solely 
because the whistleblower submitted such information prior to the 
effective date of such rules or regulations, provided such information 
was submitted after the date of enactment of the Wall Street 
Transparency and Accountability Act of 2010.
    ``(l) Awards.--A whistleblower may receive an award pursuant to this 
section regardless of whether any violation of a provision of this Act, 
or a rule or regulation thereunder, underlying the judicial or 
administrative action upon which the award is based occurred prior to 
the date of enactment of the Wall Street Transparency and Accountability 
Act of 2010.
    ``(m) Provision of False Information.--A whistleblower who knowingly 
and willfully makes any false, fictitious, or fraudulent statement or 
representation, or who makes or uses any false writing or document 
knowing the same to contain any false, fictitious, or fraudulent 
statement or entry, shall not be entitled to an award under this section 
and shall be subject to prosecution under section 1001 of title 18, 
United States Code.
    ``(n) Nonenforceability of Certain Provisions Waiving Rights and 
Remedies or Requiring Arbitration of Disputes.--
            ``(1) Waiver of rights and remedies.--The rights and 
        remedies provided for in this section may not be waived by any 
        agreement, policy form, or condition of employment including by 
        a predispute arbitration agreement.
            ``(2) Predispute arbitration agreements.--No predispute 
        arbitration agreement shall be valid or enforceable, if the 
        agreement requires arbitration of a dispute arising under this 
        section.''.
SEC. 749. CONFORMING AMENDMENTS.

    (a) Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) (as 
amended by section 724) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                          (i) by striking ``engage as'' and inserting 
                      ``be a''; and

[[Page 124 STAT. 1747]]

                          (ii) by striking ``or introducing broker'' and 
                      all that follows through ``or derivatives 
                      transaction execution facility'';
                    (B) in paragraph (1), by striking ``or introducing 
                broker''; and
                    (C) in paragraph (2), by striking ``if a futures 
                commission merchant,''; and
            (2) by adding at the end the following:

    ``(g) It shall be unlawful for any person to be an introducing 
broker unless such person shall have registered under this Act with the 
Commission as an introducing broker and such registration shall not have 
expired nor been suspended nor revoked.''.
    (b) Section 4m(3) of the Commodity Exchange Act (7 U.S.C. 6m(3)) is 
amended--
            (1) by striking ``(3) Subsection (1) of this section'' and 
        inserting the following:

    ``(3) Exception.--
            ``(A) In general.--Paragraph (1)''; and
            (2) by striking ``to any investment trust'' and all that 
        follows through the period at the end and inserting the 
        following: ``to any commodity pool that is engaged primarily in 
        trading commodity interests.
            ``(B) Engaged primarily.--For purposes of subparagraph (A), 
        a commodity trading advisor or a commodity pool shall be 
        considered to be `engaged primarily' in the business of being a 
        commodity trading advisor or commodity pool if it is or holds 
        itself out to the public as being engaged primarily, or proposes 
        to engage primarily, in the business of advising on commodity 
        interests or investing, reinvesting, owning, holding, or trading 
        in commodity interests, respectively.
            ``(C) Commodity interests.--For purposes of this paragraph, 
        commodity interests shall include contracts of sale of a 
        commodity for future delivery, options on such contracts, 
        security futures, swaps, leverage contracts, foreign exchange, 
        spot and forward contracts on physical commodities, and any 
        monies held in an account used for trading commodity 
        interests.''.

    (c) Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is 
amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``, 5a(d),''; and
                    (B) by striking ``and section (2)(h)(7) with respect 
                to significant price discovery contracts,''; and
            (2) in subsection (f)(1), by striking ``section 4d(c) of 
        this Act'' and inserting ``section 4d(e)''.

    (d) Section 5e of the Commodity Exchange Act (7 U.S.C. 7b) is 
amended by striking ``or revocation of the right of an electronic 
trading facility to rely on the exemption set forth in section 2(h)(3) 
with respect to a significant price discovery contract,''.
    (e) Section 6(b) of the Commodity Exchange Act (7 U.S.C. 8(b)) is 
amended in the first sentence by striking ``, or to revoke the right of 
an electronic trading facility to rely on the exemption set forth in 
section 2(h)(3) with respect to a significant price discovery 
contract,''.
    (f) Section 12(e)(2)(B) of the Commodity Exchange Act (7 U.S.C. 
16(e)(2)(B)) is amended--

[[Page 124 STAT. 1748]]

            (1) by striking ``section 2(c), 2(d), 2(f), or 2(g) of this 
        Act'' and inserting ``section 2(c) or 2(f) of this Act''; and
            (2) by striking ``2(h) or''.

    (g) Section 17(r)(1) of the Commodity Exchange Act (7 U.S.C. 
21(r)(1)) is amended by striking ``section 4d(c) of this Act'' and 
inserting ``section 4d(e)''.
    (h) Section 22 of the Commodity Exchange Act <<NOTE: 7 USC 25.>>  is 
amended--
            (1) in subsection (a)(1)(B), by--
                    (A) inserting ``or any swap'' after ``commodity)''; 
                and
                    (B) inserting ``or any swap'' after ``such 
                contract'';
            (2) in subsection (a)(1)(C), by adding at the end the 
        following:
                          ``(iv) a swap; or''; and
            (3) in subsection (b)(1)(A), by striking ``section 2(h)(7) 
        or sections 5 through 5c'' and inserting ``section 5, 5b, 5c, 
        5h, or 21''.

    (i) Section 408(2)(C) of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4421(2)(C)) is amended--
            (1) by striking ``section 2(c), 2(d), 2(f), or (2)(g) of 
        such Act'' and inserting ``section 2(c), 2(f), or 2(i) of that 
        Act''; and
            (2) by striking ``2(h) or''.
SEC. 750. STUDY ON OVERSIGHT OF CARBON MARKETS.

    (a) <<NOTE: Establishment.>>  Interagency Working Group.--There is 
established to carry out this section an interagency working group 
(referred to in this section as the ``interagency group'') composed of 
the following members or designees:
            (1) The Chairman of the Commodity Futures Trading Commission 
        (referred to in this section as the ``Commission''), who shall 
        serve as Chairman of the interagency group.
            (2) The Secretary of Agriculture.
            (3) The Secretary of the Treasury.
            (4) The Chairman of the Securities and Exchange Commission.
            (5) The Administrator of the Environmental Protection 
        Agency.
            (6) The Chairman of the Federal Energy Regulatory 
        Commission.
            (7) The Commissioner of the Federal Trade Commission.
            (8) The Administrator of the Energy Information 
        Administration.

    (b) Administrative Support.--The Commission shall provide the 
interagency group such administrative support services as are necessary 
to enable the interagency group to carry out the functions of the 
interagency group under this section.
    (c) Consultation.--In carrying out this section, the interagency 
group shall consult with representatives of exchanges, clearinghouses, 
self-regulatory bodies, major carbon market participants, consumers, and 
the general public, as the interagency group determines to be 
appropriate.
    (d) Study.--The interagency group shall conduct a study on the 
oversight of existing and prospective carbon markets to ensure an 
efficient, secure, and transparent carbon market, including oversight of 
spot markets and derivative markets.
    (e) Report.--Not later than 180 days after the date of enactment of 
this Act, the interagency group shall submit to Congress a report on the 
results of the study conducted under subsection

[[Page 124 STAT. 1749]]

(b), including recommendations for the oversight of existing and 
prospective carbon markets to ensure an efficient, secure, and 
transparent carbon market, including oversight of spot markets and 
derivative markets.
SEC. 751. ENERGY AND ENVIRONMENTAL MARKETS ADVISORY COMMITTEE.

    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) (as 
amended by section 727) is amended by adding at the end the following:
            ``(15) Energy and environmental markets advisory 
        committee.--
                    ``(A) Establishment.--
                          ``(i) In general.--An Energy and Environmental 
                      Markets Advisory Committee is hereby established.
                          ``(ii) Membership.--The Committee shall have 9 
                      members.
                          ``(iii) Activities.--The Committee's 
                      objectives and scope of activities shall be--
                                    ``(I) to conduct public meetings;
                                    ``(II) to submit reports and 
                                recommendations to the Commission 
                                (including dissenting or minority views, 
                                if any); and
                                    ``(III) otherwise to serve as a 
                                vehicle for discussion and communication 
                                on matters of concern to exchanges, 
                                firms, end users, and regulators 
                                regarding energy and environmental 
                                markets and their regulation by the 
                                Commission.
                    ``(B) Requirements.--
                          ``(i) In general.--The <<NOTE: Public 
                      meetings.>>  Committee shall hold public meetings 
                      at such intervals as are necessary to carry out 
                      the functions of the Committee, but not less 
                      frequently than 2 times per year.
                          ``(ii) Members.--Members shall be appointed to 
                      3-year terms, but may be removed for cause by vote 
                      of the Commission.
                    ``(C) Appointment.--The Commission shall appoint 
                members with a wide diversity of opinion and who 
                represent a broad spectrum of interests, including 
                hedgers and consumers.
                    ``(D) Reimbursement.--Members shall be entitled to 
                per diem and travel expense reimbursement by the 
                Commission.
                    ``(E) FACA.--The Committee shall not be subject to 
                the Federal Advisory Committee Act (5 U.S.C. App.).''.
SEC. 752. <<NOTE: Consultation. Standards. 15 USC 8325.>>  
                        INTERNATIONAL HARMONIZATION.

    (a) <<NOTE: Securities.>>  In order to promote effective and 
consistent global regulation of swaps and security-based swaps, the 
Commodity Futures Trading Commission, the Securities and Exchange 
Commission, and the prudential regulators (as that term is defined in 
section 1a(39) of the Commodity Exchange Act), as appropriate, shall 
consult and coordinate with foreign regulatory authorities on the 
establishment of consistent international standards with respect to the 
regulation (including fees) of swaps, security-based swaps, swap 
entities, and security-based swap entities and may agree to such 
information-sharing arrangements as may be deemed to be necessary or

[[Page 124 STAT. 1750]]

appropriate in the public interest or for the protection of investors, 
swap counterparties, and security-based swap counterparties.

    (b) <<NOTE: Contracts.>>  In order to promote effective and 
consistent global regulation of contracts of sale of a commodity for 
future delivery and options on such contracts, the Commodity Futures 
Trading Commission shall consult and coordinate with foreign regulatory 
authorities on the establishment of consistent international standards 
with respect to the regulation of contracts of sale of a commodity for 
future delivery and options on such contracts, and may agree to such 
information-sharing arrangements as may be deemed necessary or 
appropriate in the public interest for the protection of users of 
contracts of sale of a commodity for future delivery.
SEC. 753. ANTI-MANIPULATION AUTHORITY.

    (a) Prohibition Regarding Manipulation and False Information.--
Subsection (c) of section 6 of the Commodity Exchange Act (7 U.S.C. 9, 
15) is amended to read as follows:
    ``(c) Prohibition Regarding Manipulation and False Information.--
            ``(1) <<NOTE: Regulations. Deadline.>>  Prohibition against 
        manipulation.--It shall be unlawful for any person, directly or 
        indirectly, to use or employ, or attempt to use or employ, in 
        connection with any swap, or a contract of sale of any commodity 
        in interstate commerce, or for future delivery on or subject to 
        the rules of any registered entity, any manipulative or 
        deceptive device or contrivance, in contravention of such rules 
        and regulations as the Commission shall promulgate by not later 
        than 1 year after the date of enactment of the Dodd-Frank Wall 
        Street Reform and Consumer Protection Act, provided no rule or 
        regulation promulgated by the Commission shall require any 
        person to disclose to another person nonpublic information that 
        may be material to the market price, rate, or level of the 
        commodity transaction, except as necessary to make any statement 
        made to the other person in or in connection with the 
        transaction not misleading in any material respect.
                    ``(A) Special provision for manipulation by false 
                reporting.--Unlawful manipulation for purposes of this 
                paragraph shall include, but not be limited to, 
                delivering, or causing to be delivered for transmission 
                through the mails or interstate commerce, by any means 
                of communication whatsoever, a false or misleading or 
                inaccurate report concerning crop or market information 
                or conditions that affect or tend to affect the price of 
                any commodity in interstate commerce, knowing, or acting 
                in reckless disregard of the fact that such report is 
                false, misleading or inaccurate.
                    ``(B) Effect on other law.--Nothing in this 
                paragraph shall affect, or be construed to affect, the 
                applicability of section 9(a)(2).
                    ``(C) Good faith mistakes.--Mistakenly transmitting, 
                in good faith, false or misleading or inaccurate 
                information to a price reporting service would not be 
                sufficient to violate subsection (c)(1)(A).
            ``(2) Prohibition regarding false information.--It shall be 
        unlawful for any person to make any false or misleading 
        statement of a material fact to the Commission, including in any 
        registration application or any report filed with the

[[Page 124 STAT. 1751]]

        Commission under this Act, or any other information relating to 
        a swap, or a contract of sale of a commodity, in interstate 
        commerce, or for future delivery on or subject to the rules of 
        any registered entity, or to omit to state in any such statement 
        any material fact that is necessary to make any statement of a 
        material fact made not misleading in any material respect, if 
        the person knew, or reasonably should have known, the statement 
        to be false or misleading.
            ``(3) Other manipulation.--In addition to the prohibition in 
        paragraph (1), it shall be unlawful for any person, directly or 
        indirectly, to manipulate or attempt to manipulate the price of 
        any swap, or of any commodity in interstate commerce, or for 
        future delivery on or subject to the rules of any registered 
        entity.
            ``(4) Enforcement.--
                    ``(A) Authority of commission.--If the Commission 
                has reason to believe that any person (other than a 
                registered entity) is violating or has violated this 
                subsection, or any other provision of this Act 
                (including any rule, regulation, or order of the 
                Commission promulgated in accordance with this 
                subsection or any other provision of this Act), the 
                Commission may serve upon the person a complaint.
                    ``(B) Contents of complaint.--A complaint under 
                subparagraph (A) shall--
                          ``(i) contain a description of the charges 
                      against the person that is the subject of the 
                      complaint; and
                          ``(ii) have attached or contain a notice of 
                      hearing that specifies the date and location of 
                      the hearing regarding the complaint.
                    ``(C) Hearing.--A hearing described in subparagraph 
                (B)(ii)--
                          ``(i) <<NOTE: Deadline.>>  shall be held not 
                      later than 3 days after service of the complaint 
                      described in subparagraph (A);
                          ``(ii) shall require the person to show cause 
                      regarding why--
                                    ``(I) an order should not be made--
                                            ``(aa) to prohibit the 
                                        person from trading on, or 
                                        subject to the rules of, any 
                                        registered entity; and
                                            ``(bb) to direct all 
                                        registered entities to refuse 
                                        all privileges to the person 
                                        until further notice of the 
                                        Commission; and
                                    ``(II) the registration of the 
                                person, if registered with the 
                                Commission in any capacity, should not 
                                be suspended or revoked; and
                          ``(iii) may be held before--
                                    ``(I) the Commission; or
                                    ``(II) <<NOTE: Records.>>  an 
                                administrative law judge designated by 
                                the Commission, under which the 
                                administrative law judge shall ensure 
                                that all evidence is recorded in written 
                                form and submitted to the Commission.
            ``(5) Subpoena.--For the purpose of securing effective 
        enforcement of the provisions of this Act, for the purpose of 
        any investigation or proceeding under this Act, and for the 
        purpose of any action taken under section 12(f), any member

[[Page 124 STAT. 1752]]

        of the Commission or any Administrative Law Judge or other 
        officer designated by the Commission (except as provided in 
        paragraph (7)) may administer oaths and affirmations, subpoena 
        witnesses, compel their attendance, take evidence, and require 
        the production of any books, papers, correspondence, memoranda, 
        or other records that the Commission deems relevant or material 
        to the inquiry.
            ``(6) Witnesses.--The attendance of witnesses and the 
        production of any such records may be required from any place in 
        the United States, any State, or any foreign country or 
        jurisdiction at any designated place of hearing.
            ``(7) Service.--A subpoena issued under this section may be 
        served upon any person who is not to be found within the 
        territorial jurisdiction of any court of the United States in 
        such manner as the Federal Rules of Civil Procedure prescribe 
        for service of process in a foreign country, except that a 
        subpoena to be served on a person who is not to be found within 
        the territorial jurisdiction of any court of the United States 
        may be issued only on the prior approval of the Commission.
            ``(8) Refusal to obey.--In case of contumacy by, or refusal 
        to obey a subpoena issued to, any person, the Commission may 
        invoke the aid of any court of the United States within the 
        jurisdiction in which the investigation or proceeding is 
        conducted, or where such person resides or transacts business, 
        in requiring the attendance and testimony of witnesses and the 
        production of books, papers, correspondence, memoranda, and 
        other records. Such court may issue an order requiring such 
        person to appear before the Commission or member or 
        Administrative Law Judge or other officer designated by the 
        Commission, there to produce records, if so ordered, or to give 
        testimony touching the matter under investigation or in 
        question.
            ``(9) Failure to obey.--Any failure to obey such order of 
        the court may be punished by the court as a contempt thereof. 
        All process in any such case may be served in the judicial 
        district wherein such person is an inhabitant or transacts 
        business or wherever such person may be found.
            ``(10) Evidence.--On the receipt of evidence under paragraph 
        (4)(C)(iii), the Commission may--
                    ``(A) prohibit the person that is the subject of the 
                hearing from trading on, or subject to the rules of, any 
                registered entity and require all registered entities to 
                refuse the person all privileges on the registered 
                entities for such period as the Commission may require 
                in the order;
                    ``(B) if the person is registered with the 
                Commission in any capacity, suspend, for a period not to 
                exceed 180 days, or revoke, the registration of the 
                person;
                    ``(C) assess such person--
                          ``(i) a civil penalty of not more than an 
                      amount equal to the greater of--
                                    ``(I) $140,000; or
                                    ``(II) triple the monetary gain to 
                                such person for each such violation; or
                          ``(ii) in any case of manipulation or 
                      attempted manipulation in violation of this 
                      subsection or section

[[Page 124 STAT. 1753]]

                      9(a)(2), a civil penalty of not more than an 
                      amount equal to the greater of--
                                    ``(I) $1,000,000; or
                                    ``(II) triple the monetary gain to 
                                the person for each such violation; and
                    ``(D) require restitution to customers of damages 
                proximately caused by violations of the person.
            ``(11) Orders.--
                    ``(A) Notice.--The Commission shall provide to a 
                person described in paragraph (10) and the appropriate 
                governing board of the registered entity notice of the 
                order described in paragraph (10) by--
                          ``(i) registered mail;
                          ``(ii) certified mail; or
                          ``(iii) personal delivery.
                    ``(B) Review.--
                          ``(i) In general.--A person described in 
                      paragraph (10) may obtain a review of the order or 
                      such other equitable relief as determined to be 
                      appropriate by a court described in clause (ii).
                          ``(ii) Petition.--To obtain a review or other 
                      relief under clause (i), a person may, not later 
                      than 15 days after notice is given to the person 
                      under clause (i), file a written petition to set 
                      aside the order with the United States Court of 
                      Appeals--
                                    ``(I) for the circuit in which the 
                                petitioner carries out the business of 
                                the petitioner; or
                                    ``(II) in the case of an order 
                                denying registration, the circuit in 
                                which the principal place of business of 
                                the petitioner is located, as listed on 
                                the application for registration of the 
                                petitioner.
                    ``(C) <<NOTE: Records.>>  Procedure.--
                          ``(i) Duty of clerk of appropriate court.--The 
                      clerk of the appropriate court under subparagraph 
                      (B)(ii) shall transmit to the Commission a copy of 
                      a petition filed under subparagraph (B)(ii).
                          ``(ii) Duty of commission.--In accordance with 
                      section 2112 of title 28, United States Code, the 
                      Commission shall file in the appropriate court 
                      described in subparagraph (B)(ii) the record 
                      theretofore made.
                          ``(iii) Jurisdiction of appropriate court.--
                      Upon the filing of a petition under subparagraph 
                      (B)(ii), the appropriate court described in 
                      subparagraph (B)(ii) may affirm, set aside, or 
                      modify the order of the Commission.''.

    (b) Cease and Desist Orders, Fines.--Section 6(d) of the Commodity 
Exchange Act (7 U.S.C. 13b) is amended to read as follows:
    ``(d) <<NOTE: Penalty.>>  If any person (other than a registered 
entity), is violating or has violated subsection (c) or any other 
provisions of this Act or of the rules, regulations, or orders of the 
Commission thereunder, the Commission may, upon notice and hearing, and 
subject to appeal as in other cases provided for in subsection (c), make 
and enter an order directing that such person shall cease and desist 
therefrom and, if such person thereafter and after the lapse of the 
period allowed for appeal of such order or after the affirmance

[[Page 124 STAT. 1754]]

of such order, shall knowingly fail or refuse to obey or comply with 
such order, such person, upon conviction thereof, shall be fined not 
more than the higher of $140,000 or triple the monetary gain to such 
person, or imprisoned for not more than 1 year, or both, except that if 
such knowing failure or refusal to obey or comply with such order 
involves any offense within subsection (a) or (b) of section 9, such 
person, upon conviction thereof, shall be subject to the penalties of 
said subsection (a) or (b):  Provided, That any such cease and desist 
order under this subsection against any respondent in any case of 
manipulation shall be issued only in conjunction with an order issued 
against such respondent under subsection (c).''.

    (c) Manipulations; Private Rights of Action.--Section 22(a)(1) of 
the Commodity Exchange Act (7 U.S.C. 25(a)(1)) is amended by striking 
subparagraph (D) and inserting the following:
            ``(D) who purchased or sold a contract referred to in 
        subparagraph (B) hereof or swap if the violation constitutes--
                    ``(i) the use or employment of, or an attempt to use 
                or employ, in connection with a swap, or a contract of 
                sale of a commodity, in interstate commerce, or for 
                future delivery on or subject to the rules of any 
                registered entity, any manipulative device or 
                contrivance in contravention of such rules and 
                regulations as the Commission shall promulgate by not 
                later than 1 year after the date of enactment of the 
                Dodd-Frank Wall Street Reform and Consumer Protection 
                Act; or
                    ``(ii) a manipulation of the price of any such 
                contract or swap or the price of the commodity 
                underlying such contract or swap.''.

    (d) <<NOTE: 7 USC 9 note.>>  Effective Date.--
            (1) The amendments made by this section shall take effect on 
        the date on which the final rule promulgated by the Commodity 
        Futures Trading Commission pursuant to this Act takes effect.
            (2) Paragraph (1) shall not preclude the Commission from 
        undertaking prior to the effective date any rulemaking necessary 
        to implement the amendments contained in this section.
SEC. 754. <<NOTE: 7 USC 7a note.>>  EFFECTIVE DATE.

    Unless otherwise provided in this title, the provisions of this 
subtitle shall take effect on the later of 360 days after the date of 
the enactment of this subtitle or, to the extent a provision of this 
subtitle requires a rulemaking, not less than 60 days after publication 
of the final rule or regulation implementing such provision of this 
subtitle.

          Subtitle B--Regulation of Security-Based Swap Markets

SEC. 761. DEFINITIONS UNDER THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Definitions.--Section 3(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)) is amended--

[[Page 124 STAT. 1755]]

            (1) in subparagraphs (A) and (B) of paragraph (5), by 
        inserting ``(not including security-based swaps, other than 
        security-based swaps with or for persons that are not eligible 
        contract participants)'' after ``securities'' each place that 
        term appears;
            (2) in paragraph (10), by inserting ``security-based swap,'' 
        after ``security future,'';
            (3) in paragraph (13), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or extinguishing 
        of rights or obligations under, a security-based swap, as the 
        context may require.'';
            (4) in paragraph (14), by adding at the end the following: 
        ``For security-based swaps, such terms include the execution, 
        termination (prior to its scheduled maturity date), assignment, 
        exchange, or similar transfer or conveyance of, or extinguishing 
        of rights or obligations under, a security-based swap, as the 
        context may require.'';
            (5) in paragraph (39)--
                    (A) in subparagraph (B)(i)--
                          (i) in subclause (I), by striking ``or 
                      government securities dealer'' and inserting 
                      ``government securities dealer, security-based 
                      swap dealer, or major security-based swap 
                      participant''; and
                          (ii) in subclause (II), by inserting 
                      ``security-based swap dealer, major security-based 
                      swap participant,'' after ``government securities 
                      dealer,'';
                    (B) in subparagraph (C), by striking ``or government 
                securities dealer'' and inserting ``government 
                securities dealer, security-based swap dealer, or major 
                security-based swap participant''; and
                    (C) in subparagraph (D), by inserting ``security-
                based swap dealer, major security-based swap 
                participant,'' after ``government securities dealer,''; 
                and
            (6) by adding at the end the following:
            ``(65) Eligible contract participant.--The term `eligible 
        contract participant' has the same meaning as in section 1a of 
        the Commodity Exchange Act (7 U.S.C. 1a).
            ``(66) Major swap participant.--The term `major swap 
        participant' has the same meaning as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(67) Major security-based swap participant.--
                    ``(A) In general.--The term `major security-based 
                swap participant' means any person--
                          ``(i) who is not a security-based swap dealer; 
                      and
                          ``(ii)(I) who maintains a substantial position 
                      in security-based swaps for any of the major 
                      security-based swap categories, as such categories 
                      are determined by the Commission, excluding both 
                      positions held for hedging or mitigating 
                      commercial risk and positions maintained by any 
                      employee benefit plan (or any contract held by 
                      such a plan) as defined in paragraphs (3) and (32) 
                      of section 3 of the Employee Retirement Income 
                      Security Act of 1974 (29 U.S.C. 1002) for the 
                      primary purpose of hedging or mitigating any risk 
                      directly associated with the operation of the 
                      plan;

[[Page 124 STAT. 1756]]

                          ``(II) whose outstanding security-based swaps 
                      create substantial counterparty exposure that 
                      could have serious adverse effects on the 
                      financial stability of the United States banking 
                      system or financial markets; or
                          ``(III) that is a financial entity that--
                                    ``(aa) is highly leveraged relative 
                                to the amount of capital such entity 
                                holds and that is not subject to capital 
                                requirements established by an 
                                appropriate Federal banking agency; and
                                    ``(bb) maintains a substantial 
                                position in outstanding security-based 
                                swaps in any major security-based swap 
                                category, as such categories are 
                                determined by the Commission.
                    ``(B) Definition of substantial position.--For 
                purposes of subparagraph (A), the Commission shall 
                define, by rule or regulation, the term `substantial 
                position' at the threshold that the Commission 
                determines to be prudent for the effective monitoring, 
                management, and oversight of entities that are 
                systemically important or can significantly impact the 
                financial system of the United States. In setting the 
                definition under this subparagraph, the Commission shall 
                consider the person's relative position in uncleared as 
                opposed to cleared security-based swaps and may take 
                into consideration the value and quality of collateral 
                held against counterparty exposures.
                    ``(C) Scope of designation.--For purposes of 
                subparagraph (A), a person may be designated as a major 
                security-based swap participant for 1 or more categories 
                of security-based swaps without being classified as a 
                major security-based swap participant for all classes of 
                security-based swaps.
            ``(68) Security-based swap.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `security-based swap' means 
                any agreement, contract, or transaction that--
                          ``(i) is a swap, as that term is defined under 
                      section 1a of the Commodity Exchange Act (without 
                      regard to paragraph (47)(B)(x) of such section); 
                      and
                          ``(ii) is based on--
                                    ``(I) an index that is a narrow-
                                based security index, including any 
                                interest therein or on the value 
                                thereof;
                                    ``(II) a single security or loan, 
                                including any interest therein or on the 
                                value thereof; or
                                    ``(III) the occurrence, 
                                nonoccurrence, or extent of the 
                                occurrence of an event relating to a 
                                single issuer of a security or the 
                                issuers of securities in a narrow-based 
                                security index, provided that such event 
                                directly affects the financial 
                                statements, financial condition, or 
                                financial obligations of the issuer.
                    ``(B) Rule of construction regarding master 
                agreements.--The term `security-based swap' shall be 
                construed to include a master agreement that provides 
                for an agreement, contract, or transaction that is a 
                security-based swap pursuant to subparagraph (A), 
                together with

[[Page 124 STAT. 1757]]

                all supplements to any such master agreement, without 
                regard to whether the master agreement contains an 
                agreement, contract, or transaction that is not a 
                security-based swap pursuant to subparagraph (A), except 
                that the master agreement shall be considered to be a 
                security-based swap only with respect to each agreement, 
                contract, or transaction under the master agreement that 
                is a security-based swap pursuant to subparagraph (A).
                    ``(C) Exclusions.--The term `security-based swap' 
                does not include any agreement, contract, or transaction 
                that meets the definition of a security-based swap only 
                because such agreement, contract, or transaction 
                references, is based upon, or settles through the 
                transfer, delivery, or receipt of an exempted security 
                under paragraph (12), as in effect on the date of 
                enactment of the Futures Trading Act of 1982 (other than 
                any municipal security as defined in paragraph (29) as 
                in effect on the date of enactment of the Futures 
                Trading Act of 1982), unless such agreement, contract, 
                or transaction is of the character of, or is commonly 
                known in the trade as, a put, call, or other option.
                    ``(D) Mixed swap.--The term `security-based swap' 
                includes any agreement, contract, or transaction that is 
                as described in subparagraph (A) and also is based on 
                the value of 1 or more interest or other rates, 
                currencies, commodities, instruments of indebtedness, 
                indices, quantitative measures, other financial or 
                economic interest or property of any kind (other than a 
                single security or a narrow-based security index), or 
                the occurrence, non-occurrence, or the extent of the 
                occurrence of an event or contingency associated with a 
                potential financial, economic, or commercial consequence 
                (other than an event described in subparagraph 
                (A)(ii)(III)).
                    ``(E) Rule of construction regarding use of the term 
                index.--The term `index' means an index or group of 
                securities, including any interest therein or based on 
                the value thereof.
            ``(69) Swap.--The term `swap' has the same meaning as in 
        section 1a of the Commodity Exchange Act (7 U.S.C. 1a).
            ``(70) Person associated with a security-based swap dealer 
        or major security-based swap participant.--
                    ``(A) In general.--The term `person associated with 
                a security-based swap dealer or major security-based 
                swap participant' or `associated person of a security-
                based swap dealer or major security-based swap 
                participant' means--
                          ``(i) any partner, officer, director, or 
                      branch manager of such security-based swap dealer 
                      or major security-based swap participant (or any 
                      person occupying a similar status or performing 
                      similar functions);
                          ``(ii) any person directly or indirectly 
                      controlling, controlled by, or under common 
                      control with such security-based swap dealer or 
                      major security-based swap participant; or
                          ``(iii) any employee of such security-based 
                      swap dealer or major security-based swap 
                      participant.
                    ``(B) Exclusion.--Other than for purposes of section 
                15F(l)(2), the term `person associated with a security-
                based swap dealer or major security-based swap 
                participant' or

[[Page 124 STAT. 1758]]

                `associated person of a security-based swap dealer or 
                major security-based swap participant' does not include 
                any person associated with a security-based swap dealer 
                or major security-based swap participant whose functions 
                are solely clerical or ministerial.
            ``(71) Security-based swap dealer.--
                    ``(A) In general.--The term `security-based swap 
                dealer' means any person who--
                          ``(i) holds themself out as a dealer in 
                      security-based swaps;
                          ``(ii) makes a market in security-based swaps;
                          ``(iii) regularly enters into security-based 
                      swaps with counterparties as an ordinary course of 
                      business for its own account; or
                          ``(iv) engages in any activity causing it to 
                      be commonly known in the trade as a dealer or 
                      market maker in security-based swaps.
                    ``(B) Designation by type or class.--A person may be 
                designated as a security-based swap dealer for a single 
                type or single class or category of security-based swap 
                or activities and considered not to be a security-based 
                swap dealer for other types, classes, or categories of 
                security-based swaps or activities.
                    ``(C) Exception.--The term `security-based swap 
                dealer' does not include a person that enters into 
                security-based swaps for such person's own account, 
                either individually or in a fiduciary capacity, but not 
                as a part of regular business.
                    ``(D) De minimis exception.--The Commission shall 
                exempt from designation as a security-based swap dealer 
                an entity that engages in a de minimis quantity of 
                security-based swap dealing in connection with 
                transactions with or on behalf of its customers. The 
                Commission shall promulgate regulations to establish 
                factors with respect to the making of any determination 
                to exempt.
            ``(72) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency' has the same meaning as in 
        section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(q)).
            ``(73) Board.--The term `Board' means the Board of Governors 
        of the Federal Reserve System.
            ``(74) Prudential regulator.--The term `prudential 
        regulator' has the same meaning as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).
            ``(75) Security-based swap data repository.--The term 
        `security-based swap data repository' means any person that 
        collects and maintains information or records with respect to 
        transactions or positions in, or the terms and conditions of, 
        security-based swaps entered into by third parties for the 
        purpose of providing a centralized recordkeeping facility for 
        security-based swaps.
            ``(76) Swap dealer.--The term `swap dealer' has the same 
        meaning as in section 1a of the Commodity Exchange Act (7 U.S.C. 
        1a).
            ``(77) Security-based swap execution facility.--The term 
        `security-based swap execution facility' means a trading system 
        or platform in which multiple participants have the

[[Page 124 STAT. 1759]]

        ability to execute or trade security-based swaps by accepting 
        bids and offers made by multiple participants in the facility or 
        system, through any means of interstate commerce, including any 
        trading facility, that--
                    ``(A) facilitates the execution of security-based 
                swaps between persons; and
                    ``(B) is not a national securities exchange.
            ``(78) Security-based swap agreement.--
                    ``(A) In general.--For purposes of sections 9, 10, 
                16, 20, and 21A of this Act, and section 17 of the 
                Securities Act of 1933 (15 U.S.C. 77q), the term 
                `security-based swap agreement' means a swap agreement 
                as defined in section 206A of the Gramm-Leach-Bliley Act 
                (15 U.S.C. 78c note) of which a material term is based 
                on the price, yield, value, or volatility of any 
                security or any group or index of securities, or any 
                interest therein.
                    ``(B) Exclusions.--The term `security-based swap 
                agreement' does not include any security-based swap.''.

    (b) <<NOTE: 15 USC 8341.>>  Authority To Further Define Terms.--The 
Securities and Exchange Commission may, by rule, further define--
            (1) the term ``commercial risk'';
            (2) any other term included in an amendment to the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) made by this 
        subtitle; and
            (3) the terms ``security-based swap'', ``security-based swap 
        dealer'', ``major security-based swap participant'', and 
        ``eligible contract participant'', with regard to security-based 
        swaps (as such terms are defined in the amendments made by 
        subsection (a)) for the purpose of including transactions and 
        entities that have been structured to evade this subtitle or the 
        amendments made by this subtitle.
SEC. 762. REPEAL OF PROHIBITION ON REGULATION OF SECURITY-BASED 
                        SWAP AGREEMENTS.

    (a) Repeal.--Sections 206B and 206C of the Gramm-Leach-Bliley Act 
(Public Law 106-102; 15 U.S.C. 78c note) are repealed.
    (b) Conforming Amendments to Gramm-Leach-Bliley.--Section 206A(a) of 
the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is amended in the 
material preceding paragraph (1), by striking ``Except as'' and all that 
follows through ``that--'' and inserting the following: ``Except as 
provided in subsection (b), as used in this section, the term `swap 
agreement' means any agreement, contract, or transaction that--''.
    (c) Conforming Amendments to the Securities Act of 1933.--
            (1) Section 2A of the Securities Act of 1933 (15 U.S.C. 77b-
        1) is amended--
                    (A) by striking subsection (a) and reserving that 
                subsection; and
                    (B) by striking ``(as defined in section 206B of the 
                Gramm-Leach-Bliley Act)'' each place that such term 
                appears and inserting ``(as defined in section 3(a)(78) 
                of the Securities Exchange Act of 1934)''.
            (2) Section 17 of the Securities Act of 1933 (15 U.S.C. 77q) 
        is amended--
                    (A) in subsection (a)--

[[Page 124 STAT. 1760]]

                          (i) by inserting ``(including security-based 
                      swaps)'' after ``securities''; and
                          (ii) by striking ``(as defined in section 206B 
                      of the Gramm-Leach-Bliley Act)'' and inserting 
                      ``(as defined in section 3(a)(78) of the 
                      Securities Exchange Act)''; and
                    (B) in subsection (d), by striking ``206B of the 
                Gramm-Leach-Bliley Act'' and inserting ``3(a)(78) of the 
                Securities Exchange Act of 1934''.

    (d) Conforming Amendments to the Securities Exchange Act of 1934.--
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 3A (15 U.S.C. 78c-1)--
                    (A) by striking subsection (a) and reserving that 
                subsection; and
                    (B) by striking ``(as defined in section 206B of the 
                Gramm-Leach-Bliley Act)'' each place that the term 
                appears;
            (2) in section 9 (15 U.S.C. 78i)--
                    (A) in subsection (a), by striking paragraphs (2) 
                through (5) and inserting the following:

    ``(2) To effect, alone or with 1 or more other persons, a series of 
transactions in any security registered on a national securities 
exchange, any security not so registered, or in connection with any 
security-based swap or security-based swap agreement with respect to 
such security creating actual or apparent active trading in such 
security, or raising or depressing the price of such security, for the 
purpose of inducing the purchase or sale of such security by others.
    ``(3) If a dealer, broker, security-based swap dealer, major 
security-based swap participant, or other person selling or offering for 
sale or purchasing or offering to purchase the security, a security-
based swap, or a security-based swap agreement with respect to such 
security, to induce the purchase or sale of any security registered on a 
national securities exchange, any security not so registered, any 
security-based swap, or any security-based swap agreement with respect 
to such security by the circulation or dissemination in the ordinary 
course of business of information to the effect that the price of any 
such security will or is likely to rise or fall because of market 
operations of any 1 or more persons conducted for the purpose of raising 
or depressing the price of such security.
    ``(4) If a dealer, broker, security-based swap dealer, major 
security-based swap participant, or other person selling or offering for 
sale or purchasing or offering to purchase the security, a security-
based swap, or security-based swap agreement with respect to such 
security, to make, regarding any security registered on a national 
securities exchange, any security not so registered, any security-based 
swap, or any security-based swap agreement with respect to such 
security, for the purpose of inducing the purchase or sale of such 
security, such security-based swap, or such security-based swap 
agreement any statement which was at the time and in the light of the 
circumstances under which it was made, false or misleading with respect 
to any material fact, and which that person knew or had reasonable 
ground to believe was so false or misleading.

[[Page 124 STAT. 1761]]

    ``(5) For a consideration, received directly or indirectly from a 
broker, dealer, security-based swap dealer, major security-based swap 
participant, or other person selling or offering for sale or purchasing 
or offering to purchase the security, a security-based swap, or 
security-based swap agreement with respect to such security, to induce 
the purchase of any security registered on a national securities 
exchange, any security not so registered, any security-based swap, or 
any security-based swap agreement with respect to such security by the 
circulation or dissemination of information to the effect that the price 
of any such security will or is likely to rise or fall because of the 
market operations of any 1 or more persons conducted for the purpose of 
raising or depressing the price of such security.''; and
                    (B) in subsection (i), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (3) in section 10 (15 U.S.C. 78j)--
                    (A) in subsection (b), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act),'' each 
                place that term appears; and
                    (B) in the matter following subsection (b), by 
                striking ``(as defined in section 206B of the Gramm-
                Leach-Bliley Act), in each place that such terms 
                appear'';
            (4) in section 15 (15 U.S.C. 78o)--
                    (A) in subsection (c)(1)(A), by striking ``(as 
                defined in section 206B of the Gramm-Leach-Bliley 
                Act),'';
                    (B) in subparagraphs (B) and (C) of subsection 
                (c)(1), by striking ``(as defined in section 206B of the 
                Gramm-Leach-Bliley Act)'' each place that term appears;
                    (C) by redesignating subsection (i), as added by 
                section 303(f) of the Commodity Futures Modernization 
                Act of 2000 (Public Law 106-554; 114 Stat. 2763A-455)), 
                as subsection (j); and
                    (D) in subsection (j), as redesignated by 
                subparagraph (C), by striking ``(as defined in section 
                206B of the Gramm-Leach-Bliley Act)'';
            (5) in section 16 (15 U.S.C. 78p)--
                    (A) in subsection (a)(2)(C), by striking ``(as 
                defined in section 206(b) of the Gramm-Leach-Bliley Act 
                (15 U.S.C. 78c note))'';
                    (B) in subsection (a)(3)(B), by inserting ``or 
                security-based swaps'' after ``security-based swap 
                agreement'';
                    (C) in the first sentence of subsection (b), by 
                striking ``(as defined in section 206B of the Gramm-
                Leach-Bliley Act)'';
                    (D) in the third sentence of subsection (b), by 
                striking ``(as defined in section 206B of the Gramm-
                Leach Bliley Act)'' and inserting ``or a security-based 
                swap''; and
                    (E) in subsection (g), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)'';
            (6) in section 20 (15 U.S.C. 78t),
                    (A) in subsection (d), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''; and
                    (B) in subsection (f), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''; and
            (7) in section 21A (15 U.S.C. 78u-1)--
                    (A) in subsection (a)(1), by striking ``(as defined 
                in section 206B of the Gramm-Leach-Bliley Act)''; and

[[Page 124 STAT. 1762]]

                    (B) in subsection (g), by striking ``(as defined in 
                section 206B of the Gramm-Leach-Bliley Act)''.
SEC. 763. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Clearing for Security-based Swaps.--The Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 3B 
(as added by section 717 of this Act):
``SEC. 3C. <<NOTE: 15 USC 78c-3.>>  CLEARING FOR SECURITY-BASED 
                      SWAPS.

    ``(a) In General.--
            ``(1) Standard for clearing.--It shall be unlawful for any 
        person to engage in a security-based swap unless that person 
        submits such security-based swap for clearing to a clearing 
        agency that is registered under this Act or a clearing agency 
        that is exempt from registration under this Act if the security-
        based swap is required to be cleared.
            ``(2) Open access.--The rules of a clearing agency described 
        in paragraph (1) shall--
                    ``(A) prescribe that all security-based swaps 
                submitted to the clearing agency with the same terms and 
                conditions are economically equivalent within the 
                clearing agency and may be offset with each other within 
                the clearing agency; and
                    ``(B) provide for non-discriminatory clearing of a 
                security-based swap executed bilaterally or on or 
                through the rules of an unaffiliated national securities 
                exchange or security-based swap execution facility.

    ``(b) Commission Review.--
            ``(1) Commission-initiated review.--
                    ``(A) The Commission on an ongoing basis shall 
                review each security-based swap, or any group, category, 
                type, or class of security-based swaps to make a 
                determination that such security-based swap, or group, 
                category, type, or class of security-based swaps should 
                be required to be cleared.
                    ``(B) <<NOTE: Public comment.>>  The Commission 
                shall provide at least a 30-day public comment period 
                regarding any determination under subparagraph (A).
            ``(2) Swap submissions.--
                    ``(A) <<NOTE: Notice.>>  A clearing agency shall 
                submit to the Commission each security-based swap, or 
                any group, category, type, or class of security-based 
                swaps that it plans to accept for clearing and provide 
                notice to its members (in a manner to be determined by 
                the Commission) of such submission.
                    ``(B) Any security-based swap or group, category, 
                type, or class of security-based swaps listed for 
                clearing by a clearing agency as of the date of 
                enactment of this subsection shall be considered 
                submitted to the Commission.
                    ``(C) The Commission shall--
                          ``(i) <<NOTE: Public information.>>  make 
                      available to the public any submission received 
                      under subparagraphs (A) and (B);
                          ``(ii) review each submission made under 
                      subparagraphs (A) and (B), and determine whether 
                      the security-based swap, or group, category, type, 
                      or class of security-based swaps, described in the 
                      submission is required to be cleared; and
                          ``(iii) <<NOTE: Public comment.>>  provide at 
                      least a 30-day public comment period regarding its 
                      determination whether the

[[Page 124 STAT. 1763]]

                      clearing requirement under subsection (a)(1) shall 
                      apply to the submission.
            ``(3) Deadline.--The Commission shall make its determination 
        under paragraph (2)(C) not later than 90 days after receiving a 
        submission made under paragraphs (2)(A) and (2)(B), unless the 
        submitting clearing agency agrees to an extension for the time 
        limitation established under this paragraph.
            ``(4) Determination.--
                    ``(A) In reviewing a submission made under paragraph 
                (2), the Commission shall review whether the submission 
                is consistent with section 17A.
                    ``(B) In reviewing a security-based swap, group of 
                security-based swaps or class of security-based swaps 
                pursuant to paragraph (1) or a submission made under 
                paragraph (2), the Commission shall take into account 
                the following factors:
                          ``(i) The existence of significant outstanding 
                      notional exposures, trading liquidity and adequate 
                      pricing data.
                          ``(ii) The availability of rule framework, 
                      capacity, operational expertise and resources, and 
                      credit support infrastructure to clear the 
                      contract on terms that are consistent with the 
                      material terms and trading conventions on which 
                      the contract is then traded.
                          ``(iii) The effect on the mitigation of 
                      systemic risk, taking into account the size of the 
                      market for such contract and the resources of the 
                      clearing agency available to clear the contract.
                          ``(iv) The effect on competition, including 
                      appropriate fees and charges applied to clearing.
                          ``(v) The existence of reasonable legal 
                      certainty in the event of the insolvency of the 
                      relevant clearing agency or 1 or more of its 
                      clearing members with regard to the treatment of 
                      customer and security-based swap counterparty 
                      positions, funds, and property.
                    ``(C) In making a determination under subsection 
                (b)(1) or paragraph (2)(C) that the clearing requirement 
                shall apply, the Commission may require such terms and 
                conditions to the requirement as the Commission 
                determines to be appropriate.
            ``(5) Rules.--Not <<NOTE: Deadline.>>  later than 1 year 
        after the date of the enactment of this section, the Commission 
        shall adopt rules for a clearing agency's submission for review, 
        pursuant to this subsection, of a security-based swap, or a 
        group, category, type, or class of security-based swaps, that it 
        seeks to accept for clearing. Nothing in this paragraph limits 
        the Commission from making a determination under paragraph 
        (2)(C) for security-based swaps described in paragraph (2)(B).

    ``(c) Stay of Clearing Requirement.--
            ``(1) In general.--After making a determination pursuant to 
        subsection (b)(2), the Commission, on application of a 
        counterparty to a security-based swap or on its own initiative, 
        may stay the clearing requirement of subsection (a)(1) until the 
        Commission completes a review of the terms of the security-based 
        swap (or the group, category, type, or class of security-based 
        swaps) and the clearing arrangement.

[[Page 124 STAT. 1764]]

            ``(2) Deadline.--The Commission shall complete a review 
        undertaken pursuant to paragraph (1) not later than 90 days 
        after issuance of the stay, unless the clearing agency that 
        clears the security-based swap, or group, category, type, or 
        class of security-based swaps, agrees to an extension of the 
        time limitation established under this paragraph.
            ``(3) Determination.--Upon completion of the review 
        undertaken pursuant to paragraph (1), the Commission may--
                    ``(A) determine, unconditionally or subject to such 
                terms and conditions as the Commission determines to be 
                appropriate, that the security-based swap, or group, 
                category, type, or class of security-based swaps, must 
                be cleared pursuant to this subsection if it finds that 
                such clearing is consistent with subsection (b)(4); or
                    ``(B) determine that the clearing requirement of 
                subsection (a)(1) shall not apply to the security-based 
                swap, or group, category, type, or class of security-
                based swaps.
            ``(4) Rules.--Not <<NOTE: Deadline.>>  later than 1 year 
        after the date of the enactment of this section, the Commission 
        shall adopt rules for reviewing, pursuant to this subsection, a 
        clearing agency's clearing of a security-based swap, or a group, 
        category, type, or class of security-based swaps, that it has 
        accepted for clearing.

    ``(d) Prevention of Evasion.--
            ``(1) In general.--The <<NOTE: Regulations.>>  Commission 
        shall prescribe rules under this section (and issue 
        interpretations of rules prescribed under this section), as 
        determined by the Commission to be necessary to prevent evasions 
        of the mandatory clearing requirements under this Act.
            ``(2) Duty of commission to investigate and take certain 
        actions.--To the extent the Commission finds that a particular 
        security-based swap or any group, category, type, or class of 
        security-based swaps that would otherwise be subject to 
        mandatory clearing but no clearing agency has listed the 
        security-based swap or the group, category, type, or class of 
        security-based swaps for clearing, the Commission shall--
                    ``(A) investigate the relevant facts and 
                circumstances;
                    ``(B) <<NOTE: Deadline. Reports.>>  within 30 days 
                issue a public report containing the results of the 
                investigation; and
                    ``(C) take such actions as the Commission determines 
                to be necessary and in the public interest, which may 
                include requiring the retaining of adequate margin or 
                capital by parties to the security-based swap or the 
                group, category, type, or class of security-based swaps.
            ``(3) Effect on authority.--Nothing in this subsection--
                    ``(A) authorizes the Commission to adopt rules 
                requiring a clearing agency to list for clearing a 
                security-based swap or any group, category, type, or 
                class of security-based swaps if the clearing of the 
                security-based swap or the group, category, type, or 
                class of security-based swaps would threaten the 
                financial integrity of the clearing agency; and
                    ``(B) affects the authority of the Commission to 
                enforce the open access provisions of subsection (a)(2) 
                with respect to a security-based swap or the group, 
                category, type, or class of security-based swaps that is 
                listed for clearing by a clearing agency.

[[Page 124 STAT. 1765]]

    ``(e) Reporting <<NOTE: Deadlines.>>  Transition Rules.--Rules 
adopted by the Commission under this section shall provide for the 
reporting of data, as follows:
            ``(1) Security-based swaps entered into before the date of 
        the enactment of this section shall be reported to a registered 
        security-based swap data repository or the Commission no later 
        than 180 days after the effective date of this section.
            ``(2) Security-based swaps entered into on or after such 
        date of enactment shall be reported to a registered security-
        based swap data repository or the Commission no later than the 
        later of--
                    ``(A) 90 days after such effective date; or
                    ``(B) such other time after entering into the 
                security-based swap as the Commission may prescribe by 
                rule or regulation.

    ``(f) Clearing Transition Rules.--
            ``(1) Security-based swaps entered into before the date of 
        the enactment of this section are exempt from the clearing 
        requirements of this subsection if reported pursuant to 
        subsection (e)(1).
            ``(2) Security-based swaps entered into before application 
        of the clearing requirement pursuant to this section are exempt 
        from the clearing requirements of this section if reported 
        pursuant to subsection (e)(2).

    ``(g) Exceptions.--
            ``(1) In general.--The requirements of subsection (a)(1) 
        shall not apply to a security-based swap if 1 of the 
        counterparties to the security-based swap--
                    ``(A) is not a financial entity;
                    ``(B) is using security-based swaps to hedge or 
                mitigate commercial risk; and
                    ``(C) <<NOTE: Notification.>>  notifies the 
                Commission, in a manner set forth by the Commission, how 
                it generally meets its financial obligations associated 
                with entering into non-cleared security-based swaps.
            ``(2) Option to clear.--The application of the clearing 
        exception in paragraph (1) is solely at the discretion of the 
        counterparty to the security-based swap that meets the 
        conditions of subparagraphs (A) through (C) of paragraph (1).
            ``(3) Financial entity definition.--
                    ``(A) In general.--For the purposes of this 
                subsection, the term `financial entity' means--
                          ``(i) a swap dealer;
                          ``(ii) a security-based swap dealer;
                          ``(iii) a major swap participant;
                          ``(iv) a major security-based swap 
                      participant;
                          ``(v) a commodity pool as defined in section 
                      1a(10) of the Commodity Exchange Act;
                          ``(vi) a private fund as defined in section 
                      202(a) of the Investment Advisers Act of 1940 (15 
                      U.S.C. 80-b-2(a));
                          ``(vii) an employee benefit plan as defined in 
                      paragraphs (3) and (32) of section 3 of the 
                      Employee Retirement Income Security Act of 1974 
                      (29 U.S.C. 1002);
                          ``(viii) a person predominantly engaged in 
                      activities that are in the business of banking or 
                      financial in

[[Page 124 STAT. 1766]]

                      nature, as defined in section 4(k) of the Bank 
                      Holding Company Act of 1956.
                    ``(B) Exclusion.--The Commission shall consider 
                whether to exempt small banks, savings associations, 
                farm credit system institutions, and credit unions, 
                including--
                          ``(i) depository institutions with total 
                      assets of $10,000,000,000 or less;
                          ``(ii) farm credit system institutions with 
                      total assets of $10,000,000,000 or less; or
                          ``(iii) credit unions with total assets of 
                      $10,000,000,000 or less.
            ``(4) Treatment of affiliates.--
                    ``(A) In general.--An affiliate of a person that 
                qualifies for an exception under this subsection 
                (including affiliate entities predominantly engaged in 
                providing financing for the purchase of the merchandise 
                or manufactured goods of the person) may qualify for the 
                exception only if the affiliate, acting on behalf of the 
                person and as an agent, uses the security-based swap to 
                hedge or mitigate the commercial risk of the person or 
                other affiliate of the person that is not a financial 
                entity.
                    ``(B) Prohibition relating to certain affiliates.--
                The exception in subparagraph (A) shall not apply if the 
                affiliate is--
                          ``(i) a swap dealer;
                          ``(ii) a security-based swap dealer;
                          ``(iii) a major swap participant;
                          ``(iv) a major security-based swap 
                      participant;
                          ``(v) an issuer that would be an investment 
                      company, as defined in section 3 of the Investment 
                      Company Act of 1940 (15 U.S.C. 80a-3), but for 
                      paragraph (1) or (7) of subsection (c) of that Act 
                      (15 U.S.C. 80a-3(c));
                          ``(vi) a commodity pool; or
                          ``(vii) a bank holding company with over 
                      $50,000,000,000 in consolidated assets.
                    ``(C) Transition rule for affiliates.--An affiliate, 
                subsidiary, or a wholly owned entity of a person that 
                qualifies for an exception under subparagraph (A) and is 
                predominantly engaged in providing financing for the 
                purchase or lease of merchandise or manufactured goods 
                of the person shall be exempt from the margin 
                requirement described in section 15F(e) and the clearing 
                requirement described in subsection (a) with regard to 
                security-based swaps entered into to mitigate the risk 
                of the financing activities for not less than a 2-year 
                period beginning on the date of enactment of this 
                subparagraph.
            ``(5) Election of counterparty.--
                    ``(A) Security-based swaps required to be cleared.--
                With respect to any security-based swap that is subject 
                to the mandatory clearing requirement under subsection 
                (a) and entered into by a security-based swap dealer or 
                a major security-based swap participant with a 
                counterparty that is not a swap dealer, major swap 
                participant, security-based swap dealer, or major 
                security-based swap participant, the counterparty shall 
                have the

[[Page 124 STAT. 1767]]

                sole right to select the clearing agency at which the 
                security-based swap will be cleared.
                    ``(B) Security-based swaps not required to be 
                cleared.--With respect to any security-based swap that 
                is not subject to the mandatory clearing requirement 
                under subsection (a) and entered into by a security-
                based swap dealer or a major security-based swap 
                participant with a counterparty that is not a swap 
                dealer, major swap participant, security-based swap 
                dealer, or major security-based swap participant, the 
                counterparty--
                          ``(i) may elect to require clearing of the 
                      security-based swap; and
                          ``(ii) shall have the sole right to select the 
                      clearing agency at which the security-based swap 
                      will be cleared.
            ``(6) Abuse of exception.--The Commission may prescribe such 
        rules or issue interpretations of the rules as the Commission 
        determines to be necessary to prevent abuse of the exceptions 
        described in this subsection. The Commission may also request 
        information from those persons claiming the clearing exception 
        as necessary to prevent abuse of the exceptions described in 
        this subsection.

    ``(h) Trade Execution.--
            ``(1) In general.--With respect to transactions involving 
        security-based swaps subject to the clearing requirement of 
        subsection (a)(1), counterparties shall--
                    ``(A) execute the transaction on an exchange; or
                    ``(B) execute the transaction on a security-based 
                swap execution facility registered under section 3D or a 
                security-based swap execution facility that is exempt 
                from registration under section 3D(e).
            ``(2) Exception.--The requirements of subparagraphs (A) and 
        (B) of paragraph (1) shall not apply if no exchange or security-
        based swap execution facility makes the security-based swap 
        available to trade or for security-based swap transactions 
        subject to the clearing exception under subsection (g).

    ``(i) Board Approval.--Exemptions from the requirements of this 
section to clear a security-based swap or execute a security-based swap 
through a national securities exchange or security-based swap execution 
facility shall be available to a counterparty that is an issuer of 
securities that are registered under section 12 or that is required to 
file reports pursuant to section 15(d), only if an appropriate committee 
of the issuer's board or governing body has reviewed and approved the 
issuer's decision to enter into security-based swaps that are subject to 
such exemptions.
    ``(j) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each registered clearing agency shall 
        designate an individual to serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the clearing agency;
                    ``(B) in consultation with its board, a body 
                performing a function similar thereto, or the senior 
                officer of the registered clearing agency, resolve any 
                conflicts of interest that may arise;

[[Page 124 STAT. 1768]]

                    ``(C) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(D) ensure compliance with this title (including 
                regulations issued under this title) relating to 
                agreements, contracts, or transactions, including each 
                rule prescribed by the Commission under this section;
                    ``(E) establish procedures for the remediation of 
                noncompliance issues identified by the compliance 
                officer through any--
                          ``(i) compliance office review;
                          ``(ii) look-back;
                          ``(iii) internal or external audit finding;
                          ``(iv) self-reported error; or
                          ``(v) validated complaint; and
                    ``(F) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--
                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                          ``(i) the compliance of the registered 
                      clearing agency or security-based swap execution 
                      facility of the compliance officer with respect to 
                      this title (including regulations under this 
                      title); and
                          ``(ii) each policy and procedure of the 
                      registered clearing agency of the compliance 
                      officer (including the code of ethics and conflict 
                      of interest policies of the registered clearing 
                      agency).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          ``(i) accompany each appropriate financial 
                      report of the registered clearing agency that is 
                      required to be furnished to the Commission 
                      pursuant to this section; and
                          ``(ii) include a certification that, under 
                      penalty of law, the compliance report is accurate 
                      and complete.''.

    (b) Clearing Agency Requirements.--Section 17A of the Securities 
Exchange Act of 1934 (15 U.S.C. 78q-1) is amended by adding at the end 
the following:
    ``(g) Registration Requirement.--It shall be unlawful for a clearing 
agency, unless registered with the Commission, directly or indirectly to 
make use of the mails or any means or instrumentality of interstate 
commerce to perform the functions of a clearing agency with respect to a 
security-based swap.
    ``(h) Voluntary Registration.--A person that clears agreements, 
contracts, or transactions that are not required to be cleared under 
this title may register with the Commission as a clearing agency.
    ``(i) Standards for Clearing Agencies Clearing Security-based Swap 
Transactions.--To be registered and to maintain registration as a 
clearing agency that clears security-based swap transactions, a clearing 
agency shall comply with such standards as the Commission may establish 
by rule. In establishing any such standards, and in the exercise of its 
oversight of such a

[[Page 124 STAT. 1769]]

clearing agency pursuant to this title, the Commission may conform such 
standards or oversight to reflect evolving United States and 
international standards. Except where the Commission determines 
otherwise by rule or regulation, a clearing agency shall have reasonable 
discretion in establishing the manner in which it complies with any such 
standards.
    ``(j) Rules.--The Commission shall adopt rules governing persons 
that are registered as clearing agencies for security-based swaps under 
this title.
    ``(k) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a clearing agency from registration under this section 
for the clearing of security-based swaps if the Commission determines 
that the clearing agency is subject to comparable, comprehensive 
supervision and regulation by the Commodity Futures Trading Commission 
or the appropriate government authorities in the home country of the 
agency. Such conditions may include, but are not limited to, requiring 
that the clearing agency be available for inspection by the Commission 
and make available all information requested by the Commission.
    ``(l) Existing Depository Institutions and Derivative Clearing 
Organizations.--
            ``(1) In general.--A depository institution or derivative 
        clearing organization registered with the Commodity Futures 
        Trading Commission under the Commodity Exchange Act that is 
        required to be registered as a clearing agency under this 
        section is deemed to be registered under this section solely for 
        the purpose of clearing security-based swaps to the extent that, 
        before the date of enactment of this subsection--
                    ``(A) the depository institution cleared swaps as a 
                multilateral clearing organization; or
                    ``(B) the derivative clearing organization cleared 
                swaps pursuant to an exemption from registration as a 
                clearing agency.
            ``(2) Conversion of depository institutions.--A depository 
        institution to which this subsection applies may, by the vote of 
        the shareholders owning not less than 51 percent of the voting 
        interests of the depository institution, be converted into a 
        State corporation, partnership, limited liability company, or 
        similar legal form pursuant to a plan of conversion, if the 
        conversion is not in contravention of applicable State law.
            ``(3) Sharing of information.--The Commodity Futures Trading 
        Commission shall make available to the Commission, upon request, 
        all information determined to be relevant by the Commodity 
        Futures Trading Commission regarding a derivatives clearing 
        organization deemed to be registered with the Commission under 
        paragraph (1).

    ``(m) Modification of Core Principles.--The Commission may conform 
the core principles established in this section to reflect evolving 
United States and international standards.''.
    (c) Security-based Swap Execution Facilities.--The Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting 
after section 3C (as added by subsection (a) of this section) the 
following:
``SEC. 3D. <<NOTE: 15 USC 78c-4.>>  SECURITY-BASED SWAP EXECUTION 
                      FACILITIES.

    ``(a) Registration.--

[[Page 124 STAT. 1770]]

            ``(1) In general.--No person may operate a facility for the 
        trading or processing of security-based swaps, unless the 
        facility is registered as a security-based swap execution 
        facility or as a national securities exchange under this 
        section.
            ``(2) Dual registration.--Any person that is registered as a 
        security-based swap execution facility under this section shall 
        register with the Commission regardless of whether the person 
        also is registered with the Commodity Futures Trading Commission 
        as a swap execution facility.

    ``(b) Trading and Trade Processing.--A security-based swap execution 
facility that is registered under subsection (a) may--
            ``(1) make available for trading any security-based swap; 
        and
            ``(2) facilitate trade processing of any security-based 
        swap.

    ``(c) Identification of Facility Used To Trade Security-based Swaps 
by National Securities Exchanges.--A national securities exchange shall, 
to the extent that the exchange also operates a security-based swap 
execution facility and uses the same electronic trade execution system 
for listing and executing trades of security-based swaps on or through 
the exchange and the facility, identify whether electronic trading of 
such security-based swaps is taking place on or through the national 
securities exchange or the security-based swap execution facility.
    ``(d) Core Principles for Security-based Swap Execution 
Facilities.--
            ``(1) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a security-based swap execution 
                facility, the security-based swap execution facility 
                shall comply with--
                          ``(i) the core principles described in this 
                      subsection; and
                          ``(ii) any requirement that the Commission may 
                      impose by rule or regulation.
                    ``(B) Reasonable discretion of security-based swap 
                execution facility.--Unless otherwise determined by the 
                Commission, by rule or regulation, a security-based swap 
                execution facility described in subparagraph (A) shall 
                have reasonable discretion in establishing the manner in 
                which it complies with the core principles described in 
                this subsection.
            ``(2) Compliance with rules.--A security-based swap 
        execution facility shall--
                    ``(A) establish and enforce compliance with any rule 
                established by such security-based swap execution 
                facility, including--
                          ``(i) the terms and conditions of the 
                      security-based swaps traded or processed on or 
                      through the facility; and
                          ``(ii) any limitation on access to the 
                      facility;
                    ``(B) establish and enforce trading, trade 
                processing, and participation rules that will deter 
                abuses and have the capacity to detect, investigate, and 
                enforce those rules, including means--
                          ``(i) to provide market participants with 
                      impartial access to the market; and
                          ``(ii) to capture information that may be used 
                      in establishing whether rule violations have 
                      occurred; and

[[Page 124 STAT. 1771]]

                    ``(C) establish rules governing the operation of the 
                facility, including rules specifying trading procedures 
                to be used in entering and executing orders traded or 
                posted on the facility, including block trades.
            ``(3) Security-based swaps not readily susceptible to 
        manipulation.--The security-based swap execution facility shall 
        permit trading only in security-based swaps that are not readily 
        susceptible to manipulation.
            ``(4) Monitoring of trading and trade processing.--The 
        security-based swap execution facility shall--
                    ``(A) establish and enforce rules or terms and 
                conditions defining, or specifications detailing--
                          ``(i) trading procedures to be used in 
                      entering and executing orders traded on or through 
                      the facilities of the security-based swap 
                      execution facility; and
                          ``(ii) procedures for trade processing of 
                      security-based swaps on or through the facilities 
                      of the security-based swap execution facility; and
                    ``(B) monitor trading in security-based swaps to 
                prevent manipulation, price distortion, and disruptions 
                of the delivery or cash settlement process through 
                surveillance, compliance, and disciplinary practices and 
                procedures, including methods for conducting real-time 
                monitoring of trading and comprehensive and accurate 
                trade reconstructions.
            ``(5) Ability to obtain information.--The security-based 
        swap execution facility shall--
                    ``(A) <<NOTE: Regulations.>>  establish and enforce 
                rules that will allow the facility to obtain any 
                necessary information to perform any of the functions 
                described in this subsection;
                    ``(B) provide the information to the Commission on 
                request; and
                    ``(C) have the capacity to carry out such 
                international information-sharing agreements as the 
                Commission may require.
            ``(6) Financial integrity of transactions.--
        The <<NOTE: Regulations. Procedures.>>  security-based swap 
        execution facility shall establish and enforce rules and 
        procedures for ensuring the financial integrity of security-
        based swaps entered on or through the facilities of the 
        security-based swap execution facility, including the clearance 
        and settlement of security-based swaps pursuant to section 
        3C(a)(1).
            ``(7) Emergency authority.--The <<NOTE: Regulations.>>  
        security-based swap execution facility shall adopt rules to 
        provide for the exercise of emergency authority, in consultation 
        or cooperation with the Commission, as is necessary and 
        appropriate, including the authority to liquidate or transfer 
        open positions in any security-based swap or to suspend or 
        curtail trading in a security-based swap.
            ``(8) Timely publication of trading information.--
                    ``(A) <<NOTE: Public information.>>  In general.--
                The security-based swap execution facility shall make 
                public timely information on price, trading volume, and 
                other trading data on security-based swaps to the extent 
                prescribed by the Commission.
                    ``(B) Capacity of security-based swap execution 
                facility.--The security-based swap execution facility 
                shall be required to have the capacity to electronically 
                capture

[[Page 124 STAT. 1772]]

                and transmit and disseminate trade information with 
                respect to transactions executed on or through the 
                facility.
            ``(9) Recordkeeping and reporting.--
                    ``(A) In general.--A security-based swap execution 
                facility shall--
                          ``(i) <<NOTE: Time period.>>  maintain records 
                      of all activities relating to the business of the 
                      facility, including a complete audit trail, in a 
                      form and manner acceptable to the Commission for a 
                      period of 5 years; and
                          ``(ii) report to the Commission, in a form and 
                      manner acceptable to the Commission, such 
                      information as the Commission determines to be 
                      necessary or appropriate for the Commission to 
                      perform the duties of the Commission under this 
                      title.
                    ``(B) Requirements.--The Commission shall adopt data 
                collection and reporting requirements for security-based 
                swap execution facilities that are comparable to 
                corresponding requirements for clearing agencies and 
                security-based swap data repositories.
            ``(10) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this title, the security-
        based swap execution facility shall not--
                    ``(A) adopt any rules or taking any actions that 
                result in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
            ``(11) Conflicts of interest.--The security-based swap 
        execution facility shall--
                    ``(A) <<NOTE: Regulations.>>  establish and enforce 
                rules to minimize conflicts of interest in its decision-
                making process; and
                    ``(B) <<NOTE: Process.>>  establish a process for 
                resolving the conflicts of interest.
            ``(12) Financial resources.--
                    ``(A) In general.--The security-based swap execution 
                facility shall have adequate financial, operational, and 
                managerial resources to discharge each responsibility of 
                the security-based swap execution facility, as 
                determined by the Commission.
                    ``(B) Determination of resource adequacy.--The 
                financial resources of a security-based swap execution 
                facility shall be considered to be adequate if the value 
                of the financial resources--
                          ``(i) enables the organization to meet its 
                      financial obligations to its members and 
                      participants notwithstanding a default by the 
                      member or participant creating the largest 
                      financial exposure for that organization in 
                      extreme but plausible market conditions; and
                          ``(ii) exceeds the total amount that would 
                      enable the security-based swap execution facility 
                      to cover the operating costs of the security-based 
                      swap execution facility for a 1-year period, as 
                      calculated on a rolling basis.
            ``(13) System safeguards.--The security-based swap execution 
        facility shall--

[[Page 124 STAT. 1773]]

                    ``(A) establish and maintain a program of risk 
                analysis and oversight to identify and minimize sources 
                of operational risk, through the development of 
                appropriate controls and procedures, and automated 
                systems, that--
                          ``(i) are reliable and secure; and
                          ``(ii) have adequate scalable capacity;
                    ``(B) <<NOTE: Procedures.>>  establish and maintain 
                emergency procedures, backup facilities, and a plan for 
                disaster recovery that allow for--
                          ``(i) the timely recovery and resumption of 
                      operations; and
                          ``(ii) the fulfillment of the responsibilities 
                      and obligations of the security-based swap 
                      execution facility; and
                    ``(C) <<NOTE: Tests.>>  periodically conduct tests 
                to verify that the backup resources of the security-
                based swap execution facility are sufficient to ensure 
                continued--
                          ``(i) order processing and trade matching;
                          ``(ii) price reporting;
                          ``(iii) market surveillance; and
                          ``(iv) maintenance of a comprehensive and 
                      accurate audit trail.
            ``(14) Designation of chief compliance officer.--
                    ``(A) In general.--Each security-based swap 
                execution facility shall designate an individual to 
                serve as a chief compliance officer.
                    ``(B) Duties.--The chief compliance officer shall--
                          ``(i) report directly to the board or to the 
                      senior officer of the facility;
                          ``(ii) review compliance with the core 
                      principles in this subsection;
                          ``(iii) in consultation with the board of the 
                      facility, a body performing a function similar to 
                      that of a board, or the senior officer of the 
                      facility, resolve any conflicts of interest that 
                      may arise;
                          ``(iv) be responsible for establishing and 
                      administering the policies and procedures required 
                      to be established pursuant to this section;
                          ``(v) ensure compliance with this title and 
                      the rules and regulations issued under this title, 
                      including rules prescribed by the Commission 
                      pursuant to this section;
                          ``(vi) establish procedures for the 
                      remediation of noncompliance issues found during--
                                    ``(I) compliance office reviews;
                                    ``(II) look backs;
                                    ``(III) internal or external audit 
                                findings;
                                    ``(IV) self-reported errors; or
                                    ``(V) through validated complaints; 
                                and
                          ``(vii) establish and follow appropriate 
                      procedures for the handling, management response, 
                      remediation, retesting, and closing of 
                      noncompliance issues.
                    ``(C) Annual reports.--
                          ``(i) In general.--In accordance with rules 
                      prescribed by the Commission, the chief compliance 
                      officer shall annually prepare and sign a report 
                      that contains a description of--

[[Page 124 STAT. 1774]]

                                    ``(I) the compliance of the 
                                security-based swap execution facility 
                                with this title; and
                                    ``(II) the policies and procedures, 
                                including the code of ethics and 
                                conflict of interest policies, of the 
                                security-based security-based swap 
                                execution facility.
                          ``(ii) Requirements.--The chief compliance 
                      officer shall--
                                    ``(I) submit each report described 
                                in clause (i) with the appropriate 
                                financial report of the security-based 
                                swap execution facility that is required 
                                to be submitted to the Commission 
                                pursuant to this section; and
                                    ``(II) include in the report a 
                                certification that, under penalty of 
                                law, the report is accurate and 
                                complete.

    ``(e) Exemptions.--The Commission may exempt, conditionally or 
unconditionally, a security-based swap execution facility from 
registration under this section if the Commission finds that the 
facility is subject to comparable, comprehensive supervision and 
regulation on a consolidated basis by the Commodity Futures Trading 
Commission.
    ``(f) Rules.--The Commission shall prescribe rules governing the 
regulation of security-based swap execution facilities under this 
section.''.
    (d) Segregation of Assets Held as Collateral in Security-based Swap 
Transactions.--The Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) is amended by inserting after section 3D (as added by subsection 
(b)) the following:
``SEC. 3E. <<NOTE: 15 USC 78c-5.>>  SEGREGATION OF ASSETS HELD AS 
                      COLLATERAL IN SECURITY-BASED SWAP 
                      TRANSACTIONS.

    ``(a) Registration Requirement.--It shall be unlawful for any person 
to accept any money, securities, or property (or to extend any credit in 
lieu of money, securities, or property) from, for, or on behalf of a 
security-based swaps customer to margin, guarantee, or secure a 
security-based swap cleared by or through a clearing agency (including 
money, securities, or property accruing to the customer as the result of 
such a security-based swap), unless the person shall have registered 
under this title with the Commission as a broker, dealer, or security-
based swap dealer, and the registration shall not have expired nor been 
suspended nor revoked.
    ``(b) Cleared Security-based Swaps.--
            ``(1) Segregation required.--A broker, dealer, or security-
        based swap dealer shall treat and deal with all money, 
        securities, and property of any security-based swaps customer 
        received to margin, guarantee, or secure a security-based swap 
        cleared by or though a clearing agency (including money, 
        securities, or property accruing to the security-based swaps 
        customer as the result of such a security-based swap) as 
        belonging to the security-based swaps customer.
            ``(2) Commingling prohibited.--Money, securities, and 
        property of a security-based swaps customer described in 
        paragraph (1) shall be separately accounted for and shall not be 
        commingled with the funds of the broker, dealer, or security-
        based swap dealer or be used to margin, secure, or guarantee

[[Page 124 STAT. 1775]]

        any trades or contracts of any security-based swaps customer or 
        person other than the person for whom the same are held.

    ``(c) Exceptions.--
            ``(1) Use of funds.--
                    ``(A) In general.--Notwithstanding subsection (b), 
                money, securities, and property of a security-based 
                swaps customer of a broker, dealer, or security-based 
                swap dealer described in subsection (b) may, for 
                convenience, be commingled and deposited in the same 1 
                or more accounts with any bank or trust company or with 
                a clearing agency.
                    ``(B) Withdrawal.--Notwithstanding subsection (b), 
                such share of the money, securities, and property 
                described in subparagraph (A) as in the normal course of 
                business shall be necessary to margin, guarantee, 
                secure, transfer, adjust, or settle a cleared security-
                based swap with a clearing agency, or with any member of 
                the clearing agency, may be withdrawn and applied to 
                such purposes, including the payment of commissions, 
                brokerage, interest, taxes, storage, and other charges, 
                lawfully accruing in connection with the cleared 
                security-based swap.
            ``(2) Commission action.--Notwithstanding subsection (b), in 
        accordance with such terms and conditions as the Commission may 
        prescribe by rule, regulation, or order, any money, securities, 
        or property of the security-based swaps customer of a broker, 
        dealer, or security-based swap dealer described in subsection 
        (b) may be commingled and deposited as provided in this section 
        with any other money, securities, or property received by the 
        broker, dealer, or security-based swap dealer and required by 
        the Commission to be separately accounted for and treated and 
        dealt with as belonging to the security-based swaps customer of 
        the broker, dealer, or security-based swap dealer.

    ``(d) Permitted Investments.--Money described in subsection (b) may 
be invested in obligations of the United States, in general obligations 
of any State or of any political subdivision of a State, and in 
obligations fully guaranteed as to principal and interest by the United 
States, or in any other investment that the Commission may by rule or 
regulation prescribe, and such investments shall be made in accordance 
with such rules and regulations and subject to such conditions as the 
Commission may prescribe.
    ``(e) Prohibition.--It shall be unlawful for any person, including 
any clearing agency and any depository institution, that has received 
any money, securities, or property for deposit in a separate account or 
accounts as provided in subsection (b) to hold, dispose of, or use any 
such money, securities, or property as belonging to the depositing 
broker, dealer, or security-based swap dealer or any person other than 
the swaps customer of the broker, dealer, or security-based swap dealer.
    ``(f) Segregation Requirements for Uncleared Security-based Swaps.--
            ``(1) Segregation of assets held as collateral in uncleared 
        security-based swap transactions.--
                    ``(A) Notification.--A security-based swap dealer or 
                major security-based swap participant shall be required 
                to notify the counterparty of the security-based swap 
                dealer or major security-based swap participant at the 
                beginning of a security-based swap transaction that the 
                counterparty

[[Page 124 STAT. 1776]]

                has the right to require segregation of the funds of 
                other property supplied to margin, guarantee, or secure 
                the obligations of the counterparty.
                    ``(B) Segregation and maintenance of funds.--At the 
                request of a counterparty to a security-based swap that 
                provides funds or other property to a security-based 
                swap dealer or major security-based swap participant to 
                margin, guarantee, or secure the obligations of the 
                counterparty, the security-based swap dealer or major 
                security-based swap participant shall--
                          ``(i) segregate the funds or other property 
                      for the benefit of the counterparty; and
                          ``(ii) in accordance with such rules and 
                      regulations as the Commission may promulgate, 
                      maintain the funds or other property in a 
                      segregated account separate from the assets and 
                      other interests of the security-based swap dealer 
                      or major security-based swap participant.
            ``(2) Applicability.--The requirements described in 
        paragraph (1) shall--
                    ``(A) apply only to a security-based swap between a 
                counterparty and a security-based swap dealer or major 
                security-based swap participant that is not submitted 
                for clearing to a clearing agency; and
                    ``(B)(i) not apply to variation margin payments; or
                    ``(ii) not preclude any commercial arrangement 
                regarding--
                          ``(I) the investment of segregated funds or 
                      other property that may only be invested in such 
                      investments as the Commission may permit by rule 
                      or regulation; and
                          ``(II) the related allocation of gains and 
                      losses resulting from any investment of the 
                      segregated funds or other property.
            ``(3) Use of independent third-party custodians.--The 
        segregated account described in paragraph (1) shall be--
                    ``(A) carried by an independent third-party 
                custodian; and
                    ``(B) designated as a segregated account for and on 
                behalf of the counterparty.
            ``(4) Reporting requirement.--If the counterparty does not 
        choose to require segregation of the funds or other property 
        supplied to margin, guarantee, or secure the obligations of the 
        counterparty, the security-based swap dealer or major security-
        based swap participant shall report to the counterparty of the 
        security-based swap dealer or major security-based swap 
        participant on a quarterly basis that the back office procedures 
        of the security-based swap dealer or major security-based swap 
        participant relating to margin and collateral requirements are 
        in compliance with the agreement of the counterparties.

    ``(g) Bankruptcy.--A security-based swap, as defined in section 
3(a)(68) shall be considered to be a security as such term is used in 
section 101(53A)(B) and subchapter III of title 11, United States Code. 
An account that holds a security-based swap, other than a portfolio 
margining account referred to in section 15(c)(3)(C) shall be considered 
to be a securities account, as that term is defined in section 741 of 
title 11, United States Code. <<NOTE: Applicability.>>  The definitions

[[Page 124 STAT. 1777]]

of the terms `purchase' and `sale' in section 3(a)(13) and (14) shall be 
applied to the terms `purchase' and `sale', as used in section 741 of 
title 11, United States Code. The term `customer', as defined in section 
741 of title 11, United States Code, excludes any person, to the extent 
that such person has a claim based on any open repurchase agreement, 
open reverse repurchase agreement, stock borrowed agreement, non-cleared 
option, or non-cleared security-based swap except to the extent of any 
margin delivered to or by the customer with respect to which there is a 
customer protection requirement under section 15(c)(3) or a segregation 
requirement.''.

    (e) Trading in Security-based Swaps.--Section 6 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end the 
following:
    ``(l) Security-based Swaps.--It shall be unlawful for any person to 
effect a transaction in a security-based swap with or for a person that 
is not an eligible contract participant, unless such transaction is 
effected on a national securities exchange registered pursuant to 
subsection (b).''.
    (f) Additions of Security-based Swaps to Certain Enforcement 
Provisions.--Section 9(b) of the Securities Exchange Act of 1934 (15 
U.S.C. 78i(b)) is amended by striking paragraphs (1) through (3) and 
inserting the following:
            ``(1) any transaction in connection with any security 
        whereby any party to such transaction acquires--
                    ``(A) any put, call, straddle, or other option or 
                privilege of buying the security from or selling the 
                security to another without being bound to do so;
                    ``(B) any security futures product on the security; 
                or
                    ``(C) any security-based swap involving the security 
                or the issuer of the security;
            ``(2) any transaction in connection with any security with 
        relation to which such person has, directly or indirectly, any 
        interest in any--
                    ``(A) such put, call, straddle, option, or 
                privilege;
                    ``(B) such security futures product; or
                    ``(C) such security-based swap; or
            ``(3) any transaction in any security for the account of any 
        person who such person has reason to believe has, and who 
        actually has, directly or indirectly, any interest in any--
                    ``(A) such put, call, straddle, option, or 
                privilege;
                    ``(B) such security futures product with relation to 
                such security; or
                    ``(C) any security-based swap involving such 
                security or the issuer of such security.''.

    (g) Rulemaking Authority To Prevent Fraud, Manipulation and 
Deceptive Conduct in Security-based Swaps.--Section 9 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78i) is amended by adding at the end the 
following:
    ``(j) It shall be unlawful for any person, directly or indirectly, 
by the use of any means or instrumentality of interstate commerce or of 
the mails, or of any facility of any national securities exchange, to 
effect any transaction in, or to induce or attempt to induce the 
purchase or sale of, any security-based swap, in connection with which 
such person engages in any fraudulent, deceptive, or manipulative act or 
practice, makes any fictitious quotation, or engages in any transaction, 
practice, or course of business which operates as a fraud or deceit upon 
any person. <<NOTE: Regulations.>>  The Commission

[[Page 124 STAT. 1778]]

shall, for the purposes of this subsection, by rules and regulations 
define, and prescribe means reasonably designed to prevent, such 
transactions, acts, practices, and courses of business as are 
fraudulent, deceptive, or manipulative, and such quotations as are 
fictitious.''.

    (h) Position Limits and Position Accountability for Security-based 
Swaps.--The Securities Exchange Act of 1934 is amended by inserting 
after section 10A (15 U.S.C. 78j-1) the following:
``SEC. 10B. <<NOTE: 15 USC 78j-2.>>  POSITION LIMITS AND POSITION 
                        ACCOUNTABILITY FOR SECURITY-BASED SWAPS 
                        AND LARGE TRADER REPORTING.

    ``(a) Position Limits.-- <<NOTE: Fraud. Regulations.>> As a means 
reasonably designed to prevent fraud and manipulation, the Commission 
shall, by rule or regulation, as necessary or appropriate in the public 
interest or for the protection of investors, establish limits (including 
related hedge exemption provisions) on the size of positions in any 
security-based swap that may be held by any person. In establishing such 
limits, the Commission may require any person to aggregate positions 
in--
            ``(1) any security-based swap and any security or loan or 
        group of securities or loans on which such security-based swap 
        is based, which such security-based swap references, or to which 
        such security-based swap is related as described in paragraph 
        (68) of section 3(a), and any other instrument relating to such 
        security or loan or group or index of securities or loans; or
            ``(2) any security-based swap and--
                    ``(A) any security or group or index of securities, 
                the price, yield, value, or volatility of which, or of 
                which any interest therein, is the basis for a material 
                term of such security-based swap as described in 
                paragraph (68) of section 3(a); and
                    ``(B) any other instrument relating to the same 
                security or group or index of securities described under 
                subparagraph (A).

    ``(b) Exemptions.--The Commission, by rule, regulation, or order, 
may conditionally or unconditionally exempt any person or class of 
persons, any security-based swap or class of security-based swaps, or 
any transaction or class of transactions from any requirement the 
Commission may establish under this section with respect to position 
limits.
    ``(c) SRO Rules.--
            ``(1) In general.--As a means reasonably designed to prevent 
        fraud or manipulation, the Commission, by rule, regulation, or 
        order, as necessary or appropriate in the public interest, for 
        the protection of investors, or otherwise in furtherance of the 
        purposes of this title, may direct a self-regulatory 
        organization--
                    ``(A) to adopt rules regarding the size of positions 
                in any security-based swap that may be held by--
                          ``(i) any member of such self-regulatory 
                      organization; or
                          ``(ii) any person for whom a member of such 
                      self-regulatory organization effects transactions 
                      in such security-based swap; and

[[Page 124 STAT. 1779]]

                    ``(B) to adopt rules reasonably designed to ensure 
                compliance with requirements prescribed by the 
                Commission under this subsection.
            ``(2) Requirement to aggregate positions.--In establishing 
        the limits under paragraph (1), the self-regulatory organization 
        may require such member or person to aggregate positions in--
                    ``(A) any security-based swap and any security or 
                loan or group or narrow-based security index of 
                securities or loans on which such security-based swap is 
                based, which such security-based swap references, or to 
                which such security-based swap is related as described 
                in section 3(a)(68), and any other instrument relating 
                to such security or loan or group or narrow-based 
                security index of securities or loans; or
                    ``(B)(i) any security-based swap; and
                    ``(ii) any security-based swap and any other 
                instrument relating to the same security or group or 
                narrow-based security index of securities.

    ``(d) Large Trader Reporting.--The Commission, by rule or 
regulation, may require any person that effects transactions for such 
person's own account or the account of others in any securities-based 
swap or uncleared security-based swap and any security or loan or group 
or narrow-based security index of securities or loans as set forth in 
paragraphs (1) and (2) of subsection (a) under this section to report 
such information as the Commission may prescribe regarding any position 
or positions in any security-based swap or uncleared security-based swap 
and any security or loan or group or narrow-based security index of 
securities or loans and any other instrument relating to such security 
or loan or group or narrow-based security index of securities or loans 
as set forth in paragraphs (1) and (2) of subsection (a) under this 
section.''.
    (i) Public Reporting and Repositories for Security-based Swaps.--
Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m) is 
amended by adding at the end the following:
    ``(m) Public Availability of Security-based Swap Transaction Data.--
            ``(1) In general.--
                    ``(A) Definition of real-time public reporting.--In 
                this paragraph, the term `real-time public reporting' 
                means to report data relating to a security-based swap 
                transaction, including price and volume, as soon as 
                technologically practicable after the time at which the 
                security-based swap transaction has been executed.
                    ``(B) Purpose.--The purpose of this subsection is to 
                authorize the Commission to make security-based swap 
                transaction and pricing data available to the public in 
                such form and at such times as the Commission determines 
                appropriate to enhance price discovery.
                    ``(C) General rule.--The Commission is authorized to 
                provide by rule for the public availability of security-
                based swap transaction, volume, and pricing data as 
                follows:
                          ``(i) With respect to those security-based 
                      swaps that are subject to the mandatory clearing 
                      requirement described in section 3C(a)(1) 
                      (including those security-based swaps that are 
                      excepted from the requirement

[[Page 124 STAT. 1780]]

                      pursuant to section 3C(g)), the Commission shall 
                      require real-time public reporting for such 
                      transactions.
                          ``(ii) With respect to those security-based 
                      swaps that are not subject to the mandatory 
                      clearing requirement described in section 
                      3C(a)(1), but are cleared at a registered clearing 
                      agency, the Commission shall require real-time 
                      public reporting for such transactions.
                          ``(iii) With respect to security-based swaps 
                      that are not cleared at a registered clearing 
                      agency and which are reported to a security-based 
                      swap data repository or the Commission under 
                      section 3C(a)(6), the Commission shall require 
                      real-time public reporting for such transactions, 
                      in a manner that does not disclose the business 
                      transactions and market positions of any person.
                          ``(iv) With respect to security-based swaps 
                      that are determined to be required to be cleared 
                      under section 3C(b) but are not cleared, the 
                      Commission shall require real-time public 
                      reporting for such transactions.
                    ``(D) Registered entities and public reporting.--The 
                Commission may require registered entities to publicly 
                disseminate the security-based swap transaction and 
                pricing data required to be reported under this 
                paragraph.
                    ``(E) Rulemaking required.--With respect to the rule 
                providing for the public availability of transaction and 
                pricing data for security-based swaps described in 
                clauses (i) and (ii) of subparagraph (C), the rule 
                promulgated by the Commission shall contain provisions--
                          ``(i) to ensure such information does not 
                      identify the participants;
                          ``(ii) <<NOTE: Criteria.>> to specify the 
                      criteria for determining what constitutes a large 
                      notional security-based swap transaction (block 
                      trade) for particular markets and contracts;
                          ``(iii) to specify the appropriate time delay 
                      for reporting large notional security-based swap 
                      transactions (block trades) to the public; and
                          ``(iv) that take into account whether the 
                      public disclosure will materially reduce market 
                      liquidity.
                    ``(F) Timeliness of reporting.--Parties to a 
                security-based swap (including agents of the parties to 
                a security-based swap) shall be responsible for 
                reporting security-based swap transaction information to 
                the appropriate registered entity in a timely manner as 
                may be prescribed by the Commission.
                    ``(G) Reporting of swaps to registered security-
                based swap data repositories.--Each security-based swap 
                (whether cleared or uncleared) shall be reported to a 
                registered security-based swap data repository.
                    ``(H) Registration of clearing agencies.--A clearing 
                agency may register as a security-based swap data 
                repository.
            ``(2) Semiannual and annual public reporting of aggregate 
        security-based swap data.--

[[Page 124 STAT. 1781]]

                    ``(A) In general.--In accordance with subparagraph 
                (B), the Commission shall issue a written report on a 
                semiannual and annual basis to make available to the 
                public information relating to--
                          ``(i) the trading and clearing in the major 
                      security-based swap categories; and
                          ``(ii) the market participants and 
                      developments in new products.
                    ``(B) Use; consultation.--In preparing a report 
                under subparagraph (A), the Commission shall--
                          ``(i) use information from security-based swap 
                      data repositories and clearing agencies; and
                          ``(ii) consult with the Office of the 
                      Comptroller of the Currency, the Bank for 
                      International Settlements, and such other 
                      regulatory bodies as may be necessary.
                    ``(C) Authority of commission.--The Commission may, 
                by rule, regulation, or order, delegate the public 
                reporting responsibilities of the Commission under this 
                paragraph in accordance with such terms and conditions 
                as the Commission determines to be appropriate and in 
                the public interest.

    ``(n) Security-based Swap Data Repositories.--
            ``(1) Registration requirement.--It shall be unlawful for 
        any person, unless registered with the Commission, directly or 
        indirectly, to make use of the mails or any means or 
        instrumentality of interstate commerce to perform the functions 
        of a security-based swap data repository.
            ``(2) Inspection and examination.--Each registered security-
        based swap data repository shall be subject to inspection and 
        examination by any representative of the Commission.
            ``(3) Compliance with core principles.--
                    ``(A) In general.--To be registered, and maintain 
                registration, as a security-based swap data repository, 
                the security-based swap data repository shall comply 
                with--
                          ``(i) the requirements and core principles 
                      described in this subsection; and
                          ``(ii) any requirement that the Commission may 
                      impose by rule or regulation.
                    ``(B) Reasonable discretion of security-based swap 
                data repository.--Unless otherwise determined by the 
                Commission, by rule or regulation, a security-based swap 
                data repository described in subparagraph (A) shall have 
                reasonable discretion in establishing the manner in 
                which the security-based swap data repository complies 
                with the core principles described in this subsection.
            ``(4) Standard setting.--
                    ``(A) Data identification.--
                          ``(i) In general.--In accordance with clause 
                      (ii), the Commission shall prescribe standards 
                      that specify the data elements for each security-
                      based swap that shall be collected and maintained 
                      by each registered security-based swap data 
                      repository.
                          ``(ii) Requirement.--In carrying out clause 
                      (i), the Commission shall prescribe consistent 
                      data element standards applicable to registered 
                      entities and reporting counterparties.

[[Page 124 STAT. 1782]]

                    ``(B) Data collection and maintenance.--The 
                Commission shall prescribe data collection and data 
                maintenance standards for security-based swap data 
                repositories.
                    ``(C) Comparability.--The standards prescribed by 
                the Commission under this subsection shall be comparable 
                to the data standards imposed by the Commission on 
                clearing agencies in connection with their clearing of 
                security-based swaps.
            ``(5) Duties.--A security-based swap data repository shall--
                    ``(A) accept data prescribed by the Commission for 
                each security-based swap under subsection (b);
                    ``(B) confirm with both counterparties to the 
                security-based swap the accuracy of the data that was 
                submitted;
                    ``(C) maintain the data described in subparagraph 
                (A) in such form, in such manner, and for such period as 
                may be required by the Commission;
                    ``(D)(i) provide direct electronic access to the 
                Commission (or any designee of the Commission, including 
                another registered entity); and
                    ``(ii) provide the information described in 
                subparagraph (A) in such form and at such frequency as 
                the Commission may require to comply with the public 
                reporting requirements set forth in subsection (m);
                    ``(E) at the direction of the Commission, establish 
                automated systems for monitoring, screening, and 
                analyzing security-based swap data;
                    ``(F) maintain the privacy of any and all security-
                based swap transaction information that the security-
                based swap data repository receives from a security-
                based swap dealer, counterparty, or any other registered 
                entity; and
                    ``(G) <<NOTE: Confidentiality. Notification.>>  on a 
                confidential basis pursuant to section 24, upon request, 
                and after notifying the Commission of the request, make 
                available all data obtained by the security-based swap 
                data repository, including individual counterparty trade 
                and position data, to--
                          ``(i) each appropriate prudential regulator;
                          ``(ii) the Financial Stability Oversight 
                      Council;
                          ``(iii) the Commodity Futures Trading 
                      Commission;
                          ``(iv) the Department of Justice; and
                          ``(v) any other person that the Commission 
                      determines to be appropriate, including--
                                    ``(I) foreign financial supervisors 
                                (including foreign futures authorities);
                                    ``(II) foreign central banks; and
                                    ``(III) foreign ministries.
                    ``(H) Confidentiality and indemnification 
                agreement.--Before the security-based swap data 
                repository may share information with any entity 
                described in subparagraph (G)--
                          ``(i) the security-based swap data repository 
                      shall receive a written agreement from each entity 
                      stating that the entity shall abide by the 
                      confidentiality requirements described in section 
                      24 relating to the information on security-based 
                      swap transactions that is provided; and

[[Page 124 STAT. 1783]]

                          ``(ii) each entity shall agree to indemnify 
                      the security-based swap data repository and the 
                      Commission for any expenses arising from 
                      litigation relating to the information provided 
                      under section 24.
            ``(6) Designation of chief compliance officer.--
                    ``(A) In general.--Each security-based swap data 
                repository shall designate an individual to serve as a 
                chief compliance officer.
                    ``(B) Duties.--The chief compliance officer shall--
                          ``(i) report directly to the board or to the 
                      senior officer of the security-based swap data 
                      repository;
                          ``(ii) review the compliance of the security-
                      based swap data repository with respect to the 
                      requirements and core principles described in this 
                      subsection;
                          ``(iii) in consultation with the board of the 
                      security-based swap data repository, a body 
                      performing a function similar to the board of the 
                      security-based swap data repository, or the senior 
                      officer of the security-based swap data 
                      repository, resolve any conflicts of interest that 
                      may arise;
                          ``(iv) be responsible for administering each 
                      policy and procedure that is required to be 
                      established pursuant to this section;
                          ``(v) ensure compliance with this title 
                      (including regulations) relating to agreements, 
                      contracts, or transactions, including each rule 
                      prescribed by the Commission under this section;
                          ``(vi) establish procedures for the 
                      remediation of noncompliance issues identified by 
                      the chief compliance officer through any--
                                    ``(I) compliance office review;
                                    ``(II) look-back;
                                    ``(III) internal or external audit 
                                finding;
                                    ``(IV) self-reported error; or
                                    ``(V) validated complaint; and
                          ``(vii) establish and follow appropriate 
                      procedures for the handling, management response, 
                      remediation, retesting, and closing of 
                      noncompliance issues.
                    ``(C) Annual reports.--
                          ``(i) <<NOTE: Regulations.>>  In general.--In 
                      accordance with rules prescribed by the 
                      Commission, the chief compliance officer shall 
                      annually prepare and sign a report that contains a 
                      description of--
                                    ``(I) the compliance of the 
                                security-based swap data repository of 
                                the chief compliance officer with 
                                respect to this title (including 
                                regulations); and
                                    ``(II) each policy and procedure of 
                                the security-based swap data repository 
                                of the chief compliance officer 
                                (including the code of ethics and 
                                conflict of interest policies of the 
                                security-based swap data repository).
                          ``(ii) Requirements.--A compliance report 
                      under clause (i) shall--
                                    ``(I) accompany each appropriate 
                                financial report of the security-based 
                                swap data repository that is required to 
                                be furnished to the Commission pursuant 
                                to this section; and

[[Page 124 STAT. 1784]]

                                    ``(II) <<NOTE: Certification.>>  
                                include a certification that, under 
                                penalty of law, the compliance report is 
                                accurate and complete.
            ``(7) Core principles applicable to security-based swap data 
        repositories.--
                    ``(A) Antitrust considerations.--Unless necessary or 
                appropriate to achieve the purposes of this title, the 
                swap data repository shall not--
                          ``(i) adopt any rule or take any action that 
                      results in any unreasonable restraint of trade; or
                          ``(ii) impose any material anticompetitive 
                      burden on the trading, clearing, or reporting of 
                      transactions.
                    ``(B) Governance arrangements.--Each security-based 
                swap data repository shall establish governance 
                arrangements that are transparent--
                          ``(i) to fulfill public interest requirements; 
                      and
                          ``(ii) to support the objectives of the 
                      Federal Government, owners, and participants.
                    ``(C) Conflicts of interest.--Each security-based 
                swap data repository shall--
                          ``(i) <<NOTE: Regulations.>>  establish and 
                      enforce rules to minimize conflicts of interest in 
                      the decision-making process of the security-based 
                      swap data repository; and
                          ``(ii) <<NOTE: Process.>>  establish a process 
                      for resolving any conflicts of interest described 
                      in clause (i).
                    ``(D) Additional duties developed by commission.--
                          ``(i) In general.--The Commission may develop 
                      1 or more additional duties applicable to 
                      security-based swap data repositories.
                          ``(ii) Consideration of evolving standards.--
                      In developing additional duties under subparagraph 
                      (A), the Commission may take into consideration 
                      any evolving standard of the United States or the 
                      international community.
                          ``(iii) Additional duties for commission 
                      designees.--The Commission shall establish 
                      additional duties for any registrant described in 
                      section 13(m)(2)(C) in order to minimize conflicts 
                      of interest, protect data, ensure compliance, and 
                      guarantee the safety and security of the security-
                      based swap data repository.
            ``(8) Required registration for security-based swap data 
        repositories.--Any person that is required to be registered as a 
        security-based swap data repository under this subsection shall 
        register with the Commission, regardless of whether that person 
        is also licensed under the Commodity Exchange Act as a swap data 
        repository.
            ``(9) Rules.--The Commission shall adopt rules governing 
        persons that are registered under this subsection.''.
SEC. 764. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP 
                        DEALERS AND MAJOR SECURITY-BASED SWAP 
                        PARTICIPANTS.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 15E (15 U.S.C. 78o-7) the 
following:

[[Page 124 STAT. 1785]]

<<NOTE: 15 USC 78o-8.>> ``SEC. 15F. REGISTRATION AND REGULATION OF 
                        SECURITY-BASED SWAP DEALERS AND MAJOR 
                        SECURITY-BASED SWAP PARTICIPANTS.

    ``(a) Registration.--
            ``(1) Security-based swap dealers.--It shall be unlawful for 
        any person to act as a security-based swap dealer unless the 
        person is registered as a security-based swap dealer with the 
        Commission.
            ``(2) Major security-based swap participants.--It shall be 
        unlawful for any person to act as a major security-based swap 
        participant unless the person is registered as a major security-
        based swap participant with the Commission.

    ``(b) Requirements.--
            ``(1) In general.--A person shall register as a security-
        based swap dealer or major security-based swap participant by 
        filing a registration application with the Commission.
            ``(2) Contents.--
                    ``(A) In general.--The application shall be made in 
                such form and manner as prescribed by the Commission, 
                and shall contain such information, as the Commission 
                considers necessary concerning the business in which the 
                applicant is or will be engaged.
                    ``(B) Continual reporting.--A person that is 
                registered as a security-based swap dealer or major 
                security-based swap participant shall continue to submit 
                to the Commission reports that contain such information 
                pertaining to the business of the person as the 
                Commission may require.
            ``(3) Expiration.--Each registration under this section 
        shall expire at such time as the Commission may prescribe by 
        rule or regulation.
            ``(4) Rules.--Except as provided in subsections (d) and (e), 
        the Commission may prescribe rules applicable to security-based 
        swap dealers and major security-based swap participants, 
        including rules that limit the activities of non-bank security-
        based swap dealers and major security-based swap participants.
            ``(5) Transition.-- <<NOTE: Deadline.>> Not later than 1 
        year after the date of enactment of the Wall Street Transparency 
        and Accountability Act of 2010, the Commission shall issue rules 
        under this section to provide for the registration of security-
        based swap dealers and major security-based swap participants.
            ``(6) Statutory disqualification.--Except to the extent 
        otherwise specifically provided by rule, regulation, or order of 
        the Commission, it shall be unlawful for a security-based swap 
        dealer or a major security-based swap participant to permit any 
        person associated with a security-based swap dealer or a major 
        security-based swap participant who is subject to a statutory 
        disqualification to effect or be involved in effecting security-
        based swaps on behalf of the security-based swap dealer or major 
        security-based swap participant, if the security-based swap 
        dealer or major security-based swap participant knew, or in the 
        exercise of reasonable care should have known, of the statutory 
        disqualification.

    ``(c) Dual Registration.--
            ``(1) Security-based swap dealer.--Any person that is 
        required to be registered as a security-based swap dealer under 
        this section shall register with the Commission, regardless

[[Page 124 STAT. 1786]]

        of whether the person also is registered with the Commodity 
        Futures Trading Commission as a swap dealer.
            ``(2) Major security-based swap participant.--Any person 
        that is required to be registered as a major security-based swap 
        participant under this section shall register with the 
        Commission, regardless of whether the person also is registered 
        with the Commodity Futures Trading Commission as a major swap 
        participant.

    ``(d) Rulemaking.--
            ``(1) In general.--The Commission shall adopt rules for 
        persons that are registered as security-based swap dealers or 
        major security-based swap participants under this section.
            ``(2) Exception for prudential requirements.--
                    ``(A) In general.--The Commission may not prescribe 
                rules imposing prudential requirements on security-based 
                swap dealers or major security-based swap participants 
                for which there is a prudential regulator.
                    ``(B) Applicability.--Subparagraph (A) does not 
                limit the authority of the Commission to prescribe rules 
                as directed under this section.

    ``(e) Capital and Margin Requirements.--
            ``(1) In general.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are banks.--Each 
                registered security-based swap dealer and major 
                security-based swap participant for which there is not a 
                prudential regulator shall meet such minimum capital 
                requirements and minimum initial and variation margin 
                requirements as the prudential regulator shall by rule 
                or regulation prescribe under paragraph (2)(A).
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not banks.--
                Each registered security-based swap dealer and major 
                security-based swap participant for which there is not a 
                prudential regulator shall meet such minimum capital 
                requirements and minimum initial and variation margin 
                requirements as the Commission shall by rule or 
                regulation prescribe under paragraph (2)(B).
            ``(2) Rules.--
                    ``(A) Security-based swap dealers and major 
                security-based swap participants that are banks.--The 
                prudential regulators, in consultation with the 
                Commission and the Commodity Futures Trading Commission, 
                shall adopt rules for security-based swap dealers and 
                major security-based swap participants, with respect to 
                their activities as a swap dealer or major swap 
                participant, for which there is a prudential regulator 
                imposing--
                          ``(i) capital requirements; and
                          ``(ii) both initial and variation margin 
                      requirements on all security-based swaps that are 
                      not cleared by a registered clearing agency.
                    ``(B) Security-based swap dealers and major 
                security-based swap participants that are not banks.--
                The Commission shall adopt rules for security-based swap 
                dealers and major security-based swap participants, with 
                respect to their activities as a swap dealer or major 
                swap

[[Page 124 STAT. 1787]]

                participant, for which there is not a prudential 
                regulator imposing--
                          ``(i) capital requirements; and
                          ``(ii) both initial and variation margin 
                      requirements on all swaps that are not cleared by 
                      a registered clearing agency.
                    ``(C) Capital.--In setting capital requirements for 
                a person that is designated as a security-based swap 
                dealer or a major security-based swap participant for a 
                single type or single class or category of security-
                based swap or activities, the prudential regulator and 
                the Commission shall take into account the risks 
                associated with other types of security-based swaps or 
                classes of security-based swaps or categories of 
                security-based swaps engaged in and the other activities 
                conducted by that person that are not otherwise subject 
                to regulation applicable to that person by virtue of the 
                status of the person.
            ``(3) Standards for capital and margin.--
                    ``(A) In general.--To offset the greater risk to the 
                security-based swap dealer or major security-based swap 
                participant and the financial system arising from the 
                use of security-based swaps that are not cleared, the 
                requirements imposed under paragraph (2) shall --
                          ``(i) help ensure the safety and soundness of 
                      the security-based swap dealer or major security-
                      based swap participant; and
                          ``(ii) be appropriate for the risk associated 
                      with the non-cleared security-based swaps held as 
                      a security-based swap dealer or major security-
                      based swap participant.
                    ``(B) Rule of construction.--
                          ``(i) In general.--Nothing in this section 
                      shall limit, or be construed to limit, the 
                      authority--
                                    ``(I) of the Commission to set 
                                financial responsibility rules for a 
                                broker or dealer registered pursuant to 
                                section 15(b) (except for section 
                                15(b)(11) thereof) in accordance with 
                                section 15(c)(3); or
                                    ``(II) of the Commodity Futures 
                                Trading Commission to set financial 
                                responsibility rules for a futures 
                                commission merchant or introducing 
                                broker registered pursuant to section 
                                4f(a) of the Commodity Exchange Act 
                                (except for section 4f(a)(3) thereof) in 
                                accordance with section 4f(b) of the 
                                Commodity Exchange Act.
                          ``(ii) Futures commission merchants and other 
                      dealers.--A futures commission merchant, 
                      introducing broker, broker, or dealer shall 
                      maintain sufficient capital to comply with the 
                      stricter of any applicable capital requirements to 
                      which such futures commission merchant, 
                      introducing broker, broker, or dealer is subject 
                      to under this title or the Commodity Exchange Act.
                    ``(C) Margin requirements.--In prescribing margin 
                requirements under this subsection, the prudential 
                regulator with respect to security-based swap dealers 
                and major security-based swap participants that are 
                depository

[[Page 124 STAT. 1788]]

                institutions, and the Commission with respect to 
                security-based swap dealers and major security-based 
                swap participants that are not depository institutions 
                shall permit the use of noncash collateral, as the 
                regulator or the Commission determines to be consistent 
                with--
                          ``(i) preserving the financial integrity of 
                      markets trading security-based swaps; and
                          ``(ii) preserving the stability of the United 
                      States financial system.
                    ``(D) Comparability of capital and margin 
                requirements.--
                          ``(i) In general.-- 
                      <<NOTE: Deadline. Consultation.>> The prudential 
                      regulators, the Commission, and the Securities and 
                      Exchange Commission shall periodically (but not 
                      less frequently than annually) consult on minimum 
                      capital requirements and minimum initial and 
                      variation margin requirements.
                          ``(ii) Comparability.--The entities described 
                      in clause (i) shall, to the maximum extent 
                      practicable, establish and maintain comparable 
                      minimum capital requirements and minimum initial 
                      and variation margin requirements, including the 
                      use of noncash collateral, for--
                                    ``(I) security-based swap dealers; 
                                and
                                    ``(II) major security-based swap 
                                participants.

    ``(f) Reporting and Recordkeeping.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant--
                    ``(A) shall make such reports as are required by the 
                Commission, by rule or regulation, regarding the 
                transactions and positions and financial condition of 
                the registered security-based swap dealer or major 
                security-based swap participant;
                    ``(B)(i) for which there is a prudential regulator, 
                shall keep books and records of all activities related 
                to the business as a security-based swap dealer or major 
                security-based swap participant in such form and manner 
                and for such period as may be prescribed by the 
                Commission by rule or regulation; and
                    ``(ii) for which there is no prudential regulator, 
                shall keep books and records in such form and manner and 
                for such period as may be prescribed by the Commission 
                by rule or regulation; and
                    ``(C) shall keep books and records described in 
                subparagraph (B) open to inspection and examination by 
                any representative of the Commission.
            ``(2) Rules.--The Commission shall adopt rules governing 
        reporting and recordkeeping for security-based swap dealers and 
        major security-based swap participants.

    ``(g) Daily Trading Records.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall maintain 
        daily trading records of the security-based swaps of the 
        registered security-based swap dealer and major security-based 
        swap participant and all related records (including related cash 
        or forward transactions) and recorded communications, including 
        electronic mail, instant messages, and recordings of

[[Page 124 STAT. 1789]]

        telephone calls, for such period as may be required by the 
        Commission by rule or regulation.
            ``(2) Information requirements.--The daily trading records 
        shall include such information as the Commission shall require 
        by rule or regulation.
            ``(3) Counterparty records.--Each registered security-based 
        swap dealer and major security-based swap participant shall 
        maintain daily trading records for each counterparty in a manner 
        and form that is identifiable with each security-based swap 
        transaction.
            ``(4) Audit trail.--Each registered security-based swap 
        dealer and major security-based swap participant shall maintain 
        a complete audit trail for conducting comprehensive and accurate 
        trade reconstructions.
            ``(5) Rules.--The Commission shall adopt rules governing 
        daily trading records for security-based swap dealers and major 
        security-based swap participants.

    ``(h) Business Conduct Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with such business conduct standards as prescribed in paragraph 
        (3) and as may be prescribed by the Commission by rule or 
        regulation that relate to--
                    ``(A) fraud, manipulation, and other abusive 
                practices involving security-based swaps (including 
                security-based swaps that are offered but not entered 
                into);
                    ``(B) diligent supervision of the business of the 
                registered security-based swap dealer and major 
                security-based swap participant;
                    ``(C) adherence to all applicable position limits; 
                and
                    ``(D) such other matters as the Commission 
                determines to be appropriate.
            ``(2) <<NOTE: Compliance.>>  Responsibilities with respect 
        to special entities.--
                    ``(A) Advising special entities.--A security-based 
                swap dealer or major security-based swap participant 
                that acts as an advisor to special entity regarding a 
                security-based swap shall comply with the requirements 
                of paragraph (4) with respect to such special entity.
                    ``(B) Entering of security-based swaps with respect 
                to special entities.--A security-based swap dealer that 
                enters into or offers to enter into security-based swap 
                with a special entity shall comply with the requirements 
                of paragraph (5) with respect to such special entity.
                    ``(C) Special entity defined.--For purposes of this 
                subsection, the term `special entity' means--
                          ``(i) a Federal agency;
                          ``(ii) a State, State agency, city, county, 
                      municipality, or other political subdivision of a 
                      State or;
                          ``(iii) any employee benefit plan, as defined 
                      in section 3 of the Employee Retirement Income 
                      Security Act of 1974 (29 U.S.C. 1002);
                          ``(iv) any governmental plan, as defined in 
                      section 3 of the Employee Retirement Income 
                      Security Act of 1974 (29 U.S.C. 1002); or

[[Page 124 STAT. 1790]]

                          ``(v) any endowment, including an endowment 
                      that is an organization described in section 
                      501(c)(3) of the Internal Revenue Code of 1986.
            ``(3) Business conduct requirements.--Business conduct 
        requirements adopted by the Commission shall--
                    ``(A) <<NOTE: Verification.>>  establish a duty for 
                a security-based swap dealer or major security-based 
                swap participant to verify that any counterparty meets 
                the eligibility standards for an eligible contract 
                participant;
                    ``(B) require disclosure by the security-based swap 
                dealer or major security-based swap participant to any 
                counterparty to the transaction (other than a security-
                based swap dealer, major security-based swap 
                participant, security-based swap dealer, or major 
                security-based swap participant) of--
                          ``(i) information about the material risks and 
                      characteristics of the security-based swap;
                          ``(ii) any material incentives or conflicts of 
                      interest that the security-based swap dealer or 
                      major security-based swap participant may have in 
                      connection with the security-based swap; and
                          ``(iii)(I) for cleared security-based swaps, 
                      upon the request of the counterparty, receipt of 
                      the daily mark of the transaction from the 
                      appropriate derivatives clearing organization; and
                          ``(II) for uncleared security-based swaps, 
                      receipt of the daily mark of the transaction from 
                      the security-based swap dealer or the major 
                      security-based swap participant;
                    ``(C) establish a duty for a security-based swap 
                dealer or major security-based swap participant to 
                communicate in a fair and balanced manner based on 
                principles of fair dealing and good faith; and
                    ``(D) establish such other standards and 
                requirements as the Commission may determine are 
                appropriate in the public interest, for the protection 
                of investors, or otherwise in furtherance of the 
                purposes of this Act.
            ``(4) Special requirements for security-based swap dealers 
        acting as advisors.--
                    ``(A) In general.--It shall be unlawful for a 
                security-based swap dealer or major security-based swap 
                participant--
                          ``(i) to employ any device, scheme, or 
                      artifice to defraud any special entity or 
                      prospective customer who is a special entity;
                          ``(ii) to engage in any transaction, practice, 
                      or course of business that operates as a fraud or 
                      deceit on any special entity or prospective 
                      customer who is a special entity; or
                          ``(iii) to engage in any act, practice, or 
                      course of business that is fraudulent, deceptive, 
                      or manipulative.
                    ``(B) Duty.--Any security-based swap dealer that 
                acts as an advisor to a special entity shall have a duty 
                to act in the best interests of the special entity.
                    ``(C) Reasonable efforts.--Any security-based swap 
                dealer that acts as an advisor to a special entity shall 
                make reasonable efforts to obtain such information as is

[[Page 124 STAT. 1791]]

                necessary to make a reasonable determination that any 
                security-based swap recommended by the security-based 
                swap dealer is in the best interests of the special 
                entity, including information relating to--
                          ``(i) the financial status of the special 
                      entity;
                          ``(ii) the tax status of the special entity;
                          ``(iii) the investment or financing objectives 
                      of the special entity; and
                          ``(iv) any other information that the 
                      Commission may prescribe by rule or regulation.
            ``(5) Special requirements for security-based swap dealers 
        as counterparties to special entities.--
                    ``(A) In general.--Any security-based swap dealer or 
                major security-based swap participant that offers to or 
                enters into a security-based swap with a special entity 
                shall--
                          ``(i) <<NOTE: Compliance.>>  comply with any 
                      duty established by the Commission for a security-
                      based swap dealer or major security-based swap 
                      participant, with respect to a counterparty that 
                      is an eligible contract participant within the 
                      meaning of subclause (I) or (II) of clause (vii) 
                      of section 1a(18) of the Commodity Exchange Act, 
                      that requires the security-based swap dealer or 
                      major security-based swap participant to have a 
                      reasonable basis to believe that the counterparty 
                      that is a special entity has an independent 
                      representative that--
                                    ``(I) has sufficient knowledge to 
                                evaluate the transaction and risks;
                                    ``(II) is not subject to a statutory 
                                disqualification;
                                    ``(III) is independent of the 
                                security-based swap dealer or major 
                                security-based swap participant;
                                    ``(IV) undertakes a duty to act in 
                                the best interests of the counterparty 
                                it represents;
                                    ``(V) makes appropriate disclosures;
                                    ``(VI) will provide written 
                                representations to the special entity 
                                regarding fair pricing and the 
                                appropriateness of the transaction; and
                                    ``(VII) in the case of employee 
                                benefit plans subject to the Employee 
                                Retirement Income Security act of 1974, 
                                is a fiduciary as defined in section 3 
                                of that Act (29 U.S.C. 1002); and
                          ``(ii) before the initiation of the 
                      transaction, disclose to the special entity in 
                      writing the capacity in which the security-based 
                      swap dealer is acting.
                    ``(B) Commission authority.--The Commission may 
                establish such other standards and requirements under 
                this paragraph as the Commission may determine are 
                appropriate in the public interest, for the protection 
                of investors, or otherwise in furtherance of the 
                purposes of this Act.
            ``(6) Rules.--The Commission shall prescribe rules under 
        this subsection governing business conduct standards for 
        security-based swap dealers and major security-based swap 
        participants.

[[Page 124 STAT. 1792]]

            ``(7) Applicability.--This subsection shall not apply with 
        respect to a transaction that is--
                    ``(A) initiated by a special entity on an exchange 
                or security-based swaps execution facility; and
                    ``(B) the security-based swap dealer or major 
                security-based swap participant does not know the 
                identity of the counterparty to the transaction.''

    ``(i) Documentation Standards.--
            ``(1) In general.--Each registered security-based swap 
        dealer and major security-based swap participant shall conform 
        with such standards as may be prescribed by the Commission, by 
        rule or regulation, that relate to timely and accurate 
        confirmation, processing, netting, documentation, and valuation 
        of all security-based swaps.
            ``(2) Rules.--The Commission shall adopt rules governing 
        documentation standards for security-based swap dealers and 
        major security-based swap participants.

    ``(j) <<NOTE: Compliance.>>  Duties.--Each registered security-based 
swap dealer and major security-based swap participant shall, at all 
times, comply with the following requirements:
            ``(1) Monitoring of trading.--The security-based swap dealer 
        or major security-based swap participant shall monitor its 
        trading in security-based swaps to prevent violations of 
        applicable position limits.
            ``(2) Risk management procedures.--The security-based swap 
        dealer or major security-based swap participant shall establish 
        robust and professional risk management systems adequate for 
        managing the day-to-day business of the security-based swap 
        dealer or major security-based swap participant.
            ``(3) Disclosure of general information.--The security-based 
        swap dealer or major security-based swap participant shall 
        disclose to the Commission and to the prudential regulator for 
        the security-based swap dealer or major security-based swap 
        participant, as applicable, information concerning--
                    ``(A) terms and conditions of its security-based 
                swaps;
                    ``(B) security-based swap trading operations, 
                mechanisms, and practices;
                    ``(C) financial integrity protections relating to 
                security-based swaps; and
                    ``(D) other information relevant to its trading in 
                security-based swaps.
            ``(4) Ability to obtain information.--The security-based 
        swap dealer or major security-based swap participant shall--
                    ``(A) establish and enforce internal systems and 
                procedures to obtain any necessary information to 
                perform any of the functions described in this section; 
                and
                    ``(B) provide the information to the Commission and 
                to the prudential regulator for the security-based swap 
                dealer or major security-based swap participant, as 
                applicable, on request.
            ``(5) <<NOTE: Procedures.>>  Conflicts of interest.--The 
        security-based swap dealer and major security-based swap 
        participant shall implement conflict-of-interest systems and 
        procedures that--
                    ``(A) establish structural and institutional 
                safeguards to ensure that the activities of any person 
                within the firm relating to research or analysis of the 
                price or market for any security-based swap or acting in 
                a role of providing

[[Page 124 STAT. 1793]]

                clearing activities or making determinations as to 
                accepting clearing customers are separated by 
                appropriate informational partitions within the firm 
                from the review, pressure, or oversight of persons whose 
                involvement in pricing, trading, or clearing activities 
                might potentially bias their judgment or supervision and 
                contravene the core principles of open access and the 
                business conduct standards described in this title; and
                    ``(B) address such other issues as the Commission 
                determines to be appropriate.
            ``(6) Antitrust considerations.--Unless necessary or 
        appropriate to achieve the purposes of this title, the security-
        based swap dealer or major security-based swap participant shall 
        not--
                    ``(A) adopt any process or take any action that 
                results in any unreasonable restraint of trade; or
                    ``(B) impose any material anticompetitive burden on 
                trading or clearing.
            ``(7) Rules.--The Commission shall prescribe rules under 
        this subsection governing duties of security-based swap dealers 
        and major security-based swap participants.

    ``(k) Designation of Chief Compliance Officer.--
            ``(1) In general.--Each security-based swap dealer and major 
        security-based swap participant shall designate an individual to 
        serve as a chief compliance officer.
            ``(2) Duties.--The chief compliance officer shall--
                    ``(A) report directly to the board or to the senior 
                officer of the security-based swap dealer or major 
                security-based swap participant;
                    ``(B) review the compliance of the security-based 
                swap dealer or major security-based swap participant 
                with respect to the security-based swap dealer and major 
                security-based swap participant requirements described 
                in this section;
                    ``(C) in consultation with the board of directors, a 
                body performing a function similar to the board, or the 
                senior officer of the organization, resolve any 
                conflicts of interest that may arise;
                    ``(D) be responsible for administering each policy 
                and procedure that is required to be established 
                pursuant to this section;
                    ``(E) ensure compliance with this title (including 
                regulations) relating to security-based swaps, including 
                each rule prescribed by the Commission under this 
                section;
                    ``(F) establish procedures for the remediation of 
                noncompliance issues identified by the chief compliance 
                officer through any--
                          ``(i) compliance office review;
                          ``(ii) look-back;
                          ``(iii) internal or external audit finding;
                          ``(iv) self-reported error; or
                          ``(v) validated complaint; and
                    ``(G) establish and follow appropriate procedures 
                for the handling, management response, remediation, 
                retesting, and closing of noncompliance issues.
            ``(3) Annual reports.--

[[Page 124 STAT. 1794]]

                    ``(A) In general.--In accordance with rules 
                prescribed by the Commission, the chief compliance 
                officer shall annually prepare and sign a report that 
                contains a description of--
                          ``(i) the compliance of the security-based 
                      swap dealer or major swap participant with respect 
                      to this title (including regulations); and
                          ``(ii) each policy and procedure of the 
                      security-based swap dealer or major security-based 
                      swap participant of the chief compliance officer 
                      (including the code of ethics and conflict of 
                      interest policies).
                    ``(B) Requirements.--A compliance report under 
                subparagraph (A) shall--
                          ``(i) accompany each appropriate financial 
                      report of the security-based swap dealer or major 
                      security-based swap participant that is required 
                      to be furnished to the Commission pursuant to this 
                      section; and
                          ``(ii) <<NOTE: Certification.>>  include a 
                      certification that, under penalty of law, the 
                      compliance report is accurate and complete.

    ``(l) Enforcement and Administrative Proceeding Authority.--
            ``(1) Primary enforcement authority.--
                    ``(A) Securities and exchange commission.--Except as 
                provided in subparagraph (B), (C), or (D), the 
                Commission shall have primary authority to enforce 
                subtitle B, and the amendments made by subtitle B of the 
                Wall Street Transparency and Accountability Act of 2010, 
                with respect to any person.
                    ``(B) Prudential regulators.--The prudential 
                regulators shall have exclusive authority to enforce the 
                provisions of subsection (e) and other prudential 
                requirements of this title (including risk management 
                standards), with respect to security-based swap dealers 
                or major security-based swap participants for which they 
                are the prudential regulator.
                    ``(C) Referral.--
                          ``(i) Violations of nonprudential 
                      requirements.--If the appropriate Federal banking 
                      agency for security-based swap dealers or major 
                      security-based swap participants that are 
                      depository institutions has cause to believe that 
                      such security-based swap dealer or major security-
                      based swap participant may have engaged in conduct 
                      that constitutes a violation of the nonprudential 
                      requirements of this section or rules adopted by 
                      the Commission thereunder, the agency may 
                      recommend in writing to the Commission that the 
                      Commission initiate an enforcement proceeding as 
                      authorized under this title. The recommendation 
                      shall be accompanied by a written explanation of 
                      the concerns giving rise to the recommendation.
                          ``(ii) Violations of prudential 
                      requirements.--If the Commission has cause to 
                      believe that a securities-based swap dealer or 
                      major securities-based swap participant that has a 
                      prudential regulator may have engaged in conduct 
                      that constitute a violation of the prudential 
                      requirements of subsection (e) or rules adopted 
                      thereunder, the Commission may recommend

[[Page 124 STAT. 1795]]

                      in writing to the prudential regulator that the 
                      prudential regulator initiate an enforcement 
                      proceeding as authorized under this title. The 
                      recommendation shall be accompanied by a written 
                      explanation of the concerns giving rise to the 
                      recommendation.
                    ``(D) <<NOTE: Time period.>>  Backstop enforcement 
                authority.--
                          ``(i) Initiation of enforcement proceeding by 
                      prudential regulator.--If the Commission does not 
                      initiate an enforcement proceeding before the end 
                      of the 90-day period beginning on the date on 
                      which the Commission receives a written report 
                      under subsection (C)(i), the prudential regulator 
                      may initiate an enforcement proceeding.
                          ``(ii) Initiation of enforcement proceeding by 
                      commission.--If the prudential regulator does not 
                      initiate an enforcement proceeding before the end 
                      of the 90-day period beginning on the date on 
                      which the prudential regulator receives a written 
                      report under subsection (C)(ii), the Commission 
                      may initiate an enforcement proceeding.
            ``(2) Censure, denial, suspension; notice and hearing.--The 
        Commission, by order, shall censure, place limitations on the 
        activities, functions, or operations of, or revoke the 
        registration of any security-based swap dealer or major 
        security-based swap participant that has registered with the 
        Commission pursuant to subsection (b) if the Commission finds, 
        on the record after notice and opportunity for hearing, that 
        such censure, placing of limitations, or revocation is in the 
        public interest and that such security-based swap dealer or 
        major security-based swap participant, or any person associated 
        with such security-based swap dealer or major security-based 
        swap participant effecting or involved in effecting transactions 
        in security-based swaps on behalf of such security-based swap 
        dealer or major security-based swap participant, whether prior 
        or subsequent to becoming so associated--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) has been convicted of any offense specified in 
                subparagraph (B) of such paragraph (4) within 10 years 
                of the commencement of the proceedings under this 
                subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such paragraph 
                (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(3) <<NOTE: Time period.>>  Associated persons.--With 
        respect to any person who is associated, who is seeking to 
        become associated, or, at the time of the alleged misconduct, 
        who was associated or was seeking to become associated with a 
        security-based swap dealer or major security-based swap 
        participant for the purpose of effecting or being involved in 
        effecting security-based swaps

[[Page 124 STAT. 1796]]

        on behalf of such security-based swap dealer or major security-
        based swap participant, the Commission, by order, shall censure, 
        place limitations on the activities or functions of such person, 
        or suspend for a period not exceeding 12 months, or bar such 
        person from being associated with a security-based swap dealer 
        or major security-based swap participant, if the Commission 
        finds, on the record after notice and opportunity for a hearing, 
        that such censure, placing of limitations, suspension, or bar is 
        in the public interest and that such person--
                    ``(A) has committed or omitted any act, or is 
                subject to an order or finding, enumerated in 
                subparagraph (A), (D), or (E) of paragraph (4) of 
                section 15(b);
                    ``(B) <<NOTE: Deadline.>>  has been convicted of any 
                offense specified in subparagraph (B) of such paragraph 
                (4) within 10 years of the commencement of the 
                proceedings under this subsection;
                    ``(C) is enjoined from any action, conduct, or 
                practice specified in subparagraph (C) of such paragraph 
                (4);
                    ``(D) is subject to an order or a final order 
                specified in subparagraph (F) or (H), respectively, of 
                such paragraph (4); or
                    ``(E) has been found by a foreign financial 
                regulatory authority to have committed or omitted any 
                act, or violated any foreign statute or regulation, 
                enumerated in subparagraph (G) of such paragraph (4).
            ``(4) Unlawful conduct.--It shall be unlawful--
                    ``(A) for any person as to whom an order under 
                paragraph (3) is in effect, without the consent of the 
                Commission, willfully to become, or to be, associated 
                with a security-based swap dealer or major security-
                based swap participant in contravention of such order; 
                or
                    ``(B) for any security-based swap dealer or major 
                security-based swap participant to permit such a person, 
                without the consent of the Commission, to become or 
                remain a person associated with the security-based swap 
                dealer or major security-based swap participant in 
                contravention of such order, if such security-based swap 
                dealer or major security-based swap participant knew, or 
                in the exercise of reasonable care should have known, of 
                such order.''.

    (b) <<NOTE: 15 USC 8342.>>  Savings Clause.--Notwithstanding any 
other provision of this title, nothing in this subtitle shall be 
construed as divesting any appropriate Federal banking agency of any 
authority it may have to establish or enforce, with respect to a person 
for which such agency is the appropriate Federal banking agency, 
prudential or other standards pursuant to authority by Federal law other 
than this title.
SEC. 765. <<NOTE: 15 USC 8343.>>  RULEMAKING ON CONFLICT OF 
                        INTEREST.

    (a) <<NOTE: Deadline.>>  In General.--In order to mitigate conflicts 
of interest, not later than 180 days after the date of enactment of the 
Wall Street Transparency and Accountability Act of 2010, the Securities 
and Exchange Commission shall adopt rules which may include numerical 
limits on the control of, or the voting rights with respect to, any 
clearing agency that clears security-based swaps, or on the control of 
any security-based swap execution facility or national securities 
exchange that posts or makes available for trading security-based swaps, 
by a bank holding company (as defined in section

[[Page 124 STAT. 1797]]

2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841)) with total 
consolidated assets of $50,000,000,000 or more, a nonbank financial 
company (as defined in section 102) supervised by the Board of Governors 
of the Federal Reserve System, affiliate of such a bank holding company 
or nonbank financial company, a security-based swap dealer, major 
security-based swap participant, or person associated with a security-
based swap dealer or major security-based swap participant.

    (b) Purposes.--The Securities and Exchange Commission shall adopt 
rules if the Commission determines, after the review described in 
subsection (a), that such rules are necessary or appropriate to improve 
the governance of, or to mitigate systemic risk, promote competition, or 
mitigate conflicts of interest in connection with a security-based swap 
dealer or major security-based swap participant's conduct of business 
with, a clearing agency, national securities exchange, or security-based 
swap execution facility that clears, posts, or makes available for 
trading security-based swaps and in which such security-based swap 
dealer or major security-based swap participant has a material debt or 
equity investment.
    (c) Considerations.--In adopting rules pursuant to this section, the 
Securities and Exchange Commission shall consider any conflicts of 
interest arising from the amount of equity owned by a single investor, 
the ability to vote, cause the vote of, or withhold votes entitled to be 
cast on any matters by the holders of the ownership interest, and the 
governance arrangements of any derivatives clearing organization that 
clears swaps, or swap execution facility or board of trade designated as 
a contract market that posts swaps or makes swaps available for trading.
SEC. 766. REPORTING AND RECORDKEEPING.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 13 the following:
``SEC. 13A. <<NOTE: 15 USC 78m-1.>>  REPORTING AND RECORDKEEPING 
                        FOR CERTAIN SECURITY-BASED SWAPS.

    ``(a) Required Reporting of Security-based Swaps Not Accepted by Any 
Clearing Agency or Derivatives Clearing Organization.--
            ``(1) In general.--Each security-based swap that is not 
        accepted for clearing by any clearing agency or derivatives 
        clearing organization shall be reported to--
                    ``(A) a security-based swap data repository 
                described in section 13(n); or
                    ``(B) in the case in which there is no security-
                based swap data repository that would accept the 
                security-based swap, to the Commission pursuant to this 
                section within such time period as the Commission may by 
                rule or regulation prescribe.
            ``(2) Transition rule for preenactment security-based 
        swaps.--
                    ``(A) Security-based swaps entered into before the 
                date of enactment of the wall street transparency and 
                accountability act of 2010.--Each security-based swap 
                entered into before the date of enactment of the Wall 
                Street Transparency and Accountability Act of 2010, the 
                terms of which have not expired as of the date of 
                enactment of that Act, shall be reported to a registered

[[Page 124 STAT. 1798]]

                security-based swap data repository or the Commission by 
                a date that is not later than--
                          ``(i) 30 days after issuance of the interim 
                      final rule; or
                          ``(ii) such other period as the Commission 
                      determines to be appropriate.
                    ``(B) Commission rulemaking.--The Commission shall 
                promulgate an interim final rule within 90 days of the 
                date of enactment of this section providing for the 
                reporting of each security-based swap entered into 
                before the date of enactment as referenced in 
                subparagraph (A).
                    ``(C) Effective date.--The reporting provisions 
                described in this section shall be effective upon the 
                date of the enactment of this section.
            ``(3) Reporting obligations.--
                    ``(A) Security-based swaps in which only 1 
                counterparty is a security-based swap dealer or major 
                security-based swap participant.--With respect to a 
                security-based swap in which only 1 counterparty is a 
                security-based swap dealer or major security-based swap 
                participant, the security-based swap dealer or major 
                security-based swap participant shall report the 
                security-based swap as required under paragraphs (1) and 
                (2).
                    ``(B) Security-based swaps in which 1 counterparty 
                is a security-based swap dealer and the other a major 
                security-based swap participant.--With respect to a 
                security-based swap in which 1 counterparty is a 
                security-based swap dealer and the other a major 
                security-based swap participant, the security-based swap 
                dealer shall report the security-based swap as required 
                under paragraphs (1) and (2).
                    ``(C) Other security-based swaps.--With respect to 
                any other security-based swap not described in 
                subparagraph (A) or (B), the counterparties to the 
                security-based swap shall select a counterparty to 
                report the security-based swap as required under 
                paragraphs (1) and (2).

    ``(b) Duties of Certain Individuals.--Any individual or entity that 
enters into a security-based swap shall meet each requirement described 
in subsection (c) if the individual or entity did not--
            ``(1) clear the security-based swap in accordance with 
        section 3C(a)(1); or
            ``(2) have the data regarding the security-based swap 
        accepted by a security-based swap data repository in accordance 
        with rules (including timeframes) adopted by the Commission 
        under this title.

    ``(c) Requirements.--An individual or entity described in subsection 
(b) shall--
            ``(1) upon written request from the Commission, provide 
        reports regarding the security-based swaps held by the 
        individual or entity to the Commission in such form and in such 
        manner as the Commission may request; and
            ``(2) maintain books and records pertaining to the security-
        based swaps held by the individual or entity in such form, in 
        such manner, and for such period as the Commission may require, 
        which shall be open to inspection by--
                    ``(A) any representative of the Commission;
                    ``(B) an appropriate prudential regulator;

[[Page 124 STAT. 1799]]

                    ``(C) the Commodity Futures Trading Commission;
                    ``(D) the Financial Stability Oversight Council; and
                    ``(E) the Department of Justice.

    ``(d) Identical Data.--In prescribing rules under this section, the 
Commission shall require individuals and entities described in 
subsection (b) to submit to the Commission a report that contains data 
that is not less comprehensive than the data required to be collected by 
security-based swap data repositories under this title.''.
    (b) Beneficial Ownership Reporting.--Section 13 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1), by inserting ``or otherwise 
        becomes or is deemed to become a beneficial owner of any of the 
        foregoing upon the purchase or sale of a security-based swap 
        that the Commission may define by rule, and'' after ``Alaska 
        Native Claims Settlement Act,''; and
            (2) in subsection (g)(1), by inserting ``or otherwise 
        becomes or is deemed to become a beneficial owner of any 
        security of a class described in subsection (d)(1) upon the 
        purchase or sale of a security-based swap that the Commission 
        may define by rule'' after ``subsection (d)(1) of this 
        section''.

    (c) Reports by Institutional Investment Managers.--Section 13(f)(1) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m(f)(1)) is amended 
by inserting ``or otherwise becomes or is deemed to become a beneficial 
owner of any security of a class described in subsection (d)(1) upon the 
purchase or sale of a security-based swap that the Commission may define 
by rule,'' after ``subsection (d)(1) of this section''.
    (d) Administrative Proceeding Authority.--Section 15(b)(4) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(b)(4)) is amended--
            (1) in subparagraph (C), by inserting ``security-based swap 
        dealer, major security-based swap participant,'' after 
        ``government securities dealer,''; and
            (2) in subparagraph (F), by striking ``broker or dealer'' 
        and inserting ``broker, dealer, security-based swap dealer, or a 
        major security-based swap participant''.

    (e) Security-based Swap Beneficial Ownership.--Section 13 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m) is amended by adding at 
the end the following:
    ``(o) Beneficial Ownership.--For purposes of this section and 
section 16, a person shall be deemed to acquire beneficial ownership of 
an equity security based on the purchase or sale of a security-based 
swap, only to the extent that the Commission, by rule, determines after 
consultation with the prudential regulators and the Secretary of the 
Treasury, that the purchase or sale of the security-based swap, or class 
of security-based swap, provides incidents of ownership comparable to 
direct ownership of the equity security, and that it is necessary to 
achieve the purposes of this section that the purchase or sale of the 
security-based swaps, or class of security-based swap, be deemed the 
acquisition of beneficial ownership of the equity security.''.
SEC. 767. STATE GAMING AND BUCKET SHOP LAWS.

    Section 28(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78bb(a)) is amended to read as follows:
    ``(a) Limitation on Judgments.--

[[Page 124 STAT. 1800]]

            ``(1) In general.--No person permitted to maintain a suit 
        for damages under the provisions of this title shall recover, 
        through satisfaction of judgment in 1 or more actions, a total 
        amount in excess of the actual damages to that person on account 
        of the act complained of. Except as otherwise specifically 
        provided in this title, nothing in this title shall affect the 
        jurisdiction of the securities commission (or any agency or 
        officer performing like functions) of any State over any 
        security or any person insofar as it does not conflict with the 
        provisions of this title or the rules and regulations under this 
        title.
            ``(2) Rule of construction.--Except as provided in 
        subsection (f), the rights and remedies provided by this title 
        shall be in addition to any and all other rights and remedies 
        that may exist at law or in equity.
            ``(3) State bucket shop laws.--No State law which prohibits 
        or regulates the making or promoting of wagering or gaming 
        contracts, or the operation of `bucket shops' or other similar 
        or related activities, shall invalidate--
                    ``(A) any put, call, straddle, option, privilege, or 
                other security subject to this title (except any 
                security that has a pari-mutuel payout or otherwise is 
                determined by the Commission, acting by rule, 
                regulation, or order, to be appropriately subject to 
                such laws), or apply to any activity which is incidental 
                or related to the offer, purchase, sale, exercise, 
                settlement, or closeout of any such security;
                    ``(B) any security-based swap between eligible 
                contract participants; or
                    ``(C) any security-based swap effected on a national 
                securities exchange registered pursuant to section 6(b).
            ``(4) Other state provisions.--No provision of State law 
        regarding the offer, sale, or distribution of securities shall 
        apply to any transaction in a security-based swap or a security 
        futures product, except that this paragraph may not be construed 
        as limiting any State antifraud law of general applicability. A 
        security-based swap may not be regulated as an insurance 
        contract under any provision of State law.''.
SEC. 768. AMENDMENTS TO THE SECURITIES ACT OF 1933; TREATMENT OF 
                        SECURITY-BASED SWAPS.

    (a) Definitions.--Section 2(a) of the Securities Act of 1933 (15 
U.S.C. 77b(a)) is amended--
            (1) in paragraph (1), by inserting ``security-based swap,'' 
        after ``security future,'';
            (2) in paragraph (3), by adding at the end the following: 
        ``Any offer or sale of a security-based swap by or on behalf of 
        the issuer of the securities upon which such security-based swap 
        is based or is referenced, an affiliate of the issuer, or an 
        underwriter, shall constitute a contract for sale of, sale of, 
        offer for sale, or offer to sell such securities.''; and
            (3) by adding at the end the following:
            ``(17) The terms `swap' and `security-based swap' have the 
        same meanings as in section 1a of the Commodity Exchange Act (7 
        U.S.C. 1a).
            ``(18) The terms `purchase' or `sale' of a security-based 
        swap shall be deemed to mean the execution, termination (prior 
        to its scheduled maturity date), assignment, exchange, or

[[Page 124 STAT. 1801]]

        similar transfer or conveyance of, or extinguishing of rights or 
        obligations under, a security-based swap, as the context may 
        require.''.

    (b) Registration of Security-based Swaps.--Section 5 of the 
Securities Act of 1933 (15 U.S.C. 77e) is amended by adding at the end 
the following:
    ``(d) Notwithstanding the provisions of section 3 or 4, unless a 
registration statement meeting the requirements of section 10(a) is in 
effect as to a security-based swap, it shall be unlawful for any person, 
directly or indirectly, to make use of any means or instruments of 
transportation or communication in interstate commerce or of the mails 
to offer to sell, offer to buy or purchase or sell a security-based swap 
to any person who is not an eligible contract participant as defined in 
section 1a(18) of the Commodity Exchange Act (7 U.S.C. 1a(18)).''.
SEC. 769. DEFINITIONS UNDER THE INVESTMENT COMPANY ACT OF 1940.

    Section 2(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-2) 
is amended by adding at the end the following:
            ``(54) The terms `commodity pool', `commodity pool 
        operator', `commodity trading advisor', `major swap 
        participant', `swap', `swap dealer', and `swap execution 
        facility' have the same meanings as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).''.
SEC. 770. DEFINITIONS UNDER THE INVESTMENT ADVISERS ACT OF 1940.

    Section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-2) is amended by adding at the end the following:
            ``(29) The terms `commodity pool', `commodity pool 
        operator', `commodity trading advisor', `major swap 
        participant', `swap', `swap dealer', and `swap execution 
        facility' have the same meanings as in section 1a of the 
        Commodity Exchange Act (7 U.S.C. 1a).''.
SEC. 771. <<NOTE: 15 USC 8344.>>  OTHER AUTHORITY.

    Unless otherwise provided by its terms, this subtitle does not 
divest any appropriate Federal banking agency, the Securities and 
Exchange Commission, the Commodity Futures Trading Commission, or any 
other Federal or State agency, of any authority derived from any other 
provision of applicable law.
SEC. 772. JURISDICTION.

    (a) In General.--Section 36 of the Securities Exchange Act of 1934 
(15 U.S.C. 78mm) is amended by adding at the end the following:
    ``(c) Derivatives.--Unless the Commission is expressly authorized by 
any provision described in this subsection to grant exemptions, the 
Commission shall not grant exemptions, with respect to amendments made 
by subtitle B of the Wall Street Transparency and Accountability Act of 
2010, with respect to paragraphs (65), (66), (68), (69), (70), (71), 
(72), (73), (74), (75), (76), and (79) of section 3(a), and sections 
10B(a), 10B(b), 10B(c), 13A, 15F, 17A(g), 17A(h), 17A(i), 17A(j), 
17A(k), and 17A(l); provided that the Commission shall have exemptive 
authority under this title with respect to security-based swaps as to 
the same matters that the Commodity

[[Page 124 STAT. 1802]]

Futures Trading Commission has under the Wall Street Transparency and 
Accountability Act of 2010 with respect to swaps, including under 
section 4(c) of the Commodity Exchange Act.''.
    (b) Rule of Construction.--Section 30 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78dd) is amended by adding at the end the following:
    ``(c) Rule of Construction.--No provision of this title that was 
added by the Wall Street Transparency and Accountability Act of 2010, or 
any rule or regulation thereunder, shall apply to any person insofar as 
such person transacts a business in security-based swaps without the 
jurisdiction of the United States, unless such person transacts such 
business in contravention of such rules and regulations as the 
Commission may prescribe as necessary or appropriate to prevent the 
evasion of any provision of this title that was added by the Wall Street 
Transparency and Accountability Act of 2010. This subsection shall not 
be construed to limit the jurisdiction of the Commission under any 
provision of this title, as in effect prior to the date of enactment of 
the Wall Street Transparency and Accountability Act of 2010.''.
SEC. 773. CIVIL PENALTIES.

    Section 21B of the Securities Exchange Act of 1934 <<NOTE: 15 USC 
78u-2.>>  (15 U.S.C. 78p-2) is amended by adding at the end the 
following:

    ``(f) Security-based Swaps.--
            ``(1) Clearing agency.--Any clearing agency that knowingly 
        or recklessly evades or participates in or facilitates an 
        evasion of the requirements of section 3C shall be liable for a 
        civil money penalty in twice the amount otherwise available for 
        a violation of section 3C.
            ``(2) Security-based swap dealer or major security-based 
        swap participant.--Any security-based swap dealer or major 
        security-based swap participant that knowingly or recklessly 
        evades or participates in or facilitates an evasion of the 
        requirements of section 3C shall be liable for a civil money 
        penalty in twice the amount otherwise available for a violation 
        of section 3C.''.
SEC. 774. <<NOTE: 15 USC 77b note.>>  EFFECTIVE DATE.

    Unless otherwise provided, the provisions of this subtitle shall 
take effect on the later of 360 days after the date of the enactment of 
this subtitle or, to the extent a provision of this subtitle requires a 
rulemaking, not less than 60 days after publication of the final rule or 
regulation implementing such provision of this subtitle.

   TITLE <<NOTE: Payment, Clearing, and Settlement Supervision Act of 
2010.>>  VIII--PAYMENT, CLEARING, AND SETTLEMENT SUPERVISION
SEC. 801. <<NOTE: 12 USC 5301 note.>>  SHORT TITLE.

    This title may be cited as the ``Payment, Clearing, and Settlement 
Supervision Act of 2010''.
SEC. 802. <<NOTE: 12 USC 5461.>>  FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) The proper functioning of the financial markets is 
        dependent upon safe and efficient arrangements for the clearing

[[Page 124 STAT. 1803]]

        and settlement of payment, securities, and other financial 
        transactions.
            (2) Financial market utilities that conduct or support 
        multilateral payment, clearing, or settlement activities may 
        reduce risks for their participants and the broader financial 
        system, but such utilities may also concentrate and create new 
        risks and thus must be well designed and operated in a safe and 
        sound manner.
            (3) Payment, clearing, and settlement activities conducted 
        by financial institutions also present important risks to the 
        participating financial institutions and to the financial 
        system.
            (4) Enhancements to the regulation and supervision of 
        systemically important financial market utilities and the 
        conduct of systemically important payment, clearing, and 
        settlement activities by financial institutions are necessary--
                    (A) to provide consistency;
                    (B) to promote robust risk management and safety and 
                soundness;
                    (C) to reduce systemic risks; and
                    (D) to support the stability of the broader 
                financial system.

    (b) Purpose.--The purpose of this title is to mitigate systemic risk 
in the financial system and promote financial stability by--
            (1) authorizing the Board of Governors to promote uniform 
        standards for the--
                    (A) management of risks by systemically important 
                financial market utilities; and
                    (B) conduct of systemically important payment, 
                clearing, and settlement activities by financial 
                institutions;
            (2) providing the Board of Governors an enhanced role in the 
        supervision of risk management standards for systemically 
        important financial market utilities;
            (3) strengthening the liquidity of systemically important 
        financial market utilities; and
            (4) providing the Board of Governors an enhanced role in the 
        supervision of risk management standards for systemically 
        important payment, clearing, and settlement activities by 
        financial institutions.
SEC. 803. <<NOTE: 12 USC 5462.>>  DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Appropriate financial regulator.--The term ``appropriate 
        financial regulator'' means--
                    (A) the primary financial regulatory agency, as 
                defined in section 2 of this Act;
                    (B) the National Credit Union Administration, with 
                respect to any insured credit union under the Federal 
                Credit Union Act (12 U.S.C. 1751 et seq.); and
                    (C) the Board of Governors, with respect to 
                organizations operating under section 25A of the Federal 
                Reserve Act (12 U.S.C. 611), and any other financial 
                institution engaged in a designated activity.
            (2) Designated activity.--The term ``designated activity'' 
        means a payment, clearing, or settlement activity that the 
        Council has designated as systemically important under section 
        804.

[[Page 124 STAT. 1804]]

            (3) Designated clearing entity.--The term ``designated 
        clearing entity'' means a designated financial market utility 
        that is a derivatives clearing organization registered under 
        section 5b of the Commodity Exchange Act (7 U.S.C. 7a-1) or a 
        clearing agency registered with the Securities and Exchange 
        Commission under section 17A of the Securities Exchange Act of 
        1934 (15 U.S.C. 78q-1).
            (4) Designated financial market utility.--The term 
        ``designated financial market utility'' means a financial market 
        utility that the Council has designated as systemically 
        important under section 804.
            (5) Financial institution.--
                    (A) In general.--The term ``financial institution'' 
                means--
                          (i) a depository institution, as defined in 
                      section 3 of the Federal Deposit Insurance Act (12 
                      U.S.C. 1813);
                          (ii) a branch or agency of a foreign bank, as 
                      defined in section 1(b) of the International 
                      Banking Act of 1978 (12 U.S.C. 3101);
                          (iii) an organization operating under section 
                      25 or 25A of the Federal Reserve Act (12 U.S.C. 
                      601-604a and 611 through 631);
                          (iv) a credit union, as defined in section 101 
                      of the Federal Credit Union Act (12 U.S.C. 1752);
                          (v) a broker or dealer, as defined in section 
                      3 of the Securities Exchange Act of 1934 (15 
                      U.S.C. 78c);
                          (vi) an investment company, as defined in 
                      section 3 of the Investment Company Act of 1940 
                      (15 U.S.C. 80a-3);
                          (vii) an insurance company, as defined in 
                      section 2 of the Investment Company Act of 1940 
                      (15 U.S.C. 80a-2);
                          (viii) an investment adviser, as defined in 
                      section 202 of the Investment Advisers Act of 1940 
                      (15 U.S.C. 80b-2);
                          (ix) a futures commission merchant, commodity 
                      trading advisor, or commodity pool operator, as 
                      defined in section 1a of the Commodity Exchange 
                      Act (7 U.S.C. 1a); and
                          (x) any company engaged in activities that are 
                      financial in nature or incidental to a financial 
                      activity, as described in section 4 of the Bank 
                      Holding Company Act of 1956 (12 U.S.C. 1843(k)).
                    (B) Exclusions.--The term ``financial institution'' 
                does not include designated contract markets, registered 
                futures associations, swap data repositories, and swap 
                execution facilities registered under the Commodity 
                Exchange Act (7 U.S.C. 1 et seq.), or national 
                securities exchanges, national securities associations, 
                alternative trading systems, securities information 
                processors solely with respect to the activities of the 
                entity as a securities information processor, security-
                based swap data repositories, and swap execution 
                facilities registered under the Securities Exchange Act 
                of 1934 (15 U.S.C. 78a et seq.), or designated clearing 
                entities, provided that the exclusions in this

[[Page 124 STAT. 1805]]

                subparagraph apply only with respect to the activities 
                that require the entity to be so registered.
            (6) Financial market utility.--
                    (A) Inclusion.--The term ``financial market 
                utility'' means any person that manages or operates a 
                multilateral system for the purpose of transferring, 
                clearing, or settling payments, securities, or other 
                financial transactions among financial institutions or 
                between financial institutions and the person.
                    (B) Exclusions.--The term ``financial market 
                utility'' does not include--
                          (i) <<NOTE: Applicability.>>  designated 
                      contract markets, registered futures associations, 
                      swap data repositories, and swap execution 
                      facilities registered under the Commodity Exchange 
                      Act (7 U.S.C. 1 et seq.), or national securities 
                      exchanges, national securities associations, 
                      alternative trading systems, security-based swap 
                      data repositories, and swap execution facilities 
                      registered under the Securities Exchange Act of 
                      1934 (15 U.S.C. 78a et seq.), solely by reason of 
                      their providing facilities for comparison of data 
                      respecting the terms of settlement of securities 
                      or futures transactions effected on such exchange 
                      or by means of any electronic system operated or 
                      controlled by such entities, provided that the 
                      exclusions in this clause apply only with respect 
                      to the activities that require the entity to be so 
                      registered; and
                          (ii) any broker, dealer, transfer agent, or 
                      investment company, or any futures commission 
                      merchant, introducing broker, commodity trading 
                      advisor, or commodity pool operator, solely by 
                      reason of functions performed by such institution 
                      as part of brokerage, dealing, transfer agency, or 
                      investment company activities, or solely by reason 
                      of acting on behalf of a financial market utility 
                      or a participant therein in connection with the 
                      furnishing by the financial market utility of 
                      services to its participants or the use of 
                      services of the financial market utility by its 
                      participants, provided that services performed by 
                      such institution do not constitute critical risk 
                      management or processing functions of the 
                      financial market utility.
            (7) Payment, clearing, or settlement activity.--
                    (A) In general.--The term ``payment, clearing, or 
                settlement activity'' means an activity carried out by 1 
                or more financial institutions to facilitate the 
                completion of financial transactions, but shall not 
                include any offer or sale of a security under the 
                Securities Act of 1933 (15 U.S.C. 77a et seq.), or any 
                quotation, order entry, negotiation, or other pre-trade 
                activity or execution activity.
                    (B) Financial transaction.--For the purposes of 
                subparagraph (A), the term ``financial transaction'' 
                includes--
                          (i) funds transfers;
                          (ii) securities contracts;
                          (iii) contracts of sale of a commodity for 
                      future delivery;
                          (iv) forward contracts;
                          (v) repurchase agreements;

[[Page 124 STAT. 1806]]

                          (vi) swaps;
                          (vii) security-based swaps;
                          (viii) swap agreements;
                          (ix) security-based swap agreements;
                          (x) foreign exchange contracts;
                          (xi) financial derivatives contracts; and
                          (xii) any similar transaction that the Council 
                      determines to be a financial transaction for 
                      purposes of this title.
                    (C) Included activities.--When conducted with 
                respect to a financial transaction, payment, clearing, 
                and settlement activities may include--
                          (i) the calculation and communication of 
                      unsettled financial transactions between 
                      counterparties;
                          (ii) the netting of transactions;
                          (iii) provision and maintenance of trade, 
                      contract, or instrument information;
                          (iv) the management of risks and activities 
                      associated with continuing financial transactions;
                          (v) transmittal and storage of payment 
                      instructions;
                          (vi) the movement of funds;
                          (vii) the final settlement of financial 
                      transactions; and
                          (viii) other similar functions that the 
                      Council may determine.
                    (D) Exclusion.--Payment, clearing, and settlement 
                activities shall not include public reporting of swap 
                transaction data under section 727 or 763(i) of the Wall 
                Street Transparency and Accountability Act of 2010.
            (8) Supervisory agency.--
                    (A) In general.--The term ``Supervisory Agency'' 
                means the Federal agency that has primary jurisdiction 
                over a designated financial market utility under Federal 
                banking, securities, or commodity futures laws, as 
                follows:
                          (i) The Securities and Exchange Commission, 
                      with respect to a designated financial market 
                      utility that is a clearing agency registered with 
                      the Securities and Exchange Commission.
                          (ii) The Commodity Futures Trading Commission, 
                      with respect to a designated financial market 
                      utility that is a derivatives clearing 
                      organization registered with the Commodity Futures 
                      Trading Commission.
                          (iii) The appropriate Federal banking agency, 
                      with respect to a designated financial market 
                      utility that is an institution described in 
                      section 3(q) of the Federal Deposit Insurance Act.
                          (iv) The Board of Governors, with respect to a 
                      designated financial market utility that is 
                      otherwise not subject to the jurisdiction of any 
                      agency listed in clauses (i), (ii), and (iii).
                    (B) Multiple agency jurisdiction.--If a designated 
                financial market utility is subject to the 
                jurisdictional supervision of more than 1 agency listed 
                in subparagraph (A), then such agencies should agree on 
                1 agency to act as the Supervisory Agency, and if such 
                agencies cannot agree on which agency has primary 
                jurisdiction, the Council

[[Page 124 STAT. 1807]]

                shall decide which agency is the Supervisory Agency for 
                purposes of this title.
            (9) Systemically important and systemic importance.--The 
        terms ``systemically important'' and ``systemic importance'' 
        mean a situation where the failure of or a disruption to the 
        functioning of a financial market utility or the conduct of a 
        payment, clearing, or settlement activity could create, or 
        increase, the risk of significant liquidity or credit problems 
        spreading among financial institutions or markets and thereby 
        threaten the stability of the financial system of the United 
        States.
SEC. 804. <<NOTE: 12 USC 5463.>>  DESIGNATION OF SYSTEMIC 
                        IMPORTANCE.

    (a) Designation.--
            (1) Financial stability oversight council.--The Council, on 
        a nondelegable basis and by a vote of not fewer than \2/3\ of 
        members then serving, including an affirmative vote by the 
        Chairperson of the Council, shall designate those financial 
        market utilities or payment, clearing, or settlement activities 
        that the Council determines are, or are likely to become, 
        systemically important.
            (2) Considerations.--In determining whether a financial 
        market utility or payment, clearing, or settlement activity is, 
        or is likely to become, systemically important, the Council 
        shall take into consideration the following:
                    (A) The aggregate monetary value of transactions 
                processed by the financial market utility or carried out 
                through the payment, clearing, or settlement activity.
                    (B) The aggregate exposure of the financial market 
                utility or a financial institution engaged in payment, 
                clearing, or settlement activities to its 
                counterparties.
                    (C) The relationship, interdependencies, or other 
                interactions of the financial market utility or payment, 
                clearing, or settlement activity with other financial 
                market utilities or payment, clearing, or settlement 
                activities.
                    (D) The effect that the failure of or a disruption 
                to the financial market utility or payment, clearing, or 
                settlement activity would have on critical markets, 
                financial institutions, or the broader financial system.
                    (E) Any other factors that the Council deems 
                appropriate.

    (b) Rescission of Designation.--
            (1) In general.--The Council, on a nondelegable basis and by 
        a vote of not fewer than \2/3\ of members then serving, 
        including an affirmative vote by the Chairperson of the Council, 
        shall rescind a designation of systemic importance for a 
        designated financial market utility or designated activity if 
        the Council determines that the utility or activity no longer 
        meets the standards for systemic importance.
            (2) Effect of rescission.--Upon rescission, the financial 
        market utility or financial institutions conducting the activity 
        will no longer be subject to the provisions of this title or any 
        rules or orders prescribed under this title.

    (c) Consultation and Notice and Opportunity for Hearing.--

[[Page 124 STAT. 1808]]

            (1) Consultation.--Before making any determination under 
        subsection (a) or (b), the Council shall consult with the 
        relevant Supervisory Agency and the Board of Governors.
            (2) Advance notice and opportunity for hearing.--
                    (A) In general.--Before making any determination 
                under subsection (a) or (b), the Council shall provide 
                the financial market utility or, in the case of a 
                payment, clearing, or settlement activity, financial 
                institutions with advance notice of the proposed 
                determination of the Council.
                    (B) Notice in federal register.--The Council shall 
                provide such advance notice to financial institutions by 
                publishing a notice in the Federal Register.
                    (C) <<NOTE: Deadline.>>  Requests for hearing.--
                Within 30 days from the date of any notice of the 
                proposed determination of the Council, the financial 
                market utility or, in the case of a payment, clearing, 
                or settlement activity, a financial institution engaged 
                in the designated activity may request, in writing, an 
                opportunity for a written or oral hearing before the 
                Council to demonstrate that the proposed designation or 
                rescission of designation is not supported by 
                substantial evidence.
                    (D) <<NOTE: Deadline.>>  Written submissions.--Upon 
                receipt of a timely request, the Council shall fix a 
                time, not more than 30 days after receipt of the 
                request, unless extended at the request of the financial 
                market utility or financial institution, and place at 
                which the financial market utility or financial 
                institution may appear, personally or through counsel, 
                to submit written materials, or, at the sole discretion 
                of the Council, oral testimony or oral argument.
            (3) Emergency exception.--
                    (A) Waiver or modification by vote of the council.--
                The Council may waive or modify the requirements of 
                paragraph (2) if the Council determines, by an 
                affirmative vote of not fewer than \2/3\ of members then 
                serving, including an affirmative vote by the 
                Chairperson of the Council, that the waiver or 
                modification is necessary to prevent or mitigate an 
                immediate threat to the financial system posed by the 
                financial market utility or the payment, clearing, or 
                settlement activity.
                    (B) <<NOTE: Deadlines.>>  Notice of waiver or 
                modification.--The Council shall provide notice of the 
                waiver or modification to the financial market utility 
                concerned or, in the case of a payment, clearing, or 
                settlement activity, to financial institutions, as soon 
                as practicable, which shall be no later than 24 hours 
                after the waiver or modification in the case of a 
                financial market utility and 3 business days in the case 
                of financial institutions. <<NOTE: Web posting. Federal 
                Register, publication.>> The Council shall provide the 
                notice to financial institutions by posting a notice on 
                the website of the Council and by publishing a notice in 
                the Federal Register.

    (d) <<NOTE: Deadlines.>>  Notification of Final Determination.--
            (1) After hearing.--Within 60 days of any hearing under 
        subsection (c)(2), the Council shall notify the financial market 
        utility or financial institutions of the final determination of 
        the Council in writing, which shall include findings of fact 
        upon which the determination of the Council is based.

[[Page 124 STAT. 1809]]

            (2) When no hearing requested.--If the Council does not 
        receive a timely request for a hearing under subsection (c)(2), 
        the Council shall notify the financial market utility or 
        financial institutions of the final determination of the Council 
        in writing not later than 30 days after the expiration of the 
        date by which a financial market utility or a financial 
        institution could have requested a hearing. <<NOTE: Federal 
        Register, publication.>> All notices to financial institutions 
        under this subsection shall be published in the Federal 
        Register.

    (e) Extension of Time Periods.--The Council may extend the time 
periods established in subsections (c) and (d) as the Council determines 
to be necessary or appropriate.
SEC. 805. <<NOTE: 12 USC 5464.>>  STANDARDS FOR SYSTEMICALLY 
                        IMPORTANT FINANCIAL MARKET UTILITIES AND 
                        PAYMENT, CLEARING, OR SETTLEMENT 
                        ACTIVITIES.

    (a) Authority to Prescribe Standards.--
            (1) Board of governors.--Except as provided in paragraph 
        (2), the Board of Governors, by rule or order, and in 
        consultation with the Council and the Supervisory Agencies, 
        shall prescribe risk management standards, taking into 
        consideration relevant international standards and existing 
        prudential requirements, governing--
                    (A) the operations related to the payment, clearing, 
                and settlement activities of designated financial market 
                utilities; and
                    (B) the conduct of designated activities by 
                financial institutions.
            (2) Special procedures for designated clearing entities and 
        designated activities of certain financial institutions.--
                    (A) CFTC and commission.--The Commodity Futures 
                Trading Commission and the Commission may each prescribe 
                regulations, in consultation with the Council and the 
                Board of Governors, containing risk management 
                standards, taking into consideration relevant 
                international standards and existing prudential 
                requirements, for those designated clearing entities and 
                financial institutions engaged in designated activities 
                for which each is the Supervisory Agency or the 
                appropriate financial regulator, governing--
                          (i) the operations related to payment, 
                      clearing, and settlement activities of such 
                      designated clearing entities; and
                          (ii) the conduct of designated activities by 
                      such financial institutions.
                    (B) Review and determination.--The Board of 
                Governors may determine that existing prudential 
                requirements of the Commodity Futures Trading 
                Commission, the Commission, or both (including 
                requirements prescribed pursuant to subparagraph (A)) 
                with respect to designated clearing entities and 
                financial institutions engaged in designated activities 
                for which the Commission or the Commodity Futures 
                Trading Commission is the Supervisory Agency or the 
                appropriate financial regulator are insufficient to 
                prevent or mitigate significant liquidity, credit,

[[Page 124 STAT. 1810]]

                operational, or other risks to the financial markets or 
                to the financial stability of the United States.
                    (C) Written determination.--Any determination by the 
                Board of Governors under subparagraph (B) shall be 
                provided in writing to the Commodity Futures Trading 
                Commission or the Commission, as applicable, and the 
                Council, and shall explain why existing prudential 
                requirements, considered as a whole, are insufficient to 
                ensure that the operations and activities of the 
                designated clearing entities or the activities of 
                financial institutions described in subparagraph (B) 
                will not pose significant liquidity, credit, 
                operational, or other risks to the financial markets or 
                to the financial stability of the United States. The 
                Board of Governors' determination shall contain a 
                detailed analysis supporting its findings and identify 
                the specific prudential requirements that are 
                insufficient.
                    (D) <<NOTE: Deadline.>>  CFTC and commission 
                response.--The Commodity Futures Trading Commission or 
                the Commission, as applicable, shall within 60 days 
                either object to the Board of Governors' determination 
                with a detailed analysis as to why existing prudential 
                requirements are sufficient, or submit an explanation to 
                the Council and the Board of Governors describing the 
                actions to be taken in response to the Board of 
                Governors' determination.
                    (E) Authorization.--Upon an affirmative vote by not 
                fewer than 2/3 of members then serving on the Council, 
                the Council shall either find that the response 
                submitted under subparagraph (D) is sufficient, or 
                require the Commodity Futures Trading Commission, or the 
                Commission, as applicable, to prescribe such risk 
                management standards as the Council determines is 
                necessary to address the specific prudential 
                requirements that are determined to be insufficient.''

    (b) Objectives and Principles.--The objectives and principles for 
the risk management standards prescribed under subsection (a) shall be 
to--
            (1) promote robust risk management;
            (2) promote safety and soundness;
            (3) reduce systemic risks; and
            (4) support the stability of the broader financial system.

    (c) Scope.--The standards prescribed under subsection (a) may 
address areas such as--
            (1) risk management policies and procedures;
            (2) margin and collateral requirements;
            (3) participant or counterparty default policies and 
        procedures;
            (4) the ability to complete timely clearing and settlement 
        of financial transactions;
            (5) capital and financial resource requirements for 
        designated financial market utilities; and
            (6) other areas that are necessary to achieve the objectives 
        and principles in subsection (b).

    (d) Limitation on Scope.--Except as provided in subsections (e) and 
(f) of section 807, nothing in this title shall be construed to permit 
the Council or the Board of Governors to take any action or exercise any 
authority granted to the Commodity Futures Trading Commission under 
section 2(h) of the Commodity Exchange

[[Page 124 STAT. 1811]]

Act or the Securities and Exchange Commission under section 3C(a) of the 
Securities Exchange Act of 1934, including--
            (1) the approval of, disapproval of, or stay of the clearing 
        requirement for any group, category, type, or class of swaps 
        that a designated clearing entity may accept for clearing;
            (2) the determination that any group, category, type, or 
        class of swaps shall be subject to the mandatory clearing 
        requirement of section 2(h)(1) of the Commodity Exchange Act or 
        section 3C(a)(1) of the Securities Exchange Act of 1934;
            (3) the determination that any person is exempt from the 
        mandatory clearing requirement of section 2(h)(1) of the 
        Commodity Exchange Act or section 3C(a)(1) of the Securities 
        Exchange Act of 1934; or
            (4) any authority granted to the Commodity Futures Trading 
        Commission or the Securities and Exchange Commission with 
        respect to transaction reporting or trade execution.

    (e) Threshold Level.--The standards prescribed under subsection (a) 
governing the conduct of designated activities by financial institutions 
shall, where appropriate, establish a threshold as to the level or 
significance of engagement in the activity at which a financial 
institution will become subject to the standards with respect to that 
activity.
    (f) Compliance Required.--Designated financial market utilities and 
financial institutions subject to the standards prescribed under 
subsection (a) for a designated activity shall conduct their operations 
in compliance with the applicable risk management standards.
SEC. 806. <<NOTE: 12 USC 5465.>>  OPERATIONS OF DESIGNATED 
                        FINANCIAL MARKET UTILITIES.

    (a) Federal Reserve Account and Services.--The Board of Governors 
may authorize a Federal Reserve Bank to establish and maintain an 
account for a designated financial market utility and provide the 
services listed in section 11A(b) of the Federal Reserve Act (12 U.S.C. 
248a(b)) and deposit accounts under the first undesignated paragraph of 
section 13 of the Federal Reserve Act (12 U.S.C. 342) to the designated 
financial market utility that the Federal Reserve Bank is authorized 
under the Federal Reserve Act to provide to a depository institution, 
subject to any applicable rules, orders, standards, or guidelines 
prescribed by the Board of Governors.
    (b) Advances.--The Board of Governors may authorize a Federal 
Reserve bank under section 10B of the Federal Reserve Act (12 U.S.C. 
347b) to provide to a designated financial market utility discount and 
borrowing privileges only in unusual or exigent circumstances, upon the 
affirmative vote of a majority of the Board of Governors then serving 
(or such other number in accordance with the provisions of section 
11(r)(2) of the Federal Reserve Act (12 U.S.C. 248(r)(2)) after 
consultation with the Secretary, and upon a showing by the designated 
financial market utility that it is unable to secure adequate credit 
accommodations from other banking institutions. All such discounts and 
borrowing privileges shall be subject to such other limitations, 
restrictions, and regulations as the Board of Governors may prescribe. 
Access to discount and borrowing privileges under section 10B of the 
Federal Reserve Act as authorized in this section does not require a 
designated

[[Page 124 STAT. 1812]]

financial market utility to be or become a bank or bank holding company.
    (c) Earnings on Federal Reserve Balances.--A Federal Reserve Bank 
may pay earnings on balances maintained by or on behalf of a designated 
financial market utility in the same manner and to the same extent as 
the Federal Reserve Bank may pay earnings to a depository institution 
under the Federal Reserve Act, subject to any applicable rules, orders, 
standards, or guidelines prescribed by the Board of Governors.
    (d) Reserve Requirements.--The Board of Governors may exempt a 
designated financial market utility from, or modify any, reserve 
requirements under section 19 of the Federal Reserve Act (12 U.S.C. 461) 
applicable to a designated financial market utility.
    (e) Changes to Rules, Procedures, or Operations.--
            (1) Advance notice.--
                    (A) Advance notice of proposed changes required.--A 
                designated financial market utility shall provide notice 
                60 days in advance notice to its Supervisory Agency of 
                any proposed change to its rules, procedures, or 
                operations that could, as defined in rules of each 
                Supervisory Agency, materially affect, the nature or 
                level of risks presented by the designated financial 
                market utility.
                    (B) Terms and standards prescribed by the 
                supervisory agencies.--Each Supervisory Agency, in 
                consultation with the Board of Governors, shall 
                prescribe regulations that define and describe the 
                standards for determining when notice is required to be 
                provided under subparagraph (A).
                    (C) Contents of notice.--The notice of a proposed 
                change shall describe--
                          (i) the nature of the change and expected 
                      effects on risks to the designated financial 
                      market utility, its participants, or the market; 
                      and
                          (ii) how the designated financial market 
                      utility plans to manage any identified risks.
                    (D) Additional information.--The Supervisory Agency 
                may require a designated financial market utility to 
                provide any information necessary to assess the effect 
                the proposed change would have on the nature or level of 
                risks associated with the designated financial market 
                utility's payment, clearing, or settlement activities 
                and the sufficiency of any proposed risk management 
                techniques.
                    (E) <<NOTE: Deadline.>>  Notice of objection.--The 
                Supervisory Agency shall notify the designated financial 
                market utility of any objection regarding the proposed 
                change within 60 days from the later of--
                          (i) the date that the notice of the proposed 
                      change is received; or
                          (ii) the date any further information 
                      requested for consideration of the notice is 
                      received.
                    (F) Change not allowed if objection.--A designated 
                financial market utility shall not implement a change to 
                which the Supervisory Agency has an objection.
                    (G) Change allowed if no objection within 60 days.--
                A designated financial market utility may implement a 
                change if it has not received an objection to the 
                proposed change within 60 days of the later of--

[[Page 124 STAT. 1813]]

                          (i) the date that the Supervisory Agency 
                      receives the notice of proposed change; or
                          (ii) the date the Supervisory Agency receives 
                      any further information it requests for 
                      consideration of the notice.
                    (H) Review extension for novel or complex issues.-- 
                <<NOTE: Time period.>> The Supervisory Agency may, 
                during the 60-day review period, extend the review 
                period for an additional 60 days for proposed changes 
                that raise novel or complex issues, subject to the 
                Supervisory Agency providing the designated financial 
                market utility with prompt written notice of the 
                extension. Any extension under this subparagraph will 
                extend the time periods under subparagraphs (E) and (G).
                    (I) Change allowed earlier if notified of no 
                objection.-- <<NOTE: Time period.>> A designated 
                financial market utility may implement a change in less 
                than 60 days from the date of receipt of the notice of 
                proposed change by the Supervisory Agency, or the date 
                the Supervisory Agency receives any further information 
                it requested, if the Supervisory Agency notifies the 
                designated financial market utility in writing that it 
                does not object to the proposed change and authorizes 
                the designated financial market utility to implement the 
                change on an earlier date, subject to any conditions 
                imposed by the Supervisory Agency.
            (2) Emergency changes.--
                    (A) In general.--A designated financial market 
                utility may implement a change that would otherwise 
                require advance notice under this subsection if it 
                determines that--
                          (i) an emergency exists; and
                          (ii) immediate implementation of the change is 
                      necessary for the designated financial market 
                      utility to continue to provide its services in a 
                      safe and sound manner.
                    (B) Notice required within 24 hours.--The designated 
                financial market utility shall provide notice of any 
                such emergency change to its Supervisory Agency, as soon 
                as practicable, which shall be no later than 24 hours 
                after implementation of the change.
                    (C) Contents of emergency notice.--In addition to 
                the information required for changes requiring advance 
                notice, the notice of an emergency change shall 
                describe--
                          (i) the nature of the emergency; and
                          (ii) the reason the change was necessary for 
                      the designated financial market utility to 
                      continue to provide its services in a safe and 
                      sound manner.
                    (D) Modification or rescission of change may be 
                required.--The Supervisory Agency may require 
                modification or rescission of the change if it finds 
                that the change is not consistent with the purposes of 
                this Act or any applicable rules, orders, or standards 
                prescribed under section 805(a).
            (3) Copying the board of governors.--The Supervisory Agency 
        shall provide the Board of Governors concurrently with a 
        complete copy of any notice, request, or other information it 
        issues, submits, or receives under this subsection.

[[Page 124 STAT. 1814]]

            (4) Consultation with board of governors.--Before taking any 
        action on, or completing its review of, a change proposed by a 
        designated financial market utility, the Supervisory Agency 
        shall consult with the Board of Governors.
SEC. 807. <<NOTE: 12 USC 5466.>>  EXAMINATION OF AND ENFORCEMENT 
                        ACTIONS AGAINST DESIGNATED FINANCIAL 
                        MARKET UTILITIES.

    (a) Examination.--Notwithstanding any other provision of law and 
subject to subsection (d), the Supervisory Agency shall conduct 
examinations of a designated financial market utility at least once 
annually in order to determine the following:
            (1) The nature of the operations of, and the risks borne by, 
        the designated financial market utility.
            (2) The financial and operational risks presented by the 
        designated financial market utility to financial institutions, 
        critical markets, or the broader financial system.
            (3) The resources and capabilities of the designated 
        financial market utility to monitor and control such risks.
            (4) The safety and soundness of the designated financial 
        market utility.
            (5) The designated financial market utility's compliance 
        with--
                    (A) this title; and
                    (B) the rules and orders prescribed under this 
                title.

    (b) Service Providers.--Whenever a service integral to the operation 
of a designated financial market utility is performed for the designated 
financial market utility by another entity, whether an affiliate or non-
affiliate and whether on or off the premises of the designated financial 
market utility, the Supervisory Agency may examine whether the provision 
of that service is in compliance with applicable law, rules, orders, and 
standards to the same extent as if the designated financial market 
utility were performing the service on its own premises.
    (c) Enforcement.--For purposes of enforcing the provisions of this 
title, a designated financial market utility shall be subject to, and 
the appropriate Supervisory Agency shall have authority under the 
provisions of subsections (b) through (n) of section 8 of the Federal 
Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the 
same extent as if the designated financial market utility was an insured 
depository institution and the Supervisory Agency was the appropriate 
Federal banking agency for such insured depository institution.
    (d) Board of Governors Involvement in Examinations.--
            (1) Board of governors consultation on examination 
        planning.-- <<NOTE: Deadline.>> The Supervisory Agency shall 
        consult annually with the Board of Governors regarding the scope 
        and methodology of any examination conducted under subsections 
        (a) and (b). The Supervisory Agency shall lead all examinations 
        conducted under subsections (a) and (b)
            (2) Board of governors participation in examination.--The 
        Board of Governors may, in its discretion, participate in any 
        examination led by a Supervisory Agency and conducted under 
        subsections (a) and (b).

    (e) Board of Governors Enforcement Recommendations.--
            (1) Recommendation.--The Board of Governors may, after 
        consulting with the Council and the Supervisory Agency, at any 
        time recommend to the Supervisory Agency that such

[[Page 124 STAT. 1815]]

        agency take enforcement action against a designated financial 
        market utility in order to prevent or mitigate significant 
        liquidity, credit, operational, or other risks to the financial 
        markets or to the financial stability of the United States. Any 
        such recommendation for enforcement action shall provide a 
        detailed analysis supporting the recommendation of the Board of 
        Governors.
            (2) <<NOTE: Deadline.>>  Consideration.--The Supervisory 
        Agency shall consider the recommendation of the Board of 
        Governors and submit a response to the Board of Governors within 
        60 days.
            (3) Binding arbitration.--If the Supervisory Agency rejects, 
        in whole or in part, the recommendation of the Board of 
        Governors, the Board of Governors may refer the recommendation 
        to the Council for a binding decision on whether an enforcement 
        action is warranted.
            (4) Enforcement action.--Upon an affirmative vote by a 
        majority of the Council in favor of the Board of Governors' 
        recommendation under paragraph (3), the Council may require the 
        Supervisory Agency to--
                    (A) exercise the enforcement authority referenced in 
                subsection (c); and
                    (B) take enforcement action against the designated 
                financial market utility.

    (f) Emergency Enforcement Actions by the Board of Governors.--
            (1) Imminent risk of substantial harm.--The Board of 
        Governors may, after consulting with the Supervisory Agency and 
        upon an affirmative vote by a majority the Council, take 
        enforcement action against a designated financial market utility 
        if the Board of Governors has reasonable cause to conclude 
        that--
                    (A) either--
                          (i) an action engaged in, or contemplated by, 
                      a designated financial market utility (including 
                      any change proposed by the designated financial 
                      market utility to its rules, procedures, or 
                      operations that would otherwise be subject to 
                      section 806(e)) poses an imminent risk of 
                      substantial harm to financial institutions, 
                      critical markets, or the broader financial system 
                      of the United States; or
                          (ii) the condition of a designated financial 
                      market utility poses an imminent risk of 
                      substantial harm to financial institutions, 
                      critical markets, or the broader financial system; 
                      and
                    (B) the imminent risk of substantial harm precludes 
                the Board of Governors' use of the procedures in 
                subsection (e).
            (2) Enforcement authority.--For purposes of taking 
        enforcement action under paragraph (1), a designated financial 
        market utility shall be subject to, and the Board of Governors 
        shall have authority under the provisions of subsections (b) 
        through (n) of section 8 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818) in the same manner and to the same extent as if 
        the designated financial market utility was an insured 
        depository institution and the Board of Governors was the 
        appropriate Federal banking agency for such insured depository 
        institution.

[[Page 124 STAT. 1816]]

SEC. 808. <<NOTE: 12 USC 5467.>>  EXAMINATION OF AND ENFORCEMENT 
                        ACTIONS AGAINST FINANCIAL INSTITUTIONS 
                        SUBJECT TO STANDARDS FOR DESIGNATED 
                        ACTIVITIES.

    (a) Examination.--The appropriate financial regulator is authorized 
to examine a financial institution subject to the standards prescribed 
under section 805(a) for a designated activity in order to determine the 
following:
            (1) The nature and scope of the designated activities 
        engaged in by the financial institution.
            (2) The financial and operational risks the designated 
        activities engaged in by the financial institution may pose to 
        the safety and soundness of the financial institution.
            (3) The financial and operational risks the designated 
        activities engaged in by the financial institution may pose to 
        other financial institutions, critical markets, or the broader 
        financial system.
            (4) The resources available to and the capabilities of the 
        financial institution to monitor and control the risks described 
        in paragraphs (2) and (3).
            (5) The financial institution's compliance with this title 
        and the rules and orders prescribed under section 805(a).

    (b) Enforcement.--For purposes of enforcing the provisions of this 
title, and the rules and orders prescribed under this section, a 
financial institution subject to the standards prescribed under section 
805(a) for a designated activity shall be subject to, and the 
appropriate financial regulator shall have authority under the 
provisions of subsections (b) through (n) of section 8 of the Federal 
Deposit Insurance Act (12 U.S.C. 1818) in the same manner and to the 
same extent as if the financial institution was an insured depository 
institution and the appropriate financial regulator was the appropriate 
Federal banking agency for such insured depository institution.
    (c) <<NOTE: Consultation.>>  Technical Assistance.--The Board of 
Governors shall consult with and provide such technical assistance as 
may be required by the appropriate financial regulators to ensure that 
the rules and orders prescribed under this title are interpreted and 
applied in as consistent and uniform a manner as practicable.

    (d) Delegation.--
            (1) Examination.--
                    (A) Request to board of governors.--The appropriate 
                financial regulator may request the Board of Governors 
                to conduct or participate in an examination of a 
                financial institution subject to the standards 
                prescribed under section 805(a) for a designated 
                activity in order to assess the compliance of such 
                financial institution with--
                          (i) this title; or
                          (ii) the rules or orders prescribed under this 
                      title.
                    (B) Examination by board of governors.--Upon receipt 
                of an appropriate written request, the Board of 
                Governors will conduct the examination under such terms 
                and conditions to which the Board of Governors and the 
                appropriate financial regulator mutually agree.
            (2) Enforcement.--
                    (A) Request to board of governors.--The appropriate 
                financial regulator may request the Board of Governors 
                to enforce this title or the rules or orders prescribed

[[Page 124 STAT. 1817]]

                under this title against a financial institution that is 
                subject to the standards prescribed under section 805(a) 
                for a designated activity.
                    (B) <<NOTE: Determination.>>  Enforcement by board 
                of governors.--Upon receipt of an appropriate written 
                request, the Board of Governors shall determine whether 
                an enforcement action is warranted, and, if so, it shall 
                enforce compliance with this title or the rules or 
                orders prescribed under this title and, if so, the 
                financial institution shall be subject to, and the Board 
                of Governors shall have authority under the provisions 
                of subsections (b) through (n) of section 8 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1818) in the 
                same manner and to the same extent as if the financial 
                institution was an insured depository institution and 
                the Board of Governors was the appropriate Federal 
                banking agency for such insured depository institution.

    (e) Back-up Authority of the Board of Governors.--
            (1) Examination and enforcement.--Notwithstanding any other 
        provision of law, the Board of Governors may--
                    (A) conduct an examination of the type described in 
                subsection (a) of any financial institution that is 
                subject to the standards prescribed under section 805(a) 
                for a designated activity; and
                    (B) enforce the provisions of this title or any 
                rules or orders prescribed under this title against any 
                financial institution that is subject to the standards 
                prescribed under section 805(a) for a designated 
                activity.
            (2) Limitations.--
                    (A) Examination.--The Board of Governors may 
                exercise the authority described in paragraph (1)(A) 
                only if the Board of Governors has--
                          (i) reasonable cause to believe that a 
                      financial institution is not in compliance with 
                      this title or the rules or orders prescribed under 
                      this title with respect to a designated activity;
                          (ii) <<NOTE: Notification.>>  notified, in 
                      writing, the appropriate financial regulator and 
                      the Council of its belief under clause (i) with 
                      supporting documentation included;
                          (iii) requested the appropriate financial 
                      regulator to conduct a prompt examination of the 
                      financial institution;
                          (iv) either--
                                    (I) <<NOTE: Deadline.>>  not been 
                                afforded a reasonable opportunity to 
                                participate in an examination of the 
                                financial institution by the appropriate 
                                financial regulator within 30 days after 
                                the date of the Board's notification 
                                under clause (ii); or
                                    (II) reasonable cause to believe 
                                that the financial institution's 
                                noncompliance with this title or the 
                                rules or orders prescribed under this 
                                title poses a substantial risk to other 
                                financial institutions, critical 
                                markets, or the broader financial 
                                system, subject to the Board of 
                                Governors affording the appropriate 
                                financial regulator a reasonable 
                                opportunity to participate in the 
                                examination; and
                          (v) obtained the approval of the Council upon 
                      an affirmative vote by a majority of the Council.

[[Page 124 STAT. 1818]]

                    (B) Enforcement.--The Board of Governors may 
                exercise the authority described in paragraph (1)(B) 
                only if the Board of Governors has--
                          (i) reasonable cause to believe that a 
                      financial institution is not in compliance with 
                      this title or the rules or orders prescribed under 
                      this title with respect to a designated activity;
                          (ii) <<NOTE: Notification.>>  notified, in 
                      writing, the appropriate financial regulator and 
                      the Council of its belief under clause (i) with 
                      supporting documentation included and with a 
                      recommendation that the appropriate financial 
                      regulator take 1 or more specific enforcement 
                      actions against the financial institution;
                          (iii) either--
                                    (I) <<NOTE: Deadline.>>  not been 
                                notified, in writing, by the appropriate 
                                financial regulator of the commencement 
                                of an enforcement action recommended by 
                                the Board of Governors against the 
                                financial institution within 60 days 
                                from the date of the notification under 
                                clause (ii); or
                                    (II) reasonable cause to believe 
                                that the financial institution's 
                                noncompliance with this title or the 
                                rules or orders prescribed under this 
                                title poses significant liquidity, 
                                credit, operational, or other risks to 
                                the financial markets or to the 
                                financial stability of the United 
                                States, subject to the Board of 
                                Governors notifying the appropriate 
                                financial regulator of the Board's 
                                enforcement action; and
                          (iv) obtained the approval of the Council upon 
                      an affirmative vote by a majority of the Council.
            (3) Enforcement provisions.--For purposes of taking 
        enforcement action under paragraph (1), the financial 
        institution shall be subject to, and the Board of Governors 
        shall have authority under the provisions of subsections (b) 
        through (n) of section 8 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1818) in the same manner and to the same extent as if 
        the financial institution was an insured depository institution 
        and the Board of Governors was the appropriate Federal banking 
        agency for such insured depository institution.
SEC. 809. <<NOTE: 12 USC 5468.>>  REQUESTS FOR INFORMATION, 
                        REPORTS, OR RECORDS.

    (a) Information To Assess Systemic Importance.--
            (1) Financial market utilities.--The Council is authorized 
        to require any financial market utility to submit such 
        information as the Council may require for the sole purpose of 
        assessing whether that financial market utility is systemically 
        important, but only if the Council has reasonable cause to 
        believe that the financial market utility meets the standards 
        for systemic importance set forth in section 804.
            (2) Financial institutions engaged in payment, clearing, or 
        settlement activities.--The Council is authorized to require any 
        financial institution to submit such information as the Council 
        may require for the sole purpose of assessing whether any 
        payment, clearing, or settlement activity engaged in or 
        supported by a financial institution is systemically important, 
        but only if the Council has reasonable cause to believe

[[Page 124 STAT. 1819]]

        that the activity meets the standards for systemic importance 
        set forth in section 804.

    (b) Reporting After Designation.--
            (1) Designated financial market utilities.--The Board of 
        Governors and the Council may each require a designated 
        financial market utility to submit reports or data to the Board 
        of Governors and the Council in such frequency and form as 
        deemed necessary by the Board of Governors or the Council in 
        order to assess the safety and soundness of the utility and the 
        systemic risk that the utility's operations pose to the 
        financial system.
            (2) Financial institutions subject to standards for 
        designated activities.--The Board of Governors and the Council 
        may each require 1 or more financial institutions subject to the 
        standards prescribed under section 805(a) for a designated 
        activity to submit, in such frequency and form as deemed 
        necessary by the Board of Governors or the Council, reports and 
        data to the Board of Governors and the Council solely with 
        respect to the conduct of the designated activity and solely to 
        assess whether--
                    (A) the rules, orders, or standards prescribed under 
                section 805(a) with respect to the designated activity 
                appropriately address the risks to the financial system 
                presented by such activity; and
                    (B) the financial institutions are in compliance 
                with this title and the rules and orders prescribed 
                under section 805(a) with respect to the designated 
                activity.
            (3) Limitation.--The Board of Governors may, upon an 
        affirmative vote by a majority of the Council, prescribe 
        regulations under this section that impose a recordkeeping or 
        reporting requirement on designated clearing entities or 
        financial institutions engaged in designated activities that are 
        subject to standards that have been prescribed under section 
        805(a)(2).

    (c) Coordination With Appropriate Federal Supervisory Agency.--
            (1) Advance coordination.--Before requesting any material 
        information from, or imposing reporting or recordkeeping 
        requirements on, any financial market utility or any financial 
        institution engaged in a payment, clearing, or settlement 
        activity, the Board of Governors or the Council shall coordinate 
        with the Supervisory Agency for a financial market utility or 
        the appropriate financial regulator for a financial institution 
        to determine if the information is available from or may be 
        obtained by the agency in the form, format, or detail required 
        by the Board of Governors or the Council.
            (2) Supervisory reports.--Notwithstanding any other 
        provision of law, the Supervisory Agency, the appropriate 
        financial regulator, and the Board of Governors are authorized 
        to disclose to each other and the Council copies of its 
        examination reports or similar reports regarding any financial 
        market utility or any financial institution engaged in payment, 
        clearing, or settlement activities.

    (d) Timing of Response From Appropriate Federal Supervisory 
Agency.-- <<NOTE: Deadline. Notice.>> If the information, report, 
records, or data requested by the Board of Governors or the Council 
under subsection (c)(1) are not provided in full by the Supervisory 
Agency

[[Page 124 STAT. 1820]]

or the appropriate financial regulator in less than 15 days after the 
date on which the material is requested, the Board of Governors or the 
Council may request the information or impose recordkeeping or reporting 
requirements directly on such persons as provided in subsections (a) and 
(b) with notice to the agency.

    (e) Sharing of Information.--
            (1) Material concerns.--Notwithstanding any other provision 
        of law, the Board of Governors, the Council, the appropriate 
        financial regulator, and any Supervisory Agency are authorized 
        to--
                    (A) <<NOTE: Notification.>>  promptly notify each 
                other of material concerns about a designated financial 
                market utility or any financial institution engaged in 
                designated activities; and
                    (B) share appropriate reports, information, or data 
                relating to such concerns.
            (2) Other information.--Notwithstanding any other provision 
        of law, the Board of Governors, the Council, the appropriate 
        financial regulator, or any Supervisory Agency may, under such 
        terms and conditions as it deems appropriate, provide 
        confidential supervisory information and other information 
        obtained under this title to each other, and to the Secretary, 
        Federal Reserve Banks, State financial institution supervisory 
        agencies, foreign financial supervisors, foreign central banks, 
        and foreign finance ministries, subject to reasonable assurances 
        of confidentiality, provided, however, that no person or entity 
        receiving information pursuant to this section may disseminate 
        such information to entities or persons other than those listed 
        in this paragraph without complying with applicable law, 
        including section 8 of the Commodity Exchange Act (7 U.S.C. 12).

    (f) Privilege Maintained.--The Board of Governors, the Council, the 
appropriate financial regulator, and any Supervisory Agency providing 
reports or data under this section shall not be deemed to have waived 
any privilege applicable to those reports or data, or any portion 
thereof, by providing the reports or data to the other party or by 
permitting the reports or data, or any copies thereof, to be used by the 
other party.
    (g) Disclosure Exemption.--Information obtained by the Board of 
Governors, the Supervisory Agencies, or the Council under this section 
and any materials prepared by the Board of Governors, the Supervisory 
Agencies, or the Council regarding their assessment of the systemic 
importance of financial market utilities or any payment, clearing, or 
settlement activities engaged in by financial institutions, and in 
connection with their supervision of designated financial market 
utilities and designated activities, shall be confidential supervisory 
information exempt from disclosure under section 552 of title 5, United 
States Code. For purposes of such section 552, this subsection shall be 
considered a statute described in subsection (b)(3) of such section 552.
SEC. 810. <<NOTE: 12 USC 5469.>>  RULEMAKING.

    The Board of Governors, the Supervisory Agencies, and the Council 
are authorized to prescribe such rules and issue such orders as may be 
necessary to administer and carry out their respective authorities and 
duties granted under this title and prevent evasions thereof.

[[Page 124 STAT. 1821]]

SEC. 811. <<NOTE: 12 USC 5470.>>  OTHER AUTHORITY.

    Unless otherwise provided by its terms, this title does not divest 
any appropriate financial regulator, any Supervisory Agency, or any 
other Federal or State agency, of any authority derived from any other 
applicable law, except that any standards prescribed by the Board of 
Governors under section 805 shall supersede any less stringent 
requirements established under other authority to the extent of any 
conflict.
SEC. 812. <<NOTE: 12 USC 5471.>>  CONSULTATION.

    (a) CFTC.--The Commodity Futures Trading Commission shall consult 
with the Board of Governors--
            (1) prior to exercising its authorities under sections 
        2(h)(2)(C), 2(h)(3)(A), 2(h)(3)(C), 2(h)(4)(A), and 2(h)(4)(B) 
        of the Commodity Exchange Act, as amended by the Wall Street 
        Transparency and Accountability Act of 2010;
            (2) with respect to any rule or rule amendment of a 
        derivatives clearing organization for which a stay of 
        certification has been issued under section 745(b)(3) of the 
        Wall Street Transparency and Accountability Act of 2010; and
            (3) prior to exercising its rulemaking authorities under 
        section 728 of the Wall Street Transparency and Accountability 
        Act of 2010.

    (b) SEC.--The Commission shall consult with the Board of Governors--
            (1) prior to exercising its authorities under sections 
        3C(a)(2)(C), 3C(a)(3)(A), 3C(a)(3)(C), 3C(a)(4)(A), and 
        3C(a)(4)(B) of the Securities Exchange Act of 1934, as amended 
        by the Wall Street Transparency and Accountability Act of 2010;
            (2) with respect to any proposed rule change of a clearing 
        agency for which an extension of the time for review has been 
        designated under section 19(b)(2) of the Securities Exchange Act 
        of 1934; and
            (3) prior to exercising its rulemaking authorities under 
        section 13(n) of the Securities Exchange Act of 1934, as added 
        by section 763(i) of the Wall Street Transparency and 
        Accountability Act of 2010.
SEC. 813. <<NOTE: 12 USC 5472.>>  COMMON FRAMEWORK FOR DESIGNATED 
                        CLEARING ENTITY RISK MANAGEMENT.

    The Commodity Futures Trading Commission and the Commission shall 
coordinate with the Board of Governors to jointly develop risk 
management supervision programs for designated clearing 
entities. <<NOTE: Deadline. Reports.>>  Not later than 1 year after the 
date of enactment of this Act, the Commodity Futures Trading Commission, 
the Commission, and the Board of Governors shall submit a joint report 
to the Committee on Banking, Housing, and Urban Affairs and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate, and the 
Committee on Financial Services and the Committee on Agriculture of the 
House of Representatives recommendations for--
            (1) improving consistency in the designated clearing entity 
        oversight programs of the Commission and the Commodity Futures 
        Trading Commission;
            (2) promoting robust risk management by designated clearing 
        entities;
            (3) promoting robust risk management oversight by regulators 
        of designated clearing entities; and

[[Page 124 STAT. 1822]]

            (4) improving regulators' ability to monitor the potential 
        effects of designated clearing entity risk management on the 
        stability of the financial system of the United States.
SEC. 814. <<NOTE: 12 USC 5461 note.>>  EFFECTIVE DATE.

    This title is effective as of the date of enactment of this Act.

TITLE <<NOTE: Investor Protection and Securities Reform Act of 2010.>>  
     IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF 
SECURITIES
SEC. 901. <<NOTE: 15 USC 78a note.>>  SHORT TITLE.

    This title may be cited as the ``Investor Protection and Securities 
Reform Act of 2010''.

               Subtitle A--Increasing Investor Protection

SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED.

    Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) is amended by adding at the end the following:
``SEC. 39. <<NOTE: 15 USC 78pp.>>  INVESTOR ADVISORY COMMITTEE.

    ``(a) Establishment and Purpose.--
            ``(1) Establishment.--There is established within the 
        Commission the Investor Advisory Committee (referred to in this 
        section as the `Committee').
            ``(2) Purpose.--The Committee shall--
                    ``(A) advise and consult with the Commission on--
                          ``(i) regulatory priorities of the Commission;
                          ``(ii) issues relating to the regulation of 
                      securities products, trading strategies, and fee 
                      structures, and the effectiveness of disclosure;
                          ``(iii) initiatives to protect investor 
                      interest; and
                          ``(iv) initiatives to promote investor 
                      confidence and the integrity of the securities 
                      marketplace; and
                    ``(B) submit to the Commission such findings and 
                recommendations as the Committee determines are 
                appropriate, including recommendations for proposed 
                legislative changes.

    ``(b) Membership.--
            ``(1) In general.--The members of the Committee shall be--
                    ``(A) the Investor Advocate;
                    ``(B) a representative of State securities 
                commissions;
                    ``(C) a representative of the interests of senior 
                citizens; and
                    ``(D) not fewer than 10, and not more than 20, 
                members appointed by the Commission, from among 
                individuals who--
                          ``(i) represent the interests of individual 
                      equity and debt investors, including investors in 
                      mutual funds;
                          ``(ii) represent the interests of 
                      institutional investors, including the interests 
                      of pension funds and registered investment 
                      companies;

[[Page 124 STAT. 1823]]

                          ``(iii) are knowledgeable about investment 
                      issues and decisions; and
                          ``(iv) have reputations of integrity.
            ``(2) Term.--Each member of the Committee appointed under 
        paragraph (1)(B) shall serve for a term of 4 years.
            ``(3) Members not commission employees.--Members appointed 
        under paragraph (1)(B) shall not be deemed to be employees or 
        agents of the Commission solely because of membership on the 
        Committee.

    ``(c) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
            ``(1) In general.--The members of the Committee shall elect, 
        from among the members of the Committee--
                    ``(A) a chairman, who may not be employed by an 
                issuer;
                    ``(B) a vice chairman, who may not be employed by an 
                issuer;
                    ``(C) a secretary; and
                    ``(D) an assistant secretary.
            ``(2) Term.--Each member elected under paragraph (1) shall 
        serve for a term of 3 years in the capacity for which the member 
        was elected under paragraph (1).

    ``(d) Meetings.--
            ``(1) Frequency of meetings.--The Committee shall meet--
                    ``(A) not less frequently than twice annually, at 
                the call of the chairman of the Committee; and
                    ``(B) from time to time, at the call of the 
                Commission.
            ``(2) <<NOTE: Deadline.>>  Notice.--The chairman of the 
        Committee shall give the members of the Committee written notice 
        of each meeting, not later than 2 weeks before the date of the 
        meeting.

    ``(e) Compensation and Travel Expenses.--Each member of the 
Committee who is not a full-time employee of the United States shall--
            ``(1) be entitled to receive compensation at a rate not to 
        exceed the daily equivalent of the annual rate of basic pay in 
        effect for a position at level V of the Executive Schedule under 
        section 5316 of title 5, United States Code, for each day during 
        which the member is engaged in the actual performance of the 
        duties of the Committee; and
            ``(2) while away from the home or regular place of business 
        of the member in the performance of services for the Committee, 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, in the same manner as persons employed 
        intermittently in the Government service are allowed expenses 
        under section 5703(b) of title 5, United States Code.

    ``(f) Staff.--The Commission shall make available to the Committee 
such staff as the chairman of the Committee determines are necessary to 
carry out this section.
    ``(g) Review by Commission.--The Commission shall--
            ``(1) review the findings and recommendations of the 
        Committee; and
            ``(2) each time the Committee submits a finding or 
        recommendation to the Commission, promptly issue a public 
        statement--
                    ``(A) assessing the finding or recommendation of the 
                Committee; and

[[Page 124 STAT. 1824]]

                    ``(B) disclosing the action, if any, the Commission 
                intends to take with respect to the finding or 
                recommendation.

    ``(h) Committee Findings.--Nothing in this section shall require the 
Commission to agree to or act upon any finding or recommendation of the 
Committee.
    ``(i) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply with respect to the 
Committee and its activities.
    ``(j) Authorization of Appropriations.--There is authorized to be 
appropriated to the Commission such sums as are necessary to carry out 
this section.''.
SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMISSION TO ENGAGE 
                        IN INVESTOR TESTING.

    Section 19 of the Securities Act of 1933 (15 U.S.C. 77s) is amended 
by adding at the end the following:
    ``(e) Evaluation of Rules or Programs.--For the purpose of 
evaluating any rule or program of the Commission issued or carried out 
under any provision of the securities laws, as defined in section 3 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c), and the purposes of 
considering, proposing, adopting, or engaging in any such rule or 
program or developing new rules or programs, the Commission may--
            ``(1) gather information from and communicate with investors 
        or other members of the public;
            ``(2) engage in such temporary investor testing programs as 
        the Commission determines are in the public interest or would 
        protect investors; and
            ``(3) consult with academics and consultants, as necessary 
        to carry out this subsection.

    ``(f) Rule of Construction.--For purposes of the Paperwork Reduction 
Act (44 U.S.C. 3501 et seq.), any action taken under subsection (e) 
shall not be construed to be a collection of information.''.
SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGATIONS OF BROKERS, 
                        DEALERS, AND INVESTMENT ADVISERS.

    (a) <<NOTE: 15 USC 78o note.>>  Definition.--For purposes of this 
section, the term ``retail customer'' means a natural person, or the 
legal representative of such natural person, who--
            (1) receives personalized investment advice about securities 
        from a broker or dealer or investment adviser; and
            (2) uses such advice primarily for personal, family, or 
        household purposes.

    (b) <<NOTE: 15 USC 78o note.>>  Study.--The Commission shall conduct 
a study to evaluate--
            (1) the effectiveness of existing legal or regulatory 
        standards of care for brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers for providing personalized 
        investment advice and recommendations about securities to retail 
        customers imposed by the Commission and a national securities 
        association, and other Federal and State legal or regulatory 
        standards; and
            (2) whether there are legal or regulatory gaps, 
        shortcomings, or overlaps in legal or regulatory standards in 
        the protection of retail customers relating to the standards of 
        care

[[Page 124 STAT. 1825]]

        for brokers, dealers, investment advisers, persons associated 
        with brokers or dealers, and persons associated with investment 
        advisers for providing personalized investment advice about 
        securities to retail customers that should be addressed by rule 
        or statute.

    (c) <<NOTE: 15 USC 78o note.>>  Considerations.--In conducting the 
study required under subsection (b), the Commission shall consider--
            (1) the effectiveness of existing legal or regulatory 
        standards of care for brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers for providing personalized 
        investment advice and recommendations about securities to retail 
        customers imposed by the Commission and a national securities 
        association, and other Federal and State legal or regulatory 
        standards;
            (2) whether there are legal or regulatory gaps, 
        shortcomings, or overlaps in legal or regulatory standards in 
        the protection of retail customers relating to the standards of 
        care for brokers, dealers, investment advisers, persons 
        associated with brokers or dealers, and persons associated with 
        investment advisers for providing personalized investment advice 
        about securities to retail customers that should be addressed by 
        rule or statute;
            (3) whether retail customers understand that there are 
        different standards of care applicable to brokers, dealers, 
        investment advisers, persons associated with brokers or dealers, 
        and persons associated with investment advisers in the provision 
        of personalized investment advice about securities to retail 
        customers;
            (4) whether the existence of different standards of care 
        applicable to brokers, dealers, investment advisers, persons 
        associated with brokers or dealers, and persons associated with 
        investment advisers is a source of confusion for retail 
        customers regarding the quality of personalized investment 
        advice that retail customers receive;
            (5) the regulatory, examination, and enforcement resources 
        devoted to, and activities of, the Commission, the States, and a 
        national securities association to enforce the standards of care 
        for brokers, dealers, investment advisers, persons associated 
        with brokers or dealers, and persons associated with investment 
        advisers when providing personalized investment advice and 
        recommendations about securities to retail customers, 
        including--
                    (A) the effectiveness of the examinations of 
                brokers, dealers, and investment advisers in determining 
                compliance with regulations;
                    (B) the frequency of the examinations; and
                    (C) the length of time of the examinations;
            (6) the substantive differences in the regulation of 
        brokers, dealers, and investment advisers, when providing 
        personalized investment advice and recommendations about 
        securities to retail customers;
            (7) the specific instances related to the provision of 
        personalized investment advice about securities in which--
                    (A) the regulation and oversight of investment 
                advisers provide greater protection to retail customers 
                than the regulation and oversight of brokers and 
                dealers; and

[[Page 124 STAT. 1826]]

                    (B) the regulation and oversight of brokers and 
                dealers provide greater protection to retail customers 
                than the regulation and oversight of investment 
                advisers;
            (8) the existing legal or regulatory standards of State 
        securities regulators and other regulators intended to protect 
        retail customers;
            (9) the potential impact on retail customers, including the 
        potential impact on access of retail customers to the range of 
        products and services offered by brokers and dealers, of 
        imposing upon brokers, dealers, and persons associated with 
        brokers or dealers--
                    (A) the standard of care applied under the 
                Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
                seq.) for providing personalized investment advice about 
                securities to retail customers of investment advisers, 
                as interpreted by the Commission and the courts; and
                    (B) other requirements of the Investment Advisers 
                Act of 1940 (15 U.S.C. 80b-1 et seq.);
            (10) the potential impact of eliminating the broker and 
        dealer exclusion from the definition of ``investment adviser'' 
        under section 202(a)(11)(C) of the Investment Advisers Act of 
        1940 (15 U.S.C. 80b-2(a)(11)(C)), in terms of--
                    (A) the impact and potential benefits and harm to 
                retail customers that could result from such a change, 
                including any potential impact on access to personalized 
                investment advice and recommendations about securities 
                to retail customers or the availability of such advice 
                and recommendations;
                    (B) the number of additional entities and 
                individuals that would be required to register under, or 
                become subject to, the Investment Advisers Act of 1940 
                (15 U.S.C. 80b-1 et seq.), and the additional 
                requirements to which brokers, dealers, and persons 
                associated with brokers and dealers would become 
                subject, including--
                          (i) any potential additional associated person 
                      licensing, registration, and examination 
                      requirements; and
                          (ii) the additional costs, if any, to the 
                      additional entities and individuals; and
                    (C) the impact on Commission and State resources 
                to--
                          (i) conduct examinations of registered 
                      investment advisers and the representatives of 
                      registered investment advisers, including the 
                      impact on the examination cycle; and
                          (ii) enforce the standard of care and other 
                      applicable requirements imposed under the 
                      Investment Advisers Act of 1940 (15 U.S.C. 80b-1 
                      et seq.);
            (11) the varying level of services provided by brokers, 
        dealers, investment advisers, persons associated with brokers or 
        dealers, and persons associated with investment advisers to 
        retail customers and the varying scope and terms of retail 
        customer relationships of brokers, dealers, investment advisers, 
        persons associated with brokers or dealers, and persons 
        associated with investment advisers with such retail customers;
            (12) the potential impact upon retail customers that could 
        result from potential changes in the regulatory requirements

[[Page 124 STAT. 1827]]

        or legal standards of care affecting brokers, dealers, 
        investment advisers, persons associated with brokers or dealers, 
        and persons associated with investment advisers relating to 
        their obligations to retail customers regarding the provision of 
        investment advice, including any potential impact on--
                    (A) protection from fraud;
                    (B) access to personalized investment advice, and 
                recommendations about securities to retail customers; or
                    (C) the availability of such advice and 
                recommendations;
            (13) the potential additional costs and expenses to--
                    (A) retail customers regarding and the potential 
                impact on the profitability of their investment 
                decisions; and
                    (B) brokers, dealers, and investment advisers 
                resulting from potential changes in the regulatory 
                requirements or legal standards affecting brokers, 
                dealers, investment advisers, persons associated with 
                brokers or dealers, and persons associated with 
                investment advisers relating to their obligations, 
                including duty of care, to retail customers; and
            (14) any other consideration that the Commission considers 
        necessary and appropriate in determining whether to conduct a 
        rulemaking under subsection (f).

    (d) <<NOTE: 15 USC 78o note.>>  Report.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this Act, the Commission shall submit a report on 
        the study required under subsection (b) to--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate; and
                    (B) the Committee on Financial Services of the House 
                of Representatives.
            (2) Content requirements.--The report required under 
        paragraph (1) shall describe the findings, conclusions, and 
        recommendations of the Commission from the study required under 
        subsection (b), including--
                    (A) a description of the considerations, analysis, 
                and public and industry input that the Commission 
                considered, as required under subsection (b), to make 
                such findings, conclusions, and policy recommendations; 
                and
                    (B) an analysis of whether any identified legal or 
                regulatory gaps, shortcomings, or overlap in legal or 
                regulatory standards in the protection of retail 
                customers relating to the standards of care for brokers, 
                dealers, investment advisers, persons associated with 
                brokers or dealers, and persons associated with 
                investment advisers for providing personalized 
                investment advice about securities to retail customers.

    (e) <<NOTE: 15 USC 78o note.>>  Public Comment.--The Commission 
shall seek and consider public input, comments, and data in order to 
prepare the report required under subsection (d).

    (f) <<NOTE: 15 USC 78o note.>>  Rulemaking.--The Commission may 
commence a rulemaking, as necessary or appropriate in the public 
interest and for the protection of retail customers (and such other 
customers as the Commission may by rule provide), to address the legal 
or regulatory standards of care for brokers, dealers, investment 
advisers, persons associated with brokers or dealers, and persons 
associated with investment advisers for providing personalized

[[Page 124 STAT. 1828]]

investment advice about securities to such retail customers. The 
Commission shall consider the findings conclusions, and recommendations 
of the study required under subsection (b).

    (g) Authority to Establish a Fiduciary Duty for Brokers and 
Dealers.--
            (1) Securities exchange act of 1934.--Section 15 of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by 
        adding at the end the following:

    ``(k) Standard of Conduct.--
            ``(1) In general.--Notwithstanding any other provision of 
        this Act or the Investment Advisers Act of 1940, the Commission 
        may promulgate rules to provide that, with respect to a broker 
        or dealer, when providing personalized investment advice about 
        securities to a retail customer (and such other customers as the 
        Commission may by rule provide), the standard of conduct for 
        such broker or dealer with respect to such customer shall be the 
        same as the standard of conduct applicable to an investment 
        adviser under section 211 of the Investment Advisers Act of 
        1940. The receipt of compensation based on commission or other 
        standard compensation for the sale of securities shall not, in 
        and of itself, be considered a violation of such standard 
        applied to a broker or dealer. Nothing in this section shall 
        require a broker or dealer or registered representative to have 
        a continuing duty of care or loyalty to the customer after 
        providing personalized investment advice about securities.
            ``(2) Disclosure of range of products offered.--Where a 
        broker or dealer sells only proprietary or other limited range 
        of products, as determined by the Commission, the Commission may 
        by rule require that such broker or dealer provide notice to 
        each retail customer and obtain the consent or acknowledgment of 
        the customer. The sale of only proprietary or other limited 
        range of products by a broker or dealer shall not, in and of 
        itself, be considered a violation of the standard set forth in 
        paragraph (1).

    ``(l) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment advisers, 
        including any material conflicts of interest; and
            ``(2) examine and, where appropriate, promulgate rules 
        prohibiting or restricting certain sales practices, conflicts of 
        interest, and compensation schemes for brokers, dealers, and 
        investment advisers that the Commission deems contrary to the 
        public interest and the protection of investors.''.
            (2) Investment advisers act of 1940.--Section 211 of the 
        Investment Advisers Act of 1940, <<NOTE: 15 USC 80b-11.>>  is 
        further amended by adding at the end the following new 
        subsections:

    ``(g) Standard of Conduct.--
            ``(1) In general.--The Commission may promulgate rules to 
        provide that the standard of conduct for all brokers, dealers, 
        and investment advisers, when providing personalized investment 
        advice about securities to retail customers (and such other 
        customers as the Commission may by rule provide), shall be to 
        act in the best interest of the customer without regard to the 
        financial or other interest of the broker, dealer, or investment 
        adviser providing the advice. In accordance with such

[[Page 124 STAT. 1829]]

        rules, any material conflicts of interest shall be disclosed and 
        may be consented to by the customer. Such rules shall provide 
        that such standard of conduct shall be no less stringent than 
        the standard applicable to investment advisers under section 
        206(1) and (2) of this Act when providing personalized 
        investment advice about securities, except the Commission shall 
        not ascribe a meaning to the term `customer' that would include 
        an investor in a private fund managed by an investment adviser, 
        where such private fund has entered into an advisory contract 
        with such adviser. The receipt of compensation based on 
        commission or fees shall not, in and of itself, be considered a 
        violation of such standard applied to a broker, dealer, or 
        investment adviser.
            ``(2) Retail customer defined.--For purposes of this 
        subsection, the term `retail customer' means a natural person, 
        or the legal representative of such natural person, who--
                    ``(A) receives personalized investment advice about 
                securities from a broker, dealer, or investment adviser; 
                and
                    ``(B) uses such advice primarily for personal, 
                family, or household purposes.

    ``(h) Other Matters.--The Commission shall--
            ``(1) facilitate the provision of simple and clear 
        disclosures to investors regarding the terms of their 
        relationships with brokers, dealers, and investment advisers, 
        including any material conflicts of interest; and
            ``(2) examine and, where appropriate, promulgate rules 
        prohibiting or restricting certain sales practices, conflicts of 
        interest, and compensation schemes for brokers, dealers, and 
        investment advisers that the Commission deems contrary to the 
        public interest and the protection of investors.''.

    (h) Harmonization of Enforcement.--
            (1) Securities exchange act of 1934.--Section 15 of the 
        Securities Exchange Act of 1934, <<NOTE: 15 USC 78o.>>  as 
        amended by subsection (g)(1), is further amended by adding at 
        the end the following new subsection:

    ``(m) Harmonization of Enforcement.--The enforcement authority of 
the Commission with respect to violations of the standard of conduct 
applicable to a broker or dealer providing personalized investment 
advice about securities to a retail customer shall include--
            ``(1) the enforcement authority of the Commission with 
        respect to such violations provided under this Act; and
            ``(2) the enforcement authority of the Commission with 
        respect to violations of the standard of conduct applicable to 
        an investment adviser under the Investment Advisers Act of 1940, 
        including the authority to impose sanctions for such violations, 
        and

the Commission shall seek to prosecute and sanction violators of the 
standard of conduct applicable to a broker or dealer providing 
personalized investment advice about securities to a retail customer 
under this Act to same extent as the Commission prosecutes and sanctions 
violators of the standard of conduct applicable to an investment advisor 
under the Investment Advisers Act of 1940.''.
            (2) Investment advisers act of 1940.--Section 211 of the 
        Investment Advisers Act of 1940, as amended by subsection

[[Page 124 STAT. 1830]]

        (g)(2), is further amended by adding at the end the following 
        new subsection:

    ``(i) Harmonization of Enforcement.--The enforcement authority of 
the Commission with respect to violations of the standard of conduct 
applicable to an investment adviser shall include--
            ``(1) the enforcement authority of the Commission with 
        respect to such violations provided under this Act; and
            ``(2) the enforcement authority of the Commission with 
        respect to violations of the standard of conduct applicable to a 
        broker or dealer providing personalized investment advice about 
        securities to a retail customer under the Securities Exchange 
        Act of 1934, including the authority to impose sanctions for 
        such violations, and

the Commission shall seek to prosecute and sanction violators of the 
standard of conduct applicable to an investment adviser under this Act 
to same extent as the Commission prosecutes and sanctions violators of 
the standard of conduct applicable to a broker or dealer providing 
personalized investment advice about securities to a retail customer 
under the Securities Exchange Act of 1934.''.
SEC. 914. <<NOTE: 15 USC 80b-11 note.>>  STUDY ON ENHANCING 
                        INVESTMENT ADVISER EXAMINATIONS.

    (a) Study Required.--
            (1) <<NOTE: Review.>>  In general.--The Commission shall 
        review and analyze the need for enhanced examination and 
        enforcement resources for investment advisers.
            (2) Areas of consideration.--The study required by this 
        subsection shall examine--
                    (A) <<NOTE: Time period.>>  the number and frequency 
                of examinations of investment advisers by the Commission 
                over the 5 years preceding the date of the enactment of 
                this subtitle;
                    (B) the extent to which having Congress authorize 
                the Commission to designate one or more self-regulatory 
                organizations to augment the Commission's efforts in 
                overseeing investment advisers would improve the 
                frequency of examinations of investment advisers; and
                    (C) current and potential approaches to examining 
                the investment advisory activities of dually registered 
                broker-dealers and investment advisers or affiliated 
                broker-dealers and investment advisers.

    (b) Report Required.--The Commission shall report its findings to 
the Committee on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the Senate, not 
later than 180 days after the date of enactment of this subtitle, and 
shall use such findings to revise its rules and regulations, as 
necessary. The report shall include a discussion of regulatory or 
legislative steps that are recommended or that may be necessary to 
address concerns identified in the study.
SEC. 915. OFFICE OF THE INVESTOR ADVOCATE.

    Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is 
amended by adding at the end the following:
    ``(g) Office of the Investor Advocate.--
            ``(1) Office established.--There is established within the 
        Commission the Office of the Investor Advocate (in this 
        subsection referred to as the `Office').

[[Page 124 STAT. 1831]]

            ``(2) Investor advocate.--
                    ``(A) In general.--The head of the Office shall be 
                the Investor Advocate, who shall--
                          ``(i) report directly to the Chairman; and
                          ``(ii) be appointed by the Chairman, in 
                      consultation with the Commission, from among 
                      individuals having experience in advocating for 
                      the interests of investors in securities and 
                      investor protection issues, from the perspective 
                      of investors.
                    ``(B) Compensation.--The annual rate of pay for the 
                Investor Advocate shall be equal to the highest rate of 
                annual pay for other senior executives who report to the 
                Chairman of the Commission.
                    ``(C) <<NOTE: Time periods.>>  Limitation on 
                service.--An individual who serves as the Investor 
                Advocate may not be employed by the Commission--
                          ``(i) during the 2-year period ending on the 
                      date of appointment as Investor Advocate; or
                          ``(ii) during the 5-year period beginning on 
                      the date on which the person ceases to serve as 
                      the Investor Advocate.
            ``(3) Staff of office.--The Investor Advocate, after 
        consultation with the Chairman of the Commission, may retain or 
        employ independent counsel, research staff, and service staff, 
        as the Investor Advocate deems necessary to carry out the 
        functions, powers, and duties of the Office.
            ``(4) Functions of the investor advocate.--The Investor 
        Advocate shall--
                    ``(A) assist retail investors in resolving 
                significant problems such investors may have with the 
                Commission or with self-regulatory organizations;
                    ``(B) identify areas in which investors would 
                benefit from changes in the regulations of the 
                Commission or the rules of self-regulatory 
                organizations;
                    ``(C) identify problems that investors have with 
                financial service providers and investment products;
                    ``(D) analyze the potential impact on investors of--
                          ``(i) proposed regulations of the Commission; 
                      and
                          ``(ii) proposed rules of self-regulatory 
                      organizations registered under this title; and
                    ``(E) to the extent practicable, propose to the 
                Commission changes in the regulations or orders of the 
                Commission and to Congress any legislative, 
                administrative, or personnel changes that may be 
                appropriate to mitigate problems identified under this 
                paragraph and to promote the interests of investors.
            ``(5) Access to documents.--The Commission shall ensure that 
        the Investor Advocate has full access to the documents of the 
        Commission and any self-regulatory organization, as necessary to 
        carry out the functions of the Office.
            ``(6) Annual reports.--
                    ``(A) Report on objectives.--
                          ``(i) In general.--Not later than June 30 of 
                      each year after 2010, the Investor Advocate shall 
                      submit to the Committee on Banking, Housing, and 
                      Urban Affairs of the Senate and the Committee on 
                      Financial Services of the House of Representatives 
                      a report on

[[Page 124 STAT. 1832]]

                      the objectives of the Investor Advocate for the 
                      following fiscal year.
                          ``(ii) Contents.--Each report required under 
                      clause (i) shall contain full and substantive 
                      analysis and explanation.
                    ``(B) Report on activities.--
                          ``(i) In general.--Not later than December 31 
                      of each year after 2010, the Investor Advocate 
                      shall submit to the Committee on Banking, Housing, 
                      and Urban Affairs of the Senate and the Committee 
                      on Financial Services of the House of 
                      Representatives a report on the activities of the 
                      Investor Advocate during the immediately preceding 
                      fiscal year.
                          ``(ii) Contents.--Each report required under 
                      clause (i) shall include--
                                    ``(I) appropriate statistical 
                                information and full and substantive 
                                analysis;
                                    ``(II) information on steps that the 
                                Investor Advocate has taken during the 
                                reporting period to improve investor 
                                services and the responsiveness of the 
                                Commission and self-regulatory 
                                organizations to investor concerns;
                                    ``(III) a summary of the most 
                                serious problems encountered by 
                                investors during the reporting period;
                                    ``(IV) an inventory of the items 
                                described in subclause (III) that 
                                includes--
                                            ``(aa) identification of any 
                                        action taken by the Commission 
                                        or the self-regulatory 
                                        organization and the result of 
                                        such action;
                                            ``(bb) the length of time 
                                        that each item has remained on 
                                        such inventory; and
                                            ``(cc) for items on which no 
                                        action has been taken, the 
                                        reasons for inaction, and an 
                                        identification of any official 
                                        who is responsible for such 
                                        action;
                                    ``(V) recommendations for such 
                                administrative and legislative actions 
                                as may be appropriate to resolve 
                                problems encountered by investors; and
                                    ``(VI) any other information, as 
                                determined appropriate by the Investor 
                                Advocate.
                          ``(iii) Independence.--Each report required 
                      under this paragraph shall be provided directly to 
                      the Committees listed in clause (i) without any 
                      prior review or comment from the Commission, any 
                      commissioner, any other officer or employee of the 
                      Commission, or the Office of Management and 
                      Budget.
                          ``(iv) Confidentiality.--No report required 
                      under clause (i) may contain confidential 
                      information.
            ``(7) <<NOTE: Procedures. Deadline.>>  Regulations.--The 
        Commission shall, by regulation, establish procedures requiring 
        a formal response to all recommendations submitted to the 
        Commission by the Investor Advocate, not later than 3 months 
        after the date of such submission.''.

[[Page 124 STAT. 1833]]

SEC. 916. STREAMLINING OF FILING PROCEDURES FOR SELF-REGULATORY 
                        ORGANIZATIONS.

    (a) Filing Procedures.--Section 19(b) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78s(b)) is amended by striking paragraph (2) 
(including the undesignated matter immediately following subparagraph 
(B)) and inserting the following:
            ``(2) <<NOTE: Deadlines.>>  Approval process.--
                    ``(A) Approval process established.--
                          ``(i) In general.--Except as provided in 
                      clause (ii), not later than 45 days after the date 
                      of publication of a proposed rule change under 
                      paragraph (1), the Commission shall--
                                    ``(I) by order, approve or 
                                disapprove the proposed rule change; or
                                    ``(II) institute proceedings under 
                                subparagraph (B) to determine whether 
                                the proposed rule change should be 
                                disapproved.
                          ``(ii) Extension of time period.--The 
                      Commission may extend the period established under 
                      clause (i) by not more than an additional 45 days, 
                      if--
                                    ``(I) <<NOTE: Publication.>>  the 
                                Commission determines that a longer 
                                period is appropriate and publishes the 
                                reasons for such determination; or
                                    ``(II) the self-regulatory 
                                organization that filed the proposed 
                                rule change consents to the longer 
                                period.
                    ``(B) Proceedings.--
                          ``(i) Notice and hearing.--If the Commission 
                      does not approve or disapprove a proposed rule 
                      change under subparagraph (A), the Commission 
                      shall provide to the self-regulatory organization 
                      that filed the proposed rule change--
                                    ``(I) notice of the grounds for 
                                disapproval under consideration; and
                                    ``(II) opportunity for hearing, to 
                                be concluded not later than 180 days 
                                after the date of publication of notice 
                                of the filing of the proposed rule 
                                change.
                          ``(ii) Order of approval or disapproval.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), not later 
                                than 180 days after the date of 
                                publication under paragraph (1), the 
                                Commission shall issue an order 
                                approving or disapproving the proposed 
                                rule change.
                                    ``(II) Extension of time period.--
                                The Commission may extend the period for 
                                issuance under clause (I) by not more 
                                than 60 days, if--
                                            
                                        ``(aa) <<NOTE: Publication.>>  
                                        the Commission determines that a 
                                        longer period is appropriate and 
                                        publishes the reasons for such 
                                        determination; or
                                            ``(bb) the self-regulatory 
                                        organization that filed the 
                                        proposed rule change consents to 
                                        the longer period.
                    ``(C) Standards for approval and disapproval.--
                          ``(i) Approval.--The Commission shall approve 
                      a proposed rule change of a self-regulatory 
                      organization if it finds that such proposed rule 
                      change is consistent

[[Page 124 STAT. 1834]]

                      with the requirements of this title and the rules 
                      and regulations issued under this title that are 
                      applicable to such organization.
                          ``(ii) Disapproval.--The Commission shall 
                      disapprove a proposed rule change of a self-
                      regulatory organization if it does not make a 
                      finding described in clause (i).
                          ``(iii) <<NOTE: Publication.>>  Time for 
                      approval.--The Commission may not approve a 
                      proposed rule change earlier than 30 days after 
                      the date of publication under paragraph (1), 
                      unless the Commission finds good cause for so 
                      doing and publishes the reason for the finding.
                    ``(D) Result of failure to institute or conclude 
                proceedings.--A proposed rule change shall be deemed to 
                have been approved by the Commission, if--
                          ``(i) the Commission does not approve or 
                      disapprove the proposed rule change or begin 
                      proceedings under subparagraph (B) within the 
                      period described in subparagraph (A); or
                          ``(ii) the Commission does not issue an order 
                      approving or disapproving the proposed rule change 
                      under subparagraph (B) within the period described 
                      in subparagraph (B)(ii).
                    ``(E) Publication date based on federal register 
                publishing.-- <<NOTE: Notice. Deadline. Web 
                posting.>> For purposes of this paragraph, if, after 
                filing a proposed rule change with the Commission 
                pursuant to paragraph (1), a self-regulatory 
                organization publishes a notice of the filing of such 
                proposed rule change, together with the substantive 
                terms of such proposed rule change, on a publicly 
                accessible website, the Commission shall thereafter send 
                the notice to the Federal Register for publication 
                thereof under paragraph (1) within 15 days of the date 
                on which such website publication is made. If the 
                Commission fails to send the notice for publication 
                thereof within such 15 day period, then the date of 
                publication shall be deemed to be the date on which such 
                website publication was made.
                    ``(F) Rulemaking.--
                          ``(i) <<NOTE: Deadline. Procedures.>>  In 
                      general.--Not later than 180 days after the date 
                      of enactment of the Investor Protection and 
                      Securities Reform Act of 2010, after consultation 
                      with other regulatory agencies, the Commission 
                      shall promulgate rules setting forth the 
                      procedural requirements of the proceedings 
                      required under this paragraph.
                          ``(ii) Notice and comment not required.--The 
                      rules promulgated by the Commission under clause 
                      (i) are not required to include republication of 
                      proposed rule changes or solicitation of public 
                      comment.''.

    (b) Clarification of Filing Date.--
            (1) Rule of construction.--Section 19(b) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended by adding at 
        the end the following:
            ``(10) Rule of construction relating to filing date of 
        proposed rule changes.--
                    ``(A) In general.--For purposes of this subsection, 
                the date of filing of a proposed rule change shall be 
                deemed

[[Page 124 STAT. 1835]]

                to be the date on which the Commission receives the 
                proposed rule change.
                    ``(B) <<NOTE: Deadlines. Notification.>>  
                Exception.--A proposed rule change has not been received 
                by the Commission for purposes of subparagraph (A) if, 
                not later than 7 business days after the date of receipt 
                by the Commission, the Commission notifies the self-
                regulatory organization that such proposed rule change 
                does not comply with the rules of the Commission 
                relating to the required form of a proposed rule change, 
                except that if the Commission determines that the 
                proposed rule change is unusually lengthy and is complex 
                or raises novel regulatory issues, the Commission shall 
                inform the self-regulatory organization of such 
                determination not later than 7 business days after the 
                date of receipt by the Commission and, for the purposes 
                of subparagraph (A), a proposed rule change has not been 
                received by the Commission, if, not later than 21 days 
                after the date of receipt by the Commission, the 
                Commission notifies the self-regulatory organization 
                that such proposed rule change does not comply with the 
                rules of the Commission relating to the required form of 
                a proposed rule change.''.
            (2) Publication.--Section 19(b)(1) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) is amended by 
        striking ``upon'' and inserting ``as soon as practicable after 
        the date of''.

    (c) Effective Date of Proposed Rules.--Section 19(b)(3) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78s(b)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``may take effect'' and inserting 
                ``shall take effect''; and
                    (B) by inserting ``on any person, whether or not the 
                person is a member of the self-regulatory organization'' 
                after ``charge imposed by the self-regulatory 
                organization''; and
            (2) in subparagraph (C)--
                    (A) by amending the second sentence to read as 
                follows: ``At any time <<NOTE: Time period.>>  within 
                the 60-day period beginning on the date of filing of 
                such a proposed rule change in accordance with the 
                provisions of paragraph (1), the Commission summarily 
                may temporarily suspend the change in the rules of the 
                self-regulatory organization made thereby, if it appears 
                to the Commission that such action is necessary or 
                appropriate in the public interest, for the protection 
                of investors, or otherwise in furtherance of the 
                purposes of this title.'';
                    (B) by inserting after the second sentence the 
                following: ``If the Commission takes such action, the 
                Commission shall institute proceedings under paragraph 
                (2)(B) to determine whether the proposed rule should be 
                approved or disapproved.''; and
                    (C) in the third sentence, by striking ``the 
                preceding sentence'' and inserting ``this 
                subparagraph''.

    (d) Conforming Change.--Section 19(b)(4)(D) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78s(b)(4)(D)) is amended to read as 
follows:

[[Page 124 STAT. 1836]]

                    ``(D)(i) <<NOTE: Notification. Deadline.>>  The 
                Commission shall order the temporary suspension of any 
                change in the rules of a clearing agency made by a 
                proposed rule change that has taken effect under 
                paragraph (3), if the appropriate regulatory agency for 
                the clearing agency notifies the Commission not later 
                than 30 days after the date on which the proposed rule 
                change was filed of--
                          ``(I) the determination by the appropriate 
                      regulatory agency that the rules of such clearing 
                      agency, as so changed, may be inconsistent with 
                      the safeguarding of securities or funds in the 
                      custody or control of such clearing agency or for 
                      which it is responsible; and
                          ``(II) the reasons for the determination 
                      described in subclause (I).
                    ``(ii) If the Commission takes action under clause 
                (i), the Commission shall institute proceedings under 
                paragraph (2)(B) to determine if the proposed rule 
                change should be approved or disapproved.''.
SEC. 917. STUDY REGARDING FINANCIAL LITERACY AMONG INVESTORS.

    (a) In General.--The Commission shall conduct a study to identify--
            (1) the existing level of financial literacy among retail 
        investors, including subgroups of investors identified by the 
        Commission;
            (2) methods to improve the timing, content, and format of 
        disclosures to investors with respect to financial 
        intermediaries, investment products, and investment services;
            (3) the most useful and understandable relevant information 
        that retail investors need to make informed financial decisions 
        before engaging a financial intermediary or purchasing an 
        investment product or service that is typically sold to retail 
        investors, including shares of open-end companies, as that term 
        is defined in section 5 of the Investment Company Act of 1940 
        (15 U.S.C. 80a-5) that are registered under section 8 of that 
        Act;
            (4) methods to increase the transparency of expenses and 
        conflicts of interests in transactions involving investment 
        services and products, including shares of open-end companies 
        described in paragraph (3);
            (5) the most effective existing private and public efforts 
        to educate investors; and
            (6) in consultation with the Financial Literacy and 
        Education Commission, a strategy (including, to the extent 
        practicable, measurable goals and objectives) to increase the 
        financial literacy of investors in order to bring about a 
        positive change in investor behavior.

    (b) Report.--Not later than 2 years after the date of enactment of 
this Act, the Commission shall submit a report on the study required 
under subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban Affairs of 
        the Senate; and
            (2) the Committee on Financial Services of the House of 
        Representatives.

[[Page 124 STAT. 1837]]

SEC. 918. STUDY REGARDING MUTUAL FUND ADVERTISING.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study on mutual fund advertising to identify--
            (1) existing and proposed regulatory requirements for open-
        end investment company advertisements;
            (2) current marketing practices for the sale of open-end 
        investment company shares, including the use of past performance 
        data, funds that have merged, and incubator funds;
            (3) the impact of such advertising on consumers; and
            (4) recommendations to improve investor protections in 
        mutual fund advertising and additional information necessary to 
        ensure that investors can make informed financial decisions when 
        purchasing shares.

    (b) Report.--Not later than 18 months after the date of enactment of 
this Act, the Comptroller General of the United States shall submit a 
report on the results of the study conducted under subsection (a) to--
            (1) the Committee on Banking, Housing, and Urban Affairs of 
        the United States Senate; and
            (2) the Committee on Financial Services of the House of 
        Representatives.
SEC. 919. CLARIFICATION OF COMMISSION AUTHORITY TO REQUIRE 
                        INVESTOR DISCLOSURES BEFORE PURCHASE OF 
                        INVESTMENT PRODUCTS AND SERVICES.

    Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is 
amended by adding at the end the following:
    ``(n) Disclosures to Retail Investors.--
            ``(1) In general.--Notwithstanding any other provision of 
        the securities laws, the Commission may issue rules designating 
        documents or information that shall be provided by a broker or 
        dealer to a retail investor before the purchase of an investment 
        product or service by the retail investor.
            ``(2) Considerations.--In developing any rules under 
        paragraph (1), the Commission shall consider whether the rules 
        will promote investor protection, efficiency, competition, and 
        capital formation.
            ``(3) Form and contents of documents and information.--Any 
        documents or information designated under a rule promulgated 
        under paragraph (1) shall--
                    ``(A) be in a summary format; and
                    ``(B) contain clear and concise information about--
                          ``(i) investment objectives, strategies, 
                      costs, and risks; and
                          ``(ii) any compensation or other financial 
                      incentive received by a broker, dealer, or other 
                      intermediary in connection with the purchase of 
                      retail investment products.''.
SEC. 919A. STUDY ON CONFLICTS OF INTEREST.

    (a) In General.--The Comptroller General of the United States shall 
conduct a study--
            (1) to identify and examine potential conflicts of interest 
        that exist between the staffs of the investment banking and 
        equity and fixed income securities analyst functions within the 
        same firm; and

[[Page 124 STAT. 1838]]

            (2) to make recommendations to Congress designed to protect 
        investors in light of such conflicts.

    (b) Considerations.--In conducting the study under subsection (a), 
the Comptroller General shall--
            (1) consider--
                    (A) the potential for investor harm resulting from 
                conflicts, including consideration of the forms of 
                misconduct engaged in by the several securities firms 
                and individuals that entered into the Global Analyst 
                Research Settlements in 2003 (also known as the ``Global 
                Settlement'');
                    (B) the nature and benefits of the undertakings to 
                which those firms agreed in enforcement proceedings, 
                including firewalls between research and investment 
                banking, separate reporting lines, dedicated legal and 
                compliance staffs, allocation of budget, physical 
                separation, compensation, employee performance 
                evaluations, coverage decisions, limitations on 
                soliciting investment banking business, disclosures, 
                transparency, and other measures;
                    (C) whether any such undertakings should be codified 
                and applied permanently to securities firms, or whether 
                the Commission should adopt rules applying any such 
                undertakings to securities firms; and
                    (D) whether to recommend regulatory or legislative 
                measures designed to mitigate possible adverse 
                consequences to investors arising from the conflicts of 
                interest or to enhance investor protection or confidence 
                in the integrity of the securities markets; and
            (2) consult with State attorneys general, State securities 
        officials, the Commission, the Financial Industry Regulatory 
        Authority (``FINRA''), NYSE Regulation, investor advocates, 
        brokers, dealers, retail investors, institutional investors, and 
        academics.

    (c) Report.--The Comptroller General shall submit a report on the 
results of the study required by this section to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives, not later than 18 
months after the date of enactment of this Act.
SEC. 919B. <<NOTE: 15 USC 80b-10 note.>>  STUDY ON IMPROVED 
                          INVESTOR ACCESS TO INFORMATION ON 
                          INVESTMENT ADVISERS AND BROKER-DEALERS.

    (a) Study.--
            (1) <<NOTE: Deadlines.>>  In general.--Not later than 6 
        months after the date of enactment of this Act, the Commission 
        shall complete a study, including recommendations, of ways to 
        improve the access of investors to registration information 
        (including disciplinary actions, regulatory, judicial, and 
        arbitration proceedings, and other information) about registered 
        and previously registered investment advisers, associated 
        persons of investment advisers, brokers and dealers and their 
        associated persons on the existing Central Registration 
        Depository and Investment Adviser Registration Depository 
        systems, as well as identify additional information that should 
        be made publicly available.
            (2) Contents.--The study required by subsection (a) shall 
        include an analysis of the advantages and disadvantages of 
        further centralizing access to the information contained in the 
        2 systems, including--

[[Page 124 STAT. 1839]]

                    (A) identification of those data pertinent to 
                investors; and
                    (B) the identification of the method and format for 
                displaying and publishing such data to enhance 
                accessibility by and utility to investors.

    (b) <<NOTE: Deadlines.>>  Implementation.--Not later than 18 months 
after the date of completion of the study required by subsection (a), 
the Commission shall implement any recommendations of the study.
SEC. 919C. STUDY ON FINANCIAL PLANNERS AND THE USE OF FINANCIAL 
                          DESIGNATIONS.

    (a) <<NOTE: Evaluation. Regulations.>>  In General.--The Comptroller 
General of the United States shall conduct a study to evaluate--
            (1) the effectiveness of State and Federal regulations to 
        protect investors and other consumers from individuals who hold 
        themselves out as financial planners through the use of 
        misleading titles, designations, or marketing materials;
            (2) current State and Federal oversight structure and 
        regulations for financial planners; and
            (3) legal or regulatory gaps in the regulation of financial 
        planners and other individuals who provide or offer to provide 
        financial planning services to consumers.

    (b) Considerations.--In conducting the study required under 
subsection (a), the Comptroller General shall consider--
            (1) the role of financial planners in providing advice 
        regarding the management of financial resources, including 
        investment planning, income tax planning, education planning, 
        retirement planning, estate planning, and risk management;
            (2) whether current regulations at the State and Federal 
        level provide adequate ethical and professional standards for 
        financial planners;
            (3) the possible risk posed to investors and other consumers 
        by individuals who hold themselves out as financial planners or 
        as otherwise providing financial planning services in connection 
        with the sale of financial products, including insurance and 
        securities;
            (4) the possible risk posed to investors and other consumers 
        by individuals who otherwise use titles, designations, or 
        marketing materials in a misleading way in connection with the 
        delivery of financial advice;
            (6) the ability of investors and other consumers to 
        understand licensing requirements and standards of care that 
        apply to individuals who hold themselves out as financial 
        planners or as otherwise providing financial planning services;
            (7) the possible benefits to investors and other consumers 
        of regulation and professional oversight of financial planners; 
        and
            (8) any other consideration that the Comptroller General 
        deems necessary or appropriate to effectively execute the study 
        required under subsection (a).

    (c) Recommendations.--In providing recommendations for the 
appropriate regulation of financial planners and other individuals who 
provide or offer to provide financial planning services, in order to 
protect investors and other consumers of financial planning services, 
the Comptroller General shall consider--

[[Page 124 STAT. 1840]]

            (1) the appropriate structure for regulation of financial 
        planners and individuals providing financial planning services; 
        and
            (2) the appropriate scope of the regulations needed to 
        protect investors and other consumers, including but not limited 
        to the need to establish competency standards, practice 
        standards, ethical guidelines, disciplinary authority, and 
        transparency to investors and other consumers.

    (d) Report.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Comptroller General shall submit a 
        report on the study required under subsection (a) to--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate;
                    (B) the Special Committee on Aging of the Senate; 
                and
                    (C) the Committee on Financial Services of the House 
                of Representatives.
            (2) Content requirements.--The report required under 
        paragraph (1) shall describe the findings and determinations 
        made by the Comptroller General in carrying out the study 
        required under subsection (a), including a description of the 
        considerations, analysis, and government, public, industry, 
        nonprofit and consumer input that the Comptroller General 
        considered to make such findings, conclusions, and legislative, 
        regulatory, or other recommendations.
SEC. 919D. <<NOTE: 15 USC 78d.>>  OMBUDSMAN.

    Section 4(g) of the Securities Exchange Act of 1934, as added by 
section 914, is amended by adding at the end the following:
            ``(8) Ombudsman.--
                    ``(A) <<NOTE: Deadline.>>  Appointment.--Not later 
                than 180 days after the date on which the first Investor 
                Advocate is appointed under paragraph (2)(A)(i), the 
                Investor Advocate shall appoint an Ombudsman, who shall 
                report directly to the Investor Advocate.
                    ``(B) Duties.--The Ombudsman appointed under 
                subparagraph (A) shall--
                          ``(i) act as a liaison between the Commission 
                      and any retail investor in resolving problems that 
                      retail investors may have with the Commission or 
                      with self-regulatory organizations;
                          ``(ii) review and make recommendations 
                      regarding policies and procedures to encourage 
                      persons to present questions to the Investor 
                      Advocate regarding compliance with the securities 
                      laws; and
                          ``(iii) establish safeguards to maintain the 
                      confidentiality of communications between the 
                      persons described in clause (ii) and the 
                      Ombudsman.
                    ``(C) Limitation.--In carrying out the duties of the 
                Ombudsman under subparagraph (B), the Ombudsman shall 
                utilize personnel of the Commission to the extent 
                practicable. Nothing in this paragraph shall be 
                construed as replacing, altering, or diminishing the 
                activities of any ombudsman or similar office of any 
                other agency.
                    ``(D) Report.--The Ombudsman shall submit a 
                semiannual report to the Investor Advocate that 
                describes the

[[Page 124 STAT. 1841]]

                activities and evaluates the effectiveness of the 
                Ombudsman during the preceding year. The Investor 
                Advocate shall include the reports required under this 
                section in the reports required to be submitted by the 
                Inspector Advocate under paragraph (6).''.

       Subtitle B--Increasing Regulatory Enforcement and Remedies

SEC. 921. AUTHORITY TO RESTRICT MANDATORY PRE-DISPUTE ARBITRATION.

    (a) Amendment to Securities Exchange Act of 1934.--Section 15 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o), as amended by this 
title, is further amended by adding at the end the following new 
subsection:
    ``(o) Authority to Restrict Mandatory Pre-dispute Arbitration.--The 
Commission, by rule, may prohibit, or impose conditions or limitations 
on the use of, agreements that require customers or clients of any 
broker, dealer, or municipal securities dealer to arbitrate any future 
dispute between them arising under the Federal securities laws, the 
rules and regulations thereunder, or the rules of a self-regulatory 
organization if it finds that such prohibition, imposition of 
conditions, or limitations are in the public interest and for the 
protection of investors.''.
    (b) Amendment to Investment Advisers Act of 1940.--Section 205 of 
the Investment Advisers Act of 1940 (15 U.S.C. 80b-5) is amended by 
adding at the end the following new subsection:
    ``(f) Authority to Restrict Mandatory Pre-dispute Arbitration.--The 
Commission, by rule, may prohibit, or impose conditions or limitations 
on the use of, agreements that require customers or clients of any 
investment adviser to arbitrate any future dispute between them arising 
under the Federal securities laws, the rules and regulations thereunder, 
or the rules of a self-regulatory organization if it finds that such 
prohibition, imposition of conditions, or limitations are in the public 
interest and for the protection of investors.''.
SEC. 922. WHISTLEBLOWER PROTECTION.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 21E the following:
``SEC. 21F. <<NOTE: 15 USC 78u-6.>>  SECURITIES WHISTLEBLOWER 
                        INCENTIVES AND PROTECTION.

    ``(a) Definitions.--In this section the following definitions shall 
apply:
            ``(1) Covered judicial or administrative action.--The term 
        `covered judicial or administrative action' means any judicial 
        or administrative action brought by the Commission under the 
        securities laws that results in monetary sanctions exceeding 
        $1,000,000.
            ``(2) Fund.--The term `Fund' means the Securities and 
        Exchange Commission Investor Protection Fund.
            ``(3) Original information.--The term `original information' 
        means information that--

[[Page 124 STAT. 1842]]

                    ``(A) is derived from the independent knowledge or 
                analysis of a whistleblower;
                    ``(B) is not known to the Commission from any other 
                source, unless the whistleblower is the original source 
                of the information; and
                    ``(C) is not exclusively derived from an allegation 
                made in a judicial or administrative hearing, in a 
                governmental report, hearing, audit, or investigation, 
                or from the news media, unless the whistleblower is a 
                source of the information.
            ``(4) Monetary sanctions.--The term `monetary sanctions', 
        when used with respect to any judicial or administrative action, 
        means--
                    ``(A) any monies, including penalties, disgorgement, 
                and interest, ordered to be paid; and
                    ``(B) any monies deposited into a disgorgement fund 
                or other fund pursuant to section 308(b) of the 
                Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(b)), as a 
                result of such action or any settlement of such action.
            ``(5) Related action.--The term `related action', when used 
        with respect to any judicial or administrative action brought by 
        the Commission under the securities laws, means any judicial or 
        administrative action brought by an entity described in 
        subclauses (I) through (IV) of subsection (h)(2)(D)(i) that is 
        based upon the original information provided by a whistleblower 
        pursuant to subsection (a) that led to the successful 
        enforcement of the Commission action.
            ``(6) Whistleblower.--The term `whistleblower' means any 
        individual who provides, or 2 or more individuals acting jointly 
        who provide, information relating to a violation of the 
        securities laws to the Commission, in a manner established, by 
        rule or regulation, by the Commission.

    ``(b) Awards.--
            ``(1) In general.--In any covered judicial or administrative 
        action, or related action, the Commission, under regulations 
        prescribed by the Commission and subject to subsection (c), 
        shall pay an award or awards to 1 or more whistleblowers who 
        voluntarily provided original information to the Commission that 
        led to the successful enforcement of the covered judicial or 
        administrative action, or related action, in an aggregate amount 
        equal to--
                    ``(A) not less than 10 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions; and
                    ``(B) not more than 30 percent, in total, of what 
                has been collected of the monetary sanctions imposed in 
                the action or related actions.
            ``(2) Payment of awards.--Any amount paid under paragraph 
        (1) shall be paid from the Fund.

    ``(c) Determination of Amount of Award; Denial of Award.--
            ``(1) Determination of amount of award.--
                    ``(A) Discretion.--The determination of the amount 
                of an award made under subsection (b) shall be in the 
                discretion of the Commission.
                    ``(B) Criteria.--In determining the amount of an 
                award made under subsection (b), the Commission--

[[Page 124 STAT. 1843]]

                          ``(i) shall take into consideration--
                                    ``(I) the significance of the 
                                information provided by the 
                                whistleblower to the success of the 
                                covered judicial or administrative 
                                action;
                                    ``(II) the degree of assistance 
                                provided by the whistleblower and any 
                                legal representative of the 
                                whistleblower in a covered judicial or 
                                administrative action;
                                    ``(III) the programmatic interest of 
                                the Commission in deterring violations 
                                of the securities laws by making awards 
                                to whistleblowers who provide 
                                information that lead to the successful 
                                enforcement of such laws; and
                                    ``(IV) such additional relevant 
                                factors as the Commission may establish 
                                by rule or regulation; and
                          ``(ii) shall not take into consideration the 
                      balance of the Fund.
            ``(2) Denial of award.--No award under subsection (b) shall 
        be made--
                    ``(A) to any whistleblower who is, or was at the 
                time the whistleblower acquired the original information 
                submitted to the Commission, a member, officer, or 
                employee of--
                          ``(i) an appropriate regulatory agency;
                          ``(ii) the Department of Justice;
                          ``(iii) a self-regulatory organization;
                          ``(iv) the Public Company Accounting Oversight 
                      Board; or
                          ``(v) a law enforcement organization;
                    ``(B) to any whistleblower who is convicted of a 
                criminal violation related to the judicial or 
                administrative action for which the whistleblower 
                otherwise could receive an award under this section;
                    ``(C) to any whistleblower who gains the information 
                through the performance of an audit of financial 
                statements required under the securities laws and for 
                whom such submission would be contrary to the 
                requirements of section 10A of the Securities Exchange 
                Act of 1934 (15 U.S.C. 78j-1); or
                    ``(D) to any whistleblower who fails to submit 
                information to the Commission in such form as the 
                Commission may, by rule, require.

    ``(d) Representation.--
            ``(1) Permitted representation.--Any whistleblower who makes 
        a claim for an award under subsection (b) may be represented by 
        counsel.
            ``(2) Required representation.--
                    ``(A) In general.--Any whistleblower who anonymously 
                makes a claim for an award under subsection (b) shall be 
                represented by counsel if the whistleblower anonymously 
                submits the information upon which the claim is based.
                    ``(B) Disclosure of identity.--Prior to the payment 
                of an award, a whistleblower shall disclose the identity 
                of the whistleblower and provide such other information

[[Page 124 STAT. 1844]]

                as the Commission may require, directly or through 
                counsel for the whistleblower.

    ``(e) No Contract Necessary.--No contract with the Commission is 
necessary for any whistleblower to receive an award under subsection 
(b), unless otherwise required by the Commission by rule or regulation.
    ``(f) <<NOTE: Determination. Deadline.>>  Appeals.--Any 
determination made under this section, including whether, to whom, or in 
what amount to make awards, shall be in the discretion of the 
Commission. Any such determination, except the determination of the 
amount of an award if the award was made in accordance with subsection 
(b), may be appealed to the appropriate court of appeals of the United 
States not more than 30 days after the determination is issued by the 
Commission. The court shall <<NOTE: Courts.>>  review the determination 
made by the Commission in accordance with section 706 of title 5, United 
States Code.

    ``(g) Investor Protection Fund.--
            ``(1) Fund established.--There is established in the 
        Treasury of the United States a fund to be known as the 
        `Securities and Exchange Commission Investor Protection Fund'.
            ``(2) Use of fund.--The Fund shall be available to the 
        Commission, without further appropriation or fiscal year 
        limitation, for--
                    ``(A) paying awards to whistleblowers as provided in 
                subsection (b); and
                    ``(B) funding the activities of the Inspector 
                General of the Commission under section 4(i).
            ``(3) Deposits and credits.--
                    ``(A)  In general.--There shall be deposited into or 
                credited to the Fund an amount equal to--
                          ``(i) any monetary sanction collected by the 
                      Commission in any judicial or administrative 
                      action brought by the Commission under the 
                      securities laws that is not added to a 
                      disgorgement fund or other fund under section 308 
                      of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246) 
                      or otherwise distributed to victims of a violation 
                      of the securities laws, or the rules and 
                      regulations thereunder, underlying such action, 
                      unless the balance of the Fund at the time the 
                      monetary sanction is collected exceeds 
                      $300,000,000;
                          ``(ii) any monetary sanction added to a 
                      disgorgement fund or other fund under section 308 
                      of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246) 
                      that is not distributed to the victims for whom 
                      the Fund was established, unless the balance of 
                      the disgorgement fund at the time the 
                      determination is made not to distribute the 
                      monetary sanction to such victims exceeds 
                      $200,000,000; and
                          ``(iii) all income from investments made under 
                      paragraph (4).
                    ``(B) Additional amounts.--If the amounts deposited 
                into or credited to the Fund under subparagraph (A) are 
                not sufficient to satisfy an award made under subsection 
                (b), there shall be deposited into or credited to the 
                Fund an amount equal to the unsatisfied portion of the 
                award from any monetary sanction collected by the 
                Commission

[[Page 124 STAT. 1845]]

                in the covered judicial or administrative action on 
                which the award is based.
            ``(4) Investments.--
                    ``(A) Amounts in fund may be invested.--The 
                Commission may request the Secretary of the Treasury to 
                invest the portion of the Fund that is not, in the 
                discretion of the Commission, required to meet the 
                current needs of the Fund.
                    ``(B) Eligible investments.--Investments shall be 
                made by the Secretary of the Treasury in obligations of 
                the United States or obligations that are guaranteed as 
                to principal and interest by the United States, with 
                maturities suitable to the needs of the Fund as 
                determined by the Commission on the record.
                    ``(C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, any 
                obligations held in the Fund shall be credited to the 
                Fund.
            ``(5) Reports to congress.--Not later than October 30 of 
        each fiscal year beginning after the date of enactment of this 
        subsection, the Commission shall submit to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate, and the 
        Committee on Financial Services of the House of Representatives 
        a report on--
                    ``(A) the whistleblower award program, established 
                under this section, including--
                          ``(i) a description of the number of awards 
                      granted; and
                          ``(ii) the types of cases in which awards were 
                      granted during the preceding fiscal year;
                    ``(B) the balance of the Fund at the beginning of 
                the preceding fiscal year;
                    ``(C) the amounts deposited into or credited to the 
                Fund during the preceding fiscal year;
                    ``(D) the amount of earnings on investments made 
                under paragraph (4) during the preceding fiscal year;
                    ``(E) the amount paid from the Fund during the 
                preceding fiscal year to whistleblowers pursuant to 
                subsection (b);
                    ``(F) the balance of the Fund at the end of the 
                preceding fiscal year; and
                    ``(G) a complete set of audited financial 
                statements, including--
                          ``(i) a balance sheet;
                          ``(ii) income statement; and
                          ``(iii) cash flow analysis.

    ``(h) Protection of Whistleblowers.--
            ``(1) Prohibition against retaliation.--
                    ``(A) In general.--No employer may discharge, 
                demote, suspend, threaten, harass, directly or 
                indirectly, or in any other manner discriminate against, 
                a whistleblower in the terms and conditions of 
                employment because of any lawful act done by the 
                whistleblower--
                          ``(i) in providing information to the 
                      Commission in accordance with this section;
                          ``(ii) in initiating, testifying in, or 
                      assisting in any investigation or judicial or 
                      administrative action of

[[Page 124 STAT. 1846]]

                      the Commission based upon or related to such 
                      information; or
                          ``(iii) in making disclosures that are 
                      required or protected under the Sarbanes-Oxley Act 
                      of 2002 (15 U.S.C. 7201 et seq.), the Securities 
                      Exchange Act of 1934 (15 U.S.C. 78a et seq.), 
                      including section 10A(m) of such Act (15 U.S.C. 
                      78f(m)), section 1513(e) of title 18, United 
                      States Code, and any other law, rule, or 
                      regulation subject to the jurisdiction of the 
                      Commission.
                    ``(B) Enforcement.--
                          ``(i) Cause of action.--An individual who 
                      alleges discharge or other discrimination in 
                      violation of subparagraph (A) may bring an action 
                      under this subsection in the appropriate district 
                      court of the United States for the relief provided 
                      in subparagraph (C).
                          ``(ii) Subpoenas.--A subpoena requiring the 
                      attendance of a witness at a trial or hearing 
                      conducted under this section may be served at any 
                      place in the United States.
                          ``(iii) Statute of limitations.--
                                    ``(I) In general.--An action under 
                                this subsection may not be brought--
                                            ``(aa) more than 6 years 
                                        after the date on which the 
                                        violation of subparagraph (A) 
                                        occurred; or
                                            ``(bb) more than 3 years 
                                        after the date when facts 
                                        material to the right of action 
                                        are known or reasonably should 
                                        have been known by the employee 
                                        alleging a violation of 
                                        subparagraph (A).
                                    ``(II) Required action within 10 
                                years.--Notwithstanding subclause (I), 
                                an action under this subsection may not 
                                in any circumstance be brought more than 
                                10 years after the date on which the 
                                violation occurs.
                    ``(C) Relief.--Relief for an individual prevailing 
                in an action brought under subparagraph (B) shall 
                include--
                          ``(i) reinstatement with the same seniority 
                      status that the individual would have had, but for 
                      the discrimination;
                          ``(ii) 2 times the amount of back pay 
                      otherwise owed to the individual, with interest; 
                      and
                          ``(iii) compensation for litigation costs, 
                      expert witness fees, and reasonable attorneys' 
                      fees.
            ``(2) Confidentiality.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), the Commission and any 
                officer or employee of the Commission shall not disclose 
                any information, including information provided by a 
                whistleblower to the Commission, which could reasonably 
                be expected to reveal the identity of a whistleblower, 
                except in accordance with the provisions of section 552a 
                of title 5, United States Code, unless and until 
                required to be disclosed to a defendant or respondent in 
                connection with a public proceeding instituted by the 
                Commission or any entity described in subparagraph (C). 
                For purposes of section

[[Page 124 STAT. 1847]]

                552 of title 5, United States Code, this paragraph shall 
                be considered a statute described in subsection 
                (b)(3)(B) of such section.
                    ``(B) Exempted statute.--For purposes of section 552 
                of title 5, United States Code, this paragraph shall be 
                considered a statute described in subsection (b)(3)(B) 
                of such section 552.
                    ``(C) Rule of construction.--Nothing in this section 
                is intended to limit, or shall be construed to limit, 
                the ability of the Attorney General to present such 
                evidence to a grand jury or to share such evidence with 
                potential witnesses or defendants in the course of an 
                ongoing criminal investigation.
                    ``(D) Availability to government agencies.--
                          ``(i) In general.--Without the loss of its 
                      status as confidential in the hands of the 
                      Commission, all information referred to in 
                      subparagraph (A) may, in the discretion of the 
                      Commission, when determined by the Commission to 
                      be necessary to accomplish the purposes of this 
                      Act and to protect investors, be made available 
                      to--
                                    ``(I) the Attorney General of the 
                                United States;
                                    ``(II) an appropriate regulatory 
                                authority;
                                    ``(III) a self-regulatory 
                                organization;
                                    ``(IV) a State attorney general in 
                                connection with any criminal 
                                investigation;
                                    ``(V) any appropriate State 
                                regulatory authority;
                                    ``(VI) the Public Company Accounting 
                                Oversight Board;
                                    ``(VII) a foreign securities 
                                authority; and
                                    ``(VIII) a foreign law enforcement 
                                authority.
                          ``(ii) Confidentiality.--
                                    ``(I) In general.--Each of the 
                                entities described in subclauses (I) 
                                through (VI) of clause (i) shall 
                                maintain such information as 
                                confidential in accordance with the 
                                requirements established under 
                                subparagraph (A).
                                    ``(II) Foreign authorities.--Each of 
                                the entities described in subclauses 
                                (VII) and (VIII) of clause (i) shall 
                                maintain such information in accordance 
                                with such assurances of confidentiality 
                                as the Commission determines 
                                appropriate.
            ``(3) Rights retained.--Nothing in this section shall be 
        deemed to diminish the rights, privileges, or remedies of any 
        whistleblower under any Federal or State law, or under any 
        collective bargaining agreement.

    ``(i) Provision of False Information.--A whistleblower shall not be 
entitled to an award under this section if the whistleblower--
            ``(1) knowingly and willfully makes any false, fictitious, 
        or fraudulent statement or representation; or
            ``(2) uses any false writing or document knowing the writing 
        or document contains any false, fictitious, or fraudulent 
        statement or entry.

    ``(j) Rulemaking Authority.--The Commission shall have the authority 
to issue such rules and regulations as may be necessary

[[Page 124 STAT. 1848]]

or appropriate to implement the provisions of this section consistent 
with the purposes of this section.''.
    (b) Protection for Employees of Nationally Recognized Statistical 
Rating Organizations.--Section 1514A(a) of title 18, United States Code, 
is amended--
            (1) by inserting ``or nationally recognized statistical 
        rating organization (as defined in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c),'' after 
        ``78o(d)),''; and
            (2) by inserting ``or nationally recognized statistical 
        rating organization'' after ``such company''.

    (c) Section 1514A of Title 18, United States Code.--
            (1) Statute of limitations; jury trial.--Section 1514A(b)(2) 
        of title 18, United States Code, is amended--
                    (A) in subparagraph (D)--
                          (i) by striking ``90'' and inserting ``180''; 
                      and
                          (ii) by striking the period at the end and 
                      inserting ``, or after the date on which the 
                      employee became aware of the violation.''; and
                    (B) by adding at the end the following:
                    ``(E) Jury trial.--A party to an action brought 
                under paragraph (1)(B) shall be entitled to trial by 
                jury.''.
            (2) Private securities litigation witnesses; 
        nonenforceability; information.--Section 1514A of title 18, 
        United States Code, is amended by adding at the end the 
        following:

    ``(e) Nonenforceability of Certain Provisions Waiving Rights and 
Remedies or Requiring Arbitration of Disputes.--
            ``(1) Waiver of rights and remedies.--The rights and 
        remedies provided for in this section may not be waived by any 
        agreement, policy form, or condition of employment, including by 
        a predispute arbitration agreement.
            ``(2) Predispute arbitration agreements.--No predispute 
        arbitration agreement shall be valid or enforceable, if the 
        agreement requires arbitration of a dispute arising under this 
        section.''.

    (d) Study of Whistleblower Protection Program.--
            (1) Study.--The Inspector General of the Commission shall 
        conduct a study of the whistleblower protections established 
        under the amendments made by this section, including--
                    (A) whether the final rules and regulation issued 
                under the amendments made by this section have made the 
                whistleblower protection program (referred to in this 
                subsection as the ``program'') clearly defined and user-
                friendly;
                    (B) whether the program is promoted on the website 
                of the Commission and has been widely publicized;
                    (C) whether the Commission is prompt in--
                          (i) responding to--
                                    (I) information provided by 
                                whistleblowers; and
                                    (II) applications for awards filed 
                                by whistleblowers;
                          (ii) updating whistleblowers about the status 
                      of their applications; and
                          (iii) otherwise communicating with the 
                      interested parties;
                    (D) whether the minimum and maximum reward levels 
                are adequate to entice whistleblowers to come forward 
                with

[[Page 124 STAT. 1849]]

                information and whether the reward levels are so high as 
                to encourage illegitimate whistleblower claims;
                    (E) whether the appeals process has been unduly 
                burdensome for the Commission;
                    (F) whether the funding mechanism for the Investor 
                Protection Fund is adequate;
                    (G) whether, in the interest of protecting investors 
                and identifying and preventing fraud, it would be useful 
                for Congress to consider empowering whistleblowers or 
                other individuals, who have already attempted to pursue 
                the case through the Commission, to have a private right 
                of action to bring suit based on the facts of the same 
                case, on behalf of the Government and themselves, 
                against persons who have committee securities fraud;
                    (H)(i) whether the exemption under section 552(b)(3) 
                of title 5 (known as the Freedom of Information Act) 
                established in section 21F(h)(2)(A) of the Securities 
                Exchange Act of 1934, as added by this Act, aids 
                whistleblowers in disclosing information to the 
                Commission;
                    (ii) what impact the exemption described in clause 
                (i) has had on the ability of the public to access 
                information about the regulation and enforcement by the 
                Commission of securities; and
                    (iii) any recommendations on whether the exemption 
                described in clause (i) should remain in effect; and
                    (I) such other matters as the Inspector General 
                deems appropriate.
            (2) Report.--Not later than 30 months after the date of 
        enactment of this Act, the Inspector General shall--
                    (A) submit a report on the findings of the study 
                required under paragraph (1) to the Committee on 
                Banking, Housing, and Urban Affairs of the Senate and 
                the Committee on Financial Services of the House; and
                    (B) <<NOTE: Public information. Web posting.>>  make 
                the report described in subparagraph (A) available to 
                the public through publication of the report on the 
                website of the Commission.
SEC. 923. CONFORMING AMENDMENTS FOR WHISTLEBLOWER PROTECTION.

    (a) In General.--
            (1) Securities act of 1933.--Section 20(d)(3)(A) of the 
        Securities Act of 1933 (15 U.S.C. 77t(d)(3)(A)) is amended by 
        inserting ``and section 21F of the Securities Exchange Act of 
        1934'' after ``the Sarbanes-Oxley Act of 2002''.
            (2) Investment company act of 1940.--Section 42(e)(3)(A) of 
        the Investment Company Act of 1940 (15 U.S.C. 80a-41(e)(3)(A)) 
        is amended by inserting ``and section 21F of the Securities 
        Exchange Act of 1934'' after ``the Sarbanes-Oxley Act of 2002''.
            (3) Investment advisers act of 1940.--Section 209(e)(3)(A) 
        of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
        9(e)(3)(A)) is amended by inserting ``and section 21F of the 
        Securities Exchange Act of 1934'' after ``the Sarbanes-Oxley Act 
        of 2002''.

    (b) Securities Exchange Act.--
            (1) Section 21.--Section 21(d)(3)(C)(i) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(C)(i)) is amended

[[Page 124 STAT. 1850]]

        by inserting ``and section 21F of this title'' after ``the 
        Sarbanes-Oxley Act of 2002''.
            (2) Section 21a.--Section 21A of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78u-1) is amended--
                    (A) in subsection (d)(1) by--
                          (i) striking ``(subject to subsection (e))''; 
                      and
                          (ii) inserting ``and section 21F of this 
                      title'' after ``the Sarbanes-Oxley Act of 2002'';
                    (B) by striking subsection (e); and
                    (C) by redesignating subsections (f) and (g) as 
                subsections (e) and (f), respectively.
SEC. 924. <<NOTE: 15 USC 78u-7.>>  IMPLEMENTATION AND TRANSITION 
                        PROVISIONS FOR WHISTLEBLOWER PROTECTION.

    (a) <<NOTE: Deadline.>>  Implementing Rules.--The Commission shall 
issue final regulations implementing the provisions of section 21F of 
the Securities Exchange Act of 1934, as added by this subtitle, not 
later than 270 days after the date of enactment of this Act.

    (b) Original Information.--Information provided to the Commission in 
writing by a whistleblower shall not lose the status of original 
information (as defined in section 21F(a)(3) of the Securities Exchange 
Act of 1934, as added by this subtitle) solely because the whistleblower 
provided the information prior to the effective date of the regulations, 
if the information is provided by the whistleblower after the date of 
enactment of this subtitle.
    (c) Awards.--A whistleblower may receive an award pursuant to 
section 21F of the Securities Exchange Act of 1934, as added by this 
subtitle, regardless of whether any violation of a provision of the 
securities laws, or a rule or regulation thereunder, underlying the 
judicial or administrative action upon which the award is based, 
occurred prior to the date of enactment of this subtitle.
    (d) <<NOTE: Establishment.>>  Administration and Enforcement.--The 
Securities and Exchange Commission shall establish a separate office 
within the Commission to administer and enforce the provisions of 
section 21F of the Securities Exchange Act of 1934 (as add by section 
922(a)). <<NOTE: Reports. Deadline.>>  Such office shall report annually 
to the Committee on Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the House of Representatives 
on its activities, whistleblower complaints, and the response of the 
Commission to such complaints.
SEC. 925. COLLATERAL BARS.

    (a) Securities Exchange Act of 1934.--
            (1) Section 15.--Section 15(b)(6)(A) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o(b)(6)(A)) is amended by 
        striking ``12 months, or bar such person from being associated 
        with a broker or dealer,'' and inserting ``12 months, or bar any 
        such person from being associated with a broker, dealer, 
        investment adviser, municipal securities dealer, municipal 
        advisor, transfer agent, or nationally recognized statistical 
        rating organization,''.
            (2) Section 15b.--Section 15B(c)(4) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o-4(c)(4)) is amended by 
        striking ``twelve months or bar any such person from being 
        associated with a municipal securities dealer,'' and inserting 
        ``12 months or bar any such person from being associated with a 
        broker, dealer, investment adviser, municipal securities

[[Page 124 STAT. 1851]]

        dealer, municipal advisor, transfer agent, or nationally 
        recognized statistical rating organization,''.
            (3) Section 17a.--Section 17A(c)(4)(C) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78q-1(c)(4)(C)) is amended by 
        striking ``twelve months or bar any such person from being 
        associated with the transfer agent,'' and inserting ``12 months 
        or bar any such person from being associated with any transfer 
        agent, broker, dealer, investment adviser, municipal securities 
        dealer, municipal advisor, or nationally recognized statistical 
        rating organization,''.

    (b) Investment Advisers Act of 1940.--Section 203(f) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is amended by 
striking ``twelve months or bar any such person from being associated 
with an investment adviser,'' and inserting ``12 months or bar any such 
person from being associated with an investment adviser, broker, dealer, 
municipal securities dealer, municipal advisor, transfer agent, or 
nationally recognized statistical rating organization,''.
SEC. 926. <<NOTE: 15 USC 77d note.>>  DISQUALIFYING FELONS AND 
                        OTHER ``BAD ACTORS'' FROM REGULATION D 
                        OFFERINGS.

    Not later <<NOTE: Deadline.>>  than 1 year after the date of 
enactment of this Act, the Commission shall issue rules for the 
disqualification of offerings and sales of securities made under section 
230.506 of title 17, Code of Federal Regulations, that--
            (1) are substantially similar to the provisions of section 
        230.262 of title 17, Code of Federal Regulations, or any 
        successor thereto; and
            (2) disqualify any offering or sale of securities by a 
        person that--
                    (A) is subject to a final order of a State 
                securities commission (or an agency or officer of a 
                State performing like functions), a State authority that 
                supervises or examines banks, savings associations, or 
                credit unions, a State insurance commission (or an 
                agency or officer of a State performing like functions), 
                an appropriate Federal banking agency, or the National 
                Credit Union Administration, that--
                          (i) bars the person from--
                                    (I) association with an entity 
                                regulated by such commission, authority, 
                                agency, or officer;
                                    (II) engaging in the business of 
                                securities, insurance, or banking; or
                                    (III) engaging in savings 
                                association or credit union activities; 
                                or
                          (ii) constitutes a final order based on a 
                      violation of any law or regulation that prohibits 
                      fraudulent, manipulative, or deceptive conduct 
                      within the 10-year period ending on the date of 
                      the filing of the offer or sale; or
                    (B) has been convicted of any felony or misdemeanor 
                in connection with the purchase or sale of any security 
                or involving the making of any false filing with the 
                Commission.

[[Page 124 STAT. 1852]]

SEC. 927. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

    Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78cc(a)) is amended by striking ``an exchange required thereby'' and 
inserting ``a self-regulatory organization,''.
SEC. 928. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT 
                        ADVISERS ACT OF 1940 DOES NOT APPLY TO 
                        STATE-REGISTERED ADVISERS.

    Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-5(a)) is amended, in the matter preceding paragraph (1)--
            (1) by striking ``, unless exempt from registration pursuant 
        to section 203(b),'' and inserting ``registered or required to 
        be registered with the Commission'';
            (2) by striking ``make use of the mails or any means or 
        instrumentality of interstate commerce, directly or indirectly, 
        to''; and
            (3) by striking ``to'' after ``in any way''.
SEC. 929. UNLAWFUL MARGIN LENDING.

    Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
78g(c)(1)(A)) is amended by striking ``; and'' and inserting ``; or''.
SEC. 929A. PROTECTION FOR EMPLOYEES OF SUBSIDIARIES AND AFFILIATES 
                          OF PUBLICLY TRADED COMPANIES.

    Section 1514A of title 18, United States Code, is amended by 
inserting ``including any subsidiary or affiliate whose financial 
information is included in the consolidated financial statements of such 
company'' after ``the Securities Exchange Act of 1934 (15 U.S.C. 
78o(d))''.
SEC. 929B. FAIR FUND AMENDMENTS.

    Section 308 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7246(a)) is 
amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a) Civil Penalties to Be Used for the Relief of Victims.--If, in 
any judicial or administrative action brought by the Commission under 
the securities laws, the Commission obtains a civil penalty against any 
person for a violation of such laws, or such person agrees, in 
settlement of any such action, to such civil penalty, the amount of such 
civil penalty shall, on the motion or at the direction of the 
Commission, be added to and become part of a disgorgement fund or other 
fund established for the benefit of the victims of such violation.'';
            (2) in subsection (b)--
                    (A) by striking ``for a disgorgement fund described 
                in subsection (a)'' and inserting ``for a disgorgement 
                fund or other fund described in subsection (a)''; and
                    (B) by striking ``in the disgorgement fund'' and 
                inserting ``in such fund''; and
            (3) by striking subsection (e).
SEC. 929C. INCREASING THE BORROWING LIMIT ON TREASURY LOANS.

    Section 4(h) of the Securities Investor Protection Act of 1970 (15 
U.S.C. 78ddd(h)) is amended in the first sentence, by striking 
``$1,000,000,000'' and inserting ``$2,500,000,000''.

[[Page 124 STAT. 1853]]

SEC. 929D. LOST AND STOLEN SECURITIES.

    Section 17(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
78q(f)(1)) is amended--
            (1) in subparagraph (A), by striking ``missing, lost, 
        counterfeit, or stolen securities'' and inserting ``securities 
        that are missing, lost, counterfeit, stolen, or cancelled''; and
            (2) in subparagraph (B), by striking ``or stolen'' and 
        inserting ``stolen, cancelled, or reported in such other manner 
        as the Commission, by rule, may prescribe''.
SEC. 929E. NATIONWIDE SERVICE OF SUBPOENAS.

    (a) Securities Act of 1933.--Section 22(a) of the Securities Act of 
1933 (15 U.S.C. 77v(a)) is amended by inserting after the second 
sentence the following: ``In any action or proceeding instituted by the 
Commission under this title in a United States district court for any 
judicial district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or both) at a 
hearing or trial may be served at any place within the United States. 
Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not 
apply to a subpoena issued under the preceding sentence.''.
    (b) Securities Exchange Act of 1934.--Section 27 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the 
third sentence the following: ``In any action or proceeding instituted 
by the Commission under this title in a United States district court for 
any judicial district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or both) at a 
hearing or trial may be served at any place within the United States. 
Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not 
apply to a subpoena issued under the preceding sentence.''.
    (c) Investment Company Act of 1940.--Section 44 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after the 
fourth sentence the following: ``In any action or proceeding instituted 
by the Commission under this title in a United States district court for 
any judicial district, a subpoena issued to compel the attendance of a 
witness or the production of documents or tangible things (or both) at a 
hearing or trial may be served at any place within the United States. 
Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil Procedure shall not 
apply to a subpoena issued under the preceding sentence.''.
    (d) Investment Advisers Act of 1940.--Section 214 of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after 
the third sentence the following: ``In any action or proceeding 
instituted by the Commission under this title in a United States 
district court for any judicial district, a subpoena issued to compel 
the attendance of a witness or the production of documents or tangible 
things (or both) at a hearing or trial may be served at any place within 
the United States. Rule 45(c)(3)(A)(ii) of the Federal Rules of Civil 
Procedure shall not apply to a subpoena issued under the preceding 
sentence.''.
SEC. 929F. FORMERLY ASSOCIATED PERSONS.

    (a) Member or Employee of the Municipal Securities Rulemaking 
Board.--Section 15B(c)(8) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(c)(8)) is amended by striking ``any member

[[Page 124 STAT. 1854]]

or employee'' and inserting ``any person who is, or at the time of the 
alleged violation or abuse was, a member or employee''.
    (b) Person Associated With a Government Securities Broker or 
Dealer.--Section 15C(c) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-5(c)) is amended--
            (1) in paragraph (1)(C), by striking ``any person 
        associated, or seeking to become associated,'' and inserting 
        ``any person who is, or at the time of the alleged misconduct 
        was, associated or seeking to become associated''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by inserting ``, seeking to 
                become associated, or, at the time of the alleged 
                misconduct, associated or seeking to become associated'' 
                after ``any person associated''; and
                    (B) in subparagraph (B), by inserting ``, seeking to 
                become associated, or, at the time of the alleged 
                misconduct, associated or seeking to become associated'' 
                after ``any person associated''.

    (c) Person Associated With a Member of a National Securities 
Exchange or Registered Securities Association.--Section 21(a)(1) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended, in the 
first sentence, by inserting ``, or, as to any act or practice, or 
omission to act, while associated with a member, formerly associated'' 
after ``member or a person associated''.
    (d) Participant of a Registered Clearing Agency.--Section 21(a)(1) 
of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended, 
in the first sentence, by inserting ``or, as to any act or practice, or 
omission to act, while a participant, was a participant,'' after ``in 
which such person is a participant,''.
    (e) Officer or Director of a Self-regulatory Organization.--Section 
19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4)) is 
amended--
            (1) by striking ``any officer or director'' and inserting 
        ``any person who is, or at the time of the alleged misconduct 
        was, an officer or director''; and
            (2) by striking ``such officer or director'' and inserting 
        ``such person''.

    (f) Officer or Director of an Investment Company.--Section 36(a) of 
the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--
            (1) by striking ``a person serving or acting'' and inserting 
        ``a person who is, or at the time of the alleged misconduct was, 
        serving or acting''; and
            (2) by striking ``such person so serves or acts'' and 
        inserting ``such person so serves or acts, or at the time of the 
        alleged misconduct, so served or acted''.

    (g) Person Associated With a Public Accounting Firm.--
            (1) Sarbanes-oxley act of 2002 amendment.--Section 2(a)(9) 
        of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(9)) is amended 
        by adding at the end the following:
                    ``(C) <<NOTE: Applicability.>>  Investigative and 
                enforcement authority.--For purposes of sections 3(c), 
                101(c), 105, and 107(c) and the rules of the Board and 
                Commission issued thereunder, except to the extent 
                specifically excepted by such rules, the terms defined 
                in subparagraph (A) shall include any

[[Page 124 STAT. 1855]]

                person associated, seeking to become associated, or 
                formerly associated with a public accounting firm, 
                except that--
                          ``(i) the authority to conduct an 
                      investigation of such person under section 105(b) 
                      shall apply only with respect to any act or 
                      practice, or omission to act, by the person while 
                      such person was associated or seeking to become 
                      associated with a registered public accounting 
                      firm; and
                          ``(ii) the authority to commence a 
                      disciplinary proceeding under section 105(c)(1), 
                      or impose sanctions under section 105(c)(4), 
                      against such person shall apply only with respect 
                      to--
                                    ``(I) conduct occurring while such 
                                person was associated or seeking to 
                                become associated with a registered 
                                public accounting firm; or
                                    ``(II) non-cooperation, as described 
                                in section 105(b)(3), with respect to a 
                                demand in a Board investigation for 
                                testimony, documents, or other 
                                information relating to a period when 
                                such person was associated or seeking to 
                                become associated with a registered 
                                public accounting firm.''.
            (2) Securities exchange act of 1934 amendment.--Section 
        21(a)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78u(a)(1)) is amended by striking ``or a person associated with 
        such a firm'' and inserting ``, a person associated with such a 
        firm, or, as to any act, practice, or omission to act, while 
        associated with such firm, a person formerly associated with 
        such a firm''.

    (h) Supervisory Personnel of an Audit Firm.--Section 105(c)(6) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(6)) is amended--
            (1) in subparagraph (A), by striking ``the supervisory 
        personnel'' and inserting ``any person who is, or at the time of 
        the alleged failure reasonably to supervise was, a supervisory 
        person''; and
            (2) in subparagraph (B)--
                    (A) by striking ``No associated person'' and 
                inserting ``No current or former supervisory person''; 
                and
                    (B) by striking ``any other person'' and inserting 
                ``any associated person''.

    (i) Member of the Public Company Accounting Oversight Board.--
Section 107(d)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7217(d)(3)) is amended by striking ``any member'' and inserting ``any 
person who is, or at the time of the alleged misconduct was, a member''.
SEC. 929G. STREAMLINED HIRING AUTHORITY FOR MARKET SPECIALISTS.

    (a) Appointment Authority.--Section 3114 of title 5, United States 
Code, is amended by striking the section heading and all that follows 
through the end of subsection (a) and inserting the following:

[[Page 124 STAT. 1856]]

``Sec. 3114. Appointment of candidates to certain positions in the 
                  competitive service by the Securities and 
                  Exchange Commission

    ``(a) Applicability.--This section applies with respect to any 
position of accountant, economist, and securities compliance examiner at 
the Commission that is in the competitive service, and any position at 
the Commission in the competitive service that requires specialized 
knowledge of financial and capital market formation or regulation, 
financial market structures or surveillance, or information 
technology.''.
    (b) Clerical Amendment.--The table of sections for chapter 31 of 
title 5, United States Code, is amended by striking the item relating to 
section 3114 and inserting the following:

``3114. Appointment of candidates to positions in the competitive 
           service by the Securities and Exchange Commission.''.

    (c) <<NOTE: 15 USC 78d note.>>  Pay Authority.--The Commission may 
set the rate of pay for experts and consultants appointed under the 
authority of section 3109 of title 5, United States Code, in the same 
manner in which it sets the rate of pay for employees of the Commission.
SEC. 929H. SIPC REFORMS.

    (a) Increasing the Cash Limit of Protection.--Section 9 of the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78fff-3) is 
amended--
            (1) in subsection (a)(1), by striking ``$100,000 for each 
        such customer'' and inserting ``the standard maximum cash 
        advance amount for each such customer, as determined in 
        accordance with subsection (d)''; and
            (2) by adding the following new subsections:

    ``(d) Standard Maximum Cash Advance Amount Defined.--For purposes of 
this section, the term `standard maximum cash advance amount' means 
$250,000, as such amount may be adjusted after December 31, 2010, as 
provided under subsection (e).
    ``(e) Inflation Adjustment.--
            ``(1) <<NOTE: Deadlines. Determination.>>  In general.--Not 
        later than January 1, 2011, and every 5 years thereafter, and 
        subject to the approval of the Commission as provided under 
        section 3(e)(2), the Board of Directors of SIPC shall determine 
        whether an inflation adjustment to the standard maximum cash 
        advance amount is appropriate. If the Board of Directors of SIPC 
        determines such an adjustment is appropriate, then the standard 
        maximum cash advance amount shall be an amount equal to--
                    ``(A) $250,000 multiplied by--
                    ``(B) the ratio of the annual value of the Personal 
                Consumption Expenditures Chain-Type Price Index (or any 
                successor index thereto), published by the Department of 
                Commerce, for the calendar year preceding the year in 
                which such determination is made, to the published 
                annual value of such index for the calendar year 
                preceding the year in which this subsection was enacted.
        The index values used in calculations under this paragraph shall 
        be, as of the date of the calculation, the values most recently 
        published by the Department of Commerce.
            ``(2) Rounding.--If the standard maximum cash advance amount 
        determined under paragraph (1) for any period is not

[[Page 124 STAT. 1857]]

        a multiple of $10,000, the amount so determined shall be rounded 
        down to the nearest $10,000.
            ``(3) Publication and report to the congress.--Not later 
        than April 5 of any calendar year in which a determination is 
        required to be made under paragraph (1)--
                    ``(A) <<NOTE: Federal Register, publication.>>  the 
                Commission shall publish in the Federal Register the 
                standard maximum cash advance amount; and
                    ``(B) the Board of Directors of SIPC shall submit a 
                report to the Congress stating the standard maximum cash 
                advance amount.
            ``(4) Implementation period.-- <<NOTE: Effective date.>> Any 
        adjustment to the standard maximum cash advance amount shall 
        take effect on January 1 of the year immediately succeeding the 
        calendar year in which such adjustment is made.
            ``(5) Inflation adjustment considerations.--In making any 
        determination under paragraph (1) to increase the standard 
        maximum cash advance amount, the Board of Directors of SIPC 
        shall consider--
                    ``(A) the overall state of the fund and the economic 
                conditions affecting members of SIPC;
                    ``(B) the potential problems affecting members of 
                SIPC; and
                    ``(C) such other factors as the Board of Directors 
                of SIPC may determine appropriate.''.

    (b) Liquidation of a Carrying Broker-dealer.--Section 5(a)(3) of the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78eee(a)(3)) is 
amended--
            (1) by striking the undesignated matter immediately 
        following subparagraph (B);
            (2) in subparagraph (A), by striking ``any member of SIPC'' 
        and inserting ``the member'';
            (3) in subparagraph (B), by striking the comma at the end 
        and inserting a period;
            (4) by striking ``If SIPC'' and inserting the following:
                    ``(A) In general.--SIPC may, upon notice to a member 
                of SIPC, file an application for a protective decree 
                with any court of competent jurisdiction specified in 
                section 21(e) or 27 of the Securities Exchange Act of 
                1934, except that no such application shall be filed 
                with respect to a member, the only customers of which 
                are persons whose claims could not be satisfied by SIPC 
                advances pursuant to section 9, if SIPC''; and
            (5) by adding at the end the following:
                    ``(B) Consent required.--No member of SIPC that has 
                a customer may enter into an insolvency, receivership, 
                or bankruptcy proceeding, under Federal or State law, 
                without the specific consent of SIPC, except as provided 
                in title II of the Dodd-Frank Wall Street Reform and 
                Consumer Protection Act.''.
SEC. 929I. PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO 
                          THE COMMISSION.

    (a) Securities Exchange Act of 1934.--Section 24 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78x) is amended--
            (1) in subsection (d), by striking ``subsection (e)'' and 
        inserting ``subsection (f)'';
            (2) by redesignating subsection (e) as subsection (f); and

[[Page 124 STAT. 1858]]

            (3) by inserting after subsection (d) the following:

    ``(e) Records Obtained From Registered Persons.--
            ``(1) In general.--Except as provided in subsection (f), the 
        Commission shall not be compelled to disclose records or 
        information obtained pursuant to section 17(b), or records or 
        information based upon or derived from such records or 
        information, if such records or information have been obtained 
        by the Commission for use in furtherance of the purposes of this 
        title, including surveillance, risk assessments, or other 
        regulatory and oversight activities.
            ``(2) Treatment of information.--For purposes of section 552 
        of title 5, United States Code, this subsection shall be 
        considered a statute described in subsection (b)(3)(B) of such 
        section 552. Collection of information pursuant to section 17 
        shall be an administrative action involving an agency against 
        specific individuals or agencies pursuant to section 3518(c)(1) 
        of title 44, United States Code.''.

    (b) Investment Company Act of 1940.--Section 31 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-30) is amended--
            (1) by striking subsection (c) and inserting the following:

    ``(c) Limitations on Disclosure by Commission.--Notwithstanding any 
other provision of law, the Commission shall not be compelled to 
disclose any records or information provided to the Commission under 
this section, or records or information based upon or derived from such 
records or information, if such records or information have been 
obtained by the Commission for use in furtherance of the purposes of 
this title, including surveillance, risk assessments, or other 
regulatory and oversight activities. Nothing in this subsection 
authorizes the Commission to withhold information from the Congress or 
prevent the Commission from complying with a request for information 
from any other Federal department or agency requesting the information 
for purposes within the scope of jurisdiction of that department or 
agency, or complying with an order of a court of the United States in an 
action brought by the United States or the Commission. For purposes of 
section 552 of title 5, United States Code, this section shall be 
considered a statute described in subsection (b)(3)(B) of such section 
552. Collection of information pursuant to section 31 shall be an 
administrative action involving an agency against specific individuals 
or agencies pursuant to section 3518(c)(1) of title 44, United States 
Code.'';
            (2) by striking subsection (d); and
            (3) by redesignating subsections (e) and (f) as subsections 
        (d) and (e), respectively.

    (c) Investment Advisers Act of 1940.--Section 210 of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b-10) is amended by adding at the end 
the following:
    ``(d) Limitations on Disclosure by the Commission.--Notwithstanding 
any other provision of law, the Commission shall not be compelled to 
disclose any records or information provided to the Commission under 
section 204, or records or information based upon or derived from such 
records or information, if such records or information have been 
obtained by the Commission for use in furtherance of the purposes of 
this title, including surveillance, risk assessments, or other 
regulatory and oversight activities. Nothing in this subsection 
authorizes the Commission to withhold information from the Congress or 
prevent the Commission from

[[Page 124 STAT. 1859]]

complying with a request for information from any other Federal 
department or agency requesting the information for purposes within the 
scope of jurisdiction of that department or agency, or complying with an 
order of a court of the United States in an action brought by the United 
States or the Commission. For purposes of section 552 of title 5, United 
States Code, this subsection shall be considered a statute described in 
subsection (b)(3)(B) of such section 552. Collection of information 
pursuant to section 204 shall be an administrative action involving an 
agency against specific individuals or agencies pursuant to section 
3518(c)(1) of title 44, United States Code.''.
SEC. 929J. EXPANSION OF AUDIT INFORMATION TO BE PRODUCED AND 
                          EXCHANGED.

    Section 106 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216) is 
amended--
            (1) by striking subsection (b) and inserting the following:

    ``(b) Production of Documents.--
            ``(1) Production by foreign firms.--If a foreign public 
        accounting firm performs material services upon which a 
        registered public accounting firm relies in the conduct of an 
        audit or interim review, issues an audit report, performs audit 
        work, or conducts interim reviews, the foreign public accounting 
        firm shall--
                    ``(A) produce the audit work papers of the foreign 
                public accounting firm and all other documents of the 
                firm related to any such audit work or interim review to 
                the Commission or the Board, upon request of the 
                Commission or the Board; and
                    ``(B) be subject to the jurisdiction of the courts 
                of the United States for purposes of enforcement of any 
                request for such documents.
            ``(2) Other production.--Any registered public accounting 
        firm that relies, in whole or in part, on the work of a foreign 
        public accounting firm in issuing an audit report, performing 
        audit work, or conducting an interim review, shall--
                    ``(A) produce the audit work papers of the foreign 
                public accounting firm and all other documents related 
                to any such work in response to a request for production 
                by the Commission or the Board; and
                    ``(B) secure the agreement of any foreign public 
                accounting firm to such production, as a condition of 
                the reliance by the registered public accounting firm on 
                the work of that foreign public accounting firm.'';
            (2) by redesignating subsection (d) as subsection (g); and
            (3) by inserting after subsection (c) the following:

    ``(d) Service of Requests or Process.--
            ``(1) In general.--Any foreign public accounting firm that 
        performs work for a domestic registered public accounting firm 
        shall furnish to the domestic registered public accounting firm 
        a written irrevocable consent and power of attorney that 
        designates the domestic registered public accounting firm as an 
        agent upon whom may be served any request by the Commission or 
        the Board under this section or upon whom may be served any 
        process, pleadings, or other papers in any action brought to 
        enforce this section.

[[Page 124 STAT. 1860]]

            ``(2) <<NOTE: Designation.>>  Specific audit work.--Any 
        foreign public accounting firm that performs material services 
        upon which a registered public accounting firm relies in the 
        conduct of an audit or interim review, issues an audit report, 
        performs audit work, or, performs interim reviews, shall 
        designate to the Commission or the Board an agent in the United 
        States upon whom may be served any request by the Commission or 
        the Board under this section or upon whom may be served any 
        process, pleading, or other papers in any action brought to 
        enforce this section.

    ``(e) Sanctions.--A willful refusal to comply, in whole in or in 
part, with any request by the Commission or the Board under this 
section, shall be deemed a violation of this Act.
    ``(f) Other Means of Satisfying Production Obligations.--
Notwithstanding any other provisions of this section, the staff of the 
Commission or the Board may allow a foreign public accounting firm that 
is subject to this section to meet production obligations under this 
section through alternate means, such as through foreign counterparts of 
the Commission or the Board.''.
SEC. 929K. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.

    Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x) is 
amended--
            (1) in subsection (d), as amended by subsection (d)(1)(A), 
        by striking ``subsection (f)'' and inserting ``subsection (g)'';
            (2) in subsection (e), as added by subsection (d)(1)(C), by 
        striking ``subsection (f)'' and inserting ``subsection (g)'';
            (3) by redesignating subsection (f) as subsection (g); and
            (4) by inserting after subsection (e) the following:

    ``(f) Sharing Privileged Information With Other Authorities.--
            ``(1) Privileged information provided by the commission.--
        The Commission shall not be deemed to have waived any privilege 
        applicable to any information by transferring that information 
        to or permitting that information to be used by--
                    ``(A) any agency (as defined in section 6 of title 
                18, United States Code);
                    ``(B) the Public Company Accounting Oversight Board;
                    ``(C) any self-regulatory organization;
                    ``(D) any foreign securities authority;
                    ``(E) any foreign law enforcement authority; or
                    ``(F) any State securities or law enforcement 
                authority.
            ``(2) Nondisclosure of privileged information provided to 
        the commission.--The Commission shall not be compelled to 
        disclose privileged information obtained from any foreign 
        securities authority, or foreign law enforcement authority, if 
        the authority has in good faith determined and represented to 
        the Commission that the information is privileged.
            ``(3) Nonwaiver of privileged information provided to the 
        commission.--
                    ``(A) In general.--Federal agencies, State 
                securities and law enforcement authorities, self-
                regulatory organizations, and the Public Company 
                Accounting Oversight Board shall not be deemed to have 
                waived any privilege applicable to any information by 
                transferring that information to or permitting that 
                information to be used by the Commission.

[[Page 124 STAT. 1861]]

                    ``(B) Exception.--The provisions of subparagraph (A) 
                shall not apply to a self-regulatory organization or the 
                Public Company Accounting Oversight Board with respect 
                to information used by the Commission in an action 
                against such organization.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) the term `privilege' includes any work-product 
                privilege, attorney-client privilege, governmental 
                privilege, or other privilege recognized under Federal, 
                State, or foreign law;
                    ``(B) the term `foreign law enforcement authority' 
                means any foreign authority that is empowered under 
                foreign law to detect, investigate or prosecute 
                potential violations of law; and
                    ``(C) the term `State securities or law enforcement 
                authority' means the authority of any State or territory 
                that is empowered under State or territory law to 
                detect, investigate, or prosecute potential violations 
                of law.''.
SEC. 929L. ENHANCED APPLICATION OF ANTIFRAUD PROVISIONS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended--
            (1) in <<NOTE: 15 USC 78i.>>  section 9--
                    (A) by striking ``registered on a national 
                securities exchange'' each place that term appears and 
                inserting ``other than a government security'';
                    (B) in subsection (b), by striking ``by use of any 
                facility of a national securities exchange,''; and
                    (C) in subsection (c), by inserting after ``unlawful 
                for any'' the following: ``broker, dealer, or'';
            (2) in section 10(a)(1), <<NOTE: 15 USC 78j.>>  by striking 
        ``registered on a national securities exchange'' and inserting 
        ``other than a government security''; and
            (3) in section 15(c)(1)(A), <<NOTE: 15 USC 78o.>>  by 
        striking ``otherwise than on a national securities exchange of 
        which it is a member''.
SEC. 929M. AIDING AND ABETTING AUTHORITY UNDER THE SECURITIES ACT 
                          AND THE INVESTMENT COMPANY ACT.

    (a) Under the Securities Act of 1933.--Section 15 of the Securities 
Act of 1933 (15 U.S.C. 77o) is amended--
            (1) by striking ``Every person who'' and inserting ``(a) 
        Controlling Persons.--Every person who''; and
            (2) by adding at the end the following:

    ``(b) Prosecution of Persons Who Aid and Abet Violations.--For 
purposes of any action brought by the Commission under subparagraph (b) 
or (d) of section 20, any person that knowingly or recklessly provides 
substantial assistance to another person in violation of a provision of 
this Act, or of any rule or regulation issued under this Act, shall be 
deemed to be in violation of such provision to the same extent as the 
person to whom such assistance is provided.''.
    (b) Under the Investment Company Act of 1940.--Section 48 of the 
Investment Company Act of 1940 <<NOTE: 15 USC 80a-47.>>  (15 U.S.C. 80a-
48) is amended by redesignating subsection (b) as subsection (c) and 
inserting after subsection (a) the following:

    ``(b) For purposes of any action brought by the Commission under 
subsection (d) or (e) of section 42, any person that knowingly or 
recklessly provides substantial assistance to another person in

[[Page 124 STAT. 1862]]

violation of a provision of this Act, or of any rule or regulation 
issued under this Act, shall be deemed to be in violation of such 
provision to the same extent as the person to whom such assistance is 
provided.''.
SEC. 929N. AUTHORITY TO IMPOSE PENALTIES FOR AIDING AND ABETTING 
                          VIOLATIONS OF THE INVESTMENT ADVISERS 
                          ACT.

    Section 209 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-9) 
is amended by inserting at the end the following new subsection:
    ``(f) Aiding and Abetting.--For purposes of any action brought by 
the Commission under subsection (e), any person that knowingly or 
recklessly has aided, abetted, counseled, commanded, induced, or 
procured a violation of any provision of this Act, or of any rule, 
regulation, or order hereunder, shall be deemed to be in violation of 
such provision, rule, regulation, or order to the same extent as the 
person that committed such violation.''.
SEC. 929O. AIDING AND ABETTING STANDARD OF KNOWLEDGE SATISFIED BY 
                          RECKLESSNESS.

    Section 20(e) of the Securities Exchange Act of 1934 (15 U.S.C. 
78t(e)) is amended by inserting ``or recklessly'' after ``knowingly''.
SEC. 929P. STRENGTHENING ENFORCEMENT BY THE COMMISSION.

    (a) Authority to Impose Civil Penalties in Cease and Desist 
Proceedings.--
            (1) Under the securities act of 1933.--Section 8A of the 
        Securities Act of 1933 (15 U.S.C. 77h-1) is amended by adding at 
        the end the following new subsection:

    ``(g) Authority to Impose Money Penalties.--
            ``(1) Grounds.--In any cease-and-desist proceeding under 
        subsection (a), the Commission may impose a civil penalty on a 
        person if the Commission finds, on the record, after notice and 
        opportunity for hearing, that--
                    ``(A) such person--
                          ``(i) is violating or has violated any 
                      provision of this title, or any rule or regulation 
                      issued under this title; or
                          ``(ii) is or was a cause of the violation of 
                      any provision of this title, or any rule or 
                      regulation thereunder; and
                    ``(B) such penalty is in the public interest.
            ``(2) Maximum amount of penalty.--
                    ``(A) First tier.--The maximum amount of a penalty 
                for each act or omission described in paragraph (1) 
                shall be $7,500 for a natural person or $75,000 for any 
                other person.
                    ``(B) Second tier.--Notwithstanding subparagraph 
                (A), the maximum amount of penalty for each such act or 
                omission shall be $75,000 for a natural person or 
                $375,000 for any other person, if the act or omission 
                described in paragraph (1) involved fraud, deceit, 
                manipulation, or deliberate or reckless disregard of a 
                regulatory requirement.
                    ``(C) Third tier.--Notwithstanding subparagraphs (A) 
                and (B), the maximum amount of penalty for each such act 
                or omission shall be $150,000 for a natural person or 
                $725,000 for any other person, if--

[[Page 124 STAT. 1863]]

                          ``(i) the act or omission described in 
                      paragraph (1) involved fraud, deceit, 
                      manipulation, or deliberate or reckless disregard 
                      of a regulatory requirement; and
                          ``(ii) such act or omission directly or 
                      indirectly resulted in--
                                    ``(I) substantial losses or created 
                                a significant risk of substantial losses 
                                to other persons; or
                                    ``(II) substantial pecuniary gain to 
                                the person who committed the act or 
                                omission.
            ``(3) Evidence concerning ability to pay.--In any proceeding 
        in which the Commission may impose a penalty under this section, 
        a respondent may present evidence of the ability of the 
        respondent to pay such penalty. The Commission may, in its 
        discretion, consider such evidence in determining whether such 
        penalty is in the public interest. Such evidence may relate to 
        the extent of the ability of the respondent to continue in 
        business and the collectability of a penalty, taking into 
        account any other claims of the United States or third parties 
        upon the assets of the respondent and the amount of the assets 
        of the respondent.''.
            (2) Under the securities exchange act of 1934.--Section 
        21B(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
        2(a)) is amended--
                    (A) by striking the matter following paragraph (4);
                    (B) in the matter preceding paragraph (1), by 
                inserting after ``opportunity for hearing,'' the 
                following: ``that such penalty is in the public interest 
                and'';
                    (C) by redesignating paragraphs (1) through (4) as 
                subparagraphs (A) through (D), respectively, and 
                adjusting the margins accordingly;
                    (D) by striking ``In any proceeding'' and inserting 
                the following:
            ``(1) In general.--In any proceeding''; and
                    (E) by adding at the end the following:
            ``(2) Cease-and-desist proceedings.--In any proceeding 
        instituted under section 21C against any person, the Commission 
        may impose a civil penalty, if the Commission finds, on the 
        record after notice and opportunity for hearing, that such 
        person--
                    ``(A) is violating or has violated any provision of 
                this title, or any rule or regulation issued under this 
                title; or
                    ``(B) is or was a cause of the violation of any 
                provision of this title, or any rule or regulation 
                issued under this title.''.
            (3) Under the investment company act of 1940.--Section 
        9(d)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-
        9(d)(1)) is amended--
                    (A) by striking the matter following subparagraph 
                (C);
                    (B) in the matter preceding subparagraph (A), by 
                inserting after ``opportunity for hearing,'' the 
                following: ``that such penalty is in the public 
                interest, and'';
                    (C) by redesignating subparagraphs (A) through (C) 
                as clauses (i) through (iii), respectively, and 
                adjusting the margins accordingly;
                    (D) by striking ``In any proceeding'' and inserting 
                the following:

[[Page 124 STAT. 1864]]

                    ``(A) In general.--In any proceeding''; and
                    (E) by adding at the end the following:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection (f) against 
                any person, the Commission may impose a civil penalty if 
                the Commission finds, on the record, after notice and 
                opportunity for hearing, that such person--
                          ``(i) is violating or has violated any 
                      provision of this title, or any rule or regulation 
                      issued under this title; or
                          ``(ii) is or was a cause of the violation of 
                      any provision of this title, or any rule or 
                      regulation issued under this title.''.
            (4) Under the investment advisers act of 1940.--Section 
        203(i)(1) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
        3(i)(1)) is amended--
                    (A) by striking the matter following subparagraph 
                (D);
                    (B) in the matter preceding subparagraph (A), by 
                inserting after ``opportunity for hearing,'' the 
                following: ``that such penalty is in the public interest 
                and'';
                    (C) by redesignating subparagraphs (A) through (D) 
                as clauses (i) through (iv), respectively, and adjusting 
                the margins accordingly;
                    (D) by striking ``In any proceeding'' and inserting 
                the following:
                    ``(A) In general.--In any proceeding''; and
                    (E) by adding at the end the following new 
                subparagraph:
                    ``(B) Cease-and-desist proceedings.--In any 
                proceeding instituted pursuant to subsection (k) against 
                any person, the Commission may impose a civil penalty if 
                the Commission finds, on the record, after notice and 
                opportunity for hearing, that such person--
                          ``(i) is violating or has violated any 
                      provision of this title, or any rule or regulation 
                      issued under this title; or
                          ``(ii) is or was a cause of the violation of 
                      any provision of this title, or any rule or 
                      regulation issued under this title.''.

    (b) <<NOTE: Courts.>>  Extraterritorial Jurisdiction of the 
Antifraud Provisions of the Federal Securities Laws.--
            (1) Under the securities act of 1933.--Section 22 of the 
        Securities Act of 1933 (15 U.S.C. 77v(a)) is amended by adding 
        at the end the following new subsection:

    ``(c) Extraterritorial Jurisdiction.--The district courts of the 
United States and the United States courts of any Territory shall have 
jurisdiction of an action or proceeding brought or instituted by the 
Commission or the United States alleging a violation of section 17(a) 
involving--
            ``(1) conduct within the United States that constitutes 
        significant steps in furtherance of the violation, even if the 
        securities transaction occurs outside the United States and 
        involves only foreign investors; or
            ``(2) conduct occurring outside the United States that has a 
        foreseeable substantial effect within the United States.''.

[[Page 124 STAT. 1865]]

            (2) Under the securities exchange act of 1934.--Section 27 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78aa) is 
        amended--
                    (A) by striking ``The district'' and inserting the 
                following:

    ``(a) In General.--The district''; and
                    (B) by adding at the end the following new 
                subsection:

    ``(b) Extraterritorial Jurisdiction.--The district courts of the 
United States and the United States courts of any Territory shall have 
jurisdiction of an action or proceeding brought or instituted by the 
Commission or the United States alleging a violation of the antifraud 
provisions of this title involving--
            ``(1) conduct within the United States that constitutes 
        significant steps in furtherance of the violation, even if the 
        securities transaction occurs outside the United States and 
        involves only foreign investors; or
            ``(2) conduct occurring outside the United States that has a 
        foreseeable substantial effect within the United States.''.
            (3) Under the investment advisers act of 1940.--Section 214 
        of the Investment Advisers Act of 1940 (15 U.S.C. 80b-14) is 
        amended--
                    (A) by striking ``The district'' and inserting the 
                following:

    ``(a) In General.--The district''; and
                    (B) by adding at the end the following new 
                subsection:

    ``(b) Extraterritorial Jurisdiction.--The district courts of the 
United States and the United States courts of any Territory shall have 
jurisdiction of an action or proceeding brought or instituted by the 
Commission or the United States alleging a violation of section 206 
involving--
            ``(1) conduct within the United States that constitutes 
        significant steps in furtherance of the violation, even if the 
        violation is committed by a foreign adviser and involves only 
        foreign investors; or
            ``(2) conduct occurring outside the United States that has a 
        foreseeable substantial effect within the United States.''.

    (c) Control Person Liability Under the Securities Exchange Act of 
1934.--Section 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78t(a)) is amended by inserting after ``controlled person is liable'' 
the following: ``(including to the Commission in any action brought 
under paragraph (1) or (3) of section 21(d))''.
SEC. 929Q. REVISION TO RECORDKEEPING RULE.

    (a) Investment Company Act of 1940 Amendments.--Section 31 of the 
Investment Company Act of 1940 (15 U.S.C. 80a-30) is amended--
            (1) in subsection (a)(1), by adding at the end the 
        following: ``Each person having custody or use of the 
        securities, deposits, or credits of a registered investment 
        company shall maintain and preserve all records that relate to 
        the custody or use by such person of the securities, deposits, 
        or credits of the registered investment company for such period 
        or periods as the Commission, by rule or regulation, may 
        prescribe, as necessary or appropriate in the public interest or 
        for the protection of investors.''; and
            (2) in subsection (b), by adding at the end the following:
            ``(4) Records of persons with custody or use.--

[[Page 124 STAT. 1866]]

                    ``(A) In general.--Records of persons having custody 
                or use of the securities, deposits, or credits of a 
                registered investment company that relate to such 
                custody or use, are subject at any time, or from time to 
                time, to such reasonable periodic, special, or other 
                examinations and other information and document requests 
                by representatives of the Commission, as the Commission 
                deems necessary or appropriate in the public interest or 
                for the protection of investors.
                    ``(B) Certain persons subject to other regulation.--
                Any person that is subject to regulation and examination 
                by a Federal financial institution regulatory agency (as 
                such term is defined under section 212(c)(2) of title 
                18, United States Code) may satisfy any examination 
                request, information request, or document request 
                described under subparagraph (A), by providing to the 
                Commission a detailed listing, in writing, of the 
                securities, deposits, or credits of the registered 
                investment company within the custody or use of such 
                person.''.

    (b) Investment Advisers Act of 1940 Amendment.--Section 204 of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding 
at the end the following new subsection:
    ``(d) Records of Persons With Custody or Use.--
            ``(1) In general.--Records of persons having custody or use 
        of the securities, deposits, or credits of a client, that relate 
        to such custody or use, are subject at any time, or from time to 
        time, to such reasonable periodic, special, or other 
        examinations and other information and document requests by 
        representatives of the Commission, as the Commission deems 
        necessary or appropriate in the public interest or for the 
        protection of investors.
            ``(2) Certain persons subject to other regulation.--Any 
        person that is subject to regulation and examination by a 
        Federal financial institution regulatory agency (as such term is 
        defined under section 212(c)(2) of title 18, United States Code) 
        may satisfy any examination request, information request, or 
        document request described under paragraph (1), by providing the 
        Commission with a detailed listing, in writing, of the 
        securities, deposits, or credits of the client within the 
        custody or use of such person.''.
SEC. 929R. BENEFICIAL OWNERSHIP AND SHORT-SWING PROFIT REPORTING.

    (a) Beneficial Ownership Reporting.--Section 13 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m) is amended--
            (1) in subsection (d)(1)--
                    (A) by inserting after ``within ten days after such 
                acquisition'' the following: ``or within such shorter 
                time as the Commission may establish by rule''; and
                    (B) by striking ``send to the issuer of the security 
                at its principal executive office, by registered or 
                certified mail, send to each exchange where the security 
                is traded, and'';
            (2) in subsection (d)(2)--
                    (A) by striking ``in the statements to the issuer 
                and the exchange, and''; and

[[Page 124 STAT. 1867]]

                    (B) by striking ``shall be transmitted to the issuer 
                and the exchange and'';
            (3) in subsection (g)(1), by striking ``shall send to the 
        issuer of the security and''; and
            (4) in subsection (g)(2)--
                    (A) by striking ``sent to the issuer and''; and
                    (B) by striking ``shall be transmitted to the issuer 
                and''.

    (b) Short-swing Profit Reporting.--Section 16(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78p(a)) is amended--
            (1) in paragraph (1), by striking ``(and, if such security 
        is registered on a national securities exchange, also with the 
        exchange)''; and
            (2) in paragraph (2)(B), by inserting after ``officer'' the 
        following: ``, or within such shorter time as the Commission may 
        establish by rule''.
SEC. 929S. FINGERPRINTING.

    Section 17(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 
78q(f)(2)) is amended--
            (1) in the first sentence, by striking ``and registered 
        clearing agency,'' and inserting ``registered clearing agency, 
        registered securities information processor, national securities 
        exchange, and national securities association''; and
            (2) in the second sentence, by striking ``or clearing 
        agency,'' and inserting ``clearing agency, securities 
        information processor, national securities exchange, or national 
        securities association,''.
SEC. 929T. EQUAL TREATMENT OF SELF-REGULATORY ORGANIZATION RULES.

    Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78cc(a)) is amended by striking ``an exchange required thereby'' and 
inserting ``a self-regulatory organization,''.
SEC. 929U. DEADLINE FOR COMPLETING EXAMINATIONS, INSPECTIONS AND 
                          ENFORCEMENT ACTIONS.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 4D the following new section:
``SEC. 4E. <<NOTE: 15 USC 78d-5.>>  DEADLINE FOR COMPLETING 
                      ENFORCEMENT INVESTIGATIONS AND COMPLIANCE 
                      EXAMINATIONS AND INSPECTIONS.

    ``(a) Enforcement Investigations.--
            ``(1) <<NOTE: Notification. Filing.>>  In general.--Not 
        later than 180 days after the date on which Commission staff 
        provide a written Wells notification to any person, the 
        Commission staff shall either file an action against such person 
        or provide notice to the Director of the Division of Enforcement 
        of its intent to not file an action.
            ``(2) <<NOTE: Time period.>>  Exceptions for certain complex 
        actions.--Notwithstanding paragraph (1), if the Director of the 
        Division of Enforcement of the Commission or the Director's 
        designee determines that a particular enforcement investigation 
        is sufficiently complex such that a determination regarding the 
        filing of an action against a person cannot be completed within 
        the deadline specified in paragraph (1), the Director of the 
        Division of Enforcement of the Commission or the Director's 
        designee may, after providing notice to the Chairman of the 
        Commission,

[[Page 124 STAT. 1868]]

        extend such deadline as needed for one additional 180-day 
        period. If after the additional 180-day period the Director of 
        the Division of Enforcement of the Commission or the Director's 
        designee determines that a particular enforcement investigation 
        is sufficiently complex such that a determination regarding the 
        filing of an action against a person cannot be completed within 
        the additional 180-day period, the Director of the Division of 
        Enforcement of the Commission or the Director's designee may, 
        after providing notice to and receiving approval of the 
        Commission, extend such deadline as needed for one or more 
        additional successive 180-day periods.

    ``(b) Compliance Examinations and Inspections.--
            ``(1) <<NOTE: Notification.>>  In general.--Not later than 
        180 days after the date on which Commission staff completes the 
        on-site portion of its compliance examination or inspection or 
        receives all records requested from the entity being examined or 
        inspected, whichever is later, Commission staff shall provide 
        the entity being examined or inspected with written notification 
        indicating either that the examination or inspection has 
        concluded, has concluded without findings, or that the staff 
        requests the entity undertake corrective action.
            ``(2) <<NOTE: Time period.>>  Exception for certain complex 
        actions.--Notwithstanding paragraph (1), if the head of any 
        division or office within the Commission responsible for 
        compliance examinations and inspections or his designee 
        determines that a particular compliance examination or 
        inspection is sufficiently complex such that a determination 
        regarding concluding the examination or inspection, or regarding 
        the staff requests the entity undertake corrective action, 
        cannot be completed within the deadline specified in paragraph 
        (1), the head of any division or office within the Commission 
        responsible for compliance examinations and inspections or his 
        designee may, after providing notice to the Chairman of the 
        Commission, extend such deadline as needed for one additional 
        180-day period.''.
SEC. 929V. SECURITY INVESTOR PROTECTION ACT AMENDMENTS.

    (a) Increasing the Minimum Assessment Paid by SIPC Members.--Section 
4(d)(1)(C) of the Securities Investor Protection Act of 1970 (15 U.S.C. 
78ddd(d)(1)(C)) is amended by striking ``$150 per annum'' and inserting 
the following: ``0.02 percent of the gross revenues from the securities 
business of such member of SIPC''.
    (b) Increasing the Fine for Prohibited Acts Under SIPA.--Section 
14(c) of the Securities Investor Protection Act of 1970 (15 U.S.C. 
78jjj(c)) is amended--
            (1) in paragraph (1), by striking ``$50,000'' and inserting 
        ``$250,000''; and
            (2) in paragraph (2), by striking ``$50,000'' and inserting 
        ``$250,000''.

    (c) Penalty for Misrepresentation of SIPC Membership or 
Protection.--Section 14 of the Securities Investor Protection Act of 
1970 (15 U.S.C. 78jjj) is amended by adding at the end the following new 
subsection:
    ``(d) Misrepresentation of SIPC Membership or Protection.--
            ``(1) In general.--Any person who falsely represents by any 
        means (including, without limitation, through the Internet or 
        any other medium of mass communication), with actual

[[Page 124 STAT. 1869]]

        knowledge of the falsity of the representation and with an 
        intent to deceive or cause injury to another, that such person, 
        or another person, is a member of SIPC or that any person or 
        account is protected or is eligible for protection under this 
        Act or by SIPC, shall be liable for any damages caused thereby 
        and shall be fined not more than $250,000 or imprisoned for not 
        more than 5 years.
            ``(2) <<NOTE: Procedures. Certification. Records.>>  
        Injunctions.--Any court having jurisdiction of a civil action 
        arising under this Act may grant temporary injunctions and final 
        injunctions on such terms as the court deems reasonable to 
        prevent or restrain any violation of paragraph (1). Any such 
        injunction may be served anywhere in the United States on the 
        person enjoined, shall be operative throughout the United 
        States, and shall be enforceable, by proceedings in contempt or 
        otherwise, by any United States court having jurisdiction over 
        that person. The clerk of the court granting the injunction 
        shall, when requested by any other court in which enforcement of 
        the injunction is sought, transmit promptly to the other court a 
        certified copy of all papers in the case on file in such clerk's 
        office.''.
SEC. 929W. NOTICE TO MISSING SECURITY HOLDERS.

    Section 17A of the Securities Exchange Act of 1934 (15 U.S.C. 78q-1) 
is amended by adding at the end the following new subsection:
    ``(g) Due Diligence for the Delivery of Dividends, Interest, and 
Other Valuable Property Rights.--
            ``(1) Revision of rules required.--The Commission shall 
        revise its regulations in section 240.17Ad-17 of title 17, Code 
        of Federal Regulations, as in effect on December 8, 1997, to 
        extend the application of such section to brokers and dealers 
        and to provide for the following:
                    ``(A) <<NOTE: Notification. Deadline.>>  A 
                requirement that the paying agent provide a single 
                written notification to each missing security holder 
                that the missing security holder has been sent a check 
                that has not yet been negotiated. The written 
                notification may be sent along with a check or other 
                mailing subsequently sent to the missing security holder 
                but must be provided no later than 7 months after the 
                sending of the not yet negotiated check.
                    ``(B) An exclusion for paying agents from the 
                notification requirements when the value of the not yet 
                negotiated check is less than $25.
                    ``(C) A provision clarifying that the requirements 
                described in subparagraph (A) shall have no effect on 
                State escheatment laws.
                    ``(D) For purposes of such revised regulations--
                          ``(i) a security holder shall be considered a 
                      `missing security holder' if a check is sent to 
                      the security holder and the check is not 
                      negotiated before the earlier of the paying agent 
                      sending the next regularly scheduled check or the 
                      elapsing of 6 months after the sending of the not 
                      yet negotiated check; and
                          ``(ii) the term `paying agent' includes any 
                      issuer, transfer agent, broker, dealer, investment 
                      adviser, indenture trustee, custodian, or any 
                      other person that

[[Page 124 STAT. 1870]]

                      accepts payments from the issuer of a security and 
                      distributes the payments to the holders of the 
                      security.
            ``(2) <<NOTE: Deadline.>>  Rulemaking.--The Commission shall 
        adopt such rules, regulations, and orders necessary to implement 
        this subsection no later than 1 year after the date of enactment 
        of this subsection. In proposing such rules, the Commission 
        shall seek to minimize disruptions to current systems used by or 
        on behalf of paying agents to process payment to account holders 
        and avoid requiring multiple paying agents to send written 
        notification to a missing security holder regarding the same not 
        yet negotiated check.''.
SEC. 929X. SHORT SALE REFORMS.

    (a) Short Sale Disclosure.--Section 13(f) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78m(f)) is amended by redesignating paragraphs 
(2), (3), (4), and (5) as paragraphs (3), (4), (5), and (6), 
respectively, and inserting after paragraph (1) the following:
            ``(2) <<NOTE: Regulations.>>  The Commission shall prescribe 
        rules providing for the public disclosure of the name of the 
        issuer and the title, class, CUSIP number, aggregate amount of 
        the number of short sales of each security, and any additional 
        information determined by the Commission following the end of 
        the reporting period. <<NOTE: Deadline.>> At a minimum, such 
        public disclosure shall occur every month.''.

    (b) Short Selling Enforcement.--Section 9 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78i) is amended--
            (1) by redesignating subsections (d), (e), (f), (g), (h), 
        and (i) as subsections (e), (f), (g), (h), (i), and (j), 
        respectively; and
            (2) inserting after subsection (c), the following new 
        subsection:

    ``(d) Transactions Relating to Short Sales of Securities.--It shall 
be unlawful for any person, directly or indirectly, by the use of the 
mails or any means or instrumentality of interstate commerce, or of any 
facility of any national securities exchange, or for any member of a 
national securities exchange to effect, alone or with one or more other 
persons, a manipulative short sale of any 
security. <<NOTE: Regulations.>>  The Commission shall issue such other 
rules as are necessary or appropriate to ensure that the appropriate 
enforcement options and remedies are available for violations of this 
subsection in the public interest or for the protection of investors.''.

    (c) Investor Notification.--Section 15 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o) is amended--
            (1) by redesignating subsections (e), (f), (g), (h), and (i) 
        as subsections (f), (g), (h), (i), and (j), respectively; and
            (2) inserting after subsection (d) the following new 
        subsection:

    ``(e) Notices to Customers Regarding Securities Lending.--Every 
registered broker or dealer shall provide notice to its customers that 
they may elect not to allow their fully paid securities to be used in 
connection with short sales. If a broker or dealer uses a customer's 
securities in connection with short sales, the broker or dealer shall 
provide notice to its customer that the broker or dealer may receive 
compensation in connection with lending the customer's securities. The 
Commission, by rule, as it deems necessary or appropriate in the public 
interest and for the protection

[[Page 124 STAT. 1871]]

of investors, may prescribe the form, content, time, and manner of 
delivery of any notice required under this paragraph.''.
SEC. 929Y. STUDY ON EXTRATERRITORIAL PRIVATE RIGHTS OF ACTION.

    (a) <<NOTE: Public comment.>>  In General.--The Securities and 
Exchange Commission of the United States shall solicit public comment 
and thereafter conduct a study to determine the extent to which private 
rights of action under the antifraud provisions of the Securities and 
Exchange Act of 1934 (15 U.S.C. 78u-4) should be extended to cover--
            (1) conduct within the United States that constitutes a 
        significant step in the furtherance of the violation, even if 
        the securities transaction occurs outside the United States and 
        involves only foreign investors; and
            (2) conduct occurring outside the United States that has a 
        foreseeable substantial effect within the United States.

    (b) Contents.--The study shall consider and analyze, among other 
things--
            (1) the scope of such a private right of action, including 
        whether it should extend to all private actors or whether it 
        should be more limited to extend just to institutional investors 
        or otherwise;
            (2) what implications such a private right of action would 
        have on international comity;
            (3) the economic costs and benefits of extending a private 
        right of action for transnational securities frauds; and
            (4) whether a narrower extraterritorial standard should be 
        adopted.

    (c) Report.--A report of the study shall be submitted and 
recommendations made to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services of the 
House not later than 18 months after the date of enactment of this Act.
SEC. 929Z. GAO STUDY ON SECURITIES LITIGATION.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the impact of authorizing a private right of action 
against any person who aids or abets another person in violation of the 
securities laws. To the extent feasible, this study shall include--
            (1) a review of the role of secondary actors in companies 
        issuance of securities;
            (2) the courts interpretation of the scope of liability for 
        secondary actors under Federal securities laws after January 14, 
        2008; and
            (3) the types of lawsuits decided under the Private 
        Securities Litigation Act of 1995.

    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General shall submit a report to Congress on 
the findings of the study required under subsection (a).

[[Page 124 STAT. 1872]]

  Subtitle C--Improvements to the Regulation of Credit Rating Agencies

SEC. 931. <<NOTE: 15 USC 78o-7 note.>>  FINDINGS.

    Congress finds the following:
            (1) Because of the systemic importance of credit ratings and 
        the reliance placed on credit ratings by individual and 
        institutional investors and financial regulators, the activities 
        and performances of credit rating agencies, including nationally 
        recognized statistical rating organizations, are matters of 
        national public interest, as credit rating agencies are central 
        to capital formation, investor confidence, and the efficient 
        performance of the United States economy.
            (2) Credit rating agencies, including nationally recognized 
        statistical rating organizations, play a critical ``gatekeeper'' 
        role in the debt market that is functionally similar to that of 
        securities analysts, who evaluate the quality of securities in 
        the equity market, and auditors, who review the financial 
        statements of firms. Such role justifies a similar level of 
        public oversight and accountability.
            (3) Because credit rating agencies perform evaluative and 
        analytical services on behalf of clients, much as other 
        financial ``gatekeepers'' do, the activities of credit rating 
        agencies are fundamentally commercial in character and should be 
        subject to the same standards of liability and oversight as 
        apply to auditors, securities analysts, and investment bankers.
            (4) In certain activities, particularly in advising 
        arrangers of structured financial products on potential ratings 
        of such products, credit rating agencies face conflicts of 
        interest that need to be carefully monitored and that therefore 
        should be addressed explicitly in legislation in order to give 
        clearer authority to the Securities and Exchange Commission.
            (5) In the recent financial crisis, the ratings on 
        structured financial products have proven to be inaccurate. This 
        inaccuracy contributed significantly to the mismanagement of 
        risks by financial institutions and investors, which in turn 
        adversely impacted the health of the economy in the United 
        States and around the world. Such inaccuracy necessitates 
        increased accountability on the part of credit rating agencies.
SEC. 932. ENHANCED REGULATION, ACCOUNTABILITY, AND TRANSPARENCY OF 
                        NATIONALLY RECOGNIZED STATISTICAL RATING 
                        ORGANIZATIONS.

    (a) In General.--Section 15E of the Securities Exchange Act of 1934 
(15 U.S.C. 78o-7) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)(A), by striking ``furnished'' 
                and inserting ``filed'' and by striking ``furnishing'' 
                and inserting ``filing'';
                    (B) in paragraph (1)(B), by striking ``furnishing'' 
                and inserting ``filing''; and
                    (C) in the first sentence of paragraph (2), by 
                striking ``furnish to'' and inserting ``file with'';
            (2) in subsection (c)--
                    (A) in paragraph (2)--

[[Page 124 STAT. 1873]]

                          (i) in the second sentence, by inserting ``any 
                      other provision of this section, or'' after 
                      ``Notwithstanding''; and
                          (ii) by inserting after the period at the end 
                      the following: ``Nothing in this paragraph may be 
                      construed to afford a defense against any action 
                      or proceeding brought by the Commission to enforce 
                      the antifraud provisions of the securities 
                      laws.''; and
                    (B) by adding at the end the following:
            ``(3) Internal controls over processes for determining 
        credit ratings.--
                    ``(A) In general.--Each nationally recognized 
                statistical rating organization shall establish, 
                maintain, enforce, and document an effective internal 
                control structure governing the implementation of and 
                adherence to policies, procedures, and methodologies for 
                determining credit ratings, taking into consideration 
                such factors as the Commission may prescribe, by rule.
                    ``(B) <<NOTE: Deadline. Reports.>>  Attestation 
                requirement.--The Commission shall prescribe rules 
                requiring each nationally recognized statistical rating 
                organization to submit to the Commission an annual 
                internal controls report, which shall contain--
                          ``(i) a description of the responsibility of 
                      the management of the nationally recognized 
                      statistical rating organization in establishing 
                      and maintaining an effective internal control 
                      structure under subparagraph (A);
                          ``(ii) <<NOTE: Assessment.>>  an assessment of 
                      the effectiveness of the internal control 
                      structure of the nationally recognized statistical 
                      rating organization; and
                          ``(iii) the attestation of the chief executive 
                      officer, or equivalent individual, of the 
                      nationally recognized statistical rating 
                      organization.'';
            (3) in subsection (d)--
                    (A) <<NOTE: Censure.>>  by inserting after ``or 
                revoke the registration of any nationally recognized 
                statistical rating organization'' the following: ``, or 
                with respect to any person who is associated with, who 
                is seeking to become associated with, or, at the time of 
                the alleged misconduct, who was associated or was 
                seeking to become associated with a nationally 
                recognized statistical rating organization, the 
                Commission, by order, shall censure, place limitations 
                on the activities or functions of such person, suspend 
                for a period not exceeding 1 year, or bar such person 
                from being associated with a nationally recognized 
                statistical rating organization,'';
                    (B) by inserting ``bar'' after ``placing of 
                limitations, suspension,'';
                    (C) in paragraph (2), by striking ``furnished to'' 
                and inserting ``filed with'';
                    (D) in paragraph (2), by redesignating subparagraphs 
                (A) and (B) as clauses (i) and (ii), respectively, and 
                adjusting the clause margins accordingly;
                    (E) by redesignating paragraphs (1) through (5) as 
                subparagraphs (A) through (E), respectively, and 
                adjusting the subparagraph margins accordingly;

[[Page 124 STAT. 1874]]

                    (F) in the matter preceding subparagraph (A), as so 
                redesignated, by striking ``The Commission'' and 
                inserting the following:
            ``(1) In general.--The Commission'';
                    (G) in subparagraph (D), as so redesignated--
                          (i) by striking ``furnish'' and inserting 
                      ``file''; and
                          (ii) by striking ``or'' at the end.
                    (H) in subparagraph (E), as so redesignated, by 
                striking the period at the end and inserting a 
                semicolon; and
                    (I) by adding at the end the following:
                    ``(F) has failed reasonably to supervise, with a 
                view to preventing a violation of the securities laws, 
                an individual who commits such a violation, if the 
                individual is subject to the supervision of that person.
            ``(2) Suspension or revocation for particular class of 
        securities.--
                    ``(A) In general.--The Commission may temporarily 
                suspend or permanently revoke the registration of a 
                nationally recognized statistical rating organization 
                with respect to a particular class or subclass of 
                securities, if the Commission finds, on the record after 
                notice and opportunity for hearing, that the nationally 
                recognized statistical rating organization does not have 
                adequate financial and managerial resources to 
                consistently produce credit ratings with integrity.
                    ``(B) Considerations.--In making any determination 
                under subparagraph (A), the Commission shall consider--
                          ``(i) whether the nationally recognized 
                      statistical rating organization has failed over a 
                      sustained period of time, as determined by the 
                      Commission, to produce ratings that are accurate 
                      for that class or subclass of securities; and
                          ``(ii) such other factors as the Commission 
                      may determine.'';
            (4) in subsection (h), by adding at the end the following:
            ``(3) Separation of ratings from sales and marketing.--
                    ``(A) Rules required.--The Commission shall issue 
                rules to prevent the sales and marketing considerations 
                of a nationally recognized statistical rating 
                organization from influencing the production of ratings 
                by the nationally recognized statistical rating 
                organization.
                    ``(B) Contents of rules.--The rules issued under 
                subparagraph (A) shall provide for--
                          ``(i) exceptions for small nationally 
                      recognized statistical rating organizations with 
                      respect to which the Commission determines that 
                      the separation of the production of ratings and 
                      sales and marketing activities is not appropriate; 
                      and
                          ``(ii) suspension or revocation of the 
                      registration of a nationally recognized 
                      statistical rating organization, if the Commission 
                      finds, on the record, after notice and opportunity 
                      for a hearing, that--
                                    ``(I) the nationally recognized 
                                statistical rating organization has 
                                committed a violation of a rule issued 
                                under this subsection; and
                                    ``(II) the violation of a rule 
                                issued under this subsection affected a 
                                rating.

[[Page 124 STAT. 1875]]

            ``(4) Look-back requirement.--
                    ``(A) Review by the nationally recognized 
                statistical rating organization.-- 
                <<NOTE: Procedures.>> Each nationally recognized 
                statistical rating organization shall establish, 
                maintain, and enforce policies and procedures reasonably 
                designed to ensure that, in any case in which an 
                employee of a person subject to a credit rating of the 
                nationally recognized statistical rating organization or 
                the issuer, underwriter, or sponsor of a security or 
                money market instrument subject to a credit rating of 
                the nationally recognized statistical rating 
                organization was employed by the nationally recognized 
                statistical rating organization and participated in any 
                capacity in determining credit ratings for the person or 
                the securities or money market instruments during the 1-
                year period preceding the date an action was taken with 
                respect to the credit rating, the nationally recognized 
                statistical rating organization shall--
                          ``(i) conduct a review to determine whether 
                      any conflicts of interest of the employee 
                      influenced the credit rating; and
                          ``(ii) take action to revise the rating if 
                      appropriate, in accordance with such rules as the 
                      Commission shall prescribe.
                    ``(B) Review by commission.--
                          ``(i) In general.--The Commission shall 
                      conduct periodic reviews of the policies described 
                      in subparagraph (A) and the implementation of the 
                      policies at each nationally recognized statistical 
                      rating organization to ensure they are reasonably 
                      designed and implemented to most effectively 
                      eliminate conflicts of interest.
                          ``(ii) Timing of reviews.--The Commission 
                      shall review the code of ethics and conflict of 
                      interest policy of each nationally recognized 
                      statistical rating organization--
                                    ``(I) not less frequently than 
                                annually; and
                                    ``(II) whenever such policies are 
                                materially modified or amended.
            ``(5) Report to commission on certain employment 
        transitions.--
                    ``(A) Report required.--Each nationally recognized 
                statistical rating organization shall report to the 
                Commission any case such organization knows or can 
                reasonably be expected to know where a person associated 
                with such organization within the previous 5 years 
                obtains employment with any obligor, issuer, 
                underwriter, or sponsor of a security or money market 
                instrument for which the organization issued a credit 
                rating during the 12-month period prior to such 
                employment, if such employee--
                          ``(i) was a senior officer of such 
                      organization;
                          ``(ii) participated in any capacity in 
                      determining credit ratings for such obligor, 
                      issuer, underwriter, or sponsor; or
                          ``(iii) supervised an employee described in 
                      clause (ii).

[[Page 124 STAT. 1876]]

                    ``(B) Public disclosure.--Upon receiving such a 
                report, the Commission shall make such information 
                publicly available.'';
            (5) in subsection (j)--
                    (A) by striking ``Each'' and inserting the 
                following:
            ``(1) In general.--Each''; and
                    (B) by adding at the end the following:
            ``(2) Limitations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an individual designated under 
                paragraph (1) may not, while serving in the designated 
                capacity--
                          ``(i) perform credit ratings;
                          ``(ii) participate in the development of 
                      ratings methodologies or models;
                          ``(iii) perform marketing or sales functions; 
                      or
                          ``(iv) participate in establishing 
                      compensation levels, other than for employees 
                      working for that individual.
                    ``(B) Exception.--The Commission may exempt a small 
                nationally recognized statistical rating organization 
                from the limitations under this paragraph, if the 
                Commission finds that compliance with such limitations 
                would impose an unreasonable burden on the nationally 
                recognized statistical rating organization.
            ``(3) Other duties.-- <<NOTE: Procedures.>> Each individual 
        designated under paragraph (1) shall establish procedures for 
        the receipt, retention, and treatment of--
                    ``(A) complaints regarding credit ratings, models, 
                methodologies, and compliance with the securities laws 
                and the policies and procedures developed under this 
                section; and
                    ``(B) confidential, anonymous complaints by 
                employees or users of credit ratings.
            ``(4) Compensation.--The compensation of each compliance 
        officer appointed under paragraph (1) shall not be linked to the 
        financial performance of the nationally recognized statistical 
        rating organization and shall be arranged so as to ensure the 
        independence of the officer's judgment.
            ``(5) Annual reports required.--
                    ``(A) Annual reports required.--Each individual 
                designated under paragraph (1) shall submit to the 
                nationally recognized statistical rating organization an 
                annual report on the compliance of the nationally 
                recognized statistical rating organization with the 
                securities laws and the policies and procedures of the 
                nationally recognized statistical rating organization 
                that includes--
                          ``(i) a description of any material changes to 
                      the code of ethics and conflict of interest 
                      policies of the nationally recognized statistical 
                      rating organization; and
                          ``(ii) a certification that the report is 
                      accurate and complete.
                    ``(B) Submission of reports to the commission.--Each 
                nationally recognized statistical rating organization 
                shall file the reports required under subparagraph (A) 
                together with the financial report that is required to 
                be submitted to the Commission under this section.'';

[[Page 124 STAT. 1877]]

            (6) in subsection (k), by striking ``furnish to'' and 
        inserting ``file with'';
            (7) in subsection (l)(2)(A)(i), by striking ``furnished'' 
        and inserting ``filed''; and
            (8) by striking subsection (p) and inserting the following:

    ``(p) Regulation of Nationally Recognized Statistical Rating 
Organizations.--
            ``(1) Establishment of office of credit ratings.--
                    ``(A) Office established.--The Commission shall 
                establish within the Commission an Office of Credit 
                Ratings (referred to in this subsection as the `Office') 
                to administer the rules of the Commission--
                          ``(i) with respect to the practices of 
                      nationally recognized statistical rating 
                      organizations in determining ratings, for the 
                      protection of users of credit ratings and in the 
                      public interest;
                          ``(ii) to promote accuracy in credit ratings 
                      issued by nationally recognized statistical rating 
                      organizations; and
                          ``(iii) to ensure that such ratings are not 
                      unduly influenced by conflicts of interest.
                    ``(B) Director of the office.--The head of the 
                Office shall be the Director, who shall report to the 
                Chairman.
            ``(2) Staffing.--The Office established under this 
        subsection shall be staffed sufficiently to carry out fully the 
        requirements of this section. The staff shall include persons 
        with knowledge of and expertise in corporate, municipal, and 
        structured debt finance.
            ``(3) Commission examinations.--
                    ``(A) Annual examinations required.--The Office 
                shall conduct an examination of each nationally 
                recognized statistical rating organization at least 
                annually.
                    ``(B) Conduct of examinations.--Each examination 
                under subparagraph (A) shall include a review of--
                          ``(i) whether the nationally recognized 
                      statistical rating organization conducts business 
                      in accordance with the policies, procedures, and 
                      rating methodologies of the nationally recognized 
                      statistical rating organization;
                          ``(ii) the management of conflicts of interest 
                      by the nationally recognized statistical rating 
                      organization;
                          ``(iii) implementation of ethics policies by 
                      the nationally recognized statistical rating 
                      organization;
                          ``(iv) the internal supervisory controls of 
                      the nationally recognized statistical rating 
                      organization;
                          ``(v) the governance of the nationally 
                      recognized statistical rating organization;
                          ``(vi) the activities of the individual 
                      designated by the nationally recognized 
                      statistical rating organization under subsection 
                      (j)(1);
                          ``(vii) the processing of complaints by the 
                      nationally recognized statistical rating 
                      organization; and
                          ``(viii) the policies of the nationally 
                      recognized statistical rating organization 
                      governing the post-employment activities of former 
                      staff of the nationally recognized statistical 
                      rating organization.

[[Page 124 STAT. 1878]]

                    ``(C) Inspection reports.-- <<NOTE: Public 
                information.>> The Commission shall make available to 
                the public, in an easily understandable format, an 
                annual report summarizing--
                          ``(i) the essential findings of all 
                      examinations conducted under subparagraph (A), as 
                      deemed appropriate by the Commission;
                          ``(ii) the responses by the nationally 
                      recognized statistical rating organizations to any 
                      material regulatory deficiencies identified by the 
                      Commission under clause (i); and
                          ``(iii) whether the nationally recognized 
                      statistical rating organizations have 
                      appropriately addressed the recommendations of the 
                      Commission contained in previous reports under 
                      this subparagraph.
            ``(4) <<NOTE: Fines. Penalties.>>  Rulemaking authority.--
        The Commission shall--
                    ``(A) establish, by rule, fines, and other penalties 
                applicable to any nationally recognized statistical 
                rating organization that violates the requirements of 
                this section and the rules thereunder; and
                    ``(B) issue such rules as may be necessary to carry 
                out this section.

    ``(q) Transparency of Ratings Performance.--
            ``(1) Rulemaking required.-- <<NOTE: Public 
        information.>> The Commission shall, by rule, require that each 
        nationally recognized statistical rating organization publicly 
        disclose information on the initial credit ratings determined by 
        the nationally recognized statistical rating organization for 
        each type of obligor, security, and money market instrument, and 
        any subsequent changes to such credit ratings, for the purpose 
        of allowing users of credit ratings to evaluate the accuracy of 
        ratings and compare the performance of ratings by different 
        nationally recognized statistical rating organizations.
            ``(2) Content.--The rules of the Commission under this 
        subsection shall require, at a minimum, disclosures that--
                    ``(A) are comparable among nationally recognized 
                statistical rating organizations, to allow users of 
                credit ratings to compare the performance of credit 
                ratings across nationally recognized statistical rating 
                organizations;
                    ``(B) are clear and informative for investors having 
                a wide range of sophistication who use or might use 
                credit ratings;
                    ``(C) include performance information over a range 
                of years and for a variety of types of credit ratings, 
                including for credit ratings withdrawn by the nationally 
                recognized statistical rating organization;
                    ``(D) are published and made freely available by the 
                nationally recognized statistical rating organization, 
                on an easily accessible portion of its website, and in 
                writing, when requested;
                    ``(E) are appropriate to the business model of a 
                nationally recognized statistical rating organization; 
                and
                    ``(F) each nationally recognized statistical rating 
                organization include an attestation with any credit 
                rating it issues affirming that no part of the rating 
                was influenced by any other business activities, that 
                the rating was based solely on the merits of the 
                instruments being rated, and

[[Page 124 STAT. 1879]]

                that such rating was an independent evaluation of the 
                risks and merits of the instrument.

    ``(r) Credit Ratings Methodologies.-- <<NOTE: Regulations.>> The 
Commission shall prescribe rules, for the protection of investors and in 
the public interest, with respect to the procedures and methodologies, 
including qualitative and quantitative data and models, used by 
nationally recognized statistical rating organizations that require each 
nationally recognized statistical rating organization--
            ``(1) to ensure that credit ratings are determined using 
        procedures and methodologies, including qualitative and 
        quantitative data and models, that are--
                    ``(A) approved by the board of the nationally 
                recognized statistical rating organization, a body 
                performing a function similar to that of a board; and
                    ``(B) in accordance with the policies and procedures 
                of the nationally recognized statistical rating 
                organization for the development and modification of 
                credit rating procedures and methodologies;
            ``(2) to ensure that when material changes to credit rating 
        procedures and methodologies (including changes to qualitative 
        and quantitative data and models) are made, that--
                    ``(A) the changes are applied consistently to all 
                credit ratings to which the changed procedures and 
                methodologies apply;
                    ``(B) to the extent that changes are made to credit 
                rating surveillance procedures and methodologies, the 
                changes are applied to then-current credit ratings by 
                the nationally recognized statistical rating 
                organization within a reasonable time period determined 
                by the Commission, by rule; and
                    ``(C) the nationally recognized statistical rating 
                organization publicly discloses the reason for the 
                change; and
            ``(3) <<NOTE: Notification.>>  to notify users of credit 
        ratings--
                    ``(A) of the version of a procedure or methodology, 
                including the qualitative methodology or quantitative 
                inputs, used with respect to a particular credit rating;
                    ``(B) when a material change is made to a procedure 
                or methodology, including to a qualitative model or 
                quantitative inputs;
                    ``(C) when a significant error is identified in a 
                procedure or methodology, including a qualitative or 
                quantitative model, that may result in credit rating 
                actions; and
                    ``(D) of the likelihood of a material change 
                described in subparagraph (B) resulting in a change in 
                current credit ratings.

    ``(s) Transparency of Credit Rating Methodologies and Information 
Reviewed.--
            ``(1) Form for disclosures.-- <<NOTE: Regulations.>> The 
        Commission shall require, by rule, each nationally recognized 
        statistical rating organization to prescribe a form to accompany 
        the publication of each credit rating that discloses--
                    ``(A) information relating to--
                          ``(i) the assumptions underlying the credit 
                      rating procedures and methodologies;
                          ``(ii) the data that was relied on to 
                      determine the credit rating; and

[[Page 124 STAT. 1880]]

                          ``(iii) if applicable, how the nationally 
                      recognized statistical rating organization used 
                      servicer or remittance reports, and with what 
                      frequency, to conduct surveillance of the credit 
                      rating; and
                    ``(B) information that can be used by investors and 
                other users of credit ratings to better understand 
                credit ratings in each class of credit rating issued by 
                the nationally recognized statistical rating 
                organization.
            ``(2) Format.--The form developed under paragraph (1) 
        shall--
                    ``(A) be easy to use and helpful for users of credit 
                ratings to understand the information contained in the 
                report;
                    ``(B) require the nationally recognized statistical 
                rating organization to provide the content described in 
                paragraph (3)(B) in a manner that is directly comparable 
                across types of securities; and
                    ``(C) be made readily available to users of credit 
                ratings, in electronic or paper form, as the Commission 
                may, by rule, determine.
            ``(3) Content of form.--
                    ``(A) Qualitative content.--Each nationally 
                recognized statistical rating organization shall 
                disclose on the form developed under paragraph (1)--
                          ``(i) the credit ratings produced by the 
                      nationally recognized statistical rating 
                      organization;
                          ``(ii) the main assumptions and principles 
                      used in constructing procedures and methodologies, 
                      including qualitative methodologies and 
                      quantitative inputs and assumptions about the 
                      correlation of defaults across underlying assets 
                      used in rating structured products;
                          ``(iii) the potential limitations of the 
                      credit ratings, and the types of risks excluded 
                      from the credit ratings that the nationally 
                      recognized statistical rating organization does 
                      not comment on, including liquidity, market, and 
                      other risks;
                          ``(iv) information on the uncertainty of the 
                      credit rating, including--
                                    ``(I) information on the 
                                reliability, accuracy, and quality of 
                                the data relied on in determining the 
                                credit rating; and
                                    ``(II) a statement relating to the 
                                extent to which data essential to the 
                                determination of the credit rating were 
                                reliable or limited, including--
                                            ``(aa) any limits on the 
                                        scope of historical data; and
                                            ``(bb) any limits in 
                                        accessibility to certain 
                                        documents or other types of 
                                        information that would have 
                                        better informed the credit 
                                        rating;
                          ``(v) whether and to what extent third party 
                      due diligence services have been used by the 
                      nationally recognized statistical rating 
                      organization, a description of the information 
                      that such third party reviewed in conducting due 
                      diligence services, and a description of the 
                      findings or conclusions of such third party;

[[Page 124 STAT. 1881]]

                          ``(vi) a description of the data about any 
                      obligor, issuer, security, or money market 
                      instrument that were relied upon for the purpose 
                      of determining the credit rating;
                          ``(vii) a statement containing an overall 
                      assessment of the quality of information available 
                      and considered in producing a rating for an 
                      obligor, security, or money market instrument, in 
                      relation to the quality of information available 
                      to the nationally recognized statistical rating 
                      organization in rating similar issuances;
                          ``(viii) information relating to conflicts of 
                      interest of the nationally recognized statistical 
                      rating organization; and
                          ``(ix) such additional information as the 
                      Commission may require.
                    ``(B) Quantitative content.--Each nationally 
                recognized statistical rating organization shall 
                disclose on the form developed under this subsection--
                          ``(i) an explanation or measure of the 
                      potential volatility of the credit rating, 
                      including--
                                    ``(I) any factors that might lead to 
                                a change in the credit ratings; and
                                    ``(II) the magnitude of the change 
                                that a user can expect under different 
                                market conditions;
                          ``(ii) information on the content of the 
                      rating, including--
                                    ``(I) the historical performance of 
                                the rating; and
                                    ``(II) the expected probability of 
                                default and the expected loss in the 
                                event of default;
                          ``(iii) information on the sensitivity of the 
                      rating to assumptions made by the nationally 
                      recognized statistical rating organization, 
                      including--
                                    ``(I) 5 assumptions made in the 
                                ratings process that, without accounting 
                                for any other factor, would have the 
                                greatest impact on a rating if the 
                                assumptions were proven false or 
                                inaccurate; and
                                    ``(II) an analysis, using specific 
                                examples, of how each of the 5 
                                assumptions identified under subclause 
                                (I) impacts a rating;
                          ``(iv) such additional information as may be 
                      required by the Commission.
            ``(4) Due diligence services for asset-backed securities.--
                    ``(A) Findings.-- <<NOTE: Public information.>> The 
                issuer or underwriter of any asset-backed security shall 
                make publicly available the findings and conclusions of 
                any third-party due diligence report obtained by the 
                issuer or underwriter.
                    ``(B) Certification required.--In any case in which 
                third-party due diligence services are employed by a 
                nationally recognized statistical rating organization, 
                an issuer, or an underwriter, the person providing the 
                due diligence services shall provide to any nationally 
                recognized statistical rating organization that produces 
                a rating to which

[[Page 124 STAT. 1882]]

                such services relate, written certification, as provided 
                in subparagraph (C).
                    ``(C) Format and content.--The Commission shall 
                establish the appropriate format and content for the 
                written certifications required under subparagraph (B), 
                to ensure that providers of due diligence services have 
                conducted a thorough review of data, documentation, and 
                other relevant information necessary for a nationally 
                recognized statistical rating organization to provide an 
                accurate rating.
                    ``(D) Disclosure of certification.-- 
                <<NOTE: Regulations. Public information.>> The 
                Commission shall adopt rules requiring a nationally 
                recognized statistical rating organization, at the time 
                at which the nationally recognized statistical rating 
                organization produces a rating, to disclose the 
                certification described in subparagraph (B) to the 
                public in a manner that allows the public to determine 
                the adequacy and level of due diligence services 
                provided by a third party.

    ``(t) Corporate Governance, Organization, and Management of 
Conflicts of Interest.--
            ``(1) Board of directors.-- <<NOTE: Establishment.>> Each 
        nationally recognized statistical rating organization shall have 
        a board of directors.
            ``(2) Independent directors.--
                    ``(A) In general.--At least \1/2\ of the board of 
                directors, but not fewer than 2 of the members thereof, 
                shall be independent of the nationally recognized 
                statistical rating agency. A portion of the independent 
                directors shall include users of ratings from a 
                nationally recognized statistical rating organization.
                    ``(B) Independence determination.--In order to be 
                considered independent for purposes of this subsection, 
                a member of the board of directors of a nationally 
                recognized statistical rating organization--
                          ``(i) may not, other than in his or her 
                      capacity as a member of the board of directors or 
                      any committee thereof--
                                    ``(I) accept any consulting, 
                                advisory, or other compensatory fee from 
                                the nationally recognized statistical 
                                rating organization; or
                                    ``(II) be a person associated with 
                                the nationally recognized statistical 
                                rating organization or with any 
                                affiliated company thereof; and
                          ``(ii) shall be disqualified from any 
                      deliberation involving a specific rating in which 
                      the independent board member has a financial 
                      interest in the outcome of the rating.
                    ``(C) Compensation and term.--The compensation of 
                the independent members of the board of directors of a 
                nationally recognized statistical rating organization 
                shall not be linked to the business performance of the 
                nationally recognized statistical rating organization, 
                and shall be arranged so as to ensure the independence 
                of their judgment. The term of office of the independent 
                directors shall be for a pre-agreed fixed period, not to 
                exceed 5 years, and shall not be renewable.
            ``(3) Duties of board of directors.--In addition to the 
        overall responsibilities of the board of directors, the board 
        shall oversee--

[[Page 124 STAT. 1883]]

                    ``(A) the establishment, maintenance, and 
                enforcement of policies and procedures for determining 
                credit ratings;
                    ``(B) the establishment, maintenance, and 
                enforcement of policies and procedures to address, 
                manage, and disclose any conflicts of interest;
                    ``(C) the effectiveness of the internal control 
                system with respect to policies and procedures for 
                determining credit ratings; and
                    ``(D) the compensation and promotion policies and 
                practices of the nationally recognized statistical 
                rating organization.
            ``(4) Treatment of nrsro subsidiaries.--If a nationally 
        recognized statistical rating organization is a subsidiary of a 
        parent entity, the board of the directors of the parent entity 
        may satisfy the requirements of this subsection by assigning to 
        a committee of such board of directors the duties under 
        paragraph (3), if--
                    ``(A) at least \1/2\ of the members of the committee 
                (including the chairperson of the committee) are 
                independent, as defined in this section; and
                    ``(B) at least 1 member of the committee is a user 
                of ratings from a nationally recognized statistical 
                rating organization.
            ``(5) Exception authority.--If the Commission finds that 
        compliance with the provisions of this subsection present an 
        unreasonable burden on a small nationally recognized statistical 
        rating organization, the Commission may permit the nationally 
        recognized statistical rating organization to delegate such 
        responsibilities to a committee that includes at least one 
        individual who is a user of ratings of a nationally recognized 
        statistical rating organization.''.

    (b) Conforming Amendment.--Section 3(a)(62) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)(62)) is amended by striking 
subparagraph (A) and redesignating subparagraphs (B) and (C) as 
subparagraphs (A) and (B), respectively.
SEC. 933. STATE OF MIND IN PRIVATE ACTIONS.

    (a) Accountability.--Section 15E(m) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o-7(m)) is amended to read as follows:
    ``(m) Accountability.--
            ``(1) In general.-- <<NOTE: Applicability.>> The enforcement 
        and penalty provisions of this title shall apply to statements 
        made by a credit rating agency in the same manner and to the 
        same extent as such provisions apply to statements made by a 
        registered public accounting firm or a securities analyst under 
        the securities laws, and such statements shall not be deemed 
        forward-looking statements for the purposes of section 21E.
            ``(2) Rulemaking.--The Commission shall issue such rules as 
        may be necessary to carry out this subsection.''.

    (b) State of Mind.--Section 21D(b)(2) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78u-4(b)(2)) is amended--
            (1) by striking ``In any'' and inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in any''; and
            (2) by adding at the end the following:

[[Page 124 STAT. 1884]]

                    ``(B) Exception.--In the case of an action for money 
                damages brought against a credit rating agency or a 
                controlling person under this title, it shall be 
                sufficient, for purposes of pleading any required state 
                of mind in relation to such action, that the complaint 
                state with particularity facts giving rise to a strong 
                inference that the credit rating agency knowingly or 
                recklessly failed--
                          ``(i) to conduct a reasonable investigation of 
                      the rated security with respect to the factual 
                      elements relied upon by its own methodology for 
                      evaluating credit risk; or
                          ``(ii) to obtain reasonable verification of 
                      such factual elements (which verification may be 
                      based on a sampling technique that does not amount 
                      to an audit) from other sources that the credit 
                      rating agency considered to be competent and that 
                      were independent of the issuer and underwriter.''.
SEC. 934. REFERRING TIPS TO LAW ENFORCEMENT OR REGULATORY 
                        AUTHORITIES.

    Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7), as amended by this subtitle, is amended by adding at the end the 
following:
    ``(u) Duty To Report Tips Alleging Material Violations of Law.--
            ``(1) Duty to report.--Each nationally recognized 
        statistical rating organization shall refer to the appropriate 
        law enforcement or regulatory authorities any information that 
        the nationally recognized statistical rating organization 
        receives from a third party and finds credible that alleges that 
        an issuer of securities rated by the nationally recognized 
        statistical rating organization has committed or is committing a 
        material violation of law that has not been adjudicated by a 
        Federal or State court.
            ``(2) Rule of construction.--Nothing in paragraph (1) may be 
        construed to require a nationally recognized statistical rating 
        organization to verify the accuracy of the information described 
        in paragraph (1).''.
SEC. 935. CONSIDERATION OF INFORMATION FROM SOURCES OTHER THAN THE 
                        ISSUER IN RATING DECISIONS.

    Section 15E of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
7), as amended by this subtitle, is amended by adding at the end the 
following:
    ``(v) Information From Sources Other Than the Issuer.--In producing 
a credit rating, a nationally recognized statistical rating organization 
shall consider information about an issuer that the nationally 
recognized statistical rating organization has, or receives from a 
source other than the issuer or underwriter, that the nationally 
recognized statistical rating organization finds credible and 
potentially significant to a rating decision.''.
SEC. 936. <<NOTE: 15 USC 78o-7 note.>> QUALIFICATION STANDARDS FOR 
                        CREDIT RATING ANALYSTS.

    Not <<NOTE: Deadline. Regulations.>>  later than 1 year after the 
date of enactment of this Act, the Commission shall issue rules that are 
reasonably designed to ensure that any person employed by a nationally 
recognized statistical rating organization to perform credit ratings--

[[Page 124 STAT. 1885]]

            (1) meets standards of training, experience, and competence 
        necessary to produce accurate ratings for the categories of 
        issuers whose securities the person rates; and
            (2) is tested for knowledge of the credit rating process.
SEC. 937. <<NOTE: 15 USC 78o-7 note.>> TIMING OF REGULATIONS.

    Unless otherwise specifically provided in this subtitle, the 
Commission shall issue final regulations, as required by this subtitle 
and the amendments made by this subtitle, not later than 1 year after 
the date of enactment of this Act.
SEC. 938. <<NOTE: 15 USC 78o-8.>> UNIVERSAL RATINGS SYMBOLS.

    (a) <<NOTE: Procedures.>>  Rulemaking.--The Commission shall 
require, by rule, each nationally recognized statistical rating 
organization to establish, maintain, and enforce written policies and 
procedures that--
            (1) assess the probability that an issuer of a security or 
        money market instrument will default, fail to make timely 
        payments, or otherwise not make payments to investors in 
        accordance with the terms of the security or money market 
        instrument;
            (2) clearly define and disclose the meaning of any symbol 
        used by the nationally recognized statistical rating 
        organization to denote a credit rating; and
            (3) apply any symbol described in paragraph (2) in a manner 
        that is consistent for all types of securities and money market 
        instruments for which the symbol is used.

    (b) Rule of Construction.--Nothing in this section shall prohibit a 
nationally recognized statistical rating organization from using 
distinct sets of symbols to denote credit ratings for different types of 
securities or money market instruments.
SEC. 939. REMOVAL OF STATUTORY REFERENCES TO CREDIT RATINGS.

    (a) Federal Deposit Insurance Act.--The Federal Deposit Insurance 
Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 7(b)(1)(E)(i), <<NOTE: 12 USC 1817.>> by 
        striking ``credit rating entities, and other private economic'' 
        and insert ``private economic, credit,'';
            (2) in section <<NOTE: 12 USC 1831e.>> 28(d)--
                    (A) in the subsection heading, by striking ``Not of 
                Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does not meet 
                standards of credit-worthiness as established by the 
                Corporation'';
                    (C) in paragraph (2), by striking ``not of 
                investment grade'';
                    (D) by striking paragraph (3);
                    (E) by redesignating paragraph (4) as paragraph (3); 
                and
                    (F) in paragraph (3), as so redesignated--
                          (i) by striking subparagraph (A);
                          (ii) by redesignating subparagraphs (B) and 
                      (C) as subparagraphs (A) and (B), respectively; 
                      and
                          (iii) in subparagraph (B), as so redesignated, 
                      by striking ``not of investment grade'' and 
                      inserting ``that does not meet standards of 
                      credit-worthiness as established by the 
                      Corporation''; and
            (3) in section 28(e)--

[[Page 124 STAT. 1886]]

                    (A) in the subsection heading, by striking ``Not of 
                Investment Grade'';
                    (B) in paragraph (1), by striking ``not of 
                investment grade'' and inserting ``that does not meet 
                standards of credit-worthiness as established by the 
                Corporation''; and
                    (C) in paragraphs (2) and (3), by striking ``not of 
                investment grade'' each place that it appears and 
                inserting ``that does not meet standards of credit-
                worthiness established by the Corporation''.

    (b) Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.--Section 1319 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended by striking 
``that is a nationally recognized statistical rating organization, as 
such term is defined in section 3(a) of the Securities Exchange Act of 
1934,''.
    (c) Investment Company Act of 1940.--Section 6(a)(5)(A)(iv)(I) 
Investment Company Act of 1940 (15 U.S.C. 80a-6(a)(5)(A)(iv)(I)) is 
amended by striking ``is rated investment grade by not less than 1 
nationally recognized statistical rating organization'' and inserting 
``meets such standards of credit-worthiness as the Commission shall 
adopt''.
    (d) Revised Statutes.--Section 5136A of title LXII of the Revised 
Statutes of the United States (12 U.S.C. 24a) is amended--
            (1) in subsection (a)(2)(E), by striking ``any applicable 
        rating'' and inserting ``standards of credit-worthiness 
        established by the Comptroller of the Currency'';
            (2) in the heading for subsection (a)(3) by striking 
        ``Rating or Comparable Requirement'' and inserting 
        ``Requirement'';
            (3) subsection (a)(3), by amending subparagraph (A) to read 
        as follows:
                    ``(A) In general.--A national bank meets the 
                requirements of this paragraph if the bank is one of the 
                100 largest insured banks and has not fewer than 1 issue 
                of outstanding debt that meets standards of credit-
                worthiness or other criteria as the Secretary of the 
                Treasury and the Board of Governors of the Federal 
                Reserve System may jointly establish.''.
            (4) in the heading for subsection (f), by striking 
        ``Maintain Public Rating or'' and inserting ``Meet Standards of 
        Credit-worthiness''; and
            (5) in subsection (f)(1), by striking ``any applicable 
        rating'' and inserting ``standards of credit-worthiness 
        established by the Comptroller of the Currency''.

    (e) Securities Exchange Act of 1934.--Section 3(a) Securities 
Exchange Act of 1934 <<NOTE: 15 USC 78c.>> (15 U.S.C. 78a(3)(a)) is 
amended--
            (1) in paragraph (41), by striking ``is rated in one of the 
        two highest rating categories by at least one nationally 
        recognized statistical rating organization'' and inserting 
        ``meets standards of credit-worthiness as established by the 
        Commission''; and
            (2) in paragraph (53)(A), by striking ``is rated in 1 of the 
        4 highest rating categories by at least 1 nationally recognized 
        statistical rating organization'' and inserting ``meets 
        standards of credit-worthiness as established by the 
        Commission''.

    (f) World Bank Discussions.--Section 3(a)(6) of the amendment in the 
nature of a substitute to the text of H.R. 4645, as ordered reported 
from the Committee on Banking, Finance and

[[Page 124 STAT. 1887]]

Urban Affairs on September 22, 1988, as enacted into law by section 555 
of Public Law 100-461, (22 U.S.C. 286hh(a)(6)), is amended by striking 
``credit rating'' and inserting ``credit-worthiness''.
    (g) <<NOTE: 12 USC 24a note.>>  Effective Date.--The amendments made 
by this section shall take effect 2 years after the date of enactment of 
this Act.

    (h) Study and Report.--
            (1) In general.--Commission shall undertake a study on the 
        feasability and desirability of--
                    (A) standardizing credit ratings terminology, so 
                that all credit rating agencies issue credit ratings 
                using identical terms;
                    (B) standardizing the market stress conditions under 
                which ratings are evaluated;
                    (C) requiring a quantitative correspondence between 
                credit ratings and a range of default probabilities and 
                loss expectations under standardized conditions of 
                economic stress; and
                    (D) standardizing credit rating terminology across 
                asset classes, so that named ratings correspond to a 
                standard range of default probabilities and expected 
                losses independent of asset class and issuing entity.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall submit to Congress a 
        report containing the findings of the study under paragraph (1) 
        and the recommendations, if any, of the Commission with respect 
        to the study.
SEC. 939A. <<NOTE: Regulations. 15 USC 78o-7 note.>> REVIEW OF 
                          RELIANCE ON RATINGS.

    (a) Agency Review.-- <<NOTE: Deadline.>> Not later than 1 year after 
the date of the enactment of this subtitle, each Federal agency shall, 
to the extent applicable, review--
            (1) any regulation issued by such agency that requires the 
        use of an assessment of the credit-worthiness of a security or 
        money market instrument; and
            (2) any references to or requirements in such regulations 
        regarding credit ratings.

    (b) Modifications Required.--Each such agency shall modify any such 
regulations identified by the review conducted under subsection (a) to 
remove any reference to or requirement of reliance on credit ratings and 
to substitute in such regulations such standard of credit-worthiness as 
each respective agency shall determine as appropriate for such 
regulations. <<NOTE: Standards.>> In making such determination, such 
agencies shall seek to establish, to the extent feasible, uniform 
standards of credit-worthiness for use by each such agency, taking into 
account the entities regulated by each such agency and the purposes for 
which such entities would rely on such standards of credit-worthiness.

    (c) Report.--Upon conclusion of the review required under subsection 
(a), each Federal agency shall transmit a report to Congress containing 
a description of any modification of any regulation such agency made 
pursuant to subsection (b).
SEC. 939B. <<NOTE: 15 USC 78m note.>> ELIMINATION OF EXEMPTION 
                          FROM FAIR DISCLOSURE RULE.

    Not <<NOTE: Deadline.>> later than 90 days after the date of 
enactment of this subtitle, the Securities Exchange Commission shall 
revise Regulation FD (17 C.F.R. 243.100) to remove from such regulation 
the

[[Page 124 STAT. 1888]]

exemption for entities whose primary business is the issuance of credit 
ratings (17 C.F.R. 243.100(b)(2)(iii)).
SEC. 939C. SECURITIES AND EXCHANGE COMMISSION STUDY ON 
                          STRENGTHENING CREDIT RATING AGENCY 
                          INDEPENDENCE.

    (a) Study.--The Commission shall conduct a study of--
            (1) the independence of nationally recognized statistical 
        rating organizations; and
            (2) how the independence of nationally recognized 
        statistical rating organizations affects the ratings issued by 
        the nationally recognized statistical rating organizations.

    (b) Subjects for Evaluation.--In conducting the study under 
subsection (a), the Commission shall evaluate--
            (1) the management of conflicts of interest raised by a 
        nationally recognized statistical rating organization providing 
        other services, including risk management advisory services, 
        ancillary assistance, or consulting services;
            (2) the potential impact of rules prohibiting a nationally 
        recognized statistical rating organization that provides a 
        rating to an issuer from providing other services to the issuer; 
        and
            (3) any other issue relating to nationally recognized 
        statistical rating organizations, as the Chairman of the 
        Commission determines is appropriate.

    (c) Report.--Not later than 3 years after the date of enactment of 
this Act, the Chairman of the Commission shall submit to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives a report on the 
results of the study conducted under subsection (a), including 
recommendations, if any, for improving the integrity of ratings issued 
by nationally recognized statistical rating organizations.
SEC. 939D. <<NOTE: 15 USC 78o-9 note.>> GOVERNMENT ACCOUNTABILITY 
                          OFFICE STUDY ON ALTERNATIVE BUSINESS 
                          MODELS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on alternative means for compensating nationally 
recognized statistical rating organizations in order to create 
incentives for nationally recognized statistical rating organizations to 
provide more accurate credit ratings, including any statutory changes 
that would be required to facilitate the use of an alternative means of 
compensation.
    (b) Report.--Not later than 18 months after the date of enactment of 
this Act, the Comptroller General shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives a report on the 
results of the study conducted under subsection (a), including 
recommendations, if any, for providing incentives to credit rating 
agencies to improve the credit rating process.
SEC. 939E. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE CREATION 
                          OF AN INDEPENDENT PROFESSIONAL ANALYST 
                          ORGANIZATION.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the feasibility and merits of creating an independent 
professional organization for rating analysts employed by nationally 
recognized statistical rating organizations that would be responsible 
for--

[[Page 124 STAT. 1889]]

            (1) establishing independent standards for governing the 
        profession of rating analysts;
            (2) establishing a code of ethical conduct; and
            (3) overseeing the profession of rating analysts.

    (b) Report.--Not later than 1 year after the date of publication of 
the rules issued by the Commission pursuant to section 936, the 
Comptroller General shall submit to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives a report on the results of the study 
conducted under subsection (a).
SEC. 939F. <<NOTE: 15 USC 78o-9.>> STUDY AND RULEMAKING ON 
                          ASSIGNED CREDIT RATINGS.

    (a) Definition.--In this section, the term ``structured finance 
product'' means an asset-backed security, as defined in section 3(a)(77) 
of the Securities Exchange Act of 1934, as added by section 941, and any 
structured product based on an asset-backed security, as determined by 
the Commission, by rule.
    (b) Study.--The Commission shall carry out a study of--
            (1) the credit rating process for structured finance 
        products and the conflicts of interest associated with the 
        issuer-pay and the subscriber-pay models;
            (2) the feasibility of establishing a system in which a 
        public or private utility or a self-regulatory organization 
        assigns nationally recognized statistical rating organizations 
        to determine the credit ratings of structured finance products, 
        including--
                    (A) an assessment of potential mechanisms for 
                determining fees for the nationally recognized 
                statistical rating organizations;
                    (B) appropriate methods for paying fees to the 
                nationally recognized statistical rating organizations;
                    (C) the extent to which the creation of such a 
                system would be viewed as the creation of moral hazard 
                by the Federal Government; and
                    (D) any constitutional or other issues concerning 
                the establishment of such a system;
            (3) the range of metrics that could be used to determine the 
        accuracy of credit ratings; and
            (4) alternative means for compensating nationally recognized 
        statistical rating organizations that would create incentives 
        for accurate credit ratings.

    (c) Report and Recommendation.--Not later than 24 months after the 
date of enactment of this Act, the Commission shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives a report 
that contains--
            (1) the findings of the study required under subsection (b); 
        and
            (2) any recommendations for regulatory or statutory changes 
        that the Commission determines should be made to implement the 
        findings of the study required under subsection (b).

    (d) Rulemaking.--
            (1) Rulemaking.-- <<NOTE: Determinations.>> After submission 
        of the report under subsection (c), the Commission shall, by 
        rule, as the Commission determines is necessary or appropriate 
        in the public interest or for the protection of investors, 
        establish a system

[[Page 124 STAT. 1890]]

        for the assignment of nationally recognized statistical rating 
        organizations to determine the initial credit ratings of 
        structured finance products, in a manner that prevents the 
        issuer, sponsor, or underwriter of the structured finance 
        product from selecting the nationally recognized statistical 
        rating organization that will determine the initial credit 
        ratings and monitor such credit ratings. In issuing any rule 
        under this paragraph, the Commission shall give thorough 
        consideration to the provisions of section 15E(w) of the 
        Securities Exchange Act of 1934, as that provision would have 
        been added by section 939D of H.R. 4173 (111th Congress), as 
        passed by the Senate on May 20, 2010, and shall implement the 
        system described in such section 939D unless the Commission 
        determines that an alternative system would better serve the 
        public interest and the protection of investors.
            (2) Rule of construction.--Nothing in this subsection may be 
        construed to limit or suspend any other rulemaking authority of 
        the Commission.
SEC. 939G. EFFECT OF RULE 436(G).

    Rule 436(g), promulgated by the Securities and Exchange Commission 
under the Securities Act of 1933, shall have no force or effect.
SEC. 939H. SENSE OF CONGRESS.

    It is the sense of Congress that the Securities and Exchange 
Commission should exercise the rulemaking authority of the Commission 
under section 15E(h)(2)(B) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-7(h)(2)(B)) to prevent improper conflicts of interest arising 
from employees of nationally recognized statistical rating organizations 
providing services to issuers of securities that are unrelated to the 
issuance of credit ratings, including consulting, advisory, and other 
services.

   Subtitle D--Improvements to the Asset-Backed Securitization Process

SEC. 941. REGULATION OF CREDIT RISK RETENTION.

    (a) Definition of Asset-backed Security.--Section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding 
at the end the following:
            ``(77) Asset-backed security.--The term `asset-backed 
        security'--
                    ``(A) means a fixed-income or other security 
                collateralized by any type of self-liquidating financial 
                asset (including a loan, a lease, a mortgage, or a 
                secured or unsecured receivable) that allows the holder 
                of the security to receive payments that depend 
                primarily on cash flow from the asset, including--
                          ``(i) a collateralized mortgage obligation;
                          ``(ii) a collateralized debt obligation;
                          ``(iii) a collateralized bond obligation;
                          ``(iv) a collateralized debt obligation of 
                      asset-backed securities;
                          ``(v) a collateralized debt obligation of 
                      collateralized debt obligations; and

[[Page 124 STAT. 1891]]

                          ``(vi) a security that the Commission, by 
                      rule, determines to be an asset-backed security 
                      for purposes of this section; and
                    ``(B) does not include a security issued by a 
                finance subsidiary held by the parent company or a 
                company controlled by the parent company, if none of the 
                securities issued by the finance subsidiary are held by 
                an entity that is not controlled by the parent 
                company.''.

    (b) Credit Risk Retention.--The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 15F, as added 
by this Act, the following:
``SEC. 15G. <<NOTE: 15 USC 78o-11.>> CREDIT RISK RETENTION.

    ``(a) Definitions.--In this section--
            ``(1) the term `Federal banking agencies' means the Office 
        of the Comptroller of the Currency, the Board of Governors of 
        the Federal Reserve System, and the Federal Deposit Insurance 
        Corporation;
            ``(2) the term `insured depository institution' has the same 
        meaning as in section 3(c) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1813(c));
            ``(3) the term `securitizer' means--
                    ``(A) an issuer of an asset-backed security; or
                    ``(B) a person who organizes and initiates an asset-
                backed securities transaction by selling or transferring 
                assets, either directly or indirectly, including through 
                an affiliate, to the issuer; and
            ``(4) the term `originator' means a person who--
                    ``(A) through the extension of credit or otherwise, 
                creates a financial asset that collateralizes an asset-
                backed security; and
                    ``(B) sells an asset directly or indirectly to a 
                securitizer.

    ``(b) Regulations <<NOTE: Deadline.>> Required.--
            ``(1) In general.--Not later than 270 days after the date of 
        enactment of this section, the Federal banking agencies and the 
        Commission shall jointly prescribe regulations to require any 
        securitizer to retain an economic interest in a portion of the 
        credit risk for any asset that the securitizer, through the 
        issuance of an asset-backed security, transfers, sells, or 
        conveys to a third party.
            ``(2) Residential mortgages.--Not later than 270 days after 
        the date of the enactment of this section, the Federal banking 
        agencies, the Commission, the Secretary of Housing and Urban 
        Development, and the Federal Housing Finance Agency, shall 
        jointly prescribe regulations to require any securitizer to 
        retain an economic interest in a portion of the credit risk for 
        any residential mortgage asset that the securitizer, through the 
        issuance of an asset-backed security, transfers, sells, or 
        conveys to a third party.

    ``(c) Standards for Regulations.--
            ``(1) Standards.--The regulations prescribed under 
        subsection (b) shall--
                    ``(A) prohibit a securitizer from directly or 
                indirectly hedging or otherwise transferring the credit 
                risk that the securitizer is required to retain with 
                respect to an asset;
                    ``(B) require a securitizer to retain--

[[Page 124 STAT. 1892]]

                          ``(i) not less than 5 percent of the credit 
                      risk for any asset--
                                    ``(I) that is not a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed through 
                                the issuance of an asset-backed security 
                                by the securitizer; or
                                    ``(II) that is a qualified 
                                residential mortgage that is 
                                transferred, sold, or conveyed through 
                                the issuance of an asset-backed security 
                                by the securitizer, if 1 or more of the 
                                assets that collateralize the asset-
                                backed security are not qualified 
                                residential mortgages; or
                          ``(ii) less than 5 percent of the credit risk 
                      for an asset that is not a qualified residential 
                      mortgage that is transferred, sold, or conveyed 
                      through the issuance of an asset-backed security 
                      by the securitizer, if the originator of the asset 
                      meets the underwriting standards prescribed under 
                      paragraph (2)(B);
                    ``(C) specify--
                          ``(i) the permissible forms of risk retention 
                      for purposes of this section;
                          ``(ii) the minimum duration of the risk 
                      retention required under this section; and
                          ``(iii) that a securitizer is not required to 
                      retain any part of the credit risk for an asset 
                      that is transferred, sold or conveyed through the 
                      issuance of an asset-backed security by the 
                      securitizer, if all of the assets that 
                      collateralize the asset-backed security are 
                      qualified residential mortgages;
                    ``(D) <<NOTE: Applicability.>> apply, regardless of 
                whether the securitizer is an insured depository 
                institution;
                    ``(E) with respect to a commercial mortgage, specify 
                the permissible types, forms, and amounts of risk 
                retention that would meet the requirements of 
                subparagraph (B), which in the determination of the 
                Federal banking agencies and the Commission may 
                include--
                          ``(i) retention of a specified amount or 
                      percentage of the total credit risk of the asset;
                          ``(ii) retention of the first-loss position by 
                      a third-party purchaser that specifically 
                      negotiates for the purchase of such first loss 
                      position, holds adequate financial resources to 
                      back losses, provides due diligence on all 
                      individual assets in the pool before the issuance 
                      of the asset-backed securities, and meets the same 
                      standards for risk retention as the Federal 
                      banking agencies and the Commission require of the 
                      securitizer;
                          ``(iii) a determination by the Federal banking 
                      agencies and the Commission that the underwriting 
                      standards and controls for the asset are adequate; 
                      and
                          ``(iv) provision of adequate representations 
                      and warranties and related enforcement mechanisms; 
                      and
                    ``(F) establish appropriate standards for retention 
                of an economic interest with respect to collateralized 
                debt obligations, securities collateralized by 
                collateralized debt obligations, and similar instruments 
                collateralized by other asset-backed securities; and
                    ``(G) provide for--

[[Page 124 STAT. 1893]]

                          ``(i) a total or partial exemption of any 
                      securitization, as may be appropriate in the 
                      public interest and for the protection of 
                      investors;
                          ``(ii) a total or partial exemption for the 
                      securitization of an asset issued or guaranteed by 
                      the United States, or an agency of the United 
                      States, as the Federal banking agencies and the 
                      Commission jointly determine appropriate in the 
                      public interest and for the protection of 
                      investors, except that, for purposes of this 
                      clause, the Federal National Mortgage Association 
                      and the Federal Home Loan Mortgage Corporation are 
                      not agencies of the United States;
                          ``(iii) a total or partial exemption for any 
                      asset-backed security that is a security issued or 
                      guaranteed by any State of the United States, or 
                      by any political subdivision of a State or 
                      territory, or by any public instrumentality of a 
                      State or territory that is exempt from the 
                      registration requirements of the Securities Act of 
                      1933 by reason of section 3(a)(2) of that Act (15 
                      U.S.C. 77c(a)(2)), or a security defined as a 
                      qualified scholarship funding bond in section 
                      150(d)(2) of the Internal Revenue Code of 1986, as 
                      may be appropriate in the public interest and for 
                      the protection of investors; and
                          ``(iv) the allocation of risk retention 
                      obligations between a securitizer and an 
                      originator in the case of a securitizer that 
                      purchases assets from an originator, as the 
                      Federal banking agencies and the Commission 
                      jointly determine appropriate.
            ``(2) Asset classes.--
                    ``(A) Asset classes.--The regulations prescribed 
                under subsection (b) shall establish asset classes with 
                separate rules for securitizers of different classes of 
                assets, including residential mortgages, commercial 
                mortgages, commercial loans, auto loans, and any other 
                class of assets that the Federal banking agencies and 
                the Commission deem appropriate.
                    ``(B) Contents.--For each asset class established 
                under subparagraph (A), the regulations prescribed under 
                subsection (b) shall include underwriting standards 
                established by the Federal banking agencies that specify 
                the terms, conditions, and characteristics of a loan 
                within the asset class that indicate a low credit risk 
                with respect to the loan.

    ``(d) Originators.--In determining how to allocate risk retention 
obligations between a securitizer and an originator under subsection 
(c)(1)(E)(iv), the Federal banking agencies and the Commission shall--
            ``(1) reduce the percentage of risk retention obligations 
        required of the securitizer by the percentage of risk retention 
        obligations required of the originator; and
            ``(2) consider--
                    ``(A) whether the assets sold to the securitizer 
                have terms, conditions, and characteristics that reflect 
                low credit risk;
                    ``(B) whether the form or volume of transactions in 
                securitization markets creates incentives for imprudent

[[Page 124 STAT. 1894]]

                origination of the type of loan or asset to be sold to 
                the securitizer; and
                    ``(C) the potential impact of the risk retention 
                obligations on the access of consumers and businesses to 
                credit on reasonable terms, which may not include the 
                transfer of credit risk to a third party.

    ``(e) Exemptions, Exceptions, and Adjustments.--
            ``(1) In general.--The Federal banking agencies and the 
        Commission may jointly adopt or issue exemptions, exceptions, or 
        adjustments to the rules issued under this section, including 
        exemptions, exceptions, or adjustments for classes of 
        institutions or assets relating to the risk retention 
        requirement and the prohibition on hedging under subsection 
        (c)(1).
            ``(2) Applicable standards.--Any exemption, exception, or 
        adjustment adopted or issued by the Federal banking agencies and 
        the Commission under this paragraph shall--
                    ``(A) help ensure high quality underwriting 
                standards for the securitizers and originators of assets 
                that are securitized or available for securitization; 
                and
                    ``(B) encourage appropriate risk management 
                practices by the securitizers and originators of assets, 
                improve the access of consumers and businesses to credit 
                on reasonable terms, or otherwise be in the public 
                interest and for the protection of investors.
            ``(3) Certain institutions and programs exempt.--
                    ``(A) Farm credit system institutions.--
                Notwithstanding any other provision of this section, the 
                requirements of this section shall not apply to any loan 
                or other financial asset made, insured, guaranteed, or 
                purchased by any institution that is subject to the 
                supervision of the Farm Credit Administration, including 
                the Federal Agricultural Mortgage Corporation.
                    ``(B) Other federal programs.--This section shall 
                not apply to any residential, multifamily, or health 
                care facility mortgage loan asset, or securitization 
                based directly or indirectly on such an asset, which is 
                insured or guaranteed by the United States or an agency 
                of the United States. For purposes of this subsection, 
                the Federal National Mortgage Association, the Federal 
                Home Loan Mortgage Corporation, and the Federal home 
                loan banks shall not be considered an agency of the 
                United States.
            ``(4) Exemption for qualified residential mortgages.--
                    ``(A) <<NOTE: Regulations.>>  In general.--The 
                Federal banking agencies, the Commission, the Secretary 
                of Housing and Urban Development, and the Director of 
                the Federal Housing Finance Agency shall jointly issue 
                regulations to exempt qualified residential mortgages 
                from the risk retention requirements of this subsection.
                    ``(B) <<NOTE: Definition.>>  Qualified residential 
                mortgage.--The Federal banking agencies, the Commission, 
                the Secretary of Housing and Urban Development, and the 
                Director of the Federal Housing Finance Agency shall 
                jointly define the term `qualified residential mortgage' 
                for purposes of this subsection, taking into 
                consideration underwriting and product features that 
                historical loan performance data indicate result in a 
                lower risk of default, such as--

[[Page 124 STAT. 1895]]

                          ``(i) documentation and verification of the 
                      financial resources relied upon to qualify the 
                      mortgagor;
                          ``(ii) standards with respect to--
                                    ``(I) the residual income of the 
                                mortgagor after all monthly obligations;
                                    ``(II) the ratio of the housing 
                                payments of the mortgagor to the monthly 
                                income of the mortgagor;
                                    ``(III) the ratio of total monthly 
                                installment payments of the mortgagor to 
                                the income of the mortgagor;
                          ``(iii) mitigating the potential for payment 
                      shock on adjustable rate mortgages through product 
                      features and underwriting standards;
                          ``(iv) mortgage guarantee insurance or other 
                      types of insurance or credit enhancement obtained 
                      at the time of origination, to the extent such 
                      insurance or credit enhancement reduces the risk 
                      of default; and
                          ``(v) prohibiting or restricting the use of 
                      balloon payments, negative amortization, 
                      prepayment penalties, interest-only payments, and 
                      other features that have been demonstrated to 
                      exhibit a higher risk of borrower default.
                    ``(C) Limitation on definition.--The Federal banking 
                agencies, the Commission, the Secretary of Housing and 
                Urban Development, and the Director of the Federal 
                Housing Finance Agency in defining the term `qualified 
                residential mortgage', as required by subparagraph (B), 
                shall define that term to be no broader than the 
                definition `qualified mortgage' as the term is defined 
                under section 129C(c)(2) of the Truth in Lending Act, as 
                amended by the Consumer Financial Protection Act of 
                2010, and regulations adopted thereunder.
            ``(5) Condition for qualified residential mortgage 
        exemption.--The regulations issued under paragraph (4) shall 
        provide that an asset-backed security that is collateralized by 
        tranches of other asset-backed securities shall not be exempt 
        from the risk retention requirements of this subsection.
            ``(6) Certification.--The Commission shall require an issuer 
        to certify, for each issuance of an asset-backed security 
        collateralized exclusively by qualified residential mortgages, 
        that the issuer has evaluated the effectiveness of the internal 
        supervisory controls of the issuer with respect to the process 
        for ensuring that all assets that collateralize the asset-backed 
        security are qualified residential mortgages.

    ``(f) Enforcement.--The regulations issued under this section shall 
be enforced by--
            ``(1) the appropriate Federal banking agency, with respect 
        to any securitizer that is an insured depository institution; 
        and
            ``(2) the Commission, with respect to any securitizer that 
        is not an insured depository institution.

    ``(g) Authority of Commission.--The authority of the Commission 
under this section shall be in addition to the authority of the 
Commission to otherwise enforce the securities laws.
    ``(h) Authority to Coordinate on Rulemaking.--The Chairperson of the 
Financial Stability Oversight Council shall coordinate all joint 
rulemaking required under this section.

[[Page 124 STAT. 1896]]

    ``(i) Effective Date of Regulations.--The regulations issued under 
this section shall become effective--
            ``(1) with respect to securitizers and originators of asset-
        backed securities backed by residential mortgages, 1 year after 
        the date on which final rules under this section are published 
        in the Federal Register; and
            ``(2) with respect to securitizers and originators of all 
        other classes of asset-backed securities, 2 years after the date 
        on which final rules under this section are published in the 
        Federal Register.''.

    (c) Study on Risk Retention.--
            (1) Study.--The Board of Governors of the Federal Reserve 
        System, in coordination and consultation with the Comptroller of 
        the Currency, the Director of the Office of Thrift Supervision, 
        the Chairperson of the Federal Deposit Insurance Corporation, 
        and the Securities and Exchange Commission shall conduct a study 
        of the combined impact on each individual class of asset-backed 
        security established under section 15G(c)(2) of the Securities 
        Exchange Act of 1934, as added by subsection (b), of--
                    (A) the new credit risk retention requirements 
                contained in the amendment made by subsection (b), 
                including the effect credit risk retention requirements 
                have on increasing the market for Federally subsidized 
                loans; and
                    (B) the Financial Accounting Statements 166 and 167 
                issued by the Financial Accounting Standards Board.
            (2) Report.--Not later than 90 days after the date of 
        enactment of this Act, the Board of Governors of the Federal 
        Reserve System shall submit to Congress a report on the study 
        conducted under paragraph (1). Such report shall include 
        statutory and regulatory recommendations for eliminating any 
        negative impacts on the continued viability of the asset-backed 
        securitization markets and on the availability of credit for new 
        lending identified by the study conducted under paragraph (1).
SEC. 942. DISCLOSURES AND REPORTING FOR ASSET-BACKED SECURITIES.

    (a) Securities Exchange Act of 1934.--Section 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended--
            (1) by striking ``(d) Each'' and inserting the following:

    ``(d) Supplementary and Periodic Information.--
            ``(1) In general.--Each'';
            (2) in the third sentence, by inserting after ``securities 
        of each class'' the following: ``, other than any class of 
        asset-backed securities,''; and
            (3) by adding at the end the following:
            ``(2) Asset-backed securities.--
                    ``(A) Suspension of duty to file.--The Commission 
                may, by rule or regulation, provide for the suspension 
                or termination of the duty to file under this subsection 
                for any class of asset-backed security, on such terms 
                and conditions and for such period or periods as the 
                Commission deems necessary or appropriate in the public 
                interest or for the protection of investors.
                    ``(B) Classification of issuers.--The Commission 
                may, for purposes of this subsection, classify issuers 
                and

[[Page 124 STAT. 1897]]

                prescribe requirements appropriate for each class of 
                issuers of asset-backed securities.''.

    (b) Securities Act of 1933.--Section 7 of the Securities Act of 1933 
(15 U.S.C. 77g) is amended by adding at the end the following:
    ``(c) Disclosure Requirements.--
            ``(1) <<NOTE: Regulations.>>  In general.--The Commission 
        shall adopt regulations under this subsection requiring each 
        issuer of an asset-backed security to disclose, for each tranche 
        or class of security, information regarding the assets backing 
        that security.
            ``(2) Content of regulations.--In adopting regulations under 
        this subsection, the Commission shall--
                    ``(A) set standards for the format of the data 
                provided by issuers of an asset-backed security, which 
                shall, to the extent feasible, facilitate comparison of 
                such data across securities in similar types of asset 
                classes; and
                    ``(B) require issuers of asset-backed securities, at 
                a minimum, to disclose asset-level or loan-level data, 
                if such data are necessary for investors to 
                independently perform due diligence, including--
                          ``(i) data having unique identifiers relating 
                      to loan brokers or originators;
                          ``(ii) the nature and extent of the 
                      compensation of the broker or originator of the 
                      assets backing the security; and
                          ``(iii) the amount of risk retention by the 
                      originator and the securitizer of such assets.''.
SEC. 943. <<NOTE: 15 USC 78o-7 note.>> REPRESENTATIONS AND 
                        WARRANTIES IN ASSET-BACKED OFFERINGS.

    Not <<NOTE: Deadline. Regulations.>> later than 180 days after the 
date of enactment of this Act, the Securities and Exchange Commission 
shall prescribe regulations on the use of representations and warranties 
in the market for asset-backed securities (as that term is defined in 
section 3(a)(77) of the Securities Exchange Act of 1934, as added by 
this subtitle) that--
            (1) require each national recognized statistical rating 
        organization to include in any report accompanying a credit 
        rating a description of--
                    (A) the representations, warranties, and enforcement 
                mechanisms available to investors; and
                    (B) how they differ from the representations, 
                warranties, and enforcement mechanisms in issuances of 
                similar securities; and
            (2) require any securitizer (as that term is defined in 
        section 15G(a) of the Securities Exchange Act of 1934, as added 
        by this subtitle) to disclose fulfilled and unfulfilled 
        repurchase requests across all trusts aggregated by the 
        securitizer, so that investors may identify asset originators 
        with clear underwriting deficiencies.
SEC. 944. EXEMPTED TRANSACTIONS UNDER THE SECURITIES ACT OF 1933.

    (a) Exemption Eliminated.--Section 4 of the Securities Act of 1933 
(15 U.S.C. 77d) is amended--
            (1) by striking paragraph (5); and
            (2) by striking ``(6) transactions'' and inserting the 
        following:

[[Page 124 STAT. 1898]]

            ``(5) transactions''.

    (b) Conforming Amendment.--Section 3(a)(4)(B)(vii)(I) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)(vii)(I)) is 
amended by striking ``4(6)'' and inserting ``4(5)''.
SEC. 945. DUE DILIGENCE ANALYSIS AND DISCLOSURE IN ASSET-BACKED 
                        SECURITIES ISSUES.

    Section 7 of the Securities Act of 1933 (15 U.S.C. 77g), as amended 
by this subtitle, is amended by adding at the end the following:
    ``(d) <<NOTE: Deadline. Regulations.>>  Registration Statement for 
Asset-backed Securities.--Not later than 180 days after the date of 
enactment of this subsection, the Commission shall issue rules relating 
to the registration statement required to be filed by any issuer of an 
asset-backed security (as that term is defined in section 3(a)(77) of 
the Securities Exchange Act of 1934) that require any issuer of an 
asset-backed security--
            ``(1) to perform a review of the assets underlying the 
        asset-backed security; and
            ``(2) to disclose the nature of the review under paragraph 
        (1).''.
SEC. 946. STUDY ON THE MACROECONOMIC EFFECTS OF RISK RETENTION 
                        REQUIREMENTS.

    (a) Study Required.--The Chairman of the Financial Services 
Oversight Council shall carry out a study on the macroeconomic effects 
of the risk retention requirements under this subtitle, and the 
amendments made by this subtitle, with emphasis placed on potential 
beneficial effects with respect to stabilizing the real estate market. 
Such study shall include--
            (1) an analysis of the effects of risk retention on real 
        estate asset price bubbles, including a retrospective estimate 
        of what fraction of real estate losses may have been averted had 
        such requirements been in force in recent years;
            (2) an analysis of the feasibility of minimizing real estate 
        price bubbles by proactively adjusting the percentage of risk 
        retention that must be borne by creditors and securitizers of 
        real estate debt, as a function of regional or national market 
        conditions;
            (3) a comparable analysis for proactively adjusting mortgage 
        origination requirements;
            (4) an assessment of whether such proactive adjustments 
        should be made by an independent regulator, or in a formulaic 
        and transparent manner;
            (5) an assessment of whether such adjustments should take 
        place independently or in concert with monetary policy; and
            (6) recommendations for implementation and enabling 
        legislation.

    (b) Report.--Not later than the end of the 180-day period beginning 
on the date of the enactment of this title, the Chairman of the 
Financial Services Oversight Council shall issue a report to the 
Congress containing any findings and determinations made in carrying out 
the study required under subsection (a).

[[Page 124 STAT. 1899]]

          Subtitle E--Accountability and Executive Compensation

SEC. 951. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION DISCLOSURES.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 14 (15 U.S.C. 78n) the following:
``SEC. 14A. <<NOTE: 15 USC 78n-1.>>  SHAREHOLDER APPROVAL OF 
                        EXECUTIVE COMPENSATION.

    ``(a) <<NOTE: Deadlines.>>  Separate Resolution Required.--
            ``(1) In general.--Not less frequently than once every 3 
        years, a proxy or consent or authorization for an annual or 
        other meeting of the shareholders for which the proxy 
        solicitation rules of the Commission require compensation 
        disclosure shall include a separate resolution subject to 
        shareholder vote to approve the compensation of executives, as 
        disclosed pursuant to section 229.402 of title 17, Code of 
        Federal Regulations, or any successor thereto.
            ``(2) Frequency of vote.--Not less frequently than once 
        every 6 years, a proxy or consent or authorization for an annual 
        or other meeting of the shareholders for which the proxy 
        solicitation rules of the Commission require compensation 
        disclosure shall include a separate resolution subject to 
        shareholder vote to determine whether votes on the resolutions 
        required under paragraph (1) will occur every 1, 2, or 3 years.
            ``(3) Effective date.--The proxy or consent or authorization 
        for the first annual or other meeting of the shareholders 
        occurring after the end of the 6-month period beginning on the 
        date of enactment of this section shall include--
                    ``(A) the resolution described in paragraph (1); and
                    ``(B) a separate resolution subject to shareholder 
                vote to determine whether votes on the resolutions 
                required under paragraph (1) will occur every 1, 2, or 3 
                years.

    ``(b) Shareholder Approval of Golden Parachute Compensation.--
            ``(1) Disclosure.-- <<NOTE: Regulations.>> In any proxy or 
        consent solicitation material (the solicitation of which is 
        subject to the rules of the Commission pursuant to subsection 
        (a)) for a meeting of the shareholders occurring after the end 
        of the 6-month period beginning on the date of enactment of this 
        section, at which shareholders are asked to approve an 
        acquisition, merger, consolidation, or proposed sale or other 
        disposition of all or substantially all the assets of an issuer, 
        the person making such solicitation shall disclose in the proxy 
        or consent solicitation material, in a clear and simple form in 
        accordance with regulations to be promulgated by the Commission, 
        any agreements or understandings that such person has with any 
        named executive officers of such issuer (or of the acquiring 
        issuer, if such issuer is not the acquiring issuer) concerning 
        any type of compensation (whether present, deferred, or 
        contingent) that is based on or otherwise relates to the 
        acquisition, merger, consolidation, sale, or other disposition 
        of all or substantially all of the assets of the issuer and the 
        aggregate total of all such compensation that may (and the 
        conditions upon which

[[Page 124 STAT. 1900]]

        it may) be paid or become payable to or on behalf of such 
        executive officer.
            ``(2) Shareholder approval.--Any proxy or consent or 
        authorization relating to the proxy or consent solicitation 
        material containing the disclosure required by paragraph (1) 
        shall include a separate resolution subject to shareholder vote 
        to approve such agreements or understandings and compensation as 
        disclosed, unless such agreements or understandings have been 
        subject to a shareholder vote under subsection (a).

    ``(c) Rule of Construction.--The shareholder vote referred to in 
subsections (a) and (b) shall not be binding on the issuer or the board 
of directors of an issuer, and may not be construed--
            ``(1) as overruling a decision by such issuer or board of 
        directors;
            ``(2) to create or imply any change to the fiduciary duties 
        of such issuer or board of directors;
            ``(3) to create or imply any additional fiduciary duties for 
        such issuer or board of directors; or
            ``(4) to restrict or limit the ability of shareholders to 
        make proposals for inclusion in proxy materials related to 
        executive compensation.

    ``(d) Disclosure of Votes.-- <<NOTE: Reports. Deadline.>> Every 
institutional investment manager subject to section 13(f) shall report 
at least annually how it voted on any shareholder vote pursuant to 
subsections (a) and (b), unless such vote is otherwise required to be 
reported publicly by rule or regulation of the Commission.

    ``(e) Exemption.--The Commission may, by rule or order, exempt an 
issuer or class of issuers from the requirement under subsection (a) or 
(b). In determining whether to make an exemption under this subsection, 
the Commission shall take into account, among other considerations, 
whether the requirements under subsections (a) and (b) 
disproportionately burdens small issuers.''.
SEC. 952. COMPENSATION COMMITTEE INDEPENDENCE.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78 
et seq.) is amended by inserting after section 10B, as added by section 
753, the following:
``SEC. 10C. <<NOTE: 15 USC 78j-3.>> COMPENSATION COMMITTEES.

    ``(a) Independence of Compensation Committees.--
            ``(1) <<NOTE: Regulations.>>  Listing standards.--The 
        Commission shall, by rule, direct the national securities 
        exchanges and national securities associations to prohibit the 
        listing of any equity security of an issuer, other than an 
        issuer that is a controlled company, limited partnership, 
        company in bankruptcy proceedings, open-ended management 
        investment company that is registered under the Investment 
        Company Act of 1940, or a foreign private issuer that provides 
        annual disclosures to shareholders of the reasons that the 
        foreign private issuer does not have an independent compensation 
        committee, that does not comply with the requirements of this 
        subsection.
            ``(2) Independence of compensation committees.--The rules of 
        the Commission under paragraph (1) shall require that each 
        member of the compensation committee of the board of directors 
        of an issuer be--
                    ``(A) a member of the board of directors of the 
                issuer; and
                    ``(B) independent.

[[Page 124 STAT. 1901]]

            ``(3) Independence.--The rules of the Commission under 
        paragraph (1) shall require that, in determining the definition 
        of the term `independence' for purposes of paragraph (2), the 
        national securities exchanges and the national securities 
        associations shall consider relevant factors, including--
                    ``(A) the source of compensation of a member of the 
                board of directors of an issuer, including any 
                consulting, advisory, or other compensatory fee paid by 
                the issuer to such member of the board of directors; and
                    ``(B) whether a member of the board of directors of 
                an issuer is affiliated with the issuer, a subsidiary of 
                the issuer, or an affiliate of a subsidiary of the 
                issuer.
            ``(4) Exemption authority.--The rules of the Commission 
        under paragraph (1) shall permit a national securities exchange 
        or a national securities association to exempt a particular 
        relationship from the requirements of paragraph (2), with 
        respect to the members of a compensation committee, as the 
        national securities exchange or national securities association 
        determines is appropriate, taking into consideration the size of 
        an issuer and any other relevant factors.

    ``(b) Independence of Compensation Consultants and Other 
Compensation Committee Advisers.--
            ``(1) In general.--The compensation committee of an issuer 
        may only select a compensation consultant, legal counsel, or 
        other adviser to the compensation committee after taking into 
        consideration the factors identified by the Commission under 
        paragraph (2).
            ``(2) Rules.--The Commission shall identify factors that 
        affect the independence of a compensation consultant, legal 
        counsel, or other adviser to a compensation committee of an 
        issuer. Such factors shall be competitively neutral among 
        categories of consultants, legal counsel, or other advisers and 
        preserve the ability of compensation committees to retain the 
        services of members of any such category, and shall include--
                    ``(A) the provision of other services to the issuer 
                by the person that employs the compensation consultant, 
                legal counsel, or other adviser;
                    ``(B) the amount of fees received from the issuer by 
                the person that employs the compensation consultant, 
                legal counsel, or other adviser, as a percentage of the 
                total revenue of the person that employs the 
                compensation consultant, legal counsel, or other 
                adviser;
                    ``(C) the policies and procedures of the person that 
                employs the compensation consultant, legal counsel, or 
                other adviser that are designed to prevent conflicts of 
                interest;
                    ``(D) any business or personal relationship of the 
                compensation consultant, legal counsel, or other adviser 
                with a member of the compensation committee; and
                    ``(E) any stock of the issuer owned by the 
                compensation consultant, legal counsel, or other 
                adviser.

    ``(c) Compensation Committee Authority Relating to Compensation 
Consultants.--
            ``(1) Authority to retain compensation consultant.--

[[Page 124 STAT. 1902]]

                    ``(A) In general.--The compensation committee of an 
                issuer, in its capacity as a committee of the board of 
                directors, may, in its sole discretion, retain or obtain 
                the advice of a compensation consultant.
                    ``(B) Direct responsibility of compensation 
                committee.--The compensation committee of an issuer 
                shall be directly responsible for the appointment, 
                compensation, and oversight of the work of a 
                compensation consultant.
                    ``(C) Rule of construction.--This paragraph may not 
                be construed--
                          ``(i) to require the compensation committee to 
                      implement or act consistently with the advice or 
                      recommendations of the compensation consultant; or
                          ``(ii) to affect the ability or obligation of 
                      a compensation committee to exercise its own 
                      judgment in fulfillment of the duties of the 
                      compensation committee.
            ``(2) Disclosure.--In any proxy or consent solicitation 
        material for an annual meeting of the shareholders (or a special 
        meeting in lieu of the annual meeting) occurring on or after the 
        date that is 1 year after the date of enactment of this section, 
        each issuer shall disclose in the proxy or consent material, in 
        accordance with regulations of the Commission, whether--
                    ``(A) the compensation committee of the issuer 
                retained or obtained the advice of a compensation 
                consultant; and
                    ``(B) the work of the compensation consultant has 
                raised any conflict of interest and, if so, the nature 
                of the conflict and how the conflict is being addressed.

    ``(d) Authority To Engage Independent Legal Counsel and Other 
Advisers.--
            ``(1) In general.--The compensation committee of an issuer, 
        in its capacity as a committee of the board of directors, may, 
        in its sole discretion, retain and obtain the advice of 
        independent legal counsel and other advisers.
            ``(2) Direct responsibility of compensation committee.--The 
        compensation committee of an issuer shall be directly 
        responsible for the appointment, compensation, and oversight of 
        the work of independent legal counsel and other advisers.
            ``(3) Rule of construction.--This subsection may not be 
        construed--
                    ``(A) to require a compensation committee to 
                implement or act consistently with the advice or 
                recommendations of independent legal counsel or other 
                advisers under this subsection; or
                    ``(B) to affect the ability or obligation of a 
                compensation committee to exercise its own judgment in 
                fulfillment of the duties of the compensation committee.

    ``(e) Compensation of Compensation Consultants, Independent Legal 
Counsel, and Other Advisers.--Each issuer shall provide for appropriate 
funding, as determined by the compensation committee in its capacity as 
a committee of the board of directors, for payment of reasonable 
compensation--
            ``(1) to a compensation consultant; and
            ``(2) to independent legal counsel or any other adviser to 
        the compensation committee.

[[Page 124 STAT. 1903]]

    ``(f) Commission Rules.--
            ``(1) In general.-- <<NOTE: Deadline.>> Not later than 360 
        days after the date of enactment of this section, the Commission 
        shall, by rule, direct the national securities exchanges and 
        national securities associations to prohibit the listing of any 
        security of an issuer that is not in compliance with the 
        requirements of this section.
            ``(2) <<NOTE: Procedures.>>  Opportunity to cure defects.--
        The rules of the Commission under paragraph (1) shall provide 
        for appropriate procedures for an issuer to have a reasonable 
        opportunity to cure any defects that would be the basis for the 
        prohibition under paragraph (1), before the imposition of such 
        prohibition.
            ``(3) Exemption authority.--
                    ``(A) In general.--The rules of the Commission under 
                paragraph (1) shall permit a national securities 
                exchange or a national securities association to exempt 
                a category of issuers from the requirements under this 
                section, as the national securities exchange or the 
                national securities association determines is 
                appropriate.
                    ``(B) Considerations.--In determining appropriate 
                exemptions under subparagraph (A), the national 
                securities exchange or the national securities 
                association shall take into account the potential impact 
                of the requirements of this section on smaller reporting 
                issuers.

    ``(g) Controlled Company Exemption.--
            ``(1) In general.--This section shall not apply to any 
        controlled company.
            ``(2) Definition.--For purposes of this section, the term 
        `controlled company' means an issuer--
                    ``(A) that is listed on a national securities 
                exchange or by a national securities association; and
                    ``(B) that holds an election for the board of 
                directors of the issuer in which more than 50 percent of 
                the voting power is held by an individual, a group, or 
                another issuer.''.

    (b) Study and Report.--
            (1) Study.--The Securities and Exchange Commission shall 
        conduct a study and review of the use of compensation 
        consultants and the effects of such use.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Commission shall submit a report to 
        Congress on the results of the study and review required by this 
        subsection.
SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES.

    (a) Disclosure of Pay Versus Performance.--Section 14 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended by this 
title, is amended by adding at the end the following:
    ``(i) <<NOTE: Regulations.>>  Disclosure of Pay Versus 
Performance.--The Commission shall, by rule, require each issuer to 
disclose in any proxy or consent solicitation material for an annual 
meeting of the shareholders of the issuer a clear description of any 
compensation required to be disclosed by the issuer under section 
229.402 of title 17, Code of Federal Regulations (or any successor 
thereto), including information that shows the relationship between 
executive compensation actually paid and the financial performance of 
the issuer, taking into account any change in the value of the shares of 
stock and dividends of the issuer and any distributions. The

[[Page 124 STAT. 1904]]

disclosure under this subsection may include a graphic representation of 
the information required to be disclosed.''.

    (b) <<NOTE: 15 USC 78l note.>>  Additional Disclosure 
Requirements.--
            (1) In general.-- <<NOTE: Regulations.>> The Commission 
        shall amend section 229.402 of title 17, Code of Federal 
        Regulations, to require each issuer to disclose in any filing of 
        the issuer described in section 229.10(a) of title 17, Code of 
        Federal Regulations (or any successor thereto)--
                    (A) the median of the annual total compensation of 
                all employees of the issuer, except the chief executive 
                officer (or any equivalent position) of the issuer;
                    (B) the annual total compensation of the chief 
                executive officer (or any equivalent position) of the 
                issuer; and
                    (C) the ratio of the amount described in 
                subparagraph (A) to the amount described in subparagraph 
                (B).
            (2) Total compensation.--For purposes of this subsection, 
        the total compensation of an employee of an issuer shall be 
        determined in accordance with section 229.402(c)(2)(x) of title 
        17, Code of Federal Regulations, as in effect on the day before 
        the date of enactment of this Act.
SEC. 954. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

    The Securities Exchange Act of 1934 is amended by inserting after 
section 10C, as added by section 952, the following:
``SEC. 10D. <<NOTE: 15 USC 78j-4.>>  RECOVERY OF ERRONEOUSLY 
                        AWARDED COMPENSATION POLICY.

    ``(a) Listing Standards.-- <<NOTE: Regulations.>> The Commission 
shall, by rule, direct the national securities exchanges and national 
securities associations to prohibit the listing of any security of an 
issuer that does not comply with the requirements of this section.

    ``(b) Recovery of Funds.--The rules of the Commission under 
subsection (a) shall require each issuer to develop and implement a 
policy providing--
            ``(1) for disclosure of the policy of the issuer on 
        incentive-based compensation that is based on financial 
        information required to be reported under the securities laws; 
        and
            ``(2) that, in the event that the issuer is required to 
        prepare an accounting restatement due to the material 
        noncompliance of the issuer with any financial reporting 
        requirement under the securities laws, the issuer will recover 
        from any current or former executive officer of the issuer who 
        received incentive-based compensation (including stock options 
        awarded as compensation) during the 3-year period preceding the 
        date on which the issuer is required to prepare an accounting 
        restatement, based on the erroneous data, in excess of what 
        would have been paid to the executive officer under the 
        accounting restatement.''.
SEC. 955. DISCLOSURE REGARDING EMPLOYEE AND DIRECTOR HEDGING.

    Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n), 
as amended by this title, is amended by adding at the end the following:
    ``(j) Disclosure of Hedging by Employees and Directors.--
The <<NOTE: Regulations.>> Commission shall, by rule, require each 
issuer to disclose in any proxy or consent solicitation material for an 
annual meeting of the shareholders of the issuer whether any employee or 
member

[[Page 124 STAT. 1905]]

of the board of directors of the issuer, or any designee of such 
employee or member, is permitted to purchase financial instruments 
(including prepaid variable forward contracts, equity swaps, collars, 
and exchange funds) that are designed to hedge or offset any decrease in 
the market value of equity securities--
            ``(1) granted to the employee or member of the board of 
        directors by the issuer as part of the compensation of the 
        employee or member of the board of directors; or
            ``(2) held, directly or indirectly, by the employee or 
        member of the board of directors.''.
SEC. 956. <<NOTE: 12 USC 5641.>>  ENHANCED COMPENSATION STRUCTURE 
                        REPORTING.

    (a) Enhanced Disclosure and Reporting of Compensation 
Arrangements.--
            (1) In general.-- <<NOTE: Deadline. Regulations.>> Not later 
        than 9 months after the date of enactment of this title, the 
        appropriate Federal regulators jointly shall prescribe 
        regulations or guidelines to require each covered financial 
        institution to disclose to the appropriate Federal regulator the 
        structures of all incentive-based compensation arrangements 
        offered by such covered financial institutions sufficient to 
        determine whether the compensation structure--
                    (A) provides an executive officer, employee, 
                director, or principal shareholder of the covered 
                financial institution with excessive compensation, fees, 
                or benefits; or
                    (B) could lead to material financial loss to the 
                covered financial institution.
            (2) Rules of construction.--Nothing in this section shall be 
        construed as requiring the reporting of the actual compensation 
        of particular individuals. Nothing in this section shall be 
        construed to require a covered financial institution that does 
        not have an incentive-based payment arrangement to make the 
        disclosures required under this subsection.

    (b) Prohibition on Certain Compensation 
Arrangements. <<NOTE: Deadline. Regulations.>> --Not later than 9 months 
after the date of enactment of this title, the appropriate Federal 
regulators shall jointly prescribe regulations or guidelines that 
prohibit any types of incentive-based payment arrangement, or any 
feature of any such arrangement, that the regulators determine 
encourages inappropriate risks by covered financial institutions--
            (1) by providing an executive officer, employee, director, 
        or principal shareholder of the covered financial institution 
        with excessive compensation, fees, or benefits; or
            (2) that could lead to material financial loss to the 
        covered financial institution.

    (c) Standards.--The appropriate Federal regulators shall--
            (1) ensure that any standards for compensation established 
        under subsections (a) or (b) are comparable to the standards 
        established under section of the Federal Deposit Insurance Act 
        (12 U.S.C. 2 1831p-1) for insured depository institutions; and
            (2) in establishing such standards under such subsections, 
        take into consideration the compensation standards described in 
        section 39(c) of the Federal Deposit Insurance Act (12 U.S.C. 
        1831p- 9 1(c)).

    (d) Enforcement.--The provisions of this section and the regulations 
issued under this section shall be enforced under section

[[Page 124 STAT. 1906]]

505 of the Gramm-Leach-Bliley Act and, for purposes of such section, a 
violation of this section or such regulations shall be treated as a 
violation of subtitle A of title V of such Act.
    (e) Definitions.--As used in this section--
            (1) the term ``appropriate Federal regulator'' means the 
        Board of Governors of the Federal Reserve System, the Office of 
        the Comptroller of the Currency, the Board of Directors of the 
        Federal Deposit Insurance Corporation, the Director of the 
        Office of Thrift Supervision, the National Credit Union 
        Administration Board, the Securities and Exchange Commission, 
        the Federal Housing Finance Agency; and
            (2) the term ``covered financial institution'' means--
                    (A) a depository institution or depository 
                institution holding company, as such terms are defined 
                in section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813);
                    (B) a broker-dealer registered under section 15 of 
                the Securities Exchange Act of 1934 (15 U.S.C. 78o);
                    (C) a credit union, as described in section 
                19(b)(1)(A)(iv) of the Federal Reserve Act;
                    (D) an investment advisor, as such term is defined 
                in section 202(a)(11) of the Investment Advisers Act of 
                1940 (15 U.S.C. 80b-2(a)(11));
                    (E) the Federal National Mortgage Association;
                    (F) the Federal Home Loan Mortgage Corporation; and
                    (G) any other financial institution that the 
                appropriate Federal regulators, jointly, by rule, 
                determine should be treated as a covered financial 
                institution for purposes of this section.

    (f) Exemption for Certain Financial Institutions.--The requirements 
of this section shall not apply to covered financial institutions with 
assets of less than $1,000,000,000.
SEC. 957. VOTING BY BROKERS.

    Section 6(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78f(b)) is amended--
            (1) in paragraph (9)--
                    (A) in subparagraph (A), by redesignating clauses 
                (i) through (v) as subclauses (I) through (V), 
                respectively, and adjusting the margins accordingly;
                    (B) by redesignating subparagraphs (A) through (D) 
                as clauses (i) through (iv), respectively, and adjusting 
                the margins accordingly;
                    (C) by inserting ``(A)'' after ``(9)''; and
                    (D) in the matter immediately following clause (iv), 
                as so redesignated, by striking ``As used'' and 
                inserting the following:
            ``(B) As used''.
            (2) by adding at the end the following:
            ``(10)(A) The rules of the exchange prohibit any member that 
        is not the beneficial owner of a security registered under 
        section 12 from granting a proxy to vote the security in 
        connection with a shareholder vote described in subparagraph 
        (B), unless the beneficial owner of the security has instructed 
        the member to vote the proxy in accordance with the voting 
        instructions of the beneficial owner.
            ``(B) A shareholder vote described in this subparagraph is a 
        shareholder vote with respect to the election of a member

[[Page 124 STAT. 1907]]

        of the board of directors of an issuer, executive compensation, 
        or any other significant matter, as determined by the 
        Commission, by rule, and does not include a vote with respect to 
        the uncontested election of a member of the board of directors 
        of any investment company registered under the Investment 
        Company Act of 1940 (15 U.S.C. 80b-1 et seq.).
            ``(C) Nothing in this paragraph shall be construed to 
        prohibit a national securities exchange from prohibiting a 
        member that is not the beneficial owner of a security registered 
        under section 12 from granting a proxy to vote the security in 
        connection with a shareholder vote not described in subparagraph 
        (A).''.

    Subtitle F--Improvements to the Management of the Securities and 
                           Exchange Commission

SEC. 961. <<NOTE: 15 USC 78d-6.>> REPORT AND CERTIFICATION OF 
                        INTERNAL SUPERVISORY CONTROLS.

    (a) Annual Reports and Certification.--Not later than 90 days after 
the end of each fiscal year, the Commission shall submit a report to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives on the 
conduct by the Commission of examinations of registered entities, 
enforcement investigations, and review of corporate financial securities 
filings.
    (b) Contents of Reports.--Each report under subsection (a) shall 
contain--
            (1) an assessment, as of the end of the most recent fiscal 
        year, of the effectiveness of--
                    (A) the internal supervisory controls of the 
                Commission; and
                    (B) the procedures of the Commission applicable to 
                the staff of the Commission who perform examinations of 
                registered entities, enforcement investigations, and 
                reviews of corporate financial securities filings;
            (2) a certification that the Commission has adequate 
        internal supervisory controls to carry out the duties of the 
        Commission described in paragraph (1)(B); and
            (3) a summary by the Comptroller General of the United 
        States of the review carried out under subsection (d).

    (c) Certification.--
            (1) Signature.--The certification under subsection (b)(2) 
        shall be signed by the Director of the Division of Enforcement, 
        the Director of the Division of Corporation Finance, and the 
        Director of the Office of Compliance Inspections and 
        Examinations (or the head of any successor division or office).
            (2) Content of certification.--Each individual described in 
        paragraph (1) shall certify that the individual--
                    (A) is directly responsible for establishing and 
                maintaining the internal supervisory controls of the 
                Division or Office of which the individual is the head;
                    (B) is knowledgeable about the internal supervisory 
                controls of the Division or Office of which the 
                individual is the head;

[[Page 124 STAT. 1908]]

                    (C) <<NOTE: Time period.>>  has evaluated the 
                effectiveness of the internal supervisory controls 
                during the 90-day period ending on the final day of the 
                fiscal year to which the report relates; and
                    (D) has disclosed to the Commission any significant 
                deficiencies in the design or operation of internal 
                supervisory controls that could adversely affect the 
                ability of the Division or Office to consistently 
                conduct inspections, or investigations, or reviews of 
                filings with professional competence and integrity.

    (d) New Director or Acting Director.-- <<NOTE: Time 
period.>> Notwithstanding subsection (a), if the Director of the 
Division of Enforcement, the Director of the Division of Corporate 
Finance, or the Director of the Office of Compliance Inspections and 
Examinations has served as Director of the Division or Office for less 
than 90 days on the date on which a report is required to be submitted 
under subsection (a), the Commission may submit the report on the date 
on which the Director has served as Director for 90 days. If there is no 
Director of the Division of Enforcement, the Division of Corporate 
Finance, or the Office of Compliance Inspections and Examinations, on 
the date on which a report is required to be submitted under subsection 
(a), the Acting Director of the Division or Office may make the 
certification required under subsection (c).

    (e) Review by the Comptroller General.--
            (1) Report.--The Comptroller General of the United States 
        shall submit to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services of 
        the House of Representatives a report that contains a review of 
        the adequacy and effectiveness of the internal supervisory 
        control structure and procedures described in subsection (b)(1), 
        not less frequently than once every 3 years, at a time to 
        coincide with the publication of the reports of the Commission 
        under this section.
            (2) Authority to hire experts.--The Comptroller General of 
        the United States may hire independent consultants with 
        specialized expertise in any area relevant to the duties of the 
        Comptroller General described in this section, in order to 
        assist the Comptroller General in carrying out such duties.
SEC. 962. <<NOTE: 15 USC 78d-7.>> TRIENNIAL REPORT ON PERSONNEL 
                        MANAGEMENT.

    (a) Triennial Report Required.--Once every 3 years, the Comptroller 
General of the United States shall submit a report to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives on the quality of 
personnel management by the Commission.
    (b) Contents of Report.--Each report under subsection (a) shall 
include--
            (1) an evaluation of--
                    (A) the effectiveness of supervisors in using the 
                skills, talents, and motivation of the employees of the 
                Commission to achieve the goals of the Commission;
                    (B) the criteria for promoting employees of the 
                Commission to supervisory positions;
                    (C) the fairness of the application of the promotion 
                criteria to the decisions of the Commission;

[[Page 124 STAT. 1909]]

                    (D) the competence of the professional staff of the 
                Commission;
                    (E) the efficiency of communication between the 
                units of the Commission regarding the work of the 
                Commission (including communication between divisions 
                and between subunits of a division) and the efforts by 
                the Commission to promote such communication;
                    (F) the turnover within subunits of the Commission, 
                including the consideration of supervisors whose 
                subordinates have an unusually high rate of turnover;
                    (G) whether there are excessive numbers of low-
                level, mid-level, or senior-level managers;
                    (H) any initiatives of the Commission that increase 
                the competence of the staff of the Commission;
                    (I) the actions taken by the Commission regarding 
                employees of the Commission who have failed to perform 
                their duties and circumstances under which the 
                Commission has issued to employees a notice of 
                termination; and
                    (J) such other factors relating to the management of 
                the Commission as the Comptroller General determines are 
                appropriate;
            (2) an evaluation of any improvements made with respect to 
        the areas described in paragraph (1) since the date of 
        submission of the previous report; and
            (3) recommendations for how the Commission can use the human 
        resources of the Commission more effectively and efficiently to 
        carry out the mission of the Commission.

    (c) Consultation.--In preparing the report under subsection (a), the 
Comptroller General shall consult with current employees of the 
Commission, retired employees and other former employees of the 
Commission, the Inspector General of the Commission, persons that have 
business before the Commission, any union representing the employees of 
the Commission, private management consultants, academics, and any other 
source that the Comptroller General deems appropriate.
    (d) Report by Commission.--Not later than 90 days after the date on 
which the Comptroller General submits each report under subsection (a), 
the Commission shall submit to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives a report describing the actions taken by 
the Commission in response to the recommendations contained in the 
report under subsection (a).
    (e) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall reimburse 
        the Government Accountability Office for the full cost of making 
        the reports under this section, as billed therefor by the 
        Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation account 
                ``Salaries and Expenses, Government Accountability 
                Office'' current when the payment is received; and
                    (B) remain available until expended.

    (f) Authority to Hire Experts.--The Comptroller General of the 
United States may hire independent consultants with specialized 
expertise in any area relevant to the duties of the Comptroller

[[Page 124 STAT. 1910]]

General described in this section, in order to assist the Comptroller 
General in carrying out such duties.
SEC. 963. <<NOTE: 15 USC 78d-8.>> ANNUAL FINANCIAL CONTROLS AUDIT.

    (a) Reports of Commission.--
            (1) Annual reports required.--Not later than 6 months after 
        the end of each fiscal year, the Commission shall publish and 
        submit to Congress a report that--
                    (A) describes the responsibility of the management 
                of the Commission for establishing and maintaining an 
                adequate internal control structure and procedures for 
                financial reporting; and
                    (B) contains an assessment of the effectiveness of 
                the internal control structure and procedures for 
                financial reporting of the Commission during that fiscal 
                year.
            (2) Attestation.--The reports required under paragraph (1) 
        shall be attested to by the Chairman and chief financial officer 
        of the Commission.

    (b) Report by Comptroller General.--
            (1) Report required.--Not later than 6 months after the end 
        of the first fiscal year after the date of enactment of this 
        Act, the Comptroller General of the United States shall submit a 
        report to Congress that assesses--
                    (A) the effectiveness of the internal control 
                structure and procedures of the Commission for financial 
                reporting; and
                    (B) the assessment of the Commission under 
                subsection (a)(1)(B).
            (2) Attestation.--The Comptroller General shall attest to, 
        and report on, the assessment made by the Commission under 
        subsection (a).

    (c) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall reimburse 
        the Government Accountability Office for the full cost of making 
        the reports under subsection (b), as billed therefor by the 
        Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation account 
                ``Salaries and Expenses, Government Accountability 
                Office'' current when the payment is received; and
                    (B) remain available until expended.
SEC. 964. <<NOTE: 15 USC 78d-9.>>  REPORT ON OVERSIGHT OF NATIONAL 
                        SECURITIES ASSOCIATIONS.

    (a) Report Required.--Not later than 2 years after the date of 
enactment of this Act, and every 3 years thereafter, the Comptroller 
General of the United States shall submit to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives a report that includes an 
evaluation of the oversight by the Commission of national securities 
associations registered under section 15A of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o-3) with respect to--
            (1) the governance of such national securities associations, 
        including the identification and management of conflicts of 
        interest by such national securities associations, together with 
        an analysis of the impact of any conflicts of interest on the

[[Page 124 STAT. 1911]]

        regulatory enforcement or rulemaking by such national securities 
        associations;
            (2) the examinations carried out by the national securities 
        associations, including the expertise of the examiners;
            (3) the executive compensation practices of such national 
        securities associations;
            (4) the arbitration services provided by the national 
        securities associations;
            (5) the review performed by national securities associations 
        of advertising by the members of the national securities 
        associations;
            (6) the cooperation with and assistance to State securities 
        administrators by the national securities associations to 
        promote investor protection;
            (7) how the funding of national securities associations is 
        used to support the mission of the national securities 
        associations, including--
                    (A) the methods of funding;
                    (B) the sufficiency of funds;
                    (C) how funds are invested by the national 
                securities association pending use; and
                    (D) the impact of the methods, sufficiency, and 
                investment of funds on regulatory enforcement by the 
                national securities associations;
            (8) the policies regarding the employment of former 
        employees of national securities associations by regulated 
        entities;
            (9) the ongoing effectiveness of the rules of the national 
        securities associations in achieving the goals of the rules;
            (10) the transparency of governance and activities of the 
        national securities associations; and
            (11) any other issue that has an impact, as determined by 
        the Comptroller General, on the effectiveness of such national 
        securities associations in performing their mission and in 
        dealing fairly with investors and members;

    (b) Reimbursements for Cost of Reports.--
            (1) Reimbursements required.--The Commission shall reimburse 
        the Government Accountability Office for the full cost of making 
        the reports under subsection (a), as billed therefor by the 
        Comptroller General.
            (2) Crediting and use of reimbursements.--Such 
        reimbursements shall--
                    (A) be credited to the appropriation account 
                ``Salaries and Expenses, Government Accountability 
                Office'' current when the payment is received; and
                    (B) remain available until expended.
SEC. 965. COMPLIANCE EXAMINERS.

    Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is 
amended by adding at the end the following:
    ``(h) Examiners.--
            ``(1) Division of trading and markets.--The Division of 
        Trading and Markets of the Commission, or any successor 
        organizational unit, shall have a staff of examiners who shall--
                    ``(A) perform compliance inspections and 
                examinations of entities under the jurisdiction of that 
                Division; and
                    ``(B) report to the Director of that Division.

[[Page 124 STAT. 1912]]

            ``(2) Division of investment management.--The Division of 
        Investment Management of the Commission, or any successor 
        organizational unit, shall have a staff of examiners who shall--
                    ``(A) perform compliance inspections and 
                examinations of entities under the jurisdiction of that 
                Division; and
                    ``(B) report to the Director of that Division.''.
SEC. 966. SUGGESTION PROGRAM FOR EMPLOYEES OF THE COMMISSION.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 4C (15 U.S.C. 78d-3) the following:
``SEC. 4D. <<NOTE: 15 USC 78d-4.>> ADDITIONAL DUTIES OF INSPECTOR 
                      GENERAL.

    ``(a) Suggestion Submissions by Commission Employees.--
            ``(1) Hotline established.--The Inspector General of the 
        Commission shall establish and maintain a telephone hotline or 
        other electronic means for the receipt of--
                    ``(A) suggestions by employees of the Commission for 
                improvements in the work efficiency, effectiveness, and 
                productivity, and the use of the resources, of the 
                Commission; and
                    ``(B) allegations by employees of the Commission of 
                waste, abuse, misconduct, or mismanagement within the 
                Commission.
            ``(2) Confidentiality.--The Inspector General shall maintain 
        as confidential--
                    ``(A) the identity of any individual who provides 
                information by the means established under paragraph 
                (1), unless the individual requests otherwise, in 
                writing; and
                    ``(B) at the request of any such individual, any 
                specific information provided by the individual.

    ``(b) Consideration of Reports.--The Inspector General shall 
consider any suggestions or allegations received by the means 
established under subsection (a)(1), and shall recommend appropriate 
action in relation to such suggestions or allegations.
    ``(c) Recognition.--The Inspector General may recognize any employee 
who makes a suggestion under subsection (a)(1) (or by other means) that 
would or does--
            ``(1) increase the work efficiency, effectiveness, or 
        productivity of the Commission; or
            ``(2) reduce waste, abuse, misconduct, or mismanagement 
        within the Commission.

    ``(d) Report.--The Inspector General of the Commission shall submit 
to Congress an annual report containing a description of--
            ``(1) the nature, number, and potential benefits of any 
        suggestions received under subsection (a);
            ``(2) the nature, number, and seriousness of any allegations 
        received under subsection (a);
            ``(3) any recommendations made or actions taken by the 
        Inspector General in response to substantiated allegations 
        received under subsection (a); and
            ``(4) any action the Commission has taken in response to 
        suggestions or allegations received under subsection (a).

    ``(e) Funding.--The activities of the Inspector General under this 
subsection shall be funded by the Securities and Exchange

[[Page 124 STAT. 1913]]

Commission Investor Protection Fund established under section 21F.''.
SEC. 967. COMMISSION ORGANIZATIONAL STUDY AND REFORM.

    (a) Study Required.--
            (1) In general.-- <<NOTE: Deadline.>> Not later than the end 
        of the 90-day period beginning on the date of the enactment of 
        this subtitle, the Securities and Exchange Commission 
        (hereinafter in this section referred to as the ``SEC'') shall 
        hire an independent consultant of high caliber and with 
        expertise in organizational restructuring and the operations of 
        capital markets to examine the internal operations, structure, 
        funding, and the need for comprehensive reform of the SEC, as 
        well as the SEC's relationship with and the reliance on self-
        regulatory organizations and other entities relevant to the 
        regulation of securities and the protection of securities 
        investors that are under the SEC's oversight.
            (2) Specific areas for study.--The study required under 
        paragraph (1) shall, at a minimum, include the study of--
                    (A) the possible elimination of unnecessary or 
                redundant units at the SEC;
                    (B) improving communications between SEC offices and 
                divisions;
                    (C) the need to put in place a clear chain-of-
                command structure, particularly for enforcement 
                examinations and compliance inspections;
                    (D) the effect of high-frequency trading and other 
                technological advances on the market and what the SEC 
                requires to monitor the effect of such trading and 
                advances on the market;
                    (E) the SEC's hiring authorities, workplace 
                policies, and personal practices, including--
                          (i) whether there is a need to further 
                      streamline hiring authorities for those who are 
                      not lawyers, accountants, compliance examiners, or 
                      economists;
                          (ii) whether there is a need for further pay 
                      reforms;
                          (iii) the diversity of skill sets of SEC 
                      employees and whether the present skill set 
                      diversity efficiently and effectively fosters the 
                      SEC's mission of investor protection; and
                          (iv) the application of civil service laws by 
                      the SEC;
                    (F) whether the SEC's oversight and reliance on 
                self-regulatory organizations promotes efficient and 
                effective governance for the securities markets; and
                    (G) whether adjusting the SEC's reliance on self-
                regulatory organizations is necessary to promote more 
                efficient and effective governance for the securities 
                markets.

    (b) Consultant Report.--Not later than the end of the 150-day period 
after being retained, the independent consultant hired pursuant to 
subsection (a)(1) shall issue a report to the SEC and the Congress 
containing--
            (1) a detailed description of any findings and conclusions 
        made while carrying out the study required under subsection 
        (a)(1); and
            (2) recommendations for legislative, regulatory, or 
        administrative action that the consultant determines appropriate 
        to

[[Page 124 STAT. 1914]]

        enable the SEC and other entities on which the consultant 
        reports to perform their statutorily or otherwise mandated 
        missions.

    (c) SEC Report.--Not later than the end of the 6-month period 
beginning on the date the consultant issues the report under subsection 
(b), and every 6-months thereafter during the 2-year period following 
the date on which the consultant issues such report, the SEC shall issue 
a report to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban Affairs 
of the Senate describing the SEC's implementation of the regulatory and 
administrative recommendations contained in the consultant's report.
SEC. 968. STUDY ON SEC REVOLVING DOOR.

    (a) Government Accountability Office Study.--The Comptroller General 
of the United States shall conduct a study that will--
            (1) review the number of employees who leave the Securities 
        and Exchange Commission to work for financial institutions 
        regulated by such Commission;
            (2) determine how many employees who leave the Securities 
        and Exchange Commission worked on cases that involved financial 
        institutions regulated by such Commission;
            (3) review the length of time employees work for the 
        Securities and Exchange Commission before leaving to be employed 
        by financial institutions regulated by such Commission;
            (4) review existing internal controls and make 
        recommendations on strengthening such controls to ensure that 
        employees of the Securities and Exchange Commission who are 
        later employed by financial institutions did not assist such 
        institutions in violating any rules or regulations of the 
        Commission during the course of their employment with such 
        Commission;
            (5) determine if greater post-employment restrictions are 
        necessary to prevent employees of the Securities and Exchange 
        Commission from being employed by financial institutions after 
        employment with such Commission;
            (6) determine if the volume of employees of the Securities 
        and Exchange Commission who are later employed by financial 
        institutions has led to inefficiencies in enforcement;
            (7) determine if employees of the Securities and Exchange 
        Commission who are later employed by financial institutions 
        assisted such institutions in circumventing Federal rules and 
        regulations while employed by such Commission;
            (8) review any information that may address the volume of 
        employees of the Securities and Exchange Commission who are 
        later employed by financial institutions, and make 
        recommendations to Congress; and
            (9) review other additional issues as may be raised during 
        the course of the study conducted under this subsection.

    (b) Report.--Not later than 1 year after the date of the enactment 
of this subtitle, the Comptroller General of the United States shall 
submit to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban Affairs 
of the Senate a report on the results of the study required by 
subsection (a).

[[Page 124 STAT. 1915]]

             Subtitle G--Strengthening Corporate Governance

SEC. 971. PROXY ACCESS.

    (a) Proxy Access.--Section 14(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78n(a)) is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following:

    ``(2) The rules and regulations prescribed by the Commission under 
paragraph (1) may include--
            ``(A) a requirement that a solicitation of proxy, consent, 
        or authorization by (or on behalf of) an issuer include a 
        nominee submitted by a shareholder to serve on the board of 
        directors of the issuer; and
            ``(B) a requirement that an issuer follow a certain 
        procedure in relation to a solicitation described in 
        subparagraph (A).''.

    (b) <<NOTE: 15 USC 78n note.>>  Regulations.--The Commission may 
issue rules permitting the use by a shareholder of proxy solicitation 
materials supplied by an issuer of securities for the purpose of 
nominating individuals to membership on the board of directors of the 
issuer, under such terms and conditions as the Commission determines are 
in the interests of shareholders and for the protection of investors.

    (c) <<NOTE: 15 USC 78n note.>>  Exemptions.--The Commission may, by 
rule or order, exempt an issuer or class of issuers from the requirement 
made by this section or an amendment made by this section. In 
determining whether to make an exemption under this subsection, the 
Commission shall take into account, among other considerations, whether 
the requirement in the amendment made by subsection (a) 
disproportionately burdens small issuers.
SEC. 972. DISCLOSURES REGARDING CHAIRMAN AND CEO STRUCTURES.

    The Securities Exchange Act of 1934 (15 U.S. C. 78a et seq.) is 
amended by inserting after section 14A, as added by this title, the 
following:
``SEC. 14B. <<NOTE: 15 USC 78n-2.>> CORPORATE GOVERNANCE.

    `` <<NOTE: Deadline. Regulations.>> Not later than 180 days after 
the date of enactment of this subsection, the Commission shall issue 
rules that require an issuer to disclose in the annual proxy sent to 
investors the reasons why the issuer has chosen--
            ``(1) the same person to serve as chairman of the board of 
        directors and chief executive officer (or in equivalent 
        positions); or
            ``(2) different individuals to serve as chairman of the 
        board of directors and chief executive officer (or in equivalent 
        positions of the issuer).''.

                    Subtitle H--Municipal Securities

SEC. 975. REGULATION OF MUNICIPAL SECURITIES AND CHANGES TO THE 
                        BOARD OF THE MSRB.

    (a) Registration of Municipal Securities Dealers and Municipal 
Advisors.--Section 15B(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78o-4(a)) is amended--

[[Page 124 STAT. 1916]]

            (1) in paragraph (1)--
                    (A) by inserting ``(A)'' after ``(1)''; and
                    (B) by adding at the end the following:
                    ``(B) It shall be unlawful for a municipal advisor 
                to provide advice to or on behalf of a municipal entity 
                or obligated person with respect to municipal financial 
                products or the issuance of municipal securities, or to 
                undertake a solicitation of a municipal entity or 
                obligated person, unless the municipal advisor is 
                registered in accordance with this subsection.'';
            (2) in paragraph (2), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer'' each place that term 
        appears;
            (3) in paragraph (3), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer'' each place that term 
        appears;
            (4) in paragraph (4), by striking ``dealer, or municipal 
        securities dealer or class of brokers, dealers, or municipal 
        securities dealers'' and inserting ``dealer, municipal 
        securities dealer, or municipal advisor, or class of brokers, 
        dealers, municipal securities dealers, or municipal advisors''; 
        and
            (5) by adding at the end the following:
            ``(5) No municipal advisor shall make use of the mails or 
        any means or instrumentality of interstate commerce to provide 
        advice to or on behalf of a municipal entity or obligated person 
        with respect to municipal financial products, the issuance of 
        municipal securities, or to undertake a solicitation of a 
        municipal entity or obligated person, in connection with which 
        such municipal advisor engages in any fraudulent, deceptive, or 
        manipulative act or practice.''.

    (b) Municipal Securities Rulemaking Board.--Section 15B(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-4(b)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``Not later 
                than'' and all that follows through ``appointed by the 
                Commission'' and inserting ``The Municipal Securities 
                Rulemaking Board shall be composed of 15 members, or 
                such other number of members as specified by rules of 
                the Board pursuant to paragraph (2)(B),'';
                    (B) by striking the second sentence and inserting 
                the following: ``The members of the Board shall serve as 
                members for a term of 3 years or for such other terms as 
                specified by rules of the Board pursuant to paragraph 
                (2)(B), and shall consist of (A) 8 individuals who are 
                independent of any municipal securities broker, 
                municipal securities dealer, or municipal advisor, at 
                least 1 of whom shall be representative of institutional 
                or retail investors in municipal securities, at least 1 
                of whom shall be representative of municipal entities, 
                and at least 1 of whom shall be a member of the public 
                with knowledge of or experience in the municipal 
                industry (which members are hereinafter referred to as 
                `public representatives'); and (B) 7 individuals who are 
                associated with a broker, dealer, municipal securities 
                dealer, or municipal advisor, including at least 1 
                individual who is associated with and representative of 
                brokers, dealers, or municipal securities dealers that 
                are not banks or subsidiaries or departments or 
                divisions of banks (which members are hereinafter 
                referred

[[Page 124 STAT. 1917]]

                to as `broker-dealer representatives'), at least 1 
                individual who is associated with and representative of 
                municipal securities dealers which are banks or 
                subsidiaries or departments or divisions of banks (which 
                members are hereinafter referred to as `bank 
                representatives'), and at least 1 individual who is 
                associated with a municipal advisor (which members are 
                hereinafter referred to as `advisor representatives' 
                and, together with the broker-dealer representatives and 
                the bank representatives, are referred to as `regulated 
                representatives'). Each member of the board shall be 
                knowledgeable of matters related to the municipal 
                securities markets.''; and
                    (C) in the third sentence, by striking ``initial'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A)--
                          (i) by inserting before the period at the end 
                      of the first sentence the following: ``and advice 
                      provided to or on behalf of municipal entities or 
                      obligated persons by brokers, dealers, municipal 
                      securities dealers, and municipal advisors with 
                      respect to municipal financial products, the 
                      issuance of municipal securities, and 
                      solicitations of municipal entities or obligated 
                      persons undertaken by brokers, dealers, municipal 
                      securities dealers, and municipal advisors''; and
                          (ii) by striking the second sentence;
                    (B) in subparagraph (A)--
                          (i) in the matter preceding clause (i)--
                                    (I) by inserting ``, and no broker, 
                                dealer, municipal securities dealer, or 
                                municipal advisor shall provide advice 
                                to or on behalf of a municipal entity or 
                                obligated person with respect to 
                                municipal financial products or the 
                                issuance of municipal securities,'' 
                                after ``sale of, any municipal 
                                security''; and
                                    (II) by inserting ``and municipal 
                                entities or obligated persons'' after 
                                ``protection of investors'';
                          (ii) in clause (i), by striking ``municipal 
                      securities brokers and municipal securities 
                      dealers'' each place that term appears and 
                      inserting ``municipal securities brokers, 
                      municipal securities dealers, and municipal 
                      advisors'';
                          (iii) in clause (ii), by adding ``and'' at the 
                      end;
                          (iv) in clause (iii), by striking ``; and'' 
                      and inserting a period; and
                          (v) by striking clause (iv);
                    (C) by amending subparagraph (B) to read as follows:
            ``(B) <<NOTE: Procedures.>> establish fair procedures for 
        the nomination and election of members of the Board and assure 
        fair representation in such nominations and elections of public 
        representatives, broker dealer representatives, bank 
        representatives, and advisor representatives. Such rules--
                    ``(i) shall provide that the number of public 
                representatives of the Board shall at all times exceed 
                the total number of regulated representatives and that 
                the membership shall at all times be as evenly divided 
                in number as possible between public representatives and 
                regulated representatives;

[[Page 124 STAT. 1918]]

                    ``(ii) shall specify the length or lengths of terms 
                members shall serve;
                    ``(iii) may increase the number of members which 
                shall constitute the whole Board, provided that such 
                number is an odd number; and
                    ``(iv) <<NOTE: Requirements.>> shall establish 
                requirements regarding the independence of public 
                representatives.''.
                    (D) in subparagraph (C)--
                          (i) by inserting ``and municipal financial 
                      products'' after ``municipal securities'' the 
                      first two times that term appears;
                          (ii) by inserting ``, municipal entities, 
                      obligated persons,'' before ``and the public 
                      interest'';
                          (iii) by striking ``between'' and inserting 
                      ``among'';
                          (iv) by striking ``issuers, municipal 
                      securities brokers, or municipal securities 
                      dealers, to fix'' and inserting ``municipal 
                      entities, obligated persons, municipal securities 
                      brokers, municipal securities dealers, or 
                      municipal advisors, to fix''; and
                          (v) by striking ``brokers or municipal 
                      securities dealers, to regulate'' and inserting 
                      ``brokers, municipal securities dealers, or 
                      municipal advisors, to regulate'';
                    (E) in subparagraph (D)--
                          (i) by inserting ``and advice concerning 
                      municipal financial products'' after 
                      ``transactions in municipal securities'';
                          (ii) by striking ``That no'' and inserting 
                      ``that no'';
                          (iii) by inserting ``municipal advisor,'' 
                      before ``or person associated''; and
                          (iv) by striking ``a municipal securities 
                      broker or municipal securities dealer may be 
                      compelled'' and inserting ``a municipal securities 
                      broker, municipal securities dealer, or municipal 
                      advisor may be compelled'';
                    (F) in subparagraph (E)--
                          (i) by striking ``municipal securities brokers 
                      and municipal securities dealers'' and inserting 
                      ``municipal securities brokers, municipal 
                      securities dealers, and municipal advisors''; and
                          (ii) by striking ``municipal securities broker 
                      or municipal securities dealer'' and inserting 
                      ``municipal securities broker, municipal 
                      securities dealer, or municipal advisor'';
                    (G) in subparagraph (G), by striking ``municipal 
                securities brokers and municipal securities dealers'' 
                and inserting ``municipal securities brokers, municipal 
                securities dealers, and municipal advisors'';
                    (H) in subparagraph (J)--
                          (i) by striking ``municipal securities broker 
                      and each municipal securities dealer'' and 
                      inserting ``municipal securities broker, municipal 
                      securities dealer, and municipal advisor''; and
                          (ii) by striking the period at the end of the 
                      second sentence and inserting ``, which may 
                      include charges for failure to submit to the 
                      Board, or to any information system operated by 
                      the Board, within the prescribed timeframes, any 
                      items of information or documents

[[Page 124 STAT. 1919]]

                      required to be submitted under any rule issued by 
                      the Board.'';
                    (I) in subparagraph (K)--
                          (i) by inserting ``broker, dealer, or'' before 
                      ``municipal securities dealer'' each place that 
                      term appears; and
                          (ii) by striking ``municipal securities 
                      investment portfolio'' and inserting ``related 
                      account of a broker, dealer, or municipal 
                      securities dealer''; and
                    (J) by adding at the end the following:
                    ``(L) with respect to municipal advisors--
                          ``(i) prescribe means reasonably designed to 
                      prevent acts, practices, and courses of business 
                      as are not consistent with a municipal advisor's 
                      fiduciary duty to its clients;
                          ``(ii) provide continuing education 
                      requirements for municipal advisors;
                          ``(iii) provide professional standards; and
                          ``(iv) not impose a regulatory burden on small 
                      municipal advisors that is not necessary or 
                      appropriate in the public interest and for the 
                      protection of investors, municipal entities, and 
                      obligated persons, provided that there is robust 
                      protection of investors against fraud.'';
            (3) by redesignating paragraph (3) as paragraph (7); and
            (4) by inserting after paragraph (2) the following:
            ``(3) The Board, in conjunction with or on behalf of any 
        Federal financial regulator or self-regulatory organization, 
        may--
                    ``(A) establish information systems; and
                    ``(B) assess such reasonable fees and charges for 
                the submission of information to, or the receipt of 
                information from, such systems from any persons which 
                systems may be developed for the purposes of serving as 
                a repository of information from municipal market 
                participants or otherwise in furtherance of the purposes 
                of the Board, a Federal financial regulator, or a self-
                regulatory organization, except that the Board--
                          ``(i) may not charge a fee to municipal 
                      entities or obligated persons to submit documents 
                      or other information to the Board or charge a fee 
                      to any person to obtain, directly from the 
                      Internet site of the Board, documents or 
                      information submitted by municipal entities, 
                      obligated persons, brokers, dealers, municipal 
                      securities dealers, or municipal advisors, 
                      including documents submitted under the rules of 
                      the Board or the Commission; and
                          ``(ii) shall not be prohibited from charging 
                      commercially reasonable fees for automated 
                      subscription-based feeds or similar services, or 
                      for charging for other data or document-based 
                      services customized upon request of any person, 
                      made available to commercial enterprises, 
                      municipal securities market professionals, or the 
                      general public, whether delivered through the 
                      Internet or any other means, that contain all or 
                      part of the documents or information, subject to 
                      approval of the fees by the Commission under 
                      section 19(b).

[[Page 124 STAT. 1920]]

            ``(4) The Board may provide guidance and assistance in the 
        enforcement of, and examination for, compliance with the rules 
        of the Board to the Commission, a registered securities 
        association under section 15A, or any other appropriate 
        regulatory agency, as applicable.
            ``(5) The Board, the Commission, and a registered securities 
        association under section 15A, or the designees of the Board, 
        the Commission, or such association, shall meet not less 
        frequently than 2 times a year--
                    ``(A) to describe the work of the Board, the 
                Commission, and the registered securities association 
                involving the regulation of municipal securities; and
                    ``(B) to share information about--
                          ``(i) the interpretation of the Board, the 
                      Commission, and the registered securities 
                      association of Board rules; and
                          ``(ii) examination and enforcement of 
                      compliance with Board rules.''.

    (c) Discipline of Brokers, Dealers, Municipal Securities Dealers and 
Municipal Advisors; Fiduciary Duty of Municipal Advisors.--Section 
15B(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-4(c)) is 
amended--
            (1) in paragraph (1), by inserting ``, and no broker, 
        dealer, municipal securities dealer, or municipal advisor shall 
        make use of the mails or any means or instrumentality of 
        interstate commerce to provide advice to or on behalf of a 
        municipal entity or obligated person with respect to municipal 
        financial products, the issuance of municipal securities, or to 
        undertake a solicitation of a municipal entity or obligated 
        person,'' after ``any municipal security'';
            (2) by adding at the end of paragraph (1) the following: ``A 
        municipal advisor and any person associated with such municipal 
        advisor shall be deemed to have a fiduciary duty to any 
        municipal entity for whom such municipal advisor acts as a 
        municipal advisor, and no municipal advisor may engage in any 
        act, practice, or course of business which is not consistent 
        with a municipal advisor's fiduciary duty or that is in 
        contravention of any rule of the Board.''.
            (3) in paragraph (2), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer'' each place that term 
        appears;
            (4) in paragraph (3)--
                    (A) by inserting ``or municipal entities or 
                obligated person'' after ``protection of investors'' 
                each place that term appears; and
                    (B) by inserting ``or municipal advisor'' after 
                ``municipal securities dealer'' each place that term 
                appears;
            (5) in paragraph (4), by inserting ``or municipal advisor'' 
        after ``municipal securities dealer or obligated person'' each 
        place that term appears;
            (6) in paragraph (6)(B), by inserting ``or municipal 
        entities or obligated person'' after ``protection of 
        investors'';
            (7) in paragraph (7)--
                    (A) in subparagraph (A)--
                          (i) in clause (i), by striking ``; and'' and 
                      inserting a semicolon;
                          (ii) in clause (ii), by striking the period 
                      and inserting ``; and''; and

[[Page 124 STAT. 1921]]

                          (iii) by adding at the end the following:
                          ``(iii) the Commission, or its designee, in 
                      the case of municipal advisors.''.
                    (B) in subparagraph (B), by inserting ``or municipal 
                entities or obligated person'' after ``protection of 
                investors''; and
            (8) by adding at the end the following:
            ``(9)(A) <<NOTE: Fines.>> Fines collected by the Commission 
        for violations of the rules of the Board shall be equally 
        divided between the Commission and the Board.
            ``(B) Fines collected by a registered securities association 
        under section 15A(7) with respect to violations of the rules of 
        the Board shall be accounted for by such registered securities 
        association separately from other fines collected under section 
        15A(7) and shall be allocated between such registered securities 
        association and the Board, and such allocation shall require the 
        registered securities association to pay to the Board \1/3\ of 
        all fines collected by the registered securities association 
        reasonably allocable to violations of the rules of the Board, or 
        such other portion of such fines as may be directed by the 
        Commission upon agreement between the registered securities 
        association and the Board.''.

    (d) Issuance of Municipal Securities.--Section 15B(d)(2) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-4(d)) is amended--
            (1) by striking ``through a municipal securities broker or 
        municipal securities dealer or otherwise'' and inserting 
        ``through a municipal securities broker, municipal securities 
        dealer, municipal advisor, or otherwise''; and
            (2) by inserting ``or municipal advisors'' before ``to 
        furnish''.

    (e) Definitions.--Section 15B of the Securities Exchange Act of 1934 
(15 U.S.C. 78o-4) is amended by adding at the end the following:
    ``(e) Definitions.--For purposes of this section--
            ``(1) the term `Board' means the Municipal Securities 
        Rulemaking Board established under subsection (b)(1);
            ``(2) the term `guaranteed investment contract' includes any 
        investment that has specified withdrawal or reinvestment 
        provisions and a specifically negotiated or bid interest rate, 
        and also includes any agreement to supply investments on 2 or 
        more future dates, such as a forward supply contract;
            ``(3) the term `investment strategies' includes plans or 
        programs for the investment of the proceeds of municipal 
        securities that are not municipal derivatives, guaranteed 
        investment contracts, and the recommendation of and brokerage of 
        municipal escrow investments;
            ``(4) the term `municipal advisor'--
                    ``(A) means a person (who is not a municipal entity 
                or an employee of a municipal entity) that--
                          ``(i) provides advice to or on behalf of a 
                      municipal entity or obligated person with respect 
                      to municipal financial products or the issuance of 
                      municipal securities, including advice with 
                      respect to the structure, timing, terms, and other 
                      similar matters concerning such financial products 
                      or issues; or
                          ``(ii) undertakes a solicitation of a 
                      municipal entity;

[[Page 124 STAT. 1922]]

                    ``(B) includes financial advisors, guaranteed 
                investment contract brokers, third-party marketers, 
                placement agents, solicitors, finders, and swap 
                advisors, if such persons are described in any of 
                clauses (i) through (iii) of subparagraph (A); and
                    ``(C) does not include a broker, dealer, or 
                municipal securities dealer serving as an underwriter 
                (as defined in section 2(a)(11) of the Securities Act of 
                1933) (15 U.S.C. 77b(a)(11)), any investment adviser 
                registered under the Investment Advisers Act of 1940, or 
                persons associated with such investment advisers who are 
                providing investment advice, any commodity trading 
                advisor registered under the Commodity Exchange Act or 
                persons associated with a commodity trading advisor who 
                are providing advice related to swaps, attorneys 
                offering legal advice or providing services that are of 
                a traditional legal nature, or engineers providing 
                engineering advice;
            ``(5) the term `municipal financial product' means municipal 
        derivatives, guaranteed investment contracts, and investment 
        strategies;
            ``(6) the term `rules of the Board' means the rules proposed 
        and adopted by the Board under subsection (b)(2);
            ``(7) the term `person associated with a municipal advisor' 
        or `associated person of an advisor' means--
                    ``(A) any partner, officer, director, or branch 
                manager of such municipal advisor (or any person 
                occupying a similar status or performing similar 
                functions);
                    ``(B) any other employee of such municipal advisor 
                who is engaged in the management, direction, 
                supervision, or performance of any activities relating 
                to the provision of advice to or on behalf of a 
                municipal entity or obligated person with respect to 
                municipal financial products or the issuance of 
                municipal securities; and
                    ``(C) any person directly or indirectly controlling, 
                controlled by, or under common control with such 
                municipal advisor;
            ``(8) the term `municipal entity' means any State, political 
        subdivision of a State, or municipal corporate instrumentality 
        of a State, including--
                    ``(A) any agency, authority, or instrumentality of 
                the State, political subdivision, or municipal corporate 
                instrumentality;
                    ``(B) any plan, program, or pool of assets sponsored 
                or established by the State, political subdivision, or 
                municipal corporate instrumentality or any agency, 
                authority, or instrumentality thereof; and
                    ``(C) any other issuer of municipal securities;
            ``(9) the term `solicitation of a municipal entity or 
        obligated person' means a direct or indirect communication with 
        a municipal entity or obligated person made by a person, for 
        direct or indirect compensation, on behalf of a broker, dealer, 
        municipal securities dealer, municipal advisor, or investment 
        adviser (as defined in section 202 of the Investment Advisers 
        Act of 1940) that does not control, is not controlled by, or is 
        not under common control with the person undertaking such 
        solicitation for the purpose of obtaining or retaining an 
        engagement by a municipal entity or obligated person of a 
        broker, dealer,

[[Page 124 STAT. 1923]]

        municipal securities dealer, or municipal advisor for or in 
        connection with municipal financial products, the issuance of 
        municipal securities, or of an investment adviser to provide 
        investment advisory services to or on behalf of a municipal 
        entity; and
            ``(10) the term `obligated person' means any person, 
        including an issuer of municipal securities, who is either 
        generally or through an enterprise, fund, or account of such 
        person, committed by contract or other arrangement to support 
        the payment of all or part of the obligations on the municipal 
        securities to be sold in an offering of municipal securities.''.

    (f) Registered Securities Association.--Section 15A(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is amended by 
adding at the end the following:
            ``(15) The rules of the association provide that the 
        association shall--
                    ``(A) request guidance from the Municipal Securities 
                Rulemaking Board in interpretation of the rules of the 
                Municipal Securities Rulemaking Board; and
                    ``(B) provide information to the Municipal 
                Securities Rulemaking Board about the enforcement 
                actions and examinations of the association under 
                section 15B(b)(2)(E), so that the Municipal Securities 
                Rulemaking Board may--
                          ``(i) assist in such enforcement actions and 
                      examinations; and
                          ``(ii) evaluate the ongoing effectiveness of 
                      the rules of the Board.''.

    (g) Registration and Regulation of Brokers and Dealers.--Section 15 
of the Securities Exchange Act of 1934 <<NOTE: 15 USC 78o.>> is 
amended--
            (1) in subsection (b)(4), by inserting ``municipal 
        advisor,'' after ``municipal securities dealer'' each place that 
        term appears; and
            (2) in subsection (c), by inserting ``broker, dealer, or'' 
        before ``municipal securities dealer'' each place that term 
        appears.

    (h) Accounts and Records, Reports, Examinations of Exchanges, 
Members, and Others.--Section 17(a)(1) of the Securities Exchange Act of 
1934 <<NOTE: 15 USC 78q.>> is amended by inserting ``municipal 
advisor,'' after ``municipal securities dealer''.

    (i) <<NOTE: 15 USC 78o note.>>  Effective Date.--This section, and 
the amendments made by this section, shall take effect on October 1, 
2010.
SEC. 976. GOVERNMENT ACCOUNTABILITY OFFICE STUDY OF INCREASED 
                        DISCLOSURE TO INVESTORS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study and review of the disclosure required to be made by 
issuers of municipal securities.
    (b) Subjects for Evaluation.--In conducting the study under 
subsection (a), the Comptroller General of the United States shall--
            (1) broadly describe--
                    (A) the size of the municipal securities markets and 
                the issuers and investors; and
                    (B) the disclosures provided by issuers to 
                investors;
            (2) compare the amount, frequency, and quality of 
        disclosures that issuers of municipal securities are required by 
        law to provide for the benefit of municipal securities holders, 
        including the amount of and frequency of disclosures actually

[[Page 124 STAT. 1924]]

        provided by issuers of municipal securities, with the amount of 
        and frequency of disclosures that issuers of corporate 
        securities provide for the benefit of corporate securities 
        holders, taking into account the differences between issuers of 
        municipal securities and issuers of corporate securities;
            (3) evaluate the costs and benefits to various types of 
        issuers of municipal securities of requiring issuers of 
        municipal bonds to provide additional financial disclosures for 
        the benefit of investors;
            (4) evaluate the potential benefit to investors from 
        additional financial disclosures by issuers of municipal bonds; 
        and
            (5) make recommendations relating to disclosure requirements 
        for municipal issuers, including the advisability of the repeal 
        or retention of section 15B(d) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78o-4(d)) (commonly known as the ``Tower 
        Amendment'').

    (c) Report.--Not later than 24 months after the date of enactment of 
this Act, the Comptroller General of the United States shall submit a 
report to Congress on the results of the study conducted under 
subsection (a), including recommendations for how to improve disclosure 
by issuers of municipal securities.
SEC. 977. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON THE MUNICIPAL 
                        SECURITIES MARKETS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the municipal securities markets.
    (b) Report.--Not later than 18 months after the date of enactment of 
this Act, the Comptroller General of the United States shall submit a 
report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate, and the Committee on Financial Services of the House of 
Representatives, with copies to the Special Committee on Aging of the 
Senate and the Commission, on the results of the study conducted under 
subsection (a), including--
            (1) an analysis of the mechanisms for trading, quality of 
        trade executions, market transparency, trade reporting, price 
        discovery, settlement clearing, and credit enhancements;
            (2) the needs of the markets and investors and the impact of 
        recent innovations;
            (3) recommendations for how to improve the transparency, 
        efficiency, fairness, and liquidity of trading in the municipal 
        securities markets, including with reference to items listed in 
        paragraph (1); and
            (4) potential uses of derivatives in the municipal 
        securities markets.

    (c) Responses.-- <<NOTE: Deadline.>> Not later than 180 days after 
receipt of the report required under subsection (b), the Commission 
shall submit a response to the Committee on Banking, Housing, and Urban 
Affairs of the Senate, and the Committee on Financial Services of the 
House of Representatives, with a copy to the Special Committee on Aging 
of the Senate, stating the actions the Commission has taken in response 
to the recommendations contained in such report.
SEC. 978. FUNDING FOR GOVERNMENTAL ACCOUNTING STANDARDS BOARD.

    (a) Amendment to the Securities Act of 1933.--Section 19 of the 
Securities Act of 1933 (15 U.S.C. 77s), as amended by section 912, is 
further amended by adding at the end the following:

[[Page 124 STAT. 1925]]

    ``(g) Funding for the GASB.--
            ``(1) In general.--The Commission may, subject to the 
        limitations imposed by section 15B of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78o-4), require a national securities 
        association registered under the Securities Exchange Act of 1934 
        to establish--
                    ``(A) a reasonable annual accounting support fee to 
                adequately fund the annual budget of the Governmental 
                Accounting Standards Board (referred to in this 
                subsection as the `GASB'); and
                    ``(B) rules and procedures, in consultation with the 
                principal organizations representing State governors, 
                legislators, local elected officials, and State and 
                local finance officers, to provide for the equitable 
                allocation, assessment, and collection of the accounting 
                support fee established under subparagraph (A) from the 
                members of the association, and the remittance of all 
                such accounting support fees to the Financial Accounting 
                Foundation.
            ``(2) Annual budget.--For purposes of this subsection, the 
        annual budget of the GASB is the annual budget reviewed and 
        approved according to the internal procedures of the Financial 
        Accounting Foundation.
            ``(3) Use of funds.--Any fees or funds collected under this 
        subsection shall be used to support the efforts of the GASB to 
        establish standards of financial accounting and reporting 
        recognized as generally accepted accounting principles 
        applicable to State and local governments of the United States.
            ``(4) Limitation on fee.--The annual accounting support fees 
        collected under this subsection for a fiscal year shall not 
        exceed the recoverable annual budgeted expenses of the GASB 
        (which may include operating expenses, capital, and accrued 
        items).
            ``(5) Rules of construction.--
                    ``(A) Fees not public monies.--Accounting support 
                fees collected under this subsection and other receipts 
                of the GASB shall not be considered public monies of the 
                United States.
                    ``(B) Limitation on authority of the commission.--
                Nothing in this subsection shall be construed to--
                          ``(i) provide the Commission or any national 
                      securities association direct or indirect 
                      oversight of the budget or technical agenda of the 
                      GASB; or
                          ``(ii) affect the setting of generally 
                      accepted accounting principles by the GASB.
                    ``(C) Noninterference with states.--Nothing in this 
                subsection shall be construed to impair or limit the 
                authority of a State or local government to establish 
                accounting and financial reporting standards.''.

    (b) Study of Funding for Governmental Accounting Standards Board.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study that evaluates--
                    (A) the role and importance of the Governmental 
                Accounting Standards Board in the municipal securities 
                markets; and
                    (B) the manner and the level at which the 
                Governmental Accounting Standards Board has been funded.

[[Page 124 STAT. 1926]]

            (2) Consultation.--In conducting the study required under 
        paragraph (1), the Comptroller General shall consult with the 
        principal organizations representing State governors, 
        legislators, local elected officials, and State and local 
        finance officers.
            (3) Report.--Not later than 180 days after the date of 
        enactment of this Act, the Comptroller General shall submit to 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives a report on the study required under paragraph 
        (1).
SEC. 979. <<NOTE: 15 USC 78o-4a.>>  COMMISSION OFFICE OF MUNICIPAL 
                        SECURITIES.

    (a) <<NOTE: Establishment.>>  In General.--There shall be in the 
Commission an Office of Municipal Securities, which shall--
            (1) administer the rules of the Commission with respect to 
        the practices of municipal securities brokers and dealers, 
        municipal securities advisors, municipal securities investors, 
        and municipal securities issuers; and
            (2) coordinate with the Municipal Securities Rulemaking 
        Board for rulemaking and enforcement actions as required by law.

    (b) Director of the Office.--The head of the Office of Municipal 
Securities shall be the Director, who shall report to the Chairman.
    (c) Staffing.--
            (1) In general.--The Office of Municipal Securities shall be 
        staffed sufficiently to carry out the requirements of this 
        section.
            (2) Requirement.--The staff of the Office of Municipal 
        Securities shall include individuals with knowledge of and 
        expertise in municipal finance.

    Subtitle I--Public Company Accounting Oversight Board, Portfolio 
                      Margining, and Other Matters

SEC. 981. AUTHORITY TO SHARE CERTAIN INFORMATION WITH FOREIGN 
                        AUTHORITIES.

    (a) Definition.--Section 2(a) of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7201(a)) is amended by adding at the end the following:
            ``(17) Foreign auditor oversight authority.--The term 
        `foreign auditor oversight authority' means any governmental 
        body or other entity empowered by a foreign government to 
        conduct inspections of public accounting firms or otherwise to 
        administer or enforce laws related to the regulation of public 
        accounting firms.''.

    (b) Availability to Share Information.--Section 105(b)(5) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)) is amended by adding 
at the end the following:
                    ``(C) Availability to foreign oversight 
                authorities.--Without the loss of its status as 
                confidential and privileged in the hands of the Board, 
                all information referred to in subparagraph (A) that 
                relates to a public accounting firm that a foreign 
                government has empowered

[[Page 124 STAT. 1927]]

                a foreign auditor oversight authority to inspect or 
                otherwise enforce laws with respect to, may, at the 
                discretion of the Board, be made available to the 
                foreign auditor oversight authority, if--
                          ``(i) the Board finds that it is necessary to 
                      accomplish the purposes of this Act or to protect 
                      investors;
                          ``(ii) the foreign auditor oversight authority 
                      provides--
                                    ``(I) such assurances of 
                                confidentiality as the Board may 
                                request;
                                    ``(II) a description of the 
                                applicable information systems and 
                                controls of the foreign auditor 
                                oversight authority; and
                                    ``(III) a description of the laws 
                                and regulations of the foreign 
                                government of the foreign auditor 
                                oversight authority that are relevant to 
                                information access; and
                          ``(iii) the Board determines that it is 
                      appropriate to share such information.''.

    (c) Conforming Amendment.--Section 105(b)(5)(A) of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(A)) is amended by striking 
``subparagraph (B)'' and inserting ``subparagraphs (B) and (C)''.
SEC. 982. OVERSIGHT OF BROKERS AND DEALERS.

    (a) Definitions.--
            (1) Definitions amended.--Title I of the Sarbanes-Oxley Act 
        of 2002 (15 U.S.C. 7201 et seq.) is amended by adding at the end 
        the following new section:
``SEC. 110. <<NOTE: 15 USC 7220.>>  DEFINITIONS.

    ``For the purposes of this title, the following definitions shall 
apply:
            ``(1) Audit.--The term `audit' means an examination of the 
        financial statements, reports, documents, procedures, controls, 
        or notices of any issuer, broker, or dealer by an independent 
        public accounting firm in accordance with the rules of the Board 
        or the Commission, for the purpose of expressing an opinion on 
        the financial statements or providing an audit report.
            ``(2) Audit report.--The term `audit report' means a 
        document, report, notice, or other record--
                    ``(A) prepared following an audit performed for 
                purposes of compliance by an issuer, broker, or dealer 
                with the requirements of the securities laws; and
                    ``(B) in which a public accounting firm either--
                          ``(i) sets forth the opinion of that firm 
                      regarding a financial statement, report, notice, 
                      or other document, procedures, or controls; or
                          ``(ii) asserts that no such opinion can be 
                      expressed.
            ``(3) Broker.--The term `broker' means a broker (as such 
        term is defined in section 3(a)(4) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(4))) that is required to file a 
        balance sheet, income statement, or other financial statement 
        under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), 
        where such balance sheet, income statement, or financial 
        statement is required to be certified by a registered public 
        accounting firm.

[[Page 124 STAT. 1928]]

            ``(4) Dealer.--The term `dealer' means a dealer (as such 
        term is defined in section 3(a)(5) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(5))) that is required to file a 
        balance sheet, income statement, or other financial statement 
        under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), 
        where such balance sheet, income statement, or financial 
        statement is required to be certified by a registered public 
        accounting firm.
            ``(5) Professional standards.--The term `professional 
        standards' means--
                    ``(A) accounting principles that are--
                          ``(i) established by the standard setting body 
                      described in section 19(b) of the Securities Act 
                      of 1933, as amended by this Act, or prescribed by 
                      the Commission under section 19(a) of that Act (15 
                      U.S.C. 17a(s)) or section 13(b) of the Securities 
                      Exchange Act of 1934 (15 U.S.C. 78a(m)); and
                          ``(ii) relevant to audit reports for 
                      particular issuers, brokers, or dealers, or dealt 
                      with in the quality control system of a particular 
                      registered public accounting firm; and
                    ``(B) auditing standards, standards for attestation 
                engagements, quality control policies and procedures, 
                ethical and competency standards, and independence 
                standards (including rules implementing title II) that 
                the Board or the Commission determines--
                          ``(i) relate to the preparation or issuance of 
                      audit reports for issuers, brokers, or dealers; 
                      and
                          ``(ii) are established or adopted by the Board 
                      under section 103(a), or are promulgated as rules 
                      of the Commission.
            ``(6) Self-regulatory organization.--The term `self-
        regulatory organization' has the same meaning as in section 3(a) 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).''.
            (2) Conforming amendment.--Section 2(a) of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7201(a)) is amended in the matter 
        preceding paragraph (1), by striking ``In this'' and inserting 
        ``Except as otherwise specifically provided in this Act, in 
        this''.

    (b) Establishment and Administration of the Public Company 
Accounting Oversight Board.--Section 101 of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7211) is amended--
            (1) by striking ``issuers'' each place that term appears and 
        inserting ``issuers, brokers, and dealers''; and
            (2) in subsection (a)--
                    (A) by striking ``public companies'' and inserting 
                ``companies''; and
                    (B) by striking ``for companies the securities of 
                which are sold to, and held by and for, public 
                investors''.

    (c) Registration With the Board.--Section 102 of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7212) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Beginning 180'' and all that 
                follows through ``101(d), it'' and inserting ``It''; and
                    (B) by striking ``issuer'' and inserting ``issuer, 
                broker, or dealer'';
            (2) in subsection (b)--

[[Page 124 STAT. 1929]]

                    (A) in paragraph (2)(A), by striking ``issuers'' and 
                inserting ``issuers, brokers, and dealers''; and
                    (B) by striking ``issuer'' each place that term 
                appears and inserting ``issuer, broker, or dealer''.

    (d) Auditing and Independence.--Section 103(a) of the Sarbanes-Oxley 
Act of 2002 (15 U.S.C. 7213(a)) is amended--
            (1) in paragraph (1), by striking ``and such ethics 
        standards'' and inserting ``such ethics standards, and such 
        independence standards'';
            (2) in paragraph (2)(A)(iii), by striking ``describe in each 
        audit report'' and inserting ``in each audit report for an 
        issuer, describe''; and
            (3) in paragraph (2)(B)(i), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers''.

    (e) Inspections of Registered Public Accounting Firms.--
            (1) Amendments.--Section 104(a) of the Sarbanes-Oxley Act of 
        2002 (15 U.S.C. 7214(a)) is amended--
                    (A) by striking ``The Board shall'' and inserting 
                the following:
            ``(1) Inspections generally.--The Board shall''; and
                    (B) by adding at the end the following:
            ``(2) Inspections of audit reports for brokers and 
        dealers.--
                    ``(A) The Board may, by rule, conduct and require a 
                program of inspection in accordance with paragraph (1), 
                on a basis to be determined by the Board, of registered 
                public accounting firms that provide one or more audit 
                reports for a broker or dealer. The Board, in 
                establishing such a program, may allow for 
                differentiation among classes of brokers and dealers, as 
                appropriate.
                    ``(B) If the Board determines to establish a program 
                of inspection pursuant to subparagraph (A), the Board 
                shall consider in establishing any inspection schedules 
                whether differing schedules would be appropriate with 
                respect to registered public accounting firms that issue 
                audit reports only for one or more brokers or dealers 
                that do not receive, handle, or hold customer securities 
                or cash or are not a member of the Securities Investor 
                Protection Corporation.
                    ``(C) Any rules of the Board pursuant to this 
                paragraph shall be subject to prior approval by the 
                Commission pursuant to section 107(b) before the rules 
                become effective, including an opportunity for public 
                notice and comment.
                    ``(D) Notwithstanding anything to the contrary in 
                section 102 of this Act, a public accounting firm shall 
                not be required to register with the Board if the public 
                accounting firm is exempt from the inspection program 
                which may be established by the Board under subparagraph 
                (A).''.
            (2) Conforming amendment.--Section 17(e)(1)(A) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78q(e)(1)(A)) is 
        amended by striking ``registered public accounting firm'' and 
        inserting ``independent public accounting firm, or by a 
        registered public accounting firm if the firm is required to be 
        registered under the Sarbanes-Oxley Act of 2002,''.

    (f) Investigations and Disciplinary Proceedings.--Section 
105(c)(7)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(c)(7)(B)) 
is amended--

[[Page 124 STAT. 1930]]

            (1) in the subparagraph heading, by inserting ``, broker, or 
        dealer'' after ``issuer'';
            (2) by striking ``any issuer'' each place that term appears 
        and inserting ``any issuer, broker, or dealer''; and
            (3) by striking ``an issuer under this subsection'' and 
        inserting ``a registered public accounting firm under this 
        subsection''.

    (g) Foreign Public Accounting Firms.--Section 106(a) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7216(a)) is amended--
            (1) in paragraph (1), by striking ``issuer'' and inserting 
        ``issuer, broker, or dealer''; and
            (2) in paragraph (2), by striking ``issuers'' and inserting 
        ``issuers, brokers, or dealers''.

    (h) Funding.--Section 109 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7219) is amended--
            (1) in subsection (c)(2), by striking ``subsection (i)'' and 
        inserting ``subsection (j)'';
            (2) in subsection (d)--
                    (A) in paragraph (2), by striking ``allowing for 
                differentiation among classes of issuers, as 
                appropriate'' and inserting ``and among brokers and 
                dealers, in accordance with subsection (h), and allowing 
                for differentiation among classes of issuers, brokers 
                and dealers, as appropriate''; and
                    (B) by adding at the end the following:
            ``(3) Brokers and dealers.-- <<NOTE: Fees.>> The Board shall 
        begin the allocation, assessment, and collection of fees under 
        paragraph (2) with respect to brokers and dealers with the 
        payment of support fees to fund the first full fiscal year 
        beginning after the date of enactment of the Investor Protection 
        and Securities Reform Act of 2010.'';
            (3) <<NOTE: 15 USC 78m.>>  by redesignating subsections (h), 
        (i), and (j) as subsections (i), (j), and (k), respectively; and
            (4) by inserting after subsection (g) the following:

    ``(h) Allocation of Accounting Support Fees Among Brokers and 
Dealers.--
            ``(1) Obligation to pay.--Each broker or dealer shall pay to 
        the Board the annual accounting support fee allocated to such 
        broker or dealer under this section.
            ``(2) Allocation.--Any amount due from a broker or dealer 
        (or from a particular class of brokers and dealers) under this 
        section shall be allocated among brokers and dealers and payable 
        by the broker or dealer (or the brokers and dealers in the 
        particular class, as applicable).
            ``(3) Proportionality.--The amount due from a broker or 
        dealer shall be in proportion to the net capital of the broker 
        or dealer (before or after any adjustments), compared to the 
        total net capital of all brokers and dealers (before or after 
        any adjustments), in accordance with rules issued by the 
        Board.''.

    (i) Referral of Investigations to a Self-regulatory Organization.--
Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(b)(4)(B)) is amended--
            (1) by redesignating clauses (ii) and (iii) as clauses (iii) 
        and (iv), respectively; and
            (2) by inserting after clause (i) the following:

[[Page 124 STAT. 1931]]

                          ``(ii) to a self-regulatory organization, in 
                      the case of an investigation that concerns an 
                      audit report for a broker or dealer that is under 
                      the jurisdiction of such self-regulatory 
                      organization;''.

    (j) Use of Documents Related to an Inspection or Investigation.--
Section 105(b)(5)(B)(ii) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(b)(5)(B)(ii)) is amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) in subclause (IV), by striking the comma and inserting 
        ``; and''; and
            (3) by inserting after subclause (IV) the following:
                                    ``(V) a self-regulatory 
                                organization, with respect to an audit 
                                report for a broker or dealer that is 
                                under the jurisdiction of such self-
                                regulatory organization,''.
SEC. 983. PORTFOLIO MARGINING.

    (a) Advances.--Section 9(a)(1) of the Securities Investor Protection 
Act of 1970 <<NOTE: 15 USC 78fff-3.>>  (15 U.S.C. 78fff3(a)(1)) is 
amended by inserting ``or options on commodity futures contracts'' after 
``claim for securities''.

    (b) Definitions.--Section 16 of the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78lll) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Customer.--
                    ``(A) In general.--The term `customer' of a debtor 
                means any person (including any person with whom the 
                debtor deals as principal or agent) who has a claim on 
                account of securities received, acquired, or held by the 
                debtor in the ordinary course of its business as a 
                broker or dealer from or for the securities accounts of 
                such person for safekeeping, with a view to sale, to 
                cover consummated sales, pursuant to purchases, as 
                collateral, security, or for purposes of effecting 
                transfer.
                    ``(B) Included persons.--The term `customer' 
                includes--
                          ``(i) any person who has deposited cash with 
                      the debtor for the purpose of purchasing 
                      securities;
                          ``(ii) any person who has a claim against the 
                      debtor for cash, securities, futures contracts, or 
                      options on futures contracts received, acquired, 
                      or held in a portfolio margining account carried 
                      as a securities account pursuant to a portfolio 
                      margining program approved by the Commission; and
                          ``(iii) any person who has a claim against the 
                      debtor arising out of sales or conversions of such 
                      securities.
                    ``(C) Excluded persons.--The term `customer' does 
                not include any person, to the extent that--
                          ``(i) the claim of such person arises out of 
                      transactions with a foreign subsidiary of a member 
                      of SIPC; or
                          ``(ii) such person has a claim for cash or 
                      securities which by contract, agreement, or 
                      understanding, or by operation of law, is part of 
                      the capital of the debtor, or is subordinated to 
                      the claims of any or all creditors of the debtor, 
                      notwithstanding that some ground exists

[[Page 124 STAT. 1932]]

                      for declaring such contract, agreement, or 
                      understanding void or voidable in a suit between 
                      the claimant and the debtor.'';
            (2) in paragraph (4)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (D) as 
                subparagraph (E); and
                    (C) by inserting after subparagraph (C) the 
                following:
                    ``(D) in the case of a portfolio margining account 
                of a customer that is carried as a securities account 
                pursuant to a portfolio margining program approved by 
                the Commission, a futures contract or an option on a 
                futures contract received, acquired, or held by or for 
                the account of a debtor from or for such portfolio 
                margining account, and the proceeds thereof; and'';
            (3) in paragraph (9), in the matter following subparagraph 
        (L), by inserting after ``Such term'' the following: ``includes 
        revenues earned by a broker or dealer in connection with a 
        transaction in the portfolio margining account of a customer 
        carried as securities accounts pursuant to a portfolio margining 
        program approved by the Commission. Such term''; and
            (4) in paragraph (11)--
                    (A) in subparagraph (A)--
                          (i) by striking ``filing date, all'' and all 
                      that follows through the end of the subparagraph 
                      and inserting the following: ``filing date--
                          ``(i) all securities positions of such 
                      customer (other than customer name securities 
                      reclaimed by such customer); and
                          ``(ii) all positions in futures contracts and 
                      options on futures contracts held in a portfolio 
                      margining account carried as a securities account 
                      pursuant to a portfolio margining program approved 
                      by the Commission, including all property 
                      collateralizing such positions, to the extent that 
                      such property is not otherwise included herein; 
                      minus''; and
                    (B) in the matter following subparagraph (C), by 
                striking ``In determining'' and inserting the following: 
                ``A claim for a commodity futures contract received, 
                acquired, or held in a portfolio margining account 
                pursuant to a portfolio margining program approved by 
                the Commission or a claim for a security futures 
                contract, shall be deemed to be a claim with respect to 
                such contract as of the filing date, and such claim 
                shall be treated as a claim for cash. In determining''.
SEC. 984. LOAN OR BORROWING OF SECURITIES.

    (a) Rulemaking Authority.--Section 10 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78j) is amended by adding at the end the following:
            ``(c)(1) To effect, accept, or facilitate a transaction 
        involving the loan or borrowing of securities in contravention 
        of such rules and regulations as the Commission may prescribe as 
        necessary or appropriate in the public interest or for the 
        protection of investors.
            ``(2) Nothing in paragraph (1) may be construed to limit the 
        authority of the appropriate Federal banking agency (as

[[Page 124 STAT. 1933]]

        defined in section 3(q) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(q))), the National Credit Union Administration, or 
        any other Federal department or agency having a responsibility 
        under Federal law to prescribe rules or regulations restricting 
        transactions involving the loan or borrowing of securities in 
        order to protect the safety and soundness of a financial 
        institution or to protect the financial system from systemic 
        risk.''.

    (b) <<NOTE: Deadline. 15 USC 78j note.>>  Rulemaking Required.--Not 
later than 2 years after the date of enactment of this Act, the 
Commission shall promulgate rules that are designed to increase the 
transparency of information available to brokers, dealers, and 
investors, with respect to the loan or borrowing of securities.
SEC. 985. TECHNICAL CORRECTIONS TO FEDERAL SECURITIES LAWS.

    (a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C. 
77a et seq.) is amended--
            (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking 
        ``individual;'' and inserting ``individual,'';
            (2) in section 18 (15 U.S.C. 77r)--
                    (A) in subsection (b)(1)(C), by striking ``is a 
                security'' and inserting ``a security''; and
                    (B) in subsection (c)(2)(B)(i), by striking ``State, 
                or'' and inserting ``State or'';
            (3) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by 
        striking ``in paragraph (1) of (3)'' and inserting ``in 
        paragraph (1) or (3)''; and
            (4) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
        2(c)(1)(B)(ii)), by striking ``business entity;'' and inserting 
        ``business entity,''.

    (b) Securities Exchange Act of 1934.--The Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) is amended--
            (1) in section 2 (15 U.S.C. 78b), by striking ``affected'' 
        and inserting ``effected'';
            (2) in section 3 (15 U.S.C. 78c)--
                    (A) in subsection (a)(55)(A), by striking ``section 
                3(a)(12) of the Securities Exchange Act of 1934'' and 
                inserting ``section 3(a)(12) of this title''; and
                    (B) in subsection (g), by striking ``company, 
                account person, or entity'' and inserting ``company, 
                account, person, or entity'';
            (3) in section 10A(i)(1)(B) (15 U.S.C. 78j-1(i)(1)(B))--
                    (A) in the subparagraph heading, by striking 
                ``minimus'' and inserting ``minimis''; and
                    (B) in clause (i), by striking ``nonaudit'' and 
                inserting ``non-audit'';
            (4) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking 
        ``earning statement'' and inserting ``earnings statement'';
            (5) in section 15 (15 U.S.C. 78o)--
                    (A) in subsection (b)(1)--
                          (i) in subparagraph (B), by striking ``The 
                      order granting'' and all that follows through 
                      ``from such membership.''; and
                          (ii) in the undesignated matter immediately 
                      following subparagraph (B), by inserting after the 
                      first sentence the following: ``The order granting 
                      registration shall not be effective until such 
                      broker or dealer has become a member of a 
                      registered securities association,

[[Page 124 STAT. 1934]]

                      or until such broker or dealer has become a member 
                      of a national securities exchange, if such broker 
                      or dealer effects transactions solely on that 
                      exchange, unless the Commission has exempted such 
                      broker or dealer, by rule or order, from such 
                      membership.'';
            (6) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
                    (A) by redesignating clauses (i) and (ii) as 
                subparagraphs (A) and (B), respectively, and adjusting 
                the subparagraph margins accordingly;
                    (B) in subparagraph (B), as so redesignated, by 
                striking ``The order granting'' and all that follows 
                through ``from such membership.''; and
                    (C) in the matter following subparagraph (B), as so 
                redesignated, by inserting after the first sentence the 
                following: ``The order granting registration shall not 
                be effective until such government securities broker or 
                government securities dealer has become a member of a 
                national securities exchange registered under section 6 
                of this title, or a securities association registered 
                under section 15A of this title, unless the Commission 
                has exempted such government securities broker or 
                government securities dealer, by rule or order, from 
                such membership.'';
            (7) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by 
        striking ``15A(k) gives'' and inserting ``15A(k), give''; and
            (8) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by 
        striking ``paragraph (1) subsection'' and inserting ``Paragraph 
        (1)''.

    (c) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939 
(15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking 
        ``section 2 of such Act'' and inserting ``section 2(a) of such 
        Act''; and
            (2) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by 
        striking ``, in the'' and inserting ``in the''.

    (d) Investment Company Act of 1940.--The Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)), in the 
        matter following subparagraph (B)(vii)--
                    (A) by striking ``clause (vi)'' each place that term 
                appears and inserting ``clause (vii)''; and
                    (B) in each of subparagraphs (A)(vi) and (B)(vi), by 
                adding ``and'' at the end of subclause (III);
            (2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by 
        adding ``or'' after the semicolon at the end;
            (3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by 
        striking ``any provision of this subsection'' and inserting 
        ``any provision of this paragraph'';
            (4) in section 17(f) (15 U.S.C. 80a-17(f))--
                    (A) in paragraph (4), by striking ``No such member'' 
                and inserting ``No member of a national securities 
                exchange''; and
                    (B) in paragraph (6), by striking ``company may 
                serve'' and inserting ``company, may serve''; and
            (5) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
        60(a)(3)(B)(iii))--
                    (A) by striking ``paragraph (1) of section 205'' and 
                inserting ``section 205(a)(1)''; and

[[Page 124 STAT. 1935]]

                    (B) by striking ``clause (A) or (B) of that 
                section'' and inserting ``paragraph (1) or (2) of 
                section 205(b)''.

    (e) Investment Advisers Act of 1940.--The Investment Advisers Act of 
1940 (15 U.S.C. 80b-1 et seq.) is amended--
            (1) in section 203 (15 U.S.C. 80b-3)--
                    (A) in subsection (c)(1)(A), by striking ``principal 
                business office and'' and inserting ``principal office, 
                principal place of business, and''; and
                    (B) in subsection (k)(4)(B), in the matter following 
                clause (ii), by striking ``principal place of business'' 
                and inserting ``principal office or place of business'';
            (2) in section 206(3) (15 U.S.C. 80b-6(3)), by adding ``or'' 
        after the semicolon at the end;
            (3) in section 213(a) (15 U.S.C. 80b-13(a)), by striking 
        ``principal place of business'' and inserting ``principal office 
        or place of business''; and
            (4) in section 222 (15 U.S.C. 80b-18a), by striking 
        ``principal place of business'' each place that term appears and 
        inserting ``principal office and place of business''.
SEC. 986. CONFORMING AMENDMENTS RELATING TO REPEAL OF THE PUBLIC 
                        UTILITY HOLDING COMPANY ACT OF 1935.

    (a) Securities Exchange Act of 1934.--The Securities Exchange Act of 
1934 (15 U.S.C. 78 et seq.) is amended--
            (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking 
        ``the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a 
        et seq.),'';
            (2) in section 12(k) (15 U.S.C. 78l(k)), by amending 
        paragraph (7) to read as follows:  
            ``(7) Definition.--For purposes of this subsection, the term 
        `emergency' means--
                    ``(A) a major market disturbance characterized by or 
                constituting--
                          ``(i) sudden and excessive fluctuations of 
                      securities prices generally, or a substantial 
                      threat thereof, that threaten fair and orderly 
                      markets; or
                          ``(ii) a substantial disruption of the safe or 
                      efficient operation of the national system for 
                      clearance and settlement of transactions in 
                      securities, or a substantial threat thereof; or
                    ``(B) a major disturbance that substantially 
                disrupts, or threatens to substantially disrupt--
                          ``(i) the functioning of securities markets, 
                      investment companies, or any other significant 
                      portion or segment of the securities markets; or
                          ``(ii) the transmission or processing of 
                      securities transactions.''; and
            (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking 
        ``section 18(c) of the Public Utility Holding Company Act of 
        1935,''.

    (b) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939 
(15 U.S.C. 77aaa et seq.) is amended--
            (1) in section 303 (15 U.S.C. 77ccc), by striking paragraph 
        (17) and inserting the following:
            ``(17) The terms `Securities Act of 1933' and `Securities 
        Exchange Act of 1934' shall be deemed to refer, respectively,

[[Page 124 STAT. 1936]]

        to such Acts, as amended, whether amended prior to or after the 
        enactment of this title.'';
            (2) in section 308 (15 U.S.C. 77hhh), by striking 
        ``Securities Act of 1933, the Securities Exchange Act of 1934, 
        or the Public Utility Holding Company Act of 1935'' each place 
        that term appears and inserting ``Securities Act of 1933 or the 
        Securities Exchange Act of 1934'';
            (3) in section 310 (15 U.S.C. 77jjj), by striking subsection 
        (c);
            (4) in section 311 (15 U.S.C. 77kkk), by striking subsection 
        (c);
            (5) in section 323(b) (15 U.S.C. 77www(b)), by striking 
        ``Securities Act of 1933, or the Securities Exchange Act of 
        1934, or the Public Utility Holding Company Act of 1935'' and 
        inserting ``Securities Act of 1933 or the Securities Exchange 
        Act of 1934''; and
            (6) in section 326 (15 U.S.C. 77zzz), by striking 
        ``Securities Act of 1933, or the Securities Exchange Act of 
        1934, or the Public Utility Holding Company Act of 1935,'' and 
        inserting ``Securities Act of 1933 or the Securities Exchange 
        Act of 1934''.

    (c) Investment Company Act of 1940.--The Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) is amended--
            (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by 
        striking `` `Public Utility Holding Company Act of 1935','';
            (2) in section 3(c) (15 U.S.C. 80a-3(c)), by striking 
        paragraph (8) and inserting the following:
            ``(8) [Repealed]'';
            (3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking 
        ``the Public Utility Holding Company Act of 1935,''; and
            (4) in section 50 (15 U.S.C. 80a-49), by striking ``the 
        Public Utility Holding Company Act of 1935,''.

    (d) Investment Advisers Act of 1940.--Section 202(a)(21) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is amended by 
striking `` `Public Utility Holding Company Act of 1935',''.
SEC. 987. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL 
                        LOSSES TO THE DEPOSIT INSURANCE FUND FOR 
                        PURPOSES OF INSPECTOR GENERAL REVIEWS.

    (a) In General.--Section 38(k) of the Federal Deposit Insurance 
Act <<NOTE: 12 USC 1831o.>>  (U.S.C. 1831o(k)) is amended--
            (1) in paragraph (2), by striking subparagraph (B) and 
        inserting the following:
                    ``(B) Material loss defined.--The term `material 
                loss' means any estimated loss in excess of--
                          ``(i) $200,000,000, if the loss occurs during 
                      the period beginning on January 1, 2010, and 
                      ending on December 31, 2011;
                          ``(ii) $150,000,000, if the loss occurs during 
                      the period beginning on January 1, 2012, and 
                      ending on December 31, 2013; and
                          ``(iii) $50,000,000, if the loss occurs on or 
                      after January 1, 2014, provided that if the 
                      inspector general of a Federal banking agency 
                      certifies to the Committee on Banking, Housing, 
                      and Urban Affairs of the Senate and the Committee 
                      on Financial Services of the House

[[Page 124 STAT. 1937]]

                      of Representatives that the number of projected 
                      failures of depository institutions that would 
                      require material loss reviews for the following 12 
                      months will be greater than 30 and would hinder 
                      the effectiveness of its oversight functions, then 
                      the definition of `material loss' shall be 
                      $75,000,000 for a duration of 1 year from the date 
                      of the certification.'';
            (2) in paragraph (4)(A) by striking ``the report'' and 
        inserting ``any report on losses required under this 
        subsection,'';
            (3) by striking paragraph (6);
            (4) by redesignating paragraph (5) as paragraph (6); and
            (5) by inserting after paragraph (4) the following:
            ``(5) Losses that are not material.--
                    ``(A) Semiannual report.-- <<NOTE: Time 
                period.>> For the 6-month period ending on March 31, 
                2010, and each 6-month period thereafter, the Inspector 
                General of each Federal banking agency shall--
                          ``(i) identify losses that the Inspector 
                      General estimates have been incurred by the 
                      Deposit Insurance Fund during that 6-month period, 
                      with respect to the insured depository 
                      institutions supervised by the Federal banking 
                      agency;
                          ``(ii) for each loss incurred by the Deposit 
                      Insurance Fund that is not a material loss, 
                      determine--
                                    ``(I) the grounds identified by the 
                                Federal banking agency or State bank 
                                supervisor for appointing the 
                                Corporation as receiver under section 
                                11(c)(5); and
                                    ``(II) whether any unusual 
                                circumstances exist that might warrant 
                                an in-depth review of the loss; and
                          ``(iii) prepare and submit a written report to 
                      the appropriate Federal banking agency and to 
                      Congress on the results of any determination by 
                      the Inspector General, including--
                                    ``(I) an identification of any loss 
                                that warrants an in-depth review, 
                                together with the reasons why such 
                                review is warranted, or, if the 
                                Inspector General determines that no 
                                review is warranted, an explanation of 
                                such determination; and
                                    ``(II) for each loss identified 
                                under subclause (I) that warrants an in-
                                depth review, the date by which such 
                                review, and a report on such review 
                                prepared in a manner consistent with 
                                reports under paragraph (1)(A), will be 
                                completed and submitted to the Federal 
                                banking agency and Congress.
                    ``(B) Deadline for semiannual report.--The Inspector 
                General of each Federal banking agency shall--
                          ``(i) submit each report required under 
                      paragraph (A) expeditiously, and not later than 90 
                      days after the end of the 6-month period covered 
                      by the report; and
                          ``(ii) provide a copy of the report required 
                      under paragraph (A) to any Member of Congress, 
                      upon request.''.

[[Page 124 STAT. 1938]]

    (b) Technical and Conforming Amendment.--The heading for subsection 
(k) of section 38 of the Federal Deposit Insurance Act (U.S.C. 1831o(k)) 
is amended to read as follows:
    ``(k) Reviews Required When Deposit Insurance Fund Incurs Losses.--
''.
SEC. 988. AMENDMENT TO DEFINITION OF MATERIAL LOSS AND NONMATERIAL 
                        LOSSES TO THE NATIONAL CREDIT UNION SHARE 
                        INSURANCE FUND FOR PURPOSES OF INSPECTOR 
                        GENERAL REVIEWS.

    (a) In General.--Section 216(j) of the Federal Credit Union Act (12 
U.S.C. 1790d(j)) is amended to read as follows:
    ``(j) Reviews Required When Share Insurance Fund Experiences 
Losses.--
            ``(1) In general.--If the Fund incurs a material loss with 
        respect to an insured credit union, the Inspector General of the 
        Board shall--
                    ``(A) <<NOTE: Reports.>> submit to the Board a 
                written report reviewing the supervision of the credit 
                union by the Administration (including the 
                implementation of this section by the Administration), 
                which shall include--
                          ``(i) a description of the reasons why the 
                      problems of the credit union resulted in a 
                      material loss to the Fund; and
                          ``(ii) recommendations for preventing any such 
                      loss in the future; and
                    ``(B) submit a copy of the report under subparagraph 
                (A) to--
                          ``(i) the Comptroller General of the United 
                      States;
                          ``(ii) the Corporation;
                          ``(iii) in the case of a report relating to a 
                      State credit union, the appropriate State 
                      supervisor; and
                          ``(iv) to any Member of Congress, upon 
                      request.
            ``(2) Material loss defined.--For purposes of determining 
        whether the Fund has incurred a material loss with respect to an 
        insured credit union, a loss is material if it exceeds the sum 
        of--
                    ``(A) $25,000,000; and
                    ``(B) an amount equal to 10 percent of the total 
                assets of the credit union on the date on which the 
                Board initiated assistance under section 208 or was 
                appointed liquidating agent.
            ``(3) Public disclosure required.--
                    ``(A) In general.--The Board shall disclose a report 
                under this subsection, upon request under section 552 of 
                title 5, United States Code, without excising--
                          ``(i) any portion under section 552(b)(5) of 
                      title 5, United States Code; or
                          ``(ii) any information about the insured 
                      credit union (other than trade secrets) under 
                      section 552(b)(8) of title 5, United States Code.
                    ``(B) Rule of construction.--Subparagraph (A) may 
                not be construed as requiring the agency to disclose the 
                name of any customer of the insured credit union (other 
                than an institution-affiliated party), or information 
                from which the identity of such customer could 
                reasonably be ascertained.

[[Page 124 STAT. 1939]]

            ``(4) Losses that are not material.--
                    ``(A) Semiannual report.-- <<NOTE: Time 
                periods.>> For the 6-month period ending on March 31, 
                2010, and each 6-month period thereafter, the Inspector 
                General of the Board shall--
                          ``(i) identify any losses that the Inspector 
                      General estimates were incurred by the Fund during 
                      such 6-month period, with respect to insured 
                      credit unions;
                          ``(ii) <<NOTE: Determination.>>  for each loss 
                      to the Fund that is not a material loss, 
                      determine--
                                    ``(I) the grounds identified by the 
                                Board or the State official having 
                                jurisdiction over a State credit union 
                                for appointing the Board as the 
                                liquidating agent for any Federal or 
                                State credit union; and
                                    ``(II) whether any unusual 
                                circumstances exist that might warrant 
                                an in-depth review of the loss; and
                          ``(iii) prepare and submit a written report to 
                      the Board and to Congress on the results of the 
                      determinations of the Inspector General that 
                      includes--
                                    ``(I) an identification of any loss 
                                that warrants an in-depth review, and 
                                the reasons such review is warranted, or 
                                if the Inspector General determines that 
                                no review is warranted, an explanation 
                                of such determination; and
                                    ``(II) for each loss identified in 
                                subclause (I) that warrants an in-depth 
                                review, the date by which such review, 
                                and a report on the review prepared in a 
                                manner consistent with reports under 
                                paragraph (1)(A), will be completed.
                    ``(B) Deadline for semiannual report.--The Inspector 
                General of the Board shall--
                          ``(i) submit each report required under 
                      subparagraph (A) expeditiously, and not later than 
                      90 days after the end of the 6-month period 
                      covered by the report; and
                          ``(ii) provide a copy of the report required 
                      under subparagraph (A) to any Member of Congress, 
                      upon request.
            ``(5) GAO review.--The Comptroller General of the United 
        States shall, under such conditions as the Comptroller General 
        determines to be appropriate--
                    ``(A) review each report made under paragraph (1), 
                including the extent to which the Inspector General of 
                the Board complied with the requirements under section 
                8L of the Inspector General Act of 1978 (5 U.S.C. App.) 
                with respect to each such report; and
                    ``(B) <<NOTE: Recommenda- tions.>>  recommend 
                improvements to the supervision of insured credit unions 
                (including improvements relating to the implementation 
                of this section).''.
SEC. 989. GOVERNMENT ACCOUNTABILITY OFFICE STUDY ON PROPRIETARY 
                        TRADING.

    (a) Definitions.--In this section--
            (1) the term ``covered entity'' means--
                    (A) an insured depository institution, an affiliate 
                of an insured depository institution, a bank holding 
                company,

[[Page 124 STAT. 1940]]

                a financial holding company, or a subsidiary of a bank 
                holding company or a financial holding company, as those 
                terms are defined in the Bank Holding Company Act of 
                1956 (12 U.S.C. 1841 et seq.); and
                    (B) any other entity, as the Comptroller General of 
                the United States may determine; and
            (2) the term ``proprietary trading'' means the act of a 
        covered entity investing as a principal in securities, 
        commodities, derivatives, hedge funds, private equity firms, or 
        such other financial products or entities as the Comptroller 
        General may determine.

    (b) Study.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study regarding the risks and conflicts 
        associated with proprietary trading by and within covered 
        entities, including an evaluation of--
                    (A) whether proprietary trading presents a material 
                systemic risk to the stability of the United States 
                financial system, and if so, the costs and benefits of 
                options for mitigating such systemic risk;
                    (B) whether proprietary trading presents material 
                risks to the safety and soundness of the covered 
                entities that engage in such activities, and if so, the 
                costs and benefits of options for mitigating such risks;
                    (C) whether proprietary trading presents material 
                conflicts of interest between covered entities that 
                engage in proprietary trading and the clients of the 
                institutions who use the firm to execute trades or who 
                rely on the firm to manage assets, and if so, the costs 
                and benefits of options for mitigating such conflicts of 
                interest;
                    (D) whether adequate disclosure regarding the risks 
                and conflicts of proprietary trading is provided to the 
                depositors, trading and asset management clients, and 
                investors of covered entities that engage in proprietary 
                trading, and if not, the costs and benefits of options 
                for the improvement of such disclosure; and
                    (E) whether the banking, securities, and commodities 
                regulators of institutions that engage in proprietary 
                trading have in place adequate systems and controls to 
                monitor and contain any risks and conflicts of interest 
                related to proprietary trading, and if not, the costs 
                and benefits of options for the improvement of such 
                systems and controls.
            (2) Considerations.--In carrying out the study required 
        under paragraph (1), the Comptroller General shall consider--
                    (A) current practice relating to proprietary 
                trading;
                    (B) the advisability of a complete ban on 
                proprietary trading;
                    (C) limitations on the scope of activities that 
                covered entities may engage in with respect to 
                proprietary trading;
                    (D) the advisability of additional capital 
                requirements for covered entities that engage in 
                proprietary trading;
                    (E) enhanced restrictions on transactions between 
                affiliates related to proprietary trading;
                    (F) enhanced accounting disclosures relating to 
                proprietary trading;
                    (G) enhanced public disclosure relating to 
                proprietary trading; and

[[Page 124 STAT. 1941]]

                    (H) any other options the Comptroller General deems 
                appropriate.

    (c) Report to Congress.--Not later than 15 months after the date of 
enactment of this Act, the Comptroller General shall submit a report to 
Congress on the results of the study conducted under subsection (b).
    (d) Access by Comptroller General.--For purposes of conducting the 
study required under subsection (b), the Comptroller General shall have 
access, upon request, to any information, data, schedules, books, 
accounts, financial records, reports, files, electronic communications, 
or other papers, things, or property belonging to or in use by a covered 
entity that engages in proprietary trading, and to the officers, 
directors, employees, independent public accountants, financial 
advisors, staff, and agents and representatives of a covered entity (as 
related to the activities of the agent or representative on behalf of 
the covered entity), at such reasonable times as the Comptroller General 
may request. The Comptroller General may make and retain copies of 
books, records, accounts, and other records, as the Comptroller General 
deems appropriate.
    (e) Confidentiality of Reports.--
            (1) In general.--Except as provided in paragraph (2), the 
        Comptroller General may not disclose information regarding--
                    (A) any proprietary trading activity of a covered 
                entity, unless such information is disclosed at a level 
                of generality that does not reveal the investment or 
                trading position or strategy of the covered entity for 
                any specific security, commodity, derivative, or other 
                investment or financial product; or
                    (B) any individual interviewed by the Comptroller 
                General for purposes of the study under subsection (b), 
                unless such information is disclosed at a level of 
                generality that does not reveal--
                          (i) the name of or identifying details 
                      relating to such individual; or
                          (ii) in the case of an individual who is an 
                      employee of a third party that provides 
                      professional services to a covered entity believed 
                      to be engaged in proprietary trading, the name of 
                      or any identifying details relating to such third 
                      party.
            (2) Exceptions.--The Comptroller General may disclose the 
        information described in paragraph (1)--
                    (A) to a department, agency, or official of the 
                Federal Government, for official use, upon request;
                    (B) to a committee of Congress, upon request; and
                    (C) to a court, upon an order of such court.
SEC. 989A. <<NOTE: 12 USC 5537.>>  SENIOR INVESTOR PROTECTIONS.

    (a) Definitions.--As used in this section--
            (1) the term ``eligible entity'' means--
                    (A) a securities commission (or any agency or office 
                performing like functions) of a State that the Office 
                determines has adopted rules on the appropriate use of 
                designations in the offer or sale of securities or the 
                provision of investment advice that meet or exceed the 
                minimum requirements of the NASAA Model Rule on the Use 
                of

[[Page 124 STAT. 1942]]

                Senior-Specific Certifications and Professional 
                Designations (or any successor thereto);
                    (B) the insurance commission (or any agency or 
                office performing like functions) of any State that the 
                Office determines has--
                          (i) adopted rules on the appropriate use of 
                      designations in the sale of insurance products 
                      that, to the extent practicable, conform to the 
                      minimum requirements of the National Association 
                      of Insurance Commissioners Model Regulation on the 
                      Use of Senior-Specific Certifications and 
                      Professional Designations in the Sale of Life 
                      Insurance and Annuities (or any successor 
                      thereto); and
                          (ii) adopted rules with respect to fiduciary 
                      or suitability requirements in the sale of 
                      annuities that meet or exceed the minimum 
                      requirements established by the Suitability in 
                      Annuity Transactions Model Regulation of the 
                      National Association of Insurance Commissioners 
                      (or any successor thereto); or
                    (C) a consumer protection agency of any State, if--
                          (i) the securities commission (or any agency 
                      or office performing like functions) of the State 
                      is eligible under subparagraph (A); or
                          (ii) the insurance commission (or any agency 
                      or office performing like functions) of the State 
                      is eligible under subparagraph (B);
            (2) the term ``financial product'' means a security, an 
        insurance product (including an insurance product that pays a 
        return, whether fixed or variable), a bank product, and a loan 
        product;
            (3) the term ``misleading designation''--
                    (A) means a certification, professional designation, 
                or other purported credential that indicates or implies 
                that a salesperson or adviser has special certification 
                or training in advising or servicing seniors; and
                    (B) does not include a certification, professional 
                designation, license, or other credential that--
                          (i) was issued by or obtained from an academic 
                      institution having regional accreditation;
                          (ii) meets the standards for certifications 
                      and professional designations outlined by the 
                      NASAA Model Rule on the Use of Senior-Specific 
                      Certifications and Professional Designations (or 
                      any successor thereto) or by the Model Regulations 
                      on the Use of Senior-Specific Certifications and 
                      Professional Designations in the Sale of Life 
                      Insurance and Annuities, adopted by the National 
                      Association of Insurance Commissioners (or any 
                      successor thereto); or
                          (iii) was issued by or obtained from a State;
            (4) the term ``misleading or fraudulent marketing'' means 
        the use of a misleading designation by a person that sells to or 
        advises a senior in connection with the sale of a financial 
        product;
            (5) the term ``NASAA'' means the North American Securities 
        Administrators Association;
            (6) the term ``Office'' means the Office of Financial 
        Literacy of the Bureau;

[[Page 124 STAT. 1943]]

            (7) the term ``senior'' means any individual who has 
        attained the age of 62 years or older; and
            (8) the term ``State'' has the same meaning as in section 3 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).

    (b) Grants to States for Enhanced Protection of Seniors From Being 
Misled by False Designations.--The Office shall establish a program 
under which the Office may make grants to States or eligible entities--
            (1) to hire staff to identify, investigate, and prosecute 
        (through civil, administrative, or criminal enforcement actions) 
        cases involving misleading or fraudulent marketing;
            (2) to fund technology, equipment, and training for 
        regulators, prosecutors, and law enforcement officers, in order 
        to identify salespersons and advisers who target seniors through 
        the use of misleading designations;
            (3) to fund technology, equipment, and training for 
        prosecutors to increase the successful prosecution of 
        salespersons and advisers who target seniors with the use of 
        misleading designations;
            (4) to provide educational materials and training to 
        regulators on the appropriateness of the use of designations by 
        salespersons and advisers in connection with the sale and 
        marketing of financial products;
            (5) to provide educational materials and training to seniors 
        to increase awareness and understanding of misleading or 
        fraudulent marketing;
            (6) to develop comprehensive plans to combat misleading or 
        fraudulent marketing of financial products to seniors; and
            (7) to enhance provisions of State law to provide protection 
        for seniors against misleading or fraudulent marketing.

    (c) Applications.--A State or eligible entity desiring a grant under 
this section shall submit an application to the Office, in such form and 
in such a manner as the Office may determine, that includes--
            (1) a proposal for activities to protect seniors from 
        misleading or fraudulent marketing that are proposed to be 
        funded using a grant under this section, including--
                    (A) an identification of the scope of the problem of 
                misleading or fraudulent marketing in the State;
                    (B) a description of how the proposed activities 
                would--
                          (i) protect seniors from misleading or 
                      fraudulent marketing in the sale of financial 
                      products, including by proactively identifying 
                      victims of misleading and fraudulent marketing who 
                      are seniors;
                          (ii) assist in the investigation and 
                      prosecution of those using misleading or 
                      fraudulent marketing; and
                          (iii) discourage and reduce cases of 
                      misleading or fraudulent marketing; and
                    (C) a description of how the proposed activities 
                would be coordinated with other State efforts; and
            (2) any other information, as the Office determines is 
        appropriate.

    (d) Performance Objectives and Reporting Requirements.--The Office 
may establish such performance objectives and reporting requirements for 
States and eligible entities receiving a grant under this section as the 
Office determines are necessary

[[Page 124 STAT. 1944]]

to carry out and assess the effectiveness of the program under this 
section.
    (e) Maximum Amount.--The amount of a grant under this section may 
not exceed--
            (1) $500,000 for each of 3 consecutive fiscal years, if the 
        recipient is a State, or an eligible entity of a State, that has 
        adopted rules--
                    (A) on the appropriate use of designations in the 
                offer or sale of securities or investment advice that 
                meet or exceed the minimum requirements of the NASAA 
                Model Rule on the Use of Senior-Specific Certifications 
                and Professional Designations (or any successor 
                thereto);
                    (B) on the appropriate use of designations in the 
                sale of insurance products that, to the extent 
                practicable, conform to the minimum requirements of the 
                National Association of Insurance Commissioners Model 
                Regulation on the Use of Senior-Specific Certifications 
                and Professional Designations in the Sale of Life 
                Insurance and Annuities (or any successor thereto); and
                    (C) with respect to fiduciary or suitability 
                requirements in the sale of annuities that meet or 
                exceed the minimum requirements established by the 
                Suitability in Annuity Transactions Model Regulation of 
                the National Association of Insurance Commissioners (or 
                any successor thereto); and
            (2) $100,000 for each of 3 consecutive fiscal years, if the 
        recipient is a State, or an eligible entity of a State, that has 
        adopted--
                    (A) rules on the appropriate use of designations in 
                the offer or sale of securities or investment advice 
                that meet or exceed the minimum requirements of the 
                NASAA Model Rule on the Use of Senior-Specific 
                Certifications and Professional Designations (or any 
                successor thereto); or
                    (B) rules--
                          (i) on the appropriate use of designations in 
                      the sale of insurance products that, to the extent 
                      practicable, conform to the minimum requirements 
                      of the National Association of Insurance 
                      Commissioners Model Regulation on the Use of 
                      Senior-Specific Certifications and Professional 
                      Designations in the Sale of Life Insurance and 
                      Annuities (or any successor thereto); and
                          (ii) with respect to fiduciary or suitability 
                      requirements in the sale of annuities that meet or 
                      exceed the minimum requirements established by the 
                      Suitability in Annuity Transactions Model 
                      Regulation of the National Association of 
                      Insurance Commissioners (or any successor 
                      thereto).

    (f) Subgrants.--A State or eligible entity that receives a grant 
under this section may make a subgrant, as the State or eligible entity 
determines is necessary to carry out the activities funded using a grant 
under this section.
    (g) Reapplication.--A State or eligible entity that receives a grant 
under this section may reapply for a grant under this section, 
notwithstanding the limitations on grant amounts under subsection (e).

[[Page 124 STAT. 1945]]

    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section, $8,000,000 for each of fiscal 
years 2011 through 2015.
SEC. 989B. DESIGNATED FEDERAL ENTITY INSPECTORS GENERAL 
                          INDEPENDENCE.

    Section 8G of the Inspector General Act of 1978 (5 U.S.C. App.) is 
amended--
            (1) in subsection (a)(4)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``the board or commission of the designated 
                Federal entity, or in the event the designated Federal 
                entity does not have a board or commission,'' after 
                ``means'';
                    (B) in subparagraph (A), by striking ``and'' after 
                the semicolon; and
                    (C) by adding after subparagraph (B) the following:
                    ``(C) with respect to the Federal Labor Relations 
                Authority, such term means the members of the Authority 
                (described under section 7104 of title 5, United States 
                Code);
                    ``(D) with respect to the National Archives and 
                Records Administration, such term means the Archivist of 
                the United States;
                    ``(E) with respect to the National Credit Union 
                Administration, such term means the National Credit 
                Union Administration Board (described under section 102 
                of the Federal Credit Union Act (12 U.S.C. 1752a);
                    ``(F) with respect to the National Endowment of the 
                Arts, such term means the National Council on the Arts;
                    ``(G) with respect to the National Endowment for the 
                Humanities, such term means the National Council on the 
                Humanities; and
                    ``(H) with respect to the Peace Corps, such term 
                means the Director of the Peace Corps;''; and
            (2) in subsection (h), by inserting ``if the designated 
        Federal entity is not a board or commission, include'' after 
        ``designated Federal entities and''.
SEC. 989C. STRENGTHENING INSPECTOR GENERAL ACCOUNTABILITY.

    Section 5(a) of the Inspector General Act of 1978 (5 U.S.C. App.) is 
amended--
            (1) in paragraph (12), by striking ``and'' after the 
        semicolon;
            (2) in paragraph (13), by striking the period and inserting 
        a semicolon; and
            (3) by adding at the end the following:
            ``(14)(A) an appendix containing the results of any peer 
        review conducted by another Office of Inspector General during 
        the reporting period; or
            ``(B) if no peer review was conducted within that reporting 
        period, a statement identifying the date of the last peer review 
        conducted by another Office of Inspector General;
            ``(15) a list of any outstanding recommendations from any 
        peer review conducted by another Office of Inspector General 
        that have not been fully implemented, including a statement 
        describing the status of the implementation and why 
        implementation is not complete; and
            ``(16) a list of any peer reviews conducted by the Inspector 
        General of another Office of the Inspector General during the

[[Page 124 STAT. 1946]]

        reporting period, including a list of any outstanding 
        recommendations made from any previous peer review (including 
        any peer review conducted before the reporting period) that 
        remain outstanding or have not been fully implemented.''.
SEC. 989D. REMOVAL OF INSPECTORS GENERAL OF DESIGNATED FEDERAL 
                          ENTITIES.

    Section 8G(e) of the Inspector General Act of 1978 (5 U.S.C. App.) 
is amended--
            (1) by redesignating the sentences following ``(e)'' as 
        paragraph (2); and
            (2) by striking ``(e)'' and inserting the following:

    ``(e)(1) In the case of a designated Federal entity for which a 
board or commission is the head of the designated Federal entity, a 
removal under this subsection may only be made upon the written 
concurrence of a \2/3\ majority of the board or commission.''.
SEC. 989E. <<NOTE: 5 USC app. 11 note.>> ADDITIONAL OVERSIGHT OF 
                          FINANCIAL REGULATORY SYSTEM.

    (a) Council of Inspectors General on Financial Oversight.--
            (1) Establishment and membership.--There is established a 
        Council of Inspectors General on Financial Oversight (in this 
        section referred to as the ``Council of Inspectors General'') 
        chaired by the Inspector General of the Department of the 
        Treasury and composed of the inspectors general of the 
        following:
                    (A) The Board of Governors of the Federal Reserve 
                System.
                    (B) The Commodity Futures Trading Commission.
                    (C) The Department of Housing and Urban Development.
                    (D) The Department of the Treasury.
                    (E) The Federal Deposit Insurance Corporation.
                    (F) The Federal Housing Finance Agency.
                    (G) The National Credit Union Administration.
                    (H) The Securities and Exchange Commission.
                    (I) The Troubled Asset Relief Program (until the 
                termination of the authority of the Special Inspector 
                General for such program under section 121(k) of the 
                Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
                5231(k))).
            (2) Duties.--
                    (A) Meetings.--The Council of Inspectors General 
                shall meet not less than once each quarter, or more 
                frequently if the chair considers it appropriate, to 
                facilitate the sharing of information among inspectors 
                general and to discuss the ongoing work of each 
                inspector general who is a member of the Council of 
                Inspectors General, with a focus on concerns that may 
                apply to the broader financial sector and ways to 
                improve financial oversight.
                    (B) Annual report.--Each year the Council of 
                Inspectors General shall submit to the Council and to 
                Congress a report including--
                          (i) for each inspector general who is a member 
                      of the Council of Inspectors General, a section 
                      within the exclusive editorial control of such 
                      inspector general that highlights the concerns and 
                      recommendations of such inspector general in such 
                      inspector general's

[[Page 124 STAT. 1947]]

                      ongoing and completed work, with a focus on issues 
                      that may apply to the broader financial sector; 
                      and
                          (ii) a summary of the general observations of 
                      the Council of Inspectors General based on the 
                      views expressed by each inspector general as 
                      required by clause (i), with a focus on measures 
                      that should be taken to improve financial 
                      oversight.
            (3) Working groups to evaluate council.--
                    (A) Convening a working group.--The Council of 
                Inspectors General may, by majority vote, convene a 
                Council of Inspectors General Working Group to evaluate 
                the effectiveness and internal operations of the 
                Council.
                    (B) Personnel and resources.--The inspectors general 
                who are members of the Council of Inspectors General may 
                detail staff and resources to a Council of Inspectors 
                General Working Group established under this paragraph 
                to enable it to carry out its duties.
                    (C) Reports.--A Council of Inspectors General 
                Working Group established under this paragraph shall 
                submit regular reports to the Council and to Congress on 
                its evaluations pursuant to this paragraph.

    (b) Response to Report by Council.--The Council shall respond to the 
concerns raised in the report of the Council of Inspectors General under 
subsection (a)(2)(B) for such year.
SEC. 989F. GAO STUDY OF PERSON TO PERSON LENDING.

    (a) Study.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study of person to person lending to 
        determine the optimal Federal regulatory structure.
            (2) Consultation.--In conducting the study required under 
        paragraph (1), the Comptroller General shall consult with 
        Federal banking agencies, the Commission, consumer groups, 
        outside experts, and the person to person lending industry.
            (3) Content of study.--The study required under paragraph 
        (1) shall include an examination of--
                    (A) the regulatory structure as it exists on the 
                date of enactment of this Act, as determined by the 
                Commission, with particular attention to--
                          (i) the application of the Securities Act of 
                      1933 to person to person lending platforms;
                          (ii) the posting of consumer loan information 
                      on the EDGAR database of the Commission; and
                          (iii) the treatment of privately held person 
                      to person lending platforms as public companies;
                    (B) the State and other Federal regulators 
                responsible for the oversight and regulation of person 
                to person lending markets;
                    (C) any Federal, State, or local government or 
                private studies of person to person lending completed or 
                in progress on the date of enactment of this Act;
                    (D) consumer privacy and data protections, minimum 
                credit standards, anti-money laundering and risk 
                management in the regulatory structure as it exists on 
                the date of enactment of this Act, and whether 
                additional or alternative safeguards are needed; and

[[Page 124 STAT. 1948]]

                    (E) the uses of person to person lending.

    (b) Report.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Comptroller General shall submit a 
        report on the study required under subsection (a) to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives.
            (2) Content of report.--The report required under paragraph 
        (1) shall include alternative regulatory options, including--
                    (A) the involvement of other Federal agencies; and
                    (B) alternative approaches by the Commission and 
                recommendations on whether the alternative approaches 
                are effective.
SEC. 989G. EXEMPTION FOR NONACCELERATED FILERS.

    (a) Exemption.--Section 404 <<NOTE: 15 USC 7262.>> of the Sarbanes-
Oxley Act of 2002 is amended by adding at the end the following:

    ``(c) Exemption for Smaller Issuers.--Subsection (b) shall not apply 
with respect to any audit report prepared for an issuer that is neither 
a `large accelerated filer' nor an `accelerated filer' as those terms 
are defined in Rule 12b-2 of the Commission (17 C.F.R. 240.12b-2).''.
    (b) Study.--The Securities and Exchange Commission shall conduct a 
study to determine how the Commission could reduce the burden of 
complying with section 404(b) of the Sarbanes-Oxley Act of 2002 for 
companies whose market capitalization is between $75,000,000 and 
$250,000,000 for the relevant reporting period while maintaining 
investor protections for such companies. The study shall also consider 
whether any such methods of reducing the compliance burden or a complete 
exemption for such companies from compliance with such section would 
encourage companies to list on exchanges in the United States in their 
initial public offerings. <<NOTE: Deadline. Reports.>>  Not later than 9 
months after the date of the enactment of this subtitle, the Commission 
shall transmit a report of such study to Congress.
SEC. 989H. <<NOTE: 5 USC app. 5 note.>> CORRECTIVE RESPONSES BY 
                          HEADS OF CERTAIN ESTABLISHMENTS TO 
                          DEFICIENCIES IDENTIFIED BY INSPECTORS 
                          GENERAL.

    The Chairman of the Board of Governors of the Federal Reserve 
System, the Chairman of the Commodity Futures Trading Commission, the 
Chairman of the National Credit Union Administration, the Director of 
the Pension Benefit Guaranty Corporation, and the Chairman of the 
Securities and Exchange Commission shall each--
            (1) take action to address deficiencies identified by a 
        report or investigation of the Inspector General of the 
        establishment concerned; or
            (2) <<NOTE: Certification.>>  certify to both Houses of 
        Congress that no action is necessary or appropriate in 
        connection with a deficiency described in paragraph (1).
SEC. 989I. GAO STUDY REGARDING EXEMPTION FOR SMALLER ISSUERS.

    (a) Study Regarding Exemption for Smaller Issuers.--The Comptroller 
General of the United States shall carry out a study

[[Page 124 STAT. 1949]]

on the impact of the amendments made by this Act to section 404(b) of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)), which shall include 
an analysis of--
            (1) whether issuers that are exempt from such section 404(b) 
        have fewer or more restatements of published accounting 
        statements than issuers that are required to comply with such 
        section 404(b);
            (2) the cost of capital for issuers that are exempt from 
        such section 404(b) compared to the cost of capital for issuers 
        that are required to comply with such section 404(b);
            (3) whether there is any difference in the confidence of 
        investors in the integrity of financial statements of issuers 
        that comply with such section 404(b) and issuers that are exempt 
        from compliance with such section 404(b);
            (4) whether issuers that do not receive the attestation for 
        internal controls required under such section 404(b) should be 
        required to disclose the lack of such attestation to investors; 
        and
            (5) the costs and benefits to issuers that are exempt from 
        such section 404(b) that voluntarily have obtained the 
        attestation of an independent auditor.

    (b) Report.--Not later than 3 years after the date of enactment of 
this Act, the Comptroller General shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives a report on the 
results of the study required under subsection (a).
SEC. 989J. <<NOTE: 15 USC 77c note.>> FURTHER PROMOTING THE 
                          ADOPTION OF THE NAIC MODEL REGULATIONS 
                          THAT ENHANCE PROTECTION OF SENIORS AND 
                          OTHER CONSUMERS.

    (a) In General.--The Commission shall treat as exempt securities 
described under section 3(a)(8) of the Securities Act of 1933 (15 U.S.C. 
77c(a)(8)) any insurance or endowment policy or annuity contract or 
optional annuity contract--
            (1) the value of which does not vary according to the 
        performance of a separate account;
            (2) that--
                    (A) satisfies standard nonforfeiture laws or similar 
                requirements of the applicable State at the time of 
                issue; or
                    (B) in the absence of applicable standard 
                nonforfeiture laws or requirements, satisfies the Model 
                Standard Nonforfeiture Law for Life Insurance or Model 
                Standard Nonforfeiture Law for Individual Deferred 
                Annuities, or any successor model law, as published by 
                the National Association of Insurance Commissioners; and
            (3) that is issued--
                    (A) on and after June 16, 2013, in a State, or 
                issued by an insurance company that is domiciled in a 
                State, that--
                          (i) adopts rules that govern suitability 
                      requirements in the sale of an insurance or 
                      endowment policy or annuity contract or optional 
                      annuity contract, which shall substantially meet 
                      or exceed the minimum requirements established by 
                      the Suitability in Annuity Transactions Model 
                      Regulation adopted by the

[[Page 124 STAT. 1950]]

                      National Association of Insurance Commissioners in 
                      March 2010; and
                          (ii) <<NOTE: Deadline.>>  adopts rules that 
                      substantially meet or exceed the minimum 
                      requirements of any successor modifications to the 
                      model regulations described in subparagraph (A) 
                      within 5 years of the adoption by the Association 
                      of any further successors thereto; or
                    (B) by an insurance company that adopts and 
                implements practices on a nationwide basis for the sale 
                of any insurance or endowment policy or annuity contract 
                or optional annuity contract that meet or exceed the 
                minimum requirements established by the National 
                Association of Insurance Commissioners Suitability in 
                Annuity Transactions Model Regulation (Model 275), and 
                any successor thereto, and is therefore subject to 
                examination by the State of domicile of the insurance 
                company, or by any other State where the insurance 
                company conducts sales of such products, for the purpose 
                of monitoring compliance under this section.

    (b) Rule of Construction.--Nothing in this section shall be 
construed to affect whether any insurance or endowment policy or annuity 
contract or optional annuity contract that is not described in this 
section is or is not an exempt security under section 3(a)(8) of the 
Securities Act of 1933 (15 U.S.C. 77c(a)(8)).

      Subtitle J--Securities and Exchange Commission Match Funding

SEC. 991. SECURITIES AND EXCHANGE COMMISSION MATCH FUNDING.

    (a) Match Funding Authority.--
            (1) Amendments.--Section 31 of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78ee) is amended--
                    (A) by striking subsection (a) and inserting the 
                following:

    ``(a) Recovery of Costs of Annual Appropriation.-- 
<<NOTE: Fees. Assessments.>> The Commission shall, in accordance with 
this section, collect transaction fees and assessments that are designed 
to recover the costs to the Government of the annual appropriation to 
the Commission by Congress.'';
                    (B) in subsection (e)(2), by striking ``September 
                30'' and inserting ``September 25'';
                    (C) in subsection (g), by striking ``April 30 of the 
                fiscal year preceding the fiscal year to which such rate 
                applies'' and inserting ``30 days after the date on 
                which an Act making a regular appropriation to the 
                Commission for such fiscal year is enacted'';
                    (D) by striking subsection (j) and inserting the 
                following:

    ``(j) Adjustments to Fee Rates.--
            ``(1) Annual adjustment.--Subject to subsections (i)(1)(B) 
        and (k), for each fiscal year, the Commission shall by order 
        adjust each of the rates applicable under subsections (b) and 
        (c) for such fiscal year to a uniform adjusted rate that, when 
        applied to the baseline estimate of the aggregate dollar amount 
        of sales for such fiscal year, is reasonably likely to produce

[[Page 124 STAT. 1951]]

        aggregate fee collections under this section (including 
        assessments collected under subsection (d) of this section) that 
        are equal to the regular appropriation to the Commission by 
        Congress for such fiscal year.
            ``(2) Mid-year adjustment.-- 
        <<NOTE: Determination. Deadline.>> Subject to subsections 
        (i)(1)(B) and (k), for each fiscal year, the Commission shall 
        determine, by March 1 of such fiscal year, whether, based on the 
        actual aggregate dollar volume of sales during the first 5 
        months of such fiscal year, the baseline estimate of the 
        aggregate dollar volume of sales used under paragraph (1) for 
        such fiscal year is reasonably likely to be 10 percent (or more) 
        greater or less than the actual aggregate dollar volume of sales 
        for such fiscal year. <<NOTE: Order. Deadline.>>  If the 
        Commission so determines, the Commission shall by order, no 
        later than March 1, adjust each of the rates applicable under 
        subsections (b) and (c) for such fiscal year to a uniform 
        adjusted rate that, when applied to the revised estimate of the 
        aggregate dollar amount of sales for the remainder of such 
        fiscal year, is reasonably likely to produce aggregate fee 
        collections under this section (including fees collected during 
        such five-month period and assessments collected under 
        subsection (d) of this section) that are equal to the regular 
        appropriation to the Commission by Congress for such fiscal 
        year. In making such revised estimate, the Commission shall, 
        after consultation with the Congressional Budget Office and the 
        Office of Management and Budget, use the same methodology 
        required by subsection (l).
            ``(3) Review.--In exercising its authority under this 
        subsection, the Commission shall not be required to comply with 
        the provisions of section 553 of title 5, United States Code. An 
        adjusted rate prescribed under paragraph (1) or (2) and 
        published under subsection (g) shall not be subject to judicial 
        review.
            ``(4) Effective date.--
                    ``(A) Annual adjustment.--Subject to subsections 
                (i)(1)(B) and (k), an adjusted rate prescribed under 
                paragraph (1) shall take effect on the later of--
                          ``(i) the first day of the fiscal year to 
                      which such rate applies; or
                          ``(ii) 60 days after the date on which an Act 
                      making a regular appropriation to the Commission 
                      for such fiscal year is enacted.
                    ``(B) Mid-year adjustment.--An adjusted rate 
                prescribed under paragraph (2) shall take effect on 
                April 1 of the fiscal year to which such rate 
                applies.'';
                    (E) in subsection (k), by striking ``30 days'' and 
                inserting ``60 days''; and
                    (F) in subsection (l), by striking ``Definitions.--
                '' and all that follows through ``sales.--The baseline'' 
                and inserting ``Baseline Estimate of the Aggregate 
                Dollar Amount of Sales.--The baseline''.
            (2) <<NOTE: 15 USC 78ee.>>  Effective date.--The amendments 
        made by this subsection shall take effect on the later of--
                    (A) October 1, 2011; or
                    (B) the date of enactment of an Act making a regular 
                appropriation to the Commission for fiscal year 2012.

    (b) Amendments to Registration Fee Provisions.--

[[Page 124 STAT. 1952]]

            (1) Section 6(b) of the securities act of 1933.--Section 
        6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) is 
        amended--
                    (A) by striking ``offsetting'' each place that term 
                appears and inserting ``fee'';
                    (B) by striking paragraphs (1), (3), (4), (6), (8), 
                and (9);
                    (C) by redesignating paragraph (2) as paragraph (1);
                    (D) by redesignating paragraph (5) as paragraph (2);
                    (E) by redesignating paragraph (7) as paragraph (3);
                    (F) by redesignating paragraph (10) as paragraph 
                (5);
                    (G) by redesignating paragraph (11) as paragraph 
                (6);
                    (H) in paragraph (1), as so redesignated, by 
                striking ``paragraph (5) or (6).'' and inserting 
                ``paragraph (2).'';
                    (I) in paragraph (2), as so redesignated--
                          (i) by striking ``of the fiscal years 2003 
                      through 2011'' and inserting ``fiscal year''; and
                          (ii) by striking ``paragraph (2)'' and 
                      inserting ``paragraph (1)'';
                    (J) by inserting after paragraph (3), as so 
                redesignated, the following:
            ``(4) Review and effective date.--In exercising its 
        authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5, United States Code. An adjusted rate prescribed under 
        paragraph (2) and published under paragraph (5) shall not be 
        subject to judicial review. An adjusted rate prescribed under 
        paragraph (2) shall take effect on the first day of the fiscal 
        year to which such rate applies.'';
                    (K) in paragraph (5), as redesignated, by striking 
                ``April 30'' and inserting ``August 31'';
                    (L) in paragraph (6), as so redesignated--
                          (i) by striking ``of the fiscal years 2002 
                      through 2011'' and inserting ``fiscal year''; and
                          (ii) by inserting at the end of the table in 
                      subparagraph (A) the following:

    ``2012................$425,000,000
    2013..................$455,000,000
    2014..................$485,000,000
    2015..................$515,000,000
    2016..................$550,000,000
    2017..................$585,000,000
    2018..................$620,000,000
    2019..................$660,000,000
    2020..................$705,000,000
    2021 and each fiscal yAn amount that is equal to the target fee 
        thereafter.           collection amount for the prior fiscal 
                              year, adjusted by the rate of 
                              inflation.''.

            (2) Section 13(e) of the securities exchange act of 1934.--
        Section 13(e) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78m(e)) is amended--
                    (A) in paragraph (3), by striking ``paragraphs (5) 
                and (6)'' and inserting ``paragraph (4)'';
                    (B) by striking paragraphs (4), (5), and (6);
                    (C) by inserting after paragraph (3) the following:

[[Page 124 STAT. 1953]]

            ``(4) Annual adjustment.--For each fiscal year, the 
        Commission shall by order adjust the rate required by paragraph 
        (3) for such fiscal year to a rate that is equal to the rate 
        (expressed in dollars per million) that is applicable under 
        section 6(b) of the Securities Act of 1933 for such fiscal year.
            ``(5) Fee collections.--Fees collected pursuant to this 
        subsection for fiscal year 2012 and each fiscal year thereafter 
        shall be deposited and credited as general revenue of the 
        Treasury and shall not be available for obligation.
            ``(6) Effective date; publication.--In exercising its 
        authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5, United States Code. An adjusted rate prescribed under 
        paragraph (4) shall be published and take effect in accordance 
        with section 6(b) of the Securities Act of 1933 (15 U.S.C. 
        77f(b)).''; and
                    (D) by striking paragraphs (8), (9), and (10).
            (3) Section 14(g) of the securities exchange act of 1934.--
        Section 14(g) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78n(g)) is amended--
                    (A) in paragraph (1), by striking ``paragraphs (5) 
                and (6)'' each time that term appears and inserting 
                ``paragraph (4)'';
                    (B) in paragraph (3), by striking ``paragraphs (5) 
                and (6)'' and inserting ``paragraph (4)'';
                    (C) by striking paragraphs (4), (5), and (6);
                    (D) by inserting after paragraph (3) the following:
            ``(4) <<NOTE: Order.>>  Annual adjustment.--For each fiscal 
        year, the Commission shall by order adjust the rate required by 
        paragraphs (1) and (3) for such fiscal year to a rate that is 
        equal to the rate (expressed in dollars per million) that is 
        applicable under section 6(b) of the Securities Act of 1933 (15 
        U.S.C. 77f(b)) for such fiscal year.
            ``(5) Fee collection.--Fees collected pursuant to this 
        subsection for fiscal year 2012 and each fiscal year thereafter 
        shall be deposited and credited as general revenue of the 
        Treasury and shall not be available for obligation.
            ``(6) Review; effective date; publication.--In exercising 
        its authority under this subsection, the Commission shall not be 
        required to comply with the provisions of section 553 of title 
        5, United States Code. An adjusted rate prescribed under 
        paragraph (4) shall be published and take effect in accordance 
        with section 6(b) of the Securities Act of 1933 (15 U.S.C. 
        77f(b)).'';
                    (E) by striking paragraphs (8), (9), and (10); and
                    (F) by redesignating paragraph (11) as paragraph 
                (8).
            (4) Effective date.-- <<NOTE: Publication. 15 USC 77f 
        note.>> The amendments made by this subsection shall take effect 
        on October 1, 2011, except that for fiscal year 2012, the 
        Commission shall publish the rate established under section 6(b) 
        of the Securities Act of 1933 (15 U.S.C. 77f(b)), as amended by 
        this Act, on August 31, 2011.

    (c) Authorization of Appropriations.--Section 35 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78kk) is amended to read as follows:

[[Page 124 STAT. 1954]]

``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

    ``In addition to any other funds authorized to be appropriated to 
the Commission, there are authorized to be appropriated to carry out the 
functions, powers, and duties of the Commission--
            ``(1) for fiscal year 2011, $1,300,000,000;
            ``(2) for fiscal year 2012, $1,500,000,000;
            ``(3) for fiscal year 2013, $1,750,000,000;
            ``(4) for fiscal year 2014, $2,000,000,000; and
            ``(5) for fiscal year 2015, $2,250,000,000.''.

    (d) Transmittal of Budget Requests.--
            (1) Amendment.--Section 31 of the Securities Exchange Act of 
        1934 (15 U.S.C. 78ee) is amended by adding at the end the 
        following:

    ``(m) Transmittal of Commission Budget Requests.--
            ``(1) Budget required.--For fiscal year 2012, and each 
        fiscal year thereafter, the Commission shall prepare and submit 
        a budget to the President. Whenever the Commission submits a 
        budget estimate or request to the President or the Office of 
        Management and Budget, the Commission shall concurrently 
        transmit copies of the estimate or request to the Committee on 
        Appropriations of the Senate, the Committee on Appropriations of 
        the House of Representatives, the Committee on Banking, Housing, 
        and Urban Affairs of the Senate, and the Committee on Financial 
        Services of the House of Representatives.
            ``(2) Submission to congress.--The President shall submit 
        each budget submitted under paragraph (1) to Congress, in 
        unaltered form, together with the annual budget for the 
        Administration submitted by the President.
            ``(3) Contents.--The Commission shall include in each budget 
        submitted under paragraph (1)--
                    ``(A) an itemization of the amount of funds 
                necessary to carry out the functions of the Commission.
                    ``(B) an amount to be designated as contingency 
                funding to be used by the Commission to address 
                unanticipated needs; and
                    ``(C) a designation of any activities of the 
                Commission for which multi-year budget authority would 
                be suitable.''.
            (2) <<NOTE: 15 USC 78ee note.>>  Budget of the president.--
        For fiscal year 2012, and each fiscal year thereafter, the 
        annual budget for the Administration submitted by the President 
        to Congress shall reflect the amendments made by this section.

    (e) Securities and Exchange Commission Reserve Fund.--
            (1) Amendment.--Section 4 of the Securities Exchange Act of 
        1934 (15 U.S.C. 78d), as amended by this Act, is amended by 
        adding at the end the following:

    ``(i) Securities and Exchange Commission Reserve Fund.--
            ``(1) Reserve fund established.--There is established in the 
        Treasury of the United States a separate fund, to be known as 
        the `Securities and Exchange Commission Reserve Fund' (referred 
        to in this subsection as the `Reserve Fund').
            ``(2) Reserve fund amounts.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), any registration fees collected by the 
                Commission under section 6(b) of the Securities Act of 
                1933 (15 U.S.C. 77f(b)) or section 24(f) of the 
                Investment Company Act of 1940

[[Page 124 STAT. 1955]]

                (15 U.S.C. 80a-24(f)) shall be deposited into the 
                Reserve Fund.
                    ``(B) Limitations.--For any 1 fiscal year--
                          ``(i) the amount deposited in the Fund may not 
                      exceed $50,000,000; and
                          ``(ii) the balance in the Fund may not exceed 
                      $100,000,000.
                    ``(C) Excess fees.--Any amounts in excess of the 
                limitations described in subparagraph (B) that the 
                Commission collects from registration fees under section 
                6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) or 
                section 24(f) of the Investment Company Act of 1940 (15 
                U.S.C. 80a-24(f)) shall be deposited in the General Fund 
                of the Treasury of the United States and shall not be 
                available for obligation by the Commission.
            ``(3) Use of amounts in reserve fund.--The Commission may 
        obligate amounts in the Reserve Fund, not to exceed a total of 
        $100,000,000 in any 1 fiscal year, as the Commission determines 
        is necessary to carry out the functions of the Commission. Any 
        amounts in the reserve fund shall remain available until 
        expended. <<NOTE: Deadline. Notification.>>  Not later than 10 
        days after the date on which the Commission obligates amounts 
        under this paragraph, the Commission shall notify Congress of 
        the date, amount, and purpose of the obligation.
            ``(4) Rule of construction.--Amounts collected and deposited 
        in the Reserve Fund shall not be construed to be Government 
        funds or appropriated monies and shall not be subject to 
        apportionment for the purpose of chapter 15 of title 31, United 
        States Code, or under any other authority.''.
            (2) <<NOTE: 15 USC 78d note.>>  Effective date.--The 
        amendment made by this subsection shall take effect on October 
        1, 2011.

TITLE X-- <<NOTE: Consumer Financial Protection Act of 2010.>> BUREAU OF 
CONSUMER FINANCIAL PROTECTION
SEC. 1001. <<NOTE: 12 USC 5301 note.>> SHORT TITLE.

    This title may be cited as the ``Consumer Financial Protection Act 
of 2010''.
SEC. 1002. <<NOTE: 12 USC 5481.>> DEFINITIONS.

    Except as otherwise provided in this title, for purposes of this 
title, the following definitions shall apply:
            (1) Affiliate.--The term ``affiliate'' means any person that 
        controls, is controlled by, or is under common control with 
        another person.
            (2) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection.
            (3) Business of insurance.--The term ``business of 
        insurance'' means the writing of insurance or the reinsuring of 
        risks by an insurer, including all acts necessary to such 
        writing or reinsuring and the activities relating to the writing 
        of insurance or the reinsuring of risks conducted by persons who 
        act as, or are, officers, directors, agents, or employees of 
        insurers or who are other persons authorized to act on behalf of 
        such persons.

[[Page 124 STAT. 1956]]

            (4) Consumer.--The term ``consumer'' means an individual or 
        an agent, trustee, or representative acting on behalf of an 
        individual.
            (5) Consumer financial product or service.--The term 
        ``consumer financial product or service'' means any financial 
        product or service that is described in one or more categories 
        under--
                    (A) paragraph (15) and is offered or provided for 
                use by consumers primarily for personal, family, or 
                household purposes; or
                    (B) clause (i), (iii), (ix), or (x) of paragraph 
                (15)(A), and is delivered, offered, or provided in 
                connection with a consumer financial product or service 
                referred to in subparagraph (A).
            (6) Covered person.--The term ``covered person'' means--
                    (A) any person that engages in offering or providing 
                a consumer financial product or service; and
                    (B) any affiliate of a person described in 
                subparagraph (A) if such affiliate acts as a service 
                provider to such person.
            (7) Credit.--The term ``credit'' means the right granted by 
        a person to a consumer to defer payment of a debt, incur debt 
        and defer its payment, or purchase property or services and 
        defer payment for such purchase.
            (8) Deposit-taking activity.--The term ``deposit-taking 
        activity'' means--
                    (A) the acceptance of deposits, maintenance of 
                deposit accounts, or the provision of services related 
                to the acceptance of deposits or the maintenance of 
                deposit accounts;
                    (B) the acceptance of funds, the provision of other 
                services related to the acceptance of funds, or the 
                maintenance of member share accounts by a credit union; 
                or
                    (C) the receipt of funds or the equivalent thereof, 
                as the Bureau may determine by rule or order, received 
                or held by a covered person (or an agent for a covered 
                person) for the purpose of facilitating a payment or 
                transferring funds or value of funds between a consumer 
                and a third party.
            (9) Designated transfer date.--The term ``designated 
        transfer date'' means the date established under section 1062.
            (10) Director.--The term ``Director'' means the Director of 
        the Bureau.
            (11) Electronic conduit services.--The term ``electronic 
        conduit services''--
                    (A) means the provision, by a person, of electronic 
                data transmission, routing, intermediate or transient 
                storage, or connections to a telecommunications system 
                or network; and
                    (B) does not include a person that provides 
                electronic conduit services if, when providing such 
                services, the person--
                          (i) selects or modifies the content of the 
                      electronic data;
                          (ii) transmits, routes, stores, or provides 
                      connections for electronic data, including 
                      financial data, in a manner that such financial 
                      data is differentiated from other types of data of 
                      the same form that such

[[Page 124 STAT. 1957]]

                      person transmits, routes, or stores, or with 
                      respect to which, provides connections; or
                          (iii) is a payee, payor, correspondent, or 
                      similar party to a payment transaction with a 
                      consumer.
            (12) Enumerated consumer laws.--Except as otherwise 
        specifically provided in section 1029, subtitle G or subtitle H, 
        the term ``enumerated consumer laws'' means--
                    (A) the Alternative Mortgage Transaction Parity Act 
                of 1982 (12 U.S.C. 3801 et seq.);
                    (B) the Consumer Leasing Act of 1976 (15 U.S.C. 1667 
                et seq.);
                    (C) the Electronic Fund Transfer Act (15 U.S.C. 1693 
                et seq.), except with respect to section 920 of that 
                Act;
                    (D) the Equal Credit Opportunity Act (15 U.S.C. 1691 
                et seq.);
                    (E) the Fair Credit Billing Act (15 U.S.C. 1666 et 
                seq.);
                    (F) the Fair Credit Reporting Act (15 U.S.C. 1681 et 
                seq.), except with respect to sections 615(e) and 628 of 
                that Act (15 U.S.C. 1681m(e), 1681w);
                    (G) the Home Owners Protection Act of 1998 (12 
                U.S.C. 4901 et seq.);
                    (H) the Fair Debt Collection Practices Act (15 
                U.S.C. 1692 et seq.);
                    (I) subsections (b) through (f) of section 43 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1831t(c)-(f));
                    (J) sections 502 through 509 of the Gramm-Leach-
                Bliley Act (15 U.S.C. 6802-6809) except for section 505 
                as it applies to section 501(b);
                    (K) the Home Mortgage Disclosure Act of 1975 (12 
                U.S.C. 2801 et seq.);
                    (L) the Home Ownership and Equity Protection Act of 
                1994 (15 U.S.C. 1601 note);
                    (M) the Real Estate Settlement Procedures Act of 
                1974 (12 U.S.C. 2601 et seq.);
                    (N) the S.A.F.E. Mortgage Licensing Act of 2008 (12 
                U.S.C. 5101 et seq.);
                    (O) the Truth in Lending Act (15 U.S.C. 1601 et 
                seq.);
                    (P) the Truth in Savings Act (12 U.S.C. 4301 et 
                seq.);
                    (Q) section 626 of the Omnibus Appropriations Act, 
                2009 (Public Law 111-8); and
                    (R) the Interstate Land Sales Full Disclosure Act 
                (15 U.S.C. 1701).
            (13) Fair lending.--The term ``fair lending'' means fair, 
        equitable, and nondiscriminatory access to credit for consumers.
            (14) Federal consumer financial law.--The term ``Federal 
        consumer financial law'' means the provisions of this title, the 
        enumerated consumer laws, the laws for which authorities are 
        transferred under subtitles F and H, and any rule or order 
        prescribed by the Bureau under this title, an enumerated 
        consumer law, or pursuant to the authorities transferred under 
        subtitles F and H. The term does not include the Federal Trade 
        Commission Act.
            (15) Financial product or service.--
                    (A) In general.--The term ``financial product or 
                service'' means--

[[Page 124 STAT. 1958]]

                          (i) extending credit and servicing loans, 
                      including acquiring, purchasing, selling, 
                      brokering, or other extensions of credit (other 
                      than solely extending commercial credit to a 
                      person who originates consumer credit 
                      transactions);
                          (ii) extending or brokering leases of personal 
                      or real property that are the functional 
                      equivalent of purchase finance arrangements, if--
                                    (I) the lease is on a non-operating 
                                basis;
                                    (II) the initial term of the lease 
                                is at least 90 days; and
                                    (III) in the case of a lease 
                                involving real property, at the 
                                inception of the initial lease, the 
                                transaction is intended to result in 
                                ownership of the leased property to be 
                                transferred to the lessee, subject to 
                                standards prescribed by the Bureau;
                          (iii) providing real estate settlement 
                      services, except such services excluded under 
                      subparagraph (C), or performing appraisals of real 
                      estate or personal property;
                          (iv) engaging in deposit-taking activities, 
                      transmitting or exchanging funds, or otherwise 
                      acting as a custodian of funds or any financial 
                      instrument for use by or on behalf of a consumer;
                          (v) selling, providing, or issuing stored 
                      value or payment instruments, except that, in the 
                      case of a sale of, or transaction to reload, 
                      stored value, only if the seller exercises 
                      substantial control over the terms or conditions 
                      of the stored value provided to the consumer 
                      where, for purposes of this clause--
                                    (I) a seller shall not be found to 
                                exercise substantial control over the 
                                terms or conditions of the stored value 
                                if the seller is not a party to the 
                                contract with the consumer for the 
                                stored value product, and another person 
                                is principally responsible for 
                                establishing the terms or conditions of 
                                the stored value; and
                                    (II) advertising the nonfinancial 
                                goods or services of the seller on the 
                                stored value card or device is not in 
                                itself an exercise of substantial 
                                control over the terms or conditions;
                          (vi) providing check cashing, check 
                      collection, or check guaranty services;
                          (vii) providing payments or other financial 
                      data processing products or services to a consumer 
                      by any technological means, including processing 
                      or storing financial or banking data for any 
                      payment instrument, or through any payments 
                      systems or network used for processing payments 
                      data, including payments made through an online 
                      banking system or mobile telecommunications 
                      network, except that a person shall not be deemed 
                      to be a covered person with respect to financial 
                      data processing solely because the person--

[[Page 124 STAT. 1959]]

                                    (I) is a merchant, retailer, or 
                                seller of any nonfinancial good or 
                                service who engages in financial data 
                                processing by transmitting or storing 
                                payments data about a consumer 
                                exclusively for purpose of initiating 
                                payments instructions by the consumer to 
                                pay such person for the purchase of, or 
                                to complete a commercial transaction 
                                for, such nonfinancial good or service 
                                sold directly by such person to the 
                                consumer; or
                                    (II) provides access to a host 
                                server to a person for purposes of 
                                enabling that person to establish and 
                                maintain a website;
                          (viii) providing financial advisory services 
                      (other than services relating to securities 
                      provided by a person regulated by the Commission 
                      or a person regulated by a State securities 
                      Commission, but only to the extent that such 
                      person acts in a regulated capacity) to consumers 
                      on individual financial matters or relating to 
                      proprietary financial products or services (other 
                      than by publishing any bona fide newspaper, news 
                      magazine, or business or financial publication of 
                      general and regular circulation, including 
                      publishing market data, news, or data analytics or 
                      investment information or recommendations that are 
                      not tailored to the individual needs of a 
                      particular consumer), including--
                                    (I) providing credit counseling to 
                                any consumer; and
                                    (II) providing services to assist a 
                                consumer with debt management or debt 
                                settlement, modifying the terms of any 
                                extension of credit, or avoiding 
                                foreclosure;
                          (ix) collecting, analyzing, maintaining, or 
                      providing consumer report information or other 
                      account information, including information 
                      relating to the credit history of consumers, used 
                      or expected to be used in connection with any 
                      decision regarding the offering or provision of a 
                      consumer financial product or service, except to 
                      the extent that--
                                    (I) a person--
                                            (aa) collects, analyzes, or 
                                        maintains information that 
                                        relates solely to the 
                                        transactions between a consumer 
                                        and such person;
                                            (bb) provides the 
                                        information described in item 
                                        (aa) to an affiliate of such 
                                        person; or
                                            (cc) provides information 
                                        that is used or expected to be 
                                        used solely in any decision 
                                        regarding the offering or 
                                        provision of a product or 
                                        service that is not a consumer 
                                        financial product or service, 
                                        including a decision for 
                                        employment, government 
                                        licensing, or a residential 
                                        lease or tenancy involving a 
                                        consumer; and
                                    (II) the information described in 
                                subclause (I)(aa) is not used by such 
                                person or affiliate in connection with 
                                any decision regarding the offering or 
                                provision of a consumer financial 
                                product or

[[Page 124 STAT. 1960]]

                                service to the consumer, other than 
                                credit described in section 
                                1027(a)(2)(A);
                          (x) collecting debt related to any consumer 
                      financial product or service; and
                          (xi) such other financial product or service 
                      as may be defined by the Bureau, by regulation, 
                      for purposes of this title, if the Bureau finds 
                      that such financial product or service is--
                                    (I) entered into or conducted as a 
                                subterfuge or with a purpose to evade 
                                any Federal consumer financial law; or
                                    (II) permissible for a bank or for a 
                                financial holding company to offer or to 
                                provide under any provision of a Federal 
                                law or regulation applicable to a bank 
                                or a financial holding company, and has, 
                                or likely will have, a material impact 
                                on consumers.
                    (B) Rule of construction.--
                          (i) In general.--For purposes of subparagraph 
                      (A)(xi)(II), and subject to clause (ii) of this 
                      subparagraph, the following activities provided to 
                      a covered person shall not, for purposes of this 
                      title, be considered incidental or complementary 
                      to a financial activity permissible for a 
                      financial holding company to engage in under any 
                      provision of a Federal law or regulation 
                      applicable to a financial holding company:
                                    (I) Providing information products 
                                or services to a covered person for 
                                identity authentication.
                                    (II) Providing information products 
                                or services for fraud or identify theft 
                                detection, prevention, or investigation.
                                    (III) Providing document retrieval 
                                or delivery services.
                                    (IV) Providing public records 
                                information retrieval.
                                    (V) Providing information products 
                                or services for anti-money laundering 
                                activities.
                          (ii) Limitation.--Nothing in clause (i) may be 
                      construed as modifying or limiting the authority 
                      of the Bureau to exercise any--
                                    (I) examination or enforcement 
                                powers authority under this title with 
                                respect to a covered person or service 
                                provider engaging in an activity 
                                described in subparagraph (A)(ix); or
                                    (II) powers authorized by this title 
                                to prescribe rules, issue orders, or 
                                take other actions under any enumerated 
                                consumer law or law for which the 
                                authorities are transferred under 
                                subtitle F or H.
                    (C) Exclusions.--The term ``financial product or 
                service'' does not include--
                          (i) the business of insurance; or
                          (ii) electronic conduit services.
            (16) Foreign exchange.--The term ``foreign exchange'' means 
        the exchange, for compensation, of currency of the United States 
        or of a foreign government for currency of another government.

[[Page 124 STAT. 1961]]

            (17) Insured credit union.--The term ``insured credit 
        union'' has the same meaning as in section 101 of the Federal 
        Credit Union Act (12 U.S.C. 1752).
            (18) Payment instrument.--The term ``payment instrument'' 
        means a check, draft, warrant, money order, traveler's check, 
        electronic instrument, or other instrument, payment of funds, or 
        monetary value (other than currency).
            (19) Person.--The term ``person'' means an individual, 
        partnership, company, corporation, association (incorporated or 
        unincorporated), trust, estate, cooperative organization, or 
        other entity.
            (20) Person regulated by the commodity futures trading 
        commission.--The term ``person regulated by the Commodity 
        Futures Trading Commission'' means any person that is 
        registered, or required by statute or regulation to be 
        registered, with the Commodity Futures Trading Commission, but 
        only to the extent that the activities of such person are 
        subject to the jurisdiction of the Commodity Futures Trading 
        Commission under the Commodity Exchange Act.
            (21) Person regulated by the commission.--The term ``person 
        regulated by the Commission'' means a person who is--
                    (A) a broker or dealer that is required to be 
                registered under the Securities Exchange Act of 1934;
                    (B) an investment adviser that is registered under 
                the Investment Advisers Act of 1940;
                    (C) an investment company that is required to be 
                registered under the Investment Company Act of 1940, and 
                any company that has elected to be regulated as a 
                business development company under that Act;
                    (D) a national securities exchange that is required 
                to be registered under the Securities Exchange Act of 
                1934;
                    (E) a transfer agent that is required to be 
                registered under the Securities Exchange Act of 1934;
                    (F) a clearing corporation that is required to be 
                registered under the Securities Exchange Act of 1934;
                    (G) any self-regulatory organization that is 
                required to be registered with the Commission;
                    (H) any nationally recognized statistical rating 
                organization that is required to be registered with the 
                Commission;
                    (I) any securities information processor that is 
                required to be registered with the Commission;
                    (J) any municipal securities dealer that is required 
                to be registered with the Commission;
                    (K) any other person that is required to be 
                registered with the Commission under the Securities 
                Exchange Act of 1934; and
                    (L) any employee, agent, or contractor acting on 
                behalf of, registered with, or providing services to, 
                any person described in any of subparagraphs (A) through 
                (K), but only to the extent that any person described in 
                any of subparagraphs (A) through (K), or the employee, 
                agent, or contractor of such person, acts in a regulated 
                capacity.
            (22) Person regulated by a state insurance regulator.--The 
        term ``person regulated by a State insurance regulator'' means 
        any person that is engaged in the business of

[[Page 124 STAT. 1962]]

        insurance and subject to regulation by any State insurance 
        regulator, but only to the extent that such person acts in such 
        capacity.
            (23) Person that performs income tax preparation activities 
        for consumers.--The term ``person that performs income tax 
        preparation activities for consumers'' means--
                    (A) any tax return preparer (as defined in section 
                7701(a)(36) of the Internal Revenue Code of 1986), 
                regardless of whether compensated, but only to the 
                extent that the person acts in such capacity;
                    (B) any person regulated by the Secretary under 
                section 330 of title 31, United States Code, but only to 
                the extent that the person acts in such capacity; and
                    (C) any authorized IRS e-file Providers (as defined 
                for purposes of section 7216 of the Internal Revenue 
                Code of 1986), but only to the extent that the person 
                acts in such capacity.
            (24) Prudential regulator.--The term ``prudential 
        regulator'' means--
                    (A) in the case of an insured depository institution 
                or depository institution holding company (as defined in 
                section 3 of the Federal Deposit Insurance Act), or 
                subsidiary of such institution or company, the 
                appropriate Federal banking agency, as that term is 
                defined in section 3 of the Federal Deposit Insurance 
                Act; and
                    (B) in the case of an insured credit union, the 
                National Credit Union Administration.
            (25) Related person.--The term ``related person''--
                    (A) shall apply only with respect to a covered 
                person that is not a bank holding company (as that term 
                is defined in section 2 of the Bank Holding Company Act 
                of 1956), credit union, or depository institution;
                    (B) shall be deemed to mean a covered person for all 
                purposes of any provision of Federal consumer financial 
                law; and
                    (C) means--
                          (i) any director, officer, or employee charged 
                      with managerial responsibility for, or controlling 
                      shareholder of, or agent for, such covered person;
                          (ii) any shareholder, consultant, joint 
                      venture partner, or other person, as determined by 
                      the Bureau (by rule or on a case-by-case basis) 
                      who materially participates in the conduct of the 
                      affairs of such covered person; and
                          (iii) any independent contractor (including 
                      any attorney, appraiser, or accountant) who 
                      knowingly or recklessly participates in any--
                                    (I) violation of any provision of 
                                law or regulation; or
                                    (II) breach of a fiduciary duty.
            (26) Service provider.--
                    (A) In general.--The term ``service provider'' means 
                any person that provides a material service to a covered 
                person in connection with the offering or provision by 
                such covered person of a consumer financial product or 
                service, including a person that--

[[Page 124 STAT. 1963]]

                          (i) participates in designing, operating, or 
                      maintaining the consumer financial product or 
                      service; or
                          (ii) processes transactions relating to the 
                      consumer financial product or service (other than 
                      unknowingly or incidentally transmitting or 
                      processing financial data in a manner that such 
                      data is undifferentiated from other types of data 
                      of the same form as the person transmits or 
                      processes).
                    (B) Exceptions.--The term ``service provider'' does 
                not include a person solely by virtue of such person 
                offering or providing to a covered person--
                          (i) a support service of a type provided to 
                      businesses generally or a similar ministerial 
                      service; or
                          (ii) time or space for an advertisement for a 
                      consumer financial product or service through 
                      print, newspaper, or electronic media.
                    (C) Rule of construction.--A person that is a 
                service provider shall be deemed to be a covered person 
                to the extent that such person engages in the offering 
                or provision of its own consumer financial product or 
                service.
            (27) State.--The term ``State'' means any State, territory, 
        or possession of the United States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the Commonwealth of the 
        Northern Mariana Islands, Guam, American Samoa, or the United 
        States Virgin Islands or any federally recognized Indian tribe, 
        as defined by the Secretary of the Interior under section 104(a) 
        of the Federally Recognized Indian Tribe List Act of 1994 (25 
        U.S.C. 479a-1(a)).
            (28) Stored value.--
                    (A) In general.--The term ``stored value'' means 
                funds or monetary value represented in any electronic 
                format, whether or not specially encrypted, and stored 
                or capable of storage on electronic media in such a way 
                as to be retrievable and transferred electronically, and 
                includes a prepaid debit card or product, or any other 
                similar product, regardless of whether the amount of the 
                funds or monetary value may be increased or reloaded.
                    (B) Exclusion.--Notwithstanding subparagraph (A), 
                the term ``stored value'' does not include a special 
                purpose card or certificate, which shall be defined for 
                purposes of this paragraph as funds or monetary value 
                represented in any electronic format, whether or not 
                specially encrypted, that is--
                          (i) issued by a merchant, retailer, or other 
                      seller of nonfinancial goods or services;
                          (ii) redeemable only for transactions with the 
                      merchant, retailer, or seller of nonfinancial 
                      goods or services or with an affiliate of such 
                      person, which affiliate itself is a merchant, 
                      retailer, or seller of nonfinancial goods or 
                      services;
                          (iii) issued in a specified amount that, 
                      except in the case of a card or product used 
                      solely for telephone services, may not be 
                      increased or reloaded;
                          (iv) purchased on a prepaid basis in exchange 
                      for payment; and

[[Page 124 STAT. 1964]]

                          (v) honored upon presentation to such 
                      merchant, retailer, or seller of nonfinancial 
                      goods or services or an affiliate of such person, 
                      which affiliate itself is a merchant, retailer, or 
                      seller of nonfinancial goods or services, only for 
                      any nonfinancial goods or services.
            (29) Transmitting or exchanging funds.--The term 
        ``transmitting or exchanging funds'' means receiving currency, 
        monetary value, or payment instruments from a consumer for the 
        purpose of exchanging or transmitting the same by any means, 
        including transmission by wire, facsimile, electronic transfer, 
        courier, the Internet, or through bill payment services or 
        through other businesses that facilitate third-party transfers 
        within the United States or to or from the United States.

           Subtitle A--Bureau of Consumer Financial Protection

SEC. 1011. <<NOTE: 12 USC 5491.>> ESTABLISHMENT OF THE BUREAU OF 
                          CONSUMER FINANCIAL PROTECTION.

    (a) Bureau Established.--There is established in the Federal Reserve 
System, an independent bureau to be known as the ``Bureau of Consumer 
Financial Protection'', which shall regulate the offering and provision 
of consumer financial products or services under the Federal consumer 
financial laws. The Bureau shall be considered an Executive agency, as 
defined in section 105 of title 5, United States 
Code. <<NOTE: Applicability.>>  Except as otherwise provided expressly 
by law, all Federal laws dealing with public or Federal contracts, 
property, works, officers, employees, budgets, or funds, including the 
provisions of chapters 5 and 7 of title 5, shall apply to the exercise 
of the powers of the Bureau.

    (b) Director and Deputy Director.--
            (1) In general.--There is established the position of the 
        Director, who shall serve as the head of the Bureau.
            (2) Appointment.-- <<NOTE: President.>> Subject to paragraph 
        (3), the Director shall be appointed by the President, by and 
        with the advice and consent of the Senate.
            (3) Qualification.-- <<NOTE: President.>> The President 
        shall nominate the Director from among individuals who are 
        citizens of the United States.
            (4) Compensation.--The Director shall be compensated at the 
        rate prescribed for level II of the Executive Schedule under 
        section 5313 of title 5, United States Code.
            (5) Deputy director.--There is established the position of 
        Deputy Director, who shall--
                    (A) be appointed by the Director; and
                    (B) serve as acting Director in the absence or 
                unavailability of the Director.

    (c) Term.--
            (1) In general.--The Director shall serve for a term of 5 
        years.
            (2) Expiration of term.--An individual may serve as Director 
        after the expiration of the term for which appointed, until a 
        successor has been appointed and qualified.
            (3) Removal for cause.--The President may remove the 
        Director for inefficiency, neglect of duty, or malfeasance in 
        office.

[[Page 124 STAT. 1965]]

    (d) Service Restriction.--No Director or Deputy Director may hold 
any office, position, or employment in any Federal reserve bank, Federal 
home loan bank, covered person, or service provider during the period of 
service of such person as Director or Deputy Director.
    (e) Offices.--The principal office of the Bureau shall be in the 
District of Columbia. The Director may establish regional offices of the 
Bureau, including in cities in which the Federal reserve banks, or 
branches of such banks, are located, in order to carry out the 
responsibilities assigned to the Bureau under the Federal consumer 
financial laws.
SEC. 1012. <<NOTE: 12 USC 5492.>> EXECUTIVE AND ADMINISTRATIVE 
                          POWERS.

    (a) Powers of the Bureau.--The Bureau is authorized to establish the 
general policies of the Bureau with respect to all executive and 
administrative functions, including--
            (1) the establishment of rules for conducting the general 
        business of the Bureau, in a manner not inconsistent with this 
        title;
            (2) to bind the Bureau and enter into contracts;
            (3) directing the establishment and maintenance of divisions 
        or other offices within the Bureau, in order to carry out the 
        responsibilities under the Federal consumer financial laws, and 
        to satisfy the requirements of other applicable law;
            (4) to coordinate and oversee the operation of all 
        administrative, enforcement, and research activities of the 
        Bureau;
            (5) to adopt and use a seal;
            (6) to determine the character of and the necessity for the 
        obligations and expenditures of the Bureau;
            (7) the appointment and supervision of personnel employed by 
        the Bureau;
            (8) the distribution of business among personnel appointed 
        and supervised by the Director and among administrative units of 
        the Bureau;
            (9) the use and expenditure of funds;
            (10) implementing the Federal consumer financial laws 
        through rules, orders, guidance, interpretations, statements of 
        policy, examinations, and enforcement actions; and
            (11) performing such other functions as may be authorized or 
        required by law.

    (b) Delegation of Authority.--The Director of the Bureau may 
delegate to any duly authorized employee, representative, or agent any 
power vested in the Bureau by law.
    (c) Autonomy of the Bureau.--
            (1) Coordination with the board of governors.--
        Notwithstanding any other provision of law applicable to the 
        supervision or examination of persons with respect to Federal 
        consumer financial laws, the Board of Governors may delegate to 
        the Bureau the authorities to examine persons subject to the 
        jurisdiction of the Board of Governors for compliance with the 
        Federal consumer financial laws.
            (2) Autonomy.--Notwithstanding the authorities granted to 
        the Board of Governors under the Federal Reserve Act, the Board 
        of Governors may not--
                    (A) intervene in any matter or proceeding before the 
                Director, including examinations or enforcement actions, 
                unless otherwise specifically provided by law;

[[Page 124 STAT. 1966]]

                    (B) appoint, direct, or remove any officer or 
                employee of the Bureau; or
                    (C) merge or consolidate the Bureau, or any of the 
                functions or responsibilities of the Bureau, with any 
                division or office of the Board of Governors or the 
                Federal reserve banks.
            (3) Rules and orders.--No rule or order of the Bureau shall 
        be subject to approval or review by the Board of Governors. The 
        Board of Governors may not delay or prevent the issuance of any 
        rule or order of the Bureau.
            (4) Recommendations and testimony.--No officer or agency of 
        the United States shall have any authority to require the 
        Director or any other officer of the Bureau to submit 
        legislative recommendations, or testimony or comments on 
        legislation, to any officer or agency of the United States for 
        approval, comments, or review prior to the submission of such 
        recommendations, testimony, or comments to the Congress, if such 
        recommendations, testimony, or comments to the Congress include 
        a statement indicating that the views expressed therein are 
        those of the Director or such officer, and do not necessarily 
        reflect the views of the Board of Governors or the President.
            (5) Clarification of autonomy of the bureau in legal 
        proceedings.--The Bureau shall not be liable under any provision 
        of law for any action or inaction of the Board of Governors, and 
        the Board of Governors shall not be liable under any provision 
        of law for any action or inaction of the Bureau.
SEC. 1013. <<NOTE: 12 USC 5493.>>  ADMINISTRATION.

    (a) Personnel.--
            (1) Appointment.--
                    (A) In general.--The Director may fix the number of, 
                and appoint and direct, all employees of the Bureau, in 
                accordance with the applicable provisions of title 5, 
                United States Code.
                    (B) Employees of the bureau.--The Director is 
                authorized to employ attorneys, compliance examiners, 
                compliance supervision analysts, economists, 
                statisticians, and other employees as may be deemed 
                necessary to conduct the business of the Bureau. Unless 
                otherwise provided expressly by law, any individual 
                appointed under this section shall be an employee as 
                defined in section 2105 of title 5, United States Code, 
                and subject to the provisions of such title and other 
                laws generally applicable to the employees of an 
                Executive agency.
                    (C) Waiver authority.--
                          (i) In general.--In making any appointment 
                      under subparagraph (A), the Director may waive the 
                      requirements of chapter 33 of title 5, United 
                      States Code, and the regulations implementing such 
                      chapter, to the extent necessary to appoint 
                      employees on terms and conditions that are 
                      consistent with those set forth in section 11(1) 
                      of the Federal Reserve Act (12 U.S.C. 248(1)), 
                      while providing for--
                                    (I) fair, credible, and transparent 
                                methods of establishing qualification 
                                requirements for, recruitment for, and 
                                appointments to positions;

[[Page 124 STAT. 1967]]

                                    (II) fair and open competition and 
                                equitable treatment in the consideration 
                                and selection of individuals to 
                                positions;
                                    (III) fair, credible, and 
                                transparent methods of assigning, 
                                reassigning, detailing, transferring, 
                                and promoting employees.
                          (ii) Veterans preferences.--In implementing 
                      this subparagraph, the Director shall comply with 
                      the provisions of section 2302(b)(11), regarding 
                      veterans' preference requirements, in a manner 
                      consistent with that in which such provisions are 
                      applied under chapter 33 of title 5, United States 
                      Code. <<NOTE: Expiration date.>> The authority 
                      under this subparagraph to waive the requirements 
                      of that chapter 33 shall expire 5 years after the 
                      date of enactment of this Act.
            (2) Compensation.-- <<NOTE: Applicability.>> Notwithstanding 
        any otherwise applicable provision of title 5, United States 
        Code, concerning compensation, including the provisions of 
        chapter 51 and chapter 53, the following provisions shall apply 
        with respect to employees of the Bureau:
                    (A) The rates of basic pay for all employees of the 
                Bureau may be set and adjusted by the Director.
                    (B) The Director shall at all times provide 
                compensation (including benefits) to each class of 
                employees that, at a minimum, are comparable to the 
                compensation and benefits then being provided by the 
                Board of Governors for the corresponding class of 
                employees.
                    (C) All such employees shall be compensated 
                (including benefits) on terms and conditions that are 
                consistent with the terms and conditions set forth in 
                section 11(l) of the Federal Reserve Act (12 U.S.C. 
                248(l)).
            (3) Bureau participation in federal reserve system 
        retirement plan and federal reserve system thrift plan.--
                    (A) Employee election.--Employees appointed to the 
                Bureau may elect to participate in either--
                          (i) both the Federal Reserve System Retirement 
                      Plan and the Federal Reserve System Thrift Plan, 
                      under the same terms on which such participation 
                      is offered to employees of the Board of Governors 
                      who participate in such plans and under the terms 
                      and conditions specified under section 
                      1064(i)(1)(C); or
                          (ii) the Civil Service Retirement System under 
                      chapter 83 of title 5, United States Code, or the 
                      Federal Employees Retirement System under chapter 
                      84 of title 5, United States Code, if previously 
                      covered under one of those Federal employee 
                      retirement systems.
                    (B) Election period.-- <<NOTE: Deadline.>> Bureau 
                employees shall make an election under this paragraph 
                not later than 1 year after the date of appointment by, 
                or transfer under subtitle F to, the Bureau. 
                Participation in, and benefit accruals under, any other 
                retirement plan established or maintained by the Federal 
                Government shall end not later than the date on which 
                participation in, and benefit accruals under, the 
                Federal Reserve System Retirement Plan and Federal 
                Reserve System Thrift Plan begin.

[[Page 124 STAT. 1968]]

                    (C) <<NOTE: Payments.>>  Employer contribution.--The 
                Bureau shall pay an employer contribution to the Federal 
                Reserve System Retirement Plan, in the amount 
                established as an employer contribution under the 
                Federal Employees Retirement System, as established 
                under chapter 84 of title 5, United States Code, for 
                each Bureau employee who elects to participate in the 
                Federal Reserve System Retirement Plan. The Bureau shall 
                pay an employer contribution to the Federal Reserve 
                System Thrift Plan for each Bureau employee who elects 
                to participate in such plan, as required under the terms 
                of such plan.
                    (D) Controlled group status.--The Bureau is the same 
                employer as the Federal Reserve System (as comprised of 
                the Board of Governors and each of the 12 Federal 
                reserve banks prior to the date of enactment of this 
                Act) for purposes of subsections (b), (c), (m), and (o) 
                of section 414 of the Internal Revenue Code of 1986, (26 
                U.S.C. 414).
            (4) Labor-management relations.-- 
        <<NOTE: Applicability.>> Chapter 71 of title 5, United States 
        Code, shall apply to the Bureau and the employees of the Bureau.
            (5) Agency ombudsman.--
                    (A) Establishment required.-- 
                <<NOTE: Deadline. Appointment.>> Not later than 180 days 
                after the designated transfer date, the Bureau shall 
                appoint an ombudsman.
                    (B) Duties of ombudsman.--The ombudsman appointed in 
                accordance with subparagraph (A) shall--
                          (i) act as a liaison between the Bureau and 
                      any affected person with respect to any problem 
                      that such party may have in dealing with the 
                      Bureau, resulting from the regulatory activities 
                      of the Bureau; and
                          (ii) assure that safeguards exist to encourage 
                      complainants to come forward and preserve 
                      confidentiality.

    (b) <<NOTE: Establishment.>>  Specific Functional Units.--
            (1) Research.--The Director shall establish a unit whose 
        functions shall include researching, analyzing, and reporting 
        on--
                    (A) developments in markets for consumer financial 
                products or services, including market areas of 
                alternative consumer financial products or services with 
                high growth rates and areas of risk to consumers;
                    (B) access to fair and affordable credit for 
                traditionally underserved communities;
                    (C) consumer awareness, understanding, and use of 
                disclosures and communications regarding consumer 
                financial products or services;
                    (D) consumer awareness and understanding of costs, 
                risks, and benefits of consumer financial products or 
                services;
                    (E) consumer behavior with respect to consumer 
                financial products or services, including performance on 
                mortgage loans; and
                    (F) experiences of traditionally underserved 
                consumers, including un-banked and under-banked 
                consumers.

[[Page 124 STAT. 1969]]

            (2) Community affairs.--The Director shall establish a unit 
        whose functions shall include providing information, guidance, 
        and technical assistance regarding the offering and provision of 
        consumer financial products or services to traditionally 
        underserved consumers and communities.
            (3) Collecting and tracking complaints.--
                    (A) In general.--The Director shall establish a unit 
                whose functions shall include establishing a single, 
                toll-free telephone number, a website, and a database or 
                utilizing an existing database to facilitate the 
                centralized collection of, monitoring of, and response 
                to consumer complaints regarding consumer financial 
                products or services. The Director shall coordinate with 
                the Federal Trade Commission or other Federal agencies 
                to route complaints to such agencies, where appropriate.
                    (B) Routing calls to states.--To the extent 
                practicable, State agencies may receive appropriate 
                complaints from the systems established under 
                subparagraph (A), if--
                          (i) the State agency system has the functional 
                      capacity to receive calls or electronic reports 
                      routed by the Bureau systems;
                          (ii) the State agency has satisfied any 
                      conditions of participation in the system that the 
                      Bureau may establish, including treatment of 
                      personally identifiable information and sharing of 
                      information on complaint resolution or related 
                      compliance procedures and resources; and
                          (iii) participation by the State agency 
                      includes measures necessary to provide for 
                      protection of personally identifiable information 
                      that conform to the standards for protection of 
                      the confidentiality of personally identifiable 
                      information and for data integrity and security 
                      that apply to the Federal agencies described in 
                      subparagraph (D).
                    (C) Reports to the congress.--The Director shall 
                present an annual report to Congress not later than 
                March 31 of each year on the complaints received by the 
                Bureau in the prior year regarding consumer financial 
                products and services. Such report shall include 
                information and analysis about complaint numbers, 
                complaint types, and, where applicable, information 
                about resolution of complaints.
                    (D) Data sharing required.--To facilitate 
                preparation of the reports required under subparagraph 
                (C), supervision and enforcement activities, and 
                monitoring of the market for consumer financial products 
                and services, the Bureau shall share consumer complaint 
                information with prudential regulators, the Federal 
                Trade Commission, other Federal agencies, and State 
                agencies, subject to the standards applicable to Federal 
                agencies for protection of the confidentiality of 
                personally identifiable information and for data 
                security and integrity. The prudential regulators, the 
                Federal Trade Commission, and other Federal agencies 
                shall share data relating to consumer complaints 
                regarding consumer financial products and services with 
                the Bureau, subject to the standards applicable to 
                Federal agencies

[[Page 124 STAT. 1970]]

                for protection of confidentiality of personally 
                identifiable information and for data security and 
                integrity.

    (c) Office of Fair Lending and Equal Opportunity.--
            (1) Establishment.--The Director shall establish within the 
        Bureau the Office of Fair Lending and Equal Opportunity.
            (2) Functions.--The Office of Fair Lending and Equal 
        Opportunity shall have such powers and duties as the Director 
        may delegate to the Office, including--
                    (A) providing oversight and enforcement of Federal 
                laws intended to ensure the fair, equitable, and 
                nondiscriminatory access to credit for both individuals 
                and communities that are enforced by the Bureau, 
                including the Equal Credit Opportunity Act and the Home 
                Mortgage Disclosure Act;
                    (B) coordinating fair lending efforts of the Bureau 
                with other Federal agencies and State regulators, as 
                appropriate, to promote consistent, efficient, and 
                effective enforcement of Federal fair lending laws;
                    (C) working with private industry, fair lending, 
                civil rights, consumer and community advocates on the 
                promotion of fair lending compliance and education; and
                    (D) providing annual reports to Congress on the 
                efforts of the Bureau to fulfill its fair lending 
                mandate.
            (3) <<NOTE: Establishment.>>  Administration of office.--
        There is established the position of Assistant Director of the 
        Bureau for Fair Lending and Equal Opportunity, who--
                    (A) shall be appointed by the Director; and
                    (B) shall carry out such duties as the Director may 
                delegate to such Assistant Director.

    (d) Office of Financial Education.--
            (1) Establishment.--The Director shall establish an Office 
        of Financial Education, which shall be responsible for 
        developing and implementing initiatives intended to educate and 
        empower consumers to make better informed financial decisions.
            (2) Other duties.-- <<NOTE: Strategy.>> The Office of 
        Financial Education shall develop and implement a strategy to 
        improve the financial literacy of consumers that includes 
        measurable goals and objectives, in consultation with the 
        Financial Literacy and Education Commission, consistent with the 
        National Strategy for Financial Literacy, through activities 
        including providing opportunities for consumers to access--
                    (A) financial counseling, including community-based 
                financial counseling, where practicable;
                    (B) information to assist with the evaluation of 
                credit products and the understanding of credit 
                histories and scores;
                    (C) savings, borrowing, and other services found at 
                mainstream financial institutions;
                    (D) activities intended to--
                          (i) prepare the consumer for educational 
                      expenses and the submission of financial aid 
                      applications, and other major purchases;
                          (ii) reduce debt; and
                          (iii) improve the financial situation of the 
                      consumer;

[[Page 124 STAT. 1971]]

                    (E) assistance in developing long-term savings 
                strategies; and
                    (F) wealth building and financial services during 
                the preparation process to claim earned income tax 
                credits and Federal benefits.
            (3) Coordination.--The Office of Financial Education shall 
        coordinate with other units within the Bureau in carrying out 
        its functions, including--
                    (A) working with the Community Affairs Office to 
                implement the strategy to improve financial literacy of 
                consumers; and
                    (B) working with the research unit established by 
                the Director to conduct research related to consumer 
                financial education and counseling.
            (4) Report.--Not later than 24 months after the designated 
        transfer date, and annually thereafter, the Director shall 
        submit a report on its financial literacy activities and 
        strategy to improve financial literacy of consumers to--
                    (A) the Committee on Banking, Housing, and Urban 
                Affairs of the Senate; and
                    (B) the Committee on Financial Services of the House 
                of Representatives.
            (5) Membership in financial literacy and education 
        commission.--Section 513(c)(1) of the Financial Literacy and 
        Education Improvement Act (20 U.S.C. 9702(c)(1)) is amended--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D); and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) the Director of the Bureau of Consumer 
                Financial Protection; and''.
            (6) Conforming amendment.--Section 513(d) of the Financial 
        Literacy and Education Improvement Act (20 U.S.C. 9702(d)) is 
        amended by adding at the end the following: ``The Director of 
        the Bureau of Consumer Financial Protection shall serve as the 
        Vice Chairman.''.
            (7) Study and report on financial literacy program.--
                    (A) In general.--The Comptroller General of the 
                United States shall conduct a study to identify--
                          (i) the feasibility of certification of 
                      persons providing the programs or performing the 
                      activities described in paragraph (2), including 
                      recognizing outstanding programs, and developing 
                      guidelines and resources for community-based 
                      practitioners, including--
                                    (I) a potential certification 
                                process and standards for certification;
                                    (II) appropriate certifying 
                                entities;
                                    (III) resources required for funding 
                                such a process; and
                                    (IV) a cost-benefit analysis of such 
                                certification;
                          (ii) technological resources intended to 
                      collect, analyze, evaluate, or promote financial 
                      literacy and counseling programs;

[[Page 124 STAT. 1972]]

                          (iii) effective methods, tools, and strategies 
                      intended to educate and empower consumers about 
                      personal finance management; and
                          (iv) recommendations intended to encourage the 
                      development of programs that effectively improve 
                      financial education outcomes and empower consumers 
                      to make better informed financial decisions based 
                      on findings.
                    (B) Report.--Not later than 1 year after the date of 
                enactment of this Act, the Comptroller General of the 
                United States shall submit a report on the results of 
                the study conducted under this paragraph to the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and the Committee on Financial Services of the 
                House of Representatives.

    (e) Office of Service Member Affairs.--
            (1) In general.-- <<NOTE: Establishment.>> The Director 
        shall establish an Office of Service Member Affairs, which shall 
        be responsible for developing and implementing initiatives for 
        service members and their families intended to--
                    (A) educate and empower service members and their 
                families to make better informed decisions regarding 
                consumer financial products and services;
                    (B) coordinate with the unit of the Bureau 
                established under subsection (b)(3), in order to monitor 
                complaints by service members and their families and 
                responses to those complaints by the Bureau or other 
                appropriate Federal or State agency; and
                    (C) coordinate efforts among Federal and State 
                agencies, as appropriate, regarding consumer protection 
                measures relating to consumer financial products and 
                services offered to, or used by, service members and 
                their families.
            (2) Coordination.--
                    (A) Regional services.--The Director is authorized 
                to assign employees of the Bureau as may be deemed 
                necessary to conduct the business of the Office of 
                Service Member Affairs, including by establishing and 
                maintaining the functions of the Office in regional 
                offices of the Bureau located near military bases, 
                military treatment facilities, or other similar military 
                facilities.
                    (B) Agreements.--The Director is authorized to enter 
                into memoranda of understanding and similar agreements 
                with the Department of Defense, including any branch or 
                agency as authorized by the department, in order to 
                carry out the business of the Office of Service Member 
                Affairs.
            (3) Definition.--As used in this subsection, the term 
        ``service member'' means any member of the United States Armed 
        Forces and any member of the National Guard or Reserves.

    (f) Timing.--The Office of Fair Lending and Equal Opportunity, the 
Office of Financial Education, and the Office of Service Member Affairs 
shall each be established not later than 1 year after the designated 
transfer date.
    (g) Office of Financial Protection for Older Americans.--
            (1) Establishment.-- <<NOTE: Deadline.>> Before the end of 
        the 180-day period beginning on the designated transfer date, 
        the Director shall

[[Page 124 STAT. 1973]]

        establish the Office of Financial Protection for Older 
        Americans, the functions of which shall include activities 
        designed to facilitate the financial literacy of individuals who 
        have attained the age of 62 years or more (in this subsection, 
        referred to as ``seniors'') on protection from unfair, 
        deceptive, and abusive practices and on current and future 
        financial choices, including through the dissemination of 
        materials to seniors on such topics.
            (2) Assistant director.--The Office of Financial Protection 
        for Older Americans (in this subsection referred to as the 
        ``Office'') shall be headed by an assistant director.
            (3) Duties.--The Office shall--
                    (A) develop goals for programs that provide seniors 
                financial literacy and counseling, including programs 
                that--
                          (i) help seniors recognize warning signs of 
                      unfair, deceptive, or abusive practices, protect 
                      themselves from such practices;
                          (ii) provide one-on-one financial counseling 
                      on issues including long-term savings and later-
                      life economic security; and
                          (iii) provide personal consumer credit 
                      advocacy to respond to consumer problems caused by 
                      unfair, deceptive, or abusive practices;
                    (B) monitor certifications or designations of 
                financial advisors who advise seniors and alert the 
                Commission and State regulators of certifications or 
                designations that are identified as unfair, deceptive, 
                or abusive;
                    (C) <<NOTE: Deadline. Recommenda- tions.>>  not 
                later than 18 months after the date of the establishment 
                of the Office, submit to Congress and the Commission any 
                legislative and regulatory recommendations on the best 
                practices for--
                          (i) disseminating information regarding the 
                      legitimacy of certifications of financial advisers 
                      who advise seniors;
                          (ii) methods in which a senior can identify 
                      the financial advisor most appropriate for the 
                      senior's needs; and
                          (iii) methods in which a senior can verify a 
                      financial advisor's credentials;
                    (D) conduct research to identify best practices and 
                effective methods, tools, technology and strategies to 
                educate and counsel seniors about personal finance 
                management with a focus on--
                          (i) protecting themselves from unfair, 
                      deceptive, and abusive practices;
                          (ii) long-term savings; and
                          (iii) planning for retirement and long-term 
                      care;
                    (E) coordinate consumer protection efforts of 
                seniors with other Federal agencies and State 
                regulators, as appropriate, to promote consistent, 
                effective, and efficient enforcement; and
                    (F) work with community organizations, non-profit 
                organizations, and other entities that are involved with 
                educating or assisting seniors (including the National 
                Education and Resource Center on Women and Retirement 
                Planning).

[[Page 124 STAT. 1974]]

SEC. 1014. CONSUMER ADVISORY BOARD.

    (a) Establishment Required.--The Director shall establish a Consumer 
Advisory Board to advise and consult with the Bureau in the exercise of 
its functions under the Federal consumer financial laws, and to provide 
information on emerging practices in the consumer financial products or 
services industry, including regional trends, concerns, and other 
relevant information.
    (b) Membership.--In appointing the members of the Consumer Advisory 
Board, the Director shall seek to assemble experts in consumer 
protection, financial services, community development, fair lending and 
civil rights, and consumer financial products or services and 
representatives of depository institutions that primarily serve 
underserved communities, and representatives of communities that have 
been significantly impacted by higher-priced mortgage loans, and seek 
representation of the interests of covered persons and consumers, 
without regard to party affiliation. Not fewer than 6 members shall be 
appointed upon the recommendation of the regional Federal Reserve Bank 
Presidents, on a rotating basis.
    (c) Meetings.--The Consumer Advisory Board shall meet from time to 
time at the call of the Director, but, at a minimum, shall meet at least 
twice in each year.
    (d) Compensation and Travel Expenses.--Members of the Consumer 
Advisory Board who are not full-time employees of the United States 
shall--
            (1) be entitled to receive compensation at a rate fixed by 
        the Director while attending meetings of the Consumer Advisory 
        Board, including travel time; and
            (2) be allowed travel expenses, including transportation and 
        subsistence, while away from their homes or regular places of 
        business.
SEC. 1015. <<NOTE: 12 USC 5495.>> COORDINATION.

    The Bureau shall coordinate with the Commission, the Commodity 
Futures Trading Commission, the Federal Trade Commission, and other 
Federal agencies and State regulators, as appropriate, to promote 
consistent regulatory treatment of consumer financial and investment 
products and services.
SEC. 1016. <<NOTE: 12 USC 5496.>> APPEARANCES BEFORE AND REPORTS 
                          TO CONGRESS.

    (a) Appearances Before Congress.--The Director of the Bureau shall 
appear before the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services and the Committee on 
Energy and Commerce of the House of Representatives at semi-annual 
hearings regarding the reports required under subsection (b).
    (b) Reports Required.--The Bureau shall, concurrent with each semi-
annual hearing referred to in subsection (a), prepare and submit to the 
President and to the Committee on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial Services and the Committee on 
Energy and Commerce of the House of Representatives, a report, beginning 
with the session following the designated transfer date. The Bureau may 
also submit such report to the Committee on Commerce, Science, and 
Transportation of the Senate.
    (c) Contents.--The reports required by subsection (b) shall 
include--

[[Page 124 STAT. 1975]]

            (1) a discussion of the significant problems faced by 
        consumers in shopping for or obtaining consumer financial 
        products or services;
            (2) a justification of the budget request of the previous 
        year;
            (3) a list of the significant rules and orders adopted by 
        the Bureau, as well as other significant initiatives conducted 
        by the Bureau, during the preceding year and the plan of the 
        Bureau for rules, orders, or other initiatives to be undertaken 
        during the upcoming period;
            (4) an analysis of complaints about consumer financial 
        products or services that the Bureau has received and collected 
        in its central database on complaints during the preceding year;
            (5) a list, with a brief statement of the issues, of the 
        public supervisory and enforcement actions to which the Bureau 
        was a party during the preceding year;
            (6) the actions taken regarding rules, orders, and 
        supervisory actions with respect to covered persons which are 
        not credit unions or depository institutions;
            (7) an assessment of significant actions by State attorneys 
        general or State regulators relating to Federal consumer 
        financial law;
            (8) an analysis of the efforts of the Bureau to fulfill the 
        fair lending mission of the Bureau; and
            (9) an analysis of the efforts of the Bureau to increase 
        workforce and contracting diversity consistent with the 
        procedures established by the Office of Minority and Women 
        Inclusion.
SEC. 1017. <<NOTE: 12 USC 5497.>> FUNDING; PENALTIES AND FINES.

    (a) Transfer of Funds From Board Of Governors.--
            (1) In general.-- <<NOTE: Effective date. Deadlines.>> Each 
        year (or quarter of such year), beginning on the designated 
        transfer date, and each quarter thereafter, the Board of 
        Governors shall transfer to the Bureau from the combined 
        earnings of the Federal Reserve System, the amount determined by 
        the Director to be reasonably necessary to carry out the 
        authorities of the Bureau under Federal consumer financial law, 
        taking into account such other sums made available to the Bureau 
        from the preceding year (or quarter of such year).
            (2) Funding cap.--
                    (A) In general.--Notwithstanding paragraph (1), and 
                in accordance with this paragraph, the amount that shall 
                be transferred to the Bureau in each fiscal year shall 
                not exceed a fixed percentage of the total operating 
                expenses of the Federal Reserve System, as reported in 
                the Annual Report, 2009, of the Board of Governors, 
                equal to--
                          (i) 10 percent of such expenses in fiscal year 
                      2011;
                          (ii) 11 percent of such expenses in fiscal 
                      year 2012; and
                          (iii) 12 percent of such expenses in fiscal 
                      year 2013, and in each year thereafter.
                    (B) Adjustment of amount.--The dollar amount 
                referred to in subparagraph (A)(iii) shall be adjusted

[[Page 124 STAT. 1976]]

                annually, using the percent increase, if any, in the 
                employment cost index for total compensation for State 
                and local government workers published by the Federal 
                Government, or the successor index thereto, for the 12-
                month period ending on September 30 of the year 
                preceding the transfer.
                    (C) Reviewability.--Notwithstanding any other 
                provision in this title, the funds derived from the 
                Federal Reserve System pursuant to this subsection shall 
                not be subject to review by the Committees on 
                Appropriations of the House of Representatives and the 
                Senate.
            (3) Transition period.--Beginning on <<NOTE: Transfer 
        authority.>>  the date of enactment of this Act and until the 
        designated transfer date, the Board of Governors shall transfer 
        to the Bureau the amount estimated by the Secretary needed to 
        carry out the authorities granted to the Bureau under Federal 
        consumer financial law, from the date of enactment of this Act 
        until the designated transfer date.
            (4) Budget and financial management.--
                    (A) Financial operating plans and forecasts.--The 
                Director shall provide to the Director of the Office of 
                Management and Budget copies of the financial operating 
                plans and forecasts of the Director, as prepared by the 
                Director in the ordinary course of the operations of the 
                Bureau, and copies of the quarterly reports of the 
                financial condition and results of operations of the 
                Bureau, as prepared by the Director in the ordinary 
                course of the operations of the Bureau.
                    (B) Financial statements.--The 
                Bureau <<NOTE: Deadline.>>  shall prepare annually a 
                statement of--
                          (i) assets and liabilities and surplus or 
                      deficit;
                          (ii) income and expenses; and
                          (iii) sources and application of funds.
                    (C) Financial management systems.--The Bureau shall 
                implement and maintain financial management systems that 
                comply substantially with Federal financial management 
                systems requirements and applicable Federal accounting 
                standards.
                    (D) Assertion of internal controls.--The Director 
                shall provide to the Comptroller General of the United 
                States an assertion as to the effectiveness of the 
                internal controls that apply to financial reporting by 
                the Bureau, using the standards established in section 
                3512(c) of title 31, United States Code.
                    (E) Rule of construction.--This subsection may not 
                be construed as implying any obligation on the part of 
                the Director to consult with or obtain the consent or 
                approval of the Director of the Office of Management and 
                Budget with respect to any report, plan, forecast, or 
                other information referred to in subparagraph (A) or any 
                jurisdiction or oversight over the affairs or operations 
                of the Bureau.
                    (F) Financial statements.--The financial statements 
                of the Bureau shall not be consolidated with the 
                financial statements of either the Board of Governors or 
                the Federal Reserve System.
            (5) Audit of the bureau.--

[[Page 124 STAT. 1977]]

                    (A) In general.--The 
                Comptroller <<NOTE: Deadline.>>  General shall annually 
                audit the financial transactions of the Bureau in 
                accordance with the United States generally accepted 
                government auditing standards, as may be prescribed by 
                the Comptroller General of the United States. The audit 
                shall be conducted at the place or places where accounts 
                of the Bureau are normally kept. The representatives of 
                the Government Accountability Office shall have access 
                to the personnel and to all books, accounts, documents, 
                papers, records (including electronic records), reports, 
                files, and all other papers, automated data, things, or 
                property belonging to or under the control of or used or 
                employed by the Bureau pertaining to its financial 
                transactions and necessary to facilitate the audit, and 
                such representatives shall be afforded full facilities 
                for verifying transactions with the balances or 
                securities held by depositories, fiscal agents, and 
                custodians. All such books, accounts, documents, 
                records, reports, files, papers, and property of the 
                Bureau shall remain in possession and custody of the 
                Bureau. The Comptroller General may obtain and duplicate 
                any such books, accounts, documents, records, working 
                papers, automated data and files, or other information 
                relevant to such audit without cost to the Comptroller 
                General, and the right of access of the Comptroller 
                General to such information shall be enforceable 
                pursuant to section 716(c) of title 31, United States 
                Code.
                    (B) Report.--The Comptroller General shall submit to 
                the Congress a report of each annual audit conducted 
                under this subsection. The report to the Congress shall 
                set forth the scope of the audit and shall include the 
                statement of assets and liabilities and surplus or 
                deficit, the statement of income and expenses, the 
                statement of sources and application of funds, and such 
                comments and information as may be deemed necessary to 
                inform Congress of the financial operations and 
                condition of the Bureau, together with such 
                recommendations with respect thereto as the Comptroller 
                General may deem advisable. A copy of each report shall 
                be furnished to the President and to the Bureau at the 
                time submitted to the Congress.
                    (C) Assistance and costs.--For the purpose of 
                conducting an audit under this subsection, the 
                Comptroller General may, in the discretion of the 
                Comptroller General, employ by contract, without regard 
                to section 3709 of the Revised Statutes of the United 
                States (41 U.S.C. 5), professional services of firms and 
                organizations of certified public accountants for 
                temporary periods or for special purposes. Upon the 
                request <<NOTE: Transfer authority.>>  of the 
                Comptroller General, the Director of the Bureau shall 
                transfer to the Government Accountability Office from 
                funds available, the amount requested by the Comptroller 
                General to cover the full costs of any audit and report 
                conducted by the Comptroller General. The Comptroller 
                General shall credit funds transferred to the account 
                established for salaries and expenses of the Government 
                Accountability Office, and such amount shall be 
                available upon receipt and without fiscal year 
                limitation to cover the full costs of the audit and 
                report.

    (b) Consumer Financial Protection Fund.--

[[Page 124 STAT. 1978]]

            (1) Separate fund in federal reserve established.--There is 
        established in the Federal Reserve a separate fund, to be known 
        as the ``Bureau of Consumer Financial Protection Fund'' 
        (referred to in this section as the ``Bureau Fund''). The Bureau 
        Fund shall be maintained and established at a Federal reserve 
        bank, in accordance with such requirements as the Board of 
        Governors may impose.
            (2) Fund receipts.--All amounts transferred to the Bureau 
        under subsection (a) shall be deposited into the Bureau Fund.
            (3) Investment authority.--
                    (A) Amounts in bureau fund may be invested.--The 
                Bureau may request the Board of Governors to direct the 
                investment of the portion of the Bureau Fund that is 
                not, in the judgment of the Bureau, required to meet the 
                current needs of the Bureau.
                    (B) Eligible investments.--Investments authorized by 
                this paragraph shall be made in obligations of the 
                United States or obligations that are guaranteed as to 
                principal and interest by the United States, with 
                maturities suitable to the needs of the Bureau Fund, as 
                determined by the Bureau.
                    (C) Interest and proceeds credited.--The interest 
                on, and the proceeds from the sale or redemption of, any 
                obligations held in the Bureau Fund shall be credited to 
                the Bureau Fund.

    (c) Use of Funds.--
            (1) In general.--Funds obtained by, transferred to, or 
        credited to the Bureau Fund shall be immediately available to 
        the Bureau and under the control of the Director, and shall 
        remain available until expended, to pay the expenses of the 
        Bureau in carrying out its duties and responsibilities. The 
        compensation of the Director and other employees of the Bureau 
        and all other expenses thereof may be paid from, obtained by, 
        transferred to, or credited to the Bureau Fund under this 
        section.
            (2) Funds that are not government funds.--Funds obtained by 
        or transferred to the Bureau Fund shall not be construed to be 
        Government funds or appropriated monies.
            (3) Amounts not subject to apportionment.--Notwithstanding 
        any other provision of law, amounts in the Bureau Fund and in 
        the Civil Penalty Fund established under subsection (d) shall 
        not be subject to apportionment for purposes of chapter 15 of 
        title 31, United States Code, or under any other authority.

    (d) Penalties and Fines.--
            (1) Establishment of victims relief fund.--There is 
        established in the Federal Reserve a separate fund, to be known 
        as the ``Consumer Financial Civil Penalty Fund'' (referred to in 
        this section as the ``Civil Penalty Fund''). The Civil Penalty 
        Fund shall be maintained and established at a Federal reserve 
        bank, in accordance with such requirements as the Board of 
        Governors may impose. If the Bureau obtains a civil penalty 
        against any person in any judicial or administrative action 
        under Federal consumer financial laws, the Bureau shall deposit 
        into the Civil Penalty Fund, the amount of the penalty 
        collected.

[[Page 124 STAT. 1979]]

            (2) Payment to victims.--Amounts in the Civil Penalty Fund 
        shall be available to the Bureau, without fiscal year 
        limitation, for payments to the victims of activities for which 
        civil penalties have been imposed under the Federal consumer 
        financial laws. To the extent that such victims cannot be 
        located or such payments are otherwise not practicable, the 
        Bureau may use such funds for the purpose of consumer education 
        and financial literacy programs.

    (e) Authorization of Appropriations; Annual Report.--
            (1) Determination regarding need for appropriated funds.--
                    (A) In general.--The Director is authorized to 
                determine that sums available to the Bureau under this 
                section will not be sufficient to carry out the 
                authorities of the Bureau under Federal consumer 
                financial law for the upcoming year.
                    (B) Report required.--When making a determination 
                under subparagraph (A), the Director shall prepare a 
                report regarding the funding of the Bureau, including 
                the assets and liabilities of the Bureau, and the extent 
                to which the funding needs of the Bureau are anticipated 
                to exceed the level of the amount set forth in 
                subsection (a)(2). The Director shall submit the report 
                to the President and to the Committee on Appropriations 
                of the Senate and the Committee on Appropriations of the 
                House of Representatives.
            (2) Authorization of appropriations.--If the Director makes 
        the determination and submits the report pursuant to paragraph 
        (1), there are hereby authorized to be appropriated to the 
        Bureau, for the purposes of carrying out the authorities granted 
        in Federal consumer financial law, $200,000,000 for each of 
        fiscal years 2010, 2011, 2012, 2013, and 2014.
            (3) Apportionment.--Notwithstanding any other provision of 
        law, the amounts in paragraph (2) shall be subject to 
        apportionment under section 1517 of title 31, United States 
        Code, and restrictions that generally apply to the use of 
        appropriated funds in title 31, United States Code, and other 
        laws.
            (4) Annual report.--The Director shall prepare and submit a 
        report, on an annual basis, to the Committee on Appropriations 
        of the Senate and the Committee on Appropriations of the House 
        of Representatives regarding the financial operating plans and 
        forecasts of the Director, the financial condition and results 
        of operations of the Bureau, and the sources and application of 
        funds of the Bureau, including any funds appropriated in 
        accordance with this subsection.
SEC. 1018. <<NOTE: 12 USC 5491 note.>>  EFFECTIVE DATE.

    This subtitle shall become effective on the date of enactment of 
this Act.

                Subtitle B--General Powers of the Bureau

SEC. 1021. <<NOTE: 12 USC 5511.>>  PURPOSE, OBJECTIVES, AND 
                          FUNCTIONS.

    (a) Purpose.--The Bureau shall seek to implement and, where 
applicable, enforce Federal consumer financial law consistently for the 
purpose of ensuring that all consumers have access to markets

[[Page 124 STAT. 1980]]

for consumer financial products and services and that markets for 
consumer financial products and services are fair, transparent, and 
competitive.
    (b) Objectives.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law for the purposes of 
ensuring that, with respect to consumer financial products and 
services--
            (1) consumers are provided with timely and understandable 
        information to make responsible decisions about financial 
        transactions;
            (2) consumers are protected from unfair, deceptive, or 
        abusive acts and practices and from discrimination;
            (3) outdated, unnecessary, or unduly burdensome regulations 
        are regularly identified and addressed in order to reduce 
        unwarranted regulatory burdens;
            (4) Federal consumer financial law is enforced consistently, 
        without regard to the status of a person as a depository 
        institution, in order to promote fair competition; and
            (5) markets for consumer financial products and services 
        operate transparently and efficiently to facilitate access and 
        innovation.

    (c) Functions.--The primary functions of the Bureau are--
            (1) conducting financial education programs;
            (2) collecting, investigating, and responding to consumer 
        complaints;
            (3) collecting, researching, monitoring, and publishing 
        information relevant to the functioning of markets for consumer 
        financial products and services to identify risks to consumers 
        and the proper functioning of such markets;
            (4) subject to sections 1024 through 1026, supervising 
        covered persons for compliance with Federal consumer financial 
        law, and taking appropriate enforcement action to address 
        violations of Federal consumer financial law;
            (5) issuing rules, orders, and guidance implementing Federal 
        consumer financial law; and
            (6) performing such support activities as may be necessary 
        or useful to facilitate the other functions of the Bureau.
SEC. 1022. <<NOTE: 12 USC 5512.>>  RULEMAKING AUTHORITY.

    (a) In General.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law to administer, enforce, 
and otherwise implement the provisions of Federal consumer financial 
law.
    (b) Rulemaking, Orders, and Guidance.--
            (1) General authority.--The Director may prescribe rules and 
        issue orders and guidance, as may be necessary or appropriate to 
        enable the Bureau to administer and carry out the purposes and 
        objectives of the Federal consumer financial laws, and to 
        prevent evasions thereof.
            (2) Standards for rulemaking.--In prescribing a rule under 
        the Federal consumer financial laws--
                    (A) the Bureau shall consider--
                          (i) the potential benefits and costs to 
                      consumers and covered persons, including the 
                      potential reduction of access by consumers to 
                      consumer financial products or services resulting 
                      from such rule; and

[[Page 124 STAT. 1981]]

                          (ii) the impact of proposed rules on covered 
                      persons, as described in section 1026, and the 
                      impact on consumers in rural areas;
                    (B) <<NOTE: Consultation.>>  the Bureau shall 
                consult with the appropriate prudential regulators or 
                other Federal agencies prior to proposing a rule and 
                during the comment process regarding consistency with 
                prudential, market, or systemic objectives administered 
                by such agencies; and
                    (C) if, during the consultation process described in 
                subparagraph (B), a prudential regulator provides the 
                Bureau with a written objection to the proposed rule of 
                the Bureau or a portion thereof, the Bureau shall 
                include in the adopting release a description of the 
                objection and the basis for the Bureau decision, if any, 
                regarding such objection, except that nothing in this 
                clause shall be construed as altering or limiting the 
                procedures under section 1023 that may apply to any rule 
                prescribed by the Bureau.
            (3) Exemptions.--
                    (A) In general.--The Bureau, by rule, may 
                conditionally or unconditionally exempt any class of 
                covered persons, service providers, or consumer 
                financial products or services, from any provision of 
                this title, or from any rule issued under this title, as 
                the Bureau determines necessary or appropriate to carry 
                out the purposes and objectives of this title, taking 
                into consideration the factors in subparagraph (B).
                    (B) Factors.--In issuing an exemption, as permitted 
                under subparagraph (A), the Bureau shall, as 
                appropriate, take into consideration--
                          (i) the total assets of the class of covered 
                      persons;
                          (ii) the volume of transactions involving 
                      consumer financial products or services in which 
                      the class of covered persons engages; and
                          (iii) existing provisions of law which are 
                      applicable to the consumer financial product or 
                      service and the extent to which such provisions 
                      provide consumers with adequate protections.
            (4) Exclusive rulemaking authority.--
                    (A) In general.--Notwithstanding any other 
                provisions of Federal law and except as provided in 
                section 1061(b)(5), to the extent that a provision of 
                Federal consumer financial law authorizes the Bureau and 
                another Federal agency to issue regulations under that 
                provision of law for purposes of assuring compliance 
                with Federal consumer financial law and any regulations 
                thereunder, the Bureau shall have the exclusive 
                authority to prescribe rules subject to those provisions 
                of law.
                    (B) Deference.--Notwithstanding 
                any <<NOTE: Applicability.>>  power granted to any 
                Federal agency or to the Council under this title, and 
                subject to section 1061(b)(5)(E), the deference that a 
                court affords to the Bureau with respect to a 
                determination by the Bureau regarding the meaning or 
                interpretation of any provision of a Federal consumer 
                financial law shall be applied as if the Bureau were the 
                only agency authorized to apply, enforce, interpret, or 
                administer the provisions of such Federal consumer 
                financial law.

    (c) Monitoring.--

[[Page 124 STAT. 1982]]

            (1) In general.--In order to support its rulemaking and 
        other functions, the Bureau shall monitor for risks to consumers 
        in the offering or provision of consumer financial products or 
        services, including developments in markets for such products or 
        services.
            (2) Considerations.--In allocating its resources to perform 
        the monitoring required by this section, the Bureau may 
        consider, among other factors--
                    (A) likely risks and costs to consumers associated 
                with buying or using a type of consumer financial 
                product or service;
                    (B) understanding by consumers of the risks of a 
                type of consumer financial product or service;
                    (C) the legal protections applicable to the offering 
                or provision of a consumer financial product or service, 
                including the extent to which the law is likely to 
                adequately protect consumers;
                    (D) rates of growth in the offering or provision of 
                a consumer financial product or service;
                    (E) the extent, if any, to which the risks of a 
                consumer financial product or service may 
                disproportionately affect traditionally underserved 
                consumers; or
                    (F) the types, number, and other pertinent 
                characteristics of covered persons that offer or provide 
                the consumer financial product or service.
            (3) Significant findings.--
                    (A) In general.--The 
                Bureau <<NOTE: Publication. Reports. Deadline.>>  shall 
                publish not fewer than 1 report of significant findings 
                of its monitoring required by this subsection in each 
                calendar year, beginning with the first calendar year 
                that begins at least 1 year after the designated 
                transfer date.
                    (B) Confidential information.--The Bureau may make 
                public such information obtained by the Bureau under 
                this section as is in the public interest, through 
                aggregated reports or other appropriate formats designed 
                to protect confidential information in accordance with 
                paragraphs (4), (6), (8), and (9).
            (4) Collection of information.--
                    (A) In general.--In conducting any monitoring or 
                assessment required by this section, the Bureau shall 
                have the authority to gather information from time to 
                time regarding the organization, business conduct, 
                markets, and activities of covered persons and service 
                providers.
                    (B) Methodology.--In order to gather information 
                described in subparagraph (A), the Bureau may--
                          (i) gather and compile information from a 
                      variety of sources, including examination reports 
                      concerning covered persons or service providers, 
                      consumer complaints, voluntary surveys and 
                      voluntary interviews of consumers, surveys and 
                      interviews with covered persons and service 
                      providers, and review of available databases; and
                          (ii) require covered persons and service 
                      providers participating in consumer financial 
                      services markets to file with the Bureau, under 
                      oath or otherwise, in such form and within such 
                      reasonable period of time as the Bureau may 
                      prescribe by rule or order, annual

[[Page 124 STAT. 1983]]

                      or special reports, or answers in writing to 
                      specific questions, furnishing information 
                      described in paragraph (4), as necessary for the 
                      Bureau to fulfill the monitoring, assessment, and 
                      reporting responsibilities imposed by Congress.
                    (C) Limitation.--The Bureau may not use its 
                authorities under this paragraph to obtain records from 
                covered persons and service providers participating in 
                consumer financial services markets for purposes of 
                gathering or analyzing the personally identifiable 
                financial information of consumers.
            (5) Limited information gathering.--In order to assess 
        whether a nondepository is a covered person, as defined in 
        section 1002, the Bureau may require such nondepository to file 
        with the Bureau, under oath or otherwise, in such form and 
        within such reasonable period of time as the Bureau may 
        prescribe by rule or order, annual or special reports, or 
        answers in writing to specific questions.
            (6) Confidentiality rules.--
                    (A) Rulemaking.--The Bureau shall prescribe rules 
                regarding the confidential treatment of information 
                obtained from persons in connection with the exercise of 
                its authorities under Federal consumer financial law.
                    (B) Access by the bureau to reports of other 
                regulators.--
                          (i) Examination and financial condition 
                      reports.--Upon providing reasonable assurances of 
                      confidentiality, the Bureau shall have access to 
                      any report of examination or financial condition 
                      made by a prudential regulator or other Federal 
                      agency having jurisdiction over a covered person 
                      or service provider, and to all revisions made to 
                      any such report.
                          (ii) Provision of other reports to the 
                      bureau.--In addition to the reports described in 
                      clause (i), a prudential regulator or other 
                      Federal agency having jurisdiction over a covered 
                      person or service provider may, in its discretion, 
                      furnish to the Bureau any other report or other 
                      confidential supervisory information concerning 
                      any insured depository institution, credit union, 
                      or other entity examined by such agency under 
                      authority of any provision of Federal law.
                    (C) Access by other regulators to reports of the 
                bureau.--
                          (i) Examination reports.--Upon providing 
                      reasonable assurances of confidentiality, a 
                      prudential regulator, a State regulator, or any 
                      other Federal agency having jurisdiction over a 
                      covered person or service provider shall have 
                      access to any report of examination made by the 
                      Bureau with respect to such person, and to all 
                      revisions made to any such report.
                          (ii) Provision of other reports to other 
                      regulators.--In addition to the reports described 
                      in clause (i), the Bureau may, in its discretion, 
                      furnish to a prudential regulator or other agency 
                      having jurisdiction over a covered person or 
                      service provider any

[[Page 124 STAT. 1984]]

                      other report or other confidential supervisory 
                      information concerning such person examined by the 
                      Bureau under the authority of any other provision 
                      of Federal law.
            (7) Registration.--
                    (A) In general.--The Bureau may prescribe rules 
                regarding registration requirements applicable to a 
                covered person, other than an insured depository 
                institution, insured credit union, or related person.
                    (B) Registration information.--Subject to rules 
                prescribed by the Bureau, the Bureau may publicly 
                disclose registration information to facilitate the 
                ability of consumers to identify covered persons that 
                are registered with the Bureau.
                    (C) Consultation with state agencies.--In developing 
                and implementing registration requirements under this 
                paragraph, the Bureau shall consult with State agencies 
                regarding requirements or systems (including coordinated 
                or combined systems for registration), where 
                appropriate.
            (8) Privacy considerations.--In collecting information from 
        any person, publicly releasing information held by the Bureau, 
        or requiring covered persons to publicly report information, the 
        Bureau shall take steps to ensure that proprietary, personal, or 
        confidential consumer information that is protected from public 
        disclosure under section 552(b) or 552a of title 5, United 
        States Code, or any other provision of law, is not made public 
        under this title.
            (9) Consumer privacy.--
                    (A) In general.--The Bureau may not obtain from a 
                covered person or service provider any personally 
                identifiable financial information about a consumer from 
                the financial records of the covered person or service 
                provider, except--
                          (i) if the financial records are reasonably 
                      described in a request by the Bureau and the 
                      consumer provides written permission for the 
                      disclosure of such information by the covered 
                      person or service provider to the Bureau; or
                          (ii) as may be specifically permitted or 
                      required under other applicable provisions of law 
                      and in accordance with the Right to Financial 
                      Privacy Act of 1978 (12 U.S.C. 3401 et seq.).
                    (B) Treatment of covered person or service 
                provider.--With respect to the application of any 
                provision of the Right to Financial Privacy Act of 1978, 
                to a disclosure by a covered person or service provider 
                subject to this subsection, the covered person or 
                service provider shall be treated as if it were a 
                ``financial institution'', as defined in section 1101 of 
                that Act (12 U.S.C. 3401).

    (d) Assessment of Significant Rules.--
            (1) In general.--The Bureau shall conduct an assessment of 
        each significant rule or order adopted by the Bureau under 
        Federal consumer financial law. The assessment shall address, 
        among other relevant factors, the effectiveness of the rule or 
        order in meeting the purposes and objectives of this title and 
        the specific goals stated by the Bureau. The assessment shall

[[Page 124 STAT. 1985]]

        reflect available evidence and any data that the Bureau 
        reasonably may collect.
            (2) Reports.--The Bureau <<NOTE: Publication.>>  shall 
        publish a report of its assessment under this subsection not 
        later than 5 years after the effective date of the subject rule 
        or order.
            (3) Public comment required.--Before publishing a report of 
        its assessment, the Bureau shall invite public comment on 
        recommendations for modifying, expanding, or eliminating the 
        newly adopted significant rule or order.
SEC. 1023. <<NOTE: 12 USC 5513.>>  REVIEW OF BUREAU REGULATIONS.

    (a) Review of Bureau Regulations.--On the petition of a member 
agency of the Council, the Council may set aside a final regulation 
prescribed by the Bureau, or any provision thereof, if the Council 
decides, in accordance with subsection (c), that the regulation or 
provision would put the safety and soundness of the United States 
banking system or the stability of the financial system of the United 
States at risk.
    (b) Petition.--
            (1) Procedure.--An agency represented by a member of the 
        Council may petition the Council, in writing, and in accordance 
        with rules prescribed pursuant to subsection (f), to stay the 
        effectiveness of, or set aside, a regulation if the member 
        agency filing the petition--
                    (A) has in good faith attempted to work with the 
                Bureau to resolve concerns regarding the effect of the 
                rule on the safety and soundness of the United States 
                banking system or the stability of the financial system 
                of the United States; and
                    (B) <<NOTE: Deadline.>>  files the petition with the 
                Council not later than 10 days after the date on which 
                the regulation has been published in the Federal 
                Register.
            (2) <<NOTE: Federal Register, publication.>>  Publication.--
        Any petition filed with the Council under this section shall be 
        published in the Federal Register and transmitted 
        contemporaneously with filing to the Committee on Banking, 
        Housing, and Urban Affairs of the Senate and the Committee on 
        Financial Services of the House of Representatives.

    (c) Stays and Set Asides.--
            (1) Stay.--
                    (A) In general.--Upon the request of any member 
                agency, the Chairperson of the Council may stay the 
                effectiveness of a regulation for the purpose of 
                allowing appropriate consideration of the petition by 
                the Council.
                    (B) Expiration.--A stay issued under this paragraph 
                shall expire on the earlier of--
                          (i) 90 days after the date of filing of the 
                      petition under subsection (b); or
                          (ii) the date on which the Council makes a 
                      decision under paragraph (3).
            (2) No adverse inference.--After the expiration of any stay 
        imposed under this section, no inference shall be drawn 
        regarding the validity or enforceability of a regulation which 
        was the subject of the petition.
            (3) Vote.--
                    (A) In general.--The decision to issue a stay of, or 
                set aside, any regulation under this section shall be 
                made

[[Page 124 STAT. 1986]]

                only with the affirmative vote in accordance with 
                subparagraph (B) of \2/3\ of the members of the Council 
                then serving.
                    (B) Authorization to vote.--A member of the Council 
                may vote to stay the effectiveness of, or set aside, a 
                final regulation prescribed by the Bureau only if the 
                agency or department represented by that member has--
                          (i) considered any relevant information 
                      provided by the agency submitting the petition and 
                      by the Bureau; and
                          (ii) made an official determination, at a 
                      public meeting where applicable, that the 
                      regulation which is the subject of the petition 
                      would put the safety and soundness of the United 
                      States banking system or the stability of the 
                      financial system of the United States at risk.
            (4) Decisions to set aside.--
                    (A) Effect of decision.--A decision by the Council 
                to set aside a regulation prescribed by the Bureau, or 
                provision thereof, shall render such regulation, or 
                provision thereof, unenforceable.
                    (B) Timely action required.--The Council may not 
                issue a decision to set aside a regulation, or provision 
                thereof, which is the subject of a petition under this 
                section after the expiration of the later of--
                          (i) 45 days following the date of filing of 
                      the petition, unless a stay is issued under 
                      paragraph (1); or
                          (ii) the expiration of a stay issued by the 
                      Council under this section.
                    (C) Separate authority.--The issuance of a stay 
                under this section does not affect the authority of the 
                Council to set aside a regulation.
            (5) Dismissal due to inaction.--A petition under this 
        section shall be deemed dismissed if the Council has not issued 
        a decision to set aside a regulation, or provision thereof, 
        within the period for timely action under paragraph (4)(B).
            (6) <<NOTE: Federal Register, publication.>>  Publication of 
        decision.--Any decision under this subsection to issue a stay 
        of, or set aside, a regulation or provision thereof shall be 
        published by the Council in the Federal Register as soon as 
        practicable after the decision is made, with an explanation of 
        the reasons for the decision.
            (7) Rulemaking procedures inapplicable.--The notice and 
        comment procedures under section 553 of title 5, United States 
        Code, shall not apply to any decision under this section of the 
        Council to issue a stay of, or set aside, a regulation.
            (8) Judicial review of decisions by the council.--A decision 
        by the Council to set aside a regulation prescribed by the 
        Bureau, or provision thereof, shall be subject to review under 
        chapter 7 of title 5, United States Code.

    (d) Application of Other Law.--Nothing in this section shall be 
construed as altering, limiting, or restricting the application of any 
other provision of law, except as otherwise specifically provided in 
this section, including chapter 5 and chapter 7 of title 5, United 
States Code, to a regulation which is the subject of a petition filed 
under this section.
    (e) Savings Clause.--Nothing in this section shall be construed as 
limiting or restricting the Bureau from engaging in a rulemaking in 
accordance with applicable law.

[[Page 124 STAT. 1987]]

    (f) Implementing Rules.--The Council shall prescribe procedural 
rules to implement this section.
SEC. 1024. <<NOTE: 12 USC 5514.>>  SUPERVISION OF NONDEPOSITORY 
                          COVERED PERSONS.

    (a) Scope of Coverage.--
            (1) Applicability.--Notwithstanding any other provision of 
        this title, and except as provided in paragraph (3), this 
        section shall apply to any covered person who--
                    (A) offers or provides origination, brokerage, or 
                servicing of loans secured by real estate for use by 
                consumers primarily for personal, family, or household 
                purposes, or loan modification or foreclosure relief 
                services in connection with such loans;
                    (B) is a larger participant of a market for other 
                consumer financial products or services, as defined by 
                rule in accordance with paragraph (2);
                    (C) the Bureau has reasonable cause to determine, by 
                order, after notice to the covered person and a 
                reasonable opportunity for such covered person to 
                respond, based on complaints collected through the 
                system under section 1013(b)(3) or information from 
                other sources, that such covered person is engaging, or 
                has engaged, in conduct that poses risks to consumers 
                with regard to the offering or provision of consumer 
                financial products or services;
                    (D) offers or provides to a consumer any private 
                education loan, as defined in section 140 of the Truth 
                in Lending Act (15 U.S.C. 1650), notwithstanding section 
                1027(a)(2)(A) and subject to section 1027(a)(2)(C); or
                    (E) offers or provides to a consumer a payday loan.
            (2) Rulemaking to define covered persons subject to this 
        section.--The Bureau <<NOTE: Consultation.>>  shall consult with 
        the Federal Trade Commission prior to issuing a rule, in 
        accordance with paragraph (1)(B), to define covered persons 
        subject to this section. The Bureau <<NOTE: Deadline.>>  shall 
        issue its initial rule not later than 1 year after the 
        designated transfer date.
            (3) Rules of construction.--
                    (A) Certain persons excluded.--This section shall 
                not apply to persons described in section 1025(a) or 
                1026(a).
                    (B) Activity levels.--For purposes of computing 
                activity levels under paragraph (1) or rules issued 
                thereunder, activities of affiliated companies (other 
                than insured depository institutions or insured credit 
                unions) shall be aggregated.

    (b) Supervision.--
            (1) In general.--The 
        Bureau <<NOTE: Reports. Examinations.>>  shall require reports 
        and conduct examinations on a periodic basis of persons 
        described in subsection (a)(1) for purposes of--
                    (A) assessing compliance with the requirements of 
                Federal consumer financial law;
                    (B) obtaining information about the activities and 
                compliance systems or procedures of such person; and
                    (C) detecting and assessing risks to consumers and 
                to markets for consumer financial products and services.
            (2) Risk-based supervision program.--The Bureau shall 
        exercise its authority under paragraph (1) in a manner designed 
        to ensure that such exercise, with respect to persons described 
        in subsection (a)(1), is based on the assessment by the Bureau

[[Page 124 STAT. 1988]]

        of the risks posed to consumers in the relevant product markets 
        and geographic markets, and taking into consideration, as 
        applicable--
                    (A) the asset size of the covered person;
                    (B) the volume of transactions involving consumer 
                financial products or services in which the covered 
                person engages;
                    (C) the risks to consumers created by the provision 
                of such consumer financial products or services;
                    (D) the extent to which such institutions are 
                subject to oversight by State authorities for consumer 
                protection; and
                    (E) any other factors that the Bureau determines to 
                be relevant to a class of covered persons.
            (3) Coordination.--To minimize regulatory burden, the Bureau 
        shall coordinate its supervisory activities with the supervisory 
        activities conducted by prudential regulators and the State bank 
        regulatory authorities, including establishing their respective 
        schedules for examining persons described in subsection (a)(1) 
        and requirements regarding reports to be submitted by such 
        persons.
            (4) Use of existing reports.--The Bureau shall, to the 
        fullest extent possible, use--
                    (A) reports pertaining to persons described in 
                subsection (a)(1) that have been provided or required to 
                have been provided to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (5) Preservation of authority.--Nothing in this title may be 
        construed as limiting the authority of the Director to require 
        reports from persons described in subsection (a)(1), as 
        permitted under paragraph (1), regarding information owned or 
        under the control of such person, regardless of whether such 
        information is maintained, stored, or processed by another 
        person.
            (6) Reports of tax law noncompliance.--The Bureau shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.
            (7) Registration, recordkeeping and other requirements for 
        certain persons.--
                    (A) <<NOTE: Regulations.>>  In general.--The Bureau 
                shall prescribe rules to facilitate supervision of 
                persons described in subsection (a)(1) and assessment 
                and detection of risks to consumers.
                    (B) Recordkeeping.--The Bureau may require a person 
                described in subsection (a)(1), to generate, provide, or 
                retain records for the purposes of facilitating 
                supervision of such persons and assessing and detecting 
                risks to consumers.
                    (C) Requirements concerning obligations.--The Bureau 
                may prescribe rules regarding a person described in 
                subsection (a)(1), to ensure that such persons are 
                legitimate entities and are able to perform their 
                obligations to consumers. Such requirements may include 
                background checks for principals, officers, directors, 
                or key personnel and bonding or other appropriate 
                financial requirements.

[[Page 124 STAT. 1989]]

                    (D) Consultation with state agencies.--In developing 
                and implementing requirements under this paragraph, the 
                Bureau shall consult with State agencies regarding 
                requirements or systems (including coordinated or 
                combined systems for registration), where appropriate.

    (c) Enforcement Authority.--
            (1) The bureau to have enforcement authority.--Except as 
        provided in paragraph (3) and section 1061, with respect to any 
        person described in subsection (a)(1), to the extent that 
        Federal law authorizes the Bureau and another Federal agency to 
        enforce Federal consumer financial law, the Bureau shall have 
        exclusive authority to enforce that Federal consumer financial 
        law.
            (2) Referral.--Any Federal agency authorized to enforce a 
        Federal consumer financial law described in paragraph (1) may 
        recommend in writing to the Bureau that the Bureau initiate an 
        enforcement proceeding, as the Bureau is authorized by that 
        Federal law or by this title.
            (3) Coordination with the federal trade commission.--
                    (A) In general.--The Bureau <<NOTE: Contracts.>>  
                and the Federal Trade Commission shall negotiate an 
                agreement for coordinating with respect to enforcement 
                actions by each agency regarding the offering or 
                provision of consumer financial products or services by 
                any covered person that is described in subsection 
                (a)(1), or service providers thereto. The agreement 
                shall include procedures for notice to the other agency, 
                where feasible, prior to initiating a civil action to 
                enforce any Federal law regarding the offering or 
                provision of consumer financial products or services.
                    (B) Civil actions.--Whenever a civil action has been 
                filed by, or on behalf of, the Bureau or the Federal 
                Trade Commission for any violation of any provision of 
                Federal law described in subparagraph (A), or any 
                regulation prescribed under such provision of law--
                          (i) the other agency may not, during the 
                      pendency of that action, institute a civil action 
                      under such provision of law against any defendant 
                      named in the complaint in such pending action for 
                      any violation alleged in the complaint; and
                          (ii) the Bureau or the Federal Trade 
                      Commission may intervene as a party in any such 
                      action brought by the other agency, and, upon 
                      intervening--
                                    (I) be heard on all matters arising 
                                in such enforcement action; and
                                    (II) file petitions for appeal in 
                                such actions.
                    (C) Agreement terms.--The terms of any agreement 
                negotiated under subparagraph (A) may modify or 
                supersede the provisions of subparagraph (B).
                    (D) Deadline.--The agencies shall reach the 
                agreement required under subparagraph (A) not later than 
                6 months after the designated transfer date.

    (d) Exclusive Rulemaking and Examination Authority.--Notwithstanding 
any other provision of Federal law and except as provided in section 
1061, to the extent that Federal law authorizes the Bureau and another 
Federal agency to issue regulations or guidance, conduct examinations, 
or require reports from a person described in subsection (a)(1) under 
such law for purposes of

[[Page 124 STAT. 1990]]

assuring compliance with Federal consumer financial law and any 
regulations thereunder, the Bureau shall have the exclusive authority to 
prescribe rules, issue guidance, conduct examinations, require reports, 
or issue exemptions with regard to a person described in subsection 
(a)(1), subject to those provisions of law.
    (e) Service Providers.--A service provider to a person described in 
subsection (a)(1) shall be subject to the authority of the Bureau under 
this section, to the same extent as if such service provider were 
engaged in a service relationship with a bank, and the Bureau were an 
appropriate Federal banking agency under section 7(c) of the Bank 
Service Company Act (12 U.S.C. 1867(c)). In <<NOTE: Coordination.>>  
conducting any examination or requiring any report from a service 
provider subject to this subsection, the Bureau shall coordinate with 
the appropriate prudential regulator, as applicable.

    (f) Preservation of Farm Credit Administration Authority.--No 
provision of this title may be construed as modifying, limiting, or 
otherwise affecting the authority of the Farm Credit Administration.
SEC. 1025. <<NOTE: 12 USC 5515.>>  SUPERVISION OF VERY LARGE 
                          BANKS, SAVINGS ASSOCIATIONS, AND CREDIT 
                          UNIONS.

    (a) Scope of Coverage.--This section <<NOTE: Applicability.>>  shall 
apply to any covered person that is--
            (1) an insured depository institution with total assets of 
        more than $10,000,000,000 and any affiliate thereof; or
            (2) an insured credit union with total assets of more than 
        $10,000,000,000 and any affiliate thereof.

    (b) <<NOTE: Reports.>>  Supervision.--
            (1) <<NOTE: Examinations.>>  In general.--The Bureau shall 
        have exclusive authority to require reports and conduct 
        examinations on a periodic basis of persons described in 
        subsection (a) for purposes of--
                    (A) assessing compliance with the requirements of 
                Federal consumer financial laws;
                    (B) obtaining information about the activities 
                subject to such laws and the associated compliance 
                systems or procedures of such persons; and
                    (C) detecting and assessing associated risks to 
                consumers and to markets for consumer financial products 
                and services.
            (2) Coordination.--To minimize regulatory burden, the Bureau 
        shall coordinate its supervisory activities with the supervisory 
        activities conducted by prudential regulators and the State bank 
        regulatory authorities, including consultation regarding their 
        respective schedules for examining such persons described in 
        subsection (a) and requirements regarding reports to be 
        submitted by such persons.
            (3) Use of existing reports.--The Bureau shall, to the 
        fullest extent possible, use--
                    (A) reports pertaining to a person described in 
                subsection (a) that have been provided or required to 
                have been provided to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (4) Preservation of authority.--Nothing in this title may be 
        construed as limiting the authority of the Director to require 
        reports from a person described in subsection (a), as permitted 
        under paragraph (1), regarding information owned

[[Page 124 STAT. 1991]]

        or under the control of such person, regardless of whether such 
        information is maintained, stored, or processed by another 
        person.
            (5) Reports of tax law noncompliance.--The Bureau shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.

    (c) Primary Enforcement Authority.--
            (1) The bureau to have primary enforcement authority.--To 
        the extent that the Bureau and another Federal agency are 
        authorized to enforce a Federal consumer financial law, the 
        Bureau shall have primary authority to enforce that Federal 
        consumer financial law with respect to any person described in 
        subsection (a).
            (2) Referral.--Any Federal agency, other than the Federal 
        Trade Commission, that is authorized to enforce a Federal 
        consumer financial law may recommend, in writing, to the Bureau 
        that the Bureau initiate an enforcement proceeding with respect 
        to a person described in subsection (a), as the Bureau is 
        authorized to do by that Federal consumer financial law.
            (3) Backup enforcement authority of other federal agency.--
        If the <<NOTE: Deadline. Time period.>>  Bureau does not, before 
        the end of the 120-day period beginning on the date on which the 
        Bureau receives a recommendation under paragraph (2), initiate 
        an enforcement proceeding, the other agency referred to in 
        paragraph (2) may initiate an enforcement proceeding, including 
        performing follow up supervisory and support functions 
        incidental thereto, to assure compliance with such proceeding.

    (d) Service Providers.--A service provider to a person described in 
subsection (a) shall be subject to the authority of the Bureau under 
this section, to the same extent as if the Bureau were an appropriate 
Federal banking agency under section 7(c) of the Bank Service Company 
Act 12 U.S.C. 1867(c). <<NOTE: Coordination.>>  In conducting any 
examination or requiring any report from a service provider subject to 
this subsection, the Bureau shall coordinate with the appropriate 
prudential regulator.

    (e) Simultaneous and Coordinated Supervisory Action.--
            (1) Examinations.--A prudential regulator and the Bureau 
        shall, with respect to each insured depository institution, 
        insured credit union, or other covered person described in 
        subsection (a) that is supervised by the prudential regulator 
        and the Bureau, respectively--
                    (A) coordinate the scheduling of examinations of the 
                insured depository institution, insured credit union, or 
                other covered person described in subsection (a);
                    (B) conduct simultaneous examinations of each 
                insured depository institution or insured credit union, 
                unless such institution requests examinations to be 
                conducted separately;
                    (C) <<NOTE: Reports. Deadline.>>  share each draft 
                report of examination with the other agency and permit 
                the receiving agency a reasonable opportunity (which 
                shall not be less than a period of 30 days after the 
                date of receipt) to comment on the draft report before 
                such report is made final; and

[[Page 124 STAT. 1992]]

                    (D) prior to issuing a final report of examination 
                or taking supervisory action, take into consideration 
                concerns, if any, raised in the comments made by the 
                other agency.
            (2) Coordination with state bank supervisors.--The Bureau 
        shall pursue arrangements and agreements with State bank 
        supervisors to coordinate examinations, consistent with 
        paragraph (1).
            (3) Avoidance of conflict in supervision.--
                    (A) Request.--If the proposed supervisory 
                determinations of the Bureau and a prudential regulator 
                (in this section referred to collectively as the 
                ``agencies'') are conflicting, an insured depository 
                institution, insured credit union, or other covered 
                person described in subsection (a) may request the 
                agencies to coordinate and present a joint statement of 
                coordinated supervisory action.
                    (B) Joint statement.--The 
                agencies <<NOTE: Deadline.>>  shall provide a joint 
                statement under subparagraph (A), not later than 30 days 
                after the date of receipt of the request of the insured 
                depository institution, credit union, or covered person 
                described in subsection (a).
            (4) Appeals to governing panel.--
                    (A) In general.--If the agencies do not resolve the 
                conflict or issue a joint statement required by 
                subparagraph (B), or if either of the agencies takes or 
                attempts to take any supervisory action relating to the 
                request for the joint statement without the consent of 
                the other agency, an insured depository institution, 
                insured credit union, or other covered person described 
                in subsection (a) may institute an appeal to a governing 
                panel, as provided in this subsection, not later than 30 
                days after the expiration of the period during which a 
                joint statement is required to be filed under paragraph 
                (3)(B).
                    (B) <<NOTE: Establishment.>>  Composition of 
                governing panel.--The governing panel for an appeal 
                under this paragraph shall be composed of--
                          (i) a representative from the Bureau and a 
                      representative of the prudential regulator, both 
                      of whom--
                                    (I) have not participated in the 
                                material supervisory determinations 
                                under appeal; and
                                    (II) do not directly or indirectly 
                                report to the person who participated 
                                materially in the supervisory 
                                determinations under appeal; and
                          (ii) one individual representative, to be 
                      determined on a rotating basis, from among the 
                      Board of Governors, the Corporation, the National 
                      Credit Union Administration, and the Office of the 
                      Comptroller of the Currency, other than any agency 
                      involved in the subject dispute.
                    (C) Conduct of appeal.--In an appeal under this 
                paragraph--
                          (i) the insured depository institution, 
                      insured credit union, or other covered person 
                      described in subsection (a)--
                                    (I) shall include in its appeal all 
                                the facts and legal arguments pertaining 
                                to the matter; and

[[Page 124 STAT. 1993]]

                                    (II) may, through counsel, 
                                employees, or representatives, appear 
                                before the governing panel in person or 
                                by telephone; and
                          (ii) the governing panel--
                                    (I) may request the insured 
                                depository institution, insured credit 
                                union, or other covered person described 
                                in subsection (a), the Bureau, or the 
                                prudential regulator to produce 
                                additional information relevant to the 
                                appeal; and
                                    
                                (II) <<NOTE: Determination. Deadline.>>  
                                by a majority vote of its members, shall 
                                provide a final determination, in 
                                writing, not later than 30 days after 
                                the date of filing of an informationally 
                                complete appeal, or such longer period 
                                as the panel and the insured depository 
                                institution, insured credit union, or 
                                other covered person described in 
                                subsection (a) may jointly agree.
                    (D) <<NOTE: Publication.>>  Public availability of 
                determinations.--A governing panel shall publish all 
                information contained in a determination by the 
                governing panel, with appropriate redactions of 
                information that would be subject to an exemption from 
                disclosure under section 552 of title 5, United States 
                Code.
                    (E) <<NOTE: Regulations.>>  Prohibition against 
                retaliation.--The Bureau and the prudential regulators 
                shall prescribe rules to provide safeguards from 
                retaliation against the insured depository institution, 
                insured credit union, or other covered person described 
                in subsection (a) instituting an appeal under this 
                paragraph, as well as their officers and employees.
                    (F) Limitation.--The process provided in this 
                paragraph shall not apply to a determination by a 
                prudential regulator to appoint a conservator or 
                receiver for an insured depository institution or a 
                liquidating agent for an insured credit union, as the 
                case may be, or a decision to take action pursuant to 
                section 38 of the Federal Deposit Insurance Act (12 
                U.S.C. 1831o) or section 212 of the Federal Credit Union 
                Act (112 U.S.C. 1790a), as applicable.
                    (G) Effect on other authority.--Nothing in this 
                section shall modify or limit the authority of the 
                Bureau to interpret, or take enforcement action under, 
                any Federal consumer financial law, or the authority of 
                a prudential regulator to interpret or take enforcement 
                action under any other provision of Federal law for 
                safety and soundness purposes.
SEC. 1026. <<NOTE: 12 USC 5516.>>  OTHER BANKS, SAVINGS 
                          ASSOCIATIONS, AND CREDIT UNIONS.

    (a) Scope of Coverage.--This section <<NOTE: Applicability.>>  shall 
apply to any covered person that is--
            (1) an insured depository institution with total assets of 
        $10,000,000,000 or less; or
            (2) an insured credit union with total assets of 
        $10,000,000,000 or less.

    (b) Reports.--The Director may require reports from a person 
described in subsection (a), as necessary to support the role of the 
Bureau in implementing Federal consumer financial law, to

[[Page 124 STAT. 1994]]

support its examination activities under subsection (c), and to assess 
and detect risks to consumers and consumer financial markets.
            (1) Use of existing reports.--The Bureau shall, to the 
        fullest extent possible, use--
                    (A) reports pertaining to a person described in 
                subsection (a) that have been provided or required to 
                have been provided to a Federal or State agency; and
                    (B) information that has been reported publicly.
            (2) Preservation of authority.--Nothing in this subsection 
        may be construed as limiting the authority of the Director from 
        requiring from a person described in subsection (a), as 
        permitted under paragraph (1), information owned or under the 
        control of such person, regardless of whether such information 
        is maintained, stored, or processed by another person.
            (3) Reports of tax law noncompliance.--The Bureau shall 
        provide the Commissioner of Internal Revenue with any report of 
        examination or related information identifying possible tax law 
        noncompliance.

    (c) Examinations.--
            (1) In general.--The Bureau may, at its discretion, include 
        examiners on a sampling basis of the examinations performed by 
        the prudential regulator to assess compliance with the 
        requirements of Federal consumer financial law of persons 
        described in subsection (a).
            (2) Agency coordination.--The prudential regulator shall--
                    (A) <<NOTE: Reports. Records.>>  provide all 
                reports, records, and documentation related to the 
                examination process for any institution included in the 
                sample referred to in paragraph (1) to the Bureau on a 
                timely and continual basis;
                    (B) involve such Bureau examiner in the entire 
                examination process for such person; and
                    (C) consider input of the Bureau concerning the 
                scope of an examination, conduct of the examination, the 
                contents of the examination report, the designation of 
                matters requiring attention, and examination ratings.

    (d) Enforcement.--
            (1) In general.--Except for requiring reports under 
        subsection (b), the prudential regulator is authorized to 
        enforce the requirements of Federal consumer financial laws and, 
        with respect to a covered person described in subsection (a), 
        shall have exclusive authority (relative to the Bureau) to 
        enforce such laws .
            (2) Coordination with prudential regulator.--
                    (A) Referral.--When 
                the <<NOTE: Notification. Recommenda- tion.>>  Bureau 
                has reason to believe that a person described in 
                subsection (a) has engaged in a material violation of a 
                Federal consumer financial law, the Bureau shall notify 
                the prudential regulator in writing and recommend 
                appropriate action to respond.
                    (B) Response.--Upon receiving <<NOTE: Deadline.>>  a 
                recommendation under subparagraph (A), the prudential 
                regulator shall provide a written response to the Bureau 
                not later than 60 days thereafter.

    (e) Service Providers.--A service provider to a substantial number 
of persons described in subsection (a) shall be subject to the authority 
of the Bureau under section 1025 to the same

[[Page 124 STAT. 1995]]

extent as if the Bureau were an appropriate Federal bank agency under 
section 7(c) of the Bank Service Company Act (12 U.S.C. 1867(c)). When 
conducting any examination or requiring any report from a service 
provider subject to this subsection, the Bureau shall coordinate with 
the appropriate prudential regulator.
SEC. 1027. <<NOTE: 12 USC 5517.>>  LIMITATIONS ON AUTHORITIES OF 
                          THE BUREAU; PRESERVATION OF AUTHORITIES.

    (a) Exclusion for Merchants, Retailers, and Other Sellers of 
Nonfinancial Goods or Services.--
            (1) Sale or brokerage of nonfinancial good or service.--The 
        Bureau may not exercise any rulemaking, supervisory, enforcement 
        or other authority under this title with respect to a person who 
        is a merchant, retailer, or seller of any nonfinancial good or 
        service and is engaged in the sale or brokerage of such 
        nonfinancial good or service, except to the extent that such 
        person is engaged in offering or providing any consumer 
        financial product or service, or is otherwise subject to any 
        enumerated consumer law or any law for which authorities are 
        transferred under subtitle F or H.
            (2) Offering or provision of certain consumer financial 
        products or services in connection with the sale or brokerage of 
        nonfinancial good or service.--
                    (A) In general.--Except as provided in subparagraph 
                (B), and subject to subparagraph (C), the Bureau may not 
                exercise any rulemaking, supervisory, enforcement, or 
                other authority under this title with respect to a 
                merchant, retailer, or seller of nonfinancial goods or 
                services, but only to the extent that such person--
                          (i) extends credit directly to a consumer, in 
                      a case in which the good or service being provided 
                      is not itself a consumer financial product or 
                      service (other than credit described in this 
                      subparagraph), exclusively for the purpose of 
                      enabling that consumer to purchase such 
                      nonfinancial good or service directly from the 
                      merchant, retailer, or seller;
                          (ii) directly, or through an agreement with 
                      another person, collects debt arising from credit 
                      extended as described in clause (i); or
                          (iii) sells or conveys debt described in 
                      clause (i) that is delinquent or otherwise in 
                      default.
                    (B) Applicability.--Subparagraph (A) does not apply 
                to any credit transaction or collection of debt, other 
                than as described in subparagraph (C)(i), arising from a 
                transaction described in subparagraph (A)--
                          (i) in which the merchant, retailer, or seller 
                      of nonfinancial goods or services assigns, sells 
                      or otherwise conveys to another person such debt 
                      owed by the consumer (except for a sale of debt 
                      that is delinquent or otherwise in default, as 
                      described in subparagraph (A)(iii));
                          (ii) in which the credit extended 
                      significantly exceeds the market value of the 
                      nonfinancial good or service provided, or the 
                      Bureau otherwise finds that the sale of the 
                      nonfinancial good or service is done as a 
                      subterfuge, so as to evade or circumvent the 
                      provisions of this title; or

[[Page 124 STAT. 1996]]

                          (iii) in which the merchant, retailer, or 
                      seller of nonfinancial goods or services regularly 
                      extends credit and the credit is subject to a 
                      finance charge.
                    (C) Limitations.--
                          (i) <<NOTE: Applicability.>>  In general.--
                      Notwithstanding subparagraph (B), subparagraph (A) 
                      shall apply with respect to a merchant, retailer, 
                      or seller of nonfinancial goods or services that 
                      is not engaged significantly in offering or 
                      providing consumer financial products or services.
                          (ii) Exception.--Subparagraph (A) and clause 
                      (i) of this subparagraph do not apply to any 
                      merchant, retailer, or seller of nonfinancial 
                      goods or services--
                                    (I) if such merchant, retailer, or 
                                seller of nonfinancial goods or services 
                                is engaged in a transaction described in 
                                subparagraph (B)(i) or (B)(ii); or
                                    (II) to the extent that such 
                                merchant, retailer, or seller is subject 
                                to any enumerated consumer law or any 
                                law for which authorities are 
                                transferred under subtitle F or H, but 
                                the Bureau may exercise such authority 
                                only with respect to that law.
                    (D) Rules.--
                          (i) Authority of other agencies.--No provision 
                      of this title shall be construed as modifying, 
                      limiting, or superseding the supervisory or 
                      enforcement authority of the Federal Trade 
                      Commission or any other agency (other than the 
                      Bureau) with respect to credit extended, or the 
                      collection of debt arising from such extension, 
                      directly by a merchant or retailer to a consumer 
                      exclusively for the purpose of enabling that 
                      consumer to purchase nonfinancial goods or 
                      services directly from the merchant or retailer.
                          (ii) Small businesses.--A merchant, retailer, 
                      or seller of nonfinancial goods or services that 
                      would otherwise be subject to the authority of the 
                      Bureau solely by virtue of the application of 
                      subparagraph (B)(iii) shall be deemed not to be 
                      engaged significantly in offering or providing 
                      consumer financial products or services under 
                      subparagraph (C)(i), if such person--
                                    (I) only extends credit for the sale 
                                of nonfinancial goods or services, as 
                                described in subparagraph (A)(i);
                                    (II) retains such credit on its own 
                                accounts (except to sell or convey such 
                                debt that is delinquent or otherwise in 
                                default); and
                                    (III) meets the relevant industry 
                                size threshold to be a small business 
                                concern, based on annual receipts, 
                                pursuant to section 3 of the Small 
                                Business Act (15 U.S.C. 632) and the 
                                implementing rules thereunder.
                          (iii) Initial year.--A merchant, retailer, or 
                      seller of nonfinancial goods or services shall be 
                      deemed to meet the relevant industry size 
                      threshold described in clause (ii)(III) during the 
                      first year of operations of that business concern 
                      if, during that year, the

[[Page 124 STAT. 1997]]

                      receipts of that business concern reasonably are 
                      expected to meet that size threshold.
                          (iv) Other standards for small business.--With 
                      respect to a merchant, retailer, or seller of 
                      nonfinancial goods or services that is a 
                      classified on a basis other than annual receipts 
                      for the purposes of section 3 of the Small 
                      Business Act (15 U.S.C. 632) and the implementing 
                      rules thereunder, such merchant, retailer, or 
                      seller shall be deemed to meet the relevant 
                      industry size threshold described in clause 
                      (ii)(III) if such merchant, retailer, or seller 
                      meets the relevant industry size threshold to be a 
                      small business concern based on the number of 
                      employees, or other such applicable measure, 
                      established under that Act.
                    (E) Exception from state enforcement.--To the extent 
                that the Bureau may not exercise authority under this 
                subsection with respect to a merchant, retailer, or 
                seller of nonfinancial goods or services, no action by a 
                State attorney general or State regulator with respect 
                to a claim made under this title may be brought under 
                subsection 1042(a), with respect to an activity 
                described in any of clauses (i) through (iii) of 
                subparagraph (A) by such merchant, retailer, or seller 
                of nonfinancial goods or services.

    (b) Exclusion for Real Estate Brokerage Activities.--
            (1) Real estate brokerage activities excluded.--Without 
        limiting subsection (a), and except as permitted in paragraph 
        (2), the Bureau may not exercise any rulemaking, supervisory, 
        enforcement, or other authority under this title with respect to 
        a person that is licensed or registered as a real estate broker 
        or real estate agent, in accordance with State law, to the 
        extent that such person--
                    (A) acts as a real estate agent or broker for a 
                buyer, seller, lessor, or lessee of real property;
                    (B) brings together parties interested in the sale, 
                purchase, lease, rental, or exchange of real property;
                    (C) negotiates, on behalf of any party, any portion 
                of a contract relating to the sale, purchase, lease, 
                rental, or exchange of real property (other than in 
                connection with the provision of financing with respect 
                to any such transaction); or
                    (D) offers to engage in any activity, or act in any 
                capacity, described in subparagraph (A), (B), or (C).
            (2) Description of activities.--The Bureau may exercise 
        rulemaking, supervisory, enforcement, or other authority under 
        this title with respect to a person described in paragraph (1) 
        when such person is--
                    (A) engaged in an activity of offering or providing 
                any consumer financial product or service, except that 
                the Bureau may exercise such authority only with respect 
                to that activity; or
                    (B) otherwise subject to any enumerated consumer law 
                or any law for which authorities are transferred under 
                subtitle F or H, but the Bureau may exercise such 
                authority only with respect to that law.

    (c) Exclusion for Manufactured Home Retailers and Modular Home 
Retailers.--

[[Page 124 STAT. 1998]]

            (1) In general.--The Director may not exercise any 
        rulemaking, supervisory, enforcement, or other authority over a 
        person to the extent that--
                    (A) such person is not described in paragraph (2); 
                and
                    (B) such person--
                          (i) acts as an agent or broker for a buyer or 
                      seller of a manufactured home or a modular home;
                          (ii) facilitates the purchase by a consumer of 
                      a manufactured home or modular home, by 
                      negotiating the purchase price or terms of the 
                      sales contract (other than providing financing 
                      with respect to such transaction); or
                          (iii) offers to engage in any activity 
                      described in clause (i) or (ii).
            (2) Description of activities.--A person is described in 
        this paragraph to the extent that such person is engaged in the 
        offering or provision of any consumer financial product or 
        service or is otherwise subject to any enumerated consumer law 
        or any law for which authorities are transferred under subtitle 
        F or H.
            (3) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    (A) Manufactured home.--The term ``manufactured 
                home'' has the same meaning as in section 603 of the 
                National Manufactured Housing Construction and Safety 
                Standards Act of 1974 (42 U.S.C. 5402).
                    (B) Modular home.--The term ``modular home'' means a 
                house built in a factory in 2 or more modules that meet 
                the State or local building codes where the house will 
                be located, and where such modules are transported to 
                the building site, installed on foundations, and 
                completed.

    (d) Exclusion for Accountants and Tax Preparers.--
            (1) In general.--Except as permitted in paragraph (2), the 
        Bureau may not exercise any rulemaking, supervisory, 
        enforcement, or other authority over--
                    (A) any person that is a certified public 
                accountant, permitted to practice as a certified public 
                accounting firm, or certified or licensed for such 
                purpose by a State, or any individual who is employed by 
                or holds an ownership interest with respect to a person 
                described in this subparagraph, when such person is 
                performing or offering to perform--
                          (i) customary and usual accounting activities, 
                      including the provision of accounting, tax, 
                      advisory, or other services that are subject to 
                      the regulatory authority of a State board of 
                      accountancy or a Federal authority; or
                          (ii) other services that are incidental to 
                      such customary and usual accounting activities, to 
                      the extent that such incidental services are not 
                      offered or provided--
                                    (I) by the person separate and apart 
                                from such customary and usual accounting 
                                activities; or
                                    (II) to consumers who are not 
                                receiving such customary and usual 
                                accounting activities; or

[[Page 124 STAT. 1999]]

                    (B) any person, other than a person described in 
                subparagraph (A) that performs income tax preparation 
                activities for consumers.
            (2) Description of activities.--
                    (A) In general.--Paragraph (1) shall not apply to 
                any person described in paragraph (1)(A) or (1)(B) to 
                the extent that such person is engaged in any activity 
                which is not a customary and usual accounting activity 
                described in paragraph (1)(A) or incidental thereto but 
                which is the offering or provision of any consumer 
                financial product or service, except to the extent that 
                a person described in paragraph (1)(A) is engaged in an 
                activity which is a customary and usual accounting 
                activity described in paragraph (1)(A), or incidental 
                thereto.
                    (B) Not a customary and usual accounting activity.--
                For purposes of this subsection, extending or brokering 
                credit is not a customary and usual accounting activity, 
                or incidental thereto.
                    (C) Rule of construction.--For purposes of 
                subparagraphs (A) and (B), a person described in 
                paragraph (1)(A) shall not be deemed to be extending 
                credit, if such person is only extending credit directly 
                to a consumer, exclusively for the purpose of enabling 
                such consumer to purchase services described in clause 
                (i) or (ii) of paragraph (1)(A) directly from such 
                person, and such credit is--
                          (i) not subject to a finance charge; and
                          (ii) not payable by written agreement in more 
                      than 4 installments.
                    (D) Other limitations.--Paragraph (1) does not apply 
                to any person described in paragraph (1)(A) or (1)(B) 
                that is otherwise subject to any enumerated consumer law 
                or any law for which authorities are transferred under 
                subtitle F or H.

    (e) Exclusion for Practice of Law.--
            (1)  In general.--Except as provided under paragraph (2), 
        the Bureau may not exercise any supervisory or enforcement 
        authority with respect to an activity engaged in by an attorney 
        as part of the practice of law under the laws of a State in 
        which the attorney is licensed to practice law.
            (2)  Rule of construction.--Paragraph (1) shall not be 
        construed so as to limit the exercise by the Bureau of any 
        supervisory, enforcement, or other authority regarding the 
        offering or provision of a consumer financial product or service 
        described in any subparagraph of section 1002(5)--
                    (A) that is not offered or provided as part of, or 
                incidental to, the practice of law, occurring 
                exclusively within the scope of the attorney-client 
                relationship; or
                    (B) that is otherwise offered or provided by the 
                attorney in question with respect to any consumer who is 
                not receiving legal advice or services from the attorney 
                in connection with such financial product or service.
            (3)  Existing authority.--Paragraph (1) shall not be 
        construed so as to limit the authority of the Bureau with 
        respect to any attorney, to the extent that such attorney is 
        otherwise subject to any of the enumerated consumer laws or the 
        authorities transferred under subtitle F or H.

[[Page 124 STAT. 2000]]

    (f) Exclusion for Persons Regulated by a State Insurance 
Regulator.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        any State insurance regulator to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by a State insurance regulator. Except as 
        provided in paragraph (2), the Bureau shall have no authority to 
        exercise any power to enforce this title with respect to a 
        person regulated by a State insurance regulator.
            (2) Description of activities.--Paragraph (1) does not apply 
        to any person described in such paragraph to the extent that 
        such person is engaged in the offering or provision of any 
        consumer financial product or service or is otherwise subject to 
        any enumerated consumer law or any law for which authorities are 
        transferred under subtitle F or H.
            (3) State insurance authority under gramm-leach-bliley.--
        Notwithstanding paragraph (2), the Bureau shall not exercise any 
        authorities that are granted a State insurance authority under 
        section 505(a)(6) of the Gramm-Leach-Bliley Act with respect to 
        a person regulated by a State insurance authority.

    (g) Exclusion for Employee Benefit and Compensation Plans and 
Certain Other Arrangements Under the Internal Revenue Code of 1986.--
            (1) Preservation of authority of other agencies.--No 
        provision of this title shall be construed as altering, 
        amending, or affecting the authority of the Secretary of the 
        Treasury, the Secretary of Labor, or the Commissioner of 
        Internal Revenue to adopt regulations, initiate enforcement 
        proceedings, or take any actions with respect to any specified 
        plan or arrangement.
            (2) Activities not constituting the offering or provision of 
        any consumer financial product or service.--For purposes of this 
        title, a person shall not be treated as having engaged in the 
        offering or provision of any consumer financial product or 
        service solely because such person is--
                    (A) a specified plan or arrangement;
                    (B) engaged in the activity of establishing or 
                maintaining, for the benefit of employees of such person 
                (or for members of an employee organization), any 
                specified plan or arrangement; or
                    (C) engaged in the activity of establishing or 
                maintaining a qualified tuition program under section 
                529(b)(1) of the Internal Revenue Code of 1986 offered 
                by a State or other prepaid tuition program offered by a 
                State.
            (3) Limitation on bureau authority.--
                    (A) In general.--Except as provided under 
                subparagraphs (B) and (C), the Bureau may not exercise 
                any rulemaking or enforcement authority with respect to 
                products or services that relate to any specified plan 
                or arrangement.
                    (B) Bureau action pursuant to agency request.--
                          (i) Agency request.--The Secretary and the 
                      Secretary of Labor may jointly issue a written 
                      request to the Bureau regarding implementation of 
                      appropriate consumer protection standards under 
                      this title with

[[Page 124 STAT. 2001]]

                      respect to the provision of services relating to 
                      any specified plan or arrangement.
                          (ii) Agency response.--In 
                      response <<NOTE: Deadline.>>  to a request by the 
                      Bureau, the Secretary and the Secretary of Labor 
                      shall jointly issue a written response, not later 
                      than 90 days after receipt of such request, to 
                      grant or deny the request of the Bureau regarding 
                      implementation of appropriate consumer protection 
                      standards under this title with respect to the 
                      provision of services relating to any specified 
                      plan or arrangement.
                          (iii) Scope of bureau action.--Subject to a 
                      request or response pursuant to clause (i) or 
                      clause (ii) by the agencies made under this 
                      subparagraph, the Bureau may exercise rulemaking 
                      authority, and may act to enforce a rule 
                      prescribed pursuant to such request or response, 
                      in accordance with the provisions of this title. A 
                      request or response made by the Secretary and the 
                      Secretary of Labor under this subparagraph shall 
                      describe the basis for, and scope of, appropriate 
                      consumer protection standards to be implemented 
                      under this title with respect to the provision of 
                      services relating to any specified plan or 
                      arrangement.
                    (C) Description of products or services.--To the 
                extent that a person engaged in providing products or 
                services relating to any specified plan or arrangement 
                is subject to any enumerated consumer law or any law for 
                which authorities are transferred under subtitle F or H, 
                subparagraph (A) shall not apply with respect to that 
                law.
            (4) <<NOTE: Definition.>>  Specified plan or arrangement.--
        For purposes of this subsection, the term ``specified plan or 
        arrangement'' means any plan, account, or arrangement described 
        in section 220, 223, 401(a), 403(a), 403(b), 408, 408A, 529, or 
        530 of the Internal Revenue Code of 1986, or any employee 
        benefit or compensation plan or arrangement, including a plan 
        that is subject to title I of the Employee Retirement Income 
        Security Act of 1974, or any prepaid tuition program offered by 
        a State.

    (h) Persons Regulated by a State Securities Commission.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        any securities commission (or any agency or office performing 
        like functions) of any State to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by any securities commission (or any 
        agency or office performing like functions) of any State. Except 
        as permitted in paragraph (2) and subsection (f), the Bureau 
        shall have no authority to exercise any power to enforce this 
        title with respect to a person regulated by any securities 
        commission (or any agency or office performing like functions) 
        of any State, but only to the extent that the person acts in 
        such regulated capacity.
            (2) Description of activities.--Paragraph (1) shall not 
        apply to any person to the extent such person is engaged in the 
        offering or provision of any consumer financial product or 
        service, or is otherwise subject to any enumerated consumer

[[Page 124 STAT. 2002]]

        law or any law for which authorities are transferred under 
        subtitle F or H.

    (i) Exclusion for Persons Regulated by the Commission.--
            (1) In general.--No provision of this title may be construed 
        as altering, amending, or affecting the authority of the 
        Commission to adopt rules, initiate enforcement proceedings, or 
        take any other action with respect to a person regulated by the 
        Commission. The Bureau shall have no authority to exercise any 
        power to enforce this title with respect to a person regulated 
        by the Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commission shall consult and coordinate, 
        where feasible, with the Bureau with respect to any rule 
        (including any advance notice of proposed rulemaking) regarding 
        an investment product or service that is the same type of 
        product as, or that competes directly with, a consumer financial 
        product or service that is subject to the jurisdiction of the 
        Bureau under this title or under any other 
        law. <<NOTE: Contracts. Procedures. Notification.>>  In carrying 
        out this paragraph, the agencies shall negotiate an agreement to 
        establish procedures for such coordination, including procedures 
        for providing advance notice to the Bureau when the Commission 
        is initiating a rulemaking.

    (j) Exclusion for Persons Regulated by the Commodity Futures Trading 
Commission.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        the Commodity Futures Trading Commission to adopt rules, 
        initiate enforcement proceedings, or take any other action with 
        respect to a person regulated by the Commodity Futures Trading 
        Commission. The Bureau shall have no authority to exercise any 
        power to enforce this title with respect to a person regulated 
        by the Commodity Futures Trading Commission.
            (2) Consultation and coordination.--Notwithstanding 
        paragraph (1), the Commodity Futures Trading Commission shall 
        consult and coordinate with the Bureau with respect to any rule 
        (including any advance notice of proposed rulemaking) regarding 
        a product or service that is the same type of product as, or 
        that competes directly with, a consumer financial product or 
        service that is subject to the jurisdiction of the Bureau under 
        this title or under any other law.

    (k) Exclusion for Persons Regulated by the Farm Credit 
Administration.--
            (1) In general.--No provision of this title shall be 
        construed as altering, amending, or affecting the authority of 
        the Farm Credit Administration to adopt rules, initiate 
        enforcement proceedings, or take any other action with respect 
        to a person regulated by the Farm Credit Administration. The 
        Bureau shall have no authority to exercise any power to enforce 
        this title with respect to a person regulated by the Farm Credit 
        Administration.
            (2) Definition.--For purposes of this subsection, the term 
        ``person regulated by the Farm Credit Administration'' means any 
        Farm Credit System institution that is chartered and subject to 
        the provisions of the Farm Credit Act of 1971 (12 U.S.C. 2001 et 
        seq.).

    (l) Exclusion for Activities Relating to Charitable Contributions.--

[[Page 124 STAT. 2003]]

            (1) In general.--The Director and the Bureau may not 
        exercise any rulemaking, supervisory, enforcement, or other 
        authority, including authority to order penalties, over any 
        activities related to the solicitation or making of voluntary 
        contributions to a tax-exempt organization as recognized by the 
        Internal Revenue Service, by any agent, volunteer, or 
        representative of such organizations to the extent the 
        organization, agent, volunteer, or representative thereof is 
        soliciting or providing advice, information, education, or 
        instruction to any donor or potential donor relating to a 
        contribution to the organization.
            (2) Limitation.--The exclusion in paragraph (1) does not 
        apply to other activities not described in paragraph (1) that 
        are the offering or provision of any consumer financial product 
        or service, or are otherwise subject to any enumerated consumer 
        law or any law for which authorities are transferred under 
        subtitle F or H.

    (m) Insurance.--The Bureau may not define as a financial product or 
service, by regulation or otherwise, engaging in the business of 
insurance.
    (n) Limited Authority of the Bureau.--Notwithstanding subsections 
(a) through (h) and (l), a person subject to or described in one or more 
of such provisions--
            (1) may be a service provider; and
            (2) may be subject to requests from, or requirements imposed 
        by, the Bureau regarding information in order to carry out the 
        responsibilities and functions of the Bureau and in accordance 
        with section 1022, 1052, or 1053.

    (o) No Authority To Impose Usury Limit.--No provision of this title 
shall be construed as conferring authority on the Bureau to establish a 
usury limit applicable to an extension of credit offered or made by a 
covered person to a consumer, unless explicitly authorized by law.
    (p) Attorney General.--No provision of this title, including section 
1024(c)(1), shall affect the authorities of the Attorney General under 
otherwise applicable provisions of law.
    (q) Secretary of the Treasury.--No provision of this title shall 
affect the authorities of the Secretary, including with respect to 
prescribing rules, initiating enforcement proceedings, or taking other 
actions with respect to a person that performs income tax preparation 
activities for consumers.
    (r) Deposit Insurance and Share Insurance.--Nothing in this title 
shall affect the authority of the Corporation under the Federal Deposit 
Insurance Act or the National Credit Union Administration Board under 
the Federal Credit Union Act as to matters related to deposit insurance 
and share insurance, respectively.
    (s) Fair Housing Act.--No provision of this title shall be construed 
as affecting any authority arising under the Fair Housing Act.
SEC. 1028. <<NOTE: 12 USC 5518.>>  AUTHORITY TO RESTRICT MANDATORY 
                          PRE-DISPUTE ARBITRATION.

    (a) Study and Report.--The Bureau shall conduct a study of, and 
shall provide a report to Congress concerning, the use of agreements 
providing for arbitration of any future dispute

[[Page 124 STAT. 2004]]

between covered persons and consumers in connection with the offering or 
providing of consumer financial products or services.
    (b) Further Authority.--The Bureau, by regulation, may prohibit or 
impose conditions or limitations on the use of an agreement between a 
covered person and a consumer for a consumer financial product or 
service providing for arbitration of any future dispute between the 
parties, if the Bureau finds that such a prohibition or imposition of 
conditions or limitations is in the public interest and for the 
protection of consumers. The findings in such rule shall be consistent 
with the study conducted under subsection (a).
    (c) Limitation.--The authority described in subsection (b) may not 
be construed to prohibit or restrict a consumer from entering into a 
voluntary arbitration agreement with a covered person after a dispute 
has arisen.
    (d) Effective Date.--Notwithstanding any <<NOTE: Applicability.>>  
other provision of law, any regulation prescribed by the Bureau under 
subsection (b) shall apply, consistent with the terms of the regulation, 
to any agreement between a consumer and a covered person entered into 
after the end of the 180-day period beginning on the effective date of 
the regulation, as established by the Bureau.
SEC. 1029. <<NOTE: 12 USC 5519.>>  EXCLUSION FOR AUTO DEALERS.

    (a) Sale, Servicing, and Leasing of Motor Vehicles Excluded.--Except 
as permitted in subsection (b), the Bureau may not exercise any 
rulemaking, supervisory, enforcement or any other authority, including 
any authority to order assessments, over a motor vehicle dealer that is 
predominantly engaged in the sale and servicing of motor vehicles, the 
leasing and servicing of motor vehicles, or both.
    (b) Certain Functions Excepted.--Subsection (a) shall not apply to 
any person, to the extent that such person--
            (1) provides consumers with any services related to 
        residential or commercial mortgages or self-financing 
        transactions involving real property;
            (2) operates a line of business--
                    (A) that involves the extension of retail credit or 
                retail leases involving motor vehicles; and
                    (B) in which--
                          (i) the extension of retail credit or retail 
                      leases are provided directly to consumers; and
                          (ii) the contract governing such extension of 
                      retail credit or retail leases is not routinely 
                      assigned to an unaffiliated third party finance or 
                      leasing source; or
            (3) offers or provides a consumer financial product or 
        service not involving or related to the sale, financing, 
        leasing, rental, repair, refurbishment, maintenance, or other 
        servicing of motor vehicles, motor vehicle parts, or any related 
        or ancillary product or service.

    (c) Preservation of Authorities of Other Agencies.--Except as 
provided in subsections (b) and (d), nothing in this title, including 
subtitle F, shall be construed as modifying, limiting, or superseding 
the operation of any provision of Federal law, or otherwise affecting 
the authority of the Board of Governors, the Federal Trade Commission, 
or any other Federal agency, with respect to a person described in 
subsection (a).
    (d) Federal Trade Commission Authority.--Notwithstanding section 18 
of the Federal Trade Commission Act, the Federal Trade

[[Page 124 STAT. 2005]]

Commission is authorized to prescribe rules under sections 5 and 
18(a)(1)(B) of the Federal Trade Commission Act. in accordance with 
section 553 of title 5, United States Code, with respect to a person 
described in subsection (a).
    (e) Coordination With Office Of Service Member Affairs.--The Board 
of Governors and the Federal Trade Commission shall coordinate with the 
Office of Service Member Affairs, to ensure that--
            (1) service members and their families are educated and 
        empowered to make better informed decisions regarding consumer 
        financial products and services offered by motor vehicle 
        dealers, with a focus on motor vehicle dealers in the proximity 
        of military installations; and
            (2) complaints by service members and their families 
        concerning such motor vehicle dealers are effectively monitored 
        and responded to, and where appropriate, enforcement action is 
        pursued by the authorized agencies.

    (f) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Motor vehicle.--The term ``motor vehicle'' means--
                    (A) any self-propelled vehicle designed for 
                transporting persons or property on a street, highway, 
                or other road;
                    (B) recreational boats and marine equipment;
                    (C) motorcycles;
                    (D) motor homes, recreational vehicle trailers, and 
                slide-in campers, as those terms are defined in sections 
                571.3 and 575.103 (d) of title 49, Code of Federal 
                Regulations, or any successor thereto; and
                    (E) other vehicles that are titled and sold through 
                dealers.
            (2) Motor vehicle dealer.--The term ``motor vehicle dealer'' 
        means any person or resident in the United States, or any 
        territory of the United States, who--
                    (A) is licensed by a State, a territory of the 
                United States, or the District of Columbia to engage in 
                the sale of motor vehicles; and
                    (B) takes title to, holds an ownership in, or takes 
                physical custody of motor vehicles.
SEC. 1029A. <<NOTE: 12 USC 5511 note.>>  EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer 
date, except that sections 1022, 1024, and 1025(e) shall become 
effective on the date of enactment of this Act.

                 Subtitle C--Specific Bureau Authorities

SEC. 1031. <<NOTE: 12 USC 5531.>>  PROHIBITING UNFAIR, DECEPTIVE, 
                          OR ABUSIVE ACTS OR PRACTICES.

    (a) In General.--The Bureau may take any action authorized under 
subtitle E to prevent a covered person or service provider from 
committing or engaging in an unfair, deceptive, or abusive act or 
practice under Federal law in connection with any transaction with a 
consumer for a consumer financial product or service, or the offering of 
a consumer financial product or service.
    (b) Rulemaking.--The Bureau may prescribe rules applicable to a 
covered person or service provider identifying as unlawful

[[Page 124 STAT. 2006]]

unfair, deceptive, or abusive acts or practices in connection with any 
transaction with a consumer for a consumer financial product or service, 
or the offering of a consumer financial product or service. Rules under 
this section may include requirements for the purpose of preventing such 
acts or practices.
    (c) Unfairness.--
            (1) In general.--The Bureau shall have no authority under 
        this section to declare an act or practice in connection with a 
        transaction with a consumer for a consumer financial product or 
        service, or the offering of a consumer financial product or 
        service, to be unlawful on the grounds that such act or practice 
        is unfair, unless the Bureau has a reasonable basis to conclude 
        that--
                    (A) the act or practice causes or is likely to cause 
                substantial injury to consumers which is not reasonably 
                avoidable by consumers; and
                    (B) such substantial injury is not outweighed by 
                countervailing benefits to consumers or to competition.
            (2) Consideration of public policies.--In determining 
        whether an act or practice is unfair, the Bureau may consider 
        established public policies as evidence to be considered with 
        all other evidence. Such public policy considerations may not 
        serve as a primary basis for such determination.

    (d) Abusive.--The Bureau shall have no authority under this section 
to declare an act or practice abusive in connection with the provision 
of a consumer financial product or service, unless the act or practice--
            (1) materially interferes with the ability of a consumer to 
        understand a term or condition of a consumer financial product 
        or service; or
            (2) takes unreasonable advantage of--
                    (A) a lack of understanding on the part of the 
                consumer of the material risks, costs, or conditions of 
                the product or service;
                    (B) the inability of the consumer to protect the 
                interests of the consumer in selecting or using a 
                consumer financial product or service; or
                    (C) the reasonable reliance by the consumer on a 
                covered person to act in the interests of the consumer.

    (e) Consultation.--In prescribing rules under this section, the 
Bureau shall consult with the Federal banking agencies, or other Federal 
agencies, as appropriate, concerning the consistency of the proposed 
rule with prudential, market, or systemic objectives administered by 
such agencies.
    (f) Consideration of Seasonal Income.--The rules of the Bureau under 
this section shall provide, with respect to an extension of credit 
secured by residential real estate or a dwelling, if documented income 
of the borrower, including income from a small business, is a repayment 
source for an extension of credit secured by residential real estate or 
a dwelling, the creditor may consider the seasonality and irregularity 
of such income in the underwriting of and scheduling of payments for 
such credit.
SEC. 1032. <<NOTE: 12 USC 5532.>>  DISCLOSURES.

    (a) In General.--The Bureau may prescribe rules to ensure that the 
features of any consumer financial product or service, both initially 
and over the term of the product or service, are

[[Page 124 STAT. 2007]]

fully, accurately, and effectively disclosed to consumers in a manner 
that permits consumers to understand the costs, benefits, and risks 
associated with the product or service, in light of the facts and 
circumstances.
    (b) Model Disclosures.--
            (1) In general.--Any final rule prescribed by the Bureau 
        under this section requiring disclosures may include a model 
        form that may be used at the option of the covered person for 
        provision of the required disclosures.
            (2) Format.--A model form issued pursuant to paragraph (1) 
        shall contain a clear and conspicuous disclosure that, at a 
        minimum--
                    (A) uses plain language comprehensible to consumers;
                    (B) contains a clear format and design, such as an 
                easily readable type font; and
                    (C) succinctly explains the information that must be 
                communicated to the consumer.
            (3) Consumer testing.--Any model form issued pursuant to 
        this subsection shall be validated through consumer testing.

    (c) Basis for Rulemaking.--In prescribing rules under this section, 
the Bureau shall consider available evidence about consumer awareness, 
understanding of, and responses to disclosures or communications about 
the risks, costs, and benefits of consumer financial products or 
services.
    (d) Safe Harbor.--Any covered person that uses a model form included 
with a rule issued under this section shall be deemed to be in 
compliance with the disclosure requirements of this section with respect 
to such model form.
    (e) Trial Disclosure Programs.--
            (1) In general.--The Bureau may permit a covered person to 
        conduct a trial program that is limited in time and scope, 
        subject to specified standards and procedures, for the purpose 
        of providing trial disclosures to consumers that are designed to 
        improve upon any model form issued pursuant to subsection 
        (b)(1), or any other model form issued to implement an 
        enumerated statute, as applicable.
            (2) Safe harbor.--The standards and procedures issued by the 
        Bureau shall be designed to encourage covered persons to conduct 
        trial disclosure programs. For the purposes of administering 
        this subsection, the Bureau may establish a limited period 
        during which a covered person conducting a trial disclosure 
        program shall be deemed to be in compliance with, or may be 
        exempted from, a requirement of a rule or an enumerated consumer 
        law.
            (3) Public disclosure.--The rules of the Bureau shall 
        provide for public disclosure of trial disclosure programs, 
        which public disclosure may be limited, to the extent necessary 
        to encourage covered persons to conduct effective trials.

    (f) Combined Mortgage Loan Disclosure.--Not 
later <<NOTE: Deadline. Public comment.>>  than 1 year after the 
designated transfer date, the Bureau shall propose for public comment 
rules and model disclosures that combine the disclosures required under 
the Truth in Lending Act and sections 4 and 5 of the Real Estate 
Settlement Procedures Act of 1974, into a single, integrated disclosure 
for mortgage loan transactions covered by those laws, unless the Bureau 
determines that any proposal issued by the Board of Governors and the 
Secretary of Housing and Urban Development carries out the same purpose.

[[Page 124 STAT. 2008]]

SEC. 1033. <<NOTE: 12 USC 5533.>>  CONSUMER RIGHTS TO ACCESS 
                          INFORMATION.

    (a) In General.--Subject to rules prescribed by the Bureau, a 
covered person shall make available to a consumer, upon request, 
information in the control or possession of the covered person 
concerning the consumer financial product or service that the consumer 
obtained from such covered person, including information relating to any 
transaction, series of transactions, or to the account including costs, 
charges and usage data. The information shall be made available in an 
electronic form usable by consumers.
    (b) Exceptions.--A covered person may not be required by this 
section to make available to the consumer--
            (1) any confidential commercial information, including an 
        algorithm used to derive credit scores or other risk scores or 
        predictors;
            (2) any information collected by the covered person for the 
        purpose of preventing fraud or money laundering, or detecting, 
        or making any report regarding other unlawful or potentially 
        unlawful conduct;
            (3) any information required to be kept confidential by any 
        other provision of law; or
            (4) any information that the covered person cannot retrieve 
        in the ordinary course of its business with respect to that 
        information.

    (c) No Duty To Maintain Records.--Nothing in this section shall be 
construed to impose any duty on a covered person to maintain or keep any 
information about a consumer.
    (d) Standardized Formats for Data.--The Bureau, by rule, shall 
prescribe standards applicable to covered persons to promote the 
development and use of standardized formats for information, including 
through the use of machine readable files, to be made available to 
consumers under this section.
    (e) Consultation.--The Bureau shall, when prescribing any rule under 
this section, consult with the Federal banking agencies and the Federal 
Trade Commission to ensure, to the extent appropriate, that the rules--
            (1) impose substantively similar requirements on covered 
        persons;
            (2) take into account conditions under which covered persons 
        do business both in the United States and in other countries; 
        and
            (3) do not require or promote the use of any particular 
        technology in order to develop systems for compliance.
SEC. 1034. <<NOTE: 12 USC 5534.>>  RESPONSE TO CONSUMER COMPLAINTS 
                          AND INQUIRIES.

    (a) <<NOTE: Procedures.>>  Timely Regulator Response to Consumers.--
The Bureau shall establish, in consultation with the appropriate Federal 
regulatory agencies, reasonable procedures to provide a timely response 
to consumers, in writing where appropriate, to complaints against, or 
inquiries concerning, a covered person, including--
            (1) steps that have been taken by the regulator in response 
        to the complaint or inquiry of the consumer;
            (2) any responses received by the regulator from the covered 
        person; and
            (3) any follow-up actions or planned follow-up actions by 
        the regulator in response to the complaint or inquiry of the 
        consumer.

[[Page 124 STAT. 2009]]

    (b) Timely Response to Regulator by Covered Person.--A covered 
person subject to supervision and primary enforcement by the Bureau 
pursuant to section 1025 shall provide a timely response, in writing 
where appropriate, to the Bureau, the prudential regulators, and any 
other agency having jurisdiction over such covered person concerning a 
consumer complaint or inquiry, including--
            (1) steps that have been taken by the covered person to 
        respond to the complaint or inquiry of the consumer;
            (2) responses received by the covered person from the 
        consumer; and
            (3) follow-up actions or planned follow-up actions by the 
        covered person to respond to the complaint or inquiry of the 
        consumer.

    (c) Provision of Information to Consumers.--
            (1) In general.--A covered <<NOTE: Compliance.>>  person 
        subject to supervision and primary enforcement by the Bureau 
        pursuant to section 1025 shall, in a timely manner, comply with 
        a consumer request for information in the control or possession 
        of such covered person concerning the consumer financial product 
        or service that the consumer obtained from such covered person, 
        including supporting written documentation, concerning the 
        account of the consumer.
            (2) Exceptions.--A covered person subject to supervision and 
        primary enforcement by the Bureau pursuant to section 1025, a 
        prudential regulator, and any other agency having jurisdiction 
        over a covered person subject to supervision and primary 
        enforcement by the Bureau pursuant to section 1025 may not be 
        required by this section to make available to the consumer--
                    (A) any confidential commercial information, 
                including an algorithm used to derive credit scores or 
                other risk scores or predictors;
                    (B) any information collected by the covered person 
                for the purpose of preventing fraud or money laundering, 
                or detecting or making any report regarding other 
                unlawful or potentially unlawful conduct;
                    (C) any information required to be kept confidential 
                by any other provision of law; or
                    (D) any nonpublic or confidential information, 
                including confidential supervisory information.

    (d) Agreements With Other Agencies.--The 
Bureau <<NOTE: Memorandum.>>  shall enter into a memorandum of 
understanding with any affected Federal regulatory agency regarding 
procedures by which any covered person, and the prudential regulators, 
and any other agency having jurisdiction over a covered person, 
including the Secretary of the Department of Housing and Urban 
Development and the Secretary of Education, shall comply with this 
section.
SEC. 1035. <<NOTE: 12 USC 5535.>>  PRIVATE EDUCATION LOAN 
                          OMBUDSMAN.

    (a) Establishment.--The Secretary, <<NOTE: Designation.>>  in 
consultation with the Director, shall designate a Private Education Loan 
Ombudsman (in this section referred to as the ``Ombudsman'') within the 
Bureau, to provide timely assistance to borrowers of private education 
loans.

    (b) Public Information.--The Secretary and the Director shall 
disseminate information about the availability and functions of the 
Ombudsman to borrowers and potential borrowers, as well

[[Page 124 STAT. 2010]]

as institutions of higher education, lenders, guaranty agencies, loan 
servicers, and other participants in private education student loan 
programs.
    (c) Functions of Ombudsman.--The Ombudsman designated under this 
subsection shall--
            (1) in accordance with regulations of the Director, receive, 
        review, and attempt to resolve informally complaints from 
        borrowers of loans described in subsection (a), including, as 
        appropriate, attempts to resolve such complaints in 
        collaboration with the Department of Education and with 
        institutions of higher education, lenders, guaranty agencies, 
        loan servicers, and other participants in private education loan 
        programs;
            (2) <<NOTE: Deadline. Memorandum.>>  not later than 90 days 
        after the designated transfer date, establish a memorandum of 
        understanding with the student loan ombudsman established under 
        section 141(f) of the Higher Education Act of 1965 (20 U.S.C. 
        1018(f)), to ensure coordination in providing assistance to and 
        serving borrowers seeking to resolve complaints related to their 
        private education or Federal student loans;
            (3) compile and analyze data on borrower complaints 
        regarding private education loans; and
            (4) <<NOTE: Recommenda- tions.>>  make appropriate 
        recommendations to the Director, the Secretary, the Secretary of 
        Education, the Committee on Banking, Housing, and Urban Affairs 
        and the Committee on Health, Education, Labor, and Pensions of 
        the Senate and the Committee on Financial Services and the 
        Committee on Education and Labor of the House of 
        Representatives.

    (d) Annual Reports.--
            (1) In general.--The Ombudsman shall prepare an annual 
        report that describes the activities, and evaluates the 
        effectiveness of the Ombudsman during the preceding year.
            (2) Submission.--The report required by paragraph (1) shall 
        be submitted on the same date annually to the Secretary, the 
        Secretary of Education, the Committee on Banking, Housing, and 
        Urban Affairs and the Committee on Health, Education, Labor, and 
        Pensions of the Senate and the Committee on Financial Services 
        and the Committee on Education and Labor of the House of 
        Representatives.

    (e) Definitions.--For purposes of this section, the terms ``private 
education loan'' and ``institution of higher education'' have the same 
meanings as in section 140 of the Truth in Lending Act (15 U.S.C. 1650).
SEC. 1036. <<NOTE: 12 USC 5536.>>  PROHIBITED ACTS.

    (a) In General.--It shall be unlawful for--
            (1) any covered person or service provider--
                    (A) to offer or provide to a consumer any financial 
                product or service not in conformity with Federal 
                consumer financial law, or otherwise commit any act or 
                omission in violation of a Federal consumer financial 
                law; or
                    (B) to engage in any unfair, deceptive, or abusive 
                act or practice;
            (2) any covered person or service provider to fail or 
        refuse, as required by Federal consumer financial law, or any 
        rule or order issued by the Bureau thereunder--
                    (A) to permit access to or copying of records;
                    (B) to establish or maintain records; or

[[Page 124 STAT. 2011]]

                    (C) to make reports or provide information to the 
                Bureau; or
            (3) any person to knowingly or recklessly provide 
        substantial assistance to a covered person or service provider 
        in violation of the provisions of section 1031, or any rule or 
        order issued thereunder, and notwithstanding any provision of 
        this title, the provider of such substantial assistance shall be 
        deemed to be in violation of that section to the same extent as 
        the person to whom such assistance is provided.

    (b) Exception.--No person shall be held to have violated subsection 
(a)(1) solely by virtue of providing or selling time or space to a 
covered person or service provider placing an advertisement.
SEC. 1037. <<NOTE: 12 USC 5531 note.>>  EFFECTIVE DATE.

    This subtitle shall take effect on the designated transfer date.

                  Subtitle D--Preservation of State Law

SEC. 1041. <<NOTE: 12 USC 5551.>>  RELATION TO STATE LAW.

    (a) In General.--
            (1) Rule of construction.--This title, other than sections 
        1044 through 1048, may not be construed as annulling, altering, 
        or affecting, or exempting any person subject to the provisions 
        of this title from complying with, the statutes, regulations, 
        orders, or interpretations in effect in any State, except to the 
        extent that any such provision of law is inconsistent with the 
        provisions of this title, and then only to the extent of the 
        inconsistency.
            (2) Greater protection under state law.--For purposes of 
        this subsection, a statute, regulation, order, or interpretation 
        in effect in any State is not inconsistent with the provisions 
        of this title if the protection that such statute, regulation, 
        order, or interpretation affords to consumers is greater than 
        the protection provided under this title. A determination 
        regarding whether a statute, regulation, order, or 
        interpretation in effect in any State is inconsistent with the 
        provisions of this title may be made by the Bureau on its own 
        motion or in response to a nonfrivolous petition initiated by 
        any interested person.

    (b) Relation to Other Provisions of Enumerated Consumer Laws That 
Relate to State Law.--No provision of this title, except as provided in 
section 1083, shall be construed as modifying, limiting, or superseding 
the operation of any provision of an enumerated consumer law that 
relates to the application of a law in effect in any State with respect 
to such Federal law.
    (c) Additional Consumer Protection Regulations in Response to State 
Action.--
            (1) Notice of proposed rule required.--The Bureau shall 
        issue a notice of proposed rulemaking whenever a majority of the 
        States has enacted a resolution in support of the establishment 
        or modification of a consumer protection regulation by the 
        Bureau.
            (2) Bureau considerations required for issuance of final 
        regulation.--Before prescribing a final regulation based upon a 
        notice issued pursuant to paragraph (1), the Bureau shall take 
        into account whether--

[[Page 124 STAT. 2012]]

                    (A) the proposed regulation would afford greater 
                protection to consumers than any existing regulation;
                    (B) the intended benefits of the proposed regulation 
                for consumers would outweigh any increased costs or 
                inconveniences for consumers, and would not discriminate 
                unfairly against any category or class of consumers; and
                    (C) a Federal banking agency has advised that the 
                proposed regulation is likely to present an unacceptable 
                safety and soundness risk to insured depository 
                institutions.
            (3) Explanation of considerations.--The Bureau--
                    (A) shall include a discussion of the considerations 
                required in paragraph (2) in the Federal Register notice 
                of a final regulation prescribed pursuant to this 
                subsection; and
                    (B) <<NOTE: Federal Register, publication.>>  
                whenever the Bureau determines not to prescribe a final 
                regulation, shall publish an explanation of such 
                determination in the Federal Register, and provide a 
                copy of such explanation to each State that enacted a 
                resolution in support of the proposed regulation, the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate, and the Committee on Financial Services of the 
                House of Representatives.
            (4) Reservation of authority.--No provision of this 
        subsection shall be construed as limiting or restricting the 
        authority of the Bureau to enhance consumer protection standards 
        established pursuant to this title in response to its own motion 
        or in response to a request by any other interested person.
            (5) Rule of construction.--No provision of this subsection 
        shall be construed as exempting the Bureau from complying with 
        subchapter II of chapter 5 of title 5, United States Code.
            (6) Definition.--For purposes of this subsection, the term 
        ``consumer protection regulation'' means a regulation that the 
        Bureau is authorized to prescribe under the Federal consumer 
        financial laws.
SEC. 1042. <<NOTE: 12 USC 5552.>>  PRESERVATION OF ENFORCEMENT 
                          POWERS OF STATES.

    (a) In General.--
            (1) Action by state.--Except as provided in paragraph (2), 
        the attorney general (or the equivalent thereof) of any State 
        may bring a civil action in the name of such State in any 
        district court of the United States in that State or in State 
        court that is located in that State and that has jurisdiction 
        over the defendant, to enforce provisions of this title or 
        regulations issued under this title, and to secure remedies 
        under provisions of this title or remedies otherwise provided 
        under other law. A State regulator may bring a civil action or 
        other appropriate proceeding to enforce the provisions of this 
        title or regulations issued under this title with respect to any 
        entity that is State-chartered, incorporated, licensed, or 
        otherwise authorized to do business under State law (except as 
        provided in paragraph (2)), and to secure remedies under 
        provisions of this title or remedies otherwise provided under 
        other provisions of law with respect to such an entity.

[[Page 124 STAT. 2013]]

            (2) Action by state against national bank or federal savings 
        association to enforce rules.--
                    (A) In general.--Except as permitted under 
                subparagraph (B), the attorney general (or equivalent 
                thereof) of any State may not bring a civil action in 
                the name of such State against a national bank or 
                Federal savings association to enforce a provision of 
                this title.
                    (B) Enforcement of rules permitted.--The attorney 
                general (or the equivalent thereof) of any State may 
                bring a civil action in the name of such State against a 
                national bank or Federal savings association in any 
                district court of the United States in the State or in 
                State court that is located in that State and that has 
                jurisdiction over the defendant to enforce a regulation 
                prescribed by the Bureau under a provision of this title 
                and to secure remedies under provisions of this title or 
                remedies otherwise provided under other law.
            (3) Rule of construction.--No provision of this title shall 
        be construed as modifying, limiting, or superseding the 
        operation of any provision of an enumerated consumer law that 
        relates to the authority of a State attorney general or State 
        regulator to enforce such Federal law.

    (b) Consultation Required.--
            (1) <<NOTE: Records.>>  Notice.--
                    (A) In general.--Before initiating any action in a 
                court or other administrative or regulatory proceeding 
                against any covered person as authorized by subsection 
                (a) to enforce any provision of this title, including 
                any regulation prescribed by the Bureau under this 
                title, a State attorney general or State regulator shall 
                timely provide a copy of the complete complaint to be 
                filed and written notice describing such action or 
                proceeding to the Bureau and the prudential regulator, 
                if any, or the designee thereof.
                    (B) Emergency action.--If prior notice is not 
                practicable, the State attorney general or State 
                regulator shall provide a copy of the complete complaint 
                and the notice to the Bureau and the prudential 
                regulator, if any, immediately upon instituting the 
                action or proceeding.
                    (C) Contents of notice.--The notification required 
                under this paragraph shall, at a minimum, describe--
                          (i) the identity of the parties;
                          (ii) the alleged facts underlying the 
                      proceeding; and
                          (iii) whether there may be a need to 
                      coordinate the prosecution of the proceeding so as 
                      not to interfere with any action, including any 
                      rulemaking, undertaken by the Bureau, a prudential 
                      regulator, or another Federal agency.
            (2) Bureau response.--In any action described in paragraph 
        (1), the Bureau may--
                    (A) intervene in the action as a party;
                    (B) upon intervening--
                          (i) remove the action to the appropriate 
                      United States district court, if the action was 
                      not originally brought there; and

[[Page 124 STAT. 2014]]

                          (ii) be heard on all matters arising in the 
                      action; and
                    (C) appeal any order or judgment, to the same extent 
                as any other party in the proceeding may.

    (c) Regulations.--The Bureau shall prescribe regulations to 
implement the requirements of this section and, from time to time, 
provide guidance in order to further coordinate actions with the State 
attorneys general and other regulators.
    (d) Preservation of State Authority.--
            (1) State claims.--No provision of this section shall be 
        construed as altering, limiting, or affecting the authority of a 
        State attorney general or any other regulatory or enforcement 
        agency or authority to bring an action or other regulatory 
        proceeding arising solely under the law in effect in that State.
            (2) State securities regulators.--No provision of this title 
        shall be construed as altering, limiting, or affecting the 
        authority of a State securities commission (or any agency or 
        office performing like functions) under State law to adopt 
        rules, initiate enforcement proceedings, or take any other 
        action with respect to a person regulated by such commission or 
        authority.
            (3) State insurance regulators.--No provision of this title 
        shall be construed as altering, limiting, or affecting the 
        authority of a State insurance commission or State insurance 
        regulator under State law to adopt rules, initiate enforcement 
        proceedings, or take any other action with respect to a person 
        regulated by such commission or regulator.
SEC. 1043. <<NOTE: 12 USC 5553.>>  PRESERVATION OF EXISTING 
                          CONTRACTS.

    This title, and regulations, orders, guidance, and interpretations 
prescribed, issued, or established by the Bureau, shall not be construed 
to alter or affect the applicability of any regulation, order, guidance, 
or interpretation prescribed, issued, and established by the Comptroller 
of the Currency or the Director of the Office of Thrift Supervision 
regarding the applicability of State law under Federal banking law to 
any contract entered into on or before the date of enactment of this 
Act, by national banks, Federal savings associations, or subsidiaries 
thereof that are regulated and supervised by the Comptroller of the 
Currency or the Director of the Office of Thrift Supervision, 
respectively.
SEC. 1044. STATE LAW PREEMPTION STANDARDS FOR NATIONAL BANKS AND 
                          SUBSIDIARIES CLARIFIED.

    (a) In General.--Chapter one of title LXII of the Revised Statutes 
of the United States (12 U.S.C. 21 et seq.) is amended by inserting 
after section 5136B the following new section:
``SEC. 5136C. <<NOTE: 12 USC 25b.>>  STATE LAW PREEMPTION 
                            STANDARDS FOR NATIONAL BANKS AND 
                            SUBSIDIARIES CLARIFIED.

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) National bank.--The term `national bank' includes--
                    ``(A) any bank organized under the laws of the 
                United States; and
                    ``(B) any Federal branch established in accordance 
                with the International Banking Act of 1978.
            ``(2) State consumer financial laws.--The term `State 
        consumer financial law' means a State law that does not directly 
        or indirectly discriminate against national banks and that

[[Page 124 STAT. 2015]]

        directly and specifically regulates the manner, content, or 
        terms and conditions of any financial transaction (as may be 
        authorized for national banks to engage in), or any account 
        related thereto, with respect to a consumer.
            ``(3) Other definitions.--The terms `affiliate', 
        `subsidiary', `includes', and `including' have the same meanings 
        as in section 3 of the Federal Deposit Insurance Act.

    ``(b) Preemption Standard.--
            ``(1) In general.--State consumer financial laws are 
        preempted, only if--
                    ``(A) application of a State consumer financial law 
                would have a discriminatory effect on national banks, in 
                comparison with the effect of the law on a bank 
                chartered by that State;
                    ``(B) in accordance with the legal standard for 
                preemption in the decision of the Supreme Court of the 
                United States in Barnett Bank of Marion County, N. A. v. 
                Nelson, Florida Insurance Commissioner, et al., 517 U.S. 
                25 (1996), the State consumer financial law prevents or 
                significantly interferes with the exercise by the 
                national bank of its powers; and any preemption 
                determination under this subparagraph may be made by a 
                court, or by regulation or order of the Comptroller of 
                the Currency on a case-by-case basis, in accordance with 
                applicable law; or
                    ``(C) the State consumer financial law is preempted 
                by a provision of Federal law other than this title.
            ``(2) Savings clause.--This title and section 24 of the 
        Federal Reserve Act (12 U.S.C. 371) do not preempt, annul, or 
        affect the applicability of any State law to any subsidiary or 
        affiliate of a national bank (other than a subsidiary or 
        affiliate that is chartered as a national bank).
            ``(3) Case-by-case basis.--
                    ``(A) Definition.--As used in this section the term 
                `case-by-case basis' refers to a determination pursuant 
                to this section made by the Comptroller concerning the 
                impact of a particular State consumer financial law on 
                any national bank that is subject to that law, or the 
                law of any other State with substantively equivalent 
                terms.
                    ``(B) Consultation.--When making a determination on 
                a case-by-case basis that a State consumer financial law 
                of another State has substantively equivalent terms as 
                one that the Comptroller is preempting, the Comptroller 
                shall first consult with the Bureau of Consumer 
                Financial Protection and shall take the views of the 
                Bureau into account when making the determination.
            ``(4) Rule of construction.--This title does not occupy the 
        field in any area of State law.
            ``(5) Standards of review.--
                    ``(A) Preemption.--A court reviewing any 
                determinations made by the Comptroller regarding 
                preemption of a State law by this title or section 24 of 
                the Federal Reserve Act (12 U.S.C. 371) shall assess the 
                validity of such determinations, depending upon the 
                thoroughness evident in the consideration of the agency, 
                the validity of the reasoning of the agency, the 
                consistency with other valid determinations made by the 
                agency, and other factors

[[Page 124 STAT. 2016]]

                which the court finds persuasive and relevant to its 
                decision.
                    ``(B) Savings clause.--Except as provided in 
                subparagraph (A), nothing in this section shall affect 
                the deference that a court may afford to the Comptroller 
                in making determinations regarding the meaning or 
                interpretation of title LXII of the Revised Statutes of 
                the United States or other Federal laws.
            ``(6) Comptroller determination not delegable.--Any 
        regulation, order, or determination made by the Comptroller of 
        the Currency under paragraph (1)(B) shall be made by the 
        Comptroller, and shall not be delegable to another officer or 
        employee of the Comptroller of the Currency.

    ``(c) Substantial Evidence.--No regulation or order of the 
Comptroller of the Currency prescribed under subsection (b)(1)(B), shall 
be interpreted or applied so as to invalidate, or otherwise declare 
inapplicable to a national bank, the provision of the State consumer 
financial law, unless substantial evidence, made on the record of the 
proceeding, supports the specific finding regarding the preemption of 
such provision in accordance with the legal standard of the decision of 
the Supreme Court of the United States in Barnett Bank of Marion County, 
N.A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 
(1996).
    ``(d) Periodic Review of Preemption Determinations.--
            ``(1) In general.--The Comptroller <<NOTE: Notice. Public 
        comment.>>  of the Currency shall periodically conduct a review, 
        through notice and public comment, of each determination that a 
        provision of Federal law preempts a State consumer financial 
        law. <<NOTE: Deadline.>>  The agency shall conduct such review 
        within the 5-year period after prescribing or otherwise issuing 
        such determination, and at least once during each 5-year period 
        thereafter. <<NOTE: Federal Register, publication.>>  After 
        conducting the review of, and inspecting the comments made on, 
        the determination, the agency shall publish a notice in the 
        Federal Register announcing the decision to continue or rescind 
        the determination or a proposal to amend the determination. Any 
        such notice of a proposal to amend a determination and the 
        subsequent resolution of such proposal shall comply with the 
        procedures set forth in subsections (a) and (b) of section 5244 
        of the Revised Statutes of the United States (12 U.S.C. 43 (a), 
        (b)).
            ``(2) Reports to congress.--At the time of issuing a review 
        conducted under paragraph (1), the Comptroller of the Currency 
        shall submit a report regarding such review to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate. 
        The report submitted to the respective committees shall address 
        whether the agency intends to continue, rescind, or propose to 
        amend any determination that a provision of Federal law preempts 
        a State consumer financial law, and the reasons therefor.

    ``(e) Application of State Consumer Financial Law to Subsidiaries 
and Affiliates.--Notwithstanding any provision of this title or section 
24 of Federal Reserve Act (12 U.S.C. 371), a State consumer financial 
law shall apply to a subsidiary or affiliate of a national bank (other 
than a subsidiary or affiliate that is chartered as a national bank) to 
the same extent that

[[Page 124 STAT. 2017]]

the State consumer financial law applies to any person, corporation, or 
other entity subject to such State law.
    ``(f) Preservation of Powers Related to Charging Interest.--No 
provision of this title shall be construed as altering or otherwise 
affecting the authority conferred by section 5197 of the Revised 
Statutes of the United States (12 U.S.C. 85) for the charging of 
interest by a national bank at the rate allowed by the laws of the 
State, territory, or district where the bank is located, including with 
respect to the meaning of `interest' under such provision.
    ``(g) Transparency of OCC Preemption Determinations.--The 
Comptroller <<NOTE: Publication. Deadline. Records.>>  of the Currency 
shall publish and update no less frequently than quarterly, a list of 
preemption determinations by the Comptroller of the Currency then in 
effect that identifies the activities and practices covered by each 
determination and the requirements and constraints determined to be 
preempted.''.

    (b) Clerical Amendment.--The table of sections for chapter one of 
title LXII of the Revised Statutes of the United States is amended by 
inserting after the item relating to section 5136B the following new 
item:

``Sec. 5136C. State law preemption standards for national banks and 
           subsidiaries clarified.''.

SEC. 1045. CLARIFICATION OF LAW APPLICABLE TO NONDEPOSITORY 
                          INSTITUTION SUBSIDIARIES.

    Section 5136C of the Revised Statutes of the United <<NOTE: 12 USC 
25b.>>  States (as added by this subtitle) is amended by adding at the 
end the following:

    ``(h) Clarification of Law Applicable to Nondepository Institution 
Subsidiaries and Affiliates of National Banks.--
            ``(1) Definitions.--For purposes of this subsection, the 
        terms `depository institution', `subsidiary', and `affiliate' 
        have the same meanings as in section 3 of the Federal Deposit 
        Insurance Act.
            ``(2) Rule of construction.--No provision of this title or 
        section 24 of the Federal Reserve Act (12 U.S.C. 371) shall be 
        construed as preempting, annulling, or affecting the 
        applicability of State law to any subsidiary, affiliate, or 
        agent of a national bank (other than a subsidiary, affiliate, or 
        agent that is chartered as a national bank).''.
SEC. 1046. STATE LAW PREEMPTION STANDARDS FOR FEDERAL SAVINGS 
                          ASSOCIATIONS AND SUBSIDIARIES CLARIFIED.

    (a) In General.--The Home Owners' Loan Act (12 U.S.C. 1461 et seq.) 
is amended by inserting after section 5 the following new section:
``SEC. 6. <<NOTE: 12 USC 1465.>>  STATE LAW PREEMPTION STANDARDS 
                    FOR FEDERAL SAVINGS ASSOCIATIONS CLARIFIED.

    ``(a) In General.--Any determination by a court or by the Director 
or any successor officer or agency regarding the relation of State law 
to a provision of this Act or any regulation or order prescribed under 
this Act shall be made in accordance with the laws and legal standards 
applicable to national banks regarding the preemption of State law.
    ``(b) Principles of Conflict Preemption Applicable.--Notwithstanding 
the authorities granted under sections 4 and 5, this Act does not occupy 
the field in any area of State law.''.

[[Page 124 STAT. 2018]]

    (b) Clerical Amendment.--The table of sections for the Home Owners' 
Loan Act (12 U.S.C. 1461 et seq.) is amended by striking the item 
relating to section 6 and inserting the following new item:

        ``Sec. 6. State law preemption standards for Federal savings 
                            associations and subsidiaries clarified.''.
SEC. 1047. VISITORIAL STANDARDS FOR NATIONAL BANKS AND SAVINGS 
                          ASSOCIATIONS.

    (a) National Banks.--Section 5136C of the Revised Statutes of the 
United States <<NOTE: 12 USC 25b.>>  (as added by this subtitle) is 
amended by adding at the end the following:

    ``(i) Visitorial Powers.--
            ``(1) In general.--In accordance with the decision of the 
        Supreme Court of the United States in Cuomo v. Clearing House 
        Assn., L. L. C. (129 S. Ct. 2710 (2009)), no provision of this 
        title which relates to visitorial powers or otherwise limits or 
        restricts the visitorial authority to which any national bank is 
        subject shall be construed as limiting or restricting the 
        authority of any attorney general (or other chief law 
        enforcement officer) of any State to bring an action against a 
        national bank in a court of appropriate jurisdiction to enforce 
        an applicable law and to seek relief as authorized by such law.

    ``(j) Enforcement Actions.--The ability of the Comptroller of the 
Currency to bring an enforcement action under this title or section 5 of 
the Federal Trade Commission Act does not preclude any private party 
from enforcing rights granted under Federal or State law in the 
courts.''.
    (b) Savings Associations.--Section 6 of the Home Owners' Loan 
Act <<NOTE: 12 USC 1465.>>  (as added by this title) is amended by 
adding at the end the following:

    ``(c) Visitorial Powers.--The provisions <<NOTE: Applicability.>>  
of sections 5136C(i) of the Revised Statutes of the United States shall 
apply to Federal savings associations, and any subsidiary thereof, to 
the same extent and in the same manner as if such savings associations, 
or subsidiaries thereof, were national banks or subsidiaries of national 
banks, respectively.''

    ``(d) Enforcement Actions.--The ability of the Comptroller of the 
Currency to bring an enforcement action under this Act or section 5 of 
the Federal Trade Commission Act does not preclude any private party 
from enforcing rights granted under Federal or State law in the 
courts.''.
SEC. 1048. <<NOTE: 12 USC 5551 note.>>  EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer 
date.

                     Subtitle E--Enforcement Powers

SEC. 1051. <<NOTE: 12 USC 5561.>>  DEFINITIONS.

    For purposes of this subtitle, the following definitions shall 
apply:
            (1) Bureau investigation.--The term ``Bureau investigation'' 
        means any inquiry conducted by a Bureau investigator for the 
        purpose of ascertaining whether any person is or has

[[Page 124 STAT. 2019]]

        been engaged in any conduct that is a violation, as defined in 
        this section.
            (2) Bureau investigator.--The term ``Bureau investigator'' 
        means any attorney or investigator employed by the Bureau who is 
        charged with the duty of enforcing or carrying into effect any 
        Federal consumer financial law.
            (3) Custodian.--The term ``custodian'' means the custodian 
        or any deputy custodian designated by the Bureau.
            (4) Documentary material.--The term ``documentary material'' 
        includes the original or any copy of any book, document, record, 
        report, memorandum, paper, communication, tabulation, chart, 
        logs, electronic files, or other data or data compilations 
        stored in any medium.
            (5) Violation.--The term ``violation'' means any act or 
        omission that, if proved, would constitute a violation of any 
        provision of Federal consumer financial law.
SEC. 1052. <<NOTE: 12 USC 5562.>>  INVESTIGATIONS AND 
                          ADMINISTRATIVE DISCOVERY.

    (a) Joint Investigations.--
            (1) In general.--The Bureau or, where appropriate, a Bureau 
        investigator, may engage in joint investigations and requests 
        for information, as authorized under this title.
            (2) Fair lending.--The authority under paragraph (1) 
        includes matters relating to fair lending, and where 
        appropriate, joint investigations with, and requests for 
        information from, the Secretary of Housing and Urban 
        Development, the Attorney General of the United States, or both.

    (b) Subpoenas.--
            (1) In general.--The Bureau or a Bureau investigator may 
        issue subpoenas for the attendance and testimony of witnesses 
        and the production of relevant papers, books, documents, or 
        other material in connection with hearings under this title.
            (2) Failure to obey.--In the case of contumacy or refusal to 
        obey a subpoena issued pursuant to this paragraph and served 
        upon any person, the district court of the United States for any 
        district in which such person is found, resides, or transacts 
        business, upon application by the Bureau or a Bureau 
        investigator and after notice to such person, may issue an order 
        requiring such person to appear and give testimony or to appear 
        and produce documents or other material.
            (3) Contempt.--Any failure to obey an order of the court 
        under this subsection may be punished by the court as a contempt 
        thereof.

    (c) Demands.--
            (1) In general.--Whenever the Bureau has reason to believe 
        that any person may be in possession, custody, or control of any 
        documentary material or tangible things, or may have any 
        information, relevant to a violation, the Bureau may, before the 
        institution of any proceedings under the Federal consumer 
        financial law, issue in writing, and cause to be served upon 
        such person, a civil investigative demand requiring such person 
        to--
                    (A) produce such documentary material for inspection 
                and copying or reproduction in the form or medium 
                requested by the Bureau;
                    (B) submit such tangible things;
                    (C) file written reports or answers to questions;

[[Page 124 STAT. 2020]]

                    (D) give oral testimony concerning documentary 
                material, tangible things, or other information; or
                    (E) furnish any combination of such material, 
                answers, or testimony.
            (2) Requirements.--Each civil investigative demand shall 
        state the nature of the conduct constituting the alleged 
        violation which is under investigation and the provision of law 
        applicable to such violation.
            (3) Production of documents.--Each civil investigative 
        demand for the production of documentary material shall--
                    (A) describe each class of documentary material to 
                be produced under the demand with such definiteness and 
                certainty as to permit such material to be fairly 
                identified;
                    (B) prescribe a return date or dates which will 
                provide a reasonable period of time within which the 
                material so demanded may be assembled and made available 
                for inspection and copying or reproduction; and
                    (C) identify the custodian to whom such material 
                shall be made available.
            (4) Production of things.--Each civil investigative demand 
        for the submission of tangible things shall--
                    (A) describe each class of tangible things to be 
                submitted under the demand with such definiteness and 
                certainty as to permit such things to be fairly 
                identified;
                    (B) prescribe a return date or dates which will 
                provide a reasonable period of time within which the 
                things so demanded may be assembled and submitted; and
                    (C) identify the custodian to whom such things shall 
                be submitted.
            (5) Demand for written reports or answers.--Each civil 
        investigative demand for written reports or answers to questions 
        shall--
                    (A) propound with definiteness and certainty the 
                reports to be produced or the questions to be answered;
                    (B) prescribe a date or dates at which time written 
                reports or answers to questions shall be submitted; and
                    (C) identify the custodian to whom such reports or 
                answers shall be submitted.
            (6) Oral testimony.--Each civil investigative demand for the 
        giving of oral testimony shall--
                    (A) prescribe a date, time, and place at which oral 
                testimony shall be commenced; and
                    (B) identify a Bureau investigator who shall conduct 
                the investigation and the custodian to whom the 
                transcript of such investigation shall be submitted.
            (7) Service.--Any civil investigative demand issued, and any 
        enforcement petition filed, under this section may be served--
                    (A) by any Bureau investigator at any place within 
                the territorial jurisdiction of any court of the United 
                States; and
                    (B) upon any person who is not found within the 
                territorial jurisdiction of any court of the United 
                States--
                          (i) in such manner as the Federal Rules of 
                      Civil Procedure prescribe for service in a foreign 
                      nation; and

[[Page 124 STAT. 2021]]

                          (ii) to the extent that the courts of the 
                      United States have authority to assert 
                      jurisdiction over such person, consistent with due 
                      process, the United States District Court for the 
                      District of Columbia shall have the same 
                      jurisdiction to take any action respecting 
                      compliance with this section by such person that 
                      such district court would have if such person were 
                      personally within the jurisdiction of such 
                      district court.
            (8) Method of service.--Service of any civil investigative 
        demand or any enforcement petition filed under this section may 
        be made upon a person, including any legal entity, by--
                    (A) delivering a duly executed copy of such demand 
                or petition to the individual or to any partner, 
                executive officer, managing agent, or general agent of 
                such person, or to any agent of such person authorized 
                by appointment or by law to receive service of process 
                on behalf of such person;
                    (B) delivering a duly executed copy of such demand 
                or petition to the principal office or place of business 
                of the person to be served; or
                    (C) depositing a duly executed copy in the United 
                States mails, by registered or certified mail, return 
                receipt requested, duly addressed to such person at the 
                principal office or place of business of such person.
            (9) Proof of service.--
                    (A) In general.--A verified return by the individual 
                serving any civil investigative demand or any 
                enforcement petition filed under this section setting 
                forth the manner of such service shall be proof of such 
                service.
                    (B) Return receipts.--In the case of service by 
                registered or certified mail, such return shall be 
                accompanied by the return post office receipt of 
                delivery of such demand or enforcement petition.
            (10) <<NOTE: Certificate.>>  Production of documentary 
        material.--The production of documentary material in response to 
        a civil investigative demand shall be made under a sworn 
        certificate, in such form as the demand designates, by the 
        person, if a natural person, to whom the demand is directed or, 
        if not a natural person, by any person having knowledge of the 
        facts and circumstances relating to such production, to the 
        effect that all of the documentary material required by the 
        demand and in the possession, custody, or control of the person 
        to whom the demand is directed has been produced and made 
        available to the custodian.
            (11) <<NOTE: Certificate.>>  Submission of tangible 
        things.--The submission of tangible things in response to a 
        civil investigative demand shall be made under a sworn 
        certificate, in such form as the demand designates, by the 
        person to whom the demand is directed or, if not a natural 
        person, by any person having knowledge of the facts and 
        circumstances relating to such production, to the effect that 
        all of the tangible things required by the demand and in the 
        possession, custody, or control of the person to whom the demand 
        is directed have been submitted to the custodian.
            (12) <<NOTE: Certificate.>>  Separate answers.--Each 
        reporting requirement or question in a civil investigative 
        demand shall be answered separately and fully in writing under 
        oath, unless it is objected

[[Page 124 STAT. 2022]]

        to, in which event the reasons for the objection shall be stated 
        in lieu of an answer, and it shall be submitted under a sworn 
        certificate, in such form as the demand designates, by the 
        person, if a natural person, to whom the demand is directed or, 
        if not a natural person, by any person responsible for answering 
        each reporting requirement or question, to the effect that all 
        information required by the demand and in the possession, 
        custody, control, or knowledge of the person to whom the demand 
        is directed has been submitted.
            (13) Testimony.--
                    (A) In general.--
                          (i) Oath and recordation.--The examination of 
                      any person pursuant to a demand for oral testimony 
                      served under this subsection shall be taken before 
                      an officer authorized to administer oaths and 
                      affirmations by the laws of the United States or 
                      of the place at which the examination is held. The 
                      officer before whom oral testimony is to be taken 
                      shall put the witness on oath or affirmation and 
                      shall personally, or by any individual acting 
                      under the direction of and in the presence of the 
                      officer, record the testimony of the witness.
                          (ii) Transcription.--The testimony shall be 
                      taken stenographically and transcribed.
                          (iii) Transmission to custodian.--After the 
                      testimony is fully transcribed, the officer 
                      investigator before whom the testimony is taken 
                      shall promptly transmit a copy of the transcript 
                      of the testimony to the custodian.
                    (B) Parties present.--Any Bureau investigator before 
                whom oral testimony is to be taken shall exclude from 
                the place where the testimony is to be taken all other 
                persons, except the person giving the testimony, the 
                attorney for that person, the officer before whom the 
                testimony is to be taken, an investigator or 
                representative of an agency with which the Bureau is 
                engaged in a joint investigation, and any stenographer 
                taking such testimony.
                    (C) Location.--The oral testimony of any person 
                taken pursuant to a civil investigative demand shall be 
                taken in the judicial district of the United States in 
                which such person resides, is found, or transacts 
                business, or in such other place as may be agreed upon 
                by the Bureau investigator before whom the oral 
                testimony of such person is to be taken and such person.
                    (D) Attorney representation.--
                          (i) In general.--Any person compelled to 
                      appear under a civil investigative demand for oral 
                      testimony pursuant to this section may be 
                      accompanied, represented, and advised by an 
                      attorney.
                          (ii) Authority.--The attorney may advise a 
                      person described in clause (i), in confidence, 
                      either upon the request of such person or upon the 
                      initiative of the attorney, with respect to any 
                      question asked of such person.
                          (iii) Objections.--A person described in 
                      clause (i), or the attorney for that person, may 
                      object on the record to any question, in whole or 
                      in part, and such

[[Page 124 STAT. 2023]]

                      person shall briefly state for the record the 
                      reason for the objection. An objection may 
                      properly be made, received, and entered upon the 
                      record when it is claimed that such person is 
                      entitled to refuse to answer the question on 
                      grounds of any constitutional or other legal right 
                      or privilege, including the privilege against 
                      self-incrimination, but such person shall not 
                      otherwise object to or refuse to answer any 
                      question, and such person or attorney shall not 
                      otherwise interrupt the oral examination.
                          (iv) Refusal to answer.--If a person described 
                      in clause (i) refuses to answer any question--
                                    (I) the Bureau may petition the 
                                district court of the United States 
                                pursuant to this section for an order 
                                compelling such person to answer such 
                                question; and
                                    (II) if the refusal is on grounds of 
                                the privilege against self-
                                incrimination, the testimony of such 
                                person may be compelled in accordance 
                                with the provisions of section 6004 of 
                                title 18, United States Code.
                    (E) Transcripts.--For purposes of this subsection--
                          (i) after the testimony of any witness is 
                      fully transcribed, the Bureau investigator shall 
                      afford the witness (who may be accompanied by an 
                      attorney) a reasonable opportunity to examine the 
                      transcript;
                          (ii) the transcript shall be read to or by the 
                      witness, unless such examination and reading are 
                      waived by the witness;
                          (iii) any changes in form or substance which 
                      the witness desires to make shall be entered and 
                      identified upon the transcript by the Bureau 
                      investigator, with a statement of the reasons 
                      given by the witness for making such changes;
                          (iv) the transcript shall be signed by the 
                      witness, unless the witness in writing waives the 
                      signing, is ill, cannot be found, or refuses to 
                      sign; and
                          (v) <<NOTE: Time period.>>  if the transcript 
                      is not signed by the witness during the 30-day 
                      period following the date on which the witness is 
                      first afforded a reasonable opportunity to examine 
                      the transcript, the Bureau investigator shall sign 
                      the transcript and state on the record the fact of 
                      the waiver, illness, absence of the witness, or 
                      the refusal to sign, together with any reasons 
                      given for the failure to sign.
                    (F) Certification by investigator.--The Bureau 
                investigator shall certify on the transcript that the 
                witness was duly sworn by him or her and that the 
                transcript is a true record of the testimony given by 
                the witness, and the Bureau investigator shall promptly 
                deliver the transcript or send it by registered or 
                certified mail to the custodian.
                    (G) Copy of transcript.--The Bureau investigator 
                shall furnish a copy of the transcript (upon payment of 
                reasonable charges for the transcript) to the witness 
                only, except that the Bureau may for good cause limit 
                such

[[Page 124 STAT. 2024]]

                witness to inspection of the official transcript of his 
                testimony.
                    (H) Witness fees.--Any witness appearing for the 
                taking of oral testimony pursuant to a civil 
                investigative demand shall be entitled to the same fees 
                and mileage which are paid to witnesses in the district 
                courts of the United States.

    (d) Confidential Treatment of Demand Material.--
            (1) In general.--Documentary materials and tangible things 
        received as a result of a civil investigative demand shall be 
        subject to requirements and procedures regarding 
        confidentiality, in accordance with rules established by the 
        Bureau.
            (2) Disclosure to congress.--No rule established by the 
        Bureau regarding the confidentiality of materials submitted to, 
        or otherwise obtained by, the Bureau shall be intended to 
        prevent disclosure to either House of Congress or to an 
        appropriate committee of the Congress, except that the Bureau is 
        permitted to adopt rules allowing prior notice to any party that 
        owns or otherwise provided the material to the Bureau and had 
        designated such material as confidential.

    (e) Petition for Enforcement.--
            (1) In general.--Whenever any person fails to comply with 
        any civil investigative demand duly served upon him under this 
        section, or whenever satisfactory copying or reproduction of 
        material requested pursuant to the demand cannot be accomplished 
        and such person refuses to surrender such material, the Bureau, 
        through such officers or attorneys as it may designate, may 
        file, in the district court of the United States for any 
        judicial district in which such person resides, is found, or 
        transacts business, and serve upon such person, a petition for 
        an order of such court for the enforcement of this section.
            (2) Service of process.--All process of any court to which 
        application may be made as provided in this subsection may be 
        served in any judicial district.

    (f) Petition for Order Modifying or Setting Aside Demand.--
            (1) In general.--Not later <<NOTE: Deadline.>>  than 20 days 
        after the service of any civil investigative demand upon any 
        person under subsection (b), or at any time before the return 
        date specified in the demand, whichever period is shorter, or 
        within such period exceeding 20 days after service or in excess 
        of such return date as may be prescribed in writing, subsequent 
        to service, by any Bureau investigator named in the demand, such 
        person may file with the Bureau a petition for an order by the 
        Bureau modifying or setting aside the demand.
            (2) Compliance during pendency.--The time permitted for 
        compliance with the demand in whole or in part, as determined 
        proper and ordered by the Bureau, shall not run during the 
        pendency of a petition under paragraph (1) at the Bureau, except 
        that such person shall comply with any portions of the demand 
        not sought to be modified or set aside.
            (3) Specific grounds.--A petition under paragraph (1) shall 
        specify each ground upon which the petitioner relies in seeking 
        relief, and may be based upon any failure of the demand to 
        comply with the provisions of this section, or upon any 
        constitutional or other legal right or privilege of such person.

[[Page 124 STAT. 2025]]

    (g) Custodial Control.--At any time during which any custodian is in 
custody or control of any documentary material, tangible things, 
reports, answers to questions, or transcripts of oral testimony given by 
any person in compliance with any civil investigative demand, such 
person may file, in the district court of the United States for the 
judicial district within which the office of such custodian is situated, 
and serve upon such custodian, a petition for an order of such court 
requiring the performance by such custodian of any duty imposed upon him 
by this section or rule promulgated by the Bureau.
    (h) Jurisdiction of Court.--
            (1) In general.--Whenever any petition is filed in any 
        district court of the United States under this section, such 
        court shall have jurisdiction to hear and determine the matter 
        so presented, and to enter such order or orders as may be 
        required to carry out the provisions of this section.
            (2) Appeal.--Any final order entered as described in 
        paragraph (1) shall be subject to appeal pursuant to section 
        1291 of title 28, United States Code.
SEC. 1053. <<NOTE: 12 USC 5563.>>  HEARINGS AND ADJUDICATION 
                          PROCEEDINGS.

    (a) In General.--The Bureau is authorized to conduct hearings and 
adjudication proceedings with respect to any person in the manner 
prescribed by chapter 5 of title 5, United States Code in order to 
ensure or enforce compliance with--
            (1) the provisions of this title, including any rules 
        prescribed by the Bureau under this title; and
            (2) any other Federal law that the Bureau is authorized to 
        enforce, including an enumerated consumer law, and any 
        regulations or order prescribed thereunder, unless such Federal 
        law specifically limits the Bureau from conducting a hearing or 
        adjudication proceeding and only to the extent of such 
        limitation.

    (b) Special Rules for Cease-and-desist Proceedings.--
            (1) Orders authorized.--
                    (A) In general.--If, in the opinion of the Bureau, 
                any covered person or service provider is engaging or 
                has engaged in an activity that violates a law, rule, or 
                any condition imposed in writing on the person by the 
                Bureau, the Bureau may, subject to sections 1024, 1025, 
                and 1026, issue and serve upon the covered person or 
                service provider a notice of charges in respect thereof.
                    (B) Content of notice.--The 
                notice <<NOTE: Deadlines.>>  under subparagraph (A) 
                shall contain a statement of the facts constituting the 
                alleged violation or violations, and shall fix a time 
                and place at which a hearing will be held to determine 
                whether an order to cease and desist should issue 
                against the covered person or service provider, such 
                hearing to be held not earlier than 30 days nor later 
                than 60 days after the date of service of such notice, 
                unless an earlier or a later date is set by the Bureau, 
                at the request of any party so served.
                    (C) Consent.--Unless the party or parties served 
                under subparagraph (B) appear at the hearing personally 
                or by a duly authorized representative, such person 
                shall be deemed to have consented to the issuance of the 
                cease-and-desist order.

[[Page 124 STAT. 2026]]

                    (D) Procedure.--In the event of consent under 
                subparagraph (C), or if, upon the record, made at any 
                such hearing, the Bureau finds that any violation 
                specified in the notice of charges has been established, 
                the Bureau may issue and serve upon the covered person 
                or service provider an order to cease and desist from 
                the violation or practice. Such order may, by provisions 
                which may be mandatory or otherwise, require the covered 
                person or service provider to cease and desist from the 
                subject activity, and to take affirmative action to 
                correct the conditions resulting from any such 
                violation.
            (2) Effectiveness of order.--A cease-and-desist order shall 
        become effective at the expiration of 30 days after the date of 
        service of an order under paragraph (1) upon the covered person 
        or service provider concerned (except in the case of a cease-
        and-desist order issued upon consent, which shall become 
        effective at the time specified therein), and shall remain 
        effective and enforceable as provided therein, except to such 
        extent as the order is stayed, modified, terminated, or set 
        aside by action of the Bureau or a reviewing court.
            (3) Decision and appeal.--Any hearing provided for in this 
        subsection shall be held in the Federal judicial district or in 
        the territory in which the residence or principal office or 
        place of business of the person is located unless the person 
        consents to another place, and shall be conducted in accordance 
        with the provisions of chapter 5 of title 5 of the United States 
        Code. After <<NOTE: Deadline. Notification. Order.>>  such 
        hearing, and within 90 days after the Bureau has notified the 
        parties that the case has been submitted to the Bureau for final 
        decision, the Bureau shall render its decision (which shall 
        include findings of fact upon which its decision is predicated) 
        and shall issue and serve upon each party to the proceeding an 
        order or orders consistent with the provisions of this section. 
        Judicial review of any such order shall be exclusively as 
        provided in this subsection. Unless a petition for review is 
        timely filed in a court of appeals of the United States, as 
        provided in paragraph (4), and thereafter until the record in 
        the proceeding has been filed as provided in paragraph (4), the 
        Bureau may at any time, upon such notice and in such manner as 
        the Bureau shall determine proper, modify, terminate, or set 
        aside any such order. Upon filing of the record as provided, the 
        Bureau may modify, terminate, or set aside any such order with 
        permission of the court.
            (4) Appeal to court of appeals.--Any 
        party <<NOTE: Deadline. Petition.>>  to any proceeding under 
        this subsection may obtain a review of any order served pursuant 
        to this subsection (other than an order issued with the consent 
        of the person concerned) by the filing in the court of appeals 
        of the United States for the circuit in which the principal 
        office of the covered person is located, or in the United States 
        Court of Appeals for the District of Columbia Circuit, within 30 
        days after the date of service of such order, a written petition 
        praying that the order of the Bureau be modified, terminated, or 
        set aside. <<NOTE: Records.>>  A copy of such petition shall be 
        forthwith transmitted by the clerk of the court to the Bureau, 
        and thereupon the Bureau shall file in the court the record in 
        the proceeding, as provided in section 2112 of title 28 of the 
        United States Code. Upon the filing of such petition, such court 
        shall have jurisdiction, which upon

[[Page 124 STAT. 2027]]

        the filing of the record shall except as provided in the last 
        sentence of paragraph (3) be exclusive, to affirm, modify, 
        terminate, or set aside, in whole or in part, the order of the 
        Bureau. Review of such proceedings shall be had as provided in 
        chapter 7 of title 5 of the United States Code. The judgment and 
        decree of the court shall be final, except that the same shall 
        be subject to review by the Supreme Court of the United States, 
        upon certiorari, as provided in section 1254 of title 28 of the 
        United States Code.
            (5) No stay.--The commencement of proceedings for judicial 
        review under paragraph (4) shall not, unless specifically 
        ordered by the court, operate as a stay of any order issued by 
        the Bureau.

    (c) Special Rules for Temporary Cease-and-desist Proceedings.--
            (1) In general.--Whenever the Bureau determines that the 
        violation specified in the notice of charges served upon a 
        person, including a service provider, pursuant to subsection 
        (b), or the continuation thereof, is likely to cause the person 
        to be insolvent or otherwise prejudice the interests of 
        consumers before the completion of the proceedings conducted 
        pursuant to subsection (b), the Bureau may issue a temporary 
        order requiring the person to cease and desist from any such 
        violation or practice and to take affirmative action to prevent 
        or remedy such insolvency or other condition pending completion 
        of such proceedings. Such order may include any requirement 
        authorized under this subtitle. Such order shall become 
        effective upon service upon the person and, unless set aside, 
        limited, or suspended by a court in proceedings authorized by 
        paragraph (2), shall remain effective and enforceable pending 
        the completion of the administrative proceedings pursuant to 
        such notice and until such time as the Bureau shall dismiss the 
        charges specified in such notice, or if a cease-and-desist order 
        is issued against the person, until the effective date of such 
        order.
            (2) Appeal.--Not later <<NOTE: Deadline.>>  than 10 days 
        after the covered person or service provider concerned has been 
        served with a temporary cease-and-desist order, the person may 
        apply to the United States district court for the judicial 
        district in which the residence or principal office or place of 
        business of the person is located, or the United States District 
        Court for the District of Columbia, for an injunction setting 
        aside, limiting, or suspending the enforcement, operation, or 
        effectiveness of such order pending the completion of the 
        administrative proceedings pursuant to the notice of charges 
        served upon the person under subsection (b), and such court 
        shall have jurisdiction to issue such injunction.
            (3) Incomplete or inaccurate records.--
                    (A) Temporary order.--If a notice of charges served 
                under subsection (b) specifies, on the basis of 
                particular facts and circumstances, that the books and 
                records of a covered person or service provider are so 
                incomplete or inaccurate that the Bureau is unable to 
                determine the financial condition of that person or the 
                details or purpose of any transaction or transactions 
                that may have a material effect on the financial 
                condition of that person, the Bureau may issue a 
                temporary order requiring--

[[Page 124 STAT. 2028]]

                          (i) the cessation of any activity or practice 
                      which gave rise, whether in whole or in part, to 
                      the incomplete or inaccurate state of the books or 
                      records; or
                          (ii) affirmative action to restore such books 
                      or records to a complete and accurate state, until 
                      the completion of the proceedings under subsection 
                      (b)(1).
                    (B) Effective period.--Any temporary order issued 
                under subparagraph (A)--
                          (i) shall become effective upon service; and
                          (ii) unless set aside, limited, or suspended 
                      by a court in proceedings under paragraph (2), 
                      shall remain in effect and enforceable until the 
                      earlier of--
                                    (I) the completion of the proceeding 
                                initiated under subsection (b) in 
                                connection with the notice of charges; 
                                or
                                    (II) the date the Bureau determines, 
                                by examination or otherwise, that the 
                                books and records of the covered person 
                                or service provider are accurate and 
                                reflect the financial condition thereof.

    (d) Special Rules for Enforcement of Orders.--
            (1) In general.--The Bureau may in its discretion apply to 
        the United States district court within the jurisdiction of 
        which the principal office or place of business of the person is 
        located, for the enforcement of any effective and outstanding 
        notice or order issued under this section, and such court shall 
        have jurisdiction and power to order and require compliance 
        herewith.
            (2) Exception.--Except as otherwise provided in this 
        subsection, no court shall have jurisdiction to affect by 
        injunction or otherwise the issuance or enforcement of any 
        notice or order or to review, modify, suspend, terminate, or set 
        aside any such notice or order.

    (e) Rules.--The Bureau shall prescribe rules establishing such 
procedures as may be necessary to carry out this section.
SEC. 1054. <<NOTE: 12 USC 5564.>>  LITIGATION AUTHORITY.

    (a) In General.--If any person violates a Federal consumer financial 
law, the Bureau may, subject to sections 1024, 1025, and 1026, commence 
a civil action against such person to impose a civil penalty or to seek 
all appropriate legal and equitable relief including a permanent or 
temporary injunction as permitted by law.
    (b) Representation.--The Bureau may act in its own name and through 
its own attorneys in enforcing any provision of this title, rules 
thereunder, or any other law or regulation, or in any action, suit, or 
proceeding to which the Bureau is a party.
    (c) Compromise of Actions.--The Bureau may compromise or settle any 
action if such compromise is approved by the court.
    (d) Notice to the Attorney General.--
            (1) In general.--When commencing a civil action under 
        Federal consumer financial law, or any rule thereunder, the 
        Bureau shall notify the Attorney General and, with respect to a 
        civil action against an insured depository institution or 
        insured credit union, the appropriate prudential regulator.
            (2) Notice and coordination.--
                    (A) Notice of other actions.--In addition to any 
                notice required under paragraph (1), the Bureau shall

[[Page 124 STAT. 2029]]

                notify the Attorney General concerning any action, suit, 
                or proceeding to which the Bureau is a party, except an 
                action, suit, or proceeding that involves the offering 
                or provision of consumer financial products or services.
                    (B) Coordination.--In 
                order <<NOTE: Consultation. Deadline.>>  to avoid 
                conflicts and promote consistency regarding litigation 
                of matters under Federal law, the Attorney General and 
                the Bureau shall consult regarding the coordination of 
                investigations and proceedings, including by negotiating 
                an agreement for coordination by not later than 180 days 
                after the designated transfer date. The agreement under 
                this subparagraph shall include provisions to ensure 
                that parallel investigations and proceedings involving 
                the Federal consumer financial laws are conducted in a 
                manner that avoids conflicts and does not impede the 
                ability of the Attorney General to prosecute violations 
                of Federal criminal laws.
                    (C) Rule of construction.--Nothing in this paragraph 
                shall be construed to limit the authority of the Bureau 
                under this title, including the authority to interpret 
                Federal consumer financial law.

    (e) <<NOTE: Deadlines.>>  Appearance Before the Supreme Court.--The 
Bureau may represent itself in its own name before the Supreme Court of 
the United States, provided that the Bureau makes a written request to 
the Attorney General within the 10-day period which begins on the date 
of entry of the judgment which would permit any party to file a petition 
for writ of certiorari, and the Attorney General concurs with such 
request or fails to take action within 60 days of the request of the 
Bureau.

    (f) Forum.--Any civil action brought under this title may be brought 
in a United States district court or in any court of competent 
jurisdiction of a state in a district in which the defendant is located 
or resides or is doing business, and such court shall have jurisdiction 
to enjoin such person and to require compliance with any Federal 
consumer financial law.
    (g) Time for Bringing Action.--
            (1) In general.--Except as otherwise permitted by law or 
        equity, no action may be brought under this title more than 3 
        years after the date of discovery of the violation to which an 
        action relates.
            (2) Limitations under other federal laws.--
                    (A) In general.--An action arising under this title 
                does not include claims arising solely under enumerated 
                consumer laws.
                    (B) Bureau authority.--In any action arising solely 
                under an enumerated consumer law, the Bureau may 
                commence, defend, or intervene in the action in 
                accordance with the requirements of that provision of 
                law, as applicable.
                    (C) Transferred authority.--In any action arising 
                solely under laws for which authorities were transferred 
                under subtitles F and H, the Bureau may commence, 
                defend, or intervene in the action in accordance with 
                the requirements of that provision of law, as 
                applicable.
SEC. 1055. <<NOTE: 12 USC 5565.>>  RELIEF AVAILABLE.

    (a) Administrative Proceedings or Court Actions.--

[[Page 124 STAT. 2030]]

            (1) Jurisdiction.--The court (or the Bureau, as the case may 
        be) in an action or adjudication proceeding brought under 
        Federal consumer financial law, shall have jurisdiction to grant 
        any appropriate legal or equitable relief with respect to a 
        violation of Federal consumer financial law, including a 
        violation of a rule or order prescribed under a Federal consumer 
        financial law.
            (2) Relief.--Relief under this section may include, without 
        limitation--
                    (A) rescission or reformation of contracts;
                    (B) refund of moneys or return of real property;
                    (C) restitution;
                    (D) disgorgement or compensation for unjust 
                enrichment;
                    (E) payment of damages or other monetary relief;
                    (F) public notification regarding the violation, 
                including the costs of notification;
                    (G) limits on the activities or functions of the 
                person; and
                    (H) civil money penalties, as set forth more fully 
                in subsection (c).
            (3) No exemplary or punitive damages.--Nothing in this 
        subsection shall be construed as authorizing the imposition of 
        exemplary or punitive damages.

    (b) Recovery of Costs.--In any action brought by the Bureau, a State 
attorney general, or any State regulator to enforce any Federal consumer 
financial law, the Bureau, the State attorney general, or the State 
regulator may recover its costs in connection with prosecuting such 
action if the Bureau, the State attorney general, or the State regulator 
is the prevailing party in the action.
    (c) Civil Money Penalty in Court and Administrative Actions.--
            (1) In general.--Any person that violates, through any act 
        or omission, any provision of Federal consumer financial law 
        shall forfeit and pay a civil penalty pursuant to this 
        subsection.
            (2) Penalty amounts.--
                    (A) First tier.--For any violation of a law, rule, 
                or final order or condition imposed in writing by the 
                Bureau, a civil penalty may not exceed $5,000 for each 
                day during which such violation or failure to pay 
                continues.
                    (B) Second tier.--Notwithstanding paragraph (A), for 
                any person that recklessly engages in a violation of a 
                Federal consumer financial law, a civil penalty may not 
                exceed $25,000 for each day during which such violation 
                continues.
                    (C) Third tier.--Notwithstanding subparagraphs (A) 
                and (B), for any person that knowingly violates a 
                Federal consumer financial law, a civil penalty may not 
                exceed $1,000,000 for each day during which such 
                violation continues.
            (3) Mitigating factors.--In determining the amount of any 
        penalty assessed under paragraph (2), the Bureau or the court 
        shall take into account the appropriateness of the penalty with 
        respect to--
                    (A) the size of financial resources and good faith 
                of the person charged;

[[Page 124 STAT. 2031]]

                    (B) the gravity of the violation or failure to pay;
                    (C) the severity of the risks to or losses of the 
                consumer, which may take into account the number of 
                products or services sold or provided;
                    (D) the history of previous violations; and
                    (E) such other matters as justice may require.
            (4) Authority to modify or remit penalty.--The Bureau may 
        compromise, modify, or remit any penalty which may be assessed 
        or had already been assessed under paragraph (2). The amount of 
        such penalty, when finally determined, shall be exclusive of any 
        sums owed by the person to the United States in connection with 
        the costs of the proceeding, and may be deducted from any sums 
        owing by the United States to the person charged.
            (5) Notice and hearing.--No civil penalty may be assessed 
        under this subsection with respect to a violation of any Federal 
        consumer financial law, unless--
                    (A) the Bureau gives notice and an opportunity for a 
                hearing to the person accused of the violation; or
                    (B) the appropriate court has ordered such 
                assessment and entered judgment in favor of the Bureau.
SEC. 1056. <<NOTE: 12 USC 5566.>>  REFERRALS FOR CRIMINAL 
                          PROCEEDINGS.

    If the Bureau obtains evidence that any person, domestic or foreign, 
has engaged in conduct that may constitute a violation of Federal 
criminal law, the Bureau shall transmit such evidence to the Attorney 
General of the United States, who may institute criminal proceedings 
under appropriate law. Nothing in this section affects any other 
authority of the Bureau to disclose information.
SEC. 1057. <<NOTE: 12 USC 5567.>>  EMPLOYEE PROTECTION.

    (a) In General.--No covered person or service provider shall 
terminate or in any other way discriminate against, or cause to be 
terminated or discriminated against, any covered employee or any 
authorized representative of covered employees by reason of the fact 
that such employee or representative, whether at the initiative of the 
employee or in the ordinary course of the duties of the employee (or any 
person acting pursuant to a request of the employee), has--
            (1) provided, caused to be provided, or is about to provide 
        or cause to be provided, information to the employer, the 
        Bureau, or any other State, local, or Federal, government 
        authority or law enforcement agency relating to any violation 
        of, or any act or omission that the employee reasonably believes 
        to be a violation of, any provision of this title or any other 
        provision of law that is subject to the jurisdiction of the 
        Bureau, or any rule, order, standard, or prohibition prescribed 
        by the Bureau;
            (2) testified or will testify in any proceeding resulting 
        from the administration or enforcement of any provision of this 
        title or any other provision of law that is subject to the 
        jurisdiction of the Bureau, or any rule, order, standard, or 
        prohibition prescribed by the Bureau;
            (3) filed, instituted, or caused to be filed or instituted 
        any proceeding under any Federal consumer financial law; or
            (4) objected to, or refused to participate in, any activity, 
        policy, practice, or assigned task that the employee (or other 
        such person) reasonably believed to be in violation of any law,

[[Page 124 STAT. 2032]]

        rule, order, standard, or prohibition, subject to the 
        jurisdiction of, or enforceable by, the Bureau.

    (b) Definition of Covered Employee.--For the purposes of this 
section, the term ``covered employee'' means any individual performing 
tasks related to the offering or provision of a consumer financial 
product or service.
    (c) <<NOTE: Deadlines.>>  Procedures and Timetables.--
            (1) Complaint.--
                    (A) In general.--A person who believes that he or 
                she has been discharged or otherwise discriminated 
                against by any person in violation of subsection (a) 
                may, not later than 180 days after the date on which 
                such alleged violation occurs, file (or have any person 
                file on his or her behalf) a complaint with the 
                Secretary of Labor alleging such discharge or 
                discrimination and identifying the person responsible 
                for such act.
                    (B) <<NOTE: Notification.>>  Actions of secretary of 
                labor.--Upon receipt of such a complaint, the Secretary 
                of Labor shall notify, in writing, the person named in 
                the complaint who is alleged to have committed the 
                violation, of--
                          (i) the filing of the complaint;
                          (ii) the allegations contained in the 
                      complaint;
                          (iii) the substance of evidence supporting the 
                      complaint; and
                          (iv) opportunities that will be afforded to 
                      such person under paragraph (2).
            (2) Investigation by secretary of labor.--
                    (A) In general.--Not later than 60 days after the 
                date of receipt of a complaint filed under paragraph 
                (1), and after affording the complainant and the person 
                named in the complaint who is alleged to have committed 
                the violation that is the basis for the complaint an 
                opportunity to submit to the Secretary of Labor a 
                written response to the complaint and an opportunity to 
                meet with a representative of the Secretary of Labor to 
                present statements from witnesses, the Secretary of 
                Labor shall--
                          (i) <<NOTE: Determination.>>  initiate an 
                      investigation and determine whether there is 
                      reasonable cause to believe that the complaint has 
                      merit; and
                          (ii) <<NOTE: Notification.>>  notify the 
                      complainant and the person alleged to have 
                      committed the violation of subsection (a), in 
                      writing, of such determination.
                    (B) Notice of relief available.--If 
                the <<NOTE: Order.>>  Secretary of Labor concludes that 
                there is reasonable cause to believe that a violation of 
                subsection (a) has occurred, the Secretary of Labor 
                shall, together with the notice under subparagraph 
                (A)(ii), issue a preliminary order providing the relief 
                prescribed by paragraph (4)(B).
                    (C) Request for hearing.--Not later than 30 days 
                after the date of receipt of notification of a 
                determination of the Secretary of Labor under this 
                paragraph, either the person alleged to have committed 
                the violation or the complainant may file objections to 
                the findings or preliminary order, or both, and request 
                a hearing on the record. The filing of such objections 
                shall not operate to stay any reinstatement remedy 
                contained in the preliminary order. Any such hearing 
                shall be conducted expeditiously, and

[[Page 124 STAT. 2033]]

                if a hearing is not requested in such 30-day period, the 
                preliminary order shall be deemed a final order that is 
                not subject to judicial review.
            (3) Grounds for determination of complaints.--
                    (A) In general.--The Secretary of Labor shall 
                dismiss a complaint filed under this subsection, and 
                shall not conduct an investigation otherwise required 
                under paragraph (2), unless the complainant makes a 
                prima facie showing that any behavior described in 
                paragraphs (1) through (4) of subsection (a) was a 
                contributing factor in the unfavorable personnel action 
                alleged in the complaint.
                    (B) Rebuttal evidence.--Notwithstanding a finding by 
                the Secretary of Labor that the complainant has made the 
                showing required under subparagraph (A), no 
                investigation otherwise required under paragraph (2) 
                shall be conducted, if the employer demonstrates, by 
                clear and convincing evidence, that the employer would 
                have taken the same unfavorable personnel action in the 
                absence of that behavior.
                    (C) Evidentiary standards.--The Secretary of Labor 
                may determine that a violation of subsection (a) has 
                occurred only if the complainant demonstrates that any 
                behavior described in paragraphs (1) through (4) of 
                subsection (a) was a contributing factor in the 
                unfavorable personnel action alleged in the complaint. 
                Relief may not be ordered under subparagraph (A) if the 
                employer demonstrates by clear and convincing evidence 
                that the employer would have taken the same unfavorable 
                personnel action in the absence of that behavior.
            (4) Issuance of final orders; review procedures.--
                    (A) Timing.--Not later than 120 days after the date 
                of conclusion of any hearing under paragraph (2), the 
                Secretary of Labor shall issue a final order providing 
                the relief prescribed by this paragraph or denying the 
                complaint. At any time before issuance of a final order, 
                a proceeding under this subsection may be terminated on 
                the basis of a settlement agreement entered into by the 
                Secretary of Labor, the complainant, and the person 
                alleged to have committed the violation.
                    (B) Penalties.--
                          (i) Order of secretary of labor.--If, in 
                      response to a complaint filed under paragraph (1), 
                      the Secretary of Labor determines that a violation 
                      of subsection (a) has occurred, the Secretary of 
                      Labor shall order the person who committed such 
                      violation--
                                    (I) to take affirmative action to 
                                abate the violation;
                                    (II) to reinstate the complainant to 
                                his or her former position, together 
                                with compensation (including back pay) 
                                and restore the terms, conditions, and 
                                privileges associated with his or her 
                                employment; and
                                    (III) to provide compensatory 
                                damages to the complainant.
                          (ii) Penalty.--If an <<NOTE: Assessment.>>  
                      order is issued under clause (i), the Secretary of 
                      Labor, at the request of the complainant, shall 
                      assess against the person against

[[Page 124 STAT. 2034]]

                      whom the order is issued, a sum equal to the 
                      aggregate amount of all costs and expenses 
                      (including attorney fees and expert witness fees) 
                      reasonably incurred, as determined by the 
                      Secretary of Labor, by the complainant for, or in 
                      connection with, the bringing of the complaint 
                      upon which the order was issued.
                    (C) Penalty for frivolous claims.--If the Secretary 
                of Labor finds that a complaint under paragraph (1) is 
                frivolous or has been brought in bad faith, the 
                Secretary of Labor may award to the prevailing employer 
                a reasonable attorney fee, not exceeding $1,000, to be 
                paid by the complainant.
                    (D) De novo review.--
                          (i) <<NOTE: Deadlines.>>  Failure of the 
                      secretary to act.--If the Secretary of Labor has 
                      not issued a final order within 210 days after the 
                      date of filing of a complaint under this 
                      subsection, or within 90 days after the date of 
                      receipt of a written determination, the 
                      complainant may bring an action at law or equity 
                      for de novo review in the appropriate district 
                      court of the United States having jurisdiction, 
                      which shall have jurisdiction over such an action 
                      without regard to the amount in controversy, and 
                      which action shall, at the request of either party 
                      to such action, be tried by the court with a jury.
                          (ii) Procedures.--A proceeding under clause 
                      (i) shall be governed by the same legal burdens of 
                      proof specified in paragraph (3). The court shall 
                      have jurisdiction to grant all relief necessary to 
                      make the employee whole, including injunctive 
                      relief and compensatory damages, including--
                                    (I) reinstatement with the same 
                                seniority status that the employee would 
                                have had, but for the discharge or 
                                discrimination;
                                    (II) the amount of back pay, with 
                                interest; and
                                    (III) compensation for any special 
                                damages sustained as a result of the 
                                discharge or discrimination, including 
                                litigation costs, expert witness fees, 
                                and reasonable attorney fees.
                    (E) <<NOTE: Deadline.>>  Other appeals.--Unless the 
                complainant brings an action under subparagraph (D), any 
                person adversely affected or aggrieved by a final order 
                issued under subparagraph (A) may file a petition for 
                review of the order in the United States Court of 
                Appeals for the circuit in which the violation with 
                respect to which the order was issued, allegedly 
                occurred or the circuit in which the complainant resided 
                on the date of such violation, not later than 60 days 
                after the date of the issuance of the final order of the 
                Secretary of Labor under subparagraph (A). Review shall 
                conform to chapter 7 of title 5, United States Code. The 
                commencement of proceedings under this subparagraph 
                shall not, unless ordered by the court, operate as a 
                stay of the order. An order of the Secretary of Labor 
                with respect to which review could have been obtained 
                under this subparagraph shall not be subject to judicial 
                review in any criminal or other civil proceeding.

[[Page 124 STAT. 2035]]

            (5) Failure to comply with order.--
                    (A) Actions by the secretary.--If any person has 
                failed to comply with a final order issued under 
                paragraph (4), the Secretary of Labor may file a civil 
                action in the United States district court for the 
                district in which the violation was found to have 
                occurred, or in the United States district court for the 
                District of Columbia, to enforce such order. In actions 
                brought under this paragraph, the district courts shall 
                have jurisdiction to grant all appropriate relief 
                including injunctive relief and compensatory damages.
                    (B) Civil actions to compel compliance.--A person on 
                whose behalf an order was issued under paragraph (4) may 
                commence a civil action against the person to whom such 
                order was issued to require compliance with such order. 
                The appropriate United States district court shall have 
                jurisdiction, without regard to the amount in 
                controversy or the citizenship of the parties, to 
                enforce such order.
                    (C) Award of costs authorized.--The court, in 
                issuing any final order under this paragraph, may award 
                costs of litigation (including reasonable attorney and 
                expert witness fees) to any party, whenever the court 
                determines such award is appropriate.
                    (D) Mandamus proceedings.--Any nondiscretionary duty 
                imposed by this section shall be enforceable in a 
                mandamus proceeding brought under section 1361 of title 
                28, United States Code.

    (d) Unenforceability of Certain Agreements.--
            (1) No waiver of rights and remedies.--Except as provided 
        under paragraph (3), and notwithstanding any other provision of 
        law, the rights and remedies provided for in this section may 
        not be waived by any agreement, policy, form, or condition of 
        employment, including by any predispute arbitration agreement.
            (2) No predispute arbitration agreements.--Except as 
        provided under paragraph (3), and notwithstanding any other 
        provision of law, no predispute arbitration agreement shall be 
        valid or enforceable to the extent that it requires arbitration 
        of a dispute arising under this section.
            (3) <<NOTE: Regulation.>>  Exception.--Notwithstanding 
        paragraphs (1) and (2), an arbitration provision in a collective 
        bargaining agreement shall be enforceable as to disputes arising 
        under subsection (a)(4), unless the Bureau determines, by rule, 
        that such provision is inconsistent with the purposes of this 
        title.
SEC. 1058. <<NOTE: 12 USC 5561 note.>>  EFFECTIVE DATE.

    This subtitle shall become effective on the designated transfer 
date.

Subtitle F--Transfer of Functions and Personnel; Transitional Provisions

SEC. 1061. <<NOTE: 12 USC 5581.>>  TRANSFER OF CONSUMER FINANCIAL 
                          PROTECTION FUNCTIONS.

    (a) Defined Terms.--For purposes of this subtitle--

[[Page 124 STAT. 2036]]

            (1) the term ``consumer financial protection functions'' 
        means--
                    (A) all authority to prescribe rules or issue orders 
                or guidelines pursuant to any Federal consumer financial 
                law, including performing appropriate functions to 
                promulgate and review such rules, orders, and 
                guidelines; and
                    (B) the examination authority described in 
                subsection (c)(1), with respect to a person described in 
                subsection 1025(a); and
            (2) the terms ``transferor agency'' and ``transferor 
        agencies'' mean, respectively--
                    (A) the Board of Governors (and any Federal reserve 
                bank, as the context requires), the Federal Deposit 
                Insurance Corporation, the Federal Trade Commission, the 
                National Credit Union Administration, the Office of the 
                Comptroller of the Currency, the Office of Thrift 
                Supervision, and the Department of Housing and Urban 
                Development, and the heads of those agencies; and
                    (B) the agencies listed in subparagraph (A), 
                collectively.

    (b) In General.--Except as provided in subsection (c), consumer 
financial protection functions are transferred as follows:
            (1) Board of governors.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Board of Governors are 
                transferred to the Bureau.
                    (B) Board of governors authority.--The Bureau shall 
                have all powers and duties that were vested in the Board 
                of Governors, relating to consumer financial protection 
                functions, on the day before the designated transfer 
                date.
            (2) Comptroller of the currency.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Comptroller of the Currency 
                are transferred to the Bureau.
                    (B) Comptroller authority.--The Bureau shall have 
                all powers and duties that were vested in the 
                Comptroller of the Currency, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (3) Director of the office of thrift supervision.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Director of the Office of 
                Thrift Supervision are transferred to the Bureau.
                    (B) Director authority.--The Bureau shall have all 
                powers and duties that were vested in the Director of 
                the Office of Thrift Supervision, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (4) Federal deposit insurance corporation.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the Federal Deposit Insurance 
                Corporation are transferred to the Bureau.
                    (B) Corporation authority.--The Bureau shall have 
                all powers and duties that were vested in the Federal 
                Deposit Insurance Corporation, relating to consumer 
                financial protection functions, on the day before the 
                designated transfer date.
            (5) Federal trade commission.--

[[Page 124 STAT. 2037]]

                    (A) Transfer of functions.--The authority of the 
                Federal Trade Commission under an enumerated consumer 
                law to prescribe rules, issue guidelines, or conduct a 
                study or issue a report mandated under such law shall be 
                transferred to the Bureau on the designated transfer 
                date. Nothing in this title shall be construed to 
                require a mandatory transfer of any employee of the 
                Federal Trade Commission.
                    (B) Bureau authority.--
                          (i) In general.--The Bureau shall have all 
                      powers and duties under the enumerated consumer 
                      laws to prescribe rules, issue guidelines, or to 
                      conduct studies or issue reports mandated by such 
                      laws, that were vested in the Federal Trade 
                      Commission on the day before the designated 
                      transfer date.
                          (ii) Federal trade commission act.--Subject to 
                      subtitle B, the Bureau may enforce a rule 
                      prescribed under the Federal Trade Commission Act 
                      by the Federal Trade Commission with respect to an 
                      unfair or deceptive act or practice to the extent 
                      that such rule applies to a covered person or 
                      service provider with respect to the offering or 
                      provision of a consumer financial product or 
                      service as if it were a rule prescribed under 
                      section 1031 of this title.
                    (C) Authority of the federal trade commission.--
                          (i) In general.--No provision of this title 
                      shall be construed as modifying, limiting, or 
                      otherwise affecting the authority of the Federal 
                      Trade Commission (including its authority with 
                      respect to affiliates described in section 
                      1025(a)(1)) under the Federal Trade Commission Act 
                      or any other law, other than the authority under 
                      an enumerated consumer law to prescribe rules, 
                      issue official guidelines, or conduct a study or 
                      issue a report mandated under such law.
                          (ii) Commission authority relating to rules 
                      prescribed by the bureau.--Subject to subtitle B, 
                      the Federal Trade Commission shall have authority 
                      to enforce under the Federal Trade Commission Act 
                      (15 U.S.C. 41 et seq.) a rule prescribed by the 
                      Bureau under this title with respect to a covered 
                      person subject to the jurisdiction of the Federal 
                      Trade Commission under that Act, and a violation 
                      of such a rule by such a person shall be treated 
                      as a violation of a rule issued under section 18 
                      of that Act (15 U.S.C. 57a) with respect to unfair 
                      or deceptive acts or practices.
                    (D) Coordination.--To avoid <<NOTE: Contracts.>>  
                duplication of or conflict between rules prescribed by 
                the Bureau under section 1031 of this title and the 
                Federal Trade Commission under section 18(a)(1)(B) of 
                the Federal Trade Commission Act that apply to a covered 
                person or service provider with respect to the offering 
                or provision of consumer financial products or services, 
                the agencies shall negotiate an agreement with respect 
                to rulemaking by each agency, including consultation 
                with the other agency prior to proposing a rule and 
                during the comment period.

[[Page 124 STAT. 2038]]

                    (E) Deference.--No provision of this title shall be 
                construed as altering, limiting, expanding, or otherwise 
                affecting the deference that a court affords to the--
                          (i) Federal Trade Commission in making 
                      determinations regarding the meaning or 
                      interpretation of any provision of the Federal 
                      Trade Commission Act, or of any other Federal law 
                      for which the Commission has authority to 
                      prescribe rules; or
                          (ii) Bureau in making determinations regarding 
                      the meaning or interpretation of any provision of 
                      a Federal consumer financial law (other than any 
                      law described in clause (i)).
            (6) National credit union administration.--
                    (A) Transfer of functions.--All consumer financial 
                protection functions of the National Credit Union 
                Administration are transferred to the Bureau.
                    (B) National credit union administration 
                authority.--The Bureau shall have all powers and duties 
                that were vested in the National Credit Union 
                Administration, relating to consumer financial 
                protection functions, on the day before the designated 
                transfer date.
            (7) Department of housing and urban development.--
                    (A) Transfer of functions.--All consumer protection 
                functions of the Secretary of the Department of Housing 
                and Urban Development relating to the Real Estate 
                Settlement Procedures Act of 1974 (12 U.S.C. 2601 et 
                seq.), the Secure and Fair Enforcement for Mortgage 
                Licensing Act of 2008 (12 U.S.C. 5102 et seq.), and the 
                Interstate Land Sales Full Disclosure Act (15 U.S.C. 
                1701 et seq.) are transferred to the Bureau.
                    (B) Authority of the department of housing and urban 
                development.--The Bureau shall have all powers and 
                duties that were vested in the Secretary of the 
                Department of Housing and Urban Development relating to 
                the Real Estate Settlement Procedures Act of 1974 (12 
                U.S.C. 2601 et seq.), the Secure and Fair Enforcement 
                for Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et 
                seq.), and the Interstate Land Sales Full Disclosure Act 
                (15 U.S.C. 1701 et seq.), on the day before the 
                designated transfer date.

    (c) Authorities of the Prudential Regulators.--
            (1) Examination.--A transferor agency that is a prudential 
        regulator shall have--
                    (A) authority to require reports from and conduct 
                examinations for compliance with Federal consumer 
                financial laws with respect to a person described in 
                section 1025(a), that is incidental to the backup and 
                enforcement procedures provided to the regulator under 
                section 1025(c); and
                    (B) exclusive authority (relative to the Bureau) to 
                require reports from and conduct examinations for 
                compliance with Federal consumer financial laws with 
                respect to a person described in section 1026(a), except 
                as provided to the Bureau under subsections (b) and (c) 
                of section 1026.
            (2) Enforcement.--

[[Page 124 STAT. 2039]]

                    (A) Limitation.--The authority of a transferor 
                agency that is a prudential regulator to enforce 
                compliance with Federal consumer financial laws with 
                respect to a person described in section 1025(a), shall 
                be limited to the backup and enforcement procedures in 
                described in section 1025(c).
                    (B) Exclusive authority.--A transferor agency that 
                is a prudential regulator shall have exclusive authority 
                (relative to the Bureau) to enforce compliance with 
                Federal consumer financial laws with respect to a person 
                described in section 1026(a), except as provided to the 
                Bureau under subsections (b) and (c) of section 1026.
                    (C) Statutory enforcement.--For purposes of carrying 
                out the authorities under, and subject to the 
                limitations of, subtitle B, each prudential regulator 
                may enforce compliance with the requirements imposed 
                under this title, and any rule or order prescribed by 
                the Bureau under this title, under--
                          (i) the Federal Credit Union Act (12 U.S.C. 
                      1751 et seq.), by the National Credit Union 
                      Administration Board with respect to any covered 
                      person or service provider that is an insured 
                      credit union, or service provider thereto, or any 
                      affiliate of an insured credit union, who is 
                      subject to the jurisdiction of the Board under 
                      that Act; and
                          (ii) section 8 of the Federal Deposit 
                      Insurance Act (12 U.S.C. 1818), by the appropriate 
                      Federal banking agency, as defined in section 3(q) 
                      of the Federal Deposit Insurance Act (12 U.S.C. 
                      1813(q)), with respect to a covered person or 
                      service provider that is a person described in 
                      section 3(q) of that Act and who is subject to the 
                      jurisdiction of that agency, as set forth in 
                      sections 3(q) and 8 of the Federal Deposit 
                      Insurance Act; or
                          (iii) the Bank Service Company Act (12 U.S.C. 
                      1861 et seq.).

    (d) Effective Date.--Subsections (b) and (c) shall become effective 
on the designated transfer date.
SEC. 1062. <<NOTE: 12 USC 5582.>>  DESIGNATED TRANSFER DATE.

    (a) In General.--Not later <<NOTE: Deadline.>>  than 60 days after 
the date of enactment of this Act, the Secretary shall--
            (1) in consultation with the Chairman of the Board of 
        Governors, the Chairperson of the Corporation, the Chairman of 
        the Federal Trade Commission, the Chairman of the National 
        Credit Union Administration Board, the Comptroller of the 
        Currency, the Director of the Office of Thrift Supervision, the 
        Secretary of the Department of Housing and Urban Development, 
        and the Director of the Office of Management and Budget, 
        designate a single calendar date for the transfer of functions 
        to the Bureau under section 1061; and
            (2) <<NOTE: Notice. Federal Register, publication.>>  
        publish notice of that designated date in the Federal Register.

    (b) Changing Designation.--The Secretary--
            (1) may, in consultation with the Chairman of the Board of 
        Governors, the Chairperson of the Federal Deposit Insurance 
        Corporation, the Chairman of the Federal Trade Commission, the 
        Chairman of the National Credit Union Administration

[[Page 124 STAT. 2040]]

        Board, the Comptroller of the Currency, the Director of the 
        Office of Thrift Supervision, the Secretary of the Department of 
        Housing and Urban Development, and the Director of the Office of 
        Management and Budget, change the date designated under 
        subsection (a); and
            (2) <<NOTE: Notice. Federal Register, publication.>>  shall 
        publish notice of any changed designated date in the Federal 
        Register.

    (c) Permissible Dates.--
            (1) In general.--Except as <<NOTE: Time period.>>  provided 
        in paragraph (2), any date designated under this section shall 
        be not earlier than 180 days, nor later than 12 months, after 
        the date of enactment of this Act.
            (2) Extension of time.--The Secretary may designate a date 
        that is later than 12 months after the date of enactment of this 
        Act if the Secretary transmits to appropriate committees of 
        Congress--
                    (A) <<NOTE: Determination.>>  a written 
                determination that orderly implementation of this title 
                is not feasible before the date that is 12 months after 
                the date of enactment of this Act;
                    (B) an explanation of why an extension is necessary 
                for the orderly implementation of this title; and
                    (C) a description of the steps that will be taken to 
                effect an orderly and timely implementation of this 
                title within the extended time period.
            (3) Extension limited.--In no case may any date designated 
        under this section be later than 18 months after the date of 
        enactment of this Act.
SEC. 1063. <<NOTE: 12 USC 5583.>>  SAVINGS PROVISIONS.

    (a) Board of Governors.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(1) does not affect the validity of any right, 
        duty, or obligation of the United States, the Board of Governors 
        (or any Federal reserve bank), or any other person that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the Board 
                of Governors transferred to the Bureau by this title; 
                and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Board of 
        Governors (or any Federal reserve bank) before the designated 
        transfer date with respect to any consumer financial protection 
        function of the Board of Governors (or any Federal reserve bank) 
        transferred to the Bureau by this title, except that the Bureau, 
        subject to sections 1024, 1025, and 1026, shall be substituted 
        for the Board of Governors (or Federal reserve bank) as a party 
        to any such proceeding as of the designated transfer date.

    (b) Federal Deposit Insurance Corporation.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(4) does not affect the validity of any right, 
        duty, or obligation of the United States, the Federal Deposit 
        Insurance Corporation, the Board of Directors of that 
        Corporation, or any other person, that--

[[Page 124 STAT. 2041]]

                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                Federal Deposit Insurance Corporation transferred to the 
                Bureau by this title; and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Federal Deposit 
        Insurance Corporation (or the Board of Directors of that 
        Corporation) before the designated transfer date with respect to 
        any consumer financial protection function of the Federal 
        Deposit Insurance Corporation transferred to the Bureau by this 
        title, except that the Bureau, subject to sections 1024, 1025, 
        and 1026, shall be substituted for the Federal Deposit Insurance 
        Corporation (or Board of Directors) as a party to any such 
        proceeding as of the designated transfer date.

    (c) Federal Trade Commission.--Section 1061(b)(5) does not affect 
the validity of any right, duty, or obligation of the United States, the 
Federal Trade Commission, or any other person, that--
            (1) arises under any provision of law relating to any 
        consumer financial protection function of the Federal Trade 
        Commission transferred to the Bureau by this title; and
            (2) existed on the day before the designated transfer date.

    (d) National Credit Union Administration.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(6) does not affect the validity of any right, 
        duty, or obligation of the United States, the National Credit 
        Union Administration, the National Credit Union Administration 
        Board, or any other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                National Credit Union Administration transferred to the 
                Bureau by this title; and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the National Credit 
        Union Administration (or the National Credit Union 
        Administration Board) before the designated transfer date with 
        respect to any consumer financial protection function of the 
        National Credit Union Administration transferred to the Bureau 
        by this title, except that the Bureau, subject to sections 1024, 
        1025, and 1026, shall be substituted for the National Credit 
        Union Administration (or National Credit Union Administration 
        Board) as a party to any such proceeding as of the designated 
        transfer date.

    (e) Office of the Comptroller of the Currency.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(2) does not affect the validity of any right, 
        duty, or obligation of the United States, the Comptroller of the 
        Currency, the Office of the Comptroller of the Currency, or any 
        other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                Comptroller of the Currency transferred to the Bureau by 
                this title; and

[[Page 124 STAT. 2042]]

                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Comptroller of 
        the Currency (or the Office of the Comptroller of the Currency) 
        with respect to any consumer financial protection function of 
        the Comptroller of the Currency transferred to the Bureau by 
        this title before the designated transfer date, except that the 
        Bureau, subject to sections 1024, 1025, and 1026, shall be 
        substituted for the Comptroller of the Currency (or the Office 
        of the Comptroller of the Currency) as a party to any such 
        proceeding as of the designated transfer date.

    (f) Office of Thrift Supervision.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(3) does not affect the validity of any right, 
        duty, or obligation of the United States, the Director of the 
        Office of Thrift Supervision, the Office of Thrift Supervision, 
        or any other person, that--
                    (A) arises under any provision of law relating to 
                any consumer financial protection function of the 
                Director of the Office of Thrift Supervision transferred 
                to the Bureau by this title; and
                    (B) that existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--No provision of this Act shall 
        abate any proceeding commenced by or against the Director of the 
        Office of Thrift Supervision (or the Office of Thrift 
        Supervision) with respect to any consumer financial protection 
        function of the Director of the Office of Thrift Supervision 
        transferred to the Bureau by this title before the designated 
        transfer date, except that the Bureau, subject to sections 1024, 
        1025, and 1026, shall be substituted for the Director (or the 
        Office of Thrift Supervision) as a party to any such proceeding 
        as of the designated transfer date.

    (g) Department of Housing and Urban Development.--
            (1) Existing rights, duties, and obligations not affected.--
        Section 1061(b)(7) shall not affect the validity of any right, 
        duty, or obligation of the United States, the Secretary of the 
        Department of Housing and Urban Development (or the Department 
        of Housing and Urban Development), or any other person, that--
                    (A) arises under any provision of law relating to 
                any function of the Secretary of the Department of 
                Housing and Urban Development with respect to the Real 
                Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 
                et seq.), the Secure and Fair Enforcement for Mortgage 
                Licensing Act of 2008 (12 U.S.C. 5102 et seq.), or the 
                Interstate Land Sales Full Disclosure Act (15 U.S.C. 
                1701 et seq) transferred to the Bureau by this title; 
                and
                    (B) existed on the day before the designated 
                transfer date.
            (2) Continuation of suits.--This title shall not abate any 
        proceeding commenced by or against the Secretary of the 
        Department of Housing and Urban Development (or the Department 
        of Housing and Urban Development) with respect to any consumer 
        financial protection function of the Secretary

[[Page 124 STAT. 2043]]

        of the Department of Housing and Urban Development transferred 
        to the Bureau by this title before the designated transfer date, 
        except that the Bureau, subject to sections 1024, 1025, and 
        1026, shall be substituted for the Secretary of the Department 
        of Housing and Urban Development (or the Department of Housing 
        and Urban Development) as a party to any such proceeding as of 
        the designated transfer date.

    (h) Continuation of Existing Orders, Rulings, Determinations, 
Agreements, and Resolutions.--
            (1) In general.--Except as provided in paragraph (2) and 
        under subsection (i), all orders, resolutions, determinations, 
        agreements, and rulings that have been issued, made, prescribed, 
        or allowed to become effective by any transferor agency or by a 
        court of competent jurisdiction, in the performance of consumer 
        financial protection functions that are transferred by this 
        title and that are in effect on the day before the designated 
        transfer date, shall continue in effect, and shall continue to 
        be enforceable by the appropriate transferor agency, according 
        to the terms of those orders, resolutions, determinations, 
        agreements, and rulings, and shall not be enforceable by or 
        against the Bureau.
            (2) Exception for orders applicable to persons described in 
        section 1025(a).--All orders, resolutions, determinations, 
        agreements, and rulings that have been issued, made, prescribed, 
        or allowed to become effective by any transferor agency or by a 
        court of competent jurisdiction, in the performance of consumer 
        financial protection functions that are transferred by this 
        title and that are in effect on the day before the designated 
        transfer date with respect to any person described in section 
        1025(a), shall continue in effect, according to the terms of 
        those orders, resolutions, determinations, agreements, and 
        rulings, and shall be enforceable by or against the Bureau or 
        transferor agency.

    (i) Identification of Rules and Orders Continued.--Not later than 
the designated transfer date, the Bureau--
            (1) shall, after consultation with the head of each 
        transferor agency, identify the rules and orders that will be 
        enforced by the Bureau; and
            (2) <<NOTE: List. Federal Register, publication.>>  shall 
        publish a list of such rules and orders in the Federal Register.

    (j) Status of Rules Proposed or Not Yet Effective.--
            (1) Proposed rules.--Any proposed rule of a transferor 
        agency which that agency, in performing consumer financial 
        protection functions transferred by this title, has proposed 
        before the designated transfer date, but has not been published 
        as a final rule before that date, shall be deemed to be a 
        proposed rule of the Bureau.
            (2) Rules not yet effective.--Any interim or final rule of a 
        transferor agency which that agency, in performing consumer 
        financial protection functions transferred by this title, has 
        published before the designated transfer date, but which has not 
        become effective before that date, shall become effective as a 
        rule of the Bureau according to its terms.
SEC. 1064. <<NOTE: 12 USC 5584.>>  TRANSFER OF CERTAIN PERSONNEL.

    (a) <<NOTE: Determinations.>>  In General.--

[[Page 124 STAT. 2044]]

            (1) Certain federal reserve system employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Board of Governors shall--
                          (i) jointly determine the number of employees 
                      of the Board of Governors necessary to perform or 
                      support the consumer financial protection 
                      functions of the Board of Governors that are 
                      transferred to the Bureau by this title; and
                          (ii) consistent with the number determined 
                      under clause (i), jointly identify employees of 
                      the Board of Governors for transfer to the Bureau, 
                      in a manner that the Bureau and the Board of 
                      Governors, in their sole discretion, determine 
                      equitable.
                    (B) Identified employees transferred.--All employees 
                of the Board of Governors identified under subparagraph 
                (A)(ii) shall be transferred to the Bureau for 
                employment.
                    (C) Federal reserve bank employees.--Employees of 
                any Federal reserve bank who are performing consumer 
                financial protection functions on behalf of the Board of 
                Governors shall be treated as employees of the Board of 
                Governors for purposes of subparagraphs (A) and (B).
            (2) Certain fdic employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Board of Directors of the Federal Deposit 
                Insurance Corporation shall--
                          (i) jointly determine the number of employees 
                      of that Corporation necessary to perform or 
                      support the consumer financial protection 
                      functions of the Corporation that are transferred 
                      to the Bureau by this title; and
                          (ii) consistent with the number determined 
                      under clause (i), jointly identify employees of 
                      the Corporation for transfer to the Bureau, in a 
                      manner that the Bureau and the Board of Directors 
                      of the Corporation, in their sole discretion, 
                      determine equitable.
                    (B) Identified employees transferred.--All employees 
                of the Corporation identified under subparagraph (A)(ii) 
                shall be transferred to the Bureau for employment.
            (3) Certain ncua employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the National Credit Union Administration Board 
                shall--
                          (i) jointly determine the number of employees 
                      of the National Credit Union Administration 
                      necessary to perform or support the consumer 
                      financial protection functions of the National 
                      Credit Union Administration that are transferred 
                      to the Bureau by this title; and
                          (ii) consistent with the number determined 
                      under clause (i), jointly identify employees of 
                      the National Credit Union Administration for 
                      transfer to the Bureau, in a manner that the 
                      Bureau and the National Credit Union 
                      Administration Board, in their sole discretion, 
                      determine equitable.

[[Page 124 STAT. 2045]]

                    (B) Identified employees transferred.--All employees 
                of the National Credit Union Administration identified 
                under subparagraph (A)(ii) shall be transferred to the 
                Bureau for employment.
            (4) Certain office of the comptroller of the currency 
        employees transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Comptroller of the Currency shall--
                          (i) jointly determine the number of employees 
                      of the Office of the Comptroller of the Currency 
                      necessary to perform or support the consumer 
                      financial protection functions of the Office of 
                      the Comptroller of the Currency that are 
                      transferred to the Bureau by this title; and
                          (ii) consistent with the number determined 
                      under clause (i), jointly identify employees of 
                      the Office of the Comptroller of the Currency for 
                      transfer to the Bureau, in a manner that the 
                      Bureau and the Office of the Comptroller of the 
                      Currency, in their sole discretion, determine 
                      equitable.
                    (B) Identified employees transferred.--All employees 
                of the Office of the Comptroller of the Currency 
                identified under subparagraph (A)(ii) shall be 
                transferred to the Bureau for employment.
            (5) Certain office of thrift supervision employees 
        transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Director of the Office of Thrift Supervision 
                shall--
                          (i) jointly determine the number of employees 
                      of the Office of Thrift Supervision necessary to 
                      perform or support the consumer financial 
                      protection functions of the Office of Thrift 
                      Supervision that are transferred to the Bureau by 
                      this title; and
                          (ii) consistent with the number determined 
                      under clause (i), jointly identify employees of 
                      the Office of Thrift Supervision for transfer to 
                      the Bureau, in a manner that the Bureau and the 
                      Office of Thrift Supervision, in their sole 
                      discretion, determine equitable.
                    (B) Identified employees transferred.--All employees 
                of the Office of Thrift Supervision identified under 
                subparagraph (A)(ii) shall be transferred to the Bureau 
                for employment.
            (6) Certain employees of department of housing and urban 
        development transferred.--
                    (A) Identifying employees for transfer.--The Bureau 
                and the Secretary of the Department of Housing and Urban 
                Development shall--
                          (i) jointly determine the number of employees 
                      of the Department of Housing and Urban Development 
                      necessary to perform or support the consumer 
                      protection functions of the Department that are 
                      transferred to the Bureau by this title; and
                          (ii) consistent with the number determined 
                      under clause (i), jointly identify employees of 
                      the Department of Housing and Urban Development 
                      for transfer to the Bureau in a manner that the 
                      Bureau and the

[[Page 124 STAT. 2046]]

                      Secretary of the Department of Housing and Urban 
                      Development, in their sole discretion, deem 
                      equitable.
                    (B) Identified employees transferred.--All employees 
                of the Department of Housing and Urban Development 
                identified under subparagraph (A)(ii) shall be 
                transferred to the Bureau for employment.
            (7) Consumer education, financial literacy, consumer 
        complaints, and research functions.--The Bureau and each of the 
        transferor agencies (except the Federal Trade Commission) shall 
        jointly determine the number of employees and the types and 
        grades of employees necessary to perform the functions of the 
        Bureau under subtitle A, including consumer education, financial 
        literacy, policy analysis, responses to consumer complaints and 
        inquiries, research, and similar functions. All employees 
        jointly identified under this paragraph shall be transferred to 
        the Bureau for employment.
            (8) Authority of the president to resolve disputes.--
                    (A) Action authorized.--In the event that the Bureau 
                and a transferor agency are unable to reach an agreement 
                under paragraphs (1) through (7) by the designated 
                transfer date, the President, or the designee thereof, 
                may issue an order or directive to the transferor agency 
                to effect the transfer of personnel and property under 
                this subtitle.
                    (B) Transmittal to congress required.--If an order 
                or directive is issued under subparagraph (A), the 
                President shall transmit a copy of the written 
                determination made with respect to such order or 
                directive, including an explanation for the need for the 
                order or directive, to the Committee on Banking, 
                Housing, and Urban Affairs and the Committee on 
                Appropriations of the Senate and the Committee on 
                Financial Services and the Committee on Appropriations 
                of the House of Representatives.
                    (C) Sunset.--The authority provided in this 
                paragraph shall terminate 3 years after the designated 
                transfer date.
            (9) Appointment authority for excepted service and senior 
        executive service transferred.--
                    (A) In general.--In the case of an employee 
                occupying a position in the excepted service or the 
                Senior Executive Service, any appointment authority 
                established pursuant to law or regulations of the Office 
                of Personnel Management for filling such positions shall 
                be transferred, subject to subparagraph (B).
                    (B) Declining transfers allowed.--An agency or 
                entity may decline to make a transfer of authority under 
                subparagraph (A) (and the employees appointed pursuant 
                thereto) to the extent that such authority relates to 
                positions excepted from the competitive service because 
                of their confidential, policy-making, policy-
                determining, or policy-advocating character, and non-
                career positions in the Senior Executive Service (within 
                the meaning of section 3132(a)(7) of title 5, United 
                States Code).

    (b) Timing of Transfers and Position Assignments.--Each employee to 
be transferred under this section shall--
            (1) be transferred not later than 90 days after the 
        designated transfer date; and
            (2) receive notice of a position assignment not later than 
        120 days after the effective date of his or her transfer.

[[Page 124 STAT. 2047]]

    (c) Transfer of Function.--
            (1) In general.--Notwithstanding any other provision of law, 
        the transfer of employees shall be deemed a transfer of 
        functions for the purpose of section 3503 of title 5, United 
        States Code.
            (2) Priority of this title.--If any provisions of this title 
        conflict with any protection provided to transferred employees 
        under section 3503 of title 5, United States Code, the 
        provisions of this title shall control.

    (d) Equal Status and Tenure Positions.--
            (1) Employees transferred from the federal reserve system, 
        fdic, hud, ncua, occ, and ots.--Each employee transferred to the 
        Bureau from the Board of Governors, a Federal reserve bank, the 
        Federal Deposit Insurance Corporation, the Department of Housing 
        and Urban Development, the National Credit Union Administration, 
        the Office of the Comptroller of the Currency, or the Office of 
        Thrift Supervision shall be placed in a position at the Bureau 
        with the same status and tenure as that employee held on the day 
        before the designated transfer date.
            (2) Employees transferred from the federal reserve system.--
        For purposes of determining the status and position placement of 
        a transferred employee, any period of service with the Board of 
        Governors or a Federal reserve bank shall be credited as a 
        period of service with a Federal agency.

    (e) Additional Certification Requirements Limited.--Examiners 
transferred to the Bureau are not subject to any additional 
certification requirements before being placed in a comparable examiner 
position at the Bureau examining the same types of institutions as they 
examined before they were transferred.
    (f) Personnel Actions Limited.--
            (1) 2-year protection.--Except as provided in paragraph (2), 
        each transferred employee holding a permanent position on the 
        day before the designated transfer date may not, during the 2-
        year period beginning on the designated transfer date, be 
        involuntarily separated, or involuntarily reassigned outside his 
        or her locality pay area.
            (2) Exceptions.--Paragraph (1) does not limit the right of 
        the Bureau--
                    (A) to separate an employee for cause or for 
                unacceptable performance;
                    (B) to terminate an appointment to a position 
                excepted from the competitive service because of its 
                confidential policy-making, policy-determining, or 
                policy-advocating character; or
                    (C) to reassign a supervisory employee outside of 
                his or her locality pay area when the Bureau determines 
                that the reassignment is necessary for the efficient 
                operation of the Bureau.

    (g) Pay.--
            (1) 2-year protection.--
                    (A) In general.--Except as provided in paragraph 
                (2), each transferred employee shall, during the 2-year 
                period beginning on the designated transfer date, 
                receive pay at a rate equal to not less than the basic 
                rate of pay (including any geographic differential) that 
                the employee received

[[Page 124 STAT. 2048]]

                during the pay period immediately preceding the date of 
                transfer.
                    (B) Limitation.--Notwithstanding subparagraph (A), 
                if the employee was receiving a higher rate of basic pay 
                on a temporary basis (because of a temporary assignment, 
                temporary promotion, or other temporary action) 
                immediately before the date of transfer, the Bureau may 
                reduce the rate of basic pay on the date on which the 
                rate would have been reduced but for the transfer, and 
                the protected rate for the remainder of the 2-year 
                period shall be the reduced rate that would have 
                applied, but for the transfer.
            (2) Exceptions.--Paragraph (1) does not limit the right of 
        the Bureau to reduce the rate of basic pay of a transferred 
        employee--
                    (A) for cause;
                    (B) for unacceptable performance; or
                    (C) with the consent of the employee.
            (3) <<NOTE: Applicability.>>  Protection only while 
        employed.--Paragraph (1) applies to a transferred employee only 
        while that employee remains employed by the Bureau.
            (4) Pay increases permitted.--Paragraph (1) does not limit 
        the authority of the Bureau to increase the pay of a transferred 
        employee.

    (h) Reorganization.--
            (1) Between 1st and 3rd year.--
                    (A) In general.--If the <<NOTE: Determination. Time 
                period.>>  Bureau determines, during the 2-year period 
                beginning 1 year after the designated transfer date, 
                that a reorganization of the staff of the Bureau is 
                required--
                          (i) that reorganization shall be deemed a 
                      ``substantial reorganization'' for purposes of 
                      affording affected employees retirement under 
                      section 8336(d)(2) or 8414(b)(1)(B) of title 5, 
                      United States Code;
                          (ii) before the reorganization occurs, all 
                      employees in the same locality pay area as defined 
                      by the Office of Personnel Management shall be 
                      placed in a uniform position classification 
                      system; and
                          (iii) any resulting reduction in force shall 
                      be governed by the provisions of chapter 35 of 
                      title 5, United States Code, except that the 
                      Bureau shall--
                                    (I) establish competitive areas (as 
                                that term is defined in regulations 
                                issued by the Office of Personnel 
                                Management) to include at a minimum all 
                                employees in the same locality pay area 
                                as defined by the Office of Personnel 
                                Management;
                                    (II) establish competitive levels 
                                (as that term is defined in regulations 
                                issued by the Office of Personnel 
                                Management) without regard to whether 
                                the particular employees have been 
                                appointed to positions in the 
                                competitive service or the excepted 
                                service; and
                                    (III) afford employees appointed to 
                                positions in the excepted service (other 
                                than to a position excepted from the 
                                competitive service because of its 
                                confidential policy-making, policy-
                                determining, or policy-advocating 
                                character) the same assignment rights to 
                                positions within the Bureau as

[[Page 124 STAT. 2049]]

                                employees appointed to positions in the 
                                competitive service.
                    (B) Service credit for reductions in force.--For 
                purposes of this paragraph, periods of service with a 
                Federal home loan bank, a joint office of the Federal 
                home loan banks, the Board of Governors, a Federal 
                reserve bank, the Federal Deposit Insurance Corporation, 
                or the National Credit Union Administration shall be 
                credited as periods of service with a Federal agency.
            (2) After 3rd year.--
                    (A) In general.--If the Bureau determines, at any 
                time after the 3-year period beginning on the designated 
                transfer date, that a reorganization of the staff of the 
                Bureau is required, any resulting reduction in force 
                shall be governed by the provisions of chapter 35 of 
                title 5, United States Code, except that the Bureau 
                shall establish competitive levels (as that term is 
                defined in regulations issued by the Office of Personnel 
                Management) without regard to types of appointment held 
                by particular employees transferred under this section.
                    (B) Service credit for reductions in force.--For 
                purposes of this paragraph, periods of service with a 
                Federal home loan bank, a joint office of the Federal 
                home loan banks, the Board of Governors, a Federal 
                reserve bank, the Federal Deposit Insurance Corporation, 
                or the National Credit Union Administration shall be 
                credited as periods of service with a Federal agency.

    (i) Benefits.--
            (1) Retirement benefits for transferred employees.--
                    (A) In general.--
                          (i) Continuation of existing retirement 
                      plan.--Unless an election is made under clause 
                      (iii) or subparagraph (B), each employee 
                      transferred pursuant to this subtitle shall remain 
                      enrolled in the existing retirement plan of that 
                      employee as of the date of transfer, through any 
                      period of continuous employment with the Bureau.
                          (ii) Employer contribution.--The 
                      Bureau <<NOTE: Payments.>>  shall pay any employer 
                      contributions to the existing retirement plan of 
                      each transferred employee, as required under that 
                      plan.
                          (iii) Option to elect into the federal reserve 
                      system retirement plan and federal reserve system 
                      thrift plan.--Any employee transferred pursuant to 
                      this subtitle may, during the 1-year period 
                      beginning 6 months after the designated transfer 
                      date, elect to end their participation and benefit 
                      accruals under their existing retirement plan or 
                      plans and elect to participate in both the Federal 
                      Reserve System Retirement Plan and the Federal 
                      Reserve System Thrift Plan, through any period of 
                      continuous employment with the Bureau, under the 
                      same terms as are applicable to Federal Reserve 
                      System transferred employees, as provided in 
                      subparagraph (C). <<NOTE: Effective date.>>  An 
                      election of coverage by the Federal Reserve System 
                      Retirement Plan and the Federal Reserve System 
                      Thrift Plan shall begin on the day following the 
                      end of the 18-

[[Page 124 STAT. 2050]]

                      month period beginning on the designated transfer 
                      date, and benefit accruals under the existing 
                      retirement plan of the transferred employee shall 
                      end on the last day of the 18-month period 
                      beginning on the designated transfer date If an 
                      employee elects to participate in the Federal 
                      Reserve System Retirement Plan and the Federal 
                      Reserve System Thrift Plan, all of the service of 
                      the employee that was creditable under their 
                      existing retirement plan shall be transferred to 
                      the Federal Reserve System Retirement Plan on the 
                      day following the end of the 18-month period 
                      beginning on the designated transfer date.
                          (iv) Bureau contribution.--The Bureau shall 
                      pay an employer contribution to the Federal 
                      Reserve System Retirement Plan, in the amount 
                      established as an employer contribution under the 
                      Federal Employees Retirement System, as 
                      established under chapter 84 of title 5, United 
                      States Code, for each Bureau employee who elects 
                      to participate in the Federal Reserve System 
                      Retirement Plan under this subparagraph. The 
                      Bureau shall pay an employer contribution to the 
                      Federal Reserve System Thrift Plan for each Bureau 
                      employee who elects to participate in such plan, 
                      as required under the terms of the Federal Reserve 
                      System Thrift Plan.
                          (v) Additional funding.--The Bureau shall 
                      transfer to the Federal Reserve System Retirement 
                      Plan an amount determined by the Board of 
                      Governors, in consultation with the Bureau, to be 
                      necessary to reimburse the Federal Reserve System 
                      Retirement Plan for the costs to such plan of 
                      providing benefits to employees electing coverage 
                      under the Federal Reserve System Retirement Plan 
                      under subparagraph (iii), and who were transferred 
                      to the Bureau from outside of the Federal Reserve 
                      System.
                          (vi) Option to elect into thrift plan created 
                      by the bureau.--If the Bureau chooses to establish 
                      a thrift plan, the employees transferred pursuant 
                      to this subtitle shall have the option to elect, 
                      under such terms and conditions as the Bureau may 
                      establish, coverage under such a thrift plan 
                      established by the Bureau. Transferred employees 
                      may not remain in the thrift plan of the agency 
                      from which the employee transferred under this 
                      subtitle, if the employee elects to participate in 
                      a thrift plan established by the Bureau.
                    (B) Option for employees transferred from federal 
                reserve system to be subject to the federal employee 
                retirement program.--
                          (i) Election.--Any Federal Reserve System 
                      transferred employee who was enrolled in the 
                      Federal Reserve System Retirement Plan on the day 
                      before the date of his or her transfer to the 
                      Bureau may, during the 1-year period beginning 6 
                      months after the designated transfer date, elect 
                      to be subject to the Federal Employee Retirement 
                      Program.

[[Page 124 STAT. 2051]]

                          (ii) Effective date of coverage.--An election 
                      of coverage by the Federal Employee Retirement 
                      Program under this subparagraph shall begin on the 
                      day following the end of the 18-month period 
                      beginning on the designated transfer date, and 
                      benefit accruals under the existing retirement 
                      plan of the Federal Reserve System transferred 
                      employee shall end on the last day of the 18-month 
                      period beginning on the designated transfer date.
                    (C) Bureau participation in federal reserve system 
                retirement plan.--
                          (i) Benefits provided.--Federal Reserve System 
                      employees transferred pursuant to this subtitle 
                      shall continue to be eligible to participate in 
                      the Federal Reserve System Retirement Plan and 
                      Federal Reserve System Thrift Plan through any 
                      period of continuous employment with the Bureau, 
                      unless the employee makes an election under 
                      subparagraph (A)(vi) or (B). The retirement 
                      benefits, formulas, and features offered to the 
                      Federal Reserve System transferred employees shall 
                      be the same as those offered to employees of the 
                      Board of Governors who participate in the Federal 
                      Reserve System Retirement Plan and the Federal 
                      Reserve System Thrift Plan, as amended from time 
                      to time.
                          (ii) Limitation.--The Bureau shall not have 
                      responsibility or authority--
                                    (I) to amend an existing retirement 
                                plan (including the Federal Reserve 
                                System Retirement Plan or Federal 
                                Reserve System Thrift Plan);
                                    (II) for administering an existing 
                                retirement plan (including the Federal 
                                Reserve System Retirement Plan or 
                                Federal Reserve System Thrift Plan); or
                                    (III) for ensuring the plans comply 
                                with applicable laws, fiduciary rules, 
                                and related responsibilities.
                          (iii) Tax qualified status.--Notwithstanding 
                      any other provision of law, providing benefits to 
                      Federal Reserve System employees transferred to 
                      the Bureau pursuant to this subtitle, and to 
                      employees who elect coverage pursuant to 
                      subparagraph (A)(iii) or under section 
                      1013(a)(2)(B), shall not cause any existing 
                      retirement plan (including the Federal Reserve 
                      System Retirement Plan and the Federal Reserve 
                      System Thrift Plan) to lose its tax-qualified 
                      status under sections 401(a) and 501(a) of the 
                      Internal Revenue Code of 1986.
                          (iv) Bureau contribution.--The Bureau shall 
                      pay any employer contributions to the existing 
                      retirement plan (including the Federal Reserve 
                      System Retirement Plan and the Federal Reserve 
                      System Thrift Plan) for each Federal Reserve 
                      System transferred employee participating in those 
                      plans, as required under the plan, after the 
                      designated transfer date.
                          (v) Controlled group status.--The Bureau is 
                      the same employer as the Federal Reserve System

[[Page 124 STAT. 2052]]

                      (as comprised of the Board of Governors and each 
                      of the 12 Federal reserve banks prior to the date 
                      of enactment of this Act) for purposes of 
                      subsections (b), (c), (m), and (o) of section 414 
                      of the Internal Revenue Code of 1986 (26 U.S.C. 
                      414).
                    (D) Definitions.--For purposes of this paragraph--
                          (i) the term ``existing retirement plan'' 
                      means, with respect to an employee transferred 
                      pursuant to this subtitle, the retirement plan 
                      (including the Financial Institutions Retirement 
                      Fund) and any associated thrift savings plan, of 
                      the agency from which the employee was transferred 
                      under this subtitle, in which the employee was 
                      enrolled on the day before the date on which the 
                      employee was transferred;
                          (ii) the term ``Federal Employee Retirement 
                      Program'' means either the Civil Service 
                      Retirement System established under chapter 83 of 
                      title 5, United States Code, or the Federal 
                      Employees Retirement System established under 
                      chapter 84 of title 5, United States Code, 
                      depending upon the service history of the 
                      individual;
                          (iii) the term ``Federal Reserve System 
                      transferred employee'' means a transferred 
                      employee who is an employee of the Board of 
                      Governors or a Federal reserve bank on the day 
                      before the designated transfer date, and who is 
                      transferred to the Bureau on the designated 
                      transfer date pursuant to this subtitle;
                          (iv) the term ``Federal Reserve System 
                      Retirement Plan'' means the Retirement Plan for 
                      Employees of the Federal Reserve System; and
                          (v) the term ``Federal Reserve System Thrift 
                      Plan'' means the Thrift Plan for Employees of the 
                      Federal Reserve System.
            (2) Benefits other than retirement benefits for transferred 
        employees.--
                    (A) During 1st year.--
                          (i) Existing plans continue.--Each employee 
                      transferred pursuant to this subtitle may, for 1 
                      year after the designated transfer date, retain 
                      membership in any other employee benefit program 
                      of the agency or bank from which the employee 
                      transferred, including a medical, dental, vision, 
                      long term care, or life insurance program, to 
                      which the employee belonged on the day before the 
                      designated transfer date.
                          (ii) Employer contribution.--The Bureau shall 
                      reimburse the agency or bank from which an 
                      employee was transferred for any cost incurred by 
                      that agency or bank in continuing to extend 
                      coverage in the benefit program to the employee, 
                      as required under that program or negotiated 
                      agreements.
                    (B) Medical, dental, vision, or life insurance after 
                first year.--If, at the end of the 1-year period 
                beginning on the designated transfer date, the Bureau 
                has not established its own, or arranged for 
                participation in another entity's, medical, dental, 
                vision, or life insurance program, an employee 
                transferred pursuant to this subtitle who was a member 
                of such a program at the agency or

[[Page 124 STAT. 2053]]

                Federal reserve bank from which the employee transferred 
                may, before the coverage of that employee ends under 
                subparagraph (A)(i), elect to enroll, without regard to 
                any regularly scheduled open season, in--
                          (i) the enhanced dental benefits program 
                      established under chapter 89A of title 5, United 
                      States Code;
                          (ii) the enhanced vision benefits established 
                      under chapter 89B of title 5, United States Code;
                          (iii) the Federal Employees Group Life 
                      Insurance Program established under chapter 87 of 
                      title 5, United States Code, without regard to any 
                      requirement of insurability; and
                          (iv) the Federal Employees Health Benefits 
                      Program established under chapter 89 of title 5, 
                      United States Code.
                    (C) Long term care insurance after 1st year.--If, at 
                the end of the 1-year period beginning on the designated 
                transfer date, the Bureau has not established its own, 
                or arranged for participation in another entity's, long 
                term care insurance program, an employee transferred 
                pursuant to this subtitle who was a member of such a 
                program at the agency or Federal reserve bank from which 
                the employee transferred may, before the coverage of 
                that employee ends under subparagraph (A)(i), elect to 
                apply for coverage under the Federal Long Term Care 
                Insurance Program established under chapter 90 of title 
                5, United States Code, under the underwriting 
                requirements applicable to a new active workforce member 
                (as defined in part 875 of title 5, Code of Federal 
                Regulations).
                    (D) Employee contribution.--An individual enrolled 
                in the Federal Employees Health Benefits program shall 
                pay any employee contribution required by the plan.
                    (E) Additional funding.--The Bureau shall transfer 
                to the Federal Employees Health Benefits Fund 
                established under section 8909 of title 5, United States 
                Code, an amount determined by the Director of the Office 
                of Personnel Management, after consultation with the 
                Bureau and the Office of Management and Budget, to be 
                necessary to reimburse the Fund for the cost to the Fund 
                of providing benefits under this paragraph.
                    (F) Credit for time enrolled in other plans.--For 
                employees transferred under this title, enrollment in a 
                health benefits plan administered by a transferor agency 
                or a Federal reserve bank, as the case may be, 
                immediately before enrollment in a health benefits plan 
                under chapter 89 of title 5, United States Code, shall 
                be considered as enrollment in a health benefits plan 
                under that chapter for purposes of section 8905(b)(1)(A) 
                of title 5, United States Code.
                    (G) Special provisions to ensure continuation of 
                life insurance benefits.--
                          (i) In general.--An annuitant (as defined in 
                      section 8901(3) of title 5, United States Code) 
                      who is enrolled in a life insurance plan 
                      administered by a transferor agency on the day 
                      before the designated transfer date shall be 
                      eligible for coverage by a life

[[Page 124 STAT. 2054]]

                      insurance plan under sections 8706(b), 8714a, 
                      8714b, and 8714c of title 5, United States Code, 
                      or in a life insurance plan established by the 
                      Bureau, without regard to any regularly scheduled 
                      open season and requirement of insurability.
                          (ii) Employee contribution.--An individual 
                      enrolled in a life insurance plan under this 
                      subparagraph shall pay any employee contribution 
                      required by the plan.
                          (iii) Additional funding.--The Bureau shall 
                      transfer to the Employees' Life Insurance Fund 
                      established under section 8714 of title 5, United 
                      States Code, an amount determined by the Director 
                      of the Office of Personnel Management, after 
                      consultation with the Bureau and the Office of 
                      Management and Budget, to be necessary to 
                      reimburse the Fund for the cost to the Fund of 
                      providing benefits under this subparagraph not 
                      otherwise paid for by the employee under clause 
                      (ii).
                          (iv) Credit for time enrolled in other 
                      plans.--For employees transferred under this 
                      title, enrollment in a life insurance plan 
                      administered by a transferor agency immediately 
                      before enrollment in a life insurance plan under 
                      chapter 87 of title 5, United States Code, shall 
                      be considered as enrollment in a life insurance 
                      plan under that chapter for purposes of section 
                      8706(b)(1)(A) of title 5, United States Code.
            (3) OPM rules.--The Office of Personnel Management shall 
        issue such rules as are necessary to carry out this subsection.

    (j) Implementation of Uniform Pay and Classification System.--Not 
later <<NOTE: Deadline.>>  than 2 years after the designated transfer 
date, the Bureau shall implement a uniform pay and classification system 
for all employees transferred under this title.

    (k) Equitable Treatment.--In administering the provisions of this 
section, the Bureau--
            (1) shall take no action that would unfairly disadvantage 
        transferred employees relative to each other based on their 
        prior employment by the Board of Governors, the Federal Deposit 
        Insurance Corporation, the Department of Housing and Urban 
        Development, the National Credit Union Administration, the 
        Office of the Comptroller of the Currency, the Office of Thrift 
        Supervision, a Federal reserve bank, a Federal home loan bank, 
        or a joint office of the Federal home loan banks; and
            (2) may take such action as is appropriate in individual 
        cases so that employees transferred under this section receive 
        equitable treatment, with respect to the status, tenure, pay, 
        benefits (other than benefits under programs administered by the 
        Office of Personnel Management), and accrued leave or vacation 
        time of those employees, for prior periods of service with any 
        Federal agency, including the Board of Governors, the 
        Corporation, the Department of Housing and Urban Development, 
        the National Credit Union Administration, the Office of the 
        Comptroller of the Currency, the Office of Thrift Supervision, a 
        Federal reserve bank, a Federal home loan bank, or a joint 
        office of the Federal home loan banks.

[[Page 124 STAT. 2055]]

    (l) Implementation.--In implementing the provisions of this section, 
the Bureau shall coordinate with the Office of Personnel Management and 
other entities having expertise in matters related to employment to 
ensure a fair and orderly transition for affected employees.
SEC. 1065. <<NOTE: 12 USC 5585.>>  INCIDENTAL TRANSFERS.

    (a) Incidental Transfers Authorized.--The Director of the Office of 
Management and Budget, in consultation with the Secretary, shall make 
such additional incidental transfers and dispositions of assets and 
liabilities held, used, arising from, available, or to be made 
available, in connection with the functions transferred by this title, 
as the Director may determine necessary to accomplish the purposes of 
this title.
    (b) Sunset.--The authority provided in this section shall terminate 
5 years after the date of enactment of this Act.
SEC. 1066. <<NOTE: 12 USC 5586.>>  INTERIM AUTHORITY OF THE 
                          SECRETARY.

    (a) In General.--The Secretary is authorized to perform the 
functions of the Bureau under this subtitle until the Director of the 
Bureau is confirmed by the Senate in accordance with section 1011.
    (b) Interim Administrative Services by the Department of the 
Treasury.--The Department of the Treasury may provide administrative 
services necessary to support the Bureau before the designated transfer 
date.
SEC. 1067. <<NOTE: 12 USC 5587.>>  TRANSITION OVERSIGHT.

    (a) Purpose.--The purpose of this section is to ensure that the 
Bureau--
            (1) has an orderly and organized startup;
            (2) attracts and retains a qualified workforce; and
            (3) establishes comprehensive employee training and benefits 
        programs.

    (b) Reporting Requirement.--
            (1) In general.--The Bureau shall submit an annual report to 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives that includes the plans described in paragraph 
        (2).
            (2) Plans.--The plans described in this paragraph are as 
        follows:
                    (A) Training and workforce development plan.--The 
                Bureau shall submit a training and workforce development 
                plan that includes, to the extent practicable--
                          (i) identification of skill and technical 
                      expertise needs and actions taken to meet those 
                      requirements;
                          (ii) steps taken to foster innovation and 
                      creativity;
                          (iii) leadership development and succession 
                      planning; and
                          (iv) effective use of technology by employees.
                    (B) Workplace flexibilities plan.--The Bureau shall 
                submit a workforce flexibility plan that includes, to 
                the extent practicable--
                          (i) telework;
                          (ii) flexible work schedules;
                          (iii) phased retirement;
                          (iv) reemployed annuitants;

[[Page 124 STAT. 2056]]

                          (v) part-time work;
                          (vi) job sharing;
                          (vii) parental leave benefits and childcare 
                      assistance;
                          (viii) domestic partner benefits;
                          (ix) other workplace flexibilities; or
                          (x) any combination of the items described in 
                      clauses (i) through (ix).
                    (C) Recruitment and retention plan.--The Bureau 
                shall submit a recruitment and retention plan that 
                includes, to the extent practicable, provisions relating 
                to--
                          (i) the steps necessary to target highly 
                      qualified applicant pools with diverse 
                      backgrounds;
                          (ii) streamlined employment application 
                      processes;
                          (iii) the provision of timely notification of 
                      the status of employment applications to 
                      applicants; and
                          (iv) the collection of information to measure 
                      indicators of hiring effectiveness.

    (c) Expiration.--The reporting requirement under subsection (b) 
shall terminate 5 years after the date of enactment of this Act.
    (d) Rule of Construction.--Nothing in this section may be construed 
to affect--
            (1) a collective bargaining agreement, as that term is 
        defined in section 7103(a)(8) of title 5, United States Code, 
        that is in effect on the date of enactment of this Act; or
            (2) the rights of employees under chapter 71 of title 5, 
        United States Code.

    (e) Participation in Examinations.--In order to prepare the Bureau 
to conduct examinations under section 1025 upon the designated transfer 
date, the Bureau and the applicable prudential regulator may agree to 
include, on a sampling basis, examiners on examinations of the 
compliance with Federal consumer financial law of institutions described 
in section 1025(a) conducted by the prudential regulators prior to the 
designated transfer date.

                   Subtitle G--Regulatory Improvements

SEC. 1071. SMALL BUSINESS DATA COLLECTION.

    (a) In General.--The Equal Credit Opportunity Act (15 U.S.C. 1691 et 
seq.) is amended by inserting after section 704A the following:
``SEC. 704B. <<NOTE: 15 USC 1691o-2.>>  SMALL BUSINESS LOAN DATA 
                          COLLECTION.

    ``(a) Purpose.--The purpose of this section is to facilitate 
enforcement of fair lending laws and enable communities, governmental 
entities, and creditors to identify business and community development 
needs and opportunities of women-owned, minority-owned, and small 
businesses.
    ``(b) Information Gathering.--Subject to the requirements of this 
section, in the case of any application to a financial institution for 
credit for women-owned, minority-owned, or small business, the financial 
institution shall--
            ``(1) inquire whether the business is a women-owned, 
        minority-owned, or small business, without regard to whether 
        such application is received in person, by mail, by telephone,

[[Page 124 STAT. 2057]]

        by electronic mail or other form of electronic transmission, or 
        by any other means, and whether or not such application is in 
        response to a solicitation by the financial institution; and
            ``(2) <<NOTE: Records.>>  maintain a record of the responses 
        to such inquiry, separate from the application and accompanying 
        information.

    ``(c) Right To Refuse.--Any applicant for credit may refuse to 
provide any information requested pursuant to subsection (b) in 
connection with any application for credit.
    ``(d) No Access by Underwriters.--
            ``(1) Limitation.--Where feasible, no loan underwriter or 
        other officer or employee of a financial institution, or any 
        affiliate of a financial institution, involved in making any 
        determination concerning an application for credit shall have 
        access to any information provided by the applicant pursuant to 
        a request under subsection (b) in connection with such 
        application.
            ``(2) Limited access.--If 
        a <<NOTE: Determination. Notice.>>  financial institution 
        determines that a loan underwriter or other officer or employee 
        of a financial institution, or any affiliate of a financial 
        institution, involved in making any determination concerning an 
        application for credit should have access to any information 
        provided by the applicant pursuant to a request under subsection 
        (b), the financial institution shall provide notice to the 
        applicant of the access of the underwriter to such information, 
        along with notice that the financial institution may not 
        discriminate on the basis of such information.

    ``(e) Form and Manner of Information.--
            ``(1) In general.--Each financial <<NOTE: Records.>>  
        institution shall compile and maintain, in accordance with 
        regulations of the Bureau, a record of the information provided 
        by any loan applicant pursuant to a request under subsection 
        (b).
            ``(2) Itemization.--Information compiled and maintained 
        under paragraph (1) shall be itemized in order to clearly and 
        conspicuously disclose--
                    ``(A) the number of the application and the date on 
                which the application was received;
                    ``(B) the type and purpose of the loan or other 
                credit being applied for;
                    ``(C) the amount of the credit or credit limit 
                applied for, and the amount of the credit transaction or 
                the credit limit approved for such applicant;
                    ``(D) the type of action taken with respect to such 
                application, and the date of such action;
                    ``(E) the census tract in which is located the 
                principal place of business of the women-owned, 
                minority-owned, or small business loan applicant;
                    ``(F) the gross annual revenue of the business in 
                the last fiscal year of the women-owned, minority-owned, 
                or small business loan applicant preceding the date of 
                the application;
                    ``(G) the race, sex, and ethnicity of the principal 
                owners of the business; and
                    ``(H) any additional data that the Bureau determines 
                would aid in fulfilling the purposes of this section.
            ``(3) No personally identifiable information.--In compiling 
        and maintaining any record of information under this

[[Page 124 STAT. 2058]]

        section, a financial institution may not include in such record 
        the name, specific address (other than the census tract required 
        under paragraph (1)(E)), telephone number, electronic mail 
        address, or any other personally identifiable information 
        concerning any individual who is, or is connected with, the 
        women-owned, minority-owned, or small business loan applicant.
            ``(4) Discretion to delete or modify publicly available 
        data.--The Bureau may, at its discretion, delete or modify data 
        collected under this section which is or will be available to 
        the public, if the Bureau determines that the deletion or 
        modification of the data would advance a privacy interest.

    ``(f) Availability of Information.--
            ``(1) Submission to bureau.--The data <<NOTE: Deadline.>>  
        required to be compiled and maintained under this section by any 
        financial institution shall be submitted annually to the Bureau.
            ``(2) Availability of information.--Information compiled and 
        maintained under this section shall be--
                    ``(A) <<NOTE: Time period.>>  retained for not less 
                than 3 years after the date of preparation;
                    ``(B) made available to any member of the public, 
                upon request, in the form required under regulations 
                prescribed by the Bureau;
                    ``(C) annually made available to the public 
                generally by the Bureau, in such form and in such manner 
                as is determined by the Bureau, by regulation.
            ``(3) Compilation of aggregate data.--The Bureau may, at its 
        discretion--
                    ``(A) compile and aggregate data collected under 
                this section for its own use; and
                    ``(B) make public such compilations of aggregate 
                data.

    ``(g) Bureau Action.--
            ``(1) In general.--The Bureau shall prescribe such rules and 
        issue such guidance as may be necessary to carry out, enforce, 
        and compile data pursuant to this section.
            ``(2) Exceptions.--The Bureau, by rule or order, may adopt 
        exceptions to any requirement of this section and may, 
        conditionally or unconditionally, exempt any financial 
        institution or class of financial institutions from the 
        requirements of this section, as the Bureau deems necessary or 
        appropriate to carry out the purposes of this section.
            ``(3) Guidance.--The Bureau shall issue guidance designed to 
        facilitate compliance with the requirements of this section, 
        including assisting financial institutions in working with 
        applicants to determine whether the applicants are women-owned, 
        minority-owned, or small businesses for purposes of this 
        section.

    ``(h) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Financial institution.--The term `financial 
        institution' means any partnership, company, corporation, 
        association (incorporated or unincorporated), trust, estate, 
        cooperative organization, or other entity that engages in any 
        financial activity.
            ``(2) Small business.--The term `small business' has the 
        same meaning as the term `small business concern' in section 3 
        of the Small Business Act (15 U.S.C. 632).

[[Page 124 STAT. 2059]]

            ``(3) Small business loan.--The term `small business loan' 
        means a loan made to a small business.
            ``(4) Minority.--The term `minority' has the same meaning as 
        in section 1204(c)(3) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989.
            ``(5) Minority-owned business.--The term `minority-owned 
        business' means a business--
                    ``(A) more than 50 percent of the ownership or 
                control of which is held by 1 or more minority 
                individuals; and
                    ``(B) more than 50 percent of the net profit or loss 
                of which accrues to 1 or more minority individuals.
            ``(6) Women-owned business.--The term `women-owned business' 
        means a business--
                    ``(A) more than 50 percent of the ownership or 
                control of which is held by 1 or more women; and
                    ``(B) more than 50 percent of the net profit or loss 
                of which accrues to 1 or more women.''.

    (b) Technical and Conforming Amendments.--Section 701(b) of the 
Equal Credit Opportunity Act (15 U.S.C. 1691(b)) is amended--
            (1) in paragraph (3), by striking ``or'' at the end;
            (2) in paragraph (4), by striking the period at the end and 
        inserting ``; or''; and
            (3) by inserting after paragraph (4), the following:
            ``(5) to make an inquiry under section 704B, in accordance 
        with the requirements of that section.''.

    (c) <<NOTE: 15 USC 1691 note.>>  Clerical Amendment.--The table of 
sections for title VII of the Consumer Credit Protection Act is amended 
by inserting after the item relating to section 704A the following new 
item:

``704B. Small business loan data collection.''.

    (d) Effective Date.--This section shall become effective on the 
designated transfer date.
SEC. 1072. ASSISTANCE FOR ECONOMICALLY VULNERABLE INDIVIDUALS AND 
                          FAMILIES.

    (a) HERA Amendments.--Section 1132 of the Housing and Economic 
Recovery Act of 2008 (12 U.S.C. 1701x note) is amended--
            (1) in subsection (a), by inserting in each of paragraphs 
        (1), (2), (3), and (4) ``or economically vulnerable individuals 
        and families'' after ``homebuyers'' each place that term 
        appears;
            (2) in subsection (b)(1), by inserting ``or economically 
        vulnerable individuals and families'' after ``homebuyers'';
            (3) in subsection (c)(1)--
                    (A) in subparagraph (A), by striking ``or'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following:
                    ``(C) a nonprofit corporation that--
                          ``(i) is exempt from taxation under section 
                      501(c)(3) of the Internal Revenue Code of 1986; 
                      and
                          ``(ii) specializes or has expertise in working 
                      with economically vulnerable individuals and 
                      families, but whose primary purpose is not 
                      provision of credit counseling services.''; and
            (4) in subsection (d)(1), by striking ``not more than 5''.

[[Page 124 STAT. 2060]]

    (b) <<NOTE: 12 USC 1701x note.>>  Applicability.--Amendments made by 
subsection (a) shall not apply to programs authorized by section 1132 of 
the Housing and Economic Recovery Act of 2008 (12 U.S.C. 1701x note) 
that are funded with appropriations prior to fiscal year 2011.
SEC. 1073. <<NOTE: 12 USC 5601.>>  REMITTANCE TRANSFERS.

    (a) Treatment of Remittance Transfers.--The Electronic Fund Transfer 
Act (15 U.S.C. 1693 et seq.) is amended--
            (1) in section 902(b) (15 U.S.C. 1693(b)), by inserting 
        ``and remittance'' after ``electronic fund'';
            (2) in section 904(c) (15 U.S.C. 1693b(c)), in the first 
        sentence, by inserting ``or remittance transfers'' after 
        ``electronic fund transfers'';
            (3) by redesignating sections 919, 920, 921, and 
        922 <<NOTE: 15 USC 1693p-1693r, 1693 note.>>  as sections 920, 
        921, 922, and 923, respectively; and
            (4) by inserting after section 918 the following:
``SEC. 919. <<NOTE: 15 USC 1693o-1.>>  REMITTANCE TRANSFERS.

    ``(a) Disclosures Required for Remittance Transfers.--
            ``(1) In general.--Each remittance transfer provider shall 
        make disclosures as required under this section and in 
        accordance with rules prescribed by the Board. Disclosures 
        required under this section shall be in addition to any other 
        disclosures applicable under this title.
            ``(2) Disclosures.--Subject to rules prescribed by the 
        Board, a remittance transfer provider shall provide, in writing 
        and in a form that the sender may keep, to each sender 
        requesting a remittance transfer, as applicable to the 
        transaction--
                    ``(A) at the time at which the sender requests a 
                remittance transfer to be initiated, and prior to the 
                sender making any payment in connection with the 
                remittance transfer, a disclosure describing--
                          ``(i) the amount of currency that will be 
                      received by the designated recipient, using the 
                      values of the currency into which the funds will 
                      be exchanged;
                          ``(ii) the amount of transfer and any other 
                      fees charged by the remittance transfer provider 
                      for the remittance transfer; and
                          ``(iii) any exchange rate to be used by the 
                      remittance transfer provider for the remittance 
                      transfer, to the nearest 1/100th of a point; and
                    ``(B) at the time at which the sender makes payment 
                in connection with the remittance transfer--
                          ``(i) a receipt showing--
                                    ``(I) the information described in 
                                subparagraph (A);
                                    ``(II) the promised date of delivery 
                                to the designated recipient; and
                                    ``(III) the name and either the 
                                telephone number or the address of the 
                                designated recipient, if either the 
                                telephone number or the address of the 
                                designated recipient is provided by the 
                                sender; and
                          ``(ii) a statement containing--
                                    ``(I) information about the rights 
                                of the sender under this section 
                                regarding the resolution of errors; and

[[Page 124 STAT. 2061]]

                                    ``(II) appropriate contact 
                                information for--
                                            ``(aa) the remittance 
                                        transfer provider; and
                                            ``(bb) the State agency that 
                                        regulates the remittance 
                                        transfer provider and the Board, 
                                        including the toll-free 
                                        telephone number established 
                                        under section 1013 of the 
                                        Consumer Financial Protection 
                                        Act of 2010.
            ``(3) Requirements relating to disclosures.--With respect to 
        each disclosure required to be provided under paragraph (2) a 
        remittance transfer provider shall--
                    ``(A) <<NOTE: Notice.>>  provide an initial notice 
                and receipt, as required by subparagraphs (A) and (B) of 
                paragraph (2), and an error resolution statement, as 
                required by subsection (d), that clearly and 
                conspicuously describe the information required to be 
                disclosed therein; and
                    ``(B) with respect to any transaction that a sender 
                conducts electronically, comply with the Electronic 
                Signatures in Global and National Commerce Act (15 
                U.S.C. 7001 et seq.).
            ``(4) Exception for disclosures of amount received.--
                    ``(A) In general.--Subject to the rules prescribed 
                by the Board, and except as provided under subparagraph 
                (B), the disclosures required regarding the amount of 
                currency that will be received by the designated 
                recipient shall be deemed to be accurate, so long as the 
                disclosures provide a reasonably accurate estimate of 
                the foreign currency to be 
                received. <<NOTE: Applicability.>>  This paragraph shall 
                apply only to a remittance transfer provider who is an 
                insured depository institution, as defined in section 3 
                of the Federal Deposit Insurance Act (12 U.S.C. 1813), 
                or an insured credit union, as defined in section 101 of 
                the Federal Credit Union Act (12 U.S.C. 1752), and if--
                          ``(i) a remittance transfer is conducted 
                      through a demand deposit, savings deposit, or 
                      other asset account that the sender holds with 
                      such remittance transfer provider; and
                          ``(ii) at the time at which the sender 
                      requests the transaction, the remittance transfer 
                      provider is unable to know, for reasons beyond its 
                      control, the amount of currency that will be made 
                      available to the designated recipient.
                    ``(B) Deadline.--The application <<NOTE: Termination 
                date. Determination.>>  of subparagraph (A) shall 
                terminate 5 years after the date of enactment of the 
                Consumer Financial Protection Act of 2010, unless the 
                Board determines that termination of such provision 
                would negatively affect the ability of remittance 
                transfer providers described in subparagraph (A) to send 
                remittances to locations in foreign countries, in which 
                case, the Board may, by rule, extend the application of 
                subparagraph (A) to not longer than 10 years after the 
                date of enactment of the Consumer Financial Protection 
                Act of 2010.
            ``(5) Exemption authority.--The Board may, by rule, permit a 
        remittance transfer provider to satisfy the requirements of--
                    ``(A) paragraph (2)(A) orally, if the transaction is 
                conducted entirely by telephone;

[[Page 124 STAT. 2062]]

                    ``(B) <<NOTE: Deadline.>>  paragraph (2)(B), in the 
                case of a transaction conducted entirely by telephone, 
                by mailing the disclosures required under such 
                subparagraph to the sender, not later than 1 business 
                day after the date on which the transaction is 
                conducted, or by including such documents in the next 
                periodic statement, if the telephone transaction is 
                conducted through a demand deposit, savings deposit, or 
                other asset account that the sender holds with the 
                remittance transfer provider;
                    ``(C) subparagraphs (A) and (B) of paragraph (2) 
                together in one written disclosure, but only to the 
                extent that the information provided in accordance with 
                paragraph (3)(A) is accurate at the time at which 
                payment is made in connection with the subject 
                remittance transfer; and
                    ``(D) paragraph (2)(A), without compliance with 
                section 101(c) of the Electronic Signatures in Global 
                Commerce Act, if a sender initiates the transaction 
                electronically and the information is displayed 
                electronically in a manner that the sender can keep.
            ``(6) Storefront and internet notices.--
                    ``(A) In general.--
                          ``(i) Prominent posting.--Subject to 
                      subparagraph (B), the Board may prescribe rules to 
                      require a remittance transfer provider to 
                      prominently post, and timely update, a notice 
                      describing a model remittance transfer for one or 
                      more amounts, as the Board may determine, which 
                      notice shall show the amount of currency that will 
                      be received by the designated recipient, using the 
                      values of the currency into which the funds will 
                      be exchanged.
                          ``(ii) Onsite displays.--The Board may require 
                      the notice prescribed under this subparagraph to 
                      be displayed in every physical storefront location 
                      owned or controlled by the remittance transfer 
                      provider.
                          ``(iii) Internet notices.--Subject to 
                      paragraph (3), the Board shall prescribe rules to 
                      require a remittance transfer provider that 
                      provides remittance transfers via the Internet to 
                      provide a notice, comparable to a storefront 
                      notice described in this subparagraph, located on 
                      the home page or landing page (with respect to 
                      such remittance transfer services) owned or 
                      controlled by the remittance transfer provider.
                          ``(iv) Rulemaking authority.--In prescribing 
                      rules under this subparagraph, the Board may 
                      impose standards or requirements regarding the 
                      provision of the storefront and Internet notices 
                      required under this subparagraph and the provision 
                      of the disclosures required under paragraphs (2) 
                      and (3).
                    ``(B) Study and analysis.--Prior to proposing rules 
                under subparagraph (A), the Board shall undertake 
                appropriate studies and analyses, which shall be 
                consistent with section 904(a)(2), and may include an 
                advanced notice of proposed rulemaking, to determine 
                whether a storefront notice or Internet notice 
                facilitates the ability of a consumer--
                          ``(i) to compare prices for remittance 
                      transfers; and

[[Page 124 STAT. 2063]]

                          ``(ii) to understand the types and amounts of 
                      any fees or costs imposed on remittance transfers.

    ``(b) Foreign Language Disclosures.--The disclosures required under 
this section shall be made in English and in each of the foreign 
languages principally used by the remittance transfer provider, or any 
of its agents, to advertise, solicit, or market, either orally or in 
writing, at that office.
    ``(c) Regulations Regarding Transfers to Certain Nations.--If 
the <<NOTE: Deadline.>>  Board determines that a recipient nation does 
not legally allow, or the method by which transactions are made in the 
recipient country do not allow, a remittance transfer provider to know 
the amount of currency that will be received by the designated 
recipient, the Board may prescribe rules (not later than 18 months after 
the date of enactment of the Consumer Financial Protection Act of 2010) 
addressing the issue, which rules shall include standards for a 
remittance transfer provider to provide--
            ``(1) a receipt that is consistent with subsections (a) and 
        (b); and
            ``(2) a reasonably accurate estimate of the foreign currency 
        to be received, based on the rate provided to the sender by the 
        remittance transfer provider at the time at which the 
        transaction was initiated by the sender.

    ``(d) <<NOTE: Notices. Deadlines.>>  Remittance Transfer Errors.--
            ``(1) Error resolution.--
                    ``(A) In general.--If a remittance transfer provider 
                receives oral or written notice from the sender within 
                180 days of the promised date of delivery that an error 
                occurred with respect to a remittance transfer, 
                including the amount of currency designated in 
                subsection (a)(3)(A) that was to be sent to the 
                designated recipient of the remittance transfer, using 
                the values of the currency into which the funds should 
                have been exchanged, but was not made available to the 
                designated recipient in the foreign country, the 
                remittance transfer provider shall resolve the error 
                pursuant to this subsection and investigate the reason 
                for the error.
                    ``(B) Remedies.--Not later than 90 days after the 
                date of receipt of a notice from the sender pursuant to 
                subparagraph (A), the remittance transfer provider 
                shall, as applicable to the error and as designated by 
                the sender--
                          ``(i) refund to the sender the total amount of 
                      funds tendered by the sender in connection with 
                      the remittance transfer which was not properly 
                      transmitted;
                          ``(ii) make available to the designated 
                      recipient, without additional cost to the 
                      designated recipient or to the sender, the amount 
                      appropriate to resolve the error;
                          ``(iii) provide such other remedy, as 
                      determined appropriate by rule of the Board for 
                      the protection of senders; or
                          ``(iv) provide written notice to the sender 
                      that there was no error with an explanation 
                      responding to the specific complaint of the 
                      sender.
            ``(2) Rules.--The Board <<NOTE: Deadline.>>  shall 
        establish, by rule issued not later than 18 months after the 
        date of enactment of the Consumer Financial Protection Act of 
        2010, clear and appropriate standards for remittance transfer 
        providers with respect to

[[Page 124 STAT. 2064]]

        error resolution relating to remittance transfers, to protect 
        senders from such errors. Standards prescribed under this 
        paragraph shall include appropriate standards regarding record 
        keeping, as required, including documentation--
                    ``(A) of the complaint of the sender;
                    ``(B) that the sender provides the remittance 
                transfer provider with respect to the alleged error; and
                    ``(C) of the findings of the remittance transfer 
                provider regarding the investigation of the alleged 
                error that the sender brought to their attention.
            ``(3) <<NOTE: Deadline.>>  Cancellation and refund policy 
        rules.--Not later than 18 months after the date of enactment of 
        the Consumer Financial Protection Act of 2010, the Board shall 
        issue final rules regarding appropriate remittance transfer 
        cancellation and refund policies for consumers.

    ``(e) Applicability of This Title.--
            ``(1) In general.--A remittance transfer that is not an 
        electronic fund transfer, as defined in section 903, shall not 
        be subject to any of the provisions of sections 905 through 913. 
        A remittance transfer that is an electronic fund transfer, as 
        defined in section 903, shall be subject to all provisions of 
        this title, except for section 908, that are otherwise 
        applicable to electronic fund transfers under this title.
            ``(2) Rule of construction.--Nothing in this section shall 
        be construed--
                    ``(A) to affect the application to any transaction, 
                to any remittance provider, or to any other person of 
                any of the provisions of subchapter II of chapter 53 of 
                title 31, United States Code, section 21 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1829b), or chapter 2 of 
                title I of Public Law 91-508 (12 U.S.C. 1951-1959), or 
                any regulations promulgated thereunder; or
                    ``(B) to cause any fund transfer that would not 
                otherwise be treated as such under paragraph (1) to be 
                treated as an electronic fund transfer, or as otherwise 
                subject to this title, for the purposes of any of the 
                provisions referred to in subparagraph (A) or any 
                regulations promulgated thereunder.

    ``(f) Acts of Agents.--
            ``(1) In general.--A remittance transfer provider shall be 
        liable for any violation of this section by any agent, 
        authorized delegate, or person affiliated with such provider, 
        when such agent, authorized delegate, or affiliate acts for that 
        remittance transfer provider.
            ``(2) Obligations of remittance transfer providers.--The 
        Board shall prescribe rules to implement appropriate standards 
        or conditions of, liability of a remittance transfer provider, 
        including a provider who acts through an agent or authorized 
        delegate. An agency charged with enforcing the requirements of 
        this section, or rules prescribed by the Board under this 
        section, may consider, in any action or other proceeding against 
        a remittance transfer provider, the extent to which the provider 
        had established and maintained policies or procedures for 
        compliance, including policies, procedures, or other appropriate 
        oversight measures designed to assure compliance by an agent or 
        authorized delegate acting for such provider.

[[Page 124 STAT. 2065]]

    ``(g) Definitions.--As used in this section--
            ``(1) the term `designated recipient' means any person 
        located in a foreign country and identified by the sender as the 
        authorized recipient of a remittance transfer to be made by a 
        remittance transfer provider, except that a designated recipient 
        shall not be deemed to be a consumer for purposes of this Act;
            ``(2) the term `remittance transfer'--
                    ``(A) means the electronic (as defined in section 
                106(2) of the Electronic Signatures in Global and 
                National Commerce Act (15 U.S.C. 7006(2))) transfer of 
                funds requested by a sender located in any State to a 
                designated recipient that is initiated by a remittance 
                transfer provider, whether or not the sender holds an 
                account with the remittance transfer provider or whether 
                or not the remittance transfer is also an electronic 
                fund transfer, as defined in section 903; and
                    ``(B) does not include a transfer described in 
                subparagraph (A) in an amount that is equal to or lesser 
                than the amount of a small-value transaction determined, 
                by rule, to be excluded from the requirements under 
                section 906(a);
            ``(3) the term `remittance transfer provider' means any 
        person or financial institution that provides remittance 
        transfers for a consumer in the normal course of its business, 
        whether or not the consumer holds an account with such person or 
        financial institution; and
            ``(4) the term `sender' means a consumer who requests a 
        remittance provider to send a remittance transfer for the 
        consumer to a designated recipient.''.

    (b) Automated Clearinghouse System.--
            (1) Expansion of system.--The Board of Governors shall work 
        with the Federal reserve banks and the Department of the 
        Treasury to expand the use of the automated clearinghouse system 
        and other payment mechanisms for remittance transfers to foreign 
        countries, with a focus on countries that receive significant 
        remittance transfers from the United States, based on--
                    (A) the number, volume, and size of such transfers;
                    (B) the significance of the volume of such transfers 
                relative to the external financial flows of the 
                receiving country, including--
                          (i) the total amount transferred; and
                          (ii) the total volume of payments made by 
                      United States Government agencies to beneficiaries 
                      and retirees living abroad;
                    (C) the feasibility of such an expansion; and
                    (D) the ability of the Federal Reserve System to 
                establish payment gateways in different geographic 
                regions and currency zones to receive remittance 
                transfers and route them through the payments systems in 
                the destination countries.
            (2) Report to congress.--Not later than one calendar year 
        after the date of enactment of this Act, and on April 30 
        biennially thereafter during the 10-year period beginning on 
        that date of enactment, the Board of Governors shall submit a 
        report to the Committee on Banking, Housing, and Urban

[[Page 124 STAT. 2066]]

        Affairs of the Senate and the Committee on Financial Services of 
        the House of Representatives on the status of the automated 
        clearinghouse system and its progress in complying with the 
        requirements of this subsection. The report shall include an 
        analysis of adoption rates of International ACH Transactions 
        rules and formats, the efficacy of increasing adoption rates, 
        and potential recommendations to increase adoption.

    (c) Expansion of Financial Institution Provision of Remittance 
Transfers.--
            (1) Provision of guidelines to institutions.--Each of the 
        Federal banking agencies and the National Credit Union 
        Administration shall provide guidelines to financial 
        institutions under the jurisdiction of the agency regarding the 
        offering of low-cost remittance transfers and no-cost or low-
        cost basic consumer accounts, as well as agency services to 
        remittance transfer providers.
            (2) Assistance to financial literacy commission.--As part of 
        its duties as members of the Financial Literacy and Education 
        Commission, the Bureau, the Federal banking agencies, and the 
        National Credit Union Administration shall assist the Financial 
        Literacy and Education Commission in executing the Strategy for 
        Assuring Financial Empowerment (or the ``SAFE Strategy''), as it 
        relates to remittances.

    (d) Federal Credit Union Act Conforming Amendment.--Paragraph (12) 
of section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is 
amended to read as follows:
            ``(12) in accordance with regulations prescribed by the 
        Board--
                    ``(A) to sell, to persons in the field of 
                membership, negotiable checks (including travelers 
                checks), money orders, and other similar money transfer 
                instruments (including international and domestic 
                electronic fund transfers and remittance transfers, as 
                defined in section 919 of the Electronic Fund Transfer 
                Act); and
                    ``(B) to cash checks and money orders for persons in 
                the field of membership for a fee;''.

    (e) Report on Feasibility of and Impediments to Use of Remittance 
History in Calculation of Credit Score.--Before the end of the 365-day 
period beginning on the date of enactment of this Act, the Director 
shall submit a report to the President, the Committee on Banking, 
Housing, and Urban Affairs of the Senate, and the Committee on Financial 
Services of the House of Representatives regarding--
            (1) the manner in which the remittance history of a consumer 
        could be used to enhance the credit score of the consumer;
            (2) the current legal and business model barriers and 
        impediments that impede the use of the remittance history of the 
        consumer to enhance the credit score of the consumer; and
            (3) recommendations on the manner in which maximum 
        transparency and disclosure to consumers of exchange rates for 
        remittance transfers subject to this title and the amendments 
        made by this title may be accomplished, whether or not such 
        exchange rates are known at the time of origination or payment 
        by the consumer for the remittance transfer, including 
        disclosure to the sender of the actual exchange rate

[[Page 124 STAT. 2067]]

        used and the amount of currency that the recipient of the 
        remittance transfer received, using the values of the currency 
        into which the funds were exchanged, as contained in sections 
        919(a)(2)(D) and 919(a)(3) of the Electronic Fund Transfer Act 
        (as amended by this section).
SEC. 1074. DEPARTMENT OF THE TREASURY STUDY ON ENDING THE 
                          CONSERVATORSHIP OF FANNIE MAE, FREDDIE 
                          MAC, AND REFORMING THE HOUSING FINANCE 
                          SYSTEM.

    (a) Study Required.--
            (1) In general.--The Secretary <<NOTE: Recommenda- tions.>>  
        of the Treasury shall conduct a study of and develop 
        recommendations regarding the options for ending the 
        conservatorship of the Federal National Mortgage Association (in 
        this section referred to as ``Fannie Mae'') and the Federal Home 
        Loan Mortgage Corporation (in this section referred to as 
        ``Freddie Mac''), while minimizing the cost to taxpayers, 
        including such options as--
                    (A) the gradual wind-down and liquidation of such 
                entities;
                    (B) the privatization of such entities;
                    (C) the incorporation of the functions of such 
                entities into a Federal agency;
                    (D) the dissolution of Fannie Mae and Freddie Mac 
                into smaller companies; or
                    (E) any other measures the Secretary determines 
                appropriate.
            (2) Analyses.--The study required under paragraph (1) shall 
        include an analysis of--
                    (A) the role of the Federal Government in supporting 
                a stable, well-functioning housing finance system, and 
                whether and to what extent the Federal Government should 
                bear risks in meeting Federal housing finance 
                objectives;
                    (B) how the current structure of the housing finance 
                system can be improved;
                    (C) how the housing finance system should support 
                the continued availability of mortgage credit to all 
                segments of the market;
                    (D) how the housing finance system should be 
                structured to ensure that consumers continue to have 
                access to 30-year, fixed rate, pre-payable mortgages and 
                other mortgage products that have simple terms that can 
                be easily understood;
                    (E) the role of the Federal Housing Administration 
                and the Department of Veterans Affairs in a future 
                housing system;
                    (F) the impact of reforms of the housing finance 
                system on the financing of rental housing;
                    (G) the impact of reforms of the housing finance 
                system on secondary market liquidity;
                    (H) the role of standardization in the housing 
                finance system;
                    (I) how housing finance systems in other countries 
                offer insights that can help inform options for reform 
                in the United States; and
                    (J) the options for transition to a reformed housing 
                finance system.

[[Page 124 STAT. 2068]]

    (b) Report and Recommendations.--Not later than January 31, 2011, 
the Secretary of the Treasury shall submit the report and 
recommendations required under subsection (a) to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives.
SEC. 1075. REASONABLE FEES AND RULES FOR PAYMENT CARD 
                          TRANSACTIONS.

    (a) In General.--The Electronic Fund Transfer Act (15 U.S.C. 1693 et 
seq.) is amended--
            (1) by redesignating sections 920 and 921 <<NOTE: 15 USC 
        1693p, 1693q.>>  as sections 921 and 922, respectively; and
            (2) by inserting after section 919 the following:
``SEC. 920. <<NOTE: 15 USC 1693o-2.>>  REASONABLE FEES AND RULES 
                        FOR PAYMENT CARD TRANSACTIONS.

    ``(a) Reasonable Interchange Transaction Fees for Electronic Debit 
Transactions.--
            ``(1) Regulatory authority over interchange transaction 
        fees.--The Board may prescribe regulations, pursuant to section 
        553 of title 5, United States Code, regarding any interchange 
        transaction fee that an issuer may receive or charge with 
        respect to an electronic debit transaction, to implement this 
        subsection (including related definitions), and to prevent 
        circumvention or evasion of this subsection.
            ``(2) Reasonable interchange transaction fees.--The amount 
        of any interchange transaction fee that an issuer may receive or 
        charge with respect to an electronic debit transaction shall be 
        reasonable and proportional to the cost incurred by the issuer 
        with respect to the transaction.
            ``(3) Rulemaking required.--
                    ``(A) In general.--The 
                Board <<NOTE: Deadline. Standards.>>  shall prescribe 
                regulations in final form not later than 9 months after 
                the date of enactment of the Consumer Financial 
                Protection Act of 2010, to establish standards for 
                assessing whether the amount of any interchange 
                transaction fee described in paragraph (2) is reasonable 
                and proportional to the cost incurred by the issuer with 
                respect to the transaction.
                    ``(B) Information collection.--The Board may require 
                any issuer (or agent of an issuer) or payment card 
                network to provide the Board with such information as 
                may be necessary to carry out the provisions of this 
                subsection and the Board, in issuing rules under 
                subparagraph (A) and on at least a bi-annual basis 
                thereafter, shall disclose such aggregate or summary 
                information concerning the costs incurred, and 
                interchange transaction fees charged or received, by 
                issuers or payment card networks in connection with the 
                authorization, clearance or settlement of electronic 
                debit transactions as the Board considers appropriate 
                and in the public interest.
            ``(4) Considerations; consultation.--In prescribing 
        regulations under paragraph (3)(A), the Board shall--
                    ``(A) consider the functional similarity between--
                          ``(i) electronic debit transactions; and
                          ``(ii) checking transactions that are required 
                      within the Federal Reserve bank system to clear at 
                      par;
                    ``(B) distinguish between--

[[Page 124 STAT. 2069]]

                          ``(i) the incremental cost incurred by an 
                      issuer for the role of the issuer in the 
                      authorization, clearance, or settlement of a 
                      particular electronic debit transaction, which 
                      cost shall be considered under paragraph (2); and
                          ``(ii) other costs incurred by an issuer which 
                      are not specific to a particular electronic debit 
                      transaction, which costs shall not be considered 
                      under paragraph (2); and
                    ``(C) consult, as appropriate, with the Comptroller 
                of the Currency, the Board of Directors of the Federal 
                Deposit Insurance Corporation, the Director of the 
                Office of Thrift Supervision, the National Credit Union 
                Administration Board, the Administrator of the Small 
                Business Administration, and the Director of the Bureau 
                of Consumer Financial Protection.
            ``(5) Adjustments to interchange transaction fees for fraud 
        prevention costs.--
                    ``(A) Adjustments.--The Board may allow for an 
                adjustment to the fee amount received or charged by an 
                issuer under paragraph (2), if--
                          ``(i) such adjustment is reasonably necessary 
                      to make allowance for costs incurred by the issuer 
                      in preventing fraud in relation to electronic 
                      debit transactions involving that issuer; and
                          ``(ii) the issuer complies with the fraud-
                      related standards established by the Board under 
                      subparagraph (B), which standards shall--
                                    ``(I) be designed to ensure that any 
                                fraud-related adjustment of the issuer 
                                is limited to the amount described in 
                                clause (i) and takes into account any 
                                fraud-related reimbursements (including 
                                amounts from charge-backs) received from 
                                consumers, merchants, or payment card 
                                networks in relation to electronic debit 
                                transactions involving the issuer; and
                                    ``(II) require issuers to take 
                                effective steps to reduce the occurrence 
                                of, and costs from, fraud in relation to 
                                electronic debit transactions, including 
                                through the development and 
                                implementation of cost-effective fraud 
                                prevention technology.
                    ``(B) Rulemaking required.--
                          ``(i) In general.--The 
                      Board <<NOTE: Deadline. Standards.>>  shall 
                      prescribe regulations in final form not later than 
                      9 months after the date of enactment of the 
                      Consumer Financial Protection Act of 2010, to 
                      establish standards for making adjustments under 
                      this paragraph.
                          ``(ii) Factors for consideration.--In issuing 
                      the standards and prescribing regulations under 
                      this paragraph, the Board shall consider--
                                    ``(I) the nature, type, and 
                                occurrence of fraud in electronic debit 
                                transactions;
                                    ``(II) the extent to which the 
                                occurrence of fraud depends on whether 
                                authorization in an electronic debit 
                                transaction is based on signature, PIN, 
                                or other means;

[[Page 124 STAT. 2070]]

                                    ``(III) the available and economical 
                                means by which fraud on electronic debit 
                                transactions may be reduced;
                                    ``(IV) the fraud prevention and data 
                                security costs expended by each party 
                                involved in electronic debit 
                                transactions (including consumers, 
                                persons who accept debit cards as a form 
                                of payment, financial institutions, 
                                retailers and payment card networks);
                                    ``(V) the costs of fraudulent 
                                transactions absorbed by each party 
                                involved in such transactions (including 
                                consumers, persons who accept debit 
                                cards as a form of payment, financial 
                                institutions, retailers and payment card 
                                networks);
                                    ``(VI) the extent to which 
                                interchange transaction fees have in the 
                                past reduced or increased incentives for 
                                parties involved in electronic debit 
                                transactions to reduce fraud on such 
                                transactions; and
                                    ``(VII) such other factors as the 
                                Board considers appropriate.
            ``(6) Exemption for small issuers.--
                    ``(A) In general.--This subsection shall not apply 
                to any issuer that, together with its affiliates, has 
                assets of less than $10,000,000,000, and the Board shall 
                exempt such issuers from regulations prescribed under 
                paragraph (3)(A).
                    ``(B) Definition.--For purposes of this paragraph, 
                the term ``issuer'' shall be limited to the person 
                holding the asset account that is debited through an 
                electronic debit transaction.
            ``(7) Exemption for government-administered payment programs 
        and reloadable prepaid cards.--
                    ``(A) In general.--This subsection shall not apply 
                to an interchange transaction fee charged or received 
                with respect to an electronic debit transaction in which 
                a person uses--
                          ``(i) a debit card or general-use prepaid card 
                      that has been provided to a person pursuant to a 
                      Federal, State or local government-administered 
                      payment program, in which the person may only use 
                      the debit card or general-use prepaid card to 
                      transfer or debit funds, monetary value, or other 
                      assets that have been provided pursuant to such 
                      program; or
                          ``(ii) a plastic card, payment code, or device 
                      that is--
                                    ``(I) linked to funds, monetary 
                                value, or assets which are purchased or 
                                loaded on a prepaid basis;
                                    ``(II) not issued or approved for 
                                use to access or debit any account held 
                                by or for the benefit of the card holder 
                                (other than a subaccount or other method 
                                of recording or tracking funds purchased 
                                or loaded on the card on a prepaid 
                                basis);
                                    ``(III) redeemable at multiple, 
                                unaffiliated merchants or service 
                                providers, or automated teller machines;

[[Page 124 STAT. 2071]]

                                    ``(IV) used to transfer or debit 
                                funds, monetary value, or other assets; 
                                and
                                    ``(V) reloadable and not marketed or 
                                labeled as a gift card or gift 
                                certificate.
                    ``(B) <<NOTE: Applicability.>>  Exception.--
                Notwithstanding subparagraph (A), after the end of the 
                1-year period beginning on the effective date provided 
                in paragraph (9), this subsection shall apply to an 
                interchange transaction fee charged or received with 
                respect to an electronic debit transaction described in 
                subparagraph (A)(i) in which a person uses a general-use 
                prepaid card, or an electronic debit transaction 
                described in subparagraph (A)(ii), if any of the 
                following fees may be charged to a person with respect 
                to the card:
                          ``(i) A fee for an overdraft, including a 
                      shortage of funds or a transaction processed for 
                      an amount exceeding the account balance.
                          ``(ii) A fee imposed by the issuer for the 
                      first withdrawal per month from an automated 
                      teller machine that is part of the issuer's 
                      designated automated teller machine network.
                    ``(C) Definition.--For purposes of subparagraph (B), 
                the term `designated automated teller machine network' 
                means either--
                          ``(i) all automated teller machines identified 
                      in the name of the issuer; or
                          ``(ii) any network of automated teller 
                      machines identified by the issuer that provides 
                      reasonable and convenient access to the issuer's 
                      customers.
                    ``(D) Reporting.--Beginning 12 <<NOTE: Effective 
                date.>>  months after the date of enactment of the 
                Consumer Financial Protection Act of 2010, the Board 
                shall annually provide a report to the Congress 
                regarding --
                          ``(i) the prevalence of the use of general-use 
                      prepaid cards in Federal, State or local 
                      government-administered payment programs; and
                          ``(ii) the interchange transaction fees and 
                      cardholder fees charged with respect to the use of 
                      such general-use prepaid cards.
            ``(8) Regulatory authority over network fees.--
                    ``(A) In general.--The Board may prescribe 
                regulations, pursuant to section 553 of title 5, United 
                States Code, regarding any network fee.
                    ``(B) Limitation.--The authority under subparagraph 
                (A) to prescribe regulations shall be limited to 
                regulations to ensure that--
                          ``(i) a network fee is not used to directly or 
                      indirectly compensate an issuer with respect to an 
                      electronic debit transaction; and
                          ``(ii) a network fee is not used to circumvent 
                      or evade the restrictions of this subsection and 
                      regulations prescribed under such subsection.
                    ``(C) Rulemaking required.--The 
                Board <<NOTE: Deadline.>>  shall prescribe regulations 
                in final form before the end of the 9-month period 
                beginning on the date of the enactment of the Consumer 
                Financial Protection Act of 2010, to carry out the 
                authorities provided under subparagraph (A).

[[Page 124 STAT. 2072]]

            ``(9) Effective date.--This subsection shall take effect at 
        the end of the 12-month period beginning on the date of the 
        enactment of the Consumer Financial Protection Act of 2010.

    ``(b) Limitation on Payment Card Network Restrictions.--
            ``(1) <<NOTE: Deadlines.>>  Prohibitions against exclusivity 
        arrangements.--
                    ``(A) No exclusive network.--The Board shall, before 
                the end of the 1-year period beginning on the date of 
                the enactment of the Consumer Financial Protection Act 
                of 2010, prescribe regulations providing that an issuer 
                or payment card network shall not directly or through 
                any agent, processor, or licensed member of a payment 
                card network, by contract, requirement, condition, 
                penalty, or otherwise, restrict the number of payment 
                card networks on which an electronic debit transaction 
                may be processed to--
                          ``(i) 1 such network; or
                          ``(ii) 2 or more such networks which are 
                      owned, controlled, or otherwise operated by --
                                    ``(I) affiliated persons; or
                                    ``(II) networks affiliated with such 
                                issuer.
                    ``(B) No routing restrictions.--The Board shall, 
                before the end of the 1-year period beginning on the 
                date of the enactment of the Consumer Financial 
                Protection Act of 2010, prescribe regulations providing 
                that an issuer or payment card network shall not, 
                directly or through any agent, processor, or licensed 
                member of the network, by contract, requirement, 
                condition, penalty, or otherwise, inhibit the ability of 
                any person who accepts debit cards for payments to 
                direct the routing of electronic debit transactions for 
                processing over any payment card network that may 
                process such transactions.
            ``(2) Limitation on restrictions on offering discounts for 
        use of a form of payment.--
                    ``(A) In general.--A payment card network shall not, 
                directly or through any agent, processor, or licensed 
                member of the network, by contract, requirement, 
                condition, penalty, or otherwise, inhibit the ability of 
                any person to provide a discount or in-kind incentive 
                for payment by the use of cash, checks, debit cards, or 
                credit cards to the extent that--
                          ``(i) in the case of a discount or in-kind 
                      incentive for payment by the use of debit cards, 
                      the discount or in-kind incentive does not 
                      differentiate on the basis of the issuer or the 
                      payment card network;
                          ``(ii) in the case of a discount or in-kind 
                      incentive for payment by the use of credit cards, 
                      the discount or in-kind incentive does not 
                      differentiate on the basis of the issuer or the 
                      payment card network; and
                          ``(iii) to the extent required by Federal law 
                      and applicable State law, such discount or in-kind 
                      incentive is offered to all prospective buyers and 
                      disclosed clearly and conspicuously.
                    ``(B) Lawful discounts.--For purposes of this 
                paragraph, the network may not penalize any person for 
                the providing of a discount that is in compliance with 
                Federal law and applicable State law.

[[Page 124 STAT. 2073]]

            ``(3) Limitation on restrictions on setting transaction 
        minimums or maximums.--
                    ``(A) In general.--A payment card network shall not, 
                directly or through any agent, processor, or licensed 
                member of the network, by contract, requirement, 
                condition, penalty, or otherwise, inhibit the ability--
                          ``(i) of any person to set a minimum dollar 
                      value for the acceptance by that person of credit 
                      cards, to the extent that --
                                    ``(I) such minimum dollar value does 
                                not differentiate between issuers or 
                                between payment card networks; and
                                    ``(II) such minimum dollar value 
                                does not exceed $10.00; or
                          ``(ii) of any Federal agency or institution of 
                      higher education to set a maximum dollar value for 
                      the acceptance by that Federal agency or 
                      institution of higher education of credit cards, 
                      to the extent that such maximum dollar value does 
                      not differentiate between issuers or between 
                      payment card networks.
                    ``(B) Increase in minimum dollar amount.--The Board 
                may, by regulation prescribed pursuant to section 553 of 
                title 5, United States Code, increase the amount of the 
                dollar value listed in subparagraph (A)(i)(II).
            ``(4) Rule of construction:.--No provision of this 
        subsection shall be construed to authorize any person--
                    ``(A) to discriminate between debit cards within a 
                payment card network on the basis of the issuer that 
                issued the debit card; or
                    ``(B) to discriminate between credit cards within a 
                payment card network on the basis of the issuer that 
                issued the credit card.

    ``(c) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Affiliate.--The term `affiliate' means any company 
        that controls, is controlled by, or is under common control with 
        another company.
            ``(2) Debit card.--The term `debit card'--
                    ``(A) means any card, or other payment code or 
                device, issued or approved for use through a payment 
                card network to debit an asset account (regardless of 
                the purpose for which the account is established), 
                whether authorization is based on signature, PIN, or 
                other means;
                    ``(B) includes a general-use prepaid card, as that 
                term is defined in section 915(a)(2)(A); and
                    ``(C) does not include paper checks.
            ``(3) Credit card.--The term `credit card' has the same 
        meaning as in section 103 of the Truth in Lending Act.
            ``(4) Discount.--The term `discount'--
                    ``(A) means a reduction made from the price that 
                customers are informed is the regular price; and
                    ``(B) does not include any means of increasing the 
                price that customers are informed is the regular price.
            ``(5) Electronic debit transaction.--The term `electronic 
        debit transaction' means a transaction in which a person uses a 
        debit card.
            ``(6) Federal agency.--The term `Federal agency' means--

[[Page 124 STAT. 2074]]

                    ``(A) an agency (as defined in section 101 of title 
                31, United States Code); and
                    ``(B) a Government corporation (as defined in 
                section 103 of title 5, United States Code).
            ``(7) Institution of higher education.--The term 
        `institution of higher education' has the same meaning as in 101 
        and 102 of the Higher Education Act of 1965 (20 U.S.C. 1001, 
        1002).
            ``(8) Interchange transaction fee.--The term `interchange 
        transaction fee' means any fee established, charged or received 
        by a payment card network for the purpose of compensating an 
        issuer for its involvement in an electronic debit transaction.
            ``(9) Issuer.--The term `issuer' means any person who issues 
        a debit card, or credit card, or the agent of such person with 
        respect to such card.
            ``(10) Network fee.--The term `network fee' means any fee 
        charged and received by a payment card network with respect to 
        an electronic debit transaction, other than an interchange 
        transaction fee.
            ``(11) Payment card network.--The term `payment card 
        network' means an entity that directly, or through licensed 
        members, processors, or agents, provides the proprietary 
        services, infrastructure, and software that route information 
        and data to conduct debit card or credit card transaction 
        authorization, clearance, and settlement, and that a person uses 
        in order to accept as a form of payment a brand of debit card, 
        credit card or other device that may be used to carry out debit 
        or credit transactions.

    ``(d) Enforcement.--
            ``(1) In general.--Compliance with the requirements imposed 
        under this section shall be enforced under section 918.
            ``(2) Exception.--Sections 916 and 917 shall not apply with 
        respect to this section or the requirements imposed pursuant to 
        this section.''.

    (b) Amendment to the Food and Nutrition Act of 2008.--Section 
7(h)(10) of the Food and Nutrition Act of 2008 (7 U.S.C. 2016(h)(10)) is 
amended to read as follows:
            ``(10) Federal law not applicable.--Section 920 of the 
        Electronic Fund Transfer Act shall not apply to electronic 
        benefit transfer or reimbursement systems under this Act.''.

    (c) Amendment to the Farm Security and Rural Investment Act of 
2002.--Section 4402 of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 3007) is amended by adding at the end the following new 
subsection:
    ``(f) Federal Law Not Applicable.--Section 920 of the Electronic 
Fund Transfer Act shall not apply to electronic benefit transfer systems 
established under this section.''.
    (d) Amendment to the Child Nutrition Act of 1966.--Section 11 of the 
Child Nutrition Act of 1966 (42 U.S.C. 1780) is amended by adding at the 
end the following:
    ``(c) Federal Law Not Applicable.--Section 920 of the Electronic 
Fund Transfer Act shall not apply to electronic benefit transfer systems 
established under this Act or the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1751 et seq.).''.

[[Page 124 STAT. 2075]]

SEC. 1076. <<NOTE: 12 USC 5602.>>  REVERSE MORTGAGE STUDY AND 
                          REGULATIONS.

    (a) Study.--Not later than 1 year after the designated transfer 
date, the Bureau shall conduct a study on reverse mortgage transactions.
    (b) Regulations.--
            (1) In general.--If the Bureau determines through the study 
        required under subsection (a) that conditions or limitations on 
        reverse mortgage transactions are necessary or appropriate for 
        accomplishing the purposes and objectives of this title, 
        including protecting borrowers with respect to the obtaining of 
        reverse mortgage loans for the purpose of funding investments, 
        annuities, and other investment products and the suitability of 
        a borrower in obtaining a reverse mortgage for such purpose.
            (2) Identified practices and integrated disclosures.--The 
        regulations prescribed under paragraph (1) may, as the Bureau 
        may so determine--
                    (A) identify any practice as unfair, deceptive, or 
                abusive in connection with a reverse mortgage 
                transaction; and
                    (B) provide for an integrated disclosure standard 
                and model disclosures for reverse mortgage transactions, 
                consistent with section 4302(d), that combines the 
                relevant disclosures required under the Truth in Lending 
                Act (15 U.S.C. 1601 et seq.) and the Real Estate 
                Settlement Procedures Act, with the disclosures required 
                to be provided to consumers for Home Equity Conversion 
                Mortgages under section 255 of the National Housing Act.

    (c) Rule of Construction.--This section shall not be construed as 
limiting the authority of the Bureau to issue regulations, orders, or 
guidance that apply to reverse mortgages prior to the completion of the 
study required under subsection (a).
SEC. 1077. REPORT ON PRIVATE EDUCATION LOANS AND PRIVATE 
                          EDUCATIONAL LENDERS.

    (a) Report.--Not later than 2 years after the date of enactment of 
this Act, the Director and the Secretary of Education, in consultation 
with the Commissioners of the Federal Trade Commission, and the Attorney 
General of the United States, shall submit a report to the Committee on 
Banking, Housing, and Urban Affairs and the Committee on Health, 
Education, Labor, and Pensions of the Senate and the Committee on 
Financial Services and the Committee on Education and Labor of the House 
of Representatives, on private education loans (as that term is defined 
in section 140 of the Truth in Lending Act (15 U.S.C. 1650)) and private 
educational lenders (as that term is defined in such section).
    (b) Content.--The report required by this section shall examine, at 
a minimum--
            (1) the growth and changes of the private education loan 
        market in the United States;
            (2) factors influencing such growth and changes;
            (3) the extent to which students and parents of students 
        rely on private education loans to finance postsecondary 
        education and the private education loan indebtedness of 
        borrowers;
            (4) the characteristics of private education loan borrowers, 
        including--

[[Page 124 STAT. 2076]]

                    (A) the types of institutions of higher education 
                that they attend;
                    (B) socioeconomic characteristics (including income 
                and education levels, racial characteristics, 
                geographical background, age, and gender);
                    (C) what other forms of financing borrowers use to 
                pay for education;
                    (D) whether they exhaust their Federal loan options 
                before taking out a private loan;
                    (E) whether such borrowers are dependent or 
                independent students (as determined under part F of 
                title IV of the Higher Education Act of 1965) or parents 
                of such students;
                    (F) whether such borrowers are students enrolled in 
                a program leading to a certificate, license, or 
                credential other than a degree, an associates degree, a 
                baccalaureate degree, or a graduate or professional 
                degree; and
                    (G) if practicable, employment and repayment 
                behaviors;
            (5) the characteristics of private educational lenders, 
        including whether such creditors are for-profit, non-profit, or 
        institutions of higher education;
            (6) the underwriting criteria used by private educational 
        lenders, including the use of cohort default rate (as such term 
        is defined in section 435(m) of the Higher Education Act of 
        1965);
            (7) the terms, conditions, and pricing of private education 
        loans;
            (8) the consumer protections available to private education 
        loan borrowers, including the effectiveness of existing 
        disclosures and requirements and borrowers' awareness and 
        understanding about terms and conditions of various financial 
        products;
            (9) whether Federal regulators and the public have access to 
        information sufficient to provide them with assurances that 
        private education loans are provided in accord with the Nation's 
        fair lending laws and that allows public officials to determine 
        lender compliance with fair lending laws; and
            (10) any statutory or legislative recommendations necessary 
        to improve consumer protections for private education loan 
        borrowers and to better enable Federal regulators and the public 
        to ascertain private educational lender compliance with fair 
        lending laws.
SEC. 1078. STUDY AND REPORT ON CREDIT SCORES.

    (a) Study.--The Bureau shall conduct a study on the nature, range, 
and size of variations between the credit scores sold to creditors and 
those sold to consumers by consumer reporting agencies that compile and 
maintain files on consumers on a nationwide basis (as defined in section 
603(p) of the Fair Credit Reporting Act; 15 U.S.C. 1681a(p)), and 
whether such variations disadvantage consumers.
    (b) Report to Congress.--The Bureau shall submit a report to 
Congress on the results of the study conducted under subsection (a) not 
later than 1 year after the date of enactment of this Act.

[[Page 124 STAT. 2077]]

SEC. 1079. <<NOTE: 12 USC 5603.>> REVIEW, REPORT, AND PROGRAM WITH 
                          RESPECT TO EXCHANGE FACILITATORS.

    (a) Review.--The Director shall review all Federal laws and 
regulations relating to the protection of consumers who use exchange 
facilitators for transactions primarily for personal, family, or 
household purposes.
    (b) Report.--Not later than 1 year after the designated transfer 
date, the Director shall submit to Congress a report describing--
            (1) recommendations for legislation to ensure the 
        appropriate protection of consumers who use exchange 
        facilitators for transactions primarily for personal, family, or 
        household purposes;
            (2) recommendations for updating the regulations of Federal 
        departments and agencies to ensure the appropriate protection of 
        such consumers; and
            (3) recommendations for regulations to ensure the 
        appropriate protection of such consumers.

    (c) Program.--Not later than 2 years after the date of the 
submission of the report under subsection (b), the Bureau shall, 
consistent with subtitle B, propose regulations or otherwise establish a 
program to protect consumers who use exchange facilitators.
    (d) Exchange Facilitator Defined.--In this section, the term 
``exchange facilitator'' means a person that--
            (1) facilitates, for a fee, an exchange of like kind 
        property by entering into an agreement with a taxpayer by which 
        the exchange facilitator acquires from the taxpayer the 
        contractual rights to sell the taxpayer's relinquished property 
        and transfers a replacement property to the taxpayer as a 
        qualified intermediary (within the meaning of Treasury 
        Regulations section 1.1031(k)-1(g)(4)) or enters into an 
        agreement with the taxpayer to take title to a property as an 
        exchange accommodation titleholder (within the meaning of 
        Revenue Procedure 2000-37) or enters into an agreement with a 
        taxpayer to act as a qualified trustee or qualified escrow 
        holder (within the meaning of Treasury Regulations section 
        1.1031(k)-1(g)(3));
            (2) maintains an office for the purpose of soliciting 
        business to perform the services described in paragraph (1); or
            (3) advertises any of the services described in paragraph 
        (1) or solicits clients in printed publications, direct mail, 
        television or radio advertisements, telephone calls, facsimile 
        transmissions, or other electronic communications directed to 
        the general public for purposes of providing any such services.
SEC. 1079A. FINANCIAL FRAUD PROVISIONS.

    (a) Sentencing <<NOTE: Review.>> Guidelines.--
            (1) Securities <<NOTE: 28 USC 994 note.>>  fraud.--
                    (A) Directive.--Pursuant to its authority under 
                section 994 of title 28, United States Code, and in 
                accordance with this paragraph, the United States 
                Sentencing Commission shall review and, if appropriate, 
                amend the Federal Sentencing Guidelines and policy 
                statements applicable to persons convicted of offenses 
                relating to securities fraud or any other similar 
                provision of law, in order to reflect the intent of 
                Congress that penalties for the offenses under the 
                guidelines and policy statements appropriately account 
                for the potential and actual harm to the public and the 
                financial markets from the offenses.

[[Page 124 STAT. 2078]]

                    (B) Requirements.--In making any amendments to the 
                Federal Sentencing Guidelines and policy statements 
                under subparagraph (A), the United States Sentencing 
                Commission shall--
                          (i) ensure that the guidelines and policy 
                      statements, particularly section 2B1.1(b)(14) and 
                      section 2B1.1(b)(17) (and any successors thereto), 
                      reflect--
                                    (I) the serious nature of the 
                                offenses described in subparagraph (A);
                                    (II) the need for an effective 
                                deterrent and appropriate punishment to 
                                prevent the offenses; and
                                    (III) the effectiveness of 
                                incarceration in furthering the 
                                objectives described in subclauses (I) 
                                and (II);
                          (ii) consider the extent to which the 
                      guidelines appropriately account for the potential 
                      and actual harm to the public and the financial 
                      markets resulting from the offenses;
                          (iii) ensure reasonable consistency with other 
                      relevant directives and guidelines and Federal 
                      statutes;
                          (iv) make any necessary conforming changes to 
                      guidelines; and
                          (v) ensure that the guidelines adequately meet 
                      the purposes of sentencing, as set forth in 
                      section 3553(a)(2) of title 18, United States 
                      Code.
            (2) Financial <<NOTE: 28 USC 994 note.>> institution 
        fraud.--
                    (A) Directive.--Pursuant to its authority under 
                section 994 of title 28, United States Code, and in 
                accordance with this paragraph, the United States 
                Sentencing Commission shall review and, if appropriate, 
                amend the Federal Sentencing Guidelines and policy 
                statements applicable to persons convicted of fraud 
                offenses relating to financial institutions or federally 
                related mortgage loans and any other similar provisions 
                of law, to reflect the intent of Congress that the 
                penalties for the offenses under the guidelines and 
                policy statements ensure appropriate terms of 
                imprisonment for offenders involved in substantial bank 
                frauds or other frauds relating to financial 
                institutions.
                    (B) Requirements.--In making any amendments to the 
                Federal Sentencing Guidelines and policy statements 
                under subparagraph (A), the United States Sentencing 
                Commission shall--
                          (i) ensure that the guidelines and policy 
                      statements reflect--
                                    (I) the serious nature of the 
                                offenses described in subparagraph (A);
                                    (II) the need for an effective 
                                deterrent and appropriate punishment to 
                                prevent the offenses; and
                                    (III) the effectiveness of 
                                incarceration in furthering the 
                                objectives described in subclauses (I) 
                                and (II);
                          (ii) consider the extent to which the 
                      guidelines appropriately account for the potential 
                      and actual harm

[[Page 124 STAT. 2079]]

                      to the public and the financial markets resulting 
                      from the offenses;
                          (iii) ensure reasonable consistency with other 
                      relevant directives and guidelines and Federal 
                      statutes;
                          (iv) make any necessary conforming changes to 
                      guidelines; and
                          (v) ensure that the guidelines adequately meet 
                      the purposes of sentencing, as set forth in 
                      section 3553(a)(2) of title 18, United States 
                      Code.

    (b) Extension of Statute of Limitations for Securities Fraud 
Violations.--
            (1) In general.--Chapter 213 of title 18, United States 
        Code, is amended by adding at the end the following:
``Sec. 3301. Securities fraud offenses

    ``(a) Definition.--In this section, the term `securities fraud 
offense' means a violation of, or a conspiracy or an attempt to 
violate--
            ``(1) section 1348;
            ``(2) section 32(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78ff(a));
            ``(3) section 24 of the Securities Act of 1933 (15 U.S.C. 
        77x);
            ``(4) section 217 of the Investment Advisers Act of 1940 (15 
        U.S.C. 80b-17);
            ``(5) section 49 of the Investment Company Act of 1940 (15 
        U.S.C. 80a-48); or
            ``(6) section 325 of the Trust Indenture Act of 1939 (15 
        U.S.C. 77yyy).

    ``(b) Limitation.--No person shall be prosecuted, tried, or punished 
for a securities fraud offense, unless the indictment is found or the 
information is instituted within 6 years after the commission of the 
offense.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 213 of title 18, United States Code, is 
        amended by adding at the end the following:

``3301. Securities fraud offenses.''.

    (c) Amendments to the False Claims Act Relating to Limitations on 
Actions.--Section 3730(h) of title 31, United States Code, is amended--
            (1) in paragraph (1), by striking ``or agent on behalf of 
        the employee, contractor, or agent or associated others in 
        furtherance of other efforts to stop 1 or more violations of 
        this subchapter'' and inserting ``agent or associated others in 
        furtherance of an action under this section or other efforts to 
        stop 1 or more violations of this subchapter''; and
            (2) by adding at the end the following:
            ``(3) Limitation on bringing civil action.--A civil action 
        under this subsection may not be brought more than 3 years after 
        the date when the retaliation occurred.''.

[[Page 124 STAT. 2080]]

                    Subtitle H--Conforming Amendments

SEC. 1081. <<NOTE: 5 USC app. 8G note.>>  AMENDMENTS TO THE 
                          INSPECTOR GENERAL ACT.

    Effective <<NOTE: Effective date.>>  on the date of enactment of 
this Act, the Inspector General Act of 1978 <<NOTE: 5 USC app. 8G.>> (5 
U.S.C. App. 3) is amended--
            (1) in section 8G(a)(2), by inserting ``and the Bureau of 
        Consumer Financial Protection'' after ``Board of Governors of 
        the Federal Reserve System'';
            (2) in <<NOTE: Appointment.>> section 8G(c), by adding at 
        the end the following: ``For purposes of implementing this 
        section, the Chairman of the Board of Governors of the Federal 
        Reserve System shall appoint the Inspector General of the Board 
        of Governors of the Federal Reserve System and the Bureau of 
        Consumer Financial Protection. The Inspector General of the 
        Board of Governors of the Federal Reserve System and the Bureau 
        of Consumer Financial Protection shall have all of the 
        authorities and responsibilities provided by this Act with 
        respect to the Bureau of Consumer Financial Protection, as if 
        the Bureau were part of the Board of Governors of the Federal 
        Reserve System.''; and
            (3) in section 8G(g)(3), by inserting ``and the Bureau of 
        Consumer Financial Protection'' after ``Board of Governors of 
        the Federal Reserve System'' the first place that term appears.
SEC. 1082. <<NOTE: 5 USC 552a note.>> AMENDMENTS TO THE PRIVACY 
                          ACT OF 1974.

    Effective <<NOTE: Effective date.>> on the date of enactment of this 
Act, section 552a of title 5, United States Code, is amended by adding 
at the end the following:

    ``(w) Applicability to Bureau of Consumer Financial Protection.--
Except as provided in the Consumer Financial Protection Act of 2010, 
this section shall apply with respect to the Bureau of Consumer 
Financial Protection.''.
SEC. 1083. AMENDMENTS TO THE ALTERNATIVE MORTGAGE TRANSACTION 
                          PARITY ACT OF 1982.

    (a) In General.--The Alternative Mortgage Transaction Parity Act of 
1982 (12 U.S.C. 3801 et seq.) is amended--
            (1) in section 803 (12 U.S.C. 3802(1)), by striking ``1974'' 
        and all that follows through ``described and defined'' and 
        inserting the following: ``1974), in which the interest rate or 
        finance charge may be adjusted or renegotiated, described and 
        defined''; and
            (2) in section 804 (12 U.S.C. 3803)--
                    (A) in subsection (a)--
                          (i) in each of paragraphs (1), (2), and (3), 
                      by inserting after ``transactions made'' each 
                      place that term appears ``on or before the 
                      designated transfer date, as determined under 
                      section 1062 of the Consumer Financial Protection 
                      Act of 2010,'';
                          (ii) in paragraph (2), by striking ``and'' at 
                      the end;
                          (iii) in paragraph (3), by striking the period 
                      at the end and inserting ``; and''; and
                          (iv) by adding at the end the following new 
                      paragraph:
            ``(4) with respect to transactions made after the designated 
        transfer date, only in accordance with regulations governing 
        alternative mortgage transactions, as issued by the Bureau

[[Page 124 STAT. 2081]]

        of Consumer Financial Protection for federally chartered housing 
        creditors, in accordance with the rulemaking authority granted 
        to the Bureau of Consumer Financial Protection with regard to 
        federally chartered housing creditors under provisions of law 
        other than this section.'';
                    (B) by striking subsection (c) and inserting the 
                following:

    ``(c) Preemption of State Law.--An alternative mortgage transaction 
may be made by a housing creditor in accordance with this section, 
notwithstanding any State constitution, law, or regulation that 
prohibits an alternative mortgage transaction. For purposes of this 
subsection, a State constitution, law, or regulation that prohibits an 
alternative mortgage transaction does not include any State 
constitution, law, or regulation that regulates mortgage transactions 
generally, including any restriction on prepayment penalties or late 
charges.''; and
                    (C) by adding at the end the following:

    ``(d) Bureau Actions.--The Bureau of Consumer Financial Protection 
shall--
            ``(1) <<NOTE: Review.>> review the regulations identified by 
        the Comptroller of the Currency and the National Credit Union 
        Administration, (as those rules exist on the designated transfer 
        date), as applicable under paragraphs (1) through (3) of 
        subsection (a);
            ``(2) <<NOTE: Determination.>> determine whether such 
        regulations are fair and not deceptive and otherwise meet the 
        objectives of the Consumer Financial Protection Act of 2010; and
            ``(3) promulgate <<NOTE: Regulations.>>  regulations under 
        subsection (a)(4) after the designated transfer date.

    ``(e) Designated <<NOTE: Definition.>> Transfer Date.--As used in 
this section, the term `designated transfer date' means the date 
determined under section 1062 of the Consumer Financial Protection Act 
of 2010.''.

    (b) Effective <<NOTE: 12 USC 3802 note.>> Date.--This section and 
the amendments made by this section shall become effective on the 
designated transfer date.

    (c) Rule <<NOTE: 12 USC 3802 note.>> of Construction.--The 
amendments made by subsection (a) shall not affect any transaction 
covered by the Alternative Mortgage Transaction Parity Act of l982 (12 
U.S.C. 3801 et seq.) and entered into on or before the designated 
transfer date.
SEC. 1084. AMENDMENTS TO THE ELECTRONIC FUND TRANSFER ACT.

    The Electronic Fund Transfer Act <<NOTE: 15 USC 1693a et seq.>> (15 
U.S.C. 1693 et seq.) is amended--
            (1) by striking ``Board'' each place that term appears and 
        inserting ``Bureau'', except in subsections (a) and (e) of 
        section 904 (as amended in paragraph (3) of this section) and in 
        918 (15 U.S.C. 1693o) (as so designated by the Credit Card Act 
        of 2009) and section 920 (as added by section 1076);
            (2) in section 903 (15 U.S.C. 1693a)--
                    (A) by redesignating paragraphs (3) through (11) as 
                paragraphs (4) through (12), respectively; and
                    (B) by inserting after paragraph (3) the following:
            ``(4) <<NOTE: Definition.>> the term `Bureau' means the 
        Bureau of Consumer Financial Protection;'';
            (3) in section 904 (15 U.S.C. 1693b)--

[[Page 124 STAT. 2082]]

                    (A) in subsection (a), by striking ``(a) 
                Prescription by Board.--The <<NOTE: Regulations.>> Board 
                shall prescribe regulations to carry out the purposes of 
                this title.'' and inserting the following:

    ``(a) Prescription <<NOTE: Regulations.>>  by the Bureau and the 
Board.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Bureau shall prescribe rules to carry out the purposes of this 
        title.
            ``(2) Authority of the board.--The Board shall have sole 
        authority to prescribe rules--
                    ``(A) to carry out the purposes of this title with 
                respect to a person described in section 1029(a) of the 
                Consumer Financial Protection Act of 2010; and
                    ``(B) to carry out the purposes of section 920.''; 
                and
                    (B) by adding at the end the following new 
                subsection:

    ``(e) Deference.--No provision of this title may be construed as 
altering, limiting, or otherwise affecting the deference that a court 
affords to--
            ``(1) the Bureau in making determinations regarding the 
        meaning or interpretation of any provision of this title for 
        which the Bureau has authority to prescribe regulations; or
            ``(2) the Board in making determinations regarding the 
        meaning or interpretation of section 920.''.
            (4) in section 916(d) (15 U.S.C. 1693m) (as so designated by 
        the Credit CARD Act of 2009)--
                    (A) in the subsection heading, by striking ``of 
                Board or Approval of Duly Authorized Official or 
                Employee of Federal Reserve System'';
                    (B) by inserting ``Bureau or the'' before ``Board'' 
                each place that term appears; and
                    (C) by inserting ``Bureau of Consumer Financial 
                Protection or the'' before ``Federal Reserve System''; 
                and
            (5) in section 918 (15 U.S.C. 1693o) (as so designated by 
        the Credit CARD Act of 2009)--
                    (A) in subsection (a)--
                          (i) by striking ``Compliance'' and inserting 
                      ``Subject to subtitle B of the Consumer Financial 
                      Protection Act of 2010, compliance'';
                          (ii) by striking paragraphs (1) and (2), and 
                      inserting the following:
            ``(1) section 8 of the Federal Deposit Insurance Act, by the 
        appropriate Federal banking agency, as defined in section 3(q) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with 
        respect to--
                    ``(A) national banks, Federal savings associations, 
                and Federal branches and Federal agencies of foreign 
                banks;
                    ``(B) member banks of the Federal Reserve System 
                (other than national banks), branches and agencies of 
                foreign banks (other than Federal branches, Federal 
                agencies, and insured State branches of foreign banks), 
                commercial lending companies owned or controlled by 
                foreign banks, and organizations operating under section 
                25 or 25A of the Federal Reserve Act; and
                    ``(C) banks and State savings associations insured 
                by the Federal Deposit Insurance Corporation (other than 
                members of the Federal Reserve System), and insured 
                State branches of foreign banks;'';

[[Page 124 STAT. 2083]]

                          (iii) by redesignating paragraphs (3) through 
                      (5) as paragraphs (2) through (4), respectively;
                          (iv) in paragraph (2) (as so redesignated), by 
                      striking the period at the end and inserting a 
                      semicolon;
                          (v) in paragraph (3) (as so redesignated), by 
                      striking ``and'' at the end;
                          (vi) in paragraph (4) (as so redesignated), by 
                      striking the period at the end and inserting 
                      ``and''; and
                          (vii) by adding at the end the following:
            ``(5) subtitle E of the Consumer Financial Protection Act of 
        2010, by the Bureau, with respect to any person subject to this 
        title, except that the Bureau shall not have authority to 
        enforce the requirements of section 920 or any regulations 
        prescribed by the Board under section 920.'';
                    (B) in subsection (b), by inserting ``any of 
                paragraphs (1) through (4) of'' before ``subsection 
                (a)'' each place that term appears; and
                    (C) by striking subsection (c) and inserting the 
                following:

    ``(c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the requirements 
imposed under this title is specifically committed to some other 
Government agency under any of paragraphs (1) through (4) of subsection 
(a), and subject to subtitle B of the Consumer Financial Protection Act 
of 2010, the Federal Trade Commission shall be authorized to enforce 
such requirements. For the purpose of the exercise by the Federal Trade 
Commission of its functions and powers under the Federal Trade 
Commission Act, a violation of any requirement imposed under this title 
shall be deemed a violation of a requirement imposed under that Act. All 
of the functions and powers of the Federal Trade Commission under the 
Federal Trade Commission Act are available to the Federal Trade 
Commission to enforce compliance by any person subject to the 
jurisdiction of the Federal Trade Commission with the requirements 
imposed under this title, irrespective of whether that person is engaged 
in commerce or meets any other jurisdictional tests under the Federal 
Trade Commission Act.''.
SEC. 1085. AMENDMENTS TO THE EQUAL CREDIT OPPORTUNITY ACT.

    The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is 
amended--
            (1) by striking ``Board'' each place that term appears, 
        other than in section 703(f) (as added by this section) and 
        section 704(a)(4) (15 U.S.C. 1691c(a)(4)), and inserting 
        ``Bureau'';
            (2) in section 702 (15 U.S.C. 1691a), by striking subsection 
        (c) and inserting the following:

    ``(c) The <<NOTE: Definition.>> term `Bureau' means the Bureau of 
Consumer Financial Protection.'';
            (3) in section 703 (15 U.S.C. 1691b)--
                    (A) by striking the section heading and inserting 
                the following:
``SEC. 703. PROMULGATION OF REGULATIONS BY THE BUREAU.'';
                    (B) by striking ``(a) Regulations.--'';
                    (C) by striking subsection (b);

[[Page 124 STAT. 2084]]

                    (D) by redesignating paragraphs (1) through (5) as 
                subsections (a) through (e), respectively;
                    (E) in subsection (c), as so redesignated, by 
                striking ``paragraph (2)'' and inserting ``subsection 
                (b)''; and
                    (F) by adding at the end the following:

    ``(f) Board <<NOTE: Regulations.>>  Authority.--Notwithstanding 
subsection (a), the Board shall prescribe regulations to carry out the 
purposes of this title with respect to a person described in section 
1029(a) of the Consumer Financial Protection Act of 2010. These 
regulations may contain but are not limited to such classifications, 
differentiation, or other provision, and may provide for such 
adjustments and exceptions for any class of transactions, as in the 
judgment of the Board are necessary or proper to effectuate the purposes 
of this title, to prevent circumvention or evasion thereof, or to 
facilitate or substantiate compliance therewith.

    ``(g) Deference.--Notwithstanding any power granted to any Federal 
agency under this title, the deference that a court affords to a Federal 
agency with respect to a determination made by such agency relating to 
the meaning or interpretation of any provision of this title that is 
subject to the jurisdiction of such agency shall be applied as if that 
agency were the only agency authorized to apply, enforce, interpret, or 
administer the provisions of this title'';
            (4) in section 704 (15 U.S.C. 1691c)--
                    (A) in subsection (a)--
                          (i) by striking ``Compliance'' and inserting 
                      ``Subject to subtitle B of the Consumer Protection 
                      Financial Protection Act of 2010'';
                          (ii) by striking paragraphs (1) and (2) and 
                      inserting the following:
            ``(1) section 8 of the Federal Deposit Insurance Act, by the 
        appropriate Federal banking agency, as defined in section 3(q) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with 
        respect to--
                    ``(A) national banks, Federal savings associations, 
                and Federal branches and Federal agencies of foreign 
                banks;
                    ``(B) member banks of the Federal Reserve System 
                (other than national banks), branches and agencies of 
                foreign banks (other than Federal branches, Federal 
                agencies, and insured State branches of foreign banks), 
                commercial lending companies owned or controlled by 
                foreign banks, and organizations operating under section 
                25 or 25A of the Federal Reserve Act; and
                    ``(C) banks and State savings associations insured 
                by the Federal Deposit Insurance Corporation (other than 
                members of the Federal Reserve System), and insured 
                State branches of foreign banks;'';
                          (iii) by redesignating paragraphs (3) through 
                      (9) as paragraphs (2) through (8), respectively;
                          (iv) in paragraph (7) (as so redesignated), by 
                      striking ``and'' at the end;
                          (v) in paragraph (8) (as so redesignated), by 
                      striking the period at the end, and inserting ``; 
                      and''; and
                          (vi) by adding at the end the following:

[[Page 124 STAT. 2085]]

            ``(9) Subtitle E of the Consumer Financial Protection Act of 
        2010, by the Bureau, with respect to any person subject to this 
        title.'';
                    (B) by striking subsection (c) and inserting the 
                following:

    ``(c) Overall Enforcement Authority of Federal Trade Commission.--
Except to the extent that enforcement of the requirements imposed under 
this title is specifically committed to some other Government agency 
under any of paragraphs (1) through (8) of subsection (a), and subject 
to subtitle B of the Consumer Financial Protection Act of 2010, the 
Federal Trade Commission shall be authorized to enforce such 
requirements. For the purpose of the exercise by the Federal Trade 
Commission of its functions and powers under the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.), a violation of any requirement 
imposed under this subchapter shall be deemed a violation of a 
requirement imposed under that Act. All of the functions and powers of 
the Federal Trade Commission under the Federal Trade Commission Act are 
available to the Federal Trade Commission to enforce compliance by any 
person with the requirements imposed under this title, irrespective of 
whether that person is engaged in commerce or meets any other 
jurisdictional tests under the Federal Trade Commission Act, including 
the power to enforce any rule prescribed by the Bureau under this title 
in the same manner as if the violation had been a violation of a Federal 
Trade Commission trade regulation rule.''; and
                    (C) in subsection (d), by striking ``Board'' and 
                inserting ``Bureau'';
            (5) in section 706(e) (15 U.S.C. 1691e(e))--
                    (A) in the subsection heading--
                          (i) by striking ``Board'' each place that term 
                      appears and inserting ``Bureau''; and
                          (ii) by striking ``Federal Reserve System'' 
                      and inserting ``Bureau of Consumer Financial 
                      Protection''; and
                    (B) by striking ``Federal Reserve System'' and 
                inserting ``Bureau of Consumer Financial Protection'';
            (6) in section 706(g) (15 U.S.C. 1691e(g)), by striking 
        ``(3)'' and inserting ``(9)''; and
            (7) in section 706(f) (15 U.S.C. 1691e(f)), by striking 
        ``two years from'' each place that term appears and inserting 
        ``5 years after''.
SEC. 1086. AMENDMENTS TO THE EXPEDITED FUNDS AVAILABILITY ACT.

    (a) Amendment to Section 603.--Section 603(d)(1) of the Expedited 
Funds Availability Act (12 U.S.C. 4002) is amended by inserting after 
``Board'' the following ``, jointly with the Director of the Bureau of 
Consumer Financial Protection,''.
    (b) Amendments to Section 604.--Section 604 of the Expedited Funds 
Availability Act (12 U.S.C. 4003) is amended--
            (1) by inserting after ``Board'' each place that term 
        appears, other than in subsection (f), the following: ``, 
        jointly with the Director of the Bureau of Consumer Financial 
        Protection,''; and

[[Page 124 STAT. 2086]]

            (2) in subsection (f), by striking ``Board.'' each place 
        that term appears and inserting the following: ``Board, jointly 
        with the Director of the Bureau of Consumer Financial 
        Protection.''.

    (c) Amendments to Section 605.--Section 605 of the Expedited Funds 
Availability Act (12 U.S.C. 4004) is amended--
            (1) by inserting after ``Board'' each place that term 
        appears, other than in the heading for section 605(f)(1), the 
        following: ``, jointly with the Director of the Bureau of 
        Consumer Financial Protection,''; and
            (2) in subsection (f)(1), in the paragraph heading, by 
        inserting ``and bureau'' after ``board''.

    (d) Amendments to Section 609.--Section 609 of the Expedited Funds 
Availability Act (12 U.S.C. 4008) is amended:
            (1) in subsection (a), by inserting after ``Board'' the 
        following ``, jointly with the Director of the Bureau of 
        Consumer Financial Protection,''; and
            (2) by striking subsection (e) and inserting the following:

    ``(e) Consultations.--In prescribing regulations under subsections 
(a) and (b), the Board and the Director of the Bureau of Consumer 
Financial Protection, in the case of subsection (a), and the Board, in 
the case of subsection (b), shall consult with the Comptroller of the 
Currency, the Board of Directors of the Federal Deposit Insurance 
Corporation, and the National Credit Union Administration Board.''.
    (e) Expedited Funds Availability Improvements.--Section 603 of the 
Expedited Funds Availability Act (12 U.S.C. 4002) is amended--
            (1) in subsection (a)(2)(D), by striking ``$100'' and 
        inserting ``$200''; and
            (2) in subsection (b)(3)(C), in the subparagraph heading, by 
        striking ``$100'' and inserting ``$200''; and
            (3) in subsection (c)(1)(B)(iii), in the clause heading, by 
        striking ``$100'' and inserting ``$200''.

    (f) Regular Adjustments for Inflation.--Section 607 of the Expedited 
Funds Availability Act (12 U.S.C. 4006) is amended by adding at the end 
the following:
    ``(f) Adjustments to Dollar Amounts 
for <<NOTE: Deadline.>> Inflation.--The dollar amounts under this title 
shall be adjusted every 5 years after December 31, 2011, by the annual 
percentage increase in the Consumer Price Index for Urban Wage Earners 
and Clerical Workers, as published by the Bureau of Labor Statistics, 
rounded to the nearest multiple of $25.''.
SEC. 1087. AMENDMENTS TO THE FAIR CREDIT BILLING ACT.

    The Fair Credit Billing Act <<NOTE: 15 USC 1666, 1666c, 1666j.>> (15 
U.S.C. 1666-1666j) is amended by striking ``Board'' each place that term 
appears, other than in section 105(i) (as added by this subtitle) and 
inserting ``Bureau''.
SEC. 1088. AMENDMENTS TO THE FAIR CREDIT REPORTING ACT AND THE 
                          FAIR AND ACCURATE CREDIT TRANSACTIONS 
                          ACT OF 2003.

    (a) Fair Credit Reporting Act.--The Fair Credit Reporting Act (15 
U.S.C. 1681 et seq.) is amended--
            (1) in section 603 (15 U.S.C. 1681a)--
                    (A) by redesignating subsections (w) and (x) as 
                subsections (x) and (y), respectively; and
                    (B) by inserting after subsection (v) the following:

[[Page 124 STAT. 2087]]

    ``(w) <<NOTE: Definition.>> The term `Bureau' means the Bureau of 
Consumer Financial Protection.''; and
            (2) except as otherwise specifically provided in this 
        subsection--
                    (A) by <<NOTE: 15 USC 1681a et seq.>> striking 
                ``Federal Trade Commission'' each place that term 
                appears and inserting ``Bureau'';
                    (B) by <<NOTE: 15 USC 1681s.>> striking ``FTC'' each 
                place that term appears and inserting ``Bureau'';
                    (C) by <<NOTE: 15 USC 1681a et seq.>> striking ``the 
                Commission'' each place that term appears, other than 
                sections 615(e) (15 U.S.C. 1681m(e)) and 628(a)(1) (15 
                U.S.C. 1681w(a)(1)), and inserting ``the Bureau''; and
                    (D) <<NOTE: 15 USC 1681c, 1681s-2.>> by striking 
                ``The Federal banking agencies, the National Credit 
                Union Administration, and the Commission shall jointly'' 
                each place that term appears, other than section 
                615(e)(1) (15 U.S.C. 1681m(e)) and section 628(a)(1) (15 
                U.S.C. 1681w(a)(1)), and inserting ``The Bureau shall'';
            (3) in section 603(k)(2) (15 U.S.C. 1681a(k)(2)), by 
        striking ``Board of Governors of the Federal Reserve System'' 
        and inserting ``Bureau'';
            (4) in section 604(g) (15 U.S.C. 1681b(g))--
                    (A) in paragraph (3), by striking subparagraph (C) 
                and inserting the following:
                    ``(C) as otherwise determined to be necessary and 
                appropriate, by regulation or order, by the Bureau or 
                the applicable State insurance authority (with respect 
                to any person engaged in providing insurance or 
                annuities).''; and
                    (B) by striking paragraph (5) and inserting the 
                following:
            ``(5) Regulations and effective date for paragraph (2).--
                    ``(A) Regulations required.--The Bureau may, after 
                notice and opportunity for comment, prescribe 
                regulations that permit transactions under paragraph (2) 
                that are determined to be necessary and appropriate to 
                protect legitimate operational, transactional, risk, 
                consumer, and other needs (and which shall include 
                permitting actions necessary for administrative 
                verification purposes), consistent with the intent of 
                paragraph (2) to restrict the use of medical information 
                for inappropriate purposes.'';
            (5) in section 605(h)(2)(A) (15 U.S.C. 1681c(h)(2)(A)), by 
        striking ``with respect to the entities that are subject to 
        their respective enforcement authority under section 621'' and 
        inserting ``, in consultation with the Federal banking agencies, 
        the National Credit Union Administration, and the Federal Trade 
        Commission,''.
            (6) in section 611(e)(2) (15 U.S.C. 1681i(e)), by striking 
        paragraph (2) and inserting the following:
            ``(2) Exclusion.--Complaints received or obtained by the 
        Bureau pursuant to its investigative authority under the 
        Consumer Financial Protection Act of 2010 shall not be subject 
        to paragraph (1).'';
            (7) in section 615(d)(2)(B) (15 U.S.C. 1681m(d)(2)(B)), by 
        striking ``the Federal banking agencies'' and inserting ``the 
        Federal Trade Commission, the Federal banking agencies,'';
            (8) in section 615(e)(1) (15 U.S.C. 1681m(e)(1)), by 
        striking ``and the Commission'' and inserting ``the Federal 
        Trade

[[Page 124 STAT. 2088]]

        Commission, the Commodity Futures Trading Commission, and the 
        Securities and Exchange Commission'';
            (9) in section 615(h)(6) (15 U.S.C. 1681m(h)(6)), by 
        striking subparagraph (A) and inserting the following:
                    ``(A) Rules required.--The Bureau shall prescribe 
                rules to carry out this subsection.'';
            (10) in section 621 (15 U.S.C. 1681s)--
                    (A) by striking subsection (a) and inserting the 
                following:

    ``(a) Enforcement by Federal Trade Commission.--
            ``(1) In general.--The Federal Trade Commission shall be 
        authorized to enforce compliance with the requirements imposed 
        by this title under the Federal Trade Commission Act (15 U.S.C. 
        41 et seq.), with respect to consumer reporting agencies and all 
        other persons subject thereto, except to the extent that 
        enforcement of the requirements imposed under this title is 
        specifically committed to some other Government agency under any 
        of subparagraphs (A) through (G) of subsection (b)(1), and 
        subject to subtitle B of the Consumer Financial Protection Act 
        of 2010, subsection (b). For the purpose of the exercise by the 
        Federal Trade Commission of its functions and powers under the 
        Federal Trade Commission Act, a violation of any requirement or 
        prohibition imposed under this title shall constitute an unfair 
        or deceptive act or practice in commerce, in violation of 
        section 5(a) of the Federal Trade Commission Act (15 U.S.C. 
        45(a)), and shall be subject to enforcement by the Federal Trade 
        Commission under section 5(b) of that Act with respect to any 
        consumer reporting agency or person that is subject to 
        enforcement by the Federal Trade Commission pursuant to this 
        subsection, irrespective of whether that person is engaged in 
        commerce or meets any other jurisdictional tests under the 
        Federal Trade Commission Act. The Federal Trade Commission shall 
        have such procedural, investigative, and enforcement powers, 
        including the power to issue procedural rules in enforcing 
        compliance with the requirements imposed under this title and to 
        require the filing of reports, the production of documents, and 
        the appearance of witnesses, as though the applicable terms and 
        conditions of the Federal Trade Commission Act were part of this 
        title. Any person violating any of the provisions of this title 
        shall be subject to the penalties and entitled to the privileges 
        and immunities provided in the Federal Trade Commission Act as 
        though the applicable terms and provisions of such Act are part 
        of this title.
            ``(2) Penalties.--
                    ``(A) Knowing violations.--Except as otherwise 
                provided by subtitle B of the Consumer Financial 
                Protection Act of 2010, in the event of a knowing 
                violation, which constitutes a pattern or practice of 
                violations of this title, the Federal Trade Commission 
                may commence a civil action to recover a civil penalty 
                in a district court of the United States against any 
                person that violates this title. In such action, such 
                person shall be liable for a civil penalty of not more 
                than $2,500 per violation.
                    ``(B) Determining penalty amount.--In determining 
                the amount of a civil penalty under subparagraph (A), 
                the court shall take into account the degree of 
                culpability, any history of such prior conduct, ability 
                to pay, effect

[[Page 124 STAT. 2089]]

                on ability to continue to do business, and such other 
                matters as justice may require.
                    ``(C) Limitation.--Notwithstanding paragraph (2), a 
                court may not impose any civil penalty on a person for a 
                violation of section 623(a)(1), unless the person has 
                been enjoined from committing the violation, or ordered 
                not to commit the violation, in an action or proceeding 
                brought by or on behalf of the Federal Trade Commission, 
                and has violated the injunction or order, and the court 
                may not impose any civil penalty for any violation 
                occurring before the date of the violation of the 
                injunction or order.'';
                    (B) by striking subsection (b) and inserting the 
                following:

    ``(b) Enforcement by Other Agencies.--
            ``(1) In general.--Subject to subtitle B of the Consumer 
        Financial Protection Act of 2010, compliance with the 
        requirements imposed under this title with respect to consumer 
        reporting agencies, persons who use consumer reports from such 
        agencies, persons who furnish information to such agencies, and 
        users of information that are subject to section 615(d) shall be 
        enforced under--
                    ``(A) section 8 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1818), by the appropriate Federal banking 
                agency, as defined in section 3(q) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813(q)), with respect 
                to--
                          ``(i) any national bank or State savings 
                      association, and any Federal branch or Federal 
                      agency of a foreign bank;
                          ``(ii) any member bank of the Federal Reserve 
                      System (other than a national bank), a branch or 
                      agency of a foreign bank (other than a Federal 
                      branch, Federal agency, or insured State branch of 
                      a foreign bank), a commercial lending company 
                      owned or controlled by a foreign bank, and any 
                      organization operating under section 25 or 25A of 
                      the Federal Reserve Act; and
                          ``(iii) any bank or Federal savings 
                      association insured by the Federal Deposit 
                      Insurance Corporation (other than a member of the 
                      Federal Reserve System) and any insured State 
                      branch of a foreign bank;
                    ``(B) the Federal Credit Union Act (12 U.S.C. 1751 
                et seq.), by the Administrator of the National Credit 
                Union Administration with respect to any Federal credit 
                union;
                    ``(C) subtitle IV of title 49, United States Code, 
                by the Secretary of Transportation, with respect to all 
                carriers subject to the jurisdiction of the Surface 
                Transportation Board;
                    ``(D) the Federal Aviation Act of 1958 (49 U.S.C. 
                App. 1301 et seq.), by the Secretary of Transportation, 
                with respect to any air carrier or foreign air carrier 
                subject to that Act;
                    ``(E) the Packers and Stockyards Act, 1921 (7 U.S.C. 
                181 et seq.) (except as provided in section 406 of that 
                Act), by the Secretary of Agriculture, with respect to 
                any activities subject to that Act;

[[Page 124 STAT. 2090]]

                    ``(F) the Commodity Exchange Act, with respect to a 
                person subject to the jurisdiction of the Commodity 
                Futures Trading Commission;
                    ``(G) the Federal securities laws, and any other 
                laws that are subject to the jurisdiction of the 
                Securities and Exchange Commission, with respect to a 
                person that is subject to the jurisdiction of the 
                Securities and Exchange Commission; and
                    ``(H) subtitle E of the Consumer Financial 
                Protection Act of 2010, by the Bureau, with respect to 
                any person subject to this title.
            ``(2) Incorporated definitions.--The terms used in paragraph 
        (1) that are not defined in this title or otherwise defined in 
        section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(s)) have the same meanings as in section 1(b) of the 
        International Banking Act of 1978 (12 U.S.C. 3101).'';
                    (C) in subsection (c)(2)--
                          (i) by inserting ``and the Federal Trade 
                      Commission'' before ``or the appropriate''; and
                          (ii) by inserting ``and the Federal Trade 
                      Commission'' before ``or appropriate'' each place 
                      that term appears;
                    (D) in subsection (c)(4), by inserting before ``or 
                the appropriate'' each place that term appears the 
                following: ``, the Federal Trade Commission,'';
                    (E) by striking subsection (e) and inserting the 
                following:

    ``(e) Regulatory <<NOTE: Applicability.>>  Authority.--
            ``(1) In general.--The Bureau shall prescribe such 
        regulations as are necessary to carry out the purposes of this 
        title, except with respect to sections 615(e) and 628. The 
        Bureau may prescribe regulations as may be necessary or 
        appropriate to administer and carry out the purposes and 
        objectives of this title, and to prevent evasions thereof or to 
        facilitate compliance therewith. Except as provided in section 
        1029(a) of the Consumer Financial Protection Act of 2010, the 
        regulations prescribed by the Bureau under this title shall 
        apply to any person that is subject to this title, 
        notwithstanding the enforcement authorities granted to other 
        agencies under this section.
            ``(2) Deference.--Notwithstanding any power granted to any 
        Federal agency under this title, the deference that a court 
        affords to a Federal agency with respect to a determination made 
        by such agency relating to the meaning or interpretation of any 
        provision of this title that is subject to the jurisdiction of 
        such agency shall be applied as if that agency were the only 
        agency authorized to apply, enforce, interpret, or administer 
        the provisions of this title The regulations prescribed by the 
        Bureau under this title shall apply to any person that is 
        subject to this title, notwithstanding the enforcement 
        authorities granted to other agencies under this section.''; and
                    (F) in subsection (f)(2), by striking ``the Federal 
                banking agencies'' and insert ``the Federal Trade 
                Commission, the Federal banking agencies,'';
            (11) in section 623 (15 U.S.C. 1681s-2)--
                    (A) in subsection (a)(7), by striking subparagraph 
                (D) and inserting the following:
                    ``(D) Model disclosure.--

[[Page 124 STAT. 2091]]

                          ``(i) Duty of bureau.--The Bureau shall 
                      prescribe a brief model disclosure that a 
                      financial institution may use to comply with 
                      subparagraph (A), which shall not exceed 30 words.
                          ``(ii) Use of model not required.--No 
                      provision of this paragraph may be construed to 
                      require a financial institution to use any such 
                      model form prescribed by the Bureau.
                          ``(iii) Compliance using model.--A financial 
                      institution shall be deemed to be in compliance 
                      with subparagraph (A) if the financial institution 
                      uses any model form prescribed by the Bureau under 
                      this subparagraph, or the financial institution 
                      uses any such model form and rearranges its 
                      format.'';
                    (B) in subsection (a)(8), by inserting ``, in 
                consultation with the Federal Trade Commission, the 
                Federal banking agencies, and the National Credit Union 
                Administration,'' before ``shall jointly''; and
                    (C) by striking subsection (e) and inserting the 
                following:

    ``(e) Accuracy Guidelines and Regulations Required.--
            ``(1) Guidelines.--The Bureau shall, with respect to persons 
        or entities that are subject to the enforcement authority of the 
        Bureau under section 621--
                    ``(A) establish and maintain guidelines for use by 
                each person that furnishes information to a consumer 
                reporting agency regarding the accuracy and integrity of 
                the information relating to consumers that such entities 
                furnish to consumer reporting agencies, and update such 
                guidelines as often as necessary; and
                    ``(B) prescribe regulations requiring each person 
                that furnishes information to a consumer reporting 
                agency to establish reasonable policies and procedures 
                for implementing the guidelines established pursuant to 
                subparagraph (A).
            ``(2) Criteria.--In developing the guidelines required by 
        paragraph (1)(A), the Bureau shall--
                    ``(A) identify patterns, practices, and specific 
                forms of activity that can compromise the accuracy and 
                integrity of information furnished to consumer reporting 
                agencies;
                    ``(B) <<NOTE: Review.>> review the methods 
                (including technological means) used to furnish 
                information relating to consumers to consumer reporting 
                agencies;
                    ``(C) <<NOTE: Determination.>> determine whether 
                persons that furnish information to consumer reporting 
                agencies maintain and enforce policies to ensure the 
                accuracy and integrity of information furnished to 
                consumer reporting agencies; and
                    ``(D) <<NOTE: Examination.>> examine the policies 
                and processes that persons that furnish information to 
                consumer reporting agencies employ to conduct 
                reinvestigations and correct inaccurate information 
                relating to consumers that has been furnished to 
                consumer reporting agencies.'';
            (12) in section 628(a)(1) (15 U.S.C. 1681w(a)(1)), by 
        striking ``Not later than'' and all that follows through 
        ``Exchange Commission,'' and inserting ``The Federal Trade 
        Commission, the Securities and Exchange Commission, the 
        Commodity Futures Trading Commission, the Federal banking 
        agencies,

[[Page 124 STAT. 2092]]

        and the National Credit Union Administration, with respect to 
        the entities that are subject to their respective enforcement 
        authority under section 621,''; and
            (13) in section 628(a)(3) (15 U.S.C. 1681w(a)(3)), by 
        striking ``the Federal banking agencies, the National Credit 
        Union Administration, the Commission, and the Securities and 
        Exchange Commission'' and inserting ``the agencies identified in 
        paragraph (1)''.

    (b) Fair and Accurate Credit Transactions Act of 2003.--The Fair and 
Accurate Credit Transactions Act of 2003 (Public Law 108-159) is 
amended--
            (1) in section 112(b) (15 U.S.C. 1681c-1 note), by striking 
        ``Commission'' and inserting ``Bureau'';
            (2) in section 211(d) (15 U.S.C. 1681j note), by striking 
        ``Commission'' each place that term appears and inserting 
        ``Bureau'';
            (3) in section 214(b) (15 U.S.C. 1681s-3 note), by striking 
        paragraph (1) and inserting the following:
            ``(1) In general.--Regulations <<NOTE: Regulations.>>  to 
        carry out section 624 of the Fair Credit Reporting Act (15 
        U.S.C. 1681s-3), shall be prescribed, as described in paragraph 
        (2), by--
                    ``(A) the Commodity Futures Trading Commission, with 
                respect to entities subject to its enforcement 
                authorities;
                    ``(B) the Securities and Exchange Commission, with 
                respect to entities subject to its enforcement 
                authorities; and
                    ``(C) the Bureau, with respect to other entities 
                subject to this Act.''; and
            (4) in section 214(e)(1) (15 U.S.C. 1681s-3 note), by 
        striking ``Commission'' and inserting ``Bureau''.
SEC. 1089. AMENDMENTS TO THE FAIR DEBT COLLECTION PRACTICES ACT.

    The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) is 
amended--
            (1) by <<NOTE: 15 USC 1692k, 1692m, 1692o.>> striking 
        ``Commission'' each place that term appears and inserting 
        ``Bureau'';
            (2) in section 803 (15 U.S.C. 1692a)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) The <<NOTE: Definition.>> term `Bureau' means the 
        Bureau of Consumer Financial Protection.'';
            (3) in section 814 (15 U.S.C. 1692l)--
                    (A) by striking subsection (a) and inserting the 
                following:

    ``(a) Federal <<NOTE: Compliance.>> Trade Commission.--The Federal 
Trade Commission shall be authorized to enforce compliance with this 
title, except to the extent that enforcement of the requirements imposed 
under this title is specifically committed to another Government agency 
under any of paragraphs (1) through (5) of subsection (b), subject to 
subtitle B of the Consumer Financial Protection Act of 2010. For purpose 
of the exercise by the Federal Trade Commission of its functions and 
powers under the Federal Trade Commission Act (15 U.S.C. 41 et seq.), a 
violation of this title shall be deemed an unfair or deceptive act or 
practice in violation of that Act. All of the functions and powers of 
the Federal Trade Commission

[[Page 124 STAT. 2093]]

under the Federal Trade Commission Act are available to the Federal 
Trade Commission to enforce compliance by any person with this title, 
irrespective of whether that person is engaged in commerce or meets any 
other jurisdictional tests under the Federal Trade Commission Act, 
including the power to enforce the provisions of this title, in the same 
manner as if the violation had been a violation of a Federal Trade 
Commission trade regulation rule.''; and
                    (B) in subsection (b)--
                          (i) by striking ``Compliance'' and inserting 
                      ``Subject to subtitle B of the Consumer Financial 
                      Protection Act of 2010, compliance'';
                          (ii) by striking paragraphs (1) and (2) and 
                      inserting the following:
            ``(1) section 8 of the Federal Deposit Insurance Act, by the 
        appropriate Federal banking agency, as defined in section 3(q) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with 
        respect to--
                    ``(A) national banks, Federal savings associations, 
                and Federal branches and Federal agencies of foreign 
                banks;
                    ``(B) member banks of the Federal Reserve System 
                (other than national banks), branches and agencies of 
                foreign banks (other than Federal branches, Federal 
                agencies, and insured State branches of foreign banks), 
                commercial lending companies owned or controlled by 
                foreign banks, and organizations operating under section 
                25 or 25A of the Federal Reserve Act; and
                    ``(C) banks and State savings associations insured 
                by the Federal Deposit Insurance Corporation (other than 
                members of the Federal Reserve System), and insured 
                State branches of foreign banks;'';
                          (iii) by redesignating paragraphs (3) through 
                      (6), as paragraphs (2) through (5), respectively;
                          (iv) in paragraph (4) (as so redesignated), by 
                      striking ``and'' at the end;
                          (v) in paragraph (5) (as so redesignated), by 
                      striking the period at the end and inserting ``; 
                      and''; and
                          (vi) by inserting before the undesignated 
                      matter at the end the following:
            ``(6) subtitle E of the Consumer Financial Protection Act of 
        2010, by the Bureau, with respect to any person subject to this 
        title.''.
            (4) in subsection (d), by striking ``Neither the 
        Commission'' and all that follows through the end of the 
        subsection and inserting the following: ``Except as provided in 
        section 1029(a) of the Consumer Financial Protection Act of 
        2010, the Bureau may prescribe rules with respect to the 
        collection of debts by debt collectors, as defined in this 
        title.''.
SEC. 1090. AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended--
            (1) in section 8(t) (12 U.S.C. 1818(t)), by adding at the 
        end the following:

[[Page 124 STAT. 2094]]

            ``(6) Referral to bureau of consumer financial protection.--
        Subject to subtitle B of the Consumer Financial Protection Act 
        of 2010, each appropriate Federal banking agency shall make a 
        referral to the Bureau of Consumer Financial Protection when the 
        Federal banking agency has a reasonable belief that a violation 
        of an enumerated consumer law, as defined in the Consumer 
        Financial Protection Act of 2010, has been committed by any 
        insured depository institution or institution-affiliated party 
        within the jurisdiction of that appropriate Federal banking 
        agency.''; and
            (2) in section 43 (12 U.S.C. 1831t)--
                    (A) in subsection (c), by striking ``Federal Trade 
                Commission'' and inserting ``Bureau'';
                    (B) in subsection (d), by striking ``Federal Trade 
                Commission'' and inserting ``Bureau'';
                    (C) in subsection (e)--
                          (i) in paragraph (2), by striking ``Federal 
                      Trade Commission'' and inserting ``Bureau''; and
                          (ii) by adding at the end the following new 
                      paragraph:
            ``(5) Bureau.--The <<NOTE: Definition.>> term `Bureau' means 
        the Bureau of Consumer Financial Protection.''; and
                    (D) in subsection (f)--
                          (i) by striking paragraph (1) and inserting 
                      the following:
            ``(1) Limited enforcement authority.--Compliance with the 
        requirements of subsections (b), (c), and (e), and any 
        regulation prescribed or order issued under such subsection, 
        shall be enforced under the Consumer Financial Protection Act of 
        2010, by the Bureau, subject to subtitle B of the Consumer 
        Financial Protection Act of 2010, and under the Federal Trade 
        Commission Act (15 U.S.C. 41 et seq.) by the Federal Trade 
        Commission.''; and
                          (ii) in paragraph (2), by striking 
                      subparagraph (C) and inserting the following:
                    ``(C) Limitation on state action while federal 
                action pending.--If the Bureau or Federal Trade 
                Commission has instituted an enforcement action for a 
                violation of this section, no appropriate State 
                supervisory agency may, during the pendency of such 
                action, bring an action under this section against any 
                defendant named in the complaint of the Bureau or 
                Federal Trade Commission for any violation of this 
                section that is alleged in that complaint.''.
SEC. 1091. AMENDMENT TO FEDERAL FINANCIAL INSTITUTIONS EXAMINATION 
                          COUNCIL ACT OF 1978.

    Section 1004(a)(4) of the Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3303(a)(4)) is amended by striking 
``Director, Office of Thrift Supervision'' and inserting ``Director of 
the Consumer Financial Protection Bureau''.
SEC. 1092. AMENDMENTS TO THE FEDERAL TRADE COMMISSION ACT.

    Section 18(f) of the Federal Trade Commission Act (15 U.S.C. 57a(f)) 
is amended--
            (1) by striking the subsection heading and inserting the 
        following:

[[Page 124 STAT. 2095]]

    ``(f) Definitions of Banks, Savings and Loan Institutions, and 
Federal Credit Unions.--''.
            (2) by striking paragraph (1) and inserting the following:
            ``(1) [Repealed.]'';
            (3) by striking paragraphs (5) through (7);
            (4) in paragraph (2)--
                    (A) by striking ``(2) Enforcement'' and all that 
                follows through ``in the case of'' and inserting the 
                following:
            ``(2) Definition.--For purposes of this Act, the term `bank' 
        means'';
                    (B) in subparagraph (A), by striking ``, by the 
                division'' and all that follows through ``Currency'';
                    (C) in subparagraph (B)--
                          (i) by striking ``, by the division'' and all 
                      that follows through ``System''; and
                          (ii) by striking ``25(a)'' and inserting 
                      ``25A''; and
                    (D) in subparagraph (C)--
                          (i) by striking ``(other'' and inserting 
                      ``(other than''; and
                          (ii) by striking ``, by the division'' and all 
                      that follows through ``Corporation'';
            (5) in paragraph (3), by striking ``Compliance'' and all 
        that follows through ``as defined in'' and inserting the 
        following: ``For purposes of this Act, the term ``savings and 
        loan institution'' has the same meaning as in''; and
            (6) in paragraph (4), by striking ``Compliance'' and all 
        that follows through ``credit unions under'' and inserting the 
        following: ``For purposes of this Act, the term ``Federal credit 
        union'' has the same meaning as in''.
SEC. 1093. AMENDMENTS TO THE GRAMM-LEACH-BLILEY ACT.

    Title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) is 
amended--
            (1) in section 501(b) (15 U.S.C. 6801(b)), by inserting ``, 
        other than the Bureau of Consumer Financial Protection,'' after 
        ``505(a)'';
            (2) in section 502(e)(5) (15 U.S.C. 6802(e)(5)), by 
        inserting ``the Bureau of Consumer Financial Protection'' after 
        ``(including'';
            (3) in section 504(a) (15 U.S.C. 6804(a))--
                    (A) by striking paragraphs (1) and (2) and inserting 
                the following:
            ``(1) Rulemaking.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), the Bureau of Consumer Financial 
                Protection and the Securities and Exchange Commission 
                shall have authority to prescribe such regulations as 
                may be necessary to carry out the purposes of this 
                subtitle with respect to financial institutions and 
                other persons subject to their respective jurisdiction 
                under section 505 (and notwithstanding subtitle B of the 
                Consumer Financial Protection Act of 2010), except that 
                the Bureau of Consumer Financial Protection shall not 
                have authority to prescribe regulations with respect to 
                the standards under section 501.
                    ``(B) CFTC.--The Commodity Futures Trading 
                Commission shall have authority to prescribe such 
                regulations as may be necessary to carry out the 
                purposes of

[[Page 124 STAT. 2096]]

                this subtitle with respect to financial institutions and 
                other persons subject to the jurisdiction of the 
                Commodity Futures Trading Commission under section 5g of 
                the Commodity Exchange Act.
                    ``(C) Federal trade commission authority.--
                Notwithstanding the authority of the Bureau of Consumer 
                Financial Protection under subparagraph (A), the Federal 
                Trade Commission shall have authority to prescribe such 
                regulations as may be necessary to carry out the 
                purposes of this subtitle with respect to any financial 
                institution that is a person described in section 
                1029(a) of the Consumer Financial Protection Act of 
                2010.
                    ``(D) Rule of construction.--Nothing in this 
                paragraph shall be construed to alter, affect, or 
                otherwise limit the authority of a State insurance 
                authority to adopt regulations to carry out this 
                subtitle.
            ``(2) Coordination, consistency, and comparability.--
        Each <<NOTE: Consultation.>> of the agencies authorized under 
        paragraph (1) to prescribe regulations shall consult and 
        coordinate with the other such agencies and, as appropriate, and 
        with representatives of State insurance authorities designated 
        by the National Association of Insurance Commissioners, for the 
        purpose of assuring, to the extent possible, that the 
        regulations prescribed by each such agency are consistent and 
        comparable with the regulations prescribed by the other such 
        agencies.''; and
                    (B) in <<NOTE: Deadline.>>  paragraph (3), by 
                striking ``, and shall be issued in final form not later 
                than 6 months after the date of enactment of this Act'';
            (4) in section 505(a) (15 U.S.C. 6805(a))--
                    (A) by striking ``This subtitle'' and all that 
                follows through ``as follows:'' and inserting ``Subject 
                to subtitle B of the Consumer Financial Protection Act 
                of 2010, this subtitle and the regulations prescribed 
                thereunder shall be enforced by the Bureau of Consumer 
                Financial Protection, the Federal functional regulators, 
                the State insurance authorities, and the Federal Trade 
                Commission with respect to financial institutions and 
                other persons subject to their jurisdiction under 
                applicable law, as follows:'';
                    (B) in paragraph (1)--
                          (i) in the matter preceding subparagraph (A), 
                      by inserting ``by the appropriate Federal banking 
                      agency, as defined in section 3(q) of the Federal 
                      Deposit Insurance Act,'' after ``Act,'';
                          (ii) in subparagraph (A), by striking ``, by 
                      the Office of the Comptroller of the Currency'';
                          (iii) in subparagraph (B), by striking ``, by 
                      the Board of Governors of the Federal Reserve 
                      System'';
                          (iv) in subparagraph (C), by striking ``, by 
                      the Board of Directors of the Federal Deposit 
                      Insurance Corporation''; and
                          (v) in subparagraph (D), by striking ``, by 
                      the Director of the Office of Thrift 
                      Supervision''; and
                    (C) by adding at the end the following:
            ``(8) Under subtitle E of the Consumer Financial Protection 
        Act of 2010, by the Bureau of Consumer Financial Protection, in 
        the case of any financial institution and other covered person 
        or service provider that is subject to the jurisdiction of the

[[Page 124 STAT. 2097]]

        Bureau and any person subject to this subtitle, but not with 
        respect to the standards under section 501.'';
            (5) in section 505(b)(1) (15 U.S.C. 6805(b)(1)), by 
        inserting ``, other than the Bureau of Consumer Financial 
        Protection,'' after ``subsection (a)''; and
            (6) in section 507(b) (15 U.S.C. 6807), by striking 
        ``Federal Trade Commission'' and inserting ``Bureau of Consumer 
        Financial Protection''.
SEC. 1094. AMENDMENTS TO THE HOME MORTGAGE DISCLOSURE ACT OF 1975.

    The Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 et seq.) is 
amended--
            (1) by <<NOTE: 12 USC 2803 et seq.>> striking ``Board'' each 
        place that term appears, other than in sections 303, 304(h), 
        305(b) (as amended by this section), and 307(a) (as amended by 
        this section) and inserting ``Bureau''.
            (2) in section 303 (12 U.S.C. 2802)--
                    (A) by redesignating paragraphs (1) through (6) as 
                paragraphs (2) through (7), respectively; and
                    (B) by inserting before paragraph (2) the following:
            ``(1) the <<NOTE: Definition.>> term `Bureau' means the 
        Bureau of Consumer Financial Protection;'';
            (3) in section 304 (12 U.S.C. 2803)--
                    (A) in subsection (b)--
                          (i) in paragraph (4), by inserting ``age,'' 
                      before ``and gender'';
                          (ii) in paragraph (3), by striking ``and'' at 
                      the end;
                          (iii) in paragraph (4), by striking the period 
                      at the end and inserting a semicolon; and
                          (iv) by adding at the end the following:
            ``(5) the number and dollar amount of mortgage loans grouped 
        according to measurements of--
                    ``(A) the total points and fees payable at 
                origination in connection with the mortgage as 
                determined by the Bureau, taking into account 15 U.S.C. 
                1602(aa)(4);
                    ``(B) the difference between the annual percentage 
                rate associated with the loan and a benchmark rate or 
                rates for all loans;
                    ``(C) the term in months of any prepayment penalty 
                or other fee or charge payable on repayment of some 
                portion of principal or the entire principal in advance 
                of scheduled payments; and
                    ``(D) such other information as the Bureau may 
                require; and
            ``(6) the number and dollar amount of mortgage loans and 
        completed applications grouped according to measurements of--
                    ``(A) the value of the real property pledged or 
                proposed to be pledged as collateral;
                    ``(B) the actual or proposed term in months of any 
                introductory period after which the rate of interest may 
                change;
                    ``(C) the presence of contractual terms or proposed 
                contractual terms that would allow the mortgagor or 
                applicant to make payments other than fully amortizing 
                payments during any portion of the loan term;

[[Page 124 STAT. 2098]]

                    ``(D) the actual or proposed term in months of the 
                mortgage loan;
                    ``(E) the channel through which application was 
                made, including retail, broker, and other relevant 
                categories;
                    ``(F) as the Bureau may determine to be appropriate, 
                a unique identifier that identifies the loan originator 
                as set forth in section 1503 of the S.A.F.E. Mortgage 
                Licensing Act of 2008;
                    ``(G) as the Bureau may determine to be appropriate, 
                a universal loan identifier;
                    ``(H) as the Bureau may determine to be appropriate, 
                the parcel number that corresponds to the real property 
                pledged or proposed to be pledged as collateral;
                    ``(I) the credit score of mortgage applicants and 
                mortgagors, in such form as the Bureau may prescribe; 
                and
                    ``(J) such other information as the Bureau may 
                require.'';
                    (B) by striking subsection (h) and inserting the 
                following:

    ``(h) Submission to Agencies.--
            ``(1) In <<NOTE: Regulations.>> general.--The data required 
        to be disclosed under subsection (b) shall be submitted to the 
        Bureau or to the appropriate agency for the institution 
        reporting under this title, in accordance with rules prescribed 
        by <<NOTE: Notice. Public comment.>> the Bureau. Notwithstanding 
        the requirement of subsection (a)(2)(A) for disclosure by census 
        tract, the Bureau, in consultation with other appropriate 
        agencies described in paragraph (2) and, after notice and 
        comment, shall develop regulations that--
                    ``(A) prescribe the format for such disclosures, the 
                method for submission of the data to the appropriate 
                agency, and the procedures for disclosing the 
                information to the public;
                    ``(B) require the collection of data required to be 
                disclosed under subsection (b) with respect to loans 
                sold by each institution reporting under this title;
                    ``(C) require disclosure of the class of the 
                purchaser of such loans;
                    ``(D) permit any reporting institution to submit in 
                writing to the Bureau or to the appropriate agency such 
                additional data or explanations as it deems relevant to 
                the decision to originate or purchase mortgage loans; 
                and
                    ``(E) modify or require modification of itemized 
                information, for the purpose of protecting the privacy 
                interests of the mortgage applicants or mortgagors, that 
                is or will be available to the public.
            ``(2) Other appropriate agencies.--The appropriate agencies 
        described in this paragraph are--
                    ``(A) the appropriate Federal banking agencies, as 
                defined in section 3(q) of the Federal Deposit Insurance 
                Act (12 U.S.C. 1813(q)), with respect to the entities 
                that are subject to the jurisdiction of each such 
                agency, respectively;
                    ``(B) the Federal Deposit Insurance Corporation for 
                banks insured by the Federal Deposit Insurance 
                Corporation (other than members of the Federal Reserve 
                System), mutual savings banks, insured State branches of 
                foreign banks, and any other depository institution 
                described in

[[Page 124 STAT. 2099]]

                section 303(2)(A) which is not otherwise referred to in 
                this paragraph;
                    ``(C) the National Credit Union Administration Board 
                with respect to credit unions; and
                    ``(D) the Secretary of Housing and Urban Development 
                with respect to other lending institutions not regulated 
                by the agencies referred to in subparagraph (A) or (B).
            ``(3) Rules for modifications under paragraph (1).--
                    ``(A) Application.--A modification under paragraph 
                (1)(E) shall apply to information concerning--
                          ``(i) credit score data described in 
                      subsection (b)(6)(I), in a manner that is 
                      consistent with the purpose described in paragraph 
                      (1)(E); and
                          ``(ii) age or any other category of data 
                      described in paragraph (5) or (6) of subsection 
                      (b), as the Bureau determines to be necessary to 
                      satisfy the purpose described in paragraph (1)(E), 
                      and in a manner consistent with that purpose.
                    ``(B) Standards.--The Bureau shall prescribe 
                standards for any modification under paragraph (1)(E) to 
                effectuate the purposes of this title, in light of the 
                privacy interests of mortgage applicants or mortgagors. 
                Where necessary to protect the privacy interests of 
                mortgage applicants or mortgagors, the Bureau shall 
                provide for the disclosure of information described in 
                subparagraph (A) in aggregate or other reasonably 
                modified form, in order to effectuate the purposes of 
                this title.'';
                    (C) in subsection (i), by striking ``subsection 
                (b)(4)'' and inserting ``subsections (b)(4), (b)(5), and 
                (b)(6)'';
                    (D) in subsection (j)--
                          (i) by striking paragraph (3) and inserting 
                      the following:
            ``(3) Change of form not required.--A depository institution 
        meets the disclosure requirement of paragraph (1) if the 
        institution provides the information required under such 
        paragraph in such formats as the Bureau may require''; and
                          (ii) in paragraph (2)(A), by striking ``in the 
                      format in which such information is maintained by 
                      the institution'' and inserting ``in such formats 
                      as the Bureau may require'';
                    (E) in subsection (m), by striking paragraph (2) and 
                inserting the following:
            ``(2) Form of information.--In complying with paragraph (1), 
        a depository institution shall provide the person requesting the 
        information with a copy of the information requested in such 
        formats as the Bureau may require.''; and
                    (F) by adding at the end the following:

    ``(n) Timing of Certain Disclosures.--
The <<NOTE: Regulations.>> data required to be disclosed under 
subsection (b) shall be submitted to the Bureau or to the appropriate 
agency for any institution reporting under this title, in accordance 
with regulations prescribed by the Bureau. Institutions shall not be 
required to report new data under paragraph (5) or (6) of subsection (b) 
before the first January 1 that occurs after the end of the 9-month 
period beginning on the date on which regulations are issued by the 
Bureau in final form with respect to such disclosures.'';
            (4) in section 305 (12 U.S.C. 2804)--

[[Page 124 STAT. 2100]]

                    (A) by striking subsection (b) and inserting the 
                following:

    ``(b) Powers of Certain Other Agencies.--
            ``(1) In general.--Subject to subtitle B of the Consumer 
        Financial Protection Act of 2010, compliance with the 
        requirements of this title shall be enforced--
                    ``(A) under section 8 of the Federal Deposit 
                Insurance Act, the appropriate Federal banking agency, 
                as defined in section 3(q) of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813(q)), with respect to--
                          ``(i) any national bank or Federal savings 
                      association, and any Federal branch or Federal 
                      agency of a foreign bank;
                          ``(ii) any member bank of the Federal Reserve 
                      System (other than a national bank), branch or 
                      agency of a foreign bank (other than a Federal 
                      branch, Federal agency, and insured State branch 
                      of a foreign bank), commercial lending company 
                      owned or controlled by a foreign bank, and any 
                      organization operating under section 25 or 25A of 
                      the Federal Reserve Act; and
                          ``(iii) any bank or State savings association 
                      insured by the Federal Deposit Insurance 
                      Corporation (other than a member of the Federal 
                      Reserve System), any mutual savings bank as, 
                      defined in section 3(f) of the Federal Deposit 
                      Insurance Act (12 U.S.C. 1813(f)), any insured 
                      State branch of a foreign bank, and any other 
                      depository institution not referred to in this 
                      paragraph or subparagraph (B) or (C);
                    ``(B) under subtitle E of the Consumer Financial 
                Protection Act of 2010, by the Bureau, with respect to 
                any person subject to this subtitle;
                    ``(C) under the Federal Credit Union Act, by the 
                Administrator of the National Credit Union 
                Administration with respect to any insured credit union; 
                and
                    ``(D) with respect to other lending institutions, by 
                the Secretary of Housing and Urban Development.
            ``(2) Incorporated definitions.--The terms used in paragraph 
        (1) that are not defined in this title or otherwise defined in 
        section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(s)) shall have the same meanings as in section 1(b) of the 
        International Banking Act of 1978 (12 U.S.C. 3101).''; and
                    (B) by adding at the end the following:

    ``(d) Overall Enforcement Authority of the Bureau of Consumer 
Financial Protection.--Subject to subtitle B of the Consumer Financial 
Protection Act of 2010, enforcement of the requirements imposed under 
this title is committed to each of the agencies under subsection (b). To 
facilitate research, examinations, and enforcement, all data collected 
pursuant to section 304 shall be available to the entities listed under 
subsection (b). The Bureau may exercise its authorities under the 
Consumer Financial Protection Act of 2010 to exercise principal 
authority to examine and enforce compliance by any person with the 
requirements of this title.'';
            (5) in section 306 (12 U.S.C. 2805(b)), by striking 
        subsection (b) and inserting the following:

    ``(b) Exemption Authority.--The Bureau may, by regulation, exempt 
from the requirements of this title any State-chartered

[[Page 124 STAT. 2101]]

depository institution within any State or subdivision thereof, if the 
agency determines that, under the law of such State or subdivision, that 
institution is subject to requirements that are substantially similar to 
those imposed under this title, and that such law contains adequate 
provisions for enforcement. Notwithstanding any other provision of this 
subsection, compliance with the requirements imposed under this 
subsection shall be enforced by the Office of the Comptroller of the 
Currency under section 8 of the Federal Deposit Insurance Act, in the 
case of national banks and Federal savings associations, the deposits of 
which are insured by the Federal Deposit Insurance Corporation.''; and
            (6) by striking section 307 (12 U.S.C. 2806) and inserting 
        the following:
``SEC. 307. COMPLIANCE <<NOTE: 12 USC 2806.>>  IMPROVEMENT 
                        METHODS.

    ``(a) In General.--
            ``(1) Consultation required.--The Director of the Bureau of 
        Consumer Financial Protection, with the assistance of the 
        Secretary, the Director of the Bureau of the Census, the Board 
        of Governors of the Federal Reserve System, the Federal Deposit 
        Insurance Corporation, and such other persons as the Bureau 
        deems appropriate, shall develop or assist in the improvement 
        of, methods of matching addresses and census tracts to 
        facilitate compliance by depository institutions in as 
        economical a manner as possible with the requirements of this 
        title.
            ``(2) Authorization of appropriations.--There are authorized 
        to be appropriated, such sums as may be necessary to carry out 
        this subsection.
            ``(3) Contracting authority.--The Director of the Bureau of 
        Consumer Financial Protection is authorized to utilize, contract 
        with, act through, or compensate any person or agency in order 
        to carry out this subsection.

    ``(b) Recommendations to Congress.--The Director of the Bureau of 
Consumer Financial Protection shall recommend to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives, such additional 
legislation as the Director of the Bureau of Consumer Financial 
Protection deems appropriate to carry out the purpose of this title.''.
SEC. 1095. AMENDMENTS TO THE HOMEOWNERS PROTECTION ACT OF 1998.

    Section 10 of the Homeowners Protection Act of 1998 (12 U.S.C. 4909) 
is amended--
            (1) in subsection (a)--
                    (A) by striking ``Compliance'' and all that follows 
                through the end of paragraph (1) and inserting the 
                following: ``Subject to subtitle B of the Consumer 
                Financial Protection Act of 2010, compliance with the 
                requirements imposed under this Act shall be enforced 
                under--
            ``(1) section 8 of the Federal Deposit Insurance Act, by the 
        appropriate Federal banking agency (as defined in section 3(q) 
        of that Act), with respect to--
                    ``(A) insured depository institutions (as defined in 
                section 3(c)(2) of that Act);
                    ``(B) depository institutions described in clause 
                (i), (ii), or (iii) of section 19(b)(1)(A) of the 
                Federal Reserve Act

[[Page 124 STAT. 2102]]

                which are not insured depository institutions (as 
                defined in section 3(c)(2) of the Federal Deposit 
                Insurance Act); and
                    ``(C) depository institutions described in clause 
                (v) or (vi) of section 19(b)(1)(A) of the Federal 
                Reserve Act which are not insured depository 
                institutions (as defined in section 3(c)(2) of the 
                Federal Deposit Insurance Act);'';
                    (B) in paragraph (2), by striking ``and'' at the 
                end;
                    (C) in paragraph (3), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(4) subtitle E of the Consumer Financial Protection Act of 
        2010, by the Bureau of Consumer Financial Protection, with 
        respect to any person subject to this Act.''; and
            (2) in subsection (b)(2), by inserting before the period at 
        the end the following: ``, subject to subtitle B of the Consumer 
        Financial Protection Act of 2010''.
SEC. 1096. AMENDMENTS TO THE HOME OWNERSHIP AND EQUITY PROTECTION 
                          ACT OF 1994.

    The Home Ownership and Equity Protection Act of 1994 (15 U.S.C. 1601 
note) is amended--
            (1) in section 158(a), by striking ``Board of Governors of 
        the Federal Reserve System, in consultation with the Consumer 
        Advisory Council of the Board'' and inserting ``Bureau, in 
        consultation with the Advisory Board to the Bureau''; and
            (2) in section 158(b), by striking ``Board of Governors of 
        the Federal Reserve System'' and inserting ``Bureau''.
SEC. 1097. <<NOTE: 15 USC 1638 note.>> AMENDMENTS TO THE OMNIBUS 
                          APPROPRIATIONS ACT, 2009.

    Section 626 of the Omnibus Appropriations Act, 2009 (15 U.S.C. 1638 
note) is amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a)(1) The <<NOTE: Regulations.>>  Bureau of Consumer Financial 
Protection shall have authority to prescribe rules with respect to 
mortgage loans in accordance with section 553 of title 5, United States 
Code. Such rulemaking shall relate to unfair or deceptive acts or 
practices regarding mortgage loans, which may include unfair or 
deceptive acts or practices involving loan modification and foreclosure 
rescue services. Any violation of a rule prescribed under this paragraph 
shall be treated as a violation of a rule prohibiting unfair, deceptive, 
or abusive acts or practices under the Consumer Financial Protection Act 
of 2010 and a violation of a rule under section 18 of the Federal Trade 
Commission Act (15 U.S.C. 57a) regarding unfair or deceptive acts or 
practices.

    ``(2) The Bureau of Consumer Financial Protection shall enforce the 
rules issued under paragraph (1) in the same manner, by the same means, 
and with the same jurisdiction, powers, and duties, as though all 
applicable terms and provisions of the Consumer Financial Protection Act 
of 2010 were incorporated into and made part of this subsection.
    ``(3) Subject to subtitle B of the Consumer Financial Protection Act 
of 2010, the Federal Trade Commission shall enforce the rules issued 
under paragraph (1), in the same manner, by the same means, and with the 
same jurisdiction, as though all applicable terms and provisions of the 
Federal Trade Commission Act were incorporated into and made part of 
this section.''; and

[[Page 124 STAT. 2103]]

            (2) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) Except as provided in paragraph (6), in any case in 
        which the attorney general of a State has reason to believe that 
        an interest of the residents of the State has been or is 
        threatened or adversely affected by the engagement of any person 
        subject to a rule prescribed under subsection (a) in practices 
        that violate such rule, the State, as parens patriae, may bring 
        a civil action on behalf of its residents in an appropriate 
        district court of the United States or other court of competent 
        jurisdiction--
                    ``(A) to enjoin that practice;
                    ``(B) to enforce compliance with the rule;
                    ``(C) to obtain damages, restitution, or other 
                compensation on behalf of the residents of the State; or
                    ``(D) to obtain penalties and relief provided under 
                the Consumer Financial Protection Act of 2010, the 
                Federal Trade Commission Act, and such other relief as 
                the court deems appropriate.'';
                    (B) in paragraphs (2) and (3), by striking ``the 
                primary Federal regulator'' each time the term appears 
                and inserting ``the Bureau of Consumer Financial 
                Protection or the Commission, as appropriate'';
                    (C) in paragraph (3), by inserting ``and subject to 
                subtitle B of the Consumer Financial Protection Act of 
                2010,'' after ``paragraph (2),''; and
                    (D) in paragraph (6), by striking ``the primary 
                Federal regulator'' each place that term appears and 
                inserting ``the Bureau of Consumer Financial Protection 
                or the Commission''.
SEC. 1098. AMENDMENTS TO THE REAL ESTATE SETTLEMENT PROCEDURES ACT 
                          OF 1974.

    The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et 
seq.) is amended--
            (1) in section 3 (12 U.S.C. 2602)--
                    (A) in paragraph (7), by striking ``and'' at the 
                end;
                    (B) in paragraph (8), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(9) <<NOTE: Definition.>> the term `Bureau' means the 
        Bureau of Consumer Financial Protection.'';
            (2) in section 4 (12 U.S.C. 2603)--
                    (A) in <<NOTE: Publication.>> subsection (a), by 
                striking the first sentence and inserting the following: 
                ``The Bureau shall publish a single, integrated 
                disclosure for mortgage loan transactions (including 
                real estate settlement cost statements) which includes 
                the disclosure requirements of this section and section 
                5, in conjunction with the disclosure requirements of 
                the Truth in Lending Act that, taken together, may apply 
                to a transaction that is subject to both or either 
                provisions of law. The purpose of such model disclosure 
                shall be to facilitate compliance with the disclosure 
                requirements of this title and the Truth in Lending Act, 
                and

[[Page 124 STAT. 2104]]

                to aid the borrower or lessee in understanding the 
                transaction by utilizing readily understandable language 
                to simplify the technical nature of the disclosures.'';
                    (B) by striking ``Secretary'' each place that term 
                appears and inserting ``Bureau''; and
                    (C) by striking ``form'' each place that term 
                appears and inserting ``forms'';
            (3) in section 5 (12 U.S.C. 2604)--
                    (A) by striking ``Secretary'' each place that term 
                appears and inserting ``Bureau''; and
                    (B) in subsection (a), by striking the first 
                sentence and inserting the following: 
                ``The <<NOTE: Booklets.>> Bureau shall prepare and 
                distribute booklets jointly addressing compliance with 
                the requirements of the Truth in Lending Act and the 
                provisions of this title, in order to help persons 
                borrowing money to finance the purchase of residential 
                real estate better to understand the nature and costs of 
                real estate settlement services.'';
            (4) in section 6(j)(3) (12 U.S.C. 2605(j)(3))--
                    (A) by striking ``Secretary'' and inserting 
                ``Bureau''; and
                    (B) by striking ``, by regulations that shall take 
                effect not later than April 20, 1991,'';
            (5) in section 7(b) (12 U.S.C. 2606(b)) by striking 
        ``Secretary'' and inserting ``Bureau'';
            (6) in section 8(c)(5) (12 U.S.C. 2607(c)(5)), by striking 
        ``Secretary'' and inserting ``Bureau'';
            (7) in section 8(d) (12 U.S.C. 2607(d))--
                    (A) in the subsection heading, by inserting ``Bureau 
                and'' before ``Secretary''; and
                    (B) by striking paragraph (4), and inserting the 
                following:
            ``(4) The Bureau, the Secretary, or the attorney general or 
        the insurance commissioner of any State may bring an action to 
        enjoin violations of this section. Except, to the extent that a 
        person is subject to the jurisdiction of the Bureau, the 
        Secretary, or the attorney general or the insurance commissioner 
        of any State, the Bureau shall have primary authority to enforce 
        or administer this section, subject to subtitle B of the 
        Consumer Financial Protection Act of 2010.'';
            (8) in section 10(c) (12 U.S.C. 2609(c) and (d)), by 
        striking ``Secretary'' and inserting ``Bureau'';
            (9) in section 16 (12 U.S.C. 2614), by inserting ``the 
        Bureau,'' before ``the Secretary'';
            (10) in section 18 (12 U.S.C. 2616), by striking 
        ``Secretary'' each place that term appears and inserting 
        ``Bureau''; and
            (11) in section 19 (12 U.S.C. 2617)--
                    (A) in the section heading by striking ``secretary'' 
                and inserting ``bureau'';
                    (B) in subsection (a), by striking ``Secretary'' 
                each place that term appears and inserting ``Bureau''; 
                and
                    (C) in subsections (b) and (c), by striking ``the 
                Secretary'' each place that term appears and inserting 
                ``the Bureau''.

[[Page 124 STAT. 2105]]

SEC. 1098A. AMENDMENTS TO THE INTERSTATE LAND SALES FULL 
                            DISCLOSURE ACT.

    The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et 
seq.) is amended--
            (1) by <<NOTE: 15 USC 1702 et seq.>> striking ``Secretary'' 
        each place that term appears and inserting ``Director'';
            (2) <<NOTE: 15 USC 1715.>> by striking ``Department of 
        Housing and Urban Development'' each place that term appears and 
        inserting ``Bureau of Consumer Financial Protection'';
            (3) by <<NOTE: 15 USC 1715.>> striking ``Department'' each 
        place that term appears and inserting ``Bureau'';
            (4) in section 1402 (15 U.S.C. 1701)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) `Director' <<NOTE: Definition.>> means the Director of 
        the Bureau of Consumer FinancialProtection;'';
                    (B) in paragraph (10), by striking ``and'' at the 
                end;
                    (C) in paragraph (11), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(12) `Bureau' <<NOTE: Definition.>> means the Bureau of 
        Consumer Financial Protection.''; and
            (5) in section 1416(a) (15 U.S.C. 1715(a)), by striking 
        ``Secretary of Housing and Urban Development'' and inserting 
        ``Director of the Bureau of Consumer Financial Protection''.
SEC. 1099. AMENDMENTS TO THE RIGHT TO FINANCIAL PRIVACY ACT OF 
                          1978.

    The Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et seq.) 
is amended--
            (1) in section 1101-- <<NOTE: 12 USC 3401.>> 
                    (A) in paragraph (6)--
                          (i) in subparagraph (A), by inserting ``and'' 
                      after the semicolon;
                          (ii) in subparagraph (B), by striking ``and'' 
                      at the end; and
                          (iii) by striking subparagraph (C); and
                    (B) in paragraph (7), by striking subparagraph (B), 
                and inserting the following:
                    ``(B) the Bureau of Consumer Financial 
                Protection;'';
            (2) in section 1112(e) (12 U.S.C. 3412(e)), by striking 
        ``and the Commodity Futures Trading Commission is permitted'' 
        and inserting ``the Commodity Futures Trading Commission, and 
        the Bureau of Consumer Financial Protection is permitted''; and
            (3) in section 1113 (12 U.S.C. 3413), by adding at the end 
        the following new subsection:

    ``(r) Disclosure to the Bureau of Consumer Financial Protection.--
Nothing in this title shall apply to the examination by or disclosure to 
the Bureau of Consumer Financial Protection of financial records or 
information in the exercise of its authority with respect to a financial 
institution.''.
SEC. 1100. AMENDMENTS TO THE SECURE AND FAIR ENFORCEMENT FOR 
                          MORTGAGE LICENSING ACT OF 2008.

    The S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) 
is amended--

[[Page 124 STAT. 2106]]

            (1) by striking ``a Federal banking agency'' each place that 
        term appears, other than in paragraphs (7) and (11) of section 
        1503 and section 1507(a)(1), and inserting ``the Bureau'';
            (2) by <<NOTE: 12 USC 5102, 5106.>> striking ``Federal 
        banking agencies'' each place that term appears and inserting 
        ``Bureau''; and
            (3) by <<NOTE: 12 USC 5102 et seq.>> striking ``Secretary'' 
        each place that term appears and inserting ``Director'';
            (4) in section 1503 (12 U.S.C. 5102)--
                    (A) by redesignating paragraphs (2) through (12) as 
                (3) through (13), respectively;
                    (B) <<NOTE: Definitions.>> by striking paragraph (1) 
                and inserting the following:
            ``(1) Bureau.--The term `Bureau' means the Bureau of 
        Consumer Financial Protection.
            ``(2) Federal banking agency.--The term `Federal banking 
        agency' means the Board of Governors of the Federal Reserve 
        System, the Office of the Comptroller of the Currency, the 
        National Credit Union Administration, and the Federal Deposit 
        Insurance Corporation.''; and
                    (C) by striking paragraph (10), as so designated by 
                this section, and inserting the following:
            ``(10) Director.--The <<NOTE: Definition.>> term `Director' 
        means the Director of the Bureau of Consumer Financial 
        Protection.''; and
            (5) in section 1507 (12 U.S.C. 5106)--
                    (A) in subsection (a)--
                          (i) by striking paragraph (1) and inserting 
                      the following:
            ``(1) In <<NOTE: System.>> general.--The Bureau shall 
        develop and maintain a system for registering employees of a 
        depository institution, employees of a subsidiary that is owned 
        and controlled by a depository institution and regulated by a 
        Federal banking agency, or employees of an institution regulated 
        by the Farm Credit Administration, as registered loan 
        originators with the Nationwide Mortgage 
        Licensing <<NOTE: Deadline.>>  System and Registry. The system 
        shall be implemented before the end of the 1-year period 
        beginning on the date of enactment of the Consumer Financial 
        Protection Act of 2010.''; and
                          (ii) in paragraph (2)--
                                    (I) by striking ``appropriate 
                                Federal banking agency and the Farm 
                                Credit Administration'' and inserting 
                                ``Bureau''; and
                                    (II) by striking ``employees's 
                                identity'' and inserting ``identity of 
                                the employee''; and
                    (B) in subsection (b), by striking ``through the 
                Financial Institutions Examination Council, and the Farm 
                Credit Administration'', and inserting ``and the Bureau 
                of Consumer Financial Protection'';
            (6) in section 1508 (12 U.S.C. 5107)--
                    (A) by striking the section heading and inserting 
                the following: ``sec. 1508. bureau of consumer financial 
                protection backup authority to establish loan originator 
                licensing system.''; and
                    (B) by adding at the end the following:

    ``(f) Regulation Authority.--

[[Page 124 STAT. 2107]]

            ``(1) In general.--The Bureau is authorized to promulgate 
        regulations setting minimum net worth or surety bond 
        requirements for residential mortgage loan originators and 
        minimum requirements for recovery funds paid into by loan 
        originators.
            ``(2) Considerations.--In issuing regulations under 
        paragraph (1), the Bureau shall take into account the need to 
        provide originators adequate incentives to originate affordable 
        and sustainable mortgage loans, as well as the need to ensure a 
        competitive origination market that maximizes consumer access to 
        affordable and sustainable mortgage loans.'';
            (7) by striking section 1510 (12 U.S.C. 5109) and inserting 
        the following:
``SEC. <<NOTE: 12 USC 5109.>> 1510. FEES.

    ``The Bureau, the Farm Credit Administration, and the Nationwide 
Mortgage Licensing System and Registry may charge reasonable fees to 
cover the costs of maintaining and providing access to information from 
the Nationwide Mortgage Licensing System and Registry, to the extent 
that such fees are not charged to consumers for access to such system 
and registry.'';
            (8) by striking section 1513 (12 U.S.C. 5112) and inserting 
        the following:
``SEC. 1513. <<NOTE: 12 USC 5112.>> LIABILITY PROVISIONS.

    ``The Bureau, any State official or agency, or any organization 
serving as the administrator of the Nationwide Mortgage Licensing System 
and Registry or a system established by the Director under section 1509, 
or any officer or employee of any such entity, shall not be subject to 
any civil action or proceeding for monetary damages by reason of the 
good faith action or omission of any officer or employee of any such 
entity, while acting within the scope of office or employment, relating 
to the collection, furnishing, or dissemination of information 
concerning persons who are loan originators or are applying for 
licensing or registration as loan originators.''; and
            (9) in section 1514 (12 U.S.C. 5113) in the section heading, 
        by striking ``under hud backup licensing system'' and inserting 
        ``by the bureau''.
SEC. 1100A. AMENDMENTS TO THE TRUTH IN LENDING ACT.

    The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended--
            (1) in section 103 (15 U.S.C. 1602)--
                    (A) by redesignating subsections (b) through (bb) as 
                subsections (c) through (cc), respectively; and
                    (B) by inserting after subsection (a) the following:

    ``(b) Bureau.--The <<NOTE: Definition.>> term `Bureau' means the 
Bureau of Consumer Financial Protection.'';
            (2) by <<NOTE: 15 USC 1602 et seq.>> striking ``Board'' each 
        place that term appears, other than in section 140(d) and 
        sections 105(i) and 108(a), as amended by this section, and 
        inserting ``Bureau'';
            (3) by <<NOTE: 15 USC 1616, 1632, 1651.>> striking ``Federal 
        Trade Commission'' each place that term appears, other than in 
        section 108(c) and section 129(m), as amended by this Act, and 
        other than in the context of a reference to the Federal Trade 
        Commission Act, and inserting ``Bureau'';
            (4) in section 105(a) (15 U.S.C. 1604(a)), in the second 
        sentence--

[[Page 124 STAT. 2108]]

                    (A) by striking ``Except in the case of a mortgage 
                referred to in section 103(aa), these regulations may 
                contain such'' and inserting ``Except with respect to 
                the provisions of section 129 that apply to a mortgage 
                referred to in section 103(aa), such regulations may 
                contain such additional requirements,''; and
                    (B) by inserting ``all or'' after ``exceptions 
                for'';
            (5) in section 105(b) (15 U.S.C. 1604(b)), by striking the 
        first sentence and inserting the following: 
        ``The <<NOTE: Publication.>> Bureau shall publish a single, 
        integrated disclosure for mortgage loan transactions (including 
        real estate settlement cost statements) which includes the 
        disclosure requirements of this title in conjunction with the 
        disclosure requirements of the Real Estate Settlement Procedures 
        Act of 1974 that, taken together, may apply to a transaction 
        that is subject to both or either provisions of law. The purpose 
        of such model disclosure shall be to facilitate compliance with 
        the disclosure requirements of this title and the Real Estate 
        Settlement Procedures Act of 1974, and to aid the borrower or 
        lessee in understanding the transaction by utilizing readily 
        understandable language to simplify the technical nature of the 
        disclosures.'';
            (6) in section 105(f)(1) (15 U.S.C. 1604(f)(1)), by 
        inserting ``all or'' after ``from all or part of this title'';
            (7) in section 105 (15 U.S.C. 1604), by adding at the end 
        the following:
                          ``(i) Authority of the board to prescribe 
                      rules.--Notwithstanding subsection (a), the Board 
                      shall have authority to prescribe rules under this 
                      title with respect to a person described in 
                      section 1029(a) of the Consumer Financial 
                      Protection Act of 2010. Regulations prescribed 
                      under this subsection may contain such 
                      classifications, differentiations, or other 
                      provisions, as in the judgment of the Board are 
                      necessary or proper to effectuate the purposes of 
                      this title, to prevent circumvention or evasion 
                      thereof, or to facilitate compliance therewith.'';
            (8) in section 108 <<NOTE: 15 USC 1607.>> (15 U.S.C. 1604), 
        by adding at the end the following:
                    (A) by striking subsection (a) and inserting the 
                following:

    ``(a) Enforcing Agencies.--Subject to subtitle B of the Consumer 
Financial Protection Act of 2010, compliance with the requirements 
imposed under this title shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance Act, by the 
        appropriate Federal banking agency, as defined in section 3(q) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with 
        respect to--
                    ``(A) national banks, Federal savings associations, 
                and Federal branches and Federal agencies of foreign 
                banks;
                    ``(B) member banks of the Federal Reserve System 
                (other than national banks), branches and agencies of 
                foreign banks (other than Federal branches, Federal 
                agencies, and insured State branches of foreign banks), 
                commercial lending companies owned or controlled by 
                foreign banks, and organizations operating under section 
                25 or 25A of the Federal Reserve Act; and

[[Page 124 STAT. 2109]]

                    ``(C) banks and State savings associations insured 
                by the Federal Deposit Insurance Corporation (other than 
                members of the Federal Reserve System), and insured 
                State branches of foreign banks;
            ``(2) the Federal Credit Union Act, by the Director of the 
        National Credit Union Administration, with respect to any 
        Federal credit union;
            ``(3) the Federal Aviation Act of 1958, by the Secretary of 
        Transportation, with respect to any air carrier or foreign air 
        carrier subject to that Act;
            ``(4) the Packers and Stockyards Act, 1921 (except as 
        provided in section 406 of that Act), by the Secretary of 
        Agriculture, with respect to any activities subject to that Act;
            ``(5) the Farm Credit Act of 1971, by the Farm Credit 
        Administration with respect to any Federal land bank, Federal 
        land bank association, Federal intermediate credit bank, or 
        production credit association; and
            ``(6) subtitle E of the Consumer Financial Protection Act of 
        2010, by the Bureau, with respect to any person subject to this 
        title.''; and
                    (B) by striking subsection (c) and inserting the 
                following:

    ``(c) Overall Enforcement Authority of the Federal Trade 
Commission.--Except to the extent that enforcement of the requirements 
imposed under this title is specifically committed to some other 
Government agency under any of paragraphs (1) through (5) of subsection 
(a), and subject to subtitle B of the Consumer Financial Protection Act 
of 2010, the Federal Trade Commission shall be authorized to enforce 
such requirements. For the purpose of the exercise by the Federal Trade 
Commission of its functions and powers under the Federal Trade 
Commission Act, a violation of any requirement imposed under this title 
shall be deemed a violation of a requirement imposed under that Act. All 
of the functions and powers of the Federal Trade Commission under the 
Federal Trade Commission Act are available to the Federal Trade 
Commission to enforce compliance by any person with the requirements 
under this title, irrespective of whether that person is engaged in 
commerce or meets any other jurisdictional tests under the Federal Trade 
Commission Act.''; and
            (9) in section 129 (15 U.S.C. 1639), by striking subsection 
        (m) and inserting the following:

    ``(m) Civil Penalties in Federal Trade Commission Enforcement 
Actions.--For purposes of enforcement by the Federal Trade Commission, 
any violation of a regulation issued by the Bureau pursuant to 
subsection (l)(2) shall be treated as a violation of a rule promulgated 
under section 18 of the Federal Trade Commission Act (15 U.S.C. 57a) 
regarding unfair or deceptive acts or practices.''; and
            (10) in chapter 5 (15 U.S.C. 1667 et seq.)--
                    (A) <<NOTE: 15 USC 1667c, 1667e, 1667f.>> by 
                striking ``the Board'' each place that term appears and 
                inserting ``the Bureau''; and
                    (B) by <<NOTE: 15 USC 1667a, 1667e, 
                1667f.>> striking ``The Board'' each place that term 
                appears and inserting ``The Bureau''.
SEC. 1100B. AMENDMENTS TO THE TRUTH IN SAVINGS ACT.

    The Truth in Savings Act (12 U.S.C. 4301 et seq.) is amended--

[[Page 124 STAT. 2110]]

            (1) by <<NOTE: 12 USC 4302 et seq.>> striking ``Board'' each 
        place that term appears, other than in section 272(b) (12 U.S.C. 
        4311), and inserting ``Bureau'';
            (2) in section 270(a) (12 U.S.C. 4309)--
                    (A) by striking ``Compliance'' and all that follows 
                through the end of paragraph (1) and inserting: 
                ``Subject to subtitle B of the Consumer Financial 
                Protection Act of 2010, compliance with the requirements 
                imposed under this subtitle shall be enforced under--
            ``(1) section 8 of the Federal Deposit Insurance Act by the 
        appropriate Federal banking agency (as defined in section 3(q) 
        of that Act), with respect to--
                    ``(A) insured depository institutions (as defined in 
                section 3(c)(2) of that Act);
                    ``(B) depository institutions described in clause 
                (i), (ii), or (iii) of section 19(b)(1)(A) of the 
                Federal Reserve Act which are not insured depository 
                institutions (as defined in section 3(c)(2) of the 
                Federal Deposit Insurance Act); and
                    ``(C) depository institutions described in clause 
                (v) or (vi) of section 19(b)(1)(A) of the Federal 
                Reserve Act which are not insured depository 
                institutions (as defined in section 3(c)(2) of the 
                Federal Deposit Insurance Act);'';
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(3) subtitle E of the Consumer Financial Protection Act of 
        2010, by the Bureau, with respect to any person subject to this 
        subtitle.'';
            (3) in section 272(b) (12 U.S.C. 4311(b)), by striking 
        ``regulation prescribed by the Board'' each place that term 
        appears and inserting ``regulation prescribed by the Bureau''; 
        and
            (4) in section 274 (12 U.S.C. 4313), by striking paragraph 
        (4) and inserting the following:
            ``(4) Bureau.--The <<NOTE: Definition.>> term `Bureau' means 
        the Bureau of Consumer Financial Protection.''.
SEC. 1100C. AMENDMENTS TO THE TELEMARKETING AND CONSUMER FRAUD AND 
                            ABUSE PREVENTION ACT.

    (a) Amendments to Section 3.--Section 3 of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6102) is amended by 
striking subsections (b) and (c) and inserting the following:
    ``(b) Rulemaking Authority.--The Commission shall have authority to 
prescribe rules under subsection (a), in accordance with section 553 of 
title 5, United States <<NOTE: Consultation.>> Code. In prescribing a 
rule under this section that relates to the provision of a consumer 
financial product or service that is subject to the Consumer Financial 
Protection Act of 2010, including any enumerated consumer law 
thereunder, the Commission shall consult with the Bureau of Consumer 
Financial Protection regarding the consistency of a proposed rule with 
standards, purposes, or objectives administered by the Bureau of 
Consumer Financial Protection.

    ``(c) Violations.--Any violation of any rule prescribed under 
subsection (a)--
            ``(1) shall be treated as a violation of a rule under 
        section 18 of the Federal Trade Commission Act regarding unfair 
        or deceptive acts or practices; and

[[Page 124 STAT. 2111]]

            ``(2) that is committed by a person subject to the Consumer 
        Financial Protection Act of 2010 shall be treated as a violation 
        of a rule under section 1031 of that Act regarding unfair, 
        deceptive, or abusive acts or practices.''.

    (b) Amendments to Section 4.--Section 4(d) of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6103(d)) is amended 
by inserting after ``Commission'' each place that term appears the 
following: ``or the Bureau of Consumer Financial Protection''.
    (c) Amendments to Section 5.--Section 5(c) of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6104(c)) is amended 
by inserting after ``Commission'' each place that term appears the 
following: ``or the Bureau of Consumer Financial Protection''.
    (d) Amendment to Section 6.--Section 6 of the Telemarketing and 
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 6105) is amended by 
adding at the end the following:
    ``(d) Enforcement by Bureau of Consumer Financial Protection.--
Except as otherwise provided in sections 3(d), 3(e), 4, and 5, and 
subject to subtitle B of the Consumer Financial Protection Act of 2010, 
this Act shall be enforced by the Bureau of Consumer Financial 
Protection under subtitle E of the Consumer Financial Protection Act of 
2010, with respect to the offering or provision of a consumer financial 
product or service subject to that Act.''.
SEC. 1100D. AMENDMENTS TO THE PAPERWORK REDUCTION ACT.

    (a) Designation as an Independent Agency.--Section 2(5) of the 
Paperwork Reduction Act (44 U.S.C. 3502(5)) is amended by inserting 
``the Bureau of Consumer Financial Protection, the Office of Financial 
Research,'' after ``the Securities and Exchange Commission,''.
    (b) Comparable Treatment.--Section 3513 of title 44, United States 
Code, is amended by adding at the end the following:
    ``(c) Comparable Treatment.--Notwithstanding any other provision of 
law, the Director shall treat or review a rule or order prescribed or 
proposed by the Director of the Bureau of Consumer Financial Protection 
on the same terms and conditions as apply to any rule or order 
prescribed or proposed by the Board of Governors of the Federal Reserve 
System.''.
SEC. 1100E. ADJUSTMENTS FOR INFLATION IN THE TRUTH IN LENDING ACT.

    (a) Caps.--
            (1) Credit transactions.--Section 104(3) of the Truth in 
        Lending Act (15 U.S.C. 1603(3)) is amended by striking 
        ``$25,000'' and inserting ``$50,000''.
            (2) Consumer leases.--Section 181(1) of the Truth in Lending 
        Act (15 U.S.C. 1667(1)) is amended by striking ``$25,000'' and 
        inserting ``$50,000''.

    (b) Adjustments for Inflation.--On <<NOTE: Deadline. 15 USC 1603 
note.>> and after December 31, 2011, the Bureau shall adjust annually 
the dollar amounts described in sections 104(3) and 181(1) of the Truth 
in Lending Act (as amended by this section), by the annual percentage 
increase in the Consumer Price Index for Urban Wage Earners and Clerical 
Workers, as published by the Bureau of Labor Statistics, rounded to the 
nearest multiple of $100, or $1,000, as applicable.

[[Page 124 STAT. 2112]]

SEC. 1100F. USE OF CONSUMER REPORTS.

    Section 615 of the Fair Credit Reporting Act (15 U.S.C. 1681m) is 
amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (2) and (3) as 
                paragraphs (3) and (4), respectively;
                    (B) by inserting after paragraph (1) the following:
            ``(2) provide to the consumer written or electronic 
        disclosure--
                    ``(A) of a numerical credit score as defined in 
                section 609(f)(2)(A) used by such person in taking any 
                adverse action based in whole or in part on any 
                information in a consumer report; and
                    ``(B) of the information set forth in subparagraphs 
                (B) through (E) of section 609(f)(1);''; and
                    (C) in paragraph (4) (as so redesignated), by 
                striking ``paragraph (2)'' and inserting ``paragraph 
                (3)''; and
            (2) in subsection (h)(5)--
                    (A) in subparagraph (C), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in subparagraph (D), by striking the period and 
                inserting ``; and''; and
                    (C) by inserting at the end the following:
                    ``(E) include a statement informing the consumer 
                of--
                          ``(i) a numerical credit score as defined in 
                      section 609(f)(2)(A), used by such person in 
                      making the credit decision described in paragraph 
                      (1) based in whole or in part on any information 
                      in a consumer report; and
                          ``(ii) the information set forth in 
                      subparagraphs (B) through (E) of section 
                      609(f)(1).''.
SEC. 1100G. SMALL BUSINESS FAIRNESS AND REGULATORY TRANSPARENCY.

    (a) Panel Requirement.--Section 609(d) of title 5, United States 
Code, is amended by striking ``means the'' and all that follows and 
inserting the following: ``means--
            ``(1) the Environmental Protection Agency;
            ``(2) the Consumer Financial Protection Bureau of the 
        Federal Reserve System; and
            ``(3) the Occupational Safety and Health Administration of 
        the Department of Labor.''.

    (b) Initial Regulatory Flexibility Analysis.--Section 603 of title 
5, United States Code, is amended by adding at the end the following:
    ``(d)(1) For a covered agency, as defined in section 609(d)(2), each 
initial regulatory flexibility analysis shall include a description of--
            ``(A) any projected increase in the cost of credit for small 
        entities;
            ``(B) any significant alternatives to the proposed rule 
        which accomplish the stated objectives of applicable statutes 
        and which minimize any increase in the cost of credit for small 
        entities; and
            ``(C) advice and recommendations of representatives of small 
        entities relating to issues described in subparagraphs (A) and 
        (B) and subsection (b).

[[Page 124 STAT. 2113]]

    ``(2) A covered agency, as defined in section 609(d)(2), shall, for 
purposes of complying with paragraph (1)(C)--
            ``(A) identify representatives of small entities in 
        consultation with the Chief Counsel for Advocacy of the Small 
        Business Administration; and
            ``(B) collect advice and recommendations from the 
        representatives identified under subparagraph (A) relating to 
        issues described in subparagraphs (A) and (B) of paragraph (1) 
        and subsection (b).''.

    (c) Final Regulatory Flexibility Analysis.--Section 604(a) of title 
5, United States Code, is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(6) for a covered agency, as defined in section 609(d)(2), 
        a description of the steps the agency has taken to minimize any 
        additional cost of credit for small entities.''.
SEC. 1100H. <<NOTE: 5 USC 552a note.>> EFFECTIVE DATE.

    Except as otherwise provided in this subtitle and the amendments 
made by this subtitle, this subtitle and the amendments made by this 
subtitle, other than sections 1081 and 1082, shall become effective on 
the designated transfer date.

               TITLE XI--FEDERAL RESERVE SYSTEM PROVISIONS

SEC. 1101. FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING 
                          AUTHORITY.

    (a) Federal Reserve Act.--The third undesignated paragraph of 
section 13 of the Federal Reserve Act (12 U.S.C. 343) (relating to 
emergency lending authority) is amended--
            (1) by inserting ``(3)(A)'' before ``In unusual'';
            (2) by striking ``individual, partnership, or corporation'' 
        the first place that term appears and inserting the following: 
        ``participant in any program or facility with broad-based 
        eligibility'';
            (3) by striking ``exchange for an individual or a 
        partnership or corporation'' and inserting ``exchange,'';
            (4) by striking ``such individual, partnership, or 
        corporation'' and inserting the following: ``such participant in 
        any program or facility with broad-based eligibility'';
            (5) by striking ``for individuals, partnerships, 
        corporations'' and inserting ``for any participant in any 
        program or facility with broad-based eligibility''; and
            (6) by striking ``may prescribe.'' and inserting the 
        following: ``may prescribe.
                    ``(B)(i) <<NOTE: Regulation. Procedures.>> As soon 
                as is practicable after the date of enactment of this 
                subparagraph, the Board shall establish, by regulation, 
                in consultation with the Secretary of the Treasury, the 
                policies and procedures governing emergency lending 
                under this paragraph. Such policies and procedures shall 
                be designed to ensure that any emergency lending program 
                or facility is for the purpose of providing liquidity to 
                the financial system, and not to aid a failing financial

[[Page 124 STAT. 2114]]

                company, and that the security for emergency loans is 
                sufficient to protect taxpayers from losses and that any 
                such program is terminated in a timely and orderly 
                fashion. The policies and procedures established by the 
                Board shall require that a Federal reserve bank assign, 
                consistent with sound risk management practices and to 
                ensure protection for the taxpayer, a lendable value to 
                all collateral for a loan executed by a Federal reserve 
                bank under this paragraph in determining whether the 
                loan is secured satisfactorily for purposes of this 
                paragraph.
                    ``(ii) The Board shall establish procedures to 
                prohibit borrowing from programs and facilities by 
                borrowers that are insolvent. Such procedures may 
                include a certification from the chief executive officer 
                (or other authorized officer) of the borrower, at the 
                time the borrower initially borrows under the program or 
                facility (with a duty by the borrower to update the 
                certification if the information in the certification 
                materially changes), that the borrower is not insolvent. 
                A borrower shall be considered insolvent for purposes of 
                this subparagraph, if the borrower is in bankruptcy, 
                resolution under title II of the Dodd-Frank Wall Street 
                Reform and Consumer Protection Act, or any other Federal 
                or State insolvency proceeding.
                    ``(iii) A program or facility that is structured to 
                remove assets from the balance sheet of a single and 
                specific company, or that is established for the purpose 
                of assisting a single and specific company avoid 
                bankruptcy, resolution under title II of the Dodd-Frank 
                Wall Street Reform and Consumer Protection Act, or any 
                other Federal or State insolvency proceeding, shall not 
                be considered a program or facility with broad-based 
                eligibility.
                    ``(iv) The Board may not establish any program or 
                facility under this paragraph without the prior approval 
                of the Secretary of the Treasury.
                    ``(C) <<NOTE: Deadlines. Reports.>> The Board shall 
                provide to the Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on Financial 
                Services of the House of Representatives--
                          ``(i) not later than 7 days after the Board 
                      authorizes any loan or other financial assistance 
                      under this paragraph, a report that includes--
                                    ``(I) the justification for the 
                                exercise of authority to provide such 
                                assistance;
                                    ``(II) the identity of the 
                                recipients of such assistance;
                                    ``(III) the date and amount of the 
                                assistance, and form in which the 
                                assistance was provided; and
                                    ``(IV) the material terms of the 
                                assistance, including--
                                            ``(aa) duration;
                                            ``(bb) collateral pledged 
                                        and the value thereof;
                                            ``(cc) all interest, fees, 
                                        and other revenue or items of 
                                        value to be received in exchange 
                                        for the assistance;

[[Page 124 STAT. 2115]]

                                            ``(dd) any requirements 
                                        imposed on the recipient with 
                                        respect to employee 
                                        compensation, distribution of 
                                        dividends, or any other 
                                        corporate decision in exchange 
                                        for the assistance; and
                                            ``(ee) the expected costs to 
                                        the taxpayers of such 
                                        assistance; and
                          ``(ii) once every 30 days, with respect to any 
                      outstanding loan or other financial assistance 
                      under this paragraph, written updates on--
                                    ``(I) the value of collateral;
                                    ``(II) the amount of interest, fees, 
                                and other revenue or items of value 
                                received in exchange for the assistance; 
                                and
                                    ``(III) the expected or final cost 
                                to the taxpayers of such assistance.
                    ``(D) The information required to be submitted to 
                Congress under subparagraph (C) related to--
                          ``(i) the identity of the participants in an 
                      emergency lending program or facility commenced 
                      under this paragraph;
                          ``(ii) the amounts borrowed by each 
                      participant in any such program or facility;
                          ``(iii) <<NOTE: Confidentiality.>> identifying 
                      details concerning the assets or collateral held 
                      by, under, or in connection with such a program or 
                      facility,
                shall be kept confidential, upon the written request of 
                the Chairman of the Board, in which case such 
                information shall be made available only to the 
                Chairpersons or Ranking Members of the Committees 
                described in subparagraph (C).
                    ``(E) If an entity to which a Federal reserve bank 
                has provided a loan under this paragraph becomes a 
                covered financial company, as defined in section 201 of 
                the Dodd-Frank Wall Street Reform and Consumer 
                Protection Act, at any time while such loan is 
                outstanding, and the Federal reserve bank incurs a 
                realized net loss on the loan, then the Federal reserve 
                bank shall have a claim equal to the amount of the net 
                realized loss against the covered entity, with the same 
                priority as an obligation to the Secretary of the 
                Treasury under section 210(b) of the Dodd-Frank Wall 
                Street Reform and Consumer Protection Act.''.

    (b) Conforming Amendment.--Section 507(a)(2) of title 11, United 
States Code, is amended by inserting ``unsecured claims of any Federal 
reserve bank related to loans made through programs or facilities 
authorized under section 13(3) of the Federal Reserve Act (12 U.S.C. 
343),'' after ``this title,''.
    (c) References.--On <<NOTE: Effective date. 12 USC 343 note.>>  and 
after the date of enactment of this Act, any reference in any provision 
of Federal law to the third undesignated paragraph of section 13 of the 
Federal Reserve Act (12 U.S.C. 343) shall be deemed to be a reference to 
section 13(3) of the Federal Reserve Act, as so designated by this 
section.
SEC. 1102. AUDITS OF SPECIAL FEDERAL RESERVE CREDIT FACILITIES.

    (a) Audits.--Section 714 of title 31, United States Code, is amended 
by adding at the end the following:

[[Page 124 STAT. 2116]]

    ``(f) Audits of Credit Facilities of the Federal Reserve System.--
            ``(1) Definitions.--In this subsection, the following 
        definitions shall apply:
                    ``(A) Credit facility.--The term `credit facility' 
                means a program or facility, including any special 
                purpose vehicle or other entity established by or on 
                behalf of the Board of Governors of the Federal Reserve 
                System or a Federal reserve bank, authorized by the 
                Board of Governors under section 13(3) of the Federal 
                Reserve Act (12 U.S.C. 343), that is not subject to 
                audit under subsection (e).
                    ``(B) Covered transaction.--The term `covered 
                transaction' means any open market transaction or 
                discount window advance that meets the definition of 
                `covered transaction' in section 11(s) of the Federal 
                Reserve Act.
            ``(2) Authority for audits and examinations.--Subject to 
        paragraph (3), and notwithstanding any limitation in subsection 
        (b) on the auditing and oversight of certain functions of the 
        Board of Governors of the Federal Reserve System or any Federal 
        reserve bank, the Comptroller General of the United States may 
        conduct audits, including onsite examinations, of the Board of 
        Governors, a Federal reserve bank, or a credit facility, if the 
        Comptroller General determines that such audits are appropriate, 
        solely for the purposes of assessing, with respect to a credit 
        facility or a covered transaction--
                    ``(A) the operational integrity, accounting, 
                financial reporting, and internal controls governing the 
                credit facility or covered transaction;
                    ``(B) the effectiveness of the security and 
                collateral policies established for the facility or 
                covered transaction in mitigating risk to the relevant 
                Federal reserve bank and taxpayers;
                    ``(C) whether the credit facility or the conduct of 
                a covered transaction inappropriately favors one or more 
                specific participants over other institutions eligible 
                to utilize the facility; and
                    ``(D) the policies governing the use, selection, or 
                payment of third-party contractors by or for any credit 
                facility or to conduct any covered transaction.
            ``(3) Reports and delayed disclosure.--
                    ``(A) Reports required.--A report on each audit 
                conducted under paragraph (2) shall be submitted by the 
                Comptroller General to the Congress before the end of 
                the 90-day period beginning on the date on which such 
                audit is completed.
                    ``(B) Contents.--The report under subparagraph (A) 
                shall include a detailed description of the findings and 
                conclusions of the Comptroller General with respect to 
                the matters described in paragraph (2) that were audited 
                and are the subject of the report, together with such 
                recommendations for legislative or administrative action 
                relating to such matters as the Comptroller General may 
                determine to be appropriate.
                    ``(C) Delayed release of certain information.--
                          ``(i) In general.--The Comptroller General 
                      shall not disclose to any person or entity, 
                      including to Congress, the names or identifying 
                      details of specific

[[Page 124 STAT. 2117]]

                      participants in any credit facility or covered 
                      transaction, the amounts borrowed by or 
                      transferred by or to specific participants in any 
                      credit facility or covered transaction, or 
                      identifying details regarding assets or collateral 
                      held or transferred by, under, or in connection 
                      with any credit facility or covered transaction, 
                      and any report provided under subparagraph (A) 
                      shall be redacted to ensure that such names and 
                      details are not disclosed.
                          ``(ii) Delayed <<NOTE: Expiration date.>>  
                      release.--The nondisclosure obligation under 
                      clause (i) shall expire with respect to any 
                      participant on the date on which the Board of 
                      Governors, directly or through a Federal reserve 
                      bank, publicly discloses the identity of the 
                      subject participant or the identifying details of 
                      the subject assets, collateral, or transaction.
                          ``(iii) General <<NOTE: Deadline.>>  
                      release.--The Comptroller General shall release a 
                      nonredacted version of any report on a credit 
                      facility 1 year after the effective date of the 
                      termination by the Board of Governors of the 
                      authorization for the credit facility. For 
                      purposes of this clause, a credit facility shall 
                      be deemed to have terminated 24 months after the 
                      date on which the credit facility ceases to make 
                      extensions of credit and loans, unless the credit 
                      facility is otherwise terminated by the Board of 
                      Governors.
                          ``(iv) Exceptions.--The nondisclosure 
                      obligation under clause (i) shall not apply to the 
                      credit facilities Maiden Lane, Maiden Lane II, and 
                      Maiden Lane III.
                          ``(v) Release of covered transaction 
                      information.--The Comptroller General shall 
                      release a nonredacted version of any report 
                      regarding covered transactions upon the release of 
                      the information regarding such covered 
                      transactions by the Board of Governors of the 
                      Federal Reserve System, as provided in section 
                      11(s) of the Federal Reserve Act.''.

    (b) Access to Records.--Section 714(d) of title 31, United States 
Code, is amended--
            (1) in paragraph (2), by inserting ``or any person or entity 
        described in paragraph (3)(A)'' after ``used by an agency'';
            (2) in paragraph (3), by inserting ``or (f)'' after 
        ``subsection (e)'' each place that term appears;
            (3) in clauses (i) and (ii) of paragraph (3)(A), by 
        inserting ``or the Federal Reserve banks'' after ``by the 
        Board'' each place that term appears;
            (4) in paragraph (3)(A)(ii), by inserting ``participating in 
        or'' after ``any entity''; and
            (5) in paragraph (3)(B), by adding at the end the following: 
        ``The Comptroller General may make and retain copies of books, 
        accounts, and other records provided under subparagraph (A) as 
        the Comptroller General deems <<NOTE: Records.>> appropriate. 
        The Comptroller General shall provide to any person or entity 
        described in subparagraph (A) a current list of officers and 
        employees to whom, with proper identification, records and 
        property may be made available, and who may make notes or copies 
        necessary to carry out a audit or examination under this 
        subsection.''.

[[Page 124 STAT. 2118]]

SEC. 1103. PUBLIC ACCESS TO INFORMATION.

    (a) In General.--Section 2B of the Federal Reserve Act (12 U.S.C. 
225b) is amended by adding at the end the following:
    ``(c) Public Access to Information.--The <<NOTE: Web posting. Time 
period.>> Board shall place on its home Internet website, a link 
entitled `Audit', which shall link to a webpage that shall serve as a 
repository of information made available to the public for a reasonable 
period of time, not less than 6 months following the date of release of 
the relevant information, including--
            ``(1) the reports prepared by the Comptroller General under 
        section 714 of title 31, United States Code;
            ``(2) the annual financial statements prepared by an 
        independent auditor for the Board in accordance with section 
        11B;
            ``(3) the reports to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate required under section 13(3) 
        (relating to emergency lending authority); and
            ``(4) such other information as the Board reasonably 
        believes is necessary or helpful to the public in understanding 
        the accounting, financial reporting, and internal controls of 
        the Board and the Federal reserve banks.''.

    (b) Federal Reserve Transparency and Release of Information.--
Section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended by 
adding at the end the following new subsection:
    ``(s) Federal Reserve Transparency and Release of Information.--
            ``(1) In general.--In order to ensure the disclosure in a 
        timely manner consistent with the purposes of this Act of 
        information concerning the borrowers and counterparties 
        participating in emergency credit facilities, discount window 
        lending programs, and open market operations authorized or 
        conducted by the Board or a Federal reserve bank, the Board of 
        Governors shall disclose, as provided in paragraph (2)--
                    ``(A) the names and identifying details of each 
                borrower, participant, or counterparty in any credit 
                facility or covered transaction;
                    ``(B) the amount borrowed by or transferred by or to 
                a specific borrower, participant, or counterparty in any 
                credit facility or covered transaction;
                    ``(C) the interest rate or discount paid by each 
                borrower, participant, or counterparty in any credit 
                facility or covered transaction; and
                    ``(D) information identifying the types and amounts 
                of collateral pledged or assets transferred in 
                connection with participation in any credit facility or 
                covered transaction.
            ``(2) Mandatory release date.--In the case of--
                    ``(A) a credit facility, the Board shall disclose 
                the information described in paragraph (1) on the date 
                that is 1 year after the effective date of the 
                termination by the Board of the authorization of the 
                credit facility; and
                    ``(B) a covered transaction, the Board shall 
                disclose the information described in paragraph (1) on 
                the last day of the eighth calendar quarter following 
                the calendar quarter in which the covered transaction 
                was conducted.
            ``(3) Earlier release date authorized.--The Chairman of the 
        Board may publicly release the information described in 
        paragraph (1) before the relevant date specified in paragraph

[[Page 124 STAT. 2119]]

        (2), if the Chairman determines that such disclosure would be in 
        the public interest and would not harm the effectiveness of the 
        relevant credit facility or the purpose or conduct of covered 
        transactions.
            ``(4) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Credit facility.--The term `credit facility' 
                has the same meaning as in section 714(f)(1)(A) of title 
                31, United States Code.
                    ``(B) Covered transaction.--The term `covered 
                transaction' means--
                          ``(i) any open market transaction with a 
                      nongovernmental third party conducted under the 
                      first undesignated paragraph of section 14 or 
                      subparagraph (a), (b), or (c) of the 2nd 
                      undesignated paragraph of such section, after the 
                      date of enactment of the Dodd-Frank Wall Street 
                      Reform and Consumer Protection Act; and
                          ``(ii) any advance made under section 10B 
                      after the date of enactment of that Act.
            ``(5) Termination of credit facility by operation of law.--A 
        credit facility shall be deemed to have terminated as of the end 
        of the 24-month period beginning on the date on which the credit 
        facility ceases to make extensions of credit and loans, unless 
        the credit facility is otherwise terminated by the Board before 
        such date.
            ``(6) Consistent treatment 
        of <<NOTE: Confidentiality.>> information.--Except as provided 
        in this subsection or section 13(3)(D), or in section 
        714(f)(3)(C) of title 31, United States Code, the information 
        described in paragraph (1) and information concerning the 
        transactions described in section 714(f) of such title, shall be 
        confidential, including for purposes of section 552(b)(3) of 
        title 5 of such Code, until the relevant mandatory release date 
        described in paragraph (2), unless the Chairman of the Board 
        determines that earlier disclosure of such information would be 
        in the public interest and would not harm the effectiveness of 
        the relevant credit facility or the purpose of conduct of the 
        relevant transactions.
            ``(7) Protection of personal privacy.--This subsection and 
        section 13(3)(C), section 714(f)(3)(C) of title 31, United 
        States Code, and subsection (a) or (c) of section 1109 of the 
        Dodd-Frank Wall Street Reform and Consumer Protection Act shall 
        not be construed as requiring any disclosure of nonpublic 
        personal information (as defined for purposes of section 502 of 
        the Gramm-Leach-Bliley Act (12 U.S.C. 6802)) concerning any 
        individual who is referenced in collateral pledged or assets 
        transferred in connection with a credit facility or covered 
        transaction, unless the person is a borrower, participant, or 
        counterparty under the credit facility or covered transaction.
            ``(8) Study of foia exemption impact.--
                    ``(A) Study.--The Inspector General of the Board of 
                Governors of the Federal Reserve System shall--
                          ``(i) conduct a study on the impact that the 
                      exemption from section 552(b)(3) of title 5 (known 
                      as the Freedom of Information Act) established 
                      under paragraph (6) has had on the ability of the 
                      public to access information about the 
                      administration by the Board of Governors of 
                      emergency credit facilities, discount

[[Page 124 STAT. 2120]]

                      window lending programs, and open market 
                      operations; and
                          ``(ii) make any recommendations on whether the 
                      exemption described in clause (i) should remain in 
                      effect.
                    ``(B) Report.--Not <<NOTE: Publication. Web 
                posting.>> later than 30 months after the date of 
                enactment of this section, the Inspector General of the 
                Board of Governors of the Federal Reserve System shall 
                submit a report on the findings of the study required 
                under subparagraph (A) to the Committee on Banking, 
                Housing, and Urban Affairs of the Senate and the 
                Committee on Financial Services of the House of 
                Representatives, and publish the report on the website 
                of the Board.
            ``(9) Rule of construction.--Nothing in this section is 
        meant to affect any pending litigation or lawsuit filed under 
        section 552 of title 5, United States Code (popularly known as 
        the Freedom of Information Act), on or before the date of 
        enactment of the Dodd-Frank Wall Street Reform and Consumer 
        Protection Act.''.
SEC. 1104. <<NOTE: 12 USC 5611.>> LIQUIDITY EVENT DETERMINATION.

    (a) Determination and Written Recommendation.--
            (1) Determination request.--The Secretary may request the 
        Corporation and the Board of Governors to determine whether a 
        liquidity event exists that warrants use of the guarantee 
        program authorized under section 1105.
            (2) Requirements of determination.--Any determination 
        pursuant to paragraph (1) shall--
                    (A) be written; and
                    (B) contain an evaluation of the evidence that--
                          (i) a liquidity event exists;
                          (ii) failure to take action would have serious 
                      adverse effects on financial stability or economic 
                      conditions in the United States; and
                          (iii) actions authorized under section 1105 
                      are needed to avoid or mitigate potential adverse 
                      effects on the United States financial system or 
                      economic conditions.

    (b) Procedures.--Notwithstanding any other provision of Federal or 
State law, upon the determination of both the Corporation (upon a vote 
of not fewer than \2/3\ of the members of the Corporation then serving) 
and the Board of Governors (upon a vote of not fewer than \2/3\ of the 
members of the Board of Governors then serving) under subsection (a) 
that a liquidity event exists that warrants use of the guarantee program 
authorized under section 1105, and with the written consent of the 
Secretary--
            (1) the Corporation shall take action in accordance with 
        section 1105(a); and
            (2) the Secretary (in consultation with the President) shall 
        take action in accordance with section 1105(c).

    (c) Documentation and Review.--
            (1) Documentation.--The Secretary shall--
                    (A) maintain the written documentation of each 
                determination of the Corporation and the Board of 
                Governors under this section; and
                    (B) provide the documentation for review under 
                paragraph (2).

[[Page 124 STAT. 2121]]

            (2) GAO review.--The Comptroller General of the United 
        States shall review and report to Congress on any determination 
        of the Corporation and the Board of Governors under subsection 
        (a), including--
                    (A) the basis for the determination; and
                    (B) the likely effect of the actions taken.

    (d) Report to Congress.--On the earlier of the date of a submission 
made to Congress under section 1105(c), or within 30 days of the date of 
a determination under subsection (a), the Secretary shall provide 
written notice of the determination of the Corporation and the Board of 
Governors to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives, including a description of the basis for the 
determination.
SEC. 1105. <<NOTE: 12 USC 5612.>> EMERGENCY FINANCIAL 
                          STABILIZATION.

    (a) In General.--Upon the written determination of the Corporation 
and the Board of Governors under section 1104, the Corporation shall 
create a widely available program to guarantee obligations of solvent 
insured depository institutions or solvent depository institution 
holding companies (including any affiliates thereof) during times of 
severe economic distress, except that a guarantee of obligations under 
this section may not include the provision of equity in any form.
    (b) Rulemaking and Terms and Conditions.--
            (1) Policies and procedures.--As soon as is practicable 
        after the date of enactment of this Act, the Corporation shall 
        establish, by regulation, and in consultation with the 
        Secretary, policies and procedures governing the issuance of 
        guarantees authorized by this section. Such policies and 
        procedures may include a requirement of collateral as a 
        condition of any such guarantee.
            (2) Terms and conditions.--The terms and conditions of any 
        guarantee program shall be established by the Corporation, with 
        the concurrence of the Secretary.

    (c) Determination of Guaranteed Amount.--
            (1) In general.--In connection with any program established 
        pursuant to subsection (a) and subject to paragraph (2) of this 
        subsection, the Secretary (in consultation with the President) 
        shall determine the maximum amount of debt outstanding that the 
        Corporation may guarantee under this section, and the President 
        may transmit to Congress a written report on the plan of the 
        Corporation to exercise the authority under this section to 
        issue guarantees up to that maximum amount and a request for 
        approval of such plan. The Corporation shall exercise the 
        authority under this section to issue guarantees up to that 
        specified maximum amount upon passage of the joint resolution of 
        approval, as provided in subsection (d). Absent such approval, 
        the Corporation shall issue no such guarantees.
            (2) Additional debt guarantee authority.--If the Secretary 
        (in consultation with the President) determines, after a 
        submission to Congress under paragraph (1), that the maximum 
        guarantee amount should be raised, and the Council concurs with 
        that determination, the President may transmit to Congress a 
        written report on the plan of the Corporation to exercise the 
        authority under this section to issue guarantees

[[Page 124 STAT. 2122]]

        up to the increased maximum debt guarantee amount. The 
        Corporation shall exercise the authority under this section to 
        issue guarantees up to that specified maximum amount upon 
        passage of the joint resolution of approval, as provided in 
        subsection (d). Absent such approval, the Corporation shall 
        issue no such guarantees.

    (d) Resolution of Approval.--
            (1) Additional debt guarantee authority.--
        A <<NOTE: President.>> request by the President under this 
        section shall be considered granted by Congress upon adoption of 
        a joint resolution approving such request. Such joint resolution 
        shall be considered in the Senate under expedited procedures.
            (2) Fast track consideration in senate.--
                    (A) Reconvening.--
                Upon <<NOTE: Notification. Deadline.>> receipt of a 
                request under subsection (c), if the Senate has 
                adjourned or recessed for more than 2 days, the majority 
                leader of the Senate, after consultation with the 
                minority leader of the Senate, shall notify the Members 
                of the Senate that, pursuant to this section, the Senate 
                shall convene not later than the second calendar day 
                after receipt of such message.
                    (B) Placement on calendar.--Upon introduction in the 
                Senate, the joint resolution shall be placed immediately 
                on the calendar.
                    (C) Floor consideration.--
                          (i) In general.--Notwithstanding <<NOTE: Time 
                      period.>>  Rule XXII of the Standing Rules of the 
                      Senate, it is in order at any time during the 
                      period beginning on the 4th day after the date on 
                      which Congress receives a request under subsection 
                      (c), and ending on the 7th day after that date 
                      (even though a previous motion to the same effect 
                      has been disagreed to) to move to proceed to the 
                      consideration of the joint resolution, and all 
                      points of order against the joint resolution (and 
                      against consideration of the joint resolution) are 
                      waived. The motion to proceed is not debatable. 
                      The motion is not subject to a motion to postpone. 
                      A motion to reconsider the vote by which the 
                      motion is agreed to or disagreed to shall not be 
                      in order. If a motion to proceed to the 
                      consideration of the resolution is agreed to, the 
                      joint resolution shall remain the unfinished 
                      business until disposed of.
                          (ii) Debate.--Debate <<NOTE: Limitation.>> on 
                      the joint resolution, and on all debatable motions 
                      and appeals in connection therewith, shall be 
                      limited to not more than 10 hours, which shall be 
                      divided equally between the majority and minority 
                      leaders or their designees. A motion further to 
                      limit debate is in order and not debatable. An 
                      amendment to, or a motion to postpone, or a motion 
                      to proceed to the consideration of other business, 
                      or a motion to recommit the joint resolution is 
                      not in order.
                          (iii) Vote on passage.--The vote on passage 
                      shall occur immediately following the conclusion 
                      of the debate on the joint resolution, and a 
                      single quorum call at the conclusion of the debate 
                      if requested in accordance with the rules of the 
                      Senate.

[[Page 124 STAT. 2123]]

                          (iv) Rulings <<NOTE: Appeals.>> of the chair 
                      on procedure.--Appeals from the decisions of the 
                      Chair relating to the application of the rules of 
                      the Senate, as the case may be, to the procedure 
                      relating to a joint resolution shall be decided 
                      without debate.
            (3) Rules.--
                    (A) Coordination with action by house of 
                representatives.-- 
                <<NOTE: Procedures. Applicability.>> If, before the 
                passage by the Senate of a joint resolution of the 
                Senate, the Senate receives a joint resolution, from the 
                House of Representatives, then the following procedures 
                shall apply:
                          (i) The joint resolution of the House of 
                      Representatives shall not be referred to a 
                      committee.
                          (ii) With respect to a joint resolution of the 
                      Senate--
                                    (I) the procedure in the Senate 
                                shall be the same as if no joint 
                                resolution had been received from the 
                                other House; but
                                    (II) the vote on passage shall be on 
                                the joint resolution of the House of 
                                Representatives.
                    (B) Treatment of joint resolution of house of 
                representatives.--If the Senate fails to introduce or 
                consider a joint resolution under this section, the 
                joint resolution of the House of Representatives shall 
                be entitled to expedited floor procedures under this 
                subsection.
                    (C) Treatment of companion measures.--If, following 
                passage of the joint resolution in the Senate, the 
                Senate then receives the companion measure from the 
                House of Representatives, the companion measure shall 
                not be debatable.
                    (D) Rules of the senate.--This subsection is enacted 
                by Congress--
                          (i) as an exercise of the rulemaking power of 
                      the Senate, and as such it is deemed a part of the 
                      rules of the Senate, but applicable only with 
                      respect to the procedure to be followed in the 
                      Senate in the case of a joint resolution, and it 
                      supersedes other rules, only to the extent that it 
                      is inconsistent with such rules; and
                          (ii) with full recognition of the 
                      constitutional right of the Senate to change the 
                      rules (so far as relating to the procedure of the 
                      Senate) at any time, in the same manner, and to 
                      the same extent as in the case of any other rule 
                      of the Senate.
            (4) Definition.--As used in this subsection, the term 
        ``joint resolution'' means only a joint resolution--
                    (A) <<NOTE: Deadline.>> that is introduced not later 
                than 3 calendar days after the date on which the request 
                referred to in subsection (c) is received by Congress;
                    (B) that does not have a preamble;
                    (C) the title of which is as follows: ``Joint 
                resolution relating to the approval of a plan to 
                guarantee obligations under section 1105 of the Dodd-
                Frank Wall Street Reform and Consumer Protection Act''; 
                and
                    (D) the matter after the resolving clause of which 
                is as follows: ``That Congress approves the obligation 
                of

[[Page 124 STAT. 2124]]

                any amount described in section 1105(c) of the Dodd-
                Frank Wall Street Reform and Consumer Protection Act.''.

    (e) Funding.--
            (1) Fees and other charges.--The Corporation shall charge 
        fees and other assessments to all participants in the program 
        established pursuant to this section, in such amounts as are 
        necessary to offset projected losses and administrative 
        expenses, including amounts borrowed pursuant to paragraph (3), 
        and such amounts shall be available to the Corporation.
            (2) Excess funds.--If, at the conclusion of the program 
        established under this section, there are any excess funds 
        collected from the fees associated with such program, the funds 
        shall be deposited in the General Fund of the Treasury.
            (3) Authority of corporation.--The Corporation--
                    (A) may borrow funds from the Secretary of the 
                Treasury and issue obligations of the Corporation to the 
                Secretary for amounts borrowed, and the amounts borrowed 
                shall be available to the Corporation for purposes of 
                carrying out a program established pursuant to this 
                section, including the payment of reasonable costs of 
                administering the program, and the obligations issued 
                shall be repaid in full with interest through fees and 
                charges paid by participants in accordance with 
                paragraphs (1) and (4), as applicable; and
                    (B) may not borrow funds from the Deposit Insurance 
                Fund established pursuant to section 11(a)(4) of the 
                Federal Deposit Insurance Act.
            (4) Backup special assessments.--To the extent that the 
        funds collected pursuant to paragraph (1) are insufficient to 
        cover any losses or expenses, including amounts borrowed 
        pursuant to paragraph (3), arising from a program established 
        pursuant to this section, the Corporation shall impose a special 
        assessment solely on participants in the program, in amounts 
        necessary to address such insufficiency, and which shall be 
        available to the Corporation to cover such losses or expenses.
            (5) Authority of the secretary.--The Secretary may purchase 
        any obligations issued under paragraph (3)(A). For such purpose, 
        the Secretary may use the proceeds of the sale of any securities 
        issued under chapter 31 of title 31, United States Code, and the 
        purposes for which securities may be issued under that chapter 
        31 are extended to include such purchases, and the amount of any 
        securities issued under that chapter 31 for such purpose shall 
        be treated in the same manner as securities issued under section 
        208(n)(5)(E).

    (f) Rule of Construction.--For purposes of this section, a guarantee 
of deposits held by insured depository institutions shall not be treated 
as a debt guarantee program.
    (g) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Company.--The term ``company'' means any entity other 
        than a natural person that is incorporated or organized under 
        Federal law or the laws of any State.
            (2) Depository institution holding company.--The term 
        ``depository institution holding company'' has the same meaning 
        as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
        1813).
            (3) Liquidity event.--The term ``liquidity event'' means--

[[Page 124 STAT. 2125]]

                    (A) an exceptional and broad reduction in the 
                general ability of financial market participants--
                          (i) to sell financial assets without an 
                      unusual and significant discount; or
                          (ii) to borrow using financial assets as 
                      collateral without an unusual and significant 
                      increase in margin; or
                    (B) an unusual and significant reduction in the 
                ability of financial market participants to obtain 
                unsecured credit.
            (4) Solvent.--The term ``solvent'' means that the value of 
        the assets of an entity exceed its obligations to creditors.
SEC. 1106. <<NOTE: 12 USC 5613.>> ADDITIONAL RELATED AMENDMENTS.

    (a) Suspension of Parallel Federal Deposit Insurance Act 
Authority.--Effective <<NOTE: Effective date.>>  upon the date of 
enactment of this section, the Corporation may not exercise its 
authority under section 13(c)(4)(G)(i) of the Federal Deposit Insurance 
Act (12 U.S.C. 1823(c)(4)(G)(i)) to establish any widely available debt 
guarantee program for which section 1105 would provide authority.

    (b) Federal Deposit Insurance Act.--Section 13(c)(4)(G) of the 
Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is amended--
            (1) in clause (i)--
                    (A) in subclause (I), by inserting ``for which the 
                Corporation has been appointed receiver'' before ``would 
                have serious''; and
                    (B) in the undesignated matter following subclause 
                (II), by inserting ``for the purpose of winding up the 
                insured depository institution for which the Corporation 
                has been appointed receiver'' after ``provide assistance 
                under this section''; and
            (2) in clause (v)(I), by striking ``The'' and inserting 
        ``Not later than 3 days after making a determination under 
        clause (i), the''.

    (c) Effect of Default on an FDIC Guarantee.--If an insured 
depository institution or depository institution holding company (as 
those terms are defined in section 3 of the Federal Deposit Insurance 
Act) participating in a program under section 1105, or any participant 
in a debt guarantee program established pursuant to section 
13(c)(4)(G)(i) of the Federal Deposit Insurance Act defaults on any 
obligation guaranteed by the Corporation after the date of enactment of 
this Act, the Corporation shall--
            (1) appoint itself as receiver for the insured depository 
        institution that defaults; and
            (2) with respect to any other participating company that is 
        not an insured depository institution that defaults--
                    (A) require--
                          (i) consideration of whether a determination 
                      shall be made, as provided in section 203 to 
                      resolve the company under section 202; and
                          (ii) <<NOTE: Deadline.>> the company to file a 
                      petition for bankruptcy under section 301 of title 
                      11, United States Code, if the Corporation is not 
                      appointed receiver pursuant to section 202 within 
                      30 days of the date of default; or

[[Page 124 STAT. 2126]]

                    (B) file a petition for involuntary bankruptcy on 
                behalf of the company under section 303 of title 11, 
                United States Code.
SEC. 1107. FEDERAL RESERVE ACT AMENDMENTS ON FEDERAL RESERVE BANK 
                          GOVERNANCE.

    The 5th subparagraph of the 4th undesignated paragraph of section 4 
of the Federal Reserve Act (12 U.S.C. 341) is amended by striking the 
2nd sentence and inserting the following: ``The president shall be the 
chief executive officer of the bank and shall be appointed by the Class 
B and Class C directors of the bank, with the approval of the Board of 
Governors of the Federal Reserve System, for a term of 5 years; and all 
other executive officers and all employees of the bank shall be directly 
responsible to the president.''.
SEC. 1108. FEDERAL RESERVE ACT AMENDMENTS ON SUPERVISION AND 
                          REGULATION POLICY.

    (a) Establishment of the Position of Vice Chairman for 
Supervision.--
            (1) Position established.--The second undesignated paragraph 
        of section 10 of the Federal Reserve Act (12 U.S.C. 242) 
        (relating to the Chairman and Vice Chairman of the Board) is 
        amended by striking the third sentence and inserting the 
        following: ``Of the persons thus appointed, 1 shall be 
        designated by the President, by and with the advice and consent 
        of the Senate, to serve as Chairman of the Board for a term of 4 
        years, and 2 shall be designated by the President, by and with 
        the advice and consent of the Senate, to serve as Vice Chairmen 
        of the Board, each for a term of 4 years, 1 of whom shall serve 
        in the absence of the Chairman, as provided in the fourth 
        undesignated paragraph of this section, and 1 of whom shall be 
        designated Vice Chairman for Supervision. The Vice Chairman for 
        Supervision shall develop policy recommendations for the Board 
        regarding supervision and regulation of depository institution 
        holding companies and other financial firms supervised by the 
        Board, and shall oversee the supervision and regulation of such 
        firms.''.
            (2) Effective <<NOTE: 12 USC 242 note.>> date.--The 
        amendment made by subsection (a) takes effect on the date of 
        enactment of this title and applies to individuals who are 
        designated by the President on or after that date to serve as 
        Vice Chairman of Supervision.

    (b) Appearances Before Congress.--Section 10 of the Federal Reserve 
Act (12 U.S.C. 241 et seq.) is amended by adding at the end the 
following:
            ``(12) Appearances <<NOTE: 12 USC 247b.>>  before 
        congress.--The Vice Chairman for Supervision shall appear before 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives and at semi-annual hearings regarding the 
        efforts, activities, objectives, and plans of the Board with 
        respect to the conduct of supervision and regulation of 
        depository institution holding companies and other financial 
        firms supervised by the Board.''.

    (c) Board Responsibility To Set Supervision and Regulatory Policy.--
Section 11 of the Federal Reserve Act (12 U.S.C. 248) (relating to 
enumerated powers of the Board) is amended by adding at the end of 
subsection (k) (relating to delegation)

[[Page 124 STAT. 2127]]

the following: ``The Board of Governors may not delegate to a Federal 
reserve bank its functions for the establishment of policies for the 
supervision and regulation of depository institution holding companies 
and other financial firms supervised by the Board of Governors.''.
    (d) Exercise <<NOTE: 12 USC 5614.>> of Federal Reserve Authority.--
            (1) No decisions by federal reserve bank presidents.--No 
        provision of title I relating to the authority of the Board of 
        Governors shall be construed as conferring any decision-making 
        authority on presidents of Federal reserve banks.
            (2) Voting decisions by board.--The Board of Governors shall 
        not delegate the authority to make any voting decision that the 
        Board of Governors is authorized or required to make under title 
        I of this Act in contravention of section 11(k) of the Federal 
        Reserve Act.
SEC. 1109. GAO AUDIT OF THE FEDERAL RESERVE FACILITIES; 
                          PUBLICATION OF BOARD ACTIONS.

    (a) GAO Audit.--
            (1) In general.--Notwithstanding <<NOTE: Time period.>>  
        section 714(b) of title 31, United States Code, or any other 
        provision of law, the Comptroller General of the United States 
        (in this subsection referred to as the ``Comptroller General'') 
        shall conduct a one-time audit of all loans and other financial 
        assistance provided during the period beginning on December 1, 
        2007 and ending on the date of enactment of this Act by the 
        Board of Governors or a Federal reserve bank under the Asset-
        Backed Commercial Paper Money Market Mutual Fund Liquidity 
        Facility, the Term Asset-Backed Securities Loan Facility, the 
        Primary Dealer Credit Facility, the Commercial Paper Funding 
        Facility, the Term Securities Lending Facility, the Term Auction 
        Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the 
        agency Mortgage-Backed Securities program, foreign currency 
        liquidity swap lines, and any other program created as a result 
        of section 13(3) of the Federal Reserve Act (as so designated by 
        this title).
            (2) Assessments.--In conducting the audit under paragraph 
        (1), the Comptroller General shall assess--
                    (A) the operational integrity, accounting, financial 
                reporting, and internal controls of the credit facility;
                    (B) the effectiveness of the security and collateral 
                policies established for the facility in mitigating risk 
                to the relevant Federal reserve bank and taxpayers;
                    (C) whether the credit facility inappropriately 
                favors one or more specific participants over other 
                institutions eligible to utilize the facility;
                    (D) the policies governing the use, selection, or 
                payment of third-party contractors by or for any credit 
                facility; and
                    (E) whether there were conflicts of interest with 
                respect to the manner in which such facility was 
                established or operated.
            (3) Timing.--The audit required by this subsection shall be 
        commenced not later than 30 days after the date of enactment of 
        this Act, and shall be completed not later than 12 months after 
        that date of enactment.

[[Page 124 STAT. 2128]]

            (4) Report required.--The Comptroller General shall submit a 
        report on the audit conducted under paragraph (1) to the 
        Congress not later than 12 months after the date of enactment of 
        this Act, and such report shall be made available to--
                    (A) the Speaker of the House of Representatives;
                    (B) the majority and minority leaders of the House 
                of Representatives;
                    (C) the majority and minority leaders of the Senate;
                    (D) the Chairman and Ranking Member of the Committee 
                on Banking, Housing, and Urban Affairs of the Senate and 
                of the Committee on Financial Services of the House of 
                Representatives; and
                    (E) any member of Congress who requests it.

    (b) Audit of Federal Reserve Bank Governance.--
            (1) Audit.--
                    (A) In general.--Not <<NOTE: Deadline.>>  later than 
                1 year after the date of enactment of this Act, the 
                Comptroller General shall complete an audit of the 
                governance of the Federal reserve bank system.
                    (B) Required examinations.--The audit required under 
                subparagraph (A) shall--
                          (i) examine the extent to which the current 
                      system of appointing Federal reserve bank 
                      directors effectively represents ``the public, 
                      without discrimination on the basis of race, 
                      creed, color, sex or national origin, and with due 
                      but not exclusive consideration to the interests 
                      of agriculture, commerce, industry, services, 
                      labor, and consumers'' in the selection of bank 
                      directors, as such requirement is set forth under 
                      section 4 of the Federal Reserve Act;
                          (ii) examine whether there are actual or 
                      potential conflicts of interest created when the 
                      directors of Federal reserve banks, which execute 
                      the supervisory functions of the Board of 
                      Governors of the Federal Reserve System, are 
                      elected by member banks;
                          (iii) examine the establishment and operations 
                      of each facility described in subsection (a)(1) 
                      and each Federal reserve bank involved in the 
                      establishment and operations thereof; and
                          (iv) identify changes to selection procedures 
                      for Federal reserve bank directors, or to other 
                      aspects of Federal reserve bank governance, that 
                      would--
                                    (I) improve how the public is 
                                represented;
                                    (II) eliminate actual or potential 
                                conflicts of interest in bank 
                                supervision;
                                    (III) increase the availability of 
                                information useful for the formation and 
                                execution of monetary policy; or
                                    (IV) in other ways increase the 
                                effectiveness or efficiency of reserve 
                                banks.
            (2) Report required.--A report on the audit conducted under 
        paragraph (1) shall be submitted by the Comptroller General to 
        the Congress before the end of the 90-day period beginning on 
        the date on which such audit is completed, and such report shall 
        be made available to--
                    (A) the Speaker of the House of Representatives;

[[Page 124 STAT. 2129]]

                    (B) the majority and minority leaders of the House 
                of Representatives;
                    (C) the majority and minority leaders of the Senate;
                    (D) the Chairman and Ranking Member of the Committee 
                on Banking, Housing, and Urban Affairs of the Senate and 
                of the Committee on Financial Services of the House of 
                Representatives; and
                    (E) any member of Congress who requests it.

    (c) Publication of Board <<NOTE: Web posting. Deadline.>> Actions.--
Notwithstanding any other provision of law, the Board of Governors shall 
publish on its website, not later than December 1, 2010, with respect to 
all loans and other financial assistance provided during the period 
beginning on December 1, 2007 and ending on the date of enactment of 
this Act under the Asset-Backed Commercial Paper Money Market Mutual 
Fund Liquidity Facility, the Term Asset-Backed Securities Loan Facility, 
the Primary Dealer Credit Facility, the Commercial Paper Funding 
Facility, the Term Securities Lending Facility, the Term Auction 
Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency 
Mortgage-Backed Securities program, foreign currency liquidity swap 
lines, and any other program created as a result of section 13(3) of the 
Federal Reserve Act (as so designated by this title)--
            (1) the identity of each business, individual, entity, or 
        foreign central bank to which the Board of Governors or a 
        Federal reserve bank has provided such assistance;
            (2) the type of financial assistance provided to that 
        business, individual, entity, or foreign central bank;
            (3) the value or amount of that financial assistance;
            (4) the date on which the financial assistance was provided;
            (5) the specific terms of any repayment expected, including 
        the repayment time period, interest charges, collateral, 
        limitations on executive compensation or dividends, and other 
        material terms; and
            (6) the specific rationale for each such facility or 
        program.

 TITLE XII--IMPROVING <<NOTE: Improving Access to Mainstream Financial 
Institutions Act of 2010.>>  ACCESS TO MAINSTREAM FINANCIAL INSTITUTIONS
SEC. <<NOTE: 12 USC 5301 note.>> 1201. SHORT TITLE.

    This title may be cited as the ``Improving Access to Mainstream 
Financial Institutions Act of 2010''.
SEC. <<NOTE: 12 USC 5621.>> 1202. PURPOSE.

    The purpose of this title is to encourage initiatives for financial 
products and services that are appropriate and accessible for millions 
of Americans who are not fully incorporated into the financial 
mainstream.
SEC. <<NOTE: 12 USC 5622.>> 1203. DEFINITIONS.

    In this title, the following definitions shall apply:
            (1) Account.--The term ``account'' means an agreement 
        between an individual and an eligible entity under which the 
        individual obtains from or through the entity 1 or more banking 
        products and services, and includes a deposit account, a savings

[[Page 124 STAT. 2130]]

        account (including a money market savings account), an account 
        for a closed-end loan, and other products or services, as the 
        Secretary deems appropriate.
            (2) Community development financial institution.--The term 
        ``community development financial institution'' has the same 
        meaning as in section 103(5) of the Community Development 
        Banking and Financial Institutions Act of 1994 (12 U.S.C. 
        4702(5)).
            (3) Eligible entity.--The term ``eligible entity'' means--
                    (A) an organization described in section 501(c)(3) 
                of the Internal Revenue Code of 1986, and exempt from 
                tax under section 501(a) of such Code;
                    (B) a federally insured depository institution;
                    (C) a community development financial institution;
                    (D) a State, local, or tribal government entity; or
                    (E) a partnership or other joint venture comprised 
                of 1 or more of the entities described in subparagraphs 
                (A) through (D), in accordance with regulations 
                prescribed by the Secretary under this title.
            (4) Federally insured depository institution.--The term 
        ``federally insured depository institution'' means any insured 
        depository institution (as that term is defined in section 3 of 
        the Federal Deposit Insurance Act (12 U.S.C. 1813)) and any 
        insured credit union (as that term is defined in section 101 of 
        the Federal Credit Union Act (12 U.S.C. 1752)).
SEC. 1204. <<NOTE: 12 USC 5623.>> EXPANDED ACCESS TO MAINSTREAM 
                          FINANCIAL INSTITUTIONS.

    (a) In <<NOTE: Grants.>> General.--The Secretary is authorized to 
establish a multiyear program of grants, cooperative agreements, 
financial agency agreements, and similar contracts or undertakings to 
promote initiatives designed--
            (1) to enable low- and moderate-income individuals to 
        establish one or more accounts in a federally insured depository 
        institution that are appropriate to meet the financial needs of 
        such individuals; and
            (2) to improve access to the provision of accounts, on 
        reasonable terms, for low- and moderate-income individuals.

    (b) Program Eligibility and Activities.--
            (1) In general.--The Secretary shall restrict participation 
        in any program established under subsection (a) to an eligible 
        entity. Subject to regulations prescribed by the Secretary under 
        this title, 1 or more eligible entities may participate in 1 or 
        several programs established under subsection (a).
            (2) Account activities.--Subject to regulations prescribed 
        by the Secretary, an eligible entity may, in participating in a 
        program established under subsection (a), offer or provide to 
        low- and moderate-income individuals products and services 
        relating to accounts, including--
                    (A) small-dollar value loans; and
                    (B) financial education and counseling relating to 
                conducting transactions in and managing accounts.
SEC. 1205. <<NOTE: 12 USC 5624.>> LOW-COST ALTERNATIVES TO SMALL 
                          DOLLAR LOANS.

    (a) Grants Authorized.--The Secretary is authorized to establish 
multiyear demonstration programs by means of grants, cooperative 
agreements, financial agency agreements, and similar contracts or 
undertakings, with eligible entities to provide low-cost, small

[[Page 124 STAT. 2131]]

loans to consumers that will provide alternatives to more costly small 
dollar loans.
    (b) Terms and Conditions.--
            (1) In general.--Loans under this section shall be made on 
        terms and conditions, and pursuant to lending practices, that 
        are reasonable for consumers.
            (2) Financial literacy and education opportunities.--
                    (A) In general.--Each <<NOTE: Grants.>>  eligible 
                entity awarded a grant under this section shall promote 
                and take appropriate steps to ensure the provision of 
                financial literacy and education opportunities, such as 
                relevant counseling services, educational courses, or 
                wealth building programs, to each consumer provided with 
                a loan pursuant to this section.
                    (B) Authority to expand access.--As part of the 
                grants, agreements, and undertakings established under 
                this section, the Secretary may implement reasonable 
                measures or programs designed to expand access to 
                financial literacy and education opportunities, 
                including relevant counseling services, educational 
                courses, or wealth building programs to be provided to 
                individuals who obtain loans from eligible entities 
                under this section.
SEC. 1206. GRANTS TO ESTABLISH LOAN-LOSS RESERVE FUNDS.

    The Community Development Banking and Financial Institutions Act of 
1994 (12 U.S.C. 4701 et seq.) is amended by adding at the end the 
following:
``SEC. 122. GRANTS <<NOTE: 12 USC 4719.>>  TO ESTABLISH LOAN-LOSS 
                        RESERVE FUNDS.

    ``(a) Purposes.--The purposes of this section are--
            ``(1) to make financial assistance available from the Fund 
        in order to help community development financial institutions 
        defray the costs of operating small dollar loan programs, by 
        providing the amounts necessary for such institutions to 
        establish their own loan loss reserve funds to mitigate some of 
        the losses on such small dollar loan programs; and
            ``(2) to encourage community development financial 
        institutions to establish and maintain small dollar loan 
        programs that would help give consumers access to mainstream 
        financial institutions and combat high cost small dollar 
        lending.

    ``(b) Grants.--
            ``(1) Loan-loss reserve fund grants.--The Fund shall make 
        grants to community development financial institutions or to any 
        partnership between such community development financial 
        institutions and any other federally insured depository 
        institution with a primary mission to serve targeted investment 
        areas, as such areas are defined under section 103(16), to 
        enable such institutions or any partnership of such institutions 
        to establish a loan-loss reserve fund in order to defray the 
        costs of a small dollar loan program established or maintained 
        by such institution.
            ``(2) Matching requirement.--A community development 
        financial institution or any partnership of institutions 
        established pursuant to paragraph (1) shall provide non-Federal 
        matching funds in an amount equal to 50 percent of the amount of 
        any grant received under this section.
            ``(3) Use of funds.--Any grant amounts received by a 
        community development financial institution or any partnership 
        between or among such institutions under paragraph (1)--

[[Page 124 STAT. 2132]]

                    ``(A) may not be used by such institution to provide 
                direct loans to consumers;
                    ``(B) may be used by such institution to help 
                recapture a portion or all of a defaulted loan made 
                under the small dollar loan program of such institution; 
                and
                    ``(C) may be used to designate and utilize a fiscal 
                agent for services normally provided by such an agent.
            ``(4) Technical assistance grants.--The Fund shall make 
        technical assistance grants to community development financial 
        institutions or any partnership between or among such 
        institutions to support and maintain a small dollar loan 
        program. Any grant amounts received under this paragraph may be 
        used for technology, staff support, and other costs associated 
        with establishing a small dollar loan program.

    ``(c) Definitions.--For purposes of this section--
            ``(1) the term `consumer reporting agency that compiles and 
        maintains files on consumers on a nationwide basis' has the same 
        meaning given such term in section 603(p) of the Fair Credit 
        Reporting Act (15 U.S.C. 1681a(p)); and
            ``(2) the term `small dollar loan program' means a loan 
        program wherein a community development financial institution or 
        any partnership between or among such institutions offers loans 
        to consumers that--
                    ``(A) are made in amounts not exceeding $2,500;
                    ``(B) must be repaid in installments;
                    ``(C) have no pre-payment penalty;
                    ``(D) the institution has to report payments 
                regarding the loan to at least 1 of the consumer 
                reporting agencies that compiles and maintains files on 
                consumers on a nationwide basis; and
                    ``(E) meet any other affordability requirements as 
                may be established by the Administrator.''.
SEC. 1207. <<NOTE: Application. 12 USC 5625.>> PROCEDURAL 
                          PROVISIONS.

    An eligible entity desiring to participate in a program or obtain a 
grant under this title shall submit an application to the Secretary, in 
such form and containing such information as the Secretary may require.
SEC. 1208. <<NOTE: 12 USC 5626.>> AUTHORIZATION OF APPROPRIATIONS.

    (a) Authorization to the Secretary.--There are authorized to be 
appropriated to the Secretary, such sums as are necessary to both 
administer and fund the programs and projects authorized by this title, 
to remain available until expended.
    (b) Authorization to the Fund.--There is authorized to be 
appropriated to the Fund for each fiscal year beginning in fiscal year 
2010, an amount equal to the amount of the administrative costs of the 
Fund for the operation of the grant program established under this 
title.
SEC. <<NOTE: 12 USC 5627.>> 1209. REGULATIONS.

    (a) In General.--The Secretary is authorized to promulgate 
regulations to implement and administer the grant programs and 
undertakings authorized by this title.
    (b) Regulatory Authority.--Regulations prescribed under this section 
may contain such classifications, differentiations, or other provisions, 
and may provide for such adjustments and exceptions for any class of 
grant programs, undertakings, or eligible

[[Page 124 STAT. 2133]]

entities, as, in the judgment of the Secretary, are necessary or proper 
to effectuate the purposes of this title, to prevent circumvention or 
evasion of this title, or to facilitate compliance with this title.
SEC. 1210. <<NOTE: 12 USC 5628.>> EVALUATION AND REPORTS TO 
                          CONGRESS.

    For each fiscal year in which a program or project is carried out 
under this title, the Secretary shall submit a report to the Committee 
on Banking, Housing, and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representatives containing a 
description of the activities funded, amounts distributed, and 
measurable results, as appropriate and available.

TITLE XIII--PAY <<NOTE: Pay It Back Act.>>  IT BACK ACT
SEC. 1301. <<NOTE: 12 USC 5201 note.>> SHORT TITLE.

    This title may be cited as the ``Pay It Back Act''.
SEC. 1302. AMENDMENT TO REDUCE TARP AUTHORIZATION.

    Section 115(a) of the Emergency Economic Stabilization Act of 2008 
(12 U.S.C. 5225(a)) is amended--
            (1) in paragraph (3)--
                    (A) by striking ``, $700,000,000,000, as such amount 
                is reduced by $1,259,000,000, as such amount is reduced 
                by $1,244,000,000'' and inserting ``$475,000,000,000''; 
                and
                    (B) by striking ``outstanding at any one time''; and
            (2) by adding at the end the following:
            ``(4) For purposes of this subsection, the amount of 
        authority considered to be exercised by the Secretary shall not 
        be reduced by--
                    ``(A) any amounts received by the Secretary before, 
                on, or after the date of enactment of the Pay It Back 
                Act from repayment of the principal of financial 
                assistance by an entity that has received financial 
                assistance under the TARP or any other program enacted 
                by the Secretary under the authorities granted to the 
                Secretary under this Act;
                    ``(B) any amounts committed for any guarantees 
                pursuant to the TARP that became or become uncommitted; 
                or
                    ``(C) any losses realized by the Secretary.
            ``(5) No authority under this Act may be used to incur any 
        obligation for a program or initiative that was not initiated 
        prior to June 25, 2010.''.
SEC. 1303. REPORT.

    Section 106 of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5216) is amended by inserting at the end the following:
    ``(f) Report.--The Secretary of the Treasury shall report to 
Congress every 6 months on amounts received and transferred to the 
general fund under subsection (d).''.

[[Page 124 STAT. 2134]]

SEC. 1304. AMENDMENTS TO HOUSING AND ECONOMIC RECOVERY ACT OF 
                          2008.

    (a) Sale of Fannie Mae Obligations and Securities by the Treasury; 
Deficit Reduction.--Section 304(g)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1719(g)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall deposit in the General Fund of the 
                Treasury any amounts received by the Secretary from the 
                sale of any obligation acquired by the Secretary under 
                this subsection, where such amounts shall be--
                          ``(i) dedicated for the sole purpose of 
                      deficit reduction; and
                          ``(ii) prohibited from use as an offset for 
                      other spending increases or revenue reductions.''.

    (b) Sale of Freddie Mac Obligations and Securities by the Treasury; 
Deficit Reduction.--Section 306(l)(2) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1455(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall deposit in the General Fund of the 
                Treasury any amounts received by the Secretary from the 
                sale of any obligation acquired by the Secretary under 
                this subsection, where such amounts shall be--
                          ``(i) dedicated for the sole purpose of 
                      deficit reduction; and
                          ``(ii) prohibited from use as an offset for 
                      other spending increases or revenue reductions.''.

    (c) Sale of Federal Home Loan Banks Obligations by the Treasury; 
Deficit Reduction.--Section 11(l)(2) of the Federal Home Loan Bank Act 
(12 U.S.C. 1431(l)(2)) is amended--
            (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) Deficit reduction.--The Secretary of the 
                Treasury shall deposit in the General Fund of the 
                Treasury any amounts received by the Secretary from the 
                sale of any obligation acquired by the Secretary under 
                this subsection, where such amounts shall be--
                          ``(i) dedicated for the sole purpose of 
                      deficit reduction; and
                          ``(ii) prohibited from use as an offset for 
                      other spending increases or revenue reductions.''.

    (d) Repayment <<NOTE: 12 USC 1455 note.>> of Fees.--Any periodic 
commitment fee or any other fee or assessment paid by the Federal 
National Mortgage Association or Federal Home Loan Mortgage Corporation 
to the Secretary of the Treasury as a result of any preferred stock 
purchase agreement, mortgage-backed security purchase program, or any 
other program or activity authorized or carried out pursuant to the 
authorities granted to the Secretary of the Treasury under section 1117 
of the Housing and Economic Recovery Act of 2008

[[Page 124 STAT. 2135]]

(Public Law 110-289; 122 Stat. 2683), including any fee agreed to by 
contract between the Secretary and the Association or Corporation, shall 
be deposited in the General Fund of the Treasury where such amounts 
shall be--
            (1) dedicated for the sole purpose of deficit reduction; and
            (2) prohibited from use as an offset for other spending 
        increases or revenue reductions.
SEC. 1305. FEDERAL HOUSING FINANCE AGENCY REPORT.

    The Director of the Federal Housing Finance Agency shall submit to 
Congress a report on the plans of the Agency to continue to support and 
maintain the Nation's vital housing industry, while at the same time 
guaranteeing that the American taxpayer will not suffer unnecessary 
losses.
SEC. 1306. REPAYMENT OF UNOBLIGATED ARRA FUNDS.

    (a) Rejection of ARRA Funds by State.--Section 1607 of the American 
Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 305) 
is amended by adding at the end the following:
    ``(d) Statewide Rejection of Funds.--If funds provided to any State 
in any division of this Act are not accepted for use by the Governor of 
the State pursuant to subsection (a) or by the State legislature 
pursuant to subsection (b), then all such funds shall be--
            ``(1) <<NOTE: Rescission.>> rescinded; and
            ``(2) deposited in the General Fund of the Treasury where 
        such amounts shall be--
                    ``(A) dedicated for the sole purpose of deficit 
                reduction; and
                    ``(B) prohibited from use as an offset for other 
                spending increases or revenue reductions.''.

    (b) Withdrawal or Recapture of Unobligated Funds.--Title XVI of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 
Stat. 302) is amended by adding at the end the following:
``SEC. 1613. WITHDRAWAL OR RECAPTURE OF UNOBLIGATED FUNDS.

    ``Notwithstanding any other provision of this Act, if the head of 
any executive agency withdraws or recaptures for any reason funds 
appropriated or otherwise made available under this division, and such 
funds have not been obligated by a State to a local government or for a 
specific project, such recaptured funds shall be--
            ``(1) rescinded; and
            ``(2) deposited in the General Fund of the Treasury where 
        such amounts shall be--
                    ``(A) dedicated for the sole purpose of deficit 
                reduction; and
                    ``(B) prohibited from use as an offset for other 
                spending increases or revenue reductions.''.

    (c) Return of Unobligated Funds by End of 2012.--Section 1603 of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 
Stat. 302) is amended by--
            (1) striking ``All funds'' and inserting ``(a) In General.--
        All funds''; and
            (2) adding at the end the following:

    ``(b) Repayment of Unobligated Funds.--Any discretionary 
appropriations made available in this division that have not been

[[Page 124 STAT. 2136]]

obligated as of December 31, 2012, are hereby rescinded, and such 
amounts shall be deposited in the General Fund of the Treasury where 
such amounts shall be--
            ``(1) dedicated for the sole purpose of deficit reduction; 
        and
            ``(2) prohibited from use as an offset for other spending 
        increases or revenue reductions.

    ``(c) Presidential Waiver Authority.--
            ``(1) In general.--The President may waive the requirements 
        under subsection (b), if the President determines that it is not 
        in the best interest of the Nation to rescind a specific 
        unobligated amount after December 31, 2012.
            ``(2) Requests.--The head of an executive agency may also 
        apply to the President for a waiver from the requirements under 
        subsection (b).''.

     TITLE XIV-- <<NOTE: Mortgage Reform and Anti-Predatory Lending 
Act.>> MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT
SEC. 1400. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.

    (a) Short <<NOTE: 15 USC 1601 note.>> Title.--This title may be 
cited as the ``Mortgage Reform and Anti-Predatory Lending Act''.

    (b) Designation <<NOTE: 12 USC 5481 note.>>  as Enumerated Consumer 
Law Under the Purview of the Bureau of Consumer Financial Protection.--
Subtitles A, B, C, and E and sections 1471, 1472, 1475, and 1476, and 
the amendments made by such subtitles and sections, shall be enumerated 
consumer laws, as defined in section 1002, and come under the purview of 
the Bureau of Consumer Financial Protection for purposes of title X, 
including the transfer of functions and personnel under subtitle F of 
title X and the savings provisions of such subtitle.

    (c) Regulations; <<NOTE: 15 USC 1601 note.>>  Effective Date.--
            (1) Regulations.--The regulations required to be prescribed 
        under this title or the amendments made by this title shall--
                    (A) be prescribed in final form before the end of 
                the 18-month period beginning on the designated transfer 
                date; and
                    (B) take effect not later than 12 months after the 
                date of issuance of the regulations in final form.
            (2) Effective date established by rule.--Except as provided 
        in paragraph (3), a section, or provision thereof, of this title 
        shall take effect on the date on which the final regulations 
        implementing such section, or provision, take effect.
            (3) Effective date.--A section of this title for which 
        regulations have not been issued on the date that is 18 months 
        after the designated transfer date shall take effect on such 
        date.

[[Page 124 STAT. 2137]]

       Subtitle A--Residential Mortgage Loan Origination Standards

SEC. 1401. DEFINITIONS.

    Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended 
by adding at the end the following new subsection:
    ``(cc) Definitions Relating to Mortgage Origination and Residential 
Mortgage Loans.--
            ``(1) Commission.--Unless otherwise specified, the term 
        `Commission' means the Federal Trade Commission.
            ``(2) Mortgage originator.--The term `mortgage originator'--
                    ``(A) means any person who, for direct or indirect 
                compensation or gain, or in the expectation of direct or 
                indirect compensation or gain--
                          ``(i) takes a residential mortgage loan 
                      application;
                          ``(ii) assists a consumer in obtaining or 
                      applying to obtain a residential mortgage loan; or
                          ``(iii) offers or negotiates terms of a 
                      residential mortgage loan;
                    ``(B) includes any person who represents to the 
                public, through advertising or other means of 
                communicating or providing information (including the 
                use of business cards, stationery, brochures, signs, 
                rate lists, or other promotional items), that such 
                person can or will provide any of the services or 
                perform any of the activities described in subparagraph 
                (A);
                    ``(C) does not include any person who is (i) not 
                otherwise described in subparagraph (A) or (B) and who 
                performs purely administrative or clerical tasks on 
                behalf of a person who is described in any such 
                subparagraph, or (ii) an employee of a retailer of 
                manufactured homes who is not described in clause (i) or 
                (iii) of subparagraph (A) and who does not advise a 
                consumer on loan terms (including rates, fees, and other 
                costs);
                    ``(D) does not include a person or entity that only 
                performs real estate brokerage activities and is 
                licensed or registered in accordance with applicable 
                State law, unless such person or entity is compensated 
                by a lender, a mortgage broker, or other mortgage 
                originator or by any agent of such lender, mortgage 
                broker, or other mortgage originator;
                    ``(E) does not include, with respect to a 
                residential mortgage loan, a person, estate, or trust 
                that provides mortgage financing for the sale of 3 
                properties in any 12-month period to purchasers of such 
                properties, each of which is owned by such person, 
                estate, or trust and serves as security for the loan, 
                provided that such loan--
                          ``(i) is not made by a person, estate, or 
                      trust that has constructed, or acted as a 
                      contractor for the construction of, a residence on 
                      the property in the ordinary course of business of 
                      such person, estate, or trust;
                          ``(ii) is fully amortizing;

[[Page 124 STAT. 2138]]

                          ``(iii) is with respect to a sale for which 
                      the seller determines in good faith and documents 
                      that the buyer has a reasonable ability to repay 
                      the loan;
                          ``(iv) has a fixed rate or an adjustable rate 
                      that is adjustable after 5 or more years, subject 
                      to reasonable annual and lifetime limitations on 
                      interest rate increases; and
                          ``(v) meets any other criteria the Board may 
                      prescribe;
                    ``(F) does not include the creditor (except the 
                creditor in a table-funded transaction) under paragraph 
                (1), (2), or (4) of section 129B(c); and
                    ``(G) does not include a servicer or servicer 
                employees, agents and contractors, including but not 
                limited to those who offer or negotiate terms of a 
                residential mortgage loan for purposes of renegotiating, 
                modifying, replacing and subordinating principal of 
                existing mortgages where borrowers are behind in their 
                payments, in default or have a reasonable likelihood of 
                being in default or falling behind.
            ``(3) Nationwide mortgage licensing system and registry.--
        The term `Nationwide Mortgage Licensing System and Registry' has 
        the same meaning as in the Secure and Fair Enforcement for 
        Mortgage Licensing Act of 2008.
            ``(4) Other definitions relating to mortgage originator.--
        For purposes of this subsection, a person `assists a consumer in 
        obtaining or applying to obtain a residential mortgage loan' by, 
        among other things, advising on residential mortgage loan terms 
        (including rates, fees, and other costs), preparing residential 
        mortgage loan packages, or collecting information on behalf of 
        the consumer with regard to a residential mortgage loan.
            ``(5) Residential mortgage loan.--The term `residential 
        mortgage loan' means any consumer credit transaction that is 
        secured by a mortgage, deed of trust, or other equivalent 
        consensual security interest on a dwelling or on residential 
        real property that includes a dwelling, other than a consumer 
        credit transaction under an open end credit plan or, for 
        purposes of sections 129B and 129C and section 128(a) (16), 
        (17), (18), and (19), and sections 128(f) and 130(k), and any 
        regulations promulgated thereunder, an extension of credit 
        relating to a plan described in section 101(53D) of title 11, 
        United States Code.
            ``(6) Secretary.--The term `Secretary', when used in 
        connection with any transaction or person involved with a 
        residential mortgage loan, means the Secretary of Housing and 
        Urban Development.
            ``(7) Servicer.--The term `servicer' has the same meaning as 
        in section 6(i)(2) of the Real Estate Settlement Procedures Act 
        of 1974 (12 U.S.C. 2605(i)(2)).''.
SEC. 1402. RESIDENTIAL MORTGAGE LOAN ORIGINATION.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended--
            (1) by redesignating the 2nd of the 2 sections designated as 
        section 129 (15 U.S.C. 1639a) (relating to duty of servicers of 
        residential mortgages) as section 129A; and

[[Page 124 STAT. 2139]]

            (2) by inserting after section 129A (as so redesignated) the 
        following new section:
``Sec. 129B. <<NOTE: 15 USC 1639b.>> Residential mortgage loan 
                  origination

    ``(a) Finding and Purpose.--
            ``(1) Finding.--The Congress finds that economic 
        stabilization would be enhanced by the protection, limitation, 
        and regulation of the terms of residential mortgage credit and 
        the practices related to such credit, while ensuring that 
        responsible, affordable mortgage credit remains available to 
        consumers.
            ``(2) Purpose.--It is the purpose of this section and 
        section 129C to assure that consumers are offered and receive 
        residential mortgage loans on terms that reasonably reflect 
        their ability to repay the loans and that are understandable and 
        not unfair, deceptive or abusive.

    ``(b) Duty of Care.--
            ``(1) Standard.--Subject to regulations prescribed under 
        this subsection, each mortgage originator shall, in addition to 
        the duties imposed by otherwise applicable provisions of State 
        or Federal law--
                    ``(A) be qualified and, when required, registered 
                and licensed as a mortgage originator in accordance with 
                applicable State or Federal law, including the Secure 
                and Fair Enforcement for Mortgage Licensing Act of 2008; 
                and
                    ``(B) include on all loan documents any unique 
                identifier of the mortgage originator provided by the 
                Nationwide Mortgage Licensing System and Registry.
            ``(2) Compliance <<NOTE: Regulations.>>  procedures 
        required.--The Board shall prescribe regulations requiring 
        depository institutions to establish and maintain procedures 
        reasonably designed to assure and monitor the compliance of such 
        depository institutions, the subsidiaries of such institutions, 
        and the employees of such institutions or subsidiaries with the 
        requirements of this section and the registration procedures 
        established under section 1507 of the Secure and Fair 
        Enforcement for Mortgage Licensing Act of 2008.''.

    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 129 the following new items:

``129A. Fiduciary duty of servicers of pooled residential mortgages.
``129B. Residential mortgage loan origination.''.

SEC. 1403. PROHIBITION ON STEERING INCENTIVES.

    Section 129B of the Truth in Lending Act (as added by section 
1402(a)) is amended by inserting after subsection (b) the following new 
subsection:
    ``(c) Prohibition on Steering Incentives.--
            ``(1) In general.--For any residential mortgage loan, no 
        mortgage originator shall receive from any person and no person 
        shall pay to a mortgage originator, directly or indirectly, 
        compensation that varies based on the terms of the loan (other 
        than the amount of the principal).
            ``(2) Restructuring of financing origination fee.--
                    ``(A) In general.--For any mortgage loan, a mortgage 
                originator may not receive from any person other than 
                the consumer and no person, other than the consumer, who 
                knows or has reason to know that a consumer has

[[Page 124 STAT. 2140]]

                directly compensated or will directly compensate a 
                mortgage originator may pay a mortgage originator any 
                origination fee or charge except bona fide third party 
                charges not retained by the creditor, mortgage 
                originator, or an affiliate of the creditor or mortgage 
                originator .
                    ``(B) Exception.--Notwithstanding subparagraph (A), 
                a mortgage originator may receive from a person other 
                than the consumer an origination fee or charge, and a 
                person other than the consumer may pay a mortgage 
                originator an origination fee or charge, if--
                          ``(i) the mortgage originator does not receive 
                      any compensation directly from the consumer; and
                          ``(ii) <<NOTE: Waiver authority.>>  the 
                      consumer does not make an upfront payment of 
                      discount points, origination points, or fees, 
                      however denominated (other than bona fide third 
                      party charges not retained by the mortgage 
                      originator, creditor, or an affiliate of the 
                      creditor or originator), except that the Board 
                      may, by rule, waive or provide exemptions to this 
                      clause if the Board determines that such waiver or 
                      exemption is in the interest of consumers and in 
                      the public interest.
            ``(3) Regulations.--The Board shall prescribe regulations to 
        prohibit--
                    ``(A) mortgage originators from steering any 
                consumer to a residential mortgage loan that--
                          ``(i) the consumer lacks a reasonable ability 
                      to repay (in accordance with regulations 
                      prescribed under section 129C(a)); or
                          ``(ii) has predatory characteristics or 
                      effects (such as equity stripping, excessive fees, 
                      or abusive terms);
                    ``(B) mortgage originators from steering any 
                consumer from a residential mortgage loan for which the 
                consumer is qualified that is a qualified mortgage (as 
                defined in section 129C(b)(2)) to a residential mortgage 
                loan that is not a qualified mortgage;
                    ``(C) abusive or unfair lending practices that 
                promote disparities among consumers of equal credit 
                worthiness but of different race, ethnicity, gender, or 
                age; and
                    ``(D) mortgage originators from--
                          ``(i) mischaracterizing the credit history of 
                      a consumer or the residential mortgage loans 
                      available to a consumer;
                          ``(ii) mischaracterizing or suborning the 
                      mischaracterization of the appraised value of the 
                      property securing the extension of credit; or
                          ``(iii) if unable to suggest, offer, or 
                      recommend to a consumer a loan that is not more 
                      expensive than a loan for which the consumer 
                      qualifies, discouraging a consumer from seeking a 
                      residential mortgage loan secured by a consumer's 
                      principal dwelling from another mortgage 
                      originator.
            ``(4) Rules of construction.--No provision of this 
        subsection shall be construed as--
                    ``(A) permitting any yield spread premium or other 
                similar compensation that would, for any residential 
                mortgage loan, permit the total amount of direct and 
                indirect compensation from all sources permitted to a 
                mortgage

[[Page 124 STAT. 2141]]

                originator to vary based on the terms of the loan (other 
                than the amount of the principal);
                    ``(B) limiting or affecting the amount of 
                compensation received by a creditor upon the sale of a 
                consummated loan to a subsequent purchaser;
                    ``(C) restricting a consumer's ability to finance, 
                at the option of the consumer, including through 
                principal or rate, any origination fees or costs 
                permitted under this subsection, or the mortgage 
                originator's right to receive such fees or costs 
                (including compensation) from any person, subject to 
                paragraph (2)(B), so long as such fees or costs do not 
                vary based on the terms of the loan (other than the 
                amount of the principal) or the consumer's decision 
                about whether to finance such fees or costs; or
                    ``(D) prohibiting incentive payments to a mortgage 
                originator based on the number of residential mortgage 
                loans originated within a specified period of time.''.
SEC. 1404. LIABILITY.

    Section 129B of the Truth in Lending Act is amended by inserting 
after subsection (c) (as added by section 1403) the following new 
subsection:
    ``(d) Liability for Violations.--
            ``(1) In general.-- <<NOTE: Applicability.>> For purposes of 
        providing a cause of action for any failure by a mortgage 
        originator, other than a creditor, to comply with any 
        requirement imposed under this section and any regulation 
        prescribed under this section, section 130 shall be applied with 
        respect to any such failure by substituting `mortgage 
        originator' for `creditor' each place such term appears in each 
        such subsection.
            ``(2) Maximum.--The maximum amount of any liability of a 
        mortgage originator under paragraph (1) to a consumer for any 
        violation of this section shall not exceed the greater of actual 
        damages or an amount equal to 3 times the total amount of direct 
        and indirect compensation or gain accruing to the mortgage 
        originator in connection with the residential mortgage loan 
        involved in the violation, plus the costs to the consumer of the 
        action, including a reasonable attorney's fee.''.
SEC. 1405. REGULATIONS.

    (a) Discretionary Regulatory Authority.--Section 129B of the Truth 
in Lending Act is amended by inserting after subsection (d) (as added by 
section 1404) the following new subsection:
    ``(e) Discretionary Regulatory Authority.--
            ``(1) In general.--The Board shall, by regulations, prohibit 
        or condition terms, acts or practices relating to residential 
        mortgage loans that the Board finds to be abusive, unfair, 
        deceptive, predatory, necessary or proper to ensure that 
        responsible, affordable mortgage credit remains available to 
        consumers in a manner consistent with the purposes of this 
        section and section 129C, necessary or proper to effectuate the 
        purposes of this section and section 129C, to prevent 
        circumvention or evasion thereof, or to facilitate compliance 
        with such sections, or are not in the interest of the borrower.
            ``(2) Application.--The regulations prescribed under 
        paragraph (1) shall be applicable to all residential mortgage 
        loans and shall be applied in the same manner as regulations 
        prescribed under section 105.

[[Page 124 STAT. 2142]]

    ``(f) Section 129B and any regulations promulgated thereunder do not 
apply to an extension of credit relating to a plan described in section 
101(53D) of title 11, United States Code.''.
    (b) Disclosures.--Notwithstanding <<NOTE: 15 USC 1601 note.>>  any 
other provision of this title, in order to improve consumer awareness 
and understanding of transactions involving residential mortgage loans 
through the use of disclosures, the Board may, by rule, exempt from or 
modify disclosure requirements, in whole or in part, for any class of 
residential mortgage loans if the Board determines that such exemption 
or modification is in the interest of consumers and in the public 
interest.
SEC. 1406. STUDY OF SHARED APPRECIATION MORTGAGES.

    (a) Study.--The Secretary of Housing and Urban Development, in 
consultation with the Secretary of the Treasury and other relevant 
agencies, shall conduct a comprehensive study to determine prudent 
statutory and regulatory requirements sufficient to provide for the 
widespread use of shared appreciation mortgages to strengthen local 
housing markets, provide new opportunities for affordable homeownership, 
and enable homeowners at risk of foreclosure to refinance or modify 
their mortgages.
    (b) Report.--Not later than the expiration of the 6-month period 
beginning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall submit a report to the Congress on 
the results of the study, which shall include recommendations for the 
regulatory and legislative requirements referred to in subsection (a).

               Subtitle B--Minimum Standards For Mortgages

SEC. 1411. ABILITY TO REPAY.

    (a) In General.--
            (1) Rule <<NOTE: 15 USC 1639c note.>>  of construction.--No 
        regulation, order, or guidance issued by the Bureau under this 
        title shall be construed as requiring a depository institution 
        to apply mortgage underwriting standards that do not meet the 
        minimum underwriting standards required by the appropriate 
        prudential regulator of the depository institution.
            (2) Amendment to truth in lending act.--Chapter 2 of the 
        Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by 
        inserting after section 129B (as added by section 1402(a)) the 
        following new section:
``Sec. 129C. Minimum <<NOTE: 15 USC 1639c.>>  standards for 
                  residential mortgage loans

    ``(a) Ability To Repay.--
            ``(1) In general.--In accordance with regulations prescribed 
        by the Board, no creditor may make a residential mortgage loan 
        unless the creditor makes a reasonable and good faith 
        determination based on verified and documented information that, 
        at the time the loan is consummated, the consumer has a 
        reasonable ability to repay the loan, according to its terms, 
        and all applicable taxes, insurance (including mortgage 
        guarantee insurance), and assessments.
            ``(2) Multiple loans.--If the creditor knows, or has reason 
        to know, that 1 or more residential mortgage loans secured

[[Page 124 STAT. 2143]]

        by the same dwelling will be made to the same consumer, the 
        creditor shall make a reasonable and good faith determination, 
        based on verified and documented information, that the consumer 
        has a reasonable ability to repay the combined payments of all 
        loans on the same dwelling according to the terms of those loans 
        and all applicable taxes, insurance (including mortgage 
        guarantee insurance), and assessments.
            ``(3) Basis for determination.--A determination under this 
        subsection of a consumer's ability to repay a residential 
        mortgage loan shall include consideration of the consumer's 
        credit history, current income, expected income the consumer is 
        reasonably assured of receiving, current obligations, debt-to-
        income ratio or the residual income the consumer will have after 
        paying non-mortgage debt and mortgage-related obligations, 
        employment status, and other financial resources other than the 
        consumer's equity in the dwelling or real property that secures 
        repayment of the loan. A creditor shall determine the ability of 
        the consumer to repay using a payment schedule that fully 
        amortizes the loan over the term of the loan.
            ``(4) Income verification.--A creditor making a residential 
        mortgage loan shall verify amounts of income or assets that such 
        creditor relies on to determine repayment ability, including 
        expected income or assets, by reviewing the consumer's Internal 
        Revenue Service Form W-2, tax returns, payroll receipts, 
        financial institution records, or other third-party documents 
        that provide reasonably reliable evidence of the consumer's 
        income or assets. In order to safeguard against fraudulent 
        reporting, any consideration of a consumer's income history in 
        making a determination under this subsection shall include the 
        verification of such income by the use of--
                    ``(A) Internal Revenue Service transcripts of tax 
                returns; or
                    ``(B) a method that quickly and effectively verifies 
                income documentation by a third party subject to rules 
                prescribed by the Board.
            ``(5) Exemption.--With respect to loans made, guaranteed, or 
        insured by Federal departments or agencies identified in 
        subsection (b)(3)(B)(ii), such departments or agencies may 
        exempt refinancings under a streamlined refinancing from this 
        income verification requirement as long as the following 
        conditions are met:
                    ``(A) The consumer is not 30 days or more past due 
                on the prior existing residential mortgage loan.
                    ``(B) The refinancing does not increase the 
                principal balance outstanding on the prior existing 
                residential mortgage loan, except to the extent of fees 
                and charges allowed by the department or agency making, 
                guaranteeing, or insuring the refinancing.
                    ``(C) Total points and fees (as defined in section 
                103(aa)(4), other than bona fide third party charges not 
                retained by the mortgage originator, creditor, or an 
                affiliate of the creditor or mortgage originator) 
                payable in connection with the refinancing do not exceed 
                3 percent of the total new loan amount.
                    ``(D) The interest rate on the refinanced loan is 
                lower than the interest rate of the original loan, 
                unless the borrower is refinancing from an adjustable 
                rate to a fixed-

[[Page 124 STAT. 2144]]

                rate loan, under guidelines that the department or 
                agency shall establish for loans they make, guarantee, 
                or issue.
                    ``(E) The <<NOTE: Regulations.>> refinancing is 
                subject to a payment schedule that will fully amortize 
                the refinancing in accordance with the regulations 
                prescribed by the department or agency making, 
                guaranteeing, or insuring the refinancing.
                    ``(F) The terms of the refinancing do not result in 
                a balloon payment, as defined in subsection 
                (b)(2)(A)(ii).
                    ``(G) Both the residential mortgage loan being 
                refinanced and the refinancing satisfy all requirements 
                of the department or agency making, guaranteeing, or 
                insuring the refinancing.
            ``(6) Nonstandard loans.--
                    ``(A) Variable rate loans that defer repayment of 
                any principal or interest.--For purposes of determining, 
                under this subsection, a consumer's ability to repay a 
                variable rate residential mortgage loan that allows or 
                requires the consumer to defer the repayment of any 
                principal or interest, the creditor shall use a fully 
                amortizing repayment schedule.
                    ``(B) Interest-only loans.--For purposes of 
                determining, under this subsection, a consumer's ability 
                to repay a residential mortgage loan that permits or 
                requires the payment of interest only, the creditor 
                shall use the payment amount required to amortize the 
                loan by its final maturity.
                    ``(C) Calculation for negative amortization.--In 
                making any determination under this subsection, a 
                creditor shall also take into consideration any balance 
                increase that may accrue from any negative amortization 
                provision.
                    ``(D) Calculation process.--For purposes of making 
                any determination under this subsection, a creditor 
                shall calculate the monthly payment amount for principal 
                and interest on any residential mortgage loan by 
                assuming--
                          ``(i) the loan proceeds are fully disbursed on 
                      the date of the consummation of the loan;
                          ``(ii) the loan is to be repaid in 
                      substantially equal monthly amortizing payments 
                      for principal and interest over the entire term of 
                      the loan with no balloon payment, unless the loan 
                      contract requires more rapid repayment (including 
                      balloon payment), in which case the calculation 
                      shall be made (I) in accordance with regulations 
                      prescribed by the Board, with respect to any loan 
                      which has an annual percentage rate that does not 
                      exceed the average prime offer rate for a 
                      comparable transaction, as of the date the 
                      interest rate is set, by 1.5 or more percentage 
                      points for a first lien residential mortgage loan; 
                      and by 3.5 or more percentage points for a 
                      subordinate lien residential mortgage loan; or 
                      (II) using the contract's repayment schedule, with 
                      respect to a loan which has an annual percentage 
                      rate, as of the date the interest rate is set, 
                      that is at least 1.5 percentage points above the 
                      average prime offer rate for a first lien 
                      residential mortgage loan; and 3.5 percentage 
                      points above the average prime offer rate for a 
                      subordinate lien residential mortgage loan; and

[[Page 124 STAT. 2145]]

                          ``(iii) the interest rate over the entire term 
                      of the loan is a fixed rate equal to the fully 
                      indexed rate at the time of the loan closing, 
                      without considering the introductory rate.
                    ``(E) Refinance of hybrid loans with current 
                lender.--In considering any application for refinancing 
                an existing hybrid loan by the creditor into a standard 
                loan to be made by the same creditor in any case in 
                which there would be a reduction in monthly payment and 
                the mortgagor has not been delinquent on any payment on 
                the existing hybrid loan, the creditor may--
                          ``(i) consider the mortgagor's good standing 
                      on the existing mortgage;
                          ``(ii) consider if the extension of new credit 
                      would prevent a likely default should the original 
                      mortgage reset and give such concerns a higher 
                      priority as an acceptable underwriting practice; 
                      and
                          ``(iii) offer rate discounts and other 
                      favorable terms to such mortgagor that would be 
                      available to new customers with high credit 
                      ratings based on such underwriting practice.
            ``(7) Fully-indexed rate defined.--For purposes of this 
        subsection, the term `fully indexed rate' means the index rate 
        prevailing on a residential mortgage loan at the time the loan 
        is made plus the margin that will apply after the expiration of 
        any introductory interest rates.
            ``(8) Reverse mortgages and bridge loans.--This subsection 
        shall not apply with respect to any reverse mortgage or 
        temporary or bridge loan with a term of 12 months or less, 
        including to any loan to purchase a new dwelling where the 
        consumer plans to sell a different dwelling within 12 months.
            ``(9) Seasonal income.--If documented income, including 
        income from a small business, is a repayment source for a 
        residential mortgage loan, a creditor may consider the 
        seasonality and irregularity of such income in the underwriting 
        of and scheduling of payments for such credit.''.

    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 129B (as added by section 1402(b)) the following new item:

``129C. Minimum standards for residential mortgage loans.''.

SEC. 1412. SAFE HARBOR AND REBUTTABLE PRESUMPTION.

    Section 129C of the Truth in Lending Act is amended by inserting 
after subsection (a) (as added by section 1411) the following new 
subsection:
    ``(b) Presumption of Ability To Repay.--
            ``(1) In general.--Any creditor with respect to any 
        residential mortgage loan, and any assignee of such loan subject 
        to liability under this title, may presume that the loan has met 
        the requirements of subsection (a), if the loan is a qualified 
        mortgage.
            ``(2) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Qualified mortgage.--The term `qualified 
                mortgage' means any residential mortgage loan--

[[Page 124 STAT. 2146]]

                          ``(i) for which the regular periodic payments 
                      for the loan may not--
                                    ``(I) result in an increase of the 
                                principal balance; or
                                    ``(II) except as provided in 
                                subparagraph (E), allow the consumer to 
                                defer repayment of principal;
                          ``(ii) except as provided in subparagraph (E), 
                      the terms of which do not result in a balloon 
                      payment, where a `balloon payment' is a scheduled 
                      payment that is more than twice as large as the 
                      average of earlier scheduled payments;
                          ``(iii) for which the income and financial 
                      resources relied upon to qualify the obligors on 
                      the loan are verified and documented;
                          ``(iv) in the case of a fixed rate loan, for 
                      which the underwriting process is based on a 
                      payment schedule that fully amortizes the loan 
                      over the loan term and takes into account all 
                      applicable taxes, insurance, and assessments;
                          ``(v) in the case of an adjustable rate loan, 
                      for which the underwriting is based on the maximum 
                      rate permitted under the loan during the first 5 
                      years, and a payment schedule that fully amortizes 
                      the loan over the loan term and takes into account 
                      all applicable taxes, insurance, and assessments;
                          ``(vi) that complies with any guidelines or 
                      regulations established by the Board relating to 
                      ratios of total monthly debt to monthly income or 
                      alternative measures of ability to pay regular 
                      expenses after payment of total monthly debt, 
                      taking into account the income levels of the 
                      borrower and such other factors as the Board may 
                      determine relevant and consistent with the 
                      purposes described in paragraph (3)(B)(i);
                          ``(vii) for which the total points and fees 
                      (as defined in subparagraph (C)) payable in 
                      connection with the loan do not exceed 3 percent 
                      of the total loan amount;
                          ``(viii) for which the term of the loan does 
                      not exceed 30 years, except as such term may be 
                      extended under paragraph (3), such as in high-cost 
                      areas; and
                          ``(ix) in the case of a reverse mortgage 
                      (except for the purposes of subsection (a) of 
                      section 129C, to the extent that such mortgages 
                      are exempt altogether from those requirements), a 
                      reverse mortgage which meets the standards for a 
                      qualified mortgage, as set by the Board in rules 
                      that are consistent with the purposes of this 
                      subsection.
                    ``(B) Average prime offer rate.--The term `average 
                prime offer rate' means the average prime offer rate for 
                a comparable transaction as of the date on which the 
                interest rate for the transaction is set, as published 
                by the Board..
                    ``(C) Points and fees.--
                          ``(i) In general.--For purposes of 
                      subparagraph (A), the term `points and fees' means 
                      points and fees as defined by section 103(aa)(4) 
                      (other than bona fide

[[Page 124 STAT. 2147]]

                      third party charges not retained by the mortgage 
                      originator, creditor, or an affiliate of the 
                      creditor or mortgage originator).
                          ``(ii) Computation.--For purposes of computing 
                      the total points and fees under this subparagraph, 
                      the total points and fees shall exclude either of 
                      the amounts described in the following subclauses, 
                      but not both:
                                    ``(I) Up to and including 2 bona 
                                fide discount points payable by the 
                                consumer in connection with the 
                                mortgage, but only if the interest rate 
                                from which the mortgage's interest rate 
                                will be discounted does not exceed by 
                                more than 1 percentage point the average 
                                prime offer rate.
                                    ``(II) Unless 2 bona fide discount 
                                points have been excluded under 
                                subclause (I), up to and including 1 
                                bona fide discount point payable by the 
                                consumer in connection with the 
                                mortgage, but only if the interest rate 
                                from which the mortgage's interest rate 
                                will be discounted does not exceed by 
                                more than 2 percentage points the 
                                average prime offer rate.
                          ``(iii) Bona fide discount points defined.--
                      For purposes of clause (ii), the term `bona fide 
                      discount points' means loan discount points which 
                      are knowingly paid by the consumer for the purpose 
                      of reducing, and which in fact result in a bona 
                      fide reduction of, the interest rate or time-price 
                      differential applicable to the mortgage.
                          ``(iv) Interest rate reduction.--Subclauses 
                      (I) and (II) of clause (ii) shall not apply to 
                      discount points used to purchase an interest rate 
                      reduction unless the amount of the interest rate 
                      reduction purchased is reasonably consistent with 
                      established industry norms and practices for 
                      secondary mortgage market transactions.
                    ``(D) Smaller loans.--
                The <<NOTE: Regulations.>> Board shall prescribe rules 
                adjusting the criteria under subparagraph (A)(vii) in 
                order to permit lenders that extend smaller loans to 
                meet the requirements of the presumption of compliance 
                under paragraph (1). In prescribing <<NOTE: Urban and 
                rural areas.>>  such rules, the Board shall consider the 
                potential impact of such rules on rural areas and other 
                areas where home values are lower.
                    ``(E) Balloon loans.--The Board may, by regulation, 
                provide that the term `qualified mortgage' includes a 
                balloon loan--
                          ``(i) that meets all of the criteria for a 
                      qualified mortgage under subparagraph (A) (except 
                      clauses (i)(II), (ii), (iv), and (v) of such 
                      subparagraph);
                          ``(ii) for which the creditor makes a 
                      determination that the consumer is able to make 
                      all scheduled payments, except the balloon 
                      payment, out of income or assets other than the 
                      collateral;
                          ``(iii) for which the underwriting is based on 
                      a payment schedule that fully amortizes the loan 
                      over a period of not more than 30 years and takes 
                      into

[[Page 124 STAT. 2148]]

                      account all applicable taxes, insurance, and 
                      assessments; and
                          ``(iv) that is extended by a creditor that--
                                    ``(I) operates predominantly in 
                                rural or underserved areas;
                                    ``(II) together with all affiliates, 
                                has total annual residential mortgage 
                                loan originations that do not exceed a 
                                limit set by the Board;
                                    ``(III) retains the balloon loans in 
                                portfolio; and
                                    ``(IV) meets any asset size 
                                threshold and any other criteria as the 
                                Board may establish, consistent with the 
                                purposes of this subtitle.
            ``(3) Regulations.--
                    ``(A) In general.--The Board shall prescribe 
                regulations to carry out the purposes of this 
                subsection.
                    ``(B) Revision of safe harbor criteria.--
                          ``(i) In general.--The Board may prescribe 
                      regulations that revise, add to, or subtract from 
                      the criteria that define a qualified mortgage upon 
                      a finding that such regulations are necessary or 
                      proper to ensure that responsible, affordable 
                      mortgage credit remains available to consumers in 
                      a manner consistent with the purposes of this 
                      section, necessary and appropriate to effectuate 
                      the purposes of this section and section 129B, to 
                      prevent circumvention or evasion thereof, or to 
                      facilitate compliance with such sections.
                          ``(ii) Loan definition.--The following 
                      agencies shall, in consultation with the Board, 
                      prescribe rules defining the types of loans they 
                      insure, guarantee, or administer, as the case may 
                      be, that are qualified mortgages for purposes of 
                      paragraph (2)(A), and such rules may revise, add 
                      to, or subtract from the criteria used to define a 
                      qualified mortgage under paragraph (2)(A), upon a 
                      finding that such rules are consistent with the 
                      purposes of this section and section 129B, to 
                      prevent circumvention or evasion thereof, or to 
                      facilitate compliance with such sections:
                                    ``(I) The Department of Housing and 
                                Urban Development, with regard to 
                                mortgages insured under the National 
                                Housing Act (12 U.S.C. 1707 et seq.).
                                    ``(II) The Department of Veterans 
                                Affairs, with regard to a loan made or 
                                guaranteed by the Secretary of Veterans 
                                Affairs.
                                    ``(III) The Department of 
                                Agriculture, with regard loans 
                                guaranteed by the Secretary of 
                                Agriculture pursuant to 42 U.S.C. 
                                1472(h).
                                    ``(IV) The Rural Housing Service, 
                                with regard to loans insured by the 
                                Rural Housing Service.''.
SEC. 1413. DEFENSE TO FORECLOSURE.

    Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended 
by adding at the end the following new subsection:
    ``(k) Defense to Foreclosure.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, when a creditor, assignee, or other holder of a residential

[[Page 124 STAT. 2149]]

        mortgage loan or anyone acting on behalf of such creditor, 
        assignee, or holder, initiates a judicial or nonjudicial 
        foreclosure of the residential mortgage loan, or any other 
        action to collect the debt in connection with such loan, a 
        consumer may assert a violation by a creditor of paragraph (1) 
        or (2) of section 129B(c), or of section 129C(a), as a matter of 
        defense by recoupment or set off without regard for the time 
        limit on a private action for damages under subsection (e).
            ``(2) Amount of recoupment or setoff.--
                    ``(A) In general.--The amount of recoupment or set-
                off under paragraph (1) shall equal the amount to which 
                the consumer would be entitled under subsection (a) for 
                damages for a valid claim brought in an original action 
                against the creditor, plus the costs to the consumer of 
                the action, including a reasonable attorney's fee.
                    ``(B) Special rule.--Where such judgment is rendered 
                after the expiration of the applicable time limit on a 
                private action for damages under subsection (e), the 
                amount of recoupment or set-off under paragraph (1) 
                derived from damages under subsection (a)(4) shall not 
                exceed the amount to which the consumer would have been 
                entitled under subsection (a)(4) for damages computed up 
                to the day preceding the expiration of the applicable 
                time limit.''.
SEC. 1414. ADDITIONAL STANDARDS AND REQUIREMENTS.

    (a) In General.--Section 129C of the Truth in Lending Act is amended 
by inserting after subsection (b) (as added by this title) the following 
new subsections:
    ``(c) Prohibition on Certain Prepayment Penalties.--
            ``(1) Prohibited on certain loans.--
                    ``(A) In general.--A residential mortgage loan that 
                is not a `qualified mortgage', as defined under 
                subsection (b)(2), may not contain terms under which a 
                consumer must pay a prepayment penalty for paying all or 
                part of the principal after the loan is consummated.
                    ``(B) Exclusions.--For purposes of this subsection, 
                a `qualified mortgage' may not include a residential 
                mortgage loan that--
                          ``(i) has an adjustable rate; or
                          ``(ii) has an annual percentage rate that 
                      exceeds the average prime offer rate for a 
                      comparable transaction, as of the date the 
                      interest rate is set--
                                    ``(I) by 1.5 or more percentage 
                                points, in the case of a first lien 
                                residential mortgage loan having a 
                                original principal obligation amount 
                                that is equal to or less than the amount 
                                of the maximum limitation on the 
                                original principal obligation of 
                                mortgage in effect for a residence of 
                                the applicable size, as of the date of 
                                such interest rate set, pursuant to the 
                                6th sentence of section 305(a)(2) the 
                                Federal Home Loan Mortgage Corporation 
                                Act (12 U.S.C. 1454(a)(2));
                                    ``(II) by 2.5 or more percentage 
                                points, in the case of a first lien 
                                residential mortgage loan having a 
                                original principal obligation amount 
                                that is more than the amount of the 
                                maximum limitation on the original 
                                principal obligation of mortgage in

[[Page 124 STAT. 2150]]

                                effect for a residence of the applicable 
                                size, as of the date of such interest 
                                rate set, pursuant to the 6th sentence 
                                of section 305(a)(2) the Federal Home 
                                Loan Mortgage Corporation Act (12 U.S.C. 
                                1454(a)(2)); and
                                    ``(III) by 3.5 or more percentage 
                                points, in the case of a subordinate 
                                lien residential mortgage loan.
            ``(2)  Publication of average prime offer rate and apr 
        thresholds.--The Board--
                    ``(A) <<NOTE: Deadline.>> shall publish, and update 
                at least weekly, average prime offer rates;
                    ``(B) may publish multiple rates based on varying 
                types of mortgage transactions; and
                    ``(C) shall adjust the thresholds established under 
                subclause (I), (II), and (III) of paragraph (1)(B)(ii) 
                as necessary to reflect significant changes in market 
                conditions and to effectuate the purposes of the 
                Mortgage Reform and Anti-Predatory Lending Act.
            ``(3) Phased-out <<NOTE: Time periods.>> penalties on 
        qualified mortgages.--A qualified mortgage (as defined in 
        subsection (b)(2)) may not contain terms under which a consumer 
        must pay a prepayment penalty for paying all or part of the 
        principal after the loan is consummated in excess of the 
        following limitations:
                    ``(A) During the 1-year period beginning on the date 
                the loan is consummated, the prepayment penalty shall 
                not exceed an amount equal to 3 percent of the 
                outstanding balance on the loan.
                    ``(B) During the 1-year period beginning after the 
                period described in subparagraph (A), the prepayment 
                penalty shall not exceed an amount equal to 2 percent of 
                the outstanding balance on the loan.
                    ``(C) During the 1-year period beginning after the 
                1-year period described in subparagraph (B), the 
                prepayment penalty shall not exceed an amount equal to 1 
                percent of the outstanding balance on the loan.
                    ``(D) After the end of the 3-year period beginning 
                on the date the loan is consummated, no prepayment 
                penalty may be imposed on a qualified mortgage.
            ``(4) Option for no prepayment penalty required.--A creditor 
        may not offer a consumer a residential mortgage loan product 
        that has a prepayment penalty for paying all or part of the 
        principal after the loan is consummated as a term of the loan 
        without offering the consumer a residential mortgage loan 
        product that does not have a prepayment penalty as a term of the 
        loan.

    ``(d) Single Premium Credit Insurance Prohibited.--No creditor may 
finance, directly or indirectly, in connection with any residential 
mortgage loan or with any extension of credit under an open end consumer 
credit plan secured by the principal dwelling of the consumer, any 
credit life, credit disability, credit unemployment, or credit property 
insurance, or any other accident, loss-of-income, life, or health 
insurance, or any payments directly or indirectly for any debt 
cancellation or suspension agreement or contract, except that--

[[Page 124 STAT. 2151]]

            ``(1) insurance premiums or debt cancellation or suspension 
        fees calculated and paid in full on a monthly basis shall not be 
        considered financed by the creditor; and
            ``(2) this subsection shall not apply to credit unemployment 
        insurance for which the unemployment insurance premiums are 
        reasonable, the creditor receives no direct or indirect 
        compensation in connection with the unemployment insurance 
        premiums, and the unemployment insurance premiums are paid 
        pursuant to another insurance contract and not paid to an 
        affiliate of the creditor.

    ``(e) Arbitration.--
            ``(1) In general.--No residential mortgage loan and no 
        extension of credit under an open end consumer credit plan 
        secured by the principal dwelling of the consumer may include 
        terms which require arbitration or any other nonjudicial 
        procedure as the method for resolving any controversy or 
        settling any claims arising out of the transaction.
            ``(2) Post-controversy agreements.--Subject to paragraph 
        (3), paragraph (1) shall not be construed as limiting the right 
        of the consumer and the creditor or any assignee to agree to 
        arbitration or any other nonjudicial procedure as the method for 
        resolving any controversy at any time after a dispute or claim 
        under the transaction arises.
            ``(3) No waiver of statutory cause of action.--No provision 
        of any residential mortgage loan or of any extension of credit 
        under an open end consumer credit plan secured by the principal 
        dwelling of the consumer, and no other agreement between the 
        consumer and the creditor relating to the residential mortgage 
        loan or extension of credit referred to in paragraph (1), shall 
        be applied or interpreted so as to bar a consumer from bringing 
        an action in an appropriate district court of the United States, 
        or any other court of competent jurisdiction, pursuant to 
        section 130 or any other provision of law, for damages or other 
        relief in connection with any alleged violation of this section, 
        any other provision of this title, or any other Federal law.

    ``(f) Mortgages With Negative Amortization.--No creditor may extend 
credit to a borrower in connection with a consumer credit transaction 
under an open or closed end consumer credit plan secured by a dwelling 
or residential real property that includes a dwelling, other than a 
reverse mortgage, that provides or permits a payment plan that may, at 
any time over the term of the extension of credit, result in negative 
amortization unless, before such transaction is consummated--
            ``(1) the creditor provides the consumer with a statement 
        that--
                    ``(A) the pending transaction will or may, as the 
                case may be, result in negative amortization;
                    ``(B) describes negative amortization in such manner 
                as the Board shall prescribe;
                    ``(C) negative amortization increases the 
                outstanding principal balance of the account; and
                    ``(D) negative amortization reduces the consumer's 
                equity in the dwelling or real property; and
            ``(2) in the case of a first-time borrower with respect to a 
        residential mortgage loan that is not a qualified mortgage, the 
        first-time borrower provides the creditor with sufficient

[[Page 124 STAT. 2152]]

        documentation to demonstrate that the consumer received 
        homeownership counseling from organizations or counselors 
        certified by the Secretary of Housing and Urban Development as 
        competent to provide such counseling.''.

    (b) Conforming Amendment Relating to Enforcement.--Section 108(a) of 
the Truth in Lending Act (15 U.S.C. 1607(a)) is amended by inserting 
after paragraph (6) the following new paragraph:
            ``(7) sections 21B and 21C of the Securities Exchange Act of 
        1934, in the case of a broker or dealer, other than a depository 
        institution, by the Securities and Exchange Commission.''.

    (c) Protection Against Loss of Anti-deficiency Protection.--Section 
129C of the Truth in Lending Act is amended by inserting after 
subsection (f) (as added by subsection (a)) the following new 
subsection:
    ``(g) Protection Against Loss of Anti-deficiency Protection.--
            ``(1) Definition.--For purposes of this subsection, the term 
        `anti-deficiency law' means the law of any State which provides 
        that, in the event of foreclosure on the residential property of 
        a consumer securing a mortgage, the consumer is not liable, in 
        accordance with the terms and limitations of such State law, for 
        any deficiency between the sale price obtained on such property 
        through foreclosure and the outstanding balance of the mortgage.
            ``(2) Notice at time of consummation.--In the case of any 
        residential mortgage loan that is, or upon consummation will be, 
        subject to protection under an anti-deficiency law, the creditor 
        or mortgage originator shall provide a written notice to the 
        consumer describing the protection provided by the anti-
        deficiency law and the significance for the consumer of the loss 
        of such protection before such loan is consummated.
            ``(3) Notice before refinancing that would cause loss of 
        protection.--In the case of any residential mortgage loan that 
        is subject to protection under an anti-deficiency law, if a 
        creditor or mortgage originator provides an application to a 
        consumer, or receives an application from a consumer, for any 
        type of refinancing for such loan that would cause the loan to 
        lose the protection of such anti-deficiency law, the creditor or 
        mortgage originator shall provide a written notice to the 
        consumer describing the protection provided by the anti-
        deficiency law and the significance for the consumer of the loss 
        of such protection before any agreement for any such refinancing 
        is consummated.''.

    (d) Policy Regarding Acceptance of Partial Payment.--Section 129C of 
the Truth in Lending Act is amended by inserting after subsection (g) 
(as added by subsection (c)) the following new subsection:
    ``(h) Policy Regarding Acceptance of Partial Payment.--In the case 
of any residential mortgage loan, a creditor shall disclose prior to 
settlement or, in the case of a person becoming a creditor with respect 
to an existing residential mortgage loan, at the time such person 
becomes a creditor--
            ``(1) the creditor's policy regarding the acceptance of 
        partial payments; and

[[Page 124 STAT. 2153]]

            ``(2) if partial payments are accepted, how such payments 
        will be applied to such mortgage and if such payments will be 
        placed in escrow.

    ``(i) Timeshare Plans.--This section and any regulations promulgated 
under this section do not apply to an extension of credit relating to a 
plan described in section 101(53D) of title 11, United States Code.''.
SEC. 1415. <<NOTE: 15 USC 1639b note.>> RULE OF CONSTRUCTION.

    Except as otherwise expressly provided in section 129B or 129C of 
the Truth in Lending Act (as added by this title), no provision of such 
section 129B or 129C shall be construed as superseding, repealing, or 
affecting any duty, right, obligation, privilege, or remedy of any 
person under any other provision of the Truth in Lending Act or any 
other provision of Federal or State law.
SEC. 1416. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

    (a) Increase in Amount of Civil Money Penalties for Certain 
Violations.--Section 130(a) of the Truth in Lending Act (15 U.S.C. 
1640(a)) is amended--
            (1) in paragraph (2)(A)(ii)--
                    (A) by striking ``$100'' and inserting ``$200''; and
                    (B) by striking ``$1,000'' and inserting ``$2,000'';
            (2) in paragraph (2)(B), by striking ``$500,000'' and 
        inserting ``$1,000,000''; and
            (3) in paragraph (4), by inserting ``, paragraph (1) or (2) 
        of section 129B(c), or section 129C(a)'' after ``section 129''.

    (b) Statute of Limitations Extended for Section 129 Violations.--
Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is 
amended--
            (1) in the first sentence, by striking ``Any action'' and 
        inserting ``Except as provided in the subsequent sentence, any 
        action''; and
            (2) by inserting after the first sentence the following new 
        sentence: ``Any action under this section with respect to any 
        violation of section 129, 129B, or 129C may be brought in any 
        United States district court, or in any other court of competent 
        jurisdiction, before the end of the 3-year period beginning on 
        the date of the occurrence of the violation.''.
SEC. 1417. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.

    Section 130 of the Truth in Lending Act (15 U.S.C. 1640) is amended 
by adding after subsection (k) (as added by this title) the following 
new subsection:
    ``(l) Exemption From Liability and Rescission in Case of Borrower 
Fraud or Deception.--In addition to any other remedy available by law or 
contract, no creditor or assignee shall be liable to an obligor under 
this section, if such obligor, or co-obligor has been convicted of 
obtaining by actual fraud such residential mortgage loan.''.
SEC. 1418. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID 
                          ADJUSTABLE RATE MORTGAGES.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 128 the following 
new section:

[[Page 124 STAT. 2154]]

``Sec. 128A. <<NOTE: 15 USC 1638a.>> Reset of hybrid adjustable 
                  rate mortgages

    ``(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes of 
this section, the term `hybrid adjustable rate mortgage' means a 
consumer credit transaction secured by the consumer's principal 
residence with a fixed interest rate for an introductory period that 
adjusts or resets to a variable interest rate after such period.
    ``(b) Notice of Reset and Alternatives.--During <<NOTE: Time 
period.>> the 1-month period that ends 6 months before the date on which 
the interest rate in effect during the introductory period of a hybrid 
adjustable rate mortgage adjusts or resets to a variable interest rate 
or, in the case of such an adjustment or resetting that occurs within 
the first 6 months after consummation of such loan, at consummation, the 
creditor or servicer of such loan shall provide a written notice, 
separate and distinct from all other correspondence to the consumer, 
that includes the following:
            ``(1) Any index or formula used in making adjustments to or 
        resetting the interest rate and a source of information about 
        the index or formula.
            ``(2) An explanation of how the new interest rate and 
        payment would be determined, including an explanation of how the 
        index was adjusted, such as by the addition of a margin.
            ``(3) A good faith estimate, based on accepted industry 
        standards, of the creditor or servicer of the amount of the 
        monthly payment that will apply after the date of the adjustment 
        or reset, and the assumptions on which this estimate is based.
            ``(4) A list of alternatives consumers may pursue before the 
        date of adjustment or reset, and descriptions of the actions 
        consumers must take to pursue these alternatives, including--
                    ``(A) refinancing;
                    ``(B) renegotiation of loan terms;
                    ``(C) payment forbearances; and
                    ``(D) pre-foreclosure sales.
            ``(5) The names, addresses, telephone numbers, and Internet 
        addresses of counseling agencies or programs reasonably 
        available to the consumer that have been certified or approved 
        and made publicly available by the Secretary of Housing and 
        Urban Development or a State housing finance authority (as 
        defined in section 1301 of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989).
            ``(6) The address, telephone number, and Internet address 
        for the State housing finance authority (as so defined) for the 
        State in which the consumer resides.

    ``(c) Savings Clause.--The Board may require the notice in paragraph 
(b) or other notice consistent with this Act for adjustable rate 
mortgage loans that are not hybrid adjustable rate mortgage loans.''.
    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 128 the following new item:

``128A. Reset of hybrid adjustable rate mortgages.''.

SEC. 1419. REQUIRED DISCLOSURES.

    Section 128(a) of Truth in Lending Act (15 U.S.C. 1638(a)) is 
amended by adding at the end the following new paragraphs:

[[Page 124 STAT. 2155]]

            ``(16) In the case of a variable rate residential mortgage 
        loan for which an escrow or impound account will be established 
        for the payment of all applicable taxes, insurance, and 
        assessments--
                    ``(A) the amount of initial monthly payment due 
                under the loan for the payment of principal and 
                interest, and the amount of such initial monthly payment 
                including the monthly payment deposited in the account 
                for the payment of all applicable taxes, insurance, and 
                assessments; and
                    ``(B) the amount of the fully indexed monthly 
                payment due under the loan for the payment of principal 
                and interest, and the amount of such fully indexed 
                monthly payment including the monthly payment deposited 
                in the account for the payment of all applicable taxes, 
                insurance, and assessments.
            ``(17) In the case of a residential mortgage loan, the 
        aggregate amount of settlement charges for all settlement 
        services provided in connection with the loan, the amount of 
        charges that are included in the loan and the amount of such 
        charges the borrower must pay at closing, the approximate amount 
        of the wholesale rate of funds in connection with the loan, and 
        the aggregate amount of other fees or required payments in 
        connection with the loan.
            ``(18) In the case of a residential mortgage loan, the 
        aggregate amount of fees paid to the mortgage originator in 
        connection with the loan, the amount of such fees paid directly 
        by the consumer, and any additional amount received by the 
        originator from the creditor.
            ``(19) In the case of a residential mortgage loan, the total 
        amount of interest that the consumer will pay over the life of 
        the loan as a percentage of the principal of the loan. Such 
        amount shall be computed assuming the consumer makes each 
        monthly payment in full and on-time, and does not make any over-
        payments.''.
SEC. 1420. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR 
                          RESIDENTIAL MORTGAGE LOANS.

    Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is amended 
by adding at the end the following new subsection:
    ``(f) Periodic Statements for Residential Mortgage Loans.--
            ``(1) In general.--The creditor, assignee, or servicer with 
        respect to any residential mortgage loan shall transmit to the 
        obligor, for each billing cycle, a statement setting forth each 
        of the following items, to the extent applicable, in a 
        conspicuous and prominent manner:
                    ``(A) The amount of the principal obligation under 
                the mortgage.
                    ``(B) The current interest rate in effect for the 
                loan.
                    ``(C) The date on which the interest rate may next 
                reset or adjust.
                    ``(D) The amount of any prepayment fee to be 
                charged, if any.
                    ``(E) A description of any late payment fees.
                    ``(F) A telephone number and electronic mail address 
                that may be used by the obligor to obtain information 
                regarding the mortgage.

[[Page 124 STAT. 2156]]

                    ``(G) The names, addresses, telephone numbers, and 
                Internet addresses of counseling agencies or programs 
                reasonably available to the consumer that have been 
                certified or approved and made publicly available by the 
                Secretary of Housing and Urban Development or a State 
                housing finance authority (as defined in section 1301 of 
                the Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989).
                    ``(H) Such other information as the Board may 
                prescribe in regulations.
            ``(2) Development and use of standard form.--The Board shall 
        develop and prescribe a standard form for the disclosure 
        required under this subsection, taking into account that the 
        statements required may be transmitted in writing or 
        electronically.
            ``(3) Exception.--Paragraph (1) shall not apply to any fixed 
        rate residential mortgage loan where the creditor, assignee, or 
        servicer provides the obligor with a coupon book that provides 
        the obligor with substantially the same information as required 
        in paragraph (1).''.
SEC. 1421. REPORT BY THE GAO.

    (a) Report Required.--The Comptroller General of the United States 
shall conduct a study to determine the effects the enactment of this Act 
will have on the availability and affordability of credit for consumers, 
small businesses, homebuyers, and mortgage lending, including the 
effect--
            (1) on the mortgage market for mortgages that are not within 
        the safe harbor provided in the amendments made by this 
        subtitle;
            (2) on the ability of prospective homebuyers to obtain 
        financing;
            (3) on the ability of homeowners facing resets or 
        adjustments to refinance--for example, do they have fewer 
        refinancing options due to the unavailability of certain loan 
        products that were available before the enactment of this Act;
            (4) on minorities' ability to access affordable credit 
        compared with other prospective borrowers;
            (5) on home sales and construction;
            (6) of extending the rescission right, if any, on adjustable 
        rate loans and its impact on litigation;
            (7) of State foreclosure laws and, if any, an investor's 
        ability to transfer a property after foreclosure;
            (8) of expanding the existing provisions of the Home 
        Ownership and Equity Protection Act of 1994;
            (9) of prohibiting prepayment penalties on high-cost 
        mortgages; and
            (10) of establishing counseling services under the 
        Department of Housing and Urban Development and offered through 
        the Office of Housing Counseling.

    (b) Report.--Before the end of the 1-year period beginning on the 
date of the enactment of this Act, the Comptroller General shall submit 
a report to the Congress containing the findings and conclusions of the 
Comptroller General with respect to the study conducted pursuant to 
subsection (a).
    (c) Examination Related to Certain Credit Risk Retention 
Provisions.--The report required by subsection (b) shall also

[[Page 124 STAT. 2157]]

include an analysis by the Comptroller General of the effect on the 
capital reserves and funding of lenders of credit risk retention 
provisions for non-qualified mortgages, including an analysis of the 
exceptions and adjustments authorized in section 129C(b)(3) of the Truth 
in Lending Act and a recommendation on whether a uniform standard is 
needed.
    (d) Analysis of Credit Risk Retention Provisions.--The report 
required by subsection (b) shall also include--
            (1) an analysis by the Comptroller General of whether the 
        credit risk retention provisions have significantly reduced 
        risks to the larger credit market of the repackaging and selling 
        of securitized loans on a secondary market; and
            (2) recommendations to the Congress on adjustments that 
        should be made, or additional measures that should be 
        undertaken.
SEC. 1422. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.

    Section 130(e) of the Truth in Lending Act (15 U.S.C. 1640(e)) is 
amended by striking ``section 129 may also'' and inserting ``section 
129, 129B, 129C, 129D, 129E, 129F, 129G, or 129H of this Act may also''.

                     Subtitle C--High-Cost Mortgages

SEC. 1431. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

    (a) High-cost Mortgage Defined.--Section 103(aa) of the Truth in 
Lending Act (15 U.S.C. 1602(aa)) is amended by striking all that 
precedes paragraph (2) and inserting the following:
    ``(aa) High-cost Mortgage.--
            ``(1) Definition.--
                    ``(A) In general.--The term `high-cost mortgage', 
                and a mortgage referred to in this subsection, means a 
                consumer credit transaction that is secured by the 
                consumer's principal dwelling, other than a reverse 
                mortgage transaction, if--
                          ``(i) in the case of a credit transaction 
                      secured--
                                    ``(I) by a first mortgage on the 
                                consumer's principal dwelling, the 
                                annual percentage rate at consummation 
                                of the transaction will exceed by more 
                                than 6.5 percentage points (8.5 
                                percentage points, if the dwelling is 
                                personal property and the transaction is 
                                for less than $50,000) the average prime 
                                offer rate, as defined in section 
                                129C(b)(2)(B), for a comparable 
                                transaction; or
                                    ``(II) by a subordinate or junior 
                                mortgage on the consumer's principal 
                                dwelling, the annual percentage rate at 
                                consummation of the transaction will 
                                exceed by more than 8.5 percentage 
                                points the average prime offer rate, as 
                                defined in section 129C(b)(2)(B), for a 
                                comparable transaction;
                          ``(ii) the total points and fees payable in 
                      connection with the transaction, other than bona 
                      fide third party charges not retained by the 
                      mortgage originator, creditor, or an affiliate of 
                      the creditor or mortgage originator, exceed--

[[Page 124 STAT. 2158]]

                                    ``(I) in the case of a transaction 
                                for $20,000 or more, 5 percent of the 
                                total transaction amount; or
                                    ``(II) in the case of a transaction 
                                for less than $20,000, the lesser of 8 
                                percent of the total transaction amount 
                                or $1,000 (or such other dollar amount 
                                as the Board shall prescribe by 
                                regulation); or
                          ``(iii) the credit transaction documents 
                      permit the creditor to charge or collect 
                      prepayment fees or penalties more than 36 months 
                      after the transaction closing or such fees or 
                      penalties exceed, in the aggregate, more than 2 
                      percent of the amount prepaid.
                    ``(B) Introductory rates taken into account.--For 
                purposes of subparagraph (A)(i), the annual percentage 
                rate of interest shall be determined based on the 
                following interest rate:
                          ``(i) In the case of a fixed-rate transaction 
                      in which the annual percentage rate will not vary 
                      during the term of the loan, the interest rate in 
                      effect on the date of consummation of the 
                      transaction.
                          ``(ii) In the case of a transaction in which 
                      the rate of interest varies solely in accordance 
                      with an index, the interest rate determined by 
                      adding the index rate in effect on the date of 
                      consummation of the transaction to the maximum 
                      margin permitted at any time during the loan 
                      agreement.
                          ``(iii) In the case of any other transaction 
                      in which the rate may vary at any time during the 
                      term of the loan for any reason, the interest 
                      charged on the transaction at the maximum rate 
                      that may be charged during the term of the loan.
                    ``(C) Mortgage insurance.--For the purposes of 
                computing the total points and fees under paragraph (4), 
                the total points and fees shall exclude--
                          ``(i) any premium provided by an agency of the 
                      Federal Government or an agency of a State;
                          ``(ii) any amount that is not in excess of the 
                      amount payable under policies in effect at the 
                      time of origination under section 203(c)(2)(A) of 
                      the National Housing Act (12 U.S.C. 
                      1709(c)(2)(A)), provided that the premium, charge, 
                      or fee is required to be refundable on a pro-rated 
                      basis and the refund is automatically issued upon 
                      notification of the satisfaction of the underlying 
                      mortgage loan; and
                          ``(iii) any premium paid by the consumer after 
                      closing.''.

    (b) Adjustment of Percentage Points.--Section 103(aa)(2) of the 
Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by striking 
subparagraph (B) and inserting the following new subparagraph:
                    ``(B) An increase or decrease under subparagraph 
                (A)--
                          ``(i) may not result in the number of 
                      percentage points referred to in paragraph 
                      (1)(A)(i)(I) being less than 6 percentage points 
                      or greater than 10 percentage points; and

[[Page 124 STAT. 2159]]

                          ``(ii) may not result in the number of 
                      percentage points referred to in paragraph 
                      (1)(A)(i)(II) being less than 8 percentage points 
                      or greater than 12 percentage points.''.

    (c) Points and Fees Defined.--
            (1) In general.--Section 103(aa)(4) of the Truth in Lending 
        Act (15 U.S.C. 1602(aa)(4)) is amended--
                    (A) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) all compensation paid directly or indirectly 
                by a consumer or creditor to a mortgage originator from 
                any source, including a mortgage originator that is also 
                the creditor in a table-funded transaction;'';
                    (B) by redesignating subparagraph (D) as 
                subparagraph (G); and
                    (C) by inserting after subparagraph (C) the 
                following new subparagraphs:
                    ``(D) premiums or other charges payable at or before 
                closing for any credit life, credit disability, credit 
                unemployment, or credit property insurance, or any other 
                accident, loss-of-income, life or health insurance, or 
                any payments directly or indirectly for any debt 
                cancellation or suspension agreement or contract, except 
                that insurance premiums or debt cancellation or 
                suspension fees calculated and paid in full on a monthly 
                basis shall not be considered financed by the creditor;
                    ``(E) the maximum prepayment fees and penalties 
                which may be charged or collected under the terms of the 
                credit transaction;
                    ``(F) all prepayment fees or penalties that are 
                incurred by the consumer if the loan refinances a 
                previous loan made or currently held by the same 
                creditor or an affiliate of the creditor; and''.
            (2) Calculation of points and fees for open-end consumer 
        credit plans.--Section 103(aa) of the Truth in Lending Act (15 
        U.S.C. 1602(aa)) is amended--
                    (A) by redesignating paragraph (5) as paragraph (6); 
                and
                    (B) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Calculation of points and fees for open-end consumer 
        credit plans.--In the case of open-end consumer credit plans, 
        points and fees shall be calculated, for purposes of this 
        section and section 129, by adding the total points and fees 
        known at or before closing, including the maximum prepayment 
        penalties which may be charged or collected under the terms of 
        the credit transaction, plus the minimum additional fees the 
        consumer would be required to pay to draw down an amount equal 
        to the total credit line.''.

    (d) Bona Fide Discount Loan Discount Points.--Section 103 of the 
Truth in Lending Act (15 U.S.C. 1602) is amended by inserting after 
subsection (cc) (as added by section 1401) the following new subsection:
    ``(dd) Bona Fide Discount Points and Prepayment Penalties.--For the 
purposes of determining the amount of points and fees for purposes of 
subsection (aa), either the amounts

[[Page 124 STAT. 2160]]

described in paragraph (1) or (2) of the following paragraphs, but not 
both, shall be excluded:
            ``(1) Up to and including 2 bona fide discount points 
        payable by the consumer in connection with the mortgage, but 
        only if the interest rate from which the mortgage's interest 
        rate will be discounted does not exceed by more than 1 
        percentage point--
                    ``(A) the average prime offer rate, as defined in 
                section 129C; or
                    ``(B) if secured by a personal property loan, the 
                average rate on a loan in connection with which 
                insurance is provided under title I of the National 
                Housing Act (12 U.S.C. 1702 et seq.).
            ``(2) Unless 2 bona fide discount points have been excluded 
        under paragraph (1), up to and including 1 bona fide discount 
        point payable by the consumer in connection with the mortgage, 
        but only if the interest rate from which the mortgage's interest 
        rate will be discounted does not exceed by more than 2 
        percentage points--
                    ``(A) the average prime offer rate, as defined in 
                section 129C; or
                    ``(B) if secured by a personal property loan, the 
                average rate on a loan in connection with which 
                insurance is provided under title I of the National 
                Housing Act (12 U.S.C. 1702 et seq.).
            ``(3) For purposes of paragraph (1), the term `bona fide 
        discount points' means loan discount points which are knowingly 
        paid by the consumer for the purpose of reducing, and which in 
        fact result in a bona fide reduction of, the interest rate or 
        time-price differential applicable to the mortgage.
            ``(4) Paragraphs (1) and (2) shall not apply to discount 
        points used to purchase an interest rate reduction unless the 
        amount of the interest rate reduction purchased is reasonably 
        consistent with established industry norms and practices for 
        secondary mortgage market transactions.''.
SEC. 1432. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN 
                          MORTGAGES.

    (a) Prepayment Penalty Provisions.-- <<NOTE: Repeal.>> Section 
129(c)(2) of the Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby 
repealed.

    (b) No Balloon Payments.--Section 129(e) of the Truth in Lending Act 
(15 U.S.C. 1639(e)) is amended to read as follows:
    ``(e) No Balloon Payments.--No high-cost mortgage may contain a 
scheduled payment that is more than twice as large as the average of 
earlier scheduled payments. This subsection shall not apply when the 
payment schedule is adjusted to the seasonal or irregular income of the 
consumer.''.
SEC. 1433. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.

    (a) Additional Requirements for Certain Mortgages.--Section 129 of 
the Truth in Lending Act (15 U.S.C. 1639) is amended--
            (1) by redesignating subsections (j), (k), (l) and (m) as 
        subsections (n), (o), (p), and (q) respectively; and
            (2) by inserting after subsection (i) the following new 
        subsections:

    ``(j) Recommended Default.--No creditor shall recommend or encourage 
default on an existing loan or other debt prior to and in connection 
with the closing or planned closing of a high-cost

[[Page 124 STAT. 2161]]

mortgage that refinances all or any portion of such existing loan or 
debt.
    ``(k) Late Fees.--
            ``(1) In general.--No creditor may impose a late payment 
        charge or fee in connection with a high-cost mortgage--
                    ``(A) in an amount in excess of 4 percent of the 
                amount of the payment past due;
                    ``(B) unless the loan documents specifically 
                authorize the charge or fee;
                    ``(C) <<NOTE: Deadlines.>> before the end of the 15-
                day period beginning on the date the payment is due, or 
                in the case of a loan on which interest on each 
                installment is paid in advance, before the end of the 
                30-day period beginning on the date the payment is due; 
                or
                    ``(D) more than once with respect to a single late 
                payment.
            ``(2) Coordination with subsequent late fees.--If a payment 
        is otherwise a full payment for the applicable period and is 
        paid on its due date or within an applicable grace period, and 
        the only delinquency or insufficiency of payment is attributable 
        to any late fee or delinquency charge assessed on any earlier 
        payment, no late fee or delinquency charge may be imposed on 
        such payment.
            ``(3) Failure to make installment payment.--If, in the case 
        of a loan agreement the terms of which provide that any payment 
        shall first be applied to any past due principal balance, the 
        consumer fails to make an installment payment and the consumer 
        subsequently resumes making installment payments but has not 
        paid all past due installments, the creditor may impose a 
        separate late payment charge or fee for any principal due 
        (without deduction due to late fees or related fees) until the 
        default is cured.

    ``(l) Acceleration of Debt.--No high-cost mortgage may contain a 
provision which permits the creditor to accelerate the indebtedness, 
except when repayment of the loan has been accelerated by default in 
payment, or pursuant to a due-on-sale provision, or pursuant to a 
material violation of some other provision of the loan document 
unrelated to payment schedule.
    ``(m) Restriction on Financing Points and Fees.--No creditor may 
directly or indirectly finance, in connection with any high-cost 
mortgage, any of the following:
            ``(1) Any prepayment fee or penalty payable by the consumer 
        in a refinancing transaction if the creditor or an affiliate of 
        the creditor is the noteholder of the note being refinanced.
            ``(2) Any points or fees.''.

    (b) Prohibitions on Evasions.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639) is amended by inserting after subsection (q) (as so 
redesignated by subsection (a)(1)) the following new subsection:
    ``(r) Prohibitions on Evasions, Structuring of Transactions, and 
Reciprocal Arrangements.--A creditor may not take any action in 
connection with a high-cost mortgage--
            ``(1) to structure a loan transaction as an open-end credit 
        plan or another form of loan for the purpose and with the intent 
        of evading the provisions of this title; or

[[Page 124 STAT. 2162]]

            ``(2) to divide any loan transaction into separate parts for 
        the purpose and with the intent of evading provisions of this 
        title.''.

    (c) Modification or Deferral Fees.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection 
(r) (as added by subsection (b) of this section) the following new 
subsection:
    ``(s) Modification and Deferral Fees Prohibited.--A creditor, 
successor in interest, assignee, or any agent of any of the above, may 
not charge a consumer any fee to modify, renew, extend, or amend a high-
cost mortgage, or to defer any payment due under the terms of such 
mortgage.''.
    (d) Payoff Statement.--Section 129 of the Truth in Lending Act (15 
U.S.C. 1639) is amended by inserting after subsection (s) (as added by 
subsection (c) of this section) the following new subsection:
    ``(t) Payoff Statement.--
            ``(1) Fees.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no creditor or servicer may charge a 
                fee for informing or transmitting to any person the 
                balance due to pay off the outstanding balance on a 
                high-cost mortgage.
                    ``(B) Transaction fee.--When payoff information 
                referred to in subparagraph (A) is provided by facsimile 
                transmission or by a courier service, a creditor or 
                servicer may charge a processing fee to cover the cost 
                of such transmission or service in an amount not to 
                exceed an amount that is comparable to fees imposed for 
                similar services provided in connection with consumer 
                credit transactions that are secured by the consumer's 
                principal dwelling and are not high-cost mortgages.
                    ``(C) Fee disclosure.--Prior to charging a 
                transaction fee as provided in subparagraph (B), a 
                creditor or servicer shall disclose that payoff balances 
                are available for free pursuant to subparagraph (A).
                    ``(D) Multiple requests.--If a creditor or servicer 
                has provided payoff information referred to in 
                subparagraph (A) without charge, other than the 
                transaction fee allowed by subparagraph (B), on 4 
                occasions during a calendar year, the creditor or 
                servicer may thereafter charge a reasonable fee for 
                providing such information during the remainder of the 
                calendar year.
            ``(2) Prompt delivery.--Payoff <<NOTE: Deadline.>> balances 
        shall be provided within 5 business days after receiving a 
        request by a consumer or a person authorized by the consumer to 
        obtain such information.''.

    (e) Pre-Loan Counseling Required.--Section 129 of the Truth in 
Lending Act (15 U.S.C. 1639) is amended by inserting after subsection t) 
(as added by subsection (d) of this section) the following new 
subsection:
    ``(u) Pre-Loan Counseling.--
            ``(1) In general.--A <<NOTE: Certification.>> creditor may 
        not extend credit to a consumer under a high-cost mortgage 
        without first receiving certification from a counselor that is 
        approved by the Secretary of Housing and Urban Development, or 
        at the discretion of

[[Page 124 STAT. 2163]]

        the Secretary, a State housing finance authority, that the 
        consumer has received counseling on the advisability of the 
        mortgage. Such counselor shall not be employed by the creditor 
        or an affiliate of the creditor or be affiliated with the 
        creditor.
            ``(2) Disclosures required prior to counseling.--No 
        counselor may certify that a consumer has received counseling on 
        the advisability of the high-cost mortgage unless the counselor 
        can verify that the consumer has received each statement 
        required (in connection with such loan) by this section or the 
        Real Estate Settlement Procedures Act of 1974 with respect to 
        the transaction.
            ``(3) Regulations.--The Board may prescribe such regulations 
        as the Board determines to be appropriate to carry out the 
        requirements of paragraph (1).''.

    (f) Corrections and Unintentional Violations.--Section 129 of the 
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after 
subsection (u) (as added by subsection (e)) the following new 
subsection:
    ``(v) Corrections and 
Unintentional <<NOTE: Deadlines. Notifications.>> Violations.--A 
creditor or assignee in a high-cost mortgage who, when acting in good 
faith, fails to comply with any requirement under this section will not 
be deemed to have violated such requirement if the creditor or assignee 
establishes that either--
            ``(1) within 30 days of the loan closing and prior to the 
        institution of any action, the consumer is notified of or 
        discovers the violation, appropriate restitution is made, and 
        whatever adjustments are necessary are made to the loan to 
        either, at the choice of the consumer--
                    ``(A) make the loan satisfy the requirements of this 
                chapter; or
                    ``(B) in the case of a high-cost mortgage, change 
                the terms of the loan in a manner beneficial to the 
                consumer so that the loan will no longer be a high-cost 
                mortgage; or
            ``(2) within 60 days of the creditor's discovery or receipt 
        of notification of an unintentional violation or bona fide error 
        and prior to the institution of any action, the consumer is 
        notified of the compliance failure, appropriate restitution is 
        made, and whatever adjustments are necessary are made to the 
        loan to either, at the choice of the consumer--
                    ``(A) make the loan satisfy the requirements of this 
                chapter; or
                    ``(B) in the case of a high-cost mortgage, change 
                the terms of the loan in a manner beneficial so that the 
                loan will no longer be a high-cost mortgage.''.

 Subtitle D--Office <<NOTE: Expand and Preserve Home Ownership Through 
Counseling Act.>>  of Housing Counseling
SEC. 1441. <<NOTE: 12 USC 1701 note.>> SHORT TITLE.

    This subtitle may be cited as the ``Expand and Preserve Home 
Ownership Through Counseling Act''.
SEC. 1442. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

    Section 4 of the Department of Housing and Urban Development Act (42 
U.S.C. 3533) is amended by adding at the end the following new 
subsection:

[[Page 124 STAT. 2164]]

    ``(g) Office of Housing Counseling.--
            ``(1) Establishment.--There is established, in the 
        Department, the Office of Housing Counseling.
            ``(2) Director.--There is established the position of 
        Director of Housing Counseling. The Director shall be the head 
        of the Office of Housing Counseling and shall be appointed by, 
        and shall report to, the Secretary. Such position shall be a 
        career-reserved position in the Senior Executive Service.
            ``(3) Functions.--
                    ``(A) In general.--The Director shall have primary 
                responsibility within the Department for all activities 
                and matters relating to homeownership counseling and 
                rental housing counseling, including--
                          ``(i) research, grant administration, public 
                      outreach, and policy development relating to such 
                      counseling; and
                          ``(ii) establishment, coordination, and 
                      administration of all regulations, requirements, 
                      standards, and performance measures under programs 
                      and laws administered by the Department that 
                      relate to housing counseling, homeownership 
                      counseling (including maintenance of homes), 
                      mortgage-related counseling (including home equity 
                      conversion mortgages and credit protection options 
                      to avoid foreclosure), and rental housing 
                      counseling, including the requirements, standards, 
                      and performance measures relating to housing 
                      counseling.
                    ``(B) Specific functions.--The Director shall carry 
                out the functions assigned to the Director and the 
                Office under this section and any other provisions of 
                law. Such functions shall include establishing rules 
                necessary for--
                          ``(i) the counseling procedures under section 
                      106(g)(1) of the Housing and Urban Development Act 
                      of 1968 (12 U.S.C. 1701x(h)(1));
                          ``(ii) carrying out all other functions of the 
                      Secretary under section 106(g) of the Housing and 
                      Urban Development Act of 1968, including the 
                      establishment, operation, and publication of the 
                      availability of the toll-free telephone number 
                      under paragraph (2) of such section;
                          ``(iii) contributing to the distribution of 
                      home buying information booklets pursuant to 
                      section 5 of the Real Estate Settlement Procedures 
                      Act of 1974 (12 U.S.C. 2604);
                          ``(iv) carrying out the certification program 
                      under section 106(e) of the Housing and Urban 
                      Development Act of 1968 (12 U.S.C. 1701x(e));
                          ``(v) carrying out the assistance program 
                      under section 106(a)(4) of the Housing and Urban 
                      Development Act of 1968, including criteria for 
                      selection of applications to receive assistance;
                          ``(vi) carrying out any functions regarding 
                      abusive, deceptive, or unscrupulous lending 
                      practices relating to residential mortgage loans 
                      that the Secretary considers appropriate, which 
                      shall include conducting the study under section 6 
                      of the Expand and Preserve Home Ownership Through 
                      Counseling Act;

[[Page 124 STAT. 2165]]

                          ``(vii) providing for operation of the 
                      advisory committee established under paragraph (4) 
                      of this subsection;
                          ``(viii) collaborating with community-based 
                      organizations with expertise in the field of 
                      housing counseling; and
                          ``(ix) providing for the building of capacity 
                      to provide housing counseling services in areas 
                      that lack sufficient services, including 
                      underdeveloped areas that lack basic water and 
                      sewer systems, electricity services, and safe, 
                      sanitary housing.
            ``(4) Advisory committee.--
                    ``(A) In general.--
                The <<NOTE: Appointment.>> Secretary shall appoint an 
                advisory committee to provide advice regarding the 
                carrying out of the functions of the Director.
                    ``(B) Members.--Such advisory committee shall 
                consist of not more than 12 individuals, and the 
                membership of the committee shall equally represent the 
                mortgage and real estate industry, including consumers 
                and housing counseling agencies certified by the 
                Secretary.
                    ``(C) Terms.--Except as provided in subparagraph 
                (D), each member of the advisory committee shall be 
                appointed for a term of 3 years. Members may be 
                reappointed at the discretion of the Secretary.
                    ``(D) Terms of initial appointees.--As designated by 
                the Secretary at the time of appointment, of the members 
                first appointed to the advisory committee, 4 shall be 
                appointed for a term of 1 year and 4 shall be appointed 
                for a term of 2 years.
                    ``(E) Prohibition of pay; travel expenses.--Members 
                of the advisory committee shall serve without pay, but 
                shall receive travel expenses, including per diem in 
                lieu of subsistence, in accordance with applicable 
                provisions under subchapter I of chapter 57 of title 5, 
                United States Code.
                    ``(F) Advisory role only.--The advisory committee 
                shall have no role in reviewing or awarding housing 
                counseling grants.
            ``(5) Scope of homeownership counseling.--In carrying out 
        the responsibilities of the Director, the Director shall ensure 
        that homeownership counseling provided by, in connection with, 
        or pursuant to any function, activity, or program of the 
        Department addresses the entire process of homeownership, 
        including the decision to purchase a home, the selection and 
        purchase of a home, issues arising during or affecting the 
        period of ownership of a home (including refinancing, default 
        and foreclosure, and other financial decisions), and the sale or 
        other disposition of a home.''.
SEC. 1443. COUNSELING PROCEDURES.

    (a) In General.--Section 106 of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x) is amended by adding at the end the 
following new subsection:
    ``(g) Procedures and Activities.--
            ``(1) Counseling <<NOTE: Definitions.>>  procedures.--

[[Page 124 STAT. 2166]]

                    ``(A) In general.--The Secretary shall establish, 
                coordinate, and monitor the administration by the 
                Department of Housing and Urban Development of the 
                counseling procedures for homeownership counseling and 
                rental housing counseling provided in connection with 
                any program of the Department, including all 
                requirements, standards, and performance measures that 
                relate to homeownership and rental housing counseling.
                    ``(B) Homeownership counseling.--For purposes of 
                this subsection and as used in the provisions referred 
                to in this subparagraph, the term `homeownership 
                counseling' means counseling related to homeownership 
                and residential mortgage loans. Such term includes 
                counseling related to homeownership and residential 
                mortgage loans that is provided pursuant to--
                          ``(i) section 105(a)(20) of the Housing and 
                      Community Development Act of 1974 (42 U.S.C. 
                      5305(a)(20));
                          ``(ii) in the United States Housing Act of 
                      1937--
                                    ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                    ``(II) section 8(y)(1)(D) (42 U.S.C. 
                                1437f(y)(1)(D));
                                    ``(III) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                    ``(IV) section 23(c)(4) (42 U.S.C. 
                                1437u(c)(4));
                                    ``(V) section 32(e)(4) (42 U.S.C. 
                                1437z-4(e)(4));
                                    ``(VI) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B));
                                    ``(VII) sections 302(b)(6) and 
                                303(b)(7) (42 U.S.C. 1437aaa-1(b)(6), 
                                1437aaa-2(b)(7)); and
                                    ``(VIII) section 304(c)(4) (42 
                                U.S.C. 1437aaa-3(c)(4));
                          ``(iii) section 302(a)(4) of the American 
                      Homeownership and Economic Opportunity Act of 2000 
                      (42 U.S.C. 1437f note);
                          ``(iv) sections 233(b)(2) and 258(b) of the 
                      Cranston-Gonzalez National Affordable Housing Act 
                      (42 U.S.C. 12773(b)(2), 12808(b));
                          ``(v) this section and section 101(e) of the 
                      Housing and Urban Development Act of 1968 (12 
                      U.S.C. 1701x, 1701w(e));
                          ``(vi) section 220(d)(2)(G) of the Low-Income 
                      Housing Preservation and Resident Homeownership 
                      Act of 1990 (12 U.S.C. 4110(d)(2)(G));
                          ``(vii) sections 422(b)(6), 423(b)(7), 
                      424(c)(4), 442(b)(6), and 443(b)(6) of the 
                      Cranston-Gonzalez National Affordable Housing Act 
                      (42 U.S.C. 12872(b)(6), 12873(b)(7), 12874(c)(4), 
                      12892(b)(6), and 12893(b)(6));
                          ``(viii) section 491(b)(1)(F)(iii) of the 
                      McKinney-Vento Homeless Assistance Act (42 U.S.C. 
                      11408(b)(1)(F)(iii));
                          ``(ix) sections 202(3) and 810(b)(2)(A) of the 
                      Native American Housing and Self-Determination Act 
                      of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A));
                          ``(x) in the National Housing Act--
                                    ``(I) in section 203 (12 U.S.C. 
                                1709), the penultimate undesignated 
                                paragraph of paragraph (2)

[[Page 124 STAT. 2167]]

                                of subsection (b), subsection (c)(2)(A), 
                                and subsection (r)(4);
                                    ``(II) subsections (a) and (c)(3) of 
                                section 237 (12 U.S.C. 1715z-2); and
                                    ``(III) subsections (d)(2)(B) and 
                                (m)(1) of section 255 (12 U.S.C. 1715z-
                                20);
                          ``(xi) section 502(h)(4)(B) of the Housing Act 
                      of 1949 (42 U.S.C. 1472(h)(4)(B));
                          ``(xii) section 508 of the Housing and Urban 
                      Development Act of 1970 (12 U.S.C. 1701z-7); and
                          ``(xiii) section 106 of the Energy Policy Act 
                      of 1992 (42 U.S.C. 12712 note).
                    ``(C) Rental housing counseling.--For purposes of 
                this subsection, the term `rental housing counseling' 
                means counseling related to rental of residential 
                property, which may include counseling regarding future 
                homeownership opportunities and providing referrals for 
                renters and prospective renters to entities providing 
                counseling and shall include counseling related to such 
                topics that is provided pursuant to--
                          ``(i) section 105(a)(20) of the Housing and 
                      Community Development Act of 1974 (42 U.S.C. 
                      5305(a)(20));
                          ``(ii) in the United States Housing Act of 
                      1937--
                                    ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                    ``(II) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                    ``(III) section 23(c)(4) (42 U.S.C. 
                                1437u(c)(4));
                                    ``(IV) section 32(e)(4) (42 U.S.C. 
                                1437z-4(e)(4));
                                    ``(V) section 33(d)(2)(B) (42 U.S.C. 
                                1437z-5(d)(2)(B)); and
                                    ``(VI) section 302(b)(6) (42 U.S.C. 
                                1437aaa-1(b)(6));
                          ``(iii) section 233(b)(2) of the Cranston-
                      Gonzalez National Affordable Housing Act (42 
                      U.S.C. 12773(b)(2));
                          ``(iv) section 106 of the Housing and Urban 
                      Development Act of 1968 (12 U.S.C. 1701x);
                          ``(v) section 422(b)(6) of the Cranston-
                      Gonzalez National Affordable Housing Act (42 
                      U.S.C. 12872(b)(6));
                          ``(vi) section 491(b)(1)(F)(iii) of the 
                      McKinney-Vento Homeless Assistance Act (42 U.S.C. 
                      11408(b)(1)(F)(iii));
                          ``(vii) sections 202(3) and 810(b)(2)(A) of 
                      the Native American Housing and Self-Determination 
                      Act of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
                      and
                          ``(viii) the rental assistance program under 
                      section 8 of the United States Housing Act of 1937 
                      (42 U.S.C. 1437f).
            ``(2) Standards for materials.--The Secretary, in 
        consultation with the advisory committee established under 
        subsection (g)(4) of the Department of Housing and Urban 
        Development Act, shall establish standards for materials and 
        forms to be used, as appropriate, by organizations providing 
        homeownership counseling services, including any recipients of 
        assistance pursuant to subsection (a)(4).
            ``(3) Mortgage software systems.--

[[Page 124 STAT. 2168]]

                    ``(A) Certification.--The Secretary shall provide 
                for the certification of various computer software 
                programs for consumers to use in evaluating different 
                residential mortgage loan proposals. The Secretary shall 
                require, for such certification, that the mortgage 
                software systems take into account--
                          ``(i) the consumer's financial situation and 
                      the cost of maintaining a home, including 
                      insurance, taxes, and utilities;
                          ``(ii) the amount of time the consumer expects 
                      to remain in the home or expected time to maturity 
                      of the loan; and
                          ``(iii) such other factors as the Secretary 
                      considers appropriate to assist the consumer in 
                      evaluating whether to pay points, to lock in an 
                      interest rate, to select an adjustable or fixed 
                      rate loan, to select a conventional or government-
                      insured or guaranteed loan and to make other 
                      choices during the loan application process.
                If the Secretary determines that available existing 
                software is inadequate to assist consumers during the 
                residential mortgage loan application process, the 
                Secretary shall arrange for the development by private 
                sector software companies of new mortgage software 
                systems that meet the Secretary's specifications.
                    ``(B) Use and initial availability.--Such certified 
                computer software programs shall be used to supplement, 
                not replace, housing counseling. The Secretary shall 
                provide that such programs are initially used only in 
                connection with the assistance of housing counselors 
                certified pursuant to subsection (e).
                    ``(C) Availability.--After <<NOTE: Web posting.>>  a 
                period of initial availability under subparagraph (B) as 
                the Secretary considers appropriate, the Secretary shall 
                take reasonable steps to make mortgage software systems 
                certified pursuant to this paragraph widely available 
                through the Internet and at public locations, including 
                public libraries, senior-citizen centers, public housing 
                sites, offices of public housing agencies that 
                administer rental housing assistance vouchers, and 
                housing counseling centers.
                    ``(D) Budget compliance.--This paragraph shall be 
                effective only to the extent that amounts to carry out 
                this paragraph are made available in advance in 
                appropriations Acts.
            ``(4) National public service multimedia campaigns to 
        promote housing counseling.--
                    ``(A) In general.--The Director of Housing 
                Counseling shall develop, implement, and conduct 
                national public service multimedia campaigns designed to 
                make persons facing mortgage foreclosure, persons 
                considering a subprime mortgage loan to purchase a home, 
                elderly persons, persons who face language barriers, 
                low-income persons, minorities, and other potentially 
                vulnerable consumers aware that it is advisable, before 
                seeking or maintaining a residential mortgage loan, to 
                obtain homeownership counseling from an unbiased and 
                reliable

[[Page 124 STAT. 2169]]

                sources and that such homeownership counseling is 
                available, including through programs sponsored by the 
                Secretary of Housing and Urban Development.
                    ``(B) Contact information.-- <<NOTE: Public 
                information. Web posting.>> Each segment of the 
                multimedia campaign under subparagraph (A) shall 
                publicize the toll-free telephone number and website of 
                the Department of Housing and Urban Development through 
                which persons seeking housing counseling can locate a 
                housing counseling agency in their State that is 
                certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a home, 
                renting, defaults, foreclosures, credit issues, and 
                reverse mortgages.
                    ``(C) Authorization of appropriations.--There are 
                authorized to be appropriated to the Secretary, not to 
                exceed $3,000,000 for fiscal years 2009, 2010, and 2011, 
                for the development, implementation, and conduct of 
                national public service multimedia campaigns under this 
                paragraph.
                    ``(D) Foreclosure rescue education programs.--
                          ``(i) In general.--Ten percent of any funds 
                      appropriated pursuant to the authorization under 
                      subparagraph (C) shall be used by the Director of 
                      Housing Counseling to conduct an education program 
                      in areas that have a high density of foreclosure. 
                      Such program shall involve direct mailings to 
                      persons living in such areas describing--
                                    ``(I) tips on avoiding foreclosure 
                                rescue scams;
                                    ``(II) tips on avoiding predatory 
                                lending mortgage agreements;
                                    ``(III) tips on avoiding for-profit 
                                foreclosure counseling services; and
                                    ``(IV) local counseling resources 
                                that are approved by the Department of 
                                Housing and Urban Development.
                          ``(ii) Program emphasis.--In conducting the 
                      education program described under clause (i), the 
                      Director of Housing Counseling shall also place an 
                      emphasis on serving communities that have a high 
                      percentage of retirement communities or a high 
                      percentage of low-income minority communities.
                          ``(iii) Terms defined.--For purposes of this 
                      subparagraph:
                                    ``(I) High density of 
                                foreclosures.--An area has a `high 
                                density of foreclosures' if such area is 
                                one of the metropolitan statistical 
                                areas (as that term is defined by the 
                                Director of the Office of Management and 
                                Budget) with the highest home 
                                foreclosure rates.
                                    ``(II) High percentage of retirement 
                                communities.--An area has a `high 
                                percentage of retirement communities' if 
                                such area is one of the metropolitan 
                                statistical areas (as that term is 
                                defined by the Director of the Office of 
                                Management and Budget) with the highest 
                                percentage of residents aged 65 or 
                                older.
                                    ``(III) High percentage of low-
                                income minority communities.--An area 
                                has a `high

[[Page 124 STAT. 2170]]

                                percentage of low-income minority 
                                communities' if such area contains a 
                                higher-than-normal percentage of 
                                residents who are both minorities and 
                                low-income, as defined by the Director 
                                of Housing Counseling.
            ``(5) Education programs.--The Secretary shall provide 
        advice and technical assistance to States, units of general 
        local government, and nonprofit organizations regarding the 
        establishment and operation of, including assistance with the 
        development of content and materials for, educational programs 
        to inform and educate consumers, particularly those most 
        vulnerable with respect to residential mortgage loans (such as 
        elderly persons, persons facing language barriers, low-income 
        persons, minorities, and other potentially vulnerable 
        consumers), regarding home mortgages, mortgage refinancing, home 
        equity loans, home repair loans, and where appropriate by 
        region, any requirements and costs associated with obtaining 
        flood or other disaster-specific insurance coverage.''.

    (b) Conforming Amendments to Grant Program for Homeownership 
Counseling Organizations.--Section 106(c)(5)(A)(ii) of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is 
amended--
            (1) in subclause (III), by striking ``and'' at the end;
            (2) in subclause (IV) by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after subclause (IV) the following new 
        subclause:
                                    ``(V) <<NOTE: Notification.>> notify 
                                the housing or mortgage applicant of the 
                                availability of mortgage software 
                                systems provided pursuant to subsection 
                                (g)(3).''.
SEC. 1444. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

    Section 106(a) of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x(a)) is amended by adding at the end the following new 
paragraph:
    ``(4) Homeownership and Rental Counseling Assistance.--
            ``(A) In general.--The Secretary shall make financial 
        assistance available under this paragraph to HUD-approved 
        housing counseling agencies and State housing finance agencies.
            ``(B) Qualified entities.--
        The <<NOTE: Standards. Guidelines.>>  Secretary shall establish 
        standards and guidelines for eligibility of organizations 
        (including governmental and nonprofit organizations) to receive 
        assistance under this paragraph, in accordance with subparagraph 
        (D).
            ``(C) Distribution.--Assistance made available under this 
        paragraph shall be distributed in a manner that encourages 
        efficient and successful counseling programs and that ensures 
        adequate distribution of amounts for rural areas having 
        traditionally low levels of access to such counseling services, 
        including areas with insufficient access to the Internet. In 
        distributing such assistance, the Secretary may give priority 
        consideration to entities serving areas with the highest home 
        foreclosure rates.
            ``(D) Limitation on distribution of assistance.--
                    ``(i) In general.--None of the amounts made 
                available under this paragraph shall be distributed to--

[[Page 124 STAT. 2171]]

                          ``(I) any organization which has been 
                      convicted for a violation under Federal law 
                      relating to an election for Federal office; or
                          ``(II) any organization which employs 
                      applicable individuals.
                    ``(ii) Definition of applicable individuals.--In 
                this subparagraph, the term `applicable individual' 
                means an individual who--
                          ``(I) is--
                                    ``(aa) employed by the organization 
                                in a permanent or temporary capacity;
                                    ``(bb) contracted or retained by the 
                                organization; or
                                    ``(cc) acting on behalf of, or with 
                                the express or apparent authority of, 
                                the organization; and
                          ``(II) has been convicted for a violation 
                      under Federal law relating to an election for 
                      Federal office.
            ``(E) Grantmaking process.--In making assistance available 
        under this paragraph, the Secretary shall consider appropriate 
        ways of streamlining and improving the processes for grant 
        application, review, approval, and award.
            ``(F) Authorization of appropriations.--There are authorized 
        to be appropriated $45,000,000 for each of fiscal years 2009 
        through 2012 for--
                    ``(i) the operations of the Office of Housing 
                Counseling of the Department of Housing and Urban 
                Development;
                    ``(ii) the responsibilities of the Director of 
                Housing Counseling under paragraphs (2) through (5) of 
                subsection (g); and
                    ``(iii) assistance pursuant to this paragraph for 
                entities providing homeownership and rental 
                counseling.''.
SEC. 1445. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD 
                          PROGRAMS.

    Section 106(e) of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x(e)) is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(1) Requirement for assistance.--An organization may not 
        receive assistance for counseling activities under subsection 
        (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or 
        under section 101(e), unless the organization, or the 
        individuals through which the organization provides such 
        counseling, has been certified by the Secretary under this 
        subsection as competent to provide such counseling.'';
            (2) in paragraph (2)--
                    (A) by inserting ``and for certifying 
                organizations'' before the period at the end of the 
                first sentence; and
                    (B) in the second sentence by striking ``for 
                certification'' and inserting ``, for certification of 
                an organization, that each individual through which the 
                organization provides counseling shall demonstrate, and, 
                for certification of an individual,'';
            (3) in paragraph (3), by inserting ``organizations and'' 
        before ``individuals'';
            (4) by redesignating paragraph (3) as paragraph (5); and

[[Page 124 STAT. 2172]]

            (5) by inserting after paragraph (2) the following new 
        paragraphs:
            ``(3) Requirement under hud programs.--Any homeownership 
        counseling or rental housing counseling (as such terms are 
        defined in subsection (g)(1)) required under, or provided in 
        connection with, any program administered by the Department of 
        Housing and Urban Development shall be provided only by 
        organizations or counselors certified by the Secretary under 
        this subsection as competent to provide such counseling.
            ``(4) Outreach.--The Secretary shall take such actions as 
        the Secretary considers appropriate to ensure that individuals 
        and organizations providing homeownership or rental housing 
        counseling are aware of the certification requirements and 
        standards of this subsection and of the training and 
        certification programs under subsection (f).''.
SEC. 1446. STUDY OF DEFAULTS AND FORECLOSURES.

    The Secretary of Housing and Urban Development shall conduct an 
extensive study of the root causes of default and foreclosure of home 
loans, using as much empirical data as are available. The study shall 
also examine the role of escrow accounts in helping prime and nonprime 
borrowers to avoid defaults and foreclosures, and the role of computer 
registries of mortgages, including those used for trading mortgage 
loans. Not later <<NOTE: Deadlines. Reports.>> than 12 months after the 
date of the enactment of this Act, the Secretary shall submit to the 
Congress a preliminary report regarding the study. Not later than 24 
months after such date of enactment, the Secretary shall submit a final 
report regarding the results of the study, which shall include any 
recommended legislation relating to the study, and recommendations for 
best practices and for a process to identify populations that need 
counseling the most.
SEC. 1447. <<NOTE: 12 USC 1701p-2.>> DEFAULT AND FORECLOSURE 
                          DATABASE.

    (a) Establishment.--The <<NOTE: Public information.>>  Secretary of 
Housing and Urban Development and the Director of the Bureau, in 
consultation with the Federal agencies responsible for regulation of 
banking and financial institutions involved in residential mortgage 
lending and servicing, shall establish and maintain a database of 
information on foreclosures and defaults on mortgage loans for one- to 
four-unit residential properties and shall make such information 
publicly available, subject to subsection (e).

    (b) Census Tract Data.--Information in the database may be 
collected, aggregated, and made available on a census tract basis.
    (c) Requirements.--Information collected and made available through 
the database shall include--
            (1) the number and percentage of such mortgage loans that 
        are delinquent by more than 30 days;
            (2) the number and percentage of such mortgage loans that 
        are delinquent by more than 90 days;
            (3) the number and percentage of such properties that are 
        real estate-owned;
            (4) number and percentage of such mortgage loans that are in 
        the foreclosure process;
            (5) the number and percentage of such mortgage loans that 
        have an outstanding principal obligation amount that is greater 
        than the value of the property for which the loan was made; and

[[Page 124 STAT. 2173]]

            (6) such other information as the Secretary of Housing and 
        Urban Development and the Director of the Bureau consider 
        appropriate.

    (d) Rule of Construction.--Nothing in this section shall be 
construed to encourage discriminatory or unsound allocation of credit or 
lending policies or practices.
    (e) Privacy and Confidentiality.--In establishing and maintaining 
the database described in subsection (a), the Secretary of Housing and 
Urban Development and the Director of the Bureau shall--
            (1) be subject to the standards applicable to Federal 
        agencies for the protection of the confidentiality of personally 
        identifiable information and for data security and integrity;
            (2) implement the necessary measures to conform to the 
        standards for data integrity and security described in paragraph 
        (1); and
            (3) collect and make available information under this 
        section, in accordance with paragraphs (5) and (6) of section 
        1022(c) and the rules prescribed under such paragraphs, in order 
        to protect privacy and confidentiality.
SEC. 1448. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

    Section 106 of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x), as amended by the preceding provisions of this subtitle, 
is amended by adding at the end the following new subsection:
    ``(h) Definitions.--For purposes of this section:
            ``(1) Nonprofit organization.--The term `nonprofit 
        organization' has the meaning given such term in section 104(5) 
        of the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 12704(5)), except that subparagraph (D) of such section 
        shall not apply for purposes of this section.
            ``(2) State.--The term `State' means each of the several 
        States, the Commonwealth of Puerto Rico, the District of 
        Columbia, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, the Trust Territories 
        of the Pacific, or any other possession of the United States.
            ``(3) Unit of general local government.--The term `unit of 
        general local government' means any city, county, parish, town, 
        township, borough, village, or other general purpose political 
        subdivision of a State.
            ``(4) HUD-approved counseling agency.--The term `HUD-
        approved counseling agency' means a private or public nonprofit 
        organization that is--
                    ``(A) exempt from taxation under section 501(c) of 
                the Internal Revenue Code of 1986; and
                    ``(B) certified by the Secretary to provide housing 
                counseling services.
            ``(5) State housing finance agency.--The term `State housing 
        finance agency' means any public body, agency, or 
        instrumentality specifically created under State statute that is 
        authorised to finance activities designed to provide housing and 
        related facilities throughout an entire State through land 
        acquisition, construction, or rehabilitation.''.

[[Page 124 STAT. 2174]]

SEC. 1449. ACCOUNTABILITY AND TRANSPARENCY FOR GRANT RECIPIENTS.

    Section 106 of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x), as amended by the preceding provisions of this subtitle, 
is amended by adding at the end the following:
    ``(i) Accountability for Recipients of Covered Assistance.--
            ``(1) Tracking of funds.--The Secretary shall--
                    ``(A) develop and maintain a system to ensure that 
                any organization or entity that receives any covered 
                assistance uses all amounts of covered assistance in 
                accordance with this section, the regulations issued 
                under this section, and any requirements or conditions 
                under which such amounts were provided; and
                    ``(B) require any organization or entity, as a 
                condition of receipt of any covered assistance, to agree 
                to comply with such requirements regarding covered 
                assistance as the Secretary shall establish, which shall 
                include--
                          ``(i) <<NOTE: Reports. Records.>> appropriate 
                      periodic financial and grant activity reporting, 
                      record retention, and audit requirements for the 
                      duration of the covered assistance to the 
                      organization or entity to ensure compliance with 
                      the limitations and requirements of this section, 
                      the regulations under this section, and any 
                      requirements or conditions under which such 
                      amounts were provided; and
                          ``(ii) any other requirements that the 
                      Secretary determines are necessary to ensure 
                      appropriate administration and compliance.
            ``(2) Misuse of funds.--If any organization or entity that 
        receives any covered assistance is determined by the Secretary 
        to have used any covered assistance in a manner that is 
        materially in violation of this section, the regulations issued 
        under this section, or any requirements or conditions under 
        which such assistance was provided--
                    ``(A) 
                the <<NOTE: Deadline. Reimbursement.>> Secretary shall 
                require that, within 12 months after the determination 
                of such misuse, the organization or entity shall 
                reimburse the Secretary for such misused amounts and 
                return to the Secretary any such amounts that remain 
                unused or uncommitted for use; and
                    ``(B) such organization or entity shall be 
                ineligible, at any time after such determination, to 
                apply for or receive any further covered assistance.
        The remedies under this paragraph are in addition to any other 
        remedies that may be available under law.
            ``(3) Covered assistance.--For <<NOTE: Definition.>>  
        purposes of this subsection, the term `covered assistance' means 
        any grant or other financial assistance provided under this 
        section.''.
SEC. 1450. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION 
                          BOOKLET.

    Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2604) is amended--
            (1) in the section heading, by striking ``special'' and 
        inserting ``home buying'';
            (2) by striking subsections (a) and (b) and inserting the 
        following new subsections:

[[Page 124 STAT. 2175]]

    ``(a) Preparation and <<NOTE: Deadline.>> Distribution.--The 
Director of the Bureau of Consumer Financial Protection (hereafter in 
this section referred to as the `Director') shall prepare, at least once 
every 5 years, a booklet to help consumers applying for federally 
related mortgage loans to understand the nature and costs of real estate 
settlement services. The Director shall prepare the booklet in various 
languages and cultural styles, as the Director determines to be 
appropriate, so that the booklet is understandable and accessible to 
homebuyers of different ethnic and cultural backgrounds. The Director 
shall distribute such booklets to all lenders that make federally 
related mortgage loans. The <<NOTE: Lists.>> Director shall also 
distribute to such lenders lists, organized by location, of 
homeownership counselors certified under section 106(e) of the Housing 
and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in 
complying with the requirement under subsection (c) of this section.

    ``(b) Contents.--Each booklet shall be in such form and detail as 
the Director shall prescribe and, in addition to such other information 
as the Director may provide, shall include in plain and understandable 
language the following information:
            ``(1) A description and explanation of the nature and 
        purpose of the costs incident to a real estate settlement or a 
        federally related mortgage loan. The description and explanation 
        shall provide general information about the mortgage process as 
        well as specific information concerning, at a minimum--
                    ``(A) balloon payments;
                    ``(B) prepayment penalties;
                    ``(C) the advantages of prepayment; and
                    ``(D) the trade-off between closing costs and the 
                interest rate over the life of the loan.
            ``(2) An explanation and sample of the uniform settlement 
        statement required by section 4.
            ``(3) <<NOTE: List.>> A list and explanation of lending 
        practices, including those prohibited by the Truth in Lending 
        Act or other applicable Federal law, and of other unfair 
        practices and unreasonable or unnecessary charges to be avoided 
        by the prospective buyer with respect to a real estate 
        settlement.
            ``(4) A <<NOTE: List.>> list and explanation of questions a 
        consumer obtaining a federally related mortgage loan should ask 
        regarding the loan, including whether the consumer will have the 
        ability to repay the loan, whether the consumer sufficiently 
        shopped for the loan, whether the loan terms include prepayment 
        penalties or balloon payments, and whether the loan will benefit 
        the borrower.
            ``(5) An explanation of the right of rescission as to 
        certain transactions provided by sections 125 and 129 of the 
        Truth in Lending Act.
            ``(6) A brief explanation of the nature of a variable rate 
        mortgage and a reference to the booklet entitled `Consumer 
        Handbook on Adjustable Rate Mortgages', published by the 
        Director, or to any suitable substitute of such booklet that the 
        Director may subsequently adopt pursuant to such section.
            ``(7) A brief explanation of the nature of a home equity 
        line of credit and a reference to the pamphlet required to be 
        provided under section 127A of the Truth in Lending Act.
            ``(8) Information about homeownership counseling services 
        made available pursuant to section 106(a)(4) of the Housing

[[Page 124 STAT. 2176]]

        and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a 
        recommendation that the consumer use such services, and 
        notification that a list of certified providers of homeownership 
        counseling in the area, and their contact information, is 
        available.
            ``(9) An explanation of the nature and purpose of escrow 
        accounts when used in connection with loans secured by 
        residential real estate and the requirements under section 10 of 
        this Act regarding such accounts.
            ``(10) An explanation of the choices available to buyers of 
        residential real estate in selecting persons to provide 
        necessary services incidental to a real estate settlement.
            ``(11) An explanation of a consumer's responsibilities, 
        liabilities, and obligations in a mortgage transaction.
            ``(12) An explanation of the nature and purpose of real 
        estate appraisals, including the difference between an appraisal 
        and a home inspection.
            ``(13) Notice that the Office of Housing of the Department 
        of Housing and Urban Development has made publicly available a 
        brochure regarding loan fraud and a World Wide Web address and 
        toll-free telephone number for obtaining the brochure.

The booklet prepared pursuant to this section shall take into 
consideration differences in real estate settlement procedures that may 
exist among the several States and territories of the United States and 
among separate political subdivisions within the same State and 
territory.'';
            (3) in subsection (c), by inserting at the end the following 
        new sentence: ``Each lender shall also include with the booklet 
        a reasonably complete or updated list of homeownership 
        counselors who are certified pursuant to section 106(e) of the 
        Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) 
        and located in the area of the lender.''; and
            (4) in subsection (d), by inserting after the period at the 
        end of the first sentence the following: ``The lender shall 
        provide the booklet in the version that is most appropriate for 
        the person receiving it.''.
SEC. 1451. <<NOTE: 12 USC 1701x-1.>> HOME INSPECTION COUNSELING.

    (a) Public Outreach.--
            (1) In general.--The Secretary of Housing and Urban 
        Development (in this section referred to as the ``Secretary'') 
        shall take such actions as may be necessary to inform potential 
        homebuyers of the availability and importance of obtaining an 
        independent home inspection. Such actions shall include--
                    (A) publication of the HUD/FHA form HUD 92564-CN 
                entitled ``For Your Protection: Get a Home Inspection'', 
                in both English and Spanish languages;
                    (B) publication of the HUD/FHA booklet entitled 
                ``For Your Protection: Get a Home Inspection'', in both 
                English and Spanish languages;
                    (C) development and publication of a HUD booklet 
                entitled ``For Your Protection--Get a Home Inspection'' 
                that does not reference FHA-insured homes, in both 
                English and Spanish languages; and
                    (D) publication of the HUD document entitled ``Ten 
                Important Questions To Ask Your Home Inspector'', in 
                both English and Spanish languages.

[[Page 124 STAT. 2177]]

            (2) Availability.-- <<NOTE: Public information.>> The 
        Secretary shall make the materials specified in paragraph (1) 
        available for electronic access and, where appropriate, inform 
        potential homebuyers of such availability through home purchase 
        counseling public service announcements and toll-free telephone 
        hotlines of the Department of Housing and Urban Development. The 
        Secretary shall give special emphasis to reaching first-time and 
        low-income homebuyers with these materials and efforts.
            (3) Updating.--The Secretary may periodically update and 
        revise such materials, as the Secretary determines to be 
        appropriate.

    (b) Requirement for FHA-approved Lenders.--Each mortgagee approved 
for participation in the mortgage insurance programs under title II of 
the National Housing Act shall provide prospective homebuyers, at first 
contact, whether upon pre-qualification, pre-approval, or initial 
application, the materials specified in subparagraphs (A), (B), and (D) 
of subsection (a)(1).
    (c) Requirements for HUD-approved Counseling Agencies.--Each 
counseling agency certified pursuant by the Secretary to provide housing 
counseling services shall provide each of their clients, as part of the 
home purchase counseling process, the materials specified in 
subparagraphs (C) and (D) of subsection (a)(1).
    (d) Training.--Training provided the Department of Housing and Urban 
Development for housing counseling agencies, whether such training is 
provided directly by the Department or otherwise, shall include--
            (1) providing information on counseling potential homebuyers 
        of the availability and importance of getting an independent 
        home inspection;
            (2) providing information about the home inspection process, 
        including the reasons for specific inspections such as radon and 
        lead-based paint testing;
            (3) providing information about advising potential 
        homebuyers on how to locate and select a qualified home 
        inspector; and
            (4) review of home inspection public outreach materials of 
        the Department.
SEC. 1452. <<NOTE: 42 USC 8108.>> WARNINGS TO HOMEOWNERS OF 
                          FORECLOSURE RESCUE SCAMS.

    (a) Assistance to NRC.-- <<NOTE: Notice.>> Notwithstanding any other 
provision of law, of any amounts made available for any fiscal year 
pursuant to section 106(a)(4)(F) of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x(a)(4)(F)) (as added by section 1444), 10 
percent shall be used only for assistance to the Neighborhood 
Reinvestment Corporation for activities, in consultation with servicers 
of residential mortgage loans, to provide notice to borrowers under such 
loans who are delinquent with respect to payments due under such loans 
that makes such borrowers aware of the dangers of fraudulent activities 
associated with foreclosure.

    (b) Notice.--The Neighborhood Reinvestment Corporation, in 
consultation with servicers of residential mortgage loans, shall use the 
amounts provided pursuant to subsection (a) to carry out activities to 
inform borrowers under residential mortgage loans--
            (1) that the foreclosure process is complex and can be 
        confusing;

[[Page 124 STAT. 2178]]

            (2) that the borrower may be approached during the 
        foreclosure process by persons regarding saving their home and 
        they should use caution in any such dealings;
            (3) that there are Federal Government and nonprofit agencies 
        that may provide information about the foreclosure process, 
        including the Department of Housing and Urban Development;
            (4) that they should contact their lender immediately, 
        contact the Department of Housing and Urban Development to find 
        a housing counseling agency certified by the Department to 
        assist in avoiding foreclosure, or visit the Department's 
        website regarding tips for avoiding foreclosure; and
            (5) of the telephone number of the loan servicer or 
        successor, the telephone number of the Department of Housing and 
        Urban Development housing counseling line, and the Uniform 
        Resource Locators (URLs) for the Department of Housing and Urban 
        Development Web sites for housing counseling and for tips for 
        avoiding foreclosure.

                     Subtitle E--Mortgage Servicing

SEC. 1461. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN 
                          CONSUMER CREDIT TRANSACTIONS.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129C (as added by 
section 1411) the following new section:
``Sec. 129D. <<NOTE: 15 USC 1639d.>> Escrow or impound accounts 
                  relating to certain consumer credit transactions

    ``(a) In General.--Except as provided in subsection (b), (c), (d), 
or (e), a creditor, in connection with the consummation of a consumer 
credit transaction secured by a first lien on the principal dwelling of 
the consumer, other than a consumer credit transaction under an open end 
credit plan or a reverse mortgage, shall establish, before the 
consummation of such transaction, an escrow or impound account for the 
payment of taxes and hazard insurance, and, if applicable, flood 
insurance, mortgage insurance, ground rents, and any other required 
periodic payments or premiums with respect to the property or the loan 
terms, as provided in, and in accordance with, this section.
    ``(b) When Required.--No impound, trust, or other type of account 
for the payment of property taxes, insurance premiums, or other purposes 
relating to the property may be required as a condition of a real 
property sale contract or a loan secured by a first deed of trust or 
mortgage on the principal dwelling of the consumer, other than a 
consumer credit transaction under an open end credit plan or a reverse 
mortgage, except when--
            ``(1) any such impound, trust, or other type of escrow or 
        impound account for such purposes is required by Federal or 
        State law;
            ``(2) a loan is made, guaranteed, or insured by a State or 
        Federal governmental lending or insuring agency;
            ``(3) the transaction is secured by a first mortgage or lien 
        on the consumer's principal dwelling having an original 
        principal obligation amount that--
                    ``(A) does not exceed the amount of the maximum 
                limitation on the original principal obligation of 
                mortgage

[[Page 124 STAT. 2179]]

                in effect for a residence of the applicable size, as of 
                the date such interest rate set, pursuant to the sixth 
                sentence of section 305(a)(2) the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), and the 
                annual percentage rate will exceed the average prime 
                offer rate as defined in section 129C by 1.5 or more 
                percentage points; or
                    ``(B) exceeds the amount of the maximum limitation 
                on the original principal obligation of mortgage in 
                effect for a residence of the applicable size, as of the 
                date such interest rate set, pursuant to the sixth 
                sentence of section 305(a)(2) the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), and the 
                annual percentage rate will exceed the average prime 
                offer rate as defined in section 129C by 2.5 or more 
                percentage points; or
            ``(4) so required pursuant to regulation.

    ``(c) Exemptions.--The Board may, by regulation, exempt from the 
requirements of subsection (a) a creditor that--
            ``(1) operates predominantly in rural or underserved areas;
            ``(2) together with all affiliates, has total annual 
        mortgage loan originations that do not exceed a limit set by the 
        Board;
            ``(3) retains its mortgage loan originations in portfolio; 
        and
            ``(4) meets any asset size threshold and any other criteria 
        the Board may establish, consistent with the purposes of this 
        subtitle.

    ``(d) Duration of Mandatory Escrow or Impound Account.--An escrow or 
impound account established pursuant to subsection (b) shall remain in 
existence for a minimum period of 5 years, beginning with the date of 
the consummation of the loan, unless and until--
            ``(1) such borrower has sufficient equity in the dwelling 
        securing the consumer credit transaction so as to no longer be 
        required to maintain private mortgage insurance;
            ``(2) such borrower is delinquent;
            ``(3) such borrower otherwise has not complied with the 
        legal obligation, as established by rule; or
            ``(4) the underlying mortgage establishing the account is 
        terminated.

    ``(e) Limited Exemptions for Loans Secured by Shares in a 
Cooperative or in Which an Association Must Maintain a Master Insurance 
Policy.--Escrow accounts need not be established for loans secured by 
shares in a cooperative. Insurance premiums need not be included in 
escrow accounts for loans secured by dwellings or units, where the 
borrower must join an association as a condition of ownership, and that 
association has an obligation to the dwelling or unit owners to maintain 
a master policy insuring the dwellings or units.
    ``(f) Clarification on Escrow Accounts for Loans Not Meeting 
Statutory Test.--For mortgages not covered by the requirements of 
subsection (b), no provision of this section shall be construed as 
precluding the establishment of an impound, trust, or other type of 
account for the payment of property taxes, insurance premiums, or other 
purposes relating to the property--
            ``(1) on terms mutually agreeable to the parties to the 
        loan;
            ``(2) at the discretion of the lender or servicer, as 
        provided by the contract between the lender or servicer and the 
        borrower; or

[[Page 124 STAT. 2180]]

            ``(3) pursuant to the requirements for the escrowing of 
        flood insurance payments for regulated lending institutions in 
        section 102(d) of the Flood Disaster Protection Act of 1973.

    ``(g) Administration of Mandatory Escrow or Impound Accounts.--
            ``(1) In general.--Except as may otherwise be provided for 
        in this title or in regulations prescribed by the Board, escrow 
        or impound accounts established pursuant to subsection (b) shall 
        be established in a federally insured depository institution or 
        credit union.
            ``(2) Administration.--Except as provided in this section or 
        regulations prescribed under this section, an escrow or impound 
        account subject to this section shall be administered in 
        accordance with--
                    ``(A) the Real Estate Settlement Procedures Act of 
                1974 and regulations prescribed under such Act;
                    ``(B) the Flood Disaster Protection Act of 1973 and 
                regulations prescribed under such Act; and
                    ``(C) the law of the State, if applicable, where the 
                real property securing the consumer credit transaction 
                is located.
            ``(3) Applicability of payment of interest.--If prescribed 
        by applicable State or Federal law, each creditor shall pay 
        interest to the consumer on the amount held in any impound, 
        trust, or escrow account that is subject to this section in the 
        manner as prescribed by that applicable State or Federal law.
            ``(4) Penalty coordination with respa.--Any action or 
        omission on the part of any person which constitutes a violation 
        of the Real Estate Settlement Procedures Act of 1974 or any 
        regulation prescribed under such Act for which the person has 
        paid any fine, civil money penalty, or other damages shall not 
        give rise to any additional fine, civil money penalty, or other 
        damages under this section, unless the action or omission also 
        constitutes a direct violation of this section.

    ``(h) Disclosures Relating to Mandatory Escrow or Impound Account.-- 
<<NOTE: Notice. Deadline. Regulations.>> In the case of any impound, 
trust, or escrow account that is required under subsection (b), the 
creditor shall disclose by written notice to the consumer at least 3 
business days before the consummation of the consumer credit transaction 
giving rise to such account or in accordance with timeframes established 
in prescribed regulations the following information:
            ``(1) The fact that an escrow or impound account will be 
        established at consummation of the transaction.
            ``(2) The amount required at closing to initially fund the 
        escrow or impound account.
            ``(3) The amount, in the initial year after the consummation 
        of the transaction, of the estimated taxes and hazard insurance, 
        including flood insurance, if applicable, and any other required 
        periodic payments or premiums that reflects, as appropriate, 
        either the taxable assessed value of the real property securing 
        the transaction, including the value of any improvements on the 
        property or to be constructed on the property (whether or not 
        such construction will be financed from the proceeds of the 
        transaction) or the replacement costs of the property.
            ``(4) The estimated monthly amount payable to be escrowed 
        for taxes, hazard insurance (including flood insurance, if

[[Page 124 STAT. 2181]]

        applicable) and any other required periodic payments or 
        premiums.
            ``(5) The fact that, if the consumer chooses to terminate 
        the account in the future, the consumer will become responsible 
        for the payment of all taxes, hazard insurance, and flood 
        insurance, if applicable, as well as any other required periodic 
        payments or premiums on the property unless a new escrow or 
        impound account is established.
            ``(6) Such other information as the Board determines 
        necessary for the protection of the consumer.

    ``(i) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Flood insurance.--The term `flood insurance' means 
        flood insurance coverage provided under the national flood 
        insurance program pursuant to the National Flood Insurance Act 
        of 1968.
            ``(2) Hazard insurance.--The term `hazard insurance' shall 
        have the same meaning as provided for `hazard insurance', 
        `casualty insurance', `homeowner's insurance', or other similar 
        term under the law of the State where the real property securing 
        the consumer credit transaction is located.''.

    (b) <<NOTE: 15 USC 1639d note.>>  Exemptions and Modifications.--The 
Board may prescribe rules that revise, add to, or subtract from the 
criteria of section 129D(b) of the Truth in Lending Act if the Board 
determines that such rules are in the interest of consumers and in the 
public interest.

    (c) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 129C (as added by section 1411) the following new item:

``129D. Escrow or impound accounts relating to certain consumer credit 
           transactions.''.

SEC. 1462. <<NOTE: 15 USC 1639d.>> DISCLOSURE NOTICE REQUIRED FOR 
                          CONSUMERS WHO WAIVE ESCROW SERVICES.

    Section 129D of the Truth in Lending Act (as added by section 1461) 
is amended by adding at the end the following new subsection:
    ``(j) Disclosure Notice Required for Consumers Who Waive Escrow 
Services.--
            ``(1) In general.--If--
                    ``(A) an impound, trust, or other type of account 
                for the payment of property taxes, insurance premiums, 
                or other purposes relating to real property securing a 
                consumer credit transaction is not established in 
                connection with the transaction; or
                    ``(B) a consumer chooses, and provides written 
                notice to the creditor or servicer of such choice, at 
                any time after such an account is established in 
                connection with any such transaction and in accordance 
                with any statute, regulation, or contractual agreement, 
                to close such account,
        the creditor or servicer shall provide a timely and clearly 
        written disclosure to the consumer that advises the consumer of 
        the responsibilities of the consumer and implications for the 
        consumer in the absence of any such account.
            ``(2) Disclosure requirements.--Any disclosure provided to a 
        consumer under paragraph (1) shall include the following:

[[Page 124 STAT. 2182]]

                    ``(A) Information concerning any applicable fees or 
                costs associated with either the non-establishment of 
                any such account at the time of the transaction, or any 
                subsequent closure of any such account.
                    ``(B) A clear and prominent statement that the 
                consumer is responsible for personally and directly 
                paying the non-escrowed items, in addition to paying the 
                mortgage loan payment, in the absence of any such 
                account, and the fact that the costs for taxes, 
                insurance, and related fees can be substantial.
                    ``(C) A clear explanation of the consequences of any 
                failure to pay non-escrowed items, including the 
                possible requirement for the forced placement of 
                insurance by the creditor or servicer and the 
                potentially higher cost (including any potential 
                commission payments to the servicer) or reduced coverage 
                for the consumer in the event of any such creditor-
                placed insurance.
                    ``(D) Such other information as the Board determines 
                necessary for the protection of the consumer.''.
SEC. 1463. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 
                          AMENDMENTS.

    (a) Servicer Prohibitions.--Section 6 of the Real Estate Settlement 
Procedures Act of 1974 (12 U.S.C. 2605) is amended by adding at the end 
the following new subsections:
    ``(k) Servicer Prohibitions.--
            ``(1) In general.--A servicer of a federally related 
        mortgage shall not--
                    ``(A) obtain force-placed hazard insurance unless 
                there is a reasonable basis to believe the borrower has 
                failed to comply with the loan contract's requirements 
                to maintain property insurance;
                    ``(B) charge fees for responding to valid qualified 
                written requests (as defined in regulations which the 
                Bureau of Consumer Financial Protection shall prescribe) 
                under this section;
                    ``(C) fail to take timely action to respond to a 
                borrower's requests to correct errors relating to 
                allocation of payments, final balances for purposes of 
                paying off the loan, or avoiding foreclosure, or other 
                standard servicer's duties;
                    ``(D) <<NOTE: Deadline.>> fail to respond within 10 
                business days to a request from a borrower to provide 
                the identity, address, and other relevant contact 
                information about the owner or assignee of the loan; or
                    ``(E) fail to comply with any other obligation found 
                by the Bureau of Consumer Financial Protection, by 
                regulation, to be appropriate to carry out the consumer 
                protection purposes of this Act.
            ``(2) Force-placed insurance defined.--For purposes of this 
        subsection and subsections (l) and (m), the term `force-placed 
        insurance' means hazard insurance coverage obtained by a 
        servicer of a federally related mortgage when the borrower has 
        failed to maintain or renew hazard insurance on such property as 
        required of the borrower under the terms of the mortgage.

    ``(l) Requirements for Force-placed Insurance.--A servicer of a 
federally related mortgage shall not be construed as having

[[Page 124 STAT. 2183]]

a reasonable basis for obtaining force-placed insurance unless the 
requirements of this subsection have been met.
            ``(1) Written notices to borrower.--A servicer may not 
        impose any charge on any borrower for force-placed insurance 
        with respect to any property securing a federally related 
        mortgage unless--
                    ``(A) the servicer has sent, by first-class mail, a 
                written notice to the borrower containing--
                          ``(i) a reminder of the borrower's obligation 
                      to maintain hazard insurance on the property 
                      securing the federally related mortgage;
                          ``(ii) a statement that the servicer does not 
                      have evidence of insurance coverage of such 
                      property;
                          ``(iii) a clear and conspicuous statement of 
                      the procedures by which the borrower may 
                      demonstrate that the borrower already has 
                      insurance coverage; and
                          ``(iv) a statement that the servicer may 
                      obtain such coverage at the borrower's expense if 
                      the borrower does not provide such demonstration 
                      of the borrower's existing coverage in a timely 
                      manner;
                    ``(B) <<NOTE: Deadline.>> the servicer has sent, by 
                first-class mail, a second written notice, at least 30 
                days after the mailing of the notice under subparagraph 
                (A) that contains all the information described in each 
                clause of such subparagraph; and
                    ``(C) <<NOTE: Time period.>> the servicer has not 
                received from the borrower any demonstration of hazard 
                insurance coverage for the property securing the 
                mortgage by the end of the 15-day period beginning on 
                the date the notice under subparagraph (B) was sent by 
                the servicer.
            ``(2) Sufficiency of demonstration.--A servicer of a 
        federally related mortgage shall accept any reasonable form of 
        written confirmation from a borrower of existing insurance 
        coverage, which shall include the existing insurance policy 
        number along with the identity of, and contact information for, 
        the insurance company or agent, or as otherwise required by the 
        Bureau of Consumer Financial Protection.
            ``(3) Termination of force-placed insurance.-- 
        <<NOTE: Deadline.>> Within 15 days of the receipt by a servicer 
        of confirmation of a borrower's existing insurance coverage, the 
        servicer shall--
                    ``(A) terminate the force-placed insurance; and
                    ``(B) refund to the consumer all force-placed 
                insurance premiums paid by the borrower during any 
                period during which the borrower's insurance coverage 
                and the force-placed insurance coverage were each in 
                effect, and any related fees charged to the consumer's 
                account with respect to the force-placed insurance 
                during such period.
            ``(4) Clarification with respect to flood disaster 
        protection act.--No provision of this section shall be construed 
        as prohibiting a servicer from providing simultaneous or 
        concurrent notice of a lack of flood insurance pursuant to 
        section 102(e) of the Flood Disaster Protection Act of 1973.

    ``(m) Limitations on Force-placed Insurance Charges.--All charges, 
apart from charges subject to State regulation as the business of 
insurance, related to force-placed insurance imposed on the borrower by 
or through the servicer shall be bona fide and reasonable.''.

[[Page 124 STAT. 2184]]

    (b) Increase in Penalty Amounts.--Section 6(f) of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended--
            (1) in paragraphs (1)(B) and (2)(B), by striking ``$1,000'' 
        each place such term appears and inserting ``$2,000''; and
            (2) in paragraph (2)(B)(i), by striking ``$500,000'' and 
        inserting ``$1,000,000''.

    (c) Decrease in Response Times.--Section 6(e) of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended--
            (1) in paragraph (1)(A), by striking ``20 days'' and 
        inserting ``5 days'';
            (2) in paragraph (2), by striking ``60 days'' and inserting 
        ``30 days''; and
            (3) by adding at the end the following new paragraph:
            ``(4) Limited extension of response time.-- 
        <<NOTE: Deadline. Notification.>> The 30-day period described in 
        paragraph (2) may be extended for not more than 15 days if, 
        before the end of such 30-day period, the servicer notifies the 
        borrower of the extension and the reasons for the delay in 
        responding.''.

    (d) Prompt Refund of Escrow Accounts Upon Payoff.--Section 6(g) of 
the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(g)) is 
amended by adding at the end the following new 
sentence: <<NOTE: Deadline.>> ``Any balance in any such account that is 
within the servicer's control at the time the loan is paid off shall be 
promptly returned to the borrower within 20 business days or credited to 
a similar account for a new mortgage loan to the borrower with the same 
lender.''.
SEC. 1464. TRUTH IN LENDING ACT AMENDMENTS.

    (a) Requirements for Prompt Crediting of Home Loan Payments.--
Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
amended by inserting after section 129E (as added by section 1472) the 
following new section:
``Sec. 129F. <<NOTE: 15 USC 1639f.>> Requirements for prompt 
                  crediting of home loan payments

    ``(a) In General.--In connection with a consumer credit transaction 
secured by a consumer's principal dwelling, no servicer shall fail to 
credit a payment to the consumer's loan account as of the date of 
receipt, except when a delay in crediting does not result in any charge 
to the consumer or in the reporting of negative information to a 
consumer reporting agency, except as required in subsection (b).
    ``(b) Exception.--If a servicer specifies in writing requirements 
for the consumer to follow in making payments, but accepts a payment 
that does not conform to the requirements, the servicer shall credit the 
payment as of 5 days after receipt.''.
    (b) Requests for Payoff Amounts.--Chapter 2 of the Truth in Lending 
Act (15 U.S.C. 1631 et seq.), as amended by this title, is amended by 
inserting after section 129F (as added by subsection (a)) the following 
new section:
``Sec. 129G. <<NOTE: 15 USC 1639g.>>  Requests for payoff amounts 
                  of home loan

     <<NOTE: Deadline.>> ``A creditor or servicer of a home loan shall 
send an accurate payoff balance within a reasonable time, but in no case 
more

[[Page 124 STAT. 2185]]

than 7 business days, after the receipt of a written request for such 
balance from or on behalf of the borrower.''.
SEC. 1465. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.

    Section 128(b) of the Truth in Lending Act (15 U.S.C. 1638(b)) is 
amended by adding at the end the following new paragraph:
            ``(4) Repayment analysis required to include escrow 
        payments.--
                    ``(A) In general.--In the case of any consumer 
                credit transaction secured by a first mortgage or lien 
                on the principal dwelling of the consumer, other than a 
                consumer credit transaction under an open end credit 
                plan or a reverse mortgage, for which an impound, trust, 
                or other type of account has been or will be established 
                in connection with the transaction for the payment of 
                property taxes, hazard and flood (if any) insurance 
                premiums, or other periodic payments or premiums with 
                respect to the property, the information required to be 
                provided under subsection (a) with respect to the 
                number, amount, and due dates or period of payments 
                scheduled to repay the total of payments shall take into 
                account the amount of any monthly payment to such 
                account for each such repayment in accordance with 
                section 10(a)(2) of the Real Estate Settlement 
                Procedures Act of 1974.
                    ``(B) Assessment value.--The amount taken into 
                account under subparagraph (A) for the payment of 
                property taxes, hazard and flood (if any) insurance 
                premiums, or other periodic payments or premiums with 
                respect to the property shall reflect the taxable 
                assessed value of the real property securing the 
                transaction after the consummation of the transaction, 
                including the value of any improvements on the property 
                or to be constructed on the property (whether or not 
                such construction will be financed from the proceeds of 
                the transaction), if known, and the replacement costs of 
                the property for hazard insurance, in the initial year 
                after the transaction.''.

                    Subtitle F--Appraisal Activities

SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.

    Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
amended by inserting after 129G (as added by section 1464(b)) the 
following new section:
``Sec. 129H. <<NOTE: 15 USC 1639h.>> Property appraisal 
                  requirements

    ``(a) In General.--A creditor may not extend credit in the form of a 
higher-risk mortgage to any consumer without first obtaining a written 
appraisal of the property to be mortgaged prepared in accordance with 
the requirements of this section.
    ``(b) Appraisal Requirements.--
            ``(1) Physical property visit.--Subject to the rules 
        prescribed under paragraph (4), an appraisal of property to be 
        secured by a higher-risk mortgage does not meet the requirement 
        of this section unless it is performed by a certified or 
        licensed appraiser who conducts a physical property visit of the 
        interior of the mortgaged property.
            ``(2) Second appraisal under certain circumstances.--

[[Page 124 STAT. 2186]]

                    ``(A) In general.--If the purpose of a higher-risk 
                mortgage is to finance the purchase or acquisition of 
                the mortgaged property from a person within 180 days of 
                the purchase or acquisition of such property by that 
                person at a price that was lower than the current sale 
                price of the property, the creditor shall obtain a 
                second appraisal from a different certified or licensed 
                appraiser. The second appraisal shall include an 
                analysis of the difference in sale prices, changes in 
                market conditions, and any improvements made to the 
                property between the date of the previous sale and the 
                current sale.
                    ``(B) No cost to applicant.--The cost of any second 
                appraisal required under subparagraph (A) may not be 
                charged to the applicant.
            ``(3) Certified or licensed appraiser defined.--For purposes 
        of this section, the term `certified or licensed appraiser' 
        means a person who--
                    ``(A) is, at a minimum, certified or licensed by the 
                State in which the property to be appraised is located; 
                and
                    ``(B) performs each appraisal in conformity with the 
                Uniform Standards of Professional Appraisal Practice and 
                title XI of the Financial Institutions Reform, Recovery, 
                and Enforcement Act of 1989, and the regulations 
                prescribed under such title, as in effect on the date of 
                the appraisal.
            ``(4) Regulations.--
                    ``(A) In general.--The Board, the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, the 
                National Credit Union Administration Board, the Federal 
                Housing Finance Agency, and the Bureau shall jointly 
                prescribe regulations to implement this section.
                    ``(B) Exemption.--The agencies listed in 
                subparagraph (A) may jointly exempt, by rule, a class of 
                loans from the requirements of this subsection or 
                subsection (a) if the agencies determine that the 
                exemption is in the public interest and promotes the 
                safety and soundness of creditors.

    ``(c) Free Copy of Appraisal.-- <<NOTE: Deadline.>> A creditor shall 
provide 1 copy of each appraisal conducted in accordance with this 
section in connection with a higher-risk mortgage to the applicant 
without charge, and at least 3 days prior to the transaction closing 
date.

    ``(d) Consumer Notification.--At the time of the initial mortgage 
application, the applicant shall be provided with a statement by the 
creditor that any appraisal prepared for the mortgage is for the sole 
use of the creditor, and that the applicant may choose to have a 
separate appraisal conducted at the expense of the applicant.
    ``(e) Violations.--In addition to any other liability to any person 
under this title, a creditor found to have willfully failed to obtain an 
appraisal as required in this section shall be liable to the applicant 
or borrower for the sum of $2,000.
    ``(f) Higher-risk Mortgage Defined.--For purposes of this section, 
the term `higher-risk mortgage' means a residential mortgage loan, other 
than a reverse mortgage loan that is a qualified mortgage, as defined in 
section 129C, secured by a principal dwelling--

[[Page 124 STAT. 2187]]

            ``(1) that is not a qualified mortgage, as defined in 
        section 129C; and
            ``(2) with an annual percentage rate that exceeds the 
        average prime offer rate for a comparable transaction, as 
        defined in section 129C, as of the date the interest rate is 
        set--
                    ``(A) by 1.5 or more percentage points, in the case 
                of a first lien residential mortgage loan having an 
                original principal obligation amount that does not 
                exceed the amount of the maximum limitation on the 
                original principal obligation of mortgage in effect for 
                a residence of the applicable size, as of the date of 
                such interest rate set, pursuant to the sixth sentence 
                of section 305(a)(2) the Federal Home Loan Mortgage 
                Corporation Act (12 U.S.C. 1454(a)(2));
                    ``(B) by 2.5 or more percentage points, in the case 
                of a first lien residential mortgage loan having an 
                original principal obligation amount that exceeds the 
                amount of the maximum limitation on the original 
                principal obligation of mortgage in effect for a 
                residence of the applicable size, as of the date of such 
                interest rate set, pursuant to the sixth sentence of 
                section 305(a)(2) the Federal Home Loan Mortgage 
                Corporation Act (12 U.S.C. 1454(a)(2)); and
                    ``(C) by 3.5 or more percentage points for a 
                subordinate lien residential mortgage loan.''.
SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.

    (a) In General.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129D (as added by 
section 1461(a)) the following new section:
``Sec. 129E. <<NOTE: 15 USC 1639e.>> Appraisal independence 
                  requirements

    ``(a) In General.--It shall be unlawful, in extending credit or in 
providing any services for a consumer credit transaction secured by the 
principal dwelling of the consumer, to engage in any act or practice 
that violates appraisal independence as described in or pursuant to 
regulations prescribed under this section.
    ``(b) Appraisal Independence.--For purposes of subsection (a), acts 
or practices that violate appraisal independence shall include--
            ``(1) any appraisal of a property offered as security for 
        repayment of the consumer credit transaction that is conducted 
        in connection with such transaction in which a person with an 
        interest in the underlying transaction compensates, coerces, 
        extorts, colludes, instructs, induces, bribes, or intimidates a 
        person, appraisal management company, firm, or other entity 
        conducting or involved in an appraisal, or attempts, to 
        compensate, coerce, extort, collude, instruct, induce, bribe, or 
        intimidate such a person, for the purpose of causing the 
        appraised value assigned, under the appraisal, to the property 
        to be based on any factor other than the independent judgment of 
        the appraiser;
            ``(2) mischaracterizing, or suborning any 
        mischaracterization of, the appraised value of the property 
        securing the extension of the credit;
            ``(3) seeking to influence an appraiser or otherwise to 
        encourage a targeted value in order to facilitate the making or 
        pricing of the transaction; and

[[Page 124 STAT. 2188]]

            ``(4) withholding or threatening to withhold timely payment 
        for an appraisal report or for appraisal services rendered when 
        the appraisal report or services are provided for in accordance 
        with the contract between the parties.

    ``(c) Exceptions.--The requirements of subsection (b) shall not be 
construed as prohibiting a mortgage lender, mortgage broker, mortgage 
banker, real estate broker, appraisal management company, employee of an 
appraisal management company, consumer, or any other person with an 
interest in a real estate transaction from asking an appraiser to 
undertake 1 or more of the following:
            ``(1) Consider additional, appropriate property information, 
        including the consideration of additional comparable properties 
        to make or support an appraisal.
            ``(2) Provide further detail, substantiation, or explanation 
        for the appraiser's value conclusion.
            ``(3) Correct errors in the appraisal report.

    ``(d) Prohibitions on Conflicts of Interest.--No certified or 
licensed appraiser conducting, and no appraisal management company 
procuring or facilitating, an appraisal in connection with a consumer 
credit transaction secured by the principal dwelling of a consumer may 
have a direct or indirect interest, financial or otherwise, in the 
property or transaction involving the appraisal.
    ``(e) Mandatory Reporting.--Any mortgage lender, mortgage broker, 
mortgage banker, real estate broker, appraisal management company, 
employee of an appraisal management company, or any other person 
involved in a real estate transaction involving an appraisal in 
connection with a consumer credit transaction secured by the principal 
dwelling of a consumer who has a reasonable basis to believe an 
appraiser is failing to comply with the Uniform Standards of 
Professional Appraisal Practice, is violating applicable laws, or is 
otherwise engaging in unethical or unprofessional conduct, shall refer 
the matter to the applicable State appraiser certifying and licensing 
agency.
    ``(f) No Extension of Credit.--In connection with a consumer credit 
transaction secured by a consumer's principal dwelling, a creditor who 
knows, at or before loan consummation, of a violation of the appraisal 
independence standards established in subsections (b) or (d) shall not 
extend credit based on such appraisal unless the creditor documents that 
the creditor has acted with reasonable diligence to determine that the 
appraisal does not materially misstate or misrepresent the value of such 
dwelling.
    ``(g) Rules and Interpretive Guidelines.--
            ``(1) In general.--Except as provided under paragraph (2), 
        the Board, the Comptroller of the Currency, the Federal Deposit 
        Insurance Corporation, the National Credit Union Administration 
        Board, the Federal Housing Finance Agency, and the Bureau may 
        jointly issue rules, interpretive guidelines, and general 
        statements of policy with respect to acts or practices that 
        violate appraisal independence in the provision of mortgage 
        lending services for a consumer credit transaction secured by 
        the principal dwelling of the consumer and mortgage brokerage 
        services for such a transaction, within the meaning of 
        subsections (a), (b), (c), (d), (e), (f), (h), and (i).
            ``(2) Interim final regulations.-- <<NOTE: Deadline.>> The 
        Board shall, for purposes of this section, prescribe interim 
        final regulations no later than 90 days after the date of 
        enactment of this section defining with specificity acts or 
        practices that violate

[[Page 124 STAT. 2189]]

        appraisal independence in the provision of mortgage lending 
        services for a consumer credit transaction secured by the 
        principal dwelling of the consumer or mortgage brokerage 
        services for such a transaction and defining any terms in this 
        section or such regulations. Rules prescribed by the Board under 
        this paragraph shall be deemed to be rules prescribed by the 
        agencies jointly under paragraph (1).

    ``(h) Appraisal Report Portability.--Consistent with the 
requirements of this section, the Board, the Comptroller of the 
Currency, the Federal Deposit Insurance Corporation, the National Credit 
Union Administration Board, the Federal Housing Finance Agency, and the 
Bureau may jointly issue regulations that address the issue of appraisal 
report portability, including regulations that ensure the portability of 
the appraisal report between lenders for a consumer credit transaction 
secured by a 1-4 unit single family residence that is the principal 
dwelling of the consumer, or mortgage brokerage services for such a 
transaction.
    ``(i) Customary and Reasonable Fee.--
            ``(1) In general.--Lenders and their agents shall compensate 
        fee appraisers at a rate that is customary and reasonable for 
        appraisal services performed in the market area of the property 
        being appraised. Evidence for such fees may be established by 
        objective third-party information, such as government agency fee 
        schedules, academic studies, and independent private sector 
        surveys. Fee studies shall exclude assignments ordered by known 
        appraisal management companies.
            ``(2) Fee appraiser definition.--For purposes of this 
        section, the term `fee appraiser' means a person who is not an 
        employee of the mortgage loan originator or appraisal management 
        company engaging the appraiser and is--
                    ``(A) a State licensed or certified appraiser who 
                receives a fee for performing an appraisal and certifies 
                that the appraisal has been prepared in accordance with 
                the Uniform Standards of Professional Appraisal 
                Practice; or
                    ``(B) a company not subject to the requirements of 
                section 1124 of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et 
                seq.) that utilizes the services of State licensed or 
                certified appraisers and receives a fee for performing 
                appraisals in accordance with the Uniform Standards of 
                Professional Appraisal Practice.
            ``(3) Exception for complex assignments.--In the case of an 
        appraisal involving a complex assignment, the customary and 
        reasonable fee may reflect the increased time, difficulty, and 
        scope of the work required for such an appraisal and include an 
        amount over and above the customary and reasonable fee for non-
        complex assignments.

    ``(j) Sunset.--Effective on the date the interim final regulations 
are promulgated pursuant to subsection (g), the Home Valuation Code of 
Conduct announced by the Federal Housing Finance Agency on December 23, 
2008, shall have no force or effect.
    ``(k) Penalties.--
            ``(1) First violation.--In addition to the enforcement 
        provisions referred to in section 130, each person who violates 
        this section shall forfeit and pay a civil penalty of not more 
        than $10,000 for each day any such violation continues.

[[Page 124 STAT. 2190]]

            ``(2) Subsequent violations.-- <<NOTE: Applicability.>> In 
        the case of any person on whom a civil penalty has been imposed 
        under paragraph (1), paragraph (1) shall be applied by 
        substituting `$20,000' for `$10,000' with respect to all 
        subsequent violations.
            ``(3) Assessment.--The agency referred to in subsection (a) 
        or (c) of section 108 with respect to any person described in 
        paragraph (1) shall assess any penalty under this subsection to 
        which such person is subject.''.

    (b) Clerical Amendment.--The table of sections for chapter 2 of the 
Truth in Lending Act is amended by inserting after the item relating to 
section 129D (as added by section 1461(c)) the following new items:

``129E. Appraisal independence requirements.
``129F. Requirements for prompt crediting of home loan payments.
``129G. Requests for payoff amounts of home loan.
``129H. Property appraisal requirements.''.

    (c) Deference.--Section 105 of the Truth in Lending Act (15 U.S.C. 
1604) is amended by adding at the end the following:
    ``(h) Deference.-- <<NOTE: Applicability.>> Notwithstanding any 
power granted to any Federal agency under this title, the deference that 
a court affords to the Bureau with respect to a determination made by 
the Bureau relating to the meaning or interpretation of any provision of 
this title, other than section 129E or 129H, shall be applied as if the 
Bureau were the only agency authorized to apply, enforce, interpret, or 
administer the provisions of this title.''.

    (d) Conforming Amendments in Title X Not Applicable to Sections 129E 
and 129H.--Notwithstanding section 1099A, the term ``Board'' in sections 
129E and 129H, as added by this subtitle, shall not be substituted by 
the term ``Bureau''.
SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FFIEC, 
                          APPRAISER INDEPENDENCE MONITORING, 
                          APPROVED APPRAISER EDUCATION, APPRAISAL 
                          MANAGEMENT COMPANIES, APPRAISER 
                          COMPLAINT HOTLINE, AUTOMATED VALUATION 
                          MODELS, AND BROKER PRICE OPINIONS.

    (a) Threshold Levels.--Section 1112(b) of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is 
amended by inserting before the period the following: ``, and receives 
concurrence from the Bureau of Consumer Financial Protection that such 
threshold level provides reasonable protection for consumers who 
purchase 1-4 unit single-family residences''.
    (b) Annual Report of Appraisal Subcommittee.--Section 1103(a) of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3332(a)) is amended at the end by inserting the following new 
paragraph:
            ``(5) transmit an annual report to the Congress not later 
        than June 15 of each year that describes the manner in which 
        each function assigned to the Appraisal Subcommittee has been 
        carried out during the preceding year. The report shall also 
        detail the activities of the Appraisal Subcommittee, including 
        the results of all audits of State appraiser regulatory 
        agencies, and provide an accounting of disapproved actions and 
        warnings taken in the previous year, including a description of 
        the conditions causing the disapproval and actions taken to 
        achieve compliance.''.

[[Page 124 STAT. 2191]]

    (c) Open Meetings.--Section 1104(b) of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is 
amended--
            (1) by inserting ``in public session after notice in the 
        Federal Register, but may close certain portions of these 
        meetings related to personnel and review of preliminary State 
        audit reports,'' after ``shall meet''; and
            (2) by adding after the final period the following: ``The 
        subject matter discussed in any closed or executive session 
        shall be described in the Federal Register notice of the 
        meeting.''.

    (d) Regulations.--Section 1106 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) is amended--
            (1) by inserting ``prescribe regulations in accordance with 
        chapter 5 of title 5, United States Code (commonly referred to 
        as the Administrative Procedures Act) after notice and 
        opportunity for comment,'' after ``hold hearings''; and
            (2) at the end by inserting ``Any regulations prescribed by 
        the Appraisal Subcommittee shall (unless otherwise provided in 
        this title) be limited to the following functions: temporary 
        practice, national registry, information sharing, and 
        enforcement. <<NOTE: Establishment.>>  For purposes of 
        prescribing regulations, the Appraisal Subcommittee shall 
        establish an advisory committee of industry participants, 
        including appraisers, lenders, consumer advocates, real estate 
        agents, and government agencies, and hold meetings as necessary 
        to support the development of regulations.''.

    (e) Appraisal Reviews and Complex Appraisals.--
            (1) Section 1110.--Section 1110 of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3339) is amended--
                    (A) in paragraph (1), by striking ``and'';
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by inserting after paragraph (2) the following:
            ``(3) that such appraisals shall be subject to appropriate 
        review for compliance with the Uniform Standards of Professional 
        Appraisal Practice.''.
            (2) Section 1113.--Section 1113 of the Financial 
        Institutions and Reform, Recovery, and Enforcement Act of 1989 
        (12 U.S.C. 3342) is amended by inserting before the period the 
        following: <<NOTE: Definition.>>  ``, where a complex 1-to-4 
        unit single family residential appraisal means an appraisal for 
        which the property to be appraised, the form of ownership, the 
        property characteristics, or the market conditions are 
        atypical''.

    (f) Appraisal Management Services.--
            (1) Supervision of third party providers of appraisal 
        management services.--Section 1103(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3332(a)) (as previously amended by this section) is 
        amended--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) monitor the requirements established by States--
                    ``(A) for the certification and licensing of 
                individuals who are qualified to perform appraisals in 
                connection with federally related transactions, 
                including a code of professional responsibility; and

[[Page 124 STAT. 2192]]

                    ``(B) for the registration and supervision of the 
                operations and activities of an appraisal management 
                company;''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(6) maintain a national registry of appraisal management 
        companies that either are registered with and subject to 
        supervision of a State appraiser certifying and licensing agency 
        or are operating subsidiaries of a Federally regulated financial 
        institution.''.
            (2) Appraisal management company minimum requirements.--
        Title XI of the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is amended by 
        adding at the end the following new section (and amending the 
        table of contents accordingly):
``SEC. 1124. <<NOTE: 12 USC 3353.>> APPRAISAL MANAGEMENT COMPANY 
                          MINIMUM REQUIREMENTS.

    ``(a) In General.-- 
<<NOTE: Regulations. Applicability. States.>> The Board of Governors of 
the Federal Reserve System, the Comptroller of the Currency, the Federal 
Deposit Insurance Corporation, the National Credit Union Administration 
Board, the Federal Housing Finance Agency, and the Bureau of Consumer 
Financial Protection shall jointly, by rule, establish minimum 
requirements to be applied by a State in the registration of appraisal 
management companies. Such requirements shall include a requirement that 
such companies--
            ``(1) register with and be subject to supervision by a State 
        appraiser certifying and licensing agency in each State in which 
        such company operates;
            ``(2) verify that only licensed or certified appraisers are 
        used for federally related transactions;
            ``(3) require that appraisals coordinated by an appraisal 
        management company comply with the Uniform Standards of 
        Professional Appraisal Practice; and
            ``(4) require that appraisals are conducted independently 
        and free from inappropriate influence and coercion pursuant to 
        the appraisal independence standards established under section 
        129E of the Truth in Lending Act.

    ``(b) Relation to State Law.--Nothing in this section shall be 
construed to prevent States from establishing requirements in addition 
to any rules promulgated under subsection (a).
    ``(c) Federally Regulated Financial Institutions.-- 
<<NOTE: Applicability.>> The requirements of subsection (a) shall apply 
to an appraisal management company that is a subsidiary owned and 
controlled by a financial institution and regulated by a Federal 
financial institution regulatory agency. An appraisal management company 
that is a subsidiary owned and controlled by a financial institution 
regulated by a Federal financial institution regulatory agency shall not 
be required to register with a State.

    ``(d) Registration Limitations.--An appraisal management company 
shall not be registered by a State or included on the national registry 
if such company, in whole or in part, directly or indirectly, is owned 
by any person who has had an appraiser license or certificate refused, 
denied, cancelled, surrendered in lieu of revocation, or revoked in any 
State. <<NOTE: Investigation.>>  Additionally, each person that owns 
more than 10 percent of an appraisal management company shall be of good 
moral character, as determined by the State appraiser certifying and 
licensing agency, and shall submit to a

[[Page 124 STAT. 2193]]

background investigation carried out by the State appraiser certifying 
and licensing agency.

    ``(e) Reporting.-- <<NOTE: Regulations.>> The Board of Governors of 
the Federal Reserve System, the Comptroller of the Currency, the Federal 
Deposit Insurance Corporation, the National Credit Union Administration 
Board, the Federal Housing Finance Agency, and the Bureau of Consumer 
Financial Protection shall jointly promulgate regulations for the 
reporting of the activities of appraisal management companies to the 
Appraisal Subcommittee in determining the payment of the annual registry 
fee.

    ``(f) Effective Date.--
            ``(1) In general.--No appraisal management company may 
        perform services related to a federally related transaction in a 
        State after the date that is 36 months after the date on which 
        the regulations required to be prescribed under subsection (a) 
        are prescribed in final form unless such company is registered 
        with such State or subject to oversight by a Federal financial 
        institutions regulatory agency.
            ``(2) Extension of effective date.--Subject to the approval 
        of the Council, the Appraisal Subcommittee may extend by an 
        additional 12 months the requirements for the registration and 
        supervision of appraisal management companies if it makes a 
        written finding that a State has made substantial progress in 
        establishing a State appraisal management company registration 
        and supervision system that appears to conform with the 
        provisions of this title.''.
            (3) State appraiser certifying and licensing agency 
        authority.--Section 1117 of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3346) is 
        amended by adding at the end the following: ``The duties of such 
        agency may additionally include the registration and supervision 
        of appraisal management companies and the addition of 
        information about the appraisal management company to the 
        national registry.''.
            (4) Appraisal management company definition.--Section 1121 
        of the Financial Institutions Reform, Recovery, and Enforcement 
        Act of 1989 (12 U.S.C. 3350) is amended by adding at the end the 
        following:
            ``(11) Appraisal management company.--The term `appraisal 
        management company' means, in connection with valuing properties 
        collateralizing mortgage loans or mortgages incorporated into a 
        securitization, any external third party authorized either by a 
        creditor of a consumer credit transaction secured by a 
        consumer's principal dwelling or by an underwriter of or other 
        principal in the secondary mortgage markets, that oversees a 
        network or panel of more than 15 certified or licensed 
        appraisers in a State or 25 or more nationally within a given 
        year--
                    ``(A) to recruit, select, and retain appraisers;
                    ``(B) to contract with licensed and certified 
                appraisers to perform appraisal assignments;
                    ``(C) to manage the process of having an appraisal 
                performed, including providing administrative duties 
                such as receiving appraisal orders and appraisal 
                reports, submitting completed appraisal reports to 
                creditors and underwriters, collecting fees from 
                creditors and underwriters for

[[Page 124 STAT. 2194]]

                services provided, and reimbursing appraisers for 
                services performed; or
                    ``(D) to review and verify the work of 
                appraisers.''.

    (g) State Agency Reporting Requirement.--Section 1109(a) of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3338(a)) is amended--
            (1) by striking ``and'' after the semicolon in paragraph 
        (1);
            (2) by redesignating paragraph (2) as paragraph (4); and
            (3) by inserting after paragraph (1) the following new 
        paragraphs:
            ``(2) transmit reports on the issuance and renewal of 
        licenses and certifications, sanctions, disciplinary actions, 
        license and certification revocations, and license and 
        certification suspensions on a timely basis to the national 
        registry of the Appraisal Subcommittee;
            ``(3) transmit reports on a timely basis of supervisory 
        activities involving appraisal management companies or other 
        third-party providers of appraisals and appraisal management 
        services, including investigations initiated and disciplinary 
        actions taken; and''.

    (h) Registry Fees Modified.--
            (1) In general.--Section 1109(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3338(a)) is amended--
                    (A) by amending paragraph (4) (as modified by 
                section 1473(g)) to read as follows:
            ``(4) collect--
                    ``(A) from such individuals who perform or seek to 
                perform appraisals in federally related transactions, an 
                annual registry fee of not more than $40, such fees to 
                be transmitted by the State agencies to the Council on 
                an annual basis; and
                    ``(B) from an appraisal management company that 
                either has registered with a State appraiser certifying 
                and licensing agency in accordance with this title or 
                operates as a subsidiary of a federally regulated 
                financial institution, an annual registry fee of--
                          ``(i) in the case of such a company that has 
                      been in existence for more than a year, $25 
                      multiplied by the number of appraisers working for 
                      or contracting with such company in such State 
                      during the previous year, but where such $25 
                      amount may be adjusted, up to a maximum of $50, at 
                      the discretion of the Appraisal Subcommittee, if 
                      necessary to carry out the Subcommittee's 
                      functions under this title; and
                          ``(ii) in the case of such a company that has 
                      not been in existence for more than a year, $25 
                      multiplied by an appropriate number to be 
                      determined by the Appraisal Subcommittee, and 
                      where such number will be used for determining the 
                      fee of all such companies that were not in 
                      existence for more than a year, but where such $25 
                      amount may be adjusted, up to a maximum of $50, at 
                      the discretion of the Appraisal Subcommittee, if 
                      necessary to carry out the Subcommittee's 
                      functions under this title.''; and

[[Page 124 STAT. 2195]]

                    (B) by amending the matter following paragraph (4), 
                as redesignated, to read as follows:

``Subject to the approval of the Council, the Appraisal Subcommittee may 
adjust the dollar amount of registry fees under paragraph (4)(A), up to 
a maximum of $80 per annum, as necessary to carry out its functions 
under this title. <<NOTE: Deadline.>>  The Appraisal Subcommittee shall 
consider at least once every 5 years whether to adjust the dollar amount 
of the registry fees to account for inflation. In implementing any 
change in registry fees, the Appraisal Subcommittee shall provide 
flexibility to the States for multi-year certifications and licenses 
already in place, as well as a transition period to implement the 
changes in registry fees. In establishing the amount of the annual 
registry fee for an appraisal management company, the Appraisal 
Subcommittee shall have the discretion to impose a minimum annual 
registry fee for an appraisal management company to protect against the 
under reporting of the number of appraisers working for or contracted by 
the appraisal management company.''.
            (2) Incremental revenues.--Incremental revenues collected 
        pursuant to the increases required by this subsection shall be 
        placed in a separate account at the United States Treasury, 
        entitled the ``Appraisal Subcommittee Account''.

    (i) <<NOTE: 12 USC 3338 note.>>  Grants and Reports.--Section 
1109(b) of the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3338(b)) is amended--
            (1) by striking ``and'' after the semicolon in paragraph 
        (3);
            (2) by striking the period at the end of paragraph (4) and 
        inserting a semicolon;
            (3) by adding at the end the following new paragraphs:
            ``(5) to make grants to State appraiser certifying and 
        licensing agencies, in accordance with policies to be developed 
        by the Appraisal Subcommittee, to support the efforts of such 
        agencies to comply with this title, including--
                    ``(A) the complaint process, complaint 
                investigations, and appraiser enforcement activities of 
                such agencies; and
                    ``(B) the submission of data on State licensed and 
                certified appraisers and appraisal management companies 
                to the National appraisal registry, including 
                information affirming that the appraiser or appraisal 
                management company meets the required qualification 
                criteria and formal and informal disciplinary actions; 
                and
            ``(6) to report to all State appraiser certifying and 
        licensing agencies when a license or certification is 
        surrendered, revoked, or suspended.''.

Obligations authorized under this subsection may not exceed 75 percent 
of the fiscal year total of incremental increase in fees collected and 
deposited in the ``Appraisal Subcommittee Account'' pursuant to 
subsection (h).
    (j) Criteria.--Section 1116 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) is amended--
            (1) in subsection (c), by inserting ``whose criteria for the 
        licensing of a real estate appraiser currently meet or exceed 
        the minimum criteria issued by the Appraisal Qualifications 
        Board of The Appraisal Foundation for the licensing of real 
        estate appraisers'' before the period at the end; and

[[Page 124 STAT. 2196]]

            (2) by striking subsection (e) and inserting the following 
        new subsection:

    ``(e) Minimum Qualification Requirements.--Any requirements 
established for individuals in the position of `Trainee Appraiser' and 
`Supervisory Appraiser' shall meet or exceed the minimum qualification 
requirements of the Appraiser Qualifications Board of The Appraisal 
Foundation. The Appraisal Subcommittee shall have the authority to 
enforce these requirements.''.
    (k) Monitoring of State Appraiser Certifying and Licensing 
Agencies.--Section 1118 of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 3347) is amended--
            (1) by amending subsection (a) to read as follows:

    ``(a) In General.--The Appraisal Subcommittee shall monitor each 
State appraiser certifying and licensing agency for the purposes of 
determining whether such agency--
            ``(1) has policies, practices, funding, staffing, and 
        procedures that are consistent with this title;
            ``(2) processes complaints and completes investigations in a 
        reasonable time period;
            ``(3) appropriately disciplines sanctioned appraisers and 
        appraisal management companies;
            ``(4) maintains an effective regulatory program; and
            ``(5) reports complaints and disciplinary actions on a 
        timely basis to the national registries on appraisers and 
        appraisal management companies maintained by the Appraisal 
        Subcommittee.

The Appraisal Subcommittee shall have the authority to remove a State 
licensed or certified appraiser or a registered appraisal management 
company from a national registry on an interim basis, not to exceed 90 
days, pending State agency action on licensing, certification, 
registration, and disciplinary proceedings. The Appraisal Subcommittee 
and all agencies, instrumentalities, and Federally recognized entities 
under this title shall not recognize appraiser certifications and 
licenses from States whose appraisal policies, practices, funding, 
staffing, or procedures are found to be inconsistent with this title. 
The Appraisal Subcommittee shall have the authority to impose sanctions, 
as described in this section, against a State agency that fails to have 
an effective appraiser regulatory program. In determining whether such a 
program is effective, the Appraisal Subcommittee shall include an 
analysis of the licensing and certification of appraisers, the 
registration of appraisal management companies, the issuance of 
temporary licenses and certifications for appraisers, the receiving and 
tracking of submitted complaints against appraisers and appraisal 
management companies, the investigation of complaints, and enforcement 
actions against appraisers and appraisal management companies. The 
Appraisal Subcommittee shall have the authority to impose interim 
actions and suspensions against a State agency as an alternative to, or 
in advance of, the derecognition of a State agency.''.
            (2) in subsection (b)(2), by inserting after ``authority'' 
        the following: ``or sufficient funding''.

    (l) Reciprocity.--Subsection (b) of section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3351(b)) is amended to read as follows:
    ``(b) Reciprocity.--Notwithstanding any other provisions of this 
title, a federally related transaction shall not be appraised

[[Page 124 STAT. 2197]]

by a certified or licensed appraiser unless the State appraiser 
certifying or licensing agency of the State certifying or licensing such 
appraiser has in place a policy of issuing a reciprocal certification or 
license for an individual from another State when--
            ``(1) the appraiser licensing and certification program of 
        such other State is in compliance with the provisions of this 
        title; and
            ``(2) the appraiser holds a valid certification from a State 
        whose requirements for certification or licensing meet or exceed 
        the licensure standards established by the State where an 
        individual seeks appraisal licensure.''.

    (m) Consideration of Professional Appraisal Designations.--Section 
1122(d) of the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3351(d)) is amended by striking ``shall not 
exclude'' and all that follows through the end of the subsection and 
inserting the following: ``may include education achieved, experience, 
sample appraisals, and references from prior clients. Membership in a 
nationally recognized professional appraisal organization may be a 
criteria considered, though lack of membership therein shall not be the 
sole bar against consideration for an assignment under these 
criteria.''.
    (n) Appraiser Independence.--Section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3351) is amended by adding at the end the following new subsection:
    ``(g) Appraiser Independence Monitoring.--The Appraisal Subcommittee 
shall monitor each State appraiser certifying and licensing agency for 
the purpose of determining whether such agency's policies, practices, 
and procedures are consistent with the purposes of maintaining appraiser 
independence and whether such State has adopted and maintains effective 
laws, regulations, and policies aimed at maintaining appraiser 
independence.''.
    (o) Appraiser Education.--Section 1122 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is 
amended by inserting after subsection (g) (as added by subsection (l) of 
this section) the following new subsection:
    ``(h) Approved Education.--The Appraisal Subcommittee shall 
encourage the States to accept courses approved by the Appraiser 
Qualification Board's Course Approval Program.''.
    (p) Appraisal Complaint Hotline.--Section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3351), as amended by this section, is amended by adding at the end the 
following new subsection:
    ``(i) Appraisal Complaint National Hotline.-- 
<<NOTE: Deadline. Determination.>> If, 6 months after the date of the 
enactment of this subsection, the Appraisal Subcommittee determines that 
no national hotline exists to receive complaints of non-compliance with 
appraisal independence standards and Uniform Standards of Professional 
Appraisal Practice, including complaints from appraisers, individuals, 
or other entities concerning the improper influencing or attempted 
improper influencing of appraisers or the appraisal process, the 
Appraisal Subcommittee shall establish and operate such a national 
hotline, which shall include a toll-free telephone number and an email 
address. If the Appraisal Subcommittee operates such a national hotline, 
the Appraisal Subcommittee shall refer complaints for further action to 
appropriate governmental bodies, including a State appraiser certifying 
and licensing agency, a financial institution regulator,

[[Page 124 STAT. 2198]]

or other appropriate legal authorities. For complaints referred to State 
appraiser certifying and licensing agencies or to Federal regulators, 
the Appraisal Subcommittee shall have the authority to follow up such 
complaint referrals in order to determine the status of the resolution 
of the complaint.''.

    (q) Automated Valuation Models.--Title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3331 et seq.), as amended by this section, is amended by adding at the 
end the following new section (and amending the table of contents 
accordingly):
``SEC. 1125. <<NOTE: 12 USC 3354.>> AUTOMATED VALUATION MODELS 
                          USED TO ESTIMATE COLLATERAL VALUE FOR 
                          MORTGAGE LENDING PURPOSES.

    ``(a) In General.--Automated valuation models shall adhere to 
quality control standards designed to--
            ``(1) ensure a high level of confidence in the estimates 
        produced by automated valuation models;
            ``(2) protect against the manipulation of data;
            ``(3) seek to avoid conflicts of interest;
            ``(4) require random sample testing and reviews; and
            ``(5) account for any other such factor that the agencies 
        listed in subsection (b) determine to be appropriate.

    ``(b) Adoption of Regulations.--The Board, the Comptroller of the 
Currency, the Federal Deposit Insurance Corporation, the National Credit 
Union Administration Board, the Federal Housing Finance Agency, and the 
Bureau of Consumer Financial Protection, in consultation with the staff 
of the Appraisal Subcommittee and the Appraisal Standards Board of the 
Appraisal Foundation, shall promulgate regulations to implement the 
quality control standards required under this section.
    ``(c) Enforcement.--Compliance with regulations issued under this 
subsection shall be enforced by--
            ``(1) with respect to a financial institution, or subsidiary 
        owned and controlled by a financial institution and regulated by 
        a Federal financial institution regulatory agency, the Federal 
        financial institution regulatory agency that acts as the primary 
        Federal supervisor of such financial institution or subsidiary; 
        and
            ``(2) with respect to other participants in the market for 
        appraisals of 1-to-4 unit single family residential real estate, 
        the Federal Trade Commission, the Bureau of Consumer Financial 
        Protection, and a State attorney general.

    ``(d) Automated Valuation Model Defined.--For purposes of this 
section, the term `automated valuation model' means any computerized 
model used by mortgage originators and secondary market issuers to 
determine the collateral worth of a mortgage secured by a consumer's 
principal dwelling.''.
    (r) Broker Price Opinions.--Title XI of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.), 
as amended by this section, is amended by adding at the end the 
following new section (and amending the table of contents accordingly):
``SEC. 1126. <<NOTE: 12 USC 3355.>> BROKER PRICE OPINIONS.

    ``(a) General Prohibition.--In conjunction with the purchase of a 
consumer's principal dwelling, broker price opinions may not be used as 
the primary basis to determine the value of a piece

[[Page 124 STAT. 2199]]

of property for the purpose of a loan origination of a residential 
mortgage loan secured by such piece of property.
    ``(b) Broker Price Opinion Defined.--For purposes of this section, 
the term `broker price opinion' means an estimate prepared by a real 
estate broker, agent, or sales person that details the probable selling 
price of a particular piece of real estate property and provides a 
varying level of detail about the property's condition, market, and 
neighborhood, and information on comparable sales, but does not include 
an automated valuation model, as defined in section 1125(c).''.
    (s) Amendments to Appraisal Subcommittee.--Section 1011 of the 
Federal Financial Institutions Examination Council Act of 1978 (12 
U.S.C. 3310) is amended--
            (1) in the first sentence, by adding before the period the 
        following: ``, the Bureau of Consumer Financial Protection, and 
        the Federal Housing Finance Agency''; and
            (2) by inserting at the end the following: ``At all times at 
        least one member of the Appraisal Subcommittee shall have 
        demonstrated knowledge and competence through licensure, 
        certification, or professional designation within the appraisal 
        profession.''.

    (t) Technical Corrections.--
            (1) Section 1119(a)(2) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(a)(2)) is 
        amended by striking ``council,'' and inserting ``Council,''.
            (2) Section 1121(6) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is 
        amended by striking ``Corporations,'' and inserting 
        ``Corporation,''.
            (3) Section 1121(8) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is 
        amended by striking ``council'' and inserting ``Council''.
            (4) Section 1122 of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is 
        amended--
                    (A) in subsection (a)(1) by moving the left margin 
                of subparagraphs (A), (B), and (C) 2 ems to the right; 
                and
                    (B) in subsection (c)--
                          (i) by striking ``Federal Financial 
                      Institutions Examination Council'' and inserting 
                      ``Financial Institutions Examination Council''; 
                      and
                          (ii) by striking ``the council's functions'' 
                      and inserting ``the Council's functions''.
SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

    Subsection (e) of section 701 of the Equal Credit Opportunity Act 
(15 U.S.C. 1691) is amended to read as follows:
    ``(e) Copies Furnished to Applicants.--
            ``(1) In general.-- <<NOTE: Deadline.>> Each creditor shall 
        furnish to an applicant a copy of any and all written appraisals 
        and valuations developed in connection with the applicant's 
        application for a loan that is secured or would have been 
        secured by a first lien on a dwelling promptly upon completion, 
        but in no case later than 3 days prior to the closing of the 
        loan, whether the creditor grants or denies the applicant's 
        request for credit or the application is incomplete or 
        withdrawn.

[[Page 124 STAT. 2200]]

            ``(2) Waiver.--The applicant may waive the 3 day requirement 
        provided for in paragraph (1), except where otherwise required 
        in law.
            ``(3) Reimbursement.--The applicant may be required to pay a 
        reasonable fee to reimburse the creditor for the cost of the 
        appraisal, except where otherwise required in law.
            ``(4) Free copy.--Notwithstanding paragraph (3), the 
        creditor shall provide a copy of each written appraisal or 
        valuation at no additional cost to the applicant.
            ``(5) Notification to applicants.--At the time of 
        application, the creditor shall notify an applicant in writing 
        of the right to receive a copy of each written appraisal and 
        valuation under this subsection.
            ``(6) Valuation defined.--For purposes of this subsection, 
        the term `valuation' shall include any estimate of the value of 
        a dwelling developed in connection with a creditor's decision to 
        provide credit, including those values developed pursuant to a 
        policy of a government sponsored enterprise or by an automated 
        valuation model, a broker price opinion, or other methodology or 
        mechanism.''.
SEC. 1475. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT 
                          RELATING TO CERTAIN APPRAISAL FEES.

    Section 4 of the Real Estate Settlement Procedures Act of 
1974 <<NOTE: 12 USC 2603.>> is amended by adding at the end the 
following new subsection:

    ``(c) The standard form described in subsection (a) may include, in 
the case of an appraisal coordinated by an appraisal management company 
(as such term is defined in section 1121(11) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
3350(11))), a clear disclosure of--
            ``(1) the fee paid directly to the appraiser by such 
        company; and
            ``(2) the administration fee charged by such company.''.
SEC. 1476. GAO STUDY ON THE EFFECTIVENESS AND IMPACT OF VARIOUS 
                          APPRAISAL METHODS, VALUATION MODELS AND 
                          DISTRIBUTIONS CHANNELS, AND ON THE HOME 
                          VALUATION CODE OF CONDUCT AND THE 
                          APPRAISAL SUBCOMMITTEE.

    (a) In General.--The Government Accountability Office shall conduct 
a study on--
            (1) the effectiveness and impact of--
                    (A) appraisal methods, including the cost approach, 
                the comparative sales approach, the income approach, and 
                others that may be available;
                    (B) appraisal valuation models, including licensed 
                and certified appraisals, broker-priced opinions, and 
                automated valuation models; and
                    (C) appraisal distribution channels, including 
                appraisal management companies, independent appraisal 
                operations within mortgage originators, and fee-for-
                service appraisers;
            (2) the Home Valuation Code of Conduct; and
            (3) the Appraisal Subcommittee's functions pursuant to title 
        XI of the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989.

    (b) Study.--Not later than--
            (1) <<NOTE: Deadline.>> 12 months after the date of 
        enactment of this Act, the Government Accountability Office 
        shall submit a study

[[Page 124 STAT. 2201]]

        to the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives; and
            (2) <<NOTE: Deadline. Reports.>> 90 days after the date of 
        enactment of this Act, the Government Accountability Office 
        shall provide a report on the status of the study and any 
        preliminary findings to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives.

    (c) Content of Study.--The study required by this section shall 
include an examination of the following:
            (1) Appraisal approaches, valuation models, and distribution 
        channels.--
                    (A) The prevalence, alone or in combination, of 
                certain appraisal approaches, models, and channels in 
                purchase-money and refinance mortgage transactions.
                    (B) The accuracy of these approaches, models, and 
                channels in assessing the property as collateral.
                    (C) Whether and how these approaches, models, and 
                channels contributed to price speculation during the 
                previous cycle.
                    (D) The costs to consumers of these approaches, 
                models, and channels.
                    (E) The disclosure of fees to consumers in the 
                appraisal process.
                    (F) To what extent the usage of these approaches, 
                models, and channels may be influenced by a conflict of 
                interest between the mortgage lender and the appraiser 
                and the mechanism by which the lender selects and 
                compensates the appraiser.
                    (G) The suitability of these approaches, models, and 
                channels in rural versus urban areas.
            (2) Home valuation code of conduct (hvcc).--
                    (A) How the HVCC affects mortgage lenders' selection 
                of appraisers.
                    (B) How the HVCC affects State regulation of 
                appraisers and appraisal distribution channels.
                    (C) How the HVCC affects the quality and cost of 
                appraisals and the length of time to obtain an 
                appraisal.
                    (D) How the HVCC affects mortgage brokers, small 
                businesses, and consumers.

    (d) Additional Study Required.--
            (1) In general.-- <<NOTE: Deadline.>> Not later than 18 
        months after the date of enactment of this Act, the Government 
        Accountability Office shall submit a study to the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives.
            (2) Content of additional study.--The study required under 
        paragraph (1) shall include--
                    (A) an examination of--
                          (i) the Appraisal Subcommittee's ability to 
                      monitor and enforce State and Federal 
                      certification requirements and standards, 
                      including by providing a summary with a 
                      statistical breakdown of enforcement actions taken 
                      during the last 10 years;

[[Page 124 STAT. 2202]]

                          (ii) whether existing Federal financial 
                      institutions regulatory agency exemptions on 
                      appraisals for federally related transactions 
                      needs to be revised; and
                          (iii) whether new means of data collection, 
                      such as the establishment of a national 
                      repository, would benefit the Appraisal 
                      Subcommittee's ability to perform its functions; 
                      and
                    (B) recommendations from this examination for 
                administrative and legislative action at the Federal and 
                State level.

            Subtitle G--Mortgage Resolution and Modification

SEC. 1481. <<NOTE: 12 USC 5220b.>> MULTIFAMILY MORTGAGE RESOLUTION 
                          PROGRAM.

    (a) Establishment.--The Secretary of Housing and Urban Development 
shall develop a program under this subsection to ensure the protection 
of current and future tenants and at-risk multifamily properties, where 
feasible, based on criteria that may include--
            (1) creating sustainable financing of such properties, that 
        may take into consideration such factors as--
                    (A) the rental income generated by such properties; 
                and
                    (B) the preservation of adequate operating reserves;
            (2) maintaining the level of Federal, State, and city 
        subsidies in effect as of the date of the enactment of this Act;
            (3) providing funds for rehabilitation; and
            (4) facilitating the transfer of such properties, when 
        appropriate and with the agreement of owners, to responsible new 
        owners and ensuring affordability of such properties.

    (b) Coordination.--The Secretary of Housing and Urban Development 
may, in carrying out the program developed under this section, 
coordinate with the Secretary of the Treasury, the Federal Deposit 
Insurance Corporation, the Board of Governors of the Federal Reserve 
System, the Federal Housing Finance Agency, and any other Federal 
Government agency that the Secretary considers appropriate.
    (c) Definition.--For purposes of this section, the term 
``multifamily properties'' means a residential structure that consists 
of 5 or more dwelling units.
    (d) Prevention of Qualification for Criminal Applicants.--
            (1) In general.-- <<NOTE: Time period.>> No person shall be 
        eligible to begin receiving assistance from the Making Home 
        Affordable Program authorized under the Emergency Economic 
        Stabilization Act of 2008 (12 U.S.C. 5201 et seq.), or any other 
        mortgage assistance program authorized or funded by that Act, on 
        or after 60 days after the date of the enactment of this Act, if 
        such person, in connection with a mortgage or real estate 
        transaction, has been convicted, within the last 10 years, of 
        any one of the following:
                    (A) Felony larceny, theft, fraud, or forgery.
                    (B) Money laundering.
                    (C) Tax evasion.
            (2) Procedures.--The Secretary shall establish procedures to 
        ensure compliance with this subsection.

[[Page 124 STAT. 2203]]

            (3) Report.--The Secretary shall report to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        regarding the implementation of this provision. The report shall 
        also describe the steps taken to implement this subsection.
SEC. 1482. <<NOTE: 12 USC 5219a.>> HOME AFFORDABLE MODIFICATION 
                          PROGRAM GUIDELINES.

    (a) Net Present Value Input Data.--The Secretary of the Treasury (in 
this section referred to as the ``Secretary'') shall revise the 
supplemental directives and other guidelines for the Home Affordable 
Modification Program of the Making Home Affordable initiative of the 
Secretary of the Treasury, authorized under the Emergency Economic 
Stabilization Act of 2008 (Public Law 110-343), to require each mortgage 
servicer participating in such program to provide each borrower under a 
mortgage whose request for a mortgage modification under the Program is 
denied with all borrower-related and mortgage-related input data used in 
any net present value (NPV) analyses performed in connection with the 
subject mortgage. Such input data shall be provided to the borrower at 
the time of such denial.
    (b) Web-based Site for NPV Calculator and Application.--
            (1) NPV calculator.--In carrying out the Home Affordable 
        Modification Program, the Secretary shall establish and maintain 
        a site on the World Wide Web that provides a calculator for net 
        present value analyses of a mortgage, based on the Secretary's 
        methodology for calculating such value, that mortgagors can use 
        to enter information regarding their own mortgages and that 
        provides a determination after entering such information 
        regarding a mortgage of whether such mortgage would be accepted 
        or rejected for modification under the Program, using such 
        methodology.
            (2) Disclosure.--Such Web site shall also prominently 
        disclose that each mortgage servicer participating in such 
        Program may use a method for calculating net present value of a 
        mortgage that is different than the method used by such 
        calculator.
            (3) Application.--The Secretary shall make a reasonable 
        effort to include on such World Wide Web site a method for 
        homeowners to apply for a mortgage modification under the Home 
        Affordable Modification Program.

    (c) Public Availability of NPV Methodology, Computer Model, and 
Variables.--The Secretary shall make publicly available, including by 
posting on a World Wide Web site of the Secretary--
            (1) the Secretary's methodology and computer model, 
        including all formulae used in such computer model, used for 
        calculating net present value of a mortgage that is used by the 
        calculator established pursuant to subsection (b); and
            (2) all non-proprietary variables used in such net present 
        value analysis.
SEC. 1483. <<NOTE: 12 USC 5219b.>> PUBLIC AVAILABILITY OF 
                          INFORMATION OF MAKING HOME AFFORDABLE 
                          PROGRAM.

    (a) Revisions to Program Guidelines.--The Secretary of the Treasury 
(in this section referred to as the ``Secretary'') shall revise the 
guidelines for the Home Affordable Modification Program of the Making 
Home Affordable initiative of the Secretary of the

[[Page 124 STAT. 2204]]

Treasury, authorized under the Emergency Economic Stabilization Act of 
2008 (Public Law 110-343), to provide that the data being collected by 
the Secretary from each mortgage servicer and lender participating in 
the Program is made public in accordance with subsection (b).
    (b) <<NOTE: Deadlines.>>  Public Availability.--Data shall be made 
available according to the following guidelines:
            (1) <<NOTE: Reports. Web posting.>> Not more than 14 days 
        after each monthly deadline for submission of data by mortgage 
        servicers and lenders participating in the Program, reports 
        shall be made publicly available by means of a World Wide Web 
        site of the Secretary, and by submitting a report to the 
        Congress, that shall includes the following information:
                    (A) The number of requests for mortgage 
                modifications under the Program that the servicer or 
                lender has received.
                    (B) The number of requests for mortgage 
                modifications under the Program that the servicer or 
                lender has processed.
                    (C) The number of requests for mortgage 
                modifications under the Program that the servicer or 
                lender has approved.
                    (D) The number of requests for mortgage 
                modifications under the Program that the servicer or 
                lender has denied.
            (2) <<NOTE: Records.>> Not more than 60 days after each 
        monthly deadline for submission of data by mortgage servicers 
        and lenders participating in the Program, the Secretary shall 
        make data tables available to the public at the individual 
        record level. The <<NOTE: Regulations.>> Secretary shall issue 
        regulations prescribing--
                    (A) the procedures for disclosing such data to the 
                public; and
                    (B) such deletions as the Secretary may determine to 
                be appropriate to protect any privacy interest of any 
                mortgage modification applicant, including the deletion 
                or alteration of the applicant's name and identification 
                number.
SEC. 1484. PROTECTING TENANTS AT FORECLOSURE EXTENSION AND 
                          CLARIFICATION.

    The Protecting Tenants at Foreclosure Act is amended--
            (1) in section 702 (12 U.S.C. 5220 note)--
                    (A) in subsection (a)(2), by striking ``, as of the 
                date of such notice of foreclosure''; and
                    (B) in subsection (c), by inserting after the period 
                the following: ``For purposes of this section, the date 
                of a notice of foreclosure shall be deemed to be the 
                date on which complete title to a property is 
                transferred to a successor entity or person as a result 
                of an order of a court or pursuant to provisions in a 
                mortgage, deed of trust, or security deed.''; and
            (2) in section 704 (12 U.S.C. 5201 note), by striking 
        ``2012'' and inserting ``2014''.

[[Page 124 STAT. 2205]]

                  Subtitle H--Miscellaneous Provisions

SEC. 1491. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF 
                          GOVERNMENT-SPONSORED ENTERPRISES REFORM 
                          TO ENHANCE THE PROTECTION, LIMITATION, 
                          AND REGULATION OF THE TERMS OF 
                          RESIDENTIAL MORTGAGE CREDIT.

    (a) Findings.--The Congress finds as follows:
            (1) The Government-sponsored enterprises, Federal National 
        Mortgage Association (Fannie Mae) and the Federal Home Loan 
        Mortgage Corporation (Freddie Mac), were chartered by Congress 
        to ensure a reliable and affordable supply of mortgage funding, 
        but enjoy a dual legal status as privately owned corporations 
        with Government mandated affordable housing goals.
            (2) In 1996, the Department of Housing and Urban Development 
        required that 42 percent of Fannie Mae's and Freddie Mac's 
        mortgage financing should go to borrowers with income levels 
        below the median for a given area.
            (3) In 2004, the Department of Housing and Urban Development 
        revised those goals, increasing them to 56 percent of their 
        overall mortgage purchases by 2008, and additionally mandated 
        that 12 percent of all mortgage purchases by Fannie Mae and 
        Freddie Mac be ``special affordable'' loans made to borrowers 
        with incomes less than 60 percent of an area's median income, a 
        target that ultimately increased to 28 percent for 2008.
            (4) To help fulfill those mandated affordable housing goals, 
        in 1995 the Department of Housing and Urban Development 
        authorized Fannie Mae and Freddie Mac to purchase subprime 
        securities that included loans made to low-income borrowers.
            (5) After this authorization to purchase subprime 
        securities, subprime and near-prime loans increased from 9 
        percent of securitized mortgages in 2001 to 40 percent in 2006, 
        while the market share of conventional mortgages dropped from 
        78.8 percent in 2003 to 50.1 percent by 2007 with a 
        corresponding increase in subprime and Alt-A loans from 10.1 
        percent to 32.7 percent over the same period.
            (6) In 2004 alone, Fannie Mae and Freddie Mac purchased 
        $175,000,000,000 in subprime mortgage securities, which 
        accounted for 44 percent of the market that year, and from 2005 
        through 2007, Fannie Mae and Freddie Mac purchased approximately 
        $1,000,000,000,000 in subprime and Alt-A loans, while Fannie 
        Mae's acquisitions of mortgages with less than 10 percent down 
        payments almost tripled.
            (7) According to data from the Federal Housing Finance 
        Agency (FHFA) for the fourth quarter of 2008, Fannie Mae and 
        Freddie Mac own or guarantee 75 percent of all newly originated 
        mortgages, and Fannie Mae and Freddie Mac currently own 13.3 
        percent of outstanding mortgage debt in the United States and 
        have issued mortgage-backed securities for 31.0 percent of the 
        residential debt market, a combined total of 44.3 percent of 
        outstanding mortgage debt in the United States.
            (8) On September 7, 2008, the FHFA placed Fannie Mae and 
        Freddie Mac into conservatorship, with the Treasury

[[Page 124 STAT. 2206]]

        Department subsequently agreeing to purchase at least 
        $200,000,000,000 of preferred stock from each enterprise in 
        exchange for warrants for the purchase of 79.9 percent of each 
        enterprise's common stock.
            (9) The conservatorship for Fannie Mae and Freddie Mac has 
        potentially exposed taxpayers to upwards of $5,300,000,000,000 
        worth of risk.
            (10) The hybrid public-private status of Fannie Mae and 
        Freddie Mac is untenable and must be resolved to assure that 
        consumers are offered and receive residential mortgage loans on 
        terms that reasonably reflect their ability to repay the loans 
        and that are understandable and not unfair, deceptive, or 
        abusive.

    (b) Sense of the Congress.--It is the sense of the Congress that 
efforts to enhance by the protection, limitation, and regulation of the 
terms of residential mortgage credit and the practices related to such 
credit would be incomplete without enactment of meaningful structural 
reforms of Fannie Mae and Freddie Mac.
SEC. 1492. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT 
                          MORTGAGE FORECLOSURE RESCUE SCAMS AND 
                          LOAN MODIFICATION FRAUD.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the current inter-agency efforts of the Secretary of 
the Treasury, the Secretary of Housing and Urban Development, the 
Attorney General, and the Federal Trade Commission to crackdown on 
mortgage foreclosure rescue scams and loan modification fraud in order 
to advise the Congress to the risks and vulnerabilities of emerging 
schemes in the loan modification arena.
    (b) Report.--
            (1) In general.--The Comptroller General shall submit a 
        report to the Congress on the study conducted under subsection 
        (a) containing such recommendations for legislative and 
        administrative actions as the Comptroller General may determine 
        to be appropriate in addition to the recommendations required 
        under paragraph (2).
            (2) Specific topics.--The report made under paragraph (1) 
        shall include--
                    (A) an evaluation of the effectiveness of the inter-
                agency task force current efforts to combat mortgage 
                foreclosure rescue scams and loan modification fraud 
                scams;
                    (B) specific recommendations on agency or 
                legislative action that are essential to properly 
                protect homeowners from mortgage foreclosure rescue 
                scams and loan modification fraud scams; and
                    (C) the adequacy of financial resources that the 
                Federal Government is allocating to--
                          (i) crackdown on loan modification and 
                      foreclosure rescue scams; and
                          (ii) the education of homeowners about 
                      fraudulent scams relating to loan modification and 
                      foreclosure rescues.
SEC. 1493. REPORTING OF MORTGAGE DATA BY STATE.

    (a) In General.--Section 104(a) of the Helping Families Save Their 
Homes Act of 2009 (division A of Public Law 111-22) <<NOTE: 12 
USC 1715z-25.>>  is amended--

[[Page 124 STAT. 2207]]

            (1) in paragraph (2), by striking ``resulting'' and 
        inserting ``in each State that result'';
            (2) in paragraph (3), by inserting ``each State for'' after 
        ``modifications in''; and
            (3) in paragraph (4), by inserting ``in each State'' after 
        ``total number of loans''.

    (b) Conforming Amendment.--Section 104(b)(1)(A) of such Act is 
amended by adding at the end the following 
sentence: <<NOTE: Deadline.>>  ``Not later than 60 days after the date 
of the enactment of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, the Comptroller of the Currency and the Director of the 
Office of Thrift Supervision shall update such requirements to reflect 
amendments made to this section by such Act.''.
SEC. 1494. STUDY OF EFFECT OF DRYWALL PRESENCE ON FORECLOSURES.

    (a) Study.--The Secretary of Housing and Urban Development, in 
consultation with the Secretary of the Treasury, shall conduct a study 
of the effect on residential mortgage loan foreclosures of--
            (1) the presence in residential structures subject to such 
        mortgage loans of drywall that was imported from China during 
        the period beginning with 2004 and ending at the end of 2007; 
        and
            (2) the availability of property insurance for residential 
        structures in which such drywall is present.

    (b) Report.--Not later than the expiration of the 120-day period 
beginning on the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall submit to the Congress a report on 
the study conducted under subsection (a) containing its findings, 
conclusions, and recommendations.
SEC. 1495. <<NOTE: 15 USC 1601 note.>> DEFINITION.

    For purposes of this title, the term ``designated transfer date'' 
means the date established under section 1062 of this Act.
SEC. 1496. EMERGENCY MORTGAGE RELIEF.

    (a) Emergency Homeowners' Relief Fund.-- <<NOTE: Effective date. 12 
USC 2706 note.>> Effective October 1, 2010, and notwithstanding any 
other provision of law, there is hereby made available to the Secretary 
of Housing and Urban Development such sums as are necessary to provide 
$1,000,000,000 in assistance through the Emergency Homeowners' Relief 
Fund, which such Secretary shall establish pursuant to section 107 of 
the Emergency Housing Act of 1975 (12 U.S.C. 2706), as such Act is 
amended by this section, for use for emergency mortgage assistance in 
accordance with title I of such Act.

    (b) Reauthorization of Emergency Mortgage Relief Program.--Title I 
of the Emergency Housing Act of 1975 is amended--
            (1) in section 103 (12 U.S.C. 2702)--
                    (A) in paragraph (2)--
                          (i) by striking ``have indicated'' and all 
                      that follows through ``regulation of the holder'' 
                      and insert ``have certified'';
                          (ii) by striking ``(such as the volume of 
                      delinquent loans in its portfolio)''; and
                          (iii) by striking ``, except that such 
                      statement'' and all that follows through 
                      ``purposes of this title''; and

[[Page 124 STAT. 2208]]

                    (B) in paragraph (4), by inserting ``or medical 
                conditions'' after ``adverse economic conditions'';
            (2) in section 104 (12 U.S.C. 2703)--
                    (A) in subsection (b), by striking ``, but such 
                assistance'' and all that follows through the period at 
                the end and inserting the 
                following: <<NOTE: Determination.>>  ``. The amount of 
                assistance provided to a homeowner under this title 
                shall be an amount that the Secretary determines is 
                reasonably necessary to supplement such amount as the 
                homeowner is capable of contributing toward such 
                mortgage payment, except that the aggregate amount of 
                such assistance provided for any homeowner shall not 
                exceed $50,000.'';
                    (B) in subsection (d), by striking ``interest on a 
                loan or advance'' and all that follows through the end 
                of the subsection and inserting the following: ``(1) the 
                rate of interest on any loan or advance of credit 
                insured under this title shall be fixed for the life of 
                the loan or advance of credit and shall not exceed the 
                rate of interest that is generally charged for mortgages 
                on single-family housing insured by the Secretary of 
                Housing and Urban Development under title II of the 
                National Housing Act at the time such loan or advance of 
                credit is made, and (2) no interest shall be charged on 
                interest which is deferred on a loan or advance of 
                credit made under this title. In establishing rates, 
                terms and conditions for loans or advances of credit 
                made under this title, the Secretary shall take into 
                account a homeowner's ability to repay such loan or 
                advance of credit.''; and
                    (C) in subsection (e), by inserting after the period 
                at the end of the first sentence the following: ``Any 
                eligible homeowner who receives a grant or an advance of 
                credit under this title may repay the loan in full, 
                without penalty, by lump sum or by installment payments 
                at any time before the loan becomes due and payable.'';
            (3) in section 105 (12 U.S.C. 2704)--
                    (A) by striking subsection (b);
                    (B) in subsection (e)--
                          (i) by inserting ``and emergency mortgage 
                      relief payments made under section 106'' after 
                      ``insured under this section''; and
                          (ii) by striking ``$1,500,000,000 at any one 
                      time'' and inserting ``$3,000,000,000'';
                    (C) by redesignating subsections (c), (d), and (e) 
                as subsections (b), (c), and (d), respectively; and
                    (D) by adding at the end the following new 
                subsection:

    ``(e) <<NOTE: Guidelines. Procedures.>> The Secretary shall 
establish underwriting guidelines or procedures to allocate amounts made 
available for loans and advances insured under this section and for 
emergency relief payments made under section 106 based on the likelihood 
that a mortgagor will be able to resume mortgage payments, pursuant to 
the requirement under section 103(5).'';
            (4) in <<NOTE: 12 USC 2706.>> section 107--
                    (A) by striking ``(a)''; and
                    (B) by striking subsection (b);
            (5) in section 108 (12 U.S.C. 2707), by adding at the end 
        the following new subsection:

[[Page 124 STAT. 2209]]

    ``(d) Coverage of Existing Programs.-- <<NOTE: Determination.>> The 
Secretary shall allow funds to be administered by a State that has an 
existing program that is determined by the Secretary to provide 
substantially similar assistance to homeowners. After such determination 
is made such State shall not be required to modify such program to 
comply with the provisions of this title.'';
            (6) in section 109 (12 U.S.C. 2708)--
                    (A) in the section heading, by striking 
                ``authorization and'';
                    (B) by striking subsection (a);
                    (C) by striking ``(b)''; and
                    (D) by striking ``1977'' and inserting ``2011'';
            (7) by striking sections 110, 111, and 113 (12 U.S.C. 2709, 
        2710, 2712); and
            (8) by redesignating section 112 (12 U.S.C. 2711) as section 
        110.
SEC. 1497. <<NOTE: 42 USC 5301 note.>> ADDITIONAL ASSISTANCE FOR 
                          NEIGHBORHOOD STABILIZATION PROGRAM.

    (a) In General.-- <<NOTE: Effective date. State and local 
governments.>> Effective October 1, 2010, out of funds in the Treasury 
not otherwise appropriated, there is hereby made available to the 
Secretary of Housing and Urban Development $1,000,000,000, and the 
Secretary of Housing and Urban Development shall use such amounts for 
assistance to States and units of general local government for the 
redevelopment of abandoned and foreclosed homes, in accordance with the 
same provisions applicable under the second undesignated paragraph under 
the heading ``Community Planning and Development--Community Development 
Fund'' in title XII of division A of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 217) to amounts 
made available under such second undesignated paragraph, except as 
follows:
            (1) Notwithstanding the matter of such second undesignated 
        paragraph that precedes the first proviso, amounts made 
        available by this section shall remain available until expended.
            (2) The 3rd, 4th, 5th, 6th, 7th, and 15th provisos of such 
        second undesignated paragraph shall not apply to amounts made 
        available by this section.
            (3) Amounts made available by this section shall be 
        allocated based on a funding formula for such amounts 
        established by the Secretary in accordance with section 2301(b) 
        of the Housing and Economic Recovery Act of 2008 (42 U.S.C. 5301 
        note), except that--
                    (A) <<NOTE: Deadline.>> notwithstanding paragraph 
                (2) of such section 2301(b), the formula shall be 
                established not later than 30 days after the date of the 
                enactment of this Act;
                    (B) notwithstanding such section 2301(b), each State 
                shall receive, at a minimum, not less than 0.5 percent 
                of funds made available under this section;
                    (C) the Secretary may establish a minimum grant 
                amount for direct allocations to units of general local 
                government located within a State, which shall not 
                exceed $1,000,000;
                    (D) <<NOTE: Procedures.>> each State and local 
                government receiving grant amounts shall establish 
                procedures to create preferences

[[Page 124 STAT. 2210]]

                for the development of affordable rental housing for 
                properties assisted with amounts made available by this 
                section; and
                    (E) the Secretary may use not more than 2 percent of 
                the funds made available under this section for 
                technical assistance to grantees.
            (4) Paragraph (1) of section 2301(c) of the Housing and 
        Economic Recovery Act of 2008 shall not apply to amounts made 
        available by this section.
            (5) <<NOTE: Applicability.>> The fourth proviso from the end 
        of such second undesignated paragraph shall be applied to 
        amounts made available by this section by substituting ``2013'' 
        for ``2012''.
            (6) <<NOTE: Definition.>>  Notwithstanding section 2301(a) 
        of the Housing and Economic Recovery Act of 2008, the term 
        ``State'' means any State, as defined in section 102 of the 
        Housing and Community Development Act of 1974 (42 U.S.C. 5302), 
        and the District of Columbia, for purposes of this section and 
        this title, as applied to amounts made available by this 
        section.
            (7)(A) <<NOTE: Election violations.>> None of the amounts 
        made available by this section shall be distributed to--
                    (i) any organization which has been convicted for a 
                violation under Federal law relating to an election for 
                Federal office; or
                    (ii) any organization which employs applicable 
                individuals.
            (B) <<NOTE: Definition.>>  In this paragraph, the term 
        ``applicable individual'' means an individual who--
                    (i) is--
                          (I) employed by the organization in a 
                      permanent or temporary capacity;
                          (II) contracted or retained by the 
                      organization; or
                          (III) acting on behalf of, or with the express 
                      or apparent authority of, the organization; and
                    (ii) has been convicted for a violation under 
                Federal law relating to an election for Federal office.
            (8) An eligible entity receiving a grant under this section 
        shall, to the maximum extent feasible, provide for the hiring of 
        employees who reside in the vicinity, as such term is defined by 
        the Secretary, of projects funded under this section or contract 
        with small businesses that are owned and operated by persons 
        residing in the vicinity of such projects.

    (b) Additional Amendments.--
            (1) <<NOTE: 42 USC 5301 note.>>  Section 2301.--Section 
        2301(f)(3)(A)(ii) of the Housing and Economic Recovery Act of 
        2008 (42 U.S.C. 5301(f)(3)(A)(ii))--
                    (A) is amended by striking ``for the purchase and 
                redevelopment of abandoned and foreclosed upon homes or 
                residential properties that will be used''; and
                    (B) <<NOTE: Applicability.>> shall apply with 
                respect to any unexpended or unobligated balances, 
                including recaptured and reallocated funds made 
                available under this Act, section 2301 of the Housing 
                and Economic Recovery Act of 2008 (42 U.S.C. 5301), and 
                the heading ``Community Planning and Development--
                Community Development Fund'' in title XII of division A 
                of the American Recovery and Reinvestment Act of 2009 
                (Public Law 111-5; 123 Stat. 217).

[[Page 124 STAT. 2211]]

            (2) Notice of foreclosure.--For any amounts made available 
        under this section, under division B, title III of the Housing 
        and Economic Recovery Act of 2008 (42 U.S.C. 5301), or under the 
        heading ``Community Planning and Development--Community 
        Development Fund'' in title XII of division A of the American 
        Recovery and Reinvestment Act of 2009 (Public Law 111-5; 123 
        Stat. 217), the date of a notice of foreclosure shall be deemed 
        to be the date on which complete title to a property is 
        transferred to a successor entity or person as a result of an 
        order of a court or pursuant to provisions in a mortgage, deed 
        of trust, or security deed.
SEC. 1498. <<NOTE: Grants. 12 USC 1701x-2.>> LEGAL ASSISTANCE FOR 
                          FORECLOSURE-RELATED ISSUES.

    (a) Establishment.--The Secretary of Housing and Urban Development 
(hereafter in this section referred to as the ``Secretary'') shall 
establish a program for making grants for providing a full range of 
foreclosure legal assistance to low- and moderate-income homeowners and 
tenants related to home ownership preservation, home foreclosure 
prevention, and tenancy associated with home foreclosure.
    (b) Competitive Allocation.-- <<NOTE: States and local 
organizations.>> The Secretary shall allocate amounts made available for 
grants under this section to State and local legal organizations on the 
basis of a competitive process. For purposes of this subsection ``State 
and local legal organizations'' are those State and local organizations 
whose primary business or mission is to provide legal assistance.

    (c) Priority to Certain Areas.--In allocating amounts in accordance 
with subsection (b), the Secretary shall give priority consideration to 
State and local legal organizations that are operating in the 125 
metropolitan statistical areas (as that term is defined by the Director 
of the Office of Management and Budget) with the highest home 
foreclosure rates.
    (d) Legal Assistance.--
            (1) In general.--Any State or local legal organization that 
        receives financial assistance pursuant to this section may use 
        such amounts only to assist--
                    (A) homeowners of owner-occupied homes with 
                mortgages in default, in danger of default, or subject 
                to or at risk of foreclosure; and
                    (B) tenants at risk of or subject to eviction as a 
                result of foreclosure of the property in which such 
                tenant resides.
            (2) Commence use within 90 days.--Any State or local legal 
        organization that receives financial assistance pursuant to this 
        section shall begin using any financial assistance received 
        under this section within 90 days after receipt of the 
        assistance.
            (3) Prohibition on class actions.--No funds provided to a 
        State or local legal organization under this section may be used 
        to support any class action litigation.
            (4) Limitation on legal assistance.--Legal assistance funded 
        with amounts provided under this section shall be limited to 
        mortgage-related default, eviction, or foreclosure proceedings, 
        without regard to whether such foreclosure is judicial or 
        nonjudicial.
            (5) Effective date.--Notwithstanding any other provision of 
        this Act, this subsection shall take effect on the date of the 
        enactment of this Act.

[[Page 124 STAT. 2212]]

    (e) Limitation on Distribution of Assistance.--
            (1) In general.--None of the amounts made available under 
        this section shall be distributed to--
                    (A) <<NOTE: Election violations.>> any organization 
                which has been convicted for a violation under Federal 
                law relating to an election for Federal office; or
                    (B) any organization which employs applicable 
                individuals.
            (2) Definition of applicable individuals.--In this 
        subsection, the term ``applicable individual'' means an 
        individual who--
                    (A) is--
                          (i) employed by the organization in a 
                      permanent or temporary capacity;
                          (ii) contracted or retained by the 
                      organization; or
                          (iii) acting on behalf of, or with the express 
                      or apparent authority of, the organization; and
                    (B) has been convicted for a violation under Federal 
                law relating to an election for Federal office.

    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary $35,000,000 for each of fiscal years 2011 
through 2012 for grants under this section.

                   TITLE XV--MISCELLANEOUS PROVISIONS

SEC. 1501. RESTRICTIONS ON USE OF UNITED STATES FUNDS FOR FOREIGN 
                          GOVERNMENTS; PROTECTION OF AMERICAN 
                          TAXPAYERS.

    The Bretton Woods Agreements Act (22 U.S.C. 286 et seq.) is amended 
by adding at the end the following:
``SEC. 68. <<NOTE: 22 USC 286tt.>> RESTRICTIONS ON USE OF UNITED 
                      STATES FUNDS FOR FOREIGN GOVERNMENTS; 
                      PROTECTION OF AMERICAN TAXPAYERS.

    ``(a) In General.--The Secretary of the Treasury shall instruct the 
United States Executive Director at the International Monetary Fund--
            ``(1) to evaluate, prior to consideration by the Board of 
        Executive Directors of the Fund , any proposal submitted to the 
        Board for the Fund to make a loan to a country if--
                    ``(A) the amount of the public debt of the country 
                exceeds the gross domestic product of the country as of 
                the most recent year for which such information is 
                available; and
                    ``(B) the country is not eligible for assistance 
                from the International Development Association.
            ``(2) Opposition to loans unlikely to be repaid in full.--If 
        any such evaluation indicates that the proposed loan is not 
        likely to be repaid in full, the Secretary of the Treasury shall 
        instruct the United States Executive Director at the Fund to use 
        the voice and vote of the United States to oppose the proposal.

    ``(b) Reports to Congress.--Within 30 days after the Board of 
Executive Directors of the Fund approves a proposal described in 
subsection (a), and annually thereafter by June 30, for the

[[Page 124 STAT. 2213]]

duration of any program approved under such proposals, the Secretary of 
the Treasury shall report in writing to the Committee on Financial 
Services of the House of Representatives and the Committee on Foreign 
Relations and the Committee on Banking, Housing, and Urban Affairs of 
the Senate assessing the likelihood that loans made pursuant to such 
proposals will be repaid in full, including--
            ``(1) the borrowing country's current debt status, 
        including, to the extent possible, its maturity structure, 
        whether it has fixed or floating rates, whether it is indexed, 
        and by whom it is held;
            ``(2) the borrowing country's external and internal 
        vulnerabilities that could potentially affect its ability to 
        repay; and
            ``(3) the borrowing country's debt management strategy.''.
SEC. 1502. <<NOTE: 15 USC 78m note.>> CONFLICT MINERALS.

    (a) Sense of Congress on Exploitation and Trade of Conflict Minerals 
Originating in the Democratic Republic of the Congo.--It is the sense of 
Congress that the exploitation and trade of conflict minerals 
originating in the Democratic Republic of the Congo is helping to 
finance conflict characterized by extreme levels of violence in the 
eastern Democratic Republic of the Congo, particularly sexual- and 
gender-based violence, and contributing to an emergency humanitarian 
situation therein, warranting the provisions of section 13(p) of the 
Securities Exchange Act of 1934, as added by subsection (b).
    (b) Disclosure Relating to Conflict Minerals Originating in the 
Democratic Republic of the Congo.--Section 13 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78m), as amended by this Act, is amended by 
adding at the end the following new subsection:
    ``(p) Disclosures Relating to Conflict Minerals Originating in the 
Democratic Republic of the Congo.--
            ``(1) Regulations.--
                    ``(A) In general.-- <<NOTE: Deadlines. Effective 
                date. Reports.>> Not later than 270 days after the date 
                of the enactment of this subsection, the Commission 
                shall promulgate regulations requiring any person 
                described in paragraph (2) to disclose annually, 
                beginning with the person's first full fiscal year that 
                begins after the date of promulgation of such 
                regulations, whether conflict minerals that are 
                necessary as described in paragraph (2)(B), in the year 
                for which such reporting is required, did originate in 
                the Democratic Republic of the Congo or an adjoining 
                country and, in cases in which such conflict minerals 
                did originate in any such country, submit to the 
                Commission a report that includes, with respect to the 
                period covered by the report--
                          ``(i) a description of the measures taken by 
                      the person to exercise due diligence on the source 
                      and chain of custody of such minerals, which 
                      measures shall include an independent private 
                      sector audit of such report submitted through the 
                      Commission that is conducted in accordance with 
                      standards established by the Comptroller General 
                      of the United States, in accordance with rules 
                      promulgated by the Commission, in consultation 
                      with the Secretary of State; and

[[Page 124 STAT. 2214]]

                          ``(ii) a description of the products 
                      manufactured or contracted to be manufactured that 
                      are not DRC conflict free (`DRC conflict free' is 
                      defined to mean the products that do not contain 
                      minerals that directly or indirectly finance or 
                      benefit armed groups in the Democratic Republic of 
                      the Congo or an adjoining country), the entity 
                      that conducted the independent private sector 
                      audit in accordance with clause (i), the 
                      facilities used to process the conflict minerals, 
                      the country of origin of the conflict minerals, 
                      and the efforts to determine the mine or location 
                      of origin with the greatest possible specificity.
                    ``(B) Certification.--The person submitting a report 
                under subparagraph (A) shall certify the audit described 
                in clause (i) of such subparagraph that is included in 
                such report. Such a certified audit shall constitute a 
                critical component of due diligence in establishing the 
                source and chain of custody of such minerals.
                    ``(C) Unreliable determination.--If a report 
                required to be submitted by a person under subparagraph 
                (A) relies on a determination of an independent private 
                sector audit, as described under subparagraph (A)(i), or 
                other due diligence processes previously determined by 
                the Commission to be unreliable, the report shall not 
                satisfy the requirements of the regulations promulgated 
                under subparagraph (A)(i).
                    ``(D) DRC conflict free.--For purposes of this 
                paragraph, a product may be labeled as `DRC conflict 
                free' if the product does not contain conflict minerals 
                that directly or indirectly finance or benefit armed 
                groups in the Democratic Republic of the Congo or an 
                adjoining country.
                    ``(E) Information available to the public.-- 
                <<NOTE: Web posting.>> Each person described under 
                paragraph (2) shall make available to the public on the 
                Internet website of such person the information 
                disclosed by such person under subparagraph (A).
            ``(2) Person described.--A person is described in this 
        paragraph if--
                    ``(A) the person is required to file reports with 
                the Commission pursuant to paragraph (1)(A); and
                    ``(B) conflict minerals are necessary to the 
                functionality or production of a product manufactured by 
                such person.
            ``(3) Revisions and waivers.-- 
        <<NOTE: President. Determination.>> The Commission shall revise 
        or temporarily waive the requirements described in paragraph (1) 
        if the President transmits to the Commission a determination 
        that--
                    ``(A) such revision or waiver is in the national 
                security interest of the United States and the President 
                includes the reasons therefor; and
                    ``(B) <<NOTE: Publication.>> establishes a date, not 
                later than 2 years after the initial publication of such 
                exemption, on which such exemption shall expire.
            ``(4) Termination of disclosure requirements.-- 
        <<NOTE: President. Determination. Certification.>> The 
        requirements of paragraph (1) shall terminate on the date on 
        which the President determines and certifies to the appropriate 
        congressional committees, but in no case earlier than

[[Page 124 STAT. 2215]]

        the date that is one day after the end of the 5-year period 
        beginning on the date of the enactment of this subsection, that 
        no armed groups continue to be directly involved and benefitting 
        from commercial activity involving conflict minerals.
            ``(5) Definitions.--For purposes of this subsection, the 
        terms `adjoining country', `appropriate congressional 
        committees', `armed group', and `conflict mineral' have the 
        meaning given those terms under section 1502 of the Dodd-Frank 
        Wall Street Reform and Consumer Protection Act.''.

    (c) Strategy and Map to Address Linkages Between Conflict Minerals 
and Armed Groups.--
            (1) Strategy.--
                    (A) In general.-- <<NOTE: Deadline.>> Not later than 
                180 days after the date of the enactment of this Act, 
                the Secretary of State, in consultation with the 
                Administrator of the United States Agency for 
                International Development, shall submit to the 
                appropriate congressional committees a strategy to 
                address the linkages between human rights abuses, armed 
                groups, mining of conflict minerals, and commercial 
                products.
                    (B) Contents.--The strategy required by subparagraph 
                (A) shall include the following:
                          (i) A plan to promote peace and security in 
                      the Democratic Republic of the Congo by supporting 
                      efforts of the Government of the Democratic 
                      Republic of the Congo, including the Ministry of 
                      Mines and other relevant agencies, adjoining 
                      countries, and the international community, in 
                      particular the United Nations Group of Experts on 
                      the Democratic Republic of Congo, to--
                                    (I) monitor and stop commercial 
                                activities involving the natural 
                                resources of the Democratic Republic of 
                                the Congo that contribute to the 
                                activities of armed groups and human 
                                rights violations in the Democratic 
                                Republic of the Congo; and
                                    (II) develop stronger governance and 
                                economic institutions that can 
                                facilitate and improve transparency in 
                                the cross-border trade involving the 
                                natural resources of the Democratic 
                                Republic of the Congo to reduce 
                                exploitation by armed groups and promote 
                                local and regional development.
                          (ii) A plan to provide guidance to commercial 
                      entities seeking to exercise due diligence on and 
                      formalize the origin and chain of custody of 
                      conflict minerals used in their products and on 
                      their suppliers to ensure that conflict minerals 
                      used in the products of such suppliers do not 
                      directly or indirectly finance armed conflict or 
                      result in labor or human rights violations.
                          (iii) A description of punitive measures that 
                      could be taken against individuals or entities 
                      whose commercial activities are supporting armed 
                      groups and human rights violations in the 
                      Democratic Republic of the Congo.
            (2) Map.--
                    (A) In general.-- <<NOTE: Deadline.>> Not later than 
                180 days after the date of the enactment of this Act, 
                the Secretary of State shall, in accordance with the 
                recommendation of the United

[[Page 124 STAT. 2216]]

                Nations Group of Experts on the Democratic Republic of 
                the Congo in their December 2008 report--
                          (i) produce a map of mineral-rich zones, trade 
                      routes, and areas under the control of armed 
                      groups in the Democratic Republic of the Congo and 
                      adjoining countries based on data from multiple 
                      sources, including--
                                    (I) the United Nations Group of 
                                Experts on the Democratic Republic of 
                                the Congo;
                                    (II) the Government of the 
                                Democratic Republic of the Congo, the 
                                governments of adjoining countries, and 
                                the governments of other Member States 
                                of the United Nations; and
                                    (III) local and international 
                                nongovernmental organizations;
                          (ii) <<NOTE: Public information.>> make such 
                      map available to the public; and
                          (iii) provide to the appropriate congressional 
                      committees an explanatory note describing the 
                      sources of information from which such map is 
                      based and the identification, where possible, of 
                      the armed groups or other forces in control of the 
                      mines depicted.
                    (B) Designation.--The map required under 
                subparagraph (A) shall be known as the ``Conflict 
                Minerals Map'', and mines located in areas under the 
                control of armed groups in the Democratic Republic of 
                the Congo and adjoining countries, as depicted on such 
                Conflict Minerals Map, shall be known as ``Conflict Zone 
                Mines''.
                    (C) Updates.-- <<NOTE: Deadline.>> The Secretary of 
                State shall update the map required under subparagraph 
                (A) not less frequently than once every 180 days until 
                the date on which the disclosure requirements under 
                paragraph (1) of section 13(p) of the Securities 
                Exchange Act of 1934, as added by subsection (b), 
                terminate in accordance with the provisions of paragraph 
                (4) of such section 13(p).
                    (D) Publication in federal register.--The Secretary 
                of State shall add minerals to the list of minerals in 
                the definition of conflict minerals under section 1502, 
                as appropriate. <<NOTE: Notice. Deadline.>> The 
                Secretary shall publish in the Federal Register notice 
                of intent to declare a mineral as a conflict mineral 
                included in such definition not later than one year 
                before such declaration.

    (d) Reports.--
            (1) Baseline report.--Not later than 1 year after the date 
        of the enactment of this Act and annually thereafter until the 
        termination of the disclosure requirements under section 13(p) 
        of the Securities Exchange Act of 1934, the Comptroller General 
        of the United States shall submit to appropriate congressional 
        committees a report that includes an assessment of the rate of 
        sexual- and gender-based violence in war-torn areas of the 
        Democratic Republic of the Congo and adjoining countries.
            (2) Regular report on effectiveness.--Not later than 2 years 
        after the date of the enactment of this Act and annually 
        thereafter, the Comptroller General of the United States shall 
        submit to the appropriate congressional committees a report that 
        includes the following:

[[Page 124 STAT. 2217]]

                    (A) An assessment of the effectiveness of section 
                13(p) of the Securities Exchange Act of 1934, as added 
                by subsection (b), in promoting peace and security in 
                the Democratic Republic of the Congo and adjoining 
                countries.
                    (B) A description of issues encountered by the 
                Securities and Exchange Commission in carrying out the 
                provisions of such section 13(p).
                    (C)(i) A general review of persons described in 
                clause (ii) and whether information is publicly 
                available about--
                          (I) the use of conflict minerals by such 
                      persons; and
                          (II) whether such conflict minerals originate 
                      from the Democratic Republic of the Congo or an 
                      adjoining country.
                    (ii) A person is described in this clause if--
                          (I) the person is not required to file reports 
                      with the Securities and Exchange Commission 
                      pursuant to section 13(p)(1)(A) of the Securities 
                      Exchange Act of 1934, as added by subsection (b); 
                      and
                          (II) conflict minerals are necessary to the 
                      functionality or production of a product 
                      manufactured by such person.
            (3) Report on private sector auditing.--Not later than 30 
        months after the date of the enactment of this Act, and annually 
        thereafter, the Secretary of Commerce shall submit to the 
        appropriate congressional committees a report that includes the 
        following:
                    (A) An assessment of the accuracy of the independent 
                private sector audits and other due diligence processes 
                described under section 13(p) of the Securities Exchange 
                Act of 1934.
                    (B) Recommendations for the processes used to carry 
                out such audits, including ways to--
                          (i) improve the accuracy of such audits; and
                          (ii) establish standards of best practices.
                    (C) A listing of all known conflict mineral 
                processing facilities worldwide.

    (e) Definitions.--For purposes of this section:
            (1) Adjoining country.--The term ``adjoining country'', with 
        respect to the Democratic Republic of the Congo, means a country 
        that shares an internationally recognized border with the 
        Democratic Republic of the Congo.
            (2) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Appropriations, the Committee 
                on Foreign Affairs, the Committee on Ways and Means, and 
                the Committee on Financial Services of the House of 
                Representatives; and
                    (B) the Committee on Appropriations, the Committee 
                on Foreign Relations, the Committee on Finance, and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate.
            (3) Armed group.--The term ``armed group'' means an armed 
        group that is identified as perpetrators of serious human rights 
        abuses in the annual Country Reports on Human Rights Practices 
        under sections 116(d) and 502B(b) of the Foreign Assistance Act 
        of 1961 (22 U.S.C. 2151n(d) and 2304(b)) relating

[[Page 124 STAT. 2218]]

        to the Democratic Republic of the Congo or an adjoining country.
            (4) Conflict mineral.--The term ``conflict mineral'' means--
                    (A) columbite-tantalite (coltan), cassiterite, gold, 
                wolframite, or their derivatives; or
                    (B) any other mineral or its derivatives determined 
                by the Secretary of State to be financing conflict in 
                the Democratic Republic of the Congo or an adjoining 
                country.
            (5) Under the control of armed groups.--The term ``under the 
        control of armed groups'' means areas within the Democratic 
        Republic of the Congo or adjoining countries in which armed 
        groups--
                    (A) physically control mines or force labor of 
                civilians to mine, transport, or sell conflict minerals;
                    (B) tax, extort, or control any part of trade routes 
                for conflict minerals, including the entire trade route 
                from a Conflict Zone Mine to the point of export from 
                the Democratic Republic of the Congo or an adjoining 
                country; or
                    (C) tax, extort, or control trading facilities, in 
                whole or in part, including the point of export from the 
                Democratic Republic of the Congo or an adjoining 
                country.
SEC. 1503. <<NOTE: 15 USC 78m-2.>> REPORTING REQUIREMENTS 
                          REGARDING COAL OR OTHER MINE SAFETY.

    (a) Reporting Mine Safety Information.--Each issuer that is required 
to file reports pursuant to section 13(a) or 15(d) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78m, 78o) and that is an operator, or 
that has a subsidiary that is an operator, of a coal or other mine shall 
include, in each periodic report filed with the Commission under the 
securities laws on or after the date of enactment of this Act, the 
following information for the time period covered by such report:
            (1) For each coal or other mine of which the issuer or a 
        subsidiary of the issuer is an operator--
                    (A) the total number of violations of mandatory 
                health or safety standards that could significantly and 
                substantially contribute to the cause and effect of a 
                coal or other mine safety or health hazard under section 
                104 of the Federal Mine Safety and Health Act of 1977 
                (30 U.S.C. 814) for which the operator received a 
                citation from the Mine Safety and Health Administration;
                    (B) the total number of orders issued under section 
                104(b) of such Act (30 U.S.C. 814(b));
                    (C) the total number of citations and orders for 
                unwarrantable failure of the mine operator to comply 
                with mandatory health or safety standards under section 
                104(d) of such Act (30 U.S.C. 814(d));
                    (D) the total number of flagrant violations under 
                section 110(b)(2) of such Act (30 U.S.C. 820(b)(2));
                    (E) the total number of imminent danger orders 
                issued under section 107(a) of such Act (30 U.S.C. 
                817(a));
                    (F) the total dollar value of proposed assessments 
                from the Mine Safety and Health Administration under 
                such Act (30 U.S.C. 801 et seq.); and
                    (G) the total number of mining-related fatalities.

[[Page 124 STAT. 2219]]

            (2) A list of such coal or other mines, of which the issuer 
        or a subsidiary of the issuer is an operator, that receive 
        written notice from the Mine Safety and Health Administration 
        of--
                    (A) a pattern of violations of mandatory health or 
                safety standards that are of such nature as could have 
                significantly and substantially contributed to the cause 
                and effect of coal or other mine health or safety 
                hazards under section 104(e) of such Act (30 U.S.C. 
                814(e)); or
                    (B) the potential to have such a pattern.
            (3) Any pending legal action before the Federal Mine Safety 
        and Health Review Commission involving such coal or other mine.

    (b) Reporting Shutdowns and Patterns of Violations.--
Beginning <<NOTE: Effective date.>> on and after the date of enactment 
of this Act, each issuer that is an operator, or that has a subsidiary 
that is an operator, of a coal or other mine shall file a current report 
with the Commission on Form 8-K (or any successor form) disclosing the 
following regarding each coal or other mine of which the issuer or 
subsidiary is an operator:
            (1) The receipt of an imminent danger order issued under 
        section 107(a) of the Federal Mine Safety and Health Act of 1977 
        (30 U.S.C. 817(a)).
            (2) The receipt of written notice from the Mine Safety and 
        Health Administration that the coal or other mine has--
                    (A) a pattern of violations of mandatory health or 
                safety standards that are of such nature as could have 
                significantly and substantially contributed to the cause 
                and effect of coal or other mine health or safety 
                hazards under section 104(e) of such Act (30 U.S.C. 
                814(e)); or
                    (B) the potential to have such a pattern.

    (c) Rule of Construction.--Nothing in this section shall be 
construed to affect any obligation of a person to make a disclosure 
under any other applicable law in effect before, on, or after the date 
of enactment of this Act.
    (d) Commission Authority.--
            (1) Enforcement.--A violation by any person of this section, 
        or any rule or regulation of the Commission issued under this 
        section, shall be treated for all purposes in the same manner as 
        a violation of the Securities Exchange Act of 1934 (15 U.S.C. 
        78a et seq.) or the rules and regulations issued thereunder, 
        consistent with the provisions of this section, and any such 
        person shall be subject to the same penalties, and to the same 
        extent, as for a violation of such Act or the rules or 
        regulations issued thereunder.
            (2) Rules and regulations.--The Commission is authorized to 
        issue such rules or regulations as are necessary or appropriate 
        for the protection of investors and to carry out the purposes of 
        this section.

    (e) Definitions.--In this section--
            (1) the terms ``issuer'' and ``securities laws'' have the 
        meaning given the terms in section 3 of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c);
            (2) the term ``coal or other mine'' means a coal or other 
        mine, as defined in section 3 of the Federal Mine Safety and 
        Health Act of 1977 (30 U.S.C. 802), that is subject to the 
        provisions of such Act (30 U.S.C. 801 et seq.); and

[[Page 124 STAT. 2220]]

            (3) the term ``operator'' has the meaning given the term in 
        section 3 of the Federal Mine Safety and Health Act of 1977 (30 
        U.S.C. 802).

    (f) Effective Date.--This section shall take effect on the day that 
is 30 days after the date of enactment of this Act.
SEC. 1504. DISCLOSURE OF PAYMENTS BY RESOURCE EXTRACTION ISSUERS.

    Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m), 
as amended by this Act, is amended by adding at the end the following:
    ``(q) Disclosure of Payments by Resource Extraction Issuers.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `commercial development of oil, 
                natural gas, or minerals' includes exploration, 
                extraction, processing, export, and other significant 
                actions relating to oil, natural gas, or minerals, or 
                the acquisition of a license for any such activity, as 
                determined by the Commission;
                    ``(B) the term `foreign government' means a foreign 
                government, a department, agency, or instrumentality of 
                a foreign government, or a company owned by a foreign 
                government, as determined by the Commission;
                    ``(C) the term `payment'--
                          ``(i) means a payment that is--
                                    ``(I) made to further the commercial 
                                development of oil, natural gas, or 
                                minerals; and
                                    ``(II) not de minimis; and
                          ``(ii) includes taxes, royalties, fees 
                      (including license fees), production entitlements, 
                      bonuses, and other material benefits, that the 
                      Commission, consistent with the guidelines of the 
                      Extractive Industries Transparency Initiative (to 
                      the extent practicable), determines are part of 
                      the commonly recognized revenue stream for the 
                      commercial development of oil, natural gas, or 
                      minerals;
                    ``(D) the term `resource extraction issuer' means an 
                issuer that--
                          ``(i) is required to file an annual report 
                      with the Commission; and
                          ``(ii) engages in the commercial development 
                      of oil, natural gas, or minerals;
                    ``(E) the term `interactive data format' means an 
                electronic data format in which pieces of information 
                are identified using an interactive data standard; and
                    ``(F) the term `interactive data standard' means 
                standardized list of electronic tags that mark 
                information included in the annual report of a resource 
                extraction issuer.
            ``(2) Disclosure.--
                    ``(A) Information required.-- 
                <<NOTE: Deadline. Regulations. Reports.>> Not later than 
                270 days after the date of enactment of the Dodd-Frank 
                Wall Street Reform and Consumer Protection Act, the 
                Commission shall issue final rules that require each 
                resource extraction issuer to include in an annual 
                report of the resource extraction issuer information 
                relating to any payment made by the resource extraction 
                issuer, a subsidiary of the resource

[[Page 124 STAT. 2221]]

                extraction issuer, or an entity under the control of the 
                resource extraction issuer to a foreign government or 
                the Federal Government for the purpose of the commercial 
                development of oil, natural gas, or minerals, 
                including--
                          ``(i) the type and total amount of such 
                      payments made for each project of the resource 
                      extraction issuer relating to the commercial 
                      development of oil, natural gas, or minerals; and
                          ``(ii) the type and total amount of such 
                      payments made to each government.
                    ``(B) Consultation in rulemaking.--In issuing rules 
                under subparagraph (A), the Commission may consult with 
                any agency or entity that the Commission determines is 
                relevant.
                    ``(C) Interactive data format.--The rules issued 
                under subparagraph (A) shall require that the 
                information included in the annual report of a resource 
                extraction issuer be submitted in an interactive data 
                format.
                    ``(D) Interactive data standard.--
                          ``(i) In general.--The rules issued under 
                      subparagraph (A) shall establish an interactive 
                      data standard for the information included in the 
                      annual report of a resource extraction issuer.
                          ``(ii) Electronic tags.--The interactive data 
                      standard shall include electronic tags that 
                      identify, for any payments made by a resource 
                      extraction issuer to a foreign government or the 
                      Federal Government--
                                    ``(I) the total amounts of the 
                                payments, by category;
                                    ``(II) the currency used to make the 
                                payments;
                                    ``(III) the financial period in 
                                which the payments were made;
                                    ``(IV) the business segment of the 
                                resource extraction issuer that made the 
                                payments;
                                    ``(V) the government that received 
                                the payments, and the country in which 
                                the government is located;
                                    ``(VI) the project of the resource 
                                extraction issuer to which the payments 
                                relate; and
                                    ``(VII) such other information as 
                                the Commission may determine is 
                                necessary or appropriate in the public 
                                interest or for the protection of 
                                investors.
                    ``(E) International transparency efforts.--To the 
                extent practicable, the rules issued under subparagraph 
                (A) shall support the commitment of the Federal 
                Government to international transparency promotion 
                efforts relating to the commercial development of oil, 
                natural gas, or minerals.
                    ``(F) Effective date.--With respect to each resource 
                extraction issuer, the final rules issued under 
                subparagraph (A) shall take effect on the date on which 
                the resource extraction issuer is required to submit an 
                annual report relating to the fiscal year of the 
                resource extraction issuer that ends not earlier than 1 
                year after the date on which the Commission issues final 
                rules under subparagraph (A).
            ``(3) Public availability of information.--

[[Page 124 STAT. 2222]]

                    ``(A) In general.-- <<NOTE: Web posting.>> To the 
                extent practicable, the Commission shall make available 
                online, to the public, a compilation of the information 
                required to be submitted under the rules issued under 
                paragraph (2)(A).
                    ``(B) Other information.--Nothing in this paragraph 
                shall require the Commission to make available online 
                information other than the information required to be 
                submitted under the rules issued under paragraph (2)(A).
            ``(4) Authorization of appropriations.--There are authorized 
        to be appropriated to the Commission such sums as may be 
        necessary to carry out this subsection.''.
SEC. 1505. STUDY BY THE COMPTROLLER GENERAL.

    (a) In General.-- <<NOTE: Deadline. Reports.>> Not later than 1 year 
after the date of enactment of this Act, the Comptroller General of the 
United States shall issue a report assessing the relative independence, 
effectiveness, and expertise of presidentially appointed inspectors 
general and inspectors general of designated Federal entities, as such 
term is defined under section 8G of the Inspector General Act of 1978, 
and the effects on independence of the amendments to the Inspector 
General Act of 1978 made by this Act.

    (b) Report.--The report required by subsection (a) shall be issued 
to the Committees on Financial Services and Oversight and Government 
Reform of the House of Representatives and the Committees on Banking, 
Housing, and Urban Affairs and Homeland Security and Governmental 
Affairs of the Senate.
SEC. 1506. STUDY ON CORE DEPOSITS AND BROKERED DEPOSITS.

    (a) Study.--The Corporation shall conduct a study to evaluate--
            (1) the definition of core deposits for the purpose of 
        calculating the insurance premiums of banks;
            (2) the potential impact on the Deposit Insurance Fund of 
        revising the definitions of brokered deposits and core deposits 
        to better distinguish between them;
            (3) an assessment of the differences between core deposits 
        and brokered deposits and their role in the economy and banking 
        sector of the United States;
            (4) the potential stimulative effect on local economies of 
        redefining core deposits; and
            (5) the competitive parity between large institutions and 
        community banks that could result from redefining core deposits.

    (b) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Corporation shall submit to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Financial Services of the House of Representatives a report on the 
results of the study under subsection (a) that includes legislative 
recommendations, if any, to address concerns arising in connection with 
the definitions of core deposits and brokered deposits.

[[Page 124 STAT. 2223]]

                    TITLE XVI--SECTION 1256 CONTRACTS

SEC. 1601. CERTAIN SWAPS, ETC., NOT TREATED AS SECTION 1256 
                          CONTRACTS.

    (a) In General.--Subsection (b) of section 1256 of the Internal 
Revenue Code of 1986 <<NOTE: 26 USC 1256.>> is amended--
            (1) by redesignating paragraphs (1) through (5) as 
        subparagraphs (A) through (E), respectively, and by indenting 
        such subparagraphs (as so redesignated) accordingly,
            (2) by striking ``For purposes of'' and inserting the 
        following:
            ``(1) In general.--For purposes of'', and
            (3) by striking the last sentence and inserting the 
        following new paragraph:
            ``(2) Exceptions.--The term `section 1256 contract' shall 
        not include--
                    ``(A) any securities futures contract or option on 
                such a contract unless such contract or option is a 
                dealer securities futures contract, or
                    ``(B) any interest rate swap, currency swap, basis 
                swap, interest rate cap, interest rate floor, commodity 
                swap, equity swap, equity index swap, credit default 
                swap, or similar agreement.''.

    (b) <<NOTE: 26 USC 1256 note.>>  Effective Date.--The amendments 
made by this section shall apply to taxable years beginning after the 
date of the enactment of this Act.

    Approved July 21, 2010.

LEGISLATIVE HISTORY--H.R. 4173 (S. 3217):
---------------------------------------------------------------------------

HOUSE REPORTS: No. 111-517 (Comm. of Conference).
SENATE REPORTS: No. 111-176 (Comm. on Banking, Housing, and Urban 
Affairs) accompanying S. 3217.
CONGRESSIONAL RECORD:
                                                        Vol. 155 (2009):
                                    Dec. 9-11, considered and passed 
                                        House.
                                                        Vol. 156 (2010):
                                    May 20, considered and passed 
                                        Senate, amended, in lieu of       
                                        S. 3217.
                                    June 30, House agreed to conference 
                                        report.
                                    July 13, 15, Senate considered and 
                                        agreed to conference report.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010):
            July 21, Presidential remarks.

                                  <all>