,i #aacth ,,congress #b;d ,session ,h4 ,r4 #eahj ,,in ,,the ,,house ,,of ,,representatives ,july #bc1 #bjad ,mr4 ,ross 7for himself1 ,mr4 ,delaney1 ,mr4 ,bachus1 ,mr4 ,murphy of ,florida1 ,ms4 ,sinema1 and ,mr4 ,luetkemeyer7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to amend the ,financial ,stability ,act of #bjaj to improve the transparency of the ,financial ,stability ,oversight ,council1 to improve the ,,sifi designation process1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,financial ,stability ,oversight ,council ,improvement ,act of #bjad4 #b4 ,transparency and accountability ,section #aaa of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecba7 is amended by adding at the end the following3 7k7 ,application of the ,administrative ,procedure ,act 7#a7 ,in general ,the ,council shall be an agency for purposes of subchapter ,,ii of chapter #e and chapter #g of title #e1 ,united ,states ,code 7commonly referred to as the ,administrative ,procedure ,act74 7#b7 ,notice of meetings by ,chairperson ,the ,chairperson shall be responsible for the public announcements required under section #eeb;b7e7 of title #e1 ,united ,states ,code4 7#c7 ,closed meeting votes ,a determination made by the ,council under section #eeb;b7c7 of title #e1 ,united ,states ,code1 may only be made by a majority vote of the voting members of the ,council then serving4 7#d7 ,treatment as regulators of financial institutions ,the ,council and the ,office of ,financial ,research shall each be an agency responsible for the regulation or supervision of financial institutions for purposes of section #eeb7;b77#h7 of title #e1 ,united ,states ,code4 7l7 ,publication of reports and analyses 7#a7 ,in general ,with respect to any final report1 study1 or analysis prepared by the ,council1 the ,council shall promptly make available to the public1 after distribution for review or use-- 7,a7 any data1 analysis1 and reports-- 7i7 produced by the ,council2 and 7ii7 produced by member agencies or the ,office of ,financial ,research to support the work of the ,council2 and 7,b7 with respect to any findings in such report1 study1 or analysis1 an explanation for such findings and any data used to substantiate such findings4 7#b7 ,redaction of exempt information ,paragraph 7#a7 shall not apply to any information that is exempt from disclosure under section #eeb7;b7 of title #e1 ,united ,states ,code4 7m7 ,revisions to analytic framework for determinations ,the ,council shall make no revisions to any final published analytic framework for determinations under this section or adopt or apply any new similar framework without providing prior public notice and an opportunity for comment1 consistent with section #eec of title #e1 ,united ,states ,code4 4 #c4 ,,sifi designation process ,section #aac of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecbc7 is amended-- 7#a7 in subsection 7a77#b7-- 7,a7 in subparagraph 7,j71 by striking and at the end2 7,b7 by redesignating subparagraph 7,k7 as subparagraph 7,l72 and 7,c7 by inserting after subparagraph 7,j7 the following3 7,k7 the appropriateness of the imposition of prudential standards as opposed to other forms of regulation to mitigate the identified risks2 and 2 7#b7 in subsection 7b77#b7-- 7,a7 in subparagraph 7,j71 by striking and at the end2 7,b7 by redesignating subparagraph 7,k7 as subparagraph 7,l72 7,c7 by inserting after subparagraph 7,j7 the following3 7,k7 the appropriateness of the imposition of prudential standards as opposed to other forms of regulation to mitigate the identified risks2 and 2 and 7,d7 in subsection 7d7-- 7i7 in paragraph 7#a71 by striking and at the end2 7ii7 by redesignating paragraph 7#b7 as paragraph 7#c72 and 7iii7 by inserting after paragraph 7#a7 the following3 7#b7 provide written notice to the nonbank financial company being reevaluated and afford such company an opportunity to submit written materials1 within such time as the ,council determines to be appropriate 7but which shall be not less than #cj days after the date of receipt by the company of such notice71 to contest the determination1 including materials concerning whether1 in the company's view1 material financial distress at the company1 or the nature1 scope1 size1 scale1 concentration1 interconnectedness1 or mix of the activities of the company could pose a threat to the financial stability of the ,united ,states2 and 2 7#c7 by amending subsection 7e7 to read as follows3 7e7 ,requirements prior to a final determination1 notice and opportunity for hearing1 and final determination 7#a7 ,notice of identification for initial evaluation and opportunity for voluntary submission ,upon identifying a nonbank financial company for comprehensive analysis of the potential for the nonbank company to pose a threat to the financial stability of the ,united ,states1 the ,council shall provide the nonbank financial company with-- 7,a7 written notice that explains with specificity the basis for so identifying the company2 and 7,b7 an opportunity to submit written materials for consideration by the ,council as part of the ,council's initial evaluation of the risk profile and characteristics of the company4 7#b7 ,requirements before making a proposed determination ,before making a proposed determination with respect to a nonbank financial company under paragraph 7#c71 the ,council shall-- 7,a7 by a vote of not fewer than #b_/c of the voting members then serving1 including an affirmative vote by the ,chairperson1 approve a resolution that identifies with specificity any risks to the financial stability of the ,united ,states the ,council has identified relating to the nonbank financial company2 7,b7 with respect to nonbank financial company with a primary financial regulatory agency1 provide a copy of the resolution described under subparagraph 7,a7 to the primary financial regulatory agency and provide such agency with at least #ahj days from the receipt of the resolution to-- 7i7 consider the risks identified in the resolution2 and 7ii7 issue proposed regulations or undertake other regulatory action to mitigate or prevent the identified risks2 and 7,c7 provide the nonbank financial company with-- 7i7 written notice that the ,council is considering whether to make a proposed determination with respect to the nonbank financial company under subsection 7a7 or 7b71 as applicable2 7ii7 an opportunity to submit written materials1 within such time as the ,council deems appropriate 7but not less than #cj days after the date of receipt by the company of the notice described under clause 7i771 to the ,council to inform the ,council's consideration of the nonbank financial company for a proposed determination1 including materials concerning the company's views as to whether it satisfies the standard for determination set forth in subsection 7a7 or 7b71 as applicable2 and 7iii7 written notice when the ,council deems its evidentiary record regarding such nonbank financial company to be complete4 7#c7 ,proposed determination 7,a7 ,voting ,the ,council may1 by a vote of not fewer than #b_/c of the voting members then serving1 including an affirmative vote by the ,chairperson1 propose to make a determination in accordance with the provisions of subsection 7a7 or 7b71 as applicable1 with respect to a nonbank financial company4 7,b7 ,deadline for making a proposed determination ,with respect to a nonbank financial company provided with a written notice under paragraph 7#b77;,c77i71 if the ,council does not provide the company with the written notice of a proposed determination described under paragraph 7#d7 within the #ahj-;day period following the date on which the ,council notifies the company under paragraph 7#b77;,c7 that the evidentiary record is complete1 the ,council may not make such a proposed determination with respect to such company unless the ,council repeats the procedures described under paragraph 7#b74 7,c7 ,review of actions of primary financial regulatory agency ,with respect to a nonbank financial company with a primary financial regulatory agency1 the ,council may not vote under subparagraph 7,a7 to make a proposed determination unless-- 7i7 the ,council determines that any proposed regulations or other regulatory actions taken by the primary financial regulatory agency after receipt of the resolution described under paragraph 7#b77;,a7 are insufficient to mitigate or prevent the risks identified in the resolution2 7ii7 the primary financial regulatory agency has notified the ,council that the agency has no proposed regulations or other regulatory actions to mitigate or prevent the risks identified in the resolution2 or 7iii7 the period allowed by the ,council under paragraph 7#b77;,b7 has elapsed and the primary financial regulatory agency has taken no action in response to the resolution4 7#d7 ,notice of proposed determination ,the ,council shall provide to a nonbank financial company written notice of a proposed determination of the ,council1 including an explanation of the basis of the proposed determination of the ,council1 that a nonbank financial company shall be supervised by the ,board of ,governors and shall be subject to prudential standards in accordance with this title1 an explanation of the specific risks to the financial stability of the ,united ,states presented by the nonbank financial company1 and a detailed explanation of why other regulatory action by the company's primary financial regulatory agency1 if any1 is insufficient to mitigate or prevent such risk4 7#e7 ,hearing 7,a7 ,in general ,not later than #cj days after the date of receipt of any notice of a proposed determination under paragraph 7#d71 the nonbank financial company may request1 in writing1 an opportunity for a written or oral hearing before the ,council to contest the proposed determination1 including the opportunity to present a plan to modify the company's business1 structure1 or operations in order to mitigate the risks identified in the notice1 and which plan shall also include any steps the company expects to take during the implementation period to mitigate such risks4 7,b7 ,grant of hearing ,upon receipt of a timely request1 the ,council shall fix a time 7not earlier than #cj days after the date of receipt of the request7 and place at which such company may appear1 personally or through counsel1 to-- 7i7 submit written materials 7which may include a plan to modify the company's business1 structure1 or operations72 or 7ii7 provide oral testimony and oral argument4 7#f7 ,council consideration of company plan 7,a7 ,in general ,if a nonbank financial company submits a plan in accordance with paragraph 7#e71 the ,council shall1 prior to making a final determination-- 7i7 consider whether the plan1 if implemented1 would mitigate the risks identified in the notice under paragraph 7#d72 and 7ii7 provide the nonbank financial company an opportunity to revise the plan after consultation with the ,council4 7,b7 ,voting ,approval by the ,council of a plan submitted under paragraph 7#e7 or revised under subparagraph 7,a77ii7 shall require a vote of not fewer than #b_/c of the voting members then serving1 including an affirmative vote by the ,chairperson4 7,c7 ,implementation of approved plan ,with respect to a nonbank financial company's plan approved by the ,council under subparagraph 7,b71 the company shall have one year to implement the plan1 except that the ,council1 in its sole discretion and upon request from the nonbank financial company1 may grant one or more extensions of the implementation period4 7,d7 ,oversight of implementation 7i7 ,periodic reports ,the ,council1 acting through the ,office of ,financial ,research1 may require the submission of periodic reports from a nonbank financial company for the purpose of evaluating the company's progress in implementing a plan approved by the ,council under subparagraph 7,b74 7ii7 ,inspections ,the ,council may direct the primary financial regulatory agency of a nonbank financial company 7or1 if none1 the ,board of ,governors7 to inspect the company for the purpose of evaluating the company's progress in implementing the company's plan4 7,e7 ,authority to rescind approval 7i7 ,in general ,during the implementation period described under subparagraph 7,c71 including any extensions granted by the ,council1 the ,council shall retain the authority to rescind its approval of the plan if the ,council finds1 by a vote of not fewer than #b_/c of the voting members then serving1 including an affirmative vote by the ,chairperson1 that the company's implementation of the plan is no longer sufficient to mitigate or prevent the risks identified in the resolution described under paragraph 7#b77;,a74 7ii7 ,final determination vote ,the ,council may proceed to a vote on final determination under subsection 7a7 or 7b71 as applicable1 not earlier than #aj days after providing the nonbank financial company with written notice that the ,council has rescinded the approval of the company's plan pursuant to clause 7i74 7,f7 ,actions after implementation 7i7 ,evaluation of implementation ,after the end of the implementation period described under subparagraph 7,c71 including any extensions granted by the ,council1 the ,council shall consider whether the plan1 as implemented by the nonbank financial company1 adequately mitigates or prevents the risks identified in the resolution described under paragraph 7#b77;,a74 7ii7 ,voting ,if1 after performing an evaluation under clause 7i71 not fewer than #b_/c of the voting members of the ,council then serving1 including an affirmative vote by the ,chairperson1 determine that the plan1 as implemented1 adequately mitigates or prevents the identified risks1 the ,council shall not make a final determination under subsection 7a7 or 7b71 as applicable1 with respect to the nonbank financial company and shall notify the company of the ,council's decision to take no further action4 7#g7 ,final council decisions 7,a7 ,in general ,not later than #ij days after the date of a hearing under paragraph 7#e71 the ,council shall notify the nonbank financial company of-- 7i7 a final determination under subsection 7a7 or 7b71 as applicable2 7ii7 the ,council's approval of a plan submitted by the nonbank financial company under paragraph 7#e7 or revised under paragraph 7#f72 or 7iii7 the ,council's decision to take no further action with respect to the nonbank financial company4 7,b7 ,explanatory statement ,a final determination of the ,council1 under subsection 7a7 or 7b71 shall contain a statement of the basis for the decision of the ,council1 including the reasons why the ,council rejected any plan by the nonbank financial company submitted under paragraph 7#e7 or revised under paragraph 7#f74 2 and 7#d7 by adding at the end the following3 7j7 ,periodic review of individual determination 7#a7 ,review ,every #e years after the date of a final determination with respect to a nonbank financial company under subsection 7a7 or 7b71 as applicable1 the nonbank financial company may submit a written request to the ,council for a reevaluation of such determination4 ,upon receipt of such a request1 the ,council shall conduct a reevaluation of such determination and hold a vote on whether to rescind such determination4 7#b7 ,procedures 7,a7 ,in general ,upon receipt of a written request under paragraph 7#a71 the ,council shall fix a time 7not earlier than #cj days after the date of receipt of the request7 and place at which such company may appear1 personally or through counsel1 to-- 7i7 submit written materials 7which may include a plan to modify the company's business1 structure1 or operations1 which shall specify the length of the implementation period72 or 7ii7 provide oral testimony and oral argument before the members of the ,council4 7,b7 ,treatment of plan ,if the company submits a plan in accordance with subparagraph 7,a77i71 the ,council shall consider whether the plan1 if implemented1 would cause the company to no longer meet the standards for a final determination under subsection 7a7 or 7b71 as applicable4 ,the ,council shall provide the nonbank financial company an opportunity to revise the plan after consultation with the ,council4 7#c7 ,rescission of determination 7,a7 ,in general ,if the ,council1 by a vote of not fewer than #b_/c of the voting members then serving1 including an affirmative vote by the ,chairperson1 determines under this subsection that a nonbank financial company no longer meets the standards for a final determination under subsection 7a7 or 7b71 as applicable1 the ,council shall rescind such determination4 7,b7 ,approval of company plan ,approval by the ,council of a plan submitted or revised in accordance with paragraph 7#b7 shall require a vote of not fewer than #b_/c of the voting members then serving1 including an affirmative vote by the ,chairperson4 ,if such plan is approved by the ,council1 the company shall implement the plan during the period identified in the plan1 except that the ,council1 in its sole discretion and upon request from the company1 may grant one or more extensions of the implementation period4 ,after the end of the implementation period1 including any extensions granted by the ,council1 the ,council shall proceed to a vote as described under subparagraph 7,a74 7k7 ,periodic assessment of the impact of designations 7#a7 ,assessment ,every five years after the date of enactment of this section1 the ,council shall-- 7,a7 conduct a study of the ,council's determinations that nonbank financial companies shall be supervised by the ,board of ,governors and shall be subject to prudential standards2 and 7,b7 comprehensively assess the impact of such determinations on the companies for which such determinations were made and the wider economy1 including whether such determinations are having the intended result of improving the financial stability of the ,united ,states4 7#b7 ,report ,not later than #ij days after completing a study required under paragraph 7#a71 the ,council shall issue a report to the ,congress that-- 7,a7 describes all findings and conclusions made by the ,council in carrying out such study2 and 7,b7 identifies whether any of the ,council's determinations should be rescinded or whether related regulations or regulatory guidance should be modified1 streamlined1 expanded1 or repealed4 4 #d4 ,rule of construction ,none of the amendments made by this ,act may be construed as limiting the ,financial ,stability ,oversight ,counsel's emergency powers under section #aac7;f7 of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecbc7;f774