GSIB Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4966 To require the chief executive officers of global systemically important bank holding companies to provide annual testimony to Congress, and for other purposes. IN THE HOUSE OF REPRESENTATIVES OCTOBER 31, 2019 Ms. PRESSLEY introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the chief executive officers of global systemically important bank holding companies to provide annual tes- timony to Congress, 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 2019’’ or the ‘‘GSIB Act of 2019’’. 5 SEC. 2. ANNUAL TESTIMONY OF GSIB CEOS. 6 The Bank Holding Company Act of 1956 (12 U.S.C. 7 1841 et seq.) is amended by adding at the end the fol- 8 lowing: 9 VerDate Sep 11 2014 20:34 Dec 02, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4966.IH H4966 jbell on DSKJLSW7X2PROD with BILLS 2 •HR 4966 IH ‘‘SEC. 15. ANNUAL TESTIMONY OF GSIB CEOS. 1 ‘‘(a) ANNUAL REPORT.—Each global systemically 2 important bank holding company shall issue an annual re- 3 port to the Committee on Banking, Housing, and Urban 4 Affairs of the Senate and the Committee on Financial 5 Services of the House of Representatives containing a de- 6 scription of the activities of the company during the pre- 7 vious year and a description of the company’s objectives 8 and goals for the following year. 9 ‘‘(b) SPECIFIC CONTENTS.—Each report required 10 under subsection (a) shall include a description of— 11 ‘‘(1) the company’s size and complexity, includ- 12 ing a listing of all company subsidiaries and their re- 13 lationship to specified company business lines; 14 ‘‘(2) the current rating of the company and 15 each depository bank subsidiary of the company 16 under CAMELS or the LFI Ratings System, or any 17 subsequent summary supervisory ratings system, 18 and, if applicable, a general description of any out- 19 standing issues that have led to the downgrading of 20 such a rating, and how long such issues have been 21 outstanding without being adequately addressed; 22 ‘‘(3) with respect to each depository institution 23 subsidiary of the company, the number and geo- 24 graphic distribution of the branches of such sub- 25 sidiary; 26 VerDate Sep 11 2014 20:34 Dec 02, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4966.IH H4966 jbell on DSKJLSW7X2PROD with BILLS 3 •HR 4966 IH ‘‘(4) any enforcement actions, including any 1 consent orders and settlements, against the company 2 (including any affiliate or subsidiary of the com- 3 pany), including enforcement actions related to labor 4 and health and safety law violations (in addition to 5 consumer protection); 6 ‘‘(5) with respect to each enforcement action 7 described under paragraph (3), the total number of 8 consumers or investors harmed by the conduct that 9 was the basis for such enforcement action; 10 ‘‘(6) the number of employees dismissed for 11 misconduct, and whether any such employees were 12 company executives; 13 ‘‘(7) the company’s capital market activities, in- 14 cluding with respect to securities (including under- 15 writing, trading, and securitization) and derivatives, 16 including— 17 ‘‘(A) the trading desk structure of the 18 company, identifying each desk and the instru- 19 ments traded or held at each desk; 20 ‘‘(B) the average and standard deviation of 21 a metric of inventory, constructed using data on 22 individual trading desk positions, for long secu- 23 rities positions, short securities positions, and 24 derivatives, at each individual trading desk for 25 VerDate Sep 11 2014 20:34 Dec 02, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4966.IH H4966 jbell on DSKJLSW7X2PROD with BILLS 4 •HR 4966 IH a quarterly period six months prior to the re- 1 porting date; and 2 ‘‘(C) how the company complies with re- 3 strictions under section 13 of the Bank Holding 4 Company Act of 1956 (commonly referred to as 5 the ‘Volcker Rule’) at each trading desk, includ- 6 ing a general description of the methodology for 7 determining reasonably expected near term cus- 8 tomer demand and for designing compensation 9 practices at the desk so as not to create incen- 10 tives for proprietary trading; 11 ‘‘(8) the extent to which the company utilizes 12 forced arbitration clauses in contracts with con- 13 sumers, employees, investors, and contractors; 14 ‘‘(9) the company’s compensation and clawback 15 policies, including how these policies are designed to 16 promote accountability of company executives and 17 how the compensation of the chief executive officer 18 and other senior executives compares to the median 19 compensation of an employee of the company; 20 ‘‘(10) with respect to compensation paid by the 21 company— 22 ‘‘(A) the average amount of compensation 23 received by each decile of employees; and 24 VerDate Sep 11 2014 20:34 Dec 02, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4966.IH H4966 jbell on DSKJLSW7X2PROD with BILLS 5 •HR 4966 IH ‘‘(B) a break down of the base pay and in- 1 centive pay for each decile, including a descrip- 2 tions of metrics, sales goals, or cross selling re- 3 quired to be met in order to qualify for the in- 4 centive or bonus pay; 5 ‘‘(11) the diversity of the directors of the com- 6 pany’s board and senior executives, the policies and 7 practices implemented at the company to promote 8 diversity and inclusion among the company’s work- 9 force, and the policies implemented by the company 10 to promote the use of diverse contractors, including 11 diverse asset managers, brokers and underwriters; 12 ‘‘(12) the company’s approach to cybersecurity 13 and protecting consumer data; 14 ‘‘(13) the total number of whistleblower and 15 ethics complaints made by employees through inter- 16 nal company protocols over the past year, what 17 issues were involved in the complaints, and what the 18 resolutions of the complaints were; and 19 ‘‘(14) a comparison of how the company’s re- 20 sponses to paragraphs (1) through (13) have 21 changed over the last ten years. 22 ‘‘(c) TESTIMONY.—The chief executive officer of each 23 global systemically important bank holding company shall 24 appear before the Committee on Banking, Housing, and 25 VerDate Sep 11 2014 20:34 Dec 02, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4966.IH H4966 jbell on DSKJLSW7X2PROD with BILLS 6 •HR 4966 IH Urban Affairs of the Senate and the Committee on Finan- 1 cial Services of the House of Representatives at an annual 2 hearing to testify with respect to the contents of the report 3 required under subsection (a). 4 ‘‘(d) GLOBAL SYSTEMICALLY IMPORTANT BANK 5 HOLDING COMPANY DEFINED.—In this section, the term 6 ‘global systemically important bank holding company’ 7 means a global systemically important bank holding com- 8 pany, as such term is defined under section 217.402 of 9 title 12, Code of Federal Regulations.’’. 10 Æ VerDate Sep 11 2014 20:34 Dec 02, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H4966.IH H4966 jbell on DSKJLSW7X2PROD with BILLS