[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5461 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 5461
To clarify the application of certain leverage and risk-based
requirements under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, to improve upon the definitions provided for points and
fees in connection with a mortgage transaction, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 15, 2014
Mr. Barr (for himself, Mr. Gary G. Miller of California, Mr. Huizenga
of Michigan, and Mr. David Scott of Georgia) introduced the following
bill; which was referred to the Committee on Financial Services, and in
addition to the Committee on Agriculture, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To clarify the application of certain leverage and risk-based
requirements under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, to improve upon the definitions provided for points and
fees in connection with a mortgage transaction, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Table of contents.
TITLE I--INSURANCE CAPITAL STANDARDS
Sec. 101. Short title.
Sec. 102. Clarification of application of leverage and risk-based
capital requirements.
TITLE II--COLLATERALIZED LOAN OBLIGATIONS
Sec. 201. Short title.
Sec. 202. Rules of construction relating to collateralized loan
obligations.
TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS
Sec. 301. Short title.
Sec. 302. Definition of points and fees.
Sec. 303. Rulemaking.
TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION
Sec. 401. Short title.
Sec. 402. Margin requirements.
Sec. 403. Implementation.
TITLE I--INSURANCE CAPITAL STANDARDS
SEC. 101. SHORT TITLE.
This title may be cited as the ``Insurance Capital Standards
Clarification Act of 2014''.
SEC. 102. CLARIFICATION OF APPLICATION OF LEVERAGE AND RISK-BASED
CAPITAL REQUIREMENTS.
Section 171 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5371) is amended--
(1) in subsection (a), by adding at the end the following:
``(4) Business of insurance.--The term `business of
insurance' has the same meaning as in section 1002(3).
``(5) Person regulated by a state insurance regulator.--The
term `person regulated by a State insurance regulator' has the
same meaning as in section 1002(22).
``(6) Regulated foreign subsidiary and regulated foreign
affiliate.--The terms `regulated foreign subsidiary' and
`regulated foreign affiliate' mean a person engaged in the
business of insurance in a foreign country that is regulated by
a foreign insurance regulatory authority that is a member of
the International Association of Insurance Supervisors or other
comparable foreign insurance regulatory authority as determined
by the Board of Governors following consultation with the State
insurance regulators, including the lead State insurance
commissioner (or similar State official) of the insurance
holding company system as determined by the procedures within
the Financial Analysis Handbook adopted by the National
Association of Insurance Commissioners, where the person, or
its principal United States insurance affiliate, has its
principal place of business or is domiciled, but only to the
extent that--
``(A) such person acts in its capacity as a
regulated insurance entity; and
``(B) the Board of Governors does not determine
that the capital requirements in a specific foreign
jurisdiction are inadequate.
``(7) Capacity as a regulated insurance entity.--The term
`capacity as a regulated insurance entity'--
``(A) includes any action or activity undertaken by
a person regulated by a State insurance regulator or a
regulated foreign subsidiary or regulated foreign
affiliate of such person, as those actions relate to
the provision of insurance, or other activities
necessary to engage in the business of insurance; and
``(B) does not include any action or activity,
including any financial activity, that is not regulated
by a State insurance regulator or a foreign agency or
authority and subject to State insurance capital
requirements or, in the case of a regulated foreign
subsidiary or regulated foreign affiliate, capital
requirements imposed by a foreign insurance regulatory
authority.''; and
(2) by adding at the end the following new subsection:
``(c) Clarification.--
``(1) In general.--In establishing the minimum leverage
capital requirements and minimum risk-based capital
requirements on a consolidated basis for a depository
institution holding company or a nonbank financial company
supervised by the Board of Governors as required under
paragraphs (1) and (2) of subsection (b), the appropriate
Federal banking agencies shall not be required to include, for
any purpose of this section (including in any determination of
consolidation), a person regulated by a State insurance
regulator or a regulated foreign subsidiary or a regulated
foreign affiliate of such person engaged in the business of
insurance, to the extent that such person acts in its capacity
as a regulated insurance entity.
``(2) Rule of construction on board's authority.--This
subsection shall not be construed to prohibit, modify, limit,
or otherwise supersede any other provision of Federal law that
provides the Board of Governors authority to issue regulations
and orders relating to capital requirements for depository
institution holding companies or nonbank financial companies
supervised by the Board of Governors.
``(3) Rule of construction on accounting principles.--
``(A) In general.--A depository institution holding
company or nonbank financial company supervised by the
Board of Governors of the Federal Reserve that is also
a person regulated by a State insurance regulator that
is engaged in the business of insurance that files
financial statements with a State insurance regulator
or the National Association of Insurance Commissioners
utilizing only Statutory Accounting Principles in
accordance with State law, shall not be required by the
Board under the authority of this section or the
authority of the Home Owners' Loan Act to prepare such
financial statements in accordance with Generally
Accepted Accounting Principles.
``(B) Preservation of authority.--Nothing in
subparagraph (A) shall limit the authority of the Board
under any other applicable provision of law to conduct
any regulatory or supervisory activity of a depository
institution holding company or non-bank financial
company supervised by the Board of Governors, including
the collection or reporting of any information on an
entity or group-wide basis. Nothing in this paragraph
shall excuse the Board from its obligations to comply
with section 161(a) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 5361(a))
and section 10(b)(2) of the Home Owners' Loan Act (12
U.S.C. 1467a(b)(2)), as appropriate.''.
TITLE II--COLLATERALIZED LOAN OBLIGATIONS
SEC. 201. SHORT TITLE.
This title may be cited as the ``Restoring Proven Financing for
American Employers Act''.
SEC. 202. RULES OF CONSTRUCTION RELATING TO COLLATERALIZED LOAN
OBLIGATIONS.
Section 13(g) of the Bank Holding Company Act of 1956 (12 U.S.C.
1851(g)) is amended by adding at the end the following new paragraphs:
``(4) Collateralized loan obligations.--
``(A) Inapplicability to certain collateralized
loan obligations.--Nothing in this section shall be
construed to require the divestiture, prior to July 21,
2017, of any debt securities of collateralized loan
obligations, if such debt securities were issued before
January 31, 2014.
``(B) Ownership interest with respect to
collateralized loan obligations.--A banking entity
shall not be considered to have an ownership interest
in a collateralized loan obligation because it
acquires, has acquired, or retains a debt security in
such collateralized loan obligation if the debt
security has no indicia of ownership other than the
right of the banking entity to participate in the
removal for cause, or in the selection of a replacement
after removal for cause or resignation, of an
investment manager or investment adviser of the
collateralized loan obligation.
``(C) Definitions.--For purposes of this paragraph:
``(i) Collateralized loan obligation.--The
term `collateralized loan obligation' means any
issuing entity of an asset-backed security, as
defined in section 3(a)(77) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(77)),
that is comprised primarily of commercial
loans.
``(ii) Removal for cause.--An investment
manager or investment adviser shall be deemed
to be removed `for cause' if the investment
manager or investment adviser is removed as a
result of--
``(I) a breach of a material term
of the applicable management or
advisory agreement or the agreement
governing the collateralized loan
obligation;
``(II) the inability of the
investment manager or investment
adviser to continue to perform its
obligations under any such agreement;
``(III) any other action or
inaction by the investment manager or
investment adviser that has or could
reasonably be expected to have a
materially adverse effect on the
collateralized loan obligation, if the
investment manager or investment
adviser fails to cure or take
reasonable steps to cure such effect
within a reasonable time; or
``(IV) a comparable event or
circumstance that threatens, or could
reasonably be expected to threaten, the
interests of holders of the debt
securities.''.
TITLE III--DEFINITION OF POINTS AND FEES IN MORTGAGE TRANSACTIONS
SEC. 301. SHORT TITLE.
This title may be cited as the ``Mortgage Choice Act of 2014''.
SEC. 302. DEFINITION OF POINTS AND FEES.
(a) Amendment to Section 103 of TILA.--Section 103(bb)(4) of the
Truth in Lending Act (15 U.S.C. 1602(bb)(4)) is amended--
(1) by striking ``paragraph (1)(B)'' and inserting
``paragraph (1)(A) and section 129C'';
(2) in subparagraph (C)--
(A) by inserting ``and insurance'' after ``taxes'';
(B) in clause (ii), by inserting ``, except as
retained by a creditor or its affiliate as a result of
their participation in an affiliated business
arrangement (as defined in section 2(7) of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C.
2602(7))'' after ``compensation''; and
(C) by striking clause (iii) and inserting the
following:
``(iii) the charge is--
``(I) a bona fide third-party
charge not retained by the mortgage
originator, creditor, or an affiliate
of the creditor or mortgage originator;
or
``(II) a charge set forth in
section 106(e)(1);''; and
(3) in subparagraph (D)--
(A) by striking ``accident,''; and
(B) by striking ``or any payments'' and inserting
``and any payments''.
(b) Amendment to Section 129C of TILA.--Section 129C of the Truth
in Lending Act (15 U.S.C. 1639c) is amended--
(1) in subsection (a)(5)(C), by striking ``103'' and all
that follows through ``or mortgage originator'' and inserting
``103(bb)(4)''; and
(2) in subsection (b)(2)(C)(i), by striking ``103'' and all
that follows through ``or mortgage originator)'' and inserting
``103(bb)(4)''.
SEC. 303. RULEMAKING.
Not later than the end of the 90-day period beginning on the date
of the enactment of this Act, the Bureau of Consumer Financial
Protection shall issue final regulations to carry out the amendments
made by this Act, and such regulations shall be effective upon
issuance.
TITLE IV--BUSINESS RISK MITIGATION AND PRICE STABILIZATION
SEC. 401. SHORT TITLE.
This title may be cited as the ``Business Risk Mitigation and Price
Stabilization Act of 2013''.
SEC. 402. MARGIN REQUIREMENTS.
(a) Commodity Exchange Act Amendment.--Section 4s(e) of the
Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section 731 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, is amended
by adding at the end the following new paragraph:
``(4) Applicability with respect to counterparties.--The
requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), including
the initial and variation margin requirements imposed by rules
adopted pursuant to paragraphs (2)(A)(ii) and (2)(B)(ii), shall
not apply to a swap in which a counterparty qualifies for an
exception under section 2(h)(7)(A), or an exemption issued
under section 4(c)(1) from the requirements of section
2(h)(1)(A) for cooperative entities as defined in such
exemption, or satisfies the criteria in section 2(h)(7)(D).''.
(b) Securities Exchange Act Amendment.--Section 15F(e) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)), as added by
section 764(a) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, is amended by adding at the end the following new
paragraph:
``(4) Applicability with respect to counterparties.--The
requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall not
apply to a security-based swap in which a counterparty
qualifies for an exception under section 3C(g)(1) or satisfies
the criteria in section 3C(g)(4).''.
SEC. 403. IMPLEMENTATION.
The amendments made by this title to the Commodity Exchange Act
shall be implemented--
(1) without regard to--
(A) chapter 35 of title 44, United States Code; and
(B) the notice and comment provisions of section
553 of title 5, United States Code;
(2) through the promulgation of an interim final rule,
pursuant to which public comment will be sought before a final
rule is issued; and
(3) such that paragraph (1) shall apply solely to changes
to rules and regulations, or proposed rules and regulations,
that are limited to and directly a consequence of such
amendments.
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