January 15, 2009 CONGRESSIONAL RECORD — HOUSE H329 

every day to make a better life for the 

next generation. 

While we’re doing that, we must always remember that we still have people over there—we’re fighting two 

wars—and as we face new threats, we 

must maintain a strong military, and 

we must fully support our troops in 

harm’s way. 

Mr. Speaker, our military personnel 

and their families ask nothing more, 

and they deserve nothing less than the 

same level of care and devotion that 

they have shown our country. This is 

not a partisan issue. It is a basic American value, and it is a value I will 

champion every day as a Member of 

Congress. 

f 

b 1015 

A DIFFERENT STIMULUS 

(Mr. WILSON of South Carolina 

asked and was given permission to address the House for 1 minute and to revise and extend his remarks.) 

Mr. WILSON of South Carolina. Mr. 

Speaker, I rise today in support of legislation with a proven record of stimulating the economy and creating jobs. 

Members of the Republican Study 

Committee have introduced the Economic Recovery and Middle-Class Tax 

Relief Act, legislation that is fiscally 

responsible and one that will stimulate 

job growth in the private sector rather 

than the Federal Government. This 

package includes tax relief for American families, businesses, and entrepreneurs. It allows businesses to expense the purchase of assets which will 

encourage growth and job creation. 

This job does not threaten American 

families with hyper-inflation or saddle 

future generations with evermore debt 

with hundreds of billions of dollars in 

spending. 

I encourage my colleagues on both 

sides of the aisle to consider these proposals. These are proposals that will 

address the economic downturn and 

will not demand government spending. 

We should remember that Jerry 

Bellune of the Lexington County 

Chronicle is correct: This is the people’s money, not the government’s. 

In conclusion, God bless our troops, 

and we will never forget September the 

11th. 

f 

TARP REFORM AND 

ACCOUNTABILITY ACT OF 2009 

Mr. MCGOVERN. Mr. Speaker, by direction of the Committee on Rules, I 

call up House Resolution 62 and ask for 

its immediate consideration. 

The Clerk read the resolution, as follows: 

H. RES. 62 

Resolved, That at any time after the adoption of this resolution the Speaker may, pursuant to clause 2(b) of rule XVIII declare the 

House resolved into the Committee of the 

Whole House on the state of the Union for 

further consideration of the bill (H.R. 384) to 

reform the Troubled Assets Relief Program 

of the Secretary of the Treasury and ensure 

accountability under such Program. No further general debate shall be in order. The bill 

shall be considered for amendment under the 

five-minute rule. The bill shall be considered 

as read. All points of order against provisions in the bill are waived. Notwithstanding 

clause 11 of rule XVIII, no amendment to the 

bill shall be in order except those printed in 

the report of the Committee on Rules accompanying this resolution. Each such amendment may be offered only in the order printed in the report, may be offered only by a 

Member designated in the report, shall be 

considered as read, shall be debatable for the 

time specified in the report equally divided 

and controlled by.the proponent and an opponent, shall not be subject to amendment, 

and shall not be subject to a demand for division of the question in the House or in the 

Committee of the Whole. All points of order 

against such amendments are waived except 

those arising under clause 9 or 10 of rule XXI. 

At the conclusion of consideration of the bill 

for amendment the Committee shall rise and 

report the bill to the House with such 

amendments as may have been adopted. The 

previous question shall be considered as ordered on the bill and any amendments thereto to final passage without intervening motion except one motion to recommit with or 

without instructions. 

SEC. 2. A motion to proceed under section 

115 of the Emergency Economic Stabilization 

Act of 2008— 

(a) shall be in order only if offered by the 

Majority Leader or his designee; and 

(b) may be offered even following the sixth 

day specified in subsection (d)(3) of such section but not later than the legislative day of 

January 22, 2009. 

The SPEAKER pro tempore (Mr. 

ROSS). The gentleman from Massachusetts is recognized for 1 hour. 

Mr. MCGOVERN. Mr. Speaker, for 

the purposes of debate only, I yield the 

customary 30 minutes to the gentleman from California (Mr. DREIER). 

All time yielded during consideration 

of the rule is for debate only. 

GENERAL LEAVE

Mr. MCGOVERN. Mr. Speaker, I also 

ask unanimous consent that all Members be given 5 legislative days in 

which to revise and extend their remarks on House Resolution 62. 

The SPEAKER pro tempore. Is there 

objection to the request of the gentleman from Massachusetts? 

There was no objection. 

Mr. MCGOVERN. Mr. Speaker, I yield 

myself such time as I may consume. 

Mr. Speaker, House Resolution 62 

provides for further consideration of 

H.R. 384, the Troubled Assets Recovery 

Program Reform Act of 2009 under a 

structured rule. The rule makes in 

order the 11 amendments printed in the 

Rules Committee report, including a 

manager’s amendment that incorporated many of the amendments submitted to the Rules Committee. All the 

amendments are debatable for 10 minutes except the manager’s amendment, 

which is debatable for 40 minutes. 

The rule also provides for a motion 

to recommit with or without instructions. 

Finally, the rule contains a provision 

to preserve the House’s ability to have 

a vote on the second $350 billion. The 

first TARP bill contained language 

providing for expedited consideration a 

disapproval resolution that provided 

for a vote not later than 6 days after 

the date Congress receives the report. 

However, because President Bush 

sent the request to Congress on January 12, the 6th day would fall on a Sunday, a day that the House is not in session. Therefore, the ability to move to 

proceed would expire without giving 

the House an opportunity to act. The 

language in this rule assures that the 

House will have that opportunity. 

Mr. Speaker, let me begin by saying 

that this is a good rule. Eleven amendments are made in order—five Republican and six Democratic. One of the 

Democratic amendments is the manager’s amendment which incorporates 

parts or all of the 16 Democratic 

amendments and Republican amendments. 

Mr. Speaker, as I discussed yesterday, this bill is about the way the 

TARP should be spent, but it does not 

actually allow or preclude the release 

of the second round of these funds. 

Now, I know many of my colleagues 

are apprehensive about the release of 

these funds. I understand their concerns, and I share some of them. The 

Bush administration did not disburse 

the funds as many of us thought they 

promised. I believe that this bill that 

we are debating today and the amendments should alleviate many of these 

concerns. 

I believe that providing a blueprint 

for how these funds should be spent is 

one of the most important actions this 

Congress will take. We know jumpstarting our economy is a top priority 

of this new administration and of this 

Congress. But we have to do it right. 

We must ensure that the funding goes 

to the right places—to the homeowners 

who face foreclosure, in many cases at 

no fault of their own, and the small 

businesses who don’t have access to 

funds for their payrolls simply because 

the credit market is so tight. 

This bill, Mr. Speaker, attempts to 

get it right. Not only does this bill provide a blueprint on how this House believes these funds should be spent; it 

complements the roadmap already provided by President-elect Obama about 

how his administration would use these 

funds. 

The January 12, 2009, letter from National Economic Adviser-designate 

Larry Summers details how the incoming Obama administration will allocate 

these funds, and I support these goals. 

But like I said yesterday, Mr. Speaker, 

we will trust the new administration, 

but we need to also verify. 

This is a good bill that will be made 

better with the adoption of many of 

the amendments made in order under 

this rule. I support this rule, I support 

the underlying bill, and I urge my colleagues to support both the rule and 

the bill. 

I reserve the balance of my time. 

Mr. DREIER. Mr. Speaker, I yield 

myself such time as I might consume. 

(Mr. DREIER asked and was given 

permission to revise and extend his remarks.) 


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H330 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

Mr. DREIER. Mr. Speaker, I want to 

begin by expressing my appreciation to 

my good friend from Worcester, the 

distinguished vice chairman of the 

Committee on Rules, Mr. MCGOVERN, 

for yielding me the time, the customary 30 minutes. 

And I would also like to say in response to the exchange that Mr. 

MCGOVERN and I had yesterday, that I 

am more than willing and happy to 

yield at any time if he asks me to yield 

to him during debate. Yesterday, he 

was very reluctant to. One of the 

things that has troubled me is that as 

we deal with this and other issues, people begin with prepared statements, 

but as we get into a period of time during which I believe this institution 

should have a free-flowing debate, the 

option of yielding is one which should 

be taken up as much as possible. That’s 

my perspective, and I understand the 

right of individuals not to yield, but I 

will say that I’m happy to yield to individuals at any point. 

At this point, I’m happy to yield to 

my distinguished friend. 

Mr. MCGOVERN. I thank the gentleman. 

If I recall correctly, I did yield to the 

gentleman once. What I objected to 

was being interrupted in mid-sentence. 

But I will be happy to yield to the gentleman for a discourse at any time. 

Thank you. 

Mr. DREIER. If I can reclaim my 

time, I will simply say that I look forward to yielding when we’re having an 

exchange as we proceed with the 111th 

Congress. And I always want to, as I 

believe this institution deserves, to encourage a free-flowing debate on a wide 

range of issues. 

Today actually, interestingly 

enough, Mr. Speaker, marks the first 

time, the first time in the 111th Congress—and we’ve gone through quite a 

bit of legislation in the last week—that 

we are not dealing with a completely 

closed rule. But this process has been 

so utterly flawed that this rule simply 

exposes just how far we have to go 

rather than standing out as a step in 

the right direction. 

The most serious problem is that the 

underlying bill is not a product of any 

semblance of order whatsoever. No 

hearings, no testimony, no markups. 

Now, anyone who looks at how a bill 

becomes a law, they understand that 

the process of hearings, testimony, 

markup, that’s all part of the process. 

There has been absolutely no opportunity for any of that. No opportunity 

for scrutiny whatsoever as this bill was 

written. 

This has continued into this amendment process. While I appreciate the 

fact that the Democratic majority has 

actually considered amendments for 

the first time, we’re still left guessing 

as to what is actually in this bill. 

Most of the amendments that have 

been accepted will never even be debated here on the House floor. They’ll 

not be individually considered in a 

transparent way. And one of the great 

statements of the many statements 

made by President-elect Obama—and 

we all look forward in 5 days to his inauguration—is that he regularly talks 

about the need for transparency. Well, 

a measure that we’re about to consider 

under this so-called manager’s amendment will not allow the kind of transparency that Mr. Obama believes 

should be the case. 

These amendments were simply 

added en masse into this one amendment. The point of considering amendments, Mr. Speaker, is not just to have 

the opportunity to improve legislation. 

It is also meant to be an opportunity 

for debate. It’s a chance for Democratic 

and Republican Members alike, not to 

mention the American people, to examine the key components of a bill and 

have a real debate. 

Unfortunately, this rule simply perpetuates a very flawed process, protects a flawed bill, and prevents the 

real scrutiny that is very, very 

deservant on the way in which this $350 

billion, taxpayer dollars, will be spent. 

The Troubled Assets Recovery Program Reform Act, the so-called TARP, 

has itself become quite troubled. As 

we’ve heard in yesterday’s discussion, 

we have serious concerns for how this 

program has been implemented. We 

can’t begin to consider the wisdom of 

releasing another $350 billion until we 

understand how the initial money was 

used. And we cannot begin to consider 

a bill to fix the system until we understand what exactly this bill does. These 

are obligations we should take seriously. 

In the meantime, there are a number 

of far more limited and targeted proposals that could easily be considered 

and enacted to address the economic 

challenges we are facing. 

Our colleagues on both sides of the 

aisle have proposed a number of ideas 

for restoring our economy. They have 

suggested options that don’t pick winners and losers and don’t ask the taxpayers to pay for an unaccountable 

program. 

b 1030 

One proposal that I’ve advocated is a 

tax credit for new home purchases that 

are made with a down payment of at 

least 5 percent. 

The housing industry has been at the 

center of our economic crisis from the 

beginning. It remains the core impediment to our economic recovery. As 

home prices have fallen and foreclosures have risen, the impact on 

working families has been enormous 

and the impact on our economy has 

been, as we all know, very widespread. 

By encouraging and enabling responsible home purchases, we can start to 

clear out the excess supply in the housing market. This will help to stabilize 

prices, prevent foreclosures, and put us 

back on a path to economic recovery. 

Now, I don’t believe that this proposal that I’ve outlined and have been 

talking about for the last couple of 

weeks is a panacea, but it is a targeted 

measure that would help to address a 

key economic challenge that we face. 

Now, I would have offered my proposals and amendment to the underlying bill, but it was not germane to 

the measure. But Mr. Speaker, the 

point that I’m making is that there are 

many other creative ideas out there 

that I believe should be given full consideration. Unfortunately, we are 

spending our time on a bill that its 

own author—I see the distinguished 

chairman of the Committee on Financial Services has joined us here—has 

indicated will not be enacted into law. 

The Democratic majority is merely 

concerned with providing what I consider to be a fig leaf for the impending 

vote that we’re going to face to release 

this additional $350 billion. 

The underlying bill will not safeguard the taxpayers’ money and it will 

not ensure that we have the proper 

tools to restore our economy. I urge 

my colleagues to oppose this rule and 

the underlying legislation. 

With that, I reserve the balance of 

my time. 

Mr. MCGOVERN. Mr. Speaker, I just 

want to set the record straight. It is incorrect to say that there have been no 

hearings on this measure. In fact, the 

Financial Services Committee on Tuesday held a hearing—I think it began at 

around two o’clock in the afternoon 

and went into the evening. So there 

has been a hearing in the committee of 

jurisdiction on this. 

At this time, I would like to yield 4 

minutes to the gentleman from Massachusetts (Mr. FRANK). 

Mr. FRANK of Massachusetts. I 

thank my colleague. And we’ve had 

several hearings on this subject. 

Again, the timetable here has been 

forced by the bill we adopted last fall 

with the support of the Republican 

leadership and the President as well as 

the Democratic leadership. And as a 

concession to Members, we put in there 

that once the President asked for the 

second $350 billion it would trigger a 

15-day period in which we had to act. 

And we believe it’s important for the 

House to make clear what it wants to 

do here during that period. But we’ve 

been having hearings on this since the 

fall. 

We put into the bill last fall some 

good oversight. The Government Accountability Office put out a report 

last year very critical of the failure to 

demand that the financial institutions 

that received funds make clear what 

they were doing with them, and particularly to show to what extent they 

were re-lending. That was because we 

put into the bill that the GAO would be 

there from the first day in their offices. 

We had a hearing with Mr. Kashkari, 

the Bush appointee to run the program, 

and the GAO to deal with it. We had a 

further hearing on this subject in the 

fall. We then had the long hearing that 

the gentleman from Massachusetts 

talked about earlier this week to go 

into this in great detail on Monday. 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H331 

We have invited all Members as of 

Friday to submit amendments. A number of Members did so. In fact, I thank 

the Rules Committee; they have put 10 

amendments in order—one was a duplicate, so 10 are in order, five from Republicans, five from Democrats. Of the 

Republican amendments, I intend to 

vote for two; I intend to vote against 

three. There were also amendments 

that we received from some Republicans that we agreed to put in the 

manager’s amendment. 

The question is simply this, and it’s 

two-fold: First, on the broader question 

that’s not before us today, do we deny 

to President Obama a set of tools that 

this Congress voted for last fall because a great majority of Members on 

both sides think that the Bush administration used them poorly? If someone 

drives a car badly, do you sequester the 

car and deny it to someone else who 

wants to drive it? 

The TARP is not some living organism with a mind of its own. It is a set 

of policy tools. A newly elected President has asked that he be allowed to 

implement those tools. We say yes, 

but—and we are asking for some serious commitments about how it’s done. 

So that’s the first point. 

The second point is that this money, 

whether or not it is spent, will be in a 

separate vote. And the ranking Republican said yesterday, well, let’s wait for 

them to tell us how they plan to spend 

it. No, I don’t think we should do that. 

I think we should tell them how we 

want them to spend it and see if they 

agree. And we have been having conversations, and they do agree. 

We are talking about subjects that 

have been very familiar to Members. 

We are here trying to remedy defects in 

the Bush administration’s execution of 

this program—nothing for foreclosures, 

not enough for community banks, no 

restrictions on what the banks that receive the money use, tougher restrictions on compensation—though I know 

not everybody agrees with that. The 

Wall Street Journal Editorial Board— 

which I know represents the viewpoint 

of many on the Republican side—was 

very critical today because we are asking that money be used to reduce foreclosures; they say that’s a waste of 

money. They were scoffing, the Wall 

Street Journal—and again, I think that 

editorial reflects some of the opposition we have here—they scoffed at the 

notion that we want community banks 

to get some of the money. And they 

said, how can you possibly want the 

money to go to nonfinancial institutions? I guess the Wall Street Journal 

wants to be the ‘‘Wall-Street-Only 

Journal,’’ and any effort to deal with 

small businesses or automobiles, that’s 

somehow a profanation of the temple 

as far as they’re concerned. 

We have had serious discussions with 

the Obama administration. I believe it 

is important that we do two things: 

First of all, give the new President the 

right to spend the money; and, two, 

give him restrictions on how he spends 

it. 

Mr. DREIER. Mr. Speaker, I yield 

myself such time as I might consume. 

And I would simply say to my colleague that we all recognize that there 

is a pressing need out there, and the 

issue of foreclosures is one that does 

need to be addressed. And I know that 

we had a discussion in the Rules Committee the night before last on the 

issue of—and this is prospective, as I 

had said earlier—but this notion of trying to encourage people, prospective 

homebuyers, to buy up that surplus of 

housing out there by incentivizing 

them to put a down payment. Now, I 

know that this is an issue that transcends what we’re dealing with today— 

Mr. FRANK of Massachusetts. Would 

the gentleman yield? 

Mr. DREIER. I’m happy to yield to 

my friend. 

Mr. FRANK of Massachusetts. I 

think there is a lot to be said, but it is, 

of course, entirely outside the jurisdiction of the Financial Services Committee. 

Mr. DREIER. Absolutely. If I could 

reclaim my time, I will say that I know 

that it is outside the jurisdiction of the 

Financial Services Committee, but I 

think it is very important for us to do 

everything that we can to look at a 

broad range of creative proposals to try 

and deal with this crisis. 

And I am happy to further yield to 

my friend. 

Mr. FRANK of Massachusetts. I 

thank the gentleman. And I agree with 

that. And housing has been at the center. I would note—and it’s not directly 

relevant, and may, in fact, support this 

other proposal—but I would note that 

the homebuilders and the realtors 

strongly support the bill we are talking 

about today because they think it 

helps in other ways. It does not preempt what the gentleman from California is talking about, but those people who are most concerned with the 

housing industry support the bill and 

think it will be helpful. 

Mr. DREIER. I understand that. And 

let me reclaim my time, Mr. Speaker, 

and say that even though it does not 

fall within the jurisdiction of the Financial Services Committee, this kind 

of proposal is something that I would 

like to work with my colleague on and 

others on as a way to deal with the 

challenge of this huge supply of housing that exists in my State of California and in other States as well. And 

the fact that, unfortunately, over the 

past several years we have seen a wide 

range of people treating homes that 

they have purchased like rental units 

because they put zero down and have 

very low interest payments, and so 

they’re encouraged to walk away from 

it, our proposal here is one that is designed to ensure that people actually 

have a vested interest in that home. 

And with that, I’m happy to yield 2 

minutes to my very good friend from 

Hayes, Kansas (Mr. MORAN). 

Mr. MORAN of Kansas. I thank the 

gentleman from California for yielding. 

I am here about a specific provision 

that was initially in the legislation 

that we are going to address today. In 

fact, I came to that realization over 

the weekend and I contacted the gentleman from Massachusetts (Mr. 

FRANK), who was kind enough to return 

my phone call this past weekend. And 

as a result of an effort by many in this 

Congress, this provision has been removed. And I am here to commend the 

gentleman from Massachusetts and my 

colleagues on the Rules Committee for 

making in order a manager’s amendment that will eliminate a provision 

that denies the opportunity for those 

who receive funds under TARP from 

owning general aviation aircraft. 

Mr. FRANK of Massachusetts. Would 

the gentleman yield? 

Mr. MORAN of Kansas. I have very 

little time, but I would yield. 

Mr. FRANK of Massachusetts. I just 

want to congratulate him and his fellow Kansans and others who brought 

this to our attention. 

And let’s make one thing clear; we 

recently read—I did—in the New York 

Times about smaller communities that 

have lost commercial air service. To 

tell a business which is located in a 

community that has lost commercial 

air service that it can never charter or 

buy a plane is really to invite them to 

leave those communities. So it is not 

simply the airline industry that’s involved here, but it is economic fairness 

for small communities where businesses located there would have no 

other option if they aren’t allowed to 

go to private aircraft. 

Mr. MORAN of Kansas. Reclaiming 

my time. Again, I appreciate it for two 

reasons; a person who represents very 

rural America where air service is very 

limited, and someone who is from Kansas that represents the general aviation industry, which is very dominant. 

We are very appreciative of the fact 

that the provisions which would reduce 

employment in the aircraft industry 

and eliminate the opportunities for 

businesses to remain in rural America 

is stricken from this legislation in the 

manager’s amendment. 

Mr. MCGOVERN. I yield 3 minutes to 

the gentleman from California (Mr. 

SHERMAN). 

Mr. SHERMAN. I thank the gentleman for yielding. 

The bill is good as far as it goes, but 

before Congress thinks that we’re done 

with the TARP program, we ought to 

be considering legislation to make it 

stronger and to provide additional limits. 

First, and most important, we need 

to prohibit those companies that receive funds under this program from 

then paying dividends to their existing 

common shareholders or using their 

money to go buy the shares held by 

their existing shareholders. Why are we 

putting capital in if the company is 

then taking the capital out, and giving 

it to its existing shareholders? That 

needs to be prohibited by statute. At a 

minimum, I hope we get an unequivocal letter from the incoming administration that they will prevent such 


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H332 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

transfers by regulation, and through 

other means. 

Second, we need to make sure that if 

assets are purchased from the banks 

that were buying bad bonds, that such 

bonds were owned by American entities, including those with foreign parents, and that these bonds were owned 

by American entities on September 20, 

2008, which is when the whole dam 

broke. What we don’t want to do is see 

these monies go to buy bad bonds that 

were bad investments made in Shanghai and Riyadh and London. 

Third, this bill under consideration, 

and the TARP bill, allows for MillionDollar-a-Month salaries. We cannot go 

to the American people and say we 

have limited executive compensation 

except for the most common element 

of executive compensation, salaries. 

There ought to be a limit—and only on 

those companies, of course, that are 

holding taxpayer money. I say to those 

banks that want to pay more than a 

million a year, the banks that want to 

pay more than a million a month to 

some of their executives and say, fine, 

give us back the money first. 

And finally, as to perks, one thing 

that the American people have focused 

on is the use of private executive jets. 

This bill says you cannot use those— 

you can’t own them or lease them, at 

least—if your company is based in Detroit. But if you’re a Wall Street bank, 

buy, lease, fly whatever you want. That 

is a strange anti-Detroit dichotomy. 

Why should we prohibit these luxury 

jets? Because we want them to give us 

the money back. We don’t want every 

executive on Wall Street to come and 

take the TARP money and hold on to it 

as long as possible. 

Second, we want to encourage jobs in 

the commercial aircraft industry, both 

the manufacture and operation of those 

Boeing jets and United and American 

Airlines. And finally, because when the 

banks spend the money on ridiculous 

perks, whether it be extreme limos or 

extreme jets, that’s money they can’t 

lend to businesses in our districts. 

Mr. DREIER. Mr. Speaker, at this 

time I am happy to yield 3 minutes to 

our very diligent former Rules Committee member, the gentleman from 

Marietta, Georgia (Mr. GINGREY). 

Mr. GINGREY of Georgia. I thank 

the gentleman for yielding. 

I rise in opposition to this rule, 

which denies Members of this House an 

opportunity to have their amendments 

openly debated and given an up-ordown vote. 

The amendment which I offered, 

which was not made in order, would 

have very simply prohibited any additional budget authority for the TARP 

program unless at least 30 percent of 

the final $350 billion tranche is used to 

assist smaller, local community financial institutions. The 30 percent floor 

reflects the fact that approximately 30 

percent of our Nation’s deposits are 

held in these institutions, some 7,000 of 

them across the country. 

Mr. Speaker, without question, these 

smaller institutions are suffering on 

the front lines of a crisis that they did 

not create. However, they are uniquely 

positioned to help provide much-needed 

credit access to ordinary citizens looking to buy a car or buy a home or invest in a small business. 

Allow me to give an example. With 

every dollar in new capital a community bank can raise, it will help facilitate an additional $7 to $10 of lending 

in their communities. So by guaranteeing an appropriate portion of TARP 

authority to community institutions, 

we can better ensure this capital will 

indeed be put to good use. 

b 1045 

Mr. Speaker, when Congress first 

considered the economic stabilization 

package last fall, the most severe 

threat presented to us was across-theboard credit freeze that would have 

stopped all financial activity in its 

tracks. Well, we may have avoided a 

catastrophe on Wall Street, but now is 

the time to encourage lending and capital on Main Street. And while I am 

pleased to see the underlying bill recognizes that community financial institutions, including those that are privately thinly held or subchapter S 

should have are the same level of access to the program as larger institutions, H.R. 384 does not go far enough. 

We must address the current crisis 

from a systemic perspective, and my 

amendment, I believe, would have fostered meaningful participation from 

the smaller financial institutions 

which, after all, Mr. Speaker, are vital 

to the economic recovery of our Nation, our States, our congressional districts. They are the lifeblood. 

I ask my colleagues to oppose the 

rule. 

Mr. MCGOVERN. Mr. Speaker, I have 

no further requests for time. 

Mr. DREIER. Will the gentleman 

yield so I might engage in a colloquy? 

Mr. MCGOVERN. I would be happy to 

yield to the gentleman. 

Mr. DREIER. I thank my friend for 

yielding. 

Mr. Speaker, let me say that last 

night in the Rules Committee as this 

rule came forward, there was some concern voiced as to whether or not this 

rule may in some way preempt the opportunity for Members to, in fact, offer 

a resolution of disapproval to deal with 

this. 

Section 2 of the rule relates to the 

consideration of the resolution to disapprove the last $350 billion of TARP 

funds. Subsection b permits a Member 

to make a privileged motion to proceed 

on Wednesday, January 22, when it 

would normally only be available this 

coming Sunday. However, subsection a 

limits the motion to the majority leader rather than any Member. 

I just want to confirm again with the 

gentleman from Massachusetts, just as 

we did last night in the Rules Committee, that the purpose of this provision is only, only to allow the majority 

leader to manage the day’s schedule 

and will not in any way be used to deny 

Members an up-or-down vote on releasing the remaining TARP funds. 

And I thank my friend for yielding to 

me for the question and if he’d like to 

respond. 

Mr. MCGOVERN. The gentleman is 

correct. 

Mr. DREIER. Correct. Okay. I thank 

my friend for yielding on that. 

Mr. MCGOVERN. Mr. Speaker, I reserve the balance of my time. 

Mr. DREIER. Mr. Speaker, I would 

like to yield 1 minute to a very, very 

hardworking Member, a very senior 

Member from Indianapolis, Indiana 

(Mr. BURTON). 

Mr. BURTON of Indiana. I thank the 

gentleman for yielding. 

What does that mean, a ‘‘senior 

Member’’? I hope it doesn’t mean I look 

old. 

Mr. DREIER. If the gentleman would 

yield, he’s one term less senior than I. 

Mr. BURTON of Indiana. All right. 

Mr. Speaker, let me just say that 

Everett Dirksen, when he was a United 

States Senator, said, a billion here, a 

billion there, and you’re really talking 

about money, real money. Now it’s a 

trillion here, a trillion there, and 

you’re talking about real money. The 

only problem is the American people 

are going to face hyperinflation down 

the road if we continue down this path. 

Today we are talking about an additional $350 billion, and we don’t even 

know where the first $350 billion of the 

bailout was spent. It makes no sense to 

me to be voting for this today when we 

really don’t have any accountability 

for the first tranche, the $350 billion 

that has already been allocated. 

People in the stock market are taking a real bath. People who have investments, their life investments, in 

the stock market are taking a real 

bath. People who are going to retire or 

are already retired are taking a real 

bath. 

The SPEAKER pro tempore. The 

time of the gentleman has expired. 

Mr. DREIER. Mr. Speaker, at this 

time I am happy to yield to my friend 

from Indianapolis an additional 1 

minute. 

Mr. BURTON of Indiana. Mr. Speaker, it seems to me that the people who 

are having trouble in the stock market 

ought to start looking at places to invest like the ink that’s being sold to 

the U.S. Treasury or the paper that’s 

being sold to the U.S. Treasury that’s 

going to be used to print more and 

more and more money. 

I don’t want to take the whole extra 

minute my colleague has allocated to 

me, and I really appreciate it, but I 

would like to say if I were talking to 

the President or the American people 

that we have to control spending in 

this place. We have to control spending. If we don’t do that, we’re going to 

see very high inflation which will be 

followed by very high interest rates, 

will put a real kibosh and a rubber 

band effect on our economy. The way 

to solve this problem is to give the 

American people some of their money 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H333 

back with tax cuts and to cut capital 

gains. 

So I would like to end up by just saying let’s be more concerned about 

spending around here. Let’s really 

start thinking about it. It’s the people’s money. The taxpayers want accountability. 

Mr. MCGOVERN. Mr. Speaker, I yield 

myself such time as I may consume. 

I would just respond to the gentleman by saying that what we are debating today is not about releasing 

money. There’s no money attached to 

this bill. In fact, all this bill does really is set conditions on any money that 

may or may not be released. This bill 

also preserves this Chamber’s right to 

have a vote on the release of the next 

TARP tranche. 

Mr. DREIER. Will the gentleman 

yield? 

Mr. MCGOVERN. I yield to the gentleman. 

Mr. DREIER. I thank my friend for 

yielding. 

And I have got to say that the notion 

that somehow the measure that we’re 

trying to consider here today is not related to this idea of releasing, within 

this 15-day period, the additional $350 

billion is preposterous. It’s clear that 

it’s tied together. 

Mr. MCGOVERN. Mr. Speaker, reclaiming my time, I thank the gentleman for his observation, but I didn’t 

say that it was not related. The gentleman was talking about this bill as if 

today we’re releasing this money. 

What this bill does is set conditions. 

It makes it clear what Congress’ intention is on how that money should be 

spent if it should be released. If the 

gentleman or anybody else in this 

Chamber wants to vote against releasing additional money, they will have 

that opportunity at a later date. 

Mr. Speaker, I reserve the balance of 

my time. 

Mr. DREIER. Mr. Speaker, at this 

time I am happy to yield 5 minutes to 

our friend from Columbus, Indiana, the 

distinguished chairman of the Republican Conference (Mr. PENCE). 

(Mr. PENCE asked and was given permission to revise and extend his remarks.) 

Mr. PENCE. Mr. Speaker, I rise in opposition to the rule. 

Mr. Speaker, we are in a recession. 

Many American families are hurting. 

Many millions more worry that they’ll 

lose their job next. And it is important 

that this Congress, in legislation before 

us today, in the related legislation and 

in upcoming bills, take action. Inaction is not an option. But more important than just doing something, it is 

imperative that Congress, on behalf of 

the American people, do the right 

thing. And I rise today to say from my 

heart that the American people know 

we cannot borrow and spend and bail 

our way back to a growing economy. 

This legislation, related as it is to 

the second half of the banking bailout 

that passed the Congress last fall, is 

the wrong approach. I opposed that legislation last fall both times it came up 

because I believe that economic freedom means the freedom to succeed and 

the freedom to fail. The decision that 

Congress made to give the Federal Government the ability to nationalize almost every bad mortgage in America 

interrupted this basic truth. There 

were no easy answers at the time. But 

the American people deserved to know 

then and deserve to know now there 

are alternatives to massive government spending and bailouts. 

We come today to consider legislation that, as the gentleman just stated, 

is preamble, if you will, to the TARP 

vote that may or may not come to this 

body, and I acknowledge that. But the 

truth is that it is all interrelated. And 

Congress and this body may soon be 

asked to approve and police the second 

$350 billion installment to the financial 

markets in this country approved last 

fall, and we will be asked to do so 

under a new set of promises from a 

Congress in this legislation and a 

President, neither of which’s sincerity 

do we question on this floor today, but 

it’s a set of promises about oversight 

and promises that we’ll spend the 

money better, and I rise today to say 

that there is just simply a better way. 

Taxpayers should not be asked to pay 

another $350 billion for a bailout that 

could be disbursed far beyond the original authorization of this Congress to 

undetermined industries in ways that 

we have seen used already for the initial tranche of this bill. House Republicans believe that enough is enough. 

We believe, as most Americans do, that 

we cannot borrow and spend and bail 

our way back to a growing economy. 

The real answer that House Republicans embrace, and I believe that it is 

an answer that most Americans embrace, is that it is time for us to put 

the American taxpayer first. It’s time 

for us to say ‘‘no’’ to more bailouts, 

however well additionally supervised, 

no more bailouts, no more excessive 

government spending. It’s time this 

Congress began to reduce the burden of 

taxes on working families, small businesses, and family farms and began to 

practice the kind of fiscal discipline 

that the American people expect. 

So I rise today in opposition to this 

rule and the underlying bill. And however well-intentioned, I believe it is, in 

effect, only preamble to legislation 

that could come to this floor that 

would be the wrong decision for the 

American people. The American people 

want us to walk away from the politics 

of bailouts, and they want us to take 

this country in the direction where 

we’re not releasing the power of the 

Treasury to solve our very real economic woes but we are passing the kind 

of tax relief that will release the resources, the genius, the courage, and 

the ingenuity of the American people. 

As President John F. Kennedy said, all 

ships will then rise on a rising tide. 

Mr. MCGOVERN. Mr. Speaker, I have 

no further requests for time, and I reserve the balance of my time. 

Mr. DREIER. Mr. Speaker, I yield 

myself such time as I might consume 

simply to rise and compliment my 

friend from Columbus, our Republican 

Conference Chair, for his very thoughtful remarks on this issue. And I hope 

very much that we will be able to proceed with a strong and rigorous debate. 

Unfortunately, Mr. Speaker, this rule 

does not allow us to have the kind of 

debate that I think this institution or 

the American people deserve, and I say 

that again reminding our friends that 

the so-called manager’s amendment 

takes a huge package of amendments 

and does not allow the kind of transparency about which Mr. Obama has 

spoken because we won’t have time to 

debate them. I guess there’s, what, 40 

minutes debate, 20 minutes on each 

side, to discuss all of the amendments 

that have been made in order and is I 

do not believe an adequate amount of 

time for us to go through the kind of 

detail that I think the American people 

deserve and that Members of this institution deserve. 

Mr. Speaker, I will say I have been 

waiting patiently for one of our colleagues; so I just want him to know 

that I made an attempt to yield time 

to him. His name will not be mentioned 

at this point for fear that anyone 

might think that he was being derelict 

in his duties. I’m sure he is very, very 

busy. 

Let me say that we are proceeding on 

an issue which I don’t believe we 

should be dealing with at this moment. 

The reason I say that is that we have 

not had adequate hearings, we have not 

had adequate deliberation on this question, and there is acknowledgment 

from our friend the Chair of the Committee on Financial Services that the 

measure that we will be proceeding 

with will never become public law. It is 

being used as a consultative tool with 

the incoming administration. Needless 

to say, this is a somewhat unusual procedure that the House is going to deal 

with an issue that is not going to become public law, and as the House is 

looking at this, discussions are taking 

place with the administration. 

b 1100 

It is unusual, to say the least. Now, I 

recognize that we are in near unprecedented times, and we need to deal responsibly with the economic downturn 

through which the United States of 

America and the world is now going. 

But I don’t believe that we should be 

casting aside our responsibility as 

Members of this institution to do the 

right thing. 

I think that the right thing for us is 

to actually spend the time and effort 

looking at creative solutions. At this 

moment, there is a hearing taking 

place among our Republican economic 

stimulus group. I was there earlier this 

morning. We have a couple of very 

thoughtful witnesses who I suspect are 

still testifying. The former Governor of 

Massachusetts and Presidential candidate, Mitt Romney; the former president and CEO of eBay, Meg Whitman, 


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H334 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

were testifying just as I was leaving, 

and there are several other witnesses 

coming before this working group of 

which I am privileged to be a part. 

There are lots of ideas that are coming to that hearing, not just from the 

witnesses, Mr. Speaker, but from the 

American people as well. Those are actually being voiced at that hearing. 

So here we are, I believe, rushing 

ahead with legislation that is not going 

to become law and, quite possibly, allowing an additional $350 billion to be 

expended on this very, very troubled, 

troubled asset relief plan. I, for one, believe it is wrong for us to do it as we 

are doing it. 

So, Mr. Speaker, I urge my colleagues to vote ‘‘no’’ on this rule and 

to vote ‘‘no’’ on the underlying legislation. 

With that, I yield back the balance of 

my time. 

Mr. MCGOVERN. Mr. Speaker, the 

Bush economic policies over the 8 years 

have been a failure. They have been a 

miserable failure. We have an incredibly high number of people who have 

lost their jobs. December marked the 

second highest number of foreclosures 

in the history of the United States of 

America. We have the highest deficit 

and the highest debt in the history of 

our country. 

Unless we do something, something 

big and something bold, the economy 

will get worse. We have the worst economy since the Great Depression. 

People don’t want to hear anymore 

speeches. People don’t want to hear 

anymore excuses. The people of this 

country don’t want us to stand on the 

House floor and say we feel your pain. 

What people want is action and people want smart, bold, big, effective action by this Congress. What we are 

doing here today is trying to put forward in blueprint so if, in fact, anymore money is going to be released as 

part of the TARP, that it is clear where 

that money will be spent. We are not 

content to just take the next administrations at their word. 

We want to make it very clear where 

Congress stands. This is a chance for 

people to decide. If you are for foreclosure relief, then you should be supporting the bill that Chairman FRANK

has put forward. If that’s not important to you, then you can vote ‘‘no.’’ If 

you want accountability, then you 

should support this bill. If that’s not 

important, then put it aside. 

If you think that the United States 

House of Representatives should have a 

say in how this money is spent, then I 

think you should support this bill. If 

not, then fine. You don’t have to support it. 

Mr. DREIER. Will the gentleman 

yield? 

Mr. MCGOVERN. I am happy to yield 

to the gentleman from California. 

Mr. DREIER. I thank my friend for 

yielding. 

Mr. Speaker, I would just like to say 

the gentleman we were waiting for earlier has arrived. I was wondering if I 

might reclaim a little of my time and 

allow my friend to offer his remarks. 

Mr. MCGOVERN. I have no objection 

to that. 

The SPEAKER pro tempore. Without 

objection, the gentleman is recognized. 

There was no objection. 

Mr. DREIER. So the gentleman will 

be able to continue his very brilliant 

closing statement. 

Mr. MCGOVERN. Why don’t I reserve 

my final close and let you yield. 

Mr. DREIER. Brilliant idea. 

At this time, Mr. Speaker, I would be 

very, very happy to yield 2 minutes to 

my friend from Palm Harbor, Florida 

(Mr. BILIRAKIS). 

Mr. BILIRAKIS. I thank the gentleman for yielding. 

Mr. Speaker, I rise in opposition to 

this restrictive rule. The last Congress 

approved transferring $350 billion of 

this Nation’s wealth to Wall Street 

with little transparency, less accountability and, worst of all, with no real 

effect on our failing economy. 

Many of our constituents are opposed 

to the use of the money to bail out 

Wall Street. Some of them are so angry 

at Congress they no longer trust anyone in government. 

I submitted an amendment to the 

Rules Committee that would have required institutions receiving bailout 

funds to disclose the compensation of 

their highest-paid executives and directed the Treasury Department to 

maintain a searchable database of that 

information. 

Unfortunately, my amendment was 

made out of order. This Congress is entrusting $700 billion of taxpayers’ moneys to executives on Wall Street, and 

yet Congress won’t even require those 

same executives to disclose what they 

are paying themselves. 

I believe we need this information to 

help us make informed decisions about 

the use of taxpayers’ money to help the 

people and companies that greatly contributed to our current economic crisis. Our constituents deserve to know 

how those to whom we have given their 

money are using it. If Congress fails to 

insist on at least the most basic mechanisms of transparency while handing 

billions to Wall Street, we will have 

victimized the American people and 

done irreparable harm to the reputation of this institution. 

I hope in the future the majority 

heeds our incoming President’s call for 

bipartisanship in this body and openness in government, goals towards 

which my amendment would have 

made progress. 

Mr. DREIER. Mr. Speaker, I yield 

myself the balance of our time, and the 

gentleman from Massachusetts is going 

to offer his closing statements then. 

I would just like to take a moment if 

I might, Mr. Speaker. The distinguished chairman of the Financial 

Services Committee, Mr. FRANK, as he 

reminded us in the Rules Committee 

the day before yesterday, and I came to 

Congress in 1980. We did so at a very 

challenging economic time for the 

United States. 

I would like to remind our colleagues 

that Ronald Reagan was elected President the same day that Mr. FRANK and 

I were elected to serve in the House of 

Representatives. At that time we were 

dealing with double-digit unemployment, interest rates that were well 

into double digits and economic news 

that was, in fact, very, very dire. 

Now, I am no way diminishing, diminishing, the seriousness of the economic challenges that we face today, 

but I think that it is very important 

for us to note that the economy that 

Ronald Reagan inherited, when some of 

us first arrived here, was, in fact, in a 

more serious and dire circumstance 

than we face today. The reason I say 

that is that it has become a standard 

line over the last week or two to say 

that we are, in fact, in the most serious 

economic time since the Great Depression. 

Now, I hope and pray that that is not 

the case, but, again, if we look at simply the numbers that existed in the 

early part of the 1980s, when Mr. FRANK

and I arrived here in the Congress, to 

what they are today, we still have a lot 

of work to do, but I believe that Ronald 

Reagan faced more serious challenges 

than we face now. 

Now, I will say that I don’t know 

what tomorrow is going to bring. No 

one knows what tomorrow is going to 

bring, but I believe that the solutions 

that we put into place in the early 

1980s were, in fact, very positive ones, 

which brought about marginal rate reduction, which increased by $1 trillion 

the flow of revenues to the Federal 

Treasury through the 1980s. And, yes, 

we did see an increase in the size of the 

Federal deficit. 

This Congress ended up spending an 

awful lot more money than had been 

anticipated or than Ronald Reagan or 

some of the rest of us would have wanted. We also know that there was a dramatic buildup in defense spending that 

took place during the 1980s, and I believe at this juncture we have seen the 

great benefit of that. 

In fact, this year we marked the very 

important 20th anniversary of many, 

many, many of the great accomplishments that came from what Ronald 

Reagan did during the 1980s. 

Mr. FRANK of Massachusetts. Will 

the gentleman yield? 

Mr. DREIER. Of course, I am happy 

to yield to my friend, the distinguished 

Chair of the Committee on Financial 

Services. 

Mr. FRANK of Massachusetts. He 

says that Ronald Reagan didn’t like 

the spending of the Congress during his 

administration. Of course, for 6 of 

those 8 years he had a Republican Senate, but the point is, if he didn’t like it, 

he exercised great self-restraint because he never vetoed one of those 

spending bills that he apparently didn’t 

like. 

Mr. DREIER. Well, if I could reclaim 

my time, I would say that Ronald 

Reagan did not like a lot of that spending. Maybe he tolerated some of that 

spending, is what I might acknowledge. 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H335 

But the fact is there was more spending than Ronald Reagan or any of the 

rest of us would have liked in the 1980s 

on a wide range of programs, but I did 

acknowledge the dramatic increase in 

defense spending. Again, this year, 

2009, marks the 20th anniversary of the 

crumbling of the Berlin Wall and dramatic changes that took place in Asia, 

Africa, Europe that I think need to be 

realized that came from that very, very 

difficult economic challenge that Ronald Reagan inherited in 1981. 

So I would say, Mr. Speaker, that I 

think it’s important for us to use the 

kinds of solutions that worked in the 

early 1980s, if we can. All I am arguing, 

as we look at the debate on this rule 

and the underlying legislation that, 

we, unfortunately, are not turning to 

those very thoughtful time tested alternatives. 

It’s for that reason that I urge my 

colleagues to vote ‘‘no’’ on this rule 

and on the underlying legislation. I appreciate my colleagues allowing our 

friend from Florida to have the chance 

to speak. 

I yield back the balance of my time. 

Mr. MCGOVERN. Mr. Speaker, I just 

want to close by saying that I appreciate the history lesson on Ronald 

Reagan and the Berlin Wall and all the 

other things that were mentioned. 

But the harsh reality is that people 

are suffering. As we speak, people are 

losing their homes. The foreclosure 

numbers in December were the second 

highest, were the second highest in the 

history of this country. People need 

help now. We need to do something 

now. 

So the point of this legislation is to 

help provide a blueprint for this new 

administration which has already outlined similar views but to basically reinforce what they have said they want 

to do, to help provide foreclosure relief, 

more accountability, to be able to help 

small businesses get the credit they 

need, so they can employ more people. 

We need to get this economy on the 

right track, and Congress should have 

a say in it. 

So I would urge my colleagues to 

vote ‘‘yes’’ on the underlying bill and I 

would urge them to vote ‘‘yes’’ on the 

bill. I urge a ‘‘yes’’ vote on the previous question. 

Ms JACKSON-LEE of Texas. Thank you, 

Mr. Speaker, for affording me this opportunity 

to address H. Res. 62, the rule providing for 

consideration of H.R. 384, the TARP Reform 

and Accountability Act of 2009. I believe the 

rule can be supported by every Member of the 

House. 

Mr. Speaker, I was pleased to work with 

Chairman FRANK and his staff on significant 

portions of this Manager’s Amendment to ensure that small and minority businesses along 

with local, community, and private banks gain 

fair and equitable access to the TARP funds. 

Small businesses are the backbone of our Nation, and unfortunately, they have not been afforded the opportunity that large financial institutions have received to TARP funds and 

loans. With the ever worsening economic crisis, we must ensure in this legislation that 

small and minority businesses and community 

banks are afforded an opportunity to benefit 

from this important legislation. I am very 

pleased that this Manager’s Amendment does 

just this. 

This bill will amend the TARP provisions of 

the Emergency Economic Stabilization Act of 

2008 (EESA) to strengthen accountability, 

close loopholes, increase transparency, and 

most importantly, require the Treasury Department to take significant steps on foreclosure 

mitigation. Mr. Speaker, I was particularly 

pleased to work with Chairman FRANK and his 

staff on significant portions of the Manager’s 

Amendment to this legislation which ensures 

that small and minority businesses along with 

local, community, and private banks gain fair 

and equitable access to the TARP funds. 

It’s been 3 months since the Treasury started disbursing TARP funds. Just in time perhaps for a lot of big banks, however smaller 

banks have been locked out so far. A lot of 

small banks certainly are in need of relief as 

the real estate crisis continues to unfold and 

hundreds have already applied. 

According to recent reports, the Treasury 

Department has yet to issue ‘‘the necessary 

guidelines for about 3,000 additional private 

banks. Most of them are set up as partnerships, with no more than 100 shareholders. 

They are not able to issue preferred shares to 

the government in exchange for capital injections, as other banks can.’’ While Treasury officials state they are ‘‘working on a solution,’’ 

for these private banks time is of the essence. 

The Treasury Department has handed out 

more than $155 billion to 77 banks. Of that 

sum, $115 billion has gone to the eight largest 

banks. Community banks hold 11 percent of 

the industry’s total assets and play a vital role 

in small business and agriculture lending. 

Community banks provide 29 percent of small 

commercial and industrial loans, 40 percent of 

small commercial real estate loans and 77 

percent of small agricultural production loans. 

Specifically, I worked with Chairman FRANK

on the language in the Manager’s Amendment. In Section 107, the Manager’s Amendment creates an Office of Minority and Women 

Inclusion, which will be responsible for developing and implementing standards and procedures to ensure the inclusion and utilization of 

minority and women-owned businesses. 

These businesses will include financial institutions, investment banking firms, mortgage 

banking firms, broker-dealers, accountants, 

and consultants. Furthermore, the inclusion of 

these businesses should be at all levels, including procurement, insurance, and all types 

of contracts such as the issuance or guarantee of debt, equity, or mortgage-related securities. This office will also be responsible for 

diversity in the management, employment, and 

business activities of the TARP, including the 

management of mortgage and securities portfolios, making of equity investments, the sale 

and servicing of mortgage loans, and the implementation of its affordable housing programs and initiatives. 

Section 107 also calls for the Secretary of 

the Treasury to report to Congress in 180 

days detailed information describing the actions taken by the Office of Minority and 

Women Inclusion, which will include a statement of the total amounts provided under 

TARP to small, minority, and women-owned 

businesses. The Manager’s Amendment in 

Section 404 also has clarifying language ensuring that the Secretary has authority to support the availability of small business loans 

and loans to minority and disadvantaged businesses. This will be critical to ensuring that 

small and minority businesses have access to 

loans, financing, and purchase of assetbacked securities directly through the Treasury 

Department or the Federal Reserve. 

Mr. Speaker, and I urge my colleagues to 

support this rule. 

Mr. MCGOVERN. Mr. Speaker, I yield 

back the balance of my time, and I 

move the previous question on the resolution. 

The previous question was ordered. 

The resolution was agreed to. 

A motion to reconsider was laid on 

the table. 

The SPEAKER pro tempore. Pursuant to House Resolution 62 and rule 

XVIII, the Chair declares the House in 

the Committee of the Whole House on 

the state of the Union for the further 

consideration of the bill, H.R. 384. 

b 1113 

IN THE COMMITTEE OF THE WHOLE

Accordingly, the House resolved 

itself into the Committee of the Whole 

House on the State of the Union for the 

further consideration of the bill (H.R. 

384) to reform the Troubled Assets Relief Program of the Secretary of the 

Treasury and ensure accountability 

under such Program, and for other purposes, with Mr. ROSS (Acting Chair) in 

the chair. 

The Clerk read the title of the bill. 

The Acting CHAIR. When the Committee of the Whole House rose on 

Wednesday, January 14, 2009, all time 

for general debate, pursuant to House 

Resolution 53, had expired. 

Pursuant to House Resolution 62, no 

further general debate is in order, and 

the bill shall be considered read for 

amendment under the 5-minute rule. 

The text of the bill is, as follows: 

H.R. 384 

Be it enacted by the Senate and House of Representatives of the United States of America in 

Congress assembled, 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as 

the ‘‘TARP Reform and Accountability Act 

of 2009’’. 

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

Sec. 1. Short title; table of contents. 

TITLE I—MODIFICATIONS TO TARP AND 

TARP OVERSIGHT 

Sec. 101. New conditionality for TARP-assisted institutions. 

Sec. 102. Executive compensation and corporate governance. 

Sec. 103. New lending by insured depository 

institutions that is attributable 

to TARP investments and assistance. 

Sec. 104. Other protections for the taxpayer. 

Sec. 105. Availability of TARP funds to 

smaller community institutions. 

Sec. 106. Increase in size and authority of 

Financial Stability Oversight 

Board. 

Sec. 107. Clarification. 

TITLE II—FORECLOSURE RELIEF 

Sec. 201. TARP foreclosure mitigation plan 

and implementation. 


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Sec. 202. Elements of plan. 

Sec. 203. Program alternatives. 

Sec. 204. Systematic foreclosure prevention 

and mortgage modification plan 

established. 

Sec. 204. Modification of plan. 

Sec. 205. Servicer safe harbor. 

Sec. 206. Report by Congressional Oversight 

Panel. 

TITLE III—AUTO INDUSTRY FINANCING 

AND RESTRUCTURING 

Sec. 301. Short title. 

Sec. 302. Direct loan provisions. 

TITLE IV—CLARIFICATION OF 

AUTHORITY 

Sec. 401. Consumer loans. 

Sec. 402. Municipal securities. 

Sec. 403. Commercial real estate loans. 

TITLE V—HOPE FOR HOMEOWNERS 

PROGRAM IMPROVEMENTS 

Sec. 501. Changes to HOPE for Homeowners 

Program. 

Sec. 502. Funding of increased HOPE for 

Homeowners Program credit 

subsidy costs. 

TITLE VI—HOME BUYER STIMULUS 

Sec. 601. Home buyer stimulus program. 

TITLE VII—FDIC PROVISIONS 

Sec. 701. Permanent increase in deposit insurance. 

Sec. 702. Extension of restoration plan period. 

Sec. 703. Borrowing authority. 

Sec. 704. Systemic risk special assessments. 

TITLE I—MODIFICATIONS TO TARP AND 

TARP OVERSIGHT 

SEC. 101. NEW CONDITIONALITY FOR TARP-ASSISTED INSTITUTIONS. 

(a) IN GENERAL.—Section 113 of the Emergency Economic Stabilization Act of 2008 (12 

U.S.C. 5223) is amended by adding at the end 

the following new subsections: 

‘‘(e) REPORTING, MONITORING AND ACCOUNTABILITY.— 

‘‘(1) PERIODIC PUBLIC REPORTING ON USE OF

ASSISTANCE.—The Secretary shall require 

any assisted institution that became an assisted institution on or after October 3, 2008, 

to publicly report, not less than quarterly, 

on such institution’s use of the assistance . 

‘‘(2) ADDITIONAL REQUIREMENTS AND COMPLIANCE.—The Secretary— 

‘‘(A) may establish additional reporting 

and information requirements for any direct 

or indirect recipient of any assistance or 

benefit at any time on or after October 3, 

2008, that involves the obligation or expenditure, loan, or investment of funds available 

to the Secretary under this title; and 

‘‘(B) shall establish appropriate mechanisms to ensure appropriate use and compliance with all terms of any use of funds made 

available under this title. 

‘‘(3) CONSULTATION.—The Secretary shall 

consult with the appropriate Federal banking agencies in establishing the reporting requirements under this subsection that are 

applicable to insured depository institutions. 

‘‘(f) USE AND ACCOUNTABILITY FOR USE OF

FUNDS.— 

‘‘(1) INSURED DEPOSITORY INSTITUTION.— 

‘‘(A) INVESTMENT IN OR OTHER INJECTION OF

FUNDS INTO A DEPOSITORY INSTITUTION.—As a 

condition for the provision of any investment in the capital or assets of, or any other 

provision of assistance to or for the benefit 

of, any insured depository institution, the 

Secretary shall incorporate into the agreement for such investment or assistance an 

agreement between the depository institution and the appropriate Federal banking 

agency with respect to such institution on 

the manner in which the funds are to be used 

and benchmarks that the institution is required to meet in using the funding so as to 

advance the purposes of this Act to strengthen the soundness of the financial system and 

the availability of credit to the economy. 

‘‘(B) EXAMINATIONS.—In the case of any assisted insured depository institution that became an assisted institution on or after October 3, 2008, the appropriate Federal banking agency shall specifically review at least 

once annually the use, by the institution, of 

funds made available under this Act and 

compliance by the institution with the requirements established by or pursuant to 

this title or by agreement of the institution 

with the Secretary or the appropriate Federal banking agency, including executive 

compensation and any other specific agreement terms. Such review may be conducted 

in connection with the regular full-site examination, or any other examination. 

‘‘(C) COMPLIANCE PROCEDURES REQUIRED.— 

Each appropriate Federal banking agency 

shall prescribe regulations requiring assisted 

insured depository institutions to establish 

and maintain procedures designed to assure 

and monitor the compliance of such depository institutions with the requirements established by or pursuant to this title or by 

agreement of the institution with the Secretary or such agency. 

‘‘(2) USE OF TARP FUNDS FOR MERGERS OR

ACQUISITIONS.—Effective as of the date of the 

enactment of the TARP Reform and Accountability Act of 2009, no assisted institution that became an assisted institution at 

any time on or after October 3, 2008, may 

merge or consolidate with any insured depository institution or, either directly or indirectly, acquire the assets of, or assume liability to pay any deposits made in, any insured depository institution, and no Federal 

banking agency may approve any such action under section 18(c) of the Federal Deposit Insurance Act, while any of such assistance is outstanding unless, prior to the approval of such agency, the Secretary has determined in consultation with any relevant 

Federal banking agencies that— 

‘‘(A) such action will reduce risk to the 

taxpayer; or 

‘‘(B) the transaction could have been consummated without funds provided under this 

title. 

‘‘(3) NONDEPOSITORY INSTITUTIONS.—In the 

case of any assisted institution that became 

an assisted institution on or after October 3, 

2008, and is not described in and subject to 

paragraph (1), the Secretary shall establish 

such reporting requirements and require any 

other conditions or agreements no less stringent than those applicable to assisted insured depository institutions, including requirements to conduct examinations of the 

books, affairs, and procedures of any such financial institution by the Secretary or by 

delegation to the Board. 

‘‘(g) NO IMPEDIMENT TO WITHDRAWAL.—Subject to consultation with the appropriate 

Federal banking agencies, the Secretary 

may permit an insured depository institution to repay any assistance previously provided under this title to such depository institution without regard to whether the depository institution has replaced such funds 

from any other source.’’. 

(b) DEFINITIONS.—Section 3 of the Emergency Economic Stabilization Act of 2008 (12 

U.S.C. 5202) is amended by adding at the end 

the following new paragraphs: 

‘‘(10) DEFINITIONS RELATING TO INSURED DEPOSITORY INSTITUTIONS.—The terms ‘depository institution’, ‘insured depository institution’, ‘Federal banking agency’ and ‘appropriate Federal banking agency’ have the 

same meanings as in section 3 of the Federal 

Deposit Insurance Act. 

‘‘(11) ASSISTED INSTITUTION.—The terms 

‘assisted institution’ or ‘assisted insured depository institution’ means any such institution that receives, directly or indirectly, any 

assistance or benefit that involves the obligation or expenditure, loan, or investment of 

funds available to the Secretary under title 

I.’’. 

SEC. 102. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE. 

(a) IN GENERAL.—Section 111 of the Emergency Economic Stabilization Act of 2008 (12 

U.S.C. 5221) is amended by adding at the end 

the following new subsections: 

‘‘(e) ACROSS-THE-BOARD EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE REQUIREMENTS.— 

‘‘(1) STANDARDS REQUIRED.—Effective as of 

the date of the enactment of the TARP Reform and Accountability Act of 2009 and notwithstanding any provision of, and in addition to any requirement of subsection (a), 

(b), or (c) (other than the definitions in subsection (b)(3)), the Secretary shall require 

any assisted institution to meet standards 

for executive compensation and corporate 

governance while any assistance under this 

title is outstanding. 

‘‘(2) SPECIFIC REQUIREMENTS.—The standards established under paragraph (1) shall include— 

‘‘(A) limits on compensation that exclude 

incentives for senior executive officers of an 

assisted institution which received assistance under this title to take unnecessary 

and excessive risks that threaten the value 

of such institution during the period that 

any assistance under this title is outstanding; 

‘‘(B) a provision for the recovery by such 

institution of any bonus or incentive compensation paid to a senior executive officer 

based on statements of earnings, gains, or 

other criteria that are later found to be materially inaccurate; 

‘‘(C) a prohibition on such institution making any golden parachute payment to a senior executive officer during the period that 

the assistance under this title is outstanding; 

‘‘(D) a prohibition on such institution paying or accruing any bonus or incentive compensation, during the period that the assistance under this title is outstanding, to the 25 

most highly-compensated employees; and 

‘‘(E) a prohibition on any compensation 

plan that would encourage manipulation of 

such institution’s reported earnings to enhance the compensation of any of its employees. 

‘‘(3) DIVESTITURE.—During the period in 

which any assistance under this title to any 

assisted institution is outstanding, the institution may not own or lease any private passenger aircraft, or have any interest in such 

aircraft, except that such institution shall 

not be treated as being in violation of this 

provision with respect to any aircraft or interest in any aircraft that was owned or held 

by the institution immediately before receiving such assistance, as long as the recipient demonstrates to the satisfaction of the 

Secretary that all reasonable steps are being 

taken to sell or divest such aircraft or interest. 

‘‘(4) APPLICABILITY TO PRIOR ASSISTANCE.— 

Notwithstanding any limitations included in 

subsection (a), (b), or (c) with regard to applicability, the Secretary may apply the requirements of and the standards established 

under this subsection to any assisted institution that received any assistance under this 

title on or after the date of the enactment of 

the TARP Reform and Accountability Act of 

2009. 

‘‘(f) BOARD OBSERVER.—The Secretary may 

require the attendance of an observer delegated by the Secretary, on behalf of the Secretary, to attend the meetings of the board 

of directors of any assisted institution that 

became an assisted institution on or after 


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October 3, 2008, and any committees of such 

board of directors, while any assistance 

under this title is outstanding.’’. 

(b) REPEAL OF DE MINIMIS EXCEPTION.— 

Section 111(c) of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5221(c)) is 

amended by striking ‘‘and only where such 

purchases per financial institution in the aggregate exceed $300,000,000 (including direct 

purchases),’’. 

SEC. 103. NEW LENDING BY INSURED DEPOSITORY INSTITUTIONS THAT IS ATTRIBUTABLE TO TARP INVESTMENTS AND ASSISTANCE. 

Section 7(a) of the Federal Deposit Insurance Act (U.S.C. 1817(a)) is amended by adding at the end the following new paragraph: 

‘‘(12) LENDING INCREASES ATTRIBUTABLE TO

INVESTMENT OR OTHER ASSISTANCE UNDER THE

TROUBLED ASSETS RELIEF PROGRAM.— 

‘‘(A) IN GENERAL.—Each report of condition 

filed pursuant to this subsection by an insured depository institution which received 

an investment or other assistance under the 

Troubled Assets Relief Program established 

by the Emergency Economic Stabilization 

Act of 2008 or section 136(d) of the Energy 

Independence and Security Act of 2007 shall 

report the amount of any increase in new 

lending in the period covered by such report 

(or the amount of any reduction in any decrease in new lending) that is attributable to 

such investment or assistance, to the extent 

possible. 

‘‘(B) ALTERNATIVE MEASURE.—If an insured 

depository institution that is subject to subparagraph (A) cannot accurately quantify 

the effect that an investment or other assistance under such Troubled Assets Relief Program has had on new lending by the institution, the insured depository institution shall 

report the total amount of the increase in 

new lending, if any, in the period covered by 

such report. 

‘‘(C) DESIGNATION OF REPORTING REQUIREMENT.—The Federal banking agencies and 

the Secretary of the Treasury shall specify 

the form, content, and manner of reports required under this paragraph.’’. 

SEC. 104. OTHER PROTECTIONS FOR THE TAXPAYER. 

(a) WARRANT REQUIREMENTS.—Subsection 

(d) of section 113 of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5223(d)) is 

amended by striking paragraph (1) and inserting the following new paragraph: 

‘‘(1) WARRANTS.— 

‘‘(A) IN GENERAL.—The Secretary may not 

provide any assistance under this title to 

any institution, unless the Secretary, receives from the institution— 

‘‘(i) in the case of an institution the securities of which are traded on a national securities exchange, a warrant giving the right to 

the Secretary to receive nonvoting common 

stock or preferred stock in such institution, 

or voting stock, with respect to which the 

Secretary agrees not to exercise voting 

power, whichever the Secretary determines 

appropriate; or 

‘‘(ii) in the case of an institution other 

than one described in clause (i), a warrant 

for common or preferred stock, or an instrument that is the economic equivalent (as determined by the Secretary) of such a warrant 

in the financial institution (in the case of a 

mutual association), holding company of the 

financial institution, or any company that 

controls a majority stake in the financial institution, whichever the Secretary determines appropriate. 

‘‘(B) AMOUNT.— 

‘‘(i) IN GENERAL.—The warrants or instruments described in subparagraph (A) with respect to an assisted institution shall have a 

value equal to 15 percent of the aggregate 

amount of all assistance provided to the institution under this title. Such warrants or 

instruments shall entitle the Government to 

purchase— 

‘‘(I) nonvoting common stock, up to a maximum amount of 15 percent of the issued and 

outstanding common stock of — 

‘‘(aa) the assisted institution; or 

‘‘(bb) in the case of an assisted institution, 

the securities of which are not traded on a 

national securities exchange, a holding company or company that controls a majority of 

the stock thereof (in this section referred to 

as the ‘warrant common’); and 

‘‘(II) preferred stock having an aggregate 

liquidation preference equal to 15 percent of 

such aggregate loan amount, less the value 

of common stock available for purchase 

under the warrant common (in this section 

referred to as the ‘warrant preferred’). 

‘‘(ii) COMMON STOCK WARRANT PRICE.—The 

exercise price on a warrant or instrument described in paragraph (1) shall be— 

‘‘(I) the 15-day trailing average, as of 1 day 

prior to the date on which any commitment 

to provide assistance under this title was entered into, of the market price of the common stock of the assisted institution; or 

‘‘(II) in the case of an assisted institution, 

which is a mutual association or the securities of which are not traded on a national securities exchange, the economic equivalent 

of the market price described in clause (I), as 

determined by the Secretary. 

‘‘(iii) TERMS OF PREFERRED STOCK WARRANT.— 

‘‘(I) IN GENERAL.—The initial exercise price 

for the preferred stock warrant shall be $0.01 

per share or such greater amount as the corporate charter may require as the par value 

per share of the warrant preferred. The Government shall have the right to immediately 

exercise the warrants. 

‘‘(II) REDEMPTION.—The warrant preferred 

may be redeemed at any time after exercise 

of the preferred stock warrant at 100 percent 

of its issue price, plus any accrued and unpaid dividends.’’. 

(b) REPEAL OF CERTAIN EXCEPTION.—Section 113(d)(3) of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5223(d)(3)) 

is amended by striking subparagraph (A). 

(c) TECHNICAL AND CONFORMING AMENDMENTS.—Section 113(d)(2) of the Emergency 

Economic Stabilization Act of 2008 (12 U.S.C. 

2553(d)) is amended by striking subparagraph 

(E). 

SEC. 105. AVAILABILITY OF TARP FUNDS TO 

SMALLER COMMUNITY INSTITUTIONS. 

(a) PROMPT ACTION.—The Secretary shall 

promptly take all necessary actions to make 

available funds under title I of the Emergency Economic Stabilization Act of 2008 to 

smaller community financial institutions. 

(b) COMPARABLE TERMS.—If any institution 

becomes an assisted institution after the 

date of the enactment of this Act, such funding for depository institutions that— 

(1) have submitted applications on which 

no action has been taken, such as institutions that are C corporations (including privately held institutions) and community development financial institutions; or 

(2) are of a type for which the Secretary 

has not yet established an application deadline or for which any such deadline has not 

yet occurred as of the date of the enactment 

of this Act, such as institutions that are 

non-stock corporations, S-corporations, mutually-owned insured depository institutions 

(as defined in section 3 of the Federal Deposit Insurance Act), 

shall receive such funding on terms comparable to the terms applicable to institutions that received funding prior to the date 

of the enactment of this Act. 

(c) DEFINITIONS.—For purposes of this section, the terms ‘‘S Corporation’’ and ‘‘C Corporation’’ shall have the same meaning given 

to those terms in section 1361(a) of the Internal Revenue Code of 1986. 

SEC. 106. INCREASE IN SIZE AND AUTHORITY OF 

FINANCIAL STABILITY OVERSIGHT 

BOARD. 

(a) AUTHORITY.—Section 104 of the Emergency Economic Stabilization Act of 2008 (12 

U.S.C. 2514) is amended— 

(1) by redesignating subsections (g) and (h) 

as subsections (h) and (i), respectively; and 

(2) by inserting after subsection (f) the following new subsection: 

‘‘(g) REVIEW AND DECISIONMAKING.—After 

conducting any review under this section of 

a policy determination made by the Secretary, the Financial Stability Oversight 

Board may overturn any such policy determination by a 2⁄3 vote of all members of such 

board.’’. 

(b) APPOINTMENT OF 3 ADDITIONAL MEMBERS.—Section 104(b) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 

2514(b)) is amended— 

(1) by striking ‘‘and’’ at the end of paragraph (4); 

(2) by striking the period at the end of 

paragraph (5) and inserting a semicolon; and 

(3) by adding at the end the following new 

paragraphs: 

‘‘(6) the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation; and 

‘‘(7) 2 members appointed by the President, 

by and with the consent of the Senate, from 

among individuals who are not officers or 

employees of the United States Government.’’. 

SEC. 107. CLARIFICATION. 

Section 101 of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 2514(b)) is 

amended by adding at the end the following 

new subsection: 

‘‘(f) CLARIFICATION.—Any provision of capital to, purchase of equity in, or assistance 

provided to any institution under this title 

shall be considered to be a purchase of troubled assets for purposes of this title.’’. 

TITLE II—FORECLOSURE RELIEF 

SEC. 201. TARP FORECLOSURE MITIGATION PLAN 

AND IMPLEMENTATION. 

(a) PLAN REQUIRED.—Notwithstanding any 

provision of title I of the Emergency Economic Stabilization Act of 2008, none of the 

funds otherwise available to the Secretary of 

the Treasury (in this title referred to as the 

‘‘Secretary’’) pursuant to section 115(a)(3) of 

such Act shall be available to the Secretary 

after March 15, 2009, unless a comprehensive 

plan to prevent and mitigate foreclosures on 

residential properties, in accordance with 

the requirements of this title, has been developed by the Secretary and approved by 

the Financial Stability Oversight Board by 

such date. 

(b) COMMITMENT OF RESOURCES.—The comprehensive plan established pursuant to subsection (a) shall require the commitment of 

funds made available to the Secretary under 

title I of the Emergency Economic Stabilization Act of 2008 in an amount up to 

$100,000,000,000, but in no case less than 

$40,000,000,000. 

(c) IMPLEMENTATION REQUIRED.—The Secretary shall begin committing funds available to the Secretary under title I of the 

Emergency Economic Stabilization Act of 

2008 to implement the comprehensive plan 

established pursuant to subsection (a) by not 

later than April 1, 2009. 

(d) CERTIFICATION.—If by May 1, 2009, the 

Secretary does not commit more than the 

minimum of $40,000,000,000 as required under 

subsection (b), the Secretary shall certify to 

the Congress, no later than May 15, 2009, the 

specific reasons that such additional funds 

have not been committed. 


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SEC. 202. ELEMENTS OF PLAN. 

(a) REQUIRED ELEMENTS.—The comprehensive plan established pursuant to section 

201(a) shall comply with the following requirements: 

(1) OWNER-OCCUPIED RESIDENCES ONLY.—The 

programs implemented under the plan shall 

prevent and mitigate foreclosures specifically on owner-occupied residential properties. 

(2) LEVERAGING OF PRIVATE CAPITAL.—The 

plan shall leverage private capital to the 

maximum extent possible consistent with 

the purpose of preventing and mitigating 

foreclosures on such properties. 

(3) USE OF PROGRAM ALTERNATIVES.—The 

actions to be taken under the plan shall consist of one, or a combination of more than 

one, of the program alternatives set forth in 

section 203. 

(b) CONCENTRATIONS OF FORECLOSURES.— 

The comprehensive plan established pursuant to section 201(a) may include provisions 

designed to prevent and mitigate foreclosures on residential properties located in 

areas that are most seriously affected by 

such foreclosures. 

SEC. 203. PROGRAM ALTERNATIVES. 

The program alternatives set forth in this 

section are as follows: 

(1) SYSTEMATIC LOAN MODIFICATION PROGRAM.—The systematic foreclosure prevention and mortgage modification program 

under section 204. 

(2) REDUCTION OF HOPE FOR HOMEOWNERS

PROGRAM COSTS.—A program under which the 

Secretary— 

(A) provides coverage for fees under the 

HOPE for Homeowners Program under section 257 of the National Housing Act (12 

U.S.C. 1715z–23), as amended by title V of this 

Act; or 

(B) ensures the affordability of interest 

rates of mortgages insured under such Program. 

(3) BUY-DOWN OF SECOND LIEN MORTGAGES.— 

A program under which the Secretary makes 

available to owners of owner-occupied residential properties a direct mortgage loan the 

proceeds of which shall be used only to reduce the outstanding debt of such owner 

under an existing second lien mortgage on 

such residential property, for the purpose of 

facilitating loan modification, subject to 

such reductions in the principal of such existing second lien mortgages as the Secretary may require. 

(4) SERVICER INCENTIVES AND ASSISTANCE.— 

A program under which the Secretary may 

make payments to servicers who implement 

modifications to mortgages that result in 

mortgages that meet such requirements as 

the Secretary shall establish. 

(5) LOAN PURCHASES.—A program under 

which the Secretary, or one or more entities 

that the Secretary, in consultation with the 

Secretary of Housing and Urban Development, enters into a contract with to carry 

out the program under this paragraph, which 

may include the Federal Deposit Insurance 

Corporation and entities selected as contractors under section 107 of the Emergency Economic Stabilization Act of 2008, purchases 

whole loans for the purpose of modifying or 

refinancing the loans. 

SEC. 204. SYSTEMATIC FORECLOSURE PREVENTION AND MORTGAGE MODIFICATION PLAN ESTABLISHED. 

(a) IN GENERAL.—The systematic foreclosure prevention and mortgage modification program under this section shall be a 

program established by the Secretary, in 

consultation with the Chairperson of the 

Board of Directors of the Federal Deposit Insurance Corporation and the Secretary of 

Housing and Urban Development, that— 

(1) provides lenders and loan servicers with 

certain compensation to cover administrative costs for each loan modified according 

to the required standards; and 

(2) provides loss sharing or guarantees for 

certain losses incurred if a modified loan 

should subsequently re-default. 

(b) PROGRAM ADMINISTRATION.—The Secretary, in consultation with the Secretary of 

Housing and Urban Development, may contract with one or more entities, including 

the Federal Deposit Insurance Corporation 

and entities selected as contractors under 

section 107 of the Emergency Economic Stabilization Act of 2008, to conduct the program activities required under the program 

under this section. 

(c) PROGRAM COMPONENTS.—The program 

established under subsection (a) may include 

the following components: 

(1) ELIGIBLE BORROWERS.—The program 

shall be limited to loans secured by owneroccupied properties. 

(2) EXCLUSION FOR EARLY PAYMENT DEFAULT.—To promote sustainable mortgages, 

loss sharing or guarantees shall be available 

only after the borrower has made a specified 

minimum number of payments on the modified mortgage. 

(3) STANDARD NET PRESENT VALUE TEST.—In 

order to promote consistency and simplicity 

in implementation and audit, the Secretary 

shall prescribe a standardized net present 

value analysis for participating lenders and 

servicers comparing the expected net present 

value of modifying past due loans compared 

to the net present value of foreclosing on 

them will be applied. Under this test, standard assumptions shall be used to ensure that 

a consistent standard for affordability is provided based on a ratio of the borrower’s 

mortgage-related expenses for the first priority mortgage-to-gross income specified by 

the Secretary. 

(4) SYSTEMATIC LOAN REVIEW BY PARTICIPATING LENDERS AND SERVICERS.—Participating lenders and servicers shall be required 

to undertake a systematic review of all of 

the loans under their management, to subject each loan to a standard net present 

value test to determine whether it is a suitable candidate for modification, and to offer 

modifications for all loans that pass this 

test. The penalty for failing to undertake 

such a systematic review and to carry out 

modifications where they are justified would 

be disqualification from further participation in the program until such a systematic 

program was introduced. 

(5) MODIFICATIONS.—Modifications may include any of the following: 

(A) Reduction in interest rates and fees. 

(B) Term or amortization extensions. 

(C) Forbearance or forgiveness of principal. 

(D) Other similar modifications. 

(6) SIMPLIFIED LOSS SHARE CALCULATION.— 

In order to ensure the administrative efficiency and effective operation of the program, the Secretary shall define appropriate 

measures for loss sharing or guarantees designed to reduce the risk and loss upon redefault of modified mortgages in order to 

provide adequate incentives to lenders, 

servicers, and investors to modify eligible 

mortgages and avoid unnecessary foreclosures. Interim modifications shall be allowed. 

(7) DE MINIMIS TEST.—To lower administrative costs, a de minimis test shall be used to 

exclude from loss sharing any modification 

that does not lower the monthly payment at 

least 10 percent. 

(8) 8 YEAR LIMIT ON LOSS SHARING PAYMENT.—The loss sharing guarantee shall terminate at the end of the 8-year period beginning on the date the modification was consummated. 

(d) ALTERNATIVE COMPONENTS.—The Secretary may, with the approval of the Board, 

implement foreclosure prevention and mitigation actions other than those included 

pursuant to subsection (c) in the comprehensive plan initially approved by the Board 

pursuant to section 201(a) that the Secretary 

believes would provide equivalent or greater 

impact on foreclosure mitigation. 

(e) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary 

to implement this section and prevent evasions thereof. 

(f) TROUBLED ASSETS.—The costs incurred 

by the Federal Government in carrying out 

the loan modification program established 

under this section shall be covered out of the 

funds made available to the Secretary of the 

Treasury under section 118 of the Emergency 

Economic Stabilization Act of 2008 or such 

other funds as may be available to the Secretary. 

(g) REPORT.—Before the end of the 6-month 

period beginning on the date of the enactment of this Act, the Secretary shall submit 

a progress report to the Congress containing 

such findings and such recommendations for 

legislative or administrative action as the 

Secretary may determine to be appropriate. 

SEC. 204. MODIFICATION OF PLAN. 

(a) IN GENERAL.—If the Secretary, in consultation with the Chairperson of the Board 

of Directors of the Federal Deposit Insurance 

Corporation and the Secretary of Housing 

and Urban Development, determines at any 

time that modification of the comprehensive 

plan initially approved by the Board pursuant to section 201(a) (as such plan may subsequently have been modified pursuant to this 

section), or that modification of any component program element, is necessary to maximize the prevention of foreclosures on residential properties or minimize costs to taxpayers of such foreclosure mitigation, the 

Secretary may modify the plan or program 

element, but only to the extent such modifications are approved by the Board. 

SEC. 205. SERVICER SAFE HARBOR. 

(a) SAFE HARBOR.— 

(1) LOAN MODIFICATIONS AND WORKOUT

PLANS.—Notwithstanding any other provision of law, and notwithstanding any investment contract between a servicer and a 

securitization vehicle or investor, a servicer 

that acts consistent with the duty set forth 

in section 129A(a) of Truth in Lending Act 

(15 U.S.C. 1639a) shall not be liable for entering into a loan modification or workout plan 

with respect to any such mortgage that 

meets all of the criteria set forth in paragraph (2)(B) to— 

(A) any person, based on that person’s ownership of a residential mortgage loan or any 

interest in a pool of residential mortgage 

loans or in securities that distribute payments out of the principal, interest and 

other payments in loans on the pool; 

(B) any person who is obligated to make 

payments determined in reference to any 

loan or any interest referred to in subparagraph (A); or 

(C) any person that insures any loan or any 

interest referred to in subparagraph (A) 

under any law or regulation of the United 

States or any law or regulation of any State 

or political subdivision of any State. 

(2) ABILITY TO MODIFY MORTGAGES.— 

(A) ABILITY.—Notwithstanding any other 

provision of law, and notwithstanding any 

investment contract between a servicer and 

a securitization vehicle or investor, a 

servicer— 

(i) shall not be limited in the ability to 

modify mortgages, the number of mortgages 

that can be modified, the frequency of loan 

modifications, or the range of permissible 

modifications; and 

(ii) shall not be obligated to repurchase 

loans from or otherwise make payments to 

the securitization vehicle on account of a 


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modification, workout, or other loss mitigation plan for a residential mortgage or a 

class of residential mortgages that constitute a part or all of the mortgages in the 

securitization vehicle, 

if any mortgage so modified meets all of the 

criteria set forth in subparagraph (B). 

(B) CRITERIA.—The criteria under this subparagraph with respect to a mortgage are as 

follows: 

(i) Default on the payment of such mortgage has occurred or is reasonably foreseeable. 

(ii) The property securing such mortgage is 

occupied by the mortgagor of such mortgage. 

(iii) The servicer reasonably and in good 

faith believes that the anticipated recovery 

on the principal outstanding obligation of 

the mortgage under the particular modification or workout plan or other loss mitigation action will exceed, on a net present 

value basis, the anticipated recovery on the 

principal outstanding obligation of the mortgage to be realized through foreclosure. 

(3) APPLICABILITY.—This subsection shall 

apply only with respect to modifications, 

workouts, and other loss mitigation plans 

initiated before January 1, 2012. 

(b) LEGAL COSTS.—If an unsuccessful action is brought against a servicer by any person described in subparagraph (A), (B), or (C) 

of subsection (a)(1), such person shall bear 

any actual legal costs of the servicer, including reasonable attorney fees and expert witness fees, incurred in good faith in such action, as determined by the court. 

(c) REPORTING.—Each servicer that engages 

in loan modifications or workout plans subject to the safe harbor in subsection (a) shall 

report to the Secretary on a regular basis regarding the extent, scope and results of the 

servicer’s modification activities. The Secretary shall prescribe regulations specifying 

the form, content, and timing of such reports. 

(d) DEFINITION OF SECURITIZATION VEHICLES.—For purposes of this section, the term 

‘‘securitization vehicle’’ means a trust, corporation, partnership, limited liability entity, special purpose entity, or other structure 

that— 

(1) is the issuer, or is created by the issuer, 

of mortgage pass-through certificates, participation certificates, mortgage-backed securities, or other similar securities backed 

by a pool of assets that includes residential 

mortgage loans; and 

(2) holds such mortgages. 

SEC. 206. REPORT BY CONGRESSIONAL OVERSIGHT PANEL. 

The Congressional Oversight Panel established by section 125 of the Emergency Economic Stabilization Act of 2008 shall submit 

a report to the Congress, not later than July 

1, 2009, regarding— 

(1) the actions taken by the Secretary pursuant to this title; 

(2) the impact and effectiveness of such actions on foreclosures on residential properties; and 

(3) the effectiveness of such actions from 

the standpoint of minimizing costs to the 

taxpayers. 

TITLE III—AUTO INDUSTRY FINANCING 

AND RESTRUCTURING 

SEC. 301. SHORT TITLE. 

This title may be cited as the ‘‘TARP Reform and Accountability Act of 2009’’. 

SEC. 302. DIRECT LOAN PROVISIONS. 

(a) IN GENERAL.—The Emergency Economic Stabilization Act of 2008 (division A of 

Public Law 110–343) is amended by adding at 

the end the following: 

‘‘TITLE IV—AUTO INDUSTRY FINANCING 

AND RESTRUCTURING 

‘‘SEC. 401. PURPOSES. 

‘‘The purposes of this title are— 

‘‘(1) to clarify and confirm the authority 

and facilities to restore liquidity and stability to domestic vehicle manufacturers in 

the United States; and 

‘‘(2) to ensure that such authority and such 

facilities are used in a manner that— 

‘‘(A) results in a viable and competitive domestic automobile industry that minimizes 

adverse effects on the environment; 

‘‘(B) enhances the ability and the capacity 

of the domestic automobile industry to pursue the timely and aggressive production of 

energy-efficient advanced technology vehicles; 

‘‘(C) preserves and promotes the jobs of 

American workers employed directly by the 

domestic automobile industry and in related 

industries; 

‘‘(D) safeguards the ability of the domestic 

automobile industry to provide retirement 

and health care benefits for the industry’s 

retirees and their dependents; and 

‘‘(E) stimulates manufacturing and sales of 

automobiles produced by automobile manufacturers in the United States. 

‘‘SEC. 402. PRESIDENTIAL DESIGNATION. 

‘‘(a) DESIGNATION.—The President shall 

designate one or more officers from the Executive Branch having appropriate expertise 

in such areas as economic stabilization, financial aid to commerce and industry, financial restructuring, energy efficiency, and environmental protection (who shall hereinafter in this title be collectively referred to 

as the ‘President’s designee’) to carry out 

the purposes of this title, including the facilitation of restructuring necessary to 

achieve the long-term financial viability of 

domestic automobile manufacturers, who 

shall serve at the pleasure of the President. 

‘‘(b) ADDITIONAL PERSONS.—The President 

or the President’s designee may also employ, 

appoint, or contract with additional persons 

having such expertise as the President or the 

President’s designee believes will assist the 

Government in carrying out the purposes of 

this title. 

‘‘(c) PARTICIPATION BY OTHER AGENCY PERSONNEL.—Other Federal agencies may provide, at the request of the President’s designee, staff on detail from such agencies for 

purposes of carrying out this title. 

‘‘SEC. 403. BRIDGE FINANCING. 

‘‘(a) IN GENERAL.—The President’s designee 

shall authorize and direct the disbursement 

of bridge loans or enter into commitments 

for lines of credit to each automobile manufacturer that submitted a plan to the Congress on December 2, 2008 (hereafter in this 

title referred to as an ‘eligible automobile 

manufacturer’), and has submitted a request 

for such loan or commitment. Nothing in 

this section shall preclude the President’s 

designee from authorizing and directing the 

disbursement of bridge loans or entering into 

commitments for lines of credit to other entities. 

‘‘(b) AMOUNT OF ASSISTANCE.—The President’s designee shall authorize bridge loans 

or commitments for lines of credit to each 

eligible automobile manufacturer in an 

amount that is intended to facilitate the 

continued operations of the eligible automobile manufacturer and to prevent the failure of the eligible automobile manufacturer, 

consistent with the plan submitted on December 2, 2008, and subject to available 

funds. 

‘‘SEC. 404. RESTRUCTURING PROGRESS ASSESSMENT. 

‘‘(a) ESTABLISHMENT OF MEASURES FOR ASSESSING PROGRESS.—Not later than February 

1, 2009, the President’s designee shall determine appropriate measures for assessing the 

progress of each eligible automobile manufacturer toward transforming the plan submitted by such manufacturer to the Congress on December 2, 2008, into the restructuring plan to be submitted under section 

405(b). 

‘‘(b) EVALUATION OF PROGRESS ON BASIS OF

RESTRUCTURING PROGRESS ASSESSMENT

MEASURES.— 

‘‘(1) IN GENERAL.—The President’s designee 

shall evaluate the progress of each eligible 

automobile manufacturer toward the development of a restructuring plan, on the basis 

of the restructuring progress assessment 

measures established under this section for 

such manufacturer. 

‘‘(2) TIMING.—Each evaluation required 

under paragraph (1) for any eligible automobile manufacturer shall be conducted at 

the end of the 15-day period beginning on the 

date on which the restructuring progress assessment measures were established by the 

President’s designee for such eligible automobile manufacturer. 

‘‘SEC. 405. SUBMISSION OF PLANS. 

‘‘(a) NEGOTIATED PLANS.— 

‘‘(1) FACILITATION.— 

‘‘(A) IN GENERAL.—Beginning on the date of 

any disbursement under the facility, the 

President’s designee shall seek to facilitate 

agreement on any restructuring plan to 

achieve and sustain the long-term viability, 

international competitiveness, and energy 

efficiency of an eligible automobile manufacturer, negotiated and agreed to by representatives of interested parties (in this title referred to as a ‘negotiated plan’) with respect 

to any eligible automobile manufacturer. 

‘‘(B) INTERESTED PARTIES.—For purposes of 

this section, the term ‘interested party’ shall 

be construed broadly so as to include all persons who have a direct financial interest in 

a particular automobile manufacturer, including— 

‘‘(i) employees and retirees of the eligible 

automobile manufacturer; 

‘‘(ii) trade unions; 

‘‘(iii) creditors; 

‘‘(iv) suppliers; 

‘‘(v) automobile dealers; and 

‘‘(vi) shareholders. 

‘‘(2) ACTIONS OF THE PRESIDENT’S DESIGNEE.— 

‘‘(A) IN GENERAL.—For the purpose of 

achieving a negotiated plan, the President’s 

designee may convene, chair, and conduct 

formal and informal meetings, discussions, 

and consultations, as appropriate, with interested parties of an eligible automobile 

manufacturer. 

‘‘(B) CLARIFICATION.—The Federal Advisory 

Committee Act shall not apply with respect 

to any of the activities conducted or taken 

by the President’s designee pursuant to this 

title. 

‘‘(b) RESTRUCTURING PLAN.—Not later than 

March 31, 2009, each eligible automobile 

manufacturer shall submit to the President’s 

designee a restructuring plan to achieve and 

sustain the long-term viability, international competitiveness, and energy efficiency of the eligible automobile manufacturer (in this title referred to as the ‘restructuring plan’) in accordance with this section. 

The President’s designee shall approve the 

restructuring plan if the President’s designee 

determines that the plan will result in— 

‘‘(1) the repayment of all Government-provided financing, consistent with the terms 

specified in section 408, or otherwise agreed 

to; 

‘‘(2) the ability— 

‘‘(A) to comply with applicable fuel efficiency and emissions requirements; 

‘‘(B) to commence domestic manufacturing 

of advanced technology vehicles, as described in section 136 of the Energy Independence and Security Act of 2007 (Public 

Law 110–140; 42 U.S.C. 17013); and 

‘‘(C) to produce new and existing products 

and capacity; 


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‘‘(3) the achievement of a positive net 

present value, using reasonable assumptions 

and taking into account all existing and projected future costs, including repayment of 

any financial assistance provided pursuant 

to this title; 

‘‘(4) the ability to rationalize costs, capitalization, and capacity with respect to the 

manufacturing workforce, suppliers, and 

dealerships of the eligible automobile manufacturer; 

‘‘(5) proposals to restructure existing debt, 

including, where appropriate, the conversion 

of debt to equity, to improve the ability of 

the eligible automobile manufacturer to 

raise private capital; and 

‘‘(6) a product mix and cost structure that 

is competitive in the marketplace. 

‘‘(c) EXTENSION OF NEGOTIATIONS AND PLAN

DEADLINE.—Notwithstanding the time limitations in subsection (b), the President’s designee, upon making a determination that the 

interested parties are negotiating in good 

faith, are making significant progress, and 

that an additional period of time would likely facilitate agreement on a negotiated plan, 

and upon notification of the Congress, may 

extend for not longer than 30 additional days 

the negotiation period under subsection (b). 

‘‘SEC. 406. FINANCING FOR RESTRUCTURING. 

‘‘Upon approval by the President’s designee of a restructuring plan, the President’s 

designee may provide financial assistance to 

an eligible automobile manufacturer to implement the restructuring plan. 

‘‘SEC. 407. DISAPPROVAL AND CALL OF LOAN. 

‘‘If the President’s designee has not approved the restructuring plan at the expiration of the period provided in section 405 for 

submission and approval of the restructuring 

plan, the President’s designee shall call the 

loan or cancel the commitment within 30 

days, unless a restructuring plan is approved 

within that period. 

‘‘SEC. 408. TERMS AND CONDITIONS. 

‘‘(a) DURATION.—The duration of any loan 

made under this title shall be 7 years, or 

such period as the President’s designee may 

determine with respect to such loan. 

‘‘(b) NO PREPAYMENT PENALTY.—A loan 

made under this title shall be prepayable 

without penalty at any time. 

‘‘(c) INFORMATION ACCESS.—As a condition 

for the receipt of any financial assistance 

made under this title, an eligible automobile 

manufacturer shall agree— 

‘‘(1) to allow the President’s designee to 

examine any books, papers, records, or other 

data of the eligible automobile manufacturer, and those of any subsidiary, affiliate, 

or entity holding an ownership interest of 50 

percent or more of such automobile manufacturer, that may be relevant to the financial assistance, including compliance with 

the terms of a loan or any conditions imposed under this title; and 

‘‘(2) to provide in a timely manner any information requested by the President’s designee, including requiring any officer or employee of the eligible automobile manufacturer, any subsidiary, affiliate, or entity referred to in paragraph (1) with respect to 

such manufacturer, or any person having 

possession, custody, or care of the reports 

and records required under paragraph (1), to 

appear before the President’s designee at a 

time and place requested and to provide such 

books, papers, records, or other data, as requested, as may be relevant or material. 

‘‘(d) OVERSIGHT OF TRANSACTIONS AND FINANCIAL CONDITION.— 

‘‘(1) DUTY TO INFORM.—During the period in 

which any loan extended under this title remains outstanding, the eligible automobile 

manufacturer which received such loan shall 

promptly inform the President’s designee 

of— 

‘‘(A) any asset sale, investment, contract, 

commitment, or other transaction proposed 

to be entered into by such eligible automobile manufacturer that has a value in excess of $100,000,000; and 

‘‘(B) any other material change in the financial condition of such eligible automobile 

manufacturer. 

‘‘(2) AUTHORITY OF THE PRESIDENT’S DESIGNEE.—During the period in which any loan 

extended under this title remains outstanding, the President’s designee may— 

‘‘(A) review any asset sale, investment, 

contract, commitment, or other transaction 

described in paragraph (1); and 

‘‘(B) prohibit the eligible automobile manufacturer which received the loan from consummating any such proposed sale, investment, contract, commitment, or other transaction, if the President’s designee determines that consummation of such transaction would be inconsistent with or detrimental to the long-term viability of the eligible automobile manufacturer. 

‘‘(3) PROCEDURES.—The President’s designee may establish procedures for conducting any review under this subsection. 

‘‘(e) CONSEQUENCES FOR FAILURE TO COMPLY.—The terms of any financial assistance 

made under this title shall provide that if— 

‘‘(1) an evaluation by the President’s designee under section 404(b) demonstrates that 

the eligible automobile manufacturer which 

received the financial assistance has failed 

to make adequate progress towards meeting 

the restructuring progress assessment measures established by the President’s designee 

under section 404(a) with respect to such recipient; 

‘‘(2) after March 31, 2009, the eligible automobile manufacturer which received the financial assistance fails to submit an acceptable restructuring plan under section 405(b), 

or fails to comply with any conditions or requirement applicable under this title or applicable fuel efficiency and emissions requirements; or 

‘‘(3) after a restructuring plan of an eligible automobile manufacturer has been approved by the President’s designee, the auto 

manufacturer fails to make adequate 

progress in the implementation of the plan, 

as determined by the President’s designee, 

the repayment of any loan may be accelerated to such earlier date or dates as the 

President’s designee may determine and any 

other financial assistance may be cancelled 

by the President’s designee. 

‘‘SEC. 409. TAXPAYER PROTECTION. 

‘‘(a) WARRANTS.— 

‘‘(1) IN GENERAL.—The President’s designee 

may not provide any loan under this title, 

unless the President’s designee, or such department or agency as is designated for such 

purpose by the President, receives from the 

eligible automobile manufacturer— 

‘‘(A) in the case of an eligible automobile 

manufacturer, the securities of which are 

traded on a national securities exchange, a 

warrant giving the right to the President’s 

designee to receive nonvoting common stock 

or preferred stock in such eligible automobile manufacturer, or voting stock, with 

respect to which the President’s designee 

agrees not to exercise voting power, whichever the President’s designee determines appropriate; or 

‘‘(B) in the case of an eligible automobile 

manufacturer other than one described in 

subparagraph (A), a warrant for common or 

preferred stock, or an instrument that is the 

economic equivalent (as determined by the 

President’s designee) of such a warrant in 

the holding company of the eligible automobile manufacturer, or any company that 

controls a majority stake in the eligible 

automobile manufacturer, whichever the 

President’s designee determines appropriate. 

‘‘(2) AMOUNT.— 

‘‘(A) IN GENERAL.—The warrants or instruments described in paragraph (1) shall have a 

value equal to 20 percent of the aggregate 

amount of all loans provided to the eligible 

automobile manufacturer under this title. 

Such warrants or instruments shall entitle 

the Government to purchase— 

‘‘(i) nonvoting common stock, up to a maximum amount of 20 percent of the issued and 

outstanding common stock of— 

‘‘(I) the eligible automobile manufacturer; 

or 

‘‘(II) in the case of an eligible automobile 

manufacturer, the securities of which are 

not traded on a national securities exchange, 

a holding company or company that controls 

a majority of the stock thereof (in this section referred to as the ‘warrant common’); 

and 

‘‘(ii) preferred stock having an aggregate 

liquidation preference equal to 20 percent of 

such aggregate loan amount, less the value 

of common stock available for purchase 

under the warrant common (in this section 

referred to as the ‘warrant preferred’). 

‘‘(B) COMMON STOCK WARRANT PRICE.—The 

exercise price on a warrant or instrument described in paragraph (1) shall be— 

‘‘(i) the 15-day trailing average, as of the 

day before the date on which any commitment to provide a loan was entered into, of 

the market price of the common stock of the 

eligible automobile manufacturer which received any loan under this title; or 

‘‘(ii) in the case of an eligible automobile 

manufacturer, the securities of which are 

not traded on a national securities exchange, 

the economic equivalent of the market price 

described in clause (i), as determined by the 

President’s designee. 

‘‘(C) TERMS OF PREFERRED STOCK WARRANT.— 

‘‘(i) IN GENERAL.—The initial exercise price 

for the preferred stock warrant shall be $0.01 

per share or such greater amount as the corporate charter may require as the par value 

per share of the warrant preferred. The Government shall have the right to immediately 

exercise the warrants. 

‘‘(ii) REDEMPTION.—The warrant preferred 

may be redeemed at any time after exercise 

of the preferred stock warrant at 100 percent 

of its issue price, plus any accrued and unpaid dividends. 

‘‘(iii) OTHER TERMS AND CONDITIONS.—Other 

terms and conditions of the warrant preferred shall be determined by the President’s 

designee to protect the interests of taxpayers. 

‘‘(3) APPLICATION OF OTHER PROVISIONS OF

LAW.—Except as otherwise provided in this 

section, the requirements for the purchase of 

warrants under section 113(d)(2) of the Emergency Economic Stabilization Act of 2008 (division A of Public Law 110–343) shall apply to 

any warrant or instrument described in paragraph (1), including the antidilution protection provisions therein. 

‘‘(b) EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.— 

‘‘(1) IN GENERAL.—During the period in 

which any financial assistance under this 

title remains outstanding, the eligible automobile manufacturer which received such assistance shall be subject to— 

‘‘(A) the standards established by the 

President’s designee under paragraph (2); and 

‘‘(B) the provisions of section 162(m)(5) of 

the Internal Revenue Code of 1986, as applicable. 

‘‘(2) STANDARDS REQUIRED.—The President’s designee shall require any eligible 

automobile manufacturer which received 

any financial assistance under this title to 

meet appropriate standards for executive 

compensation and corporate governance. 


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‘‘(3) SPECIFIC REQUIREMENTS.—The standards established under paragraph (2) shall include— 

‘‘(A) limits on compensation that exclude 

incentives for senior executive officers of an 

eligible automobile manufacturer which received assistance under this title to take unnecessary and excessive risks that threaten 

the value of such manufacturer during the 

period that the loan is outstanding; 

‘‘(B) a provision for the recovery by such 

automobile manufacturer of any bonus or incentive compensation paid to a senior executive officer based on statements of earnings, 

gains, or other criteria that are later found 

to be materially inaccurate; 

‘‘(C) a prohibition on such automobile 

manufacturer making any golden parachute 

payment to a senior executive officer during 

the period that the loan is outstanding; 

‘‘(D) a prohibition on such automobile 

manufacturer paying or accruing any bonus 

or incentive compensation during the period 

that the loan is outstanding to the 25 most 

highly-compensated employees; and 

‘‘(E) a prohibition on any compensation 

plan that would encourage manipulation of 

such automobile manufacturer’s reported 

earnings to enhance the compensation of any 

of its employees. 

‘‘(4) DIVESTITURE.—During the period in 

which any financial assistance provided 

under this title to any eligible automobile 

manufacturer is outstanding, the eligible 

automobile manufacturer may not own or 

lease any private passenger aircraft, or have 

any interest in such aircraft, except that 

such eligible automobile manufacturer shall 

not be treated as being in violation of this 

provision with respect to any aircraft or interest in any aircraft that was owned or held 

by the manufacturer immediately before receiving such assistance, as long as the recipient demonstrates to the satisfaction of the 

President’s designee that all reasonable 

steps are being taken to sell or divest such 

aircraft or interest. 

‘‘(5) DEFINITIONS.—For purposes of this subsection, the following definitions shall apply: 

‘‘(A) SENIOR EXECUTIVE OFFICER.—The term 

‘senior executive officer’ means an individual who is one of the top five most highly 

paid executives of a public company, whose 

compensation is required to be disclosed pursuant to the Securities Exchange Act of 1934, 

and any regulations issued thereunder, and 

non-public company counterparts. 

‘‘(B) GOLDEN PARACHUTE PAYMENT.—The 

term ‘golden parachute payment’ means any 

payment to a senior executive officer for departure from a company for any reason, except for payments for services performed or 

benefits accrued. 

‘‘(c) PROHIBITION ON PAYMENT OF DIVIDENDS.—Except with respect to obligations 

owed pursuant to law to any nonaffiliated 

party or any existing contract with any nonaffiliated party in effect as of December 2, 

2008, no dividends or distributions of any 

kind, or the economic equivalent thereof (as 

determined by the President’s designee), 

may be paid by any eligible automobile manufacturer which receives financial assistance 

under this title, or any holding company or 

company that controls a majority stake in 

the eligible automobile manufacturer, while 

such financial assistance is outstanding. 

‘‘(d) OTHER INTERESTS SUBORDINATED.— 

‘‘(1) IN GENERAL.—In the case of an eligible 

automobile manufacturer which received a 

loan under this title, to the extent permitted 

by the terms of any obligation, liability, or 

debt of the eligible automobile manufacturer 

in effect as of December 2, 2008, any other obligation of such eligible automobile manufacturer shall be subordinate to such loan, 

and such loan shall be senior and prior to all 

obligations, liabilities, and debts of the eligible automobile manufacturer, and such eligible automobile manufacturer shall provide 

to the Government, all available security 

and collateral against which the loans under 

this title shall be secured. 

‘‘(2) APPLICABILITY IN CERTAIN CASES.—In 

the case of an eligible automobile manufacturer referred to in paragraph (1), the securities of which are not traded on a national securities exchange, a loan under this title to 

the eligible automobile manufacturer shall— 

‘‘(A) be treated as a loan to any holding 

company of, or company that controls a majority stake in, the eligible automobile manufacturer; and 

‘‘(B) be senior and prior to all obligations, 

liabilities, and debts of any such holding 

company or company that controls a majority stake in the eligible automobile manufacturer. 

‘‘(e) ADDITIONAL TAXPAYER PROTECTIONS.— 

‘‘(1) DISCHARGE.—A discharge under title 

11, United States Code, shall not discharge 

an eligible automobile manufacturer, or any 

successor in interest thereto, from any debt 

for financial assistance received pursuant to 

this title. 

‘‘(2) EXEMPTION.—Any financial assistance 

provided to an eligible automobile manufacturer under this title shall be exempt from 

the automatic stay established by section 362 

of title 11, United States Code. 

‘‘(3) INTERESTED PARTIES.—Notwithstanding any provision of title 11, United 

States Code, any interest in property or equity rights of the United States arising from 

financial assistance provided to an eligible 

automobile manufacturer under this title 

shall remain unaffected by any plan of reorganization, except as the United States may 

agree to in writing. 

‘‘SEC. 410. OVERSIGHT AND AUDITS. 

‘‘(a) COMPTROLLER GENERAL OVERSIGHT.— 

‘‘(1) SCOPE OF OVERSIGHT.—The Comptroller 

General of the United States shall conduct 

ongoing oversight of the activities and performance of the President’s designee. 

‘‘(2) CONDUCT AND ADMINISTRATION OF OVERSIGHT.— 

‘‘(A) GAO PRESENCE.—The President’s designee shall provide to the Comptroller General appropriate space and facilities for purposes of this subsection. 

‘‘(B) ACCESS TO RECORDS.—To the extent 

otherwise consistent with law, the Comptroller General shall have access, upon request, to any information, data, schedules, 

books, accounts, financial records, reports, 

files, electronic communications, or other 

papers, things, or property belonging to or in 

use by the President’s designee, at such reasonable time as the Comptroller General 

may request. The Comptroller General shall 

be afforded full facilities for verifying transactions with the balances or securities held 

by depositaries, fiscal agents, and 

custodians. The Comptroller General may 

make and retain copies of such books, accounts, and other records as the Comptroller 

General deems appropriate. 

‘‘(3) REPORTING.—The Comptroller General 

shall submit reports of findings under this 

section to Congress, regularly and not less 

frequently than once every 60 days. The 

Comptroller General may also submit special 

reports under this subsection, as warranted 

by the findings of its oversight activities. 

‘‘(b) SPECIAL INSPECTOR GENERAL.—It shall 

be the duty of the Special Inspector General 

established under section 121 of Public Law 

110–343 to conduct, supervise, and coordinate 

audits and investigations of the President’s 

designee in addition to the duties of the Special Inspector General under such section 

and for such purposes. The Special Inspector 

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

including section 6 of such Act. In the event 

that the Office of the Special Inspector General is terminated, the Inspector General of 

the Department of the Treasury shall assume the responsibilities of the Special Inspector General under this subsection. 

‘‘(c) ACCESS TO RECORDS OF BORROWERS BY

GAO.—Notwithstanding any other provision 

of law, during the period in which any financial assistance provided under this title is 

outstanding, the Comptroller General of the 

United States shall have access, upon request, to any information, data, schedules, 

books, accounts, financial records, reports, 

files, electronic communications, or other 

papers, things, or property belonging to or in 

use by the eligible automobile manufacturer, 

and any subsidiary, affiliate, or entity holding an ownership interest of 50 percent or 

more of such eligible automobile manufacturer (collectively referred to in this section 

as ‘related entities’), and to any officer, director, or other agent or representative of 

the eligible automobile manufacturer and its 

related entities, at such reasonable times as 

the Comptroller General may request. The 

Comptroller General may make and retain 

copies of such books, accounts, and other 

records as the Comptroller General deems 

appropriate. 

‘‘SEC. 411. REPORTING AND MONITORING. 

‘‘(a) REPORTING ON CONSUMMATION OF

LOANS.—The President’s designee shall submit a report to the Congress on each bridge 

loan made under this title not later than 5 

days after the date of the consummation of 

such loan. 

‘‘(b) REPORTING ON RESTRUCTURING

PROGRESS ASSESSMENT MEASURES.—The 

President’s designee shall submit a report to 

the Congress on the restructuring progress 

assessment measures established for each 

manufacturer under section 404(a) not later 

than 10 days after establishing the restructuring progress assessment measures. 

‘‘(c) REPORTING ON EVALUATIONS.—The 

President’s designee shall submit a report to 

the Congress containing the detailed findings and conclusions of the President’s designee in connection with the evaluation of 

an eligible automobile manufacturer under 

section 404(b). 

‘‘(d) REPORTING ON CONSEQUENCES FOR

FAILURE TO COMPLY.—The President’s designee shall submit a report to the Congress 

on the exercise of a right under section 408(e) 

to accelerate indebtedness of an eligible 

automobile manufacturer under this title or 

to cancel any other financial assistance provided to such eligible automobile manufacturer, and the facts and circumstances on 

which such exercise was based, before the 

end of the 10-day period beginning on the 

date of the exercise of the right. 

‘‘(e) MONITORING.—The President’s designee shall monitor the use of loan funds received by eligible automobile manufacturers 

under this title, and shall report to Congress 

once every 90 days (beginning 30 days after 

the date of enactment of this title) on the 

progress of the ability of the recipient of the 

loan to continue operations and proceed with 

restructuring processes that restore the financial viability of the recipient and promote environmental sustainability. 

‘‘SEC. 412. REPORT TO CONGRESS ON LACK OF 

PROGRESS TOWARD ACHIEVING AN 

ACCEPTABLE NEGOTIATED PLAN. 

‘‘(a) AUTHORITY TO FACILITATE A NEGOTIATED PLAN.—At any such time as the 

President’s designee determines that action 

is necessary to avoid disruption to the economy or to achieve a negotiated plan, the 

President’s designee shall submit to Congress a report outlining any additional powers and authorities necessary to facilitate 


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the completion of a negotiated plan required 

under section 405. 

‘‘(b) IMPEDIMENTS TO ACHIEVING NEGOTIATED PLANS.—If the President’s designee 

determines, on the basis of an evaluation by 

the President’s designee of the progress 

being made by an eligible automobile manufacturer toward meeting the restructuring 

progress assessment measures established 

under section 404, that adequate progress is 

not being made toward achieving a negotiated plan by March 31, 2009, the President’s 

designee shall submit to Congress a report 

detailing the impediments to achievement of 

a negotiated plan by the eligible automobile 

manufacturer. 

‘‘SEC. 413. SUBMISSION OF PLAN TO CONGRESS 

BY THE PRESIDENT’S DESIGNEE. 

‘‘Upon submission of a report pursuant to 

section 412(b), the President’s designee shall 

provide to Congress a plan that represents 

the judgement of the President’s designee as 

to the steps necessary to achieve the longterm viability, international competitiveness, and energy efficiency of the eligible 

automobile manufacturer, consistent with 

the factors set forth in section 405(b), including through a negotiated plan, a plan to be 

implemented by legislation, or a reorganization pursuant to chapter 11 of title 11, United 

States Code. 

‘‘SEC. 414. COORDINATION WITH OTHER LAWS. 

‘‘(a) IN GENERAL.—No provision of this title 

may be construed as altering, affecting, or 

superseding— 

‘‘(1) the provisions of section 129 of division 

A of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 

2009, relating to funding for the manufacture 

of advanced technology vehicles; 

‘‘(2) any existing authority to provide financial assistance or liquidity for purposes 

of the day-to-day operations in the ordinary 

course of business or research and development. 

‘‘(b) ANTITRUST PROVISIONS.— 

‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

and (4), the antitrust laws shall not apply to 

meetings, discussions, or consultations 

among an eligible automobile manufacturer 

and its interested parties for the purpose of 

achieving a negotiated plan pursuant to section 405(a)(2). 

‘‘(2) EXCLUSIONS.—Paragraph (1) shall not 

apply with respect to price-fixing, allocating 

a market between competitors, monopolizing 

(or attempting to monopolize) a market, or 

boycotting. 

‘‘(3) ANTITRUST AGENCY PARTICIPATION.— 

The Attorney General of the United States 

and the Federal Trade Commission shall, to 

the extent practicable, receive reasonable 

advance notice of, and be permitted to participate in, each meeting, discussion, or consultation described in paragraph (1). 

‘‘(4) PRESERVATION OF ENFORCEMENT AUTHORITY.—Paragraph (1) shall not be construed to preclude the Attorney General of 

the United States or the Federal Trade Commission from bringing an enforcement action 

under the antitrust laws for injunctive relief. 

‘‘(5) SUNSET.—Paragraph (1) shall apply 

only with respect to meetings, discussions, 

or consultations that occur within the 3-year 

period beginning on the date of the enactment of this title. 

‘‘(6) DEFINITION.—For purposes of this subsection, the term ‘antitrust laws’— 

‘‘(A) has the same meaning as in subsection (a) of the first section of the Clayton 

Act (15 U.S.C. 12(a)), except that such term 

includes section 5 of the Federal Trade Commission Act (15 U.S.C. 45), to the extent that 

such section 5 applies to unfair methods of 

competition; and 

‘‘(B) includes any provision of State law 

that is similar to the laws referred to in subparagraph (A). 

‘‘SEC. 415. TREATMENT OF RESTRUCTURING FOR 

PURPOSES OF APPLYING LIMITATIONS ON NET OPERATING LOSS 

CARRYFORWARDS AND CERTAIN 

BUILT-IN LOSSES. 

‘‘Section 382 of the Internal Revenue Code 

of 1986 shall not apply in the case of an ownership change resulting from this title or 

pursuant to a restructuring plan approved 

under this title. 

‘‘SEC. 416. CLARIFICATION OF AVAILABILITY OF 

FINANCIAL SUPPORT FOR FINANCING ARMS. 

‘‘The authority of the President’s designee 

to provide assistance to any eligible automobile manufacturer includes the authority 

to provide support to finance company affiliates of the manufacturer to ensure that such 

affiliates have the necessary resources to 

continue to provide needed credit, including 

through dealer and other financing of consumer and business auto and other vehicle 

loans and dealer floor plan loans.’’. 

TITLE IV—CLARIFICATION OF AUTHORITY 

SEC. 401. CONSUMER LOANS. 

Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.) 

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

‘‘SEC. 137. CLARIFICATION OF AUTHORITY REGARDING CONSUMER LOANS. 

‘‘The authority of the Secretary to take 

any action under this title includes the authority to establish or support facilities to 

support the availability of consumer loans, 

including loans for autos and other vehicles 

and student loans, including through purchase of asset-backed securities, directly or 

through the Board or any Federal reserve 

bank.’’. 

SEC. 402. MUNICIPAL SECURITIES. 

Section 103 of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5211) is 

amended by inserting after subsection (f) (as 

added by section 401 of this title) the following new subsection: 

‘‘(g) CLARIFICATION OF AUTHORITY REGARDING MUNICIPAL SECURITIES.— 

‘‘(1) CLARIFICATION.—The authority of the 

Secretary to take any action under this title 

includes the authority to provide support to 

State and local governments, and other 

issuers of municipal securities, which are 

having difficulty accessing appropriate financing in the capital markets. Such support includes the direct purchase of municipal securities and providing credit enhancement in connection with municipal securities whose purchase is financed under any facility provided by the Board or any Federal 

reserve bank. 

‘‘(2) DEFINITION.—For purposes of this subsection, the term ‘municipal security’ has 

the meaning given the term ‘State or local 

bond’ in section 103(c) of the Internal Revenue Code of 1986 (26 U.S.C. 103(c)) and the 

regulations issued thereunder.’’. 

SEC. 403. COMMERCIAL REAL ESTATE LOANS. 

Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.) 

is amended by adding after section 137 (as 

added by section 401 of this title) the following new section: 

‘‘SEC. 138. CLARIFICATION OF AUTHORITY REGARDING COMMERCIAL REAL ESTATE LOANS. 

‘‘The authority of the Secretary to take 

any action under this title includes the authority to establish or support facilities to 

support the availability of commercial real 

estate loans, including through purchase of 

asset-backed securities, directly or through 

the Board of Governors of the Federal Reserve System or any Federal reserve bank.’’. 

TITLE V—HOPE FOR HOMEOWNERS 

PROGRAM IMPROVEMENTS 

SEC. 501. CHANGES TO HOPE FOR HOMEOWNERS 

PROGRAM. 

Section 257 of the National Housing Act (12 

U.S.C. 1715z–23) is amended— 

(1) in subsection (e)— 

(A) by striking paragraph (1); 

(B) in paragraph (2)(B), by striking ‘‘90 percent’’ and inserting ‘‘93 percent’’; 

(C) by striking paragraph (7); 

(D) in paragraph (9), by striking ‘‘by procuring’’ and all that follows through ‘‘by any 

other method’’; and 

(E) by redesignating paragraphs (2), (3), (4), 

(5), (6), (8), (9), (10), and (11) as paragraphs (1), 

(2), (3), (4), (5), (6), (7), (8), and (9), respectively; 

(2) in subsection (h)(2), by striking ‘‘, or in 

any case in which a mortgagor fails to make 

the first payment on a refinanced eligible 

mortgage’’; 

(3) by striking subsection (i) and inserting 

the following new subsection: 

‘‘(i) ANNUAL PREMIUMS.— 

‘‘(1) IN GENERAL.—For each refinanced eligible mortgage insured under this section, 

the Secretary shall establish and collect an 

annual premium in an amount equal to not 

less than 0.55 percent of the amount of the 

remaining insured principal balance of the 

mortgage and not more than 0.75 percent of 

such remaining insured principal balance, as 

determined according to a schedule established by the Board that assigns such annual 

premiums based upon the credit risk of the 

mortgage. 

‘‘(2) REDUCTION OR TERMINATION DURING

MORTGAGE TERM.—Notwithstanding paragraph (1), the Secretary may provide that 

the annual premiums charged for refinanced 

eligible mortgages insured under this section 

are reduced over the term of the mortgage or 

that the collection of such premiums is discontinued at some time during the term of 

the mortgage, in a manner that is consistent 

with policies for such reduction or discontinuation of annual premiums charged 

for mortgages in accordance with section 

203(c).’’; 

(4) in subsection (k)— 

(A) by striking the subsection heading and 

inserting ‘‘EXIT FEE’’; 

(B) in paragraph (1), in the matter preceding subparagraph (A), by striking ‘‘such 

sale or refinancing’’ and inserting ‘‘the mortgage being insured under this section’’; and 

(C) by striking paragraph (2); 

(5) in subsection (s)(3)(A)(ii), by striking 

‘‘subsection (e)(1)(B) and such other’’ and inserting ‘‘such’’; 

(6) in subsection (v), by inserting after the 

period at the end the following: ‘‘The Board 

shall conform documents, forms, and procedures for mortgages insured under this section to those in place for mortgages insured 

under section 203(b) to the maximum extent 

possible consistent with the requirements of 

this section.’’; 

(7) in subsection (w)(1)(C), by striking 

‘‘(e)(4)(A)’’ and inserting ‘‘(e)(3)(A)’’; and 

(8) by adding at the end the following new 

subsection: 

‘‘(x) PAYMENT TO EXISTING LOAN

SERVICER.—The Board may establish a payment to the servicer of the existing senior 

mortgage for every loan insured under the 

HOPE for Homeowners Program.’’. 

SEC. 502. FUNDING OF INCREASED HOPE FOR 

HOMEOWNERS PROGRAM CREDIT 

SUBSIDY COSTS. 

Section 257 of the National Housing Act (12 

U.S.C. 1715z–23) is amended by adding after 

subsection (x) (as added by section 501 of this 

title) the following new subsection: 

‘‘(y) FUNDING OF CREDIT SUBSIDY COSTS OF

2009 AMENDMENTS.—Notwithstanding section 


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1338(b) of the Housing and Community Development Act of 1992 (12 U.S.C. 4568(b)) and 

subsection (w) of this section— 

‘‘(1) to the extent amounts are available to 

the Secretary of the Treasury pursuant to 

section 118 of the Emergency Economic Stabilization Act of 2008, the Secretary shall use 

such amounts to cover any increase in the 

net costs to the Federal Government of the 

HOPE for Homeowners program under this 

section resulting from the amendments 

made by title V of the TARP Reform and Accountability Act of 2009, and actions authorized by title I of the Emergency Economic 

Stabilization Act of 2008 shall include such 

use; and 

‘‘(2) any remaining net costs to the Federal 

Government of the HOPE for Homeowners 

program under this section not resulting 

from the amendments made under this title 

shall be paid, and the Secretary of the Treasury shall be reimbursed for such costs, in accordance with the provisions of such section 

1338 and subsection (w) of this section.’’. 

TITLE VI—HOME BUYER STIMULUS 

SEC. 601. HOME BUYER STIMULUS PROGRAM. 

(a) IN GENERAL.—The Secretary of the 

Treasury (in this title referred to as the 

‘‘Secretary’’) shall carry out a program 

using the authority made available by section 1117 of the Housing and Economic Recovery Act of 2008 to stimulate demand for 

home purchases and reduce unsold inventories of residential properties, which shall 

include ensuring the availability of affordable interest rates on mortgages made for 

the purchase, by qualified home buyers, of 1- 

to 4-family residential properties. 

(b) PURCHASE OBLIGATIONS AND SECURITIES

USING HERA AUTHORITY.—The Secretary 

shall execute the program under this section 

through the purchase of obligations and 

other securities issued by— 

(1) the Federal National Mortgage Association, pursuant to the authority under section 

304(g) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1719(g)), 

(2) the Federal Home Loan Mortgage Corporation, pursuant to the authority under 

section 304(l) of the Federal Home Loan 

Mortgage Corporation Act (12 U.S.C. 1455(l)), 

and 

(3) any Federal Home Loan Bank, pursuant 

to the authority under section 11(l) of the 

Federal Home Loan Bank Act (12 U.S.C. 

1431(l)), 

as added by section 1117 of the Housing and 

Economic Recovery Act of 2008 (Public Law 

110–289). 

(c) USE OF LOAN ORIGINATORS AND PORTFOLIO LENDERS.—The program under this 

section shall provide mechanisms to ensure 

availability of such mortgages for home purchase having affordable interest rates 

through financial institutions that act as 

loan originators or as portfolio lenders. 

(d) AVAILABILITY OF AFFORDABLE LOANS

UNDER HOPE FOR HOMEOWNERS PROGRAM.— 

The Secretary, in consultation with the Secretary of Housing and Urban Development, 

shall ensure that the affordable interest 

rates made available through the program 

under this section are made available in connection with mortgages made for refinancing 

eligible mortgages, as such term is defined in 

section 257 of the National Housing Act (12 

U.S.C. 1715z–23), to be insured under the 

HOPE for Homeowners Program under such 

section. 

(e) TARGETING.—In carrying out the program under this section, the Secretary may 

take into consideration the impact of activities under the program on geographical areas 

having the greatest number of properties 

with foreclosed-upon mortgages. 

TITLE VII—FDIC PROVISIONS 

SEC. 701. PERMANENT INCREASE IN DEPOSIT INSURANCE. 

(a) AMENDMENTS TO FEDERAL DEPOSIT INSURANCE ACT.—Section 11(a)(1) of the Federal 

Deposit Insurance Act (12 U.S.C. 1821(a)) is 

amended— 

(1) in paragraph (1)(E), by striking 

‘‘$100,000’’ and inserting ‘‘$250,000’’ 

(2) in paragraph (1)(F)(i), by striking ‘‘2010’’ 

and inserting ‘‘2015’’; 

(3) in subclause (I) of paragraph (1)(F)(i), 

by striking ‘‘$100,000’’ and inserting 

‘‘$250,000’’; 

(4) in subclause (II) of paragraph (1)(F)(i), 

by striking ‘‘the calendar year preceding the 

date this subparagraph takes effect under 

the Federal Deposit Insurance Reform Act of 

2005’’ and inserting ‘‘calendar year 2008’’; and 

(5) in paragraph (3)(A)(iii), by striking ‘‘, 

except that $250,000 shall be substituted for 

$100,000 wherever such term appears in such 

paragraph’’. 

(b) REPEAL OF EESA PROVISION.—Section 

136 of the Emergency Economic Stabilization 

Act (Public Law 110–343; 122 Stat. 3765) is 

hereby repealed. 

(c) AMENDMENT TO FEDERAL CREDIT UNION

ACT.—Section 207(k) of the Federal Credit 

Union Act (12 U.S.C. 1787(k) is amended— 

(1) in paragraph (3)— 

(A) by striking the opening quotation 

mark before ‘‘$250,000’’; 

(B) by striking ‘‘, except that $250,000 shall 

be substituted for $100,000 wherever such 

term appears in such section’’; and 

(C) by striking the closing quotation mark 

after the closing parenthesis; and 

(2) in paragraph (5), by striking ‘‘$100,000’’ 

and inserting ‘‘$250,000’’; 

SEC. 702. EXTENSION OF RESTORATION PLAN PERIOD. 

Section 7(b)(3)(E)(ii) of the Federal Deposit 

Insurance Act (12 U.S.C. 1817(b)(3)(E)(ii)) is 

amended by striking ‘‘5-year period’’ and inserting ‘‘8-year period’’. 

SEC. 703. BORROWING AUTHORITY. 

Section 14(a) of the Federal Deposit Insurance Act (12 U.S.C. 1814(a)) is amended— 

(1) by striking ‘‘$30,000,000,000’’ and inserting ‘‘$100,000,000,000’’; and 

(2) by inserting prior to the last sentence, 

the following new sentence: ‘‘The Corporation may request in writing to borrow, and 

the Secretary may authorize and approve the 

borrowing of, additional amounts above 

$100,000,000,000 to the extent that the Board 

of Directors and the Secretary determine 

such borrowing to be necessary.’’. 

SEC. 704. SYSTEMIC RISK SPECIAL ASSESSMENTS. 

Section 13(c)(4)(G)(ii) of the Federal Deposit Insurance Act (12 U.S.C. 

1823(c)(4)(G)(ii)) is amended to read as follows: 

‘‘(ii) REPAYMENT OF LOSS.— 

‘‘(I) IN GENERAL.—The Corporation shall recover the loss to the Deposit Insurance Fund 

arising from any action taken or assistance 

provided with respect to an insured depository institution under clause (i) from 1 or 

more special assessments on insured depository institutions, depository institution 

holding companies (with the concurrence of 

the Secretary of the Treasury with respect 

to holding companies), or both, as the Corporation determines to be appropriate. 

‘‘(II) TREATMENT OF DEPOSITORY INSTITUTION HOLDING COMPANIES.—For purposes of 

this clause, sections 7(c)(2) and 18(h) shall 

apply to depository institution holding companies as if they were insured depository institutions. 

‘‘(III) REGULATIONS.—The Corporation shall 

prescribe such regulations as it deems necessary to implement this clause. In prescribing such regulations, defining terms, 

and setting the appropriate assessment rate 

or rates, the Corporation shall consider: the 

types of entities that benefit from any action taken or assistance provided under this 

subparagraph; economic conditions; the effects on the industry; and such other factors 

as the Corporation deems appropriate.’’. 

Mr. DAVIS of Illinois. Mr. Chair, I rise in 

strong support of the TARP Reform and Accountability Act. This bill greatly strengthens 

the safeguards for using taxpayer dollars for 

the TARP program. Two provisions promise to 

provide critical aid to Chicago. Requiring the 

Treasury to direct $100 billion to foreclosure 

mitigation provides hope to the hundreds of 

thousands of Chicagoans and families across 

the Nation who are struggling with foreclosure. 

Moreover, directing the Treasury to use TARP 

funds to benefit small financial institutions will 

help strengthen these financial institutions that 

play such an important role in Chicago. Hundreds of community banks in Chicago are teetering on collapse. These companies provide 

important support to small businesses and minorities, and, as of yet, they have not received 

aid from the Treasury. 

I especially want to thank Chairman FRANK

for including language that highlights the importance of considering consumer protections 

when determining which classes of consumer 

loans to support. Congresswoman YVETTE

CLARKE and I have worked actively along with 

16 other Members to urge the Treasury and 

Federal Reserve to proceed cautiously when 

using taxpayer funds for the student loan industry, ensuring that both financial and consumer protections are considered. We strongly 

support ensuring that students have the 

money they need to attend institutions of higher education. However, we must make certain 

that any such plan aids students and does not 

simply line the pockets of for-profit lenders. 

Certain groups of students require private 

student loans to attend school. Unlike Federal 

student loans, private student loans typically 

lack any form of consumer protection (such as 

fixed interest rates, income-contingent and income-based repayment options, or debt discharge in the case of disability or death). 

Moreover, private student loan lenders enjoy 

Federal protections from bankruptcy that other 

consumer creditors do not. Specifically, unlike 

other types of consumer debt, private student 

loans are protected from discharge during 

bankruptcy except under extreme circumstances. Thus, an individual who accumulates thousands of dollars in debt for purchases of cars or luxury goods can obtain relief via bankruptcy; however, a teacher with 

private student loans cannot. 

Given these circumstances, we hope the 

Treasury and Federal Reserve will construct 

its student loan plan carefully to mitigate 

against adverse consequences for private student loan borrowers, especially in light of current economic conditions. Should taxpayer 

money be used to support private student 

lenders of non-federal loans, we strongly urge 

that the Treasury and Federal Reserve require 

consumer protections similar to those afforded 

to Federal student loans as a condition of receipt of Federal rescue funds. Federal student 

loans have consumer protections; private student loans subsidized by the Treasury-Fed 

plan should have such protections as well. 

Further, we recommend instituting steps to assess the underwriting standards of lenders 

who seek Federal relief to determine if the 


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lenders extended credit to particularly vulnerable consumers and whether credit was extended with onerous terms or conditions. Similar to the executive compensation restrictions 

of the Treasury-Fed plan, these restrictions 

would help focus Federal dollars on stimulating lending while protecting taxpayers and 

borrowers. 

I thank Chairman FRANK and House leadership for developing this bill, and I urge my colleagues to support its passage. 

Mr. HOYER. Mr. Chair, last fall, at the urging of President Bush, Treasury Secretary 

Paulson, and Federal Reserve Chairman 

Bernanke, Congress took extraordinary action 

to stabilize America’s financial markets and 

limit the scope of an economic crisis. I know 

that the Troubled Assets Relief Program 

(TARP) was one of the most difficult votes that 

anyone in this Chamber had ever taken. But 

passing that bill was the right thing to do—and 

even with all of the turmoil of the past months, 

my mind hasn’t changed. 

On the other hand, I don’t think anyone in 

this Chamber is happy with TARP, either. As 

it has done so many times in the last 8 years, 

the Bush administration failed to follow congressional intent when it came to executing a 

law. The administration has failed to fight the 

wave of foreclosures at the source of this crisis, and it did too little to maximize the effectiveness of TARP funds in helping to restore 

our economy’s flow of credit. Nor did the administration adequately track how taxpayer 

money was spent to ensure that banks were 

using it for the intended purposes. 

We cannot in good conscience approve another $350 billion request without confidence 

that those failures will be remedied. 

This bill strengthens accountability and oversight measures, so that we can get necessary 

loans flowing again to families and businesses. It requires detailed reports from recipients of TARP funds and ensures that those 

funds un-thaw credit. It provides even stronger 

limits on executive compensation, so that taxpayers can be sure their money is not funding 

million-dollar Park Avenue apartments for 

CEOs. It clarifies the Treasury Department’s 

authority to use TARP funds to benefit small 

financial institutions, auto companies, consumers, and municipalities. And it insists that 

Treasury immediately commit $100 billion to 

fight foreclosures and help Americans keep 

their homes. 

President-elect Obama has promised that 

‘‘we are going to fundamentally change some 

of the practices in using this next phase of the 

program.’’ I agree wholeheartedly, and this bill 

is a strong first step toward that change. But 

I also want to make clear that the same high 

standards of oversight ought to apply to any 

administration, Republican or Democratic. 

TARP funds must be watched with the same 

diligence we would expect from any lender— 

and how much more so when the source of 

the funds is the American taxpayer, when the 

principal runs into twelve digits, and when the 

stakes are so high? 

Mr. Chair, Lyndon Johnson said—in words 

I’ve quoted before on this floor and I’m sure I’ll 

quote again—‘‘It’s not hard to do the right 

thing. It’s hard to know what the right thing is.’’ 

In this crisis, the problems are as complex 

as our end goal is simple: Businesses hiring, 

families thriving, America growing once again. 

But I am convinced that passing this bill is the 

right thing today. I hope and trust that my colleagues will see it the same way. 

Ms. CORRINE BROWN of Florida. Mr. 

Chair, I want to thank Chairman FRANK for his 

leadership in developing this bill. I appreciate 

the time you and your staff have spent on the 

issues important to the American people. You 

were instrumental in getting an amendment regarding tax credits in the manager’s amendment. 

I want to speak on the situation today. I 

voted for TARP when it was brought up last 

year. I am extremely disappointed as to how 

the banking industry used the taxpayer funds. 

The way the administration disbursed the 

first half of the TARP funds was not in the interest of the American people. It was in the interest of those who caused this crisis in the 

first place. The investment bankers, and elite 

financiers in New York were the first in line to 

claim some money and then left nothing for 

the people holding the bag, the homeowners 

and the small businesspeople like those from 

my district in Florida. 

The administration moved from helping 

those who held mortgages that were in foreclosure to bailing out the large banks. These 

banks took that money and put it in their pockets. They paid their shareholders and continued to pay bonuses to their executives. The 

banks called in their loans and eliminated lines 

of credit. They bought other banks. They 

closed businesses and used every legal 

means to get as much money as they could. 

What the banking industry did was not our intent. 

The Europeans used the government 

money to help stimulate the economy. Every 

pound or euro given to banks was required to 

be loaned out. As opposed to the banks here 

who called in loans and did away with lines of 

credit. 

I would like to ask Chairman FRANK a couple of questions at this time: 

‘‘Chairman FRANK, I am very concerned the 

money we are authorizing for the TARP program will not make it to the American people 

and will not be used for what we are intending 

it to be used for. We need to get money to 

people for (1) to end the foreclosures, of 

which thousands a day are happening all over 

the country, (2) auto loans—people can’t get 

credit to buy a car and (3) school loans—the 

banks are calling in the notes, prohibiting our 

young people from getting an education. 

The American people need this money. 

What protections have you included in the 

bill to ensure this happens?’’ 

Second, I have a question regarding the reappraisal of real estate collateral that is affecting the home builders in our country. I have 

an amendment in front of the rules committee 

which would permit lenders to extend or modify loan terms for home builders, so they could 

continue to pay interest without forcing them 

to pay large sums to the principal while in this 

economic crisis. 

I understand this issue is not covered by 

this bill. What assurances do I have that you 

will consider this issue in the future in your 

committee? 

Mr. Chairman, thank you very much for your 

explanations. In my district, along with most of 

the country, people cannot get the loans to 

consume, which is the basis for our economy. 

I am pleased you included these provisions in 

the bill, to help small businesses all over our 

country. 

Thank you for your hard work on this bill, to 

bring relief to those who are suffering from 

foreclosures and for your firm leadership on 

this issue for the many years you have served 

the people of Massachusetts and America. 

It is important the TARP funds being spent 

by the Administration be used for the benefit 

of the American people. From what I have 

seen, it does not. 

Mr. DINGELL. Mr. Chairman, I rise in support of the manager’s amendment to H.R. 384, 

the ‘‘TARP Reform and Accountability Act of 

2009.’’ Let me begin by thanking the distinguished chairman of the Committee on Financial Services for his fine work on H.R. 384, as 

well as for his cooperation in the past in my 

efforts to ensure that TARP funds were made 

available to the domestic automotive industry, 

as well as to domestic automotive financing 

companies. I look forward to working with him 

in the future to see that TARP funds are properly allocated and their use and effectiveness 

be subject to impartial oversight by the Congress. 

As debate on the use of TARP funds has 

progressed, I have consistently maintained 

that recipients of those funds all be subject to 

uniform oversight requirements. It pleases me 

that the manager’s amendment to H.R. 384 includes additional public reporting requirements 

for entities that have received or will receive 

TARP funds in the future. 

The question of oversight aside, I have also 

long maintained that the root of the Nation’s 

current economic crisis lies in the collapse of 

the housing market. Too little has been done 

in the past year to stabilize the market and 

help financially distressed homeowners. The 

manager’s amendment wisely addresses this 

problem by requiring that a specific portion of 

the next tranche of TARP funds be dedicated 

to mitigate foreclosures on residential mortgages within 7 days of enactment of H.R. 384. 

This is of particular importance and will hopefully be of great assistance to my State, Michigan, which unfortunately has one of the Nation’s highest foreclosure rates. 

While stabilizing the housing market is a 

large part of the solution to the current recession, I must reiterate my belief that the Congress should take action to support the domestic manufacturing industry, and in particular, our ailing automakers. I would note 

that foreign markets for automobiles are contracting, and other governments are contemplating or have already taken measures to 

help automakers with production facilities in 

their countries. A key part of the automotive 

industry’s troubles in the United States is the 

lack of credit available to consumers. The 

manager’s amendment retains H.R. 384’s 

grant of authority to the Treasury to provide 

support to the financing arms of automakers, 

which will in turn allow consumers and businesses access to previously unavailable lines 

of credit for the purchase of new vehicles. I 

voice my wholehearted support for this sensible provision, especially as the collective future of our automakers is tied directly to the 

health of their financing arms. 

I would again thank the chairman for his 

gracious cooperation in the past on this and 

many other issues. The manager’s amendment contains prudent measures to improve 

oversight and administration of the Troubled 

Asset Relief Program, and I would urge my 

colleagues to support its passage. 

The Acting CHAIR. No amendment 

to the bill is in order except those 

printed in House Report 111–3. Each 


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amendment may be offered only in the 

order printed in the report, by a Member designated in the report, shall be 

considered read, shall be debatable for 

the time specified in the report, equally divided and controlled by the proponent and an opponent of the amendment, shall not be subject to amendment, and shall not be subject to a demand for division of the question. 

AMENDMENT NO. 1 OFFERED BY MR. FRANK OF

MASSACHUSETTS

The Acting CHAIR. It is now in order 

to consider amendment No. 1 printed in 

House Report 111–3. 

Mr. FRANK of Massachusetts. I rise 

to offer that amendment, Mr. Chairman. 

The Acting CHAIR. The Clerk will 

designate the amendment. 

The text of the amendment is as follows: 

Amendment No. 1 offered by Mr. FRANK of 

Massachusetts: 

Page 3, line 16, after the period insert the 

following: ‘‘Such reporting may be required 

directly for nondepository institutions or 

through the appropriate Federal banking 

agency, as provided in section 103.’’. 

Page 4, line 15, strike ‘‘As’’ and insert ‘‘Except as provided in section 105, as’’. 

Page 4, line 18, before the second comma 

insert ‘‘made after the date of the enactment 

of the TARP Reform and Accountability Act 

of 2009’’. 

Page 5, line 1, strike ‘‘funding’’ and insert 

‘‘assistance’’. 

Page 5, line 10, strike ‘‘funds’’ and insert 

‘‘assistance’’. 

Page 6, line 23, strike ‘‘funds’’ and insert 

‘‘assistance’’. 

Page 7, after line 11, insert the following: 

(4) RENTER PROTECTION.—In the case of any 

foreclosure on any dwelling or residential 

real property securing an extension of credit 

made under a contract entered into after the 

date of the enactment of this Act, any successor in interest in such property pursuant 

to the foreclosure shall assume such interest 

subject to— 

(A) the provision, by the successor in interest, of a notice to vacate to any bona fide 

tenant at least 90 days before the effective 

date of the notice to vacate; and 

(B) the rights of any bona fide tenant, as of 

the date of such notice of foreclosure— 

(i) under any bona fide lease entered into 

before the notice of foreclosure to occupy the 

premises until the end of the remaining term 

of the lease or the end of the 6-month period 

beginning on the date of the notice of foreclosure, whichever occurs first, subject to 

the receipt by the tenant of the 90-day notice 

under subparagraph (A); or 

(ii) without a lease or with a lease terminable at will under State law, subject to 

the receipt by the tenant of the 90-day notice 

under subparagraph (A). 

(5) BONA FIDE LEASE OR TENANCY.—For purposes of this paragraph (1), a lease or tenancy shall be considered bona fide only if— 

(A) the mortgagor under the contract is 

not the tenant; 

(B) the lease or tenancy was the result of 

an arms-length transaction; or 

(C) the lease or tenancy requires the receipt of rent that is not substantially less 

than fair market rent for the property. 

Page 7, line 14, strike ‘‘may permit an’’ and 

insert ‘‘shall permit an assisted’’. 

Page 7, line 18, before the first period insert the following: ‘‘, and when such assistance is repaid, the Secretary shall liquidate 

warrants associated with such assistance at 

the current market price’’. 

Page 8, line 6, strike ‘‘means’’ and insert 

‘‘mean’’. 

Page 8, strike lines 19 through 21 and insert 

the following: 

‘‘(1) STANDARDS REQUIRED.—Notwithstanding any’’. 

Page 8, line 25, strike ‘‘assisted institution’’ and insert ‘‘institution that became an 

assisted institution after the date of the enactment of the TARP Reform and Accountability Act of 2009’’. 

Page 9, lines 6 through 8, strike ‘‘an assisted institution which received assistance 

under this title’’ and insert ‘‘such institution’’. 

Page 10, strike lines 5 through 16. 

Page 10, line 17, strike ‘‘(4)’’ and insert 

‘‘(3)’’. 

Page 10, line 23, strike ‘‘on or after’’ and 

insert ‘‘before’’. 

Page 12, line 24, before the first period, insert ‘‘, and shall require such reports to be 

provided to the appropriate State bank supervisor (as defined in section 3 of the Federal Deposit Insurance Act)’’. 

Page 13, line 4 and 5, strike ‘‘striking paragraph (1) and inserting’’ and inserting ‘‘adding at the end’’. 

Strike line 6 on page 13 and all that follows 

through page 16, line 18, and insert the following: 

‘‘(4) AMOUNT.—For assistance provided 

after the date of the enactment of the TARP 

Reform and Accountability Act of 2009, and 

except as provided in title III of such Act, 

the warrants or instruments described in 

this section shall have a value at least equal 

to 15 percent of the aggregate amount of 

such assistance.’’. 

Strike line 23 on page 16 and all that follows through page 17, line 2. 

Page 17, line 6, strike ‘‘make available 

funds’’ and insert ‘‘provide assistance’’. 

Page 17, line 8, before the period insert ‘‘, 

including such institutions that are privately held’’. 

Page 17, strike lines 9 through 12 and insert 

the following: 

(b) COMPARABLE TERMS.—An institution 

that receives assistance after the date of the 

enactment of the TARP Reform and Accountability Act of 2009, shall do so on terms 

comparable to the terms applicable to institutions that received assistance prior to the 

date of the enactment of such Act of 2009: 

Provided, That the institution— 

Page 17, line 13, strike ‘‘have submitted applications’’ and inserting ‘‘has submitted an 

application’’. 

Page 17, line 18, strike ‘‘are’’ and insert 

‘‘is’’. 

Page 17, line 25, strike the comma and insert a period. 

Page 18, strike lines 1 through 3. 

Page 19, after line 12, insert the following: 

SEC. 107. INCLUSION OF WOMEN AND MINORITIES. 

(a) OFFICE OF MINORITY AND WOMEN INCLUSION.—The Secretary of the Treasury shall 

establish an Office of Minority and Women 

Inclusion, or designate an office of the entity, that shall be responsible for carrying out 

this section and ensuring compliance by the 

Secretary and each assisted institution (as 

such term is defined in section 3 of the Emergency Economic Stabilization Act of 2008) 

with the requirements of this section. The 

Office shall be responsible for all matters of 

the entity relating to diversity in management, employment, and business activities 

in accordance with such standards and requirements as the Secretary shall establish 

regarding the use of assistance provided 

under title I of such Act. 

(b) INCLUSION IN ALL LEVELS OF BUSINESS

ACTIVITIES.—The Secretary and each assisted 

institution shall develop and implement 

standards and procedures to ensure, to the 

maximum extent possible, 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)) (including financial institutions, investment banking firms, mortgage banking firms, asset management 

firms, broker-dealers, financial services 

firms, underwriters, accountants, brokers, 

investment consultants, and providers of 

legal services) in all business and activities 

of the Secretary and each assisted institution at all levels, including in procurement, 

insurance, and all types of contracts (including contracts for the issuance or guarantee 

of any debt, equity, or mortgage-related securities, the management of its mortgage 

and securities portfolios, the making of its 

equity investments, the purchase, sale and 

servicing of single- and multi-family mortgage loans, and the implementation of its affordable housing program and initiatives). 

The processes established by the Secretary 

and each assisted institution for review and 

evaluation for contract proposals and to hire 

service providers shall include a component 

that gives consideration to the diversity of 

the applicant. 

(c) APPLICABILITY.—This section shall 

apply to all contracts of the Secretary of the 

Treasury and assisted institutions for services of any kind, including services that require the services of investment banking, 

asset management entities, broker-dealers, 

financial services entities, underwriters, accountants, investment consultants, and providers of legal services. 

(d) REPORTS TO CONGRESS.—Not later than 

180 days after the date of the enactment of 

this Act, the Secretary shall report to the 

Congress detailed information describing the 

actions taken by the Office and assisted institutions pursuant to this section, which 

shall include a statement of the total 

amounts provided by the Secretary and assisted institutions under title I of the Emergency Economic Stabilization Act of 2008 to 

third party contractors since the last such 

report and the percentage of such amounts 

paid to businesses described in subsection (b) 

of this section. 

SEC. 108. ANALYSIS OF USE OF ASSISTANCE. 

(a) REQUIREMENT.—The Secretary of the 

Treasury shall regularly analyze timely and 

detailed information concerning the use of 

assistance provided under title I of the 

Emergency Economic Stabilization Act of 

2008 by assisted institutions to ensure that 

the program established under title I of such 

Act is meeting the goals of the program. 

(b) AGENCY COLLECTION.—The Secretary of 

the Treasury shall require the Federal banking agencies (as defined in section 3 of the 

Federal Deposit Insurance Act) and any 

other Federal agency the Secretary chooses 

to report detailed information to the Secretary on the use of assistance provided by 

the Secretary under the Emergency Economic Stabilization Act of 2008 in a standard 

electronic form on no less than a quarterly 

basis. 

(c) SOURCE OF INFORMATION.—The data collected and analyzed under subsections (a) 

and (b)— 

(1) shall come from existing reports filed 

by all assisted institutions where possible, 

including depository institutions and nondepository institutions, with the principal 

Federal regulator of each such institution, if 

any; and 

(2) and should be sufficiently detailed and 

timely to enable the Secretary to determine 

the effectiveness of the program established 


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H346 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

under title I of the Emergency Economic 

Stabilization Act of 2008 in stimulating prudent lending and strengthening bank capital. 

(d) ADJUSTMENTS AND RECOMMENDATIONS.— 

If the Secretary of the Treasury determines 

that— 

(1) the goals of the program established 

under title I of the Emergency Economic 

Stabilization Act of 2008 are not being met, 

the Secretary shall work with the Federal 

agencies supplying the information under 

subsection (b) to encourage such agencies to 

provide the recipients of assistance under 

such title with recommendations for better 

meeting the goals of the program; and 

(2) the goals of the program are not being 

met following the recommendations and adjustments made in accordance with paragraph (1), the Secretary shall adjust the future uses of assistance provided under such 

title. 

SEC. 109. DATABASE OF USE OF TARP FUNDS. 

The Secretary of the Treasury shall create 

and maintain a fully searchable database, accessible on the Internet at no cost to the 

public, that contains the name of each entity 

receiving funds made available under section 

115(a) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5225(a)) and the 

purpose for which such entity is receiving 

such funds. 

Page 19, line 13, strike ‘‘107’’ and insert 

‘‘110’’. 

Page 19, line 16, strike ‘‘subsection’’ and 

insert ‘‘subsections’’. 

Page 19, line 20, strike the quotation 

marks and the last period. 

Page 19, line after line 20, insert the following: 

‘‘(g) QUALIFIED PROPERTY.— 

‘‘(1) GUARANTEE.—Upon the request of a 

lessee of qualified property in leases where 

the lessee economically defeased its rent and 

purchase option payments, the Secretary 

may serve as a guarantor with respect to all 

payment obligations of such lessee with respect to any defeased lease transaction that 

is in technical default because of a downgrade of a financial guarantor. Such guarantee shall be on such terms and conditions 

as are determined by the Secretary. 

‘‘(2) DEFINITIONS.—For purposes of this subsection, the following definitions shall apply: 

‘‘(A) QUALIFIED PROPERTY.—The term 

‘qualified property’ means domestic property 

subject to a lease entered into prior to November 1, 2007, in which a State or local government authority (as defined in section 

5302(a) of title 49, United States Code) is the 

lessee. 

‘‘(B) GUARANTOR.—The term ‘guarantor’ includes any guarantor, surety, and payment 

undertaker.’’. 

Page 20, before line 1 insert the following 

new section: 

SEC. 111. INVESTMENT OF TARP FUNDS IN CREDIT UNIONS TAKEN INTO ACCOUNT IN 

DETERMINATION OF NET WORTH. 

(a) IN GENERAL.—Section 216(o)(2) of the 

Federal Credit Union Act (12 U.S.C. 

1790d(o)(2)) is amended by striking subparagraph (A) and inserting the following new 

subparagraph: 

‘‘(A) with respect to any insured credit 

union, means— 

‘‘(i) the retained earnings balance of the 

credit union, as determined under generally 

accepted accounting principles, together 

with any amounts that were previously the 

retained earnings of any other credit union 

with which the credit union has combined; 

and 

‘‘(ii) any donated equity, permanent, and 

perpetual capital deposits, or other primary 

capital made available under Title I of the 

Emergency Economic Stabilization Act of 

2008, as determined by regulation or order of 

the Board with due regard for the accepted 

capital standards for United States depository institutions generally; and’’. 

(b) EFFECTIVE DATE.—The amendment 

made by subsection (a) shall take effect at 

the end of the 30-day period beginning on the 

date of the enactment of this Act. 

SEC. 112. TREASURY FACILITATED AUCTION. 

Section 113(b) of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5223(b)) is 

amended to read as follows: 

‘‘(b) USE OF MARKET MECHANISMS.— 

‘‘(1) IN GENERAL.—In making purchases 

under this Act, the Secretary shall— 

‘‘(A) make such purchases at the lowest 

price that the Secretary determines to be 

consistent with the purposes of this Act; and 

‘‘(B) maximize the efficiency of the use of 

taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate. 

‘‘(2) AUCTION FACILITATION.— 

‘‘(A) IN GENERAL.—The Secretary shall, in 

coordination with institutions that volunteer to participate, and not using any funds 

under this title for purchases, facilitate an 

auction of troubled assets owned by such institutions to third party purchasers. 

‘‘(B) REPORT.—If the auction described in 

subparagraph (A) does not take place within 

the 3 month period following the date of the 

enactment of the TARP Reform and Accountability Act of 2009, the Secretary shall 

issue a report to the Congress stating— 

‘‘(i) why such auction has not taken place; 

and 

‘‘(ii) by what mechanism the Secretary 

feels that troubled assets could most expeditiously be valued and liquidated.’’. 

Page 20, after line 4, insert the following: 

(a) COMMITMENT OF RESOURCES.—Notwithstanding any provision of title I of the Emergency Economic Stabilization Act of 2008, 

not later than seven days after the date of 

the enactment of the TARP Reform and Accountability Act of 2009, the Secretary of the 

Treasury (in this title referred to as the 

‘‘Secretary’’) shall commit funds made available to the Secretary under title I of the 

Emergency Economic Stabilization Act of 

2008 in an amount of at least $100,000,000,000, 

unless the Secretary certifies otherwise 

under subsection (d), but in no case less than 

$40,000,000,000, for the purposes of foreclosure 

mitigation. Not less than $20,000,000,000 of 

this amount shall be dedicated to the program described under section 204 of this Act. 

The Secretary shall consult with the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation regarding the administration of the program. 

Page 20, line 5, strike ‘‘(a)’’ and insert 

‘‘(b)’’. 

Page 20, strike ‘‘of the Treasury’’ in line 8 

and all that follows through ‘‘‘Secretary’)’’ 

in line 9. 

Page 20, line 11, after ‘‘to’’ insert ‘‘use the 

funds committed under subparagraph (a) to’’. 

Page 20, strike lines 16 through 21. 

Strike ‘‘committing funds’’ in line 23 of 

page 20 and all that follows through ‘‘of 2008’’ 

on page 21, line 1. 

Page 21, line 2, strike ‘‘(a)’’ and insert 

‘‘(b)’’. 

Page 21, line 3, strike ‘‘by May 1, 2009,’’. 

Page 21, lines 4 and 5, strike ‘‘more than 

the minimum of $40,000,000,000 as required’’ 

and insert ‘‘at least $100,000,000,000 in the 

plan established’’. 

Page 21, lines 6 and 7, strike ‘‘, no later 

than May 15, 2009,’’ and insert ‘‘in the plan’’. 

Page 21, line 7, strike ‘‘additional funds’’ 

and insert ‘‘amounts’’. 

Page 21, after line 8, insert the following: 

(e) CLARIFICATION.—For purposes of this 

title, the term ‘‘residential properties’’ shall 

include 1- to 4-family residential properties. 

Page 21, line 11, strike ‘‘201(a)’’ and insert 

‘‘201(b)’’. 

Page 21, lines 23 and 24, strike ‘‘one, or a 

combination of more than one,’’ and insert 

‘‘the systematic foreclosure prevention and 

mortgage modification program under section 204 and a combination’’. 

Page 21, after line 25, insert the following: 

(4) WORKFORCE AND OUTREACH.—The plan 

shall set forth how the Secretary intends to 

develop, second, or contract for appropriate 

staffing to carry out the plan and the component programs and to ensure that private 

mortgage servicers utilizing the programs 

established by the Secretary will provide 

sufficient staffing and resources to engage in 

the outreach, loss mitigation activities, and 

homeowner education necessary for successful foreclosure mitigation. 

Page 22, line 2, strike ‘‘201(a)’’ and insert 

‘‘201(b)’’. 

Page 22, strike lines 9 through 11. 

Page 22, line 12, strike ‘‘(2)’’ and insert 

‘‘(1)’’. 

Page 22, line 23, strike ‘‘(3)’’ and insert 

‘‘(2)’’. 

Page 23, line 8, strike ‘‘(4)’’ and insert 

‘‘(3)’’. 

Page 23, line 13, strike ‘‘(5)’’ and insert 

‘‘(4)’’. 

Page 23, line 10, after ‘‘servicers’’ insert 

the following: ‘‘‘‘, including servicers that 

are not affiliated with a depository institution,’’. 

Page 23, line 19, after ‘‘Corporation’’ insert 

‘‘, regional public-private partnerships,’’. 

Page 23, after line 22, insert the following: 

(5) SUBSTITUTION OF TRUST.—A program 

under which modifications are allowed to the 

securitization trust agreements with respect 

to securities secured by pools of mortgages 

to allow a new qualified buyer to be substituted on a foreclosed property or a delinquent mortgage without seeking new financing. 

Page 24, line 18, after ‘‘with’’ insert ‘‘the 

Chairperson of the Federal Deposit Insurance 

Corporation and’’. 

Page 27, line 19, strike ‘‘201(a)’’ and insert 

‘‘201(b)’’. 

Page 28, line 3, strike ‘‘118’’ and insert 

‘‘title I’’. 

Page 28, line 12, strike ‘‘204’’ and insert 

‘‘205’’. 

Page 28, line 18, strike ‘‘201(a)’’ and insert 

‘‘201(b)’’. 

Page 29, line 1, strike ‘‘205’’ and insert 

‘‘206’’. 

Strike line 21 on page 31 and all that follows through page 32, line 2. 

Page 32, line 3, strike ‘‘(c)’’ and insert 

‘‘(b)’’. 

Page 32, line 10, strike ‘‘(d)’’ and insert 

‘‘(c)’’. 

Page 32, after line 19, insert the following: 

SEC. 207. FORECLOSURE PREVENTION FOR AFFORDABLE HOUSING. 

Section 109 of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5219) is 

amended to read as follows: 

‘‘SEC. 109. FORECLOSURE MITIGATION EFFORTS. 

‘‘(a) RESIDENTIAL MORTGAGE 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 renters 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 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H347 

credit enhancements to facilitate loan modifications to prevent avoidable foreclosures 

on single-family and multifamily housing. 

‘‘(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, including a 

qualified low-income building under section 

42 of the Internal Revenue Code of 1986, 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 by homeowners 

and owners of multifamily housing, including qualified low-income buildings under section 42 of the Internal Revenue Code of 1986, 

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.’’. 

Page 32, line 20, strike ‘‘206’’ and insert 

‘‘208’’. 

Page 33, after line 6, insert the following 

(and conform the Table of Contents accordingly): 

SEC. 209. MORTGAGE MODIFICATION DATA COLLECTING AND REPORTING. 

(a) REPORTING REQUIREMENTS.—Not later 

than 120 days after the date of the enactment 

of this Act, and quarterly thereafter, the 

Comptroller of the Currency, in coordination 

with the Director of the Office of Thrift Supervision, shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, and the Joint Economic Committee on 

the volume of mortgage modifications reported to the Office of the Comptroller of the 

Currency and the Office of Thrift Supervision, under the mortgage metrics program 

of each such Office, during the previous quarter, including the following: 

(1) The total number of mortgage modifications resulting in each of the following: 

(A) Additions of delinquent payments and 

fees to loan balances. 

(B) Interest rate reductions and freezes. 

(C) Term extensions. 

(D) Reductions of principal. 

(E) Deferrals of principal. 

(F) Combinations of modifications described in subparagraph (A), (B), (C), (D), or 

(E). 

(2) The total number of mortgage modifications in which the total monthly principal 

and interest payment resulted in the following: 

(A) An increase. 

(B) Remained the same. 

(C) Decreased less than 10 percent. 

(D) Decreased 10 percent or more. 

(b) DATA COLLECTION.— 

(1) REQUIRED.— 

(A) IN GENERAL.—Not later than 60 days 

after the date of the enactment of this Act, 

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

shall issue mortgage modification data collection and reporting requirements to institutions covered under the reporting requirement of the mortgage metrics program of 

the Comptroller or the Director. 

(B) INCLUSIVENESS OF COLLECTIONS.—The 

requirements under subparagraph (A) shall 

provide for the collection of all mortgage 

modification data needed by the Comptroller 

of the Currency and the Director of the Office of Thrift Supervision to fulfill the reporting requirements under subsection (a). 

(2) REPORT.—The Comptroller of the Currency shall report all requirements established under paragraph (1) to each committee receiving the report required under 

subsection (a). 

Page 52, strike ‘‘obligation’’ in line 19 and 

all that follows through ‘‘2008’’ in line 21 and 

insert ‘‘existing vested legal rights and the 

Constitution’’. 

Page 63, line 9, after the first period insert 

the following: ‘‘In determining which classes 

of consumer loans to support, the Secretary 

may consider the applicable regulatory 

structure and level of consumer protection 

afforded to such loans.’’. 

Page 63, line 11, strike ‘‘103’’ and insert 

‘‘101’’. 

Page 63, line 13, strike ‘‘(f)’’ and insert 

‘‘(g)’’. 

Page 63, line 13, strike ‘‘401’’ and insert 

‘‘110’’. 

Page 63, line 15, strike ‘‘(g)’’ and insert 

‘‘(h)’’. 

Page 64, line 8, before the first period insert the following: ‘‘or any other entity eligible to issue bonds the interest on which is 

excludable from gross income for Federal income tax purposes.’’. 

Page 64, line 19, after ‘‘estate loans,’’ insert 

‘‘including loans for multifamily housing,’’. 

Page 64, after line 22, insert the following 

new sections: 

SEC. 404. SMALL BUSINESS LOANS. 

Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.) 

is amended by adding after section 138 (as 

added by section 403 of this title) the following new section: 

‘‘SEC. 139. CLARIFICATION OF AUTHORITY REGARDING SMALL BUSINESS LOANS. 

‘‘The authority of the Secretary to take 

any action under this title includes the authority to establish or support facilities to 

support the availability of small business 

loans, including farm loans, loans to minority and disadvantaged businesses, debtor-inpossession financing, dealer floor plan financing, and any other small business loans, 

including through purchase of asset-backed 

securities, directly or through the Board or 

any Federal reserve bank.’’. 

SEC. 405. COMMERCIAL LOANS. 

Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.) 

is amended by adding after section 139 (as 

added by section 404 of this title) the following new section: 

‘‘SEC. 140. CLARIFICATION OF AUTHORITY REGARDING COMMERCIAL LOANS. 

‘‘The authority of the Secretary to take 

any action under this title includes the authority to establish or support facilities to 

support the availability of commercial loans, 

including through purchase of asset-backed 

securities, directly or through the Board or 

any Federal reserve bank.’’. 

SEC. 406. AUTOMOBILE FLEET PURCHASE LOANS. 

Title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.) 

is amended by adding after section 140 (as 

added by section 405 of this title) the following new section: 

‘‘SEC. 140. CLARIFICATION OF AUTHORITY REGARDING AUTOMOBILE FLEET PURCHASE LOANS. 

‘‘The authority of the Secretary to take 

any action under this title includes the authority to establish or support facilities to 

support the availability of automobile fleet 

purchase loans, including loans for the automobile rental industry and other fleet purchasers, including through purchase of assetbacked securities, directly or through the 

Board or any Federal reserve bank.’’. 

SEC. 407. CERTIFICATION. 

Subsection (a) of section 105 of the Emergency Economic Stabilization Act of 2008 (12 

U.S.C. 5215(a)) is amended— 

(1) in paragraph (2), by striking ‘‘and’’ at 

the end; 

(2) in paragraph (3), by striking the period 

at the end and inserting ‘‘; and’’; and 

(3) by adding at the end the following new 

paragraph: 

‘‘(4) the use of the authority for the purposes specified in the amendments made by 

title IV of the TARP Reform and Accountability Act of 2009.’’. 

Strike line 1 on page 68 and all that follows 

through page 69, line 2. 

Page 69, line 7, strike ‘‘carry out’’ and insert ‘‘establish and implement, within 60 

days of the date of the enactment of the 

TARP Reform and Accountability Act of 

2009,’’. 

Page 69, lines 8 and 9, strike ‘‘using the authority made available by section 1117 of the 

Housing and Economic Recovery Act of 

2008’’. 

Page 69, lines 11 and 12, strike ‘‘which shall 

include ensuring’’ and insert ‘‘by providing 

mechanisms to ensure’’. 

Page 69, line 12, after ‘‘affordable’’ insert ‘‘, 

below-market’’. 

Strike line 15 on page 69 and all that follows through page 70, line 13, and insert the 

following: 

(b) IMPLEMENTATION.—The Secretary shall 

execute the program under this section using 

the authority to purchase obligations and 

other securities issued by the Federal National Mortgage Association, the Federal 

Home Loan Mortgage Corporation, and the 

Federal Home Loan Banks made available by 

the Housing and Economic Recovery Act of 

2008 and such other authority as the Secretary may have (other than that provided 

by title I of the Emergency Economic Stabilization Act of 2008) to make affordable, 

below-market interest rates available directly through portfolio lenders. 

Page 70, line 14, strike ‘‘(d)’’ and insert 

‘‘(c)’’. 

Page 70, line 17, after ‘‘affordable’’ insert ‘‘, 

below-market’’. 

Strike line 24 on page 70 and all that follows through page 71, line 3, and insert the 

following: 

(e) TARGETING FOR HOUSING DISASTER

AREAS.— 

(1) IN GENERAL.—In carrying out the program under this section, the Secretary shall 

take into consideration impact of activities 

under the program on housing disaster areas. 

(2) REPORT.—Not later than 60 days after 

the Secretary first has authority to purchase 

troubled assets pursuant to section 115(a)(3) 

of the Emergency Economic Stabilization 

Act of 2008 (12 U.S.C. 5225(a)(3)), the Secretary shall— 

(A) evaluate the impact of existing Federal 

foreclosure prevention activities on housing 

disaster areas; 

(B) make a determination of whether the 

foreclosure rates and anticipated default 

rates in such areas have been adequately reduced; and 


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H348 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

(C) submit a report to the Congress that 

describes the impact of such activities and 

the determination of the Secretary under 

subparagraph (B). 

(3) ALTERNATIVE PROPOSALS.— If the Secretary determines that the foreclosure rates 

and anticipated default rates in housing disaster areas have not been adequately reduced, the Secretary shall— 

(A) consider carrying out alternative proposals, including a proposal under which the 

Federal Government makes available affordable mortgages, including refinancings, 

through subsidized financing or mortgage 

purchases; and 

(B) establish and carry out alternative programs as the Secretary considers necessary 

to ensure that foreclosure prevention efforts 

are most effective in the areas of greatest 

need, including housing disaster areas. 

(4) HOUSING DISASTER AREAS.—For purposes 

of this section, the term ‘‘housing disaster 

area’’ means a geographic area having both— 

(A) a high foreclosure rate during the 12 

months preceding the date of the enactment 

of this Act, as measured by percentages of 

homes in or having gone through foreclosure 

during such period and compared to other 

areas; and 

(B) a substantial decline in home prices 

during the 12 months preceding the date of 

the enactment of this Act, as measured by 

the Office of Federal Housing Enterprise and 

Oversight and compared to other areas. 

Page 72, line 20, strike ‘‘1814(a)’’ and insert 

‘‘1824(a)’’. 

At the end of the bill, add the following 

new title: 

TITLE VIII—REPORTS ON THE GUARANTEE OF CERTAIN CITIGROUP ASSETS 

SEC. 801. REPORTS REQUIRED. 

(a) TREASURY REPORTS.—Not later than 30 

days after the date of the enactment of this 

Act, the Secretary of the Treasury, in coordination with the Chairperson of the Board 

of Directors of the Federal Deposit Insurance 

Corporation, shall issue a report to the Committee on Financial Services of the House of 

Representatives, the Committee on Banking 

of the Senate, and to the Comptroller General of the United States containing the following: 

(1) The authority under which the 

Citigroup guarantee and purchases were 

made. 

(2) A complete accounting of the specific 

loans, securities, and any other financial instruments in the asset pool covered by the 

Citigroup guarantee. 

(b) GAO REPORT.—Not later than 60 days 

after the date the Secretary of the Treasury 

issues the report required by subsection (a), 

the Comptroller General of the United States 

shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking of the 

Senate examining the probable long-term 

cost to the Federal Government of the 

Citigroup guarantee. 

(c) CITIGROUP GUARANTEE DEFINED.—For 

the purpose of this section, the term 

‘‘Citigroup guarantee’’ means the agreement 

announced November 23, 2008, between 

Citigroup and the Treasury and the Federal 

Deposit Insurance Corporation to guarantee 

or purchase, partly through the use of funds 

authorized under the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5201 et 

seq.), an asset pool of approximately $306 billion of loans and securities backed by residential and commercial real estate and other 

such assets on Citigroup’s balance sheet. 

TITLE IX—GAO STUDY OF FINANCIAL 

CRISIS 

SEC. 901. STUDY REQUIRED. 

The Comptroller General of the United 

States shall— 

(1) conduct an in-depth study of the root 

causes of the financial crisis; and 

(2) submit a report to the Congress and the 

President, and transmit a copy to the Secretary of the Treasury, containing the findings and conclusions of the Comptroller General with respect to the study under paragraph (1), together with such recommendations for legislative and administrative action as the Comptroller General may determine to be appropriate before the end of the 

6-month period beginning on the date of the 

enactment of this Act. 

SEC. 902. TREASURY STRATEGY AND TIMELINE. 

Using the findings and conclusions of the 

Comptroller General in the report under section 901(2), within 30 days, the Secretary of 

the Treasury shall issue an overall strategy 

and timeline for implementing the recommendations contained in the report with 

the goal of financial stability and the wellbeing of taxpayers. 

The Acting CHAIR. Pursuant to 

House Resolution 62, the gentleman 

from Massachusetts (Mr. FRANK) and a 

Member opposed each will control 20 

minutes. 

The Chair recognizes the gentleman 

from Massachusetts. 

b 1115 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I yield myself such time as 

I may consume. 

Mr. Chairman, when we determined 

that because the President was going 

to be triggering this request we should 

act on this bill, we sent out a notice to 

all Members inviting amendments. We 

received a large number of amendments and we agreed that many of 

them made a great deal of sense. Some 

of them we think clarify what was already the intention of the bill. This 

amendment includes a variety of those. 

There will be Members here on the 

floor who want to talk about it. 

For example, you heard the gentleman from Kansas (Mr. MORAN) talk 

about the removal of the provision that 

would have restricted the use of private aircraft. That is one of the things 

that is in here. There are other things 

that are important to various Members 

who will be addressing them. They aim 

at enforcing better the accountability 

and essentially increasing some of the 

restrictions on the recipient institutions. I will be discussing these and 

other matters with some other Members. 

At this point, I reserve the balance of 

my time. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I claim the time in opposition. 

The Acting CHAIR. The gentleman is 

recognized for 20 minutes. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I yield myself such time as 

I may consume. 

Mr. Chairman, just before this meeting out here on the floor, I was in my 

office back in Cannon meeting with 

and on the phone with constituents 

back at home discussing the fact of the 

difficult plight we find ourselves and 

the economy in in this country right 

now, specifically with regard to homeowners, the problems that they are 

having with paying their mortgages 

and the like, the difficulty overall with 

the economy, with the rising unemployment rates, the problems in the 

credit markets and the like. 

The question they ask, of course, is 

what is Congress about to do with this 

situation. The conversation always 

turns around to what has Congress 

done in the first place, and, of course, 

we know what that is. 

Several months ago, I guess it was in 

September, this Congress was told by 

the administration and agreed to by 

the other side of the aisle that unless 

Congress acted expeditiously, the sky 

was going to fall in, and that what 

Congress had to do was authorize and 

appropriate $700 billion to bail out the 

situation. 

Well, we have since that time spent 

$350 billion of that sum, and the callers 

that I heard from from home that I was 

just referring to before are saying, 

what did it achieve? What did we accomplish? Unemployment is still high, 

the housing market is still tight, home 

prices are still falling, and all that we 

really did was to bail out Wall Street, 

is the way some people couch it. 

The question then comes up, how did 

we go through that process. I have to 

tell the people back at home, not in a 

very transparent and open manner. 

Quite honestly, it was in a rushed matter. We rushed through a piece of legislation that started out at three pages 

and then turns out to well over 100, 

without a single hearing, without a 

single markup, without a single discussion really in committee as to whether 

there would be transparency and accountability and the like. 

Well, sir, now we are about to do the 

same thing next week, I understand, 

when President-elect Obama has requested that we spend the next $350 billion, again without the appropriate 

oversight. So I commend the chairman 

for taking the step to try to begin to 

begin the process of providing some of 

that degree of accountability, transparency and oversight. 

But I do raise the same question that 

the people asked me on the phone 

today that I was talking to: Why are 

we rushing to judgment on it? Why are 

we going through it in the same manner, the same failed policy reasons, the 

same procedural manner that we did 

before, without a hearing, without a 

discussion, without a markup in committee, so that both sides of the aisle 

could come together with their good 

ideas in order to achieve what the 

American public wants, to right the 

economy, to not put the taxpayer on a 

hook, and to do so that the taxpayer is 

protected. Why are we doing it in the 

same failed policy procedure we did in 

the past without that ability for input? 

Now, the chairman will say, well, we 

have ability because the Rules Committee allowed a number of amendments. We will be debating those 

amendments shortly, 10 or 11 amendments I believe we will have at that 

point in time. 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H349 

The chairman will agree that is not 

the best way to achieve what we are 

trying to for the American people. The 

best way is to have an open, honest discussion in committee, allow the experts to come in and testify, allow 

Members from both sides of the aisle to 

have input, and allow it to go through 

the committee to get that desired result. 

That was not done with TARP 1, that 

really is not being done with TARP 2. 

So I rise in opposition to this failed 

policy and procedure that we are doing 

here today as well. 

With that, I reserve the balance of 

my time. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I first yield myself 30 seconds to correct the gentleman from 

New Jersey. 

The gentleman from New Jersey said 

that President Obama was requesting 

these funds. In fact, President Bush requested the funds. He did it after President-elect Obama asked him to, but I 

think it ought to be clear on the 

record, this is a continuation of the 

Bush policy and it was President Bush 

who in fact requested the funds. President Obama could not request them 

until next week. The President did it 

at the request of the President-elect, 

but it was President Bush who did it. 

I now yield 2 minutes to the gentleman from Rhode Island (Mr. KENNEDY). 

(Mr. KENNEDY asked and was given 

permission to revise and extend his remarks.) 

Mr. KENNEDY. Thank you, Mr. 

Chairman. I rise to engage the chairman in a colloquy. 

Mr. Chairman, I am extremely concerned at the current state of affairs 

with credit card regulations as my constituents see these extraordinary interest rates affecting their credit cards. I 

am appalled that companies continue 

to engage in predatory practices, like 

double-cycle billing and inadequate notification periods and retroactive rate 

hikes for these credit cards. 

I am seeing these predatory practices 

continue, in spite of the fact that the 

Federal Reserve has recently finalized 

a rule that will ban many of these 

predatory practices. Unfortunately, 

these reforms are not scheduled to go 

into place until July 2010, and then 

they will save our consumers over $10 

billion a year. 

I think it would be outrageous to see 

us bail out these banks, and yet see 

them also continue to gouge these consumers of ours, these taxpayers at the 

other end of the ledger on these predatory practices. I would like to work 

with the chairman to see that we address this issue in forthcoming legislation. 

Mr. FRANK of Massachusetts. If the 

gentleman will yield, as he knows, because he was a strong supporter, the 

Committee on Financial Services, once 

we became the majority, in fact put 

through this House a bill that was even 

tougher in some ways than what the 

Federal Reserve did, and I think was 

the spur to the Federal Reserve acting. 

Unfortunately, it wasn’t acted on in 

the Senate, but I thought it was good 

that we passed it. I know there are 

Members who say if we can’t know the 

Senate is going to pass something, we 

shouldn’t even try. We have rejected 

that. We did pass that bill. 

The gentlewoman from New York 

(Mrs. MALONEY) has been a leader here. 

She will be bringing that bill up again, 

and we want to apply those principles 

not just to TARP recipients, but to all 

credit card companies. We expect to do 

it quickly. The gentleman is absolutely 

right. We should not wait until 2010. I 

hope that we will have this bill on the 

floor by March, and we will be able, 

and the gentleman’s input has been 

very helpful to us, to pass this bill that 

will become law very soon. 

Mr. KENNEDY. I want to salute the 

gentleman for the transparency and accountability standards that he has in 

the manager’s amendment, and encourage additional funds to go to the foreclosure problem that he has identified 

in his manager’s amendment. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I yield myself such time as 

I may consume. 

It is interesting to find out that our 

chairman, who oftentimes berates our 

side of the aisle for distancing ourselves from our President, now I find 

that he is already distancing himself 

from the President-to-be, Presidentelect Obama. 

While he is correct while being overly technical about it by saying that it 

was President Bush who actually filed 

the paperwork and made the submission to this House and to the Congress 

in order for the request of the additional TARP funds, he seems to be 

distancing himself from his party’s 

candidate and his party’s and all this 

Nation’s President-elect Obama, for it 

was President-elect Obama who did go 

to President Bush and did request that 

this Congress facilitate the passage of 

the additional $350 billion. 

Now, the chairman may not like the 

fact that President-elect Obama is requesting it. Maybe, quite candidly, the 

chairman has the same concerns that I 

do, that President-elect Obama failed 

to give us a plan, which makes it hard 

for either one of us, quite candidly, to 

be able to discuss either in committee 

or here on the Floor in a rational and 

logical manner what it is exactly we 

will be spending the $350 billion on. 

So I will join with the chairman in 

being concerned and outraged that 

President-elect Obama has not given us 

a plan. But it is concerning that the 

chairman points to President Bush, 

when he knows it is President-elect 

Obama who instigated this in the first 

place. 

But I will yield. 

Mr. FRANK of Massachusetts. The 

gentleman has transformed my correcting his error into distancing myself 

from President Obama. I said when I 

got up that it was done by President 

Bush at the request of President 

Obama. 

Mr. GARRETT of New Jersey. I reclaim my time. Thank you. I understand what he said before, but then you 

have to always point to the words that 

came after that, and he was alluding to 

the fact that it actually came to the 

floor from President Bush when, yes, it 

was President-elect Obama who initiated it. 

But for the fact that President-elect 

Obama initiated it, President Bush, as 

far as I know, has never made a statement that he would have unilaterally 

made that request. I have never seen 

anything in the media, and I may be 

wrong, but I have never seen anything 

in the media or otherwise saying that 

President Bush was about to come to 

this Congress and ask for those additional funds. 

It was President-elect Obama, for 

good or for bad, and I think for the fact 

that we don’t have a plan here, quite 

candidly, Mr. Chairman, to discuss and 

debate today, more for the bad than 

the good that we are coming here without such a plan. 

I reserve the balance of my time. 

Mr. FRANK of Massachusetts. I will 

yield myself 1 minute. 

The gentleman from New Jersey has 

built that castle in the air because I 

corrected his flat error. He said President-elect Obama asked for it. He did 

not. I said that President Bush asked 

for it at the request of President-elect 

Obama. How my correcting his error 

became distancing myself from the new 

President is beyond me. 

In fact, President Bush’s administration did want the second $350 billion. 

The gentleman is wrong in saying they 

didn’t. Secretary Paulson was deterred 

from doing that, however, because we 

told him that we were sufficiently disappointed in the way it had been administered and that if he asked for it 

we would probably reject it, and that 

only if he came to some agreement 

with the new President and the Congress could that go forward. So those 

are the facts. 

Yes, the outgoing administration 

wanted it. They withheld because they 

were told they wouldn’t get it unless 

they had cooperation, and then the two 

administrations jointly did that. There 

is no distancing when I make that 

point. 

In fact, the central point here about 

the TARP is this: We believe quite to 

the opposite that we are distancing 

ourselves from Mr. Obama. We believe 

that because Bush used this badly is no 

reason to give Obama not a chance to 

use it well. 

I now yield 2 minutes to the gentleman from Kansas (Mr. MOORE). 

Mr. MOORE of Kansas. Mr. Chairman, I thank the chairman. 

Mr. Chairman, I rise today in support 

of Chairman FRANK’s manager’s 

amendment and the underlying legislation. I want to thank Chairman FRANK

and his excellent staff for working with 

me to address a concern I had with the 

original draft bill. 


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On Tuesday, I talked to our Kansas 

Governor, Kathleen Sebelius. We were 

concerned about a provision in the bill 

that would have required financial 

firms participating in TARP to divest 

their companies of corporate business 

aircraft. 

While it is clear that the auto executives were very insensitive to the 

American taxpayers when they flew in 

their private jets last November to request billions of dollars in Federal assistance, a blanket prohibition against 

the corporate use of business aircraft 

would have had the unintended consequence of hurting the general aviation industry and its workers, which is 

important to Kansas. 

With nearly 44,000 Kansans who work 

for aviation companies like Cessna, 

Beechcraft, Learjet and Boeing, as well 

as their contracting counterparts like 

Garmin and Honeywell, many Kansas 

families depend on this industry. And 

the impact would have been felt not 

just in Kansas. General aviation contributes more than $150 billion a year 

to the U.S. economy and employs more 

than 1.2 million people. 

I want to thank again Chairman 

FRANK and his staff for responding to 

our concerns and for striking this provision. This is good news for Kansans 

and aviation workers across this country. These are difficult times. I urge 

my colleagues to support the manager’s amendment and this bill to ensure these TARP funds are responsibly 

allocated with strong oversight protections for the American taxpayer. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I yield 5 minutes to the gentleman from Texas (Mr. HENSARLING), a 

leader on this issue and more importantly a leader on the issue of reviving 

our economy in general and in a free 

market manner which will not put the 

American taxpayer on the hook. 

Mr. HENSARLING. Mr. Chairman, I 

thank the gentleman for yielding. 

Mr. Chairman, I again question why 

we are even here today. I observe again 

that those who have risen to be the 

largest critics of the TARP bill were 

the ones who wrote the TARP bill. So, 

number one, why weren’t the standards, the accountability, the provisions 

that some are seeking today, why 

weren’t they there originally? That is 

question number one. 

Question number two is: Why are we 

having to have a vote that turns off the 

spigot of an extra $350 billion of taxpayer money, as opposed to turn it on? 

So why are we even having to have 

this vote, Mr. Chairman, I think is an 

interesting question that the American 

people want to know the answer to. 

Now, already if you look at the actions of the Federal Reserve, if you 

look at the actions of Treasury, Mr. 

Chairman, we are already up to somewhere in the neighborhood of $7 trillion 

to $8 trillion of potential liability taxpayer exposure. I don’t necessarily believe the taxpayer will have to pay it 

all. I hope and pray that the taxpayer 

will get some return on his investment. 

b 1130 

But to sit here and say that unless 

Congress somehow authorizes the incoming President to spend an extra 

$350 billion that we could spend ourselves, and to give him this authority, 

without any plan being presented 

whatsoever, I mean, Mr. Chairman, 

that’s just something I don’t understand. It’s not something that the constituents that I represent in the Fifth 

District of Texas understand. 

Now, I do believe that the chairman 

is right on a couple of instances, that, 

yes, we need to know how institutions 

who are receiving TARP funds actually 

spend it. That’s important. We need to 

have some kind of measurement of success to know what’s actually happening here. 

But I look at the provisions of the 

strings that he’s attempting to attach 

after the fact, when, if this was a horse 

leaving the barn, I don’t think we’ve 

seen much left but his tail. But when I 

look at the strings that are being attached here, I mean, Number 1, we have 

explicit language here that most of us 

have concluded is picking winners and 

losers in our economy, express language dealing with the auto companies. 

Now, I don’t want to see the auto 

companies fail. Nobody in America 

does. But name me an industry in 

America that isn’t struggling. Is Congress so wise that they can decide 

which industries are deserving the taxpayer bailout and which aren’t? 

It’s one thing for the Federal Government to try to monitor the money supply, ensure that the money supply is 

proper, that would hopefully lift all industries, help all families, help all job 

creators and those who have the jobs. 

But it’s another to start saying, well, 

here’s the explicit plan for the auto industry. And if it’s the auto industry 

today, is it the airlines industry tomorrow? Who is it next week? 

Again, how can everybody who’s 

struggling bail out everybody else 

who’s struggling? 

And what has become of all of this 

money? 

Again, it’s not like this is the only 

$350 billion lying around. The Federal 

Reserve already has a number of credit 

facilities that are set up. We don’t even 

know the full impact of the first $350 

billion. 

And so now we have a plan that, as I 

understand, and I believe I’ve heard the 

chairman say that the Senate does not 

intend to vote on this, which is another 

reason I question the use of the House’s 

time on this matter. But trying to 

have a provision that picks winners 

and losers in our economy and, specifically, in our housing industry as well. 

We know about the tragic circumstances in our housing industry. 

But what’s going to make it even more 

tragic, Mr. Chairman, is to take money 

away from people who are current on 

their mortgages, or who rent, or who 

own their homes outright, to give the 

money to people who aren’t current in 

their mortgage. 

Now, there’s a couple of reasons people aren’t current in their mortgages. 

Number 1, maybe it’s through no fault 

of their own. Maybe they were duped 

by a predatory lender. Maybe they had 

a serious illness. Maybe they had a loss 

of job. I mean, these are serious setbacks, and I would hope that we could 

help these people. 

But, Mr. Chairman, there’s a huge 

universe of people who engaged in predatory borrowing, out-and-out mortgage 

fraud. There’s a universe of people who 

decided they would turn their homes 

into an ATM machine, and now they 

expect their neighbor to bail them out. 

There’s a whole group who didn’t really 

buy a home, they bought an investment and they decided to live in it, and 

now they expect their neighbor to bail 

them out. 

When you’re struggling to pay your 

mortgage, Mr. Chairman, you shouldn’t 

be compelled to have to pay your 

neighbors’ as well. 

For all these reasons, this amendment should be defeated. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I first yield myself 1 minute 

to say that I appreciate the intellectual honesty of the gentleman from 

Texas (Mr. HENSARLING). He opposes 

one of the major thrusts of this bill and 

one of the major criticisms many of us 

had of the Bush administration, namely, the foreclosure relief. And the gentleman opposed these efforts. 

I must say that I am encouraged by 

the Bush appointee, Secretary of HUD, 

Mr. Preston, the Bush appointee as 

head of the FDIC, Ms. Bair, both of 

whom believe that we can do foreclosure protection with the tools in 

this bill, and that it can be done effectively. But I appreciate this is a genuine difference between us and I appreciate the gentleman articulating it. 

In 2007, this House passed a bill to restrict subprime lending of an inappropriate sort aimed at both borrowers 

and lenders. It would have made it impossible for people to borrow inappropriately, as well as to lend. The gentleman, I believe, opposed that. Many 

others, the gentleman from New Jersey 

did. There were some important philosophical differences. 

The Wall Street Journal, which 

today denounces us for trying to do 

foreclosure relief, denounced us at the 

time. They said when we passed the bill 

to restrict subprime lending, it was an 

undue interference in the market, and 

we’re going to keep people from owning 

homes. 

The Acting CHAIR. The time of the 

gentleman has expired. 

Mr. FRANK of Massachusetts. I yield 

myself an additional 30 seconds. 

So just to be clear, whether or not 

there should be Federal programs as 

advocated by FDIC Chair Bair, Secretary of HUD Preston and many others, whether or not there should be 

Federal programs to reduce foreclosure, is a very defining difference 

between most of us on this side and 

most on the other side; although there 


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are many on the Republican side who 

do agree with us that we should try to 

abate foreclosures, not just as a matter 

of compassion, but as central to solving our economic problem. 

I now yield 2 minutes to the gentlewoman from Texas (Ms. JACKSON-LEE). 

(Ms. JACKSON-LEE of Texas asked 

and was given permission to revise and 

extend her remarks.) 

Ms. JACKSON-LEE of Texas. Let me 

thank the chairman very much. And I 

might just simply say that I remember 

the haggling previously in the last year 

about this bill. And one of the issues 

was the veto threat of the President in 

not allowing us to add language earlier. We fought for it. 

Let me thank the chairman very 

much for what we’ve all fought for over 

the years, over the last couple of 

months, and that is the amount of, if 

you will, mortgage set aside money. I 

want to announce that over and over 

again, that there is now money included in here to directly work with 

my constituent who I sat down at her 

kitchen table. She gets $18,000 a year, 

but she’s hardworking and she had a 

home that she could afford, except for 

the adjustable rate. So I want to thank 

for that. And it is something that I 

want more. We all want more, but 

we’re starting out in that direction to 

be able to focus on mortgage workouts. 

Mr. Chairman, I’d like to engage in a 

colloquy at this time. Quickly, the 

Treasury Department has yet to issue 

the necessary guidelines for about 3,000 

additional private banks. Most of them 

are set up as partnerships with no more 

than 100 shareholders. They are not 

able to issue preferred shares to the 

government in exchange for capital injections at other banks. However, they 

are very vital to the inner city. And I 

ask, in our work together, whether or 

not if you can explain the language. 

Mr. FRANK of Massachusetts. If the 

gentlewoman would yield. 

Ms. JACKSON-LEE of Texas. I’d be 

happy to yield. 

Mr. FRANK of Massachusetts. She’s 

absolutely right. I appreciate her calling this to our attention. We have 

amended the bill to take into account 

these private banks, many of which 

serve lower-income communities and 

are themselves people of experience in 

this area. 

As I said yesterday when the question came up about mutuals, the form 

of ownership should not be determinative here. Whether or not they are performing a valid function in the economy and whether or not they can use 

these funds responsibly is all that 

should cover. So we did amend the bill 

at the gentlewoman’s request in that 

manner. 

Ms. JACKSON-LEE of Texas. We 

thank you very much. And the language does move this along, and I want 

to thank you. 

Quickly, let me also thank you for 

regulating the automobile industry, 

which you promised to do, which you 

also worked specifically to provide 

more credit to the automobile industry. But in that light we talked 

about—— 

The Acting CHAIR. The time of the 

gentlewoman has expired. 

Mr. FRANK of Massachusetts. I yield 

the gentlewoman 30 seconds. 

Ms. JACKSON-LEE of Texas. We 

talked about minority participation. 

You have now some language that 

says, not only can they benefit as 

small businesses from loans, but they 

can service or participate in that process of doing business. 

Mr. FRANK of Massachusetts. If the 

gentlewoman would yield. 

Ms. JACKSON-LEE of Texas. I’d be 

happy to yield. 

Mr. FRANK of Massachusetts. Yes. In 

fact, it will make the administration 

better if those administering it have 

knowledge of and represent the whole 

range of people to whom this is aimed. 

And I thank the gentlewoman. 

Ms. JACKSON-LEE of Texas. Well, 

let me thank you specifically for the 

Office of Minority and Women Inclusion. It is a great edition. And I would 

say this is a tough business. People are 

hurting. It’s time to move forward on a 

newly regulated TARP, the American 

people’s taxpayer dollars will be protected. 

Mr Chair, I rise today in strong support of 

H.R. 384, the Troubled Assets Relief Program, 

TARP, Reform and Accountability Act of 2009. 

This bill will amend the TARP provisions of the 

Emergency Economic Stabilization Act of 

2008, EESA, to strengthen accountability, 

close loopholes, increase transparency, and 

most importantly, require the Treasury Department to take significant steps on foreclosure 

mitigation. 

Mr. Chair, I was particularly pleased to work 

with Chairman FRANK and his staff on significant portions of the manager’s amendment to 

this legislation which ensures that small and 

minority businesses along with local, community, and private banks gain fair and equitable 

access to the TARP funds. 

It has been 3 months since the Treasury 

started disbursing TARP funds. Just in time 

perhaps for a lot of big banks; however, smaller banks have been locked out so far. A lot of 

small banks certainly are in need of relief as 

the real estate crisis continues to unfold and 

hundreds have already applied. 

According to recent reports, the Treasury 

Department has yet to issue ‘‘the necessary 

guidelines for about 3,000 additional private 

banks. Most of them are set up as partnerships, with no more than 100 shareholders. 

They are not able to issue preferred shares to 

the government in exchange for capital injections, as other banks can.’’ While Treasury officials state they are ‘‘working on a solution,’’ 

for these private banks time is of the essence. 

The Treasury Department has handed out 

more than $155 billion to 77 banks. Of that 

sum, $115 billion has gone to the eight largest 

banks. Community banks hold 11 percent of 

the industry’s total assets and play a vital role 

in small business and agriculture lending. 

Community banks provide 29 percent of small 

commercial and industrial loans, 40 percent of 

small commercial real estate loans, and 77 

percent of small agricultural production loans. 

This manager’s amendment requires that 

the Treasury Department act promptly to permit smaller community financial institutions 

that have been shut out so far to participate 

on the same terms as the large financial institutions that have already received funds. 

Small businesses are the backbone of our 

Nation, and unfortunately, they have not been 

afforded the opportunity that large financial institutions have received to TARP funds and 

loans. Small businesses represent more than 

the American dream—they represent the 

American economy. Small businesses account 

for 95 percent of all employers, create half of 

our gross domestic product, and provide three 

out of four new jobs in this country. Small 

business growth means economic growth for 

the Nation. We cannot stabilize and revitalize 

our economy without ensuring the inclusion 

and participation of the small business segment of our economy. With the ever worsening economic crisis, we must ensure in this 

legislation that small and minority businesses 

and community banks are afforded an opportunity to benefit from this important legislation. 

I am very pleased that the manager’s amendment will effect this change. 

In Section 107, the manager’s amendment 

creates an Office of Minority and Women Inclusion, which will be responsible for developing and implementing standards and procedures to ensure the inclusion and utilization of 

minority and women-owned businesses. 

These businesses will include financial institutions, investment banking firms, mortgage 

banking firms, broker-dealers, accountants, 

and consultants. 

Furthermore, the inclusion of these businesses should be at all levels, including procurement, insurance, and all types of contracts 

such as the issuance or guarantee of debt, 

equity, or mortgage-related securities. This office will also be responsible for diversity in the 

management, employment, and business activities of the TARP, including the management of mortgage and securities portfolios, 

making of equity investments, the sale and 

servicing of mortgage loans, and the implementation of its affordable housing programs 

and initiatives. 

Section 107 also calls for the Secretary of 

the Treasury to report to Congress in 180 

days detailed information describing the actions taken by the Office of Minority and 

Women Inclusion, which will include a statement of the total amounts provided under 

TARP to small, minority, and women-owned 

businesses. The manager’s amendment in 

Section 404 also has clarifying language ensuring that the Secretary has authority to support the availability of small business loans 

and loans to minority and disadvantaged businesses. 

This will be critical to ensuring that small 

and minority businesses have access to loans, 

financing, and purchase of asset-backed securities directly through the Treasury Department 

or the Federal Reserve. 

H.R. 384 reforms TARP by increasing oversight, reporting, monitoring and accountability. 

It requires any existing or future institution that 

receives funding under TARP to provide no 

less than quarterly public reporting on its use 

of TARP funding. Any insured depository institution that receives funding under TARP is required to report quarterly on the amount of 

any increased lending, or reduction in decrease of lending and related activity attributable to such financial assistance. 

In connection with any new receipt of TARP 

funds, Treasury is also required to reach an 


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H352 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

agreement with the institution, and its primary 

Federal regulator on how the funds are to be 

used and benchmarks the institution is required to meet so as to advance the purposes 

of the act to strengthen the soundness of the 

financial system and the availability of credit to 

the economy. In addition, a recipient institution’s primary Federal regulator must specifically examine use of funds and compliance 

with any program requirements, including executive compensation and any specific agreement terms. 

Mr. Chair, I am pleased that this legislation 

has strong requirements regarding executive 

compensation. For any new receipt of TARP 

funds, except those by small financial institutions, this legislation applies the most stringent 

non-tax executive compensation restrictions 

from EESA across the board including: 

1. Requiring Treasury to prohibit incentives 

that encourage excessive risks, 

2. Providing for claw-back of compensation 

received based on materially inaccurate statements; and 

3. Prohibits all golden parachute payment 

for the duration of the investment. 

Included in this legislation is a requirement 

of government board representation by authorizing Treasury to have an observer at board or 

board committee meetings of recipient institutions. This legislation changes the structure 

and authority of TARP board—the Financial 

Stability Oversight Board is expanded to include the Chairman of the FDIC and two additional members who are not currently Federal 

employees, who shall be appointed by President and subject to Senate confirmation. The 

Board will have the authority to overturn policy 

decisions of the Treasury Secretary by a twothirds vote. 

Mr. Chair, the act provides that the second 

$350 billion is conditioned on the use of up to 

$100 billion, but no less than $40 billion, for 

foreclosure mitigation, with plan required by 

March 15, 2009. By that date, the Secretary 

shall develop, subject to TARP Board approval, a comprehensive plan to prevent and 

mitigate foreclosures on residential mortgages. 

The Secretary shall begin committing TARP 

funds to implement the plan no later than April 

1, 2009. The Secretary must certify to Congress by May 15, 2009, if he has not committed more than required minimum $40 billion. 

The foreclosure mitigation plans must apply 

only to owner-occupied residences and shall 

leverage private capital to the maximum extent 

possible consistent with maximizing prevention 

of foreclosures. Treasury must use some combination of the following program alternatives: 

1. Guarantee program for qualifying loan 

modifications under a systematic plan, which 

may be delegated to the FDIC or other contractor; 

2. Bringing costs of Hope for Homeowner 

loans down, beyond mandatory changes in 

Title V below, either through coverage of fees, 

purchasing H4H mortgages to ensure affordable rates, or both; 

3. Program for loans to pay down second 

lien mortgages that are impeding a loan modification subject to any writedown by existing 

lender Treasury may require; 

4. Servicer incentives/assistance—payments 

to servicers in connection with implementation 

of qualifying loan modifications; and 

5. Purchase of whole loans for the purpose 

of modifying or refinancing the loans with authorization to delegate to FDIC. 

In consultation with the FDIC and HUD and 

with the approval of the Board, Treasury may 

determine that modifications to an initial plan 

are necessary to achieve the purposes of this 

act or that modifications to component programs of the plan are necessary to maximize 

prevention of foreclosure and minimize costs 

to the taxpayers. 

A safe harbor from liability is provided to 

servicers who engage in loan modifications, 

regardless of any provisions in a servicing 

agreement, so long as the servicer acts in a 

manner consistent with the duty established in 

Homeowner Emergency Relief Act, maximize 

the net present value, NPV, of pooled mortgages to all investors as a whole; engage in 

loan modifications for mortgages that are in 

default or for which default is reasonably foreseeable; the property is owner-occupied; the 

anticipated recovery on the mod would exceed, on an NPV basis, the anticipated recovery through foreclosure. 

This bill requires persons who bring suit unsuccessfully against servicers for engaging in 

loan modifications under the act to pay the 

servicers’ court costs and legal fees. It also requires servicers who modify loans under the 

safe harbor to regularly report to the Treasury 

on the extent, scope, and results of the 

servicer’s modification activities. 

In addition to the above requirements, an 

oversight panel is required to report to Congress by July 1 on the actions taken by Treasury on foreclosure mitigation and the impact 

and effectiveness of the actions in minimizing 

foreclosures and minimizing costs to the taxpayers. 

H.R. 384 clarifies and confirms Treasury authorization to provide assistance to automobile 

manufacturers under the TARP. With respect 

to the assistance already provided to the domestic automobile industry, includes conditions of the House auto bill, including longterm restructuring requirements. 

There is further clarification on: 

Treasury’s authority to provide support to 

the financing arms of automakers for financing 

activities is clarified to ensure that they can 

continue to provide needed credit, including 

through dealer and other financing of consumer and business auto and other vehicle 

loans and dealer floor loans; 

Treasury’s authority to establish facilities to 

support the availability of consumer loans, 

such as student loans, and auto and other vehicle loans. Such support may include the purchase of asset-backed securities, directly or 

through the Federal Reserve; 

Treasury’s authority to provide support for 

commercial real estate loans and mortgagebacked securities; and 

Treasury’s authority to provide support to 

issuers of municipal securities, including 

through the direct purchase of municipal securities or the provision of credit enhancements 

in connection with any Federal Reserve facility 

to finance the purchase of municipal securities. 

In addition, more reforms are enunciated for 

homeowners in title V. The home buyer stimulus provisions requires Treasury to develop a 

program, outside of the TARP, to stimulate demand for home purchases and clear inventory 

of properties, including through ensuring the 

availability of affordable mortgages rates for 

qualified home buyers. 

In developing such a program Treasury may 

take into consideration impact on areas with 

highest inventories of foreclosed properties. 

The programs will be executed through the 

purchase of mortgages and MBS using funding under HERA. Treasury will provide mechanisms to ensure availability of such reduced 

rate loans through financial institutions that act 

as either originators or as portfolio lenders. 

Under this provision, Treasury has to make 

affordable rates available under this program 

available in connection with Hope for Homeowner refinancing program. 

This legislation will give a permanent increase in FDIC and NCUA deposit insurance 

limits, it makes permanent the increase in deposit insurance coverage for banks and credit 

unions to $250,000, which was enacted temporarily as part of the Emergency Economic 

Stabilization Act and is scheduled to sunset on 

December 31, 2009, and includes an inflation 

adjustment provision for future coverage. 

Finally, I applaud Chairman FRANK and the 

Committee on Financial Services for their hard 

work on this important piece of legislation. In 

this economic climate it is critical for us to remember that while we need to assist our financial institutions, we cannot do this without 

implementing reforms to protect Americans’ 

hard-earned money. 

I strongly urge my colleagues to join me in 

support of this important legislation. 

Mr. GARRETT of New Jersey. I first 

yield myself 30 seconds to respond to 

the chairman’s question. Yes, there is a 

specific philosophical difference with 

regard to keeping people in their 

houses. As we know, both sides of the 

aisle want to do the best that the Federal Government can do in this area. 

And the administration has already set 

up a program, the HOPE program, and 

taken other actions to try to facilitate 

those people who are in difficult situations to remain in their houses. 

But I believe it was Ms. WATERS on 

your side of the aisle that raised the 

same point similar to what I raised. 

What do we say to the person who has 

been on time paying their bills, which 

is over 90 percent of the American public homeowners, who has been paying 

their bill month after month after 

month on time and saying to them, 

well, you know what? We’re going to 

use your tax dollars to subsidize the 

people across the street with a program 

to help them keep when they went over 

the amount they should be spending on 

their homes. And that is the philosophical difference that we have. 

I yield now 2 minutes to the gentleman from Indiana (Mr. BURTON). 

Mr. BURTON of Indiana. Let me just 

start off by saying I’m opposed to all 

these bailouts. 

But after having said, let me say that 

if we’re going to do it we really need a 

comprehensive plan that’s going to 

deal with the problems facing this 

country. 

I had home builders come into my office last week, and they told me that 

their businesses are being re-appraised, 

and they’re going to have to pay the 

difference between what the appraisal 

was initially and what it is now, and 

they’re driving a lot of these home 

builders out of business. 

I had some people who are commercial developers come in to see me last 


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week, and they told me that their commercial assets are being re-appraised, 

maybe 70 percent of what they were before, and they have to pay the difference between what they were getting and the 70 percent, and they’re 

being driven out of business. So there’s 

a huge cascading effect with all these 

problems that we’re facing right now. 

And we’re not addressing them in this 

bill or any of the other bills that I’ve 

seen. 

You’ve got people who are losing 

their homes. You’ve got home builders 

that are going out of business. You’ve 

got commercial developers that are 

going out of business because of these 

re-appraisals, and there’s nothing in 

the plans that I’ve seen that addresses 

these problems. 

Mr. FRANK and I are good friends. But 

just throwing this money at these 

problems without any plan is actually 

crazy. And yet we did it with the first 

$350 billion tranche, and we’re going to 

do it again, and then we’re going to 

come back with a $1.2 trillion request 

in just another 2 or 3 weeks. I mean, we 

can’t buy our way out of these problems. We have to have a sound business 

plan to deal with these problems. And 

if we don’t do it, we’re going to see a 

huge economic problem that’s even 

worse than what we face today. 

So I’d like to say to Mr. FRANK and 

my colleagues, before we start giving 

all this money away, why don’t we 

really sit down with the people that 

are supposed to be administering this 

money and come up with a sound plan 

that affects the entire economy. I 

mean, if you’re going to spend the 

money, we might as well do it the right 

way. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, first I’ll yield myself 30 seconds to answer the question. What do 

we tell the person making mortgage 

payments why we are trying to help reduce foreclosures? And the major reason is that it is the improvident granting of these loans and the failure of 

many of these loans to pay off that is 

the single biggest cause of the financial crisis we’re in. And a wide range of 

economists agree that until we reduce 

the rate of foreclosures which are embedded in so many securities that were, 

without regulation, scattered around 

the economic landscape, we will not be 

able to undo the economic problem 

we’re in. So foreclosure diminution is 

part of our economic recovery plan. 

It also, of course, hurts property values in general. 

I now yield 1 minute to a very active 

member of our committee, the gentleman from Colorado (Mr. 

PERLMUTTER). 

Mr. PERLMUTTER. Mr. Chairman, I 

rise in support of the manager’s 

amendment and the bill. We’re in a position where $350 billion, without any 

conditions, is likely to be passed, or 

it’s been requested and likely will go 

out the door. 

These conditions are important, and 

the conditions that are added through 

the manager’s amendment are particularly important. One of the things we 

talked about with the original TARP 

bill was that money would, 1, buy 

mortgage portfolios, 2, recapitalize 

banks and 3, pass through various 

agencies to small businesses through 

the Federal home loan banks and 

through the farm credit administration. 

This manager’s amendment assures 

that money passes directly to people 

on Main Street, including the home 

builders that Mr. BURTON was just 

talking about, commercial realtors, 

commercial real estate, farmers, municipal bond dealers, so that credit all 

across the board is available to people 

and gets this economy back on track 

and loosens up credit across the United 

States. 

And I support the manager’s amendment and ask for an ‘‘aye’’ vote. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I yield 3 minutes to Mr. 

SCHOCK from Illinois. 

Mr. SCHOCK. Chairman FRANK, 

Ranking Member BACHUS and Congressman GARRETT, first let me thank 

you for the opportunity to come to the 

floor and speak today. 

Chairman FRANK, I congratulate you 

on bringing this piece of legislation 

forward, and I admire the meticulous 

and bipartisan nature in which you 

have crafted it. 

I would like also to thank you, the 

both of you, for the inclusion of my 

noncontroversial amendment into the 

manager’s amendment. I believe this 

amendment represents a small but important step which will serve the good 

of the American people. 

My amendment is very simple. It establishes a user-friendly Web site 

where the American people can quickly 

and accurately see where their money 

is going. 

During debate yesterday, we heard 

the need for more oversight, more 

transparency, and more control over 

the flow of TARP funds. 

b 1145 

I am glad that we here in Congress 

will be provided more information 

about TARP funds. However, what 

about the American people? 

This is their money, and I believe 

they need to be able to track it. I hope 

that an online database will provide a 

helpful tool in this effort. In essence, 

this amendment seeks to create a 

Google for TARP. This Web site will 

clearly display who is using the money, 

for what purposes and how their dollars 

will ultimately cycle back to their 

pockets. I intend this Web site to be 

easily searchable and to contain information on both specific payments and 

on the aggregate amounts received by 

each receiving entity. This amendment 

is about accurate accounting, openness, fair government, transparency, 

and hopefully, one day, balancing our 

budget. 

You know, when my constituents 

leave the grocery store, they know 

three things—what they’ve spent, what 

they got for their money and how their 

purchases are going to help their families. Well, the American people deserve 

to know the same thing when they, for 

the very first time, are pouring billions 

of the same hard-earned dollars, which 

they used to purchase groceries, into 

the financial and housing markets. 

Americans should be able to identify 

what is being spent in their name. 

Currently, the Treasury Department 

provides limited balance sheets, listing 

complex purchases on their Web site. 

The target audience of this Web site is 

for those applying for TARP funds, in 

other words, financial experts. It is not 

for those who are looking to see how 

their money is spent. 

Well, I’m sure my constituents are 

very similar to yours. They’re not 

high-powered New York City investment bankers. While they have not 

been a part of this problem, they’re 

being asked to foot the bill for it. In 

doing so, it is their right to know 

where their money is going, for what 

programs it is being used and how it 

will benefit them in the long run. 

While I support the bill we are considering today, I am concerned that 

these changes, while needed, will further confuse where this money is 

going. Funds will begin to cross over 

multiple government agencies to the 

point where anyone wanting to track 

the flow of money would have to visit 

multiple Web sites with his mouse in 

one hand and his calculator in the 

other. A person should not have to be a 

forensic accountant to decipher where 

his tax dollars are being allocated. 

The Acting CHAIR. The time of the 

gentleman has expired. 

Mr. FRANK of Massachusetts. I yield 

the gentleman an additional 30 seconds. 

Mr. SCHOCK. Thank you, Mr. FRANK. 

My hope is that, through this amendment, we can establish something similar to or what can become a part of 

what our President-elect has established under the Federal Funding Accountability and Transparency Act of 

2006—the USAspending.gov Web site, a 

Web site explaining to the American 

people the different Federal agencies 

and how their hard-earned money is 

being spent to better their lives. 

As I said, this is a commonsense 

amendment that seeks to improve the 

people’s access to their government. 

Mr. FRANK of Massachusetts. Would 

the gentleman yield to me the remaining few seconds? 

Mr. SCHOCK. Yes, sir. 

Mr. FRANK of Massachusetts. I just 

want to say the gentleman said his 

amendment was noncontroversial, but 

noncontroversial doesn’t mean unimportant. It is a very thoughtful amendment. It will greatly advance things, 

and I appreciate his offering it. 

The Acting CHAIR. The gentleman’s 

time has expired. 

Mr. FRANK of Massachusetts. I yield 

2 minutes to one of the Members who 

has been most active in trying to deal 


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with this foreclosure problem that 

other Members think we should ignore. 

He is the gentleman from Maryland 

(Mr. CUMMINGS). 

Mr. CUMMINGS. Mr. Chairman, I 

rise today in support of the manager’s 

amendment offered today by Chairman 

FRANK to H.R. 384, the TARP Reform 

and Accountability Act of 2009. I will 

also take this opportunity to commend 

his extraordinary leadership on this 

issue and to thank him and the Rules 

Committee for including language that 

I have proposed within the manager’s 

amendment. 

The language I offer requires the 

Comptroller of the Currency and the 

Director of the Office of Thrift Supervision to issue mortgage modification 

data collection and reporting requirements for the banks they regulate and 

to report this information back to Congress. This amendment is necessary for 

one clear reason: 

In a December 8, 2008 report, the OCC 

announced that, within 3 months of an 

initial mortgage modification, nearly 

36 percent of borrowers redefaulted by 

being more than 30 days past due. After 

6 months, the rate was nearly 53 percent, and after 8 months, it was 58 percent. 

Unfortunately, no one really knows 

the reasons behind these redefault 

rates. This language will help us gather 

the information we need to understand 

what is occurring and to understand, 

hopefully, why it is occurring. 

Mr. Chairman, a RealtyTrac reported 

this morning that the foreclosure rate 

jumped to 81 percent in 2008 with one in 

every 54 households experiencing at 

least one foreclosure. This equates to 

nearly 2.3 million properties. 

Foreclosure rates are projected to 

rise in the coming months, and it is, 

therefore, imperative to us to understand the nature of the modifications 

being made by lenders and whether 

they address the real needs of borrowers by creating terms borrowers 

can realistically meet. 

It is our duty to protect homeowners 

and to ensure transparency, accountability and strict standards. H.R. 384 

accomplishes these objectives. 

Again, I want to thank Mr. FRANK for 

his efforts, and I want to urge my colleagues to support this amendment and 

the underlying bill. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, at this time, I yield another 

2 minutes to the gentleman from Texas 

(Mr. HENSARLING). 

Mr. HENSARLING. I was listening 

carefully to the distinguished chairman of the Financial Services Committee when he introduced the previous speaker. He said the gentleman 

cared passionately about the foreclosure mitigation, and apparently, 

other Members don’t. I’m not sure who 

the chairman was alluding to. We certainly care about foreclosure mitigation on this side of the aisle. 

Mr. Chairman, there is no better 

foreclosure mitigation plan than keeping your job, number 1, having expanded opportunities for a better job in 

the future, and number 3, having a 

growing paycheck. That’s why Republicans on this side of the aisle have 

supported a tax relief plan to make 

sure that people keep their jobs and to 

help small businesses. It’s why people 

on this side of the aisle—why Republicans, Mr. Chairman—have supported 

a plan that would reduce the tax on future job creation—the capital gains 

tax, the tax on investment. It’s why we 

have supported tax reductions for middle-income families so they can pay 

these mortgages. 

I see, unfortunately, that the chairman has left the floor, but I would also 

observe that over 2 million mortgages 

have been refinanced between the borrowers and lenders. 

Listen, a great tragedy has occurred 

in our housing market. Now the question is: With all of these losses, who is 

going to realize it? Is it going to be the 

borrowers and the lenders or is it going 

to be the taxpayers? 

So, if some believe there are other 

Members who don’t care about foreclosure mitigation, I would say, Mr. 

Chairman, it appears that some Members don’t care about the debt that 

they are placing on future generations, 

constraining their homeownership opportunities. They don’t care about the 

fact that we are now looking, under 

this Congress, at the single largest deficit in America’s history, that we are 

seeing red ink as far as the eye can see 

and that we are possibly planting the 

seeds for an even worse recession 5, 6, 7, 

8 years from now because bad public 

policy decisions, Mr. Chairman, after 9/ 

11 and after the dot-com bubble have 

led us to where we are today. 

Mr. DRIEHAUS. Mr. Chairman, I 

yield myself 1 minute. 

Thank you to the gentleman from 

Massachusetts for his leadership on 

this amendment and for his leadership 

on this issue. I stand in support of the 

manager’s amendment. 

Many who support it—the Emergency 

Economic Stabilization Act that first 

authorized the money for TARP—despite the fact that they were angered 

by the circumstances that caused its 

necessity, believed it was essential for 

the Nation’s economy. 

My home State of Ohio is amongst 

the Nation’s leaders in its foreclosure 

rate, and I am keenly aware of the need 

for intervention to mitigate the increasing number of foreclosures. This 

measure recognizes that and provides 

relief for those who need it most, not 

just for America’s homeowners, not 

just for America’s financial institutions but for entire communities that 

are suffering and that are failing under 

the weight of the foreclosure crisis. 

I appreciate the chairman’s fundamental work on this issue. Again, I 

would encourage my colleagues to support the manager’s amendment. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, at this time, I have no further speakers, and I would reserve my 

time until the gentleman from Massachusetts is ready to close. 

Mr. FRANK of Massachusetts. I yield 

2 minutes to one of the most active advocates of trying to have effective foreclosure relief. She is the gentlewoman 

from Maryland (Ms. EDWARDS). 

Ms. EDWARDS of Maryland. Mr. 

Chairman, I rise today in support of 

the underlying bill and of the amendment introduced by my good friend 

from Massachusetts. 

He has been a tireless leader, the 

chairman has, in trying to ensure that 

this administration does right by the 

taxpayers and that it particularly does 

right by homeowners who are facing 

foreclosure. 

Like many of my colleagues, I supported the final TARP. Yet, despite the 

debate in this Congress and despite the 

intense discussions with the administration, they failed taxpayers miserably in making sure that homeowners 

are protected, that they stay in their 

homes and that we restore stability to 

our housing and mortgage markets. 

This amendment adds and strengthens many critically important provisions. I particularly support the establishment of an Office of Minority and 

Women Inclusion. 

As my colleague from Maryland 

noted, foreclosures continue to take 

their toll on families, communities and 

States across this country. Yesterday, 

of course, RealtyTrac announced that 

the foreclosure rate was up 81 percent 

in 2008. In fact, it’s likely that, in my 

home State of Maryland, 1 in 26 homeowners will experience foreclosure this 

year. Many of those homeowners, some 

of those homeowners, live in my own 

neighborhood. 

I represent two counties leading our 

State in foreclosure numbers. If left 

unaddressed, the foreclosures will continue to increase and will touch even 

more lives. I am frustrated that this 

administration has failed and that 

foreclosures have skyrocketed. 

Yet it’s important now for us to get 

it right for the American people and 

for the taxpayer. So I support the underlying bill and the amendment. I applaud the chairman for his leadership 

to make certain that American taxpayers are protected, that we ensure 

that people stay in their homes, that 

they are protected from foreclosure, 

that we stabilize our housing market, 

and that we provide accountability for 

taxpayers and for the administration. 

Mr. GARRETT of New Jersey. I continue to reserve the balance of my 

time. 

Mr. FRANK of Massachusetts. I yield 

1 minute to the gentleman from Minnesota (Mr. ELLISON) who has been a 

fierce advocate here, particularly of 

the rights of tenants, which are often 

overlooked in this process. 

Mr. ELLISON. Let me thank Chairman FRANK for bringing this critical 

legislation to the floor. 

When Congress passed the emergency 

financial services rescue package last 

fall, we included specific provisions to 

help distressed homeowners. Unfortunately, the Bush administration decided to help out Wall Street with 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H355 

these funds while ignoring the needs of 

Main Street. 

The fact is that this piece of legislation, carefully crafted and now working with an amenable and a cooperative administration, is in a much better position to meet the needs set forth 

in the original legislation, which is to 

help homeowners. The bill requires at 

least $40 billion, but no more than $100 

billion, be used to help distressed 

homeowners. 

Finally, I am excited to report that 

there is a measure that I authored with 

other Members which provides reasonable protections for bona fide renters, 

which is something I’m very happy 

about. I am pleased to be able to support this legislation today. 

Again, Mr. Chairman, let me thank 

our very able chairman on this piece of 

legislation so we can get our country 

back and moving again. 

Mr. GARRETT of New Jersey. I continue to reserve the balance of my 

time. 

Mr. FRANK of Massachusetts. The 

gentleman should proceed because I 

will be closing for us, and I am the last 

speaker. 

The Acting CHAIR. The gentleman 

from New Jersey is recognized for 2 

minutes. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, the gentleman from Colorado said that this amendment will 

make sure of ‘‘such and such,’’ and he 

listed off a half a dozen things that the 

bill, or the amendment, will do. 

The reality is that the chairman will 

tell him this amendment will make 

sure of absolutely nothing. Why? Because this amendment will never become law. That’s not me saying that. 

That’s what the chairman has said repeatedly as well. It is not going to 

move in the House and the Senate. It is 

not going to be eventually signed by 

the President. 

Soon, we’ll be voting on legislation 

that will, in essence, allow the next administration to spend $350 billion, and 

the American taxpayer will be asking 

us: What did we authorize that $350 billion for? For there was no plan, and 

there is no plan as we speak here today 

as to what the next administration will 

be spending that $350 billion for. 

Congress should not authorize, Congress should not pass any other legislation until we have the specifics of a 

plan. We should not do so until we have 

a plan that will not pick winners and 

losers, until we have a plan that will 

protect the American taxpayer, until 

we have a plan in place and the language before us that will not bail out 

the banks that made terrible decisions. 

We should not be moving legislation 

that will appropriate $350 billion until 

we have a plan in writing specifically 

that will not bail out borrowers who 

knowingly took inappropriate loans. 

Finally, we should not spend an additional $350 billion as we pick winners 

and losers and do nothing, absolutely 

nothing, for the 90-plus percent of 

American homeowners who have done 

absolutely everything right and who 

have paid their loans and mortgages on 

time and who are now asking: Why are 

they bailing out the banks and other 

imprudent lenders? 

I encourage all of my colleagues at 

this point in time to vote ‘‘no’’ on this 

amendment that will do absolutely 

nothing to ensure these protections to 

the American taxpayers. I encourage 

all of my colleagues as well to vote 

such that we will not appropriate an 

additional $350 billion of taxpayer dollars. 

With that, I yield back the balance of 

my time. 

b 1200 

Mr. FRANK of Massachusetts. Mr. 

Chairman, it becomes clear that for 

many in the minority this is an opportunity to punish Barack Obama for the 

mistakes made by George Bush. The 

gentleman says we should have a plan. 

In fact, what they are objecting to is 

the plan. 

Here is where we differ: They have 

said, the gentleman who just spoke, 

the ranking member of the full committee, ‘‘Let’s ask the President to tell 

us what he plans to do.’’ We want to do 

it the opposite way. We want to pass 

this bill to tell the President what we 

think should be done. 

Now, it doesn’t get specific as to institutions. It shouldn’t. We don’t pick 

institutions here. We empower them 

and direct them, in some cases, to deal 

with the whole economy and with 

classes of institutions. There is no selection here by Congress of this or that 

company or even line of business. 

Secondly, the gentleman closed by 

saying why should the majority respond to the foreclosure issue. And the 

answer is that the foreclosure issue 

hurts everybody in this country. It reduces property values too radically. It 

reduces the capacity of institutions 

that have these assets that are held. It 

hurts pension funds. It hurts a whole 

range of people. It hurts people’s 

401(k)s. The whole society has suffered 

from this improvidence. 

And I would note again, in 2007, the 

majority in the House, when we became the majority, voted to ban these 

loans from being made whether the 

fault was on the part of the borrower or 

the lender. The gentleman from New 

Jersey and others condemned that, said 

we were interfering unduly with the 

market. He said the market would take 

care of it. Well, the market hasn’t 

taken care of it. The market has plummeted. 

This bill does what Members say they 

want, and I guess they won’t take 

‘‘yes’’ for an answer. It says this is 

what the House believes should be in 

the plan. And no, it does not look like 

it’s going to pass the Senate now, although Members on the other side rarely think that’s a reason for us not to 

act. But if we pass this and the President was to disappoint us—and I don’t 

expect him to; I have a great deal of 

confidence in him—and not carry this 

out, the bill will be alive in the Senate 

and will be available as an instrument 

to do it. 

Beyond that, here’s the difference. 

We passed a law, and George Bush ignored the law, as he often does. There 

will be a great contrast between a 

President who ignored the law and a 

President who agrees with us to abide 

with what the House asked him to do. 

The Acting CHAIR. The question is 

on the amendment offered by the gentleman from Massachusetts (Mr. 

FRANK). 

The question was taken; and the Acting Chair announced that the ayes appeared to have it. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I demand a recorded vote. 

The Acting CHAIR. Pursuant to 

clause 6 of rule XVIII, further proceedings on the amendment offered by 

the gentleman from Massachusetts will 

be postponed. 

AMENDMENT NO. 2 OFFERED BY MS. MATSUI

The Acting CHAIR. It is now in order 

to consider amendment No. 2 printed in 

House Report 111–3. 

Ms. MATSUI. Mr. Chairman, I offer 

an amendment. 

The Acting CHAIR. The Clerk will 

designate the amendment. 

The text of the amendment is as follows: 

Amendment No. 2 offered by Ms. MATSUI: 

Page 32, after line 19 insert the following 

new section (and redesignate the subsequent 

section and conform the table of contents accordingly): 

SEC. 206. FORECLOSURE MORATORIUM RECOMMENDATION. 

(a) FORECLOSURE DEFERMENT.—It is the 

sense of the Congress that any institution 

which becomes an assisted institution on or 

after the date of the enactment of this Act 

should not initiate, or allow to continue, a 

foreclosure proceeding or a foreclosure sale 

on any with respect to any principal homeowner mortgage, until the earliest of the following: 

(1) The date by which the comprehensive 

plan to prevent and mitigate foreclosures 

has been developed by the Secretary and the 

Federal Deposit Insurance Corporation and 

approved by the Financial Stability Oversight Board under section 201 and become 

fully operational. 

(2) The date by which the systematic foreclosure prevention and mortgage modification plan has been established by the Secretary in accordance with section 204 and become fully operational. 

(3) The end of the 9-month period beginning on the date of the enactment of this 

Act. 

(b) FHA-REGULATED LOAN MODIFICATION

AGREEMENTS.—If an assisted institution to 

which subsection (a) applies reaches a loan 

modification agreement with a homeowner 

under the auspices of the Federal Housing 

Administration before any plan referred to 

in paragraph (1) or (2) of such subsection 

takes effect, subsection (a) shall cease to 

apply to such institution as of the effective 

date of the loan modification agreement. 

(c) DUTY OF CONSUMER TO MAINTAIN PROPERTY.—Any homeowner for whose benefit 

any foreclosure proceeding or sale is barred 

under subsection (a) from being instituted, 

continued , or consummated with respect to 

any homeowner mortgage may not, with respect to any property securing such mortgage, destroy, damage, or impair such property, allow the property to deteriorate, or 

commit waste on the property. 


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H356 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

(d) DUTY OF CONSUMER TO RESPOND TO REASONABLE INQUIRIES.—Any homeowner for 

whose benefit any foreclosure proceeding or 

sale is barred under subsection (a) from 

being instituted, continued, or consummated 

with respect to any homeowner mortgage 

shall respond to reasonable inquiries from a 

creditor or servicer during the period during 

which such foreclosure proceeding or sale is 

barred. 

The Acting CHAIR. Pursuant to 

House Resolution 62, the gentlewoman 

from California (Ms. MATSUI) and a 

Member opposed each will control 5 

minutes. 

The Chair recognizes the gentlewoman from California. 

Ms. MATSUI. Mr. Chairman, I rise 

today to offer an amendment, along 

with Representative KATHY CASTOR, to 

help homeowners across our country. 

Our amendment expresses the sense of 

the Congress that financial institutions who receive future TARP funds 

should not foreclose on any principal 

homeowner until the new loan modification program in the bill is implemented and deemed fully operational. 

Mr. Chairman, the foreclosure crisis 

is the root cause of our current economic crisis. Sadly, there is no end in 

sight. 

Right now, more than 8 million 

homeowners are expected to face foreclosure over the next 4 years. That is 

one in six mortgages in the United 

States. The rising unemployment will 

cause even more Americans to face 

foreclosure. 

California, and in particular my 

home district of Sacramento, has been 

greatly impacted by the foreclosure 

crisis. I’ve hosted foreclosure workshops. I’ve seen the hardships and 

looks of desperation on so many faces 

not knowing if they will lose their 

home. 

At one workshop, I was approached 

by a woman that had a loan through 

one of the financial institutions that 

had taken TARP funds. When we met, 

she had been talking to the bank’s representatives for a few months to no 

avail. She was one step from losing her 

home. It took her dozens of phone calls 

and letters over many months for her 

and the bank to settle on a new loan. I 

worry that without a true moratorium 

on foreclosures, people like her will not 

be as lucky. 

Similar situations are occurring 

throughout the country. 

Congress must use all of our available resources to keep Americans in 

their homes. The bill we’re considering 

today calls for the strongest foreclosure prevention program to date. It 

requires the Treasury and the FDIC to 

develop a comprehensive systemic loan 

modification program by April 1. However, that is more than 3 months away, 

and the plan is estimated to take an 

additional month or two to become 

operational. In the meantime, thousands of homeowners could be foreclosed upon. 

Our goal is to help Main Street. It 

would be devastating if homeowners 

were foreclosed on before they had an 

opportunity to qualify for the new loan 

modification program under this bill. 

That is why I have offered my 

amendment with Congresswoman CASTOR that calls on the mortgage industry to implement a temporary timeout 

on foreclosures. 

Our constituents and businesses need 

breathing room to find solutions to 

help Americans stay in their home. I’ve 

been calling for a moratorium on foreclosures over the last 8 months. Last 

May, I introduced the Home Retention 

and Economic Stabilization Act that 

calls for a 9-month moratorium on 

foreclosures for responsible homeowners. 

Yesterday, I reintroduced the same 

bill, along with Senator MENENDEZ in 

the Senate. I will continue to actively 

pursue a meaningful moratorium on 

foreclosures in the coming days and 

months. 

Until then, a timeout in foreclosures 

is a necessary stop-gap measure that 

will give Congress, regulators, and 

homeowners some breathing room 

while everyone works to craft a fair, 

sensible, and lasting solution to the 

foreclosure crisis. I hope that my colleagues will join me in supporting this 

amendment. 

I reserve the remainder of my time. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I claim the time in opposition. 

The Acting CHAIR. The gentleman 

from New Jersey is recognized for 5 

minutes. 

Mr. GARRETT of New Jersey. I yield 

myself 2 minutes. 

First of all, I begin by saying I appreciate the sponsor’s intent behind the 

amendment. She and I join in the 

thought that we need to do all that we 

possibly can to deal with the terrible 

situation of the economy right now, 

and she is right that the subprime 

issue and the foreclosure issue is at the 

heart of the housing prices and the 

heart of the economic crisis that we 

have right now. 

The question is, what do we do about 

it? And the question is, what do we do 

about it in a manner to help both those 

people who have been paying on time 

and also help those people who are perhaps in a difficult situation? 

The amendment, though, as it’s currently written, may have an unintended effect. If you effectively allow 

for an extended period of moratorium 

on foreclosure, that may actually have 

the potential of encouraging people 

from actually going to the bank to try 

to work things out. Or maybe it’s not 

encouraging, not just encouraging 

them enough to do what is appropriate 

during this period of time. 

I would ask the gentlelady a question, though. 

In the form of the amendment, besides the potential policy problems, it 

would appear that the amendment is 

flawed technically, and for that reason 

unworkable. If I look at page 2—and if 

she would refer to that—it’s set up not 

as a sense of Congress, which, I believe, 

is the intention behind this bill, but 

rather as language which would have 

the force of law. Page 2, section C, 

‘‘duty of the consumer to maintain 

property.’’ It goes on to say that any 

homeowner whose benefit in foreclosure proceeding or sale is ‘‘barred 

under subsection A,’’ and it makes references to other sections of the law. 

The question is, how can a sense of 

Congress, therefore, actually have the 

effect of law? 

So is this an amendment that maybe 

has the best of intentions but was 

drafted in a manner that potentially 

would have the effect of law even 

though it is not a law, it is merely a 

sense of Congress? 

I would ask, then, in light of the fact 

that there is both the policy reason 

that we may agree on but have some 

problems with but is technically 

flawed, I would ask that the sponsor 

would consider withdrawing the 

amendment at this time. 

Ms. MATSUI. Mr. Chairman, I yield 1 

minute to the chairman of the committee. 

Mr. FRANK of Massachusetts. I’ll 

tell you what it’s written to say. We 

believe that it is entirely a sense of 

Congress but understand the terrible 

harm that would come if it wasn’t. Of 

course, the gentleman says it’s not 

going to become law, so why he’s so 

concerned about it, I don’t know. 

But if it did, here is what it would do: 

This terrible section, here’s what it 

does. It says that the borrower can’t 

destroy the property. We are in danger 

of being too strong in insisting on protecting the lender. The language to 

which he objects—which he quite understandably didn’t read—says ‘‘the 

homeowner may not, with respect to 

any property, destroy, damage, or impair such property, allow it to deteriorate or commit waste.’’ 

So it may be that we have unduly argued that the borrower pending this 

who’s got a foreclosure shouldn’t trash 

the property. 

I will plead guilty to perhaps erring 

on the side of ambiguity in imposing 

on the borrower an obligation not to 

trash the property. 

Mr. GARRETT of New Jersey. I will 

yield myself just 1 more minute. 

I can simply come to the floor and 

speak to what the experts have testified in committee with problems of 

language of this nature. One is, as I’ve 

already stated, experts have said that 

language like this would encourage the 

situation for borrowers to not do the 

right thing, that is, to call up their 

lenders and say, ‘‘I have a problem, and 

I want to engage in negotiations to try 

to work out the loan.’’ 

We know this is an ongoing problem, 

and that’s why there’s so many advertisements and like on TV right now to 

encourage people to do the right thing. 

This language would be counterproductive in that, so the experts say. 

And secondly, the lenders have come 

to the committee and testified before 

our committee that the longer the borrower remains delinquent, the less 


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January 15, 2009 CONGRESSIONAL RECORD — HOUSE H357 

likely he or she will be able to cure the 

delinquency and avoid foreclosure. 

All this is really doing is prolonging 

what should be dealt with today. It’s 

never to be put off to tomorrow what 

we should deal with today, and this 

language, unfortunately, does just 

that. 

With that, I reserve. 

Ms. MATSUI. Mr. Chairman, how 

much time do I have remaining? 

The Acting CHAIR. The gentlewoman 

from California has 1 minute remaining. The gentleman from New Jersey 

has 2 minutes remaining. 

Ms. MATSUI. Mr. Chairman, I would 

like to yield 1 minute to the gentlelady 

from Florida (Ms. CASTOR). 

Ms. CASTOR of Florida. Mr. Chairman, I rise in support of the MatsuiCastor amendment. Congresswoman 

MATSUI has summarized the amendment very well, and I appreciate her 

leadership. 

We all agree the housing crisis, foreclosures, and the related disintegration 

of value in our neighborhoods must be 

addressed. We know the statistics very 

well about the extent of the problem. 

And in Florida, we have the second 

highest rate of foreclosures. 

I did not support the $350 billion first 

tranche of the TARP because I had no 

confidence in the Bush administration 

that they were going to help homeowners and prevent foreclosures. I 

hoped and prayed that I was wrong, but 

unfortunately, that has been borne out. 

I’m now planning my fourth foreclosure workshop, and to the contrary, 

rather than discouraging homeowners, 

here is what I found. They cannot get 

the loss mitigation personnel on the 

phone. They want to work it out. They 

want a little bit of breathing room. 

Now where it’s a vicious cycle because 

they’ve lost their job, they’re looking 

for their second part-time job, they 

need a little breathing room that this 

amendment will provide. 

They’re not asking for a bailout. 

They’re not asking for billions of dollars that have gone to the financial institutions. They want a little bit of a 

break. 

Mr. GARRETT of New Jersey. Mr. 

Chairman, I yield myself 1 minute. 

I appreciate the gentlelady’s comments. We have done similar programs 

such as that in talking to the people in 

the district as far as working out, what 

have you. 

Again, the experts—this is the third 

point I could have raised before—the 

experts also tell us that a foreclosure 

moratorium, which in essence is what 

we’re talking about here, will have the 

unintended side effect also of raising 

up the cost of mortgages in the future. 

So what this means is for that individual who may be able to work out a 

deal today because mortgage rates are, 

as we know, at historic low rates, if 

this has the effect of law—which is actually how the language is situated 

here—and the moratorium were to 

occur and mortgage rates were to go 

up, by the time they actually sat down 

with that facilitator at the bank and 

worked things out, they would find 

that the mortgage rates unfortunately, 

due to the economies of the nature of 

this bill, the rates are higher and they 

are at a disadvantaged situation than 

they would be today. 

Let’s have the people encouraged to 

work out their mortgages today. Work 

it out with their banks. I’m sure both 

sides of the aisle want to use our offices to facilitate those communications as well when people have problems contacting their banks. I know 

my office works, and I’m sure your office does as well to try to get that contact with them. 

And let’s do that to get it done today 

and not put it off until tomorrow. 

The Acting CHAIR. The gentleman 

from New Jersey has 1 minute remaining. 

Does he yield that minute back? 

Mr. GARRETT of New Jersey. I yield 

back. 

The Acting CHAIR. All time for debate has expired. 

The question is on the amendment 

offered by the gentlewoman from California (Ms. MATSUI). 

The amendment was agreed to. 

b 1215 

AMENDMENT NO. 3 OFFERED BY MR. HENSARLING

The Acting CHAIR. It is now in order 

to consider amendment No. 3 printed in 

House Report 111–3. 

Mr. HENSARLING. Mr. Chairman, I 

have an amendment at the desk made 

in order by the rule. 

The Acting CHAIR. The Clerk will 

designate the amendment. 

The text of the amendment is as follows: 

Amendment No. 3 offered by Mr. 

HENSARLING: 

Page 11, strike lines 1 through 7. 

The Acting CHAIR. Pursuant to 

House Resolution 62, the gentleman 

from Texas (Mr. HENSARLING) and a 

Member opposed each will control 5 

minutes. 

The Chair recognizes the gentleman 

from Texas. 

Mr. HENSARLING. Mr. Chairman, 

I’ve listened carefully to the previous 

speaker and comments from our distinguished chairman of the Financial 

Services Committee. It’s quite clear to 

me that, come early next week, they’re 

certainly going to miss President Bush. 

I don’t know who they’re going to start 

to blame every problem in the universe 

on come next week. 

I didn’t come here to engage in the 

blame game, but I certainly can’t let 

the chairman’s comment pass as he 

said something to the effect that President Obama is inheriting a problem 

created by President Bush. Well, as the 

chairman knows, there’s a lot of underlying causes to the predicament we 

find ourselves in and I’m happy to debate them at a later time, but I would 

also note that the economic policy of 

America is determined substantially by 

this Congress, and the economy was 

doing just fine until the Democrats 

took over Congress. 

Now, Mr. Chairman, as I look at the 

bill that is before us, again, there are 

certain areas where I agree with our 

distinguished chairman, more accountability and more transparency tends to 

be a good thing. But Mr. Chairman, 

there is a provision in here though that 

says the ‘‘Secretary may require an observer in the board rooms for institutions that receive TARP money.’’ Now, 

Mr. Chairman, I’ve been around here 

for a few years and although I have no 

doubt that everybody is well-meaning 

in the legislation that they bring to 

the floor, my fear is that today’s 

‘‘may’’ shall turn out to be tomorrow’s 

‘‘shall.’’ And my fear is that today’s 

‘‘observer’’ will become tomorrow’s 

‘‘suggester’’ and next week will become 

‘‘the mandator.’’ I think this is a terrible, terrible precedent. I think it bespeaks of industrial policy run by the 

government. I think it puts, again, one 

more of those slippery stones on that 

slippery slope to socialism. 

And Mr. Chairman, what are they observing? I mean, what specific policies 

have they been given to undertake by 

this United States Congress? What are 

they observing? And what I observe, 

Mr. Chairman, is that my reading of 

the legislation says that any ‘‘assisted 

institution’’ as defined by any institution that receives ‘‘any direct or indirect recipient of assistance or benefit 

from TARP.’’ And so I hope that the 

distinguished chairman of the Financial Services Committee, on his time, 

will enlighten us on his interpretation 

of how he wrote the underlying bill. 

Because does this mean that any business borrowing money from a bank 

under TARP will now be subject to an 

observer of the Federal Government? 

Does this mean anyone who has an insurance policy with AIG is now subject 

to an observer from the Federal Government? 

Since we have express language in 

here dealing with the auto industry, I 

hope the chairman will answer the 

question, does this mean that the Secretary of the Treasury can place an observer in every UAW union hall across 

the Nation if they receive monies 

under TARP? 

Now, again, I have no doubt that, although I disagree with the chairman on 

a number of issues, I know that his 

purpose is a noble one. But I also know, 

Mr. Chairman, that when things begin 

in Washington, they don’t always end 

the way that they started. And so I 

would question, number one—you 

know, we were told at one time Social 

Security would be solvent forever; well, 

it’s not. We were told that TRIA was a 

temporary program; well, it’s not. We 

were told Fannie and Freddie would 

never be bailed out. And I’m sure those 

who said it meant it at the time, but 

circumstances change, they were bailed 

out. We were told that once House 

Democrats took over control, that they 

would rein in spending and balance the 

budget, and now we have the largest 

deficit in American history. 

So I’m fearful that this provision will 

grow into something that maybe it’s 


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H358 CONGRESSIONAL RECORD — HOUSE January 15, 2009 

not intended, not something that I 

would appreciate. And I’m also very curious why so many other accountability provisions dealing with home 

borrowers have seemingly fallen out of 

the bill, including one that the chairman agreed to earlier—I believe it was 

in April in the markup of the Hope for 

Homeowners program—when he accepted the amendment now, but seemingly 

is taking it out of the bill at this point. 

Mr. Chairman, I reserve the balance 

of my time. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I rise to claim the time in 

opposition. 

The Acting CHAIR. The gentleman 

from Massachusetts is recognized 

for—— 

Mr. FRANK of Massachusetts. How 

much time did the gentleman consume? 

The Acting CHAIR. 5 minutes. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I am struck by the implicit 

endorsement of this amendment that I 

received from my friend from Texas. 

He opposed the amendment by talking 

not about what it does, but what might 

happen later on in a way very different 

from it. He did not appear to have 

much objection to the amendment 

itself. He is talking about, if we do 

this, it might lead to something else. 

Well, at that point object to something 

else. 

The argument that I’m against this 

because it will lead to something else 

almost always comes from Members 

who don’t like the provision under debate, feel uncomfortable in explaining 

why, so they, therefore, debate a straw 

man. Yes, there were Members who 

wanted it to be mandatory that we put 

someone on the board of directors; I 

thought that was inappropriate. I don’t 

think a Federal official with the political pressures to which he or she will 

be suffered should be voting as a member of the board of directors. There 

were others who wanted to require an 

observer in every case. We came to 

what I think is a very moderate approach, to give the Secretary of the 

Treasury the discretionary authority 

to do it. There may be some cases 

where it is important, some where you 

could forgo it. 

The fact that the budget deficit went 

up does not seem to be an argument 

against giving the Secretary of the 

Treasury a discretionary observer at 

institutions that receive any help 

under the TARP. And the fact that the 

gentleman would cite the budget deficit and terrorism risk insurance and 

what happened to them as reasons not 

to deal with something entirely different because as they change this 

might change does not meet my logical 

standards. 

Now, I will say, by the way, with terrorism risk insurance, as an advocate 

of it—along with the former chairman 

of the committee, Mr. Oxley—I never 

said that it would be temporary. I believe that there is, in fact, a public responsibility to deal with terrorism, and 

I didn’t feel it was going to go away. 

But in any case, it’s an irrelevancy. 

Here’s the proposal: To give the Secretary of the Treasury discretionary 

authority to send an observer with the 

right to sit in on meetings if he believes that it is justified in the particular set of circumstances. It’s not a 

voting member, and it’s not mandatory 

in all cases. I find it hard to see what 

harm it would do; so, apparently, does 

my friend from Texas. Because if he 

were clear about the harm that would 

do, he would have documented that. Instead, he talked not about the harm 

that might come from this amendment, 

but from harm that might come at a 

future date when something very different from this amendment was put 

into effect. By the way, this could not 

grow in an evolutionary fashion; it 

would take a vote of the Congress to 

require this. This would not be something that happens accidentally; it 

would be something that would take a 

conscious decision. 

What we are saying here is we want 

more accountability. We are saying 

that we have some confidence in the 

Obama administration. And again, we 

are at the central issue here. Many of 

us believe that President Bush’s administration did not use this authority 

as well as they should have. By the 

way, I agree with the administration 

that we are still better off than they 

would have been if they had not had 

the authority at all, but we thought it 

could have been used even better. The 

central question we will be addressing 

next week is; do we deny to the new 

President tools that the old President 

had that many think he misused? 

This bill is a subordinate, it says 

this; should we tell the new President 

that, while we in the House believe he 

should have the opportunity to deploy 

these tools, we have very clear ideas 

about what should be done about it? 

And we have done several hearings. 

This has been a very participatory 

process. I was pleased with the gentleman from California (Mr. CAMPBELL) 

yesterday, the gentleman from Illinois 

(Mr. SCHOCK) today, both talked about 

things that are positive in this. 

We have opened ourselves up and 

have accepted a large number of proposals from Members on both sides. 

There will be an amendment offered 

later by the gentleman from Arizona 

(Mr. FLAKE) that I intend to vote for 

and I hope the House will overwhelmingly adopt. So we are trying to move 

forward. 

If Members want to debate what we 

are doing or not doing, that’s reasonable; but let me just close by saying 

here’s where we are: We are proposing 

that the Secretary of the Treasury in 

the new administration have a discretionary right to send an observer to recipients of TARP funds where he 

thinks that would be appropriate. The 

gentleman from Texas says don’t do 

that because TRIA became permanent, 

and we have a bigger budget deficit. 

And I guess hair doesn’t grow on certain parts of the body. None of these 

have anything to do with the issue 

under consideration. And the absence 

of arguments against this, what the 

amendment proposes, gives me a sense 

of confidence that it’s really pretty 

hard to criticize. 

Mr. Chairman, I yield back the balance of my time. 

Mr. HENSARLING. Perhaps the 

chairman did not hear all of my remarks—— 

Mr. FRANK of Massachusetts. Parliamentary inquiry. 

The Acting CHAIR. 

Does the gentleman from Texas yield 

for a parliamentary inquiry? 

Mr. HENSARLING. I do not. 

Mr. FRANK of Massachusetts. Point 

of order, Mr. Chairman. 

The Acting CHAIR. The gentleman 

from Massachusetts will state his point 

of order. 

Mr. FRANK of Massachusetts. I was 

told that the gentleman’s time had expired. I have a right to close. I waived 

that because I was told that the gentleman had consumed 5 minutes when I 

asked. I thought that was all there was 

on the amendment. 

The Acting CHAIR. No. The gentleman from Texas had 30 seconds remaining. The Chair understood the 

question to be—or at least the answer 

provided was—how much time the gentleman from Massachusetts had, which 

was 5 minutes. 

Mr. FRANK of Massachusetts. Oh. I 

apologize for my diction because I 

thought that I had asked how much 

time he had consumed. 

The Acting CHAIR. And the Chair 

apologies for any misunderstanding. 

The gentleman from Texas has 30 seconds remaining to close. 

Mr. HENSARLING. Again, perhaps 

the chairman of the committee missed 

some of my remarks. My concern is the 

way that this is drafted is we are giving the Secretary of Treasury the 

power to put an observer into every 

small business in America who borrows 

money from a community bank that 

gets TARP funds. That isn’t what 

might happen, that is what does happen. And when the chairman says he’s 

concerned about accountability, I wonder why doesn’t that go to the borrower side. Why is he striking that portion of the bill that has borrower certification that they did not intentionally default on their mortgage? 

Why does this bill strike the fine or imprisonment for borrowers who make 

willful, false statements? Why does he 

strike the requirement of those who 

are found to have committed mortgage 

fraud, that they have to expunge any 

direct financial benefit? So it’s kind of 

selective concern, I would say. 

The Acting CHAIR. The time of the 

gentleman has expired. 

Mr. FRANK of Massachusetts. Parliamentary inquiry, Mr. Chairman. 

The Acting CHAIR. The gentleman 

from Massachusetts will state his parliamentary inquiry. 

Mr. FRANK of Massachusetts. Do I 

have any time remaining? 


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The Acting CHAIR. The gentleman 

from Massachusetts yielded back the 

balance of his time. 

Mr. FRANK of Massachusetts. Mr. 

Chairman, I did that, but I did that because I had asked—as I think the transcript would show—how much time he 

had consumed. We apparently had a 

miscommunication. So I would ask 

unanimous consent that any remaining 

time be allowed. 

The Acting CHAIR. Is there objection 

to the request of the gentleman from 

Massachusetts? 

There was no objection. 

The Acting CHAIR. The gentleman 

from Massachusetts is recognized for 

the 10 seconds remaining before he 

yielded back the balance of his time. 

Mr. FRANK of Massachusetts. I will 

use the 10 seconds to say that the gentleman from Texas said ‘‘may’’ may become ‘‘shall.’’ ‘‘May’’ does not become 

‘‘shall’’ without our voting. 

The Acting CHAIR. The question is 

on the amendment offered by the gentleman from Texas (Mr. HENSARLING). 

The question was taken; and the Acting Chair announced that the noes appeared to have it. 

Mr. HENSARLING. Mr. Chairman, I 

demand a recorded vote. 

The Acting CHAIR. Pursuant to 

clause 6 of rule XVIII, further proceedings on the amendment offered by 

the gentleman from Texas will be postponed. 

The Acting CHAIR. The Committee 

will rise informally. 

The SPEAKER pro tempore (Mr. HIGGINS) assumed the chair. 

f 

MESSAGE FROM THE PRESIDENT 

A message in writing from the President of the United States was communicated to the House by Ms. Wanda 

Evans, one of his secretaries. 

The SPEAKER pro tempore. The 

Committee will resume its sitting. 

f 

TARP REFORM AND 

ACCOUNTABILITY ACT OF 2009 

The Committee resumed its sitting. 

AMENDMENT NO. 4 OFFERED BY MR. HOLT

The CHAIR. It is now in order to consider amendment No. 4 printed in 

House Report 111–3. 

Mr. HOLT. Mr. Chairman, I have an 

amendment at the desk. 

The CHAIR. The Clerk will designate 

the amendment. 

The text of the amendment is as follows: 

Amendment No. 4 offered by Mr. HOLT: 

Page 19, after line 20, insert the following: 

SEC. 108. TREASURY FACILITATED AUCTION. 

Section 113(b) of the Emergency Economic 

Stabilization Act of 2008 (12 U.S.C. 5223(b)) is 

amended to read as follows: 

‘‘(b) USE OF MARKET MECHANISMS.— 

‘‘(1) IN GENERAL.—In making purchases 

under this Act, the Secretary shall— 

‘‘(A) make such purchases at the lowest 

price that the Secretary determines to be 

consistent with the purposes of this Act; and 

‘‘(B) maximize the efficiency of the use of 

taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate. 

‘‘(2) AUCTION FACILITATION.— 

‘‘(A) IN GENERAL.—The Secretary shall, in 

coordination with institutions that volunteer to participate, and not using any funds 

under this title for purchases, facilitate an 

auction of troubled assets owned by such institutions to third party purchasers. 

‘‘(B) REPORT.—If the auction described in 

subparagraph (A) does not take place within 

the 3 month period following the date of the 

enactment of the TARP Reform and Accountability Act of 2009, the Secretary shall 

issue a report to the Congress stating— 

‘‘(i) why such auction has not taken place; 

and 

‘‘(ii) by what mechanism the Secretary 

feels that troubled assets could most expeditiously be valued and liquidated.’’. 

The CHAIR. Pursuant to House Resolution 62, the gentleman from New Jersey (Mr. HOLT) and a Member opposed 

each will control 5 minutes. 

The Chair recognizes the gentleman 

from New Jersey. 

Mr. HOLT. Mr. Chairman, my amendment is simple and straightforward. 

One of the difficulties with the troubled assets is assigning values to them. 

One way of doing that is through auctions. This amendment encourages—in 

fact, directs—the Secretary, without 

using taxpayer funds, to facilitate an 

auction. It will allow the TARP assets 

to be valued and should help to liquidate and dispose of those assets in 

the way that was intended. 

b 1230 

Now, I should say that this amendment, although approved by the Rules 

Committee, is also included in its entirety in the manager’s amendment as 

accepted. 

MODIFICATION TO AMENDMENT NO. 4 OFFERED

BY MR. HOLT

Mr. HOLT. Therefore, I ask unanimous consent to modify the amendment before us in a manner that is before you at the desk. 

The CHAIR. The Clerk will report the 

modification. 

The Clerk read as follows: 

Modification to amendment No. 4 offered 

by Mr. HOLT: 

Amendment No. 4 is modified to read as 

follows: 

Page 7, line 18, strike the quotation marks 

and the last period. 

Page 7, after line 18, insert the following 

new subsection: 

‘‘(h) RECONSIDERATION.— 

‘‘(1) Any institution that has submitted, 

pursuant to procedures established by the 

Secretary and in consultation with the appropriate Federal banking agencies, an application for assistance under this title that 

has been denied by the Secretary, may seek 

reconsideration of its application from the 

Financial Stability Oversight Board within 

30 days. 

‘‘(2) The Oversight Board shall promptly 

review such requests for reconsideration and 

provide its findings and conclusions to the 

Secretary within 30 days after receipt of 

such a request. 

‘‘(3) Pendency of a request for reconsideration pursuant to this subsection shall not in 

any way impede or stay the ability of the appropriate Federal banking agencies from 

taking any supervisory or other action necessary with respect to the safety and soundness of the institution. 

Page 63, line 15, strike ‘‘(g)’’ and insert 

‘‘(i)’’. 

Mr. HOLT (during the reading). Mr. 

Chairman, I ask that the amendment 

be considered as read. 

The CHAIR. Is there objection to the 

request of the gentleman from New 

Jersey? 

There was no objection. 

The CHAIR. Is there objection to 

modifying the amendment? 

Mr. GARRETT of New Jersey. Mr. 

Chairman, reserving the right to object, I appreciate the gentleman’s initial amendment, and I think I appreciate the gentleman’s intention of the 

subsequent amendment. 

Can the gentleman explain the reason why the gentleman is on the floor 

with the subsequent amendment as opposed to having proposed that amendment through the regular committee 

process? 

Mr. HOLT. Will the gentleman yield? 

Mr. GARRETT of New Jersey. I yield 

to the gentleman from New Jersey. 

Mr. HOLT. Yes, I can explain. I submitted both of these amendments for 

committee consideration and for Rules 

Committee consideration. It was my 

understanding that they were both included in the manager’s amendment, 

and, in fact, the chairman tells me that 

it was his intention to include both of 

them in the manager’s amendment. 

Only one of them was actually included 

in the manager’s amendment. So I’m 

asking unanimous consent to modify 

the one amendment that is already in 

the manager’s amendment but also approved for floor consideration to represent the one that was not included in 

the manager’s amendment but should 

have been. 

Mr. GARRETT of New Jersey. Reclaiming my time, wasn’t your amendment, I’m told, dated, though, just this 

morning? 

Mr. HOLT. If the Member who controls the floor would yield to Chairman 

FRANK, I think we can get a better explanation. 

Mr. GARRETT of New Jersey. I will 

let the chairman speak during his 

time. So you’re not aware, though? 

Reclaiming my time, I’m looking at 

it as January 15, 2009, 9:59 a.m., which 

would have been this morning. 

Mr. HOLT. That is because I learned 

only this morning that it was not included in the manager’s amendment, as 

I had understood and been led to believe, and, therefore, I typed it up so 

that it could be considered on the floor. 

Mr. GARRETT of New Jersey. Thank 

you. 

At this point, Mr. Chairman, I object 

to the modification. 

The CHAIR. The gentleman from 

New Jersey (Mr. HOLT) is recognized on 

the original amendment. 

Mr. FRANK of Massachusetts. Would 

the gentleman yield to me? 

Mr. HOLT. I yield to the chairman. 

Mr. FRANK of Massachusetts. I just 

want to express my disappointment at 

this lack of comity. I had the explanation. There was an error that was 


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