AMENDMENT SENATE AMENDMENTH.

R. 3997House to the amendment of the Senate,

insert the fol lowing:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

‘‘Emergency Economic Stabilization Act of 2008’’.

(b) TABLE CONTENTS.—The table of contents for

OF

this Act is as follows:

Sec. 1. Short title and table of contents.

Sec. 2. Purposes.

Sec. 3. Definitions.

TITLE I—TROUBLED ASSETS RELIEF PROGRAM

Sec. 101. Purchases of troubled assets.

Sec. 102. Insurance of troubled assets.

Sec. 103. Considerations.

Sec. 104. Financial Stability Oversight Board.

Sec. 105. Reports.

Sec. 106. Rights; management; sale of troubled assets; revenues and sale pro ceeds.

Sec. 107. Contracting procedures.

Sec. 108. Conflicts of interest.

Sec. 109. Foreclosure mitigation efforts.

Sec. 110. Assistance to homeowners.

Sec. 111. Executive compensation and corporate governance.

Sec. 112. Coordination with foreign authorities and central banks.

Sec. 113. Minimization of long-term costs and maximization of benefits for tax payers.

Sec. 114. Market transparency.

Sec. 115. Graduated authorization to purchase.

Sec. 116. Oversight and audits.

Sec. 117. Study and report on margin authority.

Sec. 118. Funding.

Sec. 119. Judicial review and related matters.

Sec. 120. Termination of authority.

Sec. 121. Special Inspector General for the Troubled Asset Relief Program.

Sec. 122. Increase in statutory limit on the public debt.

Sec. 123. Credit reform.

Sec. 124. HOPE for Homeowners amendments.

Sec. 125. Congressional Oversight Panel.

Sec. 126. FDIC authority.

Sec. 127. Cooperation with the FBI.

Sec. 128. Acceleration of effective date.

Sec. 129. Disclosures on exercise of loan authority.

Sec. 130. Technical corrections.

Sec. 131. Exchange Stabilization Fund reimbursement.

Sec. 132. Authority to suspend mark-to-market accounting.

Sec. 133. Study on mark-to-market accounting.

Sec. 134. Recoupment.

Sec. 135. Preservation of authority.

TITLE II—BUDGET-RELATED PROVISIONS

Sec. 201. Information for congressional support agencies.

Sec. 202. Reports by the Office of Management and Budget and the Congres sional Budget Office.

Sec. 203. Analysis in President’s Budget.

Sec. 204. Emergency treatment.

TITLE III—TAX PROVISIONS

Sec. 301. Gain or loss from sale or exchange of certain preferred stock.

Sec. 302. Special rules for tax treatment of executive compensation of employ ers participating in the troubled assets relief program.

Sec. 303. Extension of exclusion of income from discharge of qualified principal

residence indebtedness.

SEC. 2. PURPOSES.

The purposes of this Act are—

(1) to immediately provide authority and facilities that the Secretary of the Treasury can use to

restore liquidity and stability to the financial system

of the United States; and

(2) to ensure that such authority and such facilities are used in a manner that—

(A) protects home values, college funds, retirement accounts, and life savings;

(B) preserves homeownership and promotes jobs and economic growth;

(C) maximizes overall returns to the taxpayers of the United States; and

(D) provides public accountability for the

exercise of such authority.

S

EC. 3. DEFINITIONS.

For purposes of this Act, the following definitions

shall apply:

(1) APPROPRIATE CON COMMITTEES OF

GRESS.—The term ‘‘appropriate committees of Congress’’ means—

(A) the Committee on Banking, Housing,

and Urban Affairs, the Committee on Finance,

the Committee on the Budget, and the Committee on Appropriations of the Senate; and

(B) the Committee on Financial Services,

the Committee on Ways and Means, the Committee on the Budget, and the Committee on

Appropriations of the House of Representatives.

(2) BOARD.—The term ‘‘Board’’ means the

Board of Governors of the Federal Reserve System.

(3) CONGRESSIONAL SUPPORT AGENCIES.—The

term ‘‘congressional support agencies’’ means the

Congressional Budget Office and the Joint Committee on Taxation.

(4) CORPORATION.—The term ‘‘Corporation’’

means the Federal Deposit Insurance Corporation.

(5) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’ means any institution, including,

but not limited to, any bank, savings association,

credit union, security broker or dealer, or insurance

company, established and regulated under the laws

of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth

of Northern Mariana Islands, Guam, American

Samoa, or the United States Virgin Islands, and

having significant operations in the United States,

but excluding any central bank of, or institution

owned by, a foreign government.

(6) FUND.—The term ‘‘Fund’’ means the Troubled Assets Insurance Financing Fund established

under section 102.

(7) SECRETARY.—The term ‘‘Secretary’’ means

the Secretary of the Treasury.

(8) TARP.—The term ‘‘TARP’’ means the

Troubled Asset Relief Program established under

section 101.

(9) TROUBLED ASSETS.—The term ‘‘troubled

assets’’ means—

(A) residential or commercial mortgages

and any securities, obligations, or other instruments that are based on or related to such

mortgages, that in each case was originated or

issued on or before March 14, 2008, the purchase of which the Secretary

determines promotes financial market stability; and

(B) any other financial instrument that the

Secretary, after consultation with the Chairman

of the Board of Governors of the Federal Reserve System, determines the purchase of which

is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress.

TITLE I—TROUBLED ASSETS

RELIEF PROGRAM

SEC. 101. PURCHASES OF TROUBLED ASSETS.

(a) OFFICES; AUTHORITY.—

(1) AUTHORITY.—The Secretary is authorized

to establish the Troubled Asset Relief Program (or

‘‘TARP’’) to purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as

are determined by the Secretary, and in accordance

with this Act and the policies and procedures developed and published by the Secretary.

(2) COMMENCEMENT OF PROGRAM.—Establish

ment of the policies and procedures and other similar administrative requirements imposed on the Secretary by this Act are not

intended to delay the commencement of the TARP.

(3) ESTABLISHMENT OF TREASURY OFFICE.—

(A) IN GENERAL.—The Secretary shall implement any program under paragraph (1)

through an Office of Financial Stability, established for such purpose within the Office of Domestic Finance of the Department of the Treasury, which office shall be headed by an Assistant Secretary of the Treasury, appointed by the

President, by and with the advice and consent

of the Senate, except that an interim Assistant

Secretary may be appointed by the Secretary.

(B) CLERICAL AMENDMENTS.—

(i) TITLE 5.—Section 5315 of title 5,

United States Code, is amended in the

item relating to Assistant Secretaries of

the Treasury, by striking ‘‘(9)’’ and inserting ‘‘(10)’’.

(ii) TITLE 31.—Section 301(e) of title

31, United States Code, is amended by

striking ‘‘9’’ and inserting ‘‘10’’.

(b) CONSULTATION.—In exercising the authority

under this section, the Secretary shall consult with the

Board, the Corporation, the Comptroller of the Currency,

the Director of the Office of Thrift Supervision, and the

Secretary of Housing and Urban Development.

(c) NECESSARY ACTIONS.—The Secretary is authorized to take such actions as the Secretary deems necessary

to carry out the authorities in this Act, including, without

limitation, the following:

(1) The Secretary shall have direct hiring authority with respect to the appointment of employees

to administer this Act.

(2) Entering into contracts, including contracts

for services authorized by section 3109 of title 5,

United States Code.

(3) Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties

related to this Act as financial agents of the Federal

Government as may be required.

(4) In order to provide the Secretary with the

flexibility to manage troubled assets in a manner designed to minimize cost to the taxpayers, establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase, hold, and sell

troubled assets and issue obligations.

(5) Issuing such regulations and other guidance

as may be necessary or appropriate to define terms

or carry out the authorities or purposes of this Act.

(d) PROGRAM GUIDELINES.—Before the earlier of

the end of the 2-business-day period beginning on the date

of the first purchase of troubled assets pursuant to the

authority under this section or the end of the 45-day period beginning on the date of enactment of this Act, the

Secretary shall publish program guidelines, including the

following:

(1) Mechanisms for purchasing troubled assets.

(2) Methods for pricing and valuing troubled

assets.

(3) Procedures for selecting asset managers.

(4) Criteria for identifying troubled assets for

purchase.

(e) PREVENTING UNJUST ENRICHMENT.—In making

purchases under the authority of this Act, the Secretary

shall take such steps as may be necessary to prevent unjust enrichment of financial institutions participating in

a program established under this section, including by preventing the sale of a troubled asset to the Secretary at

a higher price than what the seller paid to purchase the

asset. This subsection does not apply to troubled assets

acquired in a merger or acquisition, or a purchase of as

sets from a financial institution in conservatorship or receivership, or that has initiated bankruptcy proceedings

under title 11, United States Code.

SEC. 102. INSURANCE OF TROUBLED ASSETS.

(a) AUTHORITY.—

(1) IN GENERAL.—If the Secretary establishes

the program authorized under section 101, then the

Secretary shall establish a program to guarantee

troubled assets originated or issued prior to March

14, 2008, including mortgage-backed securities.

(2) GUARANTEES.—In establishing any program under this subsection, the Secretary may develop guarantees of troubled assets and the associated premiums for such guarantees. Such guarantees and premiums may be determined by category

or class of the troubled assets to be guaranteed.

(3) EXTENT OF GUARANTEE.—Upon request of

a financial institution, the Secretary may guarantee

the timely payment of principal of, and interest on,

troubled assets in amounts not to exceed 100 percent of such payments. Such guarantee may be on

such terms and conditions as are determined by the

Secretary, provided that such terms and conditions

are consistent with the purposes of this Act.

(b) REPORTS.—Not later than 90 days after the date

of enactment of this Act, the Secretary shall report to the

appropriate committees of Congress on the program established under subsection (a).

(c) PREMIUMS.—

(1) IN GENERAL.—The Secretary shall collect

premiums from any financial institution participating in the program established under subsection

(a). Such premiums shall be in an amount that the

Secretary determines necessary to meet the purposes

of this Act and to provide sufficient reserves pursuant to paragraph (3).

(2) AUTHORITY TO BASE PREMIUMS ON PROD

RISK.—In establishing any premium under

UCT

paragraph (1), the Secretary may provide for variations in such rates according to the credit risk associated with the particular troubled asset that is

being guaranteed. The Secretary shall publish the

methodology for setting the premium for a class of

troubled assets together with an explanation of the

appropriateness of the class of assets for participation in the program established under this section.

The methodology shall ensure that the premium is

consistent with paragraph (3).

MINIMUM LEVEL.—The premiums referred

to in paragraph (1) shall be set by the Secretary at

a level necessary to create reserves sufficient to meet

anticipated claims, based on an actuarial analysis,

and to ensure that taxpayers are fully protected.

(4) ADJUSTMENT TO PURCHASE AUTHORITY.—

The purchase authority limit in section 115 shall be

reduced by an amount equal to the difference between the total of the outstanding guaranteed obligations and the balance in the Troubled Assets Insurance Financing Fund.

(d) TROUBLED ASSETS INSURANCE FINANCING

FUND.—

(1) DEPOSITS.—The Secretary shall deposit

fees collected under this section into the Fund established under paragraph (2).

(2) ESTABLISHMENT.—There is established a

Troubled Assets Insurance Financing Fund that

shall consist of the amounts collected pursuant to

paragraph (1), and any balance in such fund shall

be invested by the Secretary in United States Treasury securities, or kept in cash on hand or on deposit,

as necessary.

(3) PAYMENTS FROM FUND.—The Secretary

shall make payments from amounts deposited in the

guarantees provided

to financial institutions under subsection (a).

SEC. 103. CONSIDERATIONS.

In exercising the authorities granted in this Act, the

Secretary shall take into consideration—

(1) protecting the interests of taxpayers by

maximizing overall returns and minimizing the impact on the national debt;

(2) providing stability and preventing disruption to financial markets in order to limit the impact

on the economy and protect American jobs, savings,

and retirement security;

(3) the need to help families keep their homes

and to stabilize communities;

(4) in determining whether to engage in a direct purchase from an individual financial institution, the long-term viability of the financial institution in determining whether the purchase represents

the most efficient use of funds under this Act;

(5) ensuring that all financial institutions are

eligible to participate in the program, without discrimination based on size, geography, form of organization, or the size, type, and number of assets eligible for purchase under this Act;

(6) providing financial assistance to financial

institutions, including those serving low- and moderate-income populations and other underserved

communities, and that have assets less than

$1,000,000,000, that were well or adequately capitalized as of June 30, 2008, and that as a result

of the devaluation of the preferred government-sponsored enterprises stock will drop one or more capital

levels, in a manner sufficient to restore the financial

institutions to at least an adequately capitalized

level;

(7) the need to ensure stability for United

States public instrumentalities, such as counties and

cities, that may have suffered significant increased

costs or losses in the current market turmoil;

(8) protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible retirement plan described in clause

(iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the

Internal Revenue Code of 1986, except that such authority shall not extend to any compensation arrangements subject to section 409A of such Code;

and

(9) the utility of purchasing other real estate

owned and instruments backed by mortgages on

multifamily properties.

SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.

(a) ESTABLISHMENT.—There is established the Financial Stability Oversight Board, which shall be responsible for—

(1) reviewing the exercise of authority under a

program developed in accordance with this Act, including—

(A) policies implemented by the Secretary

and the Office of Financial Stability created

under sections 101 and 102, including the appointment of financial agents, the designation

of asset classes to be purchased, and plans for

the structure of vehicles used to purchase troubled assets; and

(B) the effect of such actions in assisting

American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers;

(2) making recommendations, as appropriate, to

the Secretary regarding use of the authority under

this Act; and

(3) reporting any suspected fraud, misrepresentation, or malfeasance to the Special Inspector General for the Troubled Assets Relief Program or the

Attorney General of the United States, consistent

with section 535(b) of title 28, United States Code.

(b) MEMBERSHIP.—The Financial Stability Oversight Board shall be comprised of—

(1) the Chairman of the Board of Governors of

the Federal Reserve System;

(2) the Secretary;

(3) the Director of the Federal Housing Finance Agency;

(4) the Chairman of the Securities Exchange

Commission; and

(5) the Secretary of Housing and Urban Development.

(c) CHAIRPERSON.—The chairperson of the Financial

Stability Oversight Board shall be elected by the members

of the Board from among the members other than the Secretary.

(d) MEETINGS.—The Financial Stability Oversight

Board shall meet 2 weeks after the first exercise of the

purchase authority of the Secretary under this Act, and

monthly thereafter.

(e) ADDITIONAL AUTHORITIES.—In addition to the

responsibilities described in subsection (a), the Financial

Stability Oversight Board shall have the authority to ensure that the policies implemented by the Secretary are—

(1) in accordance with the purposes of this Act;

(2) in the economic interests of the United

States; and

(3) consistent with protecting taxpayers, in accordance with section 113(a).

(f) CREDIT REVIEW COMMITTEE.—The Financial

Stability Oversight Board may appoint a credit review

committee for the purpose of evaluating the exercise of

the purchase authority provided under this Act and the

assets acquired through the exercise of such authority, as

the Financial Stability Oversight Board determines appropriate.

(g) REPORTS.—The Financial Stability Oversight

Board shall report to the appropriate committees of Congress and the Congressional Oversight Panel established

under section 125, not less frequently than quarterly, on

the matters described under subsection (a)(1).

(h) TERMINATION.—The Financial Stability Oversight Board, and its authority under this section, shall terminate on the expiration of the 15-day period beginning

upon the later of—

101 has been

sold or transferred out of the ownership or control

of the Federal Government; or

(2) the date of expiration of the last insurance

contract issued under section 102.

SEC. 105. REPORTS.

(a) IN GENERAL.—Before the expiration of the 60day period beginning on the date of the first exercise of

the authority granted in section 101(a), or of the first exercise of the authority granted in section 102, whichever

occurs first, and every 30-day period thereafter, the Secretary shall report to the appropriate committees of Congress, with respect to each such period—

(1) an overview of actions taken by the Secretary, including the considerations required by section 103 and the efforts under section 109;

(2) the actual obligation and expenditure of the

funds provided for administrative expenses by section 118 during such period and the expected expenditure of such funds in the subsequent period;

and

(3) a detailed financial statement with respect

to the exercise of authority under this Act, including—

(A) all agreements made or renewed;

(B) all insurance contracts entered into

pursuant to section 102;

(C) all transactions occurring during such

period, including the types of parties involved;

(D) the nature of the assets purchased;

(E) all projected costs and liabilities;

(F) operating expenses, including compensation for financial agents;

(G) the valuation or pricing method used

for each transaction; and

(H) a description of the vehicles established to exercise such authority.

(b) TRANCHE REPORTS TO CONGRESS.—

(1) REPORTS.—The Secretary shall provide to

the appropriate committees of Congress, at the times

specified in paragraph (2), a written report, including—

(A) a description of all of the transactions

made during the reporting period;

(B) a description of the pricing mechanism

for the transactions;

(C) a justification of the price paid for and

other financial terms associated with the transactions;

(D) a description of the impact of the exercise of such authority on the financial system,

supported, to the extent possible, by specific

data;

(E) a description of challenges that remain

in the financial system, including any benchmarks yet to be achieved; and

(F) an estimate of additional actions under

the authority provided under this Act that may

be necessary to address such challenges.

(2) TIMING.—The report required by this subsection shall be submitted not later than 7 days

after the date on which commitments to purchase

troubled assets under the authorities provided in this

Act first reach an aggregate of $50,000,000,000 and

not later than 7 days after each $50,000,000,000 interval of such commitments is reached thereafter.

(c) REGULATORY MODERNIZATION REPORT.—The

Secretary shall review the current state of the financial

markets and the regulatory system and submit a written

report to the appropriate committees of Congress not later

than April 30, 2009, analyzing the current state of the

regulatory system and its effectiveness at overseeing the

participants in the financial markets, including the overthe-counter swaps market and government-sponsored en

terprises, and providing recommendations for improvement, including—

(1) recommendations regarding—

(A) whether any participants in the financial markets that are currently outside the regulatory system should become subject to the

regulatory system; and

(B) enhancement of the clearing and settlement of over-the-counter swaps; and

(2) the rationale underlying such recommendations.

(d) SHARING INFORMATION.—Any report re OF

quired under this section shall also be submitted to the

Congressional Oversight Panel established under section

125.

(e) SUNSET.—The reporting requirements under this

section shall terminate on the later of—

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been

sold or transferred out of the ownership or control

of the Federal Government; or

(2) the date of expiration of the last insurance

contract issued under section 102.

SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED AS

SETS; REVENUES AND SALE PROCEEDS.

(a) EXERCISE RIGHTS.—The Secretary may, at

OF

any time, exercise any rights received in connection with

troubled assets purchased under this Act.

(b) MANAGEMENT OF TROUBLED ASSETS.—The Secretary shall have authority to manage troubled assets purchased under this Act, including revenues and portfolio

risks therefrom.

(c) SALE TROUBLED ASSETS.—The Secretary

OF

may, at any time, upon terms and conditions and at a

price determined by the Secretary, sell, or enter into securities loans, repurchase transactions, or other financial

transactions in regard to, any troubled asset purchased

under this Act.

(d) TRANSFER TREASURY.—Revenues of, and

TO

proceeds from the sale of troubled assets purchased under

this Act, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under section

113 shall be paid into the general fund of the Treasury

for reduction of the public debt.

(e) APPLICATION SUNSET TROUBLED AS OF TO

SETS.—The authority of the Secretary to hold any troubled asset purchased under this Act before the termination

date in section 120, or to purchase or fund the purchase

of a troubled asset under a commitment entered into be

fore the termination date in section 120, is not subject

to the provisions of section 120.

SEC. 107. CONTRACTING PROCEDURES.

(a) STREAMLINED PROCESS.—For purposes of this

Act, the Secretary may waive specific provisions of the

Federal Acquisition Regulation upon a determination that

urgent and compelling circumstances make compliance

with such provisions contrary to the public interest. Any

such determination, and the justification for such determination, shall be submitted to the Committees on Oversight and Government Reform and Financial Services of

the House of Representatives and the Committees on

Homeland Security and Governmental Affairs and Banking, Housing, and Urban Affairs of the Senate within 7

days.

(b) ADDITIONAL CONTRACTING REQUIREMENTS.—In

any solicitation or contract where the Secretary has, pursuant to subsection (a), waived any provision of the Federal Acquisition Regulation pertaining to minority contracting, the Secretary shall develop and implement standards and procedures to ensure, to the maximum extent

practicable, 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)), in that solicitation or contract,

including contracts to asset managers, servicers, property

managers, and other service providers or expert consultants.

(c) ELIGIBILITY FDIC.—Notwithstanding sub OF

sections (a) and (b), the Corporation—

(1) shall be eligible for, and shall be considered

in, the selection of asset managers for residential

mortgage loans and residential mortgage-backed securities; and

(2) shall be reimbursed by the Secretary for

any services provided.

SEC. 108. CONFLICTS OF INTEREST.

(a) STANDARDS REQUIRED.—The Secretary shall

issue regulations or guidelines necessary to address and

manage or to prohibit conflicts of interest that may arise

in connection with the administration and execution of the

authorities provided under this Act, including—

(1) conflicts arising in the selection or hiring of

contractors or advisors, including asset managers;

(2) the purchase of troubled assets;

(3) the management of the troubled assets held;

(4) post-employment restrictions on employees;

and

(5) any other potential conflict of interest, as

the Secretary deems necessary or appropriate in the

public interest.

(b) TIMING.—Regulations or guidelines required by

this section shall be issued as soon as practicable after

the date of enactment of this Act.

SEC. 109. FORECLOSURE MITIGATION EFFORTS.

(a) RESIDENTIAL MORTGAGE LOAN 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 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 credit enhancements to facilitate loan modifications to prevent avoidable foreclosures.

(b) COORDINATION.—The Secretary shall coordinate

with the Corporation, the Board (with respect to any

mortgage or mortgage-backed 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, 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 REASONABLE LOAN MODIFICATION

TO

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 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.

SEC. 110. ASSISTANCE TO HOMEOWNERS.

(a) DEFINITIONS.—As used in this section—

(1) the term ‘‘Federal property manager’’

means—

(A) the Federal Housing Finance Agency,

in its capacity as conservator of the Federal

National Mortgage Association and the Federal

Home Loan Mortgage Corporation;

(B) the Corporation, with respect to residential mortgage loans and mortgage-backed securities held by any bridge depository institution pursuant to section 11(n) of the Federal

Deposit Insurance Act; and

(C) the Board, with respect to any mortgage or mortgage-backed securities or pool of

securities held, owned, or controlled by or on

behalf of a Federal reserve bank, other than

mortgages or securities held, owned, or controlled in connection with open market operations under section 14 of the Federal Reserve

Act (12 U.S.C. 353), or as collateral for an advance or discount that is not in default;

meaning

as in section 103 of the Truth in Lending Act (15

U.S.C. 1602);

(3) the term ‘‘insured depository institution’’

has the same meaning as in section 3 of the Federal

Deposit Insurance Act (12 U.S.C. 1813); and

(4) the term ‘‘servicer’’ has the same meaning

as in section 6(i)(2) of the Real Estate Settlement

Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).

(b) HOMEOWNER ASSISTANCE BY AGENCIES.—

(1) IN GENERAL.—To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets

secured by residential real estate, including multifamily housing, the Federal property manager shall

implement a plan that seeks to maximize assistance

for homeowners and use its authority to encourage

the servicers of the underlying mortgages, and 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.

(2) MODIFICATIONS.—In the case of a residential mortgage loan, modifications made under paragraph (1) may include—

(A) reduction in interest rates;

(B) reduction of loan principal; and

(C) other similar modifications.

(3) TENANT PROTECTIONS.—In the case of

mortgages on residential rental properties, modifications made under paragraph (1) shall ensure—

(A) the continuation of any existing Federal, State, and local rental subsidies and protections; and

(B) that modifications take into account

the need for operating funds to maintain decent

and safe conditions at the property.

(4) TIMING.—Each Federal property manager

shall develop and begin implementation of the plan

required by this subsection not later than 60 days

after the date of enactment of this Act.

(5) REPORTS CONGRESS.—Each Federal

TO

property manager shall, 60 days after the date of

enactment of this Act and every 30 days thereafter,

report to Congress specific information on the number and types of loan modifications made and the

number of actual foreclosures occurring during the

reporting period in accordance with this section.

(6) CONSULTATION.—In developing the plan required by this subsection, the Federal property man

agers shall consult with one another and, to the extent possible, utilize consistent approaches to implement the requirements of this subsection.

(c) ACTIONS WITH RESPECT TO SERVICERS.—In any

case in which a Federal property manager is not the owner

of a residential mortgage loan, but holds an interest in

obligations or pools of obligations secured by residential

mortgage loans, the Federal property manager shall—

(1) encourage implementation by the loan

servicers of loan modifications developed under subsection (b); and

(2) assist in facilitating any such modifications,

to the extent possible.

(d) LIMITATION.—The requirements of this section

shall not supersede any other duty or requirement imposed

on the Federal property managers under otherwise applicable law.

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE

GOVERNANCE.

(a) APPLICABILITY.—Any financial institution that

sells troubled assets to the Secretary under this Act shall

be subject to the executive compensation requirements of

subsections (b) and (c) and the provisions under the Internal Revenue Code of 1986, as provided under the amendment by section 302, as applicable.

(b) DIRECT PURCHASES.—

(1) IN GENERAL.—Where the Secretary determines that the purposes of this Act are best met

through direct purchases of troubled assets from an

individual financial institution where no bidding

process or market prices are available, and the Secretary receives a meaningful equity or debt position

in the financial institution as a result of the transaction, the Secretary shall require that the financial

institution meet appropriate standards for executive

compensation and corporate governance. The standards required under this subsection shall be effective

for the duration of the period that the Secretary

holds an equity or debt position in the financial institution.

(2) CRITERIA.—The standards required under

this subsection shall include—

(A) limits on compensation that exclude incentives for senior executive officers of a financial institution to take unnecessary and excessive risks that threaten the value of the financial institution during the period that the Secretary holds an equity or debt position in the financial institution;

(B) a provision for the recovery by the financial 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 proven to be materially

inaccurate; and

(C) a prohibition on the financial institution making any golden parachute payment to

its senior executive officer during the period

that the Secretary holds an equity or debt position in the financial institution.

(3) DEFINITION.—For purposes of this section,

the term ‘‘senior executive officer’’ means an individual who is one of the top 5 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.

(c) AUCTION PURCHASES.—Where the Secretary determines that the purposes of this Act are best met

through auction purchases of troubled assets, and only

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

the Secretary shall prohibit, for such financial institution,

any new employment contract with a senior executive offi

cer that provides a golden parachute in the event of an

involuntary termination, bankruptcy filing, insolvency, or

receivership. The Secretary shall issue guidance to carry

out this paragraph not later than 2 months after the date

of enactment of this Act, and such guidance shall be effective upon issuance.

(d) SUNSET.—The provisions of subsection (c) shall

apply only to arrangements entered into during the period

during which the authorities under section 101(a) are in

effect, as determined under section 120.

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES

AND CENTRAL BANKS.

The Secretary shall coordinate, as appropriate, with

foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as

a result of extending financing to financial institutions

that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.

SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXI

MIZATION OF BENEFITS FOR TAXPAYERS.

(a) LONG-TERM COSTS AND BENEFITS.—

(1) MINIMIZING NEGATIVE IMPACT.—The Secretary shall use the authority under this Act in a

manner that will minimize any potential long-term

negative impact on the taxpayer, taking into account

the direct outlays, potential long-term returns on assets purchased, and the overall economic benefits of

the program, including economic benefits due to improvements in economic activity and the availability

of credit, the impact on the savings and pensions of

individuals, and reductions in losses to the Federal

Government.

(2) AUTHORITY.—In carrying out paragraph

(1), the Secretary shall—

(A) hold the assets to maturity or for resale for and until such time as the Secretary

determines that the market is optimal for selling such assets, in order to maximize the value

for taxpayers; and

(B) sell such assets at a price that the Secretary determines, based on available financial

analysis, will maximize return on investment for

the Federal Government.

(3) PRIVATE PARTICIPATION.—The

SECTOR

Secretary shall encourage the private sector to participate in purchases of troubled assets, and to invest in financial institutions, consistent with the provisions of this section.

MARKET MECHANISMS.—In making pur OF

chases under this Act, the Secretary shall—

(1) make such purchases at the lowest price

that the Secretary determines to be consistent with

the purposes of this Act; and

(2) maximize the efficiency of the use of taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate.

(c) DIRECT PURCHASES.—If the Secretary determines that use of a market mechanism under subsection

(b) is not feasible or appropriate, and the purposes of the

Act are best met through direct purchases from an individual financial institution, the Secretary shall pursue additional measures to ensure that prices paid for assets are

reasonable and reflect the underlying value of the asset.

(d) CONDITIONS PURCHASE AUTHORITY

ON FOR

WARRANTS AND DEBT INSTRUMENTS.—

(1) IN GENERAL.—The Secretary may not purchase, or make any commitment to purchase, any

troubled asset under the authority of this Act, unless

the Secretary receives from the financial institution

from which such assets are to be purchased—

(A) in the case of a financial 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 financial institution, or voting stock with respect to which,

the Secretary agrees not to exercise voting

power, as the Secretary determines appropriate;

or

(B) in the case of any financial institution

other than one described in subparagraph (A),

a warrant for common or preferred stock, or a

senior debt instrument from such financial institution, as described in paragraph (2)(C).

(2) TERMS AND CONDITIONS.—The terms and

conditions of any warrant or senior debt instrument

required under paragraph (1) shall meet the following requirements:

(A) PURPOSES.—Such terms and conditions shall, at a minimum, be designed—

(i) to provide for reasonable participation by the Secretary, for the benefit of

taxpayers, in equity appreciation in the

case of a warrant or other equity security,

or a reasonable interest rate premium, in

the case of a debt instrument; and

(ii) to provide additional protection

for the taxpayer against losses from sale of

assets by the Secretary under this Act and

the administrative expenses of the TARP.

(B) AUTHORITY TO SELL, EXERCISE, OR

SURRENDER.—The Secretary may sell, exercise,

or surrender a warrant or any senior debt instrument received under this subsection, based

on the conditions established under subparagraph (A).

(C) CONVERSION.—The warrant shall provide that if, after the warrant is received by the

Secretary under this subsection, the financial

institution that issued the warrant is no longer

listed or traded on a national securities exchange or securities association, as described in

paragraph (1)(A), such warrants shall convert

to senior debt, or contain appropriate protections for the Secretary to ensure that the

Treasury is appropriately compensated for the

value of the warrant, in an amount determined

by the Secretary.

(D) PROTECTIONS.—Any warrant representing securities to be received by the Secretary under this subsection shall contain antidilution provisions of the

type employed in capital market transactions, as determined by the

Secretary. Such provisions shall protect the

value of the securities from market transactions

such as stock splits, stock distributions, dividends, and other distributions, mergers, and

other forms of reorganization or recapitalization.

(E) EXERCISE PRICE.—The exercise price

for any warrant issued pursuant to this subsection shall be set by the Secretary, in the interest of the taxpayers.

(F) SUFFICIENCY.—The financial institution shall guarantee to the Secretary that it has

authorized shares of nonvoting stock available

to fulfill its obligations under this subsection.

Should the financial institution not have sufficient authorized shares, including preferred

shares that may carry dividend rights equal to

a multiple number of common shares, the Secretary may, to the extent necessary, accept a

senior debt note in an amount, and on such

terms as will compensate the Secretary with

equivalent value, in the event that a sufficient

shareholder vote to authorize the necessary additional shares cannot be obtained.

(3) EXCEPTIONS.—

(A) DE MINIMIS.—The Secretary shall establish de minimis exceptions to the requirements of this subsection, based on the size of

the cumulative transactions of troubled assets

purchased from any one financial institution for

the duration of the program, at not more than

$100,000,000.

(B) OTHER EXCEPTIONS.—The Secretary

shall establish an exception to the requirements

of this subsection and appropriate alternative

requirements for any participating financial institution that is legally prohibited from issuing

securities and debt instruments, so as not to

allow circumvention of the requirements of this

section.

SEC. 114. MARKET TRANSPARENCY.

(a) PRICING.—To facilitate market transparency, the

Secretary shall make available to the public, in electronic

form, a description, amounts, and pricing of assets acquired under this Act, within 2 business days of purchase,

trade, or other disposition.

(b) DISCLOSURE.—For each type of financial institutions that sells troubled assets to the Secretary under this

Act, the Secretary shall determine whether the public disclosure required for such financial institutions with respect to off-balance sheet transactions, derivatives instruments, contingent liabilities, and similar sources of potential exposure is adequate to provide to the public sufficient

information as to the true financial position of the institutions. If such disclosure is not adequate for that purpose,

the Secretary shall make recommendations for additional

disclosure requirements to the relevant regulators.

SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.

(a) AUTHORITY.—The authority of the Secretary to

purchase troubled assets under this Act shall be limited

as follows:

(1) Effective upon the date of enactment of this

Act, such authority shall be limited to

$250,000,000,000 outstanding at any one time.

(2) If at any time, the President submits to the

Congress a written certification that the Secretary

needs to exercise the authority under this paragraph,

effective upon such submission, such authority shall

be limited to $350,000,000,000 outstanding at any

one time.

(3) If, at any time after the certification in

paragraph (2) has been made, the President transmits to the Congress a written report detailing the

plan of the Secretary to exercise the authority under

this paragraph, unless there is enacted, within 15

calendar days of such transmission, a joint resolution described in subsection (c), effective upon the

expiration of such 15-day period, such authority

shall be limited to $700,000,000,000 outstanding at

any one time.

(b) AGGREGATION PURCHASE PRICES.—The

OF

amount of troubled assets purchased by the Secretary outstanding at any one time shall be determined for purposes

of the dollar amount limitations under subsection (a) by

aggregating the purchase prices of all troubled assets held.

(c) JOINT RESOLUTION OF DISAPPROVAL.—

(1) IN GENERAL.—Notwithstanding any other

provision of this section, the Secretary may not exercise any authority to make purchases under this Act

with regard to any amount in excess of

$350,000,000,000 previously obligated, as described

in this section if, within 15 calendar days after the

date on which Congress receives a report of the plan

of the Secretary described in subsection (a)(3), there

is enacted into law a joint resolution disapproving

the plan of the Secretary with respect to such additional amount.

(2) CONTENTS OF JOINT RESOLUTION.—For

the purpose of this section, the term ‘‘joint resolution’’ means only a joint resolution—

(A) that is introduced not later than 3 calendar days after the date on which the report

of the plan of the Secretary referred to in subsection (a)(3) is received by Congress;

(B) which does not have a preamble;

(C) the title of which is as follows: ‘‘Joint

resolution relating to the disapproval of obligations under the Emergency Economic Stabilization Act of 2008’’; and

(D) the matter after the resolving clause of

which is as follows: ‘‘That Congress disapproves

the obligation of any amount exceeding the

amounts obligated as described in paragraphs

(1) and (2) of section 115(a) of the Emergency

Economic Stabilization Act of 2008.’’.

(d) FAST TRACK CONSIDERATION IN HOUSE OF REPRESENTATIVES.—

(1) RECONVENING.—Upon receipt of a report

under subsection (a)(3), the Speaker, if the House

would otherwise be adjourned, shall notify the Members of the House that, pursuant to this section,

the

House shall convene not later than the second calendar day after receipt of such report;

(2) REPORTING AND DISCHARGE.—Any committee of the House of Representatives to which a

joint resolution is referred shall report it to the

House not later than 5 calendar days after the date

of receipt of the report described in subsection

(a)(3). If a committee fails to report the joint resolution within that period, the committee shall be discharged from further consideration of the joint resolution and the joint resolution shall be referred to

the appropriate calendar.

(3) PROCEEDING TO CONSIDERATION.—After

each committee authorized to consider a joint resolution reports it to the House or has been discharged

from its consideration, it shall be in order, not later

than the sixth day after Congress receives the report

described in subsection (a)(3), to move to proceed to

consider the joint resolution in the House. All points

of order against the motion are waived. Such a motion shall not be in order after the House has disposed of a motion to proceed on the joint resolution.

The previous question shall be considered as ordered

on the motion to its adoption without intervening

motion. The motion shall not be debatable. A motion

to reconsider the vote by which the motion is disposed of shall not be in order.

(4) CONSIDERATION.—The joint resolution

shall be considered as read. All points of order

against the joint resolution and against its consideration are waived. The previous question shall be considered as ordered on the joint resolution to its passage without intervening motion except two hours of

debate equally divided and controlled by the proponent and an opponent. A motion to reconsider the

vote on passage of the joint resolution shall not be

in order.

(e) FAST TRACK CONSIDERATION IN SENATE.—

(1) RECONVENING.—Upon receipt of a report

under subsection (a)(3), if the Senate has adjourned

or recessed for more than 2 days, the majority leader of the Senate, after consultation with the minority

leader of the Senate, shall notify the Members of the

Senate that, pursuant to this section, the Senate

shall convene not later than the second calendar day

after receipt of such message.

(2) PLACEMENT ON CALENDAR.—Upon introduction in the Senate, the joint resolution shall be

placed immediately on the calendar.

(3) FLOOR CONSIDERATION.—

(A) IN GENERAL.—Notwithstanding Rule

XXII of the Standing Rules of the Senate, it is

in order at any time during the period beginning on the 4th day after the date on which

Congress receives a report of the plan of the

Secretary described in subsection (a)(3) and

ending on the 6th day after the date on which

Congress receives a report of the plan of the

Secretary described in subsection (a)(3) (even

though a previous motion to the same effect has

been disagreed to) to move to proceed to the

consideration of the joint resolution, and all

points of order against the joint resolution (and

against consideration of the joint resolution)

are waived. The motion to proceed is not debatable. The motion is not subject to a motion to

postpone. A motion to reconsider the vote by

which the motion is agreed to or disagreed to

shall not be in order. If a motion to proceed to

the consideration of the resolution is agreed to,

the joint resolution shall remain the unfinished

business until disposed of.

(B) DEBATE.—Debate on the joint resolution, and on all debatable motions and appeals

in connection therewith, shall be limited to not

more than 10 hours, which shall be divided

equally between the majority and minority leaders or their designees. A motion further to limit

debate is in order and not debatable. An

amendment to, or a motion to postpone, or a

motion to proceed to the consideration of other

business, or a motion to recommit the joint resolution is not in order.

(C) VOTE ON PASSAGE.—The vote on passage shall occur immediately following the conclusion of the debate on a joint resolution, and

a single quorum call at the conclusion of the debate if requested in accordance with the rules of

the Senate.

(D) RULINGS OF THE CHAIR ON PROCE

DURE.—Appeals from the decisions of the Chair

relating to the application of the rules of the

Senate, as the case may be, to the procedure relating to a joint resolution shall be decided

without debate.

(f) RULES RELATING SENATE HOUSE

TO AND OF

REPRESENTATIVES.—

(1) COORDINATION WITH ACTION BY OTHER

HOUSE.—If, before the passage by one House of ajoint resolution of that

House, that House receives

from the other House a joint resolution, then the following procedures shall apply:

(A) The joint resolution of the other House

shall not be referred to a committee.

(B) With respect to a joint resolution of

the House receiving the resolution—

(i) the procedure in that House shall

be the same as if no joint resolution had

been received from the other House; but

(ii) the vote on passage shall be on

the joint resolution of the other House.

(2) TREATMENT OF JOINT RESOLUTION OF

OTHER HOUSE.—If one House fails to introduce or

consider a joint resolution under this section, the

joint resolution of the other House shall be entitled

to expedited floor procedures under this section.

(3) TREATMENT OF COMPANION MEASURES.—

If, following passage of the joint resolution in the

Senate, the Senate then receives the companion

measure from the House of Representatives, the

companion measure shall not be debatable.

(4) CONSIDERATION AFTER PASSAGE.—

(A) IN GENERAL.—If Congress passes a

joint resolution, the period beginning on the

date the President is presented with the joint

resolution and ending on the date the President

takes action with respect to the joint resolution

shall be disregarded in computing the 15-calendar day period described in subsection (a)(3).

(B) VETOES.—If the President vetoes the

joint resolution—

(i) the period beginning on the date

the President vetoes the joint resolution

and ending on the date the Congress receives the veto message with respect to the

joint resolution shall be disregarded in

computing the 15-calendar day period described in subsection (a)(3), and

(ii) debate on a veto message in the

Senate under this section shall be 1 hour

equally divided between the majority and

minority leaders or their designees.

(5) RULES OF HOUSE OF REPRESENTATIVES

AND SENATE.—This subsection and subsections (c),

(d), and (e) are enacted by Congress—

(A) as an exercise of the rulemaking power

of the Senate and House of Representatives, respectively, and as such it is deemed a part of

the rules of each House, respectively, but appli

cable only with respect to the procedure to be

followed in that House in the case of a joint

resolution, and it supersedes other rules only to

the extent that it is inconsistent with such

rules; and

(B) with full recognition of the constitutional right of either House to change the rules

(so far as relating to the procedure of that

House) at any time, in the same manner, and

to the same extent as in the case of any other

rule of that House.

SEC. 116. OVERSIGHT AND AUDITS.

(a) COMPTROLLER GENERAL OVERSIGHT.—

(1) SCOPE OF OVERSIGHT.—The Comptroller

General of the United States shall, upon establishment of the troubled assets relief program under

this Act (in this section referred to as the ‘‘TARP’’),

commence ongoing oversight of the activities and

performance of the TARP and of any agents and

representatives of the TARP (as related to the agent

or representative’s activities on behalf of or under

the authority of the TARP), including vehicles established by the Secretary under this Act. The subjects of such oversight shall include the following:

(A) The performance of the TARP in

meeting the purposes of this Act, particularly

those involving—

(i) foreclosure mitigation;

(ii) cost reduction;

(iii) whether it has provided stability

or prevented disruption to the financial

markets or the banking system; and

(iv) whether it has protected taxpayers.

(B) The financial condition and internal

controls of the TARP, its representatives and

agents.

(C) Characteristics of transactions and

commitments entered into, including transaction type, frequency, size, prices paid, and all

other relevant terms and conditions, and the

timing, duration and terms of any future commitments to purchase assets.

(D) Characteristics and disposition of acquired assets, including type, acquisition price,

current market value, sale prices and terms,

and use of proceeds from sales.

(E) Efficiency of the operations of the

TARP in the use of appropriated funds.

(F) Compliance with all applicable laws

and regulations by the TARP, its agents and

representatives.

(G) The efforts of the TARP to prevent,

identify, and minimize conflicts of interest involving any agent or representative performing

activities on behalf of or under the authority of

the TARP.

(H) The efficacy of contracting procedures

pursuant to section 107(b), including, as applicable, the efforts of the TARP in evaluating

proposals for inclusion and contracting to the

maximum extent possible of minorities (as such

term is defined in 1204(c) of the Financial Institutions Reform, Recovery, and Enhancement

Act of 1989 (12 U.S.C. 1811 note), women,

and minority- and women-owned businesses, including ascertaining and reporting the total

amount of fees paid and other value delivered

by the TARP to all of its agents and representatives, and such amounts paid or delivered to

such firms that are minority- and women-owned

businesses (as such terms are defined in section

21A of the Federal Home Loan Bank Act (12

U.S.C. 1441a)).

(2) CONDUCT AND ADMINISTRATION OF OVER

SIGHT.—

(A) GAO PRESENCE.—The Secretary shall

provide the Comptroller General with appropriate space and facilities in the Department of

the Treasury as necessary to facilitate oversight

of the TARP until the termination date established in section 120.

(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 TARP, or

any vehicles established by the Secretary under

this Act, and to the officers, directors, employees, independent public accountants, financial

advisors, and other agents and representatives

of the TARP (as related to the agent or representative’s activities on behalf of or under the

authority of the TARP) or any such vehicle 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.

(C) REIMBURSEMENT COSTS.—The

OF

Treasury shall reimburse the Government Accountability Office for the full cost of any such

oversight activities as billed therefor by the

Comptroller General of the United States. Such

reimbursements shall be credited to the appropriation account ‘‘Salaries and Expenses, Government Accountability Office’’ current when

the payment is received and remain available

until expended.

(3) REPORTING.—The Comptroller General

shall submit reports of findings under this section,

regularly and no less frequently than once every 60

days, to the appropriate committees of Congress,

and the Special Inspector General for the Troubled

Asset Relief Program established under this Act on

the activities and performance of the TARP. The

Comptroller may also submit special reports under

this subsection as warranted by the findings of its

oversight activities.

(b) COMPTROLLER GENERAL AUDITS.—

(1) ANNUAL AUDIT.—The TARP shall annually

prepare and issue to the appropriate committees of

Congress and the public audited financial statements

prepared in accordance with generally accepted accounting principles, and the Comptroller General

shall annually audit such statements in accordance

with generally accepted auditing standards. The

Treasury shall reimburse the Government Accountability Office for the full cost of any such audit as

billed therefor by the Comptroller General. Such reimbursements shall be credited to the appropriation

account ‘‘Salaries and Expenses, Government Accountability Office’’ current when the payment is received and remain available until expended. The financial statements prepared under this paragraph

shall be on the fiscal year basis prescribed under

section 1102 of title 31, United States Code.

(2) AUTHORITY.—The Comptroller General

may audit the programs, activities, receipts, expenditures, and financial transactions of the TARP and

any agents and representatives of the TARP (as related to the agent or representative’s activities on

behalf of or under the authority of the TARP), including vehicles established by the Secretary under

this Act.

(3) CORRECTIVE RESPONSES TO AUDIT PROB

LEMS.—The TARP shall—

(A) take action to address deficiencies

identified by the Comptroller General or other

auditor engaged by the TARP; or

(B) certify to appropriate committees of

Congress that no action is necessary or appropriate.

(c) INTERNAL CONTROL.—

(1) ESTABLISHMENT.—The TARP shall establish and maintain an effective system of internal

control, consistent with the standards prescribed

under section 3512(c) of title 31, United States

Code, that provides reasonable assurance of—

(A) the effectiveness and efficiency of operations, including the use of the resources of the

TARP;

(B) the reliability of financial reporting, including financial statements and other reports

for internal and external use; and

(C) compliance with applicable laws and

regulations.

(2) REPORTING.—In conjunction with each annual financial statement issued under this section,

the TARP shall—

(A) state the responsibility of management

for establishing and maintaining adequate internal control over financial reporting; and

(B) state its assessment, as of the end of

the most recent year covered by such financial

statement of the TARP, of the effectiveness of

the internal control over financial reporting.

(d) SHARING OF INFORMATION.—Any report or audit

required under this section shall also be submitted to the

Congressional Oversight Panel established under section

125.

(e) TERMINATION.—Any oversight, reporting, or

audit requirement under this section shall terminate on

the later of—

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been

sold or transferred out of the ownership or control

of the Federal Government; or

(2) the date of expiration of the last insurance

contract issued under section 102.

SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.

(a) STUDY.—The Comptroller General shall undertake a study to determine the extent to which leverage

and sudden deleveraging of financial institutions was a

factor behind the current financial crisis.

(b) CONTENT.—The study required by this section

shall include—

(1) an analysis of the roles and responsibilities

of the Board, the Securities and Exchange Commission, the Secretary, and other Federal banking agencies with respect to monitoring leverage and acting

to curtail excessive leveraging;

(2) an analysis of the authority of the Board to

regulate leverage, including by setting margin requirements, and what process the Board used to decide whether or not to use its authority;

(3) an analysis of any usage of the margin authority by the Board; and

(4) recommendations for the Board and appropriate committees of Congress with respect to the

existing authority of the Board.

(c) REPORT.—Not later than June 1, 2009, the

Comptroller General shall complete and submit a report

on the study required by this section to the Committee

on Banking, Housing, and Urban Affairs of the Senate

and the Committee on Financial Services of the House of

Representatives.

(d) SHARING INFORMATION.—Any reports re OF

quired under this section shall also be submitted to the

Congressional Oversight Panel established under section

125.

SEC. 118. FUNDING.

For the purpose of the authorities granted in this

Act, and for the costs of administering those authorities,

the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States

Code, and the purposes for which securities may be issued

under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including

the payment of administrative expenses. Any funds expended or obligated by the Secretary for actions authorized by this Act, including the payment of administrative

expenses, shall be deemed appropriated at the time of such

expenditure or obligation.

SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.

(a) JUDICIAL REVIEW.—

(1) STANDARD.—Actions by the Secretary pursuant to the authority of this Act shall be subject to

chapter 7 of title 5, United States Code, including

that such final actions shall be held unlawful and set

aside if found to be arbitrary, capricious, an abuse

of discretion, or not in accordance with law.

(2) LIMITATIONS ON EQUITABLE RELIEF.—

(A) INJUNCTION.—No injunction or other

form of equitable relief shall be issued against

the Secretary for actions pursuant to section

101, 102, 106, and 109, other than to remedy

a violation of the Constitution.

(B) TEMPORARY RESTRAINING ORDER.—

Any request for a temporary restraining order

against the Secretary for actions pursuant to

this Act shall be considered and granted or denied by the court within 3 days of the date of

the request.

(C) PRELIMINARY INJUNCTION.—Any request for a preliminary injunction against the

Secretary for actions pursuant to this Act shall

be considered and granted or denied by the

court on an expedited basis consistent with the

provisions of rule 65(b)(3) of the Federal Rules

of Civil Procedure, or any successor thereto.

(D) PERMANENT INJUNCTION.—Any request for a permanent injunction against the

Secretary for actions pursuant to this Act shall

be considered and granted or denied by the

court on an expedited basis. Whenever possible,

the court shall consolidate trial on the merits

with any hearing on a request for a preliminary

injunction, consistent with the provisions of rule

65(a)(2) of the Federal Rules of Civil Procedure, or any successor thereto.

(3) LIMITATION ON ACTIONS BY PARTICIPATING

COMPANIES.—No action or claims may be brought

against the Secretary by any person that divests its

assets with respect to its participation in a program

under this Act, except as provided in paragraph (1),

other than as expressly provided in a written contract with the Secretary.

(4) STAYS.—Any injunction or other form of

equitable relief issued against the Secretary for actions pursuant to section 101, 102, 106, and 109,

shall be automatically stayed. The stay shall be lifted unless the Secretary seeks a stay from a higher

court within 3 calendar days after the date on which

the relief is issued.

(b) RELATED MATTERS.—

(1) TREATMENT OF HOMEOWNERS’ RIGHTS.—

The terms of any residential mortgage loan that is

part of any purchase by the Secretary under this Act

shall remain subject to all claims and defenses that

would otherwise apply, notwithstanding the exercise

of authority by the Secretary under this Act.

(2) SAVINGS CLAUSE.—Any exercise of the authority of the Secretary pursuant to this Act shall

not impair the claims or defenses that would otherwise apply with respect to persons other than the

Secretary. Except as established in any contract, a

servicer of pooled residential mortgages owes any

duty to determine whether the net present value of

the payments on the loan, as modified, is likely to

be greater than the anticipated net recovery that

would result from foreclosure to all investors and

holders of beneficial interests in such investment,

but not to any individual or groups of investors or

beneficial interest holders, and shall be deemed to

act in the best interests of all such investors or holders of beneficial interests if the servicer agrees to or

implements a modification or workout plan when the

servicer takes reasonable loss mitigation actions, including partial payments.

SEC. 120. TERMINATION OF AUTHORITY.

(a) TERMINATION.—The authorities provided under

sections 101(a), excluding section 101(a)(3), and 102

shall terminate on December 31, 2009.

(b) EXTENSION UPON CERTIFICATION.—The Secretary, upon submission of a written certification to Congress, may extend the authority provided under this Act

to expire not later than 2 years from the date of enactment of this Act. Such certification shall include a justification of why the extension is necessary to assist American families and stabilize financial markets, as well as

the expected cost to the taxpayers for such an extension.

SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROU

BLED ASSET RELIEF PROGRAM.

(a) OFFICE INSPECTOR GENERAL.—There is

OF

hereby established the Office of the Special Inspector General for the Troubled Asset Relief Program.

(b) APPOINTMENT INSPECTOR GENERAL; RE OF

MOVAL.—(1) The head of the Office of the Special Inspector General for the Troubled Asset Relief Program is the

Special Inspector General for the Troubled Asset Relief

Program (in this section referred to as the ‘‘Special Inspector General’’), who shall be appointed by the President, by and with the advice and consent of the Senate.

(2) The appointment of the Special Inspector General

shall be made on the basis of integrity and demonstrated

ability in accounting, auditing, financial analysis, law,

management analysis, public administration, or investigations.

(3) The nomination of an individual as Special Inspector General shall be made as soon as practicable after

the establishment of any program under sections 101 and

102.

(4) The Special Inspector General shall be removable

from office in accordance with the provisions of section

3(b) of the Inspector General Act of 1978 (5 U.S.C. App.).

(5) For purposes of section 7324 of title 5, United

States Code, the Special Inspector General shall not be

considered an employee who determines policies to be pursued by the United States in the nationwide administration of Federal law.

(6) The annual rate of basic pay of the Special Inspector General shall be the annual rate of basic pay provided for positions at level IV of the Executive Scheduleunder section 5315 of title 5, United States Code

.

(c) DUTIES.—(1) It shall be the duty of the Special

Inspector General to conduct, supervise, and coordinate

audits and investigations of the purchase, management,

and sale of assets by the Secretary of the Treasury under

any program established by the Secretary under section

101, and the management by the Secretary of any program established under section 102, including by collecting and summarizing the following information:

(A) A description of the categories of troubled

assets purchased or otherwise procured by the Secretary.

(B) A listing of the troubled assets purchased

in each such category described under subparagraph

(A).

(C) An explanation of the reasons the Secretary

deemed it necessary to purchase each such troubled

asset.

(D) A listing of each financial institution that

such troubled assets were purchased from.

(E) A listing of and detailed biographical information on each person or entity hired to manage

such troubled assets.

(F) A current estimate of the total amount of

troubled assets purchased pursuant to any program

established under section 101, the amount of troubled assets on the books of the Treasury, the

amount of troubled assets sold, and the profit and

loss incurred on each sale or disposition of each such

troubled asset.

(G) A listing of the insurance contracts issued

under section 102.

(2) The Special Inspector General shall establish,

maintain, and oversee such systems, procedures, and con

trols as the Special Inspector General considers appropriate to discharge the duty under paragraph (1).

(3) In addition to the duties specified in paragraphs

(1) and (2), the Inspector General shall also have the duties and responsibilities of inspectors general under the Inspector General Act of 1978.

(d) POWERS AND AUTHORITIES.—(1) In carrying out

the duties specified in subsection (c), the Special Inspector

General shall have the authorities provided in section 6

of the Inspector General Act of 1978.

(2) The Special Inspector General shall carry out the

duties specified in subsection (c)(1) in accordance with

section 4(b)(1) of the Inspector General Act of 1978.

(e) PERSONNEL, FACILITIES, OTHER RE AND

SOURCES.—(1) The Special Inspector General may select,

appoint, and employ such officers and employees as may

be necessary for carrying out the duties of the Special Inspector General, subject to the provisions of title 5, United

States Code, governing appointments in the competitive

service, and the provisions of chapter 51 and subchapter

III of chapter 53 of such title, relating to classification

and General Schedule pay rates.

(2) The Special Inspector General may obtain services as authorized by section 3109 of title 5, United States

Code, at daily rates not to exceed the equivalent rate pre

scribed for grade GS–15 of the General Schedule by section 5332 of such title.

(3) The Special Inspector General may enter into

contracts and other arrangements for audits, studies,

analyses, and other services with public agencies and with

private persons, and make such payments as may be necessary to carry out the duties of the Inspector General.

(4)(A) Upon request of the Special Inspector General

for information or assistance from any department, agency, or other entity of the Federal Government, the head

of such entity shall, insofar as is practicable and not in

contravention of any existing law, furnish such information or assistance to the Special Inspector General, or an

authorized designee.

(B) Whenever information or assistance requested by

the Special Inspector General is, in the judgment of the

Special Inspector General, unreasonably refused or not

provided, the Special Inspector General shall report the

circumstances to the appropriate committees of Congress

without delay.

(f) REPORTS.—(1) Not later than 60 days after the

confirmation of the Special Inspector General, and every

calendar quarter thereafter, the Special Inspector General

shall submit to the appropriate committees of Congress

a report summarizing the activities of the Special Inspec

tor General during the 120-day period ending on the date

of such report. Each report shall include, for the period

covered by such report, a detailed statement of all purchases, obligations, expenditures, and revenues associated

with any program established by the Secretary of the

Treasury under sections 101 and 102, as well as the information collected under subsection (c)(1).

(2) Nothing in this subsection shall be construed to

authorize the public disclosure of information that is—

(A) specifically prohibited from disclosure by

any other provision of law;

(B) specifically required by Executive order to

be protected from disclosure in the interest of national defense or national security or in the conduct

of foreign affairs; or

(C) a part of an ongoing criminal investigation.

(3) Any reports required under this section shall also

be submitted to the Congressional Oversight Panel established under section 125.

(g) FUNDING.—(1) Of the amounts made available

to the Secretary of the Treasury under section 118,

$50,000,000 shall be available to the Special Inspector

General to carry out this section.

(2) The amount available under paragraph (1) shall

remain available until expended.

(h) TERMINATION.—The Office of the Special Inspector General shall terminate on the later of—

(1) the date that the last troubled asset acquired by the Secretary under section 101 has been

sold or transferred out of the ownership or control

of the Federal Government; or

(2) the date of expiration of the last insurance

contract issued under section 102.

SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC

DEBT.

Subsection (b) of section 3101 of title 31, United

States Code, is amended by striking out the dollar limitation contained in such subsection and inserting

‘‘$11,315,000,000,000’’.

SEC. 123. CREDIT REFORM.

(a) IN GENERAL.—Subject to subsection (b), the

costs of purchases of troubled assets made under section

101(a) and guarantees of troubled assets under section

102, and any cash flows associated with the activities authorized in section 102 and subsections (a), (b), and (c)

of section 106 shall be determined as provided under the

Federal Credit Reform Act of 1990 (2 U.S.C. 661 et.

seq.)

.

(b) COSTS.—For the purposes of section 502(5) of

the Federal Credit Reform Act of 1990 (2 U.S.C.

661a(5))—

(1) the cost of troubled assets and guarantees

of troubled assets shall be calculated by adjusting

the discount rate in section 502(5)(E) (2 U.S.C.

661a(5)(E)) for market risks; and

(2) the cost of a modification of a troubled

asset or guarantee of a troubled asset shall be the

difference between the current estimate consistent

with paragraph (1) under the terms of the troubled

asset or guarantee of the troubled asset and the current estimate consistent with paragraph (1) under

the terms of the troubled asset or guarantee of the

troubled asset, as modified.

SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.

Section 257 of the National Housing Act (12 U.S.C.

1715z-23) is amended—

(1) in subsection (e)—

(A) in paragraph (1)(B), by inserting before ‘‘a ratio’’ the following: ‘‘, or thereafter is

likely to have, due to the terms of the mortgage

being reset,’’;

(B) in paragraph (2)(B), by inserting before the period at the end ‘‘(or such higher per

centage as the Board determines, in the discretion of the Board)’’;

(C) in paragraph (4)(A)—

(i) in the first sentence, by inserting

after ‘‘insured loan’’ the following: ‘‘and

any payments made under this paragraph,’’; and

(ii) by adding at the end the following: ‘‘Such actions may include making

payments, which shall be accepted as payment in full of all indebtedness under the

eligible mortgage, to any holder of an existing subordinate mortgage, in lieu of any

future appreciation payments authorized

under subparagraph (B).’’; and

(2) in subsection (w), by inserting after ‘‘administrative costs’’ the following: ‘‘and payments

pursuant to subsection (e)(4)(A)’’.

SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.

(a) ESTABLISHMENT.—There is hereby established

the Congressional Oversight Panel (hereafter in this section referred to as the ‘‘Oversight Panel’’) as an establishment in the legislative branch.

(b) DUTIES.—The Oversight Panel shall review the

current state of the financial markets and the regulatory

system and submit the following reports to Congress:

(1) REGULAR REPORTS.—

(A) IN GENERAL.—Regular reports of the

Oversight Panel shall include the following:

(i) The use by the Secretary of authority under this Act, including with respect to the use of contracting authority

and administration of the program.

(ii) The impact of purchases made

under the Act on the financial markets and

financial institutions.

(iii) The extent to which the information made available on transactions under

the program has contributed to market

transparency.

(iv) The effectiveness of foreclosure

mitigation efforts, and the effectiveness of

the program from the standpoint of minimizing long-term costs to the taxpayers

and maximizing the benefits for taxpayers.

(B) TIMING.—The reports required under

this paragraph shall be submitted not later

than 30 days after the first exercise by the Secretary of the authority under section

101(a) or

102, and every 30 days thereafter.

(2) SPECIAL RE REPORT ON REGULATORY

FORM.—The Oversight Panel shall submit a special

report on regulatory reform not later than January

20, 2009, analyzing the current state of the regulatory system and its effectiveness at overseeing the

participants in the financial system and protecting

consumers, and providing recommendations for improvement, including recommendations regarding

whether any participants in the financial markets

that are currently outside the regulatory system

should become subject to the regulatory system, the

rationale underlying such recommendation, and

whether there are any gaps in existing consumer

protections.

(c) MEMBERSHIP.—

(1) IN GENERAL.—The Oversight Panel shall

consist of 5 members, as follows:

(A) 1 member appointed by the Speaker of

the House of Representatives.

(B) 1 member appointed by the minority

leader of the House of Representatives.

(C) 1 member appointed by the majority

leader of the Senate.

(D) 1 member appointed by the minority

leader of the Senate.

(E) 1 member appointed by the Speaker of

the House of Representatives and the majority

leader of the Senate, after consultation with the

minority leader of the Senate and the minority

leader of the House of Representatives.

(2) PAY.—Each member of the Oversight Panel

shall each be paid at a rate equal to the daily equivalent of the annual rate of basic pay for level I of

the Executive Schedule for each day (including travel time) during which such member is engaged in

the actual performance of duties vested in the Commission.

(3) PROHIBITION OF COMPENSATION OF FED

EMPLOYEES.—Members of the Oversight

ERAL

Panel who are full-time officers or employees of the

United States or Members of Congress may not receive additional pay, allowances, or benefits by reason of their service on the Oversight Panel.

(4) TRAVEL EXPENSES.—Each member shall

receive travel expenses, including per diem in lieu of

subsistence, in accordance with applicable provisions

under subchapter I of chapter 57 of title 5, United

States Code.

(5) QUORUM.—Four members of the Oversight

Panel shall constitute a quorum but a lesser number

may hold hearings.

(6) VACANCIES.—A vacancy on the Oversight

Panel shall be filled in the manner in which the

original appointment was made.

(7) MEETINGS.—The Oversight Panel shall

meet at the call of the Chairperson or a majority of

its members.

(d) STAFF.—

(1) IN GENERAL.—The Oversight Panel may

appoint and fix the pay of any personnel as the

Commission considers appropriate.

(2) EXPERTS AND CONSULTANTS.—The Oversight Panel may procure temporary and intermittent

services under section 3109(b) of title 5, United

States Code.

(3) STAFF OF AGENCIES.—Upon request of the

Oversight Panel, the head of any Federal department or agency may detail, on a reimbursable basis,

any of the personnel of that department or agency

to the Oversight Panel to assist it in carrying out its

duties under this Act.

(e) POWERS.—

(1) HEARINGS AND SESSIONS.—The Oversight

Panel may, for the purpose of carrying out this section, hold hearings, sit and act at times and places,

take testimony, and receive evidence as the Panel

considers appropriate and may administer oaths or

affirmations to witnesses appearing before it.

(2) POWERS OF MEMBERS AND AGENTS.—Any

member or agent of the Oversight Panel may, if authorized by the Oversight Panel, take any action

which the Oversight Panel is authorized to take by

this section.

(3) OBTAINING OFFICIAL DATA.—The Oversight Panel may secure directly from any department or agency of the United States information

necessary to enable it to carry out this section. Upon

request of the Chairperson of the Oversight Panel,

the head of that department or agency shall furnish

that information to the Oversight Panel.

(4) REPORTS .—The Oversight Panel shall receive and consider all reports required to be submitted to the Oversight Panel under this Act.

(f) TERMINATION.—The Oversight Panel shall terminate 6 months after the termination date specified in section 120.

(g) FUNDING FOR EXPENSES.—

(1) AUTHORIZATION APPROPRIATIONS.—

OF

There is authorized to be appropriated to the Oversight Panel such sums as may be necessary for any

fiscal year, half of which shall be derived from the

applicable account of the House of Representatives,

and half of which shall be derived from the contingent fund of the Senate.

(2) REIMBURSEMENT AMOUNTS.—An

OF

amount equal to the expenses of the Oversight Panel

shall be promptly transferred by the Secretary, from

time to time upon the presentment of a statement

of such expenses by the Chairperson of the Oversight Panel, from funds made available to the Secretary under this Act to the applicable fund of the

House of Representatives and the contingent fund of

the Senate, as appropriate, as reimbursement for

amounts expended from such account and fund

under paragraph (1).

SEC. 126. FDIC AUTHORITY.

(a) IN GENERAL.—Section 18(a) of the Federal Deposit Insurance Act (12 U.S.C. 1828(a)) is amended by

adding at the end the following new paragraph:

‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC

NAMES, AND MISREPRESENTATION TO INDICATE IN

SURED STATUS.—

‘‘(A) PROHIBITION ADVER ON FALSE

TISING AND MISUSE OF FDIC NAMES.—No person may represent or imply that any deposit liability, obligation, certificate, or share is insured or guaranteed by the Corporation, if such

deposit liability, obligation, certificate, or share

is not insured or guaranteed by the Corporation—

‘‘(i) by using the terms ‘Federal Deposit’, ‘Federal Deposit Insurance’, ‘Federal Deposit Insurance Corporation’, any

combination of such terms, or the abbreviation ‘FDIC’ as part of the business

name or firm name of any person, including any corporation, partnership, business

trust, association, or other business entity;

or

‘‘(ii) by using such terms or any other

terms, sign, or symbol as part of an advertisement, solicitation, or other document.

‘‘(B) PROHIBITION ON MISREPRESENTA

TIONS OF INSURED STATUS.—No person may

knowingly misrepresent—

‘‘(i) that any deposit liability, obligation, certificate, or share is insured, under

this Act, if such deposit liability, obligation, certificate, or share is not so insured;

or

‘‘(ii) the extent to which or the manner in which any deposit liability, obligation, certificate, or share is insured under

this Act, if such deposit liability, obligation, certificate, or share is not so insured,

to the extent or in the manner represented.

‘‘(C) AUTHORITY OF THE APPROPRIATE

FEDERAL BANKING AGENCY.—The appropriate

Federal banking agency shall have enforcement

authority in the case of a violation of this paragraph by any person for which the agency is the

appropriate Federal banking agency, or any institution-affiliated party thereof.

‘‘(D) CORPORATION AUTHORITY IF THE

APPROPRIATE FEDERAL BANKING AGENCY

FAILS TO FOLLOW RECOMMENDATION.—

‘‘(i) RECOMMENDATION.—The Corporation may recommend in writing to the

appropriate Federal banking agency that

the agency take any enforcement action

authorized under section 8 for purposes of

enforcement of this paragraph with respect

to any person for which the agency is the

appropriate Federal banking agency or any

institution-affiliated party thereof.

‘‘(ii) AGENCY RESPONSE.—If the appropriate Federal banking agency does not,

within 30 days of the date of receipt of a

recommendation under clause (i), take the

enforcement action with respect to this

paragraph recommended by the Corporation or provide a plan acceptable to the

Corporation for responding to the situation

presented, the Corporation may take the

recommended enforcement action against

such person or institution-affiliated party.

‘‘(E) ADDITIONAL AUTHORITY.—In addition to its authority under subparagraphs (C)

and (D), for purposes of this paragraph, the