[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3652 Introduced in Senate (IS)]
110th CONGRESS
2d Session
S. 3652
To provide for financial market investigation, oversight, and reform.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 29 (legislative day, September 17), 2008
Ms. Cantwell (for herself and Mr. Lieberman) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To provide for financial market investigation, oversight, and reform.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial Market
Investigation, Oversight, and Reform Act of 2008''.
(1) Table of contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Establishing an independent, bipartisan Commission.
Sec. 3. Establishing a joint select committee on financial market
oversight reform and investigations.
Sec. 4. Special Inspector General for financial markets oversight.
SEC. 2. ESTABLISHING AN INDEPENDENT, BIPARTISAN COMMISSION.
(a) Commission Establishment.--There is established a temporary
commission to be known as the Commission on Financial Regulatory Reform
(referred to in this Act as the ``Commission''). The Commission shall
review the financial regulatory structure and propose a comprehensive
framework for fundamental reform of financial regulation in the United
States.
(b) Functions of the Commission.--
(1) In general.--The Commission shall conduct a top-to-
bottom review of the Nation's existing financial regulatory
structure and the contribution of the current structure to the
stability or instability of financial markets in order to
develop a comprehensive framework for--
(A) reforming the laws governing our Nation's
financial markets;
(B) strengthening and reconstituting regulatory
agencies; and
(C) improving transparency and oversight.
(2) Analysis.--In the course of its activities, the
Commission shall analyze--
(A) the impact of the financial regulatory
structure on the health and stability of the United
States economy;
(B) the strength, sustainability, and
competitiveness of the Nation's financial institutions;
and
(C) the financial well-being of American taxpayers,
investors, and businesses.
(3) Considerations.--The Commission shall review and
consider all aspects of financial regulation, including the
regulation of--
(A) bank holding companies, financial holding
companies, commercial banks, investment banks, thrifts,
credit unions, and industrial loan companies;
(B) payment and settlement systems;
(C) hedge funds, private equity funds, and the
markets for alternative investments;
(D) special purpose vehicles and off-balance sheet
financing for financial companies;
(E) the securitization of mortgages and other
assets;
(F) exchange-based, electronic, and over-the-
counter markets for financial derivative products;
(G) the mortgage finance industry, including
mortgage brokers and mortgage lending institutions;
(H) equity markets, including short-selling
practices, and commodity futures markets; and
(I) the insurance industry and its role in the
financial markets.
(c) Powers of the Commission.--
(1) In general.--
(A) Hearings and evidence.--The Commission or, on
the authority of the Commission, any subcommittee or
member thereof, may, for the purpose of carrying out
this Act--
(i) hold such hearings and sit and act at
such times and places, take such testimony,
receive such evidence, administer such oaths;
and
(ii) require the attendance and testimony
of such witnesses and the production of such
books, records, correspondence, memoranda,
papers, and documents, as the Commission or
such designated subcommittee or designated
member may determine advisable.
(B) First meeting.--The first meeting of the
Commission shall occur not later than 30 days after the
date of enactment of this Act.
(2) Contracting.--The Commission may, to such extent and in
such amounts as are provided in appropriation Acts, enter into
contracts to enable the Commission to discharge its duties
under this Act.
(3) Information from federal agencies.--
(A) In general.--The Commission is authorized to
secure directly from any executive department, bureau,
agency, board, commission, office, independent
establishment, or instrumentality of the Government,
information, suggestions, estimates, and statistics for
the purposes of this Act. Each department, bureau,
agency, board, commission, office, independent
establishment, or instrumentality shall, to the extent
authorized by law, furnish such information,
suggestions, estimates, and statistics directly to the
Commission, upon request made by the chairman, the
chairman of any subcommittee created by a majority of
the Commission, or any member designated by a majority
of the Commission.
(B) Receipt, handling, storage, and
dissemination.--Information shall only be received,
handled, stored, and disseminated by members of the
Commission and its staff consistent with all applicable
statutes, regulations, and Executive orders.
(4) Assistance from federal agencies.--
(A) General services administration.--The
Administrator of General Services shall provide to the
Commission on a reimbursable basis administrative
support and other services for the performance of the
Commission's functions.
(B) Other departments and agencies.--In addition to
the assistance prescribed in subparagraph (A),
departments and agencies of the United States may
provide to the Commission such services, funds,
facilities, staff, and other support services as they
may determine advisable and as may be authorized by
law.
(5) Gifts.--The Commission may accept, use, and dispose of
gifts or donations of services or property.
(6) Postal services.--The Commission may use the United
States mails in the same manner and under the same conditions
as departments and agencies of the United States.
(d) Non-Applicability of Federal Advisory Committee Act.--
(1) In general.--The Federal Advisory Committee Act (5
U.S.C. App.) shall not apply to the Commission.
(2) Public meetings and release of public versions of
reports.--The Commission shall--
(A) hold public hearings and meetings to the extent
appropriate; and
(B) release public versions of the reports required
under this Act.
(3) Public hearings.--Any public hearings of the Commission
shall be conducted in a manner consistent with the protection
of information provided to or developed for or by the
Commission as required by any applicable statute, regulation,
or Executive order.
(e) Composition.--
(1) In general.--The Commission shall be composed of 12
members, selected not later than 15 days after the date of
enactment of this Act, of whom--
(A) three persons shall be appointed by the
majority leader of the Senate, after consultation with
the Chairman of the Committee on Banking, Housing and
Urban Affairs;
(B) three persons shall be appointed by the
minority leader of the Senate, after consultation with
the ranking minority members of the Committee on
Banking, Housing and Urban Affairs;
(C) three persons shall be appointed by the Speaker
of the House of Representatives, after consultation
with the Chairman of the Committee on Financial
Services; and
(D) three persons shall be appointed by the
minority leader of the House of Representatives, after
consultation with the ranking minority member of the
Committee on Financial Services.
(2) Qualifications.--An individual appointed may not be an
officer or employee of the Federal Government or any State or
local government. It is the sense of Congress that individuals
appointed to the Commission should be have national recognition
as financial sector experts, and may include former government
officials, private market participants, and representatives of
the academic community,
(3) Officers.--Officers of the Commission are to be chosen
by the Commission's membership.
(f) Final Report of Commission.--Not later than 120 days after the
date of the enactment of this Act, the Commission shall submit to the
President and Congress a final report containing such findings,
conclusions, and recommendations for corrective measures as have been
agreed to by a majority of committee members.
(g) Compensation of Commission Staff.--
(1) In general.--
(A) Appointment and compensation.--The chairman, in
consultation with vice chairman, in accordance with
rules agreed upon by the Commission, may appoint and
fix the compensation of a staff director and such other
personnel as may be necessary to enable the Commission
to carry out its functions, without regard to the
provisions of title 5, United States Code, governing
appointments in the competitive service, and without
regard to the provisions of chapter 51 and subchapter
III of chapter 53 of such title relating to
classification and General Schedule pay rates, except
that no rate of pay fixed under this subsection may
exceed the equivalent of that payable for a position at
level V of the Executive Schedule under section 5316 of
title 5, United States Code.
(B) Personnel as federal employees.--
(i) In general.--The executive director and
any personnel of the Commission who are
employees shall be employees under section 2105
of title 5, United States Code, for purposes of
chapters 63, 81, 83, 84, 85, 87, 89, and 90 of
that title.
(ii) Members of commission.--Subparagraph
(A) shall not be construed to apply to members
of the Commission.
(2) Detailees.--Any Federal Government employee may be
detailed to the Commission without reimbursement from the
Commission, and such detailee shall retain the rights, status,
and privileges of his or her regular employment without
interruption.
(3) Consultant services.--The Commission is authorized to
procure the services of experts and consultants in accordance
with section 3109 of title 5, United States Code, but at rates
not to exceed the daily rate paid a person occupying a position
at level IV of the Executive Schedule under section 5315 of
title 5, United States Code.
(h) Compensation and Travel Expenses.--
(1) Compensation.--Each member of the Commission may be
compensated at not to exceed the daily equivalent of the annual
rate of basic pay in effect for a position at level IV of the
Executive Schedule under section 5315 of title 5, United States
Code, for each day during which that member is engaged in the
actual performance of the duties of the Commission.
(2) Travel expenses.--While away from their homes or
regular places of business in the performance of services for
the Commission, members of the Commission shall 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.
(i) Reports of Commission; Termination.--
(1) Interim reports.--The Commission may submit to the
President and Congress interim reports containing such
findings, conclusions, and recommendations for corrective
measures as have been agreed to by a majority of Commission
members.
(2) Final report.--Not later than 4 months after the date
of the enactment of this Act, the Commission shall submit to
the President and Congress a final report containing such
findings, conclusions, and recommendations for corrective
measures as have been agreed to by a majority of Commission
members.
(3) Termination.--
(A) In general.--The Commission, and all the
authorities of this Act, shall terminate 60 days after
the date on which the final report is submitted under
paragraph (2).
(B) Administrative activities before termination.--
The Commission may use the 60-day period referred to in
subparagraph (A) for the purpose of concluding its
activities, including providing testimony to committees
of Congress concerning its reports and disseminating
the final report.
(j) Funding.--
(1) Transfer from the department of the treasury tarp
program.--Of the amounts authorized to be appropriated by this
Act and made available in public law for the, not to exceed
$5,000,000 shall be available for transfer to the Commission
for purposes of the activities of the Commission under this Act
and should include assistance for participating Federal
agencies.
(2) Duration of availability.--Amounts made available to
the Commission under paragraph (1) shall remain available until
the termination of the Commission.
SEC. 3. ESTABLISHING A JOINT SELECT COMMITTEE ON FINANCIAL MARKET
OVERSIGHT REFORM AND INVESTIGATIONS.
(a) Establishment and Composition.--
(1) In general.--There is established a multi-disciplinary
Joint Select Committee on Financial Market Oversight Reform and
Investigations (referred to in this section as the ``joint
select committee''). The Senate majority leader, Senate
minority leader, the Speaker of the House, and House minority
leader shall jointly determine the number of members who shall
serve on the committee, with equal representation from each the
Senate and the House of Representatives, and from the majority
party and minority party.
(2) Purpose.--The purpose of the joint select committee
shall be to conduct a full investigation of the causes of the
financial turmoil and propose corrective actions to the
appropriate committees of jurisdiction.
(3) Vacancy.--A vacancy in the joint select committee shall
not affect the power of the remaining members to execute the
functions of the joint select committee, and shall be filled in
the same manner as the original selection.
(4) Legislative authority.--The joint select committee
shall not have any legislative authority.
(b) Investigation and Report.--
(1) Investigation.--The joint select committee shall--
(A) conduct a full investigation of the causes of
the financial turmoil; and
(B) possess full investigative authority, including
subpoena power, to investigate misdeeds, manipulative
schemes, or malfeasance by executives and traders of
financial sector firms involved in the current
financial crisis, as well as failures of Federal
oversight agencies to meet their regulatory
responsibilities.
(2) Report.--
(A) In general.--The joint select committee shall
submit to the appropriate committees of jurisdiction of
the House of Representatives and the Senate a report of
its findings and recommended corrective actions not
later than 12 months after the date of enactment of
this Act.
(B) Fraud.--The report shall include
recommendations whether to increase criminal and civil
penalties for fraud and malfeasance.
(C) Majority vote requirement.--No recommendation
shall be made by the joint select committee except upon
the majority vote of the members from each House,
respectively.
(D) Rules procedure.--Notwithstanding any other
provision of this section, any recommendation with
respect to the rules and procedures of one House that
only affects matters related solely to that House may
only be made and voted on by members of the joint
select committee from that House and, upon its adoption
by a majority of such members, shall be considered to
have been adopted by the full committee as a
recommendation of the joint select committee.
(3) Hearings.--In conducting the investigation under
paragraph (1), the joint select committee shall hold not fewer
than 5 public hearings.
(c) Resources.--The joint select committee may utilize the
resources of the House of Representatives and Senate.
(d) Dissolution.--The joint select committee shall cease to exist
30 days after the submission of the report described in subsection
(b)(2).
SEC. 4. SPECIAL INSPECTOR GENERAL FOR FINANCIAL MARKETS OVERSIGHT.
(a) Purposes.--The purposes of this section are to--
(1) provide for the appointment of an Inspector General to
conduct, supervise, and coordinate investigations into whether
ethics violations or conflicts of interest between regulators
and their regulated entities or markets may have affected
agency decision-making between January 2002 and August 2008;
and
(2) use the forum of President's Council on Integrity and
Efficiency and Executive Council on Integrity and Efficiency to
share findings and best practices with regards to ethics,
conflicts of interest, oversight, and accountability.
(b) Office of Inspector General.--There is established the Office
of the Inspector General for Financial Markets Oversight.
(c) Appointment of Inspector General; Removal.--
(1) In general.--The head of the Office of the Inspector
General for Financial Markets Oversight (referred to in this
section as ``Inspector General'') shall be selected by and
among the Inspectors General of agencies and commissions set
forth in subsection (e)(3).
(2) Timing.--The nomination of an individual as Inspector
General shall be made not later than 30 days after the date of
the enactment of this Act.
(3) Removal.--The Inspector General shall be removable from
office in accordance with the provisions of section 3(b) of the
Inspector General Act of 1978 (5 U.S.C. App.).
(4) Status.--For purposes of section 7324 of title 5,
United States Code, the Inspector General shall not be
considered an employee who determines policies to be pursued by
the United States in the nationwide administration of Federal
law.
(5) Pay.--The annual rate of basic pay of the Inspector
General shall be the annual rate of basic pay provided for
positions at level IV of the Executive Schedule under section
5315 of title 5, United States Code.
(d) Assistant Inspectors General.--The Inspector General shall, in
accordance with applicable laws and regulations governing the civil
service appoint an Assistant Inspector General for Investigations who
shall have the responsibility for supervising the performance of
investigative activities relating to possible ethics violations and or
conflicts of interest at the respective agencies.
(e) Duties.--
(1) In general.--It shall be the duty of the Inspector
General to conduct, supervise, and coordinate investigations
into whether ethics violations or conflicts of interest between
regulators and their regulated entities or markets may have
affected agency decision-making between January 2002 and August
2008.
(2) Additional duties.--In addition to the duties specified
in paragraph (1), the Inspector General shall also have the
duties and responsibilities of inspectors general under the
Inspector General Act of 1978.
(3) Cooperation.--In carrying out the duties,
responsibilities, and authorities of the Inspector General
under this section, the Inspector General shall coordinate
with, and receive the cooperation of, each of the following:
(A) The Inspector General of the Securities and
Exchange Commission.
(B) The Inspector General of the Treasury
Department.
(C) The Inspector General of the Commodities
Futures Trading Commission.
(D) The Inspector General of the Board of Governors
of the Federal Reserve System.
(E) The Inspector General of the Office of the
Comptroller of the Currency.
(F) The Inspector General of the Federal Deposit
Insurance Corporation.
(f) Powers and Authorities.--
(1) Authorities.--In carrying out the duties specified in
subsection (e), the Inspector General shall have the
authorities provided in section 6 of the Inspector General Act
of 1978.
(2) Duties.--The Inspector General shall carry out the
duties specified in subsection (e)(1) in accordance with
section 4(b)(1) of the Inspector General Act of 1978.
(g) Personnel, Facilities, and Other Resources.--
(1) Personnel.--The Inspector General may select, appoint,
and employ such officers and employees as may be necessary for
carrying out the duties of the Inspector General, subject to
the provisions of title 5, United States Code, governing
appointments in the competitive service, and the provisions of
chapter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay rates.
(2) Services.--The Inspector General may obtain services as
authorized by section 3109 of title 5, United States Code, at
daily rates not to exceed the equivalent rate prescribed for
grade GS-15 of the General Schedule by section 5332 of such
title.
(3) Information.--
(A) In general.--Upon request of the Inspector
General for information or assistance from any
department, agency, or other entity of the Federal
Government, the head of such entity shall, insofar as
is practicable and not in contravention of any existing
law, furnish such information or assistance to the
Inspector General, or an authorized designee.
(B) Report of noncooperation.--Whenever information
or assistance requested by the Inspector General is, in
the judgment of the Inspector General, unreasonably
refused or not provided, the Inspector General shall
report the circumstances to the appropriate committees
of Congress without delay.
(h) Reports.--
(1) In general.--Not later than March 30, 2009, the
Inspector General shall submit to the appropriate committees of
Congress a report on whether ethics violations or conflicts of
interest between regulators and their regulated entities or
markets may have affected agency decision-making between
January 2002 and August 2008.
(2) Contents.--The report on the Inspector General findings
shall include recommendations on how to improve and strengthen
financial market regulatory agencies to avert future ethics
violations or conflicts of interest.
(i) Appropriate Committees of Congress Defined.--In this section,
the term ``appropriate committees of Congress'' means--
(1) the Committees on Banking, Housing and Urban Affairs,
Homeland Security and Government Affairs, Finance, and
Judiciary of the Senate;
(2) the Committees on Financial Services, Oversight and
Government Reform, and Judiciary of the House of
Representatives; and
(3) the Joint Select Committee on Financial Market
Oversight Reform and Investigations.
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