[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7226 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 7226

 To direct the Federal Deposit Insurance Corporation to create a ``net 
worth certificate'' program along the lines of what Congress enacted in 
              the 1980s for the savings and loan industry.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2008

    Mr. Shadegg (for himself, Mr. Kingston, Mr. Roskam, Mr. Deal of 
Georgia, Mr. Fortenberry, Mr. Gingrey, Mr. Westmoreland, Mrs. Bachmann, 
Mr. Sali, Mr. Weldon of Florida, Mr. Gohmert, Ms. Foxx, Mrs. Drake, Mr. 
    Garrett of New Jersey, Mr. Sessions, Mr. Pearce, Mr. Akin, Mr. 
 Hoekstra, Mr. Rogers of Michigan, Mr. Barrett of South Carolina, Mr. 
 Flake, Mrs. Blackburn, Mr. Brady of Texas, Mr. Carter, Mr. McCaul of 
Texas, Mr. Tiberi, Ms. Ginny Brown-Waite of Florida, Mr. Sam Johnson of 
 Texas, Mr. King of Iowa, Mr. Manzullo, Mr. Sensenbrenner, Mr. Feeney, 
 Mrs. Biggert, and Mr. Doolittle) introduced the following bill; which 
          was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To direct the Federal Deposit Insurance Corporation to create a ``net 
worth certificate'' program along the lines of what Congress enacted in 
              the 1980s for the savings and loan industry.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Net Worth Certificate Program Act of 
2008''.

SEC. 2. SPECIFICATION OF CONSTITUTIONAL AUTHORITY FOR ENACTMENT OF LAW.

    This Act is enacted pursuant to power granted Congress under 
article 1, section 8, clause 3 of the United States Constitution.

SEC. 3. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) The Federal Deposit Insurance Corporation enacted a 
        similar program in the 1980s;
            (2) That program, in the 1980s, resolved a $100 billion 
        insolvency in the savings banks for a total cost of less than 
        $2 billion;
            (3) Such a program will bolster the capital position of 
        banks with real estate holdings;
            (4) Such a program will give banks the ability to sell and 
        restructure assets and get on with their rehabilitation; and
            (5) This program would not require taxpayer money would be 
        spent, and the asset sale transactions would remain in the 
        private sector where they belong.
    (b) Purpose.--The purpose of this Act is to:
            (1) Create a program, managed by the Chairman of the 
        Federal Deposit Insurance Corporation, to purchase net worth 
        certificates in order to help banks with their capital 
        position.

SEC. 4. NET WORTH CERTIFICATE PROGRAM.

    The Chairman of the Federal Deposit Insurance Corporation is 
directed to create a net worth certificate program that will settle the 
financial markets without significant expense to taxpayers.
            (1) The program created by the Chairman of the Federal 
        Deposit Insurance Corporation will be authorized to purchase 
        net worth certificates by issuing FDIC senior notes to the 
        banks in the form of subordinated debentures, a commonly used 
        form of capital in banks, or in any other form the Chairman 
        determines meets the goals and requirements of this program;
            (2) For a bank to be eligible to participate in the program 
        the Chairman must certify that it is both in danger of failing, 
        and could be viable if they were given more time than they are 
        eligible to participate;
            (3) The Chairman is required to issue new, strict 
        supervision rules for banks that wish to enter the program and 
        the banks must document their agreement to comply with the new 
        rules. These new oversight rules must also include, but are not 
        to be limited to, oversight of compensation of top executives 
        and removal of poor management.
                                 <all>