I 

111TH CONGRESS 

1ST SESSION H. R. 3232 

To amend the Emergency Economic Stabilization Act of 2008 to require 

certain warrants held by the Secretary of the Treasury to be sold at 

public auction upon the repayment of the associated assistance provided 

under the Troubled Asset Relief Program. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 16, 2009 

Ms. KILROY (for herself, Mr. SHERMAN, Ms. SUTTON, Ms. FUDGE, Mr. 

BOCCIERI, Ms. SPEIER, and Mr. GRAYSON) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend the Emergency Economic Stabilization Act of 

2008 to require certain warrants held by the Secretary 

of the Treasury to be sold at public auction upon the 

repayment of the associated assistance provided under 

the Troubled Asset Relief Program. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Provide a Return on 

5 Financial Investment for the Taxpayer Act of 2009’’ or 

6 as the ‘‘PROFIT Act of 2009’’. 


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1 SEC. 2. PURPOSE. 

2 The purpose of this Act is to maximize the American 

3 taxpayers’ return on its investment in troubled financial 

4 institutions through the Troubled Asset Relief Program 

5 (TARP). 

6 SEC. 3. FINDINGS. 

7 The Congress finds the following: 

8 (1) During the wake of the economic crisis in 

9 the fall of 2008, American taxpayers assumed an 

10 enormous financial risk when they bailed out trou11 bled financial institutions. 

12 (2) To compensate for the risk assumed by 

13 American taxpayers, banks that received TARP 

14 funds were required to give the Department of 

15 Treasury warrants for the future purchase of com16 mon shares, allowing American taxpayers an oppor17 tunity to profit from the possible upside of their ini18 tial equity investment. 

19 (3) The price at which the warrants are sold is 

20 critical as the warrants represent the only oppor21 tunity for American taxpayers to benefit from the 

22 risk they assumed in bailing out troubled financial 

23 institutions. 

24 (4) However, in a July 10, 2009, oversight re25 port, the TARP Congressional Oversight Panel 

26 (COP) found that the process used by the DepartVerDate Nov 24 2008 06:28 Jul 17, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3232.IH H3232

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•HR 3232 IH

1 ment of Treasury to allow the initial 11 banks to re2 purchase their warrants did so at just 66 percent of 

3 the actual value of the warrants. If these warrants 

4 had been sold for their current market value, Amer5 ican taxpayers would have recovered $10 million 

6 more. 

7 (5) Furthermore, COP found that if the De8 partment of Treasury uses this same approach to re9 purchase all remaining outstanding warrants, the 

10 shortfall to taxpayers could be as much as $2.7 bil11 lion. 

12 (6) Finally, COP found that the Department of 

13 Treasury would be more likely to maximize taxpayer 

14 returns if it sold the warrants through an open, pub15 lic auction, as an auction would allow competitive 

16 market pressures in the bidding process to push bids 

17 higher, thus maximizing the American taxpayers 

18 overall return on its initial investment. 

19 SEC. 4. SALE OF WARRANTS THROUGH A PUBLIC AUCTION. 

20 Section 111 of the Emergency Economic Stabilization 

21 Act of 2008 (12 U.S.C. 5221) is amended— 

22 (1) by redesignating subsection (h) as sub23 section (i); and 

24 (2) by inserting after subsection (g) the fol25 lowing new subsection: 


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1 ‘‘(h) SALE OF WARRANTS THROUGH A PUBLIC AUC2 TION.— 

3 ‘‘(1) IN GENERAL.—Each time a financial insti4 tution makes a repayment of assistance provided 

5 under this title, the Secretary shall sell warrants as6 sociated with such assistance through a public auc7 tion. 

8 ‘‘(2) EXCEPTION.—The requirement under 

9 paragraph (1) shall not apply to warrants associated 

10 with a repayment made by a financial institution 

11 that has received less than $250,000,000 of assist12 ance under this title.’’. 

Æ 


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