Bank Safety Act of 2024

IB Union Calendar No. 612 118TH CONGRESS 2D SESSION H. R. 4206 [Report No. 118–725] To amend the Financial Stability Act of 2010 to require covered financial institutions to include elements of accumulated other comprehensive in- come when calculating capital for purposes of meeting capital require- ments, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 20, 2023 Mr. SHERMAN introduced the following bill; which was referred to the Committee on Financial Services NOVEMBER 1, 2024 Additional sponsor: Mr. CASTEN NOVEMBER 1, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on June 20, 2023] VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS 2 •HR 4206 RH A BILL To amend the Financial Stability Act of 2010 to require covered financial institutions to include elements of accu- mulated other comprehensive income when calculating capital for purposes of meeting capital requirements, and for other purposes. VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS 3 •HR 4206 RH 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 ‘‘Bank Safety Act of 4 2024’’. 5 SEC. 2. CAPITAL REQUIREMENTS RELATING TO ACCUMU- 6 LATED OTHER COMPREHENSIVE INCOME. 7 (a) IN GENERAL.—Section 171 of the Financial Sta- 8 bility Act of 2010 (12 U.S.C. 5371) is amended by adding 9 at the end the following new subsection: 10 ‘‘(d) INCLUSION OF ELEMENTS OF ACCUMULATED 11 OTHER COMPREHENSIVE INCOME.— 12 ‘‘(1) IN GENERAL.—The computation of capital 13 for purposes of meeting capital requirements for a 14 covered financial institution shall include AOCI. 15 ‘‘(2) DEFINITIONS.—In this subsection: 16 ‘‘(A) AOCI.—The term ‘AOCI’ means— 17 ‘‘(i) all accumulated other comprehen- 18 sive income components, except for accumu- 19 lated net gains and losses on cash flow 20 hedges related to items that are not recog- 21 nized at fair value; or 22 ‘‘(ii) such other definition as the Fed- 23 eral banking agencies may establish, by 24 rule. 25 VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS 4 •HR 4206 RH ‘‘(B) COVERED FINANCIAL INSTITUTION.— 1 ‘‘(i) IN GENERAL.—The term ‘covered 2 financial institution’ means— 3 ‘‘(I) a depository institution hold- 4 ing company (as defined in section 3 5 of the Federal Deposit Insurance Act) 6 with total consolidated assets greater 7 than $100,000,000,000; 8 ‘‘(II) an insured depository insti- 9 tution over which a bank holding com- 10 pany does not have control with total 11 consolidated assets greater than 12 $100,000,000,000; or 13 ‘‘(III) such other category of de- 14 pository institution holding companies 15 or insured depository institutions as 16 may be jointly determined by the Fed- 17 eral banking agencies, by rule, based 18 on an analysis of financial risk-related 19 factors. 20 ‘‘(ii) EXCEPTION.—Unless the Board of 21 Governors determines it to be necessary to 22 ensure the safety and soundness of a covered 23 financial institution, the term ‘covered fi- 24 VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS 5 •HR 4206 RH nancial institution’ does not include a sav- 1 ings and loan holding company— 2 ‘‘(I) that is substantially engaged 3 in insurance underwriting or commer- 4 cial activities; or 5 ‘‘(II) with respect to which the 6 Small Bank Holding Company and 7 Savings and Loan Holding Company 8 Policy Statement of the Board of Gov- 9 ernors applies (12 CFR 225 app. C).’’. 10 (b) TRANSITION PROVISION.— 11 (1) IN GENERAL.—The Federal banking agencies 12 shall, jointly, establish a transition period for the ap- 13 plication of the requirement under subsection (d) of 14 section 171 of the Financial Stability Act of 2010 to 15 a covered financial institution (including an opt out 16 institution) that— 17 (A) phases in such requirement over time; 18 and 19 (B) fully applies such requirement to cov- 20 ered financial institutions on or before July 1, 21 2028. 22 (2) DEFINITIONS.—In this subsection: 23 (A) COVERED FINANCIAL INSTITUTION.— 24 The term ‘‘covered financial institution’’ has the 25 VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS 6 •HR 4206 RH meaning given that term under section 171(d) of 1 the Financial Stability Act of 2010. 2 (B) FEDERAL BANKING AGENCY.—The term 3 ‘‘Federal banking agency’’ has the meaning given 4 that term under section 3 of the Federal Deposit 5 Insurance Act (12 U.S.C. 1813). 6 (C) OPT OUT INSTITUTION.—The term ‘‘opt 7 out institution’’ means a covered financial insti- 8 tution that elected to opt out of the requirement 9 to report accumulated other comprehensive in- 10 come components pursuant to the rule titled 11 ‘‘Changes to Applicability Thresholds for Regu- 12 latory Capital and Liquidity Requirements’’ (84 13 Fed. Reg. 59230; November 1, 2019). 14 VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS Union Calendar No. 612 118TH CONGRESS 2D SESSION H. R. 4206 [Report No. 118–725] A BILL To amend the Financial Stability Act of 2010 to require covered financial institutions to include elements of accumulated other comprehensive in- come when calculating capital for purposes of meeting capital requirements, and for other pur- poses. NOVEMBER 1, 2024 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 18:50 Nov 01, 2024 Jkt 059200 PO 00000 Frm 00008 Fmt 6651 Sfmt 6651 E:\BILLS\H4206.RH H4206 ssavage on LAPJG3WLY3PROD with BILLS