<enum>I</enum><header>Facilitating affiliation among securities firms, insurance companies, and depository institutions</header> <subtitle id="HE1C6EE4F4281E8DBC0F3BC8BFCF37F9"><enum>A</enum><header>Affiliations</header> <section id="H7D92F166491D2A34408ACABD38BF4F1"><enum>101.</enum><header><act-name parsable-cite="GSA">Glass-Steagall Act</act-name> reformed</header> <subsection id="HE24705B84435F84CC4E400AFFB879CB"><enum>(a)</enum><header>Section <enum-in-header>20</enum-in-header> repealed</header><text><external-xref legal-doc="act" parsable-cite="BA33/20">Section 20</external-xref> of the <act-name parsable-cite="BA33">Banking Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/377">12 U.S.C. 377</external-xref>) (commonly referred to as the <quote><act-name parsable-cite="GSA">Glass-Steagall Act</act-name></quote>) is repealed.</text></subsection> <subsection id="H693CFBB341D16487F6179DAD53E7E06"><enum>(b)</enum><header>Section <enum-in-header>32</enum-in-header> repealed</header><text><external-xref legal-doc="act" parsable-cite="BA33/32">Section 32</external-xref> of the <act-name parsable-cite="BA33">Banking Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/78">12 U.S.C. 78</external-xref>) is repealed.</text></subsection></section> <section id="H278CA24B4524A2A43CD5B18FE7D5E86"><enum>102.</enum><header>Activity restrictions applicable to bank holding companies which are not financial holding companies</header> <subsection id="H72BC704346D599ED8E4A718D51E1D04"><enum>(a)</enum><header>In general</header><text>Section 4(c)(8) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1843(c)(8)">12 U.S.C. 1843(c)(8)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HC1B4AD6C44A2884D5C8EC68B5F74B6A"> <paragraph id="H45E80B2B426536C93BF05E82B00A5C3"><enum>(8)</enum><text>shares of any company the activities of which had been determined by the Board by regulation under this paragraph as of the day before the date of the enactment of the &short-title1;, to be so closely related to banking as to be a proper incident thereto (subject to such terms and conditions contained in such regulation, unless modified by the Board);</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H7F6A4AFE42127F07501390AED54D67C"><enum>(b)</enum><header>Conforming changes to other statutes</header> <paragraph id="HFDBA563F4FE9F8A51433599D7CFE771"><enum>(1)</enum><header>Amendment to the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name></header><text><external-xref legal-doc="act" parsable-cite="BHCAA70/105">Section 105</external-xref> of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1850">12 U.S.C. 1850</external-xref>) is amended by striking <quote>, to engage directly or indirectly in a nonbanking activity pursuant to section 4 of such Act,</quote>.</text></paragraph> <paragraph id="H86B3DA8B411E4BBC9D320C958E60B67"><enum>(2)</enum><header>Amendment to the <act-name parsable-cite="BSCA">Bank Service Company Act</act-name></header><text>Section 4(f) of the <act-name parsable-cite="BSCA">Bank Service Company Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1864(f)">12 U.S.C. 1864(f)</external-xref>) is amended by striking the period and adding at the end the following: <quote>as of the day before the date of enactment of the &short-title1;.</quote>.</text></paragraph></subsection></section> <section id="HC4B0070742B7F1CCD6E19ABFA3E4D3E"><enum>103.</enum><header>Financial holding companies</header><text display-inline="no-display-inline">The <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> is amended by inserting after section 5 (<external-xref legal-doc="usc" parsable-cite="usc/12/1844">12 U.S.C. 1844</external-xref>) the following new section:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H55012F604458B0CC3380628C00442BE"> <section id="HB88E2D7E47AB9DED1A89E480E5911D4"><enum>6.</enum><header>Financial holding companies</header> <subsection id="H41D2304A41562C655DC62BA27BB468D"><enum>(a)</enum><header>Financial holding company defined</header><text>For purposes of this section, the term <term>financial holding company</term> means a bank holding company which meets the requirements of subsection (b).</text></subsection> <subsection id="HD0D4947E4D8AA5C94AF22697B7C794C"><enum>(b)</enum><header>Eligibility requirements for financial holding companies</header> <paragraph id="H023867DC4E691154BB595798F891327"><enum>(1)</enum><header>In general</header><text>No bank holding company may engage in any activity or directly or indirectly acquire or retain shares of any company under this section unless the bank holding company meets the following requirements:</text> <subparagraph id="H9204F3604A384566C23A2C9F1BC24CD"><enum>(A)</enum><text>All of the subsidiary depository institutions of the bank holding company are well capitalized.</text></subparagraph> <subparagraph id="HE096BCF8428414C64EB755A9F830071"><enum>(B)</enum><text>All of the subsidiary depository institutions of the bank holding company are well managed.</text></subparagraph> <subparagraph id="H5869E255498EC6D8F3827EA6C72779F"><enum>(C)</enum><text>The company has filed with the Board a declaration that the company elects to be a financial holding company and certifying that the company meets the requirements of subparagraphs (A) and (B) and paragraph (2).</text></subparagraph></paragraph> <paragraph id="HA8434B164F77578F10ED54B47EDD2DB"><enum>(2)</enum><header>Community needs requirement</header><text>No bank holding company may become a financial holding company unless all of the subsidiary depository institutions of the bank holding company have achieved a rating of <quote>satisfactory record of meeting community credit needs</quote>, or better, at the most recent examination of each such institution under the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></paragraph> <paragraph id="H4FED2FA540F9EDBC0C9AEDBC486C6CC"><enum>(3)</enum><header>Foreign banks and companies</header><text>For purposes of paragraph (1), the Board shall establish and apply comparable capital and other operating standards to a foreign bank that operates a branch or agency or owns or controls a bank or commercial lending company in the United States, and any company that owns or controls such foreign bank, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></paragraph></subsection> <subsection id="H7670AF2546FB00F813383E82F898FC7"><enum>(c)</enum><header>Engaging in activities that are financial in nature</header> <paragraph id="HA6A30E8E4EA97BFB47F6C8ADF24D8A0"><enum>(1)</enum><header>Financial activities</header> <subparagraph id="H3DEE37774CDBB65D2EDD659B5C539EB"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a financial holding company and a wholesale financial holding company may engage in any activity, and acquire and retain the shares of any company engaged in any activity, that the Board has determined (by regulation or order) to be financial in nature or incidental to such financial activities.</text></subparagraph> <subparagraph id="HE320494A4ECE150DB9EE099A55FA1C8"><enum>(B)</enum><header>Coordination between the Board and the department of the Treasury</header> <clause id="HCE5E3A4847454D65D504D1AAB5BC369"><enum>(i)</enum><header>Proposals raised before the Board</header> <subclause id="H264CE8274377AC2DDB0976B8F5A4527"><enum>(I)</enum><header>Consultation</header><text>The Board shall notify the Secretary of the Treasury of, and consult with the Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature or incidental to such a financial activity.</text></subclause> <subclause id="HD3F2B8D54539EF79FA366DB24E5EAC7"><enum>(II)</enum><header>Treasury view</header><text>The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection if the Secretary of the Treasury notifies the Board in writing, not later than 30 days after the date of receipt of the notice described in subclause (I) (or such longer period as the Board determines to be appropriate in light of the circumstances) that the Secretary of the Treasury believes that the activity is not financial in nature or incidental to a financial activity.</text></subclause></clause> <clause id="HB7E7406E4FF94799E2E311B661DFA39"><enum>(ii)</enum><header>Proposals raised by the Treasury</header> <subclause id="H85C0D2384C5A20EB72BA399645BD092"><enum>(I)</enum><header>Treasury recommendation</header><text>The Secretary of the Treasury may, at any time, recommend in writing that the Board find an activity to be financial in nature or incidental to a financial activity.</text></subclause> <subclause id="H40D7EFB84D0D19DECDD43AB06499E23"><enum>(II)</enum><header>Time period for Board action</header><text>Not later than 30 days after the date of receipt of a written recommendation from the Secretary of the Treasury under subclause (I) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate in light of the circumstances), the Board shall determine whether to initiate a public rulemaking proposing that the subject recommended activity be found to be financial in nature or incidental to a financial activity under this subsection, and shall notify the Secretary of the Treasury in writing of the determination of the Board and, in the event that the Board determines not to seek public comment on the proposal, the reasons for that determination.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HDDF3A6D8483C1C09B3FA5B9EA0061E9"><enum>(2)</enum><header>Factors to be considered</header><text>In determining whether an activity is financial in nature or incidental to financial activities, the Board shall take into account—</text> <subparagraph id="H8931DC7F445DF9B2632178A8C6DB08B"><enum>(A)</enum><text>the purposes of this Act and the &short-title1;;</text></subparagraph> <subparagraph id="HEFB7DD174F4DEE9043C04687DF2AEEA"><enum>(B)</enum><text>changes or reasonably expected changes in the marketplace in which bank holding companies compete;</text></subparagraph> <subparagraph id="H39D151544EAE0573CF296FB1A7B3495"><enum>(C)</enum><text>changes or reasonably expected changes in the technology for delivering financial services; and</text></subparagraph> <subparagraph id="HC94848404F7314E128A5268C468643F"><enum>(D)</enum><text>whether such activity is necessary or appropriate to allow a bank holding company and the affiliates of a bank holding company to—</text> <clause id="H0AACE24B4BFED858094A46A3DBABC00"><enum>(i)</enum><text>compete effectively with any company seeking to provide financial services in the United States;</text></clause> <clause id="H6B9FCF1249EEE70D42502EBF67E689D"><enum>(ii)</enum><text>use any available or emerging technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions, in providing financial services; and</text></clause> <clause id="H9B102CF747C44224E25A4189EDB63A7"><enum>(iii)</enum><text>offer customers any available or emerging technological means for using financial services.</text></clause></subparagraph></paragraph> <paragraph id="H2564A6A74C80C27FA54758B455B894C"><enum>(3)</enum><header>Activities that are financial in nature</header><text>The following activities shall be considered to be financial in nature:</text> <subparagraph id="HD371EBFA4E0C7FA248DAEA94BB45100"><enum>(A)</enum><text>Lending, exchanging, transferring, investing for others, or safeguarding money or securities.</text></subparagraph> <subparagraph id="HE281D804433BBEDE53784ABCAC27404"><enum>(B)</enum><text>Insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing.</text></subparagraph> <subparagraph id="HAF1803F34053978FD61B78B5E3D7F3C"><enum>(C)</enum><text>Providing financial, investment, or economic advisory services, including advising an investment company (as defined in section 3 of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>).</text></subparagraph> <subparagraph id="H64D430854BB2F6F9A6A67EBED7CDD4F"><enum>(D)</enum><text>Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly.</text></subparagraph> <subparagraph id="HD45B7FAE4D74566602B9809D1545D5C"><enum>(E)</enum><text>Underwriting, dealing in, or making a market in securities.</text></subparagraph> <subparagraph id="H38FB87E349A7F4C2D6F50186A6F3B5D"><enum>(F)</enum><text>Engaging in any activity that the Board has determined, by order or regulation that is in effect on the date of enactment of the &short-title1;, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto (subject to the same terms and conditions contained in such order or regulation, unless modified by the Board).</text></subparagraph> <subparagraph id="HB699D8CE4ECE4161285FE78AD6018BC"><enum>(G)</enum><text>Engaging, in the United States, in any activity that—</text> <clause id="HEC85E22D436092E6457573A8251983B"><enum>(i)</enum><text>a bank holding company may engage in outside the United States; and</text></clause> <clause id="H539165104A37DC5A66A60B8C9B17B2F"><enum>(ii)</enum><text>the Board has determined, under regulations issued pursuant to section 4(c)(13) of this Act (as in effect on the day before the date of enactment of the &short-title1;) to be usual in connection with the transaction of banking or other financial operations abroad.</text></clause></subparagraph> <subparagraph id="HEE10CE3644998B7017BE7794986923A"><enum>(H)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text> <clause id="H024D90FA450E17FC3935C7968D5DAC8"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or subsidiary of a depository institution;</text></clause> <clause id="HB18436EE4D58D55AFEF65DAEE5E9D44"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by a securities affiliate or an affiliate thereof as part of a bona fide underwriting or merchant banking activity, including investment activities engaged in for the purpose of appreciation and ultimate resale or disposition of the investment;</text></clause> <clause id="H668932734CD2F3A80469058F4059D01"><enum>(iii)</enum><text>such shares, assets, or ownership interests are held only for such a period of time as will permit the sale or disposition thereof on a reasonable basis consistent with the nature of the activities described in clause (ii); and</text></clause> <clause id="H03F2F7494E04A8BC331A6386ECC1FBA"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not actively participate in the day to day management or operation of such company or entity, except insofar as necessary to achieve the objectives of clause (ii).</text> <subclause indent="up2" id="H553BB03F49B69DE23BE38DA6D131BE3"><enum>(I)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text></subclause></clause> <clause id="H7961331E4E581CFA4DEB0596DCBEACA"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or a subsidiary of a depository institution;</text></clause> <clause id="HBFDCAA184CDB5EA2E84FCA8170CCF82"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by an insurance company that is predominantly engaged in underwriting life, accident and health, or property and casualty insurance (other than credit-related insurance) or providing and issuing annuities;</text></clause> <clause id="H00B210CF435DEB9DF6C2ADABCF0059D"><enum>(iii)</enum><text>such shares, assets, or ownership interests represent an investment made in the ordinary course of business of such insurance company in accordance with relevant State law governing such investments; and</text></clause> <clause id="H8DE0239E4ABB8F7AC83E6694F3E8DEE"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not directly or indirectly participate in the day-to-day management or operation of the company or entity except insofar as necessary to achieve the objectives of clauses (ii) and (iii).</text></clause></subparagraph></paragraph> <paragraph id="HD8E5BFD24141743BC945DA99B8F3FBD"><enum>(4)</enum><header>Actions required</header><text>The Board shall, by regulation or order, define, consistent with the purposes of this Act, the following activities as, and the extent to which such activities are, financial in nature or incidental to activities which are financial in nature:</text> <subparagraph id="HA698F76E46F665C6B23F098A9CF7BF9"><enum>(A)</enum><text>Lending, exchanging, transferring, investing for others, or safeguarding financial assets other than money or securities.</text></subparagraph> <subparagraph id="H6B0A657D4E34EFD944706790B23E99F"><enum>(B)</enum><text>Providing any device or other instrumentality for transferring money or other financial assets.</text></subparagraph> <subparagraph id="HC623CC274C43E37E01546796BBFA0F5"><enum>(C)</enum><text>Arranging, effecting, or facilitating financial transactions for the account of third parties.</text></subparagraph></paragraph> <paragraph id="HA29E81BC4DA476FDAC231093C529771"><enum>(5)</enum><header>Post-consummation notification</header> <subparagraph id="H8D5BEFB44749165303A2D1B730A5C49"><enum>(A)</enum><header>In general</header><text>A financial holding company and a wholesale financial holding company that acquires any company, or commences any activity, pursuant to this subsection shall provide written notice to the Board describing the activity commenced or conducted by the company acquired no later than 30 calendar days after commencing the activity or consummating the acquisition.</text></subparagraph> <subparagraph id="H354A7AC54CD7EC703835BE82D87A407"><enum>(B)</enum><header>Approval not required for certain financial activities</header><text>Except as provided in section 4(j) with regard to the acquisition of a savings association or in paragraph (6) of this subsection, a financial holding company and a wholesale financial holding company may commence any activity, or acquire any company, pursuant to paragraph (3) or any regulation prescribed or order issued under paragraph (4), without prior approval of the Board.</text></subparagraph></paragraph> <paragraph id="HF39A17C7438DBABFC5968097BFC6894"><enum>(6)</enum><header>Notice required for large combinations</header> <subparagraph id="HD2FE3B9A450A959F1C41ECB2E89BCEC"><enum>(A)</enum><header>In general</header><text>No financial holding company or wholesale financial holding company shall directly or indirectly acquire, and no company that becomes a financial holding company or a wholesale financial holding company shall directly or indirectly acquire control of, any company in the United States, including through merger, consolidation, or other type of business combination, that—</text> <clause id="H1421E14E4D47D19DD0B3DA8F47F4310"><enum>(i)</enum><text>is engaged in activities permitted under this subsection or subsection (g); and</text></clause> <clause id="H2D36B62C4779D52DD8D233B8FA2EA72"><enum>(ii)</enum><text>has consolidated total assets in excess of $40,000,000,000,</text></clause><continuation-text continuation-text-level="subparagraph">unless such holding company has provided notice to the Board, not later than 60 days prior to such proposed acquisition or prior to becoming a financial holding company or wholesale financial holding company, and during that time period, or such longer time period not exceeding an additional 60 days, as established by the Board, the Board has not issued a notice disapproving the proposed acquisition or retention.</continuation-text></subparagraph> <subparagraph id="H3D45EFEA456A8DA139DFC798E876A19"><enum>(B)</enum><header>Factors for consideration</header><text>In reviewing any prior notice filed under this paragraph, the Board shall take into consideration—</text> <clause id="H1251A39A4D50156F3E41A986EEE92D3"><enum>(i)</enum><text>whether the company is in compliance with all applicable criteria set forth in subsection (b) and the provisions of subsection (d);</text></clause> <clause id="HED9C69F24B2AA87D23369088651181B"><enum>(ii)</enum><text>whether the proposed combination represents an undue aggregation of resources;</text></clause> <clause id="H9FED63904C713388A035E4A9001EE48"><enum>(iii)</enum><text>whether the proposed combination poses a risk to the deposit insurance system;</text></clause> <clause id="HEB1835334FA0D955FE24BF95847DBAD"><enum>(iv)</enum><text>whether the proposed combination poses a risk to State insurance guaranty funds;</text></clause> <clause id="HD5F87EF342777C99BD6972BEFC4148F"><enum>(v)</enum><text>whether the proposed combination can reasonably be expected to be in the best interests of depositors or policyholders of the respective entities; and</text></clause> <clause id="HBA05D3C84E6351C100E4F696D3843E4"><enum>(vi)</enum><text>whether the proposed transaction can reasonably be expected to produce benefits to the public.</text></clause></subparagraph> <subparagraph id="HDBDD616C4094C20257BDFC9473DB033"><enum>(C)</enum><header>Required information</header><text>The Board may disapprove any prior notice filed under this paragraph if the company submitting such notice neglects, fails, or refuses to furnish to the Board all relevant information required by the Board.</text></subparagraph> <subparagraph id="H2DD05C4D43081192A59738B5C8F82B4"><enum>(D)</enum><header>Solicitation of views of other supervisory agencies</header> <clause id="HFCFE4A574EFAE53778240B81CDFCAC7"><enum>(i)</enum><header>In general</header><text>Upon receiving a prior notice under this paragraph, in order to provide for the submission of their views and recommendations, the Board shall give notice of the proposal to—</text> <subclause id="H18C0D3B743434C024E4329AB5457B63"><enum>(I)</enum><text>the appropriate Federal banking agency of any bank involved;</text></subclause> <subclause id="HECCFF6144807B4BD661B0E9231AD000"><enum>(II)</enum><text>the appropriate functional regulator of any functionally regulated nondepository institution (as defined in section 5(c)(1)(C)) involved; and</text></subclause> <subclause id="H4035D5234916CDB669957382D9B4BA1"><enum>(III)</enum><text>the Secretary of the Treasury, the Department of Justice, and the Federal Trade Commission.</text></subclause></clause> <clause id="H6EC6A2EB4FCF4F9B1C910EA1B06149E"><enum>(ii)</enum><header>Timing</header><text>The views and recommendations of any agency provided notice under this paragraph shall be submitted to the Board not later than 30 calendar days after the date on which notice to the agency was given, unless the Board determines that another shorter time period is appropriate.</text></clause></subparagraph></paragraph></subsection> <subsection id="H3DC7A67348A1BC76749F78A32D8EC34"><enum>(d)</enum><header>Provisions applicable to financial holding companies that fail to meet requirements</header> <paragraph id="HCE82FDC44B0BD24D3D25F8BF596F01B"><enum>(1)</enum><header>In general</header><text>If the Board finds that a financial holding company is not in compliance with the requirements of subparagraph (A) or (B) of subsection (b)(1), the Board shall give notice of such finding to the company.</text></paragraph> <paragraph id="H22ED074940537DDE3F3CEE89F234FDE"><enum>(2)</enum><header>Agreement to correct conditions required</header><text>Not later than 45 days after receipt by a financial holding company of a notice given under paragraph (1) (or such additional period as the Board may permit), the company shall execute an agreement acceptable to the Board to comply with the requirements applicable to a financial holding company.</text></paragraph> <paragraph id="H0CD756E64207AB4A161B37AF10E71D1"><enum>(3)</enum><header>Board May impose limitations</header><text>Until the conditions described in a notice to a financial holding company under paragraph (1) are corrected, the Board may impose such limitations on the conduct or activities of the company or any affiliate of the company as the Board determines to be appropriate under the circumstances.</text></paragraph> <paragraph id="H0D0B3EA24E466EAAC96885A6D8DFD2D"><enum>(4)</enum><header>Failure to correct</header><text>If, after receiving a notice under paragraph (1), a financial holding company does not—</text> <subparagraph id="H4B7B4A7A4BBA11B3D6CA65A060F7E4C"><enum>(A)</enum><text>execute and implement an agreement in accordance with paragraph (2);</text></subparagraph> <subparagraph id="H4A7B44904F5DBEFB6AA909B8CCE8F42"><enum>(B)</enum><text>comply with any limitations imposed under paragraph (3);</text></subparagraph> <subparagraph id="HA171BA0E490BB26AB8FEDA8393F7B26"><enum>(C)</enum><text>in the case of a notice of failure to comply with subsection (b)(1)(A), restore each depository institution subsidiary to well capitalized status before the end of the 180-day period beginning on the date such notice is received by the company (or such other period permitted by the Board); or</text></subparagraph> <subparagraph id="HF574E8F64D3F0836D8EA1E8FD800F6D"><enum>(D)</enum><text>in the case of a notice of failure to comply with subparagraph (B) of subsection (b)(1), restore compliance with any such subparagraph on or before the date on which the next examination of the depository institution subsidiary is completed or by the end of such other period as the Board determines to be appropriate,</text></subparagraph><continuation-text continuation-text-level="paragraph">the Board may require such company, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the Board’s discretion, to divest control of any depository institution subsidiary or, at the election of the financial holding company, instead to cease to engage in any activity conducted by such company or its subsidiaries pursuant to this section.</continuation-text></paragraph> <paragraph id="H21E1D61647FFAB05890559A816CEC7F"><enum>(5)</enum><header>Consultation</header><text>In taking any action under this subsection, the Board shall consult with all relevant Federal and State regulatory agencies.</text></paragraph></subsection> <subsection id="HE4E5B775468D29DDA0163CA7B04716C"><enum>(e)</enum><header>Safeguards for bank subsidiaries</header><text>A financial holding company shall assure that—</text> <paragraph id="HD8F8FEED46295790AF3F2CA5EF99BCD"><enum>(1)</enum><text>the procedures of the holding company for identifying and managing financial and operational risks within the company, and the subsidiaries of such company, adequately protect the subsidiaries of such company which are insured depository institutions from such risks;</text></paragraph> <paragraph id="HC9F737F648528B96688BC99ADA1000F"><enum>(2)</enum><text>the holding company has reasonable policies and procedures to preserve the separate corporate identity and limited liability of such company and the subsidiaries of such company, for the protection of the company’s subsidiary insured depository institutions; and</text></paragraph> <paragraph id="H605F09F641C315A0DFB14B823E14EC4"><enum>(3)</enum><text>the holding company complies with this section.</text></paragraph></subsection> <subsection id="H3EC7714A4201928EF039A988F551157"><enum>(f)</enum><header>Authority to retain limited nonfinancial activities and affiliations</header> <paragraph id="H56CD6805478571E83D43C9AE81C007D"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 4(a), a company that is not a bank holding company or a foreign bank (as defined in section 1(b)(7) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>) and becomes a financial holding company after the date of the enactment of the &short-title1; may continue to engage in any activity and retain direct or indirect ownership or control of shares of a company engaged in any activity if—</text> <subparagraph id="H99C18077479AEB5B606A9980BE5CEAB"><enum>(A)</enum><text>the holding company lawfully was engaged in the activity or held the shares of such company on September 30, 1997;</text></subparagraph> <subparagraph id="H0E7F00CE4A2E22BBD6CD58967FB3F8B"><enum>(B)</enum><text>the holding company is predominantly engaged in financial activities as defined in paragraph (2); and</text></subparagraph> <subparagraph id="HA9E877F7436495FAB09787B7BBDA560"><enum>(C)</enum><text>the company engaged in such activity continues to engage only in the same activities that such company conducted on September 30, 1997, and other activities permissible under this Act.</text></subparagraph></paragraph> <paragraph id="H0AD89C584A6A7ACCDA63EAA76283DFA"><enum>(2)</enum><header>Predominantly financial</header><text>For purposes of this subsection, a company is predominantly engaged in financial activities if the annual gross revenues derived by the holding company and all subsidiaries of the holding company (excluding revenues derived from subsidiary depository institutions), on a consolidated basis, from engaging in activities that are financial in nature or are incidental to activities that are financial in nature under subsection (c) represent at least 85 percent of the consolidated annual gross revenues of the company.</text></paragraph> <paragraph id="H4AA2FD3343C66BB768D76B8E4EA4DE6"><enum>(3)</enum><header>No expansion of grandfathered commercial activities through merger or consolidation</header><text>A financial holding company that engages in activities or holds shares pursuant to this subsection, or a subsidiary of such financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company which is engaged in any activity which the Board has not determined to be financial in nature or incidental to activities that are financial in nature under subsection (c).</text></paragraph> <paragraph id="HE569037844A27156C54F778056E4B80"><enum>(4)</enum><header>Continuing revenue limitation on grandfathered commercial activities</header><text>Notwithstanding any other provision of this subsection, a financial holding company may continue to engage in activities or hold shares in companies pursuant to this subsection only to the extent that the aggregate annual gross revenues derived from all such activities and all such companies does not exceed 15 percent of the consolidated annual gross revenues of the financial holding company (excluding revenues derived from subsidiary depository institutions).</text></paragraph> <paragraph id="H1FDBA22F4597C91B81B9FF81E089E37"><enum>(5)</enum><header>Cross marketing restrictions applicable to commercial activities</header><text>A depository institution controlled by a financial holding company shall not—</text> <subparagraph id="H8AA43E7549828DA4FF61C8B9BEA6906"><enum>(A)</enum><text>offer or market, directly or through any arrangement, any product or service of a company whose activities are conducted or whose shares are owned or controlled by the financial holding company pursuant to this subsection or subparagraph (H) or (I) of subsection (c)(3); or</text></subparagraph> <subparagraph id="H3C77768341A948C1242E5493A762E73"><enum>(B)</enum><text>permit any of its products or services to be offered or marketed, directly or through any arrangement, by or through any company described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="H6CDBDDA74ADEEDFFD0BD0DA0FD77F9C"><enum>(6)</enum><header>Transactions with nonfinancial affiliates</header><text>An insured depository institution controlled by a financial holding company or wholesale financial holding company may not engage in a covered transaction (as defined by section 23A(b)(7) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>) with any affiliate controlled by the company pursuant to section 10(c), this subsection, or subparagraph (H) or (I) of subsection (c)(3).</text></paragraph> <paragraph id="H808046E24F64A3D41117B4BBAFE450B"><enum>(7)</enum><header>Sunset of grandfather</header><text>A financial holding company engaged in any activity, or retaining direct or indirect ownership or control of shares of a company, pursuant to this subsection, shall terminate such activity and divest ownership or control of the shares of such company before the end of the 10-year period beginning on the date of the enactment of the &short-title1;. The Board may, upon application by a financial holding company, extend such 10-year period by a period not to exceed an additional 5 years if such extension would not be detrimental to the public interest.</text></paragraph></subsection> <subsection id="HD81C8FD445E7F2B303EFD88583F694E"><enum>(g)</enum><header>Developing activities</header><text>A financial holding company and a wholesale financial holding company may engage directly or indirectly, or acquire shares of any company engaged, in any activity that the Board has not determined to be financial in nature or incidental to financial activities under subsection (c) if—</text> <paragraph id="H828008404171C61F07AB0BB457C3EBD"><enum>(1)</enum><text>the holding company reasonably concludes that the activity is financial in nature or incidental to financial activities;</text></paragraph> <paragraph id="H581BDB0B4F795F83547F5FBF06DAD00"><enum>(2)</enum><text>the gross revenues from all activities conducted under this subsection represent less than 5 percent of the consolidated gross revenues of the holding company;</text></paragraph> <paragraph id="H4231235643336E0C7BF93EB7E16377C"><enum>(3)</enum><text>the aggregate total assets of all companies the shares of which are held under this subsection do not exceed 5 percent of the holding company’s consolidated total assets;</text></paragraph> <paragraph id="H71BB9CC048CB801234860D8B8428B00"><enum>(4)</enum><text>the total capital invested in activities conducted under this subsection represents less than 5 percent of the consolidated total capital of the holding company;</text></paragraph> <paragraph id="H6B490BC14781DB82F99A999BD7EFFAF"><enum>(5)</enum><text>the Board has not determined that the activity is not financial in nature or incidental to financial activities under subsection (c);</text></paragraph> <paragraph id="H0FC76D9E429BFE984CA667B23F847BF"><enum>(6)</enum><text>the holding company is not required to provide prior written notice of the transaction to the Board under subsection (c)(6); and</text></paragraph> <paragraph id="H21992F4F429FF7C3A243AC8455D6F05"><enum>(7)</enum><text>the holding company provides written notification to the Board describing the activity commenced or conducted by the company acquired no later than 10 business days after commencing the activity or consummating the acquisition.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H36636F2D4F2EFF5A21A274BEF262E21"><enum>104.</enum><header>Operation of State law</header> <subsection id="H28ED405B404A5C8A2D7F9C98D3A47B0"><enum>(a)</enum><header>Affiliations</header> <paragraph id="H1E3783CA4C0509634FB1799FB7DDC00"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, from being affiliated directly or indirectly or associated with any person or entity, as authorized or permitted by this Act or any other provision of Federal law.</text></paragraph> <paragraph id="HB3FA37394AC1DAC8AA0563837EF0BD5"><enum>(2)</enum><header>Insurance</header><text>With respect to affiliations between insured depository institutions or wholesale financial institutions, or any subsidiary or affiliate thereof, and persons or entities engaged in the business of insurance, paragraph (1) does not prohibit any State from—</text> <subparagraph id="H929FF29148EAEB2897318E98EE6947F"><enum>(A)</enum><text>requiring any person or entity that proposes to acquire control of an entity that is engaged in the business of insurance and domiciled in that State (hereafter in this subparagraph referred to as the <quote>insurer</quote>) to furnish to the insurance regulatory authority of that State, not later than 60 days before the effective date of the proposed acquisition—</text> <clause id="H0974BE0046ED8AB1C95D48BDD2753BD"><enum>(i)</enum><text>the name and address of each person by whom, or on whose behalf, the affiliation referred to in this subparagraph is to be effected (hereafter in this subparagraph referred to as the <quote>acquiring party</quote>);</text></clause> <clause id="H560F99E0449A22ECCDE52D85B15725B"><enum>(ii)</enum><text>if the acquiring party is an individual, his or her principal occupation and all offices and positions held during the 5 years preceding the date of notification, and any conviction of crimes other than minor traffic violations during the 10 years preceding the date of notification;</text></clause> <clause id="H20DE10704C4E9333A55C26B42772BC5"><enum>(iii)</enum><text>if the acquiring party is not an individual—</text> <subclause id="HAE71D3A24D4B78FC7B0B26B479C0374"><enum>(I)</enum><text>a report of the nature of its business operations during the 5 years preceding the date of notification, or for such shorter period as such person and any predecessors thereof shall have been in existence;</text></subclause> <subclause id="H30C10CDB46B9DE3179B0439CBDFCB30"><enum>(II)</enum><text>an informative description of the business intended to be done by the acquiring party and any subsidiary thereof; and</text></subclause> <subclause id="H204DDD15470133D28297B1BBF8D034B"><enum>(III)</enum><text>a list of all individuals who are, or who have been selected to become, directors or executive officers of the acquiring party or who perform, or will perform, functions appropriate to such positions, including, for each such individual, the information required by clause (ii);</text></subclause></clause> <clause id="HF93A41E1431D68A03968F49F2451B7F"><enum>(iv)</enum><text>the source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were, or are to be, obtained for any such purpose, and the identity of persons furnishing such consideration, except that, if a source of such consideration is a loan made in the lender’s ordinary course of business, the identity of the lender shall remain confidential if the person filing such statement so requests;</text></clause> <clause id="H1B51BADF4F5ADA810423B88DF5071C3"><enum>(v)</enum><text>fully audited financial information as to the earnings and financial condition of each acquiring party for the 5 fiscal years preceding the date of notification of each such acquiring party, or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than 90 days before the date of notification, except that, in the case of an acquiring party that is an insurer actively engaged in the business of insurance, the financial statements of such insurer need not be audited, but such audit may be required if the need therefor is determined by the insurance regulatory authority of the State;</text></clause> <clause id="HC12F5731458DCB72235F2E91E3130BD"><enum>(vi)</enum><text>any plans or proposals that each acquiring party may have to liquidate such insurer, to sell its assets, or to merge or consolidate it with any person or to make any other material change in its business or corporate structure or management;</text></clause> <clause id="HCDBEC00F4DE50310C73A34BDB1D2829"><enum>(vii)</enum><text>the number of shares of any security of the insurer that each acquiring party proposes to acquire, the terms of any offer, request, invitation, agreement, or acquisition, and a statement as to the method by which the fairness of the proposal was arrived at;</text></clause> <clause id="H5917356441101E3E8EDF69B0CF83D3D"><enum>(viii)</enum><text>the amount of each class of any security of the insurer that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;</text></clause> <clause id="H671ABEB24EF2EEAD4E1EB09AEAEBB45"><enum>(ix)</enum><text>a full description of any contracts, arrangements, or understandings with respect to any security of the insurer in which any acquiring party is involved, including transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies, and identification of the persons with whom such contracts, arrangements, or understandings have been entered into;</text></clause> <clause id="HAC609D48454A59B09E737A8731B7A1F"><enum>(x)</enum><text>a description of the purchase of any security of the insurer during the 12-month period preceding the date of notification by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid, or agreed to be paid, therefor;</text></clause> <clause id="HC92206BE424B6071D847FAABB79994D"><enum>(xi)</enum><text>a description of any recommendations to purchase any security of the insurer made during the 12-month period preceding the date of notification by any acquiring party or by any person based upon interviews or at the suggestion of such acquiring party;</text></clause> <clause id="HF06358DF4B15AC4BB638688DC397F95"><enum>(xii)</enum><text>copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities of the insurer and, if distributed, of additional soliciting material relating thereto; and</text></clause> <clause id="H5C2B985F41F3ADAE1E65F98F33704CA"><enum>(xiii)</enum><text>the terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities of the insurer for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto;</text></clause></subparagraph> <subparagraph id="H21F3AAE84B45C3F01008BB955BB72BD"><enum>(B)</enum><text>requiring an entity that is acquiring control of an entity that is engaged in the business of insurance and domiciled in that State to maintain or restore the capital requirements of that insurance entity to the level required under the capital regulations of general applicability in that State to avoid the requirement of preparing and filing with the insurance regulatory authority of that State a plan to increase the capital of the entity, except that any determination by the State insurance regulatory authority with respect to such requirement shall be made not later than 60 days after the date of notification under subparagraph (A);</text></subparagraph> <subparagraph id="H4D692D114D972F9FE8D7C58CF9C9D86"><enum>(C)</enum><text>taking actions with respect to the receivership or conservatorship of any insurance company; or</text></subparagraph> <subparagraph id="H4F937FF544719053BFE6348124F2903"><enum>(D)</enum><text>restricting a change in the ownership of stock in an insurance company, or a company formed for the purpose of controlling such insurance company, for a period of not more than 3 years beginning on the date of the conversion of such company from mutual to stock form.</text></subparagraph></paragraph> <paragraph id="H7AD089624BD8D12574AE14B3A5C617A"><enum>(3)</enum><header>Preservation of State antitrust and general corporate laws</header> <subparagraph id="H3A0F8BC7412496AED5BFC38E9800D46"><enum>(A)</enum><header>In general</header><text>Nothing in paragraph (1) shall be construed as affecting State laws, regulations, orders, interpretations, or other actions of general applicability relating to the governance of corporations, partnerships, limited liability companies or other business associations incorporated or formed under the laws of that State or domiciled in that State, or the applicability of the antitrust laws of any State or any State law that is similar to the antitrust laws.</text></subparagraph> <subparagraph id="H9C5C3D4B4866A5EBA6A2D99AD6CB100"><enum>(B)</enum><header>Definition</header><text>The term <term>antitrust laws</term> has the same meaning as in subsection (a) of the first section of the <act-name parsable-cite="CLAY">Clayton Act</act-name>, and includes <external-xref legal-doc="act" parsable-cite="FTCA/5">section 5</external-xref> of the <act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> to the extent that such section 5 relates to unfair methods of competition.</text></subparagraph></paragraph></subsection> <subsection id="H5F86B73142949C20E70BA99BF0F460B"><enum>(b)</enum><header>Activities</header> <paragraph id="HF675D2084438A6D1C73CF0AC545BAA8"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), and except with respect to insurance sales, solicitation, and cross marketing activities, which shall be governed by paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other entity or person, in any activity authorized or permitted under this Act.</text></paragraph> <paragraph id="HC4B697C7423B7722EDC2DDAEE189E4D"><enum>(2)</enum><header>Insurance sales</header> <subparagraph id="HC23D10374569F6E9C125CF94E6938AE"><enum>(A)</enum><header>In general</header><text>In accordance with the legal standards for preemption set forth in the decision of the Supreme Court of the United States in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996), no State may, by statute, regulation, order, interpretation, or other action, prevent or significantly interfere with the ability of an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, to engage, directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other party, in any insurance sales, solicitation, or cross-marketing activity.</text></subparagraph> <subparagraph id="HB263613C4B24BB1F370C7F8AF9FFEBE"><enum>(B)</enum><header>Certain State laws preserved</header><text>Notwithstanding subparagraph (A), a State may impose any of the following restrictions, or restrictions which are substantially the same as but no more burdensome or restrictive than those in each of the following clauses:</text> <clause id="HA2D67E9F4CE140A5E182E8A944A126C"><enum>(i)</enum><text>Restrictions prohibiting the rejection of an insurance policy solely because the policy has been issued or underwritten by any person who is not associated with such insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, when such insurance is required in connection with a loan or extension of credit.</text></clause> <clause id="H4E332E664B194E578708849A05B175D"><enum>(ii)</enum><text>Restrictions prohibiting a requirement for any debtor, insurer, or insurance agent or broker to pay a separate charge in connection with the handling of insurance that is required in connection with a loan or other extension of credit or the provision of another traditional banking product, unless such charge would be required when the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, is the licensed insurance agent or broker providing the insurance.</text></clause> <clause id="H6710C1544C646CC98A1398BD65A05EF"><enum>(iii)</enum><text>Restrictions prohibiting the use of any advertisement or other insurance promotional material by an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, that would cause a reasonable person to believe mistakenly that—</text> <subclause id="HD3180ACD4B8893FE01DDDBA629E7C54"><enum>(I)</enum><text>a State or the Federal Government is responsible for the insurance sales activities of, or stands behind the credit of, the institution, affiliate, or subsidiary; or</text></subclause> <subclause id="H5638AF3C488C0DAEBFB0D9A179AE3DE"><enum>(II)</enum><text>a State, or the Federal Government guarantees any returns on insurance products, or is a source of payment on any insurance obligation of or sold by the institution, affiliate, or subsidiary;</text></subclause></clause> <clause id="HB0DC0CB14A246FDC7A9B59AE709DA3E"><enum>(iv)</enum><text>Restrictions prohibiting the payment or receipt of any commission or brokerage fee or other valuable consideration for services as an insurance agent or broker to or by any person, unless such person holds a valid State license regarding the applicable class of insurance at the time at which the services are performed, except that, in this clause, the term <term>services as an insurance agent or broker</term> does not include a referral by an unlicensed person of a customer or potential customer to a licensed insurance agent or broker that does not include a discussion of specific insurance policy terms and conditions.</text></clause> <clause id="H54D4B821481129DCE3B2D48BFEC8DCB"><enum>(v)</enum><text>Restrictions prohibiting any compensation paid to or received by any individual who is not licensed to sell insurance, for the referral of a customer that seeks to purchase, or seeks an opinion or advice on, any insurance product to a person that sells or provides opinions or advice on such product, based on the purchase of insurance by the customer.</text></clause> <clause id="HAD2D72CB47E4F216825C7AB9755F93F"><enum>(vi)</enum><text>Restrictions prohibiting the release of the insurance information of a customer (defined as information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates, and insurance claims of a customer contained in the records of the insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof) to any person or entity other than an officer, director, employee, agent, subsidiary, or affiliate of an insured depository institution or a wholesale financial institution, for the purpose of soliciting or selling insurance, without the express consent of the customer, other than a provision that prohibits—</text> <subclause id="HC190AAEB4639151CAA31ECAD00EFB52"><enum>(I)</enum><text>a transfer of insurance information to an unaffiliated insurance company, agent, or broker in connection with transferring insurance in force on existing insureds of the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, or in connection with a merger with or acquisition of an unaffiliated insurance company, agent, or broker; or</text></subclause> <subclause id="H7AAE18F74C023CA7207B56A90468C82"><enum>(II)</enum><text>the release of information as otherwise authorized by State or Federal law.</text></subclause></clause> <clause id="HDC0BC62742D079019ECD379800D35DA"><enum>(vii)</enum><text>Restrictions prohibiting the use of health information obtained from the insurance records of a customer for any purpose, other than for its activities as a licensed agent or broker, without the express consent of the customer.</text></clause> <clause id="H8A52652E4E2A1BD6A97BC88A20F3B98"><enum>(viii)</enum><text>Restrictions prohibiting the extension of credit or any product or service that is equivalent to an extension of credit, lease or sale of property of any kind, or furnishing of any services or fixing or varying the consideration for any of the foregoing, on the condition or requirement that the customer obtain insurance from the insured depository institution, wholesale financial institution, a subsidiary or affiliate thereof, or a particular insurer, agent, or broker, other than a prohibition that would prevent any insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof—</text> <subclause id="HA25E6B1B44B3C5D6B817AFA18058EF6"><enum>(I)</enum><text>from engaging in any activity that would not violate <external-xref legal-doc="act" parsable-cite="BHCAA70/106">section 106</external-xref> of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name>, as interpreted by the Board of Governors of the Federal Reserve System; or</text></subclause> <subclause id="H89F991B04C93C34E03591FA7CACFF1F"><enum>(II)</enum><text>from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance, or that insurance is available from the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof.</text></subclause></clause> <clause id="H66D602B048E1A74032A82EA4A00ED5D"><enum>(ix)</enum><text>Restrictions requiring, when an application by a consumer for a loan or other extension of credit from an insured depository institution or wholesale financial institution is pending, and insurance is offered or sold to the consumer or is required in connection with the loan or extension of credit by the insured depository institution or wholesale financial institution, that a written disclosure be provided to the consumer or prospective customer indicating that his or her choice of an insurance provider will not affect the credit decision or credit terms in any way, except that the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, may impose reasonable requirements concerning the creditworthiness of the insurance provider and scope of coverage chosen.</text></clause> <clause id="HF5A05CAC4BC5C18B87E117BBE939DB9"><enum>(x)</enum><text>Restrictions requiring clear and conspicuous disclosure, in writing, where practicable, to the customer prior to the sale of any insurance policy that such policy—</text> <subclause id="H14A63EE9443D94DEC97241AACD00B58"><enum>(I)</enum><text>is not a deposit;</text></subclause> <subclause id="H637DFBF4482A605AE8F0A9A6D739153"><enum>(II)</enum><text>is not insured by the Federal Deposit Insurance Corporation;</text></subclause> <subclause id="H17D18FA14D32B1A0517C9DBDA900A6D"><enum>(III)</enum><text>is not guaranteed by the insured depository institution or wholesale financial institution or, if appropriate, its subsidiaries or affiliates or any person soliciting the purchase of or selling insurance on the premises thereof; and</text></subclause> <subclause id="H6FA9BFAF494081A06AA21895AB4EC4C"><enum>(IV)</enum><text>where appropriate, involves investment risk, including potential loss of principal.</text></subclause></clause> <clause id="H2B4A2A95482E39CD25358CAE3BDB7A2"><enum>(xi)</enum><text>Restrictions requiring that, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, or any person soliciting the purchase of or selling insurance on the premises thereof, the credit and insurance transactions be completed through separate documents.</text></clause> <clause id="HA62B27114FB32BA3EC8D12809FB3273"><enum>(xii)</enum><text>Restrictions prohibiting, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution or its subsidiaries or affiliates, or any person soliciting the purchase of or selling insurance on the premises thereof, inclusion of the expense of insurance premiums in the primary credit transaction without the express written consent of the customer.</text></clause> <clause id="HD763A0904E64375A0928DCBCBBB6300"><enum>(xiii)</enum><text>Restrictions requiring maintenance of separate and distinct books and records relating to insurance transactions, including all files relating to and reflecting consumer complaints, and requiring that such insurance books and records be made available to the appropriate State insurance regulator for inspection upon reasonable notice.</text></clause></subparagraph> <subparagraph id="H753CDBCF486B26BD6E17009CF94C83B"><enum>(C)</enum><header>Limitations</header> <clause id="H29F857B144F622818436DCBC17E3713"><enum>(i)</enum><header>OCC deference</header><text>Section 306(e) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H46BF718B40928323A8BB6298C8DAC69"><enum>(ii)</enum><header>Nondiscrimination</header><text>Subsection (c) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H6E5ADC1C4741D8C4224C62955F5F68A"><enum>(iii)</enum><header>Construction</header><text>Nothing in this paragraph shall be construed to limit the applicability of the decision of the Supreme Court in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996) with respect to a State statute, regulation, order, interpretation, or other action that is not described in subparagraph (B).</text></clause> <clause id="HED9430744BD3D688623C7785AAA9402"><enum>(iv)</enum><header>Limitation on inferences</header><text>Nothing in this paragraph shall be construed to create any inference with respect to any State statute, regulation, order, interpretation, or other action that is not referred to or described in this paragraph.</text></clause></subparagraph></paragraph> <paragraph id="H1699C3894100669F120929BBFC8BF3C"><enum>(3)</enum><header>Insurance activities other than sales</header><text>State statutes, regulations, interpretations, orders, and other actions shall not be preempted under subsection (b)(1) to the extent that they—</text> <subparagraph id="H8854162C434CC28326410EB800FEC5F"><enum>(A)</enum><text>relate to, or are issued, adopted, or enacted for the purpose of regulating the business of insurance in accordance with the Act of March 9, 1945 (commonly known as the <quote><act-name parsable-cite="MFA">McCarran-Ferguson Act</act-name></quote>);</text></subparagraph> <subparagraph id="HB6E755C547F547E76324E3B9149976A"><enum>(B)</enum><text>apply only to persons or entities that are not insured depository institutions or wholesale financial institutions, but that are directly engaged in the business of insurance (except that they may apply to depository institutions engaged in providing savings bank life insurance as principal to the extent of regulating such insurance);</text></subparagraph> <subparagraph id="HB804956640F159DE2C1A7E96F4F221C"><enum>(C)</enum><text>do not relate to or directly or indirectly regulate insurance sales, solicitations, or cross-marketing activities; and</text></subparagraph> <subparagraph id="HD3B082AD4C1A70867FD4E1A514EA649"><enum>(D)</enum><text>are not prohibited under subsection (c).</text></subparagraph></paragraph> <paragraph id="H6A2B1731457EF60518470894F97444F"><enum>(4)</enum><header>Financial activities other than insurance</header><text>No State statute, regulation, interpretation, order, or other action shall be preempted under subsection (b)(1) to the extent that—</text> <subparagraph id="H8F15AB1A4A0CEA58B129419C44134ED"><enum>(A)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, insurance sales, solicitations, or cross marketing activities covered under paragraph (2);</text></subparagraph> <subparagraph id="HDB88D9214E12CB23E93AF5A3E901070"><enum>(B)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, the business of insurance activities other than sales, solicitations, or cross marketing activities, covered under paragraph (3);</text></subparagraph> <subparagraph id="H78BD307145155C6895DF25B7FCBE417"><enum>(C)</enum><text>it does not relate to securities investigations or enforcement actions referred to in subsection (d); and</text></subparagraph> <subparagraph id="HAB47BF5047D2A2784767EA96C0BD11C"><enum>(D)</enum><text>it—</text> <clause id="H9A845B4842D37D6BF5EDCBB8B2D541E"><enum>(i)</enum><text>does not distinguish by its terms between insured depository institutions, wholesale financial institutions, and subsidiaries and affiliates thereof engaged in the activity at issue and other persons or entities engaged in the same activity in a manner that is in any way adverse with respect to the conduct of the activity by any such insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof engaged in the activity at issue;</text></clause> <clause id="HBAB3FD8B4F667CB1C582D287F8CEA0A"><enum>(ii)</enum><text>as interpreted or applied, does not have, and will not have, an impact on depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof engaged in the activity at issue, or any person or entity affiliated therewith, that is substantially more adverse than its impact on other persons or entities engaged in the same activity that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></clause> <clause id="H0405955E4DDCF8551FDA4BBA393ECDD"><enum>(iii)</enum><text>does not effectively prevent a depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging in activities authorized or permitted by this Act or any other provision of Federal law; and</text></clause> <clause id="H60992EDE487C1FD863610788EDD92FF"><enum>(iv)</enum><text>does not conflict with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law.</text></clause></subparagraph></paragraph></subsection> <subsection id="HCD0E3D1F47C0B5377A61E2ADE9369CE"><enum>(c)</enum><header>Nondiscrimination</header><text>Except as provided in any restrictions described in subsection (b)(2)(B), no State may, by statute, regulation, order, interpretation, or other action, regulate the insurance activities authorized or permitted under this Act or any other provision of Federal law of an insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, to the extent that such statute, regulation, order, interpretation, or other action—</text> <paragraph id="H1E321EC8478ECE0CAE95CAAB47F29C8"><enum>(1)</enum><text>distinguishes by its terms between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and other persons or entities engaged in such activities, in a manner that is in any way adverse to any such insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof;</text></paragraph> <paragraph id="H0DC385874C5D46B7BFA29388E7D5210"><enum>(2)</enum><text>as interpreted or applied, has or will have an impact on depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, that is substantially more adverse than its impact on other persons or entities providing the same products or services or engaged in the same activities that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></paragraph> <paragraph id="H09E64D04473EE653D75DA6BD25DABFD"><enum>(3)</enum><text>effectively prevents a depository institution or wholesale financial institution, or subsidiary or affiliate thereof, from engaging in insurance activities authorized or permitted by this Act or any other provision of Federal law; or</text></paragraph> <paragraph id="H92DC9F7C415DDD4EBB2D75AD102ED1F"><enum>(4)</enum><text>conflicts with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and persons and entities engaged in the business of insurance.</text></paragraph></subsection> <subsection id="H5B9E2DA6402444F300F4DEA66071A5E"><enum>(d)</enum><header>Limitation</header><text>Subsections (a) and (b) shall not be construed to affect the jurisdiction of the securities commission (or any agency or office performing like functions) of any State, under the laws of such State, to investigate and bring enforcement actions, consistent with section 18(c) of the <act-name parsable-cite="SA33">Securities Act of 1933</act-name>, with respect to fraud or deceit or unlawful conduct by any person, in connection with securities or securities transactions.</text></subsection> <subsection id="HF748EAB04DA7B6CC906615AB6510BE6"><enum>(e)</enum><header>Definition</header><text>For purposes of this section, the term <term>State</term> means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.</text></subsection></section> <section id="HDEF0B04A4663085603E780B5BFC5BF0"><enum>105.</enum><header>Mutual bank holding companies authorized</header><text display-inline="no-display-inline">Section 3(g)(2) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1842(g)(2)">12 U.S.C. 1842(g)(2)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HAD23BBC64949698151E90BBDC5C0AD2"> <paragraph id="H91C0F9CB492F35AEF10D50A5E8D00D1"><enum>(2)</enum><header>Regulations</header><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HACC0E63844A54D3607A015AA27DC06B"><enum>106.</enum><header>Prohibition on deposit production offices</header> <subsection id="H38B856FE47E950B5169957B8F0BD34E"><enum>(a)</enum><header>In general</header><text>Section 109(d) of the <act-name parsable-cite="RNIBBEA">Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1835a(d)">12 U.S.C. 1835a(d)</external-xref>) is amended—</text> <paragraph id="H08F0F98145F3C2695728F9AB75E9D47"><enum>(1)</enum><text>by inserting <quote>, the &short-title1;,</quote> after <quote>pursuant to this title</quote>; and</text></paragraph> <paragraph id="HB174F0A1433D8FA0809CD2BCE3EE94E"><enum>(2)</enum><text>by inserting <quote>or such Act</quote> after <quote>made by this title</quote>.</text></paragraph></subsection> <subsection id="HDF228571409FC47592DBE9B2E767CEC"><enum>(b)</enum><header>Technical and conforming amendment</header><text>Section 109(e)(4) of the <act-name parsable-cite="RNIBBEA">Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1835a(e)(4)">12 U.S.C. 1835a(e)(4)</external-xref>) is amended by inserting <quote>and any branch of a bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>)</quote> before the period.</text></subsection></section> <section id="HFF74922747446E3525053CA216CD758"><enum>107.</enum><header>Clarification of branch closure requirements</header><text display-inline="no-display-inline">Section 42(d)(4)(A) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1831r–1(d)(4)(A)">12 U.S.C. 1831r–1(d)(4)(A)</external-xref>) is amended by inserting <quote>and any bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>)</quote> before the period.</text></section> <section id="HE50B20134A6F807FCF9C2D9C79D3B99"><enum>108.</enum><header>Amendments relating to limited purpose banks</header> <subsection id="H181ABC79456CCF62598817B0ABC4DCD"><enum>(a)</enum><header>In general</header><text>Section 4(f) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1843(f)">12 U.S.C. 1843(f)</external-xref>) is amended—</text> <paragraph id="H350B83834DB534301DC53081D701F5B"><enum>(1)</enum><text>in paragraph (2)(A)(ii)—</text> <subparagraph id="HF9B4333C45D1995B6B2ECABEF976A2E"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subclause (IX);</text></subparagraph> <subparagraph id="HE0DEFD644480C17B3D296892D5DE65F"><enum>(B)</enum><text>by inserting <quote>and</quote> after the semicolon at the end of subclause (X); and</text></subparagraph> <subparagraph id="H901DC1114DACB25CF65B77ABA2BD594"><enum>(C)</enum><text>by inserting after subclause (X) the following new subclause:</text> <quoted-block id="HCC880080457594A24B4022A8C5F22BD"> <subclause id="HD7661E38486BA68D29F86FB5EC03A46"><enum>(XI)</enum><text>assets that are derived from, or are incidental to, activities in which institutions described in section 2(c)(2)(F) are permitted to engage,</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HD8AE5AF945C31A136DBEF4A23866A5D"><enum>(2)</enum><text>in paragraph (2), by striking subparagraph (B) and inserting the following new subparagraphs:</text> <quoted-block id="H7A52BF76463403EA8F62579B1D8E97F"> <subparagraph id="HC5C792AE4032C2850DFB1CB44BE9021"><enum>(B)</enum><text>any bank subsidiary of such company engages in any activity in which the bank was not lawfully engaged as of March 5, 1987, unless the bank is well managed and well capitalized;</text></subparagraph> <subparagraph id="HA26C982A424B08341056CF9F3E2D4CB"><enum>(C)</enum><text>any bank subsidiary of such company both—</text> <clause id="H45983AFD4A724331EC08819AAA8D217"><enum>(i)</enum><text>accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties; and</text></clause> <clause id="H5B91937A4C285BF7B10E0CB712DE73A"><enum>(ii)</enum><text>engages in the business of making commercial loans (and, for purposes of this clause, loans made in the ordinary course of a credit card operation shall not be treated as commercial loans); or</text></clause></subparagraph> <subparagraph id="H23A2906D4E955D6F191108BC727434F"><enum>(D)</enum><text>after the date of the enactment of the <act-name parsable-cite="CEA87">Competitive Equality Amendments of 1987</act-name>, any bank subsidiary of such company permits any overdraft (including any intraday overdraft), or incurs any such overdraft in such bank’s account at a Federal reserve bank, on behalf of an affiliate, other than an overdraft described in paragraph (3).</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H432D4896421DE41578BC97A7A9AB6CE"><enum>(3)</enum><text>by striking paragraphs (3) and (4) and inserting the following new paragraphs:</text> <quoted-block id="H4D846BCC472FE36AEEF5E9B5A669BB3"> <paragraph id="H11AEC45B4C2C2E6AABD385ABEA62122"><enum>(3)</enum><header>Permissible overdrafts described</header><text>For purposes of paragraph (2)(D), an overdraft is described in this paragraph if—</text> <subparagraph id="H3426D4E649429138400EDD988130BDD"><enum>(A)</enum><text>such overdraft results from an inadvertent computer or accounting error that is beyond the control of both the bank and the affiliate; or</text></subparagraph> <subparagraph id="H753C5EDF48925DF7E5CC0C8F98FA88C"><enum>(B)</enum><text>such overdraft—</text> <clause id="HD5E546294C830376428E03A3624B00C"><enum>(i)</enum><text>is permitted or incurred on behalf of an affiliate which is monitored by, reports to, and is recognized as a primary dealer by the Federal Reserve Bank of New York; and</text></clause> <clause id="H0D7AA27E40800EE5FDCFC7A9167FFFA"><enum>(ii)</enum><text>is fully secured, as required by the Board, by bonds, notes, or other obligations which are direct obligations of the United States or on which the principal and interest are fully guaranteed by the United States or by securities and obligations eligible for settlement on the Federal Reserve book entry system.</text></clause></subparagraph></paragraph> <paragraph id="H944748A94787732CC525D9AFB9F5561"><enum>(4)</enum><header>Divestiture in case of loss of exemption</header><text>If any company described in paragraph (1) fails to qualify for the exemption provided under such paragraph by operation of paragraph (2), such exemption shall cease to apply to such company and such company shall divest control of each bank it controls before the end of the 180-day period beginning on the date that the company receives notice from the Board that the company has failed to continue to qualify for such exemption, unless before the end of such 180-day period, the company has—</text> <subparagraph id="H37ED426A416CF1A05767D3B8EC49A2F"><enum>(A)</enum><text>corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; and</text></subparagraph> <subparagraph id="HB13B074447FBD35DE9EDDC9AEFAC943"><enum>(B)</enum><text>implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H2B6B09054AB95924E759CC8B4228B44"><enum>(b)</enum><header>Industrial loan companies affiliate overdrafts</header><text>Section 2(c)(2)(H) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841(c)(2)(H)">12 U.S.C. 1841(c)(2)(H)</external-xref>) is amended by inserting before the period at the end <quote>, or that is otherwise permissible for a bank controlled by a company described in section 4(f)(1)</quote>.</text></subsection></section> <section id="H856AB8B04E87A8866A30758298C8600"><enum>109.</enum><header>Reports on ongoing FTC study of consumer privacy issues</header><text display-inline="no-display-inline">With respect to the ongoing multistage study being conducted by the Federal Trade Commission on consumer privacy issues, the Commission shall submit to the Congress an interim report on the findings and conclusions of the Commission, together with such recommendations for legislative and administrative action as the Commission determines to be appropriate, at the conclusion of each stage of such study and a final report at the conclusion of the study.</text></section> <section id="HC9B580404C6081AB3AA7208420C8FD7"><enum>110.</enum><header>GAO study of economic impact on community banks and other small financial institutions</header> <subsection id="H5EA3A2474B8AEEF35D5CD583EA48EBE"><enum>(a)</enum><header>Study required</header><text>The Comptroller General of the United States shall conduct a study of the projected economic impact that the enactment of this Act will have on financial institutions which have total assets of $100,000,000 or less.</text></subsection> <subsection id="H24CA46B94A634AB737145E8709CBE07"><enum>(b)</enum><header>Report to the Congress</header><text>The Comptroller General of the United States shall submit a report to the Congress before the end of the 6-month period beginning on the date of the date of the enactment of this Act containing the findings and conclusions of the Comptroller General with regard to the study required under subsection (a) and such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.</text></subsection></section></subtitle> <subtitle id="HAD631370404FD91FAF6983BDC5B0D88"><enum>B</enum><header>Streamlining supervision of financial holding companies</header> <section id="HFC836F3F4C1C5C4BF850F883D02B13C"><enum>111.</enum><header>Streamlining financial holding company supervision</header><text display-inline="no-display-inline">Section 5(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844(c)">12 U.S.C. 1844(c)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H29BE961D475214038C543A8C66C629E"> <subsection id="H95E6DEE6422AA97CBD984DB47B8CD81"><enum>(c)</enum><header>Reports and examinations</header> <paragraph id="HDDA91BF947721822856CB19095A0300"><enum>(1)</enum><header>Reports</header> <subparagraph id="H3CC909824EEDAC6DA8AF78B83E6DB07"><enum>(A)</enum><header>In general</header><text>The Board from time to time may require any bank holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to—</text> <clause id="HCA2F50A54337F6A9D152C8A1C985FD6"><enum>(i)</enum><text>its financial condition, systems for monitoring and controlling financial and operating risks, and transactions with depository institution subsidiaries of the holding company; and</text></clause> <clause id="H88C4EBDA4AE9EA141330BFADE2F37B8"><enum>(ii)</enum><text>compliance by the company or subsidiary with applicable provisions of this Act.</text></clause></subparagraph> <subparagraph id="HB5918CFD495FB03ADA7F98820567BAC"><enum>(B)</enum><header>Use of existing reports</header> <clause id="HDC5DF4BA42F713E145E8D98500FECB1"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, accept reports in fulfillment of the Board’s reporting requirements under this paragraph that a bank holding company or any subsidiary of such company has provided or been required to provide to other Federal and State supervisors or to appropriate self-regulatory organizations.</text></clause> <clause id="HE8FACAA9427E5075837EC09FB1F79F1"><enum>(ii)</enum><header>Availability</header><text>A bank holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).</text></clause> <clause id="H7730AF4B4B3DB7AE8F96D580B9E4D86"><enum>(iii)</enum><header>Required use of publicly reported information</header><text>The Board shall, to the fullest extent possible, accept in fulfillment of any reporting or recordkeeping requirements under this Act information that is otherwise required to be reported publicly and externally audited financial statements.</text></clause> <clause id="H4430ED7A4279DF672ADD5994EC81D25"><enum>(iv)</enum><header>Reports filed with other agencies</header><text>In the event the Board requires a report from a functionally regulated nondepository institution subsidiary of a bank holding company of a kind that is not required by another Federal or State regulator or appropriate self-regulatory organization, the Board shall request that the appropriate regulator or self-regulatory organization obtain such report. If the report is not made available to the Board, and the report is necessary to assess a material risk to the bank holding company or any of its subsidiary depository institutions or compliance with this Act, the Board may require such subsidiary to provide such a report to the Board.</text></clause></subparagraph> <subparagraph id="HDD0046494D7F1F0203F92F81E8EAB9C"><enum>(C)</enum><header>Definition</header><text>For purposes of this subsection, the term <term>functionally regulated nondepository institution</term> means—</text> <clause id="HC2151CF645EDD8D922E6E3A5C908B00"><enum>(i)</enum><text>a broker or dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>;</text></clause> <clause id="H97E588654A405ECF07456CBCD72C2B9"><enum>(ii)</enum><text>an investment adviser registered under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>, or with any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></clause> <clause id="HDF251368418C6AC078F2C3B9915DBA0"><enum>(iii)</enum><text>an insurance company subject to supervision by a State insurance commission, agency, or similar authority; and</text></clause> <clause id="HF55178AB4E92AD1C3A078D8DE17FB2D"><enum>(iv)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></clause></subparagraph></paragraph> <paragraph id="H11151AFB4FC5AADC87EBEE82C537CF7"><enum>(2)</enum><header>Examinations</header> <subparagraph id="HE7FEB2614D62B947E283B289F46695F"><enum>(A)</enum><header>Examination authority</header> <clause id="HE21294B44F5F5489895C0BB7DDF0ACC"><enum>(i)</enum><header>In general</header><text>The Board may make examinations of each bank holding company and each subsidiary of a bank holding company.</text></clause> <clause id="HB550000A46427FD736BCB2A1A53E63F"><enum>(ii)</enum><header>Functionally regulated nondepository institution subsidiaries</header><text>Notwithstanding clause (i), the Board may make examinations of a functionally regulated nondepository institution subsidiary of a bank holding company only if—</text> <subclause id="HE0E617324E96A518F4947FA06BEF5A2"><enum>(I)</enum><text>the Board has reasonable cause to believe that such subsidiary is engaged in activities that pose a material risk to an affiliated depository institution, or</text></subclause> <subclause id="H6F67B3CF4A3139D131E3AE9CDB47BD0"><enum>(II)</enum><text>based on reports and other available information, the Board has reasonable cause to believe that a subsidiary is not in compliance with this Act or with provisions relating to transactions with an affiliated depository institution and the Board cannot make such determination through examination of the affiliated depository institution or bank holding company.</text></subclause></clause></subparagraph> <subparagraph id="H1A44AD264A219B587E1EF686D30095B"><enum>(B)</enum><header>Limitations on examination authority for bank holding companies and subsidiaries</header><text>Subject to subparagraph (A)(ii), the Board may make examinations under subparagraph (A)(i) of each bank holding company and each subsidiary of such holding company in order to—</text> <clause id="HFF242C6D4BD6A11BF5D3E7BFEC1B45B"><enum>(i)</enum><text>inform the Board of the nature of the operations and financial condition of the holding company and such subsidiaries;</text></clause> <clause id="HEE7391CF4B6F4593E332018DA44A4B9"><enum>(ii)</enum><text>inform the Board of—</text> <subclause id="H698702064B5500FCA42D839597C844D"><enum>(I)</enum><text>the financial and operational risks within the holding company system that may pose a threat to the safety and soundness of any subsidiary depository institution of such holding company; and</text></subclause> <subclause id="HC9358C254FF3A2A5275E53859EFC094"><enum>(II)</enum><text>the systems for monitoring and controlling such risks; and</text></subclause></clause> <clause id="H7DB4B9224D40D51B1CB890AC685B2CF"><enum>(iii)</enum><text>monitor compliance with the provisions of this Act and those governing transactions and relationships between any subsidiary depository institution and its affiliates.</text></clause></subparagraph> <subparagraph id="H18F698354A801CA439E2208CCF0B7AC"><enum>(C)</enum><header>Restricted focus of examinations</header><text>The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a bank holding company to—</text> <clause id="H8FD80F1A4986214EECA86A84FE7209C"><enum>(i)</enum><text>the bank holding company; and</text></clause> <clause id="HA50B122F4E02430351A3988F9314A4D"><enum>(ii)</enum><text>any subsidiary of the holding company that, because of—</text> <subclause id="H85306DAA41539FE03961D5BC7BB5B9C"><enum>(I)</enum><text>the size, condition, or activities of the subsidiary;</text></subclause> <subclause id="HD972AB2A4FA5BB10C763C697D3A3C1C"><enum>(II)</enum><text>the nature or size of transactions between such subsidiary and any depository institution which is also a subsidiary of such holding company; or</text></subclause> <subclause id="H7494898047E674113F72BC8CC980080"><enum>(III)</enum><text>the centralization of functions within the holding company system,</text></subclause><continuation-text continuation-text-level="clause">could have a materially adverse effect on the safety and soundness of any depository institution affiliate of the holding company.</continuation-text></clause></subparagraph> <subparagraph id="HA9F33E824F73446FCC1C52B561D1A51"><enum>(D)</enum><header>Deference to bank examinations</header><text>The Board shall, to the fullest extent possible, use, for the purposes of this paragraph, the reports of examinations of depository institutions made by the appropriate Federal and State depository institution supervisory authority.</text></subparagraph> <subparagraph id="HC6C87D2A412FF6931DC8CB9BE844E2F"><enum>(E)</enum><header>Deference to other examinations</header><text>The Board shall, to the fullest extent possible, address the circumstances which might otherwise permit or require an examination by the Board by forgoing an examination and instead reviewing the reports of examination made of—</text> <clause id="HECAC123748036150A5401382D65753B"><enum>(i)</enum><text>any registered broker or dealer by or on behalf of the Securities and Exchange Commission;</text></clause> <clause id="H954CFB9F49763A1F4FBF0CAA057C52F"><enum>(ii)</enum><text>any registered investment adviser properly registered by or on behalf of either the Securities and Exchange Commission or any State;</text></clause> <clause id="H16C7B9004BE118B59E2125ADD9E6634"><enum>(iii)</enum><text>any licensed insurance company by or on behalf of any state regulatory authority responsible for the supervision of insurance companies; and</text></clause> <clause id="H44398B2641EC0095A03141BA66B2A9C"><enum>(iv)</enum><text>any other subsidiary that the Board finds to be comprehensively supervised by a Federal or State authority.</text></clause></subparagraph></paragraph> <paragraph id="H20E460F44DE4A2E1C65DC7B5C6AA9D2"><enum>(3)</enum><header>Capital</header> <subparagraph id="HA08AB912493268C20FF997A3F383BF6"><enum>(A)</enum><header>In general</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, guidelines, standards, or requirements on any subsidiary of a financial holding company that is not a depository institution and—</text> <clause id="HE24378F34EC1188759CD829B66A5B40"><enum>(i)</enum><text>is in compliance with applicable capital requirements of another Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority; or</text></clause> <clause id="H50499AA943EA7E46CFC9C989DA7BA2F"><enum>(ii)</enum><text>is properly registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>, or with any State.</text></clause></subparagraph> <subparagraph id="HFD6637984B4773285D883DB83EFE44D"><enum>(B)</enum><header>Rule of construction</header><text>Subparagraph (A) shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to activities of a registered investment adviser other than investment advisory activities or activities incidental to investment advisory activities.</text></subparagraph> <subparagraph id="HA877979A4B29A3181A836292D8E1692"><enum>(C)</enum><header>Limitations on indirect action</header><text>In developing, establishing, or assessing holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board shall not take into account the activities, operations, or investments of an affiliated investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>, if the investment company is not—</text> <clause id="H6F68B32C412B23C65D7660B5D4F4C09"><enum>(i)</enum><text>a bank holding company; or</text></clause> <clause id="HD7803EA64975FC1ADDE8A0A552C869F"><enum>(ii)</enum><text>controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, where the shares owned by the bank holding company have a market value equal to more than $1,000,000.</text></clause></subparagraph></paragraph> <paragraph id="H19E127934797179C62B59488AE03BE8"><enum>(4)</enum><header>Transfer of Board authority to appropriate Federal banking agency</header> <subparagraph id="H7704341D47F1C2947E16B2ACFF4B7D3"><enum>(A)</enum><header>In general</header><text>In the case of any bank holding company which is not significantly engaged in nonbanking activities, the Board, in consultation with the appropriate Federal banking agency, may designate the appropriate Federal banking agency of the lead insured depository institution subsidiary of such holding company as the appropriate Federal banking agency for the bank holding company.</text></subparagraph> <subparagraph id="HFFEA5FBC4811CB85C01F2A9BD4AD54C"><enum>(B)</enum><header>Authority transferred</header><text>An agency designated by the Board under subparagraph (A) shall have the same authority as the Board under this Act to—</text> <clause id="H6280DEA543B35C5238671FB98D4CEC1"><enum>(i)</enum><text>examine and require reports from the bank holding company and any affiliate of such company (other than a depository institution) under section 5;</text></clause> <clause id="H52E5952B4ECCC9A7E70C03B5AFB7C8B"><enum>(ii)</enum><text>approve or disapprove applications or transactions under section 3;</text></clause> <clause id="HE23230CC452318B0E577B0B0CECB2A8"><enum>(iii)</enum><text>take actions and impose penalties under subsections (e) and (f) of section 5 and section 8; and</text></clause> <clause id="H40CBE01A443706F1B824ED84D99BF62"><enum>(iv)</enum><text>take actions regarding the holding company, any affiliate of the holding company (other than a depository institution), or any institution-affiliated party of such company or affiliate under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> and any other statute which the Board may designate.</text></clause></subparagraph> <subparagraph id="HEBE5AB8C471D5A9A71C831B924799FC"><enum>(C)</enum><header>Agency orders</header><text>Section 9 of this Act and section 105 of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name> shall apply to orders issued by an agency designated under subparagraph (A) in the same manner such sections apply to orders issued by the Board.</text></subparagraph></paragraph> <paragraph id="HD775ADD64DAA2278D60B26B8DAFAD73"><enum>(5)</enum><header>Functional regulation of securities and insurance activities</header><text>The Board shall defer to—</text> <subparagraph id="HA7F3481747E7E05C56F45C82464297D"><enum>(A)</enum><text>the Securities and Exchange Commission with regard to all interpretations of, and the enforcement of, applicable Federal securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, investment advisers, and investment companies;</text></subparagraph> <subparagraph id="HD5A101DE48C97C1D487879A1C985DC0"><enum>(B)</enum><text>the relevant State securities authorities with regard to all interpretations of, and the enforcement of, applicable State securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, and investment advisers; and</text></subparagraph> <subparagraph id="H4ACABED44C27417F30AD82B33FD60FB"><enum>(C)</enum><text>the relevant State insurance authorities with regard to all interpretations of, and the enforcement of, applicable State insurance laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of insurance companies and insurance agents.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H3737CAC84D6640E52C25F0A9F8F55D7"><enum>112.</enum><header>Elimination of application requirement for financial holding companies</header> <subsection id="HB4ED57874A131E618416F98BDFEA200"><enum>(a)</enum><header>Prevention of duplicative filings</header><text>Section 5(a) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844(a)">12 U.S.C. 1844(a)</external-xref>) is amended by adding the following new sentence at the end: <quote>A declaration filed in accordance with section 6(b)(1)(C) shall satisfy the requirements of this subsection with regard to the registration of a bank holding company but not any requirement to file an application to acquire a bank pursuant to section 3.</quote>.</text></subsection> <subsection id="H663E9C9744B204361546079C532BC6D"><enum>(b)</enum><header>Divestiture procedures</header><text>Section 5(e)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844(e)(1)">12 U.S.C. 1844(e)(1)</external-xref>) is amended—</text> <paragraph id="H348167FF421B84479F098D95CE993ED"><enum>(1)</enum><text>by striking <quote><act-name parsable-cite="FISA66">Financial Institutions Supervisory Act of 1966</act-name>, order</quote> and inserting</text> <quoted-block act-name="Financial Institutions Supervisory Act of 1966" display-inline="yes-display-inline" id="H10A5377A40AEA76EAC907084D67ECC2"><text><act-name parsable-cite="FISA66">Financial Institutions Supervisory Act of 1966</act-name>, at the election of the bank holding company—</text> <subparagraph indent="up1" id="HC05010B443554CF40AAFCEBA800020E"><enum>(A)</enum><text>order</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H8551FEDC4DCED09BFAF28DB61B7D3DB"><enum>(2)</enum><text>by striking <quote>shareholders of the bank holding company. Such distribution</quote> and inserting</text> <quoted-block display-inline="yes-display-inline" id="H880F2B9B46645682C01875ABC5F1E20"><text>shareholders of the bank holding company; or</text> <subparagraph indent="up1" id="HC37B7C604E7484672C90BCB9E1655EC"><enum>(B)</enum><text>order the bank holding company, after due notice and opportunity for hearing, and after consultation with the primary supervisor for the bank, which shall be the Comptroller of the Currency in the case of a national bank, and the Federal Deposit Insurance Corporation and the appropriate State supervisor in the case of an insured nonmember bank, to terminate (within 120 days or such longer period as the Board may direct) the ownership or control of any such bank by such company.</text><continuation-text continuation-text-level="paragraph">The distribution referred to in subparagraph (A)</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="HE1FDD93E49CE8B44525683A96C55D52"><enum>113.</enum><header>Authority of State insurance regulator and Securities and Exchange Commission</header><text display-inline="no-display-inline">Section 5 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844">12 U.S.C. 1844</external-xref>) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HE7A5218E43CEBD18147B73B4A3EC3EA"> <subsection id="HF4A7DD0D4A16B2077A3B3DB98E4623B"><enum>(g)</enum><header>Authority of State insurance regulator and the Securities and Exchange Commission</header> <paragraph id="H7582F729493830F74BCC9B8BA5C1AF8"><enum>(1)</enum><header>In general</header><text>Notwithstanding any other provision of law, any regulation, order, or other action of the Board which requires a bank holding company to provide funds or other assets to a subsidiary insured depository institution shall not be effective nor enforceable if—</text> <subparagraph id="HFE931A274EB7BDED2E8071BDDAA88C3"><enum>(A)</enum><text>such funds or assets are to be provided by—</text> <clause id="HDB1BBA8D4C144081653C939F9C9CF1A"><enum>(i)</enum><text>a bank holding company that is an insurance company or is a broker or dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>; or</text></clause> <clause id="H9C5D5D3E4DEEF2095D90018CBE4E487"><enum>(ii)</enum><text>an affiliate of the depository institution which is an insurance company or a broker or dealer registered under such Act; and</text></clause></subparagraph> <subparagraph id="H9D0EBE5F456AE5077AA59888AE66FE8"><enum>(B)</enum><text>the State insurance authority for the insurance company or the Securities and Exchange Commission for the registered broker or dealer, as the case may be, determines in writing sent to the holding company and the Board that the holding company shall not provide such funds or assets because such action would have a material adverse effect on the financial condition of the insurance company or the broker or dealer, as the case may be.</text></subparagraph></paragraph> <paragraph id="HDDF142634467BA0B7BB648951E4BD8A"><enum>(2)</enum><header>Notice to State insurance authority or SEC required</header><text>If the Board requires a bank holding company, or an affiliate of a bank holding company, which is an insurance company or a broker or dealer described in paragraph (1)(A) to provide funds or assets to an insured depository institution subsidiary of the holding company pursuant to any regulation, order, or other action of the Board referred to in paragraph (1), the Board shall promptly notify the State insurance authority for the insurance company or the Securities and Exchange Commission, as the case may be, of such requirement.</text></paragraph> <paragraph id="H0CF646544E15BA707E7F35B14FAD99D"><enum>(3)</enum><header>Divestiture in lieu of other action</header><text>If the Board receives a notice described in paragraph (1)(B) from a State insurance authority or the Securities and Exchange Commission with regard to a bank holding company or affiliate referred to in that paragraph, the Board may order the bank holding company to divest the insured depository institution not later than 180 days after receiving the notice, or such longer period as the Board determines consistent with the safe and sound operation of the insured depository institution.</text></paragraph> <paragraph id="HAD8003EA4FE67DEF66A5439FEDE1B96"><enum>(4)</enum><header>Conditions before divestiture</header><text>During the period beginning on the date an order to divest is issued by the Board under paragraph (3) to a bank holding company and ending on the date the divestiture is completed, the Board may impose any conditions or restrictions on the holding company’s ownership or operation of the insured depository institution, including restricting or prohibiting transactions between the insured depository institution and any affiliate of the institution, as are appropriate under the circumstances.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HD183FFF34FF67E8BA0E833A4A2E005D"><enum>114.</enum><header>Prudential safeguards</header><text display-inline="no-display-inline">Section 5 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844">12 U.S.C. 1844</external-xref>) is amended by inserting after subsection (g) (as added by section 113 of this subtitle) the following new subsection:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H2444EDAC4B3918EE59424EB7A0027EA"> <subsection id="H58FEC0EA42EC8C213CF30C9600E179A"><enum>(h)</enum><header>Prudential safeguards</header> <paragraph id="HE8F134444ABA1C5835097588F642D74"><enum>(1)</enum><header>In general</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a depository institution subsidiary of a bank holding company and any affiliate of such depository institution (other than a subsidiary of such institution) which the Board finds is consistent with the public interest, the purposes of this Act, the &short-title1;, the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, and other Federal law applicable to depository institution subsidiaries of bank holding companies and the standards in paragraph (2).</text></paragraph> <paragraph id="HE1A370BD4EC2D346014F8DBDB754DF2"><enum>(2)</enum><header>Standards</header><text>The Board may exercise authority under paragraph (1) if the Board finds that such action would—</text> <subparagraph id="H2605D487417C0632C6DD60A59447C36"><enum>(A)</enum><text>avoid any significant risk to the safety and soundness of depository institutions or any Federal deposit insurance fund;</text></subparagraph> <subparagraph id="H4C38194E4226830B068A6E98F6CED9E"><enum>(B)</enum><text>enhance the financial stability of bank holding companies;</text></subparagraph> <subparagraph id="H020384DE45E83C4A88A33881E578FBE"><enum>(C)</enum><text>avoid conflicts of interest or other abuses;</text></subparagraph> <subparagraph id="H19F3649E42D839E817383A9BCD512E2"><enum>(D)</enum><text>enhance the privacy of customers of depository institutions; or</text></subparagraph> <subparagraph id="HE68A42DA47EAE152CF2D8794BC8125C"><enum>(E)</enum><text>promote the application of national treatment and equality of competitive opportunity between nonbank affiliates owned or controlled by domestic bank holding companies and nonbank affiliates owned or controlled by foreign banks operating in the United States.</text></subparagraph></paragraph> <paragraph id="HA96CBBF64D8CD6DAD631649E242CCF6"><enum>(3)</enum><header>Review</header><text>The Board shall regularly—</text> <subparagraph id="HBB5D79EF4B2158FD04FFA8A5695DA20"><enum>(A)</enum><text>review all restrictions or requirements established pursuant to paragraph (1) to determine whether there is a continuing need for any such restriction or requirement to carry out the purposes of the Act, including any purpose described in paragraph (2); and</text></subparagraph> <subparagraph id="H622E908A4DBD9336DA08C6AE7CF19AD"><enum>(B)</enum><text>modify or eliminate any restriction or requirement the Board finds is no longer required for such purposes.</text></subparagraph></paragraph> <paragraph id="H950A8A634144BB94A79A85AF717F07C"><enum>(4)</enum><header>Foreign banks</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a foreign bank and any affiliate in the United States of such foreign bank that the Board finds are consistent with the public interest, the purposes of this Act, the &short-title1;, the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, and other Federal law applicable to foreign banks and their affiliates in the United States, and the standards in paragraphs (2) and (3).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H7B8A8EC5444BB132CED61E9AFFF9B99"><enum>115.</enum><header>Examination of investment companies</header> <subsection id="HD96B09F8403978BFACCD2FB5B9FCCFE"><enum>(a)</enum><header>Exclusive Commission authority</header> <paragraph id="HB620B0B74D7F82B61ACF2B83E81ED9B"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), the Commission shall be the sole Federal agency with authority to inspect and examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="HF8FBB81644E7A58CFD4D2FADC9CCB79"><enum>(2)</enum><header>Prohibition on banking agencies</header><text>Except as provided in paragraph (3), a Federal banking agency may not inspect or examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="HE44E448A4454F0F66222C7B224B9EE7"><enum>(3)</enum><header>Certain examinations authorized</header><text>Nothing in this subsection prevents the Federal Deposit Insurance Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any insured depository institution, pursuant to its authority under section 10(b)(4) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, as may be necessary to disclose fully the relationship between the depository institution and the affiliate, and the effect of such relationship on the depository institution.</text></paragraph></subsection> <subsection id="HFD5D207343DFD3DBC32A4290A144F6C"><enum>(b)</enum><header>Examination results and other information</header><text>The Commission shall provide to any Federal banking agency, upon request, the results of any examination, reports, records, or other information with respect to any registered investment company to the extent necessary for the agency to carry out its statutory responsibilities.</text></subsection> <subsection id="HCC5199FD49C9F9C7E29F4E9D2D7150B"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="HC49875B24D6B4C5D27B7579BC182C61"><enum>(1)</enum><header>Bank holding company</header><text>The term <term>bank holding company</term> has the same meaning as in <external-xref legal-doc="act" parsable-cite="BHC65/2">section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph> <paragraph id="H5745A02E41E89A5EECABBEAD492F96B"><enum>(2)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text></paragraph> <paragraph id="HC8DA626B48A97671E25939B672ABB23"><enum>(3)</enum><header>Federal banking agency</header><text>The term <term>Federal banking agency</term> has the same meaning as in section 3(z) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph> <paragraph id="H2E89BF0E499310DB43E5F1B230716FB"><enum>(4)</enum><header>Registered investment company</header><text>The term <term>registered investment company</term> means an investment company which is registered with the Commission under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>.</text></paragraph> <paragraph id="H33F3FAEB4DF48F55EC7DF49F745C4FF"><enum>(5)</enum><header>Savings and loan holding company</header><text>The term <term>savings and loan holding company</term> has the same meaning as in section 10(a)(1)(D) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name>.</text></paragraph></subsection></section> <section id="HEC6F7025437ED88EAD7A508AD326674"><enum>116.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header><text display-inline="no-display-inline">The <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841</external-xref> et seq.) is amended by inserting after section 10 the following new section:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HBC91ADB4439B749993DE819600E5E33"> <section id="H4711DB974F414C8451432FAF66C8A13"><enum>10A.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header> <subsection id="HB74FBC754475288BE13B1885A1C3FBD"><enum>(a)</enum><header>Limitation on direct action</header> <paragraph id="H407CB71A4ED4FCF88E18D7947DDF963"><enum>(1)</enum><header>In general</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> against or with respect to a regulated subsidiary of a bank holding company unless the action is necessary to prevent or redress an unsafe or unsound practice or breach of fiduciary duty by such subsidiary that poses a material risk to—</text> <subparagraph id="HDE708AF0406EFE47F7B49EB64C2ECA6"><enum>(A)</enum><text>the financial safety, soundness, or stability of an affiliated depository institution; or</text></subparagraph> <subparagraph id="HDC425D9343651F78E28C83B159ECA6E"><enum>(B)</enum><text>the domestic or international payment system.</text></subparagraph></paragraph> <paragraph id="H1A59179041A62DB88B0D619169AD55C"><enum>(2)</enum><header>Criteria for Board action</header><text>The Board shall not take action otherwise permitted under paragraph (1) unless the Board finds that it is not reasonably possible to effectively protect against the material risk at issue through action directed at or against the affiliated depository institution or against depository institutions generally.</text></paragraph></subsection> <subsection id="H5516FD554CABE4BA97B232883DACD58"><enum>(b)</enum><header>Limitation on indirect action</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> against or with respect to a financial holding company or a wholesale financial holding company where the purpose or effect of doing so would be to take action indirectly against or with respect to a regulated subsidiary that may not be taken directly against or with respect to such subsidiary in accordance with subsection (a).</text></subsection> <subsection id="H4A4585CF4E2E578A28E47A8B1C2FBF6"><enum>(c)</enum><header>Actions specifically authorized</header><text>Notwithstanding subsection (a), the Board may take action under this Act or section 8 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> to enforce compliance by a regulated subsidiary with Federal law that the Board has specific jurisdiction to enforce against such subsidiary.</text></subsection> <subsection id="HAE04FB83457CA03F63E0A2B000CAB40"><enum>(d)</enum><header>Regulated subsidiary defined</header><text>For purposes of this section, the term <term>regulated subsidiary</term> means any company that is not a bank holding company and is—</text> <paragraph id="H67F3D96F4D664844E01BCEA7BFC1C12"><enum>(1)</enum><text>a broker or dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>;</text></paragraph> <paragraph id="H5C00B6084C9CFEC7B3F14CB0B33A3B4"><enum>(2)</enum><text>a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></paragraph> <paragraph id="H8E43AA2C4CAEC2BE49D3CB8BC89297D"><enum>(3)</enum><text>an investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>;</text></paragraph> <paragraph id="HB37C362B4C7E3F8062D9AA91648200E"><enum>(4)</enum><text>an insurance company or an insurance agency subject to supervision by a State insurance commission, agency, or similar authority; or</text></paragraph> <paragraph id="H754BB5DA4848625BB7E2B5888CE1B00"><enum>(5)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H7788306E46AB82A04E81F9AEE3D1100"><enum>117.</enum><header>Interagency consultation</header> <subsection id="HDD178EB14FB10748E69D708D5FB9BDD"><enum>(a)</enum><header>Purpose</header><text>It is the intention of Congress that the Board of Governors of the Federal Reserve System, as the umbrella supervisor for financial holding companies, and the State insurance regulators, as the functional regulators of companies engaged in insurance activities, coordinate efforts to supervise companies that control both a depository institution and a company engaged in insurance activities regulated under State law. In particular, Congress believes that the Board and the State insurance regulators should share, on a confidential basis, information relevant to the supervision of companies that control both a depository institution and a company engaged in insurance activities, including information regarding the financial health of the consolidated organization and information regarding transactions and relationships between insurance companies and affiliated depository institutions. The appropriate Federal banking agencies for depository institutions should also share, on a confidential basis, information with the relevant State insurance regulators regarding transactions and relationships between depository institutions and affiliated companies engaged in insurance activities. The purpose of this section is to encourage this coordination and confidential sharing of information, and to thereby improve both the efficiency and the quality of the supervision of financial holding companies and their affiliated depository institutions and companies engaged in insurance activities.</text></subsection> <subsection id="H6277363C413A401328AC1683023CB77"><enum>(b)</enum><header>Examination results and other information</header> <paragraph id="HB973FBE645B1B2064A1626BB08FFD04"><enum>(1)</enum><header>Information of the Board</header><text>Upon the request of the appropriate insurance regulator of any State, the Board may provide any information of the Board regarding the financial condition, risk management policies, and operations of any financial holding company that controls a company that is engaged in insurance activities and is regulated by such State insurance regulator, and regarding any transaction or relationship between such an insurance company and any affiliated depository institution. The Board may provide any other information to the appropriate State insurance regulator that the Board believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="HB6FC3F91445F7CA3CA4573B400008FA"><enum>(2)</enum><header>Banking agency information</header><text>Upon the request of the appropriate insurance regulator of any State, the appropriate Federal banking agency may provide any information of the agency regarding any transaction or relationship between a depository institution supervised by such Federal banking agency and any affiliated company that is engaged in insurance activities regulated by such State insurance regulator. The appropriate Federal banking agency may provide any other information to the appropriate State insurance regulator that the agency believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="H1D2BE4164E44CB373301FEA8EF8504D"><enum>(3)</enum><header>State insurance regulator information</header><text>Upon the request of the Board or the appropriate Federal banking agency, a State insurance regulator may provide any examination or other reports, records, or other information to which such insurance regulator may have access with respect to a company which—</text> <subparagraph id="H44A3FB6C4088B48C4905F0AD4EE874B"><enum>(A)</enum><text>is engaged in insurance activities and regulated by such insurance regulator; and</text></subparagraph> <subparagraph id="HF6430B10441DE4252C61A59E9BE26BD"><enum>(B)</enum><text>is an affiliate of an insured depository institution, wholesale financial institution, or financial holding company.</text></subparagraph></paragraph></subsection> <subsection id="HB2926FC644555FC8DAC7B68573F1D44"><enum>(c)</enum><header>Consultation</header><text>Before making any determination relating to the initial affiliation of, or the continuing affiliation of, an insured depository institution, wholesale financial institution, or financial holding company with a company engaged in insurance activities, the appropriate Federal banking agency shall consult with the appropriate State insurance regulator of such company and take the views of such insurance regulator into account in making such determination.</text></subsection> <subsection id="H82DDB57F4F56D67F6A8EBE86D9754D7"><enum>(d)</enum><header>Effect on other authority</header><text>Nothing in this section shall limit in any respect the authority of the appropriate Federal banking agency with respect to an insured depository institution, wholesale financial institution, or bank holding company or any affiliate thereof under any provision of law.</text></subsection> <subsection id="H808B270146E966918839348296E99DF"><enum>(e)</enum><header>Confidentiality and privilege</header> <paragraph id="H3F7FC7024CAEEF619ACB27BBFAF3FFB"><enum>(1)</enum><header>Confidentiality</header><text>The appropriate Federal banking agency shall not provide any information or material that is entitled to confidential treatment under applicable Federal banking agency regulations, or other applicable law, to a State insurance regulator unless such regulator agrees to maintain the information or material in confidence and to take all reasonable steps to oppose any effort to secure disclosure of the information or material by the regulator. The appropriate Federal banking agency shall treat as confidential any information or material obtained from a State insurance regulator that is entitled to confidential treatment under applicable State regulations, or other applicable law, and take all reasonable steps to oppose any effort to secure disclosure of the information or material by the Federal banking agency.</text></paragraph> <paragraph id="HB251B88C4EF98BB0A650878F86724DA"><enum>(2)</enum><header>Privilege</header><text>The provision pursuant to this section of information or material by a Federal banking agency or State insurance regulator shall not constitute a waiver of, or otherwise affect, any privilege to which the information or material is otherwise subject.</text></paragraph></subsection> <subsection id="HD1521B464EDC1BDE23E958B568D001F"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="H0364842443A9E4237B5DBAB9CA8175C"><enum>(1)</enum><header>Appropriate Federal banking agency; insured depository institution</header><text>The terms <term>appropriate Federal banking agency</term> and <term>insured depository institution</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="FDIA/3">section 3</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph> <paragraph id="H44C254BF42047472AD7DA693B3F083C"><enum>(2)</enum><header>Board; financial holding company; and wholesale financial institution</header><text>The terms <term>Board</term>, <term>financial holding company</term>, and <term>wholesale financial institution</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="BHC65/2">section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph></subsection></section> <section id="H84316E074702BDC63DBDB594006700C"><enum>118.</enum><header>Equivalent regulation and supervision</header> <subsection id="H2C6B0C00448BC3B6F0013D8CD0CB0A3"><enum>(a)</enum><header>In general</header><text>Notwithstanding any other provision of law, the provisions of—</text> <paragraph id="HA3DAF35A4AE5796DA2AB01BDC208166"><enum>(1)</enum><text>section 5(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (as amended by this Act) that limit the authority of the Board of Governors of the Federal Reserve System to require reports from, to make examinations of, or to impose capital requirements on bank holding companies and their nonbank subsidiaries; and</text></paragraph> <paragraph id="H0134A8E54D08D0DE42D166ACE046C81"><enum>(2)</enum><text><external-xref legal-doc="act" parsable-cite="BHC65/10A">section 10A</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (as added by this Act) that limit whatever authority the Board might otherwise have to take direct or indirect action with respect to bank holding companies and their nonbank subsidiaries,</text></paragraph><continuation-text continuation-text-level="subsection">shall also limit whatever authority that the Federal Deposit Insurance Corporation might otherwise have under any statute to require reports, make examinations, impose capital requirements or take any other direct or indirect action with respect to bank holding companies and their nonbank subsidiaries (including nonbank subsidiaries of depository institutions), subject to the same standards and requirements as are applicable to the Board under such provisions.</continuation-text></subsection> <subsection id="H1B3A27B842FCA5812E81448270C2FA7"><enum>(b)</enum><header>Certain examinations authorized</header><text>Nothing in this section shall prevent the Federal Deposit Insurance Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any insured depository institution, pursuant to its authority under section 10(b)(4) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, as may be necessary to disclose fully the relationship between the depository institution and the affiliate, and the effect of such relationship on the depository institution.</text></subsection></section> <section id="H84695E2B42A031D205169AB04E90A9A"><enum>119.</enum><header>Prohibition on FDIC assistance to affiliates and subsidiaries</header><text display-inline="no-display-inline">Section 11(a)(4)(B) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1821(a)(4)(B)">12 U.S.C. 1821(a)(4)(B)</external-xref>) is amended by striking <quote>to benefit any shareholder of</quote> and inserting <quote>to benefit any shareholder, affiliate (other than an insured depository institution that receives assistance in accordance with the provisions of this Act), or subsidiary of</quote>.</text></section></subtitle> <subtitle id="H02C73CC1437164DF365652B90679D86"><enum>C</enum><header>Subsidiaries of national banks</header> <section id="HDDF0C9244161780406D4519838DFD3B"><enum>121.</enum><header>Permissible activities for subsidiaries of national banks</header> <subsection id="HAB83C896404EF0A9AC341FB9680004A"><enum>(a)</enum><header>Financial subsidiaries of national banks</header><text>Chapter one of title LXII of the Revised Statutes of United States (<external-xref legal-doc="usc" parsable-cite="usc/12/21">12 U.S.C. 21</external-xref> et seq.) is amended—</text> <paragraph id="H53AEE7814AC1E85245511383BBB9DF3"><enum>(1)</enum><text>by redesignating section 5136A as section 5136C; and</text></paragraph> <paragraph id="HB489BA044DCD40D7477B4DAFAD2435D"><enum>(2)</enum><text>by inserting after section 5136 (<external-xref legal-doc="usc" parsable-cite="usc/12/24">12 U.S.C. 24</external-xref>) the following new section:</text> <quoted-block id="HABBED2FF4687092F7FFDDE9200D6F68"> <section id="HE64F5B4047277756C7AC439BEEE6A1E"><enum>5136A.</enum><header>Subsidiaries of national banks</header> <subsection id="HF85D96D347314642B30C2CA9AD45F72"><enum>(a)</enum><header>Subsidiaries of national banks authorized to engage in financial activities</header> <paragraph id="HF714DFD54AB72461733C6FB272ED9DE"><enum>(1)</enum><header>Exclusive authority</header><text>No provision of section 5136 or any other provision of this title LXII of the Revised Statutes shall be construed as authorizing a subsidiary of a national bank to engage in, or own any share of or any other interest in any company engaged in, any activity that—</text> <subparagraph id="H3DC80AF742FAEA820809C0BBAEE91D5"><enum>(A)</enum><text>is not permissible for a national bank to engage in directly; or</text></subparagraph> <subparagraph id="HB01F1FB44AB8B779F93675B6657E18E"><enum>(B)</enum><text>is conducted under terms or conditions other than those that would govern the conduct of such activity by a national bank,</text></subparagraph><continuation-text continuation-text-level="paragraph">unless a national bank is specifically authorized by the express terms of a Federal statute and not by implication or interpretation to acquire shares of or an interest in, or to control, such subsidiary, such as by paragraph (2) of this subsection and section 25A of the Federal Reserve Act.</continuation-text></paragraph> <paragraph id="H2CEB8D5C469C93A2C22A0BAC46CFF49"><enum>(2)</enum><header>Specific authorization to conduct agency activities which are financial in nature</header><text>A national bank may control a company, or hold an interest in a company that is wholly owned by an insured depository institution or subsidiary thereof, that engages in agency activities that have been determined to be financial in nature or incidental to such financial activities pursuant to and in accordance with section 6(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> if—</text> <subparagraph id="HF0F8EAF740F84BADE87EA4940149B59"><enum>(A)</enum><text>the company engages in such activities solely as agent and not directly or indirectly as principal;</text></subparagraph> <subparagraph id="H3AC493B448227FD5AA925CA551A8A6E"><enum>(B)</enum><text>the national bank is well capitalized and well managed;</text></subparagraph> <subparagraph id="H4866C419401E0F890114FAA9972E56B"><enum>(C)</enum><text>all depository institution affiliates of the national bank are well capitalized and well managed; and</text></subparagraph> <subparagraph id="H6FF7EF7D46D481F7510E22811432B3E"><enum>(D)</enum><text>the bank has received the approval of the Comptroller of the Currency.</text></subparagraph></paragraph> <paragraph id="HF4A03ED64901CD518DB64EA85D69F7A"><enum>(3)</enum><header>Community needs requirement</header><text>A national bank may not acquire control of, or an interest in, any company under paragraph (2) unless the national bank, and all depository institution affiliates of the national bank, have achieved a rating of <quote>satisfactory record of meeting community credit needs</quote>, or better, at the most recent examination of each such bank or institution under the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></paragraph> <paragraph id="HFAD96EB54A605731BED345ABE7B488C"><enum>(4)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <subparagraph id="H6238B02B4A408ADD0B3C2B97FB60EA2"><enum>(A)</enum><header>Company; control; affiliate; subsidiary</header><text>The terms <term>company</term>, <term>control</term>, <term>affiliate</term>, and <term>subsidiary</term> have the same meanings as in section 2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subparagraph> <subparagraph id="H6940CAAB42828C3F3174859A8ED7BF9"><enum>(B)</enum><header>Well capitalized</header><text>The term <term>well capitalized</term> has the same meaning as in section 38 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> and, for purposes of this section, the Comptroller shall have exclusive jurisdiction to determine whether a national bank is well capitalized.</text></subparagraph> <subparagraph id="H767EA1B4474964FCB06B0EB4C5D12D8"><enum>(C)</enum><header>Well managed</header><text>The term <term>well managed</term> means—</text> <clause id="H8E4EBA21492BEDE123A9FA960129A16"><enum>(i)</enum><text>in the case of a depository institution that has been examined, unless otherwise determined in writing by the appropriate Federal banking agency—</text> <subclause id="H8DDD353B4CDC0C9A36426FA7F5F7B30"><enum>(I)</enum><text>the achievement of a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under an equivalent rating system) in connection with the most recent examination or subsequent review of the depository institution; and</text></subclause> <subclause id="H703BBD04423EC0EF3BB63E99A610D21"><enum>(II)</enum><text>at least a rating of 2 for management, if that rating is given; or</text></subclause></clause> <clause id="H87E73ADB4424BE8EDCE373BDB5EF7E0"><enum>(ii)</enum><text>in the case of any depository institution that has not been examined, the existence and use of managerial resources that the appropriate Federal banking agency determines are satisfactory.</text></clause></subparagraph> <subparagraph id="H7E764F014D8674C7AA15FA98B163F58"><enum>(D)</enum><header>Incorporated definitions</header><text>The terms <term>appropriate Federal banking agency</term> and <term>depository institution</term> have the same meanings as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HCEC95DC3424B962D25B29B9F3F9818E"><enum>(b)</enum><header>Limitation on certain activities in subsidiaries</header><text>Section 21(a)(1) of the <act-name parsable-cite="BA33">Banking Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/378(a)(1)">12 U.S.C. 378(a)(1)</external-xref>) is amended—</text> <paragraph id="HD0AE21484F4478B590F0048AEAD24FD"><enum>(1)</enum><text>by inserting <quote>, or to be a subsidiary of any person, firm, corporation, association, business trust, or similar organization engaged (unless such subsidiary (A) was engaged in such securities activities as of September 15, 1997, or (B) is a nondepository subsidiary of (i) a foreign bank and is not also a subsidiary of a domestic depository institution, or (ii) an unincorporated private bank that is not insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>),</quote> after <quote>to engage at the same time</quote>; and</text></paragraph> <paragraph id="HF83557074AA6D551C7B67F8E891DB7E"><enum>(2)</enum><text>by inserting <quote>or any subsidiary of such bank, company, or institution</quote> after <quote>or private bankers</quote>.</text></paragraph></subsection> <subsection id="HC75E131E4939FB20F4476283B757D22"><enum>(c)</enum><header>Technical and conforming amendments</header> <paragraph id="HCF7A75564E6B84F986B686A867B88DE"><enum>(1)</enum><header>Antitying</header><text>Section 106(a) of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name> is amended by adding at the end the following new sentence: <quote>For purposes of this section, a subsidiary of a national bank which engages in activities as an agent pursuant to section 5136A(a)(2) shall be deemed to be a subsidiary of a bank holding company, and not a subsidiary of a bank.</quote>.</text></paragraph> <paragraph id="H9197FC0944F2485FF4AD3182BCEAE7E"><enum>(2)</enum><header>Section 23b</header><text>Section 23B(a) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/371c–1(a)">12 U.S.C. 371c–1(a)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="Federal Reserve Act" id="H0918C48D49B0CD2F40FDB39FBE75D9E"> <paragraph id="HC44890F149EBF7BA27510397457BB86"><enum>(4)</enum><header>Subsidiary of national bank</header><text>For purposes of this section, a subsidiary of a national bank which engages in activities as an agent pursuant to section 5136A(a)(2) shall be deemed to be an affiliate of the national bank and not a subsidiary of the bank.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H30A10629445EE4F3E6CB8AB48CF1B4D"><enum>(d)</enum><header>Clerical amendment</header><text>The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended—</text> <paragraph id="H8BF6CECD46228C64C2FF839065CB88F"><enum>(1)</enum><text>by redesignating the item relating to section 5136A as section 5136C; and</text></paragraph> <paragraph id="H6EE1EB3246484B22C89F019258BDE3C"><enum>(2)</enum><text>by inserting after the item relating to section 5136 the following new item:</text> <quoted-block style="USC" id="H5E61B9874F4AF3582742208446A485E"> <toc regeneration="no-regeneration"> <toc-entry level="section">5136A. Financial subsidiaries of national banks</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="H87B1FA854B4F2616128307AD7FB811F"><enum>122.</enum><header>Misrepresentations regarding depository institution liability for obligations of affiliates</header> <subsection id="HB6549AC948B25F4A180F6F96ED12CBE"><enum>(a)</enum><header>In general</header><text>Chapter 47 of title 18, United States Code, is amended by inserting after section 1007 the following new section:</text> <quoted-block style="USC" id="H54BC6C9643DD727CC2D0CFA6AB0C9BB"> <section id="HB889BA044CEE755052D5AD983D6CF7D"><enum>1008.</enum><header>Misrepresentations regarding financial institution liability for obligations of affiliates</header> <subsection id="HD77BDC3248B4A6F91FF2019E71E0026"><enum>(a)</enum><header>In general</header><text>No institution-affiliated party of an insured depository institution or institution-affiliated party of a subsidiary or affiliate of an insured depository institution shall fraudulently represent that the institution is or will be liable for any obligation of a subsidiary or other affiliate of the institution.</text></subsection> <subsection id="HAEAE80CB40B863E3ED2BFA9193FB9D4"><enum>(b)</enum><header>Criminal penalty</header><text>Whoever violates subsection (a) shall be fined under this title, imprisoned for not more than 1 year, or both.</text></subsection> <subsection id="H7BC3F7724C52BE4981F164A0C18A2C5"><enum>(c)</enum><header>Institution-affiliated party defined</header><text>For purposes of this section, the term <term>institution-affiliated party</term> with respect to a subsidiary or affiliate has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, except that references to an insured depository institution shall be deemed to be references to a subsidiary or affiliate of an insured depository institution.</text></subsection> <subsection id="H13064113493C5993BA5D3DB2F8F648C"><enum>(d)</enum><header>Other definitions</header><text>For purposes of this section, the terms <term>affiliate</term>, <term>insured depository institution</term>, and <term>subsidiary</term> have same meanings as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H64D440294B175EEAFF185282D5C3DD5"><enum>(b)</enum><header>Clerical amendment</header><text>The table of sections for chapter 47 of title 18, United States Code, is amended by inserting after the item relating to section 1007 the following new item:</text> <quoted-block style="USC" id="HF780937F44B8A0516C1BF8BDF4AAA5F"> <toc regeneration="no-regeneration"> <toc-entry level="section">1008. Misrepresentations regarding financial institution liability for obligations of affiliates</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H06EC757D4823F938C940E69FD8800FA"><enum>123.</enum><header>Repeal of stock loan limit in <act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text display-inline="no-display-inline">Section 11 of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/248">12 U.S.C. 248</external-xref>) is amended by striking the paragraph designated as <quote>(m)</quote> and inserting <quote>(m) [Repealed]</quote>.</text></section></subtitle> <subtitle id="H5D027E4C4FF2CBA0C4CF4C9EBAD04FC"><enum>D</enum><header>Wholesale financial holding companies; wholesale financial institutions</header> <chapter id="H82589274495A2E142CA56DA6BD98D1D"><enum>1</enum><header>Wholesale financial holding companies</header> <section id="H8CD332554D7D597E8E5BDEADA2C22BF"><enum>131.</enum><header>Wholesale financial holding companies established</header> <subsection id="H6488CC494EB5926BEEC9F6A65CB9EEB"><enum>(a)</enum><header>Definition and supervision</header><text><external-xref legal-doc="act" parsable-cite="BHC65/10">Section 10</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841</external-xref> et seq.) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HE83ABFBF45F84AE4D2D300B2E0076C6"> <section id="HB1FAA5EB470299A8FF50548ABE00F2D"><enum>10.</enum><header>Wholesale financial holding companies</header> <subsection id="H776840644F0A3E6E36A1AC96D207C29"><enum>(a)</enum><header>Companies that control wholesale financial institutions</header> <paragraph id="H0588759348723E735E58CBB182AD4B2"><enum>(1)</enum><header>Wholesale financial holding company defined</header><text>The term <term>wholesale financial holding company</term> means any company that—</text> <subparagraph id="HEDEC26764FB1317A0912B889EA0223E"><enum>(A)</enum><text>is registered as a bank holding company;</text></subparagraph> <subparagraph id="H7B027B9046DD84954B826290D7429DB"><enum>(B)</enum><text>is predominantly engaged in financial activities as defined in section 6(f)(2);</text></subparagraph> <subparagraph id="H70824145429C407765BDB7B16FFB34B"><enum>(C)</enum><text>controls 1 or more wholesale financial institutions;</text></subparagraph> <subparagraph id="HC2ECF8A540DC8BF66DAC06AAD0E6B5D"><enum>(D)</enum><text>does not control—</text> <clause id="H3301F3134D9D5001682FC79150B7D46"><enum>(i)</enum><text>a bank other than a wholesale financial institution;</text></clause> <clause id="HF776737A4D1524964F16899E37B76BF"><enum>(ii)</enum><text>an insured bank other than an institution permitted under subparagraph (D), (F), or (G) of section 2(c)(2); or</text></clause> <clause id="H465935964F5169933FF4E88A3989E2D"><enum>(iii)</enum><text>a savings association; and</text></clause></subparagraph> <subparagraph id="H96B0B8624BD6F736A3920484EB233FF"><enum>(E)</enum><text>is not a foreign bank (as defined in section 1(b)(7) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>).</text></subparagraph></paragraph> <paragraph id="H647145C04AAC048E2260268AA8E441E"><enum>(2)</enum><header>Savings Association transition period</header><text>Notwithstanding paragraph (1)(D)(iii), the Board may permit a company that controls a savings association and that otherwise meets the requirements of paragraph (1) to become supervised under paragraph (1), if the company divests control of any such savings association within such period, not to exceed 5 years after becoming supervised under paragraph (1), as permitted by the Board.</text></paragraph></subsection> <subsection id="HE1EB0237442524856B1AFFA1A493AFA"><enum>(b)</enum><header>Supervision by the Board</header> <paragraph id="H9B37ED034549C6D944D5EE85D288089"><enum>(1)</enum><header>In general</header><text>The provisions of this section shall govern the reporting, examination, and capital requirements of wholesale financial holding companies.</text></paragraph> <paragraph id="H6885065243DB165A5B560B8440BB02B"><enum>(2)</enum><header>Reports</header> <subparagraph id="HC281051B4E72E920111F8E9F74FC400"><enum>(A)</enum><header>In general</header><text>The Board from time to time may require any wholesale financial holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to—</text> <clause id="HC2B08014433595EDCCA93B9F5FA21F3"><enum>(i)</enum><text>the company’s or subsidiary’s activities, financial condition, policies, systems for monitoring and controlling financial and operational risks, and transactions with depository institution subsidiaries of the holding company; and</text></clause> <clause id="H12DBA5094341BC88845463AACC75314"><enum>(ii)</enum><text>the extent to which the company or subsidiary has complied with the provisions of this Act and regulations prescribed and orders issued under this Act.</text></clause></subparagraph> <subparagraph id="H0EE21600468E1A93015617BC28C6AAE"><enum>(B)</enum><header>Use of existing reports</header> <clause id="H441784614E9B2B5376ED91A32056D46"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, accept reports in fulfillment of the Board’s reporting requirements under this paragraph that the wholesale financial holding company or any subsidiary of such company has provided or been required to provide to other Federal and State supervisors or to appropriate self-regulatory organizations.</text></clause> <clause id="H28882190418A3A8F24B134BCBEA5176"><enum>(ii)</enum><header>Availability</header><text>A wholesale financial holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).</text></clause></subparagraph> <subparagraph id="H171DDE43464E513B0905D6B87D1EA85"><enum>(C)</enum><header>Exemptions from reporting requirements</header> <clause id="H1A08D683465353EDC36C67A88554B9F"><enum>(i)</enum><header>In general</header><text>The Board may, by regulation or order, exempt any company or class of companies, under such terms and conditions and for such periods as the Board shall provide in such regulation or order, from the provisions of this paragraph and any regulation prescribed under this paragraph.</text></clause> <clause id="H4188F2414A1BA4A9261980A8BC32B79"><enum>(ii)</enum><header>Criteria for consideration</header><text>In making any determination under clause (i) with regard to any exemption under such clause, the Board shall consider, among such other factors as the Board may determine to be appropriate, the following factors:</text> <subclause id="H3B70BBF04318D1EF2FCDF89408F0576"><enum>(I)</enum><text>Whether information of the type required under this paragraph is available from a supervisory agency (as defined in section 1101(7) of the <act-name parsable-cite="RFPA78">Right to Financial Privacy Act of 1978</act-name>) or a foreign regulatory authority of a similar type.</text></subclause> <subclause id="HCDC9B5CD4E97006AF3E6B9B61122DAC"><enum>(II)</enum><text>The primary business of the company.</text></subclause> <subclause id="H074DD9A94F2C1FDCF24DE2B1FF00E7B"><enum>(III)</enum><text>The nature and extent of the domestic and foreign regulation of the activities of the company.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HE46C0576496D5433C68279B75817AFA"><enum>(3)</enum><header>Examinations</header> <subparagraph id="H23D01F5D4F5D08F848F22BAEAD75D68"><enum>(A)</enum><header>Limited use of examination authority</header><text>The Board may make examinations of each wholesale financial holding company and each subsidiary of such company in order to—</text> <clause id="H8F38AF454C0FC68EABCFC787C5178AB"><enum>(i)</enum><text>inform the Board regarding the nature of the operations and financial condition of the wholesale financial holding company and its subsidiaries;</text></clause> <clause id="H373625204D8BA0EF2B9465AD10D4C1D"><enum>(ii)</enum><text>inform the Board regarding—</text> <subclause id="H957B091E4DED82BF915A528027DBE5D"><enum>(I)</enum><text>the financial and operational risks within the wholesale financial holding company system that may affect any depository institution owned by such holding company; and</text></subclause> <subclause id="HD7A9F1114F606E8D4DDE2AB942F3F64"><enum>(II)</enum><text>the systems of the holding company and its subsidiaries for monitoring and controlling those risks; and</text></subclause></clause> <clause id="H45B8C4924417D30285D23AB746A6288"><enum>(iii)</enum><text>monitor compliance with the provisions of this Act and those governing transactions and relationships between any depository institution controlled by the wholesale financial holding company and any of the company’s other subsidiaries.</text></clause></subparagraph> <subparagraph id="H17C00E5844B36F21F3D353A7A7C6CF7"><enum>(B)</enum><header>Restricted focus of examinations</header><text>The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a wholesale financial holding company under this paragraph to—</text> <clause id="H159F5CAC49FBAC76BC4C338DB2BD00A"><enum>(i)</enum><text>the holding company; and</text></clause> <clause id="H54F8B08A424E6039714A2B806243E5C"><enum>(ii)</enum><text>any subsidiary (other than an insured depository institution subsidiary) of the holding company that, because of the size, condition, or activities of the subsidiary, the nature or size of transactions between such subsidiary and any affiliated depository institution, or the centralization of functions within the holding company system, could have a materially adverse effect on the safety and soundness of any depository institution affiliate of the holding company.</text></clause></subparagraph> <subparagraph id="HEA7BEDA84433490AA7F9139B104E5DC"><enum>(C)</enum><header>Deference to bank examinations</header><text>The Board shall, to the fullest extent possible, use the reports of examination of depository institutions made by the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision or the appropriate State depository institution supervisory authority for the purposes of this section.</text></subparagraph> <subparagraph id="H6E9CEF4844B1FBB8A2DD9B9F5266E3E"><enum>(D)</enum><header>Deference to other examinations</header><text>The Board shall, to the fullest extent possible, address the circumstances which might otherwise permit or require an examination by the Board by forgoing an examination and by instead reviewing the reports of examination made of—</text> <clause id="HBD79A54343817198FD085191DB25F2E"><enum>(i)</enum><text>any registered broker or dealer or any registered investment adviser by or on behalf of the Commission; and</text></clause> <clause id="H0D462AF4447FEE1824F83AB89F84C81"><enum>(ii)</enum><text>any licensed insurance company by or on behalf of any State government insurance agency responsible for the supervision of the insurance company.</text></clause></subparagraph> <subparagraph id="H5EC7D71B498E34B0E7DD059CC8807FC"><enum>(E)</enum><header>Confidentiality of reported information</header> <clause id="H3DEB99214EDC91593AAF139745CD924"><enum>(i)</enum><header>In general</header><text>Notwithstanding any other provision of law, the Board shall not be compelled to disclose any nonpublic information required to be reported under this paragraph, or any information supplied to the Board by any domestic or foreign regulatory agency, that relates to the financial or operational condition of any wholesale financial holding company or any subsidiary of such company.</text></clause> <clause id="HE88A2D194C3893F7DD229299CED4C18"><enum>(ii)</enum><header>Compliance with requests for information</header><text>No provision of this subparagraph shall be construed as authorizing the Board to withhold information from the Congress, or preventing the Board from complying with a request for information from any other Federal department or agency for purposes within the scope of such department’s or agency’s jurisdiction, or from complying with any order of a court of competent jurisdiction in an action brought by the United States or the Board.</text></clause> <clause id="H788C3741489A185B54BB41ABAAB3C66"><enum>(iii)</enum><header>Coordination with other law</header><text>For purposes of section 552 of title 5, United States Code, this subparagraph shall be considered to be a statute described in subsection (b)(3)(B) of such section.</text></clause> <clause id="HAD93BF644CCDD48110E2358BC074146"><enum>(iv)</enum><header>Designation of confidential information</header><text>In prescribing regulations to carry out the requirements of this subsection, the Board shall designate information described in or obtained pursuant to this paragraph as confidential information.</text></clause></subparagraph> <subparagraph id="H3786CCC2458C1587D76412A75EA2AB7"><enum>(F)</enum><header>Costs</header><text>The cost of any examination conducted by the Board under this section may be assessed against, and made payable by, the wholesale financial holding company.</text></subparagraph></paragraph> <paragraph id="H9C84673D4A66B9D65BB558BF17D6D7F"><enum>(4)</enum><header>Capital adequacy guidelines</header> <subparagraph id="HC6A925224F61B2BF1693D6A404C4C62"><enum>(A)</enum><header>Capital adequacy provisions</header><text>Subject to the requirements of, and solely in accordance with, the terms of this paragraph, the Board may adopt capital adequacy rules or guidelines for wholesale financial holding companies.</text></subparagraph> <subparagraph id="H7154F5FF42C03A6BC28516AEE7F99AB"><enum>(B)</enum><header>Method of calculation</header><text>In developing rules or guidelines under this paragraph, the following provisions shall apply:</text> <clause id="H1653065844E016A3AE3F7693D8C9175"><enum>(i)</enum><header>Focus on double leverage</header><text>The Board shall focus on the use by wholesale financial holding companies of debt and other liabilities to fund capital investments in subsidiaries.</text></clause> <clause id="H50D76A364F30294E4F833CBE4BEA4DB"><enum>(ii)</enum><header>No unweighted capital ratio</header><text>The Board shall not, by regulation, guideline, order, or otherwise, impose under this section a capital ratio that is not based on appropriate risk-weighting considerations.</text></clause> <clause id="H59CDDD7A4FA3DC339D9CA694B3BB357"><enum>(iii)</enum><header>No capital requirement on regulated entities</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, standards, guidelines, or requirements upon any subsidiary that—</text> <subclause id="H899CB8EF48E20367C320A0B287DD476"><enum>(I)</enum><text>is not a depository institution; and</text></subclause> <subclause id="H7F8F220A49F99FEB0888C58BEBEF125"><enum>(II)</enum><text>is in compliance with applicable capital requirements of another Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority.</text></subclause></clause> <clause id="HE7154FF8417F138F83DA419BD4200B3"><enum>(iv)</enum><header>Certain subsidiaries</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, standards, guidelines, or requirements upon any subsidiary that is not a depository institution and that is registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>, except that this clause shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to activities of a registered investment adviser other than investment advisory activities or activities incidental to investment advisory activities.</text></clause> <clause id="H6CB68FE04A235D3FEE7A77A4C8F2631"><enum>(v)</enum><header>Limitations on indirect action</header><text>In developing, establishing, or assessing holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board shall not take into account the activities, operations, or investments of an affiliated investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>, if the investment company is not—</text> <subclause id="HA136ACC9460AA11CA9684CBA1B52E5B"><enum>(I)</enum><text>a bank holding company; or</text></subclause> <subclause id="H546E37B44187B6A256A7E2BC97E2DFE"><enum>(II)</enum><text>controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, where the shares owned by the bank holding company have a market value equal to more than $1,000,000.</text></subclause></clause> <clause id="H4FD7DA224A1D5981B0C95F93DCBDB83"><enum>(vi)</enum><header>Appropriate exclusions</header><text>The Board shall take full account of—</text> <subclause id="HA6E1B32E4B2DD4D4422068AD6DD274C"><enum>(I)</enum><text>the capital requirements made applicable to any subsidiary that is not a depository institution by another Federal regulatory authority or State insurance authority; and</text></subclause> <subclause id="H59735CEE4A283EC4FE4E3291B27FCE1"><enum>(II)</enum><text>industry norms for capitalization of a company’s unregulated subsidiaries and activities.</text></subclause></clause> <clause id="H16674A2942B636AF7AE65D9A43ED27A"><enum>(vii)</enum><header>Internal risk management models</header><text>The Board may incorporate internal risk management models of wholesale financial holding companies into its capital adequacy guidelines or rules and may take account of the extent to which resources of a subsidiary depository institution may be used to service the debt or other liabilities of the wholesale financial holding company.</text></clause></subparagraph></paragraph></subsection> <subsection id="H40F96AFE4312F68396B16392E2C879D"><enum>(c)</enum><header>Nonfinancial activities and investments</header> <paragraph id="HE78FE8D944A7C67A5C2DB591A5BEAAB"><enum>(1)</enum><header>Grandfathered activities</header> <subparagraph id="HA85DE1D04C465947F5D5368570EEB47"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a company that becomes a wholesale financial holding company may continue to engage, directly or indirectly, in any activity and may retain ownership and control of shares of a company engaged in any activity if—</text> <clause id="H5C609B12427782C3C95674B27FDF0BF"><enum>(i)</enum><text>on the date of the enactment of the &short-title1;, such wholesale financial holding company was lawfully engaged in that nonfinancial activity, held the shares of such company, or had entered into a contract to acquire shares of any company engaged in such activity; and</text></clause> <clause id="HAF798DEF4F18DBCF2D4C22AEB1B7E2E"><enum>(ii)</enum><text>the company engaged in such activity continues to engage only in the same activities that such company conducted on the date of the enactment of the &short-title1;, and other activities permissible under this Act.</text></clause></subparagraph> <subparagraph id="HCE4AEE69424DB2C601B71FA351F0083"><enum>(B)</enum><header>No expansion of grandfathered commercial activities through merger or consolidation</header><text>A wholesale financial holding company that engages in activities or holds shares pursuant to this paragraph, or a subsidiary of such wholesale financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company which is engaged in any activity which the Board has not determined to be financial in nature or incidental to activities that are financial in nature under section 6(c).</text></subparagraph> <subparagraph id="HBB68D8D04B1E338CB5F309A49869F37"><enum>(C)</enum><header>Limitation to single exemption</header><text>No company that engages in any activity or controls any shares under subsection (f) of section 6 may engage in any activity or own any shares pursuant to this paragraph.</text></subparagraph></paragraph> <paragraph id="H3007B43B48F6AE64326149AA98D5D3F"><enum>(2)</enum><header>Commodities</header> <subparagraph id="H8A89C0DD4243F47D50E93999E1BEDA9"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a wholesale financial holding company which was predominately engaged as of January 1, 1997, in financial activities in the United States (or any successor to any such company) may engage in, or directly or indirectly own or control shares of a company engaged in, activities related to the trading, sale, or investment in commodities and underlying physical properties that were not permissible for bank holding companies to conduct in the United States as of January 1, 1997, if such wholesale financial holding company, or any subsidiary of such holding company, was engaged directly, indirectly, or through any such company in any of such activities as of January 1, 1997, in the United States.</text></subparagraph> <subparagraph id="H799DD04442270F5C757FE180EA24D06"><enum>(B)</enum><header>Limitation</header><text>The attributed aggregate consolidated assets of a wholesale financial holding company held under the authority granted under this paragraph and not otherwise permitted to be held by all wholesale financial holding companies under this section may not exceed 5 percent of the total consolidated assets of the wholesale financial holding company, except that the Board may increase such percentage of total consolidated assets by such amounts and under such circumstances as the Board considers appropriate, consistent with the purposes of this Act.</text></subparagraph></paragraph> <paragraph id="H805DB8104A081736FEE706A66FB3CC0"><enum>(3)</enum><header>Cross marketing restrictions</header><text>A wholesale financial holding company shall not permit—</text> <subparagraph id="H1501D7554D7D4809DFF96886E2B1EF1"><enum>(A)</enum><text>any company whose shares it owns or controls pursuant to paragraph (1) or (2) to offer or market any product or service of an affiliated wholesale financial institution; or</text></subparagraph> <subparagraph id="H42824F3A41301E0B67DAD3BA43C2B8E"><enum>(B)</enum><text>any affiliated wholesale financial institution to offer or market any product or service of any company whose shares are owned or controlled by such wholesale financial holding company pursuant to such paragraphs.</text></subparagraph></paragraph></subsection> <subsection id="H88A2924E4B61E2C944057AA8F578742"><enum>(d)</enum><header>Qualification of foreign bank as wholesale financial holding company</header> <paragraph id="H5489FA504488C931703CDCB4A2E9F20"><enum>(1)</enum><header>In general</header><text>Any foreign bank, or any company that owns or controls a foreign bank, that operates a branch, agency, or commercial lending company in the United States, including a foreign bank or company that owns or controls a wholesale financial institution, may request a determination from the Board that such bank or company be treated as a wholesale financial holding company (other than for purposes of subsection (c)), subject to such conditions as the Board deems appropriate, giving due regard to the principle of national treatment and equality of competitive opportunity and the requirements imposed on domestic banks and companies.</text></paragraph> <paragraph id="H93F0AE7545970F9675CB7A81CA2BD8F"><enum>(2)</enum><header>Conditions for treatment as a wholesale financial holding company</header><text>A foreign bank and a company that owns or controls a foreign bank may not be treated as a wholesale financial holding company unless the bank and company meet and continue to meet the following criteria:</text> <subparagraph id="HEC6559664DBC90017C335F8A39E4866"><enum>(A)</enum><header>No insured deposits</header><text>No deposits held directly by a foreign bank or through an affiliate (other than an institution described in subparagraph (D) or (F) of section 2(c)(2)) are insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subparagraph> <subparagraph id="H75148CA147EF8BEDB9CB37A5893635D"><enum>(B)</enum><header>Capital standards</header><text>The foreign bank meets risk-based capital standards comparable to the capital standards required for a wholesale financial institution, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></subparagraph> <subparagraph id="H576734C049D91D77191E1F9E94B96CD"><enum>(C)</enum><header>Transaction with affiliates</header><text>Transactions between a branch, agency, or commercial lending company subsidiary of the foreign bank in the United States, and any securities affiliate or company in which the foreign bank (or any company that owns or controls such foreign bank), has invested and which engages in any activity authorized only as a result of the application of subsection (c) or (g) of section 6, comply with the provisions of sections 23A and 23B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> in the same manner and to the same extent as such transactions would be required to comply with such sections if the foreign bank were a member bank.</text></subparagraph></paragraph> <paragraph id="H65C18D844A4E5F589A2E39A1F2F2E76"><enum>(3)</enum><header>Treatment as a wholesale financial institution</header><text>Any foreign bank which is, or is affiliated with a company which is, treated as a wholesale financial holding company under this subsection shall be treated as a wholesale financial institution for purposes of paragraphs (1)(C) and (3) of section 9B(c) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, and any such foreign bank or company shall be subject to paragraphs (3), (4), and (5) of section 9B(d) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, except that the Board may adopt such modifications, conditions, or exemptions as the Board deems appropriate, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></paragraph> <paragraph id="HC049C30E492CE3B0D1BD2E92C9C3965"><enum>(4)</enum><header>Supervision of foreign bank which maintains no banking presence other than control of a wholesale financial institution</header><text>A foreign bank that owns or controls a wholesale financial institution but does not operate a branch, agency, or commercial lending company in the United States (and any company that owns or controls such foreign bank) may request a determination from the Board that such bank or company be treated as a wholesale financial holding company, except that such bank or company shall be subject to the restrictions of paragraphs (2)(A) and (3) of this subsection.</text></paragraph> <paragraph id="HFAE1BA0C435F1B22D55311A1D6FDF08"><enum>(5)</enum><header>No effect on other provisions</header><text>This section shall not be construed as limiting the authority of the Board under the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> with respect to the regulation, supervision, or examination of foreign banks and their offices and affiliates in the United States.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HD44C7B844454383525DAA08C804240C"><enum>(b)</enum><header>Uninsured State banks</header><text><external-xref legal-doc="act" parsable-cite="FRA/9">Section 9</external-xref> of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/321">12 U.S.C. 321</external-xref> et seq.) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="Federal Reserve Act" id="HF68A143540DCEBB1742C53A82BACABE"> <paragraph id="H783E8DB145C245D36F611E9CE430F8F"><enum>(24)</enum><header>Enforcement authority over uninsured State member banks</header><text>Section 3(u) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, subsections (j) and (k) of section 7 of such Act, and subsections (b) through (n), (s), (u), and (v) of section 8 of such Act shall apply to an uninsured State member bank in the same manner and to the same extent such provisions apply to an insured State member bank and any reference in any such provision to <quote>insured depository institution</quote> shall be deemed to be a reference to <quote>uninsured State member bank</quote> for purposes of this paragraph.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H58676B4A4AFAFE87455956B9EA4283F"><enum>132.</enum><header>Authorization to release reports</header> <subsection id="H23EF963A41D4170C73BDA780F4A8B18"><enum>(a)</enum><header><act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text>The last sentence of the eighth undesignated paragraph of <external-xref legal-doc="act" parsable-cite="FRA/9">section 9</external-xref> of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/326">12 U.S.C. 326</external-xref>) is amended to read as follows: <quote>The Board of Governors of the Federal Reserve System, at its discretion, may furnish reports of examination or other confidential supervisory information concerning State member banks or any other entities examined under any other authority of the Board to any Federal or State authorities with supervisory or regulatory authority over the examined entity, to officers, directors, or receivers of the examined entity, and to any other person that the Board determines to be proper.</quote>.</text></subsection> <subsection id="H2AF839A74550784A11688DBA989F77E"><enum>(b)</enum><header>Commodity Futures Trading Commission</header><text>The <act-name parsable-cite="RFPA78">Right to Financial Privacy Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3401">12 U.S.C. 3401</external-xref> et seq.) is amended—</text> <paragraph id="H78DE5379402C3CA940997F9737A8339"><enum>(1)</enum><text>in section 1101(7) (<external-xref legal-doc="usc" parsable-cite="usc/12/3401(7)">12 U.S.C. 3401(7)</external-xref>)—</text> <subparagraph id="H5009F0014CC8D82565B1D4B5C3E6468"><enum>(A)</enum><text>by redesignating subparagraphs (G) and (H) as subparagraphs (H) and (I), respectively; and</text></subparagraph> <subparagraph id="H25CDBF994C585E093E871F9BE9ED101"><enum>(B)</enum><text>by inserting after subparagraph (F) the following new subparagraph:</text> <quoted-block id="HEF99ED3641F1526FDB6DE28A7D35CDA"> <subparagraph id="HFE192EF0427064FDF6B3FEAECCCD51C"><enum>(G)</enum><text>the Commodity Futures Trading Commission; or</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HA9774E1844AE43C54D3253B930E329F"><enum>(2)</enum><text>in section 1112(e) (<external-xref legal-doc="usc" parsable-cite="usc/12/3412(e)">12 U.S.C. 3412(e)</external-xref>), by striking <quote>and the Securities and Exchange Commission</quote> and inserting <quote>, the Securities and Exchange Commission, and the Commodity Futures Trading Commission</quote>.</text></paragraph></subsection></section> <section id="H0829F3B6408FD132124F2EB65DC1289"><enum>133.</enum><header>Conforming amendments</header> <subsection id="H900F084B4651BEBA40024B8536B812F"><enum>(a)</enum><header><act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name></header> <paragraph id="H15C01C294C6453E0332B12BA58A2E52"><enum>(1)</enum><header>Definitions</header><text><external-xref legal-doc="act" parsable-cite="BHC65/2">Section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1842">12 U.S.C. 1842</external-xref>) is amended by adding at the end the following new subsections:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H07F4EC2A44A78C339354CD90D4B2824"> <subsection id="HBC89E2C44377B56634D9AE903DB698F"><enum>(p)</enum><header>Wholesale financial institution</header><text>The term <term>wholesale financial institution</term> means a wholesale financial institution subject to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></subsection> <subsection id="H5017C1B246B16AB75516ABB3D7A6D00"><enum>(q)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text></subsection> <subsection id="H4FBA3580459889A6B0DAB18208D1F8E"><enum>(r)</enum><header>Depository institution</header><text>The term <term>depository institution</term>—</text> <paragraph id="HAF8CA20F467E8881E1383B9B9D00C63"><enum>(1)</enum><text>has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; and</text></paragraph> <paragraph id="H8555598547EC127D548DACAAB379B9F"><enum>(2)</enum><text>includes a wholesale financial institution.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HA6DBD6434139ED8E634C3FBE2D0342C"><enum>(2)</enum><header>Definition of bank includes wholesale financial institution</header><text>Section 2(c)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841(c)(1)">12 U.S.C. 1841(c)(1)</external-xref>) is amended by adding at the end the following new subparagraph:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H8E6E561E4D5D7F0644D3539FB397253"> <subparagraph id="H596696E845BF2E7D9893B98AF4D4BFD"><enum>(C)</enum><text>A wholesale financial institution.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HF795B2B943207AD3FC9CE6BF1860FBE"><enum>(3)</enum><header>Incorporated definitions</header><text>Section 2(n) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841(n)">12 U.S.C. 1841(n)</external-xref>) is amended by inserting <quote><quote>insured bank</quote>,</quote> after <quote><quote>in danger of default</quote>,</quote>.</text></paragraph> <paragraph id="H0AF960CC4676EE43B4A5E5A9B62701F"><enum>(4)</enum><header>Exception to deposit insurance requirement</header><text>Section 3(e) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1842(e)">12 U.S.C. 1842(e)</external-xref>) is amended by adding at the end the following: <quote>This subsection shall not apply to a wholesale financial institution.</quote>.</text></paragraph></subsection> <subsection id="HA3E8351B45C04672DA17F894E7FE10B"><enum>(b)</enum><header><act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name></header><text>Section 3(q)(2)(A) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1813(q)(2)(A)">12 U.S.C. 1813(q)(2)(A)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="HE9E193C84981432D8E1FBCA7AA75DEC"> <subparagraph id="H2E4D44734C174A6F550D97AD21F0A4A"><enum>(A)</enum><text>any State member insured bank (except a District bank) and any wholesale financial institution as authorized pursuant to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>;</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section></chapter> <chapter id="H446CD588422CA91643EF49B126132DA"><enum>2</enum><header>Wholesale financial institutions</header> <section id="H0807929E47C73636044D358CDA23B9F"><enum>136.</enum><header>Wholesale financial institutions</header> <subsection id="H4B60C6184EB225B9BD2C7089EA4FD27"><enum>(a)</enum><header>National wholesale financial institutions</header> <paragraph id="HB4B9F6FB4CA5020C86B8F08BA282C9F"><enum>(1)</enum><header>In general</header><text>Chapter one of title LXII of the Revised Statutes of the United States (<external-xref legal-doc="usc" parsable-cite="usc/12/21">12 U.S.C. 21</external-xref> et seq.) is amended by inserting after section 5136A (as added by section 121(a) of this title) the following new section:</text> <quoted-block id="H1226747042D95334C2797A9EB99333C"> <section id="H25F12E734346542B623952B6D8D0500"><enum>5136B.</enum><header>National wholesale financial institutions</header> <subsection id="H6B46B6F744DA1031D9EB178889D6422"><enum>(a)</enum><header>Authorization of the Comptroller required</header><text>A national bank may apply to the Comptroller on such forms and in accordance with such regulations as the Comptroller may prescribe, for permission to operate as a national wholesale financial institution.</text></subsection> <subsection id="H083E0B2345D776243869B48743DCB01"><enum>(b)</enum><header>Regulation</header><text>A national wholesale financial institution may exercise, in accordance with such institution’s articles of incorporation and regulations issued by the Comptroller, all the powers and privileges of a national bank formed in accordance with section 5133 of the Revised Statutes of the United States, subject to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> and the limitations and restrictions contained therein.</text></subsection> <subsection id="HCC449E3D4E9BB64397BA58AEAE8D101"><enum>(c)</enum><header><act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name></header><text>A national wholesale financial institution shall be subject to the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HA3415FB64511AE897AF73E9319E4F1B"><enum>(2)</enum><header>Clerical amendment</header><text>The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended by inserting after the item relating to section 5136A (as added by section 121(d) of this title) the following new item:</text> <quoted-block style="USC" id="H0619A734442EEEC373C44295E6E5D12"> <toc regeneration="no-regeneration"> <toc-entry level="section">5136B. National wholesale financial institutions</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H8F9AAABD47D42E6BB0FDB6B358DFB6B"><enum>(b)</enum><header>State wholesale financial institutions</header><text>The <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/221">12 U.S.C. 221</external-xref> et seq.) is amended by inserting after section 9A the following new section:</text> <quoted-block act-name="Federal Reserve Act" id="HEB7F037A4EC7DB74E4787BAD3D3D9FB"> <section id="HDF6647CF466E3C24E5EEE69DF5830B9"><enum>9B.</enum><header>Wholesale financial institutions</header> <subsection id="H73A3506C4D95A2139AA425B952ADBD6"><enum>(a)</enum><header>Application for membership as wholesale financial institution</header> <paragraph id="H80D87F724E50517D73431396A76FEDB"><enum>(1)</enum><header>Application required</header> <subparagraph id="H404BB6824E5F250BAA1415A2B5C4E43"><enum>(A)</enum><header>In general</header><text>Any bank may apply to the Board of Governors of the Federal Reserve System to become a wholesale financial institution and, as a wholesale financial institution, to subscribe to the stock of the Federal reserve bank organized within the district where the applying bank is located.</text></subparagraph> <subparagraph id="H51816BEC4FA96DC4205605A0A5F2714"><enum>(B)</enum><header>Treatment as member bank</header><text>Any application under subparagraph (A) shall be treated as an application under, and shall be subject to the provisions of, section 9.</text></subparagraph></paragraph> <paragraph id="H0BD7173741B3861A3BD55FB700A80F2"><enum>(2)</enum><header>Insurance termination</header><text>No bank the deposits of which are insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> may become a wholesale financial institution unless it has met all requirements under that Act for voluntary termination of deposit insurance.</text></paragraph></subsection> <subsection id="H50B0DA52477AB9A237166E91F2D00ED"><enum>(b)</enum><header>General requirements applicable to wholesale financial institutions</header> <paragraph id="H911C9711407049E7B9B99BAC83D7C11"><enum>(1)</enum><header><act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text>Except as otherwise provided in this section, wholesale financial institutions shall be member banks and shall be subject to the provisions of this Act that apply to member banks to the same extent and in the same manner as State member insured banks, except that a wholesale financial institution may terminate membership under this Act only with the prior written approval of the Board and on terms and conditions that the Board determines are appropriate to carry out the purposes of this Act.</text></paragraph> <paragraph id="H75A801DE4B5B459A6B0EE5B8CD8C7D1"><enum>(2)</enum><header>Prompt corrective action</header><text>A wholesale financial institution shall be deemed to be an insured depository institution for purposes of section 38 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> except that—</text> <subparagraph id="HD63F228E43450F098128F29661F2E46"><enum>(A)</enum><text>the relevant capital levels and capital measures for each capital category shall be the levels specified by the Board for wholesale financial institutions; and</text></subparagraph> <subparagraph id="HD25D294D49622FC920BA48BBBF9300B"><enum>(B)</enum><text>all references to the appropriate Federal banking agency or to the Corporation in that section shall be deemed to be references to the Board.</text></subparagraph></paragraph> <paragraph id="HF08FD5784C7762F6FA4245942C05F10"><enum>(3)</enum><header>Enforcement authority</header><text>Subsections (j) and (k) of section 7, subsections (b) through (n), (s), and (v) of section 8, and section 19 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> shall apply to a wholesale financial institution in the same manner and to the same extent as such provisions apply to State member insured banks and any reference in such sections to an insured depository institution shall be deemed to include a reference to a wholesale financial institution.</text></paragraph> <paragraph id="HC37063254249EB32945DCD93CF8EAAC"><enum>(4)</enum><header>Certain other statutes applicable</header><text>A wholesale financial institution shall be deemed to be a banking institution, and the Board shall be the appropriate Federal banking agency for such bank and all such bank’s affiliates, for purposes of the <act-name parsable-cite="ILSA">International Lending Supervision Act</act-name>.</text></paragraph> <paragraph id="HE153B1EA473B4C6D631889A5E5ABF80"><enum>(5)</enum><header>Bank merger Act</header><text>A wholesale financial institution shall be subject to sections 18(c) and 44 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> in the same manner and to the same extent the wholesale financial institution would be subject to such sections if the institution were a State member insured bank.</text></paragraph> <paragraph id="H7A27C4944A20E9B2AB3E9FABB7FCF95"><enum>(6)</enum><header>Branching</header><text>Notwithstanding any other provision of law, a wholesale financial institution may establish and operate a branch at any location on such terms and conditions as established by the Board and, in the case of a State-chartered wholesale financial institution, with the approval of the Board, and, in the case of a national bank wholesale financial institution, with the approval of the Comptroller of the Currency.</text></paragraph> <paragraph id="HBD9CC64E4287F8ECAC5496BD1099C8E"><enum>(7)</enum><header>Activities of out-of-state branches of wholesale financial institutions</header> <subparagraph id="HBDA293984C81C95D8CC30E88E8574D8"><enum>(A)</enum><header>General</header><text>A State-chartered wholesale financial institution shall be deemed to be a State bank and an insured State bank for purposes of paragraphs (1), (2), and (3) of section 24(j) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, and a national wholesale financial institution shall be deemed to be a national bank for purposes of section 5155(f) of the Revised Statutes of the United States.</text></subparagraph> <subparagraph id="HBB3735D84CADB188516506A1E99BCB3"><enum>(B)</enum><header>Definitions</header><text>The following definitions shall apply solely for purposes of applying paragraph (1):</text> <clause id="H85CEB8024C542603CD566F99A11D612"><enum>(i)</enum><header>Home State</header><text>The term <term>home State</term> means—</text> <subclause id="HCA72EC7E4149BCFA37AA6EB6008583A"><enum>(I)</enum><text>with respect to a national wholesale financial institution, the State in which the main office of the institution is located; and</text></subclause> <subclause id="H6A4B43B743BCA7ABE6B7F4AFCC288D0"><enum>(II)</enum><text>with respect to a State-chartered wholesale financial institution, the State by which the institution is chartered.</text></subclause></clause> <clause id="HDA23873745D38E888452A28402BB2F1"><enum>(ii)</enum><header>Host State</header><text>The term <term>host State</term> means a State, other than the home State of the wholesale financial institution, in which the institution maintains, or seeks to establish and maintain, a branch.</text></clause> <clause id="H83DFAC594511A06A08BABF8E70FAA69"><enum>(iii)</enum><header>Out-of-state bank</header><text>The term <term>out-of-State bank</term> means, with respect to any State, a wholesale financial institution whose home State is another State.</text></clause></subparagraph></paragraph> <paragraph id="H3B38C03948421D172973419934FEF2B"><enum>(8)</enum><header>Discrimination regarding interest rates</header><text>Section 27 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> shall apply to State-chartered wholesale financial institutions in the same manner and to the same extent as such provisions apply to State member insured banks and any reference in such section to a State-chartered insured depository institution shall be deemed to include a reference to a State-chartered wholesale financial institution.</text></paragraph> <paragraph id="HFBE451A942B98D3403661AA593EFEB6"><enum>(9)</enum><header>Preemption of State laws requiring deposit insurance for wholesale financial institutions</header><text>The appropriate State banking authority may grant a charter to a wholesale financial institution notwithstanding any State constitution or statute requiring that the institution obtain insurance of its deposits and any such State constitution or statute is hereby preempted solely for purposes of this paragraph.</text></paragraph> <paragraph id="H38A9856940B6BC5E99F7ED838E30EAD"><enum>(10)</enum><header>Parity for wholesale financial institutions</header><text>A State bank that is a wholesale financial institution under this section shall have all of the rights, powers, privileges, and immunities (including those derived from status as a federally chartered institution) of and as if it were a national bank, subject to such terms and conditions as established by the Board.</text></paragraph> <paragraph id="H7444667F475BA567D7B2B599A709D3E"><enum>(11)</enum><header><act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name></header><text>A State wholesale financial institution shall be subject to the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></paragraph></subsection> <subsection id="H46E4358E44452EFCE3E65D8436C8EDC"><enum>(c)</enum><header>Specific requirements applicable to wholesale financial institutions</header> <paragraph id="H3CEF86BE4CC6368F921CF3A57EC208E"><enum>(1)</enum><header>Limitations on deposits</header> <subparagraph id="H14FA819D406489681A03DF8DB0CDBD8"><enum>(A)</enum><header>Minimum amount</header> <clause id="H6DE133404EE852B37909E3BAF8B7200"><enum>(i)</enum><header>In general</header><text>No wholesale financial institution may receive initial deposits of $100,000 or less, other than on an incidental and occasional basis.</text></clause> <clause id="H167134CA4AD19F675FF80B91E7EFEFF"><enum>(ii)</enum><header>Limitation on deposits of less than $100,000</header><text>No wholesale financial institution may receive initial deposits of $100,000 or less if such deposits constitute more than 5 percent of the institution’s total deposits.</text></clause></subparagraph> <subparagraph id="H45B469BE416F2C9AF1C933BDECCB597"><enum>(B)</enum><header>No deposit insurance</header><text>Except as otherwise provided in section 8A(f) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, no deposits held by a wholesale financial institution shall be insured deposits under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subparagraph> <subparagraph id="H24F3FF68433F2597F82D9EA4C7D8D81"><enum>(C)</enum><header>Advertising and disclosure</header><text>The Board shall prescribe regulations pertaining to advertising and disclosure by wholesale financial institutions to ensure that each depositor is notified that deposits at the wholesale financial institution are not federally insured or otherwise guaranteed by the United States Government.</text></subparagraph></paragraph> <paragraph id="H45FF8105422DAFBDECFA54B3A31D1CF"><enum>(2)</enum><header>Minimum capital levels applicable to wholesale financial institutions</header><text>The Board shall, by regulation, adopt capital requirements for wholesale financial institutions—</text> <subparagraph id="HE2E0DAB4417F2429EE1E76A9E809851"><enum>(A)</enum><text>to account for the status of wholesale financial institutions as institutions that accept deposits that are not insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; and</text></subparagraph> <subparagraph id="HF4C5BBAE4F50194AFB42EABA8EE6195"><enum>(B)</enum><text>to provide for the safe and sound operation of the wholesale financial institution without undue risk to creditors or other persons, including Federal reserve banks, engaged in transactions with the bank.</text></subparagraph></paragraph> <paragraph id="H0582D97B4D9360E432772283EA9A6A9"><enum>(3)</enum><header>Additional requirements applicable to wholesale financial institutions</header><text>In addition to any requirement otherwise applicable to State member insured banks or applicable, under this section, to wholesale financial institutions, the Board may impose, by regulation or order, upon wholesale financial institutions—</text> <subparagraph id="H75136E80450E67B687F9378CDA31E13"><enum>(A)</enum><text>limitations on transactions, direct or indirect, with affiliates to prevent—</text> <clause id="H846C88F74A3AA7F7487A87B6C1D31A6"><enum>(i)</enum><text>the transfer of risk to the deposit insurance funds; or</text></clause> <clause id="HC9C431064596F4B57466B080D718C53"><enum>(ii)</enum><text>an affiliate from gaining access to, or the benefits of, credit from a Federal reserve bank, including overdrafts at a Federal reserve bank;</text></clause></subparagraph> <subparagraph id="HC3DC7ACB43319A561A13079BD08E7C3"><enum>(B)</enum><text>special clearing balance requirements; and</text></subparagraph> <subparagraph id="H3902DB044CEED97AD2208BB4A334B6B"><enum>(C)</enum><text>any additional requirements that the Board determines to be appropriate or necessary to—</text> <clause id="H554F2FC54D14771711C3859FD46E2D8"><enum>(i)</enum><text>promote the safety and soundness of the wholesale financial institution or any insured depository institution affiliate of the wholesale financial institution;</text></clause> <clause id="HDDFB688247353DEBDBA5688A1DB555D"><enum>(ii)</enum><text>prevent the transfer of risk to the deposit insurance funds; or</text></clause> <clause id="H85889C6B47B80562337A6594B8B32EC"><enum>(iii)</enum><text>protect creditors and other persons, including Federal reserve banks, engaged in transactions with the wholesale financial institution.</text></clause></subparagraph></paragraph> <paragraph id="HF1D7F9E94FF093BFF49EB5BAE297DA8"><enum>(4)</enum><header>Exemptions for wholesale financial institutions</header><text>The Board may, by regulation or order, exempt any wholesale financial institution from any provision applicable to a member bank that is not a wholesale financial institution, if the Board finds that such exemption is not inconsistent with—</text> <subparagraph id="H230977E44F0D8BE353785988A78DE34"><enum>(A)</enum><text>the promotion of the safety and soundness of the wholesale financial institution or any insured depository institution affiliate of the wholesale financial institution;</text></subparagraph> <subparagraph id="H3A706A71412A04C364DA63B597CCA11"><enum>(B)</enum><text>the protection of the deposit insurance funds; and</text></subparagraph> <subparagraph id="H63D89A24412610509558119FBF4CD1E"><enum>(C)</enum><text>the protection of creditors and other persons, including Federal reserve banks, engaged in transactions with the wholesale financial institution.</text></subparagraph></paragraph> <paragraph id="HD84FA9684D7F5CFC033580AAE1D0261"><enum>(5)</enum><header>Limitation on transactions between a wholesale financial institution and an insured bank</header><text>For purposes of section 23A(d)(1) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, a wholesale financial institution that is affiliated with an insured bank shall not be a bank.</text></paragraph> <paragraph id="H4AB4504E4A23678460C1158B0474FFD"><enum>(6)</enum><header>No effect on other provisions</header><text>This section shall not be construed as limiting the Board’s authority over member banks under any other provision of law, or to create any obligation for any Federal Reserve bank to make, increase, renew, or extend any advance or discount under this Act to any member bank or other depository institution.</text></paragraph></subsection> <subsection id="H560243144017600A556855A8ECFB1F9"><enum>(d)</enum><header>Capital and managerial requirements</header> <paragraph id="H1104BEFF482A084F7415A1B3A5B7F4B"><enum>(1)</enum><header>In general</header><text>A wholesale financial institution shall be well capitalized and well managed.</text></paragraph> <paragraph id="H697C6E0A4C24C095D30616BFDC42EE7"><enum>(2)</enum><header>Notice to company</header><text>The Board shall promptly provide notice to a company that controls a wholesale financial institution whenever such wholesale financial institution is not well capitalized or well managed.</text></paragraph> <paragraph id="H2FC22C5B4D2406815FE2DDB8B410AEF"><enum>(3)</enum><header>Agreement to restore institution</header><text>Not later than 45 days after the date of receipt of a notice under paragraph (2) (or such additional period not to exceed 90 days as the Board may permit), the company shall execute an agreement acceptable to the Board to restore the wholesale financial institution to compliance with all of the requirements of paragraph (1).</text></paragraph> <paragraph id="H21DAB6384F650F39F1EF5385C835525"><enum>(4)</enum><header>Limitations until institution restored</header><text>Until the wholesale financial institution is restored to compliance with all of the requirements of paragraph (1), the Board may impose such limitations on the conduct or activities of the company or any affiliate of the company as the Board determines to be appropriate under the circumstances.</text></paragraph> <paragraph id="HEF635D2B4E90F56A031914BDACC2B16"><enum>(5)</enum><header>Failure to restore</header><text>If the company does not execute and implement an agreement in accordance with paragraph (3), comply with any limitation imposed under paragraph (4), restore the wholesale financial institution to well capitalized status not later than 180 days after the date of receipt by the company of the notice described in paragraph (2), or restore the wholesale financial institution to well managed status within such period as the Board may permit, the company shall, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the Board’s discretion, divest control of its subsidiary depository institutions.</text></paragraph> <paragraph id="HD879D12F45FE77F0C03BFD8AD1F9B05"><enum>(6)</enum><header>Well managed defined</header><text>For purposes of this subsection, the term <term>well managed</term> has the same meaning as in section 2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph></subsection> <subsection id="H22260A2946D5560D485AB1B3004929A"><enum>(e)</enum><header>Resolution of wholesale financial institutions</header> <paragraph id="HA3F8713A4319CADF40D1EEB64BAFF1E"><enum>(1)</enum><header>Conservatorship or receivership</header> <subparagraph id="HE616D44A4D6C7E9CE65EEDA719FDDB6"><enum>(A)</enum><header>Appointment</header><text>The Board may appoint a conservator or receiver for a wholesale financial institution to the same extent and in the same manner as the Comptroller of the Currency may appoint a conservator or receiver for a national bank.</text></subparagraph> <subparagraph id="H123DFA764F93A5E93B45F2A29542BAD"><enum>(B)</enum><header>Powers</header><text>The conservator or receiver for a wholesale financial institution shall exercise the same powers, functions, and duties, subject to the same limitations, as a conservator or receiver for a national bank.</text></subparagraph></paragraph> <paragraph id="HAB35AF17403ACBAEBF3AF88244B8BAA"><enum>(2)</enum><header>Board authority</header><text>The Board shall have the same authority with respect to any conservator or receiver appointed for a wholesale financial institution under paragraph (1), and the wholesale financial institution for which it has been appointed, as the Comptroller of the Currency has with respect to a conservator or receiver for a national bank and the national bank for which the conservator or receiver has been appointed.</text></paragraph> <paragraph id="HA2FF5CBD4A3EA9AB72610AAA8FE464F"><enum>(3)</enum><header>Bankruptcy proceedings</header><text>The Comptroller of the Currency (in the case of a national wholesale financial institution) and the Board may direct the conservator or receiver of a wholesale financial institution to file a petition pursuant to title 11, United States Code, in which case, title 11, United States Code, shall apply to the wholesale financial institution in lieu of otherwise applicable Federal or State insolvency law.</text></paragraph></subsection> <subsection id="H411F62C04F3348DEF3ABA9A206E3B25"><enum>(f)</enum><header>Exclusive jurisdiction</header><text>Subsections (c) and (e) of section 43 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> shall not apply to any wholesale financial institution.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HC49EC10B427F1B6BD11163B75265FAE"><enum>(c)</enum><header>Voluntary termination of insured status by certain institutions</header> <paragraph id="H29734F364D3FD5C897F937A6A6BF47B"><enum>(1)</enum><header>Section 8 designations</header><text>Section 8(a) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1818(a)">12 U.S.C. 1818(a)</external-xref>) is amended—</text> <subparagraph id="H4DFEA5CD49AA3A9057A0538C398D18C"><enum>(A)</enum><text>by striking paragraph (1); and</text></subparagraph> <subparagraph id="HE25A0E634BE38E38AECF6DB57873B23"><enum>(B)</enum><text>by redesignating paragraphs (2) through (10) as paragraphs (1) through (9), respectively.</text></subparagraph></paragraph> <paragraph id="H3D7985974480A6A62DDB0AA5D000B00"><enum>(2)</enum><header>Voluntary termination of insured status</header><text>The <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1811">12 U.S.C. 1811</external-xref> et seq.) is amended by inserting after section 8 the following new section:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="H9CFBCF524F0533555E511FB2D4661FA"> <section id="HB9B60C41407BA862C617AC967B07FAF"><enum>8A.</enum><header>Voluntary termination of status as insured depository institution</header> <subsection id="HECD0B9E248B09E08D0009D99DA57B8F"><enum>(a)</enum><header>In general</header><text>Except as provided in subsection (b), an insured State bank or a national bank may voluntarily terminate such bank’s status as an insured depository institution in accordance with regulations of the Corporation if—</text> <paragraph id="H49E3CED84E2E5E6F5698EEB4D3BA186"><enum>(1)</enum><text>the bank provides written notice of the bank’s intent to terminate such insured status—</text> <subparagraph id="HE9EC4C6E4345DAF40B77959618DA6A9"><enum>(A)</enum><text>to the Corporation and the Board of Governors of the Federal Reserve System not less than 6 months before the effective date of such termination; and</text></subparagraph> <subparagraph id="H35FA02614305870303CEAB8AE7CCEB5"><enum>(B)</enum><text>to all depositors at such bank, not less than 6 months before the effective date of the termination of such status; and</text></subparagraph></paragraph> <paragraph id="HE3C6825C4D51AC51C9C305A7E860900"><enum>(2)</enum><text>either—</text> <subparagraph id="H754F353541DA85333631A294586DBE3"><enum>(A)</enum><text>the deposit insurance fund of which such bank is a member equals or exceeds the fund’s designated reserve ratio as of the date the bank provides a written notice under paragraph (1) and the Corporation determines that the fund will equal or exceed the applicable designated reserve ratio for the 2 semiannual assessment periods immediately following such date; or</text></subparagraph> <subparagraph id="HA7263D8A4F49E0AA81F66885A9C63C8"><enum>(B)</enum><text>the Corporation and the Board of Governors of the Federal Reserve System approved the termination of the bank’s insured status and the bank pays an exit fee in accordance with subsection (e).</text></subparagraph></paragraph></subsection> <subsection id="HDCD9B79E47CD57EB3370D59A3EC8ACF"><enum>(b)</enum><header>Exception</header><text>Subsection (a) shall not apply with respect to—</text> <paragraph id="H30D1E0AC4BA37859876AC4A912E6DAE"><enum>(1)</enum><text>an insured savings association; or</text></paragraph> <paragraph id="H254ACBB54E4A17E23E035A987EB356E"><enum>(2)</enum><text>an insured branch that is required to be insured under subsection (a) or (b) of section 6 of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>.</text></paragraph></subsection> <subsection id="H7F3668CB4FBAA04050EA5685FEA1ED0"><enum>(c)</enum><header>Eligibility for insurance terminated</header><text>Any bank that voluntarily elects to terminate the bank’s insured status under subsection (a) shall not be eligible for insurance on any deposits or any assistance authorized under this Act after the period specified in subsection (f)(1).</text></subsection> <subsection id="HF840DFF2468CF79F78A913BB98E9EC7"><enum>(d)</enum><header>Institution must become wholesale financial institution or terminate deposit-taking activities</header><text>Any depository institution which voluntarily terminates such institution’s status as an insured depository institution under this section may not, upon termination of insurance, accept any deposits unless the institution is a wholesale financial institution subject to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></subsection> <subsection id="H0369F28945D3C758B73A648DC280CFE"><enum>(e)</enum><header>Exit fees</header> <paragraph id="H54CC937F4D8FB2044453ABAFE5BCD00"><enum>(1)</enum><header>In general</header><text>Any bank that voluntarily terminates such bank’s status as an insured depository institution under this section shall pay an exit fee in an amount that the Corporation determines is sufficient to account for the institution’s pro rata share of the amount (if any) which would be required to restore the relevant deposit insurance fund to the fund’s designated reserve ratio as of the date the bank provides a written notice under subsection (a)(1).</text></paragraph> <paragraph id="HFE1BE0E4479EF5FFB1A6689C71B46A4"><enum>(2)</enum><header>Procedures</header><text>The Corporation shall prescribe, by regulation, procedures for assessing any exit fee under this subsection.</text></paragraph></subsection> <subsection id="HD2A4EDE7470CFEB8758800A589F00A4"><enum>(f)</enum><header>Temporary insurance of deposits insured as of termination</header> <paragraph id="HF05D61004831D2C3FFC7928F911FFA4"><enum>(1)</enum><header>Transition period</header><text>The insured deposits of each depositor in a State bank or a national bank on the effective date of the voluntary termination of the bank’s insured status, less all subsequent withdrawals from any deposits of such depositor, shall continue to be insured for a period of not less than 6 months and not more than 2 years, as determined by the Corporation. During such period, no additions to any such deposits, and no new deposits in the depository institution made after the effective date of such termination shall be insured by the Corporation.</text></paragraph> <paragraph id="H6902B81547B9DFADA8CFB3AEC9BCD44"><enum>(2)</enum><header>Temporary assessments; obligations and duties</header><text>During the period specified in paragraph (1) with respect to any bank, the bank shall continue to pay assessments under section 7 as if the bank were an insured depository institution. The bank shall, in all other respects, be subject to the authority of the Corporation and the duties and obligations of an insured depository institution under this Act during such period, and in the event that the bank is closed due to an inability to meet the demands of the bank’s depositors during such period, the Corporation shall have the same powers and rights with respect to such bank as in the case of an insured depository institution.</text></paragraph></subsection> <subsection id="HEF4D9F3E4C670C252D8BBA9D53D3D39"><enum>(g)</enum><header>Advertisements</header> <paragraph id="H1AFB3D2F49A24DE216602EAB830095E"><enum>(1)</enum><header>In general</header><text>A bank that voluntarily terminates the bank’s insured status under this section shall not advertise or hold itself out as having insured deposits, except that the bank may advertise the temporary insurance of deposits under subsection (f) if, in connection with any such advertisement, the advertisement also states with equal prominence that additions to deposits and new deposits made after the effective date of the termination are not insured.</text></paragraph> <paragraph id="H97E38D0D4C9C6BC8978B73AFEE6C6EB"><enum>(2)</enum><header>Certificates of deposit, obligations, and securities</header><text>Any certificate of deposit or other obligation or security issued by a State bank or a national bank after the effective date of the voluntary termination of the bank’s insured status under this section shall be accompanied by a conspicuous, prominently displayed notice that such certificate of deposit or other obligation or security is not insured under this Act.</text></paragraph></subsection> <subsection id="H487EAEE94B9126403484B79F548080B"><enum>(h)</enum><header>Notice requirements</header> <paragraph id="HA380E8D6493557D3EA1AA38DDFB4F93"><enum>(1)</enum><header>Notice to the Corporation</header><text>The notice required under subsection (a)(1)(A) shall be in such form as the Corporation may require.</text></paragraph> <paragraph id="H38956C52416510CE30B957AF82D5B0C"><enum>(2)</enum><header>Notice to depositors</header><text>The notice required under subsection (a)(1)(B) shall be—</text> <subparagraph id="H0C91378842E038C2BFB9A1BDFFC1B9B"><enum>(A)</enum><text>sent to each depositor’s last address of record with the bank; and</text></subparagraph> <subparagraph id="H96D300A646DF4DEEA1D7CF8EA9415AE"><enum>(B)</enum><text>in such manner and form as the Corporation finds to be necessary and appropriate for the protection of depositors.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H73195F644DC6C6CDEDCA038B458673C"><enum>(3)</enum><header>Definition</header><text>Section 19(b)(1)(A)(i) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/461(b)(1)(A)(i)">12 U.S.C. 461(b)(1)(A)(i)</external-xref>) is amended by inserting <quote>, or any wholesale financial institution subject to section 9B of this Act</quote> after <quote>such Act</quote>.</text></paragraph></subsection> <subsection id="H6E0B6A884EAE4B0B7E9B12A712A7E3C"><enum>(d)</enum><header>Technical and conforming amendments to the bankruptcy Code</header> <paragraph id="H17D129B64E738D1A1F67F28BADBF088"><enum>(1)</enum><header>Bankruptcy Code debtors</header><text>Section 109(b)(2) of title 11, United States Code, is amended by striking <quote>; or</quote> and inserting the following:</text> <quoted-block display-inline="yes-display-inline" id="H8C85A15E427682C606801E8254B3CDD"><text>, except that—</text> <subparagraph id="HCCECDAEF4BC36B08CCC1F4B5C04F776"><enum>(A)</enum><text>a wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> may be a debtor if a petition is filed at the direction of the Comptroller of the Currency (in the case of a wholesale financial institution established under section 5136B of the Revised Statutes of the United States) or the Board of Governors of the Federal Reserve System (in the case of any wholesale financial institution); and</text></subparagraph> <subparagraph id="H0C9365FA48018F15158529860247C9F"><enum>(B)</enum><text>a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> may be a debtor if a petition is filed at the direction of the Board of Governors of the Federal Reserve System; or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H0E627DBB4D165688390DBD9DF9E551D"><enum>(2)</enum><header>Chapter 7 debtors</header><text>Section 109(d) of title 11, United States Code, is amended to read as follows:</text> <quoted-block id="H83BE4773458F57FDB366FBBFBEDE1C0"> <subsection id="H0433F28849E184EC7D728A8929D9D28"><enum>(d)</enum><text>Only a railroad and a person that may be a debtor under chapter 7 of this title, except that a stockbroker, a wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or a commodity broker, may be a debtor under chapter 11 of this title.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HC18E83354B131F20242CA2B4E1C5AC9"><enum>(3)</enum><header>Definition of financial institution</header><text>Section 101(22) of title 11, United States Code, is amended to read as follows:</text> <quoted-block id="H85F46EC0416850731AC171ACD41632C"> <paragraph id="H3FA1A02044348BE084346DB4BA392E3"><enum>(22)</enum><text><quote>financial institution</quote> means a person that is a commercial or savings bank, industrial savings bank, savings and loan association, trust company, wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> and, when any such person is acting as agent or custodian for a customer in connection with a securities contract, as defined in section 741 of this title, such customer,</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HF1F338744111DA42DC70A29F42FDF7D"><enum>(4)</enum><header>Subchapter V of chapter 7</header> <subparagraph id="H25A6B075418ED8ABB415EE8BB44800E"><enum>(A)</enum><header>In general</header><text>Section 103 of title 11, United States Code, is amended—</text> <clause id="H74E5DBC84852CDE77001C79AB7F5B18"><enum>(i)</enum><text>by redesignating subsections (e) through (i) as subsections (f) through (j), respectively; and</text></clause> <clause id="H17495FE143BE1892B7C9AD8223CF8BC"><enum>(ii)</enum><text>by inserting after subsection (d) the following:</text> <quoted-block id="H8418371D438A8978C10A6D88C8A71A8"> <subsection id="H21C2178B421A1DFCF014DF9B48C68A7"><enum>(e)</enum><text>Subchapter V of chapter 7 of this title applies only in a case under such chapter concerning the liquidation of a wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H6C03FAB441185992D05F01A7285714F"><enum>(B)</enum><header>Wholesale bank liquidation</header><text>Chapter 7 of title 11, United States Code, is amended by adding at the end the following:</text> <quoted-block style="USC" id="H03D3B5B647C7627C4F52968747BB7F6"> <subchapter id="H115830AC4CF040CEC0E852BCF0DBE35"><enum>V</enum><header>Wholesale bank liquidation</header> <section id="H4AA0FF3F46AB6C61D1C65098ED69EED"><enum>781.</enum><header>Definitions for subchapter</header><text display-inline="no-display-inline">In this subchapter—</text> <paragraph id="HEE45E9934FC6A79E9D8CF8B75700D09"><enum>(1)</enum><text>the term <term>Board</term> means the Board of Governors of the Federal Reserve System;</text></paragraph> <paragraph id="HE98F6E734FE1EBFF5FE32EB37B864DB"><enum>(2)</enum><text>the term <term>depository institution</term> has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, and includes any wholesale bank;</text></paragraph> <paragraph id="H294758134D430DE4136D90B57BCFD4B"><enum>(3)</enum><text>the term <term>national wholesale financial institution</term> means a wholesale financial institution established under section 5136B of the Revised Statutes of the United States; and</text></paragraph> <paragraph id="HF121086B44B45D779A4793A726B5E32"><enum>(4)</enum><text>the term <term>wholesale bank</term> means a national wholesale financial institution, a wholesale financial institution established under section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></paragraph></section> <section id="H3458699F49F92BABACA192AB35A207D"><enum>782.</enum><header>Selection of trustee</header><text display-inline="no-display-inline">Notwithstanding any other provision of this title, the conservator or receiver who files the petition shall be the trustee under this chapter, unless the Comptroller of the Currency (in the case of a national wholesale financial institution for which it appointed the conservator or receiver) or the Board (in the case of any wholesale bank for which it appointed the conservator or receiver) designates an alternative trustee. The Comptroller of the Currency or the Board (as applicable) may designate a successor trustee, if required.</text></section> <section id="HAA7BAB6C4C49123FD59D4B908DEBAE7"><enum>783.</enum><header>Additional powers of trustee</header> <subsection id="H46BE2EAB414062630232FCABF8AC87E"><enum>(a)</enum><text>The trustee under this subchapter has power, with permission of the court—</text> <paragraph id="H61BFCA4E4F60F08F5D2D578A24EDFE4"><enum>(1)</enum><text>to sell the wholesale bank to a depository institution or consortium of depository institutions (which consortium may agree on the allocation of the wholesale bank among the consortium);</text></paragraph> <paragraph id="HA3696E72486AF86588B9C39AB504EA3"><enum>(2)</enum><text>to merge the wholesale bank with a depository institution;</text></paragraph> <paragraph id="H7D7636AF41A2EED3FE246D92B610BBA"><enum>(3)</enum><text>to transfer contracts to the same extent as could a receiver for a depository institution under paragraphs (9) and (10) of section 11(e) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>;</text></paragraph> <paragraph id="HDD4159FC44323D4609B8D6A6C0B2A3F"><enum>(4)</enum><text>to transfer assets or liabilities to a depository institution;</text></paragraph> <paragraph id="H663EAAD54A0C9417005FB4B279C701D"><enum>(5)</enum><text>to distribute property not of the estate, including distributions to customers that are mandated by subchapters III and IV of this chapter; or</text></paragraph> <paragraph id="H64C03864426B7DE4DE629CB5DB5B5B2"><enum>(6)</enum><text>to transfer assets and liabilities to a bridge bank as provided in paragraphs (1), (3)(A), (5), (6), and (9) through (13), and subparagraphs (A) through (H) and (K) of paragraph (4) of section 11(n) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, except that—</text> <subparagraph id="H0BF7320D49997815994291BA2980B85"><enum>(A)</enum><text>the bridge bank shall be treated as a wholesale bank for the purpose of this subsection; and</text></subparagraph> <subparagraph id="H75DE796B4F6BB53B2059759D71E7C05"><enum>(B)</enum><text>any references in any such provision of law to the Federal Deposit Insurance Corporation shall be construed to be references to the appointing agency and that references to deposit insurance shall be omitted.</text></subparagraph></paragraph></subsection> <subsection id="H5DC4DBBD404E8138E28EEDA0B269B34"><enum>(b)</enum><text>Any reference in this section to transfers of liabilities includes a ratable transfer of liabilities within a priority class.</text></subsection></section> <section id="H5CCBC2F0439A40EF501E4DA8C7BD605"><enum>784.</enum><header>Right to be heard</header><text display-inline="no-display-inline">The Comptroller of the Currency (in the case of a national wholesale financial institution), the Board (in the case of any wholesale bank), or a Federal Reserve bank (in the case of a wholesale bank that is a member of that bank) may raise and may appear and be heard on any issue in a case under this subchapter.</text></section> <section id="H5BDFF8F34DF0F99040303A8CC85D9DC"><enum>785.</enum><header>Expedited transfers</header><text display-inline="no-display-inline">The trustee may make a transfer pursuant to section 783 without prior judicial approval, if the Comptroller of the Currency (in the case of a national wholesale financial institution for which it appointed the conservator or receiver) or the Board (in the case of any wholesale bank for which it appointed the conservator or receiver) determines that the transfer would be necessary to avert serious adverse effects on economic conditions or financial stability.</text></section></subchapter><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph> <subparagraph id="H0EA6335C466D0B54D5D8929CDFC26F3"><enum>(C)</enum><header>Conforming amendment</header><text>The table of sections for chapter 7 of title 11, United States Code, is amended by adding at the end the following:</text> <quoted-block style="USC" id="H00CD86684F430FE744506F989EECB00"> <toc regeneration="no-regeneration"> <toc-entry level="section">781. Definitions for subchapter</toc-entry> <toc-entry level="section">782. Selection of trustee</toc-entry> <toc-entry level="section">783. Additional powers of trustee</toc-entry> <toc-entry level="section">784. Right to be heard</toc-entry> <toc-entry level="section">785. Expedited transfers</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection> <subsection id="HF277CAFB4E59FF00D80C2BA0C57CE72"><enum>(e)</enum><header>Resolution of edge corporations</header><text>Section 25A(16) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/624(16)">12 U.S.C. 624(16)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Reserve Act" id="H235335F54CB5D7354BA440BA136CEFC"> <paragraph id="HB3E3DA234F0DE9CB12D873BED66CEFA"><enum>(16)</enum><header>Appointment of receiver or conservator</header> <subparagraph id="HB79E66A74093568577BDFA8E42F3C5D"><enum>(A)</enum><header>In general</header><text>The Board may appoint a conservator or receiver for a corporation organized under the provisions of this section to the same extent and in the same manner as the Comptroller of the Currency may appoint a conservator or receiver for a national bank, and the conservator or receiver for such corporation shall exercise the same powers, functions, and duties, subject to the same limitations, as a conservator or receiver for a national bank.</text></subparagraph> <subparagraph id="H35FE3C1A45E6A0AA58BDDF854DDF088"><enum>(B)</enum><header>Equivalent authority</header><text>The Board shall have the same authority with respect to any conservator or receiver appointed for a corporation organized under the provisions of this section under this paragraph and any such corporation as the Comptroller of the Currency has with respect to a conservator or receiver of a national bank and the national bank for which a conservator or receiver has been appointed.</text></subparagraph> <subparagraph id="HECCAA94B44CBFC7D6BF83C8522D898B"><enum>(C)</enum><header>Title 11 petitions</header><text>The Board may direct the conservator or receiver of a corporation organized under the provisions of this section to file a petition pursuant to title 11, United States Code, in which case, title 11, United States Code, shall apply to the corporation in lieu of otherwise applicable Federal or State insolvency law.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section></chapter></subtitle> <subtitle id="H4496B7C44A279270D874E2B9C0D0000"><enum>E</enum><header>Preservation of FTC authority</header> <section id="HCF0506CC42E18EAC8679D2871BD267F"><enum>141.</enum><header>Amendment to the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> to modify notification and post-approval waiting period for Section 3 transactions</header><text display-inline="no-display-inline">Section 11(b)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1849(b)(1)">12 U.S.C. 1849(b)(1)</external-xref>) is amended by inserting <quote>and, if the transaction also involves an acquisition under section 4 or section 6, the Board shall also notify the Federal Trade Commission of such approval</quote> before the period at the end of the first sentence.</text></section> <section id="HBA783F2D485C336C5F6D6C90B518CA7"><enum>142.</enum><header>Interagency data sharing</header><text display-inline="no-display-inline">To the extent not prohibited by other law, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System shall make available to the Attorney General and the Federal Trade Commission any data in the possession of any such banking agency that the antitrust agency deems necessary for antitrust review of any transaction requiring notice to any such antitrust agency or the approval of such agency under section 3, 4, or 6 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>, section 18(c) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, the <act-name parsable-cite="NMCMA">National Bank Consolidation and Merger Act</act-name>, <external-xref legal-doc="act" parsable-cite="HOLA/10">section 10</external-xref> of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name>, or the antitrust laws.</text></section> <section id="HA137ECA34ACF4E49C2A097873600D3C"><enum>143.</enum><header>Clarification of status of subsidiaries and affiliates</header> <subsection id="H78CB8F7448D35FBD378C37A2AEBBDF4"><enum>(a)</enum><header>Clarification of Federal Trade Commission jurisdiction</header><text>Any person which directly or indirectly controls, is controlled directly or indirectly by, or is directly or indirectly under common control with, any bank or savings association (as such terms are defined in <external-xref legal-doc="act" parsable-cite="FDIA/3">section 3</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>) and is not itself a bank or savings association shall not be deemed to be a bank or savings association for purposes of the <act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> or any other law enforced by the Federal Trade Commission.</text></subsection> <subsection id="H899077164C3FFAA8D63D699F2FC9939"><enum>(b)</enum><header>Savings provision</header><text>No provision of this section shall be construed as restricting the authority of any Federal banking agency (as defined in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>) under any Federal banking law, including <external-xref legal-doc="act" parsable-cite="FDIA/8">section 8</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subsection> <subsection id="H0962C3254EA3D79700768DA089C64BA"><enum>(c)</enum><header>Hart-scott-rodino amendment</header><text>Section 7A(c)(7) of the <act-name parsable-cite="CLAY">Clayton Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/18a(c)(7)">15 U.S.C. 18a(c)(7)</external-xref>) is amended by inserting before the semicolon at the end thereof the following: <quote>, except that a portion of a transaction is not exempt under this paragraph if such portion of the transaction (A) requires notice under section 6 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>; and (B) does not require approval under <external-xref legal-doc="act" parsable-cite="BHC65/4">section 3 or 4</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name></quote>.</text></subsection></section> <section id="H01394CAB42F588CA1A458EAADDA1F00"><enum>144.</enum><header>Annual GAO report</header> <subsection id="H6001EA97447C33F75F9490963E72D4B"><enum>(a)</enum><header>In general</header><text>By the end of the 1-year period beginning on the date of the enactment of this Act and annually thereafter, the Comptroller General of the United States shall submit a report to the Congress on market concentration in the financial services industry and its impact on consumers.</text></subsection> <subsection id="H3260A20B47CC8C7FDDB3B6B120AAB1C"><enum>(b)</enum><header>Analysis</header><text>Each report submitted under subsection (a) shall contain an analysis of—</text> <paragraph id="HD3C85E4942C9C0395FFEB3AB6423AA1"><enum>(1)</enum><text>the positive and negative effects of affiliations between various types of financial companies, and of acquisitions pursuant to this Act and the amendments made by this Act to other provisions of law, including any positive or negative effects on consumers, area markets, and submarkets thereof or on registered securities brokers and dealers which have been purchased by depository institutions or depository institution holding companies;</text></paragraph> <paragraph id="H157084584778F849C22092BB00D165B"><enum>(2)</enum><text>the changes in business practices and the effects of any such changes on the availability of venture capital, consumer credit, and other financial services or products and the availability of capital and credit for small businesses; and</text></paragraph> <paragraph id="H51D7B43A4A97E8BD4ED2FFBCCFFAFBA"><enum>(3)</enum><text>the acquisition patterns among depository institutions, depository institution holding companies, securities firms, and insurance companies including acquisitions among the largest 20 percent of firms and acquisitions within regions or other limited geographical areas.</text></paragraph></subsection></section></subtitle> <subtitle id="HABC530F844538E2E527B9795BAACCAE"><enum>F</enum><header>Applying the principles of national treatment and equality of competitive opportunity to foreign banks and foreign financial institutions</header> <section id="H8A0BDFEA480920B52B079DAAA239BAA"><enum>151.</enum><header>Applying the principles of national treatment and equality of competitive opportunity to foreign banks that are financial holding companies</header><text display-inline="no-display-inline">Section 8(c) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3106(c)">12 U.S.C. 3106(c)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="International Banking Act of 1978" id="HD0B87C0E482E27411309F3B38918C8C"> <paragraph id="H0A7A7C864F824E7501021A96E7D2FE4"><enum>(3)</enum><header>Termination of grandfathered rights</header> <subparagraph id="HB26652D640160F2635E217B8218FDE2"><enum>(A)</enum><header>In general</header><text>If any foreign bank or foreign company files a declaration under section 6(b)(1)(C) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>, or receives a determination under section 10(d)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>, any authority conferred by this subsection on any foreign bank or company to engage in any activity which the Board has determined to be permissible for financial holding companies under section 6 of such Act shall terminate immediately.</text></subparagraph> <subparagraph id="H79801076478CE0799ECDD9B073C7782"><enum>(B)</enum><header>Restrictions and requirements authorized</header><text>If a foreign bank or company that engages, directly or through an affiliate pursuant to paragraph (1), in an activity which the Board has determined to be permissible for financial holding companies under section 6 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> has not filed a declaration with the Board of its status as a financial holding company under such section or received a determination under section 10(d)(1) by the end of the 2-year period beginning on the date of enactment of the &short-title1;, the Board, giving due regard to the principle of national treatment and equality of competitive opportunity, may impose such restrictions and requirements on the conduct of such activities by such foreign bank or company as are comparable to those imposed on a financial holding company organized under the laws of the United States, including a requirement to conduct such activities in compliance with any prudential safeguards established under section 5(h) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H3525FFA94A196025B1948F9BA068BC4"><enum>152.</enum><header>Applying the principles of national treatment and equality of competitive opportunity to foreign banks and foreign financial institutions that are wholesale financial institutions</header><text display-inline="no-display-inline">Section 8A of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (as added by section 136(c)(2) of this Act) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="HDD6291144C51FA6A8D65EDAED2D4789"> <subsection id="H67D231EF4649DC0E8ACC4DB2D493D8C"><enum>(i)</enum><header>Voluntary termination of deposit insurance</header><text>The provisions on voluntary termination of insurance in this section shall apply to an insured branch of a foreign bank (including a Federal branch) in the same manner and to the same extent as they apply to an insured State bank or a national bank.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H15E1DEDA47BFF0B12641CA99BD53CAD"><enum>153.</enum><header>Representative offices</header> <subsection id="H173342244E42C463E8D87CB4C3D23F0"><enum>(a)</enum><header>Definition of <quote>representative office</quote></header><text>Section 1(b)(15) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3101(15)">12 U.S.C. 3101(15)</external-xref>) is amended by striking <quote>State agency, or subsidiary of a foreign bank</quote> and inserting <quote>or State agency</quote>.</text></subsection> <subsection id="H1D143FE546E9A7586128F4B5229880E"><enum>(b)</enum><header>Examinations</header><text>Section 10(c) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3107(c)">12 U.S.C. 3107(c)</external-xref>) is amended by adding at the end the following: <quote>The Board may also make examinations of any affiliate of a foreign bank conducting business in any State if the Board deems it necessary to determine and enforce compliance with this Act, the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841</external-xref> et seq.), or other applicable Federal banking law.</quote>.</text></subsection></section></subtitle> <subtitle id="H216EE6EA43CBA58C5549F197363F93B"><enum>G</enum><header>Federal Home Loan Bank System modernization</header> <section id="H648019AA4EF13B2C362C64BBEF91BAF"><enum>161.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote><short-title>&short-title2;</short-title></quote>.</text></section> <section id="H8A58CA24410B673A6890F0B316DA941"><enum>162.</enum><header>Definitions</header><text display-inline="no-display-inline">Section 2 of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1422">12 U.S.C. 1422</external-xref>) is amended—</text> <paragraph id="H0B22CEF548601F2DDC1967A5905F05C"><enum>(1)</enum><text>in paragraph (1), by striking <quote>term <term>Board</term> means</quote> and inserting <quote>terms <term>Finance Board</term> and <term>Board</term> mean</quote>;</text></paragraph> <paragraph id="H71D8E11D4D024DBE9431C19CDE6035C"><enum>(2)</enum><text>by striking paragraph (3) and inserting the following:</text> <quoted-block id="H44DB84A8401B36DA5F7B3E8DC57BCFB"> <paragraph id="H165A1B0149E57DF0535A50ACFA6BAAB"><enum>(3)</enum><header>State</header><text>The term <term>State</term>, in addition to the States of the United States, includes the District of Columbia, Guam, Puerto Rico, the United States Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HDFDB66D04592432666DB6C89411462D"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block id="HA9F293BE4FF627F363E64F93C9EAE26"> <paragraph id="H57982BCE4C9AC093D25618BE8C8919B"><enum>(13)</enum><header>Community financial institution</header> <subparagraph id="H71649F8640B0A6F539314092ECB382F"><enum>(A)</enum><header>In general</header><text>The term <term>community financial institution</term> means a member—</text> <clause id="H3B2BB1EF443E79067CAE95B25CC30C6"><enum>(i)</enum><text>the deposits of which are insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; and</text></clause> <clause id="HED0D9C4347E68ACF24865E8EDBB324D"><enum>(ii)</enum><text>that has, as of the date of the transaction at issue, less than $500,000,000 in average total assets, based on an average of total assets over the 3 years preceding that date.</text></clause></subparagraph> <subparagraph id="HF127BA054D53190C994F6789F605B49"><enum>(B)</enum><header>Adjustments</header><text>The $500,000,000 limit referred to in subparagraph (A)(ii) shall be adjusted annually by the Finance Board, based on the annual percentage increase, if any, in the Consumer Price Index for all urban consumers, as published by the Department of Labor.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H06F42DB14F5103DF0B2E6995C117BBE"><enum>163.</enum><header>Savings Association membership</header> <subsection id="H8AABF5DC418E644140C2138169FE84D"><enum>(a)</enum><header>Federal home loan bank membership</header><text>Section 5(f) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1464(f)">12 U.S.C. 1464(f)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Home Owners’ Loan Act" id="HA1500AA148F8B4FBD2A8E1A8C0B31CE"> <subsection id="HE3EC51C24D92D2B2592CA19109D008B"><enum>(f)</enum><header>Federal home loan bank membership</header><text>On and after January 1, 1999, a Federal savings association may become a member of the Federal Home Loan Bank System, and shall qualify for such membership in the manner provided by the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name>.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HB5DDB02A499964F55C2A5C8EEBD9A0A"><enum>(b)</enum><header>Withdrawal</header><text>Section 6(e) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1426(e)">12 U.S.C. 1426(e)</external-xref>) is amended by striking <quote>Any member other than a Federal savings and loan association may withdraw</quote> and inserting <quote>Any member may withdraw</quote>.</text></subsection></section> <section id="H427398D5442B9E6DF75CA992E0F3E75"><enum>164.</enum><header>Advances to members; collateral</header> <subsection id="H033F058741DBCAD81F112C86F5BA2DA"><enum>(a)</enum><header>In general</header><text>Section 10(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430(a)">12 U.S.C. 1430(a)</external-xref>) is amended—</text> <paragraph id="H32A8085F4A503216305AA88505FAF80"><enum>(1)</enum><text>by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D), respectively, and indenting appropriately;</text></paragraph> <paragraph id="H3B9C974245BCC64D935BDA9FD3EC8E4"><enum>(2)</enum><text>by striking <quote>(a) Each</quote> and inserting the following:</text> <quoted-block id="H1B1C80E3407200D9DF43B79FD1E70FB"> <subsection id="H9404AC3045415BE2B17E7A8E692E90F"><enum>(a)</enum><header>In general</header> <paragraph id="H54438F284C6210D091C3EDB6CCA9C2D"><enum>(1)</enum><header>All advances</header><text>Each</text></paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="H2C62F2544274B99E96F90EA89D6B33B"><enum>(3)</enum><text>by striking the second sentence and inserting the following:</text> <quoted-block id="H5E55FDCA44100B8EA5A9778950B67C3"> <paragraph id="H5385834244125B069F5D1A88661438E"><enum>(2)</enum><header>Purposes of advances</header><text>A long-term advance may only be made for the purposes of—</text> <subparagraph id="H485C361141AB21BAAA2EC9A5861DE83"><enum>(A)</enum><text>providing funds to any member for residential housing finance; and</text></subparagraph> <subparagraph id="H0AA323CD4097E8E711DE5BAD428CF78"><enum>(B)</enum><text>providing funds to any community financial institution for small businesses, agricultural, rural development, or low-income community development lending.</text></subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="HF5483D4242406E011804DE82EDF9C5F"><enum>(4)</enum><text>by striking <quote>A Bank</quote> and inserting the following:</text> <quoted-block id="H520B1C4B4FF28F12CBDA268900B3191"> <paragraph id="H50D4D52B43EFC4FE8FCFD7BCC4668DA"><enum>(3)</enum><header>Collateral</header><text>A Bank</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="H707D4592475F6A2FA1DB46B49442FC7"><enum>(5)</enum><text>in paragraph (3) (as so designated by paragraph (4) of this subsection)—</text> <subparagraph id="H62DAE63F40AD195D4E206085C4D4BD7"><enum>(A)</enum><text>in subparagraph (C) (as so redesignated by paragraph (1) of this subsection) by striking <quote>Deposits</quote> and inserting <quote>Cash or deposits</quote>;</text></subparagraph> <subparagraph id="HE61EBC394B95D46A310B44BFC35900C"><enum>(B)</enum><text>in subparagraph (D) (as so redesignated by paragraph (1) of this subsection), by striking the second sentence; and</text></subparagraph> <subparagraph id="H59276AF84F49F90BCDD5B3ACD33156B"><enum>(C)</enum><text>by inserting after subparagraph (D) (as so redesignated by paragraph (1) of this subsection) the following new subparagraph:</text> <quoted-block id="H3930EB91418DFA0A97B9D78565F8B89"> <subparagraph id="HAF555EF2403BE2E80A5F92A3FEAC73F"><enum>(E)</enum><text>Secured loans for small business, agriculture, rural development, or low-income community development, or securities representing a whole interest in such secured loans, in the case of any community financial institution.</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H53376D52442F6D7CF68578986264FB3"><enum>(6)</enum><text>in paragraph (5)—</text> <subparagraph id="H6E38B761461E571290F40D85D09FD5B"><enum>(A)</enum><text>in the second sentence, by striking <quote>and the Board</quote>;</text></subparagraph> <subparagraph id="H11C04DED4C4A119659E4A8985EF68A2"><enum>(B)</enum><text>in the third sentence, by striking <quote>Board</quote> and inserting <quote>Federal home loan bank</quote>; and</text></subparagraph> <subparagraph id="HF809B48549A62A2F0A1232AF7CED0D4"><enum>(C)</enum><text>by striking <quote>(5) Paragraphs (1) through (4)</quote> and inserting the following:</text> <quoted-block id="H6DBF94884216D9F6250072AE66EE740"> <paragraph id="H054C44EF4C4C6F57755FF58EA8A687E"><enum>(4)</enum><header>Additional bank authority</header><text>Subparagraphs (A) through (E) of paragraph (3)</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H83C85B2546613827FC894E8C2C9C48F"><enum>(7)</enum><text>by adding at the end the following:</text> <quoted-block id="H45712906482C0330F989ADA1FF5E3D4"> <paragraph id="HC412CBB04232FC8F8EB9B2B7A9B00E6"><enum>(5)</enum><header>Review of certain collateral standards</header><text>The Board may review the collateral standards applicable to each Federal home loan bank for the classes of collateral described in subparagraphs (D) and (E) of paragraph (3), and may, if necessary for safety and soundness purposes, require an increase in the collateral standards for any or all of those classes of collateral.</text></paragraph> <paragraph id="H6D4D071843E5B3B193AD0199F895F52"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection, the terms <term>small business</term>, <term>agriculture</term>, <term>rural development</term>, and <term>low-income community development</term> shall have the meanings given those terms by rule or regulation of the Finance Board.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H39E922D9470B16AD080F2581AE00FFF"><enum>(b)</enum><header>Clerical amendment</header><text>The section heading for <external-xref legal-doc="act" parsable-cite="FHLBA/10">section 10</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430">12 U.S.C. 1430</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Home Loan Bank Act" id="HE3000359458BF052F4DE2FB740B8500"> <section id="HF7FBF3854239DEEA57DD5C9B08F55E3"><enum>10.</enum><header>Advances to members</header></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HD824A35648454FE05485B68FC5F67BB"><enum>(c)</enum><header>Conforming amendments relating to members which are not qualified thrift lenders</header><text>Section 10(e)(1) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430(e)(1)">12 U.S.C. 1430(e)(1)</external-xref>) is amended in the second sentence, by inserting before the period <quote>or, in the case of any community financial institution, for the purposes described in subsection (a)(2)</quote>.</text></subsection></section> <section id="H93023E99449135D747E472924EC4D00"><enum>165.</enum><header>Eligibility criteria</header><text display-inline="no-display-inline">Section 4(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1424(a)">12 U.S.C. 1424(a)</external-xref>) is amended—</text> <paragraph id="H75A2434C41712B99A24ECC86FFE189F"><enum>(1)</enum><text>in paragraph (2)(A), by inserting, <quote>(other than a community financial institution)</quote> after <quote>institution</quote>; and</text></paragraph> <paragraph id="H804248204327CEB8B8AD58A9BA58935"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block id="HEF593FA44174545AD254EEB011F4900"> <paragraph id="H0CEB80054983E170ED6073A62B1EFCE"><enum>(3)</enum><header>Limited exemption for community financial institutions</header><text>A community financial institution that otherwise meets the requirements of paragraph (2) may become a member without regard to the percentage of its total assets that is represented by residential mortgage loans, as described in subparagraph (A) of paragraph (2).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H6FA1EFF046B25484FE5192A3F100E00"><enum>166.</enum><header>Management of banks</header> <subsection id="HED54A01042BA37C6F9BDFAA9A624989"><enum>(a)</enum><header>Board of Directors</header><text>Section 7(d) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1427(d)">12 U.S.C. 1427(d)</external-xref>) is amended—</text> <paragraph id="HB3E5F07F453A9704278C43B8561800A"><enum>(1)</enum><text>by striking <quote>(d) The term</quote> and inserting the following:</text> <quoted-block id="H9F322A554B61F1641747BC8067BF648"> <subsection id="H67D29E8C4B6AC379B3EA7FA6C0EEA09"><enum>(d)</enum><header>Terms of office</header><text>The term</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HD42C0A834C52EBB20B48D2AFAD2C54E"><enum>(2)</enum><text>by striking <quote>shall be two years</quote>.</text></paragraph></subsection> <subsection id="H6199509B4BCA19DB68E2898989A5850"><enum>(b)</enum><header>Compensation</header><text>Section 7(i) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1427(i)">12 U.S.C. 1427(i)</external-xref>) is amended by striking <quote>, subject to the approval of the board</quote>.</text></subsection> <subsection id="H52BFB746408F935C82FBB2981886D77"><enum>(c)</enum><header>Repeal of sections<enum-in-header> 22A</enum-in-header> and 27</header><text>The <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1421">12 U.S.C. 1421</external-xref> et seq.) is amended by striking sections 22A (<external-xref legal-doc="usc" parsable-cite="usc/12/1442a">12 U.S.C. 1442a</external-xref>) and 27 (<external-xref legal-doc="usc" parsable-cite="usc/12/1447">12 U.S.C. 1447</external-xref>).</text></subsection> <subsection id="H0D3BF0E44968D883E98D1D91B51583C"><enum>(d)</enum><header>Section 12</header><text><external-xref legal-doc="act" parsable-cite="FHLBA/12">Section 12</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1432">12 U.S.C. 1432</external-xref>) is amended—</text> <paragraph id="HB2E671EC478FC6C29317F1890270F73"><enum>(1)</enum><text>in subsection (a)—</text> <subparagraph id="H8506CB9A4747227D0045D582DC90EEF"><enum>(A)</enum><text>by striking <quote>, but, except</quote> and all that follows through <quote>ten years</quote>;</text></subparagraph> <subparagraph id="HFDB712B44D5A3D232490AD8FDA0861E"><enum>(B)</enum><text>by striking <quote>, subject to the approval of the Board</quote> each place that term appears;</text></subparagraph> <subparagraph id="HB2B58E2243C6FE15EAAA0DB08C432FB"><enum>(C)</enum><text>by striking <quote>and, by its Board of directors,</quote> and all that follows through <quote>agent of such bank,</quote> and inserting <quote>and, by the board of directors of the bank, to prescribe, amend, and repeal by-laws governing the manner in which its affairs may be administered, consistent with applicable laws and regulations, as administered by the Finance Board. No officer, employee, attorney, or agent of a Federal home loan bank</quote>; and</text></subparagraph> <subparagraph id="HB82C200147E6693F780DD19500C829B"><enum>(D)</enum><text>by striking <quote>Board of directors</quote> each place that term appears and inserting <quote>board of directors</quote>; and</text></subparagraph></paragraph> <paragraph id="H397AAEDE4E809F89774A5F8FD86FCC0"><enum>(2)</enum><text>in subsection (b), by striking <quote>loans banks</quote> and inserting <quote>loan banks</quote>.</text></paragraph></subsection> <subsection id="H31DF46FC42654CB847A4F9805EC6EBE"><enum>(e)</enum><header>Powers and duties of Federal Housing Finance Board</header> <paragraph id="HF50A14254257F6D0A3E6BF90B236200"><enum>(1)</enum><header>Issuance of notices of violations</header><text>Section 2B(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1422b(a)">12 U.S.C. 1422b(a)</external-xref>) is amended by adding at the end the following new paragraphs:</text> <quoted-block act-name="Federal Home Loan Bank Act" id="H4442C9FB44D009C647483784B1E9E8B"> <paragraph id="HCE2136C643CCBE1A616E55ADA19DE5A"><enum>(5)</enum><text>To issue and serve a notice of charges upon a Federal home loan bank or upon any executive officer or director of a Federal home loan bank if, in the determination of the Finance Board, the bank, executive officer, or director is engaging or has engaged in, or the Finance Board has reasonable cause to believe that the bank, executive officer, or director is about to engage in, any conduct that violates any provision of this Act or any law, order, rule, or regulation or any condition imposed in writing by the Finance Board in connection with the granting of any application or other request by the bank, or any written agreement entered into by the bank with the agency, in accordance with the procedures provided in section 1371(c) of the <act-name parsable-cite="FHEFSSA">Federal Housing Enterprises Financial Safety and Soundness Act of 1992</act-name>. Such authority includes the same authority to take affirmative action to correct conditions resulting from violations or practices or to limit activities of a bank or any executive officer or director of a bank as appropriate Federal banking agencies have to take with respect to insured depository institutions under paragraphs (6) and (7) of section 8(b) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, and to have all other powers, rights, and duties to enforce this Act with respect to the Federal home loan banks and their executive officers and directors as the Office of Federal Housing Enterprise Oversight has to enforce the <act-name parsable-cite="FHEFSSA">Federal Housing Enterprises Financial Safety and Soundness Act of 1992</act-name>, the <act-name parsable-cite="FNMACA">Federal National Mortgage Association Charter Act</act-name>, or the <act-name parsable-cite="FHLMCA">Federal Home Loan Mortgage Corporation Act</act-name> with respect to the Federal housing enterprises under the <act-name parsable-cite="FHEFSSA">Federal Housing Enterprises Financial Safety and Soundness Act of 1992</act-name>.</text></paragraph> <paragraph id="HA6FFDA924C81A0C1B36DDBAF75B122D"><enum>(6)</enum><text>To address any insufficiencies in capital levels resulting from the application of section 5(f) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name>.</text></paragraph> <paragraph id="H21E3BA50416F85FFE97C0EAECC4EDFC"><enum>(7)</enum><text>To sue and be sued, by and through its own attorneys.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H498AF7FF493D2611949F3CB3E96CA5B"><enum>(2)</enum><header>Technical amendment</header><text>Section 111 of <external-xref legal-doc="public-law" parsable-cite="pl/93–495">Public Law 93–495</external-xref> (<external-xref legal-doc="usc" parsable-cite="usc/12/250">12 U.S.C. 250</external-xref>) is amended by inserting <quote>Federal Housing Finance Board,</quote> after <quote>Director of the Office of Thrift Supervision,</quote>.</text></paragraph></subsection> <subsection id="H0307E26241B1B64478A72897929C26C"><enum>(f)</enum><header>Eligibility to secure advances</header> <paragraph id="HA3F056324128E07DE20B67A0AC344ED"><enum>(1)</enum><header>Section 9</header><text><external-xref legal-doc="act" parsable-cite="FHLBA/9">Section 9</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1429">12 U.S.C. 1429</external-xref>) is amended—</text> <subparagraph id="HEE729BFD4139FA18D8541DB5BF3CF9F"><enum>(A)</enum><text>in the second sentence, by striking <quote>with the approval of the Board</quote>; and</text></subparagraph> <subparagraph id="HE45F0E594C9760F04617A59F1C00CDE"><enum>(B)</enum><text>in the third sentence, by striking <quote>, subject to the approval of the Board,</quote>.</text></subparagraph></paragraph> <paragraph id="H1C24079A4757144BF8EC55BCDE938CA"><enum>(2)</enum><header>Section 10</header><text><external-xref legal-doc="act" parsable-cite="FHLBA/10">Section 10</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430">12 U.S.C. 1430</external-xref>) is amended—</text> <subparagraph id="H4FD2A5F0436E59635D663F869F27D18"><enum>(A)</enum><text>in subsection (c)—</text> <clause id="H467B7C6448DAB5D8ACB27BA8C256197"><enum>(i)</enum><text>in the first sentence, by striking <quote>Board</quote> and inserting <quote>Federal home loan bank</quote>; and</text></clause> <clause id="HA14D16B4476AEF0AF47CD8A5D100A85"><enum>(ii)</enum><text>in the second sentence, by striking <quote>held by</quote> and all that follows before the period;</text></clause></subparagraph> <subparagraph id="H66AE2E6A4F4F796B2E080889CB19000"><enum>(B)</enum><text>in subsection (d)—</text> <clause id="HA1ABFE45412987A22D078881C0DD1A7"><enum>(i)</enum><text>in the first sentence, by striking <quote>and the approval of the Board</quote>; and</text></clause> <clause id="HE9DE4F0443DA112684DD39976EFA600"><enum>(ii)</enum><text>by striking <quote>Subject to the approval of the Board, any</quote> and inserting <quote>Any</quote>; and</text></clause></subparagraph> <subparagraph id="H8807408242E3C32EE193A0A44EF5DF5"><enum>(C)</enum><text>in subsection (j)(1)—</text> <clause id="HCB841C094469788442143D863B34BAE"><enum>(i)</enum><text>by striking <quote>to subsidize the interest rate on advances</quote> and inserting <quote>to provide subsidies, including subsidized interest rates on advances</quote>;</text></clause> <clause id="HC1280F3241522B4783F696A4A8070D8"><enum>(ii)</enum><text>by striking <quote>Pursuant</quote> and inserting the following:</text> <quoted-block id="HEFC7E1DA44AE251FF8654DB46954BA4"> <subparagraph id="HFD06BAC74797A7BF78BDF1A12688FB1"><enum>(A)</enum><header>Establishment</header><text>Pursuant</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></clause> <clause id="H96BACDF94C2887E9C5E223AC3CD420C"><enum>(iii)</enum><text>by adding at the end the following new subparagraph:</text> <quoted-block id="H999361364B39F0E44599778BC2DD166"> <subparagraph id="HCFBE0D72470F11AD389D4BBAF4531EC"><enum>(B)</enum><header>Nondelegation of approval authority</header><text>Subject to such regulations as the Finance Board may prescribe, the board of directors of each Federal home loan bank may approve or disapprove requests from members for Affordable Housing Program subsidies, and may not delegate such authority.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph></paragraph></subsection> <subsection id="HDE63A3A845E045CFF9C313AB3BE2035"><enum>(g)</enum><header>Section 16</header><text>Section 16(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1436(a)">12 U.S.C. 1436(a)</external-xref>) is amended—</text> <paragraph id="H6D8D97A4456BC88FDC496189F2B29D6"><enum>(1)</enum><text>in the third sentence—</text> <subparagraph id="H1E13112443DBDBBD5B03CEA3DF8C684"><enum>(A)</enum><text>by striking <quote>net earnings</quote> and inserting <quote>previously retained earnings or current net earnings</quote>; and</text></subparagraph> <subparagraph id="H6388CFA344C4C402AD680781BCFF5FA"><enum>(B)</enum><text>by striking <quote>, and then only with the approval of the Federal Housing Finance Board</quote>; and</text></subparagraph></paragraph> <paragraph id="H8F0B0AF24963E212327B55B14EE6EBD"><enum>(2)</enum><text>by striking the fourth sentence.</text></paragraph></subsection> <subsection id="H84DBD77A43199DC1224D65A9E728CBD"><enum>(h)</enum><header>Section 18</header><text>Section 18(b) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1438(b)">12 U.S.C. 1438(b)</external-xref>) is amended by striking paragraph (4).</text></subsection></section> <section id="H8D7C4A554897F701C82FD9B87843A6A"><enum>167.</enum><header>Resolution Funding Corporation</header> <subsection id="H0BA071C2424E6DBBF62369A0B445F6F"><enum>(a)</enum><header>In general</header><text>Section 21B(f)(2)(C) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1441b(f)(2)(C)">12 U.S.C. 1441b(f)(2)(C)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Home Loan Bank Act" id="H25075B38423958DD14B1678043E2F34"> <subparagraph id="H94B829AA4BAEBBDD03D7C1A394D8F1C"><enum>(C)</enum><header>Payments by Federal home loan banks</header> <clause id="H5A6C149A43387FC50EC744A6C5C3B43"><enum>(i)</enum><header>In general</header><text>To the extent that the amounts available pursuant to subparagraphs (A) and (B) are insufficient to cover the amount of interest payments, each Federal home loan bank shall pay to the Funding Corporation in each calendar year, 20.75 percent of the net earnings of that bank (after deducting expenses relating to section 10(j) and operating expenses).</text></clause> <clause id="H8AFF961046B4EE95023D7D9DEF94CEB"><enum>(ii)</enum><header>Annual determination</header><text>The Board annually shall determine the extent to which the value of the aggregate amounts paid by the Federal home loan banks exceeds or falls short of the value of an annuity of $300,000,000 per year that commences on the issuance date and ends on the final scheduled maturity date of the obligations, and shall select appropriate present value factors for making such determinations.</text></clause> <clause id="H05E114EF46E4EB3C7495C4A93BC8B44"><enum>(iii)</enum><header>Payment term alterations</header><text>The Board shall extend or shorten the term of the payment obligations of a Federal home loan bank under this subparagraph as necessary to ensure that the value of all payments made by the banks is equivalent to the value of an annuity referred to in clause (ii).</text></clause> <clause id="H7D988C7B4DD49FE9D9095AB46E57ACF"><enum>(iv)</enum><header>Term beyond maturity</header><text>If the Board extends the term of payments beyond the final scheduled maturity date for the obligations, each Federal home loan bank shall continue to pay 20.75 percent of its net earnings (after deducting expenses relating to section 10(j) and operating expenses) to the Treasury of the United States until the value of all such payments by the Federal home loan banks is equivalent to the value of an annuity referred to in clause (ii). In the final year in which the Federal home loan banks are required to make any payment to the Treasury under this subparagraph, if the dollar amount represented by 20.75 percent of the net earnings of the Federal home loan banks exceeds the remaining obligation of the banks to the Treasury, the Finance Board shall reduce the percentage pro rata to a level sufficient to pay the remaining obligation.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HA5B825894E1CB590746E198DEEA5723"><enum>(b)</enum><header>Effective date</header><text>The amendment made by subsection (a) shall become effective on January 1, 1999. Payments made by a Federal home loan bank before that effective date shall be counted toward the total obligation of that bank under section 21B(f)(2)(C) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name>, as amended by this section.</text></subsection></section></subtitle> <subtitle id="H9D87E7044E2307C831D040ADD16821D"><enum>H</enum><header>Direct activities of banks</header> <section id="H775CA71E4921DFA02BBB5099B6CAA1F"><enum>181.</enum><header>Authority of national banks to underwrite certain municipal bonds</header><text display-inline="no-display-inline">The paragraph designated the Seventh of section 5136 of the Revised Statutes of the United States (<external-xref legal-doc="usc" parsable-cite="usc/12/24(7)">12 U.S.C. 24(7)</external-xref>) is amended by adding at the end the following new sentence: <quote>In addition to the provisions in this paragraph for dealing in, underwriting or purchasing securities, the limitations and restrictions contained in this paragraph as to dealing in, underwriting, and purchasing investment securities for the national bank’s own account shall not apply to obligations (including limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of section 142(b)(1) of the Internal Revenue Code of 1986) issued by or on behalf of any state or political subdivision of a state, including any municipal corporate instrumentality of 1 or more states, or any public agency or authority of any state or political subdivision of a state, if the national banking association is well capitalized (as defined in <external-xref legal-doc="act" parsable-cite="FDIA/38">section 38</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>).</quote>.</text></section></subtitle> <subtitle id="HA1DBA7594A566D080EDC2F9139EDDCF"><enum>I</enum><header>Deposit insurance funds</header> <section id="HC7F4F0854944F599277950A5843FCB7"><enum>186.</enum><header>Study of safety and soundness of funds</header> <subsection id="HC80FBD5D46A755CAEB69789E82CDD3D"><enum>(a)</enum><header>Study required</header><text>The Board of Directors of the Federal Deposit Insurance Corporation shall conduct a study of the following issues with regard to the Bank Insurance Fund and the Savings Association Insurance Fund:</text> <paragraph id="H4301158D4C7623165853DE809DB15BF"><enum>(1)</enum><header>Safety and soundness</header><text>The safety and soundness of the funds and the adequacy of the reserve requirements applicable to the funds in light of—</text> <subparagraph id="H12D557434E186DBB2054AEB3B96E701"><enum>(A)</enum><text>the size of the insured depository institutions which are resulting from mergers and consolidations since the effective date of the <act-name parsable-cite="RNIBBEA">Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994</act-name>; and</text></subparagraph> <subparagraph id="HF8A1CE714135096AB4462E89EE7FF6E"><enum>(B)</enum><text>the affiliation of insured depository institutions with other financial institutions pursuant to this Act and the amendments made by this Act.</text></subparagraph></paragraph> <paragraph id="HDA8A69564E0AF7EDEB1C3AB521B2C17"><enum>(2)</enum><header>Concentration levels</header><text>The concentration levels of the funds, taking into account the number of members of each fund and the geographic distribution of such members, and the extent to which either fund is exposed to higher risks due to a regional concentration of members or an insufficient membership base relative to the size of member institutions.</text></paragraph> <paragraph id="H0F4613F747CEAB5233148F8E6856C1F"><enum>(3)</enum><header>Merger issues</header><text>Issues relating to the planned merger of the funds, including the cost of merging the funds and the manner in which such costs will be distributed among the members of the respective funds.</text></paragraph></subsection> <subsection id="H3DC2E3F64E4D1F9E09DD06BBDC8D85C"><enum>(b)</enum><header>Report required</header> <paragraph id="H42047A88411FE9AA4BD043BBB4EEA87"><enum>(1)</enum><header>In general</header><text>Before the end of the 9-month period beginning on the date of the enactment of this Act, the Board of Directors of the Federal Deposit Insurance Corporation shall submit a report to the Congress on the study conducted pursuant to subsection (a).</text></paragraph> <paragraph id="H5D9007C84D7B383B45C699A46F07FD1"><enum>(2)</enum><header>Contents of report</header><text>The report shall include—</text> <subparagraph id="HB684BBEF489A5689023B0A94B08EDDF"><enum>(A)</enum><text>detailed findings of the Board of Directors with regard to the issues described in subsection (a);</text></subparagraph> <subparagraph id="H3D2BC07B4A130094608218A875B472F"><enum>(B)</enum><text>a description of the plans developed by the Board of Directors for merging the Bank Insurance Fund and the Savings Association Insurance Fund, including an estimate of the amount of the cost of such merger which would be borne by Savings Association Insurance Fund members; and</text></subparagraph> <subparagraph id="H68AD60CB4B5BD8B955EA1EAB89E5C2C"><enum>(C)</enum><text>such recommendations for legislative and administrative action as the Board of Directors determines to be necessary or appropriate to preserve the safety and soundness of the deposit insurance funds, reduce the risks to such funds, provide for an efficient merger of such funds, and for other purposes.</text></subparagraph></paragraph></subsection> <subsection id="H3DA46D1B481A57C5CA6F8097CC074DF"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="H82D617AE4297BFCDEDC68292817E8BB"><enum>(1)</enum><header>Insured depository institution</header><text>The term <term>insured depository institution</term> has the same meaning as in section 3(c) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph> <paragraph id="HEF55929947A132DED0B8A8B7F6D41BD"><enum>(2)</enum><header>BIF and SAIF members</header><text>The terms <term>Bank Insurance Fund member</term> and <term>Savings Association Insurance Fund member</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="FDIA/7">section 7</external-xref>(<italic>l</italic>) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph></subsection></section> <section id="H664F51A4466794D25D68D9AE50ED69E"><enum>187.</enum><header>Elimination of SAIF and DIF special reserves</header> <subsection id="H99541D964F5FD1B29BC44BBBB9BED44"><enum>(a)</enum><header>SAIF special reserves</header><text>Section 11(a)(6) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1821(a)(6)">12 U.S.C. 1821(a)(6)</external-xref>) is amended by striking subparagraph (L).</text></subsection> <subsection id="H518FAD2246C4CDEA688DDC8A132872E"><enum>(b)</enum><header>DIF special reserves</header><text><external-xref legal-doc="act" parsable-cite="DIFA96/2704">Section 2704</external-xref> of the <act-name parsable-cite="DIFA96">Deposit Insurance Funds Act of 1996</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1821 note">12 U.S.C. 1821 note</external-xref>) is amended—</text> <paragraph id="H194F28254E548E0B442D6BA5E1C4988"><enum>(1)</enum><text>by striking subsection (b); and</text></paragraph> <paragraph id="H5FC895224EDA41F41FF231B8C7052B1"><enum>(2)</enum><text>in subsection (d)—</text> <subparagraph id="HFCE4187B48AC071928F786A3AF80391"><enum>(A)</enum><text>by striking paragraph (4);</text></subparagraph> <subparagraph id="HF27AC07B4865A92FFB4B3186DF5500A"><enum>(B)</enum><text>in paragraph (6)(C)(i), by striking <quote>(6) and (7)</quote> and inserting <quote>(5), (6), and (7)</quote>; and</text></subparagraph> <subparagraph id="H9CB38F3E4561A044FF051FBBECFC92B"><enum>(C)</enum><text>in paragraph (6)(C), by striking clause (ii) and inserting the following:</text> <quoted-block id="HC42CC79A4C587588D38D699F555C6BB"> <clause id="HAD84871C4267CE0DBD4ECAAEA113468"><enum>(ii)</enum><text>by redesignating paragraph (8) as paragraph (5).</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection></section></subtitle> <subtitle id="H4BC9CA114F67066BE192988C4143BD7"><enum>J</enum><header>Effective date of title</header> <section id="H6D07FF81436798128609DCA4F428F20"><enum>191.</enum><header>Effective date</header><text display-inline="no-display-inline">Except with regard to any subtitle or other provision of this title for which a specific effective date is provided, this title and the amendments made by this title shall take effect at the end of the 270-day period beginning on the date of the enactment of this Act.</text></section></subtitle>

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Header missing closing period - Conforming Amendments Relating to Members Which Are Not Qualified Thrift Lenders_ Missing open quotes for level in quoted block No match found for toc-entry (Section 1 Used) - Sec. 120. Repeal of savings bank provisions in the Bank Holding Company Act of 1956

Short title; purposes; table of contents

(a)

Short title

This Act may be cited as the

&short-title1;

. (b)

Purposes

The purposes of this Act are as follows: (1)To enhance competition in the financial services industry, in order to foster innovation and efficiency. (2)To ensure the continued safety and soundness of depository institutions. (3)To provide necessary and appropriate protections for investors and ensure fair and honest markets in the delivery of financial services. (4)To avoid duplicative, potentially conflicting, and overly burdensome regulatory requirements through the creation of a regulatory framework for financial holding companies that respects the divergent requirements of each of the component businesses of the holding company, and that is based upon principles of strong functional regulation and enhanced regulatory coordination. (5)To reduce and, to the maximum extent practicable, to eliminate the legal barriers preventing affiliation among depository institutions, securities firms, insurance companies, and other financial service providers and to provide a prudential framework for achieving that result. (6)To enhance the availability of financial services to citizens of all economic circumstances and in all geographic areas. (7)To enhance the competitiveness of United States financial service providers internationally. (8)To ensure compliance by depository institutions with the provisions of the Community Reinvestment Act of 1977 and enhance the ability of depository institutions to meet the capital and credit needs of all citizens and communities, including underserved communities and populations. (c)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; purposes; table of contents

Title I—Facilitating affiliation among securities firms, insurance companies, and depository institutions

Subtitle A—Affiliations

Sec. 101. Glass-Steagall Act reformed

Sec. 102. Activity restrictions applicable to bank holding companies which are not financial holding companies

Sec. 103. Financial holding companies

Sec. 104. Operation of State law

Sec. 105. Mutual bank holding companies authorized

Sec. 106. Prohibition on deposit production offices

Sec. 107. Clarification of branch closure requirements

Sec. 108. Amendments relating to limited purpose banks

Sec. 109. Reports on ongoing FTC study of consumer privacy issues

Sec. 110. GAO study of economic impact on community banks and other small financial institutions

Subtitle B—Streamlining supervision of financial holding companies

Sec. 111. Streamlining financial holding company supervision

Sec. 112. Elimination of application requirement for financial holding companies

Sec. 113. Authority of State insurance regulator and Securities and Exchange Commission

Sec. 114. Prudential safeguards

Sec. 115. Examination of investment companies

Sec. 116. Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board

Sec. 117. Interagency consultation

Sec. 118. Equivalent regulation and supervision

Sec. 119. Prohibition on FDIC assistance to affiliates and subsidiaries

Sec. 120. Repeal of savings bank provisions in the Bank Holding Company Act of 1956

Subtitle C—Subsidiaries of national banks

Sec. 121. Permissible activities for subsidiaries of national banks

Sec. 122. Misrepresentations regarding depository institution liability for obligations of affiliates

Sec. 123. Repeal of stock loan limit in Federal Reserve Act

Subtitle D—Wholesale financial holding companies; wholesale financial institutions

Chapter 1—Wholesale financial holding companies

Sec. 131. Wholesale financial holding companies established

Sec. 132. Authorization to release reports

Sec. 133. Conforming amendments

Chapter 2—Wholesale financial institutions

Sec. 136. Wholesale financial institutions

Subtitle E—Preservation of FTC authority

Sec. 141. Amendment to the Bank Holding Company Act of 1956 to modify notification and post-approval waiting period for section 3 transactions

Sec. 142. Interagency data sharing

Sec. 143. Clarification of status of subsidiaries and affiliates

Sec. 144. Annual GAO report

Subtitle F—Applying the principles of national treatment and equality of competitive opportunity to foreign banks and foreign financial institutions

Sec. 151. Applying the principles of national treatment and equality of competitive opportunity to foreign banks that are financial holding companies

Sec. 152. Applying the principles of national treatment and equality of competitive opportunity to foreign banks and foreign financial institutions that are wholesale financial institutions

Sec. 153. Representative offices

Subtitle G—Federal Home Loan Bank System modernization

Sec. 161. Short title

Sec. 162. Definitions

Sec. 163. Savings association membership

Sec. 164. Advances to members; collateral

Sec. 165. Eligibility criteria

Sec. 166. Management of banks

Sec. 167. Resolution Funding Corporation

Subtitle H—Direct activities of banks

Sec. 181. Authority of national banks to underwrite certain municipal bonds

Subtitle I—Deposit insurance funds

Sec. 186. Study of safety and soundness of funds

Sec. 187. Elimination of SAIF and DIF special reserves

Subtitle J—Effective date of title

Sec. 191. Effective date

Title II—Functional regulation

Subtitle A—Brokers and dealers

Sec. 201. Definition of broker

Sec. 202. Definition of dealer

Sec. 203. Registration for sales of private securities offerings

Sec. 204. Sales practices and complaint procedures

Sec. 205. Information sharing

Sec. 206. Definition and treatment of banking products

Sec. 207. Derivative instrument and qualified investor defined

Sec. 208. Government securities defined

Sec. 209. Effective date

Sec. 210. Rule of construction

Subtitle B—Bank Investment Company Activities

Sec. 211. Custody of investment company assets by affiliated bank

Sec. 212. Lending to an affiliated investment company

Sec. 213. Independent directors

Sec. 214. Additional SEC disclosure authority

Sec. 215. Definition of broker under the Investment Company Act of 1940

Sec. 216. Definition of dealer under the Investment Company Act of 1940

Sec. 217. Removal of the exclusion from the definition of investment adviser for banks that advise investment companies

Sec. 218. Definition of broker under the Investment Advisers Act of 1940

Sec. 219. Definition of dealer under the Investment Advisers Act of 1940

Sec. 220. Interagency consultation

Sec. 221. Treatment of bank common trust funds

Sec. 222. Investment advisers prohibited from having controlling interest in registered investment company

Sec. 223. Conforming change in definition

Sec. 224. Conforming amendment

Sec. 225. Effective date

Subtitle C—Securities and Exchange Commission supervision of investment bank holding companies

Sec. 231. Supervision of investment bank holding companies by the Securities and Exchange Commission

Subtitle D—Studies

Sec. 241. Study of methods to inform investors and consumers of uninsured products

Sec. 242. Study of limitation on fees associated with acquiring financial products

Title III—Insurance

Subtitle A—State regulation of insurance

Sec. 301. State regulation of the business of insurance

Sec. 302. Mandatory insurance licensing requirements

Sec. 303. Functional regulation of insurance

Sec. 304. Insurance underwriting in national banks

Sec. 305. Title insurance activities of national banks and their affiliates

Sec. 306. Expedited and equalized dispute resolution for Federal regulators

Sec. 307. Consumer protection regulations

Sec. 308. Certain State affiliation laws preempted for insurance companies and affiliates

Sec. 309. Publication of preemption of State laws

Subtitle B—Redomestication of mutual insurers

Sec. 311. General application

Sec. 312. Redomestication of mutual insurers

Sec. 313. Effect on State laws restricting redomestication

Sec. 314. Other provisions

Sec. 315. Definitions

Sec. 316. Effective date

Subtitle C—National Association of Registered Agents and Brokers

Sec. 321. State flexibility in multistate licensing reforms

Sec. 322. National Association of Registered Agents and Brokers

Sec. 323. Purpose

Sec. 324. Relationship to the Federal Government

Sec. 325. Membership

Sec. 326. Board of Directors

Sec. 327. Officers

Sec. 328. Bylaws, rules, and disciplinary action

Sec. 329. Assessments

Sec. 330. Functions of the NAIC

Sec. 331. Liability of the Association and the directors, officers, and employees of the Association

Sec. 332. Elimination of NAIC oversight

Sec. 333. Relationship to State law

Sec. 334. Coordination with other regulators

Sec. 335. Judicial review

Sec. 336. Definitions

Title IV—Unitary savings and loan holding companies

Sec. 401. Prevention of creation of new savings and loan holding companies with commercial affiliates

Sec. 402. Retention of Federal in name of converted Federal savings association

<enum>I</enum><header>Facilitating affiliation among securities firms, insurance companies, and depository institutions</header> <subtitle id="HE1C6EE4F4281E8DBC0F3BC8BFCF37F9"><enum>A</enum><header>Affiliations</header> <section id="H7D92F166491D2A34408ACABD38BF4F1"><enum>101.</enum><header><act-name parsable-cite="GSA">Glass-Steagall Act</act-name> reformed</header> <subsection id="HE24705B84435F84CC4E400AFFB879CB"><enum>(a)</enum><header>Section <enum-in-header>20</enum-in-header> repealed</header><text><external-xref legal-doc="act" parsable-cite="BA33/20">Section 20</external-xref> of the <act-name parsable-cite="BA33">Banking Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/377">12 U.S.C. 377</external-xref>) (commonly referred to as the <quote><act-name parsable-cite="GSA">Glass-Steagall Act</act-name></quote>) is repealed.</text></subsection> <subsection id="H693CFBB341D16487F6179DAD53E7E06"><enum>(b)</enum><header>Section <enum-in-header>32</enum-in-header> repealed</header><text><external-xref legal-doc="act" parsable-cite="BA33/32">Section 32</external-xref> of the <act-name parsable-cite="BA33">Banking Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/78">12 U.S.C. 78</external-xref>) is repealed.</text></subsection></section> <section id="H278CA24B4524A2A43CD5B18FE7D5E86"><enum>102.</enum><header>Activity restrictions applicable to bank holding companies which are not financial holding companies</header> <subsection id="H72BC704346D599ED8E4A718D51E1D04"><enum>(a)</enum><header>In general</header><text>Section 4(c)(8) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1843(c)(8)">12 U.S.C. 1843(c)(8)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HC1B4AD6C44A2884D5C8EC68B5F74B6A"> <paragraph id="H45E80B2B426536C93BF05E82B00A5C3"><enum>(8)</enum><text>shares of any company the activities of which had been determined by the Board by regulation under this paragraph as of the day before the date of the enactment of the &short-title1;, to be so closely related to banking as to be a proper incident thereto (subject to such terms and conditions contained in such regulation, unless modified by the Board);</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H7F6A4AFE42127F07501390AED54D67C"><enum>(b)</enum><header>Conforming changes to other statutes</header> <paragraph id="HFDBA563F4FE9F8A51433599D7CFE771"><enum>(1)</enum><header>Amendment to the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name></header><text><external-xref legal-doc="act" parsable-cite="BHCAA70/105">Section 105</external-xref> of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1850">12 U.S.C. 1850</external-xref>) is amended by striking <quote>, to engage directly or indirectly in a nonbanking activity pursuant to section 4 of such Act,</quote>.</text></paragraph> <paragraph id="H86B3DA8B411E4BBC9D320C958E60B67"><enum>(2)</enum><header>Amendment to the <act-name parsable-cite="BSCA">Bank Service Company Act</act-name></header><text>Section 4(f) of the <act-name parsable-cite="BSCA">Bank Service Company Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1864(f)">12 U.S.C. 1864(f)</external-xref>) is amended by striking the period and adding at the end the following: <quote>as of the day before the date of enactment of the &short-title1;.</quote>.</text></paragraph></subsection></section> <section id="HC4B0070742B7F1CCD6E19ABFA3E4D3E"><enum>103.</enum><header>Financial holding companies</header><text display-inline="no-display-inline">The <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> is amended by inserting after section 5 (<external-xref legal-doc="usc" parsable-cite="usc/12/1844">12 U.S.C. 1844</external-xref>) the following new section:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H55012F604458B0CC3380628C00442BE"> <section id="HB88E2D7E47AB9DED1A89E480E5911D4"><enum>6.</enum><header>Financial holding companies</header> <subsection id="H41D2304A41562C655DC62BA27BB468D"><enum>(a)</enum><header>Financial holding company defined</header><text>For purposes of this section, the term <term>financial holding company</term> means a bank holding company which meets the requirements of subsection (b).</text></subsection> <subsection id="HD0D4947E4D8AA5C94AF22697B7C794C"><enum>(b)</enum><header>Eligibility requirements for financial holding companies</header> <paragraph id="H023867DC4E691154BB595798F891327"><enum>(1)</enum><header>In general</header><text>No bank holding company may engage in any activity or directly or indirectly acquire or retain shares of any company under this section unless the bank holding company meets the following requirements:</text> <subparagraph id="H9204F3604A384566C23A2C9F1BC24CD"><enum>(A)</enum><text>All of the subsidiary depository institutions of the bank holding company are well capitalized.</text></subparagraph> <subparagraph id="HE096BCF8428414C64EB755A9F830071"><enum>(B)</enum><text>All of the subsidiary depository institutions of the bank holding company are well managed.</text></subparagraph> <subparagraph id="H5869E255498EC6D8F3827EA6C72779F"><enum>(C)</enum><text>The company has filed with the Board a declaration that the company elects to be a financial holding company and certifying that the company meets the requirements of subparagraphs (A) and (B) and paragraph (2).</text></subparagraph></paragraph> <paragraph id="HA8434B164F77578F10ED54B47EDD2DB"><enum>(2)</enum><header>Community needs requirement</header><text>No bank holding company may become a financial holding company unless all of the subsidiary depository institutions of the bank holding company have achieved a rating of <quote>satisfactory record of meeting community credit needs</quote>, or better, at the most recent examination of each such institution under the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></paragraph> <paragraph id="H4FED2FA540F9EDBC0C9AEDBC486C6CC"><enum>(3)</enum><header>Foreign banks and companies</header><text>For purposes of paragraph (1), the Board shall establish and apply comparable capital and other operating standards to a foreign bank that operates a branch or agency or owns or controls a bank or commercial lending company in the United States, and any company that owns or controls such foreign bank, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></paragraph></subsection> <subsection id="H7670AF2546FB00F813383E82F898FC7"><enum>(c)</enum><header>Engaging in activities that are financial in nature</header> <paragraph id="HA6A30E8E4EA97BFB47F6C8ADF24D8A0"><enum>(1)</enum><header>Financial activities</header> <subparagraph id="H3DEE37774CDBB65D2EDD659B5C539EB"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a financial holding company and a wholesale financial holding company may engage in any activity, and acquire and retain the shares of any company engaged in any activity, that the Board has determined (by regulation or order) to be financial in nature or incidental to such financial activities.</text></subparagraph> <subparagraph id="HE320494A4ECE150DB9EE099A55FA1C8"><enum>(B)</enum><header>Coordination between the Board and the department of the Treasury</header> <clause id="HCE5E3A4847454D65D504D1AAB5BC369"><enum>(i)</enum><header>Proposals raised before the Board</header> <subclause id="H264CE8274377AC2DDB0976B8F5A4527"><enum>(I)</enum><header>Consultation</header><text>The Board shall notify the Secretary of the Treasury of, and consult with the Secretary of the Treasury concerning, any request, proposal, or application under this subsection for a determination of whether an activity is financial in nature or incidental to such a financial activity.</text></subclause> <subclause id="HD3F2B8D54539EF79FA366DB24E5EAC7"><enum>(II)</enum><header>Treasury view</header><text>The Board shall not determine that any activity is financial in nature or incidental to a financial activity under this subsection if the Secretary of the Treasury notifies the Board in writing, not later than 30 days after the date of receipt of the notice described in subclause (I) (or such longer period as the Board determines to be appropriate in light of the circumstances) that the Secretary of the Treasury believes that the activity is not financial in nature or incidental to a financial activity.</text></subclause></clause> <clause id="HB7E7406E4FF94799E2E311B661DFA39"><enum>(ii)</enum><header>Proposals raised by the Treasury</header> <subclause id="H85C0D2384C5A20EB72BA399645BD092"><enum>(I)</enum><header>Treasury recommendation</header><text>The Secretary of the Treasury may, at any time, recommend in writing that the Board find an activity to be financial in nature or incidental to a financial activity.</text></subclause> <subclause id="H40D7EFB84D0D19DECDD43AB06499E23"><enum>(II)</enum><header>Time period for Board action</header><text>Not later than 30 days after the date of receipt of a written recommendation from the Secretary of the Treasury under subclause (I) (or such longer period as the Secretary of the Treasury and the Board determine to be appropriate in light of the circumstances), the Board shall determine whether to initiate a public rulemaking proposing that the subject recommended activity be found to be financial in nature or incidental to a financial activity under this subsection, and shall notify the Secretary of the Treasury in writing of the determination of the Board and, in the event that the Board determines not to seek public comment on the proposal, the reasons for that determination.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HDDF3A6D8483C1C09B3FA5B9EA0061E9"><enum>(2)</enum><header>Factors to be considered</header><text>In determining whether an activity is financial in nature or incidental to financial activities, the Board shall take into account—</text> <subparagraph id="H8931DC7F445DF9B2632178A8C6DB08B"><enum>(A)</enum><text>the purposes of this Act and the &short-title1;;</text></subparagraph> <subparagraph id="HEFB7DD174F4DEE9043C04687DF2AEEA"><enum>(B)</enum><text>changes or reasonably expected changes in the marketplace in which bank holding companies compete;</text></subparagraph> <subparagraph id="H39D151544EAE0573CF296FB1A7B3495"><enum>(C)</enum><text>changes or reasonably expected changes in the technology for delivering financial services; and</text></subparagraph> <subparagraph id="HC94848404F7314E128A5268C468643F"><enum>(D)</enum><text>whether such activity is necessary or appropriate to allow a bank holding company and the affiliates of a bank holding company to—</text> <clause id="H0AACE24B4BFED858094A46A3DBABC00"><enum>(i)</enum><text>compete effectively with any company seeking to provide financial services in the United States;</text></clause> <clause id="H6B9FCF1249EEE70D42502EBF67E689D"><enum>(ii)</enum><text>use any available or emerging technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions, in providing financial services; and</text></clause> <clause id="H9B102CF747C44224E25A4189EDB63A7"><enum>(iii)</enum><text>offer customers any available or emerging technological means for using financial services.</text></clause></subparagraph></paragraph> <paragraph id="H2564A6A74C80C27FA54758B455B894C"><enum>(3)</enum><header>Activities that are financial in nature</header><text>The following activities shall be considered to be financial in nature:</text> <subparagraph id="HD371EBFA4E0C7FA248DAEA94BB45100"><enum>(A)</enum><text>Lending, exchanging, transferring, investing for others, or safeguarding money or securities.</text></subparagraph> <subparagraph id="HE281D804433BBEDE53784ABCAC27404"><enum>(B)</enum><text>Insuring, guaranteeing, or indemnifying against loss, harm, damage, illness, disability, or death, or providing and issuing annuities, and acting as principal, agent, or broker for purposes of the foregoing.</text></subparagraph> <subparagraph id="HAF1803F34053978FD61B78B5E3D7F3C"><enum>(C)</enum><text>Providing financial, investment, or economic advisory services, including advising an investment company (as defined in section 3 of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>).</text></subparagraph> <subparagraph id="H64D430854BB2F6F9A6A67EBED7CDD4F"><enum>(D)</enum><text>Issuing or selling instruments representing interests in pools of assets permissible for a bank to hold directly.</text></subparagraph> <subparagraph id="HD45B7FAE4D74566602B9809D1545D5C"><enum>(E)</enum><text>Underwriting, dealing in, or making a market in securities.</text></subparagraph> <subparagraph id="H38FB87E349A7F4C2D6F50186A6F3B5D"><enum>(F)</enum><text>Engaging in any activity that the Board has determined, by order or regulation that is in effect on the date of enactment of the &short-title1;, to be so closely related to banking or managing or controlling banks as to be a proper incident thereto (subject to the same terms and conditions contained in such order or regulation, unless modified by the Board).</text></subparagraph> <subparagraph id="HB699D8CE4ECE4161285FE78AD6018BC"><enum>(G)</enum><text>Engaging, in the United States, in any activity that—</text> <clause id="HEC85E22D436092E6457573A8251983B"><enum>(i)</enum><text>a bank holding company may engage in outside the United States; and</text></clause> <clause id="H539165104A37DC5A66A60B8C9B17B2F"><enum>(ii)</enum><text>the Board has determined, under regulations issued pursuant to section 4(c)(13) of this Act (as in effect on the day before the date of enactment of the &short-title1;) to be usual in connection with the transaction of banking or other financial operations abroad.</text></clause></subparagraph> <subparagraph id="HEE10CE3644998B7017BE7794986923A"><enum>(H)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text> <clause id="H024D90FA450E17FC3935C7968D5DAC8"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or subsidiary of a depository institution;</text></clause> <clause id="HB18436EE4D58D55AFEF65DAEE5E9D44"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by a securities affiliate or an affiliate thereof as part of a bona fide underwriting or merchant banking activity, including investment activities engaged in for the purpose of appreciation and ultimate resale or disposition of the investment;</text></clause> <clause id="H668932734CD2F3A80469058F4059D01"><enum>(iii)</enum><text>such shares, assets, or ownership interests are held only for such a period of time as will permit the sale or disposition thereof on a reasonable basis consistent with the nature of the activities described in clause (ii); and</text></clause> <clause id="H03F2F7494E04A8BC331A6386ECC1FBA"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not actively participate in the day to day management or operation of such company or entity, except insofar as necessary to achieve the objectives of clause (ii).</text> <subclause indent="up2" id="H553BB03F49B69DE23BE38DA6D131BE3"><enum>(I)</enum><text>Directly or indirectly acquiring or controlling, whether as principal, on behalf of 1 or more entities (including entities, other than a depository institution or subsidiary of a depository institution, that the bank holding company controls) or otherwise, shares, assets, or ownership interests (including without limitation debt or equity securities, partnership interests, trust certificates or other instruments representing ownership) of a company or other entity, whether or not constituting control of such company or entity, engaged in any activity not authorized pursuant to this section if—</text></subclause></clause> <clause id="H7961331E4E581CFA4DEB0596DCBEACA"><enum>(i)</enum><text>the shares, assets, or ownership interests are not acquired or held by a depository institution or a subsidiary of a depository institution;</text></clause> <clause id="HBFDCAA184CDB5EA2E84FCA8170CCF82"><enum>(ii)</enum><text>such shares, assets, or ownership interests are acquired and held by an insurance company that is predominantly engaged in underwriting life, accident and health, or property and casualty insurance (other than credit-related insurance) or providing and issuing annuities;</text></clause> <clause id="H00B210CF435DEB9DF6C2ADABCF0059D"><enum>(iii)</enum><text>such shares, assets, or ownership interests represent an investment made in the ordinary course of business of such insurance company in accordance with relevant State law governing such investments; and</text></clause> <clause id="H8DE0239E4ABB8F7AC83E6694F3E8DEE"><enum>(iv)</enum><text>during the period such shares, assets, or ownership interests are held, the bank holding company does not directly or indirectly participate in the day-to-day management or operation of the company or entity except insofar as necessary to achieve the objectives of clauses (ii) and (iii).</text></clause></subparagraph></paragraph> <paragraph id="HD8E5BFD24141743BC945DA99B8F3FBD"><enum>(4)</enum><header>Actions required</header><text>The Board shall, by regulation or order, define, consistent with the purposes of this Act, the following activities as, and the extent to which such activities are, financial in nature or incidental to activities which are financial in nature:</text> <subparagraph id="HA698F76E46F665C6B23F098A9CF7BF9"><enum>(A)</enum><text>Lending, exchanging, transferring, investing for others, or safeguarding financial assets other than money or securities.</text></subparagraph> <subparagraph id="H6B0A657D4E34EFD944706790B23E99F"><enum>(B)</enum><text>Providing any device or other instrumentality for transferring money or other financial assets.</text></subparagraph> <subparagraph id="HC623CC274C43E37E01546796BBFA0F5"><enum>(C)</enum><text>Arranging, effecting, or facilitating financial transactions for the account of third parties.</text></subparagraph></paragraph> <paragraph id="HA29E81BC4DA476FDAC231093C529771"><enum>(5)</enum><header>Post-consummation notification</header> <subparagraph id="H8D5BEFB44749165303A2D1B730A5C49"><enum>(A)</enum><header>In general</header><text>A financial holding company and a wholesale financial holding company that acquires any company, or commences any activity, pursuant to this subsection shall provide written notice to the Board describing the activity commenced or conducted by the company acquired no later than 30 calendar days after commencing the activity or consummating the acquisition.</text></subparagraph> <subparagraph id="H354A7AC54CD7EC703835BE82D87A407"><enum>(B)</enum><header>Approval not required for certain financial activities</header><text>Except as provided in section 4(j) with regard to the acquisition of a savings association or in paragraph (6) of this subsection, a financial holding company and a wholesale financial holding company may commence any activity, or acquire any company, pursuant to paragraph (3) or any regulation prescribed or order issued under paragraph (4), without prior approval of the Board.</text></subparagraph></paragraph> <paragraph id="HF39A17C7438DBABFC5968097BFC6894"><enum>(6)</enum><header>Notice required for large combinations</header> <subparagraph id="HD2FE3B9A450A959F1C41ECB2E89BCEC"><enum>(A)</enum><header>In general</header><text>No financial holding company or wholesale financial holding company shall directly or indirectly acquire, and no company that becomes a financial holding company or a wholesale financial holding company shall directly or indirectly acquire control of, any company in the United States, including through merger, consolidation, or other type of business combination, that—</text> <clause id="H1421E14E4D47D19DD0B3DA8F47F4310"><enum>(i)</enum><text>is engaged in activities permitted under this subsection or subsection (g); and</text></clause> <clause id="H2D36B62C4779D52DD8D233B8FA2EA72"><enum>(ii)</enum><text>has consolidated total assets in excess of $40,000,000,000,</text></clause><continuation-text continuation-text-level="subparagraph">unless such holding company has provided notice to the Board, not later than 60 days prior to such proposed acquisition or prior to becoming a financial holding company or wholesale financial holding company, and during that time period, or such longer time period not exceeding an additional 60 days, as established by the Board, the Board has not issued a notice disapproving the proposed acquisition or retention.</continuation-text></subparagraph> <subparagraph id="H3D45EFEA456A8DA139DFC798E876A19"><enum>(B)</enum><header>Factors for consideration</header><text>In reviewing any prior notice filed under this paragraph, the Board shall take into consideration—</text> <clause id="H1251A39A4D50156F3E41A986EEE92D3"><enum>(i)</enum><text>whether the company is in compliance with all applicable criteria set forth in subsection (b) and the provisions of subsection (d);</text></clause> <clause id="HED9C69F24B2AA87D23369088651181B"><enum>(ii)</enum><text>whether the proposed combination represents an undue aggregation of resources;</text></clause> <clause id="H9FED63904C713388A035E4A9001EE48"><enum>(iii)</enum><text>whether the proposed combination poses a risk to the deposit insurance system;</text></clause> <clause id="HEB1835334FA0D955FE24BF95847DBAD"><enum>(iv)</enum><text>whether the proposed combination poses a risk to State insurance guaranty funds;</text></clause> <clause id="HD5F87EF342777C99BD6972BEFC4148F"><enum>(v)</enum><text>whether the proposed combination can reasonably be expected to be in the best interests of depositors or policyholders of the respective entities; and</text></clause> <clause id="HBA05D3C84E6351C100E4F696D3843E4"><enum>(vi)</enum><text>whether the proposed transaction can reasonably be expected to produce benefits to the public.</text></clause></subparagraph> <subparagraph id="HDBDD616C4094C20257BDFC9473DB033"><enum>(C)</enum><header>Required information</header><text>The Board may disapprove any prior notice filed under this paragraph if the company submitting such notice neglects, fails, or refuses to furnish to the Board all relevant information required by the Board.</text></subparagraph> <subparagraph id="H2DD05C4D43081192A59738B5C8F82B4"><enum>(D)</enum><header>Solicitation of views of other supervisory agencies</header> <clause id="HFCFE4A574EFAE53778240B81CDFCAC7"><enum>(i)</enum><header>In general</header><text>Upon receiving a prior notice under this paragraph, in order to provide for the submission of their views and recommendations, the Board shall give notice of the proposal to—</text> <subclause id="H18C0D3B743434C024E4329AB5457B63"><enum>(I)</enum><text>the appropriate Federal banking agency of any bank involved;</text></subclause> <subclause id="HECCFF6144807B4BD661B0E9231AD000"><enum>(II)</enum><text>the appropriate functional regulator of any functionally regulated nondepository institution (as defined in section 5(c)(1)(C)) involved; and</text></subclause> <subclause id="H4035D5234916CDB669957382D9B4BA1"><enum>(III)</enum><text>the Secretary of the Treasury, the Department of Justice, and the Federal Trade Commission.</text></subclause></clause> <clause id="H6EC6A2EB4FCF4F9B1C910EA1B06149E"><enum>(ii)</enum><header>Timing</header><text>The views and recommendations of any agency provided notice under this paragraph shall be submitted to the Board not later than 30 calendar days after the date on which notice to the agency was given, unless the Board determines that another shorter time period is appropriate.</text></clause></subparagraph></paragraph></subsection> <subsection id="H3DC7A67348A1BC76749F78A32D8EC34"><enum>(d)</enum><header>Provisions applicable to financial holding companies that fail to meet requirements</header> <paragraph id="HCE82FDC44B0BD24D3D25F8BF596F01B"><enum>(1)</enum><header>In general</header><text>If the Board finds that a financial holding company is not in compliance with the requirements of subparagraph (A) or (B) of subsection (b)(1), the Board shall give notice of such finding to the company.</text></paragraph> <paragraph id="H22ED074940537DDE3F3CEE89F234FDE"><enum>(2)</enum><header>Agreement to correct conditions required</header><text>Not later than 45 days after receipt by a financial holding company of a notice given under paragraph (1) (or such additional period as the Board may permit), the company shall execute an agreement acceptable to the Board to comply with the requirements applicable to a financial holding company.</text></paragraph> <paragraph id="H0CD756E64207AB4A161B37AF10E71D1"><enum>(3)</enum><header>Board May impose limitations</header><text>Until the conditions described in a notice to a financial holding company under paragraph (1) are corrected, the Board may impose such limitations on the conduct or activities of the company or any affiliate of the company as the Board determines to be appropriate under the circumstances.</text></paragraph> <paragraph id="H0D0B3EA24E466EAAC96885A6D8DFD2D"><enum>(4)</enum><header>Failure to correct</header><text>If, after receiving a notice under paragraph (1), a financial holding company does not—</text> <subparagraph id="H4B7B4A7A4BBA11B3D6CA65A060F7E4C"><enum>(A)</enum><text>execute and implement an agreement in accordance with paragraph (2);</text></subparagraph> <subparagraph id="H4A7B44904F5DBEFB6AA909B8CCE8F42"><enum>(B)</enum><text>comply with any limitations imposed under paragraph (3);</text></subparagraph> <subparagraph id="HA171BA0E490BB26AB8FEDA8393F7B26"><enum>(C)</enum><text>in the case of a notice of failure to comply with subsection (b)(1)(A), restore each depository institution subsidiary to well capitalized status before the end of the 180-day period beginning on the date such notice is received by the company (or such other period permitted by the Board); or</text></subparagraph> <subparagraph id="HF574E8F64D3F0836D8EA1E8FD800F6D"><enum>(D)</enum><text>in the case of a notice of failure to comply with subparagraph (B) of subsection (b)(1), restore compliance with any such subparagraph on or before the date on which the next examination of the depository institution subsidiary is completed or by the end of such other period as the Board determines to be appropriate,</text></subparagraph><continuation-text continuation-text-level="paragraph">the Board may require such company, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the Board’s discretion, to divest control of any depository institution subsidiary or, at the election of the financial holding company, instead to cease to engage in any activity conducted by such company or its subsidiaries pursuant to this section.</continuation-text></paragraph> <paragraph id="H21E1D61647FFAB05890559A816CEC7F"><enum>(5)</enum><header>Consultation</header><text>In taking any action under this subsection, the Board shall consult with all relevant Federal and State regulatory agencies.</text></paragraph></subsection> <subsection id="HE4E5B775468D29DDA0163CA7B04716C"><enum>(e)</enum><header>Safeguards for bank subsidiaries</header><text>A financial holding company shall assure that—</text> <paragraph id="HD8F8FEED46295790AF3F2CA5EF99BCD"><enum>(1)</enum><text>the procedures of the holding company for identifying and managing financial and operational risks within the company, and the subsidiaries of such company, adequately protect the subsidiaries of such company which are insured depository institutions from such risks;</text></paragraph> <paragraph id="HC9F737F648528B96688BC99ADA1000F"><enum>(2)</enum><text>the holding company has reasonable policies and procedures to preserve the separate corporate identity and limited liability of such company and the subsidiaries of such company, for the protection of the company’s subsidiary insured depository institutions; and</text></paragraph> <paragraph id="H605F09F641C315A0DFB14B823E14EC4"><enum>(3)</enum><text>the holding company complies with this section.</text></paragraph></subsection> <subsection id="H3EC7714A4201928EF039A988F551157"><enum>(f)</enum><header>Authority to retain limited nonfinancial activities and affiliations</header> <paragraph id="H56CD6805478571E83D43C9AE81C007D"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 4(a), a company that is not a bank holding company or a foreign bank (as defined in section 1(b)(7) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>) and becomes a financial holding company after the date of the enactment of the &short-title1; may continue to engage in any activity and retain direct or indirect ownership or control of shares of a company engaged in any activity if—</text> <subparagraph id="H99C18077479AEB5B606A9980BE5CEAB"><enum>(A)</enum><text>the holding company lawfully was engaged in the activity or held the shares of such company on September 30, 1997;</text></subparagraph> <subparagraph id="H0E7F00CE4A2E22BBD6CD58967FB3F8B"><enum>(B)</enum><text>the holding company is predominantly engaged in financial activities as defined in paragraph (2); and</text></subparagraph> <subparagraph id="HA9E877F7436495FAB09787B7BBDA560"><enum>(C)</enum><text>the company engaged in such activity continues to engage only in the same activities that such company conducted on September 30, 1997, and other activities permissible under this Act.</text></subparagraph></paragraph> <paragraph id="H0AD89C584A6A7ACCDA63EAA76283DFA"><enum>(2)</enum><header>Predominantly financial</header><text>For purposes of this subsection, a company is predominantly engaged in financial activities if the annual gross revenues derived by the holding company and all subsidiaries of the holding company (excluding revenues derived from subsidiary depository institutions), on a consolidated basis, from engaging in activities that are financial in nature or are incidental to activities that are financial in nature under subsection (c) represent at least 85 percent of the consolidated annual gross revenues of the company.</text></paragraph> <paragraph id="H4AA2FD3343C66BB768D76B8E4EA4DE6"><enum>(3)</enum><header>No expansion of grandfathered commercial activities through merger or consolidation</header><text>A financial holding company that engages in activities or holds shares pursuant to this subsection, or a subsidiary of such financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company which is engaged in any activity which the Board has not determined to be financial in nature or incidental to activities that are financial in nature under subsection (c).</text></paragraph> <paragraph id="HE569037844A27156C54F778056E4B80"><enum>(4)</enum><header>Continuing revenue limitation on grandfathered commercial activities</header><text>Notwithstanding any other provision of this subsection, a financial holding company may continue to engage in activities or hold shares in companies pursuant to this subsection only to the extent that the aggregate annual gross revenues derived from all such activities and all such companies does not exceed 15 percent of the consolidated annual gross revenues of the financial holding company (excluding revenues derived from subsidiary depository institutions).</text></paragraph> <paragraph id="H1FDBA22F4597C91B81B9FF81E089E37"><enum>(5)</enum><header>Cross marketing restrictions applicable to commercial activities</header><text>A depository institution controlled by a financial holding company shall not—</text> <subparagraph id="H8AA43E7549828DA4FF61C8B9BEA6906"><enum>(A)</enum><text>offer or market, directly or through any arrangement, any product or service of a company whose activities are conducted or whose shares are owned or controlled by the financial holding company pursuant to this subsection or subparagraph (H) or (I) of subsection (c)(3); or</text></subparagraph> <subparagraph id="H3C77768341A948C1242E5493A762E73"><enum>(B)</enum><text>permit any of its products or services to be offered or marketed, directly or through any arrangement, by or through any company described in subparagraph (A).</text></subparagraph></paragraph> <paragraph id="H6CDBDDA74ADEEDFFD0BD0DA0FD77F9C"><enum>(6)</enum><header>Transactions with nonfinancial affiliates</header><text>An insured depository institution controlled by a financial holding company or wholesale financial holding company may not engage in a covered transaction (as defined by section 23A(b)(7) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>) with any affiliate controlled by the company pursuant to section 10(c), this subsection, or subparagraph (H) or (I) of subsection (c)(3).</text></paragraph> <paragraph id="H808046E24F64A3D41117B4BBAFE450B"><enum>(7)</enum><header>Sunset of grandfather</header><text>A financial holding company engaged in any activity, or retaining direct or indirect ownership or control of shares of a company, pursuant to this subsection, shall terminate such activity and divest ownership or control of the shares of such company before the end of the 10-year period beginning on the date of the enactment of the &short-title1;. The Board may, upon application by a financial holding company, extend such 10-year period by a period not to exceed an additional 5 years if such extension would not be detrimental to the public interest.</text></paragraph></subsection> <subsection id="HD81C8FD445E7F2B303EFD88583F694E"><enum>(g)</enum><header>Developing activities</header><text>A financial holding company and a wholesale financial holding company may engage directly or indirectly, or acquire shares of any company engaged, in any activity that the Board has not determined to be financial in nature or incidental to financial activities under subsection (c) if—</text> <paragraph id="H828008404171C61F07AB0BB457C3EBD"><enum>(1)</enum><text>the holding company reasonably concludes that the activity is financial in nature or incidental to financial activities;</text></paragraph> <paragraph id="H581BDB0B4F795F83547F5FBF06DAD00"><enum>(2)</enum><text>the gross revenues from all activities conducted under this subsection represent less than 5 percent of the consolidated gross revenues of the holding company;</text></paragraph> <paragraph id="H4231235643336E0C7BF93EB7E16377C"><enum>(3)</enum><text>the aggregate total assets of all companies the shares of which are held under this subsection do not exceed 5 percent of the holding company’s consolidated total assets;</text></paragraph> <paragraph id="H71BB9CC048CB801234860D8B8428B00"><enum>(4)</enum><text>the total capital invested in activities conducted under this subsection represents less than 5 percent of the consolidated total capital of the holding company;</text></paragraph> <paragraph id="H6B490BC14781DB82F99A999BD7EFFAF"><enum>(5)</enum><text>the Board has not determined that the activity is not financial in nature or incidental to financial activities under subsection (c);</text></paragraph> <paragraph id="H0FC76D9E429BFE984CA667B23F847BF"><enum>(6)</enum><text>the holding company is not required to provide prior written notice of the transaction to the Board under subsection (c)(6); and</text></paragraph> <paragraph id="H21992F4F429FF7C3A243AC8455D6F05"><enum>(7)</enum><text>the holding company provides written notification to the Board describing the activity commenced or conducted by the company acquired no later than 10 business days after commencing the activity or consummating the acquisition.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H36636F2D4F2EFF5A21A274BEF262E21"><enum>104.</enum><header>Operation of State law</header> <subsection id="H28ED405B404A5C8A2D7F9C98D3A47B0"><enum>(a)</enum><header>Affiliations</header> <paragraph id="H1E3783CA4C0509634FB1799FB7DDC00"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, from being affiliated directly or indirectly or associated with any person or entity, as authorized or permitted by this Act or any other provision of Federal law.</text></paragraph> <paragraph id="HB3FA37394AC1DAC8AA0563837EF0BD5"><enum>(2)</enum><header>Insurance</header><text>With respect to affiliations between insured depository institutions or wholesale financial institutions, or any subsidiary or affiliate thereof, and persons or entities engaged in the business of insurance, paragraph (1) does not prohibit any State from—</text> <subparagraph id="H929FF29148EAEB2897318E98EE6947F"><enum>(A)</enum><text>requiring any person or entity that proposes to acquire control of an entity that is engaged in the business of insurance and domiciled in that State (hereafter in this subparagraph referred to as the <quote>insurer</quote>) to furnish to the insurance regulatory authority of that State, not later than 60 days before the effective date of the proposed acquisition—</text> <clause id="H0974BE0046ED8AB1C95D48BDD2753BD"><enum>(i)</enum><text>the name and address of each person by whom, or on whose behalf, the affiliation referred to in this subparagraph is to be effected (hereafter in this subparagraph referred to as the <quote>acquiring party</quote>);</text></clause> <clause id="H560F99E0449A22ECCDE52D85B15725B"><enum>(ii)</enum><text>if the acquiring party is an individual, his or her principal occupation and all offices and positions held during the 5 years preceding the date of notification, and any conviction of crimes other than minor traffic violations during the 10 years preceding the date of notification;</text></clause> <clause id="H20DE10704C4E9333A55C26B42772BC5"><enum>(iii)</enum><text>if the acquiring party is not an individual—</text> <subclause id="HAE71D3A24D4B78FC7B0B26B479C0374"><enum>(I)</enum><text>a report of the nature of its business operations during the 5 years preceding the date of notification, or for such shorter period as such person and any predecessors thereof shall have been in existence;</text></subclause> <subclause id="H30C10CDB46B9DE3179B0439CBDFCB30"><enum>(II)</enum><text>an informative description of the business intended to be done by the acquiring party and any subsidiary thereof; and</text></subclause> <subclause id="H204DDD15470133D28297B1BBF8D034B"><enum>(III)</enum><text>a list of all individuals who are, or who have been selected to become, directors or executive officers of the acquiring party or who perform, or will perform, functions appropriate to such positions, including, for each such individual, the information required by clause (ii);</text></subclause></clause> <clause id="HF93A41E1431D68A03968F49F2451B7F"><enum>(iv)</enum><text>the source, nature, and amount of the consideration used, or to be used, in effecting the merger or other acquisition of control, a description of any transaction wherein funds were, or are to be, obtained for any such purpose, and the identity of persons furnishing such consideration, except that, if a source of such consideration is a loan made in the lender’s ordinary course of business, the identity of the lender shall remain confidential if the person filing such statement so requests;</text></clause> <clause id="H1B51BADF4F5ADA810423B88DF5071C3"><enum>(v)</enum><text>fully audited financial information as to the earnings and financial condition of each acquiring party for the 5 fiscal years preceding the date of notification of each such acquiring party, or for such lesser period as such acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than 90 days before the date of notification, except that, in the case of an acquiring party that is an insurer actively engaged in the business of insurance, the financial statements of such insurer need not be audited, but such audit may be required if the need therefor is determined by the insurance regulatory authority of the State;</text></clause> <clause id="HC12F5731458DCB72235F2E91E3130BD"><enum>(vi)</enum><text>any plans or proposals that each acquiring party may have to liquidate such insurer, to sell its assets, or to merge or consolidate it with any person or to make any other material change in its business or corporate structure or management;</text></clause> <clause id="HCDBEC00F4DE50310C73A34BDB1D2829"><enum>(vii)</enum><text>the number of shares of any security of the insurer that each acquiring party proposes to acquire, the terms of any offer, request, invitation, agreement, or acquisition, and a statement as to the method by which the fairness of the proposal was arrived at;</text></clause> <clause id="H5917356441101E3E8EDF69B0CF83D3D"><enum>(viii)</enum><text>the amount of each class of any security of the insurer that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;</text></clause> <clause id="H671ABEB24EF2EEAD4E1EB09AEAEBB45"><enum>(ix)</enum><text>a full description of any contracts, arrangements, or understandings with respect to any security of the insurer in which any acquiring party is involved, including transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies, and identification of the persons with whom such contracts, arrangements, or understandings have been entered into;</text></clause> <clause id="HAC609D48454A59B09E737A8731B7A1F"><enum>(x)</enum><text>a description of the purchase of any security of the insurer during the 12-month period preceding the date of notification by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid, or agreed to be paid, therefor;</text></clause> <clause id="HC92206BE424B6071D847FAABB79994D"><enum>(xi)</enum><text>a description of any recommendations to purchase any security of the insurer made during the 12-month period preceding the date of notification by any acquiring party or by any person based upon interviews or at the suggestion of such acquiring party;</text></clause> <clause id="HF06358DF4B15AC4BB638688DC397F95"><enum>(xii)</enum><text>copies of all tender offers for, requests or invitations for tenders of, exchange offers for and agreements to acquire or exchange any securities of the insurer and, if distributed, of additional soliciting material relating thereto; and</text></clause> <clause id="H5C2B985F41F3ADAE1E65F98F33704CA"><enum>(xiii)</enum><text>the terms of any agreement, contract, or understanding made with any broker-dealer as to solicitation of securities of the insurer for tender and the amount of any fees, commissions, or other compensation to be paid to broker-dealers with regard thereto;</text></clause></subparagraph> <subparagraph id="H21F3AAE84B45C3F01008BB955BB72BD"><enum>(B)</enum><text>requiring an entity that is acquiring control of an entity that is engaged in the business of insurance and domiciled in that State to maintain or restore the capital requirements of that insurance entity to the level required under the capital regulations of general applicability in that State to avoid the requirement of preparing and filing with the insurance regulatory authority of that State a plan to increase the capital of the entity, except that any determination by the State insurance regulatory authority with respect to such requirement shall be made not later than 60 days after the date of notification under subparagraph (A);</text></subparagraph> <subparagraph id="H4D692D114D972F9FE8D7C58CF9C9D86"><enum>(C)</enum><text>taking actions with respect to the receivership or conservatorship of any insurance company; or</text></subparagraph> <subparagraph id="H4F937FF544719053BFE6348124F2903"><enum>(D)</enum><text>restricting a change in the ownership of stock in an insurance company, or a company formed for the purpose of controlling such insurance company, for a period of not more than 3 years beginning on the date of the conversion of such company from mutual to stock form.</text></subparagraph></paragraph> <paragraph id="H7AD089624BD8D12574AE14B3A5C617A"><enum>(3)</enum><header>Preservation of State antitrust and general corporate laws</header> <subparagraph id="H3A0F8BC7412496AED5BFC38E9800D46"><enum>(A)</enum><header>In general</header><text>Nothing in paragraph (1) shall be construed as affecting State laws, regulations, orders, interpretations, or other actions of general applicability relating to the governance of corporations, partnerships, limited liability companies or other business associations incorporated or formed under the laws of that State or domiciled in that State, or the applicability of the antitrust laws of any State or any State law that is similar to the antitrust laws.</text></subparagraph> <subparagraph id="H9C5C3D4B4866A5EBA6A2D99AD6CB100"><enum>(B)</enum><header>Definition</header><text>The term <term>antitrust laws</term> has the same meaning as in subsection (a) of the first section of the <act-name parsable-cite="CLAY">Clayton Act</act-name>, and includes <external-xref legal-doc="act" parsable-cite="FTCA/5">section 5</external-xref> of the <act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> to the extent that such section 5 relates to unfair methods of competition.</text></subparagraph></paragraph></subsection> <subsection id="H5F86B73142949C20E70BA99BF0F460B"><enum>(b)</enum><header>Activities</header> <paragraph id="HF675D2084438A6D1C73CF0AC545BAA8"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), and except with respect to insurance sales, solicitation, and cross marketing activities, which shall be governed by paragraph (2), no State may, by statute, regulation, order, interpretation, or other action, prevent or restrict an insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other entity or person, in any activity authorized or permitted under this Act.</text></paragraph> <paragraph id="HC4B697C7423B7722EDC2DDAEE189E4D"><enum>(2)</enum><header>Insurance sales</header> <subparagraph id="HC23D10374569F6E9C125CF94E6938AE"><enum>(A)</enum><header>In general</header><text>In accordance with the legal standards for preemption set forth in the decision of the Supreme Court of the United States in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996), no State may, by statute, regulation, order, interpretation, or other action, prevent or significantly interfere with the ability of an insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof, to engage, directly or indirectly, either by itself or in conjunction with a subsidiary, affiliate, or any other party, in any insurance sales, solicitation, or cross-marketing activity.</text></subparagraph> <subparagraph id="HB263613C4B24BB1F370C7F8AF9FFEBE"><enum>(B)</enum><header>Certain State laws preserved</header><text>Notwithstanding subparagraph (A), a State may impose any of the following restrictions, or restrictions which are substantially the same as but no more burdensome or restrictive than those in each of the following clauses:</text> <clause id="HA2D67E9F4CE140A5E182E8A944A126C"><enum>(i)</enum><text>Restrictions prohibiting the rejection of an insurance policy solely because the policy has been issued or underwritten by any person who is not associated with such insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, when such insurance is required in connection with a loan or extension of credit.</text></clause> <clause id="H4E332E664B194E578708849A05B175D"><enum>(ii)</enum><text>Restrictions prohibiting a requirement for any debtor, insurer, or insurance agent or broker to pay a separate charge in connection with the handling of insurance that is required in connection with a loan or other extension of credit or the provision of another traditional banking product, unless such charge would be required when the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, is the licensed insurance agent or broker providing the insurance.</text></clause> <clause id="H6710C1544C646CC98A1398BD65A05EF"><enum>(iii)</enum><text>Restrictions prohibiting the use of any advertisement or other insurance promotional material by an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, that would cause a reasonable person to believe mistakenly that—</text> <subclause id="HD3180ACD4B8893FE01DDDBA629E7C54"><enum>(I)</enum><text>a State or the Federal Government is responsible for the insurance sales activities of, or stands behind the credit of, the institution, affiliate, or subsidiary; or</text></subclause> <subclause id="H5638AF3C488C0DAEBFB0D9A179AE3DE"><enum>(II)</enum><text>a State, or the Federal Government guarantees any returns on insurance products, or is a source of payment on any insurance obligation of or sold by the institution, affiliate, or subsidiary;</text></subclause></clause> <clause id="HB0DC0CB14A246FDC7A9B59AE709DA3E"><enum>(iv)</enum><text>Restrictions prohibiting the payment or receipt of any commission or brokerage fee or other valuable consideration for services as an insurance agent or broker to or by any person, unless such person holds a valid State license regarding the applicable class of insurance at the time at which the services are performed, except that, in this clause, the term <term>services as an insurance agent or broker</term> does not include a referral by an unlicensed person of a customer or potential customer to a licensed insurance agent or broker that does not include a discussion of specific insurance policy terms and conditions.</text></clause> <clause id="H54D4B821481129DCE3B2D48BFEC8DCB"><enum>(v)</enum><text>Restrictions prohibiting any compensation paid to or received by any individual who is not licensed to sell insurance, for the referral of a customer that seeks to purchase, or seeks an opinion or advice on, any insurance product to a person that sells or provides opinions or advice on such product, based on the purchase of insurance by the customer.</text></clause> <clause id="HAD2D72CB47E4F216825C7AB9755F93F"><enum>(vi)</enum><text>Restrictions prohibiting the release of the insurance information of a customer (defined as information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates, and insurance claims of a customer contained in the records of the insured depository institution or wholesale financial institution, or a subsidiary or affiliate thereof) to any person or entity other than an officer, director, employee, agent, subsidiary, or affiliate of an insured depository institution or a wholesale financial institution, for the purpose of soliciting or selling insurance, without the express consent of the customer, other than a provision that prohibits—</text> <subclause id="HC190AAEB4639151CAA31ECAD00EFB52"><enum>(I)</enum><text>a transfer of insurance information to an unaffiliated insurance company, agent, or broker in connection with transferring insurance in force on existing insureds of the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, or in connection with a merger with or acquisition of an unaffiliated insurance company, agent, or broker; or</text></subclause> <subclause id="H7AAE18F74C023CA7207B56A90468C82"><enum>(II)</enum><text>the release of information as otherwise authorized by State or Federal law.</text></subclause></clause> <clause id="HDC0BC62742D079019ECD379800D35DA"><enum>(vii)</enum><text>Restrictions prohibiting the use of health information obtained from the insurance records of a customer for any purpose, other than for its activities as a licensed agent or broker, without the express consent of the customer.</text></clause> <clause id="H8A52652E4E2A1BD6A97BC88A20F3B98"><enum>(viii)</enum><text>Restrictions prohibiting the extension of credit or any product or service that is equivalent to an extension of credit, lease or sale of property of any kind, or furnishing of any services or fixing or varying the consideration for any of the foregoing, on the condition or requirement that the customer obtain insurance from the insured depository institution, wholesale financial institution, a subsidiary or affiliate thereof, or a particular insurer, agent, or broker, other than a prohibition that would prevent any insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof—</text> <subclause id="HA25E6B1B44B3C5D6B817AFA18058EF6"><enum>(I)</enum><text>from engaging in any activity that would not violate <external-xref legal-doc="act" parsable-cite="BHCAA70/106">section 106</external-xref> of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name>, as interpreted by the Board of Governors of the Federal Reserve System; or</text></subclause> <subclause id="H89F991B04C93C34E03591FA7CACFF1F"><enum>(II)</enum><text>from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance, or that insurance is available from the insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof.</text></subclause></clause> <clause id="H66D602B048E1A74032A82EA4A00ED5D"><enum>(ix)</enum><text>Restrictions requiring, when an application by a consumer for a loan or other extension of credit from an insured depository institution or wholesale financial institution is pending, and insurance is offered or sold to the consumer or is required in connection with the loan or extension of credit by the insured depository institution or wholesale financial institution, that a written disclosure be provided to the consumer or prospective customer indicating that his or her choice of an insurance provider will not affect the credit decision or credit terms in any way, except that the insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, may impose reasonable requirements concerning the creditworthiness of the insurance provider and scope of coverage chosen.</text></clause> <clause id="HF5A05CAC4BC5C18B87E117BBE939DB9"><enum>(x)</enum><text>Restrictions requiring clear and conspicuous disclosure, in writing, where practicable, to the customer prior to the sale of any insurance policy that such policy—</text> <subclause id="H14A63EE9443D94DEC97241AACD00B58"><enum>(I)</enum><text>is not a deposit;</text></subclause> <subclause id="H637DFBF4482A605AE8F0A9A6D739153"><enum>(II)</enum><text>is not insured by the Federal Deposit Insurance Corporation;</text></subclause> <subclause id="H17D18FA14D32B1A0517C9DBDA900A6D"><enum>(III)</enum><text>is not guaranteed by the insured depository institution or wholesale financial institution or, if appropriate, its subsidiaries or affiliates or any person soliciting the purchase of or selling insurance on the premises thereof; and</text></subclause> <subclause id="H6FA9BFAF494081A06AA21895AB4EC4C"><enum>(IV)</enum><text>where appropriate, involves investment risk, including potential loss of principal.</text></subclause></clause> <clause id="H2B4A2A95482E39CD25358CAE3BDB7A2"><enum>(xi)</enum><text>Restrictions requiring that, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution, or any subsidiary or affiliate thereof, or any person soliciting the purchase of or selling insurance on the premises thereof, the credit and insurance transactions be completed through separate documents.</text></clause> <clause id="HA62B27114FB32BA3EC8D12809FB3273"><enum>(xii)</enum><text>Restrictions prohibiting, when a customer obtains insurance (other than credit insurance or flood insurance) and credit from an insured depository institution or wholesale financial institution or its subsidiaries or affiliates, or any person soliciting the purchase of or selling insurance on the premises thereof, inclusion of the expense of insurance premiums in the primary credit transaction without the express written consent of the customer.</text></clause> <clause id="HD763A0904E64375A0928DCBCBBB6300"><enum>(xiii)</enum><text>Restrictions requiring maintenance of separate and distinct books and records relating to insurance transactions, including all files relating to and reflecting consumer complaints, and requiring that such insurance books and records be made available to the appropriate State insurance regulator for inspection upon reasonable notice.</text></clause></subparagraph> <subparagraph id="H753CDBCF486B26BD6E17009CF94C83B"><enum>(C)</enum><header>Limitations</header> <clause id="H29F857B144F622818436DCBC17E3713"><enum>(i)</enum><header>OCC deference</header><text>Section 306(e) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H46BF718B40928323A8BB6298C8DAC69"><enum>(ii)</enum><header>Nondiscrimination</header><text>Subsection (c) does not apply with respect to any State statute, regulation, order, interpretation, or other action regarding insurance sales, solicitation, or cross marketing activities described in subparagraph (A) that was issued, adopted, or enacted before September 3, 1998, and that is not described in subparagraph (B).</text></clause> <clause id="H6E5ADC1C4741D8C4224C62955F5F68A"><enum>(iii)</enum><header>Construction</header><text>Nothing in this paragraph shall be construed to limit the applicability of the decision of the Supreme Court in Barnett Bank of Marion County N.A. v. Nelson, 116 S. Ct. 1103 (1996) with respect to a State statute, regulation, order, interpretation, or other action that is not described in subparagraph (B).</text></clause> <clause id="HED9430744BD3D688623C7785AAA9402"><enum>(iv)</enum><header>Limitation on inferences</header><text>Nothing in this paragraph shall be construed to create any inference with respect to any State statute, regulation, order, interpretation, or other action that is not referred to or described in this paragraph.</text></clause></subparagraph></paragraph> <paragraph id="H1699C3894100669F120929BBFC8BF3C"><enum>(3)</enum><header>Insurance activities other than sales</header><text>State statutes, regulations, interpretations, orders, and other actions shall not be preempted under subsection (b)(1) to the extent that they—</text> <subparagraph id="H8854162C434CC28326410EB800FEC5F"><enum>(A)</enum><text>relate to, or are issued, adopted, or enacted for the purpose of regulating the business of insurance in accordance with the Act of March 9, 1945 (commonly known as the <quote><act-name parsable-cite="MFA">McCarran-Ferguson Act</act-name></quote>);</text></subparagraph> <subparagraph id="HB6E755C547F547E76324E3B9149976A"><enum>(B)</enum><text>apply only to persons or entities that are not insured depository institutions or wholesale financial institutions, but that are directly engaged in the business of insurance (except that they may apply to depository institutions engaged in providing savings bank life insurance as principal to the extent of regulating such insurance);</text></subparagraph> <subparagraph id="HB804956640F159DE2C1A7E96F4F221C"><enum>(C)</enum><text>do not relate to or directly or indirectly regulate insurance sales, solicitations, or cross-marketing activities; and</text></subparagraph> <subparagraph id="HD3B082AD4C1A70867FD4E1A514EA649"><enum>(D)</enum><text>are not prohibited under subsection (c).</text></subparagraph></paragraph> <paragraph id="H6A2B1731457EF60518470894F97444F"><enum>(4)</enum><header>Financial activities other than insurance</header><text>No State statute, regulation, interpretation, order, or other action shall be preempted under subsection (b)(1) to the extent that—</text> <subparagraph id="H8F15AB1A4A0CEA58B129419C44134ED"><enum>(A)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, insurance sales, solicitations, or cross marketing activities covered under paragraph (2);</text></subparagraph> <subparagraph id="HDB88D9214E12CB23E93AF5A3E901070"><enum>(B)</enum><text>it does not relate to, and is not issued and adopted, or enacted for the purpose of regulating, directly or indirectly, the business of insurance activities other than sales, solicitations, or cross marketing activities, covered under paragraph (3);</text></subparagraph> <subparagraph id="H78BD307145155C6895DF25B7FCBE417"><enum>(C)</enum><text>it does not relate to securities investigations or enforcement actions referred to in subsection (d); and</text></subparagraph> <subparagraph id="HAB47BF5047D2A2784767EA96C0BD11C"><enum>(D)</enum><text>it—</text> <clause id="H9A845B4842D37D6BF5EDCBB8B2D541E"><enum>(i)</enum><text>does not distinguish by its terms between insured depository institutions, wholesale financial institutions, and subsidiaries and affiliates thereof engaged in the activity at issue and other persons or entities engaged in the same activity in a manner that is in any way adverse with respect to the conduct of the activity by any such insured depository institution, wholesale financial institution, or subsidiary or affiliate thereof engaged in the activity at issue;</text></clause> <clause id="HBAB3FD8B4F667CB1C582D287F8CEA0A"><enum>(ii)</enum><text>as interpreted or applied, does not have, and will not have, an impact on depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof engaged in the activity at issue, or any person or entity affiliated therewith, that is substantially more adverse than its impact on other persons or entities engaged in the same activity that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></clause> <clause id="H0405955E4DDCF8551FDA4BBA393ECDD"><enum>(iii)</enum><text>does not effectively prevent a depository institution, wholesale financial institution, or subsidiary or affiliate thereof from engaging in activities authorized or permitted by this Act or any other provision of Federal law; and</text></clause> <clause id="H60992EDE487C1FD863610788EDD92FF"><enum>(iv)</enum><text>does not conflict with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law.</text></clause></subparagraph></paragraph></subsection> <subsection id="HCD0E3D1F47C0B5377A61E2ADE9369CE"><enum>(c)</enum><header>Nondiscrimination</header><text>Except as provided in any restrictions described in subsection (b)(2)(B), no State may, by statute, regulation, order, interpretation, or other action, regulate the insurance activities authorized or permitted under this Act or any other provision of Federal law of an insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof, to the extent that such statute, regulation, order, interpretation, or other action—</text> <paragraph id="H1E321EC8478ECE0CAE95CAAB47F29C8"><enum>(1)</enum><text>distinguishes by its terms between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and other persons or entities engaged in such activities, in a manner that is in any way adverse to any such insured depository institution or wholesale financial institution, or subsidiary or affiliate thereof;</text></paragraph> <paragraph id="H0DC385874C5D46B7BFA29388E7D5210"><enum>(2)</enum><text>as interpreted or applied, has or will have an impact on depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, that is substantially more adverse than its impact on other persons or entities providing the same products or services or engaged in the same activities that are not insured depository institutions, wholesale financial institutions, or subsidiaries or affiliates thereof, or persons or entities affiliated therewith;</text></paragraph> <paragraph id="H09E64D04473EE653D75DA6BD25DABFD"><enum>(3)</enum><text>effectively prevents a depository institution or wholesale financial institution, or subsidiary or affiliate thereof, from engaging in insurance activities authorized or permitted by this Act or any other provision of Federal law; or</text></paragraph> <paragraph id="H92DC9F7C415DDD4EBB2D75AD102ED1F"><enum>(4)</enum><text>conflicts with the intent of this Act generally to permit affiliations that are authorized or permitted by Federal law between insured depository institutions or wholesale financial institutions, or subsidiaries or affiliates thereof, and persons and entities engaged in the business of insurance.</text></paragraph></subsection> <subsection id="H5B9E2DA6402444F300F4DEA66071A5E"><enum>(d)</enum><header>Limitation</header><text>Subsections (a) and (b) shall not be construed to affect the jurisdiction of the securities commission (or any agency or office performing like functions) of any State, under the laws of such State, to investigate and bring enforcement actions, consistent with section 18(c) of the <act-name parsable-cite="SA33">Securities Act of 1933</act-name>, with respect to fraud or deceit or unlawful conduct by any person, in connection with securities or securities transactions.</text></subsection> <subsection id="HF748EAB04DA7B6CC906615AB6510BE6"><enum>(e)</enum><header>Definition</header><text>For purposes of this section, the term <term>State</term> means any State of the United States, the District of Columbia, any territory of the United States, Puerto Rico, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Northern Mariana Islands.</text></subsection></section> <section id="HDEF0B04A4663085603E780B5BFC5BF0"><enum>105.</enum><header>Mutual bank holding companies authorized</header><text display-inline="no-display-inline">Section 3(g)(2) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1842(g)(2)">12 U.S.C. 1842(g)(2)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HAD23BBC64949698151E90BBDC5C0AD2"> <paragraph id="H91C0F9CB492F35AEF10D50A5E8D00D1"><enum>(2)</enum><header>Regulations</header><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HACC0E63844A54D3607A015AA27DC06B"><enum>106.</enum><header>Prohibition on deposit production offices</header> <subsection id="H38B856FE47E950B5169957B8F0BD34E"><enum>(a)</enum><header>In general</header><text>Section 109(d) of the <act-name parsable-cite="RNIBBEA">Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1835a(d)">12 U.S.C. 1835a(d)</external-xref>) is amended—</text> <paragraph id="H08F0F98145F3C2695728F9AB75E9D47"><enum>(1)</enum><text>by inserting <quote>, the &short-title1;,</quote> after <quote>pursuant to this title</quote>; and</text></paragraph> <paragraph id="HB174F0A1433D8FA0809CD2BCE3EE94E"><enum>(2)</enum><text>by inserting <quote>or such Act</quote> after <quote>made by this title</quote>.</text></paragraph></subsection> <subsection id="HDF228571409FC47592DBE9B2E767CEC"><enum>(b)</enum><header>Technical and conforming amendment</header><text>Section 109(e)(4) of the <act-name parsable-cite="RNIBBEA">Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1835a(e)(4)">12 U.S.C. 1835a(e)(4)</external-xref>) is amended by inserting <quote>and any branch of a bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>)</quote> before the period.</text></subsection></section> <section id="HFF74922747446E3525053CA216CD758"><enum>107.</enum><header>Clarification of branch closure requirements</header><text display-inline="no-display-inline">Section 42(d)(4)(A) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1831r–1(d)(4)(A)">12 U.S.C. 1831r–1(d)(4)(A)</external-xref>) is amended by inserting <quote>and any bank controlled by an out-of-State bank holding company (as defined in section 2(o)(7) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>)</quote> before the period.</text></section> <section id="HE50B20134A6F807FCF9C2D9C79D3B99"><enum>108.</enum><header>Amendments relating to limited purpose banks</header> <subsection id="H181ABC79456CCF62598817B0ABC4DCD"><enum>(a)</enum><header>In general</header><text>Section 4(f) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1843(f)">12 U.S.C. 1843(f)</external-xref>) is amended—</text> <paragraph id="H350B83834DB534301DC53081D701F5B"><enum>(1)</enum><text>in paragraph (2)(A)(ii)—</text> <subparagraph id="HF9B4333C45D1995B6B2ECABEF976A2E"><enum>(A)</enum><text>by striking <quote>and</quote> at the end of subclause (IX);</text></subparagraph> <subparagraph id="HE0DEFD644480C17B3D296892D5DE65F"><enum>(B)</enum><text>by inserting <quote>and</quote> after the semicolon at the end of subclause (X); and</text></subparagraph> <subparagraph id="H901DC1114DACB25CF65B77ABA2BD594"><enum>(C)</enum><text>by inserting after subclause (X) the following new subclause:</text> <quoted-block id="HCC880080457594A24B4022A8C5F22BD"> <subclause id="HD7661E38486BA68D29F86FB5EC03A46"><enum>(XI)</enum><text>assets that are derived from, or are incidental to, activities in which institutions described in section 2(c)(2)(F) are permitted to engage,</text></subclause><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HD8AE5AF945C31A136DBEF4A23866A5D"><enum>(2)</enum><text>in paragraph (2), by striking subparagraph (B) and inserting the following new subparagraphs:</text> <quoted-block id="H7A52BF76463403EA8F62579B1D8E97F"> <subparagraph id="HC5C792AE4032C2850DFB1CB44BE9021"><enum>(B)</enum><text>any bank subsidiary of such company engages in any activity in which the bank was not lawfully engaged as of March 5, 1987, unless the bank is well managed and well capitalized;</text></subparagraph> <subparagraph id="HA26C982A424B08341056CF9F3E2D4CB"><enum>(C)</enum><text>any bank subsidiary of such company both—</text> <clause id="H45983AFD4A724331EC08819AAA8D217"><enum>(i)</enum><text>accepts demand deposits or deposits that the depositor may withdraw by check or similar means for payment to third parties; and</text></clause> <clause id="H5B91937A4C285BF7B10E0CB712DE73A"><enum>(ii)</enum><text>engages in the business of making commercial loans (and, for purposes of this clause, loans made in the ordinary course of a credit card operation shall not be treated as commercial loans); or</text></clause></subparagraph> <subparagraph id="H23A2906D4E955D6F191108BC727434F"><enum>(D)</enum><text>after the date of the enactment of the <act-name parsable-cite="CEA87">Competitive Equality Amendments of 1987</act-name>, any bank subsidiary of such company permits any overdraft (including any intraday overdraft), or incurs any such overdraft in such bank’s account at a Federal reserve bank, on behalf of an affiliate, other than an overdraft described in paragraph (3).</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H432D4896421DE41578BC97A7A9AB6CE"><enum>(3)</enum><text>by striking paragraphs (3) and (4) and inserting the following new paragraphs:</text> <quoted-block id="H4D846BCC472FE36AEEF5E9B5A669BB3"> <paragraph id="H11AEC45B4C2C2E6AABD385ABEA62122"><enum>(3)</enum><header>Permissible overdrafts described</header><text>For purposes of paragraph (2)(D), an overdraft is described in this paragraph if—</text> <subparagraph id="H3426D4E649429138400EDD988130BDD"><enum>(A)</enum><text>such overdraft results from an inadvertent computer or accounting error that is beyond the control of both the bank and the affiliate; or</text></subparagraph> <subparagraph id="H753C5EDF48925DF7E5CC0C8F98FA88C"><enum>(B)</enum><text>such overdraft—</text> <clause id="HD5E546294C830376428E03A3624B00C"><enum>(i)</enum><text>is permitted or incurred on behalf of an affiliate which is monitored by, reports to, and is recognized as a primary dealer by the Federal Reserve Bank of New York; and</text></clause> <clause id="H0D7AA27E40800EE5FDCFC7A9167FFFA"><enum>(ii)</enum><text>is fully secured, as required by the Board, by bonds, notes, or other obligations which are direct obligations of the United States or on which the principal and interest are fully guaranteed by the United States or by securities and obligations eligible for settlement on the Federal Reserve book entry system.</text></clause></subparagraph></paragraph> <paragraph id="H944748A94787732CC525D9AFB9F5561"><enum>(4)</enum><header>Divestiture in case of loss of exemption</header><text>If any company described in paragraph (1) fails to qualify for the exemption provided under such paragraph by operation of paragraph (2), such exemption shall cease to apply to such company and such company shall divest control of each bank it controls before the end of the 180-day period beginning on the date that the company receives notice from the Board that the company has failed to continue to qualify for such exemption, unless before the end of such 180-day period, the company has—</text> <subparagraph id="H37ED426A416CF1A05767D3B8EC49A2F"><enum>(A)</enum><text>corrected the condition or ceased the activity that caused the company to fail to continue to qualify for the exemption; and</text></subparagraph> <subparagraph id="HB13B074447FBD35DE9EDDC9AEFAC943"><enum>(B)</enum><text>implemented procedures that are reasonably adapted to avoid the reoccurrence of such condition or activity.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H2B6B09054AB95924E759CC8B4228B44"><enum>(b)</enum><header>Industrial loan companies affiliate overdrafts</header><text>Section 2(c)(2)(H) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841(c)(2)(H)">12 U.S.C. 1841(c)(2)(H)</external-xref>) is amended by inserting before the period at the end <quote>, or that is otherwise permissible for a bank controlled by a company described in section 4(f)(1)</quote>.</text></subsection></section> <section id="H856AB8B04E87A8866A30758298C8600"><enum>109.</enum><header>Reports on ongoing FTC study of consumer privacy issues</header><text display-inline="no-display-inline">With respect to the ongoing multistage study being conducted by the Federal Trade Commission on consumer privacy issues, the Commission shall submit to the Congress an interim report on the findings and conclusions of the Commission, together with such recommendations for legislative and administrative action as the Commission determines to be appropriate, at the conclusion of each stage of such study and a final report at the conclusion of the study.</text></section> <section id="HC9B580404C6081AB3AA7208420C8FD7"><enum>110.</enum><header>GAO study of economic impact on community banks and other small financial institutions</header> <subsection id="H5EA3A2474B8AEEF35D5CD583EA48EBE"><enum>(a)</enum><header>Study required</header><text>The Comptroller General of the United States shall conduct a study of the projected economic impact that the enactment of this Act will have on financial institutions which have total assets of $100,000,000 or less.</text></subsection> <subsection id="H24CA46B94A634AB737145E8709CBE07"><enum>(b)</enum><header>Report to the Congress</header><text>The Comptroller General of the United States shall submit a report to the Congress before the end of the 6-month period beginning on the date of the date of the enactment of this Act containing the findings and conclusions of the Comptroller General with regard to the study required under subsection (a) and such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.</text></subsection></section></subtitle> <subtitle id="HAD631370404FD91FAF6983BDC5B0D88"><enum>B</enum><header>Streamlining supervision of financial holding companies</header> <section id="HFC836F3F4C1C5C4BF850F883D02B13C"><enum>111.</enum><header>Streamlining financial holding company supervision</header><text display-inline="no-display-inline">Section 5(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844(c)">12 U.S.C. 1844(c)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H29BE961D475214038C543A8C66C629E"> <subsection id="H95E6DEE6422AA97CBD984DB47B8CD81"><enum>(c)</enum><header>Reports and examinations</header> <paragraph id="HDDA91BF947721822856CB19095A0300"><enum>(1)</enum><header>Reports</header> <subparagraph id="H3CC909824EEDAC6DA8AF78B83E6DB07"><enum>(A)</enum><header>In general</header><text>The Board from time to time may require any bank holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to—</text> <clause id="HCA2F50A54337F6A9D152C8A1C985FD6"><enum>(i)</enum><text>its financial condition, systems for monitoring and controlling financial and operating risks, and transactions with depository institution subsidiaries of the holding company; and</text></clause> <clause id="H88C4EBDA4AE9EA141330BFADE2F37B8"><enum>(ii)</enum><text>compliance by the company or subsidiary with applicable provisions of this Act.</text></clause></subparagraph> <subparagraph id="HB5918CFD495FB03ADA7F98820567BAC"><enum>(B)</enum><header>Use of existing reports</header> <clause id="HDC5DF4BA42F713E145E8D98500FECB1"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, accept reports in fulfillment of the Board’s reporting requirements under this paragraph that a bank holding company or any subsidiary of such company has provided or been required to provide to other Federal and State supervisors or to appropriate self-regulatory organizations.</text></clause> <clause id="HE8FACAA9427E5075837EC09FB1F79F1"><enum>(ii)</enum><header>Availability</header><text>A bank holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).</text></clause> <clause id="H7730AF4B4B3DB7AE8F96D580B9E4D86"><enum>(iii)</enum><header>Required use of publicly reported information</header><text>The Board shall, to the fullest extent possible, accept in fulfillment of any reporting or recordkeeping requirements under this Act information that is otherwise required to be reported publicly and externally audited financial statements.</text></clause> <clause id="H4430ED7A4279DF672ADD5994EC81D25"><enum>(iv)</enum><header>Reports filed with other agencies</header><text>In the event the Board requires a report from a functionally regulated nondepository institution subsidiary of a bank holding company of a kind that is not required by another Federal or State regulator or appropriate self-regulatory organization, the Board shall request that the appropriate regulator or self-regulatory organization obtain such report. If the report is not made available to the Board, and the report is necessary to assess a material risk to the bank holding company or any of its subsidiary depository institutions or compliance with this Act, the Board may require such subsidiary to provide such a report to the Board.</text></clause></subparagraph> <subparagraph id="HDD0046494D7F1F0203F92F81E8EAB9C"><enum>(C)</enum><header>Definition</header><text>For purposes of this subsection, the term <term>functionally regulated nondepository institution</term> means—</text> <clause id="HC2151CF645EDD8D922E6E3A5C908B00"><enum>(i)</enum><text>a broker or dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>;</text></clause> <clause id="H97E588654A405ECF07456CBCD72C2B9"><enum>(ii)</enum><text>an investment adviser registered under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>, or with any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></clause> <clause id="HDF251368418C6AC078F2C3B9915DBA0"><enum>(iii)</enum><text>an insurance company subject to supervision by a State insurance commission, agency, or similar authority; and</text></clause> <clause id="HF55178AB4E92AD1C3A078D8DE17FB2D"><enum>(iv)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></clause></subparagraph></paragraph> <paragraph id="H11151AFB4FC5AADC87EBEE82C537CF7"><enum>(2)</enum><header>Examinations</header> <subparagraph id="HE7FEB2614D62B947E283B289F46695F"><enum>(A)</enum><header>Examination authority</header> <clause id="HE21294B44F5F5489895C0BB7DDF0ACC"><enum>(i)</enum><header>In general</header><text>The Board may make examinations of each bank holding company and each subsidiary of a bank holding company.</text></clause> <clause id="HB550000A46427FD736BCB2A1A53E63F"><enum>(ii)</enum><header>Functionally regulated nondepository institution subsidiaries</header><text>Notwithstanding clause (i), the Board may make examinations of a functionally regulated nondepository institution subsidiary of a bank holding company only if—</text> <subclause id="HE0E617324E96A518F4947FA06BEF5A2"><enum>(I)</enum><text>the Board has reasonable cause to believe that such subsidiary is engaged in activities that pose a material risk to an affiliated depository institution, or</text></subclause> <subclause id="H6F67B3CF4A3139D131E3AE9CDB47BD0"><enum>(II)</enum><text>based on reports and other available information, the Board has reasonable cause to believe that a subsidiary is not in compliance with this Act or with provisions relating to transactions with an affiliated depository institution and the Board cannot make such determination through examination of the affiliated depository institution or bank holding company.</text></subclause></clause></subparagraph> <subparagraph id="H1A44AD264A219B587E1EF686D30095B"><enum>(B)</enum><header>Limitations on examination authority for bank holding companies and subsidiaries</header><text>Subject to subparagraph (A)(ii), the Board may make examinations under subparagraph (A)(i) of each bank holding company and each subsidiary of such holding company in order to—</text> <clause id="HFF242C6D4BD6A11BF5D3E7BFEC1B45B"><enum>(i)</enum><text>inform the Board of the nature of the operations and financial condition of the holding company and such subsidiaries;</text></clause> <clause id="HEE7391CF4B6F4593E332018DA44A4B9"><enum>(ii)</enum><text>inform the Board of—</text> <subclause id="H698702064B5500FCA42D839597C844D"><enum>(I)</enum><text>the financial and operational risks within the holding company system that may pose a threat to the safety and soundness of any subsidiary depository institution of such holding company; and</text></subclause> <subclause id="HC9358C254FF3A2A5275E53859EFC094"><enum>(II)</enum><text>the systems for monitoring and controlling such risks; and</text></subclause></clause> <clause id="H7DB4B9224D40D51B1CB890AC685B2CF"><enum>(iii)</enum><text>monitor compliance with the provisions of this Act and those governing transactions and relationships between any subsidiary depository institution and its affiliates.</text></clause></subparagraph> <subparagraph id="H18F698354A801CA439E2208CCF0B7AC"><enum>(C)</enum><header>Restricted focus of examinations</header><text>The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a bank holding company to—</text> <clause id="H8FD80F1A4986214EECA86A84FE7209C"><enum>(i)</enum><text>the bank holding company; and</text></clause> <clause id="HA50B122F4E02430351A3988F9314A4D"><enum>(ii)</enum><text>any subsidiary of the holding company that, because of—</text> <subclause id="H85306DAA41539FE03961D5BC7BB5B9C"><enum>(I)</enum><text>the size, condition, or activities of the subsidiary;</text></subclause> <subclause id="HD972AB2A4FA5BB10C763C697D3A3C1C"><enum>(II)</enum><text>the nature or size of transactions between such subsidiary and any depository institution which is also a subsidiary of such holding company; or</text></subclause> <subclause id="H7494898047E674113F72BC8CC980080"><enum>(III)</enum><text>the centralization of functions within the holding company system,</text></subclause><continuation-text continuation-text-level="clause">could have a materially adverse effect on the safety and soundness of any depository institution affiliate of the holding company.</continuation-text></clause></subparagraph> <subparagraph id="HA9F33E824F73446FCC1C52B561D1A51"><enum>(D)</enum><header>Deference to bank examinations</header><text>The Board shall, to the fullest extent possible, use, for the purposes of this paragraph, the reports of examinations of depository institutions made by the appropriate Federal and State depository institution supervisory authority.</text></subparagraph> <subparagraph id="HC6C87D2A412FF6931DC8CB9BE844E2F"><enum>(E)</enum><header>Deference to other examinations</header><text>The Board shall, to the fullest extent possible, address the circumstances which might otherwise permit or require an examination by the Board by forgoing an examination and instead reviewing the reports of examination made of—</text> <clause id="HECAC123748036150A5401382D65753B"><enum>(i)</enum><text>any registered broker or dealer by or on behalf of the Securities and Exchange Commission;</text></clause> <clause id="H954CFB9F49763A1F4FBF0CAA057C52F"><enum>(ii)</enum><text>any registered investment adviser properly registered by or on behalf of either the Securities and Exchange Commission or any State;</text></clause> <clause id="H16C7B9004BE118B59E2125ADD9E6634"><enum>(iii)</enum><text>any licensed insurance company by or on behalf of any state regulatory authority responsible for the supervision of insurance companies; and</text></clause> <clause id="H44398B2641EC0095A03141BA66B2A9C"><enum>(iv)</enum><text>any other subsidiary that the Board finds to be comprehensively supervised by a Federal or State authority.</text></clause></subparagraph></paragraph> <paragraph id="H20E460F44DE4A2E1C65DC7B5C6AA9D2"><enum>(3)</enum><header>Capital</header> <subparagraph id="HA08AB912493268C20FF997A3F383BF6"><enum>(A)</enum><header>In general</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, guidelines, standards, or requirements on any subsidiary of a financial holding company that is not a depository institution and—</text> <clause id="HE24378F34EC1188759CD829B66A5B40"><enum>(i)</enum><text>is in compliance with applicable capital requirements of another Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority; or</text></clause> <clause id="H50499AA943EA7E46CFC9C989DA7BA2F"><enum>(ii)</enum><text>is properly registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>, or with any State.</text></clause></subparagraph> <subparagraph id="HFD6637984B4773285D883DB83EFE44D"><enum>(B)</enum><header>Rule of construction</header><text>Subparagraph (A) shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to activities of a registered investment adviser other than investment advisory activities or activities incidental to investment advisory activities.</text></subparagraph> <subparagraph id="HA877979A4B29A3181A836292D8E1692"><enum>(C)</enum><header>Limitations on indirect action</header><text>In developing, establishing, or assessing holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board shall not take into account the activities, operations, or investments of an affiliated investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>, if the investment company is not—</text> <clause id="H6F68B32C412B23C65D7660B5D4F4C09"><enum>(i)</enum><text>a bank holding company; or</text></clause> <clause id="HD7803EA64975FC1ADDE8A0A552C869F"><enum>(ii)</enum><text>controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, where the shares owned by the bank holding company have a market value equal to more than $1,000,000.</text></clause></subparagraph></paragraph> <paragraph id="H19E127934797179C62B59488AE03BE8"><enum>(4)</enum><header>Transfer of Board authority to appropriate Federal banking agency</header> <subparagraph id="H7704341D47F1C2947E16B2ACFF4B7D3"><enum>(A)</enum><header>In general</header><text>In the case of any bank holding company which is not significantly engaged in nonbanking activities, the Board, in consultation with the appropriate Federal banking agency, may designate the appropriate Federal banking agency of the lead insured depository institution subsidiary of such holding company as the appropriate Federal banking agency for the bank holding company.</text></subparagraph> <subparagraph id="HFFEA5FBC4811CB85C01F2A9BD4AD54C"><enum>(B)</enum><header>Authority transferred</header><text>An agency designated by the Board under subparagraph (A) shall have the same authority as the Board under this Act to—</text> <clause id="H6280DEA543B35C5238671FB98D4CEC1"><enum>(i)</enum><text>examine and require reports from the bank holding company and any affiliate of such company (other than a depository institution) under section 5;</text></clause> <clause id="H52E5952B4ECCC9A7E70C03B5AFB7C8B"><enum>(ii)</enum><text>approve or disapprove applications or transactions under section 3;</text></clause> <clause id="HE23230CC452318B0E577B0B0CECB2A8"><enum>(iii)</enum><text>take actions and impose penalties under subsections (e) and (f) of section 5 and section 8; and</text></clause> <clause id="H40CBE01A443706F1B824ED84D99BF62"><enum>(iv)</enum><text>take actions regarding the holding company, any affiliate of the holding company (other than a depository institution), or any institution-affiliated party of such company or affiliate under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> and any other statute which the Board may designate.</text></clause></subparagraph> <subparagraph id="HEBE5AB8C471D5A9A71C831B924799FC"><enum>(C)</enum><header>Agency orders</header><text>Section 9 of this Act and section 105 of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name> shall apply to orders issued by an agency designated under subparagraph (A) in the same manner such sections apply to orders issued by the Board.</text></subparagraph></paragraph> <paragraph id="HD775ADD64DAA2278D60B26B8DAFAD73"><enum>(5)</enum><header>Functional regulation of securities and insurance activities</header><text>The Board shall defer to—</text> <subparagraph id="HA7F3481747E7E05C56F45C82464297D"><enum>(A)</enum><text>the Securities and Exchange Commission with regard to all interpretations of, and the enforcement of, applicable Federal securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, investment advisers, and investment companies;</text></subparagraph> <subparagraph id="HD5A101DE48C97C1D487879A1C985DC0"><enum>(B)</enum><text>the relevant State securities authorities with regard to all interpretations of, and the enforcement of, applicable State securities laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of registered brokers, dealers, and investment advisers; and</text></subparagraph> <subparagraph id="H4ACABED44C27417F30AD82B33FD60FB"><enum>(C)</enum><text>the relevant State insurance authorities with regard to all interpretations of, and the enforcement of, applicable State insurance laws (and rules, regulations, orders, and other directives issued thereunder) relating to the activities, conduct, and operations of insurance companies and insurance agents.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H3737CAC84D6640E52C25F0A9F8F55D7"><enum>112.</enum><header>Elimination of application requirement for financial holding companies</header> <subsection id="HB4ED57874A131E618416F98BDFEA200"><enum>(a)</enum><header>Prevention of duplicative filings</header><text>Section 5(a) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844(a)">12 U.S.C. 1844(a)</external-xref>) is amended by adding the following new sentence at the end: <quote>A declaration filed in accordance with section 6(b)(1)(C) shall satisfy the requirements of this subsection with regard to the registration of a bank holding company but not any requirement to file an application to acquire a bank pursuant to section 3.</quote>.</text></subsection> <subsection id="H663E9C9744B204361546079C532BC6D"><enum>(b)</enum><header>Divestiture procedures</header><text>Section 5(e)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844(e)(1)">12 U.S.C. 1844(e)(1)</external-xref>) is amended—</text> <paragraph id="H348167FF421B84479F098D95CE993ED"><enum>(1)</enum><text>by striking <quote><act-name parsable-cite="FISA66">Financial Institutions Supervisory Act of 1966</act-name>, order</quote> and inserting</text> <quoted-block act-name="Financial Institutions Supervisory Act of 1966" display-inline="yes-display-inline" id="H10A5377A40AEA76EAC907084D67ECC2"><text><act-name parsable-cite="FISA66">Financial Institutions Supervisory Act of 1966</act-name>, at the election of the bank holding company—</text> <subparagraph indent="up1" id="HC05010B443554CF40AAFCEBA800020E"><enum>(A)</enum><text>order</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="H8551FEDC4DCED09BFAF28DB61B7D3DB"><enum>(2)</enum><text>by striking <quote>shareholders of the bank holding company. Such distribution</quote> and inserting</text> <quoted-block display-inline="yes-display-inline" id="H880F2B9B46645682C01875ABC5F1E20"><text>shareholders of the bank holding company; or</text> <subparagraph indent="up1" id="HC37B7C604E7484672C90BCB9E1655EC"><enum>(B)</enum><text>order the bank holding company, after due notice and opportunity for hearing, and after consultation with the primary supervisor for the bank, which shall be the Comptroller of the Currency in the case of a national bank, and the Federal Deposit Insurance Corporation and the appropriate State supervisor in the case of an insured nonmember bank, to terminate (within 120 days or such longer period as the Board may direct) the ownership or control of any such bank by such company.</text><continuation-text continuation-text-level="paragraph">The distribution referred to in subparagraph (A)</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="HE1FDD93E49CE8B44525683A96C55D52"><enum>113.</enum><header>Authority of State insurance regulator and Securities and Exchange Commission</header><text display-inline="no-display-inline">Section 5 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844">12 U.S.C. 1844</external-xref>) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HE7A5218E43CEBD18147B73B4A3EC3EA"> <subsection id="HF4A7DD0D4A16B2077A3B3DB98E4623B"><enum>(g)</enum><header>Authority of State insurance regulator and the Securities and Exchange Commission</header> <paragraph id="H7582F729493830F74BCC9B8BA5C1AF8"><enum>(1)</enum><header>In general</header><text>Notwithstanding any other provision of law, any regulation, order, or other action of the Board which requires a bank holding company to provide funds or other assets to a subsidiary insured depository institution shall not be effective nor enforceable if—</text> <subparagraph id="HFE931A274EB7BDED2E8071BDDAA88C3"><enum>(A)</enum><text>such funds or assets are to be provided by—</text> <clause id="HDB1BBA8D4C144081653C939F9C9CF1A"><enum>(i)</enum><text>a bank holding company that is an insurance company or is a broker or dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>; or</text></clause> <clause id="H9C5D5D3E4DEEF2095D90018CBE4E487"><enum>(ii)</enum><text>an affiliate of the depository institution which is an insurance company or a broker or dealer registered under such Act; and</text></clause></subparagraph> <subparagraph id="H9D0EBE5F456AE5077AA59888AE66FE8"><enum>(B)</enum><text>the State insurance authority for the insurance company or the Securities and Exchange Commission for the registered broker or dealer, as the case may be, determines in writing sent to the holding company and the Board that the holding company shall not provide such funds or assets because such action would have a material adverse effect on the financial condition of the insurance company or the broker or dealer, as the case may be.</text></subparagraph></paragraph> <paragraph id="HDDF142634467BA0B7BB648951E4BD8A"><enum>(2)</enum><header>Notice to State insurance authority or SEC required</header><text>If the Board requires a bank holding company, or an affiliate of a bank holding company, which is an insurance company or a broker or dealer described in paragraph (1)(A) to provide funds or assets to an insured depository institution subsidiary of the holding company pursuant to any regulation, order, or other action of the Board referred to in paragraph (1), the Board shall promptly notify the State insurance authority for the insurance company or the Securities and Exchange Commission, as the case may be, of such requirement.</text></paragraph> <paragraph id="H0CF646544E15BA707E7F35B14FAD99D"><enum>(3)</enum><header>Divestiture in lieu of other action</header><text>If the Board receives a notice described in paragraph (1)(B) from a State insurance authority or the Securities and Exchange Commission with regard to a bank holding company or affiliate referred to in that paragraph, the Board may order the bank holding company to divest the insured depository institution not later than 180 days after receiving the notice, or such longer period as the Board determines consistent with the safe and sound operation of the insured depository institution.</text></paragraph> <paragraph id="HAD8003EA4FE67DEF66A5439FEDE1B96"><enum>(4)</enum><header>Conditions before divestiture</header><text>During the period beginning on the date an order to divest is issued by the Board under paragraph (3) to a bank holding company and ending on the date the divestiture is completed, the Board may impose any conditions or restrictions on the holding company’s ownership or operation of the insured depository institution, including restricting or prohibiting transactions between the insured depository institution and any affiliate of the institution, as are appropriate under the circumstances.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HD183FFF34FF67E8BA0E833A4A2E005D"><enum>114.</enum><header>Prudential safeguards</header><text display-inline="no-display-inline">Section 5 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1844">12 U.S.C. 1844</external-xref>) is amended by inserting after subsection (g) (as added by section 113 of this subtitle) the following new subsection:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H2444EDAC4B3918EE59424EB7A0027EA"> <subsection id="H58FEC0EA42EC8C213CF30C9600E179A"><enum>(h)</enum><header>Prudential safeguards</header> <paragraph id="HE8F134444ABA1C5835097588F642D74"><enum>(1)</enum><header>In general</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a depository institution subsidiary of a bank holding company and any affiliate of such depository institution (other than a subsidiary of such institution) which the Board finds is consistent with the public interest, the purposes of this Act, the &short-title1;, the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, and other Federal law applicable to depository institution subsidiaries of bank holding companies and the standards in paragraph (2).</text></paragraph> <paragraph id="HE1A370BD4EC2D346014F8DBDB754DF2"><enum>(2)</enum><header>Standards</header><text>The Board may exercise authority under paragraph (1) if the Board finds that such action would—</text> <subparagraph id="H2605D487417C0632C6DD60A59447C36"><enum>(A)</enum><text>avoid any significant risk to the safety and soundness of depository institutions or any Federal deposit insurance fund;</text></subparagraph> <subparagraph id="H4C38194E4226830B068A6E98F6CED9E"><enum>(B)</enum><text>enhance the financial stability of bank holding companies;</text></subparagraph> <subparagraph id="H020384DE45E83C4A88A33881E578FBE"><enum>(C)</enum><text>avoid conflicts of interest or other abuses;</text></subparagraph> <subparagraph id="H19F3649E42D839E817383A9BCD512E2"><enum>(D)</enum><text>enhance the privacy of customers of depository institutions; or</text></subparagraph> <subparagraph id="HE68A42DA47EAE152CF2D8794BC8125C"><enum>(E)</enum><text>promote the application of national treatment and equality of competitive opportunity between nonbank affiliates owned or controlled by domestic bank holding companies and nonbank affiliates owned or controlled by foreign banks operating in the United States.</text></subparagraph></paragraph> <paragraph id="HA96CBBF64D8CD6DAD631649E242CCF6"><enum>(3)</enum><header>Review</header><text>The Board shall regularly—</text> <subparagraph id="HBB5D79EF4B2158FD04FFA8A5695DA20"><enum>(A)</enum><text>review all restrictions or requirements established pursuant to paragraph (1) to determine whether there is a continuing need for any such restriction or requirement to carry out the purposes of the Act, including any purpose described in paragraph (2); and</text></subparagraph> <subparagraph id="H622E908A4DBD9336DA08C6AE7CF19AD"><enum>(B)</enum><text>modify or eliminate any restriction or requirement the Board finds is no longer required for such purposes.</text></subparagraph></paragraph> <paragraph id="H950A8A634144BB94A79A85AF717F07C"><enum>(4)</enum><header>Foreign banks</header><text>The Board may, by regulation or order, impose restrictions or requirements on relationships or transactions between a foreign bank and any affiliate in the United States of such foreign bank that the Board finds are consistent with the public interest, the purposes of this Act, the &short-title1;, the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, and other Federal law applicable to foreign banks and their affiliates in the United States, and the standards in paragraphs (2) and (3).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H7B8A8EC5444BB132CED61E9AFFF9B99"><enum>115.</enum><header>Examination of investment companies</header> <subsection id="HD96B09F8403978BFACCD2FB5B9FCCFE"><enum>(a)</enum><header>Exclusive Commission authority</header> <paragraph id="HB620B0B74D7F82B61ACF2B83E81ED9B"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (3), the Commission shall be the sole Federal agency with authority to inspect and examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="HF8FBB81644E7A58CFD4D2FADC9CCB79"><enum>(2)</enum><header>Prohibition on banking agencies</header><text>Except as provided in paragraph (3), a Federal banking agency may not inspect or examine any registered investment company that is not a bank holding company or a savings and loan holding company.</text></paragraph> <paragraph id="HE44E448A4454F0F66222C7B224B9EE7"><enum>(3)</enum><header>Certain examinations authorized</header><text>Nothing in this subsection prevents the Federal Deposit Insurance Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any insured depository institution, pursuant to its authority under section 10(b)(4) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, as may be necessary to disclose fully the relationship between the depository institution and the affiliate, and the effect of such relationship on the depository institution.</text></paragraph></subsection> <subsection id="HFD5D207343DFD3DBC32A4290A144F6C"><enum>(b)</enum><header>Examination results and other information</header><text>The Commission shall provide to any Federal banking agency, upon request, the results of any examination, reports, records, or other information with respect to any registered investment company to the extent necessary for the agency to carry out its statutory responsibilities.</text></subsection> <subsection id="HCC5199FD49C9F9C7E29F4E9D2D7150B"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="HC49875B24D6B4C5D27B7579BC182C61"><enum>(1)</enum><header>Bank holding company</header><text>The term <term>bank holding company</term> has the same meaning as in <external-xref legal-doc="act" parsable-cite="BHC65/2">section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph> <paragraph id="H5745A02E41E89A5EECABBEAD492F96B"><enum>(2)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text></paragraph> <paragraph id="HC8DA626B48A97671E25939B672ABB23"><enum>(3)</enum><header>Federal banking agency</header><text>The term <term>Federal banking agency</term> has the same meaning as in section 3(z) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph> <paragraph id="H2E89BF0E499310DB43E5F1B230716FB"><enum>(4)</enum><header>Registered investment company</header><text>The term <term>registered investment company</term> means an investment company which is registered with the Commission under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>.</text></paragraph> <paragraph id="H33F3FAEB4DF48F55EC7DF49F745C4FF"><enum>(5)</enum><header>Savings and loan holding company</header><text>The term <term>savings and loan holding company</term> has the same meaning as in section 10(a)(1)(D) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name>.</text></paragraph></subsection></section> <section id="HEC6F7025437ED88EAD7A508AD326674"><enum>116.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header><text display-inline="no-display-inline">The <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841</external-xref> et seq.) is amended by inserting after section 10 the following new section:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HBC91ADB4439B749993DE819600E5E33"> <section id="H4711DB974F414C8451432FAF66C8A13"><enum>10A.</enum><header>Limitation on rulemaking, prudential, supervisory, and enforcement authority of the Board</header> <subsection id="HB74FBC754475288BE13B1885A1C3FBD"><enum>(a)</enum><header>Limitation on direct action</header> <paragraph id="H407CB71A4ED4FCF88E18D7947DDF963"><enum>(1)</enum><header>In general</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> against or with respect to a regulated subsidiary of a bank holding company unless the action is necessary to prevent or redress an unsafe or unsound practice or breach of fiduciary duty by such subsidiary that poses a material risk to—</text> <subparagraph id="HDE708AF0406EFE47F7B49EB64C2ECA6"><enum>(A)</enum><text>the financial safety, soundness, or stability of an affiliated depository institution; or</text></subparagraph> <subparagraph id="HDC425D9343651F78E28C83B159ECA6E"><enum>(B)</enum><text>the domestic or international payment system.</text></subparagraph></paragraph> <paragraph id="H1A59179041A62DB88B0D619169AD55C"><enum>(2)</enum><header>Criteria for Board action</header><text>The Board shall not take action otherwise permitted under paragraph (1) unless the Board finds that it is not reasonably possible to effectively protect against the material risk at issue through action directed at or against the affiliated depository institution or against depository institutions generally.</text></paragraph></subsection> <subsection id="H5516FD554CABE4BA97B232883DACD58"><enum>(b)</enum><header>Limitation on indirect action</header><text>The Board may not prescribe regulations, issue or seek entry of orders, impose restraints, restrictions, guidelines, requirements, safeguards, or standards, or otherwise take any action under or pursuant to any provision of this Act or section 8 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> against or with respect to a financial holding company or a wholesale financial holding company where the purpose or effect of doing so would be to take action indirectly against or with respect to a regulated subsidiary that may not be taken directly against or with respect to such subsidiary in accordance with subsection (a).</text></subsection> <subsection id="H4A4585CF4E2E578A28E47A8B1C2FBF6"><enum>(c)</enum><header>Actions specifically authorized</header><text>Notwithstanding subsection (a), the Board may take action under this Act or section 8 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> to enforce compliance by a regulated subsidiary with Federal law that the Board has specific jurisdiction to enforce against such subsidiary.</text></subsection> <subsection id="HAE04FB83457CA03F63E0A2B000CAB40"><enum>(d)</enum><header>Regulated subsidiary defined</header><text>For purposes of this section, the term <term>regulated subsidiary</term> means any company that is not a bank holding company and is—</text> <paragraph id="H67F3D96F4D664844E01BCEA7BFC1C12"><enum>(1)</enum><text>a broker or dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>;</text></paragraph> <paragraph id="H5C00B6084C9CFEC7B3F14CB0B33A3B4"><enum>(2)</enum><text>a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;</text></paragraph> <paragraph id="H8E43AA2C4CAEC2BE49D3CB8BC89297D"><enum>(3)</enum><text>an investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>;</text></paragraph> <paragraph id="HB37C362B4C7E3F8062D9AA91648200E"><enum>(4)</enum><text>an insurance company or an insurance agency subject to supervision by a State insurance commission, agency, or similar authority; or</text></paragraph> <paragraph id="H754BB5DA4848625BB7E2B5888CE1B00"><enum>(5)</enum><text>an entity subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H7788306E46AB82A04E81F9AEE3D1100"><enum>117.</enum><header>Interagency consultation</header> <subsection id="HDD178EB14FB10748E69D708D5FB9BDD"><enum>(a)</enum><header>Purpose</header><text>It is the intention of Congress that the Board of Governors of the Federal Reserve System, as the umbrella supervisor for financial holding companies, and the State insurance regulators, as the functional regulators of companies engaged in insurance activities, coordinate efforts to supervise companies that control both a depository institution and a company engaged in insurance activities regulated under State law. In particular, Congress believes that the Board and the State insurance regulators should share, on a confidential basis, information relevant to the supervision of companies that control both a depository institution and a company engaged in insurance activities, including information regarding the financial health of the consolidated organization and information regarding transactions and relationships between insurance companies and affiliated depository institutions. The appropriate Federal banking agencies for depository institutions should also share, on a confidential basis, information with the relevant State insurance regulators regarding transactions and relationships between depository institutions and affiliated companies engaged in insurance activities. The purpose of this section is to encourage this coordination and confidential sharing of information, and to thereby improve both the efficiency and the quality of the supervision of financial holding companies and their affiliated depository institutions and companies engaged in insurance activities.</text></subsection> <subsection id="H6277363C413A401328AC1683023CB77"><enum>(b)</enum><header>Examination results and other information</header> <paragraph id="HB973FBE645B1B2064A1626BB08FFD04"><enum>(1)</enum><header>Information of the Board</header><text>Upon the request of the appropriate insurance regulator of any State, the Board may provide any information of the Board regarding the financial condition, risk management policies, and operations of any financial holding company that controls a company that is engaged in insurance activities and is regulated by such State insurance regulator, and regarding any transaction or relationship between such an insurance company and any affiliated depository institution. The Board may provide any other information to the appropriate State insurance regulator that the Board believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="HB6FC3F91445F7CA3CA4573B400008FA"><enum>(2)</enum><header>Banking agency information</header><text>Upon the request of the appropriate insurance regulator of any State, the appropriate Federal banking agency may provide any information of the agency regarding any transaction or relationship between a depository institution supervised by such Federal banking agency and any affiliated company that is engaged in insurance activities regulated by such State insurance regulator. The appropriate Federal banking agency may provide any other information to the appropriate State insurance regulator that the agency believes is necessary or appropriate to permit the State insurance regulator to administer and enforce applicable State insurance laws.</text></paragraph> <paragraph id="H1D2BE4164E44CB373301FEA8EF8504D"><enum>(3)</enum><header>State insurance regulator information</header><text>Upon the request of the Board or the appropriate Federal banking agency, a State insurance regulator may provide any examination or other reports, records, or other information to which such insurance regulator may have access with respect to a company which—</text> <subparagraph id="H44A3FB6C4088B48C4905F0AD4EE874B"><enum>(A)</enum><text>is engaged in insurance activities and regulated by such insurance regulator; and</text></subparagraph> <subparagraph id="HF6430B10441DE4252C61A59E9BE26BD"><enum>(B)</enum><text>is an affiliate of an insured depository institution, wholesale financial institution, or financial holding company.</text></subparagraph></paragraph></subsection> <subsection id="HB2926FC644555FC8DAC7B68573F1D44"><enum>(c)</enum><header>Consultation</header><text>Before making any determination relating to the initial affiliation of, or the continuing affiliation of, an insured depository institution, wholesale financial institution, or financial holding company with a company engaged in insurance activities, the appropriate Federal banking agency shall consult with the appropriate State insurance regulator of such company and take the views of such insurance regulator into account in making such determination.</text></subsection> <subsection id="H82DDB57F4F56D67F6A8EBE86D9754D7"><enum>(d)</enum><header>Effect on other authority</header><text>Nothing in this section shall limit in any respect the authority of the appropriate Federal banking agency with respect to an insured depository institution, wholesale financial institution, or bank holding company or any affiliate thereof under any provision of law.</text></subsection> <subsection id="H808B270146E966918839348296E99DF"><enum>(e)</enum><header>Confidentiality and privilege</header> <paragraph id="H3F7FC7024CAEEF619ACB27BBFAF3FFB"><enum>(1)</enum><header>Confidentiality</header><text>The appropriate Federal banking agency shall not provide any information or material that is entitled to confidential treatment under applicable Federal banking agency regulations, or other applicable law, to a State insurance regulator unless such regulator agrees to maintain the information or material in confidence and to take all reasonable steps to oppose any effort to secure disclosure of the information or material by the regulator. The appropriate Federal banking agency shall treat as confidential any information or material obtained from a State insurance regulator that is entitled to confidential treatment under applicable State regulations, or other applicable law, and take all reasonable steps to oppose any effort to secure disclosure of the information or material by the Federal banking agency.</text></paragraph> <paragraph id="HB251B88C4EF98BB0A650878F86724DA"><enum>(2)</enum><header>Privilege</header><text>The provision pursuant to this section of information or material by a Federal banking agency or State insurance regulator shall not constitute a waiver of, or otherwise affect, any privilege to which the information or material is otherwise subject.</text></paragraph></subsection> <subsection id="HD1521B464EDC1BDE23E958B568D001F"><enum>(f)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="H0364842443A9E4237B5DBAB9CA8175C"><enum>(1)</enum><header>Appropriate Federal banking agency; insured depository institution</header><text>The terms <term>appropriate Federal banking agency</term> and <term>insured depository institution</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="FDIA/3">section 3</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph> <paragraph id="H44C254BF42047472AD7DA693B3F083C"><enum>(2)</enum><header>Board; financial holding company; and wholesale financial institution</header><text>The terms <term>Board</term>, <term>financial holding company</term>, and <term>wholesale financial institution</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="BHC65/2">section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph></subsection></section> <section id="H84316E074702BDC63DBDB594006700C"><enum>118.</enum><header>Equivalent regulation and supervision</header> <subsection id="H2C6B0C00448BC3B6F0013D8CD0CB0A3"><enum>(a)</enum><header>In general</header><text>Notwithstanding any other provision of law, the provisions of—</text> <paragraph id="HA3DAF35A4AE5796DA2AB01BDC208166"><enum>(1)</enum><text>section 5(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (as amended by this Act) that limit the authority of the Board of Governors of the Federal Reserve System to require reports from, to make examinations of, or to impose capital requirements on bank holding companies and their nonbank subsidiaries; and</text></paragraph> <paragraph id="H0134A8E54D08D0DE42D166ACE046C81"><enum>(2)</enum><text><external-xref legal-doc="act" parsable-cite="BHC65/10A">section 10A</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (as added by this Act) that limit whatever authority the Board might otherwise have to take direct or indirect action with respect to bank holding companies and their nonbank subsidiaries,</text></paragraph><continuation-text continuation-text-level="subsection">shall also limit whatever authority that the Federal Deposit Insurance Corporation might otherwise have under any statute to require reports, make examinations, impose capital requirements or take any other direct or indirect action with respect to bank holding companies and their nonbank subsidiaries (including nonbank subsidiaries of depository institutions), subject to the same standards and requirements as are applicable to the Board under such provisions.</continuation-text></subsection> <subsection id="H1B3A27B842FCA5812E81448270C2FA7"><enum>(b)</enum><header>Certain examinations authorized</header><text>Nothing in this section shall prevent the Federal Deposit Insurance Corporation, if the Corporation finds it necessary to determine the condition of an insured depository institution for insurance purposes, from examining an affiliate of any insured depository institution, pursuant to its authority under section 10(b)(4) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, as may be necessary to disclose fully the relationship between the depository institution and the affiliate, and the effect of such relationship on the depository institution.</text></subsection></section> <section id="H84695E2B42A031D205169AB04E90A9A"><enum>119.</enum><header>Prohibition on FDIC assistance to affiliates and subsidiaries</header><text display-inline="no-display-inline">Section 11(a)(4)(B) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1821(a)(4)(B)">12 U.S.C. 1821(a)(4)(B)</external-xref>) is amended by striking <quote>to benefit any shareholder of</quote> and inserting <quote>to benefit any shareholder, affiliate (other than an insured depository institution that receives assistance in accordance with the provisions of this Act), or subsidiary of</quote>.</text></section></subtitle> <subtitle id="H02C73CC1437164DF365652B90679D86"><enum>C</enum><header>Subsidiaries of national banks</header> <section id="HDDF0C9244161780406D4519838DFD3B"><enum>121.</enum><header>Permissible activities for subsidiaries of national banks</header> <subsection id="HAB83C896404EF0A9AC341FB9680004A"><enum>(a)</enum><header>Financial subsidiaries of national banks</header><text>Chapter one of title LXII of the Revised Statutes of United States (<external-xref legal-doc="usc" parsable-cite="usc/12/21">12 U.S.C. 21</external-xref> et seq.) is amended—</text> <paragraph id="H53AEE7814AC1E85245511383BBB9DF3"><enum>(1)</enum><text>by redesignating section 5136A as section 5136C; and</text></paragraph> <paragraph id="HB489BA044DCD40D7477B4DAFAD2435D"><enum>(2)</enum><text>by inserting after section 5136 (<external-xref legal-doc="usc" parsable-cite="usc/12/24">12 U.S.C. 24</external-xref>) the following new section:</text> <quoted-block id="HABBED2FF4687092F7FFDDE9200D6F68"> <section id="HE64F5B4047277756C7AC439BEEE6A1E"><enum>5136A.</enum><header>Subsidiaries of national banks</header> <subsection id="HF85D96D347314642B30C2CA9AD45F72"><enum>(a)</enum><header>Subsidiaries of national banks authorized to engage in financial activities</header> <paragraph id="HF714DFD54AB72461733C6FB272ED9DE"><enum>(1)</enum><header>Exclusive authority</header><text>No provision of section 5136 or any other provision of this title LXII of the Revised Statutes shall be construed as authorizing a subsidiary of a national bank to engage in, or own any share of or any other interest in any company engaged in, any activity that—</text> <subparagraph id="H3DC80AF742FAEA820809C0BBAEE91D5"><enum>(A)</enum><text>is not permissible for a national bank to engage in directly; or</text></subparagraph> <subparagraph id="HB01F1FB44AB8B779F93675B6657E18E"><enum>(B)</enum><text>is conducted under terms or conditions other than those that would govern the conduct of such activity by a national bank,</text></subparagraph><continuation-text continuation-text-level="paragraph">unless a national bank is specifically authorized by the express terms of a Federal statute and not by implication or interpretation to acquire shares of or an interest in, or to control, such subsidiary, such as by paragraph (2) of this subsection and section 25A of the Federal Reserve Act.</continuation-text></paragraph> <paragraph id="H2CEB8D5C469C93A2C22A0BAC46CFF49"><enum>(2)</enum><header>Specific authorization to conduct agency activities which are financial in nature</header><text>A national bank may control a company, or hold an interest in a company that is wholly owned by an insured depository institution or subsidiary thereof, that engages in agency activities that have been determined to be financial in nature or incidental to such financial activities pursuant to and in accordance with section 6(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> if—</text> <subparagraph id="HF0F8EAF740F84BADE87EA4940149B59"><enum>(A)</enum><text>the company engages in such activities solely as agent and not directly or indirectly as principal;</text></subparagraph> <subparagraph id="H3AC493B448227FD5AA925CA551A8A6E"><enum>(B)</enum><text>the national bank is well capitalized and well managed;</text></subparagraph> <subparagraph id="H4866C419401E0F890114FAA9972E56B"><enum>(C)</enum><text>all depository institution affiliates of the national bank are well capitalized and well managed; and</text></subparagraph> <subparagraph id="H6FF7EF7D46D481F7510E22811432B3E"><enum>(D)</enum><text>the bank has received the approval of the Comptroller of the Currency.</text></subparagraph></paragraph> <paragraph id="HF4A03ED64901CD518DB64EA85D69F7A"><enum>(3)</enum><header>Community needs requirement</header><text>A national bank may not acquire control of, or an interest in, any company under paragraph (2) unless the national bank, and all depository institution affiliates of the national bank, have achieved a rating of <quote>satisfactory record of meeting community credit needs</quote>, or better, at the most recent examination of each such bank or institution under the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></paragraph> <paragraph id="HFAD96EB54A605731BED345ABE7B488C"><enum>(4)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <subparagraph id="H6238B02B4A408ADD0B3C2B97FB60EA2"><enum>(A)</enum><header>Company; control; affiliate; subsidiary</header><text>The terms <term>company</term>, <term>control</term>, <term>affiliate</term>, and <term>subsidiary</term> have the same meanings as in section 2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subparagraph> <subparagraph id="H6940CAAB42828C3F3174859A8ED7BF9"><enum>(B)</enum><header>Well capitalized</header><text>The term <term>well capitalized</term> has the same meaning as in section 38 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> and, for purposes of this section, the Comptroller shall have exclusive jurisdiction to determine whether a national bank is well capitalized.</text></subparagraph> <subparagraph id="H767EA1B4474964FCB06B0EB4C5D12D8"><enum>(C)</enum><header>Well managed</header><text>The term <term>well managed</term> means—</text> <clause id="H8E4EBA21492BEDE123A9FA960129A16"><enum>(i)</enum><text>in the case of a depository institution that has been examined, unless otherwise determined in writing by the appropriate Federal banking agency—</text> <subclause id="H8DDD353B4CDC0C9A36426FA7F5F7B30"><enum>(I)</enum><text>the achievement of a composite rating of 1 or 2 under the Uniform Financial Institutions Rating System (or an equivalent rating under an equivalent rating system) in connection with the most recent examination or subsequent review of the depository institution; and</text></subclause> <subclause id="H703BBD04423EC0EF3BB63E99A610D21"><enum>(II)</enum><text>at least a rating of 2 for management, if that rating is given; or</text></subclause></clause> <clause id="H87E73ADB4424BE8EDCE373BDB5EF7E0"><enum>(ii)</enum><text>in the case of any depository institution that has not been examined, the existence and use of managerial resources that the appropriate Federal banking agency determines are satisfactory.</text></clause></subparagraph> <subparagraph id="H7E764F014D8674C7AA15FA98B163F58"><enum>(D)</enum><header>Incorporated definitions</header><text>The terms <term>appropriate Federal banking agency</term> and <term>depository institution</term> have the same meanings as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HCEC95DC3424B962D25B29B9F3F9818E"><enum>(b)</enum><header>Limitation on certain activities in subsidiaries</header><text>Section 21(a)(1) of the <act-name parsable-cite="BA33">Banking Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/378(a)(1)">12 U.S.C. 378(a)(1)</external-xref>) is amended—</text> <paragraph id="HD0AE21484F4478B590F0048AEAD24FD"><enum>(1)</enum><text>by inserting <quote>, or to be a subsidiary of any person, firm, corporation, association, business trust, or similar organization engaged (unless such subsidiary (A) was engaged in such securities activities as of September 15, 1997, or (B) is a nondepository subsidiary of (i) a foreign bank and is not also a subsidiary of a domestic depository institution, or (ii) an unincorporated private bank that is not insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>),</quote> after <quote>to engage at the same time</quote>; and</text></paragraph> <paragraph id="HF83557074AA6D551C7B67F8E891DB7E"><enum>(2)</enum><text>by inserting <quote>or any subsidiary of such bank, company, or institution</quote> after <quote>or private bankers</quote>.</text></paragraph></subsection> <subsection id="HC75E131E4939FB20F4476283B757D22"><enum>(c)</enum><header>Technical and conforming amendments</header> <paragraph id="HCF7A75564E6B84F986B686A867B88DE"><enum>(1)</enum><header>Antitying</header><text>Section 106(a) of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name> is amended by adding at the end the following new sentence: <quote>For purposes of this section, a subsidiary of a national bank which engages in activities as an agent pursuant to section 5136A(a)(2) shall be deemed to be a subsidiary of a bank holding company, and not a subsidiary of a bank.</quote>.</text></paragraph> <paragraph id="H9197FC0944F2485FF4AD3182BCEAE7E"><enum>(2)</enum><header>Section 23b</header><text>Section 23B(a) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/371c–1(a)">12 U.S.C. 371c–1(a)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="Federal Reserve Act" id="H0918C48D49B0CD2F40FDB39FBE75D9E"> <paragraph id="HC44890F149EBF7BA27510397457BB86"><enum>(4)</enum><header>Subsidiary of national bank</header><text>For purposes of this section, a subsidiary of a national bank which engages in activities as an agent pursuant to section 5136A(a)(2) shall be deemed to be an affiliate of the national bank and not a subsidiary of the bank.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H30A10629445EE4F3E6CB8AB48CF1B4D"><enum>(d)</enum><header>Clerical amendment</header><text>The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended—</text> <paragraph id="H8BF6CECD46228C64C2FF839065CB88F"><enum>(1)</enum><text>by redesignating the item relating to section 5136A as section 5136C; and</text></paragraph> <paragraph id="H6EE1EB3246484B22C89F019258BDE3C"><enum>(2)</enum><text>by inserting after the item relating to section 5136 the following new item:</text> <quoted-block style="USC" id="H5E61B9874F4AF3582742208446A485E"> <toc regeneration="no-regeneration"> <toc-entry level="section">5136A. Financial subsidiaries of national banks</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="H87B1FA854B4F2616128307AD7FB811F"><enum>122.</enum><header>Misrepresentations regarding depository institution liability for obligations of affiliates</header> <subsection id="HB6549AC948B25F4A180F6F96ED12CBE"><enum>(a)</enum><header>In general</header><text>Chapter 47 of title 18, United States Code, is amended by inserting after section 1007 the following new section:</text> <quoted-block style="USC" id="H54BC6C9643DD727CC2D0CFA6AB0C9BB"> <section id="HB889BA044CEE755052D5AD983D6CF7D"><enum>1008.</enum><header>Misrepresentations regarding financial institution liability for obligations of affiliates</header> <subsection id="HD77BDC3248B4A6F91FF2019E71E0026"><enum>(a)</enum><header>In general</header><text>No institution-affiliated party of an insured depository institution or institution-affiliated party of a subsidiary or affiliate of an insured depository institution shall fraudulently represent that the institution is or will be liable for any obligation of a subsidiary or other affiliate of the institution.</text></subsection> <subsection id="HAEAE80CB40B863E3ED2BFA9193FB9D4"><enum>(b)</enum><header>Criminal penalty</header><text>Whoever violates subsection (a) shall be fined under this title, imprisoned for not more than 1 year, or both.</text></subsection> <subsection id="H7BC3F7724C52BE4981F164A0C18A2C5"><enum>(c)</enum><header>Institution-affiliated party defined</header><text>For purposes of this section, the term <term>institution-affiliated party</term> with respect to a subsidiary or affiliate has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, except that references to an insured depository institution shall be deemed to be references to a subsidiary or affiliate of an insured depository institution.</text></subsection> <subsection id="H13064113493C5993BA5D3DB2F8F648C"><enum>(d)</enum><header>Other definitions</header><text>For purposes of this section, the terms <term>affiliate</term>, <term>insured depository institution</term>, and <term>subsidiary</term> have same meanings as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H64D440294B175EEAFF185282D5C3DD5"><enum>(b)</enum><header>Clerical amendment</header><text>The table of sections for chapter 47 of title 18, United States Code, is amended by inserting after the item relating to section 1007 the following new item:</text> <quoted-block style="USC" id="HF780937F44B8A0516C1BF8BDF4AAA5F"> <toc regeneration="no-regeneration"> <toc-entry level="section">1008. Misrepresentations regarding financial institution liability for obligations of affiliates</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H06EC757D4823F938C940E69FD8800FA"><enum>123.</enum><header>Repeal of stock loan limit in <act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text display-inline="no-display-inline">Section 11 of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/248">12 U.S.C. 248</external-xref>) is amended by striking the paragraph designated as <quote>(m)</quote> and inserting <quote>(m) [Repealed]</quote>.</text></section></subtitle> <subtitle id="H5D027E4C4FF2CBA0C4CF4C9EBAD04FC"><enum>D</enum><header>Wholesale financial holding companies; wholesale financial institutions</header> <chapter id="H82589274495A2E142CA56DA6BD98D1D"><enum>1</enum><header>Wholesale financial holding companies</header> <section id="H8CD332554D7D597E8E5BDEADA2C22BF"><enum>131.</enum><header>Wholesale financial holding companies established</header> <subsection id="H6488CC494EB5926BEEC9F6A65CB9EEB"><enum>(a)</enum><header>Definition and supervision</header><text><external-xref legal-doc="act" parsable-cite="BHC65/10">Section 10</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841</external-xref> et seq.) is amended to read as follows:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="HE83ABFBF45F84AE4D2D300B2E0076C6"> <section id="HB1FAA5EB470299A8FF50548ABE00F2D"><enum>10.</enum><header>Wholesale financial holding companies</header> <subsection id="H776840644F0A3E6E36A1AC96D207C29"><enum>(a)</enum><header>Companies that control wholesale financial institutions</header> <paragraph id="H0588759348723E735E58CBB182AD4B2"><enum>(1)</enum><header>Wholesale financial holding company defined</header><text>The term <term>wholesale financial holding company</term> means any company that—</text> <subparagraph id="HEDEC26764FB1317A0912B889EA0223E"><enum>(A)</enum><text>is registered as a bank holding company;</text></subparagraph> <subparagraph id="H7B027B9046DD84954B826290D7429DB"><enum>(B)</enum><text>is predominantly engaged in financial activities as defined in section 6(f)(2);</text></subparagraph> <subparagraph id="H70824145429C407765BDB7B16FFB34B"><enum>(C)</enum><text>controls 1 or more wholesale financial institutions;</text></subparagraph> <subparagraph id="HC2ECF8A540DC8BF66DAC06AAD0E6B5D"><enum>(D)</enum><text>does not control—</text> <clause id="H3301F3134D9D5001682FC79150B7D46"><enum>(i)</enum><text>a bank other than a wholesale financial institution;</text></clause> <clause id="HF776737A4D1524964F16899E37B76BF"><enum>(ii)</enum><text>an insured bank other than an institution permitted under subparagraph (D), (F), or (G) of section 2(c)(2); or</text></clause> <clause id="H465935964F5169933FF4E88A3989E2D"><enum>(iii)</enum><text>a savings association; and</text></clause></subparagraph> <subparagraph id="H96B0B8624BD6F736A3920484EB233FF"><enum>(E)</enum><text>is not a foreign bank (as defined in section 1(b)(7) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>).</text></subparagraph></paragraph> <paragraph id="H647145C04AAC048E2260268AA8E441E"><enum>(2)</enum><header>Savings Association transition period</header><text>Notwithstanding paragraph (1)(D)(iii), the Board may permit a company that controls a savings association and that otherwise meets the requirements of paragraph (1) to become supervised under paragraph (1), if the company divests control of any such savings association within such period, not to exceed 5 years after becoming supervised under paragraph (1), as permitted by the Board.</text></paragraph></subsection> <subsection id="HE1EB0237442524856B1AFFA1A493AFA"><enum>(b)</enum><header>Supervision by the Board</header> <paragraph id="H9B37ED034549C6D944D5EE85D288089"><enum>(1)</enum><header>In general</header><text>The provisions of this section shall govern the reporting, examination, and capital requirements of wholesale financial holding companies.</text></paragraph> <paragraph id="H6885065243DB165A5B560B8440BB02B"><enum>(2)</enum><header>Reports</header> <subparagraph id="HC281051B4E72E920111F8E9F74FC400"><enum>(A)</enum><header>In general</header><text>The Board from time to time may require any wholesale financial holding company and any subsidiary of such company to submit reports under oath to keep the Board informed as to—</text> <clause id="HC2B08014433595EDCCA93B9F5FA21F3"><enum>(i)</enum><text>the company’s or subsidiary’s activities, financial condition, policies, systems for monitoring and controlling financial and operational risks, and transactions with depository institution subsidiaries of the holding company; and</text></clause> <clause id="H12DBA5094341BC88845463AACC75314"><enum>(ii)</enum><text>the extent to which the company or subsidiary has complied with the provisions of this Act and regulations prescribed and orders issued under this Act.</text></clause></subparagraph> <subparagraph id="H0EE21600468E1A93015617BC28C6AAE"><enum>(B)</enum><header>Use of existing reports</header> <clause id="H441784614E9B2B5376ED91A32056D46"><enum>(i)</enum><header>In general</header><text>The Board shall, to the fullest extent possible, accept reports in fulfillment of the Board’s reporting requirements under this paragraph that the wholesale financial holding company or any subsidiary of such company has provided or been required to provide to other Federal and State supervisors or to appropriate self-regulatory organizations.</text></clause> <clause id="H28882190418A3A8F24B134BCBEA5176"><enum>(ii)</enum><header>Availability</header><text>A wholesale financial holding company or a subsidiary of such company shall provide to the Board, at the request of the Board, a report referred to in clause (i).</text></clause></subparagraph> <subparagraph id="H171DDE43464E513B0905D6B87D1EA85"><enum>(C)</enum><header>Exemptions from reporting requirements</header> <clause id="H1A08D683465353EDC36C67A88554B9F"><enum>(i)</enum><header>In general</header><text>The Board may, by regulation or order, exempt any company or class of companies, under such terms and conditions and for such periods as the Board shall provide in such regulation or order, from the provisions of this paragraph and any regulation prescribed under this paragraph.</text></clause> <clause id="H4188F2414A1BA4A9261980A8BC32B79"><enum>(ii)</enum><header>Criteria for consideration</header><text>In making any determination under clause (i) with regard to any exemption under such clause, the Board shall consider, among such other factors as the Board may determine to be appropriate, the following factors:</text> <subclause id="H3B70BBF04318D1EF2FCDF89408F0576"><enum>(I)</enum><text>Whether information of the type required under this paragraph is available from a supervisory agency (as defined in section 1101(7) of the <act-name parsable-cite="RFPA78">Right to Financial Privacy Act of 1978</act-name>) or a foreign regulatory authority of a similar type.</text></subclause> <subclause id="HCDC9B5CD4E97006AF3E6B9B61122DAC"><enum>(II)</enum><text>The primary business of the company.</text></subclause> <subclause id="H074DD9A94F2C1FDCF24DE2B1FF00E7B"><enum>(III)</enum><text>The nature and extent of the domestic and foreign regulation of the activities of the company.</text></subclause></clause></subparagraph></paragraph> <paragraph id="HE46C0576496D5433C68279B75817AFA"><enum>(3)</enum><header>Examinations</header> <subparagraph id="H23D01F5D4F5D08F848F22BAEAD75D68"><enum>(A)</enum><header>Limited use of examination authority</header><text>The Board may make examinations of each wholesale financial holding company and each subsidiary of such company in order to—</text> <clause id="H8F38AF454C0FC68EABCFC787C5178AB"><enum>(i)</enum><text>inform the Board regarding the nature of the operations and financial condition of the wholesale financial holding company and its subsidiaries;</text></clause> <clause id="H373625204D8BA0EF2B9465AD10D4C1D"><enum>(ii)</enum><text>inform the Board regarding—</text> <subclause id="H957B091E4DED82BF915A528027DBE5D"><enum>(I)</enum><text>the financial and operational risks within the wholesale financial holding company system that may affect any depository institution owned by such holding company; and</text></subclause> <subclause id="HD7A9F1114F606E8D4DDE2AB942F3F64"><enum>(II)</enum><text>the systems of the holding company and its subsidiaries for monitoring and controlling those risks; and</text></subclause></clause> <clause id="H45B8C4924417D30285D23AB746A6288"><enum>(iii)</enum><text>monitor compliance with the provisions of this Act and those governing transactions and relationships between any depository institution controlled by the wholesale financial holding company and any of the company’s other subsidiaries.</text></clause></subparagraph> <subparagraph id="H17C00E5844B36F21F3D353A7A7C6CF7"><enum>(B)</enum><header>Restricted focus of examinations</header><text>The Board shall, to the fullest extent possible, limit the focus and scope of any examination of a wholesale financial holding company under this paragraph to—</text> <clause id="H159F5CAC49FBAC76BC4C338DB2BD00A"><enum>(i)</enum><text>the holding company; and</text></clause> <clause id="H54F8B08A424E6039714A2B806243E5C"><enum>(ii)</enum><text>any subsidiary (other than an insured depository institution subsidiary) of the holding company that, because of the size, condition, or activities of the subsidiary, the nature or size of transactions between such subsidiary and any affiliated depository institution, or the centralization of functions within the holding company system, could have a materially adverse effect on the safety and soundness of any depository institution affiliate of the holding company.</text></clause></subparagraph> <subparagraph id="HEA7BEDA84433490AA7F9139B104E5DC"><enum>(C)</enum><header>Deference to bank examinations</header><text>The Board shall, to the fullest extent possible, use the reports of examination of depository institutions made by the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision or the appropriate State depository institution supervisory authority for the purposes of this section.</text></subparagraph> <subparagraph id="H6E9CEF4844B1FBB8A2DD9B9F5266E3E"><enum>(D)</enum><header>Deference to other examinations</header><text>The Board shall, to the fullest extent possible, address the circumstances which might otherwise permit or require an examination by the Board by forgoing an examination and by instead reviewing the reports of examination made of—</text> <clause id="HBD79A54343817198FD085191DB25F2E"><enum>(i)</enum><text>any registered broker or dealer or any registered investment adviser by or on behalf of the Commission; and</text></clause> <clause id="H0D462AF4447FEE1824F83AB89F84C81"><enum>(ii)</enum><text>any licensed insurance company by or on behalf of any State government insurance agency responsible for the supervision of the insurance company.</text></clause></subparagraph> <subparagraph id="H5EC7D71B498E34B0E7DD059CC8807FC"><enum>(E)</enum><header>Confidentiality of reported information</header> <clause id="H3DEB99214EDC91593AAF139745CD924"><enum>(i)</enum><header>In general</header><text>Notwithstanding any other provision of law, the Board shall not be compelled to disclose any nonpublic information required to be reported under this paragraph, or any information supplied to the Board by any domestic or foreign regulatory agency, that relates to the financial or operational condition of any wholesale financial holding company or any subsidiary of such company.</text></clause> <clause id="HE88A2D194C3893F7DD229299CED4C18"><enum>(ii)</enum><header>Compliance with requests for information</header><text>No provision of this subparagraph shall be construed as authorizing the Board to withhold information from the Congress, or preventing the Board from complying with a request for information from any other Federal department or agency for purposes within the scope of such department’s or agency’s jurisdiction, or from complying with any order of a court of competent jurisdiction in an action brought by the United States or the Board.</text></clause> <clause id="H788C3741489A185B54BB41ABAAB3C66"><enum>(iii)</enum><header>Coordination with other law</header><text>For purposes of section 552 of title 5, United States Code, this subparagraph shall be considered to be a statute described in subsection (b)(3)(B) of such section.</text></clause> <clause id="HAD93BF644CCDD48110E2358BC074146"><enum>(iv)</enum><header>Designation of confidential information</header><text>In prescribing regulations to carry out the requirements of this subsection, the Board shall designate information described in or obtained pursuant to this paragraph as confidential information.</text></clause></subparagraph> <subparagraph id="H3786CCC2458C1587D76412A75EA2AB7"><enum>(F)</enum><header>Costs</header><text>The cost of any examination conducted by the Board under this section may be assessed against, and made payable by, the wholesale financial holding company.</text></subparagraph></paragraph> <paragraph id="H9C84673D4A66B9D65BB558BF17D6D7F"><enum>(4)</enum><header>Capital adequacy guidelines</header> <subparagraph id="HC6A925224F61B2BF1693D6A404C4C62"><enum>(A)</enum><header>Capital adequacy provisions</header><text>Subject to the requirements of, and solely in accordance with, the terms of this paragraph, the Board may adopt capital adequacy rules or guidelines for wholesale financial holding companies.</text></subparagraph> <subparagraph id="H7154F5FF42C03A6BC28516AEE7F99AB"><enum>(B)</enum><header>Method of calculation</header><text>In developing rules or guidelines under this paragraph, the following provisions shall apply:</text> <clause id="H1653065844E016A3AE3F7693D8C9175"><enum>(i)</enum><header>Focus on double leverage</header><text>The Board shall focus on the use by wholesale financial holding companies of debt and other liabilities to fund capital investments in subsidiaries.</text></clause> <clause id="H50D76A364F30294E4F833CBE4BEA4DB"><enum>(ii)</enum><header>No unweighted capital ratio</header><text>The Board shall not, by regulation, guideline, order, or otherwise, impose under this section a capital ratio that is not based on appropriate risk-weighting considerations.</text></clause> <clause id="H59CDDD7A4FA3DC339D9CA694B3BB357"><enum>(iii)</enum><header>No capital requirement on regulated entities</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, standards, guidelines, or requirements upon any subsidiary that—</text> <subclause id="H899CB8EF48E20367C320A0B287DD476"><enum>(I)</enum><text>is not a depository institution; and</text></subclause> <subclause id="H7F8F220A49F99FEB0888C58BEBEF125"><enum>(II)</enum><text>is in compliance with applicable capital requirements of another Federal regulatory authority (including the Securities and Exchange Commission) or State insurance authority.</text></subclause></clause> <clause id="HE7154FF8417F138F83DA419BD4200B3"><enum>(iv)</enum><header>Certain subsidiaries</header><text>The Board shall not, by regulation, guideline, order or otherwise, prescribe or impose any capital or capital adequacy rules, standards, guidelines, or requirements upon any subsidiary that is not a depository institution and that is registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>, except that this clause shall not be construed as preventing the Board from imposing capital or capital adequacy rules, guidelines, standards, or requirements with respect to activities of a registered investment adviser other than investment advisory activities or activities incidental to investment advisory activities.</text></clause> <clause id="H6CB68FE04A235D3FEE7A77A4C8F2631"><enum>(v)</enum><header>Limitations on indirect action</header><text>In developing, establishing, or assessing holding company capital or capital adequacy rules, guidelines, standards, or requirements for purposes of this paragraph, the Board shall not take into account the activities, operations, or investments of an affiliated investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>, if the investment company is not—</text> <subclause id="HA136ACC9460AA11CA9684CBA1B52E5B"><enum>(I)</enum><text>a bank holding company; or</text></subclause> <subclause id="H546E37B44187B6A256A7E2BC97E2DFE"><enum>(II)</enum><text>controlled by a bank holding company by reason of ownership by the bank holding company (including through all of its affiliates) of 25 percent or more of the shares of the investment company, where the shares owned by the bank holding company have a market value equal to more than $1,000,000.</text></subclause></clause> <clause id="H4FD7DA224A1D5981B0C95F93DCBDB83"><enum>(vi)</enum><header>Appropriate exclusions</header><text>The Board shall take full account of—</text> <subclause id="HA6E1B32E4B2DD4D4422068AD6DD274C"><enum>(I)</enum><text>the capital requirements made applicable to any subsidiary that is not a depository institution by another Federal regulatory authority or State insurance authority; and</text></subclause> <subclause id="H59735CEE4A283EC4FE4E3291B27FCE1"><enum>(II)</enum><text>industry norms for capitalization of a company’s unregulated subsidiaries and activities.</text></subclause></clause> <clause id="H16674A2942B636AF7AE65D9A43ED27A"><enum>(vii)</enum><header>Internal risk management models</header><text>The Board may incorporate internal risk management models of wholesale financial holding companies into its capital adequacy guidelines or rules and may take account of the extent to which resources of a subsidiary depository institution may be used to service the debt or other liabilities of the wholesale financial holding company.</text></clause></subparagraph></paragraph></subsection> <subsection id="H40F96AFE4312F68396B16392E2C879D"><enum>(c)</enum><header>Nonfinancial activities and investments</header> <paragraph id="HE78FE8D944A7C67A5C2DB591A5BEAAB"><enum>(1)</enum><header>Grandfathered activities</header> <subparagraph id="HA85DE1D04C465947F5D5368570EEB47"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a company that becomes a wholesale financial holding company may continue to engage, directly or indirectly, in any activity and may retain ownership and control of shares of a company engaged in any activity if—</text> <clause id="H5C609B12427782C3C95674B27FDF0BF"><enum>(i)</enum><text>on the date of the enactment of the &short-title1;, such wholesale financial holding company was lawfully engaged in that nonfinancial activity, held the shares of such company, or had entered into a contract to acquire shares of any company engaged in such activity; and</text></clause> <clause id="HAF798DEF4F18DBCF2D4C22AEB1B7E2E"><enum>(ii)</enum><text>the company engaged in such activity continues to engage only in the same activities that such company conducted on the date of the enactment of the &short-title1;, and other activities permissible under this Act.</text></clause></subparagraph> <subparagraph id="HCE4AEE69424DB2C601B71FA351F0083"><enum>(B)</enum><header>No expansion of grandfathered commercial activities through merger or consolidation</header><text>A wholesale financial holding company that engages in activities or holds shares pursuant to this paragraph, or a subsidiary of such wholesale financial holding company, may not acquire, in any merger, consolidation, or other type of business combination, assets of any other company which is engaged in any activity which the Board has not determined to be financial in nature or incidental to activities that are financial in nature under section 6(c).</text></subparagraph> <subparagraph id="HBB68D8D04B1E338CB5F309A49869F37"><enum>(C)</enum><header>Limitation to single exemption</header><text>No company that engages in any activity or controls any shares under subsection (f) of section 6 may engage in any activity or own any shares pursuant to this paragraph.</text></subparagraph></paragraph> <paragraph id="H3007B43B48F6AE64326149AA98D5D3F"><enum>(2)</enum><header>Commodities</header> <subparagraph id="H8A89C0DD4243F47D50E93999E1BEDA9"><enum>(A)</enum><header>In general</header><text>Notwithstanding section 4(a), a wholesale financial holding company which was predominately engaged as of January 1, 1997, in financial activities in the United States (or any successor to any such company) may engage in, or directly or indirectly own or control shares of a company engaged in, activities related to the trading, sale, or investment in commodities and underlying physical properties that were not permissible for bank holding companies to conduct in the United States as of January 1, 1997, if such wholesale financial holding company, or any subsidiary of such holding company, was engaged directly, indirectly, or through any such company in any of such activities as of January 1, 1997, in the United States.</text></subparagraph> <subparagraph id="H799DD04442270F5C757FE180EA24D06"><enum>(B)</enum><header>Limitation</header><text>The attributed aggregate consolidated assets of a wholesale financial holding company held under the authority granted under this paragraph and not otherwise permitted to be held by all wholesale financial holding companies under this section may not exceed 5 percent of the total consolidated assets of the wholesale financial holding company, except that the Board may increase such percentage of total consolidated assets by such amounts and under such circumstances as the Board considers appropriate, consistent with the purposes of this Act.</text></subparagraph></paragraph> <paragraph id="H805DB8104A081736FEE706A66FB3CC0"><enum>(3)</enum><header>Cross marketing restrictions</header><text>A wholesale financial holding company shall not permit—</text> <subparagraph id="H1501D7554D7D4809DFF96886E2B1EF1"><enum>(A)</enum><text>any company whose shares it owns or controls pursuant to paragraph (1) or (2) to offer or market any product or service of an affiliated wholesale financial institution; or</text></subparagraph> <subparagraph id="H42824F3A41301E0B67DAD3BA43C2B8E"><enum>(B)</enum><text>any affiliated wholesale financial institution to offer or market any product or service of any company whose shares are owned or controlled by such wholesale financial holding company pursuant to such paragraphs.</text></subparagraph></paragraph></subsection> <subsection id="H88A2924E4B61E2C944057AA8F578742"><enum>(d)</enum><header>Qualification of foreign bank as wholesale financial holding company</header> <paragraph id="H5489FA504488C931703CDCB4A2E9F20"><enum>(1)</enum><header>In general</header><text>Any foreign bank, or any company that owns or controls a foreign bank, that operates a branch, agency, or commercial lending company in the United States, including a foreign bank or company that owns or controls a wholesale financial institution, may request a determination from the Board that such bank or company be treated as a wholesale financial holding company (other than for purposes of subsection (c)), subject to such conditions as the Board deems appropriate, giving due regard to the principle of national treatment and equality of competitive opportunity and the requirements imposed on domestic banks and companies.</text></paragraph> <paragraph id="H93F0AE7545970F9675CB7A81CA2BD8F"><enum>(2)</enum><header>Conditions for treatment as a wholesale financial holding company</header><text>A foreign bank and a company that owns or controls a foreign bank may not be treated as a wholesale financial holding company unless the bank and company meet and continue to meet the following criteria:</text> <subparagraph id="HEC6559664DBC90017C335F8A39E4866"><enum>(A)</enum><header>No insured deposits</header><text>No deposits held directly by a foreign bank or through an affiliate (other than an institution described in subparagraph (D) or (F) of section 2(c)(2)) are insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subparagraph> <subparagraph id="H75148CA147EF8BEDB9CB37A5893635D"><enum>(B)</enum><header>Capital standards</header><text>The foreign bank meets risk-based capital standards comparable to the capital standards required for a wholesale financial institution, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></subparagraph> <subparagraph id="H576734C049D91D77191E1F9E94B96CD"><enum>(C)</enum><header>Transaction with affiliates</header><text>Transactions between a branch, agency, or commercial lending company subsidiary of the foreign bank in the United States, and any securities affiliate or company in which the foreign bank (or any company that owns or controls such foreign bank), has invested and which engages in any activity authorized only as a result of the application of subsection (c) or (g) of section 6, comply with the provisions of sections 23A and 23B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> in the same manner and to the same extent as such transactions would be required to comply with such sections if the foreign bank were a member bank.</text></subparagraph></paragraph> <paragraph id="H65C18D844A4E5F589A2E39A1F2F2E76"><enum>(3)</enum><header>Treatment as a wholesale financial institution</header><text>Any foreign bank which is, or is affiliated with a company which is, treated as a wholesale financial holding company under this subsection shall be treated as a wholesale financial institution for purposes of paragraphs (1)(C) and (3) of section 9B(c) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, and any such foreign bank or company shall be subject to paragraphs (3), (4), and (5) of section 9B(d) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, except that the Board may adopt such modifications, conditions, or exemptions as the Board deems appropriate, giving due regard to the principle of national treatment and equality of competitive opportunity.</text></paragraph> <paragraph id="HC049C30E492CE3B0D1BD2E92C9C3965"><enum>(4)</enum><header>Supervision of foreign bank which maintains no banking presence other than control of a wholesale financial institution</header><text>A foreign bank that owns or controls a wholesale financial institution but does not operate a branch, agency, or commercial lending company in the United States (and any company that owns or controls such foreign bank) may request a determination from the Board that such bank or company be treated as a wholesale financial holding company, except that such bank or company shall be subject to the restrictions of paragraphs (2)(A) and (3) of this subsection.</text></paragraph> <paragraph id="HFAE1BA0C435F1B22D55311A1D6FDF08"><enum>(5)</enum><header>No effect on other provisions</header><text>This section shall not be construed as limiting the authority of the Board under the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> with respect to the regulation, supervision, or examination of foreign banks and their offices and affiliates in the United States.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HD44C7B844454383525DAA08C804240C"><enum>(b)</enum><header>Uninsured State banks</header><text><external-xref legal-doc="act" parsable-cite="FRA/9">Section 9</external-xref> of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/321">12 U.S.C. 321</external-xref> et seq.) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="Federal Reserve Act" id="HF68A143540DCEBB1742C53A82BACABE"> <paragraph id="H783E8DB145C245D36F611E9CE430F8F"><enum>(24)</enum><header>Enforcement authority over uninsured State member banks</header><text>Section 3(u) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, subsections (j) and (k) of section 7 of such Act, and subsections (b) through (n), (s), (u), and (v) of section 8 of such Act shall apply to an uninsured State member bank in the same manner and to the same extent such provisions apply to an insured State member bank and any reference in any such provision to <quote>insured depository institution</quote> shall be deemed to be a reference to <quote>uninsured State member bank</quote> for purposes of this paragraph.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H58676B4A4AFAFE87455956B9EA4283F"><enum>132.</enum><header>Authorization to release reports</header> <subsection id="H23EF963A41D4170C73BDA780F4A8B18"><enum>(a)</enum><header><act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text>The last sentence of the eighth undesignated paragraph of <external-xref legal-doc="act" parsable-cite="FRA/9">section 9</external-xref> of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/326">12 U.S.C. 326</external-xref>) is amended to read as follows: <quote>The Board of Governors of the Federal Reserve System, at its discretion, may furnish reports of examination or other confidential supervisory information concerning State member banks or any other entities examined under any other authority of the Board to any Federal or State authorities with supervisory or regulatory authority over the examined entity, to officers, directors, or receivers of the examined entity, and to any other person that the Board determines to be proper.</quote>.</text></subsection> <subsection id="H2AF839A74550784A11688DBA989F77E"><enum>(b)</enum><header>Commodity Futures Trading Commission</header><text>The <act-name parsable-cite="RFPA78">Right to Financial Privacy Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3401">12 U.S.C. 3401</external-xref> et seq.) is amended—</text> <paragraph id="H78DE5379402C3CA940997F9737A8339"><enum>(1)</enum><text>in section 1101(7) (<external-xref legal-doc="usc" parsable-cite="usc/12/3401(7)">12 U.S.C. 3401(7)</external-xref>)—</text> <subparagraph id="H5009F0014CC8D82565B1D4B5C3E6468"><enum>(A)</enum><text>by redesignating subparagraphs (G) and (H) as subparagraphs (H) and (I), respectively; and</text></subparagraph> <subparagraph id="H25CDBF994C585E093E871F9BE9ED101"><enum>(B)</enum><text>by inserting after subparagraph (F) the following new subparagraph:</text> <quoted-block id="HEF99ED3641F1526FDB6DE28A7D35CDA"> <subparagraph id="HFE192EF0427064FDF6B3FEAECCCD51C"><enum>(G)</enum><text>the Commodity Futures Trading Commission; or</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="HA9774E1844AE43C54D3253B930E329F"><enum>(2)</enum><text>in section 1112(e) (<external-xref legal-doc="usc" parsable-cite="usc/12/3412(e)">12 U.S.C. 3412(e)</external-xref>), by striking <quote>and the Securities and Exchange Commission</quote> and inserting <quote>, the Securities and Exchange Commission, and the Commodity Futures Trading Commission</quote>.</text></paragraph></subsection></section> <section id="H0829F3B6408FD132124F2EB65DC1289"><enum>133.</enum><header>Conforming amendments</header> <subsection id="H900F084B4651BEBA40024B8536B812F"><enum>(a)</enum><header><act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name></header> <paragraph id="H15C01C294C6453E0332B12BA58A2E52"><enum>(1)</enum><header>Definitions</header><text><external-xref legal-doc="act" parsable-cite="BHC65/2">Section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1842">12 U.S.C. 1842</external-xref>) is amended by adding at the end the following new subsections:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H07F4EC2A44A78C339354CD90D4B2824"> <subsection id="HBC89E2C44377B56634D9AE903DB698F"><enum>(p)</enum><header>Wholesale financial institution</header><text>The term <term>wholesale financial institution</term> means a wholesale financial institution subject to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></subsection> <subsection id="H5017C1B246B16AB75516ABB3D7A6D00"><enum>(q)</enum><header>Commission</header><text>The term <term>Commission</term> means the Securities and Exchange Commission.</text></subsection> <subsection id="H4FBA3580459889A6B0DAB18208D1F8E"><enum>(r)</enum><header>Depository institution</header><text>The term <term>depository institution</term>—</text> <paragraph id="HAF8CA20F467E8881E1383B9B9D00C63"><enum>(1)</enum><text>has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; and</text></paragraph> <paragraph id="H8555598547EC127D548DACAAB379B9F"><enum>(2)</enum><text>includes a wholesale financial institution.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HA6DBD6434139ED8E634C3FBE2D0342C"><enum>(2)</enum><header>Definition of bank includes wholesale financial institution</header><text>Section 2(c)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841(c)(1)">12 U.S.C. 1841(c)(1)</external-xref>) is amended by adding at the end the following new subparagraph:</text> <quoted-block act-name="Bank Holding Company Act of 1956" id="H8E6E561E4D5D7F0644D3539FB397253"> <subparagraph id="H596696E845BF2E7D9893B98AF4D4BFD"><enum>(C)</enum><text>A wholesale financial institution.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HF795B2B943207AD3FC9CE6BF1860FBE"><enum>(3)</enum><header>Incorporated definitions</header><text>Section 2(n) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841(n)">12 U.S.C. 1841(n)</external-xref>) is amended by inserting <quote><quote>insured bank</quote>,</quote> after <quote><quote>in danger of default</quote>,</quote>.</text></paragraph> <paragraph id="H0AF960CC4676EE43B4A5E5A9B62701F"><enum>(4)</enum><header>Exception to deposit insurance requirement</header><text>Section 3(e) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1842(e)">12 U.S.C. 1842(e)</external-xref>) is amended by adding at the end the following: <quote>This subsection shall not apply to a wholesale financial institution.</quote>.</text></paragraph></subsection> <subsection id="HA3E8351B45C04672DA17F894E7FE10B"><enum>(b)</enum><header><act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name></header><text>Section 3(q)(2)(A) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1813(q)(2)(A)">12 U.S.C. 1813(q)(2)(A)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="HE9E193C84981432D8E1FBCA7AA75DEC"> <subparagraph id="H2E4D44734C174A6F550D97AD21F0A4A"><enum>(A)</enum><text>any State member insured bank (except a District bank) and any wholesale financial institution as authorized pursuant to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>;</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section></chapter> <chapter id="H446CD588422CA91643EF49B126132DA"><enum>2</enum><header>Wholesale financial institutions</header> <section id="H0807929E47C73636044D358CDA23B9F"><enum>136.</enum><header>Wholesale financial institutions</header> <subsection id="H4B60C6184EB225B9BD2C7089EA4FD27"><enum>(a)</enum><header>National wholesale financial institutions</header> <paragraph id="HB4B9F6FB4CA5020C86B8F08BA282C9F"><enum>(1)</enum><header>In general</header><text>Chapter one of title LXII of the Revised Statutes of the United States (<external-xref legal-doc="usc" parsable-cite="usc/12/21">12 U.S.C. 21</external-xref> et seq.) is amended by inserting after section 5136A (as added by section 121(a) of this title) the following new section:</text> <quoted-block id="H1226747042D95334C2797A9EB99333C"> <section id="H25F12E734346542B623952B6D8D0500"><enum>5136B.</enum><header>National wholesale financial institutions</header> <subsection id="H6B46B6F744DA1031D9EB178889D6422"><enum>(a)</enum><header>Authorization of the Comptroller required</header><text>A national bank may apply to the Comptroller on such forms and in accordance with such regulations as the Comptroller may prescribe, for permission to operate as a national wholesale financial institution.</text></subsection> <subsection id="H083E0B2345D776243869B48743DCB01"><enum>(b)</enum><header>Regulation</header><text>A national wholesale financial institution may exercise, in accordance with such institution’s articles of incorporation and regulations issued by the Comptroller, all the powers and privileges of a national bank formed in accordance with section 5133 of the Revised Statutes of the United States, subject to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> and the limitations and restrictions contained therein.</text></subsection> <subsection id="HCC449E3D4E9BB64397BA58AEAE8D101"><enum>(c)</enum><header><act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name></header><text>A national wholesale financial institution shall be subject to the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HA3415FB64511AE897AF73E9319E4F1B"><enum>(2)</enum><header>Clerical amendment</header><text>The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended by inserting after the item relating to section 5136A (as added by section 121(d) of this title) the following new item:</text> <quoted-block style="USC" id="H0619A734442EEEC373C44295E6E5D12"> <toc regeneration="no-regeneration"> <toc-entry level="section">5136B. National wholesale financial institutions</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H8F9AAABD47D42E6BB0FDB6B358DFB6B"><enum>(b)</enum><header>State wholesale financial institutions</header><text>The <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/221">12 U.S.C. 221</external-xref> et seq.) is amended by inserting after section 9A the following new section:</text> <quoted-block act-name="Federal Reserve Act" id="HEB7F037A4EC7DB74E4787BAD3D3D9FB"> <section id="HDF6647CF466E3C24E5EEE69DF5830B9"><enum>9B.</enum><header>Wholesale financial institutions</header> <subsection id="H73A3506C4D95A2139AA425B952ADBD6"><enum>(a)</enum><header>Application for membership as wholesale financial institution</header> <paragraph id="H80D87F724E50517D73431396A76FEDB"><enum>(1)</enum><header>Application required</header> <subparagraph id="H404BB6824E5F250BAA1415A2B5C4E43"><enum>(A)</enum><header>In general</header><text>Any bank may apply to the Board of Governors of the Federal Reserve System to become a wholesale financial institution and, as a wholesale financial institution, to subscribe to the stock of the Federal reserve bank organized within the district where the applying bank is located.</text></subparagraph> <subparagraph id="H51816BEC4FA96DC4205605A0A5F2714"><enum>(B)</enum><header>Treatment as member bank</header><text>Any application under subparagraph (A) shall be treated as an application under, and shall be subject to the provisions of, section 9.</text></subparagraph></paragraph> <paragraph id="H0BD7173741B3861A3BD55FB700A80F2"><enum>(2)</enum><header>Insurance termination</header><text>No bank the deposits of which are insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> may become a wholesale financial institution unless it has met all requirements under that Act for voluntary termination of deposit insurance.</text></paragraph></subsection> <subsection id="H50B0DA52477AB9A237166E91F2D00ED"><enum>(b)</enum><header>General requirements applicable to wholesale financial institutions</header> <paragraph id="H911C9711407049E7B9B99BAC83D7C11"><enum>(1)</enum><header><act-name parsable-cite="FRA">Federal Reserve Act</act-name></header><text>Except as otherwise provided in this section, wholesale financial institutions shall be member banks and shall be subject to the provisions of this Act that apply to member banks to the same extent and in the same manner as State member insured banks, except that a wholesale financial institution may terminate membership under this Act only with the prior written approval of the Board and on terms and conditions that the Board determines are appropriate to carry out the purposes of this Act.</text></paragraph> <paragraph id="H75A801DE4B5B459A6B0EE5B8CD8C7D1"><enum>(2)</enum><header>Prompt corrective action</header><text>A wholesale financial institution shall be deemed to be an insured depository institution for purposes of section 38 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> except that—</text> <subparagraph id="HD63F228E43450F098128F29661F2E46"><enum>(A)</enum><text>the relevant capital levels and capital measures for each capital category shall be the levels specified by the Board for wholesale financial institutions; and</text></subparagraph> <subparagraph id="HD25D294D49622FC920BA48BBBF9300B"><enum>(B)</enum><text>all references to the appropriate Federal banking agency or to the Corporation in that section shall be deemed to be references to the Board.</text></subparagraph></paragraph> <paragraph id="HF08FD5784C7762F6FA4245942C05F10"><enum>(3)</enum><header>Enforcement authority</header><text>Subsections (j) and (k) of section 7, subsections (b) through (n), (s), and (v) of section 8, and section 19 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> shall apply to a wholesale financial institution in the same manner and to the same extent as such provisions apply to State member insured banks and any reference in such sections to an insured depository institution shall be deemed to include a reference to a wholesale financial institution.</text></paragraph> <paragraph id="HC37063254249EB32945DCD93CF8EAAC"><enum>(4)</enum><header>Certain other statutes applicable</header><text>A wholesale financial institution shall be deemed to be a banking institution, and the Board shall be the appropriate Federal banking agency for such bank and all such bank’s affiliates, for purposes of the <act-name parsable-cite="ILSA">International Lending Supervision Act</act-name>.</text></paragraph> <paragraph id="HE153B1EA473B4C6D631889A5E5ABF80"><enum>(5)</enum><header>Bank merger Act</header><text>A wholesale financial institution shall be subject to sections 18(c) and 44 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> in the same manner and to the same extent the wholesale financial institution would be subject to such sections if the institution were a State member insured bank.</text></paragraph> <paragraph id="H7A27C4944A20E9B2AB3E9FABB7FCF95"><enum>(6)</enum><header>Branching</header><text>Notwithstanding any other provision of law, a wholesale financial institution may establish and operate a branch at any location on such terms and conditions as established by the Board and, in the case of a State-chartered wholesale financial institution, with the approval of the Board, and, in the case of a national bank wholesale financial institution, with the approval of the Comptroller of the Currency.</text></paragraph> <paragraph id="HBD9CC64E4287F8ECAC5496BD1099C8E"><enum>(7)</enum><header>Activities of out-of-state branches of wholesale financial institutions</header> <subparagraph id="HBDA293984C81C95D8CC30E88E8574D8"><enum>(A)</enum><header>General</header><text>A State-chartered wholesale financial institution shall be deemed to be a State bank and an insured State bank for purposes of paragraphs (1), (2), and (3) of section 24(j) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, and a national wholesale financial institution shall be deemed to be a national bank for purposes of section 5155(f) of the Revised Statutes of the United States.</text></subparagraph> <subparagraph id="HBB3735D84CADB188516506A1E99BCB3"><enum>(B)</enum><header>Definitions</header><text>The following definitions shall apply solely for purposes of applying paragraph (1):</text> <clause id="H85CEB8024C542603CD566F99A11D612"><enum>(i)</enum><header>Home State</header><text>The term <term>home State</term> means—</text> <subclause id="HCA72EC7E4149BCFA37AA6EB6008583A"><enum>(I)</enum><text>with respect to a national wholesale financial institution, the State in which the main office of the institution is located; and</text></subclause> <subclause id="H6A4B43B743BCA7ABE6B7F4AFCC288D0"><enum>(II)</enum><text>with respect to a State-chartered wholesale financial institution, the State by which the institution is chartered.</text></subclause></clause> <clause id="HDA23873745D38E888452A28402BB2F1"><enum>(ii)</enum><header>Host State</header><text>The term <term>host State</term> means a State, other than the home State of the wholesale financial institution, in which the institution maintains, or seeks to establish and maintain, a branch.</text></clause> <clause id="H83DFAC594511A06A08BABF8E70FAA69"><enum>(iii)</enum><header>Out-of-state bank</header><text>The term <term>out-of-State bank</term> means, with respect to any State, a wholesale financial institution whose home State is another State.</text></clause></subparagraph></paragraph> <paragraph id="H3B38C03948421D172973419934FEF2B"><enum>(8)</enum><header>Discrimination regarding interest rates</header><text>Section 27 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> shall apply to State-chartered wholesale financial institutions in the same manner and to the same extent as such provisions apply to State member insured banks and any reference in such section to a State-chartered insured depository institution shall be deemed to include a reference to a State-chartered wholesale financial institution.</text></paragraph> <paragraph id="HFBE451A942B98D3403661AA593EFEB6"><enum>(9)</enum><header>Preemption of State laws requiring deposit insurance for wholesale financial institutions</header><text>The appropriate State banking authority may grant a charter to a wholesale financial institution notwithstanding any State constitution or statute requiring that the institution obtain insurance of its deposits and any such State constitution or statute is hereby preempted solely for purposes of this paragraph.</text></paragraph> <paragraph id="H38A9856940B6BC5E99F7ED838E30EAD"><enum>(10)</enum><header>Parity for wholesale financial institutions</header><text>A State bank that is a wholesale financial institution under this section shall have all of the rights, powers, privileges, and immunities (including those derived from status as a federally chartered institution) of and as if it were a national bank, subject to such terms and conditions as established by the Board.</text></paragraph> <paragraph id="H7444667F475BA567D7B2B599A709D3E"><enum>(11)</enum><header><act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name></header><text>A State wholesale financial institution shall be subject to the <act-name parsable-cite="CRA77">Community Reinvestment Act of 1977</act-name>.</text></paragraph></subsection> <subsection id="H46E4358E44452EFCE3E65D8436C8EDC"><enum>(c)</enum><header>Specific requirements applicable to wholesale financial institutions</header> <paragraph id="H3CEF86BE4CC6368F921CF3A57EC208E"><enum>(1)</enum><header>Limitations on deposits</header> <subparagraph id="H14FA819D406489681A03DF8DB0CDBD8"><enum>(A)</enum><header>Minimum amount</header> <clause id="H6DE133404EE852B37909E3BAF8B7200"><enum>(i)</enum><header>In general</header><text>No wholesale financial institution may receive initial deposits of $100,000 or less, other than on an incidental and occasional basis.</text></clause> <clause id="H167134CA4AD19F675FF80B91E7EFEFF"><enum>(ii)</enum><header>Limitation on deposits of less than $100,000</header><text>No wholesale financial institution may receive initial deposits of $100,000 or less if such deposits constitute more than 5 percent of the institution’s total deposits.</text></clause></subparagraph> <subparagraph id="H45B469BE416F2C9AF1C933BDECCB597"><enum>(B)</enum><header>No deposit insurance</header><text>Except as otherwise provided in section 8A(f) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, no deposits held by a wholesale financial institution shall be insured deposits under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subparagraph> <subparagraph id="H24F3FF68433F2597F82D9EA4C7D8D81"><enum>(C)</enum><header>Advertising and disclosure</header><text>The Board shall prescribe regulations pertaining to advertising and disclosure by wholesale financial institutions to ensure that each depositor is notified that deposits at the wholesale financial institution are not federally insured or otherwise guaranteed by the United States Government.</text></subparagraph></paragraph> <paragraph id="H45FF8105422DAFBDECFA54B3A31D1CF"><enum>(2)</enum><header>Minimum capital levels applicable to wholesale financial institutions</header><text>The Board shall, by regulation, adopt capital requirements for wholesale financial institutions—</text> <subparagraph id="HE2E0DAB4417F2429EE1E76A9E809851"><enum>(A)</enum><text>to account for the status of wholesale financial institutions as institutions that accept deposits that are not insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; and</text></subparagraph> <subparagraph id="HF4C5BBAE4F50194AFB42EABA8EE6195"><enum>(B)</enum><text>to provide for the safe and sound operation of the wholesale financial institution without undue risk to creditors or other persons, including Federal reserve banks, engaged in transactions with the bank.</text></subparagraph></paragraph> <paragraph id="H0582D97B4D9360E432772283EA9A6A9"><enum>(3)</enum><header>Additional requirements applicable to wholesale financial institutions</header><text>In addition to any requirement otherwise applicable to State member insured banks or applicable, under this section, to wholesale financial institutions, the Board may impose, by regulation or order, upon wholesale financial institutions—</text> <subparagraph id="H75136E80450E67B687F9378CDA31E13"><enum>(A)</enum><text>limitations on transactions, direct or indirect, with affiliates to prevent—</text> <clause id="H846C88F74A3AA7F7487A87B6C1D31A6"><enum>(i)</enum><text>the transfer of risk to the deposit insurance funds; or</text></clause> <clause id="HC9C431064596F4B57466B080D718C53"><enum>(ii)</enum><text>an affiliate from gaining access to, or the benefits of, credit from a Federal reserve bank, including overdrafts at a Federal reserve bank;</text></clause></subparagraph> <subparagraph id="HC3DC7ACB43319A561A13079BD08E7C3"><enum>(B)</enum><text>special clearing balance requirements; and</text></subparagraph> <subparagraph id="H3902DB044CEED97AD2208BB4A334B6B"><enum>(C)</enum><text>any additional requirements that the Board determines to be appropriate or necessary to—</text> <clause id="H554F2FC54D14771711C3859FD46E2D8"><enum>(i)</enum><text>promote the safety and soundness of the wholesale financial institution or any insured depository institution affiliate of the wholesale financial institution;</text></clause> <clause id="HDDFB688247353DEBDBA5688A1DB555D"><enum>(ii)</enum><text>prevent the transfer of risk to the deposit insurance funds; or</text></clause> <clause id="H85889C6B47B80562337A6594B8B32EC"><enum>(iii)</enum><text>protect creditors and other persons, including Federal reserve banks, engaged in transactions with the wholesale financial institution.</text></clause></subparagraph></paragraph> <paragraph id="HF1D7F9E94FF093BFF49EB5BAE297DA8"><enum>(4)</enum><header>Exemptions for wholesale financial institutions</header><text>The Board may, by regulation or order, exempt any wholesale financial institution from any provision applicable to a member bank that is not a wholesale financial institution, if the Board finds that such exemption is not inconsistent with—</text> <subparagraph id="H230977E44F0D8BE353785988A78DE34"><enum>(A)</enum><text>the promotion of the safety and soundness of the wholesale financial institution or any insured depository institution affiliate of the wholesale financial institution;</text></subparagraph> <subparagraph id="H3A706A71412A04C364DA63B597CCA11"><enum>(B)</enum><text>the protection of the deposit insurance funds; and</text></subparagraph> <subparagraph id="H63D89A24412610509558119FBF4CD1E"><enum>(C)</enum><text>the protection of creditors and other persons, including Federal reserve banks, engaged in transactions with the wholesale financial institution.</text></subparagraph></paragraph> <paragraph id="HD84FA9684D7F5CFC033580AAE1D0261"><enum>(5)</enum><header>Limitation on transactions between a wholesale financial institution and an insured bank</header><text>For purposes of section 23A(d)(1) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, a wholesale financial institution that is affiliated with an insured bank shall not be a bank.</text></paragraph> <paragraph id="H4AB4504E4A23678460C1158B0474FFD"><enum>(6)</enum><header>No effect on other provisions</header><text>This section shall not be construed as limiting the Board’s authority over member banks under any other provision of law, or to create any obligation for any Federal Reserve bank to make, increase, renew, or extend any advance or discount under this Act to any member bank or other depository institution.</text></paragraph></subsection> <subsection id="H560243144017600A556855A8ECFB1F9"><enum>(d)</enum><header>Capital and managerial requirements</header> <paragraph id="H1104BEFF482A084F7415A1B3A5B7F4B"><enum>(1)</enum><header>In general</header><text>A wholesale financial institution shall be well capitalized and well managed.</text></paragraph> <paragraph id="H697C6E0A4C24C095D30616BFDC42EE7"><enum>(2)</enum><header>Notice to company</header><text>The Board shall promptly provide notice to a company that controls a wholesale financial institution whenever such wholesale financial institution is not well capitalized or well managed.</text></paragraph> <paragraph id="H2FC22C5B4D2406815FE2DDB8B410AEF"><enum>(3)</enum><header>Agreement to restore institution</header><text>Not later than 45 days after the date of receipt of a notice under paragraph (2) (or such additional period not to exceed 90 days as the Board may permit), the company shall execute an agreement acceptable to the Board to restore the wholesale financial institution to compliance with all of the requirements of paragraph (1).</text></paragraph> <paragraph id="H21DAB6384F650F39F1EF5385C835525"><enum>(4)</enum><header>Limitations until institution restored</header><text>Until the wholesale financial institution is restored to compliance with all of the requirements of paragraph (1), the Board may impose such limitations on the conduct or activities of the company or any affiliate of the company as the Board determines to be appropriate under the circumstances.</text></paragraph> <paragraph id="HEF635D2B4E90F56A031914BDACC2B16"><enum>(5)</enum><header>Failure to restore</header><text>If the company does not execute and implement an agreement in accordance with paragraph (3), comply with any limitation imposed under paragraph (4), restore the wholesale financial institution to well capitalized status not later than 180 days after the date of receipt by the company of the notice described in paragraph (2), or restore the wholesale financial institution to well managed status within such period as the Board may permit, the company shall, under such terms and conditions as may be imposed by the Board and subject to such extension of time as may be granted in the Board’s discretion, divest control of its subsidiary depository institutions.</text></paragraph> <paragraph id="HD879D12F45FE77F0C03BFD8AD1F9B05"><enum>(6)</enum><header>Well managed defined</header><text>For purposes of this subsection, the term <term>well managed</term> has the same meaning as in section 2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph></subsection> <subsection id="H22260A2946D5560D485AB1B3004929A"><enum>(e)</enum><header>Resolution of wholesale financial institutions</header> <paragraph id="HA3F8713A4319CADF40D1EEB64BAFF1E"><enum>(1)</enum><header>Conservatorship or receivership</header> <subparagraph id="HE616D44A4D6C7E9CE65EEDA719FDDB6"><enum>(A)</enum><header>Appointment</header><text>The Board may appoint a conservator or receiver for a wholesale financial institution to the same extent and in the same manner as the Comptroller of the Currency may appoint a conservator or receiver for a national bank.</text></subparagraph> <subparagraph id="H123DFA764F93A5E93B45F2A29542BAD"><enum>(B)</enum><header>Powers</header><text>The conservator or receiver for a wholesale financial institution shall exercise the same powers, functions, and duties, subject to the same limitations, as a conservator or receiver for a national bank.</text></subparagraph></paragraph> <paragraph id="HAB35AF17403ACBAEBF3AF88244B8BAA"><enum>(2)</enum><header>Board authority</header><text>The Board shall have the same authority with respect to any conservator or receiver appointed for a wholesale financial institution under paragraph (1), and the wholesale financial institution for which it has been appointed, as the Comptroller of the Currency has with respect to a conservator or receiver for a national bank and the national bank for which the conservator or receiver has been appointed.</text></paragraph> <paragraph id="HA2FF5CBD4A3EA9AB72610AAA8FE464F"><enum>(3)</enum><header>Bankruptcy proceedings</header><text>The Comptroller of the Currency (in the case of a national wholesale financial institution) and the Board may direct the conservator or receiver of a wholesale financial institution to file a petition pursuant to title 11, United States Code, in which case, title 11, United States Code, shall apply to the wholesale financial institution in lieu of otherwise applicable Federal or State insolvency law.</text></paragraph></subsection> <subsection id="H411F62C04F3348DEF3ABA9A206E3B25"><enum>(f)</enum><header>Exclusive jurisdiction</header><text>Subsections (c) and (e) of section 43 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> shall not apply to any wholesale financial institution.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HC49EC10B427F1B6BD11163B75265FAE"><enum>(c)</enum><header>Voluntary termination of insured status by certain institutions</header> <paragraph id="H29734F364D3FD5C897F937A6A6BF47B"><enum>(1)</enum><header>Section 8 designations</header><text>Section 8(a) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1818(a)">12 U.S.C. 1818(a)</external-xref>) is amended—</text> <subparagraph id="H4DFEA5CD49AA3A9057A0538C398D18C"><enum>(A)</enum><text>by striking paragraph (1); and</text></subparagraph> <subparagraph id="HE25A0E634BE38E38AECF6DB57873B23"><enum>(B)</enum><text>by redesignating paragraphs (2) through (10) as paragraphs (1) through (9), respectively.</text></subparagraph></paragraph> <paragraph id="H3D7985974480A6A62DDB0AA5D000B00"><enum>(2)</enum><header>Voluntary termination of insured status</header><text>The <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1811">12 U.S.C. 1811</external-xref> et seq.) is amended by inserting after section 8 the following new section:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="H9CFBCF524F0533555E511FB2D4661FA"> <section id="HB9B60C41407BA862C617AC967B07FAF"><enum>8A.</enum><header>Voluntary termination of status as insured depository institution</header> <subsection id="HECD0B9E248B09E08D0009D99DA57B8F"><enum>(a)</enum><header>In general</header><text>Except as provided in subsection (b), an insured State bank or a national bank may voluntarily terminate such bank’s status as an insured depository institution in accordance with regulations of the Corporation if—</text> <paragraph id="H49E3CED84E2E5E6F5698EEB4D3BA186"><enum>(1)</enum><text>the bank provides written notice of the bank’s intent to terminate such insured status—</text> <subparagraph id="HE9EC4C6E4345DAF40B77959618DA6A9"><enum>(A)</enum><text>to the Corporation and the Board of Governors of the Federal Reserve System not less than 6 months before the effective date of such termination; and</text></subparagraph> <subparagraph id="H35FA02614305870303CEAB8AE7CCEB5"><enum>(B)</enum><text>to all depositors at such bank, not less than 6 months before the effective date of the termination of such status; and</text></subparagraph></paragraph> <paragraph id="HE3C6825C4D51AC51C9C305A7E860900"><enum>(2)</enum><text>either—</text> <subparagraph id="H754F353541DA85333631A294586DBE3"><enum>(A)</enum><text>the deposit insurance fund of which such bank is a member equals or exceeds the fund’s designated reserve ratio as of the date the bank provides a written notice under paragraph (1) and the Corporation determines that the fund will equal or exceed the applicable designated reserve ratio for the 2 semiannual assessment periods immediately following such date; or</text></subparagraph> <subparagraph id="HA7263D8A4F49E0AA81F66885A9C63C8"><enum>(B)</enum><text>the Corporation and the Board of Governors of the Federal Reserve System approved the termination of the bank’s insured status and the bank pays an exit fee in accordance with subsection (e).</text></subparagraph></paragraph></subsection> <subsection id="HDCD9B79E47CD57EB3370D59A3EC8ACF"><enum>(b)</enum><header>Exception</header><text>Subsection (a) shall not apply with respect to—</text> <paragraph id="H30D1E0AC4BA37859876AC4A912E6DAE"><enum>(1)</enum><text>an insured savings association; or</text></paragraph> <paragraph id="H254ACBB54E4A17E23E035A987EB356E"><enum>(2)</enum><text>an insured branch that is required to be insured under subsection (a) or (b) of section 6 of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>.</text></paragraph></subsection> <subsection id="H7F3668CB4FBAA04050EA5685FEA1ED0"><enum>(c)</enum><header>Eligibility for insurance terminated</header><text>Any bank that voluntarily elects to terminate the bank’s insured status under subsection (a) shall not be eligible for insurance on any deposits or any assistance authorized under this Act after the period specified in subsection (f)(1).</text></subsection> <subsection id="HF840DFF2468CF79F78A913BB98E9EC7"><enum>(d)</enum><header>Institution must become wholesale financial institution or terminate deposit-taking activities</header><text>Any depository institution which voluntarily terminates such institution’s status as an insured depository institution under this section may not, upon termination of insurance, accept any deposits unless the institution is a wholesale financial institution subject to section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></subsection> <subsection id="H0369F28945D3C758B73A648DC280CFE"><enum>(e)</enum><header>Exit fees</header> <paragraph id="H54CC937F4D8FB2044453ABAFE5BCD00"><enum>(1)</enum><header>In general</header><text>Any bank that voluntarily terminates such bank’s status as an insured depository institution under this section shall pay an exit fee in an amount that the Corporation determines is sufficient to account for the institution’s pro rata share of the amount (if any) which would be required to restore the relevant deposit insurance fund to the fund’s designated reserve ratio as of the date the bank provides a written notice under subsection (a)(1).</text></paragraph> <paragraph id="HFE1BE0E4479EF5FFB1A6689C71B46A4"><enum>(2)</enum><header>Procedures</header><text>The Corporation shall prescribe, by regulation, procedures for assessing any exit fee under this subsection.</text></paragraph></subsection> <subsection id="HD2A4EDE7470CFEB8758800A589F00A4"><enum>(f)</enum><header>Temporary insurance of deposits insured as of termination</header> <paragraph id="HF05D61004831D2C3FFC7928F911FFA4"><enum>(1)</enum><header>Transition period</header><text>The insured deposits of each depositor in a State bank or a national bank on the effective date of the voluntary termination of the bank’s insured status, less all subsequent withdrawals from any deposits of such depositor, shall continue to be insured for a period of not less than 6 months and not more than 2 years, as determined by the Corporation. During such period, no additions to any such deposits, and no new deposits in the depository institution made after the effective date of such termination shall be insured by the Corporation.</text></paragraph> <paragraph id="H6902B81547B9DFADA8CFB3AEC9BCD44"><enum>(2)</enum><header>Temporary assessments; obligations and duties</header><text>During the period specified in paragraph (1) with respect to any bank, the bank shall continue to pay assessments under section 7 as if the bank were an insured depository institution. The bank shall, in all other respects, be subject to the authority of the Corporation and the duties and obligations of an insured depository institution under this Act during such period, and in the event that the bank is closed due to an inability to meet the demands of the bank’s depositors during such period, the Corporation shall have the same powers and rights with respect to such bank as in the case of an insured depository institution.</text></paragraph></subsection> <subsection id="HEF4D9F3E4C670C252D8BBA9D53D3D39"><enum>(g)</enum><header>Advertisements</header> <paragraph id="H1AFB3D2F49A24DE216602EAB830095E"><enum>(1)</enum><header>In general</header><text>A bank that voluntarily terminates the bank’s insured status under this section shall not advertise or hold itself out as having insured deposits, except that the bank may advertise the temporary insurance of deposits under subsection (f) if, in connection with any such advertisement, the advertisement also states with equal prominence that additions to deposits and new deposits made after the effective date of the termination are not insured.</text></paragraph> <paragraph id="H97E38D0D4C9C6BC8978B73AFEE6C6EB"><enum>(2)</enum><header>Certificates of deposit, obligations, and securities</header><text>Any certificate of deposit or other obligation or security issued by a State bank or a national bank after the effective date of the voluntary termination of the bank’s insured status under this section shall be accompanied by a conspicuous, prominently displayed notice that such certificate of deposit or other obligation or security is not insured under this Act.</text></paragraph></subsection> <subsection id="H487EAEE94B9126403484B79F548080B"><enum>(h)</enum><header>Notice requirements</header> <paragraph id="HA380E8D6493557D3EA1AA38DDFB4F93"><enum>(1)</enum><header>Notice to the Corporation</header><text>The notice required under subsection (a)(1)(A) shall be in such form as the Corporation may require.</text></paragraph> <paragraph id="H38956C52416510CE30B957AF82D5B0C"><enum>(2)</enum><header>Notice to depositors</header><text>The notice required under subsection (a)(1)(B) shall be—</text> <subparagraph id="H0C91378842E038C2BFB9A1BDFFC1B9B"><enum>(A)</enum><text>sent to each depositor’s last address of record with the bank; and</text></subparagraph> <subparagraph id="H96D300A646DF4DEEA1D7CF8EA9415AE"><enum>(B)</enum><text>in such manner and form as the Corporation finds to be necessary and appropriate for the protection of depositors.</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H73195F644DC6C6CDEDCA038B458673C"><enum>(3)</enum><header>Definition</header><text>Section 19(b)(1)(A)(i) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/461(b)(1)(A)(i)">12 U.S.C. 461(b)(1)(A)(i)</external-xref>) is amended by inserting <quote>, or any wholesale financial institution subject to section 9B of this Act</quote> after <quote>such Act</quote>.</text></paragraph></subsection> <subsection id="H6E0B6A884EAE4B0B7E9B12A712A7E3C"><enum>(d)</enum><header>Technical and conforming amendments to the bankruptcy Code</header> <paragraph id="H17D129B64E738D1A1F67F28BADBF088"><enum>(1)</enum><header>Bankruptcy Code debtors</header><text>Section 109(b)(2) of title 11, United States Code, is amended by striking <quote>; or</quote> and inserting the following:</text> <quoted-block display-inline="yes-display-inline" id="H8C85A15E427682C606801E8254B3CDD"><text>, except that—</text> <subparagraph id="HCCECDAEF4BC36B08CCC1F4B5C04F776"><enum>(A)</enum><text>a wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> may be a debtor if a petition is filed at the direction of the Comptroller of the Currency (in the case of a wholesale financial institution established under section 5136B of the Revised Statutes of the United States) or the Board of Governors of the Federal Reserve System (in the case of any wholesale financial institution); and</text></subparagraph> <subparagraph id="H0C9365FA48018F15158529860247C9F"><enum>(B)</enum><text>a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> may be a debtor if a petition is filed at the direction of the Board of Governors of the Federal Reserve System; or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H0E627DBB4D165688390DBD9DF9E551D"><enum>(2)</enum><header>Chapter 7 debtors</header><text>Section 109(d) of title 11, United States Code, is amended to read as follows:</text> <quoted-block id="H83BE4773458F57FDB366FBBFBEDE1C0"> <subsection id="H0433F28849E184EC7D728A8929D9D28"><enum>(d)</enum><text>Only a railroad and a person that may be a debtor under chapter 7 of this title, except that a stockbroker, a wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or a commodity broker, may be a debtor under chapter 11 of this title.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HC18E83354B131F20242CA2B4E1C5AC9"><enum>(3)</enum><header>Definition of financial institution</header><text>Section 101(22) of title 11, United States Code, is amended to read as follows:</text> <quoted-block id="H85F46EC0416850731AC171ACD41632C"> <paragraph id="H3FA1A02044348BE084346DB4BA392E3"><enum>(22)</enum><text><quote>financial institution</quote> means a person that is a commercial or savings bank, industrial savings bank, savings and loan association, trust company, wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> and, when any such person is acting as agent or custodian for a customer in connection with a securities contract, as defined in section 741 of this title, such customer,</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HF1F338744111DA42DC70A29F42FDF7D"><enum>(4)</enum><header>Subchapter V of chapter 7</header> <subparagraph id="H25A6B075418ED8ABB415EE8BB44800E"><enum>(A)</enum><header>In general</header><text>Section 103 of title 11, United States Code, is amended—</text> <clause id="H74E5DBC84852CDE77001C79AB7F5B18"><enum>(i)</enum><text>by redesignating subsections (e) through (i) as subsections (f) through (j), respectively; and</text></clause> <clause id="H17495FE143BE1892B7C9AD8223CF8BC"><enum>(ii)</enum><text>by inserting after subsection (d) the following:</text> <quoted-block id="H8418371D438A8978C10A6D88C8A71A8"> <subsection id="H21C2178B421A1DFCF014DF9B48C68A7"><enum>(e)</enum><text>Subchapter V of chapter 7 of this title applies only in a case under such chapter concerning the liquidation of a wholesale financial institution established under section 5136B of the Revised Statutes of the United States or section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph> <subparagraph id="H6C03FAB441185992D05F01A7285714F"><enum>(B)</enum><header>Wholesale bank liquidation</header><text>Chapter 7 of title 11, United States Code, is amended by adding at the end the following:</text> <quoted-block style="USC" id="H03D3B5B647C7627C4F52968747BB7F6"> <subchapter id="H115830AC4CF040CEC0E852BCF0DBE35"><enum>V</enum><header>Wholesale bank liquidation</header> <section id="H4AA0FF3F46AB6C61D1C65098ED69EED"><enum>781.</enum><header>Definitions for subchapter</header><text display-inline="no-display-inline">In this subchapter—</text> <paragraph id="HEE45E9934FC6A79E9D8CF8B75700D09"><enum>(1)</enum><text>the term <term>Board</term> means the Board of Governors of the Federal Reserve System;</text></paragraph> <paragraph id="HE98F6E734FE1EBFF5FE32EB37B864DB"><enum>(2)</enum><text>the term <term>depository institution</term> has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, and includes any wholesale bank;</text></paragraph> <paragraph id="H294758134D430DE4136D90B57BCFD4B"><enum>(3)</enum><text>the term <term>national wholesale financial institution</term> means a wholesale financial institution established under section 5136B of the Revised Statutes of the United States; and</text></paragraph> <paragraph id="HF121086B44B45D779A4793A726B5E32"><enum>(4)</enum><text>the term <term>wholesale bank</term> means a national wholesale financial institution, a wholesale financial institution established under section 9B of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>, or a corporation organized under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>.</text></paragraph></section> <section id="H3458699F49F92BABACA192AB35A207D"><enum>782.</enum><header>Selection of trustee</header><text display-inline="no-display-inline">Notwithstanding any other provision of this title, the conservator or receiver who files the petition shall be the trustee under this chapter, unless the Comptroller of the Currency (in the case of a national wholesale financial institution for which it appointed the conservator or receiver) or the Board (in the case of any wholesale bank for which it appointed the conservator or receiver) designates an alternative trustee. The Comptroller of the Currency or the Board (as applicable) may designate a successor trustee, if required.</text></section> <section id="HAA7BAB6C4C49123FD59D4B908DEBAE7"><enum>783.</enum><header>Additional powers of trustee</header> <subsection id="H46BE2EAB414062630232FCABF8AC87E"><enum>(a)</enum><text>The trustee under this subchapter has power, with permission of the court—</text> <paragraph id="H61BFCA4E4F60F08F5D2D578A24EDFE4"><enum>(1)</enum><text>to sell the wholesale bank to a depository institution or consortium of depository institutions (which consortium may agree on the allocation of the wholesale bank among the consortium);</text></paragraph> <paragraph id="HA3696E72486AF86588B9C39AB504EA3"><enum>(2)</enum><text>to merge the wholesale bank with a depository institution;</text></paragraph> <paragraph id="H7D7636AF41A2EED3FE246D92B610BBA"><enum>(3)</enum><text>to transfer contracts to the same extent as could a receiver for a depository institution under paragraphs (9) and (10) of section 11(e) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>;</text></paragraph> <paragraph id="HDD4159FC44323D4609B8D6A6C0B2A3F"><enum>(4)</enum><text>to transfer assets or liabilities to a depository institution;</text></paragraph> <paragraph id="H663EAAD54A0C9417005FB4B279C701D"><enum>(5)</enum><text>to distribute property not of the estate, including distributions to customers that are mandated by subchapters III and IV of this chapter; or</text></paragraph> <paragraph id="H64C03864426B7DE4DE629CB5DB5B5B2"><enum>(6)</enum><text>to transfer assets and liabilities to a bridge bank as provided in paragraphs (1), (3)(A), (5), (6), and (9) through (13), and subparagraphs (A) through (H) and (K) of paragraph (4) of section 11(n) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, except that—</text> <subparagraph id="H0BF7320D49997815994291BA2980B85"><enum>(A)</enum><text>the bridge bank shall be treated as a wholesale bank for the purpose of this subsection; and</text></subparagraph> <subparagraph id="H75DE796B4F6BB53B2059759D71E7C05"><enum>(B)</enum><text>any references in any such provision of law to the Federal Deposit Insurance Corporation shall be construed to be references to the appointing agency and that references to deposit insurance shall be omitted.</text></subparagraph></paragraph></subsection> <subsection id="H5DC4DBBD404E8138E28EEDA0B269B34"><enum>(b)</enum><text>Any reference in this section to transfers of liabilities includes a ratable transfer of liabilities within a priority class.</text></subsection></section> <section id="H5CCBC2F0439A40EF501E4DA8C7BD605"><enum>784.</enum><header>Right to be heard</header><text display-inline="no-display-inline">The Comptroller of the Currency (in the case of a national wholesale financial institution), the Board (in the case of any wholesale bank), or a Federal Reserve bank (in the case of a wholesale bank that is a member of that bank) may raise and may appear and be heard on any issue in a case under this subchapter.</text></section> <section id="H5BDFF8F34DF0F99040303A8CC85D9DC"><enum>785.</enum><header>Expedited transfers</header><text display-inline="no-display-inline">The trustee may make a transfer pursuant to section 783 without prior judicial approval, if the Comptroller of the Currency (in the case of a national wholesale financial institution for which it appointed the conservator or receiver) or the Board (in the case of any wholesale bank for which it appointed the conservator or receiver) determines that the transfer would be necessary to avert serious adverse effects on economic conditions or financial stability.</text></section></subchapter><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph> <subparagraph id="H0EA6335C466D0B54D5D8929CDFC26F3"><enum>(C)</enum><header>Conforming amendment</header><text>The table of sections for chapter 7 of title 11, United States Code, is amended by adding at the end the following:</text> <quoted-block style="USC" id="H00CD86684F430FE744506F989EECB00"> <toc regeneration="no-regeneration"> <toc-entry level="section">781. Definitions for subchapter</toc-entry> <toc-entry level="section">782. Selection of trustee</toc-entry> <toc-entry level="section">783. Additional powers of trustee</toc-entry> <toc-entry level="section">784. Right to be heard</toc-entry> <toc-entry level="section">785. Expedited transfers</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection> <subsection id="HF277CAFB4E59FF00D80C2BA0C57CE72"><enum>(e)</enum><header>Resolution of edge corporations</header><text>Section 25A(16) of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/624(16)">12 U.S.C. 624(16)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Reserve Act" id="H235335F54CB5D7354BA440BA136CEFC"> <paragraph id="HB3E3DA234F0DE9CB12D873BED66CEFA"><enum>(16)</enum><header>Appointment of receiver or conservator</header> <subparagraph id="HB79E66A74093568577BDFA8E42F3C5D"><enum>(A)</enum><header>In general</header><text>The Board may appoint a conservator or receiver for a corporation organized under the provisions of this section to the same extent and in the same manner as the Comptroller of the Currency may appoint a conservator or receiver for a national bank, and the conservator or receiver for such corporation shall exercise the same powers, functions, and duties, subject to the same limitations, as a conservator or receiver for a national bank.</text></subparagraph> <subparagraph id="H35FE3C1A45E6A0AA58BDDF854DDF088"><enum>(B)</enum><header>Equivalent authority</header><text>The Board shall have the same authority with respect to any conservator or receiver appointed for a corporation organized under the provisions of this section under this paragraph and any such corporation as the Comptroller of the Currency has with respect to a conservator or receiver of a national bank and the national bank for which a conservator or receiver has been appointed.</text></subparagraph> <subparagraph id="HECCAA94B44CBFC7D6BF83C8522D898B"><enum>(C)</enum><header>Title 11 petitions</header><text>The Board may direct the conservator or receiver of a corporation organized under the provisions of this section to file a petition pursuant to title 11, United States Code, in which case, title 11, United States Code, shall apply to the corporation in lieu of otherwise applicable Federal or State insolvency law.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section></chapter></subtitle> <subtitle id="H4496B7C44A279270D874E2B9C0D0000"><enum>E</enum><header>Preservation of FTC authority</header> <section id="HCF0506CC42E18EAC8679D2871BD267F"><enum>141.</enum><header>Amendment to the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> to modify notification and post-approval waiting period for Section 3 transactions</header><text display-inline="no-display-inline">Section 11(b)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1849(b)(1)">12 U.S.C. 1849(b)(1)</external-xref>) is amended by inserting <quote>and, if the transaction also involves an acquisition under section 4 or section 6, the Board shall also notify the Federal Trade Commission of such approval</quote> before the period at the end of the first sentence.</text></section> <section id="HBA783F2D485C336C5F6D6C90B518CA7"><enum>142.</enum><header>Interagency data sharing</header><text display-inline="no-display-inline">To the extent not prohibited by other law, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System shall make available to the Attorney General and the Federal Trade Commission any data in the possession of any such banking agency that the antitrust agency deems necessary for antitrust review of any transaction requiring notice to any such antitrust agency or the approval of such agency under section 3, 4, or 6 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>, section 18(c) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, the <act-name parsable-cite="NMCMA">National Bank Consolidation and Merger Act</act-name>, <external-xref legal-doc="act" parsable-cite="HOLA/10">section 10</external-xref> of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name>, or the antitrust laws.</text></section> <section id="HA137ECA34ACF4E49C2A097873600D3C"><enum>143.</enum><header>Clarification of status of subsidiaries and affiliates</header> <subsection id="H78CB8F7448D35FBD378C37A2AEBBDF4"><enum>(a)</enum><header>Clarification of Federal Trade Commission jurisdiction</header><text>Any person which directly or indirectly controls, is controlled directly or indirectly by, or is directly or indirectly under common control with, any bank or savings association (as such terms are defined in <external-xref legal-doc="act" parsable-cite="FDIA/3">section 3</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>) and is not itself a bank or savings association shall not be deemed to be a bank or savings association for purposes of the <act-name parsable-cite="FTCA">Federal Trade Commission Act</act-name> or any other law enforced by the Federal Trade Commission.</text></subsection> <subsection id="H899077164C3FFAA8D63D699F2FC9939"><enum>(b)</enum><header>Savings provision</header><text>No provision of this section shall be construed as restricting the authority of any Federal banking agency (as defined in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>) under any Federal banking law, including <external-xref legal-doc="act" parsable-cite="FDIA/8">section 8</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subsection> <subsection id="H0962C3254EA3D79700768DA089C64BA"><enum>(c)</enum><header>Hart-scott-rodino amendment</header><text>Section 7A(c)(7) of the <act-name parsable-cite="CLAY">Clayton Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/18a(c)(7)">15 U.S.C. 18a(c)(7)</external-xref>) is amended by inserting before the semicolon at the end thereof the following: <quote>, except that a portion of a transaction is not exempt under this paragraph if such portion of the transaction (A) requires notice under section 6 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>; and (B) does not require approval under <external-xref legal-doc="act" parsable-cite="BHC65/4">section 3 or 4</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name></quote>.</text></subsection></section> <section id="H01394CAB42F588CA1A458EAADDA1F00"><enum>144.</enum><header>Annual GAO report</header> <subsection id="H6001EA97447C33F75F9490963E72D4B"><enum>(a)</enum><header>In general</header><text>By the end of the 1-year period beginning on the date of the enactment of this Act and annually thereafter, the Comptroller General of the United States shall submit a report to the Congress on market concentration in the financial services industry and its impact on consumers.</text></subsection> <subsection id="H3260A20B47CC8C7FDDB3B6B120AAB1C"><enum>(b)</enum><header>Analysis</header><text>Each report submitted under subsection (a) shall contain an analysis of—</text> <paragraph id="HD3C85E4942C9C0395FFEB3AB6423AA1"><enum>(1)</enum><text>the positive and negative effects of affiliations between various types of financial companies, and of acquisitions pursuant to this Act and the amendments made by this Act to other provisions of law, including any positive or negative effects on consumers, area markets, and submarkets thereof or on registered securities brokers and dealers which have been purchased by depository institutions or depository institution holding companies;</text></paragraph> <paragraph id="H157084584778F849C22092BB00D165B"><enum>(2)</enum><text>the changes in business practices and the effects of any such changes on the availability of venture capital, consumer credit, and other financial services or products and the availability of capital and credit for small businesses; and</text></paragraph> <paragraph id="H51D7B43A4A97E8BD4ED2FFBCCFFAFBA"><enum>(3)</enum><text>the acquisition patterns among depository institutions, depository institution holding companies, securities firms, and insurance companies including acquisitions among the largest 20 percent of firms and acquisitions within regions or other limited geographical areas.</text></paragraph></subsection></section></subtitle> <subtitle id="HABC530F844538E2E527B9795BAACCAE"><enum>F</enum><header>Applying the principles of national treatment and equality of competitive opportunity to foreign banks and foreign financial institutions</header> <section id="H8A0BDFEA480920B52B079DAAA239BAA"><enum>151.</enum><header>Applying the principles of national treatment and equality of competitive opportunity to foreign banks that are financial holding companies</header><text display-inline="no-display-inline">Section 8(c) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3106(c)">12 U.S.C. 3106(c)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="International Banking Act of 1978" id="HD0B87C0E482E27411309F3B38918C8C"> <paragraph id="H0A7A7C864F824E7501021A96E7D2FE4"><enum>(3)</enum><header>Termination of grandfathered rights</header> <subparagraph id="HB26652D640160F2635E217B8218FDE2"><enum>(A)</enum><header>In general</header><text>If any foreign bank or foreign company files a declaration under section 6(b)(1)(C) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>, or receives a determination under section 10(d)(1) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>, any authority conferred by this subsection on any foreign bank or company to engage in any activity which the Board has determined to be permissible for financial holding companies under section 6 of such Act shall terminate immediately.</text></subparagraph> <subparagraph id="H79801076478CE0799ECDD9B073C7782"><enum>(B)</enum><header>Restrictions and requirements authorized</header><text>If a foreign bank or company that engages, directly or through an affiliate pursuant to paragraph (1), in an activity which the Board has determined to be permissible for financial holding companies under section 6 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> has not filed a declaration with the Board of its status as a financial holding company under such section or received a determination under section 10(d)(1) by the end of the 2-year period beginning on the date of enactment of the &short-title1;, the Board, giving due regard to the principle of national treatment and equality of competitive opportunity, may impose such restrictions and requirements on the conduct of such activities by such foreign bank or company as are comparable to those imposed on a financial holding company organized under the laws of the United States, including a requirement to conduct such activities in compliance with any prudential safeguards established under section 5(h) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H3525FFA94A196025B1948F9BA068BC4"><enum>152.</enum><header>Applying the principles of national treatment and equality of competitive opportunity to foreign banks and foreign financial institutions that are wholesale financial institutions</header><text display-inline="no-display-inline">Section 8A of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (as added by section 136(c)(2) of this Act) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="HDD6291144C51FA6A8D65EDAED2D4789"> <subsection id="H67D231EF4649DC0E8ACC4DB2D493D8C"><enum>(i)</enum><header>Voluntary termination of deposit insurance</header><text>The provisions on voluntary termination of insurance in this section shall apply to an insured branch of a foreign bank (including a Federal branch) in the same manner and to the same extent as they apply to an insured State bank or a national bank.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H15E1DEDA47BFF0B12641CA99BD53CAD"><enum>153.</enum><header>Representative offices</header> <subsection id="H173342244E42C463E8D87CB4C3D23F0"><enum>(a)</enum><header>Definition of <quote>representative office</quote></header><text>Section 1(b)(15) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3101(15)">12 U.S.C. 3101(15)</external-xref>) is amended by striking <quote>State agency, or subsidiary of a foreign bank</quote> and inserting <quote>or State agency</quote>.</text></subsection> <subsection id="H1D143FE546E9A7586128F4B5229880E"><enum>(b)</enum><header>Examinations</header><text>Section 10(c) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3107(c)">12 U.S.C. 3107(c)</external-xref>) is amended by adding at the end the following: <quote>The Board may also make examinations of any affiliate of a foreign bank conducting business in any State if the Board deems it necessary to determine and enforce compliance with this Act, the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841</external-xref> et seq.), or other applicable Federal banking law.</quote>.</text></subsection></section></subtitle> <subtitle id="H216EE6EA43CBA58C5549F197363F93B"><enum>G</enum><header>Federal Home Loan Bank System modernization</header> <section id="H648019AA4EF13B2C362C64BBEF91BAF"><enum>161.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote><short-title>&short-title2;</short-title></quote>.</text></section> <section id="H8A58CA24410B673A6890F0B316DA941"><enum>162.</enum><header>Definitions</header><text display-inline="no-display-inline">Section 2 of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1422">12 U.S.C. 1422</external-xref>) is amended—</text> <paragraph id="H0B22CEF548601F2DDC1967A5905F05C"><enum>(1)</enum><text>in paragraph (1), by striking <quote>term <term>Board</term> means</quote> and inserting <quote>terms <term>Finance Board</term> and <term>Board</term> mean</quote>;</text></paragraph> <paragraph id="H71D8E11D4D024DBE9431C19CDE6035C"><enum>(2)</enum><text>by striking paragraph (3) and inserting the following:</text> <quoted-block id="H44DB84A8401B36DA5F7B3E8DC57BCFB"> <paragraph id="H165A1B0149E57DF0535A50ACFA6BAAB"><enum>(3)</enum><header>State</header><text>The term <term>State</term>, in addition to the States of the United States, includes the District of Columbia, Guam, Puerto Rico, the United States Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands.</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HDFDB66D04592432666DB6C89411462D"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block id="HA9F293BE4FF627F363E64F93C9EAE26"> <paragraph id="H57982BCE4C9AC093D25618BE8C8919B"><enum>(13)</enum><header>Community financial institution</header> <subparagraph id="H71649F8640B0A6F539314092ECB382F"><enum>(A)</enum><header>In general</header><text>The term <term>community financial institution</term> means a member—</text> <clause id="H3B2BB1EF443E79067CAE95B25CC30C6"><enum>(i)</enum><text>the deposits of which are insured under the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; and</text></clause> <clause id="HED0D9C4347E68ACF24865E8EDBB324D"><enum>(ii)</enum><text>that has, as of the date of the transaction at issue, less than $500,000,000 in average total assets, based on an average of total assets over the 3 years preceding that date.</text></clause></subparagraph> <subparagraph id="HF127BA054D53190C994F6789F605B49"><enum>(B)</enum><header>Adjustments</header><text>The $500,000,000 limit referred to in subparagraph (A)(ii) shall be adjusted annually by the Finance Board, based on the annual percentage increase, if any, in the Consumer Price Index for all urban consumers, as published by the Department of Labor.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H06F42DB14F5103DF0B2E6995C117BBE"><enum>163.</enum><header>Savings Association membership</header> <subsection id="H8AABF5DC418E644140C2138169FE84D"><enum>(a)</enum><header>Federal home loan bank membership</header><text>Section 5(f) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1464(f)">12 U.S.C. 1464(f)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Home Owners’ Loan Act" id="HA1500AA148F8B4FBD2A8E1A8C0B31CE"> <subsection id="HE3EC51C24D92D2B2592CA19109D008B"><enum>(f)</enum><header>Federal home loan bank membership</header><text>On and after January 1, 1999, a Federal savings association may become a member of the Federal Home Loan Bank System, and shall qualify for such membership in the manner provided by the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name>.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HB5DDB02A499964F55C2A5C8EEBD9A0A"><enum>(b)</enum><header>Withdrawal</header><text>Section 6(e) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1426(e)">12 U.S.C. 1426(e)</external-xref>) is amended by striking <quote>Any member other than a Federal savings and loan association may withdraw</quote> and inserting <quote>Any member may withdraw</quote>.</text></subsection></section> <section id="H427398D5442B9E6DF75CA992E0F3E75"><enum>164.</enum><header>Advances to members; collateral</header> <subsection id="H033F058741DBCAD81F112C86F5BA2DA"><enum>(a)</enum><header>In general</header><text>Section 10(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430(a)">12 U.S.C. 1430(a)</external-xref>) is amended—</text> <paragraph id="H32A8085F4A503216305AA88505FAF80"><enum>(1)</enum><text>by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D), respectively, and indenting appropriately;</text></paragraph> <paragraph id="H3B9C974245BCC64D935BDA9FD3EC8E4"><enum>(2)</enum><text>by striking <quote>(a) Each</quote> and inserting the following:</text> <quoted-block id="H1B1C80E3407200D9DF43B79FD1E70FB"> <subsection id="H9404AC3045415BE2B17E7A8E692E90F"><enum>(a)</enum><header>In general</header> <paragraph id="H54438F284C6210D091C3EDB6CCA9C2D"><enum>(1)</enum><header>All advances</header><text>Each</text></paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="H2C62F2544274B99E96F90EA89D6B33B"><enum>(3)</enum><text>by striking the second sentence and inserting the following:</text> <quoted-block id="H5E55FDCA44100B8EA5A9778950B67C3"> <paragraph id="H5385834244125B069F5D1A88661438E"><enum>(2)</enum><header>Purposes of advances</header><text>A long-term advance may only be made for the purposes of—</text> <subparagraph id="H485C361141AB21BAAA2EC9A5861DE83"><enum>(A)</enum><text>providing funds to any member for residential housing finance; and</text></subparagraph> <subparagraph id="H0AA323CD4097E8E711DE5BAD428CF78"><enum>(B)</enum><text>providing funds to any community financial institution for small businesses, agricultural, rural development, or low-income community development lending.</text></subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="HF5483D4242406E011804DE82EDF9C5F"><enum>(4)</enum><text>by striking <quote>A Bank</quote> and inserting the following:</text> <quoted-block id="H520B1C4B4FF28F12CBDA268900B3191"> <paragraph id="H50D4D52B43EFC4FE8FCFD7BCC4668DA"><enum>(3)</enum><header>Collateral</header><text>A Bank</text></paragraph><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="H707D4592475F6A2FA1DB46B49442FC7"><enum>(5)</enum><text>in paragraph (3) (as so designated by paragraph (4) of this subsection)—</text> <subparagraph id="H62DAE63F40AD195D4E206085C4D4BD7"><enum>(A)</enum><text>in subparagraph (C) (as so redesignated by paragraph (1) of this subsection) by striking <quote>Deposits</quote> and inserting <quote>Cash or deposits</quote>;</text></subparagraph> <subparagraph id="HE61EBC394B95D46A310B44BFC35900C"><enum>(B)</enum><text>in subparagraph (D) (as so redesignated by paragraph (1) of this subsection), by striking the second sentence; and</text></subparagraph> <subparagraph id="H59276AF84F49F90BCDD5B3ACD33156B"><enum>(C)</enum><text>by inserting after subparagraph (D) (as so redesignated by paragraph (1) of this subsection) the following new subparagraph:</text> <quoted-block id="H3930EB91418DFA0A97B9D78565F8B89"> <subparagraph id="HAF555EF2403BE2E80A5F92A3FEAC73F"><enum>(E)</enum><text>Secured loans for small business, agriculture, rural development, or low-income community development, or securities representing a whole interest in such secured loans, in the case of any community financial institution.</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H53376D52442F6D7CF68578986264FB3"><enum>(6)</enum><text>in paragraph (5)—</text> <subparagraph id="H6E38B761461E571290F40D85D09FD5B"><enum>(A)</enum><text>in the second sentence, by striking <quote>and the Board</quote>;</text></subparagraph> <subparagraph id="H11C04DED4C4A119659E4A8985EF68A2"><enum>(B)</enum><text>in the third sentence, by striking <quote>Board</quote> and inserting <quote>Federal home loan bank</quote>; and</text></subparagraph> <subparagraph id="HF809B48549A62A2F0A1232AF7CED0D4"><enum>(C)</enum><text>by striking <quote>(5) Paragraphs (1) through (4)</quote> and inserting the following:</text> <quoted-block id="H6DBF94884216D9F6250072AE66EE740"> <paragraph id="H054C44EF4C4C6F57755FF58EA8A687E"><enum>(4)</enum><header>Additional bank authority</header><text>Subparagraphs (A) through (E) of paragraph (3)</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></subparagraph></paragraph> <paragraph id="H83C85B2546613827FC894E8C2C9C48F"><enum>(7)</enum><text>by adding at the end the following:</text> <quoted-block id="H45712906482C0330F989ADA1FF5E3D4"> <paragraph id="HC412CBB04232FC8F8EB9B2B7A9B00E6"><enum>(5)</enum><header>Review of certain collateral standards</header><text>The Board may review the collateral standards applicable to each Federal home loan bank for the classes of collateral described in subparagraphs (D) and (E) of paragraph (3), and may, if necessary for safety and soundness purposes, require an increase in the collateral standards for any or all of those classes of collateral.</text></paragraph> <paragraph id="H6D4D071843E5B3B193AD0199F895F52"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection, the terms <term>small business</term>, <term>agriculture</term>, <term>rural development</term>, and <term>low-income community development</term> shall have the meanings given those terms by rule or regulation of the Finance Board.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H39E922D9470B16AD080F2581AE00FFF"><enum>(b)</enum><header>Clerical amendment</header><text>The section heading for <external-xref legal-doc="act" parsable-cite="FHLBA/10">section 10</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430">12 U.S.C. 1430</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Home Loan Bank Act" id="HE3000359458BF052F4DE2FB740B8500"> <section id="HF7FBF3854239DEEA57DD5C9B08F55E3"><enum>10.</enum><header>Advances to members</header></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HD824A35648454FE05485B68FC5F67BB"><enum>(c)</enum><header>Conforming amendments relating to members which are not qualified thrift lenders</header><text>Section 10(e)(1) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430(e)(1)">12 U.S.C. 1430(e)(1)</external-xref>) is amended in the second sentence, by inserting before the period <quote>or, in the case of any community financial institution, for the purposes described in subsection (a)(2)</quote>.</text></subsection></section> <section id="H93023E99449135D747E472924EC4D00"><enum>165.</enum><header>Eligibility criteria</header><text display-inline="no-display-inline">Section 4(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1424(a)">12 U.S.C. 1424(a)</external-xref>) is amended—</text> <paragraph id="H75A2434C41712B99A24ECC86FFE189F"><enum>(1)</enum><text>in paragraph (2)(A), by inserting, <quote>(other than a community financial institution)</quote> after <quote>institution</quote>; and</text></paragraph> <paragraph id="H804248204327CEB8B8AD58A9BA58935"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block id="HEF593FA44174545AD254EEB011F4900"> <paragraph id="H0CEB80054983E170ED6073A62B1EFCE"><enum>(3)</enum><header>Limited exemption for community financial institutions</header><text>A community financial institution that otherwise meets the requirements of paragraph (2) may become a member without regard to the percentage of its total assets that is represented by residential mortgage loans, as described in subparagraph (A) of paragraph (2).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H6FA1EFF046B25484FE5192A3F100E00"><enum>166.</enum><header>Management of banks</header> <subsection id="HED54A01042BA37C6F9BDFAA9A624989"><enum>(a)</enum><header>Board of Directors</header><text>Section 7(d) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1427(d)">12 U.S.C. 1427(d)</external-xref>) is amended—</text> <paragraph id="HB3E5F07F453A9704278C43B8561800A"><enum>(1)</enum><text>by striking <quote>(d) The term</quote> and inserting the following:</text> <quoted-block id="H9F322A554B61F1641747BC8067BF648"> <subsection id="H67D29E8C4B6AC379B3EA7FA6C0EEA09"><enum>(d)</enum><header>Terms of office</header><text>The term</text></subsection><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HD42C0A834C52EBB20B48D2AFAD2C54E"><enum>(2)</enum><text>by striking <quote>shall be two years</quote>.</text></paragraph></subsection> <subsection id="H6199509B4BCA19DB68E2898989A5850"><enum>(b)</enum><header>Compensation</header><text>Section 7(i) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1427(i)">12 U.S.C. 1427(i)</external-xref>) is amended by striking <quote>, subject to the approval of the board</quote>.</text></subsection> <subsection id="H52BFB746408F935C82FBB2981886D77"><enum>(c)</enum><header>Repeal of sections<enum-in-header> 22A</enum-in-header> and 27</header><text>The <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1421">12 U.S.C. 1421</external-xref> et seq.) is amended by striking sections 22A (<external-xref legal-doc="usc" parsable-cite="usc/12/1442a">12 U.S.C. 1442a</external-xref>) and 27 (<external-xref legal-doc="usc" parsable-cite="usc/12/1447">12 U.S.C. 1447</external-xref>).</text></subsection> <subsection id="H0D3BF0E44968D883E98D1D91B51583C"><enum>(d)</enum><header>Section 12</header><text><external-xref legal-doc="act" parsable-cite="FHLBA/12">Section 12</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1432">12 U.S.C. 1432</external-xref>) is amended—</text> <paragraph id="HB2E671EC478FC6C29317F1890270F73"><enum>(1)</enum><text>in subsection (a)—</text> <subparagraph id="H8506CB9A4747227D0045D582DC90EEF"><enum>(A)</enum><text>by striking <quote>, but, except</quote> and all that follows through <quote>ten years</quote>;</text></subparagraph> <subparagraph id="HFDB712B44D5A3D232490AD8FDA0861E"><enum>(B)</enum><text>by striking <quote>, subject to the approval of the Board</quote> each place that term appears;</text></subparagraph> <subparagraph id="HB2B58E2243C6FE15EAAA0DB08C432FB"><enum>(C)</enum><text>by striking <quote>and, by its Board of directors,</quote> and all that follows through <quote>agent of such bank,</quote> and inserting <quote>and, by the board of directors of the bank, to prescribe, amend, and repeal by-laws governing the manner in which its affairs may be administered, consistent with applicable laws and regulations, as administered by the Finance Board. No officer, employee, attorney, or agent of a Federal home loan bank</quote>; and</text></subparagraph> <subparagraph id="HB82C200147E6693F780DD19500C829B"><enum>(D)</enum><text>by striking <quote>Board of directors</quote> each place that term appears and inserting <quote>board of directors</quote>; and</text></subparagraph></paragraph> <paragraph id="H397AAEDE4E809F89774A5F8FD86FCC0"><enum>(2)</enum><text>in subsection (b), by striking <quote>loans banks</quote> and inserting <quote>loan banks</quote>.</text></paragraph></subsection> <subsection id="H31DF46FC42654CB847A4F9805EC6EBE"><enum>(e)</enum><header>Powers and duties of Federal Housing Finance Board</header> <paragraph id="HF50A14254257F6D0A3E6BF90B236200"><enum>(1)</enum><header>Issuance of notices of violations</header><text>Section 2B(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1422b(a)">12 U.S.C. 1422b(a)</external-xref>) is amended by adding at the end the following new paragraphs:</text> <quoted-block act-name="Federal Home Loan Bank Act" id="H4442C9FB44D009C647483784B1E9E8B"> <paragraph id="HCE2136C643CCBE1A616E55ADA19DE5A"><enum>(5)</enum><text>To issue and serve a notice of charges upon a Federal home loan bank or upon any executive officer or director of a Federal home loan bank if, in the determination of the Finance Board, the bank, executive officer, or director is engaging or has engaged in, or the Finance Board has reasonable cause to believe that the bank, executive officer, or director is about to engage in, any conduct that violates any provision of this Act or any law, order, rule, or regulation or any condition imposed in writing by the Finance Board in connection with the granting of any application or other request by the bank, or any written agreement entered into by the bank with the agency, in accordance with the procedures provided in section 1371(c) of the <act-name parsable-cite="FHEFSSA">Federal Housing Enterprises Financial Safety and Soundness Act of 1992</act-name>. Such authority includes the same authority to take affirmative action to correct conditions resulting from violations or practices or to limit activities of a bank or any executive officer or director of a bank as appropriate Federal banking agencies have to take with respect to insured depository institutions under paragraphs (6) and (7) of section 8(b) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>, and to have all other powers, rights, and duties to enforce this Act with respect to the Federal home loan banks and their executive officers and directors as the Office of Federal Housing Enterprise Oversight has to enforce the <act-name parsable-cite="FHEFSSA">Federal Housing Enterprises Financial Safety and Soundness Act of 1992</act-name>, the <act-name parsable-cite="FNMACA">Federal National Mortgage Association Charter Act</act-name>, or the <act-name parsable-cite="FHLMCA">Federal Home Loan Mortgage Corporation Act</act-name> with respect to the Federal housing enterprises under the <act-name parsable-cite="FHEFSSA">Federal Housing Enterprises Financial Safety and Soundness Act of 1992</act-name>.</text></paragraph> <paragraph id="HA6FFDA924C81A0C1B36DDBAF75B122D"><enum>(6)</enum><text>To address any insufficiencies in capital levels resulting from the application of section 5(f) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name>.</text></paragraph> <paragraph id="H21E3BA50416F85FFE97C0EAECC4EDFC"><enum>(7)</enum><text>To sue and be sued, by and through its own attorneys.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H498AF7FF493D2611949F3CB3E96CA5B"><enum>(2)</enum><header>Technical amendment</header><text>Section 111 of <external-xref legal-doc="public-law" parsable-cite="pl/93–495">Public Law 93–495</external-xref> (<external-xref legal-doc="usc" parsable-cite="usc/12/250">12 U.S.C. 250</external-xref>) is amended by inserting <quote>Federal Housing Finance Board,</quote> after <quote>Director of the Office of Thrift Supervision,</quote>.</text></paragraph></subsection> <subsection id="H0307E26241B1B64478A72897929C26C"><enum>(f)</enum><header>Eligibility to secure advances</header> <paragraph id="HA3F056324128E07DE20B67A0AC344ED"><enum>(1)</enum><header>Section 9</header><text><external-xref legal-doc="act" parsable-cite="FHLBA/9">Section 9</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1429">12 U.S.C. 1429</external-xref>) is amended—</text> <subparagraph id="HEE729BFD4139FA18D8541DB5BF3CF9F"><enum>(A)</enum><text>in the second sentence, by striking <quote>with the approval of the Board</quote>; and</text></subparagraph> <subparagraph id="HE45F0E594C9760F04617A59F1C00CDE"><enum>(B)</enum><text>in the third sentence, by striking <quote>, subject to the approval of the Board,</quote>.</text></subparagraph></paragraph> <paragraph id="H1C24079A4757144BF8EC55BCDE938CA"><enum>(2)</enum><header>Section 10</header><text><external-xref legal-doc="act" parsable-cite="FHLBA/10">Section 10</external-xref> of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1430">12 U.S.C. 1430</external-xref>) is amended—</text> <subparagraph id="H4FD2A5F0436E59635D663F869F27D18"><enum>(A)</enum><text>in subsection (c)—</text> <clause id="H467B7C6448DAB5D8ACB27BA8C256197"><enum>(i)</enum><text>in the first sentence, by striking <quote>Board</quote> and inserting <quote>Federal home loan bank</quote>; and</text></clause> <clause id="HA14D16B4476AEF0AF47CD8A5D100A85"><enum>(ii)</enum><text>in the second sentence, by striking <quote>held by</quote> and all that follows before the period;</text></clause></subparagraph> <subparagraph id="H66AE2E6A4F4F796B2E080889CB19000"><enum>(B)</enum><text>in subsection (d)—</text> <clause id="HA1ABFE45412987A22D078881C0DD1A7"><enum>(i)</enum><text>in the first sentence, by striking <quote>and the approval of the Board</quote>; and</text></clause> <clause id="HE9DE4F0443DA112684DD39976EFA600"><enum>(ii)</enum><text>by striking <quote>Subject to the approval of the Board, any</quote> and inserting <quote>Any</quote>; and</text></clause></subparagraph> <subparagraph id="H8807408242E3C32EE193A0A44EF5DF5"><enum>(C)</enum><text>in subsection (j)(1)—</text> <clause id="HCB841C094469788442143D863B34BAE"><enum>(i)</enum><text>by striking <quote>to subsidize the interest rate on advances</quote> and inserting <quote>to provide subsidies, including subsidized interest rates on advances</quote>;</text></clause> <clause id="HC1280F3241522B4783F696A4A8070D8"><enum>(ii)</enum><text>by striking <quote>Pursuant</quote> and inserting the following:</text> <quoted-block id="HEFC7E1DA44AE251FF8654DB46954BA4"> <subparagraph id="HFD06BAC74797A7BF78BDF1A12688FB1"><enum>(A)</enum><header>Establishment</header><text>Pursuant</text></subparagraph><after-quoted-block>; and</after-quoted-block></quoted-block></clause> <clause id="H96BACDF94C2887E9C5E223AC3CD420C"><enum>(iii)</enum><text>by adding at the end the following new subparagraph:</text> <quoted-block id="H999361364B39F0E44599778BC2DD166"> <subparagraph id="HCFBE0D72470F11AD389D4BBAF4531EC"><enum>(B)</enum><header>Nondelegation of approval authority</header><text>Subject to such regulations as the Finance Board may prescribe, the board of directors of each Federal home loan bank may approve or disapprove requests from members for Affordable Housing Program subsidies, and may not delegate such authority.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph></paragraph></subsection> <subsection id="HDE63A3A845E045CFF9C313AB3BE2035"><enum>(g)</enum><header>Section 16</header><text>Section 16(a) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1436(a)">12 U.S.C. 1436(a)</external-xref>) is amended—</text> <paragraph id="H6D8D97A4456BC88FDC496189F2B29D6"><enum>(1)</enum><text>in the third sentence—</text> <subparagraph id="H1E13112443DBDBBD5B03CEA3DF8C684"><enum>(A)</enum><text>by striking <quote>net earnings</quote> and inserting <quote>previously retained earnings or current net earnings</quote>; and</text></subparagraph> <subparagraph id="H6388CFA344C4C402AD680781BCFF5FA"><enum>(B)</enum><text>by striking <quote>, and then only with the approval of the Federal Housing Finance Board</quote>; and</text></subparagraph></paragraph> <paragraph id="H8F0B0AF24963E212327B55B14EE6EBD"><enum>(2)</enum><text>by striking the fourth sentence.</text></paragraph></subsection> <subsection id="H84DBD77A43199DC1224D65A9E728CBD"><enum>(h)</enum><header>Section 18</header><text>Section 18(b) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1438(b)">12 U.S.C. 1438(b)</external-xref>) is amended by striking paragraph (4).</text></subsection></section> <section id="H8D7C4A554897F701C82FD9B87843A6A"><enum>167.</enum><header>Resolution Funding Corporation</header> <subsection id="H0BA071C2424E6DBBF62369A0B445F6F"><enum>(a)</enum><header>In general</header><text>Section 21B(f)(2)(C) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1441b(f)(2)(C)">12 U.S.C. 1441b(f)(2)(C)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Federal Home Loan Bank Act" id="H25075B38423958DD14B1678043E2F34"> <subparagraph id="H94B829AA4BAEBBDD03D7C1A394D8F1C"><enum>(C)</enum><header>Payments by Federal home loan banks</header> <clause id="H5A6C149A43387FC50EC744A6C5C3B43"><enum>(i)</enum><header>In general</header><text>To the extent that the amounts available pursuant to subparagraphs (A) and (B) are insufficient to cover the amount of interest payments, each Federal home loan bank shall pay to the Funding Corporation in each calendar year, 20.75 percent of the net earnings of that bank (after deducting expenses relating to section 10(j) and operating expenses).</text></clause> <clause id="H8AFF961046B4EE95023D7D9DEF94CEB"><enum>(ii)</enum><header>Annual determination</header><text>The Board annually shall determine the extent to which the value of the aggregate amounts paid by the Federal home loan banks exceeds or falls short of the value of an annuity of $300,000,000 per year that commences on the issuance date and ends on the final scheduled maturity date of the obligations, and shall select appropriate present value factors for making such determinations.</text></clause> <clause id="H05E114EF46E4EB3C7495C4A93BC8B44"><enum>(iii)</enum><header>Payment term alterations</header><text>The Board shall extend or shorten the term of the payment obligations of a Federal home loan bank under this subparagraph as necessary to ensure that the value of all payments made by the banks is equivalent to the value of an annuity referred to in clause (ii).</text></clause> <clause id="H7D988C7B4DD49FE9D9095AB46E57ACF"><enum>(iv)</enum><header>Term beyond maturity</header><text>If the Board extends the term of payments beyond the final scheduled maturity date for the obligations, each Federal home loan bank shall continue to pay 20.75 percent of its net earnings (after deducting expenses relating to section 10(j) and operating expenses) to the Treasury of the United States until the value of all such payments by the Federal home loan banks is equivalent to the value of an annuity referred to in clause (ii). In the final year in which the Federal home loan banks are required to make any payment to the Treasury under this subparagraph, if the dollar amount represented by 20.75 percent of the net earnings of the Federal home loan banks exceeds the remaining obligation of the banks to the Treasury, the Finance Board shall reduce the percentage pro rata to a level sufficient to pay the remaining obligation.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HA5B825894E1CB590746E198DEEA5723"><enum>(b)</enum><header>Effective date</header><text>The amendment made by subsection (a) shall become effective on January 1, 1999. Payments made by a Federal home loan bank before that effective date shall be counted toward the total obligation of that bank under section 21B(f)(2)(C) of the <act-name parsable-cite="FHLBA">Federal Home Loan Bank Act</act-name>, as amended by this section.</text></subsection></section></subtitle> <subtitle id="H9D87E7044E2307C831D040ADD16821D"><enum>H</enum><header>Direct activities of banks</header> <section id="H775CA71E4921DFA02BBB5099B6CAA1F"><enum>181.</enum><header>Authority of national banks to underwrite certain municipal bonds</header><text display-inline="no-display-inline">The paragraph designated the Seventh of section 5136 of the Revised Statutes of the United States (<external-xref legal-doc="usc" parsable-cite="usc/12/24(7)">12 U.S.C. 24(7)</external-xref>) is amended by adding at the end the following new sentence: <quote>In addition to the provisions in this paragraph for dealing in, underwriting or purchasing securities, the limitations and restrictions contained in this paragraph as to dealing in, underwriting, and purchasing investment securities for the national bank’s own account shall not apply to obligations (including limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of section 142(b)(1) of the Internal Revenue Code of 1986) issued by or on behalf of any state or political subdivision of a state, including any municipal corporate instrumentality of 1 or more states, or any public agency or authority of any state or political subdivision of a state, if the national banking association is well capitalized (as defined in <external-xref legal-doc="act" parsable-cite="FDIA/38">section 38</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>).</quote>.</text></section></subtitle> <subtitle id="HA1DBA7594A566D080EDC2F9139EDDCF"><enum>I</enum><header>Deposit insurance funds</header> <section id="HC7F4F0854944F599277950A5843FCB7"><enum>186.</enum><header>Study of safety and soundness of funds</header> <subsection id="HC80FBD5D46A755CAEB69789E82CDD3D"><enum>(a)</enum><header>Study required</header><text>The Board of Directors of the Federal Deposit Insurance Corporation shall conduct a study of the following issues with regard to the Bank Insurance Fund and the Savings Association Insurance Fund:</text> <paragraph id="H4301158D4C7623165853DE809DB15BF"><enum>(1)</enum><header>Safety and soundness</header><text>The safety and soundness of the funds and the adequacy of the reserve requirements applicable to the funds in light of—</text> <subparagraph id="H12D557434E186DBB2054AEB3B96E701"><enum>(A)</enum><text>the size of the insured depository institutions which are resulting from mergers and consolidations since the effective date of the <act-name parsable-cite="RNIBBEA">Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994</act-name>; and</text></subparagraph> <subparagraph id="HF8A1CE714135096AB4462E89EE7FF6E"><enum>(B)</enum><text>the affiliation of insured depository institutions with other financial institutions pursuant to this Act and the amendments made by this Act.</text></subparagraph></paragraph> <paragraph id="HDA8A69564E0AF7EDEB1C3AB521B2C17"><enum>(2)</enum><header>Concentration levels</header><text>The concentration levels of the funds, taking into account the number of members of each fund and the geographic distribution of such members, and the extent to which either fund is exposed to higher risks due to a regional concentration of members or an insufficient membership base relative to the size of member institutions.</text></paragraph> <paragraph id="H0F4613F747CEAB5233148F8E6856C1F"><enum>(3)</enum><header>Merger issues</header><text>Issues relating to the planned merger of the funds, including the cost of merging the funds and the manner in which such costs will be distributed among the members of the respective funds.</text></paragraph></subsection> <subsection id="H3DC2E3F64E4D1F9E09DD06BBDC8D85C"><enum>(b)</enum><header>Report required</header> <paragraph id="H42047A88411FE9AA4BD043BBB4EEA87"><enum>(1)</enum><header>In general</header><text>Before the end of the 9-month period beginning on the date of the enactment of this Act, the Board of Directors of the Federal Deposit Insurance Corporation shall submit a report to the Congress on the study conducted pursuant to subsection (a).</text></paragraph> <paragraph id="H5D9007C84D7B383B45C699A46F07FD1"><enum>(2)</enum><header>Contents of report</header><text>The report shall include—</text> <subparagraph id="HB684BBEF489A5689023B0A94B08EDDF"><enum>(A)</enum><text>detailed findings of the Board of Directors with regard to the issues described in subsection (a);</text></subparagraph> <subparagraph id="H3D2BC07B4A130094608218A875B472F"><enum>(B)</enum><text>a description of the plans developed by the Board of Directors for merging the Bank Insurance Fund and the Savings Association Insurance Fund, including an estimate of the amount of the cost of such merger which would be borne by Savings Association Insurance Fund members; and</text></subparagraph> <subparagraph id="H68AD60CB4B5BD8B955EA1EAB89E5C2C"><enum>(C)</enum><text>such recommendations for legislative and administrative action as the Board of Directors determines to be necessary or appropriate to preserve the safety and soundness of the deposit insurance funds, reduce the risks to such funds, provide for an efficient merger of such funds, and for other purposes.</text></subparagraph></paragraph></subsection> <subsection id="H3DA46D1B481A57C5CA6F8097CC074DF"><enum>(c)</enum><header>Definitions</header><text>For purposes of this section, the following definitions shall apply:</text> <paragraph id="H82D617AE4297BFCDEDC68292817E8BB"><enum>(1)</enum><header>Insured depository institution</header><text>The term <term>insured depository institution</term> has the same meaning as in section 3(c) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph> <paragraph id="HEF55929947A132DED0B8A8B7F6D41BD"><enum>(2)</enum><header>BIF and SAIF members</header><text>The terms <term>Bank Insurance Fund member</term> and <term>Savings Association Insurance Fund member</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="FDIA/7">section 7</external-xref>(<italic>l</italic>) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph></subsection></section> <section id="H664F51A4466794D25D68D9AE50ED69E"><enum>187.</enum><header>Elimination of SAIF and DIF special reserves</header> <subsection id="H99541D964F5FD1B29BC44BBBB9BED44"><enum>(a)</enum><header>SAIF special reserves</header><text>Section 11(a)(6) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1821(a)(6)">12 U.S.C. 1821(a)(6)</external-xref>) is amended by striking subparagraph (L).</text></subsection> <subsection id="H518FAD2246C4CDEA688DDC8A132872E"><enum>(b)</enum><header>DIF special reserves</header><text><external-xref legal-doc="act" parsable-cite="DIFA96/2704">Section 2704</external-xref> of the <act-name parsable-cite="DIFA96">Deposit Insurance Funds Act of 1996</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1821 note">12 U.S.C. 1821 note</external-xref>) is amended—</text> <paragraph id="H194F28254E548E0B442D6BA5E1C4988"><enum>(1)</enum><text>by striking subsection (b); and</text></paragraph> <paragraph id="H5FC895224EDA41F41FF231B8C7052B1"><enum>(2)</enum><text>in subsection (d)—</text> <subparagraph id="HFCE4187B48AC071928F786A3AF80391"><enum>(A)</enum><text>by striking paragraph (4);</text></subparagraph> <subparagraph id="HF27AC07B4865A92FFB4B3186DF5500A"><enum>(B)</enum><text>in paragraph (6)(C)(i), by striking <quote>(6) and (7)</quote> and inserting <quote>(5), (6), and (7)</quote>; and</text></subparagraph> <subparagraph id="H9CB38F3E4561A044FF051FBBECFC92B"><enum>(C)</enum><text>in paragraph (6)(C), by striking clause (ii) and inserting the following:</text> <quoted-block id="HC42CC79A4C587588D38D699F555C6BB"> <clause id="HAD84871C4267CE0DBD4ECAAEA113468"><enum>(ii)</enum><text>by redesignating paragraph (8) as paragraph (5).</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection></section></subtitle> <subtitle id="H4BC9CA114F67066BE192988C4143BD7"><enum>J</enum><header>Effective date of title</header> <section id="H6D07FF81436798128609DCA4F428F20"><enum>191.</enum><header>Effective date</header><text display-inline="no-display-inline">Except with regard to any subtitle or other provision of this title for which a specific effective date is provided, this title and the amendments made by this title shall take effect at the end of the 270-day period beginning on the date of the enactment of this Act.</text></section></subtitle> <enum>II</enum><header>Functional regulation</header> <subtitle id="H477FE66D4B9E74920D66AB8EC3DBDE3"><enum>A</enum><header>Brokers and dealers</header> <section id="HA7FA498A410240C2A5218385AE4809D"><enum>201.</enum><header>Definition of broker</header><text display-inline="no-display-inline">Section 3(a)(4) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(4)">15 U.S.C. 78c(a)(4)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="H867F30B447F89356D3000BAE2D01FFA"> <paragraph id="H7F3078BB4BB8CABB603352A1174361E"><enum>(4)</enum><header>Broker</header> <subparagraph id="H69F99689434EE54FB012C6A9B7DEDD8"><enum>(A)</enum><header>In general</header><text>The term <term>broker</term> means any person engaged in the business of effecting transactions in securities for the account of others.</text></subparagraph> <subparagraph id="HB5BB120C4149E5B5D7F2ACB6F1F9BD6"><enum>(B)</enum><header>Exception for certain bank activities</header><text>A bank shall not be considered to be a broker because the bank engages in any of the following activities under the conditions described:</text> <clause id="H84DCF61A40D97767C55308AFD3BD57F"><enum>(i)</enum><header>Third party brokerage arrangements</header><text>The bank enters into a contractual or other arrangement with a broker or dealer registered under this title under which the broker or dealer offers brokerage services on or off the premises of the bank if—</text> <subclause id="H6C4B63744D5D9E9923EC239EEDC42A3"><enum>(I)</enum><text>such broker or dealer is clearly identified as the person performing the brokerage services;</text></subclause> <subclause id="HF7690D124CF6C9F7B6C14FAFC2D857E"><enum>(II)</enum><text>the broker or dealer performs brokerage services in an area that is clearly marked and, to the extent practicable, physically separate from the routine deposit-taking activities of the bank;</text></subclause> <subclause id="H12059A784FD8C39F3152B9B463BC37F"><enum>(III)</enum><text>any materials used by the bank to advertise or promote generally the availability of brokerage services under the contractual or other arrangement clearly indicate that the brokerage services are being provided by the broker or dealer and not by the bank;</text></subclause> <subclause id="H94AB59B14DC79FF35534E3B45304D7A"><enum>(IV)</enum><text>any materials used by the bank to advertise or promote generally the availability of brokerage services under the contractual or other arrangement are in compliance with the Federal securities laws before distribution;</text></subclause> <subclause id="H5EADBB53440E2BBD1A76EFA3AC75D63"><enum>(V)</enum><text>bank employees (other than associated persons of a broker or dealer who are qualified pursuant to the rules of a self-regulatory organization) perform only clerical or ministerial functions in connection with brokerage transactions including scheduling appointments with the associated persons of a broker or dealer, except that bank employees may forward customer funds or securities and may describe in general terms the range of investment vehicles available from the bank and the broker or dealer under the contractual or other arrangement;</text></subclause> <subclause id="H761234F54E0A1EC712EEB2BBE729C1E"><enum>(VI)</enum><text>bank employees do not directly receive incentive compensation for any brokerage transaction unless such employees are associated persons of a broker or dealer and are qualified pursuant to the rules of a self-regulatory organization, except that the bank employees may receive compensation for the referral of any customer if the compensation is a nominal one-time cash fee of a fixed dollar amount and the payment of the fee is not contingent on whether the referral results in a transaction;</text></subclause> <subclause id="HEF9157BF44B6838E36B83CA74329B5C"><enum>(VII)</enum><text>such services are provided by the broker or dealer on a basis in which all customers which receive any services are fully disclosed to the broker or dealer;</text></subclause> <subclause id="H7A71227F40A3E0FC74A970A3D6E281E"><enum>(VIII)</enum><text>the bank does not carry a securities account of the customer except in a customary custodian or trustee capacity; and</text></subclause> <subclause id="H54CCE1364280ADB44569D4916CE3F8C"><enum>(IX)</enum><text>the bank, broker, or dealer informs each customer that the brokerage services are provided by the broker or dealer and not by the bank and that the securities are not deposits or other obligations of the bank, are not guaranteed by the bank, and are not insured by the Federal Deposit Insurance Corporation.</text></subclause></clause> <clause id="H3F90DC3B4F09C1697921D2A1A72F88D"><enum>(ii)</enum><header>Trust activities</header><text>The bank effects transactions in a trustee capacity, or effects transactions in a fiduciary capacity in its trust department or other department that is regularly examined by bank examiners for compliance with fiduciary principles and standards, and (in either case)—</text> <subclause id="H095C5CAB4A9C25B467ADB2AEB4B37FE"><enum>(I)</enum><text>is primarily compensated for such transactions on the basis of an administration or annual fee (payable on a monthly, quarterly, or other basis), a percentage of assets under management, or a flat or capped per order processing fee equal to not more than the cost incurred by the bank in connection with executing securities transactions for trustee and fiduciary customers, or any combination of such fees, consistent with fiduciary principles and standards; and</text></subclause> <subclause id="H23E80803484AAA2879FF84842250B78"><enum>(II)</enum><text>does not publicly solicit brokerage business, other than by advertising that it effects transactions in securities in conjunction with advertising its other trust activities.</text></subclause></clause> <clause id="HCF80461E4DB0F2E355E6768D09EDB81"><enum>(iii)</enum><header>Permissible securities transactions</header><text>The bank effects transactions in—</text> <subclause id="HEB82B9474DAFF45F471419904BB1E58"><enum>(I)</enum><text>commercial paper, bankers acceptances, or commercial bills;</text></subclause> <subclause id="H1FB49EBD4AB288C31B277D8D8FC64EC"><enum>(II)</enum><text>exempted securities;</text></subclause> <subclause id="HBCBADB784C412717C518ED9517C0FCC"><enum>(III)</enum><text>qualified Canadian government obligations as defined in section 5136 of the Revised Statutes, in conformity with section 15C of this title and the rules and regulations thereunder, or obligations of the North American Development Bank; or</text></subclause> <subclause id="HFAA770D34969D07CF26EA6883BA00F6"><enum>(IV)</enum><text>any standardized, credit enhanced debt security issued by a foreign government pursuant to the March 1989 plan of then Secretary of the Treasury Brady, used by such foreign government to retire outstanding commercial bank loans.</text></subclause></clause> <clause id="H9ADA57184E3B40EDFDCF7284AD535E5"><enum>(iv)</enum><header>Certain stock purchase plans</header> <subclause id="HF4310DA7407BE311F91A0193F0047C0"><enum>(I)</enum><header>Employee benefit plans</header><text>The bank effects transactions, as part of its transfer agency activities, in the securities of an issuer as part of any pension, retirement, profit-sharing, bonus, thrift, savings, incentive, or other similar benefit plan for the employees of that issuer or its subsidiaries, if—</text> <item id="HC86538E146F3F6790EB386AC7108C6C"><enum>(aa)</enum><text>the bank does not solicit transactions or provide investment advice with respect to the purchase or sale of securities in connection with the plan; and</text></item> <item id="HA6F902C14C7E86ECC8FB1797B1A26A6"><enum>(bb)</enum><text>the bank’s compensation for such plan or program consists primarily of administration fees, or flat or capped per order processing fees, or both.</text></item></subclause> <subclause id="H2829E1BD41FE72B8CEAE9B90694EFBB"><enum>(II)</enum><header>Dividend reinvestment plans</header><text>The bank effects transactions, as part of its transfer agency activities, in the securities of an issuer as part of that issuer’s dividend reinvestment plan, if—</text> <item id="H49AD3D1741E02007A78A71BEB96B904"><enum>(aa)</enum><text>the bank does not solicit transactions or provide investment advice with respect to the purchase or sale of securities in connection with the plan;</text></item> <item id="H76BCBBFE4144807AE5BDBCA700D0EA1"><enum>(bb)</enum><text>the bank does not net shareholders’ buy and sell orders, other than for programs for odd-lot holders or plans registered with the Commission; and</text></item> <item id="HE4B847A6418C416B0D92319119FC0F1"><enum>(cc)</enum><text>the bank’s compensation for such plan or program consists primarily of administration fees, or flat or capped per order processing fees, or both.</text></item></subclause> <subclause id="HA0BF4D6C4C0957FAF07220B8C0D4D6E"><enum>(III)</enum><header>Issuer plans</header><text>The bank effects transactions, as part of its transfer agency activities, in the securities of an issuer as part of a plan or program for the purchase or sale of that issuer’s shares, if—</text> <item id="HF017F263457C6094388E4F91F5DACED"><enum>(aa)</enum><text>the bank does not solicit transactions or provide investment advice with respect to the purchase or sale of securities in connection with the plan or program;</text></item> <item id="HB842C7054343983E50D388B800E9842"><enum>(bb)</enum><text>the bank does not net shareholders’ buy and sell orders, other than for programs for odd-lot holders or plans registered with the Commission; and</text></item> <item id="HE30988694EAA6E5999D43F93AEFB724"><enum>(cc)</enum><text>the bank’s compensation for such plan or program consists primarily of administration fees, or flat or capped per order processing fees, or both.</text></item></subclause> <subclause id="H6459484049BDF430893EEEA3B7B4EC5"><enum>(IV)</enum><header>Permissible delivery of materials</header><text>The exception to being considered a broker for a bank engaged in activities described in subclauses (I), (II), and (III) will not be affected by a bank’s delivery of written or electronic plan materials to employees of the issuer, shareholders of the issuer, or members of affinity groups of the issuer, so long as such materials are—</text> <item id="HA01F88AE41F04A8AF0714B97A2AAAA8"><enum>(aa)</enum><text>comparable in scope or nature to that permitted by the Commission as of the date of the enactment of the &short-title1;; or</text></item> <item id="H651868774B03AA0F7720309AC8EC4D5"><enum>(bb)</enum><text>otherwise permitted by the Commission.</text></item></subclause></clause> <clause id="H51DCFCA7446839ABB8184488C5596FD"><enum>(v)</enum><header>Sweep accounts</header><text>The bank effects transactions as part of a program for the investment or reinvestment of bank deposit funds into any no-load, open-end management investment company registered under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> that holds itself out as a money market fund.</text></clause> <clause id="H8BC28111475A4C7F59C8019BCF964EB"><enum>(vi)</enum><header>Affiliate transactions</header><text>The bank effects transactions for the account of any affiliate of the bank (as defined in section 2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>) other than—</text> <subclause id="H003B9F5C417CF33C3A6367A2F3B7917"><enum>(I)</enum><text>a registered broker or dealer; or</text></subclause> <subclause id="H71F34BE243DA3C65BBCC0D98CB8525A"><enum>(II)</enum><text>an affiliate that is engaged in merchant banking, as described in section 6(c)(3)(H) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subclause></clause> <clause id="H53B4199242E7F924A6E877BDC092B7C"><enum>(vii)</enum><header>Private securities offerings</header><text>The bank—</text> <subclause id="HFD749A5E424AFF4C236329A9A478854"><enum>(I)</enum><text>effects sales as part of a primary offering of securities not involving a public offering, pursuant to section 3(b), 4(2), or 4(6) of the <act-name parsable-cite="SA33">Securities Act of 1933</act-name> or the rules and regulations issued thereunder;</text></subclause> <subclause id="H621A036B4E5F100DC84CCD9DB835C00"><enum>(II)</enum><text>at any time after the date that is 1 year after the date of enactment of the &short-title1;, is not affiliated with a broker or dealer that has been registered for more than 1 year in accordance with this Act, and engages in dealing, market making, or underwriting activities, other than with respect to exempted securities; and</text></subclause> <subclause id="H1205F16C4AA4948C469F769FE23BCFE"><enum>(III)</enum><text>effects transactions exclusively with qualified investors.</text></subclause></clause> <clause id="H858EFE35410335728466818CBED25FC"><enum>(viii)</enum><header>Safekeeping and custody activities</header> <subclause id="H58C355B64468BD580A8C3C8DBAAD10B"><enum>(I)</enum><header>In general</header><text>The bank, as part of customary banking activities—</text> <item id="HD365BFBB4F5DBED106A63DAA9103A3E"><enum>(aa)</enum><text>provides safekeeping or custody services with respect to securities, including the exercise of warrants and other rights on behalf of customers;</text></item> <item id="HAB6919794CBA0CD884972A83E4CD7E9"><enum>(bb)</enum><text>facilitates the transfer of funds or securities, as a custodian or a clearing agency, in connection with the clearance and settlement of its customers’ transactions in securities;</text></item> <item id="H91A244A64DCDED4F74D63B8DDA20D5E"><enum>(cc)</enum><text>effects securities lending or borrowing transactions with or on behalf of customers as part of services provided to customers pursuant to division (aa) or (bb) or invests cash collateral pledged in connection with such transactions; or</text></item> <item id="H299F0D4E40836BD299092D8FC1DC604"><enum>(dd)</enum><text>holds securities pledged by a customer to another person or securities subject to purchase or resale agreements involving a customer, or facilitates the pledging or transfer of such securities by book entry or as otherwise provided under applicable law.</text></item></subclause> <subclause id="HA178D9874C4A8A9961F4649D0060F0A"><enum>(II)</enum><header>Exception for carrying broker activities</header><text>The exception to being considered a broker for a bank engaged in activities described in subclause (I) shall not apply if the bank, in connection with such activities, acts in the United States as a carrying broker (as such term, and different formulations thereof, are used in section 15(c)(3) and the rules and regulations thereunder) for any broker or dealer, unless such carrying broker activities are engaged in with respect to government securities (as defined in paragraph (42) of this subsection).</text></subclause></clause> <clause id="HF6FCFD7146200C526FBFA0AC020781F"><enum>(ix)</enum><header>Banking products</header><text>The bank effects transactions in traditional banking products, as defined in section 206(a) of the &short-title1;.</text></clause> <clause id="H1E1AD07D4DF96B685511AF9509DDA09"><enum>(x)</enum><header>De minimis exception</header><text>The bank effects, other than in transactions referred to in clauses (i) through (ix), not more than 500 transactions in securities in any calendar year, and such transactions are not effected by an employee of the bank who is also an employee of a broker or dealer.</text></clause></subparagraph> <subparagraph id="H11ADADED4984B80402133ABFAEC18E2"><enum>(C)</enum><header>Broker dealer execution</header><text>The exception to being considered a broker for a bank engaged in activities described in clauses (ii), (iv), and (viii) of subparagraph (B) shall not apply if the activities described in such provisions result in the trade in the United States of any security that is a publicly traded security in the United States, unless—</text> <clause id="HEE69098E4018A1014EE2D7A605BFD69"><enum>(i)</enum><text>the bank directs such trade to a registered broker or dealer for execution;</text></clause> <clause id="H1B8FABA14843778E48D10BBFE8A97DE"><enum>(ii)</enum><text>the trade is a cross trade or other substantially similar trade of a security that—</text> <subclause id="HF765F5B546BC89C77F74D18ED2377A6"><enum>(I)</enum><text>is made by the bank or between the bank and an affiliated fiduciary; and</text></subclause> <subclause id="H6CAEDC07484812E09C3B198EBB0FAB1"><enum>(II)</enum><text>is not in contravention of fiduciary principles established under applicable Federal or State law; or</text></subclause></clause> <clause id="H62A9BA36437912A7726876A3B1EFEBC"><enum>(iii)</enum><text>the trade is conducted in some other manner permitted under rules, regulations, or orders as the Commission may prescribe or issue.</text></clause></subparagraph> <subparagraph id="HAEBE16CD4B8AEE84B8192A9B71A53A6"><enum>(D)</enum><header>No effect of bank exemptions on other Commission authority</header><text>The exception to being considered a broker for a bank engaged in activities described in subparagraphs (B) and (C) shall not affect the authority of the Commission under any other provision of this Act or any other securities law.</text></subparagraph> <subparagraph id="H6ED8A4084F2F1CBED71FE598FC5BF47"><enum>(E)</enum><header>Fiduciary capacity</header><text>For purposes of subparagraph (B)(ii), the term <term>fiduciary capacity</term> means—</text> <clause id="H0CEAB0A94E4CA9DA8187F6856EB1B5E"><enum>(i)</enum><text>in the capacity as trustee, executor, administrator, registrar of stocks and bonds, transfer agent, guardian, assignee, receiver, or custodian under a uniform gift to minor act, or as an investment adviser if the bank receives a fee for its investment advice;</text></clause> <clause id="H34F5D10641A790D6328D0AA4A181900"><enum>(ii)</enum><text>in any capacity in which the bank possesses investment discretion on behalf of another; or</text></clause> <clause id="H954B37FC440F7420E7D3FD84B800D3B"><enum>(iii)</enum><text>in any other similar capacity.</text></clause></subparagraph> <subparagraph id="H14C5F6B041F41197AB6A46BCEAC5808"><enum>(F)</enum><header>Exception for entities Subject to Section 15(e)</header><text>The term <term>broker</term> does not include a bank that—</text> <clause id="HDD35F6FF45914F1F0FC7E9B8002CA7D"><enum>(i)</enum><text>was, immediately prior to the enactment of the &short-title1;, subject to section 15(e); and</text></clause> <clause id="H40DA31A14E964A46918BFE8E4EBBBAE"><enum>(ii)</enum><text>is subject to such restrictions and requirements as the Commission considers appropriate.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HB0ABB3E4408F91BFA8C2799D88D3A71"><enum>202.</enum><header>Definition of dealer</header><text display-inline="no-display-inline">Section 3(a)(5) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(5)">15 U.S.C. 78c(a)(5)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="H1429FF07401464F68B9938AB0356AD5"> <paragraph id="H40A78FB440BFC897D063029686C5480"><enum>(5)</enum><header>Dealer</header> <subparagraph id="H263D8BCB48A89AF8CB744BB2D7BEA7E"><enum>(A)</enum><header>In general</header><text>The term <term>dealer</term> means any person engaged in the business of buying and selling securities for such person’s own account through a broker or otherwise.</text></subparagraph> <subparagraph id="H97D974AA423DC1947612C89423C4260"><enum>(B)</enum><header>Exception for person not engaged in the business of dealing</header><text>The term <term>dealer</term> does not include a person that buys or sells securities for such person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business.</text></subparagraph> <subparagraph id="H5A5A4B3049C298BF4B96568ACDD9100"><enum>(C)</enum><header>Exception for certain bank activities</header><text>A bank shall not be considered to be a dealer because the bank engages in any of the following activities under the conditions described:</text> <clause id="HA4B92F2E47A71051B62FCC85E867E64"><enum>(i)</enum><header>Permissible securities transactions</header><text>The bank buys or sells—</text> <subclause id="H86F5754F42AEDEBD1570D0AD06A0048"><enum>(I)</enum><text>commercial paper, bankers acceptances, or commercial bills;</text></subclause> <subclause id="H8DFE4B704F8E6B0F71C88598A5C47F1"><enum>(II)</enum><text>exempted securities;</text></subclause> <subclause id="H7593D5D247D8BB26900033A2442BC5C"><enum>(III)</enum><text>qualified Canadian government obligations as defined in section 5136 of the Revised Statutes of the United States, in conformity with section 15C of this title and the rules and regulations thereunder, or obligations of the North American Development Bank; or</text></subclause> <subclause id="HC4077F87480C365307984FBCFB10548"><enum>(IV)</enum><text>any standardized, credit enhanced debt security issued by a foreign government pursuant to the March 1989 plan of then Secretary of the Treasury Brady, used by such foreign government to retire outstanding commercial bank loans.</text></subclause></clause> <clause id="H78D5B5164F0E4C15E3728FBBDD9E861"><enum>(ii)</enum><header>Investment, trustee, and fiduciary transactions</header><text>The bank buys or sells securities for investment purposes—</text> <subclause id="H154D9EBA4D7F9FFC5CFD04B7A102F0B"><enum>(I)</enum><text>for the bank; or</text></subclause> <subclause id="HB46025384B66697C1AE5429BFA5134C"><enum>(II)</enum><text>for accounts for which the bank acts as a trustee or fiduciary.</text></subclause></clause> <clause id="HCE6C5EBB46353379764672B3C809B2B"><enum>(iii)</enum><header>Asset-backed transactions</header><text>The bank engages in the issuance or sale to qualified investors, through a grantor trust or otherwise, of securities backed by or representing an interest in notes, drafts, acceptances, loans, leases, receivables, other obligations, or pools of any such obligations predominantly originated by the bank, or a syndicate of banks of which the bank is a member, or an affiliate of any such bank other than a broker or dealer.</text></clause> <clause id="HE341D3E1445871EB296E1C92C8D4AC1"><enum>(iv)</enum><header>Banking products</header><text>The bank buys or sells traditional banking products, as defined in section 206(a) of the &short-title1;.</text></clause> <clause id="HC155F5F448E0FFA9B42DD092D004904"><enum>(v)</enum><header>Derivative instruments</header><text>The bank issues, buys, or sells any derivative instrument to which the bank is a party—</text> <subclause id="H1376A68445E5D7054A07CE8A35F600F"><enum>(I)</enum><text>to or from a qualified investor, except that if the instrument provides for the delivery of one or more securities (other than a derivative instrument or government security), the transaction shall be effected with or through a registered broker or dealer;</text></subclause> <subclause id="H986F77D04DC182D85C96998CE3BBE3F"><enum>(II)</enum><text>to or from other persons, except that if the derivative instrument provides for the delivery of one or more securities (other than a derivative instrument or government security), or is a security (other than a government security), the transaction shall be effected with or through a registered broker or dealer; or</text></subclause> <subclause id="HAD802FF243537984E12253A5B849B69"><enum>(III)</enum><text>to or from any person if the instrument is neither a security nor provides for the delivery of one or more securities (other than a derivative instrument).</text></subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H6B42A3EA44447C24E8C1D89868E0A2B"><enum>203.</enum><header>Registration for sales of private securities offerings</header><text display-inline="no-display-inline">Section 15A of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78o–3">15 U.S.C. 78o–3</external-xref>) is amended by inserting after subsection (i) the following new subsection:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="H6363664C4946E10F0FB872B300E0453"> <subsection id="H4636D8C147C2ABB9E8D814AF1D61EBF"><enum>(j)</enum><header>Registration for sales of private securities offerings</header><text>A registered securities association shall create a limited qualification category for any associated person of a member who effects sales as part of a primary offering of securities not involving a public offering, pursuant to section 3(b), 4(2), or 4(6) of the <act-name parsable-cite="SA33">Securities Act of 1933</act-name> and the rules and regulations thereunder, and shall deem qualified in such limited qualification category, without testing, any bank employee who, in the six month period preceding the date of enactment of this Act, engaged in effecting such sales.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HF449A39240C6AF0164AD728C7F6713A"><enum>204.</enum><header>Sales practices and complaint procedures</header><text display-inline="no-display-inline">Section 18 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="H25C3787247DACDB49A3C409327A4E65"> <subsection id="HC15ECD1B4233178E37A4C09BEAC3FEE"><enum>(s)</enum><header>Sales practices and complaint procedures with respect to bank securities activities</header> <paragraph id="H6206E15F452F6E8DE57341852457EC2"><enum>(1)</enum><header>Regulations required</header><text>Each Federal banking agency shall prescribe and publish in final form, not later than 6 months after the date of enactment of the &short-title1;, regulations which apply to retail transactions, solicitations, advertising, or offers of any security by any insured depository institution or any affiliate thereof other than a registered broker or dealer or an individual acting on behalf of such a broker or dealer who is an associated person of such broker or dealer. Such regulations shall include—</text> <subparagraph id="HC051C56647B2024C00CADBB1CCE58D4"><enum>(A)</enum><text>requirements that sales practices comply with just and equitable principles of trade that are substantially similar to the Rules of Fair Practice of the National Association of Securities Dealers; and</text></subparagraph> <subparagraph id="H17F467574BD1FE2570F8D9B964F40E7"><enum>(B)</enum><text>requirements prohibiting (i) conditioning an extension of credit on the purchase or sale of a security; and (ii) any conduct leading a customer to believe that an extension of credit is conditioned upon the purchase or sale of a security.</text></subparagraph></paragraph> <paragraph id="H528AC3D14C874D55017684B04C18CA1"><enum>(2)</enum><header>Procedures required</header><text>The appropriate Federal banking agencies shall jointly establish procedures and facilities for receiving and expeditiously processing complaints against any bank or employee of a bank arising in connection with the purchase or sale of a security by a customer, including a complaint alleging a violation of the regulations prescribed under paragraph (1), but excluding a complaint involving an individual acting on behalf of such a broker or dealer who is an associated person of such broker or dealer. The use of any such procedures and facilities by such a customer shall be at the election of the customer. Such procedures shall include provisions to refer a complaint alleging fraud to the Securities and Exchange Commission and appropriate State securities commissions.</text></paragraph> <paragraph id="HD49AE8AE46CCDFBC0673E1A3AD1C30E"><enum>(3)</enum><header>Required actions</header><text>The actions required by the Federal banking agencies under paragraph (2) shall include the following:</text> <subparagraph id="HE2D54A4F49DB3F037B7A5CBDC55ED43"><enum>(A)</enum><text>establishing a group, unit, or bureau within each such agency to receive such complaints;</text></subparagraph> <subparagraph id="H31B2CE7D4B503BD041381DA5B7C4EC2"><enum>(B)</enum><text>developing and establishing procedures for investigating, and permitting customers to investigate, such complaints;</text></subparagraph> <subparagraph id="H1B814A3B432BF0889465668B03C44BE"><enum>(C)</enum><text>developing and establishing procedures for informing customers of the rights they may have in connection with such complaints;</text></subparagraph> <subparagraph id="H01BB89B7417506FEBBA39AAA564D21A"><enum>(D)</enum><text>developing and establishing procedures that allow customers a period of at least 6 years to make complaints and that do not require customers to pay the costs of the proceeding; and</text></subparagraph> <subparagraph id="HB83F9C2540447851AB6CCCA8C16636D"><enum>(E)</enum><text>developing and establishing procedures for resolving such complaints, including procedures for the recovery of losses to the extent appropriate.</text></subparagraph></paragraph> <paragraph id="H59825FDC4CB4AE17EF119096D11DA4C"><enum>(4)</enum><header>Consultation and joint regulations</header><text>The Federal banking agencies shall consult with each other and prescribe joint regulations pursuant to paragraphs (1) and (2), after consultation with the Securities and Exchange Commission.</text></paragraph> <paragraph id="H69BA424545515D88A6801DA03BBC200"><enum>(5)</enum><header>Procedures in addition to other remedies</header><text>The procedures and remedies provided under this subsection shall be in addition to, and not in lieu of, any other remedies available under law.</text></paragraph> <paragraph id="H138B3A4C41D2C4D9DB8C2991EEF0764"><enum>(6)</enum><header>Definition</header><text>As used in this subsection—</text> <subparagraph id="H0F85B5AE478560E0C0EDAB88C593C6B"><enum>(A)</enum><text>the term <term>security</term> has the same meaning as in section 3(a)(10) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>;</text></subparagraph> <subparagraph id="H8347D8E542F675603CE8D491C49D18C"><enum>(B)</enum><text>the term <term>registered broker or dealer</term> has the same meaning as in section 3(a)(48) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>; and</text></subparagraph> <subparagraph id="H9424ECEF40A65CC3550213A9A5EC975"><enum>(C)</enum><text>the term <term>associated person</term> has the same meaning as in section 3(a)(18) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H928F52254E23B2D611526DA72D3CF4D"><enum>205.</enum><header>Information sharing</header><text display-inline="no-display-inline">Section 18 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="HFC936E824E6328CDACC55AA2AC180B2"> <subsection id="H63E62F034F4B4C147CFD12AE4D4145D"><enum>(t)</enum><header>Recordkeeping requirements</header> <paragraph id="HFB9C94064E07FAF9A54E84BDD3D5F50"><enum>(1)</enum><header>Requirements</header><text>Each appropriate Federal banking agency, after consultation with and consideration of the views of the Commission, shall establish recordkeeping requirements for banks relying on exceptions contained in paragraphs (4) and (5) of section 3(a) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>. Such recordkeeping requirements shall be sufficient to demonstrate compliance with the terms of such exceptions and be designed to facilitate compliance with such exceptions. Each appropriate Federal banking agency shall make any such information available to the Commission upon request.</text></paragraph> <paragraph id="H8A9FB90A4BD1562CF1AC41B4733590F"><enum>(2)</enum><header>Definitions</header><text>As used in this subsection the term <term>Commission</term> means the Securities and Exchange Commission.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H96EE5DBB4DF2C87B6A3DADAD04E6617"><enum>206.</enum><header>Definition and treatment of banking products</header> <subsection id="H9CC54BDD4B27A3A027363D8AA6F2DBD"><enum>(a)</enum><header>Definition of traditional banking product</header><text>For purposes of paragraphs (4) and (5) of section 3(a) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)">15 U.S.C. 78c(a)</external-xref> (4), (5)), the term <term>traditional banking product</term> means—</text> <paragraph id="H4778BBE84708FB922A87CF97BF11A92"><enum>(1)</enum><text>a deposit account, savings account, certificate of deposit, or other deposit instrument issued by a bank;</text></paragraph> <paragraph id="H87738CF34893CA6F61510F8A53F179A"><enum>(2)</enum><text>a banker’s acceptance;</text></paragraph> <paragraph id="HC9561AEF48FBCCAB1C11AB830038B2D"><enum>(3)</enum><text>a letter of credit issued or loan made by a bank;</text></paragraph> <paragraph id="H79766E2C472ABC83941C88A596F5EE1"><enum>(4)</enum><text>a debit account at a bank arising from a credit card or similar arrangement;</text></paragraph> <paragraph id="H0B898BFF435D9E504AD4B59A18E00BA"><enum>(5)</enum><text>a participation in a loan which the bank or an affiliate of the bank (other than a broker or dealer) funds, participates in, or owns that is sold—</text> <subparagraph id="H63BD3B9649A7AFF02AD99099FE0A03D"><enum>(A)</enum><text>to qualified investors; or</text></subparagraph> <subparagraph id="HBAE2A88D44845A6E15ACAB83F1BEA25"><enum>(B)</enum><text>to other persons that—</text> <clause id="HFABC6A7D4571F94B0B863CB2B707C7C"><enum>(i)</enum><text>have the opportunity to review and assess any material information, including information regarding the borrower’s creditworthiness; and</text></clause> <clause id="HCB5BAAEA41B59E4DC45A8AACE8776D9"><enum>(ii)</enum><text>based on such factors as financial sophistication, net worth, and knowledge and experience in financial matters, have the capability to evaluate the information available, as determined under generally applicable banking standards or guidelines; and</text></clause></subparagraph></paragraph> <paragraph id="H85E6F39E4DD94668437DEBAFE235B33"><enum>(6)</enum><text>any derivative instrument, whether or not individually negotiated, involving or relating to—</text> <subparagraph id="H931B70BF4DAC20DFE35D3195C51D180"><enum>(A)</enum><text>foreign currencies, except options on foreign currencies that trade on a national securities exchange;</text></subparagraph> <subparagraph id="H702B89774B64C28B41625EB2AF7EA8C"><enum>(B)</enum><text>interest rates, except interest rate derivative instruments that—</text> <clause id="HB1EE9C714D286781BC93E89AC49CF80"><enum>(i)</enum><text>are based on a security or a group or index of securities (other than government securities or a group or index of government securities);</text></clause> <clause id="HB0499420448371A2F5C7A68200B1100"><enum>(ii)</enum><text>provide for the delivery of one or more securities (other than government securities); or</text></clause> <clause id="H6C5F64C249FD3A824C411396F3A6FF5"><enum>(iii)</enum><text>trade on a national securities exchange; or</text></clause></subparagraph> <subparagraph id="HCCC9744F47E19CBF62F8CABCBFAA6CB"><enum>(C)</enum><text>commodities, other rates, indices, or other assets, except derivative instruments that—</text> <clause id="HFF2A714C40A9AF801304F3BC26BEDDD"><enum>(i)</enum><text>are securities or that are based on a group or index of securities (other than government securities or a group or index of government securities);</text></clause> <clause id="H36C559EF41F093881F14CA906C5539C"><enum>(ii)</enum><text>provide for the delivery of one or more securities (other than government securities); or</text></clause> <clause id="H1A7AA33F4600828AA944ECA5F0B6B22"><enum>(iii)</enum><text>trade on a national securities exchange.</text></clause></subparagraph></paragraph></subsection> <subsection id="HE68A1DA748E53A89F56BCE898BDEBD8"><enum>(b)</enum><header>Amendment to the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name></header><text><external-xref legal-doc="act" parsable-cite="SEA34/15">Section 15</external-xref> of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78o">15 U.S.C. 78o</external-xref>) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="H97E447E04DDE849C487BC380A2CC8DF"> <subsection id="H6E02E40C40CF595141DFC6919781A69"><enum>(i)</enum><header>Transactions involving hybrid products</header> <paragraph id="HAF2223484F7629B49F3A4CA2C1C8652"><enum>(1)</enum><header>Commission authority</header> <subparagraph id="H4E4A1E024A1F15361321A1848C94F5E"><enum>(A)</enum><header>In general</header><text>The Commission may, after consultation with the Board, determine, by regulation published in the Federal Register, that a bank that effects transactions in, or buys or sells, a new product should be subject to the registration requirements of this section.</text></subparagraph> <subparagraph id="H93CCF41C4E99F341D4BB8EB90582DBF"><enum>(B)</enum><header>Limitation</header><text>The Commission may not impose the registration requirements of this section on any bank that effects transactions in, or buys or sells, a product under this subsection unless the Commission determines in the regulations described in subparagraph (A) that—</text> <clause id="HBB5CD6CB49F2A7422201408D03CBB00"><enum>(i)</enum><text>the subject product is a new product;</text></clause> <clause id="HD56668534C39A0CF9655419358EB39A"><enum>(ii)</enum><text>the subject product is a security; and</text></clause> <clause id="H9246895843C59AE01631809DADF28E5"><enum>(iii)</enum><text>imposing the registration requirements of this section is necessary or appropriate in the public interest and for the protection of investors.</text></clause></subparagraph></paragraph> <paragraph id="H5FCFC2AB4844B30A2533F2AAE8EBCD4"><enum>(2)</enum><header>Objection to Commission regulation</header> <subparagraph id="H915649A8443FAFD84966C9B0F9322A7"><enum>(A)</enum><header>Filing of petition for review</header><text>The Board, or any aggrieved party, may obtain review of any final regulation described in paragraph (1) in the United States Court of Appeals for the District of Columbia Circuit by filing in such court, not later than 60 days after the date of publication of the final regulation, a written petition requesting that the regulation be set aside.</text></subparagraph> <subparagraph id="H45D4AB5D42A7DDF4222615A8729B17B"><enum>(B)</enum><header>Transmittal of petition and record</header><text>A copy of a petition described in subparagraph (A) shall be transmitted as soon as possible by the Clerk of the Court to an officer or employee of the Commission designated for that purpose. Upon receipt of the petition, the Commission shall file with the court the regulation under review and any documents referred to therein, and any other relevant materials prescribed by the court.</text></subparagraph> <subparagraph id="HF6B332DE4833E410305DD9ABCDD9CE6"><enum>(C)</enum><header>Exclusive jurisdiction</header><text>On the date of the filing of the petition under subparagraph (A), the court has jurisdiction, which becomes exclusive on the filing of the materials set forth in subparagraph (B), to affirm and enforce or to set aside the regulation at issue.</text></subparagraph> <subparagraph id="H49949C194F50C517618599ADF49A212"><enum>(D)</enum><header>Standard of review</header> <clause id="H44A4C282453C050ACA335A84BD83B27"><enum>(i)</enum><header>In general</header><text>The court shall determine to affirm and enforce or set aside a regulation of the Commission under this subsection, based on the determination of the court as to whether the subject product—</text> <subclause id="H1FACA01748C95F5C0A638994E622F05"><enum>(I)</enum><text>is a new product, as defined in this subsection;</text></subclause> <subclause id="H9F66B1FD4F33B014B83202A5D27707E"><enum>(II)</enum><text>is a security; and</text></subclause> <subclause id="HF102F18C43F7CFFC5D2907AFD1B0E9D"><enum>(III)</enum><text>would be more appropriately regulated under the Federal securities laws or the Federal banking laws, giving equal deference to the views of the Commission and the Board.</text></subclause></clause> <clause id="HB97233754F95E781B8F15D85C9CDF88"><enum>(ii)</enum><header>Considerations</header><text>In making a determination under clause (i)(III), the court shall consider—</text> <subclause id="H47694E2E4DD560F6D68E148DBA9D0A8"><enum>(I)</enum><text>the nature of the subject new product;</text></subclause> <subclause id="HF0C212714847A21DB49EA0A1F97E231"><enum>(II)</enum><text>the history, purpose, extent, and appropriateness of the regulation of the new product under the Federal securities laws; and</text></subclause> <subclause id="H74789BF74E600D85306E9D925E00F6A"><enum>(III)</enum><text>the history, purpose, extent, and appropriateness of the regulation of the new product under the Federal banking laws.</text></subclause></clause></subparagraph> <subparagraph id="H7F544CBB4D86360B624D8AB7FAFA691"><enum>(E)</enum><header>Judicial stay</header><text>The filing of a petition by the Board or an aggrieved party pursuant to subparagraph (A) shall operate as a judicial stay, until the date on which the court makes a final determination under this paragraph, of—</text> <clause id="HA341CC0A4C0C5910DFDF64899BFA9D5"><enum>(i)</enum><text>any Commission requirement that a bank register as a broker or dealer under this section, because the bank engages in any transaction in, or buys or sells, the new product that is the subject of the petition; and</text></clause> <clause id="H7A8D614746C9BF2C286AD5BB00A6BBF"><enum>(ii)</enum><text>any Commission action against a bank for a failure to comply with a requirement described in clause (i).</text></clause></subparagraph></paragraph> <paragraph id="H4FFB1A4C44A31B2D493502A2A622C9E"><enum>(3)</enum><header>Definitions</header><text>For purposes of this subsection—</text> <subparagraph id="H9D4EB64C4072EF3D3B7C35B71BFBDD7"><enum>(A)</enum><text>the term <term>Board</term> means the Board of Governors of the Federal Reserve System; and</text></subparagraph> <subparagraph id="H6FD480204DB6663B61537C9FF04E00E"><enum>(B)</enum><text>the term <term>new product</term> means a product or instrument offered or provided by a bank that—</text> <clause id="HA317B51F4FF211CC33AC6F8CC05DCB4"><enum>(i)</enum><text>was not subject to regulation by the Commission as a security under this Act before the date of enactment of this subsection; and</text></clause> <clause id="HEC7C974A473128007CBF7A82C4F1F28"><enum>(ii)</enum><text>is not a traditional banking product, as defined in paragraphs (1) through (6) of section 206(a) of the &short-title1;.</text></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HD11A611D4C1CD950BF2C2A9A50CF88D"><enum>(c)</enum><header>Classification limited</header><text>Classification of a particular product or instrument as a traditional banking product pursuant to this section or the amendments made by this section shall not be construed as finding or implying that such product or instrument is or is not a security for any purpose under the securities laws, or is or is not an account, agreement, contract, or transaction for any purpose under the <act-name parsable-cite="COMEX">Commodity Exchange Act</act-name>.</text></subsection> <subsection id="H7096AEA74FD54D3866E5B48B04AE03F"><enum>(d)</enum><header>No limitation on other authority to challenge</header><text>Nothing in this section or the amendments made by this section shall affect the right or authority of the Board of Governors of the Federal Reserve System, any appropriate Federal banking agency, or any interested party under any other provision of law to object to or seek judicial review as to whether a product or instrument is or is not appropriately classified as a traditional banking product under paragraphs (1) through (6) of section 206(a).</text></subsection> <subsection id="HF4AFF5B446389DBDB01E599F7BA7D00"><enum>(e)</enum><header>Incorporated definitions</header><text>For purposes of this section—</text> <paragraph id="HE5109A3C425D43001D5D48959992DA9"><enum>(1)</enum><text>the term <term>appropriate Federal banking agency</term> has the same meaning as in <external-xref legal-doc="act" parsable-cite="FDIA/3">section 3</external-xref> of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>;</text></paragraph> <paragraph id="H3E25A89847AA3B9FC5677A99B8BEE3B"><enum>(2)</enum><text>the term <term>bank</term> has the same meaning as in section 3(a)(6) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>;</text></paragraph> <paragraph id="HDC14A031468C655133E14683D8E94A7"><enum>(3)</enum><text>the term <term>Board</term> means the Board of Governors of the Federal Reserve System;</text></paragraph> <paragraph id="H6E9419C84F80D4A7B8F869AD6400AFD"><enum>(4)</enum><text>the term <term>government securities</term> has the same meaning as in section 3(a)(42) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>, and, for purposes of this subsection, commercial paper, bankers acceptances, and commercial bills shall be treated in the same manner as government securities; and</text></paragraph> <paragraph id="HCE83772F4A2807D093AFDD9CB04FF25"><enum>(5)</enum><text>the term <term>qualified investor</term> has the same meaning as in section 3(a)(55) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>, as amended by this Act.</text></paragraph></subsection></section> <section id="HDAAEF20A4777CDFA0C8055AB15BCA16"><enum>207.</enum><header>Derivative instrument and qualified investor defined</header><text display-inline="no-display-inline">Section 3(a) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)">15 U.S.C. 78c(a)</external-xref>) is amended by adding at the end the following new paragraphs:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="HEEA82DA842F94C7967D4B097C778FD6"> <paragraph id="H2328E9794861867C512EBE8099CE82F"><enum>(54)</enum><header>Derivative instrument</header> <subparagraph id="H6AC77B84491CF650D9525181EBCAD36"><enum>(A)</enum><header>Definition</header><text>The term <term>derivative instrument</term> means any individually negotiated contract, agreement, warrant, note, or option that is based, in whole or in part, on the value of, any interest in, or any quantitative measure or the occurrence of any event relating to, one or more commodities, securities, currencies, interest or other rates, indices, or other assets, but does not include a traditional banking product, as defined in section 206(a) of the &short-title1;.</text></subparagraph> <subparagraph id="HC666C1C64E90A85C43C963ABFC0A388"><enum>(B)</enum><header>Classification limited</header><text>Classification of a particular contract as a derivative instrument pursuant to this paragraph shall not be construed as finding or implying that such instrument is or is not a security for any purpose under the securities laws, or is or is not an account, agreement, contract, or transaction for any purpose under the <act-name parsable-cite="COMEX">Commodity Exchange Act</act-name>.</text></subparagraph></paragraph> <paragraph id="HCCC8A7194C02C60A4D1A1492C43A925"><enum>(55)</enum><header>Qualified investor</header> <subparagraph id="H06C5084A4994DDE93120F5A2B27B4D1"><enum>(A)</enum><header>Definition</header><text>For purposes of this title, the term <term>qualified investor</term> means—</text> <clause id="H7F9BAC23478D28732AAAE78CCC4873E"><enum>(i)</enum><text>any investment company registered with the Commission under section 8 of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>;</text></clause> <clause id="HAA7872B3479DA35F4C435F8785EF68C"><enum>(ii)</enum><text>any issuer eligible for an exclusion from the definition of investment company pursuant to section 3(c)(7) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>;</text></clause> <clause id="HB3B52C884653328925EACE9521D554D"><enum>(iii)</enum><text>any bank (as defined in paragraph (6) of this subsection), savings association (as defined in section 3(b) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>), broker, dealer, insurance company (as defined in section 2(a)(13) of the <act-name parsable-cite="SA33">Securities Act of 1933</act-name>), or business development company (as defined in section 2(a)(48) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>);</text></clause> <clause id="H313A7EE14321948F7F7054AAFA39EBD"><enum>(iv)</enum><text>any small business investment company licensed by the United States Small Business Administration under section 301 (c) or (d) of the <act-name parsable-cite="SBIA">Small Business Investment Act of 1958</act-name>;</text></clause> <clause id="HA2AB627D46FBEE371163EDA4F9B5CD5"><enum>(v)</enum><text>any State sponsored employee benefit plan, or any other employee benefit plan, within the meaning of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name>, other than an individual retirement account, if the investment decisions are made by a plan fiduciary, as defined in section 3(21) of that Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser;</text></clause> <clause id="H4D49ECA049DE42460939CE9CC31F5FE"><enum>(vi)</enum><text>any trust whose purchases of securities are directed by a person described in clauses (i) through (v) of this subparagraph;</text></clause> <clause id="HE1C81A864EC729182751238B4CFBB1F"><enum>(vii)</enum><text>any market intermediary exempt under section 3(c)(2) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>;</text></clause> <clause id="HA17F32724ACBC58E848FF3887EEBFFC"><enum>(viii)</enum><text>any associated person of a broker or dealer other than a natural person;</text></clause> <clause id="H630ADAC047FEDCBEC81795A2DB7572A"><enum>(ix)</enum><text>any foreign bank (as defined in section 1(b)(7) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>);</text></clause> <clause id="H8A665C4544A554D2399A1B82CC9C874"><enum>(x)</enum><text>the government of any foreign country;</text></clause> <clause id="HDB2004E240538AA4EE93E098EB005EE"><enum>(xi)</enum><text>any corporation, company, or partnership that owns and invests on a discretionary basis, not less than $10,000,000 in investments;</text></clause> <clause id="HED2A8A6344EC6BCFAB356690DAA00FB"><enum>(xii)</enum><text>any natural person who owns and invests on a discretionary basis, not less than $10,000,000 in investments;</text></clause> <clause id="HE503B8814BB95A58E123F2A0E82CE8F"><enum>(xiii)</enum><text>any government or political subdivision, agency, or instrumentality of a government who owns and invests on a discretionary basis not less than $50,000,000 in investments; or</text></clause> <clause id="H70F0B8E34761EE0D372E15A8BB99F32"><enum>(xiv)</enum><text>any multinational or supranational entity or any agency or instrumentality thereof.</text></clause></subparagraph> <subparagraph id="H83FD134B4F741BAAA584BAACB6EDC49"><enum>(B)</enum><header>Additional authority</header><text>The Commission may, by rule or order, define a <quote>qualified investor</quote> as any other person, taking into consideration such factors as the financial sophistication of the person, net worth, and knowledge and experience in financial matters.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H05D7C36C44413DBD2C6F27B239C517A"><enum>208.</enum><header>Government securities defined</header><text display-inline="no-display-inline">Section 3(a)(42) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(42)">15 U.S.C. 78c(a)(42)</external-xref>) is amended—</text> <paragraph id="H044232FE4ABFA5E9920780B830282EF"><enum>(1)</enum><text>by striking <quote>or</quote> at the end of subparagraph (C);</text></paragraph> <paragraph id="H30937BF4454B3913C61BFC96BA3C7FE"><enum>(2)</enum><text>by striking the period at the end of subparagraph (D) and inserting <quote>; or</quote>; and</text></paragraph> <paragraph id="HF987CC3C42E9C855727290BAF4B8AE2"><enum>(3)</enum><text>by adding at the end the following new subparagraph:</text> <quoted-block id="H7903BAFB4FF41E95E0FD71AEC9E0025"> <subparagraph id="H4697C2C74A0078CF125B63A4BC25FD6"><enum>(E)</enum><text>for purposes of section 15C as applied to a bank, a qualified Canadian government obligation as defined in section 5136 of the Revised Statutes.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="H47DDF4034ACB45FDCEF47998DFDED82"><enum>209.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect at the end of the 270-day period beginning on the date of the enactment of this Act.</text></section> <section id="H6BF0CC6949C2C18AC7B834B1291DC7F"><enum>210.</enum><header>Rule of construction</header><text display-inline="no-display-inline">Nothing in this Act shall supersede, affect, or otherwise limit the scope and applicability of the <act-name parsable-cite="COMEX">Commodity Exchange Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/7/1">7 U.S.C. 1</external-xref> et seq.).</text></section></subtitle> <subtitle id="HEE6312C74CA35226FF8A16AC6E5211D"><enum>B</enum><header>Bank Investment Company Activities</header> <section id="H4E83DFAD4040FCCB31303A97D71F34B"><enum>211.</enum><header>Custody of investment company assets by affiliated bank</header> <subsection id="H1E9BE294421E4A4035A1619AF6100A9"><enum>(a)</enum><header>Management companies</header><text>Section 17(f) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–17(f)">15 U.S.C. 80a–17(f)</external-xref>) is amended—</text> <paragraph id="H517E79E04C4572360852529D56E61AB"><enum>(1)</enum><text>by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively;</text></paragraph> <paragraph id="H7EE5BBE04BA7B5FAB39B63B5E605538"><enum>(2)</enum><text>by striking <quote>(f) Every registered</quote> and inserting the following:</text> <quoted-block id="HBA8AEBFF4D130261DE1847BDCFF6E81"> <subsection id="H406618DB4A8F9C8D7B660DAE755010E"><enum>(f)</enum><header>Custody of securities</header> <paragraph id="H28DD4B8E49210540AFAE3DA0DF95A7C"><enum>(1)</enum><text>Every registered</text></paragraph></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="HCE5E997B44ACE5906B8580BDEC1986A"><enum>(3)</enum><text>by redesignating the second, third, fourth, and fifth sentences of such subsection as paragraphs (2) through (5), respectively, and indenting the left margin of such paragraphs appropriately; and</text></paragraph> <paragraph id="H2B177640441FEDD1050DCF8D44FCCEA"><enum>(4)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block id="HA47AFC35499521A936722AB89DEAD00"> <paragraph id="HCC61AF3B4CD384AAC5703B8D811C02E"><enum>(6)</enum><header>Services as trustee or custodian</header><text>The Commission may adopt rules and regulations, and issue orders, consistent with the protection of investors, prescribing the conditions under which a bank, or an affiliated person of a bank, either of which is an affiliated person, promoter, organizer, or sponsor of, or principal underwriter for, a registered management company may serve as custodian of that registered management company.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H5BE25A554C274E1C519CB48108DA603"><enum>(b)</enum><header>Unit investment trusts</header><text><external-xref legal-doc="act" parsable-cite="ICA40/26">Section 26</external-xref> of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–26">15 U.S.C. 80a–26</external-xref>) is amended—</text> <paragraph id="HF190849248F3D8E25CD1A682EDC9F4D"><enum>(1)</enum><text>by redesignating subsections (b) through (e) as subsections (c) through (f), respectively; and</text></paragraph> <paragraph id="H1E790C784242EA1D81FDD88B00DDE7F"><enum>(2)</enum><text>by inserting after subsection (a) the following new subsection:</text> <quoted-block id="HAF32081648E9A92764D9CD879B93BDE"> <subsection id="H80BC76B44ADBF913E644928392ADF00"><enum>(b)</enum><text>The Commission may adopt rules and regulations, and issue orders, consistent with the protection of investors, prescribing the conditions under which a bank, or an affiliated person of a bank, either of which is an affiliated person of a principal underwriter for, or depositor of, a registered unit investment trust, may serve as trustee or custodian under subsection (a)(1).</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HDE963BF64B1C893B2ACCA6A4FFBE213"><enum>(c)</enum><header>Fiduciary duty of custodian</header><text>Section 36(a) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–35(a)">15 U.S.C. 80a–35(a)</external-xref>) is amended—</text> <paragraph id="HE77D8E8F49CAEAEF6E7668B45577BCB"><enum>(1)</enum><text>in paragraph (1), by striking <quote>or</quote> at the end;</text></paragraph> <paragraph id="H7C6B5D724A9DCB8C298695AC37F84DB"><enum>(2)</enum><text>in paragraph (2), by striking the period at the end and inserting <quote>; or</quote>; and</text></paragraph> <paragraph id="H2DFA1BE44E5D3A8CFFDC308DCD0006C"><enum>(3)</enum><text>by inserting after paragraph (2) the following:</text> <quoted-block id="H3728AEA348F566C4CA27FDAD2516A24"> <paragraph id="H8131B4194799F453391193ADC940CF1"><enum>(3)</enum><text>as custodian.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section> <section id="H48370C4C415CB893AD685E9814BDBEC"><enum>212.</enum><header>Lending to an affiliated investment company</header><text display-inline="no-display-inline">Section 17(a) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–17(a)">15 U.S.C. 80a–17(a)</external-xref>) is amended—</text> <paragraph id="H7DEA58E74909A2EDB37E838A75E7A3B"><enum>(1)</enum><text>by striking <quote>or</quote> at the end of paragraph (2);</text></paragraph> <paragraph id="HEF439F4348BD875E21A332ADADFD7E0"><enum>(2)</enum><text>by striking the period at the end of paragraph (3) and inserting <quote>; or</quote>; and</text></paragraph> <paragraph id="HDD6E9540461138992B9F4897FDB5F08"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block id="H90BE96214F424B358D8E01BE17B56D3"> <paragraph id="HFEA243D349FAF751986F4E82D9ECC70"><enum>(4)</enum><text>to loan money or other property to such registered company, or to any company controlled by such registered company, in contravention of such rules, regulations, or orders as the Commission may prescribe or issue consistent with the protection of investors.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section> <section id="HA567D7FA4D783CE2629D2683B2CB5B9"><enum>213.</enum><header>Independent directors</header> <subsection id="H5C944A2049375BBC5A9D6B967DB26EF"><enum>(a)</enum><header>In general</header><text>Section 2(a)(19)(A) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–2(a)(19)(A)">15 U.S.C. 80a–2(a)(19)(A)</external-xref>) is amended—</text> <paragraph id="HDBA727574BFF63C1A4CAC4A52CAA56E"><enum>(1)</enum><text>by striking clause (v) and inserting the following new clause:</text> <quoted-block id="H4D81C81947385A667B997AB7E410820"> <clause id="H37B6040B4106A11972259EA3BEB2AD5"><enum>(v)</enum><text>any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has executed any portfolio transactions for, engaged in any principal transactions with, or distributed shares for—</text> <subclause id="H6E9773CC469B0A3B30EB0AB9E4D4F93"><enum>(I)</enum><text>the investment company;</text></subclause> <subclause id="HDA43D0B14CEC3DD41515DD95B1B7D32"><enum>(II)</enum><text>any other investment company having the same investment adviser as such investment company or holding itself out to investors as a related company for purposes of investment or investor services; or</text></subclause> <subclause id="H3575A5794AED7989DB8371BF03C7E00"><enum>(III)</enum><text>any account over which the investment company’s investment adviser has brokerage placement discretion,</text></subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="H9EC384C24C782758B7E971A8DE2BA80"><enum>(2)</enum><text>by redesignating clause (vi) as clause (vii); and</text></paragraph> <paragraph id="H7298902C465E5D6B86AD439ED06CD6F"><enum>(3)</enum><text>by inserting after clause (v) the following new clause:</text> <quoted-block id="HCDA608144B48F4898B9BF2928D75C39"> <clause id="H7E3E763349AD435C3B1997886EB6E1C"><enum>(vi)</enum><text>any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has loaned money or other property to—</text> <subclause id="HA00B68294F549F4B23336EA772CD9D9"><enum>(I)</enum><text>the investment company;</text></subclause> <subclause id="H843D4E4E4771A2E340508E99288167E"><enum>(II)</enum><text>any other investment company having the same investment adviser as such investment company or holding itself out to investors as a related company for purposes of investment or investor services; or</text></subclause> <subclause id="HC1A2D0FE4AF779CD7BC8EBAF9F7BC00"><enum>(III)</enum><text>any account for which the investment company’s investment adviser has borrowing authority,</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H13D4B808422985A0E9A525B981CACE8"><enum>(b)</enum><header>Conforming amendment</header><text>Section 2(a)(19)(B) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–2(a)(19)(B)">15 U.S.C. 80a–2(a)(19)(B)</external-xref>) is amended—</text> <paragraph id="H7C6C31F1416E6CD9CBA67893BED347B"><enum>(1)</enum><text>by striking clause (v) and inserting the following new clause:</text> <quoted-block id="HAEAC02EC41BCE23BFBB290BEB3ACB66"> <clause id="HE6E34F4A44FDFBAD557A1FA2A618DCF"><enum>(v)</enum><text>any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has executed any portfolio transactions for, engaged in any principal transactions with, or distributed shares for—</text> <subclause id="H6735356A46B3B907B0D6F688D55E19B"><enum>(I)</enum><text>any investment company for which the investment adviser or principal underwriter serves as such;</text></subclause> <subclause id="HF2D63D5446B64087161430B9D3F09FE"><enum>(II)</enum><text>any investment company holding itself out to investors, for purposes of investment or investor services, as a company related to any investment company for which the investment adviser or principal underwriter serves as such; or</text></subclause> <subclause id="H65BB3FE14EBDEE279E8C6F974FBA79C"><enum>(III)</enum><text>any account over which the investment adviser has brokerage placement discretion,</text></subclause></clause><after-quoted-block>;</after-quoted-block></quoted-block></paragraph> <paragraph id="H98A41AA147EA63A355276E9048E844F"><enum>(2)</enum><text>by redesignating clause (vi) as clause (vii); and</text></paragraph> <paragraph id="H56C1A35445161AD0EBC9D58FC1E00AE"><enum>(3)</enum><text>by inserting after clause (v) the following new clause:</text> <quoted-block id="HE53B071D40BBCBF49047EE8359408DD"> <clause id="H00DBDF4742C634C40B2D0C83259E7EF"><enum>(vi)</enum><text>any person or any affiliated person of a person (other than a registered investment company) that, at any time during the 6-month period preceding the date of the determination of whether that person or affiliated person is an interested person, has loaned money or other property to—</text> <subclause id="HA68247FF4F39A6124BEEF992D1D707B"><enum>(I)</enum><text>any investment company for which the investment adviser or principal underwriter serves as such;</text></subclause> <subclause id="H880FA10E449ACDA5FBDE70987EA5194"><enum>(II)</enum><text>any investment company holding itself out to investors, for purposes of investment or investor services, as a company related to any investment company for which the investment adviser or principal underwriter serves as such; or</text></subclause> <subclause id="H1AE69F544FDAD6460F511BA4F2FD5E8"><enum>(III)</enum><text>any account for which the investment adviser has borrowing authority,</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HCC486D0640BCEB9F2CCCFF8FCCB8F9E"><enum>(c)</enum><header>Affiliation of directors</header><text>Section 10(c) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–10(c)">15 U.S.C. 80a–10(c)</external-xref>) is amended by striking <quote>bank, except</quote> and inserting <quote>bank (together with its affiliates and subsidiaries) or any one bank holding company (together with its affiliates and subsidiaries) (as such terms are defined in <external-xref legal-doc="act" parsable-cite="BHC65/2">section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>), except</quote>.</text></subsection> <subsection id="HC1563796483A4034D690AD9AD5D385A"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall take effect at the end of the 1-year period beginning on the date of enactment of this subtitle.</text></subsection></section> <section id="HCE7EED22499A470A8774E7854ECEAF5"><enum>214.</enum><header>Additional SEC disclosure authority</header><text display-inline="no-display-inline">Section 35(a) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–34(a)">15 U.S.C. 80a–34(a)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Investment Company Act of 1940" id="H38581BC7470753537FC146BDEDBC49C"> <subsection id="HBC1592C94A2FCA86D23AA793F5B73E5"><enum>(a)</enum><header>Misrepresentation of guarantees</header> <paragraph id="H7C437CE749C2DAD5D0DB1BADA0CC18C"><enum>(1)</enum><header>In general</header><text>It shall be unlawful for any person, issuing or selling any security of which a registered investment company is the issuer, to represent or imply in any manner whatsoever that such security or company—</text> <subparagraph id="HAB32CEC447DFCED82D6660B3ABD762E"><enum>(A)</enum><text>has been guaranteed, sponsored, recommended, or approved by the United States, or any agency, instrumentality or officer of the United States;</text></subparagraph> <subparagraph id="H960155514D75559069450FAF007EDB7"><enum>(B)</enum><text>has been insured by the Federal Deposit Insurance Corporation; or</text></subparagraph> <subparagraph id="HD16FB586430AAD7F79594F8D911B2BE"><enum>(C)</enum><text>is guaranteed by or is otherwise an obligation of any bank or insured depository institution.</text></subparagraph></paragraph> <paragraph id="H676C713E42D97374B621F1BBF4CF39D"><enum>(2)</enum><header>Disclosures</header><text>Any person issuing or selling the securities of a registered investment company that is advised by, or sold through, a bank shall prominently disclose that an investment in the company is not insured by the Federal Deposit Insurance Corporation or any other government agency. The Commission may adopt rules and regulations, and issue orders, consistent with the protection of investors, prescribing the manner in which the disclosure under this paragraph shall be provided.</text></paragraph> <paragraph id="H6F2F660345DD643A8A8295B0E7ED8DA"><enum>(3)</enum><header>Definitions</header><text>The terms <term>insured depository institution</term> and <term>appropriate Federal banking agency</term> have the same meanings as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HB6462151468F56B7455A5D9B1DC0A4A"><enum>215.</enum><header>Definition of broker under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name></header><text display-inline="no-display-inline">Section 2(a)(6) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–2(a)(6)">15 U.S.C. 80a–2(a)(6)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Investment Company Act of 1940" id="H84FC2FA8440B39FFEBBB97A400B7754"> <paragraph id="HCEF7423F4D14546D4513139E2E00C8D"><enum>(6)</enum><text>The term <term>broker</term> has the same meaning as in section 3 of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>, except that such term does not include any person solely by reason of the fact that such person is an underwriter for one or more investment companies.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H39FAE64849E83B86C44A219CDC2070C"><enum>216.</enum><header>Definition of dealer under the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name></header><text display-inline="no-display-inline">Section 2(a)(11) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–2(a)(11)">15 U.S.C. 80a–2(a)(11)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Investment Company Act of 1940" id="H346171F04D39F9A71D5796B1AB44D3C"> <paragraph id="HE0CF401649BC6EFDE1D7F19BE31148B"><enum>(11)</enum><text>The term <term>dealer</term> has the same meaning as in section 3 of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>, but does not include an insurance company or investment company.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H895E7CC2465F6D468D9EE2A244F1D00"><enum>217.</enum><header>Removal of the exclusion from the definition of investment adviser for banks that advise investment companies</header> <subsection id="H1ED25A4249685B794AB6609D82F0049"><enum>(a)</enum><header>Investment adviser</header><text>Section 202(a)(11) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b–2(a)(11)">15 U.S.C. 80b–2(a)(11)</external-xref>) is amended in subparagraph (A), by striking <quote>investment company</quote> and inserting <quote>investment company, except that the term <term>investment adviser</term> includes any bank or bank holding company to the extent that such bank or bank holding company serves or acts as an investment adviser to a registered investment company, but if, in the case of a bank, such services or actions are performed through a separately identifiable department or division, the department or division, and not the bank itself, shall be deemed to be the investment adviser</quote>.</text></subsection> <subsection id="HA46D4985456A8BCD0088328C6542ADA"><enum>(b)</enum><header>Separately identifiable department or division</header><text>Section 202(a) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b–2(a)">15 U.S.C. 80b–2(a)</external-xref>) is amended by adding at the end the following:</text> <quoted-block act-name="Investment Advisers Act of 1940" id="HA8B8652C4DB4DF677057449EDCFBD7C"> <paragraph id="H8D5BDA434212BB5A0B2FAAA9787FA3B"><enum>(26)</enum><text>The term <term>separately identifiable department or division</term> of a bank means a unit—</text> <subparagraph id="H1B91DE854CD6A5B9791931B7D9349CC"><enum>(A)</enum><text>that is under the direct supervision of an officer or officers designated by the board of directors of the bank as responsible for the day-to-day conduct of the bank’s investment adviser activities for one or more investment companies, including the supervision of all bank employees engaged in the performance of such activities; and</text></subparagraph> <subparagraph id="H5D5EFA8C45B6C5ED8836DE8FB81E5FB"><enum>(B)</enum><text>for which all of the records relating to its investment adviser activities are separately maintained in or extractable from such unit’s own facilities or the facilities of the bank, and such records are so maintained or otherwise accessible as to permit independent examination and enforcement by the Commission of this Act or the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> and rules and regulations promulgated under this Act or the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H31A257BA4F0C8F327A838AA6936C42D"><enum>218.</enum><header>Definition of broker under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name></header><text display-inline="no-display-inline">Section 202(a)(3) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b–2(a)(3)">15 U.S.C. 80b–2(a)(3)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Investment Advisers Act of 1940" id="H80F34C5A43BB68FE2D22F294C45A8FA"> <paragraph id="H1B53AF64473077C81BF7408B10409FA"><enum>(3)</enum><text>The term <term>broker</term> has the same meaning as in section 3 of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H663C2C8C445103E147DBAF8100B8DAA"><enum>219.</enum><header>Definition of dealer under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name></header><text display-inline="no-display-inline">Section 202(a)(7) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b–2(a)(7)">15 U.S.C. 80b–2(a)(7)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Investment Advisers Act of 1940" id="HAA60FE144730158E8729EAAE3F5FAA3"> <paragraph id="HD8C727C34063074EFFDC57A5F071A90"><enum>(7)</enum><text>The term <term>dealer</term> has the same meaning as in section 3 of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>, but does not include an insurance company or investment company.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HCFE878A44AFCA2903969968D829EE2D"><enum>220.</enum><header>Interagency consultation</header><text display-inline="no-display-inline">The <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b–1">15 U.S.C. 80b–1</external-xref> et seq.) is amended by inserting after section 210 the following new section:</text> <quoted-block act-name="Investment Advisers Act of 1940" id="HDDA881864E234A61467D3488FC42FEA"> <section id="HC9B69D6A404781243D11D299B83536A"><enum>210A.</enum><header>Consultation</header> <subsection id="HA3CD34F7488C8913624F34BBF31FB87"><enum>(a)</enum><header>Examination results and other information</header> <paragraph id="HC7733ECD4BE14E644EE783831479F05"><enum>(1)</enum><text>The appropriate Federal banking agency shall provide the Commission upon request the results of any examination, reports, records, or other information to which such agency may have access with respect to the investment advisory activities—</text> <subparagraph id="H7E0C3EAD40F96B784311E69100CAC93"><enum>(A)</enum><text>of any—</text> <clause id="H4982F49C4CEB748EA31A6AB36EF389F"><enum>(i)</enum><text>bank holding company;</text></clause> <clause id="HBD497A0340CC7BA2B490148479037BF"><enum>(ii)</enum><text>bank; or</text></clause> <clause id="H904BD1014A21B12B57C65297D6FEC3B"><enum>(iii)</enum><text>separately identifiable department or division of a bank, that is registered under section 203 of this title; and</text></clause></subparagraph> <subparagraph id="H3536979F4C62DDB72BE8E68DCE3CE2D"><enum>(B)</enum><text>in the case of a bank holding company or bank that has a subsidiary or a separately identifiable department or division registered under that section, of such bank or bank holding company.</text></subparagraph></paragraph> <paragraph id="H8F9FF8624A34458CACC932AC03D1D8B"><enum>(2)</enum><text>The Commission shall provide to the appropriate Federal banking agency upon request the results of any examination, reports, records, or other information with respect to the investment advisory activities of any bank holding company, bank, or separately identifiable department or division of a bank, any of which is registered under section 203 of this title.</text></paragraph></subsection> <subsection id="H6F6DD9974B6C57C2D3F4EF9DE8C4F94"><enum>(b)</enum><header>Effect on other authority</header><text>Nothing in this section shall limit in any respect the authority of the appropriate Federal banking agency with respect to such bank holding company, bank, or department or division under any provision of law.</text></subsection> <subsection id="H0A46D1B145958D9A6276C69FB9AFEA0"><enum>(c)</enum><header>Definition</header><text>For purposes of this section, the term <term>appropriate Federal banking agency</term> has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H1E09D10C416309AA26F6C29D88CEEE9"><enum>221.</enum><header>Treatment of bank common trust funds</header> <subsection id="H49E91A1D48288B6AD216FC806CE6D9F"><enum>(a)</enum><header><act-name parsable-cite="SA33">Securities Act of 1933</act-name></header><text>Section 3(a)(2) of the <act-name parsable-cite="SA33">Securities Act of 1933</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/77c(a)(2)">15 U.S.C. 77c(a)(2)</external-xref>) is amended by striking <quote>or any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian</quote> and inserting <quote>or any interest or participation in any common trust fund or similar fund that is excluded from the definition of the term <term>investment company</term> under section 3(c)(3) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name></quote>.</text></subsection> <subsection id="HAA3428AC44AF61AB909E97A30033E15"><enum>(b)</enum><header><act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name></header><text>Section 3(a)(12)(A)(iii) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(12)(A)(iii)">15 U.S.C. 78c(a)(12)(A)(iii)</external-xref>) is amended to read as follows:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="H187788014949534555355995BB97EEF"> <clause indent="up1" id="H6FD286104C3CB51DD024FDA6591DB1C"><enum>(iii)</enum><text>any interest or participation in any common trust fund or similar fund that is excluded from the definition of the term <term>investment company</term> under section 3(c)(3) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name>;</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H496433844CFBDC88FAFDB8978EC6B82"><enum>(c)</enum><header><act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name></header><text>Section 3(c)(3) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–3(c)(3)">15 U.S.C. 80a–3(c)(3)</external-xref>) is amended by inserting before the period the following:</text> <quoted-block act-name="Investment Company Act of 1940" display-inline="yes-display-inline" id="HEF96C8E548787EBEF61247B046BA9B5"><text>, if—</text> <subparagraph id="HF2F8562540EE2C43D37CFCAEE4A00A4"><enum>(A)</enum><text>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;</text></subparagraph> <subparagraph id="HBF16CFED496EE8862277F6A23BCFC4F"><enum>(B)</enum><text>except in connection with the ordinary advertising of the bank’s fiduciary services, interests in such fund are not—</text> <clause id="H13C2EF154BD3871D4B0806B4CFAB5D6"><enum>(i)</enum><text>advertised; or</text></clause> <clause id="HB0BE6327478B6F85E150AFAB3529ED7"><enum>(ii)</enum><text>offered for sale to the general public; and</text></clause></subparagraph> <subparagraph id="HA4283D7A41BDF91517D87CA5DDC921B"><enum>(C)</enum><text>fees and expenses charged by such fund are not in contravention of fiduciary principles established under applicable Federal or State law</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H7D006C274E09908CCE519894FD5137C"><enum>222.</enum><header>Investment advisers prohibited from having controlling interest in registered investment company</header><text display-inline="no-display-inline">Section 15 of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–15">15 U.S.C. 80a–15</external-xref>) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Investment Company Act of 1940" id="H0A573F88441B76F903098F8B00BB862"> <subsection id="H88EDFE82410BB97F0F1E9F82C5C8F00"><enum>(g)</enum><header>Controlling interest in investment company prohibited</header> <paragraph id="H08198F5D46FA87EBF4F80B92C683268"><enum>(1)</enum><header>In general</header><text>If an investment adviser to a registered investment company, or an affiliated person of that investment adviser, holds a controlling interest in that registered investment company in a trustee or fiduciary capacity, such person shall—</text> <subparagraph id="H42DE5B24424B8243F1A8B8A881F1237"><enum>(A)</enum><text>if it holds the shares in a trustee or fiduciary capacity with respect to any employee benefit plan subject to the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name>, transfer the power to vote the shares of the investment company through to another person acting in a fiduciary capacity with respect to the plan who is not an affiliated person of that investment adviser or any affiliated person thereof; or</text></subparagraph> <subparagraph id="HB0A86A8E4F70B56CF29026A391F3337"><enum>(B)</enum><text>if it holds the shares in a trustee or fiduciary capacity with respect to any person or entity other than an employee benefit plan subject to the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name>—</text> <clause id="H5559988B4C565284F353E3A4D5E8404"><enum>(i)</enum><text>transfer the power to vote the shares of the investment company through to—</text> <subclause id="HCAAE751D42FA13F18EA511B2B5672E3"><enum>(I)</enum><text>the beneficial owners of the shares;</text></subclause> <subclause id="H824E68294EDC6AD7ED47169E69AA1BD"><enum>(II)</enum><text>another person acting in a fiduciary capacity who is not an affiliated person of that investment adviser or any affiliated person thereof; or</text></subclause> <subclause id="HCE316F1844B6CA5BDBC43BB011C137B"><enum>(III)</enum><text>any person authorized to receive statements and information with respect to the trust who is not an affiliated person of that investment adviser or any affiliated person thereof;</text></subclause></clause> <clause id="HC0201ED642BD607A8E9A6ABBD267E38"><enum>(ii)</enum><text>vote the shares of the investment company held by it in the same proportion as shares held by all other shareholders of the investment company; or</text></clause> <clause id="H21CF26254498619746AFDE98C8D5139"><enum>(iii)</enum><text>vote the shares of the investment company as otherwise permitted under such rules, regulations, or orders as the Commission may prescribe or issue consistent with the protection of investors.</text></clause></subparagraph></paragraph> <paragraph id="HBD9AE8DA4298BC37BE2BB7AD1B6134A"><enum>(2)</enum><header>Exemption</header><text>Paragraph (1) shall not apply to any investment adviser to a registered investment company, or any affiliated person of that investment adviser, that holds shares of the investment company in a trustee or fiduciary capacity if that registered investment company consists solely of assets held in such capacities.</text></paragraph> <paragraph id="H416AC03D474E7CEF3AAC6AA5B6D5473"><enum>(3)</enum><header>Safe harbor</header><text>No investment adviser to a registered investment company or any affiliated person of such investment adviser shall be deemed to have acted unlawfully or to have breached a fiduciary duty under State or Federal law solely by reason of acting in accordance with clause (i), (ii), or (iii) of paragraph (1)(B).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H6ED989164F8C628205A499B8043E58E"><enum>223.</enum><header>Conforming change in definition</header><text display-inline="no-display-inline">Section 2(a)(5) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a–2(a)(5)">15 U.S.C. 80a–2(a)(5)</external-xref>) is amended by striking <quote>(A) a banking institution organized under the laws of the United States</quote> and inserting <quote>(A) a depository institution (as defined in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>) or a branch or agency of a foreign bank (as such terms are defined in section 1(b) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>)</quote>.</text></section> <section id="H7C012885409A1B7509F777BAE4E678E"><enum>224.</enum><header>Conforming amendment</header><text display-inline="no-display-inline">Section 202 of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b–2">15 U.S.C. 80b–2</external-xref>) is amended by adding at the end the following new subsection:</text> <quoted-block act-name="Investment Advisers Act of 1940" id="H0FECBCF34F665BB605463086FF18B25"> <subsection id="H7F25EE6B41A06A33CCADED89D83DFEE"><enum>(c)</enum><header>Consideration of promotion of efficiency, competition, and capital formation</header><text>Whenever pursuant to this title the Commission is engaged in rulemaking and is required to consider or determine whether an action is necessary or appropriate in the public interest, the Commission shall also consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H33A449EC41651E14702497B7C5F249C"><enum>225.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect 90 days after the date of the enactment of this Act.</text></section></subtitle> <subtitle id="H8423B54B414C3022D3C23F879CA566B"><enum>C</enum><header>Securities and Exchange Commission supervision of investment bank holding companies</header> <section id="H018EC4254054A0E888A37495B4F00BB"><enum>231.</enum><header>Supervision of investment bank holding companies by the Securities and Exchange Commission</header> <subsection id="H901723DC41AF420F388F42B0E010D9E"><enum>(a)</enum><header>Amendment</header><text><external-xref legal-doc="act" parsable-cite="SEA34/17">Section 17</external-xref> of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78q">15 U.S.C. 78q</external-xref>) is amended—</text> <paragraph id="H0621E44744A818C0565511BC02B13F3"><enum>(1)</enum><text>by redesignating subsection (i) as subsection (l); and</text></paragraph> <paragraph id="H50CAFF7E4F1EA3D50A7F2DBF924FCC5"><enum>(2)</enum><text>by inserting after subsection (h) the following new subsections:</text> <quoted-block id="H9398A82143CBE16C73036F99AD8998E"> <clause indent="up3" id="H606E236248147074692285A4AB80A79"><enum>(i)</enum><header>Investment bank holding companies</header></clause> <paragraph id="HFD6893E64735C80841EEFC8AC8EC792"><enum>(1)</enum><header>Elective supervision of an investment bank holding company not having a bank or savings Association affiliate</header> <subparagraph id="H565C9A8C486E2060E249EB9660ADBF0"><enum>(A)</enum><header>In general</header><text>An investment bank holding company that is not—</text> <clause id="HFDB1FF194513EE01874C50ACC9F6DC1"><enum>(i)</enum><text>an affiliate of a wholesale financial institution, an insured bank (other than an institution described in subparagraph (D), (F), or (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>), or a savings association;</text></clause> <clause id="HC86772E54B9500CAC79B498CB009944"><enum>(ii)</enum><text>a foreign bank, foreign company, or company that is described in section 8(a) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>; or</text></clause> <clause id="HF221BEAF432844DDB0F0BE84F87ED47"><enum>(iii)</enum><text>a foreign bank that controls, directly or indirectly, a corporation chartered under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>,</text></clause><continuation-text continuation-text-level="subparagraph">may elect to become supervised by filing with the Commission a notice of intention to become supervised, pursuant to subparagraph (B) of this paragraph. Any investment bank holding company filing such a notice shall be supervised in accordance with this section and comply with the rules promulgated by the Commission applicable to supervised investment bank holding companies.</continuation-text></subparagraph> <subparagraph id="H27A7B2F4423DEC65083250805FBA15F"><enum>(B)</enum><header>Notification of status as a supervised investment bank holding company</header><text>An investment bank holding company that elects under subparagraph (A) to become supervised by the Commission shall file with the Commission a written notice of intention to become supervised by the Commission in such form and containing such information and documents concerning such investment bank holding company as the Commission, by rule, may prescribe as necessary or appropriate in furtherance of the purposes of this section. Unless the Commission finds that such supervision is not necessary or appropriate in furtherance of the purposes of this section, such supervision shall become effective 45 days after the date of receipt of such written notice by the Commission, or within such shorter time period as the Commission, by rule or order, may determine.</text></subparagraph></paragraph> <paragraph id="H7F5FD036427E8610468C719471F6EB3"><enum>(2)</enum><header>Election not to be supervised by the Commission as an investment bank holding company</header> <subparagraph id="HAA9D5ABA4742AD77F1E624B3D9ED64F"><enum>(A)</enum><header>Voluntary withdrawal</header><text>A supervised investment bank holding company that is supervised pursuant to paragraph (1) may, upon such terms and conditions as the Commission deems necessary or appropriate, elect not to be supervised by the Commission by filing a written notice of withdrawal from Commission supervision. Such notice shall not become effective until one year after receipt by the Commission, or such shorter or longer period as the Commission deems necessary or appropriate to ensure effective supervision of the material risks to the supervised investment bank holding company and to the affiliated broker or dealer, or to prevent evasion of the purposes of this section.</text></subparagraph> <subparagraph id="H698DA351452C3556A7800EB21447BDF"><enum>(B)</enum><header>Discontinuation of Commission supervision</header><text>If the Commission finds that any supervised investment bank holding company that is supervised pursuant to paragraph (1) is no longer in existence or has ceased to be an investment bank holding company, or if the Commission finds that continued supervision of such a supervised investment bank holding company is not consistent with the purposes of this section, the Commission may discontinue the supervision pursuant to a rule or order, if any, promulgated by the Commission under this section.</text></subparagraph></paragraph> <paragraph id="H1FA41AFE41C72D7E401A5FA1F3BAF96"><enum>(3)</enum><header>Supervision of investment bank holding companies</header> <subparagraph id="HBCF3CBB242FD92016487E38C65CAE41"><enum>(A)</enum><header>Recordkeeping and reporting</header> <clause id="H8DFEB5C54724D5C65A2E9580E7CD398"><enum>(i)</enum><header>In general</header><text>Every supervised investment bank holding company and each affiliate thereof shall make and keep for prescribed periods such records, furnish copies thereof, and make such reports, as the Commission may require by rule, in order to keep the Commission informed as to—</text> <subclause id="HAE4DA327496C145DB42911856078B0A"><enum>(I)</enum><text>the company’s or affiliate’s activities, financial condition, policies, systems for monitoring and controlling financial and operational risks, and transactions and relationships between any broker or dealer affiliate of the supervised investment bank holding company; and</text></subclause> <subclause id="H83F25A9944C2D576251F6E9EF5D4BC5"><enum>(II)</enum><text>the extent to which the company or affiliate has complied with the provisions of this Act and regulations prescribed and orders issued under this Act.</text></subclause></clause> <clause id="H1CF6A96F4B9B4ED4D647F199A2ECD7F"><enum>(ii)</enum><header>Form and contents</header><text>Such records and reports shall be prepared in such form and according to such specifications (including certification by an independent public accountant), as the Commission may require and shall be provided promptly at any time upon request by the Commission. Such records and reports may include—</text> <subclause id="H312D02014934CF918DB38B9FF849400"><enum>(I)</enum><text>a balance sheet and income statement;</text></subclause> <subclause id="H0226288E4CA66B0AAA2C8FB506D5D13"><enum>(II)</enum><text>an assessment of the consolidated capital of the supervised investment bank holding company;</text></subclause> <subclause id="H4C081B8F405D9674710B6B8182EC5CD"><enum>(III)</enum><text>an independent auditor’s report attesting to the supervised investment bank holding company’s compliance with its internal risk management and internal control objectives; and</text></subclause> <subclause id="H7D963170472C941985D60D97807BCBA"><enum>(IV)</enum><text>reports concerning the extent to which the company or affiliate has complied with the provisions of this title and any regulations prescribed and orders issued under this title.</text></subclause></clause></subparagraph> <subparagraph id="HD393AD414EB7120FBE46459BCC1716C"><enum>(B)</enum><header>Use of existing reports</header> <clause id="H66B7B8BA4CF7A074DC708AA5EAEFC49"><enum>(i)</enum><header>In general</header><text>The Commission shall, to the fullest extent possible, accept reports in fulfillment of the requirements under this paragraph that the supervised investment bank holding company or its affiliates have been required to provide to another appropriate regulatory agency or self-regulatory organization.</text></clause> <clause id="H7246C21944A38C50FFDD13A2B563D0E"><enum>(ii)</enum><header>Availability</header><text>A supervised investment bank holding company or an affiliate of such company shall provide to the Commission, at the request of the Commission, any report referred to in clause (i).</text></clause></subparagraph> <subparagraph id="H557C08A545A6721DA8AB14B5C472F00"><enum>(C)</enum><header>Examination authority</header> <clause id="H08DA7C474E5AD9B33CC001A772C588B"><enum>(i)</enum><header>Focus of examination authority</header><text>The Commission may make examinations of any supervised investment bank holding company and any affiliate of such company in order to—</text> <subclause id="HA78121894302A1052FCEFFA339FF9EE"><enum>(I)</enum><text>inform the Commission regarding—</text> <item id="H87096703480E3001C79F8A9B45C9C43"><enum>(aa)</enum><text>the nature of the operations and financial condition of the supervised investment bank holding company and its affiliates;</text></item> <item id="H047832FF4154493A5EAAE6A9E25595F"><enum>(bb)</enum><text>the financial and operational risks within the supervised investment bank holding company that may affect any broker or dealer controlled by such supervised investment bank holding company; and</text></item> <item id="HCAD9286F498818A32F73ED93196F2CB"><enum>(cc)</enum><text>the systems of the supervised investment bank holding company and its affiliates for monitoring and controlling those risks; and</text></item></subclause> <subclause id="H099FE115482930C4A052529878AC7A6"><enum>(II)</enum><text>monitor compliance with the provisions of this subsection, provisions governing transactions and relationships between any broker or dealer affiliated with the supervised investment bank holding company and any of the company’s other affiliates, and applicable provisions of subchapter II of chapter 53, title 31, United States Code (commonly referred to as the <quote><act-name parsable-cite="BSA">Bank Secrecy Act</act-name></quote>) and regulations thereunder.</text></subclause></clause> <clause id="HFE0B5294497D766877C965A3C87D496"><enum>(ii)</enum><header>Restricted focus of examinations</header><text>The Commission shall limit the focus and scope of any examination of a supervised investment bank holding company to—</text> <subclause id="H31C8F90F44291EFC8E6E7AAEB87E00F"><enum>(I)</enum><text>the company; and</text></subclause> <subclause id="HFF6EDCB446FF6806B923D788E18EAF6"><enum>(II)</enum><text>any affiliate of the company that, because of its size, condition, or activities, the nature or size of the transactions between such affiliate and any affiliated broker or dealer, or the centralization of functions within the holding company system, could, in the discretion of the Commission, have a materially adverse effect on the operational or financial condition of the broker or dealer.</text></subclause></clause> <clause id="H9E1975B342C10397EBDF7E95CC7C616"><enum>(iii)</enum><header>Deference to other examinations</header><text>For purposes of this subparagraph, the Commission shall, to the fullest extent possible, use the reports of examination of an institution described in subparagraph (D), (F), or (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name> made by the appropriate regulatory agency, or of a licensed insurance company made by the appropriate State insurance regulator.</text></clause></subparagraph></paragraph> <paragraph id="HDC65EEA6453D21DF5A7877BA03A95FA"><enum>(4)</enum><header>Holding company capital</header> <subparagraph id="H4FC13EC7486A5EA4B5A19986B15AAF1"><enum>(A)</enum><header>Authority</header><text>If the Commission finds that it is necessary to adequately supervise investment bank holding companies and their broker or dealer affiliates consistent with the purposes of this subsection, the Commission may adopt capital adequacy rules for supervised investment bank holding companies.</text></subparagraph> <subparagraph id="H90F1E6EC45983C85138463A507F903C"><enum>(B)</enum><header>Method of calculation</header><text>In developing rules under this paragraph:</text> <clause id="H837A75614D816D9BFE57A89775A3B0E"><enum>(i)</enum><header>Double leverage</header><text>The Commission shall consider the use by the supervised investment bank holding company of debt and other liabilities to fund capital investments in affiliates.</text></clause> <clause id="H6C5FAD27489B6FA234D825B6BC4EB3F"><enum>(ii)</enum><header>No unweighted capital ratio</header><text>The Commission shall not impose under this section a capital ratio that is not based on appropriate risk-weighting considerations.</text></clause> <clause id="H6BBD73654835D659161CA0B6DF7A738"><enum>(iii)</enum><header>No capital requirement on regulated entities</header><text>The Commission shall not, by rule, regulation, guideline, order or otherwise, impose any capital adequacy provision on a nonbanking affiliate (other than a broker or dealer) that is in compliance with applicable capital requirements of another Federal regulatory authority or State insurance authority.</text></clause> <clause id="HBDE7B049429709F25660AB8588EEBD1"><enum>(iv)</enum><header>Appropriate exclusions</header><text>The Commission shall take full account of the applicable capital requirements of another Federal regulatory authority or State insurance regulator.</text></clause></subparagraph> <subparagraph id="H28A1B85540F8E737D938F588B5700BC"><enum>(C)</enum><header>Internal risk management models</header><text>The Commission may incorporate internal risk management models into its capital adequacy rules for supervised investment bank holding companies.</text></subparagraph></paragraph> <paragraph id="H9355E5B842A15E764C334AADF5F17AA"><enum>(5)</enum><header>Functional regulation of banking and insurance activities of supervised investment bank holding companies</header><text>The Commission shall defer to—</text> <subparagraph id="H128214B6451DEA3B409D379F50E2E49"><enum>(A)</enum><text>the appropriate regulatory agency with regard to all interpretations of, and the enforcement of, applicable banking laws relating to the activities, conduct, ownership, and operations of banks, and institutions described in subparagraph (D), (F), and (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>; and</text></subparagraph> <subparagraph id="H28DADF404FB7F694A85CE2B52051CCC"><enum>(B)</enum><text>the appropriate State insurance regulators with regard to all interpretations of, and the enforcement of, applicable State insurance laws relating to the activities, conduct, and operations of insurance companies and insurance agents.</text></subparagraph></paragraph> <paragraph id="HEE8271D64BE00D2D30B7629763A73A0"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection and subsection (j)—</text> <subparagraph id="H307516204789E578B3DC0CA3C2EAD83"><enum>(A)</enum><text>the term <term>investment bank holding company</term> means—</text> <clause id="H08932BFA479EF23C1CE486A5AD6DFD3"><enum>(i)</enum><text>any person other than a natural person that owns or controls one or more brokers or dealers; and</text></clause> <clause id="H41A102304707916C3A6DC586DAE982D"><enum>(ii)</enum><text>the associated persons of the investment bank holding company;</text></clause></subparagraph> <subparagraph id="H0A6B23D74F37DA53A040B1ADE8E74B9"><enum>(B)</enum><text>the term <term>supervised investment bank holding company</term> means any investment bank holding company that is supervised by the Commission pursuant to this subsection;</text></subparagraph> <subparagraph id="H9A6B38794B60B8F8D0FDD3BF12C34ED"><enum>(C)</enum><text>the terms <term>affiliate</term>, <term>bank</term>, <term>bank holding company</term>, <term>company</term>, <term>control</term>, and <term>savings association</term> have the same meanings as in section 2 of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>;</text></subparagraph> <subparagraph id="H3BA1957D476063863DA3D8ABB77E65F"><enum>(D)</enum><text>the term <term>insured bank</term> has the same meaning as in section 3 of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>;</text></subparagraph> <subparagraph id="HBEDDD1974A432D48DCE544ADD6A4F4D"><enum>(E)</enum><text>the term <term>foreign bank</term> has the same meaning as in section 1(b)(7) of the <act-name parsable-cite="IBA78">International Banking Act of 1978</act-name>; and</text></subparagraph> <subparagraph id="H587FFE38425A8A33546F17BDBE00D5F"><enum>(F)</enum><text>the terms <term>person associated with an investment bank holding company</term> and <term>associated person of an investment bank holding company</term> mean any person directly or indirectly controlling, controlled by, or under common control with, an investment bank holding company.</text></subparagraph></paragraph> <subsection id="H3F0FB2B44F7017C4D7FECC8D6832BBC"><enum>(j)</enum><header>Commission backup authority</header> <paragraph id="H014B15B843EC7B784EBA4790F970DE6"><enum>(1)</enum><header>Authority</header><text>The Commission may make inspections of any wholesale financial holding company that—</text> <subparagraph id="H30A70853498F05202E9D62AAD4CC6FF"><enum>(A)</enum><text>controls a wholesale financial institution;</text></subparagraph> <subparagraph id="HD870E2DA4D3D75B1ECF1CCAEC611EB7"><enum>(B)</enum><text>is not a foreign bank; and</text></subparagraph> <subparagraph id="H47B570A24EFDB4756D9A07911BBD444"><enum>(C)</enum><text>does not control an insured bank (other than an institution permitted under subparagraph (D), (F), or (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>) or a savings association,</text></subparagraph><continuation-text continuation-text-level="paragraph">and any affiliate of such company, for the purpose of monitoring and enforcing compliance by the wholesale financial holding company with the Federal securities laws.</continuation-text></paragraph> <paragraph id="H18B410D2467289C716CD3CBC647DE15"><enum>(2)</enum><header>Limitation</header><text>The Commission shall limit the focus and scope of any inspection under paragraph (1) to those transactions, policies, procedures, or records that are reasonably necessary to monitor and enforce compliance by the wholesale financial holding company or any affiliate with the Federal securities laws.</text></paragraph> <paragraph id="HF5E6E88B43EE208E00625F8037D1E9B"><enum>(3)</enum><header>Deference to examinations</header><text>To the fullest extent possible, the Commission shall use, for the purposes of this subsection, the reports of examinations—</text> <subparagraph id="H20FD55C94980923A84AA33B5E88FACC"><enum>(A)</enum><text>made by the Board of Governors of the Federal Reserve System of any wholesale financial holding company that is supervised by the Board;</text></subparagraph> <subparagraph id="HF43A08644A618D55AAEDD399B733DB6"><enum>(B)</enum><text>made by or on behalf of any State regulatory agency responsible for the supervision of an insurance company of any licensed insurance company; and</text></subparagraph> <subparagraph id="H26C200B54764014BB21828BECA01592"><enum>(C)</enum><text>made by any Federal or State banking agency of any bank or institution described in subparagraph (D), (F), or (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subparagraph></paragraph> <paragraph id="H2C882BA04588734A84B42F8AACBFDCD"><enum>(4)</enum><header>Notice</header><text>To the fullest extent possible, the Commission shall notify the appropriate regulatory agency prior to conducting an inspection of a wholesale financial institution or institution described in subparagraph (D), (F), or (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></paragraph></subsection> <subsection id="H33D0917447149EFCDCAE309EA0DED86"><enum>(k)</enum><header>Authority to limit disclosure of information</header><text>Notwithstanding any other provision of law, the Commission shall not be compelled to disclose any information required to be reported under subsection (h) or (i) or any information supplied to the Commission by any domestic or foreign regulatory agency that relates to the financial or operational condition of any associated person of a broker or dealer, investment bank holding company, or any affiliate of an investment bank holding company. Nothing in this subsection shall authorize the Commission to withhold information from Congress, or prevent the Commission from complying with a request for information from any other Federal department or agency or any self-regulatory organization requesting the information for purposes within the scope of its jurisdiction, or complying with an order of a court of the United States in an action brought by the United States or the Commission. For purposes of section 552 of title 5, United States Code, this subsection shall be considered a statute described in subsection (b)(3)(B) of such section 552. In prescribing regulations to carry out the requirements of this subsection, the Commission shall designate information described in or obtained pursuant to subparagraphs (A), (B), and (C) of subsection (i)(5) as confidential information for purposes of section 24(b)(2) of this title.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HE6BF5C0B4B01F8E4A1F540AABBD1DC4"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="H4B6D84A94C92CFA13572809F4575AAF"><enum>(1)</enum><text>Section 3(a)(34) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(34)">15 U.S.C. 78c(a)(34)</external-xref>) is amended by adding at the end the following new subparagraphs:</text> <quoted-block act-name="Securities Exchange Act of 1934" id="HDEB5158943F7435C19E15C852400CAD"> <subparagraph id="HE542BDBB47185E87928D8F9DD11FC8D"><enum>(H)</enum><text>When used with respect to an institution described in subparagraph (D), (F), or (G) of section 2(c)(2), or held under section 4(f), of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>—</text> <clause id="H8CD502C64CE4E49F15998C86F086D5C"><enum>(i)</enum><text>the Comptroller of the Currency, in the case of a national bank or a bank in the District of Columbia examined by the Comptroller of the Currency;</text></clause> <clause id="H83E070184396B7D97E479F9FD8BBFE3"><enum>(ii)</enum><text>the Board of Governors of the Federal Reserve System, in the case of a State member bank of the Federal Reserve System or any corporation chartered under section 25A of the <act-name parsable-cite="FRA">Federal Reserve Act</act-name>;</text></clause> <clause id="H5BDDE6264DA4BF089894C689D1120CD"><enum>(iii)</enum><text>the Federal Deposit Insurance Corporation, in the case of any other bank the deposits of which are insured in accordance with the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>; or</text></clause> <clause id="H96B9B1E54A0C37117F9968B4F98C05F"><enum>(iv)</enum><text>the Commission in the case of all other such institutions.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H28BE07CF46B60F6A9DBD6DA520CFE2C"><enum>(2)</enum><text>Section 1112(e) of the <act-name parsable-cite="RFPA78">Right to Financial Privacy Act of 1978</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/3412(e)">12 U.S.C. 3412(e)</external-xref>) is amended—</text> <subparagraph id="H48C4CD3D41B9A74585DF6BAB5DEFAC9"><enum>(A)</enum><text>by striking <quote>this title</quote> and inserting <quote>law</quote>; and</text></subparagraph> <subparagraph id="H23AC2575417BAACCE38AADBCE3197A8"><enum>(B)</enum><text>by inserting <quote>, examination reports</quote> after <quote>financial records</quote>.</text></subparagraph></paragraph></subsection></section></subtitle> <subtitle id="H278C61B34AF437BCFB09608CEBAEBEA"><enum>D</enum><header>Studies</header> <section id="HD024FDFC4589FB7D969EF7AAE8C36EB"><enum>241.</enum><header>Study of methods to inform investors and consumers of uninsured products</header><text display-inline="no-display-inline">Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit a report to the Congress regarding the efficacy, costs, and benefits of requiring that any depository institution that accepts federally insured deposits and that, directly or through a contractual or other arrangement with a broker, dealer, or agent, buys from, sells to, or effects transactions for retail investors in securities or consumers of insurance to inform such investors and consumers through the use of a logo or seal that the security or insurance is not insured by the Federal Deposit Insurance Corporation.</text></section> <section id="HAF358C224E0D30C247EB17AA7CEDBB0"><enum>242.</enum><header>Study of limitation on fees associated with acquiring financial products</header><text display-inline="no-display-inline">Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States shall submit a report to the Congress regarding the efficacy and benefits of uniformly limiting any commissions, fees, markups, or other costs incurred by customers in the acquisition of financial products.</text></section></subtitle> <enum>III</enum><header>Insurance</header> <subtitle id="HBCCFCF8A434847EB2C99AAA012F87F8"><enum>A</enum><header>State regulation of insurance</header> <section id="H71D7B0FB4CDE752E803AF2A6C848D9F"><enum>301.</enum><header>State regulation of the business of insurance</header><text display-inline="no-display-inline">The Act entitled <quote>An Act to express the intent of the Congress with reference to the regulation of the business of insurance</quote> and approved March 9, 1945 (<external-xref legal-doc="usc" parsable-cite="usc/15/1011">15 U.S.C. 1011</external-xref> et seq.), commonly referred to as the <quote><act-name parsable-cite="MFA">McCarran-Ferguson Act</act-name></quote> remains the law of the United States.</text></section> <section id="HB3A416224BCCE145114D9AB3D9F2B79"><enum>302.</enum><header>Mandatory insurance licensing requirements</header><text display-inline="no-display-inline">No person or entity shall provide insurance in a State as principal or agent unless such person or entity is licensed as required by the appropriate insurance regulator of such State in accordance with the relevant State insurance law, subject to section 104.</text></section> <section id="H71C1D3904D0B6438BFF2519ACE17235"><enum>303.</enum><header>Functional regulation of insurance</header><text display-inline="no-display-inline">The insurance sales activity of any person or entity shall be functionally regulated by the States, subject to section 104.</text></section> <section id="H373877E6471F9880EE79F090E78229B"><enum>304.</enum><header>Insurance underwriting in national banks</header> <subsection id="HACFE124944A5A38742863996EB83029"><enum>(a)</enum><header>In general</header><text>Except as provided in section 305, a national bank and the subsidiaries of a national bank may not provide insurance in a State as principal except that this prohibition shall not apply to authorized products.</text></subsection> <subsection id="HD5D2B77548CBF642CB264493AE67000"><enum>(b)</enum><header>Authorized products</header><text>For the purposes of this section, a product is authorized if—</text> <paragraph id="H1E0E179E4197B44D5B1B0EAADD5BF71"><enum>(1)</enum><text>as of January 1, 1997, the Comptroller of the Currency had determined in writing that national banks may provide such product as principal, or national banks were in fact lawfully providing such product as principal;</text></paragraph> <paragraph id="H32996C1C4E3A901E183D2CBDA963B50"><enum>(2)</enum><text>no court of relevant jurisdiction had, by final judgment, overturned a determination of the Comptroller of the Currency that national banks may provide such product as principal; and</text></paragraph> <paragraph id="H51054BE04C334EE47A0A5E81DCC1B9E"><enum>(3)</enum><text>the product is not title insurance, or an annuity contract the income of which is subject to tax treatment under section 72 of the Internal Revenue Code of 1986.</text></paragraph></subsection> <subsection id="H978A989D4F08172A85FCADA8F73CA7A"><enum>(c)</enum><header>Definition</header><text>For purposes of this section, the term <term>insurance</term> means—</text> <paragraph id="H5FD89C954AA83E11085FBB967FE468C"><enum>(1)</enum><text>any product regulated as insurance as of January 1, 1997, in accordance with the relevant State insurance law, in the State in which the product is provided;</text></paragraph> <paragraph id="H5C42348047A5E9698A1C6399DFB4CDC"><enum>(2)</enum><text>any product first offered after January 1, 1997, which—</text> <subparagraph id="HB4EAAD8F4EABAF7DF040A4A85E07CCC"><enum>(A)</enum><text>a State insurance regulator determines shall be regulated as insurance in the State in which the product is provided because the product insures, guarantees, or indemnifies against liability, loss of life, loss of health, or loss through damage to or destruction of property, including, but not limited to, surety bonds, life insurance, health insurance, title insurance, and property and casualty insurance (such as private passenger or commercial automobile, homeowners, mortgage, commercial multiperil, general liability, professional liability, workers’ compensation, fire and allied lines, farm owners multiperil, aircraft, fidelity, surety, medical malpractice, ocean marine, inland marine, and boiler and machinery insurance); and</text></subparagraph> <subparagraph id="H6C6B1D4442D63CA6F561EA83D604590"><enum>(B)</enum><text>is not a product or service of a bank that is—</text> <clause id="H1004958A44ECE3A5AC436FBFA316A94"><enum>(i)</enum><text>a deposit product;</text></clause> <clause id="HA4AF4DC54F6360370B437FB56057CAF"><enum>(ii)</enum><text>a loan, discount, letter of credit, or other extension of credit;</text></clause> <clause id="HC2A38D7446D34795BFE66A87F88BFEC"><enum>(iii)</enum><text>a trust or other fiduciary service;</text></clause> <clause id="HF00BE8D5453BF5C325B8CF95AA860EC"><enum>(iv)</enum><text>a qualified financial contract (as defined in or determined pursuant to section 11(e)(8)(D)(i) of the <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name>); or</text></clause> <clause id="HAE99D47545CA69CC73A3C4949DEBD2B"><enum>(v)</enum><text>a financial guaranty, except that this subparagraph (B) shall not apply to a product that includes an insurance component such that if the product is offered or proposed to be offered by the bank as principal—</text> <subclause id="H10541DA540E00A8A43B298B97651DBF"><enum>(I)</enum><text>it would be treated as a life insurance contract under section 7702 of the Internal Revenue Code of 1986; or</text></subclause> <subclause id="HB5A6AB7E47D58E06D12DB8B3F496D80"><enum>(II)</enum><text>in the event that the product is not a letter of credit or other similar extension of credit, a qualified financial contract, or a financial guaranty, it would qualify for treatment for losses incurred with respect to such product under section 832(b)(5) of the Internal Revenue Code of 1986, if the bank were subject to tax as an insurance company under section 831 of that Code; or</text></subclause></clause></subparagraph></paragraph> <paragraph id="H07A9817149B130F278AFF1BD2D00E3D"><enum>(3)</enum><text>any annuity contract, the income on which is subject to tax treatment under section 72 of the Internal Revenue Code of 1986.</text></paragraph></subsection></section> <section id="H16A02A004BDB92B830AFB4B473E3E1F"><enum>305.</enum><header>Title insurance activities of national banks and their affiliates</header> <subsection id="HA9883BEE47072AC7AE6D77A150D7A67"><enum>(a)</enum><header>Authority</header><text>Notwithstanding any other provision of this Act or any other law, no national bank, and no subsidiary of a national bank, may engage in any activity involving the underwriting of title insurance, other than title insurance underwriting activities in which such national bank or subsidiary was actively and lawfully engaged before the date of the enactment of this Act.</text></subsection> <subsection id="H2607E74440A1BD7947CDDD904CBF50C"><enum>(b)</enum><header>Insurance affiliate</header><text>In the case of a national bank which has an affiliate which provides insurance as principal and is not a subsidiary of the bank, the national bank and any subsidiary of the national bank may not engage in any activity involving the underwriting of title insurance pursuant to subsection (a).</text></subsection> <subsection id="H3831FD494DDA56A0D10B7481CA9D559"><enum>(c)</enum><header>Insurance subsidiary</header><text>In the case of a national bank which has a subsidiary which provides insurance as principal and has no affiliate which provides insurance as principal and is not a subsidiary, the national bank may not engage in any activity involving the underwriting of title insurance pursuant to subsection (a).</text></subsection> <subsection id="H90D09EA443BF54855C64E3A2EBE620A"><enum>(d)</enum><header><quote>affiliate</quote> and <quote>subsidiary</quote> defined</header><text>For purposes of this section, the terms <term>affiliate</term> and <term>subsidiary</term> have the same meanings as in <external-xref legal-doc="act" parsable-cite="BHC65/2">section 2</external-xref> of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></subsection></section> <section id="HACC1EBB64DBEE9FA0E39A694A9F5D00"><enum>306.</enum><header>Expedited and equalized dispute resolution for Federal regulators</header> <subsection id="HB5D899AA4F667071762CC19709BCBDD"><enum>(a)</enum><header>Filing in court of appeals</header><text>In the case of a regulatory conflict between a State insurance regulator and a Federal regulator as to whether any product is or is not insurance, as defined in section 304(c) of this Act, or whether a State statute, regulation, order, or interpretation regarding any insurance sales or solicitation activity is properly treated as preempted under Federal law, either regulator may seek expedited judicial review of such determination by the United States Court of Appeals for the circuit in which the State is located or in the United States Court of Appeals for the District of Columbia Circuit by filing a petition for review in such court.</text></subsection> <subsection id="H7A8BE8E2422C0C3EA5253892A06581E"><enum>(b)</enum><header>Expedited review</header><text>The United States Court of Appeals in which a petition for review is filed in accordance with subsection (a) shall complete all action on such petition, including rendering a judgment, before the end of the 60-day period beginning on the date on which such petition is filed, unless all parties to such proceeding agree to any extension of such period.</text></subsection> <subsection id="HA77E84DA464613D71F440BA53B26A49"><enum>(c)</enum><header>Supreme Court review</header><text>Any request for certiorari to the Supreme Court of the United States of any judgment of a United States Court of Appeals with respect to a petition for review under this section shall be filed with the Supreme Court of the United States as soon as practicable after such judgment is issued.</text></subsection> <subsection id="HB599FB0944000E931A50E497E7DBE2A"><enum>(d)</enum><header>Statute of limitation</header><text>No action may be filed under this section challenging an order, ruling, determination, or other action of a Federal regulator or State insurance regulator after the later of—</text> <paragraph id="HCB2A2C264C8CDC4C0A7EB6A350DFE3E"><enum>(1)</enum><text>the end of the 12-month period beginning on the date on which the first public notice is made of such order, ruling, determination or other action in its final form; or</text></paragraph> <paragraph id="H9A72894B4CB138FC218E1CBD1269D00"><enum>(2)</enum><text>the end of the 6-month period beginning on the date on which such order, ruling, determination, or other action takes effect.</text></paragraph></subsection> <subsection id="H3545477045BA108108DE3EAF93C9B25"><enum>(e)</enum><header>Standard of review</header><text>The court shall decide an action filed under this section based on its review on the merits of all questions presented under State and Federal law, including the nature of the product or activity and the history and purpose of its regulation under State and Federal law, without unequal deference.</text></subsection></section> <section id="HE257FBF2435C29378E0F09B26CF9606"><enum>307.</enum><header>Consumer protection regulations</header><text display-inline="no-display-inline">The <act-name parsable-cite="FDIA">Federal Deposit Insurance Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1811">12 U.S.C. 1811</external-xref> et seq.) is amended by adding at the end the following new section:</text> <quoted-block act-name="Federal Deposit Insurance Act" id="H33426D7E4A602C1F530D029A85B8620"> <section id="HCACAAFAB4331D7DD8EF149BAAA297DB"><enum>45.</enum><header>Consumer protection regulations</header> <subsection id="H4906D6574BCAAD7EA45F969BB2E7615"><enum>(a)</enum><header>Regulations required</header> <paragraph id="H43DD62AA46F1DA625ED1FDABF46B18F"><enum>(1)</enum><header>In general</header><text>The Federal banking agencies shall prescribe and publish in final form, before the end of the 1-year period beginning on the date of enactment of the &short-title1;, consumer protection regulations (which the agencies jointly determine to be appropriate) that—</text> <subparagraph id="H4E384B9E4D0F7BDBDD3419A6B7ED12C"><enum>(A)</enum><text>apply to retail sales practices, solicitations, advertising, or offers of any insurance product by any insured depository institution or wholesale financial institution or any person who is engaged in such activities at an office of the institution or on behalf of the institution; and</text></subparagraph> <subparagraph id="HC8A078474F2C34D7DCA41688D8E3628"><enum>(B)</enum><text>are consistent with the requirements of this Act and provide such additional protections for consumers to whom such sales, solicitations, advertising, or offers are directed as the agency determines to be appropriate.</text></subparagraph></paragraph> <paragraph id="H22C58C814455FB4AE21ADCA8A2C3118"><enum>(2)</enum><header>Applicability to subsidiaries</header><text>The regulations prescribed pursuant to paragraph (1) shall extend such protections to any subsidiaries of an insured depository institution, as deemed appropriate by the regulators referred to in paragraph (3), where such extension is determined to be necessary to ensure the consumer protections provided by this section.</text></paragraph> <paragraph id="HC227AAE14DE5ED7A866B9396ED68F51"><enum>(3)</enum><header>Consultation and joint regulations</header><text>The Federal banking agencies shall consult with each other and prescribe joint regulations pursuant to paragraph (1), after consultation with the State insurance regulators, as appropriate.</text></paragraph></subsection> <subsection id="HE59C56B0494F6EAA9ED3B2B674AFE42"><enum>(b)</enum><header>Sales practices</header><text>The regulations prescribed pursuant to subsection (a) shall include anticoercion rules applicable to the sale of insurance products which prohibit an insured depository institution from engaging in any practice that would lead a consumer to believe an extension of credit, in violation of section 106(b) of the <act-name parsable-cite="BHCAA70">Bank Holding Company Act Amendments of 1970</act-name>, is conditional upon—</text> <paragraph id="H2A04E2744081D0028DA3BFA9EEEB546"><enum>(1)</enum><text>the purchase of an insurance product from the institution or any of its affiliates or subsidiaries; or</text></paragraph> <paragraph id="H08AE1CD84975E540CD5C7C9CC849A3A"><enum>(2)</enum><text>an agreement by the consumer not to obtain, or a prohibition on the consumer from obtaining, an insurance product from an unaffiliated entity.</text></paragraph></subsection> <subsection id="H26DF537E47A5CD2664FBF2A9E96EE5E"><enum>(c)</enum><header>Disclosures and advertising</header><text>The regulations prescribed pursuant to subsection (a) shall include the following provisions relating to disclosures and advertising in connection with the initial purchase of an insurance product:</text> <paragraph id="H56B4A1DA45CF638C2039B5BFA5D2AE8"><enum>(1)</enum><header>Disclosures</header> <subparagraph id="H6A7F6AAC49A419DD515D95B6B7458BF"><enum>(A)</enum><header>In general</header><text>Requirements that the following disclosures be made orally and in writing before the completion of the initial sale and, in the case of clause (iii), at the time of application for an extension of credit:</text> <clause id="HBF101B5D42487AB367ECEEB6D1526CE"><enum>(i)</enum><header>Uninsured status</header><text>As appropriate, the product is not insured by the Federal Deposit Insurance Corporation, the United States Government, or the insured depository institution.</text></clause> <clause id="H31DE3B714A2C881E2F5F6AA3CCFA531"><enum>(ii)</enum><header>Investment risk</header><text>In the case of a variable annuity or other insurance product which involves an investment risk, that there is an investment risk associated with the product, including possible loss of value.</text></clause> <clause id="HB92356A7477432DC50DEC49088EEAC3"><enum>(iii)</enum><header>Coercion</header><text>The approval of an extension of credit may not be conditioned on—</text> <subclause id="HB2286809424C73A61B2EC79D7DF96EA"><enum>(I)</enum><text>the purchase of an insurance product from the institution in which the application for credit is pending or any of its affiliates or subsidiaries; or</text></subclause> <subclause id="H337516CB49972A4D95AAABB559DD058"><enum>(II)</enum><text>an agreement by the consumer not to obtain, or a prohibition on the consumer from obtaining, an insurance product from an unaffiliated entity.</text></subclause></clause></subparagraph> <subparagraph id="H0E676B0948B90C42316D24AEDCF00A0"><enum>(B)</enum><header>Making disclosure readily understandable</header><text>Regulations prescribed under subparagraph (A) shall encourage the use of disclosure that is conspicuous, simple, direct, and readily understandable, such as the following:</text> <clause id="H2E8187AE4908DE704E19CA909F1CA8D"><enum>(i)</enum><text><quote>NOT FDIC–INSURED</quote>.</text></clause> <clause id="H1518AD6E48AC42E2370F0AB5A5DE450"><enum>(ii)</enum><text><quote>NOT GUARANTEED BY THE BANK</quote>.</text></clause> <clause id="H17116AFE4AA43B543FE352822582AE6"><enum>(iii)</enum><text><quote>MAY GO DOWN IN VALUE</quote>.</text></clause></subparagraph> <subparagraph id="H481627AF4F17AA452B91DFB29BA301F"><enum>(C)</enum><header>Adjustments for alternative methods of purchase</header><text>In prescribing the requirements under subparagraphs (A) and (D), necessary adjustments shall be made for purchase in person, by telephone, or by electronic media to provide for the most appropriate and complete form of disclosure and acknowledgments.</text></subparagraph> <subparagraph id="H818B299C4F229D98A52887BFD3D32D3"><enum>(D)</enum><header>Consumer acknowledgment</header><text>A requirement that an insured depository institution shall require any person selling an insurance product at any office of, or on behalf of, the institution to obtain, at the time a consumer receives the disclosures required under this paragraph or at the time of the initial purchase by the consumer of such product, an acknowledgment by such consumer of the receipt of the disclosure required under this paragraph with respect to such product.</text></subparagraph></paragraph> <paragraph id="HED47C97D46BA2528DF890B93EE123ED"><enum>(2)</enum><header>Prohibition on misrepresentations</header><text>A prohibition on any practice, or any advertising, at any office of, or on behalf of, the insured depository institution, or any subsidiary as appropriate, which could mislead any person or otherwise cause a reasonable person to reach an erroneous belief with respect to—</text> <subparagraph id="HC9F7CD044816136BDB8501B3FDCAFD9"><enum>(A)</enum><text>the uninsured nature of any insurance product sold, or offered for sale, by the institution or any subsidiary of the institution; or</text></subparagraph> <subparagraph id="HB9877CDE44756778A5BC8E95AF3358D"><enum>(B)</enum><text>in the case of a variable annuity or other insurance product that involves an investment risk, the investment risk associated with any such product.</text></subparagraph></paragraph></subsection> <subsection id="H64B3F1784BBAB513941B49A94F47FDA"><enum>(d)</enum><header>Separation of banking and nonbanking activities</header> <paragraph id="HECAB93594C507BEEA61873B3AAE9DDB"><enum>(1)</enum><header>Regulations required</header><text>The regulations prescribed pursuant to subsection (a) shall include such provisions as the Federal banking agencies consider appropriate to ensure that the routine acceptance of deposits is kept, to the extent practicable, physically segregated from insurance product activity.</text></paragraph> <paragraph id="H6DD2A08E4AE99435E85EFDA8B8A2E9E"><enum>(2)</enum><header>Requirements</header><text>Regulations prescribed pursuant to paragraph (1) shall include the following requirements:</text> <subparagraph id="HD2C99EC1434EA0DF1BA83B9886DF153"><enum>(A)</enum><header>Separate setting</header><text>A clear delineation of the setting in which, and the circumstances under which, transactions involving insurance products should be conducted in a location physically segregated from an area where retail deposits are routinely accepted.</text></subparagraph> <subparagraph id="H48E55A7A4D50C69C46F3559E2404FCF"><enum>(B)</enum><header>Referrals</header><text>Standards which permit any person accepting deposits from the public in an area where such transactions are routinely conducted in an insured depository institution to refer a customer who seeks to purchase any insurance product to a qualified person who sells such product, only if the person making the referral receives no more than a one-time nominal fee of a fixed dollar amount for each referral that does not depend on whether the referral results in a transaction.</text></subparagraph> <subparagraph id="HE899030441C5469E7614A6BF3FF4511"><enum>(C)</enum><header>Qualification and licensing requirements</header><text>Standards prohibiting any insured depository institution from permitting any person to sell or offer for sale any insurance product in any part of any office of the institution, or on behalf of the institution, unless such person is appropriately qualified and licensed.</text></subparagraph></paragraph></subsection> <subsection id="HC10A439C4D5AB6D0F4BC809700D28D3"><enum>(e)</enum><header>Domestic violence discrimination prohibition</header> <paragraph id="HE73F195E48CF44478256ACA0EEB3DB7"><enum>(1)</enum><header>In general</header><text>In the case of an applicant for, or an insured under, any insurance product described in paragraph (2), the status of the applicant or insured as a victim of domestic violence, or as a provider of services to victims of domestic violence, shall not be considered as a criterion in any decision with regard to insurance underwriting, pricing, renewal, or scope of coverage of insurance policies, or payment of insurance claims, except as required or expressly permitted under State law.</text></paragraph> <paragraph id="HAADFF332465646C83568148F9261B1D"><enum>(2)</enum><header>Scope of application</header><text>The prohibition contained in paragraph (1) shall apply to any insurance product which is sold or offered for sale, as principal, agent, or broker, by any insured depository institution or any person who is engaged in such activities at an office of the institution or on behalf of the institution.</text></paragraph> <paragraph id="HCC66AD604ED7DCF94A6589BA26DBEED"><enum>(3)</enum><header>Sense of the Congress</header><text>It is the sense of the Congress that, by the end of the 30-month period beginning on the date of the enactment of the &short-title1;, the States should enact prohibitions against discrimination with respect to insurance products that are at least as strict as the prohibitions contained in paragraph (1).</text></paragraph> <paragraph id="HF652DE0942846EBD196B3DAD4D0082D"><enum>(4)</enum><header>Domestic violence defined</header><text>For purposes of this subsection, the term <term>domestic violence</term> means the occurrence of 1 or more of the following acts by a current or former family member, household member, intimate partner, or caretaker:</text> <subparagraph id="H910739B74401E33FE66E9891A0CEF6E"><enum>(A)</enum><text>Attempting to cause or causing or threatening another person with physical harm, severe emotional distress, psychological trauma, rape, or sexual assault.</text></subparagraph> <subparagraph id="HEE42004F4393BB8BBC5E88976BC8E98"><enum>(B)</enum><text>Engaging in a course of conduct or repeatedly committing acts toward another person, including following the person without proper authority, under circumstances that place the person in reasonable fear of bodily injury or physical harm.</text></subparagraph> <subparagraph id="H17CF37B74D0B66AEBF30399BD7E00DB"><enum>(C)</enum><text>Subjecting another person to false imprisonment.</text></subparagraph> <subparagraph id="H0EF72D69439EFBD66298A39DCAED527"><enum>(D)</enum><text>Attempting to cause or causing damage to property so as to intimidate or attempt to control the behavior of another person.</text></subparagraph></paragraph></subsection> <subsection id="HE0035CF54F316F9CDEDECE80B9B17D1"><enum>(f)</enum><header>Consumer grievance process</header><text>The Federal banking agencies shall jointly establish a consumer complaint mechanism, for receiving and expeditiously addressing consumer complaints alleging a violation of regulations issued under this section, which mechanism shall—</text> <paragraph id="HC63284D643C30698A5C63F9D5FAC60C"><enum>(1)</enum><text>establish a group within each regulatory agency to receive such complaints;</text></paragraph> <paragraph id="HFF08F2B942FC47EF50EE6A9BB107720"><enum>(2)</enum><text>develop procedures for investigating such complaints;</text></paragraph> <paragraph id="H13E2EEA146D652CC59009A8EAF5E9A8"><enum>(3)</enum><text>develop procedures for informing consumers of rights they may have in connection with such complaints; and</text></paragraph> <paragraph id="HC1DEFF984AA66F959FCF6CB0B7619CC"><enum>(4)</enum><text>develop procedures for addressing concerns raised by such complaints, as appropriate, including procedures for the recovery of losses to the extent appropriate.</text></paragraph></subsection> <subsection id="HEA5EFE1649A9936539631084BCDE3EC"><enum>(g)</enum><header>Effect on other authority</header> <paragraph id="H40BB5D7F489C02CB527BC88837DDA06"><enum>(1)</enum><header>In general</header><text>No provision of this section shall be construed as granting, limiting, or otherwise affecting—</text> <subparagraph id="H1ACD395241749D4AAFC5E9AA12C012C"><enum>(A)</enum><text>any authority of the Securities and Exchange Commission, any self-regulatory organization, the Municipal Securities Rulemaking Board, or the Secretary of the Treasury under any Federal securities law; or</text></subparagraph> <subparagraph id="H2D89534A477E6BB814F5B798625358D"><enum>(B)</enum><text>except as provided in paragraph (2), any authority of any State insurance commissioner or other State authority under any State law.</text></subparagraph></paragraph> <paragraph id="H00E667A24666E0F59EED6E818DB74FA"><enum>(2)</enum><header>Coordination with State law</header> <subparagraph id="H2A80DB0F447B6E964B9F88BF2482D9B"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), regulations prescribed by a Federal banking agency under this section shall not apply to retail sales, solicitations, advertising, or offers of any insurance product by any insured depository institution or wholesale financial institution or to any person who is engaged in such activities at an office of such institution or on behalf of the institution, in a State where the State has in effect statutes, regulations, orders, or interpretations, that are inconsistent with or contrary to the regulations prescribed by the Federal banking agencies.</text></subparagraph> <subparagraph id="HF89CB6AC4BFE1BC28DA340898EAA5A2"><enum>(B)</enum><header>Preemption</header><text>If, with respect to any provision of the regulations prescribed under this section, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Board of Directors of the Federal Deposit Insurance Corporation determine jointly that the protection afforded by such provision for consumers is greater than the protection provided by a comparable provision of the statutes, regulations, orders, or interpretations referred to in subparagraph (A) of any State, such provision of the regulations prescribed under this section shall supersede the comparable provision of such State statute, regulation, order, or interpretation.</text></subparagraph></paragraph></subsection> <subsection id="HB7C34EE044F449C5D072259511EEBAF"><enum>(h)</enum><header>Insurance product defined</header><text>For purposes of this section, the term <term>insurance product</term> includes an annuity contract the income of which is subject to tax treatment under section 72 of the Internal Revenue Code of 1986.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H30B098C64C5FD40018F025A83611F6F"><enum>308.</enum><header>Certain State affiliation laws preempted for insurance companies and affiliates</header><text display-inline="no-display-inline">Except as provided in section 104(a)(2), no State may, by law, regulation, order, interpretation, or otherwise—</text> <paragraph id="H8F1C0B714E5B000BE6F808A6F1CECD0"><enum>(1)</enum><text>prevent or significantly interfere with the ability of any insurer, or any affiliate of an insurer (whether such affiliate is organized as a stock company, mutual holding company, or otherwise), to become a financial holding company or to acquire control of an insured depository institution;</text></paragraph> <paragraph id="HE9EF73234C4CA427783B59957752A5F"><enum>(2)</enum><text>limit the amount of an insurer’s assets that may be invested in the voting securities of an insured depository institution (or any company which controls such institution), except that the laws of an insurer’s State of domicile may limit the amount of such investment to an amount that is not less than 5 percent of the insurer’s admitted assets; or</text></paragraph> <paragraph id="HD9FE9EF1463636978281FB8D33DB5A1"><enum>(3)</enum><text>prevent, significantly interfere with, or have the authority to review, approve, or disapprove a plan of reorganization by which an insurer proposes to reorganize from mutual form to become a stock insurer (whether as a direct or indirect subsidiary of a mutual holding company or otherwise) unless such State is the State of domicile of the insurer.</text></paragraph></section> <section id="H4D5EF9D54EE6D6930CA9E5ADAA65304"><enum>309.</enum><header>Publication of preemption of State laws</header><text display-inline="no-display-inline">Section 5244 of the Revised Statutes of the United States (<external-xref legal-doc="usc" parsable-cite="usc/12/43">12 U.S.C. 43</external-xref>) is amended—</text> <paragraph id="H9DF10E2A449D7019D24463AFE5D5B54"><enum>(1)</enum><text>by inserting <quote>or Federal savings association</quote> after <quote>national bank</quote> each place that term appears; and</text></paragraph> <paragraph id="HD963A83045BC314BF25DDAA75C45E01"><enum>(2)</enum><text>in subsection (c)(3)(B)(i), by inserting <quote>or savings associations</quote> after <quote>banks</quote>.</text></paragraph></section></subtitle> <subtitle id="HA5E366B74E5BAF0ED26C578B8340C5B"><enum>B</enum><header>Redomestication of mutual insurers</header> <section id="H7E4AA10B495657C5CD3E7FBE47A1118"><enum>311.</enum><header>General application</header><text display-inline="no-display-inline">This subtitle shall only apply to a mutual insurance company in a State which has not enacted a law which expressly establishes reasonable terms and conditions for a mutual insurance company domiciled in such State to reorganize into a mutual holding company.</text></section> <section id="HB44ABB474F6B368FD0843BA279BE20D"><enum>312.</enum><header>Redomestication of mutual insurers</header> <subsection id="HE561BD0744787623B0C17EB54BAAE11"><enum>(a)</enum><header>Redomestication</header><text>A mutual insurer organized under the laws of any State may transfer its domicile to a transferee domicile as a step in a reorganization in which, pursuant to the laws of the transferee domicile and consistent with the standards in subsection (f), the mutual insurer becomes a stock insurer that is a direct or indirect subsidiary of a mutual holding company.</text></subsection> <subsection id="H68515C0F417E98B3FC2B5DABAA7DAA7"><enum>(b)</enum><header>Resulting domicile</header><text>Upon complying with the applicable law of the transferee domicile governing transfers of domicile and completion of a transfer pursuant to this section, the mutual insurer shall cease to be a domestic insurer in the transferor domicile and, as a continuation of its corporate existence, shall be a domestic insurer of the transferee domicile.</text></subsection> <subsection id="HC97BBDD64868112DE31A239FD387740"><enum>(c)</enum><header>Licenses preserved</header><text>The certificate of authority, agents’ appointments and licenses, rates, approvals and other items that a licensed State allows and that are in existence immediately prior to the date that a redomesticating insurer transfers its domicile pursuant to this subtitle shall continue in full force and effect upon transfer, if the insurer remains duly qualified to transact the business of insurance in such licensed State.</text></subsection> <subsection id="H2E509D3E4728E213D3F268B5E025B8E"><enum>(d)</enum><header>Effectiveness of outstanding policies and contracts</header> <paragraph id="HB7E2A8654540C5DEF4DD7FB1919458A"><enum>(1)</enum><header>In general</header><text>All outstanding insurance policies and annuities contracts of a redomesticating insurer shall remain in full force and effect and need not be endorsed as to the new domicile of the insurer, unless so ordered by the State insurance regulator of a licensed State, and then only in the case of outstanding policies and contracts whose owners reside in such licensed State.</text></paragraph> <paragraph id="HBFF556C74D48E4AD304D2FA4A11D246"><enum>(2)</enum><header>Forms</header> <subparagraph id="H36B6B072419839B911FC7ABDB39BC9B"><enum>(A)</enum><text>Applicable State law may require a redomesticating insurer to file new policy forms with the State insurance regulator of a licensed State on or before the effective date of the transfer.</text></subparagraph> <subparagraph id="H17D0AC5A4339BACAC51933BEA04DE11"><enum>(B)</enum><text>Notwithstanding subparagraph (A), a redomesticating insurer may use existing policy forms with appropriate endorsements to reflect the new domicile of the redomesticating insurer until the new policy forms are approved for use by the State insurance regulator of such licensed State.</text></subparagraph></paragraph></subsection> <subsection id="HC24C69BA4B458AE06B973F8C7DFED36"><enum>(e)</enum><header>Notice</header><text>A redomesticating insurer shall give notice of the proposed transfer to the State insurance regulator of each licensed State and shall file promptly any resulting amendments to corporate documents required to be filed by a foreign licensed mutual insurer with the insurance regulator of each such licensed State.</text></subsection> <subsection id="H53612E434870C06515FF95831FF200A"><enum>(f)</enum><header>Procedural requirements</header><text>No mutual insurer may redomesticate to another State and reorganize into a mutual holding company pursuant to this section unless the State insurance regulator of the transferee domicile determines that the plan of reorganization of the insurer includes the following requirements:</text> <paragraph id="H3F65DCD0459FC5EEAFDADD9C3E14E3F"><enum>(1)</enum><header>Approval by Board of Directors and policyholders</header><text>The reorganization is approved by at least a majority of the board of directors of the mutual insurer and at least a majority of the policyholders who vote after notice, disclosure of the reorganization and the effects of the transaction on policyholder contractual rights, and reasonable opportunity to vote, in accordance with such notice, disclosure, and voting procedures as are approved by the State insurance regulator of the transferee domicile.</text></paragraph> <paragraph id="HC066F1584632B53E78156F9AA569EC9"><enum>(2)</enum><header>Continued voting control by policyholders; review of public stock offering</header><text>After the consummation of a reorganization, the policyholders of the reorganized insurer shall have the same voting rights with respect to the mutual holding company as they had before the reorganization with respect to the mutual insurer. With respect to an initial public offering of stock, the offering shall be conducted in compliance with applicable securities laws and in a manner approved by the State insurance regulator of the transferee domicile.</text></paragraph> <paragraph id="H464C429843ACDEFB8EDE26961DD3118"><enum>(3)</enum><header>Award of stock or grant of options to officers and directors</header><text>For a period of 6 months after completion of an initial public offering, neither a stock holding company nor the converted insurer shall award any stock options or stock grants to persons who are elected officers or directors of the mutual holding company, the stock holding company, or the converted insurer, except with respect to any such awards or options to which a person is entitled as a policyholder and as approved by the State insurance regulator of the transferee domicile.</text></paragraph> <paragraph id="H3EBB88B24AE10D4BDC14D5AD7800D84"><enum>(4)</enum><header>Contractual rights</header><text>Upon reorganization into a mutual holding company, the contractual rights of the policyholders are preserved.</text></paragraph> <paragraph id="H972DB3F74D38D868171044BD5DB00D2"><enum>(5)</enum><header>Fair and equitable treatment of policyholders</header><text>The reorganization is approved as fair and equitable to the policyholders by the insurance regulator of the transferee domicile.</text></paragraph></subsection></section> <section id="HFF4156DE4D4DCDBD75456492C43189C"><enum>313.</enum><header>Effect on State laws restricting redomestication</header> <subsection id="H99E7E74C4048A132414490A2ADD90A0"><enum>(a)</enum><header>In general</header><text>Unless otherwise permitted by this subtitle, State laws of any transferor domicile that conflict with the purposes and intent of this subtitle are preempted, including but not limited to—</text> <paragraph id="H07F968734EE8AF3BF7D35A9E92A7ABF"><enum>(1)</enum><text>any law that has the purpose or effect of impeding the activities of, taking any action against, or applying any provision of law or regulation to, any insurer or an affiliate of such insurer because that insurer or any affiliate plans to redomesticate, or has redomesticated, pursuant to this subtitle;</text></paragraph> <paragraph id="H6E1162614FEA289073BEA4A5ED946EE"><enum>(2)</enum><text>any law that has the purpose or effect of impeding the activities of, taking action against, or applying any provision of law or regulation to, any insured or any insurance licensee or other intermediary because such person or entity has procured insurance from or placed insurance with any insurer or affiliate of such insurer that plans to redomesticate, or has redomesticated, pursuant to this subtitle, but only to the extent that such law would treat such insured licensee or other intermediary differently than if the person or entity procured insurance from, or placed insurance with, an insured licensee or other intermediary which had not redomesticated;</text></paragraph> <paragraph id="H54AE89A64ABC387D15FFC6942DBE76F"><enum>(3)</enum><text>any law that has the purpose or effect of terminating, because of the redomestication of a mutual insurer pursuant to this subtitle, any certificate of authority, agent appointment or license, rate approval, or other approval, of any State insurance regulator or other State authority in existence immediately prior to the redomestication in any State other than the transferee domicile.</text></paragraph></subsection> <subsection id="H732BEA164B7F9BCCA19F73AEC0B519D"><enum>(b)</enum><header>Differential treatment prohibited</header><text>No State law, regulation, interpretation, or functional equivalent thereof, of a State other than a transferee domicile may treat a redomesticating or redomesticated insurer or any affiliate thereof any differently than an insurer operating in that State that is not a redomesticating or redomesticated insurer.</text></subsection> <subsection id="H7805697644E491B8FFD266B23CCA39C"><enum>(c)</enum><header>Laws prohibiting operations</header><text>If any licensed State fails to issue, delays the issuance of, or seeks to revoke an original or renewal certificate of authority of a redomesticated insurer immediately following redomestication, except on grounds and in a manner consistent with its past practices regarding the issuance of certificates of authority to foreign insurers that are not redomesticating, then the redomesticating insurer shall be exempt from any State law of the licensed State to the extent that such State law or the operation of such State law would make unlawful, or regulate, directly or indirectly, the operation of the redomesticated insurer, except that such licensed State may require the redomesticated insurer to—</text> <paragraph id="H51C4FF9749C21DF21CDC2DAF50D5942"><enum>(1)</enum><text>comply with the unfair claim settlement practices law of the licensed State;</text></paragraph> <paragraph id="HA7DC1C664C274C886DDE7ABC830099C"><enum>(2)</enum><text>pay, on a nondiscriminatory basis, applicable premium and other taxes which are levied on licensed insurers or policyholders under the laws of the licensed State;</text></paragraph> <paragraph id="HBB87987B4099572DD324AD97E1CB71B"><enum>(3)</enum><text>register with and designate the State insurance regulator as its agent solely for the purpose of receiving service of legal documents or process;</text></paragraph> <paragraph id="H4B606F6840A1A7DC4C0C4FAAEB78E9E"><enum>(4)</enum><text>submit to an examination by the State insurance regulator in any licensed state in which the redomesticated insurer is doing business to determine the insurer’s financial condition, if—</text> <subparagraph id="HA9BC318C425EA62D99C9EDBD89BD42E"><enum>(A)</enum><text>the State insurance regulator of the transferee domicile has not begun an examination of the redomesticated insurer and has not scheduled such an examination to begin before the end of the 1-year period beginning on the date of the redomestication; and</text></subparagraph> <subparagraph id="H1418E77F4AA7F226742A72978FBB29C"><enum>(B)</enum><text>any such examination is coordinated to avoid unjustified duplication and repetition;</text></subparagraph></paragraph> <paragraph id="H4467C1344199576C935E368671CD367"><enum>(5)</enum><text>comply with a lawful order issued in—</text> <subparagraph id="H760FFA9645F47D1A765E7382415258B"><enum>(A)</enum><text>a delinquency proceeding commenced by the State insurance regulator of any licensed State if there has been a judicial finding of financial impairment under paragraph (7); or</text></subparagraph> <subparagraph id="HF68F148B41CBCB4412DB7C8D2100D29"><enum>(B)</enum><text>a voluntary dissolution proceeding;</text></subparagraph></paragraph> <paragraph id="HFE2EE45C460A40FDB6F48FB0D191920"><enum>(6)</enum><text>comply with any State law regarding deceptive, false, or fraudulent acts or practices, except that if the licensed State seeks an injunction regarding the conduct described in this paragraph, such injunction must be obtained from a court of competent jurisdiction as provided in section 314(a);</text></paragraph> <paragraph id="H42CC03E1451B0918E1E1CD9FD5416CC"><enum>(7)</enum><text>comply with an injunction issued by a court of competent jurisdiction, upon a petition by the State insurance regulator alleging that the redomesticating insurer is in hazardous financial condition or is financially impaired;</text></paragraph> <paragraph id="H8130312D4A1CE075B10CBAA1DCD148F"><enum>(8)</enum><text>participate in any insurance insolvency guaranty association on the same basis as any other insurer licensed in the licensed State; and</text></paragraph> <paragraph id="H6F1B9F32475871309A383188E228C41"><enum>(9)</enum><text>require a person acting, or offering to act, as an insurance licensee for a redomesticated insurer in the licensed State to obtain a license from that State, except that such State may not impose any qualification or requirement that discriminates against a nonresident insurance licensee.</text></paragraph></subsection></section> <section id="HE9D7937148CF2C95CB7D31A57F49FFA"><enum>314.</enum><header>Other provisions</header> <subsection id="H0CF437AE4EB0C2C3E620C69ECA82616"><enum>(a)</enum><header>Judicial review</header><text>The appropriate United States district court shall have exclusive jurisdiction over litigation arising under this section involving any redomesticating or redomesticated insurer.</text></subsection> <subsection id="H706ABB5F40A09626F763368BA9C414E"><enum>(b)</enum><header>Severability</header><text>If any provision of this section, or the application thereof to any person or circumstances, is held invalid, the remainder of the section, and the application of such provision to other persons or circumstances, shall not be affected thereby.</text></subsection></section> <section id="HEFBD61C243702D263CD660ADE429CC4"><enum>315.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text> <paragraph id="H26539A6841B758865B9BB38FB7B1B01"><enum>(1)</enum><header>Court of competent jurisdiction</header><text>The term <term>court of competent jurisdiction</term> means a court authorized pursuant to section 314(a) to adjudicate litigation arising under this subtitle.</text></paragraph> <paragraph id="H8F450B634B03544991CBF1B580ED2FB"><enum>(2)</enum><header>Domicile</header><text>The term <term>domicile</term> means the State in which an insurer is incorporated, chartered, or organized.</text></paragraph> <paragraph id="H757DA1F24DFE6422F676258FBF03B00"><enum>(3)</enum><header>Insurance licensee</header><text>The term <term>insurance licensee</term> means any person holding a license under State law to act as insurance agent, subagent, broker, or consultant.</text></paragraph> <paragraph id="HC535FB6040DA53139F632E883EAFFD8"><enum>(4)</enum><header>Institution</header><text>The term <term>institution</term> means a corporation, joint stock company, limited liability company, limited liability partnership, association, trust, partnership, or any similar entity.</text></paragraph> <paragraph id="H06C02C264A1DEB3540D5919408E4EBB"><enum>(5)</enum><header>Licensed State</header><text>The term <term>licensed State</term> means any State, the District of Columbia, American Samoa, Guam, Puerto Rico, or the United States Virgin Islands in which the redomesticating insurer has a certificate of authority in effect immediately prior to the redomestication.</text></paragraph> <paragraph id="HB04E3AB44105DBE5AF35F1B0803EBAD"><enum>(6)</enum><header>Mutual insurer</header><text>The term <term>mutual insurer</term> means a mutual insurer organized under the laws of any State.</text></paragraph> <paragraph id="HA3F9757545DFA05AA1D0CFB1002CBB6"><enum>(7)</enum><header>Person</header><text>The term <term>person</term> means an individual, institution, government or governmental agency, State or political subdivision of a State, public corporation, board, association, estate, trustee, or fiduciary, or other similar entity.</text></paragraph> <paragraph id="H373116FF467139D51E3A52A2F7EA033"><enum>(8)</enum><header>Policyholder</header><text>The term <term>policyholder</term> means the owner of a policy issued by a mutual insurer, except that, with respect to voting rights, the term means a member of a mutual insurer or mutual holding company granted the right to vote, as determined under applicable State law.</text></paragraph> <paragraph id="H0E71C294435C8DEEDCAC308BB8D8797"><enum>(9)</enum><header>Redomesticated insurer</header><text>The term <term>redomesticated insurer</term> means a mutual insurer that has redomesticated pursuant to this subtitle.</text></paragraph> <paragraph id="H160849914C9976B125080EB7C1E6045"><enum>(10)</enum><header>Redomesticating insurer</header><text>The term <term>redomesticating insurer</term> means a mutual insurer that is redomesticating pursuant to this subtitle.</text></paragraph> <paragraph id="HF63B97C141EEC30FE3E4F888CC43FC9"><enum>(11)</enum><header>Redomestication or transfer</header><text>The terms <term>redomestication</term> and <term>transfer</term> mean the transfer of the domicile of a mutual insurer from one State to another State pursuant to this subtitle.</text></paragraph> <paragraph id="H3B8995DB4E54523CC8B3DBB6F30B518"><enum>(12)</enum><header>State insurance regulator</header><text>The term <term>State insurance regulator</term> means the principal insurance regulatory authority of a State, the District of Columbia, American Samoa, Guam, Puerto Rico, or the United States Virgin Islands.</text></paragraph> <paragraph id="H3AA64F754AC88D098E7216A4809DB62"><enum>(13)</enum><header>State law</header><text>The term <term>State law</term> means the statutes of any State, the District of Columbia, American Samoa, Guam, Puerto Rico, or the United States Virgin Islands and any regulation, order, or requirement prescribed pursuant to any such statute.</text></paragraph> <paragraph id="H659EBB154451DDCADCAC6BAB60C55C8"><enum>(14)</enum><header>Transferee domicile</header><text>The term <term>transferee domicile</term> means the State to which a mutual insurer is redomesticating pursuant to this subtitle.</text></paragraph> <paragraph id="HD48629034D0EBB4BEABF7DA04FF03A8"><enum>(15)</enum><header>Transferor domicile</header><text>The term <term>transferor domicile</term> means the State from which a mutual insurer is redomesticating pursuant to this subtitle.</text></paragraph></section> <section id="H38B16A74462C14398C19B182F14B56B"><enum>316.</enum><header>Effective date</header><text display-inline="no-display-inline">This subtitle shall take effect on the date of the enactment of this Act.</text></section></subtitle> <subtitle id="HD374DEC440F2B133516BA6872E82E50"><enum>C</enum><header>National Association of Registered Agents and Brokers</header> <section id="H1A4FE95F41517A117481949EA94F7EA"><enum>321.</enum><header>State flexibility in multistate licensing reforms</header> <subsection id="H3A13A25D427D30C5E355E0B8F2BFEAA"><enum>(a)</enum><header>In general</header><text>The provisions of this subtitle shall take effect unless, not later than 3 years after the date of enactment of this Act, at least a majority of the States—</text> <paragraph id="H846E863545A79E074C858BA1EB7961E"><enum>(1)</enum><text>have enacted uniform laws and regulations governing the licensure of individuals and entities authorized to sell and solicit the purchase of insurance within the State; or</text></paragraph> <paragraph id="H051E632A4ABF0BE94303229944A4F4E"><enum>(2)</enum><text>have enacted reciprocity laws and regulations governing the licensure of nonresident individuals and entities authorized to sell and solicit insurance within those States.</text></paragraph></subsection> <subsection id="H9C2080EE4B1911818232798DD6AAE00"><enum>(b)</enum><header>Uniformity required</header><text>States shall be deemed to have established the uniformity necessary to satisfy subsection (a)(1) if the States—</text> <paragraph id="H26B6A909402B80088A7183B793C00F3"><enum>(1)</enum><text>establish uniform criteria regarding the integrity, personal qualifications, education, training, and experience of licensed insurance producers, including the qualification and training of sales personnel in ascertaining the appropriateness of a particular insurance product for a prospective customer;</text></paragraph> <paragraph id="H1E3CF6F046E12BBEB548BCA5E4D390B"><enum>(2)</enum><text>establish uniform continuing education requirements for licensed insurance producers;</text></paragraph> <paragraph id="HB553FD1C46AE51FEAFEED099C21EA6B"><enum>(3)</enum><text>establish uniform ethics course requirements for licensed insurance producers in conjunction with the continuing education requirements under paragraph (2);</text></paragraph> <paragraph id="H40F71A6A4E935A3FDE0B1B865850BDD"><enum>(4)</enum><text>establish uniform criteria to ensure that an insurance product, including any annuity contract, sold to a consumer is suitable and appropriate for the consumer based on financial information disclosed by the consumer; and</text></paragraph> <paragraph id="H4B294D5742CEDEB08BD75981B79ACF9"><enum>(5)</enum><text>do not impose any requirement upon any insurance producer to be licensed or otherwise qualified to do business as a nonresident that has the effect of limiting or conditioning that producer’s activities because of its residence or place of operations, except that counter-signature requirements imposed on nonresident producers shall not be deemed to have the effect of limiting or conditioning a producer’s activities because of its residence or place of operations under this section.</text></paragraph></subsection> <subsection id="H234B7A07444BA0513CE90ABBEC24E39"><enum>(c)</enum><header>Reciprocity required</header><text>States shall be deemed to have established the reciprocity required to satisfy subsection (a)(2) if the following conditions are met:</text> <paragraph id="HED3D9B414FB6C62B578BCD93B048557"><enum>(1)</enum><header>Administrative licensing procedures</header><text>At least a majority of the States permit a producer that has a resident license for selling or soliciting the purchase of insurance in its home State to receive a license to sell or solicit the purchase of insurance in such majority of States as a nonresident to the same extent that such producer is permitted to sell or solicit the purchase of insurance in its State, if the producer’s home State also awards such licenses on such a reciprocal basis, without satisfying any additional requirements other than submitting—</text> <subparagraph id="HCC1285D94D7F0398D9991292C00F144"><enum>(A)</enum><text>a request for licensure;</text></subparagraph> <subparagraph id="H47366C804BB0CD950F6731AB83CBF6F"><enum>(B)</enum><text>the application for licensure that the producer submitted to its home State;</text></subparagraph> <subparagraph id="HB06A98B746E6BADB3B6D60836E00B8E"><enum>(C)</enum><text>proof that the producer is licensed and in good standing in its home State; and</text></subparagraph> <subparagraph id="HB4E31ECB4FB023768E0962AD482BADA"><enum>(D)</enum><text>the payment of any requisite fee to the appropriate authority.</text></subparagraph></paragraph> <paragraph id="HB067138A49AB989C74ECC884B976D96"><enum>(2)</enum><header>Continuing education requirements</header><text>A majority of the States accept an insurance producer’s satisfaction of its home State’s continuing education requirements for licensed insurance producers to satisfy the States’ own continuing education requirements if the producer’s home State also recognizes the satisfaction of continuing education requirements on such a reciprocal basis.</text></paragraph> <paragraph id="H98B446364321BB41DB3D97A67000A13"><enum>(3)</enum><header>No limiting nonresident requirements</header><text>A majority of the States do not impose any requirement upon any insurance producer to be licensed or otherwise qualified to do business as a nonresident that has the effect of limiting or conditioning that producer’s activities because of its residence or place of operations, except that countersignature requirements imposed on nonresident producers shall not be deemed to have the effect of limiting or conditioning a producer’s activities because of its residence or place of operations under this section.</text></paragraph> <paragraph id="H9EE6CB1A44B8CBF8DD68218CF5F2654"><enum>(4)</enum><header>Reciprocal reciprocity</header><text>Each of the States that satisfies paragraphs (1), (2), and (3) grants reciprocity to residents of all of the other States that satisfy such paragraphs.</text></paragraph></subsection> <subsection id="H9E4C7FF046BD2643BFFBB0AB3C70E17"><enum>(d)</enum><header>Determination</header> <paragraph id="HDCED6EDE4A86B51278050BBAF1162DC"><enum>(1)</enum><header>NAIC determination</header><text>At the end of the 3-year period beginning on the date of the enactment of this Act, the National Association of Insurance Commissioners shall determine, in consultation with the insurance commissioners or chief insurance regulatory officials of the States, whether the uniformity or reciprocity required by subsections (b) and (c) has been achieved.</text></paragraph> <paragraph id="HE32D79C34BD44865A3E4C693BFE7F71"><enum>(2)</enum><header>Judicial review</header><text>The appropriate United States district court shall have exclusive jurisdiction over any challenge to the National Association of Insurance Commissioners’ determination under this section and such court shall apply the standards set forth in section 706 of title 5, United States Code, when reviewing any such challenge.</text></paragraph></subsection> <subsection id="HD988F8304F55DF6FCA21FDA78ED87BD"><enum>(e)</enum><header>Continued application</header><text>If, at any time, the uniformity or reciprocity required by subsections (b) and (c) no longer exists, the provisions of this subtitle shall take effect 2 years after the date on which such uniformity or reciprocity ceases to exist, unless the uniformity or reciprocity required by those provisions is satisfied before the expiration of that 2-year period.</text></subsection> <subsection id="HAD944B1A4A70C6DE70F35A8E9C601FF"><enum>(f)</enum><header>Savings provision</header><text>No provision of this section shall be construed as requiring that any law, regulation, provision, or action of any State which purports to regulate insurance producers, including any such law, regulation, provision, or action which purports to regulate unfair trade practices or establish consumer protections, including countersignature laws, be altered or amended in order to satisfy the uniformity or reciprocity required by subsections (b) and (c), unless any such law, regulation, provision, or action is inconsistent with a specific requirement of any such subsection and then only to the extent of such inconsistency.</text></subsection> <subsection id="H3E7940D94F222C0A3A533D82AAACB1C"><enum>(g)</enum><header>Uniform licensing</header><text>Nothing in this section shall be construed to require any State to adopt new or additional licensing requirements to achieve the uniformity necessary to satisfy subsection (a)(1).</text></subsection></section> <section id="H198E991541087DD6C9F6CF9DAF16736"><enum>322.</enum><header>National Association of Registered Agents and Brokers</header> <subsection id="HA84809474C351A689B2963ACCA28E72"><enum>(a)</enum><header>Establishment</header><text>There is established the National Association of Registered Agents and Brokers (hereafter in this subtitle referred to as the <quote>Association</quote>).</text></subsection> <subsection id="H68D8A81040391AAABBA4A1843416C4C"><enum>(b)</enum><header>Status</header><text>The Association shall—</text> <paragraph id="H4FE6779F4871F94F58398492A872439"><enum>(1)</enum><text>be a nonprofit corporation;</text></paragraph> <paragraph id="H3814FE494DA9C4D4066F04A2D2C5626"><enum>(2)</enum><text>have succession until dissolved by an Act of Congress;</text></paragraph> <paragraph id="H5EA423624414FD016FA145A4A6DCF02"><enum>(3)</enum><text>not be an agent or instrumentality of the United States Government; and</text></paragraph> <paragraph id="H6D2A784C4778B0031CA67C812F98E5F"><enum>(4)</enum><text>except as otherwise provided in this Act, be subject to, and have all the powers conferred upon a nonprofit corporation by the District of <act-name parsable-cite="CNCA">Columbia Nonprofit Corporation Act</act-name> (D.C. Code, sec. 29y–1001 et seq.).</text></paragraph></subsection></section> <section id="HD150C9D443AB7B0B6FB46B80B451B07"><enum>323.</enum><header>Purpose</header><text display-inline="no-display-inline">The purpose of the Association shall be to provide a mechanism through which uniform licensing, appointment, continuing education, and other insurance producer sales qualification requirements and conditions can be adopted and applied on a multistate basis, while preserving the right of States to license, supervise, and discipline insurance producers and to prescribe and enforce laws and regulations with regard to insurance-related consumer protection and unfair trade practices.</text></section> <section id="H8E308AD04F08C11163D3AB9F2CDF407"><enum>324.</enum><header>Relationship to the Federal Government</header><text display-inline="no-display-inline">The Association shall be subject to the supervision and oversight of the National Association of Insurance Commissioners (hereafter in this subtitle referred to as the <quote>NAIC</quote>).</text></section> <section id="H2CFDCE674C4E0CD0E94F3890BE19EBF"><enum>325.</enum><header>Membership</header> <subsection id="H1703A9414A911CD28E8EB0B4004DB8F"><enum>(a)</enum><header>Eligibility</header> <paragraph id="H553C056A43590D89E4A4B5B7B8A718D"><enum>(1)</enum><header>In general</header><text>Any State-licensed insurance producer shall be eligible to become a member in the Association.</text></paragraph> <paragraph id="H751696B84A18C8E553248798A3CB9B4"><enum>(2)</enum><header>Ineligibility for suspension or revocation of license</header><text>Notwithstanding paragraph (1), a State-licensed insurance producer shall not be eligible to become a member if a State insurance regulator has suspended or revoked such producer’s license in that State during the 3-year period preceding the date on which such producer applies for membership.</text></paragraph> <paragraph id="HD96CA3D44855311E47C1028DBAA4639"><enum>(3)</enum><header>Resumption of eligibility</header><text>Paragraph (2) shall cease to apply to any insurance producer if—</text> <subparagraph id="H85136C844D1B5AF55D0BB38B5DC02BA"><enum>(A)</enum><text>the State insurance regulator renews the license of such producer in the State in which the license was suspended or revoked; or</text></subparagraph> <subparagraph id="HD0F91D4A4215C4DF20E9008EABC44CD"><enum>(B)</enum><text>the suspension or revocation is subsequently overturned.</text></subparagraph></paragraph></subsection> <subsection id="H12D7D33045C42961FACAC5A784F7BAE"><enum>(b)</enum><header>Authority to establish membership criteria</header><text>The Association shall have the authority to establish membership criteria that—</text> <paragraph id="H33445CF745E75E5B25962AA413AFECE"><enum>(1)</enum><text>bear a reasonable relationship to the purposes for which the Association was established; and</text></paragraph> <paragraph id="HE9E06D5B4B6A43806E356CB4FBBBA48"><enum>(2)</enum><text>do not unfairly limit the access of smaller agencies to the Association membership.</text></paragraph></subsection> <subsection id="H56FF10684EAB4105EA07C29D7C0000F"><enum>(c)</enum><header>Establishment of classes and categories</header> <paragraph id="HB68520554BC8461A5B7E318BE846FE1"><enum>(1)</enum><header>Classes of membership</header><text>The Association may establish separate classes of membership, with separate criteria, if the Association reasonably determines that performance of different duties requires different levels of education, training, or experience.</text></paragraph> <paragraph id="H971FD87748D5065B5AA28CBAB794E4E"><enum>(2)</enum><header>Categories</header><text>The Association may establish separate categories of membership for individuals and for other persons. The establishment of any such categories of membership shall be based either on the types of licensing categories that exist under State laws or on the aggregate amount of business handled by an insurance producer. No special categories of membership, and no distinct membership criteria, shall be established for members which are insured depository institutions or wholesale financial institutions or for their employees, agents, or affiliates.</text></paragraph></subsection> <subsection id="H6764DB1D4DE97741777D61B2C6AAEF8"><enum>(d)</enum><header>Membership criteria</header> <paragraph id="H389D950D430BCC7CB24AD08647E6DF5"><enum>(1)</enum><header>In general</header><text>The Association may establish criteria for membership which shall include standards for integrity, personal qualifications, education, training, and experience.</text></paragraph> <paragraph id="H962A8AEA4436368C4362DAB272AEE3D"><enum>(2)</enum><header>Minimum standard</header><text>In establishing criteria under paragraph (1), the Association shall consider the highest levels of insurance producer qualifications established under the licensing laws of the States.</text></paragraph></subsection> <subsection id="H9131A68E47AA3064816F0E8D6E65EBB"><enum>(e)</enum><header>Effect of membership</header><text>Membership in the Association shall entitle the member to licensure in each State for which the member pays the requisite fees, including licensing fees and, where applicable, bonding requirements, set by such State.</text></subsection> <subsection id="HD2C04A8E44F41DF33B674B898FB403C"><enum>(f)</enum><header>Annual renewal</header><text>Membership in the Association shall be renewed on an annual basis.</text></subsection> <subsection id="HAAF103E7421214BCDBDD8DB5C659D79"><enum>(g)</enum><header>Continuing education</header><text>The Association shall establish, as a condition of membership, continuing education requirements which shall be comparable to or greater than the continuing education requirements under the licensing laws of a majority of the States.</text></subsection> <subsection id="HE90837574E027FA1DF09A09CDA99087"><enum>(h)</enum><header>Suspension and revocation</header><text>The Association may—</text> <paragraph id="H2392CD1449EF6CA9359315BDBA2000C"><enum>(1)</enum><text>inspect and examine the records and offices of the members of the Association to determine compliance with the criteria for membership established by the Association; and</text></paragraph> <paragraph id="HDE6B9FD9411E8E57E698028044D5359"><enum>(2)</enum><text>suspend or revoke the membership of an insurance producer if—</text> <subparagraph id="HC77F331446EDAE6147598DADC4B1FB5"><enum>(A)</enum><text>the producer fails to meet the applicable membership criteria of the Association; or</text></subparagraph> <subparagraph id="HC4DB72EB4B2715ADACCE7B91F4F9F1C"><enum>(B)</enum><text>the producer has been subject to disciplinary action pursuant to a final adjudicatory proceeding under the jurisdiction of a State insurance regulator, and the Association concludes that retention of membership in the Association would not be in the public interest.</text></subparagraph></paragraph></subsection> <subsection id="HA473ED79486B5F61EEB2ADA42EFACB6"><enum>(i)</enum><header>Office of consumer complaints</header> <paragraph id="HFD8B3D52492B283FD6A5019CC1DA5E9"><enum>(1)</enum><header>In general</header><text>The Association shall establish an office of consumer complaints that shall—</text> <subparagraph id="H7887AD7140F272F75B163DBE60F0195"><enum>(A)</enum><text>receive and investigate complaints from both consumers and State insurance regulators related to members of the Association; and</text></subparagraph> <subparagraph id="H741C03E64FB1D0C0A89EA187E78F8F6"><enum>(B)</enum><text>recommend to the Association any disciplinary actions that the office considers appropriate, to the extent that any such recommendation is not inconsistent with State law.</text></subparagraph></paragraph> <paragraph id="H62C5EFE04187AE7E40D08CA7DE42314"><enum>(2)</enum><header>Records and referrals</header><text>The office of consumer complaints of the Association shall—</text> <subparagraph id="H84F60BF04EC27B6B338CB5AF8238ED8"><enum>(A)</enum><text>maintain records of all complaints received in accordance with paragraph (1) and make such records available to the NAIC and to each State insurance regulator for the State of residence of the consumer who filed the complaint; and</text></subparagraph> <subparagraph id="H9A4169B247C81FB9212850B0873653C"><enum>(B)</enum><text>refer, when appropriate, any such complaint to any appropriate State insurance regulator.</text></subparagraph></paragraph> <paragraph id="H82D57F374EA4C8FE3ACBB0B7F1584DC"><enum>(3)</enum><header>Telephone and other access</header><text>The office of consumer complaints shall maintain a toll-free telephone number for the purpose of this subsection and, as practicable, other alternative means of communication with consumers, such as an Internet home page.</text></paragraph></subsection></section> <section id="H64515D9A4409E6918232D98EE3F509B"><enum>326.</enum><header>Board of Directors</header> <subsection id="HA9C8B77F4B28C816B343C980444932D"><enum>(a)</enum><header>Establishment</header><text>There is established the board of directors of the Association (hereafter in this subtitle referred to as the <quote>Board</quote>) for the purpose of governing and supervising the activities of the Association and the members of the Association.</text></subsection> <subsection id="H9B91570840D5834DF2A589B79C00EF0"><enum>(b)</enum><header>Powers</header><text>The Board shall have such powers and authority as may be specified in the bylaws of the Association.</text></subsection> <subsection id="H4A0F6F634539D50AF671DDB97289CAA"><enum>(c)</enum><header>Composition</header> <paragraph id="H17C43DEC4870331E9465CBA522F1374"><enum>(1)</enum><header>Members</header><text>The Board shall be composed of 7 members appointed by the NAIC.</text></paragraph> <paragraph id="H03D2A7084D24D3EDB591969B716BACD"><enum>(2)</enum><header>Requirement</header><text>At least 4 of the members of the Board shall have significant experience with the regulation of commercial lines of insurance in at least 1 of the 20 States in which the greatest total dollar amount of commercial-lines insurance is placed in the United States.</text></paragraph> <paragraph id="H5CEA2ABC487FC83452C632A384E739A"><enum>(3)</enum><header>Initial Board membership</header> <subparagraph id="HCBFD7D4643AD9EB0AED13B83EDAAD02"><enum>(A)</enum><header>In general</header><text>If, by the end of the 2-year period beginning on the date of enactment of this Act, the NAIC has not appointed the initial 7 members of the Board of the Association, the initial Board shall consist of the 7 State insurance regulators of the 7 States with the greatest total dollar amount of commercial-lines insurance in place as of the end of such period.</text></subparagraph> <subparagraph id="H79A0F5884745E69B07EB5191BB4DBEB"><enum>(B)</enum><header>Alternate composition</header><text>If any of the State insurance regulators described in subparagraph (A) declines to serve on the Board, the State insurance regulator with the next greatest total dollar amount of commercial-lines insurance in place, as determined by the NAIC as of the end of such period, shall serve as a member of the Board.</text></subparagraph> <subparagraph id="H2B61908648F8DF764EAF6185D105C70"><enum>(C)</enum><header>Inoperability</header><text>If fewer than 7 State insurance regulators accept appointment to the Board, the Association shall be established without NAIC oversight pursuant to section 332.</text></subparagraph></paragraph></subsection> <subsection id="H8C193100407199F25FDE349BC316941"><enum>(d)</enum><header>Terms</header><text>The term of each director shall, after the initial appointment of the members of the Board, be for 3 years, with <fraction>1/3</fraction> of the directors to be appointed each year.</text></subsection> <subsection id="H5CBECEA74C5CFFDE1684B0B243D277C"><enum>(e)</enum><header>Board vacancies</header><text>A vacancy on the Board shall be filled in the same manner as the original appointment of the initial Board for the remainder of the term of the vacating member.</text></subsection> <subsection id="H86E30AF44436E2E13C98E598B0553D8"><enum>(f)</enum><header>Meetings</header><text>The Board shall meet at the call of the chairperson, or as otherwise provided by the bylaws of the Association.</text></subsection></section> <section id="H06F34C6B4E86F4CC7C696082CF304ED"><enum>327.</enum><header>Officers</header> <subsection id="H430A049A433CA514EC97CEB55B79B36"><enum>(a)</enum><header>In general</header> <paragraph id="H8BFF30CC49A5389581E2E8A0C6AC0CC"><enum>(1)</enum><header>Positions</header><text>The officers of the Association shall consist of a chairperson and a vice chairperson of the Board, a president, secretary, and treasurer of the Association, and such other officers and assistant officers as may be deemed necessary.</text></paragraph> <paragraph id="H4A11EA3E44B0C37184C184804BC3B23"><enum>(2)</enum><header>Manner of selection</header><text>Each officer of the Board and the Association shall be elected or appointed at such time and in such manner and for such terms not exceeding 3 years as may be prescribed in the bylaws of the Association.</text></paragraph></subsection> <subsection id="H0866C3F34BC65CEF81C52AB3E21BC16"><enum>(b)</enum><header>Criteria for chairperson</header><text>Only individuals who are members of the NAIC shall be eligible to serve as the chairperson of the board of directors.</text></subsection></section> <section id="H6D6D21BB4E06103418A17893274C48D"><enum>328.</enum><header>Bylaws, rules, and disciplinary action</header> <subsection id="HF914B9A74EF0B7664B2C95A9DF54B45"><enum>(a)</enum><header>Adoption and amendment of bylaws</header> <paragraph id="H90022919442D8EFB157C40AEC5FAFF1"><enum>(1)</enum><header>Copy required to be filed with the NAIC</header><text>The board of directors of the Association shall file with the NAIC a copy of the proposed bylaws or any proposed amendment to the bylaws, accompanied by a concise general statement of the basis and purpose of such proposal.</text></paragraph> <paragraph id="H52CC621F40B3D6B12684BD8E9F00B59"><enum>(2)</enum><header>Effective date</header><text>Except as provided in paragraph (3), any proposed bylaw or proposed amendment shall take effect—</text> <subparagraph id="H138FA78C4D662B4EC4A6CCBAA71EE8B"><enum>(A)</enum><text>30 days after the date of the filing of a copy with the NAIC;</text></subparagraph> <subparagraph id="H8D0F681D4DA1A40D4562C19CFE61D4E"><enum>(B)</enum><text>upon such later date as the Association may designate; or</text></subparagraph> <subparagraph id="H2CBCDD604EAAD5BCBF523FA736C885A"><enum>(C)</enum><text>upon such earlier date as the NAIC may determine.</text></subparagraph></paragraph> <paragraph id="H87F77F4E4A930721BA3F239F99A1951"><enum>(3)</enum><header>Disapproval by the NAIC</header><text>Notwithstanding paragraph (2), a proposed bylaw or amendment shall not take effect if, after public notice and opportunity to participate in a public hearing—</text> <subparagraph id="H18A11C9F446688957004B89500B45C5"><enum>(A)</enum><text>the NAIC disapproves such proposal as being contrary to the public interest or contrary to the purposes of this subtitle and provides notice to the Association setting forth the reasons for such disapproval; or</text></subparagraph> <subparagraph id="H92C8BEEE4691AC6803B92891E102FCE"><enum>(B)</enum><text>the NAIC finds that such proposal involves a matter of such significant public interest that public comment should be obtained, in which case it may, after notifying the Association in writing of such finding, require that the procedures set forth in subsection (b) be followed with respect to such proposal, in the same manner as if such proposed bylaw change were a proposed rule change within the meaning of such subsection.</text></subparagraph></paragraph></subsection> <subsection id="H34B619654BC31BEA74E4B7BEE784C14"><enum>(b)</enum><header>Adoption and amendment of rules</header> <paragraph id="H816A539B4248CE9EC99AFDA858A636D"><enum>(1)</enum><header>Filing proposed regulations with the NAIC</header> <subparagraph id="H7CD291D5402F581942F636B34FF409B"><enum>(A)</enum><header>In general</header><text>The board of directors of the Association shall file with the NAIC a copy of any proposed rule or any proposed amendment to a rule of the Association which shall be accompanied by a concise general statement of the basis and purpose of such proposal.</text></subparagraph> <subparagraph id="H4622E1364B84186BB61E8684220668D"><enum>(B)</enum><header>Other rules and amendments ineffective</header><text>No proposed rule or amendment shall take effect unless approved by the NAIC or otherwise permitted in accordance with this paragraph.</text></subparagraph></paragraph> <paragraph id="HF205BDDB4803FFE06B34E0ABC21115F"><enum>(2)</enum><header>Initial consideration by the NAIC</header><text>Not later than 35 days after the date of publication of notice of filing of a proposal, or before the end of such longer period not to exceed 90 days as the NAIC may designate after such date, if the NAIC finds such longer period to be appropriate and sets forth its reasons for so finding, or as to which the Association consents, the NAIC shall—</text> <subparagraph id="HFA6128DD4A8AE5707B4852891FDAE24"><enum>(A)</enum><text>by order approve such proposed rule or amendment; or</text></subparagraph> <subparagraph id="H3CBD50A144E0BBFA45BDB1875006A5D"><enum>(B)</enum><text>institute proceedings to determine whether such proposed rule or amendment should be modified or disapproved.</text></subparagraph></paragraph> <paragraph id="H8E21E878401B5180ACE35B8CC110048"><enum>(3)</enum><header>NAIC proceedings</header> <subparagraph id="HC4D5816649D57A8B4F9137B2A8B4321"><enum>(A)</enum><header>In general</header><text>Proceedings instituted by the NAIC with respect to a proposed rule or amendment pursuant to paragraph (2) shall—</text> <clause id="H1E464071488615668BC34E8DBABC680"><enum>(i)</enum><text>include notice of the grounds for disapproval under consideration;</text></clause> <clause id="H4A525E254AD2AE4EB10576B50289E05"><enum>(ii)</enum><text>provide opportunity for hearing; and</text></clause> <clause id="HDDB21CEB45D72D67A05791B23DADD2E"><enum>(iii)</enum><text>be concluded not later than 180 days after the date of the Association’s filing of such proposed rule or amendment.</text></clause></subparagraph> <subparagraph id="H2F575EED40D3AF56ACBFA0AFF7C4F2B"><enum>(B)</enum><header>Disposition of proposal</header><text>At the conclusion of any proceeding under subparagraph (A), the NAIC shall, by order, approve or disapprove the proposed rule or amendment.</text></subparagraph> <subparagraph id="HDCAD258E4C739E909653B1870805B50"><enum>(C)</enum><header>Extension of time for consideration</header><text>The NAIC may extend the time for concluding any proceeding under subparagraph (A) for—</text> <clause id="H426032A44FBD01A2333C589A10E8611"><enum>(i)</enum><text>not more than 60 days if the NAIC finds good cause for such extension and sets forth its reasons for so finding; or</text></clause> <clause id="H1A54CC65471F00EE2AB9B9A9CCF49EE"><enum>(ii)</enum><text>for such longer period as to which the Association consents.</text></clause></subparagraph></paragraph> <paragraph id="HFFB829134D54B0C774726DB9B82115F"><enum>(4)</enum><header>Standards for review</header> <subparagraph id="H31A8F1D44377B2CD42A657B846E6CE1"><enum>(A)</enum><header>Grounds for approval</header><text>The NAIC shall approve a proposed rule or amendment if the NAIC finds that the rule or amendment is in the public interest and is consistent with the purposes of this Act.</text></subparagraph> <subparagraph id="H44BF77374EC609ADCFC60EBFEEE9C46"><enum>(B)</enum><header>Approval before end of notice period</header><text>The NAIC shall not approve any proposed rule before the end of the 30-day period beginning on the date on which the Association files proposed rules or amendments in accordance with paragraph (1), unless the NAIC finds good cause for so doing and sets forth the reasons for so finding.</text></subparagraph></paragraph> <paragraph id="H93EBA3924D00DA01FFA1D09DA86F406"><enum>(5)</enum><header>Alternate procedure</header> <subparagraph id="H957F902F4558D39CEBE2509CE05331A"><enum>(A)</enum><header>In general</header><text>Notwithstanding any provision of this subsection other than subparagraph (B), a proposed rule or amendment relating to the administration or organization of the Association shall take effect—</text> <clause id="H57361E154522BAC9CFCA658F2FCDD4F"><enum>(i)</enum><text>upon the date of filing with the NAIC, if such proposed rule or amendment is designated by the Association as relating solely to matters which the NAIC, consistent with the public interest and the purposes of this subsection, determines by rule do not require the procedures set forth in this paragraph; or</text></clause> <clause id="HCDE59D3746F08F5B4756C18CC22C3AA"><enum>(ii)</enum><text>upon such date as the NAIC shall for good cause determine.</text></clause></subparagraph> <subparagraph id="H2F0766064DE3118CC068859FC7B7780"><enum>(B)</enum><header>Abrogation by the NAIC</header> <clause id="H95D1B2B2421C4AACC0DA2B8830B6BB0"><enum>(i)</enum><header>In general</header><text>At any time within 60 days after the date of filing of any proposed rule or amendment under subparagraph (A)(i) or clause (ii) of this subparagraph, the NAIC may repeal such rule or amendment and require that the rule or amendment be refiled and reviewed in accordance with this paragraph, if the NAIC finds that such action is necessary or appropriate in the public interest, for the protection of insurance producers or policyholders, or otherwise in furtherance of the purposes of this subtitle.</text></clause> <clause id="H49CAEBEC4D1A33E85F6FE38100DC8FB"><enum>(ii)</enum><header>Effect of reconsideration by the NAIC</header><text>Any action of the NAIC pursuant to clause (i) shall—</text> <subclause id="H4F4D6E49424B8B2FAC298E96D25DC6D"><enum>(I)</enum><text>not affect the validity or force of a rule change during the period such rule or amendment was in effect; and</text></subclause> <subclause id="HA9BC50B044C2DFF9A803C887F5E508E"><enum>(II)</enum><text>not be considered to be a final action.</text></subclause></clause></subparagraph></paragraph></subsection> <subsection id="H4354101A4544AC80ACB25997E987DEF"><enum>(c)</enum><header>Action required by the NAIC</header><text>The NAIC may, in accordance with such rules as the NAIC determines to be necessary or appropriate to the public interest or to carry out the purposes of this subtitle, require the Association to adopt, amend, or repeal any bylaw, rule or amendment of the Association, whenever adopted.</text></subsection> <subsection id="H687222864A35029072D85F84B6A6CF4"><enum>(d)</enum><header>Disciplinary action by the Association</header> <paragraph id="H3D83CA14400192BDDAD367B23BA379A"><enum>(1)</enum><header>Specification of charges</header><text>In any proceeding to determine whether membership shall be denied, suspended, revoked, or not renewed (hereafter in this section referred to as a <quote>disciplinary action</quote>), the Association shall bring specific charges, notify such member of such charges, give the member an opportunity to defend against the charges, and keep a record.</text></paragraph> <paragraph id="H802274D0403AD71264F690B7BBE591F"><enum>(2)</enum><header>Supporting statement</header><text>A determination to take disciplinary action shall be supported by a statement setting forth—</text> <subparagraph id="H3D715E1448BA448D65A008B100ECD5C"><enum>(A)</enum><text>any act or practice in which such member has been found to have been engaged;</text></subparagraph> <subparagraph id="H3EA08C384C1682E2B90D3B91D90D23D"><enum>(B)</enum><text>the specific provision of this subtitle, the rules or regulations under this subtitle, or the rules of the Association which any such act or practice is deemed to violate; and</text></subparagraph> <subparagraph id="H9377C9A34BADC6099AB2DE908C14BF1"><enum>(C)</enum><text>the sanction imposed and the reason for such sanction.</text></subparagraph></paragraph></subsection> <subsection id="HEA4523134285507530DB5A8D321907B"><enum>(e)</enum><header>NAIC review of disciplinary action</header> <paragraph id="HDFFD8768416D120CF622FB854285D5B"><enum>(1)</enum><header>Notice to the NAIC</header><text>If the Association orders any disciplinary action, the Association shall promptly notify the NAIC of such action.</text></paragraph> <paragraph id="H62C136E14174A39744A4069DBCB21B7"><enum>(2)</enum><header>Review by the NAIC</header><text>Any disciplinary action taken by the Association shall be subject to review by the NAIC—</text> <subparagraph id="H8030858347B0AEF03F7E84957CBB26B"><enum>(A)</enum><text>on the NAIC’s own motion; or</text></subparagraph> <subparagraph id="H360AF57E408D4B35B0E8F4B7D480D1E"><enum>(B)</enum><text>upon application by any person aggrieved by such action if such application is filed with the NAIC not more than 30 days after the later of—</text> <clause id="H60AF5AD44AC3A66942177BB8471811D"><enum>(i)</enum><text>the date the notice was filed with the NAIC pursuant to paragraph (1); or</text></clause> <clause id="H87ACE25D4D2C23B408BD57925425FAC"><enum>(ii)</enum><text>the date the notice of the disciplinary action was received by such aggrieved person.</text></clause></subparagraph></paragraph></subsection> <subsection id="H5823E736422334FF3D68E0B096B6369"><enum>(f)</enum><header>Effect of review</header><text>The filing of an application to the NAIC for review of a disciplinary action, or the institution of review by the NAIC on the NAIC’s own motion, shall not operate as a stay of disciplinary action unless the NAIC otherwise orders.</text></subsection> <subsection id="H7870FFDF480A8023ECCD40A94F5957D"><enum>(g)</enum><header>Scope of review</header> <paragraph id="H3708D0C248101153996323BA74B6FDF"><enum>(1)</enum><header>In general</header><text>In any proceeding to review such action, after notice and the opportunity for hearing, the NAIC shall—</text> <subparagraph id="HDAB50ABA42A902F46C261FB0B7B01FD"><enum>(A)</enum><text>determine whether the action should be taken;</text></subparagraph> <subparagraph id="HAE271EF8426CB5EE4BF410A48D2718D"><enum>(B)</enum><text>affirm, modify, or rescind the disciplinary sanction; or</text></subparagraph> <subparagraph id="HEE2C750840F2EA0BD1DD51A69FEADE3"><enum>(C)</enum><text>remand to the Association for further proceedings.</text></subparagraph></paragraph> <paragraph id="H19723A514E93D5F5F7E21BA91C09F4E"><enum>(2)</enum><header>Dismissal of review</header><text>The NAIC may dismiss a proceeding to review disciplinary action if the NAIC finds that—</text> <subparagraph id="HB99EB6E445A1441737BA79991E7651A"><enum>(A)</enum><text>the specific grounds on which the action is based exist in fact;</text></subparagraph> <subparagraph id="H188E575D413AF9AC37A2D39B64DF375"><enum>(B)</enum><text>the action is in accordance with applicable rules and regulations; and</text></subparagraph> <subparagraph id="HE524767D4C3AE3C839A0E7AA1CB5E9F"><enum>(C)</enum><text>such rules and regulations are, and were, applied in a manner consistent with the purposes of this subtitle.</text></subparagraph></paragraph></subsection></section> <section id="HC4FAB0764B1124E7A0DC98A69588F5E"><enum>329.</enum><header>Assessments</header> <subsection id="H31E69CD94D91C637E741F2BA8661CAE"><enum>(a)</enum><header>Insurance producers Subject to assessment</header><text>The Association may establish such application and membership fees as the Association finds necessary to cover the costs of its operations, including fees made reimbursable to the NAIC under subsection (b), except that, in setting such fees, the Association may not discriminate against smaller insurance producers.</text></subsection> <subsection id="H2FE020314AA4499B798026B99EC0571"><enum>(b)</enum><header>NAIC assessments</header><text>The NAIC may assess the Association for any costs that the NAIC incurs under this subtitle.</text></subsection></section> <section id="H68E825CD47AAF1414CB5B3B9AE03C71"><enum>330.</enum><header>Functions of the NAIC</header> <subsection id="H2563658F473B43E42C2072B2CAA625B"><enum>(a)</enum><header>Administrative procedure</header><text>Determinations of the NAIC, for purposes of making rules pursuant to section 328, shall be made after appropriate notice and opportunity for a hearing and for submission of views of interested persons.</text></subsection> <subsection id="HEAA99C0F487F0F0D0C90E7B065701BE"><enum>(b)</enum><header>Examinations and reports</header> <paragraph id="H6596D0284E7C8B8A241EBFAC7600E4D"><enum>(1)</enum><header>Examinations</header><text>The NAIC may make such examinations and inspections of the Association and require the Association to furnish to the NAIC such reports and records or copies thereof as the NAIC may consider necessary or appropriate in the public interest or to effectuate the purposes of this subtitle.</text></paragraph> <paragraph id="H453C3B9C41BE8B11DA6B8E9773C5A5D"><enum>(2)</enum><header>Report by Association</header><text>As soon as practicable after the close of each fiscal year, the Association shall submit to the NAIC a written report regarding the conduct of its business, and the exercise of the other rights and powers granted by this subtitle, during such fiscal year. Such report shall include financial statements setting forth the financial position of the Association at the end of such fiscal year and the results of its operations (including the source and application of its funds) for such fiscal year. The NAIC shall transmit such report to the President and the Congress with such comment thereon as the NAIC determines to be appropriate.</text></paragraph></subsection></section> <section id="HB70791C94C693872DB78F2B2B7C6049"><enum>331.</enum><header>Liability of the Association and the directors, officers, and employees of the Association</header> <subsection id="H4E9005AD43D978A5FB28FE95ACC86D0"><enum>(a)</enum><header>In general</header><text>The Association shall not be deemed to be an insurer or insurance producer within the meaning of any State law, rule, regulation, or order regulating or taxing insurers, insurance producers, or other entities engaged in the business of insurance, including provisions imposing premium taxes, regulating insurer solvency or financial condition, establishing guaranty funds and levying assessments, or requiring claims settlement practices.</text></subsection> <subsection id="HD6B92E544EDDE5B3E7C28B98B5F488C"><enum>(b)</enum><header>Liability of the Association, its directors, officers, and employees</header><text>Neither the Association nor any of its directors, officers, or employees shall have any liability to any person for any action taken or omitted in good faith under or in connection with any matter subject to this subtitle.</text></subsection></section> <section id="H60BDEB314478D6C36C1A29972010CC3"><enum>332.</enum><header>Elimination of NAIC oversight</header> <subsection id="HAE30A7FD475B78879EE1F1AD8B1C15E"><enum>(a)</enum><header>In general</header><text>The Association shall be established without NAIC oversight and the provisions set forth in section 324, subsections (a), (b), (c), and (e) of section 328, and sections 329(b) and 330 of this subtitle shall cease to be effective if, at the end of the 2-year period beginning on the date on which the provisions of this subtitle take effect pursuant to section 321—</text> <paragraph id="HD9A3B3BC4032DC0E096280BE48C318F"><enum>(1)</enum><text>at least a majority of the States representing at least 50 percent of the total United States commercial-lines insurance premiums have not satisfied the uniformity or reciprocity requirements of subsections (a), (b), and (c) of section 321; and</text></paragraph> <paragraph id="H193E5FE145CB9E22BBE4DC87ACDE5B5"><enum>(2)</enum><text>the NAIC has not approved the Association’s bylaws as required by section 328 or is unable to operate or supervise the Association, or the Association is not conducting its activities as required under this Act.</text></paragraph></subsection> <subsection id="H35AC304C4708EF8C2F1EAFA7BC4620A"><enum>(b)</enum><header>Board appointments</header><text>If the repeals required by subsection (a) are implemented, the following shall apply:</text> <paragraph id="HBADA23ED4C47E9482CC8AEBA7D03FF0"><enum>(1)</enum><header>General appointment power</header><text>The President, with the advice and consent of the Senate, shall appoint the members of the Association’s Board established under section 326 from lists of candidates recommended to the President by the National Association of Insurance Commissioners.</text></paragraph> <paragraph id="H2E26C6654CA513EB8C60F3A7F154E98"><enum>(2)</enum><header>Procedures for obtaining National Association of Insurance Commissioners appointment recommendations</header> <subparagraph id="HEE8B01F94459790945A841AAECECB3F"><enum>(A)</enum><header>Initial determination and recommendations</header><text>After the date on which the provisions of subsection (a) take effect, the NAIC shall, not later than 60 days thereafter, provide a list of recommended candidates to the President. If the NAIC fails to provide a list by that date, or if any list that is provided does not include at least 14 recommended candidates or comply with the requirements of section 326(c), the President shall, with the advice and consent of the Senate, make the requisite appointments without considering the views of the NAIC.</text></subparagraph> <subparagraph id="HC4C765A14F9EE88C6BFEAFAF53C87FE"><enum>(B)</enum><header>Subsequent appointments</header><text>After the initial appointments, the NAIC shall provide a list of at least 6 recommended candidates for the Board to the President by January 15 of each subsequent year. If the NAIC fails to provide a list by that date, or if any list that is provided does not include at least 6 recommended candidates or comply with the requirements of section 326(c), the President, with the advice and consent of the Senate, shall make the requisite appointments without considering the views of the NAIC.</text></subparagraph> <subparagraph id="H81810AAB4822039B127B1E8978D9824"><enum>(C)</enum><header>Presidential oversight</header> <clause id="H0DFB6B4142447B913B25D49DE6C7F2F"><enum>(i)</enum><header>Removal</header><text>If the President determines that the Association is not acting in the interests of the public, the President may remove the entire existing Board for the remainder of the term to which the members of the Board were appointed and appoint, with the advice and consent of the Senate, new members to fill the vacancies on the Board for the remainder of such terms.</text></clause> <clause id="H91D1866042985F5C2C9CE69764DDFC3"><enum>(ii)</enum><header>Suspension of rules or actions</header><text>The President, or a person designated by the President for such purpose, may suspend the effectiveness of any rule, or prohibit any action, of the Association which the President or the designee determines is contrary to the public interest.</text></clause></subparagraph></paragraph></subsection> <subsection id="H49ADD7E54B4731E7423CF7A1AFC17D8"><enum>(c)</enum><header>Annual report</header><text>As soon as practicable after the close of each fiscal year, the Association shall submit to the President and to the Congress a written report relative to the conduct of its business, and the exercise of the other rights and powers granted by this subtitle, during such fiscal year. Such report shall include financial statements setting forth the financial position of the Association at the end of such fiscal year and the results of its operations (including the source and application of its funds) for such fiscal year.</text></subsection></section> <section id="H0AEC862F4496865D95AE76B4C36E7F6"><enum>333.</enum><header>Relationship to State law</header> <subsection id="H48E44DBB452D63C6A38CAB91382EC22"><enum>(a)</enum><header>Preemption of State laws</header><text>State laws, regulations, provisions, or other actions purporting to regulate insurance producers shall be preempted as provided in subsection (b).</text></subsection> <subsection id="H46DA6F6342EC2A22BD5CD0AA1FBB5E7"><enum>(b)</enum><header>Prohibited actions</header><text>No State shall—</text> <paragraph id="H92886B05400EAA0E57BA26A67FCFD8B"><enum>(1)</enum><text>impede the activities of, take any action against, or apply any provision of law or regulation to, any insurance producer because that insurance producer or any affiliate plans to become, has applied to become, or is a member of the Association;</text></paragraph> <paragraph id="HA062B60644A00C98EFA3B489F79470C"><enum>(2)</enum><text>impose any requirement upon a member of the Association that it pay different fees to be licensed or otherwise qualified to do business in that State, including bonding requirements, based on its residency;</text></paragraph> <paragraph id="H4E8CE754400E207F668B4DB9E5E6B49"><enum>(3)</enum><text>impose any licensing, appointment, integrity, personal or corporate qualifications, education, training, experience, residency, or continuing education requirement upon a member of the Association that is different from the criteria for membership in the Association or renewal of such membership, except that counter-signature requirements imposed on nonresident producers shall not be deemed to have the effect of limiting or conditioning a producer’s activities because of its residence or place of operations under this section; or</text></paragraph> <paragraph id="HF579C0E949BCB94858CEBD8868B7E99"><enum>(4)</enum><text>implement the procedures of such State’s system of licensing or renewing the licenses of insurance producers in a manner different from the authority of the Association under section 325.</text></paragraph></subsection> <subsection id="H2A7EFB81480E3CD7070B80936EBDB34"><enum>(c)</enum><header>Savings provision</header><text>Except as provided in subsections (a) and (b), no provision of this section shall be construed as altering or affecting the continuing effectiveness of any law, regulation, provision, or other action of any State which purports to regulate insurance producers, including any such law, regulation, provision, or action which purports to regulate unfair trade practices or establish consumer protections, including countersignature laws.</text></subsection></section> <section id="H84A03B094CFD9DA896739EA5CB94C23"><enum>334.</enum><header>Coordination with other regulators</header> <subsection id="H12C7B775457302412DB709A7BEBA21B"><enum>(a)</enum><header>Coordination with State insurance regulators</header><text>The Association shall have the authority to—</text> <paragraph id="H02371C614BBF82F910598F943493FA8"><enum>(1)</enum><text>issue uniform insurance producer applications and renewal applications that may be used to apply for the issuance or removal of State licenses, while preserving the ability of each State to impose such conditions on the issuance or renewal of a license as are consistent with section 333;</text></paragraph> <paragraph id="HCE4B3D9745F24E4E7CDF1883852EE4D"><enum>(2)</enum><text>establish a central clearinghouse through which members of the Association may apply for the issuance or renewal of licenses in multiple States; and</text></paragraph> <paragraph id="H891D93A643E0B4628B02C69FA22E139"><enum>(3)</enum><text>establish or utilize a national database for the collection of regulatory information concerning the activities of insurance producers.</text></paragraph></subsection> <subsection id="H023DBC3645BB7C62D06D7A81FB3C4FE"><enum>(b)</enum><header>Coordination with the National Association of Securities Dealers</header><text>The Association shall coordinate with the National Association of Securities Dealers in order to ease any administrative burdens that fall on persons that are members of both associations, consistent with the purposes of this subtitle and the Federal securities laws.</text></subsection></section> <section id="H8381907C4BD6F9E323949F95F8C9060"><enum>335.</enum><header>Judicial review</header> <subsection id="H6B58A53A4B9506E85A96FFB63246B2C"><enum>(a)</enum><header>Jurisdiction</header><text>The appropriate United States district court shall have exclusive jurisdiction over litigation involving the Association, including disputes between the Association and its members that arise under this subtitle. Suits brought in State court involving the Association shall be deemed to have arisen under Federal law and therefore be subject to jurisdiction in the appropriate United States district court.</text></subsection> <subsection id="HBBD3F243480A244C44F77D928CF0F5F"><enum>(b)</enum><header>Exhaustion of remedies</header><text>An aggrieved person shall be required to exhaust all available administrative remedies before the Association and the NAIC before it may seek judicial review of an Association decision.</text></subsection> <subsection id="H9A4DE4F94B02BD51B5CEABB22DAF8FE"><enum>(c)</enum><header>Standards of review</header><text>The standards set forth in section 553 of title 5, United States Code, shall be applied whenever a rule or bylaw of the Association is under judicial review, and the standards set forth in section 554 of title 5, United States Code, shall be applied whenever a disciplinary action of the Association is judicially reviewed.</text></subsection></section> <section id="HB23B082C4D7B920ABEFE2A9437B40D5"><enum>336.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this subtitle, the following definitions shall apply:</text> <paragraph id="HDFEEA2C441E46E47E54C1491A4D748B"><enum>(1)</enum><header>Home State</header><text>The term <term>home State</term> means the State in which the insurance producer maintains its principal place of residence and is licensed to act as an insurance producer.</text></paragraph> <paragraph id="H2E67EE3B45DAB397173A39B5ADC599C"><enum>(2)</enum><header>Insurance</header><text>The term <term>insurance</term> means any product, other than title insurance, defined or regulated as insurance by the appropriate State insurance regulatory authority.</text></paragraph> <paragraph id="HE331B86B41581D463D9E259E705E28A"><enum>(3)</enum><header>Insurance producer</header><text>The term <term>insurance producer</term> means any insurance agent or broker, surplus lines broker, insurance consultant, limited insurance representative, and any other person that solicits, negotiates, effects, procures, delivers, renews, continues or binds policies of insurance or offers advice, counsel, opinions or services related to insurance.</text></paragraph> <paragraph id="H3C8BEFF7439C59D969D733AEDC8F166"><enum>(4)</enum><header>State</header><text>The term <term>State</term> includes any State, the District of Columbia, American Samoa, Guam, Puerto Rico, and the United States Virgin Islands.</text></paragraph> <paragraph id="H32D27B6245F29345FF169E84002F21D"><enum>(5)</enum><header>State law</header><text>The term <term>State law</term> includes all laws, decisions, rules, regulations, or other State action having the effect of law, of any State. A law of the United States applicable only to the District of Columbia shall be treated as a State law rather than a law of the United States.</text></paragraph></section></subtitle> <enum>IV</enum><header>Unitary savings and loan holding companies</header> <section id="HBD09B688456CD57B6520819D61E3F3B"><enum>401.</enum><header>Prevention of creation of new S&L holding companies with commercial affiliates</header> <subsection id="HF63633F24EA77752D5654A82C3D4947"><enum>(a)</enum><header>In general</header><text>Section 10(c) of the <act-name parsable-cite="HOLA">Home Owners’ Loan Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/12/1467a(c)">12 U.S.C. 1467a(c)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block act-name="Home Owners’ Loan Act" id="H476B1B43468994D684F75CB961AA35A"> <paragraph id="HA3A365F949F3714231010BA1C8C6F91"><enum>(9)</enum><header>Prevention of new affiliations between S&L holding companies and commercial firms</header> <subparagraph id="H46660D4A4AF1C5D248F8BF8A00D64FA"><enum>(A)</enum><header>In general</header><text>Notwithstanding paragraph (3), no company may directly or indirectly, including through any merger, consolidation, or other type of business combination, acquire control of a savings association after October 7, 1998, unless the company is engaged, directly or indirectly (including through a subsidiary other than a savings association), only in activities that are permitted—</text> <clause id="H7035735448F72BE0E4911BB7CEEA85F"><enum>(i)</enum><text>under paragraph (1)(C) or (2); or</text></clause> <clause id="H42274E2946F2AC802976F2815543BED"><enum>(ii)</enum><text>for financial holding companies under section 6(c) of the <act-name parsable-cite="BHC65">Bank Holding Company Act of 1956</act-name>.</text></clause></subparagraph> <subparagraph id="H6ECA47DF4A4BA335F0783F81C25307D"><enum>(B)</enum><header>Prevention of new commercial affiliations</header><text>Notwithstanding paragraph (3), no savings and loan holding