H. Rept. 115-593 - STRESS TEST IMPROVEMENT ACT OF 2017115th Congress (2017-2018)
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[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-593
======================================================================
STRESS TEST IMPROVEMENT ACT OF 2017
_______
March 13, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 4293]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 4293) to reform the Comprehensive Capital
Analysis and Review process, the Dodd-Frank Act Stress Test
process, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Stress Test Improvement Act of 2017''.
SEC. 2. CCAR AND DFAST REFORMS.
Section 165(i) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5365(i)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (B)(i)--
(i) by striking ``3 different'' and inserting
``2 different''; and
(ii) by striking ``, adverse,''; and
(B) by adding at the end the following:
``(C) CCAR requirements.--
``(i) Limitation on qualitative capital
planning objections.--In carrying out CCAR, the
Board of Governors may not object to a
company's capital plan on the basis of
qualitative deficiencies in the company's
capital planning process.
``(ii) CCAR defined.--For purposes of this
subparagraph and subparagraph (E), the term
`CCAR' means the Comprehensive Capital Analysis
and Review established by the Board of
Governors.''; and
(2) in paragraph (2)--
(A) in subparagraph (A), by striking ``semiannual''
and inserting ``annual''; and
(B) in subparagraph (C)(ii), by striking ``3
different sets of conditions, including baseline,
adverse,'' and inserting ``2 different sets of
conditions, including baseline''.
SEC. 3. RULE OF CONSTRUCTION.
The amendments made by this Act may not be construed to prohibit an
appropriate Federal banking agency (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)) from--
(1) ensuring the safety and soundness of an entity regulated
by such an appropriate Federal banking agency; and
(2) ensuring compliance with applicable laws, regulations,
and supervisory policies, and the following of appropriate
guidance, by an entity regulated by such an appropriate Federal
banking agency.
Purpose and Summary
Introduced by Representative Lee Zeldin on November 7,
2017, H.R. 4293, the ``Stress Test Improvement Act of 2017''
improves the stress testing processes mandated by both Title I
of the Dodd-Frank Wall Street Reform and Consumer Protection
Act (``Dodd-Frank'') (P.L. 111-203) and the Federal Reserve for
bank holding companies by requiring certain bank holding
companies to conduct company-run stress tests once each year
rather than semiannually. This bill would also reduce the
number of supervisory scenarios from three to two--the baseline
and severely adverse scenario, do away with mid-year stress
tests, and prohibit the Federal Reserve's objection to a bank
holding company's capital plan based solely on qualitative
deficiencies.
Background and Need for Legislation
The Board of Governors of the Federal Reserve System
(``Federal Reserve'') administers a set of ``stress tests'' to
determine the ability of U.S. bank holding companies to
withstand periods of economic turmoil. The Federal Reserve
administers contemporaneously two stress tests, the
Comprehensive Capitol Analysis and Review (CCAR) and the Dodd-
Frank Act Stress Tests (DFAST) which together constitute one of
the greatest expansions of the Federal Reserve's powers in
recent history.
The Federal Reserve's stress tests have become a type of
``cat-and-mouse'' exercise whereby Federal Reserve supervisory
staff and bank compliance officers attempt to outwit one
another in a game without either rules or transparency. The
secrecy which surrounds the stress test regime makes it
difficult for Congress and the public to assess either the
effectiveness of the Federal Reserve's regulatory oversight or
the integrity of the findings yielded by the tests.
Academics have identified multiple problems which arise
from the lack of transparency in the stress-testing process. In
testimony before the Financial Services Committee on July 23,
2015, Columbia University Professor Charles Calomiris described
the stress test process as a ``Kafkaesque Kabuki drama in which
regulators punish banks for failing to meet standards that are
never stated (either in advance or after the fact). This makes
stress tests a source of uncertainty rather than a helpful
guide against unanticipated risks.'' Professor Calomiris went
on to question how such a secretive and opaque process could be
squared with basic American constitutional precepts:
In addition to the stress test's economic costs and
questionable contributions to financial stability, it is hard
to believe that the stress tests' current structure could occur
in a country like the United States, which prizes the rule of
law and adherence to due process. The current stress test
regime is objectionable as regulators at the Federal Reserve
not only impose unstated quantitative standards for bank
holding companies to meet certain stressed scenarios, but also
retain the option of simply deciding that banks fail on the
basis of a qualitative judgment unrelated even to their own
model's criteria.
Former Senator and Senate Banking, Housing, and Urban
Affairs Committee Chairman Phil Gramm, testified at a July 28,
2015, Financial Services Committee hearing, and echoed these
concerns: ``What does the stress test test? Not only does no
one know, but the regulators see that as a virtue. The Fed's
Vice Chairman has stated that giving banks a clear road map for
compliance might make it easier to game the test.' But isn't
the fact that compliance is easier when you know what the law
says the whole point of the rule of law?''
Indeed, the non-partisan Government Accountability Office
(GAO) agrees with former Senator Gramm. A November 2016 report
by the GAO, commissioned by Financial Services Committee
Chairman Jeb Hensarling, underscored these concerns. For
example, the GAO found that: (1) the Federal Reserve has not
always followed its own guidance or principles; (2) the Federal
Reserve cannot be reasonably assured that small adjustments to
its stress scenario variables would produce outcomes that
neither amplify nor dampen economic cycles; and (3) the Federal
Reserve has limited its perspective and has not always followed
its own guidance for banking institutions on model-risk
management practices. The report highlighted the lack of
transparency in the process:
The fundamental flaws in the Federal Reserve's stress test
methodology were also laid bare by an October 29, 2015, report
issued by the Federal Reserve's own Office of Inspector General
(OIG), which examined the extent to which the model risk
management practices the Fed uses in its supervisory stress
testing program are ``consistent with supervisory guidance on
model risk management'' that the Fed applies to the banking
organizations it oversees. The report found significant
deficiencies related to the Federal Reserve's model validation
and broader governance practices.
In addition, the OIG report noted that ``similar findings
identified at institutions supervised by the Federal Reserve
have been characterized [by the Fed] as matters requiring
immediate attention or as matters requiring attention.'' The
stress tests thus perfectly encapsulate the double standard
that is the hallmark of the modern regulatory state: one set of
rules for the bureaucratic elites and another for the entities
they regulate.
Transparency is a key feature of accountability and this
limited disclosure about the stress tests may hinder
understanding of the CCAR program, limit public and market
confidence in the program, and the extent to which the Federal
Reserve can be held accountable for its decisions in its
conduct of the stress tests. The Federal Reserve also has not
regularly updated guidance to firms about supervisory
expectations and peer practices related to the qualitative
assessment. Bank holding companies that must meet these
expectations annually may face challenges from the irregular
timing of communications, which could limit the Federal
Reserve's achievement of its CCAR goals.
Not only academics, but regulators have recognized a need
for many of the reforms set forth in this bill--most notably
from the Federal Reserve itself. For example, in a June 16,
2017, letter to Rep. Blaine Luetkemeyer (MO), then-Federal
Reserve Chair Janet Yellen committed to provide more details on
how the Federal Reserve conducts the annual stress tests, to
include the qualitative part of the tests. During testimony
before the Senate Banking Committee on June 22, 2017, Federal
Reserve Governor Jerome Powell stated ``[t]he Federal Reserve
is committed to increasing the transparency of the stress
testing and CCAR processes. We will soon seek public feedback
concerning possible forms of enhanced disclosure.''
Other regulators have recognized the need for some form of
regulatory reform regarding CCAR/DFAST stress tests, even if
those reforms were only to reduce the number of financial
institutions subject to the stress tests. For example, during
testimony before the Senate Banking Committee on June 22, 2017,
FDIC Chairman Martin Gruenberg stated:
``[s]ome EGRPRA commenters suggested raising the $10
billion in total assets threshold for conducting annual
stress tests set forth in Section 165(i)(2) of the
Dodd-Frank Act. The FDIC agrees with these commenters,
and supports legislative efforts to increase the
threshold from $10 billion to $50 billion. However, the
FDIC also believes it is important to retain
supervisory authority to require stress testing if
warranted by a banking organization's risk profile or
condition.''
And, as part of former Federal Reserve Governor Daniel
Tarullo's departing remarks in April 2017, he acknowledged
that:
``there are clearly some changes that can be made
without endangering financial stability. Foremost among
these are the various bank size thresholds established
in the Dodd-Frank Act or in agency regulations for the
application of stricter prudential requirements . . . .
Similarly, the $10 billion asset threshold for banks to
conduct their own required stress tests seems too low.
And the fact that community banks are subject at all to
some of the Dodd-Frank Act rules seems unnecessary to
protect safety and soundness, and quite burdensome on
the very limited compliance capabilities of these small
banks.''
In fact, in following a 2016 public comment period, the
Federal Reserve took steps to limit the reach of the
qualitative element of CCAR. The law firm of Davis Polk
analyzed the change to 2017 CCAR process and found:
``while in previous years all U.S. BHCs subject to
CCAR faced the possibility of a qualitative objection
to their capital plans, a Federal Reserve amendment to
the capital plan and stress test rules issued in early
2017 has limited the qualitative assessment to the
subset of CCAR BHCs with $250 billion or more in total
consolidated assets, $75 billion or more of total
nonbank assets or $10 billion or more in on-balance-
sheet foreign exposures (large and complex BHCs), which
currently comprises the 13 largest BHCs. For other BHCs
subject to CCAR (large and noncomplex BHCs), the
Federal Reserve will assess the qualitative aspects of
these firms' capital planning processes as part of . .
. its normal supervisory process, without the
possibility of a qualitative objection, through a
targeted Horizontal Capital Review.''
While these modest changes made by the Federal Reserve do not
go far enough to improve the stress test regime, the changes
demonstrates that the regulators recognize the problems with
qualitative assessments in stress testing.
In June 2017, the Treasury Department published a report
entitled A Financial System That Creates Economic
Opportunities: Banks and Credit Unions, that sets forth its
recommendations for regulatory relief for banks and credit
unions in furtherance of President Trump's February 3, 2017
Executive Order 13772 on Core Principles for Regulating the
United States Financial System. The June 2017 report
recommended reforms to the existing stress testing regime,
which overlap with this bill's reforms in many significant
regards. Like this legislation, the June 2017 report
recommended the elimination of the mid-year DFAST cycle and the
alteration of no longer allowing qualitative CCAR element to be
the sole basis for the Federal Reserve's rejection of capital
plans, and reducing the number of DFAST supervisory scenarios.
The June 2017 report also suggested going further by raising
the DFAST threshold from $10 billion to $50 billion, raising
the CCAR threshold to match the revised enhanced prudential
standards threshold, subjecting stress-testing and capital
review to public notice and comment process, allowing leeway
for the company to determine the appropriate number of models
for DFAST, reassessing CCAR assumptions, modeling according to
firms unique risk profiles, providing firms an accurate
understanding of the capital buffers they would have under the
severely adverse scenario.
On November 7, 2017, Federal Reserve Vice Chair of
Supervision, Governor Randall Quarles, announced that the
Federal Reserve will soon propose providing more granular
information about the central bank's expectations for loss
rates on particular portfolios of loans and will seek public
comment on the proposal in the near future. In addition, the
proposal will seek comment on the assumptions which underlie
the stress tests.
In an effort to inject badly needed accountability,
transparency, and targeted relief into the stress test
processes, this legislation introduced by Congressman Zeldin,
and amended by Congressman David Scott (D-GA), makes a number
of important reforms. H.R. 4293 would overhaul the current
regime for stress testing banks and would make the company-run
stress test an annual exercise, reduce the number of
supervisory scenarios from three to two--the baseline and
severely adverse scenario,--and extend the Federal Reserve's
regulatory relief from CCAR's qualitative assessment to all
banks.
Hearings
The Committee on Financial Services held a hearing
examining matters relating to H.R. 4293 on April 26, 2017 and
April 28, 2017.
Committee Consideration
The Committee on Financial Services met in open session on
November 14, 2017, and November 15, 2017, and ordered H.R. 4293
to be reported favorably to the House as amended by a recorded
vote of 38 yeas to 21 nays (Record vote no. FC-115), a quorum
being present. Before the motion to report was offered, the
Committee adopted an amendment offered by Mr. Scott by voice
vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
first recorded vote was a Motion to Table Mr. Perlmutter's
appeal of the ruling of the Chair on the question of
germaneness on the Perlmutter amendment. The motion was agreed
to 28 yeas to 14 nays. (Record vote no. FC-102), a quorum being
present. The second and final recorded vote was on a motion by
Chairman Hensarling to report the bill favorably to the House
as amended. The motion was agreed to by a recorded vote of 38
yeas to 21 nays (Record vote no. FC-115), a quorum being
present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 4293
will reform the living wills submission process to make it more
transparent, responsive, and efficient for submitting bank
holding companies.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 9, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4293, the Stress
Test Improvement Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sarah Puro.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 4293--Stress Test Improvement Act of 2017
Summary: Twice a year, large financial intuitions prepare
reports for federal financial regulators regarding their
ability to withstand financial stress. Under H.R. 4293 those
institutions would prepare annual reports instead. The bill
also would prohibit the Federal Reserve from using its
qualitative assessment of a financial institution's ability to
withstand financial stress as a basis for objecting to that
institution's plan to draw down capital.
CBO estimates that enacting H.R. 4293 would increase the
deficit by $14 million over the 2018-2027 period. That figure
includes an increase in direct spending of $16 million and an
increase in revenues of $2 million. Because enacting the bill
would affect direct spending and revenues, pay-as-you-go
procedures apply.
CBO estimates that enacting H.R. 4293 would not increase
net direct spending or on-budget deficits by more than $2.5
billion in one or more of the four consecutive 10-year periods
beginning in 2028.
H.R. 4293 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of H.R. 4293 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN DIRECT SPENDING
Estimated Budget Authority........................ 0 1 1 2 2 2 2 2 2 2 6 16
Estimated Outlays................................. 0 1 1 2 2 2 2 2 2 2 6 16
INCREASES IN REVENUES
Estimated Revenues................................ 0 0 0 0 0 0 0 0 1 1 0 2
NET INCREASE IN THE DEFICIT FROM INCREASES IN DIRECT SPENDING AND REVENUES
Effect on the Deficit............................. 0 1 1 2 2 2 2 2 1 1 6 14
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basis of estimate: The estimated budgetary effects of H.R.
4293 stem from the small chance that the Federal Deposit
Insurance Corporation (FDIC) would incur additional costs to
resolve failed financial institutions. For this estimate, CBO
assumes that the bill will be enacted near the end of 2018.
CBO's estimate for H.R. 4293 is based on the analysis
underlying its projections for banking programs in its June
2017 baseline. Those projections incorporate the small
probability of a financial crisis in each year during the
projection period and the more likely scenario of an average
number of bank and credit union failures in any given year. As
a result, the estimated cost represents a weighted probability
of different outcomes for future failures of financial
institutions. Some of those outcomes have a very low
probability of occurring but if they do, the costs to the
Deposit Insurance Fund (DIF) or the Orderly Liquidation Fund
(OLF) are very large. Costs incurred by the DIF are recovered
over time by assessments on insured depository institutions.
Fees paid to recover costs incurred by the OLF are classified
in the budget as revenues. Both of those funds are administered
by the FDIC.
The estimated costs result from provisions that would
prohibit the Federal Reserve from using its qualitative
assessments of the ability of large banking intuitions to
withstand financial stress as a basis for objecting to a
financial institution's plan to draw down capital. According to
the major private credit-rating agencies and other financial
analysts, the Federal Reserve's quantitative and qualitative
stress tests have improved the financial strength and
resiliency of large banking institutions.\1\ Companies
typically resolve shortcomings identified by the tests by
strengthening internal controls and reducing the portion of
equity used for dividends and stock repurchases, which
increases the capital held by the company.
---------------------------------------------------------------------------
\1\See Office of Financial Research, Capital Buffers and the Future
of Bank Stress Test, Brief 7-20 (February 2017),
www.financialresearch.gov/briefs; Government Accountability Office,
Federal Reserve: Additional Actions Could Help Ensure the Achievement
of Stress Test Goals, GAO-17-49 (November 2016), www.gao.gov/products/
GAO-17-48; and Moody's Investors Service, ``Fed Stress Testing Has
Strengthened Banks' Capital and Risk Management (June 21, 2016), http:/
/tinyurl.com/yd7uhz7r.
---------------------------------------------------------------------------
Since 2013, only a few financial institutions have been
cited for qualitative shortcomings, and most of those cases
were resolved quickly. The actions required by the Federal
Reserve were relatively minor, in part because those
institutions were still recovering from the financial
crisis.\2\ Based on those actions of the Federal Reserve, CBO
estimates that implementing H.R. 4293 would reduce the average
amount of capital held by all large, systemically important
banking institutions by less than 1 percent.
---------------------------------------------------------------------------
\2\Daniel K. Tarullo, Governor, Federal Reserve, ``Next Steps in
the Evolution of Stress Testing'' (speech at the Yale University School
of Management Leaders Forum, New Haven, Conn., September 26, 2016),
https://go.usa.gov/xnJZc.
---------------------------------------------------------------------------
Changes in the amount of capital that a financial
institution holds may affect both that institution's likelihood
of failure and the costs incurred by the OLF or DIF to resolve
failed assets. Most of the costs from enacting the legislation
would primarily be incurred by the OLF. CBO estimates that
implementing the bill would increase the deficit by $14
million, or by roughly 0.02 percent of that baseline's
projection of the FDIC's programs over the next decade. That
total consists of an increase in direct spending of $16 million
and an increase of revenues of $2 million. CBO expects that
most of the costs over the 2018-2027 period under the bill
would be offset after 2027 by an increase in fees paid to the
FDIC by financial institutions.
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in the
following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4293, THE STRESS TEST IMPROVEMENT ACT OF 2017, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL
SERVICES ON NOVEMBER 15, 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------------------------------------------
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2018-2022 2018-2027
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact.............................. 0 1 1 2 2 2 2 2 1 1 6 14
Memorandum:
Changes in Outlays...................................... 0 1 1 2 2 2 2 2 2 2 6 16
Changes in Revenues..................................... 0 0 0 0 0 0 0 0 1 1 0 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Increase in long-term direct spending and deficits: CBO
estimates that enacting the legislation would not increase net
direct spending or on-budget deficits by more than $2.5 billion
in any of the four consecutive 10-year periods beginning in
2028.
Mandates: H.R. 4293 contains no intergovernmental or
private-sector mandates as defined in UMRA.
Estimate prepared by: Federal costs: Sarah Puro and
Kathleen Gramp (for the FDIC) and Nathaniel Frentz (for the
Federal Reserve); Mandates: Rachel Austin.
Estimate approved by: H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee states that the bill requires two
directed rule makings.
The rulemaking directs the Federal Reserve Board (Federal
Reserve) to provide for at least 3 different sets of conditions
under which the evaluation required by this subsection shall be
conducted, including baseline, adverse, and severely adverse,
and methodologies, including models used to estimate losses on
certain assets, and the Board of Governors shall not carry out
any such evaluation until 60 days after such regulations are
issued; and provide copies of such regulations to the
Comptroller General of the United States and the Panel of
Economic Advisors of the Congressional Budget Office before
publishing such regulations.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 4293 as the ``Stress Test
Improvement Act of 2017.''
Section 2. CCAR and DFAST reforms
This section amends 165(i) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act to require the Federal
Reserve Board's (Federal Reserve) Comprehensive Capitol
Analysis and Review (CCAR) be conducted once each year, rather
than semiannually. This section also reduces the number of
supervisory scenarios from three to two by striking the adverse
scenario, and prohibits the Federal Reserve's objection to a
bank holding company's capital plan based solely on qualitative
deficiencies.
Section 3. Rule of construction
This section clarifies that the amendments made by this Act
may not be construed to prohibit an appropriate Federal banking
agency from ensuring the safety and soundness of an entity
regulated by such an appropriate Federal banking agency, and
ensuring compliance with applicable laws, regulations, and
supervisory policies.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies
* * * * * * *
SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.
(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks
to the financial stability of the United States that
could arise from the material financial distress or
failure, or ongoing activities, of large,
interconnected financial institutions, the Board of
Governors shall, on its own or pursuant to
recommendations by the Council under section 115,
establish prudential standards for nonbank financial
companies supervised by the Board of Governors and bank
holding companies with total consolidated assets equal
to or greater than $50,000,000,000 that--
(A) are more stringent than the standards and
requirements applicable to nonbank financial
companies and bank holding companies that do
not present similar risks to the financial
stability of the United States; and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Tailored application.--
(A) In general.--In prescribing more
stringent prudential standards under this
section, the Board of Governors may, on its own
or pursuant to a recommendation by the Council
in accordance with section 115, differentiate
among companies on an individual basis or by
category, taking into consideration their
capital structure, riskiness, complexity,
financial activities (including the financial
activities of their subsidiaries), size, and
any other risk-related factors that the Board
of Governors deems appropriate.
(B) Adjustment of threshold for application
of certain standards.--The Board of Governors
may, pursuant to a recommendation by the
Council in accordance with section 115,
establish an asset threshold above
$50,000,000,000 for the application of any
standard established under subsections (c)
through (g).
(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of
Governors shall establish prudential standards
for nonbank financial companies supervised by
the Board of Governors and bank holding
companies described in subsection (a), that
shall include--
(i) risk-based capital requirements
and leverage limits, unless the Board
of Governors, in consultation with the
Council, determines that such
requirements are not appropriate for a
company subject to more stringent
prudential standards because of the
activities of such company (such as
investment company activities or assets
under management) or structure, in
which case, the Board of Governors
shall apply other standards that result
in similarly stringent risk controls;
(ii) liquidity requirements;
(iii) overall risk management
requirements;
(iv) resolution plan and credit
exposure report requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The
Board of Governors may establish additional
prudential standards for nonbank financial
companies supervised by the Board of Governors
and bank holding companies described in
subsection (a), that include--
(i) a contingent capital requirement;
(ii) enhanced public disclosures;
(iii) short-term debt limits; and
(iv) such other prudential standards
as the Board or Governors, on its own
or pursuant to a recommendation made by
the Council in accordance with section
115, determines are appropriate.
(2) Standards for foreign financial companies.--In
applying the standards set forth in paragraph (1) to
any foreign nonbank financial company supervised by the
Board of Governors or foreign-based bank holding
company, the Board of Governors shall--
(A) give due regard to the principle of
national treatment and equality of competitive
opportunity; and
(B) take into account the extent to which the
foreign financial company is subject on a
consolidated basis to home country standards
that are comparable to those applied to
financial companies in the United States.
(3) Considerations.--In prescribing prudential
standards under paragraph (1), the Board of Governors
shall--
(A) take into account differences among
nonbank financial companies supervised by the
Board of Governors and bank holding companies
described in subsection (a), based on--
(i) the factors described in
subsections (a) and (b) of section 113;
(ii) whether the company owns an
insured depository institution;
(iii) nonfinancial activities and
affiliations of the company; and
(iv) any other risk-related factors
that the Board of Governors determines
appropriate;
(B) to the extent possible, ensure that small
changes in the factors listed in subsections
(a) and (b) of section 113 would not result in
sharp, discontinuous changes in the prudential
standards established under paragraph (1) of
this subsection;
(C) take into account any recommendations of
the Council under section 115; and
(D) adapt the required standards as
appropriate in light of any predominant line of
business of such company, including assets
under management or other activities for which
particular standards may not be appropriate.
(4) Consultation.--Before imposing prudential
standards or any other requirements pursuant to this
section, including notices of deficiencies in
resolution plans and more stringent requirements or
divestiture orders resulting from such notices, that
are likely to have a significant impact on a
functionally regulated subsidiary or depository
institution subsidiary of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a), the Board of
Governors shall consult with each Council member that
primarily supervises any such subsidiary with respect
to any such standard or requirement.
(5) Report.--The Board of Governors shall submit an
annual report to Congress regarding the implementation
of the prudential standards required pursuant to
paragraph (1), including the use of such standards to
mitigate risks to the financial stability of the United
States.
(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the
Council of a report to Congress under section 115(c),
the Board of Governors may issue regulations that
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to maintain a minimum
amount of contingent capital that is convertible to
equity in times of financial stress.
(2) Factors to consider.--In issuing regulations
under this subsection, the Board of Governors shall
consider--
(A) the results of the study undertaken by
the Council, and any recommendations of the
Council, under section 115(c);
(B) an appropriate transition period for
implementation of contingent capital under this
subsection;
(C) the factors described in subsection
(b)(3)(A);
(D) capital requirements applicable to the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a), and subsidiaries
thereof; and
(E) any other factor that the Board of
Governors deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation the plan of such company for rapid and
orderly resolution in the event of material financial
distress or failure, which shall include--
(A) information regarding the manner and
extent to which any insured depository
institution affiliated with the company is
adequately protected from risks arising from
the activities of any nonbank subsidiaries of
the company;
(B) full descriptions of the ownership
structure, assets, liabilities, and contractual
obligations of the company;
(C) identification of the cross-guarantees
tied to different securities, identification of
major counterparties, and a process for
determining to whom the collateral of the
company is pledged; and
(D) any other information that the Board of
Governors and the Corporation jointly require
by rule or order.
(2) Credit exposure report.--The Board of Governors
shall require each nonbank financial company supervised
by the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation on--
(A) the nature and extent to which the
company has credit exposure to other
significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other
significant nonbank financial companies and
significant bank holding companies have credit
exposure to that company.
(3) Review.--The Board of Governors and the
Corporation shall review the information provided in
accordance with this subsection by each nonbank
financial company supervised by the Board of Governors
and bank holding company described in subsection (a).
(4) Notice of deficiencies.--If the Board of
Governors and the Corporation jointly determine, based
on their review under paragraph (3), that the
resolution plan of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a) is not credible or
would not facilitate an orderly resolution of the
company under title 11, United States Code--
(A) the Board of Governors and the
Corporation shall notify the company of the
deficiencies in the resolution plan; and
(B) the company shall resubmit the resolution
plan within a timeframe determined by the Board
of Governors and the Corporation, with
revisions demonstrating that the plan is
credible and would result in an orderly
resolution under title 11, United States Code,
including any proposed changes in business
operations and corporate structure to
facilitate implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) fails to timely resubmit the resolution
plan as required under paragraph (4), with such
revisions as are required under subparagraph
(B), the Board of Governors and the Corporation
may jointly impose more stringent capital,
leverage, or liquidity requirements, or
restrictions on the growth, activities, or
operations of the company, or any subsidiary
thereof, until such time as the company
resubmits a plan that remedies the
deficiencies.
(B) Divestiture.--The Board of Governors and
the Corporation, in consultation with the
Council, may jointly direct a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a), by order, to divest certain assets or
operations identified by the Board of Governors
and the Corporation, to facilitate an orderly
resolution of such company under title 11,
United States Code, in the event of the failure
of such company, in any case in which--
(i) the Board of Governors and the
Corporation have jointly imposed more
stringent requirements on the company
pursuant to subparagraph (A); and
(ii) the company has failed, within
the 2-year period beginning on the date
of the imposition of such requirements
under subparagraph (A), to resubmit the
resolution plan with such revisions as
were required under paragraph (4)(B).
(6) No limiting effect.--A resolution plan submitted
in accordance with this subsection shall not be binding
on a bankruptcy court, a receiver appointed under title
II, or any other authority that is authorized or
required to resolve the nonbank financial company
supervised by the Board, any bank holding company, or
any subsidiary or affiliate of the foregoing.
(7) No private right of action.--No private right of
action may be based on any resolution plan submitted in
accordance with this subsection.
(8) Rules.--Not later than 18 months after the date
of enactment of this Act, the Board of Governors and
the Corporation shall jointly issue final rules
implementing this subsection.
(e) Concentration Limits.--
(1) Standards.--In order to limit the risks that the
failure of any individual company could pose to a
nonbank financial company supervised by the Board of
Governors or a bank holding company described in
subsection (a), the Board of Governors, by regulation,
shall prescribe standards that limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph
(1) shall prohibit each nonbank financial company
supervised by the Board of Governors and bank holding
company described in subsection (a) from having credit
exposure to any unaffiliated company that exceeds 25
percent of the capital stock and surplus (or such lower
amount as the Board of Governors may determine by
regulation to be necessary to mitigate risks to the
financial stability of the United States) of the
company.
(3) Credit exposure.--For purposes of paragraph (2),
``credit exposure'' to a company means--
(A) all extensions of credit to the company,
including loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse
repurchase agreements with the company, and all
securities borrowing and lending transactions
with the company, to the extent that such
transactions create credit exposure for the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a);
(C) all guarantees, acceptances, or letters
of credit (including endorsement or standby
letters of credit) issued on behalf of the
company;
(D) all purchases of or investment in
securities issued by the company;
(E) counterparty credit exposure to the
company in connection with a derivative
transaction between the nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) and the company; and
(F) any other similar transactions that the
Board of Governors, by regulation, determines
to be a credit exposure for purposes of this
section.
(4) Attribution rule.--For purposes of this
subsection, any transaction by a nonbank financial
company supervised by the Board of Governors or a bank
holding company described in subsection (a) with any
person is a transaction with a company, to the extent
that the proceeds of the transaction are used for the
benefit of, or transferred to, that company.
(5) Rulemaking.--The Board of Governors may issue
such regulations and orders, including definitions
consistent with this section, as may be necessary to
administer and carry out this subsection.
(6) Exemptions.--This subsection shall not apply to
any Federal home loan bank. The Board of Governors may,
by regulation or order, exempt transactions, in whole
or in part, from the definition of the term ``credit
exposure'' for purposes of this subsection, if the
Board of Governors finds that the exemption is in the
public interest and is consistent with the purpose of
this subsection.
(7) Transition period.--
(A) In general.--This subsection and any
regulations and orders of the Board of
Governors under this subsection shall not be
effective until 3 years after the date of
enactment of this Act.
(B) Extension authorized.--The Board of
Governors may extend the period specified in
subparagraph (A) for not longer than an
additional 2 years.
(f) Enhanced Public Disclosures.--The Board of Governors may
prescribe, by regulation, periodic public disclosures by
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a) in order to support market evaluation of the risk profile,
capital adequacy, and risk management capabilities thereof.
(g) Short-term Debt Limits.--
(1) In general.--In order to mitigate the risks that
an over-accumulation of short-term debt could pose to
financial companies and to the stability of the United
States financial system, the Board of Governors may, by
regulation, prescribe a limit on the amount of short-
term debt, including off-balance sheet exposures, that
may be accumulated by any bank holding company
described in subsection (a) and any nonbank financial
company supervised by the Board of Governors.
(2) Basis of limit.--Any limit prescribed under
paragraph (1) shall be based on the short-term debt of
the company described in paragraph (1) as a percentage
of capital stock and surplus of the company or on such
other measure as the Board of Governors considers
appropriate.
(3) Short-term debt defined.--For purposes of this
subsection, the term ``short-term debt'' means such
liabilities with short-dated maturity that the Board of
Governors identifies, by regulation, except that such
term does not include insured deposits.
(4) Rulemaking authority.--In addition to prescribing
regulations under paragraphs (1) and (3), the Board of
Governors may prescribe such regulations, including
definitions consistent with this subsection, and issue
such orders, as may be necessary to carry out this
subsection.
(5) Authority to issue exemptions and adjustments.--
Notwithstanding the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.), the Board of Governors may,
if it determines such action is necessary to ensure
appropriate heightened prudential supervision, with
respect to a company described in paragraph (1) that
does not control an insured depository institution,
issue to such company an exemption from or adjustment
to the limit prescribed under paragraph (1).
(h) Risk Committee.--
(1) Nonbank financial companies supervised by the
board of governors.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors that is a publicly traded
company to establish a risk committee, as set forth in
paragraph (3), not later than 1 year after the date of
receipt of a notice of final determination under
section 113(e)(3) with respect to such nonbank
financial company supervised by the Board of Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of
Governors shall issue regulations requiring
each bank holding company that is a publicly
traded company and that has total consolidated
assets of not less than $10,000,000,000 to
establish a risk committee, as set forth in
paragraph (3).
(B) Permissive regulations.--The Board of
Governors may require each bank holding company
that is a publicly traded company and that has
total consolidated assets of less than
$10,000,000,000 to establish a risk committee,
as set forth in paragraph (3), as determined
necessary or appropriate by the Board of
Governors to promote sound risk management
practices.
(3) Risk committee.--A risk committee required by
this subsection shall--
(A) be responsible for the oversight of the
enterprise-wide risk management practices of
the nonbank financial company supervised by the
Board of Governors or bank holding company
described in subsection (a), as applicable;
(B) include such number of independent
directors as the Board of Governors may
determine appropriate, based on the nature of
operations, size of assets, and other
appropriate criteria related to the nonbank
financial company supervised by the Board of
Governors or a bank holding company described
in subsection (a), as applicable; and
(C) include at least 1 risk management expert
having experience in identifying, assessing,
and managing risk exposures of large, complex
firms.
(4) Rulemaking.--The Board of Governors shall issue
final rules to carry out this subsection, not later
than 1 year after the transfer date, to take effect not
later than 15 months after the transfer date.
(i) Stress Tests.--
(1) By the board of governors.--
(A) Annual tests required.--The Board of
Governors, in coordination with the appropriate
primary financial regulatory agencies and the
Federal Insurance Office, shall conduct annual
analyses in which nonbank financial companies
supervised by the Board of Governors and bank
holding companies described in subsection (a)
are subject to evaluation of whether such
companies have the capital, on a total
consolidated basis, necessary to absorb losses
as a result of adverse economic conditions.
(B) Test parameters and consequences.--The
Board of Governors--
(i) shall provide for at least [3
different] 2 different sets of
conditions under which the evaluation
required by this subsection shall be
conducted, including baseline[,
adverse,] and severely adverse;
(ii) may require the tests described
in subparagraph (A) at bank holding
companies and nonbank financial
companies, in addition to those for
which annual tests are required under
subparagraph (A);
(iii) may develop and apply such
other analytic techniques as are
necessary to identify, measure, and
monitor risks to the financial
stability of the United States;
(iv) shall require the companies
described in subparagraph (A) to update
their resolution plans required under
subsection (d)(1), as the Board of
Governors determines appropriate, based
on the results of the analyses; and
(v) shall publish a summary of the
results of the tests required under
subparagraph (A) or clause (ii) of this
subparagraph.
(C) CCAR requirements.--
(i) Limitation on qualitative capital
planning objections.--In carrying out
CCAR, the Board of Governors may not
object to a company's capital plan on
the basis of qualitative deficiencies
in the company's capital planning
process.
(ii) CCAR defined.--For purposes of
this subparagraph and subparagraph (E),
the term ``CCAR'' means the
Comprehensive Capital Analysis and
Review established by the Board of
Governors.
(2) By the company.--
(A) Requirement.--A nonbank financial company
supervised by the Board of Governors and a bank
holding company described in subsection (a)
shall conduct [semiannual] annual stress tests.
All other financial companies that have total
consolidated assets of more than
$10,000,000,000 and are regulated by a primary
Federal financial regulatory agency shall
conduct annual stress tests. The tests required
under this subparagraph shall be conducted in
accordance with the regulations prescribed
under subparagraph (C).
(B) Report.--A company required to conduct
stress tests under subparagraph (A) shall
submit a report to the Board of Governors and
to its primary financial regulatory agency at
such time, in such form, and containing such
information as the primary financial regulatory
agency shall require.
(C) Regulations.--Each Federal primary
financial regulatory agency, in coordination
with the Board of Governors and the Federal
Insurance Office, shall issue consistent and
comparable regulations to implement this
paragraph that shall--
(i) define the term ``stress test''
for purposes of this paragraph;
(ii) establish methodologies for the
conduct of stress tests required by
this paragraph that shall provide for
at least [3 different sets of
conditions, including baseline,
adverse,] 2 different sets of
conditions, including baseline and
severely adverse;
(iii) establish the form and content
of the report required by subparagraph
(B); and
(iv) require companies subject to
this paragraph to publish a summary of
the results of the required stress
tests.
(j) Leverage Limitation.--
(1) Requirement.--The Board of Governors shall
require a bank holding company with total consolidated
assets equal to or greater than $50,000,000,000 or a
nonbank financial company supervised by the Board of
Governors to maintain a debt to equity ratio of no more
than 15 to 1, upon a determination by the Council that
such company poses a grave threat to the financial
stability of the United States and that the imposition
of such requirement is necessary to mitigate the risk
that such company poses to the financial stability of
the United States. Nothing in this paragraph shall
apply to a Federal home loan bank.
(2) Considerations.--In making a determination under
this subsection, the Council shall consider the factors
described in subsections (a) and (b) of section 113 and
any other risk-related factors that the Council deems
appropriate.
(3) Regulations.--The Board of Governors shall
promulgate regulations to establish procedures and
timelines for complying with the requirements of this
subsection.
(k) Inclusion of Off-balance-sheet Activities in Computing
Capital Requirements.--
(1) In general.--In the case of any bank holding
company described in subsection (a) or nonbank
financial company supervised by the Board of Governors,
the computation of capital for purposes of meeting
capital requirements shall take into account any off-
balance-sheet activities of the company.
(2) Exemptions.--If the Board of Governors determines
that an exemption from the requirement under paragraph
(1) is appropriate, the Board of Governors may exempt a
company, or any transaction or transactions engaged in
by such company, from the requirements of paragraph
(1).
(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
substitutes its own credit for a third party,
including standby letters of credit.
(B) Irrevocable letters of credit that
guarantee repayment 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.
* * * * * * *
MINORITY VIEWS
One of the most important policy developments following the
largest financial crisis since the Great Depression was the
enactment of stress testing for our nation's largest banks.
H.R. 4293 would make several harmful changes to the current
bank stress test regime, specifically the stress tests required
by the Dodd-Frank Wall Street Reform and Consumer Protection
Act as well as the Comprehensive Capital Analysis and Review
(CCAR) program administered by the Board of Governors of the
Federal Reserve System.
While it is appropriate for Congress to examine the
effectiveness of enhanced prudential standards, and how they
are applied and tailored to our largest banks, H.R. 4293 would
make a series of one-sided changes that weaken oversight of
Wall Street banks.
Although the bill was modestly narrowed during the
Committee's markup, H.R. 4293 still makes it harder for
regulators to object to a deficient capital plan submitted by a
megabank, and reduces the frequency of company-run stress tests
required for the nation's largest bank holding companies.
U.S. banks added more than $700 billion in capital to
absorb potential losses since the financial crisis of 2007-
2009. Even though banks are well capitalized today, we should
not let complacency allow us to overlook how unexpected risks
can quickly materialize and tank our economy. We should also
not forget the lessons of the financial crisis and how costly
and painful that was for our constituents and the country.
Furthermore, we would highlight testimony the Committee
received warning about the dangers of rushing to rollback
stress testing requirements. Former Assistant Secretary of the
Treasury, Michael Barr, testified that, ``stress testing is a
central and innovative risk management tool used since the
financial crisis by both regulators and practitioners. Unlike
fixed capital ratios, of either the risk-based or leverage
ratio type, stress testing seeks to understand how macro shocks
would deplete capital. It would be a serious mistake to . . .
hamstring stress testing by the Fed.''
Mr. Barr's fears were also echoed by Ms. Emily Liner,
Senior Policy Advisor at Third Way. She testified that,
``eventually, there will be another economic downturn, and we
need to be certain that our largest financial institutions can
weather the storm so that we can return to growth, we can
return to strong markets, and we can prevent massive investor
losses far more quickly. If we had had stress tests before the
financial crisis, we could have been prepared to take action
before the chain reaction of bank failures unfolded.''
For these reasons, we oppose H.R. 4293.
Maxine Waters.
Keith Ellison.
Michael E. Capuano.
Vicente Gonzalez.
Carolyn B. Maloney.
Daniel T. Kildee.
Wm. Lacy Clay.
Stephen F. Lynch.
Al Green.
[all]