[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3690 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3690

  To help struggling families stay in their homes and to ensure that 
 taxpayers are protected when the Secretary of the Treasury purchases 
                equity shares in financial institutions.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

           November 17 (legislative day, September 17), 2008

  Mr. Durbin introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
  To help struggling families stay in their homes and to ensure that 
 taxpayers are protected when the Secretary of the Treasury purchases 
                equity shares in financial institutions.

    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 ``Homeowner Assistance and Taxpayer 
Protection Act''.

                     TITLE I--ASSISTING HOMEOWNERS

SEC. 101. RESTRUCTURING LOANS OWNED BY THE GOVERNMENT.

    (a) Mortgages Acquired by the Secretary.--Section 109(a) of the 
Emergency Economic Stabilization Act of 2008 (division A of Public Law 
110-343) is amended by striking ``encourage'' and inserting 
``require''.
    (b) Mortgages Held by Federal Property Managers.--Section 110(b)(1) 
of the Emergency Economic Stabilization Act of 2008 (division A of 
Public Law 110-343) is amended by striking ``encourage'' and inserting 
``require''.
    (c) Obligations Secured by Mortgages Held by Federal Property 
Managers.--Section 110(c)(1) of the Emergency Economic Stabilization 
Act of 2008 (division A of Public Law 110-343) is amended by striking 
``encourage'' and inserting ``require''.

SEC. 102. REQUIRING LENDERS TO PARTICIPATE IN HOPE FOR HOMEOWNERS 
              PROGRAM WHEN HOMEOWNERS ELECT TO PARTICIPATE.

    Section 257(b)(1) of the National Housing Act (12 U.S.C. 1715z-
23(b)(1)) is amended by striking ``and existing loan holders'' and 
inserting ``, but required on the part of existing loan holders when 
homeowners apply,''.

SEC. 103. HELPING FAMILIES SAVE THEIR HOMES IN BANKRUPTCY.

    (a) Special Rules for Modification of Loans Secured by 
Residences.--
            (1) In general.--Section 1322(b) of title 11, United States 
        Code, is amended--
                    (A) in paragraph (10), by striking ``and'' at the 
                end;
                    (B) by redesignating paragraph (11) as paragraph 
                (12); and
                    (C) by inserting after paragraph (10) the 
                following:
            ``(11) notwithstanding paragraph (2) and otherwise 
        applicable nonbankruptcy law--
                    ``(A) modify an allowed secured claim secured by 
                the debtor's principal residence, as described in 
                subparagraph (B), if, after deduction from the debtor's 
                current monthly income of the expenses permitted for 
                debtors described in section 1325(b)(3) of this title 
                (other than amounts contractually due to creditors 
                holding such allowed secured claims and additional 
                payments necessary to maintain possession of that 
                residence), the debtor has insufficient remaining 
                income to retain possession of the residence by curing 
                a default and maintaining payments while the case is 
                pending, as provided under paragraph (5); and
                    ``(B) provide for payment of such claim--
                            ``(i) in an amount equal to the amount of 
                        the allowed secured claim;
                            ``(ii) for a period that is not longer than 
                        40 years; and
                            ``(iii) at a rate of interest accruing 
                        after such date calculated at a fixed annual 
                        percentage rate, in an amount equal to the most 
                        recently published annual yield on conventional 
                        mortgages published by the Board of Governors 
                        of the Federal Reserve System, as of the 
                        applicable time set forth in the rules of the 
                        Board, plus a reasonable premium for risk; 
                        and''.
            (2) Conforming amendment.--Section 1325(a)(5) of title 11, 
        United States Code, is amended by inserting before ``with 
        respect'' the following: ``except as otherwise provided in 
        section 1322(b)(11) of this title,''.
    (b) Waiver of Counseling Requirement When Homes Are in 
Foreclosure.--Section 109(h) of title 11, United States Code, is 
amended by adding at the end the following:
            ``(5) The requirements of paragraph (1) shall not apply 
        with respect to a debtor who files with the court a 
        certification that a foreclosure sale of the debtor's principal 
        residence has been scheduled.''.
    (c) Combating Excessive Fees.--Section 1322(c) of title 11, the 
United States Code, is amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following:
            ``(3) the plan need not provide for the payment of, and the 
        debtor, the debtor's property, and property of the estate shall 
        not be liable for, any fee, cost, or charge, notwithstanding 
        section 506(b), that arises in connection with a claim secured 
        by the debtor's principal residence if the event that gives 
        rise to such fee, cost, or charge occurs while the case is 
        pending but before the discharge order, except to the extent 
        that--
                    ``(A) notice of such fees, costs, or charges is 
                filed with the court, and served on the debtor and the 
                trustee, before the expiration of the earlier of--
                            ``(i) 1 year after the event that gives 
                        rise to such fee, cost, or charge occurs; or
                            ``(ii) 60 days before the closing of the 
                        case; and
                    ``(B) such fees, costs, or charges are lawful, 
                reasonable, and provided for in the agreement under 
                which such claim or security interest arose;
            ``(4) the failure of a party to give notice described in 
        paragraph (3) shall be deemed a waiver of any claim for fees, 
        costs, or charges described in paragraph (3) for all purposes, 
        and any attempt to collect such fees, costs, or charges shall 
        constitute a violation of section 524(a)(2) of this title or, 
        if the violation occurs before the date of discharge, of 
        section 362(a) of this title; and
            ``(5) a plan may provide for the waiver of any prepayment 
        penalty on a claim secured by the principal residence of the 
        debtor.''.
    (d) Prohibiting Claims Arising From Violations of Consumer 
Protection Laws.--Section 502(b) of title 11, United States Code, is 
amended--
            (1) in paragraph (8), by striking ``or'' at the end;
            (2) in paragraph (9), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(10) such claim includes a request for damages or 
        rescission based on a failure to comply with the Truth in 
        Lending Act (15 U.S.C. 1601 et seq.), or any other provision of 
        applicable State or Federal consumer protection law in force 
        when the failure to comply occurred, notwithstanding a prior 
        entry of a foreclosure judgment.''.
    (e) Application of Amendments.--The amendments made to title 11, 
United States Code, by this section shall apply with respect to cases 
commenced under that title 11 on or after the date of enactment of this 
Act, or pending on the date of enactment of this Act.

                     TITLE II--PROTECTING TAXPAYERS

SEC. 201. BARRING DIVIDEND INCREASES.

    Section 113(d) of the Emergency Economic Stabilization Act of 2008 
(division A of Public Law 110-343) is amended by adding at the end the 
following:
            ``(4) Dividends.--If the Secretary purchases troubled 
        assets under the authority of this Act, the financial 
        institutions from which such assets are purchased may not pay 
        dividends in a cumulative amount that is higher in the current 
        or a future fiscal year than the cumulative dividends paid in 
        the fiscal year immediately preceding the sale of the troubled 
        assets until such time as the troubled assets are no longer 
        owned by the Secretary.''.

SEC. 202. REDUCING DIVIDENDS TO PAY FOR EXCESSIVE EXECUTIVE 
              COMPENSATION.

    Section 111(b)(2) of the Emergency Economic Stabilization Act of 
2008 (Public Law 110-343) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(D) a reduction in dividends paid by the 
                institution in its next fiscal year equal to the 
                executive compensation paid to senior executive 
                officers in excess of $500,000 per officer in the 
                current fiscal year.''.
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