Text Of The Wall Street Bailout Bill

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 Trou-

6       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 sec-

12       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 instru-

17           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 pur-

20           chase  of which  the Secretary determines  pro-

21           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 Re-

25           serve System, determines  the purchase  of which

6

1              is necessary to promote financial market  sta-

2              bility, but only upon transmittal of such deter-

3              mination, in writing, to the appropriate commit-

4              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 com-

12      mitments  to purchase, troubled assets from any fi-

13      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 devel-

16      oped and published by the Secretary.

17              (2) COMMENCEMENT     OF PROGRAM.--Establish-

18      ment  of the policies and  procedures and other simi-

19      lar administrative requirements imposed on the Sec-

20      retary by this Act are not intended to delay the com-

21      mencement  of the TARP.

22              (3) ESTABLISHMENT   OF TREASURY  OFFICE.--

23                     (A) IN GENERAL.--The   Secretary shall im-

24              plement       any      program        under      paragraph

(1)

25              through an Office of Financial Stability, estab-

7

1               lished for such purpose within the Office of Do-

2               mestic Finance  of the Department  of the Treas-

3               ury, which  office shall be headed  by an Assist-

4               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  insert-

14                    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 Direc-

22  tor of the Office of Thrift Supervision, and  the Secretary

23  of Housing  and  Urban Development.

24         (c) NECESSARY    ACTIONS.--The    Secretary is author-

25  ized to take such actions as the Secretary deems  necessary

8

1  to carry out the authorities in this Act, including, without

2  limitation, the following:

3             (1)  The  Secretary shall have direct hiring au-

4       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 finan-

10       cial agents of the Federal Government,   and such in-

11       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  de-

16       signed to  minimize  cost  to the  taxpayers, estab-

17       lishing vehicles that are authorized, subject to super-

18       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

1  authority under this section or the end  of the 45-day  pe-

2  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 un-

14  just enrichment  of financial institutions participating in

15  a program  established under this section, including by pre-

16  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 as-

20  sets from a financial institution in conservatorship or re-

21  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

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    pro-

7       gram  under this subsection, the Secretary may  de-

8       velop guarantees of troubled assets and  the associ-

9       ated premiums  for such guarantees. Such  guaran-

10       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 per-

16       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 estab-

23  lished under subsection (a).

24       (c) PREMIUMS.--

11

1           (1)  IN       GENERAL.--The      Secretary shall collect

2       premiums         from   any   financial  institution     partici-

3       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 pursu-

7       ant to paragraph  (3).

8           (2) AUTHORITY    TO  BASE  PREMIUMS   ON  PROD-

9       UCT   RISK.--In         establishing   any   premium        under

10       paragraph  (1), the Secretary may  provide  for vari-

11       ations in such  rates according to the credit risk as-

12       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 participa-

17       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

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 be-

4      tween the total of the outstanding guaranteed obli-

5      gations and the balance in the Troubled Assets In-

6      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  estab-

11      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 Treas-

17      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

1           (1)     protecting        the    interests   of   taxpayers

by

2       maximizing  overall returns and  minimizing  the im-

3       pact on the national debt;

4           (2)  providing stability and  preventing  disrup-

5       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 di-

11       rect purchase  from  an individual financial institu-

12       tion, the long-term  viability of the financial institu-

13       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 dis-

17       crimination based on  size, geography, form  of orga-

18       nization, or the size, type, and number   of assets eli-

19       gible for purchase under this Act;

20           (6)  providing financial assistance to  financial

21       institutions, including those serving low- and  mod-

22       erate-income       populations         and     other   underserved

23       communities,        and       that     have     assets    less

than

24       $1,000,000,000,  that were  well or adequately  cap-

25       italized as of June  30, 2008,  and  that as a result

14

1       of the devaluation of the preferred government-spon-

2       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 Ameri-

11       cans by purchasing  troubled assets held by or on be-

12       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 au-

15       thority shall not extend  to  any compensation   ar-

16       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 Fi-

23  nancial Stability Oversight Board,  which shall be respon-

24  sible for--

15

1            (1) reviewing  the exercise of authority under  a

2       program  developed  in accordance  with  this Act, in-

3       cluding--

4                   (A)  policies implemented  by  the Secretary

5            and  the  Office of  Financial Stability created

6            under  sections 101  and 102,  including the ap-

7            pointment   of financial agents,  the designation

8            of asset classes to be purchased, and  plans for

9            the structure of vehicles used  to purchase trou-

10            bled assets; and

11                   (B)  the effect of such  actions in assisting

12            American   families in preserving  home  owner-

13            ship,    stabilizing   financial       markets,   and   pro-

14            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, misrepresen-

19       tation, or malfeasance  to the Special Inspector Gen-

20       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 Over-

24  sight Board  shall be comprised of--

16

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  Devel-

9        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 Sec-

13  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 en-

21  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

1            (3) consistent with protecting taxpayers, in ac-

2       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 appro-

9  priate.

10       (g)  REPORTS.--The           Financial         Stability   Oversight

11  Board  shall report to the appropriate committees  of Con-

12  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 Over-

16  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 ac-

20       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

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 ex-

5  ercise of the authority granted  in section 102, whichever

6  occurs first, and every 30-day  period thereafter, the Sec-

7  retary shall report to the appropriate committees  of Con-

8  gress, with respect to each such period--

9            (1)  an overview  of actions taken  by  the Sec-

10       retary, including the considerations required by sec-

11       tion 103  and the efforts under section 109;

12            (2) the actual obligation and  expenditure of the

13       funds provided  for administrative expenses  by sec-

14       tion 118  during such  period and  the  expected ex-

15       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, includ-

19       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

1                 (F)   operating      expenses,     including      com-

2            pensation  for financial agents;

3                 (G)  the valuation or pricing method   used

4            for each transaction; and

5                 (H)  a  description of  the vehicles estab-

6            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, includ-

11       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 trans-

18            actions;

19                 (D) a description of the impact  of the exer-

20            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  bench-

25            marks  yet to be achieved; and

20

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 sub-

5       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  in-

10       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 over-

18  the-counter swaps  market  and government-sponsored   en-

19  terprises, and  providing  recommendations   for  improve-

20  ment, including--

21           (1) recommendations   regarding--

22                   (A) whether  any  participants in the finan-

23           cial markets  that are  currently outside the reg-

24           ulatory  system  should  become  subject  to the

25           regulatory system; and

21

1                       (B) enhancement  of the clearing and set-

2               tlement of over-the-counter swaps; and

3               (2) the rationale underlying such recommenda-

4      tions.

5      (d)      SHARING         OF   INFORMATION.--Any

report      re-

6  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 ac-

12      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   AS-

18                     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   Sec-

23  retary shall have authority to manage  troubled assets pur-

24  chased under this Act, including revenues and portfolio

25  risks therefrom.

22

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 secu-

4  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 war-

10  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

AS-

14  SETS.--The   authority of the Secretary to hold any trou-

15  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 be-

18  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

1  such determination, and the justification for such deter-

2  mination, shall be submitted to the Committees  on Over-

3  sight and  Government Reform  and Financial Services of

4  the House  of Representatives and the  Committees on

5  Homeland  Security and  Governmental Affairs and Bank-

6  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, pur-

10  suant to subsection (a), waived any provision of the Fed-

11  eral Acquisition Regulation pertaining to minority con-

12  tracting, the Secretary shall develop and implement stand-

13  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 minority-

18  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 consult-

23  ants.

24       (c) ELIGIBILITY               OF FDIC.--Notwithstanding    sub-

25  sections (a) and (b), the Corporation--

24

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  se-

4       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

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 au-

8  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 Home-

11  owners  Program  under section 257  of the National Hous-

12  ing Act  or other  available programs  to minimize  fore-

13  closures. In addition, the Secretary may  use loan guaran-

14  tees and credit enhancements  to facilitate loan modifica-

15  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 securi-

19  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 Hous-

22  ing and  Urban  Development,  and other Federal Govern-

23  ment  entities that hold troubled assets to attempt to iden-

24  tify opportunities for the acquisition of classes of troubled

25  assets that will improve  the ability of the Secretary to im-

26  prove the loan modification and restructuring process and,

26

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 residen-

4  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 main-

8  tain decent and safe conditions at the property.

9      (c) CONSENT  TO REASONABLE   LOAN  MODIFICATION

10  REQUESTS.--Upon    any request arising under existing in-

11  vestment contracts, the Secretary shall consent, where ap-

12  propriate, and considering net present value to the tax-

13  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

1                 (B)  the Corporation, with  respect to resi-

2            dential mortgage  loans and mortgage-backed  se-

3            curities held by  any bridge  depository institu-

4            tion pursuant  to  section 11(n)  of the Federal

5            Deposit  Insurance Act; and

6                 (C)  the Board,  with respect to any  mort-

7            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  con-

11            trolled in connection  with  open  market  oper-

12            ations under  section 14 of the Federal Reserve

13            Act  (12 U.S.C. 353), or as collateral for an ad-

14            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

1            (1) IN GENERAL.--To    the extent that the Fed-

2      eral property manager holds, owns, or controls mort-

3      gages, mortgage backed securities, and  other assets

4      secured by  residential real estate, including multi-

5      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 con-

9      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 residen-

14      tial mortgage  loan, modifications made  under para-

15      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, modifica-

21      tions made  under paragraph (1) shall ensure--

22                  (A) the continuation of any existing Fed-

23            eral, State, and local rental subsidies and pro-

24            tections; and

29

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 num-

12      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 re-

16      quired by this subsection, the Federal property man-

17      agers shall consult with one another and, to the ex-

18      tent possible, utilize consistent approaches to imple-

19      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

1              (1)    encourage          implementation            by   the

loan

2       servicers of loan modifications developed under  sub-

3       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 appli-

9  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 Inter-

16  nal Revenue  Code of 1986, as provided under the amend-

17  ment  by section 302, as applicable.

18       (b) DIRECT  PURCHASES.--

19              (1) IN  GENERAL.--Where     the Secretary deter-

20       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 Sec-

24       retary receives a meaningful  equity or debt position

25       in the financial institution as a result of the trans-

31

1       action, the Secretary shall require that the financial

2       institution meet appropriate  standards for executive

3       compensation  and corporate  governance. The  stand-

4       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 in-

7       stitution.

8           (2)  CRITERIA.--The    standards  required under

9       this subsection shall include--

10                  (A) limits on compensation  that exclude in-

11           centives for executive officers of a financial in-

12           stitution     to take   unnecessary       and   excessive

13           risks that threaten the value of the financial in-

14           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 fi-

18           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 institu-

24           tion making   any golden  parachute  payment  to

25           its senior  executive officer during the  period

32

1             that the Secretary holds an  equity or debt posi-

2             tion in the financial institution.

3             (3) DEFINITION.--For     purposes of this section,

4        the term  ''senior executive officer'' means  an  indi-

5        vidual who  is one of the top 5 executives of a public

6        company,  whose  compensated  is required to be dis-

7        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 de-

11  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 ag-

14  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 offi-

17  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 effec-

22  tive upon  issuance.

23        (d) SUNSET.--The    provisions of subsection (c) shall

24  apply only to arrangements  entered into during the period

33

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 to-

7  ward the establishment of similar programs  by such au-

8  thorities and  central banks. To  the extent that such for-

9  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 trou-

12  bled assets qualify for purchase under section 101.

13  SEC. 113. MINIMIZATION  OF LONG-TERM   COSTS AND  MAXI-

14                   MIZATION OF BENEFITS  FOR TAXPAYERS.

15      (a) LONG-TERM  COSTS  AND BENEFITS.--

16               (1) MINIMIZING  NEGATIVE  IMPACT.--The   Sec-

17      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 as-

21      sets purchased, and the overall economic benefits of

22      the program, including economic benefits due to im-

23      provements  in economic activity and the availability

24      of credit, the impact on the savings and pensions of

34

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 re-

6            sale for and  until such  time as the  Secretary

7            determines  that the market  is optimal for sell-

8            ing such  assets, in order to maximize  the value

9            for taxpayers; and

10                    (B) sell such assets at a price that the Sec-

11            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 par-

16       ticipate in purchases  of troubled assets, and to in-

17       vest in financial institutions, consistent with the pro-

18       visions of this section.

19       (b) USE  OF  MARKET   MECHANISMS.--In     making  pur-

20  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 tax-

25       payer resources  by  using market   mechanisms,  in-

35

1       cluding auctions or reverse auctions, where  appro-

2       priate.

3       (c) DIRECT   PURCHASES.--If    the  Secretary deter-

4  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 indi-

7  vidual financial institution, the Secretary shall pursue ad-

8  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 pur-

13       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 pur-

21             suant  to section 15A  of the Securities Exchange

22             Act  of 1934 (15  U.S.C. 78o-3), a warrant giv-

23             ing  the right to the Secretary to receive non-

24             voting common   stock or preferred stock in such

36

1           financial    institution,       as    the    Secretary

deter-

2           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 in-

6           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 fol-

10      lowing requirements:

11               (A)  PURPOSES.--Such    terms and  condi-

12           tions shall, at a minimum, be designed--

13                       (i) to provide for reasonable participa-

14               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 instru-

18               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 in-

37

1           strument  received under  this subsection, based

2           on  the  conditions established under  subpara-

3           graph  (A).

4                (C) CONVERSION.--The      warrant  shall pro-

5           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 ex-

9           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      rep-

14           resenting  securities to be received by  the Sec-

15           retary under  this subsection shall contain anti-

16           dilution provisions of the type employed  in cap-

17           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, divi-

21           dends,  and  other  distributions, mergers,  and

22           other  forms  of reorganization  or recapitaliza-

23           tion.

24                (E)  EXERCISE   PRICE.--The    exercise price

25           for  any warrant  issued  pursuant  to this sub-

38

1           section shall be set by  the Secretary, in the in-

2           terest of the taxpayers.

3                (F)  SUFFICIENCY.--The     financial institu-

4           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  suffi-

8           cient  authorized      shares,    including     preferred

9           shares  that may  carry dividend rights equal to

10           a  multiple number  of common   shares, the Sec-

11           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 equiva-

14           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 es-

19           tablish de  minimis  exceptions  to the require-

20           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

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 in-

5               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 ac-

13  quired under this Act, within 2 business days of purchase,

14  trade, or other disposition.

15        (b) DISCLOSURE.--For     each type of financial institu-

16  tions that sells troubled assets to the Secretary under this

17  Act, the Secretary shall determine whether  the public dis-

18  closure required for such  financial institutions with re-

19  spect to off-balance sheet transactions, derivatives instru-

20  ments, contingent liabilities, and  similar sources of poten-

21  tial exposure is adequate  to provide to the public sufficient

22  information as to the true financial position of the institu-

23  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

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 trans-

16      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 resolu-

20      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 out-

26  standing at any one time shall be determined for purposes

41

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 exer-

6       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 addi-

14       tional amount.

15             (2)  CONTENTS              OF     JOINT     RESOLUTION.--For

16       the purpose of this section, the term  ''joint resolu-

17       tion'' means  only a joint resolution--

18                       (A) that is introduced not later than 3 cal-

19             endar  days after the date on which  the report

20             of the plan of the Secretary referred to in sub-

21             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 obliga-

42

1           tions under the Emergency  Economic Stabiliza-

2           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 REP-

10  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 Mem-

14      bers of the House  that, pursuant to this section, the

15      House  shall convene not later than  the second cal-

16      endar day after receipt of such report;

17           (2) REPORTING              AND      DISCHARGE.--Any    com-

18      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 resolu-

23      tion within that period, the committee shall be dis-

24      charged from further consideration of the joint reso-

43

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 resolu-

5       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 mo-

11       tion shall not be in order after the House  has dis-

12       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 dis-

17       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 consider-

21       ation are waived. The previous question shall be con-

22       sidered as ordered on  the joint resolution to its pas-

23       sage without intervening motion  except two hours of

24       debate equally divided and  controlled by  the pro-

25       ponent and an  opponent. A motion to reconsider the

44

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 lead-

7      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     intro-

13      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 begin-

19            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

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 debat-

6           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 resolu-

14           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 lead-

18           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 res-

23           olution is not in order.

24                 (C) VOTE  ON PASSAGE.--The   vote on pas-

25           sage shall occur immediately following the con-

46

1           clusion of the debate on a joint resolution, and

2           a single quorum  call at the conclusion of the de-

3           bate if requested in accordance with the rules of

4           the Senate.

5                (D)  RULINGS            OF     THE      CHAIR      ON

PROCE-

6           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 re-

9           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 fol-

17      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

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-cal-

20           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 re-

48

1                 ceives the veto message  with respect to the

2                 joint resolution       shall  be   disregarded      in

3                 computing   the 15-calendar day  period de-

4                 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, re-

14           spectively, and  as such  it is deemed   a part of

15           the rules of each House,  respectively, but appli-

16           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 constitu-

22           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

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  establish-

7       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 es-

14       tablished by  the Secretary under  this Act. The  sub-

15       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

tax-

25                   payers.

50

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     trans-

6           action type, frequency, size, prices paid, and  all

7           other  relevant terms  and  conditions, and  the

8           timing, duration  and terms  of any future com-

9           mitments  to purchase assets.

10                (D)  Characteristics and disposition of ac-

11           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 in-

21           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 appli-

51

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 In-

5           stitutions Reform, Recovery, and Enhancement

6           Act of 1989  (12 U.S.C.  1811 note), women,

7           and minority- and women-owned   businesses, in-

8           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  represent-

11           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 OVER-

17      SIGHT.--

18                 (A) GAO  PRESENCE.--The    Secretary shall

19           provide the Comptroller General  with appro-

20           priate space and facilities in the Department  of

21           the Treasury as necessary to facilitate oversight

22           of the TARP   until the termination date estab-

23           lished in section 120.

24                 (B) ACCESS  TO  RECORDS.--To   the extent

25           otherwise consistent with law, the Comptroller

52

1           General  shall have  access, upon  request, to any

2           information,  data, schedules, books,  accounts,

3           financial records, reports, files, electronic com-

4           munications,  or other  papers, things, or prop-

5           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, employ-

8           ees, independent   public accountants,  financial

9           advisors, and  other agents  and representatives

10           of the  TARP   (as related to the agent  or rep-

11           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 Gen-

14           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  ap-

21           propriate.

22                (C)   REIMBURSEMENT             OF     COSTS.--The

23           Treasury   shall reimburse  the  Government   Ac-

24           countability Office for the full cost of any  such

25           oversight  activities as  billed therefor by  the

53

1            Comptroller  General of the United  States. Such

2            reimbursements   shall be credited to the appro-

3            priation account ''Salaries and  Expenses, Gov-

4            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 ac-

22       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  Account-

54

1       ability Office for the full cost of any such  audit as

2       billed therefor by the Comptroller General. Such  re-

3       imbursements  shall be credited to the appropriation

4       account  ''Salaries and  Expenses,  Government    Ac-

5       countability Office'' current when  the payment  is re-

6       ceived and remain  available until expended.  The  fi-

7       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, expendi-

12       tures, and  financial transactions of the TARP   and

13       any agents and  representatives of the TARP   (as re-

14       lated to the agent  or representative's activities on

15       behalf of or under the authority  of the  TARP),  in-

16       cluding vehicles established by  the Secretary under

17       this Act.

18           (3)  CORRECTIVE           RESPONSES         TO    AUDIT   PROB-

19       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 appro-

25           priate.

55

1       (c) INTERNAL   CONTROL.--

2            (1) ESTABLISHMENT.--The       TARP    shall estab-

3       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 oper-

8            ations, including the use of the resources of the

9            TARP;

10                 (B) the reliability of financial reporting, in-

11            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  an-

16       nual financial statement  issued under  this section,

17       the TARP   shall--

18                 (A) state the responsibility of management

19            for  establishing and  maintaining  adequate  in-

20            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

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 ac-

9       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 under-

16  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  Commis-

23       sion, the Secretary, and other Federal banking  agen-

24       cies with  respect to monitoring  leverage and  acting

25       to curtail excessive leveraging;

57

1             (2) an analysis of the authority of the Board  to

2       regulate leverage, including by setting margin  re-

3       quirements, and what  process the Board  used to de-

4       cide whether  or not to use its authority;

5             (3) an  analysis of any usage of the margin  au-

6       thority by the Board; and

7             (4) recommendations   for the Board  and  appro-

8       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 re-

17  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 secu-

24  rities issued under chapter 31  of title 31, United  States

25  Code, and the purposes for which securities may  be issued

58

1  under chapter 31 of title 31, United States Code, are ex-

2  tended to include actions authorized by this Act, including

3  the payment  of administrative expenses. Any  funds ex-

4  pended or obligated by the Secretary for actions author-

5  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 pur-

11      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 de-

59

1           nied by  the court within 3 days of the date of

2           the request.

3                 (C) PRELIMINARY                 INJUNCTION.--Any    re-

4           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

re-

11           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 Proce-

19           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

1       other than  as expressly provided in a  written con-

2       tract with the Secretary.

3             (4)  STAYS.--Any    injunction or  other form  of

4       equitable relief issued against the Secretary for ac-

5       tions pursuant  to section 101,  102, 106,  and  109,

6       shall be automatically stayed. The  stay shall be lift-

7       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 au-

18       thority of the  Secretary pursuant  to this Act shall

19       not impair the claims or defenses  that would other-

20       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

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 hold-

6       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, in-

9       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      Sec-

15  retary, upon  submission  of a written certification to Con-

16  gress, may  extend the authority provided under  this Act

17  to expire not later than  2 years from  the date of enact-

18  ment  of this Act. Such  certification shall include a jus-

19  tification of why the extension is necessary to assist Amer-

20  ican families and  stabilize financial markets,  as well as

21  the expected cost to the taxpayers for such an extension.

62

1  SEC. 121. SPECIAL INSPECTOR   GENERAL  FOR  THE TROU-

2                     BLED ASSET RELIEF  PROGRAM.

3       (a)     OFFICE      OF      INSPECTOR             GENERAL.--There

is

4  hereby established the Office of the Special Inspector Gen-

5  eral for the Troubled Asset Relief Program.

6       (b) APPOINTMENT                 OF  INSPECTOR  GENERAL;   RE-

7  MOVAL.--(1)  The head of the Office of the Special Inspec-

8  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 In-

11  spector General''), who shall be appointed by the Presi-

12  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 investiga-

17  tions.

18       (3) The  nomination of an individual as Special In-

19  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

1  considered an employee  who determines  policies to be pur-

2  sued by  the United States in the nationwide  administra-

3  tion of Federal law.

4        (6) The annual  rate of basic pay of the Special In-

5  spector General shall be the annual  rate of basic pay pro-

6  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  pro-

14  gram  established  under  section 102,  including by  col-

15  lecting and summarizing  the following information:

16              (A)  A description of the categories of troubled

17        assets purchased or  otherwise procured by  the Sec-

18        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

1              (D)  A  listing of each financial institution that

2        such troubled assets were  purchased from.

3              (E)  A listing of and detailed biographical infor-

4        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 trou-

9        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 con-

17  trols as the Special Inspector  General considers  appro-

18  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 du-

21  ties and responsibilities of inspectors general under the In-

22  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

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

RE-

7  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 In-

10  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 serv-

16  ices as authorized by section 3109  of title 5, United States

17  Code, at daily rates not to exceed the equivalent rate pre-

18  scribed for grade  GS-15  of the General  Schedule by sec-

19  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 nec-

24  essary to carry out the  duties of the  Inspector General.

66

1       (4)(A) Upon  request of the Special Inspector General

2  for information or assistance from  any department,  agen-

3  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  informa-

6  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 Inspec-

19  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 pur-

22  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 infor-

25  mation collected under  subsection (c)(1).

67

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 na-

7        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 estab-

12  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 Inspec-

20  tor General  shall terminate on the later of--

21               (1)  the date  that the  last troubled  asset ac-

22        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

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 limita-

7  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 au-

14  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

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 cur-

6       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 be-

14           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 be-

18           fore the period at the end ''(or such higher per-

19           centage  as the Board  determines, in the discre-

20           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  para-

25                   graph,''; and

70

1                          (ii)   by   adding      at  the     end   the

fol-

2                   lowing: ''Such actions may  include making

3                   payments,  which shall be  accepted as pay-

4                   ment  in full of all indebtedness under  the

5                   eligible mortgage, to any  holder of an ex-

6                   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 ''ad-

10       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 sec-

15  tion referred to as the ''Oversight Panel'') as an establish-

16  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 au-

24                   thority under this Act, including with re-

71

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 informa-

7                 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 mini-

13                 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 Sec-

18           retary of the authority under  section 101(a)  or

19           102,  and every 30 days thereafter.

20           (2)   SPECIAL      REPORT     ON      REGULATORY          RE-

21       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 regu-

24       latory system  and  its effectiveness at overseeing the

25       participants in the financial system  and  protecting

72

1       consumers,  and providing recommendations   for im-

2       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

1           (2) PAY.--Each   member  of the Oversight Panel

2      shall each be paid at a rate equal to the daily equiv-

3      alent of the annual  rate of basic pay  for level I of

4      the Executive Schedule for each day (including trav-

5      el time) during which such  member  is engaged  in

6      the actual performance of duties vested in the Com-

7      mission.

8           (3) PROHIBITION                OF     COMPENSATION

OF   FED-

9      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 re-

12      ceive additional pay, allowances, or benefits by rea-

13      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

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     Over-

9      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 depart-

14      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 sec-

21      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

1              (2) POWERS   OF  MEMBERS  AND  AGENTS.--Any

2      member  or agent of the Oversight Panel may,  if au-

3      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

Over-

7      sight Panel may  secure directly from  any depart-

8      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 re-

14      ceive and consider all reports required to be sub-

15      mitted to the Oversight Panel under this Act.

16      (f) TERMINATION.--The    Oversight Panel shall termi-

17  nate 6 months after the termination date specified in sec-

18  tion 120.

19      (g) FUNDING  FOR EXPENSES.--

20              (1)   AUTHORIZATION               OF   APPROPRIATIONS.--

21      There  is authorized to be appropriated to the Over-

22      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

1      and half of which shall be derived from the contin-

2      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 Over-

8      sight Panel, from funds made available to the Sec-

9      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 De-

16  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  IN-

20      SURED  STATUS.--

21                      ''(A)      PROHIBITION       ON      FALSE

ADVER-

22              TISING AND  MISUSE OF FDIC NAMES.--No    per-

23              son may represent or imply that any deposit li-

24              ability, obligation, certificate, or share is in-

25              sured or guaranteed by the Corporation, if such

77

1           deposit liability, obligation, certificate, or share

2           is not  insured or guaranteed   by the Corpora-

3           tion--

4                     ''(i) by using the  terms 'Federal De-

5                posit', 'Federal  Deposit  Insurance', 'Fed-

6                eral Deposit  Insurance  Corporation', any

7                combination  of such  terms, or  the abbre-

8                viation   'FDIC'     as    part    of  the   business

9                name  or firm  name  of any person, includ-

10                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 adver-

15                tisement, solicitation, or other document.

16                ''(B)   PROHIBITION        ON     MISREPRESENTA-

17           TIONS   OF   INSURED      STATUS.--No    person  may

18           knowingly  misrepresent--

19                     ''(i) that any deposit liability, obliga-

20                tion, certificate, or share is insured, under

21                this Act, if such  deposit liability, obliga-

22                tion, certificate, or share is not so insured;

23                or

24                     ''(ii) the extent to which  or the man-

25                ner  in which  any deposit liability, obliga-

78

1               tion, certificate, or share is insured under

2               this Act, if such deposit liability, obliga-

3               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 para-

9           graph by any person for which the agency is the

10           appropriate Federal banking agency, or any in-

11           stitution-affiliated party thereof.

12               ''(D)     CORPORATION               AUTHORITY        IF

THE

13           APPROPRIATE          FEDERAL             BANKING         AGENCY

14           FAILS TO FOLLOW  RECOMMENDATION.--

15                     ''(i)      RECOMMENDATION.--The

Cor-

16               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 ap-

25               propriate Federal banking agency does not,

79

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 Corpora-

5               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   addi-

11           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 per-

18                      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

1                       ''(ii) for purposes of enforcing the re-

2                quirements of this paragraph, the author-

3                ity of the Corporation under--

4                              ''(I) section 10(c) to conduct in-

5                       vestigations; and

6                              ''(II) subsections (b), (c), (d) and

7                       (i) of section 8 to conduct enforce-

8                       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  para-

17  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

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 pre-

9                    vent any further, or to remedy any ex-

10                    isting, violation.

11                    ''(ii) EFFECT           OF     ORDER.--Any    tem-

12               porary order  issued under  this subpara-

13               graph shall take effect upon service.

14               ''(B) EFFECTIVE            PERIOD      OF   TEMPORARY

15           ORDER.--A   temporary order issued under sub-

16           paragraph (A)  shall remain  effective and  en-

17           forceable, pending the completion of an admin-

18           istrative proceeding           pursuant       to subsection

19           (b)(1) in   connection            with     the   notice    of

20           charges--

21                    ''(i) until such  time as the Corpora-

22               tion or other appropriate Federal banking

23               agency dismisses the charges specified in

24               such notice; or

82

1                          ''(ii)   if  a  cease-and-desist         order

is

2                  issued against such person, until the effec-

3                  tive date of such order.

4                  ''(C) CIVIL MONEY   PENALTIES.--Any    vio-

5           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 in-

8           sured depository institution or an  institution-af-

9           filiated party that is found to have violated this

10           paragraph,         the   Corporation       or     other

appro-

11           priate Federal banking  agency shall not be re-

12           quired  to demonstrate  any loss to an  insured

13           depository institution.''.

14       (c)  UNENFORCEABILITY                  OF   CERTAIN          AGREE-

15  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   AGREE-

19       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

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, in-

5      cluding any liabilities, assets, or interest therein, in

6      connection with any transaction in which  the Cor-

7      poration exercises its authority under section 11 or

8      13, shall be enforceable against or impose any liabil-

9      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 ''para-

17            graph (1)''; and

18                  (B) by striking ''this subsection'' the sec-

19            ond     place    that    term        appears       and

inserting

20            ''paragraph (2)''; and

21            (2) in the heading for subsection (a), by strik-

22      ing   ''INSURANCE         LOGO.--''            and  inserting

''REP-

23      RESENTATIONS   OF DEPOSIT  INSURANCE.--''.

84

1  SEC. 127. COOPERATION   WITH THE FBI.

2       Any  Federal financial regulatory agency shall cooper-

3  ate with the Federal Bureau  of Investigation and other

4  law enforcement agencies investigating fraud, misrepre-

5  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 Re-

9  lief Act of 2006  (12 U.S.C. 461 note) is amended  by strik-

10  ing ''October 1, 2011'' and inserting ''October 1, 2008''.

11  SEC. 129. DISCLOSURES  ON  EXERCISE OF  LOAN  AUTHOR-

12                      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, part-

17  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 lend-

25       ing, available information concerning the value of

26       any  collateral held with respect to such a  loan, the

85

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 Fed-

10       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 confiden-

15  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

1  later than 30 days after that date of enactment, with re-

2  spect to any such exercise of authority.

3       (e) SHARING         OF  INFORMATION.--Any    reports re-

4  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 sec-

10  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 subpara-

14       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 cred-

18               it   relating   to   a     plan       described      in

section

19               101(53D) of title 11, United States Code--

20                           ''(I)   the      requirements        of

subpara-

21                     graphs  (A) through (E)  shall not apply;

22                     and

23                           ''(II) a good faith estimate of the dis-

24                     closures required under subsection (a) shall

25                     be made  in accordance with regulations of

87

1                 the   Board     under   section    121(c)       before

2                 such  credit is extended,  or shall be  deliv-

3                 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 applica-

10            tion (as provided  under clause (i)(II)) contains

11            an   annual    percentage    rate    which      is   subse-

12            quently  rendered  inaccurate, within  the mean-

13            ing of section 107(c), the creditor shall furnish

14            another  disclosure statement  at the time of set-

15            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  Dis-

19  closure Improvement  Act  of 2008  (Public Law  110-289).

20  SEC. 131. EXCHANGE    STABILIZATION   FUND   REIMBURSE-

21                MENT.

22       (a) REIMBURSEMENT.--The        Secretary  shall reim-

23  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

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 Ex-

5  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   AC-

9                     COUNTING.

10        (a) AUTHORITY.--The   Securities and Exchange Com-

11  mission shall have the authority under the securities laws

12  (as such term is defined in section 3(a)(47) of the Securi-

13  ties Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to sus-

14  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

1  SEC. 133. STUDY ON  MARK-TO-MARKET  ACCOUNTING.

2      (a) STUDY.--The   Securities and Exchange  Commis-

3  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 deposi-

8  tory institutions. Such  a study shall consider at a  min-

9  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 fail-

13      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 Account-

17      ing     Standards           Board          in    developing

accounting

18      standards;

19              (5) the advisability and feasibility of modifica-

20      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  Commis-

24  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 deter-

90

1  minations of the Commission, including such administra-

2  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 in-

13  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 connec-

91

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 stat-

6  utes) for the purposes of assisting the committees of Con-

7  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 au-

14  thority granted in section 101(a), but in no case later than

15  December  31, 2008, and semiannually thereafter, the Of-

16  fice of Management   and Budget shall report to the Presi-

17  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 guar-

23       antees of the troubled assets, determined in accord-

24       ance with section 123;

92

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 com-

5       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 dif-

10  ferences between  the  Congressional Budget   Office esti-

11  mates  delivered in accordance  with  subsection (b) and

12  prior Office of Management    and Budget  estimates.

13       (b) REPORTS   BY  THE  CONGRESSIONAL    BUDGET   OF-

14  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 re-

17  port to the Congress  the  Congressional Budget   Office's

18  assessment  of the report submitted  by the Office of Man-

19  agement  and Budget, including--

20              (1) the cost of the troubled assets and guaran-

21       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

1      (c) FINANCIAL EXPERTISE.--In   carrying out the du-

2  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 pro-

19      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   Eco-

24               nomic Stabilization Act of 2008  using method-

25               ology required by  the Federal Credit Reform

94

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   Eco-

13           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 Fed-

20           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 Sec-

25           retary using authority provided by the Emer-

95

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 re-

4                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 Com-

11  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 amend-

15  ment made  by this section shall apply beginning with re-

16  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 emer-

20  gency requirement and necessary to meet emergency needs

21  pursuant to section 204(a) of S. Con. Res 21 (110th Con-

22  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 enforce-

25  ment.

96

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 Rev-

5  enue Code of 1986, gain or loss from the sale or exchange

6  of any applicable preferred stock by any applicable finan-

7  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 Asso-

13             ciation, established pursuant to the Federal Na-

14             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 Fed-

18             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 in-

22             stitution on September 6, 2008, or

23                    (B) was sold or exchanged  by the applica-

24             ble financial institution on or after January  1,

25             2008, and before September 7, 2008.

97

1      (c) APPLICABLE   FINANCIAL INSTITUTION.--For   pur-

2  poses of this section:

3             (1) IN GENERAL.--Except    as provided in para-

4      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 com-

10             pany (as defined in section 3(w)(1) of the Fed-

11             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 sub-

16             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 ex-

20             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 appli-

24             cable financial institution only if it was  an enti-

25             ty described in subparagraph  (A) or (B)  of

98

1             paragraph (1) at all times during the period be-

2             ginning on September 6, 2008, and ending on

3             the date of the sale or exchange of the pre-

4             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 appli-

8  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      Sep-

12      tember 6, 2008, which the applicable financial insti-

13      tution did not hold on such date, but  the basis of

14      which in the hands of the applicable financial insti-

15      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 part-

19      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

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 EXECU-

7                      TIVE COMPENSATION   OF EMPLOYERS   PAR-

8                      TICIPATING IN THE  TROUBLED  ASSETS RE-

9                      LIEF PROGRAM.

10        (a) DENIAL  OF DEDUCTION.--Subsection  (m) of sec-

11  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 EM-

14        PLOYERS  PARTICIPATING IN THE  TROUBLED  ASSETS

15        RELIEF PROGRAM.--

16                        ''(A) IN GENERAL.--In   the case of an ap-

17                plicable employer, no deduction shall be allowed

18                under this chapter--

19                                  ''(i) in the case of executive remunera-

20                        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

1                     ''(ii) in the case of deferred deduction

2                executive     remuneration           for  any   taxable

3                year for services performed during any  ap-

4                plicable taxable year  by a  covered execu-

5                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 ac-

13                     count under this clause in a preceding

14                     taxable year.

15                ''(B) APPLICABLE            EMPLOYER.--For     pur-

16           poses of this paragraph--

17                     ''(i)   IN    GENERAL.--Except             as   pro-

18                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  Sec-

22                retary under  section 101(a)  of the Emer-

23                gency Economic   Stabilization Act of 2008

24                if the aggregate amount   of the assets so

101

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 em-

6               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  Sta-

10               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 em-

19               ployer,    except        that    in applying      section

20               1563(a)  for purposes of either such sub-

21               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

1           taxable year' means, with respect to any em-

2           ployer--

3                      ''(i) the first taxable year of the em-

4               ployer--

5                           ''(I) which includes any portion

6                      of the period during which  the au-

7                      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 subpara-

16                      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            pur-

23           poses of this paragraph--

103

1                     ''(i) IN  GENERAL.--The     term 'covered

2                executive' means,  with respect to any  ap-

3                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  there-

10                     of), is the chief executive officer of the

11                     applicable employer  or the chief finan-

12                     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        EM-

18                PLOYEES.--An             employee   is described     in

19                this clause if the employee  is 1 of the  3

20                highest compensated   officers of the appli-

21                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 share-

25                     holder disclosure rules for compensa-

104

1                     tion under the  Securities Exchange

2                     Act of 1934 (without regard to wheth-

3                     er those rules apply to the employer),

4                     and

5                            ''(II) by only taking into account

6                     employees employed  during the por-

7                     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 em-

12               ployer for any applicable taxable year, such

13               employee shall be treated as a covered ex-

14               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 deter-

25           mined under  paragraph (4) without regard to

105

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 para-

7           graph, the term 'deferred deduction executive

8           remuneration' means  remuneration which would

9           be executive          remuneration           for   services

per-

10           formed in an applicable taxable year but for the

11           fact that the deduction under this chapter (de-

12           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 para-

17           graph (4) shall apply for purposes of this para-

18           graph.

19                ''(H) REGULATORY   AUTHORITY.--The    Sec-

20           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

1             the case of any acquisition, merger, or reorga-

2             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

sub-

6       section (f), and

7             (2) by inserting after subsection (d) the fol-

8       lowing new subsection:

9       ''(e) SPECIAL RULE   FOR APPLICATION  TO EMPLOY-

10  ERS PARTICIPATING  IN THE  TROUBLED   ASSETS  RELIEF

11  PROGRAM.--

12             ''(1) IN     GENERAL.--In    the case of the sever-

13       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 Emer-

16       gency Economic  Stabilization Act of 2008 are in ef-

17       fect (determined under section 120 of such Act), this

18       section shall be applied to payments to such execu-

19       tive with the following modifications:

20                   ''(A) Any  reference to a disqualified indi-

21             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 em-

107

1           ployment of a covered executive, and any ref-

2           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 appli-

6           cable severance from employment.

7               ''(C) Any  reference to a corporation shall

8           be treated as a reference to an applicable em-

9           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     EM-

20           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 ter-

24               mination of the executive by the employer,

25               or

108

1                    ''(ii)     in  connection           with     any

bank-

2               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 para-

9               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 sub-

19                    section applies in the case of any ac-

20                    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 in-

25                    dividual are treated as parachute pay-

109

1                        ments by  reason of this subsection,

2                        and other payments  with respect to

3                        such individual are treated as para-

4                        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       employ-

11                        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   amend-

17      ments  made  by subsection (b) shall apply to pay-

18      ments  with respect to severances occurring during

19      the period during which the authorities under sec-

20      tion 101(a) of this Act are  in effect (determined

21      under section 120 of this Act).

110

1 SEC. 303. EXTENSION  OF EXCLUSION OF  INCOME FROM

2              DISCHARGE  OF QUALIFIED PRINCIPAL RESI-

3              DENCE  INDEBTEDNESS.

4     (a)   EXTENSION.--Subparagraph                (E)   of    section

5 108(a)(1) of the Internal Revenue Code of 1986 is amend-

6 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.