Sec. 942. Nonbank determination process
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Section 113 of the Financial Stability Act of 2010 ( 12 U.S.C. 5323 ) is amended— in subsection (a)(2)— in the matter preceding subparagraph (A), by inserting factors, including after consider ; in subparagraph (H), by striking 1 or more primary financial regulatory agencies and inserting its primary financial regulatory agency, including the appropriateness of the imposition of prudential standards in addition to or as opposed to other forms of regulation ; in subparagraph (J), by striking and at the end; by redesignating subparagraph
(K)as subparagraph (L); and by inserting after subparagraph
(J)the following: actions taken by the primary financial regulatory agency pursuant to subsection (e)(1)(C); and ; in subsection (b)(2)— in the matter preceding subparagraph (A), by inserting factors, including after consider ; in subparagraph (H), by inserting , including the appropriateness of the imposition of prudential standards in addition to or as opposed to other forms of regulation before the semicolon at the end; in subparagraph (J), by striking and at the end; by redesignating subparagraph
(K)as subparagraph (L); and by inserting after subparagraph
(J)the following: actions taken by the primary financial regulatory agency pursuant to subsection (e)(1)(C); and ; by striking subsections
(d)and
(e)and inserting the following: Not less frequently than annually, except with respect to subparagraph (E), the Council shall reevaluate each final determination made under subsection
(a)or
(b)with respect to a nonbank financial company supervised by the Board of Governors and shall— provide a written notice to the nonbank financial company being reevaluated; afford the nonbank financial company an opportunity to submit a plan, within such time as the Council determines to be appropriate (but which shall be not earlier than 30 days after the date of receipt by the nonbank financial company of the notice provided under subparagraph (A)), to modify the business, structure, or operations of the nonbank financial company; afford the nonbank financial company an opportunity to submit written materials in addition to, or separate from, the plan described in subparagraph (B), within such time as the Council determines to be appropriate (but which shall be not earlier than 30 days after the date of receipt by the nonbank financial company of the notice provided under subparagraph (A)), to contest the determination, including materials concerning whether, in the view of the nonbank financial company, the material financial distress at the nonbank financial company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the nonbank financial company, could pose a threat to the financial stability of the United States; provide an opportunity for the nonbank financial company to meet with representatives of the Council to present the information described in subparagraphs
(B)and (C); and not less than once every 5 years and prior to a vote under paragraph (3)(A)(ii)— not earlier than 30 days after the date of receipt of any notice under subparagraph (A), provide the nonbank financial company with an opportunity to request, in writing, a hearing before the Council to contest its final determination under subsection
(a)or (b); and if the Council receives a timely request under clause (i), fix a time (not earlier than 30 days after the date of receipt of the request) and place at which the nonbank financial company may appear, personally or through counsel, to, at the discretion of the nonbank financial company, provide oral testimony and oral argument to the members of the Council, with not fewer than 2/3 of the voting members of the Council, including the Chairperson, in attendance. If a nonbank financial company submits a plan in accordance with paragraph (1)(B), the Council shall— consider whether the plan, if implemented, would result in the nonbank financial company no longer meeting the criteria for a final determination under subsection
(a)or (b); and provide the nonbank financial company with— analysis of whether and to what extent the plan addresses the potential threat posed by the nonbank financial company to the financial stability of the United States; an opportunity to meet with representatives of the Council to discuss the analysis provided under clause (i); and an opportunity to revise the plan, after discussions with representatives of the Council. After evaluating the materials and information provided by a nonbank financial company under paragraph
(1)and fulfilling the requirements of paragraph (2), and not later than 180 days after the date of receipt by the nonbank financial company of the notice provided under paragraph (1)(A), the Council shall, on a nondelegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson— except as otherwise provided in clause (ii), determine whether the nonbank financial company no longer meets the criteria for a final determination under subsection
(a)or (b), in which case the Council shall rescind such determination; and not less than once every 5 years, and following a hearing held under paragraph (1)(E)(ii), determine whether to renew a final determination under subsection
(a)or (b). If the Council does not vote to rescind a final determination under subparagraph (A)(i) or votes to renew a final determination under subparagraph (A)(ii), the Council shall provide a notice to the nonbank financial company and the primary financial regulatory agency of the nonbank financial company with the reasons for the decision by the Council, which notice shall address with specificity— any changes to the basis for the final determination decision made under subsection
(a)or
(b)since the date on which the final determination under subsection
(a)or
(b)was made, including any changes to the information provided to the nonbank financial company under— subsection (e)(2)(C)(i)(IV); this clause, in prior years; or subparagraph (D); any plan submitted by the nonbank financial company and considered by the Council under paragraph (2), and shall, at a minimum, include— a detailed analysis of whether and to what extent successful implementation of the plan could result in the nonbank financial company no longer meeting the criteria for a final determination under subsection
(a)or (b); and a detailed explanation of why, if the plan were implemented, the nonbank financial company would still meet the criteria for a final determination under subsection
(a)or (b), if the Council, during its consideration of the plan under paragraph (2), concluded that the nonbank financial company would still meet those criteria if the plan were implemented; aspects of the business, operations, or structure, including the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities, of the nonbank financial company that the Council believes could pose a threat to the financial stability of the United States, including an assessment by the Council of the probability and magnitude of the threat; and an explanation of actions the nonbank financial company could take in order for the Council to rescind the determination. If the Council votes to rescind a final determination under subparagraph (A)(i) or does not vote to renew a final determination under subparagraph (A)(ii), the existing final determination under subsection
(a)or
(b)shall be rescinded and the Council shall inform the nonbank financial company in writing. With respect to a reevaluation under this subsection in which the final determination under subsection
(a)or
(b)being reevaluated was made before the date of enactment of this subparagraph, the Council, as part of such reevaluation, shall provide a statement that— explains with specificity the basis for such determination; and includes the analysis required under subsection (e)(2)(C)(i)(IV). Notwithstanding subparagraph (A), the Council may, at any time, on a nondelegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, determine that a nonbank financial company no longer meets the criteria for a final determination under subsection
(a)or (b), in which case the Council shall rescind the final determination. Prior to making a final determination under subsection
(a)or
(b)with respect to a nonbank financial company, the Council must— provide the nonbank financial company and its primary financial regulatory agency with a notice that the nonbank financial company is being evaluated, which notice shall, at minimum— include any quantitative analysis used by the Council as part of its evaluation; identify with specificity any factors that the Council has considered pursuant to subsection (a)(2) or (b)(2) relating to the nonbank financial company that could cause the nonbank financial company to be subject to a final determination under subsection
(a)or (b); and include an explanation of how each factor identified in clause
(ii)relates to the potential threat posed by the nonbank financial company to the financial stability of the United States; provide the nonbank financial company an opportunity, not earlier than 30 days after the date of receipt by the nonbank financial company of the notice under subparagraph (A), to meet with representatives of the Council, including to discuss the notice and any analysis and factors considered by the Council; provide the primary financial regulatory agency of the nonbank financial company with not less than 180 days from the date of receipt of the notice in subparagraph
(A)to— provide a written response to the Council that includes an assessment of— the factors identified pursuant to subparagraph (A)(ii); the explanation provided pursuant to subparagraph (A)(iii); and the degree to which the potential threat to the financial stability of the United States is currently addressed or could be addressed by existing or pending regulation or other regulatory action; and issue proposed regulations or undertake other regulatory action to address— the factors identified pursuant to subparagraph (A)(ii), as applicable; and the potential threat posed by the nonbank financial company to the financial stability of the United States; in the event that the primary financial regulatory agency has provided a written response under subparagraph (C)(i) or issued proposed regulations or taken other regulatory actions under subparagraph (C)(ii), find that— taking into account the written response by the primary financial regulatory agency under subparagraph (C)(i), the nonbank financial company merits a proposed determination under subparagraph (E); and the primary financial regulatory agency has not proposed regulations or taken other regulatory actions after receipt of the notice under subparagraph
(A)that sufficiently address the factors identified pursuant to subparagraph (A)(ii), as applicable, and the potential threat posed by the nonbank financial company to the financial stability of the United States; after fulfilling the requirements of subparagraphs (A), (B), (C), and (D), on a nondelegable basis and by a vote of not fewer than 2/3 of the voting members then serving, including an affirmative vote by the Chairperson, propose to make a determination under subsection
(a)or
(b)with respect to the nonbank financial company; and subsequent to making a proposed determination under subparagraph (E)— provide a notice to the nonbank financial company and its primary financial regulatory agency, which notice shall contain the basis for the proposed determination under subparagraph (E), including— the information and explanation required under subparagraph (A), along with any updates to such information or explanation related to the proposed determination under subparagraph (E); and an explanation and justification for any finding under subparagraph (D); not later than 30 days after the date of receipt of any notice under clause (i), provide the nonbank financial company with an opportunity to request, in writing, a hearing before the Council to contest the proposed determination under subparagraph (E); if the Council receives a timely request under clause (ii), fix a time (not earlier than 30 days after the date of receipt of the request) and place at which the nonbank financial company may appear, personally or through counsel, to, at the discretion of the nonbank financial company— submit a plan to modify the business, structure, or operations of the nonbank financial company in order to address the factors and the potential threat posed by the nonbank financial company to the financial stability of the United States identified pursuant to clause (i)(I), as applicable; submit written materials in addition to or separate from the plan described in subclause (I); and provide oral testimony and oral argument to the members of the Council, with not fewer than 2/3 of the voting members of the Council, including the Chairperson, in attendance; and in the event a plan is submitted to the Council under clause (iii)(I)— consider whether the plan, if implemented, would address the factors and the potential threat posed by the nonbank financial company to the financial stability of the United States identified pursuant to clause (i)(I), as applicable; and provide the nonbank financial company with— analysis of whether and to what extent the plan addresses the factors and the potential threat posed by the nonbank financial company to the financial stability of the United States identified pursuant to clause (i)(I), as applicable; an opportunity to meet with representatives of the Council to discuss the analysis provided under item (aa); and an opportunity to revise the plan, after discussions with representatives of the Council. After fulfilling the requirements of paragraph (1), and not later than 90 days after the date on which a hearing is held under paragraph (1)(F)(iii), the Council may vote to make a final determination under subsection
(a)or (b). The Council may delay the vote up to 1 additional year after the conclusion of the 90-day period if considering a plan under paragraph (1)(F)(iv)(I). If the Council votes on a final determination under subsection
(a)or (b), the Council shall promptly inform the nonbank financial company of the outcome of the vote in writing. If the Council votes to make a final determination under subsection
(a)or (b), the Council shall, not later than 30 days after the date of the vote, provide a notice to the nonbank financial company and its primary financial regulatory agency, which notice shall contain— the basis for the determination, including— a detailed analysis of any plan submitted by the nonbank financial company and considered by the Council under paragraph (1)(F), if applicable, which analysis shall, at a minimum, include— whether and to what extent successful implementation of the plan could address the factors, as applicable, and the potential threat posed by the nonbank financial company to the financial stability of the United States identified pursuant to paragraph (1)(F)(i)(I); and a detailed explanation of why the plan would not address the factors and the potential threat posed by the nonbank financial company to the financial stability of the United States identified pursuant to paragraph (1)(F)(i)(I), if the Council, during its consideration of the plan under subparagraph (1)(F)(iv)(I), concluded that the plan would not address such factors or potential threat; the reasons why the materials and other information submitted or provided by the nonbank financial company under subclauses
(II)and
(III)of paragraph (1)(F)(iii) did not address the potential threat posed by the nonbank financial company to the financial stability of the United States; a justification for any finding under paragraph (1)(D); a detailed analysis of how any factors, including an explanation of how each factor relates to the potential threat posed by the nonbank financial company to the financial stability of the United States, that the Council considered pursuant to subsection (a)(2) or (b)(2) resulted in the final determination under subsection
(a)or (b); and specific aspects of the business, operations, or structure of the nonbank financial company, including the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the nonbank financial company, that the Council believes could pose a threat to the financial stability of the United States, including an assessment by the Council of the probability and magnitude of the threat; and an explanation of actions the nonbank financial company could take in order for the Council to rescind the determination. ; in subsection (g), by striking before the Council makes any and inserting from the outset of the consideration of the nonbank financial company by the Council, including before the Council makes any proposed determination under subsection (e)(1)(E) or ; in subsection (h)— by inserting or renews after makes ; and by striking (d)(2), (e)(3), or (f)(5) and inserting (d)(3)(B) or (f)(5) or of renewal of a final determination under subsection (e)(2)(C) ; and by adding at the end the following: The Council shall— in each case that a nonbank financial company has received a notice under subsection (e)(1)(A), and the nonbank financial company has publicly disclosed that the nonbank financial company is being reviewed by the Council, confirm that the nonbank financial company is being reviewed, in response to a request from a third party; upon making a final determination under subsection
(a)or
(b)or renewing a final determination under paragraph (3)(A) of subsection (d), publicly provide a detailed written explanation of the basis for the final determination with sufficient detail to provide the public with an understanding of the specific bases of the determination by the Council, including any assumptions related thereof, subject to the requirements of section 112(d)(5); include, in the annual report required by section 112— the number of nonbank financial companies from the previous year that received a notice under subsection (e)(1)(A); the number of nonbank financial companies from the previous year that were subject to a proposed determination under subsection (e)(1)(E); and the number of nonbank financial companies from the previous year that were subject to a final determination under subsection
(a)or (b); and not earlier than 180 days after the date of enactment of this subsection, publish in the Federal Register information regarding the methodology the Council uses for calculating any quantitative thresholds or other metrics used to consider the factors listed in subsection (a)(2) or (b)(2). .
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Sec. 942
Nonbank determination process
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