SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FSOC Designation Review Act''.

SEC. 2. REEVALUATION AND REAFFIRMATION.

    Section 113(d) of the Financial Stability Act of 2010 (12 U.S.C. 
5323(d)) is amended to read as follows:
    ``(d) Reevaluation and Reaffirmation.--
            ``(1) In general.--The Council shall reevaluate each 
        determination made under subsections (a) and (b) with respect 
        to a nonbank financial company supervised by the Board of 
        Governors on--
                    ``(A) an annual basis; and
                    ``(B) upon the request of such company based upon 
                the company's representation that there has been a 
                material change in the company's operations or 
                activities or a material change in regulatory or market 
                conditions.
            ``(2) Reevaluation.--As part of the reevaluation required 
        by paragraph (1), the Council shall--
                    ``(A) provide the nonbank financial company with a 
                confidential written analysis of the specific elements 
                of the company's exposures or activities that would be 
                relevant to the Council's reevaluation of the 
                determination for such company;
                    ``(B) provide the nonbank financial company with an 
                opportunity to submit written materials to the Council 
                regarding the reevaluation, including, as the company's 
                option, a plan to obtain rescission of the 
                determination or other materials relevant to the 
                assessment described under paragraph (3)(A);
                    ``(C) if the nonbank financial company submits a 
                plan under subparagraph (B), consider whether the plan, 
                if implemented, would result in the nonbank financial 
                company no longer meeting the criteria for a final 
                determination under subsection (a) or (b);
                    ``(D) make a preliminary written decision regarding 
                rescinding such determination;
                    ``(E) if the preliminary decision is not to rescind 
                the determination, provide the nonbank financial 
                company with--
                            ``(i) a copy of the preliminary decision, 
                        which shall include a confidential written 
                        analysis explaining with specificity whether 
                        and to what extent any plan submitted by the 
                        company under subparagraph (B) addresses the 
                        potential threat posed by the nonbank financial 
                        company to the financial stability of the 
                        United States;
                            ``(ii) an opportunity to meet with 
                        representatives of the Council to discuss the 
                        preliminary decision and analysis provided 
                        under clause (i); and
                            ``(iii) an opportunity to revise and re-
                        submit such plan or any other written 
                        materials, after discussions with 
                        representatives of the Council; and
                    ``(F) upon the request of the nonbank financial 
                company, grant such company an oral hearing before the 
                Council.
            ``(3) Vulnerability to financial distress.--
                    ``(A) In general.--The written analysis required 
                under paragraph (2)(A) shall include an assessment 
                describing with particularity the vulnerability of the 
                nonbank financial company to financial distress, 
                including consideration of the company's leverage, 
                liquidity risk and maturity mismatch, and existing 
                regulatory scrutiny of the company.
                    ``(B) Effective of failure to include assessment.--
                If the Council provides a written analysis under 
                paragraph (2)(A) that does not contain the assessment 
                required under subparagraph (A), any determination made 
                under subsection (a) or (b) with respect to such 
                company shall be rescinded immediately.
                    ``(C) Definitions.--For purposes of this paragraph 
                the terms `vulnerability to financial distress', 
                `leverage', `liquidity risk and maturity mismatch', and 
                `existing regulatory scrutiny of the nonbank financial 
                company' shall have the same meaning as those terms are 
                given, respectively, under appendix A to part 1310 of 
                title 12, Code of Federal Regulations.
            ``(4) Reaffirmation.--
                    ``(A) In general.--Following a reevaluation under 
                paragraph (1), the Council shall vote whether to 
                reaffirm the determination that the nonbank financial 
                company shall be supervised by the Board of Governors 
                and shall be subject to prudential standards, pursuant 
                to subsection (a) or (b), as applicable.
                    ``(B) Vote requirement.--Any reaffirmation under 
                subparagraph (A) shall require a vote of no fewer than 
                \2/3\ of the voting members then serving, including an 
                affirmative vote by the Chairperson, finding that the 
                company still meets the standards for designation under 
                subsection (a) or (b), as applicable. Any such finding 
                shall include a detailed explanation of the basis for 
                the Council's determination, including a confidential 
                written analysis explaining with specificity whether 
                and to what extent any plan submitted by the nonbank 
                financial company pursuant to paragraph (2)(B) 
                addresses the potential threat posed by the company to 
                the financial stability of the United States.
                    ``(C) Effect of failure to reaffirm.--If the 
                Council votes under subparagraph (A) with respect to a 
                nonbank financial company and does not reaffirm the 
                designation, the determination made with respect to 
                such company shall be rescinded immediately.
            ``(5) Views of primary financial regulatory agency.--In 
        conducting a reevaluation under paragraph (1), the Council 
        shall consult with the primary financial regulatory agency for 
        the nonbank financial company, if any, and the primary 
        financial regulatory agencies of the company's principal 
        subsidiaries, if any, and the views of such agencies shall be 
        given special consideration.''.

SEC. 3. JUDICIAL REVIEW.

    Section 113(h) of the Financial Stability Act of 2010 (12 U.S.C. 
5323(h)) is amended by striking ``subsection (d)(2)'' and inserting 
``subsection (d)(4)''.
FSOC Designation Review Act  This bill amends the Financial Stability Act of 2010 to revise requirements for reevaluation and reaffirmation of determinations by the Financial Stability Oversight Council (FSOC) that the Board of Governors of the Federal Reserve System supervise and regulate U.S. or foreign nonbank financial companies. The FSOC shall reevaluate such a determination not only annually (as under current law) but also upon the request of a nonbank financial company based on its representation that there has been a material change in its operations or activities or a material change in regulatory or market conditions.  FSOC must give the company as part of a reevaluation:  a confidential written analysis of the specific elements of the company's exposures or activities that would be relevant to the FSOC's reevaluation; and opportunity to submit written materials in response, including a plan to obtain rescission of the determination or other materials relevant to the assessment.   The FSOC's written analysis must assess with particularity the company's vulnerability to financial distress, including consideration of its leverage, liquidity risk, and maturity mismatch, and existing regulatory scrutiny of the company. Following a reevaluation the FSOC shall vote whether to reaffirm the determination; but if two-thirds of the voting members do not vote in favor of reaffirmation, the determination in question shall be rescinded immediately, subject at company option to judicial review. (Currently a determination is automatically reaffirmed upon reevaluation unless by a two-thirds vote the FSOC rescinds it.)
FSOC Designation Review Act