IIB 

111TH CONGRESS 

1ST SESSION H. R. 2529 

IN THE SENATE OF THE UNITED STATES 

JULY 30, 2009 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Neighborhood Preser3 vation Act’’. 

4 SEC. 2. FINDINGS. 

5 The Congress finds as follows: 

6 (1) Depository institutions and affiliates of de7 pository institutions currently may control and lease 

8 foreclosed property for a limited period of time often 

9 subject to safety and soundness considerations, 

10 under various Federal laws and the law of some 

11 States. 

12 (2) Authorizing such institutions and affiliates 

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

14 the property or any other person would reduce the 

15 number of residential properties entering into the 

16 housing inventory, which in turn would help to sta17 bilize home values and restore confidence in the 

18 housing markets. 

19 (3) Allowing depository institutions and affili20 ates of such institutions to lease foreclosed property 

21 will allow the institution or affiliate to dispose of 

22 such property into a presumably more stable market 

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

24 loss the institution or affiliate may otherwise be re25 quired to recognize upon disposition of the property. 


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1 (4) Providing a means for foreclosed property 

2 to remain occupied during the housing downturn will 

3 preserve the property itself as well as the aesthetic 

4 and economic values of neighboring homes and even 

5 whole neighborhoods. 

6 (5) Allowing depository institutions to lease 

7 foreclosed property gives families the opportunity to 

8 remain in the home, causing less disruption to fami9 lies, until they have the means to become a home10 owner again. 

11 SEC. 3. BANK LEASING OF FORECLOSED PROPERTIES. 

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

13 Insurance Act (12 U.S.C. 1828) is amended by adding at 

14 the end the following new subsection: 

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

16 ‘‘(1) LEASING AUTHORIZED.—Notwithstanding 

17 any provision of Federal or State law restricting the 

18 time during which a depository institution, or any 

19 affiliate of a depository institution, may hold or 

20 lease property, or any provision of Federal or State 

21 law prohibiting a depository institution, or any affil22 iate of a depository institution, from leasing prop23 erty and subject to this subsection and regulations 

24 prescribed under this subsection, any depository in25 stitution, and any affiliate of a depository instituVerDate Nov 24 2008 07:59 Jul 31, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2529.RFS H2529

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1 tion, may lease to any individual, including a lease 

2 with an option to purchase, for not to exceed 5 years 

3 an interest in residential property which— 

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

5 credit by such depository institution or affiliate; 

6 and 

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

8 of the depository institution or affiliate through 

9 foreclosure, or a deed in lieu of foreclosure, on 

10 the extension of credit. 

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

12 The Federal banking agencies shall jointly prescribe 

13 regulations which— 

14 ‘‘(A) establish criteria and minimum re15 quirements for the leasing activity of any depos16 itory institution or affiliate of a depository in17 stitution, including minimum capital require18 ments, that the agency determines to be appro19 priate for the preservation of the safety and 

20 soundness of the institution or affiliate; 

21 ‘‘(B) establish requirements or exceptions 

22 that the agency determines are appropriate 

23 under this subsection for any such institution 

24 or affiliate for any other purpose; and 


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1 ‘‘(C) provide for appropriate actions under 

2 section 38 with respect to any such lease if nec3 essary to protect the capital or safety and 

4 soundness of the institution or affiliate or any 

5 other necessary enforcement action. 

6 ‘‘(3) LENGTH OF LEASE.—If any provision of 

7 any Federal or State law, including the Bank Hold8 ing Company Act of 1956, governing the permissible 

9 activities of depository institutions or affiliates of de10 pository institutions permits a depository institution 

11 or any such affiliate to hold property as described in 

12 paragraph (1) for a period longer than 5 years, any 

13 lease under paragraph (1) may be extended to the 

14 extent permitted by such provision of law. 

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

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

17 period beginning on the date of the enactment of the 

18 Neighborhood Preservation Act.’’. 

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

20 the Congress that— 

21 (1) no permanent change in policy on leasing 

22 foreclosed property is being established with respect 

23 to depository institutions and depository institution 

24 holding companies; and 


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

2 Deposit Insurance Act should not apply to leases en3 tered into after the sunset date contained in such 

4 subsection. 

Passed the House of Representatives July 29, 2009. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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