1. Short title
This Act may be cited as the “Systemic Risk Designation Improvement Act of 2014”.
Systemic Risk Designation Improvement Act of 2014
A BILL
To amend the Dodd-Frank Wall Street Reform and Consumer Protection Act to specify when bank holding companies may be subject to certain enhanced supervision, and for other purposes.
2. Table of contents
The table of contents for the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.) is amended by striking the item relating to section 113 and inserting the following:
3. Revisions to council authority
Purposes and duties— Section 112 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5322) is amended in subsection (a)(2)(I) by inserting before the semicolon “, which have been the subject of a final determination under section 113”.
Bank holding company designation— Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5323) is amended—
by amending the heading for such section to read as follows: “Authority to require enhanced supervision and regulation of certain nonbank financial companies and certain bank holding companies”;
by redesignating subsections (c), (d), (e), (f), (g), (h), and (i) as subsections (d), (e), (f), (g), (h), (i), and (j), respectively;
by inserting after subsection (b) the following:
“(c) Bank holding companies subject to enhanced supervision and prudential standards under section 165
“(1) Determination—The Council, on a nondelegable basis and by a vote of not fewer than 2⁄3 of the voting members then serving, including an affirmative vote by the Chairperson, may determine that a bank holding company shall be subject to enhanced supervision and prudential standards by the Board of Governors, in accordance with section 165, if the Council determines, based on the considerations in paragraph (2), that material financial distress at the bank holding company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the bank holding company, could pose a threat to the financial stability of the United States.
“(2) Considerations—In making a determination under paragraph (1), the Council shall use the indicator-based measurement approach established by the Basel Committee on Banking Supervision to determine systemic importance, which considers—
“(A) the size of the bank holding company;
“(B) the interconnectedness of the bank holding company;
“(C) the extent of readily available substitutes or financial institution infrastructure for the services of the bank holding company;
“(D) the global cross-jurisdictional activity of the bank holding company; and
“(E) the complexity of the bank holding company.
“(3) Exemption for certain bank holding companies—This subsection shall not apply to a bank holding company with total consolidated assets of $50,000,000,000 or less.”
in subsection (d), as so redesignated—
in paragraph (1)(A), by striking “subsection (a)(2) or (b)(2)” and inserting “subsection (a)(2), (b)(2), or (c)(2)”; and
in paragraph (4), by striking “Subsections (d) through (h)” and inserting “Subsections (e) through (i)”;
in subsections (e), (f), (g), (h), (i), and (j)—
by striking “subsections (a) and (b)” each place such term appears and inserting “subsections (a), (b), and (c)”; and
by striking “nonbank financial company” each place such term appears and inserting “bank holding company for which there has been a determination under subsection (c) or nonbank financial company”;
in subsection (g), as so redesignated, by striking “subsection (e)” and inserting “subsection (f)”;
in subsection (h), as so redesignated, by striking “subsection (a), (b), or (c)” and inserting “subsection (a), (b), (c), or (d)”; and
in subsection (i), as so redesignated, by striking “subsection (d)(2), (e)(3), or (f)(5)” and inserting “subsection (e)(2), (f)(3), or (g)(5)”.
Enhanced supervision— Section 115 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5325) is amended—
in subsection (a)(1), by striking “large, interconnected bank holding companies” and inserting “bank holding companies which have been the subject of a final determination under section 113”;
in subsection (a)(2)—
in subparagraph (A), by striking “or” at the end;
by striking “the Council may” and all that follows through “differentiate” and inserting “the Council may differentiate”; and
by striking subparagraph (B); and
in subsection (b)(3), by striking “subsections (a) and (b) of section 113” each place such term appears and inserting “subsections (a), (b), and (c) of section 113”.
Reports— Section 116(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5326(a)) is amended by striking “with total consolidated assets of $50,000,000,000 or greater” and inserting “which has been the subject of a final determination under section 113”.
Mitigation— Section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5331) is amended—
in subsection (a), by striking “with total consolidated assets of $50,000,000,000 or more” and inserting “which has been the subject of a final determination under section 113”; and
in subsection (c), by striking “subsection (a) or (b) of section 113” and inserting “subsection (a), (b), or (c) of section 113”.
Office of financial research— Section 155 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5345) is amended in subsection (d) by striking “with total consolidated assets of 50,000,000,000 or greater” and inserting “which have been the subject of a final determination under section 113”.
4. Revisions to Board authority
Acquisitions— Section 163 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5363) is amended by striking “with total consolidated assets equal to or greater than $50,000,000,000” each place such term appears and inserting “which has been the subject of a final determination under section 113”.
Management interlocks— Section 164 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5364) is amended by striking “with total consolidated assets equal to or greater than $50,000,000,000” and inserting “which has been the subject of a final determination under section 113”.
Enhanced supervision and prudential standards— Section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365) is amended—
in subsection (a), by striking “with total consolidated assets equal to or greater than $50,000,000,000” and inserting “which have been the subject of a final determination under section 113”;
in subsection (a)(2)—
by striking “(A) In general.—”; and
by striking subparagraph (B);
by striking “subsections (a) and (b) of section 113” each place such term appears and inserting “subsections (a), (b), and (c) of section 113”; and
in subsection (j), by striking “with total consolidated assets equal to or greater than $50,000,000,000” and inserting “which has been the subject of a final determination under section 113”.
Conforming Amendment— The second subsection (s) (relating to “Assessments, Fees, and Other Charges for Certain Companies”) of section 11 of the Federal Reserve Act (12 U.S.C. 248) is amended—
by redesignating such subsection as subsection (t); and
in paragraph (2)—
in subparagraph (A), by striking “having total consolidated assets of $50,000,000,000 or more;” and inserting “which have been the subject of a final determination under section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; and”;
by striking subparagraph (B); and
by redesignating subparagraph (C) as subparagraph (B).
5. Effective date
In general— Subject to subsection (b), the amendments made by this Act shall take effect one year after the date of enactment of this Act.
Presumption of Determination— Notwithstanding subsection (a), with respect to a bank holding company that has been identified by the Financial Stability Board as a Global Systemically Important Financial Institution, the Financial Stability Oversight Council may, upon enactment of this Act, begin proceedings for a determination under section 113(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as added by section 3(b)(3), but the Council may not make a final determination under such section 113(c) with respect to a bank holding company before the effective date described under subsection (a).