[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2666 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2666

    To require the Federal Trade Commission to conduct a rulemaking 
    proceeding with respect to mortgage foreclosure rescue and loan 
             modification services, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 2, 2009

  Ms. Matsui (for herself and Ms. Moore of Wisconsin) introduced the 
   following bill; which was referred to the Committee on Financial 
Services, and in addition to the Committee on Energy and Commerce, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
    To require the Federal Trade Commission to conduct a rulemaking 
    proceeding with respect to mortgage foreclosure rescue and loan 
             modification services, and for other purposes.

    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 ``Mortgage Foreclosure Rescue and Loan 
Modification Services Fraud Prevention Act of 2009''.

SEC. 2. FTC RULEMAKING AUTHORITY MORTGAGE FORECLOSURE RESCUE AND LOAN 
              MODIFICATION SERVICES.

    (a) Rulemaking.--
            (1) In general.--The Federal Trade Commission shall conduct 
        a rulemaking proceeding, beginning no later than 90 days after 
        the date of the enactment of this Act, with respect to mortgage 
        foreclosure rescue and loan modification services, in 
        accordance with section 553 of title 5, United States Code. The 
        rulemaking shall include the requirements set forth in 
        paragraph (4) below.
            (2) Exclusion.--A rule described in paragraph (1) shall not 
        apply to an entity that is not subject to enforcement by the 
        Commission under the Federal Trade Commission Act.
            (3) Enforcement.--
                    (A) Violations.--Any violation of a rule prescribed 
                under this subsection shall be treated as a violation 
                of a rule under section 18 of the Federal Trade 
                Commission Act (15 U.S.C. 57a) regarding unfair or 
                deceptive acts or practices.
                    (B) Powers and manner of enforcement.--The Federal 
                Trade Commission shall enforce any rule prescribed 
                under this subsection in the same manner, by the same 
                means, and with the same jurisdiction, powers, and 
                duties as though all applicable terms and provisions of 
                the Federal Trade Commission Act were incorporated into 
                and made part of this section.
            (4) Rule requirements.--The Federal Trade Commission shall 
        include in the rule prescribed under this subsection the 
        following:
                    (A) A requirement that any mortgage foreclosure 
                rescue or loan modification service provided to a 
                homeowner related to the foreclosure of residential 
                real property contain a written contract that contains 
                clear and prominent disclosures regarding the nature of 
                the contract, the services to be provided and results 
                to be achieved, and the total amount and terms of 
                compensation.
                    (B) A requirement that any contract referred to in 
                subparagraph (A) contain a clearly and prominently 
                disclosed right for the homeowner to cancel within a 
                set number of business days as determined by the 
                Federal Trade Commission with no penalty or obligation.
                    (C) A requirement that prohibits or restricts 
                mortgage foreclosure rescue and loan modification 
                services from requesting or receiving any funds until 
                any such services have been fully performed and results 
                have been achieved and the services and results have 
                been documented to the consumer.
                    (D) Other prohibitions or restrictions on mortgage 
                foreclosure rescue and loan modification services that 
                are unfair or deceptive acts or practices.
            (5) Exemption.--The Commission shall have the authority to 
        exempt entities from the requirements of the rule that it 
        issues to implement this Act, if it determines that the 
        inclusion of such entities in the rule is not necessary to 
        prevent or deter consumer injury.
            (6) No preemption.--No rule prescribed under this 
        subsection may be construed as preempting any provision of the 
        law of any State.
    (b) Enforcement by State Attorneys General.--
            (1) In general.--Except as provided in paragraph (6), in 
        any case in which the attorney general of a State has reason to 
        believe that an interest of the residents of that State has 
        been or is threatened or adversely affected by the engagement 
        of any person in a practice that violates a rule prescribed 
        under subsection (a), the State, as parens patriae, may bring a 
        civil action on behalf of the residents of the State in an 
        appropriate district court of the United States or other court 
        of competent jurisdiction to--
                    (A) enjoin that practice;
                    (B) enforce compliance with the rule;
                    (C) obtain damages, restitution, or other 
                compensation on behalf of residents of the State;
                    (D) obtain penalties provided for under subsection 
                (a); and
                    (E) obtain such other relief as the court may 
                consider to be appropriate.
            (2) Notice.--
                    (A) Notice to commission.--The State shall serve 
                written notice to the Commission of any civil action 
                under paragraph (1) at least 60 days prior to 
                initiating such civil action.
                    (B) Copy of complaint.--The notice served under 
                subparagraph (A) shall include a copy of the complaint 
                to be filed to initiate such civil action, except that 
                if it is not feasible for the State to provide such 
                prior notice, the State shall provide notice 
                immediately upon instituting such civil action.
            (3) Intervention by ftc.--Upon receiving the notice 
        required by paragraph (2), the Commission may intervene in such 
        civil action and upon intervening--
                    (A) be heard on all matters arising in such civil 
                action;
                    (B) remove the action to the appropriate United 
                States district court; and
                    (C) file petitions for appeal of a decision in such 
                civil action.
            (4) Savings clause.--No provision of this section shall be 
        construed as--
                    (A) preventing the attorney general of a State from 
                exercising the powers conferred on the attorney general 
                by the laws of such State to conduct investigations or 
                to administer oaths or affirmations or to compel the 
                attendance of witnesses or the production of 
                documentary and other evidence; or
                    (B) prohibiting the attorney general of a State, or 
                other authorized State officer, from proceeding in 
                State or Federal court on the basis of an alleged 
                violation of any civil or criminal statute of that 
                State.
            (5) Venue; service of process; joinder.--In a civil action 
        brought under paragraph (1)--
                    (A) the venue shall be a judicial district in which 
                the defendant or a related party is found, is an 
                inhabitant, or transacts business, or wherever venue is 
                proper under section 1391 of title 28, United States 
                Code;
                    (B) process may be served without regard to the 
                territorial limits of the district or of the State in 
                which the civil action is instituted; and
                    (C) a person who participated with the defendant or 
                a related party in an alleged violation that is being 
                litigated in the civil action may be joined in the 
                civil action without regard to the residence of the 
                person.
            (6) Preemptive action by ftc.--Whenever a civil action or 
        an administrative action has been instituted by or on behalf of 
        the Commission for violation of any rule described under 
        paragraph (1), no State may, during the pendency of such action 
        instituted by or on behalf of the Commission, institute a civil 
        action under paragraph (1) against any defendant named in the 
        complaint in such action for violation of any rule as alleged 
        in such complaint.
            (7) Award of costs and fees.--If the attorney general of a 
        State prevails in any civil action under paragraph (1), the 
        State may recover reasonable costs and attorney fees from the 
        defendant or a related party.
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