To amend the Bank Holding Company Act of 1956 to place certain limitations on commodity ownership and to repeal the merchant banking authority, and for other purposes.

I 116TH CONGRESS 2D SESSION H. R. 7046 To amend the Bank Holding Company Act of 1956 to place certain limitations on commodity ownership and to repeal the merchant banking authority, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 28, 2020 Mr. CASTEN of Illinois introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Bank Holding Company Act of 1956 to place certain limitations on commodity ownership and to repeal the merchant banking authority, 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. LIMITATIONS ON COMMODITY OWNERSHIP 3 AND REPEAL OF THE MERCHANT BANKING 4 AUTHORITY. 5 (a) IN GENERAL.—Section 4 of the Bank Holding 6 Company Act of 1956 (12 U.S.C. 1843) is amended— 7 (1) in subsection (k)— 8 VerDate Sep 11 2014 19:05 Jun 18, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7046.IH H7046 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7046 IH (A) in paragraph (1), by striking ‘‘(by reg- 1 ulation or order)’’ and inserting ‘‘, by regula- 2 tion’’; 3 (B) in paragraph (2)— 4 (i) in the heading, by striking ‘‘SEC- 5 RETARY OF THE TREASURY’’ and inserting 6 ‘‘SECRETARY OF THE TREASURY AND THE 7 FEDERAL DEPOSIT INSURANCE CORPORA- 8 TION’’; and 9 (ii) by adding at the end the fol- 10 lowing: 11 ‘‘(C) JOINT DETERMINATION WITH THE 12 FEDERAL DEPOSIT INSURANCE CORPORA- 13 TION.—For purposes of paragraph (1), the 14 Board may only make a determination that an 15 activity is complementary to a financial activity 16 and does not pose a substantial risk to the safe- 17 ty or soundness of depository institutions or the 18 financial system generally, if such determina- 19 tion is made jointly, by rule, with the Federal 20 Deposit Insurance Corporation.’’; 21 (C) in paragraph (4)— 22 (i) by striking subparagraph (H); and 23 (ii) by redesignating subparagraph (I) 24 as subparagraph (H); and 25 VerDate Sep 11 2014 19:05 Jun 18, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7046.IH H7046 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7046 IH (D) by striking paragraph (7); 1 (2) in subsection (l)— 2 (A) in paragraph (1), by striking ‘‘sub- 3 section (k), (n), or (o)’’ each place such term 4 appears and inserting ‘‘subsection (k) or (n)’’; 5 and 6 (B) in paragraph (2)(B), by striking ‘‘sub- 7 paragraph (H) or (I)’’ and inserting ‘‘subpara- 8 graph (H)’’; 9 (3) in subsection (m)(1)(A), by striking ‘‘sub- 10 section (k), (n), or (o)’’ and inserting ‘‘subsection 11 (k) or (n)’’; 12 (4) in subsection (n)(5), by striking ‘‘subpara- 13 graph (H) or (I)’’ each place such term appears and 14 inserting ‘‘subparagraph (H)’’; and 15 (5) by striking subsection (o). 16 (b) CONFORMING AMENDMENT.—Section 17 3(a)(4)(B)(vi) of the Securities Exchange Act of 1934 (15 18 U.S.C. 78c(a)(4)(B)(vi)) is amended by striking ‘‘other 19 than’’ and all that follows through the end and inserting 20 ‘‘other than a registered broker or dealer.’’. 21 (c) RULEMAKING.—The Board of Governors of the 22 Federal Reserve System shall— 23 (1) issue rules to carry out the amendments 24 made by this section; and 25 VerDate Sep 11 2014 19:05 Jun 18, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7046.IH H7046 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7046 IH (2) provide for an appropriate transition period 1 before persons are required to comply with the 2 amendments made by this section, including allowing 3 for the divestment of shares, assets, and ownership 4 interests affected by such amendments. 5 SEC. 2. FINALIZATION OF PROPOSED FINANCIAL HOLDING 6 COMPANY RULE. 7 (a) IN GENERAL.—The proposed financial holding 8 company rule of the Board of Governors of the Federal 9 Reserve System shall have the force and effect of law. 10 (b) DEFINITION.—In this section, the term ‘‘pro- 11 posed financial holding company rule’’ means the proposed 12 rule of the Board of Governors of the Federal Reserve Sys- 13 tem titled ‘‘Regulations Q and Y; Risk-Based Capital and 14 Other Regulatory Requirements for Activities of Financial 15 Holding Companies Related to Physical Commodities and 16 Risk-Based Capital Requirements for Merchant Banking 17 Investments’’ (81 Fed. Reg. 67220; published September 18 30, 2016). 19 Æ VerDate Sep 11 2014 19:05 Jun 18, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H7046.IH H7046 pamtmann on DSKBC07HB2PROD with BILLS