PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1617 

Public Law 111–21 

111th Congress 

An Act 

To improve enforcement of mortgage fraud, securities and commodities fraud, financial institution fraud, and other frauds related to Federal assistance and relief 

programs, for the recovery of funds lost to these frauds, and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Fraud Enforcement and Recovery 

Act of 2009’’ or ‘‘FERA’’. 

SEC. 2. AMENDMENTS TO IMPROVE MORTGAGE, SECURITIES, 

COMMODITIES, AND FINANCIAL FRAUD RECOVERY AND 

ENFORCEMENT. 

(a) DEFINITION OF FINANCIAL INSTITUTION AMENDED TO

INCLUDE MORTGAGE LENDING BUSINESS.—Section 20 of title 18, 

United States Code, is amended— 

(1) in paragraph (8), by striking ‘‘or’’ after the semicolon; 

(2) in paragraph (9), by striking the period and inserting 

‘‘; or’’; and 

(3) by inserting at the end the following: 

‘‘(10) a mortgage lending business (as defined in section 

27 of this title) or any person or entity that makes in whole 

or in part a federally related mortgage loan as defined in 

section 3 of the Real Estate Settlement Procedures Act of 

1974.’’. 

(b) MORTGAGE LENDING BUSINESS DEFINED.— 

(1) IN GENERAL.—Chapter 1 of title 18, United States Code, 

is amended by inserting after section 26 the following: 

‘‘§ 27. Mortgage lending business defined 

‘‘In this title, the term ‘mortgage lending business’ means an 

organization which finances or refinances any debt secured by an 

interest in real estate, including private mortgage companies and 

any subsidiaries of such organizations, and whose activities affect 

interstate or foreign commerce.’’. 

(2) CHAPTER ANALYSIS.—The chapter analysis for chapter 

1 of title 18, United States Code, is amended by adding at 

the end the following: 

‘‘27. Mortgage lending business defined.’’. 

(c) FALSE STATEMENTS IN MORTGAGE APPLICATIONS AMENDED

TO INCLUDE FALSE STATEMENTS BY MORTGAGE BROKERS AND

AGENTS OF MORTGAGE LENDING BUSINESSES.—Section 1014 of title 

18, United States Code, is amended by— 

18 USC 1 note. 

Fraud 

Enforcement and 

Recovery Act of 

2009. 

May 20, 2009 

[S. 386] 


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(1) striking ‘‘or’’ after ‘‘the International Banking Act of 

1978),’’; and 

(2) inserting after ‘‘section 25(a) of the Federal Reserve 

Act’’ the following: ‘‘, or a mortgage lending business, or any 

person or entity that makes in whole or in part a federally 

related mortgage loan as defined in section 3 of the Real Estate 

Settlement Procedures Act of 1974’’. 

(d) MAJOR FRAUD AGAINST THE GOVERNMENT AMENDED TO

INCLUDE ECONOMIC RELIEF AND TROUBLED ASSET RELIEF PROGRAM

FUNDS.—Section 1031(a) of title 18, United States Code, is amended 

by— 

(1) inserting after ‘‘or promises, in’’ the following: ‘‘any 

grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance, including through 

the Troubled Asset Relief Program, an economic stimulus, 

recovery or rescue plan provided by the Government, or the 

Government’s purchase of any troubled asset as defined in 

the Emergency Economic Stabilization Act of 2008, or in’’; 

(2) striking ‘‘the contract, subcontract’’ and inserting ‘‘such 

grant, contract, subcontract, subsidy, loan, guarantee, insurance, or other form of Federal assistance’’; and 

(3) striking ‘‘for such property or services’’. 

(e) SECURITIES FRAUD AMENDED TO INCLUDE FRAUD INVOLVING

OPTIONS AND FUTURES IN COMMODITIES.— 

(1) IN GENERAL.—Section 1348 of title 18, United States 

Code, is amended— 

(A) in the caption, by inserting ‘‘and commodities’’ 

after ‘‘Securities’’; 

(B) in paragraph (1), by inserting ‘‘any commodity for 

future delivery, or any option on a commodity for future 

delivery, or’’ after ‘‘any person in connection with’’; and 

(C) in paragraph (2), by inserting ‘‘any commodity for 

future delivery, or any option on a commodity for future 

delivery, or’’ after ‘‘in connection with the purchase or 

sale of’’. 

(2) CHAPTER ANALYSIS.—The item for section 1348 in the 

chapter analysis for chapter 63 of title 18, United States Code, 

is amended by inserting ‘‘and commodities’’ after ‘‘Securities’’. 

(f) MONEY LAUNDERING AMENDED TO DEFINE PROCEEDS OF

SPECIFIED UNLAWFUL ACTIVITY.— 

(1) MONEY LAUNDERING.—Section 1956(c) of title 18, United 

States Code, is amended— 

(A) in paragraph (8), by striking the period and 

inserting ‘‘; and’’; and 

(B) by inserting at the end the following: 

‘‘(9) the term ‘proceeds’ means any property derived from 

or obtained or retained, directly or indirectly, through some 

form of unlawful activity, including the gross receipts of such 

activity.’’. 

(2) MONETARY TRANSACTIONS.—Section 1957(f) of title 18, 

United States Code, is amended by striking paragraph (3) and 

inserting the following: 

‘‘(3) the terms ‘specified unlawful activity’ and ‘proceeds’ 

shall have the meaning given those terms in section 1956 

of this title.’’. 

(g) SENSE OF THE CONGRESS AND REPORT CONCERNING

REQUIRED APPROVAL FOR MERGER CASES.— 


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(1) SENSE OF CONGRESS.—It is the sense of the Congress 

that no prosecution of an offense under section 1956 or 1957 

of title 18, United States Code, should be undertaken in combination with the prosecution of any other offense, without 

prior approval of the Attorney General, the Deputy Attorney 

General, the Assistant Attorney General in charge of the 

Criminal Division, a Deputy Assistant Attorney General in 

the Criminal Division, or the relevant United States Attorney, 

if the conduct to be charged as ‘‘specified unlawful activity’’ 

in connection with the offense under section 1956 or 1957 

is so closely connected with the conduct to be charged as the 

other offense that there is no clear delineation between the 

two offenses. 

(2) REPORT.—One year after the date of the enactment 

of this Act, and at the end of each of the four succeeding 

one-year periods, the Attorney General shall report to the House 

and Senate Committees on the Judiciary on efforts undertaken 

by the Department of Justice to ensure that the review and 

approval described in paragraph (1) takes place in all appropriate cases. The report shall include the following: 

(A) The number of prosecutions described in paragraph 

(1) that were undertaken during the previous one-year 

period after prior approval by an official described in paragraph (1), classified by type of offense and by the approving 

official. 

(B) The number of prosecutions described in paragraph 

(1) that were undertaken during the previous one-year 

period without such prior approval, classified by type of 

offense, and the reasons why such prior approval was not 

obtained. 

(C) The number of times during the previous year 

in which an approval described in paragraph (1) was 

denied. 

SEC. 3. AUTHORIZATION OF ADDITIONAL FUNDING TO COMBAT MORTGAGE FRAUD, SECURITIES AND COMMODITIES FRAUD, AND 

OTHER FRAUDS INVOLVING FEDERAL ECONOMIC ASSISTANCE. 

(a) AUTHORIZATION OF ADDITIONAL APPROPRIATIONS FOR THE

DEPARTMENT OF JUSTICE.— 

(1) IN GENERAL.—There is authorized to be appropriated 

to the Attorney General, $165,000,000 for each of the fiscal 

years 2010 and 2011, for the purposes of investigations and 

prosecutions and civil and administrative proceedings involving 

Federal assistance programs and financial institutions, 

including financial institutions to which this Act and amendments made by this Act apply. 

(2) ALLOCATIONS.—With respect to fiscal years 2010 and 

2011, the amounts authorized to be appropriated under paragraph (1) shall be allocated as follows: 

(A) Federal Bureau of Investigation: $75,000,000 for 

fiscal year 2010 and $65,000,000 for fiscal year 2011, an 

appropriate percentage of which amounts shall be used 

to investigate mortgage fraud. 

(B) The offices of the United States Attorneys: 

$50,000,000 for each fiscal year. 


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(C) The criminal division of the Department of Justice: $20,000,000 for each fiscal year. 

(D) The civil division of the Department of Justice: $15,000,000 for each fiscal year. 

(E) The tax division of the Department of Justice: 

$5,000,000 for each fiscal year. 

(b) AUTHORIZATION OF ADDITIONAL APPROPRIATIONS FOR THE

POSTAL INSPECTION SERVICE.—There is authorized to be appropriated to the Postal Inspection Service of the United States Postal 

Service, $30,000,000 for each of the fiscal years 2010 and 2011 

for investigations involving Federal assistance programs and financial institutions, including financial institutions to which this Act 

and amendments made by this Act apply. 

(c) AUTHORIZATION OF ADDITIONAL APPROPRIATIONS FOR THE

INSPECTOR GENERAL FOR THE DEPARTMENT OF HOUSING AND URBAN

DEVELOPMENT.—There is authorized to be appropriated to the 

Inspector General of the Department of Housing and Urban 

Development, $30,000,000 for each of the fiscal years 2010 and 

2011 for investigations involving Federal assistance programs and 

financial institutions, including financial institutions to which this 

Act and amendments made by this Act apply. 

(d) AUTHORIZATION OF ADDITIONAL APPROPRIATIONS FOR THE

UNITED STATES SECRET SERVICE.—There is authorized to be appropriated to the United States Secret Service of the Department 

of Homeland Security, $20,000,000 for each of the fiscal years 

2010 and 2011 for investigations involving Federal assistance programs and financial institutions, including financial institutions 

to which this Act and amendments made by this Act apply. 

(e) AUTHORIZATION OF ADDITIONAL APPROPRIATIONS FOR THE

SECURITIES AND EXCHANGE COMMISSION.— 

(1) IN GENERAL.—There is authorized to be appropriated 

to the Securities and Exchange Commission, $20,000,000 for 

each of the fiscal years 2010 and 2011 for investigations and 

enforcement proceedings involving financial institutions, 

including financial institutions to which this Act and amendments made by this Act apply. 

(2) INSPECTOR GENERAL.—There is authorized to be appropriated to the Securities and Exchange Commission, $1,000,000 

for each of the fiscal years 2010 and 2011 for the salaries 

and expenses of the Office of the Inspector General of the 

Securities and Exchange Commission. 

(f) USE OF FUNDS.— 

(1) IN GENERAL.—The funds appropriated pursuant to 

authorization under this section shall be limited to covering 

the costs of each listed agency or department for investigating 

possible criminal, civil, or administrative violations and for 

criminal, civil, or administrative proceedings involving financial 

crimes and crimes against Federal assistance programs, 

including mortgage fraud, securities and commodities fraud, 

financial institution fraud, and other frauds related to Federal 

assistance and relief programs. 

(2) FUNDS FOR TRAINING AND RESEARCH.—Funds authorized 

to be appropriated under this section may be used and expended 

for programs for improving the detection, investigation, and 

prosecution of economic crime including financial fraud and 

mortgage fraud. Funds allocated under this section may be 

allocated to programs which assist State and local criminal 


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justice agencies to develop, establish, and maintain intelligencefocused policing strategies and related information sharing; 

provide training and investigative support services to State 

and local criminal justice agencies to provide such agencies 

with skills and resources needed to investigate and prosecute 

such criminal activities and related criminal activities; provide 

research support, establish partnerships, and provide other 

resources to aid State and local criminal justice agencies to 

prevent, investigate, and prosecute such criminal activities and 

related problems; provide information and research to the general public to facilitate the prevention of such criminal activities; and any other programs specified by the Attorney General 

as furthering the purposes of this Act. 

(g) ADDITIONAL NATURE OF AUTHORIZATIONS; AVAILABILITY.— 

The amounts authorized under this section are in addition to 

amounts otherwise authorized in other Acts and shall remain available until expended. 

(h) REPORT TO CONGRESS.—Following the final expenditure of 

all funds appropriated pursuant to authorization under this section, 

the Attorney General, in consultation with the United States Postal 

Inspection Service, the Inspector General for the Department of 

Housing and Urban Development, the Secretary of Homeland Security, and the Commissioner of the Securities and Exchange Commission, shall submit a report to Congress identifying— 

(1) the amounts expended under each of subsections (a), 

(b), (c), (d), and (e) and a certification of compliance with 

the requirements listed in subsection (f); and 

(2) the amounts recovered as a result of criminal or civil 

restitution, fines, penalties, and other monetary recoveries 

resulting from criminal, civil, or administrative proceedings 

and settlements undertaken with funds authorized by this Act. 

SEC. 4. CLARIFICATIONS TO THE FALSE CLAIMS ACT TO REFLECT 

THE ORIGINAL INTENT OF THE LAW. 

(a) CLARIFICATION OF THE FALSE CLAIMS ACT.—Section 3729 

of title 31, United States Code, is amended— 

(1) by striking subsection (a) and inserting the following: 

‘‘(a) LIABILITY FOR CERTAIN ACTS.— 

‘‘(1) IN GENERAL.—Subject to paragraph (2), any person 

who— 

‘‘(A) knowingly presents, or causes to be presented, 

a false or fraudulent claim for payment or approval; 

‘‘(B) knowingly makes, uses, or causes to be made 

or used, a false record or statement material to a false 

or fraudulent claim; 

‘‘(C) conspires to commit a violation of subparagraph 

(A), (B), (D), (E), (F), or (G); 

‘‘(D) has possession, custody, or control of property 

or money used, or to be used, by the Government and 

knowingly delivers, or causes to be delivered, less than 

all of that money or property; 

‘‘(E) is authorized to make or deliver a document certifying receipt of property used, or to be used, by the Government and, intending to defraud the Government, makes 

or delivers the receipt without completely knowing that 

the information on the receipt is true; 


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‘‘(F) knowingly buys, or receives as a pledge of an 

obligation or debt, public property from an officer or 

employee of the Government, or a member of the Armed 

Forces, who lawfully may not sell or pledge property; or 

‘‘(G) knowingly makes, uses, or causes to be made 

or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly 

avoids or decreases an obligation to pay or transmit money 

or property to the Government, 

is liable to the United States Government for a civil penalty 

of not less than $5,000 and not more than $10,000, as adjusted 

by the Federal Civil Penalties Inflation Adjustment Act of 

1990 (28 U.S.C. 2461 note; Public Law 104–410), plus 3 times 

the amount of damages which the Government sustains because 

of the act of that person. 

‘‘(2) REDUCED DAMAGES.—If the court finds that— 

‘‘(A) the person committing the violation of this subsection furnished officials of the United States responsible 

for investigating false claims violations with all information 

known to such person about the violation within 30 days 

after the date on which the defendant first obtained the 

information; 

‘‘(B) such person fully cooperated with any Government 

investigation of such violation; and 

‘‘(C) at the time such person furnished the United 

States with the information about the violation, no criminal 

prosecution, civil action, or administrative action had commenced under this title with respect to such violation, 

and the person did not have actual knowledge of the existence of an investigation into such violation, 

the court may assess not less than 2 times the amount of 

damages which the Government sustains because of the act 

of that person. 

‘‘(3) COSTS OF CIVIL ACTIONS.—A person violating this subsection shall also be liable to the United States Government 

for the costs of a civil action brought to recover any such 

penalty or damages.’’; 

(2) by striking subsections (b) and (c) and inserting the 

following: 

‘‘(b) DEFINITIONS.—For purposes of this section— 

‘‘(1) the terms ‘knowing’ and ‘knowingly’— 

‘‘(A) mean that a person, with respect to information— 

‘‘(i) has actual knowledge of the information; 

‘‘(ii) acts in deliberate ignorance of the truth or 

falsity of the information; or 

‘‘(iii) acts in reckless disregard of the truth or 

falsity of the information; and 

‘‘(B) require no proof of specific intent to defraud; 

‘‘(2) the term ‘claim’— 

‘‘(A) means any request or demand, whether under 

a contract or otherwise, for money or property and whether 

or not the United States has title to the money or property, 

that— 

‘‘(i) is presented to an officer, employee, or agent 

of the United States; or 


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‘‘(ii) is made to a contractor, grantee, or other 

recipient, if the money or property is to be spent or 

used on the Government’s behalf or to advance a 

Government program or interest, and if the United 

States Government— 

‘‘(I) provides or has provided any portion of 

the money or property requested or demanded; 

or 

‘‘(II) will reimburse such contractor, grantee, 

or other recipient for any portion of the money 

or property which is requested or demanded; and 

‘‘(B) does not include requests or demands for money 

or property that the Government has paid to an individual 

as compensation for Federal employment or as an income 

subsidy with no restrictions on that individual’s use of 

the money or property; 

‘‘(3) the term ‘obligation’ means an established duty, 

whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a 

fee-based or similar relationship, from statute or regulation, 

or from the retention of any overpayment; and 

‘‘(4) the term ‘material’ means having a natural tendency 

to influence, or be capable of influencing, the payment or receipt 

of money or property.’’; 

(3) by redesignating subsections (d) and (e) as subsections 

(c) and (d), respectively; and 

(4) in subsection (c), as redesignated, by striking ‘‘subparagraphs (A) through (C) of subsection (a)’’ and inserting ‘‘subsection (a)(2)’’. 

(b) INTERVENTION BY THE GOVERNMENT.—Section 3731(b) of 

title 31, United States Code, is amended— 

(1) by redesignating subsection (c) as subsection (d); 

(2) by redesignating subsection (d) as subsection (e); and 

(3) by inserting the new subsection (c): 

‘‘(c) If the Government elects to intervene and proceed with 

an action brought under 3730(b), the Government may file its 

own complaint or amend the complaint of a person who has brought 

an action under section 3730(b) to clarify or add detail to the 

claims in which the Government is intervening and to add any 

additional claims with respect to which the Government contends 

it is entitled to relief. For statute of limitations purposes, any 

such Government pleading shall relate back to the filing date of 

the complaint of the person who originally brought the action, 

to the extent that the claim of the Government arises out of the 

conduct, transactions, or occurrences set forth, or attempted to 

be set forth, in the prior complaint of that person.’’. 

(c) CIVIL INVESTIGATIVE DEMANDS.—Section 3733 of title 31, 

United States Code, is amended— 

(1) in subsection (a)— 

(A) in paragraph (1)— 

(i) in the matter preceding subparagraph (A)— 

(I) by inserting ‘‘, or a designee (for purposes 

of this section),’’ after ‘‘Whenever the Attorney 

General’’; and 

(II) by striking ‘‘the Attorney General may, 

before commencing a civil proceeding under section 

3730 or other false claims law,’’ and inserting ‘‘the 


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Attorney General, or a designee, may, before commencing a civil proceeding under section 3730(a) 

or other false claims law, or making an election 

under section 3730(b),’’; and 

(ii) in the matter following subparagraph (D)— 

(I) by striking ‘‘may not delegate’’ and 

inserting ‘‘may delegate’’; and 

(II) by adding at the end the following: ‘‘Any 

information obtained by the Attorney General or 

a designee of the Attorney General under this 

section may be shared with any qui tam relator 

if the Attorney General or designee determine it 

is necessary as part of any false claims act investigation.’’; and 

(B) in paragraph (2)(G), by striking the second sentence; 

(2) in subsection (i)(2)— 

(A) in subparagraph (B), by striking ‘‘, who is authorized for such use under regulations which the Attorney 

General shall issue’’; and 

(B) in subparagraph (C), by striking ‘‘Disclosure of 

information to any such other agency shall be allowed 

only upon application, made by the Attorney General to 

a United States district court, showing substantial need 

for the use of the information by such agency in furtherance 

of its statutory responsibilities.’’; and 

(3) in subsection (l)— 

(A) in paragraph (6), by striking ‘‘and’’ after the semicolon; 

(B) in paragraph (7), by striking the period and 

inserting ‘‘; and’’; and 

(C) by adding at the end the following: 

‘‘(8) the term ‘official use’ means any use that is consistent 

with the law, and the regulations and policies of the Department of Justice, including use in connection with internal 

Department of Justice memoranda and reports; communications 

between the Department of Justice and a Federal, State, or 

local government agency, or a contractor of a Federal, State, 

or local government agency, undertaken in furtherance of a 

Department of Justice investigation or prosecution of a case; 

interviews of any qui tam relator or other witness; oral 

examinations; depositions; preparation for and response to civil 

discovery requests; introduction into the record of a case or 

proceeding; applications, motions, memoranda and briefs submitted to a court or other tribunal; and communications with 

Government investigators, auditors, consultants and experts, 

the counsel of other parties, arbitrators and mediators, concerning an investigation, case or proceeding.’’. 

(d) RELIEF FROM RETALIATORY ACTIONS.—Section 3730(h) of 

title 31, United States Code, is amended to read as follows: 

‘‘(h) RELIEF FROM RETALIATORY ACTIONS.— ‘‘(1) IN GENERAL.—Any employee, contractor, or agent shall 

be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent 

is discharged, demoted, suspended, threatened, harassed, or 

in any other manner discriminated against in the terms and 

conditions of employment because of lawful acts done by the 

Definition. 


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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1625 

employee, contractor, or agent on behalf of the employee, contractor, or agent or associated others in furtherance of other 

efforts to stop 1 or more violations of this subchapter. 

‘‘(2) RELIEF.—Relief under paragraph (1) shall include 

reinstatement with the same seniority status that employee, 

contractor, or agent would have had but for the discrimination, 

2 times the amount of back pay, interest on the back pay, 

and compensation for any special damages sustained as a result 

of the discrimination, including litigation costs and reasonable 

attorneys’ fees. An action under this subsection may be brought 

in the appropriate district court of the United States for the 

relief provided in this subsection.’’. 

(e) FALSE CLAIMS JURISDICTION.—Section 3732 of title 31, 

United States Code, is amended by adding at the end the following 

new subsection: 

‘‘(c) SERVICE ON STATE OR LOCAL AUTHORITIES.—With respect 

to any State or local government that is named as a co-plaintiff 

with the United States in an action brought under subsection 

(b), a seal on the action ordered by the court under section 3730(b) 

shall not preclude the Government or the person bringing the 

action from serving the complaint, any other pleadings, or the 

written disclosure of substantially all material evidence and 

information possessed by the person bringing the action on the 

law enforcement authorities that are authorized under the law 

of that State or local government to investigate and prosecute 

such actions on behalf of such governments, except that such seal 

applies to the law enforcement authorities so served to the same 

extent as the seal applies to other parties in the action.’’. 

(f) EFFECTIVE DATE AND APPLICATION.—The amendments made 

by this section shall take effect on the date of enactment of this 

Act and shall apply to conduct on or after the date of enactment, 

except that— 

(1) subparagraph (B) of section 3729(a)(1) of title 31, United 

States Code, as added by subsection (a)(1), shall take effect 

as if enacted on June 7, 2008, and apply to all claims under 

the False Claims Act (31 U.S.C. 3729 et seq.) that are pending 

on or after that date; and 

(2) section 3731(b) of title 31, as amended by subsection 

(b); section 3733, of title 31, as amended by subsection (c); 

and section 3732 of title 31, as amended by subsection (e); 

shall apply to cases pending on the date of enactment. 

SEC. 5. FINANCIAL CRISIS INQUIRY COMMISSION. 

(a) ESTABLISHMENT OF COMMISSION.—There is established in 

the legislative branch the Financial Crisis Inquiry Commission 

(in this section referred to as the ‘‘Commission’’) to examine the 

causes, domestic and global, of the current financial and economic 

crisis in the United States. 

(b) COMPOSITION OF THE COMMISSION.— 

(1) MEMBERS.—The Commission shall be composed of 10 

members, of whom— 

(A) 3 members shall be appointed by the majority 

leader of the Senate, in consultation with relevant Committees; 

(B) 3 members shall be appointed by the Speaker of 

the House of Representatives, in consultation with relevant 

Committees; 

31 USC 3729 

note. 

Applicability. 


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(C) 2 members shall be appointed by the minority 

leader of the Senate, in consultation with relevant Committees; and 

(D) 2 members shall be appointed by the minority 

leader of the House of Representatives, in consultation 

with relevant Committees. 

(2) QUALIFICATIONS; LIMITATION.— (A) IN GENERAL.—It is the sense of the Congress that 

individuals appointed to the Commission should be prominent United States citizens with national recognition and 

significant depth of experience in such fields as banking, 

regulation of markets, taxation, finance, economics, consumer protection, and housing. 

(B) LIMITATION.—No person who is a member of Congress or an officer or employee of the Federal Government 

or any State or local government may serve as a member 

of the Commission. 

(3) CHAIRPERSON; VICE CHAIRPERSON.— 

(A) IN GENERAL.—Subject to the requirements of 

subparagraph (B), the Chairperson of the Commission shall 

be selected jointly by the Majority Leader of the Senate 

and the Speaker of the House of Representatives, and 

the Vice Chairperson shall be selected jointly by the 

Minority Leader of the Senate and the Minority Leader 

of the House of Representatives. 

(B) POLITICAL PARTY AFFILIATION.—The Chairperson 

and Vice Chairperson of the Commission may not be from 

the same political party. 

(4) MEETINGS, QUORUM; VACANCIES.— 

(A) MEETINGS.— 

(i) INITIAL MEETING.—The initial meeting of the 

Commission shall be as soon as possible after a quorum 

of members have been appointed. 

(ii) SUBSEQUENT MEETINGS.—After the initial 

meeting of the Commission, the Commission shall meet 

upon the call of the Chairperson or a majority of its 

members. 

(B) QUORUM.—6 members of the Commission shall constitute a quorum. 

(C) VACANCIES.—Any vacancy on the Commission 

shall— 

(i) not affect the powers of the Commission; and 

(ii) be filled in the same manner in which the 

original appointment was made. 

(c) FUNCTIONS OF THE COMMISSION.—The functions of the 

Commission are— 

(1) to examine the causes of the current financial and 

economic crisis in the United States, specifically the role of— 

(A) fraud and abuse in the financial sector, including 

fraud and abuse towards consumers in the mortgage sector; 

(B) Federal and State financial regulators, including 

the extent to which they enforced, or failed to enforce 

statutory, regulatory, or supervisory requirements; 

(C) the global imbalance of savings, international capital flows, and fiscal imbalances of various governments; 

(D) monetary policy and the availability and terms 

of credit; 


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(E) accounting practices, including, mark-to-market 

and fair value rules, and treatment of off-balance sheet 

vehicles; 

(F) tax treatment of financial products and investments; 

(G) capital requirements and regulations on leverage 

and liquidity, including the capital structures of regulated 

and non-regulated financial entities; 

(H) credit rating agencies in the financial system, 

including, reliance on credit ratings by financial institutions and Federal financial regulators, the use of credit 

ratings in financial regulation, and the use of credit ratings 

in the securitization markets; 

(I) lending practices and securitization, including the 

originate-to-distribute model for extending credit and 

transferring risk; 

(J) affiliations between insured depository institutions 

and securities, insurance, and other types of nonbanking 

companies; 

(K) the concept that certain institutions are ‘‘too-bigto-fail’’ and its impact on market expectations; 

(L) corporate governance, including the impact of company conversions from partnerships to corporations; 

(M) compensation structures; 

(N) changes in compensation for employees of financial 

companies, as compared to compensation for others with 

similar skill sets in the labor market; 

(O) the legal and regulatory structure of the United 

States housing market; 

(P) derivatives and unregulated financial products and 

practices, including credit default swaps; 

(Q) short-selling; 

(R) financial institution reliance on numerical models, 

including risk models and credit ratings; 

(S) the legal and regulatory structure governing financial institutions, including the extent to which the structure 

creates the opportunity for financial institutions to engage 

in regulatory arbitrage; 

(T) the legal and regulatory structure governing 

investor and mortgagor protection; 

(U) financial institutions and government-sponsored 

enterprises; and 

(V) the quality of due diligence undertaken by financial 

institutions; 

(2) to examine the causes of the collapse of each major 

financial institution that failed (including institutions that were 

acquired to prevent their failure) or was likely to have failed 

if not for the receipt of exceptional Government assistance 

from the Secretary of the Treasury during the period beginning 

in August 2007 through April 2009; 

(3) to submit a report under subsection (h); 

(4) to refer to the Attorney General of the United States 

and any appropriate State attorney general any person that 

the Commission finds may have violated the laws of the United 

States in relation to such crisis; and 


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(5) to build upon the work of other entities, and avoid 

unnecessary duplication, by reviewing the record of the Committee on Banking, Housing, and Urban Affairs of the Senate, 

the Committee on Financial Services of the House of Representatives, other congressional committees, the Government 

Accountability Office, other legislative panels, and any other 

department, agency, bureau, board, commission, office, independent establishment, or instrumentality of the United States 

(to the fullest extent permitted by law) with respect to the 

current financial and economic crisis. 

(d) POWERS OF THE COMMISSION.— (1) HEARINGS AND EVIDENCE.—The Commission may, for 

purposes of carrying out this section— 

(A) hold hearings, sit and act at times and places, 

take testimony, receive evidence, and administer oaths; 

and 

(B) require, by subpoena or otherwise, the attendance 

and testimony of witnesses and the production of books, 

records, correspondence, memoranda, papers, and documents. 

(2) SUBPOENAS.— 

(A) SERVICE.—Subpoenas issued under paragraph 

(1)(B) may be served by any person designated by the 

Commission. 

(B) ENFORCEMENT.— 

(i) IN GENERAL.—In the case of contumacy or 

failure to obey a subpoena issued under paragraph 

(1)(B), the United States district court for the judicial 

district in which the subpoenaed person resides, is 

served, or may be found, or where the subpoena is 

returnable, may issue an order requiring such person 

to appear at any designated place to testify or to 

produce documentary or other evidence. Any failure 

to obey the order of the court may be punished by 

the court as a contempt of that court. 

(ii) ADDITIONAL ENFORCEMENT.—Sections 102 

through 104 of the Revised Statutes of the United 

States (2 U.S.C. 192 through 194) shall apply in the 

case of any failure of any witness to comply with 

any subpoena or to testify when summoned under the 

authority of this section. 

(iii) ISSUANCE.—A subpoena may be issued under 

this subsection only— 

(I) by the agreement of the Chairperson and 

the Vice Chairperson; or 

(II) by the affirmative vote of a majority of 

the Commission, including an affirmative vote of 

at least one member appointed under subparagraph (C) or (D) of subsection (b)(1), a majority 

being present. 

(3) CONTRACTING.—The Commission may enter into contracts to enable the Commission to discharge its duties under 

this section. 

(4) INFORMATION FROM FEDERAL AGENCIES AND OTHER ENTITIES.— (A) IN GENERAL.—The Commission may secure directly 

from any department, agency, bureau, board, commission, 

Applicability. 


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office, independent establishment, or instrumentality of the 

United States any information related to any inquiry of 

the Commission conducted under this section, including 

information of a confidential nature (which the Commission 

shall maintain in a secure manner). Each such department, 

agency, bureau, board, commission, office, independent 

establishment, or instrumentality shall furnish such 

information directly to the Commission upon request. 

(B) OTHER ENTITIES.—It is the sense of the Congress 

that the Commission should seek testimony or information 

from principals and other representatives of government 

agencies and private entities that were significant participants in the United States and global financial and housing 

markets during the time period examined by the Commission. 

(5) ADMINISTRATIVE SUPPORT SERVICES.—Upon the request 

of the Commission— 

(A) the Administrator of General Services shall provide 

to the Commission, on a reimbursable basis, the administrative support services necessary for the Commission to 

carry out its responsibilities under this Act; and 

(B) other Federal departments and agencies may provide to the Commission any administrative support services 

as may be determined by the head of such department 

or agency to be advisable and authorized by law. 

(6) DONATIONS OF GOODS AND SERVICES.—The Commission 

may accept, use, and dispose of gifts or donations of services 

or property. 

(7) POSTAL SERVICES.—The Commission may use the United 

States mails in the same manner and under the same conditions 

as departments and agencies of the United States. 

(8) POWERS OF SUBCOMMITTEES, MEMBERS, AND AGENTS.— 

Any subcommittee, member, or agent of the Commission may, 

if authorized by the Commission, take any action which the 

Commission is authorized to take by this section. 

(e) STAFF OF THE COMMISSION.— 

(1) DIRECTOR.—The Commission shall have a Director who 

shall be appointed by the Chairperson and the Vice Chairperson, acting jointly. 

(2) STAFF.—The Chairperson and the Vice Chairperson may 

jointly appoint additional personnel, as may be necessary, to 

enable the Commission to carry out its functions. 

(3) APPLICABILITY OF CERTAIN CIVIL SERVICE LAWS.—The 

Director and staff of the Commission may be appointed without 

regard to the provisions of title 5, United States Code, governing 

appointments in the competitive service, and may be paid without regard to the provisions of chapter 51 and subchapter 

III of chapter 53 of such title relating to classification and 

General Schedule pay rates, except that no rate of pay fixed 

under this paragraph may exceed the equivalent of that payable 

for a position at level V of the Executive Schedule under section 

5316 of title 5, United States Code. Any individual appointed 

under paragraph (1) or (2) shall be treated as an employee 

for purposes of chapters 63, 81, 83, 84, 85, 87, 89, 89A, 89B, 

and 90 of that title. 

(4) DETAILEES.—Any Federal Government employee may 

be detailed to the Commission without reimbursement from 


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the Commission, and such detailee shall retain the rights, 

status, and privileges of his or her regular employment without 

interruption. 

(5) CONSULTANT SERVICES.—The Commission is authorized 

to procure the services of experts and consultants in accordance 

with section 3109 of title 5, United States Code, but at rates 

not to exceed the daily rate paid a person occupying a position 

at level IV of the Executive Schedule under section 5315 of 

title 5, United States Code. 

(f) COMPENSATION AND TRAVEL EXPENSES.— (1) COMPENSATION.—Each member of the Commission may 

be compensated at a rate not to exceed the daily equivalent 

of the annual rate of basic pay in effect for a position at 

level IV of the Executive Schedule under section 5315 of title 

5, United States Code, for each day during which that member 

is engaged in the actual performance of the duties of the 

Commission. 

(2) TRAVEL EXPENSES.—While away from their homes or 

regular places of business in the performance of services for 

the Commission, members of the Commission shall be allowed 

travel expenses, including per diem in lieu of subsistence, in 

the same manner as persons employed intermittently in the 

Government service are allowed expenses under section 5703(b) 

of title 5, United States Code. 

(g) NONAPPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.— 

The Federal Advisory Committee Act (5 U.S.C. App.) shall not 

apply to the Commission. 

(h) REPORT OF THE COMMISSION; APPEARANCE BEFORE AND

CONSULTATIONS WITH CONGRESS.— 

(1) REPORT.—On December 15, 2010, the Commission shall 

submit to the President and to the Congress a report containing 

the findings and conclusions of the Commission on the causes 

of the current financial and economic crisis in the United States. 

(2) INSTITUTION-SPECIFIC REPORTS AUTHORIZED.—At the 

discretion of the chairperson of the Commission, the report 

under paragraph (1) may include reports or specific findings 

on any financial institution examined by the Commission under 

subsection (c)(2). 

(3) APPEARANCE BEFORE THE CONGRESS.—The chairperson 

of the Commission shall, not later than 120 days after the 

date of submission of the final reports under paragraph (1), 

appear before the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on Financial Services 

of the House of Representatives regarding such reports and 

the findings of the Commission. 

(4) CONSULTATIONS WITH THE CONGRESS.—The Commission 

shall consult with the Committee on Banking, Housing, and 

Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, and other relevant committees of the Congress, for purposes of informing the Congress 

on the work of the Commission. 

(i) TERMINATION OF COMMISSION.— 

(1) IN GENERAL.—The Commission, and all the authorities 

of this section, shall terminate 60 days after the date on which 

the final report is submitted under subsection (h). 

(2) ADMINISTRATIVE ACTIVITIES BEFORE TERMINATION.—The 

Commission may use the 60-day period referred to in paragraph 

Deadline. 


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LEGISLATIVE HISTORY—S. 386: 

SENATE REPORTS: No. 111–10 (Comm. on the Judiciary). 

CONGRESSIONAL RECORD, Vol. 155 (2009): 

Apr. 22, 23, 27, 28, considered and passed Senate. 

May 6, considered and passed House, amended. 

May 14, Senate concurred in House amendments with an amendment. 

May 19, House concurred in Senate amendment. 

DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2009): 

May 20, Presidential remarks and statement. 

Æ 

(1) for the purpose of concluding the activities of the Commission, including providing testimony to committees of the Congress concerning reports of the Commission and disseminating 

the final report submitted under subsection (h). 

(j) AUTHORIZATION OF APPROPRIATION.—There is authorized to 

be appropriated to the Secretary of the Treasury such sums as 

are necessary to cover the costs of the Commission. 

Approved May 20, 2009. 


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