Short title

This Act may be cited as the

Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security Act of 2008

or the

No BAILOUTS Act of 2008

Findings

Congress finds that— (1)distinguished economists across the world have concluded the Secretary of the Treasury Paulson’s $700 billion bailout will not resolve the liquidity concerns facing the financial sector; and (2)there are simple regulatory fixes to resolve the current financial industry liquidity concerns at little cost to the taxpayer.

S.E.C. report on application of accounting rules

The Securities and Exchange Commission shall report to Congress not later than 180 days after the date of enactment of this Act on the effect of the Commission’s clarification on fair value accounting issued September 30, 2008.

Prohibition on naked short selling

(a)

Extension of order

Notwithstanding the effective date contained in the order of the Securities and Exchange Commission issued September 17, 2008 (Release no. 34–58572) and the limitations contained in section 12(k)(2)(B) and (C) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(k)(2)(B) and (C)), such order shall continue in effect until— (1)cancelled or withdrawn by the Commission; or (2)repealed by Act of Congress. (b)

Permanent rule

Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall, by rule, make permanent the requirements contained in the order described in subsection (a). Such rulemaking shall provide for the termination of such order upon the effective date of such permanent rule.

Reinstatement of uptick rule on short sales of securities

Not later than 90 days after the date of enactment of this Act, the Securities and Exchange Commission shall— (1)reinstate rule 10a–1 of the Commission’s rules (17 CFR 240.10a–1); (2)rescind rule 201 of regulation SHO (17 CFR 242.201); and (3)take such other actions as may be necessary to reinstate the price test restrictions that applied to short sales of securities prior to the Commission’s action in the proceeding entitled Regulation SHO and Rule 10a-1, adopted June 28, 2007 (Release No. 34–55970; File No. S7–21–06).

Net worth certificate program

(a)

Establishment; purposes

(1)

Establishment

As soon as possible after the date of the enactment of this Act, the Board of Directors of the Federal Deposit Insurance Corporation (hereafter in this section referred to as the Corporation) shall establish a net worth certificate program under this section to provide capital to insured depository institutions (as such term is defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) to assist such institutions to resolve solvency problems. (2)

Purposes

The purposes of the net worth certificate program established under this section shall be— (A)to improve the capital position of troubled insured depository institutions with real estate holdings; (B)to provide such insured depository institutions the ability to sell and restructure assets; and (C)to assist such institutions in their recovery without use of taxpayer funds. (b)

Principles

The net worth program established under this section shall— (1)be based upon the Federal Savings and Loan Insurance Corporation net worth program established under title II of the Garn-St Germain Depository Institutions Act of 1982 (Public Law 97–320; 96 Stat. 1489); (2)be made available only for troubled financial depository institutions that the Corporation determines could be financially viable if provided solvency assistance under the program; (3)provide for the Corporation to purchase capital in troubled insured depository institutions in the form of subordinated debentures or net worth certificates in such institutions; (4)provide that insured depository institutions participating in the program shall agree to such regulations and terms of the program as the Corporation shall provide, which shall include strict oversight and supervision, including limitations on the compensation of senior executive officers of such institutions and terms for removal of officers for poor management; (5)provide that the Corporation shall fund net worth certificates under the program by issuance of Corporation senior notes and obligations to participating insured depository institutions; (6)provide that the interest rate on net worth certificates issued under the program and the senior notes and obligations issued under the program by the Corporation shall be identical; (7)not involve any subsidy, appropriation of funds, or other cash outlay or use of taxpayer funds; (8)provide that asset sale transactions under the program be held in the private market. (c)

Regulations

The Board of Directors of the Corporation shall prescribe any regulations necessary to carry out the net worth certificate program established under this section.

Increase in maximum amount of deposit insurance and share insurance

(a)

Standard maximum deposit insurance amount increased

Section 11(a) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended— (1)in subparagraph (E), by striking $100,000 and all that follows through the end of the subparagraph and inserting $250,000.; and (2)in subparagraph (F)(i)(I), by striking $100,000 and inserting $250,000. (b)

Standard maximum share insurance amount increased

Section 207(k)(5) of the Federal Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by striking $100,000 and inserting $250,000.