69–008 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 110–903 

PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE 

BILL (H.R. 3997) TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO 

PROVIDE EARNINGS ASSISTANCE AND TAX RELIEF TO MEMBERS OF 

THE UNIFORMED SERVICES, VOLUNTEER FIREFIGHTERS, AND PEACE 

CORPS VOLUNTEERS, AND FOR OTHER PURPOSES 

SEPTEMBER 29 (legislative day, SEPTEMBER 28)—Referred to the House Calendar 

and ordered to be printed 

Ms. SLAUGHTER, from the Committee on Rules, 

submitted the following 

R E P O R T 

[To accompany H. Res. 1517] 

The Committee on Rules, having had under consideration House 

Resolution 1517, by a nonrecord vote, report the same to the House 

with the recommendation that the resolution be adopted. 

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of the Senate amendment to the House amendment to the Senate amendment to H.R. 

3997, the Emergency Economic Stabilization Act of 2008. The resolution makes in order a motion by the Chairman of the Committee 

on Financial Services to concur in the Senate amendment to the 

House amendment to the Senate amendment with the text of the 

House amendment printed in this report. The rule waives all points 

of order against the motion and provides that the Senate amendment and the motion shall be considered as read. The rule provides 

three hours of debate on the motion equally divided and controlled 

by the chairman and ranking minority member of the Committee 

on Financial Services. The rule provides that the Chair may postpone further consideration of the motion to a time designated by 

the Speaker. 

EXPLANATION OF WAIVERS

The waiver of all points of order against the motion includes a 

waiver of clause 10 of rule XXI regarding PAYGO and a waiver of 

clause 7 of rule XVI regarding germaneness. 


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SUMMARY OF THE HOUSE AMENDMENT MADE IN ORDER

The amendment provides up to $700 billion to the Secretary of 

the Treasury to buy mortgages and other assets that are clogging 

the balance sheets of financial institutions and making it difficult 

to access credit. The amendment also establishes a program that 

would allow companies to insure their troubled assets. 

The amendment requires the Treasury to modify troubled loans 

wherever possible to help American families keep their homes. It 

also directs other Federal agencies to modify loans that they own 

or control. Finally, it improves the HOPE for Homeowners program 

by expanding eligibility and increasing the tools available to the 

Department of Housing and Urban Development to help more families keep their homes. 

The amendment requires companies that sell some of their bad 

assets to the government to provide warrants so that taxpayers will 

benefit from any future growth these companies may experience as 

a result of participation in this program. The amendment also requires the President to submit legislation that would cover any 

losses to taxpayers resulting from this program from financial institutions. 

In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In 

addition, the amendment limits ‘‘golden parachutes’’ and requires 

that unearned bonuses be returned. 

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires 

the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The 

Treasury must report on the use of the funds and the progress in 

addressing the crisis. The amendment also establishes an Oversight Board and establishes a special inspector general to protect 

against waste, fraud and abuse. 

TEXT OF THE HOUSE AMENDMENT MADE IN ORDER

In lieu of the matter proposed to be inserted by the amendment 

of the Senate to the amendment of the House to the amendment 

of the Senate, insert the following: 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Emergency Economic Stabilization Act of 2008’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as 

follows: 

Sec. 1. Short title and table of contents. 

Sec. 2. Purposes. 

Sec. 3. Definitions. 

TITLE I—TROUBLED ASSETS RELIEF PROGRAM 

Sec. 101. Purchases of troubled assets. 

Sec. 102. Insurance of troubled assets. 

Sec. 103. Considerations. 

Sec. 104. Financial Stability Oversight Board. 

Sec. 105. Reports. 

Sec. 106. Rights; management; sale of troubled assets; revenues and sale proceeds. 

Sec. 107. Contracting procedures. 

Sec. 108. Conflicts of interest. 

Sec. 109. Foreclosure mitigation efforts. 


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Sec. 110. Assistance to homeowners. 

Sec. 111. Executive compensation and corporate governance. 

Sec. 112. Coordination with foreign authorities and central banks. 

Sec. 113. Minimization of long-term costs and maximization of benefits for taxpayers. 

Sec. 114. Market transparency. 

Sec. 115. Graduated authorization to purchase. 

Sec. 116. Oversight and audits. 

Sec. 117. Study and report on margin authority. 

Sec. 118. Funding. 

Sec. 119. Judicial review and related matters. 

Sec. 120. Termination of authority. 

Sec. 121. Special Inspector General for the Troubled Asset Relief Program. 

Sec. 122. Increase in statutory limit on the public debt. 

Sec. 123. Credit reform. 

Sec. 124. HOPE for Homeowners amendments. 

Sec. 125. Congressional Oversight Panel. 

Sec. 126. FDIC authority. 

Sec. 127. Cooperation with the FBI. 

Sec. 128. Acceleration of effective date. 

Sec. 129. Disclosures on exercise of loan authority. 

Sec. 130. Technical corrections. 

Sec. 131. Exchange Stabilization Fund reimbursement. 

Sec. 132. Authority to suspend mark-to-market accounting. 

Sec. 133. Study on mark-to-market accounting. 

Sec. 134. Recoupment. 

Sec. 135. Preservation of authority. 

TITLE II—BUDGET-RELATED PROVISIONS 

Sec. 201. Information for congressional support agencies. 

Sec. 202. Reports by the Office of Management and Budget and the Congressional 

Budget Office. 

Sec. 203. Analysis in President’s Budget. 

Sec. 204. Emergency treatment. 

TITLE III—TAX PROVISIONS 

Sec. 301. Gain or loss from sale or exchange of certain preferred stock. 

Sec. 302. Special rules for tax treatment of executive compensation of employers 

participating in the troubled assets relief program. 

Sec. 303. Extension of exclusion of income from discharge of qualified principal residence indebtedness. 

SEC. 2. PURPOSES. 

The purposes of this Act are— 

(1) to immediately provide authority and facilities that the 

Secretary of the Treasury can use to restore liquidity and stability to the financial system of the United States; and 

(2) to ensure that such authority and such facilities are used 

in a manner that— 

(A) protects home values, college funds, retirement accounts, and life savings; 

(B) preserves homeownership and promotes jobs and economic growth; 

(C) maximizes overall returns to the taxpayers of the 

United States; and 

(D) provides public accountability for the exercise of such 

authority. 

SEC. 3. DEFINITIONS. 

For purposes of this Act, the following definitions shall apply: 

(1) APPROPRIATE COMMITTEES OF CONGRESS.—The term ‘‘appropriate committees of Congress’’ means— 

(A) the Committee on Banking, Housing, and Urban Affairs, the Committee on Finance, the Committee on the 


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Budget, and the Committee on Appropriations of the Senate; and 

(B) the Committee on Financial Services, the Committee 

on Ways and Means, the Committee on the Budget, and 

the Committee on Appropriations of the House of Representatives. 

(2) BOARD.—The term ‘‘Board’’ means the Board of Governors 

of the Federal Reserve System. 

(3) CONGRESSIONAL SUPPORT AGENCIES.—The term ‘‘congressional support agencies’’ means the Congressional Budget Office and the Joint Committee on Taxation. 

(4) CORPORATION.—The term ‘‘Corporation’’ means the Federal Deposit Insurance Corporation. 

(5) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’ 

means any institution, including, but not limited to, any bank, 

savings association, credit union, security broker or dealer, or 

insurance company, established and regulated under the laws 

of the United States or any State, territory, or possession of 

the United States, the District of Columbia, Commonwealth of 

Puerto Rico, Commonwealth of Northern Mariana Islands, 

Guam, American Samoa, or the United States Virgin Islands, 

and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign 

government. 

(6) FUND.—The term ‘‘Fund’’ means the Troubled Assets Insurance Financing Fund established under section 102. 

(7) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of the Treasury. 

(8) TARP.—The term ‘‘TARP’’ means the Troubled Asset Relief Program established under section 101. 

(9) TROUBLED ASSETS.—The term ‘‘troubled assets’’ means— 

(A) residential or commercial mortgages and any securities, obligations, or other instruments that are based on or 

related to such mortgages, that in each case was originated or issued on or before March 14, 2008, the purchase 

of which the Secretary determines promotes financial market stability; and 

(B) any other financial instrument that the Secretary, 

after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market 

stability, but only upon transmittal of such determination, 

in writing, to the appropriate committees of Congress. 

TITLE I—TROUBLED ASSETS RELIEF 

PROGRAM 

SEC. 101. PURCHASES OF TROUBLED ASSETS. 

(a) OFFICES; AUTHORITY.— (1) AUTHORITY.—The Secretary is authorized to establish the 

Troubled Asset Relief Program (or ‘‘TARP’’) to purchase, and to 

make and fund commitments to purchase, troubled assets from 

any financial institution, on such terms and conditions as are 

determined by the Secretary, and in accordance with this Act 


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and the policies and procedures developed and published by 

the Secretary. 

(2) COMMENCEMENT OF PROGRAM.—Establishment of the 

policies and procedures and other similar administrative requirements imposed on the Secretary by this Act are not intended to delay the commencement of the TARP. 

(3) ESTABLISHMENT OF TREASURY OFFICE.— (A) IN GENERAL.—The Secretary shall implement any 

program under paragraph (1) through an Office of Financial Stability, established for such purpose within the Office of Domestic Finance of the Department of the Treasury, which office shall be headed by an Assistant Secretary 

of the Treasury, appointed by the President, by and with 

the advice and consent of the Senate, except that an interim Assistant Secretary may be appointed by the Secretary. 

(B) CLERICAL AMENDMENTS.— 

(i) TITLE 5.—Section 5315 of title 5, United States 

Code, is amended in the item relating to Assistant 

Secretaries of the Treasury, by striking ‘‘(9)’’ and inserting ‘‘(10)’’. 

(ii) TITLE 31.—Section 301(e) of title 31, United 

States Code, is amended by striking ‘‘9’’ and inserting 

‘‘10’’. 

(b) CONSULTATION.—In exercising the authority under this section, the Secretary shall consult with the Board, the Corporation, 

the Comptroller of the Currency, the Director of the Office of Thrift 

Supervision, and the Secretary of Housing and Urban Development. 

(c) NECESSARY ACTIONS.—The Secretary is authorized to take 

such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following: 

(1) The Secretary shall have direct hiring authority with respect to the appointment of employees to administer this Act. 

(2) Entering into contracts, including contracts for services 

authorized by section 3109 of title 5, United States Code. 

(3) Designating financial institutions as financial agents of 

the Federal Government, and such institutions shall perform 

all such reasonable duties related to this Act as financial 

agents of the Federal Government as may be required. 

(4) In order to provide the Secretary with the flexibility to 

manage troubled assets in a manner designed to minimize cost 

to the taxpayers, establishing vehicles that are authorized, 

subject to supervision by the Secretary, to purchase, hold, and 

sell troubled assets and issue obligations. 

(5) Issuing such regulations and other guidance as may be 

necessary or appropriate to define terms or carry out the authorities or purposes of this Act. 

(d) PROGRAM GUIDELINES.—Before the earlier of the end of the 

2-business-day period beginning on the date of the first purchase 

of troubled assets pursuant to the authority under this section or 

the end of the 45-day period beginning on the date of enactment 

of this Act, the Secretary shall publish program guidelines, including the following: 

(1) Mechanisms for purchasing troubled assets. 


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(2) Methods for pricing and valuing troubled assets. 

(3) Procedures for selecting asset managers. 

(4) Criteria for identifying troubled assets for purchase. 

(e) PREVENTING UNJUST ENRICHMENT.—In making purchases 

under the authority of this Act, the Secretary shall take such steps 

as may be necessary to prevent unjust enrichment of financial institutions participating in a program established under this section, 

including by preventing the sale of a troubled asset to the Secretary at a higher price than what the seller paid to purchase the 

asset. This subsection does not apply to troubled assets acquired in 

a merger or acquisition, or a purchase of assets from a financial institution in conservatorship or receivership, or that has initiated 

bankruptcy proceedings under title 11, United States Code. 

SEC. 102. INSURANCE OF TROUBLED ASSETS. 

(a) AUTHORITY.— (1) IN GENERAL.—If the Secretary establishes the program 

authorized under section 101, then the Secretary shall establish a program to guarantee troubled assets originated or 

issued prior to March 14, 2008, including mortgage-backed securities. 

(2) GUARANTEES.—In establishing any program under this 

subsection, the Secretary may develop guarantees of troubled 

assets and the associated premiums for such guarantees. Such 

guarantees and premiums may be determined by category or 

class of the troubled assets to be guaranteed. 

(3) EXTENT OF GUARANTEE.—Upon request of a financial institution, the Secretary may guarantee the timely payment of 

principal of, and interest on, troubled assets in amounts not to 

exceed 100 percent of such payments. Such guarantee may be 

on such terms and conditions as are determined by the Secretary, provided that such terms and conditions are consistent 

with the purposes of this Act. 

(b) REPORTS.—Not later than 90 days after the date of enactment 

of this Act, the Secretary shall report to the appropriate committees of Congress on the program established under subsection (a). 

(c) PREMIUMS.— (1) IN GENERAL.—The Secretary shall collect premiums from 

any financial institution participating in the program established under subsection (a). Such premiums shall be in an 

amount that the Secretary determines necessary to meet the 

purposes of this Act and to provide sufficient reserves pursuant 

to paragraph (3). 

(2) AUTHORITY TO BASE PREMIUMS ON PRODUCT RISK.—In establishing any premium under paragraph (1), the Secretary 

may provide for variations in such rates according to the credit 

risk associated with the particular troubled asset that is being 

guaranteed. The Secretary shall publish the methodology for 

setting the premium for a class of troubled assets together 

with an explanation of the appropriateness of the class of assets for participation in the program established under this 

section. The methodology shall ensure that the premium is 

consistent with paragraph (3). 

(3) MINIMUM LEVEL.—The premiums referred to in paragraph (1) shall be set by the Secretary at a level necessary to 

create reserves sufficient to meet anticipated claims, based on 


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an actuarial analysis, and to ensure that taxpayers are fully 

protected. 

(4) ADJUSTMENT TO PURCHASE AUTHORITY.—The purchase 

authority limit in section 115 shall be reduced by an amount 

equal to the difference between the total of the outstanding 

guaranteed obligations and the balance in the Troubled Assets 

Insurance Financing Fund. 

(d) TROUBLED ASSETS INSURANCE FINANCING FUND.— (1) DEPOSITS.—The Secretary shall deposit fees collected 

under this section into the Fund established under paragraph 

(2). 

(2) ESTABLISHMENT.—There is established a Troubled Assets 

Insurance Financing Fund that shall consist of the amounts 

collected pursuant to paragraph (1), and any balance in such 

fund shall be invested by the Secretary in United States Treasury securities, or kept in cash on hand or on deposit, as necessary. 

(3) PAYMENTS FROM FUND.—The Secretary shall make payments from amounts deposited in the Fund to fulfill obligations 

of the guarantees provided to financial institutions under subsection (a). 

SEC. 103. CONSIDERATIONS. 

In exercising the authorities granted in this Act, the Secretary 

shall take into consideration— 

(1) protecting the interests of taxpayers by maximizing overall returns and minimizing the impact on the national debt; 

(2) providing stability and preventing disruption to financial 

markets in order to limit the impact on the economy and protect American jobs, savings, and retirement security; 

(3) the need to help families keep their homes and to stabilize communities; 

(4) in determining whether to engage in a direct purchase 

from an individual financial institution, the long-term viability 

of the financial institution in determining whether the purchase represents the most efficient use of funds under this Act; 

(5) ensuring that all financial institutions are eligible to participate in the program, without discrimination based on size, 

geography, form of organization, or the size, type, and number 

of assets eligible for purchase under this Act; 

(6) providing financial assistance to financial institutions, including those serving low- and moderate-income populations 

and other underserved communities, and that have assets less 

than $1,000,000,000, that were well or adequately capitalized 

as of June 30, 2008, and that as a result of the devaluation of 

the preferred government-sponsored enterprises stock will drop 

one or more capital levels, in a manner sufficient to restore the 

financial institutions to at least an adequately capitalized 

level; 

(7) the need to ensure stability for United States public instrumentalities, such as counties and cities, that may have suffered significant increased costs or losses in the current market 

turmoil; 

(8) protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible retirement plan described in clause (iii), (iv), (v), or (vi) of section 


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402(c)(8)(B) of the Internal Revenue Code of 1986, except that 

such authority shall not extend to any compensation arrangements subject to section 409A of such Code; and 

(9) the utility of purchasing other real estate owned and instruments backed by mortgages on multifamily properties. 

SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD. 

(a) ESTABLISHMENT.—There is established the Financial Stability 

Oversight Board, which shall be responsible for— 

(1) reviewing the exercise of authority under a program developed in accordance with this Act, including— 

(A) policies implemented by the Secretary and the Office 

of Financial Stability created under sections 101 and 102, 

including the appointment of financial agents, the designation of asset classes to be purchased, and plans for the 

structure of vehicles used to purchase troubled assets; and 

(B) the effect of such actions in assisting American families in preserving home ownership, stabilizing financial 

markets, and protecting taxpayers; 

(2) making recommendations, as appropriate, to the Secretary regarding use of the authority under this Act; and 

(3) reporting any suspected fraud, misrepresentation, or malfeasance to the Special Inspector General for the Troubled Assets Relief Program or the Attorney General of the United 

States, consistent with section 535(b) of title 28, United States 

Code. 

(b) MEMBERSHIP.—The Financial Stability Oversight Board shall 

be comprised of— 

(1) the Chairman of the Board of Governors of the Federal 

Reserve System; 

(2) the Secretary; 

(3) the Director of the Federal Housing Finance Agency; 

(4) the Chairman of the Securities Exchange Commission; 

and 

(5) the Secretary of Housing and Urban Development. 

(c) CHAIRPERSON.—The chairperson of the Financial Stability 

Oversight Board shall be elected by the members of the Board from 

among the members other than the Secretary. 

(d) MEETINGS.—The Financial Stability Oversight Board shall 

meet 2 weeks after the first exercise of the purchase authority of 

the Secretary under this Act, and monthly thereafter. 

(e) ADDITIONAL AUTHORITIES.—In addition to the responsibilities 

described in subsection (a), the Financial Stability Oversight Board 

shall have the authority to ensure that the policies implemented by 

the Secretary are— 

(1) in accordance with the purposes of this Act; 

(2) in the economic interests of the United States; and 

(3) consistent with protecting taxpayers, in accordance with 

section 113(a). 

(f) CREDIT REVIEW COMMITTEE.—The Financial Stability Oversight Board may appoint a credit review committee for the purpose 

of evaluating the exercise of the purchase authority provided under 

this Act and the assets acquired through the exercise of such authority, as the Financial Stability Oversight Board determines appropriate. 


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(g) REPORTS.—The Financial Stability Oversight Board shall report to the appropriate committees of Congress and the Congressional Oversight Panel established under section 125, not less frequently than quarterly, on the matters described under subsection 

(a)(1). 

(h) TERMINATION.—The Financial Stability Oversight Board, and 

its authority under this section, shall terminate on the expiration 

of the 15-day period beginning upon the later of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been sold or transferred out of 

the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 105. REPORTS. 

(a) IN GENERAL.—Before the expiration of the 60-day period beginning on the date of the first exercise of the authority granted 

in section 101(a), or of the first exercise of the authority granted 

in section 102, whichever occurs first, and every 30-day period 

thereafter, the Secretary shall report to the appropriate committees 

of Congress, with respect to each such period— 

(1) an overview of actions taken by the Secretary, including 

the considerations required by section 103 and the efforts 

under section 109; 

(2) the actual obligation and expenditure of the funds provided for administrative expenses by section 118 during such 

period and the expected expenditure of such funds in the subsequent period; and 

(3) a detailed financial statement with respect to the exercise 

of authority under this Act, including— 

(A) all agreements made or renewed; 

(B) all insurance contracts entered into pursuant to section 102; 

(C) all transactions occurring during such period, including the types of parties involved; 

(D) the nature of the assets purchased; 

(E) all projected costs and liabilities; 

(F) operating expenses, including compensation for financial agents; 

(G) the valuation or pricing method used for each transaction; and 

(H) a description of the vehicles established to exercise 

such authority. 

(b) TRANCHE REPORTS TO CONGRESS.— 

(1) REPORTS.—The Secretary shall provide to the appropriate 

committees of Congress, at the times specified in paragraph 

(2), a written report, including— 

(A) a description of all of the transactions made during 

the reporting period; 

(B) a description of the pricing mechanism for the transactions; 

(C) a justification of the price paid for and other financial terms associated with the transactions; 

(D) a description of the impact of the exercise of such authority on the financial system, supported, to the extent 

possible, by specific data; 


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(E) a description of challenges that remain in the financial system, including any benchmarks yet to be achieved; 

and 

(F) an estimate of additional actions under the authority 

provided under this Act that may be necessary to address 

such challenges. 

(2) TIMING.—The report required by this subsection shall be 

submitted not later than 7 days after the date on which commitments to purchase troubled assets under the authorities 

provided in this Act first reach an aggregate of 

$50,000,000,000 and not later than 7 days after each 

$50,000,000,000 interval of such commitments is reached 

thereafter. 

(c) REGULATORY MODERNIZATION REPORT.—The Secretary shall 

review the current state of the financial markets and the regulatory system and submit a written report to the appropriate committees of Congress not later than April 30, 2009, analyzing the 

current state of the regulatory system and its effectiveness at overseeing the participants in the financial markets, including the overthe-counter swaps market and government-sponsored enterprises, 

and providing recommendations for improvement, including— 

(1) recommendations regarding— 

(A) whether any participants in the financial markets 

that are currently outside the regulatory system should become subject to the regulatory system; and 

(B) enhancement of the clearing and settlement of overthe-counter swaps; and 

(2) the rationale underlying such recommendations. 

(d) SHARING OF INFORMATION.—Any report required under this 

section shall also be submitted to the Congressional Oversight 

Panel established under section 125. 

(e) SUNSET.—The reporting requirements under this section shall 

terminate on the later of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been sold or transferred out of 

the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; REVENUES AND SALE PROCEEDS. 

(a) EXERCISE OF RIGHTS.—The Secretary may, at any time, exercise any rights received in connection with troubled assets purchased under this Act. 

(b) MANAGEMENT OF TROUBLED ASSETS.—The Secretary shall 

have authority to manage troubled assets purchased under this 

Act, including revenues and portfolio risks therefrom. 

(c) SALE OF TROUBLED ASSETS.—The Secretary may, at any time, 

upon terms and conditions and at a price determined by the Secretary, sell, or enter into securities loans, repurchase transactions, 

or other financial transactions in regard to, any troubled asset purchased under this Act. 

(d) TRANSFER TO TREASURY.—Revenues of, and proceeds from the 

sale of troubled assets purchased under this Act, or from the sale, 

exercise, or surrender of warrants or senior debt instruments acVerDate Aug 31 2005 05:13 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR903.XXX HR903

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quired under section 113 shall be paid into the general fund of the 

Treasury for reduction of the public debt. 

(e) APPLICATION OF SUNSET TO TROUBLED ASSETS.—The authority of the Secretary to hold any troubled asset purchased under this 

Act before the termination date in section 120, or to purchase or 

fund the purchase of a troubled asset under a commitment entered 

into before the termination date in section 120, is not subject to the 

provisions of section 120. 

SEC. 107. CONTRACTING PROCEDURES. 

(a) STREAMLINED PROCESS.—For purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition 

Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the 

public interest. Any such determination, and the justification for 

such determination, shall be submitted to the Committees on Oversight and Government Reform and Financial Services of the House 

of Representatives and the Committees on Homeland Security and 

Governmental Affairs and Banking, Housing, and Urban Affairs of 

the Senate within 7 days. 

(b) ADDITIONAL CONTRACTING REQUIREMENTS.—In any solicitation or contract where the Secretary has, pursuant to subsection 

(a), waived any provision of the Federal Acquisition Regulation pertaining to minority contracting, the Secretary shall develop and implement standards and procedures to ensure, to the maximum extent practicable, the inclusion and utilization of minorities (as such 

term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 

note)) and women, and minority- and women-owned businesses (as 

such terms are defined in section 21A(r)(4) of the Federal Home 

Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that solicitation or contract, including contracts to asset managers, servicers, property 

managers, and other service providers or expert consultants. 

(c) ELIGIBILITY OF FDIC.—Notwithstanding subsections (a) and 

(b), the Corporation— 

(1) shall be eligible for, and shall be considered in, the selection of asset managers for residential mortgage loans and residential mortgage-backed securities; and 

(2) shall be reimbursed by the Secretary for any services provided. 

SEC. 108. CONFLICTS OF INTEREST. 

(a) STANDARDS REQUIRED.—The Secretary shall issue regulations 

or guidelines necessary to address and manage or to prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this Act, including— 

(1) conflicts arising in the selection or hiring of contractors 

or advisors, including asset managers; 

(2) the purchase of troubled assets; 

(3) the management of the troubled assets held; 

(4) post-employment restrictions on employees; and 

(5) any other potential conflict of interest, as the Secretary 

deems necessary or appropriate in the public interest. 


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(b) TIMING.—Regulations or guidelines required by this section 

shall be issued as soon as practicable after the date of enactment 

of this Act. 

SEC. 109. FORECLOSURE MITIGATION EFFORTS. 

(a) RESIDENTIAL MORTGAGE LOAN SERVICING STANDARDS.—To 

the extent that the Secretary acquires mortgages, mortgage backed 

securities, and other assets secured by residential real estate, including multifamily housing, the Secretary shall implement a plan 

that seeks to maximize assistance for homeowners and use the authority of the Secretary to encourage the servicers of the underlying mortgages, considering net present value to the taxpayer, to 

take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs 

to minimize foreclosures. In addition, the Secretary may use loan 

guarantees and credit enhancements to facilitate loan modifications 

to prevent avoidable foreclosures. 

(b) COORDINATION.—The Secretary shall coordinate with the Corporation, the Board (with respect to any mortgage or mortgagebacked securities or pool of securities held, owned, or controlled by 

or on behalf of a Federal reserve bank, as provided in section 

110(a)(1)(C)), the Federal Housing Finance Agency, the Secretary of 

Housing and Urban Development, and other Federal Government 

entities that hold troubled assets to attempt to identify opportunities for the acquisition of classes of troubled assets that will improve the ability of the Secretary to improve the loan modification 

and restructuring process and, where permissible, to permit bona 

fide tenants who are current on their rent to remain in their homes 

under the terms of the lease. In the case of a mortgage on a residential rental property, the plan required under this section shall 

include protecting Federal, State, and local rental subsidies and 

protections, and ensuring any modification takes into account the 

need for operating funds to maintain decent and safe conditions at 

the property. 

(c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.— 

Upon any request arising under existing investment contracts, the 

Secretary shall consent, where appropriate, and considering net 

present value to the taxpayer, to reasonable requests for loss mitigation measures, including term extensions, rate reductions, principal write downs, increases in the proportion of loans within a 

trust or other structure allowed to be modified, or removal of other 

limitation on modifications. 

SEC. 110. ASSISTANCE TO HOMEOWNERS. 

(a) DEFINITIONS.—As used in this section— 

(1) the term ‘‘Federal property manager’’ means— 

(A) the Federal Housing Finance Agency, in its capacity 

as conservator of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; 

(B) the Corporation, with respect to residential mortgage 

loans and mortgage-backed securities held by any bridge 

depository institution pursuant to section 11(n) of the Federal Deposit Insurance Act; and 

(C) the Board, with respect to any mortgage or mortgage-backed securities or pool of securities held, owned, or 

controlled by or on behalf of a Federal reserve bank, other 


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than mortgages or securities held, owned, or controlled in 

connection with open market operations under section 14 

of the Federal Reserve Act (12 U.S.C. 353), or as collateral 

for an advance or discount that is not in default; 

(2) the term ‘‘consumer’’ has the same meaning as in section 

103 of the Truth in Lending Act (15 U.S.C. 1602); 

(3) the term ‘‘insured depository institution’’ has the same 

meaning as in section 3 of the Federal Deposit Insurance Act 

(12 U.S.C. 1813); and 

(4) the term ‘‘servicer’’ has the same meaning as in section 

6(i)(2) of the Real Estate Settlement Procedures Act of 1974 

(12 U.S.C. 2605(i)(2)). 

(b) HOMEOWNER ASSISTANCE BY AGENCIES.— 

(1) IN GENERAL.—To the extent that the Federal property 

manager holds, owns, or controls mortgages, mortgage backed 

securities, and other assets secured by residential real estate, 

including multifamily housing, the Federal property manager 

shall implement a plan that seeks to maximize assistance for 

homeowners and use its authority to encourage the servicers of 

the underlying mortgages, and considering net present value to 

the taxpayer, to take advantage of the HOPE for Homeowners 

Program under section 257 of the National Housing Act or 

other available programs to minimize foreclosures. 

(2) MODIFICATIONS.—In the case of a residential mortgage 

loan, modifications made under paragraph (1) may include— 

(A) reduction in interest rates; 

(B) reduction of loan principal; and 

(C) other similar modifications. 

(3) TENANT PROTECTIONS.—In the case of mortgages on residential rental properties, modifications made under paragraph 

(1) shall ensure— 

(A) the continuation of any existing Federal, State, and 

local rental subsidies and protections; and 

(B) that modifications take into account the need for operating funds to maintain decent and safe conditions at 

the property. 

(4) TIMING.—Each Federal property manager shall develop 

and begin implementation of the plan required by this subsection not later than 60 days after the date of enactment of 

this Act. 

(5) REPORTS TO CONGRESS.—Each Federal property manager 

shall, 60 days after the date of enactment of this Act and every 

30 days thereafter, report to Congress specific information on 

the number and types of loan modifications made and the 

number of actual foreclosures occurring during the reporting 

period in accordance with this section. 

(6) CONSULTATION.—In developing the plan required by this 

subsection, the Federal property managers shall consult with 

one another and, to the extent possible, utilize consistent approaches to implement the requirements of this subsection. 

(c) ACTIONS WITH RESPECT TO SERVICERS.—In any case in which 

a Federal property manager is not the owner of a residential mortgage loan, but holds an interest in obligations or pools of obligations secured by residential mortgage loans, the Federal property 

manager shall— 


bajohnson on PROD1PC77 with REPORTS
14 

(1) encourage implementation by the loan servicers of loan 

modifications developed under subsection (b); and 

(2) assist in facilitating any such modifications, to the extent 

possible. 

(d) LIMITATION.—The requirements of this section shall not supersede any other duty or requirement imposed on the Federal 

property managers under otherwise applicable law. 

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE. 

(a) APPLICABILITY.—Any financial institution that sells troubled 

assets to the Secretary under this Act shall be subject to the executive compensation requirements of subsections (b) and (c) and the 

provisions under the Internal Revenue Code of 1986, as provided 

under the amendment by section 302, as applicable. 

(b) DIRECT PURCHASES.— (1) IN GENERAL.—Where the Secretary determines that the 

purposes of this Act are best met through direct purchases of 

troubled assets from an individual financial institution where 

no bidding process or market prices are available, and the Secretary receives a meaningful equity or debt position in the financial institution as a result of the transaction, the Secretary 

shall require that the financial institution meet appropriate 

standards for executive compensation and corporate governance. The standards required under this subsection shall be effective for the duration of the period that the Secretary holds 

an equity or debt position in the financial institution. 

(2) CRITERIA.—The standards required under this subsection 

shall include— 

(A) limits on compensation that exclude incentives for 

senior executive officers of a financial institution to take 

unnecessary and excessive risks that threaten the value of 

the financial institution during the period that the Secretary holds an equity or debt position in the financial institution; 

(B) a provision for the recovery by the financial 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 proven to be materially inaccurate; and 

(C) a prohibition on the financial institution making any 

golden parachute payment to its senior executive officer 

during the period that the Secretary holds an equity or 

debt position in the financial institution. 

(3) DEFINITION.—For purposes of this section, the term ‘‘senior executive officer’’ means an individual who is one of the top 

5 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. 

(c) AUCTION PURCHASES.—Where the Secretary determines that 

the purposes of this Act are best met through auction purchases of 

troubled assets, and only where such purchases per financial institution in the aggregate exceed $300,000,000 (including direct purchases), the Secretary shall prohibit, for such financial institution, 

any new employment contract with a senior executive officer that 


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15 

provides a golden parachute in the event of an involuntary termination, bankruptcy filing, insolvency, or receivership. The Secretary 

shall issue guidance to carry out this paragraph not later than 2 

months after the date of enactment of this Act, and such guidance 

shall be effective upon issuance. 

(d) SUNSET.—The provisions of subsection (c) shall apply only to 

arrangements entered into during the period during which the authorities under section 101(a) are in effect, as determined under 

section 120. 

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL 

BANKS. 

The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To 

the extent that such foreign financial authorities or banks hold 

troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101. 

SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION 

OF BENEFITS FOR TAXPAYERS. 

(a) LONG-TERM COSTS AND BENEFITS.— (1) MINIMIZING NEGATIVE IMPACT.—The Secretary shall use 

the authority under this Act in a manner that will minimize 

any potential long-term negative impact on the taxpayer, taking into account the direct outlays, potential long-term returns 

on assets purchased, and the overall economic benefits of the 

program, including economic benefits due to improvements in 

economic activity and the availability of credit, the impact on 

the savings and pensions of individuals, and reductions in 

losses to the Federal Government. 

(2) AUTHORITY.—In carrying out paragraph (1), the Secretary 

shall— 

(A) hold the assets to maturity or for resale for and until 

such time as the Secretary determines that the market is 

optimal for selling such assets, in order to maximize the 

value for taxpayers; and 

(B) sell such assets at a price that the Secretary determines, based on available financial analysis, will maximize 

return on investment for the Federal Government. 

(3) PRIVATE SECTOR PARTICIPATION.—The Secretary shall encourage the private sector to participate in purchases of troubled assets, and to invest in financial institutions, consistent 

with the provisions of this section. 

(b) USE OF MARKET MECHANISMS.—In making purchases under 

this Act, the Secretary shall— 

(1) make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this 

Act; and 

(2) maximize the efficiency of the use of taxpayer resources 

by using market mechanisms, including auctions or reverse 

auctions, where appropriate. 

(c) DIRECT PURCHASES.—If the Secretary determines that use of 

a market mechanism under subsection (b) is not feasible or appropriate, and the purposes of the Act are best met through direct purchases from an individual financial institution, the Secretary shall 


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16 

pursue additional measures to ensure that prices paid for assets 

are reasonable and reflect the underlying value of the asset. 

(d) CONDITIONS ON PURCHASE AUTHORITY FOR WARRANTS AND

DEBT INSTRUMENTS.— (1) IN GENERAL.—The Secretary may not purchase, or make 

any commitment to purchase, any troubled asset under the authority of this Act, unless the Secretary receives from the financial institution from which such assets are to be purchased— 

(A) in the case of a financial 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 financial institution, or voting stock with respect to which, the Secretary 

agrees not to exercise voting power, as the Secretary determines appropriate; or 

(B) in the case of any financial institution other than one 

described in subparagraph (A), a warrant for common or 

preferred stock, or a senior debt instrument from such financial institution, as described in paragraph (2)(C). 

(2) TERMS AND CONDITIONS.—The terms and conditions of 

any warrant or senior debt instrument required under paragraph (1) shall meet the following requirements: 

(A) PURPOSES.—Such terms and conditions shall, at a 

minimum, be designed— 

(i) to provide for reasonable participation by the Secretary, for the benefit of taxpayers, in equity appreciation in the case of a warrant or other equity security, 

or a reasonable interest rate premium, in the case of 

a debt instrument; and 

(ii) to provide additional protection for the taxpayer 

against losses from sale of assets by the Secretary 

under this Act and the administrative expenses of the 

TARP. 

(B) AUTHORITY TO SELL, EXERCISE, OR SURRENDER.—The 

Secretary may sell, exercise, or surrender a warrant or any 

senior debt instrument received under this subsection, 

based on the conditions established under subparagraph 

(A). 

(C) CONVERSION.—The warrant shall provide that if, 

after the warrant is received by the Secretary under this 

subsection, the financial institution that issued the warrant is no longer listed or traded on a national securities 

exchange or securities association, as described in paragraph (1)(A), such warrants shall convert to senior debt, or 

contain appropriate protections for the Secretary to ensure 

that the Treasury is appropriately compensated for the 

value of the warrant, in an amount determined by the Secretary. 

(D) PROTECTIONS.—Any warrant representing securities 

to be received by the Secretary under this subsection shall 

contain anti-dilution provisions of the type employed in 

capital market transactions, as determined by the Secretary. Such provisions shall protect the value of the securities from market transactions such as stock splits, stock 


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17 

distributions, dividends, and other distributions, mergers, 

and other forms of reorganization or recapitalization. 

(E) EXERCISE PRICE.—The exercise price for any warrant 

issued pursuant to this subsection shall be set by the Secretary, in the interest of the taxpayers. 

(F) SUFFICIENCY.—The financial institution shall guarantee to the Secretary that it has authorized shares of 

nonvoting stock available to fulfill its obligations under 

this subsection. Should the financial institution not have 

sufficient authorized shares, including preferred shares 

that may carry dividend rights equal to a multiple number 

of common shares, the Secretary may, to the extent necessary, accept a senior debt note in an amount, and on 

such terms as will compensate the Secretary with equivalent value, in the event that a sufficient shareholder vote 

to authorize the necessary additional shares cannot be obtained. 

(3) EXCEPTIONS.— 

(A) DE MINIMIS.—The Secretary shall establish de minimis exceptions to the requirements of this subsection, 

based on the size of the cumulative transactions of troubled assets purchased from any one financial institution 

for the duration of the program, at not more than 

$100,000,000. 

(B) OTHER EXCEPTIONS.—The Secretary shall establish 

an exception to the requirements of this subsection and appropriate alternative requirements for any participating financial institution that is legally prohibited from issuing 

securities and debt instruments, so as not to allow circumvention of the requirements of this section. 

SEC. 114. MARKET TRANSPARENCY. 

(a) PRICING.—To facilitate market transparency, the Secretary 

shall make available to the public, in electronic form, a description, 

amounts, and pricing of assets acquired under this Act, within 2 

business days of purchase, trade, or other disposition. 

(b) DISCLOSURE.—For each type of financial institutions that sells 

troubled assets to the Secretary under this Act, the Secretary shall 

determine whether the public disclosure required for such financial 

institutions with respect to off-balance sheet transactions, derivatives instruments, contingent liabilities, and similar sources of potential exposure is adequate to provide to the public sufficient information as to the true financial position of the institutions. If 

such disclosure is not adequate for that purpose, the Secretary 

shall make recommendations for additional disclosure requirements 

to the relevant regulators. 

SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE. 

(a) AUTHORITY.—The authority of the Secretary to purchase troubled assets under this Act shall be limited as follows: 

(1) Effective upon the date of enactment of this Act, such authority shall be limited to $250,000,000,000 outstanding at any 

one time. 

(2) If at any time, the President submits to the Congress a 

written certification that the Secretary needs to exercise the 

authority under this paragraph, effective upon such submisVerDate Aug 31 2005 05:13 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00017 Fmt 6659 Sfmt 6602 E:\HR\OC\HR903.XXX HR903

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sion, such authority shall be limited to $350,000,000,000 outstanding at any one time. 

(3) If, at any time after the certification in paragraph (2) has 

been made, the President transmits to the Congress a written 

report detailing the plan of the Secretary to exercise the authority under this paragraph, unless there is enacted, within 

15 calendar days of such transmission, a joint resolution described in subsection (c), effective upon the expiration of such 

15-day period, such authority shall be limited to 

$700,000,000,000 outstanding at any one time. 

(b) AGGREGATION OF PURCHASE PRICES.—The amount of troubled 

assets purchased by the Secretary outstanding at any one time 

shall be determined for purposes of the dollar amount limitations 

under subsection (a) by aggregating the purchase prices of all troubled assets held. 

(c) JOINT RESOLUTION OF DISAPPROVAL.— 

(1) IN GENERAL.—Notwithstanding any other provision of 

this section, the Secretary may not exercise any authority to 

make purchases under this Act with regard to any amount in 

excess of $350,000,000,000 previously obligated, as described in 

this section if, within 15 calendar days after the date on which 

Congress receives a report of the plan of the Secretary described in subsection (a)(3), there is enacted into law a joint 

resolution disapproving the plan of the Secretary with respect 

to such additional amount. 

(2) CONTENTS OF JOINT RESOLUTION.—For the purpose of this 

section, the term ‘‘joint resolution’’ means only a joint resolution— 

(A) that is introduced not later than 3 calendar days 

after the date on which the report of the plan of the Secretary referred to in subsection (a)(3) is received by Congress; 

(B) which does not have a preamble; 

(C) the title of which is as follows: ‘‘Joint resolution relating to the disapproval of obligations under the Emergency Economic Stabilization Act of 2008’’; and 

(D) the matter after the resolving clause of which is as 

follows: ‘‘That Congress disapproves the obligation of any 

amount exceeding the amounts obligated as described in 

paragraphs (1) and (2) of section 115(a) of the Emergency 

Economic Stabilization Act of 2008.’’. 

(d) FAST TRACK CONSIDERATION IN HOUSE OF REPRESENTATIVES.— 

(1) RECONVENING.—Upon receipt of a report under subsection (a)(3), the Speaker, if the House would otherwise be adjourned, shall notify the Members of the House that, pursuant 

to this section, the House shall convene not later than the second calendar day after receipt of such report; 

(2) REPORTING AND DISCHARGE.—Any committee of the 

House of Representatives to which a joint resolution is referred 

shall report it to the House not later than 5 calendar days 

after the date of receipt of the report described in subsection 

(a)(3). If a committee fails to report the joint resolution within 

that period, the committee shall be discharged from further 


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consideration of the joint resolution and the joint resolution 

shall be referred to the appropriate calendar. 

(3) PROCEEDING TO CONSIDERATION.—After each committee 

authorized to consider a joint resolution reports it to the House 

or has been discharged from its consideration, it shall be in 

order, not later than the sixth day after Congress receives the 

report described in subsection (a)(3), to move to proceed to consider the joint resolution in the House. All points of order 

against the motion are waived. Such a motion shall not be in 

order after the House has disposed of a motion to proceed on 

the joint resolution. The previous question shall be considered 

as ordered on the motion to its adoption without intervening 

motion. The motion shall not be debatable. A motion to reconsider the vote by which the motion is disposed of shall not be 

in order. 

(4) CONSIDERATION.—The joint resolution shall be considered 

as read. All points of order against the joint resolution and 

against its consideration are waived. The previous question 

shall be considered as ordered on the joint resolution to its passage without intervening motion except two hours of debate 

equally divided and controlled by the proponent and an opponent. A motion to reconsider the vote on passage of the joint 

resolution shall not be in order. 

(e) FAST TRACK CONSIDERATION IN SENATE.— (1) RECONVENING.—Upon receipt of a report under subsection (a)(3), if the Senate has adjourned or recessed for more 

than 2 days, the majority leader of the Senate, after consultation with the minority leader of the Senate, shall notify the 

Members of the Senate that, pursuant to this section, the Senate shall convene not later than the second calendar day after 

receipt of such message. 

(2) PLACEMENT ON CALENDAR.—Upon introduction in the 

Senate, the joint resolution shall be placed immediately on the 

calendar. 

(3) FLOOR CONSIDERATION.— (A) IN GENERAL.—Notwithstanding Rule XXII of the 

Standing Rules of the Senate, it is in order at any time 

during the period beginning on the 4th day after the date 

on which Congress receives a report of the plan of the Secretary described in subsection (a)(3) and ending on the 6th 

day after the date on which Congress receives a report of 

the plan of the Secretary described in subsection (a)(3) 

(even though a previous motion to the same effect has 

been disagreed to) to move to proceed to the consideration 

of the joint resolution, and all points of order against the 

joint resolution (and against consideration of the joint resolution) are waived. The motion to proceed is not debatable. The motion is not subject to a motion to postpone. A 

motion to reconsider the vote by which the motion is 

agreed to or disagreed to shall not be in order. If a motion 

to proceed to the consideration of the resolution is agreed 

to, the joint resolution shall remain the unfinished business until disposed of. 

(B) DEBATE.—Debate on the joint resolution, and on all 

debatable motions and appeals in connection therewith, 


bajohnson on PROD1PC77 with REPORTS
20 

shall be limited to not more than 10 hours, which shall be 

divided equally between the majority and minority leaders 

or their designees. A motion further to limit debate is in 

order and not debatable. An amendment to, or a motion to 

postpone, or a motion to proceed to the consideration of 

other business, or a motion to recommit the joint resolution is not in order. 

(C) VOTE ON PASSAGE.—The vote on passage shall occur 

immediately following the conclusion of the debate on a 

joint resolution, and a single quorum call at the conclusion 

of the debate if requested in accordance with the rules of 

the Senate. 

(D) RULINGS OF THE CHAIR ON PROCEDURE.—Appeals 

from the decisions of the Chair relating to the application 

of the rules of the Senate, as the case may be, to the procedure relating to a joint resolution shall be decided without 

debate. 

(f) RULES RELATING TO SENATE AND HOUSE OF REPRESENTATIVES.— 

(1) COORDINATION WITH ACTION BY OTHER HOUSE.—If, before 

the passage by one House of a joint resolution of that House, 

that House receives from the other House a joint resolution, 

then the following procedures shall apply: 

(A) The joint resolution of the other House shall not be 

referred to a committee. 

(B) With respect to a joint resolution of the House receiving the resolution— 

(i) the procedure in that House shall be the same as 

if no joint resolution had been received from the other 

House; but 

(ii) the vote on passage shall be on the joint resolution of the other House. 

(2) TREATMENT OF JOINT RESOLUTION OF OTHER HOUSE.—If 

one House fails to introduce or consider a joint resolution 

under this section, the joint resolution of the other House shall 

be entitled to expedited floor procedures under this section. 

(3) TREATMENT OF COMPANION MEASURES.—If, following passage of the joint resolution in the Senate, the Senate then receives the companion measure from the House of Representatives, the companion measure shall not be debatable. 

(4) CONSIDERATION AFTER PASSAGE.— 

(A) IN GENERAL.—If Congress passes a joint resolution, 

the period beginning on the date the President is presented with the joint resolution and ending on the date the 

President takes action with respect to the joint resolution 

shall be disregarded in computing the 15-calendar day period described in subsection (a)(3). 

(B) VETOES.—If the President vetoes the joint resolution— 

(i) the period beginning on the date the President 

vetoes the joint resolution and ending on the date the 

Congress receives the veto message with respect to the 

joint resolution shall be disregarded in computing the 

15-calendar day period described in subsection (a)(3), 

and 


bajohnson on PROD1PC77 with REPORTS
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(ii) debate on a veto message in the Senate under 

this section shall be 1 hour equally divided between 

the majority and minority leaders or their designees. 

(5) RULES OF HOUSE OF REPRESENTATIVES AND SENATE.—This 

subsection and subsections (c), (d), and (e) are enacted by Congress— 

(A) as an exercise of the rulemaking power of the Senate 

and House of Representatives, respectively, and as such it 

is deemed a part of the rules of each House, respectively, 

but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution, and 

it supersedes other rules only to the extent that it is inconsistent with such rules; and 

(B) with full recognition of the constitutional right of either House to change the rules (so far as relating to the 

procedure of that House) at any time, in the same manner, 

and to the same extent as in the case of any other rule of 

that House. 

SEC. 116. OVERSIGHT AND AUDITS. 

(a) COMPTROLLER GENERAL OVERSIGHT.— (1) SCOPE OF OVERSIGHT.—The Comptroller General of the 

United States shall, upon establishment of the troubled assets 

relief program under this Act (in this section referred to as the 

‘‘TARP’’), commence ongoing oversight of the activities and performance of the TARP and of any agents and representatives 

of the TARP (as related to the agent or representative’s activities on behalf of or under the authority of the TARP), including 

vehicles established by the Secretary under this Act. The subjects of such oversight shall include the following: 

(A) The performance of the TARP in meeting the purposes of this Act, particularly those involving— 

(i) foreclosure mitigation; 

(ii) cost reduction; 

(iii) whether it has provided stability or prevented 

disruption to the financial markets or the banking system; and 

(iv) whether it has protected taxpayers. 

(B) The financial condition and internal controls of the 

TARP, its representatives and agents. 

(C) Characteristics of transactions and commitments entered into, including transaction type, frequency, size, 

prices paid, and all other relevant terms and conditions, 

and the timing, duration and terms of any future commitments to purchase assets. 

(D) Characteristics and disposition of acquired assets, including type, acquisition price, current market value, sale 

prices and terms, and use of proceeds from sales. 

(E) Efficiency of the operations of the TARP in the use 

of appropriated funds. 

(F) Compliance with all applicable laws and regulations 

by the TARP, its agents and representatives. 

(G) The efforts of the TARP to prevent, identify, and 

minimize conflicts of interest involving any agent or representative performing activities on behalf of or under the 

authority of the TARP. 


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(H) The efficacy of contracting procedures pursuant to 

section 107(b), including, as applicable, the efforts of the 

TARP in evaluating proposals for inclusion and contracting 

to the maximum extent possible of minorities (as such 

term is defined in 1204(c) of the Financial Institutions Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 

1811 note), women, and minority- and women-owned businesses, including ascertaining and reporting the total 

amount of fees paid and other value delivered by the 

TARP to all of its agents and representatives, and such 

amounts paid or delivered to such firms that are minorityand women-owned businesses (as such terms are defined 

in section 21A of the Federal Home Loan Bank Act (12 

U.S.C. 1441a)). 

(2) CONDUCT AND ADMINISTRATION OF OVERSIGHT.— 

(A) GAO PRESENCE.—The Secretary shall provide the 

Comptroller General with appropriate space and facilities 

in the Department of the Treasury as necessary to facilitate oversight of the TARP until the termination date established in section 120. 

(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 TARP, or any vehicles established by the Secretary under this Act, and to the officers, 

directors, employees, independent public accountants, financial advisors, and other agents and representatives of 

the TARP (as related to the agent or representative’s activities on behalf of or under the authority of the TARP) 

or any such vehicle 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. 

(C) REIMBURSEMENT OF COSTS.—The Treasury shall reimburse the Government Accountability Office for the full 

cost of any such oversight activities as billed therefor by 

the Comptroller General of the United States. Such reimbursements shall be credited to the appropriation account 

‘‘Salaries and Expenses, Government Accountability Office’’ 

current when the payment is received and remain available until expended. 

(3) REPORTING.—The Comptroller General shall submit reports of findings under this section, regularly and no less frequently than once every 60 days, to the appropriate committees of Congress, and the Special Inspector General for the 

Troubled Asset Relief Program established under this Act on 

the activities and performance of the TARP. The Comptroller 

may also submit special reports under this subsection as warranted by the findings of its oversight activities. 

(b) COMPTROLLER GENERAL AUDITS.— 


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(1) ANNUAL AUDIT.—The TARP shall annually prepare and 

issue to the appropriate committees of Congress and the public 

audited financial statements prepared in accordance with generally accepted accounting principles, and the Comptroller 

General shall annually audit such statements in accordance 

with generally accepted auditing standards. The Treasury shall 

reimburse the Government Accountability Office for the full 

cost of any such audit as billed therefor by the Comptroller 

General. Such reimbursements shall be credited to the appropriation account ‘‘Salaries and Expenses, Government Accountability Office’’ current when the payment is received and remain available until expended. The financial statements prepared under this paragraph shall be on the fiscal year basis 

prescribed under section 1102 of title 31, United States Code. 

(2) AUTHORITY.—The Comptroller General may audit the 

programs, activities, receipts, expenditures, and financial 

transactions of the TARP and any agents and representatives 

of the TARP (as related to the agent or representative’s activities on behalf of or under the authority of the TARP), including 

vehicles established by the Secretary under this Act. 

(3) CORRECTIVE RESPONSES TO AUDIT PROBLEMS.—The TARP 

shall— 

(A) take action to address deficiencies identified by the 

Comptroller General or other auditor engaged by the 

TARP; or 

(B) certify to appropriate committees of Congress that no 

action is necessary or appropriate. 

(c) INTERNAL CONTROL.— (1) ESTABLISHMENT.—The TARP shall establish and maintain an effective system of internal control, consistent with the 

standards prescribed under section 3512(c) of title 31, United 

States Code, that provides reasonable assurance of— 

(A) the effectiveness and efficiency of operations, including the use of the resources of the TARP; 

(B) the reliability of financial reporting, including financial statements and other reports for internal and external 

use; and 

(C) compliance with applicable laws and regulations. 

(2) REPORTING.—In conjunction with each annual financial 

statement issued under this section, the TARP shall— 

(A) state the responsibility of management for establishing and maintaining adequate internal control over financial reporting; and 

(B) state its assessment, as of the end of the most recent 

year covered by such financial statement of the TARP, of 

the effectiveness of the internal control over financial reporting. 

(d) SHARING OF INFORMATION.—Any report or audit required 

under this section shall also be submitted to the Congressional 

Oversight Panel established under section 125. 

(e) TERMINATION.—Any oversight, reporting, or audit requirement under this section shall terminate on the later of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been sold or transferred out of 

the ownership or control of the Federal Government; or 


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(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY. 

(a) STUDY.—The Comptroller General shall undertake a study to 

determine the extent to which leverage and sudden deleveraging of 

financial institutions was a factor behind the current financial crisis. 

(b) CONTENT.—The study required by this section shall include— 

(1) an analysis of the roles and responsibilities of the Board, 

the Securities and Exchange Commission, the Secretary, and 

other Federal banking agencies with respect to monitoring leverage and acting to curtail excessive leveraging; 

(2) an analysis of the authority of the Board to regulate leverage, including by setting margin requirements, and what 

process the Board used to decide whether or not to use its authority; 

(3) an analysis of any usage of the margin authority by the 

Board; and 

(4) recommendations for the Board and appropriate committees of Congress with respect to the existing authority of the 

Board. 

(c) REPORT.—Not later than June 1, 2009, the Comptroller General shall complete and submit a report on the study required by 

this section to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the 

House of Representatives. 

(d) SHARING OF INFORMATION.—Any reports required under this 

section shall also be submitted to the Congressional Oversight 

Panel established under section 125. 

SEC. 118. FUNDING. 

For the purpose of the authorities granted in this Act, and for 

the costs of administering those authorities, the Secretary may use 

the proceeds of the sale of any securities issued under chapter 31 

of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, 

are extended to include actions authorized by this Act, including 

the payment of administrative expenses. Any funds expended or obligated by the Secretary for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure or obligation. 

SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS. 

(a) JUDICIAL REVIEW.— 

(1) STANDARD.—Actions by the Secretary pursuant to the authority of this Act shall be subject to chapter 7 of title 5, 

United States Code, including that such final actions shall be 

held unlawful and set aside if found to be arbitrary, capricious, 

an abuse of discretion, or not in accordance with law. 

(2) LIMITATIONS ON EQUITABLE RELIEF.— 

(A) INJUNCTION.—No injunction or other form of equitable relief shall be issued against the Secretary for actions pursuant to section 101, 102, 106, and 109, other 

than to remedy a violation of the Constitution. 

(B) TEMPORARY RESTRAINING ORDER.—Any request for a 

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tions pursuant to this Act shall be considered and granted 

or denied by the court within 3 days of the date of the request. 

(C) PRELIMINARY INJUNCTION.—Any request for a preliminary injunction against the Secretary for actions pursuant to this Act shall be considered and granted or denied 

by the court on an expedited basis consistent with the provisions of rule 65(b)(3) of the Federal Rules of Civil Procedure, or any successor thereto. 

(D) PERMANENT INJUNCTION.—Any request for a permanent injunction against the Secretary for actions pursuant 

to this Act shall be considered and granted or denied by 

the court on an expedited basis. Whenever possible, the 

court shall consolidate trial on the merits with any hearing 

on a request for a preliminary injunction, consistent with 

the provisions of rule 65(a)(2) of the Federal Rules of Civil 

Procedure, or any successor thereto. 

(3) LIMITATION ON ACTIONS BY PARTICIPATING COMPANIES.— 

No action or claims may be brought against the Secretary by 

any person that divests its assets with respect to its participation in a program under this Act, except as provided in paragraph (1), other than as expressly provided in a written contract with the Secretary. 

(4) STAYS.—Any injunction or other form of equitable relief 

issued against the Secretary for actions pursuant to section 

101, 102, 106, and 109, shall be automatically stayed. The stay 

shall be lifted unless the Secretary seeks a stay from a higher 

court within 3 calendar days after the date on which the relief 

is issued. 

(b) RELATED MATTERS.— 

(1) TREATMENT OF HOMEOWNERS’ RIGHTS.—The terms of any 

residential mortgage loan that is part of any purchase by the 

Secretary under this Act shall remain subject to all claims and 

defenses that would otherwise apply, notwithstanding the exercise of authority by the Secretary under this Act. 

(2) SAVINGS CLAUSE.—Any exercise of the authority of the 

Secretary pursuant to this Act shall not impair the claims or 

defenses that would otherwise apply with respect to persons 

other than the Secretary. Except as established in any contract, a servicer of pooled residential mortgages owes any duty 

to determine whether the net present value of the payments on 

the loan, as modified, is likely to be greater than the anticipated net recovery that would result from foreclosure to all investors and holders of beneficial interests in such investment, 

but not to any individual or groups of investors or beneficial 

interest holders, and shall be deemed to act in the best interests of all such investors or holders of beneficial interests if the 

servicer agrees to or implements a modification or workout 

plan when the servicer takes reasonable loss mitigation actions, including partial payments. 

SEC. 120. TERMINATION OF AUTHORITY. 

(a) TERMINATION.—The authorities provided under sections 

101(a), excluding section 101(a)(3), and 102 shall terminate on December 31, 2009. 


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26 

(b) EXTENSION UPON CERTIFICATION.—The Secretary, upon submission of a written certification to Congress, may extend the authority provided under this Act to expire not later than 2 years 

from the date of enactment of this Act. Such certification shall include a justification of why the extension is necessary to assist 

American families and stabilize financial markets, as well as the 

expected cost to the taxpayers for such an extension. 

SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET 

RELIEF PROGRAM. 

(a) OFFICE OF INSPECTOR GENERAL.—There is hereby established 

the Office of the Special Inspector General for the Troubled Asset 

Relief Program. 

(b) APPOINTMENT OF INSPECTOR GENERAL; REMOVAL.—(1) The 

head of the Office of the Special Inspector General for the Troubled 

Asset Relief Program is the Special Inspector General for the Troubled Asset Relief Program (in this section referred to as the ‘‘Special Inspector General’’), who shall be appointed by the President, 

by and with the advice and consent of the Senate. 

(2) The appointment of the Special Inspector General shall be 

made on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public 

administration, or investigations. 

(3) The nomination of an individual as Special Inspector General 

shall be made as soon as practicable after the establishment of any 

program under sections 101 and 102. 

(4) The Special Inspector General shall be removable from office 

in accordance with the provisions of section 3(b) of the Inspector 

General Act of 1978 (5 U.S.C. App.). 

(5) For purposes of section 7324 of title 5, United States Code, 

the Special Inspector General shall not be considered an employee 

who determines policies to be pursued by the United States in the 

nationwide administration of Federal law. 

(6) The annual rate of basic pay of the Special Inspector General 

shall be the annual rate of basic pay provided for positions at level 

IV of the Executive Schedule under section 5315 of title 5, United 

States Code. 

(c) DUTIES.—(1) It shall be the duty of the Special Inspector General to conduct, supervise, and coordinate audits and investigations 

of the purchase, management, and sale of assets by the Secretary 

of the Treasury under any program established by the Secretary 

under section 101, and the management by the Secretary of any 

program established under section 102, including by collecting and 

summarizing the following information: 

(A) A description of the categories of troubled assets purchased or otherwise procured by the Secretary. 

(B) A listing of the troubled assets purchased in each such 

category described under subparagraph (A). 

(C) An explanation of the reasons the Secretary deemed it 

necessary to purchase each such troubled asset. 

(D) A listing of each financial institution that such troubled 

assets were purchased from. 

(E) A listing of and detailed biographical information on each 

person or entity hired to manage such troubled assets. 

(F) A current estimate of the total amount of troubled assets 

purchased pursuant to any program established under section 


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27 

101, the amount of troubled assets on the books of the Treasury, the amount of troubled assets sold, and the profit and loss 

incurred on each sale or disposition of each such troubled 

asset. 

(G) A listing of the insurance contracts issued under section 

102. 

(2) The Special Inspector General shall establish, maintain, and 

oversee such systems, procedures, and controls as the Special Inspector General considers appropriate to discharge the duty under 

paragraph (1). 

(3) In addition to the duties specified in paragraphs (1) and (2), 

the Inspector General shall also have the duties and responsibilities of inspectors general under the Inspector General Act of 1978. 

(d) POWERS AND AUTHORITIES.—(1) In carrying out the duties 

specified in subsection (c), the Special Inspector General shall have 

the authorities provided in section 6 of the Inspector General Act 

of 1978. 

(2) The Special Inspector General shall carry out the duties specified in subsection (c)(1) in accordance with section 4(b)(1) of the Inspector General Act of 1978. 

(e) PERSONNEL, FACILITIES, AND OTHER RESOURCES.—(1) The 

Special Inspector General may select, appoint, and employ such officers and employees as may be necessary for carrying out the duties of the Special Inspector General, subject to the provisions of 

title 5, United States Code, governing appointments in the competitive service, and the provisions of chapter 51 and subchapter III of 

chapter 53 of such title, relating to classification and General 

Schedule pay rates. 

(2) The Special Inspector General may obtain services as authorized by section 3109 of title 5, United States Code, at daily rates 

not to exceed the equivalent rate prescribed for grade GS–15 of the 

General Schedule by section 5332 of such title. 

(3) The Special Inspector General may enter into contracts and 

other arrangements for audits, studies, analyses, and other services 

with public agencies and with private persons, and make such payments as may be necessary to carry out the duties of the Inspector 

General. 

(4)(A) Upon request of the Special Inspector General for information or assistance from any department, agency, or other entity of 

the Federal Government, the head of such entity shall, insofar as 

is practicable and not in contravention of any existing law, furnish 

such information or assistance to the Special Inspector General, or 

an authorized designee. 

(B) Whenever information or assistance requested by the Special 

Inspector General is, in the judgment of the Special Inspector General, unreasonably refused or not provided, the Special Inspector 

General shall report the circumstances to the appropriate committees of Congress without delay. 

(f) REPORTS.—(1) Not later than 60 days after the confirmation 

of the Special Inspector General, and every calendar quarter thereafter, the Special Inspector General shall submit to the appropriate 

committees of Congress a report summarizing the activities of the 

Special Inspector General during the 120-day period ending on the 

date of such report. Each report shall include, for the period covered by such report, a detailed statement of all purchases, obligaVerDate Aug 31 2005 05:13 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6602 E:\HR\OC\HR903.XXX HR903

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tions, expenditures, and revenues associated with any program established by the Secretary of the Treasury under sections 101 and 

102, as well as the information collected under subsection (c)(1). 

(2) Nothing in this subsection shall be construed to authorize the 

public disclosure of information that is— 

(A) specifically prohibited from disclosure by any other provision of law; 

(B) specifically required by Executive order to be protected 

from disclosure in the interest of national defense or national 

security or in the conduct of foreign affairs; or 

(C) a part of an ongoing criminal investigation. 

(3) Any reports required under this section shall also be submitted to the Congressional Oversight Panel established under section 125. 

(g) FUNDING.—(1) Of the amounts made available to the Secretary of the Treasury under section 118, $50,000,000 shall be 

available to the Special Inspector General to carry out this section. 

(2) The amount available under paragraph (1) shall remain available until expended. 

(h) TERMINATION.—The Office of the Special Inspector General 

shall terminate on the later of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been sold or transferred out of 

the ownership or control of the Federal Government; or 

(2) the date of expiration of the last insurance contract 

issued under section 102. 

SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT. 

Subsection (b) of section 3101 of title 31, United States Code, is 

amended by striking out the dollar limitation contained in such 

subsection and inserting ‘‘$11,315,000,000,000’’. 

SEC. 123. CREDIT REFORM. 

(a) IN GENERAL.—Subject to subsection (b), the costs of purchases 

of troubled assets made under section 101(a) and guarantees of 

troubled assets under section 102, and any cash flows associated 

with the activities authorized in section 102 and subsections (a), 

(b), and (c) of section 106 shall be determined as provided under 

the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et. seq.). 

(b) COSTS.—For the purposes of section 502(5) of the Federal 

Credit Reform Act of 1990 (2 U.S.C. 661a(5))— 

(1) the cost of troubled assets and guarantees of troubled assets shall be calculated by adjusting the discount rate in section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and 

(2) the cost of a modification of a troubled asset or guarantee 

of a troubled asset shall be the difference between the current 

estimate consistent with paragraph (1) under the terms of the 

troubled asset or guarantee of the troubled asset and the current estimate consistent with paragraph (1) under the terms of 

the troubled asset or guarantee of the troubled asset, as modified. 

SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. 

Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is 

amended— 

(1) in subsection (e)— 


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29 

(A) in paragraph (1)(B), by inserting before ‘‘a ratio’’ the 

following: ‘‘, or thereafter is likely to have, due to the 

terms of the mortgage being reset,’’; 

(B) in paragraph (2)(B), by inserting before the period at 

the end ‘‘(or such higher percentage as the Board determines, in the discretion of the Board)’’; 

(C) in paragraph (4)(A)— 

(i) in the first sentence, by inserting after ‘‘insured 

loan’’ the following: ‘‘and any payments made under 

this paragraph,’’; and 

(ii) by adding at the end the following: ‘‘Such actions 

may include making payments, which shall be accepted as payment in full of all indebtedness under the eligible mortgage, to any holder of an existing subordinate mortgage, in lieu of any future appreciation payments authorized under subparagraph (B).’’; and 

(2) in subsection (w), by inserting after ‘‘administrative costs’’ 

the following: ‘‘and payments pursuant to subsection (e)(4)(A)’’. 

SEC. 125. CONGRESSIONAL OVERSIGHT PANEL. 

(a) ESTABLISHMENT.—There is hereby established the Congressional Oversight Panel (hereafter in this section referred to as the 

‘‘Oversight Panel’’) as an establishment in the legislative branch. 

(b) DUTIES.—The Oversight Panel shall review the current state 

of the financial markets and the regulatory system and submit the 

following reports to Congress: 

(1) REGULAR REPORTS.— (A) IN GENERAL.—Regular reports of the Oversight Panel 

shall include the following: 

(i) The use by the Secretary of authority under this 

Act, including with respect to the use of contracting 

authority and administration of the program. 

(ii) The impact of purchases made under the Act on 

the financial markets and financial institutions. 

(iii) The extent to which the information made available on transactions under the program has contributed to market transparency. 

(iv) The effectiveness of foreclosure mitigation efforts, and the effectiveness of the program from the 

standpoint of minimizing long-term costs to the taxpayers and maximizing the benefits for taxpayers. 

(B) TIMING.—The reports required under this paragraph 

shall be submitted not later than 30 days after the first exercise by the Secretary of the authority under section 

101(a) or 102, and every 30 days thereafter. 

(2) SPECIAL REPORT ON REGULATORY REFORM.—The Oversight 

Panel shall submit a special report on regulatory reform not 

later than January 20, 2009, analyzing the current state of the 

regulatory system and its effectiveness at overseeing the participants in the financial system and protecting consumers, 

and providing recommendations for improvement, including 

recommendations regarding whether any participants in the financial markets that are currently outside the regulatory system should become subject to the regulatory system, the rationale underlying such recommendation, and whether there 

are any gaps in existing consumer protections. 


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30 

(c) MEMBERSHIP.— 

(1) IN GENERAL.—The Oversight Panel shall consist of 5 

members, as follows: 

(A) 1 member appointed by the Speaker of the House of 

Representatives. 

(B) 1 member appointed by the minority leader of the 

House of Representatives. 

(C) 1 member appointed by the majority leader of the 

Senate. 

(D) 1 member appointed by the minority leader of the 

Senate. 

(E) 1 member appointed by the Speaker of the House of 

Representatives and the majority leader of the Senate, 

after consultation with the minority leader of the Senate 

and the minority leader of the House of Representatives. 

(2) PAY.—Each member of the Oversight Panel shall each be 

paid at a rate equal to the daily equivalent of the annual rate 

of basic pay for level I of the Executive Schedule for each day 

(including travel time) during which such member is engaged 

in the actual performance of duties vested in the Commission. 

(3) PROHIBITION OF COMPENSATION OF FEDERAL EMPLOYEES.—Members of the Oversight Panel who are full-time officers or employees of the United States or Members of Congress 

may not receive additional pay, allowances, or benefits by reason of their service on the Oversight Panel. 

(4) TRAVEL EXPENSES.—Each member shall receive travel expenses, including per diem in lieu of subsistence, in accordance 

with applicable provisions under subchapter I of chapter 57 of 

title 5, United States Code. 

(5) QUORUM.—Four members of the Oversight Panel shall 

constitute a quorum but a lesser number may hold hearings. 

(6) VACANCIES.—A vacancy on the Oversight Panel shall be 

filled in the manner in which the original appointment was 

made. 

(7) MEETINGS.—The Oversight Panel shall meet at the call 

of the Chairperson or a majority of its members. 

(d) STAFF.— 

(1) IN GENERAL.—The Oversight Panel may appoint and fix 

the pay of any personnel as the Commission considers appropriate. 

(2) EXPERTS AND CONSULTANTS.—The Oversight Panel may 

procure temporary and intermittent services under section 

3109(b) of title 5, United States Code. 

(3) STAFF OF AGENCIES.—Upon request of the Oversight 

Panel, the head of any Federal department or agency may detail, on a reimbursable basis, any of the personnel of that department or agency to the Oversight Panel to assist it in carrying out its duties under this Act. 

(e) POWERS.— 

(1) HEARINGS AND SESSIONS.—The Oversight Panel may, for 

the purpose of carrying out this section, hold hearings, sit and 

act at times and places, take testimony, and receive evidence 

as the Panel considers appropriate and may administer oaths 

or affirmations to witnesses appearing before it. 


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31 

(2) POWERS OF MEMBERS AND AGENTS.—Any member or 

agent of the Oversight Panel may, if authorized by the Oversight Panel, take any action which the Oversight Panel is authorized to take by this section. 

(3) OBTAINING OFFICIAL DATA.—The Oversight Panel may secure directly from any department or agency of the United 

States information necessary to enable it to carry out this section. Upon request of the Chairperson of the Oversight Panel, 

the head of that department or agency shall furnish that information to the Oversight Panel. 

(4) REPORTS.—The Oversight Panel shall receive and consider all reports required to be submitted to the Oversight 

Panel under this Act. 

(f) TERMINATION.—The Oversight Panel shall terminate 6 months 

after the termination date specified in section 120. 

(g) FUNDING FOR EXPENSES.— (1) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to the Oversight Panel such sums as may 

be necessary for any fiscal year, half of which shall be derived 

from the applicable account of the House of Representatives, 

and half of which shall be derived from the contingent fund of 

the Senate. 

(2) REIMBURSEMENT OF AMOUNTS.—An amount equal to the 

expenses of the Oversight Panel shall be promptly transferred 

by the Secretary, from time to time upon the presentment of 

a statement of such expenses by the Chairperson of the Oversight Panel, from funds made available to the Secretary under 

this Act to the applicable fund of the House of Representatives 

and the contingent fund of the Senate, as appropriate, as reimbursement for amounts expended from such account and fund 

under paragraph (1). 

SEC. 126. FDIC AUTHORITY. 

(a) IN GENERAL.—Section 18(a) of the Federal Deposit Insurance 

Act (12 U.S.C. 1828(a)) is amended by adding at the end the following new paragraph: 

‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC NAMES, AND MIS- REPRESENTATION TO INDICATE INSURED STATUS.— ‘‘(A) PROHIBITION ON FALSE ADVERTISING AND MISUSE OF

FDIC NAMES.—No person may represent or imply that any 

deposit liability, obligation, certificate, or share is insured 

or guaranteed by the Corporation, if such deposit liability, 

obligation, certificate, or share is not insured or guaranteed by the Corporation— 

‘‘(i) by using the terms ‘Federal Deposit’, ‘Federal 

Deposit Insurance’, ‘Federal Deposit Insurance Corporation’, any combination of such terms, or the abbreviation ‘FDIC’ as part of the business name or firm 

name of any person, including any corporation, partnership, business trust, association, or other business 

entity; or 

‘‘(ii) by using such terms or any other terms, sign, 

or symbol as part of an advertisement, solicitation, or 

other document. 

‘‘(B) PROHIBITION ON MISREPRESENTATIONS OF INSURED

STATUS.—No person may knowingly misrepresent— 


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‘‘(i) that any deposit liability, obligation, certificate, 

or share is insured, under this Act, if such deposit liability, obligation, certificate, or share is not so insured; or 

‘‘(ii) the extent to which or the manner in which any 

deposit liability, obligation, certificate, or share is insured under this Act, if such deposit liability, obligation, certificate, or share is not so insured, to the extent or in the manner represented. 

‘‘(C) AUTHORITY OF THE APPROPRIATE FEDERAL BANKING

AGENCY.—The appropriate Federal banking agency shall 

have enforcement authority in the case of a violation of 

this paragraph by any person for which the agency is the 

appropriate Federal banking agency, or any institution-affiliated party thereof. 

‘‘(D) CORPORATION AUTHORITY IF THE APPROPRIATE FEDERAL BANKING AGENCY FAILS TO FOLLOW RECOMMENDA- TION.— 

‘‘(i) RECOMMENDATION.—The Corporation may recommend in writing to the appropriate Federal banking 

agency that the agency take any enforcement action 

authorized under section 8 for purposes of enforcement 

of this paragraph with respect to any person for which 

the agency is the appropriate Federal banking agency 

or any institution-affiliated party thereof. 

‘‘(ii) AGENCY RESPONSE.—If the appropriate Federal 

banking agency does not, within 30 days of the date 

of receipt of a recommendation under clause (i), take 

the enforcement action with respect to this paragraph 

recommended by the Corporation or provide a plan acceptable to the Corporation for responding to the situation presented, the Corporation may take the recommended enforcement action against such person or 

institution-affiliated party. 

‘‘(E) ADDITIONAL AUTHORITY.—In addition to its authority under subparagraphs (C) and (D), for purposes of this 

paragraph, the Corporation shall have, in the same manner and to the same extent as with respect to a State nonmember insured bank— 

‘‘(i) jurisdiction over— 

‘‘(I) any person other than a person for which 

another agency is the appropriate Federal banking agency or any institution-affiliated party 

thereof; and 

‘‘(II) any person that aids or abets a violation of 

this paragraph by a person described in subclause 

(I); and 

‘‘(ii) for purposes of enforcing the requirements of 

this paragraph, the authority of the Corporation 

under— 

‘‘(I) section 10(c) to conduct investigations; and 

‘‘(II) subsections (b), (c), (d) and (i) of section 8 

to conduct enforcement actions. 

‘‘(F) OTHER ACTIONS PRESERVED.—No provision of this 

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wise available, under the laws of the United States or any 

State, to any Federal or State agency or individual.’’. 

(b) ENFORCEMENT ORDERS.—Section 8(c) of the Federal Deposit 

Insurance Act (12 U.S.C. 1818(c)) is amended by adding at the end 

the following new paragraph: 

‘‘(4) FALSE ADVERTISING OR MISUSE OF NAMES TO INDICATE IN- SURED STATUS.— ‘‘(A) TEMPORARY ORDER.— ‘‘(i) IN GENERAL.—If a notice of charges served under 

subsection (b)(1) specifies on the basis of particular 

facts that any person engaged or is engaging in conduct described in section 18(a)(4), the Corporation or 

other appropriate Federal banking agency may issue a 

temporary order requiring— 

‘‘(I) the immediate cessation of any activity or 

practice described, which gave rise to the notice of 

charges; and 

‘‘(II) affirmative action to prevent any further, 

or to remedy any existing, violation. 

‘‘(ii) EFFECT OF ORDER.—Any temporary order issued 

under this subparagraph shall take effect upon service. 

‘‘(B) EFFECTIVE PERIOD OF TEMPORARY ORDER.—A temporary order issued under subparagraph (A) shall remain 

effective and enforceable, pending the completion of an administrative proceeding pursuant to subsection (b)(1) in 

connection with the notice of charges— 

‘‘(i) until such time as the Corporation or other appropriate Federal banking agency dismisses the 

charges specified in such notice; or 

‘‘(ii) if a cease-and-desist order is issued against 

such person, until the effective date of such order. 

‘‘(C) CIVIL MONEY PENALTIES.—Any violation of section 

18(a)(4) shall be subject to civil money penalties, as set 

forth in subsection (i), except that for any person other 

than an insured depository institution or an institution-affiliated party that is found to have violated this paragraph, the Corporation or other appropriate Federal banking agency shall not be required to demonstrate any loss 

to an insured depository institution.’’. 

(c) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—Section 13(c) 

of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended by adding at the end the following new paragraph: 

‘‘(11) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—No provision contained in any existing or future standstill, confidentiality, or other agreement that, directly or indirectly— 

‘‘(A) affects, restricts, or limits the ability of any person 

to offer to acquire or acquire, 

‘‘(B) prohibits any person from offering to acquire or acquiring, or 

‘‘(C) prohibits any person from using any previously disclosed information in connection with any such offer to acquire or acquisition of, 

all or part of any insured depository institution, including any 

liabilities, assets, or interest therein, in connection with any 


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34 

transaction in which the Corporation exercises its authority 

under section 11 or 13, shall be enforceable against or impose 

any liability on such person, as such enforcement or liability 

shall be contrary to public policy.’’. 

(d) TECHNICAL AND CONFORMING AMENDMENTS.—Section 18 of 

the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended— 

(1) in subsection (a)(3)— 

(A) by striking ‘‘this subsection’’ the first place that term 

appears and inserting ‘‘paragraph (1)’’; and 

(B) by striking ‘‘this subsection’’ the second place that 

term appears and inserting ‘‘paragraph (2)’’; and 

(2) in the heading for subsection (a), by striking ‘‘INSURANCE

LOGO.—’’ and inserting ‘‘REPRESENTATIONS OF DEPOSIT INSUR- ANCE.—’’. 

SEC. 127. COOPERATION WITH THE FBI. 

Any Federal financial regulatory agency shall cooperate with the 

Federal Bureau of Investigation and other law enforcement agencies investigating fraud, misrepresentation, and malfeasance with 

respect to development, advertising, and sale of financial products. 

SEC. 128. ACCELERATION OF EFFECTIVE DATE. 

Section 203 of the Financial Services Regulatory Relief Act of 

2006 (12 U.S.C. 461 note) is amended by striking ‘‘October 1, 2011’’ 

and inserting ‘‘October 1, 2008’’. 

SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY. 

(a) IN GENERAL.—Not later than 7 days after the date on which 

the Board exercises its authority under the third paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 343; relating to discounts for individuals, partnerships, and corporations) the Board 

shall provide to the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on Financial Services of 

the House of Representatives a report which includes— 

(1) the justification for exercising the authority; and 

(2) the specific terms of the actions of the Board, including 

the size and duration of the lending, available information concerning the value of any collateral held with respect to such a 

loan, the recipient of warrants or any other potential equity in 

exchange for the loan, and any expected cost to the taxpayers 

for such exercise. 

(b) PERIODIC UPDATES.—The Board shall provide updates to the 

Committees specified in subsection (a) not less frequently than once 

every 60 days while the subject loan is outstanding, including— 

(1) the status of the loan; 

(2) the value of the collateral held by the Federal reserve 

bank which initiated the loan; and 

(3) the projected cost to the taxpayers of the loan. 

(c) CONFIDENTIALITY.—The information submitted to the Congress under this section may be kept confidential, upon the written 

request of the Chairman of the Board, in which case it shall made 

available only to the Chairpersons and Ranking Members of the 

Committees described in subsection (a). 

(d) APPLICABILITY.—The provisions of this section shall be in 

force for all uses of the authority provided under section 13 of the 

Federal Reserve Act occurring during the period beginning on 

March 1, 2008 and ending on the after the date of enactment of 


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this Act, and reports described in subsection (a) shall be required 

beginning not later than 30 days after that date of enactment, with 

respect to any such exercise of authority. 

(e) SHARING OF INFORMATION.—Any reports required under this 

section shall also be submitted to the Congressional Oversight 

Panel established under section 125. 

SEC. 130. TECHNICAL CORRECTIONS. 

(a) IN GENERAL.—Section 128(b)(2) of the Truth in Lending Act 

(15 U.S.C. 1638(b)(2)), as amended by section 2502 of the Mortgage 

Disclosure Improvement Act of 2008 (Public Law 110-289), is 

amended— 

(1) in subparagraph (A), by striking ‘‘In the case’’ and inserting ‘‘Except as provided in subparagraph (G), in the case’’; and 

(2) by amending subparagraph (G) to read as follows: 

‘‘(G)(i) In the case of an extension of credit relating to a 

plan described in section 101(53D) of title 11, United 

States Code— 

‘‘(I) the requirements of subparagraphs (A) through 

(E) shall not apply; and 

‘‘(II) a good faith estimate of the disclosures required 

under subsection (a) shall be made in accordance with 

regulations of the Board under section 121(c) before 

such credit is extended, or shall be delivered or placed 

in the mail not later than 3 business days after the 

date on which the creditor receives the written application of the consumer for such credit, whichever is 

earlier. 

‘‘(ii) If a disclosure statement furnished within 3 business days of the written application (as provided under 

clause (i)(II)) contains an annual percentage rate which is 

subsequently rendered inaccurate, within the meaning of 

section 107(c), the creditor shall furnish another disclosure 

statement at the time of settlement or consummation of 

the transaction.’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection (a) 

shall take effect as if included in the amendments made by section 

2502 of the Mortgage Disclosure Improvement Act of 2008 (Public 

Law 110-289). 

SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT. 

(a) REIMBURSEMENT.—The Secretary shall reimburse the Exchange Stabilization Fund established under section 5302 of title 

31, United States Code, for any funds that are used for the Treasury Money Market Funds Guaranty Program for the United States 

money market mutual fund industry, from funds under this Act. 

(b) LIMITS ON USE OF EXCHANGE STABILIZATION FUND.—The Secretary is prohibited from using the Exchange Stabilization Fund for 

the establishment of any future guaranty programs for the United 

States money market mutual fund industry. 

SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING. 

(a) AUTHORITY.—The Securities and Exchange Commission shall 

have the authority under the securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 

U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or order, the application of Statement Number 157 of the Financial Accounting 


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Standards Board for any issuer (as such term is defined in section 

3(a)(8) of such Act) or with respect to any class or category of transaction if the Commission determines that is necessary or appropriate in the public interest and is consistent with the protection 

of investors. 

(b) SAVINGS PROVISION.—Nothing in subsection (a) shall be construed to restrict or limit any authority of the Securities and Exchange Commission under securities laws as in effect on the date 

of enactment of this Act. 

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

(a) STUDY.—The Securities and Exchange Commission, in consultation with the Board and the Secretary, shall conduct a study 

on mark-to-market accounting standards as provided in Statement 

Number 157 of the Financial Accounting Standards Board, as such 

standards are applicable to financial institutions, including depository institutions. Such a study shall consider at a minimum— 

(1) the effects of such accounting standards on a financial institution’s balance sheet; 

(2) the impacts of such accounting on bank failures in 2008; 

(3) the impact of such standards on the quality of financial 

information available to investors; 

(4) the process used by the Financial Accounting Standards 

Board in developing accounting standards; 

(5) the advisability and feasibility of modifications to such 

standards; and 

(6) alternative accounting standards to those provided in 

such Statement Number 157. 

(b) REPORT.—The Securities and Exchange Commission shall 

submit to Congress a report of such study before the end of the 90- 

day period beginning on the date of the enactment of this Act containing the findings and determinations of the Commission, including such administrative and legislative recommendations as the 

Commission determines appropriate. 

SEC. 134. RECOUPMENT. 

Upon the expiration of the 5-year period beginning upon the date 

of the enactment of this Act, the Director of the Office of Management and Budget, in consultation with the Director of the Congressional Budget Office, shall submit a report to the Congress on the 

net amount within the Troubled Asset Relief Program under this 

Act. In any case where there is a shortfall, the President shall submit a legislative proposal that recoups from the financial industry 

an amount equal to the shortfall in order to ensure that the Troubled Asset Relief Program does not add to the deficit or national 

debt. 

SEC. 135. PRESERVATION OF AUTHORITY. 

With the exception of section 131, nothing in this Act may be 

construed to limit the authority of the Secretary or the Board 

under any other provision of law. 


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TITLE II—BUDGET-RELATED 

PROVISIONS 

SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES. 

Upon request, and to the extent otherwise consistent with law, 

all information used by the Secretary in connection with activities 

authorized under this Act (including the records to which the 

Comptroller General is entitled under this Act) shall be made 

available to congressional support agencies (in accordance with 

their obligations to support the Congress as set out in their authorizing statutes) for the purposes of assisting the committees of Congress with conducting oversight, monitoring, and analysis of the activities authorized under this Act. 

SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET 

AND THE CONGRESSIONAL BUDGET OFFICE. 

(a) REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET.— 

Within 60 days of the first exercise of the authority granted in section 101(a), but in no case later than December 31, 2008, and semiannually thereafter, the Office of Management and Budget shall report to the President and the Congress— 

(1) the estimate, notwithstanding section 502(5)(F) of the 

Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(F)), as of 

the first business day that is at least 30 days prior to the 

issuance of the report, of the cost of the troubled assets, and 

guarantees of the troubled assets, determined in accordance 

with section 123; 

(2) the information used to derive the estimate, including assets purchased or guaranteed, prices paid, revenues received, 

the impact on the deficit and debt, and a description of any 

outstanding commitments to purchase troubled assets; and 

(3) a detailed analysis of how the estimate has changed from 

the previous report. 

Beginning with the second report under subsection (a), the Office 

of Management and Budget shall explain the differences between 

the Congressional Budget Office estimates delivered in accordance 

with subsection (b) and prior Office of Management and Budget estimates. 

(b) REPORTS BY THE CONGRESSIONAL BUDGET OFFICE.—Within 45 

days of receipt by the Congress of each report from the Office of 

Management and Budget under subsection (a), the Congressional 

Budget Office shall report to the Congress the Congressional Budget Office’s assessment of the report submitted by the Office of Management and Budget, including— 

(1) the cost of the troubled assets and guarantees of the troubled assets, 

(2) the information and valuation methods used to calculate 

such cost, and 

(3) the impact on the deficit and the debt. 

(c) FINANCIAL EXPERTISE.—In carrying out the duties in this subsection or performing analyses of activities under this Act, the Director of the Congressional Budget Office may employ personnel 

and procure the services of experts and consultants. 


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(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to 

be appropriated such sums as may be necessary to produce reports 

required by this section. 

SEC. 203. ANALYSIS IN PRESIDENT’S BUDGET. 

(a) IN GENERAL.—Section 1105(a) of title 31, United States Code, 

is amended by adding at the end the following new paragraph: 

‘‘(35) as supplementary materials, a separate analysis of the 

budgetary effects for all prior fiscal years, the current fiscal 

year, the fiscal year for which the budget is submitted, and ensuing fiscal years of the actions the Secretary of the Treasury 

has taken or plans to take using any authority provided in the 

Emergency Economic Stabilization Act of 2008, including— 

‘‘(A) an estimate of the current value of all assets purchased, sold, and guaranteed under the authority provided 

in the Emergency Economic Stabilization Act of 2008 using 

methodology required by the Federal Credit Reform Act of 

1990 (2 U.S.C. 661 et seq.) and section 123 of the Emergency Economic Stabilization Act of 2008; 

‘‘(B) an estimate of the deficit, the debt held by the public, and the gross Federal debt using methodology required 

by the Federal Credit Reform Act of 1990 and section 123 

of the Emergency Economic Stabilization Act of 2008; 

‘‘(C) an estimate of the current value of all assets purchased, sold, and guaranteed under the authority provided 

in the Emergency Economic Stabilization Act of 2008 calculated on a cash basis; 

‘‘(D) a revised estimate of the deficit, the debt held by 

the public, and the gross Federal debt, substituting the 

cash-based estimates in subparagraph (C) for the estimates calculated under subparagraph (A) pursuant to the 

Federal Credit Reform Act of 1990 and section 123 of the 

Emergency Economic Stabilization Act of 2008; and 

‘‘(E) the portion of the deficit which can be attributed to 

any action taken by the Secretary using authority provided 

by the Emergency Economic Stabilization Act of 2008 and 

the extent to which the change in the deficit since the 

most recent estimate is due to a reestimate using the 

methodology required by the Federal Credit Reform Act of 

1990 and section 123 of the Emergency Economic Stabilization Act of 2008.’’ 

(b) CONSULTATION.—In implementing this section, the Director of 

Office of Management and Budget shall consult periodically, but at 

least annually, with the Committee on the Budget of the House of 

Representatives, the Committee on the Budget of the Senate, and 

the Director of the Congressional Budget Office. 

(c) EFFECTIVE DATE.—This section and the amendment made by 

this section shall apply beginning with respect to the fiscal year 

2010 budget submission of the President. 

SEC. 204. EMERGENCY TREATMENT. 

All provisions of this Act are designated as an emergency requirement and necessary to meet emergency needs pursuant to section 204(a) of S. Con. Res 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008 and rescissions of any 


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amounts provided in this Act shall not be counted for purposes of 

budget enforcement. 

TITLE III—TAX PROVISIONS 

SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN PREFERRED STOCK. 

(a) IN GENERAL.—For purposes of the Internal Revenue Code of 

1986, gain or loss from the sale or exchange of any applicable preferred stock by any applicable financial institution shall be treated 

as ordinary income or loss. 

(b) APPLICABLE PREFERRED STOCK.—For purposes of this section, 

the term ‘‘applicable preferred stock’’ means any stock— 

(1) which is preferred stock in— 

(A) the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.), or 

(B) the Federal Home Loan Mortgage Corporation, established pursuant to the Federal Home Loan Mortgage 

Corporation Act (12 U.S.C. 1451 et seq.), and 

(2) which— 

(A) was held by the applicable financial institution on 

September 6, 2008, or 

(B) was sold or exchanged by the applicable financial institution on or after January 1, 2008, and before September 7, 2008. 

(c) APPLICABLE FINANCIAL INSTITUTION.—For purposes of this 

section: 

(1) IN GENERAL.—Except as provided in paragraph (2), the 

term ‘‘applicable financial institution’’ means— 

(A) a financial institution referred to in section 582(c)(2) 

of the Internal Revenue Code of 1986, or 

(B) a depository institution holding company (as defined 

in section 3(w)(1) of the Federal Deposit Insurance Act (12 

U.S.C. 1813(w)(1))). 

(2) SPECIAL RULES FOR CERTAIN SALES.—In the case of— 

(A) a sale or exchange described in subsection (b)(2)(B), 

an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph 

(A) or (B) of paragraph (1) at the time of the sale or exchange, and 

(B) a sale or exchange after September 6, 2008, of preferred stock described in subsection (b)(2)(A), an entity 

shall be treated as an applicable financial institution only 

if it was an entity described in subparagraph (A) or (B) of 

paragraph (1) at all times during the period beginning on 

September 6, 2008, and ending on the date of the sale or 

exchange of the preferred stock. 

(d) SPECIAL RULE FOR CERTAIN PROPERTY NOT HELD ON SEP- TEMBER 6, 2008.—The Secretary of the Treasury or the Secretary’s 

delegate may extend the application of this section to all or a portion of the gain or loss from a sale or exchange in any case where— 

(1) an applicable financial institution sells or exchanges applicable preferred stock after September 6, 2008, which the applicable financial institution did not hold on such date, but the 


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basis of which in the hands of the applicable financial institution at the time of the sale or exchange is the same as the 

basis in the hands of the person which held such stock on such 

date, or 

(2) the applicable financial institution is a partner in a partnership which— 

(A) held such stock on September 6, 2008, and later sold 

or exchanged such stock, or 

(B) sold or exchanged such stock during the period described in subsection (b)(2)(B). 

(e) REGULATORY AUTHORITY.—The Secretary of the Treasury or 

the Secretary’s delegate may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this section. 

(f) EFFECTIVE DATE.—This section shall apply to sales or exchanges occurring after December 31, 2007, in taxable years ending 

after such date. 

SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE COMPENSATION OF EMPLOYERS PARTICIPATING IN THE 

TROUBLED ASSETS RELIEF PROGRAM. 

(a) DENIAL OF DEDUCTION.—Subsection (m) of section 162 of the 

Internal Revenue Code of 1986 is amended by adding at the end 

the following new paragraph: 

‘‘(5) SPECIAL RULE FOR APPLICATION TO EMPLOYERS PARTICI- PATING IN THE TROUBLED ASSETS RELIEF PROGRAM.— ‘‘(A) IN GENERAL.—In the case of an applicable employer, 

no deduction shall be allowed under this chapter— 

‘‘(i) in the case of executive remuneration for any applicable taxable year which is attributable to services 

performed by a covered executive during such applicable taxable year, to the extent that the amount of such 

remuneration exceeds $500,000, or 

‘‘(ii) in the case of deferred deduction executive remuneration for any taxable year for services performed during any applicable taxable year by a covered executive, to the extent that the amount of such 

remuneration exceeds $500,000 reduced (but not below 

zero) by the sum of— 

‘‘(I) the executive remuneration for such applicable taxable year, plus 

‘‘(II) the portion of the deferred deduction executive remuneration for such services which was 

taken into account under this clause in a preceding taxable year. 

‘‘(B) APPLICABLE EMPLOYER.—For purposes of this paragraph— 

‘‘(i) IN GENERAL.—Except as provided in clause (ii), 

the term ‘applicable employer’ means any employer 

from whom 1 or more troubled assets are acquired 

under a program established by the Secretary under 

section 101(a) of the Emergency Economic Stabilization Act of 2008 if the aggregate amount of the assets 

so acquired for all taxable years exceeds $300,000,000. 

‘‘(ii) DISREGARD OF CERTAIN ASSETS SOLD THROUGH

DIRECT PURCHASE.—If the only sales of troubled assets 

by an employer under the program described in clause 


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(i) are through 1 or more direct purchases (within the 

meaning of section 113(c) of the Emergency Economic 

Stabilization Act of 2008), such assets shall not be 

taken into account under clause (i) in determining 

whether the employer is an applicable employer for 

purposes of this paragraph. 

‘‘(iii) AGGREGATION RULES.—Two or more persons 

who are treated as a single employer under subsection 

(b) or (c) of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of either such subsection, paragraphs (2) and (3) 

thereof shall be disregarded. 

‘‘(C) APPLICABLE TAXABLE YEAR.—For purposes of this 

paragraph, the term ‘applicable taxable year’ means, with 

respect to any employer— 

‘‘(i) the first taxable year of the employer— 

‘‘(I) which includes any portion of the period 

during which the authorities under section 101(a) 

of the Emergency Economic Stabilization Act of 

2008 are in effect (determined under section 120 

thereof), and 

‘‘(II) in which the aggregate amount of troubled 

assets acquired from the employer during the taxable year pursuant to such authorities (other than 

assets to which subparagraph (B)(ii) applies), 

when added to the aggregate amount so acquired 

for all preceding taxable years, exceeds 

$300,000,000, and 

‘‘(ii) any subsequent taxable year which includes any 

portion of such period. 

‘‘(D) COVERED EXECUTIVE.—For purposes of this paragraph— 

‘‘(i) IN GENERAL.—The term ‘covered executive’ 

means, with respect to any applicable taxable year, 

any employee— 

‘‘(I) who, at any time during the portion of the 

taxable year during which the authorities under 

section 101(a) of the Emergency Economic Stabilization Act of 2008 are in effect (determined 

under section 120 thereof), is the chief executive 

officer of the applicable employer or the chief financial officer of the applicable employer, or an 

individual acting in either such capacity, or 

‘‘(II) who is described in clause (ii). 

‘‘(ii) HIGHEST COMPENSATED EMPLOYEES.—An employee is described in this clause if the employee is 1 

of the 3 highest compensated officers of the applicable 

employer for the taxable year (other than an individual described in clause (i)(I)), determined— 

‘‘(I) on the basis of the shareholder disclosure 

rules for compensation under the Securities Exchange Act of 1934 (without regard to whether 

those rules apply to the employer), and 


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‘‘(II) by only taking into account employees employed during the portion of the taxable year described in clause (i)(I). 

‘‘(iii) EMPLOYEE REMAINS COVERED EXECUTIVE.—If 

an employee is a covered executive with respect to an 

applicable employer for any applicable taxable year, 

such employee shall be treated as a covered executive 

with respect to such employer for all subsequent applicable taxable years and for all subsequent taxable 

years in which deferred deduction executive remuneration with respect to services performed in all such applicable taxable years would (but for this paragraph) 

be deductible. 

‘‘(E) EXECUTIVE REMUNERATION.—For purposes of this 

paragraph, the term ‘executive remuneration’ means the 

applicable employee remuneration of the covered executive, as determined under paragraph (4) without regard to 

subparagraphs (B), (C), and (D) thereof. Such term shall 

not include any deferred deduction executive remuneration 

with respect to services performed in a prior applicable 

taxable year. 

‘‘(F) DEFERRED DEDUCTION EXECUTIVE REMUNERATION.— 

For purposes of this paragraph, the term ‘deferred deduction executive remuneration’ means remuneration which 

would be executive remuneration for services performed in 

an applicable taxable year but for the fact that the deduction under this chapter (determined without regard to this 

paragraph) for such remuneration is allowable in a subsequent taxable year. 

‘‘(G) COORDINATION.—Rules similar to the rules of subparagraphs (F) and (G) of paragraph (4) shall apply for 

purposes of this paragraph. 

‘‘(H) REGULATORY AUTHORITY.—The Secretary may prescribe such guidance, rules, or regulations as are necessary 

to carry out the purposes of this paragraph and the Emergency Economic Stabilization Act of 2008, including the extent to which this paragraph applies in the case of any acquisition, merger, or reorganization of an applicable employer.’’. 

(b) GOLDEN PARACHUTE RULE.—Section 280G of the Internal 

Revenue Code of 1986 is amended— 

(1) by redesignating subsection (e) as subsection (f), and 

(2) by inserting after subsection (d) the following new subsection: 

‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF PROGRAM.— 

‘‘(1) IN GENERAL.—In the case of the severance from employment of a covered executive of an applicable employer during 

the period during which the authorities under section 101(a) of 

the Emergency Economic Stabilization Act of 2008 are in effect 

(determined under section 120 of such Act), this section shall 

be applied to payments to such executive with the following 

modifications: 


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‘‘(A) Any reference to a disqualified individual (other 

than in subsection (c)) shall be treated as a reference to a 

covered executive. 

‘‘(B) Any reference to a change described in subsection 

(b)(2)(A)(i) shall be treated as a reference to an applicable 

severance from employment of a covered executive, and 

any reference to a payment contingent on such a change 

shall be treated as a reference to any payment made during an applicable taxable year of the employer on account 

of such applicable severance from employment. 

‘‘(C) Any reference to a corporation shall be treated as a 

reference to an applicable employer. 

‘‘(D) The provisions of subsections (b)(2)(C), (b)(4), (b)(5), 

and (d)(5) shall not apply. 

‘‘(2) DEFINITIONS AND SPECIAL RULES.—For purposes of this 

subsection: 

‘‘(A) DEFINITIONS.—Any term used in this subsection 

which is also used in section 162(m)(5) shall have the 

meaning given such term by such section. 

‘‘(B) APPLICABLE SEVERANCE FROM EMPLOYMENT.—The 

term ‘applicable severance from employment’ means any 

severance from employment of a covered executive— 

‘‘(i) by reason of an involuntary termination of the 

executive by the employer, or 

‘‘(ii) in connection with any bankruptcy, liquidation, 

or receivership of the employer. 

‘‘(C) COORDINATION AND OTHER RULES.— 

‘‘(i) IN GENERAL.—If a payment which is treated as 

a parachute payment by reason of this subsection is 

also a parachute payment determined without regard 

to this subsection, this subsection shall not apply to 

such payment. 

‘‘(ii) REGULATORY AUTHORITY.—The Secretary may 

prescribe such guidance, rules, or regulations as are 

necessary— 

‘‘(I) to carry out the purposes of this subsection 

and the Emergency Economic Stabilization Act of 

2008, including the extent to which this subsection applies in the case of any acquisition, 

merger, or reorganization of an applicable employer, 

‘‘(II) to apply this section and section 4999 in 

cases where one or more payments with respect to 

any individual are treated as parachute payments 

by reason of this subsection, and other payments 

with respect to such individual are treated as 

parachute payments under this section without regard to this subsection, and 

‘‘(III) to prevent the avoidance of the application 

of this section through the mischaracterization of 

a severance from employment as other than an 

applicable severance from employment.’’. 

(c) EFFECTIVE DATES.— 


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(1) IN GENERAL.—The amendment made by subsection (a) 

shall apply to taxable years ending on or after the date of the 

enactment of this Act. 

(2) GOLDEN PARACHUTE RULE.—The amendments made by 

subsection (b) shall apply to payments with respect to 

severances occurring during the period during which the authorities under section 101(a) of this Act are in effect (determined under section 120 of this Act). 

SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE 

OF QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS. 

(a) EXTENSION.—Subparagraph (E) of section 108(a)(1) of the Internal Revenue Code of 1986 is amended by striking ‘‘January 1, 

2010’’ and inserting ‘‘January 1, 2013’’. 

(b) EFFECTIVE DATE.—The amendment made by this subsection 

shall apply to discharges of indebtedness occurring on or after January 1, 2010. 

Æ 


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