Page:United States Statutes at Large Volume 124.djvu/1458

 124 STAT. 1432 PUBLIC LAW 111–203—JULY 21, 2010 (3) OFF-BALANCE-SHEET ACTIVITIES DEFINED.—For purposes of this subsection, the term ‘‘off-balance-sheet activities’’ means an existing liability of a company that is not currently a balance sheet liability, but may become one upon the happening of some future event, including the following transactions, to the extent that they may create a liability: (A) Direct credit substitutes in which a bank sub- stitutes its own credit for a third party, including standby letters of credit. (B) Irrevocable letters of credit that guarantee repay- ment of commercial paper or tax-exempt securities. (C) Risk participations in bankers’ acceptances. (D) Sale and repurchase agreements. (E) Asset sales with recourse against the seller. (F) Interest rate swaps. (G) Credit swaps. (H) Commodities contracts. (I) Forward contracts. (J) Securities contracts. (K) Such other activities or transactions as the Board of Governors may, by rule, define. SEC. 166. EARLY REMEDIATION REQUIREMENTS. (a) IN GENERAL.—The Board of Governors, in consultation with the Council and the Corporation, shall prescribe regulations estab- lishing requirements to provide for the early remediation of financial distress of a nonbank financial company supervised by the Board of Governors or a bank holding company described in section 165(a), except that nothing in this subsection authorizes the provision of financial assistance from the Federal Government. (b) PURPOSE OF THE EARLY REMEDIATION REQUIREMENTS.— The purpose of the early remediation requirements under subsection (a) shall be to establish a series of specific remedial actions to be taken by a nonbank financial company supervised by the Board of Governors or a bank holding company described in section 165(a) that is experiencing increasing financial distress, in order to mini- mize the probability that the company will become insolvent and the potential harm of such insolvency to the financial stability of the United States. (c) REMEDIATION REQUIREMENTS.—The regulations prescribed by the Board of Governors under subsection (a) shall— (1) define measures of the financial condition of the com- pany, including regulatory capital, liquidity measures, and other forward-looking indicators; and (2) establish requirements that increase in stringency as the financial condition of the company declines, including— (A) requirements in the initial stages of financial decline, including limits on capital distributions, acquisi- tions, and asset growth; and (B) requirements at later stages of financial decline, including a capital restoration plan and capital-raising requirements, limits on transactions with affiliates, management changes, and asset sales. SEC. 167. AFFILIATIONS. (a) AFFILIATIONS.—Nothing in this subtitle shall be construed to require a nonbank financial company supervised by the Board 12 USC 5367. Regulations. 12 USC 5366.