[House Report 115-234]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-234
_______________________________________________________________________
FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS BILL, 2018
__________
R E P O R T
OF THE
COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES
together with
ADDITIONAL VIEWS
AND
DISSENTING VIEWS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
July 17, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
U.S. GOVERNMENT PUBLISHING OFFICE
26-263 WASHINGTON: 2017
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-234
======================================================================
FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS BILL, 2018
_______
July 17, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Graves of Georgia, from the Committee on Appropriations,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
and
DISSENTING VIEWS
[To accompany H.R. 3280]
The Committee on Appropriations submits the following
report in explanation of the accompanying bill making
appropriations for financial services and general government
for the fiscal year ending September 30, 2018.
INDEX TO BILL AND REPORT
_________
Page Number
Bill Report
Title I--Department of the Treasury........................ 2
4
Title II--Executive Office of the President and Funds
Appropriated to the President.......................... 31
25
Title III--The Judiciary................................... 46
35
Title IV--District of Columbia............................. 57
41
Title V--Independent Agencies.............................. 67
45
Administrative Conference of the United States............. 67
45
Consumer Product Safety Commission......................... 67
45
Election Assistance Commission............................. 69
47
Federal Communications Commission.......................... 70
47
Federal Deposit Insurance Corporation--Office of Inspector
General................................................ 71
49
Federal Election Commission................................ 71
49
Federal Labor Relations Authority.......................... 72
49
Federal Trade Commission................................... 73
50
General Services Administration............................ 74
51
Harry S Truman Scholarship Foundation...................... 87
60
Merit Systems Protection Board............................. 87
60
National Archives and Records Administration............... 88
61
National Credit Union Administration....................... 87
62
Office of Government Ethics................................ 89
63
Office of Personnel Management............................. 89
63
Office of Special Counsel.................................. 94
66
Postal Regulatory Commission............................... 95
67
Privacy and Civil Liberties Oversight Board................ 95
67
Public Buildings Reform Board.............................. 96
68
Securities and Exchange Commission......................... 96
68
Selective Service System................................... 98
70
Small Business Administration.............................. 99
70
United States Postal Service............................... 104
74
United States Tax Court.................................... 105
75
Title VI--General Provisions--This Act..................... 107
75
Title VII--General Provisions--Government-wide:
Departments, Agencies, and Corporations................ 121
78
Title VIII--General Provisions--District of Columbia....... 153
82
Title IX--Other Matters.................................... 165
83
Title X--Financial Institution Bankruptcy.................. 252
83
Title XI--Additional General Provision--Spending Reduction
Account................................................ 253
83
House of Representatives Report Requirements...............
83
Dissenting Views...........................................
535
Additional Views...........................................
539
Highlights of the Bill
The Financial Services and General Government Subcommittee
has jurisdiction over a diverse group of agencies responsible
for regulating the financial and telecommunications industries;
collecting taxes and providing taxpayer assistance; supporting
the operations of the White House, the Federal Judiciary, and
the District of Columbia; managing Federal buildings; and
overseeing the Federal workforce. The activities of these
agencies impact nearly every American and are integral to the
operations of our government.
The bill provides a total of $20,231,000,000 in
discretionary budget authority for fiscal year 2018 which is
$1,284,000,000, or 5.97 percent, below the fiscal year 2017
discretionary allocation. The bill is $2,468,000,000, or 11
percent, below the Administration's request.
TOTAL BUDGET AUTHORITY
($ in millions)
------------------------------------------------------------------------
FY 2017 FY 2018 FY 2018
Enacted Request Recommendation
------------------------------------------------------------------------
Discretionary................. 21,515 22,699 20,231
Mandatory..................... 21,937 22,357 22,357
------------------------------------------------------------------------
OPERATING PLAN AND REPROGRAMMING PROCEDURES
The Committee will continue to evaluate reprogrammings
proposed by agencies. Although reprogrammings may not change
either the total amount available in an account or the purposes
for which the appropriation is legally available, they
represent a significant departure from budget plans presented
to the Committee in an agency's budget justification and
supporting documents, which are the basis of this
appropriations Act. The Committee expects agencies'
reprogramming requests to explain thoroughly the reasons for
the reprogramming and to include an assessment of whether the
reprogramming will affect budget requirements for the
subsequent fiscal year.
Section 608 of this Act requires agencies or entities
funded by the Act to notify the Committee and obtain prior
approval from the Committee for any reprogramming of funds
that: (1) creates a new program; (2) eliminates a program,
project, or activity; (3) increases funds or personnel for any
program, project, or activity for which funds have been denied
or restricted by the Congress; (4) proposes to use funds
directed for a specific activity by either the House or Senate
Committees on Appropriations for a different purpose; (5)
augments existing programs, projects, or activities in excess
of $5,000,000 or 10 percent, whichever is less; (6) reduces
existing programs, projects, or activities by $5,000,000 or 10
percent, whichever is less; or (7) creates or reorganizes
offices, programs, or activities.
Additionally, the Committee expects to be promptly notified
of all reprogramming actions which involve less than the above
mentioned amounts if such actions would have the effect of
significantly changing an agency's funding requirements in
future years, or if programs or projects specifically cited in
the Committee's reports are affected by the reprogramming.
Reprogrammings meeting these criteria must be approved by the
Committee regardless of the amount proposed to be reallocated.
Section 608 also requires agencies to consult with the
Committees on Appropriations prior to any significant
reorganization or restructuring of offices, programs, or
activities. This provision applies regardless of whether the
reorganization or restructuring involves a reprogramming of
funds. Agencies are encouraged to consult with the Committees
early in the process so that any questions or concerns the
Committees may have can be addressed in a timely manner.
Except in emergency situations, reprogramming requests
should be submitted no later than June 29, 2018. Further, the
Committee notes that when a Department or agency submits a
reprogramming or transfer request to the Committees on
Appropriations and does not receive identical responses from
the House and Senate, it is the responsibility of the
Department or agency to reconcile the House and Senate
differences before proceeding and, if reconciliation is not
possible, to consider the request to reprogram funds
unapproved.
Agencies are directed under section 608 to submit operating
plans for the Committee's review within 60 days of the bill's
enactment. Each operating plan should include: (1) a table for
each appropriation with a separate column to display the
President's budget request, adjustments made by Congress,
adjustments due to enacted rescissions, if appropriate, and the
fiscal year enacted level; (2) a delineation in the table for
each appropriation both by object class and program, project,
and activity as detailed in the budget appendix for the
respective appropriation; and (3) an identification of items of
special congressional interest.
CONGRESSIONAL BUDGET JUSTIFICATIONS
Budget justifications are the primary tool used by the
House and Senate Committees on Appropriations to evaluate the
resource requirements and fiscal needs of agencies. The
Committee is aware that the format and presentation of budget
materials is largely left to the agency within presentation
objectives set forth by the Office of Management and Budget
(OMB). In fact, OMB Circular A-11, part 1 specifically
instructs agencies to consult with congressional committees
beforehand. The Committee expects that all agencies funded
under this Act will heed this directive.
The Committee continues the direction that justifications
submitted with the fiscal year 2019 budget request by agencies
funded under this Act contain the customary level of detailed
data and explanatory statements to support the appropriations
requests at the level of detail contained in the funding table
included at the end of this report. Among other items, agencies
shall provide a detailed discussion of proposed new
initiatives, proposed changes in the agency's financial plan
from prior year enactment, detailed data on all programs, and
comprehensive information on any office or agency
restructurings. At a minimum, each agency must also provide
adequate justification for funding and staffing changes for
each individual office and materials that compare programs,
projects, and activities that are proposed for fiscal year 2019
to the fiscal year 2018 enacted levels.
TITLE I--DEPARTMENT OF THE TREASURY
Departmental Offices
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $224,376,000
Budget request, fiscal year 2018...................... 201,751,000
Recommended in the bill............................... 201,751,000
Bill compared with:
Appropriation, fiscal year 2017................... -22,625,000
Budget request, fiscal year 2018.................. - - -
The Departmental Offices' function in the Department of the
Treasury is to support the Secretary of the Treasury in his
capacity as the chief operating executive of the Department and
in his role in determining the tax, economic, and financial
management policies of the Federal Government. The Secretary's
responsibilities funded by the Salaries and Expenses
appropriation include: recommending and implementing domestic
and international economic and tax policy; providing
recommendations regarding fiscal policy; governing the fiscal
operations of the government; managing the public debt;
managing development of financial policy; representing the U.S.
on international monetary, trade and investment issues;
overseeing Treasury Department overseas operations; directing
the administrative operations of the Treasury Department; and
providing executive oversight of the bureaus within the
Treasury Department.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $201,751,000
for Departmental Offices, Salaries and Expenses.
Financial Transactions.--The Committee encourages the
Department of the Treasury to work with Federal bank
regulators, financial institutions, and money service
businesses to ensure that legitimate financial transactions
move freely and globally. The Committee is frustrated that the
Department has failed to report on its efforts to ensure the
appropriate flow of legitimate financial transactions and
directs the Department to submit a report to the Committees on
Appropriations of the House and Senate on this matter not later
than 90 days after enactment of this Act.
Puerto Rico.--Within 90 days of the date of enactment of
this Act, the Department is directed to provide a report to the
Committees on Appropriations of the House and Senate describing
how the Department has used its authority to provide technical
assistance to Puerto Rico in fiscal year 2017 and how it plans
to use it in fiscal year 2018.
Terrorism Risk Insurance.--The Committee notes that the
Terrorism Risk Insurance Program Reauthorization Act of 2015
(TRIPRA) requires Treasury to engage in advance coordination
with state insurance regulators and others to obtain data
necessary to complete annual reports to Congress on the
terrorism risk insurance market. The Committee expects that
Treasury will engage early with state insurance regulators and
will comply fully with TRIPRA reporting requirements.
Cybersecurity.--The Committee recognizes the need to
protect the financial services sector and its customers from
the devastating effects of cyberattacks. While both industry
and government have taken significant steps to mitigate this
threat, there is more work to be done. The Committee encourages
continued coordination to develop consistent and workable
cybersecurity safeguards across the financial services sector.
Consistent with this goal, the Committee directs the Office of
Critical Infrastructure Protection and Compliance Policy (OCIP)
to report to the Committees on Appropriations of the House and
Senate, the Committee on Financial Services of the House, and
the Committee on Banking, Housing, and Urban Affairs of the
Senate within 60 days of enactment of this Act on the status of
this collaboration and ways to improve cybersecurity controls
and safeguards.
Regulation of Community Financial Institutions.--The
Committee remains concerned with Federal regulation of
community banks and credit unions. The Committee requests each
financial regulator to consider the risk profile and business
model of a financial institution when the regulator engages in
a regulatory action. In doing so, the regulator must determine
the necessity, appropriateness, and impact of applying its
regulatory action to an institution or class of institutions,
and importantly, is directed to tailor its regulatory action in
a manner that limits the regulatory compliance impact, cost,
liability risk or other burdens as is appropriate for the risk
profile and business model involved.
Custody banks.--Federal banking regulators should examine
regulatory approaches that may prevent custody banks from
providing key services. U.S. prudential rules, including rules
related to risk-weighted capital, leverage capital, and
liquidity do not reflect this unique custody bank business
model. For example, custody banks have a unique business model
focused on providing services critical to the operation of
mutual funds, pension funds, endowments and other institutional
investors, including providing demand deposit accounts to hold
these clients' cash. By necessity, the custody banks place such
cash on deposit with the Federal Reserve and other central
banks, rather than investing in loans or other higher yielding
assets. Current and potentially future regulatory focus on this
essentially risk-less activity, possibly impeding custody
banks' ability to provide traditional custody services, could
have an adverse impact on financial stability by preventing
custody banks from being able to accept cash deposits from
their clients during a crisis, denying those clients a safe
haven to preserve their capital. The Financial Stability
Oversight Council should work with banking regulators to tailor
the one-size-fits-all prudential regulatory regime to ensure
that custody banks can continue to provide the services
necessary for investment and savings.
Insurance.--Under P.L. 111-203, the Federal Reserve Board
was given authority to oversee certain nonbank holding
companies, including a few bank and savings and loan holding
companies with insurance affiliates, as well as certain SIFIs,
which currently include three insurance companies. P.L. 111-203
also gave the Federal Insurance Office (FIO), within the
Department of the Treasury, the authority to consult with the
States on international issues and represent the U.S., as
appropriate, in the International Association of Insurance
Supervisors (IAIS).
The Committee notes that the State-based system of
insurance regulation has served our nation well for more than
150 years. Any federal regulation of insurance can take final
form only with explicit approval by Congress. It is important
to note that other international financial agreements have had
deleterious impacts on some of our nation's financial
institutions.
The Committee is concerned about the ongoing negotiations
held by the IAIS to develop standards on a variety of issues,
including capital and a definition of non-traditional, non-
insurance products, and believes the U.S. agencies party to
those negotiations must appropriately fulfill their duties to
advocate for the U.S. insurance market and State-based
regulatory regime. The Committee also notes the importance of
developing a domestic capital standard, pursuant to P.L. 111-
203 and P.L. 113-279, that is based on the existing domestic
regulatory structure. The Committee believes it essential that
a domestic standard should be set before approval of any
international standard that will or could ultimately be applied
to U.S. insurers. Finally, the Committee reminds those Federal
agencies party to IAIS or Financial Stability Board (FSB)
negotiations to not support consolidated group-wide insurance
capital standards for domestically-chartered internationally
active insurance groups that are inconsistent with current
state-based insurance standards, which are designed solely for
the protection of the policyholder.
Cross-border Regulatory Cooperation and Harmonization.--The
Committee is concerned that both the Dodd-Frank Act and U.S.
prudential regulators are creating a fragmented international
financial system through an excessive ring-fencing regime of
U.S. subsidiaries that does not recognize, and may
disincentivize, cross-border regulatory cooperation. U.S.
regulators should take into account the extent to which a
foreign financial company is subject to home country standards,
on a consolidated basis, that are comparable to, or exceed,
those applied to financial companies in the United States. The
Committee expects U.S. regulators to demonstrate cross-border
regulatory cooperation, to include the mutual recognition of
comparable or higher standards in certain jurisdictions, and to
better coordinate with home country regulators to establish a
mutual recognition framework so as to create greater incentives
for all jurisdictions to raise their standards to U.S. levels.
Hardest Hit.--The Hardest Hit Fund (HHF) provides
significant resources to States that were hardest hit by the
economic crisis for 2008 and targets critical resources toward
programs that help Americans avoid foreclosure and stabilize
housing markets. The Committee notes that as part of HHF's
blight elimination efforts, HHF funds may be used to secure
vacant and abandoned properties. The Committee does not
recommend that additional funding for the Hardest Hit Fund be
provided through this Act.
Financial Literacy.--The Committee believes financial
literacy is important and that the Department can be helpful to
entities, like universities, state and local educational
agencies, qualified nonprofit agencies, and financial
institutions who may want to establish centers of excellence to
develop and implement effective standards, training and
outreach efforts for financial literacy programs. The Committee
encourages the Department to use the Financial Literacy and
Education Commission to look into the feasibility of a program
to make competitive grants to qualified institutions.
OFFICE OF TERRORISM AND FINANCIAL INTELLIGENCE
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $123,000,000
Budget request, fiscal year 2018...................... 116,778,000
Recommended in the bill............................... 123,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +6,222,000
Economic and trade sanctions issued and enforced by the
Office of Terrorism and Financial Intelligence's (TFI) Office
of Foreign Assets Control (OFAC) protect the financial system
from being polluted with criminal and illicit activities and
counteract national security threats from drug lords,
terrorists, weapons of mass destruction proliferators, and
rogue nations, among others. In addition to the enforcement of
sanctions, TFI also produces vital analysis with regard to
foreign intelligence and counterintelligence across all
elements of the national security community.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $123,000,000
for the Office of Terrorism and Financial Intelligence to carry
out its central role in detecting and defeating security
threats. The Committee expects these additional funds to be
used to strengthen the development and enforcement of sanction
programs.
Iran Sanctions Act.--The Committee directs the Department
of the Treasury to report to Congress on the status of
implementation and enforcement of non-nuclear, bilateral and
multilateral sanctions against Iran and actions taken by the
U.S. and international community to enforce such sanctions.
The Committee directs the Treasury Department to conduct a
full review of all sanction designation removals related to
Iran during the past 2 years and report to the Committees on
Appropriations in writing for each such removal whether the
entity has engaged in any prohibited activities since the
removal of sanctions. If the Treasury Department determines an
entity has engaged in any activities for which it should be
sanctioned, the Department shall report not later than 15 days
after any such determination to the Committees on
Appropriations on the status of re-imposition of sanctions on
any identified entity or provide a written justification for
why sanctions have not been imposed.
The Committee directs the Treasury Department to provide a
report to the Committee, within 180 days from enactment, on the
number of non-nuclear related sanctions designations related to
Iran issued for the each of the past 3 fiscal years. The report
shall provide an overall number of designations, and the number
for each sanctions program.
The Committee is concerned that investigations of entities
for possible sanctions violations take considerable time and
during the investigation period entities may continue to carry
out sanctionable activities. The Committee directs the
Department to begin tracking the time between the start of each
investigation into possible sanctions violations and the
issuance of sanctions or closure of the investigation. The
Department shall provide a report to the Committees on
Appropriations at the end of the fiscal year on the average
investigation time, the number of investigations carried out,
the number of investigations concluded, and the number of open
investigations.
Iran Nuclear Deal.--The Committee notes that the Joint
Comprehensive Plan of Action (JCPOA), also known as the Iran
nuclear deal is not binding for State and local governments.
The existing framework under which States have passed
restrictions on doing business with Iran is still in place, and
States are fully within their rights to enact new restrictions,
or maintain current laws.
Sanctions Enforcement in Africa.--Protracted conflicts in
nations such as Sudan, South Sudan, the Central African
Republic, and the Democratic Republic of Congo have led to
sanctions regimes and international arms embargoes to cut off
the money flows that are fueling wars and contributing to
regional destabilization. The Committee is concerned about the
escalation of conflict and failure to abide by diplomatic
agreements in these particular African states, even after
sanctions have been imposed. The Committee supports the use of
funds to enhance regional expertise and capacity for sanctions
investigations, policy development, and enforcement of
sanctions.
CYBERSECURITY ENHANCEMENT ACCOUNT
Appropriation, fiscal year 2017....................... $47,743,000
Budget request, fiscal year 2018...................... 27,264,000
Recommended in the bill............................... 27,264,000
Bill compared with:
Appropriation, fiscal year 2017................... -20,479,000
Budget request, fiscal year 2018.................. - - -
The Cybersecurity Enhancement Account (CEA) is a dedicated
account designed to identify and support Department-wide
investments for critical IT improvements including the systems
identified as High Value Assets.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $27,264,000
for the Cybersecurity Enhancement Account.
DEPARTMENT-WIDE SYSTEMS AND CAPITAL INVESTMENTS PROGRAMS
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $3,000,000
Budget request, fiscal year 2018...................... 4,426,000
Recommended in the bill............................... 3,077,000
Bill compared with:
Appropriation, fiscal year 2017................... +77,000
Budget request, fiscal year 2018.................. -1,349,000
The 1997 Treasury and General Government Appropriations Act
established this account, which is authorized to be used by or
on behalf of Treasury bureaus at the Secretary's discretion to
modernize business processes and increase efficiency through
technology investments, as well as other activities that
involve more than one Treasury bureau or Treasury's interface
with other Government agencies.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $3,077,000 for
Department-wide Systems and Capital Investments Programs
(DSCIP).
OFFICE OF INSPECTOR GENERAL
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $37,044,000
Budget request, fiscal year 2018...................... 34,112,000
Recommended in the bill............................... 34,112,000
Bill compared with:
Appropriation, fiscal year 2017................... -2,932,000
Budget request, fiscal year 2018.................. - - -
The Office of Inspector General (OIG) provides agency-wide
audit and investigative functions to identify and correct
operational and administrative deficiencies that create
conditions for fraud, waste, and mismanagement. The audit
function provides contract, program, and financial statement
audit services. Contract audits provide professional advice to
agency contracting officials on accounting and financial
matters relative to negotiation, award, administration,
repricing, and settlement of contracts. Program audits review
and evaluate all facets of agency operations. Financial
statement audits assess whether financial statements fairly
present the agency's financial condition and results of
operations, the adequacy of accounting controls, and compliance
with laws and regulations. The investigative function provides
for the detection and investigation of improper and illegal
activities involving programs, personnel, and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $34,112,000
for the OIG. The recommendation fully funds the cost of
overseeing the Department's Resources and Ecosystems
Sustainability, Tourism Opportunities, and Revived Economy of
the Gulf Coast Act (RESTORE Act) activities.
TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $169,634,000
Budget request, fiscal year 2018...................... 161,113,000
Recommended in the bill............................... 165,113,000
Bill compared with:
Appropriation, fiscal year 2017................... -4,521,000
Budget request, fiscal year 2018.................. +4,000,000
The Office of Treasury Inspector General for Tax
Administration (TIGTA) conducts audits, investigations, and
evaluations to assess the operations and programs of the IRS
and its related entities, the IRS Oversight Board, and the
Office of Chief Counsel. The purpose of those audits and
investigations is as follows: (1) To promote the economic,
efficient, and effective administration of the Nation's tax
laws and to detect and deter fraud and abuse in IRS programs
and operations; and (2) to recommend actions to resolve fraud
and other serious problems, abuses, and deficiencies in these
programs and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $165,113,000
for TIGTA. The Committee appreciates the many issues that TIGTA
has brought to its attention and provides funding above the
fiscal year request to continue TIGTA's oversight of IRS
activities and use of appropriated funds.
Cybersecurity.--Since cyberattacks continue to be a threat
to the Federal Government, the Committee is concerned with the
potential damage such an attack would have on the Internal
Revenue Service. Therefore, the Committee directs the TIGTA to
submit a report to the Committees on Appropriations of the
House and Senate not less than six months after enactment of
this Act describing the cyberattacks and attempted cyberattacks
against the agency and their consequences; as well as the steps
taken to prevent, mitigate or otherwise respond to such
attacks; the cybersecurity policies and procedures in place,
including policies about ensuring safe use of computer and
mobile devices by individual employees; and a description of
all outreach efforts undertaken to increase awareness among
employees and contractors of cybersecurity risks as well as an
update on prior reported cyber incidents. The report shall
describe the steps taken by IRS to implement previous TIGTA
cybersecurity recommendations and identify steps the IRS needs
to take to improve cybersecurity.
SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET RELIEF PROGRAM
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $41,160,000
Budget request, fiscal year 2018...................... 20,297,000
Recommended in the bill............................... 37,044,000
Bill compared with:
Appropriation, fiscal year 2017................... -4,116,000
Budget request, fiscal year 2018.................. +16,747,000
The Office of the Special Inspector General for the
Troubled Asset Relief Program (SIGTARP) was established in the
Emergency Economic Stabilization Act of 2008 (Public Law 110-
343). Its mission is to conduct, supervise, and coordinate
audits and investigations of the purchase, management, and sale
of assets by the Secretary of the Treasury under programs
established pursuant to the Troubled Asset Relief Program
(TARP).
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $37,044,000
for SIGTARP.
Financial Crimes Enforcement Network
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $115,003,000
Budget request, fiscal year 2018...................... 112,764,000
Recommended in the bill............................... 115,003,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +2,239,000
The Financial Crimes Enforcement Network (FinCEN) is
responsible for implementing Treasury's anti-money laundering
regulations through administration of the Bank Secrecy Act
(BSA). It also collects and analyzes information to assist in
the investigation of money laundering and other financial
crimes. FinCEN supports law enforcement investigative efforts
by Federal, State, local and international agencies, and
fosters interagency and global cooperation against domestic and
international financial crimes.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $115,003,000
for FinCEN. The recommended amount is intended to ensure
FinCEN's information is accessible to the law enforcement and
intelligence communities and to ensure FinCEN can respond to
requests for assistance from law enforcement. The data compiled
and analyzed by FinCEN is a critical tool for investigating,
among other crimes, money laundering, mortgage fraud, drug
cartels, and terrorist financing.
Human Trafficking.--The Committee appreciates FinCEN's
history of supporting law enforcement cases that combat human
trafficking, including its 2014 Guidance on Recognizing
Activity that May be Associated with Human Smuggling and Human
Trafficking to financial institutions, and emphasizes the
importance of continuing this effort as part of the bureau's
broader mission to detect and disrupt all forms of financial
crime. Wherever possible, FinCEN shall marshal its unique
expertise in analyzing financial flows for this important
effort in the course of ongoing strategic operations, such as
the Southwest Border Initiative, and provide the appropriate
assistance to law enforcement agencies in their human
trafficking investigations.
Treasury Forfeiture Fund
(RESCISSION)
(INCLUDING RETURN OF FUNDS)
Appropriation, fiscal year 2017....................... $1,115,000,000
Budget request, fiscal year 2018...................... 876,000,000
Recommended in the bill............................... 876,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -239,000,000
Budget request, fiscal year 2018.................. - - -
The Treasury Forfeiture Fund collects and disburses funds
that are incidental to law enforcement activities and
priorities that led to the seizures and forfeitures. The Fund
can ensure resources are managed efficiently to cover the costs
of an effective asset seizure and forfeiture program, including
the costs of seizing, evaluating, inventorying, maintaining,
protecting, advertising, forfeiting and disposing of property.
COMMITTEE RECOMMENDATION
The Committee recommends a permanent rescission of
$876,000,000 of unobligated balances in the Treasury Forfeiture
Fund. Further, the Committee includes a paragraph, as
requested, to return $38,800,000 from the Forfeiture Fund to
the General Fund of the Treasury. Public Law 114-113 rescinded
$3,800,000,000 of the $3,838,800,000 forfeited by BNP Paribas
S.A. in 2015 and prohibited Treasury from obligating the
remaining balance. Returning these funds to the General Fund
does not count as savings to this bill, per scorekeeping rules,
because the funds were already precluded from obligation.
The Committee directs the Department to submit to the
Committees on Appropriations of the House and Senate a detailed
table every month reporting the interest earned, forfeiture
revenue collected, unobligated balances, recoveries, expenses
to date, and expenses estimated for the remainder of the fiscal
year.
Bureau of the Fiscal Service
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $353,057,000
Budget request, fiscal year 2018...................... 330,837,000
Recommended in the bill............................... 330,837,000
Bill compared with:
Appropriation, fiscal year 2017................... -22,220,000
Budget request, fiscal year 2018.................. - - -
The mission of the Bureau of the Fiscal Service is to
promote the financial integrity and operational efficiency of
the U.S. Government through accounting, borrowing, collections,
payments, and shared services. The Fiscal Service is the
Federal Government's central financial agent. The Fiscal
Service also develops and implements reliable and efficient
financial methods and systems to operate the government's cash
management, credit management, and debt collection programs in
order to maintain government accounts and report on the status
of the government's finances. In addition, the Fiscal Service
is the primary agency for collecting Federal non-tax debt owed
to the government, and is responsible for the conduct of all
public debt operations and the promotion of the sale of U.S.
securities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $330,837,000
for the Fiscal Service. Of the funds provided, $4,210,000 is
available until September 30, 2019, for information systems
modernization.
The Committee is pleased that the Fiscal Service continues
to realize cost-savings from the consolidation of the Bureau of
Public Debt and the Financial Management Service.
DATA Act.--The Committee is supportive of the Department's
implementation of the DATA Act (P.L. 113-101). The Fiscal
Service has worked to establish a DATA Act Schema that
leverages industry standards to create a government-wide data
structure for federal spending information. The Committee is
concerned by the findings in a recent January 2016 GAO report
(``Data Standards Established, but More Complete and Timely
Guidance Is Needed to Ensure Effective Implementation''; GAO 16
261), which found that many of the 57 draft data elements
released by OMB and the Treasury Department in August 2015
(``Federal Spending Transparency Data Standards''') to have
ambiguous or vague definitions that could inhibit government-
wide aggregation of agency reported data. Moreover, final
reporting guidance needs to be issued to agencies to clarify
how they are to extract, compile, standardize, and report their
spending data.
Within this appropriation, funding is included for
USAspending.gov. The Committee expects the Fiscal Service to
meet its transparency goals within USAspending.gov related to
the DATA Act and will monitor progress in achieving government
spending transparency. The Committee directs the Fiscal Service
to meet its transparency goals within USAspending.gov and
coordinate with OMB to publish all unclassified vendor
contracts and grant awards for all federal agencies on
USAspending.gov. The Committee directs the Fiscal Service to
display this information online and report to the Committees on
Appropriations of the House and Senate within 90 days of the
enactment of this Act on its progress in achieving government
spending transparency.
The Committee is committed to transparency and
accountability in federal spending. As such the Committee
directs the Fiscal Service to make basic information about the
use of financial agents publicly available in a central
location, including compensation paid to each financial agent
and a description of the services provided.
Alcohol and Tobacco Tax and Trade Bureau
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $111,439,000
Budget request, fiscal year 2018...................... 98,658,000
Recommended in the bill............................... 111,439,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +12,781,000
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is
responsible for the enforcement of laws designed to eliminate
certain illicit activities and to regulate lawful activities
relating to distilled spirits, beer, wine, and nonbeverage
alcohol products, and tobacco. TTB focuses on collecting
revenue; reducing taxpayer burden and improving service while
preventing diversion; and protecting the public and preventing
consumer deception in certain regulated commodities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $111,439,000
for the TTB. Within this amount, $5,000,000 is included for
increased enforcement of the Federal Alcohol Administration Act
(FAA Act).
Enforcement.--The Committee has included $5,000,000 for TTB
to increase enforcement efforts for industry trade practice
violations. Enforcement of basic trade practice functions,
required under the FAA Act, is critical to ensuring a
competitive, fair, and safe marketplace. The Committee directs
the TTB to report to the Committees on Appropriations of the
House and Senate, within 60 days of enactment of this Act, on
how the additional funding will be used to bolster enforcement,
forensic audits, and investigations, particularly in known
points in the supply chain that are susceptible to illegal
activity.
Processing Time.--The Committee will continue to monitor
the process for securing basic label and formula approvals
required under the FAA Act. The Committee continues to support
additional funding for this and expects the TTB to continue to
make efforts to shorten processing time for label and formula
applications.
American Viticulture Area.--The Committee recognizes that
the use of American Viticulture Area (AVA) terms help small
farmers and wineries grow their businesses by developing
regional brands. The AVA system stimulates economic growth in
the industry and also provides consumers with valuable
information about where their purchases are sourced. The TTB
should improve label accuracy to ensure that use of AVA terms
are consistent with existing federal laws and regulations
governing the use of these protected terms. The Committee is
aware that the TTB is actively working on Notice No. 160 and
directs the Bureau to keep the Committee appraised of any
imminent action related to this rulemaking.
Craft Producers.--The Committee recognizes the important
function TTB plays in protecting the public and properly
collecting tax revenue from the industries it oversees. The
Committee encourages TTB to continue outreach to small craft
producers and identify areas where the Bureau can minimize the
regulatory burden on this industry.
United States Mint
UNITED STATES MINT PUBLIC ENTERPRISE FUND
The United States Mint manufactures coins, receives
deposits of gold and silver bullion, and safeguards the Federal
Government's holdings of monetary metals. In 1997, Congress
established the United States Mint Public Enterprise Fund
(Public Law 104-52), which authorized the Mint to use proceeds
from the sale of coins to finance the costs of its operations
and consolidated all existing Mint accounts into a single fund.
Public Law 104-52 also provided that, in certain situations,
the levels of capital investments for circulating coins and
protective services shall factor into the decisions of the
Congress.
COMMITTEE RECOMMENDATION
The Committee recommends a spending level for capital
investments by the Mint for circulating coinage and protective
services of $30,000,000 for fiscal year 2018.
Community Development Financial Institutions Fund
Program Account
Appropriation, fiscal year 2017....................... $248,000,000
Budget request, fiscal year 2018...................... 14,000,000
Recommended in the bill............................... 190,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -58,000,000
Budget request, fiscal year 2018.................. +176,000,000
The Community Development Financial Institutions (CDFI)
Fund provides grants, loans, equity investments, and technical
assistance, on a competitive basis, to new and existing CDFIs
such as community development banks, community development
credit unions, and housing and microenterprise loan funds.
Recipients use the funds to support mortgages, small business
and economic development lending in underserved and distressed
neighborhoods and to support the availability of financial
services in these neighborhoods. The CDFI Fund is also
responsible for implementation of the New Markets Tax Credits.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $190,000,000
for the CDFI Fund program. Of the amounts provided,
$137,000,000 is for financial and technical assistance grants,
$3,000,000 is for CDFIs to provide technical and financial
assistance to individuals with disabilities, $15,000,000 is for
Native Initiatives, $15,000,000 is for the Bank Enterprise
Award Program, and $23,000,000 is for the administrative
expenses for all. In addition, the Committee recommends a loan
level of $500,000,000 for the Bond Guarantee Program.
CDFIs in U.S. Insular Areas.--The Committee notes the
absence of CDFIs serving American Samoa, Northern Mariana
Islands and other U.S. insular areas and recommends that the
CDFI Fund use its Capacity Building Initiative to expand
service, to the extent practical, to these areas.
CDFIS in the Appalachian Region.--The Committee recognizes
that the Appalachian region continues to face economic
hardships and high unemployment stemming from the downturn in
the coal market. The Committee encourages the CDFI Fund to
focus on opportunities in the region and expand service for
businesses and industries that may lead to improved long-term
diversification of the economy in Appalachia.
CDFI Program Integration for Individuals with
Disabilities.--The Committee is pleased to provide dedicated
funds for financial and technical assistance grants to position
more CDFI's to respond to the housing, transportation,
education, and employment needs of underserved, low-income,
individuals with disabilities. By increasing the visibility of
the disability community, the Committee expects CDFI's to
incorporate the needs of the disabled into their business plans
and practices.
The Committee directs the CDFI to submit a report every six
months until all the funds are obligated, not later than six
months after the enactment of the Act to the Committees on
Appropriations of the House and Senate summarizing the progress
made toward developing a competitive application pool of CDFIs
to compete for funds for individuals with disabilities.
Additionally, the report should include the number of awards,
amount of each award, types of programs, impact the funding has
made on the number of CDFIs serving the disability community,
and findings and recommendations to improve upon the
implementation of these activities.
Internal Revenue Service
The Committee recommends providing $11,085,943,000 for the
IRS, which is $149,057,000 below current level, but
$110,943,000 above the request. This recommendation would fund
the IRS, in total, below their fiscal year 2008 level. Funding
for the Taxpayer Service account is at $2,315,754,000 which is
slightly below their current level when factoring in the
additional funds provided for Taxpayer Services in fiscal year
2017.
In addition, the Committee includes language to:
Prohibit funds for finalizing any regulation
related to the standards used to determine the tax-
exempt status of a 501(c)(4) organization;
Prohibit funds for IRS employee bonuses and
awards that do not consider the conduct and tax
compliance of such employees;
Prohibit funds for hiring former IRS
employees without considering the employees past
conduct and tax compliance;
Prohibit funds for targeting groups for
regulatory scrutiny based on their ideological beliefs;
Prohibit funds for targeting citizens for
exercising their First Amendment rights;
Prohibit funds for conferences that do not
comply with the Treasury Inspector General for Tax
Administration's (TIGTA) recommendations regarding
conferences;
Prohibit funds for the production of videos
that have not been reviewed for cost, topic, tone, and
purpose and certified to be appropriate;
Require extensive reporting on IRS spending
and information technology; and
Provide TIGTA with $165 million for its
audit and investigative oversight of the IRS.
The Committee remains concerned with the level of service
taxpayers are receiving and continued cybersecurity threats.
Targeted reporting is included to assist the Committee monitor
and evaluate the IRS's progress in these areas.
A description of the Committee's recommendation by
appropriation is provided below.
TAXPAYER SERVICES
Appropriation, fiscal year 2017....................... \1\$2,156,554,00
0
Budget request, fiscal year 2018...................... 2,212,311,000
Recommended in the bill............................... 2,315,754,000
Bill compared with:
Appropriation, fiscal year 2017................... +159,200,000
Budget request, fiscal year 2018.................. +103,443,000
\1\As directed by Public Law 115-31, Division E, Section 113 of the
Administrative Provisions--Internal Revenue Service, $209,200,000 was
transferred by the Commissioner of the Internal Revenue Service to the
Taxpayer Services which increased the Taxpayer Services fiscal year
2017 level to $2,365,754,000.
The Taxpayer Services appropriation provides for taxpayer
services, including forms and publications; processing tax
returns and related documents; filing and account services;
taxpayer advocacy services; and assisting taxpayers to
understand their tax obligations, correctly file their returns,
and pay taxes due in a timely manner.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $2,315,754,000
for Taxpayer Services, which is $50,000,000 below the account's
fiscal year 2017 total appropriated funding level. Within the
amount provided, the Committee expects the IRS to sufficiently
fund the Taxpayer Advocate Service.
Identity Theft.--Identity theft remains a persistent
obstacle to accurate, fair, and efficient tax collection.
Innocent taxpayers, who otherwise comply with their tax
obligations, have their refunds delayed and are drawn
unwittingly into the IRS examination process because their
identity was stolen and misused.
The Committee requires a report, reviewed by the National
Taxpayer Advocate, from the IRS that covers 2010-2017 period
on: the number of taxpayers who have had their tax return
rejected because their Social Security or taxpayer
identification number was improperly used by another individual
to commit tax fraud; the average time to resolve the situation
and provide innocent taxpayers with their refund, when a refund
is due; and the number of cases involving taxpayer
identification numbers of residents of the territories. The
report will also include a discussion on IRS's progress and
plans to expedite resolution for these taxpayers, to prevent
non-victims from becoming victims, to educate the public on the
threat of identity theft, and to detect, prevent, and combat
identity-based tax fraud and actions. The Committee directs the
IRS to submit the report to the Committees on Appropriations of
the House and Senate by June 1, 2018.
Pre-Filled or Simple Tax Returns.--The Committee believes
that converting a voluntary compliance system to a bill
presentment model would represent a significant change in the
relationship between taxpayers and their government. The simple
return model would also strain IRS resources and the data
retrieval systems required would create new burdens on
employers, particularly small businesses. In addition, a
fundamental conflict of interest seems to be inherent in the
nation's tax collector and compliance enforcer taking on the
simultaneous role of tax preparer and financial advisor. The
Committee expects that the IRS will not begin work on a simple
tax return pilot program or associated systems without first
seeking specific authorization and appropriations from
Congress, and should instead focus on helping Congress and the
Administration achieve real tax simplification and reform.
Level of Service Plan.--The IRS would benefit from
exploring new customer service innovations to deliver quality
and timely telephone and written correspondence service to
taxpayers. The Committee agrees with the Government Accounting
Office recommendation that the IRS should systematically and
periodically compare its level of telephone service to the best
in business to identify gaps between actual and desired
performance and directs IRS to submit a plan to the Committees
on Appropriations of the House and Senate six months after the
enactment of this Act. This should include a customer service
plan with specific goals, strategies, and resources to achieve
those goals.
Earned Income Tax Credits.--The Committee recognizes the
importance of continued efforts to improve the administration
of the Earned Income Tax Credits (EITC) for all taxpayers and
encourages the IRS to submit a report to the committees on
Appropriations of the House and Senate six months after the
enactment of this Act that explores new strategies to reduce
fraudulent EITC claims. The Committee directs the IRS to
develop a report on efforts taken by the agency to protect
taxpayer information, and how the agency is addressing the
specific issue with the EITC.
Safe Harbor.--The Committee instructs the Internal Revenue
Service to follow and apply, the 75 percent math safe harbor
test. Section 4052(f)(1) provides a safe harbor test that
excludes from the tax previously taxed tractors that are
refurbished as long as the restoration cost does not exceed 75-
percent of the cost of a comparable new tractor. Therefore, the
Committee expects that the IRS apply these longstanding
statutory provisions as written and without additional
interpretation, modification, or added conditions.
IRS Phone Scams.--The committee supports the IRS efforts to
provide taxpayers with information on how to protect themselves
from telephone scam artists calling and pretending to be with
the IRS. However, these aggressive and threatening phone calls
by criminals impersonating IRS agents remain a major threat to
taxpayers. The Committee strongly encourages the IRS to partner
with federal and state law enforcement agencies to develop a
plan to curtail and stop these calls. The IRS shall report to
the Committees on Appropriations of the House and Senate 120
days after enactment of this Act on their plan of action. The
IRS has provided public information on tips and best practices
in this area. Currently, the IRS recommends individuals report
these abuses to the Treasury Inspector General for tax
Administration.
Taxpayer Correspondence.--The Committee encourages the IRS
to implement a system for tracking delivery status of taxpayer
correspondence and integrating that information into its
systems. By utilizing services provided through the USPS
Intelligent Mail Barcode, the Committee believes that IRS can
prevent fraud, enhance taxpayer service, and reduce costs
through real-time awareness of delivery exceptions, updated
address information, and the capability to automatically send
undeliverable taxpayer correspondence to a USPS facility for
secure destruction. The Committee directs the IRS to produce a
report to the Committees on Appropriations of the House and
Senate no later than six months after enactment of this Act on
the potential future savings, benefits, timeframe and costs for
implementation of such a system.
ENFORCEMENT
Appropriation, fiscal year 2017....................... $4,860,000,000
Budget request, fiscal year 2018...................... 4,706,500,000
Recommended in the bill............................... 4,810,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -50,000,000
Budget request, fiscal year 2018.................. +103,500,000
The Enforcement appropriation provides for the examination
of tax returns, both domestic and international; the
administrative and judicial settlement of taxpayer appeals of
examination findings; technical rulings; monitoring employee
pension plans; determining qualifications of organizations
seeking tax-exempt status; examining tax returns of exempt
organizations; enforcing statutes relating to detection and
investigation of criminal violations of the internal revenue
laws; identifying underreporting of tax obligations; securing
unfiled tax returns; and collecting unpaid accounts.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,810,000,000
for Enforcement. Of the funds provided, the Committee
recommends not less than $60,257,000 to support IRS activities
under the Interagency Crime and Drug Enforcement program. The
Committee carries the provision that none of the funds may be
used by the Internal Revenue Service for implementation of the
Patient Protection and Affordable Care Act.
Favorable Determination Letters.--The Committee believes
the Favorable Determination Letter program is a valuable and
useful service, assuring tax administrators that they are
operating employee plans in compliance with tax law.
Printed Forms and Instructions.--The Committee encourages
the IRS to continue to provide printed forms and instructions
to vulnerable populations, especially rural communities where
internet usage rates are below the national average.
Compliance and Tax Gap.--GAO has highlighted in their April
2017 report (GAO-17-371) the importance of the IRS's National
Research Program (NRP) study on tax compliance issues. GAO
reviewed how practices from NRP examination could improve
operational examinations. GAO notes that the NRP study on
employment tax returns provide a valuable opportunity to
identify what noncompliance areas are contributing to the $16
billion annual employment tax gap, and better align IRS
resources with the most prevalent areas of noncompliance. The
Committee encourages the IRS to review GAO's recommendations
with the intent to improve operational examinations.
Income Verification Express Services.--The Committee
directs the IRS to produce a report to the Committees on
Appropriations of the House and Senate no later than six months
after the enactment on this Act on automating its Income
Verification Express Services (IVES) with a data sharing
Application Programming Interface (API) that could help reduce
operational costs; reduce paperwork and waiting period burdens
on borrowers; provide more safeguards to ensure the privacy and
security of taxpayer account information; and potentially
expand access to credit. The IRS should include the steps
necessary to create this API, including working with U.S.
Digital Services, to build a pilot test version of the API with
dummy data that allows lenders to test prototype loan
application interface and back-end system improvements as well
as testing the user verification system to protect taxpayer
information, all of which would inform the IRS's ultimate API
design.
OPERATIONS SUPPORT
Appropriation, fiscal year 2017....................... \1\$3,638,446,00
0
Budget request, fiscal year 2018...................... 3,946,189,000
Recommended in the bill............................... 3,850,189,000
Bill compared with:
Appropriation, fiscal year 2017................... +211,743,000
Budget request, fiscal year 2018.................. -96,000,000
\1\As directed by Public Law 115-31, Division E, Section 113 of the
Administrative Provisions--Internal Revenue Service, $80,800,000 was
transferred by the Commissioner of the Internal Revenue Service to
Operations Support which increased the Operations Support fiscal year
2017 level to $3,719,246,000.
The Operations Support appropriation provides for overall
planning and direction of the IRS, including shared service
support related to facilities services, rent payments,
printing, postage, and security. Specific activities include
headquarters management activities such as strategic planning,
communications and liaison, finance, human resources, Equal
Employment Opportunity and diversity, research, information
technology, and telecommunications.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $3,850,189,000
for Operations Support. The Operations Support account reflects
a higher appropriation as the result of a permanent realignment
of funds from Systems Modernization.
Obligations and Employment.--Not later than 45 days after
the end of each quarter, the Internal Revenue Service shall
submit reports on its activities to the House and the Senate
Committees on Appropriations. The reports shall include
information about the obligations made during the previous
quarter by appropriation, object class, office, and activity;
the estimated obligations for the remainder of the fiscal year
by appropriation, object class, office, and activity; the
number of full-time equivalents within each office during the
previous quarter; and the estimated number of full-time
equivalents within each office for the remainder of the fiscal
year.
Information Technology Reports.--The Committee directs the
IRS to submit quarterly reports on particular major project
activities to the Committees on Appropriations of the House and
the Senate and the GAO, no later than 30 days following the end
of each calendar quarter in fiscal year 2018. The Committee
expects the reports to include detailed, plain English
explanations of the cumulative expenditures and schedule
performance to date, specified by fiscal year; the costs and
schedules for the previous 3 months; the anticipated costs and
schedules for the upcoming 3 months; and the total expected
costs to complete the following major information technology
project activities: IRS.gov; Returns Remittance Processing;
EDAS/IPM; Information Returns and Document Matching; E-
services; Taxpayer Advocate Service Integrated System;
Affordable Care Act administration; and other projects
associated with significant changes in law. In addition, the
quarterly report should clearly explain when the project was
started; the expected date of completion; the percentage of
work completed as compared to planned work; the current and
expected state of functionality; any changes in schedule; and
current risks unrelated to funding amounts and mitigation
strategies. The Committee directs the Department of the
Treasury to conduct a semi-annual review of IRS's IT
investments to ensure the cost, schedule, and scope of the
projects goals are transparent. The Committee further directs
GAO to review and provide an annual report to the Committees
evaluating the cost and schedule of activities of all major IRS
information technology projects for the year, with particular
focus on the projects about which the IRS is submitting
quarterly reports to the Committee.
Utilization of Cloud Services.--The Committee is concerned
the Department's largest agency, the Internal Revenue Service
appears slow to adopt new IT strategies including transition to
commercial cloud services that offer enhanced security and cost
savings including the use of digital workspace technologies for
the IRS. The IRS shall provide a report six months after
enactment of this Act to the Committees on Appropriations of
the House and Senate, to include the use of and plans for
expansion of commercial cloud computing services, the security
benefits of transitioning Federal Information Security
Management Act (FISMA) moderate and high systems and data to
commercial cloud computing services, the cost savings achieved
in fiscal year 2017 by the utilization of commercial cloud
computing services, and how the agency is performing against
their goal for data center consolidation as required by the
Federal Information Technology Acquisition Reform Act.
Taxpayer Receipt.--The Committee recognizes the importance
of empowering Americans with information to hold the federal
government accountable over how taxpayer dollars are being
spent. The Committee encourages the IRS to create a written
receipt for those filing paper tax returns and an electronic
receipt for those that e-file that will include a breakdown of
each individual's contributions to Social Security, defense
spending, Medicare and other federal programs, as well as the
total amount of federal debt and how much the federal
government has borrowed per citizen.
BUSINESS SYSTEMS MODERNIZATION
Appropriation, fiscal year 2017....................... $290,000,000
Budget request, fiscal year 2018...................... 110,000,000
Recommended in the bill............................... 110,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -180,000,000
Budget request, fiscal year 2018.................. - - -
The Business Systems Modernization (BSM) appropriation
provides funding to modernize key business systems of the
Internal Revenue Service. Funds have been permanently
transferred from this account to Operations Support to fund
operation and maintenance for the existing infrastructure that
will help protect the IRS from cyber threats.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $110,000,000
for BSM. The Committee continues to support IRS in its efforts
to modernize its business systems such as CADE 2 and the Return
Review Program that enhances IRS capabilities to detect,
address, and prevent tax refund fraud as well as web
applications that will help the IRS transition to a more
serviceable digital government.
Information Technology Reports.--The Committee expects the
IRS to continue to submit quarterly reports to the Committees
and GAO during fiscal year 2018, no later than 30 days
following the end of each calendar quarter. The Committee
expects the reports to include detailed, plain English
explanations of the cumulative expenditures and schedule
performance to date, specified by fiscal year; the costs and
schedules for the previous 3 months; the anticipated costs and
schedules for the upcoming 3 months; and the total expected
costs to complete CADE2 and Return Review Program. In addition,
the quarterly report should clearly explain when the project
was started; the expected date of completion; the percentage of
work completed as compared to planned work; the current and
expected state of functionality; any changes in schedule; and
current risks unrelated to funding amounts and mitigation
strategies. The Committee directs the Department of the
Treasury to conduct a semi-annual review of CADE2 and Return
Review Program to ensure the cost, schedule, and scope goals of
the projects are transparent. The Committee further directs GAO
to review and provide an annual report to the Committee
evaluating the cost and schedule of CADE2 and Return Review
Program activities for the year, as well as an assessment of
the functionality achieved.
Audit Trail Compliance--Audit trails are a key component of
effective information technology security. Maintaining
sufficient audit trails is critical to establishing
accountability over users and their actions within information
systems. The Committee directs the IRS to submit quarterly
reports to the Committees on Appropriations of the House and
Senate and Treasury Inspector General for Tax Administration
(TIGTA) on its progress towards implementing the audit trail
requirements described in TIGTA's ``Semiannual Report to
Congress April 1, 2015-September 30, 2015'', consistent with
the Internal Revenue Manual, for legacy and planned business
systems modernization investments with priority consideration
to business systems presenting the most significant threats to
taxpayer information.
Aging Infrastructure--The IRS estimates that 64 percent of
its information technology hardware infrastructure is beyond
its useful life. This aging infrastructure creates significant
risks in the American tax system. The Treasury Inspector
General for Tax Administration is currently reviewing this
issue and has identified that outdated hardware infrastructure
has negatively affected the IRS's ability to ensure the
security of taxpayer information. It has also affected IRS
productivity and taxpayer service due to system downtime. The
Committee looks forward to seeing TIGTA's pending report on
this issue and encourages TIGTA to monitor and periodically
report on the impact aging IT infrastructure has on the IRS's
ability to operate efficiently and protect the security of
taxpayer information.
ADMINISTRATIVE PROVISIONS--INTERNAL REVENUE SERVICE
(INCLUDING TRANSFERS OF FUNDS)
Section 101. The Committee continues a provision that
allows for the transfer of five percent of any appropriation
made available to the IRS to any other IRS appropriation, upon
the advance approval of the Committees on Appropriations of the
House and Senate.
Section 102. The Committee continues a provision that
requires the IRS to maintain a training program to include
taxpayer rights, dealing courteously with taxpayers, cross-
cultural relations, and the impartial application of tax law.
Section 103. The Committee continues a provision that
requires the IRS to institute and enforce policies and
procedures that will safeguard the confidentiality of taxpayer
information and protect taxpayers against identity theft.
Section 104. The Committee continues a provision that makes
funds available for improved facilities and increased staffing
to provide efficient and effective 1-800 number help line
service for taxpayers.
Section 105. The Committee continues a provision with
modifications requiring videos produced by the IRS to be
approved in advance by the Service-Wide Video Editorial Board.
Section 106. The Committee continues a provision that
requires the IRS to notify employers of any address change
request and to give special consideration to offers in
compromise for taxpayers who have been victims of payroll tax
preparer fraud.
Section 107. The Committee continues a provision with
modifications that prohibits the IRS from targeting U.S.
citizens for exercising their First Amendment rights.
Section 108. The Committee continues a provision with
modifications that prohibits the IRS from targeting groups
based on their ideological beliefs.
Section 109. The Committee continues a provision with
modifications that requires the IRS to comply with procedures
and policies on conference spending as recommended by the
Treasury Inspector General for Tax Administration.
Section 110. The Committee continues a provision with
modifications that prohibits funds for giving bonuses to
employees or hiring former employees without considering
conduct and compliance with Federal tax law.
Section 111. The Committee continues a provision with
modifications that prohibits funds to violate the
confidentiality of tax returns.
Section 112. The Committee includes a new provision that
prohibits funds from being used to implement the individual
mandate of the Affordable Care Act.
Section 113. The Committee continues a provision with
modifications that prohibits funds for pre-populated returns.
Section 114. The Committee includes a new provision that
prohibits funds to implement an IRS Notice on conservations
easements.
Section 115. The Committee includes a new provision that
prohibits funds to finalize, implement, or enforce amendments
related to restrictions on liquidation of an interest with
respect to estate, gift, and generation-skipping transfer taxes
from taking effect.
Section 116. The Committee includes a new provision to
prohibit funds for the Internal Revenue Service (IRS) to
determine that a church is not exempt from taxation for
participating in, or intervening in, any political campaign on
behalf of (or in opposition to) any candidates for public
office unless the IRS Commissioner consents to such
determination, the Commissioner notifies the tax committees of
Congress, and the determination is effective 90 days after such
notification.
ADMINISTRATIVE PROVISIONS--DEPARTMENT OF THE TREASURY
(INCLUDING TRANSFERS OF FUNDS)
Section 117. The Committee continues a provision that
authorizes the Department to purchase uniforms, insurance for
motor vehicles that are overseas, and motor vehicles that are
overseas without regard to the general purchase price
limitations; to enter into contracts with the State Department
for health and medical services for Treasury employees who are
overseas; and to hire experts or consultants.
Section 118. The Committee continues a provision that
authorizes transfers, up to two percent, between ``Departmental
Offices--Salaries and Expenses'', ``Office of Inspector
General'', ``Special Inspector General for the Troubled Asset
Relief Program'', ``Financial Crimes Enforcement Network'',
``Bureau of the Fiscal Service'', and ``Alcohol and Tobacco Tax
and Trade Bureau'' appropriations under certain circumstances.
Section 119. The Committee continues a provision that
authorizes transfers, up to two percent, between the Internal
Revenue Service and the Treasury Inspector General for Tax
Administration under certain circumstances.
Section 120. The Committee continues a provision that
prohibits the Department of the Treasury from undertaking a
redesign of the one dollar Federal Reserve note.
Section 121. The Committee includes a provision that
provides for transfers from the Bureau of the Fiscal Service to
the Debt Collection Fund as necessary for the purposes of debt
collection.
Section 122. The Committee continues a provision that
requires congressional approval for the construction and
operation of a museum by the United States Mint.
Section 123. The Committee continues a provision
prohibiting funds in this or any other Act from being used to
merge the United States Mint and the Bureau of Engraving and
Printing without the approval of the House and Senate
committees of jurisdiction.
Section 124. The Committee continues a provision deeming
that funds for the Department of the Treasury's intelligence-
related activities are specifically authorized in fiscal year
2018 until enactment of the Intelligence Authorization Act for
fiscal year 2018.
Section 125. The Committee continues a provision permitting
the Bureau of Engraving and Printing to use $5,000 from the
Industrial Revolving Fund for reception and representation
expenses.
Section 126. The Committee continues a provision that
requires the Department to submit a capital investment plan.
Section 127. The Committee continues a provision that
requires quarterly reports of the Office of Financial Research
(OFR) and Office of Financial Stability.
Section 128. The Committee continues a provision that
requires a report on the Department's Franchise Fund.
Section 129. The Committee continues a provision that
prohibits the Department from finalizing any regulation related
to the standards used to determine the tax-exempt status of a
501(c)(4) organization.
Section 130. The Committee includes a new provision to
prohibit funds to approve, license, facilitate, authorize, or
otherwise allow the importation of property confiscated by the
Cuban Government.
Section 131. The Committee includes a new provision to
prohibit funds to approve or otherwise allow the licensing of a
mark, trade name, or commercial name that is substantially
similar to one that was used in connection with a business or
assets that were confiscated unless expressly consented.
Section 132. The Committee includes a new provision
requiring the Special Inspector General for the Troubled Asset
Relief Program to prioritize performance audits or
investigations of programs funded under the Emergency Economic
Stabilization Act of 2008.
Section 133. The Committee includes a new provision that
prohibits the Department from enforcing guidance for U.S.
positions on multilateral development banks which engage with
developing countries on coal-fired power generation.
TITLE II--EXECUTIVE OFFICE OF THE PRESIDENT AND FUNDS APPROPRIATED TO
THE PRESIDENT
Funds appropriated in this title provide for the staff and
operations of the White House, along with other organizations
within the Executive Office of the President (EOP), which
formulate and coordinate policy on behalf of the President,
such as the National Security Council and the Office of
Management and Budget. The title also includes funding for the
Office of National Drug Control Policy and certain expenses of
the Vice President.
The White House
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $55,214,000
Budget request, fiscal year 2018...................... 55,000,000
Recommended in the bill............................... 55,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -214,000
Budget request, fiscal year 2018.................. - - -
The White House Salaries and Expenses account supports
staff and administrative services necessary for the direct
support of the President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $55,000,000
for the White House.
Executive Residence at the White House
OPERATING EXPENSES
Appropriation, fiscal year 2017....................... $12,723,000
Budget request, fiscal year 2018...................... 12,917,000
Recommended in the bill............................... 12,917,000
Bill compared with:
Appropriation, fiscal year 2017................... +194,000
Budget request, fiscal year 2018.................. - - -
These funds provide for the care, maintenance, staffing and
operations of the Executive Residence, including official and
ceremonial functions of the President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $12,917,000
for the Operating Expenses of the Executive Residence. The bill
continues the same restrictions on reimbursable expenses for
use of the Executive Residence as were included in past years.
White House Repair and Restoration
Appropriation, fiscal year 2017....................... $750,000
Budget request, fiscal year 2018...................... 750,000
Recommended in the bill............................... 750,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
The White House repair and restoration account provides for
the repair, alteration, and improvement of the Executive
Residence at the White House.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $750,000 for
White House Repair and Restoration.
Council of Economic Advisers
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $4,201,000
Budget request, fiscal year 2018...................... 4,187,000
Recommended in the bill............................... 4,187,000
Bill compared with:
Appropriation, fiscal year 2017................... -14,000
Budget request, fiscal year 2018.................. - - -
The Council of Economic Advisers analyzes the national
economy and its various segments, advises the President on
economic developments, recommends policies for economic growth
and stability, appraises economic programs and policies of the
Federal Government, and assists in preparation of the annual
Economic Report of the President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,187,000 for
the Council of Economic Advisers.
Evidence-based Policymaking.--The recent bipartisan focus
on improving evidence-based policymaking has highlighted the
need for stronger partnerships between researchers and
government decision-makers to ensure that research informs
policy and that agencies have the capacity to carry out
rigorous evaluations that can produce actionable findings to
improve government effectiveness. The Council of Economic
Advisers could play a key role in helping the White House and
federal agencies form partnerships with strong researchers,
inside and outside government, to build knowledge about what
works in priority areas. The Committee encourages CEA to work
closely with the Office of Management and Budget on strategies
for improving agency evaluation capacity, which could include
identifying strong researchers to serve in government agencies
under the Intergovernmental Personnel Act.
National Security Council and Homeland Security Council
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $12,000,000
Budget request, fiscal year 2018...................... 13,500,000
Recommended in the bill............................... 11,800,000
Bill compared with:
Appropriation, fiscal year 2017................... -200,000
Budget request, fiscal year 2018.................. -1,700,000
The National Security Council and the Homeland Security
Council have been combined to form the National Security Staff
which advises and assists the President in the integration of
domestic, foreign, military, intelligence, and economic aspects
of national security policy, and serves as the principal means
of coordinating executive departments and agencies in the
development and implementation of national security and
homeland security policies.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $11,800,000
for the National Security Council (NSC) and Homeland Security
Council.
Staffing report.--The Committee is awaiting delivery of the
staffing report directed in the fiscal year 2017 Committee
report, and reiterates concerns of overstaffing to the point of
rendering the Council ineffective. The Committee's
recommendation adopts the elements of the request as presented
in the object class schedule, but adjusts the total to reflect
2016 personnel compensation and benefits levels. The Committee
again directs the National Security Council to submit a report
within 90 days of enactment of this Act that outlines the roles
and responsibilities of all of its full time equivalent (FTE)
employees. This report shall include a breakout of all
positions and FTEs that are assigned from other agencies to the
NSC and all FTEs which the NSC has detailed to other agencies
as well as associated start and end dates of assignment and any
unreimbursed costs. Finally, the report shall contain a
staffing reduction plan on how the NSC proposes to meet the
budget reduction.
Office of Administration
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $101,041,000
Budget request, fiscal year 2018...................... 100,000,000
Recommended in the bill............................... 100,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -1,041,000
Budget request, fiscal year 2018.................. - - -
The Office of Administration is responsible for providing
administrative services to the Executive Office of the
President. These services include financial, personnel,
procurement, information technology, records management, and
general office services.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $100,000,000
for the Office of Administration. Of the recommended amount,
not to exceed $12,800,000 is available until expended for
modernization of the information technology infrastructure
within the Executive Office of the President.
Office of Management and Budget
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $95,000,000
Budget request, fiscal year 2018...................... 103,000,000
Recommended in the bill............................... 100,000,000
Bill compared with:
Appropriation, fiscal year 2017................... +5,000,000
Budget request, fiscal year 2018.................. -3,000,000
The Office of Management and Budget (OMB) assists the
President in the discharge of budgetary, economic, management,
and other executive responsibilities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $100,000,000
for OMB. The recommendation also continues several long-
standing provisos, not requested by the President, limiting
certain OMB activities.
Budget Submission.--The recommendation provides sufficient
funds for OMB to consult with and provide Congressional
Committees with an appropriate number of printed and electronic
copies of the President's fiscal year 2019 budget request,
including documents such as the Appendix, Historical Tables,
and Analytical Perspectives. The Committee believes that if the
Administration wants the Congress to consider its proposed
budget that it should provide the Congress with copies of the
budget request.
Personnel and Obligations Report.--The Committee directs
OMB to provide the Committees on Appropriations of the House
and Senate with quarterly reports on personnel and obligations
consisting of on-board staffing levels, estimated staffing
levels by office for the remainder of the fiscal year, total
obligations incurred to date, estimated total obligations for
the remainder of the fiscal year, and a narrative description
of current hiring initiatives.
Unobligated Balances Report.--OMB is directed to report to
the Committees on Appropriations of the House and Senate within
45 days of the end of each fiscal quarter on available balances
at the start of the fiscal year, current year obligations, and
resulting unobligated balances for each discretionary account
within the Financial Services and General Government
subcommittee's jurisdiction.
Efficiency Based Contracting Models.--The Committee notes
that contracting models for digital government services and
information technology services are available to agencies that
will increase efficiencies and believes that more should be
done to take advantage of these models. These proven
contracting models have been shown to save government money and
enhance the user experience. A report by OMB in March 2015
identified no-cost contracting and transaction-based models as
ones that are beneficial to agencies both in increased
efficiencies and cost savings. Since that time, few agencies
have moved forward on procuring technological solutions using
these models. The Committee encourages OMB to work with
agencies to identify opportunities for no-cost or transaction
based contracting models in 2018.
Social Cost of Carbon.--The Committee directs the Office of
Information and Regulatory Affairs (OIRA) to rely on
instruction included in the Executive Order ``Promoting Energy
Independence and Economic Growth,'' dated March 28, 2017, and
ensure that any estimates developed by agencies that include
monetizing the value of changes in greenhouse gas emissions
resulting from regulations are consistent with Executive Order
12866 and OMB Circular A-4 of September 17, 2003. OIRA should
not permit any regulations to be finalized using the Technical
Support Document: Technical Update of the Social Cost of Carbon
for Regulatory Impact Analysis Under Executive Order 12866,
Interagency Working Group on Social Cost of Carbon, United
States Government, May 2013, revised August 2016; or the
Addendum to Technical Support Document on Social Cost of Carbon
for Regulatory Impact Analysis Under Executive Order 12866:
Application of the Methodology to Estimate the Social Cost of
Methane and the Social Cost of Nitrous Oxide, Interagency
Working Group on Social Cost of Greenhouse Gases, United States
Government, August 2016.
Intellectual Property.--The Committee continues to strongly
support the Office of the Intellectual Property Enforcement
Coordinator (IPEC), and encourages the Office to continue to
promote private sector efforts to reduce online copyright
infringement and to implement a meaningful plan, as called for
in the Joint Strategic Plan, to enhance capacity building,
outreach, and training programs to promote meaningful
protection of American intellectual property abroad. Therefore,
the Committee recommends no less than three FTEs dedicated
solely to the Office of IPEC from OMB. The Committee also
directs IPEC, with FTC, to initiate educational campaigns to
raise consumer awareness about how content-theft sites serve as
infiltration devices with malicious software, thereby enabling
identity theft.
Evidence-based Policy Making.--The Committee appreciates
the valuable role OMB has played under recent administrations
to strengthen agency capacity for evaluation and evidence-based
policymaking, to encourage agency adoption of evidence-focused
grant program designs in which grantees use and build evidence
about what works in service delivery, and to foster development
of cross-agency data-linkage infrastructure to support program
evaluation while protecting privacy. However, these efforts
have not reached many parts of government that could benefit.
The Committee encourages OMB, in consultation with the Council
of Economic Advisers and other White House offices, to develop
strategies to accelerate learning about what works through
rigorous evaluations and to create connections between
researchers and policymakers that ensure the best evidence is
brought to bear in decision-making. These strategies should
draw upon important innovations in several agencies, such as
creation of learning agendas to prioritize research and
evaluation; new program designs such as tiered evidence and Pay
for Success grants; recruitment of strong researchers from
academic institutions to serve in government agencies under the
Intergovernmental Personnel Act; partnerships with state and
local governments that foster bottoms-up innovations that are
evaluated to learn their impact; and collaborations with
foundations focused on increasing government's capacity for
rigorous research in important policy areas. The Committee
believes that performance management activities carried out
under the Government Performance and Results Act Modernization
Act (GPRAMA) should be integrated into government-wide
evidence-building efforts in ways that enhance learning and
improvement.
Improper Payments.--The Committee encourages OMB to
continue working with agencies across the Federal government to
ensure processes are in place to eliminate payments to deceased
persons. OMB is again directed to report to the Committees on
Appropriations of the House and Senate within 120 days of
enactment of this Act on how it is ensuring that agencies are
not making improper payments to deceased individuals, and
demonstrate improvements over the prior year.
DATA Act.--The Committee recognizes OMB's responsibilities
related to implementation of the Digital Accountability and
Transparency Act of 2014 (DATA Act), and urges OMB to
adequately prioritize DATA Act implementation. The Committee
directs OMB to ensure agency compliance of the data-centric
approach to federal financial reporting and fully standardized
automated agency data submissions. The Committee includes
funding for activities associated with DATA Act implementation
and expects OMB to keep the Committee informed on its DATA Act
implementation efforts.
Customer Service.--The Committee continues to support
efforts to improve customer service in accordance with
Executive Order 13571-Streamlining Service Delivery and
Improving Customer Service. Despite those efforts, more needs
to be done to improve the services that the government provides
whether it is citizens calling the Internal Revenue Service
with questions, or Office of Personnel Management processing
Federal employment retirement claims. The Committee continues
direction to OMB to develop standards to improve customer
service for all agencies, and provide to the Committees on
Appropriations of the House and Senate a report on how these
standards are incorporated into the performance plans required
under 31 U.S.C. 1115 within 90 days of the enactment of this
Act.
Performance Measures.--The Committee continues to urge OMB
to work with agencies to ensure that agency funding requests in
fiscal year 2019 are directly linked to agency performance
plans. The Committee directs OMB to report to the Committees on
Appropriations of the House and Senate within 180 days of
enactment of this Act on its progress improving the use of
performance measures in the Executive Branch's budgeting
processes, and highlight examples of where improved performance
links to the budget in the fiscal year 2018 budget
justifications.
Online Budget Repository.--The Committee encourages OMB to
develop a central online repository where all Federal agency
budgets and their respective justifications are publicly
available in a consistent searchable, sortable, and machine
readable format.
Offsetting Collections Report.--The Committee directs OMB
to submit a report to the House and Senate Committees on
Appropriations concurrent with the fiscal year 2019 budget
submission detailing the offsetting collections derived from
non-federal sources that are authorized by law and not subject
to appropriations.
USASpending.gov.--The Committee encourages OMB to develop
and implement an oversight process to regularly assess the
consistency of the information reported on USASpending.gov by
federal agencies.
Information Technology Acquisition.--In an effort to
shorten lengthy procurement cycles for federal agencies working
to acquire information technology platforms, the Committee
recommends that the OMB designate a federal agency most in need
of enterprise-wide information technology improvement and
undertake a twelve-month pilot to develop a model process for
information technology acquisition. Development of this model
should utilize more efficient procurement strategies for
information technology devices and systems, and should include
the acceptance of unsolicited proposals as well as properly
justified sole-source procurements and other innovative and
expediting acquisition methods to acquire, test, or experiment
with information technology and cybersecurity products,
services, and systems.
Office of National Drug Control Policy
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $19,274,000
Budget request, fiscal year 2018...................... 18,400,000
Recommended in the bill............................... 18,400,000
Bill compared with:
Appropriation, fiscal year 2017................... -874,000
Budget request, fiscal year 2018.................. - - -
The Office of National Drug Control Policy (ONDCP) was
established by the Anti-Drug Abuse Act of 1988. As the
President's primary source of support for counter-drug policy
development and program oversight, ONDCP is responsible for
developing and updating a National Drug Control Strategy,
developing a National Drug Control Budget, and coordinating and
evaluating the implementation of Federal drug control
activities. In addition, ONDCP manages several counter-drug
programs which are discussed under the ``Federal Drug Control
Programs'' heading below. These programs include the High
Intensity Drug Trafficking Areas (HIDTA) program and Drug-Free
Communities grants.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $18,400,000
for ONDCP Salaries and Expenses. The Committee expects ONDCP to
focus resources on the counter-drug policy development,
coordination, and evaluation functions which are the primary
mission of the Office and the origins of its existence.
The Committee strongly supports the Office of National Drug
Control Policy programs to reduce drug use and drug
trafficking, and its unique position as the coordinator of
Federal programs. The Committee expects ONDCP to focus
resources on the counter-drug policy development, coordination,
and evaluation functions, which are the primary mission of the
Office and the origins of its existence. To the extent
practicable, ONDCP should prioritize discretionary funds to aid
States that have identified heroin, cocaine, methamphetamine,
and opioid addiction as threats, and are developing community
responses to combat those drugs that prioritize treatment and
health services over criminal punishment. ONDCP is directed to
report to the Committees on Appropriations of the House and
Senate within 90 days of enactment on how its programs are
addressing these challenges.
The Committee commends the work that ONDCP has done to aid
rural communities in combating the opioid epidemic. More work
is still needed to help some of the hardest hit communities in
both rural America and Appalachia. The Committee expects ONDCP
to coordinate with small and rural law enforcement agencies and
develop strategies to improve the effectiveness of drug
eradication efforts through shared intelligence, technology,
and manpower despite limited resources.
FEDERAL DRUG CONTROL PROGRAMS
HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2017....................... $254,000,000
Budget request, fiscal year 2018...................... 246,525,000
Recommended in the bill............................... 254,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +7,475,000
The High Intensity Drug Trafficking Areas (HIDTA) Program
provides resources to Federal and State, local, and tribal
agencies in designated HIDTAs to combat the production,
transportation and distribution of illegal drugs; to seize
assets derived from drug trafficking; to address violence in
drug-plagued communities; and to disrupt the drug marketplace.
Currently, 28 HIDTAs operate in 48 States plus the District
of Columbia, Puerto Rico, and the Virgin Islands. Each HIDTA is
managed by an Executive Board comprised of equal numbers of
Federal, State, local or tribal officials. Each HIDTA Executive
Board is responsible for designing and implementing initiatives
for the specific drug trafficking threats in its region.
Intelligence and information sharing are key elements of all
HIDTA programs.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $254,000,000
for the HIDTA Program. The Committee believes that the HIDTA
program has demonstrated its effectiveness and can serve as an
important tool in combating problems of drug trafficking and
drug-related violence.
The Committee includes language requiring that existing
HIDTAs receive funding at least equal to the fiscal year 2017
level unless the Director submits a justification for doing
otherwise to the Committees on Appropriations, based on clearly
articulated priorities and published performance measures.
The recommendation includes bill language directing ONDCP
to notify the Committees on Appropriations of the initial
allocation of HIDTA funds no later than 45 days after
enactment, and to notify the Committees of the proposed use of
funds no later than 90 days after enactment. The language
directs the ONDCP Director to work in consultation with the
HIDTA Directors in determining the uses of that discretionary
funding.
Finally, the Committee recommendation specifies that up to
$2,700,000 may be used for auditing services and related
activities.
OTHER FEDERAL DRUG CONTROL PROGRAMS
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2017....................... $114,871,000
Budget request, fiscal year 2018...................... 103,662,000
Recommended in the bill............................... 108,843,000
Bill compared with:
Appropriation, fiscal year 2017................... -6,028,000
Budget request, fiscal year 2018.................. +5,181,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $108,843,000
for Other Federal Drug Control Programs. The recommended level
for fiscal year 2018 is distributed among specific programs and
activities as follows:
Drug-Free Communities................................. $91,000,000
Drug court training and technical assistance.......... 2,000,000
Model Drug Laws (Section 1105 of P.L. 109-469)........ 1,000,000
CARA Activities (Section 103 of P.L. 114-198)......... 3,000,000
Anti-Doping activities................................ 9,500,000
World Anti-Doping Agency dues......................... 2,343,000
Within the total for the Drug-Free Communities program,
$2,000,000 is for training authorized by Section 4 of P.L. 107-
82.
Unanticipated Needs
Appropriation, fiscal year 2017....................... $800,000
Budget request, fiscal year 2018...................... 798,000
Recommended in the bill............................... 798,000
Bill compared with:
Appropriation, fiscal year 2017................... -2,000
Budget request, fiscal year 2018.................. - - -
The unanticipated needs account enable the President to
meet unanticipated exigencies in support of the national
interest, security, or defense.
COMMITTEE RECOMMENDATION
The Committee recommends $798,000 for unanticipated needs
in fiscal year 2018.
Information Technology Oversight and Reform
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $27,000,000
Budget request, fiscal year 2018...................... 25,000,000
Recommended in the bill............................... 20,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -7,000,000
Budget request, fiscal year 2018.................. -5,000,000
These funds support efforts to make the Federal
Government's investments in information technology (IT) more
efficient, secure and effective.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $20,000,000
for IT activities. The Committee appreciates OMB's efforts to
improve program and contract management of information
technology investments as well as the Administration's efforts
to utilize cloud computing and consolidate data centers. The
Committee expects OMB to improve the processes used to develop
information technology systems. The Committee directs OMB to
provide the Committees on Appropriations of the House and the
Senate with quarterly reports on savings this program
identifies by fiscal year, agency and appropriation.
Special Assistance to the President
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $4,228,000
Budget request, fiscal year 2018...................... 4,288,000
Recommended in the bill............................... 4,288,000
Bill compared with:
Appropriation, fiscal year 2017................... +60,000
Budget request, fiscal year 2018.................. - - -
These funds support the executive functions of the Office
of the Vice President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,288,000 for
the Office of the Vice President.
Official Residence of the Vice President
OPERATING EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $299,000
Budget request, fiscal year 2018...................... 302,000
Recommended in the bill............................... 302,000
Bill compared with:
Appropriation, fiscal year 2017................... +3,000
Budget request, fiscal year 2018.................. - - -
These funds support the care and operation of the Vice
President's residence and specifically support equipment,
furnishings, dining facilities, and services required to
perform and discharge the Vice President's official duties,
functions and obligations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $302,000 for
the Operating Expenses of the Vice President's residence.
Administrative Provisions--Executive Office of the President and Funds
Appropriated to the President
(INCLUDING TRANSFER OF FUNDS)
Section 201. The Committee includes language permitting the
transfer of not to exceed ten percent of funds between various
accounts within the Executive Office of the President, with
advance approval of the Committees on Appropriations. The
amount of an appropriation shall not be increased by more than
50 percent.
Section 202. The Committee continues language requiring the
Director of the Office of Management and Budget to report on
the costs of implementing the Dodd-Frank Wall Street Reform and
Consumer Protection Act (Public Law 111-203).
Section 203. The Committee includes language requiring the
Director of the Office of Management and Budget to include a
statement of budgetary impact with any Executive Order or
Presidential Memorandum issued or rescinded during fiscal year
2018 where the regulatory cost exceeds $100,000,000.
TITLE III--THE JUDICIARY
The funds recommended by the Committee in title III of the
accompanying bill are for the operation and maintenance of
United States Courts and include the salaries of judges,
probation and pretrial services officers, public defenders,
court clerks, law clerks, and other supporting personnel, as
well as security costs, information technology, and other
expenses of the Federal Judiciary. The Committee recommends a
total of $7,093,625,000 in discretionary funding for the
Judiciary in fiscal year 2018.
In addition to direct appropriations, the Judiciary
collects various fees and has certain multiyear funding
authorities. The Judiciary uses these non-appropriated funds to
offset its direct appropriation requirements. Consistent with
prior year practices and section 608 of this Act, the Committee
expects the Judiciary to submit a financial plan, within 60
days of enactment of this Act, allocating all sources of
available funds including appropriations, fee collections, and
carryover balances. This financial plan will be the baseline
for purposes of reprogramming notification.
Improving the physical security at buildings occupied by
the Judiciary and U.S. Marshals Service (USMS) and ensuring the
integrity of the judicial process by providing secure
facilities to conduct judicial business is a priority for the
Committee. Under the General Services Administration's (GSA)
Federal Buildings Fund appropriation, the Committee recommends
$20,000,000 for the Judiciary Capital Security program for
alterations to improve physical security in buildings occupied
by the Judiciary and USMS.
The Committee notes that a fair and efficient judicial
system depends on ensuring citizens have reasonable access to
the federal courts. The Committee encourages the Judiciary and
the General Services Administration to collaborate with local
stakeholders to facilitate continued community access to court
services. The Committee further encourages the Judiciary, when
developing its space requirements for a particular location, to
continue to consider factors including the number of available
judges, local facility conditions, security, rental and
operating costs, the number and type of proceedings handled in
that location, the location's distance to the next closest
federal court facility, and the population served in that
location.
The Committee urges the Judiciary in coordination with GSA
to consider practical and cost effective approaches to
providing judicial services, as appropriate, in areas that lack
a federal facility in which civil and criminal proceedings are
held.
The Judiciary shall provide to the House and Senate
Committees on Appropriations a report addressing (1) trends in
Public Access to Court Electronic Records (PACER) revenues
since passage of the E-Government Act of 2002; (2) sources of
PACER revenues broken out by general types of users, such as
federal government, corporations, and individuals, over a five
fiscal year period; (3) an itemization of how PACER revenues
are spent (including the annual cost of operating the PACER
Service Center, which performs functions such as billing and
customer support) over the same five fiscal year period; and
(4) initiatives planned or underway by the Judiciary to improve
PACER technology, operations, or management for the purpose of
providing greater functionality, an improved user experience,
or greater efficiency. This report shall be provided no later
than 120 days after the enactment of this Act.
Supreme Court of the United States
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $76,668,000
Budget request, fiscal year 2018...................... 78,538,000
Recommended in the bill............................... 78,538,000
Bill compared with:
Appropriation, fiscal year 2017................... +1,870,000
Budget request, fiscal year 2018.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $78,538,000
for fiscal year 2018 for the salaries and expenses of personnel
and the cost of operating the Supreme Court, excluding the care
of the building and grounds. The Committee includes bill
language making $1,500,000 available until expended for the
purpose of making information technology investments. The
Committee directs the Court to include an annual report with
its budget justification materials, showing information
technology carryover balances and describing expenditures made
in the previous fiscal year and planned expenditures in the
budget year.
CARE OF THE BUILDING AND GROUNDS
Appropriation, fiscal year 2017....................... $14,868,000
Budget request, fiscal year 2018...................... 15,689,000
Recommended in the bill............................... 15,000,000
Bill compared with:
Appropriation, fiscal year 2017................... +132,000
Budget request, fiscal year 2018.................. -689,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $15,000,000
for fiscal year 2018, to remain available until expended. The
Architect of the Capitol has responsibility for these functions
and supervises the use of this appropriation.
United States Court of Appeals for the Federal Circuit
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $30,108,000
Budget request, fiscal year 2018...................... 31,075,000
Recommended in the bill............................... 30,592,000
Bill compared with:
Appropriation, fiscal year 2017................... +484,000
Budget request, fiscal year 2018.................. -483,000
COMMITTEE RECOMMENDATION
The Court of Appeals for the Federal Circuit has exclusive
national jurisdiction over a large number of diverse subject
areas, including government contracts, patents, trademarks,
Federal personnel, and veterans' benefits. The Committee
recommends an appropriation of $30,592,000 for fiscal year
2018.
United States Court of International Trade
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $18,462,000
Budget request, fiscal year 2018...................... 18,649,000
Recommended in the bill............................... 18,556,000
Bill compared with:
Appropriation, fiscal year 2017................... +94,000,000
Budget request, fiscal year 2018.................. -93,000,000
COMMITTEE RECOMMENDATION
The Court of International Trade has exclusive nationwide
jurisdiction of civil actions against the United States and
certain civil actions brought by the United States, arising out
of import transactions and administration and enforcement of
the Federal customs and international trade laws. The Committee
recommends an appropriation of $18,556,000 for fiscal year
2018.
Courts of Appeals, District Courts, and Other Judicial Services
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $4,996,445,000
Budget request, fiscal year 2018...................... 5,168,974,000
Recommended in the bill............................... 5,082,710,000
Bill compared with:
Appropriation, fiscal year 2017................... +86,265,000
Budget request, fiscal year 2018.................. -86,264,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $5,082,710,000
for the operations of the regional courts of appeals, district
courts, bankruptcy courts, the Court of Federal Claims, and
probation and pretrial services offices.
The Committee recommends a reimbursement of $7,366,000 for
fiscal year 2018 from the Vaccine Injury Compensation Trust
Fund to cover expenses of the United States Court of Federal
Claims associated with processing cases under the National
Childhood Vaccine Injury Act of 1986.
DEFENDER SERVICES
Appropriation, fiscal year 2017....................... $1,044,647,000
Budget request, fiscal year 2018...................... 1,132,284,000
Recommended in the bill............................... 1,110,375,000
Bill compared with:
Appropriation, fiscal year 2017................... +65,728,000
Budget request, fiscal year 2018.................. -21,909,000
COMMITTEE RECOMMENDATION
This account provides funding for the operation of the
Federal Public Defender and Community Defender organizations
and for compensation and reimbursement of expenses of panel
attorneys appointed pursuant to the Criminal Justice Act for
representation in criminal cases. The Committee recommends an
appropriation of $1,110,375,000 for fiscal year 2018.
FEES OF JURORS AND COMMISSIONERS
Appropriation, fiscal year 2017....................... $39,929,000
Budget request, fiscal year 2018...................... 52,673,000
Recommended in the bill............................... 39,929,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. -12,744,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $39,929,000
for payments to jurors and land commissioners for fiscal year
2018.
COURT SECURITY
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $565,388,000
Budget request, fiscal year 2018...................... 583,799,000
Recommended in the bill............................... 574,593,000
Bill compared with:
Appropriation, fiscal year 2017................... +9,205,000
Budget request, fiscal year 2018.................. -9,206,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $574,593,000
for Court Security in fiscal year 2018 to provide for necessary
expenses of security and protective services in courtrooms and
adjacent areas. The recommendation will provide for the highest
priority security needs identified by the courts and the U.S.
Marshals Service.
Administrative Office of the United States Courts
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $87,500,000
Budget request, fiscal year 2018...................... 90,339,000
Recommended in the bill............................... 87,920,000
Bill compared with:
Appropriation, fiscal year 2017................... +420,000
Budget request, fiscal year 2018.................. -2,419,000
COMMITTEE RECOMMENDATION
The Administrative Office of the United States Courts (AO)
provides administrative and management support to the United
States Courts, including the probation and bankruptcy systems.
It also supports the Judicial Conference of the United States
in determining Federal Judiciary policies, in developing
methods to assist the courts to conduct business efficiently
and economically, and in enhancing the use of information
technology in the courts. The Committee recommends an
appropriation of $87,920,000 for the AO for fiscal year 2018.
Federal Judicial Center
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $28,335,000
Budget request, fiscal year 2018...................... 29,082,000
Recommended in the bill............................... 28,708,000
Bill compared with:
Appropriation, fiscal year 2017................... +373,000
Budget request, fiscal year 2018.................. -374,000
COMMITTEE RECOMMENDATION
The Federal Judicial Center (FJC) improves the management
of Federal Judicial dockets and court administration through
education for judges and staff, and research, evaluation, and
planning assistance for the courts and the Judicial Conference.
The Committee recommends an appropriation of $28,708,000 for
the FJC for fiscal year 2018.
United States Sentencing Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $18,100,000
Budget request, fiscal year 2018...................... 18,576,000
Recommended in the bill............................... 18,338,000
Bill compared with:
Appropriation, fiscal year 2017................... +238,000
Budget request, fiscal year 2018.................. -238,000
COMMITTEE RECOMMENDATION
The purpose of the U.S. Sentencing Commission is to
establish, review, and revise sentencing guidelines, policies,
and practices for the Federal criminal justice system. The
Commission is also required to monitor the operation of the
guidelines and to identify and report necessary changes to the
Congress. The Committee recommends $18,338,000 for the
Commission for fiscal year 2018.
Administrative Provisions--The Judiciary
(INCLUDING TRANSFER OF FUNDS)
Section 301. The Committee continues language to permit
funds for salaries and expenses to be available for employment
of experts and consultant services as authorized by 5 U.S.C.
3109.
Section 302. The Committee continues language that permits
up to five percent of any appropriation made available for
fiscal year 2018 to be transferred between Judiciary
appropriations provided that no appropriation shall be
decreased by more than five percent or increased by more than
ten percent by any such transfer except in certain
circumstances. In addition, the language provides that any such
transfer shall be treated as a reprogramming of funds under
sections 604 and 608 of the accompanying bill and shall not be
available for obligation or expenditure except in compliance
with the procedures set forth in those sections.
Section 303. The Committee continues language authorizing
not to exceed $11,000 to be used for official reception and
representation expenses incurred by the Judicial Conference of
the United States.
Section 304. The Committee continues language through
fiscal year 2018 regarding the delegation of authority to the
Judiciary for contracts for repairs of less than $100,000.
Section 305. The Committee continues language to authorize
a court security pilot program.
Section 306. The Committee includes language requested by
the Judicial Conference of the United States to extend
temporary judgeships in Arizona, California, Florida, Kansas,
Missouri, New Mexico, North Carolina, and Texas.
Section 307. The Committee includes language requested by
the Judicial Conference of the United States to extend
temporary bankruptcy judgeships in Virginia, Michigan, Puerto
Rico, Delaware, and Florida.
TITLE IV--DISTRICT OF COLUMBIA
Federal Funds
FEDERAL PAYMENT FOR RESIDENT TUITION SUPPORT
Appropriation, fiscal year 2017....................... $40,000,000
Budget request, fiscal year 2018...................... 30,000,000
Recommended in the bill............................... 30,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -10,000,000
Budget request, fiscal year 2018.................. - - -
The Resident Tuition Support program, also known as the
D.C. Tuition Assistance Grant (DCTAG) program, provides up to
$10,000 annually for undergraduate District students to attend
eligible four-year public universities and colleges nationwide
at in-state tuition rates. Grants of up to $2,500 per year are
available for students to attend private universities and
colleges in the D.C. metropolitan area, private Historically
Black Colleges and Universities nationwide, and public two-year
community colleges nationwide.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $30,000,000
for the resident tuition support program. The District of
Columbia can contribute local funds to this program and is
authorized to prioritize applications based on income and need
if there is demand for the program beyond the available level
of Federal funds.
FEDERAL PAYMENT FOR EMERGENCY PLANNING AND SECURITY COSTS IN THE
DISTRICT OF COLUMBIA
Appropriation, fiscal year 2017....................... $34,895,000
Budget request, fiscal year 2018...................... 13,000,000
Recommended in the bill............................... 13,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -21,895,000
Budget request, fiscal year 2018.................. - - -
As the seat of the national government, the District of
Columbia has a unique and significant responsibility for
protecting the property and personnel of the Federal
government. The Federal Payment for Emergency Planning and
Security Costs is provided to help address the impact of the
Federal presence on public safety in the District of Columbia.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $13,000,000
for emergency planning and security costs. The recommendation
reflects a reduction from the prior year as additional funds
for inauguration costs are not needed in fiscal year 2018.
FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA COURTS
Appropriation, fiscal year 2017....................... $274,611,000
Budget request, fiscal year 2018...................... 265,400,000
Recommended in the bill............................... 265,400,000
Bill compared with:
Appropriation, fiscal year 2017................... -9,211,000
Budget request, fiscal year 2018.................. - - -
Under the National Capital Revitalization and Self-
Government Improvement Act of 1997, the Federal government is
required to finance the District of Columbia Courts. This
Federal payment to the District of Columbia Courts funds the
operations of the District of Columbia Court of Appeals,
Superior Court, the Court System, and the Capital Improvement
Program.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $265,400,000
for operation of the District of Columbia Courts. This amount
includes $14,000,000 for the Court of Appeals; $121,000,000 for
the Superior Court; $71,500,000 for the Court System; and
$58,900,000 for capital improvements to courthouse facilities.
FEDERAL PAYMENT FOR DEFENDER SERVICES IN DISTRICT OF COLUMBIA COURTS
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $49,890,000
Budget request, fiscal year 2018...................... 49,890,000
Recommended in the bill............................... 49,890,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
The District of Columbia Courts appoint and compensate
attorneys to represent persons who are financially unable to
obtain such representation.
COMMITTEE RECOMMENDATION
The Committee recommends $49,890,000 for Defender Services
in the District of Columbia Courts.
FEDERAL PAYMENT TO THE COURT SERVICES AND OFFENDER SUPERVISION AGENCY
FOR THE DISTRICT OF COLUMBIA
Appropriation, fiscal year 2017....................... $248,008,000
Budget request, fiscal year 2018...................... 244,298,000
Recommended in the bill............................... 244,298,000
Bill compared with:
Appropriation, fiscal year 2017................... -3,710,000
Budget request, fiscal year 2018.................. - - -
The Court Services and Offender Supervision Agency (CSOSA)
for the District of Columbia is an independent Federal agency
created by the National Capital Revitalization and Self-
Government Improvement Act of 1997. CSOSA acquired the
operational responsibilities for the former District agencies
in charge of probation and parole, and houses the Pretrial
Services Agency (PSA) for the District of Columbia within its
framework.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $244,298,000
for CSOSA. Of the amounts provided, $180,840,000 is for
Community Supervision and Sex Offender Registration and
$63,458,000 is for pretrial services.
FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA PUBLIC DEFENDER SERVICE
Appropriation, fiscal year 2017....................... $41,829,000
Budget request, fiscal year 2018...................... 40,082,000
Recommended in the bill............................... 40,082,000
Bill compared with:
Appropriation, fiscal year 2017................... -1,747,000
Budget request, fiscal year 2018.................. - - -
The Public Defender Service (PDS) for the District of
Columbia is an independent organization authorized by the
National Capital Revitalization and Self-Government Improvement
Act of 1997, whose purpose is to provide legal representation
services within the District of Columbia justice system.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $40,082,000
for public defender services for the District of Columbia.
FEDERAL PAYMENT TO THE CRIMINAL JUSTICE COORDINATING COUNCIL
Appropriation, fiscal year 2017....................... $2,000,000
Budget request, fiscal year 2018...................... 1,900,000
Recommended in the bill............................... 1,900,000
Bill compared with:
Appropriation, fiscal year 2017................... -100,000
Budget request, fiscal year 2018.................. - - -
The Criminal Justice Coordinating Council (CJCC) provides a
forum for District of Columbia and Federal law enforcement to
identify criminal justice issues and solutions, and improve the
coordination of their efforts. In addition, the CJCC developed
and maintains the Justice Integrated Information System which
provides for the seamless sharing of information with Federal
and local law enforcement.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $1,900,000 to
the Criminal Justice Coordinating Council.
FEDERAL PAYMENT FOR JUDICIAL COMMISSIONS
Appropriation, fiscal year 2017....................... $585,000
Budget request, fiscal year 2018...................... 565,000
Recommended in the bill............................... 565,000
Bill compared with:
Appropriation, fiscal year 2017................... -20,000
Budget request, fiscal year 2018.................. - - -
This appropriation provides funding for the two judicial
commissions. The first is the Judicial Nomination Commission
(JNC), which recommends a panel of three candidates to the
President for each judicial vacancy in the District of Columbia
Court of Appeals and Superior Court. From the panel selected by
the JNC, the President nominates a person for each vacancy and
submits his or her name for confirmation to the Senate. The
second commission is the Commission on Judicial Disabilities
and Tenure (CJDT), which has jurisdiction over all judges of
the Court of Appeals and Superior Court to determine whether a
judge's conduct warrants disciplinary action and whether
involuntary retirement of a judge for health reasons is
warranted. In addition, the CJDT conducts evaluations of judges
seeking reappointment and judges who retire and wish to
continue service as a senior judge.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $295,000 for
the Commission on Judicial Disabilities and Tenure, and
$270,000 for the Judicial Nomination Commission.
FEDERAL PAYMENT FOR SCHOOL IMPROVEMENT
Appropriation, fiscal year 2017....................... $45,000,000
Budget request, fiscal year 2018...................... 45,000,000
Recommended in the bill............................... 45,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
The Scholarships for Opportunity and Results (SOAR) Act, as
reauthorized in the Financial Services and General Government
Appropriations Act, 2017, authorizes funds to be evenly divided
between District of Columbia Public Schools, Public Charter
Schools and Opportunity Scholarships.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $45,000,000
for school improvement. Based on the statutory funding formula,
$15,000,000 is provided for District of Columbia Public
Schools, $15,000,000 is provided for public charter schools,
and $15,000,000 is provided for opportunity scholarships.
FEDERAL PAYMENT FOR THE DISTRICT OF COLUMBIA NATIONAL GUARD
Appropriation, fiscal year 2017....................... $450,000
Budget request, fiscal year 2018...................... 435,000
Recommended in the bill............................... 435,000
Bill compared with:
Appropriation, fiscal year 2017................... -15,000
Budget request, fiscal year 2018.................. - - -
The Major General David F. Wherley, Jr. District of
Columbia National Guard Retention and College Access Program
pays for the costs of a tuition assistance program for guard
members.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $435,000 for
the Major General David F. Wherley, Jr. District of Columbia
National Guard Retention and College Access Program. The
Committee acknowledges the unique role of the D.C. National
Guard in addressing emergencies that may occur as a result of
the presence of the Federal government.
FEDERAL PAYMENT FOR TESTING AND TREATMENT OF HIV/AIDS
Appropriation, fiscal year 2017....................... $5,000,000
Budget request, fiscal year 2018...................... 5,000,000
Recommended in the bill............................... 5,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
Currently, 2 percent of the population of the District of
Columbia has been diagnosed with HIV/AIDS. This percentage
surpasses the generally accepted definition of an epidemic,
which is 1 percent of the population. Between 2007 and 2015,
the number of new HIV infections has dropped by 72 percent.
COMMITTEE RECOMMENDATION
The Committee recommendation includes $5,000,000 for a
Federal payment for testing, education, and treatment of HIV/
AIDS.
District of Columbia Funds
The Committee continues to appropriate local funds to the
District of Columbia in accordance with and required by Article
I, Section 8, clause 17 and Article I, Section 9, clause 7 of
the Constitution. The bill provides local funds for the
operation of the District of Columbia as approved by the
District of Columbia Council and the Mayor.
The Committee includes language that provides the District
with the authority to spend their local funds in the following
fiscal year in the event of an absence of Federal
appropriations. This authority is continued in section 816 of
this Act.
TITLE V--INDEPENDENT AGENCIES
Administrative Conference of the United States
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $3,100,000
Budget request, fiscal year 2018...................... 3,094,000
Recommended in the bill............................... 3,100,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +6,000
The Administrative Conference of the United States (ACUS)
is an independent agency that studies Federal administrative
procedures and processes to recommend improvements to the
President, Congress and other agencies.
COMMITTEE RECOMMENDATION
The Committee recommends $3,100,000 for ACUS.
Consumer Product Safety Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $126,000,000
Budget request, fiscal year 2018...................... 123,000,000
Recommended in the bill............................... 123,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -3,000,000
Budget request, fiscal year 2018.................. - - -
The Consumer Product Safety Act established the Consumer
Product Safety Commission (CPSC), an independent Federal
regulatory agency, to reduce the risk of injury associated with
consumer products.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $123,000,000
for the CPSC for fiscal year 2018.
Within the amount provided under this heading, $1,300,000
is for the Virginia Graeme Baker Pool and Spa Safety Act grant
program. The Committee commends the CPSC for continuing to
provide resources for the national and grassroots ``Pool
Safely'' campaign, a safety information and education program
designed to reduce child drownings and near drowning injuries
and maintain a zero fatality rate for drain entrapments. This
multifaceted initiative includes consumer and industry
education efforts, press events, partnerships, outreach, and
advertising. The Committee expects the CPSC to maintain the
fiscal year 2017 levels for the ``Pool Safely'' campaign.
Voluntary Recall.--The Committee remains concerned about
proposed changes to the voluntary recall system that would
serve to negatively impact small businesses. Despite
overwhelming opposition, the Commission has failed to withdraw
its proposed rule on voluntary recalls. The Committee opposes
making unnecessary changes to a recall system that has worked
well over the past 40 years, owing to a successful partnership
between businesses and the Commission. To that end, the
Committee strongly encourages the Commission to withdraw the
proposed rule.
Public Disclosures of Information.--Section 6(b) of the
Consumer Product Safety Act (CPSA) requires CPSC to take
reasonable steps to ensure that any disclosure of information
relating to a consumer product safety incident is accurate and
fair. The Committee remains concerned that the Commission has
not withdrawn a proposed rule on section 6(b) that threatens to
undermine a successful partnership based on openness and trust
between industry and the Commission. The Committee cautions the
Commission about making changes to a process that has succeeded
in both protecting the consumer against harm and protecting
industry against inaccurate disclosures of information before
an investigation has been completed. Consequently, the
Committee strongly encourages the Commission to withdraw the
proposed rule.
Window Coverings.--The Committee continues to support the
cooperative efforts of CPSC and the window coverings industry
to educate consumers on window covering safety. The Committee
encourages continued cooperation between CPSC and industry on
developing voluntary standards for its products through the
current voluntary standards setting process.
ADMINISTRATIVE PROVISIONS-CONSUMER PRODUCT SAFETY COMMISSION
Section 501. The Committee continues language prohibiting
funds to finalize, implement, or enforce the proposed rule on
recreational off-highway vehicles until a study is completed by
the National Academy of Sciences.
Section 502. The Committee includes new language
prohibiting funds to finalize any rule by the Consumer Product
Safety Commission relating to blade-contact injuries on table
saws.
Election Assistance Commission
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $9,600,000
Budget request, fiscal year 2018...................... 9,200,000
Recommended in the bill............................... 7,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -2,600,000
Budget request, fiscal year 2018.................. -2,200,000
The Election Assistance Commission (EAC) was established by
the Help America Vote Act of 2002 (HAVA) and is charged with
implementing provisions of that Act relating to the reform of
Federal election administration.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $7,000,000 for
the Salaries and Expenses of the EAC.
Federal Communications Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $356,711,000
Budget request, fiscal year 2018...................... 322,035,000
Recommended in the bill............................... 322,035,000
Bill compared with:
Appropriation, fiscal year 2017................... -34,676,000
Budget request, fiscal year 2018.................. - - -
The mission of the Federal Communications Commission (FCC)
is to implement the Communications Act of 1934 and assure the
availability of high quality communications services for all
Americans.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $322,035,000
for the Salaries and Expenses of the FCC, all of which is to be
derived from offsetting collections. The Committee also
includes a cap of $111,150,000 for the administration of
spectrum auctions.
Broadcaster Relocation.--The Middle Class Tax Relief and
Job Creation Act of 2012 (P.L. 112-96) authorized the FCC to
conduct a voluntary incentive auction and Congress allocated
$1.75 billion to reimburse the service and equipment costs of
channel relocation incurred by the television broadcast
industry, such as changes to antennas, transmitters,
transmission lines, and towers. The Committee is aware of
concerns about the length of time and funds available to
broadcasters to repack stations and the Committee intends to
monitor this issue closely. Both broadcasters and entities who
purchased spectrum participated in good faith to make the
incentive auction successful. The Committee supported the
Commission's administration of the incentive auction and
expects the FCC to take into careful consideration any
participating entity's concerns.
Net Neutrality/Open Internet.--The Committee supports the
recent efforts by the FCC to scale back previous actions taken
by the Commission to regulate the internet. Imposing heavy-
handed economic regulation disincentivizes growth, particularly
in areas of the country that need infrastructure investment the
most. Government agencies should not get in the way of U.S.
innovation, investment, and expansion and the Committee
strongly supports the Commission's efforts to support broadband
expansion and consumer choice.
USF High Cost Program.--The committee appreciates the
ongoing commitment of the FCC to its multi-year initiative to
modernize and target the focus of the Universal Service Fund
(USF), and particularly its High Cost program. Nevertheless,
the outcome of these efforts can be troubling particularly with
regard to stand-alone broadband services and may conflict with
the statutory mandate of providing specific, predictable, and
sufficient support to ensure universal consumer access to
reasonably comparable services at reasonably comparable rates.
Because of the inconsistent way the individual program budgets
have been applied, the application of these control mechanisms
to the four programs is particularly concerning. The Committee
therefore urges the FCC to engage in a comprehensive assessment
of each program's goals and challenges, use the resulting
analysis to adjust the respective USF programs to allow them to
sufficiently respond to their statutory missions, and, if
appropriate, apply on a going-forward basis, uniform and
consistent inflationary growth mechanisms to each program to
further ensure their respective ability to successfully respond
to our national universal service objectives. The Committee
directs the FCC to submit, within 120 days of enactment of this
Act, a report outlining its analysis, conclusions, and actions
in this regard.
USF Reform.--In recognition of the ongoing rapidly changing
communications industry landscape, the Committee believes it is
imperative that the Federal State Joint Board on Universal
Service move aggressively to identify and provide USF
contributions reform recommendations to the Commission. The
Committee further urges that such recommendations should
expressly recognize that continuing to base contributions only
on legacy telecommunications service revenues (and a limited
number of other service revenues) will undermine, and
ultimately threaten universal access to advanced communications
by eroding the sustainability of the USF program and placing
unfair and inequitable burdens for support of the program on a
small subset of communications network users.
Rates.--Since 2012, the FCC has forced telecommunications
providers in rural areas to raise the rates for local voice
service. There are concerns about the effects of these rate
increases on rural residents and the methodology used to
determine the minimum rates. As the Commission works to
complete a rule to develop a ``rate floor'' methodology, the
Committee recommends the FCC at the very least freeze any rate
floor increases at the current level while determining whether
the rate floor has met its intended purposes, whether changes
should be made to the current rate floor methodology, or
whether it should be eliminated entirely.
Broadband Access.--The Committee strongly encourages the
FCC to continue to work with the Universal Service
Administrative Company (USAC) to allocate Universal Service
Funds (USF) for broadband expansion in rural and economically
disadvantaged areas in order to maximize the use of USF funds.
The Committee believes the deployment of broadband in rural and
economically disadvantaged areas is a driver of economic
development, jobs, and new education opportunities and expects
the Commission to prioritize these efforts.
Territories and Tribal Lands.--The Committee is concerned
about the disparity in access to broadband between the
territories, tribal lands, and the 50 states. The Committee
encourages the Commission to implement policies that increase
broadband access and adoption in these areas.
Federal Deposit Insurance Corporation
OFFICE OF THE INSPECTOR GENERAL
Appropriation, fiscal year 2017....................... $35,958,000
Budget request, fiscal year 2018...................... 39,136,000
Recommended in the bill............................... 39,136,000
Bill compared with:
Appropriation, fiscal year 2017................... 3,178,000
Budget request, fiscal year 2018.................. - - -
Funding for the Office of the Inspector General (OIG) at
the Federal Deposit Insurance Corporation (FDIC) is provided
pursuant to 31 U.S.C. 1105(a)(25), which requires a separate
appropriation for each Office of Inspector General established
under section 11(2) of the Inspector General Act of 1978.
COMMITTEE RECOMMENDATION
The Committee recommends $39,136,000 from the Deposit
Insurance Fund and the Federal Savings and Loan Insurance
Corporation (FSLIC) Resolution Fund to finance the OIG.
Federal Election Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $79,119,000
Budget request, fiscal year 2018...................... 71,250,000
Recommended in the bill............................... 71,250,000
Bill compared with:
Appropriation, fiscal year 2017................... -7,869,000
Budget request, fiscal year 2018.................. - - -
The Federal Election Commission (FEC) administers the
disclosure of campaign finance information, enforces
limitations on contributions and expenditures, and performs
other tasks related to Federal elections.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $71,250,000
for the Salaries and Expenses of the FEC.
Federal Labor Relations Authority
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $26,200,000
Budget request, fiscal year 2018...................... 26,200,000
Recommended in the bill............................... 26,200,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
Established by title VII of the Civil Service Reform Act of
1978, the Federal Labor Relations Authority (FLRA) serves as a
neutral arbiter in the labor activities of non-postal Federal
employees, Departments and agencies, and Federal unions on
matters outlined in the Act, including collective bargaining
and the settlement of disputes. Establishment of the FLRA gives
full recognition to the role of the Federal Government as an
employer. Under the Foreign Service Act of 1980, the FLRA also
addresses similar issues affecting Foreign Service personnel by
providing staff support for the Foreign Service Impasse
Disputes Panel and the Foreign Service Labor Relations Board.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $26,200,000
for the FLRA for fiscal year 2018.
Federal Trade Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $313,000,000
Budget request, fiscal year 2018...................... 306,317,000
Recommended in the bill............................... 306,317,000
Bill compared with:
Appropriation, fiscal year 2017................... -6,683,000
Budget request, fiscal year 2018.................. - - -
The mission of the Federal Trade Commission (FTC) is to
enforce a variety of Federal antitrust and consumer protection
laws. Appropriations for both the Antitrust Division of the
Department of Justice and the Commission are partially financed
by Hart-Scott-Rodino Act pre-merger filing fees. The
Commission's appropriation is also partially offset by Do-Not-
Call registry fees.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $306,317,000
for the Salaries and Expenses of the FTC. The Congressional
Budget Office estimates $126,000,000 of collections from Hart-
Scott-Rodino premerger filing fees and $16,000,000 of
collections from Do-Not-Call list fees which partially offset
the appropriation requirement for this account.
Privacy.--The Committee is concerned about the confusion
and misreporting stemming from the passage of the Congressional
Review Act on broadband privacy. This was an important step in
restoring the Federal Trade Commission (FTC) as the online
privacy cop for consumers for all online activities. The FTC is
an independent enforcement agency that has enforced a wide
range of laws to protect the privacy of consumers' personal
information for decades. The FTC is directed to report on its
enforcement approach with regard to policing the privacy
practices of ISPs and online services, and the FTC's plans to
continue to ensure that consumer privacy is protected online
regardless of the type of company that has the data.
Credit Education.--The Committee believes that consumers
should be able to obtain personalized, legitimate credit
education products and tools in order to improve their
financial health. However, the Committee is concerned that the
broad scope of the Credit Repair Organizations Act (CROA) has
created a barrier for legitimate companies from being able to
provide these valuable services in a consumer-friendly manner.
The Committee directs the FTC to report to the Committees on
Appropriations of the House and Senate, the Committee on Energy
and Commerce of the House, the Committee on Commerce, Science,
and Transportation of the Senate, the Committee on Financial
Services of the House, and the Committee on Banking, Housing,
and Urban Affairs of the Senate, not later than 120 days after
the date of enactment of this Act, on the benefits of consumer
access to credit education and improvement services, and the
extent to which CROA impedes the research, development, and
provision of new credit education products, services, and
technology in the marketplace by consumer reporting agencies as
defined by the Fair Credit Reporting Act and other entities.
The FTC shall publish the report on its website.
Contact Lenses.--The Committee is aware of the FTC's
ongoing review of its contact lens rule and urges the agency to
make modifications to the rule that prioritize patient safety,
consumer accessibility, and strengthen enforcement mechanisms.
Piracy.--The online theft of creative content poses
significant threats to both content creators and American
consumers. The Committee encourages the FTC to help raise
consumer awareness about the risks to consumers from content-
theft sites, many of which serve as bait to infect devices with
malicious software enabling identity theft and other consumer
scams.
General Services Administration
The Committee continues several reporting requirements for
the General Services Administration (GSA) for fiscal year 2018.
Takings and Exchanges.--Using existing statutory
authorities, GSA has been working to dispose of properties that
no longer meet the needs of Federal agencies in exchange for
assets of like value. Some of these exchanges are very complex
in nature and involve multi-year, multi-party, and multi-
billion dollar contracts. In addition, GSA also has the
statutory authority to take properties. The Committee believes
in some instances employing such authorities can result in
savings to the taxpayer when appropriately executed and wants
to be kept informed of these activities. In order to provide
increased transparency for the use and planned use of these
authorities, the Administrator is directed to report to the
Committees on Appropriations of the House and Senate not later
than 30 days after the end of each quarter on the use of these
authorities. The report shall include a description of all
takings and exchange actions that occurred or were considered
during the most recently completed quarter of the fiscal year,
including the costs, benefits, and risks for each action. The
report shall also include the planned or considered use of
takings and exchange authorities during the remainder of the
fiscal year, including the costs, benefits, and risks of each
action.
Spending Report.--Within 50 days after the end of each
quarter, GSA shall submit spending reports to the Committees on
Appropriations of the House and Senate. The reports shall
include actual obligations incurred and estimated obligations
for the remainder of the fiscal year for each appropriation in
the Federal Buildings Fund and regular discretionary
appropriations. The reports shall include obligations by object
class, program, project and activity.
State of the Portfolio.--Not later than 45 days after the
date of enactment of this Act, the Administrator shall submit
to the Committees on Appropriations of the House and Senate a
report on the state of the Public Buildings Service's real
estate portfolio for fiscal year 2017. The content included in
the report shall be comparable to the tabular information
provided in past State of the Portfolio reports, including, but
not limited to, the number of leases; the number of buildings;
amount of square feet, revenue, expenses by type, and vacant
space; top customers by square feet and annual rent; completed
new construction, completed major repairs and alterations, and
disposals, in total and by region where appropriate.
Land Ports of Entry State of the Portfolio.--Within 90 days
of the date of enactment of this Act, GSA is directed to
provide the Committees on Appropriations of the House and
Senate a report on the state of the land ports of entry
portfolio. The content of this report shall include, but shall
not be limited to, a prioritized list of new construction and
major repairs and alterations projects.
Rental Rates.--The Committee expects GSA to provide
workspace for its customers at commercially-comparable rental
rates and at a superior value to the taxpayer. The Committee
directs GSA to provide the Committees on Appropriations of the
House and Senate a report describing GSA's methodology for
calculating rental rates for Congressional offices located in
Federal Courthouses within 45 days of the date of enactment of
this Act.
IT Modernization.--The Committee recognizes the importance
of recent legislative efforts to modernize the way the Federal
government uses technology and appreciates proposed solutions
for replacing outdated and vulnerable legacy IT systems across
the government. The Committee will continue to review proposed
legislative approaches to the Federal government's digital
infrastructure while also safeguarding the investment of
American taxpayers.
FBI Headquarters.--The Committee directs the Administrator
of the General Services Administration, not later than 60 days
after the enactment of this Act, to develop an alternate plan
for the consolidation of the Federal Bureau of Investigation
headquarters within the National Capital Region.
REAL PROPERTY ACTIVITIES
FEDERAL BUILDINGS FUND
LIMITATIONS ON AVAILABILITY OF REVENUE
(INCLUDING TRANSFERS OF FUNDS)
Limitations on Availability of Revenue:...............
Limitation on availability, fiscal year 2017.......... $8,845,147,000
Limitation on availability, budget request, fiscal 9,950,519,000
year 2018............................................
Recommended in the bill............................... 7,864,111,000
Bill compared with:
Availability limitation, fiscal year 2017......... -981,036,000
Availability limitation, fiscal year 2018 request. -2,086,408,000
The Federal Buildings Fund (FBF) accounts for the
activities of the Public Buildings Service (PBS), which
provides space and services for Federal agencies in a
relationship similar to that of landlord and tenant. The FBF,
established in 1975, replaces direct appropriations with income
derived from rent assessments, which approximate commercial
rates for comparable space and services. The Committee makes
funds available through a process of placing limitations on
obligations from the FBF as a way of allocating funds for
various FBF activities.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation on the availability
of funds of $7,864,111,000 for the FBF.
To carry out the purposes of the FBF, the revenues and
collections deposited into the FBF shall be available for
necessary expenses in the aggregate amount of $7,864,111,000 of
which: $180,000,000 is for repairs and alterations,
$5,462,345,000 is for rental of space, and $2,221,766,000 is
for building operations.
Historically, prior to obligating funding for prospectus-
level construction, alterations, or leases, the Administration
has waited for the project to be authorized through a
resolution approved by the Committee on Transportation and
Infrastructure in the House and the Committee on Environment
and Public Works in the Senate as required by title 40 of the
United States Code and in accordance with the proviso included
in the FBF appropriations limiting the obligation of funds to
prospectus-level projects approved by the authorizing
committees. The Committee supports this process and believes
that prospectus-level projects warrant a thorough review from
both the Appropriations Committee and the authorizing
committees. The Committee expects the Administration to
continue to follow this process.
CONSTRUCTION AND ACQUISITION
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2017.......... $205,749,000
Limitation on availability, budget request, fiscal 790,491,000
year 2018............................................
Recommended in the bill............................... - - -
Bill compared with:
Availability limitation, fiscal year 2017......... -205,749,000
Availability limitation, fiscal year 2018 request. -790,491,000
The construction and acquisition fund finances the project
cost of design, construction, and management and inspection
costs of new Federal facilities.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $0 for
construction and acquisition.
REPAIRS AND ALTERATIONS
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2017.......... $676,035,000
Limitation on availability, budget request, fiscal 1,444,494,000
year 2018............................................
Recommended in the bill............................... 180,000,000
Bill compared with:
Availability limitation, fiscal year 2017......... -496,035,000
Availability limitation, fiscal year 2018 request. -1,264,494,000
The repairs and alterations activity funds the project cost
of design, construction, management and inspection for the
repair, alteration, and modernization of existing real estate
assets in addition to various special programs.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $180,000,000 to
remain available until expended for repairs and alterations.
Basic Repairs and Alterations.--The Committee recommends
$110,000,000 for non-recurring repairs and alterations projects
between $10,000 and the current prospectus threshold of
$3,095,000.
Fire and Life Safety.--The Committee recommends $30,000,000
to improve building safety, abate hazardous material, and
repair structural deficiencies. These projects include, but are
not limited to, fire alarm, sprinkler, electrical, ventilation,
heating, and elevator systems.
Judiciary Court Security Program.--The Committee recommends
$20,000,000 for the construction, acquisition, repair,
alteration, and security projects for the Judiciary as
prioritized by the Judicial Conference of the United States.
Consolidation Activities.--The Committee recommends
$20,000,000 for the cost of consolidating space. Given the
reduction in the Federal workforce and Federal agency budgets,
the Committee believes that it is prudent to reduce the GSA
building inventory, particularly with regard to the thousands
of surplus and underutilized buildings. Projects selected for
consolidation should result in reduced annual rent paid by the
agency, not exceed $10,000,000 in costs, and have an approved
prospectus. GSA is required to submit a spend plan and
explanation for each project including estimated savings to the
Committees on Appropriations of the House and Senate before
obligating funds.
RENTAL OF SPACE
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2017.......... $5,628,363,000
Limitation on availability, budget request, fiscal 5,493,768,000
year 2018............................................
Recommended in the bill............................... 5,462,345,000
Bill compared with:
Availability limitation, fiscal year 2017......... -166,018,000
Availability limitation, fiscal year 2018 request. -31,423,000
The rental of space program funds lease payments made to
privately-owned buildings, temporary space for Federal
employees during major repair and alteration projects, and
relocations from Federal buildings due to forced moves and
relocations as a result of health and safety conditions.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $5,462,345,000 for
rental of space. The Committee expects GSA to reduce the amount
of leased space in its inventory at a faster pace.
BUILDING OPERATIONS
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2017.......... $2,335,000,000
Limitation on availability, budget request, fiscal 2,221,766,000
year 2018............................................
Recommended in the bill............................... 2,221,766,000
Bill compared with:
Availability limitation, fiscal year 2017......... -113,234,000
Availability limitation, fiscal year 2018 request. - - -
The building operations account funds services that Federal
agencies in GSA-owned buildings and occasionally in GSA-leased
buildings, when not provided by the lessor, directly benefit
from such as building security, cleaning, utilities, window
washing, snow removal, pest control, and maintenance of
heating, air conditioning, ventilating, plumbing, sewage,
electrical, elevator, escalator, and fire protection systems.
In addition, this account funds all the personnel and
administrative expenses for carrying out construction and
acquisition, repair and alteration, and leasing activities.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $2,221,766,000 for
Building Operations and Maintenance. Within this amount,
$1,146,089,000 is for building services and $1,075,677,000 is
for salaries and expenses. Up to five percent of the funds may
be transferred between these activities upon the advance
notification to the Committees on Appropriations of the House
and Senate. Not later than 60 days after the date of enactment
of this Act, the Administrator shall submit a spend plan, by
region, regarding the use of these funds to the Committees on
Appropriations of the House and Senate.
GENERAL ACTIVITIES
GOVERNMENT-WIDE POLICY
Appropriation, fiscal year 2017....................... $60,000,000
Budget request, fiscal year 2018...................... 53,499,000
Recommended in the bill............................... 53,499,000
Bill compared with:
Appropriation, fiscal year 2017................... -6,501,000
Budget request, fiscal year 2018.................. - - -
The Office of Government-Wide Policy provides Federal
agencies with guidelines, best practices, and performance
measures for complying with all the laws, regulations, and
executive orders related to: acquisition and procurement,
personal and real property management, travel and
transportation management, electronic customer service
delivery, and use of Federal advisory committees.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $53,499,000
for Government-wide Policy.
The Committee recognizes sustainable roofing systems as a
viable option for government buildings. The Committee notes
that proper thermal insulation is a cost-effective and energy
efficient technology.
SDVOSB Participation.--The Committee encourages GSA to work
with the Department of Veterans Affairs and other Federal
agencies to ensure the participation of Service-Disabled
Veteran-Owned Small Businesses (SDVOSBs), consistent with the
provisions of P.L. 109-461 and Executive Order 13360, in
conjunction with the Federal Strategic Sourcing Initiative
(FSSI) for purchasing channel decisions, other agency
contracting and procurement opportunities relevant to
Janitorial and Sanitation products, and other areas. The
Committee encourages GSA to take proactive steps to ensure
SDVOSBs have fair and reasonable opportunities to participate
in GSA procurement processes when they have valid Federal
Supply Schedules (FSS).
Commercial Supplier Agreements.--By December 31, 2017, GSA
shall reduce costs to small business resellers of commercial
software, hardware, and related products interested in doing
business with GSA by: (1) Publishing a final rule making clear
which commercial supplier agreement terms conflict with Federal
Law and are thus unenforceable against the Government, and (2)
establishing a means for small business resellers to quickly
update commercial supplier agreements.
OPERATING EXPENSES
Appropriation, fiscal year 2017....................... $58,541,000
Budget request, fiscal year 2018...................... 45,645,000
Recommended in the bill............................... 45,645,000
Bill compared with:
Appropriation, fiscal year 2017................... -12,896,000
Budget request, fiscal year 2018.................. - - -
This account provides appropriations for activities that
are not feasible for a user fee arrangement. Included under
this heading are personal property utilization and donation
activities of the Federal Acquisition Service; real property
utilization and disposal activities of the Public Buildings
Service; select management and administration activities
including support of government-wide emergency management
activities; and top-level, agency-wide management communication
activities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $45,645,000
for operating expenses. Within the amount provided under this
heading, $24,357,000 is for Real and Personal Property
Management and Disposal, and $23,288,000 is for the Office of
the Administrator.
Federal Real Property Profile.--The Committee remains
extremely frustrated with the slow pace at which GSA and other
Federal agencies are improving the accuracy of the Federal Real
Property Profile. The U.S. Government Accountability Office
(GAO) named managing Federal real property to its 2017 High
Risk List. The Committee is concerned that despite language in
the fiscal year 2015, 2016, and 2017 reports, GSA has not made
progress on the value and accuracy of its inventory, taken
steps to include public lands as required by Executive Order
13327, made the FRPP available to the public, or geo-enabling
the FRPP. The Committee is outraged that the Federal Government
cannot provide an accurate accounting to the American public of
all the property that it owns. The Committee expects GSA to
work with agencies across government and utilize geographic
information technology to improve the data contained in this
report and enhance transparency to the American taxpayer. The
Committee directs GSA to report to the Committees on
Appropriations of the House and Senate on steps taken to
improve the quality and transparency of the profile within 60
days after the enactment of this Act.
CIVILIAN BOARD OF CONTRACT APPEALS
Appropriation, fiscal year 2017....................... $9,275,000
Budget request, fiscal year 2018...................... 8,795,000
Recommended in the bill............................... 8,795,000
Bill compared with:
Appropriation, fiscal year 2017................... -480,000
Budget request, fiscal year 2018.................. - - -
This account provides appropriations for the Civilian Board
of Contract Appeals (CBCA). The CBCA is charged with
facilitating the prompt, efficient, and inexpensive resolution
of disputes through the use of alternate dispute resolution.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $8,795,000 for
the Civilian Board of Contract Appeals.
OFFICE OF INSPECTOR GENERAL
Appropriation, fiscal year 2017....................... $65,000,000
Budget request, fiscal year 2018...................... 65,000,000
Recommended in the bill............................... 65,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
This appropriation provides agency-wide audit and
investigative functions to identify and correct GSA management
and administrative deficiencies that create conditions for
existing or potential instances of fraud, waste, and
mismanagement. The audit function provides internal and
contract audits. Internal audits review and evaluate all facets
of GSA operations and programs, test internal control systems,
and develop information to improve operating efficiencies and
enhance customer services. Contract audits provide professional
advice to GSA contracting officials on accounting and financial
matters relative to the negotiation, award, administration,
repricing, and settlement of contracts. The investigative
function provides for the detection and investigation of
improper and illegal activities involving GSA programs,
personnel, and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $65,000,000
for the Office of Inspector General.
ALLOWANCES AND OFFICE STAFF FOR FORMER PRESIDENTS
Appropriation, fiscal year 2017....................... $3,865,000
Budget request, fiscal year 2018...................... 4,754,000
Recommended in the bill............................... 4,754,000
Bill compared with:
Appropriation, fiscal year 2017................... +889,000
Budget request, fiscal year 2018.................. - - -
This appropriation provides pensions, office staff, and
related expenses for former Presidents Jimmy Carter, George
H.W. Bush, William Clinton, and George W. Bush, and Barack
Obama.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,754,000 for
allowances and office staff for former Presidents.
FEDERAL CITIZEN SERVICES FUND
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2017....................... $55,894,000
Budget request, fiscal year 2018...................... 53,741,000
Recommended in the bill............................... 53,741,000
Bill compared with:
Appropriation, fiscal year 2017................... -2,153,000
Budget request, fiscal year 2018.................. - - -
The Federal Citizen Services Fund (the Fund) appropriation
provides for the salaries and expenses of GSA's Office of
Citizen Services and Innovative Technologies (OCSIT). The Fund
enables citizen access and engagement with government through
an array of operational programs and direct citizen facing
services. The Fund provides electronic or other methods of
access to and understanding of Federal information, benefits,
and services to citizens, businesses, local governments, and
the media.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $53,741,000
for the Federal Citizen Services Fund. The Committee expects
the funds provided for these activities, combined with
efficiency gains and resource prioritization will result in
increased delivery of information to the public and in the ease
of transaction with the government.
All the income collected by the Office of Citizen Services
and Innovative Technologies (OCSIT) in the form of
reimbursements from Federal agencies, user fees for
publications ordered by the public, payments from private
entities for services rendered, and gifts from the public is
available to the OCSIT without regard to fiscal year
limitations, but is subject to an annual limitation of
$100,000,000. Any revenues accruing in excess of this amount
shall remain in the fund and are not available for expenditure
except as authorized in Appropriation Acts.
ASSET PROCEEDS AND SPACE MANAGEMENT FUND
Appropriation, fiscal year 2017....................... - - -
Budget request, fiscal year 2018...................... $40,000,000
Recommended in the bill............................... 10,000,000
Bill compared with:
Appropriation, fiscal year 2017................... +10,000,000
Budget request, fiscal year 2018.................. -30,000,000
This account provides appropriations for the purposes of
carrying out actions pursuant to the recommendations of the
Public Buildings Reform Board focusing on civilian real
property.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $10,000,000
for the Asset Proceeds and Space Management Fund.
ENVIRONMENTAL REVIEW IMPROVEMENT FUND
Appropriation, fiscal year 2017....................... - - -
Budget request, fiscal year 2018...................... $10,000,000
Recommended in the bill............................... 1,000,000
Bill compared with:
Appropriation, fiscal year 2017................... +1,000,000
Budget request, fiscal year 2018.................. -9,000,000
This account provides appropriations for the authorized
activities of the Environmental Review Improvement Fund and the
Federal Permitting Improvement Steering Council. The Council
will lead ongoing government-wide efforts to modernize the
Federal permitting and review process for major infrastructure
projects and work with Federal agency partners to implement and
oversee adherence to the statutory requirements set forth in
the Federal Assets Sale and Transfer Act of 2016.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $1,000,000 for
the Environmental Review Improvement Fund.
Administrative Provisions--General Services Administration
(INCLUDING RESCISSION AND TRANSFER OF FUNDS)
Section 510. The Committee continues the provision
providing authority for the use of funds for the hire of motor
vehicles.
Section 511. The Committee continues the provision
providing that funds made available for activities of the
Federal Buildings Fund may be transferred between
appropriations with advance approval of the Committees on
Appropriations of the House and Senate.
Section 512. The Committee continues the provision
requiring funds proposed for developing courthouse construction
requests to meet appropriate standards and the priorities of
the Judicial Conference.
Section 513. The Committee continues the provision
providing that no funds may be used to increase the amount of
occupiable square feet, provide cleaning services, security
enhancements, or any other service usually provided, to any
agency which does not pay the assessed rent.
Section 514. The Committee continues the provision that
permits GSA to pay small claims (up to $250,000) made against
the Federal Government.
Section 515. The Committee continues the provision
requiring the Administrator to ensure that the delineated area
of procurement for all lease agreements is identical to the
delineated area included in the prospectus unless prior notice
is given to the committees of jurisdiction.
Section 516. The Committee continues the provision
requiring a spend plan for certain accounts and programs.
Section 517. The Committee includes a new provision
establishing the Asset Proceeds Space Management Fund as a fund
separate from the Federal Buildings Fund.
Section 518. The Committee includes a new provision
rescinding prior year unobligated balances from the FBI
Headquarters Consolidation project funded in Public Law 115-31.
Section 519. The Committee includes a new provision
requiring GSA to post certain draft environmental impact
assessments on the GSA website.
Harry S Truman Scholarship Foundation
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $1,000,000
Budget request, fiscal year 2018...................... - - -
Recommended in the bill............................... 1,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +1,000,000
The Harry S Truman Scholarship Foundation is an independent
agency established by Congress in 1975 (Public Law 93-642) to
encourage exceptional college students to pursue careers in
public service through the Truman Scholarship program. The
Truman Scholarship is a merit-based award available to college
juniors who plan to pursue careers in Government or elsewhere
in public service.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $1,000,000 for
the Harry S Truman Scholarship Foundation.
Merit Systems Protection Board
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $47,131,000
Budget request, fiscal year 2018...................... 46,835,000
Recommended in the bill............................... 46,835,000
Bill compared with:
Appropriation, fiscal year 2017................... -296,000
Budget request, fiscal year 2018.................. - - -
The Merit Systems Protection Board (MSPB) is an
independent, quasi-judicial agency established to protect the
civil service merit system. The MSPB adjudicates appeals
primarily involving personnel actions, certain Federal employee
complaints, and retirement benefits issues. The MSPB reports to
the President whether merit systems are sufficiently free of
prohibited employment practices.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $44,490,000
for the MSPB. The recommendation includes a transfer of
$2,345,000 from the Civil Service Retirement and Disability
Fund.
National Archives and Records Administration
OPERATING EXPENSES
Appropriation, fiscal year 2017....................... $380,634,000
Budget request, fiscal year 2018...................... 364,308,000
Recommended in the bill............................... 364,308,000
Bill compared with:
Appropriation, fiscal year 2017................... -16,326,000
Budget request, fiscal year 2018.................. - - -
This appropriation provides NARA with funds for its basic
operations for management of the Federal Government's archives
and records, services to the public, operation of Presidential
libraries, review for declassification of classified security
information, and includes funding for the Electronic Records
Archives which preserves, stores, and manages digital Federal
records for archival purposes, ensuring long-term access.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $364,308,000
for the Operating Expenses of NARA.
Records Management.--The Committee encourages NARA to
leverage private sector records management capabilities, where
private vendors have invested their own capital to develop
facilities that are compliant with NARA's stringent building
standards. The Committee encourages NARA to identify NARA
records management storage facilities that can be cost
effectively managed by private records management companies,
especially those housing temporary Federal records.
OFFICE OF INSPECTOR GENERAL
Appropriation, fiscal year 2017....................... $4,801,000
Budget request, fiscal year 2018...................... 4,241,000
Recommended in the bill............................... 4,241,000
Bill compared with:
Appropriation, fiscal year 2017................... -560,000
Budget request, fiscal year 2018.................. - - -
The Office of Inspector General (OIG) provides audits and
investigations and serves as an independent, internal advocate
to promote economy, efficiency, and effectiveness within NARA.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,241,000 for
the OIG for fiscal year 2018.
REPAIRS AND RESTORATION
Appropriation, fiscal year 2017....................... $7,500,000
Budget request, fiscal year 2018...................... 7,500,000
Recommended in the bill............................... 7,500,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
This appropriation provides for the repair, alteration, and
improvement of Archives facilities and Presidential libraries
nationwide. It enables the National Archives to maintain its
facilities in proper condition for visitors, researchers, and
employees, and also maintain the structural integrity of the
buildings.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $7,500,000 for
repairs and restoration.
NATIONAL HISTORICAL PUBLICATIONS AND RECORDS COMMISSION GRANTS PROGRAM
Appropriation, fiscal year 2017....................... $6,000,000
Budget request, fiscal year 2018...................... - - -
Recommended in the bill............................... 4,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -2,000,000
Budget request, fiscal year 2018.................. +4,000,000
The National Historical Publications and Records Commission
(NHPRC) program provides for grants to preserve and publish
records that document American history. Administered within the
National Archives and Records Administration, the NHPRC helps
State, local, and private institutions preserve non-Federal
records, helps publish the papers of major figures in American
history, and helps archivists and records managers improve
their techniques, training, and ability to serve a range of
information users.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,000,000
NHPRC.
National Credit Union Administration
COMMUNITY DEVELOPMENT REVOLVING LOAN FUND
Appropriation, fiscal year 2017....................... $2,000,000
Budget request, fiscal year 2018...................... - - -
Recommended in the bill............................... 2,000,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. +2,000,000
The Community Development Revolving Loan Fund Program
(CDRLF) was established in 1979 to assist officially designated
``low-income'' credit unions in providing basic financial
services to low-income communities. Low-interest loans and
deposits are made available to assist these credit unions.
Loans or deposits are normally repaid in five years, although
shorter repayment periods may be considered. Technical
assistance grants are also available to low-income credit
unions. Earnings generated from the CDRLF are available to fund
technical assistance grants in addition to funds provided for
specifically in appropriations acts. Grants are available for
improving operations as well as addressing safety and soundness
issues.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $2,000,000 for
the National Credit Union Administration's CDRLF for technical
assistance grants.
Office of Government Ethics
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $16,090,000
Budget request, fiscal year 2018...................... 16,439,000
Recommended in the bill............................... 16,439,000
Bill compared with:
Appropriation, fiscal year 2017................... +349,000
Budget request, fiscal year 2018.................. - - -
The Office of Government Ethics (OGE) established by the
Ethics in Government Act of 1978, partners with other executive
branch Departments and agencies to foster high ethical
standards. The OGE issues and monitors rules regulations, and
memoranda pertaining to the prevention and resolution of
conflicts of interest, post-employment restrictions, standards
of conduct, and financial disclosure for executive branch
employees. The OGE is also responsible for creating and running
an electronic financial disclosure system under the Stop
Trading on Congressional Knowledge (STOCK) Act.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $16,439,000
for the OGE.
Office of Personnel Management
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF TRUST FUNDS)
Appropriation, fiscal year 2017....................... $259,000,000
Budget request, fiscal year 2018...................... 279,755,000
Recommended in the bill............................... 260,755,000
Bill compared with:
Appropriation, fiscal year 2017................... 1,755,000
Budget request, fiscal year 2018.................. -19,000,000
The Office of Personnel Management (OPM) is the Federal
agency responsible for management of Federal human resources
policy and oversight of the merit civil service system. OPM
provides a government-wide policy framework for personnel
matters, advises and assists agencies (often on a reimbursable
basis), and ensures that agency operations are consistent with
requirements of law, with emphasis on such issues as veterans
preference. OPM oversees examining of applicants for
employment; issues regulations and policies on hiring,
classification and pay, training, investigations; and many
other aspects of personnel management, and operates a
reimbursable training program for the Federal Government's
managers and executives. OPM is also responsible for
administering the retirement, health benefits and life
insurance programs affecting most Federal employees, retired
Federal employees, and their survivors.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $129,341,000
for the General Fund. The Committee also recommends
$131,414,000 for administrative expenses, to be transferred
from the appropriate trust funds.
OPM has struggled for decades to process Federal retirees'
pension claims quickly and accurately. As a result, tens of
thousands of new retirees wait months to receive their complete
annuities--some wait more than a year--and in the meantime they
may be constrained by reduced interim pensions. The Committee
expects OPM to continue to make retirement processing a
priority and move to a fully-automated electronic filing
system. The Committee believes that the backlog and delays in
retirement processing are unacceptable and directs OPM to
continue to provide the Committees on Appropriations of the
House and Senate with monthly reports on its progress in
addressing the backlog in claims.
In the wake of the two massive data breaches, OPM must
continue to take steps to secure the personally identifiable
information and material relating to security clearances of all
current, former, and prospective federal government employees.
The Committee has provided funding which will need to be
prioritized to meet the most critical needs outlined in the
Administration's fiscal year 2018 request for cybersecurity.
Additionally, the Committee expects OPM to continue with IT
upgrades to secure its networks against future attacks.
Security Clearance Investigations.--The Committee is
concerned with the length of time it takes OPM to conduct
initial security clearance investigations and reinvestigations
when Federal employees' current level clearance expires. The
Committee believes that security clearance delays are
unacceptable as this reduces the ability of the Federal
government to hire highly qualified employees to serve in
important defense and national security positions. Therefore,
the Committee expects OPM to continue to make security
clearance processing a priority and to make necessary
administrative or regulatory reforms to expedite
investigations, reviews, and approvals.
National Bureau of Investigations.--The Committee requests
continued assessments on the newly created National Background
Investigations Bureau (NBIB), and therefore directs OPM to
submit to the Committees on Appropriations of the House and
Senate bi-annual progress reports highlighting the NBIB
implementation plan, timeline, and milestones; costs for each
phase of implementation and anticipated outyear costs;
governance, resource management, and accountability policies
between OPM and Department of Defense; and a human capital plan
as well as other significant issues related to standing-up the
NBIB.
Critical Functions.--The recent security breaches, focus on
system upgrades, and the new National Background Investigations
Bureau should not detract OPM from fulfilling its critical
functions such as recruiting, retaining and developing a
Federal workforce to serve the American people. OPM serves the
Federal workforce by directing human resources and employee
management services, and administering retirement benefits,
managing healthcare and insurance programs, overseeing merit-
based and inclusive hiring into the civil service, and
providing a secure employment process. The Committee reminds
OPM's senior management to not lose sight of its mission as it
responds to critical IT challenges.
Recruitment.--The Committee is concerned with the length of
time it often takes the Federal Government to hire qualified
employees. Rigid rules along with long delays in the hiring and
interview process discourage top candidates from applying for
or accepting Federal positions. The Committee notes that a
Presidential Memorandum--Improving the Federal Recruitment and
Hiring Process--was issued on May 11, 2010, and the Office of
Personnel Management (OPM) was instructed to increase the
capacity of USAJOBS and develop a plan to improve the federal
recruitment and hiring processes. While the Committee is
supportive of some of the changes OPM has made to improve the
user experience on USAJOBS, it remains concerned with the
amount of time it takes the Federal Government to hire
qualified employees. The committee is also concerned with the
length and content of the questionnaire that USAJOBS candidates
must complete, which can include up to 100 questions. This can
discourage talented candidates from applying for or accepting
Federal positions.
The committee directs OPM to report to the Committees on
Appropriations of the House and Senate no later than September
30, 2018 on a plan to reduce barriers to Federal employment,
reduce delays in the hiring process, and how it intends to
improve the overall federal recruitment and hiring process.
As part of OPM's mission to recruit and hire the most
talented and diverse Federal workforce, the Committee
encourages Federal agencies to increase recruitment efforts
within the United States and the territories and at Hispanic
Serving Institutions and Historically Black Colleges and
Universities.
The Committee is appreciative of GAO's reports on the
Federal workforce, particularly report, OPM Needs to Improve
Management and Oversight of Hiring Authorities (GAO-16-521)
which reviewed current hiring authorities to assist Federal
agencies onboard staff. The Committee encourages OPM to review
GAO's recommendations to improve existing authorities, develop
new ones, and provide educational outreach to Federal agencies
to expand potential resources available when filling critical
positions.
CyberCorps.--A concern throughout the Federal Government is
hiring qualified cyber security staff. The CyberCorps
Scholarship for Service Program is a unique program designed to
increase and strengthen the cadre of cyber professionals by
providing students with academic scholarships in return for
their service in Federal, state, or local government. A greater
effort is needed to promote Federal cyber positions among
recent CyberCorps graduates and to streamline the hiring
process to attract these individuals to Federal service. OPM is
directed to submit a report to the Committees on Appropriations
of the House and Senate, House Permanent Select Committee on
Intelligence, and the Senate Select Committee on Intelligence
within 90 days of enactment of this Act outlining the steps OPM
will take to improve the hiring process of CyberCorps
graduates.
Acquisition Planning.--The Committee is concerned with
OPM's acquisition management efforts. Poor acquisition efforts
have resulted in increased security clearance backlogs as well
as unnecessary labor costs to correct procurement issues. The
Committee directs the OPM to report back to the Committees on
Appropriations of the House and Senate on measures it has taken
to improve its acquisition planning, the expected results of
this plan, and specifics, including timelines, on how this plan
will impact the security clearance process.
OFFICE OF INSPECTOR GENERAL
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF TRUST FUNDS)
Appropriation, fiscal year 2017....................... $30,184,000
Budget request, fiscal year 2018...................... 30,000,000
Recommended in the bill............................... 30,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -184,000
Budget request, fiscal year 2018.................. - - -
This appropriation provides for the Office of Inspector
General's (OIG) agency-wide audit, investigative, evaluation,
and inspection functions, which identify management and
administrative deficiencies, fraud, waste and mismanagement.
The OIG performs internal agency audits and insurance audits,
and offers contract audit services. Internal audits review and
evaluate all facets of agency operations, including financial
statements. Evaluation and inspection services provide detailed
technical evaluations of agency operations. Insurance audits
review the operations of health and life insurance carriers,
health care providers, and insurance subscribers. Contract
auditors provide professional advice to agency contracting
officials on accounting and financial matters regarding the
negotiation, award, administration, repricing, and settlement
of contracts. The investigative function provides for the
detection and investigation of improper and illegal activities
involving programs, personnel, and operations.
COMMITTEE RECOMMENDATION
The Committee recommends a general fund appropriation of
$5,000,000 for the OIG. In addition, the recommendation
provides $25,000,000 from appropriate trust funds.
National Bureau of Investigations.--Of particular interest
to the Committee is the implementation of OPM's National
Background Investigations Bureau (NBIB). The Committee directs
the Inspector General to submit a report to the Committees on
Appropriations of the House and Senate not less than 12 months
after enactment of this Act assessing the implementation of
NBIB; staffing needs and any performance issues; current and
future costs; governance and accountability structure among the
NBIB, Department of Defense, OPM IG and Performance
Accountability Council; and recommendations and weaknesses
found.
Office of Special Counsel
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $24,750,000
Budget request, fiscal year 2018...................... 26,535,000
Recommended in the bill............................... 24,750,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. -1,785,000
The Office of Special Counsel (OSC): (1) investigates
Federal employee allegations of prohibited personnel practices
(including reprisal for whistleblowing) and, when appropriate,
prosecutes before the Merit Systems Protection Board; (2)
provides a channel for whistleblowing by Federal employees; and
(3) enforces the Hatch Act. The Office may transmit
whistleblower allegations to the agency head concerned and
require an agency investigation and a report to the Congress
and the President when appropriate. Additionally, the Office
enforces the civilian employment and reemployment rights of
military service members under the Uniformed Services
Employment and Re-employment Rights Act.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $24,750,000
for the OSC.
Postal Regulatory Commission
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $16,200,000
Budget request, fiscal year 2018...................... 14,440,000
Recommended in the bill............................... 15,200,000
Bill compared with:
Appropriation, fiscal year 2017................... -1,000,000
Budget request, fiscal year 2018.................. +760,000
The Commission establishes and maintains the U.S. Postal
Service's ratemaking systems, measures service and performance,
ensures accountability, and has enforcement mechanisms,
including the authority to issue subpoenas.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation, out of the
Postal Fund, of $15,200,000 for the Postal Regulatory
Commission (Commission).
Privacy and Civil Liberties Oversight Board
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $10,100,000
Budget request, fiscal year 2018...................... 8,000,000
Recommended in the bill............................... 8,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -2,100,000
Budget request, fiscal year 2018.................. - - -
The Privacy and Civil Liberties Oversight Board (the Board)
is an independent agency within the Executive Branch whose
purpose is to (1) analyze and review actions the Executive
Branch takes to protect the nation from terrorism, ensuring
that the need for such actions is balanced with the need to
protect privacy and civil liberties; and (2) ensure that
liberty concerns are appropriately considered in the
development and implementation of laws, regulations, and
policies related to efforts to protect the nation against
terrorism. The Board consists of 4 part-time members and full-
time chairman.
COMMITTEE RECOMMENDATION
The Committee recommends $8,000,000 for the Board.
Public Buildings Reform Board
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... - - -
Budget request, fiscal year 2018...................... $2,000,000
Recommended in the bill............................... 5,000,000
Bill compared with:
Appropriation, fiscal year 2017................... +5,000,000
Budget request, fiscal year 2018.................. +3,000,000
The Public Buildings Reform Board was created under the
Federal Assets Sale and Transfer Act of 2016 to identify
opportunities for the Government to significantly reduce its
inventory of civilian real property and reduce cost to the
Government.
COMMITTEE RECOMMENDATION
The Committee recommends $5,000,000 for the Board.
Securities and Exchange Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $1,605,000,000
Budget request, fiscal year 2018...................... 1,846,507,000
Recommended in the bill............................... 1,896,507,000
Bill compared with:
Appropriation, fiscal year 2017................... +291,507,000
Budget request, fiscal year 2018.................. +50,000,000
The primary mission of the Securities and Exchange
Commission (SEC) is to protect investors, maintain the
integrity of the securities markets, and assure adequate
information on the capital markets is made available to market
participants and policy makers. This includes monitoring the
rapid evolution of the capital markets, ensuring full
disclosure of all appropriate financial information, regulating
the Nation's securities markets, and preventing fraud and
malpractice in the securities and financial markets.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $1,602,000,000
for SEC salaries and expenses, of which $68,950,000 is for the
Division of Economic and Risk Analysis. In addition, in lieu of
funding from the Reserve Fund, the Committee provides
$50,000,000 for long term information technology projects.
The Committee also provides $244,507,000 for costs
associated with relocation under a replacement lease for the
Commission's headquarters facilities. The Committee expects the
Commission to work closely with the General Services
Administration (GSA) and to keep the Committee informed of
progress on the replacement lease.
Reserve Fund/Information Technology.--The Committee is
supportive of the Commission's prioritization of robust and
effective information technology (IT) systems within the
Commission, and the Committee has been supportive of the use of
these funds for long-term IT projects. However, this fund is
not overseen by Congress and it is left to the discretion of
the Commission as to its use. The Committee believes emergency
reserve funds should be used for natural disaster emergencies
and other crises, not discretionary priorities within a Federal
agency. For fiscal year 2018, an increase of $50,000,000 for IT
funding is provided through the Commission's overall
appropriation. The Committee includes a limitation (section
628) prohibiting funds from the Reserve Fund from being used by
the Commission.
BDC Modernization.--Congress created Business Development
Companies (BDCs) in 1980 to facilitate capital formation in
small and medium size companies. BDCs have recently invested in
small and medium-size companies that provide vital services to
the American public, including companies involved in disease
treatment and prevention, education, information technology
security, agriculture, and construction. Many BDCs specialize
in financing acquisitions made by private equity firms. While
there is a wide variation among BDCs in the size of their
investments, the companies they invest in, and the industries
in which they concentrate, they all share a common investment
objective of making it easier for small and medium-sized
companies to obtain access to capital. Funding from BDCs has
become more important for small businesses as the stifling
regulatory environment resulting from the regulatory
overreaction to the financial crisis has restricted bank and
other traditional financing options for these companies. The
Committee instructs the SEC to modernize the business
development company regulatory regime consistent with H.R.
3868, the Small Business Credit Availability Act as reported by
the Committee on Financial Services on November 3, 2015.
BDC Acquired Fund Fee and Expense Rule.--The SEC issued its
acquired fund fees and expenses (AFFE) rule in 2003 to deal
with the ``Funds of Funds'' business models. As the law does
not consider BDCs to be Funds of Funds, the SEC did not mention
BDCs in the rule. Today the BDC industry has grown dramatically
and the AFFE rule unnecessarily harms the industry. Retail
investors benefit from having professional firms and indexes
analyze BDC securities. However, retail investors are not being
given adequate market protections because the AFFE rule
prohibits BDC securities from inclusion in indexes, which
results in fewer research analysts that cover the BDC industry.
The Committee recommends that the SEC re-open the AFFE rule for
public comment to consider the impacts on the BDC industry and
its investors.
Searchable Data.--The Committee encourages the SEC to
continue its efforts to implement consistent and searchable
open data standards for information filed and submitted by
publicly-traded companies and financial firms. However, the
Committee expects the Commission to take into account small
reporting companies, their respective compliance costs, and
whether volunteer exemptions are appropriate for such companies
when creating these standards. The Committee continues to
recommend that financial regulatory agencies across the U.S.
Government take similar steps to update reporting standards
commensurate with currently available technology.
Joint Rulemakings.--The Committee directs the SEC to work
cooperatively with the Commodity Futures Trading Commission
(CFTC) on all joint rulemakings as required by the Dodd-Frank
Wall Street Reform and Consumer Protection Act.
Selective Service System
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $22,900,000
Budget request, fiscal year 2018...................... 22,900,000
Recommended in the bill............................... 22,900,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
The Selective Service System was established by the
Selective Service Act of 1948. The mission of the System is to
be prepared to supply manpower to the Armed Forces adequate to
ensure the security of the United States during a time of
national emergency. Since 1973, the Armed Forces have relied on
volunteers to fill military manpower requirements, but
selective service registration was reinstituted in July 1980.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $22,900,000
for the Selective Service System.
Small Business Administration
The Small Business Administration (SBA) assists small
businesses through programs including loans, grants, and
contracting preferences. These programs maintain and strengthen
an economy that depends on small businesses for 60 to 80
percent of job creation. SBA programs also serve disadvantaged
populations so that these small business enterprises may
overcome economic and social obstacles to success.
The recommendation provides a total of $847,798,000 for the
SBA for fiscal year 2018. Detailed guidance for the SBA
appropriations accounts is presented below.
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $269,500,000
Budget request, fiscal year 2018...................... 265,000,000
Recommended in the bill............................... 265,000,000
Bill compared with:
Appropriation, fiscal year 2017................... -4,500,000
Budget request, fiscal year 2018.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends $265,000,000 for the salaries and
expenses of the SBA.
SBIC Virtual Data Rooms.--The Committee believes the SBA
has longstanding problems with maintaining and updating
technology. The SBA continues to use inadequate technological
systems to share files, reports, contracts, and other
information that is communicated between SBA staff as well as
between SBICs and the SBA. Virtual Data Rooms (VDR) are
regularly used in the private sector and would make data more
secure and increase operational efficiencies for both SBA and
SBICs. VDRs could also streamline the collection of data by SBA
staff, removing redundant processes at the SBA and saving time
and resources. The Committee recommends that the SBA should
give SBICs the option to select their own VDR provider which
would serve as a communication vehicle for SBICs and the SBA in
a single, secure location for all regulatory documents,
submissions, requests, and communications. SBA has been
supportive of the concept and should permit SBICs to use off
the shelf virtual data room solutions that are commonly used in
the industry.
SBIC Program Licensing.--The Committee is aware of the
often slow pace of licensing within the Small Business
Investment Company (SBIC) program. SBA has a six month goal to
approve licenses that are in the application process, and
significant improvements were made in many cases last year, but
not all. The Committee would like to see these improvements
maintained, made normal and permanent with a meaningfully
expedited and streamlined licensing process of known, repeat
licensees, from those SBICs that have the same management teams
and a proven track record in the SBIC Program. This fast track
process for repeat licensees should be completed no longer than
60 days after an application is submitted to the SBA, which
will allow SBA to properly redirect their resources to first
time funds. The SBA should create a meaningful green light
letter process that clearly outlines for applicants the needed
benchmarks for license approval without changing any of the
terms on the applicant during licensing.
ENTREPRENEURIAL DEVELOPMENT PROGRAMS
Appropriation, fiscal year 2017....................... $245,100,000
Budget request, fiscal year 2018...................... 192,450,000
Recommended in the bill............................... 211,100,000
Bill compared with:
Appropriation, fiscal year 2017................... -34,000,000
Budget request, fiscal year 2018.................. +18,650,000
The SBA's Entrepreneurial Development Programs support non-
credit business assistance to entrepreneurs. The appropriation
includes funding for a network of resource partners located
throughout the United States that provide training, counseling,
and technical assistance to small business entrepreneurs.
COMMITTEE RECOMMENDATION
The Committee recommendations for Entrepreneurial
Development Programs, by program, are displayed in the
following table:
ENTREPRENEURIAL DEVELOPMENT PROGRAMS
[In thousands of dollars]
7(j) Technical Assistance Program (Contracting 2,800
Assistance)..........................................
Entrepreneurship Education............................ 2,000
HUBZone Program....................................... 3,000
Microloan Technical Assistance........................ 31,000
National Women's Business Council..................... 1,500
Native American Outreach.............................. 1,500
SCORE................................................. 10,000
Small Business Development Centers (SBDC)............. 120,000
State Trade & Export Promotion (STEP)................. 10,000
Veterans Outreach*.................................... 12,300
Women's Business Centers (WBC)........................ 17,000
-----------------
Total EDP Programs................................ 211,100
*Veterans Outreach includes funding for: Boots to Business, Veterans
Business Outreach Centers (VBOC), Veteran Women Igniting the Spirit of
Entrepreneurship (V-Wise), Entrepreneurship Bootcamp for Veterans with
Disabilities (EBV), and Boots to Business reboot.
The SBA shall not reduce these non-credit programs from the
amounts specified above and the SBA shall not merge any of the
non-credit programs without advance written approval from the
Committee. The Committee strongly supports the development
programs listed in the table above and will carefully monitor
SBA support of these programs.
Women's Business Centers.--The Committee notes the absence
of WBCs serving many of the U.S. territories and other U.S.
insular areas, and recommends that the SBA consider including
these areas in WBC services.
The Committee recognizes SBA's work in fostering regional
innovation clusters which have provided business development
services to high technology small businesses across the nation.
These small businesses support a diverse group of sectors
including manufacturing, energy and advanced defense
technologies. The Committee encourages SBA to continue
supporting these initiatives that promote the sustainment and
creation of jobs in critical and emerging markets, and foster
innovative entrepreneurship among high technology small
businesses.
OFFICE OF INSPECTOR GENERAL
Appropriation, fiscal year 2017....................... $19,900,000
Budget request, fiscal year 2018...................... 19,900,000
Recommended in the bill............................... 19,900,000
Bill compared with:
Appropriation, fiscal year 2017................... - - -
Budget request, fiscal year 2018.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends $19,900,000 for the Office of
Inspector General of the SBA.
OFFICE OF ADVOCACY
Appropriation, fiscal year 2017....................... $9,220,000
Budget request, fiscal year 2018...................... 9,120,000
Recommended in the bill............................... 9,120,000
Bill compared with:
Appropriation, fiscal year 2017................... -100,000
Budget request, fiscal year 2018.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends $9,120,000 for the Office of
Advocacy of the SBA. The Committee supports the Office's
mission to reduce regulatory burdens that Federal policies
impose on small businesses and to maximize the benefits small
businesses receive from the government.
BUSINESS LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $157,064,000
Budget request, fiscal year 2018...................... 156,220,172
Recommended in the bill............................... 156,220,172
Bill compared with:
Appropriation, fiscal year 2017................... -843,828
Budget request, fiscal year 2018.................. - - -
The SBA Business Loans Program serves as an important
source of capital for America's small businesses. The
recommendation supports the 7(a) business loan program at a
level of $29 billion, the 504 certified development company
program at a level of $7.5 billion, Small Business Investment
Company (SBIC) debentures, and the Secondary Market Guarantee
Program.
COMMITTEE RECOMMENDATION
The Committee recommends a total of $156,220,172 for the
Business Loans Program Account. Of the amount appropriated,
$152,782,000 is for administrative expenses related to business
loan programs. The amount provided for administrative expenses
may be transferred to and merged with the appropriation for SBA
salaries and expenses to cover the common overhead expenses
associated with business loans. Funding is included to fully
support the Microloan program.
DISASTER LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2017....................... $185,977,000
Budget request, fiscal year 2018...................... 186,458,000
Recommended in the bill............................... 186,458,000
Bill compared with:
Appropriation, fiscal year 2017................... +481,000
Budget request, fiscal year 2018.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends a total of $186,458,000 for
Disaster Loan Program administrative expenses which may be
transferred and merged with Salaries and Expenses. The
Committee provides $1,000,000 for the Office of Inspector
General for audits and reviews of the disaster loans program.
The Committee directs the SBA to continue providing updates
on available resources for the disaster loans program on a
monthly basis.
Pre-mitigation activities within the Disaster Loan
Program.--The Committee recognizes the benefit of limiting the
financial exposure of the SBA and reducing the claims payments
from the National Flood Insurance Program. Therefore the
Committee urges the SBA to coordinate with Federal Emergency
Management Agency (FEMA) to expand the SBA Disaster Loan
Program to allow applicants in areas of high flood or natural
disaster risk to utilize loans for pre-disaster mitigation
projects that adhere to FEMA's standards of mitigation
activities that significantly reduce a structure's long-term
flood risk.
ADMINISTRATIVE PROVISIONS--SMALL BUSINESS ADMINISTRATION
(INCLUDING RESCISSION AND TRANSFER OF FUNDS)
Section 520. The Committee continues a provision for the
SBA authorizing transfers of up to five percent of any SBA
appropriation to other appropriations, provided that transfers
do not increase an appropriation by more than 10 percent. The
provision also requires that transfers be treated as a
reprogramming of funds.
Section 521. The Committee includes a provision rescinding
prior year unobligated balances.
Section 522. The Committee includes a provision amending
requirements for the Microloan program.
United States Postal Service
PAYMENT TO THE POSTAL SERVICE FUND
Appropriation, fiscal year 2017....................... $34,658,000
Budget request, fiscal year 2018...................... 58,118,000
Recommended in the bill............................... 58,118,000
Bill compared with:
Appropriation, fiscal year 2017................... +23,460,000
Budget request, fiscal year 2018.................. - - -
The United States Postal Service (USPS) is funded almost
entirely by Postal ratepayers rather than taxpayers. Funds
provided to the Postal Service in the Payment to the Postal
Service Fund include appropriations for revenue forgone,
including providing free mail for the blind, and for overseas
absentee voting.
COMMITTEE RECOMMENDATION
The Committee recommends appropriations totaling
$58,118,000 for Payment to the Postal Service Fund. The
recommendation funds free mail for the blind and overseas
voting and reconciliation of prior year cost adjustment.
Rural Post Offices.--The Committee believes that the United
States postal facility network is an asset of significant
value. The closure of post offices in rural communities creates
an economic burden for people in the United States that depend
on the Postal Service for communication and package services.
In addition to typical postal services, post offices are part
of the identity of rural communities and provide a significant
social value. The closure process of post offices does not
adequately take into account community input.
Notification to Congress.--Title 39 of the U.S. Code
requires the Postal Service to provide the public with notice
prior to closing or consolidating a post office. The Committee
understands that it is the Postal Service's policy to inform
Member of Congress' district and Washington, D.C. offices when
the public receives notice. The Committee directs the Postal
Service to keep Members of Congress informed of Postal Service
activities impacting their constituents and expects the Postal
Service to ensure that Members of Congress are appropriately
informed simultaneously or prior to all public notices.
Accessibility for Disabled Individuals.--The Committee
notes that under the Architectural Barriers Act, the Postal
Service is required to meet accessibility requirements for
disabled individuals.
Multinational Species Conservation Fund Semi-postal
Stamp.--The Committee is pleased with the passage of the
Multinational Species Conservation Fund Semi-postal Stamp
Reauthorization Act, but is concerned that sales of the stamp
will not improve without support from the Postal Service. The
Committee directs the Postmaster General to submit a report,
within 90 days of enactment of this Act, on the actions planned
and taken by the Postal Service to increase sales of the stamp.
P.L. 113-165 reauthorized the printing of the Multinational
Species Conservation Fund semi-postal stamp for an additional 4
years. Although the Postal Service reissued the stamp as
directed by Congress, disappointingly little effort was made to
make the public aware of the stamp's return and sales during
the holiday season. The Committee directs the Postmaster
General to report quarterly to the Committee on Appropriations
of the House and Senate on how many stamps have been sold and
how many remain in stock.
OFFICE OF INSPECTOR GENERAL
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2017....................... $253,600,000
Budget request, fiscal year 2018...................... 234,650,000
Recommended in the bill............................... 234,650,000
Bill compared with:
Appropriation, fiscal year 2017................... -18,950,000
Budget request, fiscal year 2018.................. - - -
The Office of Inspector General (OIG) conducts audits,
reviews and investigations, and keeps Congress informed on the
efficiency and economy of United States Postal Service (USPS)
programs and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $234,650,000
for the OIG.
United States Tax Court
SALARIES AND EXPENSES
Appropriation, fiscal year 2017....................... $51,226,000
Budget request, fiscal year 2018...................... 53,185,000
Recommended in the bill............................... 51,100,000
Bill compared with:
Appropriation, fiscal year 2017................... -126,000
Budget request, fiscal year 2018.................. -2,085,000
The U.S. Tax Court adjudicates controversies involving
deficiencies in income, estate, and gift taxes. The Court also
has jurisdiction to determine deficiencies in certain excise
taxes, to issue declaratory judgments in the areas of
qualifications of retirement plans and exemptions of charitable
organizations, and to decide certain cases involving disclosure
of tax information by the Commissioner of the Internal Revenue
Service.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $51,100,000
for the U.S. Tax Court.
TITLE VI--GENERAL PROVISIONS--THIS ACT
(INCLUDING RESCISSION)
Section 601. The Committee continues the provision
prohibiting pay and other expenses for non-Federal parties in
regulatory or adjudicatory proceedings funded in this Act.
Section 602. The Committee continues the provision
prohibiting obligations beyond the current fiscal year and
prohibits transfers of funds unless expressly so provided
herein.
Section 603. The Committee continues the provision limiting
procurement contracts for consulting service expenditures to
contracts that are matters of public record and available for
public inspection.
Section 604. The Committee continues the provision
prohibiting transfer of funds in this Act without express
authority.
Section 605. The Committee continues the provision
prohibiting the use of funds to engage in activities that would
prohibit the enforcement of section 307 of the 1930 Tariff Act.
Section 606. The Committee continues the provision
concerning compliance with the Buy American Act.
Section 607. The Committee continues the provision
prohibiting the use of funds by any person or entity convicted
of violating the Buy American Act.
Section 608. The Committee continues the provision
specifying reprogramming procedures. The provision requires
that agencies or entities funded by the Act notify the
Committee and obtain prior approval from the Committee for any
reprogramming of funds that: (1) creates a new program; (2)
eliminates a program, project, or activity; (3) increases funds
or personnel for any program, project, or activity for which
funds have been denied or restricted by the Congress; (4)
proposes to use funds directed for a specific activity by
either the House or Senate Committees on Appropriations for a
different purpose; (5) augments existing programs, projects, or
activities in excess of $5,000,000 or 10 percent, whichever is
less; (6) reduces existing programs, projects, or activities by
$5,000,000 or 10 percent, whichever is less; or (7) reorganizes
offices, programs, or activities. The provision directs
agencies funded by this Act to consult with the Committee prior
to any significant reorganization. The provision also directs
the agencies funded by this Act to submit operating plans for
the Committee's review within 60 days of the bill's enactment.
Section 609. The Committee continues the provision
providing that fifty percent of unobligated balances may remain
available through September 30, 2019, for certain purposes.
Section 610. The Committee continues the provision
prohibiting funding for the Executive Office of the President
to request either a Federal Bureau of Investigation background
investigation or Internal Revenue Service determination with
respect to section 501(a) of the Internal Revenue Code of 1986,
except with the express consent of the individual involved in
an investigation or in extraordinary circumstances involving
national security.
Section 611. The Committee continues the provision
regarding cost accounting standards for contracts under the
Federal Employee Health Benefits Program.
Section 612. The Committee continues the provision
regarding non-foreign area cost-of-living allowances.
Section 613. The Committee continues the provision
prohibiting the expenditure of funds for abortion under the
Federal Employees Health Benefits Program.
Section 614. The Committee continues the provision making
exceptions to the preceding provision where the life of the
mother is in danger or the pregnancy is a result of an act of
rape or incest.
Section 615. The Committee continues the provision carried
annually since 2004 waiving restrictions on the purchase of
non-domestic articles, materials, and supplies in the case of
acquisition of information technology by the Federal
Government.
Section 616. The Committee continues the provision
prohibiting officers or employees of any regulatory agency or
commission funded by this Act from accepting travel payments or
reimbursements from a person or entity regulated by such agency
or commission.
Section 617. The Committee continues the provision
permitting the Securities and Exchange Commission and
Commodities Futures Trading Commission to fund a joint advisory
committee to advise on emerging regulatory issues,
notwithstanding section 708 of this Act.
Section 618. The Committee continues the provision
requiring certain agencies in this Act to consult with the
General Services Administration before seeking new office space
or making alterations to existing office space.
Section 619. The Committee continues language providing for
several appropriated mandatory accounts. These are accounts
where authorizing language requires the payment of funds. The
Congressional Budget Office estimates the cost for the
following programs addressed in this provision: $450,000 for
Compensation of the President including $50,000 for expenses,
$167,000,000 for the Judicial Retirement Funds (Judicial
Officers' Retirement Fund, Judicial Survivors' Annuities Fund,
and the United States Court of Federal Claims Judges'
Retirement Fund), $13,202,000,000 for the Government Payment
for Annuitants, Employee Health Benefits, $48,000,000 for the
Government Payment for Annuitants, Employee Life Insurance, and
$8,365,000,000 for the Payment to the Civil Service Retirement
and Disability Fund.
Section 620. The Committee includes language prohibiting
funds for the Federal Trade Commission to complete or publish
the study, recommendations, or report prepared by the
Interagency Working Group on Food Marketed to Children.
Section 621. The Committee includes language to prevent
conflicts of interest by prohibiting contractor security
clearance related background investigators from undertaking
final Federal reviews of their own work.
Section 622. The Committee includes language requiring that
the head of any executive branch agency ensure that the Chief
Information Officer (CIO) has authority to participate in the
budget planning process and approval of the information
technology (IT) budget.
Section 623. The Committee continues the provision
prohibiting funds in contravention of the Federal Records Act.
Section 624. The Committee includes language prohibiting
agencies from requiring Internet Service Providers (ISPs) to
disclose electronic communications information in a manner that
violates the Fourth Amendment.
Section 625. The Committee includes language prohibiting
funds to be used to deny inspectors general access to records.
Section 626. The Committee continues the provision
prohibiting any funds made available in this Act from being
used to establish a computer network unless such network blocks
the viewing, downloading, and exchanging of pornography.
Section 627. The Committee includes a provision to clarify
the terms of the services offered to victims of the OPM
security breaches.
Section 628. The unobligated balance in the Securities and
Exchange Commission Reserve Fund established by section 991 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Public Law 111-203) is permanently rescinded.
Section 629. The Committee includes language prohibiting
funds for the Securities and Exchange Commission to require the
disclosure of political contributions to tax exempt
organizations, or dues paid to trade associations.
Section 630. The Committee includes language that repeals
the Federal Elections Commission's prior approval requirement
for corporate member trade association PACs.
Section 631. The Committee includes language prohibiting
funds to pay for an abortion or the administrative expenses in
connection with a multi-State qualified health plan offered
under a contract under section 1334 of the Patient Protection
and Affordable Care Act which provides any benefits or coverage
for abortions, except for endangerment of the life of the
mother, rape or incest.
Section 632. The Committee includes a new provision
prohibiting funds to require public electronic communication
providers or remote computing services to disclose the contents
of a wire or electronic communication unless required by a
court warrant.
Section 633. The Committee includes a new provision which
defines a pyramid promotional scheme, and limits funds to
enforcement actions under the definition.
TITLE VII--GENERAL PROVISIONS--GOVERNMENT-WIDE
Departments, Agencies, and Corporations
(INCLUDING TRANSFER OF FUNDS)
Section 701. The Committee continues the provision
requiring agencies to administer a policy designed to ensure
that all of its workplaces are free from the illegal use of
controlled substances.
Section 702. The Committee continues the provision
establishing price limitations on vehicles to be purchased by
the Federal Government with an exemption for the purchase of
electric, plug-in hybrid electric, and hydrogen fuel cell
vehicles.
Section 703. The Committee continues the provision allowing
funds made available to agencies for travel to also be used for
quarters allowances and cost-of-living allowances.
Section 704. The Committee continues the provision
prohibiting the employment of noncitizens with certain
exceptions.
Section 705. The Committee continues the provision giving
agencies the authority to pay General Services Administration
bills for space renovation and other services.
Section 706. The Committee continues, with modification,
the provision allowing agencies to finance the costs of
recycling and waste prevention programs with proceeds from the
sale of materials recovered through such programs.
Section 707. The Committee continues the provision
providing that funds made available to corporations and
agencies subject to 31 U.S.C. 91 may pay rent and other service
costs in the District of Columbia.
Section 708. The Committee continues the provision
prohibiting interagency financing of groups absent prior
statutory approval.
Section 709. The Committee continues the provision
prohibiting the use of funds for enforcing regulations
disapproved in accordance with the applicable law of the U.S.
Section 710. The Committee continues the provision limiting
the amount of funds that can be used for redecoration of
offices under certain circumstances.
Section 711. The Committee continues the provision to allow
for interagency funding of national security and emergency
telecommunications initiatives.
Section 712. The Committee continues the provision
requiring agencies to certify that a Schedule C appointment was
not created solely or primarily to detail the employee to the
White House.
Section 713. The Committee continues the provision
prohibiting the payment of any employee who prohibits,
threatens or prevents another employee from communicating with
Congress.
Section 714. The Committee continues the provision
prohibiting Federal training not directly related to the
performance of official duties.
Section 715. The Committee continues the provision
prohibiting, other than for normal and recognized executive-
legislative relationships, propaganda, publicity and lobbying
by executive agency personnel in support or defeat of
legislative initiatives.
Section 716. The Committee continues the provision
prohibiting any Federal agency from disclosing an employee's
home address to any labor organization, absent employee
authorization or court order.
Section 717. The Committee continues the provision
prohibiting funds to be used to provide non-public information
such as mailing, telephone, or electronic mailing lists to any
person or organization outside the government without the
approval of the Committees on Appropriations.
Section 718. The Committee continues the provision
prohibiting the use of funds for propaganda and publicity
purposes not authorized by Congress.
Section 719. The Committee continues the provision
directing agency employees to use official time in an honest
effort to perform official duties.
Section 720. The Committee continues the provision
authorizing the use of funds to finance an appropriate share of
the Federal Accounting Standards Advisory Board.
Section 721. The Committee continues the provision
authorizing the transfer of funds to the General Services
Administration to finance an appropriate share of various
government-wide boards and councils and for Federal Government
Priority Goals under certain conditions.
Section 722. The Committee continues the provision that
permits breastfeeding in a Federal building or on Federal
property if the woman and child are authorized to be there.
Section 723. The Committee continues the provision that
permits interagency funding of the National Science and
Technology Council and provides for a report on the budget and
resources of the National Science and Technology Council.
Section 724. The Committee continues the provision
requiring documents involving the distribution of Federal funds
to indicate the agency providing the funds and the amount
provided.
Section 725. The Committee continues the provision
prohibiting the use of funds to monitor personal access or use
of Internet sites or to collect, review, or obtain any
personally identifiable information relating to access to or
use of an Internet site.
Section 726. The Committee continues a provision requiring
health plans participating in the Federal Employees Health
Benefits Program to provide contraceptive coverage and provides
exemptions to certain religious plans.
Section 727. The Committee continues language supporting
strict adherence to anti-doping activities.
Section 728. The Committee continues a provision allowing
funds for official travel to be used by departments and
agencies, if consistent with OMB Circular A-126, to participate
in the fractional aircraft ownership pilot program.
Section 729. The Committee continues the provision that
restricts the use of funds for Federal law enforcement training
facilities.
Section 730. The Committee continues the provision that
prohibits Executive Branch agencies from creating prepackaged
news stories that are broadcast or distributed in the United
States unless the story includes a clear notification within
the text or audio of such news story that the prepackaged news
story was prepared or funded by that executive branch agency.
This provision confirms the opinion of the Government
Accountability Office dated February 17, 2005 (B-304272).
Section 731. The Committee continues the provision
prohibiting use of funds in contravention of section 552a of
title 5, United States Code (the Privacy Act) and regulations
implementing that section.
Section 732. The Committee continues the provision
prohibiting funds from being used for any Federal Government
contract with any foreign incorporated entity which is treated
as an inverted domestic corporation.
Section 733. The Committee continues the provision
requiring agencies to pay a fee to the Office of Personnel
Management for processing retirement of employees who separate
under Voluntary Early Retirement Authority or who receive
Voluntary Separation Incentive payments.
Section 734. The Committee includes language prohibiting
funds to require any entity submitting an offer for a Federal
contract or participating in an acquisition to disclose
political contributions.
Section 735. The Committee continues the provision
prohibiting funds for the painting of a portrait of an employee
of the Federal Government, including the President, the Vice
President, a Member of Congress, the head of an executive
branch agency, or the head of an office of the legislative
branch.
Section 736. The Committee continues the provision limiting
the pay increases of certain prevailing rate employees.
Section 737. The Committee continues a provision, with
modification, requiring agencies to submit reports to
Inspectors General concerning expenditures for agency
conferences.
Section 738. The Committee continues a provision
prohibiting funds to be used to increase, eliminate, or reduce
funding for a program or project unless such change is made
pursuant to reprogramming or transfer provisions.
Section 739. The Committee continues a provision
prohibiting agencies from using funds to implement regulations
changing the competitive areas under reductions-in-force for
Federal employees.
Section 740. The Committee continues the provision ensuring
contractors are not prevented from reporting waste, fraud, or
abuse by signing confidentiality agreements that would prohibit
such disclosure.
Section 741. The Committee continues the provision
prohibiting the expenditure of funds for the implementation of
certain nondisclosure agreements unless certain provisions are
included in the agreements.
Section 742. The Committee continues the provision
prohibiting funds to any corporation with certain unpaid
Federal tax liabilities unless an agency has considered
suspension or debarment of the corporation and made a
determination that further action is not necessary to protect
the interests of the Government.
Section 743. The Committee continues the provision
prohibiting funds to any corporation that was convicted of a
felony criminal violation within the preceding 24 months unless
an agency has considered suspension or debarment of the
corporation and made a determination that further action is not
necessary to protect the interests of the Government.
Section 744. The Committee continues a provision requiring
the Bureau of Consumer Financial Protection to notify the
Committees on Appropriations of the House and Senate, the
Committee on Financial Services of the House, and the Committee
on Banking, Housing, and Urban Affairs of the Senate of
requests for a transfer of funds from the Board of Governors of
the Federal Reserve System as well as post any such
notifications on the Bureau's website.
Section 745. The Committee modifies a provision on the
conditions for implementing Executive Order 13690.
Section 746. The Committee includes a provision which
allows those authorized to be employed in the United States
pursuant to the Deferred Action for Childhood Arrivals program
to be eligible for Federal government employment.
Section 747. The Committee continues the provision
concerning the non-application of these general provisions to
title IV and to title VIII.
TITLE VIII--GENERAL PROVISIONS--DISTRICT OF COLUMBIA
(INCLUDING TRANSFERS OF FUNDS)
Section 801. The Committee continues language that
appropriates funds to refund overpayments of taxes collected
and to pay settlements and judgments against the District of
Columbia government.
Section 802. The Committee continues language prohibiting
the use of Federal funds for publicity or propaganda purposes.
Section 803. The Committee continues language establishing
reprogramming procedures for Federal and local funds.
Section 804. The Committee continues language prohibiting
the use of Federal funds to provide salaries or other costs
associated with the offices of United States Senator or
Representative.
Section 805. The Committee continues language limiting the
use of official vehicles to official duties.
Section 806. The Committee continues language prohibiting
the use of Federal funds for any petition drive or civil action
which seeks to require Congress to provide for voting
representation in Congress for the District of Columbia.
Section 807. The Committee includes language prohibiting
the use of Federal funds for needle exchange programs.
Section 808. The Committee continues language providing for
a ``conscience clause'' on legislation that pertains to
contraceptive coverage by health insurance plans.
Section 809. The Committee continues language prohibiting
the use of Federal funds to legalize or reduce penalties
associated with the possession, use, or distribution of any
schedule I substance under the Controlled Substances Act or any
tetrahydrocannabinols derivative.
Language is also included prohibiting local and Federal
funds to legalize or reduce penalties associated with the
possession, use, or distribution of any schedule I substance
under the Controlled Substance Act or any tetrahydrocannabinols
derivative for recreational use.
Section 810. The Committee continues the provision that
prohibits the use of funds for any abortion except in the cases
of rape or incest or if necessary to save the life of the
mother.
Section 811. The Committee continues language requiring the
Chief Financial Officer (CFO) to submit a revised operating
budget for all agencies in the D.C. government, no later than
30 calendar days after the enactment of this Act that realigns
budgeted data with anticipated actual expenditures.
Section 812. The Committee continues language requiring the
CFO to submit a revised operating budget for D.C. Public
Schools, no later than 30 calendar days after the enactment of
this Act that realigns school budgets to actual school
enrollment.
Section 813. The Committee continues language allowing the
transfer of local funds and capital and enterprise funds.
Section 814. The Committee continues language prohibiting
the obligation of Federal funds beyond the current fiscal year
and transfers of funds unless expressly provided herein.
Section 815. The Committee continues language providing
that not to exceed 50 percent of unobligated balances from
Federal appropriations for salaries and expenses may remain
available for certain purposes. This provision will apply to
the District of Columbia Courts, the Court Services and
Offender Supervision Agency, and the District of Columbia
Public Defender Service.
Section 816. The Committee continues language appropriating
local funds during fiscal year 2019 if there is an absence of a
continuing resolution or regular appropriation for the District
of Columbia. Funds are provided under the same authorities and
conditions and in the same manner and extent as provided for in
fiscal year 2018.
Section 817. The Committee includes a provision to repeal
the Local Budget Autonomy Amendment Act of 2012.
Section 818. The Committee includes a new provision
prohibiting funds to enact any act, resolution, rule,
regulation, guidance, or other law to permit any person to
carry out any activity, or to reduce the penalties imposed with
respect to any activity to which subsection (a) of section 3 of
the Assisted Suicide Funding Restriction Act of 1997 applies,
and repeals the District of Columbia Death With Dignity Act of
2016.
Section 819. The Committee continues language limiting
references to ``this Act'' as referring to only this title and
title IV.
TITLE IX--OTHER MATTERS
The bill includes provisions from H.R. 10, the Financial
CHOICE Act, as passed by the House of Representatives on June
8, 2017.
TITLE X--FINANCIAL INSTITUTION BANKRUPTCY
The bill includes H.R. 1667, the Financial Institution
Bankruptcy Act of 2017, which was passed by the House of
Representatives on April 5, 2017.
TITLE XI--ADDITIONAL GENERAL PROVISIONS
SPENDING REDUCTION ACCOUNT
Section 1101. The Committee includes a provision
establishing a ``Spending Reduction Account'' in the bill.
HOUSE OF REPRESENTATIVES REPORT REQUIREMENTS
The following items are included in accordance with various
requirements of the Rules of the House of Representatives:
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the following is a statement of
general performance goals and objectives for which this measure
authorizes funding:
The Committee on Appropriations considers program
performance, including a program's success in developing and
attaining outcome-related goals and objectives, in developing
funding recommendations.
Rescission of Funds
Pursuant to clause 3(f)(2) of rule XIII of the Rules of the
House of Representatives, the following table is submitted
describing the rescissions recommended in the accompanying
bill:
Treasury Forfeiture Fund.............................. $876,000,000
General Services Administration....................... $200,000,000
Securities and Exchange Commission.................... $75,000,000
Small Business Administration......................... $2,600,000
Transfer of Funds
Pursuant to clause 3(f)(2) of rule XIII of the Rules of the
House of Representatives, the following is submitted describing
the transfer of funds provided in the accompanying bill:
UNDER TITLE I--DEPARTMENT OF THE TREASURY
Section 101 allows the transfer of five percent of any
appropriation made available to the Internal Revenue Service
(IRS) to any other IRS appropriation, subject to prior
congressional approval.
Section 115 authorizes the transfers of funds to IRS to
improve customer service, fraud prevention, and cybersecurity.
Section 118 authorizes transfers, up to two percent,
between Departmental Offices, Office of Inspector General,
Special Inspector General for Troubled Asset Relief Program,
Financial Crimes Enforcement Network, Bureau of the Fiscal
Service, Alcohol and Tobacco Tax and Trade Bureau, and
Community Development Financial Institutions Fund Program Fund
Account appropriations under certain circumstances.
Section 119 authorizes transfers, up to two percent,
between the IRS and the Treasury Inspector General for Tax
Administration under certain circumstances.
Section 121 authorizes the transfer of funds from the
``Bureau of the Fiscal Service'' to the ``Debt Collection
Fund'' as necessary to cover the cost of debt collection.
UNDER TITLE II--EXECUTIVE OFFICE OF THE PRESIDENT
Language is included under Presidential Transition
Administrative Support, which allows for the transfer of funds
within the Executive Office of the President.
Language is included under Federal Drug Control Programs,
``High Intensity Drug Trafficking Areas Program'', which allows
for the transfer of funds to Federal departments or agencies
and State and local entities.
Language is included under ``Other Federal Drug Control
Programs'', allowing the transfers of funds to other Federal
departments and agencies to carry out activities.
Language is included under ``Information Technology
Oversight and Reform'', allowing the transfer of funds to other
agencies to carry out projects.
Language is included under the Official Residence of the
Vice President, ``Operating Expenses'', allowing the transfer
of funds to other Federal departments or agencies.
Section 201 permits the Executive Office of the President
to transfer up to 10 percent of any appropriation, subject to
approval of the Committee.
UNDER TITLE III--THE JUDICIARY
Language is included under ``Courts of Appeals, District
Courts, and Other Judicial Services, Court Security'', allowing
funds to be transferred to the United States Marshals Service
for courthouse security.
Section 302 permits the Judiciary to transfer up to five
percent of any appropriation with certain limitations.
UNDER TITLE V--INDEPENDENT AGENCIES
Under Title V, Independent Agencies, a number of transfers
are allowed.
(1) Under the Election Assistance Commission, amounts may
be transferred to the National Institute of Standards and
Technology.
(2) Under the General Services Administration, amounts may
be transferred within the Federal Buildings Fund, under certain
circumstances, after approval of the Committee on
Appropriations.
(3) Under the General Services Administration, ``Federal
Citizens Services Fund'', transfers are allowed from the
Federal Citizens Services Fund to Federal agencies.
(4) Under the General Services Administration, ``Federal
Citizens Services Fund'', transfers are allowed from
unobligated funding provided to the ``Electronic Government
Fund'' to the Federal Citizens Services Fund.
(5) Section 511 permits the General Services Administration
to transfer funds in the Federal Buildings Fund after approval
of the Committee on Appropriations.
(6) Under Merit Systems Protection Board, an amount is
transferred from the Civil Service Retirement and Disability
Fund.
(7) Under Office of Personnel Management, amounts from
certain trust funds are transferred to the Salaries and
Expenses and Office of Inspector General accounts for
administrative expenses;
(8) Under the Postal Regulatory Commission, amounts are
transferred from the Postal Service Fund;
(9) Under Small Business Administration, Business Loans
Program Account, amounts may be transferred to and merged with
Salaries and Expenses.
(10) Under Small Business Administration, Disaster Loans
Program Account, amounts may be transferred to and merged with
the Office of Inspector General, and Salaries and Expenses.
(11) Section 520 permits the Small Business Administration
to transfer funds between appropriations of the Small Business
Administration.
(12) Under United States Postal Service, Office of
Inspector General, amounts are transferred from the Postal
Service Fund.
UNDER TITLE VII--GOVERNMENT-WIDE
Section 721 authorizes departments and agencies to transfer
funds to the General Services Administration to support certain
financial, information technology, procurement, and other
management initiatives.
UNDER TITLE VIII--GENERAL PROVISIONS, DISTRICT OF COLUMBIA
Section 803 authorizes the District of Columbia to transfer
local funds and section 813 allows transfer of funds between
operations and capital accounts.
Disclosure of Earmarks and Congressionally Directed Spending Items
Neither the bill nor the report contains any Congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9 of rule XXI of the Rules of the House of
Representatives.
Changes in the Application of Existing Law
Pursuant to clause 3(f)(1)(A) of rule XIII of the Rules of
the House of Representatives, the following statements are
submitted describing the effect of provisions proposed in the
accompanying bill which may be considered, under certain
circumstances, to change the application of existing law,
either directly or indirectly. The bill provides that
appropriations shall remain available for more than one year
for a number of programs for which the basic authorizing
legislation does not explicitly authorize such extended
availability. In addition, the bill carries language, in some
instances, permitting activities not authorized by law, or
exempting agencies from certain provisions of law, but which
has been carried in appropriations acts for many years.
The bill includes several limitations on official
entertainment, reception and representation expenses. Similar
provisions have appeared in many previous appropriations Acts.
The bill includes a number of limitations on the purchase of
automobiles or office furnishings that also have appeared in
many previous appropriations Acts. Language is included in
several instances permitting certain funds to be credited to
the appropriations recommended. Language is also included in
several instances permitting funding for services authorized by
5 U.S.C. 3109 and for the hire of passenger motor vehicles.
Changes in the Application of Existing Law
Pursuant to clause 3(f)(1)(A) of rule XIII of the Rules of
the House of Representatives, the following statements are
submitted describing the effect of provisions proposed in the
accompanying bill which may be considered, under certain
circumstances, to change the application of existing law,
either directly or indirectly. The bill provides that
appropriations shall remain available for more than one year
for a number of programs for which the basic authorizing
legislation does not explicitly authorize such extended
availability. In addition, the bill carries language, in some
instances, permitting activities not authorized by law, or
exempting agencies from certain provisions of law, but which
has been carried in appropriations acts for many years.
The bill includes several limitations on official
entertainment, reception and representation expenses. Similar
provisions have appeared in many previous appropriations Acts.
The bill includes a number of limitations on the purchase of
automobiles or office furnishings that also have appeared in
many previous appropriations Acts. Language is included in
several instances permitting certain funds to be credited to
the appropriations recommended. Language is also included in
several instances permitting funding for services authorized by
5 U.S.C. 3109 and for the hire of passenger motor vehicles.
Title I--Department of the Treasury
Language is included for ``Departmental Offices, Salaries
and Expenses'' that provides funds for operation and
maintenance of the Treasury Building Annex; hire of passenger
motor vehicles; maintenance, repairs, and improvements of, and
purchase of commercial insurance policies for real properties
leased or owned overseas.
Language is also included designating funds for official
reception and representation expenses; unforeseen emergencies
of a confidential nature; and extending the period of
availability for certain funds.
Language is included for the ``Office of Terrorism and
Financial Intelligence, Salaries and Expenses'' that provides
funds combating threats to national security.
Language is included for ``Cybersecurity Enhancement
Account'' that provides funds for enhanced cybersecurity for
systems operated by the Department of the Treasury.
Language is included for the Office of Inspector General,
``Salaries and Expenses'', that provides funds to carry out the
provisions of the Inspector General Act of 1978, including
official reception and representation expenses, the hire of
vehicles, and provides funds for unforeseen emergencies of a
confidential nature.
Language is included for the Treasury Inspector General for
Tax Administration, Salaries and Expenses that provides funds
to carry out the provisions of the Inspector General Act of
1978, including consulting services, official reception and
representation expenses, the purchase and hire of motor
vehicles, unforeseen emergencies of a confidential nature, and
specifies the period of availability for certain funds.
Language is included for the Special Inspector General for
the Troubled Asset Relief Program, ``Salaries and Expenses'',
that provides funds for the necessary expenses of the SIGTARP
in carrying out the provisions of the Emergency Economic
Stabilization Act of 2008 (P.L. 110-343).
Language is included for ``Financial Crimes Enforcement
Network, Salaries and Expenses'' that provides funds for the
hire of motor vehicles; travel and training of non-federal and
foreign government personnel attending meetings involving
domestic or foreign financial law enforcement, intelligence,
and regulation; official reception and representation expenses;
and assistance to Federal law enforcement agencies with or
without reimbursement. Language is also included that extends
the availability of certain amounts.
Language is included under the heading ``Treasury
Forfeiture Fund'' rescinding certain funds and returning funds
to the General Fund.
Language is included for the Bureau of the Fiscal Service,
``Salaries and Expenses'', that provides a certain amount for
official reception and representation expenses, and extends the
availability for systems modernization funds. Language is also
included specifying an amount to be derived from the Oil Spill
Liability Trust Fund.
Language is included for the Alcohol and Tobacco Tax and
Trade Bureau, ``Salaries and Expenses'', that provides funds
for the hire of passenger motor vehicles and laboratory
assistance to State and local agencies with or without
reimbursement. Language is also included that specifies the
amounts for official reception and representation expenses and
cooperative research and development.
Language is included for the U.S. Mint, ``United States
Mint Public Enterprise Fund'', which identifies the source of
funding for the operations and activities of the U.S. Mint and
specifies the level of funding for circulating coinage and
protective service capital investments.
Language is included for the Community Development
Financial Institutions Fund Program Account that provides
specific amounts for: financial and technical assistance;
Native American initiatives; administrative expenses for the
program and cost of direct loans; New Markets Tax Credit
Program; and disabled community assistance. Language is
included clarifying the cost of direct loans and the cost of
modifying direct loans, and specifying the limitation on gross
obligations for the principal amount of direct loans.
Language is included under Internal Revenue Service,
Taxpayer Services, that provides funds for pre-filing
assistance and education, filing and account services, and
taxpayer advocacy services, and dedicating funding for the Tax
Counseling for the Elderly Program, low-income taxpayer clinic
grants, and Community Volunteer Income Tax Assistance grants.
Language is included for Internal Revenue Service,
Enforcement, that provides funds to determine and collect owed
taxes, provide legal and litigation support, conduct criminal
investigations, enforce criminal statutes, purchase and hire of
vehicles; and designates funding for the Interagency Crime and
Drug Enforcement program. Language is included specifying the
period of availability for certain funds.
Language is included for the Internal Revenue Service,
Operations Support, that provides funds for operating and
supporting taxpayer services and tax law enforcement programs;
rent; facilities services; printing; postage; physical
security; headquarters and other IRS-wide administration
activities; research and statistics of income;
telecommunications; information technology development,
enhancement, operations, maintenance, and security; hire of
passenger motor vehicles; and official reception and
representation expenses. Language is included specifying the
period of availability for certain funds and requiring reports
on information technology.
Language is included for Internal Revenue Service, Business
Systems Modernization that provides for the business systems
modernization program, including capital asset acquisition of
information technology, including management and related
contractual costs and IRS labor costs of said acquisitions,
contractual costs associated with operations, an extended
availability of the funds and requires quarterly reports.
In addition, the bill provides the following administrative
provisions:
Section 101. Language is included that allows for the
transfer of five percent of any appropriation made available to
the IRS to any other IRS appropriation, upon the advance
approval of the Committees on Appropriations.
Section 102. Language is included that requires the IRS to
maintain a training program in taxpayers' rights, dealing
courteously with taxpayers, cross-cultural relations, and the
impartial application of tax law.
Section 103. Language is included that requires the IRS to
institute and enforce policies and procedures that will
safeguard the confidentiality of taxpayer information and
protect taxpayers against identity theft.
Section 104. Language is included that makes funds
available for improved facilities and increased staffing to
provide efficient and effective 1-800 number help line service
for taxpayers.
Section 105. Language is included requiring videos produced
by the IRS to be approved in advance by the Service-Wide Video
Editorial Board.
Section 106. Language is included to require the IRS to
issue notices to employers of any address change request and to
give special consideration to offers in compromise for
taxpayers who have been victims of payroll tax preparer fraud.
Section 107. Language is included to prohibit the IRS from
targeting U.S. citizens for exercising their First Amendment
rights.
Section 108. Language is included to prohibit the use of
funds by the IRS to target groups based on their ideological
beliefs.
Section 109. Language is included to prohibit the use of
funds by the IRS on conferences that do not adhere to
recommendations made by the Treasury Inspector General for Tax
Administration.
Section 110. Language is included prohibiting funds for IRS
employee awards or hiring programs that do not consider
employee conduct and Federal tax compliance.
Section 111. Language included to prohibit the use of funds
in contravention of section 6103 of the Internal Revenue Code
of 1986 (relating to confidentiality and disclosure of returns
and return information).
Section 112. Language is included prohibiting funds from
being used to implement the individual mandate of the
Affordable Care Act.
Section 113. Language is included to prohibit funds for
pre-populated returns.
Section 114. Language is included to prohibit funds to
enforce new guidance on conservation easements.
Section 115. Language is included to prohibit funds to
finalize, implement or enforce amendments to proposed
regulations related to estate, gift, and transfer taxes.
Section 116. Language is included to prohibit funds for the
IRS to make a determination that a church is not exempt from
taxation unless specific criteria is met.
Section 117. Language is included that authorizes the
Department to purchase uniforms, insurance for motor vehicles
that are overseas, and motor vehicles that are overseas without
regard to the general purchase price limitations; to enter into
contracts with the State Department for health and medical
services for Treasury employees that are overseas; and to hire
experts or consultants.
Section 118. Language is included that authorizes
transfers, up to two percent, between ``Departmental Offices--
Salaries and Expenses'', ``Office of Inspector General'',
``Special Inspector General for the Troubled Asset Relief
Program'', ``Financial Crimes Enforcement Network'', ``Bureau
of the Fiscal Service'', and ``Alcohol and Tobacco Tax and
Trade Bureau'', appropriations under certain circumstances.
Section 119. Language is included that authorizes
transfers, up to two percent, between the Internal Revenue
Service and the Treasury Inspector General for Tax
Administration under certain circumstances.
Section 120. Language is included prohibiting the
Department of the Treasury from undertaking a redesign of the
one dollar Federal Reserve note.
Section 121. Language is included providing for transfers
from and reimbursements to ``Bureau of the Fiscal Service,
Salaries and Expenses'' for the purposes of debt collection.
Section 122. Language is included requiring congressional
approval for the construction and operation of a museum by the
United States Mint.
Section 123. Language is included prohibiting funds in this
or any other Act from being used to merge the U.S. Mint and the
Bureau of Engraving and Printing without the approval of the
House and Senate committees of jurisdiction.
Section 124. Language is included deeming that funds for
the Department of the Treasury's intelligence-related
activities are specifically authorized in fiscal year 2018
until enactment of the Intelligence Authorization Act for
fiscal year 2018.
Section 125. Language is included permitting the Bureau of
Engraving and Printing to use $5,000 from the Industrial
Revolving Fund for reception and representation expenses.
Section 126. Language is included requiring the Department
of the Treasury to submit a capital investment plan.
Section 127. Language is included requiring a quarterly
report from both the Office of Financial Research and Office of
Financial Stability Oversight.
Section 128. Language is included requiring the Department
of the Treasury to submit a report on its Franchise Fund.
Section 129. Language is included prohibiting the
Department of the Treasury from finalizing any regulation
related to the standards used to determine the tax-exempt
status of a 501(c)(4) organization.
Section 130. Language is included prohibiting funds to
approve, license, facilitate, authorize, or otherwise allow the
importation of property confiscated by the Cuban Government.
Section 131. Language is included prohibiting funds to
approve or otherwise allow the licensing of a mark, trade name,
or commercial name that is substantially similar to one that
was used in connection with a business or assets that were
confiscated unless expressly consented.
Section 132. Language is included requiring the Special
Inspector General for the Troubled Asset Relief Program to
prioritize performance audits or investigations of programs
funded under the Emergency Economic Stabilization Act of 2008.
Section 133. Language is included prohibit the Department
from enforcing guidance for U.S. positions on multilateral
development banks engaging with developing countries on coal-
fired power generation.
Title II--Executive Office of the President
Language under ``The White House, Salaries and Expenses''
provides funds for services authorized by 5 U.S.C. 3109 and 3
U.S.C. 103, 105 and 107, hire of vehicles, and official
reception and representation expenses; and the Office of Policy
Development.
Language under ``Executive Residence at the White House,
Operating Expenses'' provides funds for necessary expenses as
authorized by 3 U.S.C. 105, 109, 110, and 112-114.
Language under ``Executive Residence at The White House,
Reimbursable Expenses'' specifies the authorized use of funds;
specifies that reimbursable expenses are the exclusive
authority of the Executive Residence to incur obligations and
receive offsetting collections; requires the sponsors of
political events to make advance payments; requires the
national committee of the political party of the President to
maintain $25,000 on deposit; requires the Executive Residence
to ensure that amounts owed are billed within 60 days of a
reimbursable event and collected within 30 days of the bill
notice; authorizes the Executive Residence to charge and assess
interest and penalties on late payments; authorizes all
reimbursements to be deposited into the Treasury as a
miscellaneous receipt; requires a report to the Committee on
the reimbursable expenses within 90 days of the end of the
fiscal year; requires the Executive Residence to maintain a
system for tracking and classifying reimbursable events; and
specifies that the Executive Residence is not exempt from the
requirements of subchapter I or II of chapter 37 of title 31,
United States Code.
Language under ``White House Repair and Restoration''
provides funds for the repair, alteration, and improvement of
the Executive Residence at the White House; and allows funds to
remain available until expended.
Language under Council of Economic Advisors, ``Salaries and
Expenses'', is provided for necessary expenses in carrying out
the Employment Act of 1946.
Language under ``National Security Council and Homeland
Security Council, Salaries and Expenses'' provides for services
authorized by 5 U.S.C. 3109.
Language under ``Office of Administration, Salaries and
Expenses'' provides funds for continued modernization of the
information resources within the Executive Office of the
President, to remain available until expended, and provides for
services authorized by 5 U.S.C. 3109 and 3 U.S.C. 107, and for
the hire of vehicles.
Language under ``Office of Management and Budget, Salaries
and Expenses'' provides funds for expenses; services authorized
by 5 U.S.C. 3109; the hire of vehicles; carrying out provisions
of chapter 35 of title 44 United States Code and to prepare the
budget request; specifies funds for official representation
expenses; prohibits the review of agricultural marketing
orders; prohibits the use of funds for the purpose of altering
the transcript of testimony except for OMB officials; prohibits
the use of funds for evaluating or determining if water
resource project or study reports submitted by the Chief of
Engineers are in compliance with all applicable laws,
regulations, and requirements; and specifies the amount of time
to perform budgetary policy reviews of water resource matters
on which the Chief of Engineers has reported before the report
is considered approved, and specifies notification
requirements.
Language under ``Office of National Drug Control Policy,
Salaries and Expenses'' provides for expenses; receptions and
representation expenses; participation in joint projects;
provision of services to non-profit, research or public
organizations or agencies with or without reimbursement; and
allows for gifts to be used without fiscal year limitation for
the work of the Office.
Language ``High Intensity Drug Trafficking Area Program''
provides funds for expenses, extends the availability of funds,
directs the distribution and obligation of funds, allows for
the transfer of funds, allows for the reprogramming of
unobligated funds, and requires notification on the
distribution of funds.
Language under ``Other Federal Drug Control Programs''
extends the availability of funds, directs the distribution of
funds, and allows for the transfer of funds.
Language under ``Unanticipated Needs'' extends the
availability of funds.
Language under ``Information Technology Oversight and
Reform'' provides for the use of funds, extends the
availability of funds, and allows for the transfer of funds.
Language under ``Special Assistance to the President,
Salaries and Expenses'' enables the Vice President to provide
assistance to the President, services authorized by 5 U.S.C.
3109 and 3 U.S.C. 106, and the hire of vehicles.
Language under ``Official Residence of the Vice President,
Operating Expenses'' provides funds for operation and
maintenance of the official residence of the Vice President,
the hire of vehicles, expenses authorized by 3 U.S.C. 106(b)(2)
and provides for the transfer of funds as necessary.
In addition, the bill provides the following administrative
provisions:
Section 201. Language is included permitting the transfer
of not to exceed ten percent of funds between various accounts
within the Executive Office of the President, with advance
approval of the Committees on Appropriations. The amount of an
appropriation shall not be increased by more than 50 percent.
Section 202. Language is included requiring the Director of
the Office of Management and Budget to report on the costs of
implementing the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Public Law 111-203).
Section 203. Language is included requiring the Director of
the Office of Management and Budget to include a statement of
budgetary impact with any Executive Order or Presidential
Memorandum issued or rescinded during fiscal year 2018.
Title III--The Judiciary
Language is included under Supreme Court, ``Salaries and
Expenses'', providing for certain funds to remain available
until expended; the hire of passenger motor vehicles, official
reception and representation, and miscellaneous expenses.
Language is included providing funds for salaries of judges as
authorized by law.
Language is included under Supreme Court, ``Care of the
Building and Grounds'', permitting funds to remain available
until expended.
Language is included under United States Court of Appeals
for the Federal Circuit, ``Salaries and Expenses'', for
necessary expenses of the court. Language is included providing
funds for salaries of judges as authorized by law.
Language is included under United States Court of
International Trade, ``Salaries and Expenses'', for necessary
expenses of the court. Language is included providing funds for
salaries of judges as authorized by law.
Language is included under Courts of Appeals, District
Courts, and Other Judicial Services, ``Salaries and Expenses'',
providing funds for the salaries of certain judges, and all
other employees not otherwise provided for; necessary expenses;
the purchase, rental, repair and cleaning of uniforms for
Probation and Pretrial Services Office staff; firearms and
ammunition; and specifies certain funds remain available for
certain periods for specific purposes. Language is included
providing funds for salaries of judges as authorized by law.
Language is also included providing funding from the Vaccine
Injury Compensation Trust Fund for certain purposes.
Language is included under Defender Services, providing for
the compensation and reimbursement of expenses for attorneys,
investigative, expert and other services, the operation of
Federal Defender organizations, travel, training, general
administrative expenses and permitting funds to remain
available until expended.
Language is included under Fees of Jurors and
Commissioners, permitting funds to remain available until
expended and specifying limitations for the compensation of
land commissioners.
Language is included under Court Security, providing for
protective guard services and procurement, installation and
maintenance of security systems and equipment, building
ingress-egress control, inspection of mail and packages,
directed security patrols, perimeter security and services
provided by the Federal Protective Services. Language is
included permitting certain funds to remain available until
expended, which may be transferred to the United States
Marshals Service.
Language is included under Administrative Office of the
United States Courts, ``Salaries and Expenses'', providing for
travel, the hire of passenger motor vehicles, advertising and
rent in the District of Columbia. Language is included
specifying certain amounts for official reception and
representation expenses.
Language is included under Federal Judicial Center,
``Salaries and Expenses'', extending the availability of
certain funds for education and training, and specifying
certain amounts for official reception and representation
expenses.
Language is included under United States Sentencing
Commission, ``Salaries and Expenses'', specifying certain
amounts for official reception and representation expenses.
In addition, the bill provides the following administrative
provisions:
Section 301. Language is included permitting funds for
salaries and expenses to be available for the employment of
experts and consultant services as authorized by 5 U.S.C. 3109.
Section 302. Language is included permitting up to five
percent of any appropriation made available for fiscal year
2018 to be transferred between Judiciary appropriations
provided that no appropriation shall be decreased by more than
five percent or increased by more than ten percent by any such
transfer except in certain circumstances. In addition, the
language provides that any such transfer shall be treated as a
reprogramming of funds under sections 604 and 608 of the
accompanying bill and shall not be available for obligation or
expenditure except in compliance with the procedures set forth
in those sections.
Section 303. Language is included allowing not to exceed
$11,000 to be used for official reception and representation
expenses incurred by the Judicial Conference of the United
States.
Section 304. Language is included allowing the delegation
of authority to the Judiciary for contracts for repairs of less
than $100,000 through fiscal year 2018.
Section 305. Language is included allowing a court security
pilot program.
Section 306. Language is included requested by the Judicial
Conference of the United States extending temporary judgeships
in Arizona, California, Florida, Kansas, Missouri, New Mexico,
North Carolina and Texas.
Section 307. Language is included requested by the Judicial
Conference of the United States extending temporary bankruptcy
judgeships in Virginia, Michigan, Puerto Rico, Delaware, and
Florida.
Title IV--District of Columbia
Language is included under ``Federal Payment for Resident
Tuition Support'', permitting the amount appropriated to remain
available until expended; specifying conditions for the use,
award, and financial accounting of funds; and requiring
quarterly reports.
Language is included under ``Federal Payment for Emergency
Planning and Security Costs in the District of Columbia'',
providing that the amount appropriated shall remain available
until expended for providing public safety at events, including
support of the United States Secret Service, and to respond to
terrorist threats or attacks.
Language is included under ``Federal Payment to the
District of Columbia Courts'', authorizing official reception
and representation expenses; specifying certain amounts for
specific purposes; providing all amounts under this heading
shall be apportioned quarterly by the Office of Management and
Budget and obligated and expended in the same manner as funds
appropriated for salaries and expenses of other Federal
agencies; allowing funds made available for capital
improvements to remain available until September 30, 2018;
providing for the reallocation of funds and providing for
certain payments.
Language is included under ``Defender Services in the
District of Columbia Courts'', providing that the amount
appropriated shall remain available until expended; specifying
who shall administer these funds; and providing that all
amounts under this heading shall be apportioned quarterly by
the Office of Management and Budget and obligated and expended
in the same manner as funds appropriated for salaries and
expenses of other Federal agencies; and that not more than
$20,000,000 in unobligated funds provided in this account may
be transferred to and merged with funds made available under
the heading ``Federal Payment to District of Columbia Courts''.
Language is included under ``Federal Payment to the Court
Services and Offender Supervision Agency for the District of
Columbia'', allowing the transfer and hire of motor vehicles;
authorizing official reception and representation expenses;
specifying certain amounts for specific purposes and programs;
allowing $3,159,000 to remain available until September 30,
2018; providing that all amounts under this heading shall be
apportioned quarterly by the Office of Management and Budget
and obligated and expended in the same manner as funds
appropriated for salaries and expenses of other Federal
agencies; allowing the use of programmatic incentives for
offenders and defendants who successfully meet the terms of
their supervision; authorizing the Director to accept, solicit
and use on the behalf of the Agency any monetary or nonmonetary
gift to support offenders and defendants successfully meeting
terms of supervision; specifying for recording the acceptance
of such gifts; and authorizing the acceptance and use of space
and services on a cost reimbursable basis from the District of
Columbia Government.
Language is included under ``Federal Payment to District of
Columbia Public Defender Service'', allowing the transfer and
hire of motor vehicles; providing that all amounts under this
heading shall be apportioned quarterly by the Office of
Management and Budget and obligated and expended in the same
manner as funds appropriated for salaries and expenses of other
Federal agencies; and authorizing the acceptance and use of
voluntary and uncompensated services to facilitate the work of
the District of Columbia Public Defender Service.
Language is included under ``Federal Payment to the
Criminal Justice Coordinating Council'', specifying that the
amount appropriated shall remain available until expended to
support initiatives related to the coordination of Federal and
local criminal justice resources.
Language is included under ``Federal Payment for Judicial
Commissions'', specifying certain amounts for certain
commissions and allowing for appropriations to remain available
until September 30, 2018.
Language is included under ``Federal Payment for School
Improvement'', allowing for appropriations to remain available
until expended for payments authorized under the Scholarship
for Opportunity and Results Act.
Language is included under ``Federal Payment for the
District of Columbia National Guard'', providing funds for the
National Guard Retention and College Access Program to remain
available until expended.
Language is included under ``Federal Payment for Testing
and Treatment of HIV/AIDS'' for testing and treatment.
Language is included under ``District of Columbia Funds'':
(1) providing funds as proposed in the Fiscal Year 2018 Budget
Request Act of 2017 submitted to Congress by the District of
Columbia; (2) limits the amount provided in this Act for the
District of Columbia to the amount of the proposed budget or
the sum of total revenues; (3) providing conditions for
increasing the amount provided; and (4) directing the Chief
Financial Officer to ensure the District of Columbia meets all
requirements, but prohibits the reprogramming of capital
projects.
Title V--Independent Agencies
Language is included for the Administrative Conference of
the United States, ``Salaries and Expenses'', providing for
expenses, including official reception and representation and
allowing funds to be available until September 30, 2019.
Language is included for the Consumer Product Safety
Commission, ``Salaries and Expenses'', that provides funds for
expenses, the hire of motor vehicles, services as authorized by
5 U.S.C. 3109 (with a limitation on rates for individuals), and
official reception and representation expenses. Language is
included that provides funds for the Virginia Graeme Baker Pool
and Spa Safety Act grant program.
The bill includes the following administrative provisions
under the Consumer Product Safety Commission:
Section 501. Language is included prohibiting funds to
finalize, implement, or enforce the proposed rule on
recreational off-highway vehicles until a study is completed by
the National Academy of Sciences.
Section 502. Language is included prohibiting funds to
finalize any rule by the Consumer Product Safety Commission
relating to blade-contact injuries on table saws.
Language is included for the Election Assistance
Commission, ``Salaries and Expenses'', that provides necessary
funds to carry out the Help America Vote Act of 2002.
Language is included under the Federal Communications
Commission, ``Salaries and Expenses'', permitting funds for
uniforms and allowances therefor, official reception and
representation expenses, purchase and hire of motor vehicles,
special counsel fees, and services as authorized by 5 U.S.C.
3109. Language provides for the assessment and collection of
offsetting collections, authorizes retention of such
collections, and provides that they remain available until
expended. Language prohibits the availability for obligation of
excess collections. Language limits the use of proceeds from
the use of a competitive bidding system. Language provides
funding for the Office of Inspector General.
Language is included for the Federal Deposit Insurance
Corporation, ``Office of Inspector General'', that provides for
the funds to be derived from the Deposit Insurance Fund, and
the FSLIC Resolution Fund.
Language is included for the Federal Election Commission,
``Salaries and Expenses'', providing for expenses including
official reception and representation.
Language is included for the Federal Labor Relations
Authority, ``Salaries and Expenses'', that provides funds for
services authorized by 5 U.S.C. 3109, the hire of experts and
consultants, hire of motor vehicles, reception and
representation expenses and the rental of conference rooms;
authorizes travel payments to public members of the Federal
Service Impasses Panel; and allows for fees collected to be
transferred to and merged with the appropriation.
Language is included for the Federal Trade Commission,
``Salaries and Expenses'', permitting funds for uniforms and
allowances therefor, services authorized by 5 U.S.C. 3109,
official reception and representation expenses, hire of motor
vehicles, and contract for collection services. Language
provides for the crediting and retention of certain fees.
Language also prohibits funds from being used to implement
subsection (e)(2)(B) of section 43 of the Federal Deposit
Insurance Act.
Language is included for the General Services
Administration, ``Federal Buildings Fund'' that allows for
revenues and collections to be spent from the Fund; specifies
the conditions under which funds made available can be used;
limits the availability of funds for certain purposes;
specifies funding for construction and acquisition projects;
specifies funding for special emphasis programs; provides for
certain transfers of funds; requires spending plans; and
prohibits excess funds from being available.
Language is included for the General Services
Administration, ``Government-wide Policy'', that provides funds
for policy and evaluation activities associated with the
management of real and personal property assets and certain
administrative services; support responsibilities relating to
acquisition, telecommunications, motor vehicles, information
technology management, and related technology activities; and
services authorized by 5 U.S.C. 3109.
Language is included for the General Services
Administration, ``Operating Expenses'' that provides funds for
Government-wide activities associated with personal and real
property disposal, and services authorized by 5 U.S.C. 3109;
for expenses for activities associated with agency-wide policy
direction and management; for necessary expenses of the
Civilian Board of Contract Appeals; for official reception and
representation; designates funds for certain purposes; and
provides for certain transfers.
Language is included for the General Services
Administration, ``Office of Inspector General'' that makes
certain funds available until expended and provides for awards
in recognition of efforts that enhance the office. Language is
included for services authorized by 5 U.S.C. 3109 and
designates funds for information and detection of fraud.
Language is included for the General Services
Administration, ``Allowances and Office Staff for Former
Presidents'', for carrying out the provisions of 3 U.S.C. 102
note and Public Law 95-138.
Language is included for the General Services
Administration, ``Federal Citizen Services Fund'', that
provides funds for the Office of Citizen Services and other
information technology costs. Language is included allowing for
certain transfers to the Federal Citizen Services Fund.
Language is also included for the ``Federal Citizen Services
Fund'' that authorizes funds to be deposited in the Fund and
limits the availability of funds in the Fund.
Language is included for the General Services
Administration, ``Asset Proceeds and Space Management Fund''
for the purposes of carrying out actions pursuant to
recommendations of the Public Buildings Reform Board focusing
on civilian real property.
Language is included for the General Services
Administration, ``Environmental Review Improvement Fund'' for
the authorized activities of the Environmental Review
Improvement Fund and the Federal Permitting Improvement
Steering Council.
In addition, the bill includes the following administrative
provisions under the General Services Administration (GSA):
Section 510. Language is included providing authority for
the use of funds for the hire of motor vehicles.
Section 511. Language is included providing that funds made
available for activities of the Federal Buildings Fund may be
transferred between appropriations with advance approval of the
Congress to apply to funds provided in prior appropriations
Acts.
Section 512. Language is included requiring funds proposed
for developing courthouse construction requests to meet
appropriate standards and the priorities of the Judicial
Conference.
Section 513. Language is included providing that no funds
may be used to increase the amount of occupiable square feet,
provide cleaning services, security enhancements, or any other
service usually provided, to any agency which does not pay the
assessed rent.
Section 514. Language is included permitting GSA to pay
small claims (up to $250,000) made against the Federal
Government.
Section 515. Language is included requiring the
Administrator to ensure that the delineated area of procurement
for all lease agreements is identical to the delineated area
included in the prospectus unless prior notice is given to the
Committees.
Section 516. Language is included requiring a spend plan
for certain accounts and programs.
Section 517. Language is included establishing the Asset
Proceeds Space Management Fund as a fund separate from the
Federal Buildings Fund.
Section 518. Language is included rescinding prior year
unobligated balances from the FBI Headquarters Consolidation
project funded in Public Law 115-31.
Section 519. Language is included requiring GSA to post
certain draft environmental impact assessments on the GSA
website.
Language is included for the Harry S Truman Scholarship
Foundation as established by section 10 of Public Law 93-642.
Language is included for the Merit Systems Protection
Board, ``Salaries and Expenses'', that provides funds for
services authorized by 5 U.S.C. 3109, rental of conference
rooms, hire of passenger motor vehicles, direct procurement of
survey printing, official reception and representation
expenses, specifies the period of availability for certain
funds, provides for administration expenses to adjudicate
retirement appeals, and provides for the transfer of some
funds.
Language is included for the National Archives and Records
Administration, ``Operating Expenses'', that provides funds for
uniforms or allowances therefor, as authorized by 5 U.S.C. 5901
et seq., including maintenance, repairs, and cleaning, the hire
of passenger motor vehicles, activities of the Public Interest
Declassification Board, the review and declassification of
documents, and the operations and maintenance of the electronic
records archive.
Language is included for the National Archives and Records
Administration, ``Office of Inspector General'', that provides
funds for the hire of motor vehicles.
Language is included for the National Archives and Records
Administration, ``Repairs and Restoration'', that provides
funds for the repair, alteration, improvement, and provision of
adequate storage; and provides that funds remain available
until expended.
Language is included under the National Archives and
Records Administration, ``National Historical Publications and
Records Commission Grants Program'', that provides funds for
allocations and grants for historical publications and records;
and provides that funds remain available until expended.
Language is included under the National Credit Union
Administration, ``Community Development Credit Union Revolving
Loan Fund'', that provides funds for technical assistance and
extends the availability of funds.
Language is included under the Office of Government Ethics,
``Salaries and Expenses'', that provides funds for services
authorized by 5 U.S.C. 3109, rental of conference rooms, hire
of passenger motor vehicles, and official reception and
representation expenses.
Language is included under the Office of Personnel
Management, ``Salaries and Expenses'', that provides funds for
services authorized by 5 U.S.C. 3109, medical examinations for
veterans, rental of conference rooms, hire of passenger motor
vehicles, official reception and representation expenses,
advances for reimbursements, payment of per diem or subsistence
allowances, and the transfer of administrative expenses;
directs that provisions shall not affect other authorities;
prohibits funds for the Legal Examining Unit; and authorizes
the acceptance of donations under certain conditions. Language
is also included specifying the period of availability for
certain funds and requiring a report on information technology.
Language is included for the Office of Personnel
Management, Office of Inspector General, ``Salaries and
Expenses'', that provides funds for services authorized by 5
U.S.C. 3109, hire of passenger motor vehicles, rental of
conference rooms, and a transfer for administrative expenses.
Language is included for the Office of Special Counsel,
``Salaries and Expenses'', that provides funds for services
authorized by 5 U.S.C. 3109, payment of fees and expenses for
witnesses, rental of conference rooms, and the hire of
passenger motor vehicles.
Language is included for the Postal Regulatory Commission,
``Salaries and Expenses'', that provides for transfer of funds
from the Postal Service Fund.
Language is included for the Privacy and Civil Liberties
Oversight Board, ``Salaries and Expenses'', that provides funds
authorized by section 1061 of 42 U.S.C. 2000ee.
Language is included for the Public Buildings Reform Board,
``Salaries and Expenses, that provides funds for carrying out
the Federal Assets Sale and Transfer Act of 2016 (P.L. 114-
287).
Language is included for the Securities and Exchange
Commission, ``Salaries and Expenses'', that provides for rental
of space, services, reception and representation expenses, a
permanent secretariat for the International Organization of
Securities Commissions, and consultations and meetings hosted
by the Commission. Language is included designating funds for
information technology initiatives and the economics division.
Language is included that provides for the crediting of
offsetting collections. Language provides for the assessment
and collection of offsetting collections, authorizes retention
of such collections, and provides that they remain available
until expended.
Language is included for the Selective Service System,
``Salaries and Expenses'', that provides funds for attendance
of meetings, training, hire of passenger motor vehicles,
services authorized by 5 U.S.C. 3109, and official reception
and representation expenses; authorizes certain exemptions
under certain conditions; and prohibits funds used in
connection with the induction of any person into the Armed
Forces of the United States.
Language is included for the Small Business Administration,
``Salaries and Expenses'', that provides for hire of motor
vehicles and official reception and representation expenses.
Language is also included to provide authority to charge fees
and credit such fees to the account without further
appropriation. Language is also included designating funds for
lender oversight. Language is also included for the Loan
Modernization and Accounting System and co-sponsor activities.
Language is included for the Small Business Administration,
``Entrepreneurial Development Programs'', that provides for
supporting entrepreneurial and small business development grant
programs. Language is included extending the availability of
funds.
Language is included for the Small Business Administration,
``Office of Inspector General'', that provides funds to carry
out the provisions of the Inspector General Act of 1978.
Language is included for the Small Business Administration,
``Office of Advocacy'', that provides funds to carry out the
provisions of the Independent Office of Advocacy Act of 2003
and the Regulatory Flexibility Act of 1980 and allows funds to
remain available until expended.
Language is included for the Small Business Administration,
``Business Loans Program Account'', limiting commitments for
certain guaranteed loan programs and for providing for the cost
of direct loans and guaranteed loans. Language is also included
authorizing the transfer of funds to ``Salaries and Expenses''
for administrative expenses.
Language is included for the Small Business Administration
``Disaster Loan Program Account'', that provides for
administrative expenses, the transfer of funds to the ``Office
of Inspector General'' and to ``Salaries and Expenses'' and
allows funds to remain available until expended.
Section 520 allows for the transfer of funds between Small
Business Administration appropriations.
Section 521 rescinds prior year unobligated balances.
Section 522 amends requirements for the Microloan program.
Language is included for the United States Postal Service,
``Payment to the Postal Service Fund'', that provides funds for
revenue forgone; stipulates that mail for overseas voting and
mail for the blind is free; provides that 6-day delivery shall
continue at not less than the 1983 level; prohibits funds in
this Act from being used to charge a fee to a child support
enforcement agency seeking the address of a postal customer;
prohibits funds from being used to consolidate or close small
rural and other small post offices; and requires the Postal
Service to maintain and comply with service standards for First
Class Mail and periodicals effective on July 1, 2012.
Language is included for the United States Postal Service,
``Office of Inspector General'', that provides for transfer
from the Postal Service Fund.
Language is included for the United States Tax Court,
``Salaries and Expenses'', that provides funds for contract
reporting and services authorized by 5 U.S.C. 3109, and that
travel expenses of the judges shall be paid upon the written
certificate of the judge.
Title VI--General Provisions--This Act
In addition, the bill provides the following provisions
under this title:
Section 601. Language is included prohibiting pay and other
expenses for non-Federal parties in regulatory or adjudicatory
proceedings funded in this Act.
Section 602. Language is included prohibiting obligations
beyond the current fiscal year and prohibits transfers of funds
unless expressly so provided herein.
Section 603. Language is included limiting procurement
contracts for consulting service expenditures to contracts that
are matters of public record and available for public
inspection.
Section 604. Language is included prohibiting transfer of
funds in this Act without express authority.
Section 605. Language is included prohibiting the use of
funds to engage in activities that would prohibit the
enforcement of section 307 of the 1930 Tariff Act.
Section 606. Language is included concerning compliance
with the Buy American Act.
Section 607. Language is included prohibiting the use of
funds by any person or entity convicted of violating the Buy
American Act.
Section 608. Language is included specifying reprogramming
procedures. The provision requires that agencies or entities
funded by the Act notify the Committee and obtain prior
approval from the Committee for any reprogramming of funds
that: (1) creates a new program; (2) eliminates a program,
project, or activity; (3) increases funds or personnel for any
program, project, or activity for which funds have been denied
or restricted by the Congress; (4) proposes to use funds
directed for a specific activity by either the House or Senate
Committees on Appropriations for a different purpose; (5)
augments existing programs, projects, or activities in excess
of $5,000,000 or 10 percent, whichever is less; (6) reduces
existing programs, projects, or activities by $5,000,000 or 10
percent, whichever is less; or (7) reorganizes offices,
programs, or activities. The provision also directs the
agencies funded by this Act to submit operating plans for the
Committee's review within 60 days of the bill's enactment.
Section 609. Language is included providing that fifty
percent of unobligated balances may remain available for
certain purposes.
Section 610. Language is included prohibiting funding for
the Executive Office of the President to request either a
Federal Bureau of Investigation background investigation or
Internal Revenue Service determination with respect to section
501(a) of the Internal Revenue Code of 1986, except with the
express consent of the individual involved in an investigation
or in extraordinary circumstances involving national security.
Section 611. Language is included regarding cost accounting
standards for contracts under the Federal Employee Health
Benefits Program.
Section 612. Language is included regarding non-foreign
area cost of living allowances.
Section 613. Language is included prohibiting the
expenditure of funds for abortion under the Federal Employees
Health Benefits program.
Section 614. Language is included making exceptions to the
preceding provision where the life of the mother is in danger
or the pregnancy is a result of an act of rape or incest.
Section 615. Language is included waiving restrictions on
the purchase of non-domestic articles, materials, and supplies
in the case of acquisition of information technology by the
Federal government.
Section 616. Language is included prohibiting officers or
employees of any regulatory agency or commission funded by this
Act from accepting travel payments or reimbursements from a
person or entity regulated by such agency or commission.
Section 617. Language is included permitting the Securities
and Exchange Commission and Commodities Futures Trading
Commission to fund a joint advisory committee to advise on
emerging regulatory issues, notwithstanding Section 708 of this
Act.
Section 618. Language is included requiring certain
agencies in this Act to consult with the General Services
Administration before seeking new office space or making
alterations to existing office space.
Section 619. Language is included providing for several
appropriated mandatory accounts. These are accounts where
authorizing language requires the payment of funds. The
Congressional Budget Office estimates the cost for the
following programs addressed in this provision: $450,000 for
Compensation of the President including $50,000 for expenses,
$167,000,000 for the Judicial Retirement Funds (Judicial
Officers' Retirement Fund, Judicial Survivors' Annuities Fund,
and the United States Court of Federal Claims Judges'
Retirement Fund), $13,202,000,000 for the Government Payment
for Annuitants, Employee Health Benefits, $48,000,000 for the
Government Payment for Annuitants, Employee Life Insurance, and
$8,365,000,000 for the Payment to the Civil Service Retirement
and Disability Fund.
Section 620. Language is included prohibiting funds for the
Federal Trade Commission to complete or publish the study,
recommendations, or report prepared by the Interagency Working
Group on Food Marketed to Children.
Section 621. Language is included preventing conflicts of
interest by prohibiting contractor security clearance related
background investigators from undertaking final Federal reviews
of their own work.
Section 622. Language is included requiring that the head
of any executive branch agency ensure that the Chief
Information Officer (CIO) has authority to participate in the
budget planning process and approval of the information
technology (IT) budget.
Section 623. Language is included prohibiting funds in
contravention of the Federal Records Act.
Section 624. Language is included prohibiting agencies from
requiring Internet Service Providers (ISPs) to disclose
electronic communications information in a manner that violates
the Fourth Amendment.
Section 625. Language is included prohibiting funds to be
used to deny inspectors general access to records.
Section 626. Language is included prohibiting any funds
made available in this Act from being used to establish a
computer network unless such network blocks the viewing,
downloading, and exchanging of pornography.
Section 627. Language is included to clarify the period of
time offered to the victims of the OPM security breaches that
occurred in 2015.
Section 628. Language is included permanently rescinding
the unobligated balance in the Securities and Exchange
Commission Reserve Fund established by section 991 of the Dodd-
Frank Wall Street Reform and Consumer Protection Act (Public
Law 111-203).
Section 629. Language is included prohibiting funds for the
Securities and Exchange Commission to require the disclosure of
political contributions to tax exempt organizations, or dues
paid to trade associations.
Section 630. Language is included repealing the Federal
Election Commission's prior approval requirement for corporate
member trade association PACs.
Section 631. Language is included prohibiting funds to pay
for an abortion or the administrative expenses in connection
with a multi-State qualified health plan offered under a
contract under section 1334 of the Patient Protection and
Affordable Care Act which provides any benefits or coverage for
abortions, except for endangerment of the life of the mother,
rape or incest.
Section 632. Language is included prohibiting funds to
require public electronic communications providers or remote
computing services to disclose the contents of a wire or
electronic communication unless required by a court warrant.
Section 633. The Committee includes a new provision which
defines a pyramid promotional scheme, and limits funds to
enforcement actions under the definition.
Title VII--General Provisions--Government-Wide
In addition, the bill provides the following provisions
under this title:
Section 701. Language is included requiring agencies to
administer a policy designed to ensure that all of its
workplaces are free from the illegal use of controlled
substances.
Section 702. Language is included establishing price
limitations on vehicles to be purchased by the Federal
Government with certain exceptions.
Section 703. Language is included allowing funds made
available to agencies for travel to also be used for quarters
allowances and cost-of-living allowances.
Section 704. Language is included prohibiting the
employment of noncitizens with certain exceptions.
Section 705. Language is included giving agencies the
authority to pay General Services Administration bills for
space renovation and other services.
Section 706. Language is included allowing agencies to
finance the costs of recycling and waste prevention programs
with proceeds from the sale of materials recovered through such
programs.
Section 707. Language is included providing that funds made
available to corporations and agencies subject to 31 U.S.C. 91
may pay rent and other service costs in the District of
Columbia.
Section 708. Language is included prohibiting interagency
financing of groups absent prior statutory approval.
Section 709. Language is included prohibiting the use of
funds for enforcing regulations disapproved in accordance with
the applicable law of the U.S.
Section 710. Language is included limiting the amount of
funds that can be used for redecoration of offices under
certain circumstances.
Section 711. Language is included allowing for interagency
funding of national security and emergency telecommunications
initiatives.
Section 712. Language is included requiring agencies to
certify that a Schedule C appointment was not created solely or
primarily to detail the employee to the White House.
Section 713. Language is included prohibiting the payment
of any employee who prohibits, threatens or prevents another
employee from communicating with Congress.
Section 714. Language is included prohibiting Federal
training not directly related to the performance of official
duties.
Section 715. Language is included prohibiting, other than
for normal and recognized executive-legislative relationships,
propaganda, publicity and lobbying by executive agency
personnel in support or defeat of legislative initiatives.
Section 716. Language is included prohibiting any Federal
agency from disclosing an employee's home address to any labor
organization, absent employee authorization or court order.
Section 717. Language is included prohibiting funds to be
used to provide non-public information such as mailing,
telephone, or electronic mailing lists to any person or
organization outside the government without the approval of the
Committees on Appropriations.
Section 718. Language is included prohibiting the use of
funds for propaganda and publicity purposes not authorized by
Congress.
Section 719. Language is included directing agency
employees to use official time in an honest effort to perform
official duties.
Section 720. Language is included allowing the use of funds
to finance an appropriate share of the Federal Accounting
Standards Advisory Board.
Section 721. Language is included allowing the transfer of
funds to the General Services Administration to finance an
appropriate share of various government-wide boards and
councils and for Federal Government Priority Goals under
certain conditions.
Section 722. Language is included permitting breast feeding
in a Federal building or on Federal property if the woman and
child are authorized to be there.
Section 723. Language is included permitting interagency
funding of the National Science and Technology Council and
provides for a report on the budget and resources of the
National Science and Technology Council.
Section 724. Language is included requiring documents
involving the distribution of Federal funds to indicate the
agency providing the funds and the amount provided.
Section 725. Language is included prohibiting the use of
funds to monitor personal access or use of Internet sites or to
collect, review, or obtain any personally identifiable
information relating to access to or use of an Internet site.
Section 726. Language is included requiring health plans
participating in the Federal Employees Health Benefits Program
to provide contraceptive coverage and provides exemptions to
certain religious plans.
Section 727. Language is included supporting strict
adherence to anti-doping activities.
Section 728. Language is included allowing funds for
official travel to be used by departments and agencies, if
consistent with OMB Circular A-126, to participate in the
fractional aircraft ownership pilot program.
Section 729. Language is included restricting the use of
funds for Federal law enforcement training facilities.
Section 730. Language is included prohibiting Executive
Branch agencies from creating prepackaged news stories that are
broadcast or distributed in the United States unless the story
includes a clear notification within the text or audio of that
news story that the prepackaged news story was prepared or
funded by that executive branch agency.
Section 731. Language is included prohibiting use of funds
in contravention of section 552a of title 5, United States Code
(the Privacy Act) and regulations implementing that section.
Section 732. Language is included prohibiting funds from
being used for any Federal Government contract with any foreign
incorporated entity which is treated as an inverted domestic
corporation.
Section 733. Language is included requiring agencies to pay
a fee to the Office of Personnel Management for processing
retirement of employees who separate under Voluntary Early
Retirement Authority or who receive Voluntary Separation
Incentive payments.
Section 734. Language is included prohibiting funds to
require any entity submitting an offer for a Federal contract
or participating in an acquisition to disclose political
contributions.
Section 735. Language is included prohibiting funds for the
painting of a portrait of an employee of the Federal government
including the President, the Vice President, a Member of
Congress, the head of an executive branch agency, or the head
of an office of the legislative branch.
Section 736. Language is included limiting the pay
increases of certain prevailing rate employees.
Section 737. Language is included requiring agencies to
submit reports to Inspectors General concerning expenditures
for agency conferences.
Section 738. Language is included prohibiting funds to be
used to increase, eliminate, or reduce funding for a program or
project unless such change is made pursuant to reprogramming or
transfer provisions.
Section 739. Language is included prohibiting agencies from
using funds to implement regulations changing the competitive
areas under reductions-in-force for Federal employees.
Section 740. Language is included ensuring contractors are
not prevented from reporting waste, fraud, or abuse by signing
confidentiality agreements that would prohibit such disclosure.
Section 741. Language is included prohibiting the
expenditure of funds for the implementation of certain
nondisclosure agreements unless certain provisions are included
in the agreements.
Section 742. Language is included prohibiting funds to any
corporation with certain unpaid Federal tax liabilities unless
an agency has considered suspension or debarment of the
corporation and made a determination that further action is not
necessary to protect the interests of the Government.
Section 743. Language is included prohibiting funds to any
corporation that was convicted of a felony criminal violation
within the preceding 24 months unless an agency has considered
suspension or debarment of the corporation and made a
determination that further action is not necessary to protect
the interests of the Government.
Section 744. Language is included requiring the Bureau of
Consumer Financial Protection to notify certain Committees of
requests for a transfer of funds from the Federal Reserve
System and to post any such notifications on the Bureau's
website.
Section 745. Language is included prohibiting funds from
implementing, administering, carrying out, modifying, revising,
or enforcing Executive Order 13690.
Section 746. Language is included allowing those
individuals authorized to be employed under the Deferred Action
for Childhood Arrivals program to be eligible for employment by
the federal government.
Section 747. Language is included concerning the non-
application of these general provisions to title IV and to
title VIII.
Title VIII--General Provisions--District of Columbia
In addition, the bill provides the following provisions
under this title:
Section 801. Language is included that appropriates funds
for refunding overpayments of taxes collected and for paying
settlements and judgments against the District of Columbia
government.
Section 802. Language is included prohibiting the use of
Federal funds for publicity or propaganda purposes.
Section 803. Language is included establishing
reprogramming procedures for Federal and local funds.
Section 804. Language is included prohibiting the use of
Federal funds to provide salaries or other costs associated
with the offices of United States Senator or Representative.
Section 805. Language is included restricting the use of
official vehicles to official duties.
Section 806. Language is included prohibiting the use of
Federal funds for any petition drive or civil action which
seeks to require Congress to provide for voting representation
in Congress for the District of Columbia.
Section 807. Language is included prohibiting the use of
Federal funds for needle exchange programs.
Section 808. Language is included providing for a
``conscience clause'' on legislation that pertains to
contraceptive coverage by health insurance plans.
Section 809. Language is included prohibiting the use of
Federal funds to legalize or reduce penalties associated with
the possession, use, or distribution on any schedule I
substance under the Controlled Substances Act or any
tetrahydrocannabinols derivative.
Language is also included prohibiting local and Federal
funds to legalize or reduce penalties associated with the
possession, use, or distribution of any schedule I substance
under the Controlled Substance Act or any tetrahydrocannabinols
derivative for recreational use.
Section 810. Language is included prohibiting the use of
funds for abortion except in the cases of rape or incest or if
necessary to save the life of the mother.
Section 811. Language is included requiring the Chief
Financial Officer (CFO) to submit a revised operating budget
for all agencies in the D.C. government, no later than 30
calendar days after the enactment of this Act that realigns
budgeted data with anticipated actual expenditures.
Section 812. Language is included requiring the CFO to
submit a revised operating budget for D.C. Public Schools, no
later than 30 calendar days after the enactment of this Act,
that realigns school budgets to actual school enrollment.
Section 813. Language is included allowing the transfer of
local funds and capital and enterprise funds.
Section 814. Language is included prohibiting the
obligation of Federal funds beyond the current fiscal year and
transfers of funds unless expressly provided herein.
Section 815. Language is included providing that not to
exceed 50 percent of unobligated balances from Federal
appropriations for salaries and expenses may remain available
for certain purposes.
Section 816. Language is included appropriating local funds
during fiscal year 2019 if there is an absence of a continuing
resolution or regular appropriation for the District of
Columbia. Funds are provided under the same authorities and
conditions and in the same manner and extent as provided for in
fiscal year 2018.
Section 817. Language is included repealing the Local
Budget Autonomy Amendment Act of 2012.
Section 818. Language is included prohibiting funds to
enact any act, resolution, rule, regulation, guidance, or other
law to permit any person to carry out any activity, or to
reduce the penalties imposed with respect to any activity to
which subsection (a) of section 3 of the Assisted Suicide
Funding Restriction Act of 1997 applies, and repeals with Death
with Dignity Act of 2016.
Section 819. Language is included limiting references to
``this Act'' as referring to only this title and title IV.
Title IX--Other Matters
Language is included from H.R. 10, the Financial CHOICE
Act, as passed by the House of Representatives on June 8, 2017.
Title X--Financial Institution Bankruptcy
Language is included from H.R. 1667, the Financial
Institution Bankruptcy Act of 2017, as passed by the House of
Representatives on April 5, 2017.
Appropriations Not Authorized by Law
Pursuant to clause 3(f)(1)(B) of rule XIII of the Rules of
the House of Representatives, the following table lists the
appropriations in the accompanying bill which are not
authorized by law for the period concerned:
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Appropriation
Last Year of Authorization in Last Year Appropriations
Account Authorization Level of in this bill
Authorization
----------------------------------------------------------------------------------------------------------------
Title I--Department of the Treasury
Departmental Offices........................ n/a n/a n/a 201,751
Office of Terrorism and Financial n/a n/a n/a 123,000
Intelligence...............................
Cybersecurity Enhancement Account........... n/a n/a n/a 27,264
Department-Wide Systems and Capital 1997 .............. .............. 3,077
Investments Program........................
Office of Inspector General................. .............. .............. .............. 34,112
Treasury Inspector General for Tax n/a n/a n/a 165,113
Administration.............................
Special Inspector General for the Troubles .............. .............. .............. 37,044
Asset Relief Program.......................
Financial Crimes Enforcement Network........ 2013 100,419 111,788 115,003
Bureau of the Fiscal Service................ n/a n/a n/a 330,837
Alcohol and Trade Tax and Trade Bureau...... n/a n/a n/a 111,439
Community Development and Financial 1998 111,000 45,000 190,000
Institutions Fund..........................
Internal Revenue Service:
Taxpayer Services....................... n/a n/a n/a 2,315,754
Enforcement............................. n/a n/a n/a 4,810,000
Operations Support...................... n/a n/a n/a 3,850,189
Business Systems Modernization.......... n/a n/a n/a 110,000
Title II--Executive Office of the President
Office of Managment and Budget Policy....... 2003 various 61,988 100,000
Salaries and Expenses................... 2010 n/a 29,575 18,400
High Intensity Drug Trafficking Areas... 2011 280,000 238,522 254,000
Other Federal Drug Control Programs..... various various 105,550 108,843
Information Technology Oversight and n/a n/a n/a 20,000
Reform.................................
Title IV--District of Columbia
Federal Payment for Resident Tuition Support 2012 such sums 30,000 30,000
Federal Payment for the Judicial Commissions n/a n/a n/a 565
Federal Payment for School Improvement...... 2016 60,000 45,000 45,000
Federal Payment for the DC National Guard... n/a n/a n/a 435
Federal Payment for Testing and Treatment of n/a n/a n/a 5,000
HIV/AIDS...................................
Title V--Independent Agencies
Administrative Conference of the United 2011 3,200 2,750 3,100
States.....................................
Consumer Safety Product Commission.......... 2014 136,409 118,000 123,000
Election Assistance Commission.............. 2005 n/a 13,888 7,000
Federal Communications Commission........... 1991 such sums 115,794 322,035
Federal Election Commission................. 1981 9,400 9,662 71,250
Federal Trade Commission.................... 1998 111,000 106,500 306,317
General Services Administration:
Government-wide Policy.................. n/a n/a n/a 53,499
Operating Expenses...................... n/a n/a n/a 46,645
Federal Citizen Services Fund........... n/a n/a n/a 53,741
Merit Systems Protection Board.......... 2007 such sums 29,110 46,835
National Historical Public Records 2009 10,000 11,250 4,000
Commission.............................
Office of Government Ethics............. 2007 such sums 11,148 16,439
Office of Special Counsel............... 2007 such sums 15,524 24,750
Securities and Exchange Commission...... 2015 2,250,000 1,500,000 1,896,507
----------------------------------------------------------------------------------------------------------------
Comparison With the Budget Resolution
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and Section 308(a)(1)(A) of the
Congressional Budget Act of 1974, the following table compares
the levels of new budget authority provided in the bill with
the appropriate allocations under section 302(b) of the Budget
Act:
BUDGETARY IMPACT OF FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2018 (AS ORDER REPORTED ON 14
JULY 2017)--PREPARED IN CONSULTATION WITH THE CONGRESSIONAL BUDGET OFFICE PURSUANT TO SEC. 308(a), PUBLIC LAW 93-
344, AS AMENDED
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
302(b) Allocation This Bill
---------------------------------------------------
Budget Budget
Authority Outlays Authority Outlays
----------------------------------------------------------------------------------------------------------------
Comparison of amounts in the bill with Committee allocations
to its subcommittees: Subcommittee on Financial Services
Mandatory............................................... ........... ........... 22,388 \1\22,380
Discretionary........................................... ........... ........... 20,231 22,487
General Purpose..................................... n.a. n.a. ........... ...........
Overseas Contingency................................ n.a. n.a. ........... ...........
----------------------------------------------------------------------------------------------------------------
\1\Includes outlays from prior-year budget authority.
n.a.: not applicable.
Five-Year Outlay Projections
Pursuant to section 308(a)(1)(B) of the Congressional
Budget Act of 1974, the following table contains five-year
projections prepared by the Congressional Budget Office of
outlays associated with the budget authority provided in the
accompanying bill, as provided to the Committee by the
Congressional Budget Office:
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
302(b) Allocation This Bill
---------------------------------------------------
Budget Budget
Authority Outlays Authority Outlays
----------------------------------------------------------------------------------------------------------------
Projection of outlays associated with the recommendation:
2018.................................................... n.a. n.a. n.a. \1\39,053
2019.................................................... n.a. n.a. n.a. 1,758
2020.................................................... n.a. n.a. n.a. -1,623
2021.................................................... n.a. n.a. n.a. -1,890
2022 and future years................................... n.a. n.a. n.a. -12,294
----------------------------------------------------------------------------------------------------------------
\1\Excludes outlays from prior-year budget authority.
n.a.: not applicable.
Assistance to State and Local Governments
Pursuant to section 308(a)(1)(C) of the Congressional
Budget Act of 1974, the amounts of financial assistance to
State and local governments is as follows:
----------------------------------------------------------------------------------------------------------------
302(b) Allocation This Bill
---------------------------------------------------
Budget Budget
Authority Outlays Authority Outlays
----------------------------------------------------------------------------------------------------------------
Financial assistance to State and local governments for 2018 n.a. n.a. 663 \1\160
----------------------------------------------------------------------------------------------------------------
\1\Excludes outlays from prior-year budget authority.
n.a.: not applicable.
Program Duplication
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Directed Rule Making
The bill does not direct any rule making.
Comparative Statement of New Budget (Obligational) Authority
The following table provides a detailed summary, for each
Department and agency, comparing the amounts recommended in the
bill with amounts enacted for fiscal year 2017 and budget
estimates presented for fiscal year 2018.
Compliance With Rule XIII, Cl. 3(e) (Ramseyer Rule)
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
Compliance With Rule XIII, Cl. 3(e) (Ramseyer Rule)
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
JUDICIAL IMPROVEMENTS ACT OF 1990
* * * * * * *
TITLE II--FEDERAL JUDGESHIPS
* * * * * * *
SEC. 203. DISTRICT JUDGES FOR THE DISTRICT COURTS.
(a) In General.--The President shall appoint, by and with the
advice and consent of the Senate--
(1) 1 additional district judge for the western
district of Arkansas;
(2) 2 additional district judges for the northern
district of California;
(3) 5 additional district judges for the central
district of California;
(4) 1 additional district judge for the southern
district of California;
(5) 2 additional district judges for the district of
Connecticut;
(6) 2 additional district judges for the middle
district of Florida;
(7) 1 additional district judge for the northern
district of Florida;
(8) 1 additional district judge for the southern
district of Florida;
(9) 1 additional district judge for the middle
district of Georgia;
(10) 1 additional district judge for the northern
district of Illinois;
(11) 1 additional district judge for the southern
district of Iowa;
(12) 1 additional district judge for the western
district of Louisiana;
(13) 1 additional district judge for the district of
Maine;
(14) 1 additional district judge for the district of
Massachusetts;
(15) 1 additional district judge for the southern
district of Mississippi;
(16) 1 additional district judge for the eastern
district of Missouri;
(17) 1 additional district judge for the district of
New Hampshire;
(18) 3 additional district judges for the district of
New Jersey;
(19) 1 additional district judge for the district of
New Mexico;
(20) 1 additional district judge for the southern
district of New York;
(21) 3 additional district judges for the eastern
district of New York;
(22) 1 additional district judge for the middle
district of North Carolina;
(23) 1 additional district judge for the southern
district of Ohio;
(24) 1 additional district judge for the northern
district of Oklahoma;
(25) 1 additional district judge for the western
district of Oklahoma;
(26) 1 additional district judge for the district of
Oregon;
(27) 3 additional district judges for the eastern
district of Pennsylvania;
(28) 1 additional district judge for the middle
district of Pennsylvania;
(29) 1 additional district judge for the district of
South Carolina;
(30) 1 additional district judge for the eastern
district of Tennessee;
(31) 1 additional district judge for the western
district of Tennessee;
(32) 1 additional district judge for the middle
district of Tennessee;
(33) 2 additional district judges for the northern
district of Texas;
(34) 1 additional district judge for the eastern
district of Texas;
(35) 5 additional district judges for the southern
district of Texas;
(36) 3 additional district judges for the western
district of Texas;
(37) 1 additional district judge for the district of
Utah;
(38) 1 additional district judge for the eastern
district of Washington;
(39) 1 additional district judge for the northern
district of West Virginia;
(40) 1 additional district judge for the southern
district of West Virginia; and
(41) 1 additional district judge for the district of
Wyoming.
(b) Existing Judgeships.--(1) The existing district
judgeships for the western district of Arkansas, the northern
district of Illinois, the northern district of Indiana, the
district of Massachusetts, the western district of New York,
the eastern district of North Carolina, the northern district
of Ohio, and the western district of Washington authorized by
section 202(b) of the Bankruptcy Amendments and Federal
Judgeship Act of 1984 (Public Law 98-353, 98 Stat. 347-348)
shall, as of the effective date of this title, be authorized
under section 133 of title 28, United States Code, and the
incumbents in those offices shall hold the office under section
133 of title 28, United States Code, as amended by this title.
(2)(A) The existing 2 district judgeships for the eastern and
western districts of Arkansas (provided by section 133 of title
28, United States Code, as in effect on the day before the
effective date of this title) shall be district judgeships for
the eastern district of Arkansas only, and the incumbents of
such judgeships shall hold the offices under section 133 of
title 28, United States Code, as amended by this title.
(B) The existing district judgeship for the northern and
southern districts of Iowa (provided by section 133 of title
28, United States Code, as in effect on the day before the
effective date of this title) shall be a district judgeship for
the northern district of Iowa only, and the incumbent of such
judgeship shall hold the office under section 133 of title 28,
United States Code, as amended by this title.
(C) The existing district judgeship for the northern,
eastern, and western districts of Oklahoma (provided by section
133 of title 28, United States Code, as in effect on the day
before the effective date of this title) and the occupant of
which has his or her official duty station at Oklahoma City on
the date of the enactment of this title, shall be a district
judgeship for the western district of Oklahoma only, and the
incumbent of such judgeship shall hold the office under section
133 of title 28, United States Code, as amended by this title.
(c) Temporary Judgeships.--The President shall appoint, by
and with the advice and consent of the Senate--
(1) 1 additional district judge for the eastern
district of California;
(2) 1 additional district judge for the district of
Hawaii;
(3) 1 additional district judge for the central
district of Illinois;
(4) 1 additional district judge for the southern
district of Illinois;
(5) 1 additional district judge for the district of
Kansas;
(6) 1 additional district judge for the western
district of Michigan;
(7) 1 additional district judge for the eastern
district of Missouri;
(8) 1 additional district judge for the district of
Nebraska;
(9) 1 additional district judge for the northern
district of New York;
(10) 1 additional district judge for the northern
district of Ohio;
(11) 1 additional district judge for the eastern
district of Pennsylvania; and
(12) 1 additional district judge for the eastern
district of Virginia.
Except with respect to the district of Kansas, the western
district of Michigan, the eastern district of Pennsylvania, the
district of Hawaii, and the northern district of Ohio, the
first vacancy in the office of district judge in each of the
judicial districts named in this subsection, occurring 10 years
or more after the confirmation date of the judge named to fill
the temporary judgeship created by this subsection, shall not
be filled. The first vacancy in the office of district judge in
the district of Kansas occurring [26 years and 6 months] 27
years and 6 months or more after the confirmation date of the
judge named to fill the temporary judgeship created for such
district under this subsection, shall not be filled. The first
vacancy in the office of district judge in the western district
of Michigan, occurring after December 1, 1995, shall not be
filled. The first vacancy in the office of district judge in
the eastern district of Pennsylvania, occurring 5 years or more
after the confirmation date of the judge named to fill the
temporary judgeship created for such district under this
subsection, shall not be filled. The first vacancy in the
office of district judge in the northern district of Ohio
occurring 19 years or more after the confirmation date of the
judge named to fill the temporary judgeship created under this
subsection shall not be filled. The first vacancy in the office
of the district judge in the district of Hawaii occurring 21
years and 6 months or more after the confirmation date of the
judge named to fill the temporary judgeship created under this
subsection shall not be filled. For districts named in this
subsection for which multiple judgeships are created by this
Act, the last of those judgeships filled shall be the
judgeships created under this section.
* * * * * * *
----------
TRANSPORTATION, TREASURY, HOUSING AND URBAN DEVELOPMENT, THE JUDICIARY,
THE DISTRICT OF COLUMBIA, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT,
2006
DIVISION A--TRANSPORTATION, TREASURY, HOUSING AND URBAN DEVELOPMENT,
THE JUDICIARY, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 2006
* * * * * * *
TITLE IV--THE JUDICIARY
* * * * * * *
Sec. 406. The existing judgeship for the eastern district of
Missouri authorized by section 203(c) of the Judicial
Improvements Act of 1990 (Public Law 101-650, 104 Stat. 5089)
as amended by Public Law 105-53, as of the effective date of
this Act, shall be extended. The first vacancy in the office of
district judge in this district occurring [24 years and 6
months] 25 years and 6 months or more after the confirmation
date of the judge named to fill the temporary judgeship created
by section 203(c) shall not be filled.
* * * * * * *
----------
21ST CENTURY DEPARTMENT OF JUSTICE APPROPRIATIONS AUTHORIZATION ACT
* * * * * * *
DIVISION A--21ST CENTURY DEPARTMENT OF JUSTICE APPROPRIATIONS
AUTHORIZATION ACT
* * * * * * *
TITLE III--MISCELLANEOUS
* * * * * * *
SEC. 312. ADDITIONAL FEDERAL JUDGESHIPS.
(a) Permanent District Judges for the District Courts.--
(1) In general.--The President shall appoint, by and
with the advice and consent of the Senate--
(A) 5 additional district judges for the
southern district of California;
(B) 1 additional district judge for the
western district of North Carolina; and
(C) 2 additional district judges for the
western district of Texas.
(2) [Omitted--Amendatory]
(b) District Judgeships for the Central and Southern
Districts of Illinois, the Northern District of New York, and
the Eastern District of Virginia.--
(1) Conversion of temporary judgeships to permanent
judgeships.--The existing district judgeships for the
central district and the southern district of Illinois,
the northern district of New York, and the eastern
district of Virginia authorized by section 203(c) (3),
(4), (9), and (12) of the Judicial Improvements Act of
1990 (Public Law 101-650, 28 U.S.C. 133 note) shall be
authorized under section 133 of title 28, United States
Code, and the incumbents in such offices shall hold the
offices under section 133 of title 28, United States
Code (as amended by this section).
(2) [Omitted--Amendatory]
(3) Effective date.--With respect to the central or
southern district of Illinois, the northern district of
New York, or the eastern district of Virginia, this
subsection shall take effect on the earlier of--
(A) the date on which the first vacancy in
the office of district judge occurs in such
district; or
(B) July 15, 2003.
(c) Temporary Judgeships.--
(1) In general.--The President shall appoint, by and
with the advice and consent of the Senate--
(A) 1 additional district judge for the
northern district of Alabama;
(B) 1 additional judge for the district of
Arizona;
(C) 1 additional judge for the central
district of California;
(D) 1 additional judge for the southern
district of Florida;
(E) 1 additional district judge for the
district of New Mexico;
(F) 1 additional district judge for the
western district of North Carolina; and
(G) 1 additional district judge for the
eastern district of Texas.
(2) Vacancies not filled.--The first vacancy in the
office of district judge in each of the offices of
district judge authorized by this subsection, except in
the case of the northern district of Alabama, the
central district of California, and the western
district of North Carolina, occurring [15 years] 16
years or more after the confirmation date of the judge
named to fill the temporary district judgeship created
in the applicable district by this subsection, shall
not be filled. The first vacancy in the office of
district judge in the district of Alabama occurring 15
years or more after the confirmation date of the judge
named to fill the temporary district judgeship created
in that district by this subsection, shall not be
filled. The first vacancy in the office of district
judge in the central district of California occurring
[14 years and 6 months] 15 years and six months or more
after the confirmation date of the judge named to fill
the temporary district judgeship created in that
district by this subsection, shall not be filled. The
first vacancy in the office of district judge in the
western district of North Carolina occurring [13 years]
14 years or more after the confirmation date of the
judge named to fill the temporary district judgeship
created in that district by this subsection, shall not
be filled.
(3) Effective date.--This subsection shall take
effect on July 15, 2003.
(d) Extension of Temporary Federal District Court Judgeship
for the Northern District of Ohio.--
(1) In general.--[Omitted--Amendatory]
(2) Effective date.--The amendments made by this
subsection shall take effect on the date of enactment
of this Act.
(e) Authorization of Appropriations.--There are authorized to
be appropriated such sums as may be necessary to carry out this
section, including such sums as may be necessary to provide
appropriate space and facilities for the judicial positions
created by this section.
* * * * * * *
----------
TEMPORARY BANKRUPTCY JUDGESHIPS EXTENSION ACT OF 2012
* * * * * * *
SEC. 2. EXTENSION OF TEMPORARY OFFICE OF BANKRUPTCY JUDGES IN CERTAIN
JUDICIAL DISTRICTS.
(a) Temporary Office of Bankruptcy Judges Authorized by
Public Law 109-8.--
(1) Extensions.--The temporary office of bankruptcy
judges authorized for the following districts by
section 1223(b) of Public Law 109-8 (28 U.S.C. 152
note) are extended until the applicable vacancy
specified in paragraph (2) in the office of a
bankruptcy judge for the respective district occurs:
(A) The central district of California.
(B) The eastern district of California.
(C) The district of Delaware.
(D) The southern district of Florida.
(E) The southern district of Georgia.
(F) The district of Maryland.
(G) The eastern district of Michigan.
(H) The district of New Jersey.
(I) The northern district of New York.
(J) The eastern district of North Carolina.
(K) The eastern district of Pennsylvania.
(L) The middle district of Pennsylvania.
(M) The district of Puerto Rico.
(N) The district of South Carolina.
(O) The western district of Tennessee.
(P) The eastern district of Virginia.
(Q) The district of Nevada.
(2) Vacancies.--
(A) Single vacancies.--Except as provided in
subparagraphs (B), (C), (D), (E), (F), (G), and
(H), the 1st vacancy in the office of a
bankruptcy judge for each district specified in
paragraph (1)--
(i) occurring more than 5 years after
the date of the enactment of this Act,
and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(B) Central district of california.--The 1st,
2d, and 3d vacancies in the office of a
bankruptcy judge for the central district of
California--
(i) occurring 5 years or more after
the date of the enactment of this Act,
and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(C) District of delaware.--The 1st, 2d, 3d,
and 4th vacancies in the office of a bankruptcy
judge for the district of Delaware--
(i) in the case of the 1st and 2d
vacancies, occurring more than [6
years] 7 years after the date of the
enactment of this Act,
(ii) in the case of the 3d and 4th
vacancies, occurring more than 5 years
after the date of the enactment of this
Act, and
(iii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(D) Southern district of florida.--The 1st
and 2d vacancies in the office of a bankruptcy
judge for the southern district of Florida--
(i) occurring more than [6 years] 7
years after the date of the enactment
of this Act, and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(E) District of maryland.--The 1st, 2d, and
3d vacancies in the office of a bankruptcy
judge for the district of Maryland--
(i) occurring more than 5 years after
the date of the enactment of this Act,
and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(F) Eastern district of michigan.--The 1st
vacancy in the office of a bankruptcy judge for
the eastern district of Michigan--
(i) occurring [6 years] 7 years or
more after the date of the enactment of
this Act, and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge, shall not be
filled.
(G) District of puerto rico.--The 1st vacancy
in the office of a bankruptcy judge for the
district of Puerto Rico--
(i) occurring [6 years] 7 years or
more after the date of the enactment of
this Act, and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge, shall not be
filled.
(H) Eastern district of virginia.--The 1st
vacancy in the office of a bankruptcy judge for
the eastern district of Virginia--
(i) occurring [6 years] 7 years or
more after the date of the enactment of
this Act, and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge, shall not be
filled.
(3) Applicability of other provisions.--Except as
provided in paragraphs (1) and (2), all other
provisions of section 1223(b) of Public Law 109-8 (28
U.S.C. 152 note) remain applicable to the temporary
office of bankruptcy judges referred to in paragraph
(1).
(b) Temporary Office of Bankruptcy Judges Extended by Public
Law 109-8.--
(1) Extensions.--The temporary office of bankruptcy
judges authorized by section 3 of the Bankruptcy
Judgeship Act of 1992 (28 U.S.C. 152 note) and extended
by section 1223(c) of Public Law 109-8 (28 U.S.C. 152
note) for the district of Delaware, the district of
Puerto Rico, and the eastern district of Tennessee are
extended until the applicable vacancy specified in
paragraph (2) in the office of a bankruptcy judge for
the respective district occurs.
(2) Vacancies.--
(A) District of delaware.--The 5th vacancy in
the office of a bankruptcy judge for the
district of Delaware--
(i) occurring more than 5 years after
the date of the enactment of this Act,
and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(B) District of puerto rico.--The 2d vacancy
in the office of a bankruptcy judge for the
district of Puerto Rico--
(i) occurring more than 5 years after
the date of the enactment of this Act,
and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(C) Eastern district of tennessee.--The 1st
vacancy in the office of a bankruptcy judge for
the eastern district of Tennessee--
(i) occurring more than 5 years after
the date of the enactment of this Act,
and
(ii) resulting from the death,
retirement, resignation, or removal of
a bankruptcy judge,
shall not be filled.
(3) Applicability of other provisions.--Except as
provided in paragraphs (1) and (2), all other
provisions of section 3 of the Bankruptcy Judgeship Act
of 1992 (28 U.S.C. 152 note) and section 1223(c) of
Public Law 109-8 (28 U.S.C. 152 note) remain applicable
to the temporary office of bankruptcy judges referred
to in paragraph (1).
(c) Temporary Office of the Bankruptcy Judge Authorized by
Public Law 102-361 for the Middle District of North Carolina.--
(1) Extension.--The temporary office of the
bankruptcy judge authorized by section 3 of the
Bankruptcy Judgeship Act of 1992 (28 U.S.C. 152 note)
for the middle district of North Carolina is extended
until the vacancy specified in paragraph (2) occurs.
(2) Vacancy.--The 1st vacancy in the office of a
bankruptcy judge for the middle district of North
Carolina--
(A) occurring more than 5 years after the
date of the enactment of this Act, and
(B) resulting from the death, retirement,
resignation, or removal of a bankruptcy judge,
shall not be filled.
(3) Applicability of other provisions.--Except as
provided in paragraphs (1) and (2), all other
provisions of section 3 of the Bankruptcy Judgeship Act
of 1992 (28 U.S.C. 152 note) remain applicable to the
temporary office of the bankruptcy judge referred to in
paragraph (1).
* * * * * * *
----------
FEDERAL ASSETS SALE AND TRANSFER ACT OF 2016
* * * * * * *
SEC. 16. FUNDING.
(a) Salaries and Expenses Account.--
(1) Establishment.--There is established in the
Treasury of the United States an account to be known as
the ``Public Buildings Reform Board Salaries and
Expenses Account'' (in this subsection referred to as
the ``Account''). The Account shall be under the
custody and control of the Chairperson of the Board and
deposits in the Account shall remain available until
expended.
(2) Necessary payments.--There shall be deposited
into the Account such amounts, as are provided in
appropriations Acts, for those necessary payments for
salaries and expenses to accomplish the administrative
needs of the Board.
(b) Asset Proceeds and Space Management Fund.--
[(1) Establishment.--There is established within the
Federal Buildings Fund established under section 592 of
title 40, United States Code, an account to be known as
the Public Buildings Reform Board--Asset Proceeds and
Space Management Fund (in this subsection referred to
as the ``Fund'').]
(1) Establishment.--There is established in the
Treasury of the United States an account to be known as
the ``Public Buildings Reform Board - Asset Proceeds
and Space Management Fund'' (in this subsection
referred to as the ``Fund''). The Fund shall be under
the custody and control of the Administrator of General
Services and deposits in the Fund shall remain
available until expended.
(2) Use of amounts.--Amounts in the Fund shall be
used solely for the purposes of carrying out actions
pursuant to the Board recommendations approved under
section 13.
(3) Deposits.--The following amounts shall be
deposited into the Fund and made available for
obligation or expenditure only as provided in advance
in appropriations Acts (subject to section 3307 of
title 40, United States Code, to the extent an
appropriation normally covered by that section exceeds
$20,000,000) for the purposes specified:
(A) Such amounts as are provided in
appropriations Acts, to remain available until
expended, for the consolidation, co-location,
exchange, redevelopment, reconfiguration of
space, disposal, and other actions recommended
by the Board for Federal agencies.
(B) Amounts received from the sale of any
civilian real property action taken pursuant to
a recommendation of the Board.
(4) Use of amounts to cover costs.--As provided in
appropriations Acts, amounts in the Fund may be made
available to cover necessary costs associated with
implementing the recommendations pursuant to section
14, including costs associated with--
(A) sales transactions;
(B) acquiring land, construction,
constructing replacement facilities, and
conducting advance planning and design as may
be required to transfer functions from a
Federal asset or property to another Federal
civilian property;
(C) co-location, redevelopment, disposal, and
reconfiguration of space; and
(D) other actions recommended by the Board
for Federal agencies.
(c) Additional Requirement for Budget Contents.--The
President shall transmit along with the President's budget
submitted pursuant to section 1105 of title 31, United States
Code, an estimate of proceeds that are the result of the
Board's recommendations and the obligations and expenditures
needed to support such recommendations.
* * * * * * *
----------
SMALL BUSINESS ACT
* * * * * * *
Sec. 7. (a) Loans to Small Business Concerns; Allowable
Purposes; Qualified Business; Restrictions and Limitations.--
The Administration is empowered to the extent and in such
amounts as provided in advance in appropriation Acts to make
loans for plant acquisition, construction, conversion, or
expansion, including the acquisition of land, material,
supplies, equipment, and working capital, and to make loans to
any qualified small business concern, including those owned by
qualified Indian tribes, for purposes of this Act. Such
financings may be made either directly or in cooperation with
banks or other financial institutions through agreements to
participate on an immediate or deferred (guaranteed) basis.
These powers shall be subject, however, to the following
restrictions, limitations, and provisions:
(1) In general.--
(A) Credit elsewhere.--
(i) In general.--No financial
assistance shall be extended pursuant
to this subsection if the applicant can
obtain credit elsewhere. No immediate
participation may be purchased unless
it is shown that a deferred
participation is not available; and no
direct financing may be made unless it
is shown that a participation is not
available.
(ii) Liquidity.--On and after October
1, 2015, the Administrator may not
guarantee a loan under this subsection
if the lender determines that the
borrower is unable to obtain credit
elsewhere solely because the liquidity
of the lender depends upon the
guaranteed portion of the loan being
sold on the secondary market.
(B) Background checks.--Prior to the approval
of any loan made pursuant to this subsection,
or section 503 of the Small Business Investment
Act of 1958, the Administrator may verify the
applicant's criminal background, or lack
thereof, through the best available means,
including, if possible, use of the National
Crime Information Center computer system at the
Federal Bureau of Investigation.
(C) Lending limits of lenders.--On and after
October 1, 2015, the Administrator may not
guarantee a loan under this subsection if the
sole purpose for requesting the guarantee is to
allow the lender to exceed the legal lending
limit of the lender.
(2) Level of participation in guaranteed loans.--
(A) In general.--Except as provided in
subparagraphs (B), (D), and (E), in an
agreement to participate in a loan on a
deferred basis under this subsection (including
a loan made under the Preferred Lenders
Program), such participation by the
Administration shall be equal to--
(i) 75 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such
balance exceeds $150,000; or
(ii) 85 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such
balance is less than or equal to
$150,000.
(B) Reduced participation upon request.--
(i) In general.--The guarantee
percentage specified by subparagraph
(A) for any loan under this subsection
may be reduced upon the request of the
participating lender.
(ii) Prohibition.--The Administration
shall not use the guarantee percentage
requested by a participating lender
under clause (i) as a criterion for
establishing priorities in approving
loan guarantee requests under this
subsection.
(C) Interest rate under preferred lenders
program.--
(i) In general.--The maximum interest
rate for a loan guaranteed under the
Preferred Lenders Program shall not
exceed the maximum interest rate, as
determined by the Administration,
applicable to other loans guaranteed
under this subsection.
(ii) Export-import bank lenders.--Any
lender that is participating in the
Delegated Authority Lender Program of
the Export-Import Bank of the United
States (or any successor to the
Program) shall be eligible to
participate in the Preferred Lenders
Program.
(iii) Preferred lenders program
defined.--For purposes of this
subparagraph, the term ``Preferred
Lenders Program'' means any program
established by the Administrator, as
authorized under the proviso in section
5(b)(7), under which a written
agreement between the lender and the
Administration delegates to the
lender--
(I) complete authority to
make and close loans with a
guarantee from the
Administration without
obtaining the prior specific
approval of the Administration;
and
(II) complete authority to
service and liquidate such
loans without obtaining the
prior specific approval of the
Administration for routine
servicing and liquidation
activities, but shall not take
any actions creating an actual
or apparent conflict of
interest.
(D) Participation under export working
capital program.--In an agreement to
participate in a loan on a deferred basis under
the Export Working Capital Program established
pursuant to paragraph (14)(A), such
participation by the Administration shall be 90
percent.
(E) Participation in international trade
loan.--In an agreement to participate in a loan
on a deferred basis under paragraph (16), the
participation by the Administration may not
exceed 90 percent.
(3) No loan shall be made under this subsection--
(A) if the total amount outstanding and
committed (by participation or otherwise) to
the borrower from the business loan and
investment fund established by this Act would
exceed $3,750,000 (or if the gross loan amount
would exceed $5,000,000), except as provided in
subparagraph (B);
(B) if the total amount outstanding and
committed (on a deferred basis) solely for the
purposes provided in paragraph (16) to the
borrower from the business loan and investment
fund established by this Act would exceed
$4,500,000 (or if the gross loan amount would
exceed $5,000,000), of which not more than
$4,000,000 may be used for working capital,
supplies, or financings under section 7(a)(14)
for export purposes; and
(C) if effected either directly or in
cooperation with banks or other lending
institutions through agreements to participate
on an immediate basis if the amount would
exceed $350,000.
(4) Interest rates and prepayment charges.--
(A) Interest rates.--Notwithstanding the
provisions of the constitution of any State or
the laws of any State limiting the rate or
amount of interest which may be charged, taken,
received, or reserved, the maximum legal rate
of interest on any financing made on a deferred
basis pursuant to this subsection shall not
exceed a rate prescribed by the Administration,
and the rate of interest for the
Administration's share of any direct or
immediate participation loan shall not exceed
the current average market yield on outstanding
marketable obligations of the United States
with remaining periods to maturity comparable
to the average maturities of such loans and
adjusted to the nearest one-eighth of 1 per
centum, and an additional amount as determined
by the Administration, but not to exceed 1 per
centum per annum: Provided, That for those
loans to assist any public or private
organization for the handicapped or to assist
any handicapped individual as provided in
paragraph (10) of this subsection, the interest
rate shall be 3 per centum per annum.
(B) Payment of accrued interest.--
(i) In general.--Any bank or other
lending institution making a claim for
payment on the guaranteed portion of a
loan made under this subsection shall
be paid the accrued interest due on the
loan from the earliest date of default
to the date of payment of the claim at
a rate not to exceed the rate of
interest on the loan on the date of
default, minus one percent.
(ii) Loans sold on secondary
market.--If a loan described in clause
(i) is sold on the secondary market,
the amount of interest paid to a bank
or other lending institution described
in that clause from the earliest date
of default to the date of payment of
the claim shall be no more than the
agreed upon rate, minus one percent.
(iii) Applicability.--Clauses (i) and
(ii) shall not apply to loans made on
or after October 1, 2000.
(C) Prepayment charges.--
(i) In general.--A borrower who
prepays any loan guaranteed under this
subsection shall remit to the
Administration a subsidy recoupment fee
calculated in accordance with clause
(ii) if--
(I) the loan is for a term of
not less than 15 years;
(II) the prepayment is
voluntary;
(III) the amount of
prepayment in any calendar year
is more than 25 percent of the
outstanding balance of the
loan; and
(IV) the prepayment is made
within the first 3 years after
disbursement of the loan
proceeds.
(ii) Subsidy recoupment fee.--The
subsidy recoupment fee charged under
clause (i) shall be--
(I) 5 percent of the amount
of prepayment, if the borrower
prepays during the first year
after disbursement;
(II) 3 percent of the amount
of prepayment, if the borrower
prepays during the second year
after disbursement; and
(III) 1 percent of the amount
of prepayment, if the borrower
prepays during the third year
after disbursement.
(5) No such loans including renewals and extensions
thereof may be made for a period or periods exceeding
twenty-five years, except that such portion of a loan
made for the purpose of acquiring real property or
constructing, converting, or expanding facilities may
have a maturity of twenty-five years plus such
additional period as is estimated may be required to
complete such construction, conversion, or expansion.
(6) All loans made under this subsection shall be of
such sound value or so secured as reasonably to assure
repayment: Provided, however, That--
(A) for loans to assist any public or private
organization or to assist any handicapped
individual as provided in paragraph (10) of
this subsection any reasonable doubt shall be
resolved in favor of the applicant;
(B) recognizing that greater risk may be
associated with loans for energy measures as
provided in paragraph (12) of this subsection,
factors in determining ``sound value'' shall
include, but not be limited to, quality of the
product or service; technical qualifications of
the applicant or his employees; sales
projections; and the financial status of the
business concern: Provided further, That such
status need not be as sound as that required
for general loans under this subsection; and
On that portion of the loan used to refinance existing
indebtedness held by a bank or other lending
institution, the Administration shall limit the amount
of deferred participation to 80 per centum of the
amount of the loan at the time of disbursement:
Provided further, That any authority conferred by this
subparagraph on the Administration shall be exercised
solely by the Administration and shall not be delegated
to other than Administration personnel.
(7) The Administration may defer payments on the
principal of such loans for a grace period and use such
other methods as it deems necessary and appropriate to
assure the successful establishment and operation of
such concern.
(8) The Administration may make loans under this
subsection to small business concerns owned and
controlled by disabled veterans (as defined in section
4211(3) of title 38, United States Code).
(9) The Administration may provide loans under this
subsection to finance residential or commercial
construction or rehabilitation for sale: Provided,
however, That such loans shall not be used primarily
for the acquisition of land.
(10) The Administration may provide guaranteed loans
under this subsection to assist any public or private
organization for the handicapped or to assist any
handicapped individual, including service-disabled
veterans, in establishing, acquiring, or operating a
small business concern.
(11) The Administration may provide loans under this
subsection to any small business concern, or to any
qualified person seeking to establish such a concern
when it determines that such loan will further the
policies established in section 2(c) of this Act, with
particular emphasis on the preservation or
establishment of small business concerns located in
urban or rural areas with high proportions of
unemployed or low-income individuals or owned by low-
income individuals.
(12)(A) The Administration may provide loans under
this subsection to assist any small business concern,
including start up, to enable such concern to design
architecturally or engineer, manufacture, distribute,
market, install, or service energy measures: Provided,
however, That such loan proceeds shall not be used
primarily for research and development.
(b) The Administration may provide deferred participation
loans under this subsection to finance the planning, design, or
installation of pollution control facilities for the purposes
set forth in section 404 of the Small Business Investment Act
of 1958. Notwithstanding the limitation expressed in paragraph
(3) of this subsection, a loan made under this paragraph may
not result in a total amount outstanding and committed to a
borrower from the business loan and investment fund of more
than $1,000,000.
(13) The Administration may provide financing under
this subsection to State and local development
companies for the purposes of, and subject to the
restrictions in, title V of the Small Business
Investment Act of 1958.
(14) Export working capital program.--
(A) In general.--The Administrator may
provide extensions of credit, standby letters
of credit, revolving lines of credit for export
purposes, and other financing to enable small
business concerns, including small business
export trading companies and small business
export management companies, to develop foreign
markets. A bank or participating lending
institution may establish the rate of interest
on such financings as may be legal and
reasonable.
(B) Terms.--
(i) Loan amount.--The Administrator
may not guarantee a loan under this
paragraph of more than $5,000,000.
(ii) Fees.--
(I) In general.--For a loan
under this paragraph, the
Administrator shall collect the
fee assessed under paragraph
(23) not more frequently than
once each year.
(II) Untapped credit.--The
Administrator may not assess a
fee on capital that is not
accessed by the small business
concern.
(C) Considerations.--When considering loan or
guarantee applications, the Administration
shall give weight to export-related benefits,
including opening new markets for United States
goods and services abroad and encouraging the
involvement of small businesses, including
agricultural concerns, in the export market.
(D) Marketing.--The Administrator shall
aggressively market its export financing
program to small businesses.
(15)(A) The Administration may guarantee loans under
this subsection to qualified employee trusts with
respect to a small business concern for the purpose of
purchasing stock of the concern under a plan approved
by the Administrator which, when carried out, results
in the qualified employee trust owning at least 51 per
centum of the stock of the concern.
(B) The plan requiring the Administrator's approval
under subparagraph (A) shall be submitted to the
Administration by the trustee of such trust with its
application for the guarantee. Such plan shall include
an agreement with the Administrator which is binding on
such trust and on the small business concern and which
provides that--
(i) not later than the date the loan
guaranteed under subparagraph (A) is repaid (or
as soon thereafter as is consistent with the
requirements of section 401(a) of the Internal
Revenue Code of 1954), at least 51 per centum
of the total stock of such concern shall be
allocated to the accounts of at least 51 per
centum of the employees of such concern who are
entitled to share in such allocation,
(ii) there will be periodic reviews of the
role in the management of such concern of
employees to whose accounts stock is allocated,
and
(iii) there will be adequate management to
assure management expertise and continuity.
(C) In determining whether to guarantee any loan
under this paragraph, the individual business
experience or personal assets of employee-owners shall
not be used as criteria, except inasmuch as certain
employee-owners may assume managerial responsibilities,
in which case business experience may be considered.
(D) For purposes of this paragraph, a corporation
which is controlled by any other person shall be
treated as a small business concern if such corporation
would, after the plan described in subparagraph (B) is
carried out, be treated as a small business concern.
(E) The Administration shall compile a separate list
of applications for assistance under this paragraph,
indicating which applications were accepted and which
were denied, and shall report periodically to the
Congress on the status of employee-owned firms assisted
by the Administration.
(16) International trade.--
(A) In general.--If the Administrator
determines that a loan guaranteed under this
subsection will allow an eligible small
business concern that is engaged in or
adversely affected by international trade to
improve its competitive position, the
Administrator may make such loan to assist such
concern--
(i) in the financing of the
acquisition, construction, renovation,
modernization, improvement, or
expansion of productive facilities or
equipment to be used in the United
States in the production of goods and
services involved in international
trade;
(ii) in the refinancing of existing
indebtedness that is not structured
with reasonable terms and conditions,
including any debt that qualifies for
refinancing under any other provision
of this subsection; or
(iii) by providing working capital.
(B) Security.--
(i) In general.--Except as provided
in clause (ii), each loan made under
this paragraph shall be secured by a
first lien position or first mortgage
on the property or equipment financed
by the loan or on other assets of the
small business concern.
(ii) Exception.--A loan under this
paragraph may be secured by a second
lien position on the property or
equipment financed by the loan or on
other assets of the small business
concern, if the Administrator
determines the lien provides adequate
assurance of the payment of the loan.
(C) Engaged in international trade.--For
purposes of this paragraph, a small business
concern is engaged in international trade if,
as determined by the Administrator, the small
business concern is in a position to expand
existing export markets or develop new export
markets.
(D) Adversely affected by international
trade.--For purposes of this paragraph, a small
business concern is adversely affected by
international trade if, as determined by the
Administrator, the small business concern--
(i) is confronting increased
competition with foreign firms in the
relevant market; and
(ii) is injured by such competition.
(E) Findings by certain federal agencies.--
For purposes of subparagraph (D)(ii) the
Administrator shall accept any finding of
injury by the International Trade Commission or
any finding of injury by the Secretary of
Commerce pursuant to chapter 3 of title II of
the Trade Act of 1974.
(F) List of export finance lenders.--
(i) Publication of list required.--
The Administrator shall publish an
annual list of the banks and
participating lending institutions
that, during the 1-year period ending
on the date of publication of the list,
have made loans guaranteed by the
Administration under--
(I) this paragraph;
(II) paragraph (14); or
(III) paragraph (34).
(ii) Availability of list.--The
Administrator shall--
(I) post the list published
under clause (i) on the website
of the Administration; and
(II) make the list published
under clause (i) available,
upon request, at each district
office of the Administration.
(17) The Administration shall authorize lending
institutions and other entities in addition to banks to
make loans authorized under this subsection.
(18) Guarantee fees.--
(A) In general.--With respect to each loan
guaranteed under this subsection (other than a
loan that is repayable in 1 year or less), the
Administration shall collect a guarantee fee,
which shall be payable by the participating
lender, and may be charged to the borrower, as
follows:
(i) A guarantee fee not to exceed 2
percent of the deferred participation
share of a total loan amount that is
not more than $150,000.
(ii) A guarantee fee not to exceed 3
percent of the deferred participation
share of a total loan amount that is
more than $150,000, but not more than
$700,000.
(iii) A guarantee fee not to exceed
3.5 percent of the deferred
participation share of a total loan
amount that is more than $700,000.
(iv) In addition to the fee under
clause (iii), a guarantee fee equal to
0.25 percent of any portion of the
deferred participation share that is
more than $1,000,000.
(B) Retention of certain fees.--Lenders
participating in the programs established under
this subsection may retain not more than 25
percent of a fee collected under subparagraph
(A)(i).
(19)(A) In addition to the Preferred Lenders Program
authorized by the proviso in section 5(b)(7), the
Administration is authorized to establish a Certified
Lenders Program for lenders who establish their
knowledge of Administration laws and regulations
concerning the guaranteed loan program and their
proficiency in program requirements. The designation of
a lender as a certified lender shall be suspended or
revoked at any time that the Administration determines
that the lender is not adhering to its rules and
regulations or that the loss experience of the lender
is excessive as compared to other lenders, but such
suspension or revocation shall not affect any
outstanding guarantee.
(B) In order to encourage all lending institutions
and other entities making loans authorized under this
subsection to provide loans of $50,000 or less in
guarantees to eligible small business loan applicants,
the Administration shall develop and allow
participating lenders to solely utilize a uniform and
simplified loan form for such loans.
(C) Authority to liquidate loans.--
(i) In general.--The Administrator
may permit lenders participating in the
Certified Lenders Program to liquidate
loans made with a guarantee from the
Administration pursuant to a
liquidation plan approved by the
Administrator.
(ii) Automatic approval.--If the
Administrator does not approve or deny
a request for approval of a liquidation
plan within 10 business days of the
date on which the request is made (or
with respect to any routine liquidation
activity under such a plan, within 5
business days) such request shall be
deemed to be approved.
(20)(A) The Administration is empowered to make loans
either directly or in cooperation with banks or other
financial institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis to small business concerns eligible for
assistance under subsection (j)(10) and section 8(a).
Such assistance may be provided only if the
Administration determines that--
(i) the type and amount of such assistance
requested by such concern is not otherwise
available on reasonable terms from other
sources;
(ii) with such assistance such concern has a
reasonable prospect for operating soundly and
profitably within a reasonable period of time;
(iii) the proceeds of such assistance will be
used within a reasonable time for plant
construction, conversion, or expansion,
including the acquisition of equipment,
facilities, machinery, supplies, or material or
to supply such concern with working capital to
be used in the manufacture of articles,
equipment, supplies, or material for defense or
civilian production or as may be necessary to
insure a well-balanced national economy; and
(iv) such assistance is of such sound value
as reasonably to assure that the terms under
which it is provided will not be breached by
the small business concern.
(B)(i) No loan shall be made under this paragraph if
the total amount outstanding and committed (by
participation or otherwise) to the borrower would
exceed $750,000.
(ii) Subject to the provisions of clause (i), in
agreements to participate in loans on a deferred
(guaranteed) basis, participation by the Administration
shall be not less than 85 per centum of the balance of
the financing outstanding at the time of disbursement.
(iii) The rate of interest on financings made on a
deferred (guaranteed) basis shall be legal and
reasonable.
(iv) Financings made pursuant to this paragraph shall
be subject to the following limitations:
(I) No immediate participation may be
purchased unless it is shown that a deferred
participation is not available.
(II) No direct financing may be made unless
it is shown that a participation is
unavailable.
(C) A direct loan or the Administration's share of an
immediate participation loan made pursuant to this
paragraph shall be any secured debt instrument--
(i) that is subordinated by its terms to all
other borrowings of the issuer;
(ii) the rate of interest on which shall not
exceed the current average market yield on
outstanding marketable obligations of the
United States with remaining periods to
maturity comparable to the average maturities
of such loan and adjusted to the nearest one-
eighth of 1 per centum;
(iii) the term of which is not more than
twenty-five years; and
(iv) the principal on which is amortized at
such rate as may be deemed appropriate by the
Administration, and the interest on which is
payable not less often than annually.
(21)(A) The Administration may make loans on a guaranteed
basis under the authority of this subsection--
(i) to a small business concern that has been (or can
reasonably be expected to be) detrimentally affected
by--
(I) the closure (or substantial reduction) of
a Department of Defense installation; or
(II) the termination (or substantial
reduction) of a Department of Defense program
on which such small business was a prime
contractor or subcontractor (or supplier) at
any tier; or
(ii) to a qualified individual or a veteran seeking
to establish (or acquire) and operate a small business
concern.
(B) Recognizing that greater risk may be associated with a
loan to a small business concern described in subparagraph
(A)(i), any reasonable doubts concerning the firm's proposed
business plan for transition to nondefense-related markets
shall be resolved in favor of the loan applicant when making
any determination regarding the sound value of the proposed
loan in accordance with paragraph (6).
(C) Loans pursuant to this paragraph shall be authorized in
such amounts as provided in advance in appropriation Acts for
the purposes of loans under this paragraph.
(D) For purposes of this paragraph a qualified individual
is--
(i) a member of the Armed Forces of the United
States, honorably discharged from active duty
involuntarily or pursuant to a program providing
bonuses or other inducements to encourage voluntary
separation or early retirement;
(ii) a civilian employee of the Department of Defense
involuntarily separated from Federal service or retired
pursuant to a program offering inducements to encourage
early retirement; or
(iii) an employee of a prime contractor,
subcontractor, or supplier at any tier of a Department
of Defense program whose employment is involuntarily
terminated (or voluntarily terminated pursuant to a
program offering inducements to encourage voluntary
separation or early retirement) due to the termination
(or substantial reduction) of a Department of Defense
program.
(E) Job creation and community benefit.--In providing
assistance under this paragraph, the Administration
shall develop procedures to ensure, to the maximum
extent practicable, that such assistance is used for
projects that--
(i) have the greatest potential for--
(I) creating new jobs for individuals
whose employment is involuntarily
terminated due to reductions in Federal
defense expenditures; or
(II) preventing the loss of jobs by
employees of small business concerns
described in subparagraph (A)(i); and
(ii) have substantial potential for
stimulating new economic activity in
communities most affected by reductions in
Federal defense expenditures.
(22) The Administration is authorized to permit
participating lenders to impose and collect a
reasonable penalty fee on late payments of loans
guaranteed under this subsection in an amount not to
exceed 5 percent of the monthly loan payment per month
plus interest.
(23) Yearly fee.--
(A) In general.--With respect to each loan
approved under this subsection, the
Administration shall assess, collect, and
retain a fee, not to exceed 0.55 percent per
year of the outstanding balance of the deferred
participation share of the loan, in an amount
established once annually by the Administration
in the Administration's annual budget request
to Congress, as necessary to reduce to zero the
cost to the Administration of making guarantees
under this subsection. As used in this
paragraph, the term ``cost'' has the meaning
given that term in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
(B) Payer.--The yearly fee assessed under
subparagraph (A) shall be payable by the
participating lender and shall not be charged
to the borrower.
(C) Lowering of borrower fees.--If the
Administration determines that fees paid by
lenders and by small business borrowers for
guarantees under this subsection may be
reduced, consistent with reducing to zero the
cost to the Administration of making such
guarantees--
(i) the Administration shall first
consider reducing fees paid by small
business borrowers under clauses (i)
through (iii) of paragraph (18)(A), to
the maximum extent possible; and
(ii) fees paid by small business
borrowers shall not be increased above
the levels in effect on the date of
enactment of this subparagraph.
(24) Notification requirement.--The Administration
shall notify the Committees on Small Business of the
Senate and the House of Representatives not later than
15 days before making any significant policy or
administrative change affecting the operation of the
loan program under this subsection.
(25) Limitation on conducting pilot projects.--
(A) In general.--Not more than 10 percent of
the total number of loans guaranteed in any
fiscal year under this subsection may be
awarded as part of a pilot program which is
commenced by the Administrator on or after
October 1, 1996.
(B) Pilot program defined.--In this
paragraph, the term ``pilot program'' means any
lending program initiative, project,
innovation, or other activity not specifically
authorized by law.
(C) Low documentation loan program.--The
Administrator may carry out the low
documentation loan program for loans of
$100,000 or less only through lenders with
significant experience in making small business
loans. Not later than 90 days after the date of
enactment of this subsection, the Administrator
shall promulgate regulations defining the
experience necessary for participation as a
lender in the low documentation loan program.
(26) Calculation of subsidy rate.--All fees,
interest, and profits received and retained by the
Administration under this subsection shall be included
in the calculations made by the Director of the Office
of Management and Budget to offset the cost (as that
term is defined in section 502 of the Federal Credit
Reform Act of 1990) to the Administration of purchasing
and guaranteeing loans under this Act.
(28) Leasing.--In addition to such other lease
arrangements as may be authorized by the
Administration, a borrower may permanently lease to one
or more tenants not more than 20 percent of any
property constructed with the proceeds of a loan
guaranteed under this subsection, if the borrower
permanently occupies and uses not less than 60 percent
of the total business space in the property.
(29) Real estate appraisals.--With respect to a loan
under this subsection that is secured by commercial
real property, an appraisal of such property by a State
licensed or certified appraiser--
(A) shall be required by the Administration
in connection with any such loan for more than
$250,000; or
(B) may be required by the Administration or
the lender in connection with any such loan for
$250,000 or less, if such appraisal is
necessary for appropriate evaluation of
creditworthiness.
(30) Ownership requirements.--Ownership requirements
to determine the eligibility of a small business
concern that applies for assistance under any credit
program under this Act shall be determined without
regard to any ownership interest of a spouse arising
solely from the application of the community property
laws of a State for purposes of determining marital
interests.
(31) Express loans.--
(A) Definitions.--As used in this paragraph:
(i) The term ``disaster area'' means
the area for which the President has
declared a major disaster, during the
5-year period beginning on the date of
the declaration.
(ii) The term ``express lender''
means any lender authorized by the
Administration to participate in the
Express Loan Program.
(iii) The term ``express loan'' means
any loan made pursuant to this
paragraph in which a lender utilizes to
the maximum extent practicable its own
loan analyses, procedures, and
documentation.
(iv) The term ``Express Loan
Program'' means the program for express
loans established by the Administration
under paragraph (25)(B), as in
existence on April 5, 2004, with a
guaranty rate of not more than 50
percent.
(B) Restriction to express lender.--The
authority to make an express loan shall be
limited to those lenders deemed qualified to
make such loans by the Administration.
Designation as an express lender for purposes
of making an express loan shall not prohibit
such lender from taking any other action
authorized by the Administration for that
lender pursuant to this subsection.
(C) Grandfathering of existing lenders.--Any
express lender shall retain such designation
unless the Administration determines that the
express lender has violated the law or
regulations promulgated by the Administration
or modifies the requirements to be an express
lender and the lender no longer satisfies those
requirements.
(D) Maximum loan amount.--The maximum loan
amount under the Express Loan Program is
$350,000.
(E) Option to participate.--Except as
otherwise provided in this paragraph, the
Administration shall take no regulatory,
policy, or administrative action, without
regard to whether such action requires
notification pursuant to paragraph (24), that
has the effect of requiring a lender to make an
express loan pursuant to subparagraph (D).
(F) Express loans for renewable energy and
energy efficiency.--
(i) Definitions.--In this
subparagraph--
(I) the term ``biomass''--
(aa) means any
organic material that
is available on a
renewable or recurring
basis, including--
(AA)
agricultural
crops;
(BB) trees
grown for
energy
production;
(CC) wood
waste and wood
residues;
(DD) plants
(including
aquatic plants
and grasses);
(EE)
residues;
(FF) fibers;
(GG) animal
wastes and
other waste
materials; and
(HH) fats,
oils, and
greases
(including
recycled fats,
oils, and
greases); and
(bb) does not
include--
(AA) paper
that is
commonly
recycled; or
(BB)
unsegregated
solid waste;
(II) the term ``energy
efficiency project'' means the
installation or upgrading of
equipment that results in a
significant reduction in energy
usage; and
(III) the term ``renewable
energy system'' means a system
of energy derived from--
(aa) a wind, solar,
biomass (including
biodiesel), or
geothermal source; or
(bb) hydrogen derived
from biomass or water
using an energy source
described in item (aa).
(ii) Loans.--The Administrator may
make a loan under the Express Loan
Program for the purpose of--
(I) purchasing a renewable
energy system; or
(II) carrying out an energy
efficiency project for a small
business concern.
(G) Guarantee fee waiver for veterans.--
(i) Guarantee fee waiver.--The
Administrator may not collect a
guarantee fee described in paragraph
(18) in connection with a loan made
under this paragraph to a veteran or
spouse of a veteran on or after October
1, 2015.
(ii) Exception.--If the President's
budget for the upcoming fiscal year,
submitted to Congress pursuant to
section 1105(a) of title 31, United
States Code, includes a cost for the
program established under this
subsection that is above zero, the
requirements of clause (i) shall not
apply to loans made during such
upcoming fiscal year.
(iii) Definition.--In this
subparagraph, the term ``veteran or
spouse of a veteran'' means--
(I) a veteran, as defined in
section 3(q)(4);
(II) an individual who is
eligible to participate in the
Transition Assistance Program
established under section 1144
of title 10, United States
Code;
(III) a member of a reserve
component of the Armed Forces
named in section 10101 of title
10, United States Code;
(IV) the spouse of an
individual described in
subclause (I), (II), or (III);
or
(V) the surviving spouse (as
defined in section 101 of title
38, United States Code) of an
individual described in
subclause (I), (II), or (III)
who died while serving on
active duty or as a result of a
disability that is service-
connected (as defined in such
section).
(H) Recovery opportunity loans.--
(i) In general.--The Administrator
may guarantee an express loan to a
small business concern located in a
disaster area in accordance with this
subparagraph.
(ii) Maximums.--For a loan guaranteed
under clause (i)--
(I) the maximum loan amount
is $150,000; and
(II) the guarantee rate shall
be not more than 85 percent.
(iii) Overall cap.--A loan guaranteed
under clause (i) shall not be counted
in determining the amount of loans made
to a borrower for purposes of
subparagraph (D).
(iv) Operations.--A small business
concern receiving a loan guaranteed
under clause (i) shall certify that the
small business concern was in operation
on the date on which the applicable
major disaster occurred as a condition
of receiving the loan.
(v) Repayment ability.--A loan
guaranteed under clause (i) may only be
made to a small business concern that
demonstrates, to the satisfaction of
the Administrator, sufficient capacity
to repay the loan.
(vi) Timing of payment of
guarantees.--
(I) In general.--Not later
than 90 days after the date on
which a request for purchase is
filed with the Administrator,
the Administrator shall
determine whether to pay the
guaranteed portion of the loan.
(II) Recapture.--
Notwithstanding any other
provision of law, unless there
is a subsequent finding of
fraud by a court of competent
jurisdiction relating to a loan
guaranteed under clause (i), on
and after the date that is 6
months after the date on which
the Administrator determines to
pay the guaranteed portion of
the loan, the Administrator may
not attempt to recapture the
paid guarantee.
(vii) Fees.--
(I) In general.--Unless the
Administrator has waived the
guarantee fee that would
otherwise be collected by the
Administrator under paragraph
(18) for a loan guaranteed
under clause (i), and except as
provided in subclause (II), the
guarantee fee for the loan
shall be equal to the guarantee
fee that the Administrator
would collect if the guarantee
rate for the loan was 50
percent.
(II) Exception.--Subclause
(I) shall not apply if the cost
of carrying out the program
under this subsection in a
fiscal year is more than zero
and such cost is directly
attributable to the cost of
guaranteeing loans under clause
(i).
(viii) Rules.--Not later than 270
days after the date of enactment of
this subparagraph, the Administrator
shall promulgate rules to carry out
this subparagraph.
(32) Loans for energy efficient technologies.--
(A) Definitions.--In this paragraph--
(i) the term ``cost'' has the meaning
given that term in section 502 of the
Federal Credit Reform Act of 1990 (2
U.S.C. 661a);
(ii) the term ``covered energy
efficiency loan'' means a loan--
(I) made under this
subsection; and
(II) the proceeds of which
are used to purchase energy
efficient designs, equipment,
or fixtures, or to reduce the
energy consumption of the
borrower by 10 percent or more;
and
(iii) the term ``pilot program''
means the pilot program established
under subparagraph (B)
(B) Establishment.--The Administrator shall
establish and carry out a pilot program under
which the Administrator shall reduce the fees
for covered energy efficiency loans.
(C) Duration.--The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) Maximum participation.--A covered energy
efficiency loan shall include the maximum
participation levels by the Administrator
permitted for loans made under this subsection.
(E) Fees.--
(i) In general.--The fee on a covered
energy efficiency loan shall be equal
to 50 percent of the fee otherwise
applicable to that loan under paragraph
(18).
(ii) Waiver.--The Administrator may
waive clause (i) for a fiscal year if--
(I) for the fiscal year
before that fiscal year, the
annual rate of default of
covered energy efficiency loans
exceeds that of loans made
under this subsection that are
not covered energy efficiency
loans;
(II) the cost to the
Administration of making loans
under this subsection is
greater than zero and such cost
is directly attributable to the
cost of making covered energy
efficiency loans; and
(III) no additional sources
of revenue authority are
available to reduce the cost of
making loans under this
subsection to zero.
(iii) Effect of waiver.--If the
Administrator waives the reduction of
fees under clause (ii), the
Administrator--
(I) shall not assess or
collect fees in an amount
greater than necessary to
ensure that the cost of the
program under this subsection
is not greater than zero; and
(II) shall reinstate the fee
reductions under clause (i)
when the conditions in clause
(ii) no longer apply.
(iv) No increase of fees.--The
Administrator shall not increase the
fees under paragraph (18) on loans made
under this subsection that are not
covered energy efficiency loans as a
direct result of the pilot program.
(F) GAO report.--
(i) In general.--Not later than 1
year after the date that the pilot
program terminates, the Comptroller
General of the United States shall
submit to the Committee on Small
Business of the House of
Representatives and the Committee on
Small Business and Entrepreneurship of
the Senate a report on the pilot
program.
(ii) Contents.--The report submitted
under clause (i) shall include--
(I) the number of covered
energy efficiency loans for
which fees were reduced under
the pilot program;
(II) a description of the
energy efficiency savings with
the pilot program;
(III) a description of the
impact of the pilot program on
the program under this
subsection;
(IV) an evaluation of the
efficacy and potential fraud
and abuse of the pilot program;
and
(V) recommendations for
improving the pilot program.
(33) Increased veteran participation program.--
(A) Definitions.--In this paragraph--
(i) the term ``cost'' has the meaning
given that term in section 502 of the
Federal Credit Reform Act of 1990 (2
U.S.C. 661a);
(ii) the term ``pilot program'' means
the pilot program established under
subparagraph (B); and
(iii) the term ``veteran
participation loan'' means a loan made
under this subsection to a small
business concern owned and controlled
by veterans of the Armed Forces or
members of the reserve components of
the Armed Forces.
(B) Establishment.--The Administrator shall
establish and carry out a pilot program under
which the Administrator shall reduce the fees
for veteran participation loans.
(C) Duration.--The pilot program shall
terminate at the end of the second full fiscal
year after the date that the Administrator
establishes the pilot program.
(D) Maximum participation.--A veteran
participation loan shall include the maximum
participation levels by the Administrator
permitted for loans made under this subsection.
(E) Fees.--
(i) In general.--The fee on a veteran
participation loan shall be equal to 50
percent of the fee otherwise applicable
to that loan under paragraph (18).
(ii) Waiver.--The Administrator may
waive clause (i) for a fiscal year if--
(I) for the fiscal year
before that fiscal year, the
annual estimated rate of
default of veteran
participation loans exceeds
that of loans made under this
subsection that are not veteran
participation loans;
(II) the cost to the
Administration of making loans
under this subsection is
greater than zero and such cost
is directly attributable to the
cost of making veteran
participation loans; and
(III) no additional sources
of revenue authority are
available to reduce the cost of
making loans under this
subsection to zero.
(iii) Effect of waiver.--If the
Administrator waives the reduction of
fees under clause (ii), the
Administrator--
(I) shall not assess or
collect fees in an amount
greater than necessary to
ensure that the cost of the
program under this subsection
is not greater than zero; and
(II) shall reinstate the fee
reductions under clause (i)
when the conditions in clause
(ii) no longer apply.
(iv) No increase of fees.--The
Administrator shall not increase the
fees under paragraph (18) on loans made
under this subsection that are not
veteran participation loans as a direct
result of the pilot program.
(F) GAO report.--
(i) In general.--Not later than 1
year after the date that the pilot
program terminates, the Comptroller
General of the United States shall
submit to the Committee on Small
Business of the House of
Representatives and the Committee on
Small Business and Entrepreneurship of
the Senate a report on the pilot
program.
(ii) Contents.--The report submitted
under clause (i) shall include--
(I) the number of veteran
participation loans for which
fees were reduced under the
pilot program;
(II) a description of the
impact of the pilot program on
the program under this
subsection;
(III) an evaluation of the
efficacy and potential fraud
and abuse of the pilot program;
and
(IV) recommendations for
improving the pilot program.
(34) Export express program.--
(A) Definitions.--In this paragraph--
(i) the term ``export development
activity'' includes--
(I) obtaining a standby
letter of credit when required
as a bid bond, performance
bond, or advance payment
guarantee;
(II) participation in a trade
show that takes place outside
the United States;
(III) translation of product
brochures or catalogues for use
in markets outside the United
States;
(IV) obtaining a general line
of credit for export purposes;
(V) performing a service
contract from buyers located
outside the United States;
(VI) obtaining transaction-
specific financing associated
with completing export orders;
(VII) purchasing real estate
or equipment to be used in the
production of goods or services
for export;
(VIII) providing term loans
or other financing to enable a
small business concern,
including an export trading
company and an export
management company, to develop
a market outside the United
States; and
(IX) acquiring, constructing,
renovating, modernizing,
improving, or expanding a
production facility or
equipment to be used in the
United States in the production
of goods or services for
export; and
(ii) the term ``express loan'' means
a loan in which a lender uses to the
maximum extent practicable the loan
analyses, procedures, and documentation
of the lender to provide expedited
processing of the loan application.
(B) Authority.--The Administrator may
guarantee the timely payment of an express loan
to a small business concern made for an export
development activity.
(C) Level of participation.--
(i) Maximum amount.--The maximum
amount of an express loan guaranteed
under this paragraph shall be $500,000.
(ii) Percentage.--For an express loan
guaranteed under this paragraph, the
Administrator shall guarantee--
(I) 90 percent of a loan that
is not more than $350,000; and
(II) 75 percent of a loan
that is more than $350,000 and
not more than $500,000.
(b) Except as to agricultural enterprises as defined in
section 18(b)(1) of this Act, the Administration also is
empowered to the extent and in such amounts as provided in
advance in appropriation Acts--
(1)(A) to make such loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administration may
determine to be necessary or appropriate to repair,
rehabilitate or replace property, real or personal,
damaged or destroyed by or as a result of natural or
other disasters: Provided, That such damage or
destruction is not compensated for by insurance or
otherwise: And provided further, That the
Administration may increase the amount of the loan by
up to an additional 20 per centum of the aggregate
costs of such damage or destruction (whether or not
compensated for by insurance or otherwise) if it
determines such increase to be necessary or appropriate
in order to protect the damaged or destroyed property
from possible future disasters by taking mitigating
measures, including--
(i) construction of retaining walls and sea
walls;
(ii) grading and contouring land; and
(iii) relocating utilities and modifying
structures, including construction of a safe
room or similar storm shelter designed to
protect property and occupants from tornadoes
or other natural disasters, if such safe room
or similar storm shelter is constructed in
accordance with applicable standards issued by
the Federal Emergency Management Agency;
(B) to refinance any mortgage or other lien against a
totally destroyed or substantially damaged home or
business concern: Provided, That no loan or guarantee
shall be extended unless the Administration finds that
(i) the applicant is not able to obtain credit
elsewhere; (ii) such property is to be repaired,
rehabilitated, or replaced; (iii) the amount refinanced
shall not exceed the amount of physical loss sustained;
and (iv) such amount shall be reduced to the extent
such mortgage or lien is satisfied by insurance or
otherwise; and
(C) during fiscal years 2000 through 2004, to
establish a predisaster mitigation program to make such
loans (either directly or in cooperation with banks or
other lending institutions through agreements to
participate on an immediate or deferred (guaranteed)
basis), as the Administrator may determine to be
necessary or appropriate, to enable small businesses to
use mitigation techniques in support of a formal
mitigation program established by the Federal Emergency
Management Agency, except that no loan or guarantee may
be extended to a small business under this subparagraph
unless the Administration finds that the small business
is otherwise unable to obtain credit for the purposes
described in this subparagraph;
(2) to make sure loans (either directly or in
cooperation with banks or other lending institutions
through agreements to participate on an immediate or
deferred (guaranteed) basis) as the Administration may
determine to be necessary or appropriate to any small
business concern, private nonprofit organization, or
small agricultural cooperative located in an area
affected by a disaster, (including drought), with
respect to both farm-related and nonfarm-related small
business concerns, if the Administration determines
that the concern, the organization, or the cooperative
has suffered a substantial economic injury as a result
of such disaster and if such disaster constitutes--
(A) a major disaster, as determined by the
President under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.); or
(B) a natural disaster, as determined by the
Secretary of Agriculture pursuant to section
321 of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1961), in which case,
assistance under this paragraph may be provided
to farm-related and nonfarm-related small
business concerns, subject to the other
applicable requirements of this paragraph; or
(C) a disaster, as determined by the
Administrator of the Small Business
Administration; or
(D) if no disaster declaration has been
issued pursuant to subparagraph (A), (B), or
(C), the Governor of a State in which a
disaster has occurred may certify to the Small
Business Administration that small business
concerns, private nonprofit organizations, or
small agricultural cooperatives (1) have
suffered economic injury as a result of such
disaster, and (2) are in need of financial
assistance which is not available on reasonable
terms in the disaster stricken area. Not later
than 30 days after the date of receipt of such
certification by a Governor of a State, the
Administration shall respond in writing to that
Governor on its determination and the reasons
therefore, and may then make such loans as
would have been available under this paragraph
if a disaster declaration had been issued.
Provided, That no loan or guarantee shall be extended
pursuant to this paragraph (2) unless the
Administration finds that the applicant is not able to
obtain credit elsewhere.
(3)(A) In this paragraph--
(i) the term ``essential employee'' means an
individual who is employed by a small business
concern and whose managerial or technical
expertise is critical to the successful day-to-
day operations of that small business concern;
(ii) the term ``period of military conflict''
has the meaning given the term in subsection
(n)(1); and
(iii) the term ``substantial economic
injury'' means an economic harm to a business
concern that results in the inability of the
business concern--
(I) to meet its obligations as they
mature;
(II) to pay its ordinary and
necessary operating expenses; or
(III) to market, produce, or provide
a product or service ordinarily
marketed, produced, or provided by the
business concern.
(B) The Administration may make such disaster loans
(either directly or in cooperation with banks or other
lending institutions through agreements to participate
on an immediate or deferred basis) to assist a small
business concern that has suffered or that is likely to
suffer substantial economic injury as the result of an
essential employee of such small business concern being
ordered to active military duty during a period of
military conflict.
(C) A small business concern described in
subparagraph (B) shall be eligible to apply for
assistance under this paragraph during the period
beginning on the date on which the essential employee
is ordered to active duty and ending on the date that
is 1 year after the date on which such essential
employee is discharged or released from active duty.
The Administrator may, when appropriate (as determined
by the Administrator), extend the ending date specified
in the preceding sentence by not more than 1 year.
(D) Any loan or guarantee extended pursuant to this
paragraph shall be made at the same interest rate as
economic injury loans under paragraph (2).
(E) No loan may be made under this paragraph, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred basis, if the total amount
outstanding and committed to the borrower under this
subsection would exceed $1,500,000, unless such
applicant constitutes, or have become due to changed
economic circumstances, a major source of employment in
its surrounding area, as determined by the
Administration, in which case the Administration, in
its discretion, may waive the $1,500,000 limitation.
(F) For purposes of assistance under this paragraph,
no declaration of a disaster area shall be required.
(G)(i) Notwithstanding any other provision of
law, the Administrator may make a loan under
this paragraph of not more than $50,000 without
collateral.
(ii) The Administrator may defer payment of
principal and interest on a loan described in
clause (i) during the longer of--
(I) the 1-year period beginning on
the date of the initial disbursement of
the loan; and
(II) the period during which the
relevant essential employee is on
active duty.
(H) The Administrator shall give priority to
any application for a loan under this paragraph
and shall process and make a determination
regarding such applications prior to processing
or making a determination on other loan
applications under this subsection, on a
rolling basis.
(4) Coordination with fema.--
(A) In general.--Notwithstanding any other
provision of law, for any disaster declared
under this subsection or major disaster
(including any major disaster relating to which
the Administrator declares eligibility for
additional disaster assistance under paragraph
(9)), the Administrator, in consultation with
the Administrator of the Federal Emergency
Management Agency, shall ensure, to the maximum
extent practicable, that all application
periods for disaster relief under this Act
correspond with application deadlines
established under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5121 et seq.), or as extended by the
President.
(B) Deadlines.--Notwithstanding any other
provision of law, not later than 10 days before
the closing date of an application period for a
major disaster (including any major disaster
relating to which the Administrator declares
eligibility for additional disaster assistance
under paragraph (9)), the Administrator, in
consultation with the Administrator of the
Federal Emergency Management Agency, shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives a report that includes--
(i) the deadline for submitting
applications for assistance under this
Act relating to that major disaster;
(ii) information regarding the number
of loan applications and disbursements
processed by the Administrator relating
to that major disaster for each day
during the period beginning on the date
on which that major disaster was
declared and ending on the date of that
report; and
(iii) an estimate of the number of
potential applicants that have not
submitted an application relating to
that major disaster.
(5) Public awareness of disasters.--If a disaster is
declared under this subsection or the Administrator
declares eligibility for additional disaster assistance
under paragraph (9), the Administrator shall make every
effort to communicate through radio, television, print,
and web-based outlets, all relevant information needed
by disaster loan applicants, including--
(A) the date of such declaration;
(B) cities and towns within the area of such
declaration;
(C) loan application deadlines related to
such disaster;
(D) all relevant contact information for
victim services available through the
Administration (including links to small
business development center websites);
(E) links to relevant Federal and State
disaster assistance websites, including links
to websites providing information regarding
assistance available from the Federal Emergency
Management Agency;
(F) information on eligibility criteria for
Administration loan programs, including where
such applications can be found; and
(G) application materials that clearly state
the function of the Administration as the
Federal source of disaster loans for homeowners
and renters.
(6) Authority for qualified private contractors.--
(A) Disaster loan processing.--The
Administrator may enter into an agreement with
a qualified private contractor, as determined
by the Administrator, to process loans under
this subsection in the event of a major
disaster (including any major disaster relating
to which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator
shall pay the contractor a fee for each loan
processed.
(B) Loan loss verification services.--The
Administrator may enter into an agreement with
a qualified lender or loss verification
professional, as determined by the
Administrator, to verify losses for loans under
this subsection in the event of a major
disaster (including any major disaster relating
to which the Administrator declares eligibility
for additional disaster assistance under
paragraph (9)), under which the Administrator
shall pay the lender or verification
professional a fee for each loan for which such
lender or verification professional verifies
losses.
(7) Disaster assistance employees.--
(A) In general.--In carrying out this
section, the Administrator may, where
practicable, ensure that the number of full-
time equivalent employees--
(i) in the Office of the Disaster
Assistance is not fewer than 800; and
(ii) in the Disaster Cadre of the
Administration is not fewer than 1,000.
(B) Report.--In carrying out this subsection,
if the number of full-time employees for either
the Office of Disaster Assistance or the
Disaster Cadre of the Administration is below
the level described in subparagraph (A) for
that office, not later than 21 days after the
date on which that staffing level decreased
below the level described in subparagraph (A),
the Administrator shall submit to the Committee
on Appropriations and the Committee on Small
Business and Entrepreneurship of the Senate and
the Committee on Appropriations and Committee
on Small Business of the House of
Representatives, a report--
(i) detailing staffing levels on that
date;
(ii) requesting, if practicable and
determined appropriate by the
Administrator, additional funds for
additional employees; and
(iii) containing such additional
information, as determined appropriate
by the Administrator.
(8) Increased loan caps.--
(A) Aggregate loan amounts.--Except as
provided in subparagraph (B), and
notwithstanding any other provision of law, the
aggregate loan amount outstanding and committed
to a borrower under this subsection may not
exceed $2,000,000.
(B) Waiver authority.--The Administrator may,
at the discretion of the Administrator,
increase the aggregate loan amount under
subparagraph (A) for loans relating to a
disaster to a level established by the
Administrator, based on appropriate economic
indicators for the region in which that
disaster occurred.
(9) Declaration of eligibility for additional
disaster assistance.--
(A) In general.--If the President declares a
major disaster, the Administrator may declare
eligibility for additional disaster assistance
in accordance with this paragraph.
(B) Threshold.--A major disaster for which
the Administrator declares eligibility for
additional disaster assistance under this
paragraph shall--
(i) have resulted in extraordinary
levels of casualties or damage or
disruption severely affecting the
population (including mass
evacuations), infrastructure,
environment, economy, national morale,
or government functions in an area;
(ii) be comparable to the description
of a catastrophic incident in the
National Response Plan of the
Administration, or any successor
thereto, unless there is no successor
to such plan, in which case this clause
shall have no force or effect; and
(iii) be of such size and scope
that--
(I) the disaster assistance
programs under the other
paragraphs under this
subsection are incapable of
providing adequate and timely
assistance to individuals or
business concerns located
within the disaster area; or
(II) a significant number of
business concerns outside the
disaster area have suffered
disaster-related substantial
economic injury as a result of
the incident.
(C) Additional economic injury disaster loan
assistance.--
(i) In general.--If the Administrator
declares eligibility for additional
disaster assistance under this
paragraph, the Administrator may make
such loans under this subparagraph
(either directly or in cooperation with
banks or other lending institutions
through agreements to participate on an
immediate or deferred basis) as the
Administrator determines appropriate to
eligible small business concerns
located anywhere in the United States.
(ii) Processing time.--
(I) In general.--If the
Administrator determines that
the average processing time for
applications for disaster loans
under this subparagraph
relating to a specific major
disaster is more than 15 days,
the Administrator shall give
priority to the processing of
such applications submitted by
eligible small business
concerns located inside the
disaster area, until the
Administrator determines that
the average processing time for
such applications is not more
than 15 days.
(II) Suspension of
applications from outside
disaster area.--If the
Administrator determines that
the average processing time for
applications for disaster loans
under this subparagraph
relating to a specific major
disaster is more than 30 days,
the Administrator shall suspend
the processing of such
applications submitted by
eligible small business
concerns located outside the
disaster area, until the
Administrator determines that
the average processing time for
such applications is not more
than 15 days.
(iii) Loan terms.--A loan under this
subparagraph shall be made on the same
terms as a loan under paragraph (2).
(D) Definitions.--In this paragraph--
(i) the term ``disaster area'' means
the area for which the applicable major
disaster was declared;
(ii) the term ``disaster-related
substantial economic injury'' means
economic harm to a business concern
that results in the inability of the
business concern to--
(I) meet its obligations as
it matures;
(II) meet its ordinary and
necessary operating expenses;
or
(III) market, produce, or
provide a product or service
ordinarily marketed, produced,
or provided by the business
concern because the business
concern relies on materials
from the disaster area or sells
or markets in the disaster
area; and
(iii) the term ``eligible small
business concern'' means a small
business concern--
(I) that has suffered
disaster-related substantial
economic injury as a result of
the applicable major disaster;
and
(II)(aa) for which not less
than 25 percent of the market
share of that small business
concern is from business
transacted in the disaster
area;
(bb) for which not less than
25 percent of an input into a
production process of that
small business concern is from
the disaster area; or
(cc) that relies on a
provider located in the
disaster area for a service
that is not readily available
elsewhere.
(10) Reducing closing and disbursement delays.--The
Administrator shall provide a clear and concise
notification on all application materials for loans
made under this subsection and on relevant websites
notifying an applicant that the applicant may submit
all documentation necessary for the approval of the
loan at the time of application and that failure to
submit all documentation could delay the approval and
disbursement of the loan.
(11) Increasing transparency in loan approvals.--The
Administrator shall establish and implement clear,
written policies and procedures for analyzing the
ability of a loan applicant to repay a loan made under
this subsection.
(12) Additional awards to small business development
centers, women's business centers, and score for
disaster recovery.--
(A) In general.--The Administration may
provide financial assistance to a small
business development center, a women's business
center described in section 29, the Service
Corps of Retired Executives, or any proposed
consortium of such individuals or entities to
spur disaster recovery and growth of small
business concerns located in an area for which
the President has declared a major disaster.
(B) Form of financial assistance.--Financial
assistance provided under this paragraph shall
be in the form of a grant, contract, or
cooperative agreement.
(C) No matching funds required.--Matching
funds shall not be required for any grant,
contract, or cooperative agreement under this
paragraph.
(D) Requirements.--A recipient of financial
assistance under this paragraph shall provide
counseling, training, and other related
services, such as promoting long-term
resiliency, to small business concerns and
entrepreneurs impacted by a major disaster.
(E) Performance.--
(i) In general.--The Administrator,
in cooperation with the recipients of
financial assistance under this
paragraph, shall establish metrics and
goals for performance of grants,
contracts, and cooperative agreements
under this paragraph, which shall
include recovery of sales, recovery of
employment, reestablishment of business
premises, and establishment of new
small business concerns.
(ii) Use of estimates.--The
Administrator shall base the goals and
metrics for performance established
under clause (i), in part, on the
estimates of disaster impact prepared
by the Office of Disaster Assistance
for purposes of estimating loan-making
requirements.
(F) Term.--
(i) In general.--The term of any
grant, contract, or cooperative
agreement under this paragraph shall be
for not more than 2 years.
(ii) Extension.--The Administrator
may make 1 extension of a grant,
contract, or cooperative agreement
under this paragraph for a period of
not more than 1 year, upon a showing of
good cause and need for the extension.
(G) Exemption from other program
requirements.--Financial assistance provided
under this paragraph is in addition to, and
wholly separate from, any other form of
assistance provided by the Administrator under
this Act.
(H) Competitive basis.--The Administration
shall award financial assistance under this
paragraph on a competitive basis.
(13) Supplemental assistance for contractor
malfeasance.--
(A) In general.--If a contractor or other
person engages in malfeasance in connection
with repairs to, rehabilitation of, or
replacement of real or personal property
relating to which a loan was made under this
subsection and the malfeasance results in
substantial economic damage to the recipient of
the loan or substantial risks to health or
safety, upon receiving documentation of the
substantial economic damage or the substantial
risk to health and safety from an independent
loss verifier, and subject to subparagraph (B),
the Administrator may increase the amount of
the loan under this subsection, as necessary
for the cost of repairs, rehabilitation, or
replacement needed to address the cause of the
economic damage or health or safety risk.
(B) Requirements.--The Administrator may only
increase the amount of a loan under
subparagraph (A) upon receiving an appropriate
certification from the borrower and person
performing the mitigation attesting to the
reasonableness of the mitigation costs and an
assignment of any proceeds received from the
person engaging in the malfeasance. The
assignment of proceeds recovered from the
person engaging in the malfeasance shall be
equal to the amount of the loan under this
section. Any mitigation activities shall be
subject to audit and independent verification
of completeness and cost reasonableness.
(14) Business recovery centers.--
(A) In general.--The Administrator, acting
through the district offices of the
Administration, shall identify locations that
may be used as recovery centers by the
Administration in the event of a disaster
declared under this subsection or a major
disaster.
(B) Requirements for identification.--Each
district office of the Administration shall--
(i) identify a location described in
subparagraph (A) in each county,
parish, or similar unit of general
local government in the area served by
the district office; and
(ii) ensure that the locations
identified under subparagraph (A) may
be used as a recovery center without
cost to the Government, to the extent
practicable.
(15) Increased oversight of economic injury disaster
loans.--The Administrator shall increase oversight of
entities receiving loans under paragraph (2), and may
consider--
(A) scheduled site visits to ensure borrower
eligibility and compliance with requirements
established by the Administrator; and
(B) reviews of the use of the loan proceeds
by an entity described in paragraph (2) to
ensure compliance with requirements established
by the Administrator.
No loan under this subsection, including renewals and
extensions thereof, may be made for a period or periods
exceeding thirty years: Provided, That the Administrator may
consent to a suspension in the payment of principal and
interest charges on, and to an extension in the maturity of,
the Federal share of any loan under this subsection for a
period not to exceed five years, if (A) the borrower under such
loan is a homeowner or a small business concern, (B) the loan
was made to enable (i) such homeowner to repair or replace his
home, or (ii) such concern to repair or replace plant or
equipment which was damaged or destroyed as the result of a
disaster meeting the requirements of clause (A) or (B) of
paragraph (2) of this subsection, and (C) the Administrator
determines such action is necessary to avoid severe financial
hardship: Provided further, That the provisions of paragraph
(1) of subsection (d) of this section shall not be applicable
to any such loan having a maturity in excess of twenty years.
Notwithstanding any other provision of law, and except as
provided in subsection (d), the interest rate on the
Administration's share of any loan made under subsection (b),
shall not exceed the average annual interest rate on all
interest-bearing obligations of the United States then forming
a part of the public debt as computed at the end of the fiscal
year next preceding the date of the loan and adjusted to the
nearest one-eight of 1 per centum plus one-quarter of 1 per
centum: Provided, however, That the interest rate for loans
made under paragraphs (1) and (2) hereof shall not exceed the
rate of interest which is in effect at the time of the
occurrence of the disaster. In agreements to participate in
loans on a deferred basis under this subsection, such
participation by the Administration shall not be in excess of
90 per centum of the balance of the loan outstanding at the
time of disbursement. Notwithstanding any other provision of
law, the interest rate on the Administration's share of any
loan made pursuant to paragraph (1) of this subsection to
repair or replace a primary residence and/or replace or repair
damaged or destroyed personal property, less the amount of
compensation by insurance or otherwise, with respect to a
disaster occurring on or after July 1, 1976, and prior to
October 1, 1978, shall be: 1 per centum on the amount of such
loan not exceeding $10,000, and 3 per centum on the amount of
such loan over $10,000 but not exceeding $40,000. The interest
rate on the Administration's share of the first $250,000 of all
other loans made pursuant to paragraph (1) of this subsection,
with respect to a disaster occurring on or after July 1, 1976,
and prior to October 1, 1978, shall be 3 per centum. All
repayments of principal on the Administration's share of any
loan made under the above provisions shall first be applied to
reduce the principal sum of such loan which bears interest at
the lower rates provided in this paragraph. The principal
amount of any loan made pursuant to paragraph (1) in connection
with a disaster which occurs on or after April 1, 1977, but
prior to January 1, 1978, may be increased by such amount, but
not more than $2,000, as the Administration determines to be
reasonable in light of the amount and nature of loss, damage,
or injury sustained in order to finance the installation of
insulation in the property which was lost, damaged, or injured,
if the uninsured, damaged portion of the property is 10 per
centum or more of the market value of the property at the time
of the disaster. No later than June 1, 1978, the Administration
shall prepare and transmit to the Select Committee on Small
Business of the Senate, the Committee on Small Business of the
House of Representatives, and the Committee of the Senate and
House of Representatives having jurisdiction over measures
relating to energy conservation, a report on its activities
under this paragraph, including therein an evaluation of the
effect of such activities on encouraging the installation of
insulation in property which is repaired or replaced after a
disaster which is subject to this paragraph, and its
recommendations with respect to the continuation, modification,
or termination of such activities.
In the administration of the disaster loan program under
paragraphs (1) and (2) of this subsection, in the case of
property loss or damage or injury resulting from a major
disaster as determined by the President or a disaster as
determined by the Administrator which occurs on or after
January 1, 1971, and prior to July 1, 1973, the Small Business
Administration, to the extent such loss or damage or injury is
not compensated for by insurance or otherwise--
(A) may make any loan for repair, rehabilitation, or
replacement of property damaged or destroyed without
regard to whether the required financial assistance is
otherwise available from private sources;
(B) may, in the case of the total destruction or
substantial property damage of a home or business
concern, refinance any mortgage or other liens
outstanding against the destroyed or damaged property
if such project is to be repaired, rehabilitated, or
replaced, except that (1) in the case of a business
concern, the amount refinanced shall not exceed the
amount of the physical loss sustained, and (2) in the
case of a home, the amount of each monthly payment of
principal and interest on the loan after refinancing
under this clause shall be not less than the amount of
each such payment made prior to such refinancing;
(C) may, in the case of a loan made under clause (A)
or a mortgage or other lien refinanced under clause (B)
in connection with the destruction of, or substantial
damage to, property owned and used as a residence by an
individual who by reason of retirement, disability, or
other similar circumstances relies for support on
survivor, disability, or retirement benefits under a
pension, insurance, or other program, consent to the
suspension of the payments of the principal of that
loan, mortgage, or lien during the lifetime of that
individual and his souse for so long as the
Administration determines that making such payments
would constitute a substantial hardship;
(D) shall, notwithstanding the provisions of any
other law and upon presentation by the applicant of
proof of loss or damage or injury and a bona fide
estimate of cost of repair, rehabilitation, or
replacement, cancel the principal of any loan made to
cover a loss or damage or injury resulting from such
disaster, except that--
(i) with respect to a loan made in connection
with a disaster occurring on or after January
1, 1971 but prior to January 1, 1972, the total
amount so canceled shall not exceed $2,500, and
the interest on the balance of the loan shall
be at a rate of 3 per centum per annum; and
(ii) with respect to a loan made in
connection with a disaster occurring on or
after January 1, 1972 but prior to July 1,
1973, the total amount so canceled shall not
exceed $5,000, and the interest on the balance
of the loan shall be at a rate of 1 per centum
per annum.
With respect to any loan referred to in clause (D) which is
outstanding on the date of enactment of this paragraph, the
Administrator shall--
(i) make sure change in the interest rate on the
balance of such loan as is required under that clause
effective as of such date of enactment; and
(ii) in applying the limitation set forth in that
clause with respect to the total amount of such loan
which may be canceled, consider as part of the amount
so canceled any part of such loan which was previously
canceled pursuant to section 231 of the Disaster Relief
Act of 1970.
Whoever wrongfully misapplies the proceeds of a loan obtained
under this subsection shall be civilly liable to the
Administrator in an amount equal to one-and-one-half times the
original principal amount of the loan.
(E) A State grant made on or prior to July 1, 1979,
shall not be considered compensation for the purpose of
applying the provisions of section 312(a) of the
Disaster Relief and Emergency Assistance Act to a
disaster loan under paragraph (1) (2)of this
subsection.
(c) Private Disaster Loans.--
(1) Definitions.--In this subsection--
(A) the term ``disaster area'' means any area
for which the President declared a major
disaster relating to which the Administrator
declares eligibility for additional disaster
assistance under subsection (b)(9), during the
period of that major disaster declaration;
(B) the term ``eligible individual'' means an
individual who is eligible for disaster
assistance under subsection (b)(1) relating to
a major disaster relating to which the
Administrator declares eligibility for
additional disaster assistance under subsection
(b)(9);
(C) the term ``eligible small business
concern'' means a business concern that is--
(i) a small business concern, as
defined under this Act; or
(ii) a small business concern, as
defined in section 103 of the Small
Business Investment Act of 1958;
(D) the term ``preferred lender'' means a
lender participating in the Preferred Lender
Program;
(E) the term ``Preferred Lender Program'' has
the meaning given that term in subsection
(a)(2)(C)(ii); and
(F) the term ``qualified private lender''
means any privately-owned bank or other lending
institution that--
(i) is not a preferred lender; and
(ii) the Administrator determines
meets the criteria established under
paragraph (10).
(2) Program required.--The Administrator shall carry
out a program, to be known as the Private Disaster
Assistance program, under which the Administration may
guarantee timely payment of principal and interest, as
scheduled, on any loan made to an eligible small
business concern located in a disaster area and to an
eligible individual.
(3) Use of loans.--A loan guaranteed by the
Administrator under this subsection may be used for any
purpose authorized under subsection (b).
(4) Online applications.--
(A) Establishment.--The Administrator may
establish, directly or through an agreement
with another entity, an online application
process for loans guaranteed under this
subsection.
(B) Other federal assistance.--The
Administrator may coordinate with the head of
any other appropriate Federal agency so that
any application submitted through an online
application process established under this
paragraph may be considered for any other
Federal assistance program for disaster relief.
(C) Consultation.--In establishing an online
application process under this paragraph, the
Administrator shall consult with appropriate
persons from the public and private sectors,
including private lenders.
(5) Maximum amounts.--
(A) Guarantee percentage.--The Administrator
may guarantee not more than 85 percent of a
loan under this subsection.
(B) Loan amount.--The maximum amount of a
loan guaranteed under this subsection shall be
$2,000,000.
(6) Terms and conditions.--A loan guaranteed under
this subsection shall be made under the same terms and
conditions as a loan under subsection (b).
(7) Lenders.--
(A) In general.--A loan guaranteed under this
subsection made to--
(i) a qualified individual may be
made by a preferred lender; and
(ii) a qualified small business
concern may be made by a qualified
private lender or by a preferred lender
that also makes loans to qualified
individuals.
(B) Compliance.--If the Administrator
determines that a preferred lender knowingly
failed to comply with the underwriting
standards for loans guaranteed under this
subsection or violated the terms of the
standard operating procedure agreement between
that preferred lender and the Administration,
the Administrator shall do 1 or more of the
following:
(i) Exclude the preferred lender from
participating in the program under this
subsection.
(ii) Exclude the preferred lender
from participating in the Preferred
Lender Program for a period of not more
than 5 years.
(8) Fees.--
(A) In general.--The Administrator may not
collect a guarantee fee under this subsection.
(B) Origination fee.--The Administrator may
pay a qualified private lender or preferred
lender an origination fee for a loan guaranteed
under this subsection in an amount agreed upon
in advance between the qualified private lender
or preferred lender and the Administrator.
(9) Documentation.--A qualified private lender or
preferred lender may use its own loan documentation for
a loan guaranteed by the Administrator under this
subsection, to the extent authorized by the
Administrator. The ability of a lender to use its own
loan documentation for a loan guaranteed under this
subsection shall not be considered part of the criteria
for becoming a qualified private lender under the
regulations promulgated under paragraph (10).
(10) Implementation regulations.--
(A) In general.--Not later than 1 year after
the date of enactment of the Small Business
Disaster Response and Loan Improvements Act of
2008, the Administrator shall issue final
regulations establishing permanent criteria for
qualified private lenders.
(B) Report to congress.--Not later than 6
months after the date of enactment of the Small
Business Disaster Response and Loan
Improvements Act of 2008, the Administrator
shall submit a report on the progress of the
regulations required by subparagraph (A) to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives.
(11) Authorization of appropriations.--
(A) In general.--Amounts necessary to carry
out this subsection shall be made available
from amounts appropriated to the Administration
to carry out subsection (b).
(B) Authority to reduce interest rates and
other terms and conditions.--Funds appropriated
to the Administration to carry out this
subsection, may be used by the Administrator to
meet the loan terms and conditions specified in
paragraph (6).
(12) Purchase of loans.--The Administrator may enter
into an agreement with a qualified private lender or
preferred lender to purchase any loan guaranteed under
this subsection.
(d)(1) The Administration may further extend the maturity of
or renew any loan made pursuant to this section, or any loan
transferred to the Administration pursuant to Reorganization
Plan Numbered 2 of 1954, or Reorganization Plan Numbered 1 of
1957, for additional periods not to exceed ten years beyond the
period stated therein, if such extension or renewal will aid in
the orderly liquidation of such loan.
(2) During any period in which principal and interest
charges are suspended on the Federal share of any loan,
as provided in subsection (b), the Administrator shall,
upon the request of any person, firm, or corporation
having a participation in such loan, purchase such
participation, or assume the obligation of the
borrower, for the balance of such period, to make
principal and interest payments on the non-Federal
share of such loan: Provided, That no such payments
shall be made by the Administrator in behalf of any
borrower unless (i) the Administrator determines that
such action is necessary in order to avoid a default,
and (ii) the borrower agrees to make payments to the
Administration in an agreegate amount equal to the
amount paid in its behalf by the Administrator, in such
manner and at such time (during or after the term of
the loan) as the Administrator shall determine having
due regard to the purposes sought to be achieved by
this paragraph.
(3) With respect to a disaster occurring on or after
October 1, 1978, and prior the effective date of this
Act, on the Administration's share of loans made
pursuant to paragraph (1) of subsection (b)--
(A) if the loan proceeds are to
repair or replace a primary residence
and/or repair or replace damaged or
destroyed personal property, the
interest rate shall be 3 percent on the
first $55,000 of such loan;
(B) if the loan proceeds are to
repair or replace property damaged or
destroyed and if the applicant is a
business concern which is unable to
obtain sufficient credit elsewhere, the
interest rate shall be as determined by
the Administration, but not in excess
of 5 percent per annum; and
(C) if the loan proceeds are to repair or
replace property damaged or destroyed and if
the applicant is a business concern which is
able to obtain sufficient credit elsewhere, the
interest rate shall not exceed the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans and adjusted to the
nearest one-eight of 1 percent, and an
additional amount as determined by the
Administration, but not to exceed 1 percent:
Provided, That three years after such loan is
fully disbursed and every two years thereafter
for the term of the loan, if the Administration
determines that the borrower is able to obtain
a loan from one-Federal sources at reasonable
rates and terms for loans of similar purposes
and periods of time, the borrower shall, upon
request by the Administration, apply for and
accept such a loan in sufficient amount to
repay the Administration: Provided further,
That no loan under subsection (b)(1) shall be
made, either directly or in cooperation with
banks or other lending institutions through
agreements to participate on an immediate or
deferred basis, if the total amount outstanding
and committed to the borrower under such
subsection would exceed $500,000 for each
disaster, unless an applicant constitutes a
major source of employment in an area suffering
a disaster, in which case the Administration,
in its discretion, may waive the $500,000
limitation.
(4) Notwithstanding the provisions of any other law,
the interest rate on the Federal share of any loan made
under subsection (b) shall be--
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by
the Administration but not more than one-half
the rate determined by the Secretary of the
Treasury taking into consideration the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eight of 1 per
centum but not to exceed 8 per centum per
annum;
(B) in the case of a homeowner able to secure
credit elsewhere, the rate prescribed by the
Administration but not more than the rate
determined by the Secretary of the Treasury
taking into consideration the current average
market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum;
(C) in the case of a business concern unable
to obtain credit elsewhere, not to exceed 8 per
centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by
the Administration but not in excess of the
rate prevailing in private market for similar
loans and not more than the rate prescribed by
the Administration as the maximum interest rate
for deferred participation (guaranteed) loans
under section 7(a) of this Act. Loans under
this subparagraph shall be limited to a maximum
term of three years.
(5) Notwithstanding the provisions of any other law,
the interest rate on the Federal share of any loan made
under subsection (b)(1) and (b)(2) on account of a
disaster commencing on or after October 1, 1982, shall
be--
(A) in the case of a homeowner unable to
secure credit elsewhere, the rate prescribed by
the Administration but not more than one-half
the rate determined by the Secretary of the
Treasury taking into consideration the current
average market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loan plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 4 per centum per
annum;
(B) in the case of a homeowner, able to
secure credit elsewhere, the rate prescribed by
the Administration but not more than the rate
determined by the Secretary of the Treasury
taking into consideration the current average
market yield on outstanding marketable
obligations of the United States with remaining
periods to maturity comparable to the average
maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum
as determined by the Administrator, and
adjusted to the nearest one-eighth of 1 per
centum, but not to exceed 8 per centum per
annum;
(C) in the case of a business, private
nonprofit organization, or other concern,
including agricultural cooperatives, unable to
obtain credit elsewhere, not to exceed 4 per
centum per annum;
(D) in the case of a business concern able to
obtain credit elsewhere, the rate prescribed by
the Administration but not in excess of the
lowest of (i) the rate prevailing in the
private market for similar loans, (ii) the rate
prescribed by the Administration as the maximum
interest rate for deferred participation
(guaranteed) loans under section 7(a) of this
Act, or (iii) 8 per centum per annum. Loans
under this subparagraph shall be limited to a
maximum term of 7 years.
(6) Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
be in amounts equal to 100 per centum of loss. The
interest rate for loans made under paragraphs 7(b)(1)
and (2), as determined pursuant to paragraph (5), shall
be the rate of interest which is in effect on the date
of the disaster commenced: Provided, That no loan under
paragraphs 7(b) (1) and (2) shall be made, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred (guaranteed) basis, if the total
amount outstanding and committed to the borrower under
subsection 7(b) would exceed $500,000 for each disaster
unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which
case the Administration, in its discretion, may waive
the $500,000 limitation: Provided further, That the
Administration, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
not reduce the amount of eligibility for any homeowner
on account of loss of real estate to less than $100,000
for each disaster nor for any homeowner or lessee on
account of loss of personal property to less than
$20,000 for each disaster, such sums being in addition
to any eligible refinancing: Provided further, That the
Administration shall not require collateral for loans
of $25,000 or less (or such higher amount as the
Administrator determines appropriate in the event of a
disaster) which are made under paragraph (1) of
subsection (b): Provided further, That the
Administrator, in obtaining the best available
collateral for a loan of not more than $200,000 under
paragraph (1) or (2) of subsection (b) relating to
damage to or destruction of the property of, or
economic injury to, a small business concern, shall not
require the owner of the small business concern to use
the primary residence of the owner as collateral if the
Administrator determines that the owner has other
assets of equal quality and with a value equal to or
greater than the amount of the loan that could be used
as collateral for the loan: Provided further, That
nothing in the preceding proviso may be construed to
reduce the amount of collateral required by the
Administrator in connection with a loan described in
the preceding proviso or to modify the standards used
to evaluate the quality (rather than the type) of such
collateral. Employees of concerns sharing a common
business premises shall be aggregated in determining
``major source of employment'' status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding on the date of
enactment of this paragraph and which was made on account of a
disaster commencing on or after October 1, 1982, the
Administrator shall made such change in the interest rate on
the balance of such loan as is required herein effective as of
the date of enactment.
=======================================================================
[Note: Effective on November 25, 2018, section 2102(b) of
Public Law 114-88 provides for amendments to the third proviso
of section 7(d)(6). Upon such date, paragraph (6) will read as
follows:]
(6) Notwithstanding the provisions of any other law,
such loans, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
be in amounts equal to 100 per centum of loss. The
interest rate for loans made under paragraphs 7(b)(1)
and (2), as determined pursuant to paragraph (5), shall
be the rate of interest which is in effect on the date
of the disaster commenced: Provided, That no loan under
paragraphs 7(b) (1) and (2) shall be made, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred (guaranteed) basis, if the total
amount outstanding and committed to the borrower under
subsection 7(b) would exceed $500,000 for each disaster
unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which
case the Administration, in its discretion, may waive
the $500,000 limitation: Provided further, That the
Administration, subject to the reductions required by
subparagraphs (A) and (B) of paragraph 7(b)(1), shall
not reduce the amount of eligibility for any homeowner
on account of loss of real estate to less than $100,000
for each disaster nor for any homeowner or lessee on
account of loss of personal property to less than
$20,000 for each disaster, such sums being in addition
to any eligible refinancing: Provided further, That the
Administration shall not require collateral for loans
of $14,000 or less (or such higher amount as the
Administrator determines appropriate in the event of a
major disaster) which are made under paragraph (1) of
subsection (b): Provided further, That the
Administrator, in obtaining the best available
collateral for a loan of not more than $200,000 under
paragraph (1) or (2) of subsection (b) relating to
damage to or destruction of the property of, or
economic injury to, a small business concern, shall not
require the owner of the small business concern to use
the primary residence of the owner as collateral if the
Administrator determines that the owner has other
assets of equal quality and with a value equal to or
greater than the amount of the loan that could be used
as collateral for the loan: Provided further, That
nothing in the preceding proviso may be construed to
reduce the amount of collateral required by the
Administrator in connection with a loan described in
the preceding proviso or to modify the standards used
to evaluate the quality (rather than the type) of such
collateral. Employees of concerns sharing a common
business premises shall be aggregated in determining
``major source of employment'' status for nonprofit
applicants owning such premises.
With respect to any loan which is outstanding on the date of
enactment of this paragraph and which was made on account of a
disaster commencing on or after October 1, 1982, the
Administrator shall made such change in the interest rate on
the balance of such loan as is required herein effective as of
the date of enactment.
=======================================================================
(7) The Administration shall not withhold disaster assistance
pursuant to this paragraph to nurseries who are victims of
drought disasters. As used in section 7(b)(2) the term ``an
area affected by a disaster'' includes any county, or county
contiguous thereto, determined to be a disaster by the
President, the Secretary of Agriculture or the Administrator of
the Small Business Administration.
(8) Disaster loans for superstorm sandy.--
(A) In general.--Notwithstanding any other
provision of law, and subject to the same
requirements and procedures that are used to
make loans pursuant to subsection (b), a small
business concern, homeowner, nonprofit entity,
or renter that was located within an area and
during the time period with respect to which a
major disaster was declared by the President
under section 401 of the Robert T. Stafford
Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5170) by reason of Superstorm Sandy
may apply to the Administrator--
(i) for a loan to repair,
rehabilitate, or replace property
damaged or destroyed by reason of
Superstorm Sandy; or
(ii) if such a small business concern
has suffered substantial economic
injury by reason of Superstorm Sandy,
for a loan to assist such a small
business concern.
(B) Timing.--The Administrator shall select
loan recipients and make available loans for a
period of not less than 1 year after the date
on which the Administrator carries out this
authority.
(C) Inspector general review.--Not later than
6 months after the date on which the
Administrator begins carrying out this
authority, the Inspector General of the
Administration shall initiate a review of the
controls for ensuring applicant eligibility for
loans made under this paragraph.
(e) The Administration shall not fund any Small Business
Development Center or any variation thereof, except as
authorized in section 21 of this Act.
(f) Additional Requirements for 7(b) Loans.--
(1) Increased deferment authorized.--
(A) In general.--In making loans under
subsection (b), the Administrator may provide,
to the person receiving the loan, an option to
defer repayment on the loan.
(B) Period.--The period of a deferment under
subparagraph (A) may not exceed 4 years.
(g) Net Earnings Clauses Prohibited for 7(b) Loans.--In
making loans under subsection (b), the Administrator shall not
require the borrower to pay any non-amortized amount for the
first five years after repayment begins.
(e) [RESERVED].
(f) [RESERVED].
(h)(1) The Administration also is empowered, where other
financial assistance is not available on reasonable terms, to
make such loans (either directly or in cooperation with Banks
or other lending institutions through agreements to participate
on an immediate or deferred basis) as the Administration may
determine to be necessary or appropriate--
(A) to assist any public or private organization--
(i) which is organized under the laws of the
United States or of any State, operated in the
interest of handicapped individuals, the net
income of which does not inure in whole or in
part to the benefit of any shareholder or other
individual;
(ii) which complies with any applicable
occupational health and safety standard
prescribed by the Secretary of Labor; and
(iii) which, in the production of commodities
and in the provision of services during any
fiscal year in which it receives financial
assistance under this subsection, employs
handicapped individuals for not less than 75
per centum of the man-hours required for the
production or provision of the commodities or
services; or
(B) to assist any handicapped individual in
establishing, acquiring, or operating a small business
concern.
(2) The Administration's share of any loan made under this
subsection shall not exceed $350,000, nor may any such loan be
made if the total amount outstanding and committed (by
participation or otherwise) to the borrower from the business
loan and investment fund established by section 4(c)(1)(B) of
this Act would exceed $350,000. In agreements to participate in
loans on a deferred basis under this subsection, the
Administration's participation may total 100 per centum of the
balance of the loan at the time of disbursement. The
Administration's share of any loan made under this subsection
shall bear interest at the rate of 3 per centum per annum. The
maximum term of any such loan, including extensions and
renewals thereof, may not exceed fifteen years. All loans made
under this subsection shall be of such sound value or so
secured as reasonably to assure repayment: Provided, however,
That any reasonable doubt shall be resolved in favor of the
applicant.
(3) For purposes of this subsection, the term ``handicapped
individual'' means a person who has a physical, mental, or
emotional impairment, defect, ailment, disease, or disability
of a permanent nature which in any way limits the selection of
any type of employment for which the person would otherwise be
qualified or qualifiable.
(i)(1) The Administration also is empowered to make,
participate (on an immediate basis) in, or guarantee loans,
repayable in not more than fifteen years, to any small business
concern, or to any qualified person seeking to establish such a
concern, when it determines that such loans will further the
policies established in section 2(b) of this Act, with
particular emphasis on the preservation or establishment of
small business concerns located in urban or rural areas with
high proportions of unemployed or low-income individuals, or
owned by low-income individuals: Provided, however, That no
such loans shall be made, participated in, or guaranteed if the
total of such Federal assistance to a single borrower
outstanding at any one time would exceed $100,000. The
Administration may defer payments on the principal of such
loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful
establishment and operation of such concern. The Administration
may, in its discretion, as a condition of such financial
assistance, require that the borrower take steps to improve his
management skills by participating in a management training
program approved by the Administration: Provided, however, That
any management training program so approved must be of
sufficient scope and duration to provide reasonable opportunity
for the individuals served to develop entrepreneurial and
managerial self-sufficiency.
(2) The Administration shall encourage, as far as possible,
the participation of the private business community in the
program of assistance to such concerns, and shall seek to
stimulate new private lending activities to such concerns
through the use of the loan guarantees, participations in
loans, and pooling arrangements authorized by this subsection.
(3) To insure an equitable distribution between urban and
rural areas for loans between $3,500 and $100,000 made under
this subsection, the Administration is authorized to use the
agencies and agreements and delegations developed under title
III of the Economic Opportunity Act of 1964, as amended, as it
shall determine necessary.
(4) The Administration shall provide for the continuing
evaluation of programs under this subsection, including full
information on the location, income characteristics, and types
of businesses and individuals assisted, and on new private
lending activity stimulated, and the results of such evaluation
together with recommendations shall be included in the report
required by section 10(a) of this Act.
(5) Loans made pursuant to this subsection (including
immediate participation in and guarantees of such loans) shall
have such terms and conditions as the Administration shall
determine, subject to the following limitations--
(A) there is reasonable assurance of repayment of the
loan;
(B) the financial assistance is not otherwise
available on reasonable terms from private sources or
other Federal, State, or local programs;
(C) the amount of the loan, together with other funds
available, is adequate to assure completion of the
project or achievement of the purposes for which the
loan is made;
(D) the loan bears interest at a rate not less than
(i) a rate determined by the Secretary of the Treasury,
taking into consideration the average market yield on
outstanding Treasury obligations of comparable
maturity, plus (ii) such additional charge, if any,
toward covering other costs of the program as the
Administration may determine to be consistent with its
purposes: Provided, however, That the rate of interest
charged on loans made in redevelopment areas designated
under the Public Works and Economic Development Act of
1965 (42 U.S.C. 3108 et seq.) shall not exceed the rate
currently applicable to new loans made under section
201 of that Act (42 U.S.C. 3142); and
(E) fees not in excess of amounts necessary to cover
administrative expenses and probable losses may be
required on loan guarantees.
(6) The Administration shall take such steps as may be
necessary to insure that, in any fiscal year, at least 50 per
centum of the amounts loaned or guaranteed pursuant to this
subsection are allotted to small business concerns located in
urban areas identified by the Administration as having high
concentrations of unemployed or low-income individuals or to
small business concerns owned by low-income individuals. The
Administration shall define the meaning of low income as it
applies to owners of small business concerns eligible to be
assisted under this subsection.
(7) No financial assistance shall be extended pursuant to
this subsection when the Administration determines that the
assistance will be used in relocating establishments from one
area to another if such relocation would result in an increase
in unemployment in the area of original location.
(j)(1) the Administration shall provide financial assistance
to public or private organizations to pay all or part of the
cost of projects designated to provide technical or management
assistance to individuals or enterprises eligible for
assistance under sections 7(i), 7(j)(10), and 8(a) of this Act,
with special attention to small businesses located in areas of
high concentration of unemployed or low-income individuals, to
small businesses eligible to receive contracts pursuant to
section 8(a) of this Act.
(2) Financial assistance under this subsection may be
provided for projects, including, but not limited to--
(A) planning and research, including feasibility
studies and market research;
(B) the identification and development of new
business opportunities;
(C) the furnishing of centralized services with
regard to public services and Federal Government
programs including programs authorized under sections
7(i), (7)(j)(10), and 8(a) of this Act;
(D) the establishment and strengthening of business
service agencies, including trade associations and
cooperative; and
(E) the furnishing of business counseling, management
training, and legal and other related services, with
special emphasis on the development of management
training programs using the resources of the business
community, including the development of management
training opportunities in existing business, and with
emphasis in all cases upon providing management
training of sufficient scope and duration to develop
entrepreneurial and managerial self-sufficiency on the
part of the individuals served.
(3) The Administration shall encourage the placement of
subcontracts by businesses with small business concerns located
in area of high concentration of unemployed or low-income
individuals, with small businesses owned by low-income
individuals, and with small businesses eligible to receive
contracts pursuant to section 8(a) of this Act. The
Administration may provide incentives and assistance to such
businesses that will aid in the training and upgrading of
potential subcontractors or other small business concerns
eligible for assistance under section 7(i), 7(j), and 8(a), of
this Act.
(4) The Administration shall give preference to projects
which promote the ownership, participation in ownership, or
management of small businesses owned by low-income individuals
and small businesses eligible to receive contracts pursuant to
section 8(a) of this Act.
(5) The financial assistance authorized for projects under
this subsection includes assistance advanced by grant,
agreement, or contract.
(6) The Administration is authorized to make payments under
grants and contracts entered into under this subsection in lump
sum or installments, and in advance or by way of reimbursement,
and in the case of grants, with necessary adjustments on
account of overpayments or underpayments.
(7) To the extent feasible, services under this subsection
shall be provided in a location which is easily accessible to
the individuals and small business concerns served.
(9) The Administration shall take such steps as may be
necessary and appropriate, in coordination and cooperation with
the heads of other Federal departments and agencies, to insure
that contracts, subcontracts, and deposits made by the Federal
Government or with programs aided with Federal funds are placed
in such way as to further the purposes of sections 7(i), 7(j),
and 8(a) of this Act.
(10) There is established with the Administration a small
business and capital ownership development program (hereinafter
referred to as the ``Program'') which shall provide assistance
exclusively for small business concerns eligible to receive
contracts pursuant to section 8(a) of this Act. The program,
and all other services and activities authorized under section
7(j) and 8(a) of this Act, shall be managed by the Associate
Administrator for Minority Small Business and Capital Ownership
Development under the supervision of, and responsible to, the
Administrator.
(A) The Program shall--
(i) assist small business concerns
participating in the Program (either through
public or private organizations) to develop and
maintain comprehensive business plans which set
forth the Program Participant's specific
business targets, objectives, and goals
developed and maintained in conformity with
subparagraph (D).
(ii) provide for such other nonfinancial
services as deemed necessary for the
establishment, preservation, and growth of
small business concerns participating in the
Program, including but not limited to (I) loan
packaging, (II) financing counseling, (III)
accounting and bookkeeping assistance, (IV)
marketing assistance, and (V) management
assistance;
(iii) assist small business concerns
participating in the Program to obtain equity
and debt financing;
(iv) establish regular performance monitoring
and reporting systems for small business
concerns participating in the Program to assure
compliance with their business plans;
(v) analyze and report the causes of success
and failure of small business concerns
participating in the Program; and
(vi) provide assistance necessary to help
small business concerns participating in the
Program to procure surety bonds, with such
assistance including, but not limited to, (I)
the preparation of application forms required
to receive a surety bond, (II) special
management and technical assistance designed to
meet the specific needs of small business
concerns participating in the Program and which
have received or are applying to receive a
surety bond, and (III) guarantee from the
Administration pursuant to title IV, part B of
the Small Business Investment Act of 1958.
(B) Small business concerns eligible to receive
contracts pursuant to section 8(a) of this Act shall
participate in the Program.
(C)(i) A small business concern participating in any
program or activity conducted under the authority of
this paragraph or eligible for the award of contracts
pursuant to section 8(a) on September 1, 1988, shall be
permitted continued participation and eligibility in
such program or activity for a period of time which is
the greater of--
(I) 9 years less the number of years since
the award of its first contract pursuant to
section 8(a); or
(II) its original fixed program participation
term (plus any extension thereof) assigned
prior to the effective date of this paragraph
plus eighteen months.
(ii) Nothing contained in this subparagraph shall be
deemed to prevent the Administration from instituting a
termination or graduation pursuant to subparagraph (F)
or (H) for issues unrelated to the expiration of any
time period limitation.
(D)(i) Promptly after certification under paragraph
(11) a Program Participant shall submit a business plan
(hereinafter referred to as the plan'') as described in
clause (ii) of this subparagraph for review by the
Business Opportunity Specialist assigned to assist such
Program Participant. The plan may be a revision of a
preliminary business plan submitted by the Program
Participant or required by the Administration as a part
of the application for certification under this section
and shall be designed to result in the Program
Participant eliminating the conditions or circumstances
upon which the Administration determined eligibility
pursuant to section 8(a)(6). Such plan, and subsequent
modifications submitted under clause (iii) of this
subparagraph, shall be approved by the business
opportunity specialist prior to the Program Participant
being eligible for award of a contract pursuant to
section 8(a).
(ii) The plans submitted under this
subparagraph shall include the following:
(I) An analysis of market potential,
competitive environment, and other
business analyses estimating the
Program Participant's prospects for
profitable operations during the term
of program participation and after
graduation.
(II) An analysis of the Program
Participant's strengths and weaknesses
with particular attention to correcting
any financial, managerial, technical,
or personnel conditions which are
likely to impede the small business
concern from receiving contracts other
than those awarded under section 8(a).
(III) Specific targets, objectives,
and goals, for the business development
of the Program Participant during the
next and succeeding years utilizing the
results of the analyses conducted
pursuant to subclauses (I) and (II).
(IV) A transition management plan
outlining specific steps to assure
profitable business operations after
graduation (to be incorporated into the
Program Participant's plan during the
first year of the transitional stage of
Program participation).
(V) Estimates of contract awards
pursuant to section 8(a) and from other
sources, which the Program Participant
will require to meet the specific
targets, objectives, and goals for the
years covered by its plan. The
estimates established shall be
consistent with the provisions of
subparagraph (I) and section 8(a).
(iii) Each Program Participant shall annually
review its currently approved plan with its
Business Opportunity Specialist and modify such
plan as may be appropriate. Any modified plan
shall be submitted to the Administration for
approval. The currently approved plan shall be
considered valid until such time as a modified
plan is approved by the Business Opportunity
Specialist. Annual reviews pertaining to years
in the transitional stage of program
participation shall require, as appropriate, a
written verification that such Program
Participant has complied with the requirements
of subparagraph (I) relating to attaining
business activity from sources other than
contracts awarded pursuant to section 8(a).
(iv) Each Program Participant shall annually
forecast its needs for contract awards under
section 8(a) for the next program year and the
succeeding program year during the review of
its business plan, conducted pursuant to clause
(iii). Such forecast shall be known as the
section 8(a) contract support level and shall
be included in the Program Participant's
business plan. Such forecast shall include--
(I) the aggregate dollar value of
contract support to be sought on a
noncompetitive basis under section
8(a), reflecting compliance with the
requirements of subparagraph (I)
relating to attaining business activity
from sources other than contracts
awarded pursuant to section 8(a),
(II) the types of contract
opportunities being sought, identified
by Standard Industrial Classification
(SIC) Code or otherwise,
(III) an estimate of the dollar value
of contract support to be sought on a
competitive basis, and
(IV) such other information as may be
requested by the Business Opportunity
Specialist to provide effective
business development assistance to the
Program Participant.
(E) A small business concern participating in the
program conducted under the authority of this paragraph
and eligible for the award of contracts pursuant to
section 8(a) shall be denied all such assistance if
such concern--
(i) voluntarily elects not to continue
participation;
(ii) completes the period of Program
participation as prescribed by paragraph (15);
(iii) is terminated pursuant to a termination
proceeding conducted in accordance with section
8(a)(9); or
(iv) is graduated pursuant to a graduation
proceeding conducted in accordance with section
8(a)(9).
(F) For the purposes of section and 8(a), the terms
``terminated'' or ``termination'' means the total
denial or suspension of assistance under this paragraph
or under section 8(a) prior to the graduation of the
participating small business concern or prior to the
expiration of the maximum program participation in
term. An action for termination shall be based upon
good cause, including--
(i) the failure by such concern to maintain
its eligibility for Program participation;
(ii) the failure of the concern to engage in
business practices that will promote its
competitiveness within a reasonable period of
time as evidenced by, among other indicators, a
pattern of unjustified delinquent performance
or terminations for default with respect to
contracts awarded under the authority of
section 8(a);
(iii) a demonstrated pattern of failing to
make required submissions or responses to the
Administration in a timely manner;
(iv) the willful violation of any rule or
regulation of the Administration pertaining to
material issues;
(v) the debarment of the concern or its
disadvantaged owners by any agency pursuant to
subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation); or
(vi) the conviction of the disadvantaged
owner or an officer of the concern for any
offense indicating a lack of business integrity
including any conviction for embezzlement,
theft, forgery, bribery, falsification or
violation of section 16. For purposes of this
clause, no termination action shall be taken
with respect to a disadvantaged owner solely
because of the conviction of an officer of the
concern (who is other than a disadvantaged
owner) unless such owner conspired with,
abetted, or otherwise knowingly acquiesced in
the activity or omission that was the basis of
such officer's conviction.
(G) The Director of the Division may initiate a
termination proceeding by recommending such action to
the Associate Administrator for Minority Small Business
and Capital Ownership Development. Whenever the
Associate Administrator, or a designee of such officer,
determines such termination is appropriate, within 15
days after making such a determination the Program
Participant shall be provided a written notice of
intent to terminate, specifying the reasons for such
action. No Program Participant shall be terminated from
the Program pursuant to subparagraph (F) without first
being afforded an opportunity for a hearing in
accordance with section 8(a)(9).
(H) For the purposes of sections 7(j) and 8(a) the
term ``graduated'' or ``graduation'' means that the
Program Participant is recognized as successfully
completing the program by substantially achieving the
targets, objectives, and goals contained in the
concern's business plan thereby demonstrating its
ability to compete in the marketplace without
assistance under this section or section 8(a).
(I)(i) During the developmental stage of its
participation in the Program, a Program Participant
shall take all reasonable efforts within its control to
attain the targets contained in its business plan for
contracts awarded other than pursuant to section 8(a)
(hereinafter referred to as ``business activity
targets.''). Such efforts shall be made a part of the
business plan and shall be sufficient in scope and
duration to satisfy the Administration that the Program
Participant will engage a reasonable marketing strategy
that will maximize its potential to achieve its
business activity targets.
(ii) During the transitional stage of the Program a
Program Participant shall be subject to regulations
regarding business activity targets that are
promulgated by the Administration pursuant to clause
(iii);
(iii) The regulations referred to in clause (ii)
shall:
(I) establish business activity targets
applicable to Program Participants during the
fifth year and each succeeding year of Program
Participation; such targets, for such period of
time, shall reflect a reasonably consistent
increase in contracts awarded other than
pursuant to section 8(a), expressed as a
percentage of total sales; when promulgating
business activity targets the Administration
may establish modified targets for Program
Participants that have participated in the
Program for a period of longer than four years
on the effective date of this subparagraph;
(II) require a Program Participant to attain
its business activity targets;
(III) provide that, before the receipt of any
contract to be awarded pursuant to section
8(a), the Program Participant (if it is in the
transitional stage) must certify that it has
complied with the regulations promulgated
pursuant to subclause (II), or that it is in
compliance with such remedial measures as may
have been ordered pursuant to regulations
issued under subclause (V);
(IV) require the Administration to review
each Program Participant's performance
regarding attainment of business activity
targets during periodic reviews of such
Participant's business plan; and
(V) authorize the Administration to take
appropriate remedial measures with respect to a
Program Participant that has failed to attain a
required business activity target for the
purpose of reducing such Participant's
dependence on contracts awarded pursuant to
section 8(a); such remedial actions may
include, but are not limited to assisting the
Program Participant to expand the dollar volume
of its competitive business activity or
limiting the dollar volume of contracts awarded
to the Program Participant pursuant to section
8(a); except for actions that would constitute
a termination, remedial measures taken pursuant
to this subclause shall not be reviewable
pursuant to section 8(a)(9).
(J)(i) The Administration shall conduct an evaluation
of a Program Participant's eligibility for continued
participation in the Program whenever it receives
specific and credible information alleging that such
Program Participant no longer meets the requirements
for Program eligibility. Upon making a finding that a
Program Participant is no longer eligible, the
Administration shall initiate a termination proceeding
in accordance with subparagraph (F). A Program
Participant's eligibility for award of any contract
under the authority of section 8(a) may be suspended
pursuant to subpart 9.4 of title 48, Code of Federal
Regulations (or any successor regulation).
(ii)(I) Except as authorized by subclauses (II) or
(III), no award shall be made pursuant to section 8(a)
to a concern other than a small business concern.
(II) In determining the size of a small business
concern owned by a socially and economically
disadvantaged Indian tribe (or a wholly owned business
entity of such tribe), each firm's size shall be
independently determined without regard to its
affiliation with the tribe, any entity of the tribal
government, or any other business enterprise owned by
the tribe, unless the Administrator determines that one
or more such tribally owned business concerns have
obtained, or are likely to obtain, a substantial unfair
competitive advantage within an industry category.
(III) Any joint venture established under the
authority of section 602(b) of Public Law 100-656, the
``Business Opportunity Development Reform Act of
1988'', shall be eligible for award of a contract
pursuant to section 8(a).
(11)(A) The Associate Administrator for Minority Small
Business and Capital Ownership Development shall be responsible
for coordinating and formulating policies relating to Federal
assistance to small business concerns eligible for assistance
under section 7(i) of this Act and small business concerns
eligible to receive contracts pursuant to section 8(a) of this
Act.
(B)(i) Except as provided in clause (iii), no
individual who was determined pursuant to section 8(a)
to be socially and economically disadvantaged before
the effective date of this subparagraph shall be
permitted to assert such disadvantage with respect to
any other concern making application for certification
after such effective date.
(ii) Except as provided in clause (iii), any
individual upon whom eligibility is based
pursuant to section 8(a)(4) shall be permitted
to assert such eligibility for only one small
business concern.
(iii) A socially and economically
disadvantaged Indian tribe may own more than
one small business concern eligible for
assistance pursuant to section 7(j)(10) and
section 8(a) if--
(I) the Indian tribe does not own
another firm in the same industry which
has been determined to be eligible to
receive contracts under this program,
and
(II) the individuals responsible for
the management and daily operations of
the concern do not manage more than two
Program Participants.
(C) No concern, previously eligible for the award of
contracts pursuant to section 8(a), shall be subsequently
recertified for program participation if its prior
participation in the program was concluded for any of the
reasons described in paragraph (10)(E).
(D) A concern eligible for the award of contracts pursuant to
this subsection shall remain eligible for such contracts if
there is a transfer of ownership and control (as defined
pursuant to section 8(a)(4)) to individuals who are determined
to be socially and economically disadvantaged pursuant to
section 8(a). In the event of such a transfer, the concern, if
not terminated or graduated, shall be eligible for a period of
continued participation in the program not to exceed the time
limitations prescribed in paragraph (15).
(E) There is established a Division of Program Certification
and Eligibility (hereinafter referred to in this paragraph as
the Division'') that shall be made part of the Office of
Minority Small Business and Capital Ownership Development. The
Division shall be headed by a Director who shall report
directly to the Associate Administrator for Minority Small
Business and Capital Ownership Development. The Division shall
establish field offices within such regional offices of the
Administration as may be necessary to perform efficiently its
functions and responsibilities.
(F) Subject to the provisions of section 8(a)(9), the
functions and responsibility of the Division are to--
(i) receive, review and evaluate applications for
certification pursuant to paragraphs (4), (5), (6) and
(7) of section 8(a);
(ii) advise each program applicant within 15 days
after the receipt of an application as to whether such
application is complete and suitable for evaluation
and, if not, what matters must be rectified;
(iii) render recommendations on such applications to
the Associate Administrator for Minority Small Business
and Capital Ownership Development;
(iv) review and evaluate financial statements and
other submissions from concerns participating in the
program established by paragraph (10) to ascertain
continued eligibility to receive subcontracts pursuant
to section 8(a);
(v) make a request for the initiation of termination
or graduation proceedings, as appropriate, to the
Associate Administrator for Minority Small Business and
Capital Ownership Development;
(vi) make recommendations to the Associate
Administrator for Minority Small Business and Capital
Ownership Development concerning protests from
applicants that have been denied program admission;
(vii) decide protests regarding the status of a
concern as a disadvantaged concern for purposes of any
program or activity conducted under the authority of
subsection (d) of section 8, or any other provision of
Federal law that references such subsection for a
definition of program eligibility; and
(vii) implement such policy directives as may be
issued by the Associate Administrator for Minority
Small Business and Capital Ownership Development
pursuant to subparagraph (I) regarding, among other
things, the geographic distribution of concerns to be
admitted to the program and the industrial make-up of
such concerns.
(G) An applicant shall not be denied admission into the
program established by paragraph (10) due solely to a
determination by the Division that specific contract
opportunities are unavailable to assist in the development of
such concern unless--
(i) the Government has not previously procured and is
unlikely to procure the types of products or services
offered by the concern; or
(ii) the purchases of such products or services by
the Federal Government will not be in quantities
sufficient to support the developmental needs of the
applicant and other Program Participants providing the
same or similar items or services.
(H) Not later than 90 days after receipt of a
completed application for Program certification, the
Associate Administrator for Minority Small Business and
Capital Ownership Development shall certify a small
business concern as a Program Participant or shall deny
such application.
(I) Thirty days before the conclusion of each fiscal year,
the Director of the Division shall review all concerns that
have been admitted into the Program during the preceding 12-
month period. The review shall ascertain the number of
entrants, their geographic distribution and industrial
classification. The Director shall also estimate the expected
growth of the Program during the next fiscal year and the
number of additional Business Opportunity Specialists, if any,
that will be needed to meet the anticipated demand for the
Program. The findings and conclusions of the Director shall be
reported to the Associate Administrator for Minority Small
Business and Capital Ownership Development by September 30 of
each year. Based on such report and such additional data as may
be relevant, the Associate Administrator shall, by October 31
of each year, issue policy and program directives applicable to
such fiscal year that--
(i) establish priorities for the solicitation of
program applications from underrepresented regions and
industry categories;
(ii) assign staffing levels and allocate other
program resources as necessary to meet program needs;
and
(iii) establish priorities in the processing and
admission of new Program Participants as may be
necessary to achieve an equitable geographic
distribution of concerns and a distribution of concerns
across all industry categories in proportions needed to
increase significantly contract awards to small
business concerns owned and controlled by socially and
economically disadvantaged individuals. When
considering such increase the Administration shall give
due consideration to those industrial categories where
Federal purchases have been substantial but where the
participation rate of such concerns has been limited.
(12)(A) The Administration shall segment the Capital
Ownership Development Program into two stages: a developmental
stage; and a transitional stage.
(B) The developmental stage of program participation shall be
designed to assist the concern in its effort to overcome its
economic disadvantage by providing such assistance as may be
necessary and appropriate to access its markets and to
strengthen its financial and managerial skills.
(C) The transitional stage of program participation shall be
designed to overcome, insofar as practicable, the remaining
elements of economic disadvantage and to prepare such concern
for graduation from the program.
(13) A Program Participant, if otherwise eligible, shall be
qualified to receive the following assistance during the stages
of program participation specified in paragraph 12:
(A) Contract support pursuant to section 8(a).
(B) Financial assistance pursuant to section
7(a)(20).
(C) A maximum of two exemptions from the requirements
of section 1(a) of the Act entitled ``An Act providing
conditions for the purchase of supplies and the making
of contracts by the United States, and for other
purposes'', approved June 30, 1936 (49 Stat. 2036),
which exemptions shall apply only to contracts awarded
pursuant to section (8)(a) and shall only be used to
allow for contingent agreements by a small business
concern to acquire the machinery, equipment,
facilities, or labor needed to perform such contracts.
No exemption shall be made pursuant to this
subparagraph if the contract to which it pertains has
an anticipated value in excess of $10,000,000. This
subparagraph shall cease to be effective on October 1,
1992.
(D) A maximum of five exemptions from the
requirements of the Act entitled ``An Act requiring
contracts for the construction, alteration and repair
of any public building or public work of the United
States to be accompanied by a performance bond
protecting the United States and by an additional bond
for the protection of persons furnishing material and
labor for the construction, alteration, or repair of
said public buildings or public works'', approved
August 24, 1935 (49 Stat. 793), which exemptions shall
apply only to contracts awarded pursuant to section
8(a), except that, such exemptions may be granted under
this subparagraph only if--
(i) the Administration finds that such
concern is unable to obtain the requisite bond
or bonds from a surety and that no surety is
willing to issue a bond subject to the
guarantee provision of title IV of the Small
Business Investment Act of 1958 (15 U.S.C. 692
et seq.);
(ii) the Administration and the agency
providing the contracting opportunity have
provided for the protection of persons
furnishing materials or labor to the Program
Participant by arranging for the direct
disbursement of funds due to such persons by
the procuring agency or through any bank the
deposits of which are insured by the Federal
Deposit Insurance Corporation; and
(iii) the contract to which it pertains does
not exceed $3,000,000 in amount. This
subparagraph shall cease to be effective on
October 1, 1994.
(E) Financial assistance whereby the Administration
may purchase in whole or in part, and on behalf of such
concerns, skills training or upgrading for employees or
potential employees of such concerns. Such assistance
may be made without regard to section 18(a). Assistance
may be made by direct payment to the training provider
or by reimbursing the Program Participant or the
Participant's employee, if such reimbursement is found
to be reasonable and appropriate. For purposes of this
subparagraph the term ``training provider'' shall mean
an institution of higher education, a community or
vocational college, or an institution eligible to
provide skills training or upgrading under title I of
the Workforce Innovation and Opportunity Act. The
Administration shall, in consultation with the
Secretary of Labor, promulgate rules and regulations to
implement this subparagraph that establish acceptable
training and upgrading performance standards and
provide for such monitoring or audit requirements as
may be necessary to ensure the integrity of the
training effort. No financial assistance shall be
granted under the subparagraph unless the Administrator
determines that--
(i) such concern has documented that it has
first explored the use of existing cost-free or
cost-subsidized training programs offered by
public and private sector agencies working with
programs of employment and training and
economic development;
(ii) no more than five employees or potential
employees of such concern are recipients of any
benefits under this subparagraph at any one
time;
(iii) no more than $2,500 shall be made
available for any one employee or potential
employee;
(iv) the length of training or upgrading
financed by this subparagraph shall be no less
than one month nor more than six months;
(v) such concern has given adequate assurance
it will employ the trainee or upgraded employee
for at least six months after the training or
upgrading financed by this subparagraph has
been completed and each trainee or upgraded
employee has provided a similar assurance to
remain within the employ of such concern for
such period; if such concern, trainee, or
upgraded employee breaches this agreement, the
Administration shall be entitled to and shall
make diligent efforts to obtain from the
violating party the repayment of all funds
expended on behalf of the violating party, such
repayment shall be made to the Administration
together with such interest and costs of
collection as may be reasonable; the violating
party shall be barred from receiving any
further assistance under this subparagraph;
(vi) the training to be financed may take
place either at such concern's facilities or at
those of the training provider; and
(vii) such concern will maintain such records
as the Administration deems appropriate to
ensure that the provisions of this paragraph
and any other applicable law have not been
violated.
(F)(i) The transfer of technology or surplus property
owned by the United States to such a concern.
Activities designed to effect such transfer shall be
developed in cooperation with the heads of Federal
agencies and shall include the transfer by grant,
license, or sale of such technology or property to such
a concern. Such property may be transferred to Program
Participants on a priority basis. Technology or
property transferred under this subparagraph shall be
used by the concern during the normal conduct of its
business operation and shall not be sold or transferred
to any other party (other than the Government) during
such concern's term of participation in the Program and
for one year thereafter.
(ii)(I) In this clause--
(aa) the term ``covered period''
means the 2-year period beginning on
the date on which the President
declared the applicable major disaster;
and
(bb) the term ``disaster area'' means
the area for which the President has
declared a major disaster, during the
covered period.
(II) The Administrator may transfer
technology or surplus property under clause (i)
on a priority basis to a small business concern
located in a disaster area if--
(aa) the small business concern meets
the requirements for such a transfer,
without regard to whether the small
business concern is a Program
Participant; and
(bb) for a small business concern
that is a Program Participant, on and
after the date on which the President
declared the applicable major disaster,
the small business concern has not
received property under this
subparagraph on the basis of the status
of the small business concern as a
Program Participant.
(III) For any transfer of property under this
clause to a small business concern, the terms
and conditions shall be the same as a transfer
to a Program Participant, except that the small
business concern shall agree not to sell or
transfer the property to any party other than
the Federal Government during the covered
period.
(IV) A small business concern that receives a
transfer of property under this clause may not
receive a transfer of property under clause (i)
during the covered period.
(V) If a small business concern sells or
transfers property in violation of the
agreement described in subclause (III), the
Administrator may initiate proceedings to
prohibit the small business concern from
receiving a transfer of property under this
clause or clause (i), in addition to any other
remedy available to the Administrator.
(G) Training assistance whereby the Administration
shall conduct training sessions to assist individuals
and enterprises eligible to receive contracts under
section 8(a) in the development of business principles
and strategies to enhance their ability to successfully
compete for contracts in the marketplace.
(H) Joint ventures, leader-follower arrangements, and
teaming agreements between the Program Participant and
other Program Participants and other business concerns
with respect to contracting opportunities for the
research, development, full-scale engineering or
production of major systems. Such activities shall be
undertaken on the basis of programs developed by the
agency responsible for the procurement of the major
system, with the assistance of the Administration.
(I) Transitional management business planning
training and technical assistance.
(J) Program Participants in the developmental stage
of Program participation shall be eligible for the
assistance provided by subparagraphs (A), (B), (C),
(D), (E), (F), and (G).
(14) Program Participants in the transitional stage of
Program participation shall be eligible for the assistance
provided by subparagraphs (A), (B), (F), (G), (H), and (I) of
paragraph (13).
(15) Subject to the provisions of paragraph (10)(C), a small
business concern may receive developmental assistance under the
Program and contracts under section 8(a) for a total period of
not longer than nine years, measured from the date of its
certification under the authority of such section, of which--
(A) no more than four years may be spent in the
developmental stage of Program Participation; and
(B) no more than five years may be spent in the
transitional stage of Program Participation.
(16)(A) The Administrator shall develop and implement a
process for the systematic collection of data on the operations
of the Program established pursuant to paragraph (10).
(B) Not later than April 30 of each year, the Administrator
shall submit a report to the Congress on the Program that shall
include the following:
(i) The average personal net worth of individuals who
own and control concerns that were initially certified
for participation in the Program during the immediately
preceding fiscal year. The Administrator shall also
indicate the dollar distribution of net worths, at
$50,000 increments, of all such individuals found to be
socially and economically disadvantaged. For the first
report required pursuant to this paragraph the
Administrator shall also provide the data specified in
the preceding sentence for all eligible individuals in
the Program as of the effective date of this paragraph.
(ii) A description and estimate of the benefits and
costs that have accrued to the economy and the
Government in the immediately preceding fiscal year due
to the operations of those business concerns that were
performing contracts awarded pursuant to section 8(a).
(iii) A compilation and evaluation of those business
concerns that have exited the Program during the
immediately preceding three fiscal years. Such
compilation and evaluation shall detail the number of
concerns actively engaged in business operations, those
that have ceased or substantially curtailed such
operations, including the reasons for such actions, and
those concerns that have been acquired by other firms
or organizations owned and controlled by other than
socially and economically disadvantaged individuals.
For those businesses that have continued operations
after they exited from the Program, the Administrator
shall also separately detail the benefits and costs
that have accrued to the economy during the immediately
preceding fiscal year due to the operations of such
concerns.
(iv) A listing of all participants in the Program
during the preceding fiscal year identifying, by State
and by Region, for each firm: the name of the concern,
the race or ethnicity, and gender of the disadvantaged
owners, the dollar value of all contracts received in
the preceding year, the dollar amount of advance
payments received by each concern pursuant to contracts
awarded under section 8(a), and a description including
(if appropriate) an estimate of the dollar value of all
benefits received pursuant to paragraphs (13) and (14)
and section 7(a)(20) during such year.
(v) The total dollar value of contracts and options
awarded during the preceding fiscal year pursuant to
section 8(a) and such amount expressed as a percentage
of total sales of (I) all firms participating in the
Program during such year; and (II) of firms in each of
the nine years of program participation.
(vi) A description of such additional resources or
program authorities as may be required to provide the
types of services needed over the next two-year period
to service the expected portfolio of firms certified
pursuant to section 8(a).
(vii) The total dollar value of contracts and options
awarded pursuant to section 8(a), at such dollar
increments as the Administrator deems appropriate, for
each four digit standard industrial classification code
under which such contracts and options were classified.
(C) The first report required by subparagraph (B) shall
pertain to fiscal year 1990.
(k) In carrying out its functions under subsections 7(i),
7(j), and 8(a) of this Act, the Administration is authorized--
(1) to utilize, with their consent, the services and
facilities of Federal agencies without reimbursement,
and, with the consent of any State or political
subdivision of a State, accept and utilize the services
and facilities of such State or subdivision without
reimbursement;
(2) to accept, in the name of the Administration, and
employ or dispose of in furtherance of the purposes of
this Act, any money or property, real, personal, or
mixed, tangible, or intangible, received by gift,
device, bequest, or otherwise;
(3) to accept voluntary and uncompensated services,
notwithstanding the provisions of section 3679(b) of
the Revised Statutes (31 U.S.C. 655(b)); and
(4) to employ experts and consultants or
organizations thereof as authorized by section 15 of
the Administrative Expenses Act of 1946 (5 U.S.C. 55a),
except that no individual may be employed under the
authority of this subsection for more than one hundred
days in any fiscal year; to compensate individuals so
employed at rates not in excess of the daily equivalent
of the highest rate payable under section 5332 of title
5, United States Code, including traveltime; and to
allow them, while away from their homes or regular
places of business, travel expenses (including per diem
in lieu of subsistence) a authorized by section 5 of
such Act (5 U.S.C. 73b-2) for persons in the Government
service employed intermittently, while so employed:
Provided, however, That contracts for such employment
may be renewed annually.
(l) Small Business Intermediary Lending Pilot Program.--
(1) Definitions.--In this subsection--
(A) the term ``eligible intermediary''--
(i) means a private, nonprofit entity
that--
(I) seeks or has been awarded
a loan from the Administrator
to make loans to small business
concerns under this subsection;
and
(II) has not less than 1 year
of experience making loans to
startup, newly established, or
growing small business
concerns; and
(ii) includes--
(I) a private, nonprofit
community development
corporation;
(II) a consortium of private,
nonprofit organizations or
nonprofit community development
corporations; and
(III) an agency of or
nonprofit entity established by
a Native American Tribal
Government; and
(B) the term ``Program'' means the small
business intermediary lending pilot program
established under paragraph (2).
(2) Establishment.--There is established a 3-year
small business intermediary lending pilot program,
under which the Administrator may make direct loans to
eligible intermediaries, for the purpose of making
loans to startup, newly established, and growing small
business concerns.
(3) Purposes.--The purposes of the Program are--
(A) to assist small business concerns in
areas suffering from a lack of credit due to
poor economic conditions or changes in the
financial market; and
(B) to establish a loan program under which
the Administrator may provide loans to eligible
intermediaries to enable the eligible
intermediaries to provide loans to startup,
newly established, and growing small business
concerns for working capital, real estate, or
the acquisition of materials, supplies, or
equipment.
(4) Loans to eligible intermediaries.--
(A) Application.--Each eligible intermediary
desiring a loan under this subsection shall
submit an application to the Administrator that
describes--
(i) the type of small business
concerns to be assisted;
(ii) the size and range of loans to
be made;
(iii) the interest rate and terms of
loans to be made;
(iv) the geographic area to be served
and the economic, poverty, and
unemployment characteristics of the
area;
(v) the status of small business
concerns in the area to be served and
an analysis of the availability of
credit; and
(vi) the qualifications of the
applicant to carry out this subsection.
(B) Loan limits.--No loan may be made to an
eligible intermediary under this subsection if
the total amount outstanding and committed to
the eligible intermediary by the Administrator
would, as a result of such loan, exceed
$1,000,000 during the participation of the
eligible intermediary in the Program.
(C) Loan duration.--Loans made by the
Administrator under this subsection shall be
for a term of 20 years.
(D) Applicable interest rates.--Loans made by
the Administrator to an eligible intermediary
under the Program shall bear an annual interest
rate equal to 1.00 percent.
(E) Fees; collateral.--The Administrator may
not charge any fees or require collateral with
respect to any loan made to an eligible
intermediary under this subsection.
(F) Delayed payments.--The Administrator
shall not require the repayment of principal or
interest on a loan made to an eligible
intermediary under the Program during the 2-
year period beginning on the date of the
initial disbursement of funds under that loan.
(G) Maximum participants and amounts.--During
each of fiscal years 2011, 2012, and 2013, the
Administrator may make loans under the
Program--
(i) to not more than 20 eligible
intermediaries; and
(ii) in a total amount of not more
than $20,000,000.
(5) Loans to small business concerns.--
(A) In general.--The Administrator, through
an eligible intermediary, shall make loans to
startup, newly established, and growing small
business concerns for working capital, real
estate, and the acquisition of materials,
supplies, furniture, fixtures, and equipment.
(B) Maximum loan.--An eligible intermediary
may not make a loan under this subsection of
more than $200,000 to any 1 small business
concern.
(C) Applicable interest rates.--A loan made
by an eligible intermediary to a small business
concern under this subsection, may have a fixed
or a variable interest rate, and shall bear an
interest rate specified by the eligible
intermediary in the application of the eligible
intermediary for a loan under this subsection.
(D) Review restrictions.--The Administrator
may not review individual loans made by an
eligible intermediary to a small business
concern before approval of the loan by the
eligible intermediary.
(6) Termination.--The authority of the Administrator
to make loans under the Program shall terminate 3 years
after the date of enactment of the Small Business Job
Creation and Access to Capital Act of 2010.
(m) Microloan Program.--
(1)(A) Purposes.--The purposes of the Microloan
Program are--
(i) to assist women, low-income, veteran
(within the meaning of such term under section
3(q)), and minority entrepreneurs and business
owners and other individuals possessing the
capability to operate successful business
concerns;
(ii) to assist small business concerns in
those areas suffering from a lack of credit due
to economic downturns;
(iii) to establish a microloan program to be
administered by the Small Business
Administration--
(I) to make loans to eligible
intermediaries to enable such
intermediaries to provide small-scale
loans, particularly loans in amounts
averaging not more than $10,000, to
startup, newly established, or growing
small business concerns for working
capital or the acquisition of
materials, supplies, or equipment;
(II) to make grants to eligible
intermediaries that, together with non-
Federal matching funds, will enable
such intermediaries to provide
intensive marketing, management, and
technical assistance to microloan
borrowers;
(III) to make grants to eligible
nonprofit entities that, together with
non-Federal matching funds, will enable
such entities to provide intensive
marketing, management, and technical
assistance to assist low-income
entrepreneurs and other low-income
individuals obtain private sector
financing for their businesses, with or
without loan guarantees; and
(IV) to report to the Committees on
Small Business of the Senate and the
House of Representatives on the
effectiveness of the microloan program
and the advisability and feasibility of
implementing such a program nationwide;
and
(iv) to establish a welfare-to-work microloan
initiative, which shall be administered by the
Administration, in order to test the
feasibility of supplementing the technical
assistance grants provided under clauses (ii)
and (iii) of subparagraph (B) to individuals
who are receiving assistance under the State
program funded under part A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.), or
under any comparable State funded means tested
program of assistance for low-income
individuals, in order to adequately assist
those individuals in--
(I) establishing small businesses;
and
(II) eliminating their dependence on
that assistance.
(B) Establishment.--There is established a microloan
program, under which the Administration may--
(i) make direct loans to eligible
intermediaries, as provided under paragraph
(3), for the purpose of making short-term,
fixed interest rate microloans to startup,
newly established, and growing small business
concerns under paragraph (6);
(ii) in conjunction with such loans and
subject to the requirements of paragraph (4),
make grants to such intermediaries for the
purpose of providing intensive marketing,
management, and technical assistance to small
business concerns that are borrowers under this
subsection; and
(iii) subject to the requirements of
paragraph (5), make grants to nonprofit
entities for the purpose of providing
marketing, management, and technical assistance
to low-income individuals seeking to start or
enlarge their own businesses, if such
assistance includes working with the grant
recipient to secure loans in amounts not to
exceed $50,000 from private sector lending
institutions, with or without a loan guarantee
from the nonprofit entity.
(2) Eligibility for participation.--An intermediary
shall be eligible to receive loans and grants under
subparagraphs (B)(i) and (B)(ii) of paragraph (1) if
it--
(A) meets the definition in paragraph (10);
and
(B) has at least 1 year of experience making
microloans to startup, newly established, or
growing small business concerns and providing,
as an integral part of its microloan program,
intensive marketing, management, and technical
assistance to its borrowers.
(3) Loans to intermediaries.--
(A) Intermediary applications.--(i) In
general.--As part of its application for a
loan, each intermediary shall submit a
description to the Administration of--
(I) the type of businesses to be
assisted;
(II) the size and range of loans to
be made;
(III) the geographic area to be
served and its economic, proverty, and
unemployment characteristics;
(IV) the status of small business
concerns in the area to be served and
an analysis of their credit and
technical assistance needs;
(V) any marketing, management, and
technical assistance to be provided in
connection with a loan made under this
subsection;
(VI) the local economic credit
markets, including the costs associated
with obtaining credit locally;
(VII) the qualifications of the
applicant to carry out the purpose of
this subsection; and
(VIII) any plan to involve other
technical assistance providers (such as
counselors from the Service Corps of
Retired Executives or small business
development centers) or private sector
lenders in assisting selected business
concerns.
(ii) Selection of intermediaries.--In
selecting intermediaries to participate in the
program established under this subsection, the
Administration shall give priority to those
applicants that provide loans in amounts
averaging not more than $10,000.
(B) Intermediary contribution.--As a
condition of any loan made to an intermediary
under subparagraph (B)(i) of paragraph (1), the
Administrator shall require the intermediary to
contribute not less than 15 percent of the loan
amount in cash from non-Federal sources.
(C) Loan limits.--Notwithstanding subsection
(a)(3), no loan shall be made under this
subsection if the total amount outstanding and
committed to one intermediary (excluding
outstanding grants) from the business loan and
investment fund established by this Act would,
as a result of such loan, exceed $750,000 in
the first year of such intermediary's
participation in the program, and $5,000,000 in
the remaining years of the intermediary's
participation in the program.
(D)(i) In general.--The Administrator shall,
by regulation, require each intermediary to
establish a loan loss reserve fund, and to
maintain such reserve fund until all
obligations owed to the Administration under
this subsection are repaid.
(ii) Level of loan loss reserve fund.--
(I) In general.--Subject to subclause
(III), the Administrator shall require
the loan loss reserve fund of an
intermediary to be maintained at a
level equal to 15 percent of the
outstanding balance of the notes
receivable owed to the intermediary.
(II) Review of loan loss reserve.--
After the initial 5 years of an
intermediary's participation in the
program authorized by this subsection,
the Administrator shall, at the request
of the intermediary, conduct a review
of the annual loss rate of the
intermediary. Any intermediary in
operation under this subsection prior
to October 1, 1994, that requests a
reduction in its loan loss reserve
shall be reviewed based on the most
recent 5-year period preceding the
request.
(III) Reduction of loan loss
reserve.--Subject to the requirements
of clause IV, the Administrator may
reduce the annual loan loss reserve
requirement of an intermediary to
reflect the actual average loan loss
rate for the intermediary during the
preceding 5-year period, except that in
no case shall the loan loss reserve be
reduced to less than 10 percent of the
outstanding balance of the notes
receivable owed to the intermediary.
(IV) Requirements.--The Administrator
may reduce the annual loan loss reserve
requirement of an intermediary only if
the intermediary demonstrates to the
satisfaction of the Administrator
that--
(aa) the average annual loss
rate for the intermediary
during the preceding 5-year
period is less than 15 percent;
and
(bb) that no other factors
exist that may impair the
ability of the intermediary to
repay all obligations owed to
the Administration under this
subsection.
(E) Unavailability of comparable credit.--An
intermediary may make a loan under this
subsection of more than $20,000 to a small
business concern only if such small business
concern demonstrates that it is unable to
obtain credit elsewhere at comparable interest
rates and that it has good prospects for
success. In no case shall an intermediary make
a loan under this subsection of more than
$50,000, or have outstanding or committed to
any 1 borrower more than $50,000.
(F) Loan duration; interest rates.--
(i) Loan duration.--Loans made by the
Administration under this subsection
shall be for a term of 10 years.
(ii) Applicable interest rates.--
Except as provided in clause (iii),
loans made by the Administration under
this subsection to an intermediary
shall bear an interest rate equal to
1.25 percentage points below the rate
determined by the Secretary of the
Treasury for obligations of the United
States with a period of maturity of 5
years, adjusted to the nearest one-
eighth of 1 percent.
(iii) Rates applicable to certain
small loans.--Loans made by the
Administration to an intermediary that
makes loans to small business concerns
and entrepreneurs averaging not more
than $7,500, shall bear an interest
rate that is 2 percentage points below
the rate determined by the Secretary of
the Treasury for obligations of the
United States with a period of maturity
of 5 years, adjusted to the nearest
one-eighth of 1 percent.
(iv) Rates applicable to multiple
sites or offices.--The interest rate
prescribed in clause (ii) or (iii)
shall apply to each separate loan-
making site or office of 1 intermediary
only if such site or office meets the
requirements of that clause.
(v) Rate basis.--The applicable rate
of interest under this paragraph
shall--
(I) be applied retroactively
for the first year of an
intermediary's participation in
the program, based upon the
actual lending practices of the
intermediary as determined by
the Administration prior to the
end of such year; and
(II) be based in the second
and subsequent years of an
intermediary's participation in
the program, upon the actual
lending practices of the
intermediary during the term of
the intermediary's
participation in the program.
(vii) Covered intermediaries.--The
interest rates prescribed in this
subparagraph shall apply to all loans
made to intermediaries under this
subsection on or after October 28,
1991.
(G) Delayed payments.--The Administration
shall not require repayment of interest or
principal of a loan made to an intermediary
under this subsection during the first year of
the loan.
(H) Fees; collateral.--Except as provided in
subparagraphs (B) and (D), the Administration
shall not charge any fees or require collateral
other than an assignment of the notes
receivable of the microloans with respect to
any loan made to an intermediary under this
subsection.
(4) Marketing, management and technical assistance
grants to intermediaries.--Grants made in accordance
with subparagraph (B)(ii) of paragraph (1) shall be
subject to the following requirements:
(A) Grant amounts.--Except as otherwise
provided in subparagraph (C) and subject to
subparagraph (B), each intermediary that
receives a loan under subparagraph (B)(i) of
paragraph (1) shall be eligible to receive a
grant to provide marketing, management, and
technical assistance to small business concerns
that are borrowers under this subsection.
Except as provided in subparagraph (C), each
intermediary meeting the requirements of
subparagraph (B) may receive a grant of not
more than 25 percent of the total outstanding
balance of loans made to it under this
subsection.
(B) Contribution.--As a condition of a grant
made under subparagraph (A), the Administrator
shall require the intermediary to contribute an
amount equal to 25 percent of the amount of the
grant, obtained solely from non-Federal
sources. In addition to cash or other direct
funding, the contribution may include indirect
costs or in-kind contributions paid for under
non-Federal programs.
(C) Additional technical assistance grants
for making certain loans.--
(i) In general.--In addition to
grants made under subparagraph (A),
each intermediary shall be eligible to
receive a grant equal to 5 percent of
the total outstanding balance of loans
made to the intermediary under this
subsection if--
(I) the intermediary provides
not less than 25 percent of its
loans to small business
concerns located in or owned by
one or more residents of an
economically distressed area;
or
(II) the intermediary has a
portfolio of loans made under
this subsection that averages
not more than $10,000 during
the period of the
intermediary's participation in
the program.
(ii) Purposes.--A grant awarded under
clause (i) may be used to provide
marketing, management, and technical
assistance to small business concerns
that are borrowers under this
subsection.
(iii) Contribution exception.--The
contribution requirements in
subparagraph (B) do not apply to grants
made under this subparagraph.
(D) Eligibility for multiple sites or
offices.--The eligibility for a grant described
in subparagraph (A) or (C) shall be determined
separately for each loan-making site or office
of 1 intermediary.
(E) Assistance to certain small business
concerns.--
(i) In general.--Each intermediary
may expend an amount not to exceed [25]
50 percent of the grant funds received
under paragraph (1)(B)(ii) to provide
information and technical assistance to
small business concerns that are
prospective borrowers under this
subsection.
(ii) Technical assistance.--An
intermediary may expend not more than
[25] 50 percent of the funds received
under paragraph (1)(B)(ii) to enter
into third party contracts for the
provision of technical assistance.
(F) Supplemental grant.--
(i) In general.--The Administration
may accept any funds transferred to the
Administration from other departments
or agencies of the Federal Government
to make grants in accordance with this
subparagraph and section 202(b) of the
Small Business Reauthorization Act of
1997 to participating intermediaries
and technical assistance providers
under paragraph (5), for use in
accordance with clause (iii) to provide
additional technical assistance and
related services to recipients of
assistance under a State program
described in paragraph (1)(A)(iv) at
the time they initially apply for
assistance under this subparagraph.
(ii) Eligible recipients; grant
amounts.--In making grants under this
subparagraph, the Administration may
select, from among participating
intermediaries and technical assistance
providers described in clause (i), not
more than 20 grantees in fiscal year
1998, not more than 25 grantees in
fiscal year 1999, and not more than 30
grantees in fiscal year 2000, each of
whom may receive a grant under this
subparagraph in an amount not to exceed
$200,000 per year.
(iii) Use of grant amounts.--Grants
under this subparagraph--
(I) are in addition to other
grants provided under this
subsection and shall not
require the contribution of
matching amounts as a condition
of eligibility; and
(II) may be used by a
grantee--
(aa) to pay or
reimburse a portion of
child care and
transportation costs of
recipients of
assistance described in
clause (i), to the
extent such costs are
not otherwise paid by
State block grants
under the Child Care
Development Block Grant
Act of 1990 (42 U.S.C.
9858 et seq.) or under
part A of title IV of
the Social Security Act
(42 U.S.C. 601 et
seq.); and
(bb) for marketing,
management, and
technical assistance to
recipients of
assistance described in
clause (i).
(iv) Memorandum of understanding.--
Prior to accepting any transfer of
funds under clause (i) from a
department or agency of the Federal
Government, the Administration shall
enter into a Memorandum of
Understanding with the department or
agency, which shall--
(I) specify the terms and
conditions of the grants under
this subparagraph; and
(II) provide for appropriate
monitoring of expenditures by
each grantee under this
subparagraph and each recipient
of assistance described in
clause (i) who receives
assistance from a grantee under
this subparagraph, in order to
ensure compliance with this
subparagraph by those grantees
and recipients of assistance.
(5) Private sector borrowing technical assistance
grants.--Grants made in accordance with subparagraph
(B)(iii) of paragraph (1) shall be subject to the
following requirements:
(A) Grant amounts.--Subject to the
requirements of subparagraph (B), the
Administration may make not more than 55 grants
annually, each in amounts not to exceed
$200,000 for the purposes specified in
subparagraph (B)(iii) of paragraph (1).
(B) Contribution.--As a condition of any
grant made under subparagraph (A), the
Administration shall require the grant
recipient to contribute an amount equal to 20
percent of the amount of the grant, obtained
solely from non-Federal sources. In addition to
cash or other direct funding, the contribution
may include indirect costs or in-kind
contributions paid for under non-Federal
programs.
(6) Loans to small business concerns from eligible
intermediaries.--
(A) In general.--An eligible intermediary
shall make short-term, fixed rate loans to
startup, newly established, and growing small
business concerns from the funds made available
to it under subparagraph (B)(i) of paragraph
(1) for working capital and the acquisition of
materials, supplies, furniture, fixtures, and
equipment.
(B) Portfolio requirement.--To the extent
practicable, each intermediary that operates a
microloan program under this subsection shall
maintain a microloan portfolio with an average
loan size of not more than $15,000.
(C) Interest limit.--Notwithstanding any
provision of the laws of any State or the
constitution of any State pertaining to the
rate or amount of interest that may be charged,
taken, received, or reserved on a loan, the
maximum rate of interest to be charged on a
microloan funded under this subsection shall
not exceed the rate of interest applicable to a
loan made to an intermediary by the
Administration--
(i) in the case of a loan of more
than $7,500 made by the intermediary to
a small business concern or
entrepreneur by more than 7.75
percentage points; and
(ii) in the case of a loan of not
more than $7,500 made by the
intermediary to a small business
concern or entrepreneur by more than
8.5 percentage points.
(D) Review restriction.--The Administration
shall not review individual microloans made by
intermediaries prior to approval.
(E) Establishment of child care or
transportation businesses.--In addition to
other eligible small businesses concerns,
borrowers under any program under this
subsection may include individuals who will use
the loan proceeds to establish for-profit or
nonprofit child care establishments or
businesses providing for-profit transportation
services.
(7) Program funding for microloans.--
(A) Number of participants.--Under the
program authorized by this subsection, the
Administration may fund, on a competitive
basis, not more than 300 intermediaries.
(B) Allocation.--
(i) Minimum allocation.--Subject to
the availability of appropriations, of
the total amount of new loan funds made
available for award under this
subsection in each fiscal year, the
Administration shall make available for
award in each State (including the
District of Columbia, the Commonwealth
of Puerto Rico, the United States
Virgin Islands, Guam, and American
Samoa) an amount equal to the sum of--
(I) the lesser of--
(aa) $800,000; or
(bb) \1/55\ of the
total amount of new
loan funds made
available for award
under this subsection
for that fiscal year;
and
(II) any additional amount,
as determined by the
Administration.
(ii) Redistribution.--If, at the
beginning of the third quarter of a
fiscal year, the Administration
determines that any portion of the
amount made available to carry out this
subsection is unlikely to be made
available under clause (i) during that
fiscal year, the Administration may
make that portion available for award
in any one or more States (including
the District of Columbia, the
Commonwealth of Puerto Rico, the United
States Virgin Islands, Guam, and
American Samoa) without regard to
clause (i).
(8) Equitable distribution of intermediaries.--In
approving microloan program applicants and providing
funding to intermediaries under this subsection, the
Administration shall select and provide funding to such
intermediaries as will ensure appropriate availability
of loans for small businesses in all industries located
throughout each State, particularly those located in
urban and in rural areas.
(9) Grants for management, marketing, technical
assistance, and related services.--
(A) In general.--The Administration may
procure technical assistance for intermediaries
participating in the Microloan Program to
ensure that such intermediaries have the
knowledge, skills, and understanding of
microlending practices necessary to operate
successful microloan programs.
(B) Assistance amount.--The Administration
shall transfer 7 percent of its annual
appropriation for loans and loan guarantees
under this subsection to the Administration's
Salaries and Expense Account for the specific
purpose of providing 1 or more technical
assistance grants to experienced microlending
organizations and national and regional
nonprofit organizations that have demonstrated
experience in providing training support for
microenterprise development and financing. to
achieve the purpose set forth in subparagraph
(A).
(C) Welfare-to-work microloan initiative.--Of
amounts made available to carry out the
welfare-to-work microloan initiative under
paragraph (1)(A)(iv) in any fiscal year, the
Administration may use not more than 5 percent
to provide technical assistance, either
directly or through contractors, to welfare-to-
work microloan initiative grantees, to ensure
that, as grantees, they have the knowledge,
skills, and understanding of microlending and
welfare-to-work transition, and other related
issues, to operate a successful welfare-to-work
microloan initiative.
(10) Report to congress.--On November 1, 1995, the
Administration shall submit to the Committees on Small
Business of the Senate and the House of Representatives
a report, including the Administration's evaluation of
the effectiveness of the first 3\1/2\ years of the
microloan program and the following:
(A) the numbers and locations of the
intermediaries funded to conduct microloan
programs;
(B) the amounts of each loan and each grant
to intermediaries;
(C) a description of the matching
contributions of each intermediary;
(D) the numbers and amounts of microloans
made by the intermediaries to small business
concern borrowers;
(E) the repayment history of each
intermediary;
(F) a description of the loan portfolio of
each intermediary including the extent to which
it provides microloans to small business
concerns in rural areas; and
(G) any recommendations for legislative
changes that would improve program operations.
(11) Definitions.--For purposes of this subsection--
(A) the term ``intermediary'' means--
(i) a private, nonprofit entity;
(ii) a private, nonprofit community
development corporation;
(iii) a consortium of private,
nonprofit organizations or nonprofit
community development corporations;
(iv) a quasi-governmental economic
development entity (such as a planning
and development district), other than a
State, county, municipal government, or
any agency thereof, if--
(I) no application is
received from an eligible
nonprofit organization; or
(II) the Administration
determines that the needs of a
region or geographic area are
not adequately served by an
existing, eligible nonprofit
organization that has submitted
an application; or
(v) an agency of or nonprofit entity
established by a Native American Tribal
Government,
that seeks to borrow or has borrowed funds from
the Administration to make microloans to small
business concerns under this subsection;
(B) the term ``microloan'' means a short-
term, fixed rate loan of not more than $50,000,
made by an intermediary to a startup, newly
established, or growing small business concern;
(C) the term ``rural area'' means any
political subdivision or unincorporated area--
(i) in a nonmetropolitan county (as
defined by the Secretary of
Agriculture) or its equivalent thereof;
or
(ii) in a metropolitan county or its
equivalent that has a resident
population of less than 20,000 if the
Small Business Administration has
determined such political subdivision
or area to be rural; and
(D) the term ``economically distressed
area'', as used in paragraph (4), means a
county or equivalent division of local
government of a State in which the small
business concern is located, in which,
according to the most recent data available
from the Bureau of the Census, Department of
Commerce, not less than 40 percent of residents
have an annual income that is at or below the
poverty level.
(12) Deferred participation loan pilot.--In lieu of
making direct loans to intermediaries as authorized in
paragraph (1)(B), during fiscal years 1998 through
2000, the Administration may, on a pilot program basis,
participate on a deferred basis of not less than 90
percent and not more than 100 percent on loans made to
intermediaries by a for-profit or nonprofit entity or
by alliances of such entities, subject to the following
conditions:
(A) Number of loans.--In carrying out this
paragraph, the Administration shall not
participate in providing financing on a
deferred basis to more than 10 intermediaries
in urban areas or more than 10 intermediaries
in rural areas.
(B) Term of loans.--The term of each loan
shall be 10 years. During the first year of the
loan, the intermediary shall not be required to
repay any interest or principal. During the
second through fifth years of the loan, the
intermediary shall be required to pay interest
only. During the sixth through tenth years of
the loan, the intermediary shall be required to
make interest payments and fully amortize the
principal.
(C) Interest rate.--The interest rate on each
loan shall be the rate specified by paragraph
(3)(F) for direct loans.
(13) Evaluation of welfare-to-work microloan
initiative.--On January 31, 1999, and annually
thereafter, the Administration shall submit to the
Committees on Small Business of the House of
Representatives and the Senate a report on any monies
distributed pursuant to paragraph (4)(F).
(n) Repayment Deferred for Active Duty Reservists.--
(1) Definitions.--In this subsection:
(A) Eligible reservist.--The term ``eligible
reservist'' means a member of a reserve
component of the Armed Forces ordered to active
duty during a period of military conflict.
(B) Essential employee.--The term ``essential
employee'' means an individual who is employed
by a small business concern and whose
managerial or technical expertise is critical
to the successful day-to-day operations of that
small business concern.
(C) Period of military conflict.--The term
``period of military conflict'' means--
(i) a period of war declared by the
Congress;
(ii) a period of national emergency
declared by the Congress or by the
President; or
(iii) a period of a contingency
operation, as defined in section 101(a)
of title 10, United States Code.
(D) Qualified borrower.--The term ``qualified
borrower'' means--
(i) an individual who is an eligible
reservist and who received a direct
loan under subsection (a) or (b) before
being ordered to active duty; or
(ii) a small business concern that
received a direct loan under subsection
(a) or (b) before an eligible
reservist, who is an essential
employee, was ordered to active duty.
(2) Deferral of direct loans.--
(A) In general.--The Administration shall,
upon written request, defer repayment of
principal and interest due on a direct loan
made under subsection (a) or (b), if such loan
was incurred by a qualified borrower.
(B) Period of deferral.--The period of
deferral for repayment under this paragraph
shall begin on the date on which the eligible
reservist is ordered to active duty and shall
terminate on the date that is 180 days after
the date such eligible reservist is discharged
or released from active duty.
(C) Interest rate reduction during
deferral.--Notwithstanding any other provision
of law, during the period of deferral described
in subparagraph (B), the Administration may, in
its discretion, reduce the interest rate on any
loan qualifying for a deferral under this
paragraph.
(3) Deferral of loan guarantees and other
financings.--The Administration shall--
(A) encourage intermediaries participating in
the program under subsection (m) to defer
repayment of a loan made with proceeds made
available under that subsection, if such loan
was incurred by a small business concern that
is eligible to apply for assistance under
subsection (b)(3); and
(B) not later than 30 days after the date of
the enactment of this subsection, establish
guidelines to--
(i) encourage lenders and other
intermediaries to defer repayment of,
or provide other relief relating to,
loan guarantees under subsection (a)
and financings under section 504 of the
Small Business Investment Act of 1958
that were incurred by small business
concerns that are eligible to apply for
assistance under subsection (b)(3), and
loan guarantees provided under
subsection (m) if the intermediary
provides relief to a small business
concern under this paragraph; and
(ii) implement a program to provide
for the deferral of repayment or other
relief to any intermediary providing
relief to a small business borrower
under this paragraph.
* * * * * * *
----------
SECTION 633 OF DIVISION E OF THE CONSOLIDATED APPROPRIATIONS ACT, 2017
Sec. 633. (a) For fiscal years 2016 through 2026, the Office
of Personnel Management shall provide to each affected
individual as defined in subsection (b) complimentary identity
protection coverage that--
(1) is not less comprehensive than the complimentary
identity protection coverage that the Office provided
to affected individuals before the date of enactment of
this Act; and
[(2) is effective for a period of not less than 10
years; and]
[(3)] (2) includes not less than $5,000,000 in
identity theft insurance.
(b) Definition In this section, the term ``affected
individual'' means any individual whose Social Security Number
was compromised during--
(1) the data breach of personnel records of current
and former Federal employees, at a network maintained
by the Department of the Interior, that was announced
by the Office of Personnel Management on June 4, 2015;
or
(2) the data breach of systems of the Office of
Personnel Management containing information related to
the background investigations of current, former, and
prospective Federal employees, and of other
individuals.
----------
LOCAL BUDGET AUTONOMY AMENDMENT ACT OF 2012
An Act To amend the District of Columbia Home Rule Act to provide for
local budget autonomy.
Be It Enacted by the Council of the District of Columbia,
[That this act may be cited as the ``Local Budget Autonomy
Amendment Act of 2012''.
[Sec. 2. The District of Columbia Home Rule Act, approved
December 24, 1973 (87 Stat. 777; D.C. Official Code Sec. 1-
201.01 et seq.), is amended as follows:
[(a) The table of contents is amended by striking the
phrase ``Sec. 446. Enactment of Appropriations by Congress''
and inserting the phrase ``Sec. 446. Enactment of local budget
by Council'' in its place.
[(b). Section 404(f) (D.C. Official Code Sec. 1-204.04(f)
is amended by striking the phrase ``transmitted by the Chairman
to the President of the United States'' both times it appears
and inserting the phrase ``incorporated in the budget act and
become law subject to the provisions of section 602(c)'' in its
place.
[(c) Section 412 (D.C. Official Code Sec. 1-204.12) is
amended by striking the phrase 14. ``(other than an act to
which section 446 applies)''.
[(d) Section 441(a) (D.C. Official Code Sec. 1-204.41(a))
is amended--by striking the phrase ``budget and accounting
year.'' and inserting the phrase ``budget and accounting year.
The District may change the fiscal year of the District by an
act of the Council. If a change occurs, such fiscal year shall
also constitute the budget and accounting year.'' in its place.
[(e) Section 446 (D.C. Official Code Sec. 1-204.46) is
amended to read as follows:
[``ENACTMENT OF LOCAL BUDGET BY COUNCIL.
[``Sec. 446. (a) Adoption of Budgets and Supplements.--The
Council, within 70 calendar days, or as otherwise provided by
law, after receipt of the budget proposal from the Mayor, and
after public hearing, and by a vote of a majority of the
members present and voting, shall by act adopt the annual
budget for the District of Columbia government. The federal
portion of the annual budget shall be submitted by the Mayor to
the President for transmission to Congress. The local portion
of the annual budget shall be submitted by the Chairman of the
Council to the Speaker of the House of Representatives pursuant
to the. procedure set forth in section 602(c). Any supplements
to the annual budget shall also be adopted by act of the
Council, after public hearing, by a vote of a majority of the
members present and voting.
[``(b) Transmission to President During Control Years.--
In'the case of a budget for a fiscal year which is a control
year, the budget so adopted shall be submitted by the Mayor to
the President for transmission by the President to the
Congress; except, that the Mayor shall not transmit any such
budget, or amendments or supplements to the budget, to the
President until the completion of the budget procedures
contained in this Act and the District of Columbia Financial
Responsibility and Management Assistance Act of 1995.
[(c) Prohibiting Obligations and Expenditures Not
Authorized Under Budget.--Except as provided in section
445A(b), section 446B, section 467(d), section 47I(c), section
472(d)(2), section 475(e)(2), section 483(d), and subsections
(f), (g), (h)(3), and (i)(3) of section 490, no amount may be
obligated or expended by any officer or employee of the
District of Columbia government unless--
[``(1) such amount has been approved by an act of the
Council (and then only in accordance with such
authorization) and such act has been transmitted by the
Chairman to the Congress and has completed the review
process under section 602(c)(3); or
[``(2) in the case of an amount obligated or expended
during a control year, such amount has been approved by
an Act of Congress (and then only in accordance with
such authorization).
[``(d) Restrictions on Reprogramming of Amounts.--After the
adoption of the annual budget or a fiscal year (beginning with
the annual budget for fiscal year 1995), no reprogramming of
amounts in the budget may occur unless the Mayor submits to the
Council a request for such reprogramming and the Council
approves the request, but and only if any additional
expenditures provided under such request for an activity are
offset by reductions in expenditures for another activity.
[``(e) Definition.--In this part, the term ``control year''
has the meaning given such term in section 305(4) of the
District of Columbia Financial Responsibility and Management
Assistance Act of 1995.''.
[(f) Section 446B(a) (D.C., Official Code Sec. 1-
204.46b(a)) is amended as follows:
[(1) Strike the phrase ``the fourth sentence of
section 446'' and insert the phrase ``section 446(c)''
in its place.
[(2) Strike the phrase ``approved by Act of
Congress''.
[(g) Section 447 (D.C. Official Code Sec. 1-204.47) is
amended as follows:
[(1) Strike the phrase. ``Act of Congress'' each time
it appears and insert the phrase ``act of the Council
(or Act of Congress, in the case of a year which is a
control year)'' in its place.
[(2) Strike the phrase ``Acts of Congress'' each time
it appears and insert the phrase ``acts of the Council
(or Acts of Congress, in the case of a year which is a
control year)'' in its place.
[(h) Sections 467(d), 471(c), 472(d)(2), 475(e)(2), and
483(d), and 490(f), (g)(3), (h)(3), and (i)(3) are amended by
striking the phrase ``The fourth sentence of section 446'' and
inserting the phrase ``Section 446(c)'' in its place.
[Sec. 3. Applicability.
[Section 2 shall apply as of January 1, 2014.
[Sec. 4. Fiscal impact statement.
[The Council adopts the fiscal impact statement in the
committee report as the fiscal impact statement required by
section 602(c)(3) of the District of Columbia Home Rule Act,
approved December 24, 1973 (87 Stat. 813; D.C. Official Code
Sec. 1-206.02(c)(3)).
[Sec. 5. Effective date.
[This act shall take effect as provided in section 303 of
the District of Columbia Home Rule Act, approved December 24,
1973 (87 Stat. 784; D.C. Official Code Sec. 1-203.03).]
----------
DISTRICT OF COLUMBIA HOME RULE ACT
* * * * * * *
TITLE IV--THE DISTRICT CHARTER
* * * * * * *
Part D--District Budget and Financial Management
Subpart 1--Budget and Financial Management
* * * * * * *
general and special funds
Sec. 450. [The General Fund] (a) In General._The General Fund
of the District shall be composed of those District revenues
which on the effective date of this title are paid into the
Treasury of the United States and credited either to the
General Fund of the District or its miscellaneous receipts, but
shall not include any revenues which are applied by law to any
special fund existing on the date of enactment of this title.
The Council may from time to time establish such additional
special funds as may be necessary for the efficient operation
of the government of the District. All money received by any
agency, officer, or employee of the District in its or his
official capacity shall belong to the District government and
shall be paid promptly to the Mayor for deposit in the
appropriate fund, except that all money received by the
District of Columbia Courts shall be deposited in the Treasury
of the United States or the Crime Victims Fund.
(b) Application of Federal Appropriations Process.--Nothing
in this Act shall be construed as creating a continuing
appropriation of the General Fund described in subsection (a).
All funds provided for the District of Columbia shall be
appropriated on an annual fiscal year basis through the Federal
appropriations process. For each fiscal year, the District
shall be subject to all applicable requirements of subchapter
III of chapter 13 and subchapter II of chapter 15 of title 31,
United States Code (commonly known as the ``Anti-Deficiency
Act''), the Budget and Accounting Act of 1921, and all other
requirements and restrictions applicable to appropriations for
such fiscal year.
* * * * * * *
TITLE VI--RESERVATION OF CONGRESSIONAL AUTHORITY
* * * * * * *
budget process; limitations on borrowing and spending
Sec. 603. (a) Nothing in this Act shall be construed as
making any change in [existing] law, regulation, or basic
procedure and practice relating to the respective roles of the
Congress, the President, the Federal Office of Management and
Budget, and the Comptroller General of the United States in the
preparation, review, submission, examination, authorization,
and appropriation of the total budget of the District of
Columbia government[.], or as authorizing the District of
Columbia to make any such change.
(b)(1) No general obligation bonds (other than bonds to
refund outstanding indebtedness) or Treasury capital project
loans shall be issued during any fiscal year in an amount which
would cause the amount of principal and interest required to be
paid both serially and into a sinking fund in any fiscal year
on the aggregate amounts of all outstanding general obligation
bonds and such Treasury loans, to exceed 17 percent of the
District revenues (less any fees or revenues directed to
servicing revenue bonds, any revenues, charges, or fees
dedicated for the purposes of water and sewer facilities
described in section 490(a) (including fees or revenues
directed to servicing or securing revenue bonds issued for such
purposes), retirement contributions, revenues from retirement
systems, and revenues derived from such Treasury loans and the
sale or general obligation or revenue bonds) which the Mayor
estimates, and the District of Columbia Auditor certifies, will
be credited to the District during the fiscal year in which the
bonds will be issued. Treasury capital project loans include
all borrowing from the United States Treasury, except those
funds advanced to the District by the Secretary of the Treasury
under the provisions of title VI of the District of Columbia
Revenue Act of 1939.
(2) Obligations incurred pursuant to the authority contained
in the District of Columbia Stadium Act of 1957 (71 Stat. 619;
D.C. Code title 2, chapter 17, subchapter II), obligations
incurred by the agencies transferred or established by sections
201 and 202, whether incurred before or after such transfer or
establishment, and obligations incurred pursuant to general
obligation bonds of the District of Columbia issued prior to
October 1, 1996, for the financing of Department of Public
Works, Water and Sewer Utility Administration capital projects,
shall not be included in determining the aggregate amount of
all outstanding obligations subject to the limitation specified
in the preceding subsection.
(3) The 17 percent limitation specified in paragraph (1)
shall be calculated in the following manner:
(A) Determine the dollar amount equivalent to 14
percent of the District revenues (less any fees or
revenues directed to servicing revenue bonds, any
revenues, charges, or fees dedicated for the purposes
of water and sewer facilities described in section
490(a) (including fees or revenues directed to
servicing or securing revenue bonds issued for such
purposes), retirement, contributions, revenues from
retirement systems, and revenues derived from such
Treasury loans and the sale of general obligation or
revenue bonds) which the Mayor estimates, and the
District of Columbia Auditor certifies, will be
credited to the District during the fiscal year for
which the bonds will be issued.
(B) Determine the actual total amount of principal
and interest to be paid in each fiscal year for all
outstanding general obligation bonds (less the
allocable portion of principal and interest to be paid
during the year on general obligation bonds of the
District of Columbia issued prior to October 1, 1996,
for the financing of Department of Public Works, Water
and Sewer Utility Administration capital projects) and
such Treasury loans.
(C) Determine the amount of principal and interest to
be paid during each fiscal year over the term of the
proposed general obligation bond or such Treasury loan
to be issued.
(D) If in any one fiscal year the sum arrived at by
adding subparagraphs (B) and (C) exceeds the amount
determined under subparagraph (A), then the proposed
general obligation bond or such Treasury loan in
subparagraph (C) cannot be issued.
(c) Except as provided in subsection (f), the Council shall
not approve any budget which would result in expenditures being
made by the District Government, during any fiscal year, in
excess of all resources which the Mayor estimates will be
available from all funds available to the District for such
fiscal year. The budget shall identify any tax increases which
shall be required in order to balance the budget as submitted.
The Council shall be required to adopt such tax increases to
the extent its budget is approved.
(d) Except as provided in subsection (f), the Mayor shall not
forward to the President for submission to Congress a budget
which is not balanced according to the provision of subsection
603(c).
(e) Nothing in this Act shall be construed as affecting the
applicability to the District government of the provisions of
section 3679 of the Revised Statutes of the United States (31
U.S.C. 665), the so-called Anti-Deficiency Act.
(f) In the case of a fiscal year which is a control year (as
defined in section 305(4) of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995), the
Council may not approve, and the Mayor may not forward to the
President, any budget which is not consistent with the
financial plan and budget established for the fiscal year under
subtitle A of title II of such Act.
* * * * * * *
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FINANCIAL STABILITY ACT OF 2010
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
SEC. 102. 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).
(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 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. FINANCIAL STABILITY OVERSIGHT COUNCIL ESTABLISHED.
(a) Establishment.--Effective 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] who shall, except as provided below, each have 1
vote on the Council shall be--
(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]
(B) each member of the Board of Governors,
who shall collectively have 1 vote on the
Council;
(C) the Comptroller of the Currency;
(D) the Director of the Bureau;
(E) each member of the Commission, who shall
collectively have 1 vote on the Council;
(F) each member of the Corporation, who shall
collectively have 1 vote on the Council;
(G) each member of the Commodity Futures
Trading Commission, who shall collectively have
1 vote on the Council;
(H) the Director of the Federal Housing
Finance Agency;
(I) each member of the National Credit Union
Administration Board, who shall collectively
have 1 vote on the Council; 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)] (A) the Director of the Federal
Insurance Office;
[(C)] (B) a State insurance commissioner, to
be designated by a selection process determined
by the State insurance commissioners;
[(D)] (C) a State banking supervisor, to be
designated by a selection process determined by
the State banking supervisors; and
[(E)] (D) 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.
(4) Voting by multi-person entity.--
(A) Voting within the entity.--An entity
described under subparagraph (B), (E), (F),
(G), or (I) of paragraph (1) shall determine
the entity's Council vote by using the voting
process normally applicable to votes by the
entity's members.
(B) Casting of entity vote.--The 1 collective
Council vote of an entity described under
subparagraph (A) shall be cast by the head of
such agency or, in the event such head is
unable to cast such vote, the next most senior
member of the entity available.
(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]
Each nonvoting members described under 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 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.
(3) Staff access.--Any member of the Council may
select to have one or more individuals on the member's
staff attend a meeting of the Council, including any
meeting of representatives of the member agencies other
than the members themselves.
(4) Congressional oversight.--All public meetings of
the Council shall be open to the attendance by members
of the authorization and oversight committees of the
House of Representatives and the Senate.
(5) Transcription requirement for non-public
meetings.--The Council shall create and preserve
transcripts for all non-public meetings of the Council.
(6) Member agency meetings.--Any meeting of
representatives of the member agencies other than the
members themselves shall be open to attendance by staff
of the authorization and oversight committees of the
House of Representatives and the Senate.
(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 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.]
(g) Open Meeting Requirement.--The Council shall be an agency
for purposes of section 552b of title 5, United States Code
(commonly referred to as the ``Government in the Sunshine
Act'').
(h) Confidential Congressional Briefings.--The Chairperson
shall at regular times but not less than annually provide
confidential briefings to the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate, which may in the
discretion of the Chairman of the respective committee be
attended by any combination of the committee's members or
staff.
[(h)] (i) 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)] (j) 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)] (k) 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. 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 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)] (B) monitor the financial services
marketplace in order to identify potential
threats to the financial stability of the
United States;
[(D)] (C) 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)] (D) 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)] (E) recommend to the member agencies
general supervisory priorities and principles
reflecting the outcome of discussions among the
member agencies;
[(G)] (F) 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 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)] (G) identify systemically important
financial market utilities and payment,
clearing, and settlement activities (as that
term is defined in title VIII);
[(K)] (H) 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;
[(L)] (I) 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)] (J) 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)] (K) 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; and
[(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)] (iv) 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,]
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
(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,] member
agencies 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 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.
(C) Freedom of information act.--Section 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. 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, 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 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.--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) 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 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) 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 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 Exception.--
[(1) In general.--The 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 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 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 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 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.
[SEC. 114. REGISTRATION OF NONBANK FINANCIAL COMPANIES SUPERVISED BY
THE BOARD OF GOVERNORS.
[Not 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. 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.
[(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;
[(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.
[(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. 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. TREATMENT OF CERTAIN COMPANIES THAT CEASE TO BE BANK HOLDING
COMPANIES.
[(a) Applicability.--This section shall apply to--
[(1) any entity that--
[(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) 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 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 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. COUNCIL FUNDING.
[Any expenses of the Council shall be treated as expenses of,
and paid by, the Office of Financial Research.
[SEC. 119. 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) provides all other disputants prior
notice of the intent to request dispute
resolution by the Council; and
[(B) 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. 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 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 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 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), 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 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. 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 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 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. 118. COUNCIL FUNDING.
There is authorized to be appropriated to the Council
$4,000,000 for fiscal year 2018 and each fiscal year thereafter
to carry out the duties of the Council.
* * * * * * *
[Subtitle B--Office of Financial Research
[SEC. 151. 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;
[(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. 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 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.
[(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 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.''.
[SEC. 153. 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 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 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
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 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. 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 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 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 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;
[(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. 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 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 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 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. 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.
[(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. 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.
[(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) 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. 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 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. 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)] (a) 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 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
$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. 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. 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, 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).]
(2) Tailored application.--In prescribing more
stringent prudential standards under this section, the
Board of Governors may differentiate among companies 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 Board of
Governors deems appropriate.
(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] shall 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--
(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)] (i) whether the company owns
an insured depository institution;
[(iii)] (ii) nonfinancial activities
and affiliations of the company; and
[(iv)] (iii) any other risk-related
factors that the Board of Governors
determines appropriate; and
[(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)] (B) 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);]
(A) any recommendations of the Council;
(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 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]
not more often than every 2 years 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]
(A) In general._The Board of Governors and
the Corporation [shall review] shall--
(i) 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)[.]; and
(ii) not later than the end of the 6-
month period beginning on the date the
bank holding company submits the
resolution plan, provide feedback to
the bank holding company on such plan.
(B) Disclosure of assessment framework.--The
Board of Governors shall publicly disclose,
including on the website of the Board of
Governors, the assessment framework that is
used to review information under this paragraph
and shall provide the public with a notice and
comment period before finalizing such
assessment framework.
(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 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,]
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 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 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 determine by
regulation to be necessary to mitigate risks to the
financial stability of the United States) of the
company.
(3) Credit exposure.--For 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 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.
(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 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)] (1) 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)] paragraph (2).
(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)] paragraph (2),
as determined necessary or appropriate by the
Board of Governors to promote sound risk
management practices.
[(3)] (2) Risk committee.--A risk committee required
by this subsection shall--
(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] a
bank holding company described in subsection
(a);
(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] a bank
holding company described in subsection (a);
and
(C) include at least 1 risk management expert
having experience in identifying, assessing,
and managing risk exposures of large, complex
firms.
[(4)] (3) Rulemaking.--The 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;]
(i) shall--
(I) issue regulations, after
providing for public notice and
comment, that 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, and
methodologies, including models
used to estimate losses on
certain assets, and the Board
of Governors shall not carry
out any such evaluation until
60 days after such regulations
are issued; and
(II) provide copies of such
regulations to the Comptroller
General of the United States
and the Panel of Economic
Advisors of the Congressional
Budget Office before publishing
such regulations;
(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 publish a summary of the
results of the tests required under
subparagraph (A) or clause (ii) of this
subparagraph[.], including any results
of a resubmitted test;
(vi) shall, in establishing the
severely adverse condition under clause
(i), provide detailed consideration of
the model's effects on financial
stability and the cost and availability
of credit;
(vii) shall, in developing the models
and methodologies and providing them
for notice and comment under this
subparagraph, publish a process to test
the models and methodologies for their
potential to magnify systemic and
institutional risks instead of
facilitating increased resiliency;
(viii) shall design and publish a
process to test and document the
sensitivity and uncertainty associated
with the model system's data quality,
specifications, and assumptions; and
(ix) shall communicate the range and
sources of uncertainty surrounding the
models and methodologies.
(C) CCAR requirements.--
(i) Parameters and consequences
applicable to ccar.--The requirements
of subparagraph (B) shall apply to
CCAR.
(ii) Two-year limitation.--The Board
of Governors may not subject a company
to CCAR more than once every two years.
(iii) Mid-cycle resubmission.--If a
company receives a quantitative
objection to, or otherwise desires to
amend the company's capital plan, the
company may file a new streamlined plan
at any time after a capital planning
exercise has been completed and before
a subsequent capital planning exercise.
(iv) Limitation on qualitative
capital planning objections.--In
carrying out CCAR, the Board of
Governors may not object to a company's
capital plan on the basis of
qualitative deficiencies in the
company's capital planning process.
(v) Company inquiries.--The Board of
Governors shall establish and publish
procedures for responding to inquiries
from companies subject to CCAR,
including establishing the time frame
in which such responses will be made,
and make such procedures publicly
available.
(vi) CCAR defined.--For purposes of
this subparagraph and subparagraph (E),
the term ``CCAR'' means the
Comprehensive Capital Analysis and
Review established by the Board of
Governors.
(2) By the company.--
(A) Requirement.--A [nonbank financial
company supervised by the Board of Governors
and] [a bank holding company] bank holding
company described in subsection (a) shall
conduct [semiannual] annual stress tests. [All
other financial companies] All other bank
holding companies that have total consolidated
assets of more than $10,000,000,000 [and are
regulated by a primary Federal financial
regulatory 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] Board of Governors shall
require.
(C) Regulations.--[Each Federal primary
financial regulatory agency, in coordination
with the Board of Governors and the Federal
Insurance Office,] The Board of Governors 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) require companies subject to
this paragraph to publish a summary of
the results of the required stress
tests.
(3) Accountability and appropriateness in bank
holding company stress tests.--
(A) Quality and accountability assurance.--No
annual test or exercise conducted by the Board
of Governors under this subsection or any other
provision of law shall serve as a basis for
restricting a capital distribution by a bank
holding company unless the Board of Governor's
Vice Chair for Supervision certifies in writing
to the Congress that any model or combination
of models used therein are demonstrably more
accurate than any similar model or combination
of models utilized by the bank holding company
in a stress test conducted under paragraph (2).
(B) Process.--Any action taken by the Board
of Governors to restrict a capital distribution
by a bank holding company on the basis of a
stress test or exercise conducted by the Board
of Governors under this subsection or any other
provision of law shall be conducted pursuant to
a capital directive subject to, and issued in
accordance with, section 908(b)(2) of the
International Lending Supervision Act of 1983
(12 U.S.C. 3907(b)(2).
(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] any risk-related factors that the
Council deems appropriate.
(3) Regulations.--The 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).
(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. EARLY REMEDIATION REQUIREMENTS.
[(a) In General.--The 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. AFFILIATIONS.
[(a) Affiliations.--Nothing in this subtitle shall be
construed to require a nonbank financial company supervised by
the Board 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 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 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 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. REGULATIONS.
[The Board of Governors shall have authority to issue
regulations to implement subtitles A and C and the amendments
made thereunder. Except 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. 170. SAFE HARBOR.
[(a) Regulations.--The 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 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. 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 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 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 of Construction.--Nothing in this Act shall be
construed to limit or curtail the Corporation's current
authority to examine or bring enforcement actions with respect
to any insured depository institution or institution-affiliated
party.]
* * * * * * *
[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 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. 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.]
* * * * * * *
----------
BANK HOLDING COMPANY ACT OF 1956
* * * * * * *
acquisition of bank shares or assets
Sec. 3. (a) It shall be unlawful, except with the prior
approval of the Board, (1) for any action to be taken that
causes any company to become a bank holding company; (2) for
any action to be taken that causes a bank to become a
subsidiary of a bank holding company; (3) for any bank holding
company to acquire direct or indirect ownership or control of
any voting shares of any bank if, after such acquisition, such
company will directly or indirectly own or control more than 5
per centum of the voting shares of such bank; (4) for any bank
holding company or subsidiary thereof, other than a bank, to
acquire all or substantially all of the assets of a bank; or
(5) for any bank holding company to merge or consolidate with
any other bank holding company. Notwithstanding the foregoing
this prohibition shall not apply to (A) shares acquired by a
bank, (i) in good faith in a fiduciary capacity, except where
such shares are held under a trust that constitutes a company
as defined in section 2(b) and except as provided in paragraphs
(2) and (3) of section 2(g), or (ii) in the regular course of
securing or collecting a debt previously contracted in good
faith, but any shares acquired after the date of enactment of
this Act in securing or collecting any such previously
contracted debt shall be disposed of within a period of two
years from the date on which they were acquired; (B) additional
shares acquired by a bank holding company in a bank in which
such bank holding company owned or controlled a majority of the
voting shares prior to such acquisition; or (C) the
acquisition, by a company, of control of a bank in a
reorganization in which a person or group of persons exchanges
their shares of the bank for shares of a newly formed bank
holding company and receives after the reorganization
substantially the same proportional share interest in the
holding company as they held in the bank except for changes in
shareholders' interests resulting from the exercise of
dissenting shareholders' rights under State or Federal law if--
(i) immediately following the
acquisition--
(I) the bank holding company
meets the capital and other
financial standards prescribed
by the Board by regulation for
such a bank holding company;
and
(II) the bank is adequately
capitalized (as defined in
section 38 of the Federal
Deposit Insurance Act);
(ii) the holding company does not
engage in any activities other than
those of managing and controlling banks
as a result of the reorganization;
(iii) the company provides 30 days
prior notice to the Board and the Board
does not object to such transaction
during such 30-day period; and
(iv) the holding company will not
acquire control of any additional bank
as a result of the reorganization..
The Board is authorized upon application by a bank to extend,
from time to time for not more than one year at a time, the
two-year period referred to above for disposing of any shares
acquired by a bank in the regular course of securing or
collecting a debt previously contracted in good faith, if, in
the Board's judgment, such an extension would not be
detrimental to the public interest, but no such extension shall
in the aggregate exceed three years. For the purpose of the
preceding sentence, bank shares acquired after the date of
enactment of the Bank Holding Company Act Amendments of 1970
shall not be deemed to have been acquired in good faith in a
fiduciary capacity if the acquiring bank or company has sole
discretionary authority to exercise voting rights with respect
thereto, but in such instances acquisitions may be made without
prior approval of the Board if the Board, upon application
filed within ninety days after the shares are acquired,
approves retention or, if retention is disapproved, the
acquiring bank disposes of the shares or its sole discretionary
voting rights within two years after issuance of the order of
disapproval.
(b)(1) Notice and Hearing Requirements.--[Upon receiving]
(A) In general._Upon receiving from a company
any application for approval under this
section, the Board shall give notice to the
Comptroller of the Currency, if the applicant
company or any bank the voting shares or assets
of which are sought to be required is a
national banking association, or to the
appropriate supervisory authority of the
interested State, if the applicant company or
any bank the voting shares or assets of which
are sought to be acquired is a State bank, in
order to provide for the submission of the
views and recommendations of the Comptroller of
the Currency or the State supervisory
authority, as the case may be. The views and
recommendations shall be submitted within
thirty calendar days of the date on which
notice is given, or within ten calendar days of
such date if the Board advises the Comptroller
of the Currency or the State supervisory
authority that an emergency exists requiring
expeditious action. If the thirty-day notice
period applies and if the Comptroller of the
Currency or the State supervisory authority so
notified by the Board disapproves the
application in writing within this period, the
Board shall forthwith give written notice of
that fact to the applicant. Within three days
after giving such notice to the applicant, the
Board shall notify in writing the applicant and
the disapproving authority of the date for
commencement of a hearing by it on such
application. Any such hearing shall be
commenced not less than ten nor more than
thirty days after the Board has given written
notice to the applicant of the action of the
disapproving authority. The length of any such
hearing shall be determined by the Board, but
it shall afford all interested parties a
reasonable opportunity to testify at such
hearing. At the conclusion thereof, the Board
shall, by order, grant or deny the application
on the basis of the record made at such
hearing. In the event of the failure of the
Board to act on any application for approval
under this section within the ninety-one-day
period which begins on the date of submission
to the Board of the complete record on that
application, the application shall be deemed to
have been granted. [Notwithstanding any other
provision]
(B) Immediate action._
(i) In general._Notwithstanding any
other provision of this subsection, if
the Board finds that it must act
immediately on any application for
approval under this section in order to
prevent the probable failure of a bank
or bank holding company involved in a
proposed acquisition, merger, or
consolidation transaction, the Board
may dispense with the notice
requirements of this subsection, and if
notice is given, the Board may request
that the views and recommendations of
the Comptroller of the Currency or the
State supervisory authority, as the
case may be, be submitted immediately
in any form or by any means acceptable
to the Board. If the Board has found
pursuant to this subsection either that
an emergency exists requiring
expeditious action or that it must act
immediately to prevent probable
failure, the Board may grant or deny
any such application without a hearing
not withstanding any recommended
disapproval by the appropriate
supervisory authority.
(ii) Exception.--The Board may not
take any action pursuant to clause (i)
on an application that would cause any
company to become a bank holding
company unless such application
involves the company acquiring a bank
that is critically undercapitalized (as
such term is defined under section
38(b) of the Federal Deposit Insurance
Act).
(2) Waiver in Case of Bank in Danger of Closing.--If the
Board receives a certification described in section 13(f)(8)(D)
of the Federal Deposit Insurance Act from the appropriate
Federal or State chartering authority that a bank is in danger
of closing, the Board may dispense with the notice and hearing
requirements of paragraph (1) with respect to any application
received by the Board relating to the acquisition of such bank,
the bank holding company which controls such bank, or any other
affiliated bank.
(c) Factors for Consideration by Board.--
(1) Competitive factors.--The Board shall not
approve--
(A) any acquisition or merger or consolidation under
this section which would result in a monopoly, or which
would be in furtherance of any combination or
conspiracy to monopolize or to attempt to monopolize
the business of banking in any part of the United
States, or
(B) any other proposed acquisition or merger or
consolidation under this section whose effect in any
section of the country may be substantially to lessen
competition, or to tend to create a monopoly, or which
in any other manner would be in restraint or trade,
unless it finds that the anticompetitive effects of the
proposed transaction are clearly outweighed in the
public interest by the probable effect of the
transaction in meeting the convenience and needs of the
community to be served.
(2) Banking and community factors.--In every case,
the Board shall take into consideration the financial
and managerial resources and future prospects of the
company or companies and the banks concerned, and the
convenience and needs of the community to be served.
(3) Supervisory factors.--The Board shall disapprove
any application under this section by any company if--
(A) the company fails to provide the Board
with adequate assurances that the company will
make available to the Board such information on
the operations or activities of the company,
and any affiliate of the company, as the Board
determines to be appropriate to determine and
enforce compliance with this Act; or
(B) in the case of an application involving a
foreign bank, the foreign bank is not subject
to comprehensive supervision or regulation on a
consolidated basis by the appropriate
authorities in the bank's home country.
(4) Treatment of certain bank stock loans.--
Notwithstanding any other provision of law, the Board
shall not follow any practice or policy in the
consideration of any application for the formation of a
one-bank holding company if following such practice or
policy would result in the rejection of such
application solely because the transaction to form such
one-bank holding company involves a bank stock loan
which is for a period of not more than twenty-five
years. The previous sentence shall not be construed to
prohibit the Board from rejecting any application
solely because the other financial arrangements are
considered unsatisfactory. The Board shall consider
transactions involving bank stock loans for the
formation of a one-bank holding company having a
maturity of twelve years or more on a case by case
basis and no such transaction shall be approved if the
Board believes the safety or soundness of the bank may
be jeopardized.
(5) Managerial resources.--Consideration of the
managerial resources of a company or bank under
paragraph (2) shall include consideration of the
competence, experience, and integrity of the officers,
directors, and principal shareholders of the company or
bank.
(6) Money laundering.--In every case, the Board shall
take into consideration the effectiveness of the
company or companies in combatting money laundering
activities, including in overseas branches.
(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.
(d) Interstate Banking.--
(1) Approvals authorized.--
(A) Acquisition of banks.--The Board may
approve an application under this section by a
bank holding company that is well capitalized
and well managed to acquire control of, or
acquire all or substantially all of the assets
of, a bank located in a State other than the
home State of such bank holding company,
without regard to whether such transaction is
prohibited under the law of any State.
(B) Preservation of state age laws.--
(i) In general.--Notwithstanding
subparagraph (A), the Board may not
approve an application pursuant to such
subparagraph that would have the effect
of permitting an out-of-State bank
holding company to acquire a bank in a
host State that has not been in
existence for the minimum period of
time, if any, specified in the
statutory law of the host State.
(ii) Special rule for state age laws
specifying a period of more than 5
years.--Notwithstanding clause (i), the
Board may approve, pursuant to
subparagraph (A), the acquisition of a
bank that has been in existence for at
least 5 years without regard to any
longer minimum period of time specified
in a statutory law of the host State.
(C) Shell banks.--For purposes of this
subsection, a bank that has been chartered
solely for the purpose of, and does not open
for business prior to, acquiring control of, or
acquiring all or substantially all of the
assets of, an existing bank shall be deemed to
have been in existence for the same period of
time as the bank to be acquired.
(D) Effect on state contingency laws.--No
provision of this subsection shall be construed
as affecting the applicability of a State law
that makes an acquisition of a bank contingent
upon a requirement to hold a portion of such
bank's assets available for call by a State-
sponsored housing entity established pursuant
to State law, if--
(i) the State law does not have the
effect of discriminating against out-
of-State banks, out-of-State bank
holding companies, or subsidiaries of
such banks or bank holding companies;
(ii) that State law was in effect as
of the date of enactment of the Riegle-
Neal Interstate Banking and Branching
Efficiency Act of 1994;
(iii) the Federal Deposit Insurance
Corporation has not determined that
compliance with such State law would
result in an unacceptable risk to the
Deposit Insurance Fund; and
(iv) the appropriate Federal banking
agency for such bank has not found that
compliance with such State law would
place the bank in an unsafe or unsound
condition.
(2) Concentration limits.--
(A) Nationwide concentration limits.--The
Board may not approve an application pursuant
to paragraph (1)(A) if the applicant (including
all insured depository institutions which are
affiliates of the applicant) controls, or upon
consummation of the acquisition for which such
application is filed would control, more than
10 percent of the total amount of deposits of
insured depository institutions in the United
States.
(B) Statewide concentration limits other than
with respect to initial entries.--The Board may
not approve an application pursuant to
paragraph (1)(A) if--
(i) immediately before the
consummation of the acquisition for
which such application is filed, the
applicant (including any insured
depository institution affiliate of the
applicant) controls any insured
depository institution or any branch of
an insured depository institution in
the home State of any bank to be
acquired or in any host State in which
any such bank maintains a branch; and
(ii) the applicant (including all
insured depository institutions which
are affiliates of the applicant), upon
consummation of the acquisition, would
control 30 percent or more of the total
amount of deposits of insured
depository institutions in any such
State.
(C) Effectiveness of state deposit caps.--No
provision of this subsection shall be construed
as affecting the authority of any State to
limit, by statute, regulation, or order, the
percentage of the total amount of deposits of
insured depository institutions in the State
which may be held or controlled by any bank or
bank holding company (including all insured
depository institutions which are affiliates of
the bank or bank holding company) to the extent
the application of such limitation does not
discriminate against out-of-State banks, out-
of-State bank holding companies, or
subsidiaries of such banks or holding
companies.
(D) Exceptions to subparagraph (b).--The
Board may approve an application pursuant to
paragraph (1)(A) without regard to the
applicability of subparagraph (B) with respect
to any State if--
(i) there is a limitation described
in subparagraph (C) in a State statute,
regulation, or order which has the
effect of permitting a bank or bank
holding company (including all insured
depository institutions which are
affiliates of the bank or bank holding
company) to control a greater
percentage of total deposits of all
insured depository institutions in the
State than the percentage permitted
under subparagraph (B); or
(ii) the acquisition is approved by
the appropriate State bank supervisor
of such State and the standard on which
such approval is based does not have
the effect of discriminating against
out-of-State banks, out-of-State bank
holding companies, or subsidiaries of
such banks or holding companies.
(E) Deposit defined.--For purposes of this
paragraph, the term ``deposit'' has the same
meaning as in section 3(l) of the Federal
Deposit Insurance Act.
(3) Community reinvestment compliance.--In
determining whether to approve an application under
paragraph (1)(A), the Board shall--
(A) comply with the responsibilities of the
Board regarding such application under section
804 of the Community Reinvestment Act of 1977;
and
(B) take into account the applicant's record
of compliance with applicable State community
reinvestment laws.
(4) Applicability of antitrust laws.--No provision of
this subsection shall be construed as affecting--
(A) the applicability of the antitrust laws;
or
(B) the applicability, if any, of any State
law which is similar to the antitrust laws.
(5) Exception for banks in default or in danger of
default.--The Board may approve an application pursuant
to paragraph (1)(A) which involves--
(A) an acquisition of 1 or more banks in
default or in danger of default; or
(B) an acquisition with respect to which
assistance is provided under section 13(c) of
the Federal Deposit Insurance Act;
without regard to subparagraph (B) or (D) of paragraph
(1) or paragraph (2) or (3).
(e) Every bank that is a holding company and every bank that
is a subsidiary of such a company shall become and remain an
insured depository institution as such term is defined in
section 3 of the Federal Deposit Insurance Act.
(g) Mutual Bank Holding Company.--
(1) Establishment.--Notwithstanding any provision of
Federal law other than this Act, a savings bank or
cooperative bank operating in mutual form may
reorganize so as to form a holding company.
(2) Regulations.--A bank holding company organized as
a mutual holding company shall be regulated on terms,
and shall be subject to limitations, comparable to
those applicable to any other bank holding company.
* * * * * * *
SEC. 14. 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]
(2) the term ``banking organization'' 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; and
(E) a foreign bank or company that is treated
as a bank holding company for purposes of this
Act; and
(3) the term ``liabilities'' means--
(A) with respect to a United States
[financial company] banking organization--
(i) the total risk-weighted assets of
the [financial company] banking
organization, 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] banking
organization under the risk-based
capital rules applicable to bank
holding companies; and
(B) with respect to a foreign-based
[financial company] banking organization--
(i) the total risk-weighted assets of
the United States operations of the
[financial company] banking
organization, 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] banking
organization, 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] banking
organization 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] banking
organization upon consummation of the transaction would exceed
10 percent of the aggregate consolidated liabilities of all
[financial companies] banking organizations 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] banking
organization.
(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] banking
organization or to financial companies in general.
(e) Council Study and Rulemaking.--
(1) 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 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) 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).
----------
TITLE 44, UNITED STATES CODE
* * * * * * *
CHAPTER 35--COORDINATION OF FEDERAL INFORMATION POLICY
* * * * * * *
SUBCHAPTER I--FEDERAL INFORMATION POLICY
* * * * * * *
Sec. 3502. Definitions
As used in this subchapter--
(1) the term ``agency'' means any executive
department, military department, Government
corporation, Government controlled corporation, or
other establishment in the executive branch of the
Government (including the Executive Office of the
President), or any independent regulatory agency, but
does not include--
(A) the Government Accountability Office;
(B) Federal Election Commission;
(C) the governments of the District of
Columbia and of the territories and possessions
of the United States, and their various
subdivisions; or
(D) Government-owned contractor-operated
facilities, including laboratories engaged in
national defense research and production
activities;
(2) the term ``burden'' means time, effort, or
financial resources expended by persons to generate,
maintain, or provide information to or for a Federal
agency, including the resources expended for--
(A) reviewing instructions;
(B) acquiring, installing, and utilizing
technology and systems;
(C) adjusting the existing ways to comply
with any previously applicable instructions and
requirements;
(D) searching data sources;
(E) completing and reviewing the collection
of information; and
(F) transmitting, or otherwise disclosing the
information;
(3) the term ``collection of information''--
(A) means the obtaining, causing to be
obtained, soliciting, or requiring the
disclosure to third parties or the public, of
facts or opinions by or for an agency,
regardless of form or format, calling for
either--
(i) answers to identical questions
posed to, or identical reporting or
recordkeeping requirements imposed on,
ten or more persons, other than
agencies, instrumentalities, or
employees of the United States; or
(ii) answers to questions posed to
agencies, instrumentalities, or
employees of the United States which
are to be used for general statistical
purposes; and
(B) shall not include a collection of
information described under section 3518(c)(1);
(4) the term ``Director'' means the Director of the
Office of Management and Budget;
(5) the term ``independent regulatory agency'' means
the Board of Governors of the Federal Reserve System,
the Commodity Futures Trading Commission, the Consumer
Product Safety Commission, the Federal Communications
Commission, the Federal Deposit Insurance Corporation,
the Federal Energy Regulatory Commission, the Federal
Housing Finance Agency, the Federal Maritime
Commission, the Federal Trade Commission, the
Interstate Commerce Commission, the Mine Enforcement
Safety and Health Review Commission, the National Labor
Relations Board, the Nuclear Regulatory Commission, the
Occupational Safety and Health Review Commission, the
Postal Regulatory Commission, the Securities and
Exchange Commission, the Bureau of Consumer Financial
Protection, [the Office of Financial Research,] Office
of the Comptroller of the Currency, and any other
similar agency designated by statute as a Federal
independent regulatory agency or commission;
(6) the term ``information resources'' means
information and related resources, such as personnel,
equipment, funds, and information technology;
(7) the term ``information resources management''
means the process of managing information resources to
accomplish agency missions and to improve agency
performance, including through the reduction of
information collection burdens on the public;
(8) the term ``information system'' means a discrete
set of information resources organized for the
collection, processing, maintenance, use, sharing,
dissemination, or disposition of information;
(9) the term ``information technology'' has the
meaning given that term in section 11101 of title 40
but does not include national security systems as
defined in section 11103 of title 40;
(10) the term ``person'' means an individual,
partnership, association, corporation, business trust,
or legal representative, an organized group of
individuals, a State, territorial, tribal, or local
government or branch thereof, or a political
subdivision of a State, territory, tribal, or local
government or a branch of a political subdivision;
(11) the term ``practical utility'' means the ability
of an agency to use information, particularly the
capability to process such information in a timely and
useful fashion;
(12) the term ``public information'' means any
information, regardless of form or format, that an
agency discloses, disseminates, or makes available to
the public;
(13) the term ``recordkeeping requirement'' means a
requirement imposed by or for an agency on persons to
maintain specified records, including a requirement
to--
(A) retain such records;
(B) notify third parties, the Federal
Government, or the public of the existence of
such records;
(C) disclose such records to third parties,
the Federal Government, or the public; or
(D) report to third parties, the Federal
Government, or the public regarding such
records; and
(14) the term ``penalty'' includes the imposition by
an agency or court of a fine or other punishment; a
judgment for monetary damages or equitable relief; or
the revocation, suspension, reduction, or denial of a
license, privilege, right, grant, or benefit.
* * * * * * *
----------
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short 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:
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle A--Financial Stability Oversight Council
* * * * * * *
[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. 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.]
* * * * * * *
[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. ]
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. 164. Prohibition against management interlocks between certain
financial companies.]
* * * * * * *
[Sec. 166. Early remediation requirements.
[Sec. 167. Affiliations.
[Sec. 168. Regulations.]
* * * * * * *
[Sec. 170. Safe harbor.]
* * * * * * *
[Sec. 172. Examination and enforcement actions for insurance and orderly
liquidation purposes.]
* * * * * * *
[Sec. 174. Studies and reports on holding company capital requirements.
[Sec. 175. International policy coordination.]
* * * * * * *
TITLE VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
* * * * * * *
[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.]
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle B--General Powers of the Bureau
* * * * * * *
Sec. 1024. [Supervision of]Authority with respect to certain
nondepository covered persons.
[Sec. 1025. Supervision of very large banks, savings associations, and
credit unions.]
* * * * * * *
[Sec. 1028. Authority to restrict mandatory pre-dispute arbitration.]
* * * * * * *
Subtitle C--Specific Bureau Authorities
[Sec. 1031. Prohibiting unfair, deceptive, or abusive acts or
practices.]
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies
* * * * * * *
SEC. 171. 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.
(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.
(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.
(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 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, or
March 31, 2010, 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 bank holding company or savings and
loan holding company having less than
$1,000,000,000 in total consolidated assets
that complies with the requirements of the
Small Bank Holding Company Policy Statement on
Assessment of Financial and Managerial Factors
of the Board of Governors (12 CFR part 225
appendix C), as the requirements of such Policy
Statement are amended pursuant to section 1 of
an Act entitled ``To enhance the ability of
community financial institutions to foster
economic growth and serve their communities,
boost small businesses, increase individual
savings, and for other purposes''.]
(C) any bank holding company or savings and
loan holding company that is subject to the
application of the Small Bank Holding Company
Policy Statement on Assessment of Financial and
Managerial Factors of the Board of Governors
(12 CFR part 225--appendix C).
(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 agencies, shall conduct a
study of access to capital by smaller insured
depository institutions.
(B) Scope.--For 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.
(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 VI--IMPROVEMENTS TO REGULATION OF BANK AND SAVINGS ASSOCIATION
HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS
* * * * * * *
[SEC. 618. 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;
[(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. 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
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 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.--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, 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) 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. 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 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.--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.--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).
[``(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 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 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 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) 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 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 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, 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) 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
[``(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) 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 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.
[``(4) Application to nonbank financial companies
supervised by the board.--The appropriate 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)).
[``(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 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) 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).]
TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
SECURITIES
* * * * * * *
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
``(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. 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 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--
``(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) 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--
``(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 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) 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) 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--
``(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.
``(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).]
* * * * * * *
* * * * * * *
----------
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
Sec. 10. [(a) The] (a) Powers._
(1) In general._The Board of Directors shall
administer the affairs of the Corporation fairly and
impartially and without discrimination. The Board of
Directors of the Corporation, subject to paragraph (2),
shall determine and prescribe the manner in which its
obligations shall be incurred and its expenses allowed
and paid. The Corporation shall be entitled to the free
use of the United States mails in the same manner as
the executive departments of the Government. The
Corporation with the consent of any Federal Reserve
bank or of any board, commission, independent
establishment, or executive department of the
Government, including any field service thereof, may
avail itself of the use of information, services, and
facilities thereof in carrying out the provisions of
this Act.
(2) Appropriations requirement.--Except as provided
under paragraph (3), the Corporation may, only to the
extent as provided in advance by appropriations Acts,
cover the costs incurred in carrying out the provisions
of this Act, including with respect to the
administrative costs of the Corporation and the costs
of the examination and supervision of insured
depository institutions.
(3) Exception for certain programs.--Paragraph (2)
shall not apply to the Corporation's Insurance Business
Line Programs and Receivership Management Business Line
Programs, as in existence on the date of enactment of
this paragraph, and the proportion of the
administrative costs of the Corporation related to such
programs.
(b) Examinations.--
(1) Appointment of examiners and claims agents.--The
Board of Directors shall appoint examiners and claims
agents.
(2) Regular examinations.--Any examiner appointed
under paragraph (1) shall have power, on behalf of the
Corporation, to examine--
(A) any insured State nonmember bank or
insured State branch of any foreign bank;
(B) any depository institution which files an
application with the Corporation to become an
insured depository institution; and
(C) any insured depository institution in
default,
whenever the Board of Directors determines an
examination of any such depository institution is
necessary.
(3) Special examination of any insured depository
institution.--
(A) In general.--In addition to the
examinations authorized under paragraph (2),
any examiner appointed under paragraph (1)
shall have power, on behalf of the Corporation,
to make any special examination of any insured
depository institution or 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,
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 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.
(4) Examination of affiliates.--
(A) In general.--In making any examination
under paragraph (2) or (3), any examiner
appointed under paragraph (1) shall have power,
on behalf of the Corporation, to make such
examinations of the affairs of any affiliate of
any depository institution as may be necessary
to disclose fully--
(i) the relationship between such
depository institution and any such
affiliate; and
(ii) the effect of such relationship
on the depository institution.
(B) Commitment by foreign banks to allow
examinations of affiliates.--No branch or
depository institution subsidiary of a foreign
bank may become an insured depository
institution unless such foreign bank submits a
written binding commitment to the Board of
Directors to permit any examination of any
affiliate of such branch or depository
institution subsidiary pursuant to subparagraph
(A) to the extent determined by the Board of
Directors to be necessary to carry out the
purposes of this Act.
(5) Examination of insured state branches.--The Board
of Directors shall--
(A) coordinate examinations of insured State
branches of foreign banks with examinations
conducted by the Board of Governors of the
Federal Reserve System under section 7(c)(1) of
the International Banking Act of 1978; and
(B) to the extent possible, participate in
any simultaneous examination of the United
States operations of a foreign bank requested
by the Board under such section.
(6) Power and duty of examiners.--Each examiner
appointed under paragraph (1) shall--
(A) have power to make a thorough examination
of any insured depository institution or
affiliate under paragraph (2), (3), (4), or
(5); and
(B) shall make a full and detailed report of
condition of any insured depository institution
or affiliate examined to the Corporation.
(7) Power of claim agents.--Each claim agent
appointed under paragraph (1) shall have power to
investigate and examine all claims for insured
deposits.
(c) In connection with examinations of insured depository
institutions and any State nonmember bank, savings association,
or other institution making application to become insured
depository institutions, and affiliates thereof, or with other
types of investigations to determine compliance with applicable
law and regulations, the appropriate Federal banking agency, or
its designated representatives, are authorized to administer
oaths and affirmations, and to examine and and to take and
preserve testimony under oath as to any matter in respect to
the affairs or ownership of any such bank or institution or
affiliate thereof, and to exercise such other powers as are set
forth in section 8(n) of this Act.
(d) Annual On-Site Examinations of All Insured Depository
Institutions Required.--
(1) In general.--The appropriate Federal banking
agency shall, not less than once during each 12-month
period, conduct a full-scope, on-site examination of
each insured depository institution.
(2) Examinations by corporation.--Paragraph (1) shall
not apply during any 12-month period in which the
Corporation has conducted a full-scope, on-site
examination of the insured depository institution.
(3) State examinations acceptable.--The examinations
required by paragraph (1) may be conducted in alternate
12-month periods, as appropriate, if the appropriate
Federal banking agency determines that an examination
of the insured depository institution conducted by the
State during the intervening 12-month period carries
out the purpose of this subsection.
(4) 18-month rule for certain small institutions.--
Paragraphs (1), (2), and (3) shall apply with ``18-
month'' substituted for ``12-month'' if--
(A) the insured depository institution has
total assets of less than $1,000,000,000;
(B) the institution is well capitalized, as
defined in section 38;
(C) when the institution was most recently
examined, it was found to be well managed, and
its composite condition--
(i) was found to be outstanding; or
(ii) was found to be outstanding or
good, in the case of an insured
depository institution that has total
assets of not more than $200,000,000;
(D) the insured institution is not currently
subject to a formal enforcement proceeding or
order by the Corporation or the appropriate
Federal banking agency; and
(E) no person acquired control of the
institution during the 12-month period in which
a full-scope, on-site examination would be
required but for this paragraph.
(5) Certain government-controlled institutions
exempted.--Paragraph (1) does not apply to--
(A) any institution for which the Corporation
is conservator; or
(B) any bridge depository institution, none
of the voting securities of which are owned by
a person or agency other than the Corporation.
(6) Coordinated examinations.--To minimize the
disruptive effects of examinations on the operations of
insured depository institutions--
(A) each appropriate Federal banking agency
shall, to the extent practicable and consistent
with principles of safety and soundness and the
public interest--
(i) coordinate examinations to be
conducted by that agency at an insured
depository institution and its
affiliates;
(ii) coordinate with the other
appropriate Federal banking agencies in
the conduct of such examinations;
(iii) work to coordinate with the
appropriate State bank supervisor--
(I) the conduct of all
examinations made pursuant to
this subsection; and
(II) the number, types, and
frequency of reports required
to be submitted to such
agencies and supervisors by
insured depository
institutions, and the type and
amount of information required
to be included in such reports;
and
(iv) use copies of reports of
examinations of insured depository
institutions made by any other Federal
banking agency or appropriate State
bank supervisor to eliminate
duplicative requests for information;
and
(B) not later than 2 years after the date of
enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994, the
Federal banking agencies shall jointly
establish and implement a system for
determining which one of the Federal banking
agencies or State bank supervisors shall be the
lead agency responsible for managing a unified
examination of each insured depository
institution and its affiliates, as required by
this subsection.
(7) Separate examinations permitted.--Notwithstanding
paragraph (6), each appropriate Federal banking agency
may conduct a separate examination in an emergency or
under other exigent circumstances, or when the agency
believes that a violation of law may have occurred.
(8) Report.--At the time the system provided for in
paragraph (6) is established, the Federal banking
agencies shall submit a joint report describing the
system to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Banking,
Finance and Urban Affairs of the House of
Representatives. Thereafter, the Federal banking
agencies shall annually submit a joint report to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Banking, Finance and Urban
Affairs of the House of Representatives regarding the
progress of the agencies in implementing the system and
indicating areas in which enhancements to the system,
including legislature improvements, would be
appropriate.
(9) Standards for determining adequacy of state
examinations.--The Federal Financial Institutions
Examination Council shall issue guidelines establishing
standards to be used at the discretion of the
appropriate Federal banking agency for purposes of
making a determination under paragraph (3).
(10) Agencies authorized to increase maximum asset
amount of institutions for certain purposes.--At any
time after the end of the 2-year period beginning on
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of 1994, the
appropriate Federal banking agency, in the agency's
discretion, may increase the maximum amount limitation
contained in paragraph (4)(C)(ii), by regulation, from
$200,000,000 to an amount not to exceed $1,000,000,000
for purposes of such paragraph, if the agency
determines that the greater amount would be consistent
with the principles of safety and soundness for insured
depository institutions.
(e) Examination Fees.--
(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] and may be expended by
the Board only to the extent as provided in advance by
appropriations Acts to cover the costs incurred in
carrying out such examinations.
(2) Examination of affiliates.--The cost of
conducting any examination of any affiliate of any
insured depository institution under subsection (b)(4)
may be assessed by the Corporation against each
affiliate which is examined to meet the Corporation's
expenses in carrying out such examination.
(3) Assessment against depository institution in case
of affiliate's refusal to pay.--
(A) In general.--Subject to subparagraph (B),
if any affiliate of any insured depository
institution--
(i) refuses to pay any assessment
under paragraph (2); or
(ii) fails to pay any such assessment
before the end of the 60-day period
beginning on the date the affiliate
receives notice of the assessment,
the Corporation may assess such cost against,
and collect such cost from, the depository
institution.
(B) Affiliate of more than 1 depository
institution.--If any affiliate referred to in
subparagraph (A) is an affiliate of more than 1
insured depository institution, the assessment
under subparagraph (A) may be assessed against
the depository institutions in such proportions
as the Corporation determines to be
appropriate.
(4) Civil money penalty for affiliate's refusal to
cooperate.--
(A) Penalty imposed.--If any affiliate of any
insured depository institution--
(i) refuses to permit an examiner
appointed by the Board of Directors
under subsection (b)(1) to conduct an
examination; or
(ii) refuses to provide any
information required to be disclosed in
the course of any examination,
the depository institution shall forfeit and
pay a penalty of not more than $5,000 for each
day that any such refusal continues.
(B) Assessment and collection.--Any penalty
imposed under subparagraph (A) shall be
assessed and collected by the Corporation in
the manner provided in section 8(i)(2).
(5) Deposits of examination assessment.--Amounts
received by the Corporation under this subsection
(other than paragraph (4)) may be deposited in the
manner provided in section 13.
(f) Preservation of Agency Records.--
(1) In general.--A Federal banking agency may cause
any and all records, papers, or documents kept by the
agency or in the possession or custody of the agency to
be--
(A) photographed or microphotographed or
otherwise reproduced upon film; or
(B) preserved in any electronic medium or
format which is capable of--
(i) being read or scanned by
computer; and
(ii) being reproduced from such
electronic medium or format by printing
any other form of reproduction of
electronically stored data.
(2) Treatment as original records.--Any photographs,
microphotographs, or photographic film or copies
thereof described in paragraph (1)(A) or reproduction
of electronically stored data described in paragraph
(1)(B) shall be deemed to be an original record for all
purposes, including introduction in evidence in all
State and Federal courts or administrative agencies,
and shall be admissible to prove any act, transaction,
occurrence, or event therein recorded.
(3) Authority of the federal banking agencies.--Any
photographs, microphotographs, or photographic film or
copies thereof described in paragraph (1)(A) or
reproduction of electronically stored data described in
paragraph (1)(B) shall be preserved in such manner as
the Federal banking agency shall prescribe, and the
original records, papers, or documents may be destroyed
or otherwise disposed of as the Federal banking agency
may direct.
(g) Authority To Prescribe Regulations and Definitions.--
Except to the extent that authority under this Act is conferred
on any of the Federal banking agencies other than the
Corporation, the Corporation may--
(1) prescribe regulations to carry out this Act; and
(2) by regulation define terms as necessary to carry
out this Act.
(h) Coordination of Examination Authority.--
(1) State bank supervisors of home and host states.--
(A) Home state of bank.--The appropriate
State bank supervisor of the home State of an
insured State bank has authority to examine and
supervise the bank.
(B) Host state branches.--The State bank
supervisor of the home State of an insured
State bank and any State bank supervisor of an
appropriate host State shall exercise its
respective authority to supervise and examine
the branches of the bank in a host State in
accordance with the terms of any applicable
cooperative agreement between the home State
bank supervisor and the State bank supervisor
of the relevant host State.
(C) Supervisory fees.--Except as expressly
provided in a cooperative agreement between the
State bank supervisors of the home State and
any host State of an insured State bank, only
the State bank supervisor of the home State of
an insured State bank may levy or charge State
supervisory fees on the bank.
(2) Host state examination.--
(A) In general.--With respect to a branch
operated in a host State by an out-of-State
insured State bank that resulted from an
interstate merger transaction approved under
section 44, or that was established in such
State pursuant to section 5155(g) of the
Revised Statutes of the United States, the
third undesignated paragraph of section 9 of
the Federal Reserve Act or section 18(d)(4) of
this Act, the appropriate State bank supervisor
of such host State may--
(i) with written notice to the State
bank supervisor of the bank's home
State and subject to the terms of any
applicable cooperative agreement with
the State bank supervisor of such home
State, examine such branch for the
purpose of determining compliance with
host State laws that are applicable
pursuant to section 24(j), including
those that govern community
reinvestment, fair lending, and
consumer protection; and
(ii) if expressly permitted under and
subject to the terms of a cooperative
agreement with the State bank
supervisor of the bank's home State or
if such out-of-State insured State bank
has been determined to be in a troubled
condition by either the State bank
supervisor of the bank's home State or
the bank's appropriate Federal banking
agency, participate in the examination
of the bank by the State bank
supervisor of the bank's home State to
ascertain that the activities of the
branch in such host State are not
conducted in an unsafe or unsound
manner.
(B) Notice of determination.--
(i) In general.--The State bank
supervisor of the home State of an
insured State bank shall notify the
State bank supervisor of each host
State of the bank if there has been a
final determination that the bank is in
a troubled condition.
(ii) Timing of notice.--The State
bank supervisor of the home State of an
insured State bank shall provide notice
under clause (i) as soon as is
reasonably possible, but in all cases
not later than 15 business days after
the date on which the State bank
supervisor has made such final
determination or has received written
notification of such final
determination.
(3) Host state enforcement.--If the State bank
supervisor of a host State determines that a branch of
an out-of-State insured State bank is violating any law
of the host State that is applicable to such branch
pursuant to section 24(j), including a law that governs
community reinvestment, fair lending, or consumer
protection, the State bank supervisor of the host State
or, to the extent authorized by the law of the host
State, a host State law enforcement officer may, with
written notice to the State bank supervisor of the
bank's home State and subject to the terms of any
applicable cooperative agreement with the State bank
supervisor of the bank's home State, undertake such
enforcement actions and proceedings as would be
permitted under the law of the host State as if the
branch were a bank chartered by that host State.
(4) Cooperative agreement.--
(A) In general.--The State bank supervisors
from 2 or more States may enter into
cooperative agreements to facilitate State
regulatory supervision of State banks,
including cooperative agreements relating to
the coordination of examinations and joint
participation in examinations.
(B) Definition.--For purposes of this
subsection, the term ``cooperative agreement''
means a written agreement that is signed by the
home State bank supervisor and the host State
bank supervisor to facilitate State regulatory
supervision of State banks, and includes
nationwide or multi-State cooperative
agreements and cooperative agreements solely
between the home State and host State.
(C) Rule of construction.--Except for State
bank supervisors, no provision of this
subsection relating to such cooperative
agreements shall be construed as limiting in
any way the authority of home State and host
State law enforcement officers, regulatory
supervisors, or other officials that have not
signed such cooperative agreements to enforce
host State laws that are applicable to a branch
of an out-of-State insured State bank located
in the host State pursuant to section 24(j).
(5) Federal regulatory authority.--No provision of
this subsection shall be construed as limiting in any
way the authority of any Federal banking agency.
(6) State taxation authority not affected.--No
provision of this subsection shall be construed as
affecting the authority of any State or political
subdivision of any State to adopt, apply, or administer
any tax or method of taxation to any bank, bank holding
company, or foreign bank, or any affiliate of any bank,
bank holding company, or foreign bank, to the extent
that such tax or tax method is otherwise permissible by
or under the Constitution of the United States or other
Federal law.
(7) Definitions.--For purpose of this section, the
following definitions shall apply:
(A) Host state, home state, out-of-State
bank.--The terms ``host State'', ``home
State'', and ``out-of-State bank'' have the
same meanings as in section 44(g).
(B) State supervisory fees.--The term ``State
supervisory fees'' means assessments,
examination fees, branch fees, license fees,
and all other fees that are levied or charged
by a State bank supervisor directly upon an
insured State bank or upon branches of an
insured State bank.
(C) Troubled condition.--Solely for purposes
of paragraph (2)(B), an insured State bank has
been determined to be in ``troubled condition''
if the bank--
(i) has a composite rating, as
determined in its most recent report of
examination, of 4 or 5 under the
Uniform Financial Institutions Ratings
System;
(ii) is subject to a proceeding
initiated by the Corporation for
termination or suspension of deposit
insurance; or
(iii) is subject to a proceeding
initiated by the State bank supervisor
of the bank's home State to vacate,
revoke, or terminate the charter of the
bank, or to liquidate the bank, or to
appoint a receiver for the bank.
(D) Final determination.--For purposes of
paragraph (2)(B), the term ``final
determination'' means the transmittal of a
report of examination to the bank or
transmittal of official notice of proceedings
to the bank.
(i) Flood Insurance Compliance by Insured Depository
Institutions.--
(1) Examinations.--The appropriate Federal banking
agency shall, during each scheduled on-site examination
required by this section, determine whether the insured
depository institution is complying with the
requirements of the national flood insurance program.
(2) Report.--
(A) Requirement.--Not later than 1 year after
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994 and biennially thereafter for the next 4
years, each appropriate Federal banking agency
shall submit a report to the Congress on
compliance by insured depository institutions
with the requirements of the national flood
insurance program.
(B) Contents.--Each report submitted under
this paragraph shall include a description of
the methods used to determine compliance, the
number of institutions examined during the
reporting year, a listing and total number of
institutions found not to be in compliance,
actions taken to correct incidents of
noncompliance, and an analysis of compliance,
including a discussion of any trends, patterns,
and problems, and recommendations regarding
reasonable actions to improve the efficiency of
the examinations processes.
(j) Consultation Among Examiners.--
(1) In general.--Each appropriate Federal banking
agency shall take such action as may be necessary to
ensure that examiners employed by the agency--
(A) consult on examination activities with
respect to any depository institution; and
(B) achieve an agreement and resolve any
inconsistencies in the recommendations to be
given to such institution as a consequence of
any examinations.
(2) Examiner-in-charge.--Each appropriate Federal
banking agency shall consider appointing an examiner-
in-charge with respect to a depository institution to
ensure consultation on examination activities among all
of the examiners of that agency involved in
examinations of the institution.
(k) One-Year Restrictions on Federal Examiners of Financial
Institutions.--
(1) In general.--In addition to other applicable
restrictions set forth in title 18, United States Code,
the penalties set forth in paragraph (6) of this
subsection shall apply to any person who--
(A) was an officer or employee (including any
special Government employee) of a Federal
banking agency or a Federal reserve bank;
(B) served 2 or more months during the final
12 months of his or her employment with such
agency or entity as the senior examiner (or a
functionally equivalent position) of a
depository institution or depository
institution holding company with continuing,
broad responsibility for the examination (or
inspection) of that depository institution or
depository institution holding company on
behalf of the relevant agency or Federal
reserve bank; and
(C) within 1 year after the termination date
of his or her service or employment with such
agency or entity, knowingly accepts
compensation as an employee, officer, director,
or consultant from--
(i) such depository institution, any
depository institution holding company
that controls such depository
institution, or any other company that
controls such depository institution;
or
(ii) such depository institution
holding company or any depository
institution that is controlled by such
depository institution holding company.
(2) Definitions.--For purposes of this subsection--
(A) the term ``depository institution''
includes an uninsured branch or agency of a
foreign bank, if such branch or agency is
located in any State; and
(B) the term ``depository institution holding
company'' includes any foreign bank or company
described in section 8(a) of the International
Banking Act of 1978.
(3) Rules of construction.--For purposes of this
subsection, a foreign bank shall be deemed to control
any branch or agency of the foreign bank, and a person
shall be deemed to act as a consultant for a depository
institution, depository institution holding company, or
other company, only if such person directly works on
matters for, or on behalf of, such depository
institution, depository institution holding company, or
other company.
(4) Regulations.--
(A) In general.--Each Federal banking agency
shall prescribe rules or regulations to
administer and carry out this subsection,
including rules, regulations, or guidelines to
define the scope of persons referred to in
paragraph (1)(B).
(B) Consultation required.--The Federal
banking agencies shall consult with each other
for the purpose of assuring that the rules and
regulations issued by the agencies under
subparagraph (A) are, to the extent possible,
consistent, comparable, and practicable, taking
into account any differences in the supervisory
programs utilized by the agencies for the
supervision of depository institutions and
depository institution holding companies.
(5) Waiver.--
(A) Agency authority.--A Federal banking
agency may grant a waiver, on a case by case
basis, of the restriction imposed by this
subsection to any officer or employee
(including any special Government employee) of
that agency, and the Board of Governors of the
Federal Reserve System may grant a waiver of
the restriction imposed by this subsection to
any officer or employee of a Federal reserve
bank, if the head of such agency certifies in
writing that granting the waiver would not
affect the integrity of the supervisory program
of the relevant Federal banking agency.
(B) Definition.--For purposes of this
paragraph, the head of an agency is--
(i) the Comptroller of the Currency,
in the case of the Office of the
Comptroller of the Currency;
(ii) the Chairman of the Board of
Governors of the Federal Reserve
System, in the case of the Board of
Governors of the Federal Reserve
System; and
(iii) the Chairperson of the Board of
Directors, in the case of the
Corporation.
(6) Penalties.--
(A) In general.--In addition to any other
administrative, civil, or criminal remedy or
penalty that may otherwise apply, whenever a
Federal banking agency determines that a person
subject to paragraph (1) has become associated,
in the manner described in paragraph (1)(C),
with a depository institution, depository
institution holding company, or other company
for which such agency serves as the appropriate
Federal banking agency, the agency shall impose
upon such person one or more of the following
penalties:
(i) Industry-wide prohibition
order.--The Federal banking agency
shall serve a written notice or order
in accordance with and subject to the
provisions of section 8(e)(4) for
written notices or orders under
paragraph (1) or (2) of section 8(e),
upon such person of the intention of
the agency--
(I) to remove such person
from office or to prohibit such
person from further
participation in the conduct of
the affairs of the depository
institution, depository
institution holding company, or
other company for a period of
up to 5 years; and
(II) to prohibit any further
participation by such person,
in any manner, in the conduct
of the affairs of any insured
depository institution for a
period of up to 5 years.
(ii) Civil monetary penalty.--The
Federal banking agency may, in an
administrative proceeding or civil
action in an appropriate United States
district court, impose on such person a
civil monetary penalty of not more than
$250,000. Any administrative proceeding
under this clause shall be conducted in
accordance with section 8(i). In lieu
of an action by the Federal banking
agency under this clause, the Attorney
General of the United States may bring
a civil action under this clause in the
appropriate United States district
court.
(B) Scope of prohibition order.--Any person
subject to an order issued under subparagraph
(A)(i) shall be subject to paragraphs (6) and
(7) of section 8(e) in the same manner and to
the same extent as a person subject to an order
issued under such section.
(C) Definitions.--Solely for purposes of this
paragraph, the ``appropriate Federal banking
agency'' for a company that is not a depository
institution or depository institution holding
company shall be the Federal banking agency on
whose behalf the person described in paragraph
(1) performed the functions described in
paragraph (1)(B).
* * * * * * *
Sec. 27. (a) In order to prevent discrimination against
State-chartered insured depository institutions, including
insured savings banks, or insured branches of foreign banks
with respect to interest rates, if the applicable rate
prescribed in this subsection exceeds the rate such State bank
or insured branch of a foreign bank would be permitted to
charge in the absence of this subsection, such State bank or
such insured branch of a foreign bank may, notwithstanding any
State constitution or statute which is hereby preempted for the
purposes of this section, take, receive, reserve, and charge on
any loan or discount made, or upon any note, bill of exchange,
or other evidence of debt, interest at a rate of not more than
1 per centum in excess of the discount rate on ninety-day
commercial paper in effect at the Federal Reserve bank in the
Federal Reserve district where such State bank or such insured
branch of a foreign bank is located or at the rate allowed by
the laws of the State, territory, or district where the bank is
located, whichever may be greater. A loan that is valid when
made as to its maximum rate of interest in accordance with this
section shall remain valid with respect to such rate regardless
of whether the loan is subsequently sold, assigned, or
otherwise transferred to a third party, and may be enforced by
such third party notwithstanding any State law to the contrary.
(b) If the rate prescribed in subsection (a) exceeds the rate
such State bank or such insured branch of a foreign bank would
be permitted to charge in the absence of this section, and such
State fixed rate is thereby preempted by the rate described in
subsection (a), the taking, receiving, reserving, or charging a
greater rate of interest than is allowed by subsection (a),
when knowingly done, shall be deemed a forfeiture of the entire
interest which the note, bill, or other evidence of debt
carries with it, or which has been agreed to be paid thereon.
If such greater rate of interest has been paid, the person who
paid it may recover in a civil action commenced in a court of
appropriate jurisdiction not later than two years after the
date of such payment, an amount equal to twice the amount of
the interest paid from such State bank or such insured branch
of a foreign bank taking, receiving, reserving, or charging
such interest.
* * * * * * *
----------
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
* * * * * * *
TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES
* * * * * * *
Subtitle A--Supervision and Regulation of Enterprises
PART 1--FINANCIAL SAFETY AND SOUNDNESS REGULATOR
* * * * * * *
SEC. 1316. FUNDING.
[(a) Annual Assessments.--The Director shall establish and
collect from the regulated entities annual assessments in an
amount not exceeding the amount sufficient to provide for
reasonable costs (including administrative costs) and expenses
of the Agency, including--
[(1) the expenses of any examinations under section
1317 of this Act and under section 20 of the Federal
Home Loan Bank Act;
[(2) the expenses of obtaining any reviews and credit
assessments under section 1319;
[(3) such amounts in excess of actual expenses for
any given year as deemed necessary by the Director to
maintain a working capital fund in accordance with
subsection (e); and
[(4) the windup of the affairs of the Office of
Federal Housing Enterprise Oversight and the Federal
Housing Finance Board under title III of the Federal
Housing Finance Regulatory Reform Act of 2008.]
(a) Appropriations Requirement.--
(1) Recovery of costs of annual appropriation.--The
Agency shall collect assessments and other fees that
are designed to recover the costs to the Government of
the annual appropriation to the Agency by Congress.
(2) Offsetting collections.--Assessments and other
fees described under paragraph (1) for any fiscal
year--
(A) shall be deposited and credited as
offsetting collections to the account providing
appropriations to the Agency; and
(B) shall not be collected for any fiscal
year except to the extent provided in advance
in appropriation Acts.
(b) Allocation of Annual Assessment to Enterprises.--
(1) Amount of payment.--Each enterprise shall pay to
the Director a proportion of the annual assessment made
pursuant to subsection (a) that bears the same ratio to
the total annual assessment that the total assets of
each enterprise bears to the total assets of both
enterprises.
(2) Separate treatment of federal home loan bank and
enterprise assessments.--Assessments collected from the
enterprises shall not exceed the amounts sufficient to
provide for the costs and expenses described in
subsection (a) relating to the enterprises. Assessments
collected from the Federal Home Loan Banks shall not
exceed the amounts sufficient to provide for the costs
and expenses described in subsection (a) relating to
the Federal Home Loan Banks.
(3) Timing of payment.--The annual assessment shall
be payable semiannually for each fiscal year, on
October 1 and April 1.
(4) Definition.--For the purpose of this section, the
term ``total assets'' means, with respect to an
enterprise, the sum of--
(A) on-balance-sheet assets of the
enterprise, as determined in accordance with
generally accepted accounting principles;
(B) the unpaid principal balance of
outstanding mortgage-backed securities issued
or guaranteed by the enterprise that are not
included in subparagraph (A); and
(C) other off-balance-sheet obligations as
determined by the Director.
(c) Increased Costs of Regulation.--
(1) Increase for inadequate capitalization.--The
semiannual payments made pursuant to subsection (b) by
any regulated entity that is not classified (for
purposes of subtitle B) as adequately capitalized may
be increased, as necessary, in the discretion of the
Director to pay additional estimated costs of
regulation of the regulated entity.
(2) Adjustment for enforcement activities.--The
Director may adjust the amounts of any semiannual
payments for an assessment under subsection (a) that
are to be paid pursuant to subsection (b) by a
regulated entity, as necessary in the discretion of the
Director, to ensure that the costs of enforcement
activities under this Act for a regulated entity are
borne only by such regulated entity.
(3) Additional assessment for deficiencies.--If at
any time, as a result of increased costs of regulation
of a regulated entity that is not classified (for
purposes of subtitle B) as adequately capitalized or as
the result of supervisory or enforcement activities
under this Act for a regulated entity, the amount
available from any semiannual payment made by such
regulated entity pursuant to subsection (b) is
insufficient to cover the costs of the Agency with
respect to such entity, the Director may make and
collect from such regulated entity an immediate
assessment to cover the amount of such deficiency for
the semiannual period. If, at the end of any semiannual
period during which such an assessment is made, any
amount remains from such assessment, such remaining
amount shall be deducted from the assessment for such
regulated entity for the following semiannual period.
(d) Surplus.--Except with respect to amounts collected
pursuant to subsection (a)(3), if any amount from any annual
assessment collected from an enterprise remains unobligated at
the end of the year for which the assessment was collected,
such amount shall be credited to the assessment to be collected
from the enterprise for the following year.
(e) Working Capital Fund.--At the end of each year for which
an assessment under this section is made, the Director shall
remit to each regulated entity any amount of assessment
collected from such regulated entity that is attributable to
subsection (a)(3) and is in excess of the amount the Director
deems necessary to maintain a working capital fund.
[(f) Treatment of Assessments.--
[(1) Deposit.--Amounts received by the Director from
assessments under this section may be deposited by the
Director in the manner provided in section 5234 of the
Revised Statutes of the United States (12 U.S.C. 192)
for monies deposited by the Comptroller of the
Currency.
[(2) Not government funds.--The amounts received by
the Director from any assessment under this section
shall not be construed to be Government or public funds
or appropriated money.
[(3) No apportionment of funds.--Notwithstanding any
other provision of law, the amounts received by the
Director from any assessment under this section shall
not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under
any other authority.
[(4) Use of funds.--The Director may use any amounts
received by the Director from assessments under this
section for compensation of the Director and other
employees of the Agency and for all other expenses of
the Director and the Agency.
[(5) Availability of oversight fund amounts.--
Notwithstanding any other provision of law, any amounts
remaining in the Federal Housing Enterprises Oversight
Fund established under this section (as in effect
before the effective date of the Federal Housing
Finance Regulatory Reform Act of 2008, and any amounts
remaining from assessments on the Federal Home Loan
Banks pursuant to section 18(b) of the Federal Home
Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such
effective date, be treated for purposes of this
subsection as amounts received from assessments under
this section.
[(6) Treasury investments.--
[(A) Authority.--The Director may request the
Secretary of the Treasury to invest such
portions of amounts received by the Director
from assessments paid under this section that,
in the Director's discretion, are not required
to meet the current working needs of the
Agency.
[(B) Government obligations.--Pursuant to a
request under subparagraph (A), the Secretary
of the Treasury shall invest such amounts in
Government obligations guaranteed as to
principal and interest by the United States
with maturities suitable to the needs of the
Agency and bearing interest at a rate
determined by the Secretary of the Treasury
taking into consideration current market yields
on outstanding marketable obligations of the
United States of comparable maturity.]
(g) Budget and Financial Management.--
(1) Financial operating plans and forecasts.--The
Director shall provide to the Director of the Office of
Management and Budget copies of the Director's
financial operating plans and forecasts, as prepared by
the Director in the ordinary course of the Agency's
operations, and copies of the quarterly reports of the
Agency's financial condition and results of operations,
as prepared by the Director in the ordinary course of
the Agency's operations.
(2) Financial statements.--The Agency shall prepare
annually a statement of--
(A) assets and liabilities and surplus or
deficit;
(B) income and expenses; and
(C) sources and application of funds.
(3) Financial management systems.--The Agency shall
implement and maintain financial management systems
that--
(A) comply substantially with Federal
financial management systems requirements and
applicable Federal accounting standards; and
(B) use a general ledger system that accounts
for activity at the transaction level.
(4) 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 Agency, using the standards established in section
3512(c) of title 31, United States Code.
(5) 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 paragraph (1) or
any jurisdiction or oversight over the affairs or
operations of the Agency.
(h) Audit of Agency.--
(1) In general.--The Comptroller General shall
annually audit the financial transactions of the Agency
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 Agency 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
Agency 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 Agency shall remain
in possession and custody of the Agency. 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 Comptroller General's right of access to such
information shall be enforceable pursuant to section
716(c) of title 31, United States Code.
(2) 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 Agency, 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 Agency at the
time submitted to the Congress.
(3) 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 of the Comptroller General, the Director of the
Agency 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.
* * * * * * *
----------
FEDERAL CREDIT UNION ACT
* * * * * * *
TITLE I--FEDERAL CREDIT UNIONS
* * * * * * *
fees
Sec. 105. (a) In accordance with rules prescribed by the
Board, each Federal credit union shall pay to the
Administration an annual operating fee which may be composed of
one or more charges identified as to the function or functions
for which assessed.
(b) The fee assessed under this section shall be determined
according to a schedule, or schedules, or other method
determined by the Board to be appropriate, which gives due
consideration to the expenses of the Administration in carrying
out its responsibilities under this Act and to the ability of
Federal credit unions to pay the fee. The Board shall, among
other things, determine the periods for which the fee shall be
assessed and the date or dates for the payment of the fee or
increments thereof.
(c) If the annual operating fee is composed of separate
charges, no supervision charge shall be payable by a Federal
credit union, and the Board may waive payment of any or all
other charges comprising the fee, with respect to the year in
which its charter is issued, or in which final distribution is
made in its liquidation or the charter is canceled.
(d) [All] (1) All operating fees shall be deposited with the
Treasurer of the United States [for the account of the
Administration and may be expended by the Board to defray the
expenses incurred in carrying out the provisions of this Act
including the examination and supervision of Federal credit
unions] and may be expended by the Board only to the extent as
provided in advance by appropriations Acts, to cover the costs
incurred in carrying out the provisions of this Act with
respect to the costs of the examination and supervision of
Federal credit unions and the proportion of the administrative
costs of the Board related to the examination and supervision
of Federal credit unions.
(2)(A) The Board may only use amounts in the NCUA Operating
Fund to the extent as provided in advance by appropriations
Acts, including to pay for the costs incurred by the Board in
carrying out the examination and supervision of Federal credit
unions and the proportion of the administrative costs of the
Board related to the examination and supervision of Federal
credit unions.
(B) Subparagraph (A) shall not apply to the Board's
activities carried out pursuant to title II.
(e)(1) Upon request of the Board, the Secretary of the
Treasury shall invest and reinvest such portions of the annual
operating fees deposited under subsection (d) as the Board
determines are not needed for current operations.
(2) Such investments may be made only in interest bearing
securities of the United States with maturities requested by
the Board bearing interest at rates determined by the Secretary
of the Treasury, taking into consideration current market
yields on outstanding marketable obligations of the United
States of comparable maturities.
(3) All income derived from such investments and
reinvestments shall be deposited to the account of the
Administration described in subsection (d).
* * * * * * *
certain powers of board
Sec. 120. (a) The Board may prescribe rules and regulations
for the administration of this Act (including, but not by way
of limitation, the merger, consolidation, and dissolution of
corporations organized under this Act). Any central credit
union chartered by the Board shall be subject to such rules,
regulations, and orders as the Board deems appropriate and,
except as otherwise specifically provided in such rules,
regulations, or orders, shall be vested with or subject to the
same rights, privileges, duties, restrictions, penalties,
liabilities, conditions, and limitations that would apply to
all Federal credit unions under this Act.
(b)(1) The Board may suspend or revoke the charter of any
Federal credit union, or place the same in involuntary
liquidation and appoint a liquidating agent therefor, upon its
finding that the organization is bankrupt or insolvent, or has
violated any of the provisions of its charter, its bylaws, this
Act, or any regulations issued thereunder.
(2) The Board, through such persons as it shall designate,
may examine any Federal credit union in voluntary liquidation
and, upon its finding that such voluntary liquidation is not
being conducted in an orderly or efficient manner or in the
best interests of its members, may terminate such voluntary
liquidation and place such organization in involuntary
liquidation and appoint a liquidating agent therefor.
(3) Such liquidating agent shall have power and authority,
subject to the control and supervision of the Board and under
such rules and regulations as the Board may prescribe, (A) to
receive and take possession of the books, records, assets, and
property of every description of the Federal credit union in
liquidation, to sell, enforce collection of, and liquidate all
such assets and property, to compound all bad or doubtful
debts, and to sue in his own name or in the name of the Federal
credit union in liquidation, and defend such actions as may be
brought against him as liquidating agent or against the Federal
credit union; (B) to receive, examine, and pass upon all claims
against the Federal credit union in liquidation, including
claims of members on member accounts; (C) to make distribution
and payment to creditors and members as their interests may
appear; and (D) to execute such documents and papers and to do
such other acts and things which he may deem necessary or
desirable to discharge his duties hereunder.
(4) Subject to the control and supervision of the Board and
under such rules and regulations as the Board may prescribe,
the liquidating agent of a Federal credit union in involuntary
liquidation shall (A) cause notice to be given to creditors and
members to present their claims and make legal proof thereof,
which notice shall be published once a week in each of three
successive weeks in a newspaper of general circulation in each
county in which the Federal credit union in liquidation
maintained an office or branch for the transaction of business
on the date it ceased unrestricted operations; except that
whenever the aggregate book value of the assets and property of
a Federal credit union in involuntary liquidation is less than
$1,000, unless the Board shall find that its books and records
do not contain a true and accurate record of its liabilities,
he shall declare such Federal credit union in liquidation to be
a ``no publication'' liquidation, and publication of notice to
creditors and members shall not be required in such case; (B)
from time to time make a ratable dividend on all such claims as
may have been proved to his satisfaction or adjudicated in a
court of competent jurisdiction and, after the assets of such
organization have been liquidated, make further dividends on
all claims previously proved or adjudicated, and he may accept
in lieu of a formal proof of claim on behalf of any creditor or
member the statement of any amount due to such creditor or
member as shown on the books and records of the credit union;
but all claims not filed before payment of the final dividend
shall be barred and claims rejected or disallowed by the
liquidating agent shall be likewise barred unless suit be
instituted thereon within three months after notice of
rejection or disallowance; and (C) in a ``no publication''
liquidation, determine from all sources available to him, and
within the limits of available funds of the Federal credit
union, the amounts due to creditors and members, and after
sixty days shall have elapsed from the date of his appointment
distribute the funds of the Federal credit union to creditors
and members ratably and as their interests may appear.
(5) Upon certification by the liquidating agent in the case
of an involuntary liquidation, and upon such proof as shall be
satisfactory to the Board in the case of a voluntary
liquidation, that distribution has been made and that
liquidation has been completed, as provided herein, the Board
shall cancel the charter of such Federal credit union; but the
corporate existence of the Federal credit union shall continue
for a period of three years from the date of such cancellation
of its charter, during which period the liquidating agent, or
his duly appointed successor, or such persons as the Board
shall designate, may act on behalf of the Federal credit union
for the purpose of paying, satisfying, and discharging any
existing liabilities or obligations, collecting and
distributing its assets, and doing all other acts required to
adjust and wind up its business and affairs, and it may sue and
be sued in its corporate name.
(c) After the expiration of five years from the date of
cancellation of the charter of a Federal credit union the Board
may, in its discretion, destroy any or all books and records of
such Federal credit union in its possession or under its
control.
(d) The Board is authorized and empowered to execute any and
all functions and perform any and all duties vested in it
hereby, through such persons as it shall designate or employ;
and it may delegate to any person or persons, including any
institution operating under the general supervision of the
Administration, the performance and discharge of any authority,
power, or function vested in it by this Act.
(e) All books and records of Federal credit unions shall be
kept and reports shall be made in accordance with forms
approved by the Board.
(f)(1) The Board is authorized to make investigations and to
conduct researches and studies of the problems of persons of
small means in obtaining credit at reasonable rates of
interest, and of the methods and benefits of cooperative saving
and lending among such persons. It is further authorized to
make reports of such investigations and to publish and
disseminate the same.
(2)(A) The Board is authorized to conduct directly, or to
make grants to or contracts with colleges or universities,
State or local educational agencies, or other appropriate
public or private nonprofit organizations to conduct, programs
for the training of persons engaged, or preparing to engage, in
the operation of credit unions, and in related consumer
counseling programs, serving the poor. It is authorized to
establish a program of experimental, developmental,
demonstration, and pilot projects, either directly or by grants
to public or private nonprofit organizations, including credit
unions, or by contracts with such organizations or other
private organizations, designed to promote more effective
operation of credit unions, and related consumer counseling
programs, serving the poor.
(B) In carrying out its authority under this paragraph, the
Board shall consult with officials of the Office of Economic
Opportunity and other appropriate Federal agencies responsible
for the administration of projects or programs concerned with
problems of the poor. The development and operation of programs
and projects under this paragraph shall involve maximum
feasible participation of residents of the areas and members of
the groups served by such programs and projects, with community
action agencies established under the provisions of the
Economic Opportunity Act of 1964 serving, to the extent
feasible, as the means through which such participation is
achieved.
(C) In order to carry out the purposes of this paragraph,
there is authorized to be appropriated, as a supplement to any
funds that may be expended by the Board pursuant to sections
105 and 106 for such purposes, not to exceed $300,000 for the
fiscal year ending June 30, 1970, and not to exceed $1,000,000
for the fiscal year ending June 30, 1971.
(g) Any officer or employee of the Administration is
authorized, when designated for the purpose by the Board, to
administer oaths and affirmations and to take affidavits and
depositions touching upon any matter within the jurisdiction of
the Administration.
(h) The Board is authorized, empowered, and directed to
require that every person appointed or elected by any Federal
credit union to any position requiring the receipt, payment, or
custody of money or other personal property owned by a Federal
credit union, or in its custody or control as collateral or
otherwise, give bond in a corporate surety company holding a
certificate of authority from the Secretary of the Treasury
under chapter 93 of title 31, United States Code, as an
acceptable surety on Federal bonds. Any such bond or bonds
shall be in a form approved by the Board with a view to
providing surety coverage to the Federal credit union with
reference to loss by reason of acts of fraud or dishonesty
including forgery, theft, embezzlement, wrongful abstraction,
or misapplication on the part of the person, directly or
through connivance with others, and such other surety coverages
as the Board may determine to be reasonably appropriate or as
elsewhere required by this Act. Any such bond or bonds shall be
in such an amount in relation to the money or other personal
property involved or in relation to the assets of the Federal
credit union as the Board may from time to time prescribe by
regulation for the purpose of requiring reasonable coverage. In
lieu of individual bonds the Board may approve the use of a
form of schedule or blanket bond which covers all of the
officers and employees of a Federal credit union whose duties
include the receipt, payment, or custody of money or other
personal property for or on behalf of the Federal credit union.
The Board may also approve the use of a form of excess coverage
bond whereby a Federal credit union may obtain an amount of
coverage in excess of the basic surety coverage.
(i) In addition to the authority conferred upon them by other
sections of this Act, the Board is authorized in carrying out
its functions under this Act--
(1) to appoint such personnel as may be necessary to
enable the Administration to carry out its functions;
(2) to expend such funds, enter into such contracts
with public and private organizations and persons, make
such payments in advance or by way of reimbursement,
acquire and dispose of, by lease or purchase, real or
personal property, without regard to the provisions of
any other law applicable to executive or independent
agencies of the United States, and perform such other
functions or acts as it may deem necessary or
appropriate to carry out the provisions of this Act, in
accordance with the rules and regulations or policies
established by the Board not inconsistent with this
Act; and
(3) to pay stipends, including allowances for travel
to and from the place of residence, to any individual
to study in a program assisted under this Act upon a
determination by the Board that assistance to such
individual in such studies will be in furtherance of
the purposes of this Act.
(j) Staff.--
(1) Appointment and compensation.--The Board shall
fix the compensation and number of, and appoint and
direct, employees of the Board. Rates of basic pay for
employees of the Board may be set and adjusted by the
Board without regard to the provisions of chapter 51 or
subchapter III of chapter 53 of title 5, United States
Code.
(2) Additional compensation and benefits.--The Board
may provide additional compensation and benefits to
employees of the Board if the same type of compensation
or benefits are then being provided by any other
Federal bank regulatory agency or, if not then being
provided, could be provided by such an agency under
applicable provisions of law, rule, or regulation. In
setting and adjusting the total amount of compensation
and benefits for employees of the Board, the Board
shall seek to maintain comparability with other Federal
bank regulatory agencies.
(3) Funding.--The salaries and expenses of the Board
and employees of the Board related to the examination
and supervision of Federal credit unions under this Act
and the proportion of the administrative costs of the
Board related to the examination and supervision of
Federal credit unions under this Act shall be paid from
fees and assessments (including income earned on
insurance deposits) levied on [insured credit unions
under this Act] Federal credit unions under this title,
only to the extent as provided in advance by
appropriations Acts.
* * * * * * *
TITLE II--SHARE INSURANCE
* * * * * * *
reports of condition; certified statements; premiums for insurance
Sec. 202. (a)(1) Each insured credit union shall make reports
of condition to the Board upon dates which shall be selected by
them. Such reports of condition shall be in such form and shall
contain such information as the Board may require. The
reporting dates selected for reports of condition shall be the
same for all insured credit unions except that when any of said
reporting dates is a nonbusiness day for any credit union the
preceding business day shall be its reporting date. The total
amount of the member accounts of each insured credit union as
of each reporting date shall be reported in such reports of
condition in accordance with regulations prescribed by the
Board. Each report of condition shall contain a declaration by
the president, by a vice president, by the treasurer, or by any
other officer designated by the board of directors of the
reporting credit union to make such declaration, that the
report is true and correct to the best of such officer's
knowledge and belief. Unless such requirement is waived by the
Board, the correctness of each report of condition shall be
attested by the signatures of three of the officers of the
reporting credit union with the declaration that the report has
been examined by them and to the best of their knowledge and
belief is true and correct.
(2) The Board may call for such other reports as it may from
time to time require.
(3) The Board may require reports of condition to be
published in such manner, not inconsistent with any applicable
law, as it may direct. Any insured credit union which maintains
procedures reasonably adapted to avoid any inadvertent error
and, unintentionally and as a result of such an error, fails to
submit or publish any report required under this subsection or
section 106, within the period of time specified by the Board,
or submits or publishes any false or misleading report or
information, or inadvertently transmits or publishes any report
which is minimally late, shall be subject to a penalty of not
more than $2,000 for each day during which such failure
continues or such false or misleading information is not
corrected. The insured credit union shall have the burden of
proving that an error was inadvertent and that a report was
inadvertently transmitted or published late. Any insured credit
union which fails to submit or publish any report required
under this subsection or section 106, within the period of time
specified by the Board, or submits or publishes any false or
misleading report or information, in a manner not described in
the 2nd preceding sentence shall be subject to a penalty of not
more than $20,000 for each day during which such failure
continues or such false or misleading information is not
corrected. Notwithstanding the preceding sentence, if any
insured credit union knowingly or with reckless disregard for
the accuracy of any information or report described in such
sentence submits or publishes any false or misleading report or
information, the Board may assess a penalty of not more than
$1,000,000 or 1 percent of total assets of such credit union,
whichever is less, per day for each day during which such
failure continues or such false or misleading information is
not corrected. Any penalty imposed under any of the 4 preceding
sentences shall be assessed and collected by the Board in the
manner provided in section 206(k)(2) (for penalties imposed
under such section) and any such assessment (including the
determination of the amount of the penalty) shall be subject to
the provisions of such section. Any insured credit union
against which any penalty is assessed under this subsection
shall be afforded an agency hearing if such insured credit
union submits a request for such hearing within 20 days after
the issuance of the notice of assessment. Section 206(j) shall
apply to any proceeding under this subsection.
(4) The Board may accept any report of condition made to any
commission, board, or authority having supervision of a State-
chartered credit union and may furnish to any such commission,
board, or authority reports of condition made to the Board.
(5) Reports required under title I of this Act shall be so
prepared that they can be used for share insurance purposes. To
the maximum extent feasible, the Board shall use for insurance
purposes reports submitted to State regulatory agencies by
State-chartered credit unions.
(6) Audit requirement.--
(A) In general.--Before the end of the 120-
day period beginning on the date of the
enactment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and
notwithstanding any other provision of Federal
or State law, the Board shall prescribe, by
regulation, audit standards which require an
outside, independent audit of any insured
credit union by a certified public accountant
for any fiscal year (of such credit union)--
(i) for which such credit union has
not conducted an annual supervisory
committee audit;
(ii) for which such credit union has
not received a complete and
satisfactory supervisory committee
audit; or
(iii) during which such credit union
has experienced persistent and serious
recordkeeping deficiencies, as
determined by the Board.
(B) Unsafe or unsound practice.--The Board
may treat the failure of any insured credit
union to obtain an outside, independent audit
for any fiscal year for which such audit is
required under subparagraph (A) or (D) as an
unsafe or unsound practice within the meaning
of section 206(b).
(C) Accounting principles.--
(i) In general.--Accounting
principles applicable to reports or
statements required to be filed with
the Board by each insured credit union
shall be uniform and consistent with
generally accepted accounting
principles.
(ii) Board determination.--If the
Board determines that the application
of any generally accepted accounting
principle to any insured credit union
is not appropriate, the Board may
prescribe an accounting principle for
application to the credit union that is
no less stringent than generally
accepted accounting principles.
(iii) De minimus exception.--This
subparagraph shall not apply to any
insured credit union, the total assets
of which are less than $10,000,000,
unless prescribed by the Board or an
appropriate State credit union
supervisor.
(D) Large credit union audit requirement.--
(i) In general.--Each insured credit
union having total assets of
$500,000,000 or more shall have an
annual independent audit of the
financial statements of the credit
union, performed in accordance with
generally accepted auditing standards
by an independent certified public
accountant or public accountant
licensed by the appropriate State or
jurisdiction to perform those services.
(ii) Voluntary audits.--If a Federal
credit union that is not required to
conduct an audit under clause (i), and
that has total assets of more than
$10,000,000 conducts such an audit for
any purpose, using an independent
auditor who is compensated for his or
her audit services with respect to that
audit, the audit shall be performed
consistent with the accountancy laws of
the appropriate State or jurisdiction,
including licensing requirements.
(7) Report to independent auditor.--
(A) In general.--Each insured credit union
which has engaged the services of an
independent auditor to audit such depository
institution within the past 2 years shall
transmit to such auditor a copy of the most
recent report of condition made by such credit
union (pursuant to this Act or any other
provision of law) and a copy of the most recent
report of examination received by such credit
union.
(B) Additional information.--In addition to
the copies of the reports required to be
provided to an auditor under subparagraph (A),
each insured credit union shall provide such
auditor with--
(i) a copy of any supervisory
memorandum of understanding with such
credit union and any written agreement
between the Board or a State regulatory
agency and the credit union which is in
effect during the period covered by the
audit; and
(ii) a report of any action initiated
or taken by the Board during such
period under subsection (e), (f), (g),
(i), (l), or (q) of section 206, or any
similar action taken by a State
regulatory dagency under State law, or
any other civil money penalty assessed
by the Board under this Act, with
respect to--
(I) the credit union; or
(II) any institution-
affiliated party.
(8) Data sharing with other agencies and persons.--In
addition to reports of examination, reports of
condition, and other reports required to be regularly
provided to the Board (with respect to all insured
credit unions, including a credit union for which the
Corporation has been appointed conservator or
liquidating agent) or an appropriate State commission,
board, or authority having supervision of a State-
chartered credit union, the Board may, in the
discretion of the Board, furnish any report of
examination or other confidential supervisory
information concerning any credit union or other entity
examined by the Board under authority of any Federal
law, to--
(A) any other Federal or State agency or
authority with supervisory or regulatory
authority over the credit union or other
entity;
(B) any officer, director, or receiver of
such credit union or entity; and
(C) any other person that the Board
determines to be appropriate.
(b) Certified Statement.--
(1) Statement required.--
(A) In general.--For each calendar year, in
the case of an insured credit union with total
assets of not more than $50,000,000, and for
each semi-annual period in the case of an
insured credit union with total assets of
$50,000,000 or more, an insured credit union
shall file with the Board, at such time as the
Board prescribes, a certified statement showing
the total amount of insured shares in the
credit union at the close of the relevant
period and both the amount of its deposit or
adjustment of deposit and the amount of the
insurance charge due to the Fund for that
period, both as computed under subsection (c).
(B) Exception for newly insured credit
union.--Subparagraph (A) shall not apply with
respect to a credit union that became insured
during the reporting period.
(2) Form.--The certified statements required to be
filed with the Board pursuant to this subsection shall
be in such form and shall set forth such supporting
information as the Board shall require.
(3) Certification.--The president of the credit union
or any officer designated by the board of directors
shall certify, with respect to each statement required
to be filed with the Board pursuant to this subsection,
that to the best of his or her knowledge and belief the
statement is true, correct, complete, and in accordance
with this title and the regulations issued under this
title.
(c)(1)(A)(i) Each insured credit union shall pay to and
maintain with the National Credit Union Share Insurance Fund a
deposit in an amount equaling 1 per centum of the credit
union's insured shares.
(ii) The Board may, in its discretion, authorize insured
credit unions to initially fund such deposit over a period of
time in excess of one year if necessary to avoid adverse
effects on the condition of insured credit unions.
(iii) Periodic adjustment.--The
amount of each insured credit union's
deposit shall be adjusted as follows,
in accordance with procedures
determined by the Board, to reflect
changes in the credit union's insured
shares:
(I) annually, in the case of
an insured credit union with
total assets of not more than
$50,000,000; and
(II) semi-annually, in the
case of an insured credit union
with total assets of
$50,000,000 or more.
(B)(i) The deposit shall be returned to an insured credit
union in the event that its insurance coverage is terminated,
it converts to insurance coverage from another source, or in
the event the operations of the fund are transferred from the
National Credit Union Administration Board.
(ii) The deposit shall be returned in accordance with
procedures and valuation methods determined by the Board, but
in no event shall the deposit be returned any later than one
year after the final date on which no shares of the credit
union are insured by the Board.
(iii) The deposit shall not be returned in the event of
liquidation on account of bankruptcy or insolvency.
(iv) [The] To the extent provided for in advance by
appropriations Acts, the deposit funds may be used by the fund
if necessary to meet its expenses, in which case the amount so
used shall be expensed and shall be replenished by insured
credit unions in accordance with procedures established by the
Board. This clause shall not apply to the Board's activities
carried out pursuant to this title.
(2) Insurance premium charges.--
(A) In general.--Each insured credit union
shall, at such times as the Board prescribes
(but not more than twice in any calendar year),
pay to the Fund a premium charge for insurance
in an amount stated as a percentage of insured
shares (which shall be the same for all insured
credit unions).
(B) Relation of premium charge to equity
ratio of fund.--The Board may assess a premium
charge only if--
(i) the Fund's equity ratio is less
than 1.3 percent; and
(ii) the premium charge does not
exceed the amount necessary to restore
the equity ratio to 1.3 percent.
(C) Premium charge required if equity ratio
falls below 1.2 percent.--If the Fund's equity
ratio is less than 1.2 percent, the Board
shall, subject to subparagraph (B), assess a
premium charge in such an amount as the Board
determines to be necessary to restore the
equity ratio to, and maintain that ratio at,
1.2 percent.
(D) Fund restoration plans.--
(i) In general.--Whenever--
(I) the Board projects that
the equity ratio of the Fund
will, within 6 months of such
determination, fall below the
minimum amount specified in
subparagraph (C); or
(II) the equity ratio of the
Fund actually falls below the
minimum amount specified in
subparagraph (C) without any
determination under sub-clause
(I) having been made,
the Board shall establish and implement
a restoration plan within 90 days that
meets the requirements of clause (ii)
and such other conditions as the Board
determines to be appropriate.
(ii) Requirements of restoration
plan.--A restoration plan meets the
requirements of this clause if the plan
provides that the equity ratio of the
Fund will meet or exceed the minimum
amount specified in subparagraph (C)
before the end of the 8-year period
beginning upon the implementation of
the plan (or such longer period as the
Board may determine to be necessary due
to extraordinary circumstances).
(iii) Transparency.--Not more than 30
days after the Board establishes and
implements a restoration plan under
clause (i), the Board shall publish in
the Federal Register a detailed
analysis of the factors considered and
the basis for the actions taken with
regard to the plan.
(3) Distributions from fund required.--
(A) In general.--The Board shall, subject to
the requirements of section 217(e), effect a
pro rata distribution to insured credit unions
after each calendar year if, as of the end of
that calendar year--
(i) any loans to the Fund from the
Federal Government, and any interest on
those loans, have been repaid;
(ii) the Fund's equity ratio exceeds
the normal operating level; and
(iii) the Fund's available assets
ratio exceeds 1.0 percent.
(B) Amount of distribution.--The Board shall
distribute under subparagraph (A) the maximum
possible amount that--
(i) does not reduce the Fund's equity
ratio below the normal operating level;
and
(ii) does not reduce the Fund's
available assets ratio below 1.0
percent.
(C) Calculation based on certified
statements.--In calculating the Fund's equity
ratio and available assets ratio for purposes
of this paragraph, the Board shall determine
the aggregate amount of the insured shares in
all insured credit unions from insured credit
unions certified statements under subsection
(b) for the final reporting period of the
calendar year referred to in subparagraph (A).
(4) Timeliness and accuracy of data.--In calculating
the available assets ratio and equity ratio of the
Fund, the Board shall use the most current and accurate
data reasonably available.
(d)
(1) If, in the judgment of the Board, a loan to the
insurance fund, or to the stabilization fund described
in section 217 of this title, is required at any time
for purposes of this subchapter, the Secretary of the
Treasury shall make the loan, but loans under this
paragraph shall not exceed in the aggregate
$6,000,000,000 outstanding at any one time. Except as
otherwise provided in this subsection, section 217, and
in subsection (e) of this section, each loan under this
paragraph shall be made on such terms as may be fixed
by agreement between the Board and the Secretary of the
Treasury.
(2) Penalty for failure to make accurate certified
statement or to pay deposit or premium.--
(A) First tier.--Any insured credit union
which--
(i) maintains procedures reasonably
adapted to avoid any inadvertent error
and, unintentionally and as a result of
such an error, fails to submit any
certified statement under subsection
(b)(1) within the period of time
required or submits a false or
misleading certified statement under
such subsection; or
(ii) submits the statement at a time
which is minimally after the time
required,
shall be subject to a penalty of not more than
$2,000 for each day during which such failure
continues or such false and misleading
information is not corrected. The insured
credit union shall have the burden of proving
that an error was inadvertent or that a
statement was inadvertently submitted late.
(B) Second tier.--Any insured credit union
which--
(i) fails to submit any certified
statement under subsection (b)(1)
within the period of time required or
submits a false or misleading certified
statement in a manner not described in
subparagraph (A); or
(ii) fails or refuses to pay any
deposit or premium for insurance
required under this title,
shall be subject to a penalty of not more than
$20,000 for each day during which such failure
continues, such false and misleading
information is not corrected, or such deposit
or premium is not paid.
(C) Third tier.--Notwithstanding
subparagraphs (A) and (B), if any insured
credit union knowingly or with reckless
disregard for the accuracy of any certified
statement under subsection (b)(1) submits a
false or misleading certified statement under
such subsection, the Board may assess a penalty
of not more than $1,000,000 or not more than 1
percent of the total assets of the credit
union, whichever is less, per day for each day
during which the failure continues or the false
or misleading information in such statement is
not corrected.
(D) Assessment procedure.--Any penalty
imposed under this paragraph shall be assessed
and collected by the Board in the manner
provided in section 206(k)(2) (for penalties
imposed under such section) and any such
assessment (including the determination of the
amount of the penalty) shall be subject to the
provisions of such section.
(E) Hearing.--Any insured credit union
against which any penalty is assessed under
this paragraph shall be afforded an agency
hearing if the credit union submits a request
for such hearing within 20 days after the
issuance of the notice of the assessment.
Section 206(j) shall apply to any proceeding
under this subparagraph.
(F) Special rule for disputed payments.--No
penalty may be assessed for the failure of any
insured credit union to pay any deposit or
premium for insurance if--
(i) the failure is due to a dispute
between the credit union and the Board
over the amount of the deposit or
premium which is due from the credit
union; and
(ii) the credit union deposits
security satisfactory to the Board for
payment of the deposit or insurance
premium upon final determination of the
dispute.
(3) No insured credit union shall pay any dividends on its
insured shares or distribute any of its assets while it remains
in default in the payment of its deposit or any premium charge
for insurance due to the fund. Any director or officer of any
insured credit union who knowingly participates in the
declaration or payment of any such dividend or in any such
distribution shall, upon conviction, be fined not more than
$1,000 or imprisoned not more than one year, or both. The
provisions of this paragraph shall not be applicable in any
case in which the default is due to a dispute between the
credit union and the Board over the amount of its deposit or
the premium charge due to the fund if the credit union deposits
security satisfactory to the Board for payment of its deposit
or the premium charge upon final determination of the issue.
(4) Temporary increases authorized.--
(A) Recommendations for increase.--During the
period beginning on the date of enactment of
this paragraph and ending on December 31, 2010,
if, upon the written recommendation of the
Board (upon a vote of not less than two-thirds
of the members of the Board) and the Board of
Governors of the Federal Reserve System (upon a
vote of not less than two-thirds of the members
of such Board), the Secretary of the Treasury
(in consultation with the President) determines
that additional amounts above the
$6,000,000,000 amount specified in paragraph
(1) are necessary, such amount shall be
increased to the amount so determined to be
necessary, not to exceed $30,000,000,000.
(B) Report required.--If the borrowing
authority of the Board is increased above
$6,000,000,000 pursuant to subparagraph (A),
the Board shall promptly 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 reasons and need
for the additional borrowing authority and its
intended uses.
(e) The Board, in a suit brought at law or in equity in any
court of competent jurisdiction, shall be entitled to recover
from any insured credit union the amount of any unpaid deposit
or premium charge for insurance lawfully payable by the credit
union to the fund, whether or not such credit union shall have
made any report of condition under subsection (a) of this
section or filed any certified statement required under
subsection (b) of this section and whether or not suit shall
have been brought to compel the credit union to make any such
report or to file any such statement. No action or proceeding
shall be brought for the recovery of any deposit or premium
charge due to the fund, or for the recovery of any amount paid
to the fund in excess of the amount due it, unless such action
or proceeding shall have been brought within five years after
the right accrued for which the claim is made. Where the
insured credit union has made or filed with the Board a false
or fraudulent certified statement with the intent to evade, in
whole or in part, the payment of its deposit or any premium
charge, the claim shall not be deemed to have accrued until the
discovery by the Board of the fact that the certified statement
is false or fraudulent.
(f) Should any Federal credit union fail to make any report
of condition under subsection (a) of this section or to file
any certified statement required to be filed under subsection
(b) of this section or to pay its deposit or any premium charge
for insurance required to be paid under any provision of this
title, and should the credit union fail to correct such failure
within thirty days after written notice has been given by the
Board to an officer of the credit union, citing this subsection
and stating that the credit union has failed to make any such
report or file any such statement or pay any such deposit or
premium charge as required by law, all the rights, privileges,
and franchises of the credit union granted to it under title I
of this Act shall be thereby forfeited. Whether or not the
penalty provided in this subsection has been incurred shall be
determined and adjudged by any court of the United States of
competent jurisdiction in a suit brought for that purpose in
the district or territory in which the principal office of such
credit union is located, under direction of and by the Board in
its own name, before the credit union shall be declared
dissolved. The remedies provided in this subsection and in
subsections (d) and (e) of this section shall not be construed
as limiting any other remedies against any insured credit union
but shall be in addition thereto.
(g) Each insured credit union shall maintain such records as
will readily permit verification of the correctness of its
reports of condition, certified statements, and deposit and
premium charges for insurance. However, no insured credit union
shall be required to retain such records for such purpose for a
period in excess of five years from the date of the making of
any such report, the filing of any such statement, or the
payment of any deposit or adjustment thereof or any premium
charge, except that when there is a dispute between the insured
credit union and the Board over the amount of any deposit or
adjustment thereof or any premium charge for insurance the
credit union shall retain such records until final
determination of the issue.
(h) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Available assets ratio.--The term ``available
assets ratio'', when applied to the Fund, means the
ratio of--
(A) the amount determined by subtracting--
(i) direct liabilities of the Fund
and contingent liabilities for which no
provision for losses has been made,
from
(ii) the sum of cash and the market
value of unencumbered investments
authorized under section 203(c), to
(B) the aggregate amount of the insured
shares in all insured credit unions.
(2) Equity ratio.--The term ``equity ratio'', which
shall be calculated using the financial statements of
the Fund alone, without any consolidation or
combination with the financial statements of any other
fund or entity, means the ratio of--
(A) the amount of Fund capitalization,
including insured credit unions' 1 percent
capitalization deposits and the retained
earnings balance of the Fund (net of direct
liabilities of the Fund and contingent
liabilities for which no provision for losses
has been made); to
(B) the aggregate amount of the insured
shares in all insured credit unions.
(3) Insured shares.--The term ``insured shares'',
when applied to this section, includes share, share
draft, share certificate, and other similar accounts as
determined by the Board, but does not include amounts
exceeding the insured account limit set forth in
section 207(k)(1).
(4) Normal operating level.--The term ``normal
operating level'', when applied to the Fund, means an
equity ratio specified by the Board, which shall be not
less than 1.2 percent and not more than 1.5 percent.
* * * * * * *
requirements governing insured credit unions
Sec. 205. (a) Insurance Logo.--
(1) Insured credit unions.--
(A) In general.--Each insured credit union
shall display at each place of business
maintained by that credit union a sign or signs
relating to the insurance of the share accounts
of the institution, in accordance with
regulations to be prescribed by the Board.
(B) Statement to be included.--Each sign
required under subparagraph (A) shall include a
statement that insured share accounts are
backed by the full faith and credit of the
United States Government.
(2) Regulations.--The Board shall prescribe
regulations to carry out this subsection, including
regulations governing the substance of signs required
by paragraph (1) and the manner of display or use of
such signs.
(3) Penalties.--For each day that an insured credit
union continues to violate this subsection or any
regulation issued under this subsection, it shall be
subject to a penalty of not more than $100, which the
Board may recover for its use.
(b)(1) Except as provided in paragraph (2), no insured credit
union shall, without the prior approval of the Board--
(A) merge or consolidate with any noninsured credit
union or institution;
(B) assume liability to pay any member accounts in,
or similar liabilities of, any noninsured credit union
or institution;
(C) transfer assets to any noninsured credit union or
institution in consideration of the assumption of
liabilities for any portion of the member accounts in
such insured credit union; or
(D) convert into a noninsured credit union or
institution.
(2) Conversion of insured credit unions to mutual
savings banks.--
(A) In general.--Notwithstanding paragraph
(1), an insured credit union may convert to a
mutual savings bank or savings association (if
the savings association is in mutual form), as
those terms are defined in section 3 of the
Federal Deposit Insurance Act, without the
prior approval of the Board, subject to the
requirements and procedures set forth in the
laws and regulations governing mutual savings
banks and savings associations.
(B) Conversion proposal.--A proposal for a
conversion described in subparagraph (A) shall
first be approved, and a date set for a vote
thereon by the members (either at a meeting to
be held on that date or by written ballot to be
filed on or before that date), by a majority of
the directors of the insured credit union.
Approval of the proposal for conversion shall
be by the affirmative vote of a majority of the
members of the insured credit union who vote on
the proposal.
(C) Notice of proposal to members.--An
insured credit union that proposes to convert
to a mutual savings bank or savings association
under subparagraph (A) shall submit notice to
each of its members who is eligible to vote on
the matter of its intent to convert--
(i) 90 days before the date of the
member vote on the conversion;
(ii) 60 days before the date of the
member vote on the conversion; and
(iii) 30 days before the date of the
member vote on the conversion.
(D) Notice of proposal to board.--The Board
may require an insured credit union that
proposes to convert to a mutual savings bank or
savings association under subparagraph (A) to
submit a notice to the Board of its intent to
convert during the 90-day period preceding the
date of the completion of the conversion.
(E) Inapplicability of act upon conversion.--
Upon completion of a conversion described in
subparagraph (A), the credit union shall no
longer be subject to any of the provisions of
this Act.
(F) Limit on compensation of officials.--
(i) In general.--No director or
senior management official of an
insured credit union may receive any
economic benefit in connection with a
conversion of the credit union as
described in subparagraph (A), other
than--
(I) director fees; and
(II) compensation and other
benefits paid to directors or
senior management officials of
the converted institution in
the ordinary course of
business.
(ii) Senior management official.--For
purposes of this subparagraph, the term
``senior management official'' means a
chief executive officer, an assistant
chief executive officer, a chief
financial officer, and any other senior
executive officer (as defined by the
appropriate Federal banking agency
pursuant to section 32 (f) of the
Federal Deposit Insurance Act).
(G) Consistent rules.--
(i) In general.--Not later than 6
months after the date of enactment of
the Credit Union Membership Access Act,
the Administration shall promulgate
final rules applicable to charter
conversions described in this paragraph
that are consistent with rules
promulgated by other financial
regulators, including the Office of the
Comptroller of the Currency. The rules
required by this clause shall provide
that charter conversion by an insured
credit union shall be subject to
regulation that is no more or less
restrictive than that applicable to
charter conversions by other financial
institutions.
(ii) Oversight of member vote.--The
member vote concerning charter
conversion under this paragraph shall
be administered by the Administration,
and shall be verified by the Federal or
State regulatory agency that would have
jurisdiction over the institution after
the conversion. If either the
Administration or that regulatory
agency disapproves of the methods by
which the member vote was taken or
procedures applicable to the member
vote, the member vote shall be taken
again, as directed by the
Administration or the agency.
(3) Except with the prior written approval of the Board, no
insured credit union shall merge or consolidate with any other
insured credit union or, either directly or indirectly, acquire
the assets of, or assume liability to pay any member accounts
in, any other insured credit union.
(c) In granting or withholding approval or consent under
subsection (b) of this section, the Board shall consider--
(1) the history, financial condition, and management
policies of the credit union;
(2) the adequacy of the credit union's reserves;
(3) the economic advisability of the transaction;
(4) the general character and fitness of the credit
union's management;
(5) the convenience and needs of the members to be
served by the credit union; and
(6) whether the credit union is a cooperative
association organized for the purpose of promoting
thrift among its members and creating a source of
credit for provident or productive purposes.
(d) Prohibition.--
(1) In general.--Except with prior written consent of
the Board--
(A) any person who has been convicted of any
criminal offense involving dishonesty or a
breach of trust, or has agreed to enter into a
pretrial diversion or similar program in
connection with a prosecution for such offense,
may not--
(i) become, or continue as, an
institution-affiliated party with
respect to any insured credit union; or
(ii) otherwise participate, directly
or indirectly, in the conduct of the
affairs of any insured credit union;
and
(B) any insured credit union may not permit
any person referred to in subparagraph (A) to
engage in any conduct or continue any
relationship prohibited under such
subparagraph.
(2) Minimum 10-year prohibition period for certain
offenses.--
(A) In general.--If the offense referred to
in paragraph (1)(A) in connection with any
person referred to in such paragraph is--
(i) an offense under--
(I) section 215, 656, 657,
1005, 1006, 1007, 1008, 1014,
1032, 1344, 1517, 1956, or 1957
of title 18, United States
Code; or
(II) section 1341 or 1343 of
such title which affects any
financial institution (as
defined in section 20 of such
title); or
(ii) the offense of conspiring to
commit any such offense,
the Board may not consent to any exception to
the application of paragraph (1) to such person
during the 10-year period beginning on the date
the conviction or the agreement of the person
becomes final.
(B) Exception by order of sentencing court.--
(i) In general.--On motion of the
Board, the court in which the
conviction or the agreement of a person
referred to in subparagraph (A) has
been entered may grant an exception to
the application of paragraph (1) to
such person if granting the exception
is in the interest of justice.
(ii) Period for filing.--A motion may
be filed under clause (i) at any time
during the 10-year period described in
subparagraph (A) with regard to the
person on whose behalf such motion is
made.
(3) Penalty.--Whoever knowingly violates paragraph
(1) or (2) shall be fined not more than $1,000,000 for
each day such prohibition is violated or imprisoned for
not more than 5 years, or both.
(e)(1) The Board shall promulgate rules establishing minimum
standards with which each insured credit union must comply with
respect to the installation, maintenance, and operation of
security devices and procedures, reasonable in cost, to
discourage robberies, burglaries, and larcenies and to assist
in the identification and apprehension of persons who commit
such acts.
(2) The rules shall establish the time limits within which
insured credit unions shall comply with the standards and shall
require the submission of periodic reports with respect to the
installation, maintenance, and operation of security devices
and procedures.
(3) An insured credit union which violates a rule promulgated
pursuant to this subsection shall be subject to a civil penalty
which shall not exceed $100 for each day of the violation.
(f)(1) Every insured credit union is authorized to maintain,
and make loans with respect to, share draft accounts in
accordance with rules and regulations prescribed by the Board.
Except as provided in paragraph (2), an insured credit union
may pay dividends on share draft accounts and may permit the
owners of such share draft accounts to make withdrawals by
negotiable or transferable instruments or other orders for the
purpose of making transfers to third parties.
(2) Paragraph (1) shall apply only with respect to share
draft accounts in which the entire beneficial interest is held
by one or more individuals or members or by an organization
which is operated primarily for religious, philanthropic,
charitable, educational, or other similar purposes and which is
not operated for profit, and with respect to deposits of public
funds by an officer, employee, or agent of the United States,
any State, county, municipality, or political subdivision
thereof, the District of Columbia, the Commonwealth of Puerto
Rico, American Samoa, Guam, any territory or possession of the
United States, or any political subdivision thereof.
(g)(1) If the applicable rate prescribed in this subsection
exceeds the rate an insured credit union would be permitted to
charge in the absence of this subsection, such credit union
may, notwithstanding any State constitution or statute which is
hereby preempted for the purposes of this subsection, take,
receive, reserve, and charge on any loan, interest at a rate of
not more than 1 per centum in excess of the discount rate on
ninety-day commercial paper in effect at the Federal Reserve
bank in the Federal Reserve district where such insured credit
union is located or at the rate allowed by the laws of the
State, territory, or district where such credit union is
located, whichever may be greater. A loan that is valid when
made as to its maximum rate of interest in accordance with this
subsection shall remain valid with respect to such rate
regardless of whether the loan is subsequently sold, assigned,
or otherwise transferred to a third party, and may be enforced
by such third party notwithstanding any State law to the
contrary.
(2) If the rate prescribed in paragraph (1) exceeds the rate
such credit union would be permitted to charge in the absence
of this subsection, and such State fixed rate is thereby
preempted by the rate described in paragraph (1), the taking,
receiving, reserving, or charging a greater rate than is
allowed by paragraph (1), when knowingly done, shall be deemed
a forfeiture of the entire interest which the loan carries with
it, or which has been agreed to be paid thereon. If such
greater rate of interest has been paid, the person who paid it
may recover, in a civil action commenced in a court of
appropriate jurisdiction not later than two years after the
date of such payment, an amount equal to twice the amount of
interest paid from the credit union taking or receiving such
interest.
(h) Notwithstanding any other provision of law, the Board may
authorize a merger or consolidation of an insured credit union
which is insolvent or is in danger of insolvency with any other
insured credit union or may authorize an insured credit union
to purchase any of the assets of, or assume any of the
liabilities of, any other insured credit union which is
insolvent or in danger of insolvency if the Board is satisfied
that--
(1) an emergency requiring expeditious action exists
with respect to such other insured credit union;
(2) other alternatives are not reasonably available;
and
(3) the public interest would best be served by
approval of such merger, consolidation, purchase, or
assumption.
(i)(1) Notwithstanding any other provision of this Act or of
State law, the Board may authorize an institution whose
deposits or accounts are insured by the Federal Deposit
Insurance Corporation to purchase any of the assets of or
assume any of the liabilities of an insured credit union which
is insolvent or in danger of insolvency, except that prior to
exercising this authority the Board must attempt to effect the
merger or consolidation of an insured credit union which is
insolvent or in danger of insolvency with another insured
credit union, as provided in subsection (h).
(2) For purposes of the authority contained in paragraph (1),
insured accounts of the credit union may upon consummation of
the purchase and assumption be converted to insured deposits or
other comparable accounts in the acquiring institution, and the
Board and the National Credit Union Share Insurance Fund shall
be absolved of any liability to the credit union's members with
respect to those accounts.
(j) Privileges Not Affected by Disclosure to Banking Agency
or Supervisor.--
(1) In general.--The submission by any person of any
information to the Administration, any State credit
union supervisor, or foreign banking authority for any
purpose in the course of any supervisory or regulatory
process of such Board, supervisor, or authority shall
not be construed as waiving, destroying, or otherwise
affecting any privilege such person may claim with
respect to such information under Federal or State law
as to any person or entity other than such Board,
supervisor, or authority.
(2) Rule of construction.--No provision of paragraph
(1) may be construed as implying or establishing that--
(A) any person waives any privilege
applicable to information that is submitted or
transferred under any circumstance to which
paragraph (1) does not apply; or
(B) any person would waive any privilege
applicable to any information by submitting the
information to the Administration, any State
credit union supervisor, or foreign banking
authority, but for this subsection.
* * * * * * *
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REVISED STATUTES OF THE UNITED STATES
* * * * * * *
TITLE LXII--NATIONAL BANKS.
* * * * * * *
CHAPTER THREE--REGULATION OF THE BANKING BUSINESS.
* * * * * * *
Sec. 5197. Any association may take, receive, reserve, and
charge on any loan or discount made, or upon any notes, bills
of exchange, or other evidences of debt, interest at the rate
allowed by the laws of the State, Territory, or District where
the bank is located, or at a rate of 1 per centum in excess of
the discount rate on ninety-day commercial paper in effect at
the Federal reserve bank in the Federal reserve district where
the bank is located, whichever may be the greater, and no more,
except that where by the laws of any State a different rate is
limited for banks organized under State laws, the rate so
limited shall be allowed for associations organized or existing
in any such State under this title. When no rate is fixed by
the laws of the State, or Territory, or District, the bank may
take, receive, reserve, or charge a rate not exceeding 7 per
centum, or 1 per centum in excess of the discount rate on
ninety-day commercial paper in effect at the Federal reserve
bank in the Federal reserve district where the bank is located,
whichever may be the greater, and such interest may be taken in
advance, reckoning the days for which the note, bill, or other
evidence of debt has to run. The maximum amount of interest or
discount to be charged at a branch of an association located
outside of the States of the United States and the District of
Columbia shall be at the rate allowed by the laws of the
country, territory, dependency, province, dominion, insular
possession, or other political subdivision where the branch is
located. And the purchase, discount, or sale of a bona-fide
bill of exchange, payable at another place than the place of
such purchase, discount, or sale, at not more than the current
rate of exchange for sight-drafts in addition to the interest,
shall not be considered as taking or receiving a greater rate
of interest. A loan that is valid when made as to its maximum
rate of interest in accordance with this section shall remain
valid with respect to such rate regardless of whether the loan
is subsequently sold, assigned, or otherwise transferred to a
third party, and may be enforced by such third party
notwithstanding any State law to the contrary.
* * * * * * *
CHAPTER FOUR--DISSOLUTION AND RECEIVERSHIP.
* * * * * * *
Sec. 5240. The Comptroller of the Currency, with the approval
of the Secretary of the Treasury, shall appoint examiners who
shall examine every national bank as often as the Comptroller
of the Currency shall deem necessary. The examiner making the
examination of any national bank shall have power to make a
thorough examination of all the affairs of the bank and in
doing so he shall have power to administer oaths and to examine
any of the officers and agents thereof under oath and shall
make a full and detailed report of the condition of said bank
to the Comptroller of the Currency: Provided, That in making
the examination of any national bank the examiners shall
include such an examination of the affairs of all its
affiliates other than member banks as shall be necessary to
disclose fully the relations between such bank and such
affiliates and the effect of such relations upon the affairs of
such bank; and in the event of the refusal to give any
information required in the course of the examination of any
such affiliate, or in the event of the refusal to permit such
examination, all the rights, privileges, and franchises of the
bank shall be subject to forfeiture in accordance with section
2 of the Federal Reserve Act, as amended (U.S.C., title 12,
secs. 141, 222-225, 281-286, and 502). The Comptroller of the
Currency shall have power, and he is hereby authorized, to
publish the report of his examination of any national banking
association or affiliate which shall not within one hundred and
twenty days after notification of the recommendations or
suggestions of the Comptroller, based on said examination, have
complied with the same to his satisfaction. Ninety days' notice
prior to such publicity shall be given to the bank or
affiliate.
The examiner making the examination of any affiliate of a
national bank shall have power to make a thorough examination
of all the affairs of the affiliate, and in doing so he shall
have power to administer oaths and to examine any of the
officers, directors, employees, and agents thereof under oath
and to make a report of his findings to the Comptroller of the
Currency. If any affiliate of a national bank refuses to pay
any assessments, fees, or other charges imposed by the
Comptroller of the Currency pursuant to this section or fails
to make such payment not later than 60 days after the date on
which they are imposed, the Comptroller of the Currency may
impose such assessments, fees, or charges against the
affiliated national bank, and such assessments, fees, or
charges shall be paid by such national bank. If the affiliation
is with 2 or more national banks, such assessments, fees, or
charges may be imposed on, and collected from, any or all of
such national banks in such proportions as the Comptroller of
the Currency may prescribe. The examiners and assistant
examiners making the examinations of national banking
associations and affiliates thereof herein provided for and the
chief examiners, reviewing examiners and other persons whose
services may be required in connection with such examinations
or the reports thereof, shall be employed by the Comptroller of
the Currency with the approval of the Secretary of the
Treasury; the employment and compensation of examiners, chief
examiners, reviewing examiners, assistant examiners, and of the
other employees of the office of the Comptroller of the
Currency whose compensation is and shall be paid from
assessments on banks or affiliates thereof or from other fees
or charges imposed pursuant to this section shall be 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. The funds
derived from such assessments, fees, or charges may be
deposited by the Comptroller of the Currency in accordance with
the provisions of section 5234 of the Revised Statutes (U.S.C.,
title 12, sec. 192) and shall not be construed to be Government
funds or appropriated monies; and the Comptroller of the
Currency is authorized and empowered to prescribe regulations
governing the computation and assessment of the expenses of
examinations herein provided for and the collection of such
assessments from the banks and/or affiliates examined or of
other fees or charges imposed pursuant to this section. Such
funds shall not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under any other
authority. If any affiliate of a national bank shall refuse to
permit an examiner to make an examination of the affiliate or
shall refuse to give any information required in the course of
any such examination, the national bank with which it is
affiliated shall be subject to a penalty of not more than
$5,000 for each day that any such refusal shall continue. Such
penalty may be assessed by the Comptroller of the Currency and
collected in the same manner as expenses of examinations.
Notwithstanding any of the preceding provisions of this
section or section 301(f)(1) of title 31, United States Code,
to the contrary, the Comptroller of the Currency shall, subject
to chapter 71 of title 5, United States Code, fix the
compensation and number of, and appoint and direct, all
employees of the Office of the Comptroller of the Currency.
Rates of basic pay for all employees of the Office may be set
and adjusted by the Comptroller without regard to the
provisions of chapter 51 or subchapter III of chapter 53 of
title 5, United States Code. The Comptroller may provide
additional compensation and benefits to employees of the Office
if the same type of compensation or benefits are then being
provided by any other Federal bank regulatory agency or, if not
then being provided, could be provided by such an agency under
applicable provisions of law, rule, or regulations. In setting
and adjusting the total amount of compensation and benefits for
employees of the Office, the Comptroller shall consult with,
and seek to maintain comparability with, other Federal banking
agencies.
[
[The Comptroller of the Currency may impose and collect
assessments, fees, or other charges as necessary or appropriate
to carry out the responsibilities of the office of the
Comptroller. Such assessments, fees, and other charges shall be
set to meet the Comptroller's expenses in carrying out
authorized activities. ]
In addition to the examinations made and conducted by the
Comptroller of the Currency, every Federal reserve bank may,
with the approval of the Federal reserve agent or the Board of
Governors of the Federal Reserve System, provide for special
examination of member banks within its district. The expense of
such examinations may, in the discretion of the Board of
Governors of the Federal Reserve System, be assessed against
the banks examined, and, when so assessed, shall be paid by the
banks examined. Such examinations shall be so conducted as to
inform the Federal reserve bank of the condition of its member
banks and of the lines of credit which are being extended by
them. Every Federal reserve bank shall at all times furnish to
the Board of Governors of the Federal Reserve System such
information as may be demanded concerning the condition of any
member bank within the distict of the said Federal reserve
bank.
(A) No national bank shall be subject to any
visitorial powers except as authorized by Federal law,
vested in the courts of justice or such as shall be, or
have been exercised or directed by Congress or by
either House thereof or by any committee of Congress or
of either House duly authorized.
(B) Notwithstanding subparagraph (A), lawfully
authorized State auditors and examiners may, at
reasonable times and upon reasonable notice to a bank,
review its records solely to ensure compliance with
applicable State unclaimed property or escheat laws
upon reasonable cause to believe that the bank has
failed to comply with such laws.
The Board of Governors of the Federal Reserve System shall,
at least once each year, order an examination of each Federal
reserve bank, and upon joint application of ten member banks
the Board of Governors of the Federal Reserve System shall
order a special examination and report of the condition of any
Federal reserve bank. The Comptroller of the Currency, upon the
request of the Board of Governors of the Federal Reserve
System, is authorized to assign examiners appointed under this
section to examine foreign operations of State banks which are
members of the Federal Reserve System.
[Sec. 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.
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, 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).]
SEC. 5240A.
(a) In general.--In establishing the amount of an assessment,
fee, or charge collected from an entity under subsection (b),
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.
(b) Appropriations Requirement.--
(1) Recovery of costs of annual appropriation.--The
Comptroller of the Currency shall impose and collect
assessments, fees, or other charges that are designed
to recover the costs to the Government of the annual
appropriation to the Office of the Comptroller of the
Currency by Congress.
(2) Offsetting collections.--Assessments and other
fees described under paragraph (1) for any fiscal
year--
(A) shall be deposited and credited as
offsetting collections to the account providing
appropriations to the Office of the Comptroller
of the Currency; and
(B) except as provided in paragraph (3),
shall not be collected for any fiscal year
except to the extent provided in advance in
appropriation Acts.
(3) Lapse of appropriation.--If on the first day of a
fiscal year an appropriation to the Office of the
Comptroller of the Currency has not been enacted, the
Comptroller of the Currency shall continue to collect
(as offsetting collections) the assessments and other
fees described under paragraph (1) at the rate in
effect during the preceding fiscal year, until 60 days
after the date such an appropriation is enacted.
* * * * * * *
----------
FEDERAL RESERVE ACT
* * * * * * *
SEC. 11C. APPROPRIATIONS REQUIREMENT FOR NON-MONETARY POLICY RELATED
ADMINISTRATIVE COSTS.
(a) Appropriations Requirement.--
(1) Recovery of costs of annual appropriation.--The
Board of Governors of the Federal Reserve System and
the Federal reserve banks shall collect assessments and
other fees, as provided under this Act, that are
designed to recover the costs to the Government of the
annual appropriation to the Board of Governors of the
Federal Reserve System by Congress. The Board of
Governors of the Federal Reserve System and the Federal
reserve banks may only incur obligations or allow and
pay expenses with respect to non-monetary policy
related administrative costs pursuant to an
appropriations Act.
(2) Offsetting collections.--Assessments and other
fees described under paragraph (1) for any fiscal
year--
(A) shall be deposited and credited as
offsetting collections to the account providing
appropriations to the Board of Governors of the
Federal Reserve System; and
(B) shall not be collected for any fiscal
year except to the extent provided in advance
in appropriation Acts.
(3) Limitation.--This subsection shall only apply to
the non-monetary policy related administrative costs of
the Board of Governors of the Federal Reserve System.
(b) Definitions.--For purposes of this section:
(1) Monetary policy.--The term ``monetary policy''
means a strategy for producing a generally acceptable
exchange medium that supports the productive employment
of economic resources by reliably serving as both a
unit of account and store of value.
(2) Non-monetary policy related administrative
costs.--The term ``non-monetary policy related
administrative costs'' means administrative costs not
related to the conduct of monetary policy, and
includes--
(A) direct operating expenses for supervising
and regulating entities supervised and
regulated by the Board of Governors of the
Federal Reserve System, including conducting
examinations, conducting stress tests,
communicating with the entities regarding
supervisory matters and laws, and regulations;
(B) operating expenses for activities
integral to carrying out supervisory and
regulatory responsibilities, such as training
staff in the supervisory function, research and
analysis functions including library
subscription services, and collecting and
processing regulatory reports filed by
supervised institutions; and
(C) support, overhead, and pension expenses
related to the items described under
subparagraphs (A) and (B).
* * * * * * *
----------
SECURITIES EXCHANGE ACT OF 1934
TITLE I--REGULATION OF SECURITIES EXCHANGES
* * * * * * *
proxies
Sec. 14. (a)(1) It shall be unlawful for any person, by the
use of the mails or by any means or instrumentality of
interstate commerce or of any facility of a national securities
exchange or otherwise, 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, to solicit or to permit the use of his name to
solicit any proxy or consent or authorization in respect of any
security (other than an exempted security) registered pursuant
to section 12 of this title.
(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)(1) It shall be unlawful for any member of a national
securities exchange, or any broker or dealer registered under
this title, or any bank, association, or other entity that
exercises fiduciary powers, 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, to give, or to refrain from giving a proxy, consent,
authorization, or information statement in respect of any
security registered pursuant to section 12 of this title, or
any security issued by an investment company registered under
the Investment Company Act of 1940, and carried for the account
of a customer.
(2) With respect to banks, the rules and regulations
prescribed by the Commission under paragraph (1) shall not
require the disclosure of the names of beneficial owners of
securities in an account held by the bank on the date of
enactment of this paragraph unless the beneficial owner
consents to the disclosure. The provisions of this paragraph
shall not apply in the case of a bank which the Commission
finds has not made a good faith effort to obtain such consent
from such beneficial owners.
(c) Unless proxies, consents, or authorizations in respect of
a security registered pursuant to section 12 of this title, or
a security issued by an investment company registered under the
Investment Company Act of 1940, are solicited by or on behalf
of the management of the issuer from the holders of record of
such security in accordance with the rules and regulations
prescribed under subsection (a) of this section, prior to any
annual or other meeting of the holders of such security, such
issuer shall, in accordance with rules and regulations
prescribed by the Commission, file with the Commission and
transmit to all holders of record of such security information
substantially equivalent to the information which would be
required to be transmitted if a solicitation were made, but no
information shall be required to be filed or transmitted
pursuant to this subsection before July 1, 1964.
(d)(1) It shall be unlawful for any person, directly or
indirectly, by use of the mails or by any means or
instrumentality of interstate commerce or of any facility of a
national securities exchange or otherwise, to make a tender
offer for, or a request or invitation for tenders of, any class
of any equity security which is registered pursuant to section
12 of this title, or any equity security of an insurance
company which would have been required to be so registered
except for the exemption contained in section 12(g)(2)(G) of
this title, or any equity security issued by a closed-end
investment company registered under the Investment Company Act
of 1940, if, after consummation thereof, such person would,
directly or indirectly, be the beneficial owner of more than 5
per centum of such class, unless at the time copies of the
offer or request or invitation are first published or sent or
given to security holders such person has filed with the
Commission a statement containing such of the information
specified in section 13(d) of this title, and such additional
information as the Commission may by rules and regulations
prescribe as necessary or appropriate in the public interest or
for the protection of investors. All requests or invitations
for tenders or advertisements making a tender offer or
requesting or inviting tenders, of such a security shall be
filed as a part of such statement and shall contain such of the
information contained in such statement as the Commission may
by rules and regulations prescribe. Copies of any additional
material soliciting or requesting such tender offers subsequent
to the initial solicitation or request shall contain such
information as the Commission may by rules and regulations
prescribe as necessary or appropriate in the public interest or
for the protection of investors, and shall be filed with the
Commission not later than the time copies of such material are
first published or sent or given to security holders. Copies of
all statements, in the form in which such material is furnished
to security holders and the Commission, shall be sent to the
issuer not later than the date such material is first published
or sent or given to any security holders.
(2) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of
acquiring, holding, or disposing of securities of an issuer,
such syndicate or group shall be deemed a ``person'' for
purposes of this subsection.
(3) In determining, for purposes of this subsection, any
percentage of a class of any security, such class shall be
deemed to consist of the amount of the outstanding securities
of such class, exclusive of any securities of such class held
by or for the account of the issuer or a subsidiary of the
issuer.
(4) Any solicitation or recommendation to the holders of such
a security to accept or reject a tender offer or request or
invitation for tenders shall be made in accordance with such
rules and regulations as the Commission may prescribe as
necessary or appropriate in the public interest or for the
protection of investors.
(5) Securities deposited pursuant to a tender offer or
request or invitation for tenders may be withdrawn by or on
behalf of the depositor at any time until the expiration of
seven days after the time definitive copies of the offer or
request or invitation are first published or sent or given to
security holders, and at any time after sixty days from the
date of the original tender offer or request or invitation,
except as the Commission may otherwise prescribe by rules,
regulations, or order as necessary or appropriate in the public
interest or for the protection of investors.
(6) Where any person makes a tender offer, or request or
invitation for tenders, for less than all the outstanding
equity securities of a class, and where a greater number of
securities is deposited pursuant thereto within ten days after
copies of the offer or request or invitation are first
published or sent or given to security holders than such person
is bound or willing to take up and pay for, the securities
taken up shall be taken up as nearly as may be pro rata,
disregarding fractions, according to the number of securities
deposited by each depositor. The provisions of this subsection
shall also apply to securities deposited within ten days after
notice of an increase in the consideration offered to security
holders, as described in paragraph (7), is first published or
sent or given to security holders.
(7) Where any person varies the terms of a tender offer or
request or invitation for tenders before the expiration thereof
by increasing the consideration offered to holders of such
securities, such person shall pay the increased consideration
to each security holder whose securities are taken up and paid
for pursuant to the tender offer or request or invitation for
tenders whether or not such securities have been taken up by
such person before the variation of the tender offer or request
or invitation.
(8) The provisions of this subsection shall not apply to any
offer for, or request or invitation for tenders of, any
security--
(A) if the acquisition of such security, together
with all other acquisitions by the same person of
securities of the same class during the preceding
twelve months, would not exceed 2 per centum of that
class;
(B) by the issuer of such security; or
(C) which the Commission, by rules or regulations or
by order, shall exempt from the provisions of this
subsection as not entered into for the purpose of, and
not having the effect of, changing or influencing the
control of the issuer or otherwise as not comprehended
within the purposes of this subsection.
(e) It shall be unlawful for any person to make any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made, in the light of
the circumstances under which they are made, not misleading, or
to engage in any fraudulent, deceptive, or manipulative acts or
practices, in connection with any tender offer or request or
invitation for tenders, or any solicitation of security holders
in opposition to or in favor of any such offer, request, or
invitation. The Commission shall, for the purposes of this
subsection, by rules and regulations define, and prescribe
means reasonably designed to prevent, such acts and practices
as are fraudulent, deceptive, or manipulative.
(f) If, pursuant to any arrangement or understanding with the
person or persons acquiring securities in a transaction subject
to subsection (d) of this section or subsection (d) of section
13 of this title, any persons are to be elected or designated
as directors of the issuer, otherwise than at a meeting of
security holders, and the persons so elected or designated will
constitute a majority of the directors of the issuer, then,
prior to the time any such person takes office as a director,
and in accordance with rules and regulations prescribed by the
Commission, the issuer shall file with the Commission, and
transmit to all holders of record of securities of the issuer
who would be entitled to vote at a meeting for election of
directors, information substantially equivalent to the
information which would be required by subsection (a) or (c) of
this section to be transmitted if such person or persons were
nominees for election as directors at a meeting of such
security holders.
(g)(1)(A) At the time of filing such preliminary proxy
solicitation material as the Commission may require by rule
pursuant to subsection (a) of this section that concerns an
acquisition, merger, consolidation, or proposed sale or other
disposition of substantially all the assets of a company, the
person making such filing, other than a company registered
under the Investment Company Act of 1940, shall pay to the
Commission the following fees:
(i) for preliminary proxy solicitation material
involving an acquisition, merger, or consolidation, if
there is a proposed payment of cash or transfer of
securities or property to shareholders, a fee at a rate
that, subject to paragraph (4), is equal to $92 per
$1,000,000 of such proposed payment, or of the value of
such securities or other property proposed to be
transferred; and
(ii) for preliminary proxy solicitation material
involving a proposed sale or other disposition of
substantially all of the assets of a company, a fee at
a rate that, subject to paragraph (4), is equal to $92
per $1,000,000 of the cash or of the value of any
securities or other property proposed to be received
upon such sale or disposition.
(B) The fee imposed under subparagraph (A) shall be reduced
with respect to securities in an amount equal to any fee paid
to the Commission with respect to such securities in connection
with the proposed transaction under section 6(b) of the
Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee paid
under that section shall be reduced in an amount equal to the
fee paid to the Commission in connection with such transaction
under this subsection. Where two or more companies involved in
an acquisition, merger, consolidation, sale, or other
disposition of substantially all the assets of a company must
file such proxy material with the Commission, each shall pay a
proportionate share of such fee.
(2) At the time of filing such preliminary information
statement as the Commission may require by rule pursuant to
subsection (c) of this section, the issuer shall pay to the
Commission the same fee as required for preliminary proxy
solicitation material under paragraph (1) of this subsection.
(3) At the time of filing such statement as the Commission
may require by rule pursuant to subsection (d)(1) of this
section, the person making the filing shall pay to the
Commission a fee at a rate that, subject to paragraph (4), is
equal to $92 per $1,000,000 of the aggregate amount of cash or
of the value of securities or other property proposed to be
offered. The fee shall be reduced with respect to securities in
an amount equal to any fee paid with respect to such securities
in connection with the proposed transaction under section 6(b)
of the Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee
paid under that section shall be reduced in an amount equal to
the fee paid to the Commission in connection with such
transaction under this subsection.
(4) 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)).
(7) Pro rata application.--The rates per $1,000,000
required by this subsection shall be applied pro rata
to amounts and balances of less than $1,000,000.
(8) Notwithstanding any other provision of law, the
Commission may impose fees, charges, or prices for matters not
involving any acquisition, merger, consolidation, sale, or
other disposition of assets described in this subsection, as
authorized by section 9701 of title 31, United States Code, or
otherwise.
(h) Proxy Solicitations and Tender Offers in Connection With
Limited Partnership Rollup Transactions.--
(1) Proxy rules to contain special provisions.--It
shall be unlawful for any person to solicit any proxy,
consent, or authorization concerning a limited
partnership rollup transaction, or to make any tender
offer in furtherance of a limited partnership rollup
transaction, unless such transaction is conducted in
accordance with rules prescribed by the Commission
under subsections (a) and (d) as required by this
subsection. Such rules shall--
(A) permit any holder of a security that is
the subject of the proposed limited partnership
rollup transaction to engage in preliminary
communications for the purpose of determining
whether to solicit proxies, consents, or
authorizations in opposition to the proposed
limited partnership rollup transaction, without
regard to whether any such communication would
otherwise be considered a solicitation of
proxies, and without being required to file
soliciting material with the Commission prior
to making that determination, except that--
(i) nothing in this subparagraph
shall be construed to limit the
application of any provision of this
title prohibiting, or reasonably
designed to prevent, fraudulent,
deceptive, or manipulative acts or
practices under this title; and
(ii) any holder of not less than 5
percent of the outstanding securities
that are the subject of the proposed
limited partnership rollup transaction
who engages in the business of buying
and selling limited partnership
interests in the secondary market shall
be required to disclose such ownership
interests and any potential conflicts
of interests in such preliminary
communications;
(B) require the issuer to provide to holders
of the securities that are the subject of the
limited partnership rollup transaction such
list of the holders of the issuer's securities
as the Commission may determine in such form
and subject to such terms and conditions as the
Commission may specify;
(C) prohibit compensating any person
soliciting proxies, consents, or authorizations
directly from security holders concerning such
a limited partnership rollup transaction--
(i) on the basis of whether the
solicited proxy, consent, or
authorization either approves or
disapproves the proposed limited
partnership rollup transaction; or
(ii) contingent on the approval,
disapproval, or completion of the
limited partnership rollup transaction;
(D) set forth disclosure requirements for
soliciting material distributed in connection
with a limited partnership rollup transaction,
including requirements for clear, concise, and
comprehensible disclosure with respect to--
(i) any changes in the business plan,
voting rights, form of ownership
interest, or the compensation of the
general partner in the proposed limited
partnership rollup transaction from
each of the original limited
partnerships;
(ii) the conflicts of interest, if
any, of the general partner;
(iii) whether it is expected that
there will be a significant difference
between the exchange values of the
limited partnerships and the trading
price of the securities to be issued in
the limited partnership rollup
transaction;
(iv) the valuation of the limited
partnerships and the method used to
determine the value of the interests of
the limited partners to be exchanged
for the securities in the limited
partnership rollup transaction;
(v) the differing risks and effects
of the limited partnership rollup
transaction for investors in different
limited partnerships proposed to be
included, and the risks and effects of
completing the limited partnership
rollup transaction with less than all
limited partnerships;
(vi) the statement by the general
partner required under subparagraph
(E);
(vii) such other matters deemed
necessary or appropriate by the
Commission;
(E) require a statement by the general
partner as to whether the proposed limited
partnership rollup transaction is fair or
unfair to investors in each limited
partnership, a discussion of the basis for that
conclusion, and an evaluation and a description
by the general partner of alternatives to the
limited partnership rollup transaction, such as
liquidation;
(F) provide that, if the general partner or
sponsor has obtained any opinion (other than an
opinion of counsel), appraisal, or report that
is prepared by an outside party and that is
materially related to the limited partnership
rollup transaction, such soliciting materials
shall contain or be accompanied by clear,
concise, and comprehensible disclosure with
respect to--
(i) the analysis of the transaction,
scope of review, preparation of the
opinion, and basis for and methods of
arriving at conclusions, and any
representations and undertakings with
respect thereto;
(ii) the identity and qualifications
of the person who prepared the opinion,
the method of selection of such person,
and any material past, existing, or
contemplated relationships between the
person or any of its affiliates and the
general partner, sponsor, successor, or
any other affiliate;
(iii) any compensation of the
preparer of such opinion, appraisal, or
report that is contingent on the
transaction's approval or completion;
and
(iv) any limitations imposed by the
issuer on the access afforded to such
preparer to the issuer's personnel,
premises, and relevant books and
records;
(G) provide that, if the general partner or
sponsor has obtained any opinion, appraisal, or
report as described in subparagraph (F) from
any person whose compensation is contingent on
the transaction's approval or completion or who
has not been given access by the issuer to its
personnel and premises and relevant books and
records, the general partner or sponsor shall
state the reasons therefor;
(H) provide that, if the general partner or
sponsor has not obtained any opinion on the
fairness of the proposed limited partnership
rollup transaction to investors in each of the
affected partnerships, such soliciting
materials shall contain or be accompanied by a
statement of such partner's or sponsor's
reasons for concluding that such an opinion is
not necessary in order to permit the limited
partners to make an informed decision on the
proposed transaction;
(I) require that the soliciting material
include a clear, concise, and comprehensible
summary of the limited partnership rollup
transaction (including a summary of the matters
referred to in clauses (i) through (vii) of
subparagraph (D) and a summary of the matter
referred to in subparagraphs (F), (G), and
(H)), with the risks of the limited partnership
rollup transaction set forth prominently in the
fore part thereof;
(J) provide that any solicitation or offering
period with respect to any proxy solicitation,
tender offer, or information statement in a
limited partnership rollup transaction shall be
for not less than the lesser of 60 calendar
days or the maximum number of days permitted
under applicable State law; and
(K) contain such other provisions as the
Commission determines to be necessary or
appropriate for the protection of investors in
limited partnership rollup transactions.
(2) Exemptions.--The Commission may, consistent with
the public interest, the protection of investors, and
the purposes of this title, exempt by rule or order any
security or class of securities, any transaction or
class of transactions, or any person or class of
persons, in whole or in part, conditionally or
unconditionally, from the requirements imposed pursuant
to paragraph (1) or from the definition contained in
paragraph (4).
(3) Effect on commission authority.--Nothing in this
subsection limits the authority of the Commission under
subsection (a) or (d) or any other provision of this
title or precludes the Commission from imposing, under
subsection (a) or (d) or any other provision of this
title, a remedy or procedure required to be imposed
under this subsection.
(4) Definition of limited partnership rollup
transaction.--Except as provided in paragraph (5), as
used in this subsection, the term ``limited partnership
rollup transaction'' means a transaction involving the
combination or reorganization of one or more limited
partnerships, directly or indirectly, in which--
(A) some or all of the investors in any of
such limited partnerships will receive new
securities, or securities in another entity,
that will be reported under a transaction
reporting plan declared effective before the
date of enactment of this subsection by the
Commission under section 11A;
(B) any of the investors' limited partnership
securities are not, as of the date of filing,
reported under a transaction reporting plan
declared effective before the date of enactment
of this subsection by the Commission under
section 11A;
(C) investors in any of the limited
partnerships involved in the transaction are
subject to a significant adverse change with
respect to voting rights, the term of existence
of the entity, management compensation, or
investment objectives; and
(D) any of such investors are not provided an
option to receive or retain a security under
substantially the same terms and conditions as
the original issue.
(5) Exclusions from definition.--Notwithstanding
paragraph (4), the term ``limited partnership rollup
transaction'' does not include--
(A) a transaction that involves only a
limited partnership or partnerships having an
operating policy or practice of retaining cash
available for distribution and reinvesting
proceeds from the sale, financing, or
refinancing of assets in accordance with such
criteria as the Commission determines
appropriate;
(B) a transaction involving only limited
partnerships wherein the interests of the
limited partners are repurchased, recalled, or
exchanged in accordance with the terms of the
preexisting limited partnership agreements for
securities in an operating company specifically
identified at the time of the formation of the
original limited partnership;
(C) a transaction in which the securities to
be issued or exchanged are not required to be
and are not registered under the Securities Act
of 1933;
(D) a transaction that involves only issuers
that are not required to register or report
under section 12, both before and after the
transaction;
(E) a transaction, except as the Commission
may otherwise provide by rule for the
protection of investors, involving the
combination or reorganization of one or more
limited partnerships in which a non-affiliated
party succeeds to the interests of a general
partner or sponsor, if--
(i) such action is approved by not
less than 66\2/3\ percent of the
outstanding units of each of the
participating limited partnerships; and
(ii) as a result of the transaction,
the existing general partners will
receive only compensation to which they
are entitled as expressly provided for
in the preexisting limited partnership
agreements; or
(F) a transaction, except as the Commission
may otherwise provide by rule for the
protection of investors, in which the
securities offered to investors are securities
of another entity that are reported under a
transaction reporting plan declared effective
before the date of enactment of this subsection
by the Commission under section 11A, if--
(i) such other entity was formed, and
such class of securities was reported
and regularly traded, not less than 12
months before the date on which
soliciting material is mailed to
investors; and
(ii) the securities of that entity
issued to investors in the transaction
do not exceed 20 percent of the total
outstanding securities of the entity,
exclusive of any securities of such
class held by or for the account of the
entity or a subsidiary of the entity.
(i) 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, for any issuer other than an
emerging growth company, 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 disclosure under this
subsection may include a graphic representation of the
information required to be disclosed.
(j) Disclosure of Hedging by Employees and Directors.--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 whether any employee
or member 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.
(k) Prohibition on Requiring a Single Ballot.--The Commission
may not require that a solicitation of a proxy, consent, or
authorization to vote a security of an issuer in an election of
members of the board of directors of the issuer be made using a
single ballot or card that lists both individuals nominated by
(or on behalf of) the issuer and individuals nominated by (or
on behalf of) other proponents and permits the person granting
the proxy, consent, or authorization to select from among
individuals in both groups.
* * * * * * *
SEC. 15G. 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[.]; and
(5) the term ``asset-backed security'' refers only to
an asset-backed security that is comprised wholly of
residential mortgages.
(b) Regulations 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--
(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) 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--
(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 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) 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) 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--
(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.]
[(i)] (h) Effective Date of Regulations.--The regulations
issued under this section shall become [effective--]
[(1) with respect to] effective 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.]
* * * * * * *
SEC. 31. TRANSACTION FEES.
(a) Recovery of Costs of Annual Appropriation.--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) Exchange-Traded Securities.--Subject to subsection (j),
each national securities exchange shall pay to the Commission a
fee at a rate equal to $15 per $1,000,000 of the aggregate
dollar amount of sales of securities (other than bonds,
debentures, other evidences of indebtedness, security futures
products, and options on securities indexes (excluding a
narrow-based security index)) transacted on such national
securities exchange.
(c) Off-Exchange Trades of Exchange Registered and Last-Sale-
Reported Securities.--Subject to subsection (j), each national
securities association shall pay to the Commission a fee at a
rate equal to $15 per $1,000,000 of the aggregate dollar amount
of sales transacted by or through any member of such
association otherwise than on a national securities exchange of
securities (other than bonds, debentures, other evidences of
indebtedness, security futures products, and options on
securities indexes (excluding a narrow-based security index))
registered on a national securities exchange or subject to
prompt last sale reporting pursuant to the rules of the
Commission or a registered national securities association.
(d) Assessments on Security Futures Transactions.--Each
national securities exchange and national securities
association shall pay to the Commission an assessment equal to
$0.009 for each round turn transaction (treated as including
one purchase and one sale of a contract of sale for future
delivery) on a security future traded on such national
securities exchange or by or through any member of such
association otherwise than on a national securities exchange,
except that for fiscal year 2007 and each succeeding fiscal
year such assessment shall be equal to $0.0042 for each such
transaction.
(e) Dates for Payments.--The fees and assessments required by
subsections (b), (c), and (d) of this section shall be paid--
(1) on or before March 15, with respect to
transactions and sales occurring during the period
beginning on the preceding September 1 and ending at
the close of the preceding December 31; and
(2) on or before September 25, with respect to
transactions and sales occurring during the period
beginning on the preceding January 1 and ending at the
close of the preceding August 31.
(f) Exemptions.--The Commission, by rule, may exempt any sale
of securities or any class of sales of securities from any fee
or assessment imposed by this section, if the Commission finds
that such exemption is consistent with the public interest, the
equal regulation of markets and brokers and dealers, and the
development of a national market system.
(g) Publication.--The Commission shall publish in the Federal
Register notices of the fee or assessment rates applicable
under this section for each fiscal year not later than 30 days
after the date on which an Act making a regular appropriation
to the Commission for such fiscal year is enacted, together
with any estimates or projections on which such fees are based.
(h) Pro Rata Application.--The rates per $1,000,000 required
by this section shall be applied pro rata to amounts and
balances of less than $1,000,000.
(i) Deposit of Fees.--
(1) Offsetting collections.--Fees collected pursuant
to subsections (b), (c), and (d) for any fiscal year--
(A) shall be deposited and credited as
offsetting collections to the account providing
appropriations to the Commission; and
(B) except as provided in subsection (k),
shall not be collected for any fiscal year
except to the extent provided in advance in
appropriation Acts.
(2) General revenues prohibited.--No fees collected
pursuant to subsections (b), (c), and (d) for fiscal
year 2002 or any succeeding fiscal year shall be
deposited and credited as general revenue of the
Treasury.
(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 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.--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. 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.
(k) Lapse of Appropriation.--If on the first day of a fiscal
year a regular appropriation to the Commission has not been
enacted, the Commission shall continue to collect (as
offsetting collections) the fees and assessments under
subsections (b), (c), and (d) at the rate in effect during the
preceding fiscal year, until 60 days after the date such a
regular appropriation is enacted.
(l) Baseline Estimate of the Aggregate Dollar Amount of
Sales.--The baseline estimate of the aggregate dollar amount of
sales for any fiscal year is the baseline estimate of the
aggregate dollar amount of sales of securities (other than
bonds, debentures, other evidences of indebtedness, security
futures products, and options on securities indexes (excluding
a narrow-based security index)) to be transacted on each
national securities exchange and by or through any member of
each national securities association (otherwise than on a
national securities exchange) during such fiscal year as
determined by the Commission, after consultation with the
Congressional Budget Office and the Office of Management and
Budget, using the methodology required for making projections
pursuant to section 257 of the Balanced Budget and Emergency
Deficit Control Act of 1985.
(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.
(n) Overpayment.--If a national securities exchange or
national securities association pays to the Commission an
amount in excess of fees and assessments due under this section
and informs the Commission of such amount paid in excess within
10 years of the date of the payment, the Commission shall
offset future fees and assessments due by such exchange or
association in an amount equal to such excess amount.
* * * * * * *
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SMALL BUSINESS INVESTMENT INCENTIVE ACT OF 1980
* * * * * * *
TITLE V--CAPITAL FORMATION
* * * * * * *
ANNUAL GOVERNMENT-BUSINESS FORUM ON CAPITAL FORMATION
Sec. 503. (a) Pursuant to the consultation called for in
section 502,the Securities and Exchange Commission (acting
through the Office of the Advocate for Small Business Capital
Formation and in consultation with the Small Business Capital
Formation Advisory Committee) shall conduct an
annualGovernment-business forum to review the current status of
problems and programs relating to small business capital
formation.
(b) The Commission shall invite other Federal agencies, such
as theDepartment of the Treasury, the Board of Governors of the
FederalReserve System, the Small Business Administration,
organizations representing State securities commissioners, and
leading small businessand professional organizations concerned
with capital formation,to participate in the planning for such
forums.
(c) The Commission may request any of the Federal
departments, agencies, or organizations such as those specified
in subsection (b), orother groups or individuals, to prepare
statements and reports to bedelivered at such forums. Such
departments and agencies shallcooperate in this effort.
(d) A summary of the proceedings of such forums and any
findingsor recommendations thereof shall be prepared and
transmitted to theparticipants, appropriate committees of the
Congress, and others whomay be interested in the subject
matter.
(e) The Commission shall--
(1) review the findings and recommendations of the
forum; and
(2) each time the forum submits a finding or
recommendation to the Commission, promptly issue a
public statement--
(A) assessing the finding or recommendation
of the forum; and
(B) disclosing the action, if any, the
Commission intends to take with respect to the
finding or recommendation.
----------
INVESTMENT COMPANY ACT OF 1940
TITLE I--INVESTMENT COMPANIES
* * * * * * *
definition of investment company
Sec. 3. (a)(1) When used in this title, ``investment
company'' means any issuer which--
(A) is or holds itself out as being engaged
primarily, or proposes to engage primarily, in the
business of investing, reinvesting, or trading in
securities;
(B) is engaged or proposes to engage in the business
of issuing face-amount certificates of the installment
type, or has been engaged in such business and has any
such certificate outstanding; or
(C) is engaged or proposes to engage in the business
of investing, reinvesting, owning, holding, or trading
in securities, and owns or proposes to acquire
investment securities having a value exceeding 40 per
centum of the value of such issuer's total assets
(exclusive of Government securities and cash items) on
an unconsolidated basis.
(2) As used in this section, ``investment securities''
includes all securities except (A) Government securities, (B)
securities issued by employees' securities companies, and (C)
securities issued by majority-owned subsidiaries of the owner
which (i) are not investment companies, and (ii) are not
relying on the exception from the definition of investment
company in paragraph (1) or (7) of subsection (c).
(b) Notwithstanding paragraph (1)(C) of subsection (a), none
of the following persons is an investment company within the
meaning of this title:
(1) Any issuer primarily engaged, directly or through
a wholly-owned subsidiary or subsidiaries, in a
business or businesses other than that of investing,
reinvesting, owning, holding, or trading in securities.
(2) Any issuer which the Commission, upon application
by such issuer, finds and by order declares to be
primarily engaged in a business or businesses other
than that of investing, reinvesting, owning, holding,
or trading in securities either directly or (A) through
majority-owned subsidiaries or (B) through controlled
companies conducting similar types of businesses. The
filing of an application under this paragraph in good
faith by an issuer other than a registered investment
company shall exempt the applicant for a period of
sixty days from all provisions of this title applicable
to investment companies as such. For cause shown, the
Commission by order may extend such period of exemption
for an additional period or periods. Whenever the
Commission, upon its own motion or upon application,
finds that the circumstances which gave rise to the
issuance of an order granting an application under this
paragraph no longer exist, the Commission shall by
order revoke such order.
(3) Any issuer all the outstanding securities of
which (other than short-term paper and directors'
qualifying shares) are directly or indirectly owned by
a company excepted from the definition of investment
company by paragraph (1) or (2) of this subsection.
(c) Notwithstanding subsection (a), none of the following
persons is an investment company within the meaning of this
title:
(1) Any issuer whose outstanding securities (other
than short-term paper) are beneficially owned by not
more than one hundred persons (or, with respect to a
qualifying venture capital fund, 500 persons) and which
is not making and does not presently propose to make a
public offering of its securities. Such issuer shall be
deemed to be an investment company for purposes of the
limitations set forth in subparagraphs (A)(i) and
(B)(i) of section 12(d)(1) governing the purchase or
other acquisition by such issuer of any security issued
by any registered investment company and the sale of
any security issued by any registered open-end
investment company to any such issuer. For purposes of
this paragraph:
(A) Beneficial ownership by a company shall
be deemed to be beneficial ownership by one
person, except that, if the company owns 10 per
centum or more of the outstanding voting
securities of the issuer, and is or, but for
the exception provided for in this paragraph or
paragraph (7), would be an investment company,
the beneficial ownership shall be deemed to be
that of the holders of such company's
outstanding securities (other than short-term
paper).
(B) Beneficial ownership by any person who
acquires securities or interests in securities
of an issuer described in the first sentence of
this paragraph shall be deemed to be beneficial
ownership by the person from whom such transfer
was made, pursuant to such rules and
regulations as the Commission shall prescribe
as necessary or appropriate in the public
interest and consistent with the protection of
investors and the purposes fairly intended by
the policy and provisions of this title, where
the transfer was caused by legal separation,
divorce, death, or other involuntary event.
(C) The term ``qualifying venture capital
fund'' means any venture capital fund (as
defined pursuant to section 203(l)(1) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-
3(l)(1)) with no more than $50,000,000 in
aggregate capital contributions and uncalled
committed capital, as such dollar amount is
annually adjusted by the Commission to reflect
the change in the Consumer Price Index for All
Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.
(2)(A) Any person primarily engaged in the business
of underwriting and distributing securities issued by
other persons, selling securities to customers, acting
as broker, and acting as market intermediary, or any
one or more of such activities, whose gross income
normally is derived principally from such business and
related activities.
(B) For purposes of this paragraph--
(i) the term ``market intermediary'' means
any person that regularly holds itself out as
being willing contemporaneously to engage in,
and that is regularly engaged in, the business
of entering into transactions on both sides of
the market for a financial contract or one or
more such financial contracts; and
(ii) the term ``financial contract'' means
any arrangement that--
(I) takes the form of an individually
negotiated contract, agreement, or
option to buy, sell, lend, swap, or
repurchase, or other similar
individually negotiated transaction
commonly entered into by participants
in the financial markets;
(II) is in respect of securities,
commodities, currencies, interest or
other rates, other measures of value,
or any other financial or economic
interest similar in purpose or function
to any of the foregoing; and
(III) is entered into in response to
a request from a counter party for a
quotation, or is otherwise entered into
and structured to accommodate the
objectives of the counter party to such
arrangement.
(3) Any bank or insurance company; any savings and
loan association, building and loan association,
cooperative bank, homestead association, or similar
institution, or any receiver, conservator, liquidator,
liquidating agent, or similar official or person
thereof or therefor; or any common trust fund or
similar fund maintained by a bank exclusively for the
collective investment and reinvestment of moneys
contributed thereto by the bank in its capacity as a
trustee, executor, administrator, or guardian, if--
(A) such fund is employed by the bank solely
as an aid to the administration of trusts,
estates, or other accounts created and
maintained for a fiduciary purpose;
(B) except in connection with the ordinary
advertising of the bank's fiduciary services,
interests in such fund are not--
(i) advertised; or
(ii) offered for sale to the general
public; and
(C) fees and expenses charged by such fund
are not in contravention of fiduciary
principles established under applicable Federal
or State law.
(4) Any person substantially all of whose business is
confined to making small loans, industrial banking, or
similar businesses.
(5) Any person who is not engaged in the business of
issuing redeemable securities, face-amount certificates
of the installment type or periodic payment plan
certificates, and who is primarily engaged in one or
more of the following businesses: (A) Purchasing or
otherwise acquiring notes, drafts, acceptances, open
accounts receivable, and other obligations representing
part or all of the sales price of merchandise,
insurance, and services; (B) making loans to
manufacturers, wholesalers, and retailers of, and to
prospective purchasers of, specified merchandise,
insurance, and services; and (C) purchasing or
otherwise acquiring mortgages and other liens on and
interests in real estate.
(6) Any company primarily engaged, directly or
through majority-owned subsidiaries, in one or more of
the businesses described in paragraphs (3), (4), and
(5), or in one or more of such businesses (from which
not less than 25 centum of such company's gross income
during its last fiscal year was derived) together with
an additional business or businesses other than
investing, reinvesting, owning, holding, or trading in
securities.
(7)(A) Any issuer, the outstanding securities of
which are owned exclusively by persons who, at the time
of acquisition of such securities, are qualified
purchasers, and which is not making and does not at
that time propose to make a public offering of such
securities. Securities that are owned by persons who
received the securities from a qualified purchaser as a
gift or bequest, or in a case in which the transfer was
caused by legal separation, divorce, death, or other
involuntary event, shall be deemed to be owned by a
qualified purchaser, subject to such rules,
regulations, and orders as the Commission may prescribe
as necessary or appropriate in the public interest or
for the protection of investors.
(B) Notwithstanding subparagraph (A), an issuer is
within the exception provided by this paragraph if--
(i) in addition to qualified purchasers,
outstanding securities of that issuer are
beneficially owned by not more than 100 persons
who are not qualified purchasers, if--
(I) such persons acquired any portion
of the securities of such issuer on or
before September 1, 1996; and
(II) at the time at which such
persons initially acquired the
securities of such issuer, the issuer
was excepted by paragraph (1); and
(ii) prior to availing itself of the
exception provided by this paragraph--
(I) such issuer has disclosed to each
beneficial owner, as determined under
paragraph (1), that future investors
will be limited to qualified
purchasers, and that ownership in such
issuer is no longer limited to not more
than 100 persons; and
(II) concurrently with or after such
disclosure, such issuer has provided
each beneficial owner, as determined
under paragraph (1), with a reasonable
opportunity to redeem any part or all
of their interests in the issuer,
notwithstanding any agreement to the
contrary between the issuer and such
persons, for that person's
proportionate share of the issuer's net
assets.
(C) Each person that elects to redeem under
subparagraph (B)(ii)(II) shall receive an amount in
cash equal to that person's proportionate share of the
issuer's net assets, unless the issuer elects to
provide such person with the option of receiving, and
such person agrees to receive, all or a portion of such
person's share in assets of the issuer. If the issuer
elects to provide such persons with such an
opportunity, disclosure concerning such opportunity
shall be made in the disclosure required by
subparagraph (B)(ii)(I).
(D) An issuer that is excepted under this paragraph
shall nonetheless be deemed to be an investment company
for purposes of the limitations set forth in
subparagraphs (A)(i) and (B)(i) of section 12(d)(1)
relating to the purchase or other acquisition by such
issuer of any security issued by any registered
investment company and the sale of any security issued
by any registered open-end investment company to any
such issuer.
(E) For purposes of determining compliance with this
paragraph and paragraph (1), an issuer that is
otherwise excepted under this paragraph and an issuer
that is otherwise excepted under paragraph (1) shall
not be treated by the Commission as being a single
issuer for purposes of determining whether the
outstanding securities of the issuer excepted under
paragraph (1) are beneficially owned by not more than
100 persons or whether the outstanding securities of
the issuer excepted under this paragraph are owned by
persons that are not qualified purchasers. Nothing in
this subparagraph shall be construed to establish that
a person is a bona fide qualified purchaser for
purposes of this paragraph or a bona fide beneficial
owner for purposes of paragraph (1).
(9) Any person substantially all of whose business
consists of owning or holding oil, gas, or other
mineral royalties or leases, or fractional interests
therein, or certificates of interest or participation
in or investment contracts relative to such royalties,
leases, or fractional interests.
(10)(A) Any company organized and operated
exclusively for religious, educational, benevolent,
fraternal, charitable, or reformatory purposes--
(i) no part of the net earnings of which
inures to the benefit of any private
shareholder or individual; or
(ii) which is or maintains a fund described
in subparagraph (B).
(B) For the purposes of subparagraph (A)(ii), a fund
is described in this subparagraph if such fund is a
pooled income fund, collective trust fund, collective
investment fund, or similar fund maintained by a
charitable organization exclusively for the collective
investment and reinvestment of one or more of the
following:
(i) assets of the general endowment fund or
other funds of one or more charitable
organizations;
(ii) assets of a pooled income fund;
(iii) assets contributed to a charitable
organization in exchange for the issuance of
charitable gift annuities;
(iv) assets of a charitable remainder trust
or of any other trust, the remainder interests
of which are irrevocably dedicated to any
charitable organization;
(v) assets of a charitable lead trust;
(vi) assets of a trust, the remainder
interests of which are revocably dedicated to
or for the benefit of 1 or more charitable
organizations, if the ability to revoke the
dedication is limited to circumstances
involving--
(I) an adverse change in the
financial circumstances of a settlor or
an income beneficiary of the trust;
(II) a change in the identity of the
charitable organization or
organizations having the remainder
interest, provided that the new
beneficiary is also a charitable
organization; or
(III) both the changes described in
subclauses (I) and (II);
(vii) assets of a trust not described in
clauses (i) through (v), the remainder
interests of which are revocably dedicated to a
charitable organization, subject to
subparagraph (C); or
(viii) such assets as the Commission may
prescribe by rule, regulation, or order in
accordance with section 6(c).
(C) A fund that contains assets described in clause
(vii) of subparagraph (B) shall be excluded from the
definition of an investment company for a period of 3
years after the date of enactment of this subparagraph,
but only if--
(i) such assets were contributed before the
date which is 60 days after the date of
enactment of this subparagraph; and
(ii) such assets are commingled in the fund
with assets described in one or more of clauses
(i) through (vi) and (viii) of subparagraph
(B).
(D) For purposes of this paragraph--
(i) a trust or fund is ``maintained'' by a
charitable organization if the organization
serves as a trustee or administrator of the
trust or fund or has the power to remove the
trustees or administrators of the trust or fund
and to designate new trustees or
administrators;
(ii) the term ``pooled income fund'' has the
same meaning as in section 642(c)(5) of the
Internal Revenue Code of 1986;
(iii) the term ``charitable organization''
means an organization described in paragraphs
(1) through (5) of section 170(c) or section
501(c)(3) of the Internal Revenue Code of 1986;
(iv) the term ``charitable lead trust'' means
a trust described in section 170(f)(2)(B),
2055(e)(2)(B), or 2522(c)(2)(B) of the Internal
Revenue Code of 1986;
(v) the term ``charitable remainder trust''
means a charitable remainder annuity trust or a
charitable remainder unitrust, as those terms
are defined in section 664(d) of the Internal
Revenue Code of 1986; and
(vi) the term ``charitable gift annuity''
means an annuity issued by a charitable
organization that is described in section
501(m)(5) of the Internal Revenue Code of 1986.
(11) Any employee's stock bonus, pension, or profit-
sharing trust which meets the requirements for
qualification under section 401 of the Internal Revenue
Code of 1986; or any governmental plan described in
section 3(a)(2)(C) of the Securities Act of 1933; or
any collective trust fund maintained by a bank
consisting solely of assets of one or more of such
trusts, government plans, or church plans, companies or
accounts that are excluded from the definition of an
investment company under paragraph (14) of this
subsection; or any separate account the assets of which
are derived solely from (A) contributions under pension
or profit-sharing plans which meet the requirements of
section 401 of the Internal Revenue Code of 1986 or the
requirements for deduction of the employer's
contribution under section 404(a)(2) of such Code, (B)
contributions under governmental plans in connection
with which interests, participations, or securities are
exempted from the registration provisions of section 5
of the Securities Act of 1933 by section 3(a)(2)(C) of
such Act, and (C) advances made by an insurance company
in connection with the operation of such separate
account.
(12) Any voting trust the assets of which consist
exclusively of securities of a single issuer which is
not an investment company.
(13) Any security holders' protective committee or
similar issuer having outstanding and issuing no
securities other than certificates of deposit and
short-term paper.
(14) Any church plan described in section 414(e) of
the Internal Revenue Code of 1986, if, under any such
plan, no part of the assets may be used for, or
diverted to, purposes other than the exclusive benefit
of plan participants or beneficiaries, or any company
or account that is--
(A) established by a person that is eligible
to establish and maintain such a plan under
section 414(e) of the Internal Revenue Code of
1986; and
(B) substantially all of the activities of
which consist of--
(i) managing or holding assets
contributed to such church plans or
other assets which are permitted to be
commingled with the assets of church
plans under the Internal Revenue Code
of 1986; or
(ii) administering or providing
benefits pursuant to church plans.
* * * * * * *
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TRUTH IN LENDING ACT
* * * * * * *
TITLE I--CONSUMER CREDIT COST DISCLOSURE
CHAPTER 1--GENERAL PROVISIONS
* * * * * * *
Sec. 103. Definitions and rules of construction
(a) The definitions and rules of construction set forth in
this section are applicable for the purposes of this title.
(b) Bureau.--The term ``Bureau '' means the Bureau of
Consumer Financial Protection.
(c) The term ``Bureau '' refers to the Bureau of Governors of
the Federal Reserve System.
(d) The term ``organization'' means a corporation, government
or governmental subdivision or agency, trust, estate,
partnership, cooperative, or association.
(e) The term ``person'' means a natural person or an
organization.
(f) The term ``credit'' means the right granted by a creditor
to a debtor to defer payment of debt or to incur debt and defer
its payment.
(g) The term ``creditor'' refers only to a person who both
(1) regularly extends, whether in connection with loans, sales
of property or services, or otherwise, consumer credit which is
payable by agreement in more than four installments or for
which the payment of a finance charge is or may be required,
and (2) is the person to whom the debt arising from the
consumer credit transaction is initially payable on the face of
the evidence of indebtedness or, if there is no such evidence
of indebtedness, by agreement. Notwithstanding the preceding
sentence, in the case of an open-end credit plan involving a
credit card, the card issuer and any person who honors the
credit card and offers a discount which is a finance charge are
creditors. For the purpose of the requirements imposed under
chapter 4 and sections 127(a)(5), 127(a)(6), 127(a)(7),
127(b)(1), 127(b)(2), 127(b)(3), 127(b)(8), and 127(b)(10) of
chapter 2 of this title, the term ``creditor'' shall also
include card issuers whether or not the amount due is payable
by agreement in more than four installments or the payment of a
finance charge is or may be required, and the Bureau shall, by
regulation, apply these requirements to such card issuers, to
the extent appropriate, even though the requirements are by
their terms applicable only to creditors offering open-end
credit plans. Any person who originates 2 or more mortgages
referred to in subsection (aa) in any 12-month period or any
person who originates 1 or more such mortgages through a
mortgage broker shall be considered to be a creditor for
purposes of this title. The term ``creditor'' includes a
private educational lender (as that term is defined in section
140) for purposes of this title.
(h) The term ``credit sale'' refers to any sale in which the
seller is a creditor. The term includes any contract in the
form of a bailment or lease if the bailee or lessee contracts
to pay as compensation for use a sum substantially equivalent
to or in excess of the aggregate value of the property and
services involved and it is agreed that the bailee or lessee
will become, or for no other or a nominal consideration has the
option to become, the owner of the property upon full
compliance with his obligations under the contract.
(i) The adjective ``consumer'', used with reference to a
credit transaction, characterizes the transaction as one in
which the party to whom credit is offered or extended is a
natural person, and the money, property, or services which are
the subject of the transaction are primarily for personal,
family, or household purposes.
(j) The terms ``open end credit plan'' and ``open end
consumer credit plan'' mean a plan under which the creditor
reasonably contemplates repeated transactions, which prescribes
the terms of such transactions, and which provides for a
finance charge which may be computed from time to time on the
outstanding unpaid balance. A credit plan or open end consumer
credit plan which is an open end credit plan or open end
consumer credit plan within the meaning of the preceding
sentence is an open end credit plan or open end consumer credit
plan even if credit information is verified from time to time.
(k) The term ``adequate notice'', as used in section 133,
means a printed notice to a cardholder which sets forth the
pertinent facts clearly and conspicuously so that a person
against whom it is to operate could reasonably be expected to
have noticed it and understood its meaning. Such notice may be
given to a cardholder by printing the notice on any credit
card, or on each periodic statement of account, issued to the
cardholder, or by any other means reasonably assuring the
receipt thereof by the cardholder.
(l) The term ``credit card'' means any card, plate, coupon
book or other credit device existing for the purpose of
obtaining money, property, labor, or services on credit.
(m) The term ``accepted credit card'' means any credit card
which the cardholder has requested and received or has signed
or has used, or authorized another to use, for the purpose of
obtaining money, property, labor, or services on credit.
(n) The term ``cardholder'' means any person to whom a credit
card is issued or any person who has agreed with the card
issuer to pay obligations arising from the issuance of a credit
card to another person.
(o) The term ``card issuer'' means any person who issues a
credit card, or the agent of such person with respect to such
card.
(p) The term ``unauthorized use'', as used in section 133,
means a use of a credit card by a person other than the
cardholder who does not have actual, implied, or apparent
authority for such use and from which the cardholder receives
no benefit.
(q) The term ``discount'' as used in section 167 means a
reduction made from the regular price. The term ``discount'' as
used in section 167 shall not mean a surcharge.
(r) The term ``surcharge'' as used in section 103 and section
167 means any means of increasing the regular price to a
cardholder which is not imposed upon customers paying by cash,
check, or similar means.
(s) The term ``State'' refers to any State, the Commonwealth
of Puerto Rico, the District of Columbia, and any territory or
possession of the United States.
(t) The term ``agricultural purposes'' includes the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a
natural person who cultivates, plants, propagates, or nurtures
those agricultural products, including but not limited to the
acquisition of farmland, real property with a farm residence,
and personal property and services used primarily in farming.
(u) The term ``agricultural products'' includes agricultural,
horticultural, viticultural, and dairy products, livestock,
wildlife, poultry, bees, forest products, fish and shellfish,
and any products thereof, including processed and manufactured
products, and any and all products raised or produced on farms
and any processed or manufactured products thereof.
(v) The term ``material disclosures'' means the disclosure,
as required by this title, of the annual percentage rate, the
method of determining the finance charge and the balance upon
which a finance charge will be imposed, the amount of the
finance charge, the amount to be financed, the total of
payments, the number and amount of payments, the due dates or
periods of payments scheduled to repay the indebtedness, and
the disclosures required by section 129(a).
(w) The term ``dwelling'' means a residential structure or
mobile home which contains one to four family housing units, or
individual units of condominiums or cooperatives.
(x) The term ``residential mortgage transaction'' means a
transaction in which a mortgage, deed of trust, purchase money
security interest arising under an installment sales contract,
or equivalent consensual security interest is created or
retained against the consumer's dwelling to finance the
acquisition or initial construction of such dwelling.
(y) As used in this section and section 167, the term
``regular price'' means the tag or posted price charged for the
property or service if a single price is tagged or posted, or
the price charged for the property or service when payment is
made by use of an open-end credit plan or a credit card if
either (1) no price is tagged or posted, or (2) two prices are
tagged or posted, one of which is charged when payment is made
by use of an open-end credit plan or a credit card and the
other when payment is made by use of cash, check, or similar
means. For purposes of this definition, payment by check,
draft, or other negotiable instrument which may result in the
debiting of an open-end credit plan or a credit cardholder's
open-end account shall not be considered payment made by use of
the plan or the account.
(z) Any reference to any requirement imposed under this title
or any provision thereof includes reference to the regulations
of the Bureau under this title or the provision thereof in
question.
[(bb)] (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)] (10 percentage
points if the dwelling is
personal property or is a
transaction that does not
include the purchase of real
property on which a dwelling is
to be placed, and the
transaction is for less than
$75,000 (as such amount is
adjusted by the Consumer Law
Enforcement Agency to reflect
the change in the Consumer
Price Index)) 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--
(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 Bureau shall prescribe by
regulation); or
(III) in the case of a
transaction for less than
$75,000 (as such amount is
adjusted by the Consumer Law
Enforcement Agency to reflect
the change in the Consumer
Price Index) in which the
dwelling is personal property
(or is a consumer credit
transaction that does not
include the purchase of real
property on which a dwelling is
to be placed) the greater of 5
percent of the total
transaction amount or $3,000
(as such amount is adjusted by
the Consumer Law Enforcement
Agency to reflect the change in
the Consumer Price Index); 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.
(2)(A) After the 2-year period beginning on the effective
date of the regulations promulgated under section 155 of the
Riegle Community Development and Regulatory Improvement Act of
1994, and no more frequently than biennially after the first
increase or decrease under this subparagraph, the Bureau may by
regulation increase or decrease the number of percentage points
specified in paragraph (1)(A), if the Bureau determines that
the increase or decrease is--
(i) consistent with the consumer protections against
abusive lending provided by the amendments made by
subtitle B of title I of the Riegle Community
Development and Regulatory Improvement Act of 1994; and
(ii) warranted by the need for credit.
(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
(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) In determining whether to increase or decrease the number
of percentage points referred to in subparagraph (A), the
Bureau shall consult with representatives of consumers,
including low-income consumers, and lenders.
(3) The amount specified in paragraph (1)(B)(ii) shall be
adjusted annually on January 1 by the annual percentage change
in the Consumer Price Index, as reported on June 1 of the year
preceding such adjustment.
(4) For purposes of paragraph (1)(B), points and fees shall
include--
(A) all items included in the finance charge, except
interest or the time-price differential;
(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;
(C) each of the charges listed in section 106(e)
(except an escrow for future payment of taxes),
unless--
(i) the charge is reasonable;
(ii) the creditor receives no direct or
indirect compensation; and
(iii) the charge is paid to a third party
unaffiliated with the creditor; and
(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
(G) such other charges as the Bureau determines to be
appropriate.
(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.
(6) This subsection shall not be construed to limit the rate
of interest or the finance charge that a person may charge a
consumer for any extension of credit.
[(aa)] (bb) The disclosure of an amount or percentage which
is greater than the amount or percentage required to be
disclosed under this title does not in itself constitute a
violation of this title.
(cc) The term ``reverse mortgage transaction'' means a
nonrecourse transaction in which a mortgage, deed of trust, or
equivalent consensual security interest is created against the
consumer's principal dwelling--
(1) securing one or more advances; and
(2) with respect to which the payment of any
principal, interest, and shared appreciation or equity
is due and payable (other than in the case of default)
only after--
(A) the transfer of the dwelling;
(B) the consumer ceases to occupy the
dwelling as a principal dwelling; or
(C) the death of the consumer.
[(cc)] (dd) 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)] a retailer of manufactured or
modular homes or its employees unless such
retailer or its employees receive compensation
or gain for engaging in activities described in
subparagraph (A) that is in excess of any
compensation or gain received in a comparable
cash transaction;
(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;
(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
Bureau 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)).
[(dd)] (ee) 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 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.
* * * * * * *
CHAPTER 2--CREDIT TRANSACTIONS
* * * * * * *
Sec. 129C. Minimum 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 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-rate loan, under
guidelines that the department or agency shall
establish for loans they make, guarantee, or
issue.
(E) The 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
(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) 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--
(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 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 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 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
account all applicable taxes,
insurance, and assessments; and
(iv) that is extended by a creditor
that--
(I) operates 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.
(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 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) 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 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--
(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 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.
(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.
(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
(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.
(j) Safe Harbor for Certain Loans Held on Portfolio.--
(1) Safe harbor for creditors that are depository
institutions.--
(A) In general.--A creditor that is a
depository institution shall not be subject to
suit for failure to comply with subsection (a),
(c)(1), or (f)(2) of this section or section
129H with respect to a residential mortgage
loan, and the banking regulators shall treat
such loan as a qualified mortgage, if--
(i) the creditor has, since the
origination of the loan, held the loan
on the balance sheet of the creditor;
and
(ii) all prepayment penalties with
respect to the loan comply with the
limitations described under subsection
(c)(3).
(B) Exception for certain transfers.--In the
case of a depository institution that transfers
a loan originated by that institution to
another depository institution by reason of the
bankruptcy or failure of the originating
depository institution or the purchase of the
originating depository institution, the
depository institution transferring such loan
shall be deemed to have complied with the
requirement under subparagraph (A)(i).
(2) Safe harbor for mortgage originators.--A mortgage
originator shall not be subject to suit for a violation
of section 129B(c)(3)(B) for steering a consumer to a
residential mortgage loan if--
(A) the creditor of such loan is a depository
institution and has informed the mortgage
originator that the creditor intends to hold
the loan on the balance sheet of the creditor
for the life of the loan; and
(B) the mortgage originator informs the
consumer that the creditor intends to hold the
loan on the balance sheet of the creditor for
the life of the loan.
(3) Definitions.--For purposes of this subsection:
(A) Banking regulators.--The term ``banking
regulators'' means the Federal banking
agencies, the Bureau, and the National Credit
Union Administration.
(B) Depository institution.--The term
``depository institution'' has the meaning
given that term under section 19(b)(1) of the
Federal Reserve Act (12 U.S.C. 505(b)(1)).
(C) Federal banking agencies.--The term
``Federal banking agencies'' has the meaning
given that term under section 3 of the Federal
Deposit Insurance Act.
Sec. 129D. 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 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] Bureau may, by regulation,
exempt from the requirements of subsection (a) a creditor
that--
(1) operates 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] Bureau;
(3) retains its mortgage loan originations in
portfolio; and
(4) meets any asset size threshold and any other
criteria the [Board] Bureau 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
(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] Bureau, 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.--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 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] Bureau
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.
(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:
(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]
Bureau determines necessary for the protection
of the consumer.
(k) Safe Harbor for Loans Held by Smaller Creditors.--
(1) In general.--A creditor shall not be in violation
of subsection (a) with respect to a loan if--
(A) the creditor has consolidated assets of
$10,000,000,000 or less; and
(B) the creditor holds the loan on the
balance sheet of the creditor for the 3-year
period beginning on the date of the origination
of the loan.
(2) Exception for certain transfers.--In the case of
a creditor that transfers a loan to another person by
reason of the bankruptcy or failure of the creditor,
the purchase of the creditor, or a supervisory act or
recommendation from a State or Federal regulator, the
creditor shall be deemed to have complied with the
requirement under paragraph (1)(B).
* * * * * * *
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FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989
* * * * * * *
TITLE IX--REGULATORY ENFORCEMENT AUTHORITY AND CRIMINAL ENHANCEMENTS
* * * * * * *
Subtitle E--Civil Penalties For Violations Involving Financial
Institutions
SEC. 951. CIVIL PENALTIES.
(a) In General.--Whoever violates any provision of law to
which this section is made applicable by subsection (c) shall
be subject to a civil penalty in an amount assessed by the
court in a civil action under this section.
(b) Maximum Amount of Penalty.--
(1) Generally.--The amount of the civil penalty shall
not exceed $1,000,000.
(2) Special rule for continuing violations.--In the
case of a continuing violation, the amount of the civil
penalty may exceed the amount described in paragraph
(1) but may not exceed the lesser of $1,000,000 per day
or $5,000,000.
(3) Special rule for violations creating gain or
loss.--(A) If any person derives pecuniary gain from
the violation, or if the violation results in pecuniary
loss to a person other than the violator, the amount of
the civil penalty may exceed the amounts described in
paragraphs (1) and (2) but may not exceed the amount of
such gain or loss.
(B) As used in this paragraph, the term ``person''
includes the Bank Insurance Fund, the Savings
Association Insurance Fund, and after the merger of
such funds, the Deposit Insurance Fund, and the
National Credit Union Share Insurance Fund.
(c) Violations to Which Penalty Is Applicable.--This section
applies to a violation of, or a conspiracy to violate--
(1) section 215, 656, 657, 1005, 1006, 1007, 1014, or
1344 of title 18, United States Code;
(2) section 287, 1001, 1032, 1341 or 1343 of title
18, United States Code, [affecting a federally insured
financial institution] against a federally insured
financial institution or by a federally insured
financial institution against an unaffiliated third
person; or
(3) section 16(a) of the Small Business Act (15
U.S.C. 645(a)).
(d) Effective Date.--This section shall apply to violations
occurring on or after August 10, 1984.
(e) Attorney General to Bring Action.--A civil action to
recover a civil penalty under this section shall be commenced
by the Attorney General.
(f) Burden of Proof.--In a civil action to recover a civil
penalty under this section, the Attorney General must establish
the right to recovery by a preponderance of the evidence.
(g) Administrative [Subpoenas] Investigations.--
(1) In general.--For the purpose of conducting a
civil investigation in contemplation of a civil
proceeding under this section, the Attorney General
may--
(A) administer oaths and affirmations;
(B) take evidence; and
[(C) by subpoena, summon witnesses and
require the production of any books, papers,
correspondence, memoranda, or other records
which the Attorney General deems relevant or
material to the inquiry. Such subpoena may
require the attendance of witnesses and the
production of any such records from any place
in the United States at any place in the United
States designated by the Attorney General.]
(C) summon witnesses and require the
production of any books, papers,
correspondence, memoranda, or other records
which the Attorney General deems relevant or
material to the inquiry, if the Attorney
General--
(i) requests a court order from a
court of competent jurisdiction for
such actions and offers specific and
articulable facts showing that there
are reasonable grounds to believe that
the information or testimony sought is
relevant and material for conducting an
investigation under this section; or
(ii) either personally or through
delegation no lower than the Deputy
Attorney General, issues and signs a
subpoena for such actions and such
subpoena is supported by specific and
articulable facts showing that there
are reasonable grounds to believe that
the information or testimony sought is
relevant for conducting an
investigation under this section.
(2) Procedures applicable.--The same procedures and
limitations as are provided with respect to civil
investigative demands in subsections (g), (h), and (j)
of section 1968 of title 18, United States Code, apply
with respect to a subpoena issued under this
subsection. Process required by such subsections to be
served upon the custodian shall be served on the
Attorney General. Failure to comply with an order of
the court to enforce such subpoena shall be punishable
as contempt.
(3) Limitation.--In the case of a subpoena for which
the return date is less than 5 days after the date of
service, no person shall be found in contempt for
failure to comply by the return date if such person
files a petition under paragraph (2) not later than 5
days after the date of service.
(h) Statute of Limitations.--A civil action under this
section may not be commenced later than 10 years after the
cause of action accrues.
* * * * * * *
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REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974
* * * * * * *
servicing of mortgage loans and administration of escrow accounts
Sec. 6. (a) Disclosure to Applicant Relating to Assignment,
Sale, or Transfer of Loan Servicing.--Each person who makes a
federally related mortgage loan shall disclose to each person
who applies for the loan, at the time of application for the
loan, whether the servicing of the loan may be assigned, sold,
or transferred to any other person at any time while the loan
is outstanding.
(b) Notice by Transferor or Loan Servicing at Time of
Transfer.--
(1) Notice requirement.--Each servicer of any
federally related mortgage loan shall notify the
borrower in writing of any assignment, sale, or
transfer of the servicing of the loan to any other
person.
(2) Time of notice.--
(A) In general.--Except as provided under
subparagraphs (B) and (C), the notice required
under paragraph (1) shall be made to the
borrower not less than 15 days before the
effective date of transfer of the servicing of
the mortgage loan (with respect to which such
notice is made).
(B) Exception for certain proceedings.--The
notice required under paragraph (1) shall be
made to the borrower not more than 30 days
after the effective date of assignment, sale,
or transfer of the servicing of the mortgage
loan (with respect to which such notice is
made) in any case in which the assignment,
sale, or transfer of the servicing of the
mortgage loan is preceded by--
(i) termination of the contract for
servicing the loan for cause;
(ii) commencement of proceedings for
bankruptcy of the servicer; or
(iii) commencement of proceedings by
the Federal Deposit Insurance
Corporation or the Resolution Trust
Corporation for conservatorship or
receivership of the servicer (or an
entity by which the servicer is owned
or controlled).
(C) Exception for notice provided at
closing.--The provisions of subparagraphs (A)
and (B) shall not apply to any assignment,
sale, or transfer of the servicing of any
mortgage loan if the person who makes the loan
provides to the borrower, at settlement (with
respect to the property for which the mortgage
loan is made), written notice under paragraph
(3) of such transfer.
(3) Contents of notice.--The notice required under
paragraph (1) shall include the following information:
(A) The effective date of transfer of the
servicing described in such paragraph.
(B) The name, address, and toll-free or
collect call telephone number of the transferee
servicer.
(C) A toll-free or collect call telephone
number for (i) an individual employed by the
transferor servicer, or (ii) the department of
the transferor servicer, that can be contacted
by the borrower to answer inquiries relating to
the transfer of servicing.
(D) The name and toll-free or collect call
telephone number for (i) an individual employed
by the transferee servicer, or (ii) the
department of the transferee servicer, that can
be contacted by the borrower to answer
inquiries relating to the transfer of
servicing.
(E) The date on which the transferor servicer
who is servicing the mortgage loan before the
assignment, sale, or transfer will cease to
accept payments relating to the loan and the
date on which the transferee servicer will
begin to accept such payments.
(F) Any information concerning the effect the
transfer may have, if any, on the terms of or
the continued availability of mortgage life or
disability insurance or any other type of
optional insurance and what action, if any, the
borrower must take to maintain coverage.
(G) A statement that the assignment, sale, or
transfer of the servicing of the mortgage loan
does not affect any term or condition of the
security instruments other than terms directly
related to the servicing of such loan.
(c) Notice by Transferee of Loan Servicing at Time of
Transfer.--
(1) Notice requirement.--Each transferee servicer to
whom the servicing of any federally related mortgage
loan is assigned, sold, or transferred shall notify the
borrower of any such assignment, sale, or transfer.
(2) Time of notice.--
(A) In general.--Except as provided in
subparagraphs (B) and (C), the notice required
under paragraph (1) shall be made to the
borrower not more than 15 days after the
effective date of transfer of the servicing of
the mortgage loan (with respect to which such
notice is made).
(B) Exception for certain proceedings.--The
notice required under paragraph (1) shall be
made to the borrower not more than 30 days
after the effective date of assignment, sale,
or transfer of the servicing of the mortgage
loan (with respect to which such notice is
made) in any case in which the assignment,
sale, or transfer of the servicing of the
mortgage loan is preceded by--
(i) termination of the contract for
servicing the loan for cause;
(ii) commencement of proceedings for
bankruptcy of the servicer; or
(iii) commencement of proceedings by
the Federal Deposit Insurance
Corporation or the Resolution Trust
Corporation for conservatorship or
receivership of the servicer (or an
entity by which the servicer is owned
or controlled).
(C) Exception for notice provided at
closing.--The provisions of subparagraphs (A)
and (B) shall not apply to any assignment,
sale, or transfer of the servicing of any
mortgage loan if the person who makes the loan
provides to the borrower, at settlement (with
respect to the property for which the mortgage
loan is made), written notice under paragraph
(3) of such transfer.
(3) Contents of notice.--Any notice required under
paragraph (1) shall include the information described
in subsection (b)(3).
(d) Treatment of Loan Payments During Transfer Period.--
During the 60-day period beginning on the effective date of
transfer of the servicing of any federally related mortgage
loan, a late fee may not be imposed on the borrower with
respect to any payment on such loan and no such payment may be
treated as late for any other purposes, if the payment is
received by the transferor servicer (rather than the transferee
servicer who should properly receive payment) before the due
date applicable to such payment.
(e) Duty of Loan Servicer To Respond to Borrower Inquiries.--
(1) Notice of receipt of inquiry.--
(A) In general.--If any servicer of a
federally related mortgage loan receives a
qualified written request from the borrower (or
an agent of the borrower) for information
relating to the servicing of such loan, the
servicer shall provide a written response
acknowledging receipt of the correspondence
within 5 days (excluding legal public holidays,
Saturdays, and Sundays) unless the action
requested is taken within such period.
(B) Qualified written request.--For purposes
of this subsection, a qualified written request
shall be a written correspondence, other than
notice on a payment coupon or other payment
medium supplied by the servicer, that--
(i) includes, or otherwise enables
the servicer to identify, the name and
account of the borrower; and
(ii) includes a statement of the
reasons for the belief of the borrower,
to the extent applicable, that the
account is in error or provides
sufficient detail to the servicer
regarding other information sought by
the borrower.
(2) Action with respect to inquiry.--Not later than
30 days (excluding legal public holidays, Saturdays,
and Sundays) after the receipt from any borrower of any
qualified written request under paragraph (1) and, if
applicable, before taking any action with respect to
the inquiry of the borrower, the servicer shall--
(A) make appropriate corrections in the
account of the borrower, including the
crediting of any late charges or penalties, and
transmit to the borrower a written notification
of such correction (which shall include the
name and telephone number of a representative
of the servicer who can provide assistance to
the borrower);
(B) after conducting an investigation,
provide the borrower with a written explanation
or clarification that includes--
(i) to the extent applicable, a
statement of the reasons for which the
servicer believes the account of the
borrower is correct as determined by
the servicer; and
(ii) the name and telephone number of
an individual employed by, or the
office or department of, the servicer
who can provide assistance to the
borrower; or
(C) after conducting an investigation,
provide the borrower with a written explanation
or clarification that includes--
(i) information requested by the
borrower or an explanation of why the
information requested is unavailable or
cannot be obtained by the servicer; and
(ii) the name and telephone number of
an individual employed by, or the
office or department of, the servicer
who can provide assistance to the
borrower.
(3) Protection of credit rating.--During the 60-day
period beginning on the date of the servicer's receipt
from any borrower of a qualified written request
relating to a dispute regarding the borrower's
payments, a servicer may not provide information
regarding any overdue payment, owed by such borrower
and relating to such period or qualified written
request, to any consumer reporting agency (as such term
is defined under section 603 of the Fair Credit
Reporting Act).
(4) Limited extension of response time.--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.
(f) Damages and Costs.--Whoever fails to comply with any
provision of this section shall be liable to the borrower for
each such failure in the following amounts:
(1) Individuals.--In the case of any action by an
individual, an amount equal to the sum of--
(A) any actual damages to the borrower as a
result of the failure; and
(B) any additional damages, as the court may
allow, in the case of a pattern or practice of
noncompliance with the requirements of this
section, in an amount not to exceed $2,000.
(2) Class actions.--In the case of a class action, an
amount equal to the sum of--
(A) any actual damages to each of the
borrowers in the class as a result of the
failure; and
(B) any additional damages, as the court may
allow, in the case of a pattern or practice of
noncompliance with the requirements of this
section, in an amount not greater than $2,000
for each member of the class, except that the
total amount of damages under this subparagraph
in any class action may not exceed the lesser
of--
(i) $1,000,000; or
(ii) 1 percent of the net worth of
the servicer.
(3) Costs.--In addition to the amounts under
paragraph (1) or (2), in the case of any successful
action under this section, the costs of the action,
together with any attorneys fees incurred in connection
with such action as the court may determine to be
reasonable under the circumstances.
(4) Nonliability.--A transferor or transferee
servicer shall not be liable under this subsection for
any failure to comply with any requirement under this
section if, within 60 days after discovering an error
(whether pursuant to a final written examination report
or the servicer's own procedures) and before the
commencement of an action under this subsection and the
receipt of written notice of the error from the
borrower, the servicer notifies the person concerned of
the error and makes whatever adjustments are necessary
in the appropriate account to ensure that the person
will not be required to pay an amount in excess of any
amount that the person otherwise would have paid.
(g) Administration of Escrow Accounts.--If the terms of any
federally related mortgage loan require the borrower to make
payments to the servicer of the loan for deposit into an escrow
account for the purpose of assuring payment of taxes, insurance
premiums, and other charges with respect to the property, the
servicer shall make payments from the escrow account for such
taxes, insurance premiums, and other charges in a timely manner
as such payments become due. 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.
(h) Preemption of Conflicting State Laws.--Notwithstanding
any provision of any law or regulation of any State, a person
who makes a federally related mortgage loan or a servicer shall
be considered to have complied with the provisions of any such
State law or regulation requiring notice to a borrower at the
time of application for a loan or transfer of the servicing of
a loan if such person or servicer complies with the
requirements under this section regarding timing, content, and
procedures for notification of the borrower.
(i) Definitions.--For purposes of this section:
(1) Effective date of transfer.--The term ``effective
date of transfer'' means the date on which the mortgage
payment of a borrower is first due to the transferee
servicer of a mortgage loan pursuant to the assignment,
sale, or transfer of the servicing of the mortgage
loan.
(2) Servicer.--The term ``servicer'' means the person
responsible for servicing of a loan (including the
person who makes or holds a loan if such person also
services the loan). The term does not include--
(A) the Federal Deposit Insurance Corporation
or the Resolution Trust Corporation, in
connection with assets acquired, assigned,
sold, or transferred pursuant to section 13(c)
of the Federal Deposit Insurance Act or as
receiver or conservator of an insured
depository institution; and
(B) the Government National Mortgage
Association, the Federal National Mortgage
Association, the Federal Home Loan Mortgage
Corporation, the Resolution Trust Corporation,
or the Federal Deposit Insurance Corporation,
in any case in which the assignment, sale, or
transfer of the servicing of the mortgage loan
is preceded by--
(i) termination of the contract for
servicing the loan for cause;
(ii) commencement of proceedings for
bankruptcy of the servicer; or
(iii) commencement of proceedings by
the Federal Deposit Insurance
Corporation or the Resolution Trust
Corporation for conservatorship or
receivership of the servicer (or an
entity by which the servicer is owned
or controlled).
(3) Servicing.--The term ``servicing'' means
receiving any scheduled periodic payments from a
borrower pursuant to the terms of any loan, including
amounts for escrow accounts described in section 10,
and making the payments of principal and interest and
such other payments with respect to the amounts
received from the borrower as may be required pursuant
to the terms of the loan.
(j) Transition.--
(1) Originator liability.--A person who makes a
federally related mortgage loan shall not be liable to
a borrower because of a failure of such person to
comply with subsection (a) with respect to an
application for a loan made by the borrower before the
regulations referred to in paragraph (3) take effect.
(2) Servicer liability.--A servicer of a federally
related mortgage loan shall not be liable to a borrower
because of a failure of the servicer to perform any
duty under subsection (b), (c), (d), or (e) that arises
before the regulations referred to in paragraph (3)
take effect.
(3) Regulations and effective date.--The Bureau shall
establish any requirements necessary to carry out this
section. Such regulations shall include the model
disclosure statement required under subsection (a)(2).
(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) 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 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) 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) 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.--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.
(n) Small Servicer Exemption.--The Bureau shall, by
regulation, provide exemptions to, or adjustments for, the
provisions of this section for a servicer that annually
services 20,000 or fewer mortgage loans, in order to reduce
regulatory burdens while appropriately balancing consumer
protections.
* * * * * * *
----------
S.A.F.E. MORTGAGE LICENSING ACT OF 2008
* * * * * * *
DIVISION A--HOUSING FINANCE REFORM
* * * * * * *
TITLE V--S.A.F.E. MORTGAGE LICENSING ACT
* * * * * * *
SEC. 1513. 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] are
applying for licensing or registration using the Nationwide
Mortgage Licensing System and Registry.
* * * * * * *
SEC. 1518. EMPLOYMENT TRANSITION OF LOAN ORIGINATORS.
(a) Temporary Authority to Originate Loans for Loan
Originators Moving From a Depository Institution to a Non-
depository Institution.--
(1) In general.--Upon employment by a State-licensed
mortgage company, an individual who is a registered
loan originator shall be deemed to have temporary
authority to act as a loan originator in an application
State for the period described in paragraph (2) if the
individual--
(A) has not had an application for a loan
originator license denied, or had such a
license revoked or suspended in any
governmental jurisdiction;
(B) has not been subject to or served with a
cease and desist order in any governmental
jurisdiction or as described in section
1514(c);
(C) has not been convicted of a felony that
would preclude licensure under the law of the
application State;
(D) has submitted an application to be a
State-licensed loan originator in the
application State; and
(E) was registered in the Nationwide Mortgage
Licensing System and Registry as a loan
originator during the 12-month period preceding
the date of submission of the information
required under section 1505(a).
(2) Period.--The period described in paragraph (1)
shall begin on the date that the individual submits the
information required under section 1505(a) and shall
end on the earliest of--
(A) the date that the individual withdraws
the application to be a State-licensed loan
originator in the application State;
(B) the date that the application State
denies, or issues a notice of intent to deny,
the application;
(C) the date that the application State
grants a State license; or
(D) the date that is 120 days after the date
on which the individual submits the
application, if the application is listed on
the Nationwide Mortgage Licensing System and
Registry as incomplete.
(b) Temporary Authority to Originate Loans for State-licensed
Loan Originators Moving Interstate.--
(1) In general.--A State-licensed loan originator
shall be deemed to have temporary authority to act as a
loan originator in an application State for the period
described in paragraph (2) if the State-licensed loan
originator--
(A) meets the requirements of subparagraphs
(A), (B), (C), and (D) of subsection (a)(1);
(B) is employed by a State-licensed mortgage
company in the application State; and
(C) was licensed in a State that is not the
application State during the 30-day period
preceding the date of submission of the
information required under section 1505(a) in
connection with the application submitted to
the application State.
(2) Period.--The period described in paragraph (1)
shall begin on the date that the State-licensed loan
originator submits the information required under
section 1505(a) in connection with the application
submitted to the application State and end on the
earliest of--
(A) the date that the State-licensed loan
originator withdraws the application to be a
State-licensed loan originator in the
application State;
(B) the date that the application State
denies, or issues a notice of intent to deny,
the application;
(C) the date that the application State
grants a State license; or
(D) the date that is 120 days after the date
on which the State-licensed loan originator
submits the application, if the application is
listed on the Nationwide Mortgage Licensing
System and Registry as incomplete.
(c) Applicability.--
(1) Any person employing an individual who is deemed
to have temporary authority to act as a loan originator
in an application State pursuant to this section shall
be subject to the requirements of this title and to
applicable State law to the same extent as if such
individual was a State-licensed loan originator
licensed by the application State.
(2) Any individual who is deemed to have temporary
authority to act as a loan originator in an application
State pursuant to this section and who engages in
residential mortgage loan origination activities shall
be subject to the requirements of this title and to
applicable State law to the same extent as if such
individual was a State-licensed loan originator
licensed by the application State.
(d) Definitions.--In this section, the following definitions
shall apply:
(1) State-licensed mortgage company.--The term
``State-licensed mortgage company'' means an entity
licensed or registered under the law of any State to
engage in residential mortgage loan origination and
processing activities.
(2) Application state.--The term ``application
State'' means a State in which a registered loan
originator or a State-licensed loan originator seeks to
be licensed.
----------
HOUSING AND ECONOMIC RECOVERY ACT OF 2008
SEC. 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Housing and
Economic Recovery Act of 2008''.
(b) Table of Content.--The table of contents for this Act is
as follows:
* * * * * * *
DIVISION A--HOUSING FINANCE REFORM
* * * * * * *
TITLE V--S.A.F.E. MORTGAGE LICENSING ACT
* * * * * * *
Sec. 1518. Employment transition of loan originators.
----------
EQUAL CREDIT OPPORTUNITY ACT
* * * * * * *
TITLE VII--EQUAL CREDIT OPPORTUNITY
Sec. 701. Prohibited discrimination; reasons for adverse action
(a) It shall be unlawful for any creditor to discriminate
against any applicant, with respect to any aspect of a credit
transaction--
(1) on the basis of race, color, religion, national
origin, sex or marital status, or age (provided the
applicant has the capacity to contract);
(2) because all or part of the applicant's income
derives from any public assistance program; or
(3) because the applicant has in good faith exercised
any right under the Consumer Credit Protection Act.
(b) It shall not constitute discrimination for purposes of
this title for a creditor--
(1) to make an inquiry of marital status if such
inquiry is for the purpose of ascertaining the
creditor's rights and remedies applicable to the
particular extension of credit and not to discriminate
in a determination of credit-worthiness;
(2) to make an inquiry of the applicant's age or of
whether the applicant's income derives from any public
assistance program if such inquiry is for the purpose
of determining the amount and probable continuance of
income levels, credit history, or other pertinent
element of credit-worthiness as provided in regulations
of the Board;
(3) to use any empirically derived credit system
which considers age if such system is demonstrably and
statistically sound in accordance with regulations of
the Bureau, except that in the operation of such system
the age of an elderly applicant may not be assigned a
negative factor or value; or
(4) to make an inquiry or to consider the age of an
elderly applicant when the age of such applicant is to
be used by the creditor in the extension of credit in
favor of such applicant[; or].
[(5) to make an inquiry under section 704B, in
accordance with the requirements of that section.]
(c) It is not a violation of this section for a creditor to
refuse to extend credit offered pursuant to--
(1) any credit assistance program expressly
authorized by law for an economically disadvantaged
class of persons;
(2) any credit assistance program administered by a
nonprofit organization for its members or an
economically disadvantaged class of persons; or
(3) any special purpose credit program offered by a
profit-making organization to meet special social needs
which meets standards prescribed in regulations by the
Board;
if such refusal is required by or made pursuant to such
program.
(d)(1) Within thirty days (or such longer reasonable time as
specified in regulations of the Bureau for any class of credit
transaction) after receipt of a completed application for
credit, a creditor shall notify the applicant of its action on
the application.
(2) Each applicant against whom adverse action is taken shall
be entitled to a statement of reasons for such action from the
creditor. A creditor satisfies this obligation by--
(A) providing statements of reasons in writing as a
matter of course to applicants against whom adverse
action is taken; or
(B) giving written notification of adverse action
which discloses (i) the applicant's right to a
statement of reasons within thirty days after receipt
by the creditor of a request made within sixty days
after such notification, and (ii) the identity of the
person or office from which such statement may be
obtained. Such statement may be given orally, if the
written notification advises the applicant of his right
to have the statement of reasons confirmed in writing
on written request.
(3) A statement of reasons meets the requirements of this
section only if it contains the specific reasons for the
adverse action taken.
(4) Where a creditor has been requested by a third party to
make a specific extension of credit directly or indirectly to
an applicant, the notification and statement of reasons
required by this subsection may be made directly by such
creditor, or indirectly through the third party, provided in
either case that the identity of the creditor is disclosed.
(5) The requirements of paragraphs (2), (3), or (4) may be
satisfied by verbal statements or notifications in the case of
any creditor who did not act on more than one hundred and fifty
applications during the calendar year preceding the calendar
year in which the adverse action is taken, as determined under
regulations of the Board.
(6) For purposes of this subsection, the term ``adverse
action'' means a denial or revocation of credit, a change in
the terms of an existing credit arrangement, or a refusal to
grant credit in substantially the amount or on substantially
the terms requested. Such term does not include a refusal to
extend additional credit under an existing credit arrangement
where the applicant is delinquent or otherwise in default, or
where such additional credit would exceed a previously
established credit limit.
(e) Copies Furnished to Applicants.--
(1) In general.--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.
(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. 704B. 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, 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) 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 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 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 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 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) 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).
[(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.]
* * * * * * *
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CONSUMER CREDIT PROTECTION ACT
* * * * * * *
TITLE VII--EQUAL CREDIT OPPORTUNITY
Sec.
701. Prohibited discrimination.
* * * * * * *
[704B. Small business loan data collection.]
* * * * * * *
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HOME MORTGAGE DISCLOSURE ACT OF 1975
TITLE III--HOME MORTGAGE DISCLOSURE
* * * * * * *
maintenance of records and public disclosure
Sec. 304. (a)(1) Each depository institution which has a home
office or branch office located within a primary metropolitan
statistical area, metropolitan statistical area, or
consolidated metropolitan statistical area that is not
comprised of designated primary metropolitan statistical areas,
as defined by the Department of Commerce shall compile and make
available, in accordance with regulations of the Board, to the
public for inspection and copying at the home office, and at
least one branch office within each primary metropolitan
statistical area, metropolitan statistical area, or
consolidated metropolitan statistical area that is not
comprised of designated primary metropolitan statistical areas
in which the depository institution has an office the number
and total dollar amount of mortgage loans which were (A)
originated (or for which the institution received completed
applications), or (B) purchased by that institution during each
fiscal year (beginning with the last full fiscal year of that
institution which immediately preceded the effective date of
this title).
(2) The information required to be maintained and made
available under paragraph (1) shall also be itemized in order
to clearly and conspicuously disclose the following:
(A) The number and dollar amount for each item
referred to in paragraph (1), by census tracts for
mortgage loans secured by property located within any
county with a population of more than 30,000, within
that primary metropolitan statistical area,
metropolitan statistical area, or consolidated
metropolitan statistical area that is not comprised of
designated primary metropolitan statistical areas,
otherwise, by county, for mortgage loans secured by
property located within any other county within that
standard metropolitan statistical area.
(B) The number and dollar amount for each item
referred to in paragraph (1) for all such mortgage
loans which are secured by property located outside
that primary metropolitan statistical area,
metropolitan statistical area, or consolidated
metropolitan statistical area that is not comprised of
designated primary metropolitan statistical areas.
For the purpose of this paragraph, a depository institution
which maintains offices in more than one primary metropolitan
statistical area, metropolitan statistical area, or
consolidated metropolitan statistical area that is not
comprised of designated primary metropolitan statistical areas
shall be required to make the information required by this
paragraph available at any such office only to the extent that
such information relates to mortgage loans which were
originated or purchased (or for which completed applications
were received) by an office of that depository institution
located in the primary metropolitan statistical area,
metropolitan statistical area, or consolidated metropolitan
statistical area that is not comprised of designated primary
metropolitan statistical areas in which the office making such
information available is located. For purposes of this
paragraph, other lending institutions shall be deemed to have a
home office or branch office within a primary metropolitan
statistical area, metropolitan statistical area, or
consolidated metropolitan statistical area that is not
comprised of designated primary metropolitan statistical areas
if such institutions have originated or purchased or received
completed applications for at least 5 mortgage loans in such
area in the preceding calendar year.
(b) Any item of information relating to mortgage loans
required to be maintained under subsection (a) shall be further
itemized in order to disclose for each such item--
(1) the number and dollar amount of mortgage loans
which are insured under title II of the National
Housing Act or under title V of the Housing Act of 1949
or which are guaranteed under chapter 37 of title 38,
United States Code;
(2) the number and dollar amount of mortgage loans
made to mortgagors who did not, at the time of
execution of the mortgage, intend to reside in the
property securing the mortgage loan;
(3) the number and dollar amount of home improvement
loans;
(4) the number and dollar amount of mortgage loans
and completed applications involving mortgagors or
mortgage applicants grouped according to census tract,
income level, racial characteristics, age, and gender;
(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;
(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.
(c) Any information required to be compiled and made
available under this section, other than loan application
register information under subsection (j), shall be maintained
and made available for a period of five years after the close
of the first year during which such information is required to
be maintained and made available.
(d) Notwithstanding the provisions of subsection (a)(1), data
required to be disclosed under this section for 1980 and
thereafter shall be disclosed for each calendar year. Any
depository institution which is required to make disclosures
under this section but which has been making disclosures on
some basis other than a calendar year basis shall make
available a separate disclosure statement containing data for
any period prior to calendar year 1980 which is not covered by
the last full year report prior to the 1980 calendar year
report.
(e) Subject to subsection (h), the Bureau shall prescribe a
standard format for the disclosures required under this
section.
(f) The Federal Financial Institutions Examination Council,
in consultation with the Secretary, shall implement a system to
facilitate access to data required to be disclosed under this
section. Such system shall include arrangements for a central
depository of data in each primary metropolitan statistical
area, metropolitan statistical area, or consolidated
metropolitan statistical area that is not comprised of
designated primary metropolitan statistical areas. Disclosure
statements shall be made available to the public for inspection
and copying at such central depository of data for all
depository institutions which are required to disclose
information under this section (or which are exempted pursuant
to section 306(b)) and which have a home office or branch
office within such primary metropolitan statistical area,
metropolitan statistical area, or consolidated metropolitan
statistical area that is not comprised of designated primary
metropolitan statistical areas.
(g) The requirements of subsections (a) and (b) shall not
apply with respect to mortgage loans that are--
(1) made (or for which completed applications are
received) by any mortgage banking subsidiary of a bank
holding company or savings and loan holding company or
by any savings and loan service corporation that
originates or purchases mortgage loans; and
(2) approved (or for which completed applications are
received) by the Secretary for insurance under title I
or II of the National Housing Act.
(h) Submission to Agencies.--
(1) In 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 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 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.
(i) Exemptions.--
(1) In general.--With respect to a depository
institution, the requirements of subsections (a) and
(b) shall not apply--
(A) with respect to closed-end mortgage
loans, if such depository institution
originated less than 100 closed-end mortgage
loans in each of the two preceding calendar
years; and
(B) with respect to open-end lines of credit,
if such depository institution originated less
than 200 open-end lines of credit in each of
the two preceding calendar years.
[(i)] (2) Exemption from certain disclosure
requirements.--The requirements of subsections (b)(4),
(b)(5), and (b)(6) shall not apply with respect to any
depository institution described in section [303(2)(A)]
303(3)(A) which has total assets, as of the most recent
full fiscal year of such institution, of $30,000,000 or
less.
(j) Loan Application Register Information.--
(1) In general.--In addition to the information
required to be disclosed under subsections (a) and (b),
any depository institution which is required to make
disclosures under this section shall make available to
the public, upon request, loan application register
information (as defined by the Bureau by regulation) in
the form required under regulations prescribed by the
Board.
(2) Format of disclosure.--
(A) Unedited format.--Subject to subparagraph
(B), the loan application register information
described in paragraph (1) may be disclosed by
a depository institution without editing or
compilation and in such formats as the Bureau
may require.
(B) Protection of applicant's privacy
interest.--The Bureau shall require, by
regulation, such deletions as the Bureau may
determine to be appropriate to protect--
(i) any privacy interest of any
applicant, including the deletion of
the applicant's name and identification
number, the date of the application,
and the date of any determination by
the institution with respect to such
application; and
(ii) a depository institution from
liability under any Federal or State
privacy law.
(C) Census tract format encouraged.--It is
the sense of the Congress that a depository
institution should provide loan register
information under this section in a format
based on the census tract in which the property
is located.
(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
(4) Reasonable charge for information.--Any
depository institution which provides information under
this subsection may impose a reasonable fee for any
cost incurred in reproducing such information.
(5) Time of disclosure.--The disclosure of the loan
application register information described in paragraph
(1) for any year pursuant to a request under paragraph
(1) shall be made--
(A) in the case of a request made on or
before March 1 of the succeeding year, before
April 1 of the succeeding year; and
(B) in the case of a request made after March
1 of the succeeding year, before the end of the
30-day period beginning on the date the request
is made.
(6) Retention of information.--Notwithstanding
subsection (c), the loan application register
information described in paragraph (1) for any year
shall be maintained and made available, upon request,
for 3 years after the close of the 1st year during
which such information is required to be maintained and
made available.
(7) Minimizing compliance costs.--In prescribing
regulations under this subsection, the Bureau shall
make every effort to minimize the costs incurred by a
depository institution in complying with this
subsection and such regulations.
(k) Disclosure of Statements by Depository Institutions.--
(1) In general.--In accordance with procedures
established by the Bureau pursuant to this section, any
depository institution required to make disclosures
under this section--
(A) shall make a disclosure statement
available, upon request, to the public no later
than 3 business days after the institution
receives the statement from the Federal
Financial Institutions Examination Council; and
(B) may make such statement available on a
floppy disc which may be used with a personal
computer or in any other media which is not
prohibited under regulations prescribed by the
Board.
(2) Notice that data is subject to correction after
final review.--Any disclosure statement provided
pursuant to paragraph (1) shall be accompanied by a
clear and conspicuous notice that the statement is
subject to final review and revision, if necessary.
(3) Reasonable charge for information.--Any
depository institution which provides a disclosure
statement pursuant to paragraph (1) may impose a
reasonable fee for any cost incurred in providing or
reproducing such statement.
(l) Prompt Disclosures.--
(1) In general.--Any disclosure of information
pursuant to this section or section 310 shall be made
as promptly as possible.
(2) Maximum disclosure period.--
(A) 6- and 9-month maximum periods.--Except
as provided in subsections (j)(5) and (k)(1)
and regulations prescribed by the Bureau and
subject to subparagraph (B), any information
required to be disclosed for any year beginning
after December 31, 1992, under--
(i) this section shall be made
available to the public before
September 1 of the succeeding year; and
(ii) section 310 shall be made
available to the public before December
1 of the succeeding year.
(B) Shorter periods encouraged after 1994.--
With respect to disclosures of information
under this section or section 310 for any year
beginning after December 31, 1993, every effort
shall be made--
(i) to make information disclosed
under this section available to the
public before July 1 of the succeeding
year; and
(ii) to make information required to
be disclosed under section 310
available to the public before
September 1 of the succeeding year.
(3) Improved procedure.--The Federal Financial
Institutions Examination Council shall make such
changes in the system established pursuant to
subsection (f) as may be necessary to carry out the
requirements of this subsection.
(m) Opportunity To Reduce Compliance Burden.--
(1) In general.--
(A) Satisfaction of public availability
requirements.--A depository institution shall
be deemed to have satisfied the public
availability requirements of subsection (a) if
the institution compiles the information
required under that subsection at the home
office of the institution and provides notice
at the branch locations specified in subsection
(a) that such information is available from the
home office of the institution upon written
request.
(B) Provision of information upon request.--
Not later than 15 days after the receipt of a
written request for any information required to
be compiled under subsection (a), the home
office of the depository institution receiving
the request shall provide the information
pertinent to the location of the branch in
question to the person requesting the
information.
(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.
(n) Timing of Certain Disclosures.--The 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.
enforcement
Sec. 305. (a) The Bureau shall prescribe such regulations as
may be necessary to carry out the purposes of this title. These
regulations may contain such classifications, differentiations,
or other provisions, and may provide for such adjustments and
exceptions for any class of transactions, as in the judgment of
the Bureau are necessary and proper to effectuate the purposes
of this title, and prevent circumvention or evasion thereof, or
to facilitate compliance therewith.
(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).
(c) For the purpose of the exercise by any agency referred to
in subsection (b) of its powers under any Act referred to in
that subsection, a violation of any requirement imposed under
this title shall be deemed to be a violation of a requirement
imposed under that Act. In addition to its powers under any
provision of law specifically referred to in subsection (b),
each of the agencies referred to in that subsection may
exercise, for the purpose of enforcing compliance with any
requirement imposed under this title, any other authority
conferred on it by law.
(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.
* * * * * * *
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HOME OWNERS' LOAN ACT
* * * * * * *
SEC. 4. SUPERVISION OF SAVINGS ASSOCIATIONS.
(a) Savings Associations.--
(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.
(3) Safe and sound housing credit to be encouraged.--
The Comptroller and the Corporation shall exercise all
powers granted to the Comptroller and the Corporation
under this Act so as to encourage savings associations
to provide credit for housing safely and soundly.
(b) Accounting and Disclosure.--
(1) In general.--The Comptroller shall, by
regulation, prescribe uniform accounting and disclosure
standards for savings associations, to be used in
determining savings associations' compliance with all
applicable regulations.
(2) Specific requirements for accounting standards.--
Subject to section 5(t), the uniform accounting
standards prescribed under paragraph (1) shall--
(A) incorporate generally accepted accounting
principles to the same degree that such
principles are used to determine compliance
with regulations prescribed by the Federal
banking agencies; and
(B) allow for no deviation from full
compliance with such standards as are in effect
after December 31, 1993.
(3) Authority to prescribe more stringent accounting
standards.--The Comptroller may at any time prescribe
accounting standards more stringent than required under
paragraph (2) if the Comptroller determines that the
more stringent standards are necessary to ensure the
safe and sound operation of savings associations.
(c) Stringency of Standards.--The regulations of the
Comptroller and the policies of the Comptroller and the
Corporation governing the safe and sound operation of savings
associations, including regulations and policies governing
asset classification and appraisals, shall be no less stringent
than those established by the Comptroller for national banks.
(d) Investment of Certain Funds in Accounts of Savings
Associations.--The savings accounts and share accounts of
savings associations insured by the Corporation shall be lawful
investments and may be accepted as security for all public
funds of the United States, fiduciary and trust funds under the
authority or control of the United States or any officer
thereof, and for the funds of all corporations organized under
the laws of the United States (subject to any regulatory
authority otherwise applicable), regardless of any limitation
of law upon the investment of any such funds or upon the
acceptance of security for the investment or deposit of any of
such funds.
(e) Participation by Savings Associations in Lotteries and
Related Activities.--
(1) Participation prohibited.--No savings association
may--
(A) deal in lottery tickets;
(B) deal in bets used as a means or
substitute for participation in a lottery;
(C) announce, advertise, or publicize the
existence of any lottery; or
(D) announce, advertise, or publicize the
existence or identity of any participant or
winner, as such, in a lottery.
(2) Use of facilities prohibited.--No savings
association may permit--
(A) the use of any part of any of its own
offices by any person for any purpose forbidden
to the institution under paragraph (1); or
(B) direct access by the public from any of
its own offices to any premises used by any
person for any purpose forbidden to the
institution under paragraph (1).
(3) Definitions.--For purposes of this subsection--
(A) Deal in.--The term ``deal in'' includes
making, taking, buying, selling, redeeming, or
collecting.
(B) Lottery.--The term ``lottery'' includes
any arrangement, other than a savings promotion
raffle, under which--
(i) 3 or more persons (hereafter in
this subparagraph referred to as the
``participants'') advance money or
credit to another in exchange for the
possibility or expectation that 1 or
more but not all of the participants
(hereafter in this paragraph referred
to as the ``winners'') will receive by
reason of those participants' advances
more than the amounts those
participants have advanced; and
(ii) the identity of the winners is
determined by any means which
includes--
(I) a random selection;
(II) a game, race, or
contest; or
(III) any record or
tabulation of the result of 1
or more events in which any
participant has no interest
except for the bearing that
event has on the possibility
that the participant may become
a winner.
(C) Lottery ticket.--The term ``lottery
ticket'' includes any right, privilege, or
possibility (and any ticket, receipt, record,
or other evidence of any such right, privilege,
or possibility) of becoming a winner in a
lottery.
(D) Savings promotion raffle.--The term
``savings promotion raffle'' means a contest in
which the sole consideration required for a
chance of winning designated prizes is obtained
by the deposit of a specified amount of money
in a savings account or other savings program,
where each ticket or entry has an equal chance
of being drawn, such contest being subject to
regulations that may from time to time be
promulgated by the appropriate prudential
regulator (as defined in section 1002 of the
Consumer Financial Protection Act of 2010 (12
U.S.C. 5481)).
(4) Exception for state lotteries.--Paragraphs (1)
and (2) shall not apply with respect to any savings
association accepting funds from, or performing any
lawful services for, any State operating a lottery, or
any officer or employee of such a State who is charged
with administering the lottery.
(5) Regulations.--The Comptroller shall prescribe
such regulations as may be necessary to provide for
enforcement of this subsection and to prevent any
evasion of any provision of this subsection.
(f) Federally Related Mortgage Loan Disclosures.--A savings
association may not make a federally related mortgage loan to
an agent, trustee, nominee, or other person acting in a
fiduciary capacity without requiring that the identity of the
person receiving the beneficial interest of such loan shall at
all times be revealed to the savings association. At the
request of the appropriate Federal banking agency, the savings
association shall report to the appropriate Federal banking
agency the identity of such person and the nature and amount of
the loan.
(g) Preemption of State Usury Laws.--(1) Notwithstanding any
State law, a savings association may charge interest on any
extension of credit at a rate of not more than 1 percent in
excess of the discount rate on 90-day commercial paper in
effect at the Federal Reserve bank in the Federal Reserve
district in which such savings association is located or at the
rate allowed by the laws of the State in which such savings
association is located, whichever is greater. A loan that is
valid when made as to its maximum rate of interest in
accordance with this subsection shall remain valid with respect
to such rate regardless of whether the loan is subsequently
sold, assigned, or otherwise transferred to a third party, and
may be enforced by such third party notwithstanding any State
law to the contrary.
(2) If the rate prescribed in paragraph (1) exceeds the rate
such savings association would be permitted to charge in the
absence of this subsection, the receiving or charging a greater
rate of interest than that prescribed by paragraph (1), when
knowingly done, shall be deemed a forfeiture of the entire
interest which the extension of credit carries with it, or
which has been agreed to be paid thereon. If such greater rate
of interest has been paid, the person who paid it may recover,
in a civil action commenced in a court of appropriate
jurisdiction not later than 2 years after the date of such
payment, an amount equal to twice the amount of the interest
paid from the savings association taking or receiving such
interest.
(h) Form and Maturity of Securities.--No savings association
shall--
(1) issue securities which guarantee a definite
maturity except with the specific approval of the
appropriate Federal banking agency, or
(2) issue any securities the form of which has not
been approved by the appropriate Federal banking
agency.
* * * * * * *
----------
CONSUMER FINANCIAL PROTECTION ACT OF 2010
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
SEC. 1002. 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.
(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 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--
(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--
(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
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.
(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 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--
(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
(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. 1013. 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;
(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. 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.--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.--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.
(C) 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.--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.--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) 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.
(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
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) 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.--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;
(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;
(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.--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.--Before the end of the 180-day
period beginning on the designated transfer date, the
Director shall 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) 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).
(h) Application of FACA.--Notwithstanding any provision of
the Federal Advisory Committee Act (5 U.S.C. App.), such Act
shall apply to each advisory committee of the Bureau and each
subcommittee of such an advisory committee.
* * * * * * *
SEC. 1016. 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--
(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] and orders 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. [FUNDING; PENALTIES AND FINES.] BUDGET, FINANCIAL
MANAGEMENT, AND AUDIT._
(a) Transfer of Funds From Board Of Governors.--
[(1) In general.--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 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 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)] (1) 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 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)] (2) Audit of the bureau.--
(A) In general.--The Comptroller 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 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.--
[(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)] (b) 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.
(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)] (c) 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.]
(1) Authorization of appropriations.--There is
authorized to be appropriated to the Bureau for each of
fiscal years 2018 and 2019 an amount equal to the
aggregate amount of funds transferred by the Board of
Governors to the Bureau during fiscal year 2015.
[(4)] (2) 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.
* * * * * * *
Subtitle B--General Powers of the Bureau
SEC. 1021. 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 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. 1024. [SUPERVISION OF] AUTHORITY WITH RESPECT TO CERTAIN
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)] as of the date of the enactment
of the Financial CHOICE Act of 2017;
(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; or
(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 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 shall issue
its initial rule not later than 1 year after the
designated transfer date.]
[(3)] (2) 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 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 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, the State bank regulatory authorities, and
the State agencies that licence, supervise, or examine
the offering of consumer financial products or
services, including establishing their respective
schedules for examining persons described in subsection
(a)(1) and requirements regarding reports to be
submitted by such persons. The sharing of information
with such regulators, authorities, and agencies shall
not be construed as waiving, destroying, or otherwise
affecting any privilege or confidentiality such person
may claim with respect to such information under
Federal or State law as to any person or entity other
than such Bureau, agency, supervisor, or authority.
[(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) 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.
[(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)] (b) 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 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)] (c) 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 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)] (d) Service Providers.--A service provider to a person
described in subsection (a)(1) shall be subject to the
rulemaking and enforcement, but not supervisory, 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 [conducting any examination or requiring any
report from a service provider subject to this subsection]
carrying out any authority pursuant to this subsection with
respect to a service provider, the Bureau shall coordinate with
the appropriate prudential regulator, as applicable.
[(f)] (e) 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. SUPERVISION OF VERY LARGE BANKS, SAVINGS ASSOCIATIONS, AND
CREDIT UNIONS.
[(a) Scope of Coverage.--This section 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) Supervision.--
[(1) 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 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 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). 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) 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
[(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 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) 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
[(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) 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) 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) 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. OTHER BANKS, SAVINGS ASSOCIATIONS, AND CREDIT UNIONS.
[(a) Scope of Coverage.--This section 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.]
(a) Scope of Coverage.--This section shall apply to any
covered person that is an insured depository institution or an
insured credit union.
(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 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) 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)] (c) 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 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 a
recommendation under subparagraph (A), the
prudential regulator shall provide a written
response to the Bureau not later than 60 days
thereafter.
(3) Very large institutions.--
(A) Primary enforcement authority.--
Notwithstanding paragraph (1), 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 an insured
depository institution or insured credit union,
if such depository institution or credit union
has total assets of more than $10,000,000,000,
and any affiliate thereof.
(B) 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 subparagraph (A), as the Bureau is
authorized to do by that Federal consumer
financial law.
(C) Backup enforcement authority.--If the
Bureau does not, before the end of the 120-day
period beginning on the date on which the
Bureau receives a recommendation under
subparagraph (B), initiate an enforcement
proceeding, the other agency referred to in
subparagraph (B) may initiate an enforcement
proceeding.
[(e)] (d) Service Providers.--A service provider to a
substantial number of persons described in subsection (a), or
to any person described under subsection (c)(3)(A), shall be
subject to the authority of the Bureau under [section 1025]
this section to the same 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] In carrying out any authority
pursuant to this subsection with respect to a service provider,
the Bureau shall coordinate with the appropriate prudential
regulator.
SEC. 1027. 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
(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) 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 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.--
(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
(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.
(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 respect to the
provision of services relating to any
specified plan or arrangement.
(ii) Agency response.--In response 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) 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, 529A, 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 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. 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.--
(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)] section 1024(b)(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.
(t) No Authority to Regulate Small-dollar Credit.--The Bureau
may not exercise any rulemaking, enforcement, or other
authority with respect to payday loans, vehicle title loans, or
other similar loans.
[SEC. 1028. 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
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 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.]
* * * * * * *
Subtitle C--Specific Bureau Authorities
[SEC. 1031. 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
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. 1034. RESPONSE TO CONSUMER COMPLAINTS AND INQUIRIES.
(a) 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.
[(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 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)] (b) Agreements With Other Agencies.--The Bureau 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. 1036. PROHIBITED ACTS.
(a) In General.--It shall be unlawful for--
(1) any covered person or service [provider--]
[(A) to offer] provider 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
(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.
* * * * * * *
Subtitle E--Enforcement Powers
* * * * * * *
SEC. 1053. 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] sections 1024 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 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.
(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 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 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. 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 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 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--
(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. LITIGATION AUTHORITY.
(a) In General.--If any person violates a Federal consumer
financial law, the Bureau may, subject to [sections 1024, 1025,
and 1026] sections 1024 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 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 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) 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.
* * * * * * *
Subtitle F--Transfer of Functions and Personnel; Transitional
Provisions
SEC. 1061. TRANSFER OF CONSUMER FINANCIAL PROTECTION FUNCTIONS.
(a) Defined Terms.--For purposes of this subtitle--
(1) the term ``consumer financial protection
functions''[means--]
[(A) all] means 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.--
(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 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.]
[(E)] (D) 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.]
(1) Examination.--A transferor agency that is a
prudential regulator shall have 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).
(2) Enforcement.--
[(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)] (A) 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)] (B) 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. 1063. 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] sections
1024 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--
(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] sections 1024 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] sections 1024 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
(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] sections 1024 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] sections 1024 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 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] sections 1024 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) 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. 1067. 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;
(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. 1076. 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] determine, 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).
* * * * * * *
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OMNIBUS APPROPRIATIONS ACT, 2009
* * * * * * *
DIVISION D--FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS
ACT, 2009
* * * * * * *
TITLE VI--GENERAL PROVISIONS--THIS ACT
* * * * * * *
[Sec. 626. (a)(1) The 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.
[(b)
[(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.
[(2) The State shall serve written notice to the Bureau of
Consumer Financial Protection or the Commission, as appropriate
of any civil action under paragraph (1) at least 60 days prior
to initiating such civil action. The notice shall include a
copy of the complaint to be filed to initiate such civil
action, except that if it is not feasible for the State to
provide such prior notice, the State shall provide notice
immediately upon instituting such civil action.
[(3) Upon receiving the notice required by paragraph (2) and
subject to subtitle B of the Consumer Financial Protection Act
of 2010 the Bureau of Consumer Financial Protection or the
Commission, as appropriate may intervene in such civil action
and upon intervening--
[(A) be heard on all matters arising in such civil
action;
[(B) remove the action to the appropriate United
States district court; and
[(C) file petitions for appeal of a decision in such
civil action.
[(4) Nothing in this subsection shall prevent the attorney
general of a State from exercising the powers conferred on the
attorney general by the laws of such State to conduct
investigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production of
documentary and other evidence. Nothing in this section shall
prohibit the attorney general of a State, or other authorized
State officer, from proceeding in State or Federal court on the
basis of an alleged violation of any civil or criminal statute
of that State.
[(5) In a civil action brought under paragraph (1)--
[(A) the venue shall be a judicial district in which
the defendant is found, is an inhabitant, or transacts
business or wherever venue is proper under section 1391
of title 28, United States Code; and
[(B) process may be served without regard to the
territorial limits of the district or of the State in
which the civil action is instituted.
[(6) Whenever a civil action or an administrative action has
been instituted by or on behalf of the Bureau of Consumer
Financial Protection or the Commission for violation of any
provision of law or rule described in paragraph (1), no State
may, during the pendency of such action instituted by or on
behalf of the Bureau of Consumer Financial Protection or the
Commission, institute a civil action under that paragraph
against any defendant named in the complaint in such action for
violation of any law or rule as alleged in such complaint.
[(7) If the attorney general of a State prevails in any civil
action under paragraph (1), the State can recover reasonable
costs and attorney fees from the lender or related party.]
* * * * * * *
----------
TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT
* * * * * * *
SEC. 3. TELEMARKETING RULES.
(a) In General.--
(1) The Commission shall prescribe rules prohibiting
deceptive telemarketing acts or practices and other
abusive telemarketing acts or practices.
(2) The Commission shall include in such rules
respecting deceptive telemarketing acts or practices a
definition of deceptive telemarketing acts or practices
which shall include fraudulent charitable
solicitations, and which may include acts or practices
of entities or individuals that assist or facilitate
deceptive telemarketing, including credit card
laundering.
(3) The Commission shall include in such rules
respecting other abusive telemarketing acts or
practices--
(A) a requirement that telemarketers may not
undertake a pattern of unsolicited telephone
calls which the reasonable consumer would
consider coercive or abusive of such consumer's
right to privacy,
(B) restrictions on the hours of the day and
night when unsolicited telephone calls can be
made to consumers,
(C) a requirement that any person engaged in
telemarketing for the sale of goods or services
shall promptly and clearly disclose to the
person receiving the call that the purpose of
the call is to sell goods or services and make
such other disclosures as the Commission deems
appropriate, including the nature and price of
the goods and services; and
(D) a requirement that any person engaged in
telemarketing for the solicitation of
charitable contributions, donations, or gifts
of money or any other thing of value, shall
promptly and clearly disclose to the person
receiving the call that the purpose of the call
is to solicit charitable contributions,
donations, or gifts, and make such other
disclosures as the Commission considers
appropriate, including the name and mailing
address of the charitable organization on
behalf of which the solicitation is made.
In prescribing the rules described in this paragraph,
the Commission shall also consider recordkeeping
requirements.
(b) Rulemaking Authority.--The Commission shall have
authority to prescribe rules under subsection (a), in
accordance with section 553 of title 5, United States 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] subsection (a) 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].
[(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.]
(d) Securities and Exchange Commission Rules.--
(1) Promulgation.--
(A) In general.--Except as provided in
subparagraph (B), not later than 6 months after
the effective date of rules promulgated by the
Federal Trade Commission under subsection (a),
the Securities and Exchange Commission shall
promulgate, or require any national securities
exchange or registered securities association
to promulgate, rules substantially similar to
such rules to prohibit deceptive and other
abusive telemarketing acts or practices by
persons described in paragraph (2).
(B) Exception.--The Securities and Exchange
Commission is not required to promulgate a rule
under subparagraph (A) if it determines that--
(i) Federal securities laws or rules
adopted by the Securities and Exchange
Commission thereunder provide
protection from deceptive and other
abusive telemarketing by persons
described in paragraph (2)
substantially similar to that provided
by rules promulgated by the Federal
Trade Commission under subsection (a);
or
(ii) such a rule promulgated by the
Securities and Exchange Commission is
not necessary or appropriate in the
public interest, or for the protection
of investors, or would be inconsistent
with the maintenance of fair and
orderly markets.
If the Securities and Exchange Commission
determines that an exception described in
clause (i) or (ii) applies, the Securities and
Exchange Commission shall publish in the
Federal Register its determination with the
reasons for it.
(2) Application.--
(A) In general.--The rules promulgated by the
Securities and Exchange Commission under
paragraph (1)(A) shall apply to a broker,
dealer, transfer agent, municipal securities
dealer, municipal securities broker, government
securities broker, government securities
dealer, investment adviser or investment
company, or any individual asso- ciated with a
broker, dealer, transfer agent, municipal
securities dealer, municipal securities broker,
government securities broker, government
securities dealer, investment adviser or
investment company. The rules promulgated by
the Federal Trade Commission under subsection
(a) shall not apply to persons described in the
preceding sentence.
(B) Definitions.--For purposes of
subparagraph (A)--
(i) the terms ``broker'', ``dealer'',
``transfer agent'', ``municipal
securities dealer'', ``municipal
securities broker'', ``government
securities broker'', and ``government
securities dealer'' have the meanings
given such terms by paragraphs (4),
(5), (25), (30), (31), (43), and (44)
of section 3(a) of the Securities and
Exchange Act of 1934 (15 U.S.C.
78c(a)(4), (5), (25), (30), (31), (43),
and (44));
(ii) the term ``investment adviser''
has the meaning given such term by
section 202(a)(11) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-
2(a)(11)); and
(iii) the term ``investment company''
has the meaning given such term by
section 3(a) of the Investment Company
Act of 1940 (15 U.S.C. 80a-3(a)).
(e) Commodity Futures Trading Commission Rules.--
(1) Application.--The rules promulgated by the
Federal Trade Commission under subsection (a) shall not
apply to persons described in subsection (f)(1) of
section 6 of the Commodity Exchange Act (7 U.S.C. 8, 9,
15, 13b, 9a).
(2) Promulgation.--Section 6 of the Commodity
Exchange Act (7 U.S.C. 8, 9, 15, 13b, 9a) is amended by
adding at the end the following new subsection:
``(f)(1) Except as provided in paragraph (2), not later than
six months after the effective date of rules promulgated by the
Federal Trade Commission under section 3(a) of the
Telemarketing and Consumer Fraud and Abuse Prevention Act, the
Commission shall promulgate, or require each registered futures
association to promulgate, rules substantially similar to such
rules to prohibit deceptive and other abusive telemarketing
acts or practices by any person registered or exempt from
registration under this Act in connection with such person's
business as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, leverage
transaction merchant, floor broker, or floor trader, or a
person associated with any such person.
``(2) The Commission is not required to promulgate rules
under paragraph (1) if it determines that--
``(A) rules adopted by the Commission under this Act
provide protection from deceptive and abusive
telemarketing by persons described under paragraph (1)
substantially similar to that provided by rules
promulgated by the Federal Trade Commission under
section 3(a) of the Telemarketing and Consumer Fraud
and Abuse Prevention Act; or
``(B) such a rule promulgated by the Commission is
not necessary or appropriate in the public interest, or
for the pro- tection of customers in the futures and
options markets, or would be inconsistent with the
maintenance of fair and orderly markets.
If the Commission determines that an exception described in
subparagraph (A) or (B) applies, the Commission shall publish
in the Federal Register its determination with the reasons for
it.''.
* * * * * * *
----------
TITLE 11, UNITED STATES CODE
* * * * * * *
CHAPTER 1--GENERAL PROVISIONS
Sec. 101. Definitions
In this title the following definitions shall apply:
(1) The term ``accountant'' means accountant
authorized under applicable law to practice public
accounting, and includes professional accounting
association, corporation, or partnership, if so
authorized.
(2) The term ``affiliate'' means--
(A) entity that directly or indirectly owns,
controls, or holds with power to vote, 20
percent or more of the outstanding voting
securities of the debtor, other than an entity
that holds such securities--
(i) in a fiduciary or agency capacity
without sole discretionary power to
vote such securities; or
(ii) solely to secure a debt, if such
entity has not in fact exercised such
power to vote;
(B) corporation 20 percent or more of whose
outstanding voting securities are directly or
indirectly owned, controlled, or held with
power to vote, by the debtor, or by an entity
that directly or indirectly owns, controls, or
holds with power to vote, 20 percent or more of
the outstanding voting securities of the
debtor, other than an entity that holds such
securities--
(i) in a fiduciary or agency capacity
without sole discretionary power to
vote such securities; or
(ii) solely to secure a debt, if such
entity has not in fact exercised such
power to vote;
(C) person whose business is operated under a
lease or operating agreement by a debtor, or
person substantially all of whose property is
operated under an operating agreement with the
debtor; or
(D) entity that operates the business or
substantially all of the property of the debtor
under a lease or operating agreement.
(3) The term ``assisted person'' means any person
whose debts consist primarily of consumer debts and the
value of whose nonexempt property is less than
$150,000.
(4) The term ``attorney'' means attorney,
professional law association, corporation, or
partnership, authorized under applicable law to
practice law.
(4A) The term ``bankruptcy assistance'' means any
goods or services sold or otherwise provided to an
assisted person with the express or implied purpose of
providing information, advice, counsel, document
preparation, or filing, or attendance at a creditors'
meeting or appearing in a case or proceeding on behalf
of another or providing legal representation with
respect to a case or proceeding under this title.
(5) The term ``claim'' means--
(A) 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; or
(B) right to an equitable remedy for breach
of performance if such breach gives rise to a
right to payment, whether or not such right to
an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured.
(6) The term ``commodity broker'' means futures
commission merchant, foreign futures commission
merchant, clearing organization, leverage transaction
merchant, or commodity options dealer, as defined in
section 761 of this title, with respect to which there
is a customer, as defined in section 761 of this title.
(7) The term ``community claim'' means claim that
arose before the commencement of the case concerning
the debtor for which property of the kind specified in
section 541(a)(2) of this title is liable, whether or
not there is any such property at the time of the
commencement of the case.
(7A) The term ``commercial fishing operation''
means--
(A) the catching or harvesting of fish,
shrimp, lobsters, urchins, seaweed, shellfish,
or other aquatic species or products of such
species; or
(B) for purposes of section 109 and chapter
12, aquaculture activities consisting of
raising for market any species or product
described in subparagraph (A).
(7B) The term ``commercial fishing vessel'' means a
vessel used by a family fisherman to carry out a
commercial fishing operation.
(8) The term ``consumer debt'' means debt incurred by
an individual primarily for a personal, family, or
household purpose.
(9) The term ``corporation''--
(A) includes--
(i) association having a power or
privilege that a private corporation,
but not an individual or a partnership,
possesses;
(ii) partnership association
organized under a law that makes only
the capital subscribed responsible for
the debts of such association;
(iii) joint-stock company;
(iv) unincorporated company or
association; or
(v) business trust; but
(B) does not include limited partnership.
(9A) The term ``covered financial corporation'' means
any corporation incorporated or organized under any
Federal or State law, other than a stockbroker, a
commodity broker, or an entity of the kind specified in
paragraph (2) or (3) of section 109(b), that is--
(A) a bank holding company, as defined in
section 2(a) of the Bank Holding Company Act of
1956; or
(B) a corporation that exists for the primary
purpose of owning, controlling and financing
its subsidiaries, that has total consolidated
assets of $50,000,000,000 or greater, and for
which, in its most recently completed fiscal
year--
(i) annual gross revenues derived by
the corporation 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
corporation; or
(ii) the consolidated assets of the
corporation 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 corporation.
(10) The term ``creditor'' means--
(A) entity that has a claim against the
debtor that arose at the time of or before the
order for relief concerning the debtor;
(B) entity that has a claim against the
estate of a kind specified in section 348(d),
502(f), 502(g), 502(h) or 502(i) of this title;
or
(C) entity that has a community claim.
(10A) The term ``current monthly income''--
(A) means the average monthly income from all
sources that the debtor receives (or in a joint
case the debtor and the debtor's spouse
receive) without regard to whether such income
is taxable income, derived during the 6-month
period ending on--
(i) the last day of the calendar
month immediately preceding the date of
the commencement of the case if the
debtor files the schedule of current
income required by section
521(a)(1)(B)(ii); or
(ii) the date on which current income
is determined by the court for purposes
of this title if the debtor does not
file the schedule of current income
required by section 521(a)(1)(B)(ii);
and
(B) includes any amount paid by any entity
other than the debtor (or in a joint case the
debtor and the debtor's spouse), on a regular
basis for the household expenses of the debtor
or the debtor's dependents (and in a joint case
the debtor's spouse if not otherwise a
dependent), but excludes benefits received
under the Social Security Act, payments to
victims of war crimes or crimes against
humanity on account of their status as victims
of such crimes, and payments to victims of
international terrorism (as defined in section
2331 of title 18) or domestic terrorism (as
defined in section 2331 of title 18) on account
of their status as victims of such terrorism.
(11) The term ``custodian'' means--
(A) receiver or trustee of any of the
property of the debtor, appointed in a case or
proceeding not under this title;
(B) assignee under a general assignment for
the benefit of the debtor's creditors; or
(C) trustee, receiver, or agent under
applicable law, or under a contract, that is
appointed or authorized to take charge of
property of the debtor for the purpose of
enforcing a lien against such property, or for
the purpose of general administration of such
property for the benefit of the debtor's
creditors.
(12) The term ``debt'' means liability on a claim.
(12A) The term ``debt relief agency'' means any
person who provides any bankruptcy assistance to an
assisted person in return for the payment of money or
other valuable consideration, or who is a bankruptcy
petition preparer under section 110, but does not
include--
(A) any person who is an officer, director,
employee, or agent of a person who provides
such assistance or of the bankruptcy petition
preparer;
(B) a nonprofit organization that is exempt
from taxation under section 501(c)(3) of the
Internal Revenue Code of 1986;
(C) a creditor of such assisted person, to
the extent that the creditor is assisting such
assisted person to restructure any debt owed by
such assisted person to the creditor;
(D) a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act)
or any Federal credit union or State credit
union (as those terms are defined in section
101 of the Federal Credit Union Act), or any
affiliate or subsidiary of such depository
institution or credit union; or
(E) an author, publisher, distributor, or
seller of works subject to copyright protection
under title 17, when acting in such capacity.
(13) The term ``debtor'' means person or municipality
concerning which a case under this title has been
commenced.
(13A) The term ``debtor's principal residence''--
(A) means a residential structure if used as
the principal residence by the debtor,
including incidental property, without regard
to whether that structure is attached to real
property; and
(B) includes an individual condominium or
cooperative unit, a mobile or manufactured
home, or trailer if used as the principal
residence by the debtor.
(14) The term ``disinterested person'' means a person
that--
(A) is not a creditor, an equity security
holder, or an insider;
(B) is not and was not, within 2 years before
the date of the filing of the petition, a
director, officer, or employee of the debtor;
and
(C) does not have an interest materially
adverse to the interest of the estate or of any
class of creditors or equity security holders,
by reason of any direct or indirect
relationship to, connection with, or interest
in, the debtor, or for any other reason.
(14A) The term ``domestic support obligation'' means
a debt that accrues before, on, or after the date of
the order for relief in a case under this title,
including interest that accrues on that debt as
provided under applicable nonbankruptcy law
notwithstanding any other provision of this title, that
is--
(A) owed to or recoverable by--
(i) a spouse, former spouse, or child
of the debtor or such child's parent,
legal guardian, or responsible
relative; or
(ii) a governmental unit;
(B) in the nature of alimony, maintenance, or
support (including assistance provided by a
governmental unit) of such spouse, former
spouse, or child of the debtor or such child's
parent, without regard to whether such debt is
expressly so designated;
(C) established or subject to establishment
before, on, or after the date of the order for
relief in a case under this title, by reason of
applicable provisions of--
(i) a separation agreement, divorce
decree, or property settlement
agreement;
(ii) an order of a court of record;
or
(iii) a determination made in
accordance with applicable
nonbankruptcy law by a governmental
unit; and
(D) not assigned to a nongovernmental entity,
unless that obligation is assigned voluntarily
by the spouse, former spouse, child of the
debtor, or such child's parent, legal guardian,
or responsible relative for the purpose of
collecting the debt.
(15) The term ``entity'' includes person, estate,
trust, governmental unit, and United States trustee.
(16) The term ``equity security'' means--
(A) share in a corporation, whether or not
transferable or denominated ``stock'', or
similar security;
(B) interest of a limited partner in a
limited partnership; or
(C) warrant or right, other than a right to
convert, to purchase, sell, or subscribe to a
share, security, or interest of a kind
specified in subparagraph (A) or (B) of this
paragraph.
(17) The term ``equity security holder'' means holder
of an equity security of the debtor.
(18) The term ``family farmer'' means--
(A) individual or individual and spouse
engaged in a farming operation whose aggregate
debts do not exceed $3,237,000 and not less
than 50 percent of whose aggregate
noncontingent, liquidated debts (excluding a
debt for the principal residence of such
individual or such individual and spouse unless
such debt arises out of a farming operation),
on the date the case is filed, arise out of a
farming operation owned or operated by such
individual or such individual and spouse, and
such individual or such individual and spouse
receive from such farming operation more than
50 percent of such individual's or such
individual and spouse's gross income for--
(i) the taxable year preceding; or
(ii) each of the 2d and 3d taxable
years preceding;
the taxable year in which the case concerning
such individual or such individual and spouse
was filed; or
(B) corporation or partnership in which more
than 50 percent of the outstanding stock or
equity is held by one family, or by one family
and the relatives of the members of such
family, and such family or such relatives
conduct the farming operation, and
(i) more than 80 percent of the value
of its assets consists of assets
related to the farming operation;
(ii) its aggregate debts do not
exceed $3,237,000 and not less than 50
percent of its aggregate noncontingent,
liquidated debts (excluding a debt for
one dwelling which is owned by such
corporation or partnership and which a
shareholder or partner maintains as a
principal residence, unless such debt
arises out of a farming operation), on
the date the case is filed, arise out
of the farming operation owned or
operated by such corporation or such
partnership; and
(iii) if such corporation issues
stock, such stock is not publicly
traded.
(19) The term ``family farmer with regular annual
income'' means family farmer whose annual income is
sufficiently stable and regular to enable such family
farmer to make payments under a plan under chapter 12
of this title.
(19A) The term ``family fisherman'' means--
(A) an individual or individual and spouse
engaged in a commercial fishing operation--
(i) whose aggregate debts do not
exceed $1,500,000 and not less than 80
percent of whose aggregate
noncontingent, liquidated debts
(excluding a debt for the principal
residence of such individual or such
individual and spouse, unless such debt
arises out of a commercial fishing
operation), on the date the case is
filed, arise out of a commercial
fishing operation owned or operated by
such individual or such individual and
spouse; and
(ii) who receive from such commercial
fishing operation more than 50 percent
of such individual's or such
individual's and spouse's gross income
for the taxable year preceding the
taxable year in which the case
concerning such individual or such
individual and spouse was filed; or
(B) a corporation or partnership--
(i) in which more than 50 percent of
the outstanding stock or equity is held
by--
(I) 1 family that conducts
the commercial fishing
operation; or
(II) 1 family and the
relatives of the members of
such family, and such family or
such relatives conduct the
commercial fishing operation;
and
(ii)(I) more than 80 percent of the
value of its assets consists of assets
related to the commercial fishing
operation;
(II) its aggregate debts do not
exceed $1,500,000 and not less than 80
percent of its aggregate noncontingent,
liquidated debts (excluding a debt for
1 dwelling which is owned by such
corporation or partnership and which a
shareholder or partner maintains as a
principal residence, unless such debt
arises out of a commercial fishing
operation), on the date the case is
filed, arise out of a commercial
fishing operation owned or operated by
such corporation or such partnership;
and
(III) if such corporation issues
stock, such stock is not publicly
traded.
(19B) The term ``family fisherman with regular annual
income'' means a family fisherman whose annual income
is sufficiently stable and regular to enable such
family fisherman to make payments under a plan under
chapter 12 of this title.
(20) The term ``farmer'' means (except when such term
appears in the term ``family farmer'') person that
received more than 80 percent of such person's gross
income during the taxable year of such person
immediately preceding the taxable year of such person
during which the case under this title concerning such
person was commenced from a farming operation owned or
operated by such person.
(21) The term ``farming operation'' includes farming,
tillage of the soil, dairy farming, ranching,
production or raising of crops, poultry, or livestock,
and production of poultry or livestock products in an
unmanufactured state.
(21A) The term ``farmout agreement'' means a written
agreement in which--
(A) the owner of a right to drill, produce,
or operate liquid or gaseous hydrocarbons on
property agrees or has agreed to transfer or
assign all or a part of such right to another
entity; and
(B) such other entity (either directly or
through its agents or its assigns), as
consideration, agrees to perform drilling,
reworking, recompleting, testing, or similar or
related operations, to develop or produce
liquid or gaseous hydrocarbons on the property.
(21B) The term ``Federal depository institutions
regulatory agency'' means--
(A) with respect to an insured depository
institution (as defined in section 3(c)(2) of
the Federal Deposit Insurance Act) for which no
conservator or receiver has been appointed, the
appropriate Federal banking agency (as defined
in section 3(q) of such Act);
(B) with respect to an insured credit union
(including an insured credit union for which
the National Credit Union Administration has
been appointed conservator or liquidating
agent), the National Credit Union
Administration;
(C) with respect to any insured depository
institution for which the Resolution Trust
Corporation has been appointed conservator or
receiver, the Resolution Trust Corporation; and
(D) with respect to any insured depository
institution for which the Federal Deposit
Insurance Corporation has been appointed
conservator or receiver, the Federal Deposit
Insurance Corporation.
(22) The term ``financial institution'' means--
(A) a Federal reserve bank, or an entity that
is a commercial or savings bank, industrial
savings bank, savings and loan association,
trust company, federally-insured credit union,
or receiver, liquidating agent, or conservator
for such entity and, when any such Federal
reserve bank, receiver, liquidating agent,
conservator or entity is acting as agent or
custodian for a customer (whether or not a
``customer'', as defined in section 741) in
connection with a securities contract (as
defined in section 741) such customer; or
(B) in connection with a securities contract
(as defined in section 741) an investment
company registered under the Investment Company
Act of 1940.
(22A) The term ``financial participant'' means--
(A) an entity that, at the time it enters
into a securities contract, commodity contract,
swap agreement, repurchase agreement, or
forward contract, or at the time of the date of
the filing of the petition, has one or more
agreements or transactions described in
paragraph (1), (2), (3), (4), (5), or (6) of
section 561(a) with the debtor or any other
entity (other than an affiliate) of a total
gross dollar value of not less than
$1,000,000,000 in notional or actual principal
amount outstanding (aggregated across
counterparties) at such time or on any day
during the 15-month period preceding the date
of the filing of the petition, or has gross
mark-to-market positions of not less than
$100,000,000 (aggregated across counterparties)
in one or more such agreements or transactions
with the debtor or any other entity (other than
an affiliate) at such time or on any day during
the 15-month period preceding the date of the
filing of the petition; or
(B) a clearing organization (as defined in
section 402 of the Federal Deposit Insurance
Corporation Improvement Act of 1991).
(23) The term ``foreign proceeding'' means a
collective judicial or administrative proceeding in a
foreign country, including an interim proceeding, under
a law relating to insolvency or adjustment of debt in
which proceeding the assets and affairs of the debtor
are subject to control or supervision by a foreign
court, for the purpose of reorganization or
liquidation.
(24) The term ``foreign representative'' means a
person or body, including a person or body appointed on
an interim basis, authorized in a foreign proceeding to
administer the reorganization or the liquidation of the
debtor's assets or affairs or to act as a
representative of such foreign proceeding.
(25) The term ``forward contract'' means--
(A) a contract (other than a commodity
contract, as defined in section 761) for the
purchase, sale, or transfer of a commodity, as
defined in section 761(8) of this title, 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 more than two
days after the date the contract is entered
into, including, but not limited to, a
repurchase or reverse repurchase transaction
(whether or not such repurchase or reverse
repurchase transaction is a ``repurchase
agreement'', as defined in this section)
consignment, lease, swap, hedge transaction,
deposit, loan, option, allocated transaction,
unallocated transaction, or any other similar
agreement;
(B) any combination of agreements or
transactions referred to in subparagraphs (A)
and (C);
(C) any option to enter into an agreement or
transaction referred to in subparagraph (A) or
(B);
(D) a master agreement that provides for an
agreement or transaction referred to in
subparagraph (A), (B), or (C), together with
all supplements to any such master agreement,
without regard to whether such master agreement
provides for an agreement or transaction that
is not a forward contract under this paragraph,
except that such master agreement shall be
considered to be a forward contract under this
paragraph only with respect to each agreement
or transaction under such master agreement that
is referred to in subparagraph (A), (B), or
(C); or
(E) any security agreement or arrangement, or
other credit enhancement related to any
agreement or transaction referred to in
subparagraph (A), (B), (C), or (D), including
any guarantee or reimbursement obligation by or
to a forward contract merchant or financial
participant in connection with any agreement or
transaction referred to in any such
subparagraph, but not to exceed the damages in
connection with any such agreement or
transaction, measured in accordance with
section 562.
(26) The term ``forward contract merchant'' means a
Federal reserve bank, or an entity the business of
which consists in whole or in part of entering into
forward contracts as or with merchants in a commodity
(as defined in section 761) 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.
(27) The term ``governmental unit'' means United
States; State; Commonwealth; District; Territory;
municipality; foreign state; department, agency, or
instrumentality of the United States (but not a United
States trustee while serving as a trustee in a case
under this title), a State, a Commonwealth, a District,
a Territory, a municipality, or a foreign state; or
other foreign or domestic government.
(27A) The term ``health care business''--
(A) means any public or private entity
(without regard to whether that entity is
organized for profit or not for profit) that is
primarily engaged in offering to the general
public facilities and services for--
(i) the diagnosis or treatment of
injury, deformity, or disease; and
(ii) surgical, drug treatment,
psychiatric, or obstetric care; and
(B) includes--
(i) any--
(I) general or specialized
hospital;
(II) ancillary ambulatory,
emergency, or surgical
treatment facility;
(III) hospice;
(IV) home health agency; and
(V) other health care
institution that is similar to
an entity referred to in
subclause (I), (II), (III), or
(IV); and
(ii) any long-term care facility,
including any--
(I) skilled nursing facility;
(II) intermediate care
facility;
(III) assisted living
facility;
(IV) home for the aged;
(V) domiciliary care
facility; and
(VI) health care institution
that is related to a facility
referred to in subclause (I),
(II), (III), (IV), or (V), if
that institution is primarily
engaged in offering room,
board, laundry, or personal
assistance with activities of
daily living and incidentals to
activities of daily living.
(27B) The term ``incidental property'' means, with
respect to a debtor's principal residence--
(A) property commonly conveyed with a
principal residence in the area where the real
property is located;
(B) all easements, rights, appurtenances,
fixtures, rents, royalties, mineral rights, oil
or gas rights or profits, water rights, escrow
funds, or insurance proceeds; and
(C) all replacements or additions.
(28) The term ``indenture'' means mortgage, deed of
trust, or indenture, under which there is outstanding a
security, other than a voting-trust certificate,
constituting a claim against the debtor, a claim
secured by a lien on any of the debtor's property, or
an equity security of the debtor.
(29) The term ``indenture trustee'' means trustee
under an indenture.
(30) The term ``individual with regular income''
means individual whose income is sufficiently stable
and regular to enable such individual to make payments
under a plan under chapter 13 of this title, other than
a stockbroker or a commodity broker.
(31) The term ``insider'' includes--
(A) if the debtor is an individual--
(i) relative of the debtor or of a
general partner of the debtor;
(ii) partnership in which the debtor
is a general partner;
(iii) general partner of the debtor;
or
(iv) corporation of which the debtor
is a director, officer, or person in
control;
(B) if the debtor is a corporation--
(i) director of the debtor;
(ii) officer of the debtor;
(iii) person in control of the
debtor;
(iv) partnership in which the debtor
is a general partner;
(v) general partner of the debtor; or
(vi) relative of a general partner,
director, officer, or person in control
of the debtor;
(C) if the debtor is a partnership--
(i) general partner in the debtor;
(ii) relative of a general partner
in, general partner of, or person in
control of the debtor;
(iii) partnership in which the debtor
is a general partner;
(iv) general partner of the debtor;
or
(v) person in control of the debtor;
(D) if the debtor is a municipality, elected
official of the debtor or relative of an
elected official of the debtor;
(E) affiliate, or insider of an affiliate as
if such affiliate were the debtor; and
(F) managing agent of the debtor.
(32) The term ``insolvent'' means--
(A) with reference to an entity other than a
partnership and a municipality, financial
condition such that the sum of such entity's
debts is greater than all of such entity's
property, at a fair valuation, exclusive of--
(i) property transferred, concealed,
or removed with intent to hinder,
delay, or defraud such entity's
creditors; and
(ii) property that may be exempted
from property of the estate under
section 522 of this title;
(B) with reference to a partnership,
financial condition such that the sum of such
partnership's debts is greater than the
aggregate of, at a fair valuation--
(i) all of such partnership's
property, exclusive of property of the
kind specified in subparagraph (A)(i)
of this paragraph; and
(ii) the sum of the excess of the
value of each general partner's
nonpartnership property, exclusive of
property of the kind specified in
subparagraph (A) of this paragraph,
over such partner's nonpartnership
debts; and
(C) with reference to a municipality,
financial condition such that the municipality
is--
(i) generally not paying its debts as
they become due unless such debts are
the subject of a bona fide dispute; or
(ii) unable to pay its debts as they
become due.
(33) The term ``institution-affiliated party''--
(A) with respect to an insured depository
institution (as defined in section 3(c)(2) of
the Federal Deposit Insurance Act), has the
meaning given it in section 3(u) of the Federal
Deposit Insurance Act; and
(B) with respect to an insured credit union,
has the meaning given it in section 206(r) of
the Federal Credit Union Act.
(34) The term ``insured credit union'' has the
meaning given it in section 101(7) of the Federal
Credit Union Act.
(35) The term ``insured depository institution''--
(A) has the meaning given it in section
3(c)(2) of the Federal Deposit Insurance Act;
and
(B) includes an insured credit union (except
in the case of paragraphs (21B) and (33)(A) of
this subsection).
(35A) The term ``intellectual property'' means--
(A) trade secret;
(B) invention, process, design, or plant
protected under title 35;
(C) patent application;
(D) plant variety;
(E) work of authorship protected under title
17; or
(F) mask work protected under chapter 9 of
title 17;
to the extent protected by applicable nonbankruptcy
law.
(36) The term ``judicial lien'' means lien obtained
by judgment, levy, sequestration, or other legal or
equitable process or proceeding.
(37) The term ``lien'' means charge against or
interest in property to secure payment of a debt or
performance of an obligation.
(38) The term ``margin payment'' means, for purposes
of the forward contract provisions of this title,
payment or deposit of cash, a security or other
property, that is commonly known in the forward
contract trade as original margin, initial margin,
maintenance margin, or variation margin, including
mark-to-market payments, or variation payments.
(38A) The term ``master netting agreement''--
(A) means an agreement providing for the
exercise of rights, including rights of
netting, setoff, liquidation, termination,
acceleration, or close out, under or in
connection with one or more contracts that are
described in any one or more of paragraphs (1)
through (5) of section 561(a), or any security
agreement or arrangement or other credit
enhancement related to one or more of the
foregoing, including any guarantee or
reimbursement obligation related to 1 or more
of the foregoing; and
(B) if the agreement contains provisions
relating to agreements or transactions that are
not contracts described in paragraphs (1)
through (5) of section 561(a), shall be deemed
to be a master netting agreement only with
respect to those agreements or transactions
that are described in any one or more of
paragraphs (1) through (5) of section 561(a).
(38B) The term ``master netting agreement
participant'' means an entity that, at any time before
the date of the filing of the petition, is a party to
an outstanding master netting agreement with the
debtor.
(39) The term ``mask work'' has the meaning given it
in section 901(a)(2) of title 17.
(39A) The term ``median family income'' means for any
year--
(A) the median family income both calculated
and reported by the Bureau of the Census in the
then most recent year; and
(B) if not so calculated and reported in the
then current year, adjusted annually after such
most recent year until the next year in which
median family income is both calculated and
reported by the Bureau of the Census, to
reflect the percentage change in the Consumer
Price Index for All Urban Consumers during the
period of years occurring after such most
recent year and before such current year.
(40) The term ``municipality'' means political
subdivision or public agency or instrumentality of a
State.
(40A) The term ``patient'' means any individual who
obtains or receives services from a health care
business.
(40B) The term ``patient records'' means any record
relating to a patient, including a written document or
a record recorded in a magnetic, optical, or other form
of electronic medium.
(41) The term ``person'' includes individual,
partnership, and corporation, but does not include
governmental unit, except that a governmental unit
that--
(A) acquires an asset from a person--
(i) as a result of the operation of a
loan guarantee agreement; or
(ii) as receiver or liquidating agent
of a person;
(B) is a guarantor of a pension benefit
payable by or on behalf of the debtor or an
affiliate of the debtor; or
(C) is the legal or beneficial owner of an
asset of--
(i) an employee pension benefit plan
that is a governmental plan, as defined
in section 414(d) of the Internal
Revenue Code of 1986; or
(ii) an eligible deferred
compensation plan, as defined in
section 457(b) of the Internal Revenue
Code of 1986;
shall be considered, for purposes of section 1102 of
this title, to be a person with respect to such asset
or such benefit.
(41A) The term ``personally identifiable
information'' means--
(A) if provided by an individual to the
debtor in connection with obtaining a product
or a service from the debtor primarily for
personal, family, or household purposes--
(i) the first name (or initial) and
last name of such individual, whether
given at birth or time of adoption, or
resulting from a lawful change of name;
(ii) the geographical address of a
physical place of residence of such
individual;
(iii) an electronic address
(including an e-mail address) of such
individual;
(iv) a telephone number dedicated to
contacting such individual at such
physical place of residence;
(v) a social security account number
issued to such individual; or
(vi) the account number of a credit
card issued to such individual; or
(B) if identified in connection with 1 or
more of the items of information specified in
subparagraph (A)--
(i) a birth date, the number of a
certificate of birth or adoption, or a
place of birth; or
(ii) any other information concerning
an identified individual that, if
disclosed, will result in contacting or
identifying such individual physically
or electronically.
(42) The term ``petition'' means petition filed under
section 301, 302, 303 and 1504 of this title, as the
case may be, commencing a case under this title.
(42A) The term ``production payment'' means a term
overriding royalty satisfiable in cash or in kind--
(A) contingent on the production of a liquid
or gaseous hydrocarbon from particular real
property; and
(B) from a specified volume, or a specified
value, from the liquid or gaseous hydrocarbon
produced from such property, and determined
without regard to production costs.
(43) The term ``purchaser'' means transferee of a
voluntary transfer, and includes immediate or mediate
transferee of such a transferee.
(44) The term ``railroad'' means common carrier by
railroad engaged in the transportation of individuals
or property or owner of trackage facilities leased by
such a common carrier.
(45) The term ``relative'' means individual related
by affinity or consanguinity within the third degree as
determined by the common law, or individual in a step
or adoptive relationship within such third degree.
(46) The term ``repo participant'' means an entity
that, at any time before the filing of the petition,
has an outstanding repurchase agreement with the
debtor.
(47) The term ``repurchase agreement'' (which
definition also applies to a reverse repurchase
agreement)--
(A) means--
(i) an agreement, including related
terms, which provides for the transfer
of one or more certificates of deposit,
mortgage related securities (as 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 (defined as 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), 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' acceptance, securities,
mortgage loans, or interests of the
kind described in this clause, at a
date certain not later than 1 year
after such transfer or on demand,
against the transfer of funds;
(ii) any combination of agreements or
transactions referred to in clauses (i)
and (iii);
(iii) an option to enter into an
agreement or transaction referred to in
clause (i) or (ii);
(iv) a master agreement that provides
for an agreement or transaction
referred to in clause (i), (ii), or
(iii), together with all supplements to
any such master agreement, without
regard to whether such master agreement
provides for an agreement or
transaction that is not a repurchase
agreement under this paragraph, except
that such master agreement shall be
considered to be a repurchase agreement
under this paragraph only with respect
to each agreement or transaction under
the master agreement that is referred
to in clause (i), (ii), or (iii); or
(v) any security agreement or
arrangement or other credit enhancement
related to any agreement or transaction
referred to in clause (i), (ii), (iii),
or (iv), including any guarantee or
reimbursement obligation by or to a
repo participant or financial
participant in connection with any
agreement or transaction referred to in
any such clause, but not to exceed the
damages in connection with any such
agreement or transaction, measured in
accordance with section 562 of this
title; and
(B) does not include a repurchase obligation
under a participation in a commercial mortgage
loan.
(48) The term ``securities clearing agency'' means
person that is registered as a clearing agency under
section 17A of the Securities Exchange Act of 1934, or
exempt from such registration under such section
pursuant to an order of the Securities and Exchange
Commission, or whose business is confined to the
performance of functions of a clearing agency with
respect to exempted securities, as defined in section
3(a)(12) of such Act for the purposes of such section
17A.
(48A) The term ``securities self regulatory
organization'' means either a securities association
registered with the Securities and Exchange Commission
under section 15A of the Securities Exchange Act of
1934 or a national securities exchange registered with
the Securities and Exchange Commission under section 6
of the Securities Exchange Act of 1934.
(49) The term ``security''--
(A) includes--
(i) note;
(ii) stock;
(iii) treasury stock;
(iv) bond;
(v) debenture;
(vi) collateral trust certificate;
(vii) pre-organization certificate or
subscription;
(viii) transferable share;
(ix) voting-trust certificate;
(x) certificate of deposit;
(xi) certificate of deposit for
security;
(xii) investment contract or
certificate of interest or
participation in a profit-sharing
agreement or in an oil, gas, or mineral
royalty or lease, if such contract or
interest is required to be the subject
of a registration statement filed with
the Securities and Exchange Commission
under the provisions of the Securities
Act of 1933, or is exempt under section
3(b) of such Act from the requirement
to file such a statement;
(xiii) interest of a limited partner
in a limited partnership;
(xiv) other claim or interest
commonly known as ``security''; and
(xv) certificate of interest or
participation in, temporary or interim
certificate for, receipt for, or
warrant or right to subscribe to or
purchase or sell, a security; but
(B) does not include--
(i) currency, check, draft, bill of
exchange, or bank letter of credit;
(ii) leverage transaction, as defined
in section 761 of this title;
(iii) commodity futures contract or
forward contract;
(iv) option, warrant, or right to
subscribe to or purchase or sell a
commodity futures contract;
(v) option to purchase or sell a
commodity;
(vi) contract or certificate of a
kind specified in subparagraph (A)(xii)
of this paragraph that is not required
to be the subject of a registration
statement filed with the Securities and
Exchange Commission and is not exempt
under section 3(b) of the Securities
Act of 1933 from the requirement to
file such a statement; or
(vii) debt or evidence of
indebtedness for goods sold and
delivered or services rendered.
(50) The term ``security agreement'' means agreement
that creates or provides for a security interest.
(51) The term ``security interest'' means lien
created by an agreement.
(51A) The term ``settlement payment'' means, for
purposes of the forward contract provisions of this
title, a preliminary settlement payment, a partial
settlement payment, an interim settlement payment, a
settlement payment on account, a final settlement
payment, a net settlement payment, or any other similar
payment commonly used in the forward contract trade.
(51B) The term ``single asset real estate'' means
real property constituting a single property or
project, other than residential real property with
fewer than 4 residential units, which generates
substantially all of the gross income of a debtor who
is not a family farmer and on which no substantial
business is being conducted by a debtor other than the
business of operating the real property and activities
incidental thereto.
(51C) The term ``small business case'' means a case
filed under chapter 11 of this title in which the
debtor is a small business debtor.
(51D) The term ``small business debtor''--
(A) subject to subparagraph (B), means a
person engaged in commercial or business
activities (including any affiliate of such
person that is also a debtor under this title
and excluding a person whose primary activity
is the business of owning or operating real
property or activities incidental thereto) that
has aggregate noncontingent liquidated secured
and unsecured debts as of the date of the
filing of the petition or the date of the order
for relief in an amount not more than
$2,000,000 (excluding debts owed to 1 or more
affiliates or insiders) for a case in which the
United States trustee has not appointed under
section 1102(a)(1) a committee of unsecured
creditors or where the court has determined
that the committee of unsecured creditors is
not sufficiently active and representative to
provide effective oversight of the debtor; and
(B) does not include any member of a group of
affiliated debtors that has aggregate
noncontingent liquidated secured and unsecured
debts in an amount greater than $2,000,000
(excluding debt owed to 1 or more affiliates or
insiders).
(52) The term ``State'' includes the District of
Columbia and Puerto Rico, except for the purpose of
defining who may be a debtor under chapter 9 of this
title.
(53) The term ``statutory lien'' means lien arising
solely by force of a statute on specified circumstances
or conditions, or lien of distress for rent, whether or
not statutory, but does not include security interest
or judicial lien, whether or not such interest or lien
is provided by or is dependent on a statute and whether
or not such interest or lien is made fully effective by
statute.
(53A) The term ``stockbroker'' means person--
(A) with respect to which there is a
customer, as defined in section 741 of this
title; and
(B) that is engaged in the business of
effecting transactions in securities--
(i) for the account of others; or
(ii) with members of the general
public, from or for such person's own
account.
(53B) The term ``swap agreement''--
(A) means--
(i) any agreement, including the
terms and conditions incorporated by
reference in such agreement, which is--
(I) an interest rate swap,
option, future, or forward
agreement, including a rate
floor, rate cap, rate collar,
cross-currency rate swap, and
basis swap;
(II) a spot, same day-
tomorrow, tomorrow-next,
forward, or other foreign
exchange, precious metals, or
other commodity agreement;
(III) a currency swap,
option, future, or forward
agreement;
(IV) an equity index or
equity swap, option, future, or
forward agreement;
(V) a debt index or debt
swap, option, future, or
forward agreement;
(VI) a total return, credit
spread or credit swap, option,
future, or forward agreement;
(VII) a commodity index or a
commodity swap, option, future,
or forward agreement;
(VIII) a weather swap,
option, future, or forward
agreement;
(IX) an emissions swap,
option, future, or forward
agreement; or
(X) 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
paragraph and that--
(I) 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
therein); and
(II) 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
subparagraph;
(iv) any option to enter into an
agreement or transaction referred to in
this subparagraph;
(v) a master agreement that provides
for an agreement or transaction
referred to in clause (i), (ii), (iii),
or (iv), together with all supplements
to any such master agreement, and
without regard to whether the master
agreement contains an agreement or
transaction that is not a swap
agreement under this paragraph, except
that the master agreement shall be
considered to be a swap agreement under
this paragraph only with respect to
each agreement or transaction under the
master agreement that is referred to in
clause (i), (ii), (iii), or (iv); or
(vi) any security agreement or
arrangement or other credit enhancement
related to any agreements or
transactions referred to in clause (i)
through (v), including any guarantee or
reimbursement obligation by or to a
swap participant or financial
participant in connection with any
agreement or transaction referred to in
any such clause, but not to exceed the
damages in connection with any such
agreement or transaction, measured in
accordance with section 562; and
(B) is applicable for purposes of this title
only, and shall not be construed or applied so
as to challenge or affect the characterization,
definition, or treatment of any swap agreement
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 such term is defined in
section 3(a)(47) of the Securities Exchange Act
of 1934) and the Commodity Exchange Act.
(53C) The term ``swap participant'' means an entity
that, at any time before the filing of the petition,
has an outstanding swap agreement with the debtor.
(56A) The term ``term overriding royalty'' means an
interest in liquid or gaseous hydrocarbons in place or
to be produced from particular real property that
entitles the owner thereof to a share of production, or
the value thereof, for a term limited by time,
quantity, or value realized.
(53D) The term ``timeshare plan'' means and shall
include that interest purchased in any arrangement,
plan, scheme, or similar device, but not including
exchange programs, whether by membership, agreement,
tenancy in common, sale, lease, deed, rental agreement,
license, right to use agreement, or by any other means,
whereby a purchaser, in exchange for consideration,
receives a right to use accommodations, facilities, or
recreational sites, whether improved or unimproved, for
a specific period of time less than a full year during
any given year, but not necessarily for consecutive
years, and which extends for a period of more than
three years. A ``timeshare interest'' is that interest
purchased in a timeshare plan which grants the
purchaser the right to use and occupy accommodations,
facilities, or recreational sites, whether improved or
unimproved, pursuant to a timeshare plan.
(54) The term ``transfer'' means--
(A) the creation of a lien;
(B) the retention of title as a security
interest;
(C) the foreclosure of a debtor's equity of
redemption; or
(D) each mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of
disposing of or parting with--
(i) property; or
(ii) an interest in property.
(54A) The term ``uninsured State member bank'' means
a State member bank (as defined in section 3 of the
Federal Deposit Insurance Act) the deposits of which
are not insured by the Federal Deposit Insurance
Corporation.
(55) The term ``United States'', when used in a
geographical sense, includes all locations where the
judicial jurisdiction of the United States extends,
including territories and possessions of the United
States.
* * * * * * *
Sec. 103. Applicability of chapters
(a) Except as provided in section 1161 of this title,
chapters 1, 3, and 5 of this title apply in a case under
chapter 7, 11, 12, or 13 of this title, and this chapter,
sections 307, 362(o), 555 through 557, and 559 through 562
apply in a case under chapter 15.
(b) Subchapters I and II of chapter 7 of this title apply
only in a case under such chapter.
(c) Subchapter III of chapter 7 of this title applies only in
a case under such chapter concerning a stockbroker.
(d) Subchapter IV of chapter 7 of this title applies only in
a case under such chapter concerning a commodity broker.
(e) Scope of Application.--Subchapter V of chapter 7 of this
title shall apply only in a case under such chapter concerning
the liquidation of an uninsured State member bank, or a
corporation organized under section 25A of the Federal Reserve
Act, which operates, or operates as, a multilateral clearing
organization pursuant to section 409 of the Federal Deposit
Insurance Corporation Improvement Act of 1991.
(f) Except as provided in section 901 of this title, only
chapters 1 and 9 of this title apply in a case under such
chapter 9.
(g) Except as provided in section 901 of this title,
subchapters I, II, and III of chapter 11 of this title apply
only in a case under such chapter.
(h) Subchapter IV of chapter 11 of this title applies only in
a case under such chapter concerning a railroad.
(i) Chapter 13 of this title applies only in a case under
such chapter.
(j) Chapter 12 of this title applies only in a case under
such chapter.
(k) Chapter 15 applies only in a case under such chapter,
except that--
(1) sections 1505, 1513, and 1514 apply in all cases
under this title; and
(2) section 1509 applies whether or not a case under
this title is pending.
(l) Subchapter V of chapter 11 of this title applies only in
a case under chapter 11 concerning a covered financial
corporation.
* * * * * * *
Sec. 109. Who may be a debtor
(a) Notwithstanding any other provision of this section, only
a person that resides or has a domicile, a place of business,
or property in the United States, or a municipality, may be a
debtor under this title.
(b) A person may be a debtor under chapter 7 of this title
only if such person is not--
(1) a railroad;
(2) a domestic insurance company, bank, savings bank,
cooperative bank, savings and loan association,
building and loan association, homestead association, a
New Markets Venture Capital company as defined in
section 351 of the Small Business Investment Act of
1958, a small business investment company licensed by
the Small Business Administration under section 301 of
the Small Business Investment Act of 1958, credit
union, or industrial bank or similar institution which
is an insured bank as defined in section 3(h) of the
Federal Deposit Insurance Act, except that an uninsured
State member bank, or a corporation organized under
section 25A of the Federal Reserve Act, which operates,
or operates as, a multilateral clearing organization
pursuant to section 409 of the Federal Deposit
Insurance Corporation Improvement Act of 1991 may be a
debtor if a petition is filed at the direction of the
Board of Governors of the Federal Reserve System; [or]
(3)(A) a foreign insurance company, engaged in such
business in the United States; or
(B) a foreign bank, savings bank, cooperative bank,
savings and loan association, building and loan
association, or credit union, that has a branch or
agency (as defined in section 1(b) of the International
Banking Act of 1978) in the United States[.]; or
(4) a covered financial corporation.
(c) An entity may be a debtor under chapter 9 of this title
if and only if such entity--
(1) is a municipality;
(2) is specifically authorized, in its capacity as a
municipality or by name, to be a debtor under such
chapter by State law, or by a governmental officer or
organization empowered by State law to authorize such
entity to be a debtor under such chapter;
(3) is insolvent;
(4) desires to effect a plan to adjust such debts;
and
(5)(A) has obtained the agreement of creditors
holding at least a majority in amount of the claims of
each class that such entity intends to impair under a
plan in a case under such chapter;
(B) has negotiated in good faith with creditors and
has failed to obtain the agreement of creditors holding
at least a majority in amount of the claims of each
class that such entity intends to impair under a plan
in a case under such chapter;
(C) is unable to negotiate with creditors because
such negotiation is impracticable; or
(D) reasonably believes that a creditor may attempt
to obtain a transfer that is avoidable under section
547 of this title.
(d) Only a railroad, a person that may be a debtor under
chapter 7 of this title (except a stockbroker or a commodity
broker), [and] an uninsured State member bank, [or] a
corporation organized under section 25A of the Federal Reserve
Act, which operates, or operates as, a multilateral clearing
organization pursuant to section 409 of the Federal Deposit
Insurance Corporation Improvement Act of 1991, or a covered
financial corporation may be a debtor under chapter 11 of this
title.
(e) Only an individual with regular income that owes, on the
date of the filing of the petition, noncontingent, liquidated,
unsecured debts of less than $250,000 and noncontingent,
liquidated, secured debts of less than $750,000, or an
individual with regular income and such individual's spouse,
except a stockbroker or a commodity broker, that owe, on the
date of the filing of the petition, noncontingent, liquidated,
unsecured debts that aggregate less than $250,000 and
noncontingent, liquidated, secured debts of less than $750,000
may be a debtor under chapter 13 of this title.
(f) Only a family farmer or family fisherman with regular
annual income may be a debtor under chapter 12 of this title.
(g) Notwithstanding any other provision of this section, no
individual or family farmer may be a debtor under this title
who has been a debtor in a case pending under this title at any
time in the preceding 180 days if--
(1) the case was dismissed by the court for willful
failure of the debtor to abide by orders of the court,
or to appear before the court in proper prosecution of
the case; or
(2) the debtor requested and obtained the voluntary
dismissal of the case following the filing of a request
for relief from the automatic stay provided by section
362 of this title.
(h)(1) Subject to paragraphs (2) and (3), and notwithstanding
any other provision of this section other than paragraph (4) of
this subsection, an individual may not be a debtor under this
title unless such individual has, during the 180-day period
ending on the date of filing of the petition by such
individual, received from an approved nonprofit budget and
credit counseling agency described in section 111(a) an
individual or group briefing (including a briefing conducted by
telephone or on the Internet) that outlined the opportunities
for available credit counseling and assisted such individual in
performing a related budget analysis.
(2)(A) Paragraph (1) shall not apply with respect to a debtor
who resides in a district for which the United States trustee
(or the bankruptcy administrator, if any) determines that the
approved nonprofit budget and credit counseling agencies for
such district are not reasonably able to provide adequate
services to the additional individuals who would otherwise seek
credit counseling from such agencies by reason of the
requirements of paragraph (1).
(B) The United States trustee (or the bankruptcy
administrator, if any) who makes a determination described in
subparagraph (A) shall review such determination not later than
1 year after the date of such determination, and not less
frequently than annually thereafter. Notwithstanding the
preceding sentence, a nonprofit budget and credit counseling
agency may be disapproved by the United States trustee (or the
bankruptcy administrator, if any) at any time.
(3)(A) Subject to subparagraph (B), the requirements of
paragraph (1) shall not apply with respect to a debtor who
submits to the court a certification that--
(i) describes exigent circumstances that merit a
waiver of the requirements of paragraph (1);
(ii) states that the debtor requested credit
counseling services from an approved nonprofit budget
and credit counseling agency, but was unable to obtain
the services referred to in paragraph (1) during the 7-
day period beginning on the date on which the debtor
made that request; and
(iii) is satisfactory to the court.
(B) With respect to a debtor, an exemption under subparagraph
(A) shall cease to apply to that debtor on the date on which
the debtor meets the requirements of paragraph (1), but in no
case may the exemption apply to that debtor after the date that
is 30 days after the debtor files a petition, except that the
court, for cause, may order an additional 15 days.
(4) The requirements of paragraph (1) shall not apply with
respect to a debtor whom the court determines, after notice and
hearing, is unable to complete those requirements because of
incapacity, disability, or active military duty in a military
combat zone. For the purposes of this paragraph, incapacity
means that the debtor is impaired by reason of mental illness
or mental deficiency so that he is incapable of realizing and
making rational decisions with respect to his financial
responsibilities; and ``disability'' means that the debtor is
so physically impaired as to be unable, after reasonable
effort, to participate in an in person, telephone, or Internet
briefing required under paragraph (1).
* * * * * * *
CHAPTER 3--CASE ADMINISTRATION
* * * * * * *
SUBCHAPTER II--OFFICERS
* * * * * * *
Sec. 322. Qualification of trustee
(a) Except as provided in subsection (b)(1), a person
selected under section 701, 702, 703, 1104, 1163, 1202, or 1302
of this title to serve as trustee in a case under this title
qualifies if before seven days after such selection, and before
beginning official duties, such person has filed with the court
a bond in favor of the United States conditioned on the
faithful performance of such official duties.
(b)(1) The United States trustee qualifies wherever such
trustee serves as trustee in a case under this title.
(2) [The] In cases under subchapter V, the United States
trustee shall recommend to the court, and in all other cases,
the United States trustee shall determine--
(A) the amount of a bond required to be filed under
subsection (a) of this section; and
(B) the sufficiency of the surety on such bond.
(c) A trustee is not liable personally or on such trustee's
bond in favor of the United States for any penalty or
forfeiture incurred by the debtor.
(d) A proceeding on a trustee's bond may not be commenced
after two years after the date on which such trustee was
discharged.
* * * * * * *
CHAPTER 7--LIQUIDATION
* * * * * * *
SUBCHAPTER II--COLLECTION, LIQUIDATION, AND DISTRIBUTION OF THE ESTATE
* * * * * * *
Sec. 726. Distribution of property of the estate
(a) Except as provided in section 510 of this title, property
of the estate shall be distributed--
(1) first, in payment of any unpaid fees, costs, and
expenses of a special trustee appointed under section
1186, and then in payment of claims of the kind
specified in, and in the order specified in, section
507 of this title, proof of which is timely filed under
section 501 of this title or tardily filed on or before
the earlier of--
(A) the date that is 10 days after the
mailing to creditors of the summary of the
trustee's final report; or
(B) the date on which the trustee commences
final distribution under this section;
(2) second, in payment of any allowed unsecured
claim, other than a claim of a kind specified in
paragraph (1), (3), or (4) of this subsection, proof of
which is--
(A) timely filed under section 501(a) of this
title;
(B) timely filed under section 501(b) or
501(c) of this title; or
(C) tardily filed under section 501(a) of
this title, if--
(i) the creditor that holds such
claim did not have notice or actual
knowledge of the case in time for
timely filing of a proof of such claim
under section 501(a) of this title; and
(ii) proof of such claim is filed in
time to permit payment of such claim;
(3) third, in payment of any allowed unsecured claim
proof of which is tardily filed under section 501(a) of
this title, other than a claim of the kind specified in
paragraph (2)(C) of this subsection;
(4) fourth, in payment of any allowed claim, whether
secured or unsecured, for any fine, penalty, or
forfeiture, or for multiple, exemplary, or punitive
damages, arising before the earlier of the order for
relief or the appointment of a trustee, to the extent
that such fine, penalty, forfeiture, or damages are not
compensation for actual pecuniary loss suffered by the
holder of such claim;
(5) fifth, in payment of interest at the legal rate
from the date of the filing of the petition, on any
claim paid under paragraph (1), (2), (3), or (4) of
this subsection; and
(6) sixth, to the debtor.
(b) Payment on claims of a kind specified in paragraph (1),
(2), (3), (4), (5), (6), (7), (8), (9), or (10) of section
507(a) of this title, or in paragraph (2), (3), (4), or (5) of
subsection (a) of this section, shall be made pro rata among
claims of the kind specified in each such particular paragraph,
except that in a case that has been converted to this chapter
under section 1112, 1208, or 1307 of this title, a claim
allowed under section 503(b) of this title incurred under this
chapter after such conversion has priority over a claim allowed
under section 503(b) of this title incurred under any other
chapter of this title or under this chapter before such
conversion and over any expenses of a custodian superseded
under section 543 of this title.
(c) Notwithstanding subsections (a) and (b) of this section,
if there is property of the kind specified in section 541(a)(2)
of this title, or proceeds of such property, in the estate,
such property or proceeds shall be segregated from other
property of the estate, and such property or proceeds and other
property of the estate shall be distributed as follows:
(1) Claims allowed under section 503 of this title
shall be paid either from property of the kind
specified in section 541(a)(2) of this title, or from
other property of the estate, as the interest of
justice requires.
(2) Allowed claims, other than claims allowed under
section 503 of this title, shall be paid in the order
specified in subsection (a) of this section, and, with
respect to claims of a kind specified in a particular
paragraph of section 507 of this title or subsection
(a) of this section, in the following order and manner:
(A) First, community claims against the
debtor or the debtor's spouse shall be paid
from property of the kind specified in section
541(a)(2) of this title, except to the extent
that such property is solely liable for debts
of the debtor.
(B) Second, to the extent that community
claims against the debtor are not paid under
subparagraph (A) of this paragraph, such
community claims shall be paid from property of
the kind specified in section 541(a)(2) of this
title that is solely liable for debts of the
debtor.
(C) Third, to the extent that all claims
against the debtor including community claims
against the debtor are not paid under
subparagraph (A) or (B) of this paragraph such
claims shall be paid from property of the
estate other than property of the kind
specified in section 541(a)(2) of this title.
(D) Fourth, to the extent that community
claims against the debtor or the debtor's
spouse are not paid under subparagraph (A),
(B), or (C) of this paragraph, such claims
shall be paid from all remaining property of
the estate.
* * * * * * *
CHAPTER 11--REORGANIZATION
SUBCHAPTER i--officers and administration
Sec.
1101. Definitions for this chapter.
* * * * * * *
SUBCHAPTER v--liquidation, reorganization, or recapitalization of a
covered financial corporation
1181. Inapplicability of other sections.
1182. Definitions for this subchapter.
1183. Commencement of a case concerning a covered financial corporation.
1184. Regulators.
1185. Special transfer of property of the estate.
1186. Special trustee.
1187. Temporary and supplemental automatic stay; assumed debt.
1188. Treatment of qualified financial contracts and affiliate
contracts.
1189. Licenses, permits, and registrations.
1190. Exemption from securities laws.
1191. Inapplicability of certain avoiding powers.
1192. Consideration of financial stability.
SUBCHAPTER I--OFFICERS AND ADMINISTRATION
* * * * * * *
Sec. 1112. Conversion or dismissal
(a) The debtor may convert a case under this chapter to a
case under chapter 7 of this title unless--
(1) the debtor is not a debtor in possession;
(2) the case originally was commenced as an
involuntary case under this chapter; or
(3) the case was converted to a case under this
chapter other than on the debtor's request.
(b)(1) Except as provided in paragraph (2) and subsection
(c), on request of a party in interest, and after notice and a
hearing, the court shall convert a case under this chapter to a
case under chapter 7 or dismiss a case under this chapter,
whichever is in the best interests of creditors and the estate,
for cause unless the court determines that the appointment
under section 1104(a) of a trustee or an examiner is in the
best interests of creditors and the estate.
(2) The court may not convert a case under this chapter to a
case under chapter 7 or dismiss a case under this chapter if
the court finds and specifically identifies unusual
circumstances establishing that converting or dismissing the
case is not in the best interests of creditors and the estate,
and the debtor or any other party in interest establishes
that--
(A) there is a reasonable likelihood that a plan will
be confirmed within the timeframes established in
sections 1121(e) and 1129(e) of this title, or if such
sections do not apply, within a reasonable period of
time; and
(B) the grounds for converting or dismissing the case
include an act or omission of the debtor other than
under paragraph (4)(A)--
(i) for which there exists a reasonable
justification for the act or omission; and
(ii) that will be cured within a reasonable
period of time fixed by the court.
(3) The court shall commence the hearing on a motion under
this subsection not later than 30 days after filing of the
motion, and shall decide the motion not later than 15 days
after commencement of such hearing, unless the movant expressly
consents to a continuance for a specific period of time or
compelling circumstances prevent the court from meeting the
time limits established by this paragraph.
(4) For purposes of this subsection, the term ``cause''
includes--
(A) substantial or continuing loss to or diminution
of the estate and the absence of a reasonable
likelihood of rehabilitation;
(B) gross mismanagement of the estate;
(C) failure to maintain appropriate insurance that
poses a risk to the estate or to the public;
(D) unauthorized use of cash collateral substantially
harmful to 1 or more creditors;
(E) failure to comply with an order of the court;
(F) unexcused failure to satisfy timely any filing or
reporting requirement established by this title or by
any rule applicable to a case under this chapter;
(G) failure to attend the meeting of creditors
convened under section 341(a) or an examination ordered
under rule 2004 of the Federal Rules of Bankruptcy
Procedure without good cause shown by the debtor;
(H) failure timely to provide information or attend
meetings reasonably requested by the United States
trustee (or the bankruptcy administrator, if any);
(I) failure timely to pay taxes owed after the date
of the order for relief or to file tax returns due
after the date of the order for relief;
(J) failure to file a disclosure statement, or to
file or confirm a plan, within the time fixed by this
title or by order of the court;
(K) failure to pay any fees or charges required under
chapter 123 of title 28;
(L) revocation of an order of confirmation under
section 1144;
(M) inability to effectuate substantial consummation
of a confirmed plan;
(N) material default by the debtor with respect to a
confirmed plan;
(O) termination of a confirmed plan by reason of the
occurrence of a condition specified in the plan; and
(P) failure of the debtor to pay any domestic support
obligation that first becomes payable after the date of
the filing of the petition.
(c) The court may not convert a case under this chapter to a
case under chapter 7 of this title if the debtor is a farmer or
a corporation that is not a moneyed, business, or commercial
corporation, unless the debtor requests such conversion.
(d) The court may convert a case under this chapter to a case
under chapter 12 or 13 of this title only if--
(1) the debtor requests such conversion;
(2) the debtor has not been discharged under section
1141(d) of this title; and
(3) if the debtor requests conversion to chapter 12
of this title, such conversion is equitable.
(e) Except as provided in subsections (c) and (f), the court,
on request of the United States trustee, may convert a case
under this chapter to a case under chapter 7 of this title or
may dismiss a case under this chapter, whichever is in the best
interest of creditors and the estate if the debtor in a
voluntary case fails to file, within fifteen days after the
filing of the petition commencing such case or such additional
time as the court may allow, the information required by
paragraph (1) of section 521(a), including a list containing
the names and addresses of the holders of the twenty largest
unsecured claims (or of all unsecured claims if there are fewer
than twenty unsecured claims), and the approximate dollar
amounts of each of such claims.
(f) Notwithstanding any other provision of this section, a
case may not be converted to a case under another chapter of
this title unless the debtor may be a debtor under such
chapter.
(g) Notwithstanding section 109(b), the court may convert a
case under subchapter V to a case under chapter 7 if--
(1) a transfer approved under section 1185 has been
consummated;
(2) the court has ordered the appointment of a
special trustee under section 1186; and
(3) the court finds, after notice and a hearing, that
conversion is in the best interest of the creditors and
the estate.
* * * * * * *
SUBCHAPTER II--THE PLAN
* * * * * * *
Sec. 1129. Confirmation of plan
(a) The court shall confirm a plan only if all of the
following requirements are met:
(1) The plan complies with the applicable provisions
of this title.
(2) The proponent of the plan complies with the
applicable provisions of this title.
(3) The plan has been proposed in good faith and not
by any means forbidden by law.
(4) Any payment made or to be made by the proponent,
by the debtor, or by a person issuing securities or
acquiring property under the plan, for services or for
costs and expenses in or in connection with the case,
or in connection with the plan and incident to the
case, has been approved by, or is subject to the
approval of, the court as reasonable.
(5)(A)(i) The proponent of the plan has disclosed the
identity and affiliations of any individual proposed to
serve, after confirmation of the plan, as a director,
officer, or voting trustee of the debtor, an affiliate
of the debtor participating in a joint plan with the
debtor, or a successor to the debtor under the plan;
and
(ii) the appointment to, or continuance in, such
office of such individual, is consistent with the
interests of creditors and equity security holders and
with public policy; and
(B) the proponent of the plan has disclosed the
identity of any insider that will be employed or
retained by the reorganized debtor, and the nature of
any compensation for such insider.
(6) Any governmental regulatory commission with
jurisdiction, after confirmation of the plan, over the
rates of the debtor has approved any rate change
provided for in the plan, or such rate change is
expressly conditioned on such approval.
(7) With respect to each impaired class of claims or
interests--
(A) each holder of a claim or interest of
such class--
(i) has accepted the plan; or
(ii) will receive or retain under the
plan on account of such claim or
interest property of a value, as of the
effective date of the plan, that is not
less than the amount that such holder
would so receive or retain if the
debtor were liquidated under chapter 7
of this title on such date; or
(B) if section 1111(b)(2) of this title
applies to the claims of such class, each
holder of a claim of such class will receive or
retain under the plan on account of such claim
property of a value, as of the effective date
of the plan, that is not less than the value of
such holder's interest in the estate's interest
in the property that secures such claims.
(8) With respect to each class of claims or
interests--
(A) such class has accepted the plan; or
(B) such class is not impaired under the
plan.
(9) Except to the extent that the holder of a
particular claim has agreed to a different treatment of
such claim, the plan provides that--
(A) with respect to a claim of a kind
specified in section 507(a)(2) or 507(a)(3) of
this title, on the effective date of the plan,
the holder of such claim will receive on
account of such claim cash equal to the allowed
amount of such claim;
(B) with respect to a class of claims of a
kind specified in section 507(a)(1), 507(a)(4),
507(a)(5), 507(a)(6), or 507(a)(7) of this
title, each holder of a claim of such class
will receive--
(i) if such class has accepted the
plan, deferred cash payments of a
value, as of the effective date of the
plan, equal to the allowed amount of
such claim; or
(ii) if such class has not accepted
the plan, cash on the effective date of
the plan equal to the allowed amount of
such claim;
(C) with respect to a claim of a kind
specified in section 507(a)(8) of this title,
the holder of such claim will receive on
account of such claim regular installment
payments in cash--
(i) of a total value, as of the
effective date of the plan, equal to
the allowed amount of such claim;
(ii) over a period ending not later
than 5 years after the date of the
order for relief under section 301,
302, or 303; and
(iii) in a manner not less favorable
than the most favored nonpriority
unsecured claim provided for by the
plan (other than cash payments made to
a class of creditors under section
1122(b)); and
(D) with respect to a secured claim which
would otherwise meet the description of an
unsecured claim of a governmental unit under
section 507(a)(8), but for the secured status
of that claim, the holder of that claim will
receive on account of that claim, cash
payments, in the same manner and over the same
period, as prescribed in subparagraph (C).
(10) If a class of claims is impaired under the plan,
at least one class of claims that is impaired under the
plan has accepted the plan, determined without
including any acceptance of the plan by any insider.
(11) Confirmation of the plan is not likely to be
followed by the liquidation, or the need for further
financial reorganization, of the debtor or any
successor to the debtor under the plan, unless such
liquidation or reorganization is proposed in the plan.
(12) All fees payable under section 1930 of title 28,
as determined by the court at the hearing on
confirmation of the plan, have been paid or the plan
provides for the payment of all such fees on the
effective date of the plan.
(13) The plan provides for the continuation after its
effective date of payment of all retiree benefits, as
that term is defined in section 1114 of this title, at
the level established pursuant to subsection (e)(1)(B)
or (g) of section 1114 of this title, at any time prior
to confirmation of the plan, for the duration of the
period the debtor has obligated itself to provide such
benefits.
(14) If the debtor is required by a judicial or
administrative order, or by statute, to pay a domestic
support obligation, the debtor has paid all amounts
payable under such order or such statute for such
obligation that first become payable after the date of
the filing of the petition.
(15) In a case in which the debtor is an individual
and in which the holder of an allowed unsecured claim
objects to the confirmation of the plan--
(A) the value, as of the effective date of
the plan, of the property to be distributed
under the plan on account of such claim is not
less than the amount of such claim; or
(B) the value of the property to be
distributed under the plan is not less than the
projected disposable income of the debtor (as
defined in section 1325(b)(2)) to be received
during the 5-year period beginning on the date
that the first payment is due under the plan,
or during the period for which the plan
provides payments, whichever is longer.
(16) All transfers of property under the plan shall
be made in accordance with any applicable provisions of
nonbankruptcy law that govern the transfer of property
by a corporation or trust that is not a moneyed,
business, or commercial corporation or trust.
(17) In a case under subchapter V, all payable fees,
costs, and expenses of the special trustee have been
paid or the plan provides for the payment of all such
fees, costs, and expenses on the effective date of the
plan.
(18) In a case under subchapter V, confirmation of
the plan is not likely to cause serious adverse effects
on financial stability in the United States.
(b)(1) Notwithstanding section 510(a) of this title, if all
of the applicable requirements of subsection (a) of this
section other than paragraph (8) are met with respect to a
plan, the court, on request of the proponent of the plan, shall
confirm the plan notwithstanding the requirements of such
paragraph if the plan does not discriminate unfairly, and is
fair and equitable, with respect to each class of claims or
interests that is impaired under, and has not accepted, the
plan.
(2) For the purpose of this subsection, the condition that a
plan be fair and equitable with respect to a class includes the
following requirements:
(A) With respect to a class of secured claims, the
plan provides--
(i)(I) that the holders of such claims retain
the liens securing such claims, whether the
property subject to such liens is retained by
the debtor or transferred to another entity, to
the extent of the allowed amount of such
claims; and
(II) that each holder of a claim of such
class receive on account of such claim deferred
cash payments totaling at least the allowed
amount of such claim, of a value, as of the
effective date of the plan, of at least the
value of such holder's interest in the estate's
interest in such property;
(ii) for the sale, subject to section 363(k)
of this title, of any property that is subject
to the liens securing such claims, free and
clear of such liens, with such liens to attach
to the proceeds of such sale, and the treatment
of such liens on proceeds under clause (i) or
(iii) of this subparagraph; or
(iii) for the realization by such holders of
the indubitable equivalent of such claims.
(B) With respect to a class of unsecured claims--
(i) the plan provides that each holder of a
claim of such class receive or retain on
account of such claim property of a value, as
of the effective date of the plan, equal to the
allowed amount of such claim; or
(ii) the holder of any claim or interest that
is junior to the claims of such class will not
receive or retain under the plan on account of
such junior claim or interest any property,
except that in a case in which the debtor is an
individual, the debtor may retain property
included in the estate under section 1115,
subject to the requirements of subsection
(a)(14) of this section.
(C) With respect to a class of interests--
(i) the plan provides that each holder of an
interest of such class receive or retain on
account of such interest property of a value,
as of the effective date of the plan, equal to
the greatest of the allowed amount of any fixed
liquidation preference to which such holder is
entitled, any fixed redemption price to which
such holder is entitled, or the value of such
interest; or
(ii) the holder of any interest that is
junior to the interests of such class will not
receive or retain under the plan on account of
such junior interest any property.
(c) Notwithstanding subsections (a) and (b) of this section
and except as provided in section 1127(b) of this title, the
court may confirm only one plan, unless the order of
confirmation in the case has been revoked under section 1144 of
this title. If the requirements of subsections (a) and (b) of
this section are met with respect to more than one plan, the
court shall consider the preferences of creditors and equity
security holders in determining which plan to confirm.
(d) Notwithstanding any other provision of this section, on
request of a party in interest that is a governmental unit, the
court may not confirm a plan if the principal purpose of the
plan is the avoidance of taxes or the avoidance of the
application of section 5 of the Securities Act of 1933. In any
hearing under this subsection, the governmental unit has the
burden of proof on the issue of avoidance.
(e) In a small business case, the court shall confirm a plan
that complies with the applicable provisions of this title and
that is filed in accordance with section 1121(e) not later than
45 days after the plan is filed unless the time for
confirmation is extended in accordance with section 1121(e)(3).
* * * * * * *
SUBCHAPTER V--LIQUIDATION, REORGANIZATION, OR RECAPITALIZATION OF A
COVERED FINANCIAL CORPORATION
Sec. 1181. Inapplicability of other sections
Sections 303 and 321(c) do not apply in a case under this
subchapter concerning a covered financial corporation. Section
365 does not apply to a transfer under section 1185, 1187, or
1188.
Sec. 1182. Definitions for this subchapter
In this subchapter, the following definitions shall apply:
(1) The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(2) The term ``bridge company'' means a newly formed
corporation to which property of the estate may be
transferred under section 1185(a) and the equity
securities of which may be transferred to a special
trustee under section 1186(a).
(3) The term ``capital structure debt'' means all
unsecured debt of the debtor for borrowed money for
which the debtor is the primary obligor, other than a
qualified financial contract and other than debt
secured by a lien on property of the estate that is to
be transferred to a bridge company pursuant to an order
of the court under section 1185(a).
(4) The term ``contractual right'' means a
contractual right of a kind defined in section 555,
556, 559, 560, or 561.
(5) The term ``qualified financial contract'' means
any contract of a kind defined in paragraph (25),
(38A), (47), or (53B) of section 101, section 741(7),
or paragraph (4), (5), (11), or (13) of section 761.
(6) The term ``special trustee'' means the trustee of
a trust formed under section 1186(a)(1).
Sec. 1183. Commencement of a case concerning a covered financial
corporation
(a) A case under this subchapter concerning a covered
financial corporation may be commenced by the filing of a
petition with the court by the debtor under section 301 only if
the debtor states to the best of its knowledge under penalty of
perjury in the petition that it is a covered financial
corporation.
(b) The commencement of a case under subsection (a)
constitutes an order for relief under this subchapter.
(c) The members of the board of directors (or body performing
similar functions) of a covered financial corporation shall
have no liability to shareholders, creditors, or other parties
in interest for a good faith filing of a petition to commence a
case under this subchapter, or for any reasonable action taken
in good faith in contemplation of such a petition or a transfer
under section 1185 or section 1186, whether prior to or after
commencement of the case.
(d) Counsel to the debtor shall provide, to the greatest
extent practicable without disclosing the identity of the
potential debtor, sufficient confidential notice to the chief
judge of the court of appeals for the circuit embracing the
district in which such counsel intends to file a petition to
commence a case under this subchapter regarding the potential
commencement of such case. The chief judge of such court shall
randomly assign to preside over such case a bankruptcy judge
selected from among the bankruptcy judges designated by the
Chief Justice of the United States under section 298 of title
28.
Sec. 1184. Regulators
The Board, the Securities Exchange Commission, the Office of
the Comptroller of the Currency of the Department of the
Treasury, the Commodity Futures Trading Commission, and the
Federal Deposit Insurance Corporation may raise and may appear
and be heard on any issue in any case or proceeding under this
subchapter.
Sec. 1185. Special transfer of property of the estate
(a) On request of the trustee, and after notice and a hearing
that shall occur not less than 24 hours after the order for
relief, the court may order a transfer under this section of
property of the estate, and the assignment of executory
contracts, unexpired leases, and qualified financial contracts
of the debtor, to a bridge company. Upon the entry of an order
approving such transfer, any property transferred, and any
executory contracts, unexpired leases, and qualified financial
contracts assigned under such order shall no longer be property
of the estate. Except as provided under this section, the
provisions of section 363 shall apply to a transfer and
assignment under this section.
(b) Unless the court orders otherwise, notice of a request
for an order under subsection (a) shall consist of electronic
or telephonic notice of not less than 24 hours to--
(1) the debtor;
(2) the holders of the 20 largest secured claims
against the debtor;
(3) the holders of the 20 largest unsecured claims
against the debtor;
(4) counterparties to any debt, executory contract,
unexpired lease, and qualified financial contract
requested to be transferred under this section;
(5) the Board;
(6) the Federal Deposit Insurance Corporation;
(7) the Secretary of the Treasury and the Office of
the Comptroller of the Currency of the Treasury;
(8) the Commodity Futures Trading Commission;
(9) the Securities and Exchange Commission;
(10) the United States trustee or bankruptcy
administrator; and
(11) each primary financial regulatory agency, as
defined in section 2(12) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, with respect to any
affiliate the equity securities of which are proposed
to be transferred under this section.
(c) The court may not order a transfer under this section
unless the court determines, based upon a preponderance of the
evidence, that--
(1) the transfer under this section is necessary to
prevent serious adverse effects on financial stability
in the United States;
(2) the transfer does not provide for the assumption
of any capital structure debt by the bridge company;
(3) the transfer does not provide for the transfer to
the bridge company of any property of the estate that
is subject to a lien securing a debt, executory
contract, unexpired lease or agreement (including a
qualified financial contract) of the debtor unless--
(A)(i) the bridge company assumes such debt,
executory contract, unexpired lease or
agreement (including a qualified financial
contract), including any claims arising in
respect thereof that would not be allowed
secured claims under section 506(a)(1) and
after giving effect to such transfer, such
property remains subject to the lien securing
such debt, executory contract, unexpired lease
or agreement (including a qualified financial
contract); and
(ii) the court has determined that assumption
of such debt, executory contract, unexpired
lease or agreement (including a qualified
financial contract) by the bridge company is in
the best interests of the estate; or
(B) such property is being transferred to the
bridge company in accordance with the
provisions of section 363;
(4) the transfer does not provide for the assumption
by the bridge company of any debt, executory contract,
unexpired lease or agreement (including a qualified
financial contract) of the debtor secured by a lien on
property of the estate unless the transfer provides for
such property to be transferred to the bridge company
in accordance with paragraph (3)(A) of this subsection;
(5) the transfer does not provide for the transfer of
the equity of the debtor;
(6) the trustee has demonstrated that the bridge
company is not likely to fail to meet the obligations
of any debt, executory contract, qualified financial
contract, or unexpired lease assumed and assigned to
the bridge company;
(7) the transfer provides for the transfer to a
special trustee all of the equity securities in the
bridge company and appointment of a special trustee in
accordance with section 1186;
(8) after giving effect to the transfer, adequate
provision has been made for the fees, costs, and
expenses of the estate and special trustee; and
(9) the bridge company will have governing documents,
and initial directors and senior officers, that are in
the best interest of creditors and the estate.
(d) Immediately before a transfer under this section, the
bridge company that is the recipient of the transfer shall--
(1) not have any property, executory contracts,
unexpired leases, qualified financial contracts, or
debts, other than any property acquired or executory
contracts, unexpired leases, or debts assumed when
acting as a transferee of a transfer under this
section; and
(2) have equity securities that are property of the
estate, which may be sold or distributed in accordance
with this title.
Sec. 1186. Special trustee
(a)(1) An order approving a transfer under section 1185 shall
require the trustee to transfer to a qualified and independent
special trustee, who is appointed by the court, all of the
equity securities in the bridge company that is the recipient
of a transfer under section 1185 to hold in trust for the sole
benefit of the estate, subject to satisfaction of the special
trustee's fees, costs, and expenses. The trust of which the
special trustee is the trustee shall be a newly formed trust
governed by a trust agreement approved by the court as in the
best interests of the estate, and shall exist for the sole
purpose of holding and administering, and shall be permitted to
dispose of, the equity securities of the bridge company in
accordance with the trust agreement.
(2) In connection with the hearing to approve a transfer
under section 1185, the trustee shall confirm to the court that
the Board has been consulted regarding the identity of the
proposed special trustee and advise the court of the results of
such consultation.
(b) The trust agreement governing the trust shall provide--
(1) for the payment of the fees, costs, expenses, and
indemnities of the special trustee from the assets of
the debtor's estate;
(2) that the special trustee provide--
(A) quarterly reporting to the estate, which
shall be filed with the court; and
(B) information about the bridge company
reasonably requested by a party in interest to
prepare a disclosure statement for a plan
providing for distribution of any securities of
the bridge company if such information is
necessary to prepare such disclosure statement;
(3) that for as long as the equity securities of the
bridge company are held by the trust, the special
trustee shall file a notice with the court in
connection with--
(A) any change in a director or senior
officer of the bridge company;
(B) any modification to the governing
documents of the bridge company; and
(C) any material corporate action of the
bridge company, including--
(i) recapitalization;
(ii) a material borrowing;
(iii) termination of an intercompany
debt or guarantee;
(iv) a transfer of a substantial
portion of the assets of the bridge
company; or
(v) the issuance or sale of any
securities of the bridge company;
(4) that any sale of any equity securities of the
bridge company shall not be consummated until the
special trustee consults with the Federal Deposit
Insurance Corporation and the Board regarding such sale
and discloses the results of such consultation with the
court;
(5) that, subject to reserves for payments permitted
under paragraph (1) provided for in the trust
agreement, the proceeds of the sale of any equity
securities of the bridge company by the special trustee
be held in trust for the benefit of or transferred to
the estate;
(6) the process and guidelines for the replacement of
the special trustee; and
(7) that the property held in trust by the special
trustee is subject to distribution in accordance with
subsection (c).
(c)(1) The special trustee shall distribute the assets held
in trust--
(A) if the court confirms a plan in the case, in
accordance with the plan on the effective date of the
plan; or
(B) if the case is converted to a case under chapter
7, as ordered by the court.
(2) As soon as practicable after a final distribution under
paragraph (1), the office of the special trustee shall
terminate, except as may be necessary to wind up and conclude
the business and financial affairs of the trust.
(d) After a transfer to the special trustee under this
section, the special trustee shall be subject only to
applicable nonbankruptcy law, and the actions and conduct of
the special trustee shall no longer be subject to approval by
the court in the case under this subchapter.
Sec. 1187. Temporary and supplemental automatic stay; assumed debt
(a)(1) A petition filed under section 1183 operates as a
stay, applicable to all entities, of the termination,
acceleration, or modification of any debt, contract, lease, or
agreement of the kind described in paragraph (2), or of any
right or obligation under any such debt, contract, lease, or
agreement, solely because of--
(A) a default by the debtor under any such debt,
contract, lease, or agreement; or
(B) a provision in such debt, contract, lease, or
agreement, or in applicable nonbankruptcy law, that is
conditioned on--
(i) the insolvency or financial condition of
the debtor at any time before the closing of
the case;
(ii) the commencement of a case under this
title concerning the debtor;
(iii) the appointment of or taking possession
by a trustee in a case under this title
concerning the debtor or by a custodian before
the commencement of the case; or
(iv) a credit rating agency rating, or
absence or withdrawal of a credit rating agency
rating--
(I) of the debtor at any time after
the commencement of the case;
(II) of an affiliate during the
period from the commencement of the
case until 48 hours after such order is
entered;
(III) of the bridge company while the
trustee or the special trustee is a
direct or indirect beneficial holder of
more than 50 percent of the equity
securities of--
(aa) the bridge company; or
(bb) the affiliate, if all of
the direct or indirect
interests in the affiliate that
are property of the estate are
transferred under section 1185;
or
(IV) of an affiliate while the
trustee or the special trustee is a
direct or indirect beneficial holder of
more than 50 percent of the equity
securities of--
(aa) the bridge company; or
(bb) the affiliate, if all of
the direct or indirect
interests in the affiliate that
are property of the estate are
transferred under section 1185.
(2) A debt, contract, lease, or agreement described in this
paragraph is--
(A) any debt (other than capital structure debt),
executory contract, or unexpired lease of the debtor
(other than a qualified financial contract);
(B) any agreement under which the debtor issued or is
obligated for debt (other than capital structure debt);
(C) any debt, executory contract, or unexpired lease
of an affiliate (other than a qualified financial
contract); or
(D) any agreement under which an affiliate issued or
is obligated for debt.
(3) The stay under this subsection terminates--
(A) for the benefit of the debtor, upon the earliest
of--
(i) 48 hours after the commencement of the
case;
(ii) assumption of the debt, contract, lease,
or agreement by the bridge company under an
order authorizing a transfer under section
1185;
(iii) a final order of the court denying the
request for a transfer under section 1185; or
(iv) the time the case is dismissed; and
(B) for the benefit of an affiliate, upon the
earliest of--
(i) the entry of an order authorizing a
transfer under section 1185 in which the direct
or indirect interests in the affiliate that are
property of the estate are not transferred
under section 1185;
(ii) a final order by the court denying the
request for a transfer under section 1185;
(iii) 48 hours after the commencement of the
case if the court has not ordered a transfer
under section 1185; or
(iv) the time the case is dismissed.
(4) Subsections (d), (e), (f), and (g) of section 362 apply
to a stay under this subsection.
(b) A debt, executory contract (other than a qualified
financial contract), or unexpired lease of the debtor, or an
agreement under which the debtor has issued or is obligated for
any debt, may be assumed by a bridge company in a transfer
under section 1185 notwithstanding any provision in an
agreement or in applicable nonbankruptcy law that--
(1) prohibits, restricts, or conditions the
assignment of the debt, contract, lease, or agreement;
or
(2) accelerates, terminates, or modifies, or permits
a party other than the debtor to terminate or modify,
the debt, contract, lease, or agreement on account of--
(A) the assignment of the debt, contract,
lease, or agreement; or
(B) a change in control of any party to the
debt, contract, lease, or agreement.
(c)(1) A debt, contract, lease, or agreement of the kind
described in subparagraph (A) or (B) of subsection (a)(2) may
not be accelerated, terminated, or modified, and any right or
obligation under such debt, contract, lease, or agreement may
not be accelerated, terminated, or modified, as to the bridge
company solely because of a provision in the debt, contract,
lease, or agreement or in applicable nonbankruptcy law--
(A) of the kind described in subsection (a)(1)(B) as
applied to the debtor;
(B) that prohibits, restricts, or conditions the
assignment of the debt, contract, lease, or agreement;
or
(C) that accelerates, terminates, or modifies, or
permits a party other than the debtor to terminate or
modify, the debt, contract, lease or agreement on
account of--
(i) the assignment of the debt, contract,
lease, or agreement; or
(ii) a change in control of any party to the
debt, contract, lease, or agreement.
(2) If there is a default by the debtor under a provision
other than the kind described in paragraph (1) in a debt,
contract, lease or agreement of the kind described in
subparagraph (A) or (B) of subsection (a)(2), the bridge
company may assume such debt, contract, lease, or agreement
only if the bridge company--
(A) shall cure the default;
(B) compensates, or provides adequate assurance in
connection with a transfer under section 1185 that the
bridge company will promptly compensate, a party other
than the debtor to the debt, contract, lease, or
agreement, for any actual pecuniary loss to the party
resulting from the default; and
(C) provides adequate assurance in connection with a
transfer under section 1185 of future performance under
the debt, contract, lease, or agreement, as determined
by the court under section 1185(c)(4).
Sec. 1188. Treatment of qualified financial contracts and affiliate
contracts
(a) Notwithstanding sections 362(b)(6), 362(b)(7),
362(b)(17), 362(b)(27), 362(o), 555, 556, 559, 560, and 561, a
petition filed under section 1183 operates as a stay, during
the period specified in section 1187(a)(3)(A), applicable to
all entities, of the exercise of a contractual right--
(1) to cause the modification, liquidation,
termination, or acceleration of a qualified financial
contract of the debtor or an affiliate;
(2) to offset or net out any termination value,
payment amount, or other transfer obligation arising
under or in connection with a qualified financial
contract of the debtor or an affiliate; or
(3) under any security agreement or arrangement or
other credit enhancement forming a part of or related
to a qualified financial contract of the debtor or an
affiliate.
(b)(1) During the period specified in section 1187(a)(3)(A),
the trustee or the affiliate shall perform all payment and
delivery obligations under such qualified financial contract of
the debtor or the affiliate, as the case may be, that become
due after the commencement of the case. The stay provided under
subsection (a) terminates as to a qualified financial contract
of the debtor or an affiliate immediately upon the failure of
the trustee or the affiliate, as the case may be, to perform
any such obligation during such period.
(2) Any failure by a counterparty to any qualified financial
contract of the debtor or any affiliate to perform any payment
or delivery obligation under such qualified financial contract,
including during the pendency of the stay provided under
subsection (a), shall constitute a breach of such qualified
financial contract by the counterparty.
(c) Subject to the court's approval, a qualified financial
contract between an entity and the debtor may be assigned to or
assumed by the bridge company in a transfer under, and in
accordance with, section 1185 if and only if--
(1) all qualified financial contracts between the
entity and the debtor are assigned to and assumed by
the bridge company in the transfer under section 1185;
(2) all claims of the entity against the debtor in
respect of any qualified financial contract between the
entity and the debtor (other than any claim that, under
the terms of the qualified financial contract, is
subordinated to the claims of general unsecured
creditors) are assigned to and assumed by the bridge
company;
(3) all claims of the debtor against the entity under
any qualified financial contract between the entity and
the debtor are assigned to and assumed by the bridge
company; and
(4) all property securing or any other credit
enhancement furnished by the debtor for any qualified
financial contract described in paragraph (1) or any
claim described in paragraph (2) or (3) under any
qualified financial contract between the entity and the
debtor is assigned to and assumed by the bridge
company.
(d) Notwithstanding any provision of a qualified financial
contract or of applicable nonbankruptcy law, a qualified
financial contract of the debtor that is assumed or assigned in
a transfer under section 1185 may not be accelerated,
terminated, or modified, after the entry of the order approving
a transfer under section 1185, and any right or obligation
under the qualified financial contract may not be accelerated,
terminated, or modified, after the entry of the order approving
a transfer under section 1185 solely because of a condition
described in section 1187(c)(1), other than a condition of the
kind specified in section 1187(b) that occurs after property of
the estate no longer includes a direct beneficial interest or
an indirect beneficial interest through the special trustee, in
more than 50 percent of the equity securities of the bridge
company.
(e) Notwithstanding any provision of any agreement or in
applicable nonbankruptcy law, an agreement of an affiliate
(including an executory contract, an unexpired lease, qualified
financial contract, or an agreement under which the affiliate
issued or is obligated for debt) and any right or obligation
under such agreement may not be accelerated, terminated, or
modified, solely because of a condition described in section
1187(c)(1), other than a condition of the kind specified in
section 1187(b) that occurs after the bridge company is no
longer a direct or indirect beneficial holder of more than 50
percent of the equity securities of the affiliate, at any time
after the commencement of the case if--
(1) all direct or indirect interests in the affiliate
that are property of the estate are transferred under
section 1185 to the bridge company within the period
specified in subsection (a);
(2) the bridge company assumes--
(A) any guarantee or other credit enhancement
issued by the debtor relating to the agreement
of the affiliate; and
(B) any obligations in respect of rights of
setoff, netting arrangement, or debt of the
debtor that directly arises out of or directly
relates to the guarantee or credit enhancement;
and
(3) any property of the estate that directly serves
as collateral for the guarantee or credit enhancement
is transferred to the bridge company.
Sec. 1189. Licenses, permits, and registrations
(a) Notwithstanding any otherwise applicable nonbankruptcy
law, if a request is made under section 1185 for a transfer of
property of the estate, any Federal, State, or local license,
permit, or registration that the debtor or an affiliate had
immediately before the commencement of the case and that is
proposed to be transferred under section 1185 may not be
accelerated, terminated, or modified at any time after the
request solely on account of--
(1) the insolvency or financial condition of the
debtor at any time before the closing of the case;
(2) the commencement of a case under this title
concerning the debtor;
(3) the appointment of or taking possession by a
trustee in a case under this title concerning the
debtor or by a custodian before the commencement of the
case; or
(4) a transfer under section 1185.
(b) Notwithstanding any otherwise applicable nonbankruptcy
law, any Federal, State, or local license, permit, or
registration that the debtor had immediately before the
commencement of the case that is included in a transfer under
section 1185 shall be valid and all rights and obligations
thereunder shall vest in the bridge company.
Sec. 1190. Exemption from securities laws
For purposes of section 1145, a security of the bridge
company shall be deemed to be a security of a successor to the
debtor under a plan if the court approves the disclosure
statement for the plan as providing adequate information (as
defined in section 1125(a)) about the bridge company and the
security.
Sec. 1191. Inapplicability of certain avoiding powers
A transfer made or an obligation incurred by the debtor to an
affiliate prior to or after the commencement of the case,
including any obligation released by the debtor or the estate
to or for the benefit of an affiliate, in contemplation of or
in connection with a transfer under section 1185 is not
avoidable under section 544, 547, 548(a)(1)(B), or 549, or
under any similar nonbankruptcy law.
Sec. 1192. Consideration of financial stability
The court may consider the effect that any decision in
connection with this subchapter may have on financial stability
in the United States.
* * * * * * *
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TITLE 28, UNITED STATES CODE
PART I--ORGANIZATION OF COURTS
* * * * * * *
CHAPTER 13--ASSIGNMENT OF JUDGES TO OTHER COURTS
Sec.
291. Circuit judges.
* * * * * * *
298. Judge for a case under subchapter V of chapter 11 of title 11.
* * * * * * *
Sec. 298. Judge for a case under subchapter V of chapter 11 of title 11
(a)(1) Notwithstanding section 295, the Chief Justice of the
United States shall designate not fewer than 10 bankruptcy
judges to be available to hear a case under subchapter V of
chapter 11 of title 11. Bankruptcy judges may request to be
considered by the Chief Justice of the United States for such
designation.
(2) Notwithstanding section 155, a case under subchapter V of
chapter 11 of title 11 shall be heard under section 157 by a
bankruptcy judge designated under paragraph (1), who shall be
randomly assigned to hear such case by the chief judge of the
court of appeals for the circuit embracing the district in
which the case is pending. To the greatest extent practicable,
the approvals required under section 155 should be obtained.
(3) If the bankruptcy judge assigned to hear a case under
paragraph (2) is not assigned to the district in which the case
is pending, the bankruptcy judge shall be temporarily assigned
to the district.
(b) A case under subchapter V of chapter 11 of title 11, and
all proceedings in the case, shall take place in the district
in which the case is pending.
(c) In this section, the term ``covered financial
corporation'' has the meaning given that term in section
101(9A) of title 11.
* * * * * * *
PART IV--JURISDICTION AND VENUE
* * * * * * *
CHAPTER 85--DISTRICT COURTS; JURISDICTION
* * * * * * *
Sec. 1334. Bankruptcy cases and proceedings
(a) Except as provided in subsection (b) of this section, the
district courts shall have original and exclusive jurisdiction
of all cases under title 11.
(b) Except as provided in subsection (e)(2), and
notwithstanding any Act of Congress that confers exclusive
jurisdiction on a court or courts other than the district
courts, the district courts shall have original but not
exclusive jurisdiction of all civil proceedings arising under
title 11, or arising in or related to cases under title 11.
(c)(1) Except with respect to a case under chapter 15 of
title 11, nothing in this section prevents a district court in
the interest of justice, or in the interest of comity with
State courts or respect for State law, from abstaining from
hearing a particular proceeding arising under title 11 or
arising in or related to a case under title 11.
(2) Upon timely motion of a party in a proceeding
based upon a State law claim or State law cause of
action, related to a case under title 11 but not
arising under title 11 or arising in a case under title
11, with respect to which an action could not have been
commenced in a court of the United States absent
jurisdiction under this section, the district court
shall abstain from hearing such proceeding if an action
is commenced, and can be timely adjudicated, in a State
forum of appropriate jurisdiction.
(d) Any decision to abstain or not to abstain made under
subsection (c) (other than a decision not to abstain in a
proceeding described in subsection (c)(2)) is not reviewable by
appeal or otherwise by the court of appeals under section
158(d), 1291, or 1292 of this title or by the Supreme Court of
the United States under section 1254 of this title. Subsection
(c) and this subsection shall not be construed to limit the
applicability of the stay provided for by section 362 of title
11, United States Code, as such section applies to an action
affecting the property of the estate in bankruptcy.
(e) The district court in which a case under title 11 is
commenced or is pending shall have exclusive jurisdiction--
(1) of all the property, wherever located, of the
debtor as of the commencement of such case, and of
property of the estate; and
(2) over all claims or causes of action that involve
construction of section 327 of title 11, United States
Code, or rules relating to disclosure requirements
under section 327.
(f) This section does not grant jurisdiction to the district
court after a transfer pursuant to an order under section 1185
of title 11 of any proceeding related to a special trustee
appointed, or to a bridge company formed, in connection with a
case under subchapter V of chapter 11 of title 11.
* * * * * * *
DISSENTING VIEWS OF REP. NITA LOWEY AND REP. MIKE QUIGLEY
The Financial Services and General Government (FSGG) bill
funds critical programs that impact the lives of every American
in their capacity as consumers, as investors, and as taxpayers.
The bill's jurisdiction covers a diverse range of agencies
including those that provide oversight and regulation of the
financial and telecommunications industries, manage government
buildings and infrastructure projects, and oversee the federal
workforce. In addition, funding in this bill supports the
operations of the White House, the Federal Judiciary, and the
District of Columbia.
We appreciate Chairman Graves' efforts in assembling the
Fiscal Year (FY) 2018 FSGG bill. We were pleased to cooperate
with the Chairman to identify areas of common ground. However,
the overwhelming share of funding decisions and policy
provisions in this bill reflect an unprecedented degree of
focus on partisan priorities from the Majority's side of the
aisle.
The bill's FY 2018 allocation is $20,231,000,000. This
level is $1,283,967,000 below the FY 2017 level, a cut of 6
percent. Such an allocation requires severe programmatic cuts
and is unsustainable. Taxpayers would find an Internal Revenue
Service (IRS) unable to handle basic requests for information
after years of no growth budgets manifest in worsened customer
service. Government agencies pay rent to a landlord that would
not fulfill its basic repair responsibilities because this
Committee uses those rent payments for other unrelated
priorities and does not put it back into the Government
Services Administration (GSA).
Despite the unrealistically insufficient allocation, the
bill rejects at least a few of the Trump Administration's worst
proposals. For example, the bill restores funding to current FY
2017 levels for two Treasury Department functions that are key
to national security--the Financial Crimes Enforcement Network
and the office of Terrorism and Financial Intelligence. It is
clear that both are in need of even greater resources, but
freezing investment at the fiscal year 2017 level is certainly
preferable to the dangerous cuts proposed in the President's
budget request. In short, while we appreciate the efforts the
Chairman made to adequately fund these particular programs,
they are small bright spots in an otherwise dismal bill.
The best example of the inadequacy of this bill is the 23
percent cut to the Community Development Financial Institutions
Fund (CDFI). While the Committee does not fully embrace
President Trump's proposal to end CDFI grants, this steep cut
would greatly reduce access to financing and affordable
financial services in countless rural, urban, low-income, and
Native American communities nationwide.
Another particularly irresponsible cut targets the GSA,
which functions as the Federal Government's developer and
landlord. The bill decimates funding for the Federal Buildings
Fund, forcing the agency to neglect high priority safety and
security projects. This lack of sufficient funding for repair
projects further exacerbates an already dire situation.
Persistently inadequate appropriations for GSA in recent years
have resulted in a $1.1 billion backlog for GSA's repairs and
alterations programs. Again, these decisions do not make long-
term fiscal sense. Every dollar that GSA does not reinvest back
into basic maintenance and repairs now leads to a long-term
capital liability of four to five dollars in the future.
In addition, zero funding for the new construction account
at GSA means forgoing three critical Land Ports of Entry
projects which would negatively impact the lawful trade, travel
and the security of this country.
The bill even inexplicably rescinds previously appropriated
GSA funding for a much-needed consolidation and modernization
for the headquarters of the Federal Bureau Investigations
(FBI), which Rep. Dutch Ruppersberger offered an amendment to
reverse. The current FBI headquarters is in such disrepair that
it constitutes a national security threat by preventing FBI
employees from having access to necessary and secure facilities
to do their important work protecting our nation. This project
has been years in the making, and this rescission takes our
nation backward in addressing this urgently needed
infrastructure improvement.
The bill contains numerous funding levels and legislative
text to make it easier for large financial institutions to
return to the practices that led to the collapse of the U.S.
economy in 2008. The Securities and Exchange Commission (SEC)
is funded at $1.602 billion for core functions, an inadequate
level that would ensure a lack of enforcement on Wall Street.
Rep. Aguilar offered an amendment to boost resources for SEC
that failed despite the fact that the proposed increase would
be deficit neutral and does not spend taxpayer funds.
Republicans are hiding behind false declarations of fiscal
responsibility in order to pursue policies that are in fact
aimed at protecting Wall Street interest.
The Committee adopted an outrageous amendment that would
significantly weaken consumer protections against Pyramid
Schemes and make it easier for predatory businesses to target
vulnerable populations, particularly immigrant communities.
Most troubling is the inclusion of an eighty-eight page
authorization bill that significantly rolls back enhanced
consumer protections implemented through the landmark Dodd-
Frank Act. The distilled version of the majority's Financial
Choice Act would repeal mechanisms put in place to ensure that
American taxpayers are never again forced to bail out Wall
Street and suffer personal financial ruin as a result of the
reckless practices at irresponsible institutions. Not only is
the content of this legislative proposal wrong-headed and
dangerous, but it has no place hiding in an appropriations
bill. Congress has a process for debating and enacting this
type of law which allows for transparency and public input.
Rep. Mark Pocan's amendment to strip that authorization was
unanimously rejected by Republicans.
The bill continues the Republican tradition of interfering
in the local affairs of the District of Columbia by restricting
the District from spending its own funds with autonomy. As in
past years, the bill contains a variety of provisions that
impose limits on the District's ability to govern itself. Even
worse, a disappointing Republican amendment was adopted
prohibiting the District of Columbia from implementing a new
law adopted by its locally elected government to allow city
residents access to medical aid in dying in certain cases. We
were particularly offended by the statement in Committee that
the law would encourage terminally ill persons to flock to the
District to obtain such aid, when the law clearly makes such
aid available only to its residents.
Democrats also tried to roll back the provisions that
interfere in women's health decisions. Our Republican
colleagues evidently are not satisfied with the restrictions
already in place under current law, so this year's FSGG
appropriations bill carries a new provision to make it even
more difficult for a woman to purchase the health insurance she
wants. Federal law already prohibits Federal funds from being
used to pay for abortion services, so these poison-pill riders
are utterly unnecessary. Mrs. Lowey offered an amendment to
strike these harmful provisions and protect a woman's right to
make legal and private health choices without government
interference. By opposing adoption of this important amendment
while passing the amendment related to medical aid in dying,
the Republican Majority continued its hypocritical allegiance
to limited government, until it concerns a women's right to
choose or an individual's right to die in a manner of his or
her choosing under a doctor's care.
In an attempt to undermine the Affordable Care Act, this
bill blocks the IRS from enforcing the individual coverage
mandate. This will create greater uncertainty within individual
healthcare exchanges around the country and cause insurance
premiums to rise substantially. The American people have made
it increasingly clear that they want Congress to fix the ACA,
not sabotage it. That's why we were extremely disappointed that
the Republicans would not agree to Rep. Quigley's amendment to
repeal this harmful rider.
Rep. Aguilar offered an amendment, which passed by voice
vote, to make sure that Dreamers, certain non-criminal
immigrants that entered the country as children and remain
without U.S. citizenship, can lend their talents to the Federal
workforce. Democrats will work to ensure that this language
remains intact.
Unfortunately, that was the only case of success in our
attempts to oppose the long list of ideological riders in the
bill. Two common-sense amendments were not adopted that would
have prevented President Trump's so-called Commission on
Election Integrity from compelling states to share non-publicly
available individual voting data. Republican and Democratic
Governors alike have objected to the Trump administration's
federal overreach and violation of privacy for individual
voters.
All across the bill, similarly unwise cuts will reduce the
ability of the government to effectively protect consumers and
investors and investigate tax cheats and collect revenues. The
bill will also necessitate the furlough of many hundreds of
federal and private workers, increase unemployment, and reduce
vital services to the public. Overall, the proposed spending
reductions are not fiscally responsible since they will
actually increase costs in the future through reduced revenue
and diminished enforcement. As a consequence, we are gravely
concerned that the bill fails to make the necessary investments
to confront the challenges facing this nation. Of equal concern
are the reckless and ill-advised policy riders that do not
belong on an appropriations bill. Many of these provisions
threaten to impose even greater damage to the nation's
democratic principles and core financial infrastructure.
Mike Quigley.
Nita M. Lowey.
ADDITIONAL VIEWS OF ROBERT B. ADERHOLT, JOHN ABNEY CULBERSON, JOHN R.
CARTER, KEN CALVERT, TOM COLE, TOM GRAVES, STEVE WOMACK, THOMAS J.
ROONEY, CHARLES J. FLEISCHMANN, DAVID P. JOYCE, ANDY HARRIS, MARTHA
ROBY, CHRIS STEWART, DAVID YOUNG, EVAN H. JENKINS, STEVEN PALAZZO, AND
JOHN R. MOOLENAAR
During Full Committee markup, Representative Aguilar of
California offered an amendment regarding work eligibility for
Deferred Action for Childhood Arrivals participants, which
resulted in the adoption of Section 746 in the bill.
Each of us voted no, however the amendment passed by voice
vote. Had this amendment received a roll call vote, each of us
would have voted no then as well.
Robert Aderholt.
John R. Carter.
Tom Cole.
Steve Womack.
Charles J. Fleischmann.
Andy Harris.
Chris Stewart.
Evan H. Jenkins.
John R. Moolenaar.
John Abney Culberson.
Ken Calvert.
Tom Graves.
Thomas J. Rooney.
David P. Joyce.
Martha Roby.
David Young.
Steven Palazzo.