GSIB Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 3948 To require the global systemically important bank holding companies to pro- vide annual reports to the Board of Governors of the Federal Reserve System, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 16, 2021 Ms. PRESSLEY introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the global systemically important bank holding companies to provide annual reports to the Board of Governors of the Federal Reserve System, and for other purposes. 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 ‘‘Greater Supervision 4 In Banking Act of 2021’’ or the ‘‘GSIB Act of 2021’’. 5 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 2 •HR 3948 IH SEC. 2. GSIB ANNUAL REPORTS. 1 The Bank Holding Company Act of 1956 (12 U.S.C. 2 1841 et seq.) is amended by adding at the end the fol- 3 lowing: 4 ‘‘SEC. 15. GSIB ANNUAL REPORTS. 5 ‘‘(a) ANNUAL REPORT.—Each global systemically 6 important bank holding company shall issue an annual re- 7 port to the Board containing a description of the activities 8 of the company during the previous year and a description 9 of the company’s objectives and goals for the following 10 year. 11 ‘‘(b) SPECIFIC CONTENTS.—Each report required 12 under subsection (a) shall include a description of— 13 ‘‘(1) the company’s size and complexity, includ- 14 ing a listing of all company subsidiaries and their re- 15 lationship to specified company business lines; 16 ‘‘(2) with respect to each depository institution 17 subsidiary of the company, the number and geo- 18 graphic distribution of the branches of such sub- 19 sidiary; 20 ‘‘(3) any enforcement actions, including any 21 consent orders and settlements, against the company 22 (including any affiliate or subsidiary of the com- 23 pany), including enforcement actions related to labor 24 and health and safety law violations (in addition to 25 consumer protection); 26 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 3 •HR 3948 IH ‘‘(4) with respect to each enforcement action 1 described under paragraph (3), the total number of 2 consumers, employees, or investors harmed by the 3 conduct that was the basis for such enforcement ac- 4 tion; 5 ‘‘(5) the number of employees dismissed for 6 misconduct, and whether any such employees were 7 company executives; 8 ‘‘(6) the company’s capital market activities, in- 9 cluding with respect to securities (including under- 10 writing, trading, and securitization) and derivatives, 11 including— 12 ‘‘(A) the trading desk structure of the 13 company, identifying each desk and the instru- 14 ments traded or held at each desk; 15 ‘‘(B) the average and standard deviation of 16 a metric of inventory, constructed using data on 17 individual trading desk positions, for long secu- 18 rities positions, short securities positions, and 19 derivatives, at each individual trading desk for 20 a quarterly period six months prior to the re- 21 porting date; 22 ‘‘(C) how the company complies with re- 23 strictions under section 13 of the Bank Holding 24 Company Act of 1956 (commonly referred to as 25 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 4 •HR 3948 IH the ‘Volcker Rule’) at each trading desk, includ- 1 ing a general description of the methodology for 2 determining reasonably expected near term cus- 3 tomer demand and for designing compensation 4 practices at the desk so as not to create incen- 5 tives for proprietary trading; and 6 ‘‘(D) the total profit or loss attributed to 7 the company’s trading account, including a 8 breakdown of profit earned on fees, commis- 9 sions, and spreads, and a description of the 10 source of trading account profit or loss that 11 cannot be attributed to fees, commissions, and 12 spreads; 13 ‘‘(7) the extent to which the company utilizes 14 forced arbitration clauses in contracts with con- 15 sumers, employees, investors, and contractors; 16 ‘‘(8) the company’s compensation and clawback 17 policies, including— 18 ‘‘(A) how these policies are designed to 19 promote accountability of company executives; 20 ‘‘(B) how the compensation of the chief ex- 21 ecutive officer and other senior executives com- 22 pares to the median compensation of an em- 23 ployee of the company; and 24 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 5 •HR 3948 IH ‘‘(C) a detailed description of any stipula- 1 tion that third-party vendor of the company 2 pays its employees a minimum wage; 3 ‘‘(9) with respect to compensation paid by the 4 company— 5 ‘‘(A) the average amount of compensation 6 received by each decile of employees; 7 ‘‘(B) a break down of the base pay and in- 8 centive pay for each decile, including a descrip- 9 tions of metrics, sales goals, or cross selling re- 10 quired to be met in order to qualify for the in- 11 centive or bonus pay; 12 ‘‘(C) the minimum wage received by em- 13 ployees; and 14 ‘‘(D) the number of employees who receive 15 the minimum wage; 16 ‘‘(10) the diversity of the directors of the com- 17 pany’s board and senior executives, the policies and 18 practices implemented at the company to promote 19 diversity and inclusion among the company’s work- 20 force, and the policies implemented by the company 21 to promote the use of diverse contractors, including 22 diverse asset managers, brokers and underwriters; 23 ‘‘(11) the company’s approach to cybersecurity 24 and protecting consumer data; 25 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 6 •HR 3948 IH ‘‘(12) the total number of whistleblower and 1 ethics complaints made by employees through inter- 2 nal company protocols over the past year, what 3 issues were involved in the complaints, and what the 4 resolutions of the complaints were; 5 ‘‘(13) the company’s actions taken in relation to 6 climate risk and contribution to climate change, in- 7 cluding— 8 ‘‘(A) any financed emissions targets set by 9 the company and whether they are aligned with 10 the United States obligations to hold global 11 warming as close to 1.5 degrees Celsius as pos- 12 sible; 13 ‘‘(B) their reliance on offsets to achieve 14 those targets and the expected sources of those 15 offsets; 16 ‘‘(C) amount of financing provided in the 17 last year and committed to in future years to 18 companies involved in fossil fuel expansion and 19 any plans to phase out financing to companies 20 involved in fossil fuel expansion; and 21 ‘‘(D) the projected effect of global failure 22 to achieve the science-based emissions targets 23 on the company’s solvency, including the pro- 24 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 7 •HR 3948 IH jected effect of 3 degrees Celsius or more of 1 warming; 2 ‘‘(14) the company’s involvement in projects 3 that contribute to or mitigate disproportionate envi- 4 ronmental harms to communities of color or indige- 5 nous peoples, or other forms of environmental rac- 6 ism, including— 7 ‘‘(A) financing for oil and gas extraction, 8 oil and gas refineries, petrochemical plants and 9 pipeline projects located in low-income census 10 tracts, majority-minority census tracts, or on 11 indigenous lands, or for companies that build or 12 operate these projects; 13 ‘‘(B) financing for deforestation and min- 14 ing on indigenous lands anywhere in the world; 15 ‘‘(C) impact on indigenous people’s rights 16 of any nature-based offsets purchased by the 17 company; and 18 ‘‘(D) any investments made or other ac- 19 tions taken by the company to address and 20 mitigate previous financing of environmental 21 racism, including but not limited to efforts 22 made to secure Free Prior and Informed Con- 23 sent; efforts made to compensate impacted indi- 24 viduals living in close proximity to financed oil 25 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 8 •HR 3948 IH and gas facilities or projects; and funds for site 1 cleanup; 2 ‘‘(15) the company’s investments in, partner- 3 ships with, and support provided to minority deposi- 4 tory institutions and community development finan- 5 cial institutions; 6 ‘‘(16) any merger or acquisition that was com- 7 pleted in the previous year, including— 8 ‘‘(A) a description of how each merger or 9 acquisition affected the company’s size and 10 complexity; 11 ‘‘(B) an account of the retail branch clo- 12 sures that resulted from the merger or acquisi- 13 tion; 14 ‘‘(C) a description of any regional markets 15 that experienced a change in market concentra- 16 tion, as measured by the Herfindahl-Hirschman 17 Index, resulting from the merger or acquisition; 18 ‘‘(D) a description of any regional markets 19 that experienced a change in the company’s re- 20 gional share of deposits resulting from the 21 merger or acquisition; 22 ‘‘(E) a list of Federal or State government 23 agencies that approved the transaction; and 24 VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS 9 •HR 3948 IH ‘‘(F) a description of any conditions placed 1 by a Federal or State government agency on 2 the company when the transaction was ap- 3 proved; and 4 ‘‘(17) a comparison of how the company’s re- 5 sponses to paragraphs (1) through (15) have 6 changed over the last ten years. 7 ‘‘(c) PUBLIC AVAILABILITY OF REPORTS.—The 8 Board shall make the reports received under this section 9 available to the public, including on the website of the 10 Board. 11 ‘‘(d) GLOBAL SYSTEMICALLY IMPORTANT BANK 12 HOLDING COMPANY DEFINED.—In this section, the term 13 ‘global systemically important bank holding company’ 14 means a global systemically important bank holding com- 15 pany, as such term is defined under section 217.402 of 16 title 12, Code of Federal Regulations.’’. 17 Æ VerDate Sep 11 2014 23:58 Jun 17, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H3948.IH H3948 ctelli on DSK11ZRN23PROD with BILLS