TARP Reform and Accountability Act of 2009 - Amends the Emergency Economic Stabilization Act of 2008 (EESA) to direct the Secretary of the Treasury to require specified depository institutions under the Troubled Asset Relief Program (TARP) to report periodically on their use of TARP assistance.
Requires the Secretary to incorporate within the TARP assistance agreement how the funds are to be used and the benchmarks an institution must meet in using such funds.
Requires federal banking regulatory agencies to examine annually the use of TARP funds made by the deposit institutions.
Prohibits the use of TARP funds by a TARP-assisted institution for mergers or acquisitions unless such a transaction: (1) will reduce risk to the taxpayer; or (2) could have been consummated without such funds.
Sets forth executive compensation and corporate governance requirements.
Amends the Federal Deposit Insurance Act (FDIA) to require that reports of condition submitted by federally-assisted deposit institutions include the amount of any increase or decrease in new lending attributable to TARP investment or assistance.
Amends the Act to condition TARP assistance to a depository institution upon its issuance to the Secretary of common stock warrants.
Instructs the Secretary to make TARP available funds to smaller community financial institutions.
Increases the size of the Financial Stability Oversight Board and authorizes it to overturn by a 2/3 vote any policy determination made by the Secretary.
Conditions TARP assistance upon development of a Board-approved foreclosure mitigation and implementation plan.
Cites circumstances in which a servicer shall not be: (1) liable for entering into a loan modification or workout plan with respect to any mortgage that meets specified criteria; (2) limited in the ability to modify mortgages, the number of mortgages that can be modified, the frequency of loan modifications, or the range of permissible modifications; or (3) obligated to repurchase loans or otherwise make payments to the securitization vehicle on account of a modification, workout, or other loss mitigation plan for residential mortgages that constitute a part or all of the mortgages in the securitization vehicle.
Directs the President to designate officers from the Executive Branch (President's designees) to implement specified purposes, including the restructuring necessary to achieve the long-term financial viability of domestic automobile manufacturers.
Requires the President's designees to: (1) authorize and direct the disbursement of bridge loans to, or to enter into commitments for lines of credit for, each automobile manufacturer that submitted a loan request and a plan to Congress on December 2, 2008; and (2) determine measures to assess the progress of each eligible automobile manufacturer toward transforming such plan into a restructuring plan.
Conditions such bridge loans upon an eligible automobile manufacturer's issuance of common stock warrants to the President's designee.
Subjects bridge loan recipients to specified standards for executive compensation and corporate governance.
Grants the Comptroller General oversight authority over the President's designee.
Makes it the duty of the Special Inspector General to audit and investigate the President's designee.
Requires the President's designee to report to Congress within five days of making any such bridge loan.
Authorizes the Secretary to establish or support: (1) facilities for the availability of consumer loans, including vehicle and student loans; (2) state and local governments, and other issuers of municipal securities, experiencing difficulty accessing financing in the capital markets (including direct purchases and credit enhancement); and (3) facilities to support the availability of commercial real estate loans, including asset-backed securities.
Amends the National Housing Act to revise the HOPE for Homeowners Program to: (1) revise requirements governing insured mortgages and premium payments; (2) authorize the Program's Board of Directors to establish a payment to the servicer of the existing senior mortgage for every loan insured under the Program; and (3) instruct the Secretary to fund increased credit subsidy costs.
Instructs the Secretary to implement a program to stimulate demand for home purchases and to reduce unsold inventories of residential properties, ensuring the availability of affordable interest rates on mortgages made for the purchase of one- to four-family residential properties.
Amends the FDIA and the Federal Credit Union Act to make permanent the increase in the standard maximum deposit insurance amount from $100,000 to $250,000.
Revises requirements for systemic risk special assessments (to recover any loss to the Deposit Insurance Fund arising from actions taken or assistance provided with respect to an insured depository institution) to include assessments on depository institution holding companies.
[Congressional Bills 111th Congress]
[From the U.S. Government Printing Office]
[H.R. 384 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 384
To reform the Troubled Assets Relief Program of the Secretary of the
Treasury and ensure accountability under such Program.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 9, 2009
Mr. Frank of Massachusetts introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committees on Ways and Means and the Judiciary, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To reform the Troubled Assets Relief Program of the Secretary of the
Treasury and ensure accountability under such Program.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``TARP Reform and
Accountability Act of 2009''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--MODIFICATIONS TO TARP AND TARP OVERSIGHT
Sec. 101. New conditionality for TARP-assisted institutions.
Sec. 102. Executive compensation and corporate governance.
Sec. 103. New lending by insured depository institutions that is
attributable to TARP investments and
assistance.
Sec. 104. Other protections for the taxpayer.
Sec. 105. Availability of TARP funds to smaller community institutions.
Sec. 106. Increase in size and authority of Financial Stability
Oversight Board.
Sec. 107. Clarification.
TITLE II--FORECLOSURE RELIEF
Sec. 201. TARP foreclosure mitigation plan and implementation.
Sec. 202. Elements of plan.
Sec. 203. Program alternatives.
Sec. 204. Systematic foreclosure prevention and mortgage modification
plan established.
Sec. 204. Modification of plan.
Sec. 205. Servicer safe harbor.
Sec. 206. Report by Congressional Oversight Panel.
TITLE III--AUTO INDUSTRY FINANCING AND RESTRUCTURING
Sec. 301. Short title.
Sec. 302. Direct loan provisions.
TITLE IV--CLARIFICATION OF AUTHORITY
Sec. 401. Consumer loans.
Sec. 402. Municipal securities.
Sec. 403. Commercial real estate loans.
TITLE V--HOPE FOR HOMEOWNERS PROGRAM IMPROVEMENTS
Sec. 501. Changes to HOPE for Homeowners Program.
Sec. 502. Funding of increased HOPE for Homeowners Program credit
subsidy costs.
TITLE VI--HOME BUYER STIMULUS
Sec. 601. Home buyer stimulus program.
TITLE VII--FDIC PROVISIONS
Sec. 701. Permanent increase in deposit insurance.
Sec. 702. Extension of restoration plan period.
Sec. 703. Borrowing authority.
Sec. 704. Systemic risk special assessments.
TITLE I--MODIFICATIONS TO TARP AND TARP OVERSIGHT
SEC. 101. NEW CONDITIONALITY FOR TARP-ASSISTED INSTITUTIONS.
(a) In General.--Section 113 of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5223) is amended by adding at the
end the following new subsections:
``(e) Reporting, Monitoring and Accountability.--
``(1) Periodic public reporting on use of assistance.--The
Secretary shall require any assisted institution that became an
assisted institution on or after October 3, 2008, to publicly
report, not less than quarterly, on such institution's use of
the assistance .
``(2) Additional requirements and compliance.--The
Secretary--
``(A) may establish additional reporting and
information requirements for any direct or indirect
recipient of any assistance or benefit at any time on
or after October 3, 2008, that involves the obligation
or expenditure, loan, or investment of funds available
to the Secretary under this title; and
``(B) shall establish appropriate mechanisms to
ensure appropriate use and compliance with all terms of
any use of funds made available under this title.
``(3) Consultation.--The Secretary shall consult with the
appropriate Federal banking agencies in establishing the
reporting requirements under this subsection that are
applicable to insured depository institutions.
``(f) Use and Accountability for Use of Funds.--
``(1) Insured depository institution.--
``(A) Investment in or other injection of funds
into a depository institution.--As a condition for the
provision of any investment in the capital or assets
of, or any other provision of assistance to or for the
benefit of, any insured depository institution, the
Secretary shall incorporate into the agreement for such
investment or assistance an agreement between the
depository institution and the appropriate Federal
banking agency with respect to such institution on the
manner in which the funds are to be used and benchmarks
that the institution is required to meet in using the
funding so as to advance the purposes of this Act to
strengthen the soundness of the financial system and
the availability of credit to the economy.
``(B) Examinations.--In the case of any assisted
insured depository institution that became an assisted
institution on or after October 3, 2008, the
appropriate Federal banking agency shall specifically
review at least once annually the use, by the
institution, of funds made available under this Act and
compliance by the institution with the requirements
established by or pursuant to this title or by
agreement of the institution with the Secretary or the
appropriate Federal banking agency, including executive
compensation and any other specific agreement terms.
Such review may be conducted in connection with the
regular full-site examination, or any other
examination.
``(C) Compliance procedures required.--Each
appropriate Federal banking agency shall prescribe
regulations requiring assisted insured depository
institutions to establish and maintain procedures
designed to assure and monitor the compliance of such
depository institutions with the requirements
established by or pursuant to this title or by
agreement of the institution with the Secretary or such
agency.
``(2) Use of tarp funds for mergers or acquisitions.--
Effective as of the date of the enactment of the TARP Reform
and Accountability Act of 2009, no assisted institution that
became an assisted institution at any time on or after October
3, 2008, may merge or consolidate with any insured depository
institution or, either directly or indirectly, acquire the
assets of, or assume liability to pay any deposits made in, any
insured depository institution, and no Federal banking agency
may approve any such action under section 18(c) of the Federal
Deposit Insurance Act, while any of such assistance is
outstanding unless, prior to the approval of such agency, the
Secretary has determined in consultation with any relevant
Federal banking agencies that--
``(A) such action will reduce risk to the taxpayer;
or
``(B) the transaction could have been consummated
without funds provided under this title.
``(3) Nondepository institutions.--In the case of any
assisted institution that became an assisted institution on or
after October 3, 2008, and is not described in and subject to
paragraph (1), the Secretary shall establish such reporting
requirements and require any other conditions or agreements no
less stringent than those applicable to assisted insured
depository institutions, including requirements to conduct
examinations of the books, affairs, and procedures of any such
financial institution by the Secretary or by delegation to the
Board.
``(g) No Impediment to Withdrawal.--Subject to consultation with
the appropriate Federal banking agencies, the Secretary may permit an
insured depository institution to repay any assistance previously
provided under this title to such depository institution without regard
to whether the depository institution has replaced such funds from any
other source.''.
(b) Definitions.--Section 3 of the Emergency Economic Stabilization
Act of 2008 (12 U.S.C. 5202) is amended by adding at the end the
following new paragraphs:
``(10) Definitions relating to insured depository
institutions.--The terms `depository institution', `insured
depository institution', `Federal banking agency' and
`appropriate Federal banking agency' have the same meanings as
in section 3 of the Federal Deposit Insurance Act.
``(11) Assisted institution.--The terms `assisted
institution' or `assisted insured depository institution' means
any such institution that receives, directly or indirectly, any
assistance or benefit that involves the obligation or
expenditure, loan, or investment of funds available to the
Secretary under title I.''.
SEC. 102. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.
(a) In General.--Section 111 of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5221) is amended by adding at the
end the following new subsections:
``(e) Across-the-Board Executive Compensation and Corporate
Governance Requirements.--
``(1) Standards required.--Effective as of the date of the
enactment of the TARP Reform and Accountability Act of 2009 and
notwithstanding any provision of, and in addition to any
requirement of subsection (a), (b), or (c) (other than the
definitions in subsection (b)(3)), the Secretary shall require
any assisted institution to meet standards for executive
compensation and corporate governance while any assistance
under this title is outstanding.
``(2) Specific requirements.--The standards established
under paragraph (1) shall include--
``(A) limits on compensation that exclude
incentives for senior executive officers of an assisted
institution which received assistance under this title
to take unnecessary and excessive risks that threaten
the value of such institution during the period that
any assistance under this title is outstanding;
``(B) a provision for the recovery by such
institution of any bonus or incentive compensation paid
to a senior executive officer based on statements of
earnings, gains, or other criteria that are later found
to be materially inaccurate;
``(C) a prohibition on such institution making any
golden parachute payment to a senior executive officer
during the period that the assistance under this title
is outstanding;
``(D) a prohibition on such institution paying or
accruing any bonus or incentive compensation, during
the period that the assistance under this title is
outstanding, to the 25 most highly-compensated
employees; and
``(E) a prohibition on any compensation plan that
would encourage manipulation of such institution's
reported earnings to enhance the compensation of any of
its employees.
``(3) Divestiture.--During the period in which any
assistance under this title to any assisted institution is
outstanding, the institution may not own or lease any private
passenger aircraft, or have any interest in such aircraft,
except that such institution shall not be treated as being in
violation of this provision with respect to any aircraft or
interest in any aircraft that was owned or held by the
institution immediately before receiving such assistance, as
long as the recipient demonstrates to the satisfaction of the
Secretary that all reasonable steps are being taken to sell or
divest such aircraft or interest.
``(4) Applicability to prior assistance.--Notwithstanding
any limitations included in subsection (a), (b), or (c) with
regard to applicability, the Secretary may apply the
requirements of and the standards established under this
subsection to any assisted institution that received any
assistance under this title on or after the date of the
enactment of the TARP Reform and Accountability Act of 2009.
``(f) Board Observer.--The Secretary may require the attendance of
an observer delegated by the Secretary, on behalf of the Secretary, to
attend the meetings of the board of directors of any assisted
institution that became an assisted institution on or after October 3,
2008, and any committees of such board of directors, while any
assistance under this title is outstanding.''.
(b) Repeal of De Minimis Exception.--Section 111(c) of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5221(c)) is
amended by striking ``and only where such purchases per financial
institution in the aggregate exceed $300,000,000 (including direct
purchases),''.
SEC. 103. NEW LENDING BY INSURED DEPOSITORY INSTITUTIONS THAT IS
ATTRIBUTABLE TO TARP INVESTMENTS AND ASSISTANCE.
Section 7(a) of the Federal Deposit Insurance Act (U.S.C. 1817(a))
is amended by adding at the end the following new paragraph:
``(12) Lending increases attributable to investment or
other assistance under the troubled assets relief program.--
``(A) In general.--Each report of condition filed
pursuant to this subsection by an insured depository
institution which received an investment or other
assistance under the Troubled Assets Relief Program
established by the Emergency Economic Stabilization Act
of 2008 or section 136(d) of the Energy Independence
and Security Act of 2007 shall report the amount of any
increase in new lending in the period covered by such
report (or the amount of any reduction in any decrease
in new lending) that is attributable to such investment
or assistance, to the extent possible.
``(B) Alternative measure.--If an insured
depository institution that is subject to subparagraph
(A) cannot accurately quantify the effect that an
investment or other assistance under such Troubled
Assets Relief Program has had on new lending by the
institution, the insured depository institution shall
report the total amount of the increase in new lending,
if any, in the period covered by such report.
``(C) Designation of reporting requirement.--The
Federal banking agencies and the Secretary of the
Treasury shall specify the form, content, and manner of
reports required under this paragraph.''.
SEC. 104. OTHER PROTECTIONS FOR THE TAXPAYER.
(a) Warrant Requirements.--Subsection (d) of section 113 of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5223(d)) is
amended by striking paragraph (1) and inserting the following new
paragraph:
``(1) Warrants.--
``(A) In general.--The Secretary may not provide
any assistance under this title to any institution,
unless the Secretary, receives from the institution--
``(i) in the case of an institution the
securities of which are traded on a national
securities exchange, a warrant giving the right
to the Secretary to receive nonvoting common
stock or preferred stock in such institution,
or voting stock, with respect to which the
Secretary agrees not to exercise voting power,
whichever the Secretary determines appropriate;
or
``(ii) in the case of an institution other
than one described in clause (i), a warrant for
common or preferred stock, or an instrument
that is the economic equivalent (as determined
by the Secretary) of such a warrant in the
financial institution (in the case of a mutual
association), holding company of the financial
institution, or any company that controls a
majority stake in the financial institution,
whichever the Secretary determines appropriate.
``(B) Amount.--
``(i) In general.--The warrants or
instruments described in subparagraph (A) with
respect to an assisted institution shall have a
value equal to 15 percent of the aggregate
amount of all assistance provided to the
institution under this title. Such warrants or
instruments shall entitle the Government to
purchase--
``(I) nonvoting common stock, up to
a maximum amount of 15 percent of the
issued and outstanding common stock of
--
``(aa) the assisted
institution; or
``(bb) in the case of an
assisted institution, the
securities of which are not
traded on a national securities
exchange, a holding company or
company that controls a
majority of the stock thereof
(in this section referred to as
the `warrant common'); and
``(II) preferred stock having an
aggregate liquidation preference equal
to 15 percent of such aggregate loan
amount, less the value of common stock
available for purchase under the
warrant common (in this section
referred to as the `warrant
preferred').
``(ii) Common stock warrant price.--The
exercise price on a warrant or instrument
described in paragraph (1) shall be--
``(I) the 15-day trailing average,
as of 1 day prior to the date on which
any commitment to provide assistance
under this title was entered into, of
the market price of the common stock of
the assisted institution; or
``(II) in the case of an assisted
institution, which is a mutual
association or the securities of which
are not traded on a national securities
exchange, the economic equivalent of
the market price described in clause
(I), as determined by the Secretary.
``(iii) Terms of preferred stock warrant.--
``(I) In general.--The initial
exercise price for the preferred stock
warrant shall be $0.01 per share or
such greater amount as the corporate
charter may require as the par value
per share of the warrant preferred. The
Government shall have the right to
immediately exercise the warrants.
``(II) Redemption.--The warrant
preferred may be redeemed at any time
after exercise of the preferred stock
warrant at 100 percent of its issue
price, plus any accrued and unpaid
dividends.''.
(b) Repeal of Certain Exception.--Section 113(d)(3) of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5223(d)(3)) is
amended by striking subparagraph (A).
(c) Technical and Conforming Amendments.--Section 113(d)(2) of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 2553(d)) is
amended by striking subparagraph (E).
SEC. 105. AVAILABILITY OF TARP FUNDS TO SMALLER COMMUNITY INSTITUTIONS.
(a) Prompt Action.--The Secretary shall promptly take all necessary
actions to make available funds under title I of the Emergency Economic
Stabilization Act of 2008 to smaller community financial institutions.
(b) Comparable Terms.--If any institution becomes an assisted
institution after the date of the enactment of this Act, such funding
for depository institutions that--
(1) have submitted applications on which no action has been
taken, such as institutions that are C corporations (including
privately held institutions) and community development
financial institutions; or
(2) are of a type for which the Secretary has not yet
established an application deadline or for which any such
deadline has not yet occurred as of the date of the enactment
of this Act, such as institutions that are non-stock
corporations, S-corporations, mutually-owned insured depository
institutions (as defined in section 3 of the Federal Deposit
Insurance Act),
shall receive such funding on terms comparable to the terms applicable
to institutions that received funding prior to the date of the
enactment of this Act.
(c) Definitions.--For purposes of this section, the terms ``S
Corporation'' and ``C Corporation'' shall have the same meaning given
to those terms in section 1361(a) of the Internal Revenue Code of 1986.
SEC. 106. INCREASE IN SIZE AND AUTHORITY OF FINANCIAL STABILITY
OVERSIGHT BOARD.
(a) Authority.--Section 104 of the Emergency Economic Stabilization
Act of 2008 (12 U.S.C. 2514) is amended--
(1) by redesignating subsections (g) and (h) as subsections
(h) and (i), respectively; and
(2) by inserting after subsection (f) the following new
subsection:
``(g) Review and Decisionmaking.--After conducting any review under
this section of a policy determination made by the Secretary, the
Financial Stability Oversight Board may overturn any such policy
determination by a \2/3\ vote of all members of such board.''.
(b) Appointment of 3 Additional Members.--Section 104(b) of the
Emergency Economic Stabilization Act of 2008 (12 U.S.C. 2514(b)) is
amended--
(1) by striking ``and'' at the end of paragraph (4);
(2) by striking the period at the end of paragraph (5) and
inserting a semicolon; and
(3) by adding at the end the following new paragraphs:
``(6) the Chairperson of the Board of Directors of the
Federal Deposit Insurance Corporation; and
``(7) 2 members appointed by the President, by and with the
consent of the Senate, from among individuals who are not
officers or employees of the United States Government.''.
SEC. 107. CLARIFICATION.
Section 101 of the Emergency Economic Stabilization Act of 2008 (12
U.S.C. 2514(b)) is amended by adding at the end the following new
subsection:
``(f) Clarification.--Any provision of capital to, purchase of
equity in, or assistance provided to any institution under this title
shall be considered to be a purchase of troubled assets for purposes of
this title.''.
TITLE II--FORECLOSURE RELIEF
SEC. 201. TARP FORECLOSURE MITIGATION PLAN AND IMPLEMENTATION.
(a) Plan Required.--Notwithstanding any provision of title I of the
Emergency Economic Stabilization Act of 2008, none of the funds
otherwise available to the Secretary of the Treasury (in this title
referred to as the ``Secretary'') pursuant to section 115(a)(3) of such
Act shall be available to the Secretary after March 15, 2009, unless a
comprehensive plan to prevent and mitigate foreclosures on residential
properties, in accordance with the requirements of this title, has been
developed by the Secretary and approved by the Financial Stability
Oversight Board by such date.
(b) Commitment of Resources.--The comprehensive plan established
pursuant to subsection (a) shall require the commitment of funds made
available to the Secretary under title I of the Emergency Economic
Stabilization Act of 2008 in an amount up to $100,000,000,000, but in
no case less than $40,000,000,000.
(c) Implementation Required.--The Secretary shall begin committing
funds available to the Secretary under title I of the Emergency
Economic Stabilization Act of 2008 to implement the comprehensive plan
established pursuant to subsection (a) by not later than April 1, 2009.
(d) Certification.--If by May 1, 2009, the Secretary does not
commit more than the minimum of $40,000,000,000 as required under
subsection (b), the Secretary shall certify to the Congress, no later
than May 15, 2009, the specific reasons that such additional funds have
not been committed.
SEC. 202. ELEMENTS OF PLAN.
(a) Required Elements.--The comprehensive plan established pursuant
to section 201(a) shall comply with the following requirements:
(1) Owner-occupied residences only.--The programs
implemented under the plan shall prevent and mitigate
foreclosures specifically on owner-occupied residential
properties.
(2) Leveraging of private capital.--The plan shall leverage
private capital to the maximum extent possible consistent with
the purpose of preventing and mitigating foreclosures on such
properties.
(3) Use of program alternatives.--The actions to be taken
under the plan shall consist of one, or a combination of more
than one, of the program alternatives set forth in section 203.
(b) Concentrations of Foreclosures.--The comprehensive plan
established pursuant to section 201(a) may include provisions designed
to prevent and mitigate foreclosures on residential properties located
in areas that are most seriously affected by such foreclosures.
SEC. 203. PROGRAM ALTERNATIVES.
The program alternatives set forth in this section are as follows:
(1) Systematic loan modification program.--The systematic
foreclosure prevention and mortgage modification program under
section 204.
(2) Reduction of hope for homeowners program costs.--A
program under which the Secretary--
(A) provides coverage for fees under the HOPE for
Homeowners Program under section 257 of the National
Housing Act (12 U.S.C. 1715z-23), as amended by title V
of this Act; or
(B) ensures the affordability of interest rates of
mortgages insured under such Program.
(3) Buy-down of second lien mortgages.--A program under
which the Secretary makes available to owners of owner-occupied
residential properties a direct mortgage loan the proceeds of
which shall be used only to reduce the outstanding debt of such
owner under an existing second lien mortgage on such
residential property, for the purpose of facilitating loan
modification, subject to such reductions in the principal of
such existing second lien mortgages as the Secretary may
require.
(4) Servicer incentives and assistance.--A program under
which the Secretary may make payments to servicers who
implement modifications to mortgages that result in mortgages
that meet such requirements as the Secretary shall establish.
(5) Loan purchases.--A program under which the Secretary,
or one or more entities that the Secretary, in consultation
with the Secretary of Housing and Urban Development, enters
into a contract with to carry out the program under this
paragraph, which may include the Federal Deposit Insurance
Corporation and entities selected as contractors under section
107 of the Emergency Economic Stabilization Act of 2008,
purchases whole loans for the purpose of modifying or
refinancing the loans.
SEC. 204. SYSTEMATIC FORECLOSURE PREVENTION AND MORTGAGE MODIFICATION
PLAN ESTABLISHED.
(a) In General.--The systematic foreclosure prevention and mortgage
modification program under this section shall be a program established
by the Secretary, in consultation with the Chairperson of the Board of
Directors of the Federal Deposit Insurance Corporation and the
Secretary of Housing and Urban Development, that--
(1) provides lenders and loan servicers with certain
compensation to cover administrative costs for each loan
modified according to the required standards; and
(2) provides loss sharing or guarantees for certain losses
incurred if a modified loan should subsequently re-default.
(b) Program Administration.--The Secretary, in consultation with
the Secretary of Housing and Urban Development, may contract with one
or more entities, including the Federal Deposit Insurance Corporation
and entities selected as contractors under section 107 of the Emergency
Economic Stabilization Act of 2008, to conduct the program activities
required under the program under this section.
(c) Program Components.--The program established under subsection
(a) may include the following components:
(1) Eligible borrowers.--The program shall be limited to
loans secured by owner-occupied properties.
(2) Exclusion for early payment default.--To promote
sustainable mortgages, loss sharing or guarantees shall be
available only after the borrower has made a specified minimum
number of payments on the modified mortgage.
(3) Standard net present value test.--In order to promote
consistency and simplicity in implementation and audit, the
Secretary shall prescribe a standardized net present value
analysis for participating lenders and servicers comparing the
expected net present value of modifying past due loans compared
to the net present value of foreclosing on them will be
applied. Under this test, standard assumptions shall be used to
ensure that a consistent standard for affordability is provided
based on a ratio of the borrower's mortgage-related expenses
for the first priority mortgage-to-gross income specified by
the Secretary.
(4) Systematic loan review by participating lenders and
servicers.--Participating lenders and servicers shall be
required to undertake a systematic review of all of the loans
under their management, to subject each loan to a standard net
present value test to determine whether it is a suitable
candidate for modification, and to offer modifications for all
loans that pass this test. The penalty for failing to undertake
such a systematic review and to carry out modifications where
they are justified would be disqualification from further
participation in the program until such a systematic program
was introduced.
(5) Modifications.--Modifications may include any of the
following:
(A) Reduction in interest rates and fees.
(B) Term or amortization extensions.
(C) Forbearance or forgiveness of principal.
(D) Other similar modifications.
(6) Simplified loss share calculation.--In order to ensure
the administrative efficiency and effective operation of the
program, the Secretary shall define appropriate measures for
loss sharing or guarantees designed to reduce the risk and loss
upon redefault of modified mortgages in order to provide
adequate incentives to lenders, servicers, and investors to
modify eligible mortgages and avoid unnecessary foreclosures.
Interim modifications shall be allowed.
(7) De minimis test.--To lower administrative costs, a de
minimis test shall be used to exclude from loss sharing any
modification that does not lower the monthly payment at least
10 percent.
(8) 8 year limit on loss sharing payment.--The loss sharing
guarantee shall terminate at the end of the 8-year period
beginning on the date the modification was consummated.
(d) Alternative Components.--The Secretary may, with the approval
of the Board, implement foreclosure prevention and mitigation actions
other than those included pursuant to subsection (c) in the
comprehensive plan initially approved by the Board pursuant to section
201(a) that the Secretary believes would provide equivalent or greater
impact on foreclosure mitigation.
(e) Regulations.--The Secretary shall prescribe such regulations as
may be necessary to implement this section and prevent evasions
thereof.
(f) Troubled Assets.--The costs incurred by the Federal Government
in carrying out the loan modification program established under this
section shall be covered out of the funds made available to the
Secretary of the Treasury under section 118 of the Emergency Economic
Stabilization Act of 2008 or such other funds as may be available to
the Secretary.
(g) Report.--Before the end of the 6-month period beginning on the
date of the enactment of this Act, the Secretary shall submit a
progress report to the Congress containing such findings and such
recommendations for legislative or administrative action as the
Secretary may determine to be appropriate.
SEC. 204. MODIFICATION OF PLAN.
(a) In General.--If the Secretary, in consultation with the
Chairperson of the Board of Directors of the Federal Deposit Insurance
Corporation and the Secretary of Housing and Urban Development,
determines at any time that modification of the comprehensive plan
initially approved by the Board pursuant to section 201(a) (as such
plan may subsequently have been modified pursuant to this section), or
that modification of any component program element, is necessary to
maximize the prevention of foreclosures on residential properties or
minimize costs to taxpayers of such foreclosure mitigation, the
Secretary may modify the plan or program element, but only to the
extent such modifications are approved by the Board.
SEC. 205. SERVICER SAFE HARBOR.
(a) Safe Harbor.--
(1) Loan modifications and workout plans.--Notwithstanding
any other provision of law, and notwithstanding any investment
contract between a servicer and a securitization vehicle or
investor, a servicer that acts consistent with the duty set
forth in section 129A(a) of Truth in Lending Act (15 U.S.C.
1639a) shall not be liable for entering into a loan
modification or workout plan with respect to any such mortgage
that meets all of the criteria set forth in paragraph (2)(B)
to--
(A) any person, based on that person's ownership of
a residential mortgage loan or any interest in a pool
of residential mortgage loans or in securities that
distribute payments out of the principal, interest and
other payments in loans on the pool;
(B) any person who is obligated to make payments
determined in reference to any loan or any interest
referred to in subparagraph (A); or
(C) any person that insures any loan or any
interest referred to in subparagraph (A) under any law
or regulation of the United States or any law or
regulation of any State or political subdivision of any
State.
(2) Ability to modify mortgages.--
(A) Ability.--Notwithstanding any other provision
of law, and notwithstanding any investment contract
between a servicer and a securitization vehicle or
investor, a servicer--
(i) shall not be limited in the ability to
modify mortgages, the number of mortgages that
can be modified, the frequency of loan
modifications, or the range of permissible
modifications; and
(ii) shall not be obligated to repurchase
loans from or otherwise make payments to the
securitization vehicle on account of a
modification, workout, or other loss mitigation
plan for a residential mortgage or a class of
residential mortgages that constitute a part or
all of the mortgages in the securitization
vehicle,
if any mortgage so modified meets all of the criteria
set forth in subparagraph (B).
(B) Criteria.--The criteria under this subparagraph
with respect to a mortgage are as follows:
(i) Default on the payment of such mortgage
has occurred or is reasonably foreseeable.
(ii) The property securing such mortgage is
occupied by the mortgagor of such mortgage.
(iii) The servicer reasonably and in good
faith believes that the anticipated recovery on
the principal outstanding obligation of the
mortgage under the particular modification or
workout plan or other loss mitigation action
will exceed, on a net present value basis, the
anticipated recovery on the principal
outstanding obligation of the mortgage to be
realized through foreclosure.
(3) Applicability.--This subsection shall apply only with
respect to modifications, workouts, and other loss mitigation
plans initiated before January 1, 2012.
(b) Legal Costs.--If an unsuccessful action is brought against a
servicer by any person described in subparagraph (A), (B), or (C) of
subsection (a)(1), such person shall bear any actual legal costs of the
servicer, including reasonable attorney fees and expert witness fees,
incurred in good faith in such action, as determined by the court.
(c) Reporting.--Each servicer that engages in loan modifications or
workout plans subject to the safe harbor in subsection (a) shall report
to the Secretary on a regular basis regarding the extent, scope and
results of the servicer's modification activities. The Secretary shall
prescribe regulations specifying the form, content, and timing of such
reports.
(d) Definition of Securitization Vehicles.--For purposes of this
section, the term ``securitization vehicle'' means a trust,
corporation, partnership, limited liability entity, special purpose
entity, or other structure that--
(1) is the issuer, or is created by the issuer, of mortgage
pass-through certificates, participation certificates,
mortgage-backed securities, or other similar securities backed
by a pool of assets that includes residential mortgage loans;
and
(2) holds such mortgages.
SEC. 206. REPORT BY CONGRESSIONAL OVERSIGHT PANEL.
The Congressional Oversight Panel established by section 125 of the
Emergency Economic Stabilization Act of 2008 shall submit a report to
the Congress, not later than July 1, 2009, regarding--
(1) the actions taken by the Secretary pursuant to this
title;
(2) the impact and effectiveness of such actions on
foreclosures on residential properties; and
(3) the effectiveness of such actions from the standpoint
of minimizing costs to the taxpayers.
TITLE III--AUTO INDUSTRY FINANCING AND RESTRUCTURING
SEC. 301. SHORT TITLE.
This title may be cited as the ``TARP Reform and Accountability Act
of 2009''.
SEC. 302. DIRECT LOAN PROVISIONS.
(a) In General.--The Emergency Economic Stabilization Act of 2008
(division A of Public Law 110-343) is amended by adding at the end the
following:
``TITLE IV--AUTO INDUSTRY FINANCING AND RESTRUCTURING
``SEC. 401. PURPOSES.
``The purposes of this title are--
``(1) to clarify and confirm the authority and facilities
to restore liquidity and stability to domestic vehicle
manufacturers in the United States; and
``(2) to ensure that such authority and such facilities are
used in a manner that--
``(A) results in a viable and competitive domestic
automobile industry that minimizes adverse effects on
the environment;
``(B) enhances the ability and the capacity of the
domestic automobile industry to pursue the timely and
aggressive production of energy-efficient advanced
technology vehicles;
``(C) preserves and promotes the jobs of American
workers employed directly by the domestic automobile
industry and in related industries;
``(D) safeguards the ability of the domestic
automobile industry to provide retirement and health
care benefits for the industry's retirees and their
dependents; and
``(E) stimulates manufacturing and sales of
automobiles produced by automobile manufacturers in the
United States.
``SEC. 402. PRESIDENTIAL DESIGNATION.
``(a) Designation.--The President shall designate one or more
officers from the Executive Branch having appropriate expertise in such
areas as economic stabilization, financial aid to commerce and
industry, financial restructuring, energy efficiency, and environmental
protection (who shall hereinafter in this title be collectively
referred to as the `President's designee') to carry out the purposes of
this title, including the facilitation of restructuring necessary to
achieve the long-term financial viability of domestic automobile
manufacturers, who shall serve at the pleasure of the President.
``(b) Additional Persons.--The President or the President's
designee may also employ, appoint, or contract with additional persons
having such expertise as the President or the President's designee
believes will assist the Government in carrying out the purposes of
this title.
``(c) Participation by Other Agency Personnel.--Other Federal
agencies may provide, at the request of the President's designee, staff
on detail from such agencies for purposes of carrying out this title.
``SEC. 403. BRIDGE FINANCING.
``(a) In General.--The President's designee shall authorize and
direct the disbursement of bridge loans or enter into commitments for
lines of credit to each automobile manufacturer that submitted a plan
to the Congress on December 2, 2008 (hereafter in this title referred
to as an `eligible automobile manufacturer'), and has submitted a
request for such loan or commitment. Nothing in this section shall
preclude the President's designee from authorizing and directing the
disbursement of bridge loans or entering into commitments for lines of
credit to other entities.
``(b) Amount of Assistance.--The President's designee shall
authorize bridge loans or commitments for lines of credit to each
eligible automobile manufacturer in an amount that is intended to
facilitate the continued operations of the eligible automobile
manufacturer and to prevent the failure of the eligible automobile
manufacturer, consistent with the plan submitted on December 2, 2008,
and subject to available funds.
``SEC. 404. RESTRUCTURING PROGRESS ASSESSMENT.
``(a) Establishment of Measures for Assessing Progress.--Not later
than February 1, 2009, the President's designee shall determine
appropriate measures for assessing the progress of each eligible
automobile manufacturer toward transforming the plan submitted by such
manufacturer to the Congress on December 2, 2008, into the
restructuring plan to be submitted under section 405(b).
``(b) Evaluation of Progress on Basis of Restructuring Progress
Assessment Measures.--
``(1) In general.--The President's designee shall evaluate
the progress of each eligible automobile manufacturer toward
the development of a restructuring plan, on the basis of the
restructuring progress assessment measures established under
this section for such manufacturer.
``(2) Timing.--Each evaluation required under paragraph (1)
for any eligible automobile manufacturer shall be conducted at
the end of the 15-day period beginning on the date on which the
restructuring progress assessment measures were established by
the President's designee for such eligible automobile
manufacturer.
``SEC. 405. SUBMISSION OF PLANS.
``(a) Negotiated Plans.--
``(1) Facilitation.--
``(A) In general.--Beginning on the date of any
disbursement under the facility, the President's
designee shall seek to facilitate agreement on any
restructuring plan to achieve and sustain the long-term
viability, international competitiveness, and energy
efficiency of an eligible automobile manufacturer,
negotiated and agreed to by representatives of
interested parties (in this title referred to as a
`negotiated plan') with respect to any eligible
automobile manufacturer.
``(B) Interested parties.--For purposes of this
section, the term `interested party' shall be construed
broadly so as to include all persons who have a direct
financial interest in a particular automobile
manufacturer, including--
``(i) employees and retirees of the
eligible automobile manufacturer;
``(ii) trade unions;
``(iii) creditors;
``(iv) suppliers;
``(v) automobile dealers; and
``(vi) shareholders.
``(2) Actions of the president's designee.--
``(A) In general.--For the purpose of achieving a
negotiated plan, the President's designee may convene,
chair, and conduct formal and informal meetings,
discussions, and consultations, as appropriate, with
interested parties of an eligible automobile
manufacturer.
``(B) Clarification.--The Federal Advisory
Committee Act shall not apply with respect to any of
the activities conducted or taken by the President's
designee pursuant to this title.
``(b) Restructuring Plan.--Not later than March 31, 2009, each
eligible automobile manufacturer shall submit to the President's
designee a restructuring plan to achieve and sustain the long-term
viability, international competitiveness, and energy efficiency of the
eligible automobile manufacturer (in this title referred to as the
`restructuring plan') in accordance with this section. The President's
designee shall approve the restructuring plan if the President's
designee determines that the plan will result in--
``(1) the repayment of all Government-provided financing,
consistent with the terms specified in section 408, or
otherwise agreed to;
``(2) the ability--
``(A) to comply with applicable fuel efficiency and
emissions requirements;
``(B) to commence domestic manufacturing of
advanced technology vehicles, as described in section
136 of the Energy Independence and Security Act of 2007
(Public Law 110-140; 42 U.S.C. 17013); and
``(C) to produce new and existing products and
capacity;
``(3) the achievement of a positive net present value,
using reasonable assumptions and taking into account all
existing and projected future costs, including repayment of any
financial assistance provided pursuant to this title;
``(4) the ability to rationalize costs, capitalization, and
capacity with respect to the manufacturing workforce,
suppliers, and dealerships of the eligible automobile
manufacturer;
``(5) proposals to restructure existing debt, including,
where appropriate, the conversion of debt to equity, to improve
the ability of the eligible automobile manufacturer to raise
private capital; and
``(6) a product mix and cost structure that is competitive
in the marketplace.
``(c) Extension of Negotiations and Plan Deadline.--Notwithstanding
the time limitations in subsection (b), the President's designee, upon
making a determination that the interested parties are negotiating in
good faith, are making significant progress, and that an additional
period of time would likely facilitate agreement on a negotiated plan,
and upon notification of the Congress, may extend for not longer than
30 additional days the negotiation period under subsection (b).
``SEC. 406. FINANCING FOR RESTRUCTURING.
``Upon approval by the President's designee of a restructuring
plan, the President's designee may provide financial assistance to an
eligible automobile manufacturer to implement the restructuring plan.
``SEC. 407. DISAPPROVAL AND CALL OF LOAN.
``If the President's designee has not approved the restructuring
plan at the expiration of the period provided in section 405 for
submission and approval of the restructuring plan, the President's
designee shall call the loan or cancel the commitment within 30 days,
unless a restructuring plan is approved within that period.
``SEC. 408. TERMS AND CONDITIONS.
``(a) Duration.--The duration of any loan made under this title
shall be 7 years, or such period as the President's designee may
determine with respect to such loan.
``(b) No Prepayment Penalty.--A loan made under this title shall be
prepayable without penalty at any time.
``(c) Information Access.--As a condition for the receipt of any
financial assistance made under this title, an eligible automobile
manufacturer shall agree--
``(1) to allow the President's designee to examine any
books, papers, records, or other data of the eligible
automobile manufacturer, and those of any subsidiary,
affiliate, or entity holding an ownership interest of 50
percent or more of such automobile manufacturer, that may be
relevant to the financial assistance, including compliance with
the terms of a loan or any conditions imposed under this title;
and
``(2) to provide in a timely manner any information
requested by the President's designee, including requiring any
officer or employee of the eligible automobile manufacturer,
any subsidiary, affiliate, or entity referred to in paragraph
(1) with respect to such manufacturer, or any person having
possession, custody, or care of the reports and records
required under paragraph (1), to appear before the President's
designee at a time and place requested and to provide such
books, papers, records, or other data, as requested, as may be
relevant or material.
``(d) Oversight of Transactions and Financial Condition.--
``(1) Duty to inform.--During the period in which any loan
extended under this title remains outstanding, the eligible
automobile manufacturer which received such loan shall promptly
inform the President's designee of--
``(A) any asset sale, investment, contract,
commitment, or other transaction proposed to be entered
into by such eligible automobile manufacturer that has
a value in excess of $100,000,000; and
``(B) any other material change in the financial
condition of such eligible automobile manufacturer.
``(2) Authority of the president's designee.--During the
period in which any loan extended under this title remains
outstanding, the President's designee may--
``(A) review any asset sale, investment, contract,
commitment, or other transaction described in paragraph
(1); and
``(B) prohibit the eligible automobile manufacturer
which received the loan from consummating any such
proposed sale, investment, contract, commitment, or
other transaction, if the President's designee
determines that consummation of such transaction would
be inconsistent with or detrimental to the long-term
viability of the eligible automobile manufacturer.
``(3) Procedures.--The President's designee may establish
procedures for conducting any review under this subsection.
``(e) Consequences for Failure To Comply.--The terms of any
financial assistance made under this title shall provide that if--
``(1) an evaluation by the President's designee under
section 404(b) demonstrates that the eligible automobile
manufacturer which received the financial assistance has failed
to make adequate progress towards meeting the restructuring
progress assessment measures established by the President's
designee under section 404(a) with respect to such recipient;
``(2) after March 31, 2009, the eligible automobile
manufacturer which received the financial assistance fails to
submit an acceptable restructuring plan under section 405(b),
or fails to comply with any conditions or requirement
applicable under this title or applicable fuel efficiency and
emissions requirements; or
``(3) after a restructuring plan of an eligible automobile
manufacturer has been approved by the President's designee, the
auto manufacturer fails to make adequate progress in the
implementation of the plan, as determined by the President's
designee,
the repayment of any loan may be accelerated to such earlier date or
dates as the President's designee may determine and any other financial
assistance may be cancelled by the President's designee.
``SEC. 409. TAXPAYER PROTECTION.
``(a) Warrants.--
``(1) In general.--The President's designee may not provide
any loan under this title, unless the President's designee, or
such department or agency as is designated for such purpose by
the President, receives from the eligible automobile
manufacturer--
``(A) in the case of an eligible automobile
manufacturer, the securities of which are traded on a
national securities exchange, a warrant giving the
right to the President's designee to receive nonvoting
common stock or preferred stock in such eligible
automobile manufacturer, or voting stock, with respect
to which the President's designee agrees not to
exercise voting power, whichever the President's
designee determines appropriate; or
``(B) in the case of an eligible automobile
manufacturer other than one described in subparagraph
(A), a warrant for common or preferred stock, or an
instrument that is the economic equivalent (as
determined by the President's designee) of such a
warrant in the holding company of the eligible
automobile manufacturer, or any company that controls a
majority stake in the eligible automobile manufacturer,
whichever the President's designee determines
appropriate.
``(2) Amount.--
``(A) In general.--The warrants or instruments
described in paragraph (1) shall have a value equal to
20 percent of the aggregate amount of all loans
provided to the eligible automobile manufacturer under
this title. Such warrants or instruments shall entitle
the Government to purchase--
``(i) nonvoting common stock, up to a
maximum amount of 20 percent of the issued and
outstanding common stock of--
``(I) the eligible automobile
manufacturer; or
``(II) in the case of an eligible
automobile manufacturer, the securities
of which are not traded on a national
securities exchange, a holding company
or company that controls a majority of
the stock thereof (in this section
referred to as the `warrant common');
and
``(ii) preferred stock having an aggregate
liquidation preference equal to 20 percent of
such aggregate loan amount, less the value of
common stock available for purchase under the
warrant common (in this section referred to as
the `warrant preferred').
``(B) Common stock warrant price.--The exercise
price on a warrant or instrument described in paragraph
(1) shall be--
``(i) the 15-day trailing average, as of
the day before the date on which any commitment
to provide a loan was entered into, of the
market price of the common stock of the
eligible automobile manufacturer which received
any loan under this title; or
``(ii) in the case of an eligible
automobile manufacturer, the securities of
which are not traded on a national securities
exchange, the economic equivalent of the market
price described in clause (i), as determined by
the President's designee.
``(C) Terms of preferred stock warrant.--
``(i) In general.--The initial exercise
price for the preferred stock warrant shall be
$0.01 per share or such greater amount as the
corporate charter may require as the par value
per share of the warrant preferred. The
Government shall have the right to immediately
exercise the warrants.
``(ii) Redemption.--The warrant preferred
may be redeemed at any time after exercise of
the preferred stock warrant at 100 percent of
its issue price, plus any accrued and unpaid
dividends.
``(iii) Other terms and conditions.--Other
terms and conditions of the warrant preferred
shall be determined by the President's designee
to protect the interests of taxpayers.
``(3) Application of other provisions of law.--Except as
otherwise provided in this section, the requirements for the
purchase of warrants under section 113(d)(2) of the Emergency
Economic Stabilization Act of 2008 (division A of Public Law
110-343) shall apply to any warrant or instrument described in
paragraph (1), including the antidilution protection provisions
therein.
``(b) Executive Compensation and Corporate Governance.--
``(1) In general.--During the period in which any financial
assistance under this title remains outstanding, the eligible
automobile manufacturer which received such assistance shall be
subject to--
``(A) the standards established by the President's
designee under paragraph (2); and
``(B) the provisions of section 162(m)(5) of the
Internal Revenue Code of 1986, as applicable.
``(2) Standards required.--The President's designee shall
require any eligible automobile manufacturer which received any
financial assistance under this title to meet appropriate
standards for executive compensation and corporate governance.
``(3) Specific requirements.--The standards established
under paragraph (2) shall include--
``(A) limits on compensation that exclude
incentives for senior executive officers of an eligible
automobile manufacturer which received assistance under
this title to take unnecessary and excessive risks that
threaten the value of such manufacturer during the
period that the loan is outstanding;
``(B) a provision for the recovery by such
automobile manufacturer of any bonus or incentive
compensation paid to a senior executive officer based
on statements of earnings, gains, or other criteria
that are later found to be materially inaccurate;
``(C) a prohibition on such automobile manufacturer
making any golden parachute payment to a senior
executive officer during the period that the loan is
outstanding;
``(D) a prohibition on such automobile manufacturer
paying or accruing any bonus or incentive compensation
during the period that the loan is outstanding to the
25 most highly-compensated employees; and
``(E) a prohibition on any compensation plan that
would encourage manipulation of such automobile
manufacturer's reported earnings to enhance the
compensation of any of its employees.
``(4) Divestiture.--During the period in which any
financial assistance provided under this title to any eligible
automobile manufacturer is outstanding, the eligible automobile
manufacturer may not own or lease any private passenger
aircraft, or have any interest in such aircraft, except that
such eligible automobile manufacturer shall not be treated as
being in violation of this provision with respect to any
aircraft or interest in any aircraft that was owned or held by
the manufacturer immediately before receiving such assistance,
as long as the recipient demonstrates to the satisfaction of
the President's designee that all reasonable steps are being
taken to sell or divest such aircraft or interest.
``(5) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Senior executive officer.--The term `senior
executive officer' means an individual who is one of
the top five most highly paid executives of a public
company, whose compensation is required to be disclosed
pursuant to the Securities Exchange Act of 1934, and
any regulations issued thereunder, and non-public
company counterparts.
``(B) Golden parachute payment.--The term `golden
parachute payment' means any payment to a senior
executive officer for departure from a company for any
reason, except for payments for services performed or
benefits accrued.
``(c) Prohibition on Payment of Dividends.--Except with respect to
obligations owed pursuant to law to any nonaffiliated party or any
existing contract with any nonaffiliated party in effect as of December
2, 2008, no dividends or distributions of any kind, or the economic
equivalent thereof (as determined by the President's designee), may be
paid by any eligible automobile manufacturer which receives financial
assistance under this title, or any holding company or company that
controls a majority stake in the eligible automobile manufacturer,
while such financial assistance is outstanding.
``(d) Other Interests Subordinated.--
``(1) In general.--In the case of an eligible automobile
manufacturer which received a loan under this title, to the
extent permitted by the terms of any obligation, liability, or
debt of the eligible automobile manufacturer in effect as of
December 2, 2008, any other obligation of such eligible
automobile manufacturer shall be subordinate to such loan, and
such loan shall be senior and prior to all obligations,
liabilities, and debts of the eligible automobile manufacturer,
and such eligible automobile manufacturer shall provide to the
Government, all available security and collateral against which
the loans under this title shall be secured.
``(2) Applicability in certain cases.--In the case of an
eligible automobile manufacturer referred to in paragraph (1),
the securities of which are not traded on a national securities
exchange, a loan under this title to the eligible automobile
manufacturer shall--
``(A) be treated as a loan to any holding company
of, or company that controls a majority stake in, the
eligible automobile manufacturer; and
``(B) be senior and prior to all obligations,
liabilities, and debts of any such holding company or
company that controls a majority stake in the eligible
automobile manufacturer.
``(e) Additional Taxpayer Protections.--
``(1) Discharge.--A discharge under title 11, United States
Code, shall not discharge an eligible automobile manufacturer,
or any successor in interest thereto, from any debt for
financial assistance received pursuant to this title.
``(2) Exemption.--Any financial assistance provided to an
eligible automobile manufacturer under this title shall be
exempt from the automatic stay established by section 362 of
title 11, United States Code.
``(3) Interested parties.--Notwithstanding any provision of
title 11, United States Code, any interest in property or
equity rights of the United States arising from financial
assistance provided to an eligible automobile manufacturer
under this title shall remain unaffected by any plan of
reorganization, except as the United States may agree to in
writing.
``SEC. 410. OVERSIGHT AND AUDITS.
``(a) Comptroller General Oversight.--
``(1) Scope of oversight.--The Comptroller General of the
United States shall conduct ongoing oversight of the activities
and performance of the President's designee.
``(2) Conduct and administration of oversight.--
``(A) GAO presence.--The President's designee shall
provide to the Comptroller General appropriate space
and facilities for purposes of this subsection.
``(B) Access to records.--To the extent otherwise
consistent with law, the Comptroller General shall have
access, upon request, to any information, data,
schedules, books, accounts, financial records, reports,
files, electronic communications, or other papers,
things, or property belonging to or in use by the
President's designee, at such reasonable time as the
Comptroller General may request. The Comptroller
General shall be afforded full facilities for verifying
transactions with the balances or securities held by
depositaries, fiscal agents, and custodians. The
Comptroller General may make and retain copies of such
books, accounts, and other records as the Comptroller
General deems appropriate.
``(3) Reporting.--The Comptroller General shall submit
reports of findings under this section to Congress, regularly
and not less frequently than once every 60 days. The
Comptroller General may also submit special reports under this
subsection, as warranted by the findings of its oversight
activities.
``(b) Special Inspector General.--It shall be the duty of the
Special Inspector General established under section 121 of Public Law
110-343 to conduct, supervise, and coordinate audits and investigations
of the President's designee in addition to the duties of the Special
Inspector General under such section and for such purposes. The Special
Inspector General shall also have the duties, responsibilities, and
authorities of inspectors general under the Inspector General Act of
1978, including section 6 of such Act. In the event that the Office of
the Special Inspector General is terminated, the Inspector General of
the Department of the Treasury shall assume the responsibilities of the
Special Inspector General under this subsection.
``(c) Access to Records of Borrowers by GAO.--Notwithstanding any
other provision of law, during the period in which any financial
assistance provided under this title is outstanding, the Comptroller
General of the United States shall have access, upon request, to any
information, data, schedules, books, accounts, financial records,
reports, files, electronic communications, or other papers, things, or
property belonging to or in use by the eligible automobile
manufacturer, and any subsidiary, affiliate, or entity holding an
ownership interest of 50 percent or more of such eligible automobile
manufacturer (collectively referred to in this section as `related
entities'), and to any officer, director, or other agent or
representative of the eligible automobile manufacturer and its related
entities, at such reasonable times as the Comptroller General may
request. The Comptroller General may make and retain copies of such
books, accounts, and other records as the Comptroller General deems
appropriate.
``SEC. 411. REPORTING AND MONITORING.
``(a) Reporting on Consummation of Loans.--The President's designee
shall submit a report to the Congress on each bridge loan made under
this title not later than 5 days after the date of the consummation of
such loan.
``(b) Reporting on Restructuring Progress Assessment Measures.--The
President's designee shall submit a report to the Congress on the
restructuring progress assessment measures established for each
manufacturer under section 404(a) not later than 10 days after
establishing the restructuring progress assessment measures.
``(c) Reporting on Evaluations.--The President's designee shall
submit a report to the Congress containing the detailed findings and
conclusions of the President's designee in connection with the
evaluation of an eligible automobile manufacturer under section 404(b).
``(d) Reporting on Consequences for Failure to Comply.--The
President's designee shall submit a report to the Congress on the
exercise of a right under section 408(e) to accelerate indebtedness of
an eligible automobile manufacturer under this title or to cancel any
other financial assistance provided to such eligible automobile
manufacturer, and the facts and circumstances on which such exercise
was based, before the end of the 10-day period beginning on the date of
the exercise of the right.
``(e) Monitoring.--The President's designee shall monitor the use
of loan funds received by eligible automobile manufacturers under this
title, and shall report to Congress once every 90 days (beginning 30
days after the date of enactment of this title) on the progress of the
ability of the recipient of the loan to continue operations and proceed
with restructuring processes that restore the financial viability of
the recipient and promote environmental sustainability.
``SEC. 412. REPORT TO CONGRESS ON LACK OF PROGRESS TOWARD ACHIEVING AN
ACCEPTABLE NEGOTIATED PLAN.
``(a) Authority To Facilitate a Negotiated Plan.--At any such time
as the President's designee determines that action is necessary to
avoid disruption to the economy or to achieve a negotiated plan, the
President's designee shall submit to Congress a report outlining any
additional powers and authorities necessary to facilitate the
completion of a negotiated plan required under section 405.
``(b) Impediments to Achieving Negotiated Plans.--If the
President's designee determines, on the basis of an evaluation by the
President's designee of the progress being made by an eligible
automobile manufacturer toward meeting the restructuring progress
assessment measures established under section 404, that adequate
progress is not being made toward achieving a negotiated plan by March
31, 2009, the President's designee shall submit to Congress a report
detailing the impediments to achievement of a negotiated plan by the
eligible automobile manufacturer.
``SEC. 413. SUBMISSION OF PLAN TO CONGRESS BY THE PRESIDENT'S DESIGNEE.
``Upon submission of a report pursuant to section 412(b), the
President's designee shall provide to Congress a plan that represents
the judgement of the President's designee as to the steps necessary to
achieve the long-term viability, international competitiveness, and
energy efficiency of the eligible automobile manufacturer, consistent
with the factors set forth in section 405(b), including through a
negotiated plan, a plan to be implemented by legislation, or a
reorganization pursuant to chapter 11 of title 11, United States Code.
``SEC. 414. COORDINATION WITH OTHER LAWS.
``(a) In General.--No provision of this title may be construed as
altering, affecting, or superseding--
``(1) the provisions of section 129 of division A of the
Consolidated Security, Disaster Assistance, and Continuing
Appropriations Act, 2009, relating to funding for the
manufacture of advanced technology vehicles;
``(2) any existing authority to provide financial
assistance or liquidity for purposes of the day-to-day
operations in the ordinary course of business or research and
development.
``(b) Antitrust Provisions.--
``(1) In general.--Subject to paragraphs (2) and (4), the
antitrust laws shall not apply to meetings, discussions, or
consultations among an eligible automobile manufacturer and its
interested parties for the purpose of achieving a negotiated
plan pursuant to section 405(a)(2).
``(2) Exclusions.--Paragraph (1) shall not apply with
respect to price-fixing, allocating a market between
competitors, monopolizing (or attempting to monopolize) a
market, or boycotting.
``(3) Antitrust agency participation.--The Attorney General
of the United States and the Federal Trade Commission shall, to
the extent practicable, receive reasonable advance notice of,
and be permitted to participate in, each meeting, discussion,
or consultation described in paragraph (1).
``(4) Preservation of enforcement authority.--Paragraph (1)
shall not be construed to preclude the Attorney General of the
United States or the Federal Trade Commission from bringing an
enforcement action under the antitrust laws for injunctive
relief.
``(5) Sunset.--Paragraph (1) shall apply only with respect
to meetings, discussions, or consultations that occur within
the 3-year period beginning on the date of the enactment of
this title.
``(6) Definition.--For purposes of this subsection, the
term `antitrust laws'--
``(A) has the same meaning as in subsection (a) of
the first section of the Clayton Act (15 U.S.C. 12(a)),
except that such term includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45), to the extent that
such section 5 applies to unfair methods of
competition; and
``(B) includes any provision of State law that is
similar to the laws referred to in subparagraph (A).
``SEC. 415. TREATMENT OF RESTRUCTURING FOR PURPOSES OF APPLYING
LIMITATIONS ON NET OPERATING LOSS CARRYFORWARDS AND
CERTAIN BUILT-IN LOSSES.
``Section 382 of the Internal Revenue Code of 1986 shall not apply
in the case of an ownership change resulting from this title or
pursuant to a restructuring plan approved under this title.
``SEC. 416. CLARIFICATION OF AVAILABILITY OF FINANCIAL SUPPORT FOR
FINANCING ARMS.
``The authority of the President's designee to provide assistance
to any eligible automobile manufacturer includes the authority to
provide support to finance company affiliates of the manufacturer to
ensure that such affiliates have the necessary resources to continue to
provide needed credit, including through dealer and other financing of
consumer and business auto and other vehicle loans and dealer floor
plan loans.''.
TITLE IV--CLARIFICATION OF AUTHORITY
SEC. 401. CONSUMER LOANS.
Title I of the Emergency Economic Stabilization Act of 2008 (12
U.S.C. 5211 et seq.) is amended by adding at the end the following new
section:
``SEC. 137. CLARIFICATION OF AUTHORITY REGARDING CONSUMER LOANS.
``The authority of the Secretary to take any action under this
title includes the authority to establish or support facilities to
support the availability of consumer loans, including loans for autos
and other vehicles and student loans, including through purchase of
asset-backed securities, directly or through the Board or any Federal
reserve bank.''.
SEC. 402. MUNICIPAL SECURITIES.
Section 103 of the Emergency Economic Stabilization Act of 2008 (12
U.S.C. 5211) is amended by inserting after subsection (f) (as added by
section 401 of this title) the following new subsection:
``(g) Clarification of Authority Regarding Municipal Securities.--
``(1) Clarification.--The authority of the Secretary to
take any action under this title includes the authority to
provide support to State and local governments, and other
issuers of municipal securities, which are having difficulty
accessing appropriate financing in the capital markets. Such
support includes the direct purchase of municipal securities
and providing credit enhancement in connection with municipal
securities whose purchase is financed under any facility
provided by the Board or any Federal reserve bank.
``(2) Definition.--For purposes of this subsection, the
term `municipal security' has the meaning given the term `State
or local bond' in section 103(c) of the Internal Revenue Code
of 1986 (26 U.S.C. 103(c)) and the regulations issued
thereunder.''.
SEC. 403. COMMERCIAL REAL ESTATE LOANS.
Title I of the Emergency Economic Stabilization Act of 2008 (12
U.S.C. 5211 et seq.) is amended by adding after section 137 (as added
by section 401 of this title) the following new section:
``SEC. 138. CLARIFICATION OF AUTHORITY REGARDING COMMERCIAL REAL ESTATE
LOANS.
``The authority of the Secretary to take any action under this
title includes the authority to establish or support facilities to
support the availability of commercial real estate loans, including
through purchase of asset-backed securities, directly or through the
Board of Governors of the Federal Reserve System or any Federal reserve
bank.''.
TITLE V--HOPE FOR HOMEOWNERS PROGRAM IMPROVEMENTS
SEC. 501. CHANGES TO HOPE FOR HOMEOWNERS PROGRAM.
Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is
amended--
(1) in subsection (e)--
(A) by striking paragraph (1);
(B) in paragraph (2)(B), by striking ``90 percent''
and inserting ``93 percent'';
(C) by striking paragraph (7);
(D) in paragraph (9), by striking ``by procuring''
and all that follows through ``by any other method'';
and
(E) by redesignating paragraphs (2), (3), (4), (5),
(6), (8), (9), (10), and (11) as paragraphs (1), (2),
(3), (4), (5), (6), (7), (8), and (9), respectively;
(2) in subsection (h)(2), by striking ``, or in any case in
which a mortgagor fails to make the first payment on a
refinanced eligible mortgage'';
(3) by striking subsection (i) and inserting the following
new subsection:
``(i) Annual Premiums.--
``(1) In general.--For each refinanced eligible mortgage
insured under this section, the Secretary shall establish and
collect an annual premium in an amount equal to not less than
0.55 percent of the amount of the remaining insured principal
balance of the mortgage and not more than 0.75 percent of such
remaining insured principal balance, as determined according to
a schedule established by the Board that assigns such annual
premiums based upon the credit risk of the mortgage.
``(2) Reduction or termination during mortgage term.--
Notwithstanding paragraph (1), the Secretary may provide that
the annual premiums charged for refinanced eligible mortgages
insured under this section are reduced over the term of the
mortgage or that the collection of such premiums is
discontinued at some time during the term of the mortgage, in a
manner that is consistent with policies for such reduction or
discontinuation of annual premiums charged for mortgages in
accordance with section 203(c).'';
(4) in subsection (k)--
(A) by striking the subsection heading and
inserting ``Exit Fee'';
(B) in paragraph (1), in the matter preceding
subparagraph (A), by striking ``such sale or
refinancing'' and inserting ``the mortgage being
insured under this section''; and
(C) by striking paragraph (2);
(5) in subsection (s)(3)(A)(ii), by striking ``subsection
(e)(1)(B) and such other'' and inserting ``such'';
(6) in subsection (v), by inserting after the period at the
end the following: ``The Board shall conform documents, forms,
and procedures for mortgages insured under this section to
those in place for mortgages insured under section 203(b) to
the maximum extent possible consistent with the requirements of
this section.'';
(7) in subsection (w)(1)(C), by striking ``(e)(4)(A)'' and
inserting ``(e)(3)(A)''; and
(8) by adding at the end the following new subsection:
``(x) Payment to Existing Loan Servicer.--The Board may establish a
payment to the servicer of the existing senior mortgage for every loan
insured under the HOPE for Homeowners Program.''.
SEC. 502. FUNDING OF INCREASED HOPE FOR HOMEOWNERS PROGRAM CREDIT
SUBSIDY COSTS.
Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is
amended by adding after subsection (x) (as added by section 501 of this
title) the following new subsection:
``(y) Funding of Credit Subsidy Costs of 2009 Amendments.--
Notwithstanding section 1338(b) of the Housing and Community
Development Act of 1992 (12 U.S.C. 4568(b)) and subsection (w) of this
section--
``(1) to the extent amounts are available to the Secretary
of the Treasury pursuant to section 118 of the Emergency
Economic Stabilization Act of 2008, the Secretary shall use
such amounts to cover any increase in the net costs to the
Federal Government of the HOPE for Homeowners program under
this section resulting from the amendments made by title V of
the TARP Reform and Accountability Act of 2009, and actions
authorized by title I of the Emergency Economic Stabilization
Act of 2008 shall include such use; and
``(2) any remaining net costs to the Federal Government of
the HOPE for Homeowners program under this section not
resulting from the amendments made under this title shall be
paid, and the Secretary of the Treasury shall be reimbursed for
such costs, in accordance with the provisions of such section
1338 and subsection (w) of this section.''.
TITLE VI--HOME BUYER STIMULUS
SEC. 601. HOME BUYER STIMULUS PROGRAM.
(a) In General.--The Secretary of the Treasury (in this title
referred to as the ``Secretary'') shall carry out a program using the
authority made available by section 1117 of the Housing and Economic
Recovery Act of 2008 to stimulate demand for home purchases and reduce
unsold inventories of residential properties, which shall include
ensuring the availability of affordable interest rates on mortgages
made for the purchase, by qualified home buyers, of 1- to 4-family
residential properties.
(b) Purchase Obligations and Securities Using HERA Authority.--The
Secretary shall execute the program under this section through the
purchase of obligations and other securities issued by--
(1) the Federal National Mortgage Association, pursuant to
the authority under section 304(g) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1719(g)),
(2) the Federal Home Loan Mortgage Corporation, pursuant to
the authority under section 304(l) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1455(l)), and
(3) any Federal Home Loan Bank, pursuant to the authority
under section 11(l) of the Federal Home Loan Bank Act (12
U.S.C. 1431(l)),
as added by section 1117 of the Housing and Economic Recovery Act of
2008 (Public Law 110-289).
(c) Use of Loan Originators and Portfolio Lenders.--The program
under this section shall provide mechanisms to ensure availability of
such mortgages for home purchase having affordable interest rates
through financial institutions that act as loan originators or as
portfolio lenders.
(d) Availability of Affordable Loans Under HOPE for Homeowners
Program.--The Secretary, in consultation with the Secretary of Housing
and Urban Development, shall ensure that the affordable interest rates
made available through the program under this section are made
available in connection with mortgages made for refinancing eligible
mortgages, as such term is defined in section 257 of the National
Housing Act (12 U.S.C. 1715z-23), to be insured under the HOPE for
Homeowners Program under such section.
(e) Targeting.--In carrying out the program under this section, the
Secretary may take into consideration the impact of activities under
the program on geographical areas having the greatest number of
properties with foreclosed-upon mortgages.
TITLE VII--FDIC PROVISIONS
SEC. 701. PERMANENT INCREASE IN DEPOSIT INSURANCE.
(a) Amendments to Federal Deposit Insurance Act.--Section 11(a)(1)
of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended--
(1) in paragraph (1)(E), by striking ``$100,000'' and
inserting ``$250,000''
(2) in paragraph (1)(F)(i), by striking ``2010'' and
inserting ``2015'';
(3) in subclause (I) of paragraph (1)(F)(i), by striking
``$100,000'' and inserting ``$250,000'';
(4) in subclause (II) of paragraph (1)(F)(i), by striking
``the calendar year preceding the date this subparagraph takes
effect under the Federal Deposit Insurance Reform Act of 2005''
and inserting ``calendar year 2008''; and
(5) in paragraph (3)(A)(iii), by striking ``, except that
$250,000 shall be substituted for $100,000 wherever such term
appears in such paragraph''.
(b) Repeal of EESA Provision.--Section 136 of the Emergency
Economic Stabilization Act (Public Law 110-343; 122 Stat. 3765) is
hereby repealed.
(c) Amendment to Federal Credit Union Act.--Section 207(k) of the
Federal Credit Union Act (12 U.S.C. 1787(k) is amended--
(1) in paragraph (3)--
(A) by striking the opening quotation mark before
``$250,000'';
(B) by striking ``, except that $250,000 shall be
substituted for $100,000 wherever such term appears in
such section''; and
(C) by striking the closing quotation mark after
the closing parenthesis; and
(2) in paragraph (5), by striking ``$100,000'' and
inserting ``$250,000'';
SEC. 702. EXTENSION OF RESTORATION PLAN PERIOD.
Section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act (12
U.S.C. 1817(b)(3)(E)(ii)) is amended by striking ``5-year period'' and
inserting ``8-year period''.
SEC. 703. BORROWING AUTHORITY.
Section 14(a) of the Federal Deposit Insurance Act (12 U.S.C.
1814(a)) is amended--
(1) by striking ``$30,000,000,000'' and inserting
``$100,000,000,000''; and
(2) by inserting prior to the last sentence, the following
new sentence: ``The Corporation may request in writing to
borrow, and the Secretary may authorize and approve the
borrowing of, additional amounts above $100,000,000,000 to the
extent that the Board of Directors and the Secretary determine
such borrowing to be necessary.''.
SEC. 704. SYSTEMIC RISK SPECIAL ASSESSMENTS.
Section 13(c)(4)(G)(ii) of the Federal Deposit Insurance Act (12
U.S.C. 1823(c)(4)(G)(ii)) is amended to read as follows:
``(ii) Repayment of loss.--
``(I) In general.--The Corporation
shall recover the loss to the Deposit
Insurance Fund arising from any action
taken or assistance provided with
respect to an insured depository
institution under clause (i) from 1 or
more special assessments on insured
depository institutions, depository
institution holding companies (with the
concurrence of the Secretary of the
Treasury with respect to holding
companies), or both, as the Corporation
determines to be appropriate.
``(II) Treatment of depository
institution holding companies.--For
purposes of this clause, sections
7(c)(2) and 18(h) shall apply to
depository institution holding
companies as if they were insured
depository institutions.
``(III) Regulations.--The
Corporation shall prescribe such
regulations as it deems necessary to
implement this clause. In prescribing
such regulations, defining terms, and
setting the appropriate assessment rate
or rates, the Corporation shall
consider: the types of entities that
benefit from any action taken or
assistance provided under this
subparagraph; economic conditions; the
effects on the industry; and such other
factors as the Corporation deems
appropriate.''.
<all>
Committee of the Whole House on the state of the Union rises leaving H.R. 384 as unfinished business.
Considered as unfinished business. (consideration: CR H412-419)
The House resolved into Committee of the Whole House on the state of the Union for further consideration.
The House rose from the Committee of the Whole House on the state of the Union to report H.R. 384.
The previous question was ordered pursuant to the rule. (consideration: CR H413)
Mr. Gohmert moved to recommit with instructions to Financial Services. (consideration: CR H413-415; text: CR H413-414)
Mr. Frank (MA) raised a point of order against the motion to recommit with instructions. Mr. Frank stated that the provisions of the motion to recommit exceed the scope of the bill and the motion to recommit is therefore, not germane. Sustained by the Chair.
Point of order sustained against the motion to recommit with instructions.
Mr. Gohmert appealed the ruling of the chair. The question was then put on sustaining the ruling of the chair. (consideration: CR H414)
Mr. Frank (MA) moved to table appeal of the ruling of the chair.
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On motion to table appeal of the ruling of the chair Agreed to by recorded vote: 251 - 176 (Roll no. 24).
Roll Call #24 (House)Mr. Barrett (SC) moved to recommit with instructions to Financial Services. (consideration: CR H415-418; text: CR H415)
Floor summary: DEBATE - The House proceeded with 10 minutes of debate on the Barrett (SC) motion to recommit with instructions. The instructions contained in the motion seek to require the bill to be reported back to the House with an amendment pertaining to provisions dealing with Title I- TARP Terminiation and Full Repayment Plan.
The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H417)
On motion to recommit with instructions Failed by the Yeas and Nays: 199 - 228 (Roll no. 25).
Roll Call #25 (House)Passed/agreed to in House: On passage Passed by recorded vote: 260 - 166 (Roll no. 26).
Roll Call #26 (House)On passage Passed by recorded vote: 260 - 166 (Roll no. 26).
Roll Call #26 (House)Motion to reconsider laid on the table Agreed to without objection.
The Clerk was authorized to correct section numbers, punctuation, and cross references, and to make other necessary technical and conforming corrections in the engrossment of H.R. 384.
Received in the Senate and Read twice and referred to the Committee on Finance.