S AMDT 1540

S 1540 IS

To provide for enhanced authority of the Federal Deposit Insurance Corporation to act as receiver for certain affiliates of depository institutions, and for other purposes.

July 30, 2009

Mr. CORKER (for himself and Mr. WARNER) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To provide for enhanced authority of the Federal Deposit Insurance Corporation to act as receiver for certain affiliates of depository institutions, and for other purposes.

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 ‘Resolution Reform Act of 2009’.

SEC. 2. PURPOSES.

The purposes of this Act are--

(1) to allow the Federal Deposit Insurance Corporation (in this Act referred to as the ‘Corporation’) to resolve the holding companies, affiliates, and subsidiaries of failed or failing insured depository institutions, consistent with the statutory mission of the Corporation, recognizing that depository institution holding companies serve as a source of strength for their subsidiary institutions, and that their affiliates and subsidiaries may provide critical services for such institutions; and

(2) to provide a clear and cohesive set of rules to address the increasingly complex and interreliant business structures in which insured depository institutions operate in order to promote efficient and economical resolution.

SEC. 3. DEFINITIONS.

For purposes of this Act, the following definitions shall apply:

(1) AFFILIATE- The term ‘affiliate’ has the same meaning as in section 2(k) of the Bank Holding Company Act of 1956.

(2) BRIDGE DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘bridge depository institution holding company’ means a new depository institution holding company organized by the Corporation pursuant to section 53(b) of the Federal Deposit Insurance Act.

(3) CORPORATION- The terms ‘Corporation’ and ‘Board’ mean the Federal Deposit Insurance Corporation and the Board of Directors thereof, respectively.

(4) COVERED AFFILIATE OR SUBSIDIARY- The term ‘covered affiliate or subsidiary’ means any affiliate or subsidiary of a depository institution holding company, or any subsidiary of an insured depository institution that is a subsidiary of that depository institution holding company, as to which the Corporation is appointed receiver.

(5) COVERED DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘covered depository institution holding company’ means a depository institution holding company with one or more affiliated or subsidiary insured depository institutions for which grounds exist to appoint a receiver pursuant to section 11(c) of the Federal Deposit Insurance Act.

(6) FOREIGN- The term ‘foreign’ means any country other than the United States and includes any territory, dependency, or possession of any country other than the United States.

(7) INSURED DEPOSITORY INSTITUTION- The term ‘insured depository institution’ has the same meaning as section 3(c)(2) of the Federal Deposit Insurance Act.

SEC. 4. HOLDING COMPANY RESOLUTION AMENDMENTS TO THE FEDERAL DEPOSIT INSURANCE ACT.

The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by adding at the end the following:

‘SEC. 51. RESOLUTION OF COVERED DEPOSITORY INSTITUTION HOLDING COMPANIES, AFFILIATES, AND SUBSIDIARIES.

‘(a) In General- Notwithstanding any other provision of Federal or State law, except section 52(c), it shall be the responsibility of the Corporation to resolve depository institution holding companies of failed or failing insured depository institutions and the affiliates and subsidiaries of a depository institution holding company, including any subsidiary of an insured depository institution that is a subsidiary of the depository institution holding company, using the powers and authorities conferred upon it by this Act.

‘(b) Definitions- For purposes of this section and sections 52 and 53, the following definitions shall apply:

‘(1) BRIDGE DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘bridge depository institution holding company’ means a new depository institution holding company organized by the Corporation pursuant to section 53(b).

‘(2) COVERED AFFILIATE OR SUBSIDIARY- The term ‘covered affiliate or subsidiary’ means any affiliate or subsidiary of a depository institution holding company, or any subsidiary of an insured depository institution that is a subsidiary of that depository institution holding company, as to which the Corporation is appointed receiver under section 52.

‘(3) COVERED DEPOSITORY INSTITUTION HOLDING COMPANY- The term ‘covered depository institution holding company’ means a depository institution holding company with one or more affiliated or subsidiary insured depository institutions for which grounds exist to appoint a receiver pursuant to section 11(c).

‘(4) FUNCTIONALLY REGULATED AFFILIATE OR SUBSIDIARY- The term ‘functionally regulated affiliate or subsidiary’ means any company--

‘(A) that is not a depository institution holding company or a depository institution; and

‘(B) that is--

‘(i) a broker or dealer that is registered under the Securities Exchange Act of 1934;

‘(ii) a registered investment adviser, properly registered by or on behalf of either the Securities and Exchange Commission in accordance with the Investment Advisers Act of 1940, or any State, with respect to the investment advisory activities of such investment adviser and activities incidental to such investment advisory activities;

‘(iii) an investment company that is registered under the Investment Company Act of 1940;

‘(iv) an insurance company that is subject to supervision by a State insurance regulator, with respect to the insurance activities of the insurance company and activities incidental to such insurance activities; or

‘(v) an entity that is subject to regulation by the Commodity Futures Trading Commission, with respect to the commodities activities of such entity and activities incidental to such commodities activities.

‘(5) FUNCTIONAL REGULATOR- The term ‘functional regulator’ means the Federal or State regulator responsible for regulating the types of activities engaged in by the depository institution holding company, its subsidiary institutions, or other affiliates and subsidiaries. The ‘functional regulators’ are--

‘(A) the Securities and Exchange Commission, if the depository institution holding company, any subsidiary institution, or other affiliate thereof, is a broker or dealer registered with the Commission under section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) in conjunction with the authorities granted to the Securities Investor Protection Corporation, as created by the Securities Investor Protection Act in resolution of brokers or dealers;

‘(B) the Commodity Futures Trading Commission, if the depository institution holding company, its subsidiary institution, or other affiliate thereof, is a futures commission merchant or a commodity pool operator registered with the Commodity Futures Trading Commission under the Commodity Exchange Act; and

‘(C) a State insurance commission or other board or authority, if the depository institution holding company, or an affiliate or subsidiary thereof, is an insurance company.

‘SEC. 52. APPOINTMENT OF THE CORPORATION AS RECEIVER.

Full Text of Legislation