Responsive Documents - CREW: Federal Reserve Board of Governors: Regarding Efforts To Influence Financial Regulatory Reform: 8/4/2011 - Part 4, 11-3-09 To 11-12-09, Cleared For Release

M n e t f m G K i a s Meeting request from Governor Kevin Warsh
M r n Margaret Owens to: kristen.chaplin 11/04/2009 09:08 AM

Sent by: a g r t w Margaret Owens
Cc: Tara W Foscato
Good Morning Kristen,
Governor Warsh would like to meet with Minority Leader Boehner to discuss the Fed's general perspective
on regulatory reform, with emphasis on systemic risk/bank regulation and resolution authority, and any
other matters Minority Leader Boehner would like to discuss. Please let me know if Minority Leader
Boehner is available December 8, 2009, between the hours of 1:30 p.m. - 5:30 p.m. Thank you.
_____________________________________
Margaret R. Owens
Executive Assistant to Kevin M. Warsh
Office of Board Members
Federal Reserve System
margaret.owens@frb.gov
"Living in the past paralyzes the present and bankrupts the future"
(b) (6)
F Fw: : om v s Meeting request from Governor Kevin Warsh
M r n Margaret Owens to: Tara W Foscato 11/04/2009 09:13 AM
Sent by: a g r t w Margaret Owens
Tara,
l forgot to add you to the email below.
_____________________________________
Margaret R. Owens
----- Forwarded by Margaret Owens/BOARD/FRS on 11/04/2009 09:13 AM -----
a g Ow Margaret Owens / /Board/F S FRS
Sent by: Margaret
Owens/BOARD/FRS
11/04/2009 09:12 AM
To abby.perdew@mail.house.gov
cc
Subject Meeting request from Governor Kevin Warsh
Good Morning Abby,
Governor Warsh would like to meet with Congressman Pence to discuss the Fed's general perspective on
regulatory reform, with emphasis on systemic risk/bank regulation and resolution authority, and any other
matters the Congressman would like to discuss. Please let me know if Congressman Pence is available
December 9, 2009, between the hours of 9:30 a.m. - 12:30 p.m. Thank you.
_____________________________________
Margaret R. Owens
(b) (6)
(b) (6)
G Gov. W Warsh
T a Tara W Foscato to: Mike Sommers 11/04/2009 09:45 AM
Bcc: "Me"
Hi Mike,
l wanted to give you a heads up that Gov. Warsh's office will be requesting a meeting with your boss to
touch base on regulatory reform and anything else you all would like to discuss. Thanks.
Tara
Tara Wade Foscato
Assistant Congressional Liaison
Board of Governors
Washington, D.C. 20551
tara.w.foscato@frb.gov
(b) (6)
RE RE: Gov. a s Warsh
S Sommers, Mike to: Tara.W.Foscato 11/04/2009 10:43 AM
Thanks Tara. I am sure JB will take the meeting.
-----Original Message-----
From: Tara.W.Foscato@frb.gov [mailto:Tara.W.Foscato@frb.gov]
Sent: Wednesday, November 04, 2009 9:46 AM
To: Sommers, Mike
Subject: Gov. Warsh
Hi Mike,
I wanted to give you a heads up that Gov. Warsh's office will be requesting
a meeting with your boss to touch base on regulatory reform and anything
else you all would like to discuss. Thanks.
Tara
Tara Wade Foscato
Board of Governors
(b) (6)
FSC Chairman Barney Frank Sends Letter on Derivatives to CFTC Chairman FSC Chairman Barney Frank Sends Letter on Derivatives to CFTC Chairman FSC Chairman Barney Frank Sends Letter on Derivatives to CFTC Chairman FSC Chairman Barney Frank Sends Letter on Derivatives to CFTC Chairman
Gary Gensler and SEC Chairwoman Mary Schapiro Gary Gensler and SEC Chairwoman Mary Schapiro Gary Gensler and SEC Chairwoman Mary Schapiro Gary Gensler and SEC Chairwoman Mary Schapiro
Davis Davis Davis Davis, ,, , Greg Greg Greg Greg to: undisclosed-recipients:; 11/04/2009 12:37 PM
For Immediate Release:
November 4, 2009
Frank Sends Letter on Derivatives to Gensler, Schapiro
Washington, DC House Financial Services Committee Chairman Barney Frank (D-MA)
yesterday sent a letter to Commodity Futures Trading Commission Chairman Gary Gensler and
Securities and Exchange Commission Chairman Mary Schapiro seeking their input on
efforts to strengthen the derivatives legislation recently approved by the Committee.
To read the text of Rep. Franks letter, click here.
###
- Schapiro_Gensler_Letter100409.pdf
BARNEY FRANK, MA, CHAIRMAN
tt. Jt,louiSe of l\rprciSentatilleiS
Ql:ommittee on jfinnncinl
2129 l\npburn J,!')oull'r J!} uilbill!l
Wn!ifJin!Jton, lllct 20515
November 3, 2009
The Honorable Mary L. Schapiro
Chairman
The Honorable Gary Gensler
Chairman
SPENCER BACHUS, AL, RANKING MEMBER
U.S. Securities and Exchange Commission
100 F Street, NE
Commodity Futures Trading Commission
Three Lafayette Centre
Room 10700 1155 21st Street, NW
Washington, DC 20549 Washington, DC 20581
Dear Madam Chairman and Mr. Chailman:
I have been hearing concems from several quarters about the bill the Committee passed to regulate
derivatives as we prepare that legislation for a floor debate that will probably take place next month.
It is my intention to fashion amendments to deal with two aspects of these fears. First, we will
clmify exactly who can claim the exception from the clearing and trading requirement and, second,
we will place the responsibility of deciding what swaps must be cleared solely with the regulators. I
write to seek the help of your agency in crafting amendments to carry these changes out.
I know that there is a disagreement as to whether or not all swaps that can be cleared should be, or
whether there should be some exceptions for end-users hedging legitimate business risks. But in
addition to that question, there is concem expressed by some that the bill as shuctured could be
subject to manipulation by those who are not entitled to the exception-as the bill defines it- to
avoid the clearing and trading requirement. This is why we need to further clmify the exception. I
realize that this will not fully alleviate disagreement about the scope of transactions that should be
forced to go through clearinghouses, but I believe that in the minds of some, the fact that an
exception might be exploited by inadequate regulatory toughness is part of the general concem.
Part of this can be done by tightening the insttuctions the bill gives to the SEC and the CFTC with
regard to the exception. As you know, the legislation provides for your agencies to decide whether
or not the exception is appropriate. That is, there is no self-certification. Those who fear that clever
financial firms will somehow scheme to get themselves under an exception to which they are not
entitled can be reassured that the vigilance of the regulators will prevent this. Some have suggested,
however, that we could more carefully limit the exception from the cleating and trading
requirement. This is an approach which we are consideling.
There is another concem expressed by some, including, for example, the New York Times, regarding
the provision in the bill that allows a clearinghouse to decide in the first instance whether or not a
trade can be cleared - and thus be required to trade on an exchange. Fears have been expressed that
the clearinghouses, especially those in which some financial entities have an interest, might use that
power to assert that swaps are not clearable. If they were to do that as the bill is now written, it
would vitiate the clearing and trading requirement even for transactions that clearly do not qualify
for any exemption. That provision- that it be the clearing houses and not the SEC or the CFTC that
The Honorable Mary L. Schapiro
The Honorable Gary Gensler
Page two
make the initial decision as to whether or not a trade is clearable - resulted, as I understand it, from
Chairman Gensler's view that it would be too burdensome for the CFTC to take on that task, and
that it was best delegated to the clearinghouses. The concems expressed by some, however,
persuade me that there may be a problem here and so I propose to amend the ' bill so that the
decision as to whether or not a trade is clearable should be made by the regulators.
We have tried to deal with that to some extent in our legislation through an amendment by my
colleague Stephen Lynch of Massachusetts, which the Committee adopted, which would restrict the
ownership in a cleating house by financial fitms to twenty percent. But we are encountering
resistance to that on the patt of many, including my colleagues in the Agriculture Committee, and
we have been told by some that if that requirement remains, there could be an insufficient number
of clearinghouses at least in the near tetm. As I still believe it is important to reduce the stake in the
clearinghouses of these films to avoid any potential conflicts of interest, I continue to support
Congressman Lynch's amendment, although for technical reasons we are going to have to reinsert it
into the bill on the floor. I believe that the case for having the SEC and the CFTC make the
decision about what is clearable is a strong one. It is also important that we structure any
exceptions from the cleating and trading requirement tight enough to prevent speculators from
masquerading as end-users.
I look forward to hearing fiom you and have asked the Financial Services Committee staff to work
with you so that we can strengthen t ~ ~ o r in th near future.
Chairman
FW FW FW FW: :: : Letter to Sen Letter to Sen Letter to Sen Letter to Sen. .. . Corker is attached Corker is attached Corker is attached Corker is attached
Geduldig Geduldig Geduldig Geduldig, ,, , Courtney Courtney Courtney Courtney ( (( (Corker Corker Corker Corker ) )) ) to: Tara.W.Foscato@frb.gov 11/06/2009 12:47 PM
From: Tara.W.Foscato@frb.gov [mailto:Tara.W.Foscato@frb.gov]
Sent: Friday, October 30, 2009 6:17 PM
To: Geduldig, Courtney (Corker)
Subject: Fw: Letter to Sen. Corker is attached
----- Original Message -----
From: Pamela Elliff
Sent: 10/30/2009 06:04 PM EDT
To: Tara Foscato
Subject: Fw: Letter to Sen. Corker is attached Hi Tara,
Linda asked if you could forward this to Courtney. Thanks.
Have a good weekend.
Pam
----- Forwarded by Pamela Elliff/BOARD/FRS on 10/30/2009 06:03 PM -----
Pamela
Elliff/BOARD/FRS
To
10/30/2009 06:00 Linda L Robertson/BOARD/FRS
PM cc
Subject
Letter to Sen. Corker is attached
(See attached file: 10-30-09 BB to Sen.Corker.pdf)
(See attached file: 10-29-09 Tarullo HFSC_reg_overhaul.pdf)
- 10-30-09 BB to Sen.Corker.pdf - 10-29-09 Tarullo HFSC_reg_overhaul.pdf
The Honorable Bob Corker
United States Senate
Dear Senator:
BOARD OF GOVERNORS
OF THE
FECERAL RESERVE SYSTEM
WASHINGTON. 0. C. 20551
October 30, 2009
SEN 5. 9RNANK
CHAIRMAN
Thank you for your call earlier this week. You asked for a definition of systemic risk.
Systemic risks are developments that threaten the stability of the financial system as a
whole and consequently the broader economy, not just that of one or two institutions. Examples
of systemic risks are risk exposures (such as exposures to subprime mortgages) that are
correlated across many institutions; significant, systemwide increases in leverage that could lead
to broad-based financial stress in a downturn; the possibility that the failure of a single,
interconnected firm may lead to breakdowns in key markets, such as short-term funding markets,
or the failure of a number of other firms; or significant gaps in risk management or regulatory
oversight that may arise in the course of financial change and innovation.
The Federal Reserve believes that, for purposes of both effectiveness and accountability,
the consolidated supervision of an individual firm, whether or not it is systemically important, is
best vested in a single agency. However, the broader task of monitoring and identifying
systemic risks that might arise from the interactions of different types of financial institutions
and markets--both regulated and unregulated--may exceed the capacity of any individual
supervisor. We therefore recommend marshalling the collective expertise and information of all
financial supervisors to help identify and coordinate responses to developments that threaten the
stability of the system as a whole.
I am enclosing for your consideration a more complete discussion of these issues that is
included in Congressional testimony given this week by my colleague, Governor Dan Tarullo.
Please do not hesitate to contact either of us directly if you have any questions.
Sincerely,
/ . ) - ~
Enclosure
For release on delivery
9:30 a.m. EDT
October 29, 2009
Statement of
Daniel K. Tarullo
Member
Board of Governors of the Federal Reserve System
before the
Committee on Financial Services
U.S. House of Representatives
October 29, 2009
Chairman Frank, Ranking Member Bachus, and other members of the Committee, thank
you for the invitation to testify this morning on systemic regulation, prudential matters,
resolution authority, and securitization. The financial crisis was the product of many factors,
including the tight integration of lending activities with the issuance, trading, and financing of
securities; gaps in the financial regulatory structure; widespread failures of risk management
across a range of financial institutions; and, to be sure, significant shortcomings in financial
supervision. More fundamentally, though, it demonstrated that the regulatory framework had not
kept pace with far-reaching changes in the financial sector, and the concomitant growth of new
sources of risk to both individual institutions and the financial system as a whole.
Because the roots of the crisis reached so deeply into the very nature of the financial
system, a broad program of reform is required. Much can be, and needs to be, done by
supervisors--under their existing statutory authorities--to contain systemic risk generally and the
too-big-to-fail problem in particular. As the discussion draft released by Chairman Frank
recognizes, there is also a clear need for the Congress to provide significant additional authority
and direction to the regulatory agencies.
Essential elements of this legislative agenda include: ensuring that all financial
institutions that may pose significant risk to the financial system are subject to robust
consolidated supervision; establishing a systemic risk oversight council to identify, and
coordinate responses to, emerging risks to financial stability; directing all financial supervisors
to take account of risks to the broader financial system as part of their normal oversight
responsibilities; establishing a new special resolution process that allows the government to wind
down in an orderly way a failing financial institution that threatens the entire financial system
while also creating a credible process for imposing losses on the firms shareholders and
- 2 -
creditors and assuring that the financial industry, not taxpayers, ultimately bears any additional
costs associated with the resolution process; providing for consistent and robust prudential
supervision of key payment, clearing, and settlement arrangements; and addressing weaknesses
in the securitization process that came to light during the crisis.
Chairman Franks discussion draft addresses each of these areas and, in the Boards view,
provides a strong framework for achieving a safer, more stable financial system. In addition to
addressing these areas for legislative change, I will discuss some of the actions the Federal
Reserve and our supervisory colleagues are taking under existing authorities to strengthen the
supervision and regulation of financial institutions--particularly large, complex institutions--and
to prevent regulatory arbitrage.
Consolidated Supervision of Systemically Important Financial Institutions
The current financial crisis has clearly demonstrated that risks to the financial system can
arise not only in the banking sector, but also from the activities of other large, interconnected
financial firms--such as investment banks and insurance companies--that traditionally have not
been subject to the type of mandatory prudential regulation and consolidated supervision
applicable to bank holding companies. Chairman Franks discussion draft would close this
important gap in our regulatory structure by providing for all financial institutions that may pose
significant risks to the financial system to be subject to the framework for consolidated
prudential supervision that currently applies to bank holding companies. As I will discuss
shortly, it also provides for these firms to be subject to enhanced standards, reflective of the risk
they pose to the financial system. These provisions should prevent financial firms that do not
own a bank--but that nonetheless pose risks to the overall financial system because of the size,
- 3 -
risks, or interconnectedness of their financial activities--from avoiding comprehensive
supervisory oversight.
In one sense, a requirement that all systemically important firms be subject to prudential
supervision would not lead to a major change in our regulatory system. During the financial
crisis, a number of very large financial firms became bank holding companies. Thus, the Federal
Reserve has already become the consolidated supervisor of most of the nations large,
interconnected financial institutions. Yet a critical part of a reform agenda directed at systemic
risk and the too-big-to-fail problem is ensuring that other financial firms that may pose a
systemic threat also are subject to robust consolidated supervision. Such a measure would allow
the regulatory system to adapt if activities migrate from supervised institutions to other firms,
leading those firms to become very large and interconnected, or in response to other
developments in the financial system. Moreover, such a provision would serve as a kind of
insurance policy against the possibility of a firm that opted for the benefits of being a bank
holding company during the financial crisis deciding to exit that status during calmer times.
The discussion draft also would require the development of enhanced regulation and
supervision, including robust capital, liquidity, and risk-management requirements, to address
and mitigate systemic risks. Enhanced requirements, particularly for large, interconnected firms,
are needed not only to protect the stability of individual institutions and the financial system as a
whole, but also to counteract any incentive for financial firms to become very large in order to be
perceived as too big to fail. This perception can materially weaken what should be the normal
market incentive of creditors to monitor the firms risk-taking and appropriately price these risks
in their transactions with the firm. When this incentive is weakened, moral hazard increases,
allowing the firm to raise funds at a price that may not fully reflect the firms risk profile. As a
- 4 -
result, the firm is likely to choose a level of risk that is excessive both for itself and, potentially,
for society at large. Moreover, this distortion creates a playing field that is tilted against smaller
firms not perceived as having the same degree of government support. Development of a
mechanism for the orderly resolution of nonbank financial firms that threaten financial stability,
which I will discuss later, is an important additional tool for addressing the too-big-to-fail
problem.
The discussion draft would reinforce the changes in supervision already under way at the
Federal Reserve and the other banking agencies. As already announced, we have strengthened
capital requirements for trading activities and securitization exposures. We continue to work
with other regulators to strengthen the capital requirements for other types of on- and off-
balance-sheet exposures and to improve the quality of capital overall.
1
Beyond these generally applicable capital requirements, we must develop capital
standards and other supervisory tools addressed specifically to the systemic risks of large,
interconnected firms. One possible approach is a special charge--possibly a special capital
requirement--that would adjust based on the risks posed by the firm to the financial system.
Ideally, this requirement would be calibrated to become more stringent as the firms systemic
risks increase, although developing a metric for such a requirement would be highly challenging.
Another potentially promising option is to require that selected financial institutions issue
specified amounts of contingent capital. Such capital could take the form of debt instruments
that convert to common equity during times of macroeconomic stress or when losses erode the
institutions capital base. Such instruments would pre-position capital on the balance sheets of
each of these institutions, ready to be converted into the form that provides the best loss-
1
See Bank for International Settlements (2009), Basel II Capital Framework Enhancements Announced by the Basel
Committee, press release, July 13; and Basel Committee on Banking Supervision (2009), Enhancements to the Basel
II Framework (Basel, Switzerland: Basel Committee, July).
- 5 -
absorption capacity precisely when that capacity is most needed. And, if well devised, it would
inject an additional element of market discipline into large financial firms, because the price of
those instruments would reflect market perceptions of the stability of the firm.
The financial crisis also highlighted weaknesses in liquidity risk management at major
financial institutions, including an overreliance on short-term funding. To address these issues,
the Federal Reserve helped lead the development of revised international principles for sound
liquidity risk management, which have been incorporated into new interagency guidance now
out for public comment.
2
Together with our U.S. and international counterparts, we are also
considering quantitative standards for liquidity exposures similar to those for capital adequacy,
with the goal of ensuring that internationally active firms can fund themselves even during
periods of severe market instability. With supervisory encouragement, large banking
organizations have, for the most part, already significantly increased their liquidity buffers and
are strengthening their management of liquidity risks.
Beyond modifying applicable rules and standards, the Federal Reserve is revamping its
approach toward supervising the largest financial institutions. In doing so, we have drawn on
our experience earlier this year in conducting the special Supervisory Capital Assessment
Program (SCAP), which involved forward-looking, cross-firm, aggregate analyses of 19 of the
largest bank holding companies. While the SCAP itself was an extraordinary exercise for an
extraordinary time, we are incorporating into our ongoing supervisory process the essential
SCAP approach of bringing firm-specific assessments of on-site examiners together with
2
See Basel Committee on Banking Supervision (2008), Principles for Sound Liquidity Risk Management and
Supervision (Basel: Basel Committee, September). Information about the proposed guidance is available at Board
of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance
Corporation, Office of Thrift Supervision, and National Credit Union Administration (2009), Agencies Seek
Comment on Proposed Interagency Guidance on Funding and Liquidity Risk Management, joint press release,
June 30, www federalreserve.gov/newsevents/press/bcreg/20090630a htm.
- 6 -
systematic analyses of industry experience, economic trends, and possible stress scenarios.
Thus, we have increased our emphasis on horizontal examinations, which focus on particular
risks or activities across a group of banking organizations, and we have broadened the scope of
the resources we bring to bear on these reviews.
For example, we currently are conducting a horizontal assessment of internal processes
for evaluating capital adequacy at the largest U.S. banking organizations, focusing in particular
on how shortcomings in fundamental risk management and governance for these processes could
impair firms abilities to estimate capital needs. This exercise is central to the goal of having
each firm maintain adequate capital to provide a buffer against possible losses associated with its
particular set of activities and exposures. Using findings from these reviews, we will work with
firms over the next year to bring their processes into line with supervisory expectations.
Supervisors will use the information provided by firms about their processes as one factor in the
assessment of the adequacy of firms overall capital levels. For instance, if a firm cannot
demonstrate a strong ability to estimate capital needs, then supervisors will place less credence
on the firms own internal capital evaluation and may demand higher capital cushions, among
other things.
As part of this overall approach to large institution supervision, we are creating an
enhanced quantitative surveillance program for large, complex organizations that would use
supervisory information, firm-specific data analysis, and market-based indicators in an effort to
identify emerging risks to specific firms as well as to the industry as a whole. This work will be
performed by a multidisciplinary group composed of our economic and market researchers,
supervisors, market operations specialists, and other experts within the Federal Reserve System.
In addition, periodic scenario analysis will be used to enhance our understanding of the
- 7 -
consequences of changes in the economic environment for both individual firms and for the
broader system. Finally, to support and complement these initiatives, we are working with the
other federal banking agencies to develop more-comprehensive and more-frequent information-
reporting requirements for the largest firms.
The crisis also has highlighted the potential for compensation practices at financial
institutions to encourage excessive risk-taking and unsafe and unsound behavior--not just by
senior executives, but also by other managers or employees who have the ability, individually or
collectively, to materially alter the risk profile of the institution. Bonuses and other
compensation arrangements should not provide incentives for employees at any level to behave
in ways that imprudently increase risks to the institution, and potentially to the financial system
as a whole.
Last week, the Federal Reserve issued proposed guidance on incentive compensation
practices to promote the prompt improvement of incentive compensation practices throughout
the banking industry.
3
This guidance, which is consistent with the international principles and
standards issued by the Financial Stability Board earlier this year, will be supplemented by
supervisory initiatives to spur and monitor the industrys progress toward the implementation of
safe and sound incentive compensation arrangements, identify emerging best practices, and
advance the state of practice more generally in the industry.
4
One of these initiatives involves a
special horizontal review of incentive compensation practices at 28 large, complex banking
organizations under the Federal Reserves supervision.
3
See Board of Governors of the Federal Reserve System (2009), Federal Reserve Issues Proposed Guidance on
Incentive Compensation, press release, October 22,
www federalreserve.gov/newsevents/press/bcreg/20091022a htm.
4
See Financial Stability Forum (2009), FSF Principles for Sound Compensation Practices, April, available on the
Financial Stability Boards website at www financialstabilityboard.org/publications/r_0904b.pdf . (The Financial
Stability Forum has subsequently been renamed the Financial Stability Board.) Also see Financial Stability Board
(2009), FSB Principles for Sound Compensation Practices: Implementation Standards, September,
www financialstabilityboard.org/publications/r_090925c.pdf.
- 8 -
To be fully effective, consolidated supervisors must have clear authority to monitor and
address safety and soundness concerns and systemic risks in all parts of an organization, working
in coordination with other supervisors wherever possible. As the crisis has demonstrated, large
firms increasingly operate and manage their businesses on an integrated, firmwide basis, with
little regard for the corporate or national boundaries that define the jurisdictions of individual
functional supervisors, and stresses at one subsidiary can rapidly spread within the consolidated
organization. A consolidated supervisor thus needs the ability to understand and address risks
that may affect the risk profile of the organization as a whole, whether those risks arise from one
subsidiary or from the linkages between depository institutions and nondepository affiliates.
Chairman Franks proposal would make useful modifications to the provisions added to the law
by the Gramm-Leach-Bliley Act in 1999 that limit the ability of a consolidated supervisor to
monitor and address risks within an organization and its subsidiaries on a groupwide basis.
Systemic Risk Oversight
For purposes of both effectiveness and accountability, the consolidated supervision of an
individual firm, whether or not it is systemically important, is best vested with a single agency.
However, the broader task of monitoring and identifying systemic risks that might arise from the
interaction of different types of financial institutions and markets--both regulated and
unregulated--may exceed the capacity of any individual supervisor. Instead, we should seek to
marshal the collective expertise and information of all financial supervisors to identify and
respond to developments that threaten the stability of the system as a whole.
The discussion draft released by Chairman Frank would advance this objective in two
important ways. First, it would establish an oversight council--composed of representatives of
the agencies and departments involved in the oversight of the financial sector--that would be
- 9 -
responsible for monitoring and identifying emerging systemic risks across the full range of
financial institutions and markets. In addition, the council would have the ability to coordinate
responses by member agencies to mitigate identified threats to financial stability. And,
importantly, the oversight council would have the authority to recommend that its member
agencies, either individually or collectively, adopt heightened prudential standards for the firms
under the agencies supervision in order to mitigate potential systemic risks. Examples of such
risks could include rising and correlated risk exposures across firms and markets; significant
increases in leverage that could result in systemic fragility; and gaps in regulatory coverage that
arise in the course of financial change and innovation, including the development of new
practices, products, and institutions. The council also would identify those financial firms that
should be subjected to enhanced prudential standards and supervision on a consolidated basis.
5
Second, the discussion draft would reinforce the authority of individual financial agencies
to take macroprudential considerations into account in exercising their supervisory and
regulatory functions. A macroprudential outlook, which considers interlinkages and
interdependencies among firms and markets that could threaten the financial system in a crisis,
provides an important complement to the current microprudential focus of financial supervision
and regulation. Each supervisors participation in the oversight council would greatly strengthen
that supervisors ability to see and understand threats to financial stability and craft appropriate
responses for the institutions and markets under their supervision.
The Federal Reserve already has begun to incorporate a systemically focused approach
into our supervision of large, interconnected firms. Doing so requires that we go beyond
5
To fulfill these responsibilities, the discussion draft would provide the council access to a broad range of
information from its member agencies regarding the institutions and markets that the agencies supervise and, when
the necessary information is not available through that source, the authority to collect such information directly from
financial institutions and markets.
- 10 -
considering each institution in isolation and pay careful attention to interlinkages and
interdependencies among firms and markets that could threaten the financial system in a crisis.
For example, the failure of one firm may lead to runs by wholesale funders of other firms that are
seen by investors as similarly situated or that have exposures to the failing firm. These efforts
are reflected, for example, in the expansion of horizontal reviews and the quantitative
surveillance program I discussed earlier.
Improved Resolution Process
Another critical element of an agenda to contain systemic risk is the creation of a new
regime that would allow financial firms to fail without posing risks to the broader financial
system or the economy. In most cases, the federal bankruptcy laws provide an appropriate
framework for the resolution of nonbank financial institutions. However, the bankruptcy code
does not sufficiently protect the publics strong interest in ensuring the orderly resolution of a
nonbank financial firm whose failure would pose substantial risks to the financial system and to
the economy. Indeed, after the Lehman Brothers and AIG experiences, there is little doubt that
we need an alternative to the existing options of bankruptcy and bailout for such firms.
The discussion draft released by Chairman Frank would provide the government with
important new tools to restructure or wind down a failing firm in a way that passes on losses to
shareholders and creditors of the firm while mitigating the risks to financial stability and the
economy. For example, it would allow the government to sell assets, liabilities, and business
units of the firm; transfer the systemically significant operations of the firm to a new bridge
entity that can continue these operations with minimal disruptions; and repudiate contracts of the
firm, subject to appropriate recompense.
- 11 -
This proposal would not guarantee the survival of any financial firm, nor is it designed to
aid shareholders or creditors of a failing firm. To the contrary, the proposal would establish the
expectation that shareholders and creditors of the firm will bear losses as a result of the firms
failure. And any assistance provided in the course of the resolution process to prevent severe
disruptions to the financial system would be repaid by the firm or the financial services industry.
Establishing credible processes for imposing losses on the shareholders and creditors of a failing
firm is essential to restoring a meaningful degree of market discipline and addressing the too-big-
to-fail problem. Indeed, restoring discipline through changes directed at the behavior of
investors and counterparties would be an important complement to the regulatory and
supervisory changes that I discussed earlier, which seek to address the too-big-to-fail problem
through actions directed at the firms themselves.
Financial firms of any size should be resolved under the bankruptcy code whenever
possible. Thus, this new regime should serve only as an alternative to the bankruptcy code,
available when needed to address systemic concerns, and its use should be subject to high
standards and checks and balances. The discussion draft would allow the new regime to be
invoked with respect to a particular firm only with the approval of multiple agencies, and only
upon a determination that the firms failure and resolution under the bankruptcy code or
otherwise applicable law would have serious adverse effects on financial stability and the U.S.
economy. These standards, which are similar to those governing the use of the systemic risk
exception to least-cost resolution in the Federal Deposit Insurance Act, appear appropriate and
should help ensure that these new powers are invoked only when circumstances dictate their use.
The discussion draft provides that the ultimate costs of any assistance needed to facilitate
the orderly resolution of a large, highly interconnected financial firm be recouped through the
- 12 -
sale or dissolution of the troubled firm, supplemented by assessments on financial firms over an
extended period of time if necessary. We believe this approach provides a path to resolution for
financial firms in a way that both mitigates risk to the financial system and protects taxpayers.
The availability of a workable resolution regime with appropriate funding would eliminate the
need for the Federal Reserve to use its emergency lending authority under section 13(3) of the
Federal Reserve Act to prevent the disorderly failure of specific failing institutions.
It is important, however, that the Federal Reserve, as the nations central bank, retain our
long-standing authority to address broader liquidity needs within the financial system under
section 13(3) when necessary to maintain financial stability. During the recent crisis, our ability
to establish broad-based liquidity facilities proved critical in containing the severe pressures that
threatened the financial system as a whole and in reopening key financial markets. We used this
authority only when the need for action was evident to both the Federal Reserve and the
Treasury, a practice that could be formalized by the Congress.
Payment, Clearing, and Settlement Arrangements
As I mentioned at the outset, in revising the financial regulatory system, we must look
beyond the causes of the current crisis and seek to address areas of potential systemic risk in the
future. Such areas include critical payment, clearing, and settlement arrangements, which are the
foundation of the nations financial infrastructure. These arrangements include centralized
market utilities for clearing and settling payments, securities, and derivatives transactions, as
well as the decentralized activities through which financial institutions clear and settle such
transactions bilaterally. While these arrangements can create significant efficiencies and
promote transparency in the financial markets, they also may concentrate substantial credit,
liquidity, and operational risks. In addition, many of these arrangements have direct and indirect
- 13 -
financial or operational linkages and, absent strong risk controls, can themselves be a source of
contagion in times of stress. Thus, it is critical that systemically important payment, clearing,
and settlement systems and activities be subject to strong and consistent prudential standards
designed to ensure the identification and sound management of credit, liquidity, and operational
risks.
Unfortunately, the current regulatory and supervisory framework for systemically
important payment, clearing, and settlement arrangements is fragmented, creating the potential
for inconsistent standards to be adopted or applied. In light of the increasing integration of
global financial markets, it is important that these arrangements be viewed from a systemwide
perspective, and that they be subject to strong and consistent prudential standards and
supervisory oversight.
The Federal Reserve has direct supervisory responsibility for some of the largest and
most critical systems in the United States and has a role in overseeing several other systemically
important systems. But a coherent framework for supervision of these systems does not exist,
and our current authority depends to a considerable extent on the specific organizational form of
these systems. Chairman Franks discussion draft would provide the Federal Reserve with
additional authorities to ensure that appropriate standards and oversight are applied to
systemically important payment, clearing, and settlement arrangements.
Improving the Securitization Process
The financial crisis revealed a number of significant shortcomings in the securitization
process that contributed importantly to the stresses experienced by the markets as well as to the
outsized losses some firms faced once markets began to deteriorate. The ability of brokers and
lenders to readily securitize and sell to third parties loans that they were making, regardless of
- 14 -
their risks, contributed to the overall decline in underwriting standards in the years leading up to
the crisis. Moreover, capital requirements failed to provide adequate incentives for firms to
maintain capital and liquidity buffers sufficient to absorb extreme systemwide shocks without
taking actions that could tend to amplify the effects of the shocks. In addition, institutional
investors of all sorts--including financial institutions, pension funds, and overseas investors--put
excessive reliance on the rating agencies assessment of the risks associated with a range of
structured products. In part, investors reliance on ratings reflected the lack of transparency of
many structured products, which made independent assessments of risk difficult. However, it
subsequently became clear that the rating agencies had not themselves understood the extent of
the risks associated with complex structured instruments, particularly those related to subprime
mortgages. Once those risks were realized, the ratings of many of these securities were
downgraded sharply, with investors taking very large and unexpected losses.
Addressing these weaknesses will require action on several fronts. As I noted earlier, the
Basel Committee has announced improvements to bank capital standards for securitization-
related exposures, thereby better aligning these standards with the risks presented by
securitizations. Improved transparency regarding the individual loans backing a securitization,
as well as regarding the originators of such loans, also is needed to reduce the opacity that has
impeded effective discipline in the market for asset-backed securities (ABS) and encouraged
undue reliance on credit rating agencies. Chairman Franks discussion draft would advance this
goal by authorizing the Securities and Exchange Commission (SEC) to develop enhanced
disclosure requirements for ABS, including loan-level information and information identifying
- 15 -
the originators or brokers of the underlying loans.
6
Using authority granted by the Congress in
2006, the SEC already has adopted or proposed several rules to improve the transparency,
quality, and integrity of the credit rating process for securitizations and other structured finance
products.
7
Requiring that originators or securitizers of loans packaged for securitization retain some
exposure to the credit risk associated with the loans also could help restore confidence in the
securitization market and encourage the application of sound underwriting criteria to all loans,
including those intended for securitization. The details of such a requirement are probably best
left to rulemaking by the implementing agencies. Complexities are created by the broad range of
assets that are, or may be, securitized, as well as by the different approaches that may be taken to
securitization. A credit exposure retention requirement may thus need to be implemented
somewhat differently across the full spectrum of securitizations in order to properly align the
interests of originators, securitizers, and investors without unduly restricting the availability of
credit or threatening the safety and soundness of financial institutions.
Charter Conversions and Regulatory Arbitrage
Finally, I am pleased to note that one potential gap, which I know is of interest to this
Committee, already has been addressed by the joint efforts of the banking agencies. The dual
banking system and the existence of different federal supervisors create the opportunity for
insured depository institutions to change charters or federal supervisors. While institutions may
engage in charter conversions for a variety of sound business reasons, conversions that are
6
Encouraged by the Federal Reserve and others, the American Securitization Forum already has taken important
steps along these lines, developing model disclosures for residential mortgage-backed securities that would provide
investors standardized loan-level information.
7
Increased transparency regarding the pricing of ABS also can support enhanced market discipline by providing
investors important signals regarding other market participants assessments of the quality of individual issues.
Along these lines, the Financial Industry Regulatory Authority recently proposed including ABS in its post-trade
reporting system, a step that deserves the support of policymakers.
- 16 -
motivated by hopes of escaping current or prospective supervisory actions by the institutions
existing supervisors undermine the efficacy of the prudential supervisory framework.
Accordingly, the Federal Reserve welcomed and immediately supported an initiative led
by the Federal Deposit Insurance Corporation to address such regulatory arbitrage. This
initiative resulted in a recent statement of the Federal Financial Institutions Examination Council
reaffirming that a charter conversion or other action by an insured depository institution that
would result in a change in its primary supervisor should occur only for legitimate business and
strategic reasons.
8
Importantly, this statement also provides that conversion requests should not
be entertained by the proposed new chartering authority or supervisor while serious or material
enforcement actions are pending with the institutions current chartering authority or primary
federal supervisor. In addition, it provides that the examination rating of an institution and any
outstanding corrective action programs should remain in place when a valid conversion or
supervisory change does occur.
Conclusion
In closing, let me reiterate the importance of moving ahead with the elements of the
administrative and legislative reform agenda that I have discussed. These reforms, taken
together, will enhance financial stability, increase market discipline in transactions involving
large financial firms, and reduce both the probability and severity of future crises. The Federal
Reserve looks forward to continuing work with the Congress and the Administration as the
legislative process moves forward.
8
See Federal Financial Institutions Examination Council (2009), FFIEC Issues Statement on Regulatory
Conversions, press release, July 1.
F Fw: : k r Frank: : s ou er e F d i ati al a Congress could merge Fed into national regulator
L a b Linda L Robertson to: Jeanne.Roslanowick 11/06/2009 01:16 PM
Frank: Congress could merge Fed into national regulator
Democrats agree on some regulatory combinations but not all
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) -- Congress could merge the Federal Reserve's
bank supervisory authority into a newly created national bank regulator as
part of regulatory reform under consideration on Capitol Hill, a key
lawmaker said Friday.
"You may get a combination of the national bank supervisor and the Fed, but
state bank regulation should remain separate," said House Financial
Services Committee Chairman Barney Frank, D-Mass.
Frank and key lawmakers in the Senate and House agree that the Office of
Thrift Supervision should be combined with the Comptroller of the Currency.
However, Senate Banking Committee Chairman Christopher Dodd, D-Conn., is
seeking to create a consolidated bank regulator by combining all federal
bank regulators, including the Federal Deposit Insurance Corp., into one
entity.
Frank said he is in discussions with Dodd on the issue, which could combine
the central bank's responsibility to supervise and complete on-site exams
of banks into the larger national regulator. "We're shuffling back and
forth."
He contends that it would be difficult to combine the FDIC into a
consolidated bank regulator because of the agency's role in overseeing
state chartered banks along with state bank regulators.
"It is hard to merge the FDIC into a national bank regulator because it
regulates state charter banks along with state supervisors," Frank said.
"State regulators don't want to be in one regulator and we don't want to
get rid of the duel banking system where we have state and national bank
regulators."
--------------------------
Sent from my BlackBerry Wireless Handheld
"Borden Borden, M hael Michael " "
< <M hael M hael Michael Michael . .. .Borden Borden@ @mail mail . .hous hous
e e. .gov gov> >
11/06/2009 04:18 PM
To <Robert.M.Pribble@frb.gov>
cc
Subject RE: Please send the Republican substitute, thanks.
From: Robert.M.Pribble@frb.gov [mailto:Robert.M.Pribble@frb.gov]
Sent: Friday, November 06, 2009 4:16 PM
To: Borden, Michael
Subject: Please send the Republican substitute, thanks.
--------------------------
Sent from my BlackBerry Wireless Handheld
Not Responsive - Internal Emails Between Federal Reserve Staff
AMENDMENT IN THE NATURE OF A SUBSTITUTE TO
COMMITTEE PRINT
OFFERED BY MRS. CAPITO OF WEST VIRGINIA,
MR. BACHUS OF ALABAMA, MR. NEUGEBAUER
OF TEXAS, MRS. BIGGERT OF ILLINOIS, MR.
HENSARLING OF TEXAS, AND MR. GARRETT
OF NEW JERSEY
Strike all after the enacting clause and insert the
following:
SEC. 1. SHORT TITLE. 1
This Act may be cited as the No More Bailouts Act 2
of 2009. 3
SEC. 2. AMENDMENTS TO TITLE 28 OF THE UNITED STATES 4
CODE. 5
Title 28 of the United States Code is amended 6
(1) in section 1408 by striking section 1409 7
and inserting sections 1409 and 1409A, 8
(2) by inserting after section 1409 the fol- 9
lowing: 10
1409A. Venue of cases i nvolvi ng non-bank fi nanci al 11
i nsti tuti ons 12
A case under chapter 14 may be commenced in the 13
district court of the United States for the district 14

November 5, 2009 (6:37 p.m.)
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2
(1) in which the debtor has its principal place 1
of business or principal assets in the United States 2
if a Federal Reserve Bank is located in that district; 3
(2) if venue does not exist under paragraph 4
(1), in which there is a Federal Reserve Bank and 5
in a Federal circuit in which the debtor has its prin- 6
cipal place of business or principal assets in the 7
United States; or 8
(3) if venue does not exist under paragraph 9
(1) or (2), in which there is a Federal Reserve Bank 10
and in a Federal circuit adjacent to the Federal cir- 11
cuit in which the debtor has its principal place of 12
business or principal assets in the United States., 13
and 14
(3) by amending the table of sections of chapter 15
87 of such title to insert after the item relating to 16
section 1408 the following: 17
1409A. Venue of cases involving non-bank financial institutions..
SEC. 3. AMENDMENTS TO TITLE 11 OF THE UNITED STATES 18
CODE. 19
(a) DEFINITIONS.Section 101 of title 11, United 20
States Code, is amended 21
(1) by inserting after paragraph (26) the fol- 22
lowing: 23
(26A) The term functional regulator means 24
the Federal regulatory agency with the primary Fed- 25

November 5, 2009 (6:37 p.m.)
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3
eral regulatory authority over the debtor, such as an 1
agency listed in section 509 of the Gramm-Leach- 2
Bliley Act., 3
(2) by redesignating paragraphs (38A) and 4
(38B) as paragraphs (38B) and (38C), respectively, 5
lowing: 7
(38A) the term Market Stability and Capital 8
Adequacy Board means the entity established in 9
section 201 of the Consumer Protection and Regu- 10
lator Enhancement Act., and 11
lowing: 13
(40A) The term non-bank financial institu- 14
tion means an institution the business of which is 15
engaging in financial activities that is not an insured 16
depository institution.. 17
(b) APPLICABILITY OF CHAPTERS.Section 103 of 18
title 11, United States Code, is amended 19
(1) in subsection (a) by striking 13 and in- 20
serting 13, and 14, 21
(2) by redesignating subsection (k) as sub- 22
section (l), and 23
(3) by inserting after subsection (j) the fol- 24
lowing: 25

November 5, 2009 (6:37 p.m.)
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4
(k) Chapter 14 applies only in a case under such 1
chapter.. 2
(c) WHO MAY BE A DEBTOR.Section 109 of title 3
11, United States Code, is amended 4
(1) in subsection (b) 5
(A) in paragraph (2) by striking or at 6
the end, 7
(B) in paragraph (3) by striking the period 8
at the end and insert and inserting ; or, and 9
(C) by adding at the end the following: 10
(4) a non-bank financial institution that has 11
not been a debtor under chapter 14 of this title., 12
(2) in subsection (d) by striking or commodity 13
broker and inserting , commodity broker, or a 14
non-bank financial institution, and 15
(3) by adding at the end the following: 16
(i) Only a non-bank financial institution may be a 17
debtor under chapter 14 of this title.. 18
(d) INVOLUNTARY CASES.Section 303 of title 11, 19
the United States Code, is amended 20
(1) in subsection (a) by striking or 11 and 21
inserting , 11, or 14, and 22
(2) in subsection (b) by striking or 11 and 23
inserting , 11, or 14. 24

November 5, 2009 (6:37 p.m.)
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5
(e) OBTAINING CREDIT.Section 364 of title 11, 1
United States Code, is amended by adding at the end the 2
following: 3
(g) Notwithstanding any other provision of this sec- 4
tion, the trustee may not, and the court may not authorize 5
the trustee to, obtain credit, if the source of that credit 6
either directly or indirectly is the United States.. 7
(f) CHAPTER 14.Title 11, United States Code, is 8
amended 9
(1) by inserting the following after chapter 13: 10
CHAPTER 14ADJUSTMENT TO THE 11
DEBTS OF A NON-BANK FINANCIAL IN- 12
STITUTION 13
1401. Inapplicability of other sections.
1402. Applicability of chapter 11 to cases under this chapter.
1403. Prepetition consultation.
1404. Appointment of trustee.
1405. Right to be heard.
1406. Right to communicate.
1407. Exemption with respect to certain contracts or agreements.
1408. Conversion or dismissal.
1401. Inappli cabi li ty of other secti ons 14
Except as provided in section 1408, sections 15
362(b)(6), 362(b)(7), 559, 560, and 561 do not apply in 16
a case under this chapter. 17

November 5, 2009 (6:37 p.m.)
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6
1402. Appli cabi li ty of chapter 11 to cases under 1
thi s chapter 2
With the exception of sections 1104(d), 1109, 3
1112(a), 1115, and 1116, subchapters I, II, and III of 4
chapter 11 apply in a case under this chapter. 5
1403. Prepeti ti on consultati on 6
(a) Subject to subsection (b) 7
(1) a non-bank financial institution may not 8
be a debtor under this chapter unless that institu- 9
tion has, at least 10 days prior to the date of the 10
filing of the petition by such institution, taken part 11
in the consultation described in subsection (c); and 12
(2) a creditor may not commence an involun- 13
tary case under this chapter unless, at least 10 days 14
prior to the date of the filing of the petition by such 15
creditor, the creditor notifies the non-bank financial 16
institution, the functional regulator, and the Market 17
Stability and Capital Adequacy Board of its intent 18
to file a petition and requests a consultation as de- 19
scribed in subsection (c). 20
(b) If the non-bank financial institution, the func- 21
tional regulator, and the Market Stability and Capital 22
Adequacy Board, in consultation with any agency charged 23
with administering a nonbankruptcy insolvency regime for 24
any component of the debtor, certify that the immediate 25
filing of a petition under section 301 or 303 is necessary, 26

November 5, 2009 (6:37 p.m.)
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7
or that an immediate filing would be in the interests of 1
justice, a petition may be filed notwithstanding subsection 2
(a). 3
(c) The non-bank financial institution, the func- 4
tional regulator, the Market Stability and Capital Ade- 5
quacy Board, and any agency charged with administering 6
a nonbankruptcy insolvency regime for any component of 7
the debtor shall engage in prepetition consultation in order 8
to attempt to avoid the need for the non-bank financial 9
institutions liquidation or reorganization in bankruptcy, 10
to make any liquidation or reorganization of the non-bank 11
financial institution under this title more orderly, or to 12
aid in the nonbankruptcy resolution of any of the non- 13
bank financial institutions components under its non- 14
bankruptcy insolvency regime. Such consultation shall spe- 15
cifically include the attempt to negotiate forbearance of 16
claims between the non-bank financial institution and its 17
creditors if such forbearance would likely help to avoid the 18
commencement of a case under this title, would make any 19
liquidation or reorganization under this title more orderly, 20
or would aid in the nonbankruptcy resolution of any of 21
the non-bank financial institutions components under its 22
nonbankruptcy insolvency regime. Additionally, the con- 23
sultation shall consider whether, if a petition is filed under 24

November 5, 2009 (6:37 p.m.)
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8
section 301 or 303, the debtor should file a motion for 1
an exemption authorized by section 1407. 2
(d) The court may allow the consultation process to 3
continue for 30 days after the petition, upon motion by 4
the debtor or a creditor. Any post-petition consultation 5
proceedings authorized should be facilitated by the courts 6
mediation services, under seal, and exclude ex parte com- 7
munications. 8
(e) The Market Stability and Capital Adequacy 9
Board and the functional regulator shall publish and 10
transmit to Congress a report documenting the course of 11
any consultation. Such report shall be published and 12
transmitted to Congress within 30 days of the conclusion 13
of the consultation. 14
(f) Nothing in this section shall be interpreted to 15
set aside any of the limitations on the use of Federal funds 16
set forth in the Consumer Protection and Regulator En- 17
hancement Act or the amendments made by such Act. 18
1404. Appoi ntment of trustee 19
In applying section 1104 to a case under this chap- 20
ter, if the court orders the appointment of a trustee or 21
an examiner, if the trustee or an examiner dies or resigns 22
during the case or is removed under section 324, or if a 23
trustee fails to qualify under section 322, the functional 24
regulator, in consultation with the Market Stability and 25

November 5, 2009 (6:37 p.m.)
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9
Capital Adequacy Board, shall submit a list of five disin- 1
terested persons that are qualified and willing to serve as 2
trustees in the case and the United States trustee shall 3
appoint, subject to the courts approval, one of such per- 4
sons to serve as trustee in the case. 5
1405. Ri ght to be heard 6
(a) The functional regulator, the Market Stability 7
and Capital Adequacy Board, the Federal Reserve, the 8
Department of the Treasury, the Securities and Exchange 9
Commission, and any domestic or foreign agency charged 10
with administering a nonbankruptcy insolvency regime for 11
any component of the debtor may raise and may appear 12
and be heard on any issue in a case under this chapter, 13
but may not appeal from any judgment, order, or decree 14
entered in the case. 15
(b) A party in interest, including the debtor, the 16
trustee, a creditors committee, an equity security holders 17
committee, a creditor, an equity security holder, or any 18
indenture trustee may raise, and may appear and be heard 19
on, any issue in a case under this chapter. 20
1406. Ri ght to communi cate 21
The court is entitled to communicate directly with, 22
or to request information or assistance directly from, the 23
functional regulator, the Market Stability and Capital 24
Adequacy Board, the Board of Governors of the Federal 25

November 5, 2009 (6:37 p.m.)
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10
Reserve System, the Department of the Treasury, or any 1
agency charged with administering a nonbankruptcy insol- 2
vency regime for any component of the debtor, subject to 3
the rights of a party in interest to notice and participation. 4
1407. Exempti on wi th respect to certai n contracts 5
or agreements 6
(a) Subject to subsection (b) 7
(1) upon motion of the debtor, consented to by 8
the Market Stability and Capital Adequacy Board 9
(A) the debtor and the estate shall be ex- 10
empt from the operation of sections 362(b)(6), 11
362(b)(7), 559, 560, and 561; 12
(B) if the Market Stability and Capital 13
Adequacy Board consents to the filing of such 14
motion by the debtor, the Board shall inform 15
the court of its reasons for consenting; and 16
(C) the debtor may limit its motion, or 17
the board may limit its consent, to exempt the 18
debtor and the estate from the operation of sec- 19
tion 362(b)(6), 362(b)(7), 559, 560, or 561, or 20
any combination thereof; and 21
(2) if the Market Stability and Capital Ade- 22
quacy Board does not consent to the filing of a mo- 23
tion by the debtor under paragraph (1), the debtor 24
may file a motion to exempt the debtor and the es- 25

November 5, 2009 (6:37 p.m.)
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11
tate from the operation of sections 362(b)(6), 1
362(b)(7), 559, 560, and 561. 2
(b) The court shall commence a hearing on a motion 3
under subsection (a) not later than 5 days after the filing 4
of the motion to determine whether to maintain, termi- 5
nate, annul, modify, or condition the exemption under sub- 6
section (a)(1) or, in the case of a motion under subsection 7
(a)(2), grant the exemption. The court shall request that 8
the functional regulator and the Market Stability and 9
Capital Adequacy Board file briefs on whether the court 10
should maintain the exemption. The court shall decide the 11
motion not later than 5 days after commencing such hear- 12
ing unless 13
(1) the parties in interest consent to a exten- 14
sion for a specific period of time; or 15
(2) except with respect to an exemption from 16
the operation of section 559, the court sua sponte 17
extends for 5 additional days the period for decision 18
if such extension would be in the interests of justice 19
or is required by compelling circumstances. 20
(c) The court shall maintain, terminate, annul, mod- 21
ify, or condition the exemption under subsection (a)(1), 22
or, in the case of a motion under subsection (a)(2), grant 23
the exemption only upon showing of good cause. In deter- 24
mining whether good cause has been shown, the court 25

November 5, 2009 (6:37 p.m.)
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12
shall balance the interests of both debtor and creditors 1
while attempting to preserve the debtors assets for repay- 2
ment and reorganization of the debtors obligations, or to 3
provide for a more orderly liquidation. 4
1408. Conversi on or di smi ssal 5
In applying section 1112 to a case under this chap- 6
ter, the debtor may convert a case under this chapter to 7
a case under chapter 7 of this title if the debtor may be 8
a debtor under such chapter unless the debtor is not a 9
debtor in possession., and 10
(2) by amending the table of chapters of such 11
title by adding at the end the following: 12
14. Adjustment to the Debts of a Non-Bank Financial Institution ....... 1401.
SEC. 4. EFFECTIVE DATE; APPLICATION OF AMENDMENTS. 13
(a) EFFECTIVE DATE.Except as provided in sub- 14
section (b), this Act and the amendments made by this 15
Act shall take effect on the date of the enactment of this 16
Act. 17
(b) APPLICATION OF AMENDMENTS.The amend- 18
ments made by this Act shall apply only with respect to 19
cases commenced under title 11 of the United States Code 20
on or after the date of the enactment of this Act. 21
SEC. 5. REFORMS OF SECTION 13 EMERGENCY POWERS. 22
(a) RESTRICTIONS ON EMERGENCY POWERS.The 23
third undesignated paragraph of section 13 of the Federal 24
Reserve Act is amended 25

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13
(1) by striking In unusual and exigent and 1
inserting the following: 2
(3) EMERGENCY AUTHORITY. 3
(A) IN GENERAL.In unusual and exi- 4
gent; and 5
(2) by adding at the end the following new sub- 6
paragraph: 7
(B) REQUIREMENT FOR BROAD AVAIL- 8
ABILITY OF DISCOUNTS.Subject to the limita- 9
tions provided under subparagraph (A), any au- 10
thorization made pursuant to the authority pro- 11
vided under subparagraph (A) shall require dis- 12
counts to be made broadly available to individ- 13
uals, partnerships, and corporations within the 14
market sector for which such authorization is 15
being made. 16
(C) TRANSPARENCY AND OVERSIGHT. 17
(i) SECRETARY OF THE TREASURY 18
APPROVAL REQUIRED; NOTICE TO THE 19
CONGRESS.No authorization may be 20
made pursuant to the authority provided 21
under subparagraph (A) unless 22
(I) such authorization is first 23
approved by the Secretary of the 24
Treasury; and 25

November 5, 2009 (6:37 p.m.)
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14
(II) the Secretary of the Treas- 1
ury issues a notice to the Congress 2
detailing what authorization the Sec- 3
retary has approved. 4
(ii) PROGRAMS MOVED ON-BUDGET 5
AFTER 90 DAYS.On and after the date 6
that is 90 days after the date on which any 7
authorization is made pursuant to the au- 8
thority provided under subparagraph (A), 9
all receipts and disbursements resulting 10
from such authorization shall be counted 11
as new budget authority, outlays, receipts, 12
or deficit or surplus for purposes of 13
(I) the budget of the United 14
States Government as submitted by 15
the President; 16
(II) the congressional budget; 17
and 18
(III) the Balanced Budget and 19
Emergency Deficit Control Act of 20
1985. 21
(D) JOINT RESOLUTION OF DIS- 22
APPROVAL. 23
(i) IN GENERAL.With respect to an 24
authorization made pursuant to the au- 25

November 5, 2009 (6:37 p.m.)
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15
thority provided under subparagraph (A), 1
if, during the 90-day period beginning on 2
the date the Congress receives a notice de- 3
scribed under subparagraph (C)(i)(II) with 4
respect to such authorization, there is en- 5
acted into law a joint resolution dis- 6
approving such authorization, any action 7
taken under such authorization must be 8
discontinued and unwound not later than 9
the end of the 180-day period beginning on 10
the date that such authorization was made. 11
(ii) CONTENTS OF JOINT RESOLU- 12
TION.For the purpose of this paragraph, 13
the term joint resolution means only a 14
joint resolution 15
(I) that is introduced not later 16
than 3 calendar days after the date on 17
which the notice referred to in clause 18
(i) is received by the Congress; 19
(II) which does not have a pre- 20
amble; 21
(III) the title of which is as fol- 22
lows: Joint resolution relating to the 23
disapproval of authorization under the 24

November 5, 2009 (6:37 p.m.)
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16
emergency powers of the Federal Re- 1
serve Act; and 2
(IV) the matter after the resolv- 3
ing clause of which is as follows: 4
That Congress disapproves the au- 5
thorization contained in the notice 6
submitted to the Congress by the Sec- 7
retary of the Treasury on the date of 8
relating to 9
. (The blank spaces 10
being appropriately filled in.). 11
(E) FAST TRACK CONSIDERATION IN 12
HOUSE OF REPRESENTATIVES. 13
(i) RECONVENING.Upon receipt of 14
a notice referred to in subparagraph 15
(D)(i), the Speaker, if the House would 16
otherwise be adjourned, shall notify the 17
Members of the House that, pursuant to 18
this section, the House shall convene not 19
later than the second calendar day after 20
receipt of such report. 21
(ii) REPORTING AND DISCHARGE. 22
Any committee of the House of Represent- 23
atives to which a joint resolution is re- 24
ferred shall report it to the House not later 25

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17
than 5 calendar days after the date of re- 1
ceipt of the notice referred to in subpara- 2
graph (D)(i). If a committee fails to report 3
the joint resolution within that period, the 4
committee shall be discharged from further 5
consideration of the joint resolution and 6
the joint resolution shall be referred to the 7
appropriate calendar. 8
(iii) PROCEEDING TO CONSIDER- 9
ATION.After each committee authorized 10
to consider a joint resolution reports it to 11
the House or has been discharged from its 12
consideration, it shall be in order, not later 13
than the sixth day after Congress receives 14
the notice referred to in subparagraph 15
(D)(i), to move to proceed to consider the 16
joint resolution in the House. All points of 17
order against the motion are waived. Such 18
a motion shall not be in order after the 19
House has disposed of a motion to proceed 20
on the joint resolution. The previous ques- 21
tion shall be considered as ordered on the 22
motion to its adoption without intervening 23
motion. The motion shall not be debatable. 24
A motion to reconsider the vote by which 25

November 5, 2009 (6:37 p.m.)
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18
the motion is disposed of shall not be in 1
order. 2
(iv) CONSIDERATION.The joint res- 3
olution shall be considered as read. All 4
points of order against the joint resolution 5
and against its consideration are waived. 6
The previous question shall be considered 7
as ordered on the joint resolution to its 8
passage without intervening motion except 9
two hours of debate equally divided and 10
controlled by the proponent and an oppo- 11
nent. A motion to reconsider the vote on 12
passage of the joint resolution shall not be 13
in order. 14
(F) FAST TRACK CONSIDERATION IN SEN- 15
ATE. 16
(i) RECONVENING.Upon receipt of 17
a notice referred to in subparagraph 18
(D)(i), if the Senate has adjourned or re- 19
cessed for more than 2 days, the majority 20
leader of the Senate, after consultation 21
with the minority leader of the Senate, 22
shall notify the Members of the Senate 23
that, pursuant to this section, the Senate 24

November 5, 2009 (6:37 p.m.)
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19
shall convene not later than the second cal- 1
endar day after receipt of such message. 2
(ii) PLACEMENT ON CALENDAR. 3
Upon introduction in the Senate, the joint 4
resolution shall be placed immediately on 5
the calendar. 6
(iii) FLOOR CONSIDERATION. 7
(I) IN GENERAL.Notwith- 8
standing Rule XXII of the Standing 9
Rules of the Senate, it is in order at 10
any time during the period beginning 11
on the 4th day after the date on 12
which Congress receives a notice re- 13
ferred to in subparagraph (D)(i) and 14
ending on the 6th day after the date 15
on which Congress receives a notice 16
referred to in subparagraph (D)(i) 17
(even though a previous motion to the 18
same effect has been disagreed to) to 19
move to proceed to the consideration 20
of the joint resolution, and all points 21
of order against the joint resolution 22
(and against consideration of the joint 23
resolution) are waived. The motion to 24
proceed is not debatable. The motion 25

November 5, 2009 (6:37 p.m.)
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20
is not subject to a motion to postpone. 1
A motion to reconsider the vote by 2
which the motion is agreed to or dis- 3
agreed to shall not be in order. If a 4
motion to proceed to the consideration 5
of the resolution is agreed to, the joint 6
resolution shall remain the unfinished 7
business until disposed of. 8
(II) DEBATE.Debate on the 9
joint resolution, and on all debatable 10
motions and appeals in connection 11
therewith, shall be limited to not more 12
than 10 hours, which shall be divided 13
equally between the majority and mi- 14
nority leaders or their designees. A 15
motion further to limit debate is in 16
order and not debatable. An amend- 17
ment to, or a motion to postpone, or 18
a motion to proceed to the consider- 19
ation of other business, or a motion to 20
recommit the joint resolution is not in 21
order. 22
(III) VOTE ON PASSAGE.The 23
vote on passage shall occur imme- 24
diately following the conclusion of the 25

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21
debate on a joint resolution, and a 1
single quorum call at the conclusion of 2
the debate if requested in accordance 3
with the rules of the Senate. 4
(IV) RULINGS OF THE CHAIR 5
ON PROCEDURE.Appeals from the 6
decisions of the Chair relating to the 7
application of the rules of the Senate, 8
as the case may be, to the procedure 9
relating to a joint resolution shall be 10
decided without debate. 11
(G) RULES RELATING TO SENATE AND 12
HOUSE OF REPRESENTATIVES. 13
(i) COORDINATION WITH ACTION BY 14
OTHER HOUSE.If, before the passage by 15
one House of a joint resolution of that 16
House, that House receives from the other 17
House a joint resolution, then the following 18
procedures shall apply: 19
(I) The joint resolution of the 20
other House shall not be referred to a 21
committee. 22
(II) With respect to a joint res- 23
olution of the House receiving the res- 24
olution 25

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22
(aa) the procedure in that 1
House shall be the same as if no 2
joint resolution had been received 3
from the other House; but 4
(bb) the vote on passage 5
shall be on the joint resolution of 6
the other House. 7
(ii) TREATMENT OF JOINT RESOLU- 8
TION OF OTHER HOUSE.If one House 9
fails to introduce or consider a joint resolu- 10
tion under this section, the joint resolution 11
of the other House shall be entitled to ex- 12
pedited floor procedures under this section. 13
(iii) TREATMENT OF COMPANION 14
MEASURES.If, following passage of the 15
joint resolution in the Senate, the Senate 16
then receives the companion measure from 17
the House of Representatives, the com- 18
panion measure shall not be debatable. 19
(iv) VETOES.If the President ve- 20
toes the joint resolution, debate on a veto 21
message in the Senate under this section 22
shall be 1 hour equally divided between the 23
majority and minority leaders or their des- 24
ignees. 25

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23
(v) RULES OF HOUSE OF REP- 1
RESENTATIVES AND SENATE.This sub- 2
paragraph and subparagraphs (D), (E), 3
and (F) are enacted by Congress 4
(I) as an exercise of the rule- 5
making power of the Senate and 6
House of Representatives, respec- 7
tively, and as such it is deemed a part 8
of the rules of each House, respec- 9
tively, but applicable only with respect 10
to the procedure to be followed in that 11
House in the case of a joint resolu- 12
tion, and it supersedes other rules 13
only to the extent that it is incon- 14
sistent with such rules; and 15
(II) with full recognition of the 16
constitutional right of either House to 17
change the rules (so far as relating to 18
the procedure of that House) at any 19
time, in the same manner, and to the 20
same extent as in the case of any 21
other rule of that House.. 22
(b) CURRENT PROGRAMS MOVED ON-BUDGET.Not 23
later than 90 days after the date of the enactment of this 24
Act, all receipts and disbursements resulting from any au- 25

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24
thorization made before the date of the enactment of this 1
Act pursuant to the authority granted by the third undes- 2
ignated paragraph of section 13 of the Federal Reserve 3
Act shall be counted as new budget authority, outlays, re- 4
ceipts, or deficit or surplus for purposes of 5
(1) the budget of the United States Govern- 6
ment as submitted by the President; 7
(2) the congressional budget; and 8
(3) the Balanced Budget and Emergency Def- 9
icit Control Act of 1985. 10
SEC. 6. ESTABLISHMENT OF MARKET STABILITY AND CAP- 11
ITAL ADEQUACY BOARD. 12
(a) IN GENERAL.There is hereby established the 13
Market Stability and Capital Adequacy Board (hereafter 14
in this Act referred to as the Board) as an independent 15
establishment in the Executive Branch. 16
(b) CONSTITUTION OF BOARD.Subject to para- 17
graph (4), the Board shall have 11 members as follows: 18
(1) PUBLIC MEMBERS.The following shall be 19
members of the Board 20
(A) The Secretary of the Treasury. 21
(B) The Chairman of the Board of Gov- 22
ernors of the Federal Reserve System. 23
(C) The Chairman of the Securities and 24
Exchange Commission. 25

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25
(D) The Chairperson of the Federal De- 1
posit Insurance Corporation. 2
(E) The Chairman of the Commodity Fu- 3
tures Trading Commission. 4
(F) The Comptroller of the Currency. 5
(G) The Director of the Office of Thrift 6
Supervision. 7
(2) PRIVATE MEMBERS.The Board shall also 8
have 5 members appointed by the President, by and 9
with the advice and consent of the Senate, who shall 10
be appointed from among individuals who 11
(A) are specially qualified to serve on the 12
Board by virtue of their education, training, 13
and experience; and 14
(B) are not officers or employees of the 15
Federal Government, including the Board of 16
Governors of the Federal Reserve System. 17
(3) CHAIRPERSON.The Secretary of the 18
Treasury shall serve as the Chairperson of the 19
Board. 20
(4) DIRECTOR OF FHFA AS INTERIM MEM- 21
BER.Until such time as the charters of the Fed- 22
eral National Mortgage Association and the Federal 23
Home Loan Mortgage Corporation are both repealed 24
pursuant to section 506(d), the Board shall consist 25

November 5, 2009 (6:37 p.m.)
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26
of 12 members with the Director of the Federal 1
Housing Finance Agency serving as a public member 2
under paragraph (1). 3
(c) APPOINTMENTS. 4
(1) TERM. 5
(A) IN GENERAL.Each appointed mem- 6
ber shall be appointed for a term of 5 years. 7
(B) STAGGERED TERMS.Of the members 8
of the Board first appointed under subsection 9
(b)(2), as designated by the President at the 10
time of appointment 11
(i) 1 shall be appointed for a term of 12
5 years; 13
(ii) 1 shall be appointed for a term of 14
4 years; 15
(iii) 1 shall be appointed for a term of 16
3 years; 17
(iv) 1 shall be appointed for a term of 18
2 years; and 19
(v) 1 shall be appointed for a term of 20
1 year. 21
(2) INTERIM APPOINTMENTS.Any member ap- 22
pointed to fill a vacancy occurring before the expira- 23
tion of the term for which such members prede- 24

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27
cessor was appointed shall be appointed only for the 1
remainder of such term. 2
(3) CONTINUATION OF SERVICE.Each ap- 3
pointed member may continue to serve after the ex- 4
piration of the term of office to which such member 5
was appointed until a successor has been appointed 6
and qualified. 7
(4) REAPPOINTMENT TO A 2ND TERM.Each 8
member appointed to a term on the Board under 9
subsection (b)(2), including an interim appointment 10
under paragraph (2), may be reappointed by the 11
President to serve 1 additional term. 12
(d) VACANCY. 13
(1) IN GENERAL.Any vacancy on the Board 14
shall be filled in the manner in which the original 15
appointment was made. 16
(2) ACTING OFFICIALS MAY SERVE.In the 17
event of a vacancy in any position listed in sub- 18
section (b)(1) and pending the appointment of a suc- 19
cessor, or during the absence or disability of the in- 20
dividual serving in such position, any acting official 21
in such position shall be a member of the Board 22
while such vacancy, absence or disability continues 23
and the acting official continues acting in such posi- 24
tion. 25

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28
(e) INELIGIBILITY FOR OTHER OFFICES. 1
(1) POSTSERVICE RESTRICTION.No member 2
of the Board may hold any office, position, or em- 3
ployment in any financial institution or affiliate of a 4
financial institution during 5
(A) the time such member is in office; and 6
(B) the 2-year period beginning on the 7
date such member ceases to serve on the Board. 8
(2) CERTIFICATION.Upon taking office, each 9
member of the Board shall certify under oath that 10
such member has complied with this subsection and 11
such certification shall be filed with the secretary of 12
the Board. 13
(f) QUALIFICATIONS; INITIAL MEETING. 14
(1) POLITICAL PARTY AFFILIATION.Not more 15
than 3 members of the Board appointed under sub- 16
section (b)(2) shall be from the same political party. 17
(2) QUALIFICATIONS GENERALLY.It is the 18
sense of the Congress that individuals appointed to 19
the Commission should be prominent United States 20
citizens, with national recognition and significant 21
depth of experience commensurate with the duties of 22
the Board. 23
(3) SPECIFIC APPOINTMENT QUALIFICATIONS 24
FOR CERTAIN APPOINTED MEMBERS. 25

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29
(A) STATE BANK.Of the members ap- 1
pointed to the Board under subsection (b)(2), 2
at least 1 shall be appointed from among indi- 3
viduals who have had experience as a State 4
bank supervisor or senior management execu- 5
tive with a State depository institution. 6
(B) INSURANCE COMMISSIONER.Of the 7
members appointed to the Board under sub- 8
section (b)(2), at least 1 shall be appointed 9
from among individuals who have served as a 10
State insurance commissioner or supervisor. 11
(4) INITIAL MEETING.The Board shall meet 12
and begin the operations of the Board as soon as 13
practicable but not later than the end of the 180-day 14
period beginning the date of the enactment of this 15
Act. 16
(g) QUORUM.Four of the members of the Board 17
designated under subsection (b)(1) and 3 members of the 18
Board appointed under (b)(2) shall constitute a quorum. 19
(h) QUARTERLY MEETINGS.The Board shall meet 20
upon the call of the chairperson or a majority of the mem- 21
bers at least once in each calendar quarter 22
SEC. 7. FUNCTIONS OF BOARD. 23
(a) PRINCIPAL FUNCTIONS.The principal functions 24
of the Board shall be to 25

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30
(1) monitor the interactions of various sectors 1
of the financial system; and 2
(2) identify risks that could endanger the sta- 3
bility and soundness of the system. 4
(b) SPECIFIC REVIEW FUNCTIONS INCLUDED.In 5
carrying out the functions described in subsection (a), the 6
Board shall 7
(1) review financial industry data collected from 8
the appropriate functional regulators; 9
(2) review insurance industry data, in coordina- 10
tion with State insurance supervisors, for all lines of 11
insurance other than health insurance; 12
(3) monitor government policies and initiatives; 13
(4) review risk management practices within fi- 14
nancial regulatory agencies; 15
(5) review capital standards set by the appro- 16
priate functional regulators and make recommenda- 17
tions to ensure capital and leverage ratios match 18
risks regulated entities are taking on; 19
(6) review transparency and regulatory under- 20
standing of risk exposures in the over-the-counter 21
derivatives markets and make recommendations re- 22
garding the appropriate clearing of trades in those 23
markets through central counterparties; 24

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31
(7) make recommendations regarding any gov- 1
ernment or industry policies and practices that are 2
exacerbating systemic risk; and 3
(8) take such other actions and make such 4
other recommendations as the Board, in the discre- 5
tion of the Board, determines to be appropriate. 6
(c) REPORTS TO FEDERAL FUNCTIONAL REGU- 7
LATORS AND THE CONGRESS.The Board shall periodi- 8
cally make a report to the Congress and the functional 9
regulators on the findings, conclusions, and recommenda- 10
tions of the Board in a manner and within a time frame 11
that allows the Congress and such regulators to act to con- 12
tain risks posed by specific firms, industry practices, ac- 13
tivities and interactions of entities under different regu- 14
latory regimes, or government policies. 15
(d) TESTIMONY TO CONGRESS.Not later than Feb- 16
ruary 20 and July 20 of each year, the Chairperson of 17
the Board shall testify to the Congress at semiannual 18
hearings before the Committee on Banking, Housing, and 19
Urban Affairs of the Senate and the Committee on Finan- 20
cial Services of the House of Representatives, about the 21
state of systemic risk in the financial services industry and 22
proposals or recommendations by the Board to address 23
any undue risk. 24

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32
(e) RULE OF CONSTRUCTION.No provision of this 1
Act shall be construed as giving the Board any enforce- 2
ment authority over any financial institution. 3
SEC. 8. POWERS OF BOARD. 4
(a) CONTRACTING.The Board may, to such extent 5
and in such amounts as are provided in appropriation 6
Acts, enter into contracts to enable the Board to discharge 7
its duties under this Act. 8
(b) INFORMATION FROM FEDERAL AGENCIES. 9
(1) IN GENERAL.The Board may secure di- 10
rectly from any executive department, agency, or 11
independent establishment, or any other instrumen- 12
tality of the United States information and rec- 13
ommendations for the purposes of this Act. 14
(2) DELIVERY OF REQUESTED INFORMATION. 15
Each executive department, agency, or independent 16
establishment, or any other instrumentality of the 17
United States shall, to the extent authorized by law, 18
furnish any information and recommendations re- 19
quested under paragraph (1) directly to the Board, 20
upon request made by the chairperson or any mem- 21
ber designated by a majority of the Commission. 22
(3) RECEIPT, HANDLING, STORAGE, AND DIS- 23
SEMINATION.Information shall only be received, 24
handled, stored, and disseminated by members of 25

November 5, 2009 (6:37 p.m.)
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33
the Board and its staff consistent with all applicable 1
statutes, regulations, and Executive orders. 2
(c) ASSISTANCE FROM FEDERAL AGENCIES. 3
(1) GENERAL SERVICES ADMINISTRATION. 4
The Administrator of General Services shall provide 5
to the Board on a reimbursable basis administrative 6
support and other services for the performance of 7
the Commissions functions. 8
(2) OTHER DEPARTMENTS AND AGENCIES.In 9
addition to the assistance prescribed in paragraph 10
(1), departments and agencies of the United States 11
may provide to the Commission such services, funds, 12
facilities, staff, and other support services as they 13
may determine advisable and as may be authorized 14
by law, including agencies represented on the Board 15
under section 201(b)(1). 16
SEC. 9. RESPONSIBILITIES OF FEDERAL FUNCTIONAL REG- 17
ULATORS. 18
(a) FEDERAL FUNCTIONAL REGULATOR DEFINED. 19
For purposes of this Act, the term Federal functional 20
regulator has the same meaning as in section 509(2) of 21
the Gramm-Leach-Bliley Act, except that such term in- 22
cludes the Commodity Futures Trading Commission. 23
(b) ASSESSMENTS AND REVIEWS.In order to ad- 24
dress current regulatory gaps, each Federal functional 25

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34
regulator shall, before each quarterly meeting of the 1
Board 2
(1) assess the effects on macroeconomic sta- 3
bility of the activities of financial institutions that 4
are subject to the jurisdiction of such agency; 5
(2) review how such financial institutions inter- 6
act with entities outside the jurisdiction of such 7
agency; and 8
(3) report the results of such assessment and 9
review to the Board, together with such rec- 10
ommendations for administrative action as the agen- 11
cy determines to be appropriate. 12
SEC. 10. STAFF OF BOARD. 13
(a) APPOINTMENT AND COMPENSATION.The chair- 14
person, in accordance with rules agreed upon by the Board 15
and title 5, United States Code, may appoint and fix the 16
compensation of a staff director and such other personnel 17
as may be necessary to enable the Board to carry out its 18
functions. 19
(b) DETAILEES.Any Federal Government employee 20
may be detailed to the Board and such detailee shall retain 21
the rights, status, and privileges of his or her regular em- 22
ployment without interruption. 23
(c) CONSULTANT SERVICES.The Board may pro- 24
cure the services of experts and consultants in accordance 25

November 5, 2009 (6:37 p.m.)
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35
with section 3109 of title 5, United States Code, but at 1
rates not to exceed the daily rate paid a person occupying 2
a position at level IV of the Executive Schedule under sec- 3
tion 5315 of title 5, United States Code. 4
SEC. 11. COMPENSATION AND TRAVEL EXPENSES. 5
(a) COMPENSATION.Each member of the Board ap- 6
pointed under section 201(b)(2) may be compensated at 7
not to exceed the daily equivalent of the annual rate of 8
basic pay in effect for a position at level IV of the Execu- 9
tive Schedule under section 5315 of title 5, United States 10
Code, for each day during which that member is engaged 11
in the actual performance of the duties of the Board. 12
(b) TRAVEL EXPENSES.While away from their 13
homes or regular places of business in the performance 14
of services for the Board, members of the Board shall be 15
allowed travel expenses, including per diem in lieu of sub- 16
sistence, in the same manner as persons employed inter- 17
mittently in the Government service are allowed expenses 18
under section 5703(b) of title 5, United States Code. 19

November 5, 2009 (6:37 p.m.)
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F l ow Follow-up
T a Tara W Foscato to: Julie_Chon 11/09/2009 10:44 AM
Julie,
Attached are some public documents and public websites regarding the role of central banks in the
oversight of payment and settlement systems and the specific statutory authorities in some representative
countries:
S p o t a a r P n a e l e CPSS Report on Central Bank Oversight of Payment and Settlement Systems
(This report is a very good high level overview of central banks' role in oversight. ln particular, Annex 1
provides a summary of various central bank statutes and Annex 5 provides a list of weblinks to various
central oversight statutes)
Links to some of the key representative central banks' websites (more are in Annex 5 of the above report):
k K M A h r O g t t Link to Hong Kong Monetary Authority Oversight Statute
http://www.info.gov.hk/hkma/eng/oversight/index.htm
k e y t i y r S t Link to Monetary Authority of Singapore Oversight Statute
http://www.mas.gov.sg/legislation_guidelines/payment_system/index.html
k o g d O g t t Link to Bank of England Oversight Statute
http://www.bankofengland.co.uk/financialstability/role/risk_reduction/payment_systems_oversight/index.ht
m
k o n k i h Link to European Central Bank Oversight
http://www.ecb.int/paym/pol/html/index.en.html
k t o a O Link to Swiss National Bank Oversight
http://www.snb.ch/en/iabout/finstab/finover/id/finstab_oversight
Tara Wade Foscato
Board of Governors
(b) (6)

Committee on Payment and
Settlement Systems

Central bank oversight of
payment and settlement
systems
May 2005
Copies of publications are available from:
Bank for International Settlements
Press & Communications
CH-4002 Basel, Switzerland
E-mail: publications@bis.org
Fax: +41 61 280 9100 and +41 61 280 8100
This publication is available on the BIS website (www.bis.org).
Bank for International Settlements 2005. All rights reserved. Brief excerpts may be reproduced
or translated provided the source is cited.
ISBN 92-9131-685-7 (print)
ISBN 92-9197-685-7 (online)
CPSS - Oversight report - May 2005 iii
Foreword
Central banks have always had a close interest in the safety and efficiency of payment and settlement
systems. One of the principal functions of central banks is to be the guardian of public confidence in
money, and this confidence depends crucially on the ability of economic agents to transmit money and
financial instruments smoothly and securely through payment and settlement systems. The systems
must therefore be strong and reliable, available even when the markets around them are in crisis and
never themselves the source of such crisis.
Central banks have traditionally influenced payment and settlement systems primarily by being banks
which provide a variety of payment and settlement services to other banks. As such, central banks
provide a safe settlement asset and in most cases they operate systems which allow for the transfer of
that settlement asset. It is only relatively recently that oversight has become a function that is more
formal and systematic - namely a function whereby the objectives of safety and efficiency are
promoted by monitoring existing and planned systems, assessing them against these objectives and,
where necessary, inducing change. However, although recent, this development in the nature of
oversight has been rapid and the function has now come to be generally recognised as a core
responsibility of central banks.
Given this importance, and the experience that has been gained over the years, the Committee on
Payment and Settlement Systems felt it would be useful to set out publicly what has been learned
about effective oversight. Most of this report is descriptive and analytical, explaining why and how
central banks oversee payment and settlement systems. It looks at the need for oversight, the source
of central banks responsibilities for oversight, the scope of oversight and the activities that oversight
involves. In addition it looks at cooperative oversight, where more than one central bank or other
authority has responsibilities for a system. However, as well as this description and analysis, the report
also includes 10 principles for effective oversight, each with explanatory text. Five of the principles are
generally applicable to oversight arrangements while the other five are specifically for cooperative
oversight arrangements. All the principles are consistent with, and indeed largely drawn from, the
previous work on payment and settlement systems published by the Committee and earlier groups
reporting to the G10 Governors.
The Committee set up a Working Group on Oversight of Payment and Settlement Systems to help it
produce this report. The CPSS is very grateful to the members of the working group, its chairman,
Martin Andersson of Sveriges Riksbank, and the CPSS secretariat at the BIS for their excellent work in
preparing this report.
Tommaso Padoa-Schioppa, Chairman
Committee on Payment and Settlement Systems
CPSS - Oversight report - May 2005 v
Contents
Foreword ................................................................................................................................................. iii
Introduction...............................................................................................................................................1
Principles for effective oversight...............................................................................................................2
A. General principles for oversight ...........................................................................................2
B. Principles for international cooperative oversight ................................................................4
Section 1: The need for oversight ............................................................................................................8
1.1 The importance of payment and settlement systems..........................................................8
1.2 Central banks interest in payment and settlement systems ...............................................8
1.3 Potential market failures in payment and settlement systems ............................................9
1.4 Central banks oversight of payment and settlement systems ..........................................10
1.5 Concluding remarks...........................................................................................................12
Section 2: Oversight responsibilities ......................................................................................................13
2.1 The basis of oversight responsibilities...............................................................................13
2.2 Oversight objectives...........................................................................................................14
2.3 Oversight standards...........................................................................................................15
2.4 Transparency.....................................................................................................................15
Section 3: Scope of oversight.................................................................................................................17
3.1 Determining scope.............................................................................................................17
3.2 Payment systems...............................................................................................................18
3.3 Securities settlement systems and central counterparties ................................................18
3.4 Payment instruments .........................................................................................................19
3.6 Third-party service providers .............................................................................................20
Section 4: Oversight activities ................................................................................................................22
4.1 Monitoring ..........................................................................................................................22
4.2 Assessment .......................................................................................................................23
4.3 Inducing change.................................................................................................................23
4.4 The organisation of the oversight function.........................................................................25
Section 5: Cooperative oversight ...........................................................................................................28
5.1 The benefits of cooperative oversight between central banks ..........................................28
5.2 Examples of cooperative oversight between central banks ..............................................28
5.3 An analysis of cooperative oversight between central banks............................................30
5.4 Cooperation with other authorities.....................................................................................34
vi CPSS - Oversight report - May 2005
Annex 1: Sources of central banks oversight responsibilities and powers........................................... 36
Annex 2: Designating systems for oversight ......................................................................................... 44
Annex 3: Extracts from the CPSIPS, RSSS, RCCP and IMF transparency code................................. 46
Annex 4: Lamfalussy principles............................................................................................................. 48
Annex 5: Bibliography............................................................................................................................ 50
Annex 6: Members of the CPSS............................................................................................................ 54
Annex 7: Members of the working group............................................................................................... 55
CPSS - Oversight report - May 2005 1
Introduction
1. Oversight of payment and settlement systems is a central bank function whereby the objectives
of safety and efficiency are promoted by monitoring existing and planned systems, assessing them
against these objectives and, where necessary, inducing change.
2. Payment and settlement systems enable the transfer of money and financial instruments. Safe
and efficient systems are fundamental to money being an effective means of payment and to the
smooth functioning of financial markets. Well designed and managed systems help to maintain
financial stability by preventing or containing financial crises and help to reduce the cost and
uncertainty of settlement, which could otherwise act as an impediment to economic activity. Payment
and settlement systems thus play a crucial role in a market economy and central banks have always
had a close interest in them as part of their responsibilities for monetary and financial stability.
3. Central banks are involved in payment and settlement systems in a number of ways. A core role
has always been to provide a safe settlement asset for many systems. Many central banks are also
operators of one or more systems. In addition, central banks are likely to be users of at least some
systems to implement their monetary policy operations and to provide banking services to their own
customers. In pursuit of their public policy objectives with respect to monetary and financial stability,
central banks have sought to influence the design and functioning of payment and settlement systems;
as users and sometimes operators of systems they have acquired expertise in their operation.
4. Other authorities such as banking supervisors and securities regulators may have legal or other
responsibilities for aspects of payment and settlement systems. Where this is the case, central banks
are open to cooperation with these authorities in order to minimise the potential duplication of effort
and the burden on the overseen systems. In principle, each authority should have well defined
responsibilities and specific tools to carry out the responsibilities. By convention, the term oversight is
reserved to designate the specific responsibilities and tools central banks have with regard to payment
and settlement systems due to their unique character of being both a public authority and a bank.
5. The concept of central bank oversight of payment and settlement systems (hereafter simply
oversight) has become more distinct and formal in recent years as part of a growing public policy
concern with financial stability in general. Oversight has developed in part in response to the
expansion of the role of the private sector in providing payment and settlement systems. Where there
has been a risk that the private sector would take insufficient account of negative externalities that
could cause systemic risk, central banks have sought to pursue public policy safety and efficiency
objectives by guiding and influencing system operators. And whether a system is provided by the
private sector or by central banks themselves, the increasing attention to oversight also reflects the
very large increase in the values of transfers cleared and settled, the increasing centralisation of
activity around a small number of key systems, the increasing technological complexity of many
systems and the consequent concern that systemic risk could increase if the design of key systems
did not adequately address various payment and settlement risks.
6. This report explains why and how central banks oversee payment and settlement systems,
looking at both the similarities and differences in approaches and discussing some of the issues that
arise.
1
On the basis of the analysis in the report, the CPSS has agreed a number of principles for the
effective oversight of payment and settlement systems, which are set out in the next section (below).
That section also includes a revised version of the Lamfalussy principles for international cooperative
oversight among central banks and, where applicable, with other authorities.
2
The main report is then
structured as follows. Section 1 explains the importance of payment and settlement systems and why
central banks oversee them. Sections 2 to 4 describe how oversight is currently carried out, focusing
in particular on domestic systems. Finally, Section 5 looks at how, for certain systems, there is a need
for effective cooperation between authorities, focusing in particular on international cooperation.

1
To help prepare this report the CPSS set up a working group consisting of representatives of the CPSS central banks and
the Central Bank of Luxembourg and the report is based on the oversight practices of these central banks, hereafter
referred to as the central banks represented in this report. (See Annexes 6 and 7 for a list of the members of the CPSS
and of the working group.)
2
See Report of the Committee on Interbank Netting Schemes of the central banks of the Group of Ten countries (the
Lamfalussy Report) (BIS, 1990) for the original principles (an extract from the report is in Annex 4).
2 CPSS - Oversight report - May 2005
Principles for effective oversight
7. On the basis of the analysis in this report, this section sets out a number of principles to help
central banks organise and conduct effective oversight. Part A contains general principles applicable
to all oversight arrangements which central banks may find useful when reviewing their own oversight
arrangements. Part B supplements these with principles for international cooperative oversight among
central banks and, where applicable, with other authorities. For ease of reference each principle has
been given a short title but the content of the principles can only be understood by also considering
their full wording and accompanying text.
A. General principles for oversight
8. Payment and settlement systems are a crucial part of the financial infrastructure of a country
and it is essential that they function safely and efficiently. Many systems meet these safety and
efficiency objectives without the involvement of the public sector. However, in certain circumstances
the objectives may not be met without some form of influence by central banks. Oversight should be
undertaken to identify any such circumstances and, where appropriate, induce change. Oversight is a
necessary complement to any other means central banks may use to achieve their public policy
objectives for payment and settlement systems (such as operating certain systems themselves or
providing settlement services to systems).
9. The appropriate scope of oversight depends on the relevance of different payment and
settlement systems to the broad public policy objectives of safety and efficiency. The term systems is
used in this report to refer not only to formal payment and settlement systems but also to other
schemes, arrangements or institutions involving clearing, netting or settlement insofar as they are
functionally similar and relevant to the oversight objectives of an individual central bank; for example,
this may sometimes include netting schemes and large correspondent banks and custodians. Central
banks need to have a good understanding of the payment and settlement arrangements of the
economy as a whole not least in order to decide which individual systems are of sufficient relevance to
the safety and efficiency objectives for oversight policy requirements or standards to be applied to
them.
10. Differences between central banks in the scope of oversight reflect a variety of factors including
differences in the balance between the safety and efficiency objectives and differences in local
payment and settlement systems. They also reflect the fact that payment and settlement
arrangements are changing as a result of emerging developments such as growth in large
correspondent banks and in the use of third-party service providers. Moreover, while scope is
determined by the relevance of particular systems to the oversight objectives, the need, if any, to
induce change depends crucially on the nature and scale of any market failures identified.
11. These general principles are intended to be applicable regardless of such differences and
developments. They are based on the analysis in this report and are consistent with the conclusions of
other reports including the CPSS Core principles for systemically important payment systems (2001)
and Policy issues for central banks in retail payments (2003), the CPSS-IOSCO Recommendations for
securities settlement systems (2001) and Recommendations for central counterparties (2004) and the
IMF Code of good practices on transparency in monetary and financial policies (2000). Effective
oversight is always important but the role of oversight may vary according to the state of development
of the economy; this is discussed further in the CPSS General guidance for the development of
payment systems (forthcoming).
General oversight principle A: Transparency
Central banks should set out publicly their oversight policies, including the policy
requirements or standards for systems and the criteria for determining which systems these
apply to.
12. Central banks should be transparent about their oversight policies to enable payment and
settlement system operators to understand and observe applicable policy requirements and standards.
Through transparency central banks can also demonstrate an appropriate degree of consistency of
oversight approach. And transparency provides a basis for judging the effectiveness of the central
banks policies and thus for the accountability of the central bank for the performance of its oversight.
13. Transparency can be achieved in different ways but typically involves, among other things, one
or more publicly available documents which clearly explain a central banks oversight policies. These
documents should set out the central banks oversight responsibilities, including its objectives, and
how it intends to meet these responsibilities, including the policy requirements or standards for
systems and the criteria for determining which systems these apply to.
General oversight principle B: International standards
Central banks should adopt, where relevant, internationally recognised standards for payment
and settlement systems.
14. The use of relevant international standards concerning safety and efficiency can enhance
central bank oversight of payment and settlement systems. Such standards, including the CPSS Core
principles for systemically important payment systems and the CPSS-IOSCO Recommendations for
securities settlement systems and Recommendations for central counterparties, draw on the collective
experience of many central banks and have been subject to public consultation. The common ground
they represent also makes it easier for central banks to work together to make cooperative oversight
more effective.
General oversight principle C: Effective powers and capacity
Central banks should have the powers and capacity to carry out their oversight responsibilities
effectively.
15. Central banks should seek to ensure that their powers to obtain information and induce change
in payment and settlement systems are in line with their oversight responsibilities for these systems.
Central banks typically use a range of tools to carry out oversight and it is the effectiveness rather than
the form of these tools that is important. In practice most central banks use moral suasion for their
day-to-day oversight and, for some central banks, this and other existing tools are sufficient to obtain
information and induce change. Other central banks have statutory powers that they can also use if
necessary.
16. Central banks should have sufficient resources, including suitably qualified personnel, and an
organisational structure that allows those resources to be used effectively. Although different
organisational models can prove effective, in all cases it should be clear where responsibility for
oversight lies within the central bank. Those involved in carrying out oversight will need to be able to
draw on the skills and expertise of other central bank functions (eg legal, markets, credit, audit and IT).
General oversight principle D: Consistency
Oversight standards should be applied consistently to comparable payment and settlement
systems, including systems operated by the central bank.
17. Consistent application of policy requirements and standards, including to systems operated by
the central bank itself, is important not least because different systems may be in direct competition
with each other (for example, different card schemes providing the same payment service, or large-
value and retail payment systems both being used for large corporate payments). Central banks
should clearly indicate their criteria for determining comparability (for example, the types of
instruments used by a system, the types of participants in a system, or the risk attributes of a system).
18. Where central banks themselves operate payment and settlement systems, consistency is
promoted by transparency about their policies for their own systems and the use of the same policy
requirements and standards, applied at least as rigorously as for comparable private sector systems.
Organisational separation between the central banks oversight and operational functions helps to
ensure the consistent application of policy requirements and standards.
General oversight principle E: Cooperation with other authorities
Central banks, in promoting the safety and efficiency of payment and settlement systems,
should cooperate with other relevant central banks and authorities.
19. Cooperative arrangements provide a mechanism whereby individual responsibilities of central
banks as overseers of payment and settlement systems and other authorities such as securities
regulators and banking supervisors can be fulfilled more effectively through mutual assistance. They
are without prejudice to the statutory or other responsibilities of the authorities involved. Cooperation
enhances oversight efficiency by minimising the potential duplication of effort and the burden on the
overseen system. It also helps to avoid the inconsistency of policy approach that could arise if different
authorities acted independently, and it reduces the possibility of gaps in oversight.
20. Cooperative oversight arrangements should be established for cross-border and multicurrency
systems where such systems are of sufficient relevance to more than one central bank. The principles
which the CPSS considers to be the appropriate guide for international cooperative oversight between
central banks issuing different currencies are set out in Part B below.
21. Depending on national regulatory arrangements and the scope of oversight, cooperation may in
some cases also be needed between central banks and other authorities such as securities regulators
and banking supervisors. The CPSS considers that, with appropriate modification to allow for the
particular circumstances, the principles in Part B may also provide a useful framework for cooperation
in these circumstances, both internationally and domestically.
B. Principles for international cooperative oversight
22. Cross-border and multicurrency payment and settlement systems are of potential oversight
relevance to more than one central bank. The principles which guide cooperative oversight between
central banks in these cases were set out in the 1990 Report of the Committee on Interbank Netting
Schemes of the central banks of the Group of Ten countries (the Lamfalussy Report). These principles
have been successfully used for a variety of cooperative oversight arrangements in addition to the
netting schemes that were originally their primary focus. The CPSS has reviewed the principles in the
light of central banks experience with them since 1990 and concluded that they continue to provide a
useful and flexible framework for international cooperative oversight. However, the CPSS has updated
the principles, in particular to make it clear that the scope of the principles is not limited to netting
schemes. In line with the analysis set out in Section 5, the accompanying text has also been revised to
clarify the practical application of the principles. The revised principles and text are set out below.
23. As explained below, Principle 1 applies to all cross-border and multicurrency payment and
settlement systems, while the subsequent principles apply only to those systems deemed to be of
sufficient relevance to oversight responsibilities to warrant a cooperative oversight arrangement. In
explaining the application of the cooperative principles, the term currency is used to denote not just
money denominated in a particular currency (eg in the case of payment systems being overseen) but
also other financial assets denominated in that currency (eg in the case of settlement systems).
24. The principles apply to cooperative oversight between central banks issuing different currencies
and can also provide a framework for central bank cooperative arrangements involving other
authorities such as banking supervisors and securities regulators where such cooperative oversight is
relevant and acceptable to the authorities concerned. The principles in no way prejudice the statutory
or other responsibilities of central banks or other authorities participating in a cooperative
arrangement. Rather, they are intended to provide a mechanism for mutual assistance among central
banks and other authorities in carrying out their individual responsibilities in pursuit of their shared
public policy objectives for the efficiency and stability of payment and settlement arrangements.
Cooperative oversight principle 1: Notification
Each central bank that has identified the actual or proposed operation of a cross-border or
multicurrency payment or settlement system should inform other central banks that may have
an interest in the prudent design and management of the system.
25. For the purposes of deciding whether or not to set up a cooperative oversight arrangement, the
central banks to be informed of the existence of the system, or the proposal to create the system, will
normally include the central banks of issue of the currencies in the system and the central banks
where the system is located. These central banks should, in turn, seek to inform any other domestic
authorities that may have an interest in the prudent design and management of the system. (For the
purposes of prudential regulation, it may also be desirable in some cases to inform the central banks
where the participants are located, which in turn should inform those supervisory or regulatory
authorities which have responsibilities for the participants.) In the case of a major system that is
already in existence and which handles multiple currencies, this principle could be met by requiring the
system itself to inform the relevant central banks and other authorities or to publicly disclose its cross-
border and multicurrency activities in a way that meant they were transparent to the relevant central
banks and other authorities. Central banks which have the relevant powers may also find it useful to
require financial institutions to report their provision of or participation in any cross-border or
multicurrency payment or settlement system.
26. Central banks are most concerned with the operation of large-value or wholesale systems which
are, or have the potential to become, significant mechanisms for interbank settlements. But Principle 1
should be applied to all systems that may have a cross-border or multicurrency aspect without regard,
in the first instance, to their apparent importance. What may appear to be a small operation in relation
to the market of one country, for example, could be large in relation to the financial markets in another.
Relatively small operations can also grow over time and become more significant.
27. In general, for each significant cross-border or multicurrency system it will be useful to establish
a cooperative oversight arrangement that assists the central banks of the countries or regions where
the system is particularly relevant to their oversight responsibilities. For systems that provide services
in a large number of currencies, this may, for practical reasons, require different degrees of
involvement in the cooperative oversight arrangement in order to support the oversight responsibilities
of relevant central banks.
28. As noted above, in some cases the system may not currently be of sufficient oversight
importance in any country (or only of importance in the country where it is located) and there may be
no need for a cooperative oversight arrangement as set out in the rest of these principles. In such
cases the interested central banks may find it useful to agree arrangements for continued monitoring
of the system so that its importance can be periodically re-evaluated.
Cooperative oversight principle 2: Primary responsibility
Cross-border and multicurrency payment and settlement systems should be subject to
oversight by a central bank which accepts primary responsibility for such oversight, and there
should be a presumption that the central bank where the system is located will have this
primary responsibility.
29. One of the central banks in the cooperative arrangement should, by mutual agreement, have
primary responsibility for oversight of the system (the central bank with primary responsibility). The
acceptance by a central bank of primary responsibility means that it agrees to carry out the role set out
in Principle 3. It does not prejudice the ability of other central banks to fulfil their individual
responsibilities and does not represent any delegation of responsibility to the central bank with primary
responsibility from the other central banks.
30. The central bank with primary responsibility needs to be able and willing to carry out the agreed
role. Determination of which central bank is best placed to carry out the role involves consideration of
a range of factors including the oversight powers available to a central bank, the relevance of the
overseen system to local financial markets and the central banks capacity to carry out effective
oversight. These criteria are often fulfilled best by the central bank where the system is located (in
terms of incorporation, management and operations) and thus there is a presumption that this central
bank will have primary responsibility. However, it could be agreed that another central bank or
authority will have the primary responsibility. This flexibility enables an effective oversight framework to
be created in many circumstances, for example if the system has little importance in the country where
it is located or if it is located in more than one country.
Cooperative oversight principle 3: Assessment of the system as a whole
In its oversight of a system, the authority with primary responsibility should periodically
assess the design and operation of the system as a whole. In doing so it should consult with
other relevant authorities.
31. A key element of the role of the central bank or other authority with primary responsibility is to
carry out periodic comprehensive assessments of the design and operation of the system as a whole
on the basis of agreed policies and standards. Where applicable, internationally agreed standards
such the CPSS Core principles for systemically important payment systems and the CPSS-IOSCO
Recommendations for securities settlement systems and Recommendations for central counterparties
should be used. In carrying out the assessments, the central bank or other authority with primary
responsibility should actively solicit the opinions of the other central banks and authorities in the
cooperative arrangement, recognise their interests and concerns through a process of consultation,
and draw on their expertise where relevant. The aim is to reach consensus but this is without prejudice
to the right of each central bank or other authority, including the one with primary responsibility, to
reach its own conclusions if necessary and act on those conclusions in line with its responsibilities.
32. The central bank or other authority with primary responsibility has several other functions
relating to the cooperative oversight arrangement, including (1) organising an effective, efficient and
clear process for cooperation, (2) facilitating the distribution of the information needed to satisfy the
respective responsibilities of the central banks and other authorities in the arrangement, (3) seeking
agreement on the policies and standards to apply in carrying out the assessments, (4) seeking
consensus on issues of common interest related to risks and risk management of the system,
(5) providing effective communication and coordination in both routine and stressful situations
involving the system, and (6) when appropriate, using its powers and influence over the system to
induce necessary change.
33. Central banks and other authorities should appropriately protect confidential information
received from the system while enabling such information to be shared as necessary with others in the
cooperative arrangement. The open sharing of information is a key prerequisite for effective
cooperation. Any limitations that do exist on the ability to share information should be clearly identified.
34. All central banks and other authorities in the cooperative arrangement should keep each other
informed of relevant developments. In addition, to avoid inconsistencies in the oversight relationship
with the system, individual central banks and other authorities should consult others in the cooperative
arrangement as necessary before implementing policies or taking any action that could materially
affect the system. Because steps taken by one central bank or other authority with respect to a system
could have implications for the others in the cooperative arrangement, this principle should, as far as
possible, be interpreted broadly to cover any policy or action that has a material impact on the system,
including any public assessment of the system.
35. To avoid duplication, inconsistencies or gaps in oversight, all central banks and other authorities
in the cooperative arrangement should agree on their responsibilities and expectations, for example in
a memorandum of understanding (MoU) or similar document. It is particularly important to be clear
about the objectives of the cooperative oversight, the policy requirements and standards against which
the system will be assessed, the scope and frequency of the information to be shared, and the
procedures for assessing the system.
Cooperative oversight principle 4: Settlement arrangements
The determination of the adequacy of a systems settlement and failure-to-settle procedures in
a currency should be the joint responsibility of the central bank of issue and the authority with
primary responsibility for oversight of the system.
36. An important aspect of the assessments of the design and operation of a system is
consideration of the adequacy of its settlement procedures, including, where relevant, those to be
invoked in the event of a participants inability to satisfy its settlement obligations. These procedures
need to be considered in relation not only to the systems overall risk management arrangements but
also in relation to a variety of factors specific to each currency concerned. The factors to be
considered include the soundness of the legal regime; the legal, credit and liquidity implications of a
settlement disruption for the domestic money market; and the solvency and liquidity of settlement
institutions for each currency. Because of its knowledge of domestic markets, and its concern for their
stability, the views of the central bank of issue are particularly important in the assessment of a
systems settlement arrangements. Thus, the central bank or other authority with primary responsibility
has a particular duty to consult with the central bank of issue in order to reach a joint determination of
the adequacy of the systems settlement and failure-to-settle procedures for a particular currency or for
financial assets denominated in that currency. However, this principle is without prejudice to the
importance of the central bank or other authority with primary responsibility consulting others in the
cooperative arrangement about all relevant aspects of the assessments of the system, as set out in
Principle 3.
Cooperative oversight principle 5: Unsound systems
In the absence of confidence in the soundness of the design or management of any cross-
border or multicurrency payment or settlement system, a central bank should, if necessary,
discourage use of the system or the provision of services to the system, for example by
identifying these activities as unsafe and unsound practices.
37. In the course of their consultations, central banks should endeavour to ensure the prudent
operation of cross-border and multicurrency systems on terms acceptable to all relevant central banks.
However, if this is not possible in some cases, it is clear that each central bank must maintain its
discretion to discourage the use of a system or the provision of services to a system, if, in its
judgment, the system is not prudently designed or managed.
Section 1: The need for oversight
1.1 The importance of payment and settlement systems
38. Almost all economic transactions involve some form of payment. Money, in the form of either
cash or bank deposits, is commonly the preferred means of payment for the purchase of goods and
services and for the repayment of debts. While many smaller-value payments are made with cash,
larger payments usually involve the transfer of bank deposits. Modern financial systems also involve
substantial trade in financial instruments such as bonds, equities and derivatives. Payment and
settlement systems enable these transfers of deposit money and financial instruments to take place. A
developed market economy typically has various payment and settlement systems, including large-
value and retail payment systems as well as securities settlement systems. Important roles may also
fall to various other institutions that provide payment and settlement services - for example, central
counterparties, large correspondent banks and custodians.
3
39. For large-value payment systems and securities settlement systems, the total value of
transactions is often such that the equivalent of annual GDP is turned over in just a few days.
4
Interbank lending, the settlement of foreign exchange trades and securities transfers account for the
major portion of the turnover in these large-value systems. The largest volumes of transactions are
handled in the retail payment systems, such as the automated clearing houses, card schemes and
cheque clearings, that are used to pay the bulk of salaries, utility bills, taxes and corporate invoices
and to settle the range of transactions in goods and services that are necessary for a market economy
to function.
1.2 Central banks interest in payment and settlement systems
40. Because payment and settlement systems are essential for financial markets and the economy
as a whole, central banks have always had an intrinsic interest in their safe and efficient functioning.
x Money as a means of exchange
One of moneys fundamental purposes is as a means of exchange, and central banks are
charged with supplying money that fulfils this purpose.
5
If payment and settlement systems,
which facilitate the exchange of money for goods, services and financial assets, were
inefficient or failed altogether, money would not fulfil this purpose effectively and one of the
key tasks of central banks, namely to maintain public confidence in money and in the
instruments and systems used to transfer money, would not be achieved. Central banks thus
promote safe and efficient payment and settlement systems which facilitate exchange and
underpin the liquidity of financial markets.
x Maintenance of the stability of the financial system
Payment and settlement systems are relevant to financial stability for two main reasons. The
first is that the very large values they sometimes handle creates the possibility that a failure
in a system could cause broader financial and economic instability. Because systems form a
network linking all those who participate in them, it is important that they are designed and
operated such that the probability of financial difficulties spreading from one participant to
another is very small.

3
In A glossary of terms used in payment and settlement systems (BIS, March 2003) a payment system is defined as a set of
instruments, banking procedures and, typically, interbank funds transfer systems that ensure the circulation of money and a
settlement system is defined as a system used to facilitate the settlement of transfers of funds or financial instruments. As
noted in Part A of the previous section, in this report, the term system is used to refer not only to such formal payment and
settlement systems but also to other schemes, arrangements or institutions insofar as they are functionally similar and
relevant to the scope of oversight of an individual central bank; for example, this may include netting schemes and large
correspondent banks and custodians.
4
See Statistics on payment and settlement systems in selected countries (BIS, March 2005), Tables 15 and 17.
5
For example, see The role of central bank money in payment systems (BIS, August 2003).
The second reason arises because, in the event of financial stress, market participants or
central banks may wish to supply emergency liquidity to certain participants in a payment
and settlement system in an attempt to encourage the orderly settlement of transactions in
the overall financial system. Safe and efficient payment and settlement systems facilitate the
provision of such support should it prove necessary.
x Implementation of monetary policy
The smooth functioning of systems is also a necessary condition for the effective supply of
central bank money in pursuit of monetary stability objectives. In many countries central
banks implement monetary policy by influencing short-term interest rates through the
purchase and sale of government securities or through collateralised lending. It is important
that safe and efficient payment and settlement systems are available to allow a reliable
transfer of funds and securities between the central bank, its counterparties and the other
participants in the financial system so that the effect of these transactions and thus the
impact of monetary policy is spread throughout the economy.
1.3 Potential market failures in payment and settlement systems
41. There are many payment and settlement systems that function safely and efficiently without
public sector intervention. There may be some cases, however, when market failures lead to some
systems not being as safe or as efficient as is socially optimal. The public sector has a potential role in
mitigating these market failures.
(a) Negative externalities that cause systemic risk
42. A key public policy objective regarding payment and settlement systems is the
reduction of systemic risk - ie the risk that the failure of a payment or settlement system, or
the failure of one system participant to meet its obligations in a system, causes otherwise
sound participants in that system to fail to meet their own obligations. Given that the
payment and settlement process is so fundamental to the business of banking and to the
wider economy, it is important that key systems can continue to function in situations where
one or more of their participants may be suffering financial or operational stress, and that the
systems are designed so as not to increase the risk of such stress arising or spreading.
43. Systemic risk is a form of negative externality - a situation where economic agents
do not themselves pay (or fully internalise) all of the costs associated with their actions. In
the case of payment and settlement systems, such externalities can arise when participants
or operators have insufficient regard to the potential costs or loss that others would incur in
the event of their failure to meet their obligations.
44. There are various reasons why negative externalities can result in a higher than
optimal degree of systemic risk in key payment and settlement systems. For example, in
systems in which individual payments are netted before the final settlement between the
settlement banks, a failure of one bank to pay its net obligation may require other settlement
banks either to unwind large numbers of individual transactions already processed, or to
accept losses that could affect their own solvency. A negative externality exists in such
systems if participants do not internalise the true social cost of a payments unwind, in
particular the cost of the disruption to others that their default can cause. As another
example, in systems such as real-time gross settlement (RTGS) systems where settlement
is not deferred, there may nonetheless still be liquidity interdependencies. Banks generally
rely on incoming payments or securities from other participants to fund their own outgoing
payments or securities transfers. A negative externality exists if participants have insufficient
incentives to consider the full impact on others of delaying their own outgoing payments. As
a third example, operational failure in payment and settlement systems causes disruption to
their users. A negative externality exists if the system designer or operator does not take into
account the full effect of disruption on users and so underinvests in security and resilience.
(b) Network externalities and coordination problems
45. Externalities can also arise because payment and settlement systems are networks.
Positive network externalities occur whenever the additional benefit of a new member is
greater for the entire network (because existing members can now transact more efficiently
with more members) than it is for the new member. However, when a financial institution
decides whether or not to participate in the network, it may only look at the private costs and
benefits of membership and not internalise the additional benefits, if any, to the system and
its users. Since realising the network benefits that are often a key factor in a successful
system can depend on the participation of multiple independent institutions, a great deal of
coordination between these institutions may be needed. This can be difficult if individual
institutions hope that others will bear the costs of that coordination while they free-ride. In
turn this may mean it is impracticable for private institutions to establish new networks and to
migrate to more efficient systems from existing networks, resulting in market inertia that is
inefficient from a social perspective. For example, even if all banks support the introduction
of a particular system, the specific interests of banks of different sizes or which specialise in
different types of business may not coincide, making it difficult to agree on a detailed design.
Network problems may be particularly difficult in retail systems, where usage of the system,
and correspondingly its usefulness, depends not just on the participating banks but also on
the willingness of consumers and merchants to use the payment instrument concerned.
(c) Market concentration and non-contestable monopolies
46. Payment and settlement systems typically exhibit economies of scale; they have high
fixed costs (costs independent of the number of transactions processed) and marginal costs
that are very low as the number of transactions processed increases. In such an
environment, concentration among a few large-scale providers, or even a natural monopoly,
may be the most efficient market structure. Significant market concentration, however, may
lead to a high dependency on a few key payment and settlement systems, without, by
definition, readily available alternatives. For example, although many economies have more
than one retail payment system (particularly where the systems are international, as with
card schemes) the size of the financial sector is in some economies not large enough to
support more than one large-value system. Moreover, market concentration may be
significant enough to give payment and settlement providers market power that leads them
to provide lower levels of services at higher prices, lower investment in risk reduction and
perhaps a lower level of innovation than is socially optimal.
6
47. Finally, although market failures or potential market failures such as those mentioned above
may be a necessary condition for public sector involvement in payment and settlement systems, it is
not sufficient. Policymakers must weigh the benefits of mitigating a market failure with the costs of
such action. While some of the costs of implementing a public solution to a market failure are explicit
and relatively measurable (eg staff costs or the costs of information gathering), other costs, as well as
the benefits, can be difficult to quantify. When acting to mitigate market failures, policymakers must
therefore be confident that solutions have net benefits. Moreover, even where there are net benefits, in
many cases policymakers may need only to identify the failure, leaving the market itself to then
implement an appropriate solution. Indeed, a key role of the public sector is to encourage
transparency about how systems operate, thereby strengthening market discipline.
1.4 Central banks oversight of payment and settlement systems
48. Central banks interest in the safety and efficiency of payment and settlement systems is not
new. Central banks have long played a crucial role in systems by providing a safe settlement asset, by
in many cases operating one or more systems themselves, by participating in systems, and by
contributing to the agreement and exercise of appropriate rules and standards for systems. Through
the combination of their banking function and their key role in fostering public confidence in money,
central banks have acquired unique expertise in the way payment and settlement systems work and
the potential market failures that can exist, an expertise that they have always used to promote
systems which provide an effective means of implementing monetary policy and which help to achieve
financial stability.

6
A distinction should be made between a monopoly that is contestable and one that is non-contestable. For a contestable
monopoly, the threat of entry by a new competitor may be sufficient to reduce market power. In contrast, a non-contestable
monopoly may have weaker incentives to achieve efficiencies because it is unlikely to face competition.
49. The concept of central bank oversight of payment and settlement systems has, however,
become more distinct and formal over the past 15 or so years. Evolving from existing central bank
tasks and activities with respect to payment and settlement systems, the development of an oversight
role in part reflects the expansion of the role of private sector systems and a desire to correct potential
market failures. Whether a system is designed, built and operated by private institutions or by central
banks themselves, the increasing importance of oversight also reflects the increasing sophistication,
complexity and concentration of many systems and the very large increases in the values of transfers
through them. This growth in values and concentration together have raised concerns that significant
systemic risk could arise if the design and operation of systems was inadequate. Central banks have
therefore seen a need to monitor developments in systems operated by the private or public sector
and, where appropriate, to establish and apply relevant standards.
50. There is no unique definition of oversight (see Box 1 for some definitions taken from previously
published reports). While some central banks have set out formal definitions of oversight in public
statements, for others the scope of the term is implicit in the way they conduct that oversight. For the
purposes of this report the following working definition is used:
Oversight of payment and settlement systems is a central bank function whereby the
objectives of safety and efficiency are promoted by monitoring existing and planned
systems, assessing them against these objectives and, where necessary, inducing
change.
This definition covers the public policy objectives of oversight (safety and efficiency), its scope
(payment and settlement systems) and its activities (monitoring, assessing and inducing change).
These three aspects are considered further in Sections 2 to 4 respectively. The definition represents a
common element applicable to all central banks, though it is not intended to prescribe individual
central banks responsibilities, objectives or activities or prescribe the role other authorities may play
with respect to payment and settlement systems.
51. The definition covers not only the assessment of particular systems against any oversight policy
requirements or standards that have been set for them but also the broader activity of understanding
the payment and settlement arrangements as a whole in an economy. This broader understanding is
needed in part to decide which systems are sufficiently relevant to the safety and efficiency objectives
that they should be subject to these specific oversight requirements and standards. But it is also
important in its own right because of the links between systems (created by, for example, overlapping
participation or by the use of one system to settle positions in another) which mean that individual
systems cannot always be assessed in isolation. Moreover, for most central banks, the public policy
objectives of safety and efficiency apply to the collective payment and settlement arrangements of an
economy as well as to the individual components. The broader understanding is also relevant to
non-oversight aspects of the central banks monetary and financial stability functions (for example, to
understanding how the financial system works and what the impact of monetary policy will be).
52. The working definition highlights the activities of the oversight function - monitoring, assessment
and inducing change - that distinguish it from other central bank payment and settlement functions
such as providing settlement services or operating systems.
7
However, these functions are
complementary in the sense that all are carried out in order to achieve the public policy objectives of
safety and efficiency in payment and settlement systems. Oversight is also complementary to
prudential supervision (which may or may not be an additional, separate activity of the central bank) in
that both contribute to financial stability. However, while effective oversight is likely to involve formal
relationships with certain private sector institutions, not least those that operate systems, the aim of
oversight is the safety and efficiency of a system as a whole, focusing on the interconnections
between participating institutions inherent in systems. The concept of payment and settlement
oversight is therefore distinct from prudential supervision and regulation, which focuses on the
soundness of individual financial institutions.

7
Central bank payment and settlement functions can be categorised in different ways. This report focuses on the distinction
between oversight and operations (with the latter covering both the operation or ownership of payment and settlement
systems and the provision to these systems of services such as settlement accounts) (see in particular Section 4.4 below).
Other reports sometimes refer to a third function, that of catalyst (for example, see Policy issues for central banks in retail
payment systems, BIS, 2003). However, because the current report adopts a broad working definition of oversight, it
subsumes the catalyst function within the oversight function insofar as it is carried out to achieve oversight objectives.
Box 1
Some definitions of oversight
1
Lamfalussy Report (1990):
Central banks oversee developments in their domestic interbank markets and in the payment and settlement
systems that support these markets. In their capacities as the ultimate providers of interbank settlements and
as lenders of last resort, central banks have a special interest in the credit and liquidity management practices
of banks, as well as the settlement arrangements that link their credit and liquidity exposures within the
domestic banking system, in order to assess banks abilities to withstand adverse developments without the
need for recourse to extraordinary central bank support. This oversight of the domestic payment system
serves to co-ordinate the various functions of the central bank and may also involve a coordination of the
responsibilities of the monetary and supervisory authorities.
Blue Book (2001):
For payment systems: A central bank task, principally intended to promote the smooth functioning of payment
systems. The objectives of oversight are to protect the financial system from possible domino effects which
may occur when one or more participants in the payment system incur credit or liquidity problems and to foster
the efficiency and soundness of payment systems. Payment systems oversight is aimed at a given system
(eg a funds transfer system) rather than at individual participants. It also covers payment instruments.
For securities settlement systems: A task, principally intended to promote the smooth functioning of securities
settlement systems and to protect the financial system from possible domino effects which may occur when
one or more participants in the securities settlement system incur credit or liquidity problems. The oversight of
securities settlement systems is aimed at a given system (eg a securities transfer system) rather than at
individual participants. It is performed by the competent financial authority/authorities and/or the central bank in
accordance with the local legal framework.
Core Principles (2001) and RSSS (2001):
A public policy activity principally intended to promote the safety and efficiency of payment and securities
settlement systems and in particular to reduce systemic risk.
Policy issues for central banks in retail payments (2003):
Oversight of payment systems is a public policy activity focused on the efficiency and safety of systems, as
opposed to the efficiency and safety of individual participants in such systems. In many countries, the
central banks oversight role is considered an integral element of its function in ensuring financial stability.
_________________________________
1
The full titles of the documents referred to in this box are as follows. Lamfalussy Report: Report of the Committee on
Interbank Netting Schemes of the central banks of the Group of Ten countries (BIS, 1990). Blue Book: Payment and
securities settlement systems in the European Union (ECB, 2001). Core Principles: Core principles for systemically important
payment systems (BIS, 2001). RSSS: Recommendations for securities settlement systems (BIS, 2001). Policy issues for
central banks in retail payments (BIS, 2003).
1.5 Concluding remarks
53. Oversight of payment and settlement systems is closely linked to other core public policy
responsibilities assigned to central banks, including those for issuing money that provides a trusted
means of exchange and for safeguarding financial and monetary stability. The aim of oversight is to
promote public policy safety and efficiency objectives, both where market failures could mean private
sector solutions fail adequately to address systemic risk or result in other unsafe or inefficient
outcomes, and where payment and settlement systems are provided by central banks themselves.
Section 2: Oversight responsibilities
54. This section describes central banks oversight responsibilities. It looks first at the basis of such
oversight responsibilities (Section 2.1) and then at oversight objectives and how central banks
translate those objectives into more detailed standards (Sections 2.2 and 2.3 respectively). It also
considers the importance of oversight responsibilities being transparent (Section 2.4).
2.1 The basis of oversight responsibilities
55. All the central banks represented in this report have responsibility for oversight, but the sources
of authority for their responsibility differ. Four central banks (ECB, D, J, SE)
8
have their oversight
responsibility set out explicitly, but briefly, in a law or treaty. In these cases the relevant law or treaty is
typically the one that establishes the central bank and sets out its functions, and the reference to the
oversight responsibility is a general one (eg to promote the smooth operation of payment systems)
with no further elaboration of what the responsibility involves. Another four central banks either already
have (C, HK) or are about to acquire (NL, SG
9
) detailed statutory responsibility as a result of
legislation specifically concerning oversight and related matters. In these cases, the legislation not
only sets out the central banks oversight responsibility, but also explains it in some detail in terms of,
for example, scope, procedures or requirements. Five other central banks (B, F, I, L, CH) lie
somewhere between these first two groups in that they have an explicit reference to oversight
responsibilities in the law or treaty setting out their functions that is more detailed than that of the first
group although not as comprehensive as that of the second group. (However, of these five central
banks, two (I, CH) have used powers or obligations set out in the primary legislation in order to issue
secondary legislation setting out responsibilities and procedures in more detail, thereby creating a
legal basis for their oversight that is similar in detail to that of the second group of central banks.)
Another central bank (US) derives its oversight responsibilities from a range of statutory
responsibilities for monetary policy, banking supervision, lender of last resort and provision of payment
and settlement services. Finally, one central bank (UK) has its responsibilities set out in a
memorandum of understanding agreed between the central bank, the finance ministry and the
financial supervisory authority. (See Annex 1 for more information on the source of central banks
oversight responsibilities.)
56. As noted in Section 1.4, although central banks have a long and well established interest in the
safety and efficiency of payment and settlement systems, the concept of central bank oversight is
relatively recent. In many jurisdictions, oversight responsibilities tend to be set out explicitly in law
because this is considered necessary to establish the legitimacy and effectiveness of the oversight
activity as part of a normal process of codification in such jurisdictions: as oversight has developed
and become more formal, it is natural for those central banks that have their other responsibilities set
out explicitly in a law or treaty to also include oversight. It is also one way to increase transparency
(see Section 2.4 below). In other jurisdictions oversight is one of the various means by which central
banks implement their broader statutory responsibilities for monetary and financial stability and an
explicit statutory reference to oversight per se is not necessary.
57. Regardless of the basis of the central banks responsibilities, the effectiveness of oversight is
likely to depend on there being an appropriate match between those responsibilities and the tools the
central bank has to carry out oversight. The range of possible tools available to central banks, from
moral suasion to statutory power to directly enforce oversight decisions, is discussed further in
Sections 4.1 and 4.3.

8
The following abbreviations are used in the report to refer to individual central banks: B (National Bank of Belgium), C (Bank
of Canada), ECB (European Central Bank), F (Bank of France), D (Deutsche Bundesbank), HK (Hong Kong Monetary
Authority), I (Bank of Italy), J (Bank of Japan), L (Central Bank of Luxembourg), NL (Netherlands Bank), SG (Monetary
Authority of Singapore), SE (Sveriges R ksbank), CH (Swiss National Bank), UK (Bank of England), US (Federal Reserve
System).
9
The Monetary Authority of Singapore already has explicit responsibilities for the regulation of securities settlement systems
and clearing houses approved under the Securities and Futures Act (2001).
2.2 Oversight objectives
58. Despite differences in their sources of authority and in terminology, central banks share the
same oversight objectives of safety and efficiency. In practice, the priority given to a particular
objective will depend on the assessment of the relevance of the overseen system and of any
weaknesses in the system. For all central banks, tackling any potentially significant systemic risk is
always a priority because of the serious consequences that can arise if the risk is realised. But where
systemic risk is not an immediate issue then, for example, inadequate market infrastructure may mean
that the relative priority for a central bank at a particular time is to promote efficient payment
arrangements within the constraints of broad safety parameters. Or a central bank in a country where
there has been a major payments fraud problem may place particular emphasis on payment system
security.
59. Nevertheless, within this broad area of common agreement, there are differences of emphasis.
For some central banks, there is no a priori assumption about whether safety or efficiency is more
important when drawing up priorities. Priorities will depend on an assessment of the safety and
efficiency implications of each case. This is the situation for the central banks that have explicit
objectives for both safety and efficiency (B, HK, SE, US) and also for some others that have objectives
using other wordings that are interpreted to mean both safety and efficiency: smooth operation
(ECB,
10
NL), regular operation of payments systems and stable, transparent and orderly
performance for securities settlement systems and central counterparties (I), smooth operation and
security (F), shall arrange for the execution of payments and ... contribute to the stability of
payment and clearing systems (D) and operational and financial stability of each system with the
objective of the stability of the financial system as a whole (L).
60. For other central banks, the safety objective generally has primacy in determining priorities,
particularly for large systemically important payment systems (SIPS).
11
However, the safety objective
is tempered by efficiency considerations and trade-offs because the two objectives cannot be
completely separated. For example, a system that is safe but inefficient may be bypassed in favour of
less safe but more efficient arrangements. For two central banks (C, CH), the priority accorded to
safety in determining whether detailed oversight is warranted is set out in legislation.
12
Three other
central banks (J, SG, UK) have both safety and efficiency objectives but emphasise that their public
policy role relates to financial stability, while recognising that the efficiency impact of risk mitigation
policies should be taken into account.
61. Some central banks also have other publicly stated oversight objectives. Thus the Eurosystem
central banks
13
have as objectives the security of payment instruments used by the public (which,
along with safety and efficiency, contributes to maintaining public confidence in the currency) and
safeguarding the transmission channel for monetary policy.
62. In addition to safety and efficiency, other public policy objectives such as control of money
laundering, consumer protection and the avoidance of anticompetitive practices must also be
addressed in the design and operation of payment and settlement systems. A variety of public
authorities, including central banks, have a role in achieving these objectives. Some central banks
regard this as being part of their oversight function although most do not. Whether a particular public
policy objective is considered part of central bank oversight is likely to depend on how a country
chooses to define oversight and how it allocates responsibility for various public policy objectives
between the central bank and other authorities. The range of activities to secure public policy
objectives concerning money laundering, consumer protection and competition is not, however, the
focus of this report.

10
Article 3 of the ECBs statute defines its payment system task to be to promote the smooth operation of payment systems.
However, in terms of powers, Article 22 says that it may make regulations to ensure efficient and sound systems.
11
See Core principles for systemically important payment systems (CPSIPS).
12
The Swiss National Bank also has a long-standing legal responsibility to facilitate the operation of cashless payment
systems, a task which it regards as a basis for acting as a catalyst rather than as overseer.
13
The Eurosystem central banks are the ECB and the national central banks of the euro area.
2.3 Oversight standards
63. In many cases, central banks have translated their oversight objectives into specific standards
that certain payment and settlement systems must meet. Such standards contribute to transparency
and consistency where the objectives alone are insufficient to give those being overseen a clear
indication of how they are going to be assessed.
14
64. In practice the standards applied are usually based on two sets of international standards,
namely the CPSIPS and the RSSS.
15
The recently published RCCP
16
are likely to play a similar role in
future. These standards draw on the experience of many countries and their use represents an area of
common ground for central banks which is particularly useful when it comes to cross-border oversight
arrangements in which overseers need to cooperate (see Section 5).
65. For payment systems, including retail systems, that are systemically important,
17
the CPSIPS
have been adopted by all the central banks represented in this report. In most cases this has been
done formally through a public document. The Eurosystem has also adopted a subset of the CPSIPS
for other important retail systems. A number of central banks have publicly adopted the RSSS as their
oversight standards for securities settlement systems, while the ESCB,
18
in cooperation with the
Committee of European Securities Regulators (CESR), has developed oversight standards based on
the RSSS. There are many other cases where the central banks oversight is in practice based on
international standards even if this policy has not been set out explicitly.
66. Where no international standards exist, central banks have in some cases developed their own
standards or policy requirements for systems they oversee. For example, the Eurosystem has
developed its own standards for e-money, while four central banks have developed or are developing
their own standards for payment instruments (F, I, NL, SG). Two central banks (I, US) have issued
sound practices for business continuity planning in payments, clearing and settlement.
19
Central banks
also make use of good practices developed primarily for other purposes (eg audit practices developed
by the Basel Committee on Banking Supervision) or benchmark their countries systems against those
of others. Finally, in some cases, such as in tackling foreign exchange settlement risk, central banks
have worked together by developing a common strategy that each seeks to have implemented.
20
2.4 Transparency
67. All 15 central banks represented in this report have published some type of formal policy
document setting out their oversight role, thus giving transparency to the extent and nature of their
responsibilities, including objectives, scope and standards. The transparency of oversight
responsibilities has many benefits.
21
It is desirable that those being overseen should understand the
overseers aims and expectations. More generally, transparency provides a basis for others to judge
the effectiveness of the central banks policy and thus for the accountability of the central bank for the
performance of its oversight. At the same time, it is important that, as with any other public policy
activity, increased visibility of the central banks oversight role does not weaken market discipline;
central banks therefore also emphasise that responsibility for meeting any oversight standards rests
with the overseen systems themselves.

14
Oversight standards, directly relating to safety and efficiency objectives, should be distinguished from technical standards
such as message formats (although the use of common technical standards may help to achieve oversight standards).
15
Recommendations for securities settlement systems.
16
Recommendations for Central Counterparties (BIS, 2004).
17
Several central banks have at least one retail system overseen in the same way as a large-value system (see Section 3.2).
18
The European System of Central Banks (ESCB) consists of the ECB and the national central banks of the European Union.
19
The US paper was issued jointly by the Federal Reserve and other US regulators.
20
See Settlement risk in foreign exchange transactions (BIS, 1996).
21
See Annex 3 for relevant extracts from the CPSIPS, the RSSS, the RCCP and the IMFs transparency code.
68. There is much common ground in central banks oversight policies. All the central banks
represented in this report have oversight responsibility and recognise the importance of both safety
and efficiency. Because of their importance for financial stability, the safety of payment and settlement
systems and the reduction of systemic risk are a core concern for all these central banks. Neither
safety nor efficiency can be addressed entirely in isolation, and some differences in the emphasis put
on efficiency primarily reflect the nature of the oversight responsibility that the central bank has been
given.
69. CPSS and CPSS-IOSCO standards embody some key lessons from the collective experience
of many central banks - including many beyond the G10. The common ground they represent makes it
easier for central banks to work together to make oversight more effective.
70. Oversight responsibilities, including objectives and standards, are made transparent for reasons
of consistency, effectiveness and accountability. Transparency can be achieved in different ways.
Setting out responsibilities explicitly in a law or treaty is one way of contributing towards transparency.
Another way is for the central bank to publish some type of formal policy document setting out its
oversight role.
Section 3: Scope of oversight
71. The scope of oversight refers to those payment and settlement systems that central banks
oversee by applying some form of safety and efficiency standards or policy. Section 3.1 looks at the
general criteria for determining scope. Sections 3.2 to 3.4 then discuss the current scope of oversight
in terms of the payment systems, securities settlement systems and instruments included - areas in
which there is substantial common ground between central banks. Finally, Sections 3.5 and 3.6 look in
more detail at two emerging aspects of the scope of oversight, namely large correspondent banks and
custodians and third-party service providers.
3.1 Determining scope
72. The scope of oversight relates closely to the public policy objectives which the central bank
aims to achieve. In many cases the law determines or influences scope. In the case of the central
banks for which oversight responsibility is set out in detail in statute (C, HK and, in future, NL and SG),
the law sets generic criteria to determine which systems should be designated and thus subject to
oversight. In Switzerland, primary legislation sets out that the scope of oversight consists of those
payment and settlement systems that are important for the stability of the financial system, while the
secondary legislation issued by the Swiss National Bank specifies the factors it takes into account in
deciding which systems fall within this category. The legal basis for the Bank of Frances and Bank of
Italys oversight also gives them specific responsibilities for payment instruments. For all these central
banks, the systems within scope include securities settlement systems and central counterparties as
well as payment systems. For the Central Bank of Luxembourg, the legal basis specifies that the
scope of oversight consists of the payment and securities settlement systems in which it participates.
22
73. Other central banks have set out their own criteria for determining scope. For retail systems, the
Eurosystem central banks have a policy of categorising systems into SIPS, PIPS and others for the
purposes of oversight.
23
The Bank of England has stated that the intensity of its oversight is
proportionate to its assessment of the systemic risk posed by a system. The Bank of Japan adopts a
similar policy, with the depth of oversight varying according to the impact of the system on safety and
efficiency. The Federal Reserve concentrates its oversight on payment and settlement systems
expected to handle over $5 billion on any one day, which includes some retail systems. For the
Riksbank, the small number of systems in Sweden means that all are important enough to come within
scope.
74. Some central banks with broad safety and efficiency objectives regard all payment and
settlement systems as being at least partly within scope not least because the interaction between the
various systems can affect the safety and efficiency of the financial system as a whole. Nevertheless,
in general, the scope and depth of oversight may be expected to vary according to the assessment of
a particular systems importance to financial stability and the functioning of the economy, as well as to
the assessment of any untreated risks or the extent of any other market failures. The scope and depth
of oversight may change over time as payment and settlement systems themselves change.
75. A key consideration for central banks in determining the scope of oversight is applying policy
requirements and standards in a consistent way that does not create inappropriate competitive
distortions between comparable systems. Comparability is typically determined based on the types of
instruments settled (eg card schemes, cheques), the types of participants using the system (eg banks)
or the risk attributes of a system (eg size of settlement flows, systemic importance). Irrespective of the
comparability criteria used, central banks promote consistency by being clear and transparent about
their criteria for determining the scope of oversight policy and its application to relevant systems. For
example, the central bank may have policy criteria that determine the relevance of a system based on

22
The Central Bank of Luxembourg also has an overarching task to assist the ESCB, from which it derives oversight
responsibility for other systems.
23
PIPS are defined as payment systems of prominent importance - systems that play a prominent role in the processing and
settlement of retail payments and [whose] failure could have major economic effects and undermine the confidence of the
public in payment systems and in the currency in general. Oversight standards for retail payments, ECB, June 2003.
its size or risk rather than the types of transactions it settles, in which case comparable systems would
be those systems of similar size or risk profile, rather than systems settling similar instruments.
3.2 Payment systems
76. One common element across the central banks represented in this report is that all have
adopted the CPSIPS, and thus all oversee systemically important payment systems (SIPS) according
to these principles (or in some cases a strengthened version of the principles). In practice, all existing
large-value payment systems operated by these central banks or within their oversight scope are
SIPS, and so all have the core principles applied to them.
24
77. Retail payment systems include the direct debit, credit transfer, card and cheque clearing
schemes that are used for the bulk of payments to and from individuals and between individuals and
companies. Retail payment systems are typically used to pay salaries, bills and taxes, as well as for
non-cash purchases of goods and services. Several central banks (J, SE and some Eurosystem
central banks) have at least one retail system that they regard as systemically important (or
equivalent) and to which they thus apply the CPSIPS.
25
The Federal Reserve subjects all payment
systems, including retail systems, that settle over $5 billion to its Payment Systems Risk Policy but
apply the CPSIPS only to those systems that present potential systemic risk.
78. Many central banks also apply some form of oversight standards or policy to at least one
non-SIPS retail system.
26
However, this is not the case for two central banks (D, J) where, although
retail arrangements are within the scope of oversight and it is possible that specific oversight action
could be taken in future, the central banks activity is so far mostly limited to monitoring. It is also not
the case for two others (C, CH) where the central banks would only apply oversight standards or policy
to retail systems if they came under their criteria for designation on systemic risk grounds (C), or were
regarded as SIPS (CH), which is currently not the case.
3.3 Securities settlement systems and central counterparties
79. Oversight of securities settlement systems (SSSs) by central banks is typically conducted
alongside regulation by securities regulators. As noted by the RSSS report, The division of
responsibilities for regulation and oversight of securities settlement systems among public authorities
varies from country to country depending on the legal and institutional framework Securities
regulators, central banks and, in some cases, banking supervisors will need to work together to
determine the appropriate scope of application of the recommendations and to develop an action plan
for implementation.
80. Central banks oversight of SSSs reflects the fact that these arrangements are a key component
of the financial system. Weaknesses in SSSs can be a source of systemic disturbance not just to
securities markets but also to the financial system as a whole. A financial or operational problem at
any of the institutions that perform critical functions in the settlement process or at a major user of an
SSS could result in significant liquidity pressures or credit losses for other participants. Difficulties in
SSSs could also disrupt the ability of the central bank to implement monetary policy effectively. And
any disruption of securities settlements has the potential to spill over to any payment systems used by
the SSS or any payment systems that use the SSS to transfer collateral. In the securities markets
themselves, market liquidity is critically dependent on confidence in the safety and reliability of the
settlement arrangements; traders will be reluctant to trade if they have significant doubts as to whether
the trade will in fact settle.

24
CPSIPS Responsibility B says that The central bank should ensure that the systems it operates comply with the core
principles and CPSIPS Responsibility C says that The central bank should oversee compliance with the core principles by
systems it does not operate and it should have the ability to carry out this oversight.
25
In the euro area six retail systems have been classified as SIPS.
26
Central bank policy towards retail systems is discussed in Policy issues for central banks in retail payments (BIS, March
2003). This report does not set standards or policies for retail systems but does make general recommendations that apply
to some extent to all central banks.
81. In countries where they exist, central counterparties and their payment arrangements are
typically treated for oversight purposes in a similar way to SSSs, albeit with regard to the special
features of such institutions and the potential risk issues which arise. CCPs occupy an important place
in SSSs. A well designed CCP with appropriate risk management arrangements reduces the risks
faced by SSS participants and contributes to the goal of financial stability, but a CCP also
concentrates risks and responsibilities for risk management and therefore the effectiveness of a CCPs
risk control and the adequacy of its financial resources are critical aspects of the infrastructure of the
markets it serves. International standards for CCP risk management have recently been published by
the CPSS and IOSCO.
27
3.4 Payment instruments
82. Non-cash payment instruments, such as payment cards, credit transfers, direct debits and
cheques, are the means by which end users of payment systems transfer funds between their
accounts at banks or other financial institutions. Payment instruments are an essential part of payment
systems, and in particular of the transaction process whereby payments are created, validated and
transmitted.
28
Because of this, some central banks see the oversight of instruments as an integral and
implicit part of the oversight of systems. Other central banks, however, make an explicit reference to
payment instruments as being within the scope of oversight, particularly where they are concerned
about fraud and security issues related to the design of the instruments. In this sense, oversight of
payment instruments typically refers to issues concerning instruments that may be relevant to several
systems (eg where more than one system exists to clear a particular instrument) or that are not the
responsibility of a system (eg where responsibility for the security of an instrument lies with the
participants in a system). In other cases oversight may be concerned with efficiency issues arising
from use of the instrument in the economy as a whole (eg a desire to reduce usage of paper-based
instruments in favour of electronic ones). As with oversight of systems in general, oversight of
payment instruments typically involves the central bank setting some safety and efficiency standards
or policies which the issuers of the instruments must meet.
29
83. Nine central banks regard themselves as directly overseeing payment instruments in some way
that is distinct from their oversight of systems per se (B, ECB, F, D, I, NL, SG, SE, US). Of these, the
statutory responsibilities of two central banks (F, I) specifically include payment instruments with the
objective of maintaining the confidence of the public in means of payment and thus ultimately in
money.
30
3.5 Correspondent banks and custodians
84. Correspondent banks (which provide payment and other services to other banks) and
custodians (which hold securities for their customers, including banks, and provide related services)
are key components of an economys payment and settlement arrangements. In some cases, payment
and settlement flows are concentrated in a few large correspondents and custodians, giving rise to
possible credit and liquidity concentration risks and operational risk.
85. The issue of large correspondent banks and custodians, sometimes called quasi-systems, was
discussed in both the G10 report on consolidation in the financial sector and the central bank money
report.
31
There is no universally accepted definition of a quasi-system but the central bank money

27
Recommendations for central counterparties (BIS, November 2004).
28
See Section 2.2.1 of Clearing and settlement arrangements for retail payments in selected countries, BIS, September 2000.
29
Thus, as noted in footnote 13, there is a distinction between the oversight standards that may be set by the central bank and
the industry technical standards that issuers may adopt in part to meet the oversight standards.
30
The Bank of Italy has the legal power to establish security requirements for e-money products.
31
See, respectively, the Report on consolidation in the financial sector (Group of Ten, January 2001) and The role of central
bank money in payment systems (BIS, August 2003).
report suggested the following as far as payments are concerned (a parallel definition could apply for
securities):
A commercial institution responsible for clearing and settling payments on behalf of
customers which represent, by value, a substantial percentage of payments in a particular
currency, a significant proportion of which are internalised by being settled across the
books of the institution rather than through an organised payment system.
86. Such institutions may sometimes have certain features of systemically important systems and,
in particular, may raise similar risk issues. For example, large correspondent banks and custodians
provide payment and securities services to a wide range of other banks, with many transactions
settling across the books of the correspondent or custodian. The values are, in some cases, extremely
large. And customer banks may, in practice, have little choice in the short term over which
correspondent or custodian to use. There is therefore a case for treating the oversight of some
aspects of the operations of quasi-systems in a compatible (but not identical) way to systems.
87. A number of central banks have been working to understand such risk issues better. But large
correspondents and custodians are also commercial banks that are subject to banking supervision and
thus central bank overseers need to work with and through bank supervisors to monitor and assess
the management of potential risks to the smooth functioning of the payment and settlement process.
32
The task is therefore to work out the most effective form of cooperation between overseers and
supervisors, recognising that this may vary from country to country.
88. In the first place the objective of such cooperation would be to monitor developments and to
understand the scale of any risk. Sometimes the risks involved may be assessed to be minimal or
already adequately addressed through banking supervision. In such cases it may be decided that no
specific oversight action is needed apart from continued contact with banks or their supervisors to
make sure that the situation remains satisfactory. In other cases however, it may be that large
correspondents and custodians are considered to raise potential systemic risk issues and therefore
that central banks, as overseers, have to work with bank supervisors to try to ensure risks, such as
intraday risks, are properly recognised and controlled.
33
Through an appropriate form of cooperation
with banking supervisors, it should be possible to be confident that any risks in large correspondents
and custodians are well understood and managed in a way which enables central banks to be
comfortable that they are carrying out their oversight responsibilities effectively.
3.6 Third-party service providers
89. Another emerging oversight issue is how to respond to the use of third-party service providers
by payment and settlement system operators. The oversight practices of central banks vary widely
with regard to these institutions and in many cases their policy views are still in the formative stages.
90. Systems sometimes contract out - or outsource - part of their operations, such as their IT
infrastructure, to a third party (a service provider). As far as oversight is concerned, a key principle is
that the system retains full responsibility for any outsourced activity that is material to the systems
operation, including responsibility for ensuring that the service provider complies with the oversight
policy of the central bank. To fulfil this responsibility, the system is likely to have to demonstrate to the
central bank that, for example, it has a contract with the service provider that meets certain conditions
(including the ability of the system to make information about the service provider available to the
overseer), that it adequately monitors the service providers performance, and that it has contingency
arrangements to cope with any failure by the service provider to perform satisfactorily.

32
The report on consolidation noted that because of consolidation, central bank oversight of payment systems is becoming
more closely linked with traditional bank safety and soundness supervision at the individual firm level. Increasing
cooperation and communication between banking supervisors and payment system overseers may be necessary both
domestically and cross-border.
33
The report on consolidation also noted that central banks and bank supervisors should carefully monitor the impact of
consolidation on the payment and settlement business, and should define safety standards where appropriate. In particular,
central banks, in conjunction with bank supervisors, may need to consider various approaches, poss bly including
standards, that could be used to limit potential liquidity, credit and operational risks stemming from concentrated payment
flows through a few very large players participating in payment systems.
91. Provided the central bank is content that such requirements are being met by a system, then it
may not always be material from an oversight point of view whether a certain function is performed by
the system itself or outsourced. Specific standards for outsourced activities may therefore not always
be necessary, and the central bank may be able to rely on its existing relationship with the system in
order to ensure that general oversight standards are being met rather than dealing directly with the
service provider.
92. However, one case where the central bank is likely to be more actively involved and not just rely
on its relationship with the system is where a service provider supplies important services to several
key systems. This concentration in the outsourcing market may make it efficient and effective for the
overseer to complement its relationship with the system operators with a direct relationship with the
service provider. Where the service provider supports multiple markets, an international cooperative
oversight arrangement may be desirable (see Section 5). Central banks have established such a
cooperative arrangement in the case of SWIFT, which provides message services supporting payment
and settlement systems in some 200 countries.
93. In other circumstances, central banks approach to outsourcing is likely to reflect the balance
they adopt generally between self-assessment and external assessment when carrying out oversight
(see Section 4.2 below). To the extent that central banks lean towards external assessment, they may
want information from the system about what activities are outsourced; in some cases ex post
information may be enough, while in others the overseer may require prior notification or even the
power to reject an outsourcing arrangement. Similarly, once an outsourcing arrangement is in place,
the central bank needs to decide whether it should deal directly with the service provider in at least
some circumstances. Provided the central bank makes it clear that it does not diminish the systems
own responsibility, the possibility for the central bank to have direct contact with the service provider
could increase the incentive for the system to do its own oversight of the service provider.
34
In cases
where the service provider is a relatively large organisation, it could also usefully strengthen the
negotiating power of the system to make the outsourcing work effectively.
94. To the extent that the central bank feels it may need direct contact with the service provider, the
central bank has to consider whether it has the necessary powers to, for example, request information
or require changes to the way the service is provided. This may be particularly problematic if the
service provider is located abroad or is not a financial institution. If the central bank does not have the
necessary powers, it may be possible for it to obtain them through cooperation with the central bank of
the country where the service provider is located or through the contract between the system and the
service provider.
95. The scope of oversight is set to achieve public policy objectives of safety and efficiency. It
therefore reflects an assessment of the importance of particular payment and settlement systems to
financial stability and to the functioning of the economy as a whole.
96. All central banks oversee large-value payment systems because of the potential for systemic
risk. For other systems, for example retail payment systems, there is more variation in oversight
approaches. By disclosing their policies on the scope of oversight, central banks give clarity with
regard to which systems are within scope and which standards apply in each case.
97. In some areas, central banks are still assessing and considering the appropriate scope and
depth of oversight, and how it should be organised. Large correspondent banks and custodians, as
well as third-party service providers, are examples where scope issues are not yet fully resolved in all
countries. Cooperative arrangements between overseers and banking supervisors are likely to be key
to identifying, understanding and, if necessary, mitigating risks at both the institutional and system
levels.

34
The Bank of Italy monitors the day-to-day operation of the Italian ATM circuit in part in order to encourage participants
themselves to identify and deal with any malfunctioning.
Section 4: Oversight activities
98. This section looks at how central banks currently carry out the three key activities of oversight
discussed in Section 1.4 - namely, monitoring, assessment and inducing change (Sections 4.1 to 4.3
respectively). It also considers how central banks organise their oversight function (Section 4.4). The
section covers both private sector and central bank systems although the activities of monitoring and,
in particular, inducing change are necessarily modified in the case of the central banks own systems
because they are intra-institutional.
4.1 Monitoring
99. In order to carry out effective oversight, central banks need to have a good understanding of
how key payment and settlement systems function and how they relate to each other as part of the
overall financial system. To obtain this understanding they need first to have information on the design
and operation of systems.
(a) Sources of information
100. Central banks often have a wide range of information sources available to them, which may
include:
x publicly available information on system design and performance;
x official system documentation (eg system rules, member documentation, business continuity
plans and other static information setting out how the system operates);
x regular or ad hoc reporting on system activity (including volume and value of transactions,
and operating performance) or on its financial position (including balance sheet and profit
and loss information);
x internal reports of board or committee meetings or from internal auditors;
x self-assessments of compliance with central bank oversight policy;
x bilateral contacts with the system and system participants;
x multilateral meetings including industry group meetings or participation in committees;
x on-site inspections;
x expert opinion from legal advisers and external auditors;
x information from other regulators; and
x customer feedback.
Of these sources, the most important in practice are usually system documentation, reporting on
system activity and bilateral contacts. These three are widely used and judged important by all central
banks for most systems under oversight.
(b) Powers to obtain information
101. Central banks powers to obtain information and perform on-site inspections are closely related
to their powers to induce change, which are discussed further in Section 4.3 below. In summary,
however, of the 15 central banks represented in this report, six have the possibility under the law to
require the systems they oversee to provide relevant information and submit to on-site inspections (C,
F, HK,
35
I, CH, US) while two others are about to acquire such a possibility as part of the oversight
legislation being introduced (NL, SG). Three more central banks (B, L, SE) also have this possibility in
at least certain cases: for the National Bank of Belgium the possibility exists for SSSs; for the Central
Bank of Luxembourg it applies to systems in which it participates (in practice, this is all major

35
The law setting out the oversight powers of the Hong Kong Monetary Authority covers information collection but does not
expressly empower the HKMA to conduct on-site inspections.
systems); and for the Riksbank it applies to systems which are supervised by the Financial
Supervisory Authority. One central bank (ECB) relies on a general power to collect the statistical
information that it needs to perform its tasks, a power which could be used to require systems to
provide relevant information. In practice central banks sometimes also use other tools such as
contracts or they often rely on the voluntary provision of information.
(c) Information on system participants
102. Prudential regulation of individual institutions is, of course, the responsibility of banking
supervisors and securities regulators. However, central banks typically use some information about
the individual participants in systems in order to carry out oversight. For example, in order to assess
whether the system has taken appropriate steps to control systemic risk, the central bank may use
information about the size of any credit exposures that arise in the system between participants. Or
the central bank may be concerned about aspects of efficiency for which it needs data on how
payment queues are in practice managed by the participants. The distinguishing feature of such
information is that it is needed because participants behaviour can affect the risk and efficiency of the
system. Its purpose is to judge whether there needs to be a change in the design or procedures of the
system, not to judge the soundness of an individual participant. Nevertheless, cooperation between
overseers, banking supervisors and securities regulators may be useful to avoid duplication of
information gathering. Or, where information is obtained independently, there may be occasions when
it should be shared between authorities.
4.2 Assessment
103. The information obtained by the central bank through its monitoring is used for two main types
of oversight assessment.
x First, at a general level it is used to understand the whole set of payment and settlement
arrangements in an economy, formulate appropriate oversight policies, including standards,
and, based on an assessment of the risk and efficiency issues that arise, determine which
systems come within the scope of such policies. This general research and analysis of
payment and settlement systems typically contributes not just to oversight per se but also to
other aspects of the central banks monetary and financial stability objectives.
x Second, for those individual systems which come within scope, the information obtained
through monitoring is used to assess whether they meet the relevant policy requirements
and standards. In reaching this decision, central banks typically strike a balance between
self-assessment by the system, which can help to emphasise that it is the system that has
the responsibility of meeting the standards, and external assessment by the central bank,
which enables the central bank to form its own assessment based on all the information
available to it.
4.3 Inducing change
104. Having collected information about the design and operation of a particular system (monitoring)
and used this information to analyse the system in the light of the policy requirements and standards
that have been set (assessment), central banks will in some cases conclude that the system has a
sufficient degree of safety and efficiency and that no further action is required. However, in other
cases they may conclude that policy requirements or standards are not being met, in which event they
may decide it is necessary to induce change. The tools available to central banks to induce change
vary significantly, ranging from moral suasion, possibly supported by voluntary agreements and public
statements, through to statutory powers to enforce oversight decisions.
(a) Moral suasion
105. Discussions with the system operator and participants play an important part in achieving
oversight objectives. Indeed, this is the means normally used by all the central banks represented in
this report to induce change. A central banks persuasiveness in such discussions (often referred to as
moral suasion) depends in the first instance on the quality and thus the strength of its monitoring and
assessment. One of the advantages of moral suasion as a tool is that it encourages central banks to
present a clear and convincing case for change. Moral suasion is derived from the influence on the
payment and settlement system that all central banks already have as issuer of the currency and as
banker to banks and is strengthened by the possibility that, if needed, the central bank could use
various other tools to induce any necessary changes in systems.
(b) Public statements
106. One of the other tools available to central banks is a public statement of their oversight policy.
As noted earlier (see Section 2.4) all central banks publish their oversight policy, primarily in the
interests of transparency and accountability but also because such public statements can be a useful
influence on a system. In particular, a statement of the central banks oversight objectives and any
specific policy requirements or standards set for certain types of systems can usefully reinforce the
markets self-discipline, for example by encouraging systems, their participants or other interested
parties to make their own judgments about the systems design and operation and thus creating
pressure for change if possible weaknesses are found.
107. A number of central banks also regularly publish their oversight assessments of individual
systems. While the motivation for this is also in part a desire for transparency and accountability, some
central banks see this as giving the system a strong incentive to change. Other central banks regard
their assessments as confidential or consider such public statements as a potential power that in
practice is not used.
(c) Voluntary agreements and contracts
108. The ability to induce change may also be enhanced through the use of voluntary agreements or
contracts between the central bank and the system. In some cases agreements and contracts with
system participants are also used. Such agreements and contracts may take many forms, including
customised memoranda of understanding, settlement account agreements or service contracts for
central bank settlement services. and can be used to lay out the requirements and standards to which
the system will be subjected and the role of the central bank in assessing compliance. In France, for
example, the Bank of France has a right to veto in the relevant interbank body any decision that might
jeopardise the security or smooth functioning of the large-value funds transfer systems. In Japan,
according to the rules of payment systems that settle net positions over the Bank of Japans own
system, the operators are required to obtain the approval of the Bank for certain changes such as
those concerning risk management. The rule was established by mutual agreement in each case but,
having been established, now gives the Bank a tool to induce those systems to make any necessary
changes. In Belgium, the National Bank has concluded a bilateral protocol with each of the systems
subject to its oversight. And in Switzerland the Swiss National Bank has contracts with the operator of
the large-value system SIC and its participants which guarantee the SNB a wide range of rights such
as determining participant access, approving system changes, reviewing governance structures and
internal audit reports, and removing incompetent personnel.
36
(d) Participation in systems
109. Another means of influence exists where the central bank participates formally in a systems
governance either as a part-owner of the system or by agreement under the rules governing the
system (including as an official observer). This channel of influence may take the form of shareholding
votes under the same terms as other owners, a veto over key decisions, or merely a seat at the
directors table with access to proprietary information and the opportunity to argue a point of view.
More generally, central banks are often participants in the systems they oversee, giving them some
say in how the system is operated. However, when they use such channels of influence, central banks
need to be transparent about the role they are playing and about the fact that their public policy
objectives may be different from the objectives of other shareholders or participants (see Section 4.4).
(e) Cooperation with other authorities
110. Central banks may cooperate with supervisors or regulators of banks or other financial
institutions which are system owners, participants or users in order to bring about changes to a
system. In some cases, where the system is under supervision and the central bank is both overseer
and supervisor, this is equivalent to the statutory power to require change discussed below.

36
However, in the light of the recently granted statutory oversight powers these contracts will be revised.
(f) Statutory power to require change
111. It is important that central banks have a sufficient range and depth of tools to fulfil their oversight
responsibilities under a variety of circumstances. The tools described above are an important
component of a central banks toolbox and are sufficient in many circumstances. However, a growing
number of central banks now also have direct statutory power to require systems to comply with their
oversight requirements. As well as the powers to obtain information and carry out on-site inspections
(see Section 4.1 above), these statutory powers can include the ability to grant initial approvals to
operate a system, to approve changes to system rules and procedures, to issue cease and desist
orders and to suspend or revoke membership.
112. Of the 15 central banks represented in this report, seven have, or are about to acquire, direct
statutory powers to require change, with such powers corresponding directly to the scope of their
oversight (C, ECB, HK, I, CH and, in future, NL and SG): in these cases the legislation that sets out
the central banks oversight responsibilities also gives them either general powers to carry out their
responsibilities by issuing some form of regulation that is binding on the systems concerned (ECB) or
more specific powers over the systems, including the power to require relevant rule changes to
achieve oversight objectives (C, HK, NL, SG)
37
or both of these (I, CH). However, these central banks
have not yet needed to use their powers to induce change in systems. Three other central banks (B, L
and US) also have statutory powers over certain systems to require change: for the National Bank of
Belgium, this applies to SSSs; for the Central Bank of Luxembourg it applies to systems in which it
participates (in practice, this is all major systems); and for the Federal Reserve it applies to system
operators, participants or service providers which it supervises or has other authority over. Five more
central banks (F, D, J, SE and UK) have no such direct statutory powers to require oversight-related
changes.
(g) Enforcement and sanctions
113. Related to the use of any tool to induce change is the issue of the action the central bank could
take in the event the system fails to comply with its requirements. Since they typically have various
tools available to them, one possibility is for central banks to make use (or threaten to make use) of a
tool that can have greater impact than the one normally used (eg to switch from moral suasion to
publication of its assessment of a system). However, in the case of central banks with direct powers to
require change, an additional possibility is that the system can be taken to court if it fails to comply
with the central banks orders. In most cases the decision to do this rests not with the central bank but
with, for example, the public prosecutor, but the central bank is likely to have a significant influence in
deciding whether to prosecute. The courts in turn may have greater or lesser sanction powers. The
oversight legislation for four central banks (C, HK, I, CH) and proposed for two others (NL, SG) sets
out the penalties which can apply, which include fines and/or imprisonment.
4.4 The organisation of the oversight function
(a) Need for adequate resources
114. As well as having adequate tools, central banks need to have the ability to carry out oversight
effectively. This means having sufficient resources, including suitably qualified personnel and an
organisational structure that allows those resources to be used effectively. In practice, different
organisational models have proved effective, but in all cases an important element is that those
involved in carrying out oversight are able to draw on the skills and expertise of other central bank
functions (for example, legal, markets, credit, audit and IT).
(b) Managing the relationship between oversight and operations
115. All central banks represented in this report provide services to payment and settlement systems -
in particular, they provide settlement accounts. Most central banks also operate at least one payment
or settlement system themselves.
38
As discussed earlier, such operational involvement in systems

37
In some of these cases a system requires prior approval to operate. In others a system can operate without prior approval
but if it meets the criteria set out in the legislation it falls under the central banks statutory powers.
38
This is not the case for the Bank of Canada and the Swiss National Bank.
typically occurs for the same reasons that oversight is now carried out - ie the promotion of safe and
efficient payment and settlement systems. In general, therefore, the objectives of operations and
oversight coincide. The central bank will want to apply at least the same policy requirements and
standards to its own systems as it does to private sector systems in order to achieve the necessary
safety and efficiency.
39
And it will also want to provide services to systems in a way that helps achieve
these objectives. Indeed, one of the tasks of the central bank is to coordinate the oversight and
operations functions to form a coherent approach to payment and settlement systems.
116. Nevertheless, achieving oversight objectives may impose additional costs on the system that
operators or users of the system may be reluctant to bear. And a system operated by the central bank,
or the services it provides to systems, may to at least some extent be in competition with private sector
systems or services. Even where it does not operate a system the central bank will often be a user of
the system to provide banking services to its customers. Or where the central bank is part-owner of an
otherwise private sector system it may, as a shareholder, sometimes face a choice between acting
with the interests of the owners of the system in mind and acting in order to further its oversight
objectives.
117. Recognising this, there are several ways in which central banks manage the relationship
between the oversight and operations functions. A key element of this, discussed in Section 2.4, is for
the central bank to be transparent about its oversight of systems, including its own, and apply the
same requirements and standards to all of them. Central banks also do not use for the purposes of
operating their own systems the information provided by private sector systems as part of the
oversight process. In addition, all the central banks represented in this report have organisational
separation between the oversight function and the operations function, or are about to implement such
a separation. (The operations function refers to the part of the central bank that is responsible for the
day-to-day running of its systems or the provision of payment-related services; however, the central
banks overall policy towards how its systems should operate, including the design and rules of the
system, is sometimes in the oversight function.) This separation means that the assessment of the
central banks own system is carried out by the oversight function rather than by the operations
function itself. The separation also helps to protect the confidentiality of information. As the Core
Principles report noted:
A central bank needs to be clear when it is acting as regulator and when as owner
and/or operator. This can be facilitated by separating the functions into different
organisational units, managed by different personnel.
118. The degree of separation between the functions varies. In the case of the Federal Reserve,
there is an institutional separation, in that operations are carried out by the Federal Reserve Banks
while oversight of these operations is carried out by the Federal Reserve Board. In most of the other
central banks represented in this report (B, C, HK, J, L, SG, SE, CH, UK)
40
the two areas report to
different board members - ie the functions are represented on the central banks governing body by
different directors and it is therefore up to this body to take the final decision if the interests of the
functions may not coincide. In the other central banks the separation exists at one level down - ie the
two functions are represented by the same director but separated at a level down from this
(eg separate divisions in the same department) (ECB, F, D, I, NL).
(c) Assessment of the oversight function
119. As well as being subject, like all the central banks functions, to internal audit, oversight
procedures at some central banks are vetted by a third party of some kind. The third party could be
the external auditors or a body specially set up for this purpose. For example, in Hong Kong a special
committee - the Process Review Committee, consisting of independent external members - has been
set up to review and advise the HKMA on its procedures for applying standards to designated systems
in which the HKMA has a legal or beneficial interest.

39
See CPSIPS Respons bility B and RSSS Recommendation 18 (paragraph 3.85).
40
In the case of the Bank of Japan, board members are not assigned responsibility for particular areas of the Bank but the
separation exists at the highest level where such an assignment exists, namely executive director level.
120. Central banks need to have both the ability and the tools to carry out oversight effectively.
Ability means having sufficient resources, including suitably qualified personnel; it also means having
an organisational structure that allows those resources to be used effectively and with an appropriate
degree of separation from the operational unit. Oversight tools means powers or other means of
influencing systems that are sufficiently strong to enable the central bank to induce change.
121. Central banks typically have a range of oversight tools at their disposal, enabling them to induce
change in payment and settlement systems in line with their oversight responsibilities for these
systems. In some cases central banks have direct statutory powers over payment and settlement
system operators. In other cases, central banks in their role as overseers rely on moral suasion,
backed by various tools such as, for example, powers deriving from the provision of settlement
accounts or the involvement of supervisors.
122. Central banks organise their oversight function in a way that is compatible with their other tasks
relating to payment systems. In particular, central banks set the same standards for systems they
operate as for comparable private sector systems, and apply those standards at least as rigorously.
Section 5: Cooperative oversight
123. Payment and settlement services in the domestic currency are in some cases provided by
systems across national borders. The level of exposure to systemic risk and the liquidity of national
financial markets can therefore depend on the robust design and smooth functioning of systems
located abroad. This creates a need for efficient and effective cooperation between central banks
responsible for oversight of such systems.
124. Cooperation may also be needed between central banks as overseers and other types of
authorities, particularly securities regulators and banking supervisors. Such cooperation may be with
domestic authorities or authorities in different countries. Earlier sections of this report have discussed
several cases, such as securities settlement systems, where the interests of central banks as
overseers and those of other authorities could overlap.
125. This section focuses first on cooperation between central banks issuing different currencies. It
considers the benefits of such cooperative oversight (Section 5.1), describes several examples
(Section 5.2), and analyses factors which make it effective (Section 5.3). However, the CPSS believes
that many of the ideas that should guide international cooperative oversight between central banks are
also helpful when considering cooperation with other authorities, albeit with modifications necessary to
take account of the responsibilities and powers of such authorities; this is discussed in Section 5.4.
5.1 The benefits of cooperative oversight between central banks
126. Individual central banks each have their own oversight responsibilities, sometimes set out
explicitly in a law or treaty, and in all cases integral to fulfilment of their broader financial stability and
monetary policy objectives. Central banks may not be able to satisfy these responsibilities if their
oversight is limited to domestically located payment and settlement systems and does not extend
effectively to systems of relevance to the domestic economy but located abroad.
127. Cooperation in the oversight of such cross-border or multicurrency systems helps to avoid
unnecessary duplication of activity and thus reduces costs both for the overseen system and for the
central banks. It also promotes consistent oversight approaches, minimising the risk that different
central banks impose conflicting requirements on a system. And, perhaps most importantly, it helps
avoid the possibility of oversight gaps that might arise if another authority is wrongly assumed or
relied upon to address safety and efficiency issues adequately or if there is a mismatch between
responsibilities and powers.
41
128. Mutual adoption of the same internationally recognised oversight standards plays an important
role in reducing the risk of inconsistent oversight policies. But it remains only an incomplete response
to this risk, and does nothing to reduce the risk of duplication or gaps. Clearly articulated cooperative
arrangements have therefore been put in place in a number of cases to reduce these risks.
129. Within these cooperative arrangements, each central bank remains accountable for fulfilling its
own oversight responsibilities. System operators remain similarly responsible for meeting any
applicable oversight requirements. But cooperative oversight enables this to happen more efficiently
and effectively.
5.2 Examples of cooperative oversight between central banks
130. Since the Lamfalussy Principles were published in 1990, the central banks represented in this
report have used them as the basis for international cooperative oversight (see Box 2). A core element
of the principles is to create a cooperative arrangement in which one central bank accepts primary
responsibility for oversight and which takes full account of the interests of all relevant central banks.

41
Some central banks with oversight powers over a particular system may have insufficient incentives to prioritise the
systemic risk concerns in foreign countries, while central banks with stronger incentives may not have the necessary powers
or influence over a system located abroad.
Box 2
The 1990 Lamfalussy Principles
(See Report of the Committee on Interbank Netting Schemes of the central banks of the Group of Ten
countries, BIS, November 1990).
The Lamfalussy Principles were developed as a framework that G10 central banks recommended for use in
cooperating with one another and with other authorities. The report noted that the principles are neither a
statement nor an allocation of central banks roles as lenders of last resort and in no way prejudice the
statutory responsibilities of central banks and bank supervisory authorities. Rather, they are intended to provide
a mechanism for mutual assistance among central banks in carrying out their individual responsibilities in
pursuit of their shared objectives for the efficiency and safety of interbank payment and settlement
arrangements. These principles may also be of use to other central banks and supervisory authorities when
considering cross-border and multicurrency settlement structures.
The report also noted that the principles were intended to apply to any netting or clearing system for payments
or currency obligations that is located outside the area of issue of the relevant currency or currencies and are
designed to serve at least three objectives. Firstly, their application should ensure that cross-border systems
are subject to review as systems by a single authority with responsibility to consider the systems impact in
different countries [the central bank which accepts primary responsibility for oversight]. Secondly, they should
provide a cooperative approach to ensure that the interests of different central banks and supervisory
authorities are reflected in the oversight of any one system. Thirdly, cooperation between central banks should,
in particular, help to preserve the discretion of individual central banks with respect to interbank settlements in
their domestic currency.
The principles themselves are as follows (the full text is in Annex 4):
Principles for the cooperative central bank oversight of cross-border and multicurrency netting and settlement
schemes
Each central bank that has identified the actual or proposed operation of a cross-border or multicurrency
netting or settlement system, outside of the country of issue of the relevant currency or currencies, should
inform other central banks that may have an interest in the prudent design and management of the system.
Cross-border and multicurrency netting and settlement systems should be subject to oversight by a central
bank which accepts primary responsibility for such oversight and there should be a presumption that the host-
country central bank will have this primary responsibility.
In its oversight of a system, the authority with primary responsibility should review the design and operation of
the system as a whole and consult with other relevant authorities on its conclusions both in the first instance
and, from time to time, with respect to developments in the systems status.
The determination of the adequacy of a systems settlement and failure-to-settle procedures should be the joint
responsibility of the central bank of issue and the authority with primary responsibility for the system.
In the absence of confidence in the soundness of the design or management of any cross-border or
multicurrency netting or settlement system, a central bank should discourage use of the system by institutions
subject to its authority and, if necessary, identify the use of, or the provision of services to, such a system as
constituting an unsafe and unsound banking practice
131. The Lamfalussy Principles have proved useful in a range of cases. In the past they formed the
basis for the cooperative oversight of the now-defunct ECHO and Multinet schemes for the multilateral
netting of foreign exchange transactions. Currently, they provide a guide for the bilateral information
sharing on systems such as the US dollar and euro RTGS systems in Hong Kong.
42
The principles
have also informed the cooperative oversight and supervisory arrangements for LCH.Clearnet and
Euroclear, although in these cases adaptation was required (this is discussed further in Section 5.4).
They also form the basis for the current cooperative oversight of CLS and SWIFT.
132. In the case of CLS, a mechanism for settling foreign exchange deals, the Federal Reserve has
supervisory responsibility for CLS Bank, which is incorporated in New York, while the CLS holding

42
USD CHATS is a US dollar RTGS system in Hong Kong providing US dollar clearing and settlement services within the
Hong Kong time zone. HSBC was appointed by the HKMA as the settlement institution for the system for a period of five
years from August 2000. Euro CHATS is a euro RTGS system providing euro clearing and settlement services. Standard
Chartered Bank was appointed as the settlement institution for a period of five years from March 2003.
company is incorporated in Switzerland and CLSs primary operational facilities are located in the
United Kingdom. CLS settles foreign exchange transactions in 15 currencies, with the largest volumes
and values of transactions being those in US dollars. The Federal Reserve is the central bank with
primary responsibility in an oversight arrangement involving the central banks that issue these
currencies.
133. SWIFT, a global messaging provider, is incorporated in Belgium. It has operational facilities in
more than one continent, but a substantial proportion of its senior management is based in Belgium.
SWIFT provides services in over 200 countries. The National Bank of Belgium is the central bank with
primary responsibility for oversight in a cooperative oversight arrangement involving the G10 central
banks.
5.3 An analysis of cooperative oversight between central banks
134. Central banks oversight functions have evolved significantly in the almost 15 years since the
Lamfalussy Principles were adopted. Most of the central banks represented in this report now have
their oversight responsibilities set out explicitly in the law or treaty establishing the central bank or in a
separate law. A growing number of central banks now also have direct statutory powers to require
systems to comply with their oversight decisions. Growth in cross-border and multicurrency systems
has meanwhile increased in line with consolidation in the financial industry and the increased
integration of global financial markets.
135. While the Lamfalussy Principles were specifically designed to complement the Lamfalussy
Minimum Standards for cross-border and multicurrency netting schemes, central banks have applied
them in the cooperative oversight of a wider range of payment and settlement service providers,
including SWIFT, as well as securities settlement systems and central counterparties. At the same
time, more comprehensive standards covering payment and settlement systems have been agreed by
CPSS central banks since the original Lamfalussy Standards. These include the Core Principles for
Systemically Important Payment Systems, and - in cooperation with securities regulators - the
Recommendations for Securities Settlements Systems and the Recommendations for Central
Counterparties.
136. Given these developments, the CPSS has reviewed the practical experience of cooperative
oversight arrangements and the application of the Lamfalussy Principles.
(a) The role of the central bank with primary responsibility
137. The introduction to the Lamfalussy Principles states that the principles are without prejudice to
central banks existing oversight responsibilities. The terms primary responsibility and joint
responsibility used in the principles are intended to refer to additional roles that central banks
voluntarily accept vis--vis each other by agreeing to take part in the cooperative arrangement rather
than to any change in their existing responsibilities.
138. The CPSS considers that having a central bank that accepts primary responsibility for oversight
of a system (hereafter the central bank with primary responsibility) is central to efficient and effective
cooperative oversight arrangements. Efficiencies can be achieved, and regulatory burden reduced, by
having a single central bank with clear responsibility for leading the cooperative arrangement and
carrying out oversight activities on behalf of and in cooperation with other central banks.
139. The third Lamfalussy Principle emphasises that a key role of the central bank with primary
responsibility is to carry out periodic comprehensive assessments of the design and operation of the
system as a whole on the basis of agreed policies and standards. The central bank with primary
responsibility produces this consolidated assessment of the system in cooperation with the other
central banks in the cooperative process in a way that takes full account of the responsibilities and
assessments of all the central banks. This process is helped by the use of mutually adopted standards
and by the central bank with primary responsibility drawing on the expertise of other central banks.
The aim is to reach consensus conclusions. The central bank with primary responsibility then
communicates these consensus conclusions to the overseen system and uses its oversight tools, in
conjunction with other central banks as appropriate, to induce any necessary changes in the overseen
system.
140. Central banks involved in cooperative oversight make every effort to reach consensus.
However, although in practice the situation has not yet arisen, it cannot be ruled out that, in extreme
circumstances, it is impossible to reach common agreement on the assessment of the soundness of a
systems design and operation. In these circumstances, to avoid gaps in the process, it would still be
important for the central bank with primary responsibility to draw its own conclusions and use its
powers to induce any necessary change. Other central banks, in line with their domestic
responsibilities, might do likewise. In doing so, all central banks would continue to aim to avoid
inconsistent policies as far as possible. Each central bank would also retain its right, if necessary, to
discourage use of the system or the provision of services to the system, which it might be able to do
using its oversight powers or in cooperation with prudential regulators.
141. While the core role of the central bank with primary responsibility is to assess the system as a
whole and induce any necessary change, experience has shown that there are other roles that this
central bank can also usefully play, including seeking consensus on other oversight issues of common
interest, acting as the main channel for normal communication between the overseers and the
overseen entity on matters of common interest to overseers, and facilitating information exchange
between overseers.
(b) Determining which central bank should have primary responsibility
142. In general the central bank best placed to have primary responsibility is the central bank of the
country where the system is located (in terms of incorporation, management and operations) and thus
there is a presumption in the Lamfalussy Principles that this central bank will take on the role.
However, this may not always be the case. Flexibility enables an effective oversight arrangement to be
created in many circumstances, for example if the system has little importance in the country where it
is located or if it is located in more than one country.
43
143. There are various factors that are relevant when determining which central bank should have
primary responsibility.
x Powers. The possession of effective powers to require information and to induce change in
the overseen system will be an important factor. In many cases the central bank in the
country where the system is located will have the greatest powers.
x Relevance. Some countries financial markets and firms may depend more heavily on a
particular payment and settlement system than others. As well as being the key criterion for
participation in a cooperative arrangement (see below), the relevance of the particular
system for domestic oversight objectives is also an important factor in determining which
central bank should have primary responsibility.
x Capacity. Factors such as the central banks expertise and ability are relevant. Expertise
may depend on matters such as knowledge of the law that governs key contractual
relationships in the system as well as the law that determines the finality of settlement (both
of which may be different from that of the country of incorporation or of the country in which
the system operates). Location has relevance in terms of the central bank with primary
responsibilitys proximity and access to the systems management, as well as to core
processing operations that the central bank might wish to inspect. Ability depends crucially
on the availability of suitably qualified staff. Willingness to take on the additional
responsibilities with respect to other central banks, to consult and to share information as
appropriate is a further key consideration.
It is possible that in some circumstances the authority best placed to take on primary responsibility is
not a central bank but another authority such as a securities regulator or banking supervisor.
Cooperation involving other authorities is considered further in Section 5.4. For simplicity, the rest of
this section refers to central bank without excluding this possibility.
(c) The role of other central banks in the cooperative arrangement
144. Each central bank has a domestic oversight responsibility that can only be met by assessing the
impact of the cross-border or multicurrency system on its domestic economy in terms of its safety and
efficiency objectives and by inducing change where necessary. As discussed above, this can often be

43
For example, because location is defined in terms of incorporation, management or operations, a system that has
operations in only one country has multiple locations if it is incorporated in or managed from another country.
done most effectively through a cooperative arrangement organised by the central bank with primary
responsibility and which takes account of each central banks responsibilities and views. In this
process, just as the central bank with primary responsibility has a duty to consult with other central
banks, they in return have a duty to help the central bank with primary responsibility carry out its
cooperative oversight role.
145. While each central bank needs to understand the system as a whole and assess its overall
safety and soundness in order to understand its possible impact on its domestic economy, it is likely to
have particular expertise in, and a particular interest in, aspects that specifically concern its domestic
currency. Particularly important is the adequacy of the settlement and failure-to-settle procedures in
the currency, including the soundness of the legal basis and the appropriateness of the procedures
given the way domestic financial markets function. This point is covered by the fourth Lamfalussy
Principle.
146. However, while various activities such as communication with the overseen system and
inducing change may in practice be substantially carried out by the central bank with primary
responsibility, this is done in the interests of the efficiency and effectiveness of the cooperative
arrangement and does not imply that the central bank with primary responsibility is necessarily the
only one to carry out such activities. Each central bank retains its right to fulfil its domestic
responsibilities in the way it considers best. Bilateral contact with the overseen system will often be the
most effective and efficient way when the issue concerned is a bilateral one rather than of common
interest. However, from the point of view of the efficiency and effectiveness of the cooperative
arrangement, each participating central bank needs to be willing to share information, to protect the
information it receives and to consult with others in the search for a consistent approach to the
overseen entity. In particular, consultation between central banks before implementing policies or
taking action that may affect the system or its oversight, including publishing assessments of that
system, helps to avoid inconsistencies in the oversight relationship with the system.
147. For those central banks that have a detailed statutory basis for oversight, it can also be useful if
there are provisions to exempt a system from local oversight requirements when effective oversight is
carried out by another central bank to at least equivalent requirements - ie in this case, when it is
carried out partly by the central bank with primary responsibility on behalf of central banks collectively.
The four central banks represented in this report which have, or are about to acquire, a detailed
statutory basis for oversight (see Section 2.1) have, or are likely to have, such an exemption clause.
(d) Determining which other central banks should participate in the cooperative arrangement
148. Before a cooperative arrangement can be set up, interested central banks need to be informed
of the existence of the cross-border or multicurrency system or the proposal to create the system. The
interested central banks include all the central banks whose currencies are processed by the system
and those where the system is located. These central banks should, in turn, seek to inform any other
domestic authorities that may have an interest in the prudent design and management of the system.
44
In the case of a major system that is already in existence and which handles multiple currencies, this
notification requirement could also be met by requiring the system itself to inform the relevant central
banks or to publicly disclose its cross-border and multicurrency activities in a way that meant they
were transparent to the relevant central banks. To help identify systems, central banks which have the
relevant powers may also find it useful to require financial institutions to report their provision of or
participation in any cross-border or multicurrency payment or settlement system.
149. A prime determinant of which central banks participate in any resulting cooperative oversight
arrangement should be the relevance of the cross-border or multicurrency system to their domestic
oversight responsibilities. This will depend among other things on whether or not the system is
supplying critical services to domestic markets, the value or volume of the transactions that it
processes in the domestic currency, the financial or operational interdependence between operations
abroad and domestic operations and any national licensing requirements which may apply. However,

44
As already noted in the context of determining which authority has primary responsibility, for simplicity the rest of this section
refers to central banks without excluding the possibility that other relevant authorities may also participate in the
cooperative arrangement.
the participation of a domestically owned banks foreign subsidiaries or branches in a cross-border or
multicurrency system would not in itself make that system of domestic oversight relevance.
45
150. If a system does not settle the currency of the country in which it is located but has significant
operations in such a country, or operates under the law of such a country, then even if the system is
not of particular relevance to the central bank in that country, the capacity and effective powers of the
central bank will be factors to consider in the decision whether it should participate in the cooperative
oversight arrangement.
151. In the case of systems that process a large number of currencies, or in the case of service
providers such as SWIFT, it may be difficult to establish a cooperative arrangement that, without
compromising the efficiency and effectiveness of the arrangement, involves to the same degree the
central banks of every country the system serves. In such circumstances it may be necessary to limit
direct involvement in day-to-day cooperative oversight activity to certain central banks while
establishing alternative means to support the oversight responsibilities of other central banks.
152. Finally, in some cases, the system may not currently be of sufficient oversight importance in any
country (or only of importance in the country where it is located) to warrant a cooperative oversight
arrangement as set out in the Lamfalussy Principles. In such cases the interested central banks may
find it useful to agree on arrangements for continued monitoring of the system so that its importance
can be periodically re-evaluated.
(e) Clarity of the cooperative arrangement
153. While the Lamfalussy Principles provide a common basis for international cooperative oversight,
individual arrangements will need to be tailored according to the type and importance of the system
being overseen. Moreover, practical experience with cooperative oversight arrangements has revealed
that it is useful to have clarity about the roles of participants in a cooperative arrangement and about
practical matters such as the extent and frequency of information sharing. Central banks have
therefore often found it useful to document how the cooperative arrangement will work in each case. In
some circumstances, multilateral or bilateral memoranda of understanding (MoUs) between central
banks have proved an effective means of providing the desired clarity. Box 3 sets out the possible
content of such an MoU.
154. However, central banks will need to be comfortable that an MoU does not adversely affect their
domestic responsibilities, which may be the case in some jurisdictions. Moreover, although an MoU or
similar document can provide a useful basis for cooperative oversight, it is not a substitute for the
development of a close working relationship between the central banks involved so that the interests
and concerns of all of them are understood and accommodated as far as possible.
155. Achieving the benefits of a cooperative oversight arrangement is likely to be significantly easier
where all participating central banks agree on the broad objectives of oversight and on the particular
policy requirements and standards against which an overseen entity is to be assessed. In practice, the
common objectives of safety and efficiency and the widespread use of international standards such as
the CPSIPS and RSSS (and, in future, the RCCP) provide a good foundation for cooperation.
Nevertheless, to the extent that there are differences in oversight objectives, it can be helpful to make
these transparent in order to avoid possible misunderstandings.

45
Nevertheless, the system could be of interest to domestic prudential authorities such as banking supervisors or securities
regulators for purposes of prudential regulation, rather than of cooperative oversight, for example if the credit or liquidity
exposures or other risks incurred as a result of participation in the system were potentially significant. When informing
central banks of the existence of a cross-border or multicurrency system, it may therefore sometimes be desirable to also
inform the central banks of the countries where the participants in the system are incorporated so that these central banks
can inform any supervisory or regulatory authorities that have responsibilities for those participants.
Box 3
Possible content of a memorandum of understanding
The objectives of the cooperative oversight arrangement and the policy requirements and standards against
which the system will be assessed.
The role of each central bank in the cooperative oversight arrangement.
The source of authority for the oversight role of the central bank with primary responsibility.
Channels for communication with the overseen system, including the balance between the role of the central
bank with primary responsibility as the main channel of communication on matters of mutual interest and
provision for bilateral communications where this is a more efficient means of satisfying local responsibilities.
The range of information to be exchanged, the processes to be followed in exchanging information, and the
arrangements to protect confidential information.
Arrangements for the production of assessments of the system as a whole.
Arrangements for the implementation and monitoring of jointly agreed policies.
The range of decisions where ex ante consensus will be sought.
Crisis-communication procedures.
Practical matters eg meeting frequencies.
Process for regular and/or ad hoc reviews of the cooperative oversight arrangement.
5.4 Cooperation with other authorities
156. In addition to cooperation between central banks, cooperation with other authorities is likely to
be desirable or even necessary in a number of circumstances. The discussion of scope in Section 3
included several instances where the oversight responsibilities of central banks are closely related to
the responsibilities of other prudential regulators. In some countries some payment systems are
subject not just to oversight but also to banking supervision, and in all CPSS member countries
securities settlement systems are subject to regulation by a securities regulator.
46, 47
157. Where systems must deal with multiple public authorities, cooperation between the authorities is
likely to be beneficial.
48
The aims of avoiding gaps, inefficiency, duplication and inconsistency and of
reducing unnecessary regulatory burden will be of similar or perhaps greater importance where a
wider range of authorities is involved. The CPSS considers that, with appropriate adaptation to allow
for the particular circumstances, the principles for cooperative oversight between central banks may
also provide a useful framework for cooperation between central banks and other authorities such as
securities regulators and banking supervisors, both internationally and domestically. In particular, the
principles recognise that each regulator will need to fulfil its own regulatory responsibilities, that
cooperation will be without prejudice to these responsibilities, and that there will be no delegation of
these responsibilities. But in the interests of minimising regulatory burden and of efficiency there may
be scope to coordinate or share some activities where this is permissible under national law. There will
be benefits to gain from an authority accepting primary responsibility on the basis of the powers and
instruments available to it, the importance of the system to its local financial system, and its capacity
and willingness to perform this role.
158. There are a number of examples where central banks and other authorities have domestic or
international cooperative arrangements. An example of a generally applicable agreement is the MoU
between payment system overseers and banking supervisors in the European Union that was signed

46
Other authorities, such as competition authorities, may also have an interest in payment and settlement systems although in
many cases this will be to investigate a particular issue and may not require a continuing cooperative process.
47
In Italy the question of coordination is partly an intra-institutional one since the Bank of Italy has the functions of oversight,
banking supervision, financial supervision and promotion of competition among credit institutions.
48
These benefits were recognised in both the 1990 Lamfalussy Principles and the 2001 CPSIPS.
in preparation for the introduction of the euro. The Swiss Federal Banking Commission, the Swiss
National Bank and the UK Financial Services Authority have an MoU concerning the oversight and
supervision of SIS x-clear (a central counterparty). In the Netherlands, there is an MoU between the
Netherlands Bank and the securities regulator concerning the oversight and regulation of SSSs. The
Italian and French central banks and securities regulators have an MoU concerning the clearing
houses that jointly serve the Italian MTS market for government securities. The Belgian, Dutch,
French, Portuguese and UK overseers and supervisors of LCH.Clearnet have agreed a multilateral
MoU supporting the efficient sharing of information. The relevant subsets of these authorities have
also drawn up bilateral and multilateral MoUs to coordinate oversight and supervision of Euroclear.
Identification and communication of the common policy requirements and standards with which all
authorities expect the system to comply can be an important foundation for such multilateral
arrangements. The joint work of the CPSS and IOSCO to promulgate the RSSS and RCCP provide a
set of internationally recognised standards which can be used for this purpose.
159. Effective cooperation can help to avoid the possibility of gaps, duplication or inconsistencies in
the oversight of international systems. Such cooperative oversight should normally involve the central
banks of those countries for which the system has particular oversight relevance. A central bank
should accept primary responsibility for a systems oversight on the basis of its powers and capacity
and the relevance of the system to its oversight responsibilities, with a presumption that this central
bank will be the one where the system is located. A key role of this central bank should be to carry out
periodic assessments of the design and operation of the system as a whole, consulting with the other
central banks in the arrangement. Other roles of the central bank with primary responsibility are likely
to include acting as a main channel for communication between the overseers and the overseen
system, sharing information as appropriate with other overseers, seeking consensus on issues of
common interest, and using its oversight powers to implement mutually agreed policies, all without
prejudice to the national responsibilities of each central bank. The responsibilities and expectations of
each party in the cooperative oversight arrangement should be clearly agreed. The CPSS also
considers that, with appropriate adaptation to allow for the particular circumstances, the principles may
also provide a useful framework for to cooperation between central banks and other authorities such
as securities regulators and banking supervisors, both internationally and domestically.
Annex 1:
Sources of central banks oversight
responsibilities and powers
This annex provides information about the treaties, statutes or other documents external to the central
bank that are relevant to its oversight responsibilities and powers.
Institution Source of responsibilities Source of powers
National Bank
of Belgium
National Bank of Belgium Organic Law
(1998)
shall supervise the smooth operation of
the clearing and payment systems and shall
satisfy itself that they are efficient and
sound.
It shall provide for the enforcement of the
regulations adopted by the ECB in order to
ensure the efficiency and soundness of the
clearing and payment systems within the
European Community and with other coun-
tries.
National Bank of Belgium Organic Law
(1998)
It may carry out all transactions or provide
facilities for these purposes.
Law on the supervision of financial sector
and services (2002)
For SSSs, it recommends to the legislator:
the rules for clearing as well as the
conditions and procedures for the granting
of approval to the clearing institutions, the
rules for their supervision as well as the
minimum requirements in terms of organi-
sation, operation, financial position, internal
audit and risk management applicable to
clearing institutions that are not credit insti-
tutions.
the rules for the supervision of the
settlement institutions, the minimum require-
ments in terms of organisation, operation,
financial position, internal audit and risk
management applicable to settlement insti-
tutions that are not credit institutions, the
standards for the oversight by the NBB of
the settlement systems, the information
provision requirements of the NBB as well
as the coercive measures the NBB can take
when the settlement institutions no longer
satisfy the requirements that apply to them.
Bank of Canada Payment Clearing and Settlement Act
(1996)
Whereas the Bank of Canada takes
actions to promote the efficiency and
stability of the Canadian financial system,
including providing the means of settlement
of Canadian dollar payments, acting as
lender of last resort and, in consultation with
other central banks, developing and imple-
menting standards and practices to recog-
nise and manage risk associated with sys-
tems for clearing and settling payment obli-
gations; . And whereas Parliament recog-
nises that it is desirable and in the national
interest to provide for the supervision and
regulation of such clearing and settlement
systems in order to control risk to the finan-
cial system in Canada and promote its effi-
ciency and stability; ...
Payment Clearing and Settlement Act
(1996)
4 (1) Where the Governor of the Bank is of
the opinion that a clearing and settlement
system may pose a systemic risk, the
Governor may, if the Minister is of the opi-
nion that it is in the public interest to do so,
designate the clearing and settlement sys-
tem .
9 (1) Every clearing house shall, in respect
of its designated clearing and settlement
system, provide the Bank with reasonable
notice in advance of any change that is of
a significant nature [including] ... (a) the
constating documents and by-laws of the
clearing house; (b) the operation of the
system; or (c) the by-laws, agreements,
rules, procedures, guides or other documen-
tation governing the system.
Bank of Canada
(cont)
6 (1) Where the Governor is of the
opinion that (a) a clearing house (b) a
participant or (c) the designated clearing
and settlement system is operating or is
about to operate in a way that is likely to
result in systemic risk being inadequately
controlled, the Governor may issue a direc-
tive to the clearing house requiring it to
(d) refrain from engaging in the act, omis-
sion or course of conduct or have the partici-
pants refrain from engaging in the act,
omission or course of conduct, and
(e) perform such acts or have the partici-
pants perform such acts as are neces-
sary to remedy the situation.
6 (2) Where the Governor has formed an
opinion under subsection (1) that systemic
risk is being inadequately controlled and
(a) the clearing house fails to comply with a
directive (b) the designated clearing and
settlement system does not have a clearing
house located in Canada, or (c) (i) sys-
temic risk is being inadequately controlled
due to an act, omission or course of conduct
by a participant with respect to its partici-
pation in the designated clearing and settle-
ment system, and (ii) the act, omission or
course of conduct is not subject to the
rules [etc] governing the designated clearing
and settlement system, the Governor may
issue a directive to the participants requiring
them to (d) cease or refrain from enga-
ging in certain acts, omissions or courses of
conduct with respect to their participation in
the designated clearing and settlement sys-
tem, and (e) perform such acts with respect
to their participation as the Governor con-
siders necessary to remedy the situation.
European
Central Bank
Statutes of the ESCB and ECB (1992)
The basic tasks to be carried out through
the ESCB shall be:
to promote the smooth operation of pay-
ment systems.
Statutes of the ESCB and ECB (1992)
In order to undertake the tasks of the
ESCB, the ECB, assisted by the national
central banks, shall collect the necessary
statistical information either from the
competent national authorities or directly
from economic agents.
The ECB and national central banks may
provide facilities, and the ECB may make
regulations, to ensure efficient and sound
clearing and payment systems within the
Community and with third countries.
Bank of France Monetary and Financial Code
the Bank of France shall ensure the
smooth operation and the security of
payment systems within the framework of
the task of the ESCB relating to the
promotion of the smooth operation of pay-
ment systems
Bank of France
(cont)
15 November 2001 Act
The Bank of France shall ensure the
security of means of payment, other than
banknotes and coins , and the relevance
of the standards applicable thereto. If it
deems that such means of payment are
insufficiently secure, it may invite the issuer
to take steps to remedy the situation.
[A] Payment Card Security Observatory is
created . In particular, the Observatory
shall monitor security measures taken by
issuers and merchants, draw up statistics on
fraud and carry out a technology watch on
payment cards with the aim of proposing
ways of combating technology-based
breaches of payment card security. Each
year the Observatory shall draw up a report
for the Minister in charge of the Economy,
Finance and Industry, which shall also be
transmitted to Parliament.
11 December 2001 Act
as part of the duties of the [ESCB] and
without prejudice to the powers of the
Financial Markets Council and the Commis-
sion Bancaire, the Bank of France shall
ensure the security of securities clearing,
payment and delivery systems.
15 November 2001 Act
If it deems that any such payment instru-
ment is insufficiently secure, it may recom-
mend that the issuer take all necessary
measures to remedy such insufficiency. If its
recommendations are to no avail, it may,
after having solicited the observations of the
issuer, hand down a negative opinion pub-
lished in the Official Journal. For the per-
formance of its duties, the Bank of France
shall conduct expert analyses and shall ask
the issuer or any interested party for all
relevant information concerning payment
instruments and the terminals or technical
facilities associated therewith.
Deutsche
Bundesbank
Bundesbank Act (2002)
shall arrange for the execution of
domestic and cross-border payments and
shall contribute to the stability of payment
and clearing systems.
Hong Kong
Monetary
Authority
Clearing and Settlement Systems Ordinance
(2004)
(1) to monitor compliance with the obli-
gations imposed under this Ordinance in
relation to designated systems, and to pro-
mote the general safety and efficiency of
designated systems.
(2) Without limiting the generality of sub-
section (1), it shall be the function of the
Monetary Authority (a) to take reasonable
steps to satisfy himself that every desig-
nated system is operated in a safe and effi-
cient manner; (b) to promote and encourage
proper standards of operation and sound
and prudent practices amongst designated
systems; (c) whenever appropriate, to co-
operate with and assist recognized financial
services supervisory authorities of Hong
Kong or of any place outside Hong Kong in
maintaining and promoting safety and
efficiency in the operations of designated
systems; and (d) to consider and propose
reforms of the law relating to clearing and
settlement systems and the operations of
designated systems.
Clearing and Settlement Systems Ordinance
(2004)
request information relating to the
system.
give directions to a system operator or
settlement institution of a designated system
to take such action or do such act or
thing as the Monetary Authority considers
necessary for bringing the designated sys-
tem into compliance with the requirements
set out in [this ordinance].
direct that the operating rules of the
system be amended to bring [them] into
compliance with [this ordinance].
to make regulations for the better
safety and efficiency of operation and finan-
cial soundness of designated systems ...
Bank of Italy For payment systems:
Banking Law (1993)
shall promote the regular operation of
payment systems.
For payment systems:
Banking Law (1993)
for this purpose it may issue regulations
to ensure the efficiency and reliability of
clearing and payment systems.
The Bank of Italy has issued detailed provi-
sions under this power. See Provisions on
oversight of payment systems (2004).
According to this legal framework, the Bank
of Italy may issue general and specific rules
implementing that:
x operators of payment systems and infra-
structure services, as well as persons
who issue and/or manage payment
instruments, must for the purpose of
ensuring the efficiency and reliability of
the system take account of the entire
cycle of money transfer;
x operating rules of payments systems,
particularly those regarding access
criteria and pricing, must be clear and
transparent;
x adequate risk-control and risk-limitation
mechanisms must be adopted by opera-
tors of payment systems and infra-
structure services; the latter must
guarantee a level of operational
continuity to ensure the smooth
functioning of the system concerned;
x persons who issue and/or manage pay-
ment instruments must adopt, with refe-
rence to the entire money transfer cycle,
operating procedures that are capable of
effecting the secure transfer or with-
drawal of money and according to cer-
tain and prompt execution times;
x persons intending to perform activities
falling within the scope of these provi-
sions must transmit information and data
on such activities in advance to the Bank
of Italy.
The Bank of Italy can publish information or
assessments that it believes are significant.
The Bank has enforcement powers in its
capacity as bank supervisor, included on-
site inspections, for monitoring issues that
are also of interest for the oversight function
(eg to verify possible violations of EU Regu-
lation 2560/2001). Administrative sanctions
are envisaged for violations of the provisions
of Law 39/2002 on e-money. According to
the civil code, it is a criminal offence to
behave in a way to hamper the exercise of
the oversight.
Bank of Italy
(cont)
For securities settlement and guarantee sys-
tems:
Consolidated Law on Financial Inter-
mediation (1998)
The oversight of the securities settlement
and guarantee systems and the related
management companies shall be carried out
by the Bank of Italy and Consob.
The authorities pursue the objectives of
stability of the systems, transparent and
orderly provision of services and the protec-
tion of investors.
In cases of necessity and as a matter of
urgency, the Bank of Italy shall adopt appro-
priate measures to ensure the timely closure
of settlement, including its acting in the
place of the administrators and managers of
the systems referred to above.
For securities settlement and guarantee
systems:
Consolidated Law on Financial Inter-
mediation (1998)
The Bank of Italy, in agreement with
Consob, shall regulate the operation of the
securities settlement and guarantee ser-
vice.
Such regulations lay down the general
framework and the conditions under which
SSS and CCP activities can be managed:
ie minimum level of capital, consistency of
the operating rules - to be approved by the
authorities - with the aim of soundness and
efficiency of the systems, prudent member-
ship requirements, adoption of appropriate
risk management features.
The Bank of Italy and Consob may carry
out inspections and require the securities
settlement and guarantee companies and
market participants to provide any infor-
mation deemed necessary for the exercise
of the oversight functions.
According to the Bank of Italy and Consob
regulation issued in 2002, the collection of
information is related to the functioning of
the system (such as data on clearing and
settlement activities, any technical problem
on the proper and orderly functioning of the
system) and to the SSS/CCP management
company (such as company by-laws, finan-
cial reporting, internal auditors communi-
cations, board of directors report on organi-
sational, IT structure and risk management).
Moreover, information is collected on the
participants in the overseen systems.
Any person performing administrative or
managerial functions, in the securities settle-
ment and guarantee companies, is liable to
a pecuniary administrative sanction for non-
compliance with the articles of the Consoli-
dated Law on Financial Intermediation and
the related implementing provisions. The
sanctions shall be imposed by the Ministry
of Economy, acting on a proposal from the
Bank of Italy or Consob, within the scope of
their respective authority.
Bank of Japan Bank of Japan law (1997)
to ensure smooth settlement of funds
among banks and other financial institu-
tions, thereby contributing to the main-
tenance of an orderly financial system .

Central Bank of
Luxembourg
Transposition of EU directive on settlement
finality into Luxembourg law (2001)
[] This supervision, which covers the
operational and financial stability of each
system, [] has the objective of stability of
the financial system as a whole. In this res-
pect, the [Commission] watches over the
application of functioning rules and the
implementation of settlement procedures
and risk management procedures that are
encompassed within the systems it super-
vises.
However, although this article of the
legislation refers to the Commission [de
surveillance du secteur financier], under
another article systems in which the Central
Bank of Luxembourg (BCL) participates are
under the sole competence of the BCL.
Netherlands
Bank
From Bank Act (1995):
shall have the task of promoting the
smooth operation of the payment system.
From Act of Securities Trade (1995)
shall ensure that the clearing and
settlement systems which are used by the
Dutch exchanges are sufficient to avoid
systemic risk.
From Act of Securities Trade (1995)
Provides for prior approval for clearing and
settlement systems used by Dutch exchan-
ges.
Monetary
Authority of
Singapore
MAS Act
The principle objects of the Authority shall
be: to foster a sound and progressive
financial services sector.
Payment Systems (Oversight) Bill (2004)*
The Authority shall be responsible for the
oversight of payment systems and stored
value facilities under this Act
Securities and Futures (Amendment) Act
(2005)
to promote the safety and efficiency of
clearing facilities that support systemically-
important markets or form an integral part of
the financial infrastructure, and to reduce
systemic risk.
[* This bill is expected to come into force
around mid-2005.]
Payment Systems (Oversight) Bill (2004)*
and Securities and Futures (Amendment)
Act (2005)
Information-gathering powers: over all pay-
ment systems, stored value facilities and
clearing facilities in Singapore.
Designation powers: powers to regulate
payment systems and persons operating a
clearing facility that could affect financial
stability or public confidence in payment and
securities settlement systems in general or
the financial system of Singapore.
Other powers: power to impose access
regimes, impose restrictions and conditions,
establish standards, make regulations,
approve and remove chief executive officers
and directors, approve the control of sub-
stantial shareholding in an operator, issue
directions, inspect operations, and assume
control of the operations of a designated
payment system (DPS) or a designated
clearing house (DCH) under emergency
situations, mandates the arrangement for
external audits of a DPS/DCH and imposes
the obligation on a DPS/DCH to notify MAS
of significant changes in its operations.
Sveriges
Riksbank
The Sveriges Riksbank Act (1988, as from
2004)
The Riksbank shall also promote a safe
and efficient payment mechanism.
The Sveriges Riksbank Act (1988, as from
2004)
Upon the request of the Riksbank, a credit
institution or other company supervised by
the Financial Supervisory Authority shall
provide the Riksbank with such information
as the Riksbank considers necessary to
oversee the stability of the payment sys-
tem.
Regulations concerning the reporting obli-
gation may be issued by the Riksbank.
The Riksbank may issue orders or prohi-
bitions that are necessary to ensure that
regulations issued are observed. In deci-
sions regarding orders or prohibitions, the
Riksbank may set a penalty.
Any person failing to fulfil an obligation
to provide information or present documents
or who provides incorrect information
shall be sentenced to a fine.
Swiss National
Bank
National Bank Act (2004)
(A) The National Bank shall pursue a
monetary policy serving the interest of the
country as a whole. .
Within this framework, it shall have the
following tasks:
It shall contribute to the stability of the finan-
cial system.
In order to protect the stability of the finan-
cial system, the National Bank shall oversee
systems for the clearing and settlement of
payments and of transactions with financial
instruments, in particular securities (pay-
ment systems; securities settlement sys-
tems).
[In summary, oversight is conducted in order
to contribute to the stability of the financial
system. In so doing, the ultimate goal is to
ensure an effective conduct of monetary
policy.]
(B) It shall facilitate and secure the opera-
tion of cashless payment systems.
Besides financial and monetary stability,
other public policy objectives such as safe
and efficient payment systems are also
referred to in the NBA and provide the basis
for the SNBs role as catalyst and mediator
in the market for payment services.
National Bank Act (2004)
The NBA formally empowers the SNB to set
requirements for payment and securities
settlement systems which could potentially
destabilise the financial system. In an Imple-
menting Ordinance on the NBA (2004) the
SNB has established minimum requirements
and oversight procedures.
Bank of England Memorandum of understanding between
HM Treasury (the finance ministry), the
Bank of England and the Financial Services
Authority (the banking supervisor and secu-
rities regulator) (1997)
The Bank will be responsible for the overall
stability of the financial system as a whole
which will involve: . (ii) financial system
infrastructure, in particular payments sys-
tems at home and abroad. As the bankers
bank, the Bank will stand at the heart of the
system. It will fall to the Bank to advise the
Chancellor, and answer for its advice, on
any major problem inherent in the payments
systems. The Bank will also be closely
involved in developing and improving the
infrastructure, and strengthening the system
to help reduce systemic risk.
Federal Reserve The Federal Reserve Act establishes the

basis for the Federal Reserves respon-
sibilities regarding the safety and efficiency
of payments and securities settlement sys-
tems. These responsibilities are summa-
rised in the Federal Reserve Policy on Pay-
ments System Risk, as amended effective
January 2005:
the Boards objectives are to foster the
safety and efficiency of payments and secu-
rities settlement systems. These policy
objectives are consistent with (1) the
Boards long-standing objectives to promote
the integrity, efficiency, and accessibility of
the payments mechanism; (2) industry and
supervisory methods for risk management;
and (3) internationally accepted risk-
management standards and practices for
systemically important payments and secu-
rities settlement systems.
The Federal Reserves authority to promote
its oversight objectives is derived from the
legal authority it may exercise over the
various types of financial institutions that
operate or participate in payment and
securities settlement systems. Accordingly,
the nature and extent of its authority varies
from system to system depending on (a) the
charter type of a particular payment or secu-
rities settlement system operator or service
provider, (b) the types of institutions that
use a particular system or service, and
(c) the types of services the system
operator, service provider, and/or its users
obtain from the Federal Reserve. These
powers may include one or more of the
authorities to charter, to examine, to regu-
late, to enforce (eg through cease and
desist orders, suspension, removal, mem-
bership revocation, monetary penalties etc),
to compel disclosure of information, to pro-
vide access to payment services, and/or to
provide access to intra-day credit. The Fed-
eral Reserve also promotes its objectives by
working cooperatively with other domestic
and foreign financial authorities (eg bank
supervisors, securities regulators, other
central banks) that have their own formal
powers vis-a-vis a particular system opera-
tor, service provider, and/or its users.
Annex 2:
Designating systems for oversight
This annex provides extracts from documents that set out the formal criteria that central banks use to
determine whether a particular system is designated as being within the scope of oversight.
Bank of Canada
To determine if an eligible system may be designated under the Act, the Bank will gather
information that will permit a judgement to be made as to whether it may be operated in such a
manner as to pose systemic risk. In making this judgement, clearing and settlement systems which
display any of the following characteristics will receive close attention when considering whether to
designate a system under the Act: (a) individual transactions on any given day in excess of $200,000
and an aggregate value of all transactions on any given day in excess of $500 million, determined on
a gross basis; or (b) the size of the payment obligations owed to and by the participants is significant
relative to the participants capital. This would include systems in which participants are owed funds in
excess of 25 per cent of capital or in which they can owe funds to a clearing and settlement system in
excess of their capital; or (c) the system plays a central role in supporting transactions in the financial
markets or the economy.
Guideline Related to Bank of Canada Oversight Activities under the Payment Clearing and Settlement
Act, November 2002
Hong Kong Monetary Authority
The Monetary Authority may designate [a] clearing and settlement system if, in the opinion of
the Monetary Authority, the system is or is likely to become a clearing and settlement system whose
proper functioning is material to the monetary or financial stability of Hong Kong or to the functioning of
Hong Kong as an international financial centre. .
a clearing and settlement system shall be regarded as a clearing and settlement system whose
proper functioning is material to the monetary or financial stability of Hong Kong, or to the functioning
of Hong Kong as an international financial centre, if the occurrence of any significant disruption to, or
the presence of any significant inefficiency in, the functioning of the system is likely to result in the
monetary or financial stability of Hong Kong, or the functioning of Hong Kong as an international
financial centre, being adversely affected;
the Monetary Authority may, for the purpose of determining whether a clearing and settlement
system is or is likely to become a clearing and settlement system whose proper functioning is material
to the monetary or financial stability of Hong Kong, or to the functioning of Hong Kong as an
international financial centre, have regard to any one or more of the following factors as they then
apply or appear likely to apply: (a) the estimated aggregate value of transfer orders cleared or settled
through the system in a normal business day; (b) the estimated average value of transfer orders
cleared or settled by the system in a normal business day; (c) the estimated number of transfer orders
cleared or settled by the system in a normal business day; (d) the estimated number of participants of
the system; and (e) whether such system is linked to any designated system or any clearing and
settlement system that is or is operated by a company recognized as a clearing house for the
purposes of the Securities and Futures Ordinance.
Clearing and Settlement Systems Ordinance, 2004
Bank of Italy
[The Bank of Italy carries out an evaluation of the importance of individual payment systems, based on
their size and operational characteristics, the type of participants involved and the form of the
reference market in order to define the applicative scope of the provisions. Among payment
infrastructures, some shall be considered significant infrastructure services given the volume and
characteristics of the data handled or the role played in the system (routing of data) and shall be
subject to more stringent rules than those established for other infrastructure services. Moreover the
Bank may issue general and specific rules implementing what is provided for in these provisions taking
into account inter alia the degree of importance of the systems as evaluated .
The Bank pursues such purposes within the guidelines established by the Eurosystem and the
positions emerging in the fora of international cooperation.]
Provision on oversight payment systems issued by Bank of Italy, 2004
[The Italian legal framework provides that the national SSS and those CCPs that are subject to Italian
jurisdiction must be regulated and supervised by the Bank of Italy and Consob.]
Consolidated Law on Financial Intermediation, 1998
Monetary Authority of Singapore
Designation of payment systems and securities settlement systems (clearing facilities): The Authority
may designate a payment system and/or a person operating a clearing facility as a designated
payment system and designated clearing house respectively, if it is satisfied that:
(a) a disruption in the operations of the payment system or clearing facility could trigger, cause
or transmit further disruption to participants or systemic disruption to the financial system or
capital markets of Singapore;
(b) a disruption in the operations of the payment system or clearing facility could affect public
confidence in payment systems, the financial system or capital markets of Singapore; or
(c) it is otherwise in the interests of the public to do so.
Payment Systems (Oversight) Bill, 2004 (expected to come into force in mid-2005)
Swiss National Bank
The National Bank shall determine whether a system is important for the stability of the Swiss
financial system under the terms [set out below].
A payment or securities settlement system is important for the stability of the Swiss financial system if:
(a) operational or technical problems of the system might lead to serious credit or liquidity problems
for financial intermediaries; or
(b) payment or delivery problems of individual participants might be transferred to other participants
via the system, which then might trigger serious credit or liquidity problems for financial intermediaries.
In determining whether a system is important for the stability of the Swiss financial system, the
National Bank shall, in particular, take the following factors into account:
(a) the types of transactions that are cleared or settled through the system, in particular whether
foreign exchange, money market or capital market transactions are involved or transactions that serve
to implement monetary policy;
(b) the value and the number of transactions that are cleared or settled through the system, both as
an average and on peak days;
(c) the group of participants in the system;
(d) the currencies in which transactions are cleared or settled through the system;
(e) the type and number of links existing between this system and other payment or securities
settlement systems;
(f) the possibility of participants switching at short notice to the system of another operator in order
to settle transactions.
Implementing Ordinance on the National Bank Act, 2004
Annex 3:
Extracts from the CPSIPS, RSSS,
RCCP and IMF transparency code
1. CPSIPS
Responsibility A: The central bank should define clearly its payment system objectives and should
disclose publicly its role and major policies with respect to systemically important payment systems.
If a central banks payment system objectives are defined in a clear way, they provide a basis for
consistent policymaking and provide a benchmark by which the central bank and others can judge its
success in achieving them. The central banks objectives also need to be understood by payment
system participants and by any private sector operators of payment systems. The information should
also be available to users and other interested parties.
The central bank should also disclose publicly its payment system roles and the major policies it will
follow in order to achieve its objectives for systemically important payment systems. These are likely to
involve more detail than the high-level aims.
The disclosure of major policies should include identifying systems which are systemically important,
together with reasons for the judgment. Participants in such systems and any private sector operators
need to be made aware whether their system is judged to be systemically important and, if it is, that
the system will be expected to comply with the Core Principles. Other major policies which could
appropriately be disclosed include the policy the central bank will follow if it judges that some systems
do not comply with the Core Principles or policies relating to a particular programme of payment
system reform or development.
It is important that the central banks major policies be set out in writing and be equally available to all
interested parties. It is unlikely to be sufficient to communicate them only through informal discussions
with participants and operators or through bilateral correspondence. Active consultative procedures
can also be a useful tool to support disclosure.
2. RSSS
Recommendation 18: Securities settlement systems should be subject to transparent and effective
regulation and oversight.
The objectives and responsibilities as well as roles and major policies of the securities regulator
and the central bank should be clearly defined and publicly disclosed, so that designers, owners,
operators and participants of securities settlement systems are able to operate in a predictable
environment and to act in a manner that is consistent with those policies.
3. RCCP
Recommendation 15: A CCP should be subject to transparent and effective regulation and oversight.
The objectives, responsibilities, roles and major policies of securities regulators and central banks
should be clearly defined and publicly disclosed, so that designers, owners, operators and participants
of a CCP are able to operate in a predictable environment and to act in a manner that is consistent
with those policies.
4. IMF transparency code
Supporting documents to the IMFs Code of good practices on transparency in monetary and financial
policies (July 2000).
Principle 5.3: The role of oversight agencies with regard to payment systems should be publicly
disclosed.
The role of oversight agencies refers to the activities that a financial agency performs and the
responsibilities that it holds in overseeing payment systems as a whole. The Committee on Payment
and Settlement Systems draft Core Principles for Systemically Important Payment Systems explicitly
addresses the role of central banks with regard to the oversight of systemically important payment
systems.
A stable and efficient payment system is a key element of any well-functioning financial system. Public
disclosure of the oversight role of a central bank or of the role of any other agency with an interest in
the safety and efficiency of payment systems enables designers and operators of private sector
payment systems, along with participants and users of all systems and other interested parties, to
have a clear understanding of the role, responsibilities, and objectives of the oversight agency.
Disclosure also helps the public to understand the adequacy of oversight and form a more accurate
assessment of the systemic risks facing the payment system. Where the central bank provides major
parts of the payment system as well as performs oversight of the payment system, such disclosure
may bring to light any conflict of interest issues.
Annex 4:
Lamfalussy principles
Extract from the 1990 Report of the Committee on Interbank Netting Schemes of the central banks of
the Group of Ten countries (http://www.bis.org/publ/cpss04.pdf)
Part D: Principles for cooperative central bank oversight of cross-border and multi-currency
netting and settlement schemes
The following principles for the oversight of cross-border and multi-currency netting and settlement
systems specify procedures which the Committee recommends for use by G-10 central banks in
cooperating with one another and with other authorities. They are neither a statement nor an allocation
of central banks roles as lenders of last resort and in no way prejudice the statutory responsibilities of
central banks and bank supervisory authorities. Rather, they are intended to provide a mechanism for
mutual assistance among central banks in carrying out their individual responsibilities in pursuit of their
shared objectives for the efficiency and stability of interbank payment and settlement arrangements.
These principles may also be of use to other central banks and supervisory authorities when
considering cross-border and multi-currency settlement structures.
1.1 Each central bank that has identified the actual or proposed operation of a cross-border
or multi-currency netting or settlement system, outside of the country of issue of the relevant
currency or currencies, should inform other central banks that may have an interest in the
prudent design and management of the system. These will normally include the central bank or
central banks of issue of the currencies accepted in the system, the host-country central bank in
whose domestic market the system is located or operating, and the home-country central bank or
central banks of the charter or incorporation of both the participants and the netting provider. These
central banks should, in turn, seek to inform supervisory authorities that have responsibilities for the
participants, the netting provider, or the settlement agent or agents. In carrying out this responsibility,
central banks may find it useful to impose a duty or responsibility on financial institutions to report their
provision of, or participation in, any netting service or system.
1.2 Central banks are most concerned with the operation of large-scale or wholesale systems which
are, or have the potential to become, significant mechanisms for interbank settlements. But central
banks should inform one another of all netting arrangements. What may appear to be a small
operation in relation to the market of the host country, for example, could be large in relation to the
interbank market in the country of issue and vice versa. Relatively small operations can also grow over
time and become more significant. Thus, there should be a presumption in favour of informing other
central banks and supervisory authorities about the existence of a netting system without regard, in
the first instance, to its apparent importance.
2.1 Cross-border and multi-currency netting and settlement systems should be subject to
oversight by a central bank which accepts primary responsibility for such oversight and there
should be a presumption that the host-country central bank will have this primary
responsibility. However, in consultation with other relevant central banks and supervisory authorities
it could be agreed that another authority would undertake the primary responsibility.
2.2 Although several national authorities may have interests in the operation of any one cross-
border or multi-currency netting system, the host central bank will usually have the broadest interest in
the systemic implications of the systems operation and in the risks experienced by the participants
within its domestic market. The central bank or central banks of issue will have an interest in the
prudence of the settlement procedures and the implications for its domestic money market of any
failure to complete settlement. The home central banks and supervisory authorities of the netting
provider and of the participants will be concerned for their liquidity and solvency. The host central
bank, however, is likely to be the home central bank of many of the systems participants and of the
netting provider and will, of course, be the host of any resident non-domestic participants. Thus, the
host central bank will normally be in the best position to oversee the activities of the netting provider
and to ensure that appropriate risk controls are in place. Where a single system is simultaneously
provided directly to institutions located in different financial centres, consultations between the different
host central banks may be needed to determine which among them should have primary
responsibility to oversee the systems activities.
2.3 There may be occasions where the host central bank does not wish to assume primary
responsibility and where another authority would be better placed to do so. For example, where a
netting system is provided by a branch of a bank chartered in another country, the home supervisory
authority or home central bank may be better able to oversee the netting providers activities and, thus,
to oversee the system as a whole. This may be particularly true where the home central bank is also
the central bank of issue of the relevant currency. But there should be a presumption that the host
central bank will be responsible in the absence of agreement to the contrary among the relevant
authorities.
3.1 In its oversight of a system. the authority with primary responsibility should review the
design and operation of the system as a whole and consult with other relevant authorities on
its conclusions both in the first instance and, from time to time, with respect to developments
in the systems status. The statement of minimum standards for the design and operation of cross-
border and multi-currency systems should provide a starting point for this review. Thus, consideration
should be given to the operational and financial soundness of the message carrier, the netting
provider, and the settlement agent or agents and to the legal soundness of the netting process.
Special attention should be applied to the systems risk-management procedures to ensure that the
provider and the participants have a clear understanding of the credit and liquidity risks they bear and
that they have both the incentives and the capabilities to manage and contain these risks.
3.2 The extent of consultations among the authorities may depend upon the size and importance of
the system. With respect to the largest systems central banks may wish to communicate on a regular
basis. However, in reaching its initial conclusions and in its continuing oversight of any system, the
authority with primary responsibility should recognise the interests and concerns of other relevant
central banks and supervisory authorities through a process of consultation. At the same time, central
banks and supervisory authorities responsible for the participants or the currencies in a system should
keep the authority with primary responsibility informed of relevant developments. Such continuing
communication and co-ordination should provide a means of anticipating and containing the systemic
risks which could be transmitted in the event of the failure of a participant, or of a system, or of other
disturbances.
4.1 The determination of the adequacy of a systems settlement and failure-to-settle
procedures should be the joint responsibility of the central bank of issue and the authority with
primary responsibility for the system. A review of the soundness of the design and operation of any
netting or settlement system will necessarily entail consideration of the adequacy of both its routine
settlement procedures as well as those to be invoked in the event of a participants inability to satisfy
its settlement obligations. These procedures will need to be considered in relation not only to the
systems overall risk-management arrangements but also in relation to the domestic money market in
which settlement ultimately occurs. Because of its knowledge of its domestic money market, and its
concern for this markets stability, the views of the central bank of issue will be particularly important in
the assessment of a netting systems settlement arrangements. Thus, the authority with primary
responsibility will need to consult with the central bank or central banks of issue in order to reach a
joint determination of the adequacy of the systems settlement and failure-to-settle procedures.
5.1 In the absence of confidence in the soundness of the design or management of any
cross-border or multi-currency netting or settlement system. a central bank should discourage
use of the system by institutions subject to its authority and if necessary, identify the use of, or
the provision of services to. such a system as constituting an unsafe and unsound banking
practice. In the course of their consultations, central banks should endeavour to ensure the prudent
operation of cross-border and multi-currency systems on terms acceptable to all relevant central banks
and supervisory authorities. However, if this is not possible in some cases, it is clear that each national
authority must maintain its discretion to discourage the use of a system if, in its judgement, the system
is not prudently designed or managed.
Annex 5:
Bibliography
This annex gives references to selected documents concerning oversight. Website links are given to
either the document itself or a nearby webpage (the links were current at the time of publication but
may subsequently change).
Committee on Payment and Settlement Systems
Report of the Committee on Interbank
Netting Schemes of the central banks of
the Group of Ten countries
Nov 1990 http://www.bis.org/publ/cpss04.pdf
Core principles for systemically
important payment systems
Jan 2001 http://www.bis.org/publ/cpss43.pdf
Recommendations for securities
settlement systems
Assessment methodology for
Recommendations for securities
settlement systems
A glossary of terms used in payments
and settlement systems
Mar 2003 http://www.bis.org/publ/cpss00b.pdf
Policy issues for central banks in retail
payments
Mar 2003 http://www.bis.org/publ/cpss52.pdf
The role of central bank money in
payment systems
Aug 2003 http://www.bis.org/publ/cpss55.pdf
Recommendations for central
counterparties
National Bank of Belgium
Oversight responsibilities of central
banks according to the core principles
for systemically important payment
systems
2002 http://www.nbb.be/sg/En/Missions/pd
f/FSR_overs.pdf
Bank of Canada
Guideline Related to Bank of Canada
Oversight Activities under the Payment
Clearing and Settlement Act
Nov 2002 http://www.bankofcanada.ca/en/guid
e2002.htm - two
Website introduction to oversight Sep 2003 http://www.bankofcanada.ca/en/pay
ments/oversight.html
European Central Bank
Role of the Eurosystem in the field of
payment system oversight
Jun 2000 http://www.ecb.int/pub/pdf/other/pays
ysoveren.pdf
Oversight standards for euro retail
payment systems
Jun 2003 http://www.ecb.int/pub/pdf/other/retai
lpsoversightstandardsen.pdf
Bank of France
Overseeing instruments and systems Jan 2001 http://www.banque-
france.fr/gb/publications/telechar/b
ulletin/85etud1.pdf
Deutsche Bundesbank
Payment system oversight - a contribution
to the stability of the financial system and
the efficiency of payment operations
Jan 2004 http://www.bundesbank.de/downlo
ad/volkswirtschaft/monatsberichte/
2004/200401mb_e.pdf
Hong Kong Monetary Authority
The Clearing and Settlement Systems
Ordinance
Nov 2004 http://www.info.gov.hk/hkma/eng/o
versight/index.htm
Guideline on the Oversight Framework for
Designated Systems under the Clearing
and Settlement Systems Ordinance
versight/index.htm
Memorandum of Understanding between
the SFC and HKMA
versight/index.htm
Bank of Italy
White paper on payment system oversight Nov 1999 http://www.bancaditalia.it/pubblicaz
ioni/altrepub/wp/wp_pso.pdf
Provisions on oversight of payment
systems
Feb 2004 http://www.bancaditalia.it/sistema_
pagamenti/sorveglianza/Norm/BI/1
46/Regulation146.inglese.pdf
Bank of Italy Annual Report: chapters on
Payment Systems Oversight and Services
and on Market Supervision
Various years http://www.bancaditalia.it/pubblicaz
ioni/ricec/relann/rel03/rel03en/rel0
3_abr_anrep.pdf (for 2003)
Innovation in electronic payments 2004 http://www.bancaditalia.it/sistema_
pagamenti/sorveglianza/altrepub/In
novation.pdf
Website introduction to oversight of
payment systems
http://www.bancaditalia.it/sistema_
pagamenti
Website introduction to market supervision http://www.bancaditalia.it/pol_mon
_merc/sup_merc
Bank of Japan
Role of the Bank of Japan in payment and
settlement systems
Nov 2002 http://www.boj.or.jp/en/set/03/set_f
.htm
Central Bank of Luxembourg
The oversight of the central bank of
payment and securities settlement
systems in Luxembourg (French only)
Feb 2001 http://www.bcl.lu/fr/publications/circ
ulaires/2001/2001-163/index.html
Policy and procedures of the oversight of
payment and securities settlement
systems in Luxembourg (A summary
paper is available in English)
Dec 2001 http://www.bcl.lu/fr/publications/circ
Central Bank of Luxembourg (cont)
Protection of the payment and securities
settlement systems against crime and
terrorism (French only)
Jun 2002 http://www.bcl.lu/fr/publications/circ
The analysis of risk and risk mitigation
techniques in payment and securities
settlement systems and the impact on
central banks oversight
Feb 2003 http://www.bcl.lu/fr/publications/ca
hiers_etudes/7/working_paper_7.p
df
Netherlands Bank
Oversight on payments and securities
systems
Nov 2002 http://www.dnb.nl/dnb/bin/doc/Ove
rsightENG_tcm13-50667.pdf
Monetary Authority of Singapore
Payment Systems Oversight Act:
consultation document
Apr 2003 http://www.mas.gov.sg/resource/d
ownload/MASConsultationPaperon
PaymentSystemsOversightAct.pdf
Payment Systems Oversight Act: response
to feedback received on consultation
document
Sep 2003 http://www.mas.gov.sg/masmcm/bi
n/pt1Response2Feedback_on_Pa
yment_Systems_Oversight_Act.ht
m
Monograph on MAS Roles and
Responsibilities in Relation to Securities
Clearing and Settlement Systems in
Singapore
Aug 2004 http://www.mas.gov.sg/masmcm/u
pload/mm/MM_6A8653EE_6295_
5312_49E8C08D02E7C9E3__6A8
653FE_6295_5312_4DA0841CB7
9A9CF2/SCSS%20Monograph_Au
g%2004.pdf
Draft Payment Systems (Oversight) Bill Dec 2004 http://www.mas.gov.sg/masmcm/u
pload/mm/MM_FECA8E67_6295_
5312_46D633B560AEF424__FEC
A8E76_6295_5312_469312B596D
AB466/Draft%20Payment%20Syst
ems%20(Oversight)%20Bill.pdf
Draft Payment Systems (Oversight) Bill:
consultation document
Dec 2004 http://www.mas.gov.sg/masmcm/u
pload/mm/MM_FECD1D20_6295_
5312_4E08C3EAD82FEA59__FE
CD1D30_6295_5312_4025606893
9CBE3D/Consultation%20Paper%
20on%20Draft%20Payment%20Sy
stems%20(Oversight)%20Bill.pdf
Sveriges Riksbank
Riksbanks oversight of financial
infrastructure
May 2001 http://www.riksbank.com/upload/D
okument_riksbank/Kat_publicerat/
Rapporter/economic_review_2001
_3.pdf
Swiss National Bank
The role of the SNB in the electronic
payment system
Mar 2003 http://www.snb.ch/d/download/publ
ikationen/q0301/QH1_RolleSNB_e
.pdf
National Bank Act and Implementing
Ordinance on the National Bank Act
May 2004 http://www.snb.ch/e/snb/index.html
?file=recht/content_recht.html
Financial Stability Report Jun 2004 http://www.snb.ch/e/publikationen/
publi.html
Bank of England
Oversight of payment systems Nov 2000 http://www.bankofengland.co.uk/
fsr/ops.pdf
Strengthening financial infrastructure
(oversight annex)
Jun 2003 http://www.bankofengland.co.uk/
fsr/fsr14art2.pdf
Payment systems oversight report 2004 Jan 2005 http://www.bankofengland.co.uk/
financialstability/paymentsystem
s/oversight/psor2004.pdf
Federal Reserve
Federal Reserve Policy on Payments
System Risk
Jan 2005 http://www.federalreserve.gov/P
aymentSystems/PSR/policy.pdf
World Bank/CEMLA
The Oversight of the Payments Systems: A
Framework for the Development and
Governance of Payment Systems in
Emerging Economies
Jul 2001 http://www.ipho-
whpi.org/pdf/2001/Oversight.pdf
Annex 6:
Members of the CPSS
This report was produced by the Committee on Payment and Settlement Systems, whose members
are listed below.
Chairman
(European Central Bank) Tommaso Padoa-Schioppa
National Bank of Belgium Johan Pissens
Simone Maskens
Bank of Canada Clyde Goodlet
Sean OConnor
European Central Bank Jean-Michel Godeffroy
Ignacio Terol
Bank of France Yvon Lucas
Denis Beau
Deutsche Bundesbank Hans-Jrgen Friederich
Wolfgang Michalik
Hong Kong Monetary Authority Norman Tak Lam Chan (until June 2004)
James H Lau Jr (until June 2004)
Peter Pang (from July 2004)
Eddie Yue (from July 2004)
Esmond K Y Lee
Bank of Italy Carlo Tresoldi
Stefano Carcascio
Bank of Japan Tadashi Nunami
Shuhei Aoki (until October 2003)
Tatsuya Yonetani (from October 2003)
Masayuki Mizuno
Netherlands Bank Jaap Koning (until February 2004)
Henny van der Wielen (from February 2004)
Hans Brits
The Monetary Authority of Singapore Enoch Chng
Terry Goh
Sveriges Riksbank Martin Andersson
Jan Schllerqvist
Swiss National Bank Daniel Heller
Andy Sturm
Bank of England John Trundle (until November 2003)
Andrew Haldane (from November 2003)
Edwin Latter
Board of Governors of the Federal Reserve
System
Louise Roseman
Jeffrey Marquardt
Jeff Stehm
Federal Reserve Bank of New York Lawrence M Sweet
Lawrence J Radecki
Secretariat
(Bank for International Settlements) Marc Hollanders
Annex 7:
Members of the working group
In producing this report, the Committee on Payment and Settlement Systems was greatly assisted by
the working group it set up, whose members are listed below.
Chairman
(Sveriges Riksbank) Martin Andersson
National Bank of Belgium Benot Bourtembourg
Bank of Canada Clyde Goodlet
European Central Bank Koenraad De Geest (until August 2004)
Ignacio Terol (from August 2004)
Elke Wunstorf
Bank of France Denis Beau
Dorothee Delort
Deutsche Bundesbank Matthias Gbel
Birgit Zeitschel
Hong Kong Monetary Authority Grace Lau (from July 2004)
Esmond Lee (until July 2004)
Bank of Italy Corrado Baldinelli
Gerardo Coppola
Bank of Japan Masayuki Mizuno
Megumi Takei
Central Bank of Luxembourg Norbert Goffinet
Netherlands Bank Ron Berndsen
Monetary Authority of Singapore Terry Goh Peng Hwee
Sveriges Riksbank Johanna Lybeck (until November 2004)
Bjorn Segendorff
Swiss National Bank Thomas Nellen
Bank of England Edwin Latter (from January 2004)
Hilary Mott (until January 2004)
Federal Reserve Bank of New York Lawrence M Sweet
Board of Governors of the Federal Reserve
System
David Mills
Jeff Stehm
Secretariat
(Bank for International Settlements) Robert Lindley
Significant contributions were also made by Pierangela Soda and Nives Coppari (Bank of Italy).
RE RE RE RE: :: : FW FW FW FW: :: : NYFed President Dudley speech NYFed President Dudley speech NYFed President Dudley speech NYFed President Dudley speech
Tomaselli Tomaselli Tomaselli Tomaselli , ,, , Daisy Daisy Daisy Daisy to: Tara.W.Foscato 11/10/2009 09:29 AM
Taia
Thanks foi setting this up Coulu you let me know who will be in attenuance at this meeting what
theii job titles aie anu pioviue me with a cell contact numbei of something attenuing the meeting
Thank you
Daisy A Tomaslli
BC Scheuulei Staff Assistant
0ffice of Congiessman Bill Fostei IL
)URP Tara.W.Foscato@frb.gov |mailto:Tara.W.Foscato@frb.gov|
6HQW Tuesday, November 10, 2009 S:21 AN
7R Tomaselli, Daisy
6XEMHFW Re: FW: NYFed President Dudley speech
Let's plan on 9:30 on the 17th. Thanks.
Tara
From: "Tomaselli, Daisy" [Daisy.Tomaselli@mail.house.gov]
Sent: 11/09/2009 05:07 PM EST
To: Tara Foscato
Subject: RE: FW: NYFed President Dudley speech
Taia
The Naikup is at am on Tuesuay the
th
anu seeing how Congiessman Fostei was hoping to
have this biiefing on stiess tests piioi to the maikup the only othei time asiue fiom Nonuay the
th
will be AN on Tuesuay the
th
Woulu that woik

Thanks
Daisy A Tomaslli
6HQW Nonday, November 09, 2009 +:+0 PN
7R Tomaselli, Daisy
I don't think this will work with our folks. Could you give me alternate dates/ times? Thanks.
From: "Tomaselli, Daisy" [Daisy.Tomaselli@mail.house.gov]
Sent: 11/09/2009 04:18 PM EST
To: Tara Foscato
Subject: RE: FW: NYFed President Dudley speech
Actually if possible the
th
at pm woulu woik ieally well aftei the phone call Coulu that happen
Thanks
Daisy A Tomaslli
6HQW Nonday, November 09, 2009 3:1/ PN
7R Tomaselli, Daisy
&F Sussman, Sandy
6XEMHFW RE: FW: NYFed President Dudley speech
Ok. I'll get this scheduled. What dates work for you next week?
"Tomaselli, Daisy" <Daisy.Tomaselli@mail.house.gov>
11/09/2009 01:11 PM
To
<Tara.W.Foscato@frb.gov>
cc
"Sussman, Sandy" <Sandy.Sussman@mail.house.gov>
SubjectRE: FW: NYFed President Dudley speech
Taia
Rep Fostei is inteiesteu in offeiing an amenument to the systemic iisk bill on iequiiing
peiiouic stiess tests similai to the tests Tieasuiy uiu eailiei this spiing Rep Fostei woulu
like to meet with people who actually conuucteu anu auministeieu the stiess tests to glean
iueas on how best to ciaft oui amenument
Thanks
Daisy A Tomaslli
6HQW Nonday, November 09, 2009 12:0S PN
7R Tomaselli, Daisy
&F Sussman, Sandy
6XEMHFW RE: FW: NYFed President Dudley speech

Let's book 5:30 on the 16th. Thanks.
I'm happy to work to set up the stress test briefing although I don't have any details on what you would
like. Sandy?
11/09/2009 11:41 AM
To
cc
<Laricke.D.Blanchard@frb.gov>
SubjectRE: FW: NYFed President Dudley speech

Taia
It looks as though this neeus to happen befoie the Financial Seivices maikup on Tuesuay Nov Theiefoie
the best time foi Congiessman Fostei woulu be on Nonuay Nov at eithei oi pm Be is in Califoinia
this week anu then back in the uistiict until Nonuay
Bo eithei of those times woik foi you
Also will you be setting up the biiefing on stiess tests with Congiessman Fostei
Thanks
Daisy A Tomaslli
6HQW Nonday, November 09, 2009 10:S8 AN
7R Tomaselli, Daisy
&F Sussman, Sandy
Thanks. Does your boss, by chance, have any time today or tomorrow?
11/09/2009 10:57 AM

To
cc
"Sussman, Sandy" <Sandy.Sussman@mail.house.gov>
SubjectFW: NYFed President Dudley speech

Daisy A Tomaslli
)URP Tomaselli, Daisy
6HQW Nonday, November 09, 2009 10:11 AN
7R 'Nichael.Nelson@ny.frb.org'
&F 'Laricke.D.Blanchard@frb.gov'
6XEMHFW RE: NYFed President Dudley speech
Bi Nichael
Ny apologies foi not getting in touch soonei we weie unbelievably busy with healthcaie last week
Although weie out of session this week lets shoot foi something the week of the
th
The
th
at am
will woik well foi Rep Fostei Please let me know if anothei time woulu be moie convenient foi you
Best
Daisy A Tomaslli
)URP Sussman, Sandy
6HQW Friday, November 06, 2009 S:23 PN
7R 'Nichael.Nelson@ny.frb.org'
&F Tomaselli, Daisy; Laricke.D.Blanchard@frb.gov
1 M u P S
Sandy Sussman
Legislative Director
Office of Rep. Bill Foster
1339 Longworth House Office Building
Washington, DC 20515
)URP Nichael.Nelson@ny.frb.org |mailto:Nichael.Nelson@ny.frb.org|
6HQW Friday, November 06, 2009 +:+8 PN
7R Sussman, Sandy
&F Tomaselli, Daisy; Laricke.D.Blanchard@frb.gov
Hi Sandy --
I just talked to Bill, and he would be very happy to talk to the Congressman.
Ms. Tomaselli -- would you like to tell us good times for Mr. Dudley to call Rep. Foster, or would you prefer
us to give you some good times for us?
Thanks all,
Michael Nelson
"Sussman, Sandy"
<Sandy.Sussman@mail.house.gov>
11/06/2009 04:04 PM
To
<Michael.Nelson@ny.frb.org>
cc<Laricke.D.Blanchard@frb.gov>, "Tomaselli, Daisy"
<Daisy.Tomaselli@mail.house.gov>
Subje
ct
RE: NYFed President Dudley speech
Michael:
My name is Mr. Sandy Sussman and I am the LD for Rep. Bill Foster (D-ILL) who
(b) (6)
sits on the Financial Services Committee.
In a meeting the boss had the other day, someone referenced the attached
speech by Governor Dudley.
I have cc'd the Congressman's scheduler, Daisy Tomaselli. Please contact her
directly to schedule a call or a meeting.
Txs, Sandy
Sandy Sussman
From: Laricke.D.Blanchard@frb.gov [mailto:Laricke.D.Blanchard@frb.gov]
Sent: Friday, November 06, 2009 3:03 PM
To: Sussman, Sandy
Cc: Michael.Nelson@ny.frb.org
Subject: NYFed President Dudley speech
Sandy,
With respect to President Dudley you should touch base with Michael Nelson at
the NYFed. I've cc'd Michael on the email.
Laricke

"Sussman, Sandy"
<Sandy.Sussman@ma
il.house.gov> To
<Laricke.D.Blanchard@frb.gov>
11/06/2009 11:48 cc
AM "Tomaselli, Daisy"
<Daisy.Tomaselli@mail.house.gov>
Subject
FW: Meeting with Rep. Foster on
Stress Tests

Laricke:
section 552(d)
(b) (6)

Again, please feel free to e-mail our scheduler, Daisy, to schedule these
meetings and calls.
Txs, Sandy
<<William Dudley Board of Governor Speech.doc>>
Sandy Sussman
(See attached file: William Dudley Board of Governor Speech.doc)
1
l

section 552(d)
(b) (6)
"M Miller, Andrew"
< <Andrew Andrew Andrew Andrew. .M MMiller Miller @ @ ail ail mail mail . .house house. .
gov gov> >
11/10/2009 03:13 PM
To undisclosed-recipients:;
cc
Subject FW: Reported Bill of H.R. 3126
)URP Naurano, Rick
6HQW Tuesday, November 10, 2009 2:S1 PN
7R FSC - DEN LA's; FSC - REP LA's
6XEMHFW FW: Reported Bill of H.R. 3126
H.L.C.
111TH CONGRESS
1ST SESSION
H. R. 3126
[Report No. 111]
To establish the Consumer Financial Protection Agency, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 8, 2009
Mr. FRANK of Massachusetts (for himself, Ms. WATERS, Mrs. MALONEY, Mr.
GUTIERREZ, Mr. WATT, Mr. ACKERMAN, Mr. SHERMAN, Mr. CAPUANO,
Mr. MILLER of North Carolina, Mr. AL GREEN of Texas, Mr. ELLISON,
Ms. SPEIER, and Mr. GRAYSON) introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committee on Energy and Commerce, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
NOVEMBER --, 2009
Reported from the Committee on Committee on Financial Services with an
amendment
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on July 8, 2009]

November 6, 2009 (5:09 p.m.)
F:\R11\1ST\RH\H3126FS_RH.XML
f:\VHLC\110609\110609.512.xml
2
H.L.C.
A BILL
To establish the Consumer Financial Protection Agency, and
for other purposes.

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3
H.L.C.
Be it enacted by the Senate and House of Representa- 1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the Consumer Financial 4
Protection Agency Act of 2009. 5
SEC. 2. TABLE OF CONTENTS. 6
The table of contents for this Act is as follows: 7
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE ICONSUMER FINANCIAL PROTECTION AGENCY
Sec. 101. Definitions.
Subtitle AEstablishment of the Agency
Sec. 111. Establishment of the Consumer Financial Protection Agency.
Sec. 112. Director.
Sec. 113. Consumer Financial Protection Oversight Board.
Sec. 114. Executive and administrative powers.
Sec. 115. Administration.
Sec. 116. Consumer Advisory Board.
Sec. 117. Coordination.
Sec. 118. Reports to the Congress.
Sec. 119. Funding; fees and assessments; penalties and fines.
Sec. 120. Amendments relating to other administrative provisions.
Sec. 120A. Effective date.
Subtitle BGeneral Powers of the Director and Agency
Sec. 121. Mandate and objectives.
Sec. 122. Authorities.
Sec. 123. Examination and enforcement for small banks, thrifts, and credit
unions.
Sec. 124. Simultaneous and coordinated supervisory action.
Sec. 125. Limitations on authority of agency and director.
Sec. 126. Collection of information; confidentiality regulations.
Sec. 127. Monitoring; assessments of significant regulations; reports.
Sec. 128. Authority to restrict mandatory predispute arbitration.
Sec. 129. Registration and supervision of nondepository covered persons.
Sec. 130. Effective date.
Subtitle CSpecific Authorities
Sec. 131. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 132. Disclosures.
Sec. 133. Sales practices.
Sec. 134. Pilot disclosures.

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4
H.L.C.
Sec. 135. Adopting operational standards to deter unfair, deceptive, or abusive
practices.
Sec. 136. Duties.
Sec. 137. Consumer rights to access information.
Sec. 138. Prohibited acts.
Sec. 139. Treatment of remittance transfers.
Sec. 140A. No authority to require the offering of financial products or services.
Sec. 140B. Appraisal independence requirements.
Subtitle DPreservation of State Law
Sec. 141. Relation to State law.
Sec. 142. Preservation of enforcement powers of States.
Sec. 143. Preservation of existing contracts.
Sec. 144. State law preemption standards for national banks and subsidiaries
clarified.
Sec. 145. Visitorial standards.
Sec. 146. Clarification of law applicable to nondepository institution subsidiaries.
Sec. 147. State law preemption standards for Federal savings associations and
subsidiaries clarified.
Subtitle EEnforcement Powers
Sec. 152. Investigations and administrative discovery.
Sec. 153. Hearings and adjudication proceedings.
Sec. 154. Litigation authority.
Sec. 155. Relief available.
Sec. 156. Referrals for criminal proceedings.
Sec. 157. Employee protection.
Subtitle FTransfer of Functions and Personnel; Transitional Provisions
Sec. 161. Transfer of certain functions.
Sec. 162. Designated transfer date.
Sec. 163. Savings provisions.
Sec. 164. Transfer of certain personnel.
Sec. 165. Incidental transfers.
Sec. 166. Interim authority of the Secretary.
Subtitle GRegulatory Improvements
Sec. 171. Collection of deposit account data.
Sec. 172. Small business data collection.
Sec. 173. Annual financial autopsy.
Subtitle HConforming Amendments
Sec. 181. Amendments to the Inspector General Act of 1978.
Sec. 182. Amendments to the Privacy Act of 1974.
Sec. 183. Amendments to the Alternative Mortgage Transaction Parity Act of
1982.

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f:\VHLC\110609\110609.512.xml
5
H.L.C.
Sec. 184. Amendments to the Consumer Credit Protection Act.
Sec. 185. Amendments to the Expedited Funds Availability Act.
Sec. 186. Amendments to the Federal Deposit Insurance Act.
Sec. 187. Amendments to the Gramm-Leach-Bliley Act.
Sec. 188. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 189. Amendments to division D of the Omnibus Appropriations Act, 2009.
Sec. 190. Amendments to the Homeowners Protection Act of 1998.
Sec. 191. Amendments to the Real Estate Settlement Procedures Act of 1974.
Sec. 192. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 193. Amendments to the Secure and Fair Enforcement for Mortgage Licens-
ing Act of 2008.
Sec. 194. Amendments to the Truth in Savings Act.
Sec. 195. Amendments to the Telemarketing and Consumer Fraud and Abuse Pre-
vention Act.
Sec. 196. Membership in Financial Literacy and Education Commission.
TITLE IIIMPROVEMENTS TO THE FEDERAL TRADE COMMISSION
ACT
Sec. 201. Amendments to the Federal Trade Commission Act.
TITLE ICONSUMER FINANCIAL 1
PROTECTION AGENCY 2
SEC. 101. DEFINITIONS. 3
For the purposes of subtitles A through F of this title, 4
the following definitions shall apply: 5
(1) AFFILIATE.The term affiliate means any 6
person that controls, is controlled by, or is under com- 7
mon control with another person. 8
(2) AGENCY.The term Agency means the 9
Consumer Financial Protection Agency. 10
(3) BANK HOLDING COMPANY.The term bank 11
holding company has the same meaning as in sec- 12
tion 2(a) of the Bank Holding Company Act of 1956. 13
(4) BOARD.Except when used in connection 14
with the term Board of Governors, the term 15

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f:\VHLC\110609\110609.512.xml
6
H.L.C.
Board means the Consumer Financial Protection 1
Oversight Board. 2
(5) BOARD OF GOVERNORS.The term Board of 3
Governors means the Board of Governors of the Fed- 4
eral Reserve System. 5
(6) BUSINESS OF INSURANCE.The term busi- 6
ness of insurance means the writing of insurance or 7
the reinsuring of risks by an insurer, including all 8
acts necessary to such writing or reinsuring and the 9
activities relating to the writing of insurance or the 10
reinsuring of risks conducted by persons who act as, 11
or are, officers, directors, agents, or employees of in- 12
surers or who are other persons authorized to act on 13
behalf of such persons. 14
(7) CONSUMER.The term consumer means 15
an individual or an agent, trustee, or representative 16
acting on behalf of an individual. 17
(8) CONSUMER FINANCIAL PRODUCT OR SERV- 18
ICE.The term consumer financial product or serv- 19
ice means any financial product, other than a Fed- 20
eral tax return, or service to be used by a consumer 21
primarily for personal, family, or household purposes. 22
(9) COVERED PERSON. 23
(A) IN GENERAL.The term covered per- 24
son means any person who engages directly or 25

November 6, 2009 (5:09 p.m.)
f:\VHLC\110609\110609.512.xml
7
H.L.C.
indirectly in a financial activity, in connection 1
with the provision of a consumer financial prod- 2
uct or service. 3
(B) EXCLUSION.The term covered per- 4
son shall not include the Secretary, the Depart- 5
ment of the Treasury, any agency or bureau 6
under the jurisdiction of the Secretary, or any 7
person collecting Federal taxes for the United 8
States to the extent such person is acting in such 9
capacity. 10
(10) CREDIT.The term credit means the 11
right granted by a person to a consumer to defer pay- 12
ment of a debt, incur debt and defer its payment, or 13
purchase property or services and defer payment for 14
such purchase. 15
(11) CREDIT UNION.The term credit union 16
means a Federal credit union or a State credit union 17
as defined in section 101 of the Federal Credit Union 18
Act. 19
(12) DEPOSIT.The term deposit 20
(A) has the same meaning as in section 3(l) 21
of the Federal Deposit Insurance Act; and 22
(B) includes a share in a member account 23
(as defined in section 101(5) of the Federal Cred- 24
it Union Act) at a credit union. 25

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8
H.L.C.
(13) DEPOSIT-TAKING ACTIVITY.The term de- 1
posit-taking activity means 2
(A) the acceptance of deposits, the mainte- 3
nance of deposit accounts, or the provision of 4
services related to the acceptance of deposits; 5
(B) the acceptance of money, the provision 6
of other services related to the acceptance of 7
money, or the maintenance of members share ac- 8
counts by a credit union; or 9
(C) the receipt of money or its equivalent, 10
as the Director may determine by regulation or 11
order, received or held by the covered person (or 12
an agent for the person) for the purpose of facili- 13
tating a payment or transferring funds or value 14
of funds by a consumer to a third party. 15
(14) DESIGNATED TRANSFER DATE.The term 16
designated transfer date has the meaning provided 17
in section 162. 18
(15) DIRECTOR.The term Director means 19
the Director of the Agency. 20
(16) ENUMERATED CONSUMER LAWS.The term 21
enumerated consumer laws means each of the fol- 22
lowing: 23
(A) The Alternative Mortgage Transaction 24
Parity Act (12 U.S.C. 3801 et seq.). 25

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9
H.L.C.
(B) The Electronic Funds Transfer Act (15 1
U.S.C. 1693 et seq.) 2
(C) The Equal Credit Opportunity Act (15 3
U.S.C. 1691 et seq.). 4
(D) The Fair Credit Reporting Act (15 5
U.S.C. 1681 et seq.), except with respect to sec- 6
tions 615(e) and 628 of such Act. 7
(E) The Fair Debt Collection Practices Act 8
(15 U.S.C. 1692 et seq.). 9
(F) Subsections (c), (d), (e), and (f) of sec- 10
tion 43 of the Federal Deposit Insurance Act (12 11
U.S.C. 1831t). 12
(G) Sections 502, 503, 504, 505, 506, 507, 13
508, and 509 of the Gramm-Leach-Bliley Act (15 14
U.S.C. 6802 et seq.). 15
(H) The Homeowners Protection Act of 16
1998. 17
(I) The Home Mortgage Disclosure Act (12 18
U.S.C. 2801 et seq.). 19
(J) The Real Estate Settlement Procedures 20
Act (12 U.S.C. 2601 et seq.). 21
(K) The Secure and Fair Enforcement for 22
Mortgage Licensing Act (12 U.S.C. 5101 et seq.). 23
(L) The Truth in Lending Act (15 U.S.C. 24
1601 et seq.). 25

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10
H.L.C.
(M) The Truth in Savings Act (12 U.S.C. 1
4301 et seq.). 2
(17) FEDERAL BANKING AGENCY.The term 3
Federal banking agency means the Board of Gov- 4
ernors, the Comptroller of the Currency, the Director 5
of the Office of Thrift Supervision, the Federal De- 6
posit Insurance Corporation, or the National Credit 7
Union Administration and the term Federal bank- 8
ing agencies means all of such agencies. 9
(18) FAIR LENDING.The term fair lending 10
means fair, equitable, and nondiscriminatory access 11
to credit for both individuals and communities. 12
(19) FINANCIAL ACTIVITY. 13
(A) IN GENERAL.The term financial ac- 14
tivity means any of the following activities: 15
(i) Deposit-taking activities. 16
(ii) Extending credit and servicing 17
loans, including 18
(I) acquiring, purchasing, selling, 19
brokering, or servicing loans or other 20
extensions of credit; 21
(II) engaging in any other activ- 22
ity usual in connection with extensions 23
of credit or servicing loans, including 24

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11
H.L.C.
performing appraisals of real estate 1
and personal property. 2
(iii) Check cashing and check-guaranty 3
services, including 4
(I) authorizing a subscribing mer- 5
chant to accept personal checks ten- 6
dered by the merchants customers in 7
payment for goods and services; and 8
(II) purchasing from a sub- 9
scribing merchant validly authorized 10
checks that are subsequently dishon- 11
ored. 12
(iv) Collecting, analyzing, maintain- 13
ing, and providing consumer report infor- 14
mation or other account information by 15
covered persons, including information re- 16
lating to the credit history of consumers 17
and providing the information to a credit 18
grantor who is considering a consumer ap- 19
plication for credit or who has extended 20
credit to the borrower. 21
(v) Collection of debt related to any 22
consumer financial product or service. 23
(vi) Providing real estate settlement 24
services. 25

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12
H.L.C.
(vii) Leasing personal or real property 1
or acting as agent, broker, or adviser in 2
leasing such property if 3
(I) the lease is on a non-operating 4
basis; 5
(II) the initial term of the lease is 6
at least 90 days; and 7
(III) in the case of leases involv- 8
ing real property, at the inception of 9
the initial lease, the transaction is in- 10
tended to result in ownership of the 11
leased property to be transferred to the 12
lessee, subject to standards prescribed 13
by the Director. 14
(viii) Acting as an investment adviser 15
to any person (excluding an investment ad- 16
viser that is a person regulated by the Com- 17
modity Futures Trading Commission, the 18
Securities and Exchange Commission, or 19
any securities commission (or any agency 20
or office performing like functions) of any 21
State). 22
(ix) Acting as financial adviser to any 23
person (excluding an investment adviser 24
that is a person regulated by the Com- 25

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13
H.L.C.
State), including 5
(I) providing financial and other 6
related advisory services; 7
(II) providing educational 8
courses, and instructional materials to 9
consumers on individual financial 10
management matters; 11
(III) providing credit counseling 12
or tax planning services to any person 13
(excluding the preparation of returns, 14
or claims for refund, of tax imposed by 15
the Internal Revenue Code or advice 16
with respect to positions taken therein, 17
or services regulated by the Secretary 18
of the Treasury under section 330 of 19
title 31, United States Code); or 20
(IV) providing services to assist a 21
consumer with debt management or 22
debt settlement, with modifying the 23
terms of any extension of credit, or 24
with avoiding foreclosure. 25

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14
H.L.C.
(x) For purposes of this title, the fol- 1
lowing shall not be considered acting as fi- 2
nancial adviser: 3
(I) Publishing any bona fide 4
newspaper, news magazine or business 5
or financial publication of general and 6
regular circulation, including pub- 7
lishing market data, news, or data 8
analytics or investment information or 9
recommendations that are not tailored 10
to the individual needs of a particular 11
consumer. 12
(II) Providing advice, analyses, or 13
reports that do not relate to any secu- 14
rities other than securities which are 15
direct obligations of or obligations 16
guaranteed as to principal or interest 17
by the United States, or securities 18
issued or guaranteed by corporations 19
in which the United States has a direct 20
or indirect interest which shall have 21
been designated by the Secretary of the 22
Treasury, pursuant to section 3(a)(12) 23
of the Securities Exchange Act of 1934, 24

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15
H.L.C.
as exempted securities for the purposes 1
of that Act. 2
(xi) Financial data processing by any 3
technological means, including providing 4
data processing, access to or use of data- 5
bases or facilities, or advice regarding proc- 6
essing or archiving, if the data to be proc- 7
essed, furnished, stored, or archived are fi- 8
nancial, banking, or economic, except that 9
it shall not be considered a financial activ- 10
ity if with respect to financial data proc- 11
essing the person 12
(I) unknowingly or incidentally 13
transmits, processes, or stores financial 14
data in a manner that such data is 15
undifferentiated from other types of 16
data that the person transmits, proc- 17
esses, or stores; 18
(II) does not provide to any con- 19
sumer a consumer financial product or 20
service in connection with or relating 21
to in any manner financial data proc- 22
essing; and 23
(III) does not provide a material 24
service to any covered person in con- 25

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16
H.L.C.
nection with the provision of a con- 1
sumer financial product or service. 2
(xii) Money transmitting. 3
(xiii) Sale, provision or issuance of 4
stored value, except that, in the case of a 5
sale, only if the seller influences the terms 6
or conditions of the stored value provided to 7
the consumer. 8
(xiv) Acting as a money services busi- 9
ness. 10
(xv) Acting as a custodian of money or 11
any financial instrument. 12
(xvi)(I) Any other activity that the Di- 13
rector defines, by regulation, as a financial 14
activity after finding that 15
(aa) the activity has, or there 16
is a substantial likelihood that the 17
activity will have, a material ad- 18
verse impact on the creditworthi- 19
ness or financial well being of 20
consumers; 21
(bb) the activity is incidental 22
or complementary to any other fi- 23
nancial activity regulated by the 24
Agency; or 25

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17
H.L.C.
(cc) the activity is entered 1
into or conducted as a subterfuge 2
or with a purpose to evade any 3
requirement under this title, the 4
enumerated consumer laws, and 5
the authorities transferred under 6
subtitles F and H. 7
(II) For purposes of subclause (I)(bb), 8
the following activities provided to a cov- 9
ered person shall not be incidental or com- 10
plementary: 11
(aa) Providing information prod- 12
ucts or services to a covered person for 13
identity authentication. 14
(bb) Providing information prod- 15
ucts or services for fraud or identify 16
theft detection, prevention, or inves- 17
tigation. 18
(cc) Providing document retrieval 19
or delivery services. 20
(dd) Providing public records in- 21
formation retrieval. 22
(ee) Providing information prod- 23
ucts or services for anti-money laun- 24
dering activities. 25

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18
H.L.C.
(B) BUSINESS OF INSURANCE EXCEPTION. 1
The term financial activity shall not include 2
the business of insurance. 3
(20) FINANCIAL PRODUCT OR SERVICE.The 4
term financial product or service means any prod- 5
uct or service that, directly or indirectly, results from 6
or is related to engaging in 1 or more financial ac- 7
tivities. 8
(21) FOREIGN EXCHANGE.The term foreign 9
exchange means the exchange, for compensation, of 10
currency of the United States or of a foreign govern- 11
ment for currency of another government. 12
(22) INSURED CREDIT UNION.The term in- 13
sured credit union has the same meaning as in sec- 14
tion 101 of the National Credit Union Act. 15
(23) INSURED DEPOSITORY INSTITUTION.The 16
term insured depository institution has the same 17
meaning as in section 3 of the Federal Deposit Insur- 18
ance Act. 19
(24) MONEY SERVICES BUSINESS.The term 20
money services business means a person that 21
(A) receives currency, monetary value, or 22
payment instruments for the purpose of exchang- 23
ing or transmitting the same by any means, in- 24
cluding transmission by wire, facsimile, elec- 25

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19
H.L.C.
tronic transfer, courier, the Internet, or through 1
bill payment services, or other businesses that fa- 2
cilitate third-party transfers within the United 3
States or to or from the United States; or 4
(B) issues payment instruments or stored 5
value. 6
(25) MONEY TRANSMITTING.The term money 7
transmitting means the receipt by a covered person 8
of currency, monetary value, or payment instruments 9
for the purpose of transmitting the same to any third- 10
party by any means, including transmission by wire, 11
facsimile, electronic transfer, courier, the Internet, or 12
through bill payment services. 13
(26) PAYMENT INSTRUMENT.The term pay- 14
ment instrument means a check, draft, warrant, 15
money order, travelers check, electronic instrument, 16
or other instrument, payment of money, or monetary 17
value (other than currency). 18
(27) PERSON.The term person means an in- 19
dividual, partnership, company, corporation, associa- 20
tion (incorporated or unincorporated), trust, estate, 21
cooperative organization, or other entity. 22
(28) PERSON REGULATED BY A STATE INSUR- 23
ANCE REGULATOR.The term person regulated by a 24

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20
H.L.C.
State insurance regulator means any person who 1
is 2
(A) engaged in the business of insurance, 3
and 4
(B) subject to regulation by any State in- 5
surance regulator, 6
but only to the extent that such person acts in such 7
capacity. 8
(29) PERSON REGULATED BY THE COMMODITY 9
FUTURES TRADING COMMISSION.The term person 10
regulated by the Commodity Futures Trading Com- 11
mission means any futures commission merchant, 12
commodity trading adviser, commodity pool operator, 13
introducing broker, boards of trade, derivatives clear- 14
ing organizations, or multilateral clearing organiza- 15
tions to the extent that such persons actions are sub- 16
ject to the jurisdiction of the Commodity Futures 17
Trading Commission under the Commodity Exchange 18
Act and any agent, employee, or contractor acting on 19
behalf of, registered with, or providing services to such 20
person but only to the extent the person, or the em- 21
ployee, agent, or contractor of such person, acts in a 22
registered capacity. 23
(30) PERSON REGULATED BY THE SECURITIES 24
AND EXCHANGE COMMISSION.The term person reg- 25

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21
H.L.C.
ulated by the Securities and Exchange Commission 1
means 2
(A) a broker or dealer that is required to be 3
registered under the Securities Exchange Act of 4
1934; 5
(B) an investment adviser that is registered 6
under the Investment Advisers Act of 1940; 7
(C) an investment company that is required 8
to be registered under the Investment Company 9
Act of 1940; 10
(D) a national securities exchange that is 11
required to be registered under the Securities Ex- 12
change Act of 1934; 13
(E) a transfer agent that is required to be 14
1934; 16
(F) a clearing corporation that is required 17
to be registered under the Securities Exchange 18
Act of 1934; 19
(G) any municipal securities dealer that is 20
registered with the Securities and Exchange 21
Commission; 22
(H) any self-regulatory organization that is 23
Commission; 25

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22
H.L.C.
(I) any national securities exchange or 1
other entity that is required to be registered 2
under the Securities Exchange Act of 1934; and 3
(J) the Municipal Securities Rulemaking 4
Board, 5
and any employee, agent, or contractor acting on be- 6
half of, registered with, or providing services to, any 7
such person, but only to the extent that the person, or 8
the employee agent, or contractor of such person, acts 9
in a registered capacity. 10
(31) PROVISION OF A CONSUMER FINANCIAL 11
PRODUCT OR SERVICE.The terms provision of a 12
consumer financial product or service and pro- 13
viding a consumer financial product or service mean 14
the advertisement, marketing, solicitation, sale, disclo- 15
sure, delivery, or account maintenance or servicing of 16
a consumer financial product or service. 17
(32) PERSON THAT PERFORMS INCOME TAX 18
PREPARATION ACTIVITIES FOR CONSUMERS.The 19
term person that performs income tax preparation 20
activities for consumers means 21
(A) any tax return preparer (as defined in 22
section 7701(a)(36) of the Internal Revenue Code 23
of 1986), regardless of whether compensated, but 24

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23
H.L.C.
only to the extent that the person acts in such 1
capacity; 2
(B) any person regulated by the Secretary 3
of the Treasury under section 330 of title 31, 4
United States Code, but only to the extent that 5
the person acts in such capacity; and 6
(C) any authorized IRS e-file Providers (as 7
defined for purposes of section 7216 of the Inter- 8
nal Revenue Code of 1986), but only to the extent 9
that the person acts in such capacity. 10
(33) RELATED PERSON. 11
(A) IN GENERAL.The term related per- 12
son, when used in connection with a covered 13
person that is not a bank holding company, 14
credit union, depository institution, means 15
(i) any director, officer, employee 16
charged with managerial responsibility, or 17
controlling stockholder of, or agent for, such 18
covered person; 19
(ii) any shareholder, consultant, joint 20
venture partner, and any other person as 21
determined by the Director (by regulation 22
or on a case-by-case basis) who materially 23
participates in the conduct of the affairs of 24
such covered person; and 25

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24
H.L.C.
(iii) any independent contractor (in- 1
cluding any attorney, appraiser, or ac- 2
countant), with respect to such covered per- 3
son, who knowingly or recklessly partici- 4
pates in any 5
(I) violation of any law or regula- 6
tion; or 7
(II) breach of fiduciary duty. 8
(B) TREATMENT OF A RELATED PERSON AS 9
A COVERED PERSON.Any person who is a re- 10
lated person under subparagraph (A) shall be 11
deemed to be a covered person for all purposes of 12
this title, any enumerated consumer law, and 13
any law for which authorities were transferred 14
by subtitles F and H. 15
(34) SECRETARY.The term Secretary means 16
the Secretary of the Treasury. 17
(35) SERVICE PROVIDER. 18
(A) IN GENERAL.The term service pro- 19
vider means any person who provides a mate- 20
rial service to a covered person in the provision 21
of a consumer financial product or service, in- 22
cluding a person who 23

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25
H.L.C.
(i) facilitates the design of, or oper- 1
ations relating to the provision of, the con- 2
sumer financial product or service; 3
(ii) has direct interaction with a con- 4
sumer (whether in person or via tele- 5
communication device or other similar tech- 6
nology) regarding the consumer financial 7
product or service; or 8
(iii) processes transactions relating to 9
the consumer financial product or service. 10
(B) EXCEPTIONS.The term service pro- 11
vider shall not apply to a person solely by vir- 12
tue of such person providing or selling to a cov- 13
ered person 14
(i) a support service of a type provided 15
to businesses generally or a similar ministe- 16
rial service; 17
(ii) a service that does not materially 18
affect the terms or conditions of the con- 19
sumer financial product or service, its per- 20
formance or operation, or the propensity of 21
a consumer to obtain or use such product or 22
service; or 23
(iii) time or space for an advertise- 24
ment for a consumer financial product or 25

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f:\VHLC\110609\110609.512.xml
26
H.L.C.
service through print, newspaper, or elec- 1
tronic media. 2
(36) STATE.The term State means any 3
State, territory, or possession of the United States, the 4
District of Columbia, Commonwealth of Puerto Rico, 5
Commonwealth of the Northern Mariana Islands, 6
Guam, American Samoa, or the United States Virgin 7
Islands. 8
(37) STORED VALUE.The term stored 9
value 10
(A) means funds or monetary value rep- 11
resented in any electronic format, whether or not 12
specially encrypted, and stored or capable of 13
storage on electronic media in such a way as to 14
be retrievable and transferred electronically; and 15
(B) includes a prepaid debit card or prod- 16
uct (other than a card or product used solely for 17
telephone services) or any other similar product, 18
regardless of whether the amount of the funds or mon- 19
etary value may be increased or reloaded. 20

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27
H.L.C.
Subtitle AEstablishment of the 1
Agency 2
SEC. 111. ESTABLISHMENT OF THE CONSUMER FINANCIAL 3
PROTECTION AGENCY. 4
(a) AGENCY ESTABLISHED.There is established the 5
Consumer Financial Protection Agency as an independent 6
agency to regulate the provision of consumer financial prod- 7
ucts or services under this title, the enumerated consumer 8
laws, and the authorities transferred under subtitles F and 9
H. 10
(b) PRINCIPAL OFFICE.The principal office of the 11
Agency shall be located in the city of Washington, District 12
of Columbia, at 1 or more sites. 13
SEC. 112. DIRECTOR. 14
(a) ESTABLISHMENT OF POSITION. 15
(1) IN GENERAL.There is hereby established the 16
position of the Director of the Agency who shall be the 17
head of the Agency. 18
(2) AUTHORITY TO PRESCRIBE REGULATIONS. 19
The Director may prescribe such regulations and 20
issue such orders in accordance with this Act as the 21
Director may determine to be necessary for carrying 22
out this Act and all other laws within the Directors 23
jurisdiction. 24
(b) APPOINTMENT; TERM. 25

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28
H.L.C.
(1) APPOINTMENT.The Director shall be ap- 1
pointed by the President, by and with the advice and 2
consent of the Senate, from among individuals who 3
are citizens of the United States. 4
(2) TERM.The Director shall be appointed for 5
a term of 5 years. 6
(3) REMOVAL.The Director may be removed be- 7
fore the end of a term only for cause. 8
(4) VACANCY. 9
(A) IN GENERAL.A vacancy in the posi- 10
tion of Director which occurs before the expira- 11
tion of the term for which a Director was ap- 12
pointed shall be filled in the manner established 13
in paragraph (1) and the Director appointed to 14
fill such vacancy shall be appointed only for the 15
(B) ACTING DIRECTOR. 17
(i) IN GENERAL.In the event of a va- 18
cancy in the position of Director or during 19
the absence or disability of the Director, an 20
Acting Director shall be appointed in the 21
manner provided in section 3345, of title 5, 22
United States Code. 23
(ii) AUTHORITY OF ACTING DIREC- 24
TOR.Any individual serving as Acting 25

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29
H.L.C.
Director under this subparagraph shall be 1
vested with all authority, duties, and privi- 2
leges of the Director. 3
(5) SERVICE AFTER END OF TERM.An indi- 4
vidual may serve as Director after the expiration of 5
the term for which appointed until a successor Direc- 6
tor has been appointed and qualified. 7
(c) PROHIBITION ON FINANCIAL INTERESTS.The Di- 8
rector shall not have a direct or indirect financial interest 9
in any covered person. 10
(d) COMPENSATION.The Director shall receive com- 11
pensation at the rate prescribed for Level I of the Executive 12
Schedule under section 5313 of title 5, United States Code. 13
SEC. 113. CONSUMER FINANCIAL PROTECTION OVERSIGHT 14
BOARD. 15
(a) ESTABLISHED.There is hereby established the 16
Consumer Financial Protection Oversight Board as an in- 17
strumentality of the United States. 18
(b) DUTIES AND POWERS. 19
(1) DUTY TO ADVISE DIRECTOR.The Board 20
shall advise the Director on 21
(A) the consistency of a proposed regulation 22
of the Director with prudential, market, or sys- 23
temic objectives administered by the agencies 24
that comprise the Board; 25

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30
H.L.C.
(B) the overall strategies and policies in 1
carrying out the duties of the Director under this 2
title; and 3
(C) actions the Director can take to enhance 4
and ensure that all consumers are subject to ro- 5
bust financial protection. 6
(2) LIMITATION ON POWERS.The Board may 7
not exercise any executive authority, and the Director 8
may not delegate to the Board any of the functions, 9
powers, or duties of the Director. 10
(c) COMPOSITION.The Board shall be comprised of 11
7 members as follows: 12
(1) The Chairman of the Board of Governors. 13
(2) The head of the agency responsible for char- 14
tering and regulating national banks. 15
(3) The Chairperson of the Federal Deposit In- 16
surance Corporation. 17
(4) The Chairman of the National Credit Union 18
Administration. 19
(5) The Chairman of the Federal Trade Commis- 20
sion. 21
(6) The Secretary of Housing and Urban Devel- 22
opment. 23

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31
H.L.C.
(7) The Chairman of the liaison committee of 1
representatives of State agencies to the Financial In- 2
stitutions Examination Council. 3
(d) REPRESENTATIVE OF ADDITIONAL INTERESTS. 4
(1) COMPOSITION.Notwithstanding subsection 5
(c), the President, by and with the advice and consent 6
of the Senate, shall appoint 5 additional members of 7
the Board from among experts in the fields of con- 8
sumer protection, fair lending and civil rights, rep- 9
resentatives of depository institutions that primarily 10
serve underserved communities, or representatives of 11
communities that have been significantly impacted by 12
higher-priced mortgage loans, as such communities 13
are identified by the Director through an analysis of 14
data received by reason of the provisions of the Home 15
Mortgage Disclosure Act of 1975 or other data on 16
lending patterns. 17
(2) AFFILIATION.With respect to members ap- 18
pointed pursuant to paragraph (1), not more than 3 19
shall be members of any one political party. 20
(e) MEETINGS. 21
(1) IN GENERAL.The Board shall meet upon 22
notice by the Director, but in no event shall the Board 23
meet less frequently than once every 3 months. 24

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32
H.L.C.
(2) SPECIAL MEETINGS.Any member of the 1
Board may, upon giving written notice to the Direc- 2
tor, require a special meeting of the Board. 3
(f) PROHIBITION ON ADDITIONAL COMPENSATION. 4
Members of the Board may not receive additional pay, al- 5
lowances, or benefits by reason of their service on the Board. 6
(g) COMPLAINTS RELATED TO REQUIRED OFFERING 7
OF SPECIFIC FINANCIAL PRODUCTS OR SERVICES.The 8
Board shall establish procedures to receive and analyze 9
complaints from any person claiming that the Director is 10
not in compliance with the requirements under section 11
140A. 12
SEC. 114. EXECUTIVE AND ADMINISTRATIVE POWERS. 13
The Director may exercise all executive and adminis- 14
trative functions of the Agency, including to 15
(1) establish regulations for conducting the Agen- 16
cys general business in a manner not inconsistent 17
with this title; 18
(2) bind the Agency and enter into contracts; 19
(3) direct the establishment of and maintain di- 20
visions or other offices within the Agency in order to 21
fulfill the responsibilities of this title, the enumerated 22
consumer laws, and the authorities transferred under 23
subtitles F and H, and to satisfy the requirements of 24
other applicable law; 25

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H.L.C.
(4) coordinate and oversee the operation of all 1
administrative, enforcement, and research activities of 2
the Agency; 3
(5) adopt and use a seal; 4
(6) determine the character of and the necessity 5
for the Agencys obligations and expenditures, and the 6
manner in which they shall be incurred, allowed, and 7
paid; 8
(7) delegate authority, at the Directors discre- 9
tion, to any officer or employee of the Agency to take 10
action under any provision of this title or under other 11
applicable law; 12
(8) to implement this title and the Agencys au- 13
thorities under the enumerated consumer laws and 14
under subtitles F and H through regulations, orders, 15
guidance, interpretations, statements of policy, exami- 16
nations, and enforcement actions; and 17
(9) perform such other functions as may be au- 18
thorized or required by law. 19
SEC. 115. ADMINISTRATION. 20
(a) OFFICERS.The Director shall appoint the fol- 21
lowing officials: 22
(1) A secretary, who shall be charged with main- 23
taining the records of the Agency and performing 24
such other activities as the Director directs. 25

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H.L.C.
(2) A general counsel, who shall be charged with 1
overseeing the legal affairs of the Agency and per- 2
forming such other activities as the Director directs. 3
(3) An inspector general, who shall have the au- 4
thority and functions of an inspector general of a des- 5
ignated Federal entity under the Inspector General 6
Act of 1978 (5 U.S.C. App. 3). 7
(4) An Ombudsperson, who shall 8
(A) develop and maintain expertise in and 9
understanding of the law relating to consumer fi- 10
nancial products; 11
(B) at the request of a Federal agency or a 12
State agency, and with the prior approval of the 13
Director, advise such agency with respect to ac- 14
tions that may affect consumers; 15
(C) advise consumers who may have a le- 16
gitimate potential or actual claim against a 17
Federal agency involving the provision of con- 18
sumer financial products regarding their rights 19
under this title; 20
(D) identify Federal agency actions that 21
have potential implications for consumers and, if 22
appropriate, and with the prior approval of the 23
Director, advise the relevant Federal agencies 24
with respect to those implications; 25

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H.L.C.
(E) provide information to private citizens, 1
civic groups, Federal agencies, State agencies, 2
and other interested parties regarding the rights 3
of those parties under this title; 4
(F) develop, maintain, and provide exper- 5
tise designed to assist covered persons, especially 6
smaller depository institutions and other smaller 7
entities to comply with regulations and other re- 8
quirements issued to implement the provisions of 9
this title, and where such assistance for smaller 10
depository institutions shall be provided jointly 11
by the Agency and the appropriate Federal bank- 12
ing agency; 13
(G) develop procedures to assist covered per- 14
sons, especially smaller depository institutions 15
and other smaller entities, in responding to or 16
challenging actions taken by the Director or the 17
Agency to implement the provisions of this title 18
and to ensure that safeguards exist to preserve 19
the confidentiality of covered persons using those 20
procedures; and 21
(H) perform such other duties as the Direc- 22
tor may delegate to the Ombudsperson. 23
(b) PERSONNEL. 24
(1) APPOINTMENT. 25

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H.L.C.
(A) IN GENERAL.The Director may fix the 1
number of, and appoint and direct, all employees 2
of the Agency. 3
(B) EXPEDITED HIRING.The Director 4
may appoint, without regard to the provisions of 5
sections 3309 through 3318, of title 5, United 6
States Code, candidates directly to positions for 7
which public notice has been given. 8
(C) HIRING VETERANS.In hiring employ- 9
ees of the Agency, the Director shall establish ap- 10
propriate targets, including timetables, to hire 11
veterans (as defined in paragraphs (1) and (2) 12
of section 2108 of title 5, United States Code) as 13
employees of the Agency. In establishing appro- 14
priate targets under this paragraph, the Director 15
may consider, among other relevant factors, the 16
proportion of veterans hired by Federal agencies 17
with comparable functions or types of occupa- 18
tions and their experiences in hiring veterans. 19
(2) COMPENSATION. 20
(A) PAY.The Director shall fix, adjust, 21
and administer the pay for all employees of the 22
Agency without regard to the provisions of chap- 23
ter 51 or subchapter III of chapter 53 of title 5, 24

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H.L.C.
(B) BENEFITS.The Director may provide 1
additional benefits to Agency employees if the 2
same type of benefits are then being provided by 3
the Board of Governors or, if not then being pro- 4
vided, could be provided by the Board of Gov- 5
ernors under applicable provisions of law or reg- 6
ulations. 7
(C) MINIMUM STANDARD.The Director 8
shall at all times provide compensation and ben- 9
efits to classes of employees that, at a minimum, 10
are equivalent to the compensation and benefits 11
provided by the Board of Governors for the cor- 12
responding class of employees in any fiscal year. 13
(c) SPECIFIC FUNCTIONAL UNITS. 14
(1) RESEARCH.The Agency shall establish a 15
unit whose functions shall include 16
(A) conducting research on consumer finan- 17
cial counseling and education, including 18
(i) on the topics of debt, credit, sav- 19
ings, financial product usage, and financial 20
planning; 21
(ii) exploring effective methods, tools, 22
and approaches; and 23
(iii) identifying ways to incorporate 24
new technology for the delivery and evalua- 25

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H.L.C.
tion of financial counseling and education 1
efforts; 2
(B) researching, analyzing, and reporting 3
on 4
(i) current and prospective develop- 5
ments in markets for consumer financial 6
products or services, including market areas 7
of alternative consumer financial products 8
or services with high growth rates; 9
(ii) consumer awareness, under- 10
standing, and use of disclosures and com- 11
munications regarding consumer financial 12
products or services; 13
(iii) consumer awareness and under- 14
standing of costs, risks, and benefits of con- 15
sumer financial products or services; 16
(iv) consumer behavior with respect to 17
consumer financial products or services, in- 18
cluding performance on mortgage loan; and 19
(v) experiences of traditionally under- 20
served consumers, including un-banked and 21
under-banked consumers, regarding con- 22
(C) identifying priorities for consumer fi- 24
nancial education efforts, based on consumer 25

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H.L.C.
complaints, research or analysis conducted pur- 1
suant to subparagraph (A), or other information; 2
and 3
(D) testing and identifying methods of edu- 4
cating consumers to determine which methods 5
are most effective. 6
(2) COMMUNITY AFFAIRS.The Director shall es- 7
tablish a unit whose functions shall include providing 8
information, guidance, and technical assistance re- 9
garding the provision of consumer financial products 10
or services to traditionally underserved consumers 11
and communities. 12
(3) CONSUMER COMPLAINTS. 13
(A) IN GENERAL.The Director shall estab- 14
lish a unit whose functions shall include estab- 15
lishing a central database, or utilizing an exist- 16
ing database, for collecting and tracking infor- 17
mation on consumer complaints about consumer 18
financial products or services and resolution of 19
complaints. 20
(B) COORDINATION.In performing the 21
functions described in subparagraph (A), the Di- 22
rector shall coordinate with the Federal banking 23
agencies, other Federal agencies, and other regu- 24
latory agencies or enforcement authorities. 25

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H.L.C.
(C) DATA SHARING REQUIRED.To the ex- 1
tent permitted by law and the regulations pre- 2
scribed by the Director regarding the confidential 3
treatment of information, the Director shall 4
share data relating to consumer complaints with 5
Federal banking agencies, other Federal agencies, 6
and State regulators. To the extent permitted by 7
law and the regulations prescribed by the Fed- 8
eral banking agencies and other Federal agencies 9
regarding the confidential treatment of informa- 10
tion, the Federal banking agencies and other 11
Federal agencies, respectively, shall share data 12
relating to consumer complaints with the Direc- 13
tor and the Agency. 14
(4) CONSUMER FINANCIAL EDUCATION. 15
(A) IN GENERAL.The Agency shall estab- 16
lish a unit to be named the Office of Financial 17
Literacy, whose functions shall include activities 18
designed to facilitate the education of consumers 19
on consumer financial products and services, in- 20
cluding through the dissemination of materials 21
to consumers on such topics. 22
(B) DIRECTOR.The Office of Financial 23
Literacy shall be headed by a director. 24
(C) DUTIES.Such unit shall 25

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41
H.L.C.
(i) develop goals for programs to be 1
provided by persons that provide consumer 2
financial education and counseling, includ- 3
ing programs through which such persons 4
(I) provide one-on-one financial 5
counseling; 6
(II) help individuals understand 7
basic banking and savings tools; 8
(III) help individuals understand 9
their credit history and credit score; 10
(IV) assist individuals in efforts 11
to plan for major purchases, reduce 12
their debt, and improve their financial 13
stability; and 14
(V) work with individuals to de- 15
sign plans for long-term savings; 16
(ii) develop recommendations regard- 17
ing effective certification of persons pro- 18
viding programs, or performing the activi- 19
ties, described in clause (i), including rec- 20
ommendations regarding 21
(I) certification processes and 22
standards for certification; 23
(II) appropriate certifying bodies; 24
and 25

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42
H.L.C.
(III) mechanisms for funding the 1
certification processes; 2
(iii) develop a technology tool to collect 3
data on financial education and counseling 4
outcomes; and 5
(iv) conduct research to identify effec- 6
tive methods, tools, technoloy, and strategies 7
to educate and counsel consumers about per- 8
sonal finance management, including on the 9
topics of debt, credit, savings, financial 10
product usage, and financial planning. 11
(D) COORDINATION.Such unit shall co- 12
ordinate with other units within the Agency in 13
carrying out its functions, including 14
(i) working with the unit established 15
under paragraph (2) to 16
(I) provide information and re- 17
sources to community organizations, 18
nonprofit organizations, and other en- 19
tities to assist in helping educate con- 20
sumers about consumer financial prod- 21
ucts and services; and 22
(II) develop a marketing strategy 23
to promote financial education and 24
one-on-one counseling; and 25

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H.L.C.
(ii) working with the unit established 1
under paragraph (1) to conduct research re- 2
lated to consumer financial education and 3
counseling. 4
(d) SINGLE TOLL-FREE TELEPHONE NUMBER FOR 5
CONSUMER COMPLAINTS AND INQUIRIES. 6
(1) CALL INTAKE SYSTEM.The Consumer Fi- 7
nancial Protection Agency shall establish a single, 8
toll-free telephone number for consumer complaints 9
and inquiries concerning institutions regulated by 10
such agencies and a system for collecting and moni- 11
toring complaints and, as soon as practicable, a sys- 12
tem for routing such calls to the Federal financial in- 13
stitution regulatory agency that primarily supervises 14
the financial institution, or that is otherwise the ap- 15
propriate Federal agency to address the subject of the 16
complaint or inquiry. 17
(2) ROUTING CALLS TO STATES.To the extent 18
practicable, State agencies may receive appropriate 19
call transfers from the system established under para- 20
graph (1) if 21
(A) the State agencys system has the func- 22
tional capacity to receive calls routed by the sys- 23
tem; and 24

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44
H.L.C.
(B) the State agency has satisfied any con- 1
ditions of participation in the system that the 2
Council, coordinating with State agencies 3
through the chairperson of the State Liaison 4
Committee, may establish. 5
(e) REPORT TO THE CONGRESS.Before the end of the 6
6-month period beginning on the date of the enactment of 7
this Act, the Federal financial institution regulatory agen- 8
cies shall submit a report to the Committee on Financial 9
Services of the House of Representatives and the Committee 10
on Banking, Housing, and Urban Affairs of the Senate de- 11
scribing the agencies efforts to establish 12
(1) a public interagency Web site for directing 13
and referring Internet consumer complaints and in- 14
quiries concerning any financial institution to the 15
Consumer Financial Protection Agency for purposes 16
of collecting, monitoring, and responding to such com- 17
plaints and, where appropriate, a system for referring 18
complaints to the Federal financial institution regu- 19
latory agency, other Federal agency, or State agency 20
that is otherwise the appropriate agency to address 21
the subject of the complaint or inquiry; and 22
(2) a system to expedite the prompt and effective 23
rerouting of any misdirected consumer complaint or 24
inquiry documents between or among the agencies, 25

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H.L.C.
with prompt referral of any complaint or inquiry to 1
the appropriate Federal financial institution regu- 2
latory agency, and to participating State agencies. 3
(f) OFFICE OF FAIR LENDING AND EQUAL OPPOR- 4
TUNITY. 5
(1) ESTABLISHMENT.Before the end of the 180- 6
day period beginning on the date of the enactment of 7
this Act, the Director shall establish within the Agen- 8
cy the Office of Fair Lending and Equal Oppor- 9
tunity. 10
(2) FUNCTIONS. The Office of Fair Lending 11
and Equal Opportunity shall have such powers and 12
duties as the Director may delegate the Office which 13
shall include the following functions: 14
(A) Providing oversight and enforcement of 15
Federal laws intended to ensure the fair, equi- 16
table, and nondiscriminatory access to credit for 17
both individuals and communities that are en- 18
forced by the Agency, including the Equal Credit 19
Opportunity Act and the Home Mortgage Disclo- 20
sure Act. 21
(B) Coordinating fair lending enforcement 22
efforts of the Agency with other Federal agencies 23
and State regulators, as appropriate, to promote 24

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46
H.L.C.
consistent, efficient and effective enforcement of 1
Federal fair lending laws. 2
(C) Working with private industry, fair 3
lending, civil rights, consumer and community 4
advocates on the promotion of fair lending com- 5
pliance and education. 6
(D) Providing annual reports to the Con- 7
gress on the Agencys efforts to fulfill its fair 8
lending mandate. 9
(3) ADMINISTRATION OF OFFICE.There is here- 10
by established the position of Assistant Director of the 11
Agency for Fair Lending and Equal Opportunity 12
who 13
(A) shall be appointed by the Director; 14
(B) shall carry out such duties as the Direc- 15
tor may delegate to such Assistant Director; and 16
(C) shall serve as the Director of the Office 17
of Fair Lending and Equal Opportunity. 18
(4) PROHIBITIONS ON PARTICIPATION IN PRO- 19
GRAMS WITH RESPECT TO CERTAIN INDICTED ORGANI- 20
ZATIONS. 21
(A) PROHIBITION.The Director of the Of- 22
fice of Fair Lending and Equal Opportunity 23
may not allow a covered organization to partici- 24

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47
H.L.C.
pate in any program established by such Direc- 1
tor. 2
(B) COVERED ORGANIZATION.In this 3
paragraph, the term covered organization 4
means any of the following: 5
(i) Any organization that has been in- 6
dicted for a violation under any Federal or 7
State law governing the financing of a cam- 8
paign for election for public office or any 9
law governing the administration of an 10
election for public office, including a law re- 11
lating to voter registration. 12
(ii) Any organization that had its 13
State corporate charter terminated due to 14
its failure to comply with Federal or State 15
lobbying disclosure requirements. 16
(iii) Any organization that has filed a 17
fraudulent form with any Federal or State 18
regulatory agency. 19
(iv) Any organization that 20
(I) employs any applicable indi- 21
vidual, in a permanent or temporary 22
capacity; 23
(II) has under contract or retains 24
any applicable individual; or 25

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48
H.L.C.
(III) has any applicable indi- 1
vidual acting on the organizations be- 2
half or with the express or apparent 3
authority of the organization. 4
(C) ADDITIONAL DEFINITIONS.In this 5
paragraph: 6
(i) The term organization includes 7
the Association of Community Organiza- 8
tions for Reform Now (in this paragraph 9
referred to as ACORN) and any ACORN- 10
related affiliate. 11
(ii) The term ACORN-related affil- 12
iate means any of the following: 13
(I) Any State chapter of ACORN 14
registered with the Secretary of States 15
office in that State. 16
(II) Any organization that shares 17
directors, employees, or independent 18
contractors with ACORN. 19
(III) Any organization that has a 20
financial stake in ACORN. 21
(IV) Any organization whose fi- 22
nances, whether federally funded, 23
donor-funded, or raised through orga- 24

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H.L.C.
nizational goods and services, are 1
shared or controlled by ACORN. 2
(iii) The term applicable individual 3
means an individual who has been indicted 4
for a violation under Federal or State law 5
relating to an election for Federal or State 6
office. 7
(D) REVISION OF FEDERAL ACQUISITION 8
REGULATION.The Federal Acquisition Regula- 9
tion shall be revised to carry out the provisions 10
of this paragraph relating to contracts. 11
(E) SEVERABILITY.If any provision of 12
this section or any application of such provision 13
to any person or circumstance is held to be un- 14
constitutional, the remainder of this section and 15
the application of the provision to any other per- 16
son or circumstance shall not be affected. 17
SEC. 116. CONSUMER ADVISORY BOARD. 18
(a) ESTABLISHMENT REQUIRED.The Director shall 19
establish a Consumer Advisory Board to advise and consult 20
with the Director in the exercise of the functions of the Di- 21
rector and the Agency under this title, the enumerated con- 22
sumer laws, and to provide information on emerging prac- 23
tices in the consumer financial products or services indus- 24
try. 25

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H.L.C.
(b) MEMBERSHIP. 1
(1) IN GENERAL.In appointing the members of 2
the Consumer Advisory Board, the Director shall 3
seek 4
(A) to assemble experts in financial services, 5
community development, fair lending and civil 6
rights, consumer protection, and consumer finan- 7
cial products or services; and 8
(B) to represent the interests of covered per- 9
sons and consumers. 10
(2) PROHIBITION ON MEMBERSHIP WITH RE- 11
SPECT TO CERTAIN INDICTED ORGANIZATIONS.The 12
director may not appoint an employee of a covered 13
organization (as defined in section 115(f)(4)(B)) to 14
the Consumer Advisory Board. 15
(c) POLITICAL AFFILIATION.Not more than 1 more 16
than half of the members of the Consumer Advisory Board 17
may be members of the same political party. 18
(d) MEETINGS.The Consumer Advisory Board shall 19
meet from time to time at the call of the Director, but, at 20
a minimum, shall meet at least twice in each year. 21
(e) COMPENSATION AND TRAVEL EXPENSES.Mem- 22
bers of the Consumer Advisory Board who are not full-time 23
employees of the United States shall 24

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51
H.L.C.
(1) be entitled to receive compensation at a rate 1
fixed by the Director while attending meetings of the 2
Consumer Advisory Board, including travel time; and 3
(2) be allowed travel expenses, including trans- 4
portation and subsistence, while away from their 5
homes or regular places of business. 6
SEC. 117. COORDINATION. 7
(a) COORDINATION WITH OTHER FEDERAL AGENCIES 8
AND STATE REGULATORS.The Director shall coordinate 9
with the Securities and Exchange Commission, the Com- 10
modity Futures Trading Commission, the Secretary of the 11
Treasury, and other Federal agencies and State regulators, 12
as appropriate, to promote consistent regulatory treatment 13
of, and enforcement related to, consumer and investment 14
products, services, and laws. 15
(b) COORDINATION OF CONSUMER EDUCATION INITIA- 16
TIVES. 17
(1) IN GENERAL.The Director shall coordinate 18
with each agency that is a member of the Financial 19
Literacy and Education Commission established by 20
the Financial Literacy and Education Improvement 21
Act (20 U.S.C. 9701 et seq.) to assist each agency in 22
enhancing its existing financial literacy and edu- 23
cation initiatives to better achieve the goals in para- 24

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52
H.L.C.
graph (2) and to ensure the consistency of such ini- 1
tiatives across Federal agencies. 2
(2) GOALS OF COORDINATION.In coordinating 3
with the agencies described in paragraph (1), the Di- 4
rector shall seek to improve efforts to educate con- 5
sumers about financial matters generally, the man- 6
agement of their own financial affairs, and their 7
judgments about the appropriateness of certain finan- 8
cial products. 9
(c) COORDINATION.The Agency may coordinate in- 10
vestigations, compliance examinations, information shar- 11
ing, and related activities in support of activities under- 12
taken pursuant to the Fair Housing Act by other Federal 13
agencies. 14
SEC. 118. REPORTS TO THE CONGRESS. 15
(a) REPORTS REQUIRED.The Director shall prepare 16
and submit to the President and the appropriate commit- 17
tees of the Congress a report at the beginning of each regular 18
session of the Congress, beginning with the session following 19
the designated transfer date. 20
(b) CONTENTS.The reports required by subsection (a) 21
shall include 22
(1) a list of the significant regulations and or- 23
ders adopted by the Director, as well as other signifi- 24
cant initiatives conducted by the Director, during the 25

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H.L.C.
preceding year and the Directors plan for regula- 1
tions, orders, or other initiatives to be undertaken 2
during the upcoming period; 3
(2) an analysis of complaints about consumer fi- 4
nancial products or services that the Agency has re- 5
ceived and collected in its central database on com- 6
plaints during the preceding year; 7
(3) a list, with a brief statement of the issues, of 8
the public supervisory and enforcement actions to 9
which the Agency is a party (including adjudication 10
proceedings conducted under subtitle E) during the 11
preceding year; 12
(4) the actions taken regarding regulations, or- 13
ders, and supervisory actions with respect to covered 14
persons which are not credit unions or depository in- 15
stitutions, including descriptions of the types of such 16
covered persons, financial activities, and consumer fi- 17
nancial products or services affected by such regula- 18
tions, orders, and supervisory actions; 19
(5) an appraisal of significant actions, including 20
actions under Federal or State law, by State attor- 21
neys general or State regulators relating to this title, 22
the authorities transferred under subtitles F and H, 23
and the enumerated consumer laws; 24

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H.L.C.
(6) an analysis of the Agencys efforts to fulfill 1
the fair lending mission of the Agency; and 2
(7) an appraisal of the regulatory and legal dif- 3
ficulties encountered by the Agency in carrying out 4
the mission and duties of the Agency with respect to 5
consumer protection, including a description of 6
(A) the difficulties and hardships encoun- 7
tered with respect to coordinating with other 8
Federal and State government entities; 9
(B) the regulatory and enforcement limita- 10
tions placed on the Agency by this Act; 11
(C) the practices of persons, covered and un- 12
covered under this Act, that allow such persons 13
to harm consumers and escape regulation or en- 14
forcement, including any trends identified; and 15
(D) legislative and administrative rec- 16
ommendations with respect to solving or alle- 17
viating identified difficulties. 18
(c) ANNUAL APPEARANCE BEFORE THE CONGRESS. 19
The Director shall appear before the House Committee on 20
Financial Services at an annual hearing, after the report 21
is submitted under subsection (a) 22
(1) to discuss the efforts, activities, objectives and 23
plans of the Agency; and 24

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55
H.L.C.
(2) discuss and answer questions concerning such 1
report. 2
SEC. 119. FUNDING; FEES AND ASSESSMENTS; PENALTIES 3
AND FINES. 4
(a) TRANSFER OF FUNDS FROM THE BOARD OF GOV- 5
ERNORS. 6
(1) TRANSFER REQUIRED.Each year, begin- 7
ning on the designated transfer date, the Board of 8
Governors shall transfer funds in an amount equaling 9
10 percent of the Federal Reserve Systems total sys- 10
tem expenses (as reported in the Budget Review of the 11
Board of Governors most recent Annual Report to 12
Congress) to the Director for the purposes of carrying 13
out the authorities granted in this title, under the 14
enumerated consumer laws, and transferred under 15
(2) PROCEDURES.The Board of Governors, in 17
consultation with the Agency, shall make appropriate 18
arrangements to transfer funds to the Director in ac- 19
cordance with this subsection. 20
(b) FEES AND ASSESSMENTS. 21
(1) ASSESSMENT REQUIRED. 22
(A) IN GENERAL.Taking into account 23
such other sums available to the Agency and sub- 24
ject to the provisions of this subsection and sub- 25

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56
H.L.C.
section (d), the Director shall assess fees on cov- 1
ered persons to meet the Agencys expenses for 2
carrying out the duties and responsibilities of the 3
Agency, including supervising such covered per- 4
sons. 5
(B) BASIS FOR ASSESSMENT.The Agency 6
shall assess fees on covered persons pursuant to 7
this subsection based on the size and complexity 8
of the covered person, and the compliance record 9
of the covered person under the enumerated con- 10
sumer laws, the laws and authorities transferred 11
under subtitles F and H, and this title. 12
(2) REGULATIONS. 13
(A) IN GENERAL.The Director shall pre- 14
scribe regulations to govern the imposition and 15
collection of fees and assessments. 16
(B) FACTORS REQUIRED TO BE AD- 17
DRESSED.Regulations prescribed by the Direc- 18
tor under this subsection shall specify and de- 19
fine 20
(i) the basis of fees or assessments 21
(such as the outstanding number of con- 22
sumer credit accounts, off-balance sheet re- 23
ceivables attributable to the covered person, 24
total consolidated assets, total assets under 25

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H.L.C.
management, or volume of consumer finan- 1
cial transactions or use of service pro- 2
viders); 3
(ii) the amount and frequency of fees 4
or assessments; and 5
(iii) such other factors that the Direc- 6
tor determines are appropriate, which shall 7
include a covered persons compliance 8
record under the enumerated consumer 9
laws, the authorities transferred under sub- 10
titles F and H, and this title. 11
(3) ASSESSMENTS ON DEPOSITORY INSTITUTION 12
COVERED PERSONS. 13
(A) DEPOSITORY INSTITUTION COVERED 14
PERSON DEFINED.For purposes of this section, 15
the term depository institution covered person 16
means a covered person that is an insured depos- 17
itory institution or credit union. 18
(B) ASSESSMENTS. 19
(i) FEES REQUIRED.The Director 20
shall assess fees for supervision as are ap- 21
propriate on depository institution covered 22
persons, taking into account the size and 23
complexity of the covered person, and the 24
compliance record of the covered person 25

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H.L.C.
under the enumerated consumer laws, the 1
laws and authorities transferred under sub- 2
(ii) LIMITATION ON CERTAIN FEES. 4
The Agency shall not assess examination 5
fees on an institution referred to in section 6
123(a), or an institution whose examina- 7
tion responsibilities have been delegated to 8
an appropriate agency, pursuant to section 9
122(c)(11). 10
(iii) BASIS FOR FEE AMOUNTS.Fees 11
assessed by the Director under this subpara- 12
graph may be established at levels necessary 13
to meet the Agencys expenses for carrying 14
out the duties and responsibilities of the Di- 15
rector and the Agency under this title with 16
regard to depository institution covered per- 17
sons. 18
(C) COORDINATION DURING IMPLEMENTA- 19
TION PERIOD.The Director and the agencies re- 20
sponsible for chartering and or supervising de- 21
pository institution covered persons shall coordi- 22
nate on the levels of fees assessed on depository 23
institution covered persons under this para- 24
graph, so that levels of assessments under this 25

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H.L.C.
subparagraph combined with levels of assess- 1
ments by agencies responsible for chartering and 2
or supervising depository institution covered per- 3
sons shall be no more than the assessments such 4
depository institution covered person was re- 5
quired to pay for the 12-month period ending on 6
December 31, 2009. 7
(D) MARGINAL ASSESSMENT RATE. 8
(i) IN GENERAL.In setting assess- 9
ment rates for depository institution covered 10
persons, the Director shall not impose as- 11
sessments that result in higher marginal as- 12
sessment rates for depository institution 13
covered persons with assets of less than 14
$25,000,000,000 than the marginal rates for 15
depository institutions covered persons with 16
assets that exceed that amount. 17
(ii) RULE OF CONSTRUCTION. Clause 18
(i) shall not be construed as limiting or im- 19
pairing the authority of the Director to set 20
assessments that would result in higher 21
marginal assessment rates on the larger de- 22
pository institution covered persons. 23
(E) LIMITATIONS ON ASSESSMENTS. 24

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H.L.C.
(i) ASSESSMENTS FOR ADMINISTRA- 1
TIVE COSTS.Notwithstanding any provi- 2
sion in this title, no depository institution 3
covered person shall be charged an assess- 4
ment to be used for the supervision, exam- 5
ination, enforcement or regulation by the 6
Agency of nondepository covered persons. 7
(ii) AMOUNTS PAID FOR CONSUMER 8
COMPLIANCE SUPERVISION.Notwith- 9
standing any provision in this title, no de- 10
pository institution covered person shall 11
pay more for consumer compliance super- 12
vision than it paid before the date of enact- 13
ment of this Act. 14
(4) ASSESSMENTS ON NONDEPOSITORY COVERED 15
PERSONS. 16
(A) NONDEPOSITORY COVERED PERSON DE- 17
FINED.For purposes of this section, the term 18
nondepository covered person 19
(i) means a covered person that is not 20
a credit union or insured depository insti- 21
tution; and 22
(ii) includes any bank holding com- 23
pany. 24
(B) ASSESSMENTS. 25

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H.L.C.
shall assess fees for registration, examina- 2
tion, and supervision of nondepository cov- 3
ered persons. 4
(ii) BASIS FOR FEE AMOUNTS. Fees 5
rector and the Agency, including super- 10
vising such covered persons, taking into ac- 11
count such other sums available to the 12
Agency. 13
(iii) REGISTRATION FEE MINIMUMS. 14
Registration fees imposed on a nondeposi- 15
tory covered person under this paragraph 16
shall, at a minimum, be imposed on such 17
covered person at the time the person reg- 18
isters (or periodically renews any such reg- 19
istration) with the Agency, in accordance 20
with regulations prescribed by the Director. 21
(C) NONDEPOSITORY COVERED PERSON AS- 22
SESSMENT NOT LESS THAN FOR DEPOSITORY 23
COVERED PERSONS.Assessment rates levied by 24
the Director under this section on a nondeposi- 25

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H.L.C.
tory institution covered persons shall be no less 1
than assessments levied by the Agency under this 2
section on a depository institution covered per- 3
son with similar characteristics. 4
(c) AUTHORIZATION OF APPROPRIATIONS. 5
(1) IN GENERAL.For the purposes of carrying 6
enumerated consumer laws, and the laws and au- 8
thorities transferred under subtitles F and H, there 9
are authorized to be appropriated to the Director such 10
sums as may be necessary for any fiscal year. 11
(2) APPORTIONMENT.Notwithstanding any 12
other provision of law, such amounts shall be subject 13
to apportionment under section 1517 of title 31, 14
United States Code, and restrictions that generally 15
apply to the use of appropriated funds in title 31, 16
United States Code, and other laws. 17
(3) OTHER AVAILABLE FUNDS TAKEN INTO AC- 18
COUNT.Sums appropriated under this subsection 19
shall take into account such other sums available to 20
the Agency under this section. 21
(d) CONSUMER FINANCIAL PROTECTION AGENCY DE- 22
POSITORY INSTITUTION FUND. 23
(1) ESTABLISHMENT. 24

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H.L.C.
(A) IN GENERAL.There is established in 1
the Treasury a separate fund to be known as the 2
Consumer Financial Protection Agency Deposi- 3
tory Institution Fund (hereafter in this section 4
referred to as the CFPA Depository Fund). 5
(B) AMOUNTS IN FUND NOT AVAILABLE FOR 6
CERTAIN PURPOSES.Other than pursuant to 7
subsection (f), amounts on deposit in the CFPA 8
Depository Fund shall not be used in the super- 9
vision and examination of nondepository institu- 10
tion covered persons. 11
(2) ALL TRANSFERRED FUNDS DEPOSITED.All 12
amounts transferred to the Agency under subsection 13
(a) shall be deposited into the CFPA Depository 14
Fund. 15
(3) ALL APPLICABLE SUPERVISORY FEES AND 16
ASSESSMENTS DEPOSITED.The Director shall de- 17
posit all amounts received from assessments under 18
subsection (b)(3) in the CFPA Depository Fund. 19
(e) CONSUMER FINANCIAL PROTECTION AGENCY NON- 20
DEPOSITORY INSTITUTION FUND. 21
the Treasury a separate fund called the Con- 24
sumer Financial Protection Agency Nondeposi- 25

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H.L.C.
referred to as the CFPA Nondepository Fund). 2
Nondepository Fund shall not be used for the su- 6
pervision and examination of depository institu- 7
subsection (b)(4) in the CFPA Nondepository Fund. 12
(f) GENERAL PROVISIONS RELATING TO FUNDS. 13
(1) MAINTENANCE OF FUNDS. 14
(A) AGENCY FUNDS MAINTAINED BY TREAS- 15
URY.The Consumer Financial Protection Agen- 16
cy Depository Institution Fund established 17
under subsection (d) and the Consumer Finan- 18
cial Protection Agency Nondepository Institution 19
Fund established under subsection (e) shall each 20
be 21
(i) maintained and administered by 22
the Secretary; and 23
(ii) maintained separately and not 24
commingled. 25

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H.L.C.
(B) AGENCYS AUTHORITY.Any provision 1
of this Act forbidding the commingling or use of 2
the CFPA Depository Fund and the CFPA Non- 3
depository Fund shall not be construed as lim- 4
iting or impairing the authority of the Agency 5
to use the same facilities and resources in the 6
course of conducting supervisory and regulatory 7
functions with respect to depository institutions 8
and nondepository institutions, or to integrate 9
such functions. 10
(C) ACCOUNTING REQUIREMENTS. 11
(i) ACCOUNTING FOR USE OF FACILI- 12
TIES AND RESOURCES.The Agency shall 13
keep a full and complete accounting of all 14
costs and expenses associated with the use of 15
any facility or resource used in the course 16
of any function specified in subparagraph 17
(B) and shall allocate, in the manner pro- 18
vided in subparagraph (D), any such costs 19
and expenses incurred by the Agency 20
(I) with respect to depository in- 21
stitution covered persons, to the CFPA 22
Depository Fund; and 23

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H.L.C.
(II) with respect to nondepository 1
covered persons, to the CFPA Non- 2
depository fund. 3
(D) ALLOCATION OF ADMINISTRATIVE EX- 4
PENSES.Any personnel, administrative, or 5
other overhead expense of the Agency shall be al- 6
located 7
(i) fully to the CFPA Depository Fund 8
if the expense was incurred directly as a re- 9
sult of the Agencys responsibilities solely 10
with respect to depository institution cov- 11
ered persons; 12
(ii) fully to the CFPA Nondepository 13
Fund, if the expense was incurred directly 14
as a result of the Agencys responsibilities 15
solely with respect to nondepository covered 16
persons; 17
(iii) between the CFPA Depository 18
Fund and the CFPA Nondepository Fund, 19
in amounts reflecting the relative degree to 20
which the expense was incurred as a result 21
of the activities of depository institution 22
covered persons, and nondepository covered 23
persons; and 24

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H.L.C.
(iv) if the Director is unable to make 1
a complete allocation under clause (i), (ii), 2
or (iii), between the CFPA Depository Fund 3
and the CFPA Nondepository Fund, in 4
amounts reflecting the relative proportion 5
that, as of the end of the preceding year 6
(I) the aggregate assets of all de- 7
pository institution covered persons 8
bears to the aggregate assets of all cov- 9
ered persons; and 10
(II) the aggregate assets of all 11
nondepository covered persons bears to 12
the aggregate assets of all covered per- 13
sons. 14
(E) AGENCY FUND.The Agency fund 15
means the Consumer Financial Protection Agen- 16
under subsection (d), and, the Consumer Finan- 18
Fund established under subsection (e), and the 20
Consumer Financial Protection Agency Civil 21
Penalty Fund established under subsection (g). 22
(2) INVESTMENT. 23
(A) AMOUNTS IN FUNDS MAY BE IN- 24
VESTED.The Director may request the Sec- 25

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H.L.C.
retary to invest the portion of any Agency fund 1
that, in the Directors judgment, is not required 2
to meet the current needs of such fund. 3
(B) ELIGIBLE INVESTMENTS.Investments 4
pursuant to subparagraph (A) shall be made by 5
the Secretary in obligations of the United States 6
or obligations that are guaranteed as to prin- 7
cipal and interest by the United States, with 8
maturities suitable to the needs of the Agency 9
fund involved, as determined by the Director. 10
(C) INTEREST AND PROCEEDS CREDITED. 11
The interest on, and the proceeds from the sale 12
or redemption of, any obligations held in the re- 13
spective Agency Fund shall be credited to and 14
form a part of the respective Agency Fund. 15
(3) USE OF FUNDS.Funds obtained by, trans- 16
ferred to, or credited to any Agency fund shall be im- 17
mediately available to the Agency, and remain avail- 18
able until expended, to pay the expenses of the Agency 19
in carrying out the duties and responsibilities of the 20
Director and the Agency, including the payment of 21
compensation of the Director and officers and employ- 22
ees of the Agency. 23
(2) FEES, ASSESSMENTS AND OTHER FUNDS NOT 24
GOVERNMENT FUNDS.Funds obtained by or trans- 25

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H.L.C.
ferred to any Agency fund shall not be construed to 1
be Government funds or appropriated monies. 2
(3) AMOUNTS NOT SUBJECT TO APPORTION- 3
MENT.Notwithstanding any other provision of law, 4
amounts in any Agency fund shall not be subject to 5
apportionment for purposes of chapter 15 of title 31, 6
United States Code, or under any other authority. 7
(g) PENALTIES AND FINES. 8
(1) ESTABLISHMENT OF VICTIMS RELIEF 9
FUND.There is established in the Treasury of the 10
United States a fund to be known as the Consumer 11
Financial Protection Agency Civil Penalty Fund 12
(hereafter in this section referred to as the Civil Pen- 13
alty Fund). 14
(2) DEPOSITS. If the Agency obtains a civil 15
penalty against any person in any judicial or admin- 16
istrative action under this title, any law or authority 17
transferred under subtitles F and H, or any enumer- 18
ated consumer law, the Agency shall deposit into the 19
Civil Penalty Fund the amount of the penalty col- 20
lected. 21
(3) PAYMENT TO VICTIMS.Amounts in the Civil 22
Penalty Fund shall be available to the Director, with- 23
out fiscal year limitation, for payments to the victims 24
of activities for which civil penalties have been im- 25

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H.L.C.
posed under this title, the law and authorities trans- 1
ferred under subtitles F and H, or any enumerated 2
consumer law. 3
SEC. 120. AMENDMENTS RELATING TO OTHER ADMINISTRA- 4
TIVE PROVISIONS. 5
(a) ACT OF OCTOBER 28, 1974.Section 111 of Public 6
Law 93495 (12 U.S.C. 250) is amended by inserting the 7
Consumer Financial Protection Agency, after Federal 8
Deposit Insurance Corporation,. 9
(b) PAPERWORK REDUCTION ACT.Section 2(5) of the 10
Paperwork Reduction Act (44 U.S.C. 3502(5)) by inserting 11
the Consumer Financial Protection Agency, after the Se- 12
curities and Exchange Commission,. 13
SEC. 120A. EFFECTIVE DATE. 14
This subtitle shall take effect on the date of the enact- 15
Subtitle BGeneral Powers of the 17
Director and Agency 18
SEC. 121. MANDATE AND OBJECTIVES. 19
(a) MANDATE.The Director shall seek to promote 20
transparency, simplicity, fairness, accountability, and 21
equal access in the market for consumer financial products 22
or services. 23
(b) OBJECTIVES.The Director may exercise the au- 24
thorities granted in this title, in the enumerated consumer 25

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H.L.C.
laws, and transferred under subtitles F and H for the pur- 1
poses of ensuring that, with respect to consumer financial 2
products or services 3
(1) consumers have and can use the information 4
they need to make responsible decisions about con- 5
(2) consumers are protected from abuse, unfair- 7
ness, deception, and discrimination; 8
(3) markets for consumer financial products or 9
services operate fairly and efficiently with ample 10
room for sustainable growth and innovation; and 11
(4) traditionally underserved consumers and 12
communities have equal access to responsible finan- 13
cial services. 14
SEC. 122. AUTHORITIES. 15
(a) IN GENERAL.The Director may exercise the au- 16
laws, and transferred under subtitles F and H, to admin- 18
ister, enforce, and otherwise implement the provisions of 19
this title, the authorities transferred in subtitles F and H, 20
and the enumerated consumer laws. 21
(b) RULEMAKING, ORDERS, AND GUIDANCE. 22
(1) IN GENERAL.The Director may prescribe 23
regulations and issue orders and guidance as may be 24
necessary or appropriate to enable it to administer 25

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H.L.C.
and carry out the purposes and objectives of this title, 1
and the enumerated consumer laws, and to prevent 3
evasions of this title, any such authority, and any 4
such law. 5
(2) STANDARDS FOR RULEMAKING.In pre- 6
scribing a regulation under this title or pursuant to 7
the authorities transferred under subtitles F and H or 8
the enumerated consumer laws, the Director shall 9
(A) consider the potential benefits and costs 10
to consumers and covered persons, including the 11
potential reduction of consumers access to con- 12
sumer financial products or services, resulting 13
from such regulation; and 14
(B) consult with the Federal banking agen- 15
cies, State bank supervisors, the Federal Trade 16
Commission, or other Federal agencies, as appro- 17
priate, regarding the consistency of a proposed 18
regulation with prudential, consumer protection, 19
civil rights, market, or systemic objectives ad- 20
ministered by such agencies or supervisors. 21
(3) EXEMPTIONS. 22
(A) IN GENERAL.The Director, by regula- 23
tion or order, may conditionally or uncondition- 24
ally exempt any covered person, service provider, 25

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H.L.C.
or any consumer financial product or service or 1
any class of covered persons, class of service pro- 2
viders, or consumer financial products or serv- 3
ices, from any provision of this title, any enu- 4
merated consumer law, or from any regulation 5
under any such provision or law, as the Director 6
deems necessary or appropriate to carry out the 7
purposes and objectives of this title taking into 8
consideration the factors in subparagraph (B). 9
(B) FACTORS.In issuing an exemption by 10
regulation or order as permitted in subpara- 11
graph (A), the Director shall as appropriate take 12
into consideration the following: 13
(i) The total assets of the covered per- 14
son. 15
(ii) The volume of transactions involv- 16
ing consumer financial products or services 17
in which the covered person engages. 18
(iii) The extent to which the covered 19
person engages in 1 or more financial ac- 20
tivities. 21
(iv) Existing laws or regulations which 22
are applicable to the consumer financial 23
product or service and the extent to which 24

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H.L.C.
such laws or regulations provide consumers 1
with adequate protections. 2
(C) RULE OF CONSTRUCTION.No provi- 3
sion of this section shall be construed as altering, 4
amending, or affecting any authority under sec- 5
tions 304(a), 304(i), 305(a), and 306(b) of the 6
Home Mortgage Disclosure Act of 1975 and sec- 7
tions 703(a)(1), 703(a)(2), 703(a)(3), 705(f), and 8
705(g) of the Equal Credit Opportunity Act for 9
determining whether a covered person should be 10
provided an exemption. 11
(c) EXAMINATIONS AND REPORTS. 12
(1) IN GENERAL.Except as provided under sec- 13
tion 123, the Director may on a periodic basis exam- 14
ine a covered person or service provider, with respect 15
to any consumer financial product or service, for pur- 16
poses of ensuring compliance with the requirements of 17
this title, the enumerated consumer laws, and any 18
regulations prescribed by the Director under this title 19
or pursuant to the authorities transferred under sub- 20
titles F and H, and enforcing compliance with such 21
requirements. 22
(2) EXAMINATION PROGRAM.The Director shall 23
exercise any authority of the Director under para- 24
graph (1) in a manner designed to ensure that such 25

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75
H.L.C.
authorities are exercised with respect to covered per- 1
sons or service providers, without regard to charter or 2
corporate form, based on the Directors assessment of 3
the risks posed to consumers in the relevant product 4
markets and geographic markets, and taking into con- 5
sideration, as applicable, the following factors: 6
(A) The asset size of the covered persons. 7
(B) The volume of transactions involving 8
consumer financial products or services in which 9
the covered persons engage. 10
(C) The risks to consumers created by the 11
provision of such consumer financial products or 12
services. 13
(D) In the case of State-chartered institu- 14
tions, the extent to which such institutions are 15
subject to oversight by State authorities for con- 16
sumer protection. 17
(3) COORDINATION.The Director shall coordi- 18
nate the Agencys supervisory activities with the su- 19
pervisory activities conducted by the Federal banking 20
agencies and the State bank supervisors, including es- 21
tablishing their respective schedules for examining 22
covered persons and requirements regarding reports to 23
be submitted by covered persons. 24

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H.L.C.
(4) REPORTS.The Director may require reports 1
from a covered person for purposes of ensuring com- 2
pliance with the requirements of this title, the enu- 3
merated consumers laws, and any regulation pre- 4
scribed by the Director under this title or pursuant 5
to the authorities transferred under subtitles F and 6
H, and enforcing compliance with such requirements. 7
(5) CONTENT OF REPORTS.The reports author- 8
ized in paragraph (4) may include such information 9
as necessary to keep the Agency informed as to 10
(A) the compliance systems or procedures of 11
the covered person or any affiliate thereof, with 12
applicable provisions of this title or any other 13
law that the Agency has jurisdiction to enforce; 14
and 15
(B) matters related to the provision of con- 16
sumer financial products or services including 17
the servicing or maintenance of accounts or ex- 18
tensions of credit. 19
(6) USE OF EXISTING REPORTS.In general, the 20
Agency shall, to the fullest extent possible, use 21
(A) reports that a covered person, or any 22
affiliate thereof, or any service provider to such 23
covered person or affiliate, has provided or been 24

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H.L.C.
required to provide to a Federal or State agency; 1
and 2
(B) information that has been reported pub- 3
licly. 4
(7) ACCESS BY THE AGENCY TO REPORTS OF 5
OTHER REGULATORS. 6
(A) EXAMINATION AND FINANCIAL CONDI- 7
TION REPORTS.Upon providing reasonable as- 8
surances of confidentiality, the Agency shall have 9
access to any report of examination or financial 10
condition, including a report containing data re- 11
garding consumer complaints, made by a Fed- 12
eral banking agency or other Federal agency 13
having supervision of a covered person, or a 14
service provider, (other than returns and return 15
information described in section 6103 of the In- 16
ternal Revenue Code of 1986) and to all revi- 17
sions made to any such report. 18
(B) PROVISION OF OTHER REPORTS TO 19
AGENCY.In addition to the reports described in 20
subparagraph (A), a Federal banking agency 21
may, in its discretion, furnish to the Agency any 22
other report or other confidential supervisory in- 23
formation concerning any insured depository in- 24
stitution, any credit union, or other entity exam- 25

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H.L.C.
ined by such agency under authority of any Fed- 1
eral law. 2
(8) ACCESS BY OTHER REGULATORS TO REPORTS 3
OF THE AGENCY. 4
(A) EXAMINATION REPORTS.Upon pro- 5
viding reasonable assurances of confidentiality, a 6
Federal banking agency, a State regulator, or 7
any other Federal agency having supervision of 8
a covered person shall have access to any report 9
of examination made by the Agency with respect 10
to the covered person or service provider, and to 11
all revisions made to any such report. 12
OTHER REGULATORS.In addition to the reports 14
described in paragraph (A), the Agency may, in 15
the discretion of the Agency, furnish to a Federal 16
banking agency any other report or other con- 17
fidential supervisory information concerning 18
any insured depository institution, any credit 19
union, or other entity examined by the Agency 20
under authority of any Federal law. 21
(9) PRESERVATION OF AUTHORITY.No provi- 22
sion in paragraph (3) shall be construed as pre- 23
venting the Agency from conducting an examination 24
authorized by this title or under the authorities trans- 25

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H.L.C.
ferred under subtitles F and H or pursuant to any 1
enumerated consumer law. No provision of this title 2
shall be construed as limiting the authority of the Di- 3
rector to require reports from a covered person, as 4
permitted under paragraph (4), regarding informa- 5
tion owned or under the control of the covered person, 6
regardless of whether such information is maintained, 7
stored, or processed by another person. 8
(10) REPORTS OF TAX LAW NONCOMPLIANCE. 9
The Director shall provide the Commissioner of Inter- 10
nal Revenue with any report of examination or re- 11
lated information identifying possible tax law non- 12
compliance. 13
(11) DELEGATION. 14
(A) IN GENERAL.The Director may dele- 15
gate the examination authorities of the Agency 16
under this title to any appropriate agency, as 17
defined in section 123, for any insured deposi- 18
tory institution or insured credit union that is 19
not subject to section 123 upon a petition by an 20
appropriate agency. 21
(B) STANDARD FOR DELEGATION.The Di- 22
rector shall provide such delegation if, in the Di- 23
rectors sole discretion, the Director determines 24
that 25

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H.L.C.
(i) the delegation is consistent with the 1
public interest; 2
(ii) the appropriate agency is capable 3
of enforcing compliance with this Act, and 4
with any regulation prescribed under this 5
Act; and 6
(iii) such capability is comparable to 7
or superior to the capability of the Agency, 8
in terms of expertise, demonstrated commit- 9
ment, and overall effectiveness, in enforcing 10
such compliance. 11
(C) EFFECT OF DELEGATION.The insured 12
depository institution or insured credit union 13
shall be subject to the examination process de- 14
scribed in section 123(b). 15
(D) NO EFFECT ON ENFORCEMENT.The 16
Directors delegation authority under this para- 17
graph shall not apply to the Directors enforce- 18
ment responsibilities under subsection (e). 19
(d) EXCLUSIVE RULEMAKING AND EXAMINATION AU- 20
THORITY.Notwithstanding any other provision of Federal 21
law other than section 123 and subsections (f) and (h) of 22
this section, to the extent that a Federal law authorizes the 23
Director and another Federal agency to prescribe regula- 24
tions, issue guidance, conduct examinations, or require re- 25

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ports under that law for purposes of assuring compliance 1
with this title, any enumerated consumer law, the laws for 2
which authorities were transferred under subtitles F and 3
H, and any regulations prescribed under this title or pursu- 4
ant to any such authority, the Director shall have the exclu- 5
sive authority to prescribe regulations, issue guidance, con- 6
duct examinations, require reports, or issue exemptions 7
with regard to any person subject to that law and with re- 8
spect to any activity regulated under any enumerated con- 9
sumer law. 10
(e) PRIMARY ENFORCEMENT AUTHORITY. 11
(1) THE AGENCY TO HAVE PRIMARY ENFORCE- 12
MENT AUTHORITY.To the extent that a Federal law 13
authorizes the Agency and another Federal agency to 14
enforce that law, the Agency shall have primary au- 15
thority to enforce that Federal law with respect to 16
any person in accordance with this subsection. 17
(2) COORDINATION WITH FEDERAL TRADE COM- 18
MISSION. 19
(A) NOTICE.If the Commission is author- 20
ized to enforce any Federal law described in 21
paragraph (1), or a regulation prescribed under 22
any such Federal law, the Commission shall 23
serve written notice to the Director of any en- 24
forcement action at least 30 days prior to initi- 25

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ating such an enforcement action, except that if 1
exigent circumstances are present, the Commis- 2
sion may provide notice immediately upon initi- 3
ating such enforcement action. 4
(B) INTERVENTION BY THE DIRECTOR. 5
Upon receiving any notice under subparagraph 6
(A) with respect to an enforcement action, the 7
Director may intervene in such enforcement ac- 8
tion and upon intervening 9
(i) be heard on all matters arising in 10
such enforcement action; and 11
(ii) file petitions for appeal in such en- 12
forcement action. 13
(C) PENDENCY OF AGENCY ACTION.When- 14
ever a civil action has been instituted by or on 15
behalf of the Agency for any violation of any 16
Federal law described in paragraph (1), or a 17
regulation prescribed under any such Federal 18
law, the Commission may not, during the pend- 19
ency of that action instituted by or on behalf of 20
the Agency, institute a civil action under such 21
law or regulation against any defendant named 22
in the Agency complaint in such action for any 23
violation alleged in the Agency complaint. 24
(D) AGREEMENTS BETWEEN AGENCIES. 25

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(i) NEGOTIATIONS AUTHORIZED.The 1
Director may negotiate an agreement with 2
the Commission to establish procedures to 3
ensure that the enforcement actions of the 2 4
agencies are appropriately coordinated. 5
(ii) SCOPE OF NEGOTIATED AGREE- 6
MENT.The terms of any agreement nego- 7
tiated pursuant to clause (i) may modify or 8
supersede the provisions of subparagraphs 9
(A), (B), and (C). 10
(3) COORDINATION WITH OTHER FEDERAL AGEN- 11
CY. 12
(A) REFERRAL.Any Federal agency (other 13
than the Federal Trade Commission) that is au- 14
thorized to enforce a Federal law described in 15
paragraph (1) may recommend in writing to the 16
Director that the Agency initiate an enforcement 17
proceeding to the extent the Agency is authorized 18
by that Federal law or by this title. The rec- 19
ommendation shall be accompanied by a written 20
explanation of the concerns giving rise to the rec- 21
ommendation. 22
(B) BACKSTOP ENFORCEMENT AUTHORITY 23
OF OTHER FEDERAL AGENCY.If the Agency 24
does not, before the end of the 120-day period be- 25

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ginning on the date on which the Director re- 1
ceives a recommendation under subparagraph 2
(A), initiate an enforcement proceeding, the other 3
agency referred to in subparagraph (A) may ini- 4
tiate an enforcement proceeding as permitted by 5
that Federal law. 6
(4) INSTITUTIONS SUBJECT TO SPECIAL EXAM- 7
INATION AND ENFORCEMENT PROCEDURES.This 8
subsection shall not apply to institutions subject to 9
section 123. 10
(f) PRESERVATION OF OTHER AUTHORITY. 11
(1) ATTORNEY GENERAL.No provision of this 12
title shall be construed as affecting any authority of 13
the Attorney General. 14
(2) SECRETARY OF THE TREASURY. No provi- 15
sion of this title shall be construed as affecting any 16
authority of the Secretary of the Treasury, including 17
with respect to prescribing regulations, initiating en- 18
forcement proceedings, or taking other actions with 19
respect to a person providing tax planning or tax 20
preparation services. 21
(3) FAIR HOUSING ACT.No provision of this 22
title shall be construed as affecting any authority 23
arising under the Fair Housing Act. 24

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(g) EFFECT ON OTHER AUTHORITY.No provision of 1
this section or section 123 shall be construed as modifying 2
or limiting the authority of any appropriate Federal bank- 3
ing agency or the Director or Agency to interpret, or take 4
enforcement action under, any law or regulation the inter- 5
pretation or enforcement of which is committed to the bank- 6
ing agency or the Director or Agency, which shall include, 7
in the case of the Director and the Agency, this Act, the 8
enumerated consumer laws, and the regulations prescribed 9
under this Act or such laws. 10
(h) PRESERVATION OF FEDERAL TRADE COMMISSION 11
AUTHORITY.No provision of this title shall be construed 12
as modifying, limiting, or otherwise affecting the authority 13
of the Federal Trade Commission under the Federal Trade 14
Commission Act or other laws other than the enumerated 15
consumer laws. 16
SEC. 123. EXAMINATION AND ENFORCEMENT FOR SMALL 17
BANKS, THRIFTS, AND CREDIT UNIONS. 18
(a) SCOPE OF INSTITUTIONS SUBJECT TO THIS SEC- 19
TION. 20
(1) INSTITUTIONS COVERED.This section shall 21
apply to 22
(A) any insured depository institution with 23
total assets of $10,000,000,000 or less; or 24

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(B) any insured credit union with total as- 1
sets of $1,500,000,000 or less. 2
(2) APPROPRIATE AGENCY.For purposes of this 3
title, the term appropriate agency means 4
(A) in the case of an insured depository in- 5
stitution, the appropriate Federal banking agen- 6
cy as such term is defined in section 3 of the 7
Federal Deposit Insurance Act; and 8
(B) in the case of an insured credit union, 9
the National Credit Union Administration. 10
(b) EXAMINATIONS. 11
(1) IN GENERAL.The appropriate agency shall 12
on a periodic basis examine, or require reports from, 13
an institution referred to in subsection (a) for pur- 14
regulation prescribed by the Director under this title 17
requirements. 20
(2) AGENCY ROLE IN EXAMINATIONS. 21
(A) The appropriate agency shall provide 22
all reports, records, and documentation related to 23
the examination process to the Agency on a time- 24
ly and ongoing basis. 25

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(B) The Director and Agency may, at its 1
discretion, include an examiner on any exam- 2
ination conducted under paragraph (1). The ap- 3
propriate agency shall involve such Agency ex- 4
aminer in the entire examination process, in- 5
cluding setting the scope of an examination, par- 6
ticipating in the examination, and providing 7
input on the examination report, matters requir- 8
ing attention and examination ratings. 9
(c) ENFORCEMENT. 10
(1) IN GENERAL.Notwithstanding any other 11
provision of this title other than this subsection, the 12
appropriate agency shall have primary authority to 13
enforce violations identified at institutions referred to 14
in subsection (a) of any of the requirements of this 15
title, the enumerated consumers laws, and any regula- 16
tion prescribed by the Director under this title or 17
pursuant to the authorities transferred under subtitles 18
F and H. 19
(2) COORDINATION WITH APPROPRIATE AGEN- 20
CY. 21
(A) REFERRAL. 22
(i) IN GENERAL.The Agency may 23
recommend in writing to the appropriate 24
agency that the appropriate agency initiate 25

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an enforcement proceeding to the extent the 1
appropriate agency is authorized by that 2
Federal law or by this title. 3
(ii) EXPLANATION.Any recommenda- 4
tion under clause (i) shall be accompanied 5
by a written explanation of the concerns 6
giving rise to the recommendation. 7
OF AGENCY.If the appropriate agency does not, 9
before the end of the 120-day period beginning 10
on the date on which the appropriate agency re- 11
(A), initiate an enforcement proceeding, the 13
Agency may initiate an enforcement proceeding 14
as permitted by Federal law. 15
(d) ACTIONS ARISING OUT OF CONSUMER COMPLAINT 16
SYSTEM.Notwithstanding any provision of this section, 17
if through the consumer complaint system administered by 18
the Agency under section 115(c)(3), the Director has reason- 19
able cause to believe that an institution referred to in sub- 20
section (a) demonstrates noncompliance with any provision 21
of this title, the enumerated consumer laws, or any regula- 22
tion prescribed by the Director under this title or pursuant 23
to the authorities transferred under subtitles F and H, the 24
Director may directly investigate such institution for such 25

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H.L.C.
noncompliance and take any action permitted under sub- 1
title E that the Director deems appropriate. 2
(e) REMOVAL OF APPROPRIATE AGENCY FOR PAR- 3
TICULAR INSTITUTION. 4
(1) HEIGHTENED SUPERVISION.The Director 5
(A) may provide notice to an appropriate 6
agency that the Director is considering issuing a 7
removal order under paragraph (2); and 8
(B) shall have an Agency examiner partici- 9
pate in the examination process under subsection 10
(b) for at least 1 examination cycle. 11
(2) REMOVAL BY ORDER.If, after the comple- 12
tion of at least 1 examination cycle following the pro- 13
vision of notice to an appropriate agency under para- 14
graph (1), the Director determines in writing that the 15
appropriate agency has failed to adequately conduct 16
consumer compliance examinations or bring appro- 17
priate enforcement actions against an institution re- 18
ferred to in subsection (a), the Director may order the 19
removal of the appropriate agency from its respon- 20
sibilities under this section for such institution. 21
(3) AGENCY AUTHORITY UPON REMOVAL.Upon 22
removal pursuant to paragraph (2), the Agency shall 23
examine and enforce against such institution as if the 24
institution were subject to section 122. 25

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(4) EFFECTIVE DATE.An order under para- 1
graph (2) shall take effect 30 days after a determina- 2
tion by the Secretary of the Treasury pursuant to 3
paragraphs (5) and (6). 4
(5) AUTOMATIC APPEAL.An order issued by the 5
Director pursuant to paragraph (2) shall be auto- 6
matically appealed to the Secretary. 7
(6) DECISION BY THE SECRETARY OF THE 8
TREASURY. 9
(A) DETERMINATION.The order issued 10
pursuant to paragraph (2) shall be deemed af- 11
firmed unless the Secretary of the Treasury de- 12
nies the determination of the Director within 13
120 days of the issuance of the order pursuant 14
to paragraph (2). 15
(B) RULE OF CONSTRUCTION.Nothing in 16
subparagraph (A) shall be construed as prohib- 17
iting the Secretary of the Treasury from making 18
a determination to either affirm or deny an 19
order issued pursuant to paragraph (2) prior to 20
the passage of the time period in subparagraph 21
(A). 22
(7) REGULATIONS.By the transfer date, the 23
Secretary shall issue regulations that establish the 24
standards the Director shall apply in making a deter- 25

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H.L.C.
mination to remove an appropriate agency and the 1
process, procedures, and standards for an appeal. 2
Such standards shall require the Director to consider 3
at least the following in issuing an order removing an 4
appropriate agency for an institution referred to in 5
subsection (a)(1): 6
(A) Reports of examination of such institu- 7
tion. 8
(B) Any enforcement actions taken by an 9
appropriate agency against such institution and 10
the results of those actions. 11
(C) Consumer complaints issued against 12
such institution. 13
(D) Actions taken by State attorneys gen- 14
eral and private rights of action against such in- 15
stitution. 16
(f) POLICIES AND PROCEDURES.Within 180 days 17
after the designated transfer date, the Agency and the ap- 18
propriate agency shall develop policies and procedures for 19
implementing this section. 20
(g) ASSESSMENTS. 21
(1) LIMITATION ON CERTAIN FEES.The Agency 22
shall not assess examination fees on an institution re- 23
ferred to in subsection (a). 24

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(2) RULE OF CONSTRUCTION.No provision of 1
this section shall be construed as preventing the ap- 2
propriate agency from assessing fees on an institution 3
referred to in paragraph (1) to meet the appropriate 4
agencys expenses for carrying out such examination 5
and supervision responsibilities pursuant to this sec- 6
tion. 7
SEC. 124. SIMULTANEOUS AND COORDINATED SUPER- 8
VISORY ACTION. 9
(a) EXAMINATIONS.A Federal banking agency and 10
the Agency shall, with respect to each insured depository 11
institution, credit union, or other covered person supervised 12
by the Federal banking agency and the Agency, respec- 13
tively 14
(1) coordinate the scheduling of examinations of 15
the insured depository institution, and credit union, 16
or other covered person; 17
(2) conduct simultaneous examinations of each 18
insured depository institution, credit union or other 19
covered person, unless such institution requests exami- 20
nations to be conducted separately; 21
(3) share each draft report of examination with 22
the other agency and permit the receiving agency a 23
reasonable opportunity (which shall not be less than 24
a period of 30 days after the date of receipt) to com- 25

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ment on the draft report before such report is made 1
final; and 2
(4) prior to issuing a final report of examina- 3
tion or taking supervisory action, an agency shall 4
take into consideration concerns, if any, raised in the 5
comments made by the other agency. 6
(b) COORDINATION WITH STATE BANK SUPER- 7
VISORS.The Agency shall pursue arrangements and agree- 8
ments with State bank supervisors to coordinate examina- 9
tions consistent with subsection (a). 10
(c) RESOLUTION OF CONFLICT IN SUPERVISION. 11
(1) REQUEST OF DEPOSITORY INSTITUTION. 12
(A) IN GENERAL.If the proposed material 13
supervisory determinations of the Agency and a 14
Federal banking agency are conflicting, an in- 15
sured depository institution, credit union, or 16
other covered person may request the agencies to 17
coordinate and present a joint statement of co- 18
ordinated supervisory action. 19
(B) LIMITATION.A request of an insured 20
depository institution, credit union, or other cov- 21
ered person shall not be used to appeal a super- 22
visory rating or determination by the Agency or 23
a Federal banking agency. 24

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(2) JOINT STATEMENT.The agencies receiving a 1
request from an insured depository institution, credit 2
union, or covered person under paragraph (1) shall 3
provide a joint statement resolving the conflict under 4
such subparagraph before the end of the 30-day period 5
beginning on the date the agencies receive such re- 6
quest. 7
(d) APPEALS TO GOVERNING PANEL. 8
(1) IN GENERAL.If the agencies receiving a re- 9
quest from an insured depository institution, credit 10
union, or covered person under subsection (c)(1) do 11
not issue a joint statement under subsection (c)(2), or 12
if either agency takes or attempts to take any super- 13
visory action relating to the request for the joint 14
statement without the consent of the other agency, the 15
insured depository institution, credit union, or other 16
covered person may institute an appeal to a gov- 17
erning panel under this subsection. 18
(2) TIMETABLE.Any appeal under paragraph 19
(1) with regard to a failure of agencies to issue a 20
joint statement shall be filed before the end of the 30- 21
day period beginning at the end of the 30-day period 22
during which such joint statement was due under sub- 23
section (c)(2). 24

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(e) COMPOSITION OF GOVERNING PANEL.The gov- 1
erning panel for an appeal under this section shall be com- 2
posed of 3
(1) 2 individuals 4
(A) 1 of whom is a representative from the 5
Agency; 6
(B) 1 of whom is a representative of the 7
Federal banking agency which received the re- 8
quest to which the appeal relates; and 9
(C) neither of whom 10
(i) have participated in the material 11
supervisory determinations under appeal; 12
and 13
(ii) report directly or indirectly to the 14
individual who made the supervisory deter- 15
minations under appeal; and 16
(2) 1 individual who is a representative from 17
(A) the Federal banking agency that heads 18
the Financial Institution Examination Council; 19
or 20
(B) if the Financial Institutions Examina- 21
tion Council is headed by a Federal banking 22
agency that is a party to the appeal, the Federal 23
banking agency that is next scheduled to head 24
the Financial Institutions Examination Council. 25

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(f) CONDUCT OF APPEAL. 1
(1) CONTENT OF FILING APPEAL.The insured 2
depository institution, credit union, or other covered 3
person which institutes an appeal under subsection 4
(d)(1) shall include in the filing of such appeal all the 5
facts and legal arguments pertaining to the matter 6
appealed. 7
(2) APPEARANCE.The insured depository insti- 8
tution, credit union, or other covered person which in- 9
stitutes an appeal under this section may appear be- 10
fore the governing panel in person or by telephone, 11
through counsel, employees, or representatives of, or 12
for, such institution, credit union, or other covered 13
person. 14
(3) REQUESTS FOR ADDITIONAL INFORMATION. 15
Any governing panel convened under this section may 16
request the insured depository institution, credit 17
union, or other covered person, the Agency, or the 18
Federal banking agency to produce additional infor- 19
mation relevant to the appeal. 20
(4) FINAL WRITTEN DETERMINATIONS .Any 21
governing panel convened under this section, by a 22
majority vote of the members of the panel, shall pro- 23
vide a final determination, in writing, within 30 24
days of the filing of an informationally complete ap- 25

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H.L.C.
peal, or such longer period as the panel and the in- 1
sured depository institution, credit union, or other 2
covered person may jointly agree. 3
(5) PUBLIC INFORMATION.A redacted copy of 4
any determination by a governing panel convened 5
under this section shall be made public upon the 6
issuance of such determination. 7
(g) PROHIBITION AGAINST RETALIATION.The Direc- 8
tor and the Federal banking agencies shall prescribe regula- 9
tions to provide safeguards from retaliation against any in- 10
sured depository institution, credit union, or other covered 11
person which institutes an appeal under this section, as 12
well as against any officer or and employee of any such 13
institution, credit union, or other person. 14
(h) MATERIAL SUPERVISORY DETERMINATION DE- 15
FINED.For purposes of this section, the term material 16
supervisory determination 17
(1) includes any action relating to any super- 18
vision or examinations; and 19
(2) does not include 20
(A) a determination by any Federal bank- 21
ing agency to appoint a conservator or receiver 22
for an insured depository institution or a liqui- 23
dating agent for an insured credit union, as the 24
case may be, or a decision to take action pursu- 25

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H.L.C.
ant to section 38 of the Federal Deposit Insur- 1
ance Act or section 212 of the Federal Credit 2
Union Act, as the case may be; or 3
(B) any regulation or guidance, or order of 4
general applicability. 5
SEC. 125. LIMITATIONS ON AUTHORITY OF AGENCY AND DI- 6
RECTOR. 7
(a) EXCLUSION FOR MERCHANTS, RETAILERS, AND 8
SELLERS OF NONFINANCIAL SERVICES. 9
(1) IN GENERAL.Notwithstanding any provi- 10
sion of this title (other than paragraph (4)) and sub- 11
ject to paragraph (2), the Director and the Agency 12
may not exercise any rulemaking, supervisory, en- 13
forcement or other authority, including authority to 14
order assessments, under this title with respect to 15
(A) credit extended directly by a merchant, 16
retailer, or seller of nonfinancial services to a 17
consumer, in a case in which the good or service 18
being provided is not itself a consumer financial 19
product or service, exclusively for the purpose of 20
enabling that consumer to purchase goods or 21
services directly from the merchant, retailer, or 22
seller of nonfinancial services; or 23

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(B) collection of debt, directly by the mer- 1
chant, retailer, or seller of nonfinancial services, 2
arising from such credit extended. 3
(2) EXCEPTION FOR EXISTING AUTHORITY.The 4
Director may exercise any rulemaking authority re- 5
garding an extension of credit described in paragraph 6
(1)(A) or the collection of debt arising from such ex- 7
tension, as may be authorized by the enumerated con- 8
sumer laws or any law or authority transferred under 9
subtitle F or H. 10
this title shall be construed as modifying, limiting, or 12
superseding the authority of the Federal Trade Com- 13
mission or any other agency with respect to credit ex- 14
tended, or the collection of debt arising from such ex- 15
tension, directly by a merchant, retailer, or seller of 16
nonfinancial services to a consumer exclusively for the 17
purpose of enabling that consumer to purchase goods 18
or services directly from the merchant, retailer, or 19
seller of nonfinancial services. 20
(4) EXCLUSION NOT APPLICABLE TO CERTAIN 21
CREDIT TRANSACTIONS.Paragraph (1) shall not 22
apply to 23
(A) any credit transaction, including the 24
collection of the debt arising from such extension, 25

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H.L.C.
in which the merchant, retailer, or seller of non- 1
financial services assigns, sells, or otherwise con- 2
veys such debt owed by the consumer to another 3
person; or 4
(B) any credit transaction 5
(i) in which the credit provided signifi- 6
cantly exceeds the market value of the prod- 7
uct or service provided, and 8
(ii) with respect to which the Director 9
finds that the sale of the product or service 10
is done as a subterfuge so as to evade or cir- 11
cumvent the provisions of this title. 12
(b) EXCLUSION FOR PERSONS REGULATED BY THE 13
SECURITIES AND EXCHANGE COMMISSION. 14
(1) IN GENERAL.No provision of this title shall 15
be construed as altering, amending, or affecting the 16
authority of the Securities and Exchange Commission 17
or any securities commission (or any agency or office 18
performing like functions) of any State to adopt rules, 19
initiate enforcement proceedings, or take any other 20
action with respect to a person regulated by the Secu- 21
rities and Exchange Commission or any securities 22
commission (or any agency or office performing like 23
functions) of any State. The Director and Agency 24
shall have no authority to exercise any power to en- 25

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H.L.C.
force this title with respect to a person regulated by 1
the Securities and Exchange Commission or any secu- 2
rities commission (or any agency or office performing 3
like functions) of any State. 4
(2) CONSULTATION AND COORDINATION.Not- 5
withstanding paragraph (1), the Securities and Ex- 6
change Commission shall consult and coordinate with 7
the Director with respect to any rule (including any 8
advance notice of proposed rulemaking) regarding an 9
investment product or service that is the same type of 10
product as, or that competes directly with, a con- 11
sumer financial product or service that is subject to 12
the jurisdiction of the Agency under this title or 13
under any other law. 14
(c) EXCLUSION FOR PERSONS REGULATED BY THE 15
COMMODITY FUTURES TRADING COMMISSION. 16
authority of the Commodity Futures Trading Com- 19
mission to adopt rules, initiate enforcement pro- 20
ceedings, or take any other action with respect to a 21
person regulated by the Commodity Futures Trading 22
Commission. The Director and the Agency shall have 23
no authority to exercise any power to enforce this title 24

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H.L.C.
with respect to a person regulated by the Commodity 1
Futures Trading Commission. 2
withstanding paragraph (1), the Commodity Futures 4
Trading Commission shall consult and coordinate 5
with the Director with respect to any rule (including 6
any advance notice of proposed rulemaking) regard- 7
ing a product or service that is the same type of prod- 8
uct as, or that competes directly with, a consumer fi- 9
nancial product or service that is subject to the juris- 10
diction of the Agency under this title or under any 11
other law. 12
(d) EXCLUSION FOR PERSONS REGULATED BY A 13
STATE INSURANCE REGULATOR. 14
authority of any State insurance regulator to adopt 17
rules, initiate enforcement proceedings, or take any 18
other action with respect to a person regulated by any 19
State insurance regulator. Except as provided in 20
paragraphs (2) and (3), the Agency shall have no au- 21
thority to exercise any power to enforce this title with 22
respect to a person regulated by any State insurance 23
regulator. 24

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(2) DESCRIPTION OF ACTIVITIES.Paragraph 1
(1) shall not apply to any person described in such 2
paragraph to the extent such person is engaged in 3
any financial activity described in any subparagraph 4
of section 101(19) or is otherwise subject to any of the 5
enumerated consumer laws or the authorities trans- 6
ferred under subtitle F or H. 7
(3) PRESERVATION OF CERTAIN AUTHORITIES. 8
Nothing in this title shall be construed as limiting the 9
authority of the Director and the Agency from exer- 10
cising powers under this Act with respect to the pro- 11
vision by a covered person of a product or service, not 12
otherwise subject to this Act, for or on behalf of a per- 13
son regulated by a State insurance regulator, in con- 14
nection with a financial activity. 15
(e) EXCLUSION FOR PERSONS REGULATED BY THE 16
FEDERAL HOUSING FINANCE AGENCY.No provision of 17
this title shall be construed as altering, amending, or affect- 18
ing the authority of the Federal Housing Finance Agency 19
to adopt rules, initiate enforcement proceedings, or take any 20
other action with respect to a person regulated by the Fed- 21
eral Housing Finance Agency. The Director and Agency 22
shall have no authority to exercise any power to enforce 23
this title with respect to a person regulated by the Federal 24
Housing Agency. For purposes of this subsection, the term 25

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person regulated by the Federal Housing Finance Agency 1
means any Federal home loan bank, and any joint office 2
of 1 or more Federal home loan banks. 3
(f) EXCLUSION FOR QUALIFIED RETIREMENT OR ELI- 4
GIBLE DEFERRED COMPENSATION PLANS AND ARRANGE- 5
MENTS. 6
authority of the Secretary of the Treasury, the Sec- 9
retary of Labor, or the Commissioner of Internal Rev- 10
enue to adopt regulations, initiate enforcement pro- 11
ceedings, or take any actions with respect to 12
(A) any retirement or eligible deferred com- 13
pensation plan or arrangement qualified under 14
or meeting the requirements of section 401(a), 15
403(a), 403(b), 457(b), 408 or 408A of the Inter- 16
nal Revenue Code; or 17
(B) any educational savings arrangement 18
under section 529 of such Code. 19
(2) LIMITATION ON AGENCY AUTHORITY. 20
(A) IN GENERAL.The Director and the 21
Agency may not exercise any power to enforce 22
this title with respect to services provided di- 23
rectly (or indirectly if the services relate to the 24
operation of such plan or arrangement) to 25

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(i) any retirement or eligible deferred 1
compensation plan or arrangement quali- 2
fied under or meeting the requirements of 3
section 401(a), 403(a), 403(b), 457(b), 408, 4
or 408A of the Internal Revenue Code; or 5
(ii) any educational savings arrange- 6
ment under section 529 of such Code. 7
(B) SERVICES DEFINED.For purposes sub- 8
paragraph (A), the term services shall include, 9
for example, services for custody and investment 10
of assets, administration, compliance, and par- 11
ticipant assistance. 12
(g) EXCLUSION FOR ACCOUNTANTS, TAX PREPARERS, 13
AND ATTORNEYS. 14
(1) IN GENERAL.Except as permitted in para- 15
graph (2), the Director and the Agency may not exer- 16
cise any rulemaking, supervisory, enforcement or 17
other authority, including authority to order assess- 18
ments, over 19
(A) any person that is a certified public ac- 20
countant, permitted to practice as a certified 21
public accounting firm, or certified or licensed 22
for such purpose by a State, or any individual 23
who is employed by or holds an ownership inter- 24
est with respect to a person described in this sub- 25

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paragraph when such person is performing or of- 1
fering to perform customary and usual account- 2
ing activities, including the provision of account- 3
ing, tax, advisory, other services that are subject 4
to the regulatory authority of a state board of ac- 5
countancy or a federal authority, or other serv- 6
ices that are incidental to such customary and 7
usual accounting activities, to the extent that 8
such incidental services are not offered or pro- 9
vided by the person separate and apart from 10
such customary and usual accounting activities 11
and are not offered or provided to consumers 12
who are not receiving such customary and usual 13
accounting activities; 14
(B) any person other than a person de- 15
scribed in subparagraph (A) that performs in- 16
come tax preparation activities for consumers; or 17
(C) any individual who is providing legal 18
advice or services for which a license to practice 19
law is required under the law of the State in 20
which the advice or services are provided and 21
which are performed within the scope of an at- 22
torney-client relationship established by an 23
agreement, but only to the extent of such legal 24
advice or services. 25

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(2) NO EXCLUSION WITH RESPECT TO REGISTRA- 1
TION OF MOST ATTORNEYS.Notwithstanding para- 2
graph (1), this subsection shall not apply to any au- 3
thority granted to the Director or the Agency under 4
section 129 with respect to a licensed attorney, except 5
to the extent a licensed attorney is solely providing 6
legal services in connection with 7
(A) the preparation and filing of a bank- 8
ruptcy petition; or 9
(B) court proceedings to avoid a foreclosure. 10
(1) shall not apply to 12
(A) any person described in paragraph 13
(1)(A) to the extent such person is engaged in 14
any activity which is not a customary and usual 15
accounting activity described in paragraph 16
(1)(A) or incidental thereto but which is a finan- 17
cial activity described in any subparagraph of 18
section 101(19); 19
(B) any person described in paragraph 20
(1)(B) or (1)(C) to the extent such person is en- 21
gaged in any activity which is a financial activ- 22
ity described in any subparagraph of section 23
101(19); or 24

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(C) any person described in paragraph 1
(1)(A), (1)(B) or (1)(C) that is otherwise subject 2
to any of the enumerated consumer laws or the 3
authorities transferred under subtitle F or H. 4
(h) EXCLUSION FOR REAL ESTATE LICENSEES. 5
ments, over a person that is licensed or registered as 10
a real estate broker, real estate agent, in accordance 11
with State law, but only to the extent that such per- 12
son 13
(A) acts as a real estate agent or broker for 14
a buyer, seller, lessor, or lessee of real property; 15
(B) brings together parties interested in the 16
sale, purchase, lease, rental, or exchange of real 17
property; 18
(C) negotiates, on behalf of any party, any 19
portion of a contract relating to the sale, pur- 20
chase, lease, rental, or exchange of real property 21
(other than in connection with providing financ- 22
ing with respect to any such transaction); 23
(D) engages in any activity for which a 24
person engaged in the activity is required to be 25

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registered or licensed as a real estate agent or 1
real estate broker under any applicable law; or 2
(E) offers to engage in any activity, or act 3
in any capacity, described in subparagraph (A), 4
(B), (C), or (D). 5
(i) EXCLUSION FOR AUTO DEALERS. 13
(1) IN GENERAL.The Director and the Agency 14
forcement or any other authority, including authority 16
to order assessments, over 17
(A) a motor vehicle dealer that is primarily 18
engaged in the sale and servicing of motor vehi- 19
cles, the leasing and servicing of motor vehicles, 20
or both; or 21
(B) a person that 22
(i) is controlled by, or is under com- 23
mon control with, one or more motor vehicle 24
dealers; and 25

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(ii) primarily engages in the extension 1
of, or arranging for the extension of, retail 2
credit or retail leases involving motor vehi- 3
cles, where 90 percent of such extension, or 4
arranging for such extension, is made with 5
respect to customers of one or more motor 6
vehicle dealers that control such person or 7
with which such person is under common 8
control. 9
(2) CERTAIN FUNCTIONS EXCEPTED.The provi- 10
sions of paragraph (1) shall not apply to any person 11
to the extent that person 12
(A) provides consumers with any services 13
related to residential mortgages; or 14
(B) operates a line of business that involves 15
the extension of retail credit or retail leases in- 16
volving motor vehicles, and in which 17
(i) the extension of retail credit or re- 18
tail leases is routinely provided directly to 19
consumers; and 20
(ii) the contract governing such exten- 21
sion of retail credit or retail leases is not 22
routinely assigned to a third party finance 23
or leasing source. 24

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(3) NO IMPACT ON PRIOR AUTHORITY.Nothing 1
in this subsection shall be construed to modify, limit, 2
or supersede the rulemaking or enforcement authority 3
over motor vehicle dealers that could be exercised by 4
any Federal department or agency on the day prior 5
to the enactment of this title. 6
(4) NO TRANSFER OF CERTAIN AUTHORITY. 7
Notwithstanding subtitle F or any other provision of 8
law under this title, the consumer financial protection 9
functions of the Board of Governors and the Federal 10
Trade Commission shall not be transferred to the Di- 11
rector or the Agency to the extent such functions are 12
with respect to a person described under paragraph 13
(1). 14
(5) DEFINITIONS.For purposes of this sub- 15
section: 16
(A) MOTOR VEHICLE.The term motor ve- 17
hicle means any self-propelled vehicle designed 18
for transporting persons or property on a street, 19
highway, or other road. 20
(B) MOTOR VEHICLE DEALER.The term 21
motor vehicle dealer means any person resi- 22
dent in the United States or any territory of the 23
United States, and licensed by a State, a terri- 24

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tory of the United States, or the District of Co- 1
lumbia to engage in the sale of motor vehicles. 2
(j) NO AUTHORITY TO IMPOSE USURY LIMIT.No 3
provision of this title shall be construed as conferring au- 4
thority on the Director or the Agency to establish a usury 5
limit applicable to an extension of credit offered or made 6
by a covered person to a consumer, unless explicitly author- 7
ized by law. 8
(k) EXCLUSION FOR MANUFACTURED HOME RETAIL- 9
ERS AND MODULAR HOME RETAILERS. 10
order assessments, over a person to the extent such 14
person 15
(A) acts as an agent or broker for a buyer 16
or seller of a manufactured home or a modular 17
home; 18
(B) facilitates the purchase by a consumer 19
of a manufactured home or modular home, by 20
negotiating the purchase price or terms of the 21
sales contract (other than providing financing 22
with respect to such transaction); or 23
(C) offers to engage in any activity de- 24
scribed in subparagraphs (A) or (B). 25

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section: 9
(A) MANUFACTURED HOME.The term 10
manufactured home has the meaning given 11
such term in section 603 of the National Manu- 12
factured Housing Construction and Safety 13
Standards Act of 1974 (42 U.S.C. 5402). 14
(B) MODULAR HOME.The term modular 15
home means a house built in a factory in two 16
or more modules that meet the State or local 17
building codes where the house will be located 18
and where such modules are transported to the 19
building site, installed on foundations, and com- 20
pleted. 21
SEC. 126. COLLECTION OF INFORMATION; CONFIDEN- 22
TIALITY REGULATIONS. 23
(a) COLLECTION OF INFORMATION. 24

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(1) IN GENERAL.In conducting research on the 1
provision of consumer financial products or services, 2
the Director shall have the power to gather informa- 3
tion from time to time regarding the organization, 4
business conduct, and practices of covered persons or 5
service providers. 6
(2) SPECIFIC AUTHORITY.In order to gather 7
such information, the Director shall have the power 8
(A) to gather and compile information; 9
(B) to require persons to file with the Agen- 10
cy, in such form and within such reasonable pe- 11
riod of time as the Director may prescribe, by 12
regulation or order, annual or special reports, or 13
answers in writing to specific questions, fur- 14
nishing information the Director may require; 15
and 16
(C) to make public such information ob- 17
tained by it under this section as is in the public 18
interest in reports or otherwise in the manner 19
best suited for public information and use. 20
(b) CONFIDENTIALITY REGULATIONS.The Director 21
shall prescribe regulations regarding the confidential treat- 22
ment of information obtained from persons in connection 23
with the exercise of any authority of the Agency or Director 24

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under this title and the enumerated consumer laws and the 1
authorities transferred under subtitles F and H. 2
(c) PRIVACY CONSIDERATIONS.In collecting informa- 3
tion from any person, publicly releasing information held 4
by the Agency, or requiring covered persons to publicly re- 5
port information, the Director and the Agency shall take 6
steps to ensure that proprietary, personal or confidential 7
consumer information that are protected from public disclo- 8
sure under section 552(b) or 552a of title 5, United States 9
Code, or any other provision of law are not made public 10
under this title. 11
SEC. 127. MONITORING; ASSESSMENTS OF SIGNIFICANT 12
REGULATIONS; REPORTS. 13
(a) MONITORING. 14
(1) IN GENERAL.The Agency shall monitor for 15
risks to consumers in the provision of consumer fi- 16
nancial products or services, including developments 17
in markets for such products or services. 18
(2) MEANS OF MONITORING.Such monitoring 19
may be conducted by examinations of covered persons 20
or service providers, analysis of reports obtained from 21
covered persons or service providers, assessment of 22
consumer complaints, surveys and interviews of cov- 23
ered persons, service providers, and consumers, and 24
review of available databases. 25

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(3) CONSIDERATIONS.In allocating the re- 1
sources of the Agency to perform the monitoring re- 2
quired by this section, the Director may consider, 3
among other factors 4
(A) likely risks and costs to consumers asso- 5
ciated with buying or using a type of consumer 6
financial product or service; 7
(B) consumers understanding of the risks of 8
a type of consumer financial product or service; 9
(C) the state of the law that applies to the 10
provision of a consumer financial product or 11
service, including the extent to which the law is 12
likely to adequately protect consumers; 13
(D) rates of growth in the provision of a 14
consumer financial product or service; 15
(E) extent, if any, to which the risks of a 16
consumer financial product or service may dis- 17
proportionately affect traditionally underserved 18
consumers, if any; or 19
(F) types, number, and other pertinent 20
characteristics of covered persons that provide 21
the product or service. 22
(4) REPORTS.The Agency shall publish at least 23
1 report of significant findings of the monitoring re- 24
quired by paragraph (1) in each calendar year, be- 25

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ginning in the calendar year that is 1 year after the 1
designated transfer date. 2
(b) ASSESSMENT OF SIGNIFICANT REGULATIONS. 3
(1) IN GENERAL.The Agency shall conduct an 4
assessment of each significant regulation prescribed or 5
order issued by the Director under this title, under 6
pursuant to any enumerated consumer law that ad- 8
dresses, among other relevant factors, the effectiveness 9
of the regulation in meeting the purposes and objec- 10
tives of this Act and the specific goals stated by the 11
Director. 12
(2) BASIS FOR ASSESSMENT.The assessment 13
shall reflect available evidence and any data that the 14
Agency reasonably may collect. 15
(3) REPORTS.The Agency shall publish a re- 16
port of an assessment under this subsection not later 17
than 3 years after the effective date of the regulation 18
or order, unless the Director determines that 3 years 19
is not sufficient time to study or review the impact 20
of the regulation, but in no event shall the Agency 21
publish a report of such assessment more than 5 years 22
after the effective date of the regulation or order. 23
(4) PUBLIC COMMENTED REQUIRED.Before 24
publishing a report of its assessment, the Agency shall 25

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invite, with sufficient time allotted, public comment 1
on, and may hold public hearings on, recommenda- 2
tions for modifying, expanding, or eliminating the 3
newly adopted significant regulation or order. 4
(c) INFORMATION GATHERING.In conducting any 5
monitoring or assessment required by this section, the Agen- 6
cy may gather information through a variety of methods, 7
including by conducting surveys or interviews of consumers. 8
SEC. 128. AUTHORITY TO RESTRICT MANDATORY 9
PREDISPUTE ARBITRATION. 10
(a) IN GENERAL.The Director, by regulation, may 11
prohibit or impose conditions or limitations on the use of 12
any agreement between a covered person and a consumer 13
for a consumer financial product or service providing for 14
arbitration of any future dispute between the parties if the 15
Director finds that such a prohibition or imposition of con- 16
ditions or limitations are in the public interest and for the 17
protection of consumers. 18
(b) EFFECTIVE DATE.Notwithstanding any other 19
provision of law, any regulation prescribed by the Director 20
under subsection (a) shall apply, consistent with the terms 21
of the regulation, to any agreement between a consumer and 22
a covered person entered into after the end of the 180-day 23
period beginning on the effective date of the regulation, as 24
established by the Director. 25

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SEC. 129. REGISTRATION AND SUPERVISION OF NON- 1
DEPOSITORY COVERED PERSONS. 2
(a) RISK-BASED PROGRAMS. 3
(1) IN GENERAL.The Agency shall develop risk- 4
based programs to supervise covered persons that are 5
not credit unions, depository institutions, or persons 6
excluded under section 125 by prescribing registration 7
requirements, reporting requirements, and examina- 8
tion standards and procedures. 9
(2) BASIS FOR PROGRAMS.The risk-based su- 10
pervisory programs established pursuant to para- 11
graph (1) shall be based on 12
(A) relevant registration and reporting in- 13
formation about such covered persons, as deter- 14
mined by the Agency; and 15
(B) the Agencys assessment of risks posed 16
to consumers in the relevant geographic markets 17
and markets for consumer financial products 18
and services. 19
(b) REGISTRATION. 20
(1) IN GENERAL.The Director shall prescribe 21
regulations regarding registration requirements for 22
covered persons that are not credit unions or deposi- 23
tory institutions. 24
(2) CONSULTATION WITH STATE AGENCIES.In 25
developing and implementing registration require- 26

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ments under this subsection, the Agency shall consult 1
with State agencies regarding requirements or sys- 2
tems for registration (including coordinated or com- 3
bined systems), where appropriate. 4
(3) EXCEPTION FOR RELATED PERSONS.The 5
Agency shall not impose requirements regarding the 6
registration of a related person. 7
(4) REGISTRATION INFORMATION.Subject to 8
regulations prescribed by the Director, the Agency 9
shall publicly disclose the registration information 10
about a covered person which is not a bank holding 11
company, credit union, or depository institution for 12
the purposes of facilitating the ability of consumers to 13
identify the covered person as registered with the 14
Agency. 15
(c) REPORTING REQUIREMENTS. 16
(1) IN GENERAL.The Agency may require re- 17
ports from covered persons that are not credit unions 18
or depository institutions, or service providers thereto, 19
for the purposes of facilitating supervision of such 20
covered persons or service providers. 21
(2) CONSISTENCY OF REPORTING REQUIREMENTS 22
AND RISK-BASED STANDARDS.The Agency shall im- 23
pose reporting requirements under this subsection that 24
are consistent with the risk-based standards developed 25

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and implemented under this section and the registra- 1
tion information pertaining to the relevant types or 2
classes of covered persons. 3
(3) CONTENTS OF REPORTS.Reporting require- 4
ments imposed under this paragraph may include in- 5
formation regarding 6
(A) the nature of the covered persons busi- 7
ness; 8
(B) the covered persons name, legal form, 9
ownership and management structure, and re- 10
lated persons; 11
(C) the covered persons locations of oper- 12
ation; 13
(D) the covered persons types and number 14
of consumer financial products and services pro- 15
vided by the covered person; 16
(E) compliance with any requirement im- 17
posed or enforced by the Agency, including any 18
requirement relating to registration, licensing, 19
fees, or assessments; and 20
(F) the financial condition of such covered 21
person, including a related person, for the pur- 22
pose of assessing the ability of such person to 23
perform its obligation to consumers. 24

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(4) EXCEPTION FOR RELATED PERSONS.Other 1
than reports permitted under paragraph (3)(F) or in 2
connection with a supervisory action or examination 3
or pursuant to the powers granted in subtitle E, the 4
Agency shall not impose requirements regarding re- 5
ports of any related person. 6
(d) EXAMINATIONS. 7
(1) EXAMINATIONS REQUIRED.The Agency 8
shall conduct examinations of covered persons that 9
are not credit unions or depository institutions as 10
part of the programs implemented under paragraphs 11
(2) and (3) of section 122(c). 12
(2) EXAMINATION STANDARDS AND PROCE- 13
DURES.The Director shall establish risk-based 14
standards and procedures for conducting examina- 15
tions of covered persons required to be examined 16
under paragraph (1), including the frequency and 17
scope of such examinations, except that the Agency 18
shall conduct examinations of such covered persons 19
that are determined to pose the highest risk to con- 20
sumers based on factors determined by the Director, 21
such as the operations, sales practices, or consumer fi- 22
nancial products or services provided by such covered 23
persons. 24

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(e) AUTHORITY TO COLLECT INFORMATION REGARD- 1
ING FEES OR ASSESSMENTS.To the extent permitted by 2
Federal law, the Agency may obtain from the Secretary of 3
the Treasury information relating to a covered person 4
which is not a bank holding company, credit union, or de- 5
pository institution, including information regarding com- 6
pliance with a reporting or registration requirement under 7
the subchapter II of chapter 53 of title 31, United States 8
Code, for the purposes of, and only to the extent necessary 9
in, investigating, determining, or enforcing compliance 10
with a requirement relating to any fee or assessment im- 11
posed by the Agency under this title. 12
SEC. 130. EFFECTIVE DATE. 13
This subtitle shall take effect on the designated transfer 14
date. 15
Subtitle CSpecific Authorities 16
SEC. 131. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE 17
ACTS OR PRACTICES. 18
(a) IN GENERAL.The Agency may take any action 19
authorized under subtitle E to prevent a person from com- 20
mitting or engaging in an unfair, deceptive, or abusive act 21
or practice under Federal law in connection with any 22
transaction with a consumer for a consumer financial prod- 23
uct or service, or the offering of a consumer financial prod- 24
uct or service. 25

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(b) REGULATIONS. 1
regulations identifying as unlawful unfair, deceptive, 3
or abusive acts or practices in connection with any 4
transaction with a consumer for a consumer financial 5
product or service or the offering of a consumer finan- 6
cial product or service. 7
(2) INCLUDES PREVENTION MEASURES.Regula- 8
tions prescribed under this section may include re- 9
quirements for the purpose of preventing such acts or 10
practices. 11
(c) UNFAIRNESS. 12
shall have no authority under this section to declare 14
an act or practice in connection with a transaction 15
with a consumer for a consumer financial product or 16
service, or the offering of a consumer financial prod- 17
uct or service, to be unlawful on the grounds that such 18
act or practice is unfair unless the Agency has a rea- 19
sonable basis to conclude that the act or practice 20
causes or is likely to cause substantial injury to con- 21
sumers which is not reasonably avoidable by con- 22
sumers and such substantial injury is not outweighed 23
by countervailing benefits to consumers or to competi- 24
tion. 25

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(2) ESTABLISHED PUBLIC POLICY AS FACTOR. 1
In determining whether an act or practice is unfair, 2
the Agency may consider established public policies as 3
evidence to be considered with all other evidence. 4
(d) CONSULTATION.In prescribing any regulation 5
under this section, the Director shall consult with the Fed- 6
eral banking agencies, State bank supervisors, the Federal 7
Trade Commission, or other Federal agencies, as appro- 8
priate, regarding the consistency of a proposed regulation 9
with prudential, consumer protection, civil rights, market, 10
or systemic objectives administered by such agencies or su- 11
pervisors. 12
SEC. 132. DISCLOSURES. 13
(a) IN GENERAL.The Director may prescribe regula- 14
tions to ensure the timely, appropriate and effective disclo- 15
sure to consumers of the costs, benefits, and risks associated 16
with any consumer financial product or service. 17
(b) COORDINATION WITH OTHER LAWS.In pre- 18
scribing regulations under subsection (a), the Director shall 19
take into account disclosure requirements under other laws 20
in order to enhance consumer compliance and reduce regu- 21
latory burden. 22
(c) COMPLIANCE. 23
(1) MODEL DISCLOSURES.The Agency may 24
provide model disclosures to facilitate compliance 25

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with the requirements of regulations prescribed under 1
this section. 2
(2) PER SE COMPLIANCE.Compliance by a cov- 3
ered person with the model disclosures issued by the 4
Agency under this subsection shall per se constitute 5
compliance with the disclosure requirements of this 6
section. 7
(3) ADDITIONAL GUIDANCE.The Agency may 8
issue exemptions, no action letters, and other guid- 9
ance to promote compliance with disclosures require- 10
ments of regulations prescribed under this section. 11
(d) COMBINED MORTGAGE LOAN DISCLOSURE.With- 12
in 1 year after the designated transfer date, the Director 13
shall propose for public comment regulations and model dis- 14
closures that combine the disclosures required under the 15
Truth in Lending Act and the Real Estate Settlement Pro- 16
cedures Act into a single, integrated disclosure for mortgage 17
loan transactions covered by those laws, unless the Director 18
determines that any proposal issued by the Board of Gov- 19
ernors and the Department of Housing and Urban Develop- 20
ment carries out the same purpose. 21
SEC. 133. SALES PRACTICES. 22
The Director may prescribe regulations and issue or- 23
ders and guidance regarding the manner, settings, and cir- 24
cumstances for the provision of any consumer financial 25

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products or services to ensure that the risks, costs, and bene- 1
fits of the products or services, both initially and over the 2
term of the products or services, are fully and accurately 3
represented to consumers. 4
SEC. 134. PILOT DISCLOSURES. 5
(a) PILOT DISCLOSURES.The Agency shall establish 6
standards and procedures for approval of pilot disclosures 7
to be provided or made available by a covered person to 8
consumers in connection with the provision of a consumer 9
financial product or service, or the offering of a consumer 10
financial product or service. 11
(b) STANDARDS.The procedures shall provide that a 12
pilot disclosure must be limited in time and scope and rea- 13
sonably designed to contribute materially to the under- 14
standing of consumer awareness and understanding of, and 15
responses to, disclosures or communications about the risks, 16
costs, and benefits of consumer financial products or serv- 17
ices. 18
(c) TRANSPARENCY.The procedures shall provide for 19
public disclosure of pilots, but the Agency may limit disclo- 20
sure to the extent necessary to encourage covered persons 21
to conduct effective pilots. 22

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SEC. 135. ADOPTING OPERATIONAL STANDARDS TO DETER 1
UNFAIR, DECEPTIVE, OR ABUSIVE PRACTICES. 2
(a) AUTHORITY TO PRESCRIBE STANDARDS.The 3
States are encouraged to prescribe standards applicable to 4
covered persons who are not insured depository institutions 5
or credit unions, or service providers, to deter and detect 6
unfair, deceptive, abusive, fraudulent, or illegal trans- 7
actions in the provision of consumer financial products or 8
services, including standards for 9
(1) background checks for principals, officers, di- 10
rectors, or key personnel; 11
(2) registration, licensing, or certification; 12
(3) bond or other appropriate financial require- 13
ments to provide reasonable assurance of ability to 14
perform its obligations to consumers; 15
(4) creating and maintaining records of trans- 16
actions or accounts; or 17
(5) procedures and operations relating to the 18
provision of, or maintenance of accounts for, con- 19
sumer financial products or services. 20
(b) AGENCY AUTHORITY TO PRESCRIBE STAND- 21
ARDS. 22
regulations establishing minimum standards under 24
this section for any class of covered persons other than 25
covered persons which are subject to the jurisdiction 26

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of a Federal banking agency or a State bank super- 1
visor , or for any service provider. 2
(2) REGISTRATION AND LICENSING STAND- 3
ARDS.In addition to prescribing standards for the 4
purposes described in subsection (a), the Director may 5
prescribe registration or licensing standards applica- 6
ble to covered persons for the purposes of imposing 7
fees or assessments in accordance with this title. 8
(3) ENFORCEMENT OF STANDARDS. The Direc- 9
tor may enforce under subtitle E compliance with 10
standards adopted by the Director or a State pursu- 11
ant to this section for covered persons or service pro- 12
viders operating in that State. 13
(c) CONSULTATION.In prescribing minimum stand- 14
ards under this section, the Director shall consult with the 15
Federal banking agencies, State bank supervisors, the Fed- 16
eral Trade Commission, or other Federal agencies, as ap- 17
propriate, regarding the consistency of a proposed regula- 18
tion with prudential, consumer protection, civil rights, 19
market, or systemic objectives administered by such agencies 20
or supervisors. 21
SEC. 136. DUTIES. 22
(a) IN GENERAL. 23
(1) REGULATIONS ENSURING FAIR DEALING 24
WITH CONSUMERS.The Director shall prescribe reg- 25

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ulations imposing duties on a covered person, or an 1
employee of a covered person, or an agent or inde- 2
pendent contractor for a covered person, who deals or 3
communicates directly with consumers in the provi- 4
sion of a consumer financial product or service, as the 5
Director deems appropriate or necessary to ensure 6
fair dealing with consumers. 7
(2) CONSIDERATIONS FOR DUTIES.In pre- 8
scribing such regulations, the Director shall consider 9
whether 10
(A) the covered person, employee, agent, or 11
independent contractor represents implicitly or 12
explicitly that the person, employee, agent, or 13
contractor is acting in the interest of the con- 14
sumer with respect to any aspect of the trans- 15
action; 16
(B) the covered person, employee, agent, or 17
independent contractor provides the consumer 18
with advice with respect to any aspect of the 19
transaction; 20
(C) the consumers reliance on or use of any 21
advice from the covered person, employee, agent, 22
or independent contractor would be reasonable 23
and justifiable under the circumstances; 24

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(D) the benefits to consumers of imposing a 1
particular duty would outweigh the costs; and 2
(E) any other factors as the Director con- 3
siders appropriate. 4
(3) DUTIES RELATING TO COMPENSATION PRAC- 5
TICES. 6
(A) IN GENERAL.The Director may pre- 7
scribe regulations establishing duties regarding 8
compensation practices applicable to a covered 9
person, employee, agent, or independent con- 10
tractor who deals or communicates directly with 11
a consumer in the provision of a consumer fi- 12
nancial product or service for the purpose of pro- 13
moting fair dealing with consumers. 14
(B) NO COMPENSATION CAPS.The Director 15
may not prescribe a limit on the total dollar 16
amount of compensation paid to any person. 17
(C) DISPARITY TREATMENT PROHIBITED. 18
The Director may not prescribe regulations that 19
directly or indirectly disparately treat, or are 20
interpreted to disparately treat, or disparately 21
impact any entity that employs covered persons. 22
(4) REQUIREMENT TO INCLUDE DISCLAIMER ON 23
PUBLIC STATEMENTS.The Director shall ensure that 24
the Agencys website, and any statement made by the 25

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Director or the Agency to the public, includes a dis- 1
claimer stating that the Agency does not endorse any 2
particular financial product or service and consumers 3
are expected to exercise due diligence in deciding 4
what financial products and services are appropriate 5
for them. 6
(b) ADMINISTRATIVE PROCEEDINGS. 7
(1) IN GENERAL.Any regulation prescribed by 8
the Director under this section shall be enforceable 9
only by the Agency through an adjudication pro- 10
ceeding under subtitle E or by a State regulator 11
through an appropriate administrative proceeding as 12
permitted under State law. 13
(2) EXCLUSIVITY OF REMEDY.No action may 14
be commenced in any court to enforce any require- 15
ment of a regulation prescribed under this section, 16
and no court may exercise supplemental jurisdiction 17
over a claim asserted under a regulation prescribed 18
under this section based on allegations or evidence of 19
conduct that otherwise may be subject to such regula- 20
tion. 21
(3) RULE OF CONSTRUCTION.The Agency, the 22
Attorney General, and any State attorney general or 23
State regulator shall not be precluded from enforcing 24
any other Federal or State law against a person with 25

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respect to conduct that may be subject to a regulation 1
prescribed by the Director under this section. 2
(c) EXCLUSIONS.This section shall not be construed 3
as authorizing the Director to prescribe regulations applica- 4
ble to 5
(1) an attorney licensed to practice law and in 6
compliance with the applicable rules and standards of 7
professional conduct, but only to the extent that the 8
consumer financial product or service provided is 9
within the attorney-client relationship with the con- 10
sumer; or 11
(2) any trustee, custodian, or other person that 12
holds a fiduciary duty in connection with a trust, in- 13
cluding a fiduciary duty to a grantor or beneficiary 14
of a trust, that is subject to and in compliance with 15
the applicable law relating to such trust. 16
SEC. 137. CONSUMER RIGHTS TO ACCESS INFORMATION. 17
(a) IN GENERAL.Subject to regulations prescribed by 18
the Director, a covered person shall make available to a con- 19
sumer, in an electronic form usable by the consumer, infor- 20
mation in the control or possession of the covered person 21
concerning the consumer financial product or service that 22
the consumer obtained from such covered person including 23
information relating to any transaction, series of trans- 24

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actions, or to the account including costs, charges and usage 1
data. 2
(b) EXCEPTIONS.A covered person shall not be re- 3
quired by this section to make available to the consumer 4
(1) any confidential commercial information, in- 5
cluding an algorithm used to derive credit scores or 6
other risk scores or predictors; 7
(2) any information collected by the covered per- 8
son for the purpose of preventing fraud or money 9
laundering, or detecting, or making any report re- 10
garding other unlawful or potentially unlawful con- 11
duct; 12
(3) any information required to be kept con- 13
fidential by any other law (including section 6103 of 14
the Internal Revenue Code of 1986); or 15
(4) any information that the covered person can- 16
not retrieve in the ordinary course of its business with 17
respect to that information. 18
(c) NO DUTY TO MAINTAIN RECORDS.No provision 19
of this section shall be construed as imposing any duty on 20
a covered person to maintain or keep any information 21
about a consumer. 22
(d) STANDARDIZED FORMATS FOR DATA.The Direc- 23
tor, by regulation, shall prescribe standards applicable to 24
covered persons to promote the development and use of 25

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standardized formats for information, including through 1
the use of machine readable files, to be made available to 2
consumers under this section. 3
(e) CONSULTATION.The Director shall, when pre- 4
scribing any regulation under this section, consult with the 5
eral Trade Commission, and the Commissioner of Internal 7
Revenue to ensure that the regulations 8
(1) impose substantively similar requirements on 9
covered persons; 10
(2) take into account conditions under which 11
covered persons do business both in the United States 12
and in other countries; and 13
(3) do not require or promote the use of any par- 14
ticular technology in order to develop systems for 15
compliance. 16
SEC. 138. PROHIBITED ACTS. 17
It shall be unlawful for any person 18
(1) to advertise, market, offer, sell, enforce, or at- 19
tempt to enforce, any term, agreement, change in 20
terms, fee, or charge in connection with a consumer 21
financial product or service that is not in conformity 22
with this title or applicable regulation prescribed or 23
order issued by the Director or to engage in any un- 24
fair, deceptive, or abusive act or practice, except that 25

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no person shall be held to have violated this subsection 1
solely by virtue of providing or selling time or space 2
to a person placing an advertisement; 3
(2) to fail or refuse to pay any fee or assessment 4
imposed by the Agency under this title, to fail or 5
refuse to permit access to or copying of records, to fail 6
or refuse to establish or maintain records, or to fail 7
or refuse to make reports or provide information to 8
the Agency, as required by this title, an enumerated 9
consumer law, or pursuant to the authorities trans- 10
ferred by subtitles F and H, or any regulation pre- 11
scribed or order issued by the Director this title or 12
pursuant to any such authority; or 13
(3) to knowingly or recklessly provide substantial 14
assistance to another person in violation of the provi- 15
sions of section 131, or any regulation prescribed or 16
order issued under such section, and any such person 17
shall be deemed to be in violation of that section to 18
the same extent as the person to whom such assistance 19
is provided. 20
SEC. 139. TREATMENT OF REMITTANCE TRANSFERS. 21
(a) DISCLOSURES REQUIRED FOR REMITTANCE 22
TRANSFERS. 23
(1) IN GENERAL.Each remittance transfer pro- 24
vider shall make disclosures to consumers, as specified 25

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by this section and by regulation prescribed by the 1
Director. 2
(2) SPECIFIC DISCLOSURES.In addition to any 3
other disclosures applicable under this title, a remit- 4
tance transfer provider shall 5
(A) disclose clearly and conspicuously, in 6
writing and in a form that the consumer may 7
keep, to each consumer who requests information 8
regarding the fees or exchange rate for a remit- 9
tance transfer, prior to the consumer making 10
any payment in connection with the transfer 11
(i) the total amount in United States 12
dollars that will be required to be paid by 13
the consumer in connection with the remit- 14
tance transfer; 15
(ii) the amount of currency that the 16
designated recipient of the remittance trans- 17
fer will receive, using the values of the cur- 18
rency into which the funds will be ex- 19
changed; 20
(iii) the fee charged by the remittance 21
transfer provider for the remittance trans- 22
fer; 23
(iv) any exchange rate to be used by 24
the remittance transfer provider for the re- 25

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mittance transfer, unless the exchange rate 1
is not fixed on send; 2
(v) the amount of time for which the 3
information specified in this subparagraph 4
(A) will be in effect; 5
(vi) the expected time interval within 6
which the funds being transferred will be 7
made available to the recipient; and 8
(vii) the location where the funds being 9
transferred will be made available to the re- 10
cipient if the funds are to be made available 11
only at one location, or if the remittance 12
transfer provider permits the recipient to 13
choose from multiple locations where the 14
funds being transferred will be made avail- 15
able to the recipient, the remittance transfer 16
provider shall make available to the con- 17
sumer or the recipient a resource that lists 18
such locations; 19
(B) at the time at which the consumer 20
makes payment in connection with the remit- 21
tance transfer, a receipt in writing disclosing 22
clearly and conspicuously 23
(i) the information described in sub- 24
paragraph (A); 25

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(ii) the expected time interval within 1
made available to the recipient, which shall 3
be not more than ten days after the date the 4
consumer makes payment in connection 5
with the remittance transfer unless other- 6
wise prohibited by applicable State or Fed- 7
eral law or the law of another country, or 8
as may be specified by the consumer so long 9
as the consumer has the choice to order that 10
the funds be made available to the recipient 11
not more than ten days after the consumer 12
makes payment in connection with the re- 13
mittance transfer; 14
(iii) the location where the funds being 15
such locations; 25

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(iv) the name and telephone number or 1
address of the designated recipient, if pro- 2
vided to the remittance transfer provider by 3
the consumer; 4
(v) information about the rights of the 5
consumer under this section to cancel the re- 6
mittance transfer, to resolve errors and to 7
receive refunds; 8
(vi) appropriate contact information 9
for the remittance transfer provider; 10
(vii) a transaction reference number 11
unique to that remittance transfer; and 12
(viii) information as to when the ex- 13
change rate will be calculated (for example, 14
when the funds are received by the recipi- 15
ent), if the customer has been notified that 16
the exchange rate is not fixed on send; 17
(C) at the time at which the consumer initi- 18
ates the remittance transfer, offer to provide in 19
writing, prior to making any payment in con- 20
nection with the transfer, the information listed 21
in subparagraph (A); and 22
(D) in the case of an exchange rate not 23
fixed on send, the remittance provider shall also 24
disclose, at the time at which the consumer initi- 25

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ates the remittance transfer, the range, using the 1
high and low rates, for the prior 30 day period, 2
that the consumer would have received if a rep- 3
resentative amount had been exchanged by the 4
remittance transfer provider, as well as a clear 5
and conspicuous notice that the actual exchange 6
rate may vary. 7
If the actual rate used for the transfer is known to 8
the remittance provider, either because such rate was 9
set by the remittance provider itself or because the re- 10
mittance provider receives confirmation of the actual 11
exchange rate used, the remittance provider shall 12
make available to consumers written or electronic 13
confirmation of the actual exchange rate used and the 14
amount of currency that the recipient or the remit- 15
tance transfer received, using the values of the cur- 16
rency into which the funds were exchanged. The Di- 17
rector shall within 2 years after the date of the enact- 18
ment of the Consumer Financial Protection Agency 19
Act of 2009 prescribe consumer disclosures for trans- 20
fers with rates not fixed on send that are functionally 21
equivalent to those applicable to remittances where 22
the exchange rate is specified by the remittance trans- 23
fer provider at the time the consumer initiates the re- 24
mittance transfer. To the greatest extent possible, the 25

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Director shall ensure that functional equivalence will 1
enable remittance transfer providers to comply with 2
all requirements in this Act and provide consumers 3
with information sufficient to compare services pro- 4
viders, to time their use of the product, to discover er- 5
rors in transmission and to seek remedies. 6
(3) EXEMPTION.Notwithstanding requirements 7
under paragraph (2)(A)(ii), (2)(A)(iv), or (2)(B)(i), 8
no such disclosure is required 9
(A) because of the requirements of another 10
law, including the law of another country; 11
(B) because the transfer is being routed 12
through the Directo a Me xico offered by the Fed- 13
eral reserve banks; or 14
(C) because of any other circumstance 15
deemed permissible by regulation of the Director; 16
If the actual rate used for the transfer is known 17
to the remittance provider, the remittance pro- 18
vider shall make available to consumers written 19
or electronic confirmation of the actual exchange 20
rate used and the amount of currency that the 21
recipient of the remittance transfer received, 22
using the values of the currency into which the 23
funds were exchanged. 24

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(4) PROVISION OF TOLL-FREE NUMBER AND WEB 1
ACCESS. 2
(A) In addition to providing the disclosures 3
required by this section to a consumer at a re- 4
mittance transfer provider location, a remittance 5
transfer provider shall provide a toll-free tele- 6
phone number or local number, and an Internet 7
website that a consumer can access for which ac- 8
cess no remittance transfer provider may assess 9
a charge, to obtain the information required by 10
paragraph (2)(A) for remittance transfers offered 11
by that remittance transfer provider or informa- 12
tion about the status of a remittance transfer for 13
which a consumer has made payment. 14
(B) A remittance transfer provider that on 15
an aggregate basis originates 30,000 or fewer 16
transfers on a calendar year basis (or such other 17
amount as may be prescribed by the Director) is 18
not required to offer the web access prescribed in 19
subparagraph (A), but is required to provide a 20
toll-free telephone number or local number as 21
prescribed in subparagraph (A). 22
(5) ALTERNATIVE METHODS OF DISCLOSURE. 23
Subject to subsection (e)(2), a remittance transfer pro- 24
vider may 25

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(A) if the transaction is conducted entirely 1
by telephone (which shall include, but not be lim- 2
ited to, a mobile telephone) satisfy the require- 3
ments of paragraph (2)(A) orally or, at the op- 4
tion of the consumer, electronically through a 5
message sent to the consumer through any elec- 6
tronic means (including, but not limited to, an 7
electronic mail address or a mobile telephone) as 8
designated by the consumer; 9
(B) satisfy the requirements of paragraph 10
(2)(A) electronically if the transfer is initiated 11
by the consumer electronically through the remit- 12
tance transfer providers website or through any 13
other electronic means; and 14
(C) satisfy the requirements of paragraph 15
(2)(B) by mailing (or transmitting electronically 16
if the transfer is initiated electronically by the 17
consumer through the remittance transfer pro- 18
viders website or the consumer otherwise con- 19
sents in accordance with the provisions of section 20
101 of the Electronic Signatures in Global and 21
National Commerce Act) the information re- 22
quired under such paragraph to the consumer 23
not later than one business day after the date on 24
which the transaction is conducted, if the trans- 25

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action is conducted entirely by telephone (or elec- 1
tronically) and the consumer requests a written 2
receipt. 3
(b) WRITTEN FOREIGN LANGUAGE DISCLOSURES. 4
(1) IN GENERAL.The disclosures required 5
under subsections (a)(2)(A) and (a)(2)(B)(i) shall be 6
made in English and 7
(A) at each remittance transfer provider lo- 8
cation, shall be made in the same languages 9
principally used by the remittance transfer pro- 10
vider, or any of its agents, to advertise, solicit, 11
or market its remittance transfers business, ei- 12
ther orally or in writing, at that location, if 13
other than English, provided that such languages 14
are those for which the Director has issued model 15
disclosures as provided in subsection (g); or 16
(B) on a remittance transfer providers 17
website, shall at a minimum be made in any 18
other language for which the Director has issued 19
model disclosures as provided in subsection (g) if 20
the remittance transfer provider, or any of its 21
agents, advertises, solicits, or markets its remit- 22
tance transfers business in such language. 23
(2) DISPUTES CONCERNING TERMS.If a disclo- 24
sure is required by this section to be in English and 25

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another language, the English version of the disclosure 1
shall govern any dispute concerning the terms of the 2
receipt. However, any discrepancies between the 3
English version and any other version due to the 4
translation of the receipt from English to another lan- 5
guage including errors or ambiguities shall be con- 6
strued against the remittance transfer provider or its 7
agent and the remittance transfer provider or its 8
agent shall be liable for any damages caused by these 9
discrepancies. 10
(c) REMITTANCE TRANSFER CANCELLATIONS, RE- 11
FUNDS, AND ERRORS. 12
(1) CANCELLATIONS. 13
(A) After receiving the receipt required 14
under subsection (a)(2)(B), a consumer may 15
cancel the currency transaction 16
(i) before leaving the premises of the 17
remittance transfer provider where the con- 18
sumer received the receipt, and 19
(ii) not later than 30 minutes after the 20
time the consumer initiated the remittance 21
transfer with the remittance transfer pro- 22
vider. 23
(B) If a consumer cancels the transaction, 24
the remittance transfer provider shall imme- 25

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diately refund to the consumer the fees paid and 1
the currency to be transferred, and issue a re- 2
ceipt indicating that the transaction has been 3
cancelled. 4
(C) A consumer may not cancel a remit- 5
tance transfer after the remittance transfer pro- 6
vider has sent the funds to the recipient. 7
(D) A remittance transfer provider shall not 8
be required to provide a refund if providing a re- 9
fund would violate State or Federal law. 10
(2) REFUNDS. 11
(A) If a remittance transfer provider re- 12
ceives written notice from the consumer within 13
ten days of the promised date of delivery of a re- 14
mittance transfer that no amount of the funds to 15
be remitted was made available to the designated 16
recipient in the foreign country, the remittance 17
transfer provider shall 18
(i) refund to the consumer the total 19
amount in U.S. dollars that was paid by 20
the consumer in connection with such re- 21
(ii) promptly transmit the remittance 23
transfer in accordance with the terms in the 24

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written receipt provided to the consumer 1
pursuant to subsection (a)(2)(B); 2
(iii) provide such other remedy, as de- 3
termined appropriate by rule of the Direc- 4
tor for the protection of consumers; or 5
(iv) demonstrate to the consumer that 6
the proceeds of the remittance transfer were 7
made available to the recipient of the remit- 8
tance provider. 9
(B) A remittance transfer provider shall not 10
(3) ERROR RESOLUTION. 13
(A) IN GENERAL.If a remittance transfer 14
provider receives written notice from the con- 15
sumer within 60 days of the promised date of de- 16
livery that an error occurred with respect to a 17
remittance transfer, including that the full 18
amount of the funds to be remitted was not made 19
available to the designated recipient in the for- 20
eign country, the remittance transfer provider 21
shall resolve the error pursuant to this para- 22
graph. 23
(B) REMEDIES.Not later than 120 days 24
after the date of receipt of a notice from the con- 25

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sumer pursuant to subparagraph (A), the remit- 1
(i) as applicable to the error and as 3
designated by the consumer 4
(I) refund to the consumer the 5
total amount in U.S. dollars that was 6
paid by the consumer in connection 7
with the remittance transfer that was 8
not properly transmitted; 9
(II) make available to the des- 10
ignated recipient, without additional 11
cost to the designated recipient or to 12
the consumer, the amount appropriate 13
to resolve the error; 14
(III) provide such other remedy, 15
as determined appropriate by regula- 16
tion of the Director for the protection 17
of consumers; or 18
(ii) demonstrate to the consumer that 19
there was no error. 20
(4) REGULATIONS.The Director, in order to 21
protect consumers, shall establish, by regulation, clear 22
and appropriate standards for remittance transfer 23
providers with respect to error resolution, cancellation 24
and refunds. 25

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(d) ENFORCEMENT AUTHORITY.The Director shall 1
have the sole authority to enforce the provisions of this sec- 2
tion, and any regulations established pursuant to this sec- 3
tion. 4
(e) APPLICABILITY OF OTHER PROVISIONS OF LAW. 5
(1) APPLICABILITY OF TITLE 18 AND TITLE 31 6
PROVISIONS.A remittance transfer provider that is 7
a money transmitting business as defined in section 8
5330 of title 31, United States Code, may provide re- 9
mittance transfers only if such provider is in compli- 10
ance with the requirements of section 5330 of title 31, 11
United States Code, and section 1960 of title 18, 12
United States Code, as applicable. 13
(2) RULE OF CONSTRUCTION.Nothing in this 14
section shall be construed 15
(A) to affect the application to any trans- 16
action, to any remittance provider, or to any 17
other person of any of the provisions of sub- 18
chapter II of chapter 53 of title 31, United 19
States Code, section 21 of the Federal Deposit 20
Insurance Act, or chapter 2 of title I of Public 21
Law 91508, or any regulations promulgated 22
thereunder; or 23
(B) to cause any fund transfer that would 24
not otherwise be treated as such under para- 25

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graph (2) to be treated as an electronic fund 1
transfer, or as otherwise subject to this title, for 2
the purposes of any of the provisions referred to 3
in subparagraph (A) or any regulation pre- 4
scribed under such subparagraph. 5
(f) DEFINITIONS.For purposes of this section, the fol- 6
lowing definitions shall apply: 7
(1) DEPOSITORY INSTITUTION.the term depos- 8
itory institution has the same meaning as in section 9
3 of the Federal Deposit Insurance Act and includes 10
a credit union. 11
(2) NOT FIXED ON SEND.The term not fixed 12
on send when referring to an exchange rate used in 13
a remittance transfer means an exchange rate that is 14
not set by the remittance transfer provider at the time 15
the consumer initiates the remittance transfer. 16
(3) REMITTANCE TRANSFER.The term remit- 17
tance transfer means the electronic (as defined in 18
section 106(2) of the Electronic Signatures in Global 19
and National Commerce Act) transfer of funds at the 20
request of a consumer located in any State to a per- 21
son in another country that is initiated by a remit- 22
tance transfer provider, whether or not the consumer 23
is an account holder of the remittance transfer pro- 24
vider or whether or not the remittance transfer is also 25

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an electronic fund transfer, as defined in section 903 1
of the Electronic Fund Transfer Act. 2
(4) REMITTANCE TRANSFER PROVIDER.The 3
term remittance transfer provider means any per- 4
son or depository institution, or agent thereof, that 5
originates remittance transfers on behalf of consumers 6
in the normal course of its business, whether or not 7
the consumer is an account holder of that person or 8
depository institution. 9
(g) MODEL DISCLOSURES. 10
(1) PUBLICATION.Notwithstanding any provi- 11
sions of this title, the Director shall establish and 12
publish model disclosure forms to facilitate compli- 13
ance with the disclosure requirements of this section 14
and to aid the consumer in understanding the trans- 15
action to which the subject disclosure form relates. 16
(2) LANGUAGES TO BE USED IN MODEL DISCLO- 17
SURES.The Director shall make these disclosures 18
available within one year of the effective date of this 19
Act 20
(A) in English, and 21
(B) the ten most frequently spoken lan- 22
guages in the United States, other than English, 23
used by consumers initiating remittance trans- 24
fers, as may be determined by the Director. 25

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(3) USE OF AUTOMATED EQUIPMENT.In estab- 1
lishing model forms under this subsection, the Direc- 2
tor shall consider the use by lessors of data processing 3
or similar automated equipment. 4
(4) USE OPTIONAL.A remittance transfer pro- 5
vider may utilize a model disclosure form established 6
by the Director under this subsection for purposes of 7
compliance with this section, at the discretion of the 8
remittance transfer provider. 9
(5) EFFECT OF USE.Any remittance transfer 10
provider that properly uses the material aspects of 11
any model disclosure form established by the Director 12
under this subsection shall be deemed to be in compli- 13
ance with the disclosure requirements to which the 14
form relates. 15
(h) REGULATION AND EXEMPTION AUTHORITY.Not- 16
withstanding any other provisions of this title, the Director, 17
in the sole discretion of the Director, in consultation with 18
relevant Federal and State government agencies may by 19
regulation exempt from one or more requirements of this 20
section, any category of remittance transfer provider if the 21
Director determines that under applicable Federal or State 22
law that such category of remittance transfer provider is 23
subject to requirements substantially similar to those im- 24
posed under this section or that such law gives greater pro- 25

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tection and benefit to the consumer, and that there is ade- 1
quate provision for enforcement. 2
(i) APPLICABILITY OF STATE LAW. 3
(1) This section does not annul, alter, affect, or 4
exempt any person subject to the provisions of this 5
section from complying with other applicable Federal 6
law and the laws of any State relating to remittance 7
transfers and remittance transfer providers, except to 8
the extent that those laws are inconsistent with the 9
provisions of this section, and then only to the extent 10
of the inconsistency. 11
(2) Notwithstanding any other provisions of this 12
title, the Director may determine whether such incon- 13
sistencies exist. A State law is not inconsistent with 14
this section if the protection such law affords any con- 15
sumer is greater than the protection afforded by this 16
section. If the Director determines that a State re- 17
quirement is inconsistent, remittance transfer pro- 18
viders shall incur no liability under the law of that 19
State for a good faith failure to comply with that law, 20
notwithstanding that such determination is subse- 21
quently amended, rescinded, or determined by judicial 22
or other authority to be invalid for any reason. This 23
section does not extend the applicability of any such 24

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law to any class of persons or transactions to which 1
it would not otherwise apply. 2
(3) This section does not annul, alter, or affect 3
the laws of any State relating to the licensing or reg- 4
istration, supervision or examination of remittance 5
transfer providers. 6
(4) Nothing in this section shall be construed as 7
limiting the authority of a State attorney general or 8
State regulator to bring an action or other regulatory 9
proceeding arising solely under the law of that State. 10
(j) FEDERAL CREDIT UNION ACT AMENDMENT. 11
Paragraph (12)(A) of section 107 of the Federal Credit 12
Union Act (12 U.S.C. 1757(12)(A)) is amended by insert- 13
ing and remittance transfers, as defined in section 139 of 14
the Consumer Financial Protection Agency Act of 2009 15
after and domestic electronic fund transfers. 16
(k) AUTOMATED CLEARINGHOUSE SYSTEM. 17
(1) EXPANSION OF SYSTEM.The Board of Gov- 18
ernors of the Federal Reserve System shall work with 19
the Federal reserve banks to expand the use of the 20
automated clearinghouse system for remittance trans- 21
fers to foreign countries, with a focus on countries 22
that receive significant remittance transfers from the 23
United States, based on 24

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(A) the volume and dollar amount of remit- 1
tance transfers to those countries; 2
(B) the significance of the volume of such 3
transfers, relative to the external financial flows 4
of the receiving country; and 5
(C) the feasibility of such an expansion. 6
(2) REPORT TO THE CONGRESS.Before the end 7
of the 180-day period beginning on the date of the en- 8
actment of this Act, and on April 30 biennially there- 9
after, the Board of Governors of the Federal Reserve 10
System shall submit a report to the Director, the 11
Committee on Banking, Housing, and Urban Affairs 12
of the Senate, and the Committee on Financial Serv- 13
ices of the House of Representatives on the status of 14
the automated clearinghouse system and its progress 15
in complying with the requirements of this section. 16
(l) REGULATORY GUIDANCE ON REMITTANCE TRANS- 17
FERS. 18
(1) PROVISION OF GUIDELINES TO INSTITU- 19
TIONS.The Director shall provide guidelines to all 20
remittance transfer providers regarding 21
(A) the offering of low-cost remittance 22
transfers; 23
(B) the availability of agency services to re- 24
mittance transfer providers; 25

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(C) compliance with the provisions of this 1
Act; and 2
(D) specific options that allow remittance 3
transfer providers to take advantage of auto- 4
mated clearing systems, including the FedACH 5
International Services offered by the Board of 6
Governors of the Federal Reserve System and the 7
Federal reserve banks, to transmit remittances at 8
low cost. 9
(2) CONTENT OF GUIDELINES.Guidelines pro- 10
vided to remittance transfer providers under this sec- 11
tion shall include 12
(A) information as to the methods of pro- 13
viding remittance transfer services; 14
(B) the potential economic opportunities in 15
providing low-cost remittance transfers; and 16
(C) the potential value to depository insti- 17
tutions of broadening their financial bases to in- 18
clude persons that use remittance transfers. 19
(3) ASSISTANCE TO FINANCIAL LITERACY COM- 20
MISSION.The Secretary of the Treasury and each 21
agency referred to in subsection (a) shall, as part of 22
their duties as members of the Financial Literacy and 23
Education Commission, assist that Commission in 24

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improving the financial literacy and education of 1
consumers who send remittances. 2
(m) REPORT ON FEASIBILITY OF AND IMPEDIMENTS 3
TO USE OF REMITTANCE HISTORY IN CALCULATION OF 4
CREDIT SCORE.Before the end of the 365-day period be- 5
ginning on the date of the enactment of this Act, the Direc- 6
tor shall submit a report to the President, the Committee 7
on Banking, Housing, and Urban Affairs of the Senate, and 8
the Committee on Financial Services of the House of Rep- 9
resentatives regarding 10
(1) the manner in which a consumers remit- 11
tance history could be used to enhance a consumers 12
credit score; 13
(2) the current legal and business model barriers 14
and impediments that impede the use of a consumers 15
remittance history to enhance the consumers credit 16
score; and 17
(3) recommendations on the manner in which 18
maximum transparency and disclosure to consumers 19
of exchange rates for remittance transfers subject to 20
this Act may be accomplished, whether or not such ex- 21
change rates are known at the time of origination or 22
payment by the consumer for the remittance transfer, 23
including disclosure to the sender of the actual ex- 24
change rate used and the amount of currency that the 25

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recipient of the remittance transfer received, using the 1
values of the currency into which the funds were ex- 2
changed, as contained in section s 919(a)(2)(D) and 3
919(a)(3) of the Electronic Fund Transfer Act (as 4
amended by subsection (a)). 5
(n) EFFECTIVE DATE.This section shall apply with 6
respect to remittance transfers made after the end of the 7
180-day period beginning on the date of the enactment of 8
this Act. 9
date. 12
SEC. 140A. NO AUTHORITY TO REQUIRE THE OFFERING OF 13
FINANCIAL PRODUCTS OR SERVICES. 14
The Director may not prescribe any regulation, issue 15
any order or guidance, or take any other action, including 16
any enforcement action, the effect of which would be to re- 17
quire a covered person to offer to any consumer a specific 18
SEC. 140B. APPRAISAL INDEPENDENCE REQUIREMENTS. 20
(a) PROMULGATION OF NEW REQUIREMENTS.The 21
Director shall lead a Negotiated Rulemaking Committee 22
under the Federal Advisory Committee Act and the Nego- 23
tiated Rulemaking Act to promulgate appraisal independ- 24
ence requirements for residential loan purposes, and such 25

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Committee shall promulgate such requirements not later 1
than the end of the 60-day period beginning on the date 2
of the enactment of this Act. 3
(b) CERTAIN REGULATION REQUIREMENTS.Regula- 4
tions promulgated by the Negotiated Rulemaking Com- 5
mittee under this section 6
(1) shall not prohibit lenders, the Federal Na- 7
tional Mortgage Association, or the Federal Home 8
Loan Mortgage Corporation from accepting any ap- 9
praisal report completed by an appraiser selected, re- 10
tained, or compensated in any manner by a mortgage 11
loan originator 12
(A) licensed or registered in accordance 13
with section 1501 et seq. of the SAFE Mortgage 14
Licensing Act of 2008; and 15
(B) subject to State or Federal laws that 16
make it unlawful for a mortgage loan originator 17
to make any payment, threat, or promise, di- 18
rectly or indirectly, to any appraiser of a prop- 19
erty, for the purposes of influencing the inde- 20
pendent judgment of the appraiser with respect 21
to the value of the property, except that nothing 22
in this section shall prohibit a person with an 23
interest in a real estate transaction from asking 24
an appraiser to 25

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(i) consider additional, appropriate 1
property information; 2
(ii) provide further detail, substan- 3
tiation, or explanation for the appraisers 4
value conclusion; or 5
(iii) correct errors in the appraisal re- 6
port; and 7
(2) shall include a requirement that lenders and 8
their agents compensate appraisers at a rate that is 9
customary and reasonable for appraisal services per- 10
formed in the market area of the property being ap- 11
praised. 12
(c) SUNSET.Effective on the date the appraisal inde- 13
pendence requirements are promulgated pursuant to sub- 14
section (a), the Home Valuation Code of Conduct an- 15
nounced by the Federal Housing Finance Agency on Decem- 16
ber 23, 2008, shall have no force or effect. 17
Subtitle DPreservation of State 18
Law 19
SEC. 141. RELATION TO STATE LAW. 20
(a) IN GENERAL. 21
(1) RULE OF CONSTRUCTION.This title shall 22
not be construed as annulling, altering, or affecting, 23
or exempting any person subject to the provisions of 24
this title from complying with, the laws, regulations, 25

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orders, or interpretations, in effect in any State, ex- 1
cept to the extent that such statute, regulation, order, 2
or interpretation is inconsistent with the provisions of 3
this title and then only to the extent of the inconsist- 4
ency. 5
(2) GREATER PROTECTION UNDER STATE LAW. 6
For the purposes of this subsection, a statute, regula- 7
tion, order, or interpretation in effect in any State is 8
not inconsistent with the provisions of this title if the 9
protection such statute, regulation, order, or interpre- 10
tation affords consumers is greater than the protec- 11
tion provided under this title. A determination re- 12
garding whether a statute, regulation, order, or inter- 13
pretation in effect in any State is inconsistent with 14
the provisions of this title may be made by the Agency 15
on its own motion or in response to a nonfrivolous 16
petition initiated by any interested person. 17
(b) RELATION TO OTHER PROVISIONS OF ENUMER- 18
ATED CONSUMER LAWS THAT RELATE TO STATE LAW. 19
No provision of this title, except as provided in section 183, 20
shall be construed as modifying, limiting, or superseding 21
the operation of any provision of an enumerated consumer 22
law that relates to the application of a law in effect in any 23
State with respect to such Federal law. 24

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SEC. 142. PRESERVATION OF ENFORCEMENT POWERS OF 1
STATES. 2
(a) IN GENERAL. 3
(1) ACTION BY STATE.Any State attorney gen- 4
eral may bring a civil action in the name of such 5
State, as parens patriae on behalf of natural persons 6
residing in such State, in any district court of the 7
United States or State court having jurisdiction of 8
the defendant, to secure monetary or equitable relief 9
for violation of any provisions of this title or regula- 10
tions issued thereunder. 11
superseding the operation of any provision of an enu- 14
merated consumer law that relates to the authority of 15
a State attorney general or State regulator to enforce 16
such Federal law. 17
(b) CONSULTATION REQUIRED. 18
(1) NOTICE. 19
(A) IN GENERAL.Before initiating any 20
action in a court or other administrative or reg- 21
ulatory proceeding against any covered person to 22
enforce any provision of this title, including any 23
regulation prescribed by the Director under this 24
title, a State attorney general or State regulator 25
shall timely provide a copy of the complete com- 26

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plaint to be filed and written notice describing 1
such action or proceeding to the Agency, or the 2
Agencys designee. 3
(B) EMERGENCY ACTION.If prior notice is 4
not practicable, the State attorney general or 5
State regulator shall provide a copy of the com- 6
plete complaint and the notice to the Agency im- 7
mediately upon instituting the action or pro- 8
ceeding. 9
(C) CONTENTS OF NOTICE.The notifica- 10
tion required under this section shall, at a min- 11
imum, describe 12
(i) the identity of the parties; 13
(ii) the alleged facts underlying the 14
proceeding; and 15
(iii) whether there may be a need to 16
coordinate the prosecution of the proceeding 17
so as not to interfere with any action, in- 18
cluding any rulemaking, undertaken by the 19
Director or Agency or another Federal agen- 20
cy. 21
(2) AGENCY RESPONSE.In any action described 22
in paragraph (1), the Agency may 23
(A) intervene in the action as a party; 24
(B) upon intervening 25

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(i) remove the action to the appro- 1
priate United States district court, if the 2
action was not originally brought there; and 3
(ii) be heard on all matters arising in 4
the action; and 5
(C) appeal any order or judgment to the 6
same extent as any other party in the proceeding 7
may. 8
(c) REGULATIONS.The Director shall prescribe regu- 9
lations to implement the requirements of this section and, 10
from time to time, provide guidance in order to further co- 11
ordinate actions with the State attorneys general and other 12
regulators. 13
(d) PRESERVATION OF STATE AUTHORITY. 14
(1) STATE CLAIMS.No provision of this section 15
shall be construed as limiting the authority of a State 16
attorney general or State regulator to bring an action 17
or other regulatory proceeding arising solely under 18
the law of that State. 19
(2) STATE SECURITIES REGULATORS.No provi- 20
sion of this title shall be construed as altering, lim- 21
iting, or affecting the authority of a State securities 22
functions) under State law to adopt rules, initiate en- 24
forcement proceedings, or take any other action with 25

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respect to a person regulated by such commission or 1
authority. 2
(3) STATE INSURANCE REGULATORS.No provi- 3
iting, or affecting the authority of a State insurance 5
commission or State insurance regulator under State 6
law to adopt rules, initiate enforcement proceedings, 7
or take any other action with respect to a person reg- 8
ulated by such commission or regulator. 9
SEC. 143. PRESERVATION OF EXISTING CONTRACTS. 10
This title, and regulations, orders, guidance, and in- 11
terpretations prescribed, issued, and established by the 12
Agency, shall not be construed to alter or affect the applica- 13
bility of any regulation, order, guidance, or interpretation 14
prescribed, issued, and established by the Comptroller of the 15
Currency or the Director of the Office of Thrift Supervision 16
regarding the applicability of State law under Federal 17
banking law to any contract entered into on or before the 18
date of the enactment of this Act, by national banks, Federal 19
savings associations, or subsidiaries thereof that are regu- 20
lated and supervised by the Comptroller of the Currency 21
or the Director of the Office of Thrift Supervision, respec- 22
tively. 23

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SEC. 144. STATE LAW PREEMPTION STANDARDS FOR NA- 1
TIONAL BANKS AND SUBSIDIARIES CLARI- 2
FIED. 3
(a) IN GENERAL.Chapter one of title LXII of the Re- 4
vised Statutes of the United States (12 U.S.C. 21 et 1 seq.) 5
is amended by inserting after section 5136B the following 6
new section: 7
SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NA- 8
FIED. 10
(a) DEFINITIONS.For purposes of this section, the 11
following definitions shall apply: 12
(1) NATIONAL BANK.The term national bank 13
includes 14
(A) any bank organized under the laws of 15
the United States; and 16
(B) any Federal branch established in ac- 17
cordance with the International Banking Act of 18
1978. 19
(2) STATE CONSUMER FINANCIAL LAWS.The 20
term State consumer financial law means a State 21
law that does not directly or indirectly discriminate 22
against national banks and that regulates the man- 23
ner, content, or terms and conditions of any financial 24
transaction (as may be authorized for national banks 25

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to engage in), or any account related thereto, with re- 1
spect to a consumer. 2
(3) OTHER DEFINITIONS.The terms affiliate, 3
subsidiary, includes, and including have the same 4
ance Act. 6
(b) PREEMPTION STANDARD. 7
(1) IN GENERAL.National banks shall gen- 8
erally comply with State laws. State laws are pre- 9
empted only if 10
(A) application of a state law would have 11
a discriminatory effect on national banks in 12
comparison with the effect of the law on a bank 13
chartered by that State; 14
(B) the Comptroller of the Currency deter- 15
mines by regulation or order on a case-by-case 16
basis that a State law prevents or significantly 17
interferes with the ability of an insured deposi- 18
tory institution chartered as national bank to 19
engage in the business of banking; or 20
(C) the State law is preempted by Federal 21
law other than this Act. 22
(2) SAVINGS CLAUSE.This Act does not pre- 23
empt or alter the applicability of any State law to 24
any national bank subsidiary, affiliate, or other enti- 25

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ty that is not an insured depository institution char- 1
tered as a national bank. 2
(3) RULE OF CONSTRUCTION.This Act does 3
not occupy the field in any area of State law and a 4
court shall review any claim that a State law is pre- 5
empted by this Act as a matter of law and without 6
deference to any agency claim that a State law is pre- 7
empted under this Act. 8
(4) REVIEW OF PREEMPTION DECISIONS.A 9
deference to any agency claim that a state law is pre- 12
empted under this Act. Nothing in this subsection 13
shall affect the deference that a court affords to the 14
Comptroller of the Currency regarding the meaning 15
or interpretation of the National Bank Act or other 16
Federal laws. 17
(c) SUBSTANTIAL EVIDENCE.No regulation of the 18
Comptroller of the Currency prescribed under subsection 19
(b)(1)(B), shall be interpreted or applied so as to invalidate, 20
or otherwise declare inapplicable to a national bank, the 21
provision of the State consumer financial law unless sub- 22
stantial evidence, made on the record of the proceeding, sup- 23
ports the specific finding that the provision prevents or sig- 24

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nificantly interferes with the national banks exercise of a 1
power explicitly granted by the Congress. 2
(d) OTHER FEDERAL LAWS.Notwithstanding any 3
other provision of law, the Comptroller of the Currency may 4
not prescribe regulation pursuant to subsection (b)(1)(B) 5
until the Comptroller of the Currency, after consultation 6
with the Consumer Financial Protection Agency, makes a 7
finding, in writing, that a Federal law provides a sub- 8
stantive standard, applicable to a national bank, which reg- 9
ulates the particular conduct, activity, or authority that is 10
subject to such provision of the State consumer financial 11
law. 12
(e) PERIODIC REVIEW OF PREEMPTION DETERMINA- 13
TIONS.The Comptroller of the Currency shall periodically 14
conduct a review, through notice and public comment, of 15
each determination that a provision of Federal law pre- 16
empts a State consumer financial law. The agency shall 17
conduct such review within the 5-year period after pre- 18
scribing or otherwise issuing such determination, and at 19
least once during each 5-year period thereafter. After con- 20
ducting the review of, and inspecting the comments made 21
on, the determination, the agency shall timely propose to 22
continue, amend or rescind it, as may be appropriate, in 23
accordance with the procedures set forth in subsections (a) 24
and (b) of section 5244 (12 U.S.C. 43(a)(b)). 25

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(f) APPLICATION OF STATE CONSUMER FINANCIAL 1
LAW TO SUBSIDIARIES AND AFFILIATES.Notwithstanding 2
any provision of this title, a State consumer financial law 3
shall apply to a subsidiary or affiliate of a national bank 4
to the same extent that the State consumer financial law 5
applies to any person, corporation, or other entity subject 6
to such State law.. 7
(b) CLERICAL AMENDMENT.The table of sections for 8
chapter one of title LXII of the Revised Statutes of the 9
United States is amended by inserting after the item relat- 10
ing to section 5136B the following new item: 11
5136C. State law preemption standards for national banks and subsidiaries
clarified..
SEC. 145. VISITORIAL STANDARDS. 12
Section 5136C of the Revised Statutes of the United 13
States (as added by section 144) is amended by adding at 14
the end the following new subsections: 15
(g) VISITORIAL POWERS. 16
this title which relates to visitorial powers or other- 18
wise limits or restricts the supervisory, examination, 19
or regulatory authority to which any national bank 20
is subject shall be construed as limiting or restricting 21
the authority of any attorney general (or other chief 22
law enforcement officer) of any State to bring any ac- 23
tion in any court of appropriate jurisdiction 24

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(A) to require a national bank to produce 1
records relative to the investigation of violations 2
of State consumer law, or Federal consumer 3
laws; 4
(B) to enforce any applicable Federal or 5
State law, as authorized by such law; or 6
(C) on behalf of residents of such State, to 7
enforce any applicable provision of any Federal 8
or State law against a national bank, as author- 9
ized by such law, or to seek relief and recover 10
damages for such residents from any violation of 11
any such law by any national bank. 12
(2) CONSULTATION.The attorney general (or 13
other chief law enforcement officer) of any State shall 14
consult with the head of the agency responsible for 15
chartering and regulating national banks before act- 16
ing under paragraph (1). 17
(h) ENFORCEMENT ACTIONS.The ability of the head 18
of the agency responsible for chartering and regulating na- 19
tional banks to bring an enforcement action under this title 20
or section 5 of the Federal Trade Commission Act shall not 21
be construed as precluding private parties from enforcing 22
rights granted under Federal or State law in the courts.. 23

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SEC. 146. CLARIFICATION OF LAW APPLICABLE TO NON- 1
DEPOSITORY INSTITUTION SUBSIDIARIES. 2
States is amended by inserting after subsection (h) (as 4
added by section 145) the following new subsection: 5
(i) CLARIFICATION OF LAW APPLICABLE TO NON- 6
DEPOSITORY INSTITUTION SUBSIDIARIES AND AFFILIATES 7
OF NATIONAL BANKS. 8
(1) DEFINITIONS.For purposes of this section, 9
(A) DEPOSITORY INSTITUTION, SUB- 11
SIDIARY, AFFILIATE.The terms depository in- 12
stitution, subsidiary, and affiliate have the 13
same meanings as in section 3 of the Federal De- 14
posit Insurance Act. 15
(B) NONDEPOSITORY INSTITUTION.The 16
term nondepository institution means any enti- 17
ty that is not a depository institution. 18
(2) IN GENERAL.No provision of this title 19
shall be construed as annulling, altering, or affecting 20
the applicability of State law to any nondepository 21
institution, subsidiary, other affiliate, or agent of a 22
national bank.. 23

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SEC. 147. STATE LAW PREEMPTION STANDARDS FOR FED- 1
ERAL SAVINGS ASSOCIATIONS AND SUBSIDI- 2
ARIES CLARIFIED. 3
(a) IN GENERAL.The Home Owners Loan Act (12 4
U.S.C. 1461 et seq.) is amended by inserting after section 5
5 the following new section: 6
ERAL SAVINGS ASSOCIATIONS CLARIFIED. 8
(a) STATE CONSUMER FINANCIAL LAW DEFINED. 9
For purposes of this section, the term State consumer fi- 10
nancial law means a State law that does not directly or 11
indirectly discriminate against Federal savings associa- 12
tions and that regulates the manner, content, or terms and 13
conditions of any financial transaction (as may be author- 14
ized for Federal savings associations to engage in), or any 15
account related thereto, with respect to a consumer. 16
(1) IN GENERAL.Federal savings associations 18
shall generally comply with State laws. State laws 19
are preempted only if 20
a discriminatory effect on Federal savings asso- 22
ciations in comparison with the effect of the law 23
on a bank chartered by that State; 24
(B) the Director of the Office of Thrift Su- 25
pervision determines by regulation or order on a 26

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case-by-case basis that a State law prevents or 1
significantly interferes with the ability of an in- 2
sured depository institution chartered as a Fed- 3
eral savings associations to engage in the busi- 4
ness of banking; or 5
any Federal savings associations subsidiary, affiliate, 10
or other entity that is not an insured depository in- 11
stitution chartered as a national bank. 12
Director of the Office of Thrift Supervision regarding 25

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the meaning or interpretation of the National Bank 1
Act or other Federal laws. 2
(c) OTHER FEDERAL LAW.Notwithstanding any 3
other provision of law, the Director of the Office of Thrift 4
Supervision may not prescribe any regulation pursuant to 5
subsection (b)(1)(B) until such Director, after consultation 6
stantive standard, applicable to a Federal savings associa- 9
tion, which regulates the particular conduct, activity, or 10
authority that is subject to such provision of the State con- 11
sumer financial law. 12
(d) SUBSTANTIAL EVIDENCE.No regulation pre- 13
scribed by the Director of the Office of Thrift Supervision 14
issued under subsection (b)(1)(B) shall be interpreted or ap- 15
plied so as to invalidate, or otherwise declare inapplicable 16
to a Federal savings association, the provision of the State 17
consumer financial law unless substantial evidence, made 18
on the record of the proceeding, supports the specific finding 19
that the provision prevents or significantly interferes with 20
the Federal savings associations exercise of a power explic- 21
itly granted by the Congress. 22
TIONS.The Director of the Office of Thrift Supervision 24
shall periodically conduct a review, through notice and pub- 25

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lic comment, of each determination that a provision of Fed- 1
eral law preempts a State consumer financial law. The 2
agency shall conduct such review within the 5-year period 3
after prescribing or otherwise issuing such determination, 4
and at least once during each 5-year period thereafter. After 5
conducting the review of, and inspecting the comments 6
made on, the determination, the agency shall timely propose 7
to continue, amend or rescind it, as may be appropriate, 8
in accordance with the procedures set forth in subsections 9
(a) and (b) of section 5244 of the Revised Statutes of the 10
United States (12 U.S.C. 43(a)-(b)). 11
any provision of this Act, a State consumer financial law 14
shall apply to a subsidiary or affiliate of a Federal savings 15
association to the same extent that the State consumer fi- 16
nancial law applies to any person, corporation, or other 17
entity subject to such State law and consistent with Federal 18
law.. 19
the Home Owners Loan Act (12 U.S.C. 1461 et seq.) is 21
amended by striking the item relating to section 6 and in- 22
serting the following new item: 23
Sec. 6. State law preemption standards for Federal savings associations clari-
fied..

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Section 6 of the Home Owners Loan Act (as added 2
by section 147 of this title) is amended by adding at the 3
end the following new subsections: 4
(1) IN GENERAL.No provision of this Act 6
shall be construed as limiting or restricting the au- 7
thority of any attorney general (or other chief law en- 8
forcement officer) of any State to bring any action in 9
any court of appropriate jurisdiction 10
(A) to require a Federal savings associa- 11
tion to produce records relative to the investiga- 12
tion of violations of State consumer law, or Fed- 13
eral consumer laws; 14
or State law against a Federal savings associa- 19
tion, as authorized by such law, or to seek relief 20
and recover damages for such residents from any 21
violation of any such law by any Federal sav- 22
ings association. 23

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consult with the Director or any successor agency be- 1
fore acting under paragraph (1). 2
(h) ENFORCEMENT ACTIONS.The ability of the Di- 3
rector or any successor officer or agency to bring an enforce- 4
ment action under this Act or section 5 of the Federal Trade 5
Commission Act shall not be construed as precluding pri- 6
vate parties from enforcing rights granted under Federal 7
or State law in the courts.. 8
Section 6 of the Home Owners Loan Act is amended 11
by adding after subsection (h) (as added by section 148) 12
the following new subsection: 13
OF FEDERAL SAVINGS ASSOCIATIONS. 16

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shall be construed as preempting the applicability of 5
State law to any nondepository institution, sub- 6
sidiary, other affiliate, or agent of a Federal savings 7
association.. 8
date. 11
Subtitle EEnforcement Powers 12
For purposes of this subtitle, the following definitions 14
shall apply: 15
(1) CIVIL INVESTIGATIVE DEMAND AND DE- 16
MAND.The terms civil investigative demand and 17
demand mean any demand issued by the Agency. 18
(2) AGENCY INVESTIGATION.The term Agency 19
investigation means any inquiry conducted by an 20
Agency investigator for the purpose of ascertaining 21
whether any person is or has been engaged in any 22
conduct that violates this title, any enumerated con- 23
sumer law, or any regulation prescribed or order 24

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issued by the Director under this title or under the 1
(3) AGENCY INVESTIGATOR.The term Agency 3
investigator means any attorney or investigator em- 4
ployed by the Agency who is charged with the duty 5
of enforcing or carrying into effect any provisions of 6
this title, any enumerated consumer law, the authori- 7
ties transferred under subtitles F and H, or any regu- 8
lation prescribed or order issued under this title or 9
pursuant to any such authority by the Director. 10
(4) CUSTODIAN.The term custodian means 11
the custodian or any deputy custodian designated by 12
the Agency. 13
(5) DOCUMENTARY MATERIAL.The term docu- 14
mentary material includes the original or any copy 15
of any book, document, record, report, memorandum, 16
paper, communication, tabulation, chart, log, elec- 17
tronic file, or other data or data compilations stored 18
in any medium. 19
(6) VIOLATION.The term violation means 20
any act or omission that, if proved, would constitute 21
a violation of any provision of this title, any enumer- 22
ated consumer law, any law for which authorities 23
were transferred under subtitles F and H, or of any 24

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regulation prescribed or order issued by the Director 1
under this title or pursuant to any such authority. 2
SEC. 152. INVESTIGATIONS AND ADMINISTRATIVE DIS- 3
COVERY. 4
(a) JOINT INVESTIGATIONS. 5
(1) IN GENERAL.The Agency or, where appro- 6
priate, an Agency representative may engage in joint 7
investigations and requests for information. 8
(2) FAIR LENDING.The authority under para- 9
graph (1) includes matters relating to fair lending, 10
and where appropriate, joint investigations and re- 11
quests for information with the Secretary of Housing 12
and Urban Development, the Attorney General, or 13
both. 14
(b) SUBPOENAS. 15
(1) IN GENERAL.The Agency or an Agency in- 16
vestigator may issue subpoenas for the attendance and 17
testimony of witnesses and the production of relevant 18
papers, books, documents, or other material in connec- 19
tion with hearings under this title. 20
(2) FAILURE TO OBEY.In case of contumacy or 21
refusal to obey a subpoena issued pursuant to this 22
paragraph and served upon any person, the district 23
court of the United States for any district in which 24
such person is found, resides, or transacts business, 25

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upon application by the Agency or an Agency investi- 1
gator and after notice to such person, shall have juris- 2
diction to issue an order requiring such person to ap- 3
pear and give testimony or to appear and produce 4
documents or other material, or both. 5
(3) CONTEMPT.Any failure to obey an order of 6
the court under this subsection may be punished by 7
the court as a contempt thereof. 8
(c) DEMANDS. 9
(1) IN GENERAL.Whenever the Agency has rea- 10
son to believe that any person may be in possession, 11
custody, or control of any documentary material or 12
tangible things, or may have any information, rel- 13
evant to a violation, the Agency may, before the insti- 14
tution of any proceedings under this title or under 15
any enumerated consumer law or pursuant to the au- 16
thorities transferred under subtitles F and H, issue in 17
writing, and cause to be served upon such person, a 18
civil investigative demand requiring such person to 19
(A) produce such documentary material for 20
inspection and copying or reproduction in the 21
form or medium requested by the Agency; 22
(B) submit such tangible things; 23
(C) file written reports or answers to ques- 24
tions; 25

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(D) give oral testimony concerning docu- 1
mentary material or other information; or 2
(E) furnish any combination of such mate- 3
rial, answers, or testimony. 4
(2) REQUIREMENTS.Each civil investigative 5
demand shall state the nature of the conduct consti- 6
tuting the alleged violation which is under investiga- 7
tion and the provision of law applicable to such viola- 8
tion. 9
(3) PRODUCTION OF DOCUMENTS.Each civil 10
investigative demand for the production of documen- 11
tary material shall 12
(A) describe each class of documentary ma- 13
terial to be produced under the demand with 14
such definiteness and certainty as to permit such 15
material to be fairly identified; 16
(B) prescribe a return date or dates which 17
will provide a reasonable period of time within 18
which the material so demanded may be assem- 19
bled and made available for inspection and copy- 20
ing or reproduction; and 21
(C) identify the custodian to whom such 22
material shall be made available. 23

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(4) PRODUCTION OF THINGS.Each civil inves- 1
tigative demand for the submission of tangible things 2
shall 3
(A) describe each class of tangible things to 4
be submitted under the demand with such defi- 5
niteness and certainty as to permit such things 6
to be fairly identified; 7
which the things so demanded may be assembled 10
and submitted; and 11
things shall be submitted. 13
(5) DEMAND FOR WRITTEN REPORTS OR AN- 14
SWERS.Each civil investigative demand for written 15
reports or answers to questions shall 16
(A) propound with definiteness and cer- 17
tainty the reports to be produced or the questions 18
to be answered; 19
(B) prescribe a date or dates at which time 20
written reports or answers to questions shall be 21
submitted; and 22
(C) identify the custodian to whom such re- 23
ports or answers shall be submitted. 24

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(6) ORAL TESTIMONY.Each civil investigative 1
demand for the giving of oral testimony shall 2
(A) prescribe a date, time, and place at 3
which oral testimony shall be commenced; and 4
(B) identify a Agency investigator who 5
shall conduct the investigation and the custodian 6
to whom the transcript of such investigation 7
shall be submitted. 8
(7) SERVICE. 9
(A) Any civil investigative demand may be 10
served by any Agency investigator at any place 11
within the territorial jurisdiction of any court of 12
the United States. 13
(B) Any such demand or any enforcement 14
petition filed under this section may be served 15
upon any person who is not found within the 16
territorial jurisdiction of any court of the United 17
States, in such manner as the Federal Rules of 18
Civil Procedure prescribe for service in a foreign 19
nation. 20
(C) To the extent that the courts of the 21
United States have authority to assert jurisdic- 22
tion over such person consistent with due proc- 23
ess, the United States District Court for the Dis- 24
trict of Columbia shall have the same jurisdic- 25

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tion to take any action respecting compliance 1
with this section by such person that such dis- 2
trict court would have if such person were per- 3
sonally within the jurisdiction of such district 4
court. 5
(8) METHOD OF SERVICE.Service of any civil 6
investigative demand or any enforcement petition 7
filed under this section may be made upon a person, 8
including any legal entity, by 9
(A) delivering a duly executed copy of such 10
demand or petition to the individual or to any 11
partner, executive officer, managing agent, or 12
general agent of such person, or to any agent of 13
such person authorized by appointment or by 14
law to receive service of process on behalf of such 15
person; 16
(B) delivering a duly executed copy of such 17
demand or petition to the principal office or 18
place of business of the person to be served; or 19
(C) depositing a duly executed copy in the 20
United States mails, by registered or certified 21
mail, return receipt requested, duly addressed to 22
such person at its principal office or place of 23
business. 24
(9) PROOF OF SERVICE. 25

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(A) A verified return by the individual 1
serving any civil investigative demand or any 2
enforcement petition filed under this section set- 3
ting forth the manner of such service shall be 4
proof of such service. 5
(B) In the case of service by registered or 6
certified mail, such return shall be accompanied 7
by the return post office receipt of delivery of 8
such demand or enforcement petition. 9
(10) PRODUCTION OF DOCUMENTARY MATE- 10
RIAL.The production of documentary material in 11
response to a civil investigative demand shall be made 12
under a sworn certificate, in such form as the demand 13
designates, by the person, if a natural person, to 14
whom the demand is directed or, if not a natural per- 15
son, by any person having knowledge of the facts and 16
circumstances relating to such production, to the ef- 17
fect that all of the documentary material required by 18
the demand and in the possession, custody, or control 19
of the person to whom the demand is directed has 20
been produced and made available to the custodian. 21
(11) SUBMISSION OF TANGIBLE THINGS.The 22
submission of tangible things in response to a civil 23
investigative demand shall be made under a sworn 24
certificate, in such form as the demand designates, by 25

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the person to whom the demand is directed or, if not 1
a natural person, by any person having knowledge of 2
the facts and circumstances relating to such produc- 3
tion, to the effect that all of the tangible things re- 4
quired by the demand and in the possession, custody, 5
or control of the person to whom the demand is di- 6
rected have been submitted to the custodian. 7
(12) SEPARATE ANSWERS.Each reporting re- 8
quirement or question in a civil investigative demand 9
shall be answered separately and fully in writing 10
under oath, unless it is objected to, in which event the 11
reasons for the objection shall be stated in lieu of an 12
answer, and it shall be submitted under a sworn cer- 13
tificate, in such form as the demand designates, by 14
the person, if a natural person, to whom the demand 15
is directed or, if not a natural person, by any person 16
responsible for answering each reporting requirement 17
or question, to the effect that all information required 18
by the demand and in the possession, custody, control, 19
or knowledge of the person to whom the demand is di- 20
rected has been submitted. 21
(13) TESTIMONY. 22
(A) PROCEDURE. 23
(i) OATH AND RECORDATION.Any 24
Agency investigator before whom oral testi- 25

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mony is to be taken shall put the witness on 1
oath or affirmation and shall personally, or 2
by any individual acting under the direc- 3
tion of and in the presence of the investi- 4
gator, record the testimony of the witness. 5
(ii) TRANSCRIPTIONS.The testimony 6
shall be taken stenographically and tran- 7
scribed. 8
(iii) COPY TO CUSTODIAN.After the 9
testimony is fully transcribed, the Agency 10
investigator before whom the testimony is 11
taken shall promptly transmit a copy of the 12
transcript of the testimony to the custodian. 13
(B) PARTIES PRESENT.Any Agency inves- 14
tigator before whom oral testimony is to be taken 15
shall exclude from the place where the testimony 16
is to be taken all other persons except the person 17
giving the testimony, the attorney for such per- 18
son, the officer before whom the testimony is to 19
be taken, an investigator or representative of an 20
agency with which the Agency is engaged in a 21
joint investigation, and any stenographer taking 22
such testimony. 23
(C) LOCATION.The oral testimony of any 24
person taken pursuant to a civil investigative de- 25

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mand shall be taken in the judicial district of the 1
United States in which such person resides, is 2
found, or transacts business, or in such other 3
place as may be agreed upon by the Agency in- 4
vestigator before whom the oral testimony of such 5
person is to be taken and such person. 6
(D) ATTORNEY REPRESENTATION. 7
(i) IN GENERAL.Any person com- 8
pelled to appear under a civil investigative 9
demand for oral testimony pursuant to this 10
section may be accompanied, represented, 11
and advised by an attorney. 12
(ii) CONFIDENTIAL ADVICE.The at- 13
torney may advise the person summoned, in 14
confidence, either upon the request of such 15
person or upon the initiative of the attor- 16
ney, with respect to any question asked of 17
such person. 18
(iii) OBJECTIONS.The person sum- 19
moned or the attorney may object on the 20
record to any question, in whole or in part, 21
and shall briefly state for the record the rea- 22
son for the objection. 23
(iv) REFUSAL TO ANSWER.An objec- 24
tion may properly be made, received, and 25

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entered upon the record when it is claimed 1
that the person summoned is entitled to 2
refuse to answer the question on grounds of 3
any constitutional or other legal right or 4
privilege, including the privilege against 5
self-incrimination, but such person shall not 6
otherwise object to or refuse to answer any 7
question, and shall not otherwise interrupt 8
the oral examination, directly or through 9
such persons attorney. 10
(v) PETITION FOR ORDER.If such 11
person refuses to answer any question, the 12
Agency may petition the district court of 13
the United States pursuant to this section 14
for an order compelling such person to an- 15
swer such question. 16
(vi) BASIS FOR COMPELLING TESTI- 17
MONY.If such person refuses to answer 18
any question on grounds of the privilege 19
against self-incrimination, the testimony of 20
such person may be compelled in accordance 21
with the provisions of section 6004 of title 22
18, United States Code. 23
(E) TRANSCRIPTS. 24

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(i) RIGHT TO EXAMINE.After the tes- 1
timony of any witness is fully transcribed, 2
the Agency investigator shall afford the wit- 3
ness (who may be accompanied by an attor- 4
ney) a reasonable opportunity to examine 5
the transcript. 6
(ii) READING THE TRANSCRIPT.The 7
transcript shall be read to or by the witness, 8
unless such examination and reading are 9
waived by the witness. 10
(iii) REQUEST FOR CHANGES.Any 11
changes in form or substance which the wit- 12
ness desires to make shall be entered and 13
identified upon the transcript by the Agency 14
investigator with a statement of the reasons 15
given by the witness for making such 16
changes. 17
(iv) SIGNATURE.The transcript shall 18
be signed by the witness, unless the witness 19
in writing waives the signing, is ill, cannot 20
be found, or refuses to sign. 21
(v) AGENCY ACTION IN LIEU OF SIGNA- 22
TURE.If the transcript is not signed by 23
the witness during the 30-day period fol- 24
lowing the date upon which the witness is 25

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first afforded a reasonable opportunity to 1
examine it, the Agency investigator shall 2
sign the transcript and state on the record 3
the fact of the waiver, illness, absence of the 4
witness, or the refusal to sign, together with 5
any reasons given for the failure to sign. 6
(F) CERTIFICATION BY INVESTIGATOR.The 7
Agency investigator shall certify on the tran- 8
script that the witness was duly sworn by the in- 9
vestigator and that the transcript is a true 10
record of the testimony given by the witness, and 11
the Agency investigator shall promptly deliver 12
the transcript or send it by registered or certified 13
mail to the custodian. 14
(G) COPY OF TRANSCRIPT.The Agency in- 15
vestigator shall furnish a copy of the transcript 16
(upon payment of reasonable charges for the 17
transcript) to the witness only, except that the 18
Agency may for good cause limit such witness to 19
inspection of the official transcript of the testi- 20
mony of such witness. 21
(H) WITNESS FEES.Any witness appear- 22
ing for the taking of oral testimony pursuant to 23
a civil investigative demand shall be entitled to 24

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the same fees and mileage which are paid to wit- 1
nesses in the district courts of the United States. 2
(d) CONFIDENTIAL TREATMENT OF DEMAND MATE- 3
RIAL. 4
(1) IN GENERAL.Materials received as a result 5
of a civil investigative demand shall be subject to re- 6
quirements and procedures regarding confidentiality, 7
in accordance with regulations established by the Di- 8
rector. 9
(2) DISCLOSURE TO CONGRESS.No regulation 10
established by the Director regarding the confiden- 11
tiality of materials submitted to, or otherwise ob- 12
tained by, the Agency shall be intended to prevent 13
disclosure to either House of the Congress or to an ap- 14
propriate committee of the Congress, except that the 15
Director may prescribe regulations allowing prior no- 16
tice to any party that owns or otherwise provided the 17
material to the Agency and has designated such mate- 18
rial as confidential. 19
(e) PETITION FOR ENFORCEMENT. 20
(1) IN GENERAL.Whenever any person fails to 21
comply with any civil investigative demand duly 22
served upon such person under this section, or when- 23
ever satisfactory copying or reproduction of material 24
requested pursuant to the demand cannot be accom- 25

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plished and such person refuses to surrender such ma- 1
terial, the Agency, through such officers or attorneys 2
as the Director may designate, may file, in the dis- 3
trict court of the United States for any judicial dis- 4
trict in which such person resides, is found, or trans- 5
acts business, and serve upon such person, a petition 6
for an order of such court for the enforcement of this 7
section. 8
(2) SERVICE OF PROCESS.All process of any 9
court to which application may be made as provided 10
in this subsection may be served in any judicial dis- 11
trict. 12
(f) PETITION FOR ORDER MODIFYING OR SETTING 13
ASIDE DEMAND. 14
(1) IN GENERAL.Not later than 20 days after 15
the service of any civil investigative demand upon 16
any person under subsection (b), or at any time be- 17
fore the return date specified in the demand, which- 18
ever period is shorter, or within such period exceeding 19
20 days after service or in excess of such return date 20
as may be prescribed in writing, subsequent to serv- 21
ice, by any Agency investigator named in the de- 22
mand, such person may file with the Agency a peti- 23
tion for an order by the Agency modifying or setting 24
aside the demand. 25

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(2) COMPLIANCE DURING PENDENCY.The time 1
permitted for compliance with the demand in whole 2
or in part, as deemed proper and ordered by the 3
Agency, shall not run during the pendency of such pe- 4
tition at the Agency, except that such person shall 5
comply with any portions of the demand not sought 6
to be modified or set aside. 7
(3) SPECIFIC GROUNDS.Such petition shall 8
specify each ground upon which the petitioner relies 9
in seeking such relief, and may be based upon any 10
failure of the demand to comply with the provisions 11
of this section, or upon any constitutional or other 12
legal right or privilege of such person. 13
(g) CUSTODIAL CONTROL.At any time during which 14
any custodian is in custody or control of any documentary 15
material, tangible things, reports, answers to questions, or 16
transcripts of oral testimony given by any person in com- 17
pliance with any civil investigative demand, such person 18
may file, in the district court of the United States for the 19
judicial district within which the office of such custodian 20
is situated, and serve upon such custodian, a petition for 21
an order of such court requiring the performance by such 22
custodian of any duty imposed upon such custodian by this 23
section or regulation prescribed by the Director. 24
(h) JURISDICTION OF COURT. 25

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(1) IN GENERAL.Whenever any petition is filed 1
in any district court of the United States under this 2
section, such court shall have jurisdiction to hear and 3
determine the matter so presented, and to enter such 4
order or orders as may be required to carry into effect 5
the provisions of this section. 6
(2) APPEAL.Any final order so entered shall be 7
subject to appeal pursuant to section 1291 of title 28, 8
SEC. 153. HEARINGS AND ADJUDICATION PROCEEDINGS. 10
(a) IN GENERAL.The Agency may conduct hearings 11
and adjudication proceedings with respect to any person 12
in the manner prescribed by chapter 5 of title 5, United 13
States Code in order to ensure or enforce compliance with 14
(1) the provisions of this title, including any reg- 15
ulations prescribed by the Director under this title; 16
and 17
(2) any other Federal law that the Agency is au- 18
thorized to enforce, including an enumerated con- 19
sumer law, and any regulations or order prescribed 20
thereunder, unless such Federal law specifically limits 21
the Agency from conducting a hearing or adjudication 22
proceeding and only to the extent of such limitation. 23
(b) SPECIAL RULES FOR CEASE-AND-DESIST PRO- 24
CEEDINGS. 25

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(1) ISSUANCE. 1
(A) NOTICE OF CHARGES.If, in the opin- 2
ion of the Agency, any covered person or service 3
provider is engaging or has engaged in an activ- 4
ity that violates a law, regulation, or any condi- 5
tion imposed in writing on the person by the 6
Agency, the Agency may issue and serve upon 7
the person a notice of charges with respect to 8
such violation. 9
(B) CONTENTS OF NOTICE.The notice 10
shall contain a statement of the facts consti- 11
tuting any alleged violation and shall fix a time 12
and place at which a hearing will be held to de- 13
termine whether an order to cease-and-desist 14
there from should issue against the person. 15
(C) TIME OF HEARING.A hearing under 16
this subsection shall be fixed for a date not ear- 17
lier than 30 days nor later than 60 days after 18
service of such notice unless an earlier or a later 19
date is set by the Agency at the request of any 20
party so served. 21
(D) NONAPPEARANCE DEEMED TO BE CON- 22
SENT TO ORDER.Unless the party or parties so 23
served shall appear at the hearing personally or 24
by a duly authorized representative, they shall be 25

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deemed to have consented to the issuance of the 1
cease-and-desist order. 2
(E) ISSUANCE OF ORDER.In the event of 3
such consent, or if upon the record made at any 4
such hearing, the Agency shall find that any vio- 5
lation specified in the notice of charges has been 6
established, the Agency may issue and serve upon 7
the person an order to cease-and-desist from any 8
such violation or practice. 9
(F) INCLUDES REQUIREMENT FOR CORREC- 10
TIVE ACTION.Such order may, by provisions 11
which may be mandatory or otherwise, require 12
the person to cease-and-desist from the same, 13
and, further, to take affirmative action to correct 14
the conditions resulting from any such violation. 15
(2) EFFECTIVENESS OF ORDER.A cease-and-de- 16
sist order shall take effect at the end of the 30-day pe- 17
riod beginning on the date of the service of such order 18
upon the covered person or service provider concerned 19
(except in the case of a cease-and-desist order issued 20
upon consent, which shall take effect at the time speci- 21
fied therein), and shall remain effective and enforce- 22
able as provided therein, except to such extent as it 23
is stayed, modified, terminated, or set aside by action 24
of the Agency or a reviewing court. 25

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(3) DECISION AND APPEAL. 1
(A) PLACE OF AND PROCEDURES FOR 2
HEARING.Any hearing provided for in this 3
subsection shall be held in the Federal judicial 4
district or in the territory in which the residence 5
or home office of the person is located unless the 6
person consents to another place, and shall be 7
conducted in accordance with the provisions of 8
chapter 5 of title 5 of the United States Code. 9
(B) TIME LIMIT FOR DECISION.After such 10
hearing, and within 90 days after the Agency 11
has notified the parties that the case has been 12
submitted to it for final decision, the Agency 13
shall 14
(i) render its decision (which shall in- 15
clude findings of fact upon which its deci- 16
sion is predicated) and shall issue; and 17
(ii) serve upon each party to the pro- 18
ceeding an order or orders consistent with 19
the provisions of this section. Judicial re- 20
view of any such order shall be exclusively 21
as provided in this subsection. 22
(C) MODIFICATION OF ORDER GEN- 23
ERALLY.Unless a petition for review is timely 24
filed in a court of appeals of the United States, 25

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as hereinafter provided in paragraph (4), and 1
thereafter until the record in the proceeding has 2
been filed as so provided, the Agency may at any 3
time, upon such notice and in such manner as 4
it shall deem proper, modify, terminate, or set 5
aside any such order. 6
(D) MODIFICATION OF ORDER AFTER FIL- 7
ING RECORD ON APPEAL.Upon such filing of 8
the record, the Agency may modify, terminate, or 9
set aside any such order with permission of the 10
court. 11
(4) APPEAL TO COURT OF APPEALS. 12
(A) IN GENERAL.Any party to any pro- 13
ceeding under this subsection may obtain a re- 14
view of any order served pursuant to this sub- 15
section (other than an order issued with the con- 16
sent of the person concerned) by the filing in the 17
court of appeals of the United States for the cir- 18
cuit in which the principal office of the covered 19
person is located, or in the United States Court 20
of Appeals for the District of Columbia Circuit, 21
within 30 days after the date of service of such 22
order, a written petition praying that the order 23
of the Agency be modified, terminated, or set 24
aside. 25

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(B) TRANSMITTAL OF COPY TO THE AGEN- 1
CY.A copy of such petition shall be forthwith 2
transmitted by the clerk of the court to the Agen- 3
cy, and thereupon the Agency shall file in the 4
court the record in the proceeding, as provided 5
in section 2112 of title 28 of the United States 6
Code. 7
(C) JURISDICTION OF COURT.Upon the 8
filing of a petition under subparagraph (A), such 9
court shall have jurisdiction, which upon the fil- 10
ing of the record shall except as provided in the 11
last sentence of paragraph (3) be exclusive, to af- 12
firm, modify, terminate, or set aside, in whole or 13
in part, the order of the Agency. 14
(D) SCOPE OF REVIEW.Review of such 15
proceedings shall be had as provided in chapter 16
7 of title 5 of the United States Code. 17
(E) FINALITY.The judgment and decree of 18
the court shall be final, except that the same 19
shall be subject to review by the Supreme Court 20
upon certiorari, as provided in section 1254 of 21
title 28 of the United States Code. 22
(5) NO STAY.The commencement of proceedings 23
for judicial review under paragraph (4) shall not, un- 24

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less specifically ordered by the court, operate as a 1
stay of any order issued by the Agency. 2
(c) SPECIAL RULES FOR TEMPORARY CEASE-AND-DE- 3
SIST PROCEEDINGS. 4
(1) ISSUANCE. 5
(A) IN GENERAL.Whenever the Agency de- 6
termines that the violation specified in the notice 7
of charges served upon a person, including a 8
service provider, pursuant to subsection (b), or 9
the continuation of such violation, is likely to 10
cause the person to be insolvent or otherwise 11
prejudice the interests of consumers before the 12
completion of the proceedings conducted pursu- 13
ant to subsection (b), the Agency may issue a 14
temporary order requiring the person to cease- 15
and-desist from any such violation or practice 16
and to take affirmative action to prevent or rem- 17
edy such insolvency or other condition pending 18
completion of such proceedings. 19
(B) OTHER REQUIREMENTS.Any tem- 20
porary order issued under this paragraph may 21
include any requirement authorized under this 22
subtitle. 23
(C) EFFECT DATE OF ORDER.Any tem- 24
porary order issued under this paragraph shall 25

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take effect upon service upon the person and, un- 1
less set aside, limited, or suspended by a court 2
in proceedings authorized by paragraph (2) of 3
this subsection, shall remain effective and en- 4
forceable pending the completion of the adminis- 5
trative proceedings pursuant to such notice and 6
until such time as the Agency shall dismiss the 7
charges specified in such notice, or if a cease- 8
and-desist order is issued against the person, 9
until the effective date of such order. 10
(2) APPEAL.Within 10 days after the person 11
concerned has been served with a temporary cease- 12
and-desist order, the person may apply to the United 13
States district court for the judicial district in which 14
the home office of the person is located, or the United 15
States District Court for the District of Columbia, for 16
an injunction setting aside, limiting, or suspending 17
the enforcement, operation, or effectiveness of such 18
order pending the completion of the administrative 19
proceedings pursuant to the notice of charges served 20
upon the person under subsection (b), and such court 21
shall have jurisdiction to issue such injunction. 22
(3) INCOMPLETE OR INACCURATE RECORDS. 23
(A) TEMPORARY ORDER.If a notice of 24
charges served under subsection (b) specifies, on 25

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the basis of particular facts and circumstances, 1
that a persons books and records are so incom- 2
plete or inaccurate that the Agency is unable to 3
determine the financial condition of that person 4
or the details or purpose of any transaction or 5
transactions that may have a material effect on 6
the financial condition of that person, the Agen- 7
cy may issue a temporary order requiring 8
(i) the cessation of any activity or 9
practice which gave rise, whether in whole 10
or in part, to the incomplete or inaccurate 11
state of the books or records; or 12
(ii) affirmative action to restore such 13
books or records to a complete and accurate 14
state, until the completion of the pro- 15
ceedings under subsection (b)(1). 16
(B) EFFECTIVE PERIOD.Any temporary 17
order issued under subparagraph (A) 18
(i) shall take effect upon service; and 19
(ii) unless set aside, limited, or sus- 20
pended by a court in proceedings under 21
paragraph (2), shall remain in effect and 22
enforceable until the earlier of 23
(I) the completion of the pro- 24
ceeding initiated under subsection (b) 25

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in connection with the notice of 1
charges; or 2
(II) the date the Agency deter- 3
mines, by examination or otherwise, 4
that the persons books and records are 5
accurate and reflect the financial con- 6
dition of the person. 7
(d) SPECIAL RULES FOR ENFORCEMENT OF OR- 8
DERS. 9
(1) IN GENERAL.The Agency may in its discre- 10
tion apply to the United States district court within 11
the jurisdiction of which the principal office of the 12
person is located, for the enforcement of any effective 13
and outstanding notice or order issued under this sec- 14
tion, and such court shall have jurisdiction and 15
power to order and require compliance herewith. 16
(2) EXCEPTION.Except as otherwise provided 17
in this subsection, no court shall have jurisdiction to 18
affect by injunction or otherwise the issuance or en- 19
forcement of any notice or order or to review, modify, 20
suspend, terminate, or set aside any such notice or 21
order. 22
(e) REGULATIONS.The Director shall prescribe regu- 23
lations establishing such procedures as may be necessary 24
to carry out this section. 25

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SEC. 154. LITIGATION AUTHORITY. 1
(a) IN GENERAL.If any person violates a provision 2
of this title, any enumerated consumer law, any law for 3
H, or any regulation prescribed or order issued by the Di- 5
rector under this title or pursuant to any such authority, 6
the Agency may commence a civil action against such per- 7
son to impose a civil penalty and to seek all appropriate 8
legal and equitable relief including a permanent or tem- 9
porary injunction as permitted by law. 10
(b) REPRESENTATION.The Agency may act in its 11
own name and through its own attorneys in enforcing any 12
provision of this title, regulations under this title, or any 13
other law or regulation, or in any action, suit, or pro- 14
ceeding to which the Agency is a party. 15
(c) COMPROMISE OF ACTIONS.The Agency may com- 16
promise or settle any action if such compromise is approved 17
by the court. 18
(d) NOTICE TO THE ATTORNEY GENERAL.When 19
commencing a civil action under this title, any enumerated 20
consumer law, any law for which authorities were trans- 21
ferred under subtitles F and H, or any regulation there- 22
under, the Agency shall notify the Attorney General. 23
(e) APPEARANCE BEFORE THE SUPREME COURT. 24
The Agency may represent itself in its own name before the 25
Supreme Court of the United States, if 26

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(1) the Agency makes a written request to the At- 1
torney General within the 10-day period which begins 2
on the date of entry of the judgment which would per- 3
mit any party to file a petition for writ of certiorari; 4
and 5
(2) the Attorney General concurs with such re- 6
quest or fails to take action within 60 days of the 7
Agencys request. 8
(f) FORUM.Any civil action brought under this title 9
may be brought in a United States district court or in any 10
court of competent jurisdiction of a state in a district in 11
which the defendant is located or resides or is doing busi- 12
ness, and such court shall have jurisdiction to enjoin such 13
person and to require compliance with this title, any enu- 14
merated consumer law, any law for which authorities were 15
transferred under subtitles F and H, or any regulation pre- 16
scribed or order issued by the Director under this title or 17
pursuant to any such authority. 18
(g) TIME FOR BRINGING ACTION. 19
(1) IN GENERAL.Except as otherwise permitted 20
by law or equity, no action may be brought under 21
this title more than 3 years after the date of the dis- 22
covery of the violation to which an action relates. 23
(2) LIMITATIONS UNDER OTHER FEDERAL 24
LAWS. 25

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(A) For purposes of this section, an action 1
arising under this title shall not include claims 2
arising solely under enumerated consumer laws. 3
(B) In any action arising solely under an 4
enumerated consumer law, the Agency may com- 5
mence, defend, or intervene in the action in ac- 6
cordance with the requirements of that law, as 7
applicable. 8
(C) In any action arising solely under the 9
laws for which authorities were transferred by 10
subtitles F and H, the Agency may commence, 11
defend, or intervene in the action in accordance 12
with the requirements of that law, as applicable. 13
SEC. 155. RELIEF AVAILABLE. 14
(a) ADMINISTRATIVE PROCEEDINGS OR COURT AC- 15
TIONS. 16
(1) JURISDICTION.The court (or Agency, as the 17
case may be) in an action or adjudication proceeding 18
brought under this title, any enumerated consumer 19
law, or any law for which authorities were trans- 20
ferred by subtitles F and H, shall have jurisdiction to 21
grant any appropriate legal or equitable relief with 22
respect to a violation of this title, any enumerated 23
consumer law, and any law for which authorities 24
were transferred by subtitles F and H, including a 25

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violation of a regulation prescribed or order issued 1
under this title, any enumerated consumer law and 2
any law for which authorities were transferred by 3
(2) RELIEF.Such relief may include 5
(A) rescission or reformation of contracts; 6
(B) refund of moneys or return of real 7
property; 8
(C) restitution; 9
(D) disgorgement or compensation for un- 10
just enrichment; 11
(E) payment of damages; 12
(F) public notification regarding the viola- 13
tion, including the costs of notification; 14
(G) limits on the activities or functions of 15
the person; and 16
(H) civil money penalties under subsection 17
(c). 18
(3) NO EXEMPLARY OR PUNITIVE DAMAGES. 19
Nothing in this subsection shall be construed as au- 20
thorizing the imposition of exemplary or punitive 21
damages. 22
(b) RECOVERY OF COSTS.In any action brought by 23
the Agency, a State attorney general, or a State bank super- 24
visor to enforce any provision of this title, any enumerated 25

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ferred by subtitles F and H, or any regulation prescribed 2
or order issued by the Director under this title or pursuant 3
to any such authority, the Agency, State attorney general, 4
or State bank supervisor may recover the costs incurred by 5
such Agency, attorney general, or supervisor in connection 6
with prosecuting such action if the Agency, State attorney 7
general, or State bank supervisors (as the case may be) is 8
the prevailing party in the action. 9
(c) CIVIL MONEY PENALTY IN COURT AND ADMINIS- 10
TRATIVE ACTIONS. 11
(1) Any person that violates, through any act or 12
omission, any provision of this title, any enumerated 13
consumer law, or any regulation prescribed or order 14
issued by the Director under this title shall forfeit and 15
pay a civil penalty pursuant to this subsection deter- 16
mined as follows: 17
(A) FIRST TIER.For any violation of any 18
law, regulation, final order or condition imposed 19
in writing by the Agency, or for any failure to 20
pay any fee or assessment imposed by the Agency 21
(including any fee or assessment for which a re- 22
lated person may be liable), a civil penalty shall 23
not exceed $5,000 for each day during which 24
such violation continues. 25

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(B) SECOND TIER.Notwithstanding para- 1
graph (A), for any violation of a regulation pre- 2
scribed under section 136 or for any person that 3
recklessly engages in a violation of this title, any 4
enumerated consumer law, or any regulation 5
prescribed or order issued by the Director under 6
this title, relating to the provision of an alter- 7
native consumer financial product or service, a 8
civil penalty shall not exceed $25,000 for each 9
day during which such violation continues. 10
(C) THIRD TIER.Notwithstanding sub- 11
paragraphs (A) and (B), for any person that 12
knowingly violates this title, any enumerated 13
consumer law, or any regulation prescribed or 14
order issued by the Director under this title, a 15
civil penalty shall not exceed $1,000,000 for each 16
(2) MITIGATING FACTORS.In determining the 18
amount of any penalty assessed under paragraph (1), 19
the Agency or the court shall take into account the 20
appropriateness of the penalty with respect to 21
(A) the size of financial resources and good 22
faith of the person charged; 23
(B) the gravity of the violation or failure to 24
pay; 25

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(C) the severity of the risks to or losses of 1
the consumer, which may take into account the 2
number of products or services sold or provided; 3
(D) the history of previous violations; and 4
(E) such other matters as justice may re- 5
quire. 6
(3) AUTHORITY TO MODIFY OR REMIT PEN- 7
ALTY.The Agency may compromise, modify, or 8
remit any penalty which may be assessed or had al- 9
ready been assessed under paragraph (1). The amount 10
of such penalty, when finally determined, shall be ex- 11
clusive of any sums owed by the person to the United 12
States in connection with the costs of the proceeding, 13
and may be deducted from any sums owing by the 14
United States to the person charged. 15
(4) NOTICE AND HEARING.No civil penalty 16
may be assessed with respect to a violation of this 17
title, any enumerated consumer law, or any regula- 18
tion prescribed or order issued by the Director, un- 19
less 20
(A) the Agency gives notice and an oppor- 21
tunity for a hearing to the person accused of the 22
violation; or 23

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(B) the appropriate court has ordered such 1
assessment and entered judgment in favor of the 2
Agency. 3
SEC. 156. REFERRALS FOR CRIMINAL PROCEEDINGS. 4
Whenever the Agency obtains evidence that any person, 5
either domestic or foreign, has engaged in conduct that may 6
constitute a violation of Federal criminal law, the Agency 7
may transmit such evidence to the Attorney General, who 8
may institute criminal proceedings under appropriate law. 9
No provision of this section shall be construed as affecting 10
any other authority of the Agency to disclose information. 11
SEC. 157. EMPLOYEE PROTECTION. 12
(a) IN GENERAL.No covered person or service pro- 13
vider shall terminate or in any other way discriminate 14
against, or cause to be terminated or discriminated against, 15
any covered employee or any authorized representative of 16
covered employees by reason of the fact that such employee 17
or representative, whether at the employees initiative or in 18
the ordinary course of the employees duties (or any person 19
acting pursuant to a request of the employee) 20
(1) has provided information to the Agency or to 21
any other State, local, or Federal Government author- 22
ity or law enforcement official information relating to 23
any violation of, or any act or omission the employee 24
reasonably believes to be a violation of any provision 25

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of this Act or any other law that is subject to the ju- 1
risdiction of the Agency, or any regulation, order, 2
standard, or prohibition prescribed by the Director; 3
(2) has testified or is about to testify in any pro- 4
ceeding resulting from the administration or enforce- 5
ment of any provision of this Act or any other law 6
that is subject to the jurisdiction of the Agency, or 7
any regulation, order, standard, or prohibition pre- 8
scribed by the Director; 9
(3) has filed or instituted, or has caused to be 10
filed or instituted, any proceeding under any enumer- 11
ated consumer law or any law for which authorities 12
were transferred by subtitles F and H; or 13
(4) has objected to, or refused to participate in, 14
any activity, policy, practice, or assigned task that 15
the employee (or other such person) reasonably be- 16
lieved to be in violation of any law, regulation, order, 17
standard, or prohibition, subject to the jurisdiction of, 18
or enforceable by, the Agency. 19
(b) COVERED EMPLOYEE DEFINED.For the purposes 20
of this section, the term covered employee means any in- 21
dividual performing tasks related to the provision of a fi- 22
nancial product or service to a consumer. 23
(c) TIMETABLES. 24

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(1) FILING COMPLAINT.Any individual who be- 1
lieves that such individual has been discharged or oth- 2
erwise discriminated against by any person in viola- 3
tion of subsection (a) may, before the end of the 180- 4
day period beginning on the date on which such vio- 5
lation occurs, file (or have any person file on behalf 6
of such individual) a complaint with the Secretary of 7
Labor (hereafter in this subsection referred to as the 8
Secretary, notwithstanding section 101(34)) alleg- 9
ing such discharge or discrimination and identifying 10
the person responsible for such act. 11
(2) SECRETARYS ACTION ON RECEIPT OF COM- 12
PLAINT.Upon receipt of a complaint by any indi- 13
vidual under paragraph (1), the Secretary shall no- 14
tify, in writing, the person named in the complaint 15
who is alleged to have committed the violation of 16
(A) the filing of the complaint; 17
(B) the allegations contained in the com- 18
plaint; 19
(C) the substance of the evidence supporting 20
the complaint; and 21
(D) the opportunities that will be afforded 22
to such person under paragraph (3). 23
(3) INVESTIGATION, HEARING, AND ORDERS. 24

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(A) FINDINGS.Not later than 60 days 1
after the date of receipt of a complaint filed 2
under paragraph (1) and after affording the in- 3
dividual filing the complaint and the person 4
named in the complaint who is alleged to have 5
committed the violation an opportunity to sub- 6
mit to the Secretary a written response to the 7
complaint and an opportunity to meet with a 8
representative of the Secretary to present state- 9
ments from witnesses, the Secretary shall initiate 10
an investigation and determine whether there is 11
reasonable cause to believe that the complaint 12
has merit and notify, in writing, the complain- 13
ant and the person alleged to have committed a 14
violation of subsection (a) of the Secretarys find- 15
ings. 16
(B) PRELIMINARY ORDER.If the Secretary 17
concludes that there is reasonable cause to believe 18
that a violation of subsection (a) has occurred, 19
the Secretary shall accompany the Secretarys 20
findings with a preliminary order providing the 21
relief prescribed by paragraph (3)(B). 22
(C) OBJECTIONS TO FINDINGS OR PRELIMI- 23
NARY ORDER.Not later than 30 days after the 24
date of notification of findings under subpara- 25

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graph (A), the person alleged to have committed 1
the violation or the complainant may file objec- 2
tions to the findings or preliminary order, or 3
both, and request a hearing on the record. 4
(D) OBJECTIONS DO NOT CONSTITUTE A 5
STAY. The filing of objections under subpara- 6
graph (C) shall not operate to stay any rein- 7
statement remedy contained in the preliminary 8
order. 9
(E) EXPEDITIOUS HEARING.Any hearing 10
requested under subparagraph (C) shall be con- 11
ducted expeditiously. 12
(F) FINALITY OF ORDER. If a hearing is 13
not requested under subparagraph (C) with re- 14
spect to any findings of the Secretary under sub- 15
paragraph (A) within the 30-day period de- 16
scribed in subparagraph (C), the preliminary 17
order shall be deemed a final order that is not 18
subject to judicial review. 19
(4) STANDARDS FOR DETERMINATION. 20
(A) PRIMA FACIE EVIDENCE OF CONTRIBU- 21
TION.The Secretary shall dismiss a complaint 22
filed under paragraph (1) and shall not conduct 23
an investigation otherwise required under para- 24
graph (3)(A) unless the individual filing the 25

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complaint makes a prima facie showing that any 1
behavior described in paragraph (1), (2), (3), or 2
(4) of subsection (a) was a contributing factor in 3
the unfavorable personnel action alleged in the 4
complaint. 5
(B) PROHIBITION ON INVESTIGATION IN 6
CASE OF CLEAR AND CONVINCING EVIDENCE OF 7
INDEPENDENT BASIS.Notwithstanding a find- 8
ing by the Secretary that the complainant has 9
made the showing required under subparagraph 10
(A), no investigation otherwise required under 11
paragraph (3) shall be conducted if the employer 12
demonstrates, by clear and convincing evidence, 13
that the employer would have taken the same un- 14
favorable personnel action in the absence of that 15
behavior. 16
(C) CONTRIBUTING FACTOR REQUIRE- 17
MENT.The Secretary may determine that a 18
violation of subsection (a) has occurred only if 19
the complainant demonstrates that any behavior 20
described in paragraph (1), (2), (3), or (4) of 21
subsection (a) was a contributing factor in the 22
unfavorable personnel action alleged in the com- 23
plaint. 24

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(D) PROHIBITION ON FINAL ORDER IN CASE 1
OF CLEAR AND CONVINCING EVIDENCE OF INDE- 2
PENDENT BASIS.Relief may not be ordered 3
under paragraph (3) if the employer dem- 4
onstrates by clear and convincing evidence that 5
the employer would have taken the same unfavor- 6
able personnel action in the absence of that be- 7
havior. 8
(5) FINAL ORDER. 9
(A) IN GENERAL.Not later than 120 days 10
after the date of conclusion of any hearing under 11
paragraph (3), the Secretary shall issue a final 12
order providing the relief prescribed by this sub- 13
section or denying the complaint. 14
(B) SETTLEMENT AGREEMENT. At any 15
time before issuance of a final order, a pro- 16
ceeding under this subsection may be terminated 17
on the basis of a settlement agreement entered 18
into by the Secretary, the complainant, and the 19
person alleged to have committed the violation. 20
(C) CONTENTS OF ORDER. If, in response 21
to a complaint filed under paragraph (1), the 22
Secretary determines that a violation of sub- 23
section (a) has occurred, the Secretary shall 24
order the person who committed such violation 25

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(i) to take affirmative action to abate 1
the violation; 2
(ii) to reinstate the complainant to 3
such individuals former position together 4
with compensation (including back pay) 5
and restore the terms, conditions, and privi- 6
leges associated with such individuals em- 7
ployment; and 8
(iii) to provide compensatory damages 9
to the complainant. 10
(D) COSTS AND ATTORNEYS FEES. If an 11
order is issued under this paragraph, the Sec- 12
retary, at the request of the complainant, shall 13
assess against the person against whom the order 14
is issued a sum equal to the aggregate amount 15
of all costs and expenses (including attorneys 16
and expert witness fees) reasonably incurred, as 17
determined by the Secretary, by the complainant 18
for, or in connection with, the bringing of the 19
complaint upon which the order was issued. 20
(E) FRIVOLOUS OR BAD FAITH COM- 21
PLAINTS.If the Secretary finds that a com- 22
plaint under paragraph (1) is frivolous or has 23
been brought in bad faith, the Secretary may 24
award to the prevailing employer a reasonable 25

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attorneys fee, not exceeding $1,000, to be paid 1
by the complainant. 2
(6) DE NOVO ACTION ON CLAIM. 3
(A) ACTION AT LAW OR EQUITY.If the 4
Secretary has not issued a final decision within 5
210 days after the filing of the complaint, or 6
within 90 days after receiving a written deter- 7
mination, the complainant who filed such com- 8
plaint may bring an action at law or equity for 9
de novo review in the appropriate district court 10
of the United States. 11
(B) JURY TRIAL.At the request of either 12
party to an action brought under subparagraph 13
(A), such action shall be tried by the court with 14
a jury. 15
(C) STANDARDS FOR DETERMINATION. 16
The standards for determination established 17
under paragraph (4) shall apply in any action 18
under this paragraph. 19
(D) RELIEF.The court shall have jurisdic- 20
tion to grant all relief, including injunctive relief 21
and compensatory damages , that necessary to 22
make the complainant who sought de novo review 23
whole, including 24

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(i) reinstatement with the same senior- 1
ity status that the complainant would have 2
had, but for the discharge or discrimina- 3
tion; 4
(ii) the amount of back pay, with in- 5
terest; and 6
(iii) compensation for any special 7
damages sustained as a result of the dis- 8
charge or discrimination, including litiga- 9
tion costs, expert witness fees, and reason- 10
able attorneys fees. 11
(E) NOT REVIEWABLE.The decision of the 12
court shall be final without further review. 13
(7) JUDICIAL REVIEW OF FINAL ORDER. 14
(A) IN GENERAL.Unless a complainant 15
brings a de novo action under paragraph (6), 16
any person adversely affected or aggrieved by a 17
final order issued under paragraph (5) may ob- 18
tain review of the order in the United States 19
Court of Appeals for the circuit in which the vio- 20
lation, with respect to which the order was 21
issued, allegedly occurred or the circuit in which 22
the complainant resided on the date of such vio- 23
lation. 24

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(B) STATUTE OF LIMITATION .Any peti- 1
tion for review of a final order under subsection 2
shall be filed not later than 60 days after the 3
date of the issuance of the final order by the Sec- 4
retary. 5
(C) STANDARDS FOR REVIEW.The stand- 6
ards for review established under chapter 7 of 7
title 5, United States Code, shall apply in any 8
review of a final order under this paragraph. 9
(D) EFFECT OF PROCEEDINGS AS STAY. 10
The commencement of proceedings under this 11
paragraph shall not operate as a stay of the 12
final order of the Secretary under review, unless 13
so ordered by the court. 14
(E) LIMITATION ON EFFECT OF OTHER PRO- 15
CEEDINGS.Except as provided in paragraph 16
(6) and this paragraph, an order of the Sec- 17
retary with respect to which review could have 18
been obtained under subparagraph (A) shall not 19
be subject to judicial review in any criminal or 20
other civil proceeding. 21
(8) ENFORCEMENT OF ORDERS BY SECRETARY. 22
(A) IN GENERAL.Whenever any person 23
has failed to comply with an order issued under 24
paragraph (5), the Secretary may file a civil ac- 25

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tion in the United States district court for the 1
district in which the violation was found to 2
occur, or in the United States district court for 3
the District of Columbia, to enforce such order. 4
(B) RELIEF. In actions brought under 5
this paragraph, the district courts shall have ju- 6
risdiction to grant all appropriate relief includ- 7
ing injunctive relief and compensatory damages. 8
(9) ENFORCEMENT OF ORDER BY AGGRIEVED 9
PARTY . 10
(A) IN GENERAL.A person on whose behalf 11
an order was issued under paragraph (5) may 12
commence a civil action against the person to 13
whom such order was issued to require compli- 14
ance with such order. 15
(B) RELIEF.The court, in issuing any 16
final order under this paragraph, may award 17
costs of litigation (including reasonable attor- 18
neys and expert witness fees) to any party 19
whenever the court determines such award is ap- 20
propriate. 21
(d) ACTION IN NATURE OF MANDAMUS.Any nondis- 22
cretionary duty imposed by this section shall be enforceable 23
in a mandamus proceeding brought under section 1361 of 24
title 28, United States Code. 25

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(e) UNENFORCEABILITY OF CERTAIN AGREEMENTS. 1
(1) NO WAIVER OF RIGHTS AND REMEDIES. 2
Notwithstanding any law and except as provided 3
under paragraph (3), the rights and remedies pro- 4
vided for in this section may not be waived by any 5
agreement, policy, form, or condition of employment, 6
including by any predispute arbitration agreement. 7
(2) PREDISPUTE ARBITRATION AGREEMENTS. 8
under paragraph (3), no predispute arbitration agree- 10
ment shall be valid or enforceable and to the extent 11
the agreement requires arbitration of a dispute aris- 12
ing under this section. 13
(3) EXCEPTION.Notwithstanding paragraphs 14
(1) and (2), an arbitration provision in a collective 15
bargaining agreement shall be enforceable as to dis- 16
putes arising under subsection (a)(2) unless the Di- 17
rector determines by regulation that such provision is 18
inconsistent with the purposes of this Act. 19
date. 22

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Subtitle FTransfer of Functions 1
and Personnel; Transitional 2
Provisions 3
SEC. 161. TRANSFER OF CERTAIN FUNCTIONS. 4
(a) IN GENERAL.Except as provided in subsection 5
(b), consumer financial protection functions are transferred 6
as follows: 7
(1) BOARD OF GOVERNORS. 8
(A) TRANSFER OF FUNCTIONS.All con- 9
sumer financial protection functions of the 10
Board of Governors are transferred to the Direc- 11
tor. 12
(B) BOARD OF GOVERNORS AUTHORITY. 13
The Director shall have all powers and duties 14
that were vested in the Board of Governors, re- 15
lating to consumer financial protection func- 16
tions, on the day before the designated transfer 17
date. 18
(2) COMPTROLLER OF THE CURRENCY. 19
Comptroller of the Currency are transferred to 22
the Director. 23
(B) COMPTROLLERS AUTHORITY.The Di- 24
rector shall have all powers and duties that were 25

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vested in the Comptroller of the Currency, relat- 1
ing to consumer financial protection functions, 2
on the day before the designated transfer date. 3
(3) DIRECTOR OF THE OFFICE OF THRIFT SU- 4
PERVISION. 5
sumer financial protection functions of the Di- 7
rector of the Office of Thrift Supervision are 8
transferred to the Director. 9
(B) DIRECTORS AUTHORITY.The Director 10
shall have all powers and duties that were vested 11
in the Director of the Office of Thrift Super- 12
vision, relating to consumer financial protection 13
functions, on the day before the designated trans- 14
fer date. 15
(4) FEDERAL DEPOSIT INSURANCE CORPORA- 16
TION. 17
sumer financial protection functions of the Fed- 19
eral Deposit Insurance Corporation are trans- 20
ferred to the Director. 21
(B) CORPORATIONS AUTHORITY.The Di- 22
vested in the Federal Deposit Insurance Corpora- 24
tion, relating to consumer financial protection 25

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fer date. 2
(5) FEDERAL TRADE COMMISSION. 3
(A) TRANSFER OF FUNCTIONS.Except as 4
provided in subparagraph (C), the consumer fi- 5
nancial protection functions of the Federal Trade 6
Commission that are contained within the enu- 7
merated consumer laws are transferred to the 8
Agency, except as provided in section 122(e). 9
(B) COMMISSIONS AUTHORITY.Except as 10
provided in subparagraph (C), the Director shall 11
have all powers and duties that were vested in 12
the Federal Trade Commission, relating to con- 13
sumer financial protection functions, on the day 14
before the designated transfer date. 15
(C) CONTINUATION OF CERTAIN COMMIS- 16
SION AUTHORITIES.Notwithstanding subpara- 17
graphs (A) and (B), the Federal Trade Commis- 18
sion shall continue to enforce the following provi- 19
sions of law and prescribe regulations under 20
such provisions: 21
(i) The Credit Repair Organizations 22
Act. 23
(ii) Section 5 of the Federal Trade 24
Commission Act. 25

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(iii) The Telemarketing and Consumer 1
Fraud and Abuse Prevention Act. 2
(6) NATIONAL CREDIT UNION ADMINISTRA- 3
TION. 4
sumer financial protection functions of the Na- 6
tional Credit Union Administration are trans- 7
(B) NATIONAL CREDIT UNION ADMINISTRA- 9
TIONS AUTHORITY.The Director shall have all 10
powers and duties that were vested in the Na- 11
tional Credit Union Administration, relating to 12
consumer financial protection functions, on the 13
day before the designated transfer date. 14
(7) SECRETARY OF HOUSING AND URBAN DEVEL- 15
OPMENT. 16
sumer protection functions of the Secretary of 18
Housing and Urban Development relating to the 19
Real Estate Settlement Procedures Act of 1974 20
and the Secure and Fair Enforcement for Mort- 21
gage Licensing Act of 2008 are transferred to the 22
Director. 23
(B) SECRETARY OF HUDS AUTHORITY. 24

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that were vested in the Secretary of Housing and 1
Urban Development relating to the Real Estate 2
Settlement Procedures Act of 1974 and the Se- 3
cure and Fair Enforcement for Mortgage Licens- 4
ing Act of 2008, on the day before the designated 5
transfer date 6
(b) TRANSFERS OF FUNCTIONS SUBJECT TO BACK- 7
STOP ENFORCEMENT AUTHORITY REMAINING WITH TRANS- 8
FEROR AGENCIES.The transfers of functions in subsection 9
(a) shall not affect the authority of the agencies identified 10
in subsection (a) from initiating enforcement proceedings 11
under the circumstances described in section 122(e)(3). 12
(c) TERMINATION OF AUTHORITY OF TRANSFEROR 13
AGENCIES TO COLLECT FEES FOR CONSUMER FINANCIAL 14
PROTECTION PURPOSES.Authorities of the agencies iden- 15
tified in subsection (a) to assess and collect fees to cover 16
the cost of conducting consumer financial protection func- 17
tions shall terminate on the day before the designated trans- 18
fer date. 19
(d) CONSUMER FINANCIAL PROTECTION FUNCTIONS 20
DEFINED.For purposes of this subtitle, the term con- 21
sumer financial protection functions means research, rule- 22
making, issuance of orders or guidance, supervision, exam- 23
ination, and enforcement activities, powers, and duties re- 24
lating to the provision of consumer financial products or 25

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services, including the authority to assess and collect fees 1
for those purposes, except that such term shall not include 2
any such function relating to an agencys responsibilities 3
under the Community Reinvestment Act of 1977. 4
(e) EFFECTIVE DATE.Subsections (a) and (b) shall 5
take effect on the designated transfer date. 6
SEC. 162. DESIGNATED TRANSFER DATE. 7
(a) IN GENERAL.Not later than 60 days after the 8
date of the enactment of this Act, the Secretary 9
(1) shall, in consultation with the Chairman of 10
the Board of Governors, the Chairperson of the Fed- 11
eral Deposit Insurance Corporation, the Chairman of 12
the Federal Trade Commission, the Chairman of the 13
National Credit Union Administration Board, the 14
Comptroller of the Currency, the Director of the Office 15
of Thrift Supervision, the Secretary of Housing and 16
Urban Development, and the Director of the Office of 17
Management and Budget, designate a single calendar 18
date for the transfer of functions to the Director under 19
section 161; and 20
(2) shall publish notice of that designation in the 21
Federal Register. 22
(b) CHANGING DESIGNATION.The Secretary 23
(1) may, in consultation with the Chairman of 24

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Management and Budget, change the date designated 7
under subsection (a); and 8
(2) shall publish notice of any changed designa- 9
tion in the Federal Register. 10
(c) PERMISSIBLE DATES. 11
(1) IN GENERAL.Except as provided in para- 12
graph (2), any date designated under this section 13
shall be not earlier than 180 days nor later than 18 14
months after the date of the enactment of this Act. 15
(2) EXTENSION OF TIME.The Secretary may 16
designate a date that is later than 18 months after the 17
date of the enactment of this Act if the Secretary 18
transmits to appropriate committees of Congress 19
(A) a written determination that orderly 20
implementation of this title is not feasible on the 21
date that is 18 months after the date of the en- 22
actment of this Act; 23

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(B) an explanation of why an extension is 1
necessary for the orderly implementation of this 2
title; and 3
(C) a description of the steps that will be 4
taken to effect an orderly and timely implemen- 5
tation of this title within the extended time pe- 6
riod. 7
(3) EXTENSION LIMITED.In no case shall any 8
date designated under this section be later than 24 9
SEC. 163. SAVINGS PROVISIONS. 11
(a) BOARD OF GOVERNORS. 12
(1) EXISTING RIGHTS, DUTIES, AND OBLIGA- 13
TIONS NOT AFFECTED.Section 161(a)(1) shall not 14
affect the validity of any right, duty, or obligation of 15
the United States, the Board of Governors (or any 16
Federal reserve bank), or any other person that 17
(A) arises under any provision of law relat- 18
ing to any consumer financial protection func- 19
tion of the Board of Governors transferred to the 20
Director by this title; and 21
(B) existed on the day before the designated 22
transfer date. 23
(2) CONTINUATION OF SUITS.This Act shall not 24
abate any proceeding commenced by or against the 25

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Board of Governors (or any Federal reserve bank) be- 1
fore the designated transfer date with respect to any 2
consumer financial protection function of the Board 3
of Governors (or any Federal reserve bank) trans- 4
ferred to the Director by this title, except that the Di- 5
rector shall be substituted for the Board of Governors 6
(or Federal reserve bank) as a party to any such pro- 7
ceeding as of the designated transfer date. 8
(b) FEDERAL DEPOSIT INSURANCE CORPORATION. 9
the United States, the Federal Deposit Insurance Cor- 13
poration, the Board of Directors of that Corporation, 14
or any other person, that 15
tion of the Federal Deposit Insurance Corpora- 18
tion transferred to the Director by this title; and 19
transfer date. 21
Federal Deposit Insurance Corporation (or the Board 24
of Directors of that Corporation) before the designated 25

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H.L.C.
transfer date with respect to any consumer financial 1
protection function of the Federal Deposit Insurance 2
Corporation transferred to the Director by this title, 3
except that the Director shall be substituted for the 4
Federal Deposit Insurance Corporation (or Board of 5
Directors) as a party to any such proceeding as of the 6
(c) FEDERAL TRADE COMMISSION. 8
the United States, the Federal Trade Commission, or 12
any other person, that 13
tion of the Federal Trade Commission trans- 16
ferred to the Director by this title; and 17
transfer date. 19
Federal Trade Commission before the designated 22
protection function of the Federal Trade Commission 24
transferred to the Director by this title, except that 25

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H.L.C.
the Director shall be substituted for the Federal Trade 1
Commission as a party to any such proceeding as of 2
(d) NATIONAL CREDIT UNION ADMINISTRATION. 4
the United States, the National Credit Union Admin- 8
istration, the National Credit Union Administration 9
Board, or any other person, that 10
tion of the National Credit Union Administra- 13
transfer date. 16
National Credit Union Administration (or the Na- 19
tional Credit Union Administration Board) before the 20
designated transfer date with respect to any consumer 21
financial protection function of the National Credit 22
Union Administration transferred to the Director by 23
this title, except that the Director shall be substituted 24
for the National Credit Union Administration (or 25

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H.L.C.
National Credit Union Administration Board) as a 1
party to any such proceeding as of the designated 2
transfer date. 3
(e) COMPTROLLER OF THE CURRENCY. 4
the United States, the Comptroller of the Currency, 8
the Office of the Comptroller of the Currency, or any 9
other person, that 10
tion of the Comptroller of the Currency trans- 13
transfer date. 16
Comptroller of the Currency (or the Office of the 19
Comptroller of the Currency) with respect to any con- 20
sumer financial protection function of the Comp- 21
troller of the Currency transferred to the Director by 22
this title before the designated transfer date, except 23
that the Director shall be substituted for the Comp- 24
troller of the Currency (or the Office of the Comp- 25

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H.L.C.
troller of the Currency) as a party to any such pro- 1
(f) DIRECTOR OF THE OFFICE OF THRIFT SUPER- 3
VISION. 4
the United States, the Director of the Office of Thrift 8
Supervision, the Office of Thrift Supervision, or any 9
tion of the Director of the Office of Thrift Super- 13
vision transferred to the Director by this title; 14
and 15
(B) that existed on the day before the des- 16
ignated transfer date. 17
Director of the Office of Thrift Supervision (or the Of- 20
fice of Thrift Supervision) with respect to any con- 21
sumer financial protection function of the Director of 22
the Office of Thrift Supervision transferred to the Di- 23
rector by this title before the designated transfer date, 24

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H.L.C.
Director (or the Office of Thrift Supervision) as a 1
transfer date. 3
(g) SECRETARY OF HOUSING AND URBAN DEVELOP- 4
MENT. 5
the United States, the Secretary of Housing and 9
Urban Development, the Department of Housing and 10
Urban Development, or any other person, that 11
ing to any function of the Secretary of Housing 13
and Urban Development under the Real Estate 14
ing Act of 2008 transferred to the Director by 17
this title; and 18
Secretary of Housing and Urban Development (or the 23
Department of Housing and Urban Development) 24
with respect to any consumer financial protection 25

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H.L.C.
function of the Secretary of Housing and Urban De- 1
velopment transferred to the Director by this title be- 2
fore the designated transfer date, except that the Di- 3
rector shall be substituted for the Secretary of Hous- 4
ing and Urban Development (or such Department) as 5
a party to any such proceeding as of the designated 6
transfer date. 7
(h) CONTINUATION OF EXISTING ORDERS, REGULA- 8
TIONS, DETERMINATIONS, AGREEMENTS, AND RESOLU- 9
TIONS.All orders, resolutions, determinations, agreements, 10
and regulations that have been issued, made, prescribed, or 11
allowed to become effective by the Board of Governors (or 12
any Federal reserve bank), the Federal Deposit Insurance 13
Corporation, the Federal Trade Commission, the National 14
Credit Union Administration, the Comptroller of the Cur- 15
rency, the Director of the Office of Thrift Supervision, the 16
Secretary of Housing and Urban Development, or by a 17
court of competent jurisdiction, in the performance of con- 18
sumer financial protection functions that are transferred by 19
this title and that are in effect on the day before the des- 20
ignated transfer date, shall continue in effect according to 21
the terms of those orders, resolutions, determinations, agree- 22
ments, and regulations, and shall be enforceable by or 23
against the Director until modified, terminated, set aside, 24
or superseded in accordance with applicable law by the Di- 25

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H.L.C.
rector, by any court of competent jurisdiction, or by oper- 1
ation of law. 2
(i) IDENTIFICATION OF REGULATIONS CONTINUED. 3
Not later than the designated transfer date, the Director 4
(1) shall, after consultation with the Chairman 5
of the Board of Governors, the Chairperson of the 6
Federal Deposit Insurance Corporation, the Chair- 7
man of the Federal Trade Commission, the Chairman 8
of the National Credit Union Administration Board, 9
the Comptroller of the Currency, the Director of the 10
Office of Thrift Supervision, and the Secretary of 11
Housing and Urban Development identify the regula- 12
tions continued under subsection (g) that will be en- 13
forced by the Director; and 14
(2) shall publish a list of such regulations in the 15
(j) STATUS OF REGULATIONS PROPOSED OR NOT YET 17
EFFECTIVE. 18
(1) PROPOSED REGULATIONS.Any proposed 19
regulation of the Board of Governors, the Federal De- 20
posit Insurance Corporation, the Federal Trade Com- 21
mission, the National Credit Union Administration, 22
Office of Thrift Supervision, or the Secretary of Hous- 24
ing and Urban Development which that agency, in 25

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performing consumer financial protection functions 1
transferred by this title, has proposed before the des- 2
ignated transfer date but has not published as a final 3
regulation before that date, shall be deemed to be a 4
proposed regulation of the Director. 5
(2) REGULATIONS NOT YET EFFECTIVE.Any 6
interim or final regulation of Board of Governors, the 7
Federal Deposit Insurance Corporation, the Federal 8
Trade Commission, the National Credit Union Ad- 9
ministration, the Comptroller of the Currency, the Di- 10
rector of the Office of Thrift Supervision, or the Sec- 11
retary of Housing and Urban Development which 12
that agency, in performing consumer financial protec- 13
tion functions transferred by this title, has published 14
before the designated transfer date but which has not 15
become effective before that date, shall take effect as a 16
regulation of the Director according to its terms. 17
SEC. 164. TRANSFER OF CERTAIN PERSONNEL. 18
(a) IN GENERAL. 19
(1) CERTAIN FEDERAL RESERVE SYSTEM EM- 20
PLOYEES TRANSFERRED. 21
(A) IDENTIFYING EMPLOYEES FOR TRANS- 22
FER.The Director and the Board of Governors 23
shall 24

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H.L.C.
(i) jointly determine the number of em- 1
ployees of the Board necessary to perform or 2
support the consumer financial protection 3
functions of the Board of Governors that are 4
transferred to the Director by this title; and 5
(ii) consistent with the number deter- 6
mined under clause (i), jointly identify em- 7
ployees of the Board of Governors for trans- 8
fer to the Agency in a manner that the Di- 9
rector and the Board of Governors, in their 10
sole discretion, deem equitable. 11
(B) IDENTIFIED EMPLOYEES TRANS- 12
FERRED.All employees of the Board of Gov- 13
ernors identified under subparagraph (A)(ii) 14
shall be transferred to the Agency for employ- 15
ment. 16
(C) FEDERAL RESERVE BANK EMPLOY- 17
EES.Employees of any Federal reserve bank 18
who, on the day before the designated transfer 19
date, are performing consumer financial protec- 20
tion functions on behalf of the Board of Gov- 21
ernors shall be treated as employees of the Board 22
of Governors for purposes of subparagraphs (A) 23
and (B). 24
(2) CERTAIN FDIC EMPLOYEES TRANSFERRED. 25

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H.L.C.
FER.The Director and the Board of Directors 2
of the Federal Deposit Insurance Corporation 3
shall 4
ployees of that Corporation necessary to 6
perform or support the consumer financial 7
protection functions of the Corporation that 8
are transferred to the Director by this title; 9
and 10
ployees of the Corporation for transfer to the 13
Agency in a manner that the Director and 14
the Board of Directors of the Corporation, 15
in their discretion, deem equitable. 16
FERRED.All employees of the Corporation 18
identified under subparagraph (A)(ii) shall be 19
transferred to the Agency for employment. 20
(3) CERTAIN NCUA EMPLOYEES TRANSFERRED. 21
FER.The Director and the National Credit 23
Union Administration Board shall 24

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H.L.C.
ployees of the National Credit Union Ad- 2
ministration necessary to perform or sup- 3
port the consumer financial protection func- 4
tions of the National Credit Union Admin- 5
istration that are transferred to the Director 6
by this title; and 7
ministration for transfer to the Agency in a 11
manner that the Director and the National 12
Credit Union Administration Board, in 13
their discretion, deem equitable. 14
FERRED.All employees of the National Credit 16
Union Administration identified under subpara- 17
graph (A)(ii) shall be transferred to the Agency 18
for employment. 19
(4) CERTAIN HUD EMPLOYEES TRANSFERRED. 20
FER.The Director and the Secretary of Hous- 22
ing and Urban Development shall 23
ployees of the Department of Housing and 25

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H.L.C.
Urban Development necessary to perform or 1
functions of the Secretary of Housing and 3
Urban Development that are transferred to 4
the Director by this title; and 5
Urban Development for transfer to the 9
the Secretary of Housing and Urban Devel- 11
opment, in their discretion, deem equitable. 12
FERRED.All employees of the Department of 14
Housing and Urban Development identified 15
under subparagraph (A)(ii) shall be transferred 16
to the Agency for employment. 17
(5) APPOINTMENT AUTHORITY FOR EXCEPTED 18
SERVICE AND SENIOR EXECUTIVE SERVICE TRANS- 19
FERRED. 20
(A) IN GENERAL.In the case of employees 21
occupying positions in the excepted service or the 22
Senior Executive Service, any appointment au- 23
thority established pursuant to law or regula- 24
tions of the Director of the Office of Personnel 25

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Management for filling such positions shall be 1
transferred, subject to subparagraph (B). 2
(B) DECLINING TRANSFERS ALLOWED.An 3
agency or entity may decline to make a transfer 4
of authority under subparagraph (A) (and the 5
employees appointed pursuant to such subpara- 6
graph) to the extent that such authority relates 7
to positions excepted from the competitive service 8
because of their confidential, policy-making, pol- 9
icy-determining, or policy-advocating character, 10
and non-career positions in the Senior Executive 11
Service (within the meaning of section 12
3132(a)(7) of title 5, United States Code). 13
(b) TIMING OF TRANSFERS AND POSITION ASSIGN- 14
MENTS.Each employee to be transferred under this section 15
shall 16
(1) be transferred not later than 90 days after 17
the designated transfer date; and 18
(2) receive notice of such employees position as- 19
signment not later than 120 days after the effective 20
date of the employees transfer. 21
(c) TRANSFER OF FUNCTION. 22
provision of law, the transfer of employees shall be 24

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deemed a transfer of functions for the purpose of sec- 1
(2) PRIORITY OF THIS TITLE.If any provisions 3
of this title conflict with any protection provided to 4
transferred employees under section 3503 of title 5, 5
United States Code, the provisions of this title shall 6
control. 7
(d) EQUAL STATUS AND TENURE POSITIONS. 8
(1) EMPLOYEES TRANSFERRED FROM FDIC, FTC, 9
HUD, NCUA, OCC, AND OTS.Each employee trans- 10
ferred from the Federal Deposit Insurance Corpora- 11
tion, the Federal Trade Commission, the Department 12
of Housing and Urban Development, the National 13
Credit Union Administration, the Office of the Comp- 14
troller of the Currency, or the Office of Thrift Super- 15
vision shall be placed in a position at the Agency 16
with the same status and tenure as he or she held on 17
the day before the designated transfer date. 18
(2) EMPLOYEES TRANSFERRED FROM THE FED- 19
ERAL RESERVE SYSTEM. 20
(A) COMPARABILITY.Each employee 21
transferred from the Board of Governors or from 22
a Federal reserve bank shall be placed in a posi- 23
tion with the same status and tenure as that of 24
employees transferring to the Agency from the 25

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Office of the Comptroller of the Currency who 1
perform similar functions and have similar peri- 2
ods of service. 3
(B) SERVICE PERIODS CREDITED.For 4
purposes of this paragraph, periods of service 5
with the Board of Governors or a Federal reserve 6
bank shall be credited as periods of service with 7
a Federal agency. 8
(e) ADDITIONAL CERTIFICATION REQUIREMENTS LIM- 9
ITED.Examiners transferred to the Agency shall not be 10
subject to any additional certification requirements before 11
being placed in a comparable examiners position at the 12
Agency examining the same types of institutions as the 13
transferred examiners examined before such examiners were 14
transferred. 15
(f) PERSONNEL ACTIONS LIMITED. 16
(1) 5-YEAR PROTECTION.Except as provided in 17
paragraph (2), each transferred employee holding a 18
permanent position on the day before the designated 19
transfer date shall not, during the 5-year period be- 20
ginning on the designated transfer date, be involun- 21
tarily separated, or involuntarily reassigned outside 22
such transferred employees local locality pay area as 23
defined by the Director of the Office of Personnel 24
Management. 25

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(2) EXCEPTIONS.Paragraph (1) shall not be 1
construed as limiting the right of the Director to 2
(A) separate an employee for cause or for 3
unacceptable performance; 4
(B) terminate an appointment to a position 5
excepted from the competitive service because of 6
its confidential policy-making, policy-deter- 7
mining, or policy-advocating character; or 8
(C) reassign a supervisory employee outside 9
such employees locality pay area as defined by 10
the Director of the Office of Personnel Manage- 11
ment when the Director determines that the reas- 12
signment is necessary for the efficient operation 13
of the Agency. 14
(g) PAY. 15
paragraph (2), each transferred employee shall, dur- 17
ing the 1-year period beginning on the designated 18
transfer date, receive pay at a rate not less than the 19
basic rate of pay (including any geographic differen- 20
tial) that the employee received during the 1-year pe- 21
riod immediately before the transfer. 22
construed as limiting the right of the Agency to re- 24
duce the rate of basic pay of a transferred employee 25

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(A) for cause; 1
(B) for unacceptable performance; or 2
(C) with the employees consent. 3
(3) PROTECTION ONLY WHILE EMPLOYED. 4
Paragraph (1) applies to a transferred employee only 5
while that employee remains employed by the Agency. 6
(4) PAY INCREASES PERMITTED.Paragraph (1) 7
shall not be construed as limiting the authority of the 8
Agency to increase a transferred employees pay. 9
(h) REORGANIZATION. 10
(1) BETWEEN 1ST AND 3RD YEAR. 11
(A) IN GENERAL.If the Agency deter- 12
mines, during the period beginning 1 year after 13
the designated transfer date and ending 3 years 14
after the designated transfer date, that a reorga- 15
nization of the staff of the Agency is required 16
(i) that reorganization shall be deemed 17
a major reorganization for purposes of af- 18
fording affected employees retirement under 19
section 8336(d)(2) or 8414(b)(1)(B) of title 20
5, United States Code; 21
(ii) before the reorganization occurs, 22
all employees in the same locality pay area 23
as defined by the Director of the Office of 24

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Personnel Management shall be placed in a 1
uniform position classification system; and 2
(iii) any resulting reduction in force 3
shall be governed by the provisions of chap- 4
ter 35 of title 5, United States Code, except 5
that the Agency shall 6
(I) establish competitive areas (as 7
that term is defined in regulations 8
issued by the Director of the Office of 9
Personnel Management) to include at a 10
minimum all employees in the same lo- 11
cality pay area as defined by the Office 12
of Personnel Management; 13
(II) establish competitive levels 14
(as that term is defined in regulations 15
Personnel Management) without regard 17
to whether the particular employees 18
have been appointed to positions in the 19
competitive service or the excepted serv- 20
ice; and 21
(III) afford employees appointed 22
to positions in the excepted service 23
(other than to a position excepted from 24
the competitive service because of its 25

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confidential policy-making, policy-de- 1
termining, or policy-advocating char- 2
acter) the same assignment rights to 3
positions within the Agency as employ- 4
ees appointed to positions in the com- 5
petitive service. 6
(B) SERVICE CREDIT FOR REDUCTIONS IN 7
FORCE.For purposes of this paragraph, periods 8
of service with a Federal home loan bank, a joint 9
office of the Federal home loan banks, the Board 10
of Governors, a Federal reserve bank, the Federal 11
Deposit Insurance Corporation, or the National 12
Credit Union Administration shall be credited as 13
periods of service with a Federal agency. 14
(2) AFTER 3RD YEAR. 15
mines, at any time after the 3-year period begin- 17
ning on the designated transfer date, that a reor- 18
ganization of the staff of the Agency is required, 19
any resulting reduction in force shall be governed 20
by the provisions of chapter 35 of title 5, United 21
States Code, except that the Agency shall estab- 22
lish competitive levels (as that term is defined in 23
regulations issued by the Office of Personnel 24
Management) without regard to types of ap- 25

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pointment held by particular employees trans- 1
ferred under this section. 2
(i) BENEFITS. 11
(1) RETIREMENT BENEFITS FOR TRANSFERRED 12
EMPLOYEES. 13
(A) IN GENERAL. 14
(i) CONTINUATION OF EXISTING RE- 15
TIREMENT PLAN.Except as provided in 16
subparagraph (B), each transferred em- 17
ployee shall remain enrolled in such em- 18
ployees existing retirement plan as long as 19
the employee remains employed by the 20
Agency. 21
(ii) EMPLOYERS CONTRIBUTION.The 22
Director shall pay any employer contribu- 23
tions to the existing retirement plan of each 24

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transferred employee as required under that 1
plan. 2
(B) OPTION FOR EMPLOYEES TRANSFERRED 3
FROM FEDERAL RESERVE SYSTEM TO BE SUB- 4
JECT TO FEDERAL EMPLOYEE RETIREMENT PRO- 5
GRAM. 6
(i) ELECTION.Any transferred em- 7
ployee who was enrolled in a Federal Re- 8
serve System retirement plan on the day be- 9
fore the date of the employees transfer to 10
the Agency may, during the period begin- 11
ning 6 months after the designated transfer 12
date and ending 1 year after the designated 13
transfer date, elect to be subject to the Fed- 14
eral employee retirement program. 15
(ii) EFFECTIVE DATE OF COVERAGE. 16
For any employee making an election under 17
clause (i), coverage by the Federal employee 18
retirement program shall begin 1 year after 19
(C) AGENCY PARTICIPATION IN FEDERAL 21
RESERVE SYSTEM RETIREMENT PLAN. 22
(i) SEPARATE ACCOUNT IN FEDERAL 23
RESERVE SYSTEM RETIREMENT PLAN ES- 24
TABLISHED.A separate account in the 25

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Federal Reserve System retirement plan 1
shall be established for Agency employees 2
who do not make the election under sub- 3
paragraph (B). 4
(ii) FUNDS ATTRIBUTABLE TO TRANS- 5
FERRED EMPLOYEES REMAINING IN FED- 6
ERAL RESERVE SYSTEM RETIREMENT PLAN 7
TRANSFERRED.The proportionate share of 8
funds in the Federal Reserve System retire- 9
ment plan, including the proportionate 10
share of any funding surplus in that plan, 11
attributable to a transferred employee who 12
does not make the election under subpara- 13
graph (B), shall be transferred to the ac- 14
count established under clause (i). 15
(iii) EMPLOYER CONTRIBUTIONS DE- 16
POSITED.The Director shall deposit into 17
the account established under clause (i) the 18
employer contributions that the Agency 19
makes on behalf of employees who do not 20
make the election under subparagraph (B). 21
(iv) ACCOUNT ADMINISTRATION.The 22
Director shall administer the account estab- 23
lished under clause (i) as a participating 24

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employer in the Federal Reserve System re- 1
tirement plan. 2
(D) DEFINITIONS.For purposes of this 3
paragraph, the following definitions shall apply: 4
(i) EXISTING RETIREMENT PLAN.The 5
term existing retirement plan means, 6
with respect to any employee transferred 7
under this section, the particular retirement 8
plan (including the Financial Institutions 9
Retirement Fund) and any associated thrift 10
savings plan of the agency or Federal re- 11
serve bank from which the employee was 12
transferred, which the employee was en- 13
rolled in on the day before the designated 14
transfer date. 15
(ii) FEDERAL EMPLOYEE RETIREMENT 16
PLAN.The term Federal employee retire- 17
ment program means the retirement pro- 18
gram for Federal employees established by 19
chapters 83 and 84 of title 5, United States 20
Code. 21
(2) BENEFITS OTHER THAN RETIREMENT BENE- 22
FITS FOR TRANSFERRED EMPLOYEES. 23
(A) DURING 1ST YEAR. 24

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(i) EXISTING PLANS CONTINUE.Each 1
transferred employee may, for 1 year after 2
the designated transfer date, retain member- 3
ship in any other employee benefit program 4
of the agency or bank from which the em- 5
ployee transferred, including a dental, vi- 6
sion, long-term care, or life insurance pro- 7
gram, to which the employee belonged on the 8
Director shall reimburse the agency or bank 11
from which an employee was transferred for 12
any cost incurred by that agency or bank in 13
continuing to extend coverage in the benefit 14
program to the employee as required under 15
that program or negotiated agreements. 16
(B) DENTAL, VISION, OR LIFE INSURANCE 17
AFTER 1ST YEAR.If, after the 1-year period be- 18
ginning on the designated transfer date, the Di- 19
rector decides not to continue participation in 20
any dental, vision, or life insurance program of 21
an agency or bank from which employees trans- 22
ferred, a transferred employee who is a member 23
of such a program may, before the Directors de- 24

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cision takes effect, elect to enroll, without regard 1
to any regularly scheduled open season, in 2
(i) the enhanced dental benefits estab- 3
lished by chapter 89A of title 5, United 4
States Code; 5
(ii) the enhanced vision benefits estab- 6
lished by chapter 89B of title 5, United 7
States Code; and 8
(iii) the Federal Employees Group Life 9
Insurance Program established by chapter 10
87 of title 5, United States Code, without 11
regard to any requirement of insurability. 12
(C) LONG-TERM CARE INSURANCE AFTER 13
1ST YEAR.If, after the 1-year period beginning 14
on the designated transfer date, the Director de- 15
cides not to continue participation in any long- 16
term care insurance program of an agency or 17
bank from which employees transferred, a trans- 18
ferred employee who is a member of such a pro- 19
gram may, before the Directors decision takes ef- 20
fect, elect to apply for coverage under the Federal 21
Long Term Care Insurance Program established 22
by chapter 90 of title 5, United States Code, 23
under the underwriting requirements applicable 24

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to a new active workforce member (as defined in 1
Part 875, title 5, Code of Federal Regulations). 2
(D) EMPLOYEES CONTRIBUTION.An indi- 3
vidual enrolled in the Federal Employees Health 4
Benefits program shall pay any employee con- 5
tribution required by the plan. 6
(E) ADDITIONAL FUNDING.The Director 7
shall transfer to the Federal Employees Health 8
Benefits Fund established under section 8909 of 9
title 5, United States Code, an amount deter- 10
mined by the Director of the Office of Personnel 11
Management, after consultation with the Direc- 12
tor and the Director of the Office of Management 13
and Budget, to be necessary to reimburse the 14
Fund for the cost to the Fund of providing bene- 15
fits under this subparagraph. 16
(F) CREDIT FOR TIME ENROLLED IN OTHER 17
PLANS.For employees transferred under this 18
section, enrollment in a health benefits plan ad- 19
ministered by the Comptroller of the Currency, 20
the Director of the Office of Thrift Supervision, 21
the Federal Deposit Insurance Corporation, the 22
National Credit Union Administration, the 23
Board of Governors, the Secretary of Housing 24
and Urban Development, or a Federal reserve 25

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bank, immediately before enrollment in a health 1
benefits plan under chapter 89 of title 5, United 2
States Code, shall be considered as enrollment in 3
a health benefits plan under that chapter for 4
purposes of section 8905(b)(1)(A) of title 5, 5
(G) SPECIAL PROVISIONS TO ENSURE CON- 7
TINUATION OF LIFE INSURANCE BENEFITS. 8
(i) IN GENERAL.An annuitant (as 9
defined in section 8901(3) of title 5, United 10
States Code) who is enrolled in a life insur- 11
ance plan administered by the Board of 12
Governors of the Federal Reserve System, 13
the Federal Deposit Insurance Corporation, 14
the Federal Trade Commission, the Sec- 15
retary of Housing and Urban Development, 16
the National Credit Union Administration, 17
the Comptroller of the Currency, or the Di- 18
rector of the Office of Thrift Supervision on 19
the day before the designated transfer date 20
shall be eligible for coverage by a life insur- 21
ance plan under sections 8706(b), 8714a, 22
8714b, and 8714c of title 5, United States 23
Code, or in a life insurance plan established 24
by the Agency, without regard to any regu- 25

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larly scheduled open season and require- 1
ment of insurability. 2
(ii) EMPLOYEES CONTRIBUTION.An 3
individual enrolled in a life insurance plan 4
under this clause shall pay any employee 5
contribution required by the plan. 6
(iii) ADDITIONAL FUNDING.The Di- 7
rector shall transfer to the Employees Life 8
Insurance Fund established under section 9
8714 of title 5, United States Code, an 10
amount determined by the Director of the 11
Office of Personnel Management, after con- 12
sultation with the Director and the Director 13
of the Office of Management and Budget, to 14
be necessary to reimburse the Fund for the 15
cost to the Fund of providing benefits under 16
this subparagraph not otherwise paid for by 17
the employee under clause (ii). 18
(iv) CREDIT FOR TIME ENROLLED IN 19
OTHER PLANS.For employees transferred 20
under this section, enrollment in a life in- 21
surance plan administered by the Board of 22
Governors, the Federal Deposit Insurance 23
Corporation, the Federal Trade Commis- 24
sion, the Secretary of Housing and Urban 25

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Development, the National Credit Union 1
Administration, the Comptroller of the Cur- 2
rency, the Director of the Office of Thrift 3
Supervision, or a Federal reserve bank im- 4
mediately before enrollment in a life insur- 5
ance plan under chapter 87 of title 5, 6
United States Code, shall be considered as 7
enrollment in a life insurance plan under 8
that chapter for purposes of section 9
8706(b)(1)(A) of title 5, United States Code. 10
(j) IMPLEMENTATION OF UNIFORM PAY AND CLASSI- 11
FICATION SYSTEM.Not later than 2 years after the des- 12
ignated transfer date, the Director shall implement a uni- 13
form pay and classification system for all transferred em- 14
ployees. 15
(k) EQUITABLE TREATMENT.In administering the 16
provisions of this section, the Director 17
(1) shall take no action that would unfairly dis- 18
advantage transferred employees relative to each other 19
based on their prior employment by the Board of 20
Governors, the Federal Deposit Insurance Corpora- 21
tion, the Federal Trade Commission, the Secretary of 22
Housing and Urban Development, the National Cred- 23
it Union Administration, the Office of the Comp- 24
troller of the Currency, the Office of Thrift Super- 25

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vision, a Federal reserve bank, a Federal home loan 1
bank, or a joint office of the Federal home loan banks; 2
and 3
(2) may take such action as is appropriate in 4
individual cases so that employees transferred under 5
this section receive equitable treatment, with respect 6
to those employees status, tenure, pay, benefits (other 7
than benefits under programs administered by the Of- 8
fice of Personnel Management), and accrued leave or 9
vacation time, for prior periods of service with any 10
Federal agency, including the Board of Governors of 11
the Federal Reserve System, the Federal Deposit In- 12
surance Corporation, the Federal Trade Commission, 13
the Department of Housing and Urban Development, 14
the National Credit Union Administration, the Office 15
of the Comptroller of the Currency, the Office of 16
Thrift Supervision, a Federal reserve bank, a Federal 17
home loan bank, or a joint office of the Federal home 18
loan banks. 19
(l) IMPLEMENTATION.In implementing the provi- 20
sions of this section, the Director shall work with the Direc- 21
tor of the Office of Personnel Management and other entities 22
with expertise in matters related to employment to ensure 23
a fair and orderly transition for affected employees. 24

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H.L.C.
SEC. 165. INCIDENTAL TRANSFERS. 1
(a) INCIDENTAL TRANSFERS AUTHORIZED.The Di- 2
rector of the Office of Management and Budget, in consulta- 3
tion with the Secretary, shall make such additional inci- 4
dental transfers and dispositions of assets and liabilities 5
held, used, arising from, available, or to be made available, 6
in connection with the functions transferred by this title, 7
as the Director may determine necessary to accomplish the 8
purposes of this title. 9
(b) SUNSET.The authority provided in this section 10
shall terminate 5 years after the date of the enactment of 11
this Act. 12
SEC. 166. INTERIM AUTHORITY OF THE SECRETARY. 13
(a) IN GENERAL.The Secretary is authorized to per- 14
form the functions of the Director under this subtitle until 15
the appointment of the Director is confirmed by the Senate 16
in accordance with section 112. 17
(b) INTERIM ADMINISTRATIVE SERVICES BY THE DE- 18
PARTMENT OF THE TREASURY.The Secretary of the 19
Treasury may provide administrative services necessary to 20
support the Agency before the designated transfer date. 21
(c) INTERIM FUNDING FOR THE DEPARTMENT OF THE 22
TREASURY.For the purposes of carrying out the authori- 23
ties granted in this section, there are appropriated to the 24
Secretary of the Treasury such sums as are necessary. Not- 25
withstanding any other provision of law, such amounts 26

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shall be subject to apportionment under section 1517 of title 1
31, United States Code, and restrictions that generally 2
apply to the use of appropriated funds in title 31, United 3
States Code, and other laws. 4
Subtitle GRegulatory 5
Improvements 6
SEC. 171. COLLECTION OF DEPOSIT ACCOUNT DATA. 7
(a) PURPOSE.The purpose of this section is to pro- 8
mote awareness and understanding of the access of individ- 9
uals and communities to financial services, and to identify 10
business and community development needs and opportuni- 11
ties. 12
(b) IN GENERAL. 13
(1) RECORDS REQUIRED.For each branch, 14
automated teller machine at which deposits are ac- 15
cepted, and other deposit taking service facility with 16
respect to any financial institution, the financial in- 17
stitution shall maintain records of the number and 18
dollar amounts of deposit accounts of customers. 19
(2) GEO-CODED ADDRESSES OF DEPOSITORS. 20
The customers addresses maintained pursuant to 21
paragraph (1) shall be geo-coded so that data shall be 22
collected regarding the census tracts of the residence 23
or business location of the customers. 24

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(3) IDENTIFICATION OF DEPOSITOR TYPE.In 1
maintaining records on any deposit account under 2
this section, the financial institution shall also record 3
whether the deposit account is for a residential or 4
commercial customer. 5
(4) PUBLIC AVAILABILITY. 6
(A) IN GENERAL.The following informa- 7
tion shall be publicly available on an annual 8
basis 9
(i) the address and census tracts of 10
each branch, automated teller machine at 11
which deposits are accepted, and other de- 12
posit taking service facility with respect to 13
any financial institution; 14
(ii) the type of deposit account includ- 15
ing whether the account was a checking or 16
savings account; and 17
(iii) data on the number and dollar 18
amounts of the accounts, presented by cen- 19
sus tract location of the residential and 20
commercial customers. 21
(iv) any other data deemed appro- 22
priate by the Director. 23
(B) PROTECTION OF IDENTITY.In the 24
publicly available data, any personally identifi- 25

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H.L.C.
able data element shall be removed so as to pro- 1
tect the identities of the commercial and residen- 2
tial customers. 3
(c) AVAILABILITY OF INFORMATION. 4
(1) SUBMISSION TO AGENCIES.The data re- 5
quired to be compiled and maintained under this sec- 6
tion by any financial institution shall be submitted 7
annually to the Agency, or to a Federal banking 8
agency, in accordance with regulations prescribed by 9
the Director. 10
(2) AVAILABILITY OF INFORMATION.Informa- 11
tion compiled and maintained under this section 12
shall be retained for not less than 3 years after the 13
date of preparation and shall be made available to the 14
public, upon request, in the form required under regu- 15
lations prescribed by the Director. 16
(d) AGENCY USE.The Director 17
(1) shall assess the distribution of residential 18
and commercial accounts at such financial institution 19
across income and minority level of census tracts; and 20
(2) may use the data for any other purpose as 21
permitted by law. 22
(e) REGULATIONS AND GUIDANCE. 23
such regulations and issue guidance as may be nec- 25

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H.L.C.
essary to carry out, enforce, and compile data pursu- 1
ant to this section. 2
(2) DATA COMPILATION REGULATIONS.The Di- 3
rector shall prescribe regulations regarding the provi- 4
sion of data compiled under this section to the Fed- 5
eral banking agencies to carry out the purposes of this 6
section and shall issue guidance to financial institu- 7
tions regarding measures to facilitate compliance 8
with the this section and the requirements of regula- 9
tions prescribed under this section. 10
means a Federal credit union or a State-chartered 16
credit union (as such terms are defined in section 101 17
of the Federal Credit Union Act). 18
(3) DEPOSIT ACCOUNT.The term deposit ac- 19
count includes any checking account, savings ac- 20
count, credit union share account, and other type of 21
account as defined by the Director. 22
(4) DIRECTOR.The term Director means the 23
Director of the Agency. 24

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ernors of the Federal Reserve System, the head of the 3
agency responsible for chartering and regulating na- 4
tional banks, the Director of the Office of Thrift Su- 5
pervision, the Federal Deposit Insurance Corporation, 6
and the National Credit Union Administration; and 7
the term Federal banking agencies means all of 8
those agencies. 9
(6) FINANCIAL INSTITUTION.The term finan- 10
cial institution 11
(A) has the meaning given to the term in- 12
sured depository institution in section 3(c)(2) 13
(B) includes any credit union. 15
(g) EFFECTIVE DATE.This section shall take effect 16
on the designated transfer date. 17
SEC. 172. SMALL BUSINESS DATA COLLECTION. 18
(a) IN GENERAL.The Equal Credit Opportunity Act 19
(15 U.S.C. 1691 et seq.) is amended by inserting after sec- 20
tion 704A the following new section: 21
704B. Small business loan data collection 22
(a) PURPOSE.The purpose of this section is to fa- 23
cilitate enforcement of fair lending laws and enable commu- 24
nities, governmental entities, and creditors to identify busi- 25

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ness and community development needs and opportunities 1
of women- and minority-owned small businesses. 2
(b) IN GENERAL.Subject to the requirements of this 3
section, in the case of any application to a financial insti- 4
tution for credit for a small business, the financial institu- 5
tion shall 6
(1) inquire whether the business is a women- or 7
minority-owned business, without regard to whether 8
such application is received in person, by mail, by 9
telephone, by electronic mail or other form of elec- 10
tronic transmission, or by any other means and 11
whether or not such application is in response to a 12
solicitation by the financial institution; and 13
(2) maintain a record of the responses to such 14
inquiry separate from the application and accom- 15
panying information. 16
(c) RIGHT TO REFUSE.Any applicant for credit 17
may refuse to provide any information requested pursuant 18
to subsection (b) in connection with any application for 19
credit. 20
(d) NO ACCESS BY UNDERWRITERS. 21
(1) IN GENERAL.Where feasible, no loan un- 22
derwriter or other officer or employee of a financial 23
institution, or any affiliate of a financial institution, 24
involved in making any determination concerning an 25

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application for credit shall have access to any infor- 1
mation provided by the applicant pursuant to a re- 2
quest under subsection (b) in connection with such 3
application. 4
(2) EXCEPTION.If a financial institution de- 5
termines that loan underwriter or other officer or em- 6
ployee of a financial institution, or any affiliate of a 7
financial institution, involved in making any deter- 8
mination concerning an application for credit should 9
have access to any information provided by the appli- 10
cant pursuant to a request under subsection (b), the 11
financial institution will provide notice to the appli- 12
cant of the access of the underwriter to this informa- 13
tion, along with notice that the financial institution 14
may not discriminate on this basis of this informa- 15
tion. 16
(e) FORM AND MANNER OF INFORMATION. 17
(1) IN GENERAL.Each financial institution 18
shall compile and maintain, in accordance with regu- 19
lations of the Agency, a record of the information pro- 20
vided by any loan applicant pursuant to a request 21
under subsection (b). 22
(2) ITEMIZATION.Information compiled and 23
maintained under paragraph (1) shall also be 24

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itemized in order to clearly and conspicuously dis- 1
close the following: 2
(A) The number of the application and the 3
date the application was received. 4
(B) The type and purpose of the loan or 5
other credit being applied for. 6
(C) The amount of the credit or credit 7
limit applied for and the amount of the credit 8
transaction or the credit limit approved for such 9
applicant. 10
(D) The type of action taken with respect 11
to such application and the date of such action. 12
(E) The census tract in which is located 13
the principal place of business of the small busi- 14
ness loan applicant. 15
(F) The gross annual revenue of the busi- 16
ness in the last fiscal year of the small business 17
loan applicant preceding the date of the applica- 18
tion. 19
(G) The race, sex, and ethnicity of the 20
principal owners of the business. 21
(H) Any additional data the Agency deter- 22
mines would aid in fulfilling the purposes of this 23
section. 24

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(3) INCLUSION OF PERSONALLY IDENTIFIABLE 1
INFORMATION PROHIBITED.In compiling and main- 2
taining any record of information under this section, 3
a financial institution may not include in such 4
record the name, specific address (other than the cen- 5
sus tract required under paragraph (1)(E)), telephone 6
number, electronic mail address, and any other per- 7
sonally identifiable information concerning any indi- 8
vidual who is, or is connected with, the small business 9
loan applicant. 10
(4) DISCRETION TO DELETE OR MODIFY PUB- 11
LICLY AVAILABLE DATA.The Agency may, in the 12
discretion of the Agency, delete or modify data col- 13
lected under this section which is or will be available 14
to the public if the Agency determines that the dele- 15
tion or modification of the data would advance a 16
compelling privacy interest. 17
(f) AVAILABILITY OF INFORMATION. 18
(1) SUBMISSION TO AGENCY.The data re- 19
annually to the Agency. 22
(2) AVAILABILITY OF INFORMATION. 23
(A) IN GENERAL.Information compiled 24
and maintained under this section shall be re- 25

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tained for not less than 3 years after the date of 1
preparation and shall be made available to the 2
public, upon request, in the form required under 3
regulations prescribed by the Agency. 4
(B) ANNUAL DISCLOSURE TO THE PUB- 5
LIC.In addition to the availability by request 6
under subparagraph (A) of data compiled and 7
maintained under this section, the Agency shall 8
annually provide such data to the public. 9
(C) PROCEDURES.The procedures for 10
disclosing data compiled and maintained under 11
this section to the public shall be determined by 12
the Agency by regulation. 13
(3) COMPILATION OF AGGREGATE DATA. 14
(A) IN GENERAL.The Agency may, in 15
the discretion of the Agency, compile for the 16
Agencys own use compilations of aggregate data. 17
(B) PUBLIC AVAILABILITY OF AGGREGATE 18
DATA.The Agency may, in the discretion of the 19
Agency, make public compilations of aggregate 20
data in such manner as the Agency may deter- 21
mine to be appropriate. 22
(g) DEFINITIONS.For purposes of this section, the 23

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cial institution means any partnership, company, 2
corporation, association (incorporated or unincor- 3
porated), trust, estate, cooperative organization, or 4
other entity that engages in any financial activity. 5
(2) MINORITY-OWNED BUSINESS.The term 6
minority-owned business means a business 7
(A) more than 50 percent of the ownership 8
or control of which is held by 1 or more minority 9
individuals; and 10
(B) more than 50 percent of the net profit 11
or loss of which accrues to 1 or more minority 12
individuals. 13
(3) WOMEN-OWNED BUSINESS.The term 14
women-owned business means a business 15
or control of which is held by 1 or more women; 17
and 18
or loss of which accrues to 1 or more women. 20
(4) MINORITY.The term minority has the 21
meaning given to such term by section 1204(c)(3) of 22
the Financial Institutions Reform, Recovery, and En- 23
forcement Act of 1989. 24

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(5) SMALL BUSINESS LOAN.The term small 1
business loan shall be defined by the Agency, which 2
may take into account 3
(A) the gross revenues of the borrower; 4
(B) the total number of employees of the 5
borrower; 6
(C) the industry in which the borrower has 7
its primary operations; and 8
(D) the size of the loan. 9
(h) AGENCY ACTION. 10
(1) IN GENERAL.The Agency shall prescribe 11
such regulations and issue such guidance as may be 12
necessary to carry out, enforce, and compile data pur- 13
suant to this section. 14
(2) EXCEPTIONS.The Agency, by regulation 15
or order, may adopt exceptions to any requirement of 16
this section and may, conditionally or uncondition- 17
ally, exempt any financial institution or class of in- 18
stitutions from the requirements of this section as the 19
Agency determines to be necessary or appropriate to 20
carry out the purposes and objectives of this section. 21
(3) GUIDANCE.The Agency shall issue guid- 22
ance designed to facilitate compliance with the re- 23
quirements of this section, including assisting finan- 24
cial institutions in working with applicants to deter- 25

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mine whether the applicants are women- or minority- 1
owned for the purposes of this section.. 2
(b) TECHNICAL AND CONFORMING AMENDMENT.Sec- 3
tion 701(b) of the Equal Credit Opportunity Act (15 U.S.C. 4
1691(b)) is amended 5
(1) by striking or after the semicolon at the 6
end of paragraph (3); 7
(2) by striking the period at the end of para- 8
graph (4) and inserting ; or; and 9
(3) by inserting after paragraph (4), the fol- 10
lowing new paragraph: 11
(5) to make an inquiry under section 704B in 12
accordance with the requirements of such section.. 13
(c) CLERICAL AMENDMENT.The table of sections for 14
title VII of the Consumer Credit Protection Act is amended 15
by inserting after the item relating to section 704A the fol- 16
lowing new item: 17
704B. Small business loan data collection..
(d) EFFECTIVE DATE.This section shall take effect 18
SEC. 173. ANNUAL FINANCIAL AUTOPSY. 20
(a) STUDY REQUIRED.Not later than March 31 of 21
each calendar year, the Director shall 22
(1) conduct a scientific sampling of foreclosures 23
and bankruptcies during the previous calendar year 24
in each State or territory of the United States; and 25

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(2) identify any underlying causes of such bank- 1
ruptcies or foreclosures, including any specific finan- 2
cial products or services that have been the cause of 3
substantial numbers of such bankruptcies or fore- 4
closures. 5
(b) REPORT.After the completion of each study re- 6
quired under subsection (a), the Director shall submit a re- 7
port to the Congress containing 8
(1) any conclusions made by the Director in car- 9
rying out such study; 10
(2) any specific financial products or services 11
that the Director has identified to have caused a sub- 12
stantial number of bankruptcies or foreclosures, as 13
well as which companies or individuals provided such 14
financial products or services; and 15
(3) any recommendations the Director has for 16
legislation that would reduce the underlying causes of 17
bankruptcies and foreclosures identified in such study. 18
Subtitle HConforming 19
Amendments 20
SEC. 181. AMENDMENTS TO THE INSPECTOR GENERAL ACT 21
OF 1978. 22
(a) ESTABLISHMENT.Section 8G(a)(2) of the Inspec- 23
tor General Act of 1978 (5 U.S.C. App.) is amended by 24

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inserting the Consumer Financial Protection Agency, be- 1
fore the Consumer Product Safety Commission,. 2
(b) EFFECTIVE DATE.This section shall take effect 3
on the date of the enactment of this Act. 4
SEC. 182. AMENDMENTS TO THE PRIVACY ACT OF 1974. 5
(a) APPLICABILITY.Section 552a of title 5, United 6
States Code, is amended by adding at the end the following 7
new subsection: 8
(w) APPLICABILITY TO CONSUMER FINANCIAL PRO- 9
TECTION AGENCY.Except as provided in the Consumer 10
Financial Protection Agency Act of 2009, this section shall 11
apply with respect to the Consumer Financial Protection 12
Agency.. 13
SEC. 183. AMENDMENTS TO THE ALTERNATIVE MORTGAGE 16
TRANSACTION PARITY ACT OF 1982. 17
(a) SECTION 803(1).Section 803(1) of the Alter- 18
native Mortgage Transaction Parity Act of 1982 (12 U.S.C. 19
3802(1)) is amended by striking paragraphs (B) and (C). 20
(b) SECTION 804(a).Section 804(a) of the Alter- 21
native Mortgage Transaction Parity Act of l982 (12 U.S.C. 22
3803(a)) is amended 23
(1) in paragraphs (1), (2), and (3), by inserting 24
on or before the designated transfer date, as deter- 25

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mined in section 1062 of the Consumer Financial 1
Protection Agency Act of 2009 after transactions 2
made each place such term appears; 3
(2) in paragraph (2), by striking and at the 4
end; 5
(3) in paragraph (3), by striking the period at 6
the end and inserting ; and; and 7
(4) by adding at the end the following new para- 8
graph: 9
(4) with respect to transactions made after the 10
designated transfer date, as determined in section 11
1062 of the Consumer Financial Protection Agency 12
Act of 2009, only in accordance with regulations gov- 13
erning alternative mortgage transactions as issued by 14
the Consumer Financial Protection Agency for feder- 15
ally chartered housing creditors, in accordance with 16
the rulemaking authority granted to the Consumer 17
Financial Protection Agency with regard to federally 18
chartered housing creditors under laws other than this 19
section.. 20
(c) SECTION 804.Section 804 of the Alternative 21
Mortgage Transaction Parity Act of l982 (12 U.S.C. 3803) 22
is amended 23
(1) by striking subsection (c) and inserting the 24
following new subsection: 25

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(c) EFFECT OF STATE LAW. 1
(1) IN GENERAL.An alternative mortgage 2
transaction may be made by a housing creditor in ac- 3
cordance with this section, notwithstanding any State 4
Constitution, law, or regulation that prohibits an al- 5
ternative mortgage transaction. 6
(2) RULE OF CONSTRUCTION.For purposes of 7
this subsection, a State Constitution, law, or regula- 8
tion that prohibits an alternative mortgage trans- 9
action does not include any State Constitution, law, 10
or regulation that regulates mortgage transactions 11
generally, including any restriction on prepayment 12
penalties or late charges.; and 13
section: 15
(d) DUTIES OF CONSUMER FINANCIAL PROTECTION 16
AGENCY.The Consumer Financial Protection Agency 17
shall 18
(1) review the regulations identified by the 19
Comptroller of the Currency, the National Credit 20
Union Administration, and the Director of the Office 21
of Thrift Supervision (as those regulations exist on 22
the designated transfer date, as determined in section 23

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Act of 2009) as applicable under paragraphs (1), (2), 1
and (3) of subsection (a); 2
(2) determine whether such regulations are fair 3
and not deceptive and otherwise meet the objectives of 4
section 121 of the Consumer Financial Protection 5
Agency Act of 2009; and 6
(3) prescribe regulations under subsection 7
(a)(4) after the designated transfer date, as deter- 8
mined under such Act.. 9
(d) EFFECTIVE DATE AND SCOPE OF APPLICATION. 10
(1) EFFECTIVE DATE.This section shall take ef- 11
fect on the designated transfer date. 12
(2) SCOPE OF APPLICATION.The amendments 13
made by subsection (a) shall not affect any trans- 14
action covered by the Alternative Mortgage Trans- 15
action Parity Act of l982 which is entered into on or 16
SEC. 184. AMENDMENTS TO THE CONSUMER CREDIT PRO- 18
TECTION ACT. 19
(a) TRUTH IN LENDING ACT. 20
(1) SECTION 103.Section 103 of the Truth in 21
Lending Act (15 U.S.C. 1602) is amended by striking 22
subsection (b) and inserting the following new sub- 23
section: 24
(b) AGENCY DEFINITIONS. 25

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(1) BOARD.The term Board means the 1
Board of Governors of the Federal Reserve System. 2
Consumer Financial Protection Agency.. 4
(2) UNIVERSAL AMENDMENT RELATING TO 5
BOARD OF GOVERNORS OF THE FEDERAL RESERVE 6
SYSTEM. 7
(A) IN GENERAL.Except as provided in 8
subparagraph (B), the Truth in Lending Act (15 9
U.S.C. 1601 et seq.) is amended by striking 10
Board each place such term appears, includ- 11
ing in chapters 4 and 5 relating to credit billing 12
and consumer leases, and inserting Agency. 13
(B) EXCEPTIONS.The amendment de- 14
scribed in subparagraph (A) shall not apply to 15
sections 108(a) (as amended by paragraph (4)) 16
and 140(d). 17
(3) SECTION 105.Section 105(b) of the Truth in 18
Lending Act (15 U.S.C. 1604(b)) is amended by strik- 19
ing the first sentence and inserting the following: 20
The Agency shall publish a single, integrated disclo- 21
sure for mortgage loan transactions, including real es- 22
tate settlement cost statements, which include the dis- 23
closure requirements of this title, in conjunction with 24
the disclosure requirements of the Real Estate Settle- 25

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ment Procedures Act that, taken together, may apply 1
to transactions subject to both or either law. The pur- 2
pose of such model disclosure shall be to facilitate 3
compliance with the disclosure requirements of those 4
titles, and to aid the borrower or lessee in under- 5
standing the transaction by utilizing readily under- 6
standable language to simplify the technical nature of 7
the disclosures.. 8
Lending Act (15 U.S.C. 1607) is amended 10
(A) by striking subsection (a) and inserting 11
(a) ENFORCING AGENCIES.Subject to section 122 of 13
the Consumer Financial Protection Agency Act of 2009, 14
compliance with the requirements imposed under this title 15
shall be enforced as follows: 16
(1) Under section 8 of the Federal Deposit In- 17
surance Act, in the case of 18
(A) national banks, and Federal branches 19
and Federal agencies of foreign banks, by the 20
head of the agency responsible for chartering and 21
regulating national banks; 22
(B) member banks of the Federal Reserve 23
System (other than national banks), branches 24
and agencies of foreign banks (other than Fed- 25

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eral branches, Federal agencies, and insured 1
State branches of foreign banks), commercial 2
lending companies owned or controlled by for- 3
eign banks, and organizations operating under 4
section 25 or 25(a) of the Federal Reserve Act, 5
by the Board; 6
(C) depository institution insured by the 7
Federal Deposit Insurance Corporation (other 8
than members of the Federal Reserve System, 9
Federal savings associations, and savings and 10
loan holding companies) and insured State 11
branches of foreign banks, by the Board of Direc- 12
tors of the Federal Deposit Insurance Corpora- 13
tion; and 14
(D) Federal savings associations and sav- 15
ings and loan holding companies, by the Direc- 16
tor of the Office of Thrift Supervision. 17
(2) Under subtitle E of the Consumer Financial 18
Protection Agency Act of 2009, by the Agency. 19
(3) Under the Federal Credit Union Act, by the 20
head of the agency responsible for chartering and reg- 21
ulating Federal credit unions. 22
(4) Under the Federal Aviation Act of 1958, by 23
the Secretary of Transportation with respect to any 24
air carrier or foreign air carrier subject to that Act. 25

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(5) Under the Packers and Stockyards Act, 1
1921 (except as provided in section 406 of that Act), 2
by the Secretary of Agriculture with respect to any 3
activities subject to that Act. 4
(6) Under the Farm Credit Act of 1971, by the 5
Farm Credit Administration with respect to any Fed- 6
eral land bank, Federal land bank association, Fed- 7
eral intermediate credit bank, or production credit as- 8
sociation.; and 9
(B) by striking subsection (c) and inserting 10
(c) OVERALL ENFORCEMENT AUTHORITY OF THE 12
FEDERAL TRADE COMMISSION.Except to the extent that 13
enforcement of the requirements imposed under this title is 14
specifically committed to some other Government agency 15
under subsection (a) and subject to section 122 of the Con- 16
sumer Financial Protection Agency Act of 2009, the Federal 17
Trade Commission shall enforce such requirements. For the 18
purpose of the exercise by the Federal Trade Commission 19
of its functions and powers under the Federal Trade Com- 20
mission Act, a violation of any requirement imposed under 21
this title shall be deemed a violation of a requirement im- 22
posed under that Act. All of the functions and powers of 23
the Federal Trade Commission under the Federal Trade 24
Commission Act are available to the Commission to enforce 25

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compliance by any person with the requirements under this 1
title, irrespective of whether that person is engaged in com- 2
merce or meets any other jurisdictional tests in the Federal 3
Trade Commission Act.. 4
(5) UNIVERSAL AMENDMENT RELATING TO THE 5
FEDERAL TRADE COMMISSION. 6
Federal Trade Commission each place such 10
term appears and inserting Agency. 11
sections 108(c) (as amended by paragraph (4)) 14
and 129(m) (as amended by paragraph (7)). 15
(6) SECTION 127.Subparagraph (C) of section 16
127(b)(11) of the Truth in Lending Act (15 U.S.C. 17
1637(b)(11)) is amended to read as follows: 18
(C) Notwithstanding subparagraphs (A) 19
and (B), in the case of a creditor with respect to 20
which compliance with this title is enforced by 21
the Agency, the following statement, in a promi- 22
nent location on the front of the billing state- 23
ment, disclosed clearly and conspicuously: Min- 24
imum Payment Warning: Making only the re- 25

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quired minimum payment will increase the in- 1
terest you pay and the time it takes to repay 2
your balance. For example, making only the typ- 3
ical 5 percent minimum monthly payment on a 4
balance of $300 at an interest rate of 17 percent 5
would take 24 months to repay the balance in 6
full. For an estimate of the time it would take 7
to repay your balance, making only minimum 8
monthly payments, call the Consumer Financial 9
Protection Agency at this toll-free number: 10
[the blank space to be 11
filled in by the creditor]. A creditor who is sub- 12
ject to this subparagraph shall not be subject to 13
subparagraph (A) or (B).. 14
(7) SECTION 129.Section 129(m) of the Truth 15
in Lending Act (15 U.S.C. 1639(m)) is amended to 16
read as follows: 17
(m) CIVIL PENALTIES IN FEDERAL TRADE COMMIS- 18
SION ENFORCEMENT ACTIONS.For purposes of enforce- 19
ment by the Federal Trade Commission, any violation of 20
a regulation issued by the Agency pursuant to subsection 21
(l)(2) of this section shall be treated as a violation of a regu- 22
lation promulgated under section 18 of the Federal Trade 23
Commission Act (15 U.S.C. 57a) regarding unfair or decep- 24
tive acts or practices.. 25

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(b) FAIR CREDIT REPORTING ACT. 1
(1) SECTION 603.Section 603 of the Fair Credit 2
Reporting Act (15 U.S.C. 1681a) is amended 3
(A) by redesignating subsections (w) and 4
(x) as subsections (x) and (y), respectively; and 5
(B) by inserting after subsection (v) the fol- 6
lowing new subsection: 7
(w) AGENCY.The term Agency means the Con- 8
sumer Financial Protection Agency.. 9
(2) UNIVERSAL AMENDMENTS RELATING TO THE 10
FEDERAL TRADE COMMISSION.Other than in con- 11
nection with the amendment made by paragraph 12
(7)(A), the Fair Credit Reporting Act (15 U.S.C. 13
1681a) is amended 14
(A) by striking Federal Trade Commis- 15
sion each place such term appears and insert- 16
ing Agency; 17
(B) by striking Commission each place 18
such term appears (other than in connection 19
with the term amended in subparagraph (A)) 20
and inserting Agency; and 21
(C) by striking Federal banking agencies, 22
the National Credit Union Administration, and 23
the Commission shall jointly each place such 24

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term appears in sections 605(h)(2) and 1
623(a)(8)(A) and inserting Agency shall. 2
(3) SECTION 603.Section 603(k)(2) of the Fair 3
Credit Reporting Act (15 U.S.C. 1681a(k)(2)) is 4
amended by striking Board of Governors of the Fed- 5
eral Reserve System and inserting Agency. 6
(4) SECTION 604.Subsection 604(g) of the Fair 7
Credit Reporting Act (15 U.S.C. 1681b(g)) is amend- 8
ed 9
(A) by striking subparagraph (C) of para- 10
graph (3) and inserting the following new sub- 11
paragraph: 12
(C) as otherwise determined to be nec- 13
essary and appropriate, by regulation or order 14
and subject to paragraph (6), by the Agency 15
(with respect to any covered person subject to the 16
jurisdiction of such agency under paragraph (2) 17
of section 621(b)), or the applicable State insur- 18
ance authority (with respect to any person en- 19
gaged in providing insurance or annuities).; 20
and 21
(B) by striking paragraph (5) and inserting 22
the following new paragraph: 23
(5) REGULATIONS REQUIRED.The Agency 24
may, after notice and opportunity for comment, pre- 25

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scribe regulations that permit transactions under 1
paragraph (2) that are determined to be necessary 2
and appropriate to protect legitimate operational, 3
transactional, risk, consumer, and other needs (and 4
which shall include permitting actions necessary for 5
administrative verification purposes), consistent with 6
the intent of paragraph (2) to restrict the use of med- 7
ical information for inappropriate purposes.. 8
(5) SECTION 611.Section 611(e)(2) of the Fair 9
Credit Reporting Act (15 U.S.C.1681i(e)(2)) is 10
amended to read as follows: 11
(2) EXCLUSION.Complaints received or ob- 12
tained by the Agency pursuant to its investigative au- 13
thority under the Consumer Financial Protection 14
Agency Act of 2009 shall not be subject to paragraph 15
(1).. 16
(6) SECTION 615.Section 615(h)(6)(A) of the 17
Fair Credit Reporting Act (15 U.S.C. 18
1681m(h)(6)(A)) is amended to read as follows: 19
(A) RULES REQUIRED.The Agency shall 20
prescribe rules.. 21
Reporting Act (15 U.S.C. 1681s) is amended 23

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(a) ENFORCEMENT BY FEDERAL TRADE COMMIS- 1
SION. 2
(1) IN GENERAL.Subject to section 122 of the 3
Consumer Financial Protection Agency Act of 2009, 4
compliance with the requirements imposed under this 5
title shall be enforced under the Federal Trade Com- 6
mission Act by the Federal Trade Commission with 7
respect to consumer reporting agencies and all other 8
persons subject thereto, except to the extent that en- 9
forcement of the requirements imposed under this title 10
is specifically committed to some other government 11
agency under subsection (b) hereof. For the purpose of 12
the exercise by the Federal Trade Commission of its 13
functions and powers under the Federal Trade Com- 14
mission Act, a violation of any requirement or prohi- 15
bition imposed under this title shall constitute an un- 16
fair or deceptive act or practice in commerce in viola- 17
tion of section 5(a) of the Federal Trade Commission 18
Act and shall be subject to enforcement by the Federal 19
Trade Commission under section 5(b) of such Act 20
with respect to any consumer reporting agency or 21
person subject to enforcement by the Federal Trade 22
Commission pursuant to this subsection, irrespective 23
of whether that person is engaged in commerce or 24
meets any other jurisdictional tests in the Federal 25

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Trade Commission Act. The Federal Trade Commis- 1
sion shall have such procedural, investigative, and en- 2
forcement powers (subject to section 122 of the Con- 3
sumer Financial Protection Agency Act of 2009), in- 4
cluding the power to issue procedural rules in enforc- 5
ing compliance with the requirements imposed under 6
this title and to require the filing of reports, the pro- 7
duction of documents, and the appearance of wit- 8
nesses as though the applicable terms and conditions 9
of the Federal Trade Commission Act were part of 10
this title. Any person violating any of the provisions 11
of this title shall be subject to the penalties and enti- 12
tled to the privileges and immunities provided in the 13
Federal Trade Commission Act as though the applica- 14
ble terms and provisions thereof were part of this 15
title. 16
(2) CIVIL MONEY PENALTIES. 17
(A) IN GENERAL.Subject to section 122 18
of the Consumer Financial Protection Agency 19
Act of 2009, in the event of a knowing violation, 20
which constitutes a pattern or practice of viola- 21
tions of this title, the Commission may com- 22
mence a civil action to recover a civil penalty in 23
a district court of the United States against any 24
person that violates this title. In such action, 25

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such person shall be liable for a civil penalty of 1
not more than $2,500 per violation. 2
(B) FACTORS IN DETERMINING AMOUNT. 3
In determining the amount of a civil penalty 4
under subparagraph (A), the court shall take 5
into account the degree of culpability, any his- 6
tory of prior such conduct, ability to pay, effect 7
on ability to continue to do business, and such 8
other matters as justice may require. 9
(3) EXCEPTION.Notwithstanding paragraph 10
(2), a court may not impose any civil penalty on a 11
person for a violation of section 623(a)(1) unless the 12
person has been enjoined from committing the viola- 13
tion, or ordered not to commit the violation, in an ac- 14
tion or proceeding brought by or on behalf of the Fed- 15
eral Trade Commission or the Agency, as the case 16
may be, and has violated the injunction or order, and 17
the court may not impose any civil penalty for any 18
violation occurring before the date of the violation of 19
the injunction or order.; 20
(B) by striking subsection (b) and inserting 21
(b) ENFORCEMENT BY OTHER AGENCIES.Subject to 23
section 122 of the Consumer Financial Protection Agency 24
Act of 2009, compliance with the requirements imposed 25

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under this title with respect to consumer reporting agencies, 1
persons who use consumer reports from such agencies, per- 2
sons who furnish information to such agencies, and users 3
of information that are subject to subsection (d) of section 4
615 shall be enforced as follows: 5
section 25 or 25A of the Federal Reserve Act, by 19
the Board of Governors of the Federal Reserve 20
System; 21
(C) banks insured by the Federal Deposit 22
Insurance Corporation (other than members of 23
the Federal Reserve System, Federal savings as- 24
sociations, and savings and loan holding compa- 25

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H.L.C.
nies) and insured State branches of foreign 1
banks, by the Board of Directors of the Federal 2
Deposit Insurance Corporation; and 3
Protection Agency Act of 2009, by the Agency in the 8
case of a covered person under that Act. 9
National Credit Union Administration Board with 11
respect to any Federal credit union. 12
(4) Under subtitle IV of title 49, United States 13
Code, by the Secretary of Transportation, with respect 14
to all carriers subject to the jurisdiction of the Surface 15
Transportation Board. 16

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(7) Under the Commodity Exchange Act, with 1
respect to a person subject to the jurisdiction of the 2
Commodity Futures Trading Commission. 3
(8) Under the Federal securities law and any 4
other laws subject to the jurisdiction of the Securities 5
and Exchange Commission, with respect to a person 6
subject to the jurisdiction of the Securities and Ex- 7
change Commission. 8
Any term used in paragraph (1) that is not defined in this 9
title or otherwise defined in section 3(s) of the Federal De- 10
posit Insurance Act shall have the meaning given to such 11
term in section 1(b) of the International Banking Act of 12
1978.; 13
(C) by striking subsection (e) and inserting 14
(e) REGULATORY AUTHORITY.The Agency shall 16
prescribe such regulations as necessary to carry out the pur- 17
poses of this Act with respect to a covered person described 18
in subsection (b).; and 19
(D) in the heading of subsection (g) by 20
striking FTC. 21
Reporting Act (15 U.S.C. 1681s2) is amended 23
(A) by amending subparagraph (a)(7)(D) to 24
read as follows: 25

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H.L.C.
(D) MODEL DISCLOSURE. 1
(i) DUTY OF AGENCY TO PREPARE. 2
The Agency shall prescribe a brief model 3
disclosure a financial institution may use 4
to comply with subparagraph (A), which 5
shall not exceed 30 words. 6
(ii) USE OF MODEL NOT RE- 7
QUIRED.No provision of this paragraph 8
shall be construed as requiring a financial 9
institution to use any such model form pre- 10
scribed by the Agency. 11
(iii) COMPLIANCE USING MODEL.A 12
financial institution shall be deemed to be 13
in compliance with subparagraph (A) if the 14
financial institution uses any such model 15
form prescribed by the Agency, or the finan- 16
cial institution uses any such model form 17
and rearranges its format.. 18
(B) by amending subsection (e) to read as 19
follows: 20
(e) ACCURACY GUIDELINES AND REGULATIONS RE- 21
QUIRED. 22
(1) GUIDELINES.The Agency shall, with re- 23
spect to the entities that are subject to its enforcement 24
authority under section 621 25

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(A) establish and maintain guidelines for 1
use by each person that furnishes information to 2
a consumer reporting agency regarding the accu- 3
racy and integrity of the information relating to 4
consumers that such entities furnish to consumer 5
reporting agencies, and update such guidelines 6
as often as necessary; and 7
(B) prescribe regulations requiring each 8
person that furnishes information to a consumer 9
reporting agency to establish reasonable policies 10
and procedures or implementing the guidelines 11
established pursuant to subparagraph (A). 12
(2) CRITERIA.In developing the guidelines re- 13
quired by paragraph (1)(A), the Agency shall 14
(A) identify patterns, practices, and spe- 15
cific forms of activity that can compromise the 16
accuracy and integrity of information furnished 17
to consumer reporting agencies; 18
(B) review the methods (including techno- 19
logical means) used to furnish information relat- 20
ing to consumers to consumer reporting agencies; 21
(C) determine whether persons that furnish 22
information to consumer reporting agencies 23
maintain and enforce policies to ensure the accu- 24

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H.L.C.
racy and integrity of information furnished to 1
consumer reporting agencies; and 2
(D) examine the policies and processes that 3
persons that furnish information to consumer re- 4
porting agencies employ to conduct reinvestiga- 5
tions and correct inaccurate information relating 6
to consumers that has been furnished to con- 7
sumer reporting agencies. 8
(c) EQUAL CREDIT OPPORTUNITY ACT. 9
(1) SECTION 701.Section 701 of the Equal 10
Credit Opportunity Act (15 U.S.C. 1691) is amended 11
by striking Board each place such term appears 12
and inserting Agency. 13
(2) SECTION 702.Section 702(c) of the Equal 14
Credit Opportunity Act (15 U.S.C. 1691a) is amend- 15
ed to read as follows: 16
(c) The term Agency means the Consumer Financial 17
Protection Agency.. 18
Credit Opportunity Act (15 U.S.C. 1691b) is amend- 20
ed 21
(A) by striking subsection (b); 22
(B) in subsection (a) 23
(i) by striking (1); and 24

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H.L.C.
(ii) by redesignating paragraphs (2), 1
(3), (4), and (5) as subsections (b), (c), (d), 2
and (e), respectively; 3
(C) in subsection (c) (as so redesignated) 4
(i) by striking paragraph (2) and 5
inserting subsection (b); and 6
(ii) by striking such paragraph and 7
inserting such subsection; 8
(D) in subsection (d) (as so redesignated) 9
(i) by striking subsection and insert- 10
ing section 11
(ii) by striking Act and inserting 12
title; and 13
(iii) by striking this paragraph and 14
inserting this subsection; and 15
(E) by striking Board each place such 16
term appears in such section and inserting 17
Agency. 18
Credit Opportunity Act (15 U.S.C. 1691c) is amend- 20
ed 21
(A) in subsection (a) 22
(i) in the matter preceding paragraph 23
(1), by striking Compliance and inserting 24
Subject to section 122 of the Consumer Fi- 25

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H.L.C.
nancial Protection Agency Act of 2009, 1
compliance; 2
(ii) in paragraph (1)(A), by striking 3
Office of the Comptroller of the Currency 4
and inserting head of the agency respon- 5
sible for chartering and regulating national 6
banks; 7
(iii) in paragraph (1)(B), by striking 8
and after the semicolon; 9
(iv) in paragraph (1)(C), by inserting 10
(v) by inserting after subparagraph 12
(C) of paragraph (1) the following new sub- 13
paragraph: 14
(D) savings associations and savings and 15
loan holding companies by the Director of the 16
Office of Thrift Supervision;; and 17
(vi) by amending paragraph (2) to 18
read as follows: 19
(2) Subtitle E of the Consumer Financial Pro- 20
tection Agency Act of 2009, by the Agency.; 21
(c) OVERALL ENFORCEMENT AUTHORITY OF FED- 24
ERAL TRADE COMMISSION.Except to the extent that en- 25

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H.L.C.
forcement of the requirements imposed under this title is 1
compliance by any person with the requirements imposed 13
under this title, irrespective of whether that person is en- 14
gaged in commerce or meets any other jurisdictional tests 15
in the Federal Trade Commission Act, including the power 16
to enforce any regulation prescribed by the Director under 17
this title in the same manner as if the violation had been 18
a violation of a Federal Trade Commission trade regulation 19
rule.; and 20
(C) in subsection (d), by striking Board 21
(5) SECTION 704a.Section 704A(a)(1) of the 23
Equal Credit Opportunity Act (15 U.S.C. 1691c 24

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H.L.C.
1(a)(1)) is amended in by striking Board and in- 1
serting Agency. 2
Credit Opportunity Act (15 U.S.C. 1691d) is amend- 4
ed 5
(A) in subsection (f), by striking Board 6
each place such term appears and inserting 7
Agency; and 8
(B) in subsection (g), by striking Board 9
Credit Opportunity Act (15 U.S.C. 1691e) is amend- 12
ed 13
(A) in subsection (e) 14
(i) by striking Board each place 15
such term appears and inserting Agency; 16
and 17
(ii) by striking Federal Reserve Sys- 18
tem and inserting Consumer Financial 19
Protection Agency; 20
(B) in subsection (f), by striking two 21
years each place such term appears and insert- 22
ing 5 years; 23
(C) in subsection (g) 24

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(i) by striking The agencies having, 1
in the 1st sentence, and inserting The 2
Agency and the agencies having 3
(ii) by striking Each agency re- 4
ferred, in the 2nd sentence, and inserting 5
The Agency and each agency referred; 6
(iii) by striking Each such agency, 7
in the 3rd sentence, and inserting The 8
Agency and each such agency; and 9
(iv) by striking whenever the agency 10
in the 3rd sentence, and inserting when- 11
ever the Agency or an agency having re- 12
sponsibility for administrative enforcement 13
under section 704; and 14
(D) in subsection (k) 15
(i) by striking Whenever an agency 16
and inserting Whenever the Agency or an 17
agency; and 18
(ii) by striking the agency shall no- 19
tify and inserting the Agency, or an 20
agency referred to in any such paragraph, 21
as the case may be, shall notify. 22
Credit Opportunity Act (15 U.S.C. 1691f) is amended 24

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H.L.C.
(d) FAIR DEBT COLLECTION PRACTICES ACT. 3
(1) SECTION 803.Section 803 of the Fair Debt 4
Collection Practices Act (15 U.S.C. 1692a) is amend- 5
ed 6
(A) by redesignating paragraphs (1), (2), 7
(3), (4), (5), (6), (7), and (8) as paragraphs (2), 8
(3), (4), (5), (6), (7), (8), and (9), respectively; 9
and 10
(B) by inserting before paragraph (2) (as so 11
redesignated) the following new paragraph: 12
(1) The term Agency means the Consumer Fi- 13
nancial Protection Agency.. 14
(2) SECTION 813.Section 813(e) of the Fair 15
Debt Collection Practices Act (15 U.S.C. 1692k(e)) is 16
amended by striking Commission and inserting 17
Agency. 18
Collection Practices Act (15 U.S.C. 1692l) is amend- 20
ed 21
(a) FEDERAL TRADE COMMISSION.Subject to sec- 24
tion 122 of the Consumer Financial Protection Agency Act 25

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of 2009, compliance with this title shall be enforced by the 1
Commission, except to the extent that enforcement of the re- 2
quirements imposed under this title is specifically com- 3
mitted to another agency under subsection (b). For purpose 4
of the exercise by the Commission of its functions and pow- 5
ers under the Federal Trade Commission Act, a violation 6
of this title shall be deemed an unfair or deceptive act or 7
practice in violation of that Act. All of the functions and 8
powers of the Commission under the Federal Trade Com- 9
mission Act are available to the Commission to enforce com- 10
pliance by any person with this title, irrespective of whether 11
that person is engaged in commerce or meets any other ju- 12
risdictional tests in the Federal Trade Commission Act, in- 13
cluding the power to enforce the provisions of this title in 14
the same manner as if the violation had been a violation 15
of a Federal Trade Commission trade regulation rule.; 16
(B) in subsection (b) 17
ENFORCEMENT BY OTHER AGENCY.Sub- 20
ject to section 122 of the Consumer Finan- 21
cial Protection Agency Act of 2009, compli- 22
ance. 23
Office of the Comptroller of the Currency; 25

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banks;; 3
paragraph: 10
(vi) by striking paragraph (2) and in- 14
serting the following new paragraph: 15
(2) subtitle E of the Consumer Financial Pro- 16
tection Agency Act of 2009, by the Agency;; and 17
(C) by striking subsection (d) and inserting 18
the following new subsection:. 19
(d) REGULATIONS.The Agency may prescribe regu- 20
lations with respect to the collection of debts by any debt 21
collector.. 22
(4) SECTION 815.Section 815 (15 U.S.C. 23
1692m) is amended 24

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H.L.C.
(A) in the section heading, by striking 1
Commission and inserting Agency; 2
and 3
such term appears and inserting Agency. 5
1692o) is amended by striking Commission each 7
place such term appears and inserting Agency. 8
(e) ELECTRONIC FUND TRANSFER ACT. 9
(1) SECTION 903.Section 903 of the Electronic 10
Fund Transfer Act (15 U.S.C. 1693a) is amended 11
(A) by striking paragraph (3) and inserting 12
(3) the term Agency means the Consumer Fi- 14
nancial Protection Agency;; and 15
(B) in paragraph (6), by striking Board 16
Fund Transfer Act (15 U.S.C. 1693b) is amended by 19
striking Board each place such term appears and 20
inserting Agency. 21
Fund Transfer Act (15 U.S.C. 1693c) is amended by 23

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H.L.C.
(4) SECTION 906.Section 906(b) of the Elec- 1
tronic Fund Transfer Act (15 U.S.C. 1693d(b)) is 2
amended by striking Board and inserting Agen- 3
cy. 4
tronic Fund Transfer Act (15 U.S.C. 1693e(b)) is 6
cy. 8
(6) SECTION 908.Section 908(f)(7) of the Elec- 9
tronic Fund Transfer Act (15 U.S.C. 1693f(f)(7)) is 10
cy. 12
(7) SECTION 910.Section 910(a)(1)(E) of the 13
Electronic Fund Transfer Act (15 U.S.C. 14
1693h(a)(1)(E)) is amended by striking Board and 15
(8) SECTION 911.Section 911(b)(3) of the Elec- 17
tronic Fund Transfer Act (15 U.S.C. 1693i(b)(3) is 18
cy. 20
(9) SECTION 915.Section 915(d) of the Elec- 21
tronic Fund Transfer Act (15 U.S.C. 1693m(d)) is 22
amended 23
(A) by striking Board each place such 24
term appears and inserting Agency; and 25

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H.L.C.
(B) by striking Federal Reserve System 1
and inserting Consumer Financial Protection 2
Agency. 3
Fund Transfer Act (15 U.S.C. 1693o) is amended 5
(i) by striking Compliance and in- 7
serting Subject to section 122 of the Con- 8
sumer Financial Protection Agency Act of 9
2009, compliance; 10
banks; and 15
(iii) by striking paragraph (2) and in- 16
serting: 17

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H.L.C.
compliance by any person subject to the jurisdiction of the 11
Commission with the requirements imposed under this title, 12
irrespective of whether that person is engaged in commerce 13
or meets any other jurisdictional tests in the Federal Trade 14
Commission Act.. 15
Fund Transfer Act (15 U.S.C. 1693p) is amended by 17
Fund Transfer Act (15 U.S.C. 1693q) is amended by 21
Fund Transfer Act (15 U.S.C. 1693r) is amended by 25

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H.L.C.
inserting Agency. 2
(f) AMENDMENTS TO HOEPA RELATING TO THE 3
TRUTH IN LENDING ACT.Section 158 of the Home Owner- 4
ship and Equity Protection Act of 1994 (15 U.S.C. 1601 5
nt.) (relating to hearings on home equity lending) is amend- 6
ed 7
(1) in subsection (a), by striking Board of Gov- 8
ernors of the Federal Reserve System, in consultation 9
with the Consumer Advisory Council of the Board, 10
and inserting Consumer Financial Protection Agen- 11
cy, in consultation with the Advisory Board to the 12
Agency; and 13
(2) in subsection (b), by striking Board of Gov- 14
ernors of the Federal Reserve System and inserting 15
(g) AMENDMENT TO THE FAIR AND ACCURATE CREDIT 17
TRANSACTIONS ACT OF 2003 RELATING TO THE FAIR 18
CREDIT REPORTING ACT.Section 214(b)(1) of the Fair 19
and Accurate Credit Transactions Act of 2003 (15 U.S.C. 20
1681s3 nt.) is amended by striking The Federal banking 21
agencies, the National Credit Union Administration, and 22
the Commission, with respect to the entities that are subject 23
to their respective enforcement authority under section 621 24
of the Fair Credit Reporting Act and and inserting The 25

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H.L.C.
Consumer Financial Protection Agency, with respect to a 1
person subject to the enforcement authority of the Agency, 2
the Commodity Futures Trading Commission, and. 3
SEC. 185. AMENDMENTS TO THE EXPEDITED FUNDS AVAIL- 4
ABILITY ACT. 5
(a) SECTION 605.Section 605(f)(1) of the Expedited 6
Funds Availability Act (12 U.S.C. 4004(f)(1)) is amended 7
by inserting , in consultation with the Director of the Con- 8
sumer Financial Protection Agency,after Board. 9
(b) SECTION 609.Section 609(a) of the Expedited 10
Funds Availability Act (12 U.S.C. 4008(a)) is amended by 11
inserting , in consultation with the Director of the Con- 12
SEC. 186. AMENDMENTS TO THE FEDERAL DEPOSIT INSUR- 14
ANCE ACT. 15
(a) SECTION 8.Section 8(t) the Federal Deposit In- 16
surance Act (12 U.S.C. 1818(t)) is amended by adding at 17
the end the following new paragraph: 18
(6) REFERRAL TO CONSUMER FINANCIAL PRO- 19
TECTION COMMISSION.Each appropriate Federal 20
banking agency shall make a referral to the Consumer 21
Financial Protection Agency when the Federal bank- 22
ing agency has a reasonable belief that a violation of 23
an enumerated consumer law, as defined in section 24
122(e)(2) of the Consumer Financial Protection Agen- 25

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H.L.C.
cy Act of 2009, by any insured depository institution 1
or institution-affiliated party within the jurisdiction 2
of that appropriate Federal banking agency.. 3
(b) SECTION 43.Section 43 of the Federal Deposit 4
Insurance Act (12 U.S.C. 1831t) is amended 5
(1) in subsection (c), by striking Federal Trade 6
(2) in subsection (d), by striking Federal Trade 8
(3) in subsection (e) 10
(A) in paragraph (2)(B), by striking Fed- 11
eral Trade Commission and inserting Agen- 12
cy; and 13
(B) by adding at the end the following new 14
paragraph: 15
(c) SECTION 43(f).Section 43(f) of the Federal De- 18
posit Insurance Act (12 U.S.C. 1831t(f)) is amended 19
(1) by striking paragraph (1) and inserting the 20
following new paragraph: 21
(1) LIMITED ENFORCEMENT AUTHORITY.Com- 22
pliance with the requirements of subsections (b), (c) 23
and (e), and any regulation prescribed or order issued 24
under such subsection, shall be enforced under the 25

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H.L.C.
Consumer Financial Protection Agency Act of 2009 1
by the Agency with respect to any person (and with- 2
out regard to the provision of a consumer financial 3
product or service).; and 4
(2) in paragraph (2), by striking subparagraph 5
(C) and inserting the following new subparagraph: 6
(C) LIMITATION ON STATE ACTION WHILE 7
FEDERAL ACTION PENDING.If the Agency has 8
instituted an enforcement action for a violation 9
of this section, no appropriate State supervisory 10
may, during the pendency of such action, bring 11
an action under this section against any defend- 12
ant named in the complaint of the Agency for 13
any violation of this section that is alleged in 14
that complaint.. 15
SEC. 187. AMENDMENTS TO THE GRAMM-LEACH-BLILEY 16
ACT. 17
(a) SECTION 504.Section 504(a)(1) of the Gramm- 18
Leach-Bliley Act (15 U.S.C. 6804(a)(1)) is amended 19
(1) by striking The Federal banking agencies, 20
the National Credit Union Administration, the Sec- 21
retary of the Treasury, and inserting The Con- 22
sumer Financial Protection Agency and; and 23
(2) by striking , and the Federal Trade Com- 24
mission. 25

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H.L.C.
(b) SECTION 505. 1
(1) Section 505(a) of the Gramm-Leach-Bliley 2
Act (15 U.S.C. 6805(a)) is amended 3
(A) in the matter preceding paragraph (1), 4
by striking This subtitle and the regulations 5
prescribed thereunder shall be enforced by and 6
inserting Subject to section 122 of the Con- 7
sumer Financial Protection Agency Act of 2009, 8
this subtitle and the regulations prescribed under 9
this title shall be enforced by the Consumer Fi- 10
nancial Protection Agency,; and 11
(B) by inserting after paragraph (7) the fol- 12
(8) Under the Consumer Financial Protection 14
Agency Act of 2009, by the Consumer Financial Pro- 15
tection Agency in the case of financial institutions 16
and other covered persons and service providers sub- 17
ject to the jurisdiction of the Agency under that Act, 18
but not with respect to the standards under section 19
501.. 20
(2) Section 505(b)(1) of the Gramm-Leach-Bliley 21
Act (15 U.S.C. 6805(b)(1)) is amended by inserting 22
, other than the Consumer Financial Protection 23
Agency, after described in subsection (a). 24

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H.L.C.
SEC. 188. AMENDMENTS TO THE HOME MORTGAGE DISCLO- 1
SURE ACT OF 1975. 2
(a) SECTION 303.Section 303 of the Home Mortgage 3
Disclosure Act of 1975 (12 U.S.C. 2802) is amended 4
(1) by redesignating paragraphs (1), (2), (3), 5
(4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), 6
and (7), respectively; and 7
(2) by inserting before paragraph (2) (as so re- 8
designated) the following new paragraph: 9
(b) UNIVERSAL AMENDMENT RELATING TO AGENCY. 12
Except as provided in subsections (c), (d), (e), and (f), the 13
Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 14
11) is amended by striking Board each place such term 15
appears and inserting Agency. 16
(c) SECTION 304.Section 304 of the Home Mortgage 17
Disclosure Act of 1975 (12 U.S.C. 2803(h)) is amended 18
(A) by striking and after the semicolon at 20
the end of paragraph (3); 21
(B) by striking and gender in paragraph 22
(4), and inserting age, and gender; 23
(C) by striking the period at the end of 24
paragraph (4) and inserting a semicolon; and 25

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H.L.C.
(D) by inserting after paragraph (4) the fol- 1
lowing new paragraphs: 2
(5) the number and dollar amount of mortgage 3
loans grouped according to the following measure- 4
ments: 5
(A) the total points and fees payable at 6
origination in connection with the mortgage as 7
determined by the Agency, taking into account 8
section 103(aa)(4) of the Truth in Lending Act 9
(15 U.S.C. 1602(aa)(4)); 10
(B) the difference between the annual per- 11
centage rate associated with the loan and a 12
benchmark rate or rates for all loans; 13
(C) the term in months of any prepayment 14
penalty or other fee or charge payable on repay- 15
ment of some portion of principal or the entire 16
principal in advance of scheduled payments; and 17
(D) such other information as the Agency 18
may require; and 19
loans and completed applications grouped according 21
to the following measurements: 22
(A) the value of the real property pledged 23
or proposed to be pledged as collateral; 24

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(B) the actual or proposed term in months 1
of any introductory period after which the rate 2
of interest may change; 3
(C) the presence of contractual terms or 4
proposed contractual terms that would allow the 5
mortgagor or applicant to make payments other 6
than fully-amortizing payments during any por- 7
tion of the loan term; 8
(D) the actual or proposed term in months 9
of the mortgage loan; 10
(E) the channel through which application 11
was made, including retail, broker, and other 12
relevant categories; 13
(F) as the Agency may determine to be ap- 14
propriate, a unique identifier that identifies the 15
loan originator as set forth in Section 1503 of 16
the Secure and Fair Enforcement for Mortgage 17
Licensing Act of 2008; 18
(G) as the Agency may determine to be ap- 19
propriate, a universal loan identifier; 20
(H) as the Agency may determine to be 21
appropriate, the parcel number that corresponds 22
to the real property pledged or proposed to be 23
pledged as collateral; 24

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(I) the credit score of mortgage applicants 1
and mortgagors in such form as the Agency may 2
prescribe, except that the Agency shall modify or 3
require modification of credit score data that is 4
or will be available to the public to protect the 5
compelling privacy interest of the mortgage ap- 6
plicant or mortgagors; and 7
(J) such other information as the Agency 8
may require.; 9
(2) by striking subsection (h) and inserting the 10
(h) SUBMISSION TO AGENCIES. 12
(1) IN GENERAL.The data required to be dis- 13
closed under subsection (b) shall be submitted to the 14
Agency or to the appropriate agency for any institu- 15
tion reporting under this title, in accordance with 16
regulations prescribed by the Agency. Institutions will 17
not be required to report new data required under sec- 18
tion 188(c) before the first January 1 that occurs 19
after the end of the 9-month period beginning on the 20
date that regulations prescribed by the Agency are 21
prescribed in final form. 22
(2) REGULATIONS. Notwithstanding the re- 23
quirement of section 304(a)(2)(A) for disclosure by 24

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census tract, the Agency, in cooperation with other 1
appropriate regulators, including 2
(A) the head of the agency responsible for 3
chartering and regulating national banks for na- 4
tional banks and Federal branches, Federal 5
agencies of foreign banks, and savings associa- 6
tions; 7
(B) the Federal Deposit Insurance Cor- 8
poration for depository institutions insured by 9
the Federal Deposit Insurance Corporation 10
(other than members of the Federal Reserve Sys- 11
tem, Federal savings associations, and savings 12
and loan holding companies) and insured State 13
branches of foreign banks; 14
(C) the Director of the Office of Thrift Su- 15
pervision for Federal savings associations and 16
savings and loan holding companies; 17
(D) the National Credit Union Adminis- 18
tration Board for credit unions; and 19
(E) the Secretary of Housing and Urban 20
Development for other lending institutions not 21
regulated by an agency referred to in subpara- 22
graphs (A), (B), (C), or (D), 23
shall develop regulations prescribing the format for 24
such disclosures, the method for submission of the 25

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data to the appropriate regulatory agency, and the 1
procedures for disclosing the information to the pub- 2
lic. 3
(3) REQUIRED DISCLOSURES.The regulations 4
prescribed under paragraph (2) shall require the col- 5
lection of data required to be disclosed under sub- 6
section (b) with respect to loans sold by each institu- 7
tion reporting under this title, and, in addition, shall 8
require disclosure of the class of the purchaser of such 9
loans. 10
(4) ADDITIONAL DATA OR EXPLANATIONS.Any 11
reporting institution may submit in writing to the 12
Agency or to the appropriate agency such additional 13
data or explanations as it deems relevant to the deci- 14
sion to originate or purchase mortgage loans.; 15
(3) in subsection (i), by striking subsection 16
(b)(4) and inserting paragraphs (4), (5), and (6) of 17
subsection (b); 18
(4) in subsection (j) 19
(A) by striking (as where such term ap- 20
pears in paragraph (1) and inserting (con- 21
taining loan-level and application-level informa- 22
tion relating to disclosures required under sub- 23
sections (a) and (b) and as otherwise; 24

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(B) by striking in the format in which 1
such information is maintained by the institu- 2
tion where such term appears in paragraph 3
(2)(A), and inserting in such formats as the 4
Agency may require; and 5
(C) by striking paragraph (3) and inserting 6
(3) CHANGE OF FORM NOT REQUIRED.A de- 8
pository institution meets the disclosure requirement 9
of paragraph (1) if the institution provides the infor- 10
mation required under such paragraph in such for- 11
mats as the Agency may require.; and 12
(5) by striking paragraph (2) of subsection (m) 13
and inserting the following new paragraph: 14
(2) FORM OF INFORMATION.In complying 15
with paragraph (1), a depository institution shall 16
provide the person requesting the information with a 17
copy of the information requested in such formats as 18
the Agency may require.. 19
(d) SECTION 305.Section 305 of the Home Mortgage 20
(1) by striking subsection (b) and inserting the 22

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(b) POWERS OF CERTAIN OTHER AGENCIES.Com- 1
pliance with the requirements imposed under this title shall 2
be enforced under 3
(1) section 8 of the Federal Deposit Insurance 4
Act, in the case of 5
by the Board; 18
(C) depository institutions insured by the 19

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tion; and 2
(D) Federal savings associations, and sav- 3
tor of the Office of Thrift Supervision; 5
tection Agency Act of 2009, by the Agency; 7
(3) the Federal Credit Union Act, by the Ad- 8
ministrator of the National Credit Union Adminis- 9
tration with respect to any credit union; and 10
(4) other lending institutions, by the Secretary 11
of Housing and Urban Development. The terms used 12
in paragraph (1) that are not defined in this title or 13
otherwise defined in section 3(s) of the Federal De- 14
posit Insurance Act (12 U.S.C. 1813(s)) shall have the 15
meaning given to them in section 1(b) of the Inter- 16
national Banking Act of 1978 (12 U.S.C. 3101). 17
The terms used in paragraph (1) that are not defined in 18
this title or otherwise defined in section 3(s) of the Federal 19
Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the 20
meaning given to them in section 1(b) of the International 21
Banking Act of 1978.; and 22
(2) by inserting at the end of section 305 the fol- 23

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(d) OVERALL ENFORCEMENT AUTHORITY OF THE 1
CONSUMER FINANCIAL PROTECTION AGENCY.Subject to 2
Act of 2009, enforcement of the requirements imposed under 4
this title is committed to each of the agencies under sub- 5
section (b). The Agency may exercise its authorities under 6
the Consumer Financial Protection Agency Act of 2009 to 7
exercise principal authority to examine and enforce compli- 8
ance by any person with the requirements under this title.. 9
(e) SECTION 306.Subsection 306(b) of the Home 10
Mortgage Disclosure Act of 1975 (12 U.S.C. 2805(b)) is 11
(b) The Agency may, by regulation, exempt from the 13
requirements of this title any State chartered depository in- 14
stitution within any State or subdivision of any state if 15
the Agency determines that, under the law of such State 16
or subdivision, that institution is subject to requirements 17
substantially similar to those imposed under this title, and 18
that such law contains adequate provisions for enforcement. 19
Notwithstanding any other provision of this subsection, 20
compliance with the requirements imposed under this sub- 21
section shall be enforced by the head of the agency respon- 22
sible for chartering and regulating national banks under 23
section 8 of the Federal Deposit Insurance Act in the case 24
of national banks and savings association the deposits of 25

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which are insured by the Federal Deposit Insurance Cor- 1
poration.. 2
(f) SECTION 307.Section 307 of the Home Mortgage 3
Disclosure Act of 1975 (12 U.S.C. 2806) is amended to read 4
as follows: 5
SEC. 307. RESEARCH AND IMPROVED METHODS. 6
(a) ENHANCED COMPLIANCE IN ECONOMICAL MAN- 7
NER. 8
(1) IN GENERAL.The Director of the Con- 9
sumer Financial Protection Agency, with the assist- 10
ance of the Secretary, the Director of the Bureau of 11
the Census, the Board of Governors of the Federal Re- 12
serve System, the Federal Deposit Insurance Corpora- 13
tion, and such other persons as the Consumer Finan- 14
cial Protection Agency deems appropriate, shall de- 15
velop or assist in the improvement of, methods of 16
matching addresses and census tracts to facilitate 17
compliance by depository institutions in as economi- 18
cal a manner as possible with the requirements of this 19
title. 20
(2) AUTHORIZATION OF APPROPRIATION. 21
There is authorized to be appropriated such sums as 22
may be necessary to carry out this subsection. 23
(3) AUTHORITY OF AGENCY.The Director of 24
the Consumer Financial Protection Agency is author- 25

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ized to utilize, contract with, act through, or com- 1
pensate any person or agency in order to carry out 2
this subsection. 3
(b) RECOMMENDATIONS TO THE CONGRESS.The 4
Director of the Consumer Financial Protection Agency shall 5
recommend to the Committee on Financial Services of the 6
House of Representatives and the Committee on Banking, 7
Housing, and Urban Affairs of the Senate such additional 8
legislation as the Director of the Consumer Financial Pro- 9
tection Agency deems appropriate to carry out the purpose 10
of this title.. 11
SEC. 189. AMENDMENTS TO DIVISION D OF THE OMNIBUS 12
APPROPRIATIONS ACT, 2009. 13
(a) Section 626(a) of title VI of division D of the Om- 14
nibus Appropriations Act, 2009 (15 U.S.C. 1638 nt.) (as 15
amended by the Credit Card Accountability Responsibility 16
and Disclosure Act of 2009) is amended 17
(1) by striking by paragraph (1) and inserting 18
the following new paragraph: (1) The Director of the 19
Consumer Financial Protection Agency shall have au- 20
thority to prescribe regulations with respect to mort- 21
gage loans in accordance with section 553 of title 5, 22
United States Code. Such rulemaking shall relate to 23
unfair or deceptive acts or practices regarding mort- 24
gage loans, which may include unfair or deceptive 25

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acts or practices involving loan modification and 1
foreclosure rescue services. Any violation of a regula- 2
tion prescribed under this subsection shall be treated 3
as a violation of a regulation prohibiting unfair, de- 4
ceptive, or abusive acts or practices under the Con- 5
sumer Financial Protection Agency Act of 2009.; 6
(2) by striking paragraph (2); 7
(3) by striking paragraph (3); and 8
(2) The Director of the Consumer Financial Protec- 11
tion Agency shall enforce the regulations issued under para- 12
graph (1) in the same manner, by the same means, and 13
with the same jurisdiction, powers, and duties as though 14
all applicable terms and provisions of the Consumer Finan- 15
cial Protection Agency Act of 2009 were incorporated into 16
and made part of this section.. 17
(b) Section 626(b) of title VI of division D of the Om- 18
and Disclosure Act of 2009) is amended by striking pri- 21
mary Federal regulator each place it appears and insert- 22
ing Consumer Financial Protection Agency. 23

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SEC. 190. AMENDMENTS TO THE HOMEOWNERS PROTEC- 1
TION ACT OF 1998. 2
Section 10 of the Homeowners Protection Act of 1998 3
(12 U.S.C. 4909) is amended 4
(1) in the matter preceding paragraph (1) of 5
subsection (a), by striking Compliance and insert- 6
ing Subject to section 122 of the Consumer Finan- 7
cial Protection Agency Act of 2009, compliance; 8
(2) in subsection (a)(2), by striking and after 9
the semicolon at the end; 10
(3) in subsection (a)(3), by striking the period at 11
the end and inserting ; and; 12
(4) by inserting after subsection (a)(3), the fol- 13
tection Agency Act of 2009, by the Consumer Finan- 16
cial Protection Agency.; and. 17
(5) in subsection (b)(2), by inserting , subject to 18
Agency Act of 2009 before the period at the end. 20
SEC. 191. AMENDMENTS TO THE REAL ESTATE SETTLE- 21
MENT PROCEDURES ACT OF 1974. 22
(a) SECTION 3.Section 3 of the Real Estate Settle- 23
ment Procedures Act of 1974 (12 U.S.C. 2602) is amend- 24
ed 25

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(1) in paragraph (7), by striking and after the 1
semicolon at the end; 2
graph 6
(b) SECTION 4.Section 4 of the Real Estate Settle- 9
ed 11
(1) in subsection (a), by striking the first sen- 12
tence and inserting the following: The Agency shall 13
publish a single, integrated disclosure for mortgage 14
loan transactions, including real estate settlement cost 15
statements, which include the disclosure requirements 16
of this title, in conjunction with the disclosure re- 17
quirements of the Truth in Lending Act (15 U.S.C. 18
1601 note et seq.) that, taken together, may apply to 19
transactions subject to both or either law. The purpose 20
of such model disclosure shall be to facilitate compli- 21
ance with the disclosure requirements of those titles, 22
and to aid the borrower or lessee in understanding the 23
transaction by utilizing readily understandable lan- 24

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guage to simplify the technical nature of the disclo- 1
sures.; 2
(2) by striking Secretary each place such term 3
appears and inserting Agency; and 4
(3) by striking form each place such term ap- 5
pears and inserting forms. 6
(c) SECTION 5.Section 5 of the Real Estate Settle- 7
ed 9
appears, and inserting Agency; and 11
(2) by striking the first sentence of subsection 12
(a), and inserting The Agency shall prepare and dis- 13
tribute booklets jointly complying with the require- 14
ments of the Truth in Lending Act (15 U.S.C. 1601 15
note et seq.) and the provisions of this title, in order 16
to help persons borrowing money to finance the pur- 17
chase of residential real estate better to understand 18
the nature and costs of real estate settlement serv- 19
ices.. 20
(d) SECTION 6.Section 6(j)(3) of the Real Estate Set- 21
tlement Procedures Act of 1974 (12 U.S.C. 2605(j)(3)) is 22
amended 23
(1) by striking Secretary and inserting Di- 24
rector of the Agency; and 25

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H.L.C.
(2) by striking by regulations that shall take ef- 1
fect not later than April 20, 1991, and inserting by 2
regulation,. 3
(e) SECTION 7.Section 7 of the Real Estate Settle- 4
ment Procedures Act of 1974 (12 U.S.C. 2606) is amended 5
by striking Secretary and inserting the Director of the 6
Agency. 7
(f) SECTION 8.Section 8 of the Real Estate Settle- 8
ed 10
(1) in subsection (c)(5), by striking prescribed 11
by the Secretary and inserting prescribed by the 12
Director of the Agency; and 13
(2) in subsection (d)(4) 14
(A) by striking The Secretary, and insert- 15
ing The Agency, the Secretary,; and 16
sentence: However, to the extent that a Federal 18
law authorizes the Agency and other Federal and 19
State agencies to enforce or administer the law, 20
the Agency shall have primary authority to en- 21
force or administer that Federal law in accord- 22
ance with section 122 of the Consumer Financial 23
Protection Agency Act of 2009.. 24

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H.L.C.
(g) SECTION 10.Section 10(d) of the Real Estate Set- 1
tlement Procedures Act of 1974 (12 U.S.C. 2609(d)) is 2
amended by striking Secretary and inserting Agency. 3
(h) SECTION 16.Section 16 of the Real Estate Settle- 4
by inserting the Agency, before the Secretary. 6
(i) SECTION 18.Section 18 of the Real Estate Settle- 7
by striking Secretary each place such term appears and 9
(j) SECTION 19.Section 19 of the Real Estate Settle- 11
ed 13
(1) in the section heading, by striking SEC- 14
RETARY and inserting AGENCY; and 15
SEC. 192. AMENDMENTS TO THE RIGHT TO FINANCIAL PRI- 18
VACY ACT OF 1978. 19
(a) AMENDMENTS TO SECTION 1101.Section 1101 of 20
the Right to Financial Privacy Act of 1978 (12 U.S.C. 21
3401) is amended 22

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H.L.C.
(1) financial institution means any bank, sav- 1
ings association, card issuer as defined in section 2
103(n) of the Truth in Lending Act, credit union, or 3
consumer finance institution located in any State or 4
territory of the United States, the District of Colum- 5
bia, Puerto Rico, Guam, American Samoa, or the 6
Virgin Islands;; and 7
(2) in paragraph (7) 8
(A) by redesignating subparagraphs (F), 9
(G), (H), and (I) as subparagraphs (G), (H), 10
(I), and (J), respectively; and 11
(B) by inserting after subparagraph (E) the 12
following new subparagraph: 13
(F) the Consumer Financial Protection 14
Agency;. 15
(b) AMENDMENTS TO SECTION 1112.Section 1112(e) 16
of the Right to Financial Privacy Act of 1978 (12 U.S.C. 17
3412) is amended by striking and the Commodity Futures 18
Trading Commission is permitted and inserting the 19
Commodity Futures Trading Commission, and the Con- 20
sumer Financial Protection Agency is permitted. 21
(c) AMENDMENTS TO SECTION 1113.Section 1113 of 22
3413) is amended by adding at the end the following new 24
subsection 25

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H.L.C.
(r) DISCLOSURE TO THE CONSUMER FINANCIAL PRO- 1
TECTION AGENCY.Nothing in this chapter shall apply to 2
the examination by or disclosure to the Consumer Financial 3
Protection Agency of financial records or information in 4
the exercise of its authority with respect to a financial insti- 5
tution.. 6
SEC. 193. AMENDMENTS TO THE SECURE AND FAIR EN- 7
FORCEMENT FOR MORTGAGE LICENSING ACT 8
OF 2008. 9
(a) SECTION 1503.Section 1503 of the Secure and 10
Fair Enforcement for Mortgage Licensing Act of 2008 (12 11
U.S.C. 5102) is amended 12
(2) by redesignating paragraph (1) as para- 14
graph (4), and transferring paragraph (4) (as so re- 15
designated) and inserting such paragraph after para- 16
graph (3) (as added by paragraph (5)); 17
(6), (7), (8), (9), (10), (11), (12), and (13), respec- 20
tively; 21
(4) by inserting before paragraph (2) the fol- 22
Consumer Financial Protection Agency.; and 25

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H.L.C.
Director of the Agency.. 4
(b) UNIVERSAL AMENDMENTS RELATING TO AGEN- 5
CY.The Secure and Fair Enforcement for Mortgage Li- 6
censing Act of 2008 (12 U.S.C. 5101 et seq.) is amended 7
(1) by striking Federal banking agencies each 8
place such term appears (other than in subsection 9
(a)(4) (as so redesignated by subsection (a), relating 10
to the definition of Federal banking agencies) or in 11
connection with a reference that is specifically 12
amended by another provision of this section) and in- 13
serting Agency; and 14
appears (other than in connection with a reference 16
that is specifically amended by another provision of 17
this section) and inserting Director. 18
(c) SECTION 1507.Section 1507 of the Secure and 19
(1) in subsection (a) 22

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(1) IN GENERAL.The Agency shall develop 1
and maintain a system for registering employees of 2
any depository institution, employees of a subsidiary 3
that is owned and controlled by a depository institu- 4
tion and regulated by a Federal banking agency, or 5
employees of an institution regulated by the Farm 6
Credit Administration, as registered loan originators 7
with the Nationwide Mortgage Licensing System and 8
Registry. The system shall be implemented before July 9
30, 2010.; and 10
(B) by striking appropriate Federal bank- 11
ing agency and the Farm Credit Administra- 12
tion in paragraph (2) and inserting Agency; 13
and 14
(2) in subsection (b), by striking Federal bank- 15
ing agencies, through the Financial Institutions Ex- 16
amination Council, and the Farm Credit Administra- 17
tion each place such term appears and inserting 18
Agency. 19
(d) SECTION 1508. 20
(1) IN GENERAL.Section 1508 of the Secure 21
and Fair Enforcement for Mortgage Licensing Act of 22
2008 (12 U.S.C. 5107) is amended by adding at the 23
end the following new subsection 24
(f) REGULATIONS. 25

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H.L.C.
(1) IN GENERAL.The Agency may prescribe 1
regulations setting minimum net worth or surety 2
bond requirements for residential mortgage loan origi- 3
nators and minimum requirements for recovery funds 4
paid into by loan originators. 5
(2) FACTORS TAKEN INTO ACCOUNT.Such reg- 6
ulations shall take into account the need to provide 7
originators adequate incentives to originate affordable 8
and sustainable mortgage loans as well as the need to 9
ensure a competitive origination market that maxi- 10
mizes consumers access to affordable and sustainable 11
mortgage loans.. 12
(2) CLERICAL AMENDMENT.The heading for 13
section 1508 of the Secure and Fair Enforcement for 14
Mortgage Licensing Act of 2008 is amended by strik- 15
ing SECRETARY OF HOUSING AND URBAN DE- 16
VELOPMENT and inserting CONSUMER FINAN- 17
CIAL PROTECTION AGENCY. 18
(e) SECTION 1510.Section 1510 of the Secure and 19
U.S.C. 5109) is amended to read as follows: 21
SEC. 1510. FEES. 22
The Agency and the Nationwide Mortgage Licensing 23
System and Registry may charge reasonable fees to cover 24
the costs of maintaining and providing access to informa- 25

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H.L.C.
tion from the Nationwide Mortgage Licensing System and 1
Registry, to the extent that such fees are not charged to con- 2
sumers for access to such system and registry.. 3
(f) SECTION 1513.Section 1513 of the Secure and 4
SEC. 1513. LIABILITY PROVISIONS. 7
The Agency, any State official or agency, or any or- 8
ganization serving as the administrator of the Nationwide 9
Mortgage Licensing System and Registry or a system estab- 10
lished by the Director under section 1509, or any officer 11
or employee of any such entity, shall not by subject to any 12
civil action or proceeding for monetary damages by reason 13
of the good faith action or omission of any officer or em- 14
ployee of any such entity, while acting within the scope of 15
office or employment, relating to the collection, furnishing, 16
or dissemination of information concerning persons who are 17
loan originators or are applying for licensing or registra- 18
tion as loan originators.. 19
(g) SECTION 1514.The heading for section 1514 of 20
the Secure and Fair Enforcement for Mortgage Licensing 21
Act of 2008 (12 U.S.C. 5113) is amended by striking 22
UNDER HUD BACKUP LICENSING SYSTEM and in- 23
serting BY THE AGENCY. 24

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SEC. 194. AMENDMENTS TO THE TRUTH IN SAVINGS ACT. 1
(a) SECTION 263.Section 263 of the Truth in Sav- 2
ings Act (12 U.S.C. 4302) is amended in subsection (b) by 3
striking Board each place such term appears and insert- 4
ing Agency. 5
(b) SECTION 265.Section 265 of the Truth in Sav- 6
ings Act (12 U.S.C. 4304) is amended by striking Board 7
each place such term appears and inserting Agency. 8
(c) SECTION 266.Section 266(e) of the Truth in Sav- 9
ings Act is amended (12 U.S.C. 4305) by striking Board 10
(d) SECTION 269.Section 269 of the Truth in Sav- 12
(e) SECTION 270.Section 270 of the Truth in Sav- 15
ings Act (12 U.S.C. 4309) is amended 16
(A) by striking Compliance and inserting 18
Subject to section 122 of the Consumer Finan- 19
(B) by striking subparagraph (A) of para- 21
paragraph: 23
(A) by the head of the agency responsible 24
for chartering and regulating national banks for 25

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H.L.C.
national banks, and Federal branches and Fed- 1
eral agencies of foreign banks;; and 2
(C) by adding at the end, the following new 3
paragraph: 4
tection Agency Act of 2009, by the Agency.; and 6
(2) in subsection (c) 7
(A) in the subsection heading, by striking 8
BOARD and insert AGENCY; and 9
(B) by striking Board and inserting 10
Agency. 11
(f) SECTION 272.Section 272 of the Truth in Savings 12
Act (12 U.S.C. 4311) is amended 13
(1) in subsection (a), by striking Board and 14
inserting Agency; and 15
(2) in subsection (b), by striking regulation pre- 16
scribed by the Board each place such term appears 17
and inserting regulation prescribed by the Agency. 18
(g) SECTION 273.Section 273 of the Truth in Sav- 19
ings Act (12 U.S.C. 4312) is amended in the last sentence 20
by striking Board and inserting Agency. 21
(h) SECTION 274.Section 274 of the Truth in Sav- 22
(1) in paragraph (2) by striking Board and 24

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SEC. 195. AMENDMENTS TO THE TELEMARKETING AND 5
CONSUMER FRAUD AND ABUSE PREVENTION 6
ACT. 7
(a) SECTION 3.Section 3 of the Telemarketing and 8
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 9
6102) is amended 10
(1) in subsection (b), by inserting after the 2nd 11
sentence In prescribing a regulation under this Act 12
that relates to the provision of a consumer financial 13
product or service that is subject to the Consumer Fi- 14
nancial Protection Agency Act, including any enu- 15
merated consumer law thereunder, the Commission 16
shall consult with the Consumer Financial Protection 17
Agency regarding the consistency of a proposed regu- 18
lation with standards, purposes, or objectives admin- 19
istered by the Consumer Financial Protection Agen- 20
cy.; and 21
(2) in subsection (c), by adding at the end Any 22
violation of any regulation prescribed under sub- 23
section (a) committed by a person subject to the Con- 24
sumer Financial Protection Agency Act shall be treat- 25

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348
H.L.C.
ed as a violation of a regulation under section 131of 1
the Consumer Financial Protection Agency Act re- 2
garding unfair, deceptive, or abusive acts or prac- 3
tices.. 4
(b) AMENDMENTS TO SECTION 4.Section 4(d) of the 5
Telemarketing and Consumer Fraud and Abuse Prevention 6
Act (15 U.S.C. 6103(d)) is amended 7
(1) in the subsection heading, by inserting after 8
COMMISSION the following: OR THE CONSUMER FI- 9
NANCIAL PROTECTION AGENCY; and 10
(2) by inserting after Commission each place 11
such term appears or the Consumer Financial Pro- 12
tection Agency. 13
(c) AMENDMENTS TO SECTION 5.Section 5(c) of the 14
Act (15 U.S.C. 6104(c)) is amended by inserting after 16
Commission each place such term appears or the Con- 17
sumer Financial Protection Agency. 18
(d) AMENDMENT TO SECTION 6.Section 6 of the Tele- 19
marketing and Consumer Fraud and Abuse Prevention Act 20
(15 U.S.C. 6105) is amended by adding at the end the fol- 21
(d) ENFORCEMENT BY CONSUMER FINANCIAL PRO- 23
TECTION AGENCY.Except as otherwise provided in sec- 24
tions 3(d), 3(e), 4, and 5, this Act shall be enforced by the 25

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H.L.C.
Consumer Financial Protection Agency under subtitle E of 1
the Consumer Financial Protection Agency Act.. 2
SEC. 196. MEMBERSHIP IN FINANCIAL LITERACY AND EDU- 3
CATION COMMISSION. 4
Section 513(c)(1) of the Financial Literacy and Edu- 5
cation Improvement Act (20 U.S.C. 9702(c)(1)) is amend- 6
ed 7
(1) in subparagraph (B), by striking and at 8
the end; 9
(2) by redesignating subparagraph (C) as sub- 10
paragraph (D); and 11
(3) by inserting after subparagraph (B) the fol- 12
lowing new subparagraph: 13
(C) the Director of the Consumer Finan- 14
cial Protection Agency; and. 15
The amendments made by sections 183 through 195 17
shall take effect on the designated transfer date. 18
TITLE IIIMPROVEMENTS TO 19
THE FEDERAL TRADE COM- 20
MISSION ACT 21
SEC. 201. AMENDMENTS TO THE FEDERAL TRADE COMMIS- 22
SION ACT. 23
(a) Section 5(m)(1)(A) of the Federal Trade Commis- 24
sion Act (15 U.S.C. 45(m)(1)(A)) is amended 25

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350
H.L.C.
(1) by inserting this Act or after violates the 1
first place such term appears; and 2
(2) by inserting a violation of this Act or is 3
before prohibited. 4
(b) Section 5 of the Federal Trade Commission Act (15 5
U.S.C. 45) is amended by adding at the end thereof the fol- 6
(o) UNLAWFUL ASSISTANCE.It is unlawful for any 8
person, knowingly or recklessly, to provide substantial as- 9
sistance to another in violating any provision of this Act 10
or of any other Act enforceable by the Commission that re- 11
lates to unfair or deceptive acts or practices. Any such vio- 12
lation shall constitute an unfair or deceptive act or practice 13
described in section 5(a)(1) of this Act.. 14
(c) Section 18 of the Federal Trade Commission Act 15
(15 U.S.C. 57a(b)) is amended 16
(1) by amending subsection (b) to read as fol- 17
lows: 18
(b) PROCEDURE APPLICABLE.When prescribing a 19
rule under subsection (a)(1)(B) of this section, the Commis- 20
sion shall proceed in accordance with section 553 of Title 21
5 (without regard to any reference in such section to sec- 22
tions 556 and 557 of such title).; 23
(2)(A) in subsection (d), by striking all that pre- 24
cedes paragraph (3); 25

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351
H.L.C.
(B) by striking subsections (c), (f), (i), and (j); 1
and 2
(C) by redesignating subsections (e), (g) and (h) 3
as subsections (d), (e) and (f); 4
(3) by redesignating paragraph (3) of subsection 5
(d) as subsection (c); and 6
(4) in subsection (d) (as redesignated) 7
(A) in paragraph (1)(B), by striking the 8
transcript required by subsection (c)(5),; 9
(B) in paragraph (3), by striking error) 10
all that follows and inserting error).; and 11
(C) in paragraph (5), by striking subpara- 12
graph (C). 13

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HOUSE COMMlTTEE ON FlNANClAL SERVlCES REPORT ON H HOUSE COMMlTTEE ON FlNANClAL SERVlCES REPORT ON H HOUSE COMMlTTEE ON FlNANClAL SERVlCES REPORT ON H HOUSE COMMlTTEE ON FlNANClAL SERVlCES REPORT ON H . .. .R RR R. .. . 3126 3126 3126 3126, ,, ,
the CONSUMER FlNANClAL PROTECTlON ACT the CONSUMER FlNANClAL PROTECTlON ACT the CONSUMER FlNANClAL PROTECTlON ACT the CONSUMER FlNANClAL PROTECTlON ACT
Davis Davis Davis Davis, ,, , Greg Greg Greg Greg to: undisclosed-recipients:; 11/10/2009 04:34 PM
- H.R. 3126 Reported Bill.pdf
H.L.C.
111TH CONGRESS
1ST SESSION
H. R. 3126
[Report No. 111]
To establish the Consumer Financial Protection Agency, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 8, 2009
Mr. FRANK of Massachusetts (for himself, Ms. WATERS, Mrs. MALONEY, Mr.
GUTIERREZ, Mr. WATT, Mr. ACKERMAN, Mr. SHERMAN, Mr. CAPUANO,
Mr. MILLER of North Carolina, Mr. AL GREEN of Texas, Mr. ELLISON,
Ms. SPEIER, and Mr. GRAYSON) introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committee on Energy and Commerce, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
NOVEMBER --, 2009
Reported from the Committee on Committee on Financial Services with an
amendment
[Strike out all after the enacting clause and insert the part printed in italic]
[For text of introduced bill, see copy of bill as introduced on July 8, 2009]

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2
H.L.C.
A BILL
To establish the Consumer Financial Protection Agency, and
for other purposes.

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H.L.C.
Be it enacted by the Senate and House of Representa- 1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the Consumer Financial 4
Protection Agency Act of 2009. 5
SEC. 2. TABLE OF CONTENTS. 6
The table of contents for this Act is as follows: 7
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE ICONSUMER FINANCIAL PROTECTION AGENCY
Subtitle AEstablishment of the Agency
Sec. 111. Establishment of the Consumer Financial Protection Agency.
Sec. 112. Director.
Sec. 113. Consumer Financial Protection Oversight Board.
Sec. 114. Executive and administrative powers.
Sec. 115. Administration.
Sec. 116. Consumer Advisory Board.
Sec. 117. Coordination.
Sec. 118. Reports to the Congress.
Sec. 119. Funding; fees and assessments; penalties and fines.
Sec. 120. Amendments relating to other administrative provisions.
Sec. 120A. Effective date.
Subtitle BGeneral Powers of the Director and Agency
Sec. 121. Mandate and objectives.
Sec. 122. Authorities.
Sec. 123. Examination and enforcement for small banks, thrifts, and credit
unions.
Sec. 124. Simultaneous and coordinated supervisory action.
Sec. 125. Limitations on authority of agency and director.
Sec. 126. Collection of information; confidentiality regulations.
Sec. 127. Monitoring; assessments of significant regulations; reports.
Sec. 128. Authority to restrict mandatory predispute arbitration.
Sec. 129. Registration and supervision of nondepository covered persons.
Subtitle CSpecific Authorities
Sec. 131. Prohibiting unfair, deceptive, or abusive acts or practices.
Sec. 132. Disclosures.
Sec. 133. Sales practices.
Sec. 134. Pilot disclosures.

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H.L.C.
Sec. 135. Adopting operational standards to deter unfair, deceptive, or abusive
practices.
Sec. 136. Duties.
Sec. 137. Consumer rights to access information.
Sec. 138. Prohibited acts.
Sec. 139. Treatment of remittance transfers.
Sec. 140A. No authority to require the offering of financial products or services.
Sec. 140B. Appraisal independence requirements.
Subtitle DPreservation of State Law
Sec. 141. Relation to State law.
Sec. 142. Preservation of enforcement powers of States.
Sec. 143. Preservation of existing contracts.
Sec. 144. State law preemption standards for national banks and subsidiaries
clarified.
Sec. 147. State law preemption standards for Federal savings associations and
subsidiaries clarified.
Subtitle EEnforcement Powers
Sec. 152. Investigations and administrative discovery.
Sec. 153. Hearings and adjudication proceedings.
Sec. 154. Litigation authority.
Sec. 155. Relief available.
Sec. 156. Referrals for criminal proceedings.
Sec. 157. Employee protection.
Subtitle FTransfer of Functions and Personnel; Transitional Provisions
Sec. 161. Transfer of certain functions.
Sec. 162. Designated transfer date.
Sec. 163. Savings provisions.
Sec. 164. Transfer of certain personnel.
Sec. 165. Incidental transfers.
Sec. 166. Interim authority of the Secretary.
Subtitle GRegulatory Improvements
Sec. 171. Collection of deposit account data.
Sec. 172. Small business data collection.
Sec. 173. Annual financial autopsy.
Subtitle HConforming Amendments
Sec. 181. Amendments to the Inspector General Act of 1978.
Sec. 182. Amendments to the Privacy Act of 1974.
Sec. 183. Amendments to the Alternative Mortgage Transaction Parity Act of
1982.

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H.L.C.
Sec. 184. Amendments to the Consumer Credit Protection Act.
Sec. 185. Amendments to the Expedited Funds Availability Act.
Sec. 186. Amendments to the Federal Deposit Insurance Act.
Sec. 187. Amendments to the Gramm-Leach-Bliley Act.
Sec. 188. Amendments to the Home Mortgage Disclosure Act of 1975.
Sec. 189. Amendments to division D of the Omnibus Appropriations Act, 2009.
Sec. 190. Amendments to the Homeowners Protection Act of 1998.
Sec. 191. Amendments to the Real Estate Settlement Procedures Act of 1974.
Sec. 192. Amendments to the Right to Financial Privacy Act of 1978.
Sec. 193. Amendments to the Secure and Fair Enforcement for Mortgage Licens-
ing Act of 2008.
Sec. 194. Amendments to the Truth in Savings Act.
Sec. 195. Amendments to the Telemarketing and Consumer Fraud and Abuse Pre-
vention Act.
Sec. 196. Membership in Financial Literacy and Education Commission.
TITLE IIIMPROVEMENTS TO THE FEDERAL TRADE COMMISSION
ACT
Sec. 201. Amendments to the Federal Trade Commission Act.
TITLE ICONSUMER FINANCIAL 1
PROTECTION AGENCY 2
For the purposes of subtitles A through F of this title, 4
(1) AFFILIATE.The term affiliate means any 6
person that controls, is controlled by, or is under com- 7
mon control with another person. 8
(3) BANK HOLDING COMPANY.The term bank 11
holding company has the same meaning as in sec- 12
tion 2(a) of the Bank Holding Company Act of 1956. 13
(4) BOARD.Except when used in connection 14
with the term Board of Governors, the term 15

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6
H.L.C.
Board means the Consumer Financial Protection 1
Oversight Board. 2
(5) BOARD OF GOVERNORS.The term Board of 3
Governors means the Board of Governors of the Fed- 4
eral Reserve System. 5
(6) BUSINESS OF INSURANCE.The term busi- 6
ness of insurance means the writing of insurance or 7
the reinsuring of risks by an insurer, including all 8
acts necessary to such writing or reinsuring and the 9
activities relating to the writing of insurance or the 10
reinsuring of risks conducted by persons who act as, 11
or are, officers, directors, agents, or employees of in- 12
surers or who are other persons authorized to act on 13
behalf of such persons. 14
(7) CONSUMER.The term consumer means 15
an individual or an agent, trustee, or representative 16
acting on behalf of an individual. 17
(8) CONSUMER FINANCIAL PRODUCT OR SERV- 18
ICE.The term consumer financial product or serv- 19
ice means any financial product, other than a Fed- 20
eral tax return, or service to be used by a consumer 21
primarily for personal, family, or household purposes. 22
(9) COVERED PERSON. 23
(A) IN GENERAL.The term covered per- 24
son means any person who engages directly or 25

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7
H.L.C.
indirectly in a financial activity, in connection 1
with the provision of a consumer financial prod- 2
uct or service. 3
(B) EXCLUSION.The term covered per- 4
son shall not include the Secretary, the Depart- 5
ment of the Treasury, any agency or bureau 6
under the jurisdiction of the Secretary, or any 7
person collecting Federal taxes for the United 8
States to the extent such person is acting in such 9
capacity. 10
(10) CREDIT.The term credit means the 11
right granted by a person to a consumer to defer pay- 12
ment of a debt, incur debt and defer its payment, or 13
purchase property or services and defer payment for 14
such purchase. 15
means a Federal credit union or a State credit union 17
as defined in section 101 of the Federal Credit Union 18
Act. 19
(12) DEPOSIT.The term deposit 20
(A) has the same meaning as in section 3(l) 21
(B) includes a share in a member account 23
(as defined in section 101(5) of the Federal Cred- 24
it Union Act) at a credit union. 25

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8
H.L.C.
(13) DEPOSIT-TAKING ACTIVITY.The term de- 1
posit-taking activity means 2
(A) the acceptance of deposits, the mainte- 3
nance of deposit accounts, or the provision of 4
services related to the acceptance of deposits; 5
(B) the acceptance of money, the provision 6
of other services related to the acceptance of 7
money, or the maintenance of members share ac- 8
counts by a credit union; or 9
(C) the receipt of money or its equivalent, 10
as the Director may determine by regulation or 11
order, received or held by the covered person (or 12
an agent for the person) for the purpose of facili- 13
tating a payment or transferring funds or value 14
of funds by a consumer to a third party. 15
(14) DESIGNATED TRANSFER DATE.The term 16
designated transfer date has the meaning provided 17
in section 162. 18
(15) DIRECTOR.The term Director means 19
the Director of the Agency. 20
(16) ENUMERATED CONSUMER LAWS.The term 21
enumerated consumer laws means each of the fol- 22
lowing: 23
(A) The Alternative Mortgage Transaction 24
Parity Act (12 U.S.C. 3801 et seq.). 25

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9
H.L.C.
(B) The Electronic Funds Transfer Act (15 1
U.S.C. 1693 et seq.) 2
(C) The Equal Credit Opportunity Act (15 3
U.S.C. 1691 et seq.). 4
(D) The Fair Credit Reporting Act (15 5
U.S.C. 1681 et seq.), except with respect to sec- 6
tions 615(e) and 628 of such Act. 7
(E) The Fair Debt Collection Practices Act 8
(15 U.S.C. 1692 et seq.). 9
(F) Subsections (c), (d), (e), and (f) of sec- 10
tion 43 of the Federal Deposit Insurance Act (12 11
U.S.C. 1831t). 12
(G) Sections 502, 503, 504, 505, 506, 507, 13
508, and 509 of the Gramm-Leach-Bliley Act (15 14
U.S.C. 6802 et seq.). 15
(H) The Homeowners Protection Act of 16
1998. 17
(I) The Home Mortgage Disclosure Act (12 18
U.S.C. 2801 et seq.). 19
(J) The Real Estate Settlement Procedures 20
Act (12 U.S.C. 2601 et seq.). 21
(K) The Secure and Fair Enforcement for 22
Mortgage Licensing Act (12 U.S.C. 5101 et seq.). 23
(L) The Truth in Lending Act (15 U.S.C. 24
1601 et seq.). 25

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10
H.L.C.
(M) The Truth in Savings Act (12 U.S.C. 1
4301 et seq.). 2
ernors, the Comptroller of the Currency, the Director 5
of the Office of Thrift Supervision, the Federal De- 6
posit Insurance Corporation, or the National Credit 7
Union Administration and the term Federal bank- 8
ing agencies means all of such agencies. 9
(18) FAIR LENDING.The term fair lending 10
means fair, equitable, and nondiscriminatory access 11
to credit for both individuals and communities. 12
(19) FINANCIAL ACTIVITY. 13
(A) IN GENERAL.The term financial ac- 14
tivity means any of the following activities: 15
(i) Deposit-taking activities. 16
(ii) Extending credit and servicing 17
loans, including 18
(I) acquiring, purchasing, selling, 19
brokering, or servicing loans or other 20
extensions of credit; 21
(II) engaging in any other activ- 22
ity usual in connection with extensions 23
of credit or servicing loans, including 24

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11
H.L.C.
performing appraisals of real estate 1
and personal property. 2
(iii) Check cashing and check-guaranty 3
services, including 4
(I) authorizing a subscribing mer- 5
chant to accept personal checks ten- 6
dered by the merchants customers in 7
payment for goods and services; and 8
(II) purchasing from a sub- 9
scribing merchant validly authorized 10
checks that are subsequently dishon- 11
ored. 12
(iv) Collecting, analyzing, maintain- 13
ing, and providing consumer report infor- 14
mation or other account information by 15
covered persons, including information re- 16
lating to the credit history of consumers 17
and providing the information to a credit 18
grantor who is considering a consumer ap- 19
plication for credit or who has extended 20
credit to the borrower. 21
(v) Collection of debt related to any 22
consumer financial product or service. 23
(vi) Providing real estate settlement 24
services. 25

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H.L.C.
(vii) Leasing personal or real property 1
or acting as agent, broker, or adviser in 2
leasing such property if 3
(I) the lease is on a non-operating 4
basis; 5
(II) the initial term of the lease is 6
at least 90 days; and 7
(III) in the case of leases involv- 8
ing real property, at the inception of 9
the initial lease, the transaction is in- 10
tended to result in ownership of the 11
leased property to be transferred to the 12
lessee, subject to standards prescribed 13
by the Director. 14
(viii) Acting as an investment adviser 15
to any person (excluding an investment ad- 16
viser that is a person regulated by the Com- 17
State). 22
(ix) Acting as financial adviser to any 23
person (excluding an investment adviser 24
that is a person regulated by the Com- 25

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13
H.L.C.
State), including 5
(I) providing financial and other 6
related advisory services; 7
(II) providing educational 8
courses, and instructional materials to 9
consumers on individual financial 10
management matters; 11
(III) providing credit counseling 12
or tax planning services to any person 13
(excluding the preparation of returns, 14
or claims for refund, of tax imposed by 15
the Internal Revenue Code or advice 16
with respect to positions taken therein, 17
or services regulated by the Secretary 18
of the Treasury under section 330 of 19
title 31, United States Code); or 20
(IV) providing services to assist a 21
consumer with debt management or 22
debt settlement, with modifying the 23
terms of any extension of credit, or 24
with avoiding foreclosure. 25

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H.L.C.
(x) For purposes of this title, the fol- 1
lowing shall not be considered acting as fi- 2
nancial adviser: 3
(I) Publishing any bona fide 4
newspaper, news magazine or business 5
or financial publication of general and 6
regular circulation, including pub- 7
lishing market data, news, or data 8
analytics or investment information or 9
recommendations that are not tailored 10
to the individual needs of a particular 11
consumer. 12
(II) Providing advice, analyses, or 13
reports that do not relate to any secu- 14
rities other than securities which are 15
direct obligations of or obligations 16
guaranteed as to principal or interest 17
by the United States, or securities 18
issued or guaranteed by corporations 19
in which the United States has a direct 20
or indirect interest which shall have 21
been designated by the Secretary of the 22
Treasury, pursuant to section 3(a)(12) 23
of the Securities Exchange Act of 1934, 24

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15
H.L.C.
as exempted securities for the purposes 1
of that Act. 2
(xi) Financial data processing by any 3
technological means, including providing 4
data processing, access to or use of data- 5
bases or facilities, or advice regarding proc- 6
essing or archiving, if the data to be proc- 7
essed, furnished, stored, or archived are fi- 8
nancial, banking, or economic, except that 9
it shall not be considered a financial activ- 10
ity if with respect to financial data proc- 11
essing the person 12
(I) unknowingly or incidentally 13
transmits, processes, or stores financial 14
data in a manner that such data is 15
undifferentiated from other types of 16
data that the person transmits, proc- 17
esses, or stores; 18
(II) does not provide to any con- 19
sumer a consumer financial product or 20
service in connection with or relating 21
to in any manner financial data proc- 22
essing; and 23
(III) does not provide a material 24
service to any covered person in con- 25

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16
H.L.C.
nection with the provision of a con- 1
sumer financial product or service. 2
(xii) Money transmitting. 3
(xiii) Sale, provision or issuance of 4
stored value, except that, in the case of a 5
sale, only if the seller influences the terms 6
or conditions of the stored value provided to 7
the consumer. 8
(xiv) Acting as a money services busi- 9
ness. 10
(xv) Acting as a custodian of money or 11
any financial instrument. 12
(xvi)(I) Any other activity that the Di- 13
rector defines, by regulation, as a financial 14
activity after finding that 15
(aa) the activity has, or there 16
is a substantial likelihood that the 17
activity will have, a material ad- 18
verse impact on the creditworthi- 19
ness or financial well being of 20
consumers; 21
(bb) the activity is incidental 22
or complementary to any other fi- 23
nancial activity regulated by the 24
Agency; or 25

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17
H.L.C.
(cc) the activity is entered 1
into or conducted as a subterfuge 2
or with a purpose to evade any 3
requirement under this title, the 4
enumerated consumer laws, and 5
the authorities transferred under 6
(II) For purposes of subclause (I)(bb), 8
the following activities provided to a cov- 9
ered person shall not be incidental or com- 10
plementary: 11
(aa) Providing information prod- 12
ucts or services to a covered person for 13
identity authentication. 14
(bb) Providing information prod- 15
ucts or services for fraud or identify 16
theft detection, prevention, or inves- 17
tigation. 18
(cc) Providing document retrieval 19
or delivery services. 20
(dd) Providing public records in- 21
formation retrieval. 22
(ee) Providing information prod- 23
ucts or services for anti-money laun- 24
dering activities. 25

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H.L.C.
(B) BUSINESS OF INSURANCE EXCEPTION. 1
The term financial activity shall not include 2
the business of insurance. 3
(20) FINANCIAL PRODUCT OR SERVICE.The 4
term financial product or service means any prod- 5
uct or service that, directly or indirectly, results from 6
or is related to engaging in 1 or more financial ac- 7
tivities. 8
(21) FOREIGN EXCHANGE.The term foreign 9
exchange means the exchange, for compensation, of 10
currency of the United States or of a foreign govern- 11
ment for currency of another government. 12
(22) INSURED CREDIT UNION.The term in- 13
sured credit union has the same meaning as in sec- 14
tion 101 of the National Credit Union Act. 15
(23) INSURED DEPOSITORY INSTITUTION.The 16
term insured depository institution has the same 17
ance Act. 19
(24) MONEY SERVICES BUSINESS.The term 20
money services business means a person that 21
(A) receives currency, monetary value, or 22
payment instruments for the purpose of exchang- 23
ing or transmitting the same by any means, in- 24
cluding transmission by wire, facsimile, elec- 25

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19
H.L.C.
tronic transfer, courier, the Internet, or through 1
bill payment services, or other businesses that fa- 2
cilitate third-party transfers within the United 3
States or to or from the United States; or 4
(B) issues payment instruments or stored 5
value. 6
(25) MONEY TRANSMITTING.The term money 7
transmitting means the receipt by a covered person 8
of currency, monetary value, or payment instruments 9
for the purpose of transmitting the same to any third- 10
party by any means, including transmission by wire, 11
facsimile, electronic transfer, courier, the Internet, or 12
through bill payment services. 13
(26) PAYMENT INSTRUMENT.The term pay- 14
ment instrument means a check, draft, warrant, 15
money order, travelers check, electronic instrument, 16
or other instrument, payment of money, or monetary 17
value (other than currency). 18
(27) PERSON.The term person means an in- 19
dividual, partnership, company, corporation, associa- 20
tion (incorporated or unincorporated), trust, estate, 21
cooperative organization, or other entity. 22
(28) PERSON REGULATED BY A STATE INSUR- 23
ANCE REGULATOR.The term person regulated by a 24

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20
H.L.C.
State insurance regulator means any person who 1
is 2
(A) engaged in the business of insurance, 3
and 4
(B) subject to regulation by any State in- 5
surance regulator, 6
but only to the extent that such person acts in such 7
capacity. 8
(29) PERSON REGULATED BY THE COMMODITY 9
FUTURES TRADING COMMISSION.The term person 10
regulated by the Commodity Futures Trading Com- 11
mission means any futures commission merchant, 12
commodity trading adviser, commodity pool operator, 13
introducing broker, boards of trade, derivatives clear- 14
ing organizations, or multilateral clearing organiza- 15
tions to the extent that such persons actions are sub- 16
ject to the jurisdiction of the Commodity Futures 17
Trading Commission under the Commodity Exchange 18
Act and any agent, employee, or contractor acting on 19
behalf of, registered with, or providing services to such 20
person but only to the extent the person, or the em- 21
ployee, agent, or contractor of such person, acts in a 22
registered capacity. 23
(30) PERSON REGULATED BY THE SECURITIES 24
AND EXCHANGE COMMISSION.The term person reg- 25

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21
H.L.C.
ulated by the Securities and Exchange Commission 1
means 2
(A) a broker or dealer that is required to be 3
1934; 5
(B) an investment adviser that is registered 6
under the Investment Advisers Act of 1940; 7
(C) an investment company that is required 8
to be registered under the Investment Company 9
Act of 1940; 10
(D) a national securities exchange that is 11
required to be registered under the Securities Ex- 12
change Act of 1934; 13
(E) a transfer agent that is required to be 14
1934; 16
(F) a clearing corporation that is required 17
to be registered under the Securities Exchange 18
Act of 1934; 19
(G) any municipal securities dealer that is 20
Commission; 22
(H) any self-regulatory organization that is 23
Commission; 25

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22
H.L.C.
(I) any national securities exchange or 1
other entity that is required to be registered 2
under the Securities Exchange Act of 1934; and 3
(J) the Municipal Securities Rulemaking 4
Board, 5
and any employee, agent, or contractor acting on be- 6
half of, registered with, or providing services to, any 7
such person, but only to the extent that the person, or 8
the employee agent, or contractor of such person, acts 9
in a registered capacity. 10
(31) PROVISION OF A CONSUMER FINANCIAL 11
PRODUCT OR SERVICE.The terms provision of a 12
consumer financial product or service and pro- 13
viding a consumer financial product or service mean 14
the advertisement, marketing, solicitation, sale, disclo- 15
sure, delivery, or account maintenance or servicing of 16
a consumer financial product or service. 17
(32) PERSON THAT PERFORMS INCOME TAX 18
PREPARATION ACTIVITIES FOR CONSUMERS.The 19
term person that performs income tax preparation 20
activities for consumers means 21
(A) any tax return preparer (as defined in 22
section 7701(a)(36) of the Internal Revenue Code 23
of 1986), regardless of whether compensated, but 24

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23
H.L.C.
only to the extent that the person acts in such 1
capacity; 2
(B) any person regulated by the Secretary 3
of the Treasury under section 330 of title 31, 4
United States Code, but only to the extent that 5
the person acts in such capacity; and 6
(C) any authorized IRS e-file Providers (as 7
defined for purposes of section 7216 of the Inter- 8
nal Revenue Code of 1986), but only to the extent 9
that the person acts in such capacity. 10
(33) RELATED PERSON. 11
(A) IN GENERAL.The term related per- 12
son, when used in connection with a covered 13
person that is not a bank holding company, 14
credit union, depository institution, means 15
(i) any director, officer, employee 16
charged with managerial responsibility, or 17
controlling stockholder of, or agent for, such 18
covered person; 19
(ii) any shareholder, consultant, joint 20
venture partner, and any other person as 21
determined by the Director (by regulation 22
or on a case-by-case basis) who materially 23
participates in the conduct of the affairs of 24
such covered person; and 25

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24
H.L.C.
(iii) any independent contractor (in- 1
cluding any attorney, appraiser, or ac- 2
countant), with respect to such covered per- 3
son, who knowingly or recklessly partici- 4
pates in any 5
(I) violation of any law or regula- 6
tion; or 7
(II) breach of fiduciary duty. 8
(B) TREATMENT OF A RELATED PERSON AS 9
A COVERED PERSON.Any person who is a re- 10
lated person under subparagraph (A) shall be 11
deemed to be a covered person for all purposes of 12
this title, any enumerated consumer law, and 13
any law for which authorities were transferred 14
by subtitles F and H. 15
(34) SECRETARY.The term Secretary means 16
the Secretary of the Treasury. 17
(35) SERVICE PROVIDER. 18
(A) IN GENERAL.The term service pro- 19
vider means any person who provides a mate- 20
rial service to a covered person in the provision 21
of a consumer financial product or service, in- 22
cluding a person who 23

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25
H.L.C.
(i) facilitates the design of, or oper- 1
ations relating to the provision of, the con- 2
sumer financial product or service; 3
(ii) has direct interaction with a con- 4
sumer (whether in person or via tele- 5
communication device or other similar tech- 6
nology) regarding the consumer financial 7
product or service; or 8
(iii) processes transactions relating to 9
the consumer financial product or service. 10
(B) EXCEPTIONS.The term service pro- 11
vider shall not apply to a person solely by vir- 12
tue of such person providing or selling to a cov- 13
ered person 14
(i) a support service of a type provided 15
to businesses generally or a similar ministe- 16
rial service; 17
(ii) a service that does not materially 18
affect the terms or conditions of the con- 19
sumer financial product or service, its per- 20
formance or operation, or the propensity of 21
a consumer to obtain or use such product or 22
service; or 23
(iii) time or space for an advertise- 24
ment for a consumer financial product or 25

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26
H.L.C.
service through print, newspaper, or elec- 1
tronic media. 2
(36) STATE.The term State means any 3
State, territory, or possession of the United States, the 4
District of Columbia, Commonwealth of Puerto Rico, 5
Commonwealth of the Northern Mariana Islands, 6
Guam, American Samoa, or the United States Virgin 7
Islands. 8
(37) STORED VALUE.The term stored 9
value 10
(A) means funds or monetary value rep- 11
resented in any electronic format, whether or not 12
specially encrypted, and stored or capable of 13
storage on electronic media in such a way as to 14
be retrievable and transferred electronically; and 15
(B) includes a prepaid debit card or prod- 16
uct (other than a card or product used solely for 17
telephone services) or any other similar product, 18
regardless of whether the amount of the funds or mon- 19
etary value may be increased or reloaded. 20

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27
H.L.C.
Subtitle AEstablishment of the 1
Agency 2
SEC. 111. ESTABLISHMENT OF THE CONSUMER FINANCIAL 3
PROTECTION AGENCY. 4
(a) AGENCY ESTABLISHED.There is established the 5
Consumer Financial Protection Agency as an independent 6
agency to regulate the provision of consumer financial prod- 7
ucts or services under this title, the enumerated consumer 8
laws, and the authorities transferred under subtitles F and 9
H. 10
(b) PRINCIPAL OFFICE.The principal office of the 11
Agency shall be located in the city of Washington, District 12
of Columbia, at 1 or more sites. 13
SEC. 112. DIRECTOR. 14
(a) ESTABLISHMENT OF POSITION. 15
(1) IN GENERAL.There is hereby established the 16
position of the Director of the Agency who shall be the 17
head of the Agency. 18
(2) AUTHORITY TO PRESCRIBE REGULATIONS. 19
The Director may prescribe such regulations and 20
issue such orders in accordance with this Act as the 21
Director may determine to be necessary for carrying 22
out this Act and all other laws within the Directors 23
jurisdiction. 24
(b) APPOINTMENT; TERM. 25

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28
H.L.C.
(1) APPOINTMENT.The Director shall be ap- 1
pointed by the President, by and with the advice and 2
consent of the Senate, from among individuals who 3
are citizens of the United States. 4
(2) TERM.The Director shall be appointed for 5
a term of 5 years. 6
(3) REMOVAL.The Director may be removed be- 7
fore the end of a term only for cause. 8
(4) VACANCY. 9
(A) IN GENERAL.A vacancy in the posi- 10
tion of Director which occurs before the expira- 11
tion of the term for which a Director was ap- 12
pointed shall be filled in the manner established 13
in paragraph (1) and the Director appointed to 14
fill such vacancy shall be appointed only for the 15
(B) ACTING DIRECTOR. 17
(i) IN GENERAL.In the event of a va- 18
cancy in the position of Director or during 19
the absence or disability of the Director, an 20
Acting Director shall be appointed in the 21
manner provided in section 3345, of title 5, 22
(ii) AUTHORITY OF ACTING DIREC- 24
TOR.Any individual serving as Acting 25

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29
H.L.C.
Director under this subparagraph shall be 1
vested with all authority, duties, and privi- 2
leges of the Director. 3
(5) SERVICE AFTER END OF TERM.An indi- 4
vidual may serve as Director after the expiration of 5
the term for which appointed until a successor Direc- 6
tor has been appointed and qualified. 7
(c) PROHIBITION ON FINANCIAL INTERESTS.The Di- 8
rector shall not have a direct or indirect financial interest 9
in any covered person. 10
(d) COMPENSATION.The Director shall receive com- 11
pensation at the rate prescribed for Level I of the Executive 12
Schedule under section 5313 of title 5, United States Code. 13
SEC. 113. CONSUMER FINANCIAL PROTECTION OVERSIGHT 14
BOARD. 15
(a) ESTABLISHED.There is hereby established the 16
Consumer Financial Protection Oversight Board as an in- 17
strumentality of the United States. 18
(b) DUTIES AND POWERS. 19
(1) DUTY TO ADVISE DIRECTOR.The Board 20
shall advise the Director on 21
(A) the consistency of a proposed regulation 22
of the Director with prudential, market, or sys- 23
temic objectives administered by the agencies 24
that comprise the Board; 25

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30
H.L.C.
(B) the overall strategies and policies in 1
carrying out the duties of the Director under this 2
title; and 3
(C) actions the Director can take to enhance 4
and ensure that all consumers are subject to ro- 5
bust financial protection. 6
(2) LIMITATION ON POWERS.The Board may 7
not exercise any executive authority, and the Director 8
may not delegate to the Board any of the functions, 9
powers, or duties of the Director. 10
(c) COMPOSITION.The Board shall be comprised of 11
7 members as follows: 12
(1) The Chairman of the Board of Governors. 13
(2) The head of the agency responsible for char- 14
tering and regulating national banks. 15
(3) The Chairperson of the Federal Deposit In- 16
surance Corporation. 17
(4) The Chairman of the National Credit Union 18
Administration. 19
(5) The Chairman of the Federal Trade Commis- 20
sion. 21
(6) The Secretary of Housing and Urban Devel- 22
opment. 23

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31
H.L.C.
(7) The Chairman of the liaison committee of 1
representatives of State agencies to the Financial In- 2
stitutions Examination Council. 3
(d) REPRESENTATIVE OF ADDITIONAL INTERESTS. 4
(1) COMPOSITION.Notwithstanding subsection 5
(c), the President, by and with the advice and consent 6
of the Senate, shall appoint 5 additional members of 7
the Board from among experts in the fields of con- 8
sumer protection, fair lending and civil rights, rep- 9
resentatives of depository institutions that primarily 10
serve underserved communities, or representatives of 11
communities that have been significantly impacted by 12
higher-priced mortgage loans, as such communities 13
are identified by the Director through an analysis of 14
data received by reason of the provisions of the Home 15
Mortgage Disclosure Act of 1975 or other data on 16
lending patterns. 17
(2) AFFILIATION.With respect to members ap- 18
pointed pursuant to paragraph (1), not more than 3 19
shall be members of any one political party. 20
(e) MEETINGS. 21
(1) IN GENERAL.The Board shall meet upon 22
notice by the Director, but in no event shall the Board 23
meet less frequently than once every 3 months. 24

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32
H.L.C.
(2) SPECIAL MEETINGS.Any member of the 1
Board may, upon giving written notice to the Direc- 2
tor, require a special meeting of the Board. 3
(f) PROHIBITION ON ADDITIONAL COMPENSATION. 4
Members of the Board may not receive additional pay, al- 5
lowances, or benefits by reason of their service on the Board. 6
(g) COMPLAINTS RELATED TO REQUIRED OFFERING 7
OF SPECIFIC FINANCIAL PRODUCTS OR SERVICES.The 8
Board shall establish procedures to receive and analyze 9
complaints from any person claiming that the Director is 10
not in compliance with the requirements under section 11
140A. 12
SEC. 114. EXECUTIVE AND ADMINISTRATIVE POWERS. 13
The Director may exercise all executive and adminis- 14
trative functions of the Agency, including to 15
(1) establish regulations for conducting the Agen- 16
cys general business in a manner not inconsistent 17
with this title; 18
(2) bind the Agency and enter into contracts; 19
(3) direct the establishment of and maintain di- 20
visions or other offices within the Agency in order to 21
fulfill the responsibilities of this title, the enumerated 22
consumer laws, and the authorities transferred under 23
subtitles F and H, and to satisfy the requirements of 24
other applicable law; 25

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33
H.L.C.
(4) coordinate and oversee the operation of all 1
administrative, enforcement, and research activities of 2
the Agency; 3
(5) adopt and use a seal; 4
(6) determine the character of and the necessity 5
for the Agencys obligations and expenditures, and the 6
manner in which they shall be incurred, allowed, and 7
paid; 8
(7) delegate authority, at the Directors discre- 9
tion, to any officer or employee of the Agency to take 10
action under any provision of this title or under other 11
applicable law; 12
(8) to implement this title and the Agencys au- 13
thorities under the enumerated consumer laws and 14
under subtitles F and H through regulations, orders, 15
guidance, interpretations, statements of policy, exami- 16
nations, and enforcement actions; and 17
(9) perform such other functions as may be au- 18
thorized or required by law. 19
SEC. 115. ADMINISTRATION. 20
(a) OFFICERS.The Director shall appoint the fol- 21
lowing officials: 22
(1) A secretary, who shall be charged with main- 23
taining the records of the Agency and performing 24
such other activities as the Director directs. 25

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34
H.L.C.
(2) A general counsel, who shall be charged with 1
overseeing the legal affairs of the Agency and per- 2
forming such other activities as the Director directs. 3
(3) An inspector general, who shall have the au- 4
thority and functions of an inspector general of a des- 5
ignated Federal entity under the Inspector General 6
Act of 1978 (5 U.S.C. App. 3). 7
(4) An Ombudsperson, who shall 8
(A) develop and maintain expertise in and 9
understanding of the law relating to consumer fi- 10
nancial products; 11
(B) at the request of a Federal agency or a 12
State agency, and with the prior approval of the 13
Director, advise such agency with respect to ac- 14
tions that may affect consumers; 15
(C) advise consumers who may have a le- 16
gitimate potential or actual claim against a 17
Federal agency involving the provision of con- 18
sumer financial products regarding their rights 19
under this title; 20
(D) identify Federal agency actions that 21
have potential implications for consumers and, if 22
appropriate, and with the prior approval of the 23
Director, advise the relevant Federal agencies 24
with respect to those implications; 25

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35
H.L.C.
(E) provide information to private citizens, 1
civic groups, Federal agencies, State agencies, 2
and other interested parties regarding the rights 3
of those parties under this title; 4
(F) develop, maintain, and provide exper- 5
tise designed to assist covered persons, especially 6
smaller depository institutions and other smaller 7
entities to comply with regulations and other re- 8
quirements issued to implement the provisions of 9
this title, and where such assistance for smaller 10
depository institutions shall be provided jointly 11
by the Agency and the appropriate Federal bank- 12
ing agency; 13
(G) develop procedures to assist covered per- 14
sons, especially smaller depository institutions 15
and other smaller entities, in responding to or 16
challenging actions taken by the Director or the 17
Agency to implement the provisions of this title 18
and to ensure that safeguards exist to preserve 19
the confidentiality of covered persons using those 20
procedures; and 21
(H) perform such other duties as the Direc- 22
tor may delegate to the Ombudsperson. 23
(b) PERSONNEL. 24
(1) APPOINTMENT. 25

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36
H.L.C.
(A) IN GENERAL.The Director may fix the 1
number of, and appoint and direct, all employees 2
of the Agency. 3
(B) EXPEDITED HIRING.The Director 4
may appoint, without regard to the provisions of 5
sections 3309 through 3318, of title 5, United 6
States Code, candidates directly to positions for 7
which public notice has been given. 8
(C) HIRING VETERANS.In hiring employ- 9
ees of the Agency, the Director shall establish ap- 10
propriate targets, including timetables, to hire 11
veterans (as defined in paragraphs (1) and (2) 12
of section 2108 of title 5, United States Code) as 13
employees of the Agency. In establishing appro- 14
priate targets under this paragraph, the Director 15
may consider, among other relevant factors, the 16
proportion of veterans hired by Federal agencies 17
with comparable functions or types of occupa- 18
tions and their experiences in hiring veterans. 19
(2) COMPENSATION. 20
(A) PAY.The Director shall fix, adjust, 21
and administer the pay for all employees of the 22
Agency without regard to the provisions of chap- 23
ter 51 or subchapter III of chapter 53 of title 5, 24

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37
H.L.C.
(B) BENEFITS.The Director may provide 1
additional benefits to Agency employees if the 2
same type of benefits are then being provided by 3
the Board of Governors or, if not then being pro- 4
vided, could be provided by the Board of Gov- 5
ernors under applicable provisions of law or reg- 6
ulations. 7
(C) MINIMUM STANDARD.The Director 8
shall at all times provide compensation and ben- 9
efits to classes of employees that, at a minimum, 10
are equivalent to the compensation and benefits 11
provided by the Board of Governors for the cor- 12
responding class of employees in any fiscal year. 13
(c) SPECIFIC FUNCTIONAL UNITS. 14
(1) RESEARCH.The Agency shall establish a 15
unit whose functions shall include 16
(A) conducting research on consumer finan- 17
cial counseling and education, including 18
(i) on the topics of debt, credit, sav- 19
ings, financial product usage, and financial 20
planning; 21
(ii) exploring effective methods, tools, 22
and approaches; and 23
(iii) identifying ways to incorporate 24
new technology for the delivery and evalua- 25

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38
H.L.C.
tion of financial counseling and education 1
efforts; 2
(B) researching, analyzing, and reporting 3
on 4
(i) current and prospective develop- 5
ments in markets for consumer financial 6
products or services, including market areas 7
of alternative consumer financial products 8
or services with high growth rates; 9
(ii) consumer awareness, under- 10
standing, and use of disclosures and com- 11
munications regarding consumer financial 12
products or services; 13
(iii) consumer awareness and under- 14
standing of costs, risks, and benefits of con- 15
(iv) consumer behavior with respect to 17
consumer financial products or services, in- 18
cluding performance on mortgage loan; and 19
(v) experiences of traditionally under- 20
served consumers, including un-banked and 21
under-banked consumers, regarding con- 22
(C) identifying priorities for consumer fi- 24
nancial education efforts, based on consumer 25

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39
H.L.C.
complaints, research or analysis conducted pur- 1
suant to subparagraph (A), or other information; 2
and 3
(D) testing and identifying methods of edu- 4
cating consumers to determine which methods 5
are most effective. 6
(2) COMMUNITY AFFAIRS.The Director shall es- 7
tablish a unit whose functions shall include providing 8
information, guidance, and technical assistance re- 9
garding the provision of consumer financial products 10
or services to traditionally underserved consumers 11
and communities. 12
(3) CONSUMER COMPLAINTS. 13
(A) IN GENERAL.The Director shall estab- 14
lish a unit whose functions shall include estab- 15
lishing a central database, or utilizing an exist- 16
ing database, for collecting and tracking infor- 17
mation on consumer complaints about consumer 18
financial products or services and resolution of 19
complaints. 20
(B) COORDINATION.In performing the 21
functions described in subparagraph (A), the Di- 22
rector shall coordinate with the Federal banking 23
agencies, other Federal agencies, and other regu- 24
latory agencies or enforcement authorities. 25

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40
H.L.C.
(C) DATA SHARING REQUIRED.To the ex- 1
tent permitted by law and the regulations pre- 2
scribed by the Director regarding the confidential 3
treatment of information, the Director shall 4
share data relating to consumer complaints with 5
Federal banking agencies, other Federal agencies, 6
and State regulators. To the extent permitted by 7
law and the regulations prescribed by the Fed- 8
eral banking agencies and other Federal agencies 9
regarding the confidential treatment of informa- 10
tion, the Federal banking agencies and other 11
Federal agencies, respectively, shall share data 12
relating to consumer complaints with the Direc- 13
tor and the Agency. 14
(4) CONSUMER FINANCIAL EDUCATION. 15
(A) IN GENERAL.The Agency shall estab- 16
lish a unit to be named the Office of Financial 17
Literacy, whose functions shall include activities 18
designed to facilitate the education of consumers 19
on consumer financial products and services, in- 20
cluding through the dissemination of materials 21
to consumers on such topics. 22
(B) DIRECTOR.The Office of Financial 23
Literacy shall be headed by a director. 24
(C) DUTIES.Such unit shall 25

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41
H.L.C.
(i) develop goals for programs to be 1
provided by persons that provide consumer 2
financial education and counseling, includ- 3
ing programs through which such persons 4
(I) provide one-on-one financial 5
counseling; 6
(II) help individuals understand 7
basic banking and savings tools; 8
(III) help individuals understand 9
their credit history and credit score; 10
(IV) assist individuals in efforts 11
to plan for major purchases, reduce 12
their debt, and improve their financial 13
stability; and 14
(V) work with individuals to de- 15
sign plans for long-term savings; 16
(ii) develop recommendations regard- 17
ing effective certification of persons pro- 18
viding programs, or performing the activi- 19
ties, described in clause (i), including rec- 20
ommendations regarding 21
(I) certification processes and 22
standards for certification; 23
(II) appropriate certifying bodies; 24
and 25

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42
H.L.C.
(III) mechanisms for funding the 1
certification processes; 2
(iii) develop a technology tool to collect 3
data on financial education and counseling 4
outcomes; and 5
(iv) conduct research to identify effec- 6
tive methods, tools, technoloy, and strategies 7
to educate and counsel consumers about per- 8
sonal finance management, including on the 9
topics of debt, credit, savings, financial 10
product usage, and financial planning. 11
(D) COORDINATION.Such unit shall co- 12
ordinate with other units within the Agency in 13
carrying out its functions, including 14
(i) working with the unit established 15
under paragraph (2) to 16
(I) provide information and re- 17
sources to community organizations, 18
nonprofit organizations, and other en- 19
tities to assist in helping educate con- 20
sumers about consumer financial prod- 21
ucts and services; and 22
(II) develop a marketing strategy 23
to promote financial education and 24
one-on-one counseling; and 25

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43
H.L.C.
(ii) working with the unit established 1
under paragraph (1) to conduct research re- 2
lated to consumer financial education and 3
counseling. 4
(d) SINGLE TOLL-FREE TELEPHONE NUMBER FOR 5
CONSUMER COMPLAINTS AND INQUIRIES. 6
(1) CALL INTAKE SYSTEM.The Consumer Fi- 7
nancial Protection Agency shall establish a single, 8
toll-free telephone number for consumer complaints 9
and inquiries concerning institutions regulated by 10
such agencies and a system for collecting and moni- 11
toring complaints and, as soon as practicable, a sys- 12
tem for routing such calls to the Federal financial in- 13
stitution regulatory agency that primarily supervises 14
the financial institution, or that is otherwise the ap- 15
propriate Federal agency to address the subject of the 16
complaint or inquiry. 17
(2) ROUTING CALLS TO STATES.To the extent 18
practicable, State agencies may receive appropriate 19
call transfers from the system established under para- 20
graph (1) if 21
(A) the State agencys system has the func- 22
tional capacity to receive calls routed by the sys- 23
tem; and 24

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44
H.L.C.
(B) the State agency has satisfied any con- 1
ditions of participation in the system that the 2
Council, coordinating with State agencies 3
through the chairperson of the State Liaison 4
Committee, may establish. 5
(e) REPORT TO THE CONGRESS.Before the end of the 6
6-month period beginning on the date of the enactment of 7
this Act, the Federal financial institution regulatory agen- 8
cies shall submit a report to the Committee on Financial 9
Services of the House of Representatives and the Committee 10
on Banking, Housing, and Urban Affairs of the Senate de- 11
scribing the agencies efforts to establish 12
(1) a public interagency Web site for directing 13
and referring Internet consumer complaints and in- 14
quiries concerning any financial institution to the 15
Consumer Financial Protection Agency for purposes 16
of collecting, monitoring, and responding to such com- 17
plaints and, where appropriate, a system for referring 18
complaints to the Federal financial institution regu- 19
latory agency, other Federal agency, or State agency 20
that is otherwise the appropriate agency to address 21
the subject of the complaint or inquiry; and 22
(2) a system to expedite the prompt and effective 23
rerouting of any misdirected consumer complaint or 24
inquiry documents between or among the agencies, 25

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45
H.L.C.
with prompt referral of any complaint or inquiry to 1
the appropriate Federal financial institution regu- 2
latory agency, and to participating State agencies. 3
(f) OFFICE OF FAIR LENDING AND EQUAL OPPOR- 4
TUNITY. 5
(1) ESTABLISHMENT.Before the end of the 180- 6
day period beginning on the date of the enactment of 7
this Act, the Director shall establish within the Agen- 8
cy the Office of Fair Lending and Equal Oppor- 9
tunity. 10
(2) FUNCTIONS. The Office of Fair Lending 11
and Equal Opportunity shall have such powers and 12
duties as the Director may delegate the Office which 13
shall include the following functions: 14
(A) Providing oversight and enforcement of 15
Federal laws intended to ensure the fair, equi- 16
table, and nondiscriminatory access to credit for 17
both individuals and communities that are en- 18
forced by the Agency, including the Equal Credit 19
Opportunity Act and the Home Mortgage Disclo- 20
sure Act. 21
(B) Coordinating fair lending enforcement 22
efforts of the Agency with other Federal agencies 23
and State regulators, as appropriate, to promote 24

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H.L.C.
consistent, efficient and effective enforcement of 1
Federal fair lending laws. 2
(C) Working with private industry, fair 3
lending, civil rights, consumer and community 4
advocates on the promotion of fair lending com- 5
pliance and education. 6
(D) Providing annual reports to the Con- 7
gress on the Agencys efforts to fulfill its fair 8
lending mandate. 9
(3) ADMINISTRATION OF OFFICE.There is here- 10
by established the position of Assistant Director of the 11
Agency for Fair Lending and Equal Opportunity 12
who 13
(A) shall be appointed by the Director; 14
(B) shall carry out such duties as the Direc- 15
tor may delegate to such Assistant Director; and 16
(C) shall serve as the Director of the Office 17
of Fair Lending and Equal Opportunity. 18
(4) PROHIBITIONS ON PARTICIPATION IN PRO- 19
GRAMS WITH RESPECT TO CERTAIN INDICTED ORGANI- 20
ZATIONS. 21
(A) PROHIBITION.The Director of the Of- 22
fice of Fair Lending and Equal Opportunity 23
may not allow a covered organization to partici- 24

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H.L.C.
pate in any program established by such Direc- 1
tor. 2
(B) COVERED ORGANIZATION.In this 3
paragraph, the term covered organization 4
means any of the following: 5
(i) Any organization that has been in- 6
dicted for a violation under any Federal or 7
State law governing the financing of a cam- 8
paign for election for public office or any 9
law governing the administration of an 10
election for public office, including a law re- 11
lating to voter registration. 12
(ii) Any organization that had its 13
State corporate charter terminated due to 14
its failure to comply with Federal or State 15
lobbying disclosure requirements. 16
(iii) Any organization that has filed a 17
fraudulent form with any Federal or State 18
regulatory agency. 19
(iv) Any organization that 20
(I) employs any applicable indi- 21
vidual, in a permanent or temporary 22
capacity; 23
(II) has under contract or retains 24
any applicable individual; or 25

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H.L.C.
(III) has any applicable indi- 1
vidual acting on the organizations be- 2
half or with the express or apparent 3
authority of the organization. 4
(C) ADDITIONAL DEFINITIONS.In this 5
paragraph: 6
(i) The term organization includes 7
the Association of Community Organiza- 8
tions for Reform Now (in this paragraph 9
referred to as ACORN) and any ACORN- 10
related affiliate. 11
(ii) The term ACORN-related affil- 12
iate means any of the following: 13
(I) Any State chapter of ACORN 14
registered with the Secretary of States 15
office in that State. 16
(II) Any organization that shares 17
directors, employees, or independent 18
contractors with ACORN. 19
(III) Any organization that has a 20
financial stake in ACORN. 21
(IV) Any organization whose fi- 22
nances, whether federally funded, 23
donor-funded, or raised through orga- 24

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H.L.C.
nizational goods and services, are 1
shared or controlled by ACORN. 2
(iii) The term applicable individual 3
means an individual who has been indicted 4
for a violation under Federal or State law 5
relating to an election for Federal or State 6
office. 7
(D) REVISION OF FEDERAL ACQUISITION 8
REGULATION.The Federal Acquisition Regula- 9
tion shall be revised to carry out the provisions 10
of this paragraph relating to contracts. 11
(E) SEVERABILITY.If any provision of 12
this section or any application of such provision 13
to any person or circumstance is held to be un- 14
constitutional, the remainder of this section and 15
the application of the provision to any other per- 16
son or circumstance shall not be affected. 17
SEC. 116. CONSUMER ADVISORY BOARD. 18
(a) ESTABLISHMENT REQUIRED.The Director shall 19
establish a Consumer Advisory Board to advise and consult 20
with the Director in the exercise of the functions of the Di- 21
rector and the Agency under this title, the enumerated con- 22
sumer laws, and to provide information on emerging prac- 23
tices in the consumer financial products or services indus- 24
try. 25

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50
H.L.C.
(b) MEMBERSHIP. 1
(1) IN GENERAL.In appointing the members of 2
the Consumer Advisory Board, the Director shall 3
seek 4
(A) to assemble experts in financial services, 5
community development, fair lending and civil 6
rights, consumer protection, and consumer finan- 7
cial products or services; and 8
(B) to represent the interests of covered per- 9
sons and consumers. 10
(2) PROHIBITION ON MEMBERSHIP WITH RE- 11
SPECT TO CERTAIN INDICTED ORGANIZATIONS.The 12
director may not appoint an employee of a covered 13
organization (as defined in section 115(f)(4)(B)) to 14
the Consumer Advisory Board. 15
(c) POLITICAL AFFILIATION.Not more than 1 more 16
than half of the members of the Consumer Advisory Board 17
may be members of the same political party. 18
(d) MEETINGS.The Consumer Advisory Board shall 19
meet from time to time at the call of the Director, but, at 20
a minimum, shall meet at least twice in each year. 21
(e) COMPENSATION AND TRAVEL EXPENSES.Mem- 22
bers of the Consumer Advisory Board who are not full-time 23
employees of the United States shall 24

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H.L.C.
(1) be entitled to receive compensation at a rate 1
fixed by the Director while attending meetings of the 2
Consumer Advisory Board, including travel time; and 3
(2) be allowed travel expenses, including trans- 4
portation and subsistence, while away from their 5
homes or regular places of business. 6
SEC. 117. COORDINATION. 7
(a) COORDINATION WITH OTHER FEDERAL AGENCIES 8
AND STATE REGULATORS.The Director shall coordinate 9
with the Securities and Exchange Commission, the Com- 10
modity Futures Trading Commission, the Secretary of the 11
Treasury, and other Federal agencies and State regulators, 12
as appropriate, to promote consistent regulatory treatment 13
of, and enforcement related to, consumer and investment 14
products, services, and laws. 15
(b) COORDINATION OF CONSUMER EDUCATION INITIA- 16
TIVES. 17
(1) IN GENERAL.The Director shall coordinate 18
with each agency that is a member of the Financial 19
Literacy and Education Commission established by 20
the Financial Literacy and Education Improvement 21
Act (20 U.S.C. 9701 et seq.) to assist each agency in 22
enhancing its existing financial literacy and edu- 23
cation initiatives to better achieve the goals in para- 24

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52
H.L.C.
graph (2) and to ensure the consistency of such ini- 1
tiatives across Federal agencies. 2
(2) GOALS OF COORDINATION.In coordinating 3
with the agencies described in paragraph (1), the Di- 4
rector shall seek to improve efforts to educate con- 5
sumers about financial matters generally, the man- 6
agement of their own financial affairs, and their 7
judgments about the appropriateness of certain finan- 8
cial products. 9
(c) COORDINATION.The Agency may coordinate in- 10
vestigations, compliance examinations, information shar- 11
ing, and related activities in support of activities under- 12
taken pursuant to the Fair Housing Act by other Federal 13
agencies. 14
SEC. 118. REPORTS TO THE CONGRESS. 15
(a) REPORTS REQUIRED.The Director shall prepare 16
and submit to the President and the appropriate commit- 17
tees of the Congress a report at the beginning of each regular 18
session of the Congress, beginning with the session following 19
(b) CONTENTS.The reports required by subsection (a) 21
shall include 22
(1) a list of the significant regulations and or- 23
ders adopted by the Director, as well as other signifi- 24
cant initiatives conducted by the Director, during the 25

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H.L.C.
preceding year and the Directors plan for regula- 1
tions, orders, or other initiatives to be undertaken 2
during the upcoming period; 3
(2) an analysis of complaints about consumer fi- 4
nancial products or services that the Agency has re- 5
ceived and collected in its central database on com- 6
plaints during the preceding year; 7
(3) a list, with a brief statement of the issues, of 8
the public supervisory and enforcement actions to 9
which the Agency is a party (including adjudication 10
proceedings conducted under subtitle E) during the 11
preceding year; 12
(4) the actions taken regarding regulations, or- 13
ders, and supervisory actions with respect to covered 14
persons which are not credit unions or depository in- 15
stitutions, including descriptions of the types of such 16
covered persons, financial activities, and consumer fi- 17
nancial products or services affected by such regula- 18
tions, orders, and supervisory actions; 19
(5) an appraisal of significant actions, including 20
actions under Federal or State law, by State attor- 21
neys general or State regulators relating to this title, 22
and the enumerated consumer laws; 24

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H.L.C.
(6) an analysis of the Agencys efforts to fulfill 1
the fair lending mission of the Agency; and 2
(7) an appraisal of the regulatory and legal dif- 3
ficulties encountered by the Agency in carrying out 4
the mission and duties of the Agency with respect to 5
consumer protection, including a description of 6
(A) the difficulties and hardships encoun- 7
tered with respect to coordinating with other 8
Federal and State government entities; 9
(B) the regulatory and enforcement limita- 10
tions placed on the Agency by this Act; 11
(C) the practices of persons, covered and un- 12
covered under this Act, that allow such persons 13
to harm consumers and escape regulation or en- 14
forcement, including any trends identified; and 15
(D) legislative and administrative rec- 16
ommendations with respect to solving or alle- 17
viating identified difficulties. 18
(c) ANNUAL APPEARANCE BEFORE THE CONGRESS. 19
The Director shall appear before the House Committee on 20
Financial Services at an annual hearing, after the report 21
is submitted under subsection (a) 22
(1) to discuss the efforts, activities, objectives and 23
plans of the Agency; and 24

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H.L.C.
(2) discuss and answer questions concerning such 1
report. 2
SEC. 119. FUNDING; FEES AND ASSESSMENTS; PENALTIES 3
AND FINES. 4
(a) TRANSFER OF FUNDS FROM THE BOARD OF GOV- 5
ERNORS. 6
(1) TRANSFER REQUIRED.Each year, begin- 7
ning on the designated transfer date, the Board of 8
Governors shall transfer funds in an amount equaling 9
10 percent of the Federal Reserve Systems total sys- 10
tem expenses (as reported in the Budget Review of the 11
Board of Governors most recent Annual Report to 12
Congress) to the Director for the purposes of carrying 13
enumerated consumer laws, and transferred under 15
(2) PROCEDURES.The Board of Governors, in 17
consultation with the Agency, shall make appropriate 18
arrangements to transfer funds to the Director in ac- 19
cordance with this subsection. 20
(b) FEES AND ASSESSMENTS. 21
(1) ASSESSMENT REQUIRED. 22
(A) IN GENERAL.Taking into account 23
such other sums available to the Agency and sub- 24
ject to the provisions of this subsection and sub- 25

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56
H.L.C.
section (d), the Director shall assess fees on cov- 1
ered persons to meet the Agencys expenses for 2
carrying out the duties and responsibilities of the 3
Agency, including supervising such covered per- 4
sons. 5
(B) BASIS FOR ASSESSMENT.The Agency 6
shall assess fees on covered persons pursuant to 7
this subsection based on the size and complexity 8
of the covered person, and the compliance record 9
of the covered person under the enumerated con- 10
sumer laws, the laws and authorities transferred 11
under subtitles F and H, and this title. 12
(2) REGULATIONS. 13
(A) IN GENERAL.The Director shall pre- 14
scribe regulations to govern the imposition and 15
collection of fees and assessments. 16
(B) FACTORS REQUIRED TO BE AD- 17
DRESSED.Regulations prescribed by the Direc- 18
tor under this subsection shall specify and de- 19
fine 20
(i) the basis of fees or assessments 21
(such as the outstanding number of con- 22
sumer credit accounts, off-balance sheet re- 23
ceivables attributable to the covered person, 24
total consolidated assets, total assets under 25

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57
H.L.C.
management, or volume of consumer finan- 1
cial transactions or use of service pro- 2
viders); 3
(ii) the amount and frequency of fees 4
or assessments; and 5
(iii) such other factors that the Direc- 6
tor determines are appropriate, which shall 7
include a covered persons compliance 8
record under the enumerated consumer 9
laws, the authorities transferred under sub- 10
(3) ASSESSMENTS ON DEPOSITORY INSTITUTION 12
COVERED PERSONS. 13
(A) DEPOSITORY INSTITUTION COVERED 14
PERSON DEFINED.For purposes of this section, 15
the term depository institution covered person 16
means a covered person that is an insured depos- 17
itory institution or credit union. 18
(B) ASSESSMENTS. 19
shall assess fees for supervision as are ap- 21
propriate on depository institution covered 22
persons, taking into account the size and 23
complexity of the covered person, and the 24
compliance record of the covered person 25

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H.L.C.
under the enumerated consumer laws, the 1
laws and authorities transferred under sub- 2
(ii) LIMITATION ON CERTAIN FEES. 4
The Agency shall not assess examination 5
fees on an institution referred to in section 6
123(a), or an institution whose examina- 7
tion responsibilities have been delegated to 8
an appropriate agency, pursuant to section 9
122(c)(11). 10
(iii) BASIS FOR FEE AMOUNTS.Fees 11
rector and the Agency under this title with 16
regard to depository institution covered per- 17
sons. 18
(C) COORDINATION DURING IMPLEMENTA- 19
TION PERIOD.The Director and the agencies re- 20
sponsible for chartering and or supervising de- 21
pository institution covered persons shall coordi- 22
nate on the levels of fees assessed on depository 23
institution covered persons under this para- 24
graph, so that levels of assessments under this 25

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H.L.C.
subparagraph combined with levels of assess- 1
ments by agencies responsible for chartering and 2
or supervising depository institution covered per- 3
sons shall be no more than the assessments such 4
depository institution covered person was re- 5
quired to pay for the 12-month period ending on 6
December 31, 2009. 7
(D) MARGINAL ASSESSMENT RATE. 8
(i) IN GENERAL.In setting assess- 9
ment rates for depository institution covered 10
persons, the Director shall not impose as- 11
sessments that result in higher marginal as- 12
sessment rates for depository institution 13
covered persons with assets of less than 14
$25,000,000,000 than the marginal rates for 15
depository institutions covered persons with 16
assets that exceed that amount. 17
(ii) RULE OF CONSTRUCTION. Clause 18
(i) shall not be construed as limiting or im- 19
pairing the authority of the Director to set 20
assessments that would result in higher 21
marginal assessment rates on the larger de- 22
pository institution covered persons. 23
(E) LIMITATIONS ON ASSESSMENTS. 24

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H.L.C.
(i) ASSESSMENTS FOR ADMINISTRA- 1
TIVE COSTS.Notwithstanding any provi- 2
sion in this title, no depository institution 3
covered person shall be charged an assess- 4
ment to be used for the supervision, exam- 5
ination, enforcement or regulation by the 6
Agency of nondepository covered persons. 7
(ii) AMOUNTS PAID FOR CONSUMER 8
COMPLIANCE SUPERVISION.Notwith- 9
standing any provision in this title, no de- 10
pository institution covered person shall 11
pay more for consumer compliance super- 12
vision than it paid before the date of enact- 13
(4) ASSESSMENTS ON NONDEPOSITORY COVERED 15
PERSONS. 16
(A) NONDEPOSITORY COVERED PERSON DE- 17
FINED.For purposes of this section, the term 18
nondepository covered person 19
(i) means a covered person that is not 20
a credit union or insured depository insti- 21
tution; and 22
(ii) includes any bank holding com- 23
pany. 24
(B) ASSESSMENTS. 25

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H.L.C.
shall assess fees for registration, examina- 2
tion, and supervision of nondepository cov- 3
ered persons. 4
(ii) BASIS FOR FEE AMOUNTS. Fees 5
rector and the Agency, including super- 10
vising such covered persons, taking into ac- 11
count such other sums available to the 12
Agency. 13
(iii) REGISTRATION FEE MINIMUMS. 14
Registration fees imposed on a nondeposi- 15
tory covered person under this paragraph 16
shall, at a minimum, be imposed on such 17
covered person at the time the person reg- 18
isters (or periodically renews any such reg- 19
istration) with the Agency, in accordance 20
with regulations prescribed by the Director. 21
(C) NONDEPOSITORY COVERED PERSON AS- 22
SESSMENT NOT LESS THAN FOR DEPOSITORY 23
COVERED PERSONS.Assessment rates levied by 24
the Director under this section on a nondeposi- 25

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62
H.L.C.
tory institution covered persons shall be no less 1
than assessments levied by the Agency under this 2
section on a depository institution covered per- 3
son with similar characteristics. 4
(c) AUTHORIZATION OF APPROPRIATIONS. 5
(1) IN GENERAL.For the purposes of carrying 6
enumerated consumer laws, and the laws and au- 8
thorities transferred under subtitles F and H, there 9
are authorized to be appropriated to the Director such 10
sums as may be necessary for any fiscal year. 11
(2) APPORTIONMENT.Notwithstanding any 12
other provision of law, such amounts shall be subject 13
to apportionment under section 1517 of title 31, 14
United States Code, and restrictions that generally 15
apply to the use of appropriated funds in title 31, 16
United States Code, and other laws. 17
(3) OTHER AVAILABLE FUNDS TAKEN INTO AC- 18
COUNT.Sums appropriated under this subsection 19
shall take into account such other sums available to 20
the Agency under this section. 21
(d) CONSUMER FINANCIAL PROTECTION AGENCY DE- 22
POSITORY INSTITUTION FUND. 23

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63
H.L.C.
the Treasury a separate fund to be known as the 2
Consumer Financial Protection Agency Deposi- 3
referred to as the CFPA Depository Fund). 5
Depository Fund shall not be used in the super- 9
vision and examination of nondepository institu- 10
(2) ALL TRANSFERRED FUNDS DEPOSITED.All 12
amounts transferred to the Agency under subsection 13
(a) shall be deposited into the CFPA Depository 14
Fund. 15
subsection (b)(3) in the CFPA Depository Fund. 19
(e) CONSUMER FINANCIAL PROTECTION AGENCY NON- 20
DEPOSITORY INSTITUTION FUND. 21
the Treasury a separate fund called the Con- 24
sumer Financial Protection Agency Nondeposi- 25

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H.L.C.
referred to as the CFPA Nondepository Fund). 2
Nondepository Fund shall not be used for the su- 6
pervision and examination of depository institu- 7
subsection (b)(4) in the CFPA Nondepository Fund. 12
(f) GENERAL PROVISIONS RELATING TO FUNDS. 13
(1) MAINTENANCE OF FUNDS. 14
(A) AGENCY FUNDS MAINTAINED BY TREAS- 15
URY.The Consumer Financial Protection Agen- 16
under subsection (d) and the Consumer Finan- 18
Fund established under subsection (e) shall each 20
be 21
(i) maintained and administered by 22
the Secretary; and 23
(ii) maintained separately and not 24
commingled. 25

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H.L.C.
(B) AGENCYS AUTHORITY.Any provision 1
of this Act forbidding the commingling or use of 2
the CFPA Depository Fund and the CFPA Non- 3
depository Fund shall not be construed as lim- 4
iting or impairing the authority of the Agency 5
to use the same facilities and resources in the 6
course of conducting supervisory and regulatory 7
functions with respect to depository institutions 8
and nondepository institutions, or to integrate 9
such functions. 10
(C) ACCOUNTING REQUIREMENTS. 11
(i) ACCOUNTING FOR USE OF FACILI- 12
TIES AND RESOURCES.The Agency shall 13
keep a full and complete accounting of all 14
costs and expenses associated with the use of 15
any facility or resource used in the course 16
of any function specified in subparagraph 17
(B) and shall allocate, in the manner pro- 18
vided in subparagraph (D), any such costs 19
and expenses incurred by the Agency 20
(I) with respect to depository in- 21
stitution covered persons, to the CFPA 22
Depository Fund; and 23

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H.L.C.
(II) with respect to nondepository 1
covered persons, to the CFPA Non- 2
depository fund. 3
(D) ALLOCATION OF ADMINISTRATIVE EX- 4
PENSES.Any personnel, administrative, or 5
other overhead expense of the Agency shall be al- 6
located 7
(i) fully to the CFPA Depository Fund 8
if the expense was incurred directly as a re- 9
sult of the Agencys responsibilities solely 10
with respect to depository institution cov- 11
ered persons; 12
(ii) fully to the CFPA Nondepository 13
Fund, if the expense was incurred directly 14
as a result of the Agencys responsibilities 15
solely with respect to nondepository covered 16
persons; 17
(iii) between the CFPA Depository 18
Fund and the CFPA Nondepository Fund, 19
in amounts reflecting the relative degree to 20
which the expense was incurred as a result 21
of the activities of depository institution 22
covered persons, and nondepository covered 23
persons; and 24

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H.L.C.
(iv) if the Director is unable to make 1
a complete allocation under clause (i), (ii), 2
or (iii), between the CFPA Depository Fund 3
and the CFPA Nondepository Fund, in 4
amounts reflecting the relative proportion 5
that, as of the end of the preceding year 6
(I) the aggregate assets of all de- 7
pository institution covered persons 8
bears to the aggregate assets of all cov- 9
ered persons; and 10
(II) the aggregate assets of all 11
nondepository covered persons bears to 12
the aggregate assets of all covered per- 13
sons. 14
(E) AGENCY FUND.The Agency fund 15
means the Consumer Financial Protection Agen- 16
under subsection (d), and, the Consumer Finan- 18
Fund established under subsection (e), and the 20
Consumer Financial Protection Agency Civil 21
Penalty Fund established under subsection (g). 22
(2) INVESTMENT. 23
(A) AMOUNTS IN FUNDS MAY BE IN- 24
VESTED.The Director may request the Sec- 25

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68
H.L.C.
retary to invest the portion of any Agency fund 1
that, in the Directors judgment, is not required 2
to meet the current needs of such fund. 3
(B) ELIGIBLE INVESTMENTS.Investments 4
pursuant to subparagraph (A) shall be made by 5
the Secretary in obligations of the United States 6
or obligations that are guaranteed as to prin- 7
cipal and interest by the United States, with 8
maturities suitable to the needs of the Agency 9
fund involved, as determined by the Director. 10
(C) INTEREST AND PROCEEDS CREDITED. 11
The interest on, and the proceeds from the sale 12
or redemption of, any obligations held in the re- 13
spective Agency Fund shall be credited to and 14
form a part of the respective Agency Fund. 15
(3) USE OF FUNDS.Funds obtained by, trans- 16
ferred to, or credited to any Agency fund shall be im- 17
mediately available to the Agency, and remain avail- 18
able until expended, to pay the expenses of the Agency 19
in carrying out the duties and responsibilities of the 20
Director and the Agency, including the payment of 21
compensation of the Director and officers and employ- 22
ees of the Agency. 23
(2) FEES, ASSESSMENTS AND OTHER FUNDS NOT 24
GOVERNMENT FUNDS.Funds obtained by or trans- 25

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H.L.C.
ferred to any Agency fund shall not be construed to 1
be Government funds or appropriated monies. 2
(3) AMOUNTS NOT SUBJECT TO APPORTION- 3
MENT.Notwithstanding any other provision of law, 4
amounts in any Agency fund shall not be subject to 5
apportionment for purposes of chapter 15 of title 31, 6
United States Code, or under any other authority. 7
(g) PENALTIES AND FINES. 8
(1) ESTABLISHMENT OF VICTIMS RELIEF 9
FUND.There is established in the Treasury of the 10
United States a fund to be known as the Consumer 11
Financial Protection Agency Civil Penalty Fund 12
(hereafter in this section referred to as the Civil Pen- 13
alty Fund). 14
(2) DEPOSITS. If the Agency obtains a civil 15
penalty against any person in any judicial or admin- 16
istrative action under this title, any law or authority 17
transferred under subtitles F and H, or any enumer- 18
ated consumer law, the Agency shall deposit into the 19
Civil Penalty Fund the amount of the penalty col- 20
lected. 21
(3) PAYMENT TO VICTIMS.Amounts in the Civil 22
Penalty Fund shall be available to the Director, with- 23
out fiscal year limitation, for payments to the victims 24
of activities for which civil penalties have been im- 25

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H.L.C.
posed under this title, the law and authorities trans- 1
ferred under subtitles F and H, or any enumerated 2
consumer law. 3
SEC. 120. AMENDMENTS RELATING TO OTHER ADMINISTRA- 4
TIVE PROVISIONS. 5
(a) ACT OF OCTOBER 28, 1974.Section 111 of Public 6
Law 93495 (12 U.S.C. 250) is amended by inserting the 7
Consumer Financial Protection Agency, after Federal 8
Deposit Insurance Corporation,. 9
(b) PAPERWORK REDUCTION ACT.Section 2(5) of the 10
Paperwork Reduction Act (44 U.S.C. 3502(5)) by inserting 11
the Consumer Financial Protection Agency, after the Se- 12
curities and Exchange Commission,. 13
SEC. 120A. EFFECTIVE DATE. 14
This subtitle shall take effect on the date of the enact- 15
Subtitle BGeneral Powers of the 17
Director and Agency 18
SEC. 121. MANDATE AND OBJECTIVES. 19
(a) MANDATE.The Director shall seek to promote 20
transparency, simplicity, fairness, accountability, and 21
equal access in the market for consumer financial products 22
or services. 23
(b) OBJECTIVES.The Director may exercise the au- 24

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laws, and transferred under subtitles F and H for the pur- 1
poses of ensuring that, with respect to consumer financial 2
products or services 3
(1) consumers have and can use the information 4
they need to make responsible decisions about con- 5
(2) consumers are protected from abuse, unfair- 7
ness, deception, and discrimination; 8
(3) markets for consumer financial products or 9
services operate fairly and efficiently with ample 10
room for sustainable growth and innovation; and 11
(4) traditionally underserved consumers and 12
communities have equal access to responsible finan- 13
cial services. 14
SEC. 122. AUTHORITIES. 15
(a) IN GENERAL.The Director may exercise the au- 16
laws, and transferred under subtitles F and H, to admin- 18
ister, enforce, and otherwise implement the provisions of 19
this title, the authorities transferred in subtitles F and H, 20
and the enumerated consumer laws. 21
(b) RULEMAKING, ORDERS, AND GUIDANCE. 22
regulations and issue orders and guidance as may be 24
necessary or appropriate to enable it to administer 25

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and carry out the purposes and objectives of this title, 1
and the enumerated consumer laws, and to prevent 3
evasions of this title, any such authority, and any 4
such law. 5
(2) STANDARDS FOR RULEMAKING.In pre- 6
scribing a regulation under this title or pursuant to 7
the enumerated consumer laws, the Director shall 9
(A) consider the potential benefits and costs 10
to consumers and covered persons, including the 11
potential reduction of consumers access to con- 12
sumer financial products or services, resulting 13
from such regulation; and 14
(B) consult with the Federal banking agen- 15
cies, State bank supervisors, the Federal Trade 16
Commission, or other Federal agencies, as appro- 17
priate, regarding the consistency of a proposed 18
regulation with prudential, consumer protection, 19
civil rights, market, or systemic objectives ad- 20
ministered by such agencies or supervisors. 21
(3) EXEMPTIONS. 22
(A) IN GENERAL.The Director, by regula- 23
tion or order, may conditionally or uncondition- 24
ally exempt any covered person, service provider, 25

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H.L.C.
or any consumer financial product or service or 1
any class of covered persons, class of service pro- 2
viders, or consumer financial products or serv- 3
ices, from any provision of this title, any enu- 4
merated consumer law, or from any regulation 5
under any such provision or law, as the Director 6
deems necessary or appropriate to carry out the 7
purposes and objectives of this title taking into 8
consideration the factors in subparagraph (B). 9
(B) FACTORS.In issuing an exemption by 10
regulation or order as permitted in subpara- 11
graph (A), the Director shall as appropriate take 12
into consideration the following: 13
(i) The total assets of the covered per- 14
son. 15
(ii) The volume of transactions involv- 16
ing consumer financial products or services 17
in which the covered person engages. 18
(iii) The extent to which the covered 19
person engages in 1 or more financial ac- 20
tivities. 21
(iv) Existing laws or regulations which 22
are applicable to the consumer financial 23
product or service and the extent to which 24

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such laws or regulations provide consumers 1
with adequate protections. 2
(C) RULE OF CONSTRUCTION.No provi- 3
sion of this section shall be construed as altering, 4
amending, or affecting any authority under sec- 5
tions 304(a), 304(i), 305(a), and 306(b) of the 6
Home Mortgage Disclosure Act of 1975 and sec- 7
tions 703(a)(1), 703(a)(2), 703(a)(3), 705(f), and 8
705(g) of the Equal Credit Opportunity Act for 9
determining whether a covered person should be 10
provided an exemption. 11
(c) EXAMINATIONS AND REPORTS. 12
(1) IN GENERAL.Except as provided under sec- 13
tion 123, the Director may on a periodic basis exam- 14
ine a covered person or service provider, with respect 15
to any consumer financial product or service, for pur- 16
regulations prescribed by the Director under this title 19
requirements. 22
(2) EXAMINATION PROGRAM.The Director shall 23
exercise any authority of the Director under para- 24
graph (1) in a manner designed to ensure that such 25

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authorities are exercised with respect to covered per- 1
sons or service providers, without regard to charter or 2
corporate form, based on the Directors assessment of 3
the risks posed to consumers in the relevant product 4
markets and geographic markets, and taking into con- 5
sideration, as applicable, the following factors: 6
(A) The asset size of the covered persons. 7
(B) The volume of transactions involving 8
consumer financial products or services in which 9
the covered persons engage. 10
(C) The risks to consumers created by the 11
provision of such consumer financial products or 12
services. 13
(D) In the case of State-chartered institu- 14
tions, the extent to which such institutions are 15
subject to oversight by State authorities for con- 16
sumer protection. 17
(3) COORDINATION.The Director shall coordi- 18
nate the Agencys supervisory activities with the su- 19
pervisory activities conducted by the Federal banking 20
agencies and the State bank supervisors, including es- 21
tablishing their respective schedules for examining 22
covered persons and requirements regarding reports to 23
be submitted by covered persons. 24

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(4) REPORTS.The Director may require reports 1
from a covered person for purposes of ensuring com- 2
pliance with the requirements of this title, the enu- 3
merated consumers laws, and any regulation pre- 4
scribed by the Director under this title or pursuant 5
to the authorities transferred under subtitles F and 6
H, and enforcing compliance with such requirements. 7
(5) CONTENT OF REPORTS.The reports author- 8
ized in paragraph (4) may include such information 9
as necessary to keep the Agency informed as to 10
(A) the compliance systems or procedures of 11
the covered person or any affiliate thereof, with 12
applicable provisions of this title or any other 13
law that the Agency has jurisdiction to enforce; 14
and 15
(B) matters related to the provision of con- 16
sumer financial products or services including 17
the servicing or maintenance of accounts or ex- 18
tensions of credit. 19
(6) USE OF EXISTING REPORTS.In general, the 20
Agency shall, to the fullest extent possible, use 21
(A) reports that a covered person, or any 22
affiliate thereof, or any service provider to such 23
covered person or affiliate, has provided or been 24

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required to provide to a Federal or State agency; 1
and 2
(B) information that has been reported pub- 3
licly. 4
(7) ACCESS BY THE AGENCY TO REPORTS OF 5
OTHER REGULATORS. 6
(A) EXAMINATION AND FINANCIAL CONDI- 7
TION REPORTS.Upon providing reasonable as- 8
surances of confidentiality, the Agency shall have 9
access to any report of examination or financial 10
condition, including a report containing data re- 11
garding consumer complaints, made by a Fed- 12
eral banking agency or other Federal agency 13
having supervision of a covered person, or a 14
service provider, (other than returns and return 15
information described in section 6103 of the In- 16
ternal Revenue Code of 1986) and to all revi- 17
sions made to any such report. 18
AGENCY.In addition to the reports described in 20
subparagraph (A), a Federal banking agency 21
may, in its discretion, furnish to the Agency any 22
other report or other confidential supervisory in- 23
formation concerning any insured depository in- 24
stitution, any credit union, or other entity exam- 25

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ined by such agency under authority of any Fed- 1
eral law. 2
(8) ACCESS BY OTHER REGULATORS TO REPORTS 3
OF THE AGENCY. 4
(A) EXAMINATION REPORTS.Upon pro- 5
viding reasonable assurances of confidentiality, a 6
Federal banking agency, a State regulator, or 7
any other Federal agency having supervision of 8
a covered person shall have access to any report 9
of examination made by the Agency with respect 10
to the covered person or service provider, and to 11
all revisions made to any such report. 12
OTHER REGULATORS.In addition to the reports 14
described in paragraph (A), the Agency may, in 15
the discretion of the Agency, furnish to a Federal 16
banking agency any other report or other con- 17
fidential supervisory information concerning 18
any insured depository institution, any credit 19
union, or other entity examined by the Agency 20
under authority of any Federal law. 21
(9) PRESERVATION OF AUTHORITY.No provi- 22
sion in paragraph (3) shall be construed as pre- 23
venting the Agency from conducting an examination 24
authorized by this title or under the authorities trans- 25

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ferred under subtitles F and H or pursuant to any 1
enumerated consumer law. No provision of this title 2
shall be construed as limiting the authority of the Di- 3
rector to require reports from a covered person, as 4
permitted under paragraph (4), regarding informa- 5
tion owned or under the control of the covered person, 6
regardless of whether such information is maintained, 7
stored, or processed by another person. 8
(10) REPORTS OF TAX LAW NONCOMPLIANCE. 9
The Director shall provide the Commissioner of Inter- 10
nal Revenue with any report of examination or re- 11
lated information identifying possible tax law non- 12
compliance. 13
(11) DELEGATION. 14
(A) IN GENERAL.The Director may dele- 15
gate the examination authorities of the Agency 16
under this title to any appropriate agency, as 17
defined in section 123, for any insured deposi- 18
tory institution or insured credit union that is 19
not subject to section 123 upon a petition by an 20
appropriate agency. 21
(B) STANDARD FOR DELEGATION.The Di- 22
rector shall provide such delegation if, in the Di- 23
rectors sole discretion, the Director determines 24
that 25

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(i) the delegation is consistent with the 1
public interest; 2
(ii) the appropriate agency is capable 3
of enforcing compliance with this Act, and 4
with any regulation prescribed under this 5
Act; and 6
(iii) such capability is comparable to 7
or superior to the capability of the Agency, 8
in terms of expertise, demonstrated commit- 9
ment, and overall effectiveness, in enforcing 10
such compliance. 11
(C) EFFECT OF DELEGATION.The insured 12
depository institution or insured credit union 13
shall be subject to the examination process de- 14
scribed in section 123(b). 15
(D) NO EFFECT ON ENFORCEMENT.The 16
Directors delegation authority under this para- 17
graph shall not apply to the Directors enforce- 18
ment responsibilities under subsection (e). 19
(d) EXCLUSIVE RULEMAKING AND EXAMINATION AU- 20
THORITY.Notwithstanding any other provision of Federal 21
law other than section 123 and subsections (f) and (h) of 22
this section, to the extent that a Federal law authorizes the 23
Director and another Federal agency to prescribe regula- 24
tions, issue guidance, conduct examinations, or require re- 25

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ports under that law for purposes of assuring compliance 1
with this title, any enumerated consumer law, the laws for 2
H, and any regulations prescribed under this title or pursu- 4
ant to any such authority, the Director shall have the exclu- 5
sive authority to prescribe regulations, issue guidance, con- 6
duct examinations, require reports, or issue exemptions 7
with regard to any person subject to that law and with re- 8
spect to any activity regulated under any enumerated con- 9
sumer law. 10
(e) PRIMARY ENFORCEMENT AUTHORITY. 11
(1) THE AGENCY TO HAVE PRIMARY ENFORCE- 12
MENT AUTHORITY.To the extent that a Federal law 13
authorizes the Agency and another Federal agency to 14
enforce that law, the Agency shall have primary au- 15
thority to enforce that Federal law with respect to 16
any person in accordance with this subsection. 17
(2) COORDINATION WITH FEDERAL TRADE COM- 18
MISSION. 19
(A) NOTICE.If the Commission is author- 20
ized to enforce any Federal law described in 21
paragraph (1), or a regulation prescribed under 22
any such Federal law, the Commission shall 23
serve written notice to the Director of any en- 24
forcement action at least 30 days prior to initi- 25

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ating such an enforcement action, except that if 1
exigent circumstances are present, the Commis- 2
sion may provide notice immediately upon initi- 3
ating such enforcement action. 4
(B) INTERVENTION BY THE DIRECTOR. 5
Upon receiving any notice under subparagraph 6
(A) with respect to an enforcement action, the 7
Director may intervene in such enforcement ac- 8
tion and upon intervening 9
(i) be heard on all matters arising in 10
such enforcement action; and 11
(ii) file petitions for appeal in such en- 12
forcement action. 13
(C) PENDENCY OF AGENCY ACTION.When- 14
ever a civil action has been instituted by or on 15
behalf of the Agency for any violation of any 16
Federal law described in paragraph (1), or a 17
regulation prescribed under any such Federal 18
law, the Commission may not, during the pend- 19
ency of that action instituted by or on behalf of 20
the Agency, institute a civil action under such 21
law or regulation against any defendant named 22
in the Agency complaint in such action for any 23
violation alleged in the Agency complaint. 24
(D) AGREEMENTS BETWEEN AGENCIES. 25

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(i) NEGOTIATIONS AUTHORIZED.The 1
Director may negotiate an agreement with 2
the Commission to establish procedures to 3
ensure that the enforcement actions of the 2 4
agencies are appropriately coordinated. 5
(ii) SCOPE OF NEGOTIATED AGREE- 6
MENT.The terms of any agreement nego- 7
tiated pursuant to clause (i) may modify or 8
supersede the provisions of subparagraphs 9
(A), (B), and (C). 10
(3) COORDINATION WITH OTHER FEDERAL AGEN- 11
CY. 12
(A) REFERRAL.Any Federal agency (other 13
than the Federal Trade Commission) that is au- 14
thorized to enforce a Federal law described in 15
paragraph (1) may recommend in writing to the 16
Director that the Agency initiate an enforcement 17
proceeding to the extent the Agency is authorized 18
by that Federal law or by this title. The rec- 19
ommendation shall be accompanied by a written 20
explanation of the concerns giving rise to the rec- 21
ommendation. 22
OF OTHER FEDERAL AGENCY.If the Agency 24
does not, before the end of the 120-day period be- 25

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ginning on the date on which the Director re- 1
(A), initiate an enforcement proceeding, the other 3
agency referred to in subparagraph (A) may ini- 4
tiate an enforcement proceeding as permitted by 5
that Federal law. 6
(4) INSTITUTIONS SUBJECT TO SPECIAL EXAM- 7
INATION AND ENFORCEMENT PROCEDURES.This 8
subsection shall not apply to institutions subject to 9
section 123. 10
(f) PRESERVATION OF OTHER AUTHORITY. 11
(1) ATTORNEY GENERAL.No provision of this 12
title shall be construed as affecting any authority of 13
the Attorney General. 14
(2) SECRETARY OF THE TREASURY. No provi- 15
sion of this title shall be construed as affecting any 16
authority of the Secretary of the Treasury, including 17
with respect to prescribing regulations, initiating en- 18
forcement proceedings, or taking other actions with 19
respect to a person providing tax planning or tax 20
preparation services. 21
(3) FAIR HOUSING ACT.No provision of this 22
title shall be construed as affecting any authority 23
arising under the Fair Housing Act. 24

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(g) EFFECT ON OTHER AUTHORITY.No provision of 1
this section or section 123 shall be construed as modifying 2
or limiting the authority of any appropriate Federal bank- 3
ing agency or the Director or Agency to interpret, or take 4
enforcement action under, any law or regulation the inter- 5
pretation or enforcement of which is committed to the bank- 6
ing agency or the Director or Agency, which shall include, 7
in the case of the Director and the Agency, this Act, the 8
enumerated consumer laws, and the regulations prescribed 9
under this Act or such laws. 10
(h) PRESERVATION OF FEDERAL TRADE COMMISSION 11
AUTHORITY.No provision of this title shall be construed 12
as modifying, limiting, or otherwise affecting the authority 13
of the Federal Trade Commission under the Federal Trade 14
Commission Act or other laws other than the enumerated 15
consumer laws. 16
SEC. 123. EXAMINATION AND ENFORCEMENT FOR SMALL 17
BANKS, THRIFTS, AND CREDIT UNIONS. 18
(a) SCOPE OF INSTITUTIONS SUBJECT TO THIS SEC- 19
TION. 20
(1) INSTITUTIONS COVERED.This section shall 21
apply to 22
(A) any insured depository institution with 23
total assets of $10,000,000,000 or less; or 24

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H.L.C.
(B) any insured credit union with total as- 1
sets of $1,500,000,000 or less. 2
(2) APPROPRIATE AGENCY.For purposes of this 3
title, the term appropriate agency means 4
(A) in the case of an insured depository in- 5
stitution, the appropriate Federal banking agen- 6
cy as such term is defined in section 3 of the 7
Federal Deposit Insurance Act; and 8
(B) in the case of an insured credit union, 9
the National Credit Union Administration. 10
(b) EXAMINATIONS. 11
(1) IN GENERAL.The appropriate agency shall 12
on a periodic basis examine, or require reports from, 13
an institution referred to in subsection (a) for pur- 14
regulation prescribed by the Director under this title 17
requirements. 20
(2) AGENCY ROLE IN EXAMINATIONS. 21
(A) The appropriate agency shall provide 22
all reports, records, and documentation related to 23
the examination process to the Agency on a time- 24
ly and ongoing basis. 25

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(B) The Director and Agency may, at its 1
discretion, include an examiner on any exam- 2
ination conducted under paragraph (1). The ap- 3
propriate agency shall involve such Agency ex- 4
aminer in the entire examination process, in- 5
cluding setting the scope of an examination, par- 6
ticipating in the examination, and providing 7
input on the examination report, matters requir- 8
ing attention and examination ratings. 9
(c) ENFORCEMENT. 10
provision of this title other than this subsection, the 12
appropriate agency shall have primary authority to 13
enforce violations identified at institutions referred to 14
in subsection (a) of any of the requirements of this 15
title, the enumerated consumers laws, and any regula- 16
tion prescribed by the Director under this title or 17
pursuant to the authorities transferred under subtitles 18
F and H. 19
(2) COORDINATION WITH APPROPRIATE AGEN- 20
CY. 21
(A) REFERRAL. 22
(i) IN GENERAL.The Agency may 23
recommend in writing to the appropriate 24
agency that the appropriate agency initiate 25

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an enforcement proceeding to the extent the 1
appropriate agency is authorized by that 2
Federal law or by this title. 3
(ii) EXPLANATION.Any recommenda- 4
tion under clause (i) shall be accompanied 5
by a written explanation of the concerns 6
giving rise to the recommendation. 7
OF AGENCY.If the appropriate agency does not, 9
before the end of the 120-day period beginning 10
on the date on which the appropriate agency re- 11
(A), initiate an enforcement proceeding, the 13
Agency may initiate an enforcement proceeding 14
as permitted by Federal law. 15
(d) ACTIONS ARISING OUT OF CONSUMER COMPLAINT 16
SYSTEM.Notwithstanding any provision of this section, 17
if through the consumer complaint system administered by 18
the Agency under section 115(c)(3), the Director has reason- 19
able cause to believe that an institution referred to in sub- 20
section (a) demonstrates noncompliance with any provision 21
of this title, the enumerated consumer laws, or any regula- 22
tion prescribed by the Director under this title or pursuant 23
to the authorities transferred under subtitles F and H, the 24
Director may directly investigate such institution for such 25

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H.L.C.
noncompliance and take any action permitted under sub- 1
title E that the Director deems appropriate. 2
(e) REMOVAL OF APPROPRIATE AGENCY FOR PAR- 3
TICULAR INSTITUTION. 4
(1) HEIGHTENED SUPERVISION.The Director 5
(A) may provide notice to an appropriate 6
agency that the Director is considering issuing a 7
removal order under paragraph (2); and 8
(B) shall have an Agency examiner partici- 9
pate in the examination process under subsection 10
(b) for at least 1 examination cycle. 11
(2) REMOVAL BY ORDER.If, after the comple- 12
tion of at least 1 examination cycle following the pro- 13
vision of notice to an appropriate agency under para- 14
graph (1), the Director determines in writing that the 15
appropriate agency has failed to adequately conduct 16
consumer compliance examinations or bring appro- 17
priate enforcement actions against an institution re- 18
ferred to in subsection (a), the Director may order the 19
removal of the appropriate agency from its respon- 20
sibilities under this section for such institution. 21
(3) AGENCY AUTHORITY UPON REMOVAL.Upon 22
removal pursuant to paragraph (2), the Agency shall 23
examine and enforce against such institution as if the 24
institution were subject to section 122. 25

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(4) EFFECTIVE DATE.An order under para- 1
graph (2) shall take effect 30 days after a determina- 2
tion by the Secretary of the Treasury pursuant to 3
paragraphs (5) and (6). 4
(5) AUTOMATIC APPEAL.An order issued by the 5
Director pursuant to paragraph (2) shall be auto- 6
matically appealed to the Secretary. 7
(6) DECISION BY THE SECRETARY OF THE 8
TREASURY. 9
(A) DETERMINATION.The order issued 10
pursuant to paragraph (2) shall be deemed af- 11
firmed unless the Secretary of the Treasury de- 12
nies the determination of the Director within 13
120 days of the issuance of the order pursuant 14
to paragraph (2). 15
(B) RULE OF CONSTRUCTION.Nothing in 16
subparagraph (A) shall be construed as prohib- 17
iting the Secretary of the Treasury from making 18
a determination to either affirm or deny an 19
order issued pursuant to paragraph (2) prior to 20
the passage of the time period in subparagraph 21
(A). 22
(7) REGULATIONS.By the transfer date, the 23
Secretary shall issue regulations that establish the 24
standards the Director shall apply in making a deter- 25

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mination to remove an appropriate agency and the 1
process, procedures, and standards for an appeal. 2
Such standards shall require the Director to consider 3
at least the following in issuing an order removing an 4
appropriate agency for an institution referred to in 5
subsection (a)(1): 6
(A) Reports of examination of such institu- 7
tion. 8
(B) Any enforcement actions taken by an 9
appropriate agency against such institution and 10
the results of those actions. 11
(C) Consumer complaints issued against 12
such institution. 13
(D) Actions taken by State attorneys gen- 14
eral and private rights of action against such in- 15
stitution. 16
(f) POLICIES AND PROCEDURES.Within 180 days 17
after the designated transfer date, the Agency and the ap- 18
propriate agency shall develop policies and procedures for 19
implementing this section. 20
(g) ASSESSMENTS. 21
(1) LIMITATION ON CERTAIN FEES.The Agency 22
shall not assess examination fees on an institution re- 23
ferred to in subsection (a). 24

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this section shall be construed as preventing the ap- 2
propriate agency from assessing fees on an institution 3
referred to in paragraph (1) to meet the appropriate 4
agencys expenses for carrying out such examination 5
and supervision responsibilities pursuant to this sec- 6
tion. 7
SEC. 124. SIMULTANEOUS AND COORDINATED SUPER- 8
VISORY ACTION. 9
(a) EXAMINATIONS.A Federal banking agency and 10
the Agency shall, with respect to each insured depository 11
institution, credit union, or other covered person supervised 12
by the Federal banking agency and the Agency, respec- 13
tively 14
(1) coordinate the scheduling of examinations of 15
the insured depository institution, and credit union, 16
or other covered person; 17
(2) conduct simultaneous examinations of each 18
insured depository institution, credit union or other 19
covered person, unless such institution requests exami- 20
nations to be conducted separately; 21
(3) share each draft report of examination with 22
the other agency and permit the receiving agency a 23
reasonable opportunity (which shall not be less than 24
a period of 30 days after the date of receipt) to com- 25

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ment on the draft report before such report is made 1
final; and 2
(4) prior to issuing a final report of examina- 3
tion or taking supervisory action, an agency shall 4
take into consideration concerns, if any, raised in the 5
comments made by the other agency. 6
(b) COORDINATION WITH STATE BANK SUPER- 7
VISORS.The Agency shall pursue arrangements and agree- 8
ments with State bank supervisors to coordinate examina- 9
tions consistent with subsection (a). 10
(c) RESOLUTION OF CONFLICT IN SUPERVISION. 11
(1) REQUEST OF DEPOSITORY INSTITUTION. 12
(A) IN GENERAL.If the proposed material 13
supervisory determinations of the Agency and a 14
Federal banking agency are conflicting, an in- 15
sured depository institution, credit union, or 16
other covered person may request the agencies to 17
coordinate and present a joint statement of co- 18
ordinated supervisory action. 19
(B) LIMITATION.A request of an insured 20
depository institution, credit union, or other cov- 21
ered person shall not be used to appeal a super- 22
visory rating or determination by the Agency or 23
a Federal banking agency. 24

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(2) JOINT STATEMENT.The agencies receiving a 1
request from an insured depository institution, credit 2
union, or covered person under paragraph (1) shall 3
provide a joint statement resolving the conflict under 4
such subparagraph before the end of the 30-day period 5
beginning on the date the agencies receive such re- 6
quest. 7
(d) APPEALS TO GOVERNING PANEL. 8
(1) IN GENERAL.If the agencies receiving a re- 9
quest from an insured depository institution, credit 10
union, or covered person under subsection (c)(1) do 11
not issue a joint statement under subsection (c)(2), or 12
if either agency takes or attempts to take any super- 13
visory action relating to the request for the joint 14
statement without the consent of the other agency, the 15
insured depository institution, credit union, or other 16
covered person may institute an appeal to a gov- 17
erning panel under this subsection. 18
(2) TIMETABLE.Any appeal under paragraph 19
(1) with regard to a failure of agencies to issue a 20
joint statement shall be filed before the end of the 30- 21
day period beginning at the end of the 30-day period 22
during which such joint statement was due under sub- 23
section (c)(2). 24

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(e) COMPOSITION OF GOVERNING PANEL.The gov- 1
erning panel for an appeal under this section shall be com- 2
posed of 3
(1) 2 individuals 4
(A) 1 of whom is a representative from the 5
Agency; 6
(B) 1 of whom is a representative of the 7
Federal banking agency which received the re- 8
quest to which the appeal relates; and 9
(C) neither of whom 10
(i) have participated in the material 11
supervisory determinations under appeal; 12
and 13
(ii) report directly or indirectly to the 14
individual who made the supervisory deter- 15
minations under appeal; and 16
(2) 1 individual who is a representative from 17
(A) the Federal banking agency that heads 18
the Financial Institution Examination Council; 19
or 20
(B) if the Financial Institutions Examina- 21
tion Council is headed by a Federal banking 22
agency that is a party to the appeal, the Federal 23
banking agency that is next scheduled to head 24
the Financial Institutions Examination Council. 25

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(f) CONDUCT OF APPEAL. 1
(1) CONTENT OF FILING APPEAL.The insured 2
depository institution, credit union, or other covered 3
person which institutes an appeal under subsection 4
(d)(1) shall include in the filing of such appeal all the 5
facts and legal arguments pertaining to the matter 6
appealed. 7
(2) APPEARANCE.The insured depository insti- 8
tution, credit union, or other covered person which in- 9
stitutes an appeal under this section may appear be- 10
fore the governing panel in person or by telephone, 11
through counsel, employees, or representatives of, or 12
for, such institution, credit union, or other covered 13
person. 14
(3) REQUESTS FOR ADDITIONAL INFORMATION. 15
Any governing panel convened under this section may 16
request the insured depository institution, credit 17
union, or other covered person, the Agency, or the 18
Federal banking agency to produce additional infor- 19
mation relevant to the appeal. 20
(4) FINAL WRITTEN DETERMINATIONS .Any 21
governing panel convened under this section, by a 22
majority vote of the members of the panel, shall pro- 23
vide a final determination, in writing, within 30 24
days of the filing of an informationally complete ap- 25

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peal, or such longer period as the panel and the in- 1
sured depository institution, credit union, or other 2
covered person may jointly agree. 3
(5) PUBLIC INFORMATION.A redacted copy of 4
any determination by a governing panel convened 5
under this section shall be made public upon the 6
issuance of such determination. 7
(g) PROHIBITION AGAINST RETALIATION.The Direc- 8
tor and the Federal banking agencies shall prescribe regula- 9
tions to provide safeguards from retaliation against any in- 10
sured depository institution, credit union, or other covered 11
person which institutes an appeal under this section, as 12
well as against any officer or and employee of any such 13
institution, credit union, or other person. 14
(h) MATERIAL SUPERVISORY DETERMINATION DE- 15
FINED.For purposes of this section, the term material 16
supervisory determination 17
(1) includes any action relating to any super- 18
vision or examinations; and 19
(2) does not include 20
(A) a determination by any Federal bank- 21
ing agency to appoint a conservator or receiver 22
for an insured depository institution or a liqui- 23
dating agent for an insured credit union, as the 24
case may be, or a decision to take action pursu- 25

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ant to section 38 of the Federal Deposit Insur- 1
ance Act or section 212 of the Federal Credit 2
Union Act, as the case may be; or 3
(B) any regulation or guidance, or order of 4
general applicability. 5
SEC. 125. LIMITATIONS ON AUTHORITY OF AGENCY AND DI- 6
RECTOR. 7
(a) EXCLUSION FOR MERCHANTS, RETAILERS, AND 8
SELLERS OF NONFINANCIAL SERVICES. 9
(1) IN GENERAL.Notwithstanding any provi- 10
sion of this title (other than paragraph (4)) and sub- 11
ject to paragraph (2), the Director and the Agency 12
order assessments, under this title with respect to 15
(A) credit extended directly by a merchant, 16
retailer, or seller of nonfinancial services to a 17
consumer, in a case in which the good or service 18
being provided is not itself a consumer financial 19
product or service, exclusively for the purpose of 20
enabling that consumer to purchase goods or 21
services directly from the merchant, retailer, or 22
seller of nonfinancial services; or 23

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(B) collection of debt, directly by the mer- 1
chant, retailer, or seller of nonfinancial services, 2
arising from such credit extended. 3
(2) EXCEPTION FOR EXISTING AUTHORITY.The 4
Director may exercise any rulemaking authority re- 5
garding an extension of credit described in paragraph 6
(1)(A) or the collection of debt arising from such ex- 7
tension, as may be authorized by the enumerated con- 8
sumer laws or any law or authority transferred under 9
subtitle F or H. 10
superseding the authority of the Federal Trade Com- 13
mission or any other agency with respect to credit ex- 14
tended, or the collection of debt arising from such ex- 15
tension, directly by a merchant, retailer, or seller of 16
nonfinancial services to a consumer exclusively for the 17
purpose of enabling that consumer to purchase goods 18
or services directly from the merchant, retailer, or 19
seller of nonfinancial services. 20
(4) EXCLUSION NOT APPLICABLE TO CERTAIN 21
CREDIT TRANSACTIONS.Paragraph (1) shall not 22
apply to 23
(A) any credit transaction, including the 24
collection of the debt arising from such extension, 25

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in which the merchant, retailer, or seller of non- 1
financial services assigns, sells, or otherwise con- 2
veys such debt owed by the consumer to another 3
person; or 4
(B) any credit transaction 5
(i) in which the credit provided signifi- 6
cantly exceeds the market value of the prod- 7
uct or service provided, and 8
(ii) with respect to which the Director 9
finds that the sale of the product or service 10
is done as a subterfuge so as to evade or cir- 11
cumvent the provisions of this title. 12
(b) EXCLUSION FOR PERSONS REGULATED BY THE 13
SECURITIES AND EXCHANGE COMMISSION. 14
authority of the Securities and Exchange Commission 17
or any securities commission (or any agency or office 18
performing like functions) of any State to adopt rules, 19
initiate enforcement proceedings, or take any other 20
action with respect to a person regulated by the Secu- 21
rities and Exchange Commission or any securities 22
functions) of any State. The Director and Agency 24
shall have no authority to exercise any power to en- 25

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force this title with respect to a person regulated by 1
the Securities and Exchange Commission or any secu- 2
rities commission (or any agency or office performing 3
like functions) of any State. 4
withstanding paragraph (1), the Securities and Ex- 6
change Commission shall consult and coordinate with 7
the Director with respect to any rule (including any 8
advance notice of proposed rulemaking) regarding an 9
investment product or service that is the same type of 10
product as, or that competes directly with, a con- 11
sumer financial product or service that is subject to 12
the jurisdiction of the Agency under this title or 13
under any other law. 14
(c) EXCLUSION FOR PERSONS REGULATED BY THE 15
COMMODITY FUTURES TRADING COMMISSION. 16
authority of the Commodity Futures Trading Com- 19
mission to adopt rules, initiate enforcement pro- 20
ceedings, or take any other action with respect to a 21
person regulated by the Commodity Futures Trading 22
Commission. The Director and the Agency shall have 23
no authority to exercise any power to enforce this title 24

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with respect to a person regulated by the Commodity 1
Futures Trading Commission. 2
withstanding paragraph (1), the Commodity Futures 4
Trading Commission shall consult and coordinate 5
with the Director with respect to any rule (including 6
any advance notice of proposed rulemaking) regard- 7
ing a product or service that is the same type of prod- 8
uct as, or that competes directly with, a consumer fi- 9
nancial product or service that is subject to the juris- 10
diction of the Agency under this title or under any 11
other law. 12
(d) EXCLUSION FOR PERSONS REGULATED BY A 13
STATE INSURANCE REGULATOR. 14
authority of any State insurance regulator to adopt 17
rules, initiate enforcement proceedings, or take any 18
other action with respect to a person regulated by any 19
State insurance regulator. Except as provided in 20
paragraphs (2) and (3), the Agency shall have no au- 21
thority to exercise any power to enforce this title with 22
respect to a person regulated by any State insurance 23
regulator. 24

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(3) PRESERVATION OF CERTAIN AUTHORITIES. 8
Nothing in this title shall be construed as limiting the 9
authority of the Director and the Agency from exer- 10
cising powers under this Act with respect to the pro- 11
vision by a covered person of a product or service, not 12
otherwise subject to this Act, for or on behalf of a per- 13
son regulated by a State insurance regulator, in con- 14
nection with a financial activity. 15
(e) EXCLUSION FOR PERSONS REGULATED BY THE 16
FEDERAL HOUSING FINANCE AGENCY.No provision of 17
this title shall be construed as altering, amending, or affect- 18
ing the authority of the Federal Housing Finance Agency 19
to adopt rules, initiate enforcement proceedings, or take any 20
other action with respect to a person regulated by the Fed- 21
eral Housing Finance Agency. The Director and Agency 22
shall have no authority to exercise any power to enforce 23
this title with respect to a person regulated by the Federal 24
Housing Agency. For purposes of this subsection, the term 25

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person regulated by the Federal Housing Finance Agency 1
means any Federal home loan bank, and any joint office 2
of 1 or more Federal home loan banks. 3
(f) EXCLUSION FOR QUALIFIED RETIREMENT OR ELI- 4
GIBLE DEFERRED COMPENSATION PLANS AND ARRANGE- 5
MENTS. 6
authority of the Secretary of the Treasury, the Sec- 9
retary of Labor, or the Commissioner of Internal Rev- 10
enue to adopt regulations, initiate enforcement pro- 11
ceedings, or take any actions with respect to 12
(A) any retirement or eligible deferred com- 13
pensation plan or arrangement qualified under 14
or meeting the requirements of section 401(a), 15
403(a), 403(b), 457(b), 408 or 408A of the Inter- 16
nal Revenue Code; or 17
(B) any educational savings arrangement 18
under section 529 of such Code. 19
(2) LIMITATION ON AGENCY AUTHORITY. 20
(A) IN GENERAL.The Director and the 21
Agency may not exercise any power to enforce 22
this title with respect to services provided di- 23
rectly (or indirectly if the services relate to the 24
operation of such plan or arrangement) to 25

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(i) any retirement or eligible deferred 1
compensation plan or arrangement quali- 2
fied under or meeting the requirements of 3
section 401(a), 403(a), 403(b), 457(b), 408, 4
or 408A of the Internal Revenue Code; or 5
(ii) any educational savings arrange- 6
ment under section 529 of such Code. 7
(B) SERVICES DEFINED.For purposes sub- 8
paragraph (A), the term services shall include, 9
for example, services for custody and investment 10
of assets, administration, compliance, and par- 11
ticipant assistance. 12
(g) EXCLUSION FOR ACCOUNTANTS, TAX PREPARERS, 13
AND ATTORNEYS. 14
ments, over 19
(A) any person that is a certified public ac- 20
countant, permitted to practice as a certified 21
public accounting firm, or certified or licensed 22
for such purpose by a State, or any individual 23
who is employed by or holds an ownership inter- 24
est with respect to a person described in this sub- 25

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paragraph when such person is performing or of- 1
fering to perform customary and usual account- 2
ing activities, including the provision of account- 3
ing, tax, advisory, other services that are subject 4
to the regulatory authority of a state board of ac- 5
countancy or a federal authority, or other serv- 6
ices that are incidental to such customary and 7
usual accounting activities, to the extent that 8
such incidental services are not offered or pro- 9
vided by the person separate and apart from 10
such customary and usual accounting activities 11
and are not offered or provided to consumers 12
who are not receiving such customary and usual 13
accounting activities; 14
(B) any person other than a person de- 15
scribed in subparagraph (A) that performs in- 16
come tax preparation activities for consumers; or 17
(C) any individual who is providing legal 18
advice or services for which a license to practice 19
law is required under the law of the State in 20
which the advice or services are provided and 21
which are performed within the scope of an at- 22
torney-client relationship established by an 23
agreement, but only to the extent of such legal 24
advice or services. 25

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(2) NO EXCLUSION WITH RESPECT TO REGISTRA- 1
TION OF MOST ATTORNEYS.Notwithstanding para- 2
graph (1), this subsection shall not apply to any au- 3
thority granted to the Director or the Agency under 4
section 129 with respect to a licensed attorney, except 5
to the extent a licensed attorney is solely providing 6
legal services in connection with 7
(A) the preparation and filing of a bank- 8
ruptcy petition; or 9
(B) court proceedings to avoid a foreclosure. 10
(1) shall not apply to 12
(A) any person described in paragraph 13
(1)(A) to the extent such person is engaged in 14
any activity which is not a customary and usual 15
accounting activity described in paragraph 16
(1)(A) or incidental thereto but which is a finan- 17
cial activity described in any subparagraph of 18
section 101(19); 19
(B) any person described in paragraph 20
(1)(B) or (1)(C) to the extent such person is en- 21
gaged in any activity which is a financial activ- 22
ity described in any subparagraph of section 23
101(19); or 24

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(C) any person described in paragraph 1
(1)(A), (1)(B) or (1)(C) that is otherwise subject 2
to any of the enumerated consumer laws or the 3
authorities transferred under subtitle F or H. 4
(h) EXCLUSION FOR REAL ESTATE LICENSEES. 5
ments, over a person that is licensed or registered as 10
a real estate broker, real estate agent, in accordance 11
with State law, but only to the extent that such per- 12
son 13
(A) acts as a real estate agent or broker for 14
a buyer, seller, lessor, or lessee of real property; 15
(B) brings together parties interested in the 16
sale, purchase, lease, rental, or exchange of real 17
property; 18
(C) negotiates, on behalf of any party, any 19
portion of a contract relating to the sale, pur- 20
chase, lease, rental, or exchange of real property 21
(other than in connection with providing financ- 22
ing with respect to any such transaction); 23
(D) engages in any activity for which a 24
person engaged in the activity is required to be 25

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registered or licensed as a real estate agent or 1
real estate broker under any applicable law; or 2
(E) offers to engage in any activity, or act 3
in any capacity, described in subparagraph (A), 4
(B), (C), or (D). 5
(i) EXCLUSION FOR AUTO DEALERS. 13
forcement or any other authority, including authority 16
to order assessments, over 17
(A) a motor vehicle dealer that is primarily 18
engaged in the sale and servicing of motor vehi- 19
cles, the leasing and servicing of motor vehicles, 20
or both; or 21
(B) a person that 22
(i) is controlled by, or is under com- 23
mon control with, one or more motor vehicle 24
dealers; and 25

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(ii) primarily engages in the extension 1
of, or arranging for the extension of, retail 2
credit or retail leases involving motor vehi- 3
cles, where 90 percent of such extension, or 4
arranging for such extension, is made with 5
respect to customers of one or more motor 6
vehicle dealers that control such person or 7
with which such person is under common 8
control. 9
(2) CERTAIN FUNCTIONS EXCEPTED.The provi- 10
sions of paragraph (1) shall not apply to any person 11
to the extent that person 12
(A) provides consumers with any services 13
related to residential mortgages; or 14
(B) operates a line of business that involves 15
the extension of retail credit or retail leases in- 16
volving motor vehicles, and in which 17
(i) the extension of retail credit or re- 18
tail leases is routinely provided directly to 19
consumers; and 20
(ii) the contract governing such exten- 21
sion of retail credit or retail leases is not 22
routinely assigned to a third party finance 23
or leasing source. 24

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(3) NO IMPACT ON PRIOR AUTHORITY.Nothing 1
in this subsection shall be construed to modify, limit, 2
or supersede the rulemaking or enforcement authority 3
over motor vehicle dealers that could be exercised by 4
any Federal department or agency on the day prior 5
to the enactment of this title. 6
(4) NO TRANSFER OF CERTAIN AUTHORITY. 7
Notwithstanding subtitle F or any other provision of 8
law under this title, the consumer financial protection 9
functions of the Board of Governors and the Federal 10
Trade Commission shall not be transferred to the Di- 11
rector or the Agency to the extent such functions are 12
with respect to a person described under paragraph 13
(1). 14
section: 16
(A) MOTOR VEHICLE.The term motor ve- 17
hicle means any self-propelled vehicle designed 18
for transporting persons or property on a street, 19
highway, or other road. 20
(B) MOTOR VEHICLE DEALER.The term 21
motor vehicle dealer means any person resi- 22
dent in the United States or any territory of the 23
United States, and licensed by a State, a terri- 24

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H.L.C.
tory of the United States, or the District of Co- 1
lumbia to engage in the sale of motor vehicles. 2
(j) NO AUTHORITY TO IMPOSE USURY LIMIT.No 3
provision of this title shall be construed as conferring au- 4
thority on the Director or the Agency to establish a usury 5
limit applicable to an extension of credit offered or made 6
by a covered person to a consumer, unless explicitly author- 7
ized by law. 8
(k) EXCLUSION FOR MANUFACTURED HOME RETAIL- 9
ERS AND MODULAR HOME RETAILERS. 10
order assessments, over a person to the extent such 14
person 15
(A) acts as an agent or broker for a buyer 16
or seller of a manufactured home or a modular 17
home; 18
(B) facilitates the purchase by a consumer 19
of a manufactured home or modular home, by 20
negotiating the purchase price or terms of the 21
sales contract (other than providing financing 22
with respect to such transaction); or 23
(C) offers to engage in any activity de- 24
scribed in subparagraphs (A) or (B). 25

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section: 9
(A) MANUFACTURED HOME.The term 10
manufactured home has the meaning given 11
such term in section 603 of the National Manu- 12
factured Housing Construction and Safety 13
Standards Act of 1974 (42 U.S.C. 5402). 14
(B) MODULAR HOME.The term modular 15
home means a house built in a factory in two 16
or more modules that meet the State or local 17
building codes where the house will be located 18
and where such modules are transported to the 19
building site, installed on foundations, and com- 20
pleted. 21
SEC. 126. COLLECTION OF INFORMATION; CONFIDEN- 22
TIALITY REGULATIONS. 23
(a) COLLECTION OF INFORMATION. 24

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(1) IN GENERAL.In conducting research on the 1
provision of consumer financial products or services, 2
the Director shall have the power to gather informa- 3
tion from time to time regarding the organization, 4
business conduct, and practices of covered persons or 5
service providers. 6
(2) SPECIFIC AUTHORITY.In order to gather 7
such information, the Director shall have the power 8
(A) to gather and compile information; 9
(B) to require persons to file with the Agen- 10
cy, in such form and within such reasonable pe- 11
riod of time as the Director may prescribe, by 12
regulation or order, annual or special reports, or 13
answers in writing to specific questions, fur- 14
nishing information the Director may require; 15
and 16
(C) to make public such information ob- 17
tained by it under this section as is in the public 18
interest in reports or otherwise in the manner 19
best suited for public information and use. 20
(b) CONFIDENTIALITY REGULATIONS.The Director 21
shall prescribe regulations regarding the confidential treat- 22
ment of information obtained from persons in connection 23
with the exercise of any authority of the Agency or Director 24

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under this title and the enumerated consumer laws and the 1
(c) PRIVACY CONSIDERATIONS.In collecting informa- 3
tion from any person, publicly releasing information held 4
by the Agency, or requiring covered persons to publicly re- 5
port information, the Director and the Agency shall take 6
steps to ensure that proprietary, personal or confidential 7
consumer information that are protected from public disclo- 8
sure under section 552(b) or 552a of title 5, United States 9
Code, or any other provision of law are not made public 10
under this title. 11
SEC. 127. MONITORING; ASSESSMENTS OF SIGNIFICANT 12
REGULATIONS; REPORTS. 13
(a) MONITORING. 14
(1) IN GENERAL.The Agency shall monitor for 15
risks to consumers in the provision of consumer fi- 16
nancial products or services, including developments 17
in markets for such products or services. 18
(2) MEANS OF MONITORING.Such monitoring 19
may be conducted by examinations of covered persons 20
or service providers, analysis of reports obtained from 21
covered persons or service providers, assessment of 22
consumer complaints, surveys and interviews of cov- 23
ered persons, service providers, and consumers, and 24
review of available databases. 25

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(3) CONSIDERATIONS.In allocating the re- 1
sources of the Agency to perform the monitoring re- 2
quired by this section, the Director may consider, 3
among other factors 4
(A) likely risks and costs to consumers asso- 5
ciated with buying or using a type of consumer 6
financial product or service; 7
(B) consumers understanding of the risks of 8
a type of consumer financial product or service; 9
(C) the state of the law that applies to the 10
provision of a consumer financial product or 11
service, including the extent to which the law is 12
likely to adequately protect consumers; 13
(D) rates of growth in the provision of a 14
consumer financial product or service; 15
(E) extent, if any, to which the risks of a 16
consumer financial product or service may dis- 17
proportionately affect traditionally underserved 18
consumers, if any; or 19
(F) types, number, and other pertinent 20
characteristics of covered persons that provide 21
the product or service. 22
(4) REPORTS.The Agency shall publish at least 23
1 report of significant findings of the monitoring re- 24
quired by paragraph (1) in each calendar year, be- 25

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H.L.C.
ginning in the calendar year that is 1 year after the 1
(b) ASSESSMENT OF SIGNIFICANT REGULATIONS. 3
(1) IN GENERAL.The Agency shall conduct an 4
assessment of each significant regulation prescribed or 5
order issued by the Director under this title, under 6
pursuant to any enumerated consumer law that ad- 8
dresses, among other relevant factors, the effectiveness 9
of the regulation in meeting the purposes and objec- 10
tives of this Act and the specific goals stated by the 11
Director. 12
(2) BASIS FOR ASSESSMENT.The assessment 13
shall reflect available evidence and any data that the 14
Agency reasonably may collect. 15
(3) REPORTS.The Agency shall publish a re- 16
port of an assessment under this subsection not later 17
than 3 years after the effective date of the regulation 18
or order, unless the Director determines that 3 years 19
is not sufficient time to study or review the impact 20
of the regulation, but in no event shall the Agency 21
publish a report of such assessment more than 5 years 22
after the effective date of the regulation or order. 23
(4) PUBLIC COMMENTED REQUIRED.Before 24
publishing a report of its assessment, the Agency shall 25

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H.L.C.
invite, with sufficient time allotted, public comment 1
on, and may hold public hearings on, recommenda- 2
tions for modifying, expanding, or eliminating the 3
newly adopted significant regulation or order. 4
(c) INFORMATION GATHERING.In conducting any 5
monitoring or assessment required by this section, the Agen- 6
cy may gather information through a variety of methods, 7
including by conducting surveys or interviews of consumers. 8
SEC. 128. AUTHORITY TO RESTRICT MANDATORY 9
PREDISPUTE ARBITRATION. 10
(a) IN GENERAL.The Director, by regulation, may 11
prohibit or impose conditions or limitations on the use of 12
any agreement between a covered person and a consumer 13
for a consumer financial product or service providing for 14
arbitration of any future dispute between the parties if the 15
Director finds that such a prohibition or imposition of con- 16
ditions or limitations are in the public interest and for the 17
protection of consumers. 18
(b) EFFECTIVE DATE.Notwithstanding any other 19
provision of law, any regulation prescribed by the Director 20
under subsection (a) shall apply, consistent with the terms 21
of the regulation, to any agreement between a consumer and 22
a covered person entered into after the end of the 180-day 23
period beginning on the effective date of the regulation, as 24
established by the Director. 25

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SEC. 129. REGISTRATION AND SUPERVISION OF NON- 1
DEPOSITORY COVERED PERSONS. 2
(a) RISK-BASED PROGRAMS. 3
(1) IN GENERAL.The Agency shall develop risk- 4
based programs to supervise covered persons that are 5
not credit unions, depository institutions, or persons 6
excluded under section 125 by prescribing registration 7
requirements, reporting requirements, and examina- 8
tion standards and procedures. 9
(2) BASIS FOR PROGRAMS.The risk-based su- 10
pervisory programs established pursuant to para- 11
graph (1) shall be based on 12
(A) relevant registration and reporting in- 13
formation about such covered persons, as deter- 14
mined by the Agency; and 15
(B) the Agencys assessment of risks posed 16
to consumers in the relevant geographic markets 17
and markets for consumer financial products 18
and services. 19
(b) REGISTRATION. 20
regulations regarding registration requirements for 22
covered persons that are not credit unions or deposi- 23
tory institutions. 24
(2) CONSULTATION WITH STATE AGENCIES.In 25
developing and implementing registration require- 26

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ments under this subsection, the Agency shall consult 1
with State agencies regarding requirements or sys- 2
tems for registration (including coordinated or com- 3
bined systems), where appropriate. 4
(3) EXCEPTION FOR RELATED PERSONS.The 5
Agency shall not impose requirements regarding the 6
registration of a related person. 7
(4) REGISTRATION INFORMATION.Subject to 8
regulations prescribed by the Director, the Agency 9
shall publicly disclose the registration information 10
about a covered person which is not a bank holding 11
company, credit union, or depository institution for 12
the purposes of facilitating the ability of consumers to 13
identify the covered person as registered with the 14
Agency. 15
(c) REPORTING REQUIREMENTS. 16
(1) IN GENERAL.The Agency may require re- 17
ports from covered persons that are not credit unions 18
or depository institutions, or service providers thereto, 19
for the purposes of facilitating supervision of such 20
covered persons or service providers. 21
(2) CONSISTENCY OF REPORTING REQUIREMENTS 22
AND RISK-BASED STANDARDS.The Agency shall im- 23
pose reporting requirements under this subsection that 24
are consistent with the risk-based standards developed 25

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and implemented under this section and the registra- 1
tion information pertaining to the relevant types or 2
classes of covered persons. 3
(3) CONTENTS OF REPORTS.Reporting require- 4
ments imposed under this paragraph may include in- 5
formation regarding 6
(A) the nature of the covered persons busi- 7
ness; 8
(B) the covered persons name, legal form, 9
ownership and management structure, and re- 10
lated persons; 11
(C) the covered persons locations of oper- 12
ation; 13
(D) the covered persons types and number 14
of consumer financial products and services pro- 15
vided by the covered person; 16
(E) compliance with any requirement im- 17
posed or enforced by the Agency, including any 18
requirement relating to registration, licensing, 19
fees, or assessments; and 20
(F) the financial condition of such covered 21
person, including a related person, for the pur- 22
pose of assessing the ability of such person to 23
perform its obligation to consumers. 24

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(4) EXCEPTION FOR RELATED PERSONS.Other 1
than reports permitted under paragraph (3)(F) or in 2
connection with a supervisory action or examination 3
or pursuant to the powers granted in subtitle E, the 4
Agency shall not impose requirements regarding re- 5
ports of any related person. 6
(d) EXAMINATIONS. 7
(1) EXAMINATIONS REQUIRED.The Agency 8
shall conduct examinations of covered persons that 9
are not credit unions or depository institutions as 10
part of the programs implemented under paragraphs 11
(2) and (3) of section 122(c). 12
(2) EXAMINATION STANDARDS AND PROCE- 13
DURES.The Director shall establish risk-based 14
standards and procedures for conducting examina- 15
tions of covered persons required to be examined 16
under paragraph (1), including the frequency and 17
scope of such examinations, except that the Agency 18
shall conduct examinations of such covered persons 19
that are determined to pose the highest risk to con- 20
sumers based on factors determined by the Director, 21
such as the operations, sales practices, or consumer fi- 22
nancial products or services provided by such covered 23
persons. 24

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(e) AUTHORITY TO COLLECT INFORMATION REGARD- 1
ING FEES OR ASSESSMENTS.To the extent permitted by 2
Federal law, the Agency may obtain from the Secretary of 3
the Treasury information relating to a covered person 4
which is not a bank holding company, credit union, or de- 5
pository institution, including information regarding com- 6
pliance with a reporting or registration requirement under 7
the subchapter II of chapter 53 of title 31, United States 8
Code, for the purposes of, and only to the extent necessary 9
in, investigating, determining, or enforcing compliance 10
with a requirement relating to any fee or assessment im- 11
posed by the Agency under this title. 12
date. 15
Subtitle CSpecific Authorities 16
SEC. 131. PROHIBITING UNFAIR, DECEPTIVE, OR ABUSIVE 17
ACTS OR PRACTICES. 18
(a) IN GENERAL.The Agency may take any action 19
authorized under subtitle E to prevent a person from com- 20
mitting or engaging in an unfair, deceptive, or abusive act 21
or practice under Federal law in connection with any 22
transaction with a consumer for a consumer financial prod- 23
uct or service, or the offering of a consumer financial prod- 24
uct or service. 25

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(b) REGULATIONS. 1
regulations identifying as unlawful unfair, deceptive, 3
or abusive acts or practices in connection with any 4
transaction with a consumer for a consumer financial 5
product or service or the offering of a consumer finan- 6
cial product or service. 7
(2) INCLUDES PREVENTION MEASURES.Regula- 8
tions prescribed under this section may include re- 9
quirements for the purpose of preventing such acts or 10
practices. 11
(c) UNFAIRNESS. 12
shall have no authority under this section to declare 14
an act or practice in connection with a transaction 15
with a consumer for a consumer financial product or 16
service, or the offering of a consumer financial prod- 17
uct or service, to be unlawful on the grounds that such 18
act or practice is unfair unless the Agency has a rea- 19
sonable basis to conclude that the act or practice 20
causes or is likely to cause substantial injury to con- 21
sumers which is not reasonably avoidable by con- 22
sumers and such substantial injury is not outweighed 23
by countervailing benefits to consumers or to competi- 24
tion. 25

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(2) ESTABLISHED PUBLIC POLICY AS FACTOR. 1
In determining whether an act or practice is unfair, 2
the Agency may consider established public policies as 3
evidence to be considered with all other evidence. 4
(d) CONSULTATION.In prescribing any regulation 5
under this section, the Director shall consult with the Fed- 6
eral banking agencies, State bank supervisors, the Federal 7
Trade Commission, or other Federal agencies, as appro- 8
priate, regarding the consistency of a proposed regulation 9
with prudential, consumer protection, civil rights, market, 10
or systemic objectives administered by such agencies or su- 11
pervisors. 12
SEC. 132. DISCLOSURES. 13
(a) IN GENERAL.The Director may prescribe regula- 14
tions to ensure the timely, appropriate and effective disclo- 15
sure to consumers of the costs, benefits, and risks associated 16
with any consumer financial product or service. 17
(b) COORDINATION WITH OTHER LAWS.In pre- 18
scribing regulations under subsection (a), the Director shall 19
take into account disclosure requirements under other laws 20
in order to enhance consumer compliance and reduce regu- 21
latory burden. 22
(c) COMPLIANCE. 23
(1) MODEL DISCLOSURES.The Agency may 24
provide model disclosures to facilitate compliance 25

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with the requirements of regulations prescribed under 1
this section. 2
(2) PER SE COMPLIANCE.Compliance by a cov- 3
ered person with the model disclosures issued by the 4
Agency under this subsection shall per se constitute 5
compliance with the disclosure requirements of this 6
section. 7
(3) ADDITIONAL GUIDANCE.The Agency may 8
issue exemptions, no action letters, and other guid- 9
ance to promote compliance with disclosures require- 10
ments of regulations prescribed under this section. 11
(d) COMBINED MORTGAGE LOAN DISCLOSURE.With- 12
in 1 year after the designated transfer date, the Director 13
shall propose for public comment regulations and model dis- 14
closures that combine the disclosures required under the 15
Truth in Lending Act and the Real Estate Settlement Pro- 16
cedures Act into a single, integrated disclosure for mortgage 17
loan transactions covered by those laws, unless the Director 18
determines that any proposal issued by the Board of Gov- 19
ernors and the Department of Housing and Urban Develop- 20
ment carries out the same purpose. 21
SEC. 133. SALES PRACTICES. 22
The Director may prescribe regulations and issue or- 23
ders and guidance regarding the manner, settings, and cir- 24
cumstances for the provision of any consumer financial 25

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products or services to ensure that the risks, costs, and bene- 1
fits of the products or services, both initially and over the 2
term of the products or services, are fully and accurately 3
represented to consumers. 4
SEC. 134. PILOT DISCLOSURES. 5
(a) PILOT DISCLOSURES.The Agency shall establish 6
standards and procedures for approval of pilot disclosures 7
to be provided or made available by a covered person to 8
consumers in connection with the provision of a consumer 9
financial product or service, or the offering of a consumer 10
(b) STANDARDS.The procedures shall provide that a 12
pilot disclosure must be limited in time and scope and rea- 13
sonably designed to contribute materially to the under- 14
standing of consumer awareness and understanding of, and 15
responses to, disclosures or communications about the risks, 16
costs, and benefits of consumer financial products or serv- 17
ices. 18
(c) TRANSPARENCY.The procedures shall provide for 19
public disclosure of pilots, but the Agency may limit disclo- 20
sure to the extent necessary to encourage covered persons 21
to conduct effective pilots. 22

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SEC. 135. ADOPTING OPERATIONAL STANDARDS TO DETER 1
UNFAIR, DECEPTIVE, OR ABUSIVE PRACTICES. 2
(a) AUTHORITY TO PRESCRIBE STANDARDS.The 3
States are encouraged to prescribe standards applicable to 4
covered persons who are not insured depository institutions 5
or credit unions, or service providers, to deter and detect 6
unfair, deceptive, abusive, fraudulent, or illegal trans- 7
actions in the provision of consumer financial products or 8
services, including standards for 9
(1) background checks for principals, officers, di- 10
rectors, or key personnel; 11
(2) registration, licensing, or certification; 12
(3) bond or other appropriate financial require- 13
ments to provide reasonable assurance of ability to 14
perform its obligations to consumers; 15
(4) creating and maintaining records of trans- 16
actions or accounts; or 17
(5) procedures and operations relating to the 18
provision of, or maintenance of accounts for, con- 19
sumer financial products or services. 20
(b) AGENCY AUTHORITY TO PRESCRIBE STAND- 21
ARDS. 22
regulations establishing minimum standards under 24
this section for any class of covered persons other than 25
covered persons which are subject to the jurisdiction 26

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of a Federal banking agency or a State bank super- 1
visor , or for any service provider. 2
(2) REGISTRATION AND LICENSING STAND- 3
ARDS.In addition to prescribing standards for the 4
purposes described in subsection (a), the Director may 5
prescribe registration or licensing standards applica- 6
ble to covered persons for the purposes of imposing 7
fees or assessments in accordance with this title. 8
(3) ENFORCEMENT OF STANDARDS. The Direc- 9
tor may enforce under subtitle E compliance with 10
standards adopted by the Director or a State pursu- 11
ant to this section for covered persons or service pro- 12
viders operating in that State. 13
(c) CONSULTATION.In prescribing minimum stand- 14
ards under this section, the Director shall consult with the 15
eral Trade Commission, or other Federal agencies, as ap- 17
propriate, regarding the consistency of a proposed regula- 18
tion with prudential, consumer protection, civil rights, 19
market, or systemic objectives administered by such agencies 20
or supervisors. 21
SEC. 136. DUTIES. 22
(a) IN GENERAL. 23
(1) REGULATIONS ENSURING FAIR DEALING 24
WITH CONSUMERS.The Director shall prescribe reg- 25

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ulations imposing duties on a covered person, or an 1
employee of a covered person, or an agent or inde- 2
pendent contractor for a covered person, who deals or 3
communicates directly with consumers in the provi- 4
sion of a consumer financial product or service, as the 5
Director deems appropriate or necessary to ensure 6
fair dealing with consumers. 7
(2) CONSIDERATIONS FOR DUTIES.In pre- 8
scribing such regulations, the Director shall consider 9
whether 10
(A) the covered person, employee, agent, or 11
independent contractor represents implicitly or 12
explicitly that the person, employee, agent, or 13
contractor is acting in the interest of the con- 14
sumer with respect to any aspect of the trans- 15
action; 16
(B) the covered person, employee, agent, or 17
independent contractor provides the consumer 18
with advice with respect to any aspect of the 19
transaction; 20
(C) the consumers reliance on or use of any 21
advice from the covered person, employee, agent, 22
or independent contractor would be reasonable 23
and justifiable under the circumstances; 24

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(D) the benefits to consumers of imposing a 1
particular duty would outweigh the costs; and 2
(E) any other factors as the Director con- 3
siders appropriate. 4
(3) DUTIES RELATING TO COMPENSATION PRAC- 5
TICES. 6
(A) IN GENERAL.The Director may pre- 7
scribe regulations establishing duties regarding 8
compensation practices applicable to a covered 9
person, employee, agent, or independent con- 10
tractor who deals or communicates directly with 11
a consumer in the provision of a consumer fi- 12
nancial product or service for the purpose of pro- 13
moting fair dealing with consumers. 14
(B) NO COMPENSATION CAPS.The Director 15
may not prescribe a limit on the total dollar 16
amount of compensation paid to any person. 17
(C) DISPARITY TREATMENT PROHIBITED. 18
The Director may not prescribe regulations that 19
directly or indirectly disparately treat, or are 20
interpreted to disparately treat, or disparately 21
impact any entity that employs covered persons. 22
(4) REQUIREMENT TO INCLUDE DISCLAIMER ON 23
PUBLIC STATEMENTS.The Director shall ensure that 24
the Agencys website, and any statement made by the 25

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Director or the Agency to the public, includes a dis- 1
claimer stating that the Agency does not endorse any 2
particular financial product or service and consumers 3
are expected to exercise due diligence in deciding 4
what financial products and services are appropriate 5
for them. 6
(b) ADMINISTRATIVE PROCEEDINGS. 7
(1) IN GENERAL.Any regulation prescribed by 8
the Director under this section shall be enforceable 9
only by the Agency through an adjudication pro- 10
ceeding under subtitle E or by a State regulator 11
through an appropriate administrative proceeding as 12
permitted under State law. 13
(2) EXCLUSIVITY OF REMEDY.No action may 14
be commenced in any court to enforce any require- 15
ment of a regulation prescribed under this section, 16
and no court may exercise supplemental jurisdiction 17
over a claim asserted under a regulation prescribed 18
under this section based on allegations or evidence of 19
conduct that otherwise may be subject to such regula- 20
tion. 21
(3) RULE OF CONSTRUCTION.The Agency, the 22
Attorney General, and any State attorney general or 23
State regulator shall not be precluded from enforcing 24
any other Federal or State law against a person with 25

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respect to conduct that may be subject to a regulation 1
prescribed by the Director under this section. 2
(c) EXCLUSIONS.This section shall not be construed 3
as authorizing the Director to prescribe regulations applica- 4
ble to 5
(1) an attorney licensed to practice law and in 6
compliance with the applicable rules and standards of 7
professional conduct, but only to the extent that the 8
consumer financial product or service provided is 9
within the attorney-client relationship with the con- 10
sumer; or 11
(2) any trustee, custodian, or other person that 12
holds a fiduciary duty in connection with a trust, in- 13
cluding a fiduciary duty to a grantor or beneficiary 14
of a trust, that is subject to and in compliance with 15
the applicable law relating to such trust. 16
SEC. 137. CONSUMER RIGHTS TO ACCESS INFORMATION. 17
(a) IN GENERAL.Subject to regulations prescribed by 18
the Director, a covered person shall make available to a con- 19
sumer, in an electronic form usable by the consumer, infor- 20
mation in the control or possession of the covered person 21
concerning the consumer financial product or service that 22
the consumer obtained from such covered person including 23
information relating to any transaction, series of trans- 24

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actions, or to the account including costs, charges and usage 1
data. 2
(b) EXCEPTIONS.A covered person shall not be re- 3
quired by this section to make available to the consumer 4
(1) any confidential commercial information, in- 5
cluding an algorithm used to derive credit scores or 6
other risk scores or predictors; 7
(2) any information collected by the covered per- 8
son for the purpose of preventing fraud or money 9
laundering, or detecting, or making any report re- 10
garding other unlawful or potentially unlawful con- 11
duct; 12
(3) any information required to be kept con- 13
fidential by any other law (including section 6103 of 14
the Internal Revenue Code of 1986); or 15
(4) any information that the covered person can- 16
not retrieve in the ordinary course of its business with 17
respect to that information. 18
(c) NO DUTY TO MAINTAIN RECORDS.No provision 19
of this section shall be construed as imposing any duty on 20
a covered person to maintain or keep any information 21
about a consumer. 22
(d) STANDARDIZED FORMATS FOR DATA.The Direc- 23
tor, by regulation, shall prescribe standards applicable to 24
covered persons to promote the development and use of 25

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standardized formats for information, including through 1
the use of machine readable files, to be made available to 2
consumers under this section. 3
(e) CONSULTATION.The Director shall, when pre- 4
scribing any regulation under this section, consult with the 5
eral Trade Commission, and the Commissioner of Internal 7
Revenue to ensure that the regulations 8
(1) impose substantively similar requirements on 9
covered persons; 10
(2) take into account conditions under which 11
covered persons do business both in the United States 12
and in other countries; and 13
(3) do not require or promote the use of any par- 14
ticular technology in order to develop systems for 15
compliance. 16
SEC. 138. PROHIBITED ACTS. 17
It shall be unlawful for any person 18
(1) to advertise, market, offer, sell, enforce, or at- 19
tempt to enforce, any term, agreement, change in 20
terms, fee, or charge in connection with a consumer 21
financial product or service that is not in conformity 22
with this title or applicable regulation prescribed or 23
order issued by the Director or to engage in any un- 24
fair, deceptive, or abusive act or practice, except that 25

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no person shall be held to have violated this subsection 1
solely by virtue of providing or selling time or space 2
to a person placing an advertisement; 3
(2) to fail or refuse to pay any fee or assessment 4
imposed by the Agency under this title, to fail or 5
refuse to permit access to or copying of records, to fail 6
or refuse to establish or maintain records, or to fail 7
or refuse to make reports or provide information to 8
the Agency, as required by this title, an enumerated 9
consumer law, or pursuant to the authorities trans- 10
ferred by subtitles F and H, or any regulation pre- 11
scribed or order issued by the Director this title or 12
pursuant to any such authority; or 13
(3) to knowingly or recklessly provide substantial 14
assistance to another person in violation of the provi- 15
sions of section 131, or any regulation prescribed or 16
order issued under such section, and any such person 17
shall be deemed to be in violation of that section to 18
the same extent as the person to whom such assistance 19
is provided. 20
SEC. 139. TREATMENT OF REMITTANCE TRANSFERS. 21
(a) DISCLOSURES REQUIRED FOR REMITTANCE 22
TRANSFERS. 23
(1) IN GENERAL.Each remittance transfer pro- 24
vider shall make disclosures to consumers, as specified 25

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by this section and by regulation prescribed by the 1
Director. 2
(2) SPECIFIC DISCLOSURES.In addition to any 3
other disclosures applicable under this title, a remit- 4
(A) disclose clearly and conspicuously, in 6
writing and in a form that the consumer may 7
keep, to each consumer who requests information 8
regarding the fees or exchange rate for a remit- 9
tance transfer, prior to the consumer making 10
any payment in connection with the transfer 11
(i) the total amount in United States 12
dollars that will be required to be paid by 13
the consumer in connection with the remit- 14
tance transfer; 15
(ii) the amount of currency that the 16
designated recipient of the remittance trans- 17
fer will receive, using the values of the cur- 18
rency into which the funds will be ex- 19
changed; 20
(iii) the fee charged by the remittance 21
transfer provider for the remittance trans- 22
fer; 23
(iv) any exchange rate to be used by 24
the remittance transfer provider for the re- 25

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mittance transfer, unless the exchange rate 1
is not fixed on send; 2
(v) the amount of time for which the 3
information specified in this subparagraph 4
(A) will be in effect; 5
(vi) the expected time interval within 6
made available to the recipient; and 8
(vii) the location where the funds being 9
such locations; 19
(B) at the time at which the consumer 20
makes payment in connection with the remit- 21
tance transfer, a receipt in writing disclosing 22
clearly and conspicuously 23
(i) the information described in sub- 24
paragraph (A); 25

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(ii) the expected time interval within 1
made available to the recipient, which shall 3
be not more than ten days after the date the 4
consumer makes payment in connection 5
with the remittance transfer unless other- 6
wise prohibited by applicable State or Fed- 7
eral law or the law of another country, or 8
as may be specified by the consumer so long 9
as the consumer has the choice to order that 10
the funds be made available to the recipient 11
not more than ten days after the consumer 12
makes payment in connection with the re- 13
(iii) the location where the funds being 15
such locations; 25

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(iv) the name and telephone number or 1
address of the designated recipient, if pro- 2
vided to the remittance transfer provider by 3
the consumer; 4
(v) information about the rights of the 5
consumer under this section to cancel the re- 6
mittance transfer, to resolve errors and to 7
receive refunds; 8
(vi) appropriate contact information 9
for the remittance transfer provider; 10
(vii) a transaction reference number 11
unique to that remittance transfer; and 12
(viii) information as to when the ex- 13
change rate will be calculated (for example, 14
when the funds are received by the recipi- 15
ent), if the customer has been notified that 16
the exchange rate is not fixed on send; 17
(C) at the time at which the consumer initi- 18
ates the remittance transfer, offer to provide in 19
writing, prior to making any payment in con- 20
nection with the transfer, the information listed 21
in subparagraph (A); and 22
(D) in the case of an exchange rate not 23
fixed on send, the remittance provider shall also 24
disclose, at the time at which the consumer initi- 25

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ates the remittance transfer, the range, using the 1
high and low rates, for the prior 30 day period, 2
that the consumer would have received if a rep- 3
resentative amount had been exchanged by the 4
remittance transfer provider, as well as a clear 5
and conspicuous notice that the actual exchange 6
rate may vary. 7
If the actual rate used for the transfer is known to 8
the remittance provider, either because such rate was 9
set by the remittance provider itself or because the re- 10
mittance provider receives confirmation of the actual 11
exchange rate used, the remittance provider shall 12
make available to consumers written or electronic 13
confirmation of the actual exchange rate used and the 14
amount of currency that the recipient or the remit- 15
tance transfer received, using the values of the cur- 16
rency into which the funds were exchanged. The Di- 17
rector shall within 2 years after the date of the enact- 18
ment of the Consumer Financial Protection Agency 19
Act of 2009 prescribe consumer disclosures for trans- 20
fers with rates not fixed on send that are functionally 21
equivalent to those applicable to remittances where 22
the exchange rate is specified by the remittance trans- 23
fer provider at the time the consumer initiates the re- 24
mittance transfer. To the greatest extent possible, the 25

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Director shall ensure that functional equivalence will 1
enable remittance transfer providers to comply with 2
all requirements in this Act and provide consumers 3
with information sufficient to compare services pro- 4
viders, to time their use of the product, to discover er- 5
rors in transmission and to seek remedies. 6
(3) EXEMPTION.Notwithstanding requirements 7
under paragraph (2)(A)(ii), (2)(A)(iv), or (2)(B)(i), 8
no such disclosure is required 9
(A) because of the requirements of another 10
law, including the law of another country; 11
(B) because the transfer is being routed 12
through the Directo a Me xico offered by the Fed- 13
eral reserve banks; or 14
(C) because of any other circumstance 15
deemed permissible by regulation of the Director; 16
If the actual rate used for the transfer is known 17
to the remittance provider, the remittance pro- 18
vider shall make available to consumers written 19
or electronic confirmation of the actual exchange 20
rate used and the amount of currency that the 21
recipient of the remittance transfer received, 22
using the values of the currency into which the 23
funds were exchanged. 24

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(4) PROVISION OF TOLL-FREE NUMBER AND WEB 1
ACCESS. 2
(A) In addition to providing the disclosures 3
required by this section to a consumer at a re- 4
mittance transfer provider location, a remittance 5
transfer provider shall provide a toll-free tele- 6
phone number or local number, and an Internet 7
website that a consumer can access for which ac- 8
cess no remittance transfer provider may assess 9
a charge, to obtain the information required by 10
paragraph (2)(A) for remittance transfers offered 11
by that remittance transfer provider or informa- 12
tion about the status of a remittance transfer for 13
which a consumer has made payment. 14
(B) A remittance transfer provider that on 15
an aggregate basis originates 30,000 or fewer 16
transfers on a calendar year basis (or such other 17
amount as may be prescribed by the Director) is 18
not required to offer the web access prescribed in 19
subparagraph (A), but is required to provide a 20
toll-free telephone number or local number as 21
prescribed in subparagraph (A). 22
(5) ALTERNATIVE METHODS OF DISCLOSURE. 23
Subject to subsection (e)(2), a remittance transfer pro- 24
vider may 25

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(A) if the transaction is conducted entirely 1
by telephone (which shall include, but not be lim- 2
ited to, a mobile telephone) satisfy the require- 3
ments of paragraph (2)(A) orally or, at the op- 4
tion of the consumer, electronically through a 5
message sent to the consumer through any elec- 6
tronic means (including, but not limited to, an 7
electronic mail address or a mobile telephone) as 8
designated by the consumer; 9
(B) satisfy the requirements of paragraph 10
(2)(A) electronically if the transfer is initiated 11
by the consumer electronically through the remit- 12
tance transfer providers website or through any 13
other electronic means; and 14
(C) satisfy the requirements of paragraph 15
(2)(B) by mailing (or transmitting electronically 16
if the transfer is initiated electronically by the 17
consumer through the remittance transfer pro- 18
viders website or the consumer otherwise con- 19
sents in accordance with the provisions of section 20
101 of the Electronic Signatures in Global and 21
National Commerce Act) the information re- 22
quired under such paragraph to the consumer 23
not later than one business day after the date on 24
which the transaction is conducted, if the trans- 25

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action is conducted entirely by telephone (or elec- 1
tronically) and the consumer requests a written 2
receipt. 3
(b) WRITTEN FOREIGN LANGUAGE DISCLOSURES. 4
(1) IN GENERAL.The disclosures required 5
under subsections (a)(2)(A) and (a)(2)(B)(i) shall be 6
made in English and 7
(A) at each remittance transfer provider lo- 8
cation, shall be made in the same languages 9
principally used by the remittance transfer pro- 10
vider, or any of its agents, to advertise, solicit, 11
or market its remittance transfers business, ei- 12
ther orally or in writing, at that location, if 13
other than English, provided that such languages 14
are those for which the Director has issued model 15
disclosures as provided in subsection (g); or 16
(B) on a remittance transfer providers 17
website, shall at a minimum be made in any 18
other language for which the Director has issued 19
model disclosures as provided in subsection (g) if 20
the remittance transfer provider, or any of its 21
agents, advertises, solicits, or markets its remit- 22
tance transfers business in such language. 23
(2) DISPUTES CONCERNING TERMS.If a disclo- 24
sure is required by this section to be in English and 25

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another language, the English version of the disclosure 1
shall govern any dispute concerning the terms of the 2
receipt. However, any discrepancies between the 3
English version and any other version due to the 4
translation of the receipt from English to another lan- 5
guage including errors or ambiguities shall be con- 6
strued against the remittance transfer provider or its 7
agent and the remittance transfer provider or its 8
agent shall be liable for any damages caused by these 9
discrepancies. 10
(c) REMITTANCE TRANSFER CANCELLATIONS, RE- 11
FUNDS, AND ERRORS. 12
(1) CANCELLATIONS. 13
(A) After receiving the receipt required 14
under subsection (a)(2)(B), a consumer may 15
cancel the currency transaction 16
(i) before leaving the premises of the 17
remittance transfer provider where the con- 18
sumer received the receipt, and 19
(ii) not later than 30 minutes after the 20
time the consumer initiated the remittance 21
transfer with the remittance transfer pro- 22
vider. 23
(B) If a consumer cancels the transaction, 24
the remittance transfer provider shall imme- 25

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diately refund to the consumer the fees paid and 1
the currency to be transferred, and issue a re- 2
ceipt indicating that the transaction has been 3
cancelled. 4
(C) A consumer may not cancel a remit- 5
tance transfer after the remittance transfer pro- 6
vider has sent the funds to the recipient. 7
(D) A remittance transfer provider shall not 8
(2) REFUNDS. 11
(A) If a remittance transfer provider re- 12
ceives written notice from the consumer within 13
ten days of the promised date of delivery of a re- 14
mittance transfer that no amount of the funds to 15
be remitted was made available to the designated 16
recipient in the foreign country, the remittance 17
transfer provider shall 18
(i) refund to the consumer the total 19
amount in U.S. dollars that was paid by 20
the consumer in connection with such re- 21
(ii) promptly transmit the remittance 23
transfer in accordance with the terms in the 24

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written receipt provided to the consumer 1
pursuant to subsection (a)(2)(B); 2
(iii) provide such other remedy, as de- 3
termined appropriate by rule of the Direc- 4
tor for the protection of consumers; or 5
(iv) demonstrate to the consumer that 6
the proceeds of the remittance transfer were 7
made available to the recipient of the remit- 8
tance provider. 9
(B) A remittance transfer provider shall not 10
(3) ERROR RESOLUTION. 13
(A) IN GENERAL.If a remittance transfer 14
provider receives written notice from the con- 15
sumer within 60 days of the promised date of de- 16
livery that an error occurred with respect to a 17
remittance transfer, including that the full 18
amount of the funds to be remitted was not made 19
available to the designated recipient in the for- 20
eign country, the remittance transfer provider 21
shall resolve the error pursuant to this para- 22
graph. 23
(B) REMEDIES.Not later than 120 days 24
after the date of receipt of a notice from the con- 25

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sumer pursuant to subparagraph (A), the remit- 1
(i) as applicable to the error and as 3
designated by the consumer 4
(I) refund to the consumer the 5
total amount in U.S. dollars that was 6
paid by the consumer in connection 7
with the remittance transfer that was 8
not properly transmitted; 9
(II) make available to the des- 10
ignated recipient, without additional 11
cost to the designated recipient or to 12
the consumer, the amount appropriate 13
to resolve the error; 14
(III) provide such other remedy, 15
as determined appropriate by regula- 16
tion of the Director for the protection 17
of consumers; or 18
(ii) demonstrate to the consumer that 19
there was no error. 20
(4) REGULATIONS.The Director, in order to 21
protect consumers, shall establish, by regulation, clear 22
and appropriate standards for remittance transfer 23
providers with respect to error resolution, cancellation 24
and refunds. 25

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(d) ENFORCEMENT AUTHORITY.The Director shall 1
have the sole authority to enforce the provisions of this sec- 2
tion, and any regulations established pursuant to this sec- 3
tion. 4
(e) APPLICABILITY OF OTHER PROVISIONS OF LAW. 5
(1) APPLICABILITY OF TITLE 18 AND TITLE 31 6
PROVISIONS.A remittance transfer provider that is 7
a money transmitting business as defined in section 8
5330 of title 31, United States Code, may provide re- 9
mittance transfers only if such provider is in compli- 10
ance with the requirements of section 5330 of title 31, 11
United States Code, and section 1960 of title 18, 12
United States Code, as applicable. 13
(2) RULE OF CONSTRUCTION.Nothing in this 14
section shall be construed 15
(A) to affect the application to any trans- 16
action, to any remittance provider, or to any 17
other person of any of the provisions of sub- 18
chapter II of chapter 53 of title 31, United 19
States Code, section 21 of the Federal Deposit 20
Insurance Act, or chapter 2 of title I of Public 21
Law 91508, or any regulations promulgated 22
thereunder; or 23
(B) to cause any fund transfer that would 24
not otherwise be treated as such under para- 25

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graph (2) to be treated as an electronic fund 1
transfer, or as otherwise subject to this title, for 2
the purposes of any of the provisions referred to 3
in subparagraph (A) or any regulation pre- 4
scribed under such subparagraph. 5
(1) DEPOSITORY INSTITUTION.the term depos- 8
itory institution has the same meaning as in section 9
3 of the Federal Deposit Insurance Act and includes 10
a credit union. 11
(2) NOT FIXED ON SEND.The term not fixed 12
on send when referring to an exchange rate used in 13
a remittance transfer means an exchange rate that is 14
not set by the remittance transfer provider at the time 15
the consumer initiates the remittance transfer. 16
(3) REMITTANCE TRANSFER.The term remit- 17
tance transfer means the electronic (as defined in 18
section 106(2) of the Electronic Signatures in Global 19
and National Commerce Act) transfer of funds at the 20
request of a consumer located in any State to a per- 21
son in another country that is initiated by a remit- 22
tance transfer provider, whether or not the consumer 23
is an account holder of the remittance transfer pro- 24
vider or whether or not the remittance transfer is also 25

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an electronic fund transfer, as defined in section 903 1
of the Electronic Fund Transfer Act. 2
(4) REMITTANCE TRANSFER PROVIDER.The 3
term remittance transfer provider means any per- 4
son or depository institution, or agent thereof, that 5
originates remittance transfers on behalf of consumers 6
in the normal course of its business, whether or not 7
the consumer is an account holder of that person or 8
depository institution. 9
(g) MODEL DISCLOSURES. 10
(1) PUBLICATION.Notwithstanding any provi- 11
sions of this title, the Director shall establish and 12
publish model disclosure forms to facilitate compli- 13
ance with the disclosure requirements of this section 14
and to aid the consumer in understanding the trans- 15
action to which the subject disclosure form relates. 16
(2) LANGUAGES TO BE USED IN MODEL DISCLO- 17
SURES.The Director shall make these disclosures 18
available within one year of the effective date of this 19
Act 20
(A) in English, and 21
(B) the ten most frequently spoken lan- 22
guages in the United States, other than English, 23
used by consumers initiating remittance trans- 24
fers, as may be determined by the Director. 25

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(3) USE OF AUTOMATED EQUIPMENT.In estab- 1
lishing model forms under this subsection, the Direc- 2
tor shall consider the use by lessors of data processing 3
or similar automated equipment. 4
(4) USE OPTIONAL.A remittance transfer pro- 5
vider may utilize a model disclosure form established 6
by the Director under this subsection for purposes of 7
compliance with this section, at the discretion of the 8
remittance transfer provider. 9
(5) EFFECT OF USE.Any remittance transfer 10
provider that properly uses the material aspects of 11
any model disclosure form established by the Director 12
under this subsection shall be deemed to be in compli- 13
ance with the disclosure requirements to which the 14
form relates. 15
(h) REGULATION AND EXEMPTION AUTHORITY.Not- 16
withstanding any other provisions of this title, the Director, 17
in the sole discretion of the Director, in consultation with 18
relevant Federal and State government agencies may by 19
regulation exempt from one or more requirements of this 20
section, any category of remittance transfer provider if the 21
Director determines that under applicable Federal or State 22
law that such category of remittance transfer provider is 23
subject to requirements substantially similar to those im- 24
posed under this section or that such law gives greater pro- 25

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tection and benefit to the consumer, and that there is ade- 1
quate provision for enforcement. 2
(i) APPLICABILITY OF STATE LAW. 3
(1) This section does not annul, alter, affect, or 4
exempt any person subject to the provisions of this 5
section from complying with other applicable Federal 6
law and the laws of any State relating to remittance 7
transfers and remittance transfer providers, except to 8
the extent that those laws are inconsistent with the 9
provisions of this section, and then only to the extent 10
of the inconsistency. 11
(2) Notwithstanding any other provisions of this 12
title, the Director may determine whether such incon- 13
sistencies exist. A State law is not inconsistent with 14
this section if the protection such law affords any con- 15
sumer is greater than the protection afforded by this 16
section. If the Director determines that a State re- 17
quirement is inconsistent, remittance transfer pro- 18
viders shall incur no liability under the law of that 19
State for a good faith failure to comply with that law, 20
notwithstanding that such determination is subse- 21
quently amended, rescinded, or determined by judicial 22
or other authority to be invalid for any reason. This 23
section does not extend the applicability of any such 24

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law to any class of persons or transactions to which 1
it would not otherwise apply. 2
(3) This section does not annul, alter, or affect 3
the laws of any State relating to the licensing or reg- 4
istration, supervision or examination of remittance 5
transfer providers. 6
(4) Nothing in this section shall be construed as 7
limiting the authority of a State attorney general or 8
State regulator to bring an action or other regulatory 9
proceeding arising solely under the law of that State. 10
(j) FEDERAL CREDIT UNION ACT AMENDMENT. 11
Paragraph (12)(A) of section 107 of the Federal Credit 12
Union Act (12 U.S.C. 1757(12)(A)) is amended by insert- 13
ing and remittance transfers, as defined in section 139 of 14
the Consumer Financial Protection Agency Act of 2009 15
after and domestic electronic fund transfers. 16
(k) AUTOMATED CLEARINGHOUSE SYSTEM. 17
(1) EXPANSION OF SYSTEM.The Board of Gov- 18
ernors of the Federal Reserve System shall work with 19
the Federal reserve banks to expand the use of the 20
automated clearinghouse system for remittance trans- 21
fers to foreign countries, with a focus on countries 22
that receive significant remittance transfers from the 23
United States, based on 24

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(A) the volume and dollar amount of remit- 1
tance transfers to those countries; 2
(B) the significance of the volume of such 3
transfers, relative to the external financial flows 4
of the receiving country; and 5
(C) the feasibility of such an expansion. 6
(2) REPORT TO THE CONGRESS.Before the end 7
of the 180-day period beginning on the date of the en- 8
actment of this Act, and on April 30 biennially there- 9
after, the Board of Governors of the Federal Reserve 10
System shall submit a report to the Director, the 11
Committee on Banking, Housing, and Urban Affairs 12
of the Senate, and the Committee on Financial Serv- 13
ices of the House of Representatives on the status of 14
the automated clearinghouse system and its progress 15
in complying with the requirements of this section. 16
(l) REGULATORY GUIDANCE ON REMITTANCE TRANS- 17
FERS. 18
(1) PROVISION OF GUIDELINES TO INSTITU- 19
TIONS.The Director shall provide guidelines to all 20
remittance transfer providers regarding 21
(A) the offering of low-cost remittance 22
transfers; 23
(B) the availability of agency services to re- 24
mittance transfer providers; 25

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(C) compliance with the provisions of this 1
Act; and 2
(D) specific options that allow remittance 3
transfer providers to take advantage of auto- 4
mated clearing systems, including the FedACH 5
International Services offered by the Board of 6
Governors of the Federal Reserve System and the 7
Federal reserve banks, to transmit remittances at 8
low cost. 9
(2) CONTENT OF GUIDELINES.Guidelines pro- 10
vided to remittance transfer providers under this sec- 11
tion shall include 12
(A) information as to the methods of pro- 13
viding remittance transfer services; 14
(B) the potential economic opportunities in 15
providing low-cost remittance transfers; and 16
(C) the potential value to depository insti- 17
tutions of broadening their financial bases to in- 18
clude persons that use remittance transfers. 19
(3) ASSISTANCE TO FINANCIAL LITERACY COM- 20
MISSION.The Secretary of the Treasury and each 21
agency referred to in subsection (a) shall, as part of 22
their duties as members of the Financial Literacy and 23
Education Commission, assist that Commission in 24

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improving the financial literacy and education of 1
consumers who send remittances. 2
(m) REPORT ON FEASIBILITY OF AND IMPEDIMENTS 3
TO USE OF REMITTANCE HISTORY IN CALCULATION OF 4
CREDIT SCORE.Before the end of the 365-day period be- 5
ginning on the date of the enactment of this Act, the Direc- 6
tor shall submit a report to the President, the Committee 7
on Banking, Housing, and Urban Affairs of the Senate, and 8
the Committee on Financial Services of the House of Rep- 9
resentatives regarding 10
(1) the manner in which a consumers remit- 11
tance history could be used to enhance a consumers 12
credit score; 13
(2) the current legal and business model barriers 14
and impediments that impede the use of a consumers 15
remittance history to enhance the consumers credit 16
score; and 17
(3) recommendations on the manner in which 18
maximum transparency and disclosure to consumers 19
of exchange rates for remittance transfers subject to 20
this Act may be accomplished, whether or not such ex- 21
change rates are known at the time of origination or 22
payment by the consumer for the remittance transfer, 23
including disclosure to the sender of the actual ex- 24
change rate used and the amount of currency that the 25

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recipient of the remittance transfer received, using the 1
values of the currency into which the funds were ex- 2
changed, as contained in section s 919(a)(2)(D) and 3
919(a)(3) of the Electronic Fund Transfer Act (as 4
amended by subsection (a)). 5
(n) EFFECTIVE DATE.This section shall apply with 6
respect to remittance transfers made after the end of the 7
180-day period beginning on the date of the enactment of 8
this Act. 9
date. 12
SEC. 140A. NO AUTHORITY TO REQUIRE THE OFFERING OF 13
FINANCIAL PRODUCTS OR SERVICES. 14
The Director may not prescribe any regulation, issue 15
any order or guidance, or take any other action, including 16
any enforcement action, the effect of which would be to re- 17
quire a covered person to offer to any consumer a specific 18
SEC. 140B. APPRAISAL INDEPENDENCE REQUIREMENTS. 20
(a) PROMULGATION OF NEW REQUIREMENTS.The 21
Director shall lead a Negotiated Rulemaking Committee 22
under the Federal Advisory Committee Act and the Nego- 23
tiated Rulemaking Act to promulgate appraisal independ- 24
ence requirements for residential loan purposes, and such 25

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Committee shall promulgate such requirements not later 1
than the end of the 60-day period beginning on the date 2
of the enactment of this Act. 3
(b) CERTAIN REGULATION REQUIREMENTS.Regula- 4
tions promulgated by the Negotiated Rulemaking Com- 5
mittee under this section 6
(1) shall not prohibit lenders, the Federal Na- 7
tional Mortgage Association, or the Federal Home 8
Loan Mortgage Corporation from accepting any ap- 9
praisal report completed by an appraiser selected, re- 10
tained, or compensated in any manner by a mortgage 11
loan originator 12
(A) licensed or registered in accordance 13
with section 1501 et seq. of the SAFE Mortgage 14
Licensing Act of 2008; and 15
(B) subject to State or Federal laws that 16
make it unlawful for a mortgage loan originator 17
to make any payment, threat, or promise, di- 18
rectly or indirectly, to any appraiser of a prop- 19
erty, for the purposes of influencing the inde- 20
pendent judgment of the appraiser with respect 21
to the value of the property, except that nothing 22
in this section shall prohibit a person with an 23
interest in a real estate transaction from asking 24
an appraiser to 25

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(i) consider additional, appropriate 1
property information; 2
(ii) provide further detail, substan- 3
tiation, or explanation for the appraisers 4
value conclusion; or 5
(iii) correct errors in the appraisal re- 6
port; and 7
(2) shall include a requirement that lenders and 8
their agents compensate appraisers at a rate that is 9
customary and reasonable for appraisal services per- 10
formed in the market area of the property being ap- 11
praised. 12
(c) SUNSET.Effective on the date the appraisal inde- 13
pendence requirements are promulgated pursuant to sub- 14
section (a), the Home Valuation Code of Conduct an- 15
nounced by the Federal Housing Finance Agency on Decem- 16
ber 23, 2008, shall have no force or effect. 17
Subtitle DPreservation of State 18
Law 19
SEC. 141. RELATION TO STATE LAW. 20
(a) IN GENERAL. 21
(1) RULE OF CONSTRUCTION.This title shall 22
not be construed as annulling, altering, or affecting, 23
or exempting any person subject to the provisions of 24
this title from complying with, the laws, regulations, 25

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orders, or interpretations, in effect in any State, ex- 1
cept to the extent that such statute, regulation, order, 2
or interpretation is inconsistent with the provisions of 3
this title and then only to the extent of the inconsist- 4
ency. 5
(2) GREATER PROTECTION UNDER STATE LAW. 6
For the purposes of this subsection, a statute, regula- 7
tion, order, or interpretation in effect in any State is 8
not inconsistent with the provisions of this title if the 9
protection such statute, regulation, order, or interpre- 10
tation affords consumers is greater than the protec- 11
tion provided under this title. A determination re- 12
garding whether a statute, regulation, order, or inter- 13
pretation in effect in any State is inconsistent with 14
the provisions of this title may be made by the Agency 15
on its own motion or in response to a nonfrivolous 16
petition initiated by any interested person. 17
(b) RELATION TO OTHER PROVISIONS OF ENUMER- 18
ATED CONSUMER LAWS THAT RELATE TO STATE LAW. 19
No provision of this title, except as provided in section 183, 20
shall be construed as modifying, limiting, or superseding 21
the operation of any provision of an enumerated consumer 22
law that relates to the application of a law in effect in any 23
State with respect to such Federal law. 24

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SEC. 142. PRESERVATION OF ENFORCEMENT POWERS OF 1
STATES. 2
(a) IN GENERAL. 3
(1) ACTION BY STATE.Any State attorney gen- 4
eral may bring a civil action in the name of such 5
State, as parens patriae on behalf of natural persons 6
residing in such State, in any district court of the 7
United States or State court having jurisdiction of 8
the defendant, to secure monetary or equitable relief 9
for violation of any provisions of this title or regula- 10
tions issued thereunder. 11
superseding the operation of any provision of an enu- 14
merated consumer law that relates to the authority of 15
a State attorney general or State regulator to enforce 16
such Federal law. 17
(b) CONSULTATION REQUIRED. 18
(1) NOTICE. 19
(A) IN GENERAL.Before initiating any 20
action in a court or other administrative or reg- 21
ulatory proceeding against any covered person to 22
enforce any provision of this title, including any 23
regulation prescribed by the Director under this 24
title, a State attorney general or State regulator 25
shall timely provide a copy of the complete com- 26

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plaint to be filed and written notice describing 1
such action or proceeding to the Agency, or the 2
Agencys designee. 3
(B) EMERGENCY ACTION.If prior notice is 4
not practicable, the State attorney general or 5
State regulator shall provide a copy of the com- 6
plete complaint and the notice to the Agency im- 7
mediately upon instituting the action or pro- 8
ceeding. 9
(C) CONTENTS OF NOTICE.The notifica- 10
tion required under this section shall, at a min- 11
imum, describe 12
(i) the identity of the parties; 13
(ii) the alleged facts underlying the 14
proceeding; and 15
(iii) whether there may be a need to 16
coordinate the prosecution of the proceeding 17
so as not to interfere with any action, in- 18
cluding any rulemaking, undertaken by the 19
Director or Agency or another Federal agen- 20
cy. 21
(2) AGENCY RESPONSE.In any action described 22
in paragraph (1), the Agency may 23
(A) intervene in the action as a party; 24
(B) upon intervening 25

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(i) remove the action to the appro- 1
priate United States district court, if the 2
action was not originally brought there; and 3
(ii) be heard on all matters arising in 4
the action; and 5
(C) appeal any order or judgment to the 6
same extent as any other party in the proceeding 7
may. 8
(c) REGULATIONS.The Director shall prescribe regu- 9
lations to implement the requirements of this section and, 10
from time to time, provide guidance in order to further co- 11
ordinate actions with the State attorneys general and other 12
regulators. 13
(d) PRESERVATION OF STATE AUTHORITY. 14
(1) STATE CLAIMS.No provision of this section 15
shall be construed as limiting the authority of a State 16
attorney general or State regulator to bring an action 17
or other regulatory proceeding arising solely under 18
the law of that State. 19
(2) STATE SECURITIES REGULATORS.No provi- 20
iting, or affecting the authority of a State securities 22
functions) under State law to adopt rules, initiate en- 24
forcement proceedings, or take any other action with 25

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respect to a person regulated by such commission or 1
authority. 2
(3) STATE INSURANCE REGULATORS.No provi- 3
iting, or affecting the authority of a State insurance 5
commission or State insurance regulator under State 6
law to adopt rules, initiate enforcement proceedings, 7
or take any other action with respect to a person reg- 8
ulated by such commission or regulator. 9
SEC. 143. PRESERVATION OF EXISTING CONTRACTS. 10
This title, and regulations, orders, guidance, and in- 11
terpretations prescribed, issued, and established by the 12
Agency, shall not be construed to alter or affect the applica- 13
bility of any regulation, order, guidance, or interpretation 14
prescribed, issued, and established by the Comptroller of the 15
Currency or the Director of the Office of Thrift Supervision 16
regarding the applicability of State law under Federal 17
banking law to any contract entered into on or before the 18
date of the enactment of this Act, by national banks, Federal 19
savings associations, or subsidiaries thereof that are regu- 20
lated and supervised by the Comptroller of the Currency 21
or the Director of the Office of Thrift Supervision, respec- 22
tively. 23

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SEC. 144. STATE LAW PREEMPTION STANDARDS FOR NA- 1
FIED. 3
(a) IN GENERAL.Chapter one of title LXII of the Re- 4
vised Statutes of the United States (12 U.S.C. 21 et 1 seq.) 5
is amended by inserting after section 5136B the following 6
new section: 7
SEC. 5136C. STATE LAW PREEMPTION STANDARDS FOR NA- 8
FIED. 10
(a) DEFINITIONS.For purposes of this section, the 11
(1) NATIONAL BANK.The term national bank 13
includes 14
(A) any bank organized under the laws of 15
the United States; and 16
(B) any Federal branch established in ac- 17
cordance with the International Banking Act of 18
1978. 19
(2) STATE CONSUMER FINANCIAL LAWS.The 20
term State consumer financial law means a State 21
law that does not directly or indirectly discriminate 22
against national banks and that regulates the man- 23
ner, content, or terms and conditions of any financial 24
transaction (as may be authorized for national banks 25

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to engage in), or any account related thereto, with re- 1
spect to a consumer. 2
(3) OTHER DEFINITIONS.The terms affiliate, 3
subsidiary, includes, and including have the same 4
ance Act. 6
(1) IN GENERAL.National banks shall gen- 8
erally comply with State laws. State laws are pre- 9
empted only if 10
a discriminatory effect on national banks in 12
comparison with the effect of the law on a bank 13
chartered by that State; 14
(B) the Comptroller of the Currency deter- 15
mines by regulation or order on a case-by-case 16
basis that a State law prevents or significantly 17
interferes with the ability of an insured deposi- 18
tory institution chartered as national bank to 19
engage in the business of banking; or 20
any national bank subsidiary, affiliate, or other enti- 25

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ty that is not an insured depository institution char- 1
tered as a national bank. 2
Comptroller of the Currency regarding the meaning 15
or interpretation of the National Bank Act or other 16
Federal laws. 17
(c) SUBSTANTIAL EVIDENCE.No regulation of the 18
Comptroller of the Currency prescribed under subsection 19
(b)(1)(B), shall be interpreted or applied so as to invalidate, 20
or otherwise declare inapplicable to a national bank, the 21
provision of the State consumer financial law unless sub- 22
stantial evidence, made on the record of the proceeding, sup- 23
ports the specific finding that the provision prevents or sig- 24

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nificantly interferes with the national banks exercise of a 1
power explicitly granted by the Congress. 2
(d) OTHER FEDERAL LAWS.Notwithstanding any 3
other provision of law, the Comptroller of the Currency may 4
not prescribe regulation pursuant to subsection (b)(1)(B) 5
until the Comptroller of the Currency, after consultation 6
stantive standard, applicable to a national bank, which reg- 9
ulates the particular conduct, activity, or authority that is 10
subject to such provision of the State consumer financial 11
law. 12
TIONS.The Comptroller of the Currency shall periodically 14
conduct a review, through notice and public comment, of 15
each determination that a provision of Federal law pre- 16
empts a State consumer financial law. The agency shall 17
conduct such review within the 5-year period after pre- 18
scribing or otherwise issuing such determination, and at 19
least once during each 5-year period thereafter. After con- 20
ducting the review of, and inspecting the comments made 21
on, the determination, the agency shall timely propose to 22
continue, amend or rescind it, as may be appropriate, in 23
accordance with the procedures set forth in subsections (a) 24
and (b) of section 5244 (12 U.S.C. 43(a)(b)). 25

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any provision of this title, a State consumer financial law 3
shall apply to a subsidiary or affiliate of a national bank 4
to the same extent that the State consumer financial law 5
applies to any person, corporation, or other entity subject 6
to such State law.. 7
chapter one of title LXII of the Revised Statutes of the 9
United States is amended by inserting after the item relat- 10
ing to section 5136B the following new item: 11
5136C. State law preemption standards for national banks and subsidiaries
clarified..
States (as added by section 144) is amended by adding at 14
the end the following new subsections: 15
this title which relates to visitorial powers or other- 18
wise limits or restricts the supervisory, examination, 19
or regulatory authority to which any national bank 20
is subject shall be construed as limiting or restricting 21
the authority of any attorney general (or other chief 22
law enforcement officer) of any State to bring any ac- 23
tion in any court of appropriate jurisdiction 24

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(A) to require a national bank to produce 1
records relative to the investigation of violations 2
of State consumer law, or Federal consumer 3
laws; 4
or State law against a national bank, as author- 9
ized by such law, or to seek relief and recover 10
damages for such residents from any violation of 11
any such law by any national bank. 12
consult with the head of the agency responsible for 15
chartering and regulating national banks before act- 16
ing under paragraph (1). 17
(h) ENFORCEMENT ACTIONS.The ability of the head 18
of the agency responsible for chartering and regulating na- 19
tional banks to bring an enforcement action under this title 20
or section 5 of the Federal Trade Commission Act shall not 21
be construed as precluding private parties from enforcing 22
rights granted under Federal or State law in the courts.. 23

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States is amended by inserting after subsection (h) (as 4
added by section 145) the following new subsection: 5
OF NATIONAL BANKS. 8
shall be construed as annulling, altering, or affecting 20
the applicability of State law to any nondepository 21
institution, subsidiary, other affiliate, or agent of a 22
national bank.. 23

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ERAL SAVINGS ASSOCIATIONS AND SUBSIDI- 2
ARIES CLARIFIED. 3
(a) IN GENERAL.The Home Owners Loan Act (12 4
U.S.C. 1461 et seq.) is amended by inserting after section 5
5 the following new section: 6
ERAL SAVINGS ASSOCIATIONS CLARIFIED. 8
(a) STATE CONSUMER FINANCIAL LAW DEFINED. 9
For purposes of this section, the term State consumer fi- 10
nancial law means a State law that does not directly or 11
indirectly discriminate against Federal savings associa- 12
tions and that regulates the manner, content, or terms and 13
conditions of any financial transaction (as may be author- 14
ized for Federal savings associations to engage in), or any 15
account related thereto, with respect to a consumer. 16
(1) IN GENERAL.Federal savings associations 18
shall generally comply with State laws. State laws 19
are preempted only if 20
a discriminatory effect on Federal savings asso- 22
ciations in comparison with the effect of the law 23
on a bank chartered by that State; 24
(B) the Director of the Office of Thrift Su- 25
pervision determines by regulation or order on a 26

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case-by-case basis that a State law prevents or 1
significantly interferes with the ability of an in- 2
sured depository institution chartered as a Fed- 3
eral savings associations to engage in the busi- 4
ness of banking; or 5
any Federal savings associations subsidiary, affiliate, 10
or other entity that is not an insured depository in- 11
stitution chartered as a national bank. 12
Director of the Office of Thrift Supervision regarding 25

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the meaning or interpretation of the National Bank 1
Act or other Federal laws. 2
(c) OTHER FEDERAL LAW.Notwithstanding any 3
other provision of law, the Director of the Office of Thrift 4
Supervision may not prescribe any regulation pursuant to 5
subsection (b)(1)(B) until such Director, after consultation 6
stantive standard, applicable to a Federal savings associa- 9
tion, which regulates the particular conduct, activity, or 10
authority that is subject to such provision of the State con- 11
sumer financial law. 12
(d) SUBSTANTIAL EVIDENCE.No regulation pre- 13
scribed by the Director of the Office of Thrift Supervision 14
issued under subsection (b)(1)(B) shall be interpreted or ap- 15
plied so as to invalidate, or otherwise declare inapplicable 16
to a Federal savings association, the provision of the State 17
consumer financial law unless substantial evidence, made 18
on the record of the proceeding, supports the specific finding 19
that the provision prevents or significantly interferes with 20
the Federal savings associations exercise of a power explic- 21
itly granted by the Congress. 22
TIONS.The Director of the Office of Thrift Supervision 24
shall periodically conduct a review, through notice and pub- 25

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lic comment, of each determination that a provision of Fed- 1
eral law preempts a State consumer financial law. The 2
agency shall conduct such review within the 5-year period 3
after prescribing or otherwise issuing such determination, 4
and at least once during each 5-year period thereafter. After 5
conducting the review of, and inspecting the comments 6
made on, the determination, the agency shall timely propose 7
to continue, amend or rescind it, as may be appropriate, 8
in accordance with the procedures set forth in subsections 9
(a) and (b) of section 5244 of the Revised Statutes of the 10
United States (12 U.S.C. 43(a)-(b)). 11
any provision of this Act, a State consumer financial law 14
shall apply to a subsidiary or affiliate of a Federal savings 15
association to the same extent that the State consumer fi- 16
nancial law applies to any person, corporation, or other 17
entity subject to such State law and consistent with Federal 18
law.. 19
the Home Owners Loan Act (12 U.S.C. 1461 et seq.) is 21
amended by striking the item relating to section 6 and in- 22
serting the following new item: 23
Sec. 6. State law preemption standards for Federal savings associations clari-
fied..

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Section 6 of the Home Owners Loan Act (as added 2
by section 147 of this title) is amended by adding at the 3
end the following new subsections: 4
(1) IN GENERAL.No provision of this Act 6
shall be construed as limiting or restricting the au- 7
thority of any attorney general (or other chief law en- 8
forcement officer) of any State to bring any action in 9
any court of appropriate jurisdiction 10
(A) to require a Federal savings associa- 11
tion to produce records relative to the investiga- 12
tion of violations of State consumer law, or Fed- 13
eral consumer laws; 14
or State law against a Federal savings associa- 19
tion, as authorized by such law, or to seek relief 20
and recover damages for such residents from any 21
violation of any such law by any Federal sav- 22
ings association. 23

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consult with the Director or any successor agency be- 1
fore acting under paragraph (1). 2
(h) ENFORCEMENT ACTIONS.The ability of the Di- 3
rector or any successor officer or agency to bring an enforce- 4
ment action under this Act or section 5 of the Federal Trade 5
Commission Act shall not be construed as precluding pri- 6
vate parties from enforcing rights granted under Federal 7
or State law in the courts.. 8
Section 6 of the Home Owners Loan Act is amended 11
by adding after subsection (h) (as added by section 148) 12
OF FEDERAL SAVINGS ASSOCIATIONS. 16

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shall be construed as preempting the applicability of 5
State law to any nondepository institution, sub- 6
sidiary, other affiliate, or agent of a Federal savings 7
association.. 8
date. 11
Subtitle EEnforcement Powers 12
For purposes of this subtitle, the following definitions 14
shall apply: 15
(1) CIVIL INVESTIGATIVE DEMAND AND DE- 16
MAND.The terms civil investigative demand and 17
demand mean any demand issued by the Agency. 18
(2) AGENCY INVESTIGATION.The term Agency 19
investigation means any inquiry conducted by an 20
Agency investigator for the purpose of ascertaining 21
whether any person is or has been engaged in any 22
conduct that violates this title, any enumerated con- 23
sumer law, or any regulation prescribed or order 24

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issued by the Director under this title or under the 1
(3) AGENCY INVESTIGATOR.The term Agency 3
investigator means any attorney or investigator em- 4
ployed by the Agency who is charged with the duty 5
of enforcing or carrying into effect any provisions of 6
this title, any enumerated consumer law, the authori- 7
ties transferred under subtitles F and H, or any regu- 8
lation prescribed or order issued under this title or 9
pursuant to any such authority by the Director. 10
(4) CUSTODIAN.The term custodian means 11
the custodian or any deputy custodian designated by 12
the Agency. 13
(5) DOCUMENTARY MATERIAL.The term docu- 14
mentary material includes the original or any copy 15
of any book, document, record, report, memorandum, 16
paper, communication, tabulation, chart, log, elec- 17
tronic file, or other data or data compilations stored 18
in any medium. 19
(6) VIOLATION.The term violation means 20
any act or omission that, if proved, would constitute 21
a violation of any provision of this title, any enumer- 22
ated consumer law, any law for which authorities 23
were transferred under subtitles F and H, or of any 24

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regulation prescribed or order issued by the Director 1
under this title or pursuant to any such authority. 2
SEC. 152. INVESTIGATIONS AND ADMINISTRATIVE DIS- 3
COVERY. 4
(a) JOINT INVESTIGATIONS. 5
(1) IN GENERAL.The Agency or, where appro- 6
priate, an Agency representative may engage in joint 7
investigations and requests for information. 8
(2) FAIR LENDING.The authority under para- 9
graph (1) includes matters relating to fair lending, 10
and where appropriate, joint investigations and re- 11
quests for information with the Secretary of Housing 12
and Urban Development, the Attorney General, or 13
both. 14
(b) SUBPOENAS. 15
(1) IN GENERAL.The Agency or an Agency in- 16
vestigator may issue subpoenas for the attendance and 17
testimony of witnesses and the production of relevant 18
papers, books, documents, or other material in connec- 19
tion with hearings under this title. 20
(2) FAILURE TO OBEY.In case of contumacy or 21
refusal to obey a subpoena issued pursuant to this 22
paragraph and served upon any person, the district 23
court of the United States for any district in which 24
such person is found, resides, or transacts business, 25

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upon application by the Agency or an Agency investi- 1
gator and after notice to such person, shall have juris- 2
diction to issue an order requiring such person to ap- 3
pear and give testimony or to appear and produce 4
documents or other material, or both. 5
(3) CONTEMPT.Any failure to obey an order of 6
the court under this subsection may be punished by 7
the court as a contempt thereof. 8
(c) DEMANDS. 9
(1) IN GENERAL.Whenever the Agency has rea- 10
son to believe that any person may be in possession, 11
custody, or control of any documentary material or 12
tangible things, or may have any information, rel- 13
evant to a violation, the Agency may, before the insti- 14
tution of any proceedings under this title or under 15
any enumerated consumer law or pursuant to the au- 16
thorities transferred under subtitles F and H, issue in 17
writing, and cause to be served upon such person, a 18
civil investigative demand requiring such person to 19
(A) produce such documentary material for 20
inspection and copying or reproduction in the 21
form or medium requested by the Agency; 22
(B) submit such tangible things; 23
(C) file written reports or answers to ques- 24
tions; 25

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(D) give oral testimony concerning docu- 1
mentary material or other information; or 2
(E) furnish any combination of such mate- 3
rial, answers, or testimony. 4
(2) REQUIREMENTS.Each civil investigative 5
demand shall state the nature of the conduct consti- 6
tuting the alleged violation which is under investiga- 7
tion and the provision of law applicable to such viola- 8
tion. 9
(3) PRODUCTION OF DOCUMENTS.Each civil 10
investigative demand for the production of documen- 11
tary material shall 12
(A) describe each class of documentary ma- 13
terial to be produced under the demand with 14
such definiteness and certainty as to permit such 15
material to be fairly identified; 16
which the material so demanded may be assem- 19
bled and made available for inspection and copy- 20
ing or reproduction; and 21
material shall be made available. 23

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(4) PRODUCTION OF THINGS.Each civil inves- 1
tigative demand for the submission of tangible things 2
shall 3
(A) describe each class of tangible things to 4
be submitted under the demand with such defi- 5
niteness and certainty as to permit such things 6
to be fairly identified; 7
which the things so demanded may be assembled 10
and submitted; and 11
things shall be submitted. 13
(5) DEMAND FOR WRITTEN REPORTS OR AN- 14
SWERS.Each civil investigative demand for written 15
reports or answers to questions shall 16
(A) propound with definiteness and cer- 17
tainty the reports to be produced or the questions 18
to be answered; 19
(B) prescribe a date or dates at which time 20
written reports or answers to questions shall be 21
submitted; and 22
(C) identify the custodian to whom such re- 23
ports or answers shall be submitted. 24

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(6) ORAL TESTIMONY.Each civil investigative 1
demand for the giving of oral testimony shall 2
(A) prescribe a date, time, and place at 3
which oral testimony shall be commenced; and 4
(B) identify a Agency investigator who 5
shall conduct the investigation and the custodian 6
to whom the transcript of such investigation 7
shall be submitted. 8
(7) SERVICE. 9
(A) Any civil investigative demand may be 10
served by any Agency investigator at any place 11
within the territorial jurisdiction of any court of 12
the United States. 13
(B) Any such demand or any enforcement 14
petition filed under this section may be served 15
upon any person who is not found within the 16
territorial jurisdiction of any court of the United 17
States, in such manner as the Federal Rules of 18
Civil Procedure prescribe for service in a foreign 19
nation. 20
(C) To the extent that the courts of the 21
United States have authority to assert jurisdic- 22
tion over such person consistent with due proc- 23
ess, the United States District Court for the Dis- 24
trict of Columbia shall have the same jurisdic- 25

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H.L.C.
tion to take any action respecting compliance 1
with this section by such person that such dis- 2
trict court would have if such person were per- 3
sonally within the jurisdiction of such district 4
court. 5
(8) METHOD OF SERVICE.Service of any civil 6
investigative demand or any enforcement petition 7
filed under this section may be made upon a person, 8
including any legal entity, by 9
(A) delivering a duly executed copy of such 10
demand or petition to the individual or to any 11
partner, executive officer, managing agent, or 12
general agent of such person, or to any agent of 13
such person authorized by appointment or by 14
law to receive service of process on behalf of such 15
person; 16
(B) delivering a duly executed copy of such 17
demand or petition to the principal office or 18
place of business of the person to be served; or 19
(C) depositing a duly executed copy in the 20
United States mails, by registered or certified 21
mail, return receipt requested, duly addressed to 22
such person at its principal office or place of 23
business. 24
(9) PROOF OF SERVICE. 25

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H.L.C.
(A) A verified return by the individual 1
serving any civil investigative demand or any 2
enforcement petition filed under this section set- 3
ting forth the manner of such service shall be 4
proof of such service. 5
(B) In the case of service by registered or 6
certified mail, such return shall be accompanied 7
by the return post office receipt of delivery of 8
such demand or enforcement petition. 9
(10) PRODUCTION OF DOCUMENTARY MATE- 10
RIAL.The production of documentary material in 11
response to a civil investigative demand shall be made 12
under a sworn certificate, in such form as the demand 13
designates, by the person, if a natural person, to 14
whom the demand is directed or, if not a natural per- 15
son, by any person having knowledge of the facts and 16
circumstances relating to such production, to the ef- 17
fect that all of the documentary material required by 18
the demand and in the possession, custody, or control 19
of the person to whom the demand is directed has 20
been produced and made available to the custodian. 21
(11) SUBMISSION OF TANGIBLE THINGS.The 22
submission of tangible things in response to a civil 23
investigative demand shall be made under a sworn 24
certificate, in such form as the demand designates, by 25

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H.L.C.
the person to whom the demand is directed or, if not 1
a natural person, by any person having knowledge of 2
the facts and circumstances relating to such produc- 3
tion, to the effect that all of the tangible things re- 4
quired by the demand and in the possession, custody, 5
or control of the person to whom the demand is di- 6
rected have been submitted to the custodian. 7
(12) SEPARATE ANSWERS.Each reporting re- 8
quirement or question in a civil investigative demand 9
shall be answered separately and fully in writing 10
under oath, unless it is objected to, in which event the 11
reasons for the objection shall be stated in lieu of an 12
answer, and it shall be submitted under a sworn cer- 13
tificate, in such form as the demand designates, by 14
the person, if a natural person, to whom the demand 15
is directed or, if not a natural person, by any person 16
responsible for answering each reporting requirement 17
or question, to the effect that all information required 18
by the demand and in the possession, custody, control, 19
or knowledge of the person to whom the demand is di- 20
rected has been submitted. 21
(13) TESTIMONY. 22
(A) PROCEDURE. 23
(i) OATH AND RECORDATION.Any 24
Agency investigator before whom oral testi- 25

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H.L.C.
mony is to be taken shall put the witness on 1
oath or affirmation and shall personally, or 2
by any individual acting under the direc- 3
tion of and in the presence of the investi- 4
gator, record the testimony of the witness. 5
(ii) TRANSCRIPTIONS.The testimony 6
shall be taken stenographically and tran- 7
scribed. 8
(iii) COPY TO CUSTODIAN.After the 9
testimony is fully transcribed, the Agency 10
investigator before whom the testimony is 11
taken shall promptly transmit a copy of the 12
transcript of the testimony to the custodian. 13
(B) PARTIES PRESENT.Any Agency inves- 14
tigator before whom oral testimony is to be taken 15
shall exclude from the place where the testimony 16
is to be taken all other persons except the person 17
giving the testimony, the attorney for such per- 18
son, the officer before whom the testimony is to 19
be taken, an investigator or representative of an 20
agency with which the Agency is engaged in a 21
joint investigation, and any stenographer taking 22
such testimony. 23
(C) LOCATION.The oral testimony of any 24
person taken pursuant to a civil investigative de- 25

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H.L.C.
mand shall be taken in the judicial district of the 1
United States in which such person resides, is 2
found, or transacts business, or in such other 3
place as may be agreed upon by the Agency in- 4
vestigator before whom the oral testimony of such 5
person is to be taken and such person. 6
(D) ATTORNEY REPRESENTATION. 7
(i) IN GENERAL.Any person com- 8
pelled to appear under a civil investigative 9
demand for oral testimony pursuant to this 10
section may be accompanied, represented, 11
and advised by an attorney. 12
(ii) CONFIDENTIAL ADVICE.The at- 13
torney may advise the person summoned, in 14
confidence, either upon the request of such 15
person or upon the initiative of the attor- 16
ney, with respect to any question asked of 17
such person. 18
(iii) OBJECTIONS.The person sum- 19
moned or the attorney may object on the 20
record to any question, in whole or in part, 21
and shall briefly state for the record the rea- 22
son for the objection. 23
(iv) REFUSAL TO ANSWER.An objec- 24
tion may properly be made, received, and 25

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entered upon the record when it is claimed 1
that the person summoned is entitled to 2
refuse to answer the question on grounds of 3
any constitutional or other legal right or 4
privilege, including the privilege against 5
self-incrimination, but such person shall not 6
otherwise object to or refuse to answer any 7
question, and shall not otherwise interrupt 8
the oral examination, directly or through 9
such persons attorney. 10
(v) PETITION FOR ORDER.If such 11
person refuses to answer any question, the 12
Agency may petition the district court of 13
the United States pursuant to this section 14
for an order compelling such person to an- 15
swer such question. 16
(vi) BASIS FOR COMPELLING TESTI- 17
MONY.If such person refuses to answer 18
any question on grounds of the privilege 19
against self-incrimination, the testimony of 20
such person may be compelled in accordance 21
with the provisions of section 6004 of title 22
18, United States Code. 23
(E) TRANSCRIPTS. 24

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(i) RIGHT TO EXAMINE.After the tes- 1
timony of any witness is fully transcribed, 2
the Agency investigator shall afford the wit- 3
ness (who may be accompanied by an attor- 4
ney) a reasonable opportunity to examine 5
the transcript. 6
(ii) READING THE TRANSCRIPT.The 7
transcript shall be read to or by the witness, 8
unless such examination and reading are 9
waived by the witness. 10
(iii) REQUEST FOR CHANGES.Any 11
changes in form or substance which the wit- 12
ness desires to make shall be entered and 13
identified upon the transcript by the Agency 14
investigator with a statement of the reasons 15
given by the witness for making such 16
changes. 17
(iv) SIGNATURE.The transcript shall 18
be signed by the witness, unless the witness 19
in writing waives the signing, is ill, cannot 20
be found, or refuses to sign. 21
(v) AGENCY ACTION IN LIEU OF SIGNA- 22
TURE.If the transcript is not signed by 23
the witness during the 30-day period fol- 24
lowing the date upon which the witness is 25

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first afforded a reasonable opportunity to 1
examine it, the Agency investigator shall 2
sign the transcript and state on the record 3
the fact of the waiver, illness, absence of the 4
witness, or the refusal to sign, together with 5
any reasons given for the failure to sign. 6
(F) CERTIFICATION BY INVESTIGATOR.The 7
Agency investigator shall certify on the tran- 8
script that the witness was duly sworn by the in- 9
vestigator and that the transcript is a true 10
record of the testimony given by the witness, and 11
the Agency investigator shall promptly deliver 12
the transcript or send it by registered or certified 13
mail to the custodian. 14
(G) COPY OF TRANSCRIPT.The Agency in- 15
vestigator shall furnish a copy of the transcript 16
(upon payment of reasonable charges for the 17
transcript) to the witness only, except that the 18
Agency may for good cause limit such witness to 19
inspection of the official transcript of the testi- 20
mony of such witness. 21
(H) WITNESS FEES.Any witness appear- 22
ing for the taking of oral testimony pursuant to 23
a civil investigative demand shall be entitled to 24

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the same fees and mileage which are paid to wit- 1
nesses in the district courts of the United States. 2
(d) CONFIDENTIAL TREATMENT OF DEMAND MATE- 3
RIAL. 4
(1) IN GENERAL.Materials received as a result 5
of a civil investigative demand shall be subject to re- 6
quirements and procedures regarding confidentiality, 7
in accordance with regulations established by the Di- 8
rector. 9
(2) DISCLOSURE TO CONGRESS.No regulation 10
established by the Director regarding the confiden- 11
tiality of materials submitted to, or otherwise ob- 12
tained by, the Agency shall be intended to prevent 13
disclosure to either House of the Congress or to an ap- 14
propriate committee of the Congress, except that the 15
Director may prescribe regulations allowing prior no- 16
tice to any party that owns or otherwise provided the 17
material to the Agency and has designated such mate- 18
rial as confidential. 19
(e) PETITION FOR ENFORCEMENT. 20
(1) IN GENERAL.Whenever any person fails to 21
comply with any civil investigative demand duly 22
served upon such person under this section, or when- 23
ever satisfactory copying or reproduction of material 24
requested pursuant to the demand cannot be accom- 25

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plished and such person refuses to surrender such ma- 1
terial, the Agency, through such officers or attorneys 2
as the Director may designate, may file, in the dis- 3
trict court of the United States for any judicial dis- 4
trict in which such person resides, is found, or trans- 5
acts business, and serve upon such person, a petition 6
for an order of such court for the enforcement of this 7
section. 8
(2) SERVICE OF PROCESS.All process of any 9
court to which application may be made as provided 10
in this subsection may be served in any judicial dis- 11
trict. 12
(f) PETITION FOR ORDER MODIFYING OR SETTING 13
ASIDE DEMAND. 14
(1) IN GENERAL.Not later than 20 days after 15
the service of any civil investigative demand upon 16
any person under subsection (b), or at any time be- 17
fore the return date specified in the demand, which- 18
ever period is shorter, or within such period exceeding 19
20 days after service or in excess of such return date 20
as may be prescribed in writing, subsequent to serv- 21
ice, by any Agency investigator named in the de- 22
mand, such person may file with the Agency a peti- 23
tion for an order by the Agency modifying or setting 24
aside the demand. 25

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(2) COMPLIANCE DURING PENDENCY.The time 1
permitted for compliance with the demand in whole 2
or in part, as deemed proper and ordered by the 3
Agency, shall not run during the pendency of such pe- 4
tition at the Agency, except that such person shall 5
comply with any portions of the demand not sought 6
to be modified or set aside. 7
(3) SPECIFIC GROUNDS.Such petition shall 8
specify each ground upon which the petitioner relies 9
in seeking such relief, and may be based upon any 10
failure of the demand to comply with the provisions 11
of this section, or upon any constitutional or other 12
legal right or privilege of such person. 13
(g) CUSTODIAL CONTROL.At any time during which 14
any custodian is in custody or control of any documentary 15
material, tangible things, reports, answers to questions, or 16
transcripts of oral testimony given by any person in com- 17
pliance with any civil investigative demand, such person 18
may file, in the district court of the United States for the 19
judicial district within which the office of such custodian 20
is situated, and serve upon such custodian, a petition for 21
an order of such court requiring the performance by such 22
custodian of any duty imposed upon such custodian by this 23
section or regulation prescribed by the Director. 24
(h) JURISDICTION OF COURT. 25

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(1) IN GENERAL.Whenever any petition is filed 1
in any district court of the United States under this 2
section, such court shall have jurisdiction to hear and 3
determine the matter so presented, and to enter such 4
order or orders as may be required to carry into effect 5
the provisions of this section. 6
(2) APPEAL.Any final order so entered shall be 7
subject to appeal pursuant to section 1291 of title 28, 8
SEC. 153. HEARINGS AND ADJUDICATION PROCEEDINGS. 10
(a) IN GENERAL.The Agency may conduct hearings 11
and adjudication proceedings with respect to any person 12
in the manner prescribed by chapter 5 of title 5, United 13
States Code in order to ensure or enforce compliance with 14
(1) the provisions of this title, including any reg- 15
ulations prescribed by the Director under this title; 16
and 17
(2) any other Federal law that the Agency is au- 18
thorized to enforce, including an enumerated con- 19
sumer law, and any regulations or order prescribed 20
thereunder, unless such Federal law specifically limits 21
the Agency from conducting a hearing or adjudication 22
proceeding and only to the extent of such limitation. 23
(b) SPECIAL RULES FOR CEASE-AND-DESIST PRO- 24
CEEDINGS. 25

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(1) ISSUANCE. 1
(A) NOTICE OF CHARGES.If, in the opin- 2
ion of the Agency, any covered person or service 3
provider is engaging or has engaged in an activ- 4
ity that violates a law, regulation, or any condi- 5
tion imposed in writing on the person by the 6
Agency, the Agency may issue and serve upon 7
the person a notice of charges with respect to 8
such violation. 9
(B) CONTENTS OF NOTICE.The notice 10
shall contain a statement of the facts consti- 11
tuting any alleged violation and shall fix a time 12
and place at which a hearing will be held to de- 13
termine whether an order to cease-and-desist 14
there from should issue against the person. 15
(C) TIME OF HEARING.A hearing under 16
this subsection shall be fixed for a date not ear- 17
lier than 30 days nor later than 60 days after 18
service of such notice unless an earlier or a later 19
date is set by the Agency at the request of any 20
party so served. 21
(D) NONAPPEARANCE DEEMED TO BE CON- 22
SENT TO ORDER.Unless the party or parties so 23
served shall appear at the hearing personally or 24
by a duly authorized representative, they shall be 25

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deemed to have consented to the issuance of the 1
cease-and-desist order. 2
(E) ISSUANCE OF ORDER.In the event of 3
such consent, or if upon the record made at any 4
such hearing, the Agency shall find that any vio- 5
lation specified in the notice of charges has been 6
established, the Agency may issue and serve upon 7
the person an order to cease-and-desist from any 8
such violation or practice. 9
(F) INCLUDES REQUIREMENT FOR CORREC- 10
TIVE ACTION.Such order may, by provisions 11
which may be mandatory or otherwise, require 12
the person to cease-and-desist from the same, 13
and, further, to take affirmative action to correct 14
the conditions resulting from any such violation. 15
(2) EFFECTIVENESS OF ORDER.A cease-and-de- 16
sist order shall take effect at the end of the 30-day pe- 17
riod beginning on the date of the service of such order 18
upon the covered person or service provider concerned 19
(except in the case of a cease-and-desist order issued 20
upon consent, which shall take effect at the time speci- 21
fied therein), and shall remain effective and enforce- 22
able as provided therein, except to such extent as it 23
is stayed, modified, terminated, or set aside by action 24
of the Agency or a reviewing court. 25

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(3) DECISION AND APPEAL. 1
(A) PLACE OF AND PROCEDURES FOR 2
HEARING.Any hearing provided for in this 3
subsection shall be held in the Federal judicial 4
district or in the territory in which the residence 5
or home office of the person is located unless the 6
person consents to another place, and shall be 7
conducted in accordance with the provisions of 8
chapter 5 of title 5 of the United States Code. 9
(B) TIME LIMIT FOR DECISION.After such 10
hearing, and within 90 days after the Agency 11
has notified the parties that the case has been 12
submitted to it for final decision, the Agency 13
shall 14
(i) render its decision (which shall in- 15
clude findings of fact upon which its deci- 16
sion is predicated) and shall issue; and 17
(ii) serve upon each party to the pro- 18
ceeding an order or orders consistent with 19
the provisions of this section. Judicial re- 20
view of any such order shall be exclusively 21
as provided in this subsection. 22
(C) MODIFICATION OF ORDER GEN- 23
ERALLY.Unless a petition for review is timely 24
filed in a court of appeals of the United States, 25

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as hereinafter provided in paragraph (4), and 1
thereafter until the record in the proceeding has 2
been filed as so provided, the Agency may at any 3
time, upon such notice and in such manner as 4
it shall deem proper, modify, terminate, or set 5
aside any such order. 6
(D) MODIFICATION OF ORDER AFTER FIL- 7
ING RECORD ON APPEAL.Upon such filing of 8
the record, the Agency may modify, terminate, or 9
set aside any such order with permission of the 10
court. 11
(4) APPEAL TO COURT OF APPEALS. 12
(A) IN GENERAL.Any party to any pro- 13
ceeding under this subsection may obtain a re- 14
view of any order served pursuant to this sub- 15
section (other than an order issued with the con- 16
sent of the person concerned) by the filing in the 17
court of appeals of the United States for the cir- 18
cuit in which the principal office of the covered 19
person is located, or in the United States Court 20
of Appeals for the District of Columbia Circuit, 21
within 30 days after the date of service of such 22
order, a written petition praying that the order 23
of the Agency be modified, terminated, or set 24
aside. 25

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(B) TRANSMITTAL OF COPY TO THE AGEN- 1
CY.A copy of such petition shall be forthwith 2
transmitted by the clerk of the court to the Agen- 3
cy, and thereupon the Agency shall file in the 4
court the record in the proceeding, as provided 5
in section 2112 of title 28 of the United States 6
Code. 7
(C) JURISDICTION OF COURT.Upon the 8
filing of a petition under subparagraph (A), such 9
court shall have jurisdiction, which upon the fil- 10
ing of the record shall except as provided in the 11
last sentence of paragraph (3) be exclusive, to af- 12
firm, modify, terminate, or set aside, in whole or 13
in part, the order of the Agency. 14
(D) SCOPE OF REVIEW.Review of such 15
proceedings shall be had as provided in chapter 16
7 of title 5 of the United States Code. 17
(E) FINALITY.The judgment and decree of 18
the court shall be final, except that the same 19
shall be subject to review by the Supreme Court 20
upon certiorari, as provided in section 1254 of 21
title 28 of the United States Code. 22
(5) NO STAY.The commencement of proceedings 23
for judicial review under paragraph (4) shall not, un- 24

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less specifically ordered by the court, operate as a 1
stay of any order issued by the Agency. 2
(c) SPECIAL RULES FOR TEMPORARY CEASE-AND-DE- 3
SIST PROCEEDINGS. 4
(1) ISSUANCE. 5
(A) IN GENERAL.Whenever the Agency de- 6
termines that the violation specified in the notice 7
of charges served upon a person, including a 8
service provider, pursuant to subsection (b), or 9
the continuation of such violation, is likely to 10
cause the person to be insolvent or otherwise 11
prejudice the interests of consumers before the 12
completion of the proceedings conducted pursu- 13
ant to subsection (b), the Agency may issue a 14
temporary order requiring the person to cease- 15
and-desist from any such violation or practice 16
and to take affirmative action to prevent or rem- 17
edy such insolvency or other condition pending 18
completion of such proceedings. 19
(B) OTHER REQUIREMENTS.Any tem- 20
porary order issued under this paragraph may 21
include any requirement authorized under this 22
subtitle. 23
(C) EFFECT DATE OF ORDER.Any tem- 24
porary order issued under this paragraph shall 25

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take effect upon service upon the person and, un- 1
less set aside, limited, or suspended by a court 2
in proceedings authorized by paragraph (2) of 3
this subsection, shall remain effective and en- 4
forceable pending the completion of the adminis- 5
trative proceedings pursuant to such notice and 6
until such time as the Agency shall dismiss the 7
charges specified in such notice, or if a cease- 8
and-desist order is issued against the person, 9
until the effective date of such order. 10
(2) APPEAL.Within 10 days after the person 11
concerned has been served with a temporary cease- 12
and-desist order, the person may apply to the United 13
States district court for the judicial district in which 14
the home office of the person is located, or the United 15
States District Court for the District of Columbia, for 16
an injunction setting aside, limiting, or suspending 17
the enforcement, operation, or effectiveness of such 18
order pending the completion of the administrative 19
proceedings pursuant to the notice of charges served 20
upon the person under subsection (b), and such court 21
shall have jurisdiction to issue such injunction. 22
(3) INCOMPLETE OR INACCURATE RECORDS. 23
(A) TEMPORARY ORDER.If a notice of 24
charges served under subsection (b) specifies, on 25

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the basis of particular facts and circumstances, 1
that a persons books and records are so incom- 2
plete or inaccurate that the Agency is unable to 3
determine the financial condition of that person 4
or the details or purpose of any transaction or 5
transactions that may have a material effect on 6
the financial condition of that person, the Agen- 7
cy may issue a temporary order requiring 8
(i) the cessation of any activity or 9
practice which gave rise, whether in whole 10
or in part, to the incomplete or inaccurate 11
state of the books or records; or 12
(ii) affirmative action to restore such 13
books or records to a complete and accurate 14
state, until the completion of the pro- 15
ceedings under subsection (b)(1). 16
(B) EFFECTIVE PERIOD.Any temporary 17
order issued under subparagraph (A) 18
(i) shall take effect upon service; and 19
(ii) unless set aside, limited, or sus- 20
pended by a court in proceedings under 21
paragraph (2), shall remain in effect and 22
enforceable until the earlier of 23
(I) the completion of the pro- 24
ceeding initiated under subsection (b) 25

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in connection with the notice of 1
charges; or 2
(II) the date the Agency deter- 3
mines, by examination or otherwise, 4
that the persons books and records are 5
accurate and reflect the financial con- 6
dition of the person. 7
(d) SPECIAL RULES FOR ENFORCEMENT OF OR- 8
DERS. 9
(1) IN GENERAL.The Agency may in its discre- 10
tion apply to the United States district court within 11
the jurisdiction of which the principal office of the 12
person is located, for the enforcement of any effective 13
and outstanding notice or order issued under this sec- 14
tion, and such court shall have jurisdiction and 15
power to order and require compliance herewith. 16
(2) EXCEPTION.Except as otherwise provided 17
in this subsection, no court shall have jurisdiction to 18
affect by injunction or otherwise the issuance or en- 19
forcement of any notice or order or to review, modify, 20
suspend, terminate, or set aside any such notice or 21
order. 22
(e) REGULATIONS.The Director shall prescribe regu- 23
lations establishing such procedures as may be necessary 24
to carry out this section. 25

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SEC. 154. LITIGATION AUTHORITY. 1
(a) IN GENERAL.If any person violates a provision 2
of this title, any enumerated consumer law, any law for 3
H, or any regulation prescribed or order issued by the Di- 5
rector under this title or pursuant to any such authority, 6
the Agency may commence a civil action against such per- 7
son to impose a civil penalty and to seek all appropriate 8
legal and equitable relief including a permanent or tem- 9
porary injunction as permitted by law. 10
(b) REPRESENTATION.The Agency may act in its 11
own name and through its own attorneys in enforcing any 12
provision of this title, regulations under this title, or any 13
other law or regulation, or in any action, suit, or pro- 14
ceeding to which the Agency is a party. 15
(c) COMPROMISE OF ACTIONS.The Agency may com- 16
promise or settle any action if such compromise is approved 17
by the court. 18
(d) NOTICE TO THE ATTORNEY GENERAL.When 19
commencing a civil action under this title, any enumerated 20
ferred under subtitles F and H, or any regulation there- 22
under, the Agency shall notify the Attorney General. 23
(e) APPEARANCE BEFORE THE SUPREME COURT. 24
The Agency may represent itself in its own name before the 25
Supreme Court of the United States, if 26

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(1) the Agency makes a written request to the At- 1
torney General within the 10-day period which begins 2
on the date of entry of the judgment which would per- 3
mit any party to file a petition for writ of certiorari; 4
and 5
(2) the Attorney General concurs with such re- 6
quest or fails to take action within 60 days of the 7
Agencys request. 8
(f) FORUM.Any civil action brought under this title 9
may be brought in a United States district court or in any 10
court of competent jurisdiction of a state in a district in 11
which the defendant is located or resides or is doing busi- 12
ness, and such court shall have jurisdiction to enjoin such 13
person and to require compliance with this title, any enu- 14
merated consumer law, any law for which authorities were 15
transferred under subtitles F and H, or any regulation pre- 16
scribed or order issued by the Director under this title or 17
pursuant to any such authority. 18
(g) TIME FOR BRINGING ACTION. 19
(1) IN GENERAL.Except as otherwise permitted 20
by law or equity, no action may be brought under 21
this title more than 3 years after the date of the dis- 22
covery of the violation to which an action relates. 23
(2) LIMITATIONS UNDER OTHER FEDERAL 24
LAWS. 25

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(A) For purposes of this section, an action 1
arising under this title shall not include claims 2
arising solely under enumerated consumer laws. 3
(B) In any action arising solely under an 4
enumerated consumer law, the Agency may com- 5
mence, defend, or intervene in the action in ac- 6
cordance with the requirements of that law, as 7
applicable. 8
(C) In any action arising solely under the 9
laws for which authorities were transferred by 10
subtitles F and H, the Agency may commence, 11
defend, or intervene in the action in accordance 12
with the requirements of that law, as applicable. 13
SEC. 155. RELIEF AVAILABLE. 14
(a) ADMINISTRATIVE PROCEEDINGS OR COURT AC- 15
TIONS. 16
(1) JURISDICTION.The court (or Agency, as the 17
case may be) in an action or adjudication proceeding 18
brought under this title, any enumerated consumer 19
law, or any law for which authorities were trans- 20
ferred by subtitles F and H, shall have jurisdiction to 21
grant any appropriate legal or equitable relief with 22
respect to a violation of this title, any enumerated 23
consumer law, and any law for which authorities 24
were transferred by subtitles F and H, including a 25

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violation of a regulation prescribed or order issued 1
under this title, any enumerated consumer law and 2
any law for which authorities were transferred by 3
(2) RELIEF.Such relief may include 5
(A) rescission or reformation of contracts; 6
(B) refund of moneys or return of real 7
property; 8
(C) restitution; 9
(D) disgorgement or compensation for un- 10
just enrichment; 11
(E) payment of damages; 12
(F) public notification regarding the viola- 13
tion, including the costs of notification; 14
(G) limits on the activities or functions of 15
the person; and 16
(H) civil money penalties under subsection 17
(c). 18
(3) NO EXEMPLARY OR PUNITIVE DAMAGES. 19
Nothing in this subsection shall be construed as au- 20
thorizing the imposition of exemplary or punitive 21
damages. 22
(b) RECOVERY OF COSTS.In any action brought by 23
the Agency, a State attorney general, or a State bank super- 24
visor to enforce any provision of this title, any enumerated 25

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ferred by subtitles F and H, or any regulation prescribed 2
or order issued by the Director under this title or pursuant 3
to any such authority, the Agency, State attorney general, 4
or State bank supervisor may recover the costs incurred by 5
such Agency, attorney general, or supervisor in connection 6
with prosecuting such action if the Agency, State attorney 7
general, or State bank supervisors (as the case may be) is 8
the prevailing party in the action. 9
(c) CIVIL MONEY PENALTY IN COURT AND ADMINIS- 10
TRATIVE ACTIONS. 11
(1) Any person that violates, through any act or 12
omission, any provision of this title, any enumerated 13
consumer law, or any regulation prescribed or order 14
issued by the Director under this title shall forfeit and 15
pay a civil penalty pursuant to this subsection deter- 16
mined as follows: 17
(A) FIRST TIER.For any violation of any 18
law, regulation, final order or condition imposed 19
in writing by the Agency, or for any failure to 20
pay any fee or assessment imposed by the Agency 21
(including any fee or assessment for which a re- 22
lated person may be liable), a civil penalty shall 23
not exceed $5,000 for each day during which 24
such violation continues. 25

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(B) SECOND TIER.Notwithstanding para- 1
graph (A), for any violation of a regulation pre- 2
scribed under section 136 or for any person that 3
recklessly engages in a violation of this title, any 4
enumerated consumer law, or any regulation 5
prescribed or order issued by the Director under 6
this title, relating to the provision of an alter- 7
native consumer financial product or service, a 8
civil penalty shall not exceed $25,000 for each 9
(C) THIRD TIER.Notwithstanding sub- 11
paragraphs (A) and (B), for any person that 12
knowingly violates this title, any enumerated 13
consumer law, or any regulation prescribed or 14
order issued by the Director under this title, a 15
civil penalty shall not exceed $1,000,000 for each 16
(2) MITIGATING FACTORS.In determining the 18
amount of any penalty assessed under paragraph (1), 19
the Agency or the court shall take into account the 20
appropriateness of the penalty with respect to 21
(A) the size of financial resources and good 22
faith of the person charged; 23
(B) the gravity of the violation or failure to 24
pay; 25

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(C) the severity of the risks to or losses of 1
the consumer, which may take into account the 2
number of products or services sold or provided; 3
(D) the history of previous violations; and 4
(E) such other matters as justice may re- 5
quire. 6
(3) AUTHORITY TO MODIFY OR REMIT PEN- 7
ALTY.The Agency may compromise, modify, or 8
remit any penalty which may be assessed or had al- 9
ready been assessed under paragraph (1). The amount 10
of such penalty, when finally determined, shall be ex- 11
clusive of any sums owed by the person to the United 12
States in connection with the costs of the proceeding, 13
and may be deducted from any sums owing by the 14
United States to the person charged. 15
(4) NOTICE AND HEARING.No civil penalty 16
may be assessed with respect to a violation of this 17
title, any enumerated consumer law, or any regula- 18
tion prescribed or order issued by the Director, un- 19
less 20
(A) the Agency gives notice and an oppor- 21
tunity for a hearing to the person accused of the 22
violation; or 23

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(B) the appropriate court has ordered such 1
assessment and entered judgment in favor of the 2
Agency. 3
SEC. 156. REFERRALS FOR CRIMINAL PROCEEDINGS. 4
Whenever the Agency obtains evidence that any person, 5
either domestic or foreign, has engaged in conduct that may 6
constitute a violation of Federal criminal law, the Agency 7
may transmit such evidence to the Attorney General, who 8
may institute criminal proceedings under appropriate law. 9
No provision of this section shall be construed as affecting 10
any other authority of the Agency to disclose information. 11
SEC. 157. EMPLOYEE PROTECTION. 12
(a) IN GENERAL.No covered person or service pro- 13
vider shall terminate or in any other way discriminate 14
against, or cause to be terminated or discriminated against, 15
any covered employee or any authorized representative of 16
covered employees by reason of the fact that such employee 17
or representative, whether at the employees initiative or in 18
the ordinary course of the employees duties (or any person 19
acting pursuant to a request of the employee) 20
(1) has provided information to the Agency or to 21
any other State, local, or Federal Government author- 22
ity or law enforcement official information relating to 23
any violation of, or any act or omission the employee 24
reasonably believes to be a violation of any provision 25

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of this Act or any other law that is subject to the ju- 1
risdiction of the Agency, or any regulation, order, 2
standard, or prohibition prescribed by the Director; 3
(2) has testified or is about to testify in any pro- 4
ceeding resulting from the administration or enforce- 5
ment of any provision of this Act or any other law 6
that is subject to the jurisdiction of the Agency, or 7
any regulation, order, standard, or prohibition pre- 8
scribed by the Director; 9
(3) has filed or instituted, or has caused to be 10
filed or instituted, any proceeding under any enumer- 11
ated consumer law or any law for which authorities 12
were transferred by subtitles F and H; or 13
(4) has objected to, or refused to participate in, 14
any activity, policy, practice, or assigned task that 15
the employee (or other such person) reasonably be- 16
lieved to be in violation of any law, regulation, order, 17
standard, or prohibition, subject to the jurisdiction of, 18
or enforceable by, the Agency. 19
(b) COVERED EMPLOYEE DEFINED.For the purposes 20
of this section, the term covered employee means any in- 21
dividual performing tasks related to the provision of a fi- 22
nancial product or service to a consumer. 23
(c) TIMETABLES. 24

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(1) FILING COMPLAINT.Any individual who be- 1
lieves that such individual has been discharged or oth- 2
erwise discriminated against by any person in viola- 3
tion of subsection (a) may, before the end of the 180- 4
day period beginning on the date on which such vio- 5
lation occurs, file (or have any person file on behalf 6
of such individual) a complaint with the Secretary of 7
Labor (hereafter in this subsection referred to as the 8
Secretary, notwithstanding section 101(34)) alleg- 9
ing such discharge or discrimination and identifying 10
the person responsible for such act. 11
(2) SECRETARYS ACTION ON RECEIPT OF COM- 12
PLAINT.Upon receipt of a complaint by any indi- 13
vidual under paragraph (1), the Secretary shall no- 14
tify, in writing, the person named in the complaint 15
who is alleged to have committed the violation of 16
(A) the filing of the complaint; 17
(B) the allegations contained in the com- 18
plaint; 19
(C) the substance of the evidence supporting 20
the complaint; and 21
(D) the opportunities that will be afforded 22
to such person under paragraph (3). 23
(3) INVESTIGATION, HEARING, AND ORDERS. 24

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(A) FINDINGS.Not later than 60 days 1
after the date of receipt of a complaint filed 2
under paragraph (1) and after affording the in- 3
dividual filing the complaint and the person 4
named in the complaint who is alleged to have 5
committed the violation an opportunity to sub- 6
mit to the Secretary a written response to the 7
complaint and an opportunity to meet with a 8
representative of the Secretary to present state- 9
ments from witnesses, the Secretary shall initiate 10
an investigation and determine whether there is 11
reasonable cause to believe that the complaint 12
has merit and notify, in writing, the complain- 13
ant and the person alleged to have committed a 14
violation of subsection (a) of the Secretarys find- 15
ings. 16
(B) PRELIMINARY ORDER.If the Secretary 17
concludes that there is reasonable cause to believe 18
that a violation of subsection (a) has occurred, 19
the Secretary shall accompany the Secretarys 20
findings with a preliminary order providing the 21
relief prescribed by paragraph (3)(B). 22
(C) OBJECTIONS TO FINDINGS OR PRELIMI- 23
NARY ORDER.Not later than 30 days after the 24
date of notification of findings under subpara- 25

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graph (A), the person alleged to have committed 1
the violation or the complainant may file objec- 2
tions to the findings or preliminary order, or 3
both, and request a hearing on the record. 4
(D) OBJECTIONS DO NOT CONSTITUTE A 5
STAY. The filing of objections under subpara- 6
graph (C) shall not operate to stay any rein- 7
statement remedy contained in the preliminary 8
order. 9
(E) EXPEDITIOUS HEARING.Any hearing 10
requested under subparagraph (C) shall be con- 11
ducted expeditiously. 12
(F) FINALITY OF ORDER. If a hearing is 13
not requested under subparagraph (C) with re- 14
spect to any findings of the Secretary under sub- 15
paragraph (A) within the 30-day period de- 16
scribed in subparagraph (C), the preliminary 17
order shall be deemed a final order that is not 18
subject to judicial review. 19
(4) STANDARDS FOR DETERMINATION. 20
(A) PRIMA FACIE EVIDENCE OF CONTRIBU- 21
TION.The Secretary shall dismiss a complaint 22
filed under paragraph (1) and shall not conduct 23
an investigation otherwise required under para- 24
graph (3)(A) unless the individual filing the 25

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complaint makes a prima facie showing that any 1
behavior described in paragraph (1), (2), (3), or 2
(4) of subsection (a) was a contributing factor in 3
the unfavorable personnel action alleged in the 4
complaint. 5
(B) PROHIBITION ON INVESTIGATION IN 6
CASE OF CLEAR AND CONVINCING EVIDENCE OF 7
INDEPENDENT BASIS.Notwithstanding a find- 8
ing by the Secretary that the complainant has 9
made the showing required under subparagraph 10
(A), no investigation otherwise required under 11
paragraph (3) shall be conducted if the employer 12
demonstrates, by clear and convincing evidence, 13
that the employer would have taken the same un- 14
favorable personnel action in the absence of that 15
behavior. 16
(C) CONTRIBUTING FACTOR REQUIRE- 17
MENT.The Secretary may determine that a 18
violation of subsection (a) has occurred only if 19
the complainant demonstrates that any behavior 20
described in paragraph (1), (2), (3), or (4) of 21
subsection (a) was a contributing factor in the 22
unfavorable personnel action alleged in the com- 23
plaint. 24

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(D) PROHIBITION ON FINAL ORDER IN CASE 1
OF CLEAR AND CONVINCING EVIDENCE OF INDE- 2
PENDENT BASIS.Relief may not be ordered 3
under paragraph (3) if the employer dem- 4
onstrates by clear and convincing evidence that 5
the employer would have taken the same unfavor- 6
able personnel action in the absence of that be- 7
havior. 8
(5) FINAL ORDER. 9
(A) IN GENERAL.Not later than 120 days 10
after the date of conclusion of any hearing under 11
paragraph (3), the Secretary shall issue a final 12
order providing the relief prescribed by this sub- 13
section or denying the complaint. 14
(B) SETTLEMENT AGREEMENT. At any 15
time before issuance of a final order, a pro- 16
ceeding under this subsection may be terminated 17
on the basis of a settlement agreement entered 18
into by the Secretary, the complainant, and the 19
person alleged to have committed the violation. 20
(C) CONTENTS OF ORDER. If, in response 21
to a complaint filed under paragraph (1), the 22
Secretary determines that a violation of sub- 23
section (a) has occurred, the Secretary shall 24
order the person who committed such violation 25

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(i) to take affirmative action to abate 1
the violation; 2
(ii) to reinstate the complainant to 3
such individuals former position together 4
with compensation (including back pay) 5
and restore the terms, conditions, and privi- 6
leges associated with such individuals em- 7
ployment; and 8
(iii) to provide compensatory damages 9
to the complainant. 10
(D) COSTS AND ATTORNEYS FEES. If an 11
order is issued under this paragraph, the Sec- 12
retary, at the request of the complainant, shall 13
assess against the person against whom the order 14
is issued a sum equal to the aggregate amount 15
of all costs and expenses (including attorneys 16
and expert witness fees) reasonably incurred, as 17
determined by the Secretary, by the complainant 18
for, or in connection with, the bringing of the 19
complaint upon which the order was issued. 20
(E) FRIVOLOUS OR BAD FAITH COM- 21
PLAINTS.If the Secretary finds that a com- 22
plaint under paragraph (1) is frivolous or has 23
been brought in bad faith, the Secretary may 24
award to the prevailing employer a reasonable 25

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H.L.C.
attorneys fee, not exceeding $1,000, to be paid 1
by the complainant. 2
(6) DE NOVO ACTION ON CLAIM. 3
(A) ACTION AT LAW OR EQUITY.If the 4
Secretary has not issued a final decision within 5
210 days after the filing of the complaint, or 6
within 90 days after receiving a written deter- 7
mination, the complainant who filed such com- 8
plaint may bring an action at law or equity for 9
de novo review in the appropriate district court 10
of the United States. 11
(B) JURY TRIAL.At the request of either 12
party to an action brought under subparagraph 13
(A), such action shall be tried by the court with 14
a jury. 15
(C) STANDARDS FOR DETERMINATION. 16
The standards for determination established 17
under paragraph (4) shall apply in any action 18
under this paragraph. 19
(D) RELIEF.The court shall have jurisdic- 20
tion to grant all relief, including injunctive relief 21
and compensatory damages , that necessary to 22
make the complainant who sought de novo review 23
whole, including 24

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(i) reinstatement with the same senior- 1
ity status that the complainant would have 2
had, but for the discharge or discrimina- 3
tion; 4
(ii) the amount of back pay, with in- 5
terest; and 6
(iii) compensation for any special 7
damages sustained as a result of the dis- 8
charge or discrimination, including litiga- 9
tion costs, expert witness fees, and reason- 10
able attorneys fees. 11
(E) NOT REVIEWABLE.The decision of the 12
court shall be final without further review. 13
(7) JUDICIAL REVIEW OF FINAL ORDER. 14
(A) IN GENERAL.Unless a complainant 15
brings a de novo action under paragraph (6), 16
any person adversely affected or aggrieved by a 17
final order issued under paragraph (5) may ob- 18
tain review of the order in the United States 19
Court of Appeals for the circuit in which the vio- 20
lation, with respect to which the order was 21
issued, allegedly occurred or the circuit in which 22
the complainant resided on the date of such vio- 23
lation. 24

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(B) STATUTE OF LIMITATION .Any peti- 1
tion for review of a final order under subsection 2
shall be filed not later than 60 days after the 3
date of the issuance of the final order by the Sec- 4
retary. 5
(C) STANDARDS FOR REVIEW.The stand- 6
ards for review established under chapter 7 of 7
title 5, United States Code, shall apply in any 8
review of a final order under this paragraph. 9
(D) EFFECT OF PROCEEDINGS AS STAY. 10
The commencement of proceedings under this 11
paragraph shall not operate as a stay of the 12
final order of the Secretary under review, unless 13
so ordered by the court. 14
(E) LIMITATION ON EFFECT OF OTHER PRO- 15
CEEDINGS.Except as provided in paragraph 16
(6) and this paragraph, an order of the Sec- 17
retary with respect to which review could have 18
been obtained under subparagraph (A) shall not 19
be subject to judicial review in any criminal or 20
other civil proceeding. 21
(8) ENFORCEMENT OF ORDERS BY SECRETARY. 22
(A) IN GENERAL.Whenever any person 23
has failed to comply with an order issued under 24
paragraph (5), the Secretary may file a civil ac- 25

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H.L.C.
tion in the United States district court for the 1
district in which the violation was found to 2
occur, or in the United States district court for 3
the District of Columbia, to enforce such order. 4
(B) RELIEF. In actions brought under 5
this paragraph, the district courts shall have ju- 6
risdiction to grant all appropriate relief includ- 7
ing injunctive relief and compensatory damages. 8
(9) ENFORCEMENT OF ORDER BY AGGRIEVED 9
PARTY . 10
(A) IN GENERAL.A person on whose behalf 11
an order was issued under paragraph (5) may 12
commence a civil action against the person to 13
whom such order was issued to require compli- 14
ance with such order. 15
(B) RELIEF.The court, in issuing any 16
final order under this paragraph, may award 17
costs of litigation (including reasonable attor- 18
neys and expert witness fees) to any party 19
whenever the court determines such award is ap- 20
propriate. 21
(d) ACTION IN NATURE OF MANDAMUS.Any nondis- 22
cretionary duty imposed by this section shall be enforceable 23
in a mandamus proceeding brought under section 1361 of 24
title 28, United States Code. 25

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(e) UNENFORCEABILITY OF CERTAIN AGREEMENTS. 1
(1) NO WAIVER OF RIGHTS AND REMEDIES. 2
under paragraph (3), the rights and remedies pro- 4
vided for in this section may not be waived by any 5
agreement, policy, form, or condition of employment, 6
including by any predispute arbitration agreement. 7
(2) PREDISPUTE ARBITRATION AGREEMENTS. 8
under paragraph (3), no predispute arbitration agree- 10
ment shall be valid or enforceable and to the extent 11
the agreement requires arbitration of a dispute aris- 12
ing under this section. 13
(3) EXCEPTION.Notwithstanding paragraphs 14
(1) and (2), an arbitration provision in a collective 15
bargaining agreement shall be enforceable as to dis- 16
putes arising under subsection (a)(2) unless the Di- 17
rector determines by regulation that such provision is 18
inconsistent with the purposes of this Act. 19
date. 22

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Subtitle FTransfer of Functions 1
and Personnel; Transitional 2
Provisions 3
SEC. 161. TRANSFER OF CERTAIN FUNCTIONS. 4
(a) IN GENERAL.Except as provided in subsection 5
(b), consumer financial protection functions are transferred 6
as follows: 7
(1) BOARD OF GOVERNORS. 8
Board of Governors are transferred to the Direc- 11
tor. 12
(B) BOARD OF GOVERNORS AUTHORITY. 13
that were vested in the Board of Governors, re- 15
lating to consumer financial protection func- 16
tions, on the day before the designated transfer 17
date. 18
(2) COMPTROLLER OF THE CURRENCY. 19
Comptroller of the Currency are transferred to 22
the Director. 23
(B) COMPTROLLERS AUTHORITY.The Di- 24

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H.L.C.
vested in the Comptroller of the Currency, relat- 1
ing to consumer financial protection functions, 2
on the day before the designated transfer date. 3
(3) DIRECTOR OF THE OFFICE OF THRIFT SU- 4
PERVISION. 5
sumer financial protection functions of the Di- 7
rector of the Office of Thrift Supervision are 8
transferred to the Director. 9
(B) DIRECTORS AUTHORITY.The Director 10
shall have all powers and duties that were vested 11
in the Director of the Office of Thrift Super- 12
vision, relating to consumer financial protection 13
fer date. 15
(4) FEDERAL DEPOSIT INSURANCE CORPORA- 16
TION. 17
sumer financial protection functions of the Fed- 19
eral Deposit Insurance Corporation are trans- 20
(B) CORPORATIONS AUTHORITY.The Di- 22
vested in the Federal Deposit Insurance Corpora- 24
tion, relating to consumer financial protection 25

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fer date. 2
(5) FEDERAL TRADE COMMISSION. 3
(A) TRANSFER OF FUNCTIONS.Except as 4
provided in subparagraph (C), the consumer fi- 5
nancial protection functions of the Federal Trade 6
Commission that are contained within the enu- 7
merated consumer laws are transferred to the 8
Agency, except as provided in section 122(e). 9
(B) COMMISSIONS AUTHORITY.Except as 10
provided in subparagraph (C), the Director shall 11
have all powers and duties that were vested in 12
the Federal Trade Commission, relating to con- 13
sumer financial protection functions, on the day 14
(C) CONTINUATION OF CERTAIN COMMIS- 16
SION AUTHORITIES.Notwithstanding subpara- 17
graphs (A) and (B), the Federal Trade Commis- 18
sion shall continue to enforce the following provi- 19
sions of law and prescribe regulations under 20
such provisions: 21
(i) The Credit Repair Organizations 22
Act. 23
(ii) Section 5 of the Federal Trade 24
Commission Act. 25

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(iii) The Telemarketing and Consumer 1
Fraud and Abuse Prevention Act. 2
(6) NATIONAL CREDIT UNION ADMINISTRA- 3
TION. 4
sumer financial protection functions of the Na- 6
tional Credit Union Administration are trans- 7
(B) NATIONAL CREDIT UNION ADMINISTRA- 9
TIONS AUTHORITY.The Director shall have all 10
powers and duties that were vested in the Na- 11
tional Credit Union Administration, relating to 12
consumer financial protection functions, on the 13
(7) SECRETARY OF HOUSING AND URBAN DEVEL- 15
OPMENT. 16
sumer protection functions of the Secretary of 18
Housing and Urban Development relating to the 19
Real Estate Settlement Procedures Act of 1974 20
and the Secure and Fair Enforcement for Mort- 21
gage Licensing Act of 2008 are transferred to the 22
Director. 23
(B) SECRETARY OF HUDS AUTHORITY. 24

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H.L.C.
that were vested in the Secretary of Housing and 1
Urban Development relating to the Real Estate 2
ing Act of 2008, on the day before the designated 5
transfer date 6
(b) TRANSFERS OF FUNCTIONS SUBJECT TO BACK- 7
STOP ENFORCEMENT AUTHORITY REMAINING WITH TRANS- 8
FEROR AGENCIES.The transfers of functions in subsection 9
(a) shall not affect the authority of the agencies identified 10
in subsection (a) from initiating enforcement proceedings 11
under the circumstances described in section 122(e)(3). 12
(c) TERMINATION OF AUTHORITY OF TRANSFEROR 13
AGENCIES TO COLLECT FEES FOR CONSUMER FINANCIAL 14
PROTECTION PURPOSES.Authorities of the agencies iden- 15
tified in subsection (a) to assess and collect fees to cover 16
the cost of conducting consumer financial protection func- 17
tions shall terminate on the day before the designated trans- 18
fer date. 19
(d) CONSUMER FINANCIAL PROTECTION FUNCTIONS 20
DEFINED.For purposes of this subtitle, the term con- 21
sumer financial protection functions means research, rule- 22
making, issuance of orders or guidance, supervision, exam- 23
ination, and enforcement activities, powers, and duties re- 24
lating to the provision of consumer financial products or 25

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H.L.C.
services, including the authority to assess and collect fees 1
for those purposes, except that such term shall not include 2
any such function relating to an agencys responsibilities 3
under the Community Reinvestment Act of 1977. 4
(e) EFFECTIVE DATE.Subsections (a) and (b) shall 5
take effect on the designated transfer date. 6
SEC. 162. DESIGNATED TRANSFER DATE. 7
(a) IN GENERAL.Not later than 60 days after the 8
date of the enactment of this Act, the Secretary 9
(1) shall, in consultation with the Chairman of 10
Management and Budget, designate a single calendar 18
date for the transfer of functions to the Director under 19
section 161; and 20
(2) shall publish notice of that designation in the 21
(b) CHANGING DESIGNATION.The Secretary 23
(1) may, in consultation with the Chairman of 24

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Management and Budget, change the date designated 7
under subsection (a); and 8
(2) shall publish notice of any changed designa- 9
tion in the Federal Register. 10
(c) PERMISSIBLE DATES. 11
(1) IN GENERAL.Except as provided in para- 12
graph (2), any date designated under this section 13
shall be not earlier than 180 days nor later than 18 14
(2) EXTENSION OF TIME.The Secretary may 16
designate a date that is later than 18 months after the 17
date of the enactment of this Act if the Secretary 18
transmits to appropriate committees of Congress 19
(A) a written determination that orderly 20
implementation of this title is not feasible on the 21
date that is 18 months after the date of the en- 22
actment of this Act; 23

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(B) an explanation of why an extension is 1
necessary for the orderly implementation of this 2
title; and 3
(C) a description of the steps that will be 4
taken to effect an orderly and timely implemen- 5
tation of this title within the extended time pe- 6
riod. 7
(3) EXTENSION LIMITED.In no case shall any 8
date designated under this section be later than 24 9
SEC. 163. SAVINGS PROVISIONS. 11
(a) BOARD OF GOVERNORS. 12
the United States, the Board of Governors (or any 16
Federal reserve bank), or any other person that 17
tion of the Board of Governors transferred to the 20
Director by this title; and 21
transfer date. 23

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H.L.C.
Board of Governors (or any Federal reserve bank) be- 1
fore the designated transfer date with respect to any 2
consumer financial protection function of the Board 3
of Governors (or any Federal reserve bank) trans- 4
ferred to the Director by this title, except that the Di- 5
rector shall be substituted for the Board of Governors 6
(or Federal reserve bank) as a party to any such pro- 7
(b) FEDERAL DEPOSIT INSURANCE CORPORATION. 9
the United States, the Federal Deposit Insurance Cor- 13
poration, the Board of Directors of that Corporation, 14
or any other person, that 15
tion of the Federal Deposit Insurance Corpora- 18
transfer date. 21
Federal Deposit Insurance Corporation (or the Board 24
of Directors of that Corporation) before the designated 25

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H.L.C.
protection function of the Federal Deposit Insurance 2
Corporation transferred to the Director by this title, 3
Federal Deposit Insurance Corporation (or Board of 5
Directors) as a party to any such proceeding as of the 6
(c) FEDERAL TRADE COMMISSION. 8
the United States, the Federal Trade Commission, or 12
any other person, that 13
tion of the Federal Trade Commission trans- 16
transfer date. 19
Federal Trade Commission before the designated 22
protection function of the Federal Trade Commission 24
transferred to the Director by this title, except that 25

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H.L.C.
the Director shall be substituted for the Federal Trade 1
Commission as a party to any such proceeding as of 2
(d) NATIONAL CREDIT UNION ADMINISTRATION. 4
the United States, the National Credit Union Admin- 8
istration, the National Credit Union Administration 9
Board, or any other person, that 10
tion of the National Credit Union Administra- 13
transfer date. 16
National Credit Union Administration (or the Na- 19
tional Credit Union Administration Board) before the 20
designated transfer date with respect to any consumer 21
financial protection function of the National Credit 22
Union Administration transferred to the Director by 23
this title, except that the Director shall be substituted 24
for the National Credit Union Administration (or 25

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H.L.C.
National Credit Union Administration Board) as a 1
transfer date. 3
(e) COMPTROLLER OF THE CURRENCY. 4
the United States, the Comptroller of the Currency, 8
the Office of the Comptroller of the Currency, or any 9
tion of the Comptroller of the Currency trans- 13
transfer date. 16
Comptroller of the Currency (or the Office of the 19
Comptroller of the Currency) with respect to any con- 20
sumer financial protection function of the Comp- 21
troller of the Currency transferred to the Director by 22
this title before the designated transfer date, except 23
that the Director shall be substituted for the Comp- 24
troller of the Currency (or the Office of the Comp- 25

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H.L.C.
troller of the Currency) as a party to any such pro- 1
(f) DIRECTOR OF THE OFFICE OF THRIFT SUPER- 3
VISION. 4
the United States, the Director of the Office of Thrift 8
Supervision, the Office of Thrift Supervision, or any 9
tion of the Director of the Office of Thrift Super- 13
vision transferred to the Director by this title; 14
and 15
Director of the Office of Thrift Supervision (or the Of- 20
fice of Thrift Supervision) with respect to any con- 21
sumer financial protection function of the Director of 22
the Office of Thrift Supervision transferred to the Di- 23
rector by this title before the designated transfer date, 24

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H.L.C.
Director (or the Office of Thrift Supervision) as a 1
transfer date. 3
(g) SECRETARY OF HOUSING AND URBAN DEVELOP- 4
MENT. 5
the United States, the Secretary of Housing and 9
Urban Development, the Department of Housing and 10
Urban Development, or any other person, that 11
ing to any function of the Secretary of Housing 13
and Urban Development under the Real Estate 14
ing Act of 2008 transferred to the Director by 17
this title; and 18
Secretary of Housing and Urban Development (or the 23
Department of Housing and Urban Development) 24
with respect to any consumer financial protection 25

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function of the Secretary of Housing and Urban De- 1
velopment transferred to the Director by this title be- 2
fore the designated transfer date, except that the Di- 3
rector shall be substituted for the Secretary of Hous- 4
ing and Urban Development (or such Department) as 5
a party to any such proceeding as of the designated 6
transfer date. 7
(h) CONTINUATION OF EXISTING ORDERS, REGULA- 8
TIONS, DETERMINATIONS, AGREEMENTS, AND RESOLU- 9
TIONS.All orders, resolutions, determinations, agreements, 10
and regulations that have been issued, made, prescribed, or 11
allowed to become effective by the Board of Governors (or 12
any Federal reserve bank), the Federal Deposit Insurance 13
Corporation, the Federal Trade Commission, the National 14
Credit Union Administration, the Comptroller of the Cur- 15
rency, the Director of the Office of Thrift Supervision, the 16
Secretary of Housing and Urban Development, or by a 17
court of competent jurisdiction, in the performance of con- 18
sumer financial protection functions that are transferred by 19
this title and that are in effect on the day before the des- 20
ignated transfer date, shall continue in effect according to 21
the terms of those orders, resolutions, determinations, agree- 22
ments, and regulations, and shall be enforceable by or 23
against the Director until modified, terminated, set aside, 24
or superseded in accordance with applicable law by the Di- 25

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H.L.C.
rector, by any court of competent jurisdiction, or by oper- 1
ation of law. 2
(i) IDENTIFICATION OF REGULATIONS CONTINUED. 3
Not later than the designated transfer date, the Director 4
(1) shall, after consultation with the Chairman 5
of the Board of Governors, the Chairperson of the 6
Federal Deposit Insurance Corporation, the Chair- 7
man of the Federal Trade Commission, the Chairman 8
of the National Credit Union Administration Board, 9
Office of Thrift Supervision, and the Secretary of 11
Housing and Urban Development identify the regula- 12
tions continued under subsection (g) that will be en- 13
forced by the Director; and 14
(2) shall publish a list of such regulations in the 15
(j) STATUS OF REGULATIONS PROPOSED OR NOT YET 17
EFFECTIVE. 18
(1) PROPOSED REGULATIONS.Any proposed 19
regulation of the Board of Governors, the Federal De- 20
posit Insurance Corporation, the Federal Trade Com- 21
mission, the National Credit Union Administration, 22
Office of Thrift Supervision, or the Secretary of Hous- 24
ing and Urban Development which that agency, in 25

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performing consumer financial protection functions 1
transferred by this title, has proposed before the des- 2
ignated transfer date but has not published as a final 3
regulation before that date, shall be deemed to be a 4
proposed regulation of the Director. 5
(2) REGULATIONS NOT YET EFFECTIVE.Any 6
interim or final regulation of Board of Governors, the 7
Federal Deposit Insurance Corporation, the Federal 8
Trade Commission, the National Credit Union Ad- 9
ministration, the Comptroller of the Currency, the Di- 10
rector of the Office of Thrift Supervision, or the Sec- 11
retary of Housing and Urban Development which 12
that agency, in performing consumer financial protec- 13
tion functions transferred by this title, has published 14
before the designated transfer date but which has not 15
become effective before that date, shall take effect as a 16
regulation of the Director according to its terms. 17
SEC. 164. TRANSFER OF CERTAIN PERSONNEL. 18
(a) IN GENERAL. 19
(1) CERTAIN FEDERAL RESERVE SYSTEM EM- 20
PLOYEES TRANSFERRED. 21
FER.The Director and the Board of Governors 23
shall 24

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H.L.C.
ployees of the Board necessary to perform or 2
functions of the Board of Governors that are 4
transferred to the Director by this title; and 5
ployees of the Board of Governors for trans- 8
fer to the Agency in a manner that the Di- 9
rector and the Board of Governors, in their 10
sole discretion, deem equitable. 11
FERRED.All employees of the Board of Gov- 13
ernors identified under subparagraph (A)(ii) 14
shall be transferred to the Agency for employ- 15
ment. 16
(C) FEDERAL RESERVE BANK EMPLOY- 17
EES.Employees of any Federal reserve bank 18
who, on the day before the designated transfer 19
date, are performing consumer financial protec- 20
tion functions on behalf of the Board of Gov- 21
ernors shall be treated as employees of the Board 22
of Governors for purposes of subparagraphs (A) 23
and (B). 24
(2) CERTAIN FDIC EMPLOYEES TRANSFERRED. 25

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H.L.C.
FER.The Director and the Board of Directors 2
of the Federal Deposit Insurance Corporation 3
shall 4
ployees of that Corporation necessary to 6
perform or support the consumer financial 7
protection functions of the Corporation that 8
are transferred to the Director by this title; 9
and 10
ployees of the Corporation for transfer to the 13
the Board of Directors of the Corporation, 15
in their discretion, deem equitable. 16
FERRED.All employees of the Corporation 18
identified under subparagraph (A)(ii) shall be 19
transferred to the Agency for employment. 20
(3) CERTAIN NCUA EMPLOYEES TRANSFERRED. 21
FER.The Director and the National Credit 23
Union Administration Board shall 24

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H.L.C.
ministration necessary to perform or sup- 3
port the consumer financial protection func- 4
tions of the National Credit Union Admin- 5
istration that are transferred to the Director 6
by this title; and 7
ministration for transfer to the Agency in a 11
manner that the Director and the National 12
Credit Union Administration Board, in 13
their discretion, deem equitable. 14
FERRED.All employees of the National Credit 16
Union Administration identified under subpara- 17
graph (A)(ii) shall be transferred to the Agency 18
for employment. 19
(4) CERTAIN HUD EMPLOYEES TRANSFERRED. 20
FER.The Director and the Secretary of Hous- 22
ing and Urban Development shall 23

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H.L.C.
Urban Development necessary to perform or 1
functions of the Secretary of Housing and 3
Urban Development that are transferred to 4
the Director by this title; and 5
Urban Development for transfer to the 9
the Secretary of Housing and Urban Devel- 11
opment, in their discretion, deem equitable. 12
FERRED.All employees of the Department of 14
Housing and Urban Development identified 15
under subparagraph (A)(ii) shall be transferred 16
to the Agency for employment. 17
(5) APPOINTMENT AUTHORITY FOR EXCEPTED 18
SERVICE AND SENIOR EXECUTIVE SERVICE TRANS- 19
FERRED. 20
(A) IN GENERAL.In the case of employees 21
occupying positions in the excepted service or the 22
Senior Executive Service, any appointment au- 23
thority established pursuant to law or regula- 24
tions of the Director of the Office of Personnel 25

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H.L.C.
Management for filling such positions shall be 1
transferred, subject to subparagraph (B). 2
(B) DECLINING TRANSFERS ALLOWED.An 3
agency or entity may decline to make a transfer 4
of authority under subparagraph (A) (and the 5
employees appointed pursuant to such subpara- 6
graph) to the extent that such authority relates 7
to positions excepted from the competitive service 8
because of their confidential, policy-making, pol- 9
icy-determining, or policy-advocating character, 10
and non-career positions in the Senior Executive 11
Service (within the meaning of section 12
3132(a)(7) of title 5, United States Code). 13
(b) TIMING OF TRANSFERS AND POSITION ASSIGN- 14
MENTS.Each employee to be transferred under this section 15
shall 16
(1) be transferred not later than 90 days after 17
the designated transfer date; and 18
(2) receive notice of such employees position as- 19
signment not later than 120 days after the effective 20
date of the employees transfer. 21
(c) TRANSFER OF FUNCTION. 22
provision of law, the transfer of employees shall be 24

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deemed a transfer of functions for the purpose of sec- 1
(2) PRIORITY OF THIS TITLE.If any provisions 3
of this title conflict with any protection provided to 4
transferred employees under section 3503 of title 5, 5
United States Code, the provisions of this title shall 6
control. 7
(d) EQUAL STATUS AND TENURE POSITIONS. 8
(1) EMPLOYEES TRANSFERRED FROM FDIC, FTC, 9
HUD, NCUA, OCC, AND OTS.Each employee trans- 10
ferred from the Federal Deposit Insurance Corpora- 11
tion, the Federal Trade Commission, the Department 12
of Housing and Urban Development, the National 13
Credit Union Administration, the Office of the Comp- 14
troller of the Currency, or the Office of Thrift Super- 15
vision shall be placed in a position at the Agency 16
with the same status and tenure as he or she held on 17
the day before the designated transfer date. 18
(2) EMPLOYEES TRANSFERRED FROM THE FED- 19
ERAL RESERVE SYSTEM. 20
(A) COMPARABILITY.Each employee 21
transferred from the Board of Governors or from 22
a Federal reserve bank shall be placed in a posi- 23
tion with the same status and tenure as that of 24
employees transferring to the Agency from the 25

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H.L.C.
Office of the Comptroller of the Currency who 1
perform similar functions and have similar peri- 2
ods of service. 3
(B) SERVICE PERIODS CREDITED.For 4
purposes of this paragraph, periods of service 5
with the Board of Governors or a Federal reserve 6
bank shall be credited as periods of service with 7
a Federal agency. 8
(e) ADDITIONAL CERTIFICATION REQUIREMENTS LIM- 9
ITED.Examiners transferred to the Agency shall not be 10
subject to any additional certification requirements before 11
being placed in a comparable examiners position at the 12
Agency examining the same types of institutions as the 13
transferred examiners examined before such examiners were 14
transferred. 15
(f) PERSONNEL ACTIONS LIMITED. 16
paragraph (2), each transferred employee holding a 18
permanent position on the day before the designated 19
transfer date shall not, during the 5-year period be- 20
ginning on the designated transfer date, be involun- 21
tarily separated, or involuntarily reassigned outside 22
such transferred employees local locality pay area as 23
defined by the Director of the Office of Personnel 24
Management. 25

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construed as limiting the right of the Director to 2
(A) separate an employee for cause or for 3
unacceptable performance; 4
(B) terminate an appointment to a position 5
excepted from the competitive service because of 6
its confidential policy-making, policy-deter- 7
mining, or policy-advocating character; or 8
(C) reassign a supervisory employee outside 9
such employees locality pay area as defined by 10
the Director of the Office of Personnel Manage- 11
ment when the Director determines that the reas- 12
signment is necessary for the efficient operation 13
of the Agency. 14
(g) PAY. 15
paragraph (2), each transferred employee shall, dur- 17
ing the 1-year period beginning on the designated 18
transfer date, receive pay at a rate not less than the 19
basic rate of pay (including any geographic differen- 20
tial) that the employee received during the 1-year pe- 21
riod immediately before the transfer. 22
construed as limiting the right of the Agency to re- 24
duce the rate of basic pay of a transferred employee 25

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H.L.C.
(A) for cause; 1
(B) for unacceptable performance; or 2
(C) with the employees consent. 3
(3) PROTECTION ONLY WHILE EMPLOYED. 4
Paragraph (1) applies to a transferred employee only 5
while that employee remains employed by the Agency. 6
(4) PAY INCREASES PERMITTED.Paragraph (1) 7
shall not be construed as limiting the authority of the 8
Agency to increase a transferred employees pay. 9
(h) REORGANIZATION. 10
(1) BETWEEN 1ST AND 3RD YEAR. 11
mines, during the period beginning 1 year after 13
the designated transfer date and ending 3 years 14
after the designated transfer date, that a reorga- 15
nization of the staff of the Agency is required 16
(i) that reorganization shall be deemed 17
a major reorganization for purposes of af- 18
fording affected employees retirement under 19
section 8336(d)(2) or 8414(b)(1)(B) of title 20
5, United States Code; 21
(ii) before the reorganization occurs, 22
all employees in the same locality pay area 23
as defined by the Director of the Office of 24

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Personnel Management shall be placed in a 1
uniform position classification system; and 2
(iii) any resulting reduction in force 3
shall be governed by the provisions of chap- 4
ter 35 of title 5, United States Code, except 5
that the Agency shall 6
(I) establish competitive areas (as 7
that term is defined in regulations 8
Personnel Management) to include at a 10
minimum all employees in the same lo- 11
cality pay area as defined by the Office 12
of Personnel Management; 13
(II) establish competitive levels 14
(as that term is defined in regulations 15
Personnel Management) without regard 17
to whether the particular employees 18
have been appointed to positions in the 19
competitive service or the excepted serv- 20
ice; and 21
(III) afford employees appointed 22
to positions in the excepted service 23
(other than to a position excepted from 24
the competitive service because of its 25

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H.L.C.
confidential policy-making, policy-de- 1
termining, or policy-advocating char- 2
acter) the same assignment rights to 3
positions within the Agency as employ- 4
ees appointed to positions in the com- 5
petitive service. 6
(2) AFTER 3RD YEAR. 15
mines, at any time after the 3-year period begin- 17
ning on the designated transfer date, that a reor- 18
ganization of the staff of the Agency is required, 19
any resulting reduction in force shall be governed 20
by the provisions of chapter 35 of title 5, United 21
States Code, except that the Agency shall estab- 22
lish competitive levels (as that term is defined in 23
regulations issued by the Office of Personnel 24
Management) without regard to types of ap- 25

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H.L.C.
pointment held by particular employees trans- 1
ferred under this section. 2
(i) BENEFITS. 11
(1) RETIREMENT BENEFITS FOR TRANSFERRED 12
EMPLOYEES. 13
(A) IN GENERAL. 14
(i) CONTINUATION OF EXISTING RE- 15
TIREMENT PLAN.Except as provided in 16
subparagraph (B), each transferred em- 17
ployee shall remain enrolled in such em- 18
ployees existing retirement plan as long as 19
the employee remains employed by the 20
Agency. 21
Director shall pay any employer contribu- 23
tions to the existing retirement plan of each 24

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H.L.C.
transferred employee as required under that 1
plan. 2
(B) OPTION FOR EMPLOYEES TRANSFERRED 3
FROM FEDERAL RESERVE SYSTEM TO BE SUB- 4
JECT TO FEDERAL EMPLOYEE RETIREMENT PRO- 5
GRAM. 6
(i) ELECTION.Any transferred em- 7
ployee who was enrolled in a Federal Re- 8
serve System retirement plan on the day be- 9
fore the date of the employees transfer to 10
the Agency may, during the period begin- 11
ning 6 months after the designated transfer 12
date and ending 1 year after the designated 13
transfer date, elect to be subject to the Fed- 14
eral employee retirement program. 15
(ii) EFFECTIVE DATE OF COVERAGE. 16
For any employee making an election under 17
clause (i), coverage by the Federal employee 18
retirement program shall begin 1 year after 19
(C) AGENCY PARTICIPATION IN FEDERAL 21
RESERVE SYSTEM RETIREMENT PLAN. 22
(i) SEPARATE ACCOUNT IN FEDERAL 23
RESERVE SYSTEM RETIREMENT PLAN ES- 24
TABLISHED.A separate account in the 25

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H.L.C.
Federal Reserve System retirement plan 1
shall be established for Agency employees 2
who do not make the election under sub- 3
paragraph (B). 4
(ii) FUNDS ATTRIBUTABLE TO TRANS- 5
FERRED EMPLOYEES REMAINING IN FED- 6
ERAL RESERVE SYSTEM RETIREMENT PLAN 7
TRANSFERRED.The proportionate share of 8
funds in the Federal Reserve System retire- 9
ment plan, including the proportionate 10
share of any funding surplus in that plan, 11
attributable to a transferred employee who 12
does not make the election under subpara- 13
graph (B), shall be transferred to the ac- 14
count established under clause (i). 15
(iii) EMPLOYER CONTRIBUTIONS DE- 16
POSITED.The Director shall deposit into 17
the account established under clause (i) the 18
employer contributions that the Agency 19
makes on behalf of employees who do not 20
make the election under subparagraph (B). 21
(iv) ACCOUNT ADMINISTRATION.The 22
Director shall administer the account estab- 23
lished under clause (i) as a participating 24

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H.L.C.
employer in the Federal Reserve System re- 1
tirement plan. 2
(D) DEFINITIONS.For purposes of this 3
paragraph, the following definitions shall apply: 4
(i) EXISTING RETIREMENT PLAN.The 5
term existing retirement plan means, 6
with respect to any employee transferred 7
under this section, the particular retirement 8
plan (including the Financial Institutions 9
Retirement Fund) and any associated thrift 10
savings plan of the agency or Federal re- 11
serve bank from which the employee was 12
transferred, which the employee was en- 13
rolled in on the day before the designated 14
transfer date. 15
(ii) FEDERAL EMPLOYEE RETIREMENT 16
PLAN.The term Federal employee retire- 17
ment program means the retirement pro- 18
gram for Federal employees established by 19
chapters 83 and 84 of title 5, United States 20
Code. 21
(2) BENEFITS OTHER THAN RETIREMENT BENE- 22
FITS FOR TRANSFERRED EMPLOYEES. 23
(A) DURING 1ST YEAR. 24

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H.L.C.
(i) EXISTING PLANS CONTINUE.Each 1
transferred employee may, for 1 year after 2
the designated transfer date, retain member- 3
ship in any other employee benefit program 4
of the agency or bank from which the em- 5
ployee transferred, including a dental, vi- 6
sion, long-term care, or life insurance pro- 7
gram, to which the employee belonged on the 8
Director shall reimburse the agency or bank 11
from which an employee was transferred for 12
any cost incurred by that agency or bank in 13
continuing to extend coverage in the benefit 14
program to the employee as required under 15
that program or negotiated agreements. 16
(B) DENTAL, VISION, OR LIFE INSURANCE 17
AFTER 1ST YEAR.If, after the 1-year period be- 18
ginning on the designated transfer date, the Di- 19
rector decides not to continue participation in 20
any dental, vision, or life insurance program of 21
an agency or bank from which employees trans- 22
ferred, a transferred employee who is a member 23
of such a program may, before the Directors de- 24

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H.L.C.
cision takes effect, elect to enroll, without regard 1
to any regularly scheduled open season, in 2
(i) the enhanced dental benefits estab- 3
lished by chapter 89A of title 5, United 4
States Code; 5
(ii) the enhanced vision benefits estab- 6
lished by chapter 89B of title 5, United 7
States Code; and 8
(iii) the Federal Employees Group Life 9
Insurance Program established by chapter 10
87 of title 5, United States Code, without 11
regard to any requirement of insurability. 12
(C) LONG-TERM CARE INSURANCE AFTER 13
1ST YEAR.If, after the 1-year period beginning 14
on the designated transfer date, the Director de- 15
cides not to continue participation in any long- 16
term care insurance program of an agency or 17
bank from which employees transferred, a trans- 18
ferred employee who is a member of such a pro- 19
gram may, before the Directors decision takes ef- 20
fect, elect to apply for coverage under the Federal 21
Long Term Care Insurance Program established 22
by chapter 90 of title 5, United States Code, 23
under the underwriting requirements applicable 24

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H.L.C.
to a new active workforce member (as defined in 1
Part 875, title 5, Code of Federal Regulations). 2
(D) EMPLOYEES CONTRIBUTION.An indi- 3
vidual enrolled in the Federal Employees Health 4
Benefits program shall pay any employee con- 5
tribution required by the plan. 6
(E) ADDITIONAL FUNDING.The Director 7
shall transfer to the Federal Employees Health 8
Benefits Fund established under section 8909 of 9
title 5, United States Code, an amount deter- 10
mined by the Director of the Office of Personnel 11
Management, after consultation with the Direc- 12
tor and the Director of the Office of Management 13
and Budget, to be necessary to reimburse the 14
Fund for the cost to the Fund of providing bene- 15
fits under this subparagraph. 16
(F) CREDIT FOR TIME ENROLLED IN OTHER 17
PLANS.For employees transferred under this 18
section, enrollment in a health benefits plan ad- 19
ministered by the Comptroller of the Currency, 20
the Director of the Office of Thrift Supervision, 21
the Federal Deposit Insurance Corporation, the 22
National Credit Union Administration, the 23
Board of Governors, the Secretary of Housing 24
and Urban Development, or a Federal reserve 25

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H.L.C.
bank, immediately before enrollment in a health 1
benefits plan under chapter 89 of title 5, United 2
States Code, shall be considered as enrollment in 3
a health benefits plan under that chapter for 4
purposes of section 8905(b)(1)(A) of title 5, 5
(G) SPECIAL PROVISIONS TO ENSURE CON- 7
TINUATION OF LIFE INSURANCE BENEFITS. 8
(i) IN GENERAL.An annuitant (as 9
defined in section 8901(3) of title 5, United 10
States Code) who is enrolled in a life insur- 11
ance plan administered by the Board of 12
Governors of the Federal Reserve System, 13
the Federal Deposit Insurance Corporation, 14
the Federal Trade Commission, the Sec- 15
retary of Housing and Urban Development, 16
the National Credit Union Administration, 17
the Comptroller of the Currency, or the Di- 18
rector of the Office of Thrift Supervision on 19
the day before the designated transfer date 20
shall be eligible for coverage by a life insur- 21
ance plan under sections 8706(b), 8714a, 22
8714b, and 8714c of title 5, United States 23
Code, or in a life insurance plan established 24
by the Agency, without regard to any regu- 25

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H.L.C.
larly scheduled open season and require- 1
ment of insurability. 2
(ii) EMPLOYEES CONTRIBUTION.An 3
individual enrolled in a life insurance plan 4
under this clause shall pay any employee 5
contribution required by the plan. 6
(iii) ADDITIONAL FUNDING.The Di- 7
rector shall transfer to the Employees Life 8
Insurance Fund established under section 9
8714 of title 5, United States Code, an 10
amount determined by the Director of the 11
Office of Personnel Management, after con- 12
sultation with the Director and the Director 13
of the Office of Management and Budget, to 14
be necessary to reimburse the Fund for the 15
cost to the Fund of providing benefits under 16
this subparagraph not otherwise paid for by 17
the employee under clause (ii). 18
(iv) CREDIT FOR TIME ENROLLED IN 19
OTHER PLANS.For employees transferred 20
under this section, enrollment in a life in- 21
surance plan administered by the Board of 22
Governors, the Federal Deposit Insurance 23
Corporation, the Federal Trade Commis- 24
sion, the Secretary of Housing and Urban 25

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H.L.C.
Development, the National Credit Union 1
Administration, the Comptroller of the Cur- 2
rency, the Director of the Office of Thrift 3
Supervision, or a Federal reserve bank im- 4
mediately before enrollment in a life insur- 5
ance plan under chapter 87 of title 5, 6
United States Code, shall be considered as 7
enrollment in a life insurance plan under 8
that chapter for purposes of section 9
8706(b)(1)(A) of title 5, United States Code. 10
(j) IMPLEMENTATION OF UNIFORM PAY AND CLASSI- 11
FICATION SYSTEM.Not later than 2 years after the des- 12
ignated transfer date, the Director shall implement a uni- 13
form pay and classification system for all transferred em- 14
ployees. 15
(k) EQUITABLE TREATMENT.In administering the 16
provisions of this section, the Director 17
(1) shall take no action that would unfairly dis- 18
advantage transferred employees relative to each other 19
based on their prior employment by the Board of 20
Governors, the Federal Deposit Insurance Corpora- 21
tion, the Federal Trade Commission, the Secretary of 22
Housing and Urban Development, the National Cred- 23
it Union Administration, the Office of the Comp- 24
troller of the Currency, the Office of Thrift Super- 25

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H.L.C.
vision, a Federal reserve bank, a Federal home loan 1
bank, or a joint office of the Federal home loan banks; 2
and 3
(2) may take such action as is appropriate in 4
individual cases so that employees transferred under 5
this section receive equitable treatment, with respect 6
to those employees status, tenure, pay, benefits (other 7
than benefits under programs administered by the Of- 8
fice of Personnel Management), and accrued leave or 9
vacation time, for prior periods of service with any 10
Federal agency, including the Board of Governors of 11
the Federal Reserve System, the Federal Deposit In- 12
surance Corporation, the Federal Trade Commission, 13
the Department of Housing and Urban Development, 14
the National Credit Union Administration, the Office 15
of the Comptroller of the Currency, the Office of 16
Thrift Supervision, a Federal reserve bank, a Federal 17
home loan bank, or a joint office of the Federal home 18
loan banks. 19
(l) IMPLEMENTATION.In implementing the provi- 20
sions of this section, the Director shall work with the Direc- 21
tor of the Office of Personnel Management and other entities 22
with expertise in matters related to employment to ensure 23
a fair and orderly transition for affected employees. 24

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H.L.C.
SEC. 165. INCIDENTAL TRANSFERS. 1
(a) INCIDENTAL TRANSFERS AUTHORIZED.The Di- 2
rector of the Office of Management and Budget, in consulta- 3
tion with the Secretary, shall make such additional inci- 4
dental transfers and dispositions of assets and liabilities 5
held, used, arising from, available, or to be made available, 6
in connection with the functions transferred by this title, 7
as the Director may determine necessary to accomplish the 8
purposes of this title. 9
(b) SUNSET.The authority provided in this section 10
shall terminate 5 years after the date of the enactment of 11
this Act. 12
SEC. 166. INTERIM AUTHORITY OF THE SECRETARY. 13
(a) IN GENERAL.The Secretary is authorized to per- 14
form the functions of the Director under this subtitle until 15
the appointment of the Director is confirmed by the Senate 16
in accordance with section 112. 17
(b) INTERIM ADMINISTRATIVE SERVICES BY THE DE- 18
PARTMENT OF THE TREASURY.The Secretary of the 19
Treasury may provide administrative services necessary to 20
support the Agency before the designated transfer date. 21
(c) INTERIM FUNDING FOR THE DEPARTMENT OF THE 22
TREASURY.For the purposes of carrying out the authori- 23
ties granted in this section, there are appropriated to the 24
Secretary of the Treasury such sums as are necessary. Not- 25
withstanding any other provision of law, such amounts 26

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H.L.C.
shall be subject to apportionment under section 1517 of title 1
31, United States Code, and restrictions that generally 2
apply to the use of appropriated funds in title 31, United 3
States Code, and other laws. 4
Subtitle GRegulatory 5
Improvements 6
SEC. 171. COLLECTION OF DEPOSIT ACCOUNT DATA. 7
(a) PURPOSE.The purpose of this section is to pro- 8
mote awareness and understanding of the access of individ- 9
uals and communities to financial services, and to identify 10
business and community development needs and opportuni- 11
ties. 12
(b) IN GENERAL. 13
(1) RECORDS REQUIRED.For each branch, 14
automated teller machine at which deposits are ac- 15
cepted, and other deposit taking service facility with 16
respect to any financial institution, the financial in- 17
stitution shall maintain records of the number and 18
dollar amounts of deposit accounts of customers. 19
(2) GEO-CODED ADDRESSES OF DEPOSITORS. 20
The customers addresses maintained pursuant to 21
paragraph (1) shall be geo-coded so that data shall be 22
collected regarding the census tracts of the residence 23
or business location of the customers. 24

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(3) IDENTIFICATION OF DEPOSITOR TYPE.In 1
maintaining records on any deposit account under 2
this section, the financial institution shall also record 3
whether the deposit account is for a residential or 4
commercial customer. 5
(4) PUBLIC AVAILABILITY. 6
(A) IN GENERAL.The following informa- 7
tion shall be publicly available on an annual 8
basis 9
(i) the address and census tracts of 10
each branch, automated teller machine at 11
which deposits are accepted, and other de- 12
posit taking service facility with respect to 13
any financial institution; 14
(ii) the type of deposit account includ- 15
ing whether the account was a checking or 16
savings account; and 17
(iii) data on the number and dollar 18
amounts of the accounts, presented by cen- 19
sus tract location of the residential and 20
commercial customers. 21
(iv) any other data deemed appro- 22
priate by the Director. 23
(B) PROTECTION OF IDENTITY.In the 24
publicly available data, any personally identifi- 25

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able data element shall be removed so as to pro- 1
tect the identities of the commercial and residen- 2
tial customers. 3
(c) AVAILABILITY OF INFORMATION. 4
(1) SUBMISSION TO AGENCIES.The data re- 5
annually to the Agency, or to a Federal banking 8
agency, in accordance with regulations prescribed by 9
the Director. 10
(2) AVAILABILITY OF INFORMATION.Informa- 11
tion compiled and maintained under this section 12
shall be retained for not less than 3 years after the 13
date of preparation and shall be made available to the 14
public, upon request, in the form required under regu- 15
lations prescribed by the Director. 16
(d) AGENCY USE.The Director 17
(1) shall assess the distribution of residential 18
and commercial accounts at such financial institution 19
across income and minority level of census tracts; and 20
(2) may use the data for any other purpose as 21
permitted by law. 22
(e) REGULATIONS AND GUIDANCE. 23
such regulations and issue guidance as may be nec- 25

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essary to carry out, enforce, and compile data pursu- 1
ant to this section. 2
(2) DATA COMPILATION REGULATIONS.The Di- 3
rector shall prescribe regulations regarding the provi- 4
sion of data compiled under this section to the Fed- 5
eral banking agencies to carry out the purposes of this 6
section and shall issue guidance to financial institu- 7
tions regarding measures to facilitate compliance 8
with the this section and the requirements of regula- 9
tions prescribed under this section. 10
means a Federal credit union or a State-chartered 16
credit union (as such terms are defined in section 101 17
of the Federal Credit Union Act). 18
(3) DEPOSIT ACCOUNT.The term deposit ac- 19
count includes any checking account, savings ac- 20
count, credit union share account, and other type of 21
account as defined by the Director. 22
Director of the Agency. 24

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ernors of the Federal Reserve System, the head of the 3
agency responsible for chartering and regulating na- 4
tional banks, the Director of the Office of Thrift Su- 5
pervision, the Federal Deposit Insurance Corporation, 6
and the National Credit Union Administration; and 7
the term Federal banking agencies means all of 8
those agencies. 9
cial institution 11
(A) has the meaning given to the term in- 12
sured depository institution in section 3(c)(2) 13
(B) includes any credit union. 15
(g) EFFECTIVE DATE.This section shall take effect 16
SEC. 172. SMALL BUSINESS DATA COLLECTION. 18
(a) IN GENERAL.The Equal Credit Opportunity Act 19
(15 U.S.C. 1691 et seq.) is amended by inserting after sec- 20
tion 704A the following new section: 21
704B. Small business loan data collection 22
(a) PURPOSE.The purpose of this section is to fa- 23
cilitate enforcement of fair lending laws and enable commu- 24
nities, governmental entities, and creditors to identify busi- 25

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ness and community development needs and opportunities 1
of women- and minority-owned small businesses. 2
(b) IN GENERAL.Subject to the requirements of this 3
section, in the case of any application to a financial insti- 4
tution for credit for a small business, the financial institu- 5
tion shall 6
(1) inquire whether the business is a women- or 7
minority-owned business, without regard to whether 8
such application is received in person, by mail, by 9
telephone, by electronic mail or other form of elec- 10
tronic transmission, or by any other means and 11
whether or not such application is in response to a 12
solicitation by the financial institution; and 13
(2) maintain a record of the responses to such 14
inquiry separate from the application and accom- 15
panying information. 16
(c) RIGHT TO REFUSE.Any applicant for credit 17
may refuse to provide any information requested pursuant 18
to subsection (b) in connection with any application for 19
credit. 20
(d) NO ACCESS BY UNDERWRITERS. 21
(1) IN GENERAL.Where feasible, no loan un- 22
derwriter or other officer or employee of a financial 23
institution, or any affiliate of a financial institution, 24
involved in making any determination concerning an 25

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application for credit shall have access to any infor- 1
mation provided by the applicant pursuant to a re- 2
quest under subsection (b) in connection with such 3
application. 4
(2) EXCEPTION.If a financial institution de- 5
termines that loan underwriter or other officer or em- 6
ployee of a financial institution, or any affiliate of a 7
financial institution, involved in making any deter- 8
mination concerning an application for credit should 9
have access to any information provided by the appli- 10
cant pursuant to a request under subsection (b), the 11
financial institution will provide notice to the appli- 12
cant of the access of the underwriter to this informa- 13
tion, along with notice that the financial institution 14
may not discriminate on this basis of this informa- 15
tion. 16
(e) FORM AND MANNER OF INFORMATION. 17
(1) IN GENERAL.Each financial institution 18
shall compile and maintain, in accordance with regu- 19
lations of the Agency, a record of the information pro- 20
vided by any loan applicant pursuant to a request 21
under subsection (b). 22
(2) ITEMIZATION.Information compiled and 23
maintained under paragraph (1) shall also be 24

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itemized in order to clearly and conspicuously dis- 1
close the following: 2
(A) The number of the application and the 3
date the application was received. 4
(B) The type and purpose of the loan or 5
other credit being applied for. 6
(C) The amount of the credit or credit 7
limit applied for and the amount of the credit 8
transaction or the credit limit approved for such 9
applicant. 10
(D) The type of action taken with respect 11
to such application and the date of such action. 12
(E) The census tract in which is located 13
the principal place of business of the small busi- 14
ness loan applicant. 15
(F) The gross annual revenue of the busi- 16
ness in the last fiscal year of the small business 17
loan applicant preceding the date of the applica- 18
tion. 19
(G) The race, sex, and ethnicity of the 20
principal owners of the business. 21
(H) Any additional data the Agency deter- 22
mines would aid in fulfilling the purposes of this 23
section. 24

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(3) INCLUSION OF PERSONALLY IDENTIFIABLE 1
INFORMATION PROHIBITED.In compiling and main- 2
taining any record of information under this section, 3
a financial institution may not include in such 4
record the name, specific address (other than the cen- 5
sus tract required under paragraph (1)(E)), telephone 6
number, electronic mail address, and any other per- 7
sonally identifiable information concerning any indi- 8
vidual who is, or is connected with, the small business 9
loan applicant. 10
(4) DISCRETION TO DELETE OR MODIFY PUB- 11
LICLY AVAILABLE DATA.The Agency may, in the 12
discretion of the Agency, delete or modify data col- 13
lected under this section which is or will be available 14
to the public if the Agency determines that the dele- 15
tion or modification of the data would advance a 16
compelling privacy interest. 17
(f) AVAILABILITY OF INFORMATION. 18
(1) SUBMISSION TO AGENCY.The data re- 19
annually to the Agency. 22
(2) AVAILABILITY OF INFORMATION. 23
(A) IN GENERAL.Information compiled 24
and maintained under this section shall be re- 25

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tained for not less than 3 years after the date of 1
preparation and shall be made available to the 2
public, upon request, in the form required under 3
regulations prescribed by the Agency. 4
(B) ANNUAL DISCLOSURE TO THE PUB- 5
LIC.In addition to the availability by request 6
under subparagraph (A) of data compiled and 7
maintained under this section, the Agency shall 8
annually provide such data to the public. 9
(C) PROCEDURES.The procedures for 10
disclosing data compiled and maintained under 11
this section to the public shall be determined by 12
the Agency by regulation. 13
(3) COMPILATION OF AGGREGATE DATA. 14
(A) IN GENERAL.The Agency may, in 15
the discretion of the Agency, compile for the 16
Agencys own use compilations of aggregate data. 17
(B) PUBLIC AVAILABILITY OF AGGREGATE 18
DATA.The Agency may, in the discretion of the 19
Agency, make public compilations of aggregate 20
data in such manner as the Agency may deter- 21
mine to be appropriate. 22
(g) DEFINITIONS.For purposes of this section, the 23

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cial institution means any partnership, company, 2
corporation, association (incorporated or unincor- 3
porated), trust, estate, cooperative organization, or 4
other entity that engages in any financial activity. 5
(2) MINORITY-OWNED BUSINESS.The term 6
minority-owned business means a business 7
or control of which is held by 1 or more minority 9
individuals; and 10
or loss of which accrues to 1 or more minority 12
individuals. 13
(3) WOMEN-OWNED BUSINESS.The term 14
women-owned business means a business 15
or control of which is held by 1 or more women; 17
and 18
or loss of which accrues to 1 or more women. 20
(4) MINORITY.The term minority has the 21
meaning given to such term by section 1204(c)(3) of 22
the Financial Institutions Reform, Recovery, and En- 23
forcement Act of 1989. 24

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(5) SMALL BUSINESS LOAN.The term small 1
business loan shall be defined by the Agency, which 2
may take into account 3
(A) the gross revenues of the borrower; 4
(B) the total number of employees of the 5
borrower; 6
(C) the industry in which the borrower has 7
its primary operations; and 8
(D) the size of the loan. 9
(h) AGENCY ACTION. 10
(1) IN GENERAL.The Agency shall prescribe 11
such regulations and issue such guidance as may be 12
necessary to carry out, enforce, and compile data pur- 13
suant to this section. 14
(2) EXCEPTIONS.The Agency, by regulation 15
or order, may adopt exceptions to any requirement of 16
this section and may, conditionally or uncondition- 17
ally, exempt any financial institution or class of in- 18
stitutions from the requirements of this section as the 19
Agency determines to be necessary or appropriate to 20
carry out the purposes and objectives of this section. 21
(3) GUIDANCE.The Agency shall issue guid- 22
ance designed to facilitate compliance with the re- 23
quirements of this section, including assisting finan- 24
cial institutions in working with applicants to deter- 25

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mine whether the applicants are women- or minority- 1
owned for the purposes of this section.. 2
(b) TECHNICAL AND CONFORMING AMENDMENT.Sec- 3
tion 701(b) of the Equal Credit Opportunity Act (15 U.S.C. 4
1691(b)) is amended 5
(1) by striking or after the semicolon at the 6
end of paragraph (3); 7
(2) by striking the period at the end of para- 8
graph (4) and inserting ; or; and 9
(3) by inserting after paragraph (4), the fol- 10
(5) to make an inquiry under section 704B in 12
accordance with the requirements of such section.. 13
(c) CLERICAL AMENDMENT.The table of sections for 14
title VII of the Consumer Credit Protection Act is amended 15
by inserting after the item relating to section 704A the fol- 16
lowing new item: 17
704B. Small business loan data collection..
(d) EFFECTIVE DATE.This section shall take effect 18
SEC. 173. ANNUAL FINANCIAL AUTOPSY. 20
(a) STUDY REQUIRED.Not later than March 31 of 21
each calendar year, the Director shall 22
(1) conduct a scientific sampling of foreclosures 23
and bankruptcies during the previous calendar year 24
in each State or territory of the United States; and 25

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(2) identify any underlying causes of such bank- 1
ruptcies or foreclosures, including any specific finan- 2
cial products or services that have been the cause of 3
substantial numbers of such bankruptcies or fore- 4
closures. 5
(b) REPORT.After the completion of each study re- 6
quired under subsection (a), the Director shall submit a re- 7
port to the Congress containing 8
(1) any conclusions made by the Director in car- 9
rying out such study; 10
(2) any specific financial products or services 11
that the Director has identified to have caused a sub- 12
stantial number of bankruptcies or foreclosures, as 13
well as which companies or individuals provided such 14
financial products or services; and 15
(3) any recommendations the Director has for 16
legislation that would reduce the underlying causes of 17
bankruptcies and foreclosures identified in such study. 18
Subtitle HConforming 19
Amendments 20
SEC. 181. AMENDMENTS TO THE INSPECTOR GENERAL ACT 21
OF 1978. 22
(a) ESTABLISHMENT.Section 8G(a)(2) of the Inspec- 23
tor General Act of 1978 (5 U.S.C. App.) is amended by 24

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inserting the Consumer Financial Protection Agency, be- 1
fore the Consumer Product Safety Commission,. 2
SEC. 182. AMENDMENTS TO THE PRIVACY ACT OF 1974. 5
(a) APPLICABILITY.Section 552a of title 5, United 6
States Code, is amended by adding at the end the following 7
new subsection: 8
(w) APPLICABILITY TO CONSUMER FINANCIAL PRO- 9
TECTION AGENCY.Except as provided in the Consumer 10
Financial Protection Agency Act of 2009, this section shall 11
apply with respect to the Consumer Financial Protection 12
Agency.. 13
SEC. 183. AMENDMENTS TO THE ALTERNATIVE MORTGAGE 16
TRANSACTION PARITY ACT OF 1982. 17
(a) SECTION 803(1).Section 803(1) of the Alter- 18
native Mortgage Transaction Parity Act of 1982 (12 U.S.C. 19
3802(1)) is amended by striking paragraphs (B) and (C). 20
(b) SECTION 804(a).Section 804(a) of the Alter- 21
native Mortgage Transaction Parity Act of l982 (12 U.S.C. 22
3803(a)) is amended 23
(1) in paragraphs (1), (2), and (3), by inserting 24
on or before the designated transfer date, as deter- 25

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mined in section 1062 of the Consumer Financial 1
Protection Agency Act of 2009 after transactions 2
made each place such term appears; 3
(2) in paragraph (2), by striking and at the 4
end; 5
graph: 9
(4) with respect to transactions made after the 10
designated transfer date, as determined in section 11
Act of 2009, only in accordance with regulations gov- 13
erning alternative mortgage transactions as issued by 14
the Consumer Financial Protection Agency for feder- 15
ally chartered housing creditors, in accordance with 16
the rulemaking authority granted to the Consumer 17
Financial Protection Agency with regard to federally 18
chartered housing creditors under laws other than this 19
section.. 20
(c) SECTION 804.Section 804 of the Alternative 21
Mortgage Transaction Parity Act of l982 (12 U.S.C. 3803) 22
is amended 23
(1) by striking subsection (c) and inserting the 24

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(c) EFFECT OF STATE LAW. 1
(1) IN GENERAL.An alternative mortgage 2
transaction may be made by a housing creditor in ac- 3
cordance with this section, notwithstanding any State 4
Constitution, law, or regulation that prohibits an al- 5
ternative mortgage transaction. 6
(2) RULE OF CONSTRUCTION.For purposes of 7
this subsection, a State Constitution, law, or regula- 8
tion that prohibits an alternative mortgage trans- 9
action does not include any State Constitution, law, 10
or regulation that regulates mortgage transactions 11
generally, including any restriction on prepayment 12
penalties or late charges.; and 13
section: 15
(d) DUTIES OF CONSUMER FINANCIAL PROTECTION 16
AGENCY.The Consumer Financial Protection Agency 17
shall 18
(1) review the regulations identified by the 19
Comptroller of the Currency, the National Credit 20
Union Administration, and the Director of the Office 21
of Thrift Supervision (as those regulations exist on 22
the designated transfer date, as determined in section 23

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Act of 2009) as applicable under paragraphs (1), (2), 1
and (3) of subsection (a); 2
(2) determine whether such regulations are fair 3
and not deceptive and otherwise meet the objectives of 4
Agency Act of 2009; and 6
(3) prescribe regulations under subsection 7
(a)(4) after the designated transfer date, as deter- 8
mined under such Act.. 9
(d) EFFECTIVE DATE AND SCOPE OF APPLICATION. 10
(1) EFFECTIVE DATE.This section shall take ef- 11
fect on the designated transfer date. 12
(2) SCOPE OF APPLICATION.The amendments 13
made by subsection (a) shall not affect any trans- 14
action covered by the Alternative Mortgage Trans- 15
action Parity Act of l982 which is entered into on or 16
SEC. 184. AMENDMENTS TO THE CONSUMER CREDIT PRO- 18
TECTION ACT. 19
(a) TRUTH IN LENDING ACT. 20
Lending Act (15 U.S.C. 1602) is amended by striking 22
subsection (b) and inserting the following new sub- 23
section: 24
(b) AGENCY DEFINITIONS. 25

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(1) BOARD.The term Board means the 1
Board of Governors of the Federal Reserve System. 2
(2) UNIVERSAL AMENDMENT RELATING TO 5
BOARD OF GOVERNORS OF THE FEDERAL RESERVE 6
SYSTEM. 7
Board each place such term appears, includ- 11
ing in chapters 4 and 5 relating to credit billing 12
and consumer leases, and inserting Agency. 13
sections 108(a) (as amended by paragraph (4)) 16
and 140(d). 17
(3) SECTION 105.Section 105(b) of the Truth in 18
Lending Act (15 U.S.C. 1604(b)) is amended by strik- 19
ing the first sentence and inserting the following: 20
The Agency shall publish a single, integrated disclo- 21
sure for mortgage loan transactions, including real es- 22
tate settlement cost statements, which include the dis- 23
closure requirements of this title, in conjunction with 24
the disclosure requirements of the Real Estate Settle- 25

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ment Procedures Act that, taken together, may apply 1
to transactions subject to both or either law. The pur- 2
pose of such model disclosure shall be to facilitate 3
compliance with the disclosure requirements of those 4
titles, and to aid the borrower or lessee in under- 5
standing the transaction by utilizing readily under- 6
standable language to simplify the technical nature of 7
the disclosures.. 8
Lending Act (15 U.S.C. 1607) is amended 10
(a) ENFORCING AGENCIES.Subject to section 122 of 13
the Consumer Financial Protection Agency Act of 2009, 14
compliance with the requirements imposed under this title 15
shall be enforced as follows: 16

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by the Board; 6
(C) depository institution insured by the 7
tion; and 14
Protection Agency Act of 2009, by the Agency. 19
head of the agency responsible for chartering and reg- 21
ulating Federal credit unions. 22

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(6) Under the Farm Credit Act of 1971, by the 5
Farm Credit Administration with respect to any Fed- 6
eral land bank, Federal land bank association, Fed- 7
eral intermediate credit bank, or production credit as- 8
sociation.; and 9

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compliance by any person with the requirements under this 1
title, irrespective of whether that person is engaged in com- 2
merce or meets any other jurisdictional tests in the Federal 3
Trade Commission Act.. 4
(5) UNIVERSAL AMENDMENT RELATING TO THE 5
FEDERAL TRADE COMMISSION. 6
Federal Trade Commission each place such 10
term appears and inserting Agency. 11
sections 108(c) (as amended by paragraph (4)) 14
and 129(m) (as amended by paragraph (7)). 15
(6) SECTION 127.Subparagraph (C) of section 16
127(b)(11) of the Truth in Lending Act (15 U.S.C. 17
1637(b)(11)) is amended to read as follows: 18
(C) Notwithstanding subparagraphs (A) 19
and (B), in the case of a creditor with respect to 20
which compliance with this title is enforced by 21
the Agency, the following statement, in a promi- 22
nent location on the front of the billing state- 23
ment, disclosed clearly and conspicuously: Min- 24
imum Payment Warning: Making only the re- 25

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quired minimum payment will increase the in- 1
terest you pay and the time it takes to repay 2
your balance. For example, making only the typ- 3
ical 5 percent minimum monthly payment on a 4
balance of $300 at an interest rate of 17 percent 5
would take 24 months to repay the balance in 6
full. For an estimate of the time it would take 7
to repay your balance, making only minimum 8
monthly payments, call the Consumer Financial 9
Protection Agency at this toll-free number: 10
[the blank space to be 11
filled in by the creditor]. A creditor who is sub- 12
ject to this subparagraph shall not be subject to 13
subparagraph (A) or (B).. 14
(7) SECTION 129.Section 129(m) of the Truth 15
in Lending Act (15 U.S.C. 1639(m)) is amended to 16
read as follows: 17
(m) CIVIL PENALTIES IN FEDERAL TRADE COMMIS- 18
SION ENFORCEMENT ACTIONS.For purposes of enforce- 19
ment by the Federal Trade Commission, any violation of 20
a regulation issued by the Agency pursuant to subsection 21
(l)(2) of this section shall be treated as a violation of a regu- 22
lation promulgated under section 18 of the Federal Trade 23
Commission Act (15 U.S.C. 57a) regarding unfair or decep- 24
tive acts or practices.. 25

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(b) FAIR CREDIT REPORTING ACT. 1
Reporting Act (15 U.S.C. 1681a) is amended 3
(A) by redesignating subsections (w) and 4
(x) as subsections (x) and (y), respectively; and 5
(B) by inserting after subsection (v) the fol- 6
(w) AGENCY.The term Agency means the Con- 8
sumer Financial Protection Agency.. 9
(2) UNIVERSAL AMENDMENTS RELATING TO THE 10
FEDERAL TRADE COMMISSION.Other than in con- 11
nection with the amendment made by paragraph 12
(7)(A), the Fair Credit Reporting Act (15 U.S.C. 13
1681a) is amended 14
(A) by striking Federal Trade Commis- 15
sion each place such term appears and insert- 16
ing Agency; 17
such term appears (other than in connection 19
with the term amended in subparagraph (A)) 20
and inserting Agency; and 21
(C) by striking Federal banking agencies, 22
the National Credit Union Administration, and 23
the Commission shall jointly each place such 24

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term appears in sections 605(h)(2) and 1
623(a)(8)(A) and inserting Agency shall. 2
(3) SECTION 603.Section 603(k)(2) of the Fair 3
Credit Reporting Act (15 U.S.C. 1681a(k)(2)) is 4
amended by striking Board of Governors of the Fed- 5
eral Reserve System and inserting Agency. 6
(4) SECTION 604.Subsection 604(g) of the Fair 7
Credit Reporting Act (15 U.S.C. 1681b(g)) is amend- 8
ed 9
(A) by striking subparagraph (C) of para- 10
paragraph: 12
(C) as otherwise determined to be nec- 13
essary and appropriate, by regulation or order 14
and subject to paragraph (6), by the Agency 15
(with respect to any covered person subject to the 16
jurisdiction of such agency under paragraph (2) 17
of section 621(b)), or the applicable State insur- 18
ance authority (with respect to any person en- 19
gaged in providing insurance or annuities).; 20
and 21
(B) by striking paragraph (5) and inserting 22
(5) REGULATIONS REQUIRED.The Agency 24
may, after notice and opportunity for comment, pre- 25

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scribe regulations that permit transactions under 1
paragraph (2) that are determined to be necessary 2
and appropriate to protect legitimate operational, 3
transactional, risk, consumer, and other needs (and 4
which shall include permitting actions necessary for 5
administrative verification purposes), consistent with 6
the intent of paragraph (2) to restrict the use of med- 7
ical information for inappropriate purposes.. 8
(5) SECTION 611.Section 611(e)(2) of the Fair 9
Credit Reporting Act (15 U.S.C.1681i(e)(2)) is 10
(2) EXCLUSION.Complaints received or ob- 12
tained by the Agency pursuant to its investigative au- 13
thority under the Consumer Financial Protection 14
Agency Act of 2009 shall not be subject to paragraph 15
(1).. 16
(6) SECTION 615.Section 615(h)(6)(A) of the 17
Fair Credit Reporting Act (15 U.S.C. 18
1681m(h)(6)(A)) is amended to read as follows: 19
(A) RULES REQUIRED.The Agency shall 20
prescribe rules.. 21
Reporting Act (15 U.S.C. 1681s) is amended 23

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(a) ENFORCEMENT BY FEDERAL TRADE COMMIS- 1
SION. 2
(1) IN GENERAL.Subject to section 122 of the 3
Consumer Financial Protection Agency Act of 2009, 4
compliance with the requirements imposed under this 5
title shall be enforced under the Federal Trade Com- 6
mission Act by the Federal Trade Commission with 7
respect to consumer reporting agencies and all other 8
persons subject thereto, except to the extent that en- 9
forcement of the requirements imposed under this title 10
is specifically committed to some other government 11
agency under subsection (b) hereof. For the purpose of 12
the exercise by the Federal Trade Commission of its 13
functions and powers under the Federal Trade Com- 14
mission Act, a violation of any requirement or prohi- 15
bition imposed under this title shall constitute an un- 16
fair or deceptive act or practice in commerce in viola- 17
tion of section 5(a) of the Federal Trade Commission 18
Act and shall be subject to enforcement by the Federal 19
Trade Commission under section 5(b) of such Act 20
with respect to any consumer reporting agency or 21
person subject to enforcement by the Federal Trade 22
Commission pursuant to this subsection, irrespective 23
of whether that person is engaged in commerce or 24
meets any other jurisdictional tests in the Federal 25

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Trade Commission Act. The Federal Trade Commis- 1
sion shall have such procedural, investigative, and en- 2
forcement powers (subject to section 122 of the Con- 3
sumer Financial Protection Agency Act of 2009), in- 4
cluding the power to issue procedural rules in enforc- 5
ing compliance with the requirements imposed under 6
this title and to require the filing of reports, the pro- 7
duction of documents, and the appearance of wit- 8
nesses as though the applicable terms and conditions 9
of the Federal Trade Commission Act were part of 10
this title. Any person violating any of the provisions 11
of this title shall be subject to the penalties and enti- 12
tled to the privileges and immunities provided in the 13
Federal Trade Commission Act as though the applica- 14
ble terms and provisions thereof were part of this 15
title. 16
(2) CIVIL MONEY PENALTIES. 17
(A) IN GENERAL.Subject to section 122 18
of the Consumer Financial Protection Agency 19
Act of 2009, in the event of a knowing violation, 20
which constitutes a pattern or practice of viola- 21
tions of this title, the Commission may com- 22
mence a civil action to recover a civil penalty in 23
a district court of the United States against any 24
person that violates this title. In such action, 25

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H.L.C.
such person shall be liable for a civil penalty of 1
not more than $2,500 per violation. 2
(B) FACTORS IN DETERMINING AMOUNT. 3
In determining the amount of a civil penalty 4
under subparagraph (A), the court shall take 5
into account the degree of culpability, any his- 6
tory of prior such conduct, ability to pay, effect 7
on ability to continue to do business, and such 8
other matters as justice may require. 9
(3) EXCEPTION.Notwithstanding paragraph 10
(2), a court may not impose any civil penalty on a 11
person for a violation of section 623(a)(1) unless the 12
person has been enjoined from committing the viola- 13
tion, or ordered not to commit the violation, in an ac- 14
tion or proceeding brought by or on behalf of the Fed- 15
eral Trade Commission or the Agency, as the case 16
may be, and has violated the injunction or order, and 17
the court may not impose any civil penalty for any 18
violation occurring before the date of the violation of 19
the injunction or order.; 20
(B) by striking subsection (b) and inserting 21
(b) ENFORCEMENT BY OTHER AGENCIES.Subject to 23
Act of 2009, compliance with the requirements imposed 25

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under this title with respect to consumer reporting agencies, 1
persons who use consumer reports from such agencies, per- 2
sons who furnish information to such agencies, and users 3
of information that are subject to subsection (d) of section 4
615 shall be enforced as follows: 5
section 25 or 25A of the Federal Reserve Act, by 19
the Board of Governors of the Federal Reserve 20
System; 21
(C) banks insured by the Federal Deposit 22
Insurance Corporation (other than members of 23
the Federal Reserve System, Federal savings as- 24
sociations, and savings and loan holding compa- 25

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H.L.C.
nies) and insured State branches of foreign 1
banks, by the Board of Directors of the Federal 2
Deposit Insurance Corporation; and 3
Protection Agency Act of 2009, by the Agency in the 8
case of a covered person under that Act. 9
National Credit Union Administration Board with 11
respect to any Federal credit union. 12
(4) Under subtitle IV of title 49, United States 13
Code, by the Secretary of Transportation, with respect 14
to all carriers subject to the jurisdiction of the Surface 15
Transportation Board. 16

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(7) Under the Commodity Exchange Act, with 1
respect to a person subject to the jurisdiction of the 2
Commodity Futures Trading Commission. 3
(8) Under the Federal securities law and any 4
other laws subject to the jurisdiction of the Securities 5
and Exchange Commission, with respect to a person 6
subject to the jurisdiction of the Securities and Ex- 7
change Commission. 8
Any term used in paragraph (1) that is not defined in this 9
title or otherwise defined in section 3(s) of the Federal De- 10
posit Insurance Act shall have the meaning given to such 11
term in section 1(b) of the International Banking Act of 12
1978.; 13
(C) by striking subsection (e) and inserting 14
(e) REGULATORY AUTHORITY.The Agency shall 16
prescribe such regulations as necessary to carry out the pur- 17
poses of this Act with respect to a covered person described 18
in subsection (b).; and 19
(D) in the heading of subsection (g) by 20
striking FTC. 21
Reporting Act (15 U.S.C. 1681s2) is amended 23
(A) by amending subparagraph (a)(7)(D) to 24
read as follows: 25

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H.L.C.
(D) MODEL DISCLOSURE. 1
(i) DUTY OF AGENCY TO PREPARE. 2
The Agency shall prescribe a brief model 3
disclosure a financial institution may use 4
to comply with subparagraph (A), which 5
shall not exceed 30 words. 6
(ii) USE OF MODEL NOT RE- 7
QUIRED.No provision of this paragraph 8
shall be construed as requiring a financial 9
institution to use any such model form pre- 10
scribed by the Agency. 11
(iii) COMPLIANCE USING MODEL.A 12
financial institution shall be deemed to be 13
in compliance with subparagraph (A) if the 14
financial institution uses any such model 15
form prescribed by the Agency, or the finan- 16
cial institution uses any such model form 17
and rearranges its format.. 18
(B) by amending subsection (e) to read as 19
follows: 20
(e) ACCURACY GUIDELINES AND REGULATIONS RE- 21
QUIRED. 22
(1) GUIDELINES.The Agency shall, with re- 23
spect to the entities that are subject to its enforcement 24
authority under section 621 25

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(A) establish and maintain guidelines for 1
use by each person that furnishes information to 2
a consumer reporting agency regarding the accu- 3
racy and integrity of the information relating to 4
consumers that such entities furnish to consumer 5
reporting agencies, and update such guidelines 6
as often as necessary; and 7
(B) prescribe regulations requiring each 8
person that furnishes information to a consumer 9
reporting agency to establish reasonable policies 10
and procedures or implementing the guidelines 11
established pursuant to subparagraph (A). 12
(2) CRITERIA.In developing the guidelines re- 13
quired by paragraph (1)(A), the Agency shall 14
(A) identify patterns, practices, and spe- 15
cific forms of activity that can compromise the 16
accuracy and integrity of information furnished 17
to consumer reporting agencies; 18
(B) review the methods (including techno- 19
logical means) used to furnish information relat- 20
ing to consumers to consumer reporting agencies; 21
(C) determine whether persons that furnish 22
information to consumer reporting agencies 23
maintain and enforce policies to ensure the accu- 24

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H.L.C.
racy and integrity of information furnished to 1
consumer reporting agencies; and 2
(D) examine the policies and processes that 3
persons that furnish information to consumer re- 4
porting agencies employ to conduct reinvestiga- 5
tions and correct inaccurate information relating 6
to consumers that has been furnished to con- 7
sumer reporting agencies. 8
(c) EQUAL CREDIT OPPORTUNITY ACT. 9
Credit Opportunity Act (15 U.S.C. 1691) is amended 11
(2) SECTION 702.Section 702(c) of the Equal 14
Credit Opportunity Act (15 U.S.C. 1691a) is amend- 15
ed to read as follows: 16
(c) The term Agency means the Consumer Financial 17
Protection Agency.. 18
Credit Opportunity Act (15 U.S.C. 1691b) is amend- 20
ed 21
(A) by striking subsection (b); 22
(B) in subsection (a) 23
(i) by striking (1); and 24

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H.L.C.
(ii) by redesignating paragraphs (2), 1
(3), (4), and (5) as subsections (b), (c), (d), 2
and (e), respectively; 3
(C) in subsection (c) (as so redesignated) 4
(i) by striking paragraph (2) and 5
inserting subsection (b); and 6
(ii) by striking such paragraph and 7
inserting such subsection; 8
(D) in subsection (d) (as so redesignated) 9
(i) by striking subsection and insert- 10
ing section 11
(ii) by striking Act and inserting 12
title; and 13
(iii) by striking this paragraph and 14
inserting this subsection; and 15
(E) by striking Board each place such 16
term appears in such section and inserting 17
Agency. 18
Credit Opportunity Act (15 U.S.C. 1691c) is amend- 20
ed 21
Subject to section 122 of the Consumer Fi- 25

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nancial Protection Agency Act of 2009, 1
compliance; 2
banks; 7
paragraph: 14
(vi) by amending paragraph (2) to 18
read as follows: 19
(2) Subtitle E of the Consumer Financial Pro- 20
tection Agency Act of 2009, by the Agency.; 21
(c) OVERALL ENFORCEMENT AUTHORITY OF FED- 24
ERAL TRADE COMMISSION.Except to the extent that en- 25

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H.L.C.
forcement of the requirements imposed under this title is 1
compliance by any person with the requirements imposed 13
under this title, irrespective of whether that person is en- 14
gaged in commerce or meets any other jurisdictional tests 15
in the Federal Trade Commission Act, including the power 16
to enforce any regulation prescribed by the Director under 17
this title in the same manner as if the violation had been 18
a violation of a Federal Trade Commission trade regulation 19
rule.; and 20
(C) in subsection (d), by striking Board 21
(5) SECTION 704a.Section 704A(a)(1) of the 23
Equal Credit Opportunity Act (15 U.S.C. 1691c 24

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H.L.C.
1(a)(1)) is amended in by striking Board and in- 1
serting Agency. 2
Credit Opportunity Act (15 U.S.C. 1691d) is amend- 4
ed 5
(A) in subsection (f), by striking Board 6
each place such term appears and inserting 7
Agency; and 8
(B) in subsection (g), by striking Board 9
Credit Opportunity Act (15 U.S.C. 1691e) is amend- 12
ed 13
(A) in subsection (e) 14
(i) by striking Board each place 15
such term appears and inserting Agency; 16
and 17
(ii) by striking Federal Reserve Sys- 18
tem and inserting Consumer Financial 19
Protection Agency; 20
(B) in subsection (f), by striking two 21
years each place such term appears and insert- 22
ing 5 years; 23
(C) in subsection (g) 24

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H.L.C.
(i) by striking The agencies having, 1
in the 1st sentence, and inserting The 2
Agency and the agencies having 3
(ii) by striking Each agency re- 4
ferred, in the 2nd sentence, and inserting 5
The Agency and each agency referred; 6
(iii) by striking Each such agency, 7
in the 3rd sentence, and inserting The 8
Agency and each such agency; and 9
(iv) by striking whenever the agency 10
in the 3rd sentence, and inserting when- 11
ever the Agency or an agency having re- 12
sponsibility for administrative enforcement 13
under section 704; and 14
(D) in subsection (k) 15
(i) by striking Whenever an agency 16
and inserting Whenever the Agency or an 17
agency; and 18
(ii) by striking the agency shall no- 19
tify and inserting the Agency, or an 20
agency referred to in any such paragraph, 21
as the case may be, shall notify. 22
Credit Opportunity Act (15 U.S.C. 1691f) is amended 24

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H.L.C.
(d) FAIR DEBT COLLECTION PRACTICES ACT. 3
Collection Practices Act (15 U.S.C. 1692a) is amend- 5
ed 6
(A) by redesignating paragraphs (1), (2), 7
(3), (4), (5), (6), (7), (8), and (9), respectively; 9
and 10
(B) by inserting before paragraph (2) (as so 11
redesignated) the following new paragraph: 12
(2) SECTION 813.Section 813(e) of the Fair 15
Debt Collection Practices Act (15 U.S.C. 1692k(e)) is 16
amended by striking Commission and inserting 17
Agency. 18
Collection Practices Act (15 U.S.C. 1692l) is amend- 20
ed 21
(a) FEDERAL TRADE COMMISSION.Subject to sec- 24
tion 122 of the Consumer Financial Protection Agency Act 25

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H.L.C.
of 2009, compliance with this title shall be enforced by the 1
Commission, except to the extent that enforcement of the re- 2
quirements imposed under this title is specifically com- 3
mitted to another agency under subsection (b). For purpose 4
of the exercise by the Commission of its functions and pow- 5
ers under the Federal Trade Commission Act, a violation 6
of this title shall be deemed an unfair or deceptive act or 7
practice in violation of that Act. All of the functions and 8
powers of the Commission under the Federal Trade Com- 9
mission Act are available to the Commission to enforce com- 10
pliance by any person with this title, irrespective of whether 11
that person is engaged in commerce or meets any other ju- 12
risdictional tests in the Federal Trade Commission Act, in- 13
cluding the power to enforce the provisions of this title in 14
the same manner as if the violation had been a violation 15
of a Federal Trade Commission trade regulation rule.; 16
(B) in subsection (b) 17
ENFORCEMENT BY OTHER AGENCY.Sub- 20
ject to section 122 of the Consumer Finan- 21
cial Protection Agency Act of 2009, compli- 22
ance. 23
Office of the Comptroller of the Currency; 25

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H.L.C.
banks;; 3
paragraph: 10
(vi) by striking paragraph (2) and in- 14
serting the following new paragraph: 15
(C) by striking subsection (d) and inserting 18
the following new subsection:. 19
(d) REGULATIONS.The Agency may prescribe regu- 20
lations with respect to the collection of debts by any debt 21
collector.. 22
1692m) is amended 24

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H.L.C.
(A) in the section heading, by striking 1
and 3
such term appears and inserting Agency. 5
1692o) is amended by striking Commission each 7
place such term appears and inserting Agency. 8
(e) ELECTRONIC FUND TRANSFER ACT. 9
Fund Transfer Act (15 U.S.C. 1693a) is amended 11
nancial Protection Agency;; and 15
(B) in paragraph (6), by striking Board 16
Fund Transfer Act (15 U.S.C. 1693b) is amended by 19
Fund Transfer Act (15 U.S.C. 1693c) is amended by 23

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H.L.C.
tronic Fund Transfer Act (15 U.S.C. 1693d(b)) is 2
cy. 4
tronic Fund Transfer Act (15 U.S.C. 1693e(b)) is 6
cy. 8
(6) SECTION 908.Section 908(f)(7) of the Elec- 9
tronic Fund Transfer Act (15 U.S.C. 1693f(f)(7)) is 10
cy. 12
(7) SECTION 910.Section 910(a)(1)(E) of the 13
Electronic Fund Transfer Act (15 U.S.C. 14
1693h(a)(1)(E)) is amended by striking Board and 15
(8) SECTION 911.Section 911(b)(3) of the Elec- 17
tronic Fund Transfer Act (15 U.S.C. 1693i(b)(3) is 18
cy. 20
(9) SECTION 915.Section 915(d) of the Elec- 21
tronic Fund Transfer Act (15 U.S.C. 1693m(d)) is 22
amended 23
(A) by striking Board each place such 24
term appears and inserting Agency; and 25

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H.L.C.
(B) by striking Federal Reserve System 1
and inserting Consumer Financial Protection 2
Agency. 3
Fund Transfer Act (15 U.S.C. 1693o) is amended 5
(i) by striking Compliance and in- 7
serting Subject to section 122 of the Con- 8
sumer Financial Protection Agency Act of 9
2009, compliance; 10
banks; and 15
(iii) by striking paragraph (2) and in- 16
serting: 17

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H.L.C.
compliance by any person subject to the jurisdiction of the 11
Commission with the requirements imposed under this title, 12
irrespective of whether that person is engaged in commerce 13
or meets any other jurisdictional tests in the Federal Trade 14
Commission Act.. 15
Fund Transfer Act (15 U.S.C. 1693p) is amended by 17
Fund Transfer Act (15 U.S.C. 1693q) is amended by 21
Fund Transfer Act (15 U.S.C. 1693r) is amended by 25

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H.L.C.
inserting Agency. 2
(f) AMENDMENTS TO HOEPA RELATING TO THE 3
TRUTH IN LENDING ACT.Section 158 of the Home Owner- 4
ship and Equity Protection Act of 1994 (15 U.S.C. 1601 5
nt.) (relating to hearings on home equity lending) is amend- 6
ed 7
(1) in subsection (a), by striking Board of Gov- 8
ernors of the Federal Reserve System, in consultation 9
with the Consumer Advisory Council of the Board, 10
and inserting Consumer Financial Protection Agen- 11
cy, in consultation with the Advisory Board to the 12
Agency; and 13
(2) in subsection (b), by striking Board of Gov- 14
ernors of the Federal Reserve System and inserting 15
(g) AMENDMENT TO THE FAIR AND ACCURATE CREDIT 17
TRANSACTIONS ACT OF 2003 RELATING TO THE FAIR 18
CREDIT REPORTING ACT.Section 214(b)(1) of the Fair 19
and Accurate Credit Transactions Act of 2003 (15 U.S.C. 20
1681s3 nt.) is amended by striking The Federal banking 21
agencies, the National Credit Union Administration, and 22
the Commission, with respect to the entities that are subject 23
to their respective enforcement authority under section 621 24
of the Fair Credit Reporting Act and and inserting The 25

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H.L.C.
Consumer Financial Protection Agency, with respect to a 1
person subject to the enforcement authority of the Agency, 2
the Commodity Futures Trading Commission, and. 3
SEC. 185. AMENDMENTS TO THE EXPEDITED FUNDS AVAIL- 4
ABILITY ACT. 5
(a) SECTION 605.Section 605(f)(1) of the Expedited 6
Funds Availability Act (12 U.S.C. 4004(f)(1)) is amended 7
by inserting , in consultation with the Director of the Con- 8
(b) SECTION 609.Section 609(a) of the Expedited 10
Funds Availability Act (12 U.S.C. 4008(a)) is amended by 11
inserting , in consultation with the Director of the Con- 12
SEC. 186. AMENDMENTS TO THE FEDERAL DEPOSIT INSUR- 14
ANCE ACT. 15
(a) SECTION 8.Section 8(t) the Federal Deposit In- 16
surance Act (12 U.S.C. 1818(t)) is amended by adding at 17
the end the following new paragraph: 18
(6) REFERRAL TO CONSUMER FINANCIAL PRO- 19
TECTION COMMISSION.Each appropriate Federal 20
banking agency shall make a referral to the Consumer 21
Financial Protection Agency when the Federal bank- 22
ing agency has a reasonable belief that a violation of 23
an enumerated consumer law, as defined in section 24
122(e)(2) of the Consumer Financial Protection Agen- 25

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H.L.C.
cy Act of 2009, by any insured depository institution 1
or institution-affiliated party within the jurisdiction 2
of that appropriate Federal banking agency.. 3
(b) SECTION 43.Section 43 of the Federal Deposit 4
Insurance Act (12 U.S.C. 1831t) is amended 5
(1) in subsection (c), by striking Federal Trade 6
(2) in subsection (d), by striking Federal Trade 8
(3) in subsection (e) 10
(A) in paragraph (2)(B), by striking Fed- 11
eral Trade Commission and inserting Agen- 12
cy; and 13
paragraph: 15
(c) SECTION 43(f).Section 43(f) of the Federal De- 18
posit Insurance Act (12 U.S.C. 1831t(f)) is amended 19
(1) LIMITED ENFORCEMENT AUTHORITY.Com- 22
pliance with the requirements of subsections (b), (c) 23
and (e), and any regulation prescribed or order issued 24
under such subsection, shall be enforced under the 25

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H.L.C.
Consumer Financial Protection Agency Act of 2009 1
by the Agency with respect to any person (and with- 2
out regard to the provision of a consumer financial 3
product or service).; and 4
(2) in paragraph (2), by striking subparagraph 5
(C) and inserting the following new subparagraph: 6
(C) LIMITATION ON STATE ACTION WHILE 7
FEDERAL ACTION PENDING.If the Agency has 8
instituted an enforcement action for a violation 9
of this section, no appropriate State supervisory 10
may, during the pendency of such action, bring 11
an action under this section against any defend- 12
ant named in the complaint of the Agency for 13
any violation of this section that is alleged in 14
that complaint.. 15
SEC. 187. AMENDMENTS TO THE GRAMM-LEACH-BLILEY 16
ACT. 17
(a) SECTION 504.Section 504(a)(1) of the Gramm- 18
Leach-Bliley Act (15 U.S.C. 6804(a)(1)) is amended 19
(1) by striking The Federal banking agencies, 20
the National Credit Union Administration, the Sec- 21
retary of the Treasury, and inserting The Con- 22
sumer Financial Protection Agency and; and 23
(2) by striking , and the Federal Trade Com- 24
mission. 25

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H.L.C.
(b) SECTION 505. 1
(1) Section 505(a) of the Gramm-Leach-Bliley 2
Act (15 U.S.C. 6805(a)) is amended 3
(A) in the matter preceding paragraph (1), 4
by striking This subtitle and the regulations 5
prescribed thereunder shall be enforced by and 6
inserting Subject to section 122 of the Con- 7
sumer Financial Protection Agency Act of 2009, 8
this subtitle and the regulations prescribed under 9
this title shall be enforced by the Consumer Fi- 10
nancial Protection Agency,; and 11
(B) by inserting after paragraph (7) the fol- 12
(8) Under the Consumer Financial Protection 14
Agency Act of 2009, by the Consumer Financial Pro- 15
tection Agency in the case of financial institutions 16
and other covered persons and service providers sub- 17
ject to the jurisdiction of the Agency under that Act, 18
but not with respect to the standards under section 19
501.. 20
(2) Section 505(b)(1) of the Gramm-Leach-Bliley 21
Act (15 U.S.C. 6805(b)(1)) is amended by inserting 22
, other than the Consumer Financial Protection 23
Agency, after described in subsection (a). 24

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H.L.C.
SEC. 188. AMENDMENTS TO THE HOME MORTGAGE DISCLO- 1
SURE ACT OF 1975. 2
(a) SECTION 303.Section 303 of the Home Mortgage 3
(4), (5), and (6) as paragraphs (2), (3), (4), (5), (6), 6
and (7), respectively; and 7
(2) by inserting before paragraph (2) (as so re- 8
designated) the following new paragraph: 9
(b) UNIVERSAL AMENDMENT RELATING TO AGENCY. 12
Except as provided in subsections (c), (d), (e), and (f), the 13
Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 14
11) is amended by striking Board each place such term 15
(c) SECTION 304.Section 304 of the Home Mortgage 17
Disclosure Act of 1975 (12 U.S.C. 2803(h)) is amended 18
(A) by striking and after the semicolon at 20
the end of paragraph (3); 21
(B) by striking and gender in paragraph 22
(4), and inserting age, and gender; 23
(C) by striking the period at the end of 24
paragraph (4) and inserting a semicolon; and 25

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H.L.C.
(D) by inserting after paragraph (4) the fol- 1
lowing new paragraphs: 2
loans grouped according to the following measure- 4
ments: 5
(A) the total points and fees payable at 6
origination in connection with the mortgage as 7
determined by the Agency, taking into account 8
section 103(aa)(4) of the Truth in Lending Act 9
(15 U.S.C. 1602(aa)(4)); 10
(B) the difference between the annual per- 11
centage rate associated with the loan and a 12
benchmark rate or rates for all loans; 13
(C) the term in months of any prepayment 14
penalty or other fee or charge payable on repay- 15
ment of some portion of principal or the entire 16
principal in advance of scheduled payments; and 17
(D) such other information as the Agency 18
may require; and 19
loans and completed applications grouped according 21
to the following measurements: 22
(A) the value of the real property pledged 23
or proposed to be pledged as collateral; 24

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H.L.C.
(B) the actual or proposed term in months 1
of any introductory period after which the rate 2
of interest may change; 3
(C) the presence of contractual terms or 4
proposed contractual terms that would allow the 5
mortgagor or applicant to make payments other 6
than fully-amortizing payments during any por- 7
tion of the loan term; 8
(D) the actual or proposed term in months 9
of the mortgage loan; 10
(E) the channel through which application 11
was made, including retail, broker, and other 12
relevant categories; 13
(F) as the Agency may determine to be ap- 14
propriate, a unique identifier that identifies the 15
loan originator as set forth in Section 1503 of 16
the Secure and Fair Enforcement for Mortgage 17
Licensing Act of 2008; 18
(G) as the Agency may determine to be ap- 19
propriate, a universal loan identifier; 20
(H) as the Agency may determine to be 21
appropriate, the parcel number that corresponds 22
to the real property pledged or proposed to be 23
pledged as collateral; 24

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(I) the credit score of mortgage applicants 1
and mortgagors in such form as the Agency may 2
prescribe, except that the Agency shall modify or 3
require modification of credit score data that is 4
or will be available to the public to protect the 5
compelling privacy interest of the mortgage ap- 6
plicant or mortgagors; and 7
(J) such other information as the Agency 8
may require.; 9
(2) by striking subsection (h) and inserting the 10
(h) SUBMISSION TO AGENCIES. 12
(1) IN GENERAL.The data required to be dis- 13
closed under subsection (b) shall be submitted to the 14
Agency or to the appropriate agency for any institu- 15
tion reporting under this title, in accordance with 16
regulations prescribed by the Agency. Institutions will 17
not be required to report new data required under sec- 18
tion 188(c) before the first January 1 that occurs 19
after the end of the 9-month period beginning on the 20
date that regulations prescribed by the Agency are 21
prescribed in final form. 22
(2) REGULATIONS. Notwithstanding the re- 23
quirement of section 304(a)(2)(A) for disclosure by 24

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census tract, the Agency, in cooperation with other 1
appropriate regulators, including 2
(A) the head of the agency responsible for 3
chartering and regulating national banks for na- 4
tional banks and Federal branches, Federal 5
agencies of foreign banks, and savings associa- 6
tions; 7
(B) the Federal Deposit Insurance Cor- 8
poration for depository institutions insured by 9
the Federal Deposit Insurance Corporation 10
(other than members of the Federal Reserve Sys- 11
tem, Federal savings associations, and savings 12
and loan holding companies) and insured State 13
branches of foreign banks; 14
(C) the Director of the Office of Thrift Su- 15
pervision for Federal savings associations and 16
savings and loan holding companies; 17
(D) the National Credit Union Adminis- 18
tration Board for credit unions; and 19
(E) the Secretary of Housing and Urban 20
Development for other lending institutions not 21
regulated by an agency referred to in subpara- 22
graphs (A), (B), (C), or (D), 23
shall develop regulations prescribing the format for 24
such disclosures, the method for submission of the 25

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data to the appropriate regulatory agency, and the 1
procedures for disclosing the information to the pub- 2
lic. 3
(3) REQUIRED DISCLOSURES.The regulations 4
prescribed under paragraph (2) shall require the col- 5
lection of data required to be disclosed under sub- 6
section (b) with respect to loans sold by each institu- 7
tion reporting under this title, and, in addition, shall 8
require disclosure of the class of the purchaser of such 9
loans. 10
(4) ADDITIONAL DATA OR EXPLANATIONS.Any 11
reporting institution may submit in writing to the 12
Agency or to the appropriate agency such additional 13
data or explanations as it deems relevant to the deci- 14
sion to originate or purchase mortgage loans.; 15
(3) in subsection (i), by striking subsection 16
(b)(4) and inserting paragraphs (4), (5), and (6) of 17
subsection (b); 18
(4) in subsection (j) 19
(A) by striking (as where such term ap- 20
pears in paragraph (1) and inserting (con- 21
taining loan-level and application-level informa- 22
tion relating to disclosures required under sub- 23
sections (a) and (b) and as otherwise; 24

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(B) by striking in the format in which 1
such information is maintained by the institu- 2
tion where such term appears in paragraph 3
(2)(A), and inserting in such formats as the 4
Agency may require; and 5
(C) by striking paragraph (3) and inserting 6
(3) CHANGE OF FORM NOT REQUIRED.A de- 8
pository institution meets the disclosure requirement 9
of paragraph (1) if the institution provides the infor- 10
mation required under such paragraph in such for- 11
mats as the Agency may require.; and 12
(5) by striking paragraph (2) of subsection (m) 13
and inserting the following new paragraph: 14
(2) FORM OF INFORMATION.In complying 15
with paragraph (1), a depository institution shall 16
provide the person requesting the information with a 17
copy of the information requested in such formats as 18
the Agency may require.. 19
(d) SECTION 305.Section 305 of the Home Mortgage 20
(1) by striking subsection (b) and inserting the 22

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(b) POWERS OF CERTAIN OTHER AGENCIES.Com- 1
pliance with the requirements imposed under this title shall 2
be enforced under 3
(1) section 8 of the Federal Deposit Insurance 4
Act, in the case of 5
by the Board; 18
(C) depository institutions insured by the 19

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tion; and 2
(D) Federal savings associations, and sav- 3
tor of the Office of Thrift Supervision; 5
tection Agency Act of 2009, by the Agency; 7
(3) the Federal Credit Union Act, by the Ad- 8
ministrator of the National Credit Union Adminis- 9
tration with respect to any credit union; and 10
(4) other lending institutions, by the Secretary 11
of Housing and Urban Development. The terms used 12
in paragraph (1) that are not defined in this title or 13
otherwise defined in section 3(s) of the Federal De- 14
posit Insurance Act (12 U.S.C. 1813(s)) shall have the 15
meaning given to them in section 1(b) of the Inter- 16
national Banking Act of 1978 (12 U.S.C. 3101). 17
The terms used in paragraph (1) that are not defined in 18
this title or otherwise defined in section 3(s) of the Federal 19
Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the 20
meaning given to them in section 1(b) of the International 21
Banking Act of 1978.; and 22
(2) by inserting at the end of section 305 the fol- 23

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(d) OVERALL ENFORCEMENT AUTHORITY OF THE 1
CONSUMER FINANCIAL PROTECTION AGENCY.Subject to 2
Act of 2009, enforcement of the requirements imposed under 4
this title is committed to each of the agencies under sub- 5
section (b). The Agency may exercise its authorities under 6
the Consumer Financial Protection Agency Act of 2009 to 7
exercise principal authority to examine and enforce compli- 8
ance by any person with the requirements under this title.. 9
(e) SECTION 306.Subsection 306(b) of the Home 10
Mortgage Disclosure Act of 1975 (12 U.S.C. 2805(b)) is 11
(b) The Agency may, by regulation, exempt from the 13
requirements of this title any State chartered depository in- 14
stitution within any State or subdivision of any state if 15
the Agency determines that, under the law of such State 16
or subdivision, that institution is subject to requirements 17
substantially similar to those imposed under this title, and 18
that such law contains adequate provisions for enforcement. 19
Notwithstanding any other provision of this subsection, 20
compliance with the requirements imposed under this sub- 21
section shall be enforced by the head of the agency respon- 22
sible for chartering and regulating national banks under 23
section 8 of the Federal Deposit Insurance Act in the case 24
of national banks and savings association the deposits of 25

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which are insured by the Federal Deposit Insurance Cor- 1
poration.. 2
(f) SECTION 307.Section 307 of the Home Mortgage 3
Disclosure Act of 1975 (12 U.S.C. 2806) is amended to read 4
as follows: 5
SEC. 307. RESEARCH AND IMPROVED METHODS. 6
(a) ENHANCED COMPLIANCE IN ECONOMICAL MAN- 7
NER. 8
(1) IN GENERAL.The Director of the Con- 9
sumer Financial Protection Agency, with the assist- 10
ance of the Secretary, the Director of the Bureau of 11
the Census, the Board of Governors of the Federal Re- 12
serve System, the Federal Deposit Insurance Corpora- 13
tion, and such other persons as the Consumer Finan- 14
cial Protection Agency deems appropriate, shall de- 15
velop or assist in the improvement of, methods of 16
matching addresses and census tracts to facilitate 17
compliance by depository institutions in as economi- 18
cal a manner as possible with the requirements of this 19
title. 20
(2) AUTHORIZATION OF APPROPRIATION. 21
There is authorized to be appropriated such sums as 22
may be necessary to carry out this subsection. 23
(3) AUTHORITY OF AGENCY.The Director of 24
the Consumer Financial Protection Agency is author- 25

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H.L.C.
ized to utilize, contract with, act through, or com- 1
pensate any person or agency in order to carry out 2
this subsection. 3
(b) RECOMMENDATIONS TO THE CONGRESS.The 4
Director of the Consumer Financial Protection Agency shall 5
recommend to the Committee on Financial Services of the 6
House of Representatives and the Committee on Banking, 7
Housing, and Urban Affairs of the Senate such additional 8
legislation as the Director of the Consumer Financial Pro- 9
tection Agency deems appropriate to carry out the purpose 10
of this title.. 11
SEC. 189. AMENDMENTS TO DIVISION D OF THE OMNIBUS 12
APPROPRIATIONS ACT, 2009. 13
(a) Section 626(a) of title VI of division D of the Om- 14
and Disclosure Act of 2009) is amended 17
(1) by striking by paragraph (1) and inserting 18
the following new paragraph: (1) The Director of the 19
Consumer Financial Protection Agency shall have au- 20
thority to prescribe regulations with respect to mort- 21
gage loans in accordance with section 553 of title 5, 22
United States Code. Such rulemaking shall relate to 23
unfair or deceptive acts or practices regarding mort- 24
gage loans, which may include unfair or deceptive 25

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acts or practices involving loan modification and 1
foreclosure rescue services. Any violation of a regula- 2
tion prescribed under this subsection shall be treated 3
as a violation of a regulation prohibiting unfair, de- 4
ceptive, or abusive acts or practices under the Con- 5
sumer Financial Protection Agency Act of 2009.; 6
(3) by striking paragraph (3); and 8
(2) The Director of the Consumer Financial Protec- 11
tion Agency shall enforce the regulations issued under para- 12
graph (1) in the same manner, by the same means, and 13
with the same jurisdiction, powers, and duties as though 14
all applicable terms and provisions of the Consumer Finan- 15
cial Protection Agency Act of 2009 were incorporated into 16
and made part of this section.. 17
(b) Section 626(b) of title VI of division D of the Om- 18
and Disclosure Act of 2009) is amended by striking pri- 21
mary Federal regulator each place it appears and insert- 22
ing Consumer Financial Protection Agency. 23

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SEC. 190. AMENDMENTS TO THE HOMEOWNERS PROTEC- 1
TION ACT OF 1998. 2
Section 10 of the Homeowners Protection Act of 1998 3
(12 U.S.C. 4909) is amended 4
(1) in the matter preceding paragraph (1) of 5
subsection (a), by striking Compliance and insert- 6
ing Subject to section 122 of the Consumer Finan- 7
(2) in subsection (a)(2), by striking and after 9
the semicolon at the end; 10
(3) in subsection (a)(3), by striking the period at 11
the end and inserting ; and; 12
(4) by inserting after subsection (a)(3), the fol- 13
tection Agency Act of 2009, by the Consumer Finan- 16
cial Protection Agency.; and. 17
(5) in subsection (b)(2), by inserting , subject to 18
Agency Act of 2009 before the period at the end. 20
SEC. 191. AMENDMENTS TO THE REAL ESTATE SETTLE- 21
MENT PROCEDURES ACT OF 1974. 22
(a) SECTION 3.Section 3 of the Real Estate Settle- 23
ed 25

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H.L.C.
(1) in paragraph (7), by striking and after the 1
semicolon at the end; 2
graph 6
(b) SECTION 4.Section 4 of the Real Estate Settle- 9
ed 11
(1) in subsection (a), by striking the first sen- 12
tence and inserting the following: The Agency shall 13
publish a single, integrated disclosure for mortgage 14
loan transactions, including real estate settlement cost 15
statements, which include the disclosure requirements 16
of this title, in conjunction with the disclosure re- 17
quirements of the Truth in Lending Act (15 U.S.C. 18
1601 note et seq.) that, taken together, may apply to 19
transactions subject to both or either law. The purpose 20
of such model disclosure shall be to facilitate compli- 21
ance with the disclosure requirements of those titles, 22
and to aid the borrower or lessee in understanding the 23
transaction by utilizing readily understandable lan- 24

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guage to simplify the technical nature of the disclo- 1
sures.; 2
appears and inserting Agency; and 4
(3) by striking form each place such term ap- 5
pears and inserting forms. 6
(c) SECTION 5.Section 5 of the Real Estate Settle- 7
ed 9
appears, and inserting Agency; and 11
(2) by striking the first sentence of subsection 12
(a), and inserting The Agency shall prepare and dis- 13
tribute booklets jointly complying with the require- 14
ments of the Truth in Lending Act (15 U.S.C. 1601 15
note et seq.) and the provisions of this title, in order 16
to help persons borrowing money to finance the pur- 17
chase of residential real estate better to understand 18
the nature and costs of real estate settlement serv- 19
ices.. 20
(d) SECTION 6.Section 6(j)(3) of the Real Estate Set- 21
tlement Procedures Act of 1974 (12 U.S.C. 2605(j)(3)) is 22
amended 23
(1) by striking Secretary and inserting Di- 24
rector of the Agency; and 25

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H.L.C.
(2) by striking by regulations that shall take ef- 1
fect not later than April 20, 1991, and inserting by 2
regulation,. 3
(e) SECTION 7.Section 7 of the Real Estate Settle- 4
by striking Secretary and inserting the Director of the 6
Agency. 7
(f) SECTION 8.Section 8 of the Real Estate Settle- 8
ed 10
(1) in subsection (c)(5), by striking prescribed 11
by the Secretary and inserting prescribed by the 12
Director of the Agency; and 13
(2) in subsection (d)(4) 14
(A) by striking The Secretary, and insert- 15
ing The Agency, the Secretary,; and 16
sentence: However, to the extent that a Federal 18
law authorizes the Agency and other Federal and 19
State agencies to enforce or administer the law, 20
the Agency shall have primary authority to en- 21
force or administer that Federal law in accord- 22
ance with section 122 of the Consumer Financial 23
Protection Agency Act of 2009.. 24

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(g) SECTION 10.Section 10(d) of the Real Estate Set- 1
tlement Procedures Act of 1974 (12 U.S.C. 2609(d)) is 2
amended by striking Secretary and inserting Agency. 3
(h) SECTION 16.Section 16 of the Real Estate Settle- 4
by inserting the Agency, before the Secretary. 6
(i) SECTION 18.Section 18 of the Real Estate Settle- 7
by striking Secretary each place such term appears and 9
(j) SECTION 19.Section 19 of the Real Estate Settle- 11
ed 13
(1) in the section heading, by striking SEC- 14
RETARY and inserting AGENCY; and 15
SEC. 192. AMENDMENTS TO THE RIGHT TO FINANCIAL PRI- 18
VACY ACT OF 1978. 19
(a) AMENDMENTS TO SECTION 1101.Section 1101 of 20
3401) is amended 22

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H.L.C.
(1) financial institution means any bank, sav- 1
ings association, card issuer as defined in section 2
103(n) of the Truth in Lending Act, credit union, or 3
consumer finance institution located in any State or 4
territory of the United States, the District of Colum- 5
bia, Puerto Rico, Guam, American Samoa, or the 6
Virgin Islands;; and 7
(2) in paragraph (7) 8
(A) by redesignating subparagraphs (F), 9
(G), (H), and (I) as subparagraphs (G), (H), 10
(I), and (J), respectively; and 11
(B) by inserting after subparagraph (E) the 12
following new subparagraph: 13
(F) the Consumer Financial Protection 14
Agency;. 15
(b) AMENDMENTS TO SECTION 1112.Section 1112(e) 16
of the Right to Financial Privacy Act of 1978 (12 U.S.C. 17
3412) is amended by striking and the Commodity Futures 18
Trading Commission is permitted and inserting the 19
Commodity Futures Trading Commission, and the Con- 20
sumer Financial Protection Agency is permitted. 21
(c) AMENDMENTS TO SECTION 1113.Section 1113 of 22
3413) is amended by adding at the end the following new 24
subsection 25

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H.L.C.
(r) DISCLOSURE TO THE CONSUMER FINANCIAL PRO- 1
TECTION AGENCY.Nothing in this chapter shall apply to 2
the examination by or disclosure to the Consumer Financial 3
Protection Agency of financial records or information in 4
the exercise of its authority with respect to a financial insti- 5
tution.. 6
SEC. 193. AMENDMENTS TO THE SECURE AND FAIR EN- 7
FORCEMENT FOR MORTGAGE LICENSING ACT 8
OF 2008. 9
(a) SECTION 1503.Section 1503 of the Secure and 10
(2) by redesignating paragraph (1) as para- 14
graph (4), and transferring paragraph (4) (as so re- 15
designated) and inserting such paragraph after para- 16
graph (3) (as added by paragraph (5)); 17
(6), (7), (8), (9), (10), (11), (12), and (13), respec- 20
tively; 21
(4) by inserting before paragraph (2) the fol- 22
Consumer Financial Protection Agency.; and 25

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Director of the Agency.. 4
(b) UNIVERSAL AMENDMENTS RELATING TO AGEN- 5
CY.The Secure and Fair Enforcement for Mortgage Li- 6
censing Act of 2008 (12 U.S.C. 5101 et seq.) is amended 7
(1) by striking Federal banking agencies each 8
place such term appears (other than in subsection 9
(a)(4) (as so redesignated by subsection (a), relating 10
to the definition of Federal banking agencies) or in 11
connection with a reference that is specifically 12
amended by another provision of this section) and in- 13
serting Agency; and 14
appears (other than in connection with a reference 16
that is specifically amended by another provision of 17
this section) and inserting Director. 18
(c) SECTION 1507.Section 1507 of the Secure and 19

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(1) IN GENERAL.The Agency shall develop 1
and maintain a system for registering employees of 2
any depository institution, employees of a subsidiary 3
that is owned and controlled by a depository institu- 4
tion and regulated by a Federal banking agency, or 5
employees of an institution regulated by the Farm 6
Credit Administration, as registered loan originators 7
with the Nationwide Mortgage Licensing System and 8
Registry. The system shall be implemented before July 9
30, 2010.; and 10
(B) by striking appropriate Federal bank- 11
ing agency and the Farm Credit Administra- 12
tion in paragraph (2) and inserting Agency; 13
and 14
(2) in subsection (b), by striking Federal bank- 15
ing agencies, through the Financial Institutions Ex- 16
amination Council, and the Farm Credit Administra- 17
tion each place such term appears and inserting 18
Agency. 19
(d) SECTION 1508. 20
(1) IN GENERAL.Section 1508 of the Secure 21
and Fair Enforcement for Mortgage Licensing Act of 22
2008 (12 U.S.C. 5107) is amended by adding at the 23
end the following new subsection 24
(f) REGULATIONS. 25

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(1) IN GENERAL.The Agency may prescribe 1
regulations setting minimum net worth or surety 2
bond requirements for residential mortgage loan origi- 3
nators and minimum requirements for recovery funds 4
paid into by loan originators. 5
(2) FACTORS TAKEN INTO ACCOUNT.Such reg- 6
ulations shall take into account the need to provide 7
originators adequate incentives to originate affordable 8
and sustainable mortgage loans as well as the need to 9
ensure a competitive origination market that maxi- 10
mizes consumers access to affordable and sustainable 11
mortgage loans.. 12
(2) CLERICAL AMENDMENT.The heading for 13
section 1508 of the Secure and Fair Enforcement for 14
Mortgage Licensing Act of 2008 is amended by strik- 15
ing SECRETARY OF HOUSING AND URBAN DE- 16
VELOPMENT and inserting CONSUMER FINAN- 17
CIAL PROTECTION AGENCY. 18
(e) SECTION 1510.Section 1510 of the Secure and 19
SEC. 1510. FEES. 22
The Agency and the Nationwide Mortgage Licensing 23
System and Registry may charge reasonable fees to cover 24
the costs of maintaining and providing access to informa- 25

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H.L.C.
tion from the Nationwide Mortgage Licensing System and 1
Registry, to the extent that such fees are not charged to con- 2
sumers for access to such system and registry.. 3
(f) SECTION 1513.Section 1513 of the Secure and 4
SEC. 1513. LIABILITY PROVISIONS. 7
The Agency, any State official or agency, or any or- 8
ganization serving as the administrator of the Nationwide 9
Mortgage Licensing System and Registry or a system estab- 10
lished by the Director under section 1509, or any officer 11
or employee of any such entity, shall not by subject to any 12
civil action or proceeding for monetary damages by reason 13
of the good faith action or omission of any officer or em- 14
ployee of any such entity, while acting within the scope of 15
office or employment, relating to the collection, furnishing, 16
or dissemination of information concerning persons who are 17
loan originators or are applying for licensing or registra- 18
tion as loan originators.. 19
(g) SECTION 1514.The heading for section 1514 of 20
the Secure and Fair Enforcement for Mortgage Licensing 21
Act of 2008 (12 U.S.C. 5113) is amended by striking 22
UNDER HUD BACKUP LICENSING SYSTEM and in- 23
serting BY THE AGENCY. 24

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SEC. 194. AMENDMENTS TO THE TRUTH IN SAVINGS ACT. 1
(a) SECTION 263.Section 263 of the Truth in Sav- 2
ings Act (12 U.S.C. 4302) is amended in subsection (b) by 3
striking Board each place such term appears and insert- 4
ing Agency. 5
(b) SECTION 265.Section 265 of the Truth in Sav- 6
(c) SECTION 266.Section 266(e) of the Truth in Sav- 9
ings Act is amended (12 U.S.C. 4305) by striking Board 10
(d) SECTION 269.Section 269 of the Truth in Sav- 12
(e) SECTION 270.Section 270 of the Truth in Sav- 15
(A) by striking Compliance and inserting 18
Subject to section 122 of the Consumer Finan- 19
(B) by striking subparagraph (A) of para- 21
paragraph: 23
(A) by the head of the agency responsible 24
for chartering and regulating national banks for 25

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H.L.C.
national banks, and Federal branches and Fed- 1
eral agencies of foreign banks;; and 2
(C) by adding at the end, the following new 3
paragraph: 4
tection Agency Act of 2009, by the Agency.; and 6
(2) in subsection (c) 7
(A) in the subsection heading, by striking 8
BOARD and insert AGENCY; and 9
(B) by striking Board and inserting 10
Agency. 11
(f) SECTION 272.Section 272 of the Truth in Savings 12
Act (12 U.S.C. 4311) is amended 13
(1) in subsection (a), by striking Board and 14
(2) in subsection (b), by striking regulation pre- 16
scribed by the Board each place such term appears 17
and inserting regulation prescribed by the Agency. 18
(g) SECTION 273.Section 273 of the Truth in Sav- 19
ings Act (12 U.S.C. 4312) is amended in the last sentence 20
by striking Board and inserting Agency. 21
(h) SECTION 274.Section 274 of the Truth in Sav- 22
(1) in paragraph (2) by striking Board and 24

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SEC. 195. AMENDMENTS TO THE TELEMARKETING AND 5
CONSUMER FRAUD AND ABUSE PREVENTION 6
ACT. 7
(a) SECTION 3.Section 3 of the Telemarketing and 8
Consumer Fraud and Abuse Prevention Act (15 U.S.C. 9
6102) is amended 10
(1) in subsection (b), by inserting after the 2nd 11
sentence In prescribing a regulation under this Act 12
that relates to the provision of a consumer financial 13
product or service that is subject to the Consumer Fi- 14
nancial Protection Agency Act, including any enu- 15
merated consumer law thereunder, the Commission 16
shall consult with the Consumer Financial Protection 17
Agency regarding the consistency of a proposed regu- 18
lation with standards, purposes, or objectives admin- 19
istered by the Consumer Financial Protection Agen- 20
cy.; and 21
(2) in subsection (c), by adding at the end Any 22
violation of any regulation prescribed under sub- 23
section (a) committed by a person subject to the Con- 24
sumer Financial Protection Agency Act shall be treat- 25

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H.L.C.
ed as a violation of a regulation under section 131of 1
the Consumer Financial Protection Agency Act re- 2
garding unfair, deceptive, or abusive acts or prac- 3
tices.. 4
(b) AMENDMENTS TO SECTION 4.Section 4(d) of the 5
Act (15 U.S.C. 6103(d)) is amended 7
(1) in the subsection heading, by inserting after 8
COMMISSION the following: OR THE CONSUMER FI- 9
NANCIAL PROTECTION AGENCY; and 10
(2) by inserting after Commission each place 11
such term appears or the Consumer Financial Pro- 12
tection Agency. 13
(c) AMENDMENTS TO SECTION 5.Section 5(c) of the 14
Act (15 U.S.C. 6104(c)) is amended by inserting after 16
Commission each place such term appears or the Con- 17
sumer Financial Protection Agency. 18
(d) AMENDMENT TO SECTION 6.Section 6 of the Tele- 19
marketing and Consumer Fraud and Abuse Prevention Act 20
(15 U.S.C. 6105) is amended by adding at the end the fol- 21
(d) ENFORCEMENT BY CONSUMER FINANCIAL PRO- 23
TECTION AGENCY.Except as otherwise provided in sec- 24
tions 3(d), 3(e), 4, and 5, this Act shall be enforced by the 25

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Consumer Financial Protection Agency under subtitle E of 1
the Consumer Financial Protection Agency Act.. 2
SEC. 196. MEMBERSHIP IN FINANCIAL LITERACY AND EDU- 3
CATION COMMISSION. 4
Section 513(c)(1) of the Financial Literacy and Edu- 5
cation Improvement Act (20 U.S.C. 9702(c)(1)) is amend- 6
ed 7
(1) in subparagraph (B), by striking and at 8
the end; 9
(2) by redesignating subparagraph (C) as sub- 10
paragraph (D); and 11
(3) by inserting after subparagraph (B) the fol- 12
lowing new subparagraph: 13
(C) the Director of the Consumer Finan- 14
cial Protection Agency; and. 15
The amendments made by sections 183 through 195 17
shall take effect on the designated transfer date. 18
TITLE IIIMPROVEMENTS TO 19
THE FEDERAL TRADE COM- 20
MISSION ACT 21
SEC. 201. AMENDMENTS TO THE FEDERAL TRADE COMMIS- 22
SION ACT. 23
(a) Section 5(m)(1)(A) of the Federal Trade Commis- 24
sion Act (15 U.S.C. 45(m)(1)(A)) is amended 25

November 6, 2009 (5:09 p.m.)
f:\VHLC\110609\110609.512.xml
350
H.L.C.
(1) by inserting this Act or after violates the 1
first place such term appears; and 2
(2) by inserting a violation of this Act or is 3
before prohibited. 4
(b) Section 5 of the Federal Trade Commission Act (15 5
U.S.C. 45) is amended by adding at the end thereof the fol- 6
(o) UNLAWFUL ASSISTANCE.It is unlawful for any 8
person, knowingly or recklessly, to provide substantial as- 9
sistance to another in violating any provision of this Act 10
or of any other Act enforceable by the Commission that re- 11
lates to unfair or deceptive acts or practices. Any such vio- 12
lation shall constitute an unfair or deceptive act or practice 13
described in section 5(a)(1) of this Act.. 14
(c) Section 18 of the Federal Trade Commission Act 15
(15 U.S.C. 57a(b)) is amended 16
(1) by amending subsection (b) to read as fol- 17
lows: 18
(b) PROCEDURE APPLICABLE.When prescribing a 19
rule under subsection (a)(1)(B) of this section, the Commis- 20
sion shall proceed in accordance with section 553 of Title 21
5 (without regard to any reference in such section to sec- 22
tions 556 and 557 of such title).; 23
(2)(A) in subsection (d), by striking all that pre- 24
cedes paragraph (3); 25

November 6, 2009 (5:09 p.m.)
f:\VHLC\110609\110609.512.xml
351
H.L.C.
(B) by striking subsections (c), (f), (i), and (j); 1
and 2
(C) by redesignating subsections (e), (g) and (h) 3
as subsections (d), (e) and (f); 4
(3) by redesignating paragraph (3) of subsection 5
(d) as subsection (c); and 6
(4) in subsection (d) (as redesignated) 7
(A) in paragraph (1)(B), by striking the 8
transcript required by subsection (c)(5),; 9
(B) in paragraph (3), by striking error) 10
all that follows and inserting error).; and 11
(C) in paragraph (5), by striking subpara- 12
graph (C). 13

November 6, 2009 (5:09 p.m.)
f:\VHLC\110609\110609.512.xml
)URP: Colbert, Drew (Banking) <Drew_Colbert@banking.senate.gov>
7R: Appel, Brian (Bennet); Atkins, Lamont (Akaka); Babcock, Doug (Brown); Barbieri, Dana (Hutchison);
Barry, Erin (Johnson); Beirne, Katie (Schumer); Campbell, Neil (Reed); Chube, Ellen (Bayh); Connolly, Hal
(Nenendez); Crane, Jonah (Schumer); Davidson, Jonathan (Warner); Dehoney, Eleanor (Brown); Desai,
Rachana (Bayh); Devereux, Nicholas (Warner); Edmundson, Shawn (Kohl); Elhassani, Layth (Bennet);
Fasnacht, Randall (Banking); Fucile, Tamara (Nerkley); Green, Andrew (Nerkley); Hoffman, Brett
(Johnson); Jackson, Patrick (Brown); Jeng, Linda (JEC); Kanter, Jason (Reed); Leahy, Andrew (Bennet);
Naiwurm, Nichelle (Warner); Nitchell, Paul (Warner); Nitre, Tonantzin (Nenendez); Odgren, Andrew
(Reed); Paladino, Emily (Bennet); Passante, Nichael (Nenendez); Pippin, Natt (Akaka); Powden, Nark
(Brown); Reed, Nichael (Nenendez); Revana, Arun (Akaka); Richardson, Negan (Schumer); Roachford,
Keith (Nenendez); Rosenberg, Jason (Tester); Rosenthal, Scott (Nerkley); Roth, Jayme (bayh); Sakai,
James (Akaka); Silverman, Ed (Banking); Silvern, Joy (Bennet); Slaiman, Lauren (Brown); Slevin, Chris
(Brown); Stein, Daniel (Tester); Stein, Kara (Reed); Steinwald, Nathan (Warner); Swab, Hilary (Kohl);
Swanson, Laura (Johnson); Thornblad, Natt (Johnson); Tipton, Benjamin (Brown); Tuber, Jason
(Nenendez); Walsh, Bridget (Tester); Wasch, Elyse (Reed); White, Will (Nerkley); Wong, Stacey (Akaka);
Yakub, Kareem (Brown); Acock, Natthew (Hutchison); Berger, Ryan (Corker); Dagher, Joe (Corker);
Fallon, Kristen (Johanns); Flanz, Ken (Crapo); Francois, vennia (LeNieux); Gallagher, Jenn (Gregg);
Geduldig, Courtney (Corker); Henderson, William (Bunning); Johnson, Travis (vitter); King, Edwin
(Bunning); Nullane, Patrick (Hutchison); Nielsen, Nike (Banking); Novascone, Sarah (Johanns); Oesterle,
Nark (Banking); Richard, Gregg (Crapo); Rigby, Hap (DeNint); Stanley, Chris (vitter); Stine, Jeremy
(vitter); vanDoren, Terry (Johanns); Webb Dahlin, Kathryn (Bennett)
&F: Bondi, Peter (Banking); Brost, Kirstin (Banking); Chon, Julie (Banking); Colbert, Drew (Banking);
Cooper, Beth (Banking); DeAngelis, Bryan (Dodd); Fenton, Jim (Dodd); Filipowich, Brian (Banking);
Friend, Amy (Banking); Frumin, Lisa (Banking); Galicia, Catherine (Banking); Gerencser, Steve (Dodd);
Graham Rea, Lynsey (Banking); Graves, Bonnie (Banking); Green, Natthew (Banking); Hepp, Joe
(Banking); Horan, Jeremy (Dodd); Jarsulic, Narc (Banking); Jickling, Nark (Banking); Katz, Deborah
(Banking); Lackey, Niles (Dodd); NcGinnis, Colin (Banking); NcGrogan, Lori (Dodd); Niller, Jonathan
(Banking); Orringer, Neal (Banking); Preiss, Allison (Dodd); Ratliff, Dawn (Banking); Roth, Nisha
(Banking); Sessions, Justine (Banking); Shahinian, Dean (Banking); Smith, Nargaret (Banking); Warren,
Nitch (Banking); Yi, Charles (Banking)
6HQW: Thu Nov 12 16:S9:29 2009
6XEMHFW: Committee Schedule for Consideration of Financial Reform

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Responsive Documents - CREW: Federal Reserve Board of Governors: Regarding Efforts To Influence Financial Regulatory Reform: 8/4/2011 - Part 4, 11-3-09 To 11-12-09, Cleared For Release

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