[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3232 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3232

 To amend the Emergency Economic Stabilization Act of 2008 to require 
 certain warrants held by the Secretary of the Treasury to be sold at 
public auction upon the repayment of the associated assistance provided 
                under the Troubled Asset Relief Program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 16, 2009

   Ms. Kilroy (for herself, Mr. Sherman, Ms. Sutton, Ms. Fudge, Mr. 
 Boccieri, Ms. Speier, and Mr. Grayson) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Emergency Economic Stabilization Act of 2008 to require 
 certain warrants held by the Secretary of the Treasury to be sold at 
public auction upon the repayment of the associated assistance provided 
                under the Troubled Asset Relief Program.

    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 ``Provide a Return on Financial 
Investment for the Taxpayer Act of 2009'' or as the ``PROFIT Act of 
2009''.

SEC. 2. PURPOSE.

    The purpose of this Act is to maximize the American taxpayers' 
return on its investment in troubled financial institutions through the 
Troubled Asset Relief Program (TARP).

SEC. 3. FINDINGS.

    The Congress finds the following:
            (1) During the wake of the economic crisis in the fall of 
        2008, American taxpayers assumed an enormous financial risk 
        when they bailed out troubled financial institutions.
            (2) To compensate for the risk assumed by American 
        taxpayers, banks that received TARP funds were required to give 
        the Department of Treasury warrants for the future purchase of 
        common shares, allowing American taxpayers an opportunity to 
        profit from the possible upside of their initial equity 
        investment.
            (3) The price at which the warrants are sold is critical as 
        the warrants represent the only opportunity for American 
        taxpayers to benefit from the risk they assumed in bailing out 
        troubled financial institutions.
            (4) However, in a July 10, 2009, oversight report, the TARP 
        Congressional Oversight Panel (COP) found that the process used 
        by the Department of Treasury to allow the initial 11 banks to 
        repurchase their warrants did so at just 66 percent of the 
        actual value of the warrants. If these warrants had been sold 
        for their current market value, American taxpayers would have 
        recovered $10 million more.
            (5) Furthermore, COP found that if the Department of 
        Treasury uses this same approach to repurchase all remaining 
        outstanding warrants, the shortfall to taxpayers could be as 
        much as $2.7 billion.
            (6) Finally, COP found that the Department of Treasury 
        would be more likely to maximize taxpayer returns if it sold 
        the warrants through an open, public auction, as an auction 
        would allow competitive market pressures in the bidding process 
        to push bids higher, thus maximizing the American taxpayers 
        overall return on its initial investment.

SEC. 4. SALE OF WARRANTS THROUGH A PUBLIC AUCTION.

    Section 111 of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5221) is amended--
            (1) by redesignating subsection (h) as subsection (i); and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Sale of Warrants Through a Public Auction.--
            ``(1) In general.--Each time a financial institution makes 
        a repayment of assistance provided under this title, the 
        Secretary shall sell warrants associated with such assistance 
        through a public auction.
            ``(2) Exception.--The requirement under paragraph (1) shall 
        not apply to warrants associated with a repayment made by a 
        financial institution that has received less than $250,000,000 
        of assistance under this title.''.
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