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A BILL
To address the the continued instability and economic stagnation of the United States financial industry.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Callaghan-Hollingsworth Financial Reform Act of 2014’.
SECTION 2. CONGRESSIONAL TASK FORCE ON FINANCIAL REFORM
(a) There is authorized for creation a 'Congressional Task Force on Financial Reform', herein the Task Force.
(b) The Task Force is mandated with: 1) creation of a report to Congress on the progress of implementation of Public Law 111-203, entitled Dodd-Frank Wall Street Reform and Consumer Protection Act, by federal agencies; 2) focus on areas of Public Law 111-203 that replaced or relate to the repealed Banking Act of 1933, entitled the Glass-Steagall Act; 3) submission of recommendations to Congress on improvements or potential replacements to Public Law 111-203, including consideration of reinstatement of all or part of the Banking Act of 1933; and 4) submission of recommendations to relevant Federal agencies on continued implementation and enhancement of rules relating to Public Law 111-203.
(c) The Task Force shall consist of experts in the field of financial regulation and markets to be selected in the following manner: 1) two members shall be appointed by the Secretary of the Treasury; 2) two members shall be appointed by the Senate Majority Leader; 3) two members shall be appointed by the Senate Minority Leader; 4) two members shall be appointed by the House Majority Leader; 5) two members shall be appointed by the House Minority Leader; and 6) the Task Force shall be chaired by the current Chairman of the Securities and Exchange Commission or his or her designee.
(d) In selection of experts for the Task Force those empowered to appoint members shall consider potential appointees from government, academia, industry, and journalism with relevant experience relating to the regulation of financial markets and the provisions of Dodd-Frank relating to 1)Asset-Backed Securities Offerings 2) Private Funds and Investment Advisers, 3) Bank Capital, 4) Securities, 5) Derivatives, 6) Systemic Risk Regulation, 7) Executive Compensation and Corporate Governance, 8) Section 619 of Dodd-Frank or the so-called 'Volcker Rule', 9) Municipal Securities, and 10) Whistleblowers.
(e) No later than one year following Constitutional passage of this legislation the Task Force shall submit its report and recommendations under paragraph (b) with an overarching goal of strengthening America's financial regulatory framework without undermining the stability of its financial markets or global competitiveness.
(f) Upon receipt of the report and recommendations under paragraph (b) Congress shall debate and vote on the policy recommendations regarding Dodd-Frank and Glass Steagall; and the relevant Federal Agencies under subparagraph (4) shall undertake a review of existing policies and practices taking into consideration those reports and recommendations.
(g) Upon passage of this Act and until the action by Congress described in paragraph (f) banks holding a total asset portfolio of less than $500,000,000 shall be exempt from the provisions impacting community banks in the 7 titles of Dodd-Frank identified by the Government Accountability Office report GAO-12-881 "COMMUNITY BANKS AND CREDIT UNIONS: Impact of the Dodd-Frank Act Depends Largely on Future Rule Makings".
SECTION 3. TOO BIG TO FAIL, TOO BIG TO EXIST
SEC. 301. REPORT TO CONGRESS ON INSTITUTIONS THAT ARE TOO BIG TO FAIL.
(A)Notwithstanding any other provision of law, not later than 30 days after the date of enactment of this Act, the Secretary of the Treasury shall submit to Congress a list of all commercial banks, investment banks, hedge funds, and insurance companies that the Secretary believes are too big to fail, which shall include, but is not limited to, any United States bank holding companies that have been identified as systemically important banks by the Financial Stability Board (in this Act referred to as the `Too Big to Fail List'). (B)Notwithstanding any other provision of law, not later than 60 days after the date of enactment of this act, the Secretary of the Treasury shall submit letters to the board or directors of any entity that can be classified as Too Big to Fail, as determined by the definitions in this title, to instruct them to submit a plan for break-up to the Secretary, and copied to the President and to Congress no later than 90 days from enactment of this bill.
SEC. 302. BREAKING-UP TOO BIG TO FAIL INSTITUTIONS.
(A)Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall break up entities included on the Too Big To Fail List, according to their provided break-up plan, so that their failure would no longer cause a catastrophic effect on the United States or global economy without a taxpayer bailout. (B)Notwithstanding any other provision of law, beginning 1 year after the date of enactment of this Act, the Secretary of the Treasury shall notify any banks that have not provided a break-up plan of his intention to break-up the entity in accordance to the law. (C.) Notwithstanding any other provision of law, the Secretary of the Treasury has full control over the break-up of entities under the provisions of this law. The Secretary will have final say over any break-up of any entity, and will, ensure that all new entities created under this act have assets that are less than 10% of the Nation’s GDP.
SEC. 4303. DEFINITION.
For purposes of this title, the term `Too Big to Fail' means any bank, financial institution or credit issuing entity that has grown so large that its failure would have a catastrophic effect on the stability of either the financial system or the United States economy without substantial Government assistance. For the purposes of this act, a financial institution, bank, or credit issuing entity shall be considered too big to fail once its assets equal, or surpass 15% of the nation’s GDP.
Title 4. RETURN TO PRUDENT BANKING
SEC. 401. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVISIONS.
(a) Financial Holding Company- (1) IN GENERAL- Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) is amended by striking subsections (k), (l), (m), (n), and (o). (2) TRANSITION- (A) ORDERLY WIND-DOWN OF EXISTING AFFILIATION- In the case of a bank holding company which, pursuant to the amendments made by paragraph (1), is no longer authorized to control or be affiliated with any entity that was permissible for a financial holding company, any affiliation by the bank holding company which is not permitted for a bank holding company shall be terminated as soon as practicable and in any event no later than the end of the 2-year period beginning on such date of enactment. (B) EARLY TERMINATION- The Board of Governors of the Federal Reserve System, after opportunity for hearing, may terminate, at any time, the authority conferred by the preceding subparagraph to continue any affiliation subject to such subparagraph until the end of the period referred to in such subparagraph if the Board determines, having due regard to the purposes of this Act, that such action is necessary to prevent undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices, and is in the public interest. © EXTENSION- Subject to a determination under subparagraph (B), the Board of Governors of the Federal Reserve System may extend the 2-year period referred to in subparagraph (A) above from time to time as to any particular bank holding company for not more than 6 months at a time, if, in the judgment of the Board, such an extension would not be detrimental to the public interest, but no such extensions shall in the aggregate exceed 1 year. (3) TECHNICAL AND CONFORMING AMENDMENTS- (A) Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841) is amended by striking subsection (p). (B) Section 5© of the Bank Holding Company Act of 1956 (12 U.S.C. 1844©) is amended-- (i) by striking subparagraph (E) of paragraph (2); and (ii) by striking paragraphs (3), (4), and (5). © Section 5 of the Bank Holding Company Act of 1956 (12 U.S.C. 1844) is amended by striking subsection (g). (D) The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by striking section 45. (E) The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended by striking section 10A. (F) Subtitle B of title I of the Gramm-Leach-Bliley Act is amended by striking section 114 (12 U.S.C. 1828a) and section 115 (12 U.S.C. 1820a). (b) Financial Subsidiaries Repealed- (1) IN GENERAL- Section 5136A of the Revised Statutes of the United States (12 U.S.C. 24a) is amended to read as follows:
`SEC. 5136A. [REPEALED].'. (2) TRANSITION- (A) ORDERLY WIND-DOWN OF EXISTING AFFILIATION- In the case of a national bank which, pursuant to the amendments made by paragraph (1), is no longer authorized to control or be affiliated with a financial subsidiary as of the date of the enactment of this Act, such affiliation shall be terminated as soon as practicable and in any event no later than the end of the 2-year period beginning on such date of enactment. (B) EARLY TERMINATION- The Comptroller of the Currency, after opportunity for hearing, may terminate, at any time, the authority conferred by the preceding subparagraph to continue any affiliation subject to such subparagraph until the end of the period referred to in such subparagraph if the Comptroller determines, having due regard for the purposes of this Act, that such action is necessary to prevent undue concentration of resources, decreased or unfair competition, conflicts of interest, or unsound banking practices and is in the public interest. © EXTENSION- Subject to a determination under subparagraph (B), the Comptroller of the Currency may extend the 2-year period referred to in subparagraph (A) above from time to time as to any particular national bank for not more than 6 months at a time, if, in the judgment of the Comptroller, such an extension would not be detrimental to the public interest, but no such extensions shall in the aggregate exceed 1 year. (3) TECHNICAL AND CONFORMING AMENDMENT- (A) The 20th undesignated paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 335) is amended by striking the last sentence. (B) The Federal Deposit Insurance Act is amended by striking section 46 (12 U.S.C. 1831w). (4) CLERICAL AMENDMENT- The table of sections for chapter one of title LXII of the Revised Statutes of the United States is amended by striking the item relating to section 5136A. © Definition of Broker- Section 3(a)(4)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)(B)) is amended-- (1) by striking clauses (i), (iii), (v), (vii), (x), and (xi); and (2) by redesignating clauses (ii), (iv), (vi), (viii), and (ix) as clauses (i), (ii), (iii), (iv), and (v), respectively. (d) Definition of Dealer- Section 3(a)(5)© of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(5)©) is amended-- (1) by striking clauses (i) and (iii); and (2) by redesignating clauses (ii) and (iv) as clauses (i) and (ii), respectively. (e) Definition of Identified Banking Product- Subsection (a) of section 206 of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is amended-- (1) by inserting `and' after the semicolon at the end of paragraph (4); (2) in paragraph (5)(B)(ii), by striking `; or' and inserting a period; and (3) by striking paragraph (6) and all that follows through the end of such subsection. (f) Definition of Activities Closely Related to Banking- (1) IN GENERAL- Section 4©(8) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843©(8)) is amended by striking `the day before the date of the enactment of the Gramm-Leach-Bliley Act' and inserting `January 1, 1970'. (2) PROVISION ALLOWING FOR EXCEPTIONS AFTER REPORT TO THE CONGRESS- Subsection (j) of section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)) is amended to read as follows: `(j) Approval for Certain Post-1970 Subsection ©(8) Activities- `(1) IN GENERAL- Notwithstanding the limitation of the January 1, 1970, approval deadline in subsection ©(8), the Board may determine an activity to be so closely related to banking as to be a proper incident thereto for purposes of such subsection, subject to the requirements of this subsection and such terms and conditions as the Board may require. `(2) GENERAL STANDARDS- In making any determination under paragraph (1), the Board shall consider whether performance of the activity by a bank holding company or a subsidiary of such company can reasonably be expected to result in a violation of section 18(aa) of the Federal Deposit Insurance Act, section 21 of the Banking Act of 1933, or the spirit of section 301© of the Graham-Swartz Financial Reform and Economy Protection Act of 2013, and other possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices. `(3) REPORT AND WAIT- No determination of the Board under paragraph (1) may take effect before the end of the 180-day period beginning on the date by which notice of the determination has been submitted to both Houses of the Congress together with a detailed explanation of the activities to which the determination relates and the basis for the determination, unless before the end of such period, such activities have been approved by an Act of Congress.'. (g) Repeal of Provision Relating to Foreign Banks Filing as Financial Holding Companies- Section 8© of the International Banking Act of 1978 (12 U.S.C. 3106©) is amended by striking paragraph (3).
SEC. 402. REPORTS TO THE CONGRESS.
(a) Reports Required- Each time the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, or another appropriate Federal banking agency makes a determination or an extension under subparagraph (B) or © of paragraph (2) or (3) of section 18(aa) of the Federal Deposit Insurance Act (as added by section 301(a)) or subparagraph (B) or © of subsection (a)(2) or (b)(2) of section 3, as the case may be, the Board, Comptroller, or agency shall promptly submit a report of such determination or extension to the Congress. (b) Contents- Each report submitted to the Congress under subsection (a) shall contain a detailed description of the basis for the determination or extension.
PSES:
1) Orders a report on the implementation of the Dodd-Frank financial reform legislation so that comprehensive reform to the system might be undertaken with particular view to potential re-implementation of certain provisions of the so-called Glass-Steagall Act; requires action by Congress following the filing of said report; exempts local and community banks from harmful provision of Dodd-Frank until the filing of said report. 2) a) Requires the Financial Stability Board to produce a list of entities considered "too big to fail" b) Such identified institutions shall be broken up to a size of it's assets being no more than 10% of the national GDP c) No financial entity may exceed a size of it's assets being no more than 15% of GDP 3) Repeals certain provisions of the Gramm-Leach-Bliey Act
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