O:\AYO\AYO08C04.xml [DISCUSSION DRAFT] 110TH CONGRESS 2D SESSION H. R. ll To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES Ml. llllll introduced the following bill; which was referred to the Committee on llllllllllllll A BILL To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, and for other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 4 (a) SHORT TITLE.—This Act may be cited as the 5 ‘‘Emergency Economic Stabilization Act of 2008’’. 2 O:\AYO\AYO08C04.xml 1 (b) TABLE OF CONTENTS.—The table of contents for 2 this Act is as follows: Sec. 1. Short title and table of contents. Sec. 2. Purposes. Sec. 3. Definitions. TITLE I—TROUBLED ASSETS RELIEF PROGRAM Sec. 101. Purchases of troubled assets. Sec. 102. Insurance of troubled assets. Sec. 103. Considerations. Sec. 104. Financial Stability Oversight Board. Sec. 105. Reports. Sec. 106. Rights; management; sale of troubled assets; revenues and sale proceeds. Sec. 107. Contracting procedures. Sec. 108. Conflicts of interest. Sec. 109. Foreclosure mitigation efforts. Sec. 110. Assistance to homeowners. Sec. 111. Executive compensation and corporate governance. Sec. 112. Coordination with foreign authorities and central banks. Sec. 113. Minimization of long-term costs and maximization of benefits for taxpayers. Sec. 114. Market transparency. Sec. 115. Graduated authorization to purchase. Sec. 116. Oversight and audits. Sec. 117. Study and report on margin authority. Sec. 118. Funding. Sec. 119. Judicial review and related matters. Sec. 120. Termination of authority. Sec. 121. Special Inspector General for the Troubled Asset Relief Program. Sec. 122. Increase in statutory limit on the public debt. Sec. 123. Credit reform. Sec. 124. HOPE for Homeowners amendments. Sec. 125. Congressional Oversight Panel. Sec. 126. FDIC authority. Sec. 127. Cooperation with the FBI. Sec. 128. Acceleration of effective date. Sec. 129. Disclosures on exercise of loan authority. Sec. 130. Technical corrections. Sec. 131. Exchange Stabilization Fund reimbursement. Sec. 132. Authority to suspend mark-to-market accounting. Sec. 133. Study on mark-to-market accounting. Sec. 134. Recoupment. Sec. 135. Preservation of authority. TITLE II—BUDGET-RELATED PROVISIONS Sec. 201. Information for congressional support agencies. Sec. 202. Reports by the Office of Management and Budget and the Congressional Budget Office. Sec. 203. Analysis in President’s Budget. Sec. 204. Emergency treatment. 3 O:\AYO\AYO08C04.xml TITLE III—TAX PROVISIONS Sec. 301. Gain or loss from sale or exchange of certain preferred stock. Sec. 302. Special rules for tax treatment of executive compensation of employers participating in the troubled assets relief program. Sec. 303. Extension of exclusion of income from discharge of qualified principal residence indebtedness. 1 SEC. 2. PURPOSES. 2 The purposes of this Act are— 3 (1) to immediately provide authority and facili4 ties that the Secretary of the Treasury can use to 5 restore liquidity and stability to the financial system 6 of the United States; and 7 (2) to ensure that such authority and such fa8 cilities are used in a manner that— 9 (A) protects home values, college funds, re10 tirement accounts, and life savings; 11 (B) preserves homeownership and pro12 motes jobs and economic growth; 13 (C) maximizes overall returns to the tax14 payers of the United States; and 15 (D) provides public accountability for the 16 exercise of such authority. 17 SEC. 3. DEFINITIONS. 18 For purposes of this Act, the following definitions 19 shall apply: 20 (1) APPROPRIATE COMMITTEES OF CON21 GRESS.—The term ‘‘appropriate committees of Con22 gress’’ means— 4 O:\AYO\AYO08C04.xml 1 (A) the Committee on Banking, Housing, 2 and Urban Affairs, the Committee on Finance, 3 the Committee on the Budget, and the Com4 mittee on Appropriations of the Senate; and 5 (B) the Committee on Financial Services, 6 the Committee on Ways and Means, the Com7 mittee on the Budget, and the Committee on 8 Appropriations of the House of Representatives. 9 (2) BOARD.—The term ‘‘Board’’ means the 10 Board of Governors of the Federal Reserve System. 11 (3) CONGRESSIONAL SUPPORT AGENCIES.—The 12 term ‘‘congressional support agencies’’ means the 13 Congressional Budget Office and the Joint Com14 mittee on Taxation. 15 (4) CORPORATION.—The term ‘‘Corporation’’ 16 means the Federal Deposit Insurance Corporation. 17 (5) FINANCIAL INSTITUTION.—The term ‘‘fi18 nancial institution’’ means any institution, including, 19 but not limited to, any bank, savings association, 20 credit union, security broker or dealer, or insurance 21 company, established and regulated under the laws 22 of the United States or any State, territory, or pos23 session of the United States, the District of Colum24 bia, Commonwealth of Puerto Rico, Commonwealth 25 of Northern Mariana Islands, Guam, American 5 O:\AYO\AYO08C04.xml 1 Samoa, or the United States Virgin Islands, and 2 having significant operations in the United States, 3 but excluding any central bank of, or institution 4 owned by, a foreign government. 5 (6) FUND.—The term ‘‘Fund’’ means the Trou6 bled Assets Insurance Financing Fund established 7 under section 102. 8 (7) SECRETARY.—The term ‘‘Secretary’’ means 9 the Secretary of the Treasury. 10 (8) TARP.—The term ‘‘TARP’’ means the 11 troubled asset relief program established under sec12 tion 101. 13 (9) TROUBLED ASSETS.—The term ‘‘troubled 14 assets’’ means— 15 (A) residential or commercial mortgages 16 and any securities, obligations, or other instru17 ments that are based on or related to such 18 mortgages, that in each case was originated or 19 issued on or before March 14, 2008, the pur20 chase of which the Secretary determines pro21 motes financial market stability; and 22 (B) any other financial instrument that the 23 Secretary, after consultation with the Chairman 24 of the Board of Governors of the Federal Re25 serve System, determines the purchase of which 6 O:\AYO\AYO08C04.xml 1 is necessary to promote financial market sta2 bility, but only upon transmittal of such deter3 mination, in writing, to the appropriate commit4 tees of Congress. 5 TITLE I—TROUBLED ASSETS 6 RELIEF PROGRAM 7 SEC. 101. PURCHASES OF TROUBLED ASSETS. 8 (a) OFFICES; AUTHORITY.— 9 (1) AUTHORITY.—The Secretary is authorized 10 to establish a troubled asset relief program (or 11 ‘‘TARP’’) to purchase, and to make and fund com12 mitments to purchase, troubled assets from any fi13 nancial institution, on such terms and conditions as 14 are determined by the Secretary, and in accordance 15 with this Act and the policies and procedures devel16 oped and published by the Secretary. 17 (2) COMMENCEMENT OF PROGRAM.—Establish18 ment of the policies and procedures and other simi19 lar administrative requirements imposed on the Sec20 retary by this Act are not intended to delay the com21 mencement of the TARP. 22 (3) ESTABLISHMENT OF TREASURY OFFICE.— 23 (A) IN GENERAL.—The Secretary shall im24 plement any program under paragraph (1) 25 through an Office of Financial Stability, estab7 O:\AYO\AYO08C04.xml 1 lished for such purpose within the Office of Do2 mestic Finance of the Department of the Treas3 ury, which office shall be headed by an Assist4 ant Secretary of the Treasury, appointed by the 5 President, by and with the advice and consent 6 of the Senate, except that an interim Assistant 7 Secretary may serve pending confirmation by 8 the Senate. 9 (B) CLERICAL AMENDMENTS.— 10 (i) TITLE 5.—Section 5315 of title 5, 11 United States Code, is amended in the 12 item relating to Assistant Secretaries of 13 the Treasury, by striking ‘‘(9)’’ and insert14 ing ‘‘(10)’’. 15 (ii) TITLE 31.—Section 301(e) of title 16 31, United States Code, is amended by 17 striking ‘‘9’’ and inserting ‘‘10’’. 18 (b) CONSULTATION.—In exercising the authority 19 under this section, the Secretary shall consult with the 20 Board of Governors of the Federal Reserve System, the 21 Corporation, the Comptroller of the Currency, the Direc22 tor of the Office of Thrift Supervision, and the Secretary 23 of Housing and Urban Development. 24 (c) NECESSARY ACTIONS.—The Secretary is author25 ized to take such actions as the Secretary deems necessary 8 O:\AYO\AYO08C04.xml 1 to carry out the authorities in this Act, including, without 2 limitation, the following: 3 (1) The Secretary shall have direct hiring au4 thority with respect to the appointment of employees 5 to administer this Act. 6 (2) Entering into contracts, including contracts 7 for services authorized by section 3109 of title 5, 8 United States Code. 9 (3) Designating financial institutions as finan10 cial agents of the Federal Government, and such in11 stitutions shall perform all such reasonable duties 12 related to this Act as financial agents of the Federal 13 Government as may be required. 14 (4) In order to provide the Secretary with the 15 flexibility to manage troubled assets in a manner de16 signed to minimize cost to the taxpayers, estab17 lishing vehicles that are authorized, subject to super18 vision by the Secretary, to purchase, hold, and sell 19 troubled assets and issue obligations. 20 (5) Issuing such regulations and other guidance 21 as may be necessary or appropriate to define terms 22 or carry out the authorities or purposes of this Act. 23 (d) PROGRAM GUIDELINES.—Before the earlier of 24 the end of the 2-business-day period beginning on the date 25 of the first purchase of troubled assets pursuant to the 9 O:\AYO\AYO08C04.xml 1 authority under this section or the end of the 45-day pe2 riod beginning on the date of enactment of this Act, the 3 Secretary shall publish program guidelines, including the 4 following: 5 (1) Mechanisms for purchasing troubled assets. 6 (2) Methods for pricing and valuing troubled 7 assets. 8 (3) Procedures for selecting asset managers. 9 (4) Criteria for identifying troubled assets for 10 purchase. 11 (e) PREVENTING UNJUST ENRICHMENT.—In making 12 purchases under the authority of this Act, the Secretary 13 shall take such steps as may be necessary to prevent un14 just enrichment of financial institutions participating in 15 a program established under this section, including by pre16 venting the sale of a troubled asset to the Secretary at 17 a higher price than what the seller paid to purchase the 18 asset. This subsection does not apply to troubled assets 19 acquired in a merger or acquisition, or a purchase of as20 sets from a financial institution in conservatorship or re21 ceivership, or that has initiated bankruptcy proceedings 22 under title 11, United States Code. 23 SEC. 102. INSURANCE OF TROUBLED ASSETS. 24 (a) AUTHORITY.— 10 O:\AYO\AYO08C04.xml 1 (1) IN GENERAL.—If the Secretary establishes 2 the program authorized under section 101, then the 3 Secretary shall establish a program to guarantee 4 troubled assets originated or issued prior to March 5 14, 2008, including such mortgage-backed securities. 6 (2) GUARANTEES.—In establishing any pro7 gram under this subsection, the Secretary may de8 velop guarantees of troubled assets and the associ9 ated premiums for such guarantees. Such guaran10 tees and premiums may be determined by category 11 or class of the troubled assets to be guaranteed. 12 (3) EXTENT OF GUARANTEE.—Upon request of 13 a financial institution, the Secretary may guarantee 14 the timely payment of principal of, and interest on, 15 troubled assets in amounts not to exceed 100 per16 cent of such payments. Such guarantee may be on 17 such terms and conditions as are determined by the 18 Secretary, provided that such terms and conditions 19 are consistent with the purposes of this Act. 20 (b) REPORTS.—Not later than 90 days after the date 21 of enactment of this Act, the Secretary shall report to the 22 appropriate committees of Congress on the program estab23 lished under subsection (a). 24 (c) PREMIUMS.— 11 O:\AYO\AYO08C04.xml 1 (1) IN GENERAL.—The Secretary shall collect 2 premiums from any financial institution partici3 pating in the program established under subsection 4 (a). Such premiums shall be in an amount that the 5 Secretary determines necessary to meet the purposes 6 of this Act and to provide sufficient reserves pursu7 ant to paragraph (3). 8 (2) AUTHORITY TO BASE PREMIUMS ON PROD9 UCT RISK.—In establishing any premium under 10 paragraph (1), the Secretary may provide for vari11 ations in such rates according to the credit risk as12 sociated with the particular troubled asset that is 13 being guaranteed. The Secretary shall publish the 14 methodology for setting the premium for a class of 15 troubled assets together with an explanation of the 16 appropriateness of the class of assets for participa17 tion in the program established under this section. 18 The methodology shall ensure that the premium is 19 consistent with paragraph (3). 20 (3) MINIMUM LEVEL.—The premiums referred 21 to in paragraph (1) shall be set by the Secretary at 22 a level necessary to create reserves sufficient to meet 23 anticipated claims, based on an actuarial analysis, 24 and to ensure that taxpayers are fully protected. 12 O:\AYO\AYO08C04.xml 1 (4) ADJUSTMENT TO PURCHASE AUTHORITY.— 2 The purchase authority limit in section 115 shall be 3 reduced by an amount equal to the difference be4 tween the total of the outstanding guaranteed obli5 gations and the balance in the Troubled Assets In6 surance Fund. 7 (d) TROUBLED ASSETS INSURANCE FINANCING 8 FUND.— 9 (1) DEPOSITS.—The Secretary shall deposit 10 fees collected under this section into the Fund estab11 lished under paragraph (2). 12 (2) ESTABLISHMENT.—There is established a 13 Troubled Assets Insurance Financing Fund that 14 shall consist of the amounts collected pursuant to 15 paragraph (1), and any balance in such fund shall 16 be invested by the Secretary in United States Treas17 ury securities, or kept in cash on hand or on deposit, 18 as necessary. 19 (3) PAYMENTS FROM FUND.—The Secretary 20 shall make payments from amounts deposited in the 21 Fund to fulfill obligations of the guarantees provided 22 to financial institutions under subsection (a). 23 SEC. 103. CONSIDERATIONS. 24 In exercising the authorities granted in this Act, the 25 Secretary shall take into consideration— 13 O:\AYO\AYO08C04.xml 1 (1) protecting the interests of taxpayers by 2 maximizing overall returns and minimizing the im3 pact on the national debt; 4 (2) providing stability and preventing disrup5 tion to financial markets in order to limit the impact 6 on the economy and protect American jobs, savings, 7 and retirement security; 8 (3) the need to help families keep their homes 9 and to stabilize communities; 10 (4) in determining whether to engage in a di11 rect purchase from an individual financial institu12 tion, the long-term viability of the financial institu13 tion in determining whether the purchase represents 14 the most efficient use of funds under this Act; 15 (5) ensuring that all financial institutions are 16 eligible to participate in the program, without dis17 crimination based on size, geography, form of orga18 nization, or the size, type, and number of assets eli19 gible for purchase under this Act; 20 (6) providing financial assistance to financial 21 institutions, including those serving low- and mod22 erate-income populations and other underserved 23 communities, and that have assets less than 24 $1,000,000,000, that were well or adequately cap25 italized as of June 30, 2008, and that as a result 14 O:\AYO\AYO08C04.xml 1 of the devaluation of the preferred government-spon2 sored enterprises stock will drop one or more capital 3 levels, in a manner sufficient to restore the financial 4 institutions to at least an adequately capitalized 5 level; 6 (7) the need to ensure stability for United 7 States public instrumentalities, such as counties and 8 cities, that may have suffered significant increased 9 costs or losses in the current market turmoil; 10 (8) protecting the retirement security of Ameri11 cans by purchasing troubled assets held by or on be12 half of an eligible retirement plan described in clause 13 (iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the 14 Internal Revenue Code of 1986, except that such au15 thority shall not extend to any compensation ar16 rangements subject to section 409A of such Code; 17 and 18 (9) the utility of purchasing other real estate 19 owned and instruments backed by mortgages on 20 multifamily properties. 21 SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD. 22 (a) ESTABLISHMENT.—There is established the Fi23 nancial Stability Oversight Board, which shall be respon24 sible for— 15 O:\AYO\AYO08C04.xml 1 (1) reviewing the exercise of authority under a 2 program developed in accordance with this Act, in3 cluding— 4 (A) policies implemented by the Secretary 5 and the Office of Financial Stability created 6 under sections 101 and 102, including the ap7 pointment of financial agents, the designation 8 of asset classes to be purchased, and plans for 9 the structure of vehicles used to purchase trou10 bled assets; and 11 (B) the effect of such actions in assisting 12 American families in preserving home owner13 ship, stabilizing financial markets, and pro14 tecting taxpayers; 15 (2) making recommendations, as appropriate, to 16 the Secretary regarding use of the authority under 17 this Act; and 18 (3) reporting any suspected fraud, misrepresen19 tation, or malfeasance to the Special Inspector Gen20 eral for the Troubled Assets Relief Program or the 21 Attorney General of the United States, consistent 22 with section 535(b) of title 28, United States Code. 23 (b) MEMBERSHIP.—The Financial Stability Over24 sight Board shall be comprised of— 16 O:\AYO\AYO08C04.xml 1 (1) the Chairman of the Board of Governors of 2 the Federal Reserve System; 3 (2) the Secretary; 4 (3) the Director of the Federal Home Finance 5 Agency; 6 (4) the Chairman of the Securities Exchange 7 Commission; and 8 (5) the Secretary of Housing and Urban Devel9 opment. 10 (c) CHAIRPERSON.—The chairperson of the Financial 11 Stability Oversight Board shall be elected by the members 12 of the Board from among the members other than the Sec13 retary. 14 (d) MEETINGS.—The Financial Stability Oversight 15 Board shall meet 2 weeks after the first exercise of the 16 purchase authority of the Secretary under this Act, and 17 monthly thereafter. 18 (e) ADDITIONAL AUTHORITIES.—In addition to the 19 responsibilities described in subsection (a), the Financial 20 Stability Oversight Board shall have the authority to en21 sure that the policies implemented by the Secretary are— 22 (1) in accordance with the purposes of this Act; 23 (2) in the economic interests of the United 24 States; and 17 O:\AYO\AYO08C04.xml 1 (3) consistent with protecting taxpayers, in ac2 cordance with section 112(a). 3 (f) CREDIT REVIEW COMMITTEE.—The Financial 4 Stability Oversight Board may appoint a credit review 5 committee for the purpose of evaluating the exercise of 6 the purchase authority provided under this Act and the 7 assets acquired through the exercise of such authority, as 8 the Financial Stability Oversight Board determines appro9 priate. 10 (g) REPORTS.—The Financial Stability Oversight 11 Board shall report to the appropriate committees of Con12 gress and the Congressional Oversight Panel established 13 under section 125, semiannually, on the matters described 14 under subsection (a)(1). 15 (h) TERMINATION.—The Financial Stability Over16 sight Board, and the authority of the Oversight Board 17 under this section, shall terminate on the expiration of the 18 15-day period beginning upon the later of— 19 (1) the date that the last troubled asset ac20 quired by the Secretary under section 101 has been 21 sold or transferred out of the ownership or control 22 of the Federal Government; or 23 (2) the date of expiration of the last insurance 24 contract issued under section 102. 18 O:\AYO\AYO08C04.xml 1 SEC. 105. REPORTS. 2 (a) IN GENERAL.—Before the expiration of the 60- 3 day period beginning on the date of the first exercise of 4 the authority granted in section 101(a), or of the first ex5 ercise of the authority granted in section 102, whichever 6 occurs first, and every 30-day period thereafter, the Sec7 retary shall report to the appropriate committees of Con8 gress, with respect to each such period— 9 (1) an overview of actions taken by the Sec10 retary, including the considerations required by sec11 tion 103 and the efforts under section 109; 12 (2) the actual obligation and expenditure of the 13 funds provided for administrative expenses by sec14 tion 118 during such period and the expected ex15 penditure of such funds in the subsequent period; 16 and 17 (3) a detailed financial statement with respect 18 to the exercise of authority under this Act, includ19 ing— 20 (A) all agreements made or renewed; 21 (B) all insurance contracts entered into 22 pursuant to section 102; 23 (C) all transactions occurring during such 24 period, including the types of parties involved; 25 (D) the nature of the assets purchased; 26 (E) all projected costs and liabilities; 19 O:\AYO\AYO08C04.xml 1 (F) operating expenses, including com2 pensation for financial agents; 3 (G) the valuation or pricing method used 4 for each transaction; and 5 (H) a description of the vehicles estab6 lished to exercise such authority. 7 (b) TRANCHE REPORTS TO CONGRESS.— 8 (1) REPORTS.—The Secretary shall provide to 9 the appropriate committees of Congress, at the times 10 specified in paragraph (2), a written report, includ11 ing— 12 (A) a description of all of the transactions 13 made during the reporting period; 14 (B) a description of the pricing mechanism 15 for the transactions; 16 (C) a justification of the price paid for and 17 other financial terms associated with the trans18 actions; 19 (D) a description of the impact of the exer20 cise of such authority on the financial system, 21 supported, to the extent possible, by specific 22 data; 23 (E) a description of challenges that remain 24 in the financial system, including any bench25 marks yet to be achieved; and 20 O:\AYO\AYO08C04.xml 1 (F) an estimate of additional actions under 2 the authority provided under this Act that may 3 be necessary to address such challenges. 4 (2) TIMING.—The report required by this sub5 section shall be submitted not later than 7 days 6 after the date on which commitments to purchase 7 troubled assets under the authorities provided in this 8 Act first reach an aggregate of $50,000,000,000 and 9 not later than 7 days after each $50,000,000,000 in10 terval of such commitments is reached thereafter. 11 (c) REGULATORY MODERNIZATION REPORT.—The 12 Secretary shall review the current state of the financial 13 markets and the regulatory system and submit a written 14 report to the appropriate committees of Congress not later 15 than April 30, 2009, analyzing the current state of the 16 regulatory system and its effectiveness at overseeing the 17 participants in the financial markets, including the over18 the-counter swaps market and government-sponsored en19 terprises, and providing recommendations for improve20 ment, including— 21 (1) recommendations regarding— 22 (A) whether any participants in the finan23 cial markets that are currently outside the reg24 ulatory system should become subject to the 25 regulatory system; and 21 O:\AYO\AYO08C04.xml 1 (B) enhancement of the clearing and set2 tlement of over-the-counter swaps; and 3 (2) the rationale underlying such recommenda4 tions. 5 (d) SHARING OF INFORMATION.—Any report re6 quired under this section shall also be submitted to the 7 Congressional Oversight Panel established under section 8 125. 9 (e) SUNSET.—The reporting requirements under this 10 section shall terminate on the later of— 11 (1) the date that the last troubled asset ac12 quired by the Secretary under section 101 has been 13 sold or transferred out of the ownership or control 14 of the Federal Government; or 15 (2) the date of expiration of the last insurance 16 contract issued under section 102. 17 SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED AS18 SETS; REVENUES AND SALE PROCEEDS. 19 (a) EXERCISE OF RIGHTS.—The Secretary may, at 20 any time, exercise any rights received in connection with 21 troubled assets purchased under this Act. 22 (b) MANAGEMENT OF TROUBLED ASSETS.—The Sec23 retary shall have authority to manage troubled assets pur24 chased under this Act, including revenues and portfolio 25 risks therefrom. 22 O:\AYO\AYO08C04.xml 1 (c) SALE OF TROUBLED ASSETS.—The Secretary 2 may, at any time, upon terms and conditions and at a 3 price determined by the Secretary, sell, or enter into secu4 rities loans, repurchase transactions, or other financial 5 transactions in regard to, any troubled asset purchased 6 under this Act. 7 (d) TRANSFER TO TREASURY.—Revenues of, and 8 proceeds from the sale of troubled assets purchased under 9 this Act, or from the sale, exercise, or surrender of war10 rants or senior debt instruments acquired under section 11 113 shall be paid into the general fund of the Treasury 12 for reduction of the public debt. 13 (e) APPLICATION OF SUNSET TO TROUBLED AS14 SETS.—The authority of the Secretary to hold any trou15 bled asset purchased under this Act before the termination 16 date in section 120, or to purchase or fund the purchase 17 of a troubled asset under a commitment entered into be18 fore the termination date in section 120, is not subject 19 to the provisions of section 120. 20 SEC. 107. CONTRACTING PROCEDURES. 21 (a) STREAMLINED PROCESS.—For purposes of this 22 Act, the Secretary may waive specific provisions of the 23 Federal Acquisition Regulation upon a determination that 24 urgent and compelling circumstances make compliance 25 with such provisions contrary to the public interest. Any 23 O:\AYO\AYO08C04.xml 1 such determination, and the justification for such deter2 mination, shall be submitted to the Committees on Over3 sight and Government Reform and Financial Services of 4 the House of Representatives and the Committees on 5 Homeland Security and Governmental Affairs and Bank6 ing, Housing, and Urban Affairs of the Senate within 7 7 days. 8 (b) ADDITIONAL CONTRACTING REQUIREMENTS.—In 9 any solicitation or contract where the Secretary has, pur10 suant to subsection (a), waived any provision of the Fed11 eral Acquisition Regulation pertaining to minority con12 tracting, the Secretary shall develop and implement stand13 ards and procedures to ensure, to the maximum extent 14 practicable, the inclusion and utilization of minorities (as 15 such term is defined in section 1204(c) of the Financial 16 Institutions Reform, Recovery, and Enforcement Act of 17 1989 (12 U.S.C. 1811 note)) and women, and minority18 and women-owned businesses (as such terms are defined 19 in section 21A(r)(4) of the Federal Home Loan Bank Act 20 (12 U.S.C. 1441a(r)(4)), in that solicitation or contract, 21 including contracts to asset managers, servicers, property 22 managers, and other service providers or expert consult23 ants. 24 (c) ELIGIBILITY OF FDIC.—Notwithstanding sub25 sections (a) and (b), the Corporation— 24 O:\AYO\AYO08C04.xml 1 (1) shall be eligible for, and shall be considered 2 in, the selection of asset managers for residential 3 mortgage loans and residential mortgage-backed se4 curities; and 5 (2) shall be reimbursed by the Secretary for 6 any services provided. 7 SEC. 108. CONFLICTS OF INTEREST. 8 (a) STANDARDS REQUIRED.—The Secretary shall 9 issue regulations or guidelines necessary to address and 10 manage or to prohibit conflicts of interest that may arise 11 in connection with the administration and execution of the 12 authorities provided under this Act, including— 13 (1) conflicts arising in the selection or hiring of 14 contractors or advisors, including asset managers; 15 (2) the purchase of troubled assets; 16 (3) the management of the troubled assets held; 17 (4) post-employment restrictions on employees; 18 and 19 (5) any other potential conflict of interest, as 20 the Secretary deems necessary or appropriate in the 21 public interest. 22 (b) TIMING.—Regulations or guidelines required by 23 this section shall be issued as soon as practicable after 24 the date of enactment of this Act. 25 O:\AYO\AYO08C04.xml 1 SEC. 109. FORECLOSURE MITIGATION EFFORTS. 2 (a) RESIDENTIAL MORTGAGE LOAN SERVICING 3 STANDARDS.—To the extent that the Secretary acquires 4 mortgages, mortgage backed securities, and other assets 5 secured by residential real estate, including multifamily 6 housing, the Secretary shall implement a plan that seeks 7 to maximize assistance for homeowners and use the au8 thority of the Secretary to encourage the servicers of the 9 underlying mortgages, considering net present value to the 10 taxpayer, to take advantage of the HOPE for Home11 owners Program under section 257 of the National Hous12 ing Act or other available programs to minimize fore13 closures. In addition, the Secretary may use loan guaran14 tees and credit enhancements to facilitate loan modifica15 tions to prevent avoidable foreclosures. 16 (b) COORDINATION.—The Secretary shall coordinate 17 with the Corporation, the Board (with respect to any 18 mortgage or mortgage-backed securities or pool of securi19 ties held, owned, or controlled by or on behalf of a Federal 20 reserve bank, as provided in section 110(a)(1)(C)), the 21 Federal Housing Finance Agency, the Secretary of Hous22 ing and Urban Development, and other Federal Govern23 ment entities that hold troubled assets to attempt to iden24 tify opportunities for the acquisition of classes of troubled 25 assets that will improve the ability of the Secretary to im26 prove the loan modification and restructuring process and, 26 O:\AYO\AYO08C04.xml 1 where permissible, to permit bona fide tenants who are 2 current on their rent to remain in their homes under the 3 terms of the lease. In the case of a mortgage on a residen4 tial rental property, the plan required under this section 5 shall include protecting Federal, State, and local rental 6 subsidies and protections, and ensuring any modification 7 takes into account the need for operating funds to main8 tain decent and safe conditions at the property. 9 (c) CONSENT TO REASONABLE LOAN MODIFICATION 10 REQUESTS.—Upon any request arising under existing in11 vestment contracts, the Secretary shall consent, where ap12 propriate, and considering net present value to the tax13 payer, to reasonable requests for loss mitigation measures, 14 including term extensions, rate reductions, principal write 15 downs, increases in the proportion of loans within a trust 16 or other structure allowed to be modified, or removal of 17 other limitation on modifications. 18 SEC. 110. ASSISTANCE TO HOMEOWNERS. 19 (a) DEFINITIONS.—As used in this section— 20 (1) the term ‘‘Federal property manager’’ 21 means— 22 (A) the Federal Housing Finance Agency, 23 in its capacity as conservator of the Federal 24 National Mortgage Association and the Federal 25 Home Loan Mortgage Corporation; 27 O:\AYO\AYO08C04.xml 1 (B) the Corporation, with respect to resi2 dential mortgage loans and mortgage-backed se3 curities held by any bridge depository institu4 tion pursuant to section 11(n) of the Federal 5 Deposit Insurance Act; and 6 (C) the Board, with respect to any mort7 gage or mortgage-backed securities or pool of 8 securities held, owned, or controlled by or on 9 behalf of a Federal reserve bank, other than 10 mortgages or securities held, owned, or con11 trolled in connection with open market oper12 ations under section 14 of the Federal Reserve 13 Act (12 U.S.C. 353), or as collateral for an ad14 vance or discount that is not in default; 15 (2) the term ‘‘consumer’’ has the same meaning 16 as in section 103 of the Truth in Lending Act (15 17 U.S.C. 1602); 18 (3) the term ‘‘insured depository institution’’ 19 has the same meaning as in section 3 of the Federal 20 Deposit Insurance Act (12 U.S.C. 1813); and 21 (4) the term ‘‘servicer’’ has the same meaning 22 as in section 6(i)(2) of the Real Estate Settlement 23 Procedures Act of 1974 (12 U.S.C. 2605(i)(2)). 24 (b) HOMEOWNER ASSISTANCE BY AGENCIES.— 28 O:\AYO\AYO08C04.xml 1 (1) IN GENERAL.—To the extent that the Fed2 eral property manager holds, owns, or controls mort3 gages, mortgage backed securities, and other assets 4 secured by residential real estate, including multi5 family housing, the Federal property manager shall 6 implement a plan that seeks to maximize assistance 7 for homeowners and use its authority to encourage 8 the servicers of the underlying mortgages, and con9 sidering net present value to the taxpayer, to take 10 advantage of the HOPE for Homeowners Program 11 under section 257 of the National Housing Act or 12 other available programs to minimize foreclosures. 13 (2) MODIFICATIONS.—In the case of a residen14 tial mortgage loan, modifications made under para15 graph (1) may include— 16 (A) reduction in interest rates; 17 (B) reduction of loan principal; and 18 (C) other similar modifications. 19 (3) TENANT PROTECTIONS.—In the case of 20 mortgages on residential rental properties, modifica21 tions made under paragraph (1) shall ensure— 22 (A) the continuation of any existing Fed23 eral, State, and local rental subsidies and pro24 tections; and 29 O:\AYO\AYO08C04.xml 1 (B) that modifications take into account 2 the need for operating funds to maintain decent 3 and safe conditions at the property. 4 (4) TIMING.—Each Federal property manager 5 shall develop and begin implementation of the plan 6 required by this subsection not later than 60 days 7 after the date of enactment of this Act. 8 (5) REPORTS TO CONGRESS.—Each Federal 9 property manager shall, 60 days after the date of 10 enactment of this Act and every 30 days thereafter, 11 report to Congress specific information on the num12 ber and types of loan modifications made and the 13 number of actual foreclosures occurring during the 14 reporting period in accordance with this section. 15 (6) CONSULTATION.—In developing the plan re16 quired by this subsection, the Federal property man17 agers shall consult with one another and, to the ex18 tent possible, utilize consistent approaches to imple19 ment the requirements of this subsection. 20 (c) ACTIONS WITH RESPECT TO SERVICERS.—In any 21 case in which a Federal property manager is not the owner 22 of a residential mortgage loan, but holds an interest in 23 obligations or pools of obligations secured by residential 24 mortgage loans, the Federal property manager shall— 30 O:\AYO\AYO08C04.xml 1 (1) encourage implementation by the loan 2 servicers of loan modifications developed under sub3 section (b); and 4 (2) assist in facilitating any such modifications, 5 to the extent possible. 6 (d) LIMITATION.—The requirements of this section 7 shall not supersede any other duty or requirement imposed 8 on the Federal property managers under otherwise appli9 cable law. 10 SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE 11 GOVERNANCE. 12 (a) APPLICABILITY.—Any financial institution that 13 sells troubled assets to the Secretary under this Act shall 14 be subject to the executive compensation requirements of 15 subsections (b) and (c) and the provisions under the Inter16 nal Revenue Code of 1986, as provided under the amend17 ment by section 302, as applicable. 18 (b) DIRECT PURCHASES.— 19 (1) IN GENERAL.—Where the Secretary deter20 mines that the purposes of this Act are best met 21 through direct purchases of troubled assets from an 22 individual financial institution where no bidding 23 process or market prices are available, and the Sec24 retary receives a meaningful equity or debt position 25 in the financial institution as a result of the trans31 O:\AYO\AYO08C04.xml 1 action, the Secretary shall require that the financial 2 institution meet appropriate standards for executive 3 compensation and corporate governance. The stand4 ards required under this subsection shall be effective 5 for the duration of the period that the Secretary 6 holds an equity or debt position in the financial in7 stitution. 8 (2) CRITERIA.—The standards required under 9 this subsection shall include— 10 (A) limits on compensation that exclude in11 centives for executive officers of a financial in12 stitution to take unnecessary and excessive 13 risks that threaten the value of the financial in14 stitution during the period that the Secretary 15 holds an equity or debt position in the financial 16 institution; 17 (B) a provision for the recovery by the fi18 nancial institution of any bonus or incentive 19 compensation paid to a senior executive officer 20 based on statements of earnings, gains, or other 21 criteria that are later proven to be materially 22 inaccurate; and 23 (C) a prohibition on the financial institu24 tion making any golden parachute payment to 25 its senior executive officer during the period 32 O:\AYO\AYO08C04.xml 1 that the Secretary holds an equity or debt posi2 tion in the financial institution. 3 (3) DEFINITION.—For purposes of this section, 4 the term ‘‘senior executive officer’’ means an indi5 vidual who is one of the top 5 executives of a public 6 company, whose compensated is required to be dis7 closed pursuant to the Securities Exchange Act of 8 1934, and any regulations issued thereunder, and 9 non-public company counterparts. 10 (c) AUCTION PURCHASES.—Where the Secretary de11 termines that the purposes of this Act are best met 12 through auction purchases of troubled assets, and only 13 where such purchases per financial institution, in the ag14 gregate exceed $300,000,000 (including direct purchases), 15 the Secretary shall prohibit, for such financial institution, 16 any new employment contract with a senior executive offi17 cer that provides a golden parachute in the event of an 18 involuntary termination, bankruptcy filing, insolvency, or 19 receivership. The Secretary shall issue guidance to carry 20 out this paragraph not later than 2 months after the date 21 of enactment of this Act, and such guidance shall be effec22 tive upon issuance. 23 (d) SUNSET.—The provisions of subsection (c) shall 24 apply only to arrangements entered into during the period 33 O:\AYO\AYO08C04.xml 1 during which the authorities under section 101(a) are in 2 effect, as determined under section 120. 3 SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES 4 AND CENTRAL BANKS. 5 The Secretary shall coordinate, as appropriate, with 6 foreign financial authorities and central banks to work to7 ward the establishment of similar programs by such au8 thorities and central banks. To the extent that such for9 eign financial authorities or banks hold troubled assets as 10 a result of extending financing to financial institutions 11 that have failed or defaulted on such financing, such trou12 bled assets qualify for purchase under section 101. 13 SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXI14 MIZATION OF BENEFITS FOR TAXPAYERS. 15 (a) LONG-TERM COSTS AND BENEFITS.— 16 (1) MINIMIZING NEGATIVE IMPACT.—The Sec17 retary shall use the authority under this Act in a 18 manner that will minimize any potential long-term 19 negative impact on the taxpayer, taking into account 20 the direct outlays, potential long-term returns on as21 sets purchased, and the overall economic benefits of 22 the program, including economic benefits due to im23 provements in economic activity and the availability 24 of credit, the impact on the savings and pensions of 34 O:\AYO\AYO08C04.xml 1 individuals, and reductions in losses to the Federal 2 Government. 3 (2) AUTHORITY.—In carrying out paragraph 4 (1), the Secretary shall— 5 (A) hold the assets to maturity or for re6 sale for and until such time as the Secretary 7 determines that the market is optimal for sell8 ing such assets, in order to maximize the value 9 for taxpayers; and 10 (B) sell such assets at a price that the Sec11 retary determines, based on available financial 12 analysis, will maximize return on investment for 13 the Federal Government. 14 (3) PRIVATE SECTOR PARTICIPATION.—The 15 Secretary shall encourage the private sector to par16 ticipate in purchases of troubled assets, and to in17 vest in financial institutions, consistent with the pro18 visions of this section. 19 (b) USE OF MARKET MECHANISMS.—In making pur20 chases under this Act, the Secretary shall— 21 (1) make such purchases at the lowest price 22 that the Secretary determines to be consistent with 23 the purposes of this Act; and 24 (2) maximize the efficiency of the use of tax25 payer resources by using market mechanisms, in35 O:\AYO\AYO08C04.xml 1 cluding auctions or reverse auctions, where appro2 priate. 3 (c) DIRECT PURCHASES.—If the Secretary deter4 mines that use of a market mechanism under subsection 5 (b) is not feasible or appropriate, and the purposes of the 6 Act are best met through direct purchases from an indi7 vidual financial institution, the Secretary shall pursue ad8 ditional measures to ensure that prices paid for assets are 9 reasonable and reflect the underlying value of the asset. 10 (d) CONDITIONS ON PURCHASE AUTHORITY FOR 11 WARRANTS AND DEBT INSTRUMENTS.— 12 (1) IN GENERAL.—The Secretary may not pur13 chase, or make any commitment to purchase, any 14 troubled asset under the authority of this Act, unless 15 the Secretary receives from the financial institution 16 from which such assets are to be purchased— 17 (A) in the case of a financial institution 18 that is registered (or approved for registration) 19 and traded on a national securities exchange or 20 a national securities association registered pur21 suant to section 15A of the Securities Exchange 22 Act of 1934 (15 U.S.C. 78o-3), a warrant giv23 ing the right to the Secretary to receive non24 voting common stock or preferred stock in such 36 O:\AYO\AYO08C04.xml 1 financial institution, as the Secretary deter2 mines appropriate; or 3 (B) in the case of any financial institution 4 other than one described in subparagraph (A), 5 a senior debt instrument from such financial in6 stitution, as described in paragraph (2)(C). 7 (2) TERMS AND CONDITIONS.—The terms and 8 conditions of any warrant or senior debt instrument 9 required under paragraph (1) shall meet the fol10 lowing requirements: 11 (A) PURPOSES.—Such terms and condi12 tions shall, at a minimum, be designed— 13 (i) to provide for reasonable participa14 tion by the Secretary, for the benefit of 15 taxpayers, in equity appreciation in the 16 case of a warrant, or a reasonable interest 17 rate premium, in the case of a debt instru18 ment; and 19 (ii) to provide additional protection 20 for the taxpayer against losses from sale of 21 assets by the Secretary under this Act and 22 the administrative expenses of the TARP. 23 (B) AUTHORITY TO SELL, EXERCISE, OR 24 SURRENDER.—The Secretary may sell, exercise, 25 or surrender a warrant or any senior debt in37 O:\AYO\AYO08C04.xml 1 strument received under this subsection, based 2 on the conditions established under subpara3 graph (A). 4 (C) CONVERSION.—The warrant shall pro5 vide that if, after the warrant is received by the 6 Secretary under this subsection, the financial 7 institution that issued the warrant is no longer 8 listed or traded on a national securities ex9 change or securities association, as described in 10 paragraph (1)(A), such warrants shall convert 11 to senior debt, in an amount determined by the 12 Secretary. 13 (D) PROTECTIONS.—Any warrant rep14 resenting securities to be received by the Sec15 retary under this subsection shall contain anti16 dilution provisions of the type employed in cap17 ital market transactions, as determined by the 18 Secretary. Such provisions shall protect the 19 value of the securities from market transactions 20 such as stock splits, stock distributions, divi21 dends, and other distributions, mergers, and 22 other forms of reorganization or recapitaliza23 tion. 24 (E) EXERCISE PRICE.—The exercise price 25 for any warrant issued pursuant to this sub38 O:\AYO\AYO08C04.xml 1 section shall be set by the Secretary, in the in2 terest of the taxpayers. 3 (F) SUFFICIENCY.—The financial institu4 tion shall guarantee to the Secretary that it has 5 authorized shares of nonvoting stock available 6 to fulfill its obligations under this subsection. 7 Should the financial institution not have suffi8 cient authorized shares, including preferred 9 shares that may carry dividend rights equal to 10 a multiple number of common shares, the Sec11 retary may, to the extent necessary, accept a 12 senior debt note in an amount, and on such 13 terms, as will compensate the Secretary equiva14 lently, in the event that a sufficient shareholder 15 vote to authorize the necessary additional 16 shares cannot be obtained. 17 (3) EXCEPTIONS.— 18 (A) DE MINIMIS.—The Secretary shall es19 tablish de minimis exceptions to the require20 ments of this subsection, based on the size of 21 the cumulative transactions of troubled assets 22 purchased from any one financial institution for 23 the duration of the program, at not more than 24 $100,000,000. 39 O:\AYO\AYO08C04.xml 1 (B) OTHER EXCEPTIONS.—The Secretary 2 shall establish an exception to the requirements 3 of this subsection and appropriate alternative 4 requirements for any participating financial in5 stitution that is legally prohibited from issuing 6 securities and debt instruments, so as not to 7 allow circumvention of the requirements of this 8 section. 9 SEC. 114. MARKET TRANSPARENCY. 10 (a) PRICING.—To facilitate market transparency, the 11 Secretary shall make available to the public, in electronic 12 form, a description, amounts, and pricing of assets ac13 quired under this Act, within 2 business days of purchase, 14 trade, or other disposition. 15 (b) DISCLOSURE.—For each type of financial institu16 tions that sells troubled assets to the Secretary under this 17 Act, the Secretary shall determine whether the public dis18 closure required for such financial institutions with re19 spect to off-balance sheet transactions, derivatives instru20 ments, contingent liabilities, and similar sources of poten21 tial exposure is adequate to provide to the public sufficient 22 information as to the true financial position of the institu23 tions. If such disclosure is not adequate for that purpose, 24 the Secretary shall make recommendations for additional 25 disclosure requirements to the relevant regulators. 40 O:\AYO\AYO08C04.xml 1 SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE. 2 (a) AUTHORITY.—The authority of the Secretary to 3 purchase troubled assets under this Act shall be limited 4 as follows: 5 (1) Effective upon the date of enactment of this 6 Act, such authority shall be limited to 7 $250,000,000,000 outstanding at any one time. 8 (2) If at any time, the President submits to the 9 Congress a written certification that the Secretary 10 needs to exercise the authority under this paragraph, 11 effective upon such submission, such authority shall 12 be limited to $350,000,000,000 outstanding at any 13 one time. 14 (3) If, at any time after the certification in 15 paragraph (2) has been made, the President trans16 mits to the Congress a written report detailing the 17 plan of the Secretary to exercise the authority under 18 this paragraph, unless there is enacted, within 15 19 calendar days of such transmission, a joint resolu20 tion described in subsection (c), effective upon the 21 expiration of such 15-day period, such authority 22 shall be limited to $700,000,000,000 outstanding at 23 any one time. 24 (b) AGGREGATION OF PURCHASE PRICES.—The 25 amount of troubled assets purchased by the Secretary out26 standing at any one time shall be determined for purposes 41 O:\AYO\AYO08C04.xml 1 of the dollar amount limitations under subsection (a) by 2 aggregating the purchase prices of all troubled assets held. 3 (c) JOINT RESOLUTION OF DISAPPROVAL.— 4 (1) IN GENERAL.—Notwithstanding any other 5 provision of this section, the Secretary may not exer6 cise any authority to make purchases under this Act 7 with regard to any amount in excess of 8 $350,000,000,000 previously obligated, as described 9 in this section if, within 15 calendar days after the 10 date on which Congress receives a report of the plan 11 of the Secretary described in subsection (a)(3), there 12 is enacted into law a joint resolution disapproving 13 the plan of the Secretary with respect to such addi14 tional amount. 15 (2) CONTENTS OF JOINT RESOLUTION.—For 16 the purpose of this section, the term ‘‘joint resolu17 tion’’ means only a joint resolution— 18 (A) that is introduced not later than 3 cal19 endar days after the date on which the report 20 of the plan of the Secretary referred to in sub21 section (a)(3) is received by Congress; 22 (B) which does not have a preamble; 23 (C) the title of which is as follows: ‘‘Joint 24 resolution relating to the disapproval of obliga42 O:\AYO\AYO08C04.xml 1 tions under the Emergency Economic Stabiliza2 tion Act of 2008’’; and 3 (D) the matter after the resolving clause of 4 which is as follows: ‘‘That Congress disapproves 5 the obligation of any amount exceeding the 6 amounts obligated as described in paragraphs 7 (1) and (2) of section 114(a) of the Emergency 8 Economic Stabilization Act of 2008.’’. 9 (d) FAST TRACK CONSIDERATION IN HOUSE OF REP10 RESENTATIVES.— 11 (1) RECONVENING.—Upon receipt of a report 12 under subsection (a)(3), the Speaker, if the House 13 would otherwise be adjourned, shall notify the Mem14 bers of the House that, pursuant to this section, the 15 House shall convene not later than the second cal16 endar day after receipt of such report; 17 (2) REPORTING AND DISCHARGE.—Any com18 mittee of the House of Representatives to which a 19 joint resolution is referred shall report it to the 20 House not later than 5 calendar days after the date 21 of receipt of the report described in subsection 22 (a)(3). If a committee fails to report the joint resolu23 tion within that period, the committee shall be dis24 charged from further consideration of the joint reso43 O:\AYO\AYO08C04.xml 1 lution and the joint resolution shall be referred to 2 the appropriate calendar. 3 (3) PROCEEDING TO CONSIDERATION.—After 4 each committee authorized to consider a joint resolu5 tion reports it to the House or has been discharged 6 from its consideration, it shall be in order, not later 7 than the sixth day after Congress receives the report 8 described in subsection (a)(3), to move to proceed to 9 consider the joint resolution in the House. All points 10 of order against the motion are waived. Such a mo11 tion shall not be in order after the House has dis12 posed of a motion to proceed on the joint resolution. 13 The previous question shall be considered as ordered 14 on the motion to its adoption without intervening 15 motion. The motion shall not be debatable. A motion 16 to reconsider the vote by which the motion is dis17 posed of shall not be in order. 18 (4) CONSIDERATION.—The joint resolution 19 shall be considered as read. All points of order 20 against the joint resolution and against its consider21 ation are waived. The previous question shall be con22 sidered as ordered on the joint resolution to its pas23 sage without intervening motion except two hours of 24 debate equally divided and controlled by the pro25 ponent and an opponent. A motion to reconsider the 44 O:\AYO\AYO08C04.xml 1 vote on passage of the joint resolution shall not be 2 in order. 3 (e) FAST TRACK CONSIDERATION IN SENATE.— 4 (1) RECONVENING.—Upon receipt of a report 5 under subsection (a)(3), if the Senate has adjourned 6 or recessed for more than 2 days, the majority lead7 er of the Senate, after consultation with the minority 8 leader of the Senate, shall notify the Members of the 9 Senate that, pursuant to this section, the Senate 10 shall convene not later than the second calendar day 11 after receipt of such message. 12 (2) PLACEMENT ON CALENDAR.—Upon intro13 duction in the Senate, the joint resolution shall be 14 placed immediately on the calendar. 15 (3) FLOOR CONSIDERATION.— 16 (A) IN GENERAL.—Notwithstanding Rule 17 XXII of the Standing Rules of the Senate, it is 18 in order at any time during the period begin19 ning on the 4th day after the date on which 20 Congress receives a report of the plan of the 21 Secretary described in subsection (a)(3) and 22 ending on the 6th day after the date on which 23 Congress receives a report of the plan of the 24 Secretary described in subsection (a)(3) (even 25 though a previous motion to the same effect has 45 O:\AYO\AYO08C04.xml 1 been disagreed to) to move to proceed to the 2 consideration of the joint resolution, and all 3 points of order against the joint resolution (and 4 against consideration of the joint resolution) 5 are waived. The motion to proceed is not debat6 able. The motion is not subject to a motion to 7 postpone. A motion to reconsider the vote by 8 which the motion is agreed to or disagreed to 9 shall not be in order. If a motion to proceed to 10 the consideration of the resolution is agreed to, 11 the joint resolution shall remain the unfinished 12 business until disposed of. 13 (B) DEBATE.—Debate on the joint resolu14 tion, and on all debatable motions and appeals 15 in connection therewith, shall be limited to not 16 more than 10 hours, which shall be divided 17 equally between the majority and minority lead18 ers or their designees. A motion further to limit 19 debate is in order and not debatable. An 20 amendment to, or a motion to postpone, or a 21 motion to proceed to the consideration of other 22 business, or a motion to recommit the joint res23 olution is not in order. 24 (C) VOTE ON PASSAGE.—The vote on pas25 sage shall occur immediately following the con46 O:\AYO\AYO08C04.xml 1 clusion of the debate on a joint resolution, and 2 a single quorum call at the conclusion of the de3 bate if requested in accordance with the rules of 4 the Senate. 5 (D) RULINGS OF THE CHAIR ON PROCE6 DURE.—Appeals from the decisions of the Chair 7 relating to the application of the rules of the 8 Senate, as the case may be, to the procedure re9 lating to a joint resolution shall be decided 10 without debate. 11 (f) RULES RELATING TO SENATE AND HOUSE OF 12 REPRESENTATIVES.— 13 (1) COORDINATION WITH ACTION BY OTHER 14 HOUSE.—If, before the passage by one House of a 15 joint resolution of that House, that House receives 16 from the other House a joint resolution, then the fol17 lowing procedures shall apply: 18 (A) The joint resolution of the other House 19 shall not be referred to a committee. 20 (B) With respect to a joint resolution of 21 the House receiving the resolution— 22 (i) the procedure in that House shall 23 be the same as if no joint resolution had 24 been received from the other House; but 47 O:\AYO\AYO08C04.xml 1 (ii) the vote on passage shall be on 2 the joint resolution of the other House. 3 (2) TREATMENT OF JOINT RESOLUTION OF 4 OTHER HOUSE.—If one House fails to introduce or 5 consider a joint resolution under this section, the 6 joint resolution of the other House shall be entitled 7 to expedited floor procedures under this section. 8 (3) TREATMENT OF COMPANION MEASURES.— 9 If, following passage of the joint resolution in the 10 Senate, the Senate then receives the companion 11 measure from the House of Representatives, the 12 companion measure shall not be debatable. 13 (4) CONSIDERATION AFTER PASSAGE.— 14 (A) IN GENERAL.—If Congress passes a 15 joint resolution, the period beginning on the 16 date the President is presented with the joint 17 resolution and ending on the date the President 18 takes action with respect to the joint resolution 19 shall be disregarded in computing the 15-cal20 endar day period described in subsection (a)(3). 21 (B) VETOES.—If the President vetoes the 22 joint resolution— 23 (i) the period beginning on the date 24 the President vetoes the joint resolution 25 and ending on the date the Congress re48 O:\AYO\AYO08C04.xml 1 ceives the veto message with respect to the 2 joint resolution shall be disregarded in 3 computing the 15-calendar day period de4 scribed in subsection (a)(3), and 5 (ii) debate on a veto message in the 6 Senate under this section shall be 1 hour 7 equally divided between the majority and 8 minority leaders or their designees. 9 (5) RULES OF HOUSE OF REPRESENTATIVES 10 AND SENATE.—This subsection and subsections (c), 11 (d), and (e) are enacted by Congress— 12 (A) as an exercise of the rulemaking power 13 of the Senate and House of Representatives, re14 spectively, and as such it is deemed a part of 15 the rules of each House, respectively, but appli16 cable only with respect to the procedure to be 17 followed in that House in the case of a joint 18 resolution, and it supersedes other rules only to 19 the extent that it is inconsistent with such 20 rules; and 21 (B) with full recognition of the constitu22 tional right of either House to change the rules 23 (so far as relating to the procedure of that 24 House) at any time, in the same manner, and 49 O:\AYO\AYO08C04.xml 1 to the same extent as in the case of any other 2 rule of that House. 3 SEC. 116. OVERSIGHT AND AUDITS. 4 (a) COMPTROLLER GENERAL OVERSIGHT.— 5 (1) SCOPE OF OVERSIGHT.—The Comptroller 6 General of the United States shall, upon establish7 ment of the troubled assets relief program under 8 this Act (in this section referred to as the ‘‘TARP’’), 9 commence ongoing oversight of the activities and 10 performance of the TARP and of any agents and 11 representatives of the TARP (as related to the agent 12 or representative’s activities on behalf of or under 13 the authority of the TARP), including vehicles es14 tablished by the Secretary under this Act. The sub15 jects of such oversight shall include the following: 16 (A) The performance of the TARP in 17 meeting the purposes of this Act, particularly 18 those involving— 19 (i) foreclosure mitigation; 20 (ii) cost reduction; 21 (iii) whether it has provided stability 22 or prevented disruption to the financial 23 markets or the banking system; and 24 (iv) whether it has protected tax25 payers. 50 O:\AYO\AYO08C04.xml 1 (B) The financial condition and internal 2 controls of the TARP, its representatives and 3 agents. 4 (C) Characteristics of transactions and 5 commitments entered into, including trans6 action type, frequency, size, prices paid, and all 7 other relevant terms and conditions, and the 8 timing, duration and terms of any future com9 mitments to purchase assets. 10 (D) Characteristics and disposition of ac11 quired assets, including type, acquisition price, 12 current market value, sale prices and terms, 13 and use of proceeds from sales. 14 (E) Efficiency of the operations of the 15 TARP in the use of appropriated funds. 16 (F) Compliance with all applicable laws 17 and regulations by the TARP, its agents and 18 representatives. 19 (G) The efforts of the TARP to prevent, 20 identify, and minimize conflicts of interest in21 volving any agent or representative performing 22 activities on behalf of or under the authority of 23 the TARP. 24 (H) The efficacy of contracting procedures 25 pursuant to section 107(b), including, as appli51 O:\AYO\AYO08C04.xml 1 cable, the efforts of the TARP in evaluating 2 proposals for inclusion and contracting to the 3 maximum extent possible of minorities (as such 4 term is defined in 1204(c) of the Financial In5 stitutions Reform, Recovery, and Enhancement 6 Act of 1989 (12 U.S.C. 1811 note), women, 7 and minority- and women-owned businesses, in8 cluding ascertaining and reporting the total 9 amount of fees paid and other value delivered 10 by the TARP to all of its agents and represent11 atives, and such amounts paid or delivered to 12 such firms that are minority- and women-owned 13 businesses (as such terms are defined in section 14 21A of the Federal Home Loan Bank Act (12 15 U.S.C. 1441a)). 16 (2) CONDUCT AND ADMINISTRATION OF OVER17 SIGHT.— 18 (A) GAO PRESENCE.—The Secretary shall 19 provide the Comptroller General with appro20 priate space and facilities in the Department of 21 the Treasury as necessary to facilitate oversight 22 of the TARP until the termination date estab23 lished in section 120. 24 (B) ACCESS TO RECORDS.—To the extent 25 otherwise consistent with law, the Comptroller 52 O:\AYO\AYO08C04.xml 1 General shall have access, upon request, to any 2 information, data, schedules, books, accounts, 3 financial records, reports, files, electronic com4 munications, or other papers, things, or prop5 erty belonging to or in use by the TARP, or 6 any vehicles established by the Secretary under 7 this Act, and to the officers, directors, employ8 ees, independent public accountants, financial 9 advisors, and other agents and representatives 10 of the TARP (as related to the agent or rep11 resentative’s activities on behalf of or under the 12 authority of the TARP) or any such vehicle at 13 such reasonable time as the Comptroller Gen14 eral may request. The Comptroller General 15 shall be afforded full facilities for verifying 16 transactions with the balances or securities held 17 by depositaries, fiscal agents, and custodians. 18 The Comptroller General may make and retain 19 copies of such books, accounts, and other 20 records as the Comptroller General deems ap21 propriate. 22 (C) REIMBURSEMENT OF COSTS.—The 23 Treasury shall reimburse the Government Ac24 countability Office for the full cost of any such 25 oversight activities as billed therefor by the 53 O:\AYO\AYO08C04.xml 1 Comptroller General of the United States. Such 2 reimbursements shall be credited to the appro3 priation account ‘‘Salaries and Expenses, Gov4 ernment Accountability Office’’ current when 5 the payment is received and remain available 6 until expended. 7 (3) REPORTING.—The Comptroller General 8 shall submit reports of findings under this section, 9 regularly and no less frequently than once every 60 10 days, to the appropriate committees of Congress, 11 and the Special Inspector General for the Troubled 12 Asset Relief Program established under this Act on 13 the activities and performance of the TARP. The 14 Comptroller may also submit special reports under 15 this subsection as warranted by the findings of its 16 oversight activities. 17 (b) COMPTROLLER GENERAL AUDITS.— 18 (1) ANNUAL AUDIT.—The TARP shall annually 19 prepare and issue to the appropriate committees of 20 Congress and the public audited financial statements 21 prepared in accordance with generally accepted ac22 counting principles, and the Comptroller General 23 shall annually audit such statements in accordance 24 with generally accepted auditing standards. The 25 Treasury shall reimburse the Government Account54 O:\AYO\AYO08C04.xml 1 ability Office for the full cost of any such audit as 2 billed therefor by the Comptroller General. Such re3 imbursements shall be credited to the appropriation 4 account ‘‘Salaries and Expenses, Government Ac5 countability Office’’ current when the payment is re6 ceived and remain available until expended. The fi7 nancial statements prepared under this paragraph 8 shall be on the fiscal year basis prescribed under 9 section 1102 of title 31, United States Code. 10 (2) AUTHORITY.—The Comptroller General 11 may audit the programs, activities, receipts, expendi12 tures, and financial transactions of the TARP and 13 any agents and representatives of the TARP (as re14 lated to the agent or representative’s activities on 15 behalf of or under the authority of the TARP), in16 cluding vehicles established by the Secretary under 17 this Act. 18 (3) CORRECTIVE RESPONSES TO AUDIT PROB19 LEMS.—The TARP shall— 20 (A) take action to address deficiencies 21 identified by the Comptroller General or other 22 auditor engaged by the TARP; or 23 (B) certify to appropriate committees of 24 Congress that no action is necessary or appro25 priate. 55 O:\AYO\AYO08C04.xml 1 (c) INTERNAL CONTROL.— 2 (1) ESTABLISHMENT.—The TARP shall estab3 lish and maintain an effective system of internal 4 control, consistent with the standards prescribed 5 under section 3512(c) of title 31, United States 6 Code, that provides reasonable assurance of— 7 (A) the effectiveness and efficiency of oper8 ations, including the use of the resources of the 9 TARP; 10 (B) the reliability of financial reporting, in11 cluding financial statements and other reports 12 for internal and external use; and 13 (C) compliance with applicable laws and 14 regulations. 15 (2) REPORTING.—In conjunction with each an16 nual financial statement issued under this section, 17 the TARP shall— 18 (A) state the responsibility of management 19 for establishing and maintaining adequate in20 ternal control over financial reporting; and 21 (B) state its assessment, as of the end of 22 the most recent year covered by such financial 23 statement of the TARP, of the effectiveness of 24 the internal control over financial reporting. 56 O:\AYO\AYO08C04.xml 1 (d) SHARING OF INFORMATION.—Any report or audit 2 required under this section shall also be submitted to the 3 Congressional Oversight Panel established under section 4 125. 5 (e) TERMINATION.—Any oversight, reporting, or 6 audit requirement under this section shall terminate on 7 the later of— 8 (1) the date that the last troubled asset ac9 quired by the Secretary under section 101 has been 10 sold or transferred out of the ownership or control 11 of the Federal Government; or 12 (2) the date of expiration of the last insurance 13 contract issued under section 102. 14 SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY. 15 (a) STUDY.—The Comptroller General shall under16 take a study to determine the extent to which leverage 17 and sudden deleveraging of financial institutions was a 18 factor behind the current financial crisis. 19 (b) CONTENT.—The study required by this section 20 shall include— 21 (1) an analysis of the roles and responsibilities 22 of the Board, the Securities and Exchange Commis23 sion, the Secretary, and other Federal banking agen24 cies with respect to monitoring leverage and acting 25 to curtail excessive leveraging; 57 O:\AYO\AYO08C04.xml 1 (2) an analysis of the authority of the Board to 2 regulate leverage, including by setting margin re3 quirements, and what process the Board used to de4 cide whether or not to use its authority; 5 (3) an analysis of any usage of the margin au6 thority by the Board; and 7 (4) recommendations for the Board and appro8 priate committees of Congress with respect to the 9 existing authority of the Board. 10 (c) REPORT.—Not later than June 1, 2009, the 11 Comptroller General shall complete and submit a report 12 on the study required by this section to the Committee 13 on Banking, Housing, and Urban Affairs of the Senate 14 and the Committee on Financial Services of the House of 15 Representatives. 16 (d) SHARING OF INFORMATION.—Any reports re17 quired under this section shall also be submitted to the 18 Congressional Oversight Panel established under section 19 125. 20 SEC. 118. FUNDING. 21 For the purpose of the authorities granted in this 22 Act, and for the costs of administering those authorities, 23 the Secretary may use the proceeds of the sale of any secu24 rities issued under chapter 31 of title 31, United States 25 Code, and the purposes for which securities may be issued 58 O:\AYO\AYO08C04.xml 1 under chapter 31 of title 31, United States Code, are ex2 tended to include actions authorized by this Act, including 3 the payment of administrative expenses. Any funds ex4 pended or obligated by the Secretary for actions author5 ized by this Act, including the payment of administrative 6 expenses, shall be deemed appropriated at the time of such 7 expenditure or obligation. 8 SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS. 9 (a) JUDICIAL REVIEW.— 10 (1) STANDARD.—Actions by the Secretary pur11 suant to the authority of this Act shall be subject to 12 chapter 7 of title 5, United States Code, including 13 that such final actions shall be held unlawful and set 14 aside if found to be arbitrary, capricious, an abuse 15 of discretion, or not in accordance with law. 16 (2) LIMITATIONS ON EQUITABLE RELIEF.— 17 (A) INJUNCTION.—No injunction or other 18 form of equitable relief shall be issued against 19 the Secretary for actions pursuant to section 20 101, 102, 106, and 109, other than to remedy 21 a violation of the Constitution. 22 (B) TEMPORARY RESTRAINING ORDER.— 23 Any request for a temporary restraining order 24 against the Secretary for actions pursuant to 25 this Act shall be considered and granted or de59 O:\AYO\AYO08C04.xml 1 nied by the court within 3 days of the date of 2 the request. 3 (C) PRELIMINARY INJUNCTION.—Any re4 quest for a preliminary injunction against the 5 Secretary for actions pursuant to this Act shall 6 be considered and granted or denied by the 7 court on an expedited basis consistent with the 8 provisions of rule 65(b)(3) of the Federal Rules 9 of Civil Procedure, or any successor thereto. 10 (D) PERMANENT INJUNCTION.—Any re11 quest for a permanent injunction against the 12 Secretary for actions pursuant to this Act shall 13 be considered and granted or denied by the 14 court on an expedited basis. Whenever possible, 15 the court shall consolidate trial on the merits 16 with any hearing on a request for a preliminary 17 injunction, consistent with the provisions of rule 18 65(a)(2) of the Federal Rules of Civil Proce19 dure, or any successor thereto. 20 (3) LIMITATION ON ACTIONS BY PARTICIPATING 21 COMPANIES.—No action or claims may be brought 22 against the Secretary by any person that divests its 23 assets with respect to its participation in a program 24 under this Act, except as provided in paragraph (1), 60 O:\AYO\AYO08C04.xml 1 other than as expressly provided in a written con2 tract with the Secretary. 3 (4) STAYS.—Any injunction or other form of 4 equitable relief issued against the Secretary for ac5 tions pursuant to section 101, 102, 106, and 109, 6 shall be automatically stayed. The stay shall be lift7 ed unless the Secretary seeks a stay from a higher 8 court within 3 calendar days after the date on which 9 the relief is issued. 10 (b) RELATED MATTERS.— 11 (1) TREATMENT OF HOMEOWNERS’ RIGHTS.— 12 The terms of any residential mortgage loan that is 13 part of any purchase by the Secretary under this Act 14 shall remain subject to all claims and defenses that 15 would otherwise apply, notwithstanding the exercise 16 of authority by the Secretary under this Act. 17 (2) SAVINGS CLAUSE.—Any exercise of the au18 thority of the Secretary pursuant to this Act shall 19 not impair the claims or defenses that would other20 wise apply with respect to persons other than the 21 Secretary. Except as established in any contract, a 22 servicer of pooled residential mortgages owes any 23 duty to determine whether the net present value of 24 the payments on the loan, as modified, is likely to 25 be greater than the anticipated net recovery that 61 O:\AYO\AYO08C04.xml 1 would result from foreclosure to all investors and 2 holders of beneficial interests in such investment, 3 but not to any individual or groups of investors or 4 beneficial interest holders, and shall be deemed to 5 act in the best interests of all such investors or hold6 ers of beneficial interests if the servicer agrees to or 7 implements a modification or workout plan when the 8 servicer takes reasonable loss mitigation actions, in9 cluding partial payments. 10 SEC. 120. TERMINATION OF AUTHORITY. 11 (a) TERMINATION.—The authorities provided under 12 sections 101(a) and 102 shall terminate on December 31, 13 2009. 14 (b) EXTENSION UPON CERTIFICATION.—The Sec15 retary, upon submission of a written certification to Con16 gress, may extend the authority provided under this Act 17 to expire not later than 2 years from the date of enact18 ment of this Act. Such certification shall include a jus19 tification of why the extension is necessary to assist Amer20 ican families and stabilize financial markets, as well as 21 the expected cost to the taxpayers for such an extension. 62 O:\AYO\AYO08C04.xml 1 SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROU2 BLED ASSET RELIEF PROGRAM. 3 (a) OFFICE OF INSPECTOR GENERAL.—There is 4 hereby established the Office of the Special Inspector Gen5 eral for the Troubled Asset Relief Program. 6 (b) APPOINTMENT OF INSPECTOR GENERAL; RE7 MOVAL.—(1) The head of the Office of the Special Inspec8 tor General for the Troubled Asset Relief Program is the 9 Special Inspector General for the Troubled Asset Relief 10 Program (in this section referred to as the ‘‘Special In11 spector General’’), who shall be appointed by the Presi12 dent, by and with the advice and consent of the Senate. 13 (2) The appointment of the Special Inspector General 14 shall be made on the basis of integrity and demonstrated 15 ability in accounting, auditing, financial analysis, law, 16 management analysis, public administration, or investiga17 tions. 18 (3) The nomination of an individual as Special In19 spector General shall be made as soon as practicable after 20 the establishment of any program under sections 101 and 21 102. 22 (4) The Special Inspector General shall be removable 23 from office in accordance with the provisions of section 24 3(b) of the Inspector General Act of 1978 (5 U.S.C. App.). 25 (5) For purposes of section 7324 of title 5, United 26 States Code, the Special Inspector General shall not be 63 O:\AYO\AYO08C04.xml 1 considered an employee who determines policies to be pur2 sued by the United States in the nationwide administra3 tion of Federal law. 4 (6) The annual rate of basic pay of the Special In5 spector General shall be the annual rate of basic pay pro6 vided for positions at level IV of the Executive Schedule 7 under section 5315 of title 5, United States Code. 8 (c) DUTIES.—(1) It shall be the duty of the Special 9 Inspector General to conduct, supervise, and coordinate 10 audits and investigations of the purchase, management, 11 and sale of assets by the Secretary of the Treasury under 12 any program established by the Secretary under section 13 101, and the management by the Secretary of any pro14 gram established under section 102, including by col15 lecting and summarizing the following information: 16 (A) A description of the categories of troubled 17 assets purchased or otherwise procured by the Sec18 retary. 19 (B) A listing of the troubled assets purchased 20 in each such category described under subparagraph 21 (A). 22 (C) An explanation of the reasons the Secretary 23 deemed it necessary to purchase each such troubled 24 asset. 64 O:\AYO\AYO08C04.xml 1 (D) A listing of each financial institution that 2 such troubled assets were purchased from. 3 (E) A listing of and detailed biographical infor4 mation on each person or entity hired to manage 5 such troubled assets. 6 (F) A current estimate of the total amount of 7 troubled assets purchased pursuant to any program 8 established under section 101, the amount of trou9 bled assets on the books of the Treasury, the 10 amount of troubled assets sold, and the profit and 11 loss incurred on each sale or disposition of each such 12 troubled asset. 13 (G) A listing of the insurance contracts issued 14 under section 102. 15 (2) The Special Inspector General shall establish, 16 maintain, and oversee such systems, procedures, and con17 trols as the Special Inspector General considers appro18 priate to discharge the duty under paragraph (1). 19 (3) In addition to the duties specified in paragraphs 20 (1) and (2), the Inspector General shall also have the du21 ties and responsibilities of inspectors general under the In22 spector General Act of 1978. 23 (d) POWERS AND AUTHORITIES.—(1) In carrying out 24 the duties specified in subsection (c), the Special Inspector 65 O:\AYO\AYO08C04.xml 1 General shall have the authorities provided in section 6 2 of the Inspector General Act of 1978. 3 (2) The Special Inspector General shall carry out the 4 duties specified in subsection (c)(1) in accordance with 5 section 4(b)(1) of the Inspector General Act of 1978. 6 (e) PERSONNEL, FACILITIES, AND OTHER RE7 SOURCES.—(1) The Special Inspector General may select, 8 appoint, and employ such officers and employees as may 9 be necessary for carrying out the duties of the Special In10 spector General, subject to the provisions of title 5, United 11 States Code, governing appointments in the competitive 12 service, and the provisions of chapter 51 and subchapter 13 III of chapter 53 of such title, relating to classification 14 and General Schedule pay rates. 15 (2) The Special Inspector General may obtain serv16 ices as authorized by section 3109 of title 5, United States 17 Code, at daily rates not to exceed the equivalent rate pre18 scribed for grade GS–15 of the General Schedule by sec19 tion 5332 of such title. 20 (3) The Special Inspector General may enter into 21 contracts and other arrangements for audits, studies, 22 analyses, and other services with public agencies and with 23 private persons, and make such payments as may be nec24 essary to carry out the duties of the Inspector General. 66 O:\AYO\AYO08C04.xml 1 (4)(A) Upon request of the Special Inspector General 2 for information or assistance from any department, agen3 cy, or other entity of the Federal Government, the head 4 of such entity shall, insofar as is practicable and not in 5 contravention of any existing law, furnish such informa6 tion or assistance to the Special Inspector General, or an 7 authorized designee. 8 (B) Whenever information or assistance requested by 9 the Special Inspector General is, in the judgment of the 10 Special Inspector General, unreasonably refused or not 11 provided, the Special Inspector General shall report the 12 circumstances to the appropriate committees of Congress 13 without delay. 14 (f) REPORTS.—(1) Not later than 60 days after the 15 confirmation of the Special Inspector General, and every 16 calendar quarter thereafter, the Special Inspector General 17 shall submit to the appropriate committees of Congress 18 a report summarizing the activities of the Special Inspec19 tor General during the 120-day period ending on the date 20 of such report. Each report shall include, for the period 21 covered by such report, a detailed statement of all pur22 chases, obligations, expenditures, and revenues associated 23 with any program established by the Secretary of the 24 Treasury under sections 101 and 102, as well as the infor25 mation collected under subsection (c)(1). 67 O:\AYO\AYO08C04.xml 1 (2) Nothing in this subsection shall be construed to 2 authorize the public disclosure of information that is— 3 (A) specifically prohibited from disclosure by 4 any other provision of law; 5 (B) specifically required by Executive order to 6 be protected from disclosure in the interest of na7 tional defense or national security or in the conduct 8 of foreign affairs; or 9 (C) a part of an ongoing criminal investigation. 10 (3) Any reports required under this section shall also 11 be submitted to the Congressional Oversight Panel estab12 lished under section 125. 13 (g) FUNDING.—(1) Of the amounts made available 14 to the Secretary of the Treasury under section 118, 15 $50,000,000 shall be available to the Special Inspector 16 General to carry out this section. 17 (2) The amount available under paragraph (1) shall 18 remain available until expended. 19 (h) TERMINATION.—The Office of the Special Inspec20 tor General shall terminate on the later of— 21 (1) the date that the last troubled asset ac22 quired by the Secretary under section 101 has been 23 sold or transferred out of the ownership or control 24 of the Federal Government; or 68 O:\AYO\AYO08C04.xml 1 (2) the date of expiration of the last insurance 2 contract issued under section 102. 3 SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC 4 DEBT. 5 Subsection (b) of section 3101 of title 31, United 6 States Code, is amended by striking out the dollar limita7 tion contained in such subsection and inserting 8 ‘‘$11,315,000,000,000’’. 9 SEC. 123. CREDIT REFORM. 10 (a) IN GENERAL.—Subject to subsection (b), the 11 costs of purchases of troubled assets made under section 12 101(a) and guarantees of troubled assets under section 13 102, and any cash flows associated with the activities au14 thorized in section 102 and subsections (a), (b), and (c) 15 of section 106 shall be determined as provided under the 16 Federal Credit Reform Act of 1990 (2 U.S.C. 661 et. 17 seq.), as applicable. 18 (b) COSTS.—For the purposes of section 502(5) of 19 the Federal Credit Reform Act of 1990 (2 U.S.C. 20 661a(5))— 21 (1) the cost of troubled assets and guarantees 22 of troubled assets shall be calculated by adjusting 23 the discount rate in section 502(5)(E) (2 U.S.C. 24 661a(5)(E)) for market risks; and 69 O:\AYO\AYO08C04.xml 1 (2) the cost of a modification of a troubled 2 asset or guarantee of a troubled asset shall be the 3 difference between the current estimate consistent 4 with paragraph (1) under the terms of the troubled 5 asset or guarantee of the troubled asset and the cur6 rent estimate consistent with paragraph (1) under 7 the terms of the troubled asset or guarantee of the 8 troubled asset, as modified. 9 SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. 10 Section 257 of the National Housing Act (12 U.S.C. 11 1715z-23) is amended— 12 (1) in subsection (e)— 13 (A) in paragraph (1)(B), by inserting be14 fore ‘‘a ratio’’ the following: ‘‘, or thereafter is 15 likely to have, due to the terms of the mortgage 16 being reset,’’; 17 (B) in paragraph (2)(B), by inserting be18 fore the period at the end ‘‘(or such higher per19 centage as the Board determines, in the discre20 tion of the Board)’’; 21 (C) in paragraph (4)(A)— 22 (i) in the first sentence, by inserting 23 after ‘‘insured loan’’ the following: ‘‘and 24 any payments made under this para25 graph,’’; and 70 O:\AYO\AYO08C04.xml 1 (ii) by adding at the end the fol2 lowing: ‘‘Such actions may include making 3 payments, which shall be accepted as pay4 ment in full of all indebtedness under the 5 eligible mortgage, to any holder of an ex6 isting subordinate mortgage, in lieu of any 7 future appreciation payments authorized 8 under subparagraph (B).’’; and 9 (2) in subsection (w), by inserting after ‘‘ad10 ministrative costs’’ the following: ‘‘and payments 11 pursuant to subsection (e)(4)(A)’’. 12 SEC. 125. CONGRESSIONAL OVERSIGHT PANEL. 13 (a) ESTABLISHMENT.—There is hereby established 14 the Congressional Oversight Panel (hereafter in this sec15 tion referred to as the ‘‘Oversight Panel’’) as an establish16 ment in the legislative branch. 17 (b) DUTIES.—The Oversight Panel shall review the 18 current state of the financial markets and the regulatory 19 system and submit the following reports to Congress: 20 (1) REGULAR REPORTS.— 21 (A) IN GENERAL.—Regular reports of the 22 Oversight Panel shall include the following: 23 (i) The use by the Secretary of au24 thority under this Act, including with re71 O:\AYO\AYO08C04.xml 1 spect to the use of contracting authority 2 and administration of the program. 3 (ii) The impact of purchases made 4 under the Act on the financial markets and 5 financial institutions. 6 (iii) The extent to which the informa7 tion made available on transactions under 8 the program has contributed to market 9 transparency. 10 (iv) The effectiveness of foreclosure 11 mitigation efforts, and the effectiveness of 12 the program from the standpoint of mini13 mizing long-term costs to the taxpayers 14 and maximizing the benefits for taxpayers. 15 (B) TIMING.—The reports required under 16 this paragraph shall be submitted not later 17 than 30 days after the first exercise by the Sec18 retary of the authority under section 101(a) or 19 102, and every 30 days thereafter. 20 (2) SPECIAL REPORT ON REGULATORY RE21 FORM.—The Oversight Panel shall submit a special 22 report on regulatory reform not later than January 23 20, 2009, analyzing the current state of the regu24 latory system and its effectiveness at overseeing the 25 participants in the financial system and protecting 72 O:\AYO\AYO08C04.xml 1 consumers, and providing recommendations for im2 provement, including recommendations regarding 3 whether any participants in the financial markets 4 that are currently outside the regulatory system 5 should become subject to the regulatory system, the 6 rationale underlying such recommendation, and 7 whether there are any gaps in existing consumer 8 protections. 9 (c) MEMBERSHIP.— 10 (1) IN GENERAL.—The Oversight Panel shall 11 consist of 5 members, as follows: 12 (A) 1 member appointed by the Speaker of 13 the House of Representatives. 14 (B) 1 member appointed by the minority 15 leader of the House of Representatives. 16 (C) 1 member appointed by the majority 17 leader of the Senate. 18 (D) 1 member appointed by the minority 19 leader of the Senate. 20 (E) 1 member appointed by the Speaker of 21 the House of Representatives and the majority 22 leader of the Senate, after consultation with the 23 minority leader of the Senate and the minority 24 leader of the House of Representatives. 73 O:\AYO\AYO08C04.xml 1 (2) PAY.—Each member of the Oversight Panel 2 shall each be paid at a rate equal to the daily equiv3 alent of the annual rate of basic pay for level I of 4 the Executive Schedule for each day (including trav5 el time) during which such member is engaged in 6 the actual performance of duties vested in the Com7 mission. 8 (3) PROHIBITION OF COMPENSATION OF FED9 ERAL EMPLOYEES.—Members of the Oversight 10 Panel who are full-time officers or employees of the 11 United States or Members of Congress may not re12 ceive additional pay, allowances, or benefits by rea13 son of their service on the Oversight Panel. 14 (4) TRAVEL EXPENSES.—Each member shall 15 receive travel expenses, including per diem in lieu of 16 subsistence, in accordance with applicable provisions 17 under subchapter I of chapter 57 of title 5, United 18 States Code. 19 (5) QUORUM.—Four members of the Oversight 20 Panel shall constitute a quorum but a lesser number 21 may hold hearings. 22 (6) VACANCIES.—A vacancy on the Oversight 23 Panel shall be filled in the manner in which the 24 original appointment was made. 74 O:\AYO\AYO08C04.xml 1 (7) MEETINGS.—The Oversight Panel shall 2 meet at the call of the Chairperson or a majority of 3 its members. 4 (d) STAFF.— 5 (1) IN GENERAL.—The Oversight Panel may 6 appoint and fix the pay of any personnel as the 7 Commission considers appropriate. 8 (2) EXPERTS AND CONSULTANTS.—The Over9 sight Panel may procure temporary and intermittent 10 services under section 3109(b) of title 5, United 11 States Code. 12 (3) STAFF OF AGENCIES.—Upon request of the 13 Oversight Panel, the head of any Federal depart14 ment or agency may detail, on a reimbursable basis, 15 any of the personnel of that department or agency 16 to the Oversight Panel to assist it in carrying out its 17 duties under this Act. 18 (e) POWERS.— 19 (1) HEARINGS AND SESSIONS.—The Oversight 20 Panel may, for the purpose of carrying out this sec21 tion, hold hearings, sit and act at times and places, 22 take testimony, and receive evidence as the Panel 23 considers appropriate and may administer oaths or 24 affirmations to witnesses appearing before it. 75 O:\AYO\AYO08C04.xml 1 (2) POWERS OF MEMBERS AND AGENTS.—Any 2 member or agent of the Oversight Panel may, if au3 thorized by the Oversight Panel, take any action 4 which the Oversight Panel is authorized to take by 5 this section. 6 (3) OBTAINING OFFICIAL DATA.—The Over7 sight Panel may secure directly from any depart8 ment or agency of the United States information 9 necessary to enable it to carry out this section. Upon 10 request of the Chairperson of the Oversight Panel, 11 the head of that department or agency shall furnish 12 that information to the Oversight Panel. 13 (4) REPORTS .—The Oversight Panel shall re14 ceive and consider all reports required to be sub15 mitted to the Oversight Panel under this Act. 16 (f) TERMINATION.—The Oversight Panel shall termi17 nate 6 months after the termination date specified in sec18 tion 120. 19 (g) FUNDING FOR EXPENSES.— 20 (1) AUTHORIZATION OF APPROPRIATIONS.— 21 There is authorized to be appropriated to the Over22 sight Panel such sums as may be necessary for any 23 fiscal year, half of which shall be derived from the 24 applicable account of the House of Representatives, 76 O:\AYO\AYO08C04.xml 1 and half of which shall be derived from the contin2 gent fund of the Senate. 3 (2) REIMBURSEMENT OF AMOUNTS.—An 4 amount equal to the expenses of the Oversight Panel 5 shall be promptly transferred by the Secretary, from 6 time to time upon the presentment of a statement 7 of such expenses by the Chairperson of the Over8 sight Panel, from funds made available to the Sec9 retary under this Act to the applicable fund of the 10 House of Representatives and the contingent fund of 11 the Senate, as appropriate, as reimbursement for 12 amounts expended from such account and fund 13 under paragraph (1). 14 SEC. 126. FDIC AUTHORITY. 15 (a) IN GENERAL.—Section 18(a) of the Federal De16 posit Insurance Act (12 U.S.C. 1828(a)) is amended by 17 adding at the end the following new paragraph: 18 ‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC 19 NAMES, AND MISREPRESENTATION TO INDICATE IN20 SURED STATUS.— 21 ‘‘(A) PROHIBITION ON FALSE ADVER22 TISING AND MISUSE OF FDIC NAMES.—No per23 son may represent or imply that any deposit li24 ability, obligation, certificate, or share is in25 sured or guaranteed by the Corporation, if such 77 O:\AYO\AYO08C04.xml 1 deposit liability, obligation, certificate, or share 2 is not insured or guaranteed by the Corpora3 tion— 4 ‘‘(i) by using the terms ‘Federal De5 posit’, ‘Federal Deposit Insurance’, ‘Fed6 eral Deposit Insurance Corporation’, any 7 combination of such terms, or the abbre8 viation ‘FDIC’ as part of the business 9 name or firm name of any person, includ10 ing any corporation, partnership, business 11 trust, association, or other business entity; 12 or 13 ‘‘(ii) by using such terms or any other 14 terms, sign, or symbol as part of an adver15 tisement, solicitation, or other document. 16 ‘‘(B) PROHIBITION ON MISREPRESENTA17 TIONS OF INSURED STATUS.—No person may 18 knowingly misrepresent— 19 ‘‘(i) that any deposit liability, obliga20 tion, certificate, or share is insured, under 21 this Act, if such deposit liability, obliga22 tion, certificate, or share is not so insured; 23 or 24 ‘‘(ii) the extent to which or the man25 ner in which any deposit liability, obliga78 O:\AYO\AYO08C04.xml 1 tion, certificate, or share is insured under 2 this Act, if such deposit liability, obliga3 tion, certificate, or share is not so insured, 4 to the extent or in the manner represented. 5 ‘‘(C) AUTHORITY OF THE APPROPRIATE 6 FEDERAL BANKING AGENCY.—The appropriate 7 Federal banking agency shall have enforcement 8 authority in the case of a violation of this para9 graph by any person for which the agency is the 10 appropriate Federal banking agency, or any in11 stitution-affiliated party thereof. 12 ‘‘(D) CORPORATION AUTHORITY IF THE 13 APPROPRIATE FEDERAL BANKING AGENCY 14 FAILS TO FOLLOW RECOMMENDATION.— 15 ‘‘(i) RECOMMENDATION.—The Cor16 poration may recommend in writing to the 17 appropriate Federal banking agency that 18 the agency take any enforcement action 19 authorized under section 8 for purposes of 20 enforcement of this paragraph with respect 21 to any person for which the agency is the 22 appropriate Federal banking agency or any 23 institution-affiliated party thereof. 24 ‘‘(ii) AGENCY RESPONSE.—If the ap25 propriate Federal banking agency does not, 79 O:\AYO\AYO08C04.xml 1 within 30 days of the date of receipt of a 2 recommendation under clause (i), take the 3 enforcement action with respect to this 4 paragraph recommended by the Corpora5 tion or provide a plan acceptable to the 6 Corporation for responding to the situation 7 presented, the Corporation may take the 8 recommended enforcement action against 9 such person or institution-affiliated party. 10 ‘‘(E) ADDITIONAL AUTHORITY.—In addi11 tion to its authority under subparagraphs (C) 12 and (D), for purposes of this paragraph, the 13 Corporation shall have, in the same manner and 14 to the same extent as with respect to a State 15 nonmember insured bank— 16 ‘‘(i) jurisdiction over— 17 ‘‘(I) any person other than a per18 son for which another agency is the 19 appropriate Federal banking agency 20 or any institution-affiliated party 21 thereof; and 22 ‘‘(II) any person that aids or 23 abets a violation of this paragraph by 24 a person described in subclause (I); 25 and 80 O:\AYO\AYO08C04.xml 1 ‘‘(ii) for purposes of enforcing the re2 quirements of this paragraph, the author3 ity of the Corporation under— 4 ‘‘(I) section 10(c) to conduct in5 vestigations; and 6 ‘‘(II) subsections (b), (c), (d) and 7 (i) of section 8 to conduct enforce8 ment actions. 9 ‘‘(F) OTHER ACTIONS PRESERVED.—No 10 provision of this paragraph shall be construed 11 as barring any action otherwise available, under 12 the laws of the United States or any State, to 13 any Federal or State agency or individual.’’. 14 (b) ENFORCEMENT ORDERS.—Section 8(c) of the 15 Federal Deposit Insurance Act (12 U.S.C. 1818(c)) is 16 amended by adding at the end the following new para17 graph: 18 ‘‘(4) FALSE ADVERTISING OR MISUSE OF 19 NAMES TO INDICATE INSURED STATUS.— 20 ‘‘(A) TEMPORARY ORDER.— 21 ‘‘(i) IN GENERAL.—If a notice of 22 charges served under subsection (b)(1) 23 specifies on the basis of particular facts 24 that any person engaged or is engaging in 25 conduct described in section 18(a)(4), the 81 O:\AYO\AYO08C04.xml 1 Corporation or other appropriate Federal 2 banking agency may issue a temporary 3 order requiring— 4 ‘‘(I) the immediate cessation of 5 any activity or practice described, 6 which gave rise to the notice of 7 charges; and 8 ‘‘(II) affirmative action to pre9 vent any further, or to remedy any ex10 isting, violation. 11 ‘‘(ii) EFFECT OF ORDER.—Any tem12 porary order issued under this subpara13 graph shall take effect upon service. 14 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY 15 ORDER.—A temporary order issued under sub16 paragraph (A) shall remain effective and en17 forceable, pending the completion of an admin18 istrative proceeding pursuant to subsection 19 (b)(1) in connection with the notice of 20 charges— 21 ‘‘(i) until such time as the Corpora22 tion or other appropriate Federal banking 23 agency dismisses the charges specified in 24 such notice; or 82 O:\AYO\AYO08C04.xml 1 ‘‘(ii) if a cease-and-desist order is 2 issued against such person, until the effec3 tive date of such order. 4 ‘‘(C) CIVIL MONEY PENALTIES.—Any vio5 lation of section 18(a)(4) shall be subject to 6 civil money penalties, as set forth in subsection 7 (i), except that for any person other than an in8 sured depository institution or an institution-af9 filiated party that is found to have violated this 10 paragraph, the Corporation or other appro11 priate Federal banking agency shall not be re12 quired to demonstrate any loss to an insured 13 depository institution.’’. 14 (c) UNENFORCEABILITY OF CERTAIN AGREE15 MENTS.—Section 13(c) of the Federal Deposit Insurance 16 Act (12 U.S.C. 1823(c)) is amended by adding at the end 17 the following new paragraph: 18 ‘‘(11) UNENFORCEABILITY OF CERTAIN AGREE19 MENTS.—No provision contained in any existing or 20 future standstill, confidentiality, or other agreement 21 that, directly or indirectly— 22 ‘‘(A) affects, restricts, or limits the ability 23 of any person to offer to acquire or acquire, 24 ‘‘(B) prohibits any person from offering to 25 acquire or acquiring, or 83 O:\AYO\AYO08C04.xml 1 ‘‘(C) prohibits any person from using any 2 previously disclosed information in connection 3 with any such offer to acquire or acquisition of, 4 all or part of any insured depository institution, in5 cluding any liabilities, assets, or interest therein, in 6 connection with any transaction in which the Cor7 poration exercises its authority under section 11 or 8 13, shall be enforceable against or impose any liabil9 ity on such person, as such enforcement or liability 10 shall be contrary to public policy.’’. 11 (d) TECHNICAL AND CONFORMING AMENDMENTS.— 12 Section 18 of the Federal Deposit Insurance Act (12 13 U.S.C. 1828) is amended— 14 (1) in subsection (a)(3)— 15 (A) by striking ‘‘this subsection’’ the first 16 place that term appears and inserting ‘‘para17 graph (1)’’; and 18 (B) by striking ‘‘this subsection’’ the sec19 ond place that term appears and inserting 20 ‘‘paragraph (2)’’; and 21 (2) in the heading for subsection (a), by strik22 ing ‘‘INSURANCE LOGO.—’’ and inserting ‘‘REP23 RESENTATIONS OF DEPOSIT INSURANCE.—’’. 84 O:\AYO\AYO08C04.xml 1 SEC. 127. COOPERATION WITH THE FBI. 2 Any Federal financial regulatory agency shall cooper3 ate with the Federal Bureau of Investigation and other 4 law enforcement agencies investigating fraud, misrepre5 sentation, and malfeasance with respect to development, 6 advertising, and sale of financial products. 7 SEC. 128. ACCELERATION OF EFFECTIVE DATE. 8 Section 203 of the Financial Services Regulatory Re9 lief Act of 2006 (12 U.S.C. 461 note) is amended by strik10 ing ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2008’’. 11 SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHOR12 ITY. 13 (a) IN GENERAL.—Not later than 7 days after the 14 date on which the Board exercises its authority under the 15 third paragraph of section 13 of the Federal Reserve Act 16 (12 U.S.C. 343; relating to discounts for individuals, part17 nerships, and corporations) the Board shall provide to the 18 Committee on Banking, Housing, and Urban Affairs of 19 the Senate and the Committee on Financial Services of 20 the House of Representatives a report which includes— 21 (1) the justification for exercising the authority; 22 and 23 (2) the specific terms of the actions of the 24 Board, including the size and duration of the lend25 ing, available information concerning the value of 26 any collateral held with respect to such a loan, the 85 O:\AYO\AYO08C04.xml 1 recipient of warrants or any other potential equity in 2 exchange for the loan, and any expected cost to the 3 taxpayers for such exercise. 4 (b) PERIODIC UPDATES.—The Board shall provide 5 updates to the Committees specified in subsection (a) not 6 less frequently than once every 60 days while the subject 7 loan is outstanding, including— 8 (1) the status of the loan; 9 (2) the value of the collateral held by the Fed10 eral reserve bank which initiated the loan; and 11 (3) the projected cost to the taxpayers of the 12 loan. 13 (c) CONFIDENTIALITY.—The information submitted 14 to the Congress under this section may be kept confiden15 tial, upon the written request of the Chairman of the 16 Board, in which case it shall made available only to the 17 Chairpersons and Ranking Members of the Committees 18 described in subsection (a). 19 (d) APPLICABILITY.—The provisions of this section 20 shall be in force for all uses of the authority provided 21 under section 13 of the Federal Reserve Act occurring 22 during the period beginning on March 1, 2008 and ending 23 on the after the date of enactment of this Act, and reports 24 described in subsection (a) shall be required beginning not 86 O:\AYO\AYO08C04.xml 1 later than 30 days after that date of enactment, with re2 spect to any such exercise of authority. 3 (e) SHARING OF INFORMATION.—Any reports re4 quired under this section shall also be submitted to the 5 Congressional Oversight Panel established under section 6 125. 7 SEC. 130. TECHNICAL CORRECTIONS. 8 (a) IN GENERAL.—Section 128(b)(2) of the Truth in 9 Lending Act (15 U.S.C. 1638(b)(2)), as amended by sec10 tion 2502 of the Mortgage Disclosure Improvement Act 11 of 2008 (Public Law 110-289), is amended— 12 (1) in subparagraph (A), by striking ‘‘In the 13 case’’ and inserting ‘‘Except as provided in subpara14 graph (G), in the case’’; and 15 (2) by amending subparagraph (G) to read as 16 follows: 17 ‘‘(G)(i) In the case of an extension of cred18 it relating to a plan described in section 19 101(53D) of title 11, United States Code— 20 ‘‘(I) the requirements of subpara21 graphs (A) through (E) shall not apply; 22 and 23 ‘‘(II) a good faith estimate of the dis24 closures required under subsection (a) shall 25 be made in accordance with regulations of 87 O:\AYO\AYO08C04.xml 1 the Board under section 121(c) before 2 such credit is extended, or shall be deliv3 ered or placed in the mail not later than 4 3 business days after the date on which 5 the creditor receives the written application 6 of the consumer for such credit, whichever 7 is earlier. 8 ‘‘(ii) If a disclosure statement furnished 9 within 3 business days of the written applica10 tion (as provided under clause (i)(II)) contains 11 an annual percentage rate which is subse12 quently rendered inaccurate, within the mean13 ing of section 107(c), the creditor shall furnish 14 another disclosure statement at the time of set15 tlement or consummation of the transaction.’’. 16 (b) EFFECTIVE DATE.—The amendments made by 17 subsection (a) shall take effect as if included in the 18 amendments made by section 2502 of the Mortgage Dis19 closure Improvement Act of 2008 (Public Law 110-289). 20 SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSE21 MENT. 22 (a) REIMBURSEMENT.—The Secretary shall reim23 burse the Exchange Stabilization Fund established under 24 section 5302 of title 31, United States Code, for any funds 25 used for the temporary guaranty program for the United 88 O:\AYO\AYO08C04.xml 1 States money market mutual fund industry, from funds 2 under this Act. 3 (b) LIMITS ON USE OF EXCHANGE STABILIZATION 4 FUND.—The Secretary is prohibited from using the Ex5 change Stabilization Fund for the establishment of any 6 future guaranty programs for the United States money 7 market mutual fund industry. 8 SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET AC9 COUNTING. 10 (a) AUTHORITY.—The Securities and Exchange Com11 mission shall have the authority under the securities laws 12 (as such term is defined in section 3(a)(47) of the Securi13 ties Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to sus14 pend, by rule, regulation, or order, the application of 15 Statement Number 157 of the Financial Accounting 16 Standards Board for any issuer (as such term is defined 17 in section 3(a)(8) of such Act) or with respect to any class 18 or category of transaction if the Commission determines 19 that is necessary or appropriate in the public interest and 20 is consistent with the protection of investors. 21 (b) SAVINGS PROVISION.—Nothing in subsection (a) 22 shall be construed to restrict or limit any authority of the 23 Securities and Exchange Commission under securities 24 laws as in effect on the date of enactment of this Act. 89 O:\AYO\AYO08C04.xml 1 SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING. 2 (a) STUDY.—The Securities and Exchange Commis3 sion, in consultation with the Board and the Secretary, 4 shall conduct a study on mark-to-market accounting 5 standards as provided in Statement Number 157 of the 6 Financial Accounting Standards Board, as such standards 7 are applicable to financial institutions, including deposi8 tory institutions. Such a study shall consider at a min9 imum— 10 (1) the effects of such accounting standards on 11 a financial institution’s balance sheet; 12 (2) the impacts of such accounting on bank fail13 ures in 2008; 14 (3) the impact of such standards on the quality 15 of financial information available to investors; 16 (4) the process used by the Financial Account17 ing Standards Board in developing accounting 18 standards; 19 (5) the advisability and feasibility of modifica20 tions to such standards; and 21 (6) alternative accounting standards to those 22 provided in such Statement Number 157. 23 (b) REPORT.—The Securities and Exchange Commis24 sion shall submit to Congress a report of such study before 25 the end of the 90-day period beginning on the date of the 26 enactment of this Act containing the findings and deter90 O:\AYO\AYO08C04.xml 1 minations of the Commission, including such administra2 tive and legislative recommendations as the Commission 3 determines appropriate. 4 SEC. 134. RECOUPMENT. 5 Upon the expiration of the 5-year period beginning 6 upon the date of the enactment of this Act, the Director 7 of the Office of Management and Budget, in consultation 8 with the Director of the Congressional Budget Office, shall 9 submit a report to the Congress on the net amount within 10 the Troubled Asset Relief Program under this Act. In any 11 case where there is a shortfall, the President shall submit 12 a legislative proposal that recoups from the financial in13 dustry an amount equal to the shortfall in order to ensure 14 that the Troubled Asset Relief Program does not add to 15 the deficit or national debt. 16 SEC. 135. PRESERVATION OF AUTHORITY. 17 With the exception of section 131, nothing in this Act 18 may be construed to limit the authority of the Secretary 19 or the Board under any other provision of law. 20 TITLE II—BUDGET-RELATED 21 PROVISIONS 22 SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT 23 AGENCIES. 24 Upon request, and to the extent otherwise consistent 25 with law, all information used by the Secretary in connec91 O:\AYO\AYO08C04.xml 1 tion with activities authorized under this Act (including 2 the records to which the Comptroller General is entitled 3 under this Act) shall be made available to congressional 4 support agencies (in accordance with their obligations to 5 support the Congress as set out in their authorizing stat6 utes) for the purposes of assisting the committees of Con7 gress with conducting oversight, monitoring, and analysis 8 of the activities authorized under this Act. 9 SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND 10 BUDGET AND THE CONGRESSIONAL BUDGET 11 OFFICE. 12 (a) REPORTS BY THE OFFICE OF MANAGEMENT AND 13 BUDGET.—Within 60 days of the first exercise of the au14 thority granted in section 101(a), but in no case later than 15 December 31, 2008, and semiannually thereafter, the Of16 fice of Management and Budget shall report to the Presi17 dent and the Congress— 18 (1) the estimate, notwithstanding section 19 502(5)(F) of the Federal Credit Reform Act of 1990 20 (2 U.S.C. 661a(5)(F)), as of the first business day 21 that is at least 30 days prior to the issuance of the 22 report, of the cost of the troubled assets, and guar23 antees of the troubled assets, determined in accord24 ance with section 123; 92 O:\AYO\AYO08C04.xml 1 (2) the information used to derive the estimate, 2 including assets purchased or guaranteed, prices 3 paid, revenues received, the impact on the deficit 4 and debt, and a description of any outstanding com5 mitments to purchase troubled assets; and 6 (3) a detailed analysis of how the estimate has 7 changed from the previous report. 8 Beginning with the second report under subsection (a), the 9 Office of Management and Budget shall explain the dif10 ferences between the Congressional Budget Office esti11 mates delivered in accordance with subsection (b) and 12 prior Office of Management and Budget estimates. 13 (b) REPORTS BY THE CONGRESSIONAL BUDGET OF14 FICE.—Within 45 days of receipt by the Congress of each 15 report from the Office of Management and Budget under 16 subsection (a), the Congressional Budget Office shall re17 port to the Congress the Congressional Budget Office’s 18 assessment of the report submitted by the Office of Man19 agement and Budget, including— 20 (1) the cost of the troubled assets and guaran21 tees of the troubled assets, 22 (2) the information and valuation methods used 23 to calculate such cost, and 24 (3) the impact on the deficit and the debt. 93 O:\AYO\AYO08C04.xml 1 (c) FINANCIAL EXPERTISE.—In carrying out the du2 ties in this subsection or performing analyses of activities 3 under this Act, the Director of the Congressional Budget 4 Office may employ personnel and procure the services of 5 experts and consultants. 6 (d) AUTHORIZATION OF APPROPRIATIONS.—There 7 are authorized to be appropriated such sums as may be 8 necessary to produce reports required by this section. 9 SEC. 203. ANALYSIS IN PRESIDENT’S BUDGET. 10 (a) IN GENERAL.—Section 1105(a) of title 31, 11 United States Code, is amended by adding at the end the 12 following new paragraph: 13 ‘‘(35) as supplementary materials, a separate 14 analysis of the budgetary effects for all prior fiscal 15 years, the current fiscal year, the fiscal year for 16 which the budget is submitted, and ensuing fiscal 17 years of the actions the Secretary of the Treasury 18 has taken or plans to take using any authority pro19 vided in the Emergency Economic Stabilization Act 20 of 2008, including— 21 ‘‘(A) an estimate of the current value of all 22 assets purchased, sold, and guaranteed under 23 the authority provided in the Emergency Eco24 nomic Stabilization Act of 2008 using method25 ology required by the Federal Credit Reform 94 O:\AYO\AYO08C04.xml 1 Act of 1990 (2 U.S.C. 661 et seq.) and section 2 123 of the Emergency Economic Stabilization 3 Act of 2008; 4 ‘‘(B) an estimate of the deficit, the debt 5 held by the public, and the gross Federal debt 6 using methodology required by the Federal 7 Credit Reform Act of 1990 and section 123 of 8 the Emergency Economic Stabilization Act of 9 2008; 10 ‘‘(C) an estimate of the current value of all 11 assets purchased, sold, and guaranteed under 12 the authority provided in the Emergency Eco13 nomic Stabilization Act of 2008 calculated on a 14 cash basis; 15 ‘‘(D) a revised estimate of the deficit, the 16 debt held by the public, and the gross Federal 17 debt, substituting the cash-based estimates in 18 subparagraph (C) for the estimates calculated 19 under subparagraph (A) pursuant to the Fed20 eral Credit Reform Act of 1990 and section 123 21 of the Emergency Economic Stabilization Act of 22 2008; and 23 ‘‘(E) the portion of the deficit which can 24 be attributed to any action taken by the Sec25 retary using authority provided by the Emer95 O:\AYO\AYO08C04.xml 1 gency Economic Stabilization Act of 2008 and 2 the extent to which the change in the deficit 3 since the most recent estimate is due to a re4 estimate using the methodology required by the 5 Federal Credit Reform Act of 1990 and section 6 123 of the Emergency Economic Stabilization 7 Act of 2008.’’ 8 (b) CONSULTATION.—In implementing this section, 9 the Director of Office of Management and Budget shall 10 consult periodically, but at least annually, with the Com11 mittee on the Budget of the House of Representatives, the 12 Committee on the Budget of the Senate, and the Director 13 of the Congressional Budget Office. 14 (c) EFFECTIVE DATE.—This section and the amend15 ment made by this section shall apply beginning with re16 spect to the fiscal year 2010 budget submission of the 17 President. 18 SEC. 204. EMERGENCY TREATMENT. 19 All provisions of this Act are designated as an emer20 gency requirement and necessary to meet emergency needs 21 pursuant to section 204(a) of S. Con. Res 21 (110th Con22 gress), the concurrent resolution on the budget for fiscal 23 year 2008 and rescissions of any amounts provided in this 24 Act shall not be counted for purposes of budget enforce25 ment. 96 O:\AYO\AYO08C04.xml 1 TITLE III—TAX PROVISIONS 2 SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF 3 CERTAIN PREFERRED STOCK. 4 (a) IN GENERAL.—For purposes of the Internal Rev5 enue Code of 1986, gain or loss from the sale or exchange 6 of any applicable preferred stock by any applicable finan7 cial institution shall be treated as ordinary income or loss. 8 (b) APPLICABLE PREFERRED STOCK.—For purposes 9 of this section, the term ‘‘applicable preferred stock’’ 10 means any stock— 11 (1) which is preferred stock in— 12 (A) the Federal National Mortgage Asso13 ciation, established pursuant to the Federal Na14 tional Mortgage Association Charter Act (12 15 U.S.C. 1716 et seq.), or 16 (B) the Federal Home Loan Mortgage 17 Corporation, established pursuant to the Fed18 eral Home Loan Mortgage Corporation Act (12 19 U.S.C. 1451 et seq.), and 20 (2) which— 21 (A) was held by the applicable financial in22 stitution on September 6, 2008, or 23 (B) was sold or exchanged by the applica24 ble financial institution on or after January 1, 25 2008, and before September 7, 2008. 97 O:\AYO\AYO08C04.xml 1 (c) APPLICABLE FINANCIAL INSTITUTION.—For pur2 poses of this section: 3 (1) IN GENERAL.—Except as provided in para4 graph (2), the term ‘‘applicable financial institution’’ 5 means— 6 (A) a financial institution referred to in 7 section 582(c)(2) of the Internal Revenue Code 8 of 1986, or 9 (B) a depository institution holding com10 pany (as defined in section 3(w)(1) of the Fed11 eral Deposit Insurance Act (12 U.S.C. 12 1813(w)(1))). 13 (2) SPECIAL RULES FOR CERTAIN SALES.—In 14 the case of— 15 (A) a sale or exchange described in sub16 section (b)(2)(B), an entity shall be treated as 17 an applicable financial institution only if it was 18 an entity described in subparagraph (A) or (B) 19 of paragraph (1) at the time of the sale or ex20 change, and 21 (B) a sale or exchange after September 6, 22 2008, of preferred stock described in subsection 23 (b)(2)(A), an entity shall be treated as an appli24 cable financial institution only if it was an enti25 ty described in subparagraph (A) or (B) of 98 O:\AYO\AYO08C04.xml 1 paragraph (1) at all times during the period be2 ginning on September 6, 2008, and ending on 3 the date of the sale or exchange of the pre4 ferred stock. 5 (d) SPECIAL RULE FOR CERTAIN PROPERTY NOT 6 HELD ON SEPTEMBER 6, 2008.—The Secretary of the 7 Treasury or the Secretary’s delegate may extend the appli8 cation of this section to all or a portion of the gain or 9 loss from a sale or exchange in any case where— 10 (1) an applicable financial institution sells or 11 exchanges applicable preferred stock after Sep12 tember 6, 2008, which the applicable financial insti13 tution did not hold on such date, but the basis of 14 which in the hands of the applicable financial insti15 tution at the time of the sale or exchange is the 16 same as the basis in the hands of the person which 17 held such stock on such date, or 18 (2) the applicable financial institution is a part19 ner in a partnership which— 20 (A) held such stock on September 6, 2008, 21 and later sold or exchanged such stock, or 22 (B) sold or exchanged such stock during 23 the period described in subsection (b)(2)(B). 24 (e) REGULATORY AUTHORITY.—The Secretary of the 25 Treasury or the Secretary’s delegate may prescribe such 99 O:\AYO\AYO08C04.xml 1 guidance, rules, or regulations as are necessary to carry 2 out the purposes of this section. 3 (f) EFFECTIVE DATE.—This section shall apply to 4 sales or exchanges occurring after December 31, 2007, in 5 taxable years ending after such date. 6 SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECU7 TIVE COMPENSATION OF EMPLOYERS PAR8 TICIPATING IN THE TROUBLED ASSETS RE9 LIEF PROGRAM. 10 (a) DENIAL OF DEDUCTION.—Subsection (m) of sec11 tion 162 of the Internal Revenue Code of 1986 is amended 12 by adding at the end the following new paragraph: 13 ‘‘(5) SPECIAL RULE FOR APPLICATION TO EM14 PLOYERS PARTICIPATING IN THE TROUBLED ASSETS 15 RELIEF PROGRAM.— 16 ‘‘(A) IN GENERAL.—In the case of an ap17 plicable employer, no deduction shall be allowed 18 under this chapter— 19 ‘‘(i) in the case of executive remunera20 tion for any applicable taxable year which 21 is attributable to services performed by a 22 covered executive during such applicable 23 taxable year, to the extent that the amount 24 of such remuneration exceeds $500,000, or 100 O:\AYO\AYO08C04.xml 1 ‘‘(ii) in the case of deferred deduction 2 executive remuneration for any taxable 3 year for services performed during any ap4 plicable taxable year by a covered execu5 tive, to the extent that the amount of such 6 remuneration exceeds $500,000 reduced 7 (but not below zero) by the sum of— 8 ‘‘(I) the executive remuneration 9 for such applicable taxable year, plus 10 ‘‘(II) the portion of the deferred 11 deduction executive remuneration for 12 such services which was taken into ac13 count under this clause in a preceding 14 taxable year. 15 ‘‘(B) APPLICABLE EMPLOYER.—For pur16 poses of this paragraph— 17 ‘‘(i) IN GENERAL.—Except as pro18 vided in clause (ii), the term ‘applicable 19 employer’ means any employer from whom 20 1 or more troubled assets are acquired 21 under a program established by the Sec22 retary under section 101(a) of the Emer23 gency Economic Stabilization Act of 2008 24 if the aggregate amount of the assets so 101 O:\AYO\AYO08C04.xml 1 acquired for all taxable years exceeds 2 $300,000,000. 3 ‘‘(ii) DISREGARD OF CERTAIN ASSETS 4 SOLD THROUGH DIRECT PURCHASE.—If 5 the only sales of troubled assets by an em6 ployer under the program described in 7 clause (i) are through 1 or more direct 8 purchases (within the meaning of section 9 113(c) of the Emergency Economic Sta10 bilization Act of 2008), such assets shall 11 not be taken into account under clause (i) 12 in determining whether the employer is an 13 applicable employer for purposes of this 14 paragraph. 15 ‘‘(iii) AGGREGATION RULES.—Two or 16 more persons who are treated as a single 17 employer under subsection (b) or (c) of 18 section 414 shall be treated as a single em19 ployer, except that in applying section 20 1563(a) for purposes of either such sub21 section, paragraphs (2) and (3) thereof 22 shall be disregarded. 23 ‘‘(C) APPLICABLE TAXABLE YEAR.—For 24 purposes of this paragraph, the term ‘applicable 102 O:\AYO\AYO08C04.xml 1 taxable year’ means, with respect to any em2 ployer— 3 ‘‘(i) the first taxable year of the em4 ployer— 5 ‘‘(I) which includes any portion 6 of the period during which the au7 thorities under section 101(a) of the 8 Emergency Economic Stabilization 9 Act of 2008 are in effect (determined 10 under section 120 thereof), and 11 ‘‘(II) in which the aggregate 12 amount of troubled assets acquired 13 from the employer during the taxable 14 year pursuant to such authorities 15 (other than assets to which subpara16 graph (B)(ii) applies), when added to 17 the aggregate amount so acquired for 18 all preceding taxable years, exceeds 19 $300,000,000, and 20 ‘‘(ii) any subsequent taxable year 21 which includes any portion of such period. 22 ‘‘(D) COVERED EXECUTIVE.—For pur23 poses of this paragraph— 103 O:\AYO\AYO08C04.xml 1 ‘‘(i) IN GENERAL.—The term ‘covered 2 executive’ means, with respect to any ap3 plicable taxable year, any employee— 4 ‘‘(I) who, at any time during the 5 portion of the taxable year during 6 which the authorities under section 7 101(a) of the Emergency Economic 8 Stabilization Act of 2008 are in effect 9 (determined under section 120 there10 of), is the chief executive officer of the 11 applicable employer or the chief finan12 cial officer of the applicable employer, 13 or an individual acting in either such 14 capacity, or 15 ‘‘(II) who is described in clause 16 (ii). 17 ‘‘(ii) HIGHEST COMPENSATED EM18 PLOYEES.—An employee is described in 19 this clause if the employee is 1 of the 3 20 highest compensated officers of the appli21 cable employer for the taxable year (other 22 than an individual described in clause 23 (i)(I)), determined— 24 ‘‘(I) on the basis of the share25 holder disclosure rules for compensa104 O:\AYO\AYO08C04.xml 1 tion under the Securities Exchange 2 Act of 1934 (without regard to wheth3 er those rules apply to the employer), 4 and 5 ‘‘(II) by only taking into account 6 employees employed during the por7 tion of the taxable year described in 8 clause (i)(I). 9 ‘‘(iii) EMPLOYEE REMAINS COVERED 10 EXECUTIVE.—If an employee is a covered 11 executive with respect to an applicable em12 ployer for any applicable taxable year, such 13 employee shall be treated as a covered ex14 ecutive with respect to such employer for 15 all subsequent applicable taxable years and 16 for all subsequent taxable years in which 17 deferred deduction executive remuneration 18 with respect to services performed in all 19 such applicable taxable years would (but 20 for this paragraph) be deductible. 21 ‘‘(E) EXECUTIVE REMUNERATION.—For 22 purposes of this paragraph, the term ‘executive 23 remuneration’ means the applicable employee 24 remuneration of the covered executive, as deter25 mined under paragraph (4) without regard to 105 O:\AYO\AYO08C04.xml 1 subparagraphs (B), (C), and (D) thereof. Such 2 term shall not include any deferred deduction 3 executive remuneration with respect to services 4 performed in a prior applicable taxable year. 5 ‘‘(F) DEFERRED DEDUCTION EXECUTIVE 6 REMUNERATION.—For purposes of this para7 graph, the term ‘deferred deduction executive 8 remuneration’ means remuneration which would 9 be executive remuneration for services per10 formed in an applicable taxable year but for the 11 fact that the deduction under this chapter (de12 termined without regard to this paragraph) for 13 such remuneration is allowable in a subsequent 14 taxable year. 15 ‘‘(G) COORDINATION.—Rules similar to 16 the rules of subparagraphs (F) and (G) of para17 graph (4) shall apply for purposes of this para18 graph. 19 ‘‘(H) REGULATORY AUTHORITY.—The Sec20 retary may prescribe such guidance, rules, or 21 regulations as are necessary to carry out the 22 purposes of this paragraph and the Emergency 23 Economic Stabilization Act of 2008, including 24 the extent to which this paragraph applies in 106 O:\AYO\AYO08C04.xml 1 the case of any acquisition, merger, or reorga2 nization of an applicable employer.’’. 3 (b) GOLDEN PARACHUTE RULE.—Section 280G of 4 the Internal Revenue Code of 1986 is amended— 5 (1) by redesignating subsection (e) as sub6 section (f), and 7 (2) by inserting after subsection (d) the fol8 lowing new subsection: 9 ‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOY10 ERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF 11 PROGRAM.— 12 ‘‘(1) IN GENERAL.—In the case of the sever13 ance from employment of a covered executive of an 14 applicable employer during the period during which 15 the authorities under section 101(a) of the Emer16 gency Economic Stabilization Act of 2008 are in ef17 fect (determined under section 120 of such Act), this 18 section shall be applied to payments to such execu19 tive with the following modifications: 20 ‘‘(A) Any reference to a disqualified indi21 vidual (other than in subsection (c)) shall be 22 treated as a reference to a covered executive. 23 ‘‘(B) Any reference to a change described 24 in subsection (b)(2)(A)(i) shall be treated as a 25 reference to an applicable severance from em107 O:\AYO\AYO08C04.xml 1 ployment of a covered executive, and any ref2 erence to a payment contingent on such a 3 change shall be treated as a reference to any 4 payment made during an applicable taxable 5 year of the employer on account of such appli6 cable severance from employment. 7 ‘‘(C) Any reference to a corporation shall 8 be treated as a reference to an applicable em9 ployer. 10 ‘‘(D) The provisions of subsections 11 (b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not 12 apply. 13 ‘‘(2) DEFINITIONS AND SPECIAL RULES.—For 14 purposes of this subsection: 15 ‘‘(A) DEFINITIONS.—Any term used in 16 this subsection which is also used in section 17 162(m)(5) shall have the meaning given such 18 term by such section. 19 ‘‘(B) APPLICABLE SEVERANCE FROM EM20 PLOYMENT.—The term ‘applicable severance 21 from employment’ means any severance from 22 employment of a covered executive— 23 ‘‘(i) by reason of an involuntary ter24 mination of the executive by the employer, 25 or 108 O:\AYO\AYO08C04.xml 1 ‘‘(ii) in connection with any bank2 ruptcy, liquidation, or receivership of the 3 employer. 4 ‘‘(C) COORDINATION AND OTHER 5 RULES.— 6 ‘‘(i) IN GENERAL.—If a payment 7 which is treated as a parachute payment 8 by reason of this subsection is also a para9 chute payment determined without regard 10 to this subsection, this subsection shall not 11 apply to such payment. 12 ‘‘(ii) REGULATORY AUTHORITY.—The 13 Secretary may prescribe such guidance, 14 rules, or regulations as are necessary— 15 ‘‘(I) to carry out the purposes of 16 this subsection and the Emergency 17 Economic Stabilization Act of 2008, 18 including the extent to which this sub19 section applies in the case of any ac20 quisition, merger, or reorganization of 21 an applicable employer, 22 ‘‘(II) to apply this section and 23 section 4999 in cases where one or 24 more payments with respect to any in25 dividual are treated as parachute pay109 O:\AYO\AYO08C04.xml 1 ments by reason of this subsection, 2 and other payments with respect to 3 such individual are treated as para4 chute payments under this section 5 without regard to this subsection, and 6 ‘‘(III) to prevent the avoidance of 7 the application of this section through 8 the mischaracterization of a severance 9 from employment as other than an 10 applicable severance from employ11 ment.’’. 12 (c) EFFECTIVE DATES.— 13 (1) IN GENERAL.—The amendment made by 14 subsection (a) shall apply to taxable years ending on 15 or after the date of the enactment of this Act. 16 (2) GOLDEN PARACHUTE RULE.—The amend17 ments made by subsection (b) shall apply to pay18 ments with respect to severances occurring during 19 the period during which the authorities under sec20 tion 101(a) of this Act are in effect (determined 21 under section 120 of this Act). 110 O:\AYO\AYO08C04.xml 1 SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM 2 DISCHARGE OF QUALIFIED PRINCIPAL RESI3 DENCE INDEBTEDNESS. 4 (a) EXTENSION.—Subparagraph (E) of section 5 108(a)(1) of the Internal Revenue Code of 1986 is amend6 ed by striking ‘‘January 1, 2010’’ and inserting ‘‘January 7 1, 2013’’. 8 (b) EFFECTIVE DATE.—The amendment made by 9 this subsection shall apply to discharges of indebtedness 10 occurring on or after January 1, 2010.
Comments(0)