H.R. 4790 — what changed
Volcker Rule Regulatory Harmonization Act
From Introduced in House to Reported in House. 2 sections amended and 2 added between Introduced in House and Reported in House.
Section 1 Short title
added This Act may be cited as the “Volcker Rule Regulatory Harmonization Act”.
removed
In general— Section 13(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(b)) is amended—
removed
in the subsection heading, by striking “and Rulemaking” and inserting “, Rulemaking, Examinations, and Enforcement”;
removed
by amending paragraph (2) to read as follows:
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“(2) Rulemaking—The Board shall have sole authority to—
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“(A) issue regulations under this section after the date of the enactment of this paragraph; and
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“(B) amend any regulations issued under this section before, on, or after such date.”
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by adding at the end the following new paragraph:
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“(3) Examination and Enforcement Authority
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“(A) Primary Federal banking agency—The primary Federal banking agency for a banking entity shall have sole authority to conduct examinations of all affiliates of the banking group to ensure compliance with this section and to enforce the requirements of this section. The primary Federal banking agency shall keep the Board informed of all examinations of and any proposed supervisory or enforcement actions against any affiliate of the banking entity and shall ensure that all actions taken against any affiliate of the banking group are consistent with the Board’s interpretation of this section and rules promulgated thereunder.
removed
“(B) Definitions—For purposes of this paragraph, the term primary Federal banking agency means, with respect to any banking group, the appropriate Federal banking agency for an affiliate within the banking group with the highest amount of unconsolidated assets as of the most recent quarter.”
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Conforming amendments— Section 13 of the Bank Holding Company Act of 1956 (12 U.S.C. 1851) is amended—
removed
by striking “the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission,” each place it appears and inserting “the Board”;
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by striking “appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission” and inserting “Board”;
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in subsection (c)(5), by striking “Notwithstanding paragraph (2)” and all that follows through “provided in subsection (b)(2),” and inserting “The Board shall have the authority”;
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in subsection (d)(1)—
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in subparagraph (F)(ii)—
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by striking “the appropriate Federal banking agencies” and inserting “the Board”; and
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by striking “have not jointly” and inserting “has not”; and
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in subparagraph (G)(viii), by striking “appropriate Federal banking agencies, the Securities and Exchange Commission, or the Commodity Futures Trading Commission,” each place it appears and inserting “Board”; and
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in subsection (e)(2)—
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by striking “an appropriate Federal banking agency, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as appropriate,” and inserting “the Board”; and
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by striking “under the respective agency’s jurisdiction”.
Sec. 2 Rulemaking authority under the Volcker rule
added
In general— Paragraph (2) of section 13(b) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(b)(2)) is amended to read as follows:
added “(2) Rulemaking
added “(A) In general—The Board may, as appropriate, consult with the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, or the Commodity Futures Trading Commission to adopt rules or guidance to carry out this section, as provided in subparagraph (B).
added “(B) Rulemaking requirements—In adopting a rule or guidance under subparagraph (A), the Board—
added “(i) shall consider the findings of the report required in paragraph (1) and, as appropriate, subsequent reports;
added “(ii) shall assure, to the extent possible, that such rule or guidance provide for consistent application and implementation of the applicable provisions of this section to avoid providing advantages or imposing disadvantages to the companies affected by this subsection and to protect the safety and soundness of banking entities and nonbank financial companies supervised by the Board; and
added “(iii) shall include requirements to ensure compliance with this section, such as requirements regarding internal controls and recordkeeping.
added “(C) Authority—The Board shall have sole authority to issue and amend rules under this section after the date of the enactment of this paragraph.
added “(D) Conforming authority
added “(i) Continuity of regulations—Any rules or guidance issued under this section prior to the date of enactment of this paragraph shall continue in effect until the Board issues a successor rule or guidance, or amends such rule or guidance, pursuant to subparagraph (C).
added “(ii) Applicable guidance—In performing examinations or other supervisory duties, the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, as appropriate, shall update any applicable policies and procedures to ensure that such policies and procedures are consistent (to the extent practicable) with any rules or guidance issued pursuant to subparagraph (C).”
removed
Section 13(h)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(1)) is amended—
changed
Conforming amendments— in subparagraph (D), by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively, and moving such subclauses 2 ems to Section 13 of the right;Bank Holding Company Act of 1956 (12 U.S.C. 1851) is amended—
added
by striking “the appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission,” each place it appears and inserting “the Board”;
added
by striking ‘‘appropriate Federal banking agencies, the Securities and Exchange Commission, and the Commodity Futures Trading Commission’’ each place it appears and inserting ‘‘Board’’;
added
in subsection (c)(5), by striking “Notwithstanding paragraph (2)” and all that follows through “provided in subsection (b)(2),” and inserting “The Board shall have the authority”; and
added
in subsection (d)(1)—
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in subparagraph (F)(ii)—
added
by striking “the appropriate Federal banking agencies” and inserting “the Board”; and
added
by striking “have not jointly” and inserting “has not”; and
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in subparagraph (G)(viii), by striking “appropriate Federal banking agencies, the Securities and Exchange Commission, or the Commodity Futures Trading Commission,” and inserting “Board,”.
removed
by redesignating subparagraphs (A), (B), (C), and (D) as clauses (i), (ii), (iii), and (iv), respectively, and moving such clauses 2 ems to the right;
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by striking “The term” and inserting the following:
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“(A) In general—The term”
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by adding at the end the following:
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“(B) Exclusion—Notwithstanding subparagraph (A), the term banking entity does not include any entity that has total consolidated assets of $10,000,000,000 or less.”
Sec. 3 Enforcement; anti-evasion
added
added
In general— Subsection (e) of section 13 of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(e)) is amended to read as follows:
added “(e) Enforcement; anti-evasion
added “(1) Appropriate Federal banking agency—Notwithstanding any other provision of law except for any rules or guidance issued under subsection (b)(2), whenever the appropriate Federal banking agency has reasonable cause to believe that a banking entity or nonbank financial company supervised by the Board has made an investment or engaged in an activity in a manner that either violates the restrictions under this section, or that functions as an evasion of the requirements of this section (including through an abuse of any permitted activity), such appropriate Federal banking agency shall order, after due notice and opportunity for hearing, the banking entity or nonbank financial company supervised by the Board to terminate the activity and, as relevant, dispose of the investment.
added “(2) Securities and Exchange Commission and Commodity Futures Trading Commission
added “(A) In general—Notwithstanding any other provision of law except for any rules or guidance issued under subsection (b)(2), whenever the Securities and Exchange Commission or the Commodity Futures Trading Commission, as appropriate, has reasonable cause to believe that a covered nonbank financial company for which the respective agency is the primary Federal regulator has made an investment or engaged in an activity in a manner that either violates the restrictions under this section, or that functions as an evasion of the requirements of this section (including through an abuse of any permitted activity), the Securities and Exchange Commission or the Commodity Futures Trading Commission, as appropriate, shall order, after due notice and opportunity for hearing, the covered nonbank financial company to terminate the activity and, as relevant, dispose of the investment.
added “(B) Covered nonbank financial company defined—In this paragraph, the term “covered nonbank financial company” means a nonbank financial company (as defined in section 102 of the Financial Stability Act of 2010) supervised by the Securities and Exchange Commission or the Commodity Futures Trading Commission, as appropriate.”
added
Rule of construction— Nothing in this section shall be construed to abrogate, reduce, or eliminate the backup authority of the Federal Deposit Insurance Corporation authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.), the Federal Deposit Insurance Act (12 U.S.C. 1811), or Federal Deposit Insurance Corporation Improvement Act of 1991.
Sec. 4 Exclusion of community banks from Volcker rule
addedadded Section 13(h)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(1)) is amended—
added
in subparagraph (D), by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively, and adjusting the margins accordingly;
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by redesignating subparagraphs (A), (B), (C), and (D) as clauses (i), (ii), (iii), and (iv), respectively, and adjusting the margins accordingly;
added
in the matter preceding clause (i), as so redesignated, in the second sentence, by striking “institution that functions solely in a trust or fiduciary capacity, if—” and inserting the following:
added “(A) that functions solely in a trust or fiduciary capacity, if—”
added
in clause (iv)(II), as so redesignated, by striking the period at the end and inserting “; or”; and
added
by adding at the end the following:
added “(B) that does not have and is not controlled by a company that has—
added “(i) more than $10,000,000,000 in total consolidated assets; and
added “(ii) total trading assets and trading liabilities, as reported on the most recent applicable regulatory filing filed by the institution, that are more than 5 percent of total consolidated assets.”