Insight Center: Publications

Senate Passes Financial Services Reform Bill

Financial Services Alert

Authors: Richard P. Eckman, Timothy R. McTaggart, Frank A. Mayer III, Daniel G. Murray, Audrey D. Wisotsky, Gregory J. Nowak and Matthew A. Vigunas


On May 20, 2010, the U.S. Senate in a 59-39 vote passed the controversial Restoring American Financial Stability Act of 2010 (S. 3217), capping a chaotic and partisan battle over revamping the regulation of the financial services industry.

On March 15, 2010, Sen. Christopher Dodd (D-Conn.), Chairman of the Senate Committee on Banking, Housing & Urban Affairs, released a draft of the legislation (the Dodd Bill or Bill), after months of trying to come up with a compromise bill that would earn bipartisan support. On April 19, the Dodd Bill was voted out of committee on a party-line vote, with no debate and no amendments offered. During weeks of procedural wrangling and bitter partisan debate in the full Senate, some 400 amendments were prepared before cloture was invoked and the bill was passed.

The Dodd Bill now moves to conference committee, where House and Senate conferees will attempt to reconcile the provisions of the Bill with the House version, H.R. 4173 (the House Bill), which passed the House on December 11, 2009. The outlines of the bills are similar, but significant differences remain that will need to be hammered out in conference. On May 25, 2010, Senate Democrats named the Senate conferees who will negotiate the final version of the Bill. The conferees include seven Democrats and five Republicans. The House conferees will likely be named in early June. A final bill is expected to be voted on in late June or early July.

Unless otherwise noted below, the Dodd Bill would be effective one day after enactment.

Highlights of the Dodd Bill

Establishing the Consumer Financial Protection Bureau

Powers of the CFPB

The Dodd Bill would establish the Consumer Financial Protection Bureau (the CFPB), a division of the Federal Reserve Board (FRB).1 It would have rulemaking authority to protect consumers with respect to consumer financial products or services, defined as any financial product or service to be used by a consumer primarily for personal, family or household purposes.2 The CFPB’s director would be appointed by the President and confirmed by the Senate. The CFPB would have authority to pass rules applicable to all banks and non-banks with respect to consumer financial law. However, it would only have examination and enforcement powers over banks and credit unions with greater than $10 billion in assets, all mortgage-related businesses, and certain nonbank financial companies such as payday lenders, debt collectors and consumer reporting agencies. Banks and credit unions with assets under $10 billion will continue to be examined by their current regulators. In addition, any service provider to a depository institution would be subject to the enforcement power of the CFPB. A service provider is defined as any person that provides a material service to a covered person in connection with the offering or provision of a consumer financial product or service, including the design, operation, maintenance or processing of a consumer financial product. A service provider to a "substantial" number of such entities would be subject to the authority of the CFPB.

The Dodd Bill exempts certain businesses and activities, except in limited circumstances, from the CFPB’s authority. Those businesses and activities include, among other things, merchants, retailers or other sellers of nonfinancial goods or services who extend credit directly to a consumer "exclusively" for the purpose of enabling consumers to purchase the product. In addition, subject to certain exceptions, the CFPB would not have rule making, supervisory or enforcement authority over real estate brokers and agents, manufactured and modular home retailers, accountants and tax preparers. The Bill also bars the CFPB from setting usury limits for the extension of credit to consumers unless otherwise explicitly authorized by law.

The CFPB notably may take any authorized action to prevent a covered person or service provider from committing or engaging in an unfair, deceptive or abusive act or practice in connection with any transaction with a consumer for a consumer financial product or service. The Bill defines an "abusive" practice as an act or practice that: (1) materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or (2) takes unreasonable advantage of – (a) a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service; (b) the inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service; or (c) the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.

The CFPB may prescribe rules identifying such acts or practices and include requirements for the purposes of preventing such acts or practices. However, Amendment 3758 preserves the authority of the Federal Trade Commission (FTC) under the Federal Trade Commission Act to enforce any such rule as to a person subject to the FTC’s jurisdiction.

Pepper Points – The very existence of the CFPB would substantially inhibit any meaningful coordination of safety and soundness with the consumer protection missions of depository institutions. Indeed, this schism between the dual goals of regulation would result in the CFPB having the authority to trump the applicable safety and soundness regulator, raising the likelihood of increased instability in the financial system. In fact, this approach follows that taken in regulating Fannie Mae and Freddie Mac. In that instance, the Department of Housing and Urban Development (HUD) set consumer standards while the Office of Federal Housing Enterprise Oversight supervised the safety and soundness of the two housing enterprises. Ultimately, as many have argued, the consumer standards set by HUD undermined the solvency of Fannie and Freddie, which have become the largest recipients of federal bailout funds.

In avoiding abusive practices, the dilemma that institutions will encounter – and regulators may exploit – is the practical application of the statutory definition. Similar to the concepts of an "unfair" or "deceptive" practice under the Federal Trade Commission Act, the notion of an "abusive" practice is inherently subjective and leaves institutions with significant uncertainty in avoiding committing such practices. As in the case of unfair or deceptive practices enforcement, we are likely to see regulators attempting to cite certain purportedly "abusive" practices, where such practices may have been occurring with examiners’ full knowledge for extended periods. Institutions also are likely to see what might appear to be inconsistent enforcement, where the regulators find the conducting of a certain practice at one institution to be acceptable, and a similar practice at another institution to be abusive. In short, as with unfairness and deceptiveness, the concept of abusive practices offers too much discretion for regulators and too little clarity for institutions.


The Bill contains important clarifications of preemption of state law, and the authority of state attorneys general. The Bill permits state attorneys general to bring a civil action in the name of the state against a national bank or federal savings association to enforce a regulation prescribed by the CFPB and to secure remedies under the Bill or other federal law. Before initiating any such action, the state authority must provide the FRB with a copy of the complete complaint to be filed. The CFPB may then intervene and remove the action to federal court.

The Bill also clarifies the scope of federal preemption of state consumer financial laws. The Bill provides that state consumer financial laws are only preempted if: (1) the state law is discriminatory against national banks in comparison to banks chartered by that state; (2) the state law is preempted in accordance with the Supreme Court’s decision in Barnett Bank v. Nelson, 517 U.S. 25 (1996), as applied by any court, by regulation of the OCC, or by determination of the Comptroller of the Currency on a case-by-case basis; or (3) the state law is preempted by some other provision of federal law.

The Bill codifies the Supreme Court’s decision in Cuomo v. Clearing House Ass’n, 129 S. Ct. 2710 (2009), in providing that state attorneys general may bring a civil action against a national bank or federal savings association to enforce applicable law.

Pepper Points – The Bill does not expand the current state of preemption, in that state law is still preempted, and valid preemption determinations made by the OCC either by regulation or order are still binding.

The Bill does, however, add a range of new laws that can be enforced through civil litigation by state attorneys general – specifically, the regulations promulgated by the CFPB. Even then, it remains to be seen as to whether and how frequently the CFPB intervenes in state enforcement attempts. One notable deficiency in the Bill is that while it requires state authorities to consult with the CFPB, and gives the CFPB the opportunity to intervene, it does not provide that such intervention would curtail the state action. Regardless of whether the CFPB deemed the action worth pursuing, the state authority may continue to prosecute the case.

Snowe-Pryor Amendment

In the final days of the debate on the Bill, Senators Olympia Snowe (R-Maine), and Susan Collins (R-Maine) won approval of a the so-called "speed bump" amendment. Amendment 3883 is similar in concept to the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), which requires the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA) to issue a small business impact statement, including recommendations from a small business panel, during the agencies’ rulemaking processes. Under the SBREFA, when the EPA or OSHA conduct the required pre-proposal Small Business Advocacy Review Panels, the panel reports, its recommendations and data it develops are made part of the agencies’ proposed rules. This process has the potential to take years to complete.

The Snowe-Pryor Amendment achieves a similar result. Under the amendment the CFPB is designated as a "covered agency" for purposes of the Regulatory Flexibility Act of 1980. This designation would require the agency to convene a small business review panel before issuing a rulemaking that has a significant impact on small businesses. In addition, the amendment specifies that during the rulemaking process, the CFPB also would have to consider the impact that its rules would have on the cost of credit for small businesses, and consider specific alternatives to minimize increases in the cost of credit. While this amendment garnered support from a variety of organizations, including the U.S. Chamber of Commerce, the Small Business & Entrepreneurship Council, and the Associated Builders and Contractors, others criticize that the amendment will delay small businesses’ access to credit.

Pepper Points – While critics argue that the Snowe-Pryor Amendment is intended to unnecessarily slow the rulemaking process, advocates assert that given the uncertainty of a new regulatory agency with sweeping powers affecting consumers and industry, particularly small businesses, the transparency and deliberation that the amendment will require is worth any slowing of the rulemaking process.

Arbitration Clauses

The Bill requires the CFPB to conduct a study of, and provide a report to Congress concerning, the use of mandatory arbitration clauses in governing documents for financial services products. After developing the report, the CFPB is granted the discretion to prohibit or impose conditions or limitations on the use of an arbitration clause with a consumer financial product.

Pepper Points – For the past 10 years, the use of arbitration clauses in consumer financial services contracts has been a source of an ongoing dispute between the industry and class action plaintiffs’ lawyers. Industry advocates maintain that arbitration clauses are a fair and effective means to control litigation costs, particularly for small-dollar claims. Plaintiffs’ lawyers claim that arbitration clauses defeat class actions and prevent consumers from redressing grievances that would otherwise not be resolved on an individual basis. In the great tradition of the common law, state and federal courts have been working to resolve this tension and have made great progress in establishing under the Federal Arbitration Act (FAA) a body of case law addressing the enforceability of arbitration clauses in all consumer contracts. But now Congress, through virtually identical provisions in the Dodd and House Bills, is poised to give the CFPB the authority to overturn all of this case law and abrogate the 85-year-old FAA for arbitration agreements between consumers and financial services companies. We wonder whether the political appointees of the CFPB will be in a better position to referee this dispute than Article III judges and their state counterparts. It might be better for the courts to continue to work through the legal issues without having to address an overlay of regulations. We hope that as part of its required study of the use of arbitration clauses, the CFPB will give serious consideration to deferring to the unbiased expertise of the judiciary on this subject.

Reorganizing the Bank Regulators

Much of the current regulatory structure would remain the same. However the Office of Thrift Supervision (OTS) would be eliminated and no new thrifts could be chartered.3 Supervision of existing federal thrifts would be transferred to the OCC, and supervision of state thrifts would be transferred to the Federal Deposit Insurance Corporation (FDIC). In addition, supervision of thrift holding companies would be transferred to the FRB.

Pepper Points – As originally proposed, the Bill would have stripped the FRB of all banking regulatory authority except for bank holding companies with assets of more than $50 billion. The Bill would have signaled to market participants that large financial institutions have a special regulator, the FRB, which would not allow those institutions to fail. With the passage of Senate Amendment 3759, the regulatory structure for most banks was returned to the status quo, except for the elimination of the OTS, as noted above.

This retention of existing FRB oversight responsibilities will dispel some of the perception that some institutions might be "too big to fail."

New Authority and Governance of the FRB

Emergency Lending Authority

During times of severe economic stress, the FRB would be able to establish emergency lending facilities to provide liquidity to institutions with sufficient collateral.4 The FRB would have to adopt policies and procedures to ensure that a loan would not help a failing financial company. The OCC would have the power to review and examine the lending facilities.

Authority to Require Reports and Conduct Examinations

The FRB would have the power to require nonbank financial companies, including foreign nonbank financial companies, deemed by the newly created systemic risk regulator (as discussed below) to pose a systemic risk to the U.S. financial system (Systemically Important Nonbank Financial Companies) and their subsidiaries to submit reports under oath regarding their financial conditions, risk management systems, and operations that pose a threat to the U.S. financial system.5 The FRB also would have the power to examine Systemically Important Nonbank Financial Companies to obtain the same information required in the reports.

Enforcement Authority6

The FRB would have the power to exercise the same enforcement authority it has over bank holding companies over Systemically Important Nonbank Financial Companies, and their subsidiaries. The FRB also would have the power to recommend that the primary financial regulator of depository institutions or functionally regulated subsidiaries institute enforcement proceedings.

Merger and Acquisition Authority

The FRB currently has to approve most acquisitions of a bank by a bank holding company and can reject such acquisitions under certain circumstances. The Dodd Bill would give the FRB the same powers over bank acquisitions by Systemically Important Nonbank Financial Companies.7 With respect to the acquisition of nonbanks, the Dodd Bill would require Systemically Important Nonbank Financial Companies and bank holding companies with $50 billion or more in total consolidated assets (collectively, Systemically Important Companies) to provide advance notice to the FRB before acquiring a company that holds consolidated assets of $10 billion or more and is engaged in activities that are financial in nature as defined under Section 4(k) of the Bank Holding Company Act (BHC Act), such as lending or underwriting securities.

New Governance

A new position on the Federal Reserve Board of Governors, the Vice Chairman for Supervision, would be created to oversee supervision and regulation and make policy recommendations for the FRB with respect to firms that the FRB supervises. The Vice Chairman for Supervision would be appointed by the President with the advice and consent of the Senate and would report to Congress biannually.


The Bill requires a one-time audit of the Federal Reserve Board by Congress’ investigative arm, the Government Accountability Office (the GAO), covering the period from December 2007 to the present. The Bill specifically directs the GAO to examine potential conflicts of interest between the FRB and the banks that received assistance.

New Resolution Authority of the FDIC

The FDIC would be given the power to act as receiver for and liquidate any bank holding company, financial holding company, or other company that was determined to pose systemic risk. For the FDIC to be appointed receiver of such financial companies, two-thirds of the members of each of the Board of Governors of the FRB and Board of Directors of the FDIC first would have to recommend to the Treasury Secretary that such financial company is in "default or danger of default" and poses a systemic risk to the U.S. financial system. If, after receiving notification that the Treasury Secretary has determined to place a company into receivership, such company refuses to acquiesce to receivership, then the FDIC may petition the U.S. District Court for the District of Columbia for an order authorizing the receivership. Either party may appeal the court’s decision to the U.S. Circuit Court of Appeals for the District of Columbia. The FDIC also would have resolution authority over broker-dealers that are registered with the SEC and are members of the Securities Investor Protection Corporation, using the same procedures applicable to financial companies outlined above, except that two-thirds of the Commissioners and Chairperson of the Securities and Exchange Commission (SEC), instead of two-thirds of the members Board of Directors of the FDIC, and two-thirds of the members of the Board of Governors of the FRB, must recommend to the Treasury Secretary that a broker-dealer is in default or danger of default and poses systemic risk.

The House Bill would pay for this enhanced resolution process through a $150 billion fund collected from the largest financial institutions, while the Dodd Bill would require post-failure recoupment of the resolution costs through mandatory contributions from large financial institutions.

Pepper Points – Under the Dodd Bill, as receiver, the FDIC, with the consent of the Treasury Secretary, is explicitly authorized to pay creditors and shareholders of the company more than they would be entitled to receive in bankruptcy.8 Paying creditors and shareholders more than they are otherwise entitled to under normal resolution processes may be viewed as a bailout of institutions and their creditors.

Establishing the Financial Stability Oversight Council

The Dodd Bill would create a nine-member Financial Stability Oversight Council (the Oversight Council) chaired by the Treasury Secretary and composed of the heads of the FRB, the SEC, the Commodity Futures Trading Commission (CFTC), the OCC, the FDIC, the Federal Housing Finance Agency, the proposed CFPB and an insurance industry expert appointed by the President. The Oversight Council would identify, monitor and mitigate systemic risks to the financial system. To achieve this goal, the Oversight Council would have the power to subject Systemically Important Nonbank Financial Companies to FRB regulation. The Oversight Council also would be able to require large financial companies to divest certain holdings or terminate certain activities if the FRB determines that such companies pose a grave threat to the financial stability of the United States. The Oversight Council would be supported by a newly created Office of Financial Research within the Treasury Department that would assist in collecting data and analyzing systemic risks.

The Oversight Counsel would act as a systemic risk regulator and would increase the oversight already given to large financial institutions and banks. In addition, the Council would have the authority, under certain circumstances, to set aside or stay the effectiveness of a final regulation of the CFPB, if the Council were to determine that the subject regulation would put the safety and soundness of the U.S. banking system or would put the stability of the U.S. financial system at risk.

Pepper Points – One of the chief concerns with the establishment of the Oversight Council is that by having the power to apply heightened supervision to certain institutions, market participants will interpret this heightened supervision as an implicit government guaranty that prevents such institutions from failing.

Regulating Systemic Risk

The Oversight Council, upon a two-thirds majority vote, would have the authority to cause Systemically Important Nonbank Financial Companies to register with the FRB. The Oversight Council also would be able to recommend that the FRB impose enhanced prudential standards on Systemically Important Companies. The enhanced prudential standards could subject Systemically Important Companies to stricter capital and liquidity requirements, leverage limitations, concentration limitations,9 public disclosure and overall risk management. The standards also could require Systemically Important Companies to submit plans for their swift and orderly resolution (so-called "funeral plans") in the event of a financial crisis. Compelling the submission of funeral plans is unprecedented, requiring affected companies to not only strive for profitability but also engage in the daunting task of analyzing their own demise.10 The standards also could require Systemically Important Companies to report their credit exposures to other Systemically Important Companies, giving regulators an even broader picture of the finances of affected firms. Separately but just as importantly, a bank holding company that received Troubled Asset Relief Program funds would continue to be supervised by the FRB even if it ceases to be a bank holding company (commonly referred to as the "Hotel California Rule," derived from this lyric from a 1970s Eagles song: "You can check out any time you like, but you can never leave.").

Codifying the Volcker Rule: Restricting Bank Proprietary Trading

Under the Bill, the FRB, OCC and FDIC would have the authority to prohibit banks, bank holding companies and certain affiliates from engaging in proprietary trading, or trading for their own benefit, divorced from that of their customers, with federally insured funds. Named after former Federal Reserve Board Chairman Paul Volcker, the "Volcker Rule" would, however, permit banks, bank holding companies, and their affiliates to engage in proprietary trading in the obligations of the U.S. government and its agencies, Ginnie Mae, Fannie Mae, and Freddie Mac, and state and municipal governments. Banks and their affiliates also would be prohibited from sponsoring and investing in private equity funds and hedge funds. Once the FRB, OCC and FDIC issue final regulations implementing these provisions,11 financial firms would have two years from the date of issuance to comply. Foreign firms that conduct their activities outside of the United States and are not controlled by a U.S. firm are expressly exempted from the Volcker Rule.

The House Bill does not contain the codification of the Volcker Rule, as President Obama did not propose inclusion of the rule until January 2010, a month after the House Bill passed.

Creating the Office of National Insurance

A new Office of National Insurance within the Treasury Department would be created to monitor, but not regulate, the insurance industry and recommend to the Oversight Council any insurers it deems to be systemically important. The Office of National Insurance also would manage international insurance affairs, including developing U.S. policies, representing the U.S. in the International Association of Insurance Supervisors and assisting the Treasury Secretary in negotiating international agreements applicable to insurance or reinsurance.

Implementing Risk Retention Requirement for Securitizations

Issuers and sponsors (securitizers) of a securitized product, such as a mortgage—or other asset-backed security, would be required to retain 5 percent of the credit risk of the issuance, or less if the originator of the underlying collateral meets certain underwriting standards established by the SEC. Compliance with those standards would indicate that a reduced risk associated with the underlying assets would be low enough to justify the issuer and sponsor retaining less risk. Forthcoming regulations will establish the risk levels that will allow the issuer of the underlying asset and the securitization’s sponsor to retain less risk.12 In addition, under the regulations to be established, the SEC, OCC and FDIC will have the discretion to allocate the risk retention percentage (5 percent or less) between the securitizer of the asset-based security and the originator of the asset who sells the asset to the securitizer. The SEC, OCC and FDIC also will have the authority to apply different underwriting standards and risk retention levels to different asset classes, including residential and commercial mortgages and automobile loans.

Pepper Points – Congress’s goal in requiring risk retention by securitizers of mortgage and other asset-backed securities and originators of the underlying assets appears to be focused on incentivizing securitizers and originators to provide a more sound financial product for sale into the secondary market. Under this theory, if the issuer and/or originator are forced to retain some of the risk, they would be less likely to sell products into the secondary market that do not meet designated underwriting standards and/or which are more likely to default, as some would say was associated with the subprime meltdown. However, Congress appears to ignore the realities of the securitization market, and the effects that the risk retention provision will have.

In combination with accounting and bank capital rule changes, a risk retention requirement could force the entire securitization to be retained on bank balance sheets for accounting and capital purposes. Securitization would then become economically unworkable. A more sensible approach would direct bank regulators to set underwriting standards that include a down payment requirement for all residential mortgages.13

Requiring the Registration of Hedge Fund and Other Private Fund Advisers14

All investment advisers with greater than $100 million in assets under management would be required to register as investment advisers with the SEC. Currently, investment advisers with greater than $25 million in assets under management and 15 or more clients are required to register. The Dodd Bill does not state whether currently registered investment advisers with greater than $25 million but less than $100 million will be allowed to remain registered with the SEC, or will be required to de-register. The SEC most likely will have to provide guidance through subsequent rulemaking unless the final bill resolves the issue. The exemption from registration for advisers with "fewer than 15 clients" would be eliminated for all advisers.

Pepper Points – Several states (including Delaware, but not generally Pennsylvania and New Jersey) deny managers resident in the state the ability to collect performance fees or performance allocations from client accounts, unless the manager is a federally registered adviser. Being federally registered is very important for such managers. Managers in affected states will need to consider other options, including moving operations to states without such prohibitions, merging with other managers to get assets under management over the new threshold and increasing base management fees (which would be going against the current trend in the marketplace). This will present yet another barrier to entry for start-up managers in these states. These prohibitions also apply to private equity and venture capital managers in the affected states.

However, advisers to venture capital funds, private equity funds and small business investment companies will not be required to register with the SEC. The Dodd Bill does not define "venture capital fund" or "private equity fund." Instead, the SEC would be required to define these terms within six months after the Dodd Bill is passed. Advisers to these funds still would be required to maintain certain books and records subject to SEC review.

Investment advisers also would be subject to recordkeeping and reporting requirements designed to allow the Oversight Council to monitor systemic risk. The Dodd Bill would give the SEC power to define the recordkeeping and reporting requirements, but states that for each private fund, the fund must describe: (1) the amount of assets under management and use of leverage; (2) counterparty credit risk exposure; (3) trading and investment positions; (4) valuation policies and practices of the fund; (5) types of assets held; (6) side arrangements or side letters; (7) trading practices; and (8) such other information "necessary and appropriate" to protect investors and assess systemic risk.

Pepper Points – While the principle behind hedge fund reform – providing investors with better information about the hedge funds – is a legitimate one, requiring registration of hedge fund advisors may not be the solution, and the SEC is not oriented to function as a systemic risk regulator like the Bill envisions. In the past, the SEC has been unsuccessful in attempts to function as a systemic risk regulator, such as with the Consolidated Supervised Entity program. Requiring hedge fund advisor registration also poses the risk of giving investors a false sense of security. In fact, Bernard Madoff used the fact that the SEC had inspected his firm as a way to reassure skeptical investors.

Even if protecting unsophisticated investors is the goal of most of the financial reform provisions of the Bill, investing in hedge funds already carries sufficient safeguards. For example, hedge funds are only open to wealthy investors, on the theory that those investors can retain financial professionals to advise them about investments, are more sophisticated investors, and are in a position to better handle losses. Less-sophisticated investors are able to invest in investment companies registered with the SEC, which are already subject to high levels of oversight.

Pepper Hamilton’s Financial Services Practice Group will continue to monitor developments in the financial services reform process. For additional information regarding the issues addressed in this Alert, please contact any of the authors.


1 Unlike the Senate Bill, the House Bill envisions the new consumer financial protection authority as a stand-alone independent agency.

2 The Consumer Financial Protection Bureau would be established effective as of the date of the Dodd Bill’s enactment. The CFPB’s rulemaking authority would be effective as of the date that the Treasury Secretary transfers consumer financial protection authority from existing regulators to it, which must occur within six months of the date that the Dodd Bill is enacted.

3 The OTS would be eliminated effective one year and 90 days from the date that the Dodd Bill is enacted unless extended.

4 The FRB would be required to establish policies and procedures governing the emergency lending program "[a]s soon as practicable" after the Dodd Bill’s date of enactment.

5 The FRB would be required to issue final rules implementing its authority to require reports and conduct examinations within 30 months of the Dodd Bill’s enactment.

6 The FRB would be required to issue final rules implementing its enforcement authority within 30 months of the Dodd Bill’s enactment.

7 The FRB would be required to issue final rules implementing its merger and acquisition authority within 30 months of the Dodd Bill’s enactment.

8 Dodd Bill § 210(d)(4).

9 Concentration limitations would be effective three years after the date of the Dodd Bill’s enactment, although the FRB may extend the effective date an additional two years.

10 The FRB would be required to issue rules implementing the funeral plan requirements within 18 months of the Dodd Bill’s enactment.

11 The FRB, OCC and FDIC would be required to issue joint final regulations implementing the Volcker Rule within 15 months after the date of the Dodd Bill’s enactment.

12 Regulations relating to credit risk retention requirements for residential mortgage assets would become effective one year from the date of they are published in the Federal Register. Regulations relating to credit risk retention requirements for all other asset classes would become effective two years from the date they are published in the Federal Register. The regulations must be published within 270 days of the Dodd Bill’s passage.

13 See John C. Dugan, Comptroller of the Currency, Speech Before the American Securitization Forum (Feb. 2, 2010) (available at: http://www.occ.treas.gov/ftp/release/2010-13a.pdf) ("But while lax underwriting is plainly a fundamental problem that needs to be addressed, mandatory risk retention for securitizers is an imprecise and indirect way to do that, and is by no means guaranteed to work. How much retained risk is enough? And what type of retained risk would work best – first loss, vertical slice, or some other kind of structure.").

14 Provisions relating to the registration of hedge fund and other private fund advisers would become effective one year from the date of the Dodd Bill’s enactment.

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