I 

111TH CONGRESS 

1ST SESSION H. R. 2529 

To amend the Federal Deposit Insurance Act to authorize depository institutions and depository institution holding companies to lease foreclosed 

property held by such institutions and companies for up to 5 years, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 20, 2009 

Mr. GARY G. MILLER of California (for himself and Mr. DONNELLY of Indiana) introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To amend the Federal Deposit Insurance Act to authorize 

depository institutions and depository institution holding 

companies to lease foreclosed property held by such institutions and companies for up to 5 years, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Neighborhood Preser5 vation Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 


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1 (1) Depository institutions and affiliates of de2 pository institutions currently may control and lease 

3 foreclosed property for a limited period of time often 

4 subject to safety and soundness considerations, 

5 under various Federal laws and the law of some 

6 States. 

7 (2) Authorizing such institutions and affiliates 

8 to enter into a long-term lease with the occupant of 

9 the property or any other person would reduce the 

10 number of residential properties entering into the 

11 housing inventory, which in turn would help to sta12 bilize home values and restore confidence in the 

13 housing markets. 

14 (3) Allowing depository institutions and affili15 ates of such institutions to lease foreclosed property 

16 will allow the institution or affiliate to dispose of 

17 such property into a presumably more stable market 

18 at the end of the lease term which would reduce the 

19 loss the institution or affiliate may otherwise be re20 quired to recognize upon disposition of the property. 

21 (4) Providing a means for foreclosed property 

22 to remain occupied during the housing downturn will 

23 preserve the property itself as well as the aesthetic 

24 and economic values of neighboring homes and even 

25 whole neighborhoods. 


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1 (5) Allowing depository institutions to lease 

2 foreclosed property gives families the opportunity to 

3 remain in the home, causing less disruption to fami4 lies, until they have the means to become a home5 owner again. 

6 SEC. 3. BANK LEASING OF FORECLOSED PROPERTIES. 

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

8 Insurance Act (U.S.C. 1828) is amended by adding at the 

9 end the following new subsection: 

10 ‘‘(y) LEASING OF FORECLOSED PROPERTY.— 

11 ‘‘(1) LEASING AUTHORIZED.—Notwithstanding 

12 any other provision of law and subject to this sub13 section and regulations prescribed under this sub14 section, any depository institution, and any affiliate 

15 of a depository institution, may lease to any person, 

16 including a lease with an option to purchase, for not 

17 to exceed 5 years an interest in residential property 

18 which— 

19 ‘‘(A) was or is security for an extension of 

20 credit by such depository institution or affiliate; 

21 and 

22 ‘‘(B) came under the ownership or control 

23 of the depository institution or affiliate through 

24 foreclosure on the extension of credit or the 


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1 bankruptcy or liquidation of the owner of the 

2 property to whom the credit was extended. 

3 ‘‘(2) SAFETY AND SOUNDNESS REGULATIONS.— 

4 The Federal banking agencies shall prescribe regula5 tions which— 

6 ‘‘(A) establish criteria and minimum re7 quirements for the leasing activity of any depos8 itory institution or affiliate of a depository in9 stitution, including minimum capital require10 ments, that the agency determines to be appro11 priate for the preservation of the safety and 

12 soundness of the institution or affiliate; 

13 ‘‘(B) establish requirements or exceptions 

14 that the agency determines are appropriate 

15 under this subsection for any such institution 

16 or affiliate for any other purpose; and 

17 ‘‘(C) provide for appropriate actions under 

18 section 38 with respect to any such lease if nec19 essary to protect the capital or safety and 

20 soundness of the institution or affiliate or any 

21 other necessary enforcement action. 

22 ‘‘(3) LENGTH OF LEASE.—If the provision of 

23 any Federal or State law, including the Bank Hold24 ing Company Act of 1956, governing the leasing ac25 tivities of depository institutions or affiliates of deVerDate Nov 24 2008 01:18 May 23, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2529.IH H2529

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1 pository institutions permits an appropriate Federal 

2 banking agency to allow any such depository institu3 tion or affiliate to lease property described in para4 graph (1) to any person for a period of longer than 

5 5 years, any lease under paragraph (1) may be ex6 tended to the extent permitted by such provision of 

7 law. 

8 ‘‘(4) SUNSET.—This section shall apply only 

9 with respect to leases entered into during the 2-year 

10 period ending on the date of the enactment of the 

11 Neighborhood Preservation Act.’’. 

12 (b) INTENT OF THE CONGRESS.—It is the intent of 

13 the Congress that— 

14 (1) no permanent change in policy on leasing 

15 foreclosed property is being established with respect 

16 to depository institutions and depository institution 

17 holding companies; and 

18 (2) subsection (y) of section 18 of the Federal 

19 Deposit Insurance Act should not apply to leases en20 tered into after the sunset date contained in such 

21 subsection. 

Æ 


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