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Kcy Exclusionsin the Dodd Bill as Filed April 19,2010 PRovISION

g6l9 Volcker RuleProhibitions,

SUMMARYoF RULE

KEY EXCLUSIoNS

Prohibits proprietary tradingand investing in or sponsoring private funds.

r Foreigncompanies'foreign proprietarytrading, r Foreigncompanies' investments in or sponsorship offoreign privatefunds, De-Banking("Hotel California Bankholdingcompanies r Bankholdingcompanies that with Rule"),$ I 17 receivedTARP assistance and then Iessthan$50 billionin assets as ceaseto be bankholdingcompanies o f J a n u a r1y, 2 0 1 0 . areautomatically deemedto be r Thrift holdingcompanies that systemicallyimportantnonbank receivedTARP assistance, financialoompanies, Fundingfor the Officeof Financial Imposesan annualassessment r Nonbankfinancialcompanies' on Research, nonbankfinancialcompanies and $155 thatarenotsystemically bankholdingcompanies to provide important, fundingfor the Office of Financial r Bankholdingcompanies with Research, I e s st h a n$ 5 0b i l l i o ni n a s s e t s . Designation, Systemic Authorizes r Foreignoperationsof foleign theCouncilto identifua $ I l3 nonbank financial company as nonbankfinancialcompanies are systemically important. generally not considered by the Councilin makingits determination. - Enhanced DirectstheFederal r Nonbankfinancialcornpanics Systemic Regulation Reserve to prudential establish Prudential Standards, enhanced thatarenot systemically {iI 65 including oncapitaland standards, important. plan r Bankholdingcompanies Iiquidify,andimpose resolution with requirements. andconcentration Iessthan$50billion in assets. - Approval Requires Reserve approval o Nonbankfinancialcompanies Regulation of Federal Systemic for acquisitions of largenonbank M&A Activify,$163 thatarenot systemically companies, important. r Bankholdingcompanies with lessthan$50billion in assets. r Nonbankfinancialcompanies' Requiresthe FoderalReserveto SystemicRegulation- Activities on activitiesor imposerestrictions thatarenot systemically Restrictions and BleakupPower, up ofan imposeassetsale/break impoftant. $r 2 l . Bankholdingcompanies institutionthat is deemedto posea with "gravethreat"to U.S.financial lessthan$50 billion in assets, stabiliw, o Nonbankfinancialcompanies Permitsthe Councilto require of CertifredRepofts, Submission and nonbank financial conrpanies that arenot systemically r 6 $r to submit bankholdingcompanies important. r Bankholdingcompanies certifiedreportson the financial with conditionof thecompany, lessthan$50billion in assets, . Non-publiclyhadedcompanies. by large, a riskcommittee for a Risk Committee, Requires Requiremsnt I Nonbankfinancialcompanies companies andtheirholding insurance includethriftholdingcompanies, andhedgefundsandsimilarprivatefunds. and theirholdingcompanies, broker-dealers companies,

PROVISION

$r6s

Knv Exct uslollrs

SUMMARYoF RULE

publiclyhadedbankholding companies andsystemically impoftantpubliclytradednonbank flrnancial companies,

.

Bankholdingcompanies with l e s st h a n$ 1 0b i l l i o n . o Nonbankfinancialcompaniesl that arenot systemically important, Carve-outs for FarmCreditSystem FarmCreditSysteminstitutions (c.$214billionin assets Institutions carved-outfrom: for all suchinstitutions), o thedefinitionof"nonbank l)(c),e4l, financialcompany"for systemic $$ 102(aX3XB),201(aXl l 027(k) risk regulation, . thedefinitionof "financial company"for the purposesoI resolutionauthorily. o Risk retentionrequirements for securitizations. r Enforcement authorifyof the CFPB, (c) r Resolution Authorify, UpontheTreasurySecretary's Insurance companies and $203 systemicrisk determination anda insurance companysubsidiaries orderby the OrderlyLiquidation (l iquidatedor rehabilitated Panel,theFDIC is appointed understatelaw). receiverandgivenresolution r (subject Coveredbroker-dealers powers, to resolution underrulessimilar to thosethatapplyunderSIPA). r Foreigncompanies, r Companies thatarenot engaged" in "predominantly financialactivities, o Nonbankfinancialcompanies' Fund,$210(o) Creates$50 billion orderly OrderlyLiquidation liquidationfund,capitalizedby that arenot systemically assessments on cefiainfinancial important, companies, r Bankholdingcompanies with lessthan$50 billionin assets, (tobe Imposes a fccof approximately Firmswith $50 billionor lessof ObamaBankTaxProposal peryear liabilities legislation) 0,I 5%of covered assets, includingfirmsthat proposed asindependent TARPshoftfall, in orderto recoup receivedTARP funding. Foreignfirms,unlessU.S, engagein certain subsidiaries andhold financialactivities of morethan consolidated assets $ 5 0b i l l i o n , z r Nonbankfinancialcompanies' Imposesan additionalannual Reserve Fundingfor the F'ederal assessment on bankandthrift thatarenot systemically B o a r d$, 3 1 8

holding companiss andsystemically impor-tanf, importantnonbankfi nancial r Bankandthriftholding

companies to providefundingfor the

with lessthan$50 comoanies

2 tf the aresubjectto thetax. is met,thentheU,S,subsidiaries $50 billionthreshold

PRoVISION

SUMMARY oT RULE FederalReserve.

Investment AdviserRegistration for Eliminates "privateinvestment Advisers, fromthe Private Investment exemption $$402, adviser" 403,407,408 Investment Advisors Act of 1940. newexemptions fiomthe Creates Investment Advisers Act. Studyof Exemptionsto Bank HoldingCompanyAct ("BHC Act") andRelatedMoratorium,$603

Changein ControlofIndushial Banks,CreditCardBanksandTrust Banks,$603

by Bank Excessive Compensation Companies, Flolding $956

andRegulationof Swap Registration DealersandMajor Swap Participants, $$717,753 Subjecl to cltarye given the lnlroduclion of the Senate Agrlculturc bill,

CorporateGovetnanceand Title IX, ExecutiveCompensation, E andC) Subtitles Financial Bureauof Consumer Title X Protection.

Requiresa studyof theexomptions to the BHC Act for thrift holding companies andholdingcompanies of industrialbanks,creditcard banks,andhust banks;imposesa moratoriumon new deposit insurancefor indusrrialbanks,credit cardbanks,andtrustbanksowned by commercialfirms, Prohibitsthe appropriate Federal bankingagencyfor a periodof3 yearsfrom approvinga changein controlofan industrialbank,credit cardbankor trustbankthatwould resultin controlofthe bankby a commerclalfirm, Requiresthe FederalReserveto makingit an establishstandards andunsoundpracticefor unsafle to offer bankholdingcompanies excessive compensation,

regislration, imposes Requires and capitalandmarginrequirements of collateral requires segregation and to swapdealers withrespect majorswapparticipants,

requirements lmposesheightened with respectto corporate govemance andexecutive compensation. CFPBhasauthoriryto: (i) make rulesand issueordersto achieve objectivesof consumerfi nancial laws;(ii) gatherinformation, includingrequiringthesubmission underoath;and(iii) of information enforcefederalconsumerfinancial laws,

KEYExcLUsIoNs billionin assets.

o Advisers to venture capitalfunds andprivateequifyfunds. r Foreignprivateadvisers. UnliketheHousebill, these traditionalexemptionsto the BHC Act arenotautomatically eliminated, thuspotentiai ly preserving "loopholes"flor commercial firms.

r Bonafide mergersor acquisitions of commcrcial firms that controlindustrialbanks. creditcardbanks,or trustbanks (e,g,,CE andTarget),as determined by the appropriate lederalbankinsasencv. r All oompanies otherthanbank holdingcompanies,

A comrnercialentily that does not qualiff as a "major swap participant,"which is an entity thatmaintains net a substantial positionin outstanding swapsor securiry-based swaps,excluding positions heldfor hedging risk,andwhose commercial failureto performunderthe termsof its swapswouldcause significantcreditlossesto its swapcounterparties, . In general,companies that are with the SEC. not registered

to whichthe Entitieswith respect authoriry CFPBhasno enforcement andsupervisory but hasrulemaking authoriry: r Insureddepository institutions andinsuredcreditunions,each w i t h t o t a la s s e fosf $ 1 0b i l l i o no r less.

PROVISION

SUMMARYOF RULE

KpyExcr,usroNs Entitieswith respectto which the CFPBhasno enflorcement authority (but with respectto which the CFPB may,dependingon the drafters' intent,exerciserulemakingand supervisoryauthority): o Entitiesregulatedby the SEC, but only to the extentsuch entitiesactin a regulated capacily, r Entitiesregulated by theCFTC, but only to theextentthat activitiesaresubjectto the jurisdictionof theCFTCunder theCommodityExchange Act. r Entitiesregulatedby a state securities commission, to the extentthey act in suclrregulated capacity. r Insurancecompanies, exceptto thc extentthey offer consumer financialproducts or services or aresubjectto certainfedelal consumer financiallaws, Entitiesnot subjectto theCFPB's rulemalcing, supervisoryor enforcement authority,exceptto the extenttheyoffer consumcrfinancial productsor services: o Merchantsthatextendpurchase moneyoreditdirectlyto or collectsuchdebt consumers, or sellor conveysuchdebtif or in defbult, delinquent r Personsthatperformrealestate brokerageactivities, r EmployeeBenefitand Plans, Comoensation

ExemptionsLeft to AgencyDiscretion l, Enhanced PrudentialStandards, with the $170- FederalReserve,in consultation FinancialStabilityOversightCouncil,is directedto establishcriteriafor exemptingtypes or classesofnonbankfinancialcompanies from enhanced FederalReservesupervision. 2. InformationReportingby Insurers,$502- Office of NationalInsurancemay establisha minimumsizethresholdfor insurersthat aresubjectto its informationreporting requirements. 3, Permissive Exemptionfrom ClearingandTrading,$713,753- The CFTCandSEC, subjectto Councilapproval,may granta "permissiveexemption"for a swapwith an enduserwherethe enduserdoesnot meetthe eligibilify requirements of a clearingagency, 4, Exemptionfrom CapitalandMarginRequirements, $717,753- The relevantregulator for an institution,subjectto Councilapproval,may exemptswapdealersandmajorswap participantsfrom capitaland marginrequirementsfor swapswith an end user (a) is not a swapdealeror major swap counterparty whereoneof the counterparties participant,(b) is usingthe swapaspartof an effectivehedgeunderGAAP, and(c) is predominantly engagedin activitiesthat arenot financialin nature. Title VII - The CFTC andSECmay exempta swaprepository, 5. Extraterritoriality, derivativesclearingorganizationor (alternative) swapexecutionfacility from registration regulationby a bank if theCFTC/SECfindsthatthe entityis subjectto comparable regulatoror in its own country. 6. CreditRisk Retention,$941- FederalbankingagenciesandSECcanjointly adopt exceptions andadjustments to the risk retentionrules. exemptions, 7. CorporateGovemanceStandards, $971- The SECmay exemptan issuerfrom anyor all containedin subtitleG basedon criteriathe SEC standards ofthe corporategovernance or in thepublic interestor for theprotectionof investors. deemsnecessary 8. Bureauof ConsumerFinancialProtection,51022* The CFPBmay exemptany classof coveredpersons,serviceprovidersor consumerfinancialproductsor servicesfrom its to carry or appropriate suchan exemptionis necessary oversightif the CFPBdetermines out its duties.