Summary of the Dodd-Frank Wall Street Reform and Consumer by hYtEmT

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									H.R.4173
Latest Title: Dodd-Frank Wall Street Reform and Consumer Protection Act
Sponsor: Rep Frank, Barney [MA-4] (introduced 12/2/2009) Cosponsors (None)
Related Bills:H.RES.956, H.RES.964, H.RES.1490, H.R.3126, H.R.3818, S.3217
Latest Major Action: Became Public Law No: 111-203 [GPO: Text, PDF]
Latest Conference Report: 111-517 (in Congressional Record H4977-5202)

SUMMARY AS OF:
7/21/2010--Public Law. (There are 3 other summaries)

(This measure has not been amended since the Conference Report was
filed in the House on June 29, 2010. The summary of that version is
repeated here.)

Dodd-Frank Wall Street Reform and Consumer Protection Act - Title I: Financial
Stability - Financial Stability Act of 2010 - Subtitle A: Financial Stability
Oversight Council - (Sec. 111) Establishes the Financial Stability Oversight
Council (Council), consisting of the heads of specified federal financial regulatory
bodies and chaired by the Secretary of the Treasury.

(Sec. 112) Requires the Council, among other things, to: (1) identify risks to U.S.
financial stability that could arise from the material financial distress or failure, or
ongoing activities, of large, interconnected bank holding companies or nonbank
financial companies, or that could arise outside the financial services marketplace;
(2) promote market discipline, by eliminating expectations on the part of
shareholders, creditors, and counterparties of such companies that the Government
will shield them from losses in the event of failure; (3) respond to emerging threats
to the stability of the financial system.

Includes among the Council's duties: (1) identifying gaps in regulation that could
pose risks to U.S. financial stability; (2) requiring supervision by the Board of
Governors of the Federal Reserve (Federal Reserve Board) for nonbank financial
companies that may pose risks to U.S. financial stability in the event of their
material financial distress or failure, or because of specified activities; (3) making
recommendations to the Board concerning the establishment of heightened
prudential standards for risk-based capital, leverage, liquidity, contingent capital,
and overall risk management for nonbank financial companies and large,
interconnected bank holding companies supervised by the Board; and (4)
identifying systemically important financial market utilities and payment, clearing,
and settlement activities.

(Sec. 113) Authorizes the Council to determine that a foreign or a U.S. nonbank
financial company shall be supervised by the Federal Reserve Board and subject to
prudential standards under this Act, if the Council determines that material financial
distress, or activities at the company, could threaten U.S. financial stability.

Authorizes the company, upon the Council's determination, to establish an
intermediate holding company in which its financial activities (and those of its
subsidiaries) are conducted in compliance with Board regulations or guidance.
Subjects such intermediate holding company to Board supervision and to prudential
standards under this Act as if it were a nonbank financial company supervised by
the Board.

Restricts Board supervision to the company's financial activities only.

Requires the Council, in exercising its duties with respect to foreign nonbank
financial companies, foreign-based bank holding companies, and cross-border
activities and markets, to consult with appropriate foreign regulatory authorities.

(Sec. 114) Requires any nonbank financial company determined to come under
Board supervision to register with the Federal Reserve Board.

(Sec. 115) Authorizes the Council to recommend to the Board prudential standards
and reporting and disclosure requirements for Board-supervised nonbank financial
companies and large, interconnected bank holding companies that: (1) are more
stringent than those for other nonbank financial companies and bank holding
companies that do not present similar risks to the U.S. financial stability; and (2)
increase in stringency, based upon specified considerations.

Requires the Council to study and report to Congress on the feasibility, benefits,
costs, and structure of a contingent capital requirement for Board-supervised
nonbank financial companies and large, interconnected bank holding companies.

Authorizes the Council to make recommendations to the Board about Board-
supervised nonbank financial companies and large, interconnected bank holding
companies, including: (1) required periodic reports on company plans for rapid and
orderly resolution in the event of material financial distress or failure; (2) company
credit exposure; (3) standards to limit risks posed by failure of any individual
company to other companies; and (3) short-term company debt limits.

(Sec. 116) Authorizes the Council, acting through the Office of Financial Research,
to require a bank holding company with total consolidated assets of $50 billion or
more or a Board-supervised nonbank financial company (and subsidiaries) to
submit certified reports of condition and risk management systems.

(Sec. 117) Treats as a Board-supervised nonbank financial company any entity
that: (1) was a bank holding company having total consolidated assets 50 billion or
more as of January 1, 2010; (2) received financial assistance under or participated
in the Capital Purchase Program established under the Troubled Asset Relief
Program (TARP) under the Emergency Economic Stabilization Act of 2008 (EESA);
or (3) is a successor entity.

Prescribes a procedure for appeal from such treatment.
(Sec. 118) Treats Council expenses as expenses of, and paid by, the Office of
Financial Research.

(Sec. 119) Prescribes procedures for resolution by the Council of supervisory
jurisdictional disputes among member agencies.

(Sec. 120) Authorizes the Council, in specified circumstances, to provide for more
stringent regulation of a financial activity by issuing recommendations to primary
financial regulatory agencies to apply new or heightened standards and safeguards
for a financial activity or practice conducted by bank holding companies or nonbank
financial companies.

Requires such primary agencies to impose the standards recommended by the
Council.

(Sec. 121) Requires the Federal Reserve Board to take mitigatory actions restricting
the activities of bank holding companies with total consolidated assets of $50 billion
or more, or Board-supervised nonbank financial companies, which pose a grave
threat to U.S. financial stability, including: (1) limiting the company's ability to
become affiliated with another company; (2) restricting the company's ability to
offer a financial product or products; (3) requiring the company to terminate one or
more activities; (4) imposing conditions on the manner in which the company
conducts activities; or (5) requiring the company to transfer assets or off-balance-
sheet items to unaffiliated entities.

(Sec. 122) Authorizes the Comptroller General to audit Council activities.

(Sec. 123) Instructs the Council Chairperson to study and report to Congress on the
economic impact of possible financial services regulatory limitations intended to
reduce systemic risk.

Subtitle B: Office of Financial Research - (Sec. 152) Establishes within the
Department of the Treasury the Office of Financial Research (OFR) to support the
Council and member agencies in: (1) collecting and standardizing data collections;
(2) performing applied research and essential long-term research; and (3)
developing risk measurement and monitoring tools.

(Sec. 154) Establishes the Data Center and the Research and Analysis Center to
carry out OFR programmatic responsibilities.

(Sec. 155) Establishes the Financial Research Fund in the Treasury as depository
for funds and assessments designated for the OFR.

Subtitle C: Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies - (Sec. 161) Authorizes the
Federal Reserve Board to require a nonbank financial company under its supervision
(and any subsidiary) to report under oath regarding its financial condition, its
systems for monitoring and controlling risks, and the extent to which its activities
and operations threaten U.S. financial stability.

Authorizes the Board to examine such companies regarding such matters.

(Sec. 162) Subjects a Board-supervised nonbank financial company (and any
subsidiaries that are not depository institutions) to specified enforcement
proceedings of the Federal Deposit Insurance Act (FDIA) in the same manner and
to the same extent as if it were a bank holding company.

Authorizes the Board to recommend that primary financial regulatory agency
initiate supervisory actions or enforcement proceedings against noncompliant
depository institution or functionally regulated subsidiaries.

(Sec. 163) Treats a Board-supervised nonbank financial company as a statutory
bank holding company for purposes of requirements governing bank acquisitions.

Requires a bank holding company with total consolidated assets of $50 billion or
more or a Board-supervised nonbank financial company to notify the Board in
writing in advance of any transaction in which it acquires direct or indirect
ownership or control of voting shares of a company (other than an insured
depository institution) which: (1) has total consolidated assets of $10 billion or
more; and (2) is engaged in specified activities under the Bank Holding Company
Act of 1956.

(Sec. 164) Treats a Board-supervised nonbank financial company as a bank holding
company for purposes of the Depository Institutions Management Interlocks Act.
Prohibits the Board, however, from permitting service by a management official of a
Board-supervised nonbank financial company as a management official of any bank
holding company with total consolidated assets of $50 billion or more, or any other
Board-supervised nonaffiliated nonbank financial company (except to provide a
temporary exemption for interlocks resulting from a merger, acquisition, or
consolidation).

(Sec. 165) Requires the Board to establish, for Board-supervised nonbank financial
companies and for bank holding companies with total consolidated assets of $50
billion or more, prudential standards addressing specified requirements that: (1)
are more stringent than those for other nonbank financial companies and bank
holding companies that do not present similar risks to the U.S. financial stability;
and (2) increase in stringency, based upon specified considerations.

Authorizes the Board to require each Board-supervised nonbank financial company
and bank holding companies with total consolidated assets of $50 billion or more to
maintain a minimum amount of contingent capital convertible to equity in times of
financial stress.

Directs the Board to require each Board-supervised nonbank financial company and
such bank holding companies to report periodically: (1) their plans for rapid and
orderly resolution in the event of material financial distress or failure; and (2) the
nature and extent of their credit exposure.

Requires the Board to prescribe standards limiting the risks and credit exposure
that failure of any individual company could pose to a Board-supervised nonbank
financial company or to a bank holding company with total consolidated assets of
$50 billion or more. Requires such regulations to prohibit credit exposure exceeding
25% of a company's capital stock and surplus (or a lower amount, if necessary).

Authorizes the Board to prescribe a limit on the amount of short-term debt,
including off-balance sheet exposures, that may be accumulated by bank holding
companies with total consolidated assets of $50 billion or more or Board-supervised
nonbank financial companies.

Directs the Board to require each publicly-traded Board-supervised nonbank
financial company to establish a risk committee responsible for the oversight of the
enterprise-wide risk management practices.

Requires the Board to conduct annual analyses in which Board-supervised nonbank
financial companies and bank holding companies with total consolidated assets of
$50 billion or more are subject to evaluation of whether such companies have the
capital, on a total consolidated basis, necessary to absorb losses as a result of
adverse economic conditions (stress tests).

Directs the Board to require a bank holding company with total consolidated assets
of $50 billion or more or a Board-supervised nonbank financial company (but not
any federal home loan bank) to maintain a debt to equity ratio of no more than 15
to 1, upon Council determination that the company poses a grave threat to the U.S.
financial stability and that this requirement is necessary to mitigate that risk.

Requires the computation of capital in such companies to take into account any off-
balance-sheet activities for purposes of meeting their capital requirements.

(Sec. 166) Directs the Federal Reserve Board to prescribe early remediation
requirements to address the financial distress of a Board-supervised nonbank
financial company or a bank holding company with total consolidated assets of $50
billion or more.

(Sec. 167) Authorizes the Board to require any nonbank financial company it
supervises that conducts activities that are not financial in nature or incidental
thereto under the Bank Holding Company Act of 1956 to establish and conduct all
or a portion of such activities that are financial in nature or incidental thereto in or
through an affiliated intermediate holding company.

Requires a company that directly or indirectly controls an intermediate holding
company established under such affiliation procedures to serve as a source of
strength to its subsidiary intermediate holding company.
(Sec. 170) Directs the Board to promulgate criteria for exempting from its
supervision certain types or classes of U.S. nonbank financial companies or foreign
nonbank financial companies.

(Sec. 171) Directs federal banking agencies to establish, on a consolidated basis,
minimum leverage capital requirements and minimum risk-based capital
requirements for insured depository institutions (except federal home loan banks),
depository institution holding companies, and Board-supervised nonbank financial
companies.

Directs the Comptroller General to study and report to Congress on access to
capital by smaller insured depository institutions.

Requires the federal banking agencies to develop capital requirements for insured
depository institutions, depository institution holding companies, and Board-
supervised nonbank financial companies that address the risks their activities pose,
including the risk to other public and private stakeholders in the event of adverse
performance, disruption, or failure of the institution or the activity.

(Sec. 172) Amends the FDIA to subject Board-supervised nonbank financial
companies and bank holding companies with total consolidated assets of $50 billion
or more to examination and enforcement action for insurance and liquidation
purposes whenever the Board of Directors of the Federal Deposit Insurance
Corporation (FDIC) determines that a special examination is necessary.

(Sec. 173) Amends the International Banking Act of 1978 to authorize the Federal
Reserve Board, when considering an application to establish in the United States a
foreign bank that presents a risk to the stability of the U.S. financial system, to
take into account whether the foreign bank's home country has adopted, or is
making demonstrable progress toward adopting, an appropriate system of
regulation for its financial system to mitigate such risk.

Authorizes the Board to order a foreign bank which presents a risk to the stability of
the U.S. financial system, and which operates a state branch or agency or
commercial lending company subsidiary in the United States, to terminate the
activities of that branch, agency, or subsidiary if the foreign bank's home country
has not adopted, or is not making demonstrable progress toward adopting, an
appropriate system of regulation for its financial system to mitigate such risk.

Amends the Securities Exchange Act of 1934 to authorize the Securities and
Exchange Commission (SEC), in determining whether to permit a foreign person or
an affiliate to register as a U.S. broker or dealer, or succeed to the registration of a
U.S. Broker or dealer, to consider whether, for a foreign person or an affiliate that
presents a risk to the stability of the U.S. financial system, the home country of the
foreign person's home country has adopted, or is making demonstrable progress
toward adopting, an appropriate system of regulation for its financial system to
mitigate such risk.
Authorizes the SEC to terminate the registration of such foreign person as a broker
or dealer in the United States, if the foreign person's home country has not
adopted, or is not making demonstrable progress toward adopting, an appropriate
system of regulation for its financial system to mitigate such risk.

(Sec. 174) Directs the Comptroller General to study and report to Congress on: (1)
the use of hybrid capital instruments as a component of Tier 1 capital for banking
institutions and bank holding companies; and (2) capital requirements applicable to
U.S. intermediate holding companies of foreign banks that are bank holding
companies or savings and loan holding companies.

(Sec. 175) Directs the President (or a designee) to coordinate through all available
international policy channels policies similar to those found in U.S. law relating to
limiting the scope, nature, size, scale, concentration, and interconnectedness of
financial companies, in order to protect U.S. financial stability and the global
economy.

Directs the Council Chairperson to consult regularly with the financial regulatory
entities and other appropriate organizations of foreign governments or international
organizations on matters relating to systemic risk to the international financial
system.

the Federal Reserve Board, and the Secretary to consult with their foreign
counterparts and through appropriate multilateral organizations to encourage
comprehensive and robust prudential supervision and regulation for all highly
leveraged and interconnected financial companies.

Title II: Orderly Liquidation Authority - (Sec. 202) Prescribes jurisprudential
procedures for orderly liquidation of financial entities, including petitions for U.S.
district court review, three-year appointment of the FDIC as receiver, and appeals
of district court final decisions.

Requires the Administrative Office of the United States Courts and the Comptroller
General each to monitor and report to Congress on: (1) the activities of the United
States District Court for the District of Columbia; and (2) the bankruptcy and
orderly liquidation process for financial companies under the Bankruptcy Code.

Directs the Comptroller General to study and report to: (1) Congress regarding
international coordination relating to the orderly liquidation of financial companies
under the Bankruptcy Code; and (2) the Council regarding prompt corrective action
implementation by the appropriate federal agencies.

(Sec. 203) Sets forth procedures by which the FDIC, the SEC, the Director of the
Federal Insurance Office and the Federal Reserve Board shall make written
recommendations to the Secretary concerning the disposition of certain financial
companies in danger of default, including brokers, dealers, insurance companies
and their subsidiaries.
Requires the Secretary and the FDIC as receiver for a covered financial company, to
report to Congress and the public on plans and actions to wind down a financial
company which the Secretary and the President have determined is in default or in
danger and its failure would have serious adverse effects on U.S. financial stability
in the U.S. (covered financial company).

Directs the Comptroller General to review and report to Congress on any
determination that results in the appointment of the FDIC as receiver.

(Sec. 204) Sets forth procedures for the FDIC to exercise its authorities, powers,
and duties as receiver for a covered financial company.

(Sec. 205) Requires the FDIC to appoint, without need for court approval, the
Securities Investor Protection Corporation (SIPC) to act as trustee for the
liquidation of a covered broker or dealer. Sets forth SIPC powers and duties as well
as mandatory terms and conditions for orderly liquidation actions.

(Sec. 207) Shields the members of the board of directors of a covered financial
company (or body performing similar functions) from liability to company
shareholders or creditors for acquiescing in or consenting in good faith to the
appointment of the FDIC as receiver for the covered financial company.

(Sec. 208) Dismisses cases or proceedings against a covered financial company,
upon proper notice, following appointment of either FDIC or SIPC as receiver and
trustee, respectively.

Requires the assets of a covered financial company, upon appointment of the FDIC
as receiver, to revest in it, to the extent they have vested in any entity other than
the covered financial company as a result of any case or proceeding commenced
under the Bankruptcy Code, the Securities Investor Protection Act of 1970, or any
similar provision of applicable state liquidation or insolvency law.

(Sec. 210) Specifies the powers and duties of the FDIC as receiver for a covered
financial company.

Prescribes liquidation procedures, including resolution of claims and statute of
limitations.

Declares unenforceable any walkaway clauses in a qualified financial contract of a
covered financial company in default.

Sets forth procedures to charter and establish bridge financial companies.

Prohibits the FDIC from entering into any agreement or approving any protective
order which prohibits it from disclosing the settlement terms of any action for
damages or restitution brought by the FDIC acting as receiver for a covered
financial company.
Establishes in the Treasury the Orderly Liquidation Fund to: (1) enable the FDIC to
implement its authorities in this Act; and (2) cover the cost of authorized actions,
including the orderly liquidation of covered financial companies.

Requires the FDIC to charge risk-based assessments to pay in full obligations
issued by the FDIC to the Secretary.

Directs the FDIC to prescribe regulations prohibiting the sale of assets of a covered
financial company by the FDIC to specified persons, including convicted debtors.

Authorizes the FDIC, as receiver of a covered financial company, to recover from
any current or former senior executive or director substantially responsible for the
company's failed condition any compensation received: (1) during the two-year
period preceding the date on which it was appointed receiver; or (2) at any time in
the case of fraud.

(Sec. 211) Sets forth the duties of the Inspectors General of the FDIC and of the
Department of the Treasury, respectively, to conduct, supervise, and coordinate
audits and investigations of actions taken by the FDIC as receiver and by the
Secretary related to the liquidation of any covered financial company.

(Sec. 212) Requires the FDIC to take the action necessary to avoid any conflicts of
interest that may arise in connection with multiple receiverships.

(Sec. 213) Authorizes either the Federal Reserve Board or the FDIC to ban certain
activities by senior executives and directors.

(Sec. 214) Requires the liquidation of all financial companies placed into
receivership under this Act. Prohibits the use of taxpayer funds to prevent
liquidation of any such companies.

Requires the recovery through assessments from the disposition of assets of a
liquidated financial company, or from the financial sector, of any funds expended
under this Act in the company's liquidation.

(Sec. 215) Directs the Council to study and report to Congress on "secured creditor
haircuts," an evaluation of the importance of maximizing U.S. taxpayer protections
and promoting market discipline with respect to the treatment of fully secured
creditors in the utilization of the orderly liquidation authority authorized by this Act.
(A "haircut" would treat a portion of the claims of secured creditors in liquidations
as unsecured.)

(Sec. 216) Directs the Board to study and report to Congress on: (1) specified
issues with respect to the resolution of financial companies under chapter 7
(Liquidation) or 11 (Reorganization) of the Bankruptcy Code; and (2) international
coordination relating to the resolution of systemic financial companies under the
U.S. Bankruptcy Code and applicable foreign law.
Title III: Transfer of Powers to the Comptroller of the Currency, the
Corporation, and the Board of Governors - Enhancing Financial Institution
Safety and Soundness Act of 2010 - Subtitle A: Transfer of Powers and Duties
- (Sec. 312) Transfers to the Federal Reserve Board, one year (or, at the
Secretary's discretion, no more than 18 months) after enactment of this Act, all
functions and rulemaking authority of the Office of Thrift Supervision (OTS) relating
to savings and loan holding companies.

Transfers to the Office of the Comptroller of the Currency all OTS functions relating
to federal savings associations, and all rulemaking authority relating to savings
associations.

Transfers to the FDIC all OTS functions relating to state savings associations.

(Sec. 313) Abolishes the OTS.

(Sec. 314) Amends the Revised Statutes of the United States to revise the general
requirements for the Office of the Comptroller of the Currency to accord with this
Act.

Requires the Comptroller of the Currency to designate a Deputy Comptroller,
responsible for the supervision and examination of federal savings associations.

(Sec. 318) Authorizes the Comptroller of the Currency to collect assessments, fees,
or other charges from national banking associations or federal branches or agencies
of a foreign bank, and the FDIC to assess fees against depository institutions
subject to its regular and special examinations.

Requires the Federal Reserve Board to collect assessments, fees, or other charges
from all: (1) bank holding companies and savings and loan holding companies
having total consolidated assets of $50 billion or more; and (2) Board-supervised
nonbank financial companies.

Subtitle B: Transitional Provisions - Sets forth transitional requirements and
procedures for the orderly transfer of OTS functions, employees, funds and
property to the Office of the Comptroller of the Currency, the FDIC, and the Board
of Governors.

Subtitle C: Federal Deposit Insurance Corporation - (Sec. 331) Amends the
FDIA to require the FDIC to: (1) revise the assessment base with respect to an
insured depository institution; and (2) prescribe the method for declaration,
calculation, distribution, and payment of dividends, with discretion to suspend or
limit their declaration.

(Sec. 334) Replaces the 1.15% to 1.5% of estimated insured deposits range for
reserve ratios which the FDIC Board may designate with a minimum reserve ratio
of 1.35% of estimated insured deposits, or the comparable percentage of the
assessment base.

(Sec. 335) Amends the FDIA and the Federal Credit Union Act (FUCA) to increase
permanently the maximum federal deposit insurance and federal share insurance
amount from $100,000 to $250,000. Makes such increase retroactive to January 1,
2008.

(Sec. 336) Replaces the Director of the Office of Thrift Supervision on the FDIC
Board with the Director of the Consumer Financial Protection Bureau.

Subtitle D: Other Matters - (Sec. 341) Permits a savings association that
becomes a bank to: (1) continue to operate any branch or agency that it operated
immediately before becoming a bank; and (2) establish, acquire, and operate
additional branches and agencies at any location within any state in which it
operated a branch immediately before it became a bank, if the law of the pertinent
state would permit establishment of the branch by a state-chartered bank.

(Sec. 342) Requires each agency to establish an Office of Minority and Women
Inclusion responsible for all matters of the agency relating to diversity in
management, employment, and business activities.Requires the Director of each
such Office to develop and implement procedures for inclusion and utilization of
minorities, women, and minority-owned and women-owned businesses in all
business and activities at all federal agency levels, including procurement,
insurance, and contracts.

(Sec. 343) Amends the FDIA and the FCUA to require that a depositor's net amount
maintained at an insured depository institution in a noninterest-bearing transaction
account is fully insured.

Subtitle E: Technical and Conforming Amendments - Sets forth technical and
conforming amendments to specified Acts regarding banking, housing and
securities.

Title IV: Regulation of Advisers to Hedge Funds and Others - Private Fund
Investment Advisers Registration Act of 2010 - (Sec. 403) Amends the Investment
Advisers Act of 1940 to repeal its exemption and apply registration requirements to
a private fund investment adviser (but not to a foreign private investment
adviser).Jack double-check this please).

Exempts from such Act's registration requirements: (1) an investment adviser who
solely advises specified small business investment companies licensed under the
Small Business Investment Act of 1958 or related entities; and (2) an investment
adviser that is registered with the Commodity Futures Trading Commission (CFTC)
as a commodity trading advisor and advises a private fund. Requires a CFTC-
registered commodity trading advisor that advises a private fund to register with
the SEC if the advisor's business should become predominantly securities-related
advice.
(Sec. 404) Subjects to SEC recordkeeping requirements, as well as periodic and
special examinations, any registered investment adviser who advises private funds.

Requires the SEC to make such records, especially those relating to systemic risk,
available to the Council.

Exempts from the Freedom of Information Act (FOIA) information that the SEC, the
Council, and any other department, agency, or self-regulatory organization (SRO)
receives from the SEC under this Act.

(Sec. 405) Adds the assessment of potential systemic risk as an exception to the
prohibition against disclosure by an investment adviser of the identity, investments,
or affairs of any client.

(Sec. 406) Prohibits the SEC, with respect to certain prohibited fraudulent
transactions by investment advisers, from defining "client" to include an investor in
a private fund managed by an investment adviser, if the private fund has entered
into an advisory contract with such adviser.

Instructs the SEC and the CFTC to promulgate joint rules for mandatory reports
filed with them by certain registered investment advisers.

(Sec. 407) Exempts an investment adviser who advises solely venture capital funds
from registration requirements with respect to the provision of investment advice
relating to a venture capital fund.

Directs the SEC to require the latter advisers, however, to maintain records and
make annual reports to the SEC.

(Sec. 408) Directs the SEC to exempt from registration requirements an investment
adviser acting solely as an adviser to private funds and having assets under
management in the United States of less than $150 million.

Directs the SEC, with respect to investment advisers acting as investment advisers
to mid-sized private funds, to: (1) take into account the size, governance, and
investment strategy of such funds to determine whether they pose systemic risk;
and (2) provide for registration and examination procedures with respect to the
investment advisers of such funds which reflect the level of systemic risk such
funds pose.

(Sec. 409) Excludes any family office from the definition of "investment adviser," as
defined by the SEC according to specified criteria.

(Sec. 410) Sets forth criteria for the treatment of certain mid-sized investment
advisers with assets under management of between $25 million and $100 million.
Exempts from federal registration any state-registered mid-sized investment
adviser that is not an adviser to a federally-registered investment company
registered, or a business development company, unless it would be required to
register with 15 or more states, in which case it may register under the Investment
Company Act of 1940.

(Sec. 411) Requires an investment adviser to safeguard client assets held in the
adviser’s custody, including by verification of such assets by an independent public
accountant.

(Sec. 412) Directs the Comptroller General to study and report to specified
congressional committees on: (1) the compliance costs of certain SEC rules
concerning client funds or securities held by investment advisers; and (2) the
additional costs if a certain portion of a rule relating to operational independence
were eliminated

(Sec. 413) Directs the SEC in its rules to adjust the net worth standard for an
accredited investor so that the individual net worth of any natural person, or joint
net worth with the person's spouse, at the time of purchase, is more than $1
million (excluding the value of the primary residence). Makes $1 million (excluding
the value of the primary residence) the net worth standard during the four-year
period beginning on the enactment of this Act.

Authorizes the SEC to: (1) review periodically the definition of "accredited investor"
to determine whether its requirements should be adjusted or modified for the
protection of investors, in the public interest, and in light of the economy; and (2)
make such adjustments as appropriate.

(Sec. 414) States that nothing in the Investment Advisers Act of 1940 shall relieve
any person of any obligation or duty, or affect the availability of any right or
remedy available to the CFTC or any private party, arising under the Commodity
Exchange Act governing commodity pools, commodity pool operators, or
commodity trading advisors.

(Sec. 415) Directs the Comptroller General to study and report to specified
congressional committees on the appropriate criteria for determining the financial
thresholds to qualify for accredited investor status and eligibility to invest in private
funds; and (4) the feasibility of forming an SRO to oversee private funds.

(Sec. 417) Directs the SEC Division of Risk, Strategy, and Financial Innovation to
study and report to Congress on: (1) the state of short selling on national securities
exchanges and in the over-the-counter markets; (2) the feasibility, benefits, and
costs of requiring reporting publicly, in real time, the short sale positions of publicly
listed securities, or, in the alternative, reporting such short positions in real time
only to the SEC and the Financial Industry Regulatory Authority (FINRA); and (3) a
feasibility, benefits, and costs of conducting a voluntary pilot program for public
companies to mark and report all trades in real time through the Consolidated Tape
as "short," "market maker short," "buy," "buy-to-cover," or "long."
(Sec. 418) Amends the Investment Advisers Act of 1940 with respect to SEC
authority to exempt persons or transactions from specified investment advisory
contract prohibitions and requirements if the contract is with any person that the
SEC determines, based on certain factors, does not need the protection of such
prohibitions and requirements. Declares that, with respect to any factor used in an
SEC rule or regulation in making such a determination, if the SEC uses a dollar
amount test in connection with such factor, such as a net asset threshold, it shall,
by order, adjust every five years for the effects of inflation on such test.

Title V: Insurance - Subtitle A: Federal Insurance Office - Federal Insurance
Office Act of 2010 - (Sec. 502) Establishes in the Treasury the Federal Insurance
Office (FIO) authorized to: (1) monitor the insurance industry; (2) identify issues or
gaps in the regulation of insurers that could contribute to a systemic crisis in the
insurance industry or the U.S. financial system; (3) monitor the extent to which
traditionally underserved communities and consumers, minorities, and low- and
moderate-income persons have access to affordable insurance products covering all
lines of insurance, except health insurance; (4) recommend to the Financial
Stability Oversight Council that it designate an insurer, including its affiliates, as an
entity subject to regulation as a nonbank financial company supervised by the
Board of Governors; (5) assist in administering the Terrorism Insurance Program;
and (6) coordinate federal efforts and develop federal policy on prudential aspects
of international insurance matters.

Extends the authority of the Office to all lines of insurance except: (1) health
insurance; (2) crop insurance; and (3) long-term care insurance (except long-term
care insurance included with life or annuity insurance components).

Authorizes information-gathering from insurers and affiliates. Permits data or
information obtained by the Office to be made available to state insurance
regulators, individually or collectively, through an information-sharing agreement.

Grants the Director of the Office subpoena and enforcement powers.

Sets forth a limited preemption of state insurance measures.

Requires the Director of the Office to study and report to specified congressional
committees on: (1) U.S. And global reinsurance markets; and (2) modernization
and improvement of domestic insurance regulation.

Authorizes appropriations for the FIO.

Authorizes the Secretary and the United States Trade Representative (USTR),
jointly, on behalf of the United States, to negotiate and enter into bilateral or
multilateral recognition agreements with foreign governments, authorities, or
regulatory entities.

Subtitle B: State-Based Insurance Reform - Nonadmitted and Reinsurance
Reform Act of 2010 - Part I: Nonadmitted Insurance - (Sec. 521) Prohibits any
state other than the home state of an insured from requiring a premium tax
payment for nonadmitted insurance.

Authorizes states to establish procedures to allocate among themselves the
premium taxes paid to an insured's home state.

Declares that Congress intends that each state adopt nationwide uniform
requirements, forms, and procedures, such as an interstate compact, that provide
for the reporting, payment, collection, and allocation of premium taxes for
nonadmitted insurance consistent with this Act.

Allows an insured's home state to require surplus lines brokers and certain insureds
to file annual tax allocation reports detailing the portion of the nonadmitted
insurance premiums attributable to properties, risks, or exposures located in each
state.

(Sec. 522) Subjects nonadmitted insurance solely to the regulatory requirements of
the insured's home state.

Declares that only an insured's home state may require a surplus lines broker to be
licensed to conduct nonadmitted insurance business with respect to such insured.

Declares that state law, rule, or regulation that restricts the placement of workers'
compensation insurance or excess insurance for self-funded workers' compensation
plans with a nonadmitted insurer is not preempted.

(Sec. 523) Prohibits a state from collecting fees relating to licensure of a surplus
lines broker in the state unless it has a regulatory mechanism in effect for
participation in the national insurance producer database of the National Association
of Insurance Commissioners (NAIC), or any other equivalent uniform national
database.

(Sec. 524) Prohibits a state from establishing eligibility criteria for nonadmitted
insurers domiciled in a U.S. jurisdiction except in conformance with the Non-
Admitted Insurance Model Act, unless the state has adopted nationwide uniform
requirements, forms, and procedures developed in accordance with this Act that
include alternative nationwide uniform eligibility requirements.

Prohibits a state from prohibiting a surplus lines broker from placing nonadmitted
insurance with, or procuring nonadmitted insurance from, a nonadmitted insurer
domiciled outside the United States and listed on the NAIC International Insurers
Department Quarterly Listing of Alien Insurers.

(Sec. 525) Cites conditions with which a surplus lines broker seeking to procure or
place nonadmitted insurance in a state for an exempt commercial purchaser must
comply in order to win exemption from any state requirement to make a due
diligence search to determine whether the full amount or type of insurance sought
by such exempt commercial purchaser can be obtained from admitted insurers.

(Sec. 526) Requires the Comptroller General to study and report to Congress on the
nonadmitted insurance market in order to determine the effect of this title upon the
size and market share of the nonadmitted insurance market for providing coverage
typically provided by the admitted insurance market.

Part II: Reinsurance - (Sec. 531) Prohibits a state from denying credit for
reinsurance for the insurer's ceded risk if the domiciliary state of an insurer
purchasing reinsurance (the ceding insurer) recognizes such credit and: (1) is
either an NAIC-accredited state; or (2) has financial solvency requirements
substantially similar to NAIC accreditation requirements.

Preempts the extraterritorial application of the laws, regulations, or other actions of
a non-domiciliary state of a ceding insurer (except those related to taxes and
assessments on insurance companies or insurance income) to the extent that they:
(1) restrict or eliminate the rights of the ceding insurer or the assuming insurer to
resolve disputes through contractual arbitration not inconsistent with federal law;
(2) require that a certain state's law shall govern the reinsurance contract, its
requirements, or any disputes arising from it; (3) attempt to enforce a reinsurance
contract on terms different from those set forth in it, if those terms are not
inconsistent with this subtitle; or (4) otherwise apply the laws of the state to
reinsurance agreements of ceding insurers not domiciled in that state.

(Sec. 532) Reserves to a reinsurer's domiciliary state sole responsibility for
regulating the reinsurer's financial solvency if it is either NAIC-accredited, or has
financial solvency requirements substantially similar to NAIC.

Prohibits any other state from requiring a reinsurer to provide financial information
in addition to that required by its NAIC-compliant domiciliary state.

Part III: Rule of Construction - Prohibits any construction of this Act to modify,
impair, or supersede the application of the antitrust laws. States that any implied or
actual conflict between this Act and any amendments to this Act and the antitrust
laws shall be resolved in favor of the operation of the antitrust laws.

Title VI: Improvements to Regulation of Bank and Savings Association
Holding Companies and Depository Institutions - Bank and Savings
Association Holding Company and Depository Institution Regulatory Improvements
Act of 2010 - (Sec. 603) Prohibits the Federal Deposit Insurance Corporation (FDIC)
from approving applications for deposit insurance received after November 23,
2009, for an industrial bank, a credit card bank, or a trust bank directly or indirectly
owned or controlled by a commercial firm.

Defines a company as a commercial firm if the annual gross revenues derived by it
and all of its affiliates from activities financial in nature and, if applicable, from the
ownership or control of one or more insured depository institutions represent less
than 15% of the company's consolidated annual gross revenues.

Requires a federal banking agency to disapprove a change in control over such
entities if the change would result in direct or indirect control by a commercial firm,
unless in addition to obtaining all regulatory approvals the bank: (1) is in danger of
default; (2) results from the bona fide merger or whole acquisition of a commercial
firm by another commercial firm; or (3) results from an acquisition of voting shares
of a publicly traded company that controls such a bank if, after acquisition, the
acquiring shareholder (or group of shareholders acting in concert) holds less than
25% of any class of the company's voting shares.

Directs the Comptroller General to study and report to Congress on whether it is
necessary, in order to strengthen the U.S. financial system, to eliminate certain
exceptions to the definition of a bank under the Bank Holding Company Act of 1956
(BHCA).

(Sec. 604) Amends the BHCA to revise requirements for reports and examinations
which bank holding companies and savings and loan holding companies must
submit to the Board of Governors of the Federal Reserve System (Board). Requires
the Board, to the fullest extent possible, to: (1) rely on the examination reports of
other federal or state regulatory agencies, and other specified required reports,
relating to a savings and loan holding company and any subsidiary; (2) coordinate
with other federal and state regulators; and (3) avoid duplication of examination
activities, reporting requirements, and requests for information.

Authorizes the Board to examine, in certain circumstances, functionally regulated
subsidiaries of bank holding companies, including certain entities subject to
regulatory oversight by the CFTC.

Repeals specified limitations on the rulemaking, prudential, supervisory, and
enforcement authority of the Board.

Amends the BHCA to require the Board to take into consideration the extent to
which a proposed bank acquisition, merger, or consolidation would result in greater
or more concentrated risks to the stability of the U.S. banking or financial system.

Requires a financial holding company to obtain prior Board approval to acquire a
company whose total consolidated assets exceed $10 billion.

Requires the Board to consider, in connection with a proposed merger, acquisition
or consolidation, the extent to which such action would result in greater or more
concentrated risks to the stability of the U.S. Banking or financial system.

Amends the Home Owners’ Loan Act (HOLA) to require the Board, to the fullest
extent possible, to: (1) rely on the examination reports of other federal or state
regulatory agencies, and other specified required reports, relating to a savings and
loan holding company and any subsidiary; (2) coordinate with other federal and
state regulators; and (3) avoid duplication of examination activities, reporting
requirements, and requests for information.

(Sec. 605) Amends the Federal Deposit Insurance Act to direct the Board to
examine the activities of certain nondepository institution subsidiaries of a
depository institution holding company that are permissible for the insured
depository institution subsidiaries of the holding company.

Authorizes the appropriate federal agency for the lead insured depository institution
to recommend to the Board to take enforcement action against such a
nondepository institution subsidiary if its activities pose a material threat to the
safety and soundness of any insured depository institution subsidiary of the
depository institution holding company.

(Sec. 606) Amends the BHCA and HOLA to require financial holding companies and
savings and loan holding companies to remain well capitalized and well managed,
including their interstate acquisitions and mergers.

(Sec. 608) Amends the Federal Reserve Act (FRA) to cover such transactions as:
(1) a purchase of assets subject to an agreement to repurchase; (2) a transaction
with an affiliate that involves the borrowing or lending of securities, thus causing a
member bank's (or a subsidiary's) credit exposure to the affiliate; and (3) a
derivative transaction with an affiliate that causes a member bank's (or a
subsidiary's) credit exposure to the affiliate.

Revises restrictions on bank transactions with affiliates to require that any credit
exposure of a bank (or subsidiary) to an affiliate resulting from a securities
borrowing or lending transaction, or a derivative transaction, be secured at all
times.

Repeals the requirement that any collateral subsequently retired or amortized be
replaced by additional eligible collateral where needed to keep the percentage of
the collateral value relative to the amount of the outstanding loan or extension of
credit, guarantee, acceptance, or letter of credit equal to the minimum percentage
required at the transaction's inception.

Declares unacceptable the use of a low-quality asset as collateral for credit
exposure to an affiliate resulting from a bank's (or subsidiary's) securities
borrowing or lending transaction, or derivative transaction. Revises exemptions to
the restrictions on bank transactions with affiliates with respect to such credit
exposure.

Cites circumstances under which the Comptroller of the Currency may exempt a
national bank, the FDIC may exempt a state nonmember bank, and the Board may
exempt a state member bank from restrictions on transactions with affiliates.

Amends HOLA to cite circumstances under which the Comptroller of the Currency
may exempt a federal savings association from such restrictions.
(Sec. 609) Repeals the exemption of covered transactions between a bank and any
of its individual financial subsidiaries from the requirement that the aggregate
amount of the transaction not exceed 10% of the member bank's capital stock and
surplus.

Repeals also the exclusion of the financial subsidiary's retained earnings from a
bank's investment in one of its individual financial subsidiaries.

(Sec. 610) Amends the Revised Statutes with respect to the limit of 15% of a
national banking association's unimpaired capital and unimpaired surplus on the
total loans and extensions of credit it makes to a person outstanding at one time
and not fully secured by collateral having a market value at least equal to the
amount of the loan or extension of credit.

Includes among such loans and extensions of credit the credit exposure to a person
arising from a derivative transaction, repurchase agreement, reverse repurchase
agreement, securities lending transaction, or securities borrowing transaction
between the national banking association and a person. Defines derivative
transaction as any transaction that is a contract, agreement, swap, warrant, note,
or option 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.

(Sec. 611) Amends the FDIA to allow a state bank to engage in a derivative
transaction only if the law with respect to lending limits of the state in which it is
chartered takes into consideration credit exposure to derivative transactions.

(Sec. 612) Amends the National Bank Consolidation and Merger Act, the Revised
Statutes, and HOLA to prohibit certain conversions between national and state
banks and savings associations by banks and thrifts subject to certain cease and
desist or other formal enforcement orders. Cites conditions for exemption from such
prohibition.

(Sec. 613) Amends the Revised Statutes and the FDIA to revise requirements for
the state "opt-in" election to permit interstate branching through de novo branches.
Specifies that the application of a national bank to establish a de novo branch in a
state in which the bank does not maintain a branch may be approved if the law of
the state where the branch is located, or is to be located, would permit
establishment of the branch if the bank were a state bank chartered by such state.

(Sec. 614) Amends the FRA regarding limits on credit extensions to executive
officers, directors, and principal shareholders of member banks (insiders) to declare
that a member bank shall be deemed to have extended credit to a person if the
member bank has credit exposure to the person arising from a derivative
transaction, repurchase agreement, reverse repurchase agreement, securities
lending transaction, or securities borrowing transaction between the member bank
and the person.
(Sec. 615) Amends the FDIA to prohibit an insured depository institution from
purchasing an asset from, or selling one to, its executive officers, directors, or
principal shareholders unless the transaction is on market terms and, if the
transaction represents more than 10% of the institution's capital stock and surplus,
the transaction has been approved in advance by a majority of the institution's
board of directors (with interested directors not participating).

(Sec. 616) Amends the BHCA, HOLA, and the International Lending Supervision Act
of 1983 to authorize the appropriate federal banking agency to: (1) issue
regulations relating to the capital requirements of bank holding companies and
savings and loan holding companies, respectively; and (2) instruct such entities, in
establishing capital requirements, to seek to make them countercyclical, so that the
amount of capital required to be maintained by a company increases in times of
economic expansion and decreases in times of economic contraction, consistent
with the company's safety and soundness.

Amends the FDIA to direct the appropriate federal banking agency for a bank
holding company or savings and loan holding company to require such an entity to
serve as a source of financial strength for any of its subsidiaries that is a depository
institution.

Defines "source of financial strength" as the ability of a company that directly or
indirectly owns or controls an insured depository institution to provide it with
financial assistance if it experiences financial distress.

Directs the appropriate federal banking agency for an insured depository institution
that is not the subsidiary of a bank holding company or savings and loan holding
company to require any company that directly or indirectly controls it to serve as a
source of financial strength for it.

(Sec. 617) Amends the Securities Exchange Act of 1934 to repeal the statutory
framework under which certain investment bank holding companies may elect to
become supervised by the Securities Exchange Commission (SEC).

(Sec. 618) Prescribes requirements for U.S. registration and supervision, including
capital and risk management, of certain securities holding companies required by a
foreign regulator or foreign law to be subject to comprehensive consolidated
supervision.

(Sec. 619) Amends the BHCA to prohibit a banking entity from: (1) engaging in
proprietary trading; or (2) acquiring or retaining any ownership interest in or
sponsor a hedge fund or a private equity fund.

Subjects a Board-supervised nonbank financial company to additional capital
requirements and quantitative limits if it engages in proprietary trading or
maintains an ownership interest in, or sponsors, a hedge fund or a private equity
fund.
Exempts certain permissible activities from such additional capital and additional
quantitative limits, among them: (1) the purchase, sale, acquisition, or disposition
of U.S. obligations or securities and specified other instruments; (2) risk-mitigating
hedging activities in connection with and related to individual or aggregated
positions, contracts, or other holdings of a banking entity; (3) investments in one
or more small business investment companies; (4) organization and offering of a
private equity or hedge fund; (5) certain proprietary trading; or (6) the acquisition
or retention of any equity, partnership, or other ownership interest in, or the
sponsorship of, a hedge fund or a private equity fund by a banking entity solely
outside of the United States.

Directs the Financial Stability Oversight Council to study and make
recommendations on implementing these prohibitions.

Directs the appropriate federal banking agencies, the SEC, and the CFTC to adopt
and coordinate implementing rules.

(Sec. 620) Directs the appropriate federal banking agencies to review jointly and
report to Congress on the activities in which a banking entity may legally engage,
including any financial, operational, managerial, or reputation risks associated with
or presented as a result of such an activity, as well as risk mitigation activities.

(Sec. 621) Amends the Securities Act of 1933 to prohibit underwriters, placement
agents, initial purchasers, or sponsors of an asset-backed security (or any affiliate
or subsidiary), during the year after the first closing of the security's sale, from
engaging in any transaction that would involve or result in any material conflict of
interest with respect to any investor in a related transaction. Exempts from such
prohibition: (1) risk-mitigating hedging activities in connection with positions or
holdings arising out of the underwriting, placement, initial purchase, or sponsorship
of such a security; or (2) purchases or sales of such securities.

(Sec. 622) Amends the BHCA to prohibit a financial company from merging,
consolidating with, or acquiring control of another company if the total consolidated
liabilities of the acquiring financial company, upon consummation of the
transaction, would exceed 10% of the aggregate consolidated liabilities of all
financial companies at the end of the calendar year preceding the transaction.
Exempts from such concentration limit an acquisition: (1) of a bank in default or in
danger of default; (2) with respect to which assistance is provided by the FDIC; or
(3) that would result only in a de minimis increase in the financial company's
liabilities.

Requires the Financial Stability Oversight Council to study and makes
recommendations regarding the extent to which this concentration limit would
affect financial stability, moral hazard in the financial system, the efficiency and
competitiveness of domestic financial firms and financial markets, and the cost and
availability of credit and other financial services to domestic households and
businesses.
Directs the Board to issue final implementing regulations to reflect Council
recommendations.

(Sec. 623) Amends the FDIA to prohibit the responsible agency (usually the FDIC)
from approving an application for an interstate merger transaction if, upon
consummation of the transaction, the resulting insured depository institution
(including its affiliated insured depository institutions) would control more than
10% of the total amount of deposits of insured depository institutions in the United
States. Exempts from this prohibition an interstate merger transaction that involves
insured depository institutions in default or in danger of default, or with respect to
which the FDIC provides specified assistance.

Amends the BHCA to prohibit the Board from approving a bank holding company's
application to acquire an insured depository institution if: (1) the institution’s home
state is not the home state of the bank holding company; and (2) the applicant
(including all affiliated insured depository institutions) control, or upon
consummation of the transaction would control, more than 10% of the total amount
of deposits of insured depository institutions in the United States. Exempts from
this prohibition an acquisition that involves insured depository institutions in default
or in danger of default, or with respect to which the FDIC provides specified
assistance.

Amends the Home Owners' Loan Act to prohibit acquisitions of insured depository
institutions by a savings and loan holding company if : (1) the depository
institution’s home state is not the home state of the savings and loan holding
company; and (2) the applicant and all affiliated insured depository institutions
control, or upon consummation of the transaction would control, more than 10% of
the total amount of deposits of insured depository institutions in the United States;
and (3) the acquisition does not involve an insured depository institution in default
or in danger of default, or with respect to which the FDIC provides specified
specified assistance.

(Sec. 624) Prohibits a savings association that fails to become or remain a qualified
thrift lender from paying dividends, except those permissible for a national bank,
necessary to meet the obligations of a controlling company, and specifically
approved by the Comptroller of the Currency and the Board.

(Sec. 625) Sets forth requirements for treatment of dividends by certain savings
association subsidiaries of mutual holding companies, including those for: (1)
advance notice of dividend declarations; (2) invalidity of any dividends not
announced before their declaration; (3) waiver by a mutual holding company of
dividends declared by a subsidiary; and (4) federal banking agency valuations of
waived dividends.

(Sec. 626) Authorizes the Board to require a grandfathered unitary savings and
loan holding company which conducts non-financial activities to conduct its financial
activities through an intermediate holding company that is a savings and loan
holding company. Requires the Board to require the establishment of an
intermediate holding company if that is necessary to supervise financial activities
appropriately or to ensure that the Board does not supervise the non-financial
activities.Declares that the internal financial activities of a grandfathered unitary
savings and loan holding company shall not be required to be placed in an
intermediate holding company.

Requires a grandfathered unitary savings and loan holding company that controls
an intermediate holding company established under this Act to serve as a source of
strength to its subsidiary intermediate holding company.

Requires the Board to establish criteria for determining whether to require a
grandfathered unitary savings and loan holding company to establish an
intermediate holding company.

(Sec. 627) Amends the Federal Reserve Act, the Home Owners' Loan Act, and the
Federal Deposit Insurance Act to repeal the prohibition against the payment of
interest on demand deposits.

(Sec. 628) Amends the Bank Holding Company Act of 1956 (BHCA) to exclude from
treatment as a bank certain institutions which do not engage in the business of
making commercial loans, other than credit card loans made to businesses that
meet the eligibility criteria for small business loans

Title VII: Wall Street Transparency and Accountability - Wall Street
Transparency and Accountability Act of 2010 - Subtitle A: Regulation of Over-
the-Counter Swaps Markets - Part I: Regulatory Authority - (Sec. 712)
Directs the Commodity Futures Trading Commission (CFTC) and the SEC to consult
and coordinate with one another and with the Prudential Regulators before
commencing any rulemaking or issuing an order regarding swaps, swap dealers,
major swap participants, swap repositories, persons associated with a swap dealer
or major swap participant, eligible contract participants, or swap execution
facilities.

Exempts from such requirement an order issued: (1) in connection with an actual
or potential violation of either the Commodity Exchange Act or the securities laws;
or (2) in certain federal administrative proceedings conducted on the record.

Directs the CFTC and the SEC to prescribe joint implementing regulations regarding
specified mixed swaps.

Denies jurisdiction to the CFTC and registered futures organizations over security-
based swaps, and to the SEC and registered national securities associations over
swaps, except as otherwise authorized by this title.

Retains the authority of a registered futures or national securities association,
however, to examine for compliance with, and enforce, its rules on capital
adequacy.
Prescribes a procedure for judicial review of final rules, regulations, or orders of
either the CFTC or the SEC if the other objects on jurisdictional grounds.

Requires the Financial Stability Oversight Council to engage in dispute resolution if
the CFTC and the SEC fail to prescribe such joint rules in a timely manner.

(Sec. 713) Amends the Securities Exchange Act of 1934 to authorize a registered
broker or dealer also registered as a futures commission merchant to hold cash and
securities in a portfolio margining account carried as a futures account subject to
the Commodity Exchange Act.

Amends the Commodity Exchange Act to authorize a registered futures commission
merchant that is also a registered securities broker or dealer to hold in a portfolio
margining account carried as a securities account any contract for the purchase or
sale of a commodity for future delivery (or an option on such a contract), and any
money, securities or other property received from a customer to margin,
guarantee, or secure such a contract, or accruing to a customer as the result of
such a contract.

Directs the CFTC to exercise its authority to ensure that securities held in a portfolio
margining account carried as a futures account are customer property and the
owners of those accounts are customers for purposes of the Commodity Broker
Liquidation requirements of federal bankruptcy law.

(Sec. 714) Authorizes the CFTC and the SEC to collect information concerning the
markets for any types of swap or security-based swap and report on those
detrimental to the stability of a financial market or of its participants.

(Sec. 715) Authorizes either the CFTC or the SEC to prohibit an entity domiciled in
a foreign country from participating in the United States in any swap or security-
based swap activities if the regulation of swaps or security-based swaps markets in
that foreign country undermines the stability of the U.S. financial system.

(Sec. 716) Prohibits federal assistance to a swaps entity with respect to any swap,
security-based swap, or other activity. Excludes from the definition of "swaps
entity" any major swap participant or major security-based swap participant that is
an insured depository institution.

Declares this prohibition against federal assistance to a swap entity inapplicable to
certain Federal Reserve-supervised and insured depository institutions owning or
establishing an affiliate which is a swaps entity in compliance with the Federal
Reserve Act and CFTC or SEC requirements. Applies such prohibition to any insured
depository institution, however, unless it limits its swap or security-based swap
activities to: (1) hedging and other similar risk mitigating activities directly related
to the institution's activities; and (2) acting as a swaps entity for swaps or security-
based swaps involving rates or reference assets that are permissible for investment
by a national bank. Denies consideration as a bank permissible activity, however,
acting as a swaps entity for credit default swaps, including swaps or security-based
swaps referencing the credit risk of asset-backed securities, unless such swaps or
security-based swaps are cleared by a derivatives clearing organization (DCO) or a
clearing agency that is registered, or exempt from registration, as a DCO under the
Commodity Exchange Act or as a clearing agency under the Securities Exchange
Act, respectively.

Requires liquidation (termination or transfer) of all swaps or security-based swap
activities of swaps entities that are: (1) FDIC institutions that are put into
receivership or declared insolvent as a result of such swaps or activities; or (2)
institutions posing a systemic risk and subject to heightened prudential supervision
that are put into receivership or declared insolvent as a result of such swaps or
activities.

Prohibits the use of taxpayer funds or resources: (1) to prevent the receivership of
any swap entity resulting from its swap or security-based swap activity; or (2) for
the orderly liquidation of any swaps entities that are non-FDIC insured, non-
systemically significant institutions not subject to heightened prudential
supervision.

Requires recovery of all funds expended on the termination or transfer of the swap
or security-based swap activity of a swaps entity from the disposition of the entity's
assets or through assessments, including assessments on the financial sector.

Prescribes rules for the conduct of swaps or security-based swap activities by a
bank or bank holding company permitted to be or become a swap entity.

Authorizes the Financial Stability Oversight Council to determine that swaps entities
may no longer access federal assistance with respect to any swaps or security-
based swap activities whenever provisions established by this Act are insufficient to
effectively mitigate systemic risk and protect taxpayers.

Requires an insured depository institution to comply with this Act's prohibition
against proprietary trading in derivatives.

(Sec. 717) Amends the Commodity Exchange Act and the Securities Exchange Act
of 1934 to: (1) prescribe a CFTC approval process for new products, including puts,
calls, or other options on securities; and (2) deem a security any agreement,
contract, or transaction (or class of such, including securities-related derivatives)
exempted from restrictions on futures trading by the CTFC with the condition that
the SEC exercise concurrent jurisdiction over the agreement, contract, or
transaction (or class).

(Sec. 718) Sets forth a process for the CFTC or the SEC to determine the status of
novel derivative products.

(Sec. 719) Requires the CFTC to study and report to Congress regarding the effects
of the position limits imposed under this title on excessive speculation and on the
movement of transactions from exchanges in the United States to trading venues
outside the United States.

Instructs the Chairman of the CFTC to report biennially to Congress on the growth
or decline of the derivatives markets in the United States and abroad.

Directs the CFTC and the SEC to study jointly and report to Congress on: (1) the
feasibility of requiring the derivatives industry to adopt standardized computer-
readable algorithmic descriptions to describe complex and standardized financial
derivatives; (2) swap regulation as well as clearing house and clearing agency
regulation in the United States, Asia, and Europe, comparing similar areas of
regulation and other areas of regulation that could be harmonized; and (3) whether
stable value contracts fall within the definition of a swap and if so, determine if an
exemption from such definition for stable value contracts is appropriate and in the
public interest.

(Sec. 720) Directs the CFTC and the Federal Energy Regulatory Commission (FERC)
to negotiate and submit to Congress a memorandum of understanding to establish
procedures for: (1) applying their respective authorities in a manner to ensure
effective regulation in the public interest; (2) resolving conflicts concerning
overlapping jurisdiction between the two agencies; (3) avoiding conflicting or
duplicative regulation; and (4) sharing information where either Commission is
investigating potential manipulation, fraud, or market power abuse in markets
within its purview.

Part II: Regulation of Swap Markets - (Sec. 722) Amends the Commodity
Exchange Act (CEA) with respect to CFTC exclusive jurisdiction over accounts,
agreements and transactions involving swaps, and contracts of sale executed on a
swaps execution facility. States that such CFTC jurisdiction limits neither the
jurisdiction conferred by this Act upon the SEC with respect to security-based swap
agreements and security-based swaps, nor SEC authority with respect to related
agreements, contracts, or transactions.

Amends the CEA to prohibit a swap from being: (1) considered to be insurance; and
(2) regulated as an insurance contract under state law.

Excludes from CFTC jurisdiction swaps activities outside the United States, unless
they: (1) have a direct, significant connection with activities in, or effect upon, U.S.
commerce; or (2) contravene CFTC regulations.

Denies CFTC jurisdiction regarding any security other than a security-based swap.

States that CFTC jurisdiction does not limit or affect the authority of FERC or a state
regulatory authority with respect to an agreement, contract, or transaction entered
into pursuant to a FERC- or state-approved tariff or rate schedule that is not
executed, traded, or cleared on a registered entity or trading facility, or on one
owned or operated by a regional transmission organization or independent system
operator.
Retains certain existing enforcement authority of FERC under the Federal Power Act
and the Natural Gas Act.

Requires the Secretary of the Treasury to take specified factors into consideration
when determining whether to exempt foreign exchange swaps and foreign
exchange forwards from the definition of swap (and U.S. regulation).

(Sec. 723) Repeals the exclusion from regulation of certain derivative transactions,
electronic trading facilities, swap transactions; and transactions in exempt
commodities.

States that it shall be unlawful for any person, other than an eligible contract
participant, to enter into a swap unless the swap is entered into, on, or subject to
the rules of a board of trade designated as a contract market under the CEA.

Prescribes clearing requirements for swaps. Makes it unlawful for any person to
engage in a swap without submitting it for clearing to a DCO that is either
registered under this Act or exempt from such registration, if the swap is required
to be cleared.

Requires the CFTC to review on an ongoing basis each swap, or any group,
category, type, or class of swaps to determine whether it should be required to be
cleared. Requires a DCO to submit to the CFTC each swap, group, category, type,
or class it plans to accept for clearing. Authorizes the CFTC to stay a clearing
requirement. Requires the CFTC to: (1) prescribe rules to prevent evasions of
clearing requirements; and (2) investigate swaps subject to clearing but which have
not been listed for clearing by a DCO.

Authorizes the CFTC, pursuant to such an investigation, to require that parties to
swaps retain adequate margin or capital levels.

(Sec. 724) Declares that it is unlawful for any person who is not registered with the
CFTC as a futures commission merchant to accept money, securities, or property
(or to extend credit in lieu of them) from, for, or on behalf of a swaps customer to
margin, guarantee, or secure a swap cleared by or through a DCO (including
money, securities, or property accruing to the customer as the result of such a
swap).

Requires a futures commission merchant to treat as belonging to the swaps
customer, and deal as such, with all money, securities, and property of any swaps
customer received to margin, guarantee, or secure a swap cleared by or though a
DCO.

Prohibits the commingling of such assets with the futures commission merchant's
own funds or their use to margin, secure, or guarantee any trades or contracts of
any swaps customer or person other than the person for whom they are held.
Allows the commingling of such assets, however, and their deposit in the same
account or accounts with any bank or trust company or with a DCO, as well as their
withdrawal for specified business purposes.

Deems a swap cleared by or through a DCO to be a commodity contract with regard
to all money, securities, and property of any swaps customer received by a futures
commission merchant or a DCO to margin, guarantee, or secure the swap
(including money, securities, or property accruing to the customer as the result of
the swap).

Declares it unlawful for any recipient of money, securities, or property for deposit in
certain separate accounts to hold, dispose of, or use such assets as belonging to
any person other than the swaps customer of the futures commission merchant.
Prescribes: (1) bankruptcy treatment of cleared swaps; and (2) segregation
requirements for uncleared swaps.

(Sec. 725) Modifies registration requirements governing DCOs, including governing
core principles, risk management, and reporting requirements. Requires each DCO
to designate an individual to serve as a compliance officer. Revises requirements
for system safeguards and public disclosure of certain information, including
contract terms, fees, margin-setting methodology and daily settlement prices of
cleared contracts. Prescribes standards for governance fitness and mitigation of
conflicts of interest.

Directs the CFTC to adopt data collection and maintenance requirements for swaps
cleared by DCOs that are comparable to the corresponding requirements for: (1)
swaps data reported to swap data repositories; and (2) swaps traded on swap
execution facilities.

Amends the Legal Certainty for Bank Products Act of 2000 to revise the exclusion of
identified banking products from the application of the CEA and from CFTC
jurisdiction. Allows an exception to this exclusion for swaps or security-based swaps
(thus subjecting them to federal banking agency regulation).

Amends the CEA to declare that, in order to minimize systemic risk, under no
circumstances shall a DCO be compelled to accept the counterparty credit risk of
another clearing organization.

(Sec. 726) Requires the CFTC to adopt conflict of interest rules which may include
numerical limits on the control of, or the voting rights with respect to, any DCO that
clears swaps, or swap execution facility or board of trade designated as a contract
market that posts swaps or makes swaps available for trading, by a bank holding
company with total consolidated assets of $50 billion or more, a nonbank financial
company supervised by the Board, an affiliate of such a bank holding company or
nonbank financial company, a swap dealer, major swap participant, or associated
person of a swap dealer or major swap participant.

(Sec. 727) Amends the CEA to require the CFTC to make swap transaction and
pricing data available to the public in order to enhance price discovery. Authorizes
the CFTC to require registered entities to publicly disseminate the swap transaction
and pricing data required to be reported.

Requires: (1) each swap to be reported to a registered swap data repository; and
(2) public reporting on a semiannual and annual basis of aggregate swap data.

(Sec. 728) Requires a person to register with the CFTC as a swap data repository
regardless of whether the person is also licensed as a bank or registered with the
SEC as a swap data repository. Allows a DCO to register as a swap data repository.
Prescribes requirements and duties for swap data repositories, including designation
of a chief compliance officer.

(Sec. 729) Sets forth reporting and recordkeeping rules for uncleared swaps.

(Sec. 730) Amends the CEA to set forth: (1) circumstances under which it is
unlawful to enter into any swap that the CFTC determines performs a significant
price discovery function with respect to registered entities; (2) requirements for the
registration and regulation of swap dealers and major swap participants (including
maintenance of daily trading records); and (3) special requirements for swap
dealers acting either as advisors or as counterparties to special entities (federal,
state, or local agencies, employee benefit plans or governmental benefit plans, or
certain endowments).

(Sec. 732) Directs the CFTC to require that futures commission merchants and
introducing brokers implement specified conflict-of-interest systems and structural
and institutional safeguards to avert conflicts of interest.

(Sec. 733) Requires a swaps trading or processing facility to: (1) be registered as
either a swap execution facility or as a designated contract market; and (2)
maintain a risk analysis and oversight program. Prescribes core principles for swap
execution facilities.

(Sec. 734) Amends the CEA to repeal requirements for derivatives transaction
execution facilities and an election for registration by exempt boards of trade.

(Sec. 735) Revises requirements for a board of trade which has been designated as
a contract market. Prescribes core principles for contract markets.

Requires such a board of trade to: (1) establish a program of risk analysis and
oversight to identify and minimize sources of operational risk; (2) establish and
enforce disciplinary procedures; (3) establish emergency procedures, backup
facilities, and a plan for disaster recovery; (4) conduct periodic tests to verify that
back-up resources are sufficient to ensure continued order processing and trade
matching, price reporting, market surveillance, and maintenance of a
comprehensive and accurate audit trail; and (5) have adequate financial,
operational, and managerial resources to discharge contract market responsibilities.
Requires the board of directors of a publicly traded board of trade to recruit
individuals from a broad and culturally diverse pool of qualified candidates.

(Sec. 736) Repeals the current prohibition to authorize the CFTC to regulate the
setting of levels of margin for an registered entity.

(Sec. 737) Directs the CFTC to establish position limits on: (1) trading or positions
held by any group or class of traders; and (2) positions (other than bona fide hedge
positions) that may be held by any person with respect to either contracts of sale
for future delivery, or options on contracts or commodities traded on or subject to
the rules of a designated contract market.

(Sec. 738) Authorizes the CFTC to require a foreign board of trade to register with
the CFTC if it provides its members or other participants located in the United
States with direct access to the electronic trading and order matching system of the
foreign board of trade.

(Sec. 739) Revises the denial of voidability of hybrid instruments, transactions, and
contracts based solely on any failure to comply with CFTC terms or conditions.
Extends such denial to the voidability of agreement, contract, or transaction
between eligible contract participants (or persons reasonably believed to be such)
based solely on the failure of the agreement, contract, or transaction to meet the
CFTC definition of a swap.

(Sec. 740) Amends the Federal Deposit Insurance Corporation Improvement Act of
1991 to repeal its coverage of multilateral clearing organizations.

(Sec. 741) Grants the CFTC exclusive enforcement authority over swap markets.
Grants the Prudential Regulators exclusive authority to enforce certain prudential
requirements with respect to swap dealers or major swap participants. Authorizes
the CFTC and the Prudential Regulators to: (1) refer noncompliance with the other's
requirements to the other; and (2) initiate an enforcement proceeding if the other
does not.

Amends the Commodity Exchange Act to declare it unlawful for any person, in
connection with any contract of sale of any commodity for future delivery (or option
on such a contract), or any swap, on a group or index of securities to: (1) employ
any device, scheme, or artifice to defraud; (2) make any untrue statement of a
material fact, or omit to state a material fact necessary in order to make the
statements not misleading; or (3) engage in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any person.

Grants the CFTC jurisdiction over certain accounts or pooled investment vehicles
that are offered for the purpose of trading, or that trade, any agreement, contract,
or transaction in foreign currency.

Makes liable for certain double civil money penalties any DCO, swap dealer, or
major swap participant that knowingly or recklessly evades, or participates in or
facilitates an evasion of, specified requirements for certain transactions in exempt
commodities.

(Sec. 742) Amends the CEA to: (1) grant the CFTC jurisdiction over specified retail
commodity transactions; (2) require large swap traders to make specified reports
and disclosures to the CFTC; and (3) require segregation of a counterparty's assets
to be held as collateral in over-the-counter swap transactions not submitted for
clearing to a DCO.

(Sec. 744) Authorizes the CFTC to seek, and the court to impose, equitable
remedies, including restitution and disgorgement of gains, for violations of the CEA.

(Sec. 745) Allows an CFTC interpretation of an acceptable business practice with
respect to significant price discovery contracts to provide the exclusive means for
complying with the CEA.
Revises requirements for certification of new rules or rule amendments which
registered entities may elect to approve and implement.

(Sec. 746) Prohibits: (1) insider trading by any federal employee or agent who, by
virtue of such status, acquires information that may affect price of any commodity
in interstate commerce, or for future delivery, or any swap; (2) certain disruptive
practices in trading, practice, or conduct subject to the rules of a registered entity,
including "spoofing" (bidding or offering with the intent to cancel the bid or offer
before execution); and (3) use of swaps to defraud.

(Sec. 748) Directs the CFTC to pay an award (of 10%-30% of monetary sanctions
collected) to commodity whistleblowers who voluntarily provide original information
leading to the successful enforcement of a covered judicial, administrative, or
related action brought by the CFTC that results in monetary sanctions exceeding $1
million.

Establishes the Commodity Futures Trading Commission Customer Protection Fund
for: (1) the payment of whistleblower awards; and (2) the funding of education
initiatives to help customers protect themselves against violations of the CEA.

Prohibits specified acts of retaliation against whistleblowers. Includes job
reinstatement and back pay as well as compensation for special damages as relief
for an individual prevailing in a whistleblower action. Prescribes prohibitions and
requirements for whistleblower confidentiality.

Instructs the CFTC Inspector General to study and report to Congress on whether a
specified exemption under the FOIA aids whistleblowers in disclosing information to
the CFTC.

Declares nonenforceable: (1) the waiver of whistleblower rights and remedies
provided by this Act; and (2) any predispute arbitration agreement requiring
arbitration of a dispute arising under the whistleblower protections of this Act.
(Sec. 750) Establishes an interagency working group to study and report to
Congress on the oversight of existing and prospective carbon markets to ensure an
efficient, secure, and transparent carbon market, including oversight of spot
markets and derivative markets.

(Sec. 751) Amends the CEA to establish the Energy and Environmental Markets
Advisory Committee to serve as a vehicle for discussion and communication on
matters of concern to exchanges, firms, end users, and regulators regarding energy
and environmental markets, and their regulation by the CFTC.

(Sec. 752) Requires the CFTC, the SEC, and the Prudential Regulators to consult
and coordinate with foreign regulatory authorities on the establishment of
consistent international standards for the regulation of swaps, security-based
swaps, swap entities, and security-based swap entities.

Authorizes the CFTC, the SEC, and the Prudential Regulators to agree to
information-sharing arrangements necessary or appropriate in the public interest or
for the protection of investors, swap counterparties, and security-based swap
counterparties.

Requires the CFTC to consult and coordinate with foreign regulatory authorities on
the establishment of consistent international standards with respect to the
regulation of contracts of sale of a commodity for future delivery (or options on
them).

Authorizes the CFTC to agree with foreign regulatory authorities on information-
sharing arrangements necessary or appropriate in the public interest for the
protection users of contracts of sale of a commodity for future delivery.

(Sec. 753) Prohibits: (1) acts of manipulation and false or misleading information in
connection with any swap, or a contract of sale of any commodity in interstate
commerce, or for future delivery on or subject to the rules of any registered entity,
and (2) any manipulative or deceptive device or contrivance in contravention of
CFTC rules and regulations.

Declares it unlawful for any person to make any false or misleading statement of a
material fact to the CFTC. Subjects violations to a civil penalty.

Prescribes enforcement actions, including private rights of action.

Subtitle B: Regulation of Security-Based Swap Markets - (Sec. 762) Amends
the Gramm-Leach-Bliley Act to repeal the prohibition against regulation of a
security-based swap agreement.

(Sec. 763) Amends the Securities Exchange Act of 1934 to prescribe requirements
for clearing procedures and execution of security-based swaps, including
requirements for: (1) swap execution facilities; (2) segregation of assets held as
collateral in security-based swap transactions; and (3) position limits and
accountability for security-based swaps and large trader reporting.

Requires a clearing agency to submit and the SEC to review each security-based
swap, or any group, category, type or class of security-based swaps to determine
whether it should be required to be cleared. Excepts a security-based swap from
clearing requirements if one of its counterparties is not a financial entity, is using
such swaps to hedge or mitigate commercial risk, and notifies the SEC how it
generally meets its financial obligations associated with entering into non-cleared
security-based swaps. Leaves the application of such exception solely to the
discretion of such a counterparty.

Directs the SEC to consider whether to exempt from clearing requirements small
banks, savings associations, farm credit system institutions, credit unions, and
depository institutions with total assets of $10 billion or less.

Grants the sole right to select the clearing agency at which a security-based swap
will be cleared to a person that is not a swap dealer, major swap participant,
security-based swap dealer, or major security-based swap participant but is
counterparty to such a swap that is subject to the mandatory clearing requirement
and entered into by a security-based swap dealer or a major security-based swap
participant.

Authorizes such a counterparty to any security-based swap that is not subject to
the mandatory clearing requirement to elect to require clearing of the swap. Grants
such a counterparty also the sole right to select the clearing agency.

Requires each registered clearing agency to designate a chief compliance officer.

Requires a clearing agency that performs its functions with respect to security-
based swaps to register with the SEC.

Requires the SEC to adopt rules governing such agencies. Authorizes the SEC to
exempt a clearing agency from registration for the clearing of security-based swaps
if it is subject to comparable oversight by either the CFTC or governmental
authorities in the agency's home country.

Sets forth registration and oversight requirements governing security-based swap
execution facilities. Allows dual registration with the CFTC. Permits trading by such
facilities only in security-based swaps that are not readily susceptible to
manipulation.

Requires such facility to: (1) monitor trading and trade processing in security-based
swaps to prevent manipulation, price distortion, and disruptions of the delivery or
cash settlement process (including methods for conducting real-time monitoring of
trading and accurate trade reconstructions); (2) make public timely information on
price, trading volume, and other trading data on security-based swaps; (3) have
adequate financial, operational, and managerial resources to discharge its
responsibilities; and (4) maintain a risk analysis and oversight program to identify
and minimize sources of operational risk through the development of controls and
procedures, and automated systems.

Sets forth a registration requirement for any person who accepts money, securities,
or property (or extends credit in lieu of such assets) from, for, or on behalf of a
security-based swaps customer to margin, guarantee, or secure a security-based
swap cleared by or through a clearing agency.

Requires a broker, dealer, or security-based swap dealer to treat as belonging to
the security-based swaps customer all assets received from such customer to
execute a margin or guarantee, or to secure a security-based swap cleared by or
though a clearing agency.

Requires a separate accounting of the assets of such customer. Prohibits
commingling of such assets with the funds of the broker, dealer, or security-based
swap dealer, or their use to margin, secure, or guarantee any trades or contracts of
any person other than the one for whom such assets are held.

Prescribes segregation requirements for uncleared security-based swaps.

Requires security-based swap transactions with or for a person that is not an
eligible contract participant to be executed on a registered national securities
exchange.

Directs the SEC to establish limits (including related hedge exemption provisions)
on the size of positions in any security-based swap that any person may hold.
Authorizes the SEC to direct an SRO to adopt rules regarding the size of positions in
any security-based swap.

Authorizes the SEC to make security-based swap transaction and pricing data
available to the public in a form and at such times as appropriate to enhance price
discovery.

Requires the SEC to report semiannually and annually to the public information on:
(1) the trading and clearing in the major security-based swap categories; and (2)
the market participants and developments in new products.

Makes it unlawful for any person, unless registered with the SEC, to make use of
the mails or any means or instrumentality of interstate commerce to perform the
functions of a security-based swap data repository. Prescribes requirements for
such repositories.

(Sec. 764) Prescribes requirements for: (1) registration with and regulation by the
SEC of security-based swap dealers and major security-based swap participants
(which may also be registered with the CFTC); and (2) reporting and
recordkeeping, including daily trading recordkeeping, by them.
Directs the prudential regulators to issue minimum capital requirements and
minimum initial and variation margin requirements for security-based swap dealers
and major security-based swap participants that are banks. Requires the SEC to do
the same for those dealers and participants that are not banks.

Directs the SEC to adopt business conduct requirements for security-based swap
dealer or major security-based swap participant that acts as an advisor to a special
entity (a federal, state, or local agency, or an employee benefit plan, a
governmental benefit plan, or a charitable endowment). Requires such dealers or
participants that offer to or enter into a security-based swap with a special entity to
comply with any duties established by the SEC with respect to a counterparty that
is an eligible contract participant.

Specifies general duties for registered security-based swap dealers and major
security-based swap participants.

(Sec. 765) Directs the SEC to adopt conflict of interest rules with respect to
security-based swaps clearing agencies, security-based swap execution facilities,
national securities exchanges that post or make security-based swaps available for
trading, bank holding companies with total consolidated assets of $50 billion or
more, nonbank financial companies supervised by the Federal Reserve Board, and
affiliates of such a bank holding company or nonbank financial company, a security-
based swap dealer, major security-based swap participant, or person associated
with a security-based swap dealer or major security-based swap participant.

(Sec. 766) Prescribes requirements for reporting and recordkeeping for certain
security-based swaps.

(Sec. 767) Extends the preemption of state gaming and bucket shop laws to
prohibit their invalidation of security-based swaps between eligible contract
participants or effected on a registered national securities exchange.

(Sec. 768) Makes technical and conforming amendments regarding security-based
swaps to the Securities Act of 1933, the Investment Company Act of 1940, and the
Investment Advisers Act of 1940.

(Sec. 772) Prescribes general exemptive authority of the SEC with respect to
security-based swaps and specific prohibitions against the grant of exemptions from
certain requirements.

(Sec. 773) Subjects a clearing agency and security-based swap dealer or major
security-based swap participant to a civil money penalty in twice the amount
otherwise available for knowing or reckless evasion, participation in, or facilitation
of specified violations.

Title VIII: Payment, Clearing, and Settlement Supervision - Payment,
Clearing, and Settlement Supervision Act of 2010 - (Sec. 803) Defines "systemically
important" and "systemic importance"' as referring to a situation where the failure
of or a disruption to the functioning of a financial market utility or the conduct of a
payment, clearing, or settlement activity could create, or increase, the risk of
significant liquidity or credit problems spreading among financial institutions or
markets and thereby threaten the stability of the U.S. financial system.

(Sec. 804) Directs the Financial Stability Oversight Council (Council) to designate
those financial market utilities or payment, clearing, or settlement activities which
are, or are likely to become, systemically important. Requires the Council to rescind
such a designation if the utility or activity no longer meets the standards for
systemic importance.

(Sec. 805) Requires the Federal Reserve Board to prescribe risk management
standards governing: (1) operations related to payment, clearing, and settlement
activities of designated financial market utilities; and (2) the conduct of designated
activities by financial institutions.

Authorizes the CFTC and the SEC, subject to review and challenge by the Federal
Reserve Board and the Council, to prescribe risk management standards for the
respective designated clearing entities and financial institutions engaged in
designated activities for which each is the Supervisory Agency or the appropriate
financial regulator.

(Sec. 806) Authorizes the Board to authorize a Federal Reserve Bank to: (1)
establish an account for a designated financial market utility and provide certain
services; and (2) provide to a designated financial market utility discount and
borrowing privileges, but only in unusual or exigent circumstances.

Authorizes a Federal Reserve Bank to pay earnings on balances maintained by or on
behalf of a designated financial market utility.

Authorizes the Board to exempt a designated financial market utility from, or
modify, any reserve requirements.

Permits a designated financial market utility to implement a change that would
otherwise require advance notice if it determines that: (1) an emergency exists;
and (2) immediate implementation of the change is necessary for the utility to
continue to provide its services in a safe and sound manner.

(Sec. 807) Prescribes examination and enforcement actions taken by a Supervisory
Agency, the Board, and the Council with respect to designated financial market
utilities.

Authorizes a Supervisory Agency to determine, whenever another entity performs a
service integral to the operation of a designated financial market utility, whether
such service is indeed in compliance with regulations and standards to the same
extent as if the utility were performing the services on its own premises.
Grants the Board authority to recommend to the proper Supervisory Agency or
itself take emergency enforcement actions against a designated financial market
utility in the event of imminent risk of substantial harm.

(Sec. 808) Prescribes examination and enforcement actions by the Board against
financial institutions subject to standards for designated activities.

(Sec. 809) Authorizes the Council to require any financial market utility and/or
financial institution engaged in payment, clearing, or settlement activities to submit
information it may require for the sole purpose of assessing whether that utility is
systemically important, but only if the Council has reasonable cause to believe that
the utility meets the standards for systemic importance.

Authorizes the Board and the Council to: (1) require financial institutions and
designated financial market utilities to submit prescribed reports and data; and (2)
share information of material concerns with the appropriate financial regulator and
any Supervisory Agency. Grants such information sharing a specified exemption
from FOIA disclosure requirements.

(Sec. 813) Requires the CFTC and the SEC to coordinate with the Board to develop
jointly risk management supervision programs for designated clearing entities.

Title IX: Investor Protections and Improvements to the Regulation of
Securities - Investor Protection and Securities Reform Act of 2010 - Subtitle A:
Increasing Investor Protection - (Sec. 911) Amends the Securities Exchange
Act of 1934 to establish the Investor Advisory Committee (Committee) to advise
the SEC on: (1) regulatory priorities and issues relating to regulation of securities
products, trading strategies, fee structures, and the effectiveness of disclosures;
(2) initiatives to protect investor interest; (3) initiatives to promote investor
confidence and the integrity of the securities marketplace; and (4) any
recommended legislative changes.

(Sec. 912) Authorizes the SEC to: (1) gather information from and communicate
with investors or other members of the public; (2) engage in temporary investor
testing programs in the public interest; and (3) consult with academics and
consultants.

(Sec. 913) Requires the SEC to study and report to Congress on: (1) the
effectiveness of existing federal legal or regulatory standards of care (including
those set by a national securities association) for brokers, dealers, investment
advisers, and associated persons for providing personalized investment advice and
recommendations about securities to retail customers; and (2) whether there are
legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards
in the protection of retail customers relating to such standards of care that should
be addressed by rule or statute.

Authorizes the SEC to commence a rulemaking to address such standards of care.
Amends the Securities Exchange Act of 1934 and the Investment Advisers Act of
1940 toauthorize the SEC to establish a standard of conduct (fiduciary duty) for
brokers, dealers, and investment advisers, without regard to their financial or other
interests, to act in the customer's best interest when providing a retail customer
with personalized investment advice about securities.

Directs the SEC to: (1) facilitate the provision of simple and clear disclosures to
investors regarding the terms of their relationships with brokers, dealers, and
investment advisers, including any material conflicts of interest; and (2)
promulgate rules prohibiting or restricting certain sales practices, conflicts of
interest, and compensation schemes for brokers, dealers, and investment advisers
deemed contrary to the public interest and the protection of investors.

(Sec. 914) Directs the SEC to study and report to Congress on the need for
enhanced examination and reinforcement resources for investment advisers.

(Sec. 915) Amends the Securities Act of 1934 to establish the Office of the Investor
Advocate to: (1) assist retail investors in resolving significant problems with the
SEC or with SROs; (2) identify areas in which investors would benefit from changes
in the regulations of the SEC or the rules of an SRO; (3) identify problems that
investors have with financial service providers and investment products; (4)
analyze the potential impact on investors of proposed SEC regulations or SRO rules;
and (5) recommend changes to SEC regulations or orders and to federal law
appropriate to mitigate all such problems.

(Sec. 916) Modifies procedures for SEC approval or disapproval of proposed SRO
rule changes.

(Sec. 917) Directs the SEC to study and report to Congress regarding financial
literacy among retail investors; and (2) complete a study on ways to improve
investor access to information (including disciplinary actions, regulatory, judicial,
and arbitration proceedings) on investment advisers, brokers, dealers and
associated persons on the Central Registration Depository and Investment Adviser
Registration Depository systems.

(Sec. 918) Directs the Comptroller General to study and report to Congress
regarding: (1) mutual fund advertising; (2) potential conflicts of interest that exist
between the staffs of the investment banking and equity and fixed income
securities analyst functions within the same firm; and (3) the effectiveness of state
and federal regulations to protect investors and other consumers from individuals
who hold themselves out as financial planners through the use of misleading titles,
designations, or marketing materials.

(Sec. 919D) Requires the Investor Advocate to appoint an Ombudsman to: (1) act
as a liaison between the SEC and any retail investor in resolving problems that
retail investors may have with the SEC or with SROs; (2) encourage persons to
present questions to the Investor Advocate regarding compliance with the securities
laws; and (3) establish safeguards to maintain the confidentiality of
communications between such persons and the Ombudsman.

Subtitle B: Increasing Regulatory Enforcement and Remedies - (Sec. 921)
Amends the Securities Exchange Act of 1934 and the Investment Advisers Act of
1940 to authorize the SEC to restrict or prohibit mandatory pre-dispute arbitration
affecting customers or clients of brokers and dealers, including municipal securities
dealers.

(Sec. 922) Amends the Securities Exchange Act of 1934 to set forth monetary
incentives and protection for whistleblowers, including an award to whistleblowers
who voluntarily provided original information to the SEC that led to the successful
enforcement of a covered judicial or administrative action brought by the SEC
under the securities laws that results in monetary sanctions exceeding $1 million.
Allows such an award in an aggregate amount of between 10% and 30% of the
monetary sanctions collected.

Establishes in the Treasury the Securities and Exchange Commission Investor
Protection Fund to: (1) pay awards to whistleblowers; and (2) fund specified
activities of the SEC Inspector General.

Prohibits acts of retaliation against an employee for providing information to the
SEC.

Instructs the SEC Inspector General to study and report to Congress and the public
on the whistleblower protection program.

(Sec. 925) Amends the Securities Exchange Act of 1934 with respect to the
registration and regulation of brokers, dealers, municipal securities dealers, and
transfer agents, and the Investment Advisers Act of 1940 with respect to
registration of investment advisers, to revise requirements for collateral bars or
suspensions in the case of persons associated, or seeking to be associated, with
any of them who is subject to penalties for specified offenses.

(Sec. 926) Requires the SEC to issue rules that disqualify any offering or sale of
securities by a person subject to a final order of a state or federal regulatory body
that bars the person from: (1) association with an entity regulated by body; (2)
engaging in the business of securities, insurance, or banking; (3) engaging in
savings association or credit union activities; or (4) has been convicted of any
felony or misdemeanor in connection with the purchase or sale of any security or
involving the making of any false filing with the SEC. Extends such disqualification
to a person: (1) subject to a final order based upon fraudulent, manipulative, or
deceptive conduct within the ten-year period before the date of the offer or sale, or
(2) has been convicted of any felony or misdemeanor in connection with the
purchase or sale of any security or involving a false filing with the SEC.

(Sec. 928) Amends the Investment Advisers Act of 1940 to exempt state-registered
investment advisers from certain restrictions on investment advisory contracts.
(Sec. 929) Revises the prohibition against unlawful credit extension (margin
lending) to customers.

(Sec. 929A) Modifies federal criminal law granting whistleblower protections for
employees of publicly traded companies to prohibit subsidiaries and affiliates of an
issuer from engaging in specified acts of discrimination or retaliation.

(Sec. 929B) Modifies the procedure under which civil penalties obtained by the SEC
shall be added to and become part of a disgorgement fund established for the relief
of victims of the violation. Requires the amount of any settlement of a judicial or
administrative action to be added to the disgorgement fund.

(Sec. 929C) Amends the Securities Investor Protection Act of 1970 (SIPA) to
increase the borrowing limit on Treasury loans.

(Sec. 929D) Amends the Securities Exchange Act of 1934 regarding manipulative
and deceptive devices to revise requirements for the reporting of lost and stolen
securities to include canceled securities.

(Sec. 929E) Amends the Securities Exchange Act of 1933, the Investment Company
Act of 1940, and the Investment Advisers Act of 1940 to expand SEC enforcement
and remedies to include: (1) nationwide service of subpoenas; (2) enforcement
authority over any person who at the time of the alleged violation or abuse is or
was a member or employee of specified bodies (formerly associated persons); and
(3) authority to impose civil penalties in cease and desist proceedings. Grants
federal district courts extraterritorial jurisdiction over the antifraud provisions of
federal securities laws.

(Sec. 929G) Applies certain requirements for SEC appointments to positions in the
competitive service to any competitive service position at the SEC that requires
specialized knowledge of financial and capital market formation or regulation,
financial market structures or surveillance, or information technology.

(Sec. 929H) Amends the Securities Investor Protection Act of 1970 (SIPA) to
increase the standard maximum cash advance for each customer (including an
inflation adjustment).

Prohibits a SIPC member that has a customer from entering into an insolvency,
receivership, or bankruptcy proceeding, under federal or state law, without the
specific consent of SIPC, except as provided in this Act.

(Sec. 929I) Amends the Securities Exchange Act of 1934, the Investment Company
Act of 1940, and the Investment Advisers Act of 1940, to prohibit any compulsion
of the SEC to disclose certain records or information obtained under the Acts if they
have been obtained for use in furtherance of certain purposes, including
surveillance, risk assessments, or other regulatory and oversight activities.
(Sec. 929J) Revises requirements for the production of audit work papers by a
foreign public accounting firm or a registered public accounting firm that relies upon
the work of the foreign firm.

Requires a foreign public accounting firm to produce its audit work papers and all
other documents to the SEC or the Public Company Accounting Oversight Board
(PCAOB) upon request if the firm issues an audit report, performs audit work, or
conducts interim reviews upon which a registered public accounting firm relies in
the conduct of an audit or interim review. (Continues to require a registered public
accounting firm relying upon the work of a foreign public accounting firm to produce
the foreign firm's work papers upon SEC or PCAOB request.)

(Sec. 929L) Applies anti-fraud provisions to any security that is not a government
security.

(Sec. 929M) Amends the Securities Act of 1933, the Investment Company Act of
1940, and the Investment Advisers Act of 1940 to subject to liability for prosecution
and penalties persons who aid and abet violations of such Acts.

(Sec. 929O) Amends the Securities Act of 1934 to add recklessness as an element
of the aiding and abetting standard of knowledge.

(Sec. 929P) Expands SEC enforcement and remedies, including: (1) imposition of
civil money penalties in cease and desist proceedings; and (2) SEC extraterritorial
jurisdiction with respect to antifraud activities.

(Sec. 929Q) Amends the Investment Company Act of 1940 to prescribe
recordkeeping requirements for each person with custody or use of a registered
investment company's securities, deposits, or credits.

(Sec. 929R) Amends the Securities Exchange Act of 1934 to revise SEC
requirements for beneficial ownership and short-swing profit reporting.

(Sec. 929S) Amends the Securities Exchange Act of 1934 to require fingerprinting
of partners, directors, officers, and employees of registered securities information
processors, national securities exchanges, and national securities associations.

(Sec. 929T) Declares void any condition, stipulation, or provision binding any
person to waive compliance with SRO rules.

(Sec. 929U) Prescribes deadlines and procedures for completing compliance
examinations, inspections, and enforcement actions for violations of securities laws.

(Sec. 929V) Amends the Securities Investor Protection Act of 1970 (SIPA) to
increase: (1) the minimum assessment paid by Securities Investor Protection
Corporation (SIPC) members; and (2) the fine for certain prohibited acts, including
misrepresentation of SIPC membership or protection.
(Sec. 929W) Requires the SEC to revise its regulations to require due diligence on
the part of brokers and dealers and other specified paying agents to search for lost
security holders who have been sent checks for dividends, interest, and other
valuable property which have not yet been negotiated.

(Sec. 929X) Directs the SEC to prescribe rules requiring monthly public disclosure
of specified information about short sales of each security, including their number.

Makes it unlawful to effect manipulative short sales of securities.

Requires registered brokers or dealers to notify customers that: (1) they may elect
not to allow their fully paid securities to be used in connection with short sales; and
(2) the broker or dealer may receive compensation in connection with lending the
customer's securities.

(Sec. 929Y) Directs the SEC to study and report to Congress on the extent to which
private rights of action under the antifraud provisions of the Securities and
Exchange Act of 1934 should be extended to cover conduct occurring: (1) within
the United States that constitutes a significant step in the furtherance of the
violation, even if the securities transaction occurs outside the United States and
involves only foreign investors; and (2) outside the United States that has a
foreseeable substantial effect within the United States.

(Sec. 929Z) Directs the Comptroller General to study and report to Congress on the
impact of authorizing a private right of action against any person who aids or abets
another person in violation of the securities laws.

Subtitle C: Improvements to the Regulation of Credit Rating Agencies -
(Sec. 932) Amends the Securities Act of 1934 to require each nationally recognized
statistical rating organization (NRSRO) to establish, enforce, and document an
effective internal control structure governing policies, procedures, and
methodologies for determining credit ratings.

Directs the SEC to prescribe rules requiring each NRSRO to submit to the SEC a
specified annual internal controls report assessing the effectiveness of its internal
control structure, with an attestation of its chief executive officer, or an equivalent
individual.

Authorizes the SEC to either suspend temporarily, or to revoke permanently the
registration of a NRSRO with respect to a particular class or subclass of securities, if
it finds that the NRSRO does not have adequate financial and managerial resources
consistently to produce credit ratings with integrity.

Instructs the SEC to issue rules to prevent the sales and marketing considerations
of an NRSRO from influencing its production of ratings.
Requires each NRSRO to establish policies and procedures to ensure a look-back
review to determine whether a conflict of interest exists in any case in which an
employee of a person subject to an NRSRO credit rating, or of the issuer,
underwriter, or sponsor of a security or money market instrument subject to an
NRSRO credit rating, was employed by the NRSRO and participated in determining
credit ratings for the person or the securities or money market instruments during
the one-year period preceding the date an action was taken with respect to the
credit rating. Requires the NRSRO to revise the rating if appropriate.

Requires an NRSRO to report to the SEC any case where it can reasonably be
expected to know that a person associated with it within the previous five years as
a senior officer or as a participant (directly or as supervisor) in determining the
credit ratings in question subsequently obtained employment with any issuer,
underwriter, or sponsor of an instrument for which the NRSRO had issued such a
credit rating during the 12-month period before such employment.

Prohibits the designated compliance officer of an NRSRO from: (1) performing
credit ratings; (2) participate in the development of ratings methodologies or
models; (3) perform marketing or sales functions; or (4) participate in establishing
compensation levels, other than for the compliance officer's employees. Authorizes
the SEC to exempt a small NRSRO from these limitations if it finds that compliance
with them would impose an unreasonable burden.

Directs the SEC to: (1) establish an Office of Credit Ratings to administer its rules
with respect to NRSRO practices in determining ratings, for the protection of users
of credit ratings and in the public interest; (2) require each NRSRO to disclose
publicly information on the initial credit ratings it has determined for each type of
obligor, security, and money market instrument, and any subsequent changes to
such ratings, in order to allow users of credit ratings to evaluate their accuracy and
compare the performance of ratings by different NRSROs; and (3) prescribe rules,
for the protection of investors and in the public interest, regarding the procedures
and methodologies, including qualitative and quantitative data and models, used by
NRSROs.

Requires the issuer or underwriter of any asset-backed security to make publicly
available the findings and conclusions of any third-party due diligence report it has
obtained.

Requires at least half, but not fewer than two of the members of an NRSRO's board
of directors to be independent of the NRSRO agency. Requires a portion of the
independent directors to include users of ratings from a NRSRO. Prescribes criteria
to determine such independence.

(Sec. 933) Declares that in private actions against an NRSRO it shall be sufficient
for pleading any required state of mind that the complaint state with particularity
facts giving rise to a strong inference that the NRSRO knowingly or recklessly failed
to: (1) conduct a reasonable investigation of the rated security with respect to the
factual elements relied upon by its own methodology for evaluating credit risk; or
(2) obtain reasonable verification of such factual elements (by audit or even by a
sampling technique) from other sources that the credit rating agency considered to
be competent and that were independent of the issuer and underwriter.

(Sec. 934) Amends the Securities Exchange Act of 1934 to require each NRSRO to
refer to the appropriate law enforcement or regulatory authorities any information
that it receives from a third party and finds credible that alleges that an issuer of
securities rated by the NRSRO has committed or is committing a material violation
of law that has not been adjudicated by a federal or state court.

(Sec. 935) Requires an NRSRO, in producing a credit rating, to consider information
which it finds credible that it has, or receives about an issuer from a source other
than the issuer or underwriter, and which it finds potentially significant to a rating
decision.

(Sec. 936) Directs the SEC to: (1) prescribe qualification standards to ensure the
accuracy of securities ratings issued by credit rating analysts; (2) require each
NRSRO to establish and enforce written policies and procedures that assess the
probability that an issuer of a security or money market instrument will fail to make
payments to investors in accordance with the terms of such instrument; and ( 3)
define clearly and disclose the meaning of any symbol used by the NRSRO to
denote a credit rating, and apply it in a consistent manner for all types of
instruments for which it is used.

(Sec. 939) Amends the FDIA, the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992, the Investment Company Act of 1940, the Revised
Statutes, and the Securities Exchange Act of 1934 to remove references to credit
ratings to reflect the provisions of this Act.

Directs the SEC to study and report to Congress on ratings standardization.

(Sec. 939A) Requires federal agencies to: (1) review any of their regulations that
require the use of an assessment of the credit-worthiness of a security or money
market instrument; (2) remove any requirement of reliance on credit ratings and
substitute a standard of credit-worthiness deemed appropriate by the agency; and
(3) report to Congress any modification of any regulation such agency has made.

(Sec. 939B) Requires the SEC to revise Regulation FD (general rule regarding
selective disclosure by an issuer of material nonpublic information regarding that
issuer or its securities) to remove the exemption from it for NRSROs and other
credit rating agencies.

(Sec. 939C) Directs the SEC to study and report to Congress on the independence
of NRSROs and how it affects the ratings they issue.

(Sec. 939D) Directs the Comptroller to study and report to Congress on: (1)
alternative means for compensating NRSROs in order to create incentives for more
accurate credit ratings; and (2) the feasibility and merits of creating an
independent professional organization for NRSRO rating analysts responsible for
establishing independent professional standards and a code of ethical conduct, as
well as overseeing the profession.

(Sec. 939F) Directs the SEC to study and report to Congress on: (1) the credit
rating process for structured finance products and the conflicts of interest
associated with the issuer-pay and the subscriber-pay models; (2) the feasibility of
establishing a system in which a public or private utility or an SRO assigns NRSROs
to determine the credit ratings of such products; and (3) alternative means for
compensating NRSROs that would create incentives for accurate credit ratings.

(Sec. 939G) Declares without force or effect Rule 436(g) promulgated by the SEC
under the Securities Act of 1933. (Rule 436(g) exempts credit ratings provided by
NRSROs from being considered a part of the registration statement prepared or
certified by a person under such Act.)

(Sec. 939H) Expresses the sense of Congress that the SEC should exercise specified
rulemaking authority to prevent improper conflicts of interest arising from
employees of NRSROs providing services to issuers of securities that are unrelated
to the issuance of credit ratings, including consulting, advisory, and other services.

Subtitle D: Improvements to the Asset-Backed Securitization Process -
(Sec. 941) Amends the Securities Act of 1934 to direct the federal banking agencies
and the SEC to jointly prescribe regulations to require any securitizer to retain an
economic interest in a portion of the credit risk for any asset the securitizer,
through the issuance of an asset-backed security, transfers, sells, or conveys to a
third party.

Requires federal banking agencies, the SEC, the Secretary of Housing and Urban
Development (HUD), and the Federal Housing Finance Agency(FHFA), to jointly
prescribe regulations similarly requiring a securitizer to retain an economic interest
in a portion of the credit risk for any residential mortgage asset that the securitizer,
through the issuance of an asset-backed security, transfers, sells, or conveys to a
third party. Prescribes regulation standards, including a requirement to establish
asset classes with separate rules for securitizers of different classes of assets,
including residential mortgages, commercial mortgages, commercial loans, auto
loans, and any other appropriate class of assets.

Directs the federal banking agencies and the SEC to jointly adopt or issue
exemptions, exceptions, and adjustments to such rules. Exempts specifically any
loans or financial assets made, insured, guaranteed, or purchased by any institution
that is subject to the supervision of the Farm Credit Administration, including the
Federal Agricultural Mortgage Corporation. Exempts also any residential,
multifamily, or health care facility mortgage loan asset, or securitization based
directly or indirectly on such an asset, which is insured or guaranteed by the United
States or a U.S. agency (not including the Federal National Mortgage Association
[Fannie Mae], the Federal Home Loan Mortgage Corporation [Freddie Mac], and the
federal home loan banks). Makes additional exemptions from such rules for
qualified residential mortgages, subject to certain conditions.

Requires the Chairperson of the Financial Stability Oversight Council to coordinate
all joint rulemaking.

Requires the Federal Reserve Board to study the combined impact on each
individual class of asset-backed security of: (1) the new credit risk retention
requirements of this subtitle, including the effect credit risk retention requirements
have on increasing the market for federally subsidized loans; and (2) the Financial
Accounting Statements 166 and 167 issued by the Financial Accounting Standards
Board (FASB).

(Sec. 942) Amends the Securities Exchange Act of 1934 to authorize the SEC to:
(1) provide for the suspension or termination of the duty to file for any class of
issuer of asset-backed security; and (2) classify issuers and prescribe requirements
appropriate for each class of issuer of asset-backed security.

Amends the Securities Act of 1933 to direct the SEC to adopt regulations requiring
each issuer of an asset-backed security to disclose, for each tranche or class of
security, information regarding the assets backing that security.

(Sec. 943) Directs the SEC to prescribe regulations on the use of representations
and warranties in the market for asset-backed securities that: (1) require each
NRSRO to describe in any report accompanying a credit rating the representations,
warranties, and enforcement mechanisms available to investors and how they differ
from those in issuances of similar securities; and (2) require any securitizer to
disclose fulfilled and unfulfilled repurchase requests across all trusts aggregated by
the securitizer, so that investors may identify asset originators with clear
underwriting deficiencies.

(Sec. 944) Amends the Securities Act of 1933 to repeal the exemption from
prohibitions and requirements relating to interstate commerce and the mails that is
granted to certain transactions involving offers or sales of promissory notes secured
by a first lien on real estate upon which is located a residential or commercial
structure.

(Sec. 945) Directs the SEC to issue rules requiring any issuer of an asset-backed
security to review the assets underlying the security, and disclose the nature of the
review.

(Sec. 946) Requires the Chairman of the Financial Services Oversight Council to
study the macroeconomic effects of the risk retention requirements under this
subtitle, emphasizing the potential beneficial effects with respect to stabilizing the
real estate market.

Subtitle E: Accountability and Executive Compensation - (Sec. 951) Amends
the Securities Exchange Act of 1934 to require that a proxy or consent or
authorization for a shareholders meeting for which SEC proxy solicitation rules
require compensation disclosures include a separate resolution, subject to
shareholder vote, to approve the compensation of executives.

Requires the person making a proxy or consent solicitation at a shareholders
meeting to approve an acquisition, merger, consolidation, or proposed sale or other
disposition of all, or substantially all, of an issuer's assets, to disclose in the related
material any agreements or understandings that such person has with any named
executive officers of the issuer, or of the acquiring issuer, regarding: (1) all
compensation based upon, or relating to, such asset disposition; and (2) the
aggregate total of all such compensation that may be paid or become payable to or
on behalf of such executive officer (golden parachute compensation).

Declares that the shareholder vote shall not be binding on either the issuer or its
board of directors, nor may it be construed: (1) as overruling a decision by the
issuer or board of directors; (2) to create or imply any change or addition to the
fiduciary duties of the issuer or board of directors; or (3) to restrict or limit the
ability of shareholders to make proposals for inclusion in proxy materials related to
executive compensation.

Authorizes the SEC to exempt an issuer or class of issuers from such shareholder
approval requirements, taking into account whether the requirements
disproportionately burden small issuers.

(Sec. 952) Requires the SEC to direct the national securities exchanges and
associations to prohibit the listing of any class of equity security of an issuer that is
not in compliance with specified SEC standards governing compensation
committees, including: (1) the independence of such committees; (2) independence
standards for compensation consultants and other committee advisors; and (3)
compensation committee authority relating to compensation consultants.

Exempts from such a prohibition any issuer that is a controlled company, limited
partnership, company in bankruptcy proceedings, open-ended management
investment company registered under the Investment Company Act of 1940, or a
foreign private issuer that discloses annually to shareholders the reasons that it
does not have an independent compensation committee.

(Sec. 953) Directs the SEC to require each issuer to disclose in any proxy or
consent solicitation material for an annual shareholder meeting a clear description
of any mandatory compensation disclosures, including the relationship between
executive compensation actually paid and the financial performance of the issuer,
taking into account any change in the value of the shares of stock, dividends and
distributions.

Directs the SEC also to require each issuer to disclose in any filing: (1) the median
of the annual total compensation of all employees of the issuer, except the chief
executive officer; (2) the annual total compensation of the chief executive officer;
and (3) the ratio of the first amount to the second.
(Sec. 954) Requires the SEC to direct the national securities exchanges and
associations to prohibit the listing of any security of an issuer that is not in
compliance with SEC requirements governing the recovery of erroneously awarded
compensation.

Directs the SEC to require each issuer to develop and implement a policy providing:
(1) disclosure of the issuer's policy on incentive-based compensation that is based
on financial information required reported by the securities laws; and (2) that, if the
issuer is required to prepare an accounting restatement owing to its material
noncompliance with financial reporting requirements, the issuer will recover from
any current or former executive officer who received incentive-based compensation
during the preceding three-year period, based on the erroneous data, in excess of
what would have been paid to the executive officer under a required accounting
restatement.

(Sec. 955) Directs the SEC to require each issuer to disclose, in any proxy or
consent solicitation material for an shareholders' annual meeting, whether any
employee or member of the board of directors, including designees, is permitted to
purchase financial instruments designed to hedge or offset any decrease in the
market value of equity securities granted as part of a compensation package, or
held by them.

(Sec. 956) Directs federal regulators to jointly prescribe regulations requiring
depository institutions or depository institution holding companies to disclose the
structures of all incentive-based compensation arrangements in order to determine
whether such structure: (1) provides excessive compensation, fees, or benefits to
an executive officer, employee, director, or principal shareholder; or (2) could lead
to material financial loss to such institutions.

Directs federal regulators to jointly prescribe regulations prohibiting incentive-based
payment arrangements that the regulators determine encourage inappropriate risks
by such institutions by providing an executive officer, employee, director, or
principal shareholder with excessive compensation, fees, or benefits, or that could
lead to material financial loss to the institution.

Exempts financial institutions with assets of less than $1 billion from such
compensation restrictions.

(Sec. 957) Prohibits registration as a national securities exchange unless the rules
of the exchange prohibit any member that is not the beneficial owner of a specified
registered security from granting a proxy to vote in connection with a certain
shareholder vote unless the security's beneficial owner has instructed the member
to vote the proxy in accordance with the owner's voting instructions.

Subtitle F: Improvements to the Management of the Securities and
Exchange Commission - (Sec. 961) Requires the SEC to report annually to
Congress on its examinations of registered entities, enforcement investigations, and
corporate financial securities filings. Requires the Directors of the Division of
Enforcement, the Division of Corporation Finance, and the Office of Compliance
Inspections and Examinations to certify in such report that the SEC has adequate
internal supervisory controls to carry out its examination, enforcement and review
duties.

Directs the Comptroller to report triennially to such congressional committees on:
(1) the adequacy and effectiveness of the internal supervisory control structure and
procedures; and (2) the quality of SEC personnel management.

(Sec. 963) Directs the SEC and the Comptroller General to assess, in separate
annual reports to Congress, the effectiveness of SEC internal control structure and
procedures for financial reporting.

(Sec. 964) Directs the Comptroller to evaluate triennially SEC oversight of national
securities associations.

(Sec. 965) Requires the SEC Divisions of Trading and Markets and of Investment
Management to each retain a staff of examiners who perform compliance
inspections and examinations.

(Sec. 966) Directs the SEC Inspector General to establish a telephone hotline or
other electronic means for SEC employee: (1) suggestions for improvements in
work performance and use of the resources; and (2) allegations of waste, abuse,
misconduct, or mismanagement within the SEC.

(Sec. 967) Requires the SEC to hire an independent consultant to examine and
report to the SEC and Congress on SEC internal operations, structure, funding, and
the need for comprehensive reform, including the SEC's relationship with and
reliance upon self-regulatory organizations and other entities under SEC oversight
relevant to the regulation of securities and the protection of investors.

(Sec. 968) Directs the Comptroller to study and report to Congress on SEC
employees who leave the agency to work for financial institutions regulated by the
SEC.

Subtitle G: Strengthening Corporate Governance - (Sec. 971) Extends SEC
rulemaking authority to prescribe rules on proxy access, especially inclusion in a
solicitation of proxy, consent, or authorization of a shareholder nominee to serve on
the issuer's board of directors.

(Sec. 972) Instructs the SEC to issue rules requiring an issuer to disclose in the
annual proxy sent to investors the reasons why the issuer has chosen the same
person or different individuals to serve as chairman of the board of directors and
chief executive officer (or equivalent positions).

Subtitle H: Municipal Securities - (Sec. 975) Amends the Securities Exchange
Act of 1934 to require the registration of municipal advisors who either: (1) provide
advice to or on behalf of a municipal entity or obligated person with respect to
municipal financial products or the issuance of municipal securities; or (2)
undertake a solicitation of a municipal entity or obligated person.

Revises the distribution of independent and associated members of the Municipal
Securities Rulemaking Board, their eligibility standards, and their duties. Deems a
municipal advisor and any associated person to have a fiduciary duty to any
municipal entity for whom such advisor acts as a municipal advisor. Prohibits a
municipal advisor from engaging in any act, practice, or course of business
inconsistent with such fiduciary duty, or in contravention of any rule of the Board.

Revises registration prerequisites governing an affiliated securities association to
require that its rules provide that it shall: (1) request guidance from the Municipal
Securities Rulemaking Board when interpreting Board rules; and (2) inform the
Board about certain enforcement actions and examinations so that the Board may
assist in them and evaluate the ongoing effectiveness of its rules.

(Sec. 976) Directs the Comptroller to study: (1) mandatory disclosures by
municipal securities issuers; (2) the municipal securities markets; and (3) the role
and importance of the Governmental Accounting Standards Board (GASB) in the
municipal securities markets and its funding levels.

(Sec. 978) Amends the Securities Act of 1933 to authorize the SEC to require a
registered national securities association to establish: (1) a reasonable annual
accounting support fee to fund the annual budget of the GASB; and (2) rules and
procedures to provide for the allocation, assessment, and collection of such a fee
from association members, as well as for remittance of such fees to the Financial
Accounting Foundation.

Directs the Comptroller General to evaluate: (1) the role and importance of the
GASB in the municipal securities markets; and (2) the manner and the level at
which the GASB has been funded.

(Sec. 979) Establishes within the SEC the Office of Municipal Securities to
administer SEC rules governing the practices of municipal securities brokers and
dealers, municipal securities advisors, municipal securities investors, and municipal
securities issuers; and (2) coordinate with the Municipal Securities Rulemaking
Board for rulemaking and enforcement actions.

Subtitle I: Public Company Accounting Oversight Board, Portfolio
Margining, and Other Matters - (Sec. 981) Amends the Sarbanes-Oxley Act of
2002 to authorize the PCAOB to provide to a foreign auditor oversight authority all
information relating to a public accounting firm within the foreign oversight
authority's jurisdiction.

(Sec. 982) Extends coverage of PCAOB auditing authority to all companies subject
to the securities laws, not only public companies, and to brokers and dealers as
well. Extends the registration requirement to public accounting firms that audit
brokers and dealers, and authorizes the PCAOB to require an inspection program
for them.

Requires each broker or dealer to pay the PCAOB its allocated annual accounting
support fee.

Authorizes the PCAOB to refer to an SRO an investigation concerning an audit
report for a broker or dealer under the SRO's jurisdiction.

(Sec. 983) Amends the Securities Investor Protection Act of 1970 with respect to a
customer's portfolio margining account carried as a securities account pursuant to a
portfolio margining program approved by the SEC.

(Sec. 984) Amends the Securities Act of 1934 regarding manipulative and deceptive
devices to: (1) make it unlawful for any person to effect, accept, or facilitate a
transaction involving the loan or borrowing of securities in contravention of SEC
rules and regulations; and (2) direct the SEC to promulgate rules that are designed
to increase the transparency of information available to brokers, dealers, and
investors, with respect to the loan or borrowing of securities.

(Sec. 989) Instructs the Comptroller to study risks and conflicts associated with
proprietary trading by and within depository institutions and bank and financial
holding companies.

Requires the report to evaluate whether: (1) proprietary trading presents a material
systemic risk to both the stability of the U.S. financial system and to the safety and
soundness of the financial entities that engage in such trading; (2) it presents
material conflicts of interest between financial entities that engage in proprietary
trading and the clients of the institutions who use the firm either to execute trades
or to rely upon the firm to manage assets; (3) adequate disclosure regarding the
risks and conflicts of proprietary trading is provided to the depositors, trading and
asset management clients, and investors of financial entities that engage in it; (4)
the banking, securities, and commodities regulators of institutions that engage in
proprietary trading have adequate systems and controls to monitor and contain the
related risks and conflicts of interest; and (5) the costs and benefits of mitigating
systemic risk and conflicts of interest.

(Sec. 989A) Requires the Office of Financial Literacy of the Bureau of Consumer
Financial Protection established by Title X below) to establish a grants program for
states or eligible entities to: (1) investigate and prosecute misleading and
fraudulent marketing practices; (2) fund technology, equipment, and training for
regulators, prosecutors, and law enforcement officers to identify salespersons and
advisers who target seniors through the use of misleading designations and to
increase their successful prosecution; (3) provide educational materials and training
to seniors to increase awareness and understanding of misleading or fraudulent
marketing; (4) develop comprehensive plans to combat misleading or fraudulent
marketing of financial products to seniors; and (5) enhance provisions of state law
to provide protection for seniors against misleading or fraudulent marketing.
Authorizes appropriations for FY2011-FY2015.

(Sec. 989B) Amends the Inspector General Act of 1978 regarding: (1) the
independence of Inspectors General of designated federal entities; (2) Inspector
General accountability; and (3) removal of Inspectors General of designated federal
entities.

(Sec. 989E) Establishes the Council of Inspectors General on Financial Oversight.

Authorizes the Council to convene a Council of Inspectors General Working Group to
evaluate the Council's effectiveness and internal operations.

(Sec. 989F) Directs the Comptroller to study person to person lending to determine
the optimal federal regulatory structure.

(Sec. 989G) Amends the Sarbanes-Oxley Act of 2002 to exempt smaller securities
issuers that are neither large accelerated filers nor accelerated filers from the
requirement that a registered public accounting firm that prepares or issues the
issuer's audit report attest to, and report on, the assessment made by the issuer's
management.

Directs the SEC to study and report to Congress on how it could reduce the burden
for certain companies (whose market capitalization is between $75 million and $250
million for the relevant reporting period) of complying with such requirement while
maintaining investor protections for such companies.

(Sec. 989H) Requires the heads of designated federal agencies, including the
Federal Reserve Board, the CFTC, and the SEC, to each: (1) take action to address
deficiencies identified by a report or investigation of the agency Inspector General;
or (2) certify to both Houses of Congress that no action is necessary or appropriate
in connection with such deficiencies.

(Sec. 989I) Requires the Comptroller General to study the exemption granted by
this Act to smaller issuers that are nonaccelerated filers under the Sarbanes-Oxley
Act of 2002 from the requirement for an evaluation by a registered public
accounting firm of a securities issuer's internal control structure and procedures for
financial reporting.

(Sec. 989J) Directs the SEC to treat as securities exempt from the coverage of the
Securities Act of 1933 certain insurance or endowment policies or annuity contracts
or optional annuity contract issued on and after June 16, 2013, whose value does
not vary according to the performance of a separate account, and which meet other
specified criteria.

Subtitle J: Securities and Exchange Commission Match Funding - (Sec. 991)
Amends the Securities Exchange Act of 1934 to direct the SEC to collect transaction
fees and assessments designed to recover the costs to the government of the
annual appropriation to the SEC by Congress.

Amends the Securities Act of 1933 to revise requirements for annual and mid-year
adjustments to transaction fees to replace the target offsetting collection amount
for a fiscal year as goal of an adjustment with the regular appropriation to the SEC
by Congress for such fiscal year. Specifies increased target offsetting collection
amounts for FY2012-FY2021 and beyond in the calculation of securities registration
fees.

Amends the Securities Exchange Act of 1934 to authorize appropriations for the
SEC for FY2011-FY2015.

Requires the SEC to submit a budget annually to the President or the Office of
Management and Budget (OMB), and copies concurrently to specified congressional
committees.

Establishes in the Treasury the Securities and Exchange Commission Reserve Fund
as the depository for an annual aggregate of up to $50 million in registration fees
under the securities laws. Limits the balance in the Fund to $100 million. Requires
deposit of any fees in excess of such amounts in the General Fund, and prohibits
their availability for SEC obligation.

Title X: Bureau of Consumer Financial Protection - Consumer Financial
Protection Act of 2010 - Subtitle A: Bureau of Consumer Financial Protection -
(Sec. 1011) Establishes an independent Bureau of Consumer Financial Protection in
the Federal Reserve System, headed by a Director nominated by the President and
confirmed by the Senate, to regulate consumer financial products or services under
federal consumer financial laws.

(Sec. 1012) Authorizes the Federal Reserve Board to delegate to the Bureau the
authorities to examine persons subject to Board jurisdiction for compliance with
federal consumer financial laws.

Prohibits the Board from (1) intervening in any matter or proceeding before the
Director, including examinations or enforcement actions, unless otherwise
specifically provided by law; (2) appointing, directing, or removing any officer or
employee of the Bureau; or (3) merging or consolidating the Bureau, including its
functions or responsibilities, with any division or office of the Board or the federal
reserve banks.

Precludes from Board approval or review any rule or order of the Bureau. Prohibits
the Board from delaying or preventing the issuance of any rule or order of the
Bureau.

(Sec. 1013) Requires the Bureau to appoint an ombudsman to act as a liaison
between the Bureau and any affected person with respect to any problem the
person may have in dealing with the Bureau, resulting from its regulatory activities.
Requires the Director to establish: (1) specified functional research units; (2)
information and technical assistance regarding the offering and provision of
consumer financial products or services to traditionally underserved consumers and
communities; (3) a unit to collect and track complaints regarding consumer
financial products or services; (4) the Office of Fair Lending and Equal Opportunity;
(5) the Office of Financial Education, which shall develop a strategy to improve the
financial literacy of consumers; (6) the Office of Service Member Affairs; (7) the
Office of Financial Protection for Older Americans; and (8) a Consumer Advisory
Board.

Instructs the Comptroller to study: (1) the feasibility of certifying persons
conducting financial literacy programs or activities; (2) technological resources
intended to collect, analyze, evaluate, or promote financial literacy and counseling
programs; (3) effective methods, tools, and strategies intended to educate and
empower consumers about personal finance management; and (4)
recommendations to encourage development of programs that improve financial
education outcomes.

(Sec. 1017) Establishes in the Federal Reserve: (1) the Bureau of Consumer
Financial Protection Fund to pay the expenses of the Bureau; and (2) the Consumer
Financial Civil Penalty Fund for payments to victims of activities for which civil
penalties have been imposed under federal consumer financial laws.

Authorizes appropriations for FY2010-FY2013 to carry out the authorities granted in
federal consumer financial law.

Subtitle B: General Powers of the Bureau - (Sec. 1021) Requires the Bureau to
implement and enforce federal consumer financial law to ensure that all consumers
have access to fair, transparent, and competitive markets for consumer financial
products and services.

(Sec. 1022) Grants the Bureau exclusive rulemaking authority to the extent that a
federal consumer financial law authorizes the Bureau and another federal agency to
issue regulations to assure compliance with such law.

States that the deference that a court affords to the Bureau regarding the meaning
or interpretation of any federal consumer financial law shall be applied as if the
Bureau were the only agency authorized to apply, enforce, interpret, or administer
such law.

Directs the Bureau to monitor for risks to consumers in the offering or provision of
consumer financial products or services, including developments in markets for
them.

Grants the Bureau access to any report of examination or financial condition made
by a federal agency having jurisdiction over a covered person or service provider.
Authorizes the Bureau to prescribe registration requirements for covered persons
other than an insured depository institution, insured credit union, or related person.

(Sec. 1023) Authorizes the Financial Stability Oversight Council, on the petition of
one of its member agencies, to set aside a final Bureau regulation, or any of its
provisions, if the Council decides, in accordance with a specified procedure, that the
regulation or provision would put the safety and soundness of the U.S. Banking
system or the stability of the U.S. financial system at risk.

(Sec. 1024) Prescribes requirements for Bureau supervision and rulemaking
affecting certain nondepository covered persons, including those who offer or
provide origination, brokerage, or servicing of loans secured by real estate for use
by consumers primarily for personal, family, or household purposes, or loan
modification or foreclosure relief services in connection with such loans, including
private education and payday loans.

Subjects service providers of certain consumer real estate loans to Bureau
supervision and enforcement authority.

(Sec. 1025) Grants the Bureau, in order to assess compliance with federal
consumer financial laws, exclusive authority to require reports and conduct periodic
examinations of insured depository institutions and insured credit unions whose
total assets exceed $10 billion (including their affiliates). Grants the Bureau primary
authority to enforce such laws to the extent that the Bureau and another federal
agency are authorized to enforce them.

(Sec. 1026) Subjects insured depository institutions and insured credit unions with
total assets of $10 billion or less (including their service providers) to examination
and reporting requirements of the Bureau Director.

(Sec. 1027) Prohibits the Bureau from exercising its authority with respect to
sellers of nonfinancial goods, except to the extent that they are engaged in offering
or providing any consumer financial product or service.

Excludes from Bureau supervisory or rulemaking authority: (1) real estate brokers;
(2) retailers of manufactured and modular homes; (3) certified public accountants
and tax preparers; (4) attorneys; (5) persons regulated by state insurance
regulators or state securities commissions; (6) employee benefit and compensation
plans and certain other arrangements; (7) persons regulated by the SEC, the CFTC,
or the Farm Credit Administration; (8) activities related to charitable contributions;
and (9) auto dealers.

(Sec. 1028) Requires the Bureau to report to Congress on the use of agreements
providing for arbitration of any future dispute between covered persons and
consumers in connection with the offering or providing of consumer financial
products or services.
Authorizes the Bureau to prohibit or restrict the use of mandatory pre-dispute
arbitration clauses governing a a consumer financial product or service.

Subtitle C: Specific Bureau Authorities - (Sec. 1031) Authorizes the Bureau to:
(1) prohibit unfair, deceptive, or abusive acts or practices in connection with any
transaction with a consumer for, or the offering of, a consumer financial product or
service; and (2) promulgate regulations to prevent such practices. Subjects such
Bureau authority to specified conditions.

(Sec. 1032) Authorizes the Bureau to prescribe rules to ensure that the features of
any consumer financial product or service are fully, accurately, and effectively
disclosed so as to permit consumers to understand the associated costs, benefits,
and risks.

Directs the Bureau to propose for public comment rules and model disclosures that
combine specified disclosures under the Truth in Lending Act and the Real Estate
Settlement Procedures Act of 1974, into a single, integrated disclosure for
mortgage loan transactions covered by those laws.

(Sec. 1035) Instructs the Secretary to designate a Private Education Loan
Ombudsman within the Bureau to provide timely assistance to borrowers of private
education loans.

(Sec. 1036) Specifies prohibited acts related to: (1) violations of federal consumer
financial law or otherwise engage in any unfair, deceptive, or abusive act or
practice; (2) failure or refusal to establish or maintain records, permit access to or
copying of them, or provide information to the Bureau; and (3) knowing or reckless
assistance to others in violation of the requirements of this subtitle.

Subtitle D: Preservation of State Law - (Sec. 1041) Declares that this Act shall
not be construed as annulling, altering, or affecting, or exempting any person
subject to this title from complying with state law, except to the extent of any
inconsistency with this Act.

Declares that state law and regulations that afford consumers greater protection
than that provided under this Act are not inconsistent with this Act.

Requires the Bureau to: (1) issue a notice of proposed rulemaking whenever a
majority of the states has enacted a resolution in support of the establishment or
modification of a consumer protection regulation by the Agency; and (2) take
specified considerations into account before prescribing a final regulation based
upon such notice (including whether the proposed regulation would afford greater
protection to consumers than any existing regulation).

(Sec. 1042) Authorizes a state attorney general to bring a civil action in the name
of the state (including, but only in certain circumstances, against a national bank or
federal savings association) in federal or state court to enforce and secure remedies
under this Act.
Authorizes a state attorney general bring a civil action in the name of such state
against a national bank or federal savings association in any federal district court or
state court that is located in that state having jurisdiction over the defendant to
enforce a regulation prescribed by the Bureau under this title and to secure
remedies under this title or remedies otherwise provided under other law.

Affirms the authority of: (1) state securities regulators and state insurance
regulators to take action with respect to a person they regulate; and (2) the
Comptroller of the Currency and the Director of the Office of Thrift Supervision
(OTS) regarding the applicability of state law under federal banking law to existing
contracts entered into by the national banks and federal savings associations they
regulate and supervise.

(Sec. 1044) Amends the Revised Statutes and the Home Owners' Loan Act to
prescribe state law preemption standards and visitorial standards for national
banks, federal savings associations, and nondepository institution subsidiaries.

Requires the Comptroller to report to Congress concerning whether the agency
intends to continue, rescind, or propose to amend any determination that a
provision of federal law preempts a state consumer financial law, and the reasons
for doing so.

Subtitle E: Enforcement Powers - Sets forth Bureau enforcement powers,
including those for investigations, adjudication, and litigation authority.

Subtitle F: Transfer of Functions and Personnel; Transitional Provisions -
(Sec. 1061) Transfers from the following entities to the Director certain consumer
financial protection functions: (1) the Federal Reserve Board; (2) the Comptroller of
the Currency; (3) the OTS Director; (4) the FDIC; (5) the Federal Trade
Commission (FTC); (6) NCUA; (7) the Secretary of Housing and Urban
Development (HUD) (relating to the Real Estate Settlement Procedures Act of 1974
and the Secure and Fair Enforcement for Mortgage Licensing Act of 2008); and (8)
the Prudential Regulators.

(Sec. 1064) Provides for the transfer of affected personnel.

Subtitle G: Regulatory Improvements - (Sec. 1071) Amends the Equal Credit
Opportunity Act to require each financial institution, in the case of an application for
credit for either a small business, a women-owned, or a minority-owned business,
to: (1) inquire whether the business is a women- or minority-owned, or a small
business, business; and (2) maintain a separate record of the responses to such
inquiry. Restricts access to such information by loan underwriters or other financial
institution employees. Requires such information to be compiled and maintained by
each financial institution and submitted annually to the Bureau, which shall make it
available for public disclosure.
(Sec. 1072) Amends the Housing and Economic Recovery Act of 2008 to include
economically vulnerable individuals and families among the groups targeted for
financial education and counseling.

(Sec. 1073) Amends the Electronic Fund Transfer Act to prescribe mandatory
disclosures for remittance transfers. Directs the Federal Reserve Board to work with
the federal reserve banks and the Department of the Treasury to expand the use of
the automated clearinghouse system and other payment mechanisms for
remittance transfers to foreign countries. Instructs the Director to report to the
President and Congress on the feasibility of and impediments to use of remittance
history in calculation of a consumer's credit score.

(Sec. 1074) Directs the Secretary of the Treasury to study specified options for
ending the conservatorship of the Federal National Mortgage Association (Fannie
Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), while
minimizing the cost to taxpayers.

(Sec. 1075) Amends the Electronic Fund Transfer Act to authorize the Federal
Reserve Board to prescribe regulations: (1) for interchange transaction (swipe) fees
that an issuer may receive or charge with respect to an electronic debit transaction
(EDT); and (2) to prevent circumvention or evasion of swipe fees. Requires a swipe
fee to be reasonable and proportional to the issuer's cost with respect to an EDT,
but allows adjustments for fraud prevention costs. Prescribes considerations
affecting such rulemaking.

Exempts from such requirements: (1) small issuers whose assets are less than $10
billion; and (2) government-administered payment programs and reloadable
prepaid cards.

Authorizes the Board to prescribe regulations to prevent the use of network fees to
compensate an issuer with respect to an EDT or to circumvent or evade the
restrictions of this subtitle.

Requires the Board to prescribe regulations prohibiting a payment card network
from: (1) restricting the number of payment card networks on which an EDT may
be processed to one or to two or more owned or controlled by affiliates (exclusivity
arrangements); (2) inhibiting the ability of any person who accepts debit cards to
direct the routing of EDTs for processing over any payment card network; (3)
inhibiting the ability of any person to provide a discount or in-kind incentive for
payment by the use of cash, checks, debit cards, or credit cards; or (2) restricting
transaction minimums or maximums.

(Sec. 1076) Directs the Bureau to study reverse mortgage transactions and
prescribe related regulations.

(Sec 1077) Requires the Director and the Secretary of Education to report to
Congress on specified aspects of private education loans and private educational
lenders.
(Sec. 1078) Directs the Bureau to study: (1) the nature, range, and size of
variations between the credit scores sold to creditors and those sold to consumers
by nationwide consumer reporting agencies; and (2) whether such variations
disadvantage consumers.

(Sec. 1079) Requires the Director to:: (1) review all federal laws and regulations
relating to the protection of consumers who use exchange facilitators for
transactions primarily for personal, family, or household purposes; and (2)
recommend measures to ensure protection of consumers who use such exchange
facilitators.

Defines an exchange facilitator as a person that maintains an office or advertises
services to facilitates, for a fee, an exchange of like kind property by entering into
an agreement with a taxpayer by which the exchange facilitator: (1) acquires
contractual rights to sell the taxpayer's relinquished property and transfers to the
taxpayer, as a qualified intermediary, a replacement property; (2) takes title to a
property as an exchange accommodation titleholder; or (3) acts as a qualified
trustee or qualified escrow holder.

(Sec. 1079A) Requires the U.S. Sentencing Commission to review and, if
appropriate, amend the Federal Sentencing Guidelines and policy statements
applicable to persons convicted of: (1) offenses relating to securities fraud, in order
to reflect the intent of Congress that penalties for the offenses appropriately
account for their potential and actual harm to the public and the financial markets;
and (2) fraud offenses relating to financial institutions or federally related mortgage
loans, to reflect the intent of Congress that the penalties for the offenses ensure
appropriate terms of imprisonment for offenders involved in substantial bank frauds
or other frauds relating to financial institutions.

Amends federal criminal law to set the statute of limitations for securities fraud
violations at six years after the commission of the offense.

Subtitle H: Conforming Amendments - Makes conforming amendments to
specified Acts to reflect the provisions of this Act.

Title XI: Federal Reserve System Provisions - (Sec. 1101) Amends the Federal
Reserve Act (FRA) to modify the Federal Reserve Board’s emergency lending
authorities.

Requires the Board to establish, by regulation, the policies and procedures
governing emergency lending, to ensure that any emergency lending program or
facility is for the purpose of providing liquidity to the financial system, and not to
aid a failing financial company, and that the security for emergency loans is
sufficient to protect taxpayers from losses and that any such program is terminated
in a timely and orderly fashion.

Requires the Board to establish procedures to prohibit borrowing programs and
facilities by insolvent borrowers.
Prohibits the Board from establishing any program or facility without the prior
approval of the Secretary of the Treasury.

Prescribes a detailed report which the Board must present to Congress regarding
the amount and terms of financial assistance granted to a financial entity.

(Sec. 1102). Authorizes the Comptroller General to conduct audits and onsite
examinations, if appropriate, of the Federal Reserve Board, a federal reserve bank,
or a credit facility, solely for the purposes of assessing: (1) the operational
integrity, accounting, financial reporting, and internal controls governing special
Federal Reserve credit facilities or a covered transaction (any open market
transaction or discount window advance); (2) the effectiveness of the security and
collateral policies established for the facility or covered transaction in mitigating risk
to the Federal Reserve bank and taxpayers; (3) whether the credit facility or the
conduct of a covered transaction inappropriately favors one or more specific
participants over other institutions eligible to utilize the facility; and (4) the policies
governing the use, selection, or payment of third-party contractors by or for any
credit facility or to conduct any covered transaction. Requires the Comptroller to
report to Congress on each such audit.

Declares certain nondisclosure obligations inapplicable to the credit facilities Maiden
Lane, Maiden Lane II, and Maiden Lane III.

(Sec. 1103) Amends the FRA to direct the Federal Reserve Board to make
accessible to the public: (1) a webpage serving as a repository of information for at
least six months following release of certain financial reports (including reports
relating to emergency lending authority); and (2) information concerning borrowers
and counterparties participating in emergency credit facilities, discount window
lending programs, and open market operations authorized or conducted by the
Board or a federal reserve bank.

Directs the Inspector General of the Board to study the impact that the FOIA
exemption for information concerning such borrowers and counterparties has had
on the ability of the public to access information about Federal Reserve Board
administration of emergency credit facilities, discount window lending programs,
and open market operations.

(Sec. 1104) Authorizes the Secretary of the Treasury to request the FDIC and the
Board to determine whether a liquidity event exists that warrants use of a widely
available program to guarantee obligations of solvent insured depository institutions
or solvent depository institution holding companies during times of severe economic
distress.

(Sec. 1105) Directs the FDIC, upon its determination together with the Board, to
create such a program. Prohibits such a guarantee of obligations, however, from
including the provision of equity in any form.
Prescribes procedures for creation of such a program, as well as a fast track
legislative process for adoption of a request for guarantees.

Requires the FDIC to charge fees and other assessments to all program
participants.

(Sec. 1106) Requires the FDIC, upon default of an insured depository institution or
depository institution holding company participant in either the emergency financial
stabilization program, or in a statutory debt guarantee program, to: (1) appoint
itself as receiver for such institution; and (2) with respect to any other participant
in default that is not an insured depository institution, to require a bankruptcy
process for resolving the company.

(Sec. 1107) Requires the president of a Federal Reserve Bank to be appointed by
its Class B and Class C directors, with the Federal Reserve Board's approval.

(Sec. 1108) Amends the FRA to require the President to designate two Vice
Chairmen of the Federal Reserve Board (currently only one). Establishes the
position of Vice Chairman for Supervision to: (1) develop policy recommendations
for the Board regarding supervision and regulation of depository institution holding
companies and other financial firms supervised by the Board; and (2) oversee the
supervision and regulation of such firms.

Prohibits the Board from delegating to a Federal Reserve Bank its functions for the
establishment of policies for the supervision and regulation of depository institution
holding companies and other financial firms supervised by the Board.

(Sec. 1109) Directs the Comptroller to conduct a one-time audit of, and report to
Congress on, all financial assistance provided between December 1, 2007 and the
date of enactment of this Act by either the Board or a Federal Reserve Bank under
the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility,
the Term Asset-Backed Securities Loan Facility, the Primary Dealer Credit Facility,
the Commercial Paper Funding Facility, the Term Securities Lending Facility, the
Term Auction Facility, Maiden Lane, Maiden Lane II, Maiden Lane III, the agency
Mortgage-Backed Securities program, foreign currency liquidity swap lines, and
certain other programs. Requires the Federal Reserve Board to publish on its
website specified information about such assistance and its recipients.

Directs the Comptroller to audit and report to Congress on the governance of the
Federal Reserve Bank System.

Title XII: Improving Access to Mainstream Financial Institutions - Improving
Access to Mainstream Financial Institutions Act of 2010 - (Sec. 1202) Authorizes
the Secretary to establish a multiyear program of grants, cooperative agreements,
and financial agency agreements to: (1) promote initiatives that enable low- and
moderate-income individuals to establish accounts in a federally insured depository
institution and improve access to the provision of accounts on reasonable terms;
and (2) provide low-cost, small loans to consumers as alternatives to more costly
small dollar loans.

Authorizes the Secretary also to implement measures or programs designed to
expanded access to financial literacy and education opportunities for individuals
who obtain loans, including counseling services, educational courses, or wealth
building programs.

(Sec. 1206) Amends the Community Development Banking and Financial
Institutions Act of 1994 to require the Community Development Financial
Institutions Fund (Fund in this title) to make grants to community development
financial institutions to: (1) enable them to establish a loan-loss reserve fund in
order to defray the costs of establishing a small dollar loan program; and (2) help
them maintain a small dollar loan program.

Prescribes: (1) a 50% matching requirement; and (2) use of Fund grants. Prohibits
a recipient institution from providing direct loans to consumers.

(Sec. 1208) Authorizes appropriations.

Title XIII: Pay It Back Act - Pay It Back Act - (Sec. 1302) Amends the
Emergency Economic Stabilization Act of 2008 (EESA) to reduce to $472 billion the
authority of the Secretary of the Treasury to purchase troubled assets under the
Troubled Asset Relief Program (TARP).

Prohibits reducing the amount of authority considered to be exercised by the
Secretary by: (1) any amounts received by the Secretary from repayment of the
principal of financial assistance by a recipient under any EESA program; (2) any
amounts committed for any TARP guarantee that became or become uncommitted;
or (3) any losses realized by the Secretary.

Prohibits using EESA authority to incur any obligation for a program or initiative
that was not initiated before June 25, 2010.

(Sec. 1303) Requires the Secretary to report to Congress every six months on
transfer to the Treasury’s General Fund for reduction of the public debt of revenues
of, and proceeds from the sale of troubled assets purchased under TARP, or from
the sale, exercise, or surrender of warrants or senior debt instruments acquired
under TARP.

(Sec. 1304) Amends the Federal National Mortgage Association Charter Act, the
Federal Home Loan Mortgage Corporation Act, and the Federal Home Loan Bank Act
to require the Secretary to deposit in the Treasury solely for debt reduction any
amounts received by the Secretary for the sale of any obligation or security
acquired from the Federal National Mortgage Association (Fannie Mae), the Federal
Home Loan Mortgage Corporation (Freddie Mac), or a Federal Home Loan Bank for
secondary market operations. Prohibits the use of any such amounts as an offset
for other spending increases or revenue reductions.
Requires deposit in the Treasury solely for debt reduction of any periodic
commitment fee or any other fee or assessment paid to the Secretary by Fannie
Mae or Freddie Mac as a result of any preferred stock purchase agreement,
mortgage-backed security purchase program, or any other program or activity
under the Housing and Economic Recovery Act of 2008.

(Sec. 1305) Requires the Director of the Federal Housing Finance Agency (FHFA) to
report to Congress on FHFA plans to continue to support the nation's vital housing
industry, while at the same time guaranteeing that the American taxpayer will not
suffer unnecessary losses.

(Sec. 1306) Amends the American Recovery and Reinvestment Act of 2009 (ARRA)
to require: (1) rescission of any ARRA (stimulus) funds offered to but not accepted
by the governor or legislature of a state; and (2) their deposit in the Treasury
solely for debt reduction. Requires the same treatment for any funds withdrawn or
recaptured by an executive agency head which have not been obligated by a state
to a local government or for a specific project.

Rescinds for deposit in the Treasury solely for debt reduction specified discretionary
appropriations that have not been obligated as of December 31, 2012.

Authorizes the President to waive repayment of unobligated funds if the President
determines that it is not in the best interest of the Nation to rescind a specific
unobligated amount after December 31, 2012.

Title XIV: Mortgage Reform and Anti-Predatory Lending Act - Mortgage
Reform and Anti-Predatory Lending Act - Designates specified subtitles and sections
of Title XIV as enumerated consumer law falling within the purview of the Bureau of
Consumer Financial Protection (Bureau) for purposes of Title X of this Act.

Subtitle A: Residential Mortgage Loan Origination Standards - (Sec. 1402)
Amends the Truth in Lending Act (TILA) to prescribe fiduciary standards applicable
to originators of residential mortgages.

Instructs the Federal Reserve Board to prescribe regulations requiring depository
institutions to establish procedures to assure and monitor compliance with this Act.

(Sec. 1403) Prohibits: (1) steering incentives in connection with residential
mortgage loan origination;and (2) restructuring of a financing origination fee,
except in certain circumstances.

Directs the Board to prohibit specified mortgage origination practices, including
steering a consumer to a residential mortgage loan that: (1) the consumer lacks a
reasonable ability to repay; or (2) has predatory characteristics or effects (such as
equity stripping, excessive fees, or abusive terms).
(Sec. 1404) Sets forth the maximum liability of a mortgage originator to a
consumer for violation of the residential mortgage loan origination requirements of
this title, in addition to court costs and attorney fees, at the greater of: (1) actual
damages; or (2) three times the total amount of direct and indirect compensation
or gain accruing to the originator in connection with the loan involved.

(Sec. 1405) Requires the Board to prohibit or condition terms, acts, or practices
relating to residential mortgage loans that are found to be either: (1) abusive,
unfair, deceptive, predatory; or (2) necessary or proper to ensure that responsible,
affordable mortgage credit remains available to consumers in a manner consistent
with Board-prescribed minimum standards for residential mortgage loans to prevent
their circumvention or evasion or to facilitate compliance with them; or (3) not in
the borrower's interest.

(Sec. 1406) Requires the Secretary of Housing and Urban Development (HUD) to
study regulatory requirements that would provide: (1) widespread use of shared
appreciation mortgages to strengthen local housing markets; (2) new opportunities
for affordable home ownership; and (3) homeowners at risk of foreclosure with the
ability to refinance or modify their mortgages.

Subtitle B: Minimum Standards for Mortgages - (Sec. 1411) Prescribes
minimum standards for residential mortgage loans, including a requirement that a
residential mortgage loan creditor: (1) make a reasonable and good faith
determination based upon verified and documented information that the consumer
has a reasonable ability to repay all loans on the same dwelling and applicable
taxes, insurance (including mortgage guarantee insurance), and assessments; (2)
use a fully amortizing repayment schedule for purposes of determining a
consumer's ability to repay a variable rate loan that defers repayment of principal
or interest; and (3) verify amounts of income or assets upon which such creditor
relies to determine repayment ability by reviewing the consumer's Internal Revenue
Service Form W-2, tax returns, payroll receipts, financial institution records, or
other third-party documents that provide reasonably reliable evidence of the
consumer's income or assets.

Exempts from the income verification requirement under certain conditions: (1)
streamlined refinancings made by certain federal departments or agencies, and (2)
reverse mortgages and bridge loans,.

(Sec. 1412) Authorizes any creditor or assignee subject to liability under this Act
with respect to any residential mortgage loan to presume that it has met the
minimum standards for such a loan if it is a qualified mortgage meeting specified
criteria that does not result in a balloon payment.

Authorizes the Board by regulation to include as a qualified mortgage any balloon
loan meeting the same specified criteria if it meets certain other criteria as well,
including that it is extended by a creditor operating predominantly in rural or
underserved areas.
(Sec. 1413) Authorizes a consumer, in a foreclosure proceeding on a residential
mortgage loan, to assert as a matter of defense by recoupment or set off without
regard for the time limit on a private action for damages under TILA, that the
foreclosure-initiating creditor, assignee, or other holder of the mortgage: (1)
violated the prohibition against certain steering incentives, or (2) failed to make a
reasonable and good faith determination that the consumer had a reasonable ability
to repay the mortgage.

(Sec. 1414) Prohibits specified practices, including: (1) certain prepayment
penalties on specified mortgage loans; (2) single premium credit insurance; (3)
mandatory arbitration or other nonjudicial procedure (except for reverse
mortgages); (4) residential mortgage loan terms that waive a statutory cause of
action by the consumer; and (5) mortgages with negative amortization (except,
again, for reverse mortgages), unless certain disclosures are made and a first-time
borrower receives home ownership counseling.

Excludes from the meaning of qualified mortgage for these purposes any residential
mortgage loan with: (1) an adjustable rate; or (2) an annual percentage rate (APR)
exceeding the average prime offer rate for a comparable transaction, as of the date
the interest rate is set according to a specified formula. Requires publication of
average prime offer rates and APR thresholds.

Requires a creditor or mortgage originator, before loan consummation or loan
refinancing, to disclose the protection provided by a state anti-deficiency law and
its significance for the consumer upon the loss of that protection. (A state anti-
deficiency law shields a consumer mortgagor from liability for any deficiency
between a foreclosure sale price and the outstanding balance of the mortgage.)

Requires a residential mortgage loan creditor to disclose before settlement: (1) the
creditor's policy regarding partial payments and their application to the mortgage,
and (2) whether partial payments will be placed in escrow.

(Sec. 1416) Doubles civil money penalties for certain violations.

(Sec. 1417) Shields a creditor, assignee, or securitizer from liability and rescission
in the case of a borrower convicted of obtaining residential mortgage loan by fraud
or deception.

(Sec. 1418) Requires a six-month notice period before a hybrid adjustable rate
mortgage is reset.

(Sec. 1419) Prescribes creditor disclosures for: (1) variable rate residential
mortgage loans for which an escrow or impound account will be established to pay
taxes, insurance, and assessments; and (2) periodic statements for residential
mortgage loans.

(Sec. 1421) Directs the Comptroller General to study the effects that enactment of
this Act will have upon the availability and affordability of credit for consumers,
small businesses, home buyers, and mortgage lending, including the effect upon:
(1) the mortgage market for mortgages that are not within the safe harbor
provided in this Act; (2) the ability of prospective home buyers to obtain financing;
and (3) the refinance ability of homeowners facing resets or adjustments.

(Sec. 1422) Authorizes state attorneys general to bring an action to enforce the
requirements of subtitle A (residential mortgage loan origination) and subtitle B
(minimum standards for residential mortgage loans).

Subtitle C: High-Cost Mortgages - (Sec. 1431) Prescribes standards for points
and fees related to: (1) high-cost mortgages; (2) open-end consumer credit plans;
and (3) bona fide discount points and prepayment penalties.

(Sec. 1432) Repeals the allowance of prepayment penalties for certain mortgages.

Prohibits a high-cost mortgage from containing a scheduled payment that is more
than twice as large (balloon payment) as the average of earlier scheduled
payments.

(Sec. 1433) Prescribes additional requirements for certain mortgages.

Prohibits a creditor from: (1) recommending default on an existing debt prior to and
in connection with the closing of a high-cost mortgage that refinances any portion
of such debt; (2) imposing late payment fees in connection with a high-cost
mortgage except in compliance with specified requirements; (3) accelerating debt
on a high-cost mortgage (except in certain circumstances); or (4) financing, in
connection with any high-cost mortgage, either a prepayment fee or penalty
payable by the consumer if the creditor is the note holder of the note being
refinanced.

Prohibits the creditor of a high-cost mortgage from implementing certain evasions,
structured transactions, and reciprocal arrangements.

Prohibits a creditor from charging a consumer any fee to modify, renew, extend, or
amend a high-cost mortgage, or to defer any payment due under such mortgage.

Prohibits any fee for payoff statements other than a processing fee.

Requires a creditor, as a prerequisite to extending consumer credit under a high-
cost mortgage, to receive certification from a HUD-approved counselor that the
consumer has received counseling on the advisability of the mortgage.

Prescribes a procedure by which a high cost loan creditor or assignee that, acting in
good faith, commits an unintentional violation of these prohibitions and other
requirements may make timely corrections and avoid liability for the violation.
Subtitle D: Office of Housing Counseling - Expand and Preserve Home
Ownership Through Counseling Act - (Sec. 1442) Amends the Department of
Housing and Urban Development Act to establish within HUD the Office of Housing
Counseling, whose Director shall have primary responsibility for all activities and
matters relating to both home ownership and rental housing counseling.

(Sec. 1443) Amends the Housing and Urban Development Act of 1968 to require
the HUD Secretary to: (1) prescribe counseling procedures for home ownership and
rental counseling; and (2) provide for certification of computer software programs
for consumers to evaluate different residential mortgage loan proposals.

Requires the Director to: (1) develop and conduct national public service
multimedia campaigns promoting housing counseling; and (2) use specified funds
to conduct foreclosure rescue education programs, with emphasis upon retirement
and low-income minority communities. Authorizes appropriations for FY2009-
FY2011.

(Sec. 1444) Requires the HUD Secretary to provide financial assistance (grants) to
HUD-approved housing counseling agencies and state housing finance agencies that
offer home ownership and rental counseling.

Authorizes appropriations for FY2009-FY2012 for: (1) the Office of Housing
Counseling; (2) the Director of Housing Counseling; and (3) assistance to entities
providing home ownership and rental counseling.

(Sec. 1445) Requires an organization that receives federal assistance for counseling
activities to be HUD-certified.

(Sec. 1446) Directs the HUD Secretary to study and report to Congress on: (1) the
root causes of home loan defaults and foreclosures, including the role of escrow
accounts in helping prime and nonprime borrowers to avoid defaults and
foreclosures; and (2) the role of computer registries of mortgages, including those
used for trading mortgage loans.

(Sec. 1447) Directs the HUD Secretary and the CFPB Director to establish on a
census tract basis a default and foreclosure database on mortgage loans for one- to
four-unit residential properties, and to make such information publicly available.

(Sec. 1449) Directs the Secretary to develop a funds-tracking system, including
accountability and transparency criteria, to ensure that grant recipients use all
amounts of financial assistance in accordance with specified requirements.

(Sec. 1450) Amends the Real Estate Settlement Procedures Act of 1974 (RESPA) to
require the CFPB Director to: (1) prepare, at least once every five years, a booklet
to help federally related mortgage loan applicants of different ethnic and cultural
backgrounds to understand the nature and costs of real estate settlement services;
and (2) distribute to all lenders that make federally related mortgage loans both the
booklets and lists of HUD-certified home ownership counselors.
(Sec. 1451) Requires the HUD Secretary to take necessary steps to inform potential
home buyers, through FHA-approved mortgage lenders, of the availability and
importance of obtaining an independent home inspection.

(Sec. 1452) Allocates specified funds to the Neighborhood Reinvestment
Corporation for activities to make borrowers who are delinquent on certain loans
aware of the dangers of fraudulent activities associated with foreclosure.

Subtitle E: Mortgage Servicing - (Sec. 1461) Amends TILA to require a creditor
in a non-credit card consumer credit transaction secured by a first lien on the
principal dwelling (other than a reverse mortgage) to establish an escrow or
impound account for mandatory periodic payments or premiums (including taxes,
insurance, and ground rents). Allows exemptions from this requirement for
creditors that operate predominantly in rural or underserved areas and retain their
mortgage originations in portfolio.

Prohibits making an escrow or impound account a condition of a real property sale
contract or a loan secured by a first deed of trust or mortgage on the consumer's
principal dwelling unless specified circumstances exist.

Requires such escrow or impound account to remain in existence for at least five
years until sufficient equity exists so that private mortgage insurance is no longer
required, or unless the underlying mortgage is terminated.

States that: (1) escrow accounts need not be established for loans secured by
shares in a cooperative; and (2) insurance premiums need not be included in
escrow accounts for loans secured by condominium units if the condominium
association has an obligation to unit owners to maintain a master insurance policy.

Requires: (1) escrow accounts to be established in a federally insured depository
institution or credit union; and (2) each creditor to pay interest on the amount held
in such accounts as required by state or federal law.

Requires specified consumer disclosures regarding a mandatory escrow or impound
account before consummation of the credit transaction giving rise to such account.

(Sec. 1462) Requires creditors to provide specified disclosures for consumers who
waive escrow services.

(Sec. 1463) Amends RESPA to prohibit the servicer of a federally related mortgage
from engaging in certain practices, including obtaining force-placed hazard
insurance, unless there is reason to believe the borrower has failed to comply with
the loan contract requirements. (Force-placed hazard insurance is coverage
obtained by the servicer when the borrower has failed to comply with hazard
insurance requirements under the terms of the mortgage.)
Prescribes notice and borrower non-response requirements for loan servicers to
obtain force-placed insurance.

Doubles the penalties for loan servicer noncompliance with RESPA disclosure
requirements.

Reduces from 20 days to 5 days the time limit within which loan servicers are
required to respond to borrower inquiries.

Requires any remaining escrow balance that is within the control of the loan
servicer at the time the loan is paid off to be: (1) promptly returned to the
borrower within 20 business days; or (2) credited to a similar account for a new
mortgage loan to the borrower with the same lender.

(Sec. 1464) Amends TILA to prohibit a loan servicer, except in a specified
circumstance, from failing to credit a payment to the consumer's account as of the
date of receipt.

Requires a creditor or servicer of a home loan to send an accurate payoff balance
no later than seven business days after receipt of a written request for it.

(Sec. 1465) Requires repayment disclosures regarding a first mortgage- or lien-
secured consumer credit transaction to take into account the amount of monthly
escrow payments, including: (1) the taxable assessed value of the real property
securing the transaction after consummation of the transaction, (2) the value of
any improvements on the property or to be constructed on it, and (3) the
replacement costs of the property for hazard insurance in the initial year after the
transaction.

Subtitle F: Appraisal Activities - (Sec. 1471) Amends TILA to set forth property
appraisal requirements for a creditor who extends higher-risk mortgage credit to a
consumer, including: (1) a written appraisal performed by a certified or licensed
appraiser who conducts a physical property visit of the interior of the mortgaged
property; (2) a free copy of such appraisal to the applicant before the transaction
closing date; and (3) a statement by the creditor at the time of the initial mortgage
application that the appraisal is for its sole use, and that the applicant, at its own
expense, may choose to have a separate appraisal.

Requires a creditor to obtain a second appraisal from a different certified or licensed
appraiser if the purpose of a higher-risk mortgage (other than a HUD-insured
reverse mortgage) is to finance the purchase or acquisition of the mortgaged
property from a person within 180 days of the purchase or acquisition of such
property by that person at a price lower than the current sale price of the property.

(Sec. 1472)Prescribes appraisal independence requirements. Declares unlawful
specified acts or practices that violate such requirements in connection with a
consumer credit transaction secured by the consumer's principal dwelling.
Includes among unfair and deceptive practices any appraisal of a property offered
as security in which a person with an interest in the underlying transaction
compensates, coerces, extorts, colludes, instructs, induces, bribes, or intimidates a
person conducting or involved in the appraisal.

Includes, in addition, among such practices: (1) mischaracterizing, or suborning
mischaracterization of, the appraised value of the property securing the extension
of the credit; (2) seeking to influence an appraiser or otherwise to encourage a
targeted value in order to facilitate the transaction; and (3) withholding or
threatening to withhold timely payment for an appraisal report or for appraisal
services rendered.

Prohibits a certified or licensed appraiser or appraisal management company from
having an interest, financial or otherwise, in the property or transaction involving
the appraisal.

Authorizes the Board, the CFPB, and designated federal agencies to jointly issue
regulations addressing the issue of appraisal report portability, including regulations
that ensure such portability between lenders for a consumer credit transaction
secured by a 1-4 unit single family residence that is the principal dwelling of the
consumer, or mortgage brokerage services for such a transaction.

Subjects to civil penalties violations of appraisal independence requirements.

Declares that the deference that a court accords to the CFPB with respect to its
determination of the meaning or interpretation of any TILA provisions (except
property appraisal requirements) shall be applied as if the CFPB were the only
agency authorized to apply, enforce, interpret, or administer such provisions.

(Sec. 1473) Amends the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 (FIRREA) to condition the establishment by a federal financial
institutions regulatory agency and the Resolution Trust Corporation of a threshold
level at or below which a certified or licensed appraiser is not required to perform
appraisals in connection with federally related transactions on the agency's
receiving concurrence from the CFPB that such threshold level provides reasonable
protection for consumers who purchase 1-4 unit single-family residences.

Directs the Appraisal Subcommittee of the Federal Financial Institutions
Examination Council (FFIEC) to detail in its annual report to Congress: (1) the
results of all audits of state appraiser regulatory agencies; and (2) an accounting of
disapproved actions and warnings taken in the previous year, including the
conditions causing the disapproval and the actions taken to achieve compliance.

Requires Subcommittee meetings to be open to the public, but authorizes the
closing of certain portions related to personnel and review of preliminary state audit
reports.
Requires the Subcommittee to: (1) monitor state requirements for the registration
and supervision of an appraisal management company; and (2) maintain a national
registry of appraisal management companies that either are registered with and
subject to supervision of a state appraiser certifying and licensing agency or are
operating subsidiaries of a federally regulated financial institution.

Directs designated federal financial regulatory agencies, including the Federal
Reserve Board and the CFPB, to jointly establish, by rule, minimum requirements a
state must apply in the registration of appraisal management companies. Applies
these same requirements to, and exempts from any state registration requirement,
an appraisal management company that is a subsidiary owned and controlled by a
financial institution and regulated by a federal financial institution regulatory age
ncy.

Sets forth: (1) registration limitations; (2) additional state agency reporting
requirements; and (3) revised registry fees.

Authorizes the Subcommittee to award grants to state appraiser certifying and
licensing agencies in order to support their compliance with this Act.

Requires the requirements for state licensing of an appraiser to meet or exceed the
minimum cr iteria issued by the Appraisal Qualifications Board of The Appraisal
Foundation for the licensing of real estate appraisers.

Requires the Subcommittee to monitor whether each state appraiser certifying and
licensing agency: (1) processes complaints and completes investigations in a
reasonable time period; (2) appropriately disciplines sanctioned appraisers and
appraisal management companies; (3) maintains an effective regulatory program;
and (4) reports complaints and disciplinary actions on a timely basis to the national
registries on appraisers and appraisal management companies.

Authorizes the Subcommittee to: (1) remove a state licensed or certified appraiser
or a registered appraisal management company from a national registry on an
interim basis pending state agency action on licensing, certification, registration,
and disciplinary proceedings; (2) impose sanctions against a state agency that fails
to have an effective appraiser regulatory program; and (3) impose interim actions
and suspensions against a state agency as an alternative to, or in advance of,
derecognition of a state agency.

Prohibits appraisal of a federally related transaction by a state- certified or -licensed
appraiser unless the state appraiser certifying or licensing agency has in place a
policy of issuing a reciprocal certification or license for an individual from another
state who meets certain state licensure standards.

Requires the Subcommittee to monitor each state appraiser certifying and licensing
agency to determine whether: (1) its policies, practices, and procedures are
consistent with maintaining appraiser independence; and (2) such state has
effective regulations, and policies regarding the maintenance of appraiser
independence.

Requires the Subcommittee to establish and operate an Appraisal Complaint
National Hotline, including a toll-free telephone number and an email address.

Requires designated federal financial institution regulatory agencies, including the
CFPB and the Subcommittee,to promulgate regulations to implement quality control
standards governing automated valuation models (computerized models used by
mortgage originators and secondary market issuers to determine the collateral
worth of a mortgage secured by a consumer's principal dwelling).

Prohibits the use of broker price opinions as the primary basis to evaluate property
for loan origination in connection with a residential mortgage loan secured by such
property. (Defines broker price opinion as an estimate prepared by a real estate
broker, agent, or sales person that: (1) details the probable selling price of a
particular piece of real estate property; and (2) provides a varying level of detail
about the property's condition, market, and neighborhood, and information on
comparable sales; but (3) does not include an automated valuation model.)

Amends the Federal Financial Institutions Examination Council Act of 1978 to
require that at all times at least one member of the Appraisal Subcommittee have
demonstrated knowledge and competence through licensure, certification, or
professional designation within the appraisal profession.

(Sec. 1474) Amends the Equal Credit Opportunity Act (ECOA) to revise
requirements that creditors provide loan applicants a copy of the appraisal report
used in connection with the loan application secured by a lien on residential real
property. Repeals the condition that the loan applicant request the copy. Requires a
creditor to furnish the applicant with a copy of all written appraisals and valuations
within three days after the closing of the loan.

(Sec. 1475) Amends RESPA to permit the standard real estate settlement form to
disclose, in the case of an appraisal coordinated by an appraisal management
company, the fee paid directly by the company to the appraiser and the company's
administration fee.

(Sec. 1476) Instructs the Government Accountability Office to study : (1) the
effectiveness and impact of certain appraisal methods, models, and distribution
channels; (2) the Home Valuation Code of Conduct (HVCC); and (3) certain
Appraisal Subcommittee functions, including its ability to monitor and enforce state
and federal certification requirements and standards.

Subtitle G: Mortgage Resolution and Modification - (Sec. 1481) Directs the
HUD Secretary to develop a program to ensure protection of current and future
tenants and at-risk multifamily properties.
Denies persons convicted within the last 10 years of specified crimes involving a
mortgage or real estate transaction any eligibility for mortgage assistance from the
Making Home Affordable Program authorized or funded by the Emergency Economic
Stabilization Act of 2008.

(Sec. 1482) Instructs the Secretary of the Treasury to revise the supplemental
directives and other guidelines for the Home Affordable Modification Program
(HAMP) of the Making Home Affordable initiative to require each mortgage servicer
participating in HAMP to provide each borrower denied a mortgage modification
with all borrower-related and mortgage-related input data used in any net present
value (NPV) analyses performed in connection with the mortgage.

Directs the Secretary to establish a public website that provides: (1) a calculator for
NPV analyses of a mortgage, based on the Secretary's methodology for calculating
such value, that mortgagors can use to enter information regarding their own
mortgages; and (2) a determination after entering such information of whether
such mortgage would be accepted or rejected for modification under the Program.

(Sec. 1483) Directs the Secretary of the Treasury to revise the HAMP guidelines to
make public the data being collected from each participating mortgage servicer and
lender.

(Sec. 1484) Amends the Protecting Tenants at Foreclosure Act with respect to the
requirement that any immediate successor in interest in residential real property
pursuant to foreclosure of a federally-related mortgage loan assume that interest
subject to certain conditions. Deems the date of a notice of such a foreclosure to be
the date upon which complete title to a property is transferred to a successor entity
or person as a result of a court order or pursuant to provisions in a mortgage, deed
of trust, or security deed.

Subtitle H: Miscellaneous Provisions - (Sec. 1491) Expresses the sense of
Congress that efforts to enhance the terms of residential mortgage credit and
practices would be incomplete without enactment of meaningful structural reforms
of the Federal National Mortgage Association (Fannie Mae) and the Federal Home
Loan Mortgage Corporation (Freddie Mac).

(Sec. 1492) Directs the Comptroller General to study certain interagency efforts to
crackdown on mortgage foreclosure rescue scams and loan modification fraud in
order to advise Congress on the risks and vulnerabilities of emerging schemes in
the loan modification arena.

(Sec. 1493) Amends the Helping Families Save Their Homes Act of 2009 to require
each state to report certain mortgage data.

(Sec. 1494) Directs the HUD Secretary to study the effect upon residential
mortgage loan foreclosures of: (1) the presence of drywall imported from China
between 2004 and the end of 2007; and (2) the availability of property insurance
for residential structures in which such drywall is present.
(Sec. 1496) Makes necessary sums available to the HUD Secretary to: (1) provide
$1 billion in emergency mortgage assistance through the Emergency Homeowners'
Relief Fund for such purpose.

Amends the Emergency Housing Act of 1975 to permit emergency mortgage
assistance if the mortgagor has incurred a substantial reduction in income as a
result of involuntary unemployment or underemployment due to medical conditions.

Revises requirements for emergency mortgage assistance to replace the maximum
amount of $250 per month with an amount determined reasonably necessary to
supplement what the homeowner is capable of contributing toward the mortgage
payment. Caps the aggregate amount of such assistance to any homeowner at
$50,000.

Makes the interest rate fixed for the life of an insured loan or credit advance. Limits
the interest rate to that generally charged for HUD-insured mortgages on single-
family housing. Prohibits the charging of any interest on deferred interest on such a
loan or credit advance. Requires the Secretary, in establishing rates, terms, and
conditions for loans or advances of credit, to take into account a homeowner's
ability to repay such loan or credit advance.

Authorizes any eligible homeowner who receives such a grant or credit advance to
repay the loan in full, without penalty, by lump sum or by installment payments at
any time before it becomes due and payable.

Repeals the 40% cap on the total amount of loans and credit advances by a
financial institution that may be insured, and the 90% cap on the payment of any
single loss claim that may be paid out.

Increases from $1.5 billion to $3 billion the cap on the aggregate amount of insured
loans and advances, but includes emergency mortgage relief payments in such
amount.

Directs the Secretary to establish underwriting guidelines or procedures to allocate
amounts made available for incurred loans and advances and for emergency relief
payments, based on the likelihood that a mortgagor will be able to resume
mortgage payments.

Repeals the authorization of appropriations for the emergency mortgage relief
program, but extends through FY2011 the authority to insure loans and credit
advances under the program and to make emergency mortgage relief payments.

Repeals the authority of each federal supervisory agency to waive or relax
limitations pertaining to their operations with respect to mortgage delinquencies in
order to cause or encourage forebearance in residential mortgage loan foreclosures.
Repeals certain reporting requirements as well as the authority of the FDIC to make
credit advances to insured banks to facilitate their participation in the emergency
mortgage relief program.
(Sec. 1497) Makes $1 billion available to the HUD Secretary for assistance to state
and local governments for the redevelopment of abandoned and foreclosed homes.

(Sec. 1498) Directs the HUD Secretary to establish a grants program to provide a
full range of foreclosure legal assistance to low- and moderate-income homeowners
and tenants related to home ownership preservation, home foreclosure prevention,
and tenancy associated with home foreclosure. Authorizes appropriations for
FY2009-FY2012.

Title XV: Miscellaneous Provisions - (Sec. 1501) Amends the Bretton Woods
Agreements Act to direct the Secretary of the Treasury to instruct the United States
Executive Director at the International Monetary Fund (IMF) to: (1) evaluate,
before consideration by the IMF Board of Executive Directors, any proposal to make
a loan to a country whose public debt exceeds its gross domestic product if that
country is not eligible for assistance from the International Development
Association; and (2) oppose the proposal if such evaluation indicates the proposed
loan is unlikely to be repaid in full.

Directs the Secretary to assess annually to Congress the likelihood that loans made
pursuant to such proposals will be repaid in full.

(Sec. 1502) Expresses the sense of Congress that the exploitation and trade of
conflict minerals originating in the Democratic Republic of the Congo (DRC) helps
finance conflict characterized by extreme levels of violence in the eastern DRC ,
particularly sexual- and gender-based violence, and contributes to an emergency
humanitarian situation therein, warranting certain disclosures under the Securities
Exchange Act of 1934.

Amends the Securities Exchange Act of 1934 to direct the SEC to issue regulations
requiring persons for which conflict minerals are necessary to the functionality or
production of a product manufactured by that person to make annual disclosures of
whether any such conflict minerals originated in the DRC or an adjoining country.
Requires the report, regarding any minerals that did originate in the DRC or an
adjoining country, to describe: (1) due diligence measures taken on the source and
chain of custody of such minerals; and (2) the products manufactured, or
contracted to be manufactured, that are not DRC conflict free. Defines "DRC conflict
free" as products that do not contain minerals that directly or indirectly finance or
benefit armed groups in the DRC or an adjoining country.

Instructs the Secretary of State to: (1) submit to Congress a strategy to address
the linkages between human rights abuses, armed groups, mining of conflict
minerals, and commercial products; (2) produce and update periodically a map,
available to the public, of mineral-rich zones, trade routes, and areas under the
control of armed groups in the DRC and adjoining countries ("Conflict Minerals
Map"); and (3) publish in the Federal Register a notice of intent to declare a
mineral a conflict mineral.
Directs the Comptroller General to assess for Congress: (1) the rate of sexual- and
gender-based violence in war-torn areas of the DRC and adjoining countries; and
(2) the effectiveness of these newly required reports in promoting peace and
security in such countries.

Requires the Secretary of Commerce to assess for Congress the accuracy of
independent private sector audits and other due diligence processes.

(Sec. 1503) Requires securities issuers required to report to the SEC that are coal
or other mine operators, or that have subsidiaries that are mine operators, to
include in periodic reports to the SEC, among other things, the total number per
mine of violations of mandatory health or safety standards that could significantly
and substantially contribute to the cause and effect of a mine safety or health
hazard for which the operator received a citation from the Mine Safety and Health
Administration. Requires reports, also, of imminent danger orders and written
notices of patterns of violations of such standards, or the potential to have such a
pattern.

(Sec. 1504) Amends the Securities Exchange Act of 1934 to direct the SEC to: (1)
promulgate final rules requiring each resource extraction issuer to include in its
annual report information, in an interactive data format, detailing any payment
made by the issuer, a subsidiary, or an entity under its control to a foreign
government or the federal government for the purpose of the commercial
development of oil, natural gas, or minerals; and (2) make a compilation of such
information publicly accessible online.

Authorizes appropriations.

(Sec. 1505) Directs the Comptroller General to assess for Congress: (1) the relative
independence, effectiveness, and expertise of presidentially appointed inspectors
general and inspectors general of designated federal entities; and (2) the effects on
independence of the amendments to the Inspector General Act of 1978 made by
this Act.

(Sec. 1506) Directs the FDIC to evaluate for Congress: (1) the definition of core
deposits for the purpose of calculating the insurance premiums of banks; (2) the
potential impact on the Deposit Insurance Fund of revising the definitions of
brokered deposits and core deposits to better distinguish between them; (3) the
differences between core deposits and brokered deposits and their role in the
economy and the domestic banking sector; (4) the potential stimulative effect on
local economies of redefining core deposits; and (5) the competitive parity between
large institutions and community banks that could result from redefining core
deposits.

Title XVI: Section 1256 Contracts - Amends the Internal Revenue Code to
exclude from the definition of a Section 1256 contract any interest rate swap,
currency swap, basis swap, interest rate cap, interest rate floor, commodity swap,
equity swap, equity index swap, credit default swap, or similar agreement. (Thus
shields such instruments from treatment as sold for its fair market value [marked
to market] on the last business day of the taxable year for capital gains or loss
taxation purposes).

								
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