I 
111TH CONGRESS 
1ST SESSION H. R. 2666 
To require the Federal Trade Commission to conduct a rulemaking proceeding 
with respect to mortgage foreclosure rescue and loan modification serv-
ices, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 2, 2009 
Ms. MATSUI (for herself and Ms. MOORE of Wisconsin) introduced the fol-
lowing bill; which was referred to the Committee on Financial Services, 
and in addition to the Committee on Energy and Commerce, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To require the Federal Trade Commission to conduct a rule-
making proceeding with respect to mortgage foreclosure 
rescue and loan modification services, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Mortgage Foreclosure 
Rescue and Loan Modification Services Fraud Prevention 
Act of 2009’’. 
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SEC. 2. FTC RULEMAKING AUTHORITY MORTGAGE FORE-
CLOSURE RESCUE AND LOAN MODIFICATION 
SERVICES. 
(a) RULEMAKING.— 
(1) IN GENERAL.—The Federal Trade Commis-
sion shall conduct a rulemaking proceeding, begin-
ning no later than 90 days after the date of the en-
actment of this Act, with respect to mortgage fore-
closure rescue and loan modification services, in ac-
cordance with section 553 of title 5, United States 
Code. The rulemaking shall include the requirements 
set forth in paragraph (4) below. 
(2) EXCLUSION.—A rule described in para-
graph (1) shall not apply to an entity that is not 
subject to enforcement by the Commission under the 
Federal Trade Commission Act. 
(3) ENFORCEMENT.— 
(A) VIOLATIONS.—Any violation of a rule 
prescribed under this subsection shall be treat-
ed as a violation of a rule under section 18 of 
the Federal Trade Commission Act (15 U.S.C. 
57a) regarding unfair or deceptive acts or prac-
tices. 
(B) POWERS AND MANNER OF ENFORCE-
MENT.—The Federal Trade Commission shall 
enforce any rule prescribed under this sub-
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section in the same manner, by the same 
means, and with the same jurisdiction, powers, 
and duties as though all applicable terms and 
provisions of the Federal Trade Commission 
Act were incorporated into and made part of 
this section. 
(4) RULE REQUIREMENTS.—The Federal Trade 
Commission shall include in the rule prescribed 
under this subsection the following: 
(A) A requirement that any mortgage fore-
closure rescue or loan modification service pro-
vided to a homeowner related to the foreclosure 
of residential real property contain a written 
contract that contains clear and prominent dis-
closures regarding the nature of the contract, 
the services to be provided and results to be 
achieved, and the total amount and terms of 
compensation. 
(B) A requirement that any contract re-
ferred to in subparagraph (A) contain a clearly 
and prominently disclosed right for the home-
owner to cancel within a set number of business 
days as determined by the Federal Trade Com-
mission with no penalty or obligation. 
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(C) A requirement that prohibits or re-
stricts mortgage foreclosure rescue and loan 
modification services from requesting or receiv-
ing any funds until any such services have been 
fully performed and results have been achieved 
and the services and results have been docu-
mented to the consumer. 
(D) Other prohibitions or restrictions on 
mortgage foreclosure rescue and loan modifica-
tion services that are unfair or deceptive acts or 
practices. 
(5) EXEMPTION.—The Commission shall have 
the authority to exempt entities from the require-
ments of the rule that it issues to implement this 
Act, if it determines that the inclusion of such enti-
ties in the rule is not necessary to prevent or deter 
consumer injury. 
(6) NO
PREEMPTION.—No rule prescribed 
under this subsection may be construed as pre-
empting any provision of the law of any State. 
(b) ENFORCEMENT
BY STATE ATTORNEYS GEN-
ERAL.— 
(1) IN GENERAL.—Except as provided in para-
graph (6), in any case in which the attorney general 
of a State has reason to believe that an interest of 
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the residents of that State has been or is threatened 
or adversely affected by the engagement of any per-
son in a practice that violates a rule prescribed 
under subsection (a), the State, as parens patriae, 
may bring a civil action on behalf of the residents 
of the State in an appropriate district court of the 
United States or other court of competent jurisdic-
tion to— 
(A) enjoin that practice; 
(B) enforce compliance with the rule; 
(C) obtain damages, restitution, or other 
compensation on behalf of residents of the 
State; 
(D) obtain penalties provided for under 
subsection (a); and 
(E) obtain such other relief as the court 
may consider to be appropriate. 
(2) NOTICE.— 
(A) NOTICE TO COMMISSION.—The State 
shall serve written notice to the Commission of 
any civil action under paragraph (1) at least 60 
days prior to initiating such civil action. 
(B) COPY
OF
COMPLAINT.—The notice 
served under subparagraph (A) shall include a 
copy of the complaint to be filed to initiate such 
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civil action, except that if it is not feasible for 
the State to provide such prior notice, the State 
shall provide notice immediately upon insti-
tuting such civil action. 
(3) INTERVENTION
BY
FTC.—Upon receiving 
the notice required by paragraph (2), the Commis-
sion may intervene in such civil action and upon in-
tervening— 
(A) be heard on all matters arising in such 
civil action; 
(B) remove the action to the appropriate 
United States district court; and 
(C) file petitions for appeal of a decision in 
such civil action. 
(4) SAVINGS CLAUSE.—No provision of this sec-
tion shall be construed as— 
(A) preventing the attorney general of a 
State from exercising the powers conferred on 
the attorney general by the laws of such State 
to conduct investigations or to administer oaths 
or affirmations or to compel the attendance of 
witnesses or the production of documentary and 
other evidence; or 
(B) prohibiting the attorney general of a 
State, or other authorized State officer, from 
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proceeding in State or Federal court on the 
basis of an alleged violation of any civil or 
criminal statute of that State. 
(5) VENUE; SERVICE OF PROCESS; JOINDER.— 
In a civil action brought under paragraph (1)— 
(A) the venue shall be a judicial district in 
which the defendant or a related party is found, 
is an inhabitant, or transacts business, or wher-
ever venue is proper under section 1391 of title 
28, United States Code; 
(B) process may be served without regard 
to the territorial limits of the district or of the 
State in which the civil action is instituted; and 
(C) a person who participated with the de-
fendant or a related party in an alleged viola-
tion that is being litigated in the civil action 
may be joined in the civil action without regard 
to the residence of the person. 
(6) PREEMPTIVE ACTION BY FTC.—Whenever a 
civil action or an administrative action has been in-
stituted by or on behalf of the Commission for viola-
tion of any rule described under paragraph (1), no 
State may, during the pendency of such action insti-
tuted by or on behalf of the Commission, institute 
a civil action under paragraph (1) against any de-
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fendant named in the complaint in such action for 
violation of any rule as alleged in such complaint. 
(7) AWARD OF COSTS AND FEES.—If the attor-
ney general of a State prevails in any civil action 
under paragraph (1), the State may recover reason-
able costs and attorney fees from the defendant or 
a related party. 
Æ 
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